Q2 performance: Sales +4.1% YoY, but profits strong (PAT +23%) as margins expanded sharply
• GST disruption: Transition in Sept cost ~2–2.5% of topline; true demand growth closer to 6–6.5%
• GST 2.0 (5%) impact: 85% portfolio affected; benefit passed via higher grammage. Management already seeing positive volume response and expects organized players to gain share as tax arbitrage for unorganized players reduces
• Growth outlook: Demand sentiment improving; management confident of return to double-digit growth
• Geography: Hindi belt & East seeing strong recovery and share gains; South still underperforming growth-wise
• Margins: Commodities manageable; company open to slight margin sacrifice to drive volumes and market share
• Portfolio: Premium biscuits, health (millet cookies) and adjacencies (croissant, rusk, wafers) growing well; dairy remains weak due to MT discounting
BOTTOM LINE:
Short-term GST noise, but structural volume and market-share upswing ahead driven by GST 2.0 and improving demand.
Leave a Reply