Tasty Bite surges 15%, hits record high; stock price crosses Rs 20,000-mark

Shares of Tasty Bite Eatables hit a record high, crossing the Rs 20,000 mark at Rs 20,800 after surging 15 per cent on the BSE in intra-day trade on Thursday.

The stock of the packaged foods company surpassed its previous high of Rs 19,519, touched on July 6, 2021. In the past three weeks, the stock has outperformed the market and rallied 40 per cent, as compared to 1.2 per cent rise in the S&P BSE Sensex.

Tasty Bite is a leading brand in the natural, organic and ready-to-eat food category in North America. The consumer business has a range of Ready-to-Eat Indian and Asian entrées, ready-to-cook sauces, ready-to-eat organic rices and grains. It also manufactures several products in these categories for other leading brands in North America and UK.

Tasty Bite Food Service business comprises a range of customized specialty formed frozen products, sauces and gravies. The company is a trusted partner to marquee quick service restaurant (QSR) and Cloud Kitchen brands in the food service industry across India and South East Asia.

During the financial year 2020-21 (FY21), the company’s revenues de - grew by 11 per cent at Rs 385 crore over the previous year. The export business grew 9 per cent on account of constant demand from US markets and touched revenues of Rs 301 crore. Tasty Bite Food Service business has been highly impacted by the pandemic in the first half of the year leading to lower revenues.

Material cost in the year decreased by 210 basis points (bps) over previous year to 60.2 per cent of revenue mainly on account of better yields driven by higher efficiencies and business mix impact. Stronger cost controls and increased efficiencies helped deliver an Ebitda (earnings before interest, taxes, depreciation, and amortization) of 18 per cent (degrowth of 1.3 per cent over the previous year).

The management said the company intends to continue focusing on both the consumer as well as the food service business. While in 2020, the company witnessed an increased demand for the consumer business and decline in the food service business, over the longer term the management is confident about the growth prospects for both these verticals. An increasing number of online retailers and delivery services in America is also boosting the growth of the ready-to-eat food market.

“From a long-term perspective, Covid-19 is expected to become an enabler boosting preference for QSRs especially as consumers shifted to familiar brands that focus on safety and hygiene. With supply chains also being a challenge, there was a significant shortage supply which again benefitted the larger players alone. It is pegged that the chained outlets will become the highest growing segment with an expected CAGR of 23 per cent in the food service industry over the next five years,” Tasty Bite said in financial year 2020-21 (FY21) annual report.

The younger demographics, increased participation of women workforce, rise in disposable income, larger focus on value meals, increased exposure travelling abroad and brand perception will lead for growth of the industry, the company said.

Meanwhile, Tasty Bite has a low equity base of 2.56 million shares, with promoters holding 74.23 per cent of the shares. The remaining 25.77 per cent holdings are with individual shareholders (16.90 per cent), foreign portfolio investors (3.64 per cent) and others, the March 2021 shareholding pattern data shows.