Prataap Snacks posts 6.3% revenue growth in 9M FY25 despite inflationary pressures

Prataap Snacks Limited (PSL), one of India‘s leading snack food manufacturers, announced its unaudited financial results for the third quarter (Q3) and nine months (9M) ending December 31, 2024. Despite macroeconomic challenges and unprecedented operational hurdles, the company reported revenue growth driven by strategic initiatives, cost-optimization measures, and its first foray into exports.

In Q3 FY25, PSL achieved a 9% year-on-year (YoY) increase in revenue, with total income from operations reaching ₹4,426.9 million. For the nine-month period, revenue climbed by 6.3% YoY to ₹13,005.6 million. However, the company faced headwinds from rising raw material costs, resulting in a net loss of ₹147.3 million for Q3 and ₹46.2 million for 9M FY25.

What Challenges Did Prataap Snacks Face This Quarter?

The third quarter was marked by inflationary pressures, sharp increases in input costs, and an operational setback caused by a fire at the company’s Jammu manufacturing facility. The exceptional loss from the fire amounted to ₹343.4 million.

Inflation significantly impacted the prices of key raw materials such as palm oil and potatoes, with the reinstatement of import duties on crude and refined palm oil further escalating costs. These pressures eroded profitability despite the company’s proactive measures, including recipe adjustments and optimizing trade margins.

Amit Kumat, Managing Director of Prataap Snacks, stated, “While inflation and subdued urban demand posed challenges, rural markets provided a much-needed boost to sales growth. Our strategic focus on operational efficiency, cost optimization, and export growth has been instrumental in navigating this tough environment.”

How Is Prataap Snacks Driving Growth Amid Headwinds?

Prataap Snacks has demonstrated resilience by implementing a series of strategies to mitigate rising costs and boost revenue:

Expansion into Exports: In Q3 FY25, the company commenced exports, shipping its first batches to international markets. This marks a significant step toward diversifying revenue streams.

Cost-Optimization Efforts: Measures such as recipe adjustments, process reengineering, and trade margin optimization helped offset rising raw material costs to some extent.

Focus on Rural Markets: With urban demand sluggish, the company has successfully tapped into rural markets, leveraging its extensive distribution network.

What Are Prataap Snacks’ Future Plans?

The company’s strategic roadmap includes a multi-pronged approach to strengthen its position in the highly competitive Indian snacks industry. Key priorities include:

• Distribution Expansion: Strengthening its market reach across India and building a presence in modern trade outlets.
• Premiumization of Products: Introducing premium offerings to cater to evolving consumer preferences and boost margins.
• Sales Force Automation: Enhancing sales efficiency through the adoption of advanced digital tools.
• Export Diversification: Growing its footprint in international markets to establish new revenue channels.

The organized snacks market in India is growing rapidly, driven by urbanization and changing consumer lifestyles. With its diverse product portfolio under the Yellow Diamond and Avadh brands, Prataap Snacks is well-positioned to capitalize on this trend.

How Does Prataap Snacks Compare to Industry Trends?

Prataap Snacks operates in a competitive market where major players are vying for market share amid rising costs and economic uncertainty. The company’s focus on cost optimization, premiumization, and rural market penetration aligns with broader industry trends. Furthermore, its move into exports places it on a path to long-term growth, as demand for Indian snacks increases globally.

About Prataap Snacks Limited

Headquartered in Indore, Prataap Snacks Limited is a prominent player in India’s snacks industry, offering a wide range of products, including potato chips, extruded snacks, traditional namkeen, and cakes. Operating under the Yellow Diamond and Avadh brands, the company caters to diverse demographics across rural and urban markets.

With 16 manufacturing facilities, including eight owned and eight on a contract basis, the company boasts a robust distribution network of over 5,200 distributors, ensuring nationwide reach. Its focus on innovation, affordability, and operational excellence has earned it a strong market presence.