Mrs Bectors

Mrs Bectors Food Specialities reported a robust 14.8% year-on-year increase in revenue for Q3 FY25, reaching INR 492 crores. This growth was fueled by strong performances in both its Biscuits and Bakery segments, which grew by 15% to INR 308 crores and 20% to INR 175 crores, respectively. For the nine months of FY25, consolidated revenues stood at INR 1,427.8 crores, marking a 17.3% growth over the previous year. Despite the strong top-line growth, EBITDA for Q3 FY25 increased by only 0.4% to INR 61.4 crores, resulting in a margin of 12.5%, primarily due to elevated input costs and higher logistics expenses.

The company faced significant input cost escalation for key commodities such as palm oil, maida, and cocoa, which remained elevated during the quarter. To mitigate this, Mrs Bectors implemented a mix of cost-saving measures and strategic pricing actions, including overall price increases of 4-5% and 3-4% for bread. Management expects the full impact of these measures to flow through by the end of Q4 FY25, with a target to fully absorb and offset the cost impact by Q1 FY26. The company aims to restore its overall EBITDA margins to the 14-15% range by Q1 FY26, supported by an anticipated 0.5% margin improvement from cost efficiency programs over the next 12 months.

The Biscuits segment demonstrated a 15% YoY revenue growth in Q3 FY25, with domestic volumes showing a recovery after a period of hyper-competition that began in November 2023. Export growth, while still strong, is moderating to mid-teens from previously aggressive rates due to a high base. The Bakery segment grew 20% YoY, driven by strong performance in the B2B frozen portfolio and quick commerce, where the English Oven brand holds a leading position, contributing over 23-24% of the segment's revenue. The company maintains strong market shares, including being the #2 player in NCR Bakery (closer to 20%) and a market leader in the QSR segment.

Mrs Bectors is actively pursuing its capital expenditure plans, utilizing QIP proceeds for debt repayment, subsidiary investments, and financing the Dhar project. The commissioning of the new Biscuits facility at Dhar, Madhya Pradesh, is now scheduled for April 2025, a slight delay from Q4 FY25. The state-of-the-art Khopoli facility is expected to be operational by Q2 FY26, pushed from Q1 FY26 due to the large scale and imported machinery. Additionally, the Kolkata plant is set to commence operations in Q1 FY26, which will enhance the company's ability to serve diverse regions across the country.

The company is aggressively expanding its distribution network, particularly focusing on the South and North India regions from January to September. In North India, the number of routes has increased by 7-8%, and build outlets for English Oven Bakery have grown by over 11% in the last year. Mrs Bectors has seen over 22% growth in its Cremica preferred outlets, with premiumization contributing 40% of sales, up from 37% last year. The company also maintains tight control over Net Operating Days (NOD) in stock, keeping it at 27-28 days.

Mrs Bectors continues to strengthen its product portfolio through product and packaging renovations, particularly in its crackers and cream range. New introductions include bite-sized non-stop mini crackers (baked, not fried, nitrogen-filled) and Gourmet Burger Buns under English Oven, aiming to offer cafe-like experiences at home. The company is pursuing a sub-brand strategy to establish these offerings as drivers of sustainable growth, focusing on health-oriented and snacking categories to cater to evolving consumer trends.

The export portfolio exhibited strong growth, and the company continues to be a trusted partner to larger international chains. Mrs Bectors has established an office in the Middle East and has personnel in Ghana to build brand presence in West Africa. Strategic partnerships with global retailers like Walmart and Lulu are ongoing, with continuous efforts to add new SKUs and build volumes. The company aims to position its brand globally by studying local competition and offering differentiated products.