The snacks and namkeen industry in India is a rapidly growing sector driven by a shift in consumer preferences towards convenient, ready-to-eat food. Traditional snacks, such as namkeen, sev, and bhujia, alongside modern innovations, are in high demand across urban and rural areas. Major players in the sector include Bikaji, Prataap Snacks (maker of brands like Yellow Diamond), Haldiram’s, and Lays (PepsiCo). These companies cater to a diverse consumer base, offering both regional specialties and national favorites, with a focus on quality, taste, and affordability.
Growth Prospects and Industry Impact
The industry is expected to witness steady growth due to increased disposable incomes, busy lifestyles, and a rise in snacking habits, particularly among the younger generation. As the demand for premium and health-conscious products rises, companies innovate with low-calorie, organic, and nutrient-rich variants. This growth trend creates a highly competitive landscape, leading to enhanced product offerings and distribution strategies. Furthermore, the sector benefits from increased retail and online availability, further driving its expansion.
Share Price
The shares of Prataap Snacks Ltd. are currently trading at Rs. 1,161 up by 1.3% from its previous close of Rs. 1,146. The stock also touched an intraday high of Rs. 1,180 as of January 08, 2024.
Recent Updates
Acquisition Overview
Authum Investment & Infrastructure Limited, along with Ms. Mahi Madhusudan Kela (PAC), has made an open offer to acquire 62,98,351 equity shares of Prataap Snacks Limited. This represents 26.01% of the voting share capital, with each share having a face value of Rs. 5.
Documentation Timeline
The process began with a public announcement on September 26, 2024, followed by a corrigendum dated October 4, 2024. A detailed public statement was published on October 3, 2024, and a draft Letter of Offer was submitted on October 11, 2024.
Latest Development
The most recent update in this acquisition process is the submission of the Letter of Offer (LOF) dated January 7, 2025. This marks a significant milestone in the ongoing acquisition process of the Target Company, Prataap Snacks Limited.
Financial Outlook
In September 2024, Prataap Snacks Ltd. reported sales of ₹441 crore, showing a marginal increase of 1.6% from ₹434 crore in September 2023. However, the company experienced a significant decline in profitability.
EBITDA dropped to ₹19 crore in September 2024 from ₹38 crore in the same period last year, reflecting a decrease of 50%. This resulted in a reduction in the Operating Profit Margin (OPM), which fell from 9% in September 2023 to 4% in September 2024.
Net profit also saw a decline, falling by 64.7%, from ₹17 crore in September 2023 to ₹6 crore in September 2024. These financial results indicate challenges faced by the company, including higher costs or operational inefficiencies, despite the slight increase in sales.
About the Company
Prataap Snacks Limited (PSL) is a leading Indian snack food company known for its diverse range of products, including potato chips, extruded snacks, and traditional namkeen, marketed under its flagship Yellow Diamond brand. The company also offers sweet snacks through its Rich Feast brand. PSL has established itself as a market leader in the Rings category and is among the top five players in the Western Savory Snacks segment.
In Q3FY24, PSL (with Yellow Diamond and Avadh brands) emerged as the market leader in the Extruded Snacks category, reinforcing its strong position in the Indian snack market. The company continues to focus on innovation, quality, and expanding its product portfolio to meet the evolving preferences of Indian consumers.
Written By: Dipangshu Kundu
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