Motilal Oswal Initiates Coverage of Bikaji Foods International with a Price Target of Rs 900
Motilal Oswal Research Report: Bikaji Foods International
Key Highlights
Our discussion with the management of Bikaji Foods International (BFL) revealed key growth drivers for the company. The expansion of distribution remains a crucial lever, with 60% of distribution in core states and 5% in focus markets. In Rajasthan, growth will be driven by higher throughput per store, while states like Bihar, Assam, Uttar Pradesh, Punjab, and Haryana will contribute through outlet expansion. The company aims to add 50,000 direct outlets annually.
Growth Outlook
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BFL is expected to deliver industry-leading growth, with a 15% CAGR in revenue, 29% in EBITDA, and 39% in PAT (excluding PLI) over FY25-28. The management expects 12%+ growth in core states and 18% in focus states, supported by A&P campaigns and marketing spends of 2-2.5% of revenue.
Recommendation
We reiterate our BUY rating for Bikaji Foods International with a DCF-based Target Price (TP) of INR 900, based on an implied P/E of 55x on FY28E.
Investor Takeaway
Investors should consider Bikaji Foods International for its growth potential, driven by distribution expansion and marketing campaigns.
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