Mrs. Bectors Food Specialities Ltd. share price target

With 8% y/y revenue growth (vs the Street’s 11%) and Rs582m EBITDA (Rs639m), Mrs Bector Foods’ Q1 was below estimates on muted demand amid high input costs, though growth improved q/q.

One of the leaders in premium and mid-premium biscuits (a 5% share in North India), and other bakery items mainly in north India, Mrs Bectors Food Specialties manufactures and markets biscuits under its flagship brand ‘Mrs Bector’s Cremica’ and bakery items under ‘English Oven’.

We expect Revenue/EBITDA/PAT CAGR growth of
20%/23%/29% in the FY24-FY26 period. Given the trailing history
and growth prospect of the company, we have kept the EV/EBITDA
multiple constant at 23x. This gives a price target of Rs1,510 and an
upside potential of 19% on forward EBITDA of March FY26.

Q1FY24 results were above our estimates. Mrs. Bectors continues to be on a robust revenue growth trajectory (+24% YoY in 1QFY24) led by distribution expansion in existing and new markets with broad-based growth across biscuits and bakery segment. Some moderation in growth rates is likely with price reduction by company (with input cost correction) to stay competitive and maintain the market share gain trajectory.

Q4FY23 results were above our estimates. Mrs. Bectors’ continues to report material uptick in revenue growth trajectory (+38% YoY with similar growth across all four quarters) led by distribution expansion in existing regions and pricing.

Mrs. Bectors’ continues to report significant uptick in revenue growth trajectory
led by distribution expansion in existing regions and pricing. It reported good
revenue performance (+40% YoY; +38% YoY in 9MFY23) with (1) +40% YoY growth in biscuits segment with good performance in both domestic biscuits and exports,

On a healthy and delectable growth trajectory

Consensus likes to see Mrs. Bectors’ outperformance in India B2C biscuits and absolute (good) growth in B2C Breads.

Plant visit takeaways - Baked to perfection! In our recent visit to Mrs. Bectors Food Specialities' (MBFSL) Khopoli plant (Breads and Buns facility), we got interesting insights into their manufacturing process and reasons that make MBFSL the sole supplier to leading QSR players in India. The company uses state-ofthe-art machinery with the process approved by leading QSR players. The company has indicated that demand for QSR and breads & buns has been better than pre-covid levels...

Mrs. Bectors Food is a well-established player in the biscuit and breads segment in the Northern region of India. The company ranks among top 2 in the premium and mid-premium biscuits category in Punjab, Himachal Pradesh, Ladakh and J&K.; The company holds a market...

We present the investment Idea Mrs. Bectors Food Specialities Ltd (BFSL), a promising biscuit and bakery player in North India. We expect the company, one of the largest exporters of Biscuits from India and one of the largest suppliers of buns to QSR, to ride the discernible tailwinds of consumer spending. BFSL over the years has built a strong and recognizable brand. BFSL should continue to expand its product portfolio within the existing segments, focus on increasing sales realization and volumes, and provide differentiated offerings. The company can leverage its extensive experience to strengthen its industry position by developing new products to capitalize on emerging...

Mrs. Bectors Food Specialities Ltd is a specialist in manufacturing premium & mid-premium biscuits and breads having a strong market footprint in the North India Region. Over the years, the company has diversified its product portfolio to include all kinds of biscuits & cookies suitable for domestic as well as exports markets and forayed into different types of breads & bakery products. Mrs. Bectors Food is also the sole supplier to some of the major QSR players having pan India presence. The company has set up state of the art manufacturing facilities that manufactures 100% of its products in-house providing the company effective quality control over the production process ensuring consistent quality of products. Mrs. Bectors Food has shown a robust improvement in its financials...

Mrs. Bectors Food Specialities Limited IPO Note Issue Open: Dec 15 Dec 17, 2020 Price Band: Rs. 286 288 (Discount of Rs 15 for the eligible employees) *Issue Size: 18,768,750 eq shares (Fresh Issue of 1,407,639eq sh + Offer for sale of 17,361,111 eq sh) Issue Size: Rs. 536.8 540.5 cr Reservation for: QIB Upto 50% eq sh Non Institutional atleast 15% eq sh Retail atleast 35% eq sh Face Value: Rs 10 Book value: Rs 62.47 (September 30, 2020) Bid size: - 50 equity shares and in multiples thereof.

IPO NOTE

According to Technopak Report, Mrs. Bector's Cremica' is the one of the leading biscuit brands in the premium and mid-premium segment in Punjab, Himachal Pradesh, Jammu and Kashmir and Ladakh and English Oven' is the one of the...

MBFS is one of the leading companies in the premium and mid-premium biscuits segment in North India and sells products under flagship brand Mrs Bector's Cremica'. It is among the top two Indian biscuit manufacturers in the premium and mid-premium biscuits segment in Punjab, Himachal Pradesh, Ladakh and Jammu & Kashmir. In FY20, it had a market share of 4.5% of the premium and mid premium biscuits market in North India. Its customers associate the brand Mrs Bector's Cremica' with high quality premium and mid-premium biscuits that incorporates quality, taste and...

Mrs. Bector Food Specialities are one of the leading companies in the premium and mid-premium biscuits segment and the premium bakery segment in North India. Company manufacture and market a range of the biscuits such as cookies, creams, crackers, digestives and glucose under our flagship brand Mrs. Bector's Cremica'. Company also manufacture and market bakery

Public issue of 18,768,750 Equity shares of Face value Rs. 10 each, (Comprising of fresh issue of 1,407,639 Employees Reservation Equity Shares* (Rs. 40.54 cr.) and Offer for Sale of Total 17,361,111 Equity Shares* (Rs. 500 cr.) by Selling Shareholder QSR Asia Pte. Ltd.)....

increasing distribution. We note that the company has improved product quality over the years and has benefitted from being contract manufacturer of Oreo biscuits for Mondelez. We believe Bread and Institutional Buns business is a silver lining given strong share and the credibility it provides to...