“Mrs.

Bectors Food Specialities Limited

Q1 FY2022 Earnings Conference Call”

August 12, 2021

MANAGEMENT: MR. ANOOP BECTOR – MANAGING DIRECTOR &

PROMOTER - MRS. BECTORS FOOD SPECIALITIES
LIMITED
MR. ISHAAN BECTOR – WHOLE TIME DIRECTOR -
MRS. BECTORS FOOD SPECIALITIES LIMITED
MR. SUVIR BECTOR – WHOLE-TIME DIRECTOR -
MRS. BECTORS FOOD SPECIALITIES LIMITED -
MR. PARVEEN GOEL – WHOLE TIME DIRECTOR &
CHIEF FINANCIAL OFFICER - MRS. BECTORS FOOD
SPECIALITIES LIMITED
MR. DEEPAK JAIN – HEAD FINANCE & CORPORATE
STRATEGY - MRS. BECTORS FOOD SPECIALITIES
LIMITED
MR. GURPREET SINGH AMRIT – CHIEF MARKETING
OFFICER - MRS. BECTORS FOOD SPECIALITIES
LIMITED

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 Mrs. Bectors Food Specialties Limited
August 12, 2021

Moderator: Ladies and gentlemen, good day and welcome to the Q1 FY2022 Earnings Conference Call of Mrs.
Bectors Food Specialities Limited. As a reminder all participant lines will be in the listen-only
mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing “*”
then “0” on your touchtone phone. Please note that this conference is being recorded. I now hand
the conference over to Mr. Anoop Bector, Promoter and Managing Director. Thank you and over
to you, Sir!

Anoop Bector: Thank you so much. Good evening everyone. I hope you all are keeping safe and healthy during
these times. Today on the call, I am joined by Mr. Ishaan Bector – Whole Time Director, Mr. Suvir
Bector - Whole Time Director, Mr. Parveen Goel – Whole Time Director & Chief Financial Officer
of the company, Mr. Gurpreet Singh – Chief Marketing Officer and Mr. Deepak Jain – Head
Finance & Corporate Strategy. We have uploaded our investor deck and results highlight on the
stock exchanges and the company website. I hope everybody had an opportunity to go through the
same.

The outbreak of second wave of COVID-19 impacted our business. Many general trade and
modern retail stores were closed in April and May whereby adversely impacting sales. Overcoming
these challenges, the company recorded a 12% growth in revenues with accelerated growth in the
bakery segment, retail as well as institutional. Business resumed to reasonable levels only from
early June 2021 post the relaxation and lockdown restriction the company has been doing good in
all segments.

Coming to segment wise our company saw degrowth in the domestic biscuit segment. Q1 of the
last year we saw growth of over 35% in this category mainly due to pantry loading and limited
availability of other food products during COVID lock down last year. This year many general
trade and modern retail stores were closed in April and May 2021 whereby adversely impacting
distribution and revenues domestically.

To expand our premium range, we are launching non-stop potato cracker, these will be thin and
crispy with a focus on health benefits as these will be baked and not fried. This will be launched at
a MRP of Rs.20 for 75 grams’ packet. As a strategy going forward we are expanding the sales of
our biscuits by emphasizing on introducing and marketing are premium biscuits, increasing our
market share by increasing brand awareness through digital channels and building visibility in
retail stores through in-store, branding activities.

Exports have seen robust growth during Q1 FY2022. Our company is one of the leading exporters
of biscuits from India having 12% share of the total exports of biscuits. Approximately 50% of the
exports is under our own brand, Cremica, our focus is to increase penetration in select export
markets like south, central, north America, Australia, Asia and increase premiumization of our
products there. We are in the process of setting up a subsidiary in UAE to cater to the MENA and
African market better.

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Coming to bakery division, retail bakery has grown on double digit with a continuous focus on
increasing distribution and premiumization of our products. The company is planning to launch
roasted garlic SUB footlong at Rs.50 for 150 gram, roasted garlic SUB footlong in addition to our
range of footlong bread offering like sub sandwich at home.

We are one of the few bakery companies in India that can handle fresh and frozen products which
enables the company to distribute its products across India with a focus on quality and consistency.
The company aims to cater to wide variety of retail customers by introducing new products new
niche product variants to all our retail customers such as sub bread, footlong bread, pizzas, garlic
bread with a target to expand distribution network and also increase penetration in tier 1 and tier 2
cities. We plan to focus more on digital marketing initiatives such as social media integration,
influencer marketing and content marketing. Institutional bakery sales have also started picking up
pace as restaurants have opened for deliveries and dine after relaxation of COVID-19 restrictions.
Institutional bakery business grew at a faster rate with the low base of Q1 FY2021. We expect this
business to resume normalcy in the coming months.

We have seen good momentum in the modern trade and e-commerce segment too. We are
introducing large and mid size pack of existing high selling products based on buying patterns and
regional preferences for sales through modern trade. We have started our brand promotion in
various e-commerce channels for our biscuits and bakery products and our listed with leading e-
commerce platforms in India.

During the last quarter our margins were lower on an account of increased raw material, packaging
and logistic cost and also lower revenues on an account of COVID-19. In the last quarter, we took
a price increase of approximately 4% and further price rise shall be coming in, in the next quarter
and this will help us reach our EBITDA margins of 14% to 15% for the full year.

On our capex plans, the company is expanding one bakery line and bread line at Greater Noida,
Uttar Pradesh, which will start in Q3 FY2022. The capital raise of 40.54 Crores, which will be
utilized for one biscuit line at Rajpura, and commercial production of same start from April 2022.
As we mentioned in our last from earning call to invest in solar energy division, we are expecting
solar plants will be operational from Q3 FY2022 onwards, which will help us in reduction of
energy cost.

Coming to our branding and marketing strategy, we have been marketing across channels to
increase our brand awareness through advertising in print media, digital and outdoor promotional
campaigns. We have also entered into arrangements with preferred retail outlets which will help
us in enhancing our brand visibility. We believe that a strong and recognizable brand is the key
strength in our industry which increases customer confidence and influences purchase this
decision. We have developed our recipes and products based on extensive understanding of our
key market for our biscuits and bakery products with a focus on improving the quality standards.

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We believe that our focus on quality, our product range and effective pricing have enabled us to
develop strong brand recognition and consumer loyalty in our key domestic and export markets.
To end, I would like to thank all the stakeholders- our employees, suppliers, and our customers
which have all supported us during this pandemic.

With this I would like to hand over to Mr. Deepak Jain our Head of Finance and Corporate Strategy
for the financial highlights. Thank you so much.

Deepak Jain: Thank you, Anoop, Sir. Coming to our Q1 FY2022 performance revenue stood at Rs.226 Crores
versus Rs.203 Crores registering a growth of 12% on year-on-year basis. Revenue from the biscuit
segment has grown by 2% to Rs.144 Crores as compared to Rs.141 Crores in Q1 FY2021.
Revenues from bakery segment have grown by 37% to Rs.69 Crores as compared to Rs.50 Crores
in Q1 FY2021. EBITDA has degrown by 15% to Rs.29 Crores. During the last quarter the
company has seen increased prices of raw materials especially palm oil prices, packing materials
which has affected our gross margins. Our EBITDA for the quarter stood at 12.9%, price increase
of 4% already taken in Q1 FY2022 and further price rise in coming quarter as well as cost
efficiency will help us to reach our EBITDA margin guidance of 14% to 15% for the full year.
Profit after tax for the quarter stood at Rs.13 Crores versus Rs.16 Crores in Q1 FY2021. PAT
margin for the quarter stood at 5.9%.

With this we will now open the floor for question and answer. Thank you.

Moderator: Thank you very much, Sir. Ladies and gentlemen, we will now begin the question and answer
session. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Alok Shah from Ambit Capital. Please go ahead.

Alok Shah: Sir, thank you for the opportunity. I have two questions, first is would it be possible to share biscuit
revenue break up into domestic and exports and likewise the bakery revenue into own labels in
international business, I believe we used to share that in earlier presentations?

Anoop Bector: In fact, last time also we had discussed this and reason which affecting our business and we
requested our investors that we shall not be sharing the individual information, so information shall
be available for both the biscuit category and the bakery category and we shall not be able to dwell
on the individual information.

Alok Shah: No problem, my second question was on the launch of the potato crackers, now most of the biscuit
players have launched ITC, Britannia everyone has launched it, but are you trying to hint that this
is your start of foray into the widest making market or would you still this is just one off and you
still prefer to remain in the biscuit segment that is it?

Anoop Bector: That is a great question, I mean what realizes that the product what we are producing is more
healthier and it is going to be big as compared to snack like a potato chips, so it is big and it has

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got a very nice taste to it and we have been developing this product for a bit of a long, but that is
definitely the delays because of COVID, but for North India we are amongst the first people
because the North India are market where we are going to be launching this product, this product
has yet to be launched by a few of these companies in these markets because they are launching it
in the other market and we definitely believe that biscuit is going to be going in the way going
forward with new innovations is going to be coming into snacking segment and this product we
are launching in two flavors, one is masala crackers and one is the pizza flavor, so these flavors
have been picked up from the chips segment, which are the most popular segments so yes, it could
be read as that, not that we are moving our interest to the snacking side, but yes, we have options
available to also launch healthy snacking options for our customers.

Alok Shah: Sorry, this is a followup on this, so this gets manufactured on the same extruded lines which are
there currently or do you have anything else for this?

Anoop Bector: This is from our Rajpura imported line, which we had put up, this comes from a biscuit line.

Alok Shah: That’s it from my side. Thank you very much.

Moderator: Thank you. The next question is from the line of Digant Haria from GreenEdge Wealth. Please go
ahead.

Digant Haria: Sir, my question is regarding the peak capacity utilization and the asset turn, so what could be our
peak revenue in all the capacities which are under construction right now once they hit on stream
and reach for utilization, so that my question number one, and number two, generally at the
company level what is the asset turn you target for example, if we are investing 100 Crores in a
plant and machinery, what is the bakery output and what is the biscuit output that we can get out
of that 100 Crores, so these are two question that I have?

Anoop Bector: On the total investments and the projects which are in the pipeline, so we have a bread line and a
bun line, which is under installation, where majority of the money has already been invested, which
is around Rs.70 Crores, this is in Greater Noida and also the 40 Crores of investment, which we
are putting up in the biscuit line in Rajpura overall put together we are expecting sales of
approximately Rs. 1500 Crores possibility and this also depend upon how premium products you
are making, like the potato cracker what we make, the margins are going to be higher, but the
output is going to be lower as and as you premiumize your products your margins become higher
but as a benchmark I should say that the total investment, which the company is going to be making
till March 2022, we shall be able to do a sale of around 1500 Crores.

Digant Haria: Thank you Sir, I get that. Sir, just on that second question which I had that you know let us say we
reach 1500 Crores number in another two to three years everything goes well and we the exact
number, then the next 100 Crores that we invest, what is the kind of output?

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Anoop Bector: There is no benchmark. let me make you understand this. I am giving it as an example right. If we
put up a line in Uttar Pradesh for a biscuit plant, the turnaround could be three to four times of your
investment, if in case bread plant, I put up a Indian bread plant, the turnaround could be three to
four times, but if I put a better bread line where there will be limited manpower used, my cost of
production will get much lower but the investment is higher and the returns are also higher so what
we are more interested is how is the return on capital employed going to be impact us in the next
four years.

Digant Haria: Thank you that is very clear, I get it that we do it on a return on capital basis and would that number
be around 15% to18% for us that any new investment that we do we at least try for that?

Anoop Bector: Our ROCE numbers Mr. Deepak can give a highlight on it, I think we are much above 15%
numbers.

Deepak Jain: Digant it will be more than 18% to 20% ROCE.

Digant Haria: Thank you so much. That was very clear. Thank you so much.

Moderator: Thank you. The next question is from the line of Vineet Mehta from Samiksha Capital. Please go
ahead.

Vineet Mehta: Thank you for the opportunity. I just have one question I mean to ask about that bread division,
currently we are only in Mumbai, Delhi and Bengaluru, so which other areas have been targeted
or our future growth plans?

Anoop Bector: The bakery industry for us is doing extremely well, English own brand has been recognized very,
very well, so we are contemplating the more plants coming in but yet no decisions have been made.
Yes, the way 30% growth and things like that are happening. We definitely would need expansion,
but we have a line which is getting commissioned within the next two months or three months and
once that is established we shall be for further the taking up calls in opening up more cities could
be Mumbai, further expansion because Mumbai is growing very well for us extremely good growth
numbers are coming in Mumbai, so we shall let you know shortly in case any further locations are
opening out.

Vineet Mehta: So, we are looking for it, right?

Anoop Bector: Yes, naturally because if we want to grow at a 30% pace you will need to look at it right. Not be
okay if you do not look at expanding, the opportunity which exists for the brand.

Vineet Mehta: Thank you. That is it from my end.

Moderator: Thank you. The next question is from the line of Milind Karmarkar from Dalal & Broacha. Please
go ahead.

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Milind Karmarkar: I had a couple of questions, one was on bakery and other was on biscuits. The new product which
are launching I think that is very similar or rather most of the other have launched or launching
this potato biscuits, they are very similar to the product by Bangladesh company called Pran, I
think it is called Potata and it has become extremely popular though price slightly lower than what
I can see in our presentation so just wanted to understand what kind of opportunity you see there
and do we have an advantage I mean do we in the sense thus the biscuit industry in India have an
advantage over the Bangladeshi product is what I also wanted to know, so this was my first question
on biscuits?

Anoop Bector: I can answer the first question then we can take your second question. I absolutely agree that the
inspiration of the products came to us from the brand product which is called Pran, but our
flavorings are very different, our flavorings are aligned to the Indian taste like I mentioned earlier
we have done testing on it which is like eating a chip but taste of our biscuits is very different vis-
à-vis other companies taste and one is masala and one is the pizza taste whereas the product which
is coming from Bangladesh is a potato biscuit, but has a very different offering to the customer and
on price front the Bangladeshi product is at Rs.25 for 100 grams, we are launching Rs.20 for 75
grams, so it is the same price, the price point is not different. Why we have done Rs.20 in India
Rs.20 is a better price point than Rs.25 and your outlet coverage in Rs.20 becomes much better so
that is the reason why we brought the weight down to 75 grams and at Rs.20 pack and on the
expectations Indians normally likes to eat snacking during evenings or in between the meals and
we feel snacking is going be a new experience for us but what we see from the market and as you
can see the competition we feel this product is going to be very well accepted in the market and
will definitely give a new dimension to the biscuit business for Cremica.

Milind Karmarkar: My second question was on the institutional side of the bakery business because most of the QSRs
I mean they may be working, but obviously the sales probably would be lower, they are lower, so
going forward as we have seen that slowly the restrictions are being lifted so what kind of growth
potential do you see on the institutional side of your bakery business?

Anoop Bector: On the institutional side, we have seen a very good response this time even during COVID, their
own service, was very good although the restaurants were shut, but however, we had seen
extremely good response and coming back to normalcy situation in the month of August and so we
are very close to normalcy, when I talked about normalcy is if it continues this way we shall be
touching the numbers of 2019-2020 and we look forward for good numbers in the QSR business.

Milind Karmarkar: Thank you.

Moderator: Thank you. The next question is from the line of Joy Shah from Suvidha Investment. Please go
ahead.

Joy Shah: Sir, my question have been answered, so thank you.

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Moderator: Thank you. The next question is from the line of Ayaz Motiwala from QRC Investment Advisors.
Please go ahead.

Ayaz Motiwala: Good evening, Sir. Thank you for taking my question. I had a question on the biscuit business in
particular and also your own brand Bakery as an extension, the opportunity for you is very large
in the biscuit as you bring out your market share of 4.5% North India and also your plants are
focused there, so there is a bit of a logistical challenge for you to move biscuits all the way to South
India that one would expect, but in terms of chipping away some market share or building blocks
so if you could throw some light on what are the measures you are taking to build on your strength
of a strong number two player in North India and sort of gradually going towards different parts of
the country, it would be very helpful to understand that and this potato based biscuit one of your
drivers to the change and movement towards gaining more share?

Anoop Bector: The company's strategy is very focused approach on a premium products, so the company plans to
be a strong player in North India with a clear focus on increasing distribution and increasing
penetration by selling more products in each shop and so what we call it lines per call so which
were actually earlier the lines were around three to four lines, we have already moved close to six
to nine per call, but we would like to move ahead, so clear instructions to our team are on increasing
distribution and even during the COVID times but our challenge was there people could not visit
the market, which we seen in the quarter June 30, 2021 performance. We have maintained our
number of total outlets covered which comes to us as per AC Nielsen so then the clear cut focus
for the whole team to work towards increasing the penetration so when I am talking about
premiumization that allows us the possibility to take our products to a larger reach. If I talk about
value cookies it is very difficult to take them longer because the logistic costs higher but on the
premium biscuits, it allows us the possibility to reach out so we are working out on a plan to
increase the distribution in other parts of the country already plans are under formulation not yet
finalized, but yes, the plans will be there to become a strong player in North Indian markets because
what is happening is that a very few companies in India are able to premiumize their product so
today for us in our cities we have enough premium products in place and therefore for us to be a
stronger player in North India makes us as an easier platform because all the work in the plants has
already been done and now it is more about putting the products on the distribution side and also
what we have done is, we are working through modern trade taking our products to pan India
operations and we are working with e-commerce retailers where we are working with them and
our products have been launched pan India with them, so these are great opportunities which allow
us to be available in pan India like Big Basket e-commerce platform as we have been approved by
Big Basket with 30 SKUs pan India, so this is the work what is happening so while focus is there
on North India, but work is also happening pan India to get into slowly and establish our base
through modern trade and through e-retailing.

Ayaz Motiwala: This is very helpful, if I can just dwell a little and appreciating the way you have explained it, so
in terms of you and the team when you internally sit down it sounds like achieving as you said
more lines for calls made by the salesperson or the visiting in existing outlets is more productive

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it seems then the easy wins that one would perceive from far off thinking that if you have to enter
Rajasthan or Gujarat from North India, there is an easy opportunity to tap the first 50000 outlets or
something or that sort, so in that trade off it is sounding that you think the existing market you
want to populate it and drive more purchases from the same outlets as you said versus getting into
thinly spread in more geographies and over and above that you think the online is the other ways
to approach it?

Anoop Bector: North India, when we are looking at 25 lakhs outlets and we are covering approximately 550000
outlets and there are two growth numbers, one is grow your 550000 to anther number and we have
already fixe d the targets and those targets the teams are working on. Second is that the shops what
you are doing what SKU you are selling we want to increase the number of SKUs on that shop, we
selling four product we are selling for Cremica want to take it to six products for Cremica. Now
that is an opportunity for the existing outlets and there is an opportunity for increasing our outlets
now when I go down to South India, my first root of introducing my product to my customers will
be through e-retailers and through modern trade this is what I was saying and when you are
launching pan India on Big Basket that gives the strength of the brand which it has that Big Basket
has approved us for pan India launch so which we were not ready earlier but now you we are
working on it and we are making ourselves available for this.

Ayaz Motiwala: The second question that had was on your own brand retail Bakery business so you are in the staple
white and brown breads and then you are into highly value added breads such as the sub example
that you gave for making sub sandwich which is at home or otherwise , so my question on that
which we have noticed in other parts of Asia is the possibility of doing sort of micro city level
bakery operation where it is entirely possible to have a very rapid turnaround with lesser
investments on a hub and spoke model kind of thing so is that something that you will go towards
to really drive this own brand business because that seems to be very promising?

Anoop Bector: Yes, you are absolutely right. Now if you look at when we launched Mumbai, we launched our
breads in Mumbai with an investment of Rs.2 Crores now at that time we launched with 5000
breads and few bakery products, today they are doing 45000 breads and other bakery products. We
probably need more than a lakh of bread now because that is the sort of response what we are
getting from Mumbai market. Now our Bengaluru bakery is the smaller investment model where
we have invested around Rs.8 Crores to Rs.10 Crores and we have launched all our products from
that bakery, so this is clearly we will invest according to the market, according to the need, we will
not invest money till the time we understand the market so it is the hub and spoke model for a
bakery industry which is the right way and when I told you that our company has got the strength
that we can do fresh, we can do refrigerated and we can do frozen what does that mean is that you
do not need to produce every product in the same plant so some of the products can move from
other plants into that plant which are expensive, which are delicate products, which needs
specialized lines to produce, so yes, this is the only way that if you want to grow you have to first
learn the market, understand the market, invest in a smaller manner and then grow that business to
whatever level it needs investment.

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Ayaz Motiwala: Sir, these are very helpful, if I can quickly ask you one question on your exports strategy, so you
have talked about value added or you talked about it in a way premiumization and premium biscuit
products and you highlighted from prospective to the last first call that you did where your average
revenue per kilo for biscuits has been going up both for domestic, but more so the export market
and that has given you these margins, so would you say that your differentiation and your strength
is also towards this if I can call it the Danish cookie like packed biscuits versus the more
conventional salted and glucose type of low end biscuits, what would be the range which would be
the driver in the export markets?

Anoop Bector: So on export market there are different types of food market, one is a commodity based export
market, which would be available in poorer countries, third world countries or there is a export
market in America, in Australia, or in Europe or in South Korea or such markets like Thailand,
now these markets need a lot of certification, means a lot of standardized in the quality of the
product, so today our company is BRC certified, we are USFDA certified, we have plants which
are from Europe, we have European lines, most of them depends upon what we need to produce so
our company has today got the capability to produce Danish cookies, to produce crackers, to
produce products which we can do for very large retailers worldwide and supply them an alternate
supplier from an European base or from any other base, now if I have to supply to Africa, I do not
need major certification, I just need a simple biscuit, but this is not, these are long-term
relationships, which we build with them and we are today a supplier to large retailers like HEB,
Dollarama, Shoprite in South Africa, so they keep elevating us from one product to another
product. So when we launched at HEB, HEB is stores out of Texas they have around 400 stores.
They started with two products. Today they are buying Danish cookies they were buying from
Europe, so there is a trust which keep building on and they are gaining on the price front because
India is going to be cheaper than a European manufacturers so these sort of things keep happening
and it is the infrastructure what our company has created that we can work with the large retailers
who are very careful and clear about the quality of the product they are selling in their stores so
that is the difference when somebody had asked me a question how many times you do turnover
on your assets, I mean when I talk about a Danish cookies line will not be even two times, but yes,
margins have been much better because the biscuit is selling at Rs.200 a kilo those sort of thing
make the difference.

Ayaz Motiwala: Thank you.

Moderator: Thank you. The next question is from the line of Sameer Gupta from IIFL. Please go ahead.

Sameer Gupta: Good evening, Sir and thanks for taking my question. First question is on your domestic biscuit
guidance that you have shared in the previous call around 6% to 8% growth for FY2022 now in
light of the first quarter gone and all the uncertainties regarding COVID now behind and assuming
that there is no third COVID wave or there is no impact of third COVID wave, I know it sounds a
little peak roster for us to assume, but let us say for the sake of assuming would you reiterate your
guidance or would you now say that you can do better run rate on the domestic biscuits front?

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Anoop Bector: On our growth side we had been very clear that we are targeting a 14% growth on the top line for
the company and we had also committed on a 14% to 15% EBITDA levels as a percentage to sales,
so the company sticks to that as a percentage of growth and so I mean we do not change the overall
growth numbers, Deepak, can you enlarge on that?

Deepak Jain: Yes, as Anoop Sir mentioned we are targeting revenue growth in the range of 13% to 14% for
FY22 at company level and from a medium term perspective this would be around 14% to 15%.

Sameer Gupta: Got it. Sir, second question is on your capex guidance on FY2022, you mentioned 40 Crores for
the Rajpura line that is part of the IPO there will be new lines and Greater Noida on Bakery so
anything on the capex guidance for FY2022 and also anything budgeted for FY2023?

Anoop Bector: No, we have not budgeted anything for 2023 yet and for the Noida bread and bun bakery lines have
got delayed due to COVID and now we are expecting commercial production will start from Q3
FY2022. The total investment on these lines were 70 Crores, we have invested 55 Crores on this
line already, so the balance 10 Crores to 15 Crores will be invested once the line is commissioned
and the payments have to be made, the line has already been installed, but yet to be commissioned
because of COVID there was a delay and the technicians are going to be coming in the first week
of September to install the line, so for the Rajpura plant 40 Crores the IPO money is being spent
on putting up the biscuit line, we are expecting the biscuit line to be operational as we had
mentioned in offer document April 2022.

Sameer Gupta: Sir, 40 Crores on Rajpura and 15 Crores for Greater Noida and some maintenance capex here and
there, so around 60 Crores to 65 Crores is your estimate?

Anoop Bector: First understand 70 Crores is part of a project which started in 2021, so the funds have already been
laid out, the funds are already been taken care of, so 50 Crores have been invested, so there is no
investment which will be further going except 15 Crores which has to be spent, in case of the 40
Crores this is IPO money which we had received during the IPO, this needs to be invested and we
are going to be putting up this plant out of the Rs.40 Crores.

Sameer Gupta: Got it, Sir and one last question if I may squeeze in just a bookkeeping one, so just wanted to know
the direct reach outlet in domestic biscuits and also in branded bakery in Delhi NCR what is the
number of outlets that are productive available in?

Anoop Bector: I will tell you about biscuits and Ishaan will talk to you about breads, so we continued with the
same numbers of 200000 outlets in this quarter ended, this was the same number as March 31,
2021 and in June 30, 2021 we stand at the same numbers. So effectively in April and May we
would not have been able to cover these outlets but the strike rate on June 30, 2021 comes to around
200000 outlets only, because of the COVID the numbers could not be expanded but going forward
we are already working on it to expanding the numbers. For bread I will ask Ishaan to take your
call.

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Ishaan Bector: Good evening. On the bread side definitely the number of outlets that sells bread is far smaller. On
the bread side also we do not actually have reliable data like AC Nielsen etc., but from what we
have an in-house tools; we are doing around 13000 to 14000 outlets in Delhi NCR. We are working
on is creating our own distribution management system where we are looking at tracking our sales
at the outlet level, so this is the progress that we are doing to be focusing more on our supply chain
and as the system gets 100% implemented in our organization which will be able to give you a
clearer picture on the exact number of outlets that we do, but as a guidance it will be around 13000
to 14000.

Sameer Gupta: Thank you Ishaan. Thank you Anoop Sir. Thank you and that is all from me.

Moderator: Thank you. The next question is from the line of Vinod Malviya from Union MF. Please go ahead.

Vinod Malviya: A couple of questions for my end, first question can just provide your inputs on the PLI scheme.
Have you applied or any further updates which you can share with us?

Anoop Bector: So, on the PLI the biscuit division has applied. We are in constant providing the information but
we have not yet received any answer from them. We are hopeful that by end of September that is
what they say. We shall be informed what is the result of our application.

Vinod Malviya: The second question was on the export incentives, can you help me the number of the export
incentives, which you reported, be in Q1 of FY2022 and what is your view going forward what
kind of export incentives we are looking at?

Anoop Bector: We are currently only booking DFIA in our books and we are awaiting for RoDTEP information
which as per the newspapers today should come in tomorrow and that has not been considered so
only DFIA has been considered in the book so it is approximately around 5%.

Vinod Malviya: 5% of export incentives?

Anoop Bector: 5% of FOB export sales.

Vinod Malviya: And just to what was the number on a Y-o-Y basis last quarter?

Anoop Bector: I will not have this information with me at the moment, but we will surely provide it to you.

Vinod Malviya: Thanks. That is all from my side. Thank you for taking my question.

Moderator: Thank you. The next question is from the line of Nidhi Babaria from Dalal and Broacha. Please go
ahead.

Nidhi Babaria: All my questions have been answered, just a small thing, when we talk about premiumisation for
the company business, how much portion would be from biscuits and how much would be from

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 Mrs. Bectors Food Specialties Limited
August 12, 2021

bakery like the new launches which we are doing maybe the garlic bread, Focaccia and those kind
of things?

Anoop Bector: So, when we talk about premiumization we consider both of these products as separate segments
and when we are talking about biscuits we always focus that the new launches are happening in
the premium side like, I will give you an example, some months back we had launched in fact more
than six months back we launched the cream biscuit which was against the premium creams
available from our competitors which very few people are doing and we have received good
success over there and effectively we are seeing constant growth coming out in the numbers as a
percentage on the biscuit side and we are very positive that these numbers we have just started
because our products are accepted extremely well and we are expecting good growth numbers to
keep pouring on the premium side, on the bread side it is totally a different thing and Ishaan will
be able to take this answer.

Ishaan Bector: On the bread side, we essentially are operating as a premium bread company. Most of our sales
again are in the non-white segment, so in that ways our premiumization is about 75% of our sales
is coming on non-white category. What we are doing it further pushing the bar with the new
launches and in fact our entire campaign is centered to make a delicious meals at home, so whether
it is the SUB where we make at home or a burger that you can create amazing products at home so
these are all in the premium category for us and we have a very, very strong pipeline already in
place of what we want to do, so I think with the footlong bread with some of the new products that
we are planning to launch, if they are able to contribute to about 10% to 15% of our topline I think
we would have at least started establishing the category in the way that we would like to.

Nidhi Babaria: Just on a direct reach side like whenever we added distributor or any of the new regions we are
coming up like let us say tier 2, tier 3 cities in west and south region will we starts some biscuits
regions or are we going to start from the bakery products?

Anoop Bector: Nidhi, these are absolutely separate businesses that independently run and all our core businesses
are independent of each other, other than bakery especially because the plants for bakery are
separate different so the decision for bakery are taken in light of the needs of the bakery and for
biscuits it is totally different so it is very difficult to say because bakery might need to go to
Hyderabad or to Punjab whereas we might need to go to Madhya Pradesh this is nothing I mean
this is very independent of each other none of our plants are together till now, so both the regions
are very separate to the needs.

Nidhi Babaria: Thank you.

Moderator: Thank you. Ladies and gentlemen, we will take last question from the line of Harsh Sheth from
HDFC Securities. Please go ahead.

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 Mrs. Bectors Food Specialties Limited
August 12, 2021

Harsh Sheth: Good evening. Thanks for the opportunity. Just couple of question, firstly on the formulation of
Bectors both the biscuits and bakery, so I understand that the salience of unorganized sector in both
the biscuits and perhaps in bakery is much higher now such sharpened inflation and the supply
chain issues that the smaller players would be facing, so do we sense an opportunity just too fasten
growth, are we already witnessing that shift happening from unorganized to organized?

Anoop Bector: Actually, what we are talking about the quarter there was lot of insecurity, people were very
insecure, somebody in that extended family had fallen sick and especially in North India in the
Delhi market, we had seen a lot of eventualities happening, so there is a lot of caution and things
about that, but yes, your question is absolutely right, during times when commodity prices have
gone up and the supply chain issues are there, the challenges to a smaller, weaker player is always
going to be much larger than an established player and yes, we see that, but for us what we see is
that there has been a cost increase, we have been able to partially recover our cost increase and the
balance cost increase we are looking at recovering in the second quarter and a small amount
probably in the third quarter and we shall be able to get out of the need for the price rise, yes, for
a smaller company where brand acceptability is the limit where is selling on a price point, so there
are challenges, but currently if you say have I faced anything like that? No, but on the bakery,
Ishaan can answer it he has the answer to it.

Ishaan Bector: Definitely, what we are seeing is there is a growing market for the organized players and especially
in the bakery side the unorganized sector has been quite large almost to the tune of 40%, but what
we are seeing is with the degree of automation, etc., which is coming into the bakery business with
the kind of products that we are sort of creating for the consumer definitely there is going to be an
edge that is going to be created in fact even if you see the QSR space the organized players are
benefiting much more than the unorganized players largely because a lot of the unorganized players
had to shut shop and also post the pandemic I think the salience of a brand is also getting stronger
because people want to be associated with brands that they trust so I really feel that as investments
are ramping up in both the bakery and the biscuit industry in general markets definitely should get
consolidated and I think it will be a win for the organized industry.

Harsh Sheth: Thanks for the detailed response. My second question I understand that our focus is on
premiumization, but I believe the Rural India still contributes around 50% to our total sales, so I
just wanted to understand what is our strategy to drive penetration in Rural India, are you planning
to more of doing packs and what would be the contribution of Delhi, UP to the total scheme of
things?

Anoop Bector: For Rural India we have rolled our strategy and on focus states like Uttar Pradesh, Rajasthan
markets, where our plan has been clear that, super stockiest need to be pointed so we are targeting
at smaller towns where the population is less than a lakh or 50000 so there super distributors will
be appointed we shall be looking after their markets and that process is already started for us so
our focus while we continue to premiumize our product, our focus also happens to be on the value
side for sure and rural for the company will surely give us a good numbers going forward. So I

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think the focus continues on increasing distribution. I would like to mention this that when we
make premium products we also make a premium product in Rs.10 segment, so we do not do a
premium only in Rs.20, Rs.30, Rs.50 so the Rs.20 is 75 grams we also do a 37 gram pack which
will give us an extra packaging cost, but it is available for the Rural Indian market so lesser
denomination money is needed to be spent. So the focus is very clear although we will reach rural
markets, the percentage of premium would be lower than an urban town, but yes, but it will be
there. So the continuation of focus does not change, like in Punjab market we do not have super
stockiest, we cover each and every smaller towns, but in Uttar Pradesh we were earlier appointing
super stockiest, but we have started picking up towns at 50000 population we will not be covered
by our distributor, but by a super distributor who will be able to cover more villages around him
so that is what is going to be taking place now and which will help us increase our penetration into
the market.

Harsh Sheth: It is 50%, right?

Anoop Bector: You are not clear, can you repeat again?

Harsh Sheth: Rural is still 50% of our business right?

Anoop Bector: Yes, approximately 50% of our business comes from rural.

Harsh Sheth: Sir, just lastly I just wanted to understand your export opportunities in bakery specifically
institutional bakery business, if we see the growth prospects for QSR industry in geographies like
Bangladesh or in some other Asia Pacific geographies are as robust as in India, so do we see any
export opportunities are we in talks with any of the leading players?

Anoop Bector: Currently, no, when we look at we definitely see export is the possibility and you are very right.
Currently we are not in any talks with anyone, but yes, domestic market we are very close positions
of supplying bakery products to more QSRs and also probably introducing these products going
forward into the local market.

Harsh Sheth: It is really helpful. Really appreciate a very detailed response to all the questions, so thanks and all
the best for future.

Moderator: Thank you. Ladies and gentlemen that was the last question. I now hand the conference over to
Mr. Anoop Bector for closing comments.

Anoop Bector: Thank you everyone for being here with us and listening to our story. We do acknowledge, we
could have performed better or we could have increased our distribution, we could have launched
the potato biscuits at least by the month of April because that was our target, but due to situations
out of our control due to COVID we were not able to do so and also on the EBITDA margins we
have taken a hit and this is mostly on an account of palm oil and other packaging material costs

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August 12, 2021

which have gone up. We have recovered 4% of our total costs have been recovered by the company
through price increases or weight reduction or cost efficiency programs and the balance we hope
to recover in the quarter two and quarter three and we are looking for good times ahead. Thank
you so much for joining us. Thank you.

Moderator: Thank you very much, Sir. Ladies and gentlemen, on behalf Mrs. Bectors Food Specialities Limited
that concludes this conference. We thank you all for joining us. You may now disconnect your
lines.

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