# 1. Financial Performance ## A. Key Figures * **Q2 FY'26 Revenue:** **₹551.4 Cr** (highest ever, +11.1% YoY) * H1 FY'26 Revenue: **₹1,024.4 Cr** consolidated (+9.5%) · **₹935.7 Cr** prior period * H1 FY'26 EBITDA: ₹127.5 Cr (margin: 12.4%) * Q2 FY'26 EBITDA: ₹69.3 Cr (margin: 12.6%) · PAT: ₹36.5 Cr (margin: 6.6%) * H1 FY'26 PAT: ₹67.4 Cr (margin: 6.6%) * **CAPEX (FY'26):** **₹400 Cr** expected (majority by Mar-26) ## B. Revenue Growth * **Acceleration in Growth Trend:** Sequential improvement in quarterly revenue growth from 6% in Q1 to 1% in Q2, with H1 performance reflecting **strong double-digit underlying momentum** in Biscuits and Bakery verticals. * **Operational Expansion:** Kolkata plant now live, enabling **Pan India reach** and enhanced product quality for eastern markets, positioning for future volume scaling. * **Headwinds & Resilience:** Domestic biscuit segment faced ~1% revenue drag from September GST implementation, a sector-wide pressure, yet company still delivered growth near **double the industry average**. ## C. Profit Margins * **Margin Divergence:** Q2 EBITDA margin improved to 6% despite H1 consolidated margin compression to 4%, indicating **favorable cost dynamics or mix shift in Q2**. * **Stable Bottom-Line Conversion:** PAT margin held firm at 6% in both Q2 and H1, with **quarter-on-quarter profit growth of 2%**, reflecting disciplined cost management amid investments. ## D. Cash Flow & CAPEX * **Peak Investment Phase:** FY'26 CAPEX of **₹400 Cr** largely front-loaded, with major capacity expansion projects in Bakery and Biscuit segments nearing completion by March 2026. --- # 2. Volume & Pricing Trends ## A. Key Figures * **Biscuit Segment Revenue:** **₹350 Cr** Q2 FY'26 (+10% YoY) · **₹320 Cr** Q2 FY'25 * **Bakery Segment Revenue:** **₹194 Cr** Q2 FY'26 (+16% YoY) · **₹167 Cr** Q2 FY'25 ## B. Biscuit Segment Growth * **Resilient Domestic & Export Performance:** Biscuit revenue growth remained solid despite a temporary dip in September–October, with exports delivering double-digit expansion and domestic trends recovering post-GST-related billing delays. * **Strategic Distribution Push:** Distribution expansion remains central to the 2026–2030 RGM strategy, underpinning long-term volume and margin objectives despite near-term volatility. * **Export Resilience Amid Tariff Pressure:** Biscuit exports continue with no major disruptions, though **50% tariffs** are dampening order momentum as buyers await more sustainable rates. ## C. Bakery Segment Growth * **Strong but Moderating Growth:** Bakery segment posted robust revenue growth, supported by new facilities in **Maharashtra** and upcoming units in **Indore and Kolkata**, enabling proximity-based distribution. * **QSR Softness Weighs on Growth:** Expansion slowed from prior 19% trend to 16%, driven by a temporary B2B (QSR) slowdown, despite **English Oven** maintaining high-growth momentum. * **QSR Growth Below Expectations:** Contrary to anticipated low double-digit growth, QSR segment delivered only single-digit growth this quarter. --- # 3. Channel & Distribution ## A. Key Figures * **Weighted Distribution Availability:** **~30%** current · **>50%** target in 3–4 years * **Biscuit Outlet Reach:** **5–5.5 lakh direct outlets** · **>700,000** total outlets (Nielsen) * **Bakery Outlet Reach:** **~40,000 direct outlets** (+10% over 2–3 quarters) ## B. Outlet Reach Expansion * **Strategic Distribution Push:** Multi-year RGM-driven expansion aims to significantly increase weighted distribution, with focus on high-revenue outlets via the **Cremica Preferred Outlet program**, which saw **over 30% growth**. * **Biscuit Scale & Momentum:** After doubling direct outlet reach from 2022–2025, growth has stabilized at a **4–5% clip** in recent quarters, now prioritizing quality over quantity. ## C. Quick Commerce Growth * **QCom Leadership Maintained:** Company remains a market leader in quick commerce, leveraging **exponential segment growth** and recent **positive pilot results for frozen products in Delhi**. * **Geographic Expansion Ahead:** Plans include launching **English Oven in Kolkata** next quarter, followed by entry into **Southern India**, signaling aggressive pan-India scaling. ## D. Pan India Distribution * **Western & National Expansion:** New initiatives will deepen penetration in **Maharashtra** and extend reach into adjacent markets, strengthening footprint across **western India**. --- # 4. Brand & Product Performance ## A. Key Figures * **NPD Sales Contribution:** **2%–3%** of total revenue (12-month rolling) * **Cremica Export Share:** **>50%** of export revenue ## B. English Oven Performance * **Pricing Agility & Consumer Focus:** Swift price reductions implemented to pass on tax benefits, reinforcing brand responsiveness and consumer value proposition. * **High-Growth Trajectory:** English Oven achieving high double-digit growth on the back of strong brand equity, distribution expansion, and **quick commerce** as a key reach accelerator. * **Strategic Brand Ambition:** Aspirational goal to rank among the **top 2–3 bakery brands in India** within 2–3 years, supported by sustained investment in English Oven and Cremica. ## C. New Product Launches * **Innovation Engine:** Dedicated NPD department established with specialized capabilities to drive **differentiated product development** and secure competitive advantage. * **Product Pipeline Momentum:** Successful biscuit launches (e.g., shortbread, Non-Stop crackers, Teddies) and introduction of **Nature Baked**, a clean-label bakery brand with scalable SKU pipeline. * **Targeted Launch Strategy:** New products rolled out via **Cremica Preferred Outlets** to capture new consumers and deliver enhanced experiences, with early traction proving positive. * **Strategic Differentiation:** Focus on niche, low-competition categories like **Danish Cookie Tins** to build defensible market positions. ## D. Frozen Product Traction * **B2B Frozen Momentum:** Frozen product line for B2B clients gaining strong traction, with expansion plans underway for next-phase scaling. * **Consumer Testing Underway:** Frozen ready-to-eat desserts launched in B2B and selectively in NCR via **few SKUs**; positive feedback to inform broader rollout. --- # 5. Manufacturing & Capacity ## A. Key Figures * **CAPEX (FY '26 & FY '27):** **₹100 Cr** next FY (normalized) · Major plant commissionings across Dhar, Calcutta, Khopoli ## B. Plant Commissioning * **Strategic Commissioning Wave:** Multi-site capacity rollout in final stages, with full automation at **Khopoli Bombay** eliminating regional bottlenecks and unlocking growth for **English Oven**. * **Eastern India Expansion:** Entry into **eastern market** via first company-owned **Kolkata plant**, serving both retail and B2B bakery, enhancing regional self-sufficiency. * **Technology Modernization:** **SAP S/4HANA transition** on track for Q4 FY'26 with full implementation by Q1 FY'27, supporting scalability and operational integration. ## C. Capacity Expansion * **Growth Enablers:** Recent expansions are foundational, set to drive **strong double-digit growth** across retail and B2B bakery verticals. ## D. Logistics Efficiency * **Cost Optimization:** **Dhar plant** positioned to yield **quantifiable freight savings** by reducing distance to key markets, supporting margin improvement in the next fiscal. --- # 6. Input Cost & Regulatory Risks ## A. Key Figures * **GST Rate:** **5%** current domestic biscuit rate (from **18%**) * **GST Impact Duration:** **1% impact** limited to **October**, no future effect expected ## B. GST Transition Impact * **Structural Cost Advantage:** Domestic biscuit portfolio now benefits from permanent **5% GST rate**, enhancing competitiveness and supporting branded product penetration. * **Near-Term Disruption:** Festive demand surge offset by temporary trade channel paralysis as partners delayed purchases awaiting MRP revisions post-GST cut. * **Consumption Recovery:** GST reforms, lower interest rates, and Budget 2024 relief are early catalysts for broad-based rural and urban consumption rebound. ## C. Tariff & Export Risks * **Import Flexibility:** Company can switch to direct raw material imports if benefits exceed licensing routes; currently using **Advanced License** or **DFIA** for duty-free access. * **Neutral Financial Impact:** Both import facilitation mechanisms—Advanced License and DFIA—are expected to be **financially neutral** to operating income. * **Temporary DGFT Halt:** Export-related operating income pause is confirmed **temporary**, with no structural change in import entitlements. ## D. Commodity Volatility * **Stable Input Costs:** Raw material prices remained **consistent QoQ** with no significant volatility; costs aligned with operating plan despite hedging fluctuations. * **Past Margin Pressure:** Prior-year **commodity spike (Nov–Dec)** pressured margins, requiring multi-quarter pricing adjustments to offset. * **Favorable Cost Outlook:** **Softening raw material prices** and export incentives support margin stability, even amid competitive market conditions. --- # 7. Guidance & Outlook ## A. Key Figures * **Revenue Growth Target:** **Mid-teens** for FY '27 · **Low teens** expected for exports in FY '26 * **EBITDA Margin Target:** **14% or higher** by FY '27, with aspiration to exceed **15%** long-term ## B. Revenue & Segment Outlook * **Export Growth Catalyst:** Potential for double-digit export growth if US-India Treaty resolves favorably, boosting momentum in upcoming quarters. * **Biscuit Segment Recovery:** On track for double-digit growth in H2, aided by GST stabilization and anticipated trade deal benefits. * **Bakery Rebound Expected:** Performance poised to recover in Q3, with positive leading indicators signaling improved demand. ## C. Margin Improvement Plan * **Sustained Margin Focus:** Ongoing efforts to lift EBITDA margins to 14%+ in FY '27, despite balancing growth investments and expansion. * **Margin-Accretive Expansion:** New market entries are contributing positively to margins, supporting structural improvement. ## D. Strategic Expansion Goals * **Pan-India Ambition:** Aims to become a national player in 2–3 years, with English Oven as a key aspirational brand driving reach. * **Capacity & Infrastructure Buildout:** Plans for **~30% capacity increase by April 2027**, including a **Bangalore expansion next year**, to support multi-year growth. * **Global Diversification Underway:** Aggressive geographic and portfolio diversification mitigating tariff risks; new international business expected within **3–4 months**. * **Frozen Products Unlocking Markets:** Early traction in global markets, with structured expansion plans for North, West Central, and South India to be detailed in next call.