Target: ₹2,000
CMP: ₹1,638.10
Mrs Bectors Food Specialities Ltd (MBFSL) will continue to outperform its large peers in terms of volume and value growth on the back of its Pan-India expansion in both biscuits and bakery coupled with consistent B2B business and export sales. MBFSL’s focused approach on premiumisation across categories coupled with healthy growth in its Institutional Bakery and Biscuit export business will continue to support its double-digit volume growth.
Post commissioning of ₹350 crore capex by H2-FY25 the company is aiming to increase its direct reach to 1 million from 7 lakh outlets currently. We believe MBFSL will benefit from: Premiumisation trends in the underlying sector supported by structural tailwinds; strategic expansion of capacities in key areas and enhancing distribution reach; New product innovations across categories; and continued market share gains in the export business.
We expect MBFSL to clock a Revenue/ EBITDA/PAT CAGR of 17/19/21 per cent, respectively over FY24-26. Therefore we maintain our ‘Buy’ rating and a TP of ₹2,000 at a PE of 60x of FY26 EPS of ₹33.
Key risks: Slowdown in the Premiumisation Trend in Biscuits and Bakery; Breach of any safety standards may lead to negative publicity; and high competition.