Short-term investors could consider booking profits in Mrs Bectors Food Specalities, whose share prices have about doubled compared to issue prices, while long-term investors can continue to hold on.
The stock listed at Rs 500 today, compared to its issue price of Rs 288 (a 73.6 percent premium) before going onto hit Rs 601, or a 20 percent upper circuit compared to the listing price. It gave up some gains but is still trading at about Rs 590, or more than double the issue price, at the time of writing.
Mrs Bectors Food lists at Rs 500 per share on NSE, a premium of over 73% to issue price
“Mrs Bectors Food Specialities has a strong brand value. The positive momentum in the stock price is expected to continue in the long run as the company has a unique business and different segment in the FMCG space,” said Vinod Nair, Head of Research, Geojit Financial.
Nair is of the view that the company gives a good investment opportunity to mutual funds and retail investors.
“The stock is trading at 57.2x PE on a trailing basis. Although we are bullish on Mrs Bector long term prospects, at these valuations, we believe there are better investment options available in the FMCG space in the market. Short-term investors can book profit,” said Keshav Lahoti, Associate Equity Analyst, Angel Broking.
Mrs. Bectors Food Specialties is one of the leading companies in premium and mid-premium biscuits and premium bakery segments in North India – the Company’s biscuit products are sold under the flagship brand “Mrs. Bector’s Cremica”, and the premium bakery products are sold under the brand “English Oven”.
The flagship brand “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 premium bakery brands in Delhi NCR, Mumbai and Bengaluru.
It has raised Rs 540.54 crore via public issue during December 15-17 including fresh issue of Rs 40.54 crore. The company said it will utilise fresh issue proceeds for financing the project cost towards expansion of the Rajpura manufacturing facility by establishing a new production line for biscuits.
The company has a large base of reputed institutional clients. It is the largest supplier of buns in India to reputed QSR chains such as Burger King, McDonald’s, and KFC. It also sells a variety of its bakery and frozen products to cloud kitchens such as Rebel Foods and multiplexes such as PVR.
Mrs Bectors Food has a market share of around 4.5 percent in the premium and mid-premium biscuits segments.
The company has exhibited EBITDA growth of 84.94 percent from H1FY20 to H1FY21 due to revenue growth of 18.2 percent and an expansion in EBITDA margin from 10.71 percent in H1FY20, to 16.76 percent in H1FY21.
As a result, the company’s has seen its EPS increase from 5.30 in FY20 to 13.56 for H1FY21, and its RoNW expand from 9.52 percent in FY20 to 19.61 percent in H1FY21.