Key Financial Performance & Metrics

  • Revenue Growth: The company reported a top-line growth of close to 13% for Q2 FY27.
  • Snacking Business Performance: The core snacking business (Ethnic and Western Snacks) grew 22% in value terms. Volume growth in snacking was 15%+, while overall company volume growth was 5%.
  • Ethnic Snacks grew at 19.7%.
  • Western Snacks grew at 44%.
  • Gross Margin: Standalone gross margin for the quarter was 34.4%, representing a decline of approximately 170 basis points (1.7%) due to raw material cost inflation.
  • EBITDA Margin: The overall company EBITDA margin for the quarter was 12.6%.
  • Geographic Market Growth:
  • Core markets grew at 17.5%.
  • Focus markets grew at 35%+ in the snacking business (7.6% overall growth impacted by product mix).
  • Pack Type Performance: Impulse Packs (INR 5 and INR 10) grew 20%, while Family Pack growth was muted.
  • Retail Business (THF): Grew 58% in Q2 and 64% year-to-date. The company operates 34 stores and plans to reach 40 by the end of FY27. THF is projected to achieve revenues of INR 160-170 crore for FY27, representing 60-70% growth.

Price Increase Announcement

A price correction (increase) of approximately 3% on MRPs was announced, effective from November 15, 2026. This is a response to sustained raw material inflation. The full benefit of this price hike is expected to be realized in Q4 FY27.

Raw Material Cost Environment & Outlook

  • The company cited significant price increases in key raw materials, particularly pulses, since March-April 2026 due to a bad crop.
  • Recent softening in edible oil prices (3-4% in two weeks) and packing material costs (linked to crude oil) was noted.
  • The management expects the cost environment to normalize in Q4 FY27 with the new crop arrival and the full effect of the price increase.
  • No further price increases are anticipated until March 2027, barring unforeseen events.

Grammage Reduction

A grammage reduction of approximately 1 gram (3-4% weighted average) was implemented on INR 5 and INR 10 packs.

Full-Year Guidance

  • Revenue: Management upgraded its full-year revenue growth guidance to 17%+ from the earlier target of 15%+, citing a strong October and high teen growth in H2.
  • Margins: Q3 FY27 margins are expected to remain under pressure. Q4 FY27 is projected to see normalized gross and EBITDA margins, with an exit run-rate EBITDA of 13%+.
  • THF: The retail business is projected to reach INR 160-170 crore in revenue for FY27.

Operational and Strategic Updates

  • Distribution: The company added 20,000 outlets in Q2 and is on track to exceed its full-year outlet addition target.
  • Marketing Initiatives:
  • A Paytm cashback campaign was launched on 33 SKUs (INR 5 and INR 10 packs), running from September 2026 to March 2027. The redemption cost is borne by Paytm.
  • New TV commercials featuring Amitabh Bachchan were created (11 films featuring 13+ products).
  • Campaign extensions included tie-ups with "Mirzapur" and Pankaj Tripathi, and presence on KBC.
  • Advertising & Promotion (A&P) Spend: A&P spend is budgeted at 2% of revenue for the full year.
  • THF Strategy: The company is experimenting with new store formats (2,500 sq. ft., 700-800 sq. ft., and a premium experiential format called "Foundré by THF"). Same-store sales growth for THF is 6-8%. The focus is on establishing THF as a premium sweets brand.
  • Production: Disruptions in Bikaneri Bhujia production due to the Bengal elections in Q1 were mitigated by building inventory at a mother depot. Any production outside Bikaner cannot use the "Bikaneri Bhujia" GI tag.

Impact of Diwali Shift

The shift of the Diwali festival from Q2 FY26 to Q3 FY27 significantly impacted the quarterly numbers. The Packaged Sweets and Gifting segment, which contributes 12.5% annually, saw a decline in Q2. Its contribution is higher in focus (25%) and other states. Management advised analyzing the combined performance of Q2 and Q3 for this segment, expecting Q3 growth to be "far, far higher." October month-on-month growth was estimated at 50%+ year-on-year.

Capital Structure Impact

The disclosure does not mention any impact on capital structure, share capital, or promoter holding.

Cash Flow Implications

No specific cash flow implications were discussed in the transcript.

Participants

  • Management: Mr. Rishabh Jain (CFO), Mr. Manoj Verma (COO)
  • Moderator: Mr. Ambesh Tiwari (S-Ancial Technologies Limited)
  • Analysts: Representatives from PhillipCapital India, Nuvama, Motilal Oswal, Systematix Group, and HDFC Securities.