Krishival Foods Ltd - Gen Z FMCG play?

[Chandan_Sharma]

**This is not a buy/sell recommendation, too dumb for that.

Background -

• The co. was incorporated in 2014 by the promoter Mr. Sujit Bangar, Mrs. Aparna Bangar and Anant Pandurang Kulkarni with the name Empyrean Cashews which was subsequently changed to Krishival foods in 2023.

• The co. started with B2B, B2C cashew and other nuts selling, the ventured into ice-cream by the wholly owned subsidiary Melt and Mellow Foods and eventually IPOed in FY25, raising 19 cr, mostly for working capital requirement.

• The co. did a rights issue in December with a price of ₹300, which is to be used for expansion of new facility.

TAM, Opportunity size-

• The global dry fruits market is estimated to grow at 8.5-9% CAGR till 2034 and the ice-cream market by 16% CAGR according to the management.

Promoters-

• Krishival Foods’ promoter group holds 37.23% of the company, led by promoter & MD Aparna Sujit Bangar (also recorded as Aparna Arun Morale) with 34.85%, Nana Prakash Mhaske (CEO) & Anant Pandurang Kulkarni (CFO) with 1.19% share each.

• Company website

• LinkedIn

• LinkedIn of Aparna Banger

• Linkedin Sujit Banger

• LinkedIn Nana Prakash Mhaske

• LinkedIn Anant Pandurang Kulkarni

• Related party/group entities as per filing dt- 13-3-2026. https://www.bseindia.com/xml-data/corpfiling/AttachHis/75b36dc7-0c1f-4f02-92f2-b196553f4c53.pdf

• No criminal cases found against the promoters upon primary enquiry, a tax litigation of Rs. 66 lakhs

Facilities, Sourcing-

• The nuts are procured from 9 countries which help them mitigate the risk of price and bad weather.
• The 2 nuts processing capacity is at Halkarni, Sinoli at Kohlapur 10 km from each other.
• The nuts capacity was 10 MT/day which was recently doubled to 20 MTPA after commissioning of 2nd capacity.
• The ice-cream facility is at Aurangabad with total capacity of 1L ltr/day, and also 20 MT/day for milk products, 10 MT/day for bakery.
• The nuts have 67 SKUs while ice-cream has 189.
• For FY26, 69% revenue came from nuts and 55% of nuts revenue is B2B.
• Nuts business has 11,000 touch points while ice-cream has 34,200 with 300 Singapore TPs for nuts. Also, the deep freezer network of ice-cream is 15,490 as of end of FY26.

Peers-

There are no direct competitors in the listed player as such, but there are some players in the segment that they operate in.

• Nuts- Happilo, Farmley (both unlisted)

• Icecream- Vadilal, Creambel & other listed dairy players like Mother dairy, Hatsun

  

Q4 and FY26 results-

• The sales grew by 38%, 44% in the qtr and year respectively.
• Melt-n-Mellow turned PAT +ve, one year before the target.
• 31% revenue came from mNm and the share is increasing qtr on qtr.

• Trade receivables more than doubled to 49 cr, which might be attributed to the expansion in ice-cream business, the freezer network got 5x from 3k to 15k+ during the FY.
• Although the PAT jumped 60% for the FY, the co. struggled to make cashflow, which is the issue for most fast-growing co.s and it is a key monitorable.

Q1FY27-

• Excellent start to the FY, 80% revenue growth, 27% profit growth (because of higher inventory, depreciation, other expenses).

• Segmental revenue-

  

• Quarter updates-

  

• Guidance-

Tailwinds, Opportunities-

• The GST for nuts, ice-cream has reduced from 18% to 5% recently.
• Raising spending appetite beyond tier-1 cities can be of big positive and quick commerce is adding fuel to the fire.
• Shift from unorganised to organised sector is also a boon.
• Both the segments that Krishival is in, is growing at/above the real GDP growth rate.
• The co. is mostly present in the south, so it has big TAM ahead of it.

Risks-

• There will be constant competition in nuts because it is only a commodity at the end of the day, the brand hardly helps in a price sensitive market like India, which is also evident by the mere 17% growth in the segment for the FY.
• There are big players in the ice-cream section Amul, HUL, Arun etc which can give tough competition but the market is big enough to accommodate a new player.
• There is the risk of import dependency and raw material price for nuts and seasonality for ice-cream.
• The biggest red flag could be 9.5% shareholding by ED, Raipur.
• The scaling and execution risk is there in ice-cream segment because of high capex requirement, advertisement cost and perishability.

Q4 results, concall snippets-

In coming financial year '27, we hope to continue to maintain the growth trajectory, and we see around 50% top-line growth and 50% plus bottom-line growth.

• The co. was asked about the ED shareholding in last 2 concalls and the justification was that the ED has attached share of some FII.

• Planning to open 25 FOCO stores in Pune, Mumbai in current FY.
  aspire to strive for making Melt N Mellow a top three ice cream brand in India in the coming 7 years.
• Nuts business has 15% EBITDA, 10% PAT, ice-cream has 7% EBITDA, 3% PAT, will at least maintain it.
• The co. is targeting to use 25% of enhanced nuts capacity (10 MT) and utilization of the current capex is to increase from 70% to 90%.

• the ice-cream facility will be fully utilized by Q1FY29 which is currently utilized at 25%. The peak revenue of it will be around 600 cr.
• The co, is planning to grow deep freezer network to 26,500 in the FY (+70%).

• Both the segments will have equal contribution to revenue by FY28 or 29.

And the reason for that is that we have to continue to maintain this margin while scaling up. That is the reason for that. And regarding the operational rigor, in the Nuts segment, certainly operational rigor is quite available because we are not doing trading, buying nuts and rebranding and selling. So, if we are buying nuts and rebranding and selling, then in that case, there is operational leverage is not a major point over there. In our case, the nuts we are processing at our end and also raw nuts procurement is being done by ourselves. We are investing quite a lot into that in last many years, and that has translated into this leverage and this profitability in the Nuts segment.

• Question-

Answer-

Yes, very valid question. I will refer to the earlier point which you have raised regarding operation leverage because that is relevant here. In Nuts segment, you cannot do a business in all-India basis just by purchasing nuts, branding in your packaging and selling. That’s way you cannot create a profitable – you can do sale, but you cannot do a profitable, scalable, long-term business you cannot do. In the nuts, the most important thing is that from the January to December, customer should get an assured quality of nut, which is possible only if there is strength in sourcing. So, what I feel is that in India, unless there is a back end of sourcing, processing in-house, you cannot give a quality nut on table to the customer. So that’s why I feel there is a quite a good headroom if there is a integrated player who is working on it. So, from that angle, I feel for Krishival, going forward, emerging as a numero uno player in India, there is a lot of chance. I’m not saying that it is easy, but there is a quite a good chance, and we are very confident of achieving it because we are going at three levels; the supply chain we are working, we are working at processing level, and as far as sales is considered, we are going to the customer to Tier 2, Tier 3, Tier 4 towns and in B2B also directly to the players who are using it as an ingredient.

Key monitorable going forward-

• Price volatility of nuts and the ability to pass-on the price.
• How fast the capabilities are utilized.
• How do the FOCO stores perform
• Pressure of WC requirement
• Cashflow movement

Conclusion-

Krishival is most definitely an interesting FMCG play catering to educated and health-concisious customers as well has having presence guilty pleasure of ice-creams. Based on guidance of both the businesses, the co. will outperform the 50% guidance if they can execute.
With approx. 1100 cr MCap, the co is at 33x forward P/E and it’s your decision to decide if the risks are worth the bet.

( I had absolutely great time writing the report, I hope you had equally good time and I justified your time.)

**The conclusion is most definitely biased, take it with a bucket full of salt.

** I have no position in the stock.