Sundrop Brands Ltd

Meeting Details

• Date/Time: Monday, 31 August 2026, 09:30 A.M.–05:30 P.M.
• Type/Mode: One-on-One, physical in Mumbai
• Organizer/Event: Company management-led analyst/investor meetings
• Place: Mumbai

Participants

• Key company participants: Management
• External attendees: ICICI Prudential AMC, Kotak AMC, UTI MF, Tata AMC, 360 One MF

Purpose

• Discuss updates/presentations from the Q1 FY’27 post-earnings call

Financial Performance

• Consolidated revenue grew 15% in Q1 FY27.
• Sequential growth 11% over the last quarter; 15% over the prior year quarter.
• B2B growth 18%; e-commerce growth 32%.
• Gross margins up about 110 basis points; EBITDA margin 7%.

Channel and Segment Update

• Sundrop 56% of total; Del Monte 44–45%.
• Popcorn growth value ~18%; volume ~12%.
• Del Monte growth ~14%.
• Ready-to-Cook growth ~9%; Ready-to-Eat growth ~39%.
• Italian portfolio volume ~16–17%; value ~8%.
• Edible oil: 7% volume, 15% value.
• Peanut Spreads declined ~3% in value; recovery signs.
• Innovation portfolio ~100 products launched in 24 months; ~4% of sales from innovation; Q1 innovation ~6% of sales.
• Brand spends rose ~49% last quarter; like-for-like growth ~12% vs Q4; ~5% lower than Q1 last year.
• 80% of outlets billed via Salesforce platform; up from 75%.

Strategic Capex and Synergies

• Del Monte acquisition completed February 2025.
• Greater India licenses: ACT II and Del Monte perpetual; Sundrop global rights.
• Merger synergy ~200 bps in 18 months.
• Capex approach: capital-efficient; use external platforms and third-party systems.

Innovation and Marketing

• Brand spends growth 49% vs last quarter; ROI-centric marketing planned.
• Rs10 Ready-to-Eat packs margin-accretive; higher packs Rs25–Rs50 in e-commerce.
• RTC expansion: distribution in West and South; North and East already established.

Q&A Takeaways

• Core portfolio growth: value 14–15%, volume 9–10%.
• Non-core oils: value ~16%, volume ~7%.
• Peanut Butter strategy: higher-protein and chocolate variants to recover share.
• Sundrop Heart Jodi Pack to run through festive season.

Outlook and Guidance

• Long-term EBITDA margin target around 12% by FY30.
• Annual margin drivers: ~100 bps from scale, 80–100 bps from premiumization, ~100 bps from synergy.
• Growth aspiration: mid-teens to high-teens; 300 bps margin improvement per year, with reinvestment.
• ESOP front-loaded; impact tapering after 18–21 months.

Meeting Details

• Date and time: 07 August 2026, 12:00 IST.
• Event: Investors/Analysts Conference Call.
• Mode: Virtual audio conference call.
• Organiser: Sundrop Brands Limited.

Participants

• No specific management participants listed in the filing.

Purpose

• Discussion on unaudited standalone and consolidated Q1 FY2026-27 results.

Additional Notes

• Audio recording is available on the company website in the analyst calls page.

Business Overview

• Sundrop Brands operates a scaled food platform with Sundrop, Del Monte, and Act II brands.
• Core categories include Ready to Cook, Ready to Eat, Spreads, Premium Staples, and Italian range.
• Strategic focus on core portfolio renewal and channel optimization for scalable growth.

Operational Highlights

• Q1 FY27 EBITDA 30 Cr; margin 7.0%; PBT 17.2 Cr.
• Popcorn growth 18%; new RTE trials; Coffee Caramel and Chocolate Tuxedo Tin launches.
• Spreads headwinds moderating; ecommerce up 16%; new variants Chocolate, High Protein, Jaggery.
• E-commerce grew 32% YoY; Breakfast Cereals and Plain Oats launched.
• A&P spend up 49% sequentially; INR 6 Cr and INR 1.2 Cr reclassifications.
• Sales force automation: 387k outlets enrolled; 75%+ bills in Q1 FY27.
• 100 launches across Act II, Sundrop, Del Monte in 24 months; INR 60 Cr incremental sales.
• Gross margin improved 110 bps in Q1 FY27 vs LY.

Financial Performance

• Material costs 275 Cr; EBITDA 30 Cr; EBITDA margin 7.0%.
• PBT 17.2 Cr; ESOP/one-time expenses 5.0 Cr.
• Normalized EBITDA 30 Cr; 7.0% of sales.

Outlook & Strategic Priorities

• Focus on core growth via high-ROI marketing investments.
• Scale through channel expansion, e-commerce, and new product launches.
• Investments to drive gross margin expansion and cost efficiency.
• Capital allocation focuses on profitable growth and ROI.

Risks & Mitigation

• Inflationary pressures impact category value growth; pricing pass-through critical.
• Global trade environment and currency volatility pose headwinds.
• Mitigation via margin improvement programs and selective SKUs.

Amalgamation approvals and structure

• Boards of DMF and DMFN approved the amalgamation scheme on 9 July 2026.
• Merger is 100% WOS; no new shares issued.
• DMF’s investment in DMFN will be cancelled upon effectiveness.
• Scheme filed under fast-track u/s 233 of the Companies Act, 2013; regulatory approvals required.

Financials and entity details

• Annexure shows FY2026 provisional turnover: DMF INR 670.27 Cr; DMFN INR 83.29 Cr.
• Registered offices of DMF and DMFN are in Telangana.
• Rationale: operational flexibility, cost synergies, and simplified structure.

Related party and governance

• Related party transaction provisions not applicable; entities are wholly owned subsidiaries.

Dematerialisation status

• Dematerialisation requests processed; accepted/rejected confirmations sent to depositories.
• Securities dematerialised have been listed on stock exchanges where existing securities are listed.
• Physical certificates for dematerialisation were mutilated and cancelled after verification; depository name substituted as registered owner within timelines.