Prataap Snacks posted a 20% rise in quarterly revenue to ₹500 crore, though higher raw material costs weighed on profitability. The company also announced the acquisition of RLOP Food Processing to support future expansion plans.
Prataap Snacks Limited reported a 20% year-over-year revenue growth for the first quarter of fiscal year 2027, with total revenue touching ₹500 crore. The growth was primarily supported by strong demand for its Namkeen snacks, along with steady contributions from its potato chips and extruded snacks categories. Despite the top-line growth, the company faced challenges on the profitability front during the quarter.
Impact of Rising Costs on Margins
The company reported that gross margins declined by 138 basis points to 27.2% compared to the same period last year. This pressure on margins was driven by a 20% increase in the prices of key raw materials, most notably palm oil and packaging materials. As a result of these input cost pressures, the company’s operating margin, or EBITDA margin, narrowed by 35 basis points to 4.1%. Market observers are noting these trends as raw material volatility remains a significant factor for consumer goods companies.
Expansion Strategy and Management Change
Prataap Snacks has also made changes to its leadership and expansion strategy. The company announced that Mr. Arvind Kumar Mehta has resigned from his roles as Chairman and Executive Director. In a move to strengthen its manufacturing footprint, the board has approved the acquisition of RLOP Food Processing for ₹16.5 crore. While the acquired entity currently does not have active operations, the company stated that the deal is intended to secure leasehold land for future greenfield manufacturing projects, helping the firm scale its capacity in the long run.
Outlook and Future Monitorables
Looking ahead, the company continues to focus on a two-tier distribution strategy and the consolidation of manufacturing plants to drive efficiency. These initiatives are aimed at improving operational performance in the coming years. Investors will likely monitor whether the company can successfully manage its input costs and execute its planned capacity expansion without incurring excessive debt. The pace of margin recovery, which depends on potential price adjustments and cost optimization, remains a primary area to track for those following the company’s financial progress.