Prataap Snacks thrives in inflationary storm—reveals Q2 growth as Peak XV exits

Indian snacks giant, Prataap Snacks Limited, posted modest gains in its Q2 results for fiscal year 2025, reporting a 5% revenue increase year-over-year, with revenue hitting ₹4,411 million for the quarter ending September 30, 2024. The company faced significant inflationary pressures impacting raw material costs, yet managed to secure growth, particularly within its pellet snacks segment, despite broader challenges across the industry.

This period also marked a major ownership shift as Peak XV Partners exited its 47% stake in Prataap Snacks, realizing a manifold return. Peak XV’s exit, acquired by Authum Group and investor Ms. Mahi Madhusudhan Kela, was accompanied by an open offer that is currently underway as part of regulatory compliance.

Performance Overview: Balancing Growth Amid Inflation

Despite an industry-wide squeeze on ₹5 MRP packs due to the economic environment, Prataap Snacks achieved volume growth in this price range, a category which represents a substantial portion of the company’s sales. For Q2 FY25, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) reached ₹192 million, with an EBITDA margin of 4.3%. However, profit after tax (PAT) for the quarter was ₹62 million, translating to an EPS of ₹2.58.

The company’s half-year performance (H1 FY25) presented similar growth trajectories with revenue from operations totaling ₹8,625 million, EBITDA at ₹492 million (5.7% margin), and PAT of ₹156 million, indicating a diluted EPS of ₹6.52. Managing Director Amit Kumat highlighted the pressures from rising prices for core ingredients such as potatoes, wheat, and gram, which have pushed the company to make strategic adjustments, including grammage reduction and trade margin adjustments, to balance the escalating costs.

Strategic Shifts and Optimistic Outlook

Kumat shared the company’s adaptive steps to bolster revenue. Prataap Snacks has initiated exports in Q2, expecting initial shipments in Q3, and has expanded its distribution channels by onboarding its products on quick-commerce platforms. The company plans to continue broadening this reach in Q3, which, coupled with signs of improving rural demand and favorable seasonal trends, is expected to support future growth.

To counter input price pressures, Prataap Snacks has announced further cost-reduction and process optimization initiatives in anticipation of additional rises in palm oil prices. Kumat expressed optimism that these measures, combined with the ongoing enhancements to distribution, will allow the company to maintain its competitive edge.

The leadership change following Peak XV’s exit is expected to usher in a fresh era of strategic growth. Kumat acknowledged the pivotal role Peak XV played in Prataap Snacks’ growth over the past 13 years, especially in fostering corporate governance and enhancing internal controls. The new partnership with Authum Group and Kela is anticipated to further Prataap Snacks’ strategic depth and potentially drive higher returns for stakeholders.

Broader Market Impact and Company Vision

Prataap Snacks remains one of India’s leading players in the organized snacks sector with its well-known Yellow Diamond and Avadh brands. Offering a range of snacks, including potato chips, extruded snacks, namkeen, and cakes, the company has a presence across 27 states and 4 union territories. With 15 manufacturing facilities and a distribution network spanning more than 5,200 distributors, Prataap Snacks continues to strengthen its footprint, from metro cities to rural markets and Tier 2 and 3 towns.

Looking ahead, Prataap Snacks aims to leverage this network alongside a growing presence in modern trade outlets and digital commerce. This transition aligns with the company’s vision of expanding its reach while delivering value to consumers across diverse market segments.