Yes, the word does mean sisterfucker, literally. The word was used even as early as the 1800s. If you read Lawrence James' book, the 'RAJ', you will find that Bhenchod was used as a common slang even then.The slang is still used across India and Pakistan, more so in villages, by men and women alike.
The pronounciation may change with the region( Baheenchod in UP & Bihar, Bhaincho in Punjab, northern India and Pakistan, and so on...)
by The explorer August 09, 2004