Bikaji Foods International Ltd:Annual Report 2023-24 Analysis

Bikaji Foods International Ltd: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History:

Bikaji Foods International Ltd. was founded in 1987 by Shivratan Agarwal, a descendant of the Haldiram family. The company started with a vision to bring traditional Indian snacks and sweets to a wider audience.

Headquarters Location and Global Presence:

• Headquarters: Bikaner, Rajasthan, India
• Global Presence: Primarily in India, but also exports to various countries including North America, Europe, the Middle East, Africa, and Asia.

Company Vision and Mission:

• Vision: To become a globally recognized and respected Indian snack and sweets brand, known for quality, innovation, and tradition.
• Mission: To provide delicious and authentic Indian snacks and sweets using the finest ingredients and traditional recipes, while maintaining the highest standards of quality and hygiene.

Key Milestones in Their Growth Journey:

• 1987: Established as Shivdeep Industries Limited.
• 2005: Launched the Bikaji brand.
• 2010: Expanded production capacity to meet growing demand.
• 2018: Restructured and renamed as Bikaji Foods International Limited.
• 2022: Initial Public Offering (IPO)

Stock Exchange Listing Details and Market Capitalization:

• Stock Exchange Listing: National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)
• Market Capitalization: (Check live market data for the most up-to-date information)

Recent Financial Performance Highlights:

• (Refer to the latest annual reports and financial statements available on the company’s website or stock exchange filings for specific revenue, profit, and growth figures).

Management Team and Leadership Structure:

• Chairman & Managing Director: Shivratan Agarwal
• Executive Director: Deepak Agarwal
• (Refer to the company’s website or annual reports for a complete list of key management personnel and their roles)

Any Notable Awards or Recognitions:

• (Refer to the company’s website for any details about awards and recognition)

Their Products #

Complete Product Portfolio with Categories:

• Bhujia: A wide variety of bhujia, the company’s flagship product.
• Namkeen: A range of savory snacks like mixtures, chivda, and sev.
• Sweets: Traditional Indian sweets like rasgulla, gulab jamun, and soan papdi.
• Frozen Products: Frozen snacks and ready-to-eat meals.
• Cookies: A selection of biscuits and cookies.
• Western Snacks: Potato chips and other western-style snacks.

Flagship or Signature Product Lines:

• Bhujia: Especially the Bikaneri Bhujia, is considered their signature product.

Key Technological Innovations or Patents:

• (Refer to the company’s website for details about patents and technological innovation)

Manufacturing Facilities and Production Capacity:

• The company has several manufacturing facilities located primarily in Rajasthan, India.
• (Refer to the company’s website for specific production capacities of various facilities)

Quality Certifications and Standards:

• ISO 22000:2018 (Food Safety Management System)
• HACCP (Hazard Analysis and Critical Control Points)

Any Unique Selling Propositions or Technological Advantages:

• Authenticity: Focus on traditional recipes and flavors.
• Quality Ingredients: Sourcing high-quality raw materials.
• Wide Product Range: Diverse portfolio catering to different tastes.

Recent Product Launches or R&D Initiatives:

• (Refer to the company’s website or press releases for the most up-to-date information on recent product launches and R&D initiatives)

Primary Customers #

Geographic Markets (Domestic vs. International):

• Domestic: Primarily India, with a strong presence in North and West India.
• International: North America, Europe, the Middle East, Africa, and Asia.

Distribution Network and Sales Channels:

• Extensive Distribution Network: A wide network of distributors, retailers, and wholesalers.
• Sales Channels:
  • Modern Retail: Supermarkets, hypermarkets, and convenience stores.
  • Traditional Retail: Local grocery stores and general stores.
  • Online Channels: E-commerce platforms and the company’s own website.
  • Institutional Sales: Catering to hotels, restaurants, and other institutions.

Major Competitors #

Direct Competitors in India and Globally:

• India: Haldiram’s, Balaji Wafers, Prataap Snacks (Diamond Chips), DFM Foods.
• Global: Large multinational snack food companies like PepsiCo (Lay’s, Kurkure) and ITC (Bingo!).

Competitive Advantages and Disadvantages:

• Advantages: Strong brand recognition in specific regions of India, focus on traditional products, established distribution network.
• Disadvantages: Higher reliance on the Indian market, potentially higher production costs compared to larger multinational companies, limited global brand recognition compared to larger peers.

How They Differentiate from Competitors:

• Focus on Traditional Indian Snacks and Sweets: Emphasizing authenticity and regional flavors.
• Strong Regional Presence: Building a strong brand image in key regions like Rajasthan and North India.

Market Positioning Strategy:

• Positioned as a provider of authentic and high-quality Indian snacks and sweets.
• Targeting consumers who value traditional flavors and are looking for a trusted brand.

Future Outlook #

Expansion Plans or Growth Strategy:

• Expanding its presence in existing markets through increased distribution and marketing efforts.
• Entering new geographic markets, both domestically and internationally.
• Increasing production capacity to meet growing demand.
• Acquiring or partnering with other food companies to expand its product portfolio.

Sustainability Initiatives or ESG Commitments:

• (Refer to the company’s website for specific details about sustainability initiatives)

Industry Trends Affecting Their Business:

• Growing demand for convenience foods and snacks.
• Increasing consumer awareness of health and wellness.
• Rise of e-commerce and online food delivery platforms.
• Increasing competition from both domestic and international players.

Financial Performance Analysis of Bikaji Foods International #

3-Year Trend Analysis of Key Financial Metrics #

Key Observations: #

• Strong Growth: Bikaji has demonstrated substantial growth in revenue and profitability over the past two years.
• Improving Profitability: Both EBITDA and PAT margins show significant improvement, pointing to better cost control and operational efficiency.
• Healthy Financial Position: The company maintains a low debt-to-equity ratio, signifying a solid financial foundation.
• Above average performance: Bikaji has a better performance comparing all the metrics.

Business Segment Performance #

Key Observations: #

• The “Others” category has seen the most substantial growth, while the rest of the categories saw steady growth.

Major Strategic Initiatives and Their Progress #

• Frozen Food Production Line: A new production line for frozen foods was established in Bikaner in November 2023. This is a key strategic move to diversify the product portfolio and enter a growing market segment.
• Production Linked Incentive (PLI) Scheme: The Company received approval and is participating in the MOFPI’s PLI Scheme. They have fulfilled conditions and recognized significant income (₹ 9,305 Lakh) under this scheme in FY24.
• Subsidiary Incorporation and Acquisitions: Bikaji Foods International USA Corp was incorporated to strengthen the US distribution network. Bhujialalji Private Limited (49% stake acquired) and Bikaji Mega Food Park Private Limited (51% stake acquired) were added to enhance market position and operational efficiency.
• Amalgamation: Hanuman Agrofood Private Limited, a wholly-owned subsidiary, was merged with the Company, effective February 14, 2024, to streamline operations.
• Distribution Expansion: The company is actively expanding its direct and indirect distribution reach, aiming to increase its outlet count to 3.50 Lakh by FY25.
• Brand Ambassador: Agreement with Mr. Amitabh Bachchan was renewed till October 2025.
• Marketing Efforts: Renew brand focus in core and focus markets through ATL, BTL, and Digital Marketing channels.

Risk Landscape Changes #

• Competition: The Indian snacks industry is highly competitive. Bikaji acknowledges the need for continuous innovation and product diversification to maintain market share.
• Raw Material Price Fluctuations: Volatility in prices of key raw materials (flour, lentils, pulses, potatoes, vegetable oils) is a significant risk. Mitigation strategies include building strong supplier relationships and diversifying the supplier base.
• Supply Chain Disruptions: Potential disruptions (like those experienced during COVID-19) could impact material availability and production. Inventory management is a key mitigation strategy.
• Changing Consumer Preferences: The Company highlights the need for continuous market research to adapt to evolving consumer tastes.
• Quality Control Issues: Food safety is a paramount concern. The Company maintains strict quality control measures to mitigate risks and protect brand reputation.
• Inflationary Pressures: The Company mentions an aim to achieve 50% capacity utilization in FY25 but also acknowledges the ongoing risk of inflationary pressure on key materials.

ESG Initiatives and Metrics #

Environmental: #

• Tree plantation drive: 21,000 trees planted on World Environment Day across multiple locations.
• Solar energy plants installed in Bikaner (1800 KW, 1168 KW, and 726 KW).
• Vapour Absorption Method (VAM) system implemented to utilize waste steam.
• Effluent Treatment Plant (ETP) established for water recycling.
• Rainwater harvesting implemented.
• Use of Electric Induction Kettles.
• Waste management: Partnership with waste management company for plastic waste.

Social: #

• Employee welfare programs: Expanded health benefits, financial planning, professional development, flexible working arrangements, and mental health support.
• CSR initiatives: Health camps, environmental sustainability projects (‘Aranya Ropan’ with thousands of trees planted), education and skill development programs for underprivileged children and youth.

Governance: #

• Board Diversity Policy in place.
• Code of Conduct for Board and Senior Management.
• Whistle Blower Policy/Vigil Mechanism.
• Human Rights Policy.

Detailed quantitative ESG metrics (e.g., specific energy consumption reduction, water usage reduction, waste reduction percentages) are not comprehensively provided in the document, except for the number of trees planted.

Management Outlook #

• Positive Overall Outlook: The management expresses optimism about future growth, citing strong domestic demand, government spending, and a conducive investment environment in India.
• Growth Strategy: Focus on increasing consumption and market reach in established (core) markets, while building distribution networks and service models in new (focus) states. Focus states are projected to outperform core states.
• Export Market: Significant growth potential is seen in the export market, particularly for frozen products.
• Capacity Utilization: Targeting over 50% capacity utilization in FY25.
• Product Diversification: Expansion of product portfolio into puffs, rusks, bakery items, and expansion of the frozen food category.
• Brand Building: Substantial investments in advertising and communication, including continued partnership with Amitabh Bachchan.
• Operational Efficiency: Emphasis on technology adoption and process improvement to enhance operational efficiency.
• Risk Management: Acknowledgment of key risks (competition, raw material price fluctuations, supply chain disruptions) and ongoing mitigation strategies.

Key Management Priorities: #

• Maximize stakeholder value.
• Fortify Bikaji as a forward-looking organization.
• Introduce quality innovations.
• Prioritize consumer preferences.
• Ensure enhanced returns on investment for shareholders.
• Meaningful impact on local communities.

Detailed Analysis #

Bikaji Foods International Limited - Financial Analysis #

Balance Sheet Analysis #

3-Year Comparative Analysis of Assets, Liabilities, and Equity (Consolidated) #

Significant Changes in Major Line Items (>10% YoY) #

The reported numbers for march 31,2023 and April 1, 2022 were restated due to amalgamation of Hanuman Agrofood Private Limited.

Working Capital Trends #

Analysis: #

Working capital has increased significantly, indicating improved short-term liquidity. Current ratio also improved in current year.

Asset Quality Metrics #

Analysis: #

Bikaji, as a manufacturing and sales company, doesn’t have traditional “loans” as assets, making NPA metrics irrelevant. The company does report trade receivables, and there is a very minor provision for Expected Credit Losses, the allowance is so small relative to the total receivables that it suggests excellent asset quality in this area.

Debt Structure and Maturity Profile #

Analysis: #

• The Group relies on a mix of long-term and short-term debt, with a significant portion being short-term loans repayable on demand.
• A part of Long Term Borrowing has been reclassified into current borrowing, due to maturity.
• The Company has both secured and unsecured borrowing. *The repayment terms on the term loans are on monthly/ quarterly/ half-yearly basis.

Off-Balance Sheet Items #

Analysis: #

Contingent liabilities have increased, which warrants further investigation to understand the nature of these liabilities. Capital commitments are substantial, suggesting ongoing investment in fixed assets. The corporate guarantee provided to the subsidiary should be monitored, as well the status of revocation from Bank.

Important Considerations: #

• Restated Figures: Note 47(d) indicates figures for March 31, 2023, have been restated due to a merger. This affects year-over-year comparisons.
• Limited Scope: This analysis is limited by the information available in the provided document. A comprehensive analysis would require access to the full financial statements and management disclosures.
• Materiality Level of materiality is not defined.

Bikaji Foods International Limited Financial Analysis (FY24) #

Revenue Breakdown #

Segment Revenue (FY24 vs. FY23, in Crores) #

• Ethnic Snacks: ₹1547.2 Cr (FY24) vs. ₹1364 Cr (FY23), Growth: 13.4%
• Packaged Sweets: ₹299.1 Cr (FY24) vs. ₹261.4 Cr (FY23), Growth: 14.4%
• Western Snacks: ₹182.9 Cr (FY24) vs. ₹161.6 Cr (FY23), Growth: 13.2%
• Papad: 134.9cr vs 122.5 Growth: 10.12%
• Others: 165.24 vs 56.57, Growth 192.1%
• Total: ₹2329.34 Cr (FY24) vs. ₹1966.07 Cr (FY23), Overall Growth: 18.48%

Geographic Revenue (FY24) #

• India: ₹2259.94 Cr.
• Overseas: 74.79 Cr.
• Total: ₹2329.33 Cr.
  • Growth Domestic: 18.8%
  • Overseas: 30.7%

Geographic Focus #

• Core States: Strong presence, focus on driving consumption and penetration.
• Focus States: High-priority areas for market share gain, outperforming core states by 1.5x in growth, requiring tailored support.
• Other States: Remaining regions of India.
• Exports: Account for ~40% of the frozen food business.

Cost Structure Analysis #

• Cost of Materials Consumed: ₹1,445.17 Cr in FY24, increased by 13.91% from FY23, representing the increase in raw material cost.
• Purchase of Stock-in-Trade: Decreased by 13.40%, ₹777.82Cr in FY24 vs. ₹898.22 Cr in FY23.
• Employee Benefit Expenses: Increased by 18.62%, to ₹112.14 Cr.
• Other Expenses: Increased 21.89% to 316.23 Cr. Includes Power and fuel, job work charges, Stores and spares, advertising, and freight.
• Depreciation and Amortisation: Represented 2.5% of total costs.

Margin Analysis #

• Operating Profit Margin: 13.48% for FY24, a significant increase from 9.55% in FY23.
• Net Profit Margin: 11.31% in FY24 vs. 6.91% in FY23.
• EBITDA Margin: 16.8% in FY24.

Operating Leverage #

• The company is improving plant utilization, aiming to improve operational efficiency.

Non-Recurring Items #

• PLI Scheme: The Company recognized income of ₹93.05 Cr (net) under the Production Linked Incentive Scheme.
• Impairment reversal: Showing non-recurring 194.04 Lacs

Quarterly Trends #

• Strong domestic demand, increased private consumption, and government spending as drivers of growth, particularly in the first half of FY24.
• New manufacturing facilities were commissioned, indicating expansion efforts.
• Festive seasons (around Diwali, Rakshabandhan) are highlighted as periods of increased sales, particularly for packaged sweets.

Summary and Key Observations #

• Bikaji is experiencing strong growth in the Indian snack market, driven by favorable market conditions and strategic initiatives.
• The improvement in profit margins suggests successful cost management and potentially some benefits from economies of scale.
• PLI scheme income represents a potentially non-recurring boost to the top and bottom lines.
• The company’s strategy focuses on deepening the existing market penetration, geographic expansion, and building up the distribution.
• The company also incorporated a subsidiary in USA.

Bikaji Foods International Limited Financial Analysis #

Cash Flow and Liquidity Analysis #

Detailed OCF, ICF, FCF Components #

(Figures in INR Lakhs)

*Other Non-Operating Adjustments include a variety of items such as gain/loss on lease modification, provision for doubtful debts, bad debts/advances written off, security deposit amortisation and write off, and reversal of provisions.

Key Observations: OCF increased in FY 2024 vs FY 2023.

Working Capital Management Efficiency #

We’ll analyze the following ratios:

• Inventory Turnover Ratio: Cost of Goods Sold / Average Inventory
• Receivables Turnover Ratio: Net Sales / Average Trade Receivables
• Payables Turnover Ratio: Cost of Goods Sold / Average Trade Payables
• Net operating cycle
  • For FY2024: Inventory =2,664.87+8,229.26/2= 5,447.06 Recievables= 1,726.67+10,865.23/2= 6,295.95 Payables =1,563.26+4,989.13/2 =3,276.19
  • For FY2023: Inventory = 2,091.92+7,033.55/2 =4,562.73 Recievables= 1,322.46+8,197.67/2=4,760.06 Payables = 1,117.54+5,501.79/2=3,309.66

Key Observations: The Inventory turnover ratio and Receivables turnover ratio has been slightly decreased.

CAPEX Analysis by Segment #

The provided document does not offer a detailed breakdown of capital expenditures (CAPEX) by segment. It only mentions total amounts spent, as shown in the OCF, ICF, FCF section. The company mentioned that they are a single segment company so no segment break-down can be made.

Dividend and Share Buyback Trends #

• Dividend: Bikaji paid a dividend of H 0.75 per share in FY23 and H 1.00 per share in FY24. Dividend has been increased.
• Share Buyback: No new share buyback was done in FY23 and FY24.

Debt Service Coverage Ratio (DSCR) #

DSCR = (Net Operating Income + Depreciation) / (Principal Repayment + Interest)

Key Observations: Bikaji has a very healthy DSCR, indicating a strong ability to cover its debt obligations. The ratio has improved in FY24, showing growth in income.

Liquidity Position and Cash Conversion Cycle #

• Current Ratio: Current Assets / Current Liabilities

The company has strong current ratio and also increased in FY24.

• Cash Conversion Cycle (CCC):
  • CCC = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) - Days Payable Outstanding (DPO)
  • We’ve already calculated the turnover ratios. To get the “days” metrics, divide 365 by the turnover ratios:
    • DIO = 365 / Inventory Turnover Ratio
    • DSO = 365 / Receivables Turnover Ratio
    • DPO = 365 / Payables Turnover Ratio
  • Based on the calculated turnover ratio

Key Observations: The Company has an overall very strong and efficient liquidity position and cash conversion cycle.

Free Cash Flow Yield Trends #

• Free Cash Flow Yield = Free Cash Flow / Market Capitalization
• Market Capitalization is provided for March 31, 2024 as H 12,280 Crores. We would need market capitalization data for March 31, 2023 to complete this calculation.
• FCF can be approximated as OCF - Capex. As per the cash flow statement the closest calculation is:

We cannot conclude on trends without historical market capitalization data for previous year.

Summary and Overall Assessment #

• Strong Profitability and Cash Flow: Bikaji demonstrates strong profitability, evidenced by the healthy profit after tax figures and positive operating cash flows.
• Improving Debt Service: The company’s ability to service its debt obligations (DSCR) is very strong.
• Good Liquidity: The current ratio is well above 1, and the cash conversion cycle is quick.
• Capital Expenditure: There’s a significant amount of capital expenditure, indicating investment in growth and expansion. The nature of this CAPEX isn’t fully clear from the data, but is geared toward increased capacity.
• Dividend Policy: The company paid dividends in both years.

Recommendations and Further Analysis #

• CAPEX Breakdown: Understanding the specific projects funded by the large CAPEX would provide greater insight into Bikaji’s growth strategy.
• Market Capitalization Data: Obtaining market capitalization data for FY23 would allow for a complete FCF yield trend analysis.
• Qualitative Factors: This analysis is purely based on the financial data provided. A comprehensive assessment would also consider qualitative factors like market position, competition, regulatory environment, and management quality.

In conclusion, Bikaji Foods International Limited appears to be in a strong financial position, with solid profitability, good cash generation, and prudent financial management.

Financial Analysis of Bikaji Foods International Limited #

Profitability Ratios (3-Year Trends) #

Key profitability ratios reflect the Consolidated data.

Liquidity Metrics (3-Year Trends) #

Efficiency Ratios (3-Year Trends) #

Leverage Metrics (3-Year Trends) #

Working Capital Ratios (3-Year Trends) #

Significant Deviations/Highlights #

• Strong Profitability Growth: Bikaji has shown strong and consistent improvement across all profitability metrics (ROE, ROA, ROIC, and all margins).
• Improving Liquidity: Both the current and quick ratios have improved.
• Stable Efficiency: Asset and inventory turnover ratios are relatively stable.
• Reduced leverage: The debt-to-equity ratio is low and decreasing, indicating sound financial health.
• High Interest Coverage: The interest coverage ratio is very high, demonstrating a strong ability to service its debt obligations.

Important Considerations #

The lack of external industry benchmarks within the provided document makes a comprehensive, comparative analysis impossible.

Bikaji Foods International Limited: Business Analysis #

Revenue and Profitability #

• Revenue from Operations:
  • FY24 (Consolidated): ₹2,329.34 Crores (Growth: 18.48% YoY)
  • FY24 (Standalone): ₹2,294.71 Crores (Growth: 18.02% YoY)
• EBITDA: ₹391.32 Crores (Consolidated)
• EBITDA Margin: 16.83%
• Profit After Tax (PAT):
  • FY24 (Consolidated): ₹263.46 Crores (Growth: 94.15% YoY)
  • FY24 (Standalone): ₹269.73 Crores (Growth: 94.90% YoY)
• PAT Margin: 11.31% (Consolidated)
• Gross Profit: ₹855.51 Crores
• Gross Margin: 36.72%
• ROE: 21.59% (Consolidated)
• ROCE: 27.07% (Consolidated)

Market Share and Competitive Position #

• Third-largest ethnic snacks company in India.
• Largest manufacturer of Bikaneri Bhujia globally.
• Third-largest manufacturer of packaged sweets.
• Second-largest manufacturer of handmade papad.
• Market Segmentation: Core, Focus, and Other States based on market share and growth priority.

Key Products Performance #

• Bikaneri Bhujia: Flagship product and largest revenue contributor.
• Ethnic Snack: 1547.2 cr
• Category Performance (FY24):
  • Ethnic Snacks: Highest revenue contributor.
  • Packaged Sweets, Western Snacks, Papad, and Others: All categories showed growth.
• Product Diversification: Bhujia, Namkeen, Packaged Sweets, Papad, Western Snacks, Frozen Foods.

Geographic Distribution and Market Penetration #

• Domestic Presence: 28 States and 8 Union Territories in India.
• International Presence: Exports to over 33 countries across North America, Asia Pacific, Middle East, European Union, Africa, and the UK.
• Global Distribution Network: Canada, USA, Panama, Germany, Netherlands, Belgium, France, Spain, Italy, Greece, Cyprus, Poland, Sweden, Norway, Ireland, Israel, Japan, South Korea, Kuwait, Bahrain, Qatar, Dubai, Saudi Arabia, Oman, Combodia, Phillipines, Thailand, Sri Lanka, Singapore, Malaysia, Indonesia, Nepal, Hong Kong, Nigeria, Togo, Congo, South Africa, Uganda, Madagaskar, Mauritius, Australia, New Zealand.
• Distribution: 105 super stockists, 2435 direct and indirect distributors.

Investments #

• Capital investments in New Manufacturing facilities in Rajasthan, Chhattisgarh, and Bihar.
• Fulfilled PLI scheme commitment of investments of 438.74 cr, including investments by contract manufacturers and subsidiaries.

Operational Efficiency #

• Manufacturing Facilities: 9 manufacturing facilities (6 in Rajasthan, and 1 each in Assam, Karnataka, and Maharashtra), plus 4 contract manufacturing facilities.
• Technology Integration: Distributed Management System (DMS), Sales Force Automation (SFA), Enterprise Resource Planning (ERP) system.
• Capacity Utilisation: Aiming to exceed 50% capacity utilisation in FY25.

Growth Initiatives and Challenges #

• Growth Initiatives:
  • Expansion of manufacturing capacity.
  • Geographic expansion (US market: Bikaji Foods International USA Corp).
  • Product portfolio diversification (frozen foods, bakery items).
  • Strengthening distribution network.
  • Enhanced marketing and brand building.
  • Focus on e-commerce and institutional channels.
• Challenges:
  • Intense Competition.
  • Raw material price fluctuations.
  • Potential supply chain disruptions.
  • Changes in customer preferences.
  • Quality control issues.
  • Inflationary pressure on raw material prices.

Financial Analysis Report: Bikaji Foods International Limited - Risk Profile #

Introduction #

This report analyzes Bikaji Foods International Limited’s risk profile across five key categories: strategic, operational, financial, compliance/regulatory, and emerging risks. The analysis will assess severity, likelihood, trend, mitigation strategies, control effectiveness, and potential financial impact for each category.

Strategic Risks #

Definition #

Risks impacting Bikaji’s long-term goals, market position, and overall business model.

Key Risks Identified #

• Intense Competition: Bikaji faces competition from both major national players and numerous regional players.
• Changing Consumer Preferences: Rapid shifts in consumer tastes and dietary habits (e.g., towards healthier options) pose a risk.
• Geographic Concentration: While expanding, a significant portion of revenue is still tied to core markets (Northern and Western India).

Analysis #

Year-over-Year Changes #

Bikaji is actively mitigating strategic risks, particularly through geographic expansion and product diversification. The trend is positive, but execution risk remains.

Operational Risks #

Definition #

Risks related to Bikaji’s day-to-day operations, production, supply chain, and quality control.

Key Risks Identified #

• Supply Chain Disruptions: Dependence on raw materials (pulses, potatoes, vegetable oils) with fluctuating prices and potential shortages.
• Quality Control Issues: Food safety concerns, product recalls, and maintaining consistent quality across multiple manufacturing facilities.
• Manufacturing Capacity Utilization: Ensuring optimal utilization of existing and new facilities.

Analysis #

Year-over-Year Changes #

Bikaji is actively increasing capacity, suggesting a focus on improving manufacturing utilization. Quality control remains paramount, with stated adherence to international standards.

Financial Risks #

Definition #

Risks impacting Bikaji’s financial stability, profitability, and access to capital.

Key Risks Identified #

• Commodity Price Fluctuations: Volatility in raw material prices (pulses, potatoes, vegetable oils) impacting margins.
• Interest Rate Risk: Exposure to fluctuating interest rates on variable-rate borrowings.
• Debtor’s risk: Risk of not being able to collect payments.

Analysis #

Quantitative Metrics #

• Debt to Equity Ratio: 0.1 (FY24), 0.15 (FY23) - Shows a low level of debt financing.
• Interest Coverage Ratio: 31.15 (FY24), 15.54 (FY23) - A significant improvement, indicating a strong ability to cover interest expenses.
• Current Ratio: 2.28 (FY24), 1.9 (FY23) - Indicates good short-term liquidity.
• Gross Margin: 35.29% (FY24), 31.39(FY23)
• Net Profit Margin: 11.31% (FY24), 6.91% (FY23) - A significant increase year over year.

Year-over-Year Changes #

Bikaji’s financial risk profile has improved significantly. Profitability, liquidity, and interest coverage have all shown positive trends.

Compliance/Regulatory Risks #

Definition #

Risks associated with non-compliance with relevant laws, regulations, and standards.

Key Risks Identified #

• Food Safety Regulations: Compliance with stringent food safety norms (FSSAI, international standards).
• Environmental Regulations: Compliance with waste management, pollution control, and other environmental laws.
• Listing Regulations: Adherence to SEBI Listing Obligations and Disclosure Requirements (LODR).

Analysis #

Year-over-Year Changes #

Bikaji demonstrates a strong commitment to compliance. However, a minor non-compliance issue related to the composition of the Nomination and Remuneration Committee occurred, highlighting the need for continuous vigilance.

Emerging Risks #

Definition #

Risks related to recent developments or trends.

Key Risks Identified #

Cybersecurity: increasing digitization may make the company more vulnerable.

Analysis #

Overall Risk Assessment Summary #

Bikaji Foods International Limited demonstrates a generally strong risk management framework. The company is actively mitigating strategic risks through expansion and diversification. Operational risks are addressed through established quality control procedures and supply chain management strategies. Financial risks are currently low, with positive trends in key financial metrics. Compliance risk is generally well-managed, though minor lapses highlight the need for continuous monitoring. The emerging risks needs to be addressed with more focus.