Mrs Bectors Foods export recovery and bakery strength drive earnings growth

Investment View and Key Drivers

Motilal Oswal Financial Services reiterated its Buy rating on Mrs. Bectors Food Specialities Limited following a strong start to FY27. The broker identifies domestic bakery growth, premiumisation and health-focused innovation, and export recovery following tariff reduction as the principal drivers of a projected 14% revenue CAGR over FY26–28.

• Distribution expansion, particularly in lower North India, and export growth remain key monitorables.
• The quick-service restaurant (QSR) business has begun to see an uptick.
• Management retained its FY27 guidance for mid-teens revenue growth.
• The broker’s target price is Rs 260, based on DCF valuation, implying a FY28 P/E of 35x.

Strong Start to FY27

Mrs. Bectors Foods reported consolidated 1QFY27 revenue of Rs 5,487m, up 16.0% year on year and 4% above MOFSL’s estimate. Bakery revenue grew 17.5% year on year, led by B2C growth in the high teens and QSR growth in the high single digits.

Biscuit revenue increased 15.7% year on year, supported by double-digit export growth, while domestic biscuits grew in the high single digits. Domestic retail and institutional demand remained healthy, and exports recovered meaningfully on new product launches and improved customer traction.

Margin Expansion and Profit Growth

Gross margin expanded by 155 basis points year on year to 47.2% in 1QFY27, aided by product mix. EBITDA rose 23.8% year on year to Rs 721m, 7% above MOFSL’s estimate, while EBITDA margin improved by 80 basis points to 13.1%.

Higher other expenses, which increased 24.5% year on year, and employee costs, which rose 11.4%, did not prevent margin expansion. Reported PAT increased 25.7% year on year to Rs 388m, 1% ahead of the estimate, aided by lower interest costs.

Management indicated that around 2% raw-material inflation would be addressed through calibrated price increases and Project Impact initiatives. It continues to target an EBITDA margin of around 14% by 4QFY27.

Growth Initiatives and Management Outlook

Management is investing in premiumisation, innovation, distribution expansion and brand building. Capacity additions at Kolkata and Khopoli are progressing and are expected to support geographic expansion. Management expects export momentum and institutional demand to remain healthy in the coming quarters.

The company also appointed Mr Anshul Rastogi as Chief Financial Officer, effective August 7, 2026.

Earnings Estimate Revisions

MOFSL raised its FY27E and FY28E revenue, EBITDA and PAT estimates as follows:

The broker forecasts FY26–28 revenue, EBITDA and PAT CAGRs of 14%, 22% and 27%, respectively.

Key Risks

• Supply-chain disruptions could affect production and distribution.
• Plant consolidation could create execution risks.