Stock to buy: Anand Rathi initiates coverage on Bikaji Foods shares with a ‘Buy’ call, sees 24% upside
Bikaji Foods International sells its products primarily through general trade, modern trade, and ecommerce platform, as well as exports. Over the years, the company has developed a large Pan-India distribution network.
As of March 2024, it had 3 depots, 37 super stockists, 1,917 direct and indirect distributors that work with its super stockists, who are located across 25 states and 4 union territories in India.Also Read: Day trading stocks to buy: Birla Corp to HCL Tech - Anand Rathi expert recommends three shares to buy on June 18The company’s foods revenue and EBITDA increased by 21% and 42% CAGR from FY19 to FY24 (including PLI impact) on account of healthy product mix, operational efficiency and brand visibility. Over the years, the company delivered healthy volume growth, margin expansion on the back of capacity expansion and operating efficiency, the brokerage report noted.“Bikaji with its strong portfolio, established distribution network backed by preferred brands are well placed to report profitability.
We believe that the company’s Revenue, EBITDA and PAT is expected to grow at a CAGR of 20%, 24% and 25% respectively over FY24-26E," Anand Rathi said.The brokerage firm initiated its coverage on Bikaji Foods shares with a ‘Buy’ rating by assigning 54x of FY26E earnings with a target price of ₹900 per share, implying an upside potential of more than 24% from Friday’s closing price, for a time horizon of 12 months.Also Read: Stocks to buy: Nykaa and Concor looking attractive, here's whyHowever, the brokerage believes key risks for the company include high dependency on core markets and its exposure to sharp fluctuations in raw material prices. Moreover, any hike in input cost cannot be entirely passed on to
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