· National Foods Limited held its analyst briefing session today to discuss it FY21 results. To recall, the company posted consolidated NPAT of PkR1.97bn (Bonus adjusted EPS: PkR8.47) in contrast to NPAT of PkR1.65bn (Bonus Adjusted EPS: PkR7.02), up 19.64%YoY.

· The topline of NATF has grown by 20%YoY after being listed on global e-commerce platforms such as Amazon and Walmart resulting in a boost in international sales (30% contribution from exports in FY21 vs 6% in FY20).

· Within domestic sales, ~60-70% of the revenue comes from central and northern regions whereas the volumetric growth in rural areas now exceeds the growth in urban areas owing to increasing women labor force. Hence, the company is setting up a new factory in Faisalabad to cater the growing demand in these regions as well as in north.

Going forward, NATF plans to make further expansions and automate its existing processes to increase the efficiencies.

· The unbranded spices market still remains the largest segment in country however, with rising e commerce platforms, regulated retail stores and growing consumer awareness, consumers are now shifting to branded products, putting the company in a sweet spot.

· Homemade spices are still preferred by conventional households, especially in rural areas. However, the growth in rural sales now exceeds the growth in urban sales which shows that even in rural areas, consumers now prefer convenience as more females have started joining the workforce.

· The company takes pride in its research and development life cycle where it identifies the changing preferences of its consumers in order to introduce new products and discard the ones which are no more in demand. According to the management, even the consumers are not aware of their needs. Hence, the company itself tries to create new needs for their consumers

Courtesy – AKD Research