Conference Call with Prataap Snacks Management and Analysts on Q4FY23 Performance and Outlook. Listen to the full earnings transcript.
Packaged Foods company Prataap Snacks announced Q4FY23 & FY23 results: Q4FY23: Sales/Income from Operations of Rs 3,979.10 million, registering a growth of 11% YoY Adjusted Operating EBITDA of Rs 301.9 million, translating to a margin of 7.6% Q4FY23 Adjusted EBITDA margin is the highest in the last 12 quarters Reported PAT of Rs 216.1 million Reported EPS (Diluted) of Rs 9.06 per share FY23: Sales / Income from Operations of Rs 16,417.1 million, registering growth of 19% YoY Operating EBITDA of Rs 624.3 million, translating to a margin of 3.8% PAT stood at Rs 202.9 million EPS (Diluted) stood at Rs 8.51 per share The Board of Directors has recommended a dividend of 20% equating to Re 1 per share (face value of Rs 5.0 per share) Commenting on the Q4FY23 & FY23 performance, Amit Kumat – MD, Prataap Snacks said. “We have ended FY23 with sales of Rs 16,417.1 million, higher by 19% YoY. We are pleased to report our second successive year of strong revenue growth after covid disruption elevating us to our highest-ever annual revenue. This has been achieved by the expansion of our average distribution reach by nearly 1.6 lakh outlets over the last financial year to 21.8 lakh outlets (Source: Nielsen) across the country. Revenues in the fourth quarter have been impacted by softer consumer demand due to sustained inflationary pressures and sluggish rural activities. As a result, we couldn’t meet the threshold revenue required to qualify for the production-linked incentive this year. Hence, PLI recognised on an accrual basis in Q1 to Q3 this year has been reversed in Q4, impacting the reported EBITDA. The silver lining has been the improvement in EBITDA margin (adjusted for PLI reversal). Adjusted EBITDA of Rs 301.9 million in Q4 FY23 was higher by 511% YoY and the margin has improved by 620 basis points from 1.4% in Q4FY22 to 7.6% in Q4FY23, which is the highest in the last 12 quarters. This improvement has been driven by our compressed distribution structure, cost optimization measures and cooling of input prices, setting the tone for an improved margin performance in the next fiscal year.” Result PDF
Prataap Snacks announced Q3FY23 results: Q3FY23: Revenue of Rs 4,264.50 million, registering growth of 11% YoY. Operating EBITDA of Rs 233.9 million, translating to a margin of 5.5%. PAT stood at Rs 58.2 million. EPS (Diluted) stood at Rs 2.48 per share. 9MFY23: Revenue of Rs 12,663.1 million, registering growth of 22% YoY. Operating EBITDA of Rs 435.2 million, translating to a margin of 3.4%. PAT stood at Rs (13.2) million. EPS (Diluted) stood at Rs (0.56) per share. Commenting on the Q3 & 9MFY23 performance, Amit Kumat, MD, Prataap Snacks Limited, said: “We are pleased to report sustained growth with revenues higher by 11% YoY in Q3 and by 22% YoY on a YTD basis. We continue to enhance our distribution network through the addition of touch points in focus markets as well as by optimising the existing network through better efficiency. Our subsidiary Avadh continued to report strong revenue growth. The EBITDA margin improved to 12% for the quarter, surpassing the margin performance of the parent company. We have witnessed softening of palm oil prices as well as a reduction in the prices of some other inputs. Benefits from the easing of input prices will fully accrue in ensuing quarters and we anticipate a further positive impact on the EBITDA margin going ahead. We have commenced production at the Kolkata facility this quarter and this will optimize our distribution in the region. Plans for the Jammu facility are progressing well as the land acquisition has been completed and orders for machinery have been placed. We maintain an optimistic outlook for both revenue growth and enhanced profitability" Result PDF
FMCG company Prataap Snacks announced Q2FY23 results: Q2FY23: Revenue of Rs. 4,572.8 million, registering a growth of 23.4% YoY Operating EBITDA of Rs. 220.9 million, translating to a margin of 4.8% PAT stood at Rs. 42.4 million EPS (Diluted) stood at Rs. 1.81 per share H1FY23: Revenue of Rs. 8,398.6 million, registering a growth of 29.2% YoY Operating EBITDA of Rs. 201.4 million, translating to a margin of 2.4% PAT stood at Rs. (71.5) million EPS (Diluted) stood at Rs. (3.05) per share Commenting on the Q2 &H1; FY23 performance, Mr. Amit Kumat – MD, Prataap Snacks Limited said. “We are delighted to report a strong performance with revenues higher by 23% YoY in Q2 and by 29% YoY for the half year. The improvement in overall activity levels supported by resilient consumption patterns has led to higher demand. Our efforts to expand our network through the addition of new distributors and more retail touchpoints combined with optimising existing distribution strength have also contributed to the growth momentum. We have added 25 vehicles to our fleet in the last 6 months which has also aided in better distribution efficiency. We are also pleased to share that our subsidiary Avadh has also delivered strong revenue growth on a YoY basis accompanied by an EBITDA margin of 8.7% for the quarter, surpassing the margin performance of the parent company. This quarter, we witnessed the initial impact of softening of palm oil prices leading to improved profitability. The commodity cycle has started to ease out and as we move ahead, we anticipate a higher positive impact on the EBITDA margin from reducing input prices. The initiative of direct distribution has led to the compression of our distribution layers leading to a structural improvement in the EBITDA margin. Lastly, we are excited about our plan to further increase our manufacturing footprint by setting up a facility in the Jammu region. This will enable us to better serve markets in North India. In the backdrop of multiple tailwinds, the outlook is bright for both revenue growth and enhanced profitability.” Result PDF
Prataap Snacks announced Q1FY23 results: Revenue of Rs. 3,825.7 million, registering growth of 37% yoy Operating EBITDA of Rs. (19.5) million, translating to a margin of (0.5)% PAT stood at Rs. (113.9) million EPS (Diluted) stood at Rs. (4.86) per share Commenting on the Q1 FY23 performance, Mr. Amit Kumat – MD, Prataap Snacks Limited said. “We are pleased to start FY23 on a strong note with robust revenue growth of 37% YoY in the first quarter. This has been driven by a steady uptick in consumption as well as the calibrated expansion in our distribution network. After two challenging years, this year starts with a more steady local backdrop characterised by the normalisation of activity levels and demand across our retail touchpoints. Operationally, the sharp inflation in the prices of key raw materials especially palm oil have exerted significant pressure on profitability. Our continued efforts of cost optimization, gradual implementation of the direct distribution model, better price realisation and grammage rationalization helped restrict the impact on our margins. These process improvements and structural changes undertaken, have positioned us towards an elevated margin profile, once we revert towards a normalised raw material environment. In recent weeks, there has been a reversal in commodity prices from the unusually elevated levels witnessed during Q1. This will favourably impact the economics of our business enabling us to improve margins and overall profitability. Combined with the strong sales momentum being witnessed, the outlook is favourable in terms of sustained growth as well as improved profitability. We are striving to build on this further in the quarters ahead.” Result PDF
Conference Call with Prataap Snacks Management and Analysts on Q4FY22 Performance and Outlook. Listen to the full earnings transcript.
Prataap Snacks announced Q4FY22 results: Q4FY22: Revenue of Rs. 3,614.6 million, registering growth of 17% YoY Operating EBITDA of Rs. 49.4 million, translating to a margin of 1.4% PAT stood at Rs. (29.5) million EPS (Diluted) stood at Rs. (1.26) per share FY22: Revenue of Rs. 13,966.2 million, registering growth of 19% YoY Operating EBITDA of Rs. 583.1 million, translating to a margin of 4.2% PAT stood at Rs. 169.1 million with margins at 1.2% EPS (Diluted) stood at Rs. 7.21 per share The Board of Directors have recommended a dividend of Rs. 0.50 per share (face value of Rs. 5.00 per share) Commenting on the Q4 & FY22 performance, Mr. Amit Kumat – MD, Prataap Snacks Limited said. “We have delivered a robust performance in a challenging macro environment. Revenues during the quarter grew by 17%, significantly outgrowing the industry. This was led by an uptick in consumption and expansion in distribution network. The growth in volumes is sustainable as existing retail touchpoints are witnessing normalcy in demand even as we have added new retail outlets in our network. During the quarter, a sharp rise in prices of palm oil and other commodities was witnessed across the landscape. We were able to partially mitigate the impact by our ongoing cost optimization initiatives, gradual implementation of the direct distribution model, grammage rationalization and higher price realisation. The initial benefit from these initiatives has accrued during the year and we anticipate further benefit in the quarters to come. Further, we have implemented our direct distribution model in all regions ahead of schedule. This, along with other structural changes, positions us towards an elevated margin profile, once the unusual rise in input prices normalizes. Over the past few quarters, despite unfavourable market conditions and inflationary pressures, we continued undertaking initiatives to enhance our business model and transform our distribution network. The enhanced retail touchpoints have enabled higher sales volume growth and increased topline. We will look to build on this momentum through further expansion in the distribution network. With Covid restrictions being lifted and normalised activity across new and existing retail touchpoints, we are confident of accelerated growth going ahead.” Result PDF
Packaged Foods company Prataap Snacks declares Q3FY22 result: In Q3 FY22: Healthy Revenue Growth of 14% on a YoY Basis PAT Grows 4% on a YoY Basis Revenue of Rs. 3,849.5 million, registering a growth of 13.5% YoY Operating EBITDA of Rs. 181.1 million, translating to a margin of 4.7% PAT* stood at Rs. 47.4 million, higher by 4.1% YoY EPS* (Diluted) stood at Rs. 2.02 per share In 9M FY22: Revenue of Rs. 10,351.6 million, registering a growth of 20.2% YoY Operating EBITDA of Rs. 533.7 million, translating to a margin of 5.2% PAT* improved to Rs. 180.7 million, higher by 157.0% YoY EPS* (Diluted) stood at Rs. 7.70 per share Commenting on the Q3 & 9M FY22 performance, Mr. Amit Kumat – MD & CEO, Prataap Snacks Limited said; “We continue to rebuild our growth trajectory and have delivered an improved performance against the backdrop of gradual normalisation in the overall consumption environment. Revenue growth was healthy at 14% YoY driven by improved volumes which have surpassed pre-covid levels across most of the products categories. During the quarter, we have received approval from the Government of India under PLI scheme for expansion in food processing under the readyto-eat category. Our investment commitment aggregates to ~ Rs.105 crore, of which we have already invested Rs. 15 crore with the balance to be invested between us and our contract manufacturing partners before March 2023. This will enhance our capacities and further strengthen our manufacturing footprint. Operational challenges remain with palm oil prices remaining elevated during the quarter. In addition, there was a notable increase in the prices of laminates, which is a key raw material for our packaging process. Our cost optimisation programmes and implementation of the direct distribution model has enabled us to significantly mitigate the inflationary cost pressures. In Q3 FY22, our profitability was impacted by an exceptional expense of Rs. 14 crores, on account of loss caused by a fire at our Kolkata plant. The insurance claim is in process, and we expect to substantially recover this loss once the claim is settled in the coming quarters. We did witness some disruptions on account of increasing restrictions from the third wave of Covid, but we are now seeing an easing of restrictions in most states. With our focus on direct distribution and tele-calling aiding an increased and more efficient footprint we are well-positioned to grow topline while cost reduction initiatives are contributing to the structural improvement in margins. With a wide product range and robust balance sheet we remain confident of delivering sustainable growth over the medium term”. Result PDF