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Rishabh Jain, Chief Finance Officer at Bikaji Foods International, an ethnic snacks company in India, stated that the company is targeting a market share of 12 per cent in the next three years. The CFO also stressed that the company is focused on maximizing capacity utilization and aims to achieve a volume growth of at least 16 per cent to 18 per cent in three years.
Currently Bikaji Foods has a market share of close to 9.5 per cent, the CFO highlighted.
“Bikaji Foods wants to take its market share to 12 per cent in the next three years,” Jain told ETCFO. He added, “The company is currently utilizing approximately 45 per cent to 47 per cent of its capacity and is focused on maximizing it for a volume growth of at least 16 per cent to 18 per cent over the next 2-3 years. That’s the target we have set as of now.”
Additionally, Jain provided insights into Bikaji Foods’ regional strategy, stating that the company largely obtains about 68-70 per cent of its sales from three states: Rajasthan, Assam, and Bihar. The CFO highlighted that Bikaji Foods has identified six states where they will focus on in the next three years. Four are in the northern part of India: UP, Haryana, Punjab, and Delhi, and two are in the southern part: Karnataka and Telangana.
“We are targeting to increase our market share in these six states. It’s a big opportunity, big market, big business for us going forward. It’s all about execution,” Jain added.
The CFO also shared that another major focus is on gross margin expansion.” Jain added, “We are increasing our procurement of higher-margin products in our overall business.”
Adding to the strategy of improving margins, Jain said that basically expenses like logistic cost and salary cost are the significant costs in the company’s profit and loss statement. So the company largely evaluates this on a monthly basis and aligns it without having a severe impact on sales or profit. From a gross margin perspective, purchase is a significant cost.
CFO dont see inflation as challenge ahead, focus on rural market
The CFO highlighted that inflation is not perceived as a significant challenge by the company. He elaborated that the containment of oil prices and the absence of major uptrends in commodity prices contribute to this viewpoint. Additionally, he noted the significance of the current election year. Furthermore, he underscored the company’s strategy to pay attention to the demand from the rural market.
Jain stated, “The company doesn’t see inflation as a bigger challenge. Mainly oil prices are largely contained; they are settled now. We are not seeing any major uptrend in commodity prices, and also this is an election year. In addition, we will also be looking at the demand from the rural market.”
No major Capex plans for next two years
Regarding major Capex plans for the next two years, Jain informed that the company doesn’t foresee any major capital expenditure in the next two years.
“By March 2024, the company will complete its major Capex cycles, and the Raipur plant will commence operations in March 2024. For the next two years, the company doesn’t foresee any major Capex; it will primarily consist of New Product Development (NPD) Capex or regular maintenance Capex. Therefore, for the next one year, the company doesn’t require any funds for major capitalization,” stated Rishabh Jain, CFO of Bikaji Foods.
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