Mrs Bectors Food Q1 growth strengthens on bakery, exports and margin expansion

Investment View and Valuation

BP Equities retained its positive view on Mrs Bectors Food Specialities Ltd. following the company’s Q1FY27 results, citing strong execution, domestic and export demand, premiumisation, distribution expansion and capacity-led geographical growth.

The broker values the company at 45 times FY27E EPS and revised its target price to Rs 270, implying an increase of 16 per cent. The stock was trading at 38.9 times FY27E EPS and 33.7 times FY28E EPS.

Q1FY27 Financial Performance

Consolidated revenue from operations rose 16.0 per cent year-on-year and 12.9 per cent quarter-on-quarter to Rs 549 crores. Gross profit increased 20.0 per cent year-on-year to Rs 259 crores, while gross margin expanded 160 basis points year-on-year to 47.2 per cent, supported by product mix and cost discipline.

Segment Performance and Demand Trends

Segment performance remained broad-based. Biscuits revenue increased 16.0 per cent year-on-year to Rs 325 crores, aided by investments behind Coconut, Bourbon and Digestive, along with premium cookies, shortbread and other value-added products.

Bakery revenue grew 17.5 per cent year-on-year to Rs 215 crores, supported by double-digit growth in English Oven retail and a recovery in the QSR and institutional B2B businesses. Quick-commerce revenue grew 58 per cent year-on-year.

NaturBaked, the company’s clean-label, health-focused bakery brand, reached an approximately Rs 1 crore monthly revenue run-rate. Export growth was in the high double digits and volume-led, helped by new SKUs, customer demand and the ramp-up of the Kolkata and Khopoli facilities.

Management said the US market had returned to growth, with Walmart adding SKUs. Customers have continued to engage in product development despite earlier tariff uncertainty.

Growth Outlook and Capacity Expansion

Management reiterated its mid-teens FY27 revenue-growth guidance, comprising low-teens growth in biscuits and bakery and mid-teens export growth. The company is targeting revenue of Rs 4,000 crores by FY30, after crossing Rs 2,000 crores in FY26.

The newly commissioned Kolkata and Khopoli facilities, excluding the planned Bangalore capacity, are expected to support revenue potential of Rs 3,400-3,500 crores. Khopoli, commissioned in March 2026, is expected to enable very high double-digit growth in West India as distribution expands across Maharashtra.

The company plans to add around 40,000 productive biscuit outlets in FY27, representing a 12-13 per cent increase. FY27 capital expenditure is expected at around Rs 200 crores, funded approximately 60 per cent through internal accruals and 40 per cent through borrowings. Bangalore capacity remains under finalisation.

Margin Outlook and Key Monitorables

Margins remain an important monitorable. Management reiterated its target of a 14 per cent EBITDA margin by Q4FY27 and 15-16 per cent by FY30. Project IMPACT is expected to provide 40-50 basis points of FY27 savings, supplemented by cumulative price increases of 2.0-2.5 per cent, operating leverage and premiumisation.

Commodity, fuel, packaging, freight and minimum-wage inflation remain risks. Management expects limited sequential margin improvement in Q2 as a larger share of inflation flows through, with fuller price and cost recovery expected in Q3.

Near-term factors to track include price pass-through, the Khopoli ramp-up, export volumes and progress on Bangalore capex.

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