Mrs Bectors Q4 FY26 earnings call

Mrs. Bectors Food Specialities achieved a significant milestone in FY26, crossing the INR2,000 crores revenue mark with consolidated revenues of INR2,043.6 crores, representing a 9.1% growth over FY25. EBITDA for FY26 stood at INR257.7 crores (2.5% growth) with a margin of 12.6%, and PAT was INR140.9 crores (6.9% margin). The company has demonstrated a robust 20% CAGR over the last four years, growing from INR988 crores in FY22 to INR2,044 crores in FY26.

The Bakery vertical exhibited strong performance in FY26 with a 14% growth, while the Biscuits vertical grew at 6.7%. In Q4 FY26, both segments showed resilient growth, with Biscuits at 8.4% and Bakery at 8.5% year-on-year. The Q4 Bakery growth was noted to be tempered by the Navaratri season shifting to March, which temporarily impacted bread consumption in North India, but management expects mid-teens growth for the Bakery segment in FY27.

Over the past four years, the company underwent a meaningful transformation, including deliberate leadership hiring, strengthening IT infrastructure, and enhancing sales and distribution. A clear brand and sub-brand strategy was defined for long-term brand equity creation. The company is also actively building quick commerce as a significant channel and institutionalized cost optimization through Project IMPACT, which yielded good results in manufacturing, supply chain, and recipe rationalization.

Mrs. Bectors made substantial investments in expanding manufacturing capacity across both Biscuits plants in Rajpura and Indore, and Bakery plants in Kolkata, Khopoli, and Bhiwadi. The Kolkata plant was successfully commissioned in January, and the Mumbai plant in Q4 FY26, with its bun line already operational and bread line nearing completion. These expansions are crucial for meeting growing demand, supporting new product launches, and enabling deeper regional penetration, particularly in the East and Central India, with a planned Bangalore facility also in the pipeline.

The company expanded its health portfolio under NaturBaked with the introduction of protein bread and extended its dessert range with English Oven Cheesecake Jars, catering to the growing consumer appetite for premium ready-to-eat products. The focus on premiumization continues, with a target to increase English Oven premiumization to 65% from the current 55-56%. The new jar desserts, currently focused on Delhi NCR, show positive unit economics and have seen investment in an automated production line.

The company faced inflationary pressures from palm oil, crude, packaging materials, and minimum wage hikes, resulting in an estimated 3% impact on costs. Management is actively pursuing mitigation measures through calibrated price increases and cost efficiencies under Project IMPACT. They are optimistic about quarter-on-quarter EBITDA margin improvement in Q1 and Q2 FY27, aiming to reach 'as close as possible to 14%'. The company also employs situational hedging strategies for key commodities like wheat flour, sugar, milk powder, and edible oils.

The company plans to increase its billed outlets by 40,000 in FY27, from the current 310,000-320,000, focusing primarily within 400 kilometers of its plants in Rajpura and Indore. The long-term objective is to increase weighted availability from the current 35% in North India to 40-45% by 2030, aiming for a total of 900,000 to 1 million outlets across India. This strategy supports sustained growth through deeper regional penetration and market share gains.

The export business experienced low single-digit growth in Q4 FY26, impacted by geopolitical headwinds^🌐 from the West Asia conflict and past US tariff issues. However, tariffs have substantially reduced, and the company is actively discussing new business with clients and onboarding new projects in the US. Efforts with the Commerce Ministry and External Affairs Ministry are ongoing to resolve regulatory and duty pressures, with management expressing optimism for good growth in exports in Q1 and Q2 FY27.