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Revenue
₹407.47 Cr
verified against source
Revenue YoY
10%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Sundrop Brands delivered a solid Q3 FY26 with consolidated revenue growth of 10% YoY, driven by strong volume momentum in core categories. EBITDA surged 80% YoY as gross margins expanded 330 bps sequentially, led by the foods business. E-commerce grew 31% and quick commerce ~50%, while advertising investments rose 22%. The popcorn business (Act II) saw 12% volume growth, and Italian (Del Monte) olive oil volumes jumped 34% despite value decline from price pass-through. Management reiterated a path to double-digit EBITDA margins over 2-3 years via 3-4% gross margin expansion and 3% SG&A reduction. Key risk: intensifying competition in popcorn from Marico's entry, which could pressure market share if not countered effectively.
Colored figures show movement against the previous available record.
Guidance to track
- Management targets expanding EBITDA margin to double digits over the next 2-3 years through 3-4% gross margin improvement and 3% SG&A reduction.
- Aiming to double revenue in 3-4 years, implying ~15% CAGR, with 2/3 from volume and 1/3 from value in near term.
- Expect to cover all 375,000 outlets on mobile app by end of FY26, improving distribution productivity.
- Marketing spend as a percentage of revenue will stay at ~6%, with absolute investment growing ahead of revenue.
Risks flagged
- Marico's entry into popcorn with strong distribution could pressure Act II's market share if not countered effectively.
- Peanut butter and spreads continue to decline due to innovation lag and share loss in modern trade and e-commerce.
- Commodity inflation in edible oils may pressure gross margins; management is protecting absolute margins rather than percentage.
- Promoter increased stake via off-market purchase from Del Monte Pacific, but pledge of 33% holdings has caused ~30% stock decline.
Key quotes
- We are number one player in both RTE and RTC formats both ready to cook and ready to eat format we are by far the dominant player in this market.
- Our biggest bet is popcorn business and the entire Act II franchise. Our second biggest bet would be Italian franchise which is sitting under Del Monte portfolio.
- We will not let any stone unturned to make sure that this business does not get compromised. Our endeavor is to actually grow this business much faster in the period ahead.
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