Bhujia has been a key part of India’s snacking indulgence for centuries. Bhujia is a snack made by frying chickpea flour (besan) in shape of small noodles. Similar snacks are present across India with names like sev, gathiya, etc. Over 100 years back Bikaner-based Ganga Bishan Agarwal, nicknamed Haldiram, had however thought of creating his own version of bhujia. He had used moth flour instead of besan, and made a thinner bhujia which is today popularly known as Bikaneri Bhujia. Thus began the tale of Haldiram’s and Bikaji, two of the leading brands in India’s snacking industry. 

India savory snacks market was $9B+ in 2021, and expected to reach $15B by 2025 growing at 13% CAGR. In 2021, Traditional snacks contribute 48% share ($4.3B) and western snacks $4.8B. About 43% ($5.1B) of this market is unorganized, mainly consisting of regional players who focus on local snacks selling in local geographies. 

Out of $5.1B organized savory snacks market ethnic bhujia is $800M with 15% share, western snacks are $3B and other ethnic namkeen & snacks are $1.3B. Below infographic highlights the share of major brands in organized ethnic and western savory snacks market of India. 

History of Bikaji Family

Bikaji and Haldiram’s – the two of the largest snacking brands in India are run by grandchildren of Ganga Bishan (aka Haldiram). Ganga was 11-year old when working at his father’s bhujia business he thought of innovating the traditional bhujia. The snack soon became a hit in the region. Ganga had three sons – Moolchand, Satyanarayan, and Rameshwarlal. 

In the 1950s Ganga went to Kolkata along with Satyanarayan and Rameshwarlal, and established the “Haldiram Bhujiawala” brand. At the same time Moolchand managed the shop in Bikaner. In the 1960s Ganga returned to Bikaner handing over the Kolkata business to his two youngest sons. But Satyanarayan split from the business to start “Haldiram & Sons” and failed to replicate his father’s success. Rameshwarlal also cuts ties with the rest of the family thus separating the Kolkata business – “Haldiram Bhujiawala”. The business is presently run by Rameshwarlal’s son Prabhu Agarwal and grandson Manish Agarwal. This unit had done Rs. 380Cr business in FY22 with Rs. 45Cr EBITDA. 

Moolchand had five children – Shiv Kishan, Saraswati Devi, Shiv Ratan, Manoharlal and Madhusudan. By the 1980s, Shiv Kishan and his sister Saraswati had expanded the business to Maharashtra, by setting up in Nagpur. The youngest two sons Manoharlal and Madhusudan took the brand to Delhi in 1984. Shiv Ratan took over the operations in Bikaner. In 1986, he turned this into a separate entity and by 1993 started a separate brand “Bikaji”. 

Both the Delhi and Nagpur entities put together did Rs. 9,000Cr revenue in FY22 with EBITDA of Rs. 1,500Cr. Bikaji reported a sales of Rs. 1,966Cr and Rs. 213Cr EBITDA for FY23. 

IPO

Bikaji Foods had a successful Rs. 881Cr offer for sale, IPO in November 2022. The company had a successful listing at Rs. 322.80, a 8% premium to issue price of Rs. 300. The public market has rewarded the company with growing valuations and to achieve highs of Rs. 490 (60%+ upside) within 10 months of listing. With ~Rs. 490 share price the market cap of the company is over $1.5B.

We have been excited about public listing and had written an article on recent IdeaForge IPO.

Bikaji Business

Bikaji produces and sells a diversified portfolio of 300+ products across categories including Bhujia (33% share in FY23), Namkeen (36%), Packaged Sweets (12%), Papad (6%),Western Snacks (8%) and Other Snacks (4%). Western snacks is emerging as a strong category for the portfolio mix following macro trends in Indian household consumption. 

Bikaji has built a strong pan India distribution across 9.5L outlets across India, of which about 1L outlets were added in just the last year (FY23) and plans to add another 1.5L outlets in FY24. Company in last 5 years has seen ~20% YoY growth in all its core & focus domestic markets, and ~15% YoY growth in exports. Bikaji had exported Rs. 64Cr of snacks & sweets in FY23 across 25 countries globally. 

Bikaji has done an excellent job in creating a strong household brand over the last 3 decades. The company signed up Amitabh Bachan as its brand ambassador in 2019, and is renewing the contract till 2025. Company runs a strong marketing campaign across ATL channels of Television, Radio, and Print. It also runs collabs in PVRs, and Paytm cashback campaign. The marketing expenses are in range of 1.5-2% for the company, and this is expected to continue.

Bikaji has a manufacturing capacity of 270K tonnes across 11 facilities, of which 9 are owned by Bikaji and subsidiaries, the other 2 are contract manufacturing units. The facilities are spread across India with 5 in Bikaner, 2 in Muzaffarpur, and 1 each in Kanpur, Tumkur, Kolkata and Guwahati. Bikaji is the largest manufacturer of Bikaneri Bhujia in the country with 58K tonnes of manufacturing capacity.

Bikaji Financial Snapshot

The Baniya Business of Bikaji has an amazing orchestration of manufacturing capabilities, portfolio mix, branding and distribution which has led to a strong success of the brand in the last three decades. Over the last 5 years the company has grown at a CAGR 21.6% in value, and 13.0%in volume terms. 

The company has grown to a revenue of Rs. 1,966Cr in FY23. With tight control on procurement of raw material and manufacturing facilities the company is able to gross margins at ~30% steadily. With operational efficiency across other cost heads of distribution, marketing and administration the company is able to maintain EBITDA in range of 9~11% consistently over the years. 

The company’s excellence in distribution could be observed in the working capital turnover ratio which is ~19 for FY23. This signifies that company is able to do 19 turns of inventory in a year, meaning within 20 days Bikaji is able to move its inventory. The higher the turnover number the better. Similarly, company is doing over 3 times turnover on net fixed assets signifying good utilization of capex resources. The company is consistently delivering a healthy double digit ROCE and ROE of ~10%. 

Bikaji has also started availing PLI schemes, and has realized PLI of ~Rs. 20Cr in FY23 for meeting target sales of over Rs. 1220Cr in FY22. Company expects to realize another ~Rs. 240Cr in next 5 years from PLI scheme. 

What’s more on snacking menu

Along with Bikaji, there are handful other brands including Haldiram’s and Balaji which cover large share of the traditional snacking market. However, India has seen a slew of new-age snacking brands entering the market. Most of these brands have a strong focus on health with a portfolio focused on niche categories. 

Health Bars and cereals/muesli have become quite popular with the onset of brands like Yogabar, The Whole Truth Foods, True Elements, etc. While Epigamia is focussing on making healthier dairy products like yogurt. Multiple Ayurvedic supplements brand have also come up like Oziva and Kapiva. Open Secret is another brand which is leading the way in healthy snacking. Interestingly, while there was a lot of buzz around vegan-based snacking companies a few years back, none of the brands have seem to be as successful as their counterparts in parallel categories. 

That’s all for snacking menu, but wait our bhujias are not without beer – you can checkout our piece on “What’s Brewing in Beer Business?”