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Demand uptick led by export, followed by bakery business

Mrs. Bectors Foods’ (MBFSL) consolidated revenue grew 16.0% YoY to INR5.5b in 1QFY27, led by strong performance in the bakery segment (+17.5% YoY; B2C – high teens and QSR – high single digit). Biscuits grew 15.7% YoY, led by doubledigit growth in the export segment, while domestic biscuit reported high singledigit growth. Management maintained its guidance of delivering mid-teens revenue growth for FY27. EBITDA margin expanded to 13.1% (+80bp YoY), and is targeted to reach 14% by 4QFY27. We expect Revenue/EBITDA/APAT to clock 14%/22%/27%, respectively, over FY26-28. Mr. Anshul Rastogi has been appointed as the CFO of the company w.e.f from 7th August.

Strong start to FY27 with sustained growth momentum

MBFSL reported a strong start to FY27, with revenue growing 16% YoY and EBITDA increasing 23.8%, despite inflationary pressures and supply chain disruptions. Domestic demand remained healthy across retail and institutional channels, while exports witnessed a meaningful recovery, supported by new product launches and stronger customer traction. The company continues to invest in premiumization, innovation, distribution expansion, and brand building to drive long-term growth. Capacity additions in Kolkata and Khopoli are progressing well and are likely to support expansion across new geographies. Management expects export momentum and institutional demand to remain healthy over the coming quarters. Pricing actions and Project Impact initiatives are expected to mitigate inflationary pressures and support margin recovery. The company reiterated its guidance of mid-teens revenue growth for FY27 and remains confident of achieving around 14% EBITDA margin by 4QFY27.

Margin expands QoQ, led by product mix; expect improvement in 2H

In 1Q, gross margin stood at 47.2% (+155bp YoY, led by product mix). EBITDA stood at INR721m (+23.8% YoY), settling EBITDA margin at 13.1% (+80bp YoY), despite an increase in other expenses (+24.5% YoY) and employee costs (+11.4% YoY). APAT grew 25.7% YoY to INR388m on account of lower interest expenses (+10.0% YoY). With ~2% raw material inflation, the company plans calibrated price hikes to protect margins, targeting EBITDA margin of ~14% by 4QFY27.

Valuation and view: Reiterate BUY

We expect MBFSL to deliver a 14% revenue CAGR over FY26-28, driven primarily by:

1) strong growth in domestic bakery

2) premiumization and health-focused innovation

3) growth in export revenue after the reduction in tariffs. The QSR segment has started witnessing an uptick. We believe distribution expansion in the domestic market (especially in the lower North) and export growth will be key monitorables. We increase our earnings by 1.9%/8.5% for FY27E/FY28E, led by better visibility in export market, followed by domestic biscuit market. We reiterate our BUY rating with a DCF-based TP of INR260 (based on an implied P/E of 35x for FY28). Key risks: potential supply chain disruptions impacting production and distribution/execution risks related to plant consolidation.

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