My understanding / take-aways from the recent investor presentation (Dec. 2022)…
- Focus continues to be on the East / North East. West Bengal accounts for more than 50% of revenue; looking to expand in Assam, Bihar and Jharkhand. Looking to get a foothold in Odisha.
- Fryums account for most of their sales. However, they are making a play for Namkeen, potato chips, cakes and candy. Per their recent press release, they have launched edible oil (packaging and sale), using the same distribution network. Have close to 60 SKUs.
- Seem to be putting their fixed assets to good use, as reflected by a healthy asset turnover ratio.
- Price points of Rs. 5 & Re. 1 – strategy seems to be to cater to people with low disposable income, with a focus on quality and branding.
- Plan is to augment capacity to 68MT (both own and contract) by Sep. 2023.
Key monitorable: Promoter / senior management quality is untested. Integrity, attitude towards non-control shareholders, capital allocation skills and ability to execute & scale need to be tracked. However, I have not come across significant concerns / red flags so far.
Disc: Invested; views biased.