Rationale

While arriving at the ratings, ICRA has taken a consolidated view of Mrs Bectors Food Specialities Limited (MBFSL) and Bakebest Foods Private Limited (BFPL), commonly referred to as the Group, given the close business, financial and managerial linkages among the entities. The rating action factors in ICRAs expectation of continued healthy operational performance of Mrs. Bectors Food Specialities Limited (MBFSL), supported by its established brands in biscuits and bakery segments. Moreover, the extensive experience of its promoters in the industry, its well-entrenched distribution network and wide market reach across northern India provide further comfort. The ratings also factor in MBFSLs established relationships with reputed institutional clients for biscuit exports under private labelling, and large quick service restaurant (QSR) customers for its institutional bakery items (buns and breads). In FY2025, the company registered a healthy growth of 15% in its operating income, led by a strong YoY segmental growth in both its bread and bakery segments. The revenue growth moderated to around 8% in 9M FY2026 owing to weak demand from export markets(impacted by USA tariffs), leading to lower-than-expected growth in biscuits segment. The ongoing capacity enhancements in both breads and bakery businesses is expected to generate adequate surplus capacity for the company to scale up over the medium term as well as regionally diversify its presence. ICRA expects MBFSLs revenues to grow at moderate pace over the medium term, drivenby its increasing distribution reach, with focus on expansion in western and southern regions. The operating profit margins are expected to remain at 12-13.5%, as benefits of operating leverage will be offset to an extent by the companys investments towards marketing and brand-building and elevated raw material prices in the near term. A sustained revenue growth, together with healthy profitability, inherently low working capital requirements and phased capacity expansions have supported the companys cash flows over the years, keeping its reliance on debt limited. The company successfully completed its qualified institutional placement (QIP) in September 2024, which resulted in the infusion of Rs. 400 crore. The proceeds from the same have been used for debt prepayment and towards part-funding of the ongoing capex. Along with sustained accretion to reserves, the proceeds from the QIP improved the companys capitalisation and coverage metrics. The sustenance of healthy business performance is expected to help the entity maintain strong financial risk profile going forward. The ratings also continue to draw strength from the companys well-recognised brands in northern India, its strong distribution network and its established relationships with reputed institutional clients for biscuit exports, sales of buns and private labelling. The extensive experience of MBFSLs promoters in the food-processing industry, its regionally diversified manufacturing base across multiple states and favourable growth prospects for the industry provide further comfort. The ratings, however, remain constrained by exposure to stiff competition from branded as well as local/regional players, vulnerability of the companys profitability to adverse movements in raw material prices, and high quality and reputational risks, given its presence in the food industry. Despite efforts made in recent years to regionally diversify its presence, the company continues to derive most of its revenues from the northern Indian states, exposing it to concentration risk. The ratings continue to be constrained by its exposure to stiff competition from branded as well as local/regional players, vulnerability of the companys profitability to adverse movements in raw material prices, and high quality and reputational risks, given comfortable, aided by healthy cash accruals, coupled with low external debt and a healthy liquidity position. MBFSLs presence in the food industry. The Stable outlook on the long-term rating reflects ICRAs expectation that the credit profile of the entity will remain

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