Key highlights

The net sales for quarter ended March 2016 grew by 7% to Rs 197.5 crore while net profit de-grew by 50% to Rs 7.2 crore. OPM declined by 263 bps to 8.4%.

The net sales for year ended March 2016 grew by 3% to Rs 780.3 crore while net profit de-grew by 37% to Rs 23.36 crore. OPM declined by 81 bps to 8%.

QoQ sales growth seen in FY16 on back of investment in distribution. The company has added 200 salesman.

Gross margin for FY16 stood at 24%. The mgmt said that it will now focus on the gross margin by driving faster growth in higher gross-margin products such as Ready to Cook popcorn, tortilla chips, and peanut butter.

Lower gross margin and higher A&P impacted Q4 OPM.

A&P FY16 – higher spend in Q4 seen.

Sundrop oil recorded 5% volume growth in Q4. For FY16, it posted 6% volume growth and 8% value growth.

Crystal reported 6% volume decline in Q4 and 14% decline for FY16

Foods business which contributes 22% of revenue reported healthy 18% value growth, excl. the institutional popcorn business in Q4

The company's bag snacks consisting of Act II RTE popcorn, Nachoz, Sundrop pnutz and extruded snacks clocked 87% increase in revenue in Q4 and 40% for FY16.

Bag snack grew 57% in volume in Q4 and 24% in FY16

Ready to eat pop corn volume grew by 3% in Q4 and 7% in FY16.

Vending corn business declined by 16% and consumer pack grew by 7%. FY16.

Ready to cook pop corn grew by 7% volume and 4% value FY16. The mgmt said that it will put lot of energy behind this category

A slew of launches in tortilla chips have led to keener competition. Parle's Mexitos and Fritolays Doritos are new players in the tortilla chips sub-segment. The mgmt is confident of its product and said that Act II Nachoz is very competitive, with competition priced at a 30-75% premium

Sundrop Peanut butter grew 31% in value term to Rs 24 crore. The smaller SKU now accounts for 60% of sales

In FY16, the company added 50000 outlets to its distribution reach. The distribution reach of Act II is 20000 outlets, while that of the newly launched Nachoz is 20000. Peanut butter had a reach of 40000 outlets.

Inflation in corn was 15% YoY in FY16. The company procures and holds corn inventory for 18-24 months. The recent drought in South Africa and rising commodity prices could drive higher corn prices.

The company would be paying the full tax rate in FY17.