Anand Rathi issued a buy rating for Mrs Bector Food with a target price of Rs 275. The company delivered record revenue in Q2FY27 despite rising input costs. While biscuits faced weak rural demand, the bakery business showed strong momentum. Management expects growth to pick up through price hikes and expansion.
Anand Rathi's research report on Mrs Bector Food Despite steep rise in input cost, Mrs. Bector Foods delivered a record revenue in Q2FY27 with sequentially stable margin. While its revenue grew 14% y/y, EBITDA margin stood at 13.1%, in line with street estimate of 13%. Bakery sustained strong momentum, while biscuits business dragged by weak rural demand (below-normal monsoon) and West Asia-led shipping disruptions. It expects FY27 revenue growth in mid-teens (H2 at mid-to-high teens), aided by price hikes in Oct-Nov, distribution expansion, premiumisation and recovery of deferred export orders.
With inflation peaking in Q3FY27, the management aims to sustain EBITDA margin at ~13.1% before improving to 13.5-14% in Q4FY27 and reiterated its 14-15% medium-term target. Outlook Introducing our estimates for FY29e, we tweak our FY27/28e earnings estimate to factor in strong Q2 performance and growth outlook. Considering healthy earnings visibility and reasonable valuation, we retain BUY rating on the stock with a higher TP of Rs275 (from Rs250 earlier), valuing it at 35x Sep-28 EPS (vs. 35x FY28e EPS earlier). For all recommendations report, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management.
Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Mrs Bector Food - 0911026 - anand