Mrs Bectors Food Specialities Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Record revenue, GST disruption absorbed: Quarterly revenue hit an all-time high of Rs. 551.4 crores, even as the GST rate cut on domestic Biscuits temporarily disrupted trade and shaved close to 1% off the top line.
• English Oven is the growth engine: The brand sustained high double-digit growth, powered by quick commerce and distribution expansion, and is now entering East India with a pan-India ambition over the next 2-3 years.
• Exports face tariff uncertainty but pipeline is building: Buyers are waiting for tariffs to rationalize, slowing near-term ordering, yet management is targeting low-teens export growth for FY26 and working with several large international retailers on potential near-term deals.
• Margins are a FY27 story, not an H2 FY26 one: Management committed to 14%+ EBITDA for FY27 and sees improvement over the next two quarters, but did not confirm the 14% level can be reached within H2 FY26.
• What to watch next quarter: Whether the Khopoli plant commissioning unlocks Maharashtra growth, any positive news from US-India trade talks that lifts export ordering, and the pace of the English Oven launch in Kolkata and Southern India.

Revenue Performance & Headwinds

• Top-line record: Both Biscuits and Bakery verticals delivered their highest ever quarterly revenues, with sequential growth of 7.6% over Q1.
• GST rate cut disruption: The reduction from 18% to 5% on the domestic Biscuit portfolio was structurally positive but caused a brief moderation in September and early October sales as trade partners held back orders awaiting revised MRPs. The quarterly revenue impact was close to 1%.
• Export tariff overhang: Anticipated US tariffs caused some ordering slowdown as buyers wait for rates to rationalize, though exports overall still grew year-on-year.
• Bakery growth mix shift: Bakery segment growth moderated to 16% this quarter from ~19% in prior quarters. English Oven continued its high trajectory while B2B Bakery saw a slowdown that management expects to reverse in Q3.
• Biscuit growth split: Domestic Biscuit grew in single digits, partly due to the September GST billing disruption. Export Biscuits touched double-digit growth in the quarter.

Anoop Bector: "All of our large customers have accepted all their orders. In fact, what has happened is our buyers are still visiting us. We are working on our strategy going forward. But definitely, they are also waiting the tariffs to come down to a more rational levels, I mean, at a 50%, it does become a bit tough."

English Oven & Brand Strategy

• High double-digit growth sustained: English Oven continues to deliver strong growth driven by brand equity, a robust new product pipeline, and continued distribution expansion, with quick commerce emerging as a key growth catalyst.
• Pan-India ambition: Management wants English Oven to be among the top two or three Bakery brands in India over the next 2 to 3 years.
• Geographic expansion underway: The brand is entering East India with a Kolkata launch in the upcoming quarter, followed by further expansion into Southern India. A small Kolkata plant was commissioned this quarter to serve both English Oven and B2B Bakery in the eastern geography.
• Brand strategy refresh: A comprehensive brand strategy emphasizing new-age consumer trends and evolving consumption patterns is being developed and expected to be finalized by Q4 FY26.
• Cremica export strength: The Cremica brand is performing strongly in international markets and now contributes over 50% of export revenue.

Manu Talwar: "over next two years to three years, we want to be Pan India in the top two, three brands, Bakery brands of India."

Capacity Build-Out

• Khopoli plant: A world-class, fully automated Bakery plant will be commissioned in Q4, expected to drive manufacturing efficiencies and unlock growth for English Oven in Maharashtra and beyond.
• Dhar plant: The first line is commissioned and the second line is being commissioned; management expects a positive impact on logistics costs in the next financial year.
• Bhiwadi capacity increase: Bread capacity doubled with a second 4,000-per-hour line; equipment for small rolls and buns has arrived and is expected to start within the next quarter.
• Bangalore relocation: Capacity upgrade via relocation to a newer, larger location is planned for next year, providing enough room to service growth over the next few years.
• CAPEX normalization: The heavy CAPEX cycle initiated last financial year ends by March 2026. From FY27, CAPEX normalizes to approximately Rs. 100 crores, with the Bangalore upgrade as the main item.

Margins

• Q2 gross margin pressure: Gross margins tailed off sequentially due to an accounting policy where recovered freight on international exports is clubbed with revenues, and freight was higher in the same quarter last year, plus a DGFT export incentive factor impacting other operating income.
• Raw material stability: Raw material costs were consistent with the operating plan and showed no major deviation Q2 over Q1; management does not see RM as a major concern going forward.
• DGFT impact is temporary: The export incentive factor is transient; the company may move to an advanced license regime and start importing raw materials duty-free if the benefits outweigh licensing costs.
• FY27 margin commitment: Management has been consistent about delivering EBITDA between 14% and 15%, and committed to definitely achieving 14% or above for FY27. Once stabilized in that range, the company will work toward above 15%.
• Near-term trajectory: Margin improvement is expected over the next two quarters, with an endeavor to move toward 14%, though management did not confirm 14% can be reached within H2 FY26.

Manu Talwar: "we have been very consistent for past almost few quarters, that we will be endeavoring to deliver EBITDA between 14% to 15%. Once we stabilize at that range, we will work towards taking it above 15% EBITDA."

Exports & International Business

• Tariff sensitivity: Ordering has slowed as international buyers wait for US tariffs to come down to more rational levels; at 50%, the economics become difficult. Despite this, exports grew year-on-year.
• Growth target maintained: Management is targeting low-teens growth for full-year FY26 exports and is still gunning for that outcome.
• US-India trade treaty catalyst: Management is hopeful that positive news from ongoing trade discussions could cause an upsurge in international export growth.
• Pipeline with large retailers: The company is working with a number of large international retailers, with the possibility of business getting transacted in the next 3-4 months, next quarter, or within this year.
• Diversification push: An aggressive strategy is underway to diversify markets and buyers, aiming to increase both branded presence and white-label footprint internationally.

Anoop Bector: "The confidence of international buyers into our company is growing. And so we are already working with a number of other companies, large retailers, the possibility of business getting transacted in the next three months - four months, in the next quarter, or within this year, start of the business can happen."

Distribution & Product Strategy

• Outlet strategy evolution: After doubling direct reach outlets from FY22 to FY25, the focus this year shifted to weighted outlet growth through the Cremica preferred outlet program, which grew by almost 30%.
• Biscuit distribution ambition: A detailed 3-4 year plan is being developed to take weighted availability from approximately 30% to approximately 50%, with the journey starting from April. The strategy will roll out in two capsules: North India, and Central/Western India touching South India.
• GST as industry catalyst: The GST revision from 18% to 5% is expected to fuel overall Biscuit industry growth and bring more consumers toward branded Biscuits.
• New product launches: Shortbread, non-stop mini crackers, and teddies were launched in Biscuits, along with a peanut butter with cheese variant. In Bakery, the clean-label brand Nature Baked launched with two SKUs, with more SKUs being readied.
• Frozen range pilot: A ready-to-eat dessert range was introduced in select SKUs in the NCR market as a pilot, with traction building on quick commerce in northern India. On the B2B side, the frozen range launched last year is now working on its next leg of growth.

Anoop Bector: "our main aim is to get into products which are very away from competition and products which are available in the market."

Guidance & Commitments

Key Metrics