FMCG SECTOR itself is in downward trend, So Bector food which is trading in premium will overreact if there is any slight variation in results
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Sir, from where we can track this data?
It’s available on BSE. Search for the scrip > Disclosures > Insider Trading 2015
Mrs Bectors Food Specialities Ltd Insider Trading 2015 |BSE (bseindia.com)
BSE only shows the shares changing hands. Tar’s blog lists by percentage vs mcap also which I think is such a great idea since 1cr buying in a 10 or 50 cr company is significant vs 1 cr buying in a 1000 cr company.
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Bectors Food Q3FY24 Concall summary
Management Tone- Bullish and confident
Brief Financials
- Revenue at 429 cr in Q3FY24 vs 368 cr in Q3FY23, up 16.6% YOY.
- Gross margins at 45.4% in Q3FY24 vs 44.9% in Q3FY23. (Down QoQ)
- EBITDA at 61 cr up ~19.4% YOY. (Down QoQ)
- EBITDA Margin at 14.3% in Q3FY24 vs 13.9% in Q3FY23.
- PAT at ~35cr in Q3FY24 vs ~28cr in Q3FY24 , up ~25% YOY. (Down QoQ)
- Biscuit segment revenue at 268 cr up 22% YOY and up 71% from same Q in FY22. Q3 biscuit growth is majorly growth and the company has not taken any major price hike.
- Bakery segment revenue at 146 cr up 15% YOY and up 58% from same Q in FY22. Company took price increases across some selective SKUs in English Oven primarily in North India in Dec, the benefit of which will be visible in Q4.
Management
- There is consumption and demand pressure on the domestic biscuit side, increased competition providing better customer offering. This trend is likely to moderate in 1-2 Qs.
- On the domestic bakery side, the company is focusing on increasing distribution in Punjab (new market) and Delhi market (only 55% market covered).
- The institutional QSR segment is seeing some slowdown but the company is managing this by adding new products and new customers. Company will start a feed plant with little investment in Kolkata for the QSR business because QSR chains are aggressively expanding in the northeast.
- Company was able to take a price rise on the bread side but not on the biscuit side due to increased competition.
- Continued focus on premium products have improved margins. Moreover, expansion in distribution (modern trade and e-ecommerce channels) has helped in penetration across new and existing markets.
- Overall current premium contribution on domestic biscuit side is approximately around 34% to 35% vs ~30% last year same Q. Premiumization on biscuits has improved by 15% vs last year.
- On track to achieve 3 lakh direct distribution outlets by the end of FY24. (earlier commitment was 3.2 lakh at the start of FY23). Company has reached 2.8 lakh by Dec.
- Management will share their plan for the next 2 years growth in Q4.
- Company had its first ever media plan on top Hindi channels featuring Kareena Kapoor Khan on Star Plus, Sony and Zee. Co. wants to expand this campaign to other states. Ad spend as a % of sales is ~3.5% and management wants to gradually take it to 5% in the next 3 years time.
- Britannia took a 3% cut in its average selling price yet still its Gross Margins increased QoQ. Gross margins for bectors contracted QoQ due to -
- Little upsurge in commodity prices (both on biscuit and bakery due to longer hedging policies on sugar and wheat flour). Inflation is controlled though.
- Higher competitiveness on domestic biscuits, whereby the free grammage offered by the competition has kind of increased (customer getting better price from competition).
- Q2 was a higher base in biscuit exports due to Christmas (premium biscuits).
- Going forward, gross margins for Q2 can be taken as a base.
- EBITDA margin guidance is b/w 14-15% for the next few Qs.
- Growth guidance- Mid to High teen growth. Growth drivers include premiumization, distribution and Marketing. Bakery growth to be mid to high teens but can grow faster. 65-70% of the growth is coming from existing outlets and rest is coming from new territories.
- Definition of Premium based on AC Nielsen industry categorisation. Premium segment has better gross margins than the mass segment (glucose).
- Total investments done by the company is 500cr (FY24+FY25). This includes Indore (biscuit plant) which will start from FY25, Khopoli, mumbai (bakery) which will start from Q4FY25, two additional lines in Rajpura (biscuits) which will be ready by Q2FY25 and Calcutta which will start in Q3FY25.
- Indore and Khopoli are greenfield projects and facilities constructed are for much larger capacities than currently utilised. This led to higher costs. They can handle double the volumes on the biscuits side and 35-40% additional volumes on the bakery side. Moreover, they have additional land available in Indore and additional land in the surrounding area for Khopoli.
Business
- Last year, the company implemented Sales Force Automation. This year in the process of implementing a Distributor Management System with partner Bottree.
- Company already has the first two modules with ~500 distributors and by march will have distributors covering 75% of its revenue.
- Company has launched new health products like Bake Fit, Millet Cookies and Atta Kulcha along with multigrain breads containing 11 grains. All of this is getting good customer feedback
- Export Business saw a robust demand in Canada, North & South America, Europe, Australia and Asia.
- Company works for Walmart in their one specific SKU for Christmas and is working towards extending this to daily usage shelf products as well. They are confident about scaling this relationship and tie up with more US retailers.
- In Q3FY24, the company commissioned a bakery plant in NCR. This will help cater to the demand of the National capital and surrounding regions.
- Company is also setting up a new bakery unit in Mumbai and a biscuit factory near Indore , in FY25.
- Company launched last year in Bombay, Pune and Bangalore and has now added another 12 cities. Now they are in 15 cities in the South and West with 20,000 outlets.
- On an all India basis, the company is now covering ~340 districts vs 269 districts in Q4FY23.
- Company also working on Bake Walk which is a freezer to oven model. This is inline with their strategy to get into complete bakery format (sweet and savoury). Currently operating 4 stores and focus is on improving model, product mix and SSSG to grow as a bakery brand both on B2B and B2C.
- Interim dividend of Rs 1.25 per share.
Disclosure: no recommendation to buy/sell/hold. Invested since ~350 levels.
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Which QSR are customer of bector food & how much revenue they generate from QSR segment?
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KFC, Burger King, Subway, B2C, and Contract manufacturing for Mondelez, do not have the revenue breakdown in QSR vs other, but 9MFY24 numbers are 750cr from Biscuits and 450cr from bread/bakery.
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The best place to sell biscuits in India is a bus stand.
Very High demand.
Talked to the guy selling it, said Cremica biscuits sells like crazy here.
Ps- This is from a very small town in Haryana.
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Do note CREMICA BRAND product dont all belong to MRS BECTORS. number of products with Cremica brand like Sauses or salad dressing, not sure about some biscuits, etc belong to Mr Bectors brothers company that also sell under same brand… there has never been any disclosure to my knowledge in the arrangement between these two …i think over time they will have to find a resolution
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Read the DRHP. The brand belongs to the listed entity for biscuits only and for sauces and dressings it is with his brother’s company (Akshay Bector). All disclosures have been made in the prospectus while listing.
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Awesome Podcast, made me regret not buying the stock when it was available at reasonable valuations lol
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Recently in Kuwait lulu center i have noticed entry of Bector foods products biscuits,
My observations after testing the product
- Pricing is 25% less than Britannia biscuits
- even after 25% less price the number of cookies in each packet are more number i noticed britannia cookies are selling 72g packet and bector foods are selling 83 grams packets
- Taste wise i found they are equal to good day named cookies
- LULU supermarkets are many in GCC so this will be huge options for generating revenue and improving the PAT lets see
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