Mrs Bectors — Q3 FY25 earnings call

Call held 6 Feb 2025

Management summary

Mrs Bectors Food Specialities reported a robust 14.8% YoY revenue growth in Q3 FY25, reaching INR 492 crores, driven by strong performance in both Biscuits and Bakery segments. However, EBITDA growth was muted at 0.4% YoY due to elevated input costs and higher logistics expenses, leading to margin compression. The company is implementing cost-saving and strategic pricing measures, expecting full impact by Q1 FY26, and has declared an interim dividend of INR 3 per share.

Highlights

  • Q3 FY25 Revenue grew 14.8% year-on-year to INR 492 crores, demonstrating continued growth momentum.

  • Both Biscuits and Bakery segments exhibited strong growth, with Biscuits up 15% YoY to INR 308 crores and Bakery up 20% YoY to INR 175 crores.

  • 9M FY25 consolidated revenues increased by 17.3% to INR 1,427.8 crores.

  • The company declared an interim dividend of INR 3 per equity share, reflecting confidence in financial performance.

  • Domestic biscuits volume growth recovery was observed in Q3 FY25, and the B2B frozen portfolio continued to scale up well.

Concerns

  • Q3 FY25 EBITDA growth was only 0.4% YoY, resulting in a margin of 12.5%, indicating pressure from input costs and other expenses.

  • Input costs for key commodities like palm oil, maida, and cocoa saw significant escalation and remained elevated.

  • Higher logistics costs, partly due to the Red Sea impact, contributed to increased 'other expenses' for exports.

  • Minor delays were noted in the commissioning timelines for new facilities at Dhar (April 2025 vs Q4 FY25), Khopoli (Q2 FY26 vs Q1 FY26), and Kolkata (Q1 FY26 vs Q1 FY26).

Key financials

2 periods

Headline

  • Revenue
    ₹492 Cr
    YoY +14.8%
  • EBITDA
    ₹61.4 Cr
    YoY +0.4%
  • EBITDA Margin
    12.5%
  • PAT
    ₹34.6 Cr
  • PAT Margin
    7%

9M

  • FY25 Revenue
    ₹1,427.8 Cr
    YoY +17.3%
  • FY25 EBITDA
    ₹195.9 Cr
    YoY +6.6%
  • FY25 EBITDA Margin
    13.7%
  • FY25 PAT
    ₹109 Cr
    YoY +2.1%
  • FY25 PAT Margin
    7.6%

What they filed

Q1 FY27: revenue up 16.1%, net profit up 25.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue496 492 446 473 551 +11%533 +8%486 +9%549 +16%
EBITDA70 61 56 58 69 −1%68 +11%62 +11%72 +24%
Net profit39 35 34 31 37 −5%38 +9%35 +3%39 +26%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹483 Cr Total
  • Biscuits ₹308 Cr 63.8%
  • Bakery ₹175 Cr 36.2%

Capital allocation

high confidence
  • Capex Capex disclosed
    • New Biscuits facility at Dhar, Madhya Pradesh
    • State-of-art facility in Khopoli
    • Kolkata plant operations
    • Repayment of borrowings from QIP proceeds
    • Investment in subsidiaries from QIP proceeds
    • Financing project cost for Dhar plant from QIP proceeds
    Pursuant to the provisions of Regulation 30 read with Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith transcript of the earnings conference call of the Company held on 06th February, 2025 to discuss Q3 & FY25 results. The commissioning of our new Biscuits facility at Dhar, Madhya Pradesh is scheduled for April 2025 while our state-of-art facility in Khopoli is expected to be operational by the 2nd Quarter of the next financial year. Additionally, our Kolkata plant is set to commence operations in the 1st Quarter of the financial year 2025-26. With respect to the funds raised through the QIP, a portion of proceeds has been utilized for the repayment of borrowings, investment in subsidiaries, and financing the project cost for our upcoming plant in Dhar, Madhya Pradesh. The unutilized funds have been temporarily placed in bank deposits.
  • Dividend ₹3/share (interim)
    I am pleased to share that we have declared an interim dividend of INR 3 per equity share.
  • M&A Walmart Joint venture · Integrated

    Building relation with global retailers and adding newer SKUs and everyday category products.

    So, we are already supplying to Walmart and Lulu both. We have been a partner with Walmart for the past 2 years, and we are continuing to build our relation with the Walmart team in a very strong manner. And we'll continue to hopefully add newer and newer SKUs and get into the everyday category with them as well within this year.
  • M&A Lulu Joint venture · Integrated

    Continuing as a promising partner, adding new categories and building volumes.

    And Lulu, we have been working with them since I would say the past 5 years or so. And we are still a very promising partner for them. And we are continuing to add new categories and build our volumes with them.
  • Liquidity Liquidity disclosed Unutilized QIP funds temporarily placed in bank deposits.
    The unutilized funds have been temporarily placed in bank deposits.

Guidance & targets

Profitability

  • Cost Efficiency Program Impact on Margins Profitability · next 12 months · Medium confidence 0.5%
    In terms of saying that what would be the impact of these cost efficiency programs in terms of on the margin side, I would say that over the next 12 months, our target should be kind of have an impact of close to half a percent on an annualized basis on our margins through this cost efficiency program.

    — Manu Talwar

  • Overall Margin Recovery Profitability · Q1 FY26 · High confidence 14-15%
    In terms of overall margins, yes, we expect by quarter one, we should be back in the range of 14%, 15%, which has been our guidance and which has been what we haven't delivered.

    — Manu Talwar

Pricing

  • Overall Price Increase (mix of price increase and de-grammage) Pricing · current · High confidence 4-5%
    So, in terms of, Harit in terms of price increase, which we are kind of taking, would anything range between approximately as of now what looks like is go to 4% to 5% kind of price increase as of now, because it's a mix of price increase, it's a mix of de-grammage and some part of the cost element.

    — Manu Talwar

  • Bread Price Increase Pricing · current · High confidence 3-4%
    Bread, yes. Bread, if I remember right, is around 3% to 4% kind of price increase. We have taken and the price increase is 3 to 4, I am saying, is more primarily on the North India side and it is much lesser on the West and the South side.

    — Manu Talwar

Revenue Growth

  • Annualized Revenue Growth Revenue Growth · annualized · High confidence mid-teens
    And our guidance has always been, we will maintain on an annualized basis, a growth of around mid-teen.

    — Manu Talwar

Capacity

  • Dhar Biscuits Facility Commissioning Capacity · April 2025 · High confidence April 2025

    Previously Q4 FY25 → April 2025

    The commissioning of our new Biscuits facility at Dhar, Madhya Pradesh is scheduled for April 2025

    — Manu Talwar

  • Khopoli Facility Operational Capacity · Q2 FY26 · High confidence Q2 FY26

    Previously Q1 FY26 → Q2 FY26

    our state-of-art facility in Khopoli is expected to be operational by the 2nd Quarter of the next financial year.

    — Manu Talwar

  • Kolkata Plant Operations Capacity · Q1 FY26 · High confidence Q1 FY26
    Additionally, our Kolkata plant is set to commence operations in the 1st Quarter of the financial year 2025-26.

    — Manu Talwar

Distribution

  • Cremica Preferred Outlet Growth Distribution · current · High confidence >22%
    we have kind of grown over 22% of growth in the Cremica preferred outlet.

    — Manu Talwar

Premiumization

  • Overall Premiumization Share Premiumization · current · High confidence 40%

    From 37% today

    our overall premiumization, which has improved very sharply over two years, from some 26%-27% and we were at Quarter 3 last year at 37% and now we sit over 40%.

    — Manu Talwar

Market Share

  • Bakery Market Share (NCR) Market Share · current · High confidence closer to 20%
    in our retail audits, we have been concerned in the NCR region, which is Delhi region, NCR region, we have improved our market share year after year, and we're getting closer to 20% market share and a strong #2 player in this area.

    — Manu Talwar

  • Bakery Quick Commerce Revenue Contribution Market Share · current · High confidence 23-24%
    today, quick commerce on a Bakery side is contributing over 23%-24% of our revenue

    — Manu Talwar

  • Biscuits Market Share (North India) Market Share · current · High confidence 4.5%
    On the Biscuits side, our market share in North India is about 4.5%

    — Manu Talwar

  • Biscuits Market Share (Upper North/Punjab) Market Share · current · High confidence 14.5%
    and in upper part of the North, especially Punjab, we are touching around 14.5%.

    — Manu Talwar

What to watch in Q4 FY25

Overall Margin Recovery

Q1 FY26
Current 12.5% (Q3 FY25 EBITDA Margin)
Target 14-15% (EBITDA Margin)

Why it matters

To verify the effectiveness of cost-saving and pricing measures in restoring profitability.

In terms of overall margins, yes, we expect by quarter one, we should be back in the range of 14%, 15%, which has been our guidance and which has been what we haven't delivered.

Risks & concerns

  • Input Cost Inflation

    high

    Prices of key commodities such as palm oil, maida, and cocoa saw significant escalation and remained elevated.

    Management acknowledged

  • Higher Logistics Costs (Red Sea Impact)

    medium

    Red Sea impact led to higher freight and forwarding costs, particularly for exports, ongoing for 9-10 months.

    Management acknowledged

  • Muted Urban Demand

    medium

    Urban demand continued to remain largely muted, though expected to be boosted by Union Budget proposals.

    Management acknowledged

  • Domestic Biscuit Hyper-competition

    medium

    Hyper-competition starting November 2023 led to dipping of pricing and extra grammage offerings in the domestic biscuit market.

    Management acknowledged

  • Capex Project Delays

    low

    Minor delays in commissioning of Dhar (April 2025), Khopoli (Q2 FY26), and Kolkata (Q1 FY26) plants due to project scale and imported machines.

    Management acknowledged

Q&A highlights

8 direct
Other Expenses and Advertising Spend Direct
So, this other expenses which have gone up is largely on account of our exports, where the logistic costs are higher. So, primarily is on account of freight and forwarding, and that too on account of logistic costs. That's why this cost is higher. This cost increases a little higher, but what got mitigated by lesser expenses on power and fuel and some bit of lesser expenses. Our marketing expenses for B2C business are around 3%.

Clarifies the drivers behind the increase in 'other expenses' and quantifies marketing spend as a percentage of revenue.

Asked by Disha Giria

Gross Margin Expansion and Raw Material Inflation Mitigation Direct
What we have done is that we worked on both cost side to bring in more efficiency and also on the price side, either through the actual price increase and de-grammage. Just to brief you on the Bakery side, we have more or less taken the price increase to mitigate the cost increase... And on the Biscuits side, we started the action in the previous quarter on the correction of the prices. And this action will spill over into the Quarter 4 of the financial year. And we will be in terms of realizing and covering a cost, which should be done by March of 2025.

Outlines the strategies employed to counter raw material inflation and provides a timeline for expected margin recovery.

Asked by Disha Giria

Capex Project Delays Direct
Dhar plant coming up in Q4. So, it is still, it can come anytime between 15th March to 15th April... In case of our Kolkata project, again, Kolkata project was also scheduled around March-April of the financial year, which is likely to come up by first fortnight of May. So, that's kind of another minor kind of delay there. In case of Khopoli Bakery, definitely we were looking at around quarter one, around quarter one end of 25-26, which we now see as a quarter two of 25-26.

Provides updated commissioning timelines for key capacity expansion projects, indicating minor delays for Dhar, Kolkata, and Khopoli.

Asked by Rishi Mody

Quantum of Price Hikes in Biscuits and Bread Direct
So, in terms of, Harit in terms of price increase, which we are kind of taking, would anything range between approximately as of now what looks like is go to 4% to 5% kind of price increase as of now, because it's a mix of price increase, it's a mix of de-grammage and some part of the cost element. ... Bread, yes. Bread, if I remember right, is around 3% to 4% kind of price increase.

Quantifies the price increases implemented across biscuits and bread categories to offset cost pressures.

Asked by Harit Kapoor

Domestic vs. Export Growth in Biscuits Direct
export which has been kind of growing very, very aggressively over the last 2-2.5 years, obviously we can't expect a similar growth to come in export because they're sitting on a very, very high base. And so that kind of growth we expect to kind of mellow down but continue to grow well in mid-teens. But on a domestic side, which has been kind of on a flat-paced low growth side over the last four quarters, starting on Quarter 3 of the last financial year, the last quarter we started seeing movement up and we expect the same trend in this quarter.

Explains the differing growth trajectories and drivers for the domestic and export components of the biscuit business.

Asked by Harit Kapoor

New Product Launches (Non-stop Mini Crackers) and Distribution Efficiency Direct
So, now, as a part of the strategy, we're very clear that that entire cracker strategy, which is very adjacent to the entire namkeens and all that, and it is what consumers would like to consume, we need to kind of strengthen that. And so this product is definitely in line of that to kind of strengthen the entire cracker category and build it. ... our distribution costs are throughput per salesman, right? They'll keep increasing and the cost as a percentage to revenue will keep reducing.

Details the strategic rationale behind new product introductions and explains how they are expected to improve distribution efficiency rather than increase costs.

Asked by Amit Purohit

Margin Movement in B2B vs. B2C Segments Direct
Normally in the B2B businesses, we have a hedging policy where we get predictability to our buyers. So, unless and until there is completely a distressing situation, things remain in whatever the annual business plan is. ... So, then we are saying is B2C business would have suffered higher margin loss as compared to the overall margin reduction that we have seen. Will that understanding be correct? That understanding will be perfectly correct.

Clarifies that B2B margins are more stable due to hedging, while B2C margins, particularly in biscuits, faced greater pressure and were the primary driver of overall margin reduction.

Asked by Rajit Aggarwal

Sequential Decline in Turnover and Seasonality Direct
2nd Quarter for us, as both on the domestic side, and also international side is a peak quarter, right? It is a peak quarter because the international side is all about readiness of the, getting ready for the Christmas. ... So, yes, the consumer slowdown and the slowdown in a consumer trend is certainly a concern. And we do expect, and obviously the actions taken by the honorable Finance Minister and the government should come handy in terms of reviving these consumer trends over the next 2 quarters time.

Explains the seasonality of the business, with Q2 being a peak quarter, and acknowledges the consumer slowdown while expressing optimism for recovery due to government initiatives.

Asked by Rajit Aggarwal

3 min read 7 chapters

Detailed narrative

Q3 FY25 Financial Performance and Growth Drivers

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.

Input Cost Management and Margin Outlook

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.

Segmental Performance and Market Dynamics

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.

Capacity Expansion and Project Timelines

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.

Distribution Expansion and Premiumization Strategy

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.

Product Innovation and Brand Building

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.

International Market Expansion and Strategic Alliances

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.

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