Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mrs Bectors Food Specialities Ltd (BOM:543253, Financial) achieved a 19.7% increase in revenue and a 21.4% increase in gross profit for Q2 FY25.
- The company successfully completed an INR400 crore capital raise, which will support strategic initiatives including debt liquidation and investments in new facilities.
- Credit ratings from CRISIL and ICRA have been upgraded, reflecting a strengthened financial and business profile.
- The company is capitalizing on premiumization trends and expanding its distribution reach, which is expected to drive future growth.
- Export business continues to grow steadily, contributing positively to the company's overall performance.
Negative Points
- The macroeconomic environment remains challenging with subdued consumption patterns due to extreme weather and inflation.
- Inflationary pressures, particularly from commodity price increases, are expected to pose significant challenges moving forward.
- Other expenses have increased significantly, primarily due to higher freight costs associated with increased export contributions.
- Gross margins have slightly decreased quarter-on-quarter due to inflationary trends in commodity prices.
- The domestic biscuit market is experiencing muted demand, impacting overall growth in this segment.
Q & A Highlights
Q: Can you explain the significant increase in other expenses this quarter?
A: The increase in other expenses is primarily due to higher freight costs, driven by increased export contributions and elevated freight rates due to geopolitical issues. These expenses are expected to normalize once the situation stabilizes. - CFO
Q: Despite lower CPI in July and August, why have gross margins decreased slightly?
A: The decrease in gross margins is due to inflationary pressures on commodity prices, particularly in recent months. We anticipate more challenging times ahead due to these inflationary trends. - CFO
Q: How is the domestic biscuit demand performing, and what are the growth expectations?
A: Domestic biscuit demand has been muted, reflecting broader FMCG trends. However, we have seen some positive signs of growth in Q2 over Q1, and we expect this trend to continue improving gradually. - CEO
Q: What is the impact of rising input costs on your pricing strategy?
A: We are working on implementing price increases to offset rising input costs, particularly in the biscuit segment. However, this process takes time due to existing inventory and market conditions. - CEO
Q: Can you provide an update on the Project Impact 1.2 initiatives?
A: Project Impact 1.2 is progressing well, focusing on cost efficiencies across manufacturing, logistics, and revenue management. The full impact will be realized in the next financial year, with ongoing efforts to embed these efficiencies into our operations. - CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
