Bikaji Foods shares surged almost 4% to reach a 52-week high on Friday morning after Nuvama Institutional Equities started covering the stock with a ‘Buy’ rating. The shares climbed 3.91% to ₹747.95 on the BSE.
Bikaji Foods International is a major player in the growing Indian snack market. It’s the third-largest in the organized ethnic snacks market and leads in family packs and in states like Rajasthan, Assam, and Bihar.
Nuvama Equities gave Bikaji Foods a ‘Buy’ rating with a target price of ₹885, suggesting a potential 23% increase from Thursday’s closing price.
“Savoury snacks are popular due to changing consumer tastes. The growing love for ethnic snacks and the move towards organized sectors will boost Bikaji’s growth,” Nuvama Equities stated.
Nuvama believes Bikaji Foods is well-positioned for growth with its wide range of products.
“Bikaji aims to not only keep its top position but also increase its market share in key states from 1-2% to higher single digits. With most of its capital expenses already done, better use of assets will push its return on capital employed (RoCE) to 32% by FY27E. The endless demand for snacks, strong brand, and favorable trends make Bikaji an attractive investment,” Nuvama added.
The Indian market for savoury snacks is expected to grow at an annual rate of 11%, reaching ₹1.2 lakh crore by FY27E. Nuvama Equities predicts Bikaji Foods will outpace the industry with an 18% growth rate, driven by 14-15% annual volume growth.
“The company plans to raise prices by 2-4% going forward. We expect an annual EBITDA growth of 23%, leading to a 15% EBITDA margin by FY27E. Additionally, benefits from the production-linked incentive (PLI) scheme will boost earnings per share (EPS), with a 21% annual EPS growth over FY24–27E. Ethnic snacks are the biggest revenue contributor (69%), followed by sweets (12%),” Nuvama noted.
Bikaji Foods shares have risen sharply, gaining over 36% in one month and more than 77% in the past year.
As of 9:50 am, Bikaji Foods shares were up 1.13%, trading at ₹727.85 on the BSE.
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