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* Mrs.Bector Foods Specialties Ltd (MBFSL) reported strong growth of 19.7% YoY in Revenue during the quarter to Rs.4,963 mn vs Rs.4,145 mn in the year-ago quarter. However EBITDA/ PAT saw growth of 9%/4%, EBITDA growth was the lowest in the last eight quarters due to high freight and raw material prices.

* In Q3 inflationary pressures intensified further as palm oil prices continues to rise which might further impact its margins. However, the management still maintains its target of 14-15% operating margins on an annualized basis.

* We expect MBFSL to clock a Revenue/ EBITDA/PAT CAGR of 17%/19%/21% respectively over FY24-26E. Therefore we maintain our ‘BUY’ rating and a TP of ?2,000 at a PE of 60x of FY26 EPS of ?33

Double-digit volume growth continues to drive top-line; Steady growth in exports MBFSL reported a 19.4% YoY growth (13% QoQ) in its Revenues to Rs.4,963 mn in Q2FY25 from Rs.4,145 mn in Q2FY24 . The company’s gross margin improved 64bps YoY (-65 bps QoQ) in Q2FY25 to 47.3% vs 46.7% in Q2FY24. Company posted a growth in consolidated EBITDA by 9% YoY (10% QoQ) to Rs.705 mn in Q2FY25. EBITDA margins came in lower by 140 bps YoY (-37 bps QoQ) to 14.2% in Q2FY25 vs 15.6% in Q2FY24. Company reported Profit After Tax of Rs.389 mn grew by 4.5% YoY (Flat QoQ) with PAT margins at 7.8% in Q2FY25 vs 9% in Q2FY24

MBFSL’s Biscuit segment sales stood at Rs.3.2 bn against Rs.2.6 bn in Q2 FY24, registering a strong growth of 24% compared to Q2 FY24 including domestic and export biscuit segment. In Q2 FY25 MBFL’s Bakery segment revenue stood at Rs.1.7 bn as against Rs.1.4 bn in Q2 FY24, registering a growth of 19% compared to Q2 FY24 including retail bakery and institutional segment. In Biscuits MBFSL saw continuous traction in its export business however it witnessed some slowdown in the domestic side mainly due to heavy monsoon and low demand in the modern trade.

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