ADF Foods –
Q1, FY 25 concall highlights –
Consolidated results ( includes the lower margin distribution business of Unilever brands ) –
Revenues- 121 vs 112 cr
EBITDA- 19.6 vs 21.9 cr ( margins @ 19.6 vs 21.9 pc )
PAT- 14.4 vs 14.7 cr ( margins @ 11.8 vs 13.1 pc )
Segmental revenues –
Processed foods – 103 vs 86 cr. EBITDA @ 23.8 vs 23.1 cr ( margins @ 23.1 vs 26.7 pc YoY )
Distribution – 18.4 vs 26.1 cr. EBITDA @ 2.3 vs 2.4 cr ( margins @ 12.4 vs 9.1 pc )
In FY 24, total revenues from processed foods was 432 cr. Total revenues form distribution business was 88 cr
Company has 02 manufacturing facilities – both in Maharashtra. Exports its products to 55 countries. US, Canada, EU and Gulf region are their primary markets. Current food processing capacity @ 28k MT. Company is setting up a new facility ( Greenfield expansion ) at Surat
Ashoka is a key brand for the company – FY 24 sales @ 254 cr, growing at 29 pc CAGR for last 4 years. Company sells – Pickles, Chutneys, Sauces, Ready to eat curries, Frozen Indian food under this brand
Other brands include – Camel, Aeroplane, Truly Indian, SOUL
Camel and Aeroplane brands are Middle East focussed – mainly selling Pastes, Sauces and meal accompaniments and pickles. Camel is more a premium brand while Aeroplane is positioned in the economy segment
SOUL ( relatively newer brand ) is focussed on Indian domestic mkt. Currently selling premium Pickles and Chutneys. More product launches are planned in future. Aim to generate 100 cr sales from this brand in 3-4 years
Truly Indian brand primarily offers ready to eat meals, pastes and sauces. Has strong presence in Germany. Now launched in USA. Working hard on increasing the distribution reach of this brand in US
Company also has a distribution business of select Unilever brands like – Lipton, Taj Mahal, Red Label and Knorr
Guiding for a revenue growth of 20 pc + for FY 25 with high teens EBITDA margins
Company lost sales of around 8 cr in Jun 24 due non-availability of containers for exports
Company has incurred greater advertising costs wrt its SOUL brand in India in Q1. Also the freight costs in Q1 were higher vs LY. These two were the primary factors leading to EBITDA margin compression ( over and above the loss to sales due to logistical issue )
Company’s H2 is always better than H1. Generally, Q1 is the weakest Qtr
At present, the SOUL brand is doing an annualised sales of around 7-8 cr. This can grow rapidly on a low base. Similar is the case for Truly Indian brand were the growth rates can be high on a small base
Distribution of Unilever brands in US helps the company push its own ASHOKA brand into various stores. Both these businesses compliment each other
Surat – Greenfield expansion should go live in Sep 25. Additionally, brownfield expansions are on at both their Maharashtra manufacturing locations
The brand Ashoka targets NRIs. The brand Truly Indian is targeted at foreigners where in the spice levels etc are toned down. Plus the Truly Indian brand is positioned at a premium vs the Ashoka brand
At present, not investing aggressively behind Camel + Aeroplane brands ( both focussed towards Middle East region ) . However, both brands are growing nicely at 8-10 pc / yr kind of rate
Disc: holding, biased, not SEBI registered, not a buy / sell recommendation
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