Mrs Bectors Food - Strong quarter; Baking Multi-Year Growth | Q1FY26 Company Update

Mrs Bectors reported a better-than-expected Q1FY27 performance, with healthy growth across both biscuits and bakery. The biscuit business delivered strong growth, supported by a recovery in exports, while the bakery business continued to benefit from improving QSR/B2B demand. Going ahead, distribution expansion, increased brand investments and premiumisation are expected to drive domestic growth, with the company targeting 40,000 incremental billed outlets. The export business is witnessing a strong recovery, with exports now contributing ~35% of revenue, supported by the US market recovery and continued product innovation. Capacity expansion is progressing well, with the Kolkata facility strengthening the company’s presence in East India and the Khapoli plant ramping up in the West. With new facilities gradually scaling up and geographic expansion across key markets, Mrs Bectors remains well positioned to benefit from operating leverage, improving asset utilisation and margin recovery. Management reiterated its 14% EBITDA margin target by Q4FY27E. We maintain our BUY rating with a TP of Rs 320.

Mrs Bectors Ltd. Stock Price Chart

Strong performance across business:

Mrs. Bectors reported 16% YoY revenue growth to Rs5,487mn in Q1FY27, ahead of our estimate of Rs5,248mn. The biscuits segment (~60.4% of FY26 sales) grew 15.7% YoY, with domestic sales growing in the high-single digits and exports delivering high-double-digit growth. The domestic business witnessed a recovery, while the export business returned to strong growth after several subdued quarters, with US customers remaining optimistic about sourcing from India. The bakery segment (~39.6% of FY26 sales) delivered strong 17.5% YoY growth, supported by a recovery in QSR demand and continued momentum in the B2B business.

Margins to improve:

The company reported gross margin of 47.2%, expanding by 160bps YoY (MNCL Est 45.6%), driven by improved product mix and inventory-related benefits.  However, the margin expansion was partially offset by a 130bps YoY increase in other expenses, resulting in an EBITDA margin expansion of 83bps YoY to 13.1% (MNCL Est 12.6%). Consequently, EBITDA grew 23.8% YoY to Rs721mn (MNCL Est. Rs 661mn), while PAT increased 25.5% YoY to Rs 388mn (MNCL Est. Rs334mn). Management reiterated near-term EBITDA margin guidance of 14%, expecting sequential improvement driven by stronger domestic biscuit momentum supported by export stabilizing, stable RMAT prices, increasing traction in premium SKUs, and continued benefits from cost-efficiency initiatives.

View:

We believe the company is building a strong multi-year growth runway, supported by healthy demand, improving B2B/QSR trends, strong export momentum and continued investments in distribution and brands. Pan-India expansion through Kolkata and Khapoli, along with increasing focus on Mumbai and southern markets, should support deeper geographic penetration. Exports are emerging as an important structural growth driver, with the US market returning to a growth trajectory and export contribution reaching ~35% of revenue. On the domestic front, 40,000 incremental billed outlets, premiumisation and increased brand investments should support market-share gains. With existing capacity sufficient to support Rs34–35bn  of revenue, the company has adequate headroom to sustain growth. Overall, we expect sustained double-digit growth and margin improvement through FY27–29E, supported by operating leverage, cost efficiencies and an improving business mix.

Valuation & Key risks:

We are factoring in Revenue/EBITDA/PAT CAGR of 14.9%/21.2%/26.9% over FY26–29E, respectively, supported by strong growth in the bakery segment and recovery in the biscuit business, particularly exports. Given the strong margin outlook, we upgrade our earnings estimates by 1.9%/0.6% for FY27E/FY28E, respectively. We maintain our BUY rating and value the stock at 40x Q1FY29E EPS of ~Rs8, arriving at a revised target price of Rs320 (earlier Rs 265). With capacity expansion progressing well and new facilities ramping up, the company remains well positioned to benefit from improving growth visibility, operating leverage and margin recovery over the medium term. Key risks include intensifying domestic competition, higher commodity prices and a slowdown in export markets.

Company website: https://www.bectorfoods.com/

*CMP is as per report published date

Click to download the full Mrs Bectors Food Company Update

Analyst:

• Rahul Dani - Research Analyst, Institutional Equities (NISM-201500034725)
• Aachal Pal- Research Associate, Institutional Equities (NISM-202300215737)

Mrs Bectors - Frequently Asked Questions (FAQ)

Here are quick answers to common investor questions on the Mrs Bectors investment opportunity, including levels, outlook and risk factors.

How did Mrs Bectors Food perform in Q1FY27?

Revenue increased 16% YoY to ₹5,487 million, while EBITDA rose 23.8% YoY to ₹721 million. PAT increased 25.5% YoY to ₹388 million.

What drove Mrs Bectors Food's Q1FY27 growth?

Growth was supported by biscuits and bakery products, with improving domestic demand, stronger exports, QSR recovery and B2B momentum contributing to performance.

What is the outlook for Mrs Bectors Food?

The outlook is supported by distribution expansion, premiumisation, export recovery, capacity ramp-up and potential operating leverage. Management has reiterated its 14% EBITDA margin target for Q4FY27E.

What is the analyst target price for Mrs Bectors Food?

The stated analyst target price is ₹320, compared with a CMP of ₹225. The research view is BUY. This target represents an analyst estimate and is not a guaranteed future price.

What are the key risks for Mrs Bectors Food?

Key risks include intensifying domestic competition, higher commodity costs and weaker export-market conditions, which could affect growth and margins.

What are the key growth drivers for Mrs Bectors Food?

Key potential drivers include 40,000 incremental billed outlets, premiumisation, brand investments, export growth and the ramp-up of Kolkata and Khapoli facilities.

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