Mrs. Bectors Food Specialities Limited
Q1 FY26
Call date · August 14, 2025
1 · Management Commentary
Key Positives
- Revenue from operations grew 7.6% YoY to INR 473 crores.
- EBITDA margin stood at 12.3%; PAT at INR 30.9 crores (PAT margin 6.5%).
- Bakery segment delivered its highest-ever quarterly performance: INR 183 crores, up 19% YoY.
- English Oven brand continues to drive momentum and market share, especially in quick commerce and premium categories.
- Stabilization of raw material prices (cocoa, palm oil, maida) expected to support margins and demand.
- Digitization initiatives rolled out across 50% of plants; distributor management system adopted by 60% of distributors.
Key Negatives
- Biscuit segment growth muted at 3% YoY, mainly due to export headwinds.
- Export business, especially to the US (20% of exports; 5-6% of overall revenue), impacted by tariff uncertainty and order phasing.
- Margin compression due to business mix (lower exports) and elevated input costs.
- B2B/QSR bakery business remains on a low growth trajectory compared to B2C.
Forward Guidance
- Capex: New biscuit facility in Dhar commenced operations in May; full-scale production targeted for Q2. Kolkata bakery plant to be commissioned in Q3; Maharashtra facility by year-end.
- New products: Launch of NatureBake (clean label, health-first breads), shortbreads (25% butter, no palm oil), Teddy’s animal-shaped crackers, Choco Lava Cake, Muffins, Brownies, and coconut cookies with ‘Zero Maida’. Pipeline of further ‘Health-First Products’ to be launched in coming quarters.
- Revenue/margin outlook: Targeting double-digit growth in domestic biscuits over next two quarters; aiming to restore EBITDA margin to ~14% from Q2 onwards.
- Strategic initiatives: Board approved stock split (1:5); continued investment in brand building and technology; focus on premiumization and expanding distribution, especially in new geographies and quick commerce.
2 · Q&A Highlights
Q 1 (Domestic Biscuits Growth & Outlook): What is the expected growth trajectory for domestic biscuits, given stabilized pricing and input costs?
A (Management):
• Domestic biscuits saw high single-digit YoY growth in Q1; targeting double-digit growth over next two quarters, aided by festive season and improved demand.
• All price actions now factored in; expect sequential improvement.
Q 2 (Export Business & US Impact): What is the impact of US tariff uncertainty on exports, and how significant is the US market?
A (Management):
• US accounts for ~20% of exports (5-6% of total revenue); business impacted by order delays and tariff changes (25% to 50%).
• Engaging with customers; hopeful for resolution by end of August; other export geographies remain stable.
Q 3 (Bakery Segment Drivers & Strategy): What drove the 19% bakery growth, and what is the strategy for further expansion?
A (Management):
• Growth led by distribution expansion, quick commerce leadership, and health-focused product innovation (no maida, no palm oil, NatureBake launch).
• Premiumization and re-engineering of existing products key; new plants in Kolkata and Maharashtra to drive further growth.
Q 4 (Channel Mix & Distribution): What is the contribution of e-commerce/modern trade, and how is distribution evolving?
A (Management):
• Bakery: Modern trade and e-commerce/quick commerce contribute ~30% of revenue; expected to rise as these channels expand.
• Biscuits: General trade >70%, modern trade/e-comm 9-10%; focus on premium outlets and quick commerce (targeting 4-5% of domestic biscuit revenue in 4-6 quarters).
Q 5 (Margins & Cost Management): What are the margin drivers and outlook, considering new plant ramp-ups and input costs?
A (Management):
• Margin improvement expected from Q2, targeting ~14% EBITDA margin.
• Drivers: gross margin recovery, scale benefits, cost efficiencies (Project Impact), and business mix normalization.
• Some stabilization costs from new plants expected in FY26; better leverage anticipated in FY27.
Q 6 (Product Pipeline & Brand Strategy): Are there new launches or brand extensions planned?
A (Management):
• Recent launches: NatureBake, shortbread, animal crackers, coconut cookies (zero maida), indulgence desserts.
• More differentiated products planned for Q2/Q3, leveraging new Dhar plant capabilities.
• Ongoing research on Cremica brand integration; decision on bread segment use in 4-5 months.
Q 7 (Competitive Intensity & Marketing): How is the company addressing high competition and marketing investments?
A (Management):
• Competition remains intense, especially from regional players.
• Focus on distribution, execution, e-commerce, and differentiated products.
• Increased ATL/BTL spends; digital and outdoor campaigns; rollout of Botree DMS for distributor efficiency.
3 · Other Key Numbers
- Biscuits segment revenue: INR 281 crores in Q1 FY26 (up from INR 273 crores in Q1 FY25; 26% growth over Q1 FY24).
- Bakery segment revenue: INR 183 crores in Q1 FY26 (up from INR 154 crores in Q1 FY25; 35% growth over Q1 FY24).
- Consolidated revenue: INR 473 crores (Q1 FY26) vs INR 439.4 crores (Q1 FY25).
- EBITDA: INR 58.2 crores; EBITDA margin: 12.3%.
- PAT: INR 30.9 crores; PAT margin: 6.5%.
- Direct reach: over 5 lakh outlets; available in over 7 lakh outlets (AC Nielsen).
- Modern trade/e-commerce/quick commerce: ~30% of bakery revenue.
- Quick commerce contribution in biscuits: targeted to rise from 1% to 4-5% of domestic revenue in 4-6 quarters.
- Bakery growth: 65% volume-led, rest value-led.
- US market: ~20% of export biscuits, 5-6% of total revenue.
- General trade: >70% of domestic biscuit sales; modern trade/e-comm: 9-10%.
- No separate disclosure of B2C/B2B bakery split; English Oven (B2C) growing faster than QSR/B2B.
- No separate disclosure of domestic vs export margins; export margins above company average, domestic below.
- Stock split: 1 equity share of Rs. 10 to be split into 5 shares of Rs. 2 each (subject to approvals).