Annapurna Swadisht gears up for 50% CAGR over next 4-5 years to Rs 1,000 cr

Annapurna Swadisht Ltd on Sunday said it aims to double revenue in 2023-24 to over Rs 300 crore and maintain a compound annual growth rate (CAGR) of at least 50 per cent over the next 4-5 years.

This ambitious growth for the food-focused FMCG company of East and Northeast India will be driven by increased market penetration and expansion into two major categories: biscuits and noodles, a senior company official said.

To achieve this, the company has roped in GP Sah, the global CEO of the Nepal-based FMCG company that owns Wai Wai branded noodles, to steer the company into its next phase of growth.

Annapurna's managing director, Shreeram Bagla, infused fresh talent into the company with the goal of reaching a topline of Rs 1,000 crore within 3-4 years from Rs 160 crore in FY'23.

"A revival in rural demand, driven by greater distribution strategies and the addition of new categories like biscuits and noodles, will help Annapurna achieve robust growth in the coming years.

"In FY'24 itself, we are targeting to cross a topline of Rs 300 crore, up from Rs 160 crore in FY'23," said GP Sah, joint managing director, in an interview with PTI.

For the first half ending September 30, 2023 (H1'FY24), the snacks-focused company listed on the NSE SME platform, reported a near 100 per cent surge in its revenue to Rs 131.13 crore and a PAT jump of 128 per cent to Rs 6.56 crore.

The biscuits market is worth Rs 50,000 crore, and the noodles segment is now Rs 12,000 crore, but both have significant untapped potential given their low per capita consumption compared to neighbouring countries, Sah stated.

Explaining the rationale behind the growth projection, Sah said that easing raw material prices is helping the industry readjust prices, offering greater benefits to consumers in various forms and formats, including introducing premium products in smaller SKUs in urban markets.

Additionally, a good monsoon, except in a few pockets, will ease the strain on rural demand, which has put pressure on the FMCG sector.

"We are doing very well in the snacks segment, which now accounts for about 75 per cent of our current revenue, and we will continue to innovate in this segment, which is worth Rs 1 lakh crore, including bhujia and namkeen among others," he said.

The company primarily caters to Tier III and Tier IV markets in Bihar, Jharkhand, West Bengal, Assam, Odisha and Uttar Pradesh. It has a portfolio of close to 72 SKUs (stock-keeping units) across ten broad categories, including fryums, namkeens, snacks, candies and cakes.

It has nearly 550 distributors and over 115 super distributors, and the products are available across over 6 lakh retail touchpoints.

Speaking about new categories, Sah said that the company will be present in both the mass and premium segments in noodles and only in the mass segment in biscuits.

However, he emphasised that the company will consolidate its position in its existing markets of eastern and northeastern states.

As of now, the company will be outsourcing for the new categories (biscuits and noodles) to stay asset-light.

ASL has five owned manufacturing units spread across West Bengal at Asansol, Siliguri, Gurap, and Dhulagarh, and six contractual/leasing arrangements at Kakinara (West Bengal), Hazaribagh (Jharkhand), Ranigunj (WB), Ganjam (Odisha), Siliguri (WB), and Mathura (UP).

The company, listed in September 2022, had raised close to Rs 65.43 crore through a preferential issue of equity shares and warrants to fund its growth, the official said.