Earnings Call Transcript - XNSE:BECTORFOOD 2026-11-06

Operator

Ladies and gentlemen, good day and welcome to Mrs. Pector's Food Specialties Ltd. Q2 and H1FY27 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 the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Anup Bector. Thank you and over to you, sir.

Anup Bector, Head of Investor Relations

Thank you so much and good afternoon, everyone. On behalf of Mrs. Bector's Food Specialties Limited, I extend a very warm welcome to all participants. On our quarter 2, And half-year financial year 2027 earnings call. Joining me on the call today are Mr. Manu Talwar, our Chief Executive Officer, Mr. Ishaan Bector, Whole-Time Director, Mr. Savir Bector, Whole-Time Director, Mr. Praveen Kumar Goyal, Whole-Time Director, and Mr. Anshul Rastogi, our Chief Financial Officer. We also have with us our Investor Relations Advisor from MFMUSG in time. I hope everyone has an opportunity to review our Investor Deck and press release, which have been uploaded on the stock exchanges as well on our company website. On our last call, we had indicated that quarter two would carry a larger inflationary impact than quarter one, and that our endeavor would be to protect margins while continuing to invest behind growth. We are pleased to share that the quarter has delivered on both counts. The company reported revenue from operations of 630.5 crores, our highest-ever quarterly revenue, a growth of 14.3% year-on-year and 14.9% over the preceding quarter. EBITDA at Rs. 82.5 crores grew 19.1% year-on-year. With the EBITDA margin at 13.1%, an improvement of 50 basis points over Q2 of the financial year 2026, and held at the Q1 level, despite a visible steeper cost environment, FAD grew 25.2%, to Rs. 45.7 crores. On a 24-month view, revenue is up 27%. For the first half as a whole, revenue stood at Rs. 1179.3 crores, up 15.1%, while EBITDA grew 21.2%, and PAD grew 25.4%. With profits growing meaningfully faster than revenue, sustaining this through two consecutive quarters of rising inflation, we believe the clearest evidence that the pricing discipline and cost culture we have built are now part of how company operates. In Q2, our biscuit business, both domestic and exports grew in the low teams, excluding agencies, while our bakery business sustained its strong momentum with high teams growth. The quarter was more challenging than we were anticipating. A below-normal monsoon weighed on the rural sentiment, while sharp food inflation squeezed household budgets. Despite this, domestic demand remained resilient, led by our premium and value-added portfolio, modern trade, quick commerce, and a continued recovery in the institutional business. Barring a further escalation in the West Asia conflict or a sharper turn in food inflation, we remain optimistic about the second half, supported by the festive season, our innovation pipeline, and sustained brand investments. Internationally, shipping conditions became more difficult during the quarter. The West Asia situation sharply impacted vessel availability and freight rates, adding to pressure on margins. Even so, exports continued to grow, and the U.S. market sustained its momentum. Helped by new launches, such as peanut butter crackers with leading retailers, we will continue our disciplined calibrated approach, focusing on markets with structural profitability and high growth potential. Innovation remained central to our portfolio. English oven entered the pav segment in Mumbai with zero maida pav and added a peanut butter on-the-go brownie, nature-based launched pre-sliced whole wheat sardo, and Kribika launched coconut cream. These premium launches improved our mix and support profitable growth. We continue to invest in our brands. Krimika ran its school shuru back-to-school campaign on TV and on ground ascended the Kranz Khol Satch Bol campaign and held the Dal Lake activation in Kashmir. For festivals, we ran Rakhi campaign and English Award took part in Dahi Handi and Ganesh Chaturthi in Mumbai. Brand building remains a key investment. Our new Kolkata and Ghappoli bakeries units are scaling up well, strengthening our presence in East and the West. Mumbai remains the key market for English oven, where we will lead with premium products. Before I turn to the numbers, a brief word on the operating environment. India's growth remains resilient, with real GDP growth of 7.6% in the financial year 2026. However, headlong consumer inflation rose from around 4.4% in June to 5.5% in September 2026, the highest in the nearly two years, driven by edible oils, sugar, and cereals. Crude oil at the multi-year high has also pushed up inflation, freight, and packaging costs. In Q2, our price increases and cost savings under project impact offset most, but not all, of this impact. As a result, gross margin dipped from Q1, and our other expenses rose with higher freight and fuel costs. These pressures have continued into Q3, and we expect margins to remain under pressure in the near term. We will continue to take calibrating pricing and cost actions and expect recovery to build progressively as price increases, annualize, and the project impact interventions mature. Financial Performance Moving to our financial performance for the quarter, the consolidated revenues for the current quarter stood at 630.5 crores versus 551.4 crores in the Q2 FY26, thus registering a growth of 43% on a year-on-year basis and 14.9% on a sequential basis. Thank you. EBITDA stood at 82.5 crores, registering a growth of 19.1%. The EBITDA margin for the quarter stood at 13.1%, and expansion of 50 basis points over Q2 FY26. PAD stood at 45.7 crores for the quarter, registered a growth of 25.3% on a year-on-year basis. PAD remained for Q2 FY27, stood at 7.3%, again 6.6% in Q2. Moving to the half-year performance, the consolidated revenues of H1 FY27 stood at 1179.3 crores versus rupees 1024.4 crores in H1 FY26, registering a growth of 15.1% on a year-on-year basis. EBITDA stood at 154.6 crore, registering a growth of 21.2%. The EBITDA margin for the half-year stood at 13.1% and an expansion of 70 basis points over H1 FY26. Pat stood at Rs. 84.5 crores for the half-year, resisting a growth of 25.4% on a year-on-year basis. Pat margins for H1FY27 stood at 7.2% against 6.6% in H1FY26. With this, I request you to open the floor for questions and answers. Thank you so much.

Operator

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 Binnay Shukla from Phillip Capital, India. Please go ahead.

Vinay Shukla, Analyst — Philip Capital India

Hi, sir. Thanks for the opportunity. The question is on the biscuit category. So, since the Biscuit has grew close to early team, so I just wanted to understand that how is the competition intensity in your lower-northin center, India? Because given the core market for Bartle, who is planning for the IPO, and also for Britannia, is a key focus market. I just wanted to understand how is the competition intensity in the lower north and central India.

Manu Talwar, CEO

So, yes, the intensity in the biscuit in the north part of India has been high, and rightfully, as you said, it's likely One of the large players going for IPO, and otherwise also the large player intensity along with the regional players continues to be higher. But I will take this opportunity on briefing on some of the strengthening of the foundations for the growth of the business. At the start of the year, we clearly said that we have brought more aggressive focus in the expansion of the distribution. Within 400 to 500 kilometers of our Rajpura plant, right? And I'm happy to share that in terms of distribution expansion, we had taken a target of 40,000 built outlets of 245 rupees and above billing. So we have moved well. We have added over 30,000 outlets already. We are close to now 345,000 outlets. Which we have added in the defined geography. So the distribution effort continues to be, we have taken our 40,000, and we were very clear we need to maximize addition in the H1. And we have added almost 30 out of 40,000. We have around 3,45,000, the outlet. So that's on the distribution side. Secondly, we have also added almost 10% to 15% additional distributors. to ramp up our, you know, kind of distribution effort. Thirdly, we, as we briefed you last time, we had launched some of the premium variety on the quick comms, and just post my call, I'll take help of Suvi to elaborate on that, and there is a very aggressive plan to build that journey kind of further to drive the optimization. Thank you. Has, on the biscuit side, done a low-teens kind of growth, and we expect this journey to kind of only build further and get towards a mid-teens kind of growth. I would request, Suveen, if you can brief further on the premiumization, new launches, likely new launches.

Savir Bector, Other

Yeah. Hi. So on quick commerce, you know, like we briefed before, we had launched shortbread as a new variety, which was with 25% butter and no palm oil. That has been a great success for us. We continue to drive growth on that particular product. On the health space, we had also launched Nomada Coconut Biscuit, which these two products are the two largest contributors on the BigCommerce platform for our organization. So, with signals that customers were looking for a change within the space, you know, with the growth that we are getting from that segment, and particularly those categories, we are now about to launch three new products, which will be innovation on quick commerce. And we are also launching two new seasonal collaborations with, again, on quick commerce platforms, which we are planning to do at a national level for your Christmas celebration. So, again, this is at a national level with one of the leading quick commerce platforms. So, the growth is going to be very aggressive for us, and what we realized is that innovation and premiumization is the way to succeed in this channel. Hope that answers it.

Manu Talwar, CEO

So, Vinay, I will just comment then. I'll take this opportunity as Q&A starts on behalf of entire Vector senior leadership who is present, wishing you and all of you who are present on the call a very, very happy Dhan Peres and Diwali festival to you and your families. So we can, yeah.

Vinay Shukla, Analyst — Philip Capital India

Yeah, happily to you and Dr. Dean. So, just again on the succession plan, there is a lot of charter about retirement planning, like your retirement plan. So, can you give some clarification about how the succession plan is going to be there going forward?

Anup Bector, Head of Investor Relations

So, I'll take this. So, you know, I mean, Mr. Vector has always, you know, looking at building the business stronger, and, you know, we are currently, you know, in the situation where, you know, our CFO has also just joined us, and we have also, hello, hello. Hello, you can just have an audible, yeah, there was some disturbance. So, we are in the position of building up the organization, and what currently we have not yet taken a call on, you know, succession planning, but what we are now currently seeing is that there is, you know, enough intervention happening Everything from, you know, from the team, which is currently available, and to drive the business very, very strongly. And whenever there's a chance when Manuji, the CEO position, opens out, he will still be with the company for a long enough time, you know, as a support. So currently, we have not taken up anything on this, you know. But we continue to build up our organization wherever we feel there's a need.

Manu Talwar, CEO

With the permission of the managing director, I'll just add a more thing. You see, we have two large verticals of business. We have bakery, which is English-oven, and then B2B site, and we have on the biscuit, we have exports, and we have India Primitar biscuit business, right? So, in terms of leadership, we have Ishan Vector, who leads the bakery side, both English oven and the bakery, and on the biscuit side, Suveed Vector was leading the international export business, and whether English oven or export. We have seen a very remarkable growth over the past few years. The domestic biscuit business also now will be overseen by Suvir Vector, right? So Suvir will now mentor both as well as this business and be kind of further strengthening the leadership under... You know, for both the businesses, both the segments and the four businesses, and we have done it also over the past few months' time. And we have more to share with you in the next quarterly call.

Vinay Shukla, Analyst — Philip Capital India

Sure, sir. A last question for my hand, sir. Just a person, given the first half close was close to 15%, with a EBITDA margin of 13.1%. So, just wanted to understand the second half outlook from revenue as well as the EBITDA margin side.

Manu Talwar, CEO

On the growth side, I think our growth momentum will continue. We should end this year in a mid-team kind of growth for the full year. On the EBITDA margin, again, as we briefed in the last quarter also, that although the commodity volatility is very, very tough and challenging, as all of us know, but through our pricing effort and our cost effort, the impact program, we have been able to manage, improve the EBITDA margin over past year and maintain it equal to quarter one. The target is... Absolutely similar in the quarter three, where the blunt of commodity impact is probably the steepest, but our aim is the same that we maintain our EBITDA margins, and for quarter four, rather, we think that we should be able to improve our EBITDA margin, as we said in the start of the year, and try and get closer to 13 and a half, 14, although the situation has got tougher, but our aim remains the same.

Vinay Shukla, Analyst — Philip Capital India

And so, sir, I have one more question if moderator will allow Finney asks, that is on export business.

Operator

Sir, should you have a follow-up question, please be joined with you.

Amit Purohit, Analyst — Ilara

Sure. Thank you.

Operator

Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. Next question is from the line of Harit Kapoor from Investec. Please go ahead.

Harit Kapoor, Analyst — Investec

Hi, good afternoon, and congratulations on good numbers. Just two questions from my end. First was, in the same way that you explained the shape of Biscuit's growth, that it's been early teens on domestic, could you just help us understand the shape of the bread's growth also? This 22% number is exceptionally strong. I understand that QSR has picked up, so Insti business also would have done well, but if you could just help us understand the shape of Insti and retail business on breads, how they've kind of shaped up both quantitatively and qualitatively. That's my first question. Thank you.

Manu Talwar, CEO

Okay, so on an English-oven side, it has been a very, very robust growth, both in volume and value. Even the volumes have grown in mid-teams, and the value has grown in a very high-teams, right, for English-oven. Institutional victory, again, it has grown in volume in a... Mid to high teens, and so as value brought in mid to high teens in the quarter two over the same period last year. So, Bakery, English, I would say that has been on this momentum for the last many years, five, six, seven years. Even if I look at cases of English, it has been high teens for the last five years' time, and it continues that journey, and I would take a minute after finishing this, and Yes, institutional battery has kindly changed the trend in this financial year, and we see that progress to happen. But on English, as Hadithi asked, I would request Ishan Vector to kind of, you know, elaborate a little more.

Ishaan Bector, Other

So, Harit, basically both, I would say, English oven and institutional businesses have grown pretty much at par. I think what's, you know, working for us is distribution expansion that we are sort of doing. Like I've always been saying, I think English oven has a lot of room to grow as we are still young in the market. Right. The Qcom boom is also sort of, you know, helping us grow English oven stronger. I think Nature Baked as a brand has picked up very well. In fact, you know, we are now. Doing about, uh, um, you know, uh, You know, one, one and a half crores a month with Nature Baked started as a new brand. Our frozen business, albeit small, again, QCOM driven is showing very promising signs. So I think from English oven, it's a matter of distribution expansion in GT. Though GT is, you know, under pressure from QCOM. But we are, I would say, still weak as compared to our potential in GT. Qcom is rapidly growing, and also we are looking into categories like added frozen, sourdough, which is going to be our next big bet. I don't think sourdough will really add in terms of value so much as the market is still young, but it will create English Oven as a very future-ready organization in the bakery space. On the B2B front... I think things are looking very promising. As far as we understand from all our partners,

Savir Bector, Other

everyone seems very bullish on store expansion.

Ishaan Bector, Other

You know, same store growth is a matter I think they can comment on better as to sort of, you know, what the coming quarters will say. But what we see is that the number of stores or let's say the value of sort of CapEx coming in to open new stores is not going down. So, it seems promising for the business.

Anup Bector, Head of Investor Relations

Oh, and another thing is that, you know, actually our bakery business is double the size of institutional business as of now. So, we are, you know, growing much faster in the bakery business than the institutional business.

Harit Kapoor, Analyst — Investec

Great. The second question was on exports. So, it seems like this quarter has been slightly lower on the growth side because domestic seems to have done a little bit better. I just wanted to understand, you know, after a strong pickup in quarter one, has there been any constraint this quarter? Is it largely on account of, you know, the fact that plate has been a challenge or shipping product has been a challenge? And just in terms of, you know, relationships with customers, do you remain intact? You know, just some flavor on, you know, why the growth has been a little lower this time and how are you kind of thinking about it going forward?

Savir Bector, Other

Yeah, hi, Harith. So, growth has sort of been intact, but yes, there has been. Due to the Middle East crisis, so our business towards the Middle East, although it was a small contributor, And when you look at the rate, Had skyrocketed in the middle, now they are showing a little signs of easing out. The orders in hand, but that ended up delaying the order cycles in terms of we were working on FOB booking. So the customers picking up the containers, there was a slight delay there. And when you talk about the relationships with the customers, I think they're more stronger than ever before. We are regularly in touch. Meeting our customers very regularly, whether it be at trade shows or visiting the local markets as well. So our relationships are very strong, and we will continue to drive. We are actively working on building it as a very strong business for us.

Manu Talwar, CEO

Then our outlook for the year still is in mid-teens for sports, right?

Harit Kapoor, Analyst — Investec

Okay, that's great. And one short one, if I may, was just on pricing, you know, at an overall level. I mean, even the first half, it seems like volume in both breads and biscuits is during the growth. I just wanted to understand, could we see H2 having a higher pricing component given the inflation on both the categories? And in that context, could you see a slightly elevated revenue growth versus maybe the mid-mean number that you are kind of looking at? Just some thoughts on that, and that's my last question. Thank you.

Manu Talwar, CEO

As of now, our forecast, it's still about mid to high teens kind of growth in S2, right? And because somewhat of price increase, we took in Q2 towards the end of the quarter, too, and there's only the partial one, which is going to Q3 now. And so as of now, mid to high teens is a forecast from our side in terms of growth.

Harit Kapoor, Analyst — Investec

Okay, wish you all the best, and wish you very happy Diwali as well. Thank you. Thank you.

Manu Talwar, CEO

Thank you very much.

Operator

Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. Next question is from the line of Archel Pal from Monarch Net Worth Capital Limited. Please go ahead.

Archit Pal, Analyst — Monarch Net Worth Capital Limited

Yeah, hi. Good afternoon, all. So, my question is related to last question. How much price increase was implemented during the quarter and how much it is expected for the full year?

Manu Talwar, CEO

Three. So in the quarter two, a price increase was approximately 3% on our, over the Q1 quarter.

Archit Pal, Analyst — Monarch Net Worth Capital Limited

Okay. And for the full year, how much we are expecting?

Manu Talwar, CEO

On a full-year basis, it should be, say, around 5% to 6% price increase, around 6-ish, at Hapnar.

Archit Pal, Analyst — Monarch Net Worth Capital Limited

Okay, got it, got it. And so, on the distribution front, I just wanted to understand how many retail outlets do we currently cover across biscuits and bakery business, and what is our target for expanding this reach over next 2 to 3 years?

Manu Talwar, CEO

So, I'll start with bakery first. So, bakery, you know, first thing I just wanted to clarify one thing, you know, the reach definition has changed a lot. You know, distribution is all about the reach, and we must all understand that, especially in the bakery side, quick commerce has become the largest driver of the reach for the bakery product. Just to give you a perspective, then every quarter, the contribution of quick commerce has been growing, and now contribution of organized trade in the segment is sitting at 43-44% for the quarter two, right? And it has been rising quarter on quarter. Alongside on both the P2C businesses also, the contribution has been growing up, and now the contribution of quick commerce. To both the B2C businesses, Bakery and Biscuitbook together, it's sitting about 22%, right, as of now. So first is that, just to be clear that today, in today's time, there's a large driver of distribution is quick commerce, not only the general. Let me come on the general trade side. On the general trade side, as I said, From time back, that we had taken a target that our net output over 245 rupees for output for the month, we will add 40,000 more output, and we have already added 30,000 output in the quarter, right? And on the English home side also, Over the last one year, we have added close to 12,000 to 13,000 outlets, right? And which is a very aggressive increase of almost 20-32% in terms of outlet addition. Where do we want to reach? So, on a numeric region, as per AC Neeson, we have almost 7 lakh outlets and above. And Baytree doesn't have that equivalent number on that side. 45,000, 50,000 outlets reach which we have. Where do we want to reach over by 2030? So, in a basket on the numeric reach, definitely we want to get closer to 900,000 to a million outlets. On the bakery side, large part of that reach, again, I will say, is being driven by quick commerce. We are opening new. Cities, as we opened Calcutta, we opened Hyderabad last year. Now, this year, our Sapoli plant has got commissioned, so there will be a lot of drive in terms of driving distribution in Marashtra and adding a large number of upgrades there. So, distribution will continue to remain a very high focus, and as the numbers I've shared with you are the reflection of that.

Archit Pal, Analyst — Monarch Net Worth Capital Limited

Okay, helpful, sir. And so, last question is on volume. So, what kind of volume we saw this quarter and specifically in the domestic business?

Manu Talwar, CEO

On a domestic biscuit side in the quarter two, our volume growth was just about very low single digit kind of number, right? It was around, sorry, it's about four to five percent, right, kind of growth, which was mid single digit kind of number on the domestic biscuit side.

Archit Pal, Analyst — Monarch Net Worth Capital Limited

Okay, understood. Thank you so much and wishing you a happy Diwali to all.

Manu Talwar, CEO

Thank you.

Operator

Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. Next question is from the line of Sandeep from LKP Securities. Please go ahead.

Sandeep, Analyst — LKP Securities

Yes, thanks for taking my questions. Congratulations on the good set of numbers. My first question is on the gross margin depth, which we have seen from 47.2% in Q1 to this quarter around 46% and just wanted to have an idea about the breakup. So is it largely on the raw material side or is it more on the packaging side?

Manu Talwar, CEO

It's both on the RM and PM side, right? Because we have seen a spike in the packaging cost also. And yes, there has been hike in the – it's a mix of both, which is there. And basically, as the commodity prices are going, our recovery to price... Was 1% short, which is showing to you, in our 1% gap, which has come versus Q1 to Q2 in our gross margins.

Sandeep, Analyst — LKP Securities

Okay, so this gross margin will continue around these levels, during Q3 and Q4, or do you expect further downside? We should be able to maintain the current levels. Okay, and your EBITDA margin guidance was last quarter around 14% at the exit of Q4FR27. Do you still maintain 14% EBITDA margin guidance moving forward to F428?

Manu Talwar, CEO

It has a guidance for definitely quarter four, we had given 14%, but we have seen a very unprecedented The commodity growth in quarter one and it's also in quarter two. Yes, that made the whole scenario very, very challenging. Good news is that we still improved our margin over last year, and we have been able to maintain margin in quarter two, also equivalent to quarter one, and that's the same objective for quarter three. As I said earlier, target is to move up from 13, 13.1% to somewhere 13.5% and maybe closer to 14% in quarter four. And we're targeting for the same.

Sandeep, Analyst — LKP Securities

Okay. And sir, my last question was on the highs, price highs, which you are planning. So these price highs are largely coming in which of the categories or what is the mix of your grommet cuts versus price highs? How are you managing the current raw material pricing scenario? So can you just give me break up on both bakery as well as on the biscuit side of the portfolio?

Manu Talwar, CEO

Okay, so biscuit size, as we know for us and industry, contribution in 5 and 10 category is almost 70 odd percent. So, in this 5 and 10, there is no other way to recover your higher material cost than other than de-grammage, right? So, we have to do de-grammage and that's what industry also does.

Sandeep, Analyst — LKP Securities

So, what could be the all-part number of all-part number of what? Grammage, percentage-wise, how much are you doing?

Manu Talwar, CEO

So I won't have a ready number on this, but I would request Anshad to, you know, get back to you on that number. And as far as English Open is concerned, the increases pass through the price increase, the MRP increase in the bakery products by us and the industry. So there entirely goes towards an increase in the price.

Sandeep, Analyst — LKP Securities

Okay. Okay. Thank you so much. That's it from my side, and wishing everyone a happy Diwali, and thank you so much for taking my question.

Manu Talwar, CEO

Thank you. Happy Diwali.

Operator

Thank you. Next question is from the line of Amit Purohit from Ilara. Please go ahead.

Amit Purohit, Analyst — Ilara

Sir, thank you for the opportunity. Sir, just on this bakery side, which you highlighted, QuickCom has a larger domain. How is the margins in this segment, especially on the QuickCommerce? Does that mean that over a, say, medium-term period, the overall margins of bakery could be better because of QuickCommerce, or it is margin-neutral in that sense? Itan, would you like to take care?

Ishaan Bector, Other

Yeah, for us, margins are better in QCOM because of efficiency. That comes in, I think our biggest cost is the cost of replacement, right, which we sell in the market and comes back. I think QCOM as a channel is able to plan procurement far better, you know, using, you know, technology. So I think that inefficiency brings in a lot of benefit to us. And I think also from a freight perspective, it is better. So as of now, Qcom is better in terms of higher in terms of margins. But I don't know going forward how that would be. Because, you know, we continue to invest also very actively behind our brand. Um, uh, uh, and, uh, uh, I think that is also helping us grow the brand bigger in Qcom.

Amit Purohit, Analyst — Ilara

And over the medium term, given this scenario and the capacity, bakery business can continue to grow at 20% plus, right?

Ishaan Bector, Other

See, I think capacity, uh, capacity will, uh, you know, we will have to sort of focus on Both outsourcing and creating capacity in-house as well, you know, primarily because we are a B2B and a B2C company. And, you know, what we have seen is, you know, via third party, we prefer to not have our core products being outsourced primarily on terms of, you know, quality control. So, I think in Mumbai, you know, we should be good to continue to grow strongly for a couple of years, you know, but there would be, you know, maybe a certain pocket, like I would say Punjab could be, you know, a place where we might have to, you know, add capacities in the future. So, I think that is, you know, we will have to do a mix of outsourcing as well as capacity expansion to continue to grow at 20%. Because you know, you must understand bakery is a very regional business, right? So if you are doing well in one market, having capacity in another market is not really going to help you.

Amit Purohit, Analyst — Ilara

Sure, sure. And sir, just on the biscuit, you indicated a volume growth of somewhere close to about mid-300 decades on this quarter. So, the price increase, is it a fair assumption of 15, 7, 8% kind of a price increase, and you're saying much more, some more price increase is yet to be taken, right? That is how it is, right?

Manu Talwar, CEO

Yes, there will be, Amit, some price increase. Being taken in October month, right? Definitely, because the kind of spike we had in commodities. So we have some, most of the price increase coming in October and maybe some partially in November.

Amit Purohit, Analyst — Ilara

And you think that the demand environment is still okay, and your initiatives on distribution and all, that will ensure that the growth momentum in the biscuit part, the domestic will continue, and export will come back as because of the deferment of shipments. Correct. Correct. Sure. Thank you. Thanks a lot. And lastly, sorry, I missed one. On a medium term, that 14-15% EBITDA margin guidance should hold good next year or maybe a year after that. Yes, yes, yes. That remains. Thank you, sir. Thank you. All the best, sir. Thank you.

Operator

Thank you. Next question is from the line of Saurabh from Samikra Capital. Please go ahead.

Saurabh, Analyst — Samikra Capital

Yeah, hi. Thanks for the opportunity. You know, first of all, my question was, I just wanted to understand the geographic expansion dynamic which we have in place. So, predominantly, we are present in the north. But if we plan to expand in, say, other regions, we just have a new plant in Kharpoli. So what is the mix that we are targeting in the near or mid-term based on, you know, revenue contribution, geographic-wise, if we talk of the domestic markets?

Amit Purohit, Analyst — Ilara

So, I think you're asking relating to English over?

Manu Talwar, CEO

Yes, yes, correct. Right? Yeah, so I'll request Ishan to take that.

Ishaan Bector, Other

Sorry, I, you know, just lost your voice for a second. Can you say again, please?

Saurabh, Analyst — Samikra Capital

So, I just wanted to know from a... Hello?

Ishaan Bector, Other

Yeah, yeah, yeah.

Saurabh, Analyst — Samikra Capital

So, like, from a geographic expansion point of view, what, you know, contribution mix we are planning in the mid-term to, say, near-term in terms of revenue coming from the west or revenue coming from the north, given we are trying to expand into other regions?

Ishaan Bector, Other

See, north, you know, like I said, Punjab is also a very big market. You know, we have just started another partner unit in Lucknow, right? Again, so that again, I'm considering to be North. So I think, you know, between North and the rest of the country, it will still be about 75-25 or 80-20. It will continue like that because even in North, right now, you know, we were, let's say, sending product from Delhi into Lucknow. Now we have a partner unit in Lucknow, which is going to grow further markets into that area. So I would see a lot of growth continuously coming from the north, and obviously north has a higher base. So I would assume still it should be around 80-20.

Saurabh, Analyst — Samikra Capital

And secondly, on the pricing point of view, we see a lot of inflationary pressure which is building up. And also, our English-owned brand is slightly on the premium side. And what I've seen at the ground level is that people, you know, usually trend to downgrade when it comes to consumption of bread or other products. We have players like Britannia or other local manufacturers. So do we see the impact of this on our volume demand first?

Ishaan Bector, Other

No, you know, so we are definitely a premium player. But I think with times changing, I think, you know, we ourselves are also adapting. So today, English Oven has, you know, products which are at the 10 rupee price point, 20 rupees price point, 25 rupees, 30 rupees. And then you get into the, you know, more premium varieties which are sitting at 60 bucks, 70 bucks. And then the sourdoughs that sort of come in. So, you know, wherever our trade channel needs support in terms of the right SKU and mix of products, we are, you know, providing that. I think that has changed. Over the past few years, that whenever support is required, like, you know, with QCOM, I think what we're seeing is a lot of premium products is moving into QCOM, right? So, to support GT, you know, we are being very conscious of providing that value product as well.

Saurabh, Analyst — Samikra Capital

Perfect. And just one last question. So, you know, from a margin point of view, as already I talked about inflation, and given the expansion which we are planning, a lot of ad spend needs to be done across. So, do you think like the current ad spend which we are doing, the same level is expected to sustain over time? Because if you plan to increase on the marketing side, I guess there would be some pressure on the EBITDA margin. So do you think the 14-15% target remains sustainable over time, given... The inflationary and the expansion plans which we have in place.

Manu Talwar, CEO

No, I think the 14, 15 percent EBITDA very much remains as our target to get there, right? The first milestone is always 14 percent and then move it to 15. So I think we're very firm and committed as per our plan that we need to move to those EBITDA percentage levels over the next coming years.

Saurabh, Analyst — Samikra Capital

Perfect. Okay. Thank you. That is a happy Diwali, happy event to you and you too. Thanks.

Manu Talwar, CEO

Happy Diwali. Thank you.

Operator

Thank you. Ladies and gentlemen, we are requested to please limit your questions to two core participants. Next question is from the line of Naveen from iThought BMS. Please go ahead.

Amit Purohit, Analyst — Ilara

Yeah, same audible. Hello?

Archit Pal, Analyst — Monarch Net Worth Capital Limited

Yes, you are. Yes, you are.

Naveen, Analyst — iThought BMS

Yeah, congratulations on a set of great numbers, sir. So, I just want to understand one question. It's more of an extension of a previous participant regarding the pricing in the bakery segment. So, my understanding is that over the years, you know, like, you know, the perception of the English and brands about the cycle premium and we've added recently to our bakery portfolio on the B2C side on the premium end as well. So, I just want to understand how you've seen, like, you know, pricing as a lever in this market across maybe the last decade, decade and a half. How easy was it, has it been for you guys to raise prices, like, you know, before, and if it's become any easier? And let's just say, maybe if you can recount one or two episodes from the past where inflation has been very high, how you've seen price heights play out and how you expect it to play out, you know, considering you're seeing inflation go up in commodities.

Anup Bector, Head of Investor Relations

So, you know, while, you know, price inflation is very unfortunate, but then, you know, it hits. Everyone, you know, there are no random price rises which are taken. So, price rises are taken for any of our businesses very carefully, very thoughtfully, and, you know, and minimal, right? So that it does not impact our customer, and in fact, being in a food processing, you know, manufacturer, we are able to give better efficiencies to a customer, you know. I mean, if relatively they see how the inflation is hitting the kitchen and how the inflation is going to hit the bread and biscuits, it's always going to be lower because we bring in a lot of efficiencies to the system. So, effectively, you know, we have been taking price rises during extreme situations, and that is a moment when the customer is already adapted itself and understands, you know, that this has happened, and moreover, the complete trade is also aligned towards it, you know, everybody understands it. So, we really don't face such difficulties. You know, which are there on demand or anything like that, on price rise.

Naveen, Analyst — iThought BMS

So, my small follow-up to my first question would be, is it right to interpret the statement as we take price-size whenever we see inflation, but when inflation goes down, we don't necessarily need to pass everything back to the...

Anup Bector, Head of Investor Relations

So, inflation, you know, if you look at trends, inflation, yeah, in the case, I mean, no, in case there are, like when the GST reduction happened, we passed down the benefit, right? Right. When there was inflation, we decreased our pack sizes, we, you know, increased our prices, but as and as the DST came in, we promptly gave back to the customers. So, you know, it is something which you can't, you know, our pricing is very, you know, carefully taken, you know, depending on the pricing of the raw materials. So... So, you know, it is not that if there is a reduction of price, we will not get back. I mean, if there's a reduction of raw material, you have to adapt back and, you know, give some offers, give something else to the customer, back to the customer.

Naveen, Analyst — iThought BMS

Got it. So my next and final question would be regarding our new product portfolio in the bakery segment itself and quick commerce. And, you know, I just mentioned earlier in the call regarding how the returns are better with respect to quick commerce. So is it understanding right that the margins in quick commerce are actually better than JT? And the second question would be, would that help us be a little more aggressive in terms of like what kind of innovation we can do and what kind of premiumization we can do on that channel?

Manu Talwar, CEO

So I'll quickly answer the first part and then Ishan will take over. Our margins are better in quick commerce. Our marketing investments are much higher in quick commerce versus the general trade channel. In terms of premiumization, new product, I would request Hishan to take it up.

Ishaan Bector, Other

So, on premiumization, like I said, we've already been doing a lot, right? We launched NatureBait, which is, again, like a clean label brand. We've gotten into Frozen, you know, and all of our products are over 100 rupees in the Frozen category. You know, we've launched Sourdough. So definitely that premiumization journey is happening. And I think with Qcom being there, I think what works for us is that we have a strong market share. Right. And what works is it is the best place to grow premiumization today. Right. So I think we have an immense opportunity to expand premiumization in the coming years. As long as you know, we stay relevant and continue to grow with with QCOM. So you know, we'll definitely see that premiumization journey coming in from there.

Naveen, Analyst — iThought BMS

A small follow-up, is there any product in the pipeline you can just maybe highlight or anything you aspire to do on QuickCon, anything at all?

Ishaan Bector, Other

You know, I think we have our hands full. You know, we have nature bake, we have sourdough, and we have frozen. So it's, you know, three things that we are working on simultaneously. I think what you will get to see is product introductions, you know, in these because, like I said, you know, our product, we have just entered, right? Right. So in, in frozen, we are just, uh, you know, doing four or five SQs in terms of frozen products, right? How can we expand that range? Um, uh, and I think like, uh, uh, you know, there's, you know, from a bakery perspective, I would say probably what you have when you go to a good bakery, you know, in a metro city, uh, you know, you can today industry can bring out those kinds of product experiences through Qcom as well. Right. So, um, so I think premiumization, you know, on one side, we used to think is that selling a multigrain bread is premiumization, which it is. But today you can go beyond that. Right? So, so just from that perspective.

Naveen, Analyst — iThought BMS

Thanks a lot. I hope you have an amazing session ahead and obviously you're great here.

Amit Purohit, Analyst — Ilara

Thank you.

Archit Pal, Analyst — Monarch Net Worth Capital Limited

Thank you.

Operator

Next question is from the line of Yash from Adelwee's Public Alternatives. Please go ahead.

Yash, Analyst — Adelweiss Public Alternatives

Hi, team. Thank you for taking my question. So, just two quick questions. First on bakery, like you said, quick commerce has been good for us. So, I wanted to understand like right now, everyone in the industry is trying to focus a lot on bakery and also some new players are entering into the space. So, have you seen any impact of that competitiveness on our numbers or the growth? Or how should we see this competition growing on our numbers or maybe growth of the business?

Ishaan Bector, Other

No, you know, I think competition has been aggressive even in the past. Yes, I would say, you know, we are definitely seeing startups coming into QCOM because it has solved a distribution problem. But, you know, let's say NatureWake was a response to competition coming in and offering cleaner label products, right? So I think as long as we are able to adapt. Uh, as long as we are able to innovate, um, I don't see a challenge there. I think the, you know, equal fight is constantly there in general trade where we are also doing a lot of hard work. In fact, I feel like a lot more hard work happens in general trade. That's where we don't see new players coming in. You know, that's where the sort of legacy players are more fighting for market share. But on the QCOM bit, I think as long as the organization is willing to adapt, to innovate, I think, which is what I've been talking about, right, with Frozen, with Sourdough, with Nature Baked, I think we can fight out the newer players. You know, so.

Yash, Analyst — Adelweiss Public Alternatives

Makes sense. And second on the biscuit side, like now in the domestic biscuit, the price parity is somewhere or the other there. So, I want to understand like how to see this 5-6% volume growth going ahead or maybe end of the quarter, how it has been when the price parity was there in the market. So, how should we see the volume growth going ahead in the H2?

Manu Talwar, CEO

So, okay, there's almost a price parity now, right? Our prices are very close to the best of the competition. In terms of volume growth, maybe around close to 5%, the objective is to keep growing this to a high single digit and get close to double digit. That's a journey we are on, and that's why investing both in brands. Yes, the objective is that this 4-5% volume growth should get to a high single digit and then cross over to double digits, you know, over the next few quarters.

Yash, Analyst — Adelweiss Public Alternatives

Got it. Sir, but just my question was more from a sense of now we have seen price parity, so any early signals of that high single digit already coming into the picture for the biscuit business?

Amit Purohit, Analyst — Ilara

Sorry, I didn't get you.

Manu Talwar, CEO

Would you just repeat it?

Yash, Analyst — Adelweiss Public Alternatives

So what I'm saying is basically mid of the quarter or maybe end of the quarter, we were already seeing some pricing parity in the biscuit side. So as we also seen then the volume growth coming back into the picture of high single digit, what we are estimating going ahead.

Manu Talwar, CEO

The price parity has been there. So, it's only the price increase which is coming in now again in the quarter two and quarter three because of commodity price increase, right? And the volume increase largely is led by the distribution expansion, right? And so that's a key driver of the volume growth, which is expanding distribution and throughput for outlet. Our focus is also on our bigger outlet, which we call Primita Preferred Outlet. And they contribute as of now 13% to 14% and we want to take it to 20%. So these are the two key drivers of volume growth that we are aggressively working and investing behind. And we will keep up moving up the volume growth, as I told you, from 5% towards the higher single digit.

Yash, Analyst — Adelweiss Public Alternatives

Thanks a lot, that's all from mine. Happy Diwali and happy Dashera to the team.

Manu Talwar, CEO

Thank you.

Amit Purohit, Analyst — Ilara

Happy Diwali.

Operator

Thank you. Due to interest of time, that will be the last question for today. I now hand the concerns over to the management for closing comments.

Anup Bector, Head of Investor Relations

Thank you, everyone, for joining us. I wish everyone a very happy Diwali and a happy New Year. 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 in time, our investor relation partner. Thank you so much.

Operator

Thank you. On behalf of Mrs. Vector, Food Specialties Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.