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LKP Securities
Mrs. Bectors Food
Target: ₹636
CMP: ₹434.45
Mrs. Bectors Food is a well-established player in the biscuit and breads segment in the Northern region of India. The company holds a market share of 4.5 per cent in the North India under premium to mid premium biscuits segment. Mrs Bectors Food is among the top 5 biscuit exporters in India with about 12 per cent share of total exports from India in FY19. The company exports to more than 64 countries having tie-ups with reputed retail chains, distributors and buying houses. Recent incorporation of a new subsidiary in UAE will strengthen its foothold in the Middle Eastern and African region.
Capacity expansion is in progress of one bread & one bakery line in Greater Noida and one biscuit line in Rajpura. Post operationalisation of these new capacities, the company expects to achieve revenue of ₹1,500 crore from current ₹881 crore in FY21.
Mrs. Bectors Food’s liquidity profile is robust aided by healthy cash flow generation from operations resulting in lower debt and phased capex implementation plans which is expected to keep the company’s reliance on external borrowing minimal. Additionally, the working capital intensity of the business remains low inherently, resulting in low working capital borrowings.
As value migrates from un-organised to organised, Mrs. Bector Foods provides a good investment opportunity in the consumer space.
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