Mrs. Bectors Food Specialities Ltd (NSE: BECTORFOOD) Q1 2026 Earnings Call dated Aug. 14, 2025
Corporate Participants:
Unidentified Speaker
Anoop Bector — Managing Director
Manu Talwar — Chief Executive Officer
Ishaan Bector — Wholetime Director
Analysts:
Unidentified Participant
Resham Mehta — Analyst
Preeti Agarwal — Analyst
Shirish Pardeshi — Analyst
Pratik Prajapati — Analyst
Vivek Gupta — Analyst
Akhil Parikh — Analyst
Ronak Shah — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Mrs. Bectors Food Specialities Limited Q1 2026 Earnings Call Q1FY26 earnings conference call. 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 this conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anubh Bhatta. Thank you. And over to you sir.
Anoop Bector — Managing Director
Thank you so much. Good evening everyone. On behalf of Mrs. Bectors Food Specialities Ltd., I extend a warm welcome to all participants on Q1FY26 financial results discussion call. Today on this call I have with me Mr. Manu Talwar, our Chief Executive Officer, Mr. Ishan Bechter, whole time Director, Mr. Praveen Kumar Goyal, hold time Director and Chief Financial Officer. We also have Muck Intine with us on the call who are our Investor Relations advisor. I hope everyone had a chance to review our investor deck and press release which was uploaded on the exchanges and our company website.
In a challenging macro environment, the company has delivered a resilient start to financial year 2526 recording a 7.6% year on year increase in revenue from operations and delivering an ebitda margin of 12.3%. Coming to the macro environment, we are cautiously optimistic about the prospects of urban segment on the back of recent interest rate cuts and the rationalization of techslab. We are seeing early signs of recovery on the inflation front, particularly in the raw materials. The sharp price hikes driven by geopolitical disruptions and supply chain bottlenecks appear to be behind us. Prices of peak commodities like cocoa, palm oil and Mazza even though still elevated are now stabilizing.
A stable raw material price environment going forward should translate into stable end consumer pricing and help propel demand. The sharp increase in input cost was effectively mitigated by through strategic pricing actions and initiatives undertaken under Project Impact. The bakery segment delivered its highest ever quarterly performance of 183 crores, a 19% growth for the quarter. This was led by Englishwan whose market leading brand equity, superior product quality and high consumer trust have been instrumental in driving momentum. We continue to strengthen our position in incumbent market and are now also aggressively pursuing geographic expansion through both distribution and brand building initiatives.
Coming to Biscuit Portfolio, A top line growth of 3% underlines the challenges faced by the Exports Business the exports business continues to operate in a highly volatile environment. The uncertainty of tariffs, slow passing of input price hikes on account of muted demand and supply chain disruptions due to geopolitical tensions continue to be challenging. Business from America has been particularly impacted. However, we remain in close engagement with our customers to drive through this uncertainty. On the domestic front, all price actions have been factored in and now end pricing has stabilized. The growth rates even on the back of sharp price hikes have improved consistently quarter on quarter from quarter three last year, indicating resilience and provides an optimistic outlook as broader consumption improves.
We continue to scale up and enhance business contribution from Innovation Our innovation philosophy is to upgrade and enhance consumer experience through differentiation by use of healthier ingredients, convenient formats and rich experience products. Products like shortbread made with 25% butter and low palm oil have performed well in the indulgence segment. In the kids snacking category, we introduced animal shaped crackers under the brand name Teddy’s which continue to scale up well, tapping into the demand for convenience anytime in home indulgence and building in our bakery expertise. We entered in the ready to eat dessert segment with the launch of chocolava cake, muffins and brownies.
It continues to scale up well on quick commerce. In response to the growing demand for healthier alternatives, we launched our flagship coconut cookies with a zero meada offering at 20 rupees for 100 grams. Additionally, we are building a pipeline of health first products which should be out in the next few quarters. Furthermore, we launched Clean label range of breads under Nature Bake, a Health first exclusive brand with no maga, no palm oil and no added colors and no preservatives with the proposition it is honest, it is clean, it is nature big debited with super seed and whole wheat flour flavors.
Early feedback has been encouraging and we plan to scale up this range with more exciting offerings in the future. On Marketing, Having recovered from the input price shock in the last quarter, we regain our committed spend to build and investing behind our brands in clinical priority markets, a blend of mass media, TV and outdoors and BTL activities like out of home campaigns, wall paintings, vehicle branding along with participation in exhibitions, Melas helped gain significant visibility for the brand. We celebrated Mother’s day with heartfelt YouTube film mark a Sapna car first birthday honoring mothers and their dreams which resonated deeply with our audience.
As the next driver of growth, English extended both its reach and visibility in the top 14 cities of north through a large outdoor campaign. On the technology front, we have made significant advancements aimed at strengthening our operational backbone in manufacturing and supply chain. We have rolled out digitization initiatives across 50% of our plants in sales and distribution. The deeper adoption of our distributed management system across 60% of distributors is delivering enhanced visibility, real time tracking and improved order fulfillment. Additionally, our technology investments have enabled better management of trade spends and improved key sales. Four metrics including productivity rates and territory coverage on Our new biscuit facility in Dhar commenced operations in May and is currently in a phased ramp up to ensure operational stability.
Full scale commercial production is targeted for Q3 sorry for Q2. Once fully operational, the plant will not only deliver improved operational efficiency and enhanced service levels but also strengthen our manufacturing capability for the differentiated products playing a pivotal role in driving the growth of our product portfolio. On the bakery front, we remain focused on scaling operations to capture growth opportunities. Our plant in Kolkata is going to be commissioned in quarter three and the facility in Maharashtra is going to be commissioned towards the end of the financial year. In line with our commitment to enhancing shareholder value and improving liquidity, the board has approved a subdivision of equity shares whereby each fully paid equity share of rupees 10 face value will be split into five fully paid equity shares of rupees to each.
This move subject to the shareholder and regulatory approvals. Moving to our financial performance for the quarter starting with Biscuits, Our biscuits segment reported a revenue growth of 3% which stood at INR 281 crores in Q1FY26 as compared to INR 273 crores in Q1FY25. The segment has grown by 26% over Q1FY24. Our Bakery segment revenue for Q1FY26 stood at INR 183 crores against INR 150 crores 54 crores in Q1FY25 thus registering a growth of 19% on year on year basis. Including retail, bakery and institutional segment, this segment has grown by 35% over Q1FY24. The consolidated revenues of the current year stood at INR 473 crores versus INR 439.4 crores in Q1FY25 thus registering a growth of 7.6% on a year.
On year basis EBITDA stood at INR 58.2 crores while EBITDA margin for the quarter stood at 12.3%. PAT stood at INR 30.9 crores for the quarter and PAT margin for Q1FY26 so that. Thank you so much over to you.
Questions and Answers:
operator
Hello. Should we begin with the question and answer?
Anoop Bector
Yes, please.
operator
Okay, thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Resham Mehta from Green Edge Wealth. Please go ahead.
Resham Mehta
Yeah, thank you. So the first question is on biscuits. Two part question here. Domestic biscuits and export biscuits. So domestic biscuits, you know, the growth has been very, very muted now since we’ve taken all the pricing actions and you know, the rm, the raw material costs are also largely stable. Like you called out. What is the kind of growth that we are expecting for you know, the balance nine months or from here on.
Manu Talwar
So in the domestic biscuit side, what we have seen that over the last two to three quarters there has been improvement in the revenue growth quarter on quarter. Right. Even this quarter revenue growth was better than last quarter. Right. And we very hopeful that these trends, this kind of build up and especially when the fiscal season also kind of hit. So we definitely targeting right that we should be able to build up in the next two quarters and get to a run rate of a double digit growth, you know, over the next 2/4 time. So that’s what we are, you know, gunning for or that’s what we are heading for targeting to, to keep improving this growth rate from a, from a high single digit and take it to a double digit growth and build it up.
Resham Mehta
So just taking a step back, right. The headwinds that we are facing in a domestic biscuit business was essentially that, you know, demand was muted and you know, we had taken price hikes which probably, you know, in a muted consumer environment did probably, you know, saw the suppressed demand and there were competitive pressures also. But now with that, I mean, I mean the muted demand kind of still remains. Or do you see that there is an improvement in the demand sentiment in urban areas?
Manu Talwar
Look, there is, there’s definitely. That’s why I said if I look at Q3 of last year to Q4, Q4 to Q1 of this year, it has been quarter on quarter, the growth has been improving. There’s a clear cut trend of sequential improvement in growth quarter on quarter. We are at a high single digit growth in domestic biscuit business. And we’re very confident that over the next two Quarters and there has been a fair amount of steep price increase in the last six months time which is also kind of settling in now and commodity prices have also stabilize.
So we have worked and the festive season hitting, we should be able to move the growth sequentially up in the next two quarters also and get to a sustained double digit growth going towards the quarter four of this year and then the next financial year.
Resham Mehta
So the Q1 domestic biscuit growth was in high single digits like you called out, correct?
Manu Talwar
Yeah .
Resham Mehta
You’re on your rightAnd this is year on year You’re talking about year,.
Manu Talwar
year on year. Yes, absolutely .
Resham Mehta
Right Which effectively means that there has been, you know, some kind of a degrowth or you know, very muted growth in the export.
Manu Talwar
Yeah, yeah, absolutely there has been.
Resham Mehta
Can you specifically call out like what exactly are the issues here and how big would our US exposure be and how can we kind of mitigate this?
Manu Talwar
So basically what happened is uncertainty had impacted the phasing of the orders. Right. And because of the phasing the order discussion with customer, the announcements coming and changing has kind of delayed these orders. And as far as our US business which is impacted is about 20 odd percent which is there. But you know, while these things were settling down, dispatches in June and quarter towards started building up and then again this announcement came up heavy impact of 50%. Right. And then that is again kind of created an uncertainty, no doubt about that. We are in touch and engaging our customers and we are also hopeful that somewhere, somewhere there would be some resolutions which Indian government and US government will also work out.
So very hopeful by end of August things should be better and clear. But yes, as of now we are engaging with customers to kind of make this happen.
Resham Mehta
US is 20% off export biscuit revenues. Right?
Manu Talwar
Yeah, approximately around.
Resham Mehta
Got it, got it. And lastly, you know, on the margins front, so considering, so from here on considering pricing actions have been, you know, affected and the raw material input prices are largely stable. So can we see gross margins Q2 onwards kind of, you know, improving and going back to let’s say 47, 48% kind of levels which effectively would, you know, perhaps lead to transmission into improved EBITA margin.
Manu Talwar
So first thing is definitely we are looking at EBITDA margins to improve. Right. Our EBITDA margin in this quarter was also further impacted by the business mix. Right. With change and exports being low. So. But yes, in the coming quarter and the coming quarters as we had indicated in previous call, also that from quarter two onwards we will start getting that to our EBITDA margins of close to 14% and we are working in that direction. We are confident of getting there.
Resham Mehta
The last one, if I may. So the bakery business, 19% revenue growth. Can you break that up into the B2C and the QSR business
Manu Talwar
we normally don’t share.
Anoop Bector
Excuse me, Manuj is corrected that it is 20% of the export business.
Manu Talwar
Not sorry, it is 20% of export business. It is just about, you know, close to 5 to 6% of our overall business. So that not the America which is impacted is as a percentage of export is 20 but overall business should be around 5, 6%. Coming to bakery side. Bakery side. Obviously our B2C business is growing very healthily. We don’t share the numbers separately but yes, English oven growths are much more healthy and aggressive compared to B2B. B2B or QSR business we are growing. Right. But it continues to be on a low growth mode as compared to English O1 which is B2C business.
Resham Mehta
So you know, exports part if overall US revenues is just 5 to 6% and overall revenues. Yeah, overall revenues. And largely the impact would, I would imagine would have been on the US business on the export.
Manu Talwar
You know, let me, let me just correct it. What has happened is that currently we do not face our supply going as normal. But what had happened was that we have a lot of edit over stocks which could not be, you know, it is in transit. Right. The stocks were in transit. So otherwise till now, I mean our business is as normal. But there have been a lot of fluctuations. Once they started with 25%, then they started with 50%. So the shipping documents, we are waiting for our customers to respond. So at the moment our business, we are supplying all orders as they are.
We shall be continuing to doing similar business in quarter two also. But the total US business is 5% of the total company sale. That is what, you know, it is at the moment.
Resham Mehta
Thank you. I’ll join back the queue.
Manu Talwar
Yeah.
operator
Thank you. A reminder to all participants. You may press Star and one to ask a question. The next question is from the line of Preeti Agarwal from SK Associate. Please go ahead.
Preeti Agarwal
Yeah, thank you so much for the opportunity. My first question is that the bakery segment grew 19% year on year significantly outpacing the biscuit segment. So what specific product innovation or market strategy contributed to this growth?
Anoop Bector
Ishaan, you can take this first one.
Ishaan Bector
So on the bakery side, you know we are basically always been saying that our vision is to be a pan India beer. So there’s two parts to it. You Know, so we have extensively increased our distribution. We have also entered into the upper north geographies of Punjab. You know, we are also seeing where, you know, as an early mover into the category, we have a very strong market share on the quick commerce where we are aggressively working, we are gaining market share. Our products have been well accepted on the general trade side. Despite significant movement of volume going into quick commerce, we are continuing to increase our distribution.
So you know, in both the categories, whether it is general trade or quick commerce, you know, we are seeing positive numbers in terms of growth. Right. So like I’ve always said that English oven still has a long, long journey to become a national brand and you know, to be in our line or vision of being the, you know, top three brands in India in the bakery segment. So you know, expansion is one such thing. Secondly, you know, we have also noticed that a lot of trend has gone towards the health segment. Right. So you know, we were again one of the early movers into catching this health segment.
In fact, most of our preds today on the healthy side are made of no meta, they are using no palm oil. We have also now added a new brand to our portfolio which is called Nature Bake which by this month will be available across all the geographies where we are currently operating in. And this is taking the health portfolio to the next level where you know, on top of the no meta, no palm oil, we are also removing preservatives, you know, from our product. We are removing any kind of emulsifiers. Right. So you know, I think, I think we are focusing on the trends well and focusing on expanding distribution and maintaining more importantly a high market share in qcom.
So we’re excited about the time to come.
Preeti Agarwal
Understood. So a better market strategy is helping us to target specific pockets of the region.
Ishaan Bector
Yes, yes.
Preeti Agarwal
Understood My second question is that what is the current contribution of E commerce and modern trade channels to overall revenue and how do you see this evolving in the next few years for the bakery as well as the biscuit segment.
Ishaan Bector
So.
Anoop Bector
Yeah, yeah, go ahead.
Ishaan Bector
So for the, for the Bakery, it’s about 30% our contribution of modern trade and E commerce, quick commerce, what we are seeing is that this contribution should and will go up higher as expansion of these segments, quick commerce becomes deeper into tier 2 cities as well.
Preeti Agarwal
Understood. And lastly on exports, how are we navigating geopolitical disruption in the export markets especially given our presence in more than 70 countries?
Anoop Bector
So we, you know, we are not facing any concerns other than the US market. So otherwise business is as normal. But you know, what has happened is that, you know, with a lot of US disruptions going on, on, you know, final deadline, lot of shipping, transportation has been moving in and out to other countries. So that was one disruption. Otherwise, other than us, we don’t foresee anything coming back. Anything other than us, other than the everything else stands normal to us.
Preeti Agarwal
Understood, sir. Thank you.
operator
Thank you. The next question is from the line of Shirish Pardesi from Motil Oswal. Please go ahead.
Shirish Pardeshi
My team. Thank you for taking my questions. Starting from the bakery business, can you break down this 19% in terms of volume and value?
Ishaan Bector
So growth for us in bakery this quarter has, I would say 65% has been volume led and the balance being value.
Shirish Pardeshi
Okay.
Ishaan Bector
A large factor of this is also focused more on premiumization. Right. So as the QCOM mix has improved, our listings on QCOM are of the premium category which also helps, you know, increase our premiumization mix. So it’s been largely volume driven followed by Rajiv.
Shirish Pardeshi
So is it primarily driven by the new product in the bread segment? The growth will be significantly higher than the overall.
Ishaan Bector
No, you know, firstly it’s not. So a lot of our products have also become revamped. Right. So it’s not like we have introduced many, many new products. It has been re engineering of existing products to make them healthier. I think that has worked. Right. And Nature Bake as a brand has just been launched a month ago. We are getting a good response for it. I think it is just the start of Nature Bake. So it’s largely been through existing products rather than than new products. Re engineering of existing products as a Better proposition for a custom
Manu Talwar
Okay, I think explained it earlier. I just. Aishan explained it earlier. So there two things is that quick commerce, we are the, you know, kind of leaders there. So our share in quick commerce is ahead of the GT channel and the transition of consumers from DT to consume. E commerce and E commerce growing very exponentially is helping us and drive our overall growth. Our growth territories where we have been investing, which was outside ncr, which is whether it’s a up or Haryana or Rajasthan and now Punjab or Bombay is something which continues to be growth engines for us and will only increase in terms of growth trajectory over a coming years.
Shirish Pardeshi
Okay, sir, thank you for that. It’s really helpful. But just one follow up. What price premium you are charging at this time?
Ishaan Bector
What?
Shirish Pardeshi
What price premium you’re charging to your other Maida brights?
Manu Talwar
So Ishan?
Ishaan Bector
Price. Yeah, definitely. You know, the. The whole wheat category Is the multigrain category are priced more expensive also have higher, higher higher gross margins for us. You know that white bread. And and we are, we are you know very conscious of the fact that that in fact a very big KPI for us in our organization is also premiumization as a percentage of sales and we continue to track that and how we can improve it. As far as premiumization in the market as compared to competitors. We don’t really we are very well benchmarked to competition in terms of pricing.
Shirish Pardeshi
Yeah but towards our portfolio is it at least 10% premium
Ishaan Bector
as compared to competition?
Shirish Pardeshi
our portfolio.
Anoop Bector
So Islam, what is asking. Let me respond here. So our realization of our mix on a per piece basis is. Is much ahead of our competition. Right. So yeah the question which you’re asking that our premiumization percentage compared to our competition is. Is much ahead.
Shirish Pardeshi
Okay. My last follow up on the bakery. What is the distribution you have for. For the retail coverage for bakery .
Ishaan Bector
In erms of number of outlets?
Shirish Pardeshi
Yes. And how what is the plan to grow over next one year? I mean are you trying to look at any new markets?
Ishaan Bector
See. You know we are definitely looking at new markets. For us even Punjab is a new market. I mean at the present in Punjab our distribution is quite limited. You know even let’s say the top 14 cities. Right. We we are seeing month on month improvement in all geographies for us. You know Mumbai as new plant comes up is going to be a priority market where we are going to see you know our quality significantly ramp up. In fact you know the newest plant which is a fully automatic plant which is going to be coming in is also going to help in nature based as a category as you know we are moving more towards preservative bread.
You know automation is going to definitely help us. You know and I think it’s an investment in the right direction. Calcutta is going to be coming up which primarily we will first you know be looking at as a new market. So that will be our entry into the east which we look forward to this year. And yeah so this is what we are going to be doing. We are also going to be looking at adding at least one metropolitan city this year through a co packing arrangement.
Shirish Pardeshi
Okay my second and last question. We acquired the Kremica facility and even brand. Is there any progress you can say or is there any update you have at this time?
Anoop Bector
Manu?
Manu Talwar
Yeah, so yes, Grinvika brand which we had acquired and we will be starting our journey with you know adopting that Rimika brand in this particular quarter. The quarter we are in and then we will build up. Right. So we obviously have the first step in terms of using a Krimika brand which. Which will be executed in this quarter and then build it up from there onwards. So in terms of using Krimika on bakery or not on bakery side is something, you know what we are into now over the next four to six months is we are going to be, you know, investing in terms of research on our brands, where do our brands stay, what are our way forward on brands.
Right. And it’s exposed that we would be more clear in terms of, you know, how do we take our brands forward, where do we fit in the Krimika brand which we acquired. But in terms of staff using the brand in one of the segment is something which will be executing in this quarter.
Shirish Pardeshi
Yeah, I understand that Manusar, but I was just trying to. I’m more curious because having seen the Krimika brand, very strong presence in the Punjab and Haryana market. Are you going to start it with the brand bread segment?
Manu Talwar
That’s why I said whether to use this brand on the bread side or not is something we are investing in. The research on the brand and the brand way forward. This will take about four to five months time. And while we take a decision because these are very serious long term decisions. Right. And so as we are institutionaling this investment in study and consulting is only posed that after four, five months we’ll take a call in terms of way forward. But yes, in terms of using Premica brand in one of the categories where you’re not using it yet we will be initiating that in this quarter.
Shirish Pardeshi
Okay. All right. And thank you and all the best.
operator
Thank you. The next question is from the line of Pratik Prajapati from Ambit Investment. Please go ahead.
Pratik Prajapati
Hi sir, good evening. My question is on the market share price so one to understand and in domestic district market what is our current market share and it is maintaining in the last one year because we are seeing competition.
operator
Can you please be a little louder? We can’t hear you properly.
Pratik Prajapati
It is better now.
operator
Yes sir, please continue.
Pratik Prajapati
Hi sir, I want to understand the domestic gifted market share. Are we able to maintain the market in the last one year and what is our current market share? And second question is on a distribution network side what is our current distribution network on the biscuit side and are we able to add any distribution network in the current quarter?
Manu Talwar
So Kashipathi, first thing is yes, we have been able to retain our market share over the last one one and a half year. When it has been highly intense to competitive and our market share in North India, where we are primarily present is over 4%. Right. It is through our distribution, through our execution in the marketplace and supported by marketing, we have been able to. We have been able to kind of retain our market share right. In northern India in our domestic biscuit business. Business. Right. And in terms of your second question which was on distribution, there’s a lot of disturbance coming.
Can somebody look into that? Yeah. In terms of. Yeah. In terms of distribution side, clarify one thing that what we are so. Yeah, yeah. We continue to have build outlet over 200 rupees a month, over 3 lakh outlets every month. So that continues. Our direct reach is over 5 lakh outlets. And as per AC Nielsen, we are, you know, we are available in over seven outlets there. What we are following is, what we are following is to give more weightage to our weighted outlets. Right. And these weighted outlets are Krimika preferred outlets which are more premium and more kind of growth that they are delivering us higher growth.
Second thing which we are focusing on domestic biscuit is to bring a success like we brought on English own on the E commerce side. So quick commerce side is something which we are investing and driving because whole objective of distribution is to reach more consumers. And today E commerce as we have seen in English oven is helping reach more consumers and customers right. Through that role. So there’s lot of effort which is going on a quick commerce side and the quarter one we had a very good growth on Q commerce side. So we very confident that over the next four to six quarter we should be able to move quick commerce contribution which was just about 1% to almost 4 to 5%.
Right. As a percentage of domestic business revenue. And it’s moving in that direction. So this is how I would define that, how we are driving distribution. Right. In terms of consumer reach for domestic brisket business.
Pratik Prajapati
So just a follow up on this. Just want to understand. So you are more focusing on the E commerce and E commerce rather than more focusing on the GT and the NP side.
Manu Talwar
Okay, I’ll again clarify to you what we are focusing is that our consumer reach goes up and today consumers are more shifting from GT to quick commerce. That’s clear trend we have seen in English oven. And that strategy of our has played us very very well in English oven. So we are investing more on quick commerce and high weighted outlets of GT channel which we call Krimica preferred outlets. These Krimika preferred outlets contribute more than 15% of our revenue of the GT channel. And they are growing much higher and they have much higher premiumization in these outlets.
Right. And beyond that, we are focusing more in terms of driving growth in the top 25 towns or cities. Right. So this is a triangular strategy in terms of reaching more consumers, more premium consumers as well as driving the growth. I would like to add along with this.
operator
Thank you.
Manu Talwar
Yeah.
operator
A reminder to all participants, you may press star and one to ask a question. I repeat, a reminder to all participants, you may press star and one to ask a question. The next question is from the line of Vivek Gupta from Star Investments. Please go ahead.
Vivek Gupta
Yeah, hi. Am I audible?
operator
Yes, sir. Please continue.
Vivek Gupta
Yeah, yeah, yeah. So my first question was regarding the input cost. I mean, they have remained elevated. So what steps are being taken to optimize procurement or you know, rather improve operational efficiency.
Manu Talwar
So, you know, overall we saw last year as a year where, you know, inflationary trends in commodities, especially wheat, palm, palm oil or oils and you know, cocoa had gone up, you know, substantially. And then there has been a relief. The government has given, you know, has cut down on duty. So which has given the much needed relief. So so on our strategy we look at especially on the wheat front where we do long term hedging and palm oil is looking more subdued than last year and cocoa prices we are seeing going forward. The future are looking better than last year.
So that is where we are on the three commodity side.
Vivek Gupta
Yeah. Okay. So my second question was regarding, so on the advertising side strategy, are we looking to onboard or freeze resign our current brand ambassadors again? Also are we focusing more on influencer engagement side or how is it.
Manu Talwar
As. Far as the brand ambassador? We are in the current process of evaluating that our way forward on that. We continue to invest behind our brands. Right. And even in this quarter we have upped our investment on brands versus previous quarter, both English, Owen and Krimica. Right. So our journey to invest behind brand which we strengthened over last two, three years, it continues to kind of move in that direction. And so that’s that. We have also upped our investment in this quarter versus last quarter on behind our English ohana.
Vivek Gupta
Okay, thank you. That was from my side.
operator
Thank you. The next question is from the line of Akhil Parekh from BNK Securities. Please go ahead.
Akhil Parikh
Yeah, thanks for the opportunity. So my first question on the EBITDA margins you highlighted that it will go back to 14% by second quarter. Would it be largely driven by improvement in gross margins?
Manu Talwar
Yes, it will be driven by both improvement in gross margin as well as the efficiencies in the cost below that it would be both. Right. And that’s how it happened. And also the scale. Right. Revenue growth. So three things. Revenue growth, bringing a scale which will give a more better leverage of fixed cost, the improvement in value or gross margin. And third is bringing more efficiency in cost as a percentage.
Akhil Parikh
Ideally because two more plants are yet to be commissioned. Right. In Q3 and Q4. So there will be a lot of upfront costs and the sales will come through probably in FY27 and 28 as they ramp up, so.
Manu Talwar
Yes.
Akhil Parikh
Isn’t it a fair assumption that even though we may see improvement in margins led by gross at gross level, but probably the other expenses and employee cost also will remain at elevated level till the time the other two clients ramps up next year?
Manu Talwar
Yeah. So there will be some stabilization cost in terms of fixed cost of manpower and other expenses while these plants applies. Dhar plant came up in May, so it’s getting stabilized in this quarter. It will get stabilized, yes. Calcutta is a very, very small plant. But yes, in terms of that plant start delivering better revenues will take few months. So we will add some amount of fixed cost to bear for first few months. By the time we start building the revenues which primarily will happen in the next financial year. As far as Bombay plant is concerned, it will come up in two phases.
The first phase will come up in quarter three of this financial year and second phase will come towards the end of the quarter four. Right. Yes. There would be some stabilization cost which would be there which will be able to leverage better in the next financial year.
Akhil Parikh
But despite that, you’re saying we should be able to reach 14% in 2Q and hopefully we’ll improve from there on in FY 2017.
Manu Talwar
Yes, definitely.
Akhil Parikh
Okay. The second and last question is on the Biscuit segment. If you can just provide channel wise sales mix in the Biscuit segment.
Manu Talwar
On domestic Biscuit.
Akhil Parikh
Yes.
Manu Talwar
So you know, there are two large channels and there are other channels. The two large channels, our general trade kind of contributes over 70% and modern Tradicom combined contributes around 9, 10%. So that’s broadly I can share at this point of fact. And then there are other channels which I’ve done. Hello.
operator
So he has left the queue. A reminder to all participants. You may press Star and one to ask a question. I repeat, a reminder to all participants. You may press Star and one to ask a question. The next question is from the line of Sunidi Joshi from KP Capital. Please go ahead.
Unidentified Participant
I’m now audible.
operator
Yes, ma’. Am. Please continue.
Unidentified Participant
I just wanted to understand the key reasons behind this margin compression and how you plan to address it going forward.
Manu Talwar
You wanted to understand the reason of margin dilution, right?
Unidentified Participant
Yeah, Compression, Yeah. Okay.
Manu Talwar
So you see, margin dilution primarily happened because of the steep increase in commodity prices December onwards. But we gradually started taking the price increase on a domestic biscuit side. We are through with price increases and the full impact of that is being visible in the quarter two as far as exports is concerned. Right. Where you know, we have spoken to customers and worked on cost optimization. But yes, we have not been able to pass on the entire part of the cost because our customers are already under pressure because of logistic cost and the local benchmark products available.
How will we improve the margin now onwards? Is that as I told you, that on a domestic side of escrit business, we have taken now all the price increases. The full impact of that is being visible in this B. The revenue leverage or revenue growth would help quarter one. Also the one reason of margin getting impacted was our business mix. And the business mix of exports being impacted more in the quarter one, which is being corrected in quarter two will also help us to move towards the targeted 14% EBITDA market. So these are the two things and third is that we’re running a cost improvement program which is called impact and that help us leveraging on the cost side and impact positively on the EBITDA margins.
Unidentified Participant
Understood. And are there any new product launches or brand extensions planned for the upcoming quarters that you see could drive incremental growth?
Manu Talwar
Yes. First, as Ishan was briefing you, we just launched Nature based on the bakery side where we are investing behind that brand and we want to kind of make it clean labor, health related brand. In terms of biscuits, we had clearly decided on a domestic biscuit side that we would, you know, create differentiated products. So we are clearly taking a route of differentiated products to be launched. And so what we launched was shortbread, which kind of has been launched on a quick commerce and I’ve seen very good customer response. Right. And then on the, we have launched for the kits which is on the tractor side.
And these are the mini crackers, which is again we are building it up. And there are. We have again launched on the coconut, which is one of our leading categories or leading varieties. We have launched a coconut with zero malda, which is again shown a very positive response in the market. Right. And so animal cracker for kids shortbread, which is again a no palm oil product and a coconut. These are the three products which we have kind of Launched in the previous quarter. Yes, there are some more launches which have been lined up in this quarter and next quarter.
I would not like to share this B I would also like to highlight as our plant has has been commissioned and that plant comes with a manufacturing capability of rolling out some of the very differentiated products. We won’t be kind of sharing this on this call being confidential. But yes, in the coming months you would be able to see some of those exciting differentiated products being further launched. So yes, very robust journey which has been planned on a new product site which some of them have been launched and which will be built up and there are some of them being planned in the quarter two and quarter three of this financial year.
Unidentified Participant
Sure. Thank you and all the best.
operator
Thank you. The next question is from the line of Ronak Shah from Aquarius Securities. Please go ahead.
Ronak Shah
Yes, thanks for the opportunity. My first question is regarding the competitive intensity. So how you are seeing the competition for both from the legacy players as well as the unorganized small regional players.
Manu Talwar
The competition intensity continues to be high. It has not reduced the last 18 months. Rather if you would have heard the investor call just about 10 days back of the largest player in the industry and we have clearly reflected on the high intensity, the regional intensity which is there. So the intensity continues to be probably I would say at the same level our confidence continues to come through our distribution, execution, e commerce focus and launching differentiated products so that we can build it over a period of time. Right. And expanding through new products. So these are the few actions which we are building and strengthening in terms of build our business.
Right. And that approach also remains on the English organ side as much as on the Clinica physical side.
Ronak Shah
And sir, just add on to that. So have we increased our ATL BTL spans or how we are competing in terms of the.
Manu Talwar
So as far as. This is PTL spends are concerned we are able to get efficiency. So what we have done over the last 910 months we have been able to launch we had a SFA which was helping us in terms of tracking driving productivity efficiency. But now we have rolled out DMS, the votary DMS with almost 600 of our distributors and here we are able to do a better secondary management, better scheme management and claim management and we will also have a visibility of the inventory and the stock outs. So through the dmls we are able to build and we have started to build efficiency on the PTL side on APL side, on the marketing side, we continue to invest behind our brands.
Digital continues to be remain as a large platform to drive consumer connects alongside, you know, outdoor and a bit of a television media.
Ronak Shah
Okay, sir, second question is regarding the margin. So as you highlighted that the two capacities which are going to ramp up and it will take some time to stabilize that. So how you are seeing the margin profile in next one and a half to two years.
Manu Talwar
So you see, as I said, the first step for us after this commodity price impacted our margin was to get back to our margins and then continue to maintain those margin on a consistent basis. But yes, the long term endeavor is very clear that we are a company which is equiforce focused on the revenue growth and margin growth and that’s what we have demonstrated over the past few years. So endeavor will be to also keep strengthening and growing our EBITDA margins alongside growing our revenues.
Ronak Shah
Okay, so sir, can we expect around 15 to 16% kind of range in FY28 with all these initiatives and the efforts?
Manu Talwar
I won’t quote the number on that because we also need to invest behind our growth. But yes, we will continue to build our margins in the next financial year.
Ronak Shah
Okay, thanks a lot sir.
operator
Thank you.
Manu Talwar
Thank you.
operator
The next question is from the line of Resha Mehta from Green Edge Wealth. Please go ahead.
Resham Mehta
Yeah, thanks for the follow up. Just one question since you called out that one reason for the impact on margins was also the lower revenues from biscuit exports. So can you just spell out what is the difference in margins between domestic biscuit business and the export business, the overall domestic business and the export business.
Manu Talwar
So we don’t share margins separately. But only thing I can tell you, domestic biscuit business margin is below our average EBITDA margin and export is about that.
Resham Mehta
Any differential that you want to call out? I mean not.
Manu Talwar
No, as of now we don’t call out that.
Resham Mehta
All right, thank you so much.
operator
Thank you. Due to time constraints we will take that as a last question for today. I now hand the conference over to Mr. Anubhav Bector for closing comments.
Anoop Bector
Thank you everyone for joining us. I hope we have been able to answer all your queries in case you require any further details. You may please contact us or MUFG Musk in time, our investor relations partner. Thank you so much.
operator
On behalf of Vectors Food Specialities Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.