Sundrop Brands Ltd (NSE:SUNDROP)

Q1 2027 Sundrop Brands Ltd Earnings Call Transcript

Aug 7, 2026 / 06:30 AM GMT

Release Date Price: ₹681.8 (+2.56%)

Transcript

Key Points

Positve

Sundrop Brands Ltd (BOM:500215) reported a strong 15% consolidated revenue growth in Q1 FY27, with sequential growth of 11% and accelerated growth across both its Sundrop (16%) and Del Monte (14%) businesses.
The company's e-commerce channel grew 32%, significantly ahead of industry rates, driven by strong performance in quick commerce and hybrid platforms, indicating successful market share gains.
Despite an inflationary environment, Sundrop Brands Ltd (BOM:500215) improved gross margins by 110 basis points and sustained a healthy 7% EBITDA margin, showcasing effective cost management and pricing power.
The core portfolio, contributing to 60% of the business, is growing at 14-15% in value and 9-10% in volume, with the popcorn business maintaining an 18% growth rate and the culinary business accelerating to 15%.
The company's capital-efficient growth strategy is yielding results, with the ready-to-eat popcorn business growing at 39% and becoming margin-accretive, while the Italian business has returned to value growth of 8% alongside 15% volume growth.
Management outlined a clear path to expand EBITDA margins from 7% to 12% over three years, driven by 200 basis points from operational synergies, scale benefits, and premiumization, with a target of 300 basis points annual improvement.
Innovation is central to the growth thesis, with nearly 100 products launched in the last 24 months contributing 6% of Q1 sales, and the company is actively investing in high-growth segments like sweet popcorn and value-added peanut butter to drive future growth.

Negative

The peanut butter business remains a drag, with value and volume declining 3% in Q1, although this is an improvement from the 8-10% decline last year, due to intense competition and a late entry into value-added segments like chocolate and high-protein variants.
The company faces a highly inflationary environment, particularly in commodities and packaging materials, which has necessitated price increases and could pressure consumer demand in price-sensitive categories like edible oils.
A&P spends, while optimized, are still 5% lower on a like-to-like basis versus Q1 last year, and the company has had to cut investments in non-core areas like fruit juices, indicating a selective and potentially slower growth in those segments.
The edible oil business, while growing at 16% in value, is largely driven by 9% price inflation, with volume growth of only 7%, and management's stated goal is to merely protect volumes, highlighting limited pricing power in this commoditized category.
The integration of Sundrop and Del Monte operations is still in progress, with the consolidation of sales teams and ERP systems expected to take up to 12 months, and the realization of 200 basis points in synergy benefits is projected over a longer 18-month period.
The company's growth is heavily reliant on continued investment in marketing and innovation, and any slowdown in these investments or failure to gain traction in new categories like value-added peanut butter could hinder the achievement of mid-to-high teens growth targets.
The Italian business is still recovering from a commodity deflation cycle, with value growth (8%) lagging volume growth (15%), and the company expects price stabilization only from Q2 onwards, indicating a slower recovery in realizations.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

SNDO.NS - Sundrop Brands Ltd
Q1 2027 Sundrop Brands Ltd Earnings Call
Aug 07, 2026 / 06:30AM GMT

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Presentation
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Unidentified_1 [1]
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Ladies and Gentlemen, Good day and welcome to Sundrop Brands Limited Q1 FY27 Earnings Conference Call hosted by Anand Rati Shares & Stock Brokers Limited.

As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.

Should you need assistance during the conference call, please signal an operator by pressing then 0 on a touch tone phone.

Please note that this conference is being recorded.

I now hand the conference over to Mr. Ajay Thakur from Anandrati Shares and Stock Brokers Limited.

Thank you and over to you, sir.

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