Buy Mrs Bector Food; target of Rs 275: Anand Rathi

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Revenue Growth: Mrs. Bector Foods delivered a record revenue in Q2FY27, with 14% y/y growth, driven by bakery and biscuits segments.
  • Margin Expansion: EBITDA margin remained stable at 13.1% despite input cost pressures, with the management aiming to improve it to 13.5-14% in Q4FY27.
  • Distribution Expansion: The company added ~30k outlets, taking the total to ~345k, with a medium-term target of 900k-1m biscuit outlets by FY30e.
  • Premiumisation: The company is focusing on premium products, with Q-Com contributing ~22% to B2C revenue, and plans to launch three new products and two seasonal collaborations.

Thesis Validation Checklist

  • Revenue Growth: Mid-teen revenue growth in FY27, with mid-to-high teen growth in H2, driven by festive demand, price hikes, and distribution expansion.
  • Margin Expansion: Improvement in EBITDA margin to 13.5-14% in Q4FY27, driven by pricing, richer mix, and cost savings.
  • Distribution Expansion: Increase in preferred outlets' contribution from 13-14% to 20% by FY30e, with a focus on premium products and Q-Com.
  • Export Growth: Mid-teen export growth in FY27, driven by recovery in US market and improvement in shipping disruptions.