Prataap Snacks (PSL) reported a 20% year‑on‑year increase in revenue, reaching ₹5 billion in the first quarter of FY27. Namkeen snacks drove double‑digit volume growth, followed by potato chips and extruded snacks. Management projects double‑digit revenue growth for FY27, powered by stronger performance in the namkeen and extruded segments.
Gross margin contracted by 138 basis points YoY to 27.2% in Q1FY27, largely due to higher raw material costs. EBITDA margin fell to 4.1% (a decline of 35 basis points). However, PSL expects margins to rise to 7‑8% by FY28, thanks to cost‑optimization initiatives and calibrated price hikes.
The company is shifting its distribution model to a two‑tier structure and consolidating production plants. It plans to increase the contribution from owned manufacturing and expand into East India, which should sustain revenue growth at roughly 12‑13%.
Leadership changes include the resignation of Mr. Arvind Kumar Mehta from the positions of Chairman and Executive Director. The board also approved the acquisition of RLOP Food Processing for up to ₹165 million, securing leasehold land for greenfield expansion.
Based on a discounted cash flow analysis, the research team maintains a BUY rating with a target price of ₹1,350, implying a price‑to‑earnings ratio of 45x on March 2028 earnings.