Tasty Bites: A proxy play to India’s QSR industry

(Kumar Saurabh) #64

Revenue side:
Any idea in which quarter they would be entering into UK market as they seem to have regulatory approval if i am not wrong?
Possible to get revenue numbers of some of Indian B2B clients to get a sense. Dominos I am not counting as they are facing stangnat growth from last 4-5 quarters. This will give some indication on India b2b revenue. Considering sine of clients sales numbers mentioned above , this looks odd.

Cost side:
With food inflation going down, was expecting expenses to be on lower side (60% of cost being COGS which ideally should be food grains), so, not able to find reason why there is an increase.

As management does not hold any conference calls, is there a possibility to collect our questions, research and whatever is difficult to find, we can try to get a view from management.
Agree, it is good that some correction is happening. Post Q1 results, it had jumped from 37 pe to almost 60, total non-buy zone

(Sandeep Patel) #65

Saurabh,

TB has entered the UK market. More details in the point number 11) of AGM 2016 notes by Anant Jain above.

Cheers

(Kumar Saurabh) #66

Oh, sorry, though, had gone through, had forgotten. then, despite of UK entry (in case they entered at the start of 2nd quarter), one reason for lower double digit revenue growth can think of is point no 20 mentioned by Ananth - 100% capacity utilization. May be that is the reason for increase in loans in Q2

(Jey) #67

@Anant, @lustkills

I have one important concern the promoter( kagome) holds close to 74% of the share but the Managing Director(Mr. Ravi Nigam) does own only 0.01% of shares(just 200 shares) and his remuneration is only 78 lakhs per annum( for company that generates 200 crores revenue and 15 crore net profit) with no commission on sales too- thats sounds very unusual. In fact the company secretary and CFO earn slightly more remuneration than the MD - isnt it absurd.

(ANANT JAIN) #68

Kagome has 75% in Preferred Brands (PBIL) and the rest 25% is still held by the earlier owners of PBIL which includes Ravi Nigam, Sohel Shikari, Ashok and Meera Vasudevan. By virtue of their 25% holding in PBIL they still have 25%*74% around 18% in Tasty Bites. Since salaries being here and there, I do not see it much of a concern since the company was revived by all four of them.

I have huge regards for the current management and would like the current management team to continue.

(dwarakanath) #69

Can anyone form the UK give an idea as to the availability of tasty bite on store shelves?,
from what i can gather reading online vegan reviews and such, they genuinely seem to have a great product.
Which they marketed well in the US by sending samples to online food review bloggers etc and with great distribution network.
The UK market penetration should give a fillip to them as Uk even more than US is market where RTE and Indina food is even more readily accepted.
but uk amazon site hardly has any reviews for their product as compared to the US site where there are literally 100s of rating and reviews,which is expected since they just entered the UK market.
It will be good If they can get the distibution up and running in UK faster and give a more of a higher budget tradiotional marketing push in the uk as compared to US(where it seems online and word of mouth seems to have been the major drivers) .
The recent results have been good, will have to wait till agm to find out how much the growth came from which geographies and sectors.

(amil) #70

Interview of Mr. Ashok http://ceoshow.com/business-services?page=shop.product_details&category_id=20&product_id=487

For those who missed this one (like I did) as it was not ‘released’ on BSE announcement section. Noticed today:

(DevKolhi) #71

Hi, to answer your question there is no availability - I doubt you would be able to find if you dedicated a day of driving only to find their products.

Its worth remembering that a few supermarket chains dominate grocery shopping across the country (and most of the West) so most of the stuff would private label - I would think it would be close to impossible for Tasty Bites to sell their products on Tesco/any other supermarket’s shelves.

It is worth remembering that Tasty Bites is so small that even if they somehow enter the smaller unorganised stores (known as newsagents) I assume it could be meaningful for them.

Best of luck.

(venkat4321) #72

Hello VP Forum,

This is my first post, so please bear with me if I miss any practice here. I have been following the forum for 2 months, learning slowly, thanks a million for the members contributions and the knowledge shared.

I live in UK, and it happened to visit Costco store, near my place and I found one of the product in the store shelves. Also there is demonstration stall on this product, which serves samples of the products to customers. The pricing for 4 pack product £8.60, each pack servers for a couple of people.

Discloser: Not Invested

An investment in knowledge alw

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ays pays the best interest. - Benjamin Franklin

(dwarakanath) #73

Thanks a lot to @DevKolhi and @venkat4321 for taking the time to provide the ground reality for those of us here in india,
I have a couple of follow up questions

  1. Do the supermarket chains refrain from stocking other brands(mtr , tbel etc) if they have a private label or in house brand in the rte category?
    2.how does 8.60 quid stack against a fast food chain or other food outlets, is it okay to spend 8 60 or 16 quid for a snack or a meal? How affordable is it?

And @venkat4321 did you try the sample, how was it, was it indian in taste like mtr or more tuned to Western palates?

(venkat4321) #74

Hello Dwaraka,

I have tried the sample and looks ok to me.

And the demonstrator is explaining the customers saying, its pure vegetarian, gluten free and Fibre rich …etc. And the product quality wise ok. In my experience, if the product is selling in Costco, I generally don’t worry about the quality of the product, as I never disappointed on quality so far. As Costco is wholesale retailer, they sell all the stuff with bulk quantity, in this case pack of 6, with discount price (most of the case around 15 - 20 % in most cases) , compare to other retail chains like Tesco, Sainsbury, Morrisons…etc. Probably if they sell in other stores like tesco … etc. they might sell individual packs.

I did not find other products in this curry segment from indian bands, you mentioned above in this store.

As per the conversation with demonstrator, she mentioned that if Costco getting right price from vendor, then the product goes to shelf, otherwise not.

Most of the retail store products are available on the websites, as they are all converting to digitalisation and trying to increase their online sales. You can give a try on the sites for the similar products.

sorry guys, small correction, its 6 pack, not 4*, this applies to above post.

HTH

Venkat

(Kumar Saurabh) #75

This is really very informative on ground information. Thanks a lot :slight_smile:
Do you remember how many SKUs were on the sheft? Ony Madras lentil or there were more like brown rice etc?

(venkat4321) #76

Hello Saurabh, There is only one product as per the pic in above post, and I did not count the SKUs.

(Sandeep Patel) #77

Tasty Bite Q4FY17 and FY17 results are out. Disproportionate growth continues. EBIDTA margin up by 100 bps.

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Heartening to see capacity expansion; fixed assets increased to 73.95 cr from 61.45 cr last year.

Source: http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/5359fa98-63fb-4c44-9e95-d346a63a58a3.pdf

Disc: Have trimmed at around 55 P/E on high valuation fear. Invested.

(kanvgarg123) #78

Do you know what is the other income component? because if we remove 1.42 cr from that, EBIDTA growth number will come down to 25%.

(Sandeep Patel) #79

Other income includes interest income, gain from foreign exchange, gain on sales of investments and others.
Other operating income includes operational income coming from government export incentives that are linked to exports and scrap sale.

AFAIK (and I could be wrong) Other income has impact on PAT margin (not EBIDTA margin).

(kanvgarg123) #80

If you look at the numbers in the bse attached result pdf, they are as follows
Q4FY16 EBIDTA Q4 FY17 EBIDTA
1018.79 + 190.02 = 1208.81 1162.70 + 233.48 = 1396.18

I am not sure how your EBIDTA came as 9.83 . Even I did not do the calculation correctly earlier since I did not look at Q4FY17 EBIDTA correctly. So EBIDTA growth is closer to 16% not 25.

Also, I booked out of it today since I think valuations are really stretched at the current growth levels. 30% growth with PE of 60 is what my max multiple value could be.

(ANANT JAIN) #81

http://www.bseindia.com/xml-data/corpfiling/AttachLive/82DEAC55_89C4_4BD9_8A8D_0C328A1E6E62_173750.pdf

Tasty Bite being acquired by Mars Foods

(srinivasan) #82

Anant, Thanks for bringing in the good news. Iam expecting a bounty tomorrow on the markets. Just visited Mars site, I already guessed about sneakers, but looks like every chocolate, gum is owned by mars. Incredible history. Anant did you ever expect your pick to give such bounty returns in this quick time ? . Also I would believe, the stake of Indian-Origin promoters alone being sold(25%?), japanese holding their stake steady. Also after this sale, hopefully the existing indian promoters continue to manage for some time, before complete transfer to mars and japanese. Also I suspect if there is any huge euphoria in markets , even long term investors can sell it on rise and buy back once everything calms down, may be after a quarter/year, when results start coming in and the hype settles down. Your views and opinion on this ?

#83

I learnt a lesson, the hard way. When the results are not upto the mark but stock refuses to go down, we should expect some positive development. Seeing the lackluster result and good price in the market, I let go my precious holding (160 out of 260 shares) yesterday. I was holding these shares from Rs.600 levels. It is painful that I sold just before the major anouncement. I think it will be excellent stock to keep for long term.