Buy Mrs Bectors Food Specialities, Target Price Rs 252: Geojit Financial Services Recommendation

Geojit Financial Services Research Report: Mrs. Bector's Food Specialities

Mrs. Bector's Food Specialities Ltd (MBFSL) is one of India's leading manufacturers of biscuits and bakery products, established in 1978. The company operates through its two flagship brands—Cremica and English Oven. Cremica includes biscuits, cookies, crackers, cream biscuits, and digestives, while English Oven offers breads, buns, pizza bases, and cakes.

According to the research report, MBFSL is projected to deliver a 13% revenue Compound Annual Growth Rate (CAGR) over FY26–28E, with revenue from operations expected to reach Rs.26 billion, supported by scale-up in the bakery business (QSR and modern trade), rising export momentum, and gradual premiumization in the biscuits portfolio. The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is expected to rise from Rs.251 crore (13.4% margin) in FY25 to Rs.365 crore (13.9% margin) in FY28E, supported by favourable input costs.

However, margin expansion is likely to remain gradual amid intense competition in biscuits. The Profit After Tax (PAT) is projected to increase from Rs.143 crore in FY25 to Rs.228 crore in FY28E, a ~17% CAGR, supported by EBITDA expansion, moderate depreciation, and a strong balance sheet with negligible net debt. This results in an FY28E Earnings Per Share (EPS) of Rs.7.4 (Rs.4.7 in FY25).

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The return ratios are expected to remain moderate in the near term as capex-led capacity additions expand the capital base. The Return on Equity (ROE) is likely to decline from 15.7% in FY25 to 12.5% in FY26E, before improving to 14.5% by FY28E. The Return on Capital Employed (ROCE) is expected to move from 14.1% to 11.7% and recover to 14.3% over the same period.

Valuation and Outlook

At the current valuation levels, the near-term business risks, including raw material volatility and capex-led near-term profitability drag, appear largely factored in. However, with the topline expected to grow at a 13% CAGR in FY26E-28E and EPS to grow at a 22% CAGR in the same period, the stock is valued at 34X (5-year average = 40). As a result, the research report assigns a target of Rs.252 on FY28E EPS.

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