Release Date: June 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mrs Bectors Food Specialities Ltd (BOM:543253, Financial) reported a 15.4% year-on-year increase in revenue for FY25, indicating strong overall growth.
- The company saw a 9.8% revenue growth in Q4 FY25 compared to Q4 FY24, showcasing resilience despite challenging market conditions.
- New product innovations, such as shortbread cookies and animal-shaped crackers, have been well-received, indicating successful product development strategies.
- The company is expanding its manufacturing capabilities with new facilities in Indore, Calcutta, and Maharashtra, which will enhance production and distribution efficiency.
- There is a positive outlook for demand recovery, particularly in rural areas, and an anticipated increase in disposable income due to tax revisions, which could boost future sales.
Negative Points
- Rising import material costs have put significant pressure on margins, challenging profitability.
- The announcement of potential tariff changes has introduced uncertainty in the external environment, which could impact future operations.
- Despite revenue growth, the profit after tax (PAT) margin for Q4 FY25 was only 7.7%, reflecting limited profitability improvements.
- The company faces ongoing challenges with the Red Sea issue affecting export logistics, which has not yet been fully resolved.
- The margin expansion is expected to take 6 to 9 months to materialize, indicating a slow recovery in profitability.
Q & A Highlights
Q: With wheat crop at a multi-year high and a recent 10% duty cut on palm oil, do you foresee margin expansion in the B2C biscuits segment starting Q2, and is there a possibility of price cuts?
A: We are currently in the process of adjusting the price increases initiated earlier. We have long-term contracts for wheat, which mitigated inflation impacts last year. While palm oil prices have decreased, the margin expansion may not be significant enough to warrant price cuts due to inflation in other areas like sugar. We expect a more comfortable position moving forward. - Unidentified_2
Q: Can you provide guidance on the B2C segment's growth outlook for FY26?
A: We have observed a positive growth trend starting from Q4 FY25, and we expect this trajectory to continue. For the B2C business, which includes biscuits and bakery, we anticipate low to mid-single-digit growth on an annualized basis. - Unidentified_4
Q: What does the innovation pipeline look like for FY26, and can we expect more health-focused or indulgent-based launches?
A: We have several differentiated product launches planned, including shortbread and health-focused products under the Nature Bay brand. We are also piloting frozen products in the B2C segment. Our focus is on differentiated products rather than "me-too" products, and we aim to build a strong pipeline over the next 18 to 24 months. - Unidentified_4
Q: What is the expected contribution of the new Indore facility to domestic and export operations in FY26?
A: The Indore facility, with an annual capacity of 21,000 tons, will enhance our serviceability in West and Central India and improve export logistics. We aim to maximize its capacity utilization gradually. - Unidentified_4
Q: Can you provide insights on the export growth for the biscuit business during the quarter and full year?
A: Exports have been growing exponentially over the past few years. We expect mid-teens growth in exports for this financial year. The growth trajectory is building up, and we anticipate stronger growth as inflation stabilizes and interest rates decrease. - Unidentified_4
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
