SUNDROPNSEQ4 & FY26May 08, 2026

Sundrop Brands Limited

10,498words
46turns
5analyst exchanges
5executives
Management on call
Nitish Bajaj
GROUP MANAGING DIRECTOR – SUNDROP BRANDS LIMITED
Asheesh Kumar Sharma
CHIEF EXECUTIVE
Kpn Srinivas
CHIEF FINANCIAL OFFICER – SUNDROP BRANDS LIMITED
Abhinav Kapoor
CHIEF EXECUTIVE OFFICER
Ajay Thakur
ANAND RATHI SHARE AND STOCK BROKERS LIMITED
Key numbers — 40 extracted
rs,
on, Sundrop Brands is committed to building joyful food experiences to the modern evolving consumers, and we continue to do so by ensuring that we launch innovative, delicious and more convenient pack
11%
d on a very strong growth trajectory for us. As a business, we have delivered a revenue growth of 11% in the entire total business consolidated for Sundrop and Del Monte put together. Specifically
12%
hich is unique for Del Monte business, where we have continued again with a very strong growth of 12%. So both B2C and B2B business continue to be on a strong growth trajectory for business. Talkin
26%
our emerging channel footprint, which is our e-commerce business, again, a very strong growth of 26%, driven by increased investments going into this portfolio. So that also continues to shape very
rs 0
started our aggressive investment journey from quarter 4 of FY25. So after the new set of [promoters 0:06:22] came into the business, we have started investing very strongly on the portfolio from quar
5%
t intrinsically, if I look at from our overall investment strategy, we continue to spend close to 5% to 6% of our top line on advertising, much higher than what we were doing, let's say, a year to 2
6%
insically, if I look at from our overall investment strategy, we continue to spend close to 5% to 6% of our top line on advertising, much higher than what we were doing, let's say, a year to 2 years
4%
urney has moved even further forward, and we had a significant gross margin expansion of close to 4% in this quarter versus same quarter last year. As an outcome of these, our EBITDA has grown very
7.2%
le EBITDA. And hence, what I'm really calling out is that our EBITDA margin has moved to close to 7.2%. Just also for a clarification, this is EBITDA margin reflecting net of one-off spends and also t
INR28 crore
in nature. So that has moved very strongly. And overall, our EBITDA for the quarter was close to INR28 crores, excluding ESOPs and one-off expenses. Moving on to full year. I'm on Slide 7. Full year '26,
10%
-off expenses. Moving on to full year. I'm on Slide 7. Full year '26, very similar performance, 10% growth at a consolidated level, 11% growth in our B2B business. E-commerce growth was stronger at
35%
growth at a consolidated level, 11% growth in our B2B business. E-commerce growth was stronger at 35%. Overall, we invested close to 18% expansion in our advertisement expenses, which is ahead of w
Guidance — 20 items
Nitish Bajaj
opening
“Why it's important to see in a different context is because we really started our aggressive investment journey from quarter 4 of FY25.”
Nitish Bajaj
opening
“As growth has moved up from 5% last year to 12% in FY26 and quarter 4 has been at about 14% growth.”
Nitish Bajaj
opening
“Having said that, as we go into the next year, where it will be intrinsically volume growth because price adjustments have been done all in the previous year, we would see strong accelerated growth coming back in value terms in value business also.”
Nitish Bajaj
opening
“And this call we have taken right from FY25 quarter 4 onwards.”
Nitish Bajaj
opening
“Net-net, there is still important point is this business, if it continues to maintain our growth momentum on volume, next year, it would reflect very strong volume and value growth, which we as a management continue to drive.”
Nitish Bajaj
opening
“Having said that, our assessment will be we are still close to 1 million outlets, and there is a very large headroom to grow and expand this business through a combination of distribution expansion in general trade and, of course, consumption on the go, which is seeing an increasing tailwinds because of expanding quick commerce channel in the country.”
Nitish Bajaj
opening
“So focus for the period ahead will be to also bring in new and grow in some of the additional franchises within the mayo side of business, where we did some new pack introduction at a mass price point.”
Nitish Bajaj
opening
“And hence, e-commerce business will be very pivotal for driving accelerated growth in this business.”
Nitish Bajaj
opening
“So if I actually take out the impact of value decline, the growth of this business will be much larger or in excess of 40% for us.”
Nitish Bajaj
opening
“But what I would want to call out is there is a reclassification of visibility spend of close to INR6 crores in a single quarter, which is actually for the full year we are doing reclassification, in line with the guidance we have from IFC on how to treat visibility spends in trade.”
Risks & concerns — 9 flagged
And I'll talk about what shifts we have made in this business, but this actually is a good sign because historically, this business used to be one which would decline for us.
— Nitish Bajaj
Value terms, it is still a decline of 4%.
— Nitish Bajaj
This business continues to be under pressure in modern trade and e-commerce.
— Nitish Bajaj
We also need to factor in that in this 35% growth, again, we have the olive oil business and a large part of olive oil business does come from e-commerce and quick commerce channels where we have a value decline.
— Nitish Bajaj
So if I actually take out the impact of value decline, the growth of this business will be much larger or in excess of 40% for us.
— Nitish Bajaj
What is the solution, if at all, you have to stem this decline?
— Percy Panthaki
And therefore, in the process, there is a value decline that one has seen.
— Abhinav Kapoor
One is that even while we say that there is a 7% decline happening on the overall spreads in the peanut butter business, if you split it into the big packs, which is more commoditized versus the small consumer packs, we have had a very good growth of double digit in volume and unit terms in terms of the small pack.
— Percy Panthaki
By Q2, again, this year, we also expect that we will be to start negating the impact of the losses and start gaining volume growth, say, from quarter 2 onwards.
— Percy Panthaki
Q&A — 5 exchanges
Q
Sir, I have 3 questions. Starting first question, over 1 year, we have done the integration of 2 businesses. So this 10% growth what we have got, what is the journey today? Have we completed the entire integration? Because we were saying that the 2 businesses are completely different, but they complement in terms of B2B and in terms of B2C. So what benefits we have extracted? And what is the strategy going forward?
Nitish Bajaj
Okay. Any other questions also Shirish? Yes. My second question is on the popcorn. I think the growth in ready to eat is humongous. So I just wanted to check upon two three things. What is the distribution of RT ready-to-eat and in the overall popcorn business what is the contribution of ready-to-eat? Of course, flavor strategy has worked, but what else can happen in this category? And third on the margin front, now we have stabilized, but I think there is also an angle that 5% GST rationalization has happened. The industry has got lot of tailwind. But similarly we have palm oil which is risin
Q
Hi, sir. This is Percy Panthaki here. My first question is on the merger synergies. Of course, we have done well in terms of growing our full year EBITDA this year versus the last year. But now that you've sort of had both these businesses under your belt for about 12 months, can you give us a little more granular plan in terms of realizing the merger synergies, both in terms of action points, the time lines for the action points and the kind of quantification of cost benefits that can accrue on account of these actions?
Nitish Bajaj
Percy, right because moderator said Siddhesh. Just to clarify, do we have Percy here? Yes, yes. Percy, I just dialled in through my colleague, Siddhesh’s line. Okay, right. Yes. Hi, Percy. Good afternoon to you. So yes, I'll talk you through how we are going about the journey now. So one, we talked about the entire sales enablement, which is a very critical data feed for our integration decision. Second is the entire back end or operations where 2 organizations are wired differently, and we need to bring them on the same platform. So the second area of work which is going on as we speak right
Q
Two quick questions, one on popcorn and peanut butter. On the peanut butter side, we have launched a few products. I think in the earlier quarter, we launched one in the protein pack and Omega 3 and current in the chocolate and the jaggery one. So these products are actually still there in the market by some of our peers like MyFitness, Pintola, Alpino. So how would you price the product? Because I think so in the Q3 that we had launched, we had put -- we had priced it a notch below the RPOs. So what is the kind of sales traction that we are seeing there? And is there a similar strategy are we
Nitish Bajaj
Okay. So thank you so much for this question. So yes, you're right. We have seen impact on new -- on the side of high-protein segment with new players coming in and building the category on the promise of high protein. We have built the gaps -- bridge the gaps on that side and launched these products in quarter 3, and they have been in the stage of listing. So generally, to get an initial traction and initial momentum, even if you look at players like MyFitness and Pintola, which you mentioned, they do give some kind of discounting. We have also given that to build some kind of initial momentu
Q
Sir, my question is on the differential growth and gross margin between the core categories and the noncore categories. So where you identify core categories at 65% of the business and from your presentation of like-to-like 10% growth, right, when you -- there's one slide where you have given Del Monte’s full year number and there's a 10% growth. So is it possible to just give some indication on the core category or the noncore category growth?
Nitish Bajaj
Yes. So broadly, I will say if you look at most of our core categories -- sorry, all of our core categories are sitting in food as a platform. And one of our large categories, which we haven't called out in the core, which is edible oil, which is sitting in a space which is commodity in nature, right? So if I look at our margin profile of our food business, our gross margin profile will be close to around 25% as an organization. And foods will be about 4% to 5% higher and edible oil will be about 5% -- 7% to 8% lower than that. That's the way to look at it. In foods, we also have some categori
Q
Thank you all. Thank you so much.
Management
Speaking time
Nitish Bajaj
18
Percy Panthaki
8
Moderator
6
Henil Bagadia
4
Pritesh Chheda
4
Abhinav Kapoor
3
Shirish Pardeshi
2
Ajay Thakur
1
Opening remarks
Ajay Thakur
Hi, everyone. Thanks for attending the call. From the management side, we have with us Mr. Nitish Bajaj, Group Managing Director; Mr. Asheesh Kumar Sharma, CEO and Executive Director; Mr. KPN Srinivas, CFO. Without wasting much of our time, I would like to hand over the call to Mr. Nitish Bajaj, for his opening comments, and followed by the Q&A session. Over to you, sir.
Nitish Bajaj
Right. Thank you so much, Ajay, and good morning to all the participants on this -- good afternoon to all the participants on this call. I will start with the presentation. I hope you have the slide deck with you. For the sake of -- because we are on an earnings call, I will keep talking about the page number on which I am, so that you can relate to the slide which I'm referring to while making my commentary. So I'll move straight to Slide number 3. For investors who are joining for the first time in -- for this call, it's just a brief recap of our vision. So as an organization, Sundrop Brands is committed to building joyful food experiences to the modern evolving consumers, and we continue to do so by ensuring that we launch innovative, delicious and more convenient packaged food solutions for our consumers. Moving on to page number -- Slide number 4. A quick recap of our investment thesis. Sundrop Brands, as you know, with the acquisition of Del Monte Food, which happened in February
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