Mrs. Bectors Food Specialities Limited (BECTORFOOD) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Mrs. Bectors Food Specialties Limited Q3 and 9 months FY '24 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded. This call may contain some forward-looking statements, which are completely based upon our beliefs, opinions and expectations as of today. These statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. I now hand the conference over to Mr. Anoop Bector, Managing Director. Thank you, and over to you, sir.

Thank you so much. Good afternoon, everyone. On behalf of Mrs. Bectors Food Specialties Limited, I extend a very warm welcome to all participants on Q3 FY '24 financial results discussion call. Today on this call, I have with me Mr. Manu Talwar, our Chief Executive Officer; Mr. Arnav Jain, Chief Financial Officer; Mr. Ishaan Bector, Whole-Time Director; Mr. Suvir Bector; Whole-Time Director; Mr. Parveen Kumar Goel, Whole-Time Director. We also have Orient Capital with us on the call, who are our Investor Relations adviser. I hope everyone had an opportunity to go through our investor deck and press release that we have uploaded on exchanges and on the company's website. It gives me immense pleasure to announce that Q3 FY '24 has been another strong quarter for us on the revenue as well as on the margin front. Our revenues increased by 17% and PAT by 25% on Y-o-Y basis. Our continuous focus on premiumization of the portfolio by offering various premium and mid-premium category of biscuits, including cookies, creams, crackers and digestives as well as premium category of bakery products, including whole wheat, multigrain and footlong bread has helped us to improve our margins on a sustainable basis. We remain committed to distribution and marketing-led growth. We are on track to achieve direct distribution of over 3 lakh outlets by the end of FY '24. General trade complemented with our efforts on expansion in modern trade and e-commerce channels has helped us to penetrate our presence across new and existing markets. We have enhanced our advertising spends in media and digital with focus on building premium range. The company had its first-ever media plan on top Hindi channels featuring Kareena Kapoor Khan on Star Plus, Sony Entertainment and Zee. Introduction of new festival packs on occasion of Diwali, supported by Diwali franchise, are our gates to enhance festivity spirit among consumers. As category leaders, we had an integrated marketing campaign on bun grade to burger grade with bus shelters, digital marketing and influencer marketing campaigns. Further, we ran consumer offers on our English Oven bakery products. The company has launched new health products like Bakefit millet cookies and atta kulcha along with multigrain breads, which contains a level grain. This will further aid in driving premiumization. Our export business has demonstrated robust growth because of increased demand in Canada, North America, South America, Europe and Australasia. This is fueled by premium range of cookies and cream categories. We are focusing on building Cremica as a brand and continue to remain a preferred partner in white label. In the current quarter, we have commissioned a bakery plant in NCR, which will help us to cater to the demand of the national capital and the surrounding region where our products continue to witness significant demand. In Rajpura, 2 more lines are being added and estimated to be completed by Q2 '24-'25. Along with that, we will also be setting up a new bakery unit in Mumbai and a biscuit factory near Indore, Dhar in '24-'25 to strengthen our supply chain in existing and emerging markets. Also, I am pleased to share that we have declared interim dividend of INR 1.25 per share. Now I will discuss the financial performance, starting with Biscuits. Our Biscuit segment reported a revenue growth of 22%, which stood at INR 268 crores in Q3 FY '24 as compared to INR 219 crores in Q3 FY '23. This segment has grown by 71% over Q3 FY '22. Our Biscuits segment witnessed high double-digit growth in Q3 FY '24 as compared to Q3 FY '23. Bakery. Our Bakery segment grew over Q3 FY '24, stood at INR 146 crores against INR 127 crores in Q3 FY '23, thus registering a growth of 15% Y-o-Y basis, including Retail Bakery and Institutional segment. This segment has grown by 58% over Q3 FY '22. The consolidated revenues for the current quarter stood at INR 429 crores versus INR 368 crores in Q3 FY '23, thus registering a growth of 16.6% on a year-on-year basis. EBITDA stood at INR 61 crores, resulting in a growth of 19.4% from the corresponding quarter on a year-on-year basis. EBITDA margin for the quarter stood at 14.3%, that is a growth of 40 bps on a year-on-year basis. PAT stood at INR 35 crores and saw a growth of 25% on a year-on-year basis. Our PAT margins for Q3 FY '24 was 8.1%, registering a growth of 60 bps on yearly basis. Moving to 9 months FY '24 financial performance. The consolidated revenue for 9 months FY '24 stood at INR 1,218 crores versus INR 1,016 crores in 9 months FY '23, thus registering a growth of 19.8%. EBITDA for 9 months FY '24 stood at INR 184 crores versus INR 127 crores in 9 months FY '23, with margins of 15.1% as compared to 12.5%, resulting in a growth of 260 bps year-on-year basis. PAT for 9 months FY '24 stood at INR 107 crores versus INR 62 crores in 9 months FY '23 with improvement in PAT margins to the tune of 270 bps year-on-year basis. Our focus remains on distribution and premiumization supported by marketing to penetrate and capture new markets. This will assist our company to increase its footprint not only in North India, but also penetrating West and Southern parts of the country where the product is equally liked by the consumers. With this, I would request to open the floor for question and answer. Thank you so much.

[Operator Instructions] We take our first question from the line of Percy Panthaki from IIFL Securities.

My first question is on the gross margins. Your margins have contracted on Q-o-Q that is sequential basis, Q2 versus Q3. So just wanted to know, one is, whether it is largely because of the Biscuit business or because of the Bakery business? I know it might be a combination of both, but which is a larger factor here? And secondly, what is the underlying reason for the same?

So Percy, Manu this side. Our margins have contracted over the previous quarter, primarily on account of 2 reasons. And the first reason in Q3, there has been little upsurge in the commodity prices, right? And second, which is both on the Bakery and Biscuit side. And second reason is that Q3, we have seen a high amount of competitive net, especially in the domestic biscuit business, where by grammage offer or free grammage offers by the competition has kind of increased, and so have we also participated in this. So these are the 2 primary reasons of seeing that contraction in the quarter 3 over quarter 2.

So sir, Britannia mentioned in its results call that it has taken cut in its average selling price sequentially by about 3%. So would we also have taken similar action. And also despite the price cut taken by them, their gross margin actually has sequentially increased and the reason they gave for them is that the input costs have actually sequentially come down and they have come down a little more than the decline in the average selling price, and that is what is driving the gross margin. So why such different kind of movement because you have the same commodity basket here.

So our commodity basket is -- sorry, Anoop, please go ahead.

So Percy, sometimes what happens, when we have done hedging on raw materials, we can always -- there can be different policies on hedging, right? So on wheat front, our hedging was very different, because the crop of wheat what we had anticipated was going short and government was not having much of stock, but then the government's policies to containerization, giving stocks into the market and things like that. So there are certain times that hedging might be different. Otherwise, there is no principal difference in the changes. So most of the -- if you look at, our most impact has come is mostly on the sugar pricing or a little bit on the wheat front. So now what has really happened is that on the bread side, we were able to take a price rise, but on the biscuit side, there was more competitiveness, right? And we had to respond to the market needs. So that was probably one of the reasons. Otherwise, everything is normal. We do not feel that the inflation is high. The inflations are under control. They are better than what we had experienced earlier. So I would say that it could be more because our probably hedging might be carried on for a longer period time, where we could see a better position coming up going forward.

Understood. So basically, you are saying that your consumption cost this quarter was higher than the spot prices of the commodities. Is that understanding correct?

You have to also see one thing. See, till Diwali, we were also doing a lot of exports of biscuits, which are feeding the market in the export side, right? And those cookies are very highly priced cookies, like Diwali gift packs are highly priced. Christmas, orders are executed by the month of September because they have to reach their destinations before November, and they have to be lying on the shelves at that time, actually. So in our case, because of exports, our NSR in exports in the second quarter will always tend to be higher than the third quarter. So you will also see gross margins reflecting adversely like this. But overall, there is nothing which is substantially anything wrong. I mean, that's what I'm saying.

Understood. Understood. So basically, the current quarter gross margin that you have, should that be an indicator of what we can expect over the next 3, 4 quarters? Or do you think...

Vis-a-vis the quarter last year, I think they should be okay.

Yes. I'm just trying to understand how I build my estimates. I mean I understand on a Y-o-Y basis for this quarter, it is okay. But going ahead, should we take this quarter's delivery as a representative of what can be achieved going ahead as well? Or can it be higher than that?

On an integrated trend side, yes, you can take that.

The next question is from the line of Harit Kapoor from Investec.

I just wanted to get your sense on the volume growth trend for the quarter. So again, going back to what market readers said 3% odd-cut. Would this indicate that biscuit volume growth would have been, say, 25%-odd for the quarter? Is that the right way to think about it?

So our prime growth this year on the biscuit side has been led by the volume growth. So we haven't taken any big changes in the prices, both on the domestic and export side. So the revenue growth which you are seeing in quarter 3 and the YTD side is primarily led by the volumes.

Got it. Got it. And incrementally, is there a need in your view to change the price table or you already adjusted that through higher promotions grammages, et cetera?

So as of now, as I said in the previous question also, especially on the domestic biscuit side, we and the competition are both offering free grammage, right? And from a per gram perspective, consumer is getting a better price. So quarter 3 as well as in the current scenario, there a lot of free grammage offers are being given by us and the competition. And that should be true for this quarter, also quarter 4.

On the Bread side, Anoop you mentioned that some price increases you've been able to kind of manage. Is that the one we got at the beginning of the year? Or is there an incremental price increase you see in breads?

No, no. So we had a selective price increase in the Northern India in the month of December. So it was not all across, but there were selective SKUs. We were able to take some price increase and that too in this quarter, primarily in the [indiscernible] business.

Do you see the benefit of that for English Oven to come in more so in Q4, if not for Q3?

Yes, we showed some marginal improvement on account of the price increase. And in the overall Bakery business, primarily the price increase we are able to take is only in the North India on certain areas. So there will be some marginal improvement, not very significant at the moment on account of price in quarter 4.

Got it. And the last thing of mind was on the distribution side. I mean you've done a phenomenal job in the last 18 to 24 months on driving distribution expansion and you're going to get to that 3.2 lakh outlet number by the end of this year. So I was just wondering whether you've kind of chartered out plans for next year and if they are shareable right now in terms of what kind of outreach you want next year and going forward?

So I just want to kind of brief that on selling and distribution side, we continue to progress well. And as we had committed in the starting of last financial year, April of '22, that our direct reach outlets from 116,000 outlets at that point of time should almost double by March of '24. So we have reached, as you saw, 250,000 outlets by December. And as our Managing Director said, we feel very confident that we'll be crossing 300,000 -- 3 lakh outlets by March and almost getting close to our target of doing 310,000-340,000 outlets in terms of driving a direct reach of outlets. In terms of next year plan, definitely, there is a plan to continue increasing our reach, and we are in the front of finalization of that plan rather we have leading over the next 10 days to 2 weeks to finalize that. And we should be very happy to share our plans for the next year and next 2 years in our next call.

Got it. And the last thing, if I may, was in the context of the competitive environment that you're seeing right now, especially in domestic biscuits. Is there a risk to your kind of 14.5%, 15% kind of margin range holding up over the next few quarters? You think that, that is a range that -- a band that you will continue to hold going forward as well as you see it now?

We have always kind of maintained that we will be maintaining and doing our best to deliver EBITDA margin in the range of anything between 14% to 15%. And so our endeavor and confidence as of now is that we should continue to deliver 14% and upwards kind of EBITDA over the next few quarters.

The next question is from the line of Amit Purohit from Elara Capital.

Congratulations on good growth. Just wanted to get your sense on how do one look at the growth environment over the next 1 year or so, especially on the domestic biscuit side? And also on Bakery, what has driven the Bakery growth if you could qualitatively highlight for both the segments, what has been the key growth driver?

So on the overall side of the company, I would say that we have been maintaining that our endeavor to we get closer to mid-teens kind of growth and that's how we are driving and delivering, and that is broadly our plan to stay close to mid-teen kind of growth as an organization to deliver that kind of growth. Coming on the domestic biscuit side, where 2 trends are very, very clear in the market, and we have also seen the results of various companies coming out. But definitely, on the food FMCG side, we've seen clearly a pressure on the consumption, right? And we have seen pressure on the demand side. So there is a bit of slowdown, which is clearly Bakery, being seen across food FMCG category. Alongside, we are also seeing on domestic biscuit side, which I mentioned earlier, there is a fair amount of increasing competition intensity and better offering to the consumers, right? But we are very sure that this trend is not here to stay, another quarter or two, we should see a correction in this trend and getting back to the better growth for the industry and for ourselves. Our endeavor to drive the growth, which we have been maintaining, has been on the 2 key actions, which is distribution and second is supporting that with brand marketing, which again MD had elaborated in their call. So whether it's -- and we started our marketing advertising. Also on the television media alongside digital media as well as on the press side. So these are the 2 input activities which we will continue to invest in and focus to keep building our infrastructure, which is necessary for the growth. And although there is a bit of a stress on food FMCG goal, especially on the Biscuit side, but our premiumization and our new product introduction is clearly helping us to continue our journey of growth on the domestic biscuit. On our English Oven Bakery side, I would request Ishaan to step in and also share that how that part of the business is performing and the how growth is coming in there.

Yes. Thank you for your questions. So on the domestic -- on the Bakery side, we are signing very well in the North market, where we are focusing on up-country territories. In fact, we are also now, with the Bhiwandi plant coming up, putting a lot of focus on the Punjab market as the next lever of growth, as for us at the moment, this is a virgin market. So that's where our focus is going to be is to sort of expand distribution, expand our reach, number of routes and number of outlets. And that is what is going to bring new outlets and new volume to the system. As far as our existing markets of Delhi, Bombay and Bangalore are concerned, we are focusing on increasing our distribution. In Delhi market at the moment, we are still covering about 55% of the market, and we still have a long way to grow. So the focus is going to be on building the right infrastructure.

Sure. Just for the quarter, would it be safe to assume that the branded English Oven could have done better than the QSR, because we are seeing some slowdown in the QSR category.

No, actually, both have done similar. You are right that the brandage that the institutional business has seen a slowdown. But as we were always mentioning that we are focusing on adding new products, new product innovations to new customers and new products to existing customers. I think we are doing that also very successfully, which is why we have -- even though the QSR industry is a little muted at the moment, we have also still grown higher than the market.

Sure. And sir, just on the ad spend, what would be probably our ad spend to sales ratio? And how do we see it for the next year with the now increased media spend that we're doing.

So on the B2C businesses, which is domestic biscuits and English Oven Bakery business, we have now almost gone close to -- on our advertising side, we have almost gone close to 3.5% of the spends on above the line and then we do obviously close to 5% to 6% this year. But we have been scaling up our investments on the ATS side, which on these 2 businesses are now standing close to 3.5%.

Sure. And sir, the last one, if I can ask on the capacity expansion. So I saw 2 things which are adding 2 more lines in second half of FY '25 in Rajpura and Kolkata new bakery unit. Could you share some details in terms of the amount of CapEx which it would entail for FY '25 additional of these? And also, what would be the capacity like?

So in terms of investing in the manufacturing line, where we are investing, right, we have always updated you that we are building up a plant in Ahmedabad, which is a separate plant, right? And that's under full swing of construction, moving very well. This will be commissioned in the next financial year. Second, a large investment which we are [indiscernible] is on the Bakery side, which is in the Mumbai Khopoli region. And there, again, the work has started there, and that also will be ready towards the end of the quarter or in the quarter of the next financial year. We are adding 2 more lines as you mentioned in Rajpura and these 2 lines will be ready in the H1 of the next financial year. And Kolkata, we are on the verge of closing and starting, and that itself again will be ready by quarter 3 of next financial year. You can see that some of our large project investment on the NCR was shared in the speech that the NCR plant has been commissioned in the quarter 3, and that is up and running.

So basically also Manu I think Kolkata is a very small investment. It's just a plant that we are trying to feed the QSR business because they are showing very aggressive movement in the Northeastern side. So it's a very small investment what we are doing. So it's not a material investment.

So our overall investment in the full financial year, including the lines which we've already commissioned in Rajpura in the month of July and August, the total investment in 2 financial years will be close to INR 500 crores, right? A little over INR 500 crores. So that's the kind of investment we are doing to augment our capacities and to ratify the supply chain to feed into our growth plans over the next few years.

And this INR 500 crores will also be there in FY '25, right? I mean, it's '24, '25 combined, right?

Combined, yes.

This is '24, '25, yes.

Yes, 2 years combined.

[Operator Instructions] The next question is from the line of Abhishek Maheshwari from SkyRidge Wealth Management.

Sir, you spoke about margin improvement -- margin sustainability through premiumization. Can we also expect some margin improvement to come in through the benefits of scale, because as we understand, we would have hoped okay, gross margins will stabilize at maybe 45% levels. But as you scale, as you improve your volumes, there would be a benefit of lower other expenses compared to overall revenue. So can we expect the margins to go to maybe 16% level coming few years?

So as I'm sure you would kind of appreciate that we, as a company, are growing well and that's what our aspiration we had. We want to continue going at close to mid-teens level, where we have grown so far over the last 18 months much better than that. While we are getting the benefits of scale and the volume increases, definitely, we are getting, but you must appreciate, as I stated in the previous call, we are also upping our investment to drive this growth, whether it's the S&D side or on the marketing side. So it is very important for us to also continuously invest in the brand and in the distribution if we need to keep progressing fast. And I think that I'm sure you'll be very appreciative for a company -- any company to literally double the direct reach outlets in 24 months, right? But yes, that takes investment on the area distributors. Alongside, we also brief on every call that last year, we implemented the SFO, sales force automation with partners. This year, we are in the journey of implementing distributor management system with a partner [ Gokhale ], which is a leader in that category. We've already done the first 2 modules with over 500 distributors. And by March, we would have covered distributors covering almost 75% of our revenue. So there's a lot of work happening on that side in terms of digitization, so that we can also integrate the distributors on account of tracking secondary sales, screens, promotion, claim management and order management. So yes. So keeping all that mind and that's what we -- at the end of the day our endeavor is to at least for the next few quarters to deliver EBITDA margins of 14% plus.

Understood. My second question is, sir, now that we are focusing on scaling and setting up new plants in the key geographies that we plan to enter that is South and Maharashtra, right? So in this area, are we taking enough land to accommodate future expansion in the facility also? So today, if we start small, but tomorrow, if the market picks up, will we have enough land to accommodate future debottlecking in this facility?

Yes, we are doing that. Anoop, would you like to answer that regarding the outline...

Yes, I'll take this. So what we currently do is, in fact, if you look at, there are 2 greenfield projects which have come up. One is in Indore for the Biscuit side, and there is a greenfield Bakery project, which is in Khopoli. All these places, in fact, the infrastructure can handle double the amount of volumes for the Biscuit side, and around 35% to 40% additional on the Bakery side, around 40%. So basically, these facilities, the buildings we have constructed are for much larger capacities. So the cost of project has become higher because the complete infrastructure around it has been created for a bigger capacity. And in Indore, we do have land available. And in case in Khopoli, we need land, we have surrounding land available for growth. In fact, there will not be a problem there.

The next question is from the line of Kaustubh Pawaskar from Sharekhan by BNP Paribas.

Sir, my question is on Bakery business. Correct me if I'm wrong, capacity was the constraint for us in this business. And now we have come up with a new capacity in NCR. So considering the demand what we are getting in this region, should we expect Bakery business performance to improve from the quarters ahead?

Ishaan, would you take it? Or you want me to take it?

Yes. So even on the Bakery side, we are targeting to grow in mid- to high-teens. And we have been guiding on this growth for some time now. Definitely, I will not deny that there is an opportunity as we have a lot of room for expansion. Like I mentioned that now that we have capacity available, we are opening Punjab. We have already appointed people. Our teams were in Punjab just a couple of days ago, appointing distributors, right? And in fact, Punjab is going to be a territory where we are from day 1 going into a new way of working, which is through complete automation and visibility on to secondary performances. As you know, we are stepping in our back-end infrastructure on the IT side is set up to track secondary sales. So we are very excited about this opportunity. What we are also seeing as feedback, which comes from territories outside of our core market, which is Delhi-NCR is that our product is very well accepted. Some of the new products that we have launched, some products being like atta kulcha and another variant of pav have been very well accepted in outstation market. So I think we have the kitty, I think we have the strong backend. We have built a team to expand into new territories. So yes, we are excited about the growth. But as a management guidance, I mean, we would still say mid-teens to high-teens growth.

Sir, my second question is on your premiumization. As sir mentioned in his initial comment that premiumization is also helping us to drive growth, also helping us to have a better competition in that. I just wanted to understand what is the contribution of premium products to your Biscuit and Bakery portfolio?

So on the premiumization side, we have improved both on the Biscuit and Bakery side in terms of premiumization. In case of our premiumization side, over the past year has improved price flows to 15% to 17%. So if it was 100%, it has gone to 115% or 116%. So that premiumization continues to be a focus for the company, both on the Biscuit business and... [Technical Difficulty]

I am sorry to interrupt you, Manu sir, but your voice is breaking up, sir.

Can you hear now?

Yes, sir.

Okay. On the premiumization, we continue to make progress. And as I said on the Biscuit side, our premiumization over last year has further improved by 15%. So if it was 100% last year, it has gone to 115%. And so is the case in Bakery, there is an improvement in the premiumization percentage over the last financial year. So premiumization continues to be a key focus area for our consumer businesses, both on the Biscuit and Bakery side.

[Operator Instructions] The next question is from the line of [ Mansi Thakkar from BOTH Capital ].

Congratulations on the great set of numbers. I had 2 questions. Just to extend the previous question as far as ad spends are concerned. If you can just help me with the number or percentage of what will be the planned percentage of the ad and digital media spends for the next 2 years as a percentage of revenue?

So over the last 2 years, we've literally come up to the level of 3.5% on the consumer businesses and literally grown these spends at a pretty quick speed. Our aim over the next, I won't say, over the 3 years' time, would be to scale these spend of close to 5-odd percent, right? So aim of the company that we know we need to invest in our brand. So gradually take this to 4% and then 4% to 5%, but over the next 3 years' time, our aim is to take investment in the brands through the ATL route to close to 5%.

Okay. All right. And the next question is relating to the Bakery segment. If you could just help us or throw some light upon what will be the percentage of products returned or unsold considering the perishable nature? I mean any number or a percentage if I can get to?

So this returns because of short shelf life across the industry, this number kind of varies between kind of 7% to 9%. And we are also within this range in that. But yes, definitely we are putting continuous effort and we have seen some good results how to keep bringing this down over a period of time.

The next question is from the line of Priyank Chheda from Vallum Capital.

Sir, I'm repeating a question again from the previous participant. You did mention the contribution to the premium biscuits portfolio has grown at 15%. If you can help me what is the contribution in your total sales of this premium portfolio? That is question number one.

Sorry, our overall current premium contribution on our domestic biscuit side is approximately around 34% to 35%.

And what was this 2 years ago or, say, last year or whatever number you think, sir?

So you see, exactly a year back, we were close to 30% to 31%. So basically, we have moved from 30% to 31% to close to 34% to 35%. That's the journey we have done.

Got it. Clear. And the second question is on the current growth, which is volume driven. If you could help us dissect it further whether this growth is -- it's, of course, driven by distribution, but what would be the growth contributor from the existing markets or maybe a repeat sales growth or maybe SSG growth within your current stores, that would be great.

So because as we are opening aggressively new outlets in new territories, so approximately the source of growth, you can say around 65% to 70% is from the -- 2/3 is from the existing outlets and then 1/3 is from the new outlets in new territories.

The next question is from the line of CA Arun Maroti from Subh Labh Research. The current questioner's line has got disconnected. So we move on to the next question from the line of Chirag Shah from White Pine Investment Management.

Yes. Apologies for some disturbance, if there is. Sir, 2 questions. One, so how do you define premiumization or premium portfolio? And how frequently you revisit the definition? That would be first. May I come with the second question?

So the definition of premium, so premium cream, premium cookies, premium health, these are very well defined, and we follow the AC in front of that to stay uniform for the industry. So we made this change about 2 years back, and we are now following the Premium segment as assets are defined in the [indiscernible].

Okay. So we are following that. Okay. Great. And just if one has to assess the impact of premium -- the rising premiumization, what is the right metrics we should look at? Because your revenue growth will be a function of volume plus pricing plus premiumization, right? Gross margin is a far better reflection of your premiumization strategy or it is. So how should one assess the premiumization strategy that you are adopting? So internally, what is the metric that you use to assess whether the strategy is working to your desired level? Let me rephrase the question.

So internally, how do we track because these categories are well-defined asset, and we follow [indiscernible] on all the 3 category of premium. And we primarily look at and we put a target of improvement in premiumization in these 3 categories and the growth, right, which has to be higher than value and other segments. And that's how we measure whether we are progressing well on that or not. So this journey of 30%, 31% to 34%, 35%, which I said is close to 15% improvement over the last year is a reflection of that journey, whether we're moving in the right direction or not.

So it's assets on your gross margins or gross contribution is not that important a function for you? That is the right way to look at it, given that you are in the growth phase? I'm more referring to that part because your ambition is to grow at a reasonable fast pace, gross contribution from the premium or premiumizing portfolio, let me use that word, is not a primary area of focus. It's more about how much that share is going up. Is this the right way to look at it?

No, that's not. You see, first thing, fundamentally, the premium segment gross margins are better than value in the mass segment. That's a Step A, right? And for Step B is that through the AC Nielsen data, we all know the premium segments in the industry is growing better than value and the mass segment. That's B. And that's the reason based on this, and we as a company, as you know, we are more premium and value-led market, and we are not so much in the mass segment, which is glucose, right? So based on this, we set up our growth targets of higher growth on premium segments as well as growth in the old premiumization percentage, which helps in our revenue growth as well as helps in our margin growth.

Okay, sir. Sir, I'll take it offline later on with you. This is helpful.

The next question is from the line of Saket Saurav from [ Sagari Capital ].

So there's a question pertaining to a gourmet chips that I have come across, let's say, some kiosk at Delhi Airport. So it is under Opera brand, and it had Bector Cremica printed on it. So is it part of this listed entity?

No, there is no relationship between that company and this company. It does not belong to our group. That belongs to my brother. So there is no linkages between Mrs. Bectors Foods and Opera.

The next question is from the line of Bhavesh Jain from Devi Investment Advisers.

So just wanted to talk about like we mentioned that premium biscuits' contribution to the overall revenue has been around 35% and has registered around 15% growth year-on-year. But if I can recall the contribution remained around 36% in Q1. So on a sequential basis, if I see, are we seeing some factors that is hindering the growth of premium biscuit contribution to the overall sales?

No, I don't think it was 36%. We can check it again because our last year premium...

I'm talking about Q1, sir, Q1.

I'm also talking about Q1. You'd have to give me opportunity to get back after checking the number, because on a YTD basis and on a quarter-on-quarter basis, we are on now 34%, 35% on our premium percentage, which for the last year same quarter was around 31%. So Bhavesh, we will check and get back to you on that, but that should not be the case.

Okay. And my second question is like in our previous calls, you mentioned around expanding into the lower part of North and seeing high-growth opportunities in Mumbai and Bangalore market. So can you touch upon like what is the status and how it is shaping out?

So journey of South and West is shaping up well. As you know, we launched in the last financial year in the 3 cities of Bombay, Pune and Bangalore, right? And this year, we have added another 12 cities. And we are now in the 15 cities of South and West markets, right? In terms of outlets also, so our unique build outlets for the South and West have touched about 20,000 outlets and that also has kind of grown well in terms of journey on the South and West side. In terms of journey on the North side, so we have kind of moved. From last year, we were approximately -- we have now moved to coverage and to almost 208 districts now. And on all-India basis, last year exit last quarter, we were around 269 districts. And now in this quarter 3 exit, we are close to 340 districts. So our district coverage also on an overall basis has improved on the last year basis, right? So both on South and West, moving from 3 cities which we launched last year, now we are in 15 cities. Outlet coverage -- the build outlet coverage on a month-on-month basis is around 20,000 outlets. On our overall district coverage, we moved from 269 to close to 350 district coverage now on an overall basis compared to last year same quarter.

[Operator Instructions] The next question is from the line of CA Arun Maroti from Subh Labh Research.

Congratulations on a good set of numbers and good top line growth. Sir, my question is with regard to the Walmart that I would like to know the status with the Walmart currently.

So we are currently working with Walmart in their one specific SKU, which happens for Christmas, but we are aggressively working with them to extend this relationship to daily usage products also, which will be sold on their shelf. So rather than just working on supplementing Christmas requirements for them, we would also -- we're trying to work with them on daily consumption products. So currently, this is a relationship which is happening there, but we are very confident to take this relationship forward not only with Walmart, but also with other large retailers in U.S.

Okay. And sir, if you can share some more light on the Bake Walk concept that we played...

Yes, Ishaan, can you please...

Yes. So as we have always mentioned that Bake Walk is completely on the -- from pre-sale to oven model. And it's in line with our strategy of getting into a complete bakery format, which is ambient products, frozen products of all nature by the sweet of [ jaggery ]. What impact we generally get from Bake Walk is what we also execute in the market and has also helped us bring a lot of new products into the market for our B2B customers. So that is one big positive that we see. Other than that, we are still currently operating 4 stores. The focus is to improve the model, to work on improving sales per store and getting the right mix to the Board, we think about expanding this or scaling this business. For us, the key focus is going to be how to grow as a bakery brand, both on the B2B and the B2C products.

Okay. Got it, sir. And on the business side, we are willing to invest around INR 30 crores. So that will be on the Khopoli plant or something else?

Please come again.

Yes, we are willing to invest around INR 30 crore on the [indiscernible].

On what, sorry?

[indiscernible]

So let our CFO Arnav Jain explain you this.

Yes. This is basically a subsidiary company, which is based out of Bombay. And the entire bread business that is managed from the western part of the country. So that is the managed through [ Big Best ].

So it will be for the Khopoli or something else?

Sorry, come again?

Whether this will be invested in Khopoli or some other area?

Khopoli, only Khopoli.

Ladies and gentlemen, in the interest of time, we will take that as the last question. And I would now like to hand the conference over to Mr. Anoop Bector for closing comments.

Thank you, everyone. I hope we have been able to answer all your queries. If any further questions are there, please feel free to contact our Investor Relationship partner, Orient Capital. Thank you, and best wishes to you.

Thank you. In case of any further query, you may write to [email protected]. And on behalf of Mrs. Bectors Food Specialties, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.