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Prataap Snacks Q1 Review - Limited Pricing Power, Low Margins Remain Key Concerns: Systematix

Prataap Snacks Q1 Review - Limited Pricing Power, Low Margins Remain Key Concerns: Systematix

<div class="paragraphs"><p>Diamond brand snacks manufactured by Prataap Snacks Ltd. (Photo: Usha Kunji /Source: BQ Prime)</p></div>
Diamond brand snacks manufactured by Prataap Snacks Ltd. (Photo: Usha Kunji /Source: BQ Prime)

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Systematix Research Report

Prataap Snacks Ltd.’s Q1FY23 consolidated revenue grew 37% YoY to Rs 3.8 billion, led by strong volume traction, a result of steady uptick in consumption and expansion in the distribution network.

Gross margin contracted 122 basis points to 22.8%, with higher other expenses driving Ebitda loss of Rs 20 million versus 4% margins YoY on account of raw material price inflation and supply-chain disruptions.

Prataap Snacks recognised production linked incentives of Rs 42.5 million during the quarter. Following are the key monitorables we would look for-

  1. palm oil prices,

  2. increased prices of laminates and corrugated boxes, and

  3. delays in scaling up its sweet snacks portfolio.

We expect compound annual growth rate of 20% in revenue over FY22-24E; Ebitda and profit after tax are slated to post 35% and 63% CAGR over this period.

Click on the attachment to read the full report:

Systematix Prataap Snacks - Q1FY23 - Result Update.pdf

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