Mrs Bectors Food Speciality Ltd

Price Band | 286-288 UNRATED

December 14, 2020
Mrs Bectors Food Specialty (MBFS) is one of the leading companies in the
premium, mid-premium biscuits segment and the premium bakery segment
in North India. The company manufactures and markets a range of biscuits
like cookies, creams, crackers, digestives and glucose under the flagship
brand ‘Mrs Bector’s Cremica’. MBFS also manufactures and markets bakery

IPO Review
products in savoury & sweet categories including breads, buns, pizza bases
and cakes under brand ‘English Oven’. The company is the largest supplier
of buns in India to reputed QSR chains like Burger King India, Connaught
Particulars
Plaza Restaurants, Hardcastle Restaurants and Yum! Restaurants (India).
Leading brand of biscuits, bakery products in North India Issue Details

MBFS is one of the leading companies in the premium and mid-premium Issue Opens 15th December 2020
biscuits segment in North India and sells products under flagship brand ‘Mrs Issue Closes 17th December 2020
Bector’s Cremica’. It is among the top two Indian biscuit manufacturers in Issue Size* | 540.5 crore
the premium and mid-premium biscuits segment in Punjab, Himachal
Fresh Issue | 40.5 crore
Pradesh, Ladakh and Jammu & Kashmir. In FY20, it had a market share of
Price Band | 286-288
4.5% of the premium and mid premium biscuits market in North India. Its
customers associate the brand ‘Mrs Bector’s Cremica’ with high quality No. of shares on offer
1.88
(in crore)
premium and mid-premium biscuits that incorporates quality, taste and
QIB (%) 50
value. The brand recall is enhanced through arrangements with certain
preferred retail outlets by displaying products prominently in their shelves. Retail (%) 35
In H1FY21, the company had a network of 4,422 preferred outlets. Minimum lot size (no of
50
shares)
Strong distribution network *based on upper price band of | 288 per share

ICICI Securities – Retail Equity Research

The company’s extensive sales and distribution network allows it to reach a
wide range of consumers and ensures effective penetration of its products. Shareholding Pattern (%)
Its sales & distribution network is strategically spread across different states Pre-Issue Post-Issue
in North India and has a strong outreach in certain urban and semi urban Promoter
52.4 51.1
markets. MBFS distributes biscuits across 23 states in India, through a Group
widespread network of super stockists and distributors. Its distribution Public 47.6 48.9
network comprises 196 super stockists and 748 distributors supplying to a Objects of issue
wide range of customers through 458,000 retail outlets. The bakery products Objects of the Issue | crore
for retail customers are sold through 191 distributors and over 14,000 retail
Financing the project cost
outlets situated in the Delhi NCR region, Mumbai, Pune and Bengaluru towards Rajpura Expansion 40.5
through direct sales to supermarkets, departmental stores and distributors. Project

Key risks and concerns Fresh Issue 40.5

Offer for sale 500.0
 Export benefits may end under export schemes
 Inability to expand manufacturing
 Discontinuance of supply contract to QSRs
 Supply & transportation disruptions
Research Analyst
Priced at PE of 55x FY20 (post issue) on upper band
Sanjay Manyal
The company reported sales growth of 4.8% CAGR in FY18-20E with EBITDA sanjay.manyal@icicisecurities.com
margins of 12.2-12.3% in the same period. RoE, RoCE for the company is
9.9%, 12.7%, respectively, in FY20. The stock is trading at 55.5x FY20 price
to earnings & 2.3x FY20 EV/sales.
Key Financial Summary
| crore FY18 FY19 FY20 CAGR FY18-20 (%)
Total Revenues 694.0 783.7 762.1 4.8
EBITDA 85.5 96.1 92.8 4.2
EBITDA Margins (%) 12.3 12.3 12.2
PAT 35.9 33.0 30.3 -8.0
EPS (|) 6.3 5.8 5.3
EV / Sales 2.5 2.3 2.3
P/E (x) 46.9 50.9 55.5
RoE (%) 14.3 11.8 9.9
RoCE (%) 18.0 15.9 12.7
Source: ICICI Direct Research, RHP
 IPO Review | Mrs. Bectors Food ICICI Direct Research

Company background
Mrs Bectors Food Specialty (MBFS) is one of the leading companies in the
premium and mid-premium biscuits segments and the premium bakery
segment in North India. The company manufactures and markets a range of
biscuits such as cookies, creams, crackers, digestives and glucose under
flagship brand ‘Mrs Bector’s Cremica’. MBFS also manufacture and market
bakery products in savoury and sweet categories, which include breads,
buns, pizza bases and cakes under brand ‘English Oven’. MBFS supplies
products to retail consumers in 26 states within India, reputed institutional
customers with a pan-India presence and exports to 64 countries. Mrs
Bector’s Cremica’ is one of the leading biscuit brands in the premium and
mid-premium segment in Punjab, Himachal Pradesh, Jammu & Kashmir and
Ladakh. ‘English Oven’ is one of the largest selling brands in the premium
bakery segments in Delhi NCR, Mumbai and Bengaluru. The company is the
largest supplier of buns in India to reputed QSR chains such as Burger King
India, Connaught Plaza Restaurants, Hardcastle Restaurants Pvt Ltd and
Yum! Restaurants.
Exhibit 1: Product line in biscuits & bakery products

Source: RHP, ICICI Direct Research

Biscuits – The Company manufactures and sells biscuits, primarily in the

premium and mid-premium segments including a wide variety of cookies,
creams, crackers, and digestives. Biscuits account for | 451.2 crore
(excluding contract manufacturing) of sales FY20. The company launched
new products such as Trufills, Premium Sugar and Classic Crackers, Pista
Almond Cookies, Choco Chip Cookies, Honey Oatmeal Cookies recently.
The company’s product portfolio for the biscuits category consists of 384
SKUs. It also manufacture ‘Oreo’ biscuits and ‘Chocobakes cookies’ on
contract basis for Mondelez India Foods Pvt Ltd.
Bakery products – MBFS manufactures and sells various types of premium
bakery products in savoury and sweets categories for its retail customers
such as breads, buns, pizza bases, and cakes under the ‘English Oven’ brand,
which caters to the premium segment in Delhi NCR, Mumbai and Bengaluru.
The ‘English Oven’ is one of the fastest growing large scale premium bakery
brands in India. Its revenue from the sale of branded breads and bakery
products to retail customers under the ‘English Oven’ brand accounted for
| 130 crore FY20. The company also manufactures and sells a variety of
bakery and frozen products such as buns, kulchas, pizzas and cakes to QSR
customers with a pan-India presence, cloud kitchens such as Rebel Foods
Pvt Ltd since 2015, multiplexes such as PVR as well as certain hotels,
restaurants and cafés. It is the sole supplier of burger buns and pan muffins
(frozen) to Connaught Plaza Restaurants Pvt Ltd and has been associated
since 1995. MBFS is the preferred supplier of burger buns and pan muffins
(fresh) to Hardcastle Restaurants since 2007. In FY20, revenue from sale of
buns, bakery and frozen products to institutional customers accounted for

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 IPO Review | Mrs. Bectors Food ICICI Direct Research

| 128.3 crore. Recently, it introduced new products such as sub breads,

pizzas, garlic breads, cheese garlic bun fills, frozen cookies for retail as well
as institutional customers & diversified product portfolio for bakery segment
consists of 118 SKUs.
MBFS’ products are manufactured in-house at six manufacturing facilities
located in Phillaur, Rajpura (Punjab), Tahliwal (Himachal Pradesh), Greater
Noida (Uttar Pradesh), Khopoli (Maharashtra) and Bengaluru (Karnataka),
which enables it to have an effective control over the manufacturing process
and ensure consistent quality of products. All its manufacturing facilities are
strategically located in proximity to the target markets, which minimises
freight and logistics related time and expenses The company has received
several quality certifications and accreditations, including certification from
the FSSC 22000, the US Food and Drugs Administration, British Retail
Consortium (BRC) and Sedex Members Ethical Trade Audit (SMETA).
Exhibit 2: Number of employees
Department Number of Employees

Sales 403
Marketing 6
Research & Development 63
Manufacturing 1,651
Human resources 36
Others 539
T o ta l 2,698
Source: RHP, ICICI Direct Research

The company has a strong distribution network in India and globally in the
general trade and the modern trade segment. In H1FY21, it distributed
biscuits across 23 states in India through a widespread network of 196
super-stockists and 748 distributors supplying to wide range of customers
through 458,000 retail outlets and 4,422 preferred outlets. MBFS is also one
of the largest suppliers of biscuits to Canteen Stores Department (CSD) of
Government of India supplying in 33 locations across India and an approved
and listed supplier for Indian Railways having a strong presence across
Railway station canteens and their stores in North India. The company is one
of the leading exporters of biscuits from India and exported biscuits under
brands as well as under third party private labels to 64 countries to reputed
retail chains, distributors and buying houses.
The company also has a strong distribution network for bakery products
sold under brand ‘English Oven’ supplied to customers through 191
distributors and over 14,000 retail outlets situated in Delhi NCR, Mumbai,
Pune and Bengaluru under modern trade and general trade channels, direct
sales to supermarkets, departmental stores or indirect sales through
wholesalers and distributors. The company is one of the few bakery
companies in India that can handle fresh, chilled and frozen products. This
model enables it to distribute bakery products across India.

Exhibit 3: Segment wise gross & EBITDA margins

Products Particular FY18 FY19 FY20
Biscuits Gross Margins (%) 42.1% 43.6% 44.4%
EBITDA Margins (%) 10.3% 10.4% 8.8%

Bakery Products Gross Margins (%) 50.8% 50.8% 50.1%

EBITDA Margins (%) 16.7% 15.4% 17.7%
Source: RHP, ICICI Direct Research

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Industry background
The Indian biscuits & bakery retail market is valued at | 45000 crore and is
expected to grow at ~9% CAGR in the next five years. Biscuits & other
snacking bakery products like rusks, wafers and tea cakes contribute almost
| 40000 crore to the total market. The balance 11% is contributed by breads
including loaves, buns, pizza bases that together account for | 5000 crore.

The Indian biscuit market size is estimated to be | 40000 crore in 2020

representing ~5% of the global market. The Indian market is expected to
grow at 9% CAGR till 2025 and reach | 62000 crore. This growth will increase
India’s share in the global market to ~6% by 2025.

Exhibit 4: Biscuit market in India (overall) (| crore)

70000
60000
50000
40000
30000 62000

20000 40000
10000 25000

0
2015 2020E 2025P

Indian Biscuit Market (| crore)

Source: RHP, ICICI Direct Research

Per capita biscuit consumption in India has increased by 16% over the last
five years. However, it is far behind developed economies like the US, UK
and other developing Asian economies like Japan and Sri Lanka. Though
there is huge headroom for growth in India for the biscuit market, it is a
complex market that requires regional customisation.

Exhibit 5: Per capita consumption of biscuits (in kg)

India

Sri Lanka

Japan

USA

UK

0 2 4 6 8 10 12 14 16

Source: RHP, ICICI Direct Research

Organised biscuit market overview

The Indian biscuit market is dominated by branded play. The penetration of
branded biscuits is expected to continue to grow on account of increasing
consumer preference and spending power. Non-branded biscuit is
dominated by small bakery units, cottage and household type
manufacturing units, which thrive on catering to local taste and close
relationship with retailers. Non-branded biscuits also offer higher margins
than branded biscuits to retailers. Growth rate for branded biscuits in terms
of value was greater than volume in FY15-20. It is driven by movement of

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consumers towards mid and premium biscuits. The Indian branded biscuits
market is expected to grow at 9.2% CAGR in the next five years.
Exhibit 6: Organised biscuit market in India (in | crore)
70000
59000
60000

50000
38000
40000

30000 23000
20000

10000

0
2015 2020E 2025P
Source: RHP, ICICI Direct Research

The Indian biscuit market is dominated by lead brands like Britannia, Parle
and ITC, which has 65% of market share. While Parle derives a large portion
of its revenues from mass product Parle-G, the company has the largest
market share by volume on the back of Parle-G brand. Britannia’s revenue is
driven by mid-premium and premium products. The biscuit market in India
is largely classified on the back of two factors. On the basis of product type,
the market is classified into Glucose and Non-Glucose (NG) segments. On
the basis of price, it is classified into mass, mid-premium and premium
segments. In the last five years, the NG market growth has outpaced the
Glucose market growth. Non glucose segments mirrors mid-premium and
premium price points whereas Glucose segment mirrors mass price point.

Exhibit 7: Market share in organised biscuit category

Market share (%)

30% 28%

1%

4% 11% 27%

Britannia Parle ITC Anmol Cremia Others

Source: RHP, ICICI Direct Research

Total market size of mid-premium and premium biscuits is | 32100 crore that
has grown at 12.2% CAGR in the last five years. The category has shown a
growth rate much higher than the mass category. The market for mid-
premium and premium biscuits is expected to grow to | 50,400 crore by
FY25 at 9.5% CAGR, which is faster than the overall branded biscuit market
growing at 9.2%.

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Bread & other bakery product category

The bread and buns retail market in India is valued at | 5000 crore in FY20.
It is expected to continue to grow at 9% CAGR to | 7600 crore by FY25. The
growth is expected to be mainly assisted by increase in disposable incomes,
change in lifestyle and preferences of the consumers. The demand for
breads is concentrated mainly around metros, tier I and larger tier II cities
due to higher disposable incomes and changing meal preferences.
Exhibit 8: Indian bread & buns retail market (in | billion)
80
70 15
60
50
7.5
40
30 4 61
20 42.5
29
10
0
2015 2020E 2025P

Mass Segment Premium & Super Premium Segment

Source: RHP, ICICI Direct Research, IQVIA MAT March 2015-20

Bread can be classified based on the ingredients and price. Mass bread
segment primarily comprises white/sandwich bread made up of refined
wheat flour (maida). The premium bread segment has emerged over the last
15 years. This comprises products related to health and wellness such as
fortified white breads, whole wheat/brown or alternative grain variants of
breads, milk and fruit breads and specialty products such as pizza bases,
burger buns and hot dog buns. Breads are sold in packaged and pre-sliced
loaf forms with 350 gm and 400 gm as most common pack sizes. Super-
premium bread segment comprises exotic and specialty breads such as pita
bread, focaccia, ciabatta bread and sour dough breads. These are artisanal
products made by established bakers and retailed at their own bakeries and
selected modern retail outlets and Grade A stores. Though the super-
premium category currently has a very small share in the total bread market,
it is poised to grow steadily given the growing influence of international
cuisines and the growing number of premium bakeries. Many industrial
manufacturers have also come out with super-premium variants.

Exhibit 9:Market share in bread category (%)

22%

38%

13%

6% 16%
5%

Britannia Bonn Modern foods English Oven Harvest Gold Others

Source: RHP, ICICI Direct Research

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Exhibit 10:Bread market still largely unorganised

Bread sales break-up

Branded 45%
Unbranded 55%
Source: RHP, ICICI Direct Research

Per capita consumption of breads

The average per capita consumption of an Indian consumer is increasing.
The per capita consumption has increased from 1 kg per annum in 2015 to
1.4 kg per annum in 2020. The average per capita consumption of bread in
developed countries like the UK, Germany, US and Singapore is much
higher than India. While the average per capita bread consumption in India
is estimated to be ~1.4 kg in 2020, it has immense growth opportunity.
Exhibit 11: Per capita consumption of bread (in kg/year)

2.5
2.0
2.0

1.5 1.4

1.0
1.0

0.5

0.0
2015 2020E 2025E

Source: RHP, ICICI Direct Research

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 IPO Review | Mrs. Bectors Food ICICI Direct Research

Investment Rationale
Leading brand of biscuits & bakery products in North India
MBFS is one of the leading companies in the premium and mid-premium
biscuits segment in North India and sells products under flagship brand ‘Mrs
Bector’s Cremica’. It is among the top two Indian biscuit manufacturers in
the premium and mid-premium biscuits segment in Punjab, Himachal
Pradesh, Ladakh and Jammu and Kashmir. In FY20, it had a market share of
4.5% of the premium and mid premium biscuits market in North India. Its
customers associate the brand ‘Mrs Bector’s Cremica’ with high quality
premium and mid-premium biscuits that incorporates quality, taste and
value. The brand recall is enhanced through arrangements with certain
preferred retail outlets, which enhance brand visibility and presence in their
shops by displaying products prominently in their shelves. In H1FY21, the
company had a network of 4,422 preferred outlets. The company is focusing
on digital marketing initiatives such as social media integration, influencer
marketing and content marketing. It has also started brand promotions in
various e-commerce channels for biscuits and bakery products and are
listed with various e- commerce platforms in India.
Leading exporter of biscuits
MBFS is one of the leading exporters of biscuits from India, with ~12% share
of the Indian biscuit export market in 2019. It contributes more than 50% by
value of biscuit exports from India to countries like South Africa and Uganda
and more than 25% by value of biscuit exports from India to Canada. In
FY20, it exported biscuits to 64 countries, across Central and South America,
Europe, North America, East and South Africa, Australia, MENA region and
Asia to various retailers, distributors and buying houses such as Monteagle
International (UK) Ltd, Lulu Hypermarket Trading Co, E-Mart Inc, Atlas Global
(HK) Ltd, Omni Trade Services Ltd, Universal Trade Ltd and World Wide
Imports (2008) Ltd. The company exports various types of cookies such as
Danish cookies, choco chip cookies and centre filled cookies, creams,
crackers and some glucose biscuits under flagship brand ‘Mrs Bector’s
Cremica’. It manufacture wide range of biscuits for international retail chains
under their private labels. Revenue from the export of biscuits accounted for
| 167.7 crore in FY20. Price realisation from sales of biscuits (exports) was
| 94.3 per kg and has grown at 7.9% CAGR during FY18-20.
Exhibit 12: Plant wise capacities & utilisation
Phillaure Tahliwal Rajpura Greater Khopoli Bangluru
Manufacturing Facilities Capacity as of March 2020 (in tonne)
(Punjab) (HP) (Punjab) Noida (UP) (Maharashtra) (Karnataka)

Biscuit - Domestic & exports 26400 34200 14600 - - -

Utilisation (%) 91% 72% 40% - - -
Biscuit - Contractual 26400 - 1000 - - -
Utilisation (%) 89% - 80% - - -
Breads & other bakery products (in thousand packs) - - - 65903 10937 7762
Utilisation (%) - - - 80% 62% 18%
Buns (in thousand packs) - - - 170755 170755 93139
Utilisation (%) - - - 81% 53% 51%
Frozen Products (in thousand packs) - - - 12193 - -
Utilisation (%) - - - 36% - -
Source: RHP, ICICI Direct Research

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 IPO Review | Mrs. Bectors Food ICICI Direct Research

Strong distribution network

The company’s extensive sales and distribution network allows it to reach a
wide range of consumers and ensures effective penetration of its products
and marketing campaigns. Its sales & distribution network is strategically
spread across different states in North India and has a strong outreach in
certain urban and semi urban markets. It distributes biscuits across 23 states
in India, through a widespread network of super stockists and distributors.
Its distribution network comprising 196 super stockists and 748 distributors
supplying to wide range of customers through 458,000 retail outlets. The
company also entered into arrangements with certain preferred retail
outlets, which enhance brand visibility and presence. In H1FY21, it had a
network of 4,422 preferred retail outlets. The company’s distribution
network is managed by an in-house sales team of over 403 personnel.

MBFS directly supplies biscuits to institutional clients like CSDs, Indian

Railway canteens and stores in North India. It is the largest suppliers of
biscuits to CSD and an approved and listed supplier for Indian Railways with
a strong presence across Railway station canteens and their stores in North
India. It exports biscuits to 64 countries through strong global distribution
network and tie-ups with retailers, distributors and buying houses such as
Monteagle International (UK) Ltd, Lulu Hypermarket, E-Mart, Atlas Global
(HK), Omni Trade Services, Universal Trade and World Wide Imports (2008).
The company sells bakery products for retail customers under brand the
‘English Oven’ through modern trade, general trade channels and various e
commerce platforms.

The bakery products for retail customers were sold through 191 distributors
and over 14,000 retail outlets in Delhi NCR region, Mumbai, Pune and
Bengaluru through direct sales to supermarkets, departmental stores and
distributors. Recently, it also started selling products through various e-
commerce platforms in India, multiplexes such as PVR and cloud kitchens
such as Rebel Foods. It is one of the few bakery companies in India that can
handle fresh, chilled and frozen products. This model enables it to distribute
products across India.

Exhibit 13:Retail touch points in North India

Brands Retail Points in North India (in million)
Parle 1.7 million
Britannia 1.4 million
ITC 0.9 million
Anmol 0.8 million
Cremica 0.4 million
Source: RHP, ICICI Direct Research

Focus on increasing brand awareness

The company seeks to spend resources to strengthen brand ‘Mrs Bector’s
Cremica’ and ‘English Oven’. Its ability to differentiate its brand and products
from competitors through marketing & brand awareness programmes is an
important factor in attracting consumers. It also enter into arrangements
with preferred retail outlets and brand consultants, which helps enhance
brand visibility. It also participate in international trade fairs that provide an
opportunity to display wide range of product portfolio and enhance brand
strength. For the bakery business, MBFS focuses on leveraging
opportunities in newly launched cities such as Pune and expanding product
portfolio by introducing niche products to retail customers such as sub
breads, pizzas, garlic breads, cheese garlic bun fills and frozen cookies. It
plans to focus more on digital marketing initiatives such as social media
integration, influencer marketing and content marketing. The company
believes the scale of its business provides the ability to increasingly focus
on branding and promotion to enhance visibility, market share and growing
needs and preferences of customers across various channels.

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Key risks & concerns

Export benefits may end under MEIS
The company is currently availing benefits under certain export promotion
schemes, including Duty Free Import Authorisation scheme (DFIA Scheme),
Merchandise Exports from India scheme (MEIS) and Export Promotion
Capital Goods (EPCG) license. As per the licensing requirement under the
said schemes, the company is bound by certain export obligations, which
require it to export goods of a defined amount, failing which, it may have to
pay the government, a sum equivalent to the duty benefit enjoyed under the
said schemes along with interest. Any reduction or withdrawal of benefits or
its inability to meet any of the conditions prescribed under schemes would
adversely affect business and financial condition.
Inability to expand manufacturing
The company manufactures and sells a range of biscuits and bakery
products primarily catering to retail consumers around North India and
certain institutional customers on a pan-India basis. The biscuits are
currently manufactured in facilities in Phillaur, Rajpura (Punjab) and Tahliwal
(HP). Given that these biscuit manufacturing facilities are all located in North
India, the company is currently restricted to selling biscuits in 11 states
around North India. Significantly high transportation costs associated with
distribution of such products to farther destinations precludes it from a pan-
India business network for biscuits. It manufactures bakery products in
savoury and sweet categories such as breads, buns, pizza bases, frozen
doughs and pizzas, cakes, cookies and cupcakes in manufacturing facilities
located in Greater Noida (Uttar Pradesh), Khopoli (Maharashtra) and
Bengaluru (Karnataka). As these bakery products are inherently perishable
in nature, having a shelf life of around three to four days, the company may
not be able to transport these products over longer distances.

Discontinuance of supply contract to QSRs

MBFS supplies buns and other bakery frozen products to institutional
customers and it is the largest supplier of buns to reputed multinational QSR
chains. The company supply buns to various international QSR chains in
India, such as Burger King India, Connaught Plaza Restaurants, Hardcastle
Restaurants and Yum! Restaurants. However, it does not have any long term
supply agreements with any of these QSR customers. The supply of
products to such QSR customers is typically contingent on demand arising
on a day to day basis, which is subject to fluctuation. Absence of any
contractual exclusivity with respect to business arrangements with such
QSR customers poses a threat on the ability to be able to continue to supply
products to these QSR customers in the future. Additionally, any change in
preference of supplier by these QSR customers due to any existing peer or
entry of any new peer may have a material adverse effect on business.
Supply & transportation disruptions
The company uses third-party transportation providers for all of its product
distribution and raw materials procurement with respect to biscuits. This
makes it highly dependent on various intermediaries such as international
and domestic transportation companies, container freight station operators
and shipping lines. Further, export activities highly dependent on ports and
railways. Factors like disruption of transportation services due to weather-
related problems, strikes, accident or Covid 19 lockdown could impair the
ability of suppliers to deliver raw materials and company’s ability to deliver
processed products to its consumers. MBFS currently transports burger
buns to various QSRs on a pan-India basis either through its own or third
party transportation service providers. These products are temperature
sensitive and, therefore, should be transferred through specific vehicles
such as reefer vans. The company’s business performance can be impacted
by disruption of supply or any adverse impact on the quality of raw material
and final product.

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Financial Summary
Exhibit 14: Profit & loss statement (| crore)
Revenue (| crore) FY18 FY19 FY20 H1FY20 H1FY21
Revenue from operations 694.0 783.7 762.1 364.6 431.0
Other income 1.8 2.4 2.9 1.6 7.6
Total revenue 695.8 786.0 765.0 366.2 438.6

Cost of materials consumed 382.8 424.0 407.5 193.6 224.8

Employee expense 91.3 109.7 117.9 57.3 62.1
Other expenses 131.1 153.8 144.0 74.7 72.0
Excise Duty 3.3
Total Expenses 608.5 687.6 669.3 325.6 358.9
EBITDA 85.5 96.1 92.8 39.0 72.1
Finance costs 6.1 12.7 15.0 7.9 5.5

Depreciation and amortisation expense 28.3 35.2 41.5 20.7 22.2

Profit before tax and exceptional items 52.8 50.6 39.1 12.0 52.1
Share of net profit of associate (equity methord) 0.0 0.1 0.0 0.1 0.1
Profit before tax 52.8 50.5 39.1 11.9 52.0
Current tax 16.5 11.8 12.9 6.1 12.2
Defered tax 0.5 5.7 -4.1 -4.2 1.1
Total Tax 16.9 17.5 8.8 1.9 13.3
Profit after tax 35.9 33.0 30.3 10.0 38.7
Source: RHP, ICICI Direct Research

Exhibit 15: Balance Sheet (| crore)

Balance Sheet (| crore) FY18 FY19 FY20 H1FY20 H1FY21
Shareholders’ funds 266.6 294.8 319.5 304.4 357.8
Share capital 57.3 57.3 57.3 57.3 57.3
Reserves and surplus 209.3 237.5 262.2 247.1 300.5
Non-current liabilities 122.4 141.2 114.3 123.4 130.4
Long-term borrowings 94.7 107.2 85.653 93.9 101.2
lease liability 4.2 2.7 1.538 1.9 1.2
Other Current Liabilities 9.7 16.4 13.998 13.6 16.3
Other non-current liabilities 13.7 14.9 13.140 14.0 11.7
Current liabilities 122.0 141.1 132.1 132.7 120.6
Short-term borrowings 26.3 32.7 18.1 28.5 0.0
Trade payables 39.0 48.8 47.0 42.9 61.6
lease liability 1.4 1.5 1.1 1.6 0.7
Other financial liability 29.8 29.7 34.5 29.3 29.6
Provisions 12.7 14.2 15.7 14.8 3.9
Other current liability 10.4 12.9 13.8 14.3 18.6
Current tax liability 2.6 1.3 1.9 1.3 6.2
Equity & Liabilities Total 511.1 577.0 565.9 560.6 608.7
Tangible assets 240.6 344.3 337.6 345.1 327.0
Goodwill on consolidation 0.4 0.4 0.4 0.4 0.4
Capital work in progress 92.1 15.6 6.7 6.6 28.9
Intangible assets 18.4 16.8 15.1 15.9 14.5
Other Tangible assets & Investment 5.7 5.0 4.4 4.8 4.2
Financial Assets 4.3 3.7 3.6 3.4 3.6
Other Non-current assets 6.6 4.1 17.4 2.9 22.3
Deferred tax assets (net) 2.9 4.2 4.3 5.7 3.1
Current assets
Inventories 35.3 35.3 43.4 41.6 54.4
Investments 0.0
Trade receivables 69.4 100.3 75.0 87.7 72.9
Cash and bank balances 10.7 12.0 30.2 13.4 47.7
Other Financial assets 9.7 15.5 18.3 22.1 20.9
Other current assets 14.9 20.0 9.3 11.1 8.8
Assets Total 511.1 577.0 565.7 560.6 608.7

Source: RHP, ICICI Direct Research

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 IPO Review | Mrs. Bectors Food ICICI Direct Research

Exhibit 16: Cash flow statement (| crore)

Particulars
Cash Flow (| crore) FY18 FY19 FY20 H1FY20 H1FY21
PBT 52.8 50.7 39.2 12.1 52.1
Depreciation 28.3 35.2 41.5 20.7 22.2
Operating profit before working capital changes 87.9 102.3 100.8 44.5 77.4
Changes in working capital -25.9 -33.9 21.0 0.7 -2.8
Income tax paid -15.5 -14.4 -12.4 -7.6 -6.7
CF from operating activities 46.5 54.0 109.5 37.6 68.0
(Purchase)/Sale of Fixed Assets -117.6 -61.3 -41.0 -14.2 -36.1
Interest Received 0.6 0.6 0.8 0.4 0.6
Investment in bank deposits 5.0 -0.6 -3.0 -4.5 -21.0
CF from investing activities -112.0 -61.3 -43.2 -18.3 -56.5
Proceeds from issue of share capital 0.0 0.0 0.0 0.0 0.0
Buyback of shares
Adj. of Loan 67.8 25.3 -30.9 -14.5 -9.5
Interest Paid -5.7 -12.1 -15.0 -7.9 -5.4
Dividends Paid -4.2 -6.3 -5.2 0.0 0.0
payment of lease liability
CF from financing activities 57.8 6.9 -51.1 -22.4 -15.0
Net Cash Flow -7.7 -0.3 15.2 -3.2 -3.5
Opening Cash 13.6 5.9 5.5 5.5 20.7
Closing Cash Flow 5.9 5.5 20.7 2.3 17.2
Source: RHP, ICICI Direct Research

Exhibit 17: Key Ratios

Ratio Sheet FY18 FY19 FY20 H1FY20 H1FY21
Per share data (|)
Diluted EPS 6.3 5.8 5.3 1.7 6.8
Cash EPS 11.2 11.9 12.5 5.4 10.6
BV per share 46.6 51.5 55.8 53.2 62.5
Cash Per Share 1.9 2.1 5.3 2.3 8.3
Operating Ratios (%)
Gross Profit Margins 44.8 45.9 46.5 46.9 47.8
EBITDA Margins 12.3 12.3 12.2 10.7 16.7
PAT Margins 5.2 4.2 4.0 2.7 9.0
Inventory days 18.6 16.4 20.8
Debtor days 36.5 46.7 35.9
Creditor days 20.5 22.7 22.5
Return Ratios (%)
RoE 14.3 11.8 9.9 6.7 21.7
RoCE 18.0 15.9 12.7 9.3 24.2
Valuation Ratios (x)
EV / Sales 2.5 2.3 2.3
EV/EBITDA 20.6 18.4 19.0
Market Cap / Sales 2.4 2.1 2.2
P/E 46.9 50.9 55.5
Price to Book Value 6.3 5.7 5.3
Solvency Ratios
Debt / EBITDA 1.4 1.5 1.1
Debt / Equity 0.5 0.5 0.3 0.4 0.3
Net Debt/ Equity 0.4 0.4 0.2 0.4 0.1
Current Ratio 1.1 1.3 1.3 1.3 1.7
Quick Ratio 0.9 1.0 1.0 1.0 1.2
Asset Turnover 1.9 2.0 2.0
Source: RHP, ICICI Direct Research

ICICI Securities | Retail Research 12

 IPO Review | Mrs. Bectors Food ICICI Direct Research

RATING RATIONALE
ICICI Direct endeavours to provide objective opinions and recommendations. ICICI Direct assigns ratings to
companies that are coming out with their initial public offerings and then categorises them as Subscribe, Subscribe
for the long term and Avoid.

Subscribe: Apply for the IPO

Avoid: Do not apply for the IPO
Subscribe only for long term: Apply for the IPO only from a long term investment perspective (>two years)

Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com

ICICI Direct Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com

ICICI Securities | Retail Research 13

 IPO Review | Mrs. Bectors Food ICICI Direct Research

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ICICI Securities | Retail Research 14