4 Stocks in snacking sector to see strong growth ahead according to Motilal Oswal

Synopsis: Motilal Oswal sees India’s packaged food industry growing ~9.7 percent CAGR, with 80 percent unorganised market enabling strong earnings-led upside across Bikaji, Gopal, Prataap and Mrs Bectors.

India’s packaged food industry is entering a strong growth phase, backed by rapid urbanisation, changing lifestyles, and a rising preference for convenience foods. Food processing already forms a significant part of the sector and continues to expand steadily.

According to Motilal Oswal, the market remains largely unorganised, creating a strong opportunity for organised players to gain share through wider distribution, product diversification, and innovation, while benefiting from improving demand and long-term consumption trends.

What is the rationale behind the string growth?

Growth aspects of the Industry: Consumption of packaged foods is steadily increasing as urbanisation accelerates and lifestyles become busier, with more nuclear families and higher participation of working women. This shift is driving a growing preference for convenient, ready-to-eat, and packaged food options, creating a strong and sustained demand tailwind for the industry.

Food processing already makes up about 35 percent of India’s overall food sector and is poised for healthy growth, with the industry expected to expand at nearly 9.7 percent annually between FY24 and FY27. With around 80 percent of the market still unorganised, organised players have a clear opportunity to gain market share as consumption shifts towards branded and packaged products.

Stocks under the MOSL coverage are expected to gain value

Bikaji Foods International Ltd

With a market capitalization of Rs 17,586 Crore, the shares of the company on Friday closed at Rs 699.85 per share. In accordance with the close price, the “Buy” Target of Rs 900 by MOSL, is an upside of  28.5 percent.

Rationale: Bikaji is positioned for significant growth through the aggressive expansion of its direct distribution network. Driven by these gains, the company is projected to achieve robust financial scaling from FY25-28, with Revenue, EBITDA, and APAT (excluding PLI) expected to deliver impressive CAGRs of 15 percent, 29 percent, and 39 percent, respectively.

Bikaji Foods International Limited is one of India’s largest fast-moving consumer goods (“FMCG”) brands. The company’s product range includes six principal categories: bhujia, namkeen, packaged sweets, papad, western snacks as well as other snacks, which primarily include gift packs (assortment), frozen food, mathri range, and cookies.

Gopal Snacks Ltd

With a market capitalization of Rs 4,171. Crore, the shares of the company on Friday closed at Rs 320.25 per share, in accordance with the close price the “Buy” Target of Rs 400 by MOSL, is an upside of  24.9 percent.

Rationale:  The company is looking to diversify beyond its offering of Gathiya, with distribution expansion as the demand for the products recovers going forward. The brokerage expects the Revenue, EBITDA and APAT of the company to grow at a CAGR of 12 percent, 23 percent and 23 percent over FY25-28.

Founded in 1999, Gopal Snacks is a leading manufacturer in the fast-moving consumer goods (FMCG) sector, specialising in traditional Indian snacks and packaged food products. The company is headquartered in Rajkot and has a strong presence across 12 states and 3 union territories.

Prataap Snacks Ltd

With a market capitalization of Rs 2,791 Crore, the shares of the company on Friday closed at Rs 1144.50 per share. In accordance with the close price, the “Buy” Target of Rs 1,500 by MOSL, is an upside of  31 percent.

Rationale: The company is making a major comeback by streamlining its operations, specifically by plant consolidation, using more robotics, and fixing its shipping routes. These efficiency moves are paying off in a big way: while sales are expected to grow at a healthy 11 percent annually through 2028, the company’s core profit is projected to surge by a massive 57 percent each year as the business becomes much cheaper and faster to run.

PrataapSnacks Limited (PSL) is an Indian snack food company engaged in the manufacturing and marketing of multiple product variants like potato chips, extruded snacks and namkeen (traditional Indian snacks) under the Yellow Diamond brand and sweet snacks under the Rich Feast brand.

Mrs Bectors Food Specialities Ltd

With a market capitalization of Rs 7,011 Crore, the shares of the company on Friday closed at Rs 228.4 per share. In accordance with the close price, the “neutral” Target of Rs 280 by MOSL is an upside of 22.6 percent.

Rationale: The company is prioritizing new product ideas and growing outside North India. While its market price (valuation) seems high right now, the financial outlook is strong. From 2025 to 2028, annual sales should grow by 13 percent, while core profits and net earnings are expected to climb even faster at 17 percent and 21 percent.

Mrs Bectors Food Specialities Ltd is a leading Indian manufacturer of biscuits, bakery products, and ready-to-eat desserts. It operates through two major brands, Cremica (biscuits, cookies, crackers, creams) and English Oven (breads, bakery, value-added products). The company is also a preferred supplier to top QSR chains like McDonald’s, Domino’s, KFC, and Subway in India.

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