ADF FOODS LIMITED

Recommendation history

• H1 2026HoldADF Foods delivered a strong Q4: consolidated revenue rose 23.7% to INR196.7 crore, EBITDA increased 38.9% to INR34.3 crore with a 17.4% margin, and FY26 revenue/EBITDA grew 15.9%/32.8%. However, FY27 expectations remain highly conditional: management indicated INR925–1,000 crore revenue if the Middle East normalizes, versus only INR800–850 crore if GCC sales remain at zero; the unresolved guidance math and geopolitical exposure argue for a hold rather than a clean buy.
• Q3 2025BuyBuy: Q3 consolidated revenue rose 29.5% YoY to INR191 crore and EBITDA increased 40.6% to INR37.1 crore, with a strong 19.4% margin; 70% of growth came from volumes. The bull case is accelerating Truly Indian distribution, 2,000+ U.S. stores, and Surat capacity; the key tension is that management only sees FY27 revenue at INR925-1,000 crore, while consolidated margins remain below standalone levels and new-brand investments continue.
• Q2 2025HoldADF Foods delivered a strong standalone quarter but a less convincing consolidated read: standalone revenue rose 11.5% to INR 140.1 crore and EBITDA margin expanded 490 bps to 26.9%, while consolidated revenue grew only 0.8% to INR 162.6 crore despite EBITDA margin reaching 22%. The growth pipeline is attractive through new US listings and the Surat frozen-food plant, but margin expansion benefited from mix, cost optimization and approximately INR 4 crore of forex gains, while Costco remains on trial and tariff-driven demand risk is unresolved; stance is hold rather than buy.
• Q1 2025HoldHold: Q1 FY26 consolidated revenue rose 9.3% YoY to INR132.9 crore, while EBITDA grew 20% to INR23.5 crore and margin expanded 160 bps to 17.7%. New Costco and Tesco listings support a better second half, but the call did not establish near-term earnings visibility: U.S. tariffs remain unresolved, Ashoka has slowed, Soul’s three-year revenue plan was cut from INR100 crore to INR50–75 crore, and the new listings begin contributing mainly from Q3.
• Q4 2025HoldHold: FY25 consolidated revenue rose 13.3% to INR589.6 crore, but EBITDA fell 6.3% to INR98.3 crore and margin contracted 350 bps to 16.7%; Q4 EBITDA declined 28.1% year over year. The upside is a potential FY27 revenue target of INR1,000 crore with high-teens EBITDA margins, supported by US distribution expansion, Ashoka recovery and Truly Indian growth, but this remains execution-dependent while Soul is underperforming and brand investment continues to pressure profitability.
• Q3 2024HoldHold: ADF Foods delivered solid topline growth, with Q3 consolidated revenue up 13.8% to Rs.147.5 crore, but EBITDA fell 2.2% to Rs.26.4 crore and margin contracted 290 bps to 17.9%; PAT declined 1.8%. The growth story remains credible through Ashoka, Truly Indian, SOUL and private label, but earnings conversion is currently weak as freight, raw materials, marketing and new-brand investments absorb growth.
• Q2 2024HoldHold: Q2 consolidated revenue rose 29.5% YoY to INR161.4 crore and PAT increased 31.8% to INR19.7 crore, but EBITDA margin slipped 30 bps to 17.2%; H1 EBITDA margin fell 170 bps to 16.7%. The growth pipeline is credible—Truly Indian reached roughly 1,300 U.S. stores and Surat expansion is on schedule—but management maintained rather than raised guidance, while brand investment, freight and hiring continue to dilute profitability.