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ADF Foods — Q4 FY26 earnings call

Call held 14 May 2026

Management summary

ADF Foods delivered a strong Q4 and full-year FY26 performance, driven by robust revenue growth, margin expansion, and strategic brand penetration. The new Surat facility commenced operations, and the company maintained a net debt-free status. However, geopolitical tensions in West Asia significantly impacted sales in the GCC region, posing a risk to future growth targets if not resolved.

Highlights

Strong Q4 FY26 consolidated revenue growth of 23.7% YoY to INR196.7 crores, reaching an all-time high.
Significant Q4 FY26 consolidated EBITDA growth of 38.9% YoY, with margins expanding 190 bps to 17.4%.
Full-year FY26 consolidated PAT (excluding exceptional items) grew 39.7% YoY to INR96.8 crores.
Truly Indian brand won NEXTY Award for Best Breads & Bakery (Tikka Masala Naan) and Freezies Award (Garlic Naan), indicating strong product innovation and market acceptance.
Commencement of commercial production at Surat greenfield facility Phase 1 in March 2026, expected to contribute INR40-50 crores in FY27.

Concerns

The West Asia conflict severely impacted sales in the GCC market, which accounts for ~15% of overall revenues, leading to an 80-85% reduction in shipments in March and April 2026.
Increased logistic costs by roughly 3-4% of total revenue, particularly affecting Middle East shipments, with a potential 1 percentage point increase in overall freight cost.
The company's FY27 revenue guidance of INR925-1,000 crores is contingent on the geopolitical situation improving within 1-2 months, otherwise, growth could be limited to 12-15% (INR800-850 crores).

Key financials

2 periods

Q4 FY26

Consolidated Revenue
₹196.7 Cr
YoY +23.7%
Consolidated EBITDA
₹34.3 Cr
YoY +38.9%
Consolidated EBITDA Margin
17.4%
Consolidated PAT
₹25.9 Cr
YoY +57.6%
Consolidated PAT Margin
13.2%
Standalone Revenue
₹150.3 Cr
YoY +11.6%
Standalone EBITDA
₹36.5 Cr
YoY +24.8%
Standalone EBITDA Margin
24.3%
Standalone PAT
₹30.1 Cr
YoY +40%
Standalone PAT Margin
20%

FY26

Consolidated Revenue
₹683.2 Cr
YoY +15.9%
Consolidated EBITDA
₹130.7 Cr
YoY +32.8%
Consolidated EBITDA Margin
19.1%
Consolidated PAT ex-exceptional
₹96.8 Cr
YoY +39.7%
Consolidated PAT Margin ex-exceptional
14.2%
Standalone Revenue
₹527.9 Cr
YoY +10.3%
Standalone EBITDA
₹131.1 Cr
YoY +24.6%
Standalone EBITDA Margin
24.8%
Standalone PAT ex-exceptional
₹104 Cr
Standalone PAT Margin ex-exceptional
19.7%

What they filed

Q1 FY27: revenue up 25.6%, net profit up 13.3% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	161	147	159	133	163 +1%	191 +30%	197 +24%	167 +26%
Expenses	134	121	134	109	127	154	162	138
EBITDA	28	26	25	24	36 +29%	37 +42%	34 +36%	30 +25%
Margin	17%	18%	16%	18%	22%	19%	17%	18%
Other income	4	4	2	3	6	-4	9	1
Interest	1	1	1	1	1	1	1	1
Depreciation	5	5	5	5	5	5	6	7
Profit before tax	26	25	21	21	36 +38%	27 +8%	36 +71%	23 +10%
Tax rate	25%	25%	21%	28%	26%	17%	29%	26%
Net profit	20	19	16	15	26 +30%	22 +16%	26 +63%	17 +13%
EPS	1.79	1.71	1.50	1.39	2.40	2.04	2.36	1.57

How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence

Capex Capex disclosed
- Greenfield and brownfield expansions (last 2 years) ₹124 Cr
- Surat total investment (Phase 2 completion) ₹100 Cr
- Remaining capex for Surat Phase 2 (pizza base line) in FY27 ₹20 Cr
- Remaining capex for Surat Phase 2 (pizza base line) in FY27 ₹25 Cr
- Brownfield debottlenecking/modernization (Nadiad, Nashik) in FY27 ₹15 Cr
- Brownfield debottlenecking/modernization (Nadiad, Nashik) in FY27 ₹20 Cr
- Balance capex for Surat in FY27 ₹10 Cr
- Balance capex for Surat in FY27 ₹15 Cr
For the full year ended March 31, 2026, stand-alone revenues stood at INR527.9 crores, registering a 10.3% growth year-on-year. EBITDA increased 24.6% to INR131.1 crores, while EBITDA margins expanded to 24.8%, up 280 basis points year-on-year. PAT, excluding exceptional items, stood at INR104 crores with PAT margins at 19.7%.
Debt Debt disclosed

The company's financial position remains strong with a net debt-free balance sheet and a robust cash surplus of INR78.2 crores, thereby providing strong financial flexibility for future growth initiatives.
Dividend ₹3/share (final)

The Board has recommended final dividend of 30% of face value, making the total dividend amounting to 60% for FY '26.
Liquidity Cash ₹78.2 Cr

The company's financial position remains strong with a net debt-free balance sheet and a robust cash surplus of INR78.2 crores, thereby providing strong financial flexibility for future growth initiatives.

Guidance & targets

Capacity

Surat facility Phase 1 utilization Capacity · FY27 · High confidence 35-40%

So the Phase 1, we would expect about close to 35% to 40% capacity utilization in Phase 1.

— Bimal Thakkar
Surat facility Phase 2 utilization Capacity · Q3 FY27 · High confidence 10-15%

Phase 2 will be towards the third quarter of this financial year. So that would hardly be 10%, 15% capacity utilization for this financial year.

— Bimal Thakkar
Surat facility full capacity utilization Capacity · within 3 years · High confidence 3 years

So we are hoping to get to full capacity utilization in year 3.

— Bimal Thakkar

Revenue

Surat facility revenue contribution Revenue · FY27 · High confidence INR40-50 crores

So we expect in terms of revenue around INR40 crores to INR50 crores contribution from the Surat facility in this fiscal year.

— Bimal Thakkar
Surat facility full capacity revenue Revenue · long term · High confidence upwards of INR200 crores

At its full capacity, the Surat plant will give us upwards of INR200 crores in top line.

— Bimal Thakkar
FY27 consolidated revenue (if Middle East improves) Revenue · FY27 · Medium confidence INR925-1,000 crores

So the guidance on the revenue, we've said INR925 crores to INR1,000 crores. That's the kind of band which we are looking at. And we feel fairly confident of being able to achieve it provided the geopolitical situations improve.

— Bimal Thakkar
FY27 consolidated revenue (if Middle East is 0 contribution) Revenue · FY27 · Medium confidence INR800-850 crores

No, 12% to 15% will not get us to that, right? That will get us to more towards the INR800 crores to INR850 crores kind of number.

— Bimal Thakkar
Truly Indian brand revenue Revenue · FY27 · High confidence INR75-80 crores

I mean our estimate is if everything goes well, we are looking at anywhere between INR75 crores to INR80 crores on Truly Indian for this year.

— Bimal Thakkar

Profitability

Surat facility margins Profitability · long term · High confidence similar to existing facilities

So at its full capacity, we expect to maintain the similar kind of margins that we are getting from our existing facilities.

— Bimal Thakkar
EBITDA margins Profitability · FY27 · High confidence high-teen

Well, as the Surat facility would not be fully utilized, but we feel fairly confident that we will maintain these high-teen EBITDAs, which we've been giving guidance for.

— Bimal Thakkar

Growth

Ashoka brand growth Growth · FY27 · High confidence 30-35%

So we expect the Ashoka brand to grow close to 30%, 35% in this fiscal year.

— Bimal Thakkar

Logistic Costs

Freight cost increase Logistic Costs · near term · Medium confidence 1 percentage point

I think you can very well add roughly around 1 percentage basis points in terms of the freight of what we spent right now.

— Srinivas Ayyagari

PLI Incentive

PLI incentive received PLI Incentive · FY26 · High confidence INR16 crores

Yes. So from a PLI perspective, for the full year, our number is roughly around INR16 crores for FY '26.

— Srinivas Ayyagari
PLI incentive received PLI Incentive · FY27 · Medium confidence similar range (~INR16 crores)

Yes, it should be in the same range.

— Bimal Thakkar

What to watch in Q1 FY27

Resolution of West Asia conflict and GCC shipments

next quarter

Current 80-85% reduction in shipments in March/April

Target Resumption of normal shipments to GCC

Why it matters

Critical for achieving the higher end of FY27 revenue guidance and mitigating a significant revenue risk.

I mean if it continues that way, we will have to relook at the numbers and our guidance. But if things stabilize within the next month or so, which we hope, then we would be able to meet our guidance of around between INR925 crores to INR1,000 crores.

Risks & concerns

West Asia conflict impact on GCC sales
high

80-85% reduction in shipments to GCC in March and April 2026 due to lack of shipping availability, impacting ~15% of overall revenues.

Management acknowledged
Dependency of FY27 guidance on geopolitical stability
high

FY27 revenue guidance of INR925-1,000 crores is contingent on the West Asia situation improving within 1-2 months; otherwise, growth could be limited to 12-15% (INR800-850 crores).

Management acknowledged
Increased logistic costs
medium

Roughly 3-4% increase on total revenue, with a potential 1 percentage point increase in overall freight cost, partially mitigated by cost-sharing with distributors.

Management acknowledged

Q&A highlights

7 direct

Surat facility utilization and revenue potential Direct

So we expect in terms of revenue around INR40 crores to INR50 crores contribution from the Surat facility in this fiscal year. At its full capacity, the Surat plant will give us upwards of INR200 crores in top line.

Clarifies the immediate and long-term revenue contribution expected from the new Surat plant, a key growth driver.

Asked by Saurabh Beria

Impact of West Asia conflict on GCC sales and overall guidance Direct

So at the moment, for us, our biggest challenge has been servicing the Middle East market, the GCC market because there is no availability of ships. No one's going there. Few ports are only open. So I would say the GCC business has been impacted by at least about 80%, 85% for us.

Highlights a significant external risk impacting a material portion (~15%) of the company's revenue and its potential to affect overall FY27 guidance.

Asked by Charchit Maloo

FY27 revenue guidance and its dependency on geopolitical situation Direct

So the guidance on the revenue, we've said INR925 crores to INR1,000 crores. That's the kind of band which we are looking at. And we feel fairly confident of being able to achieve it provided the geopolitical situations improve. I mean if it continues that way, we will have to relook at the numbers and our guidance.

Provides the company's ambitious FY27 revenue target but explicitly links its achievability to the resolution of external geopolitical challenges, indicating a conditional outlook.

Asked by Rishi Maheshwari

Logistic cost escalation and impact Partial

The increase has been roughly about 3% to 4% at the moment. Of the total revenue, yes. Markets like the Middle East, which have just started operating, there the freight costs are very high. And it's as I mentioned, it's just 1 or 2 ports that are currently operational. So in those markets, we are sharing the cost with our distributor on a 50-50 basis.

Addresses rising input costs and their impact on margins, particularly for affected regions, and the company's strategy to mitigate this through cost sharing.

Asked by Ankur Gulati

Truly Indian brand growth drivers and consumer behavior Direct

The Truly Indian brand at the moment, the initial traction is more from a distribution point. We have had repeats happening with some of the Costco divisions. So that is very encouraging where we've already had 2 to 3 rotations in some divisions. The other supermarkets, some of them have had repeats, which have happened. Some are fairly new listings.

Explains the current growth trajectory of the Truly Indian brand, emphasizing both distribution expansion and early signs of repeat purchases, alongside favorable consumer trends towards vegan/healthy products.

Asked by Rehan Syed

PLI incentive for FY26 and FY27 Direct

Yes. So from a PLI perspective, for the full year, our number is roughly around INR16 crores for FY '26. ... So this financial year '27 is -- yes, this year will be the last year. And then yes, after that, I don't know what -- if there are any new schemes, which will come in from the government.

Quantifies the PLI benefit for the current and next fiscal year, highlighting its temporary nature and potential cessation beyond FY27, which could impact future profitability.

Asked by Aditya

Ashoka's growth strategy and market penetration Direct

Ashoka continues as I mentioned, the growth on Ashoka is going to come from deeper penetration within the existing stores across all our main markets, new product categories, new products that we will introduce and new markets which we are going to open.

Outlines the multi-pronged strategy for the flagship Ashoka brand, focusing on organic growth through deeper penetration, product innovation, and market expansion.

Asked by Naitik

Plans for Costco entry in UK and new product lines at Surat Direct

So we are based on the success we've had in the U.S., our team in the U.K. is connecting with the Costco buyers and presenting the products there. So yes, we do have plans. ... So we've got a line which is going to be installed in the third quarter of this fiscal year, where we have the capability of making pizza base.

Reveals specific market expansion plans (Costco UK) and new product development initiatives (pizza base line at Surat), indicating future growth avenues.

Asked by Rakesh

2 min read 5 chapters

Detailed narrative

Strong Q4 and Full-Year FY26 Performance

ADF Foods reported a robust Q4 FY26, with consolidated revenues reaching an all-time high of INR196.7 crores, marking a 23.7% year-on-year growth. Consolidated EBITDA for the quarter stood at INR34.3 crores, with margins expanding by 190 bps to 17.4%. For the full fiscal year 2026, consolidated revenue grew 15.9% to INR683.2 crores, and EBITDA increased 32.8% to INR130.7 crores, with margins improving to 19.1%. This performance was driven by an improved product mix, sustained cost optimization, and strong volumes, with 60-65% of the growth being volume-driven.

Surat Greenfield Facility Commencement and Ramp-up Plans

Phase 1 of the Surat greenfield facility commenced commercial production in March 2026. Management expects this facility to contribute INR40-50 crores in revenue during FY27. The plant is planned in two phases, with Phase 1 targeting 35-40% utilization in FY27 and Phase 2 (another product line) aiming for 10-15% utilization by Q3 FY27. At full capacity, the Surat plant is projected to generate upwards of INR200 crores in top line, maintaining similar margins to existing facilities, with full capacity utilization expected within three years. A new pizza base line is also planned for installation in Q3 FY27 at the Surat facility.

Impact of Geopolitical Tensions and Logistic Costs

The ongoing West Asia conflict significantly impacted the company's operations, particularly in the GCC market, which accounts for approximately 15% of overall revenues. Shipments to this region saw an 80-85% reduction in March and April 2026 due to lack of shipping availability. This situation also led to a 3-4% increase in logistic costs on total revenue, with a potential 1 percentage point increase in overall freight cost, though partially mitigated by cost-sharing with distributors. The company's FY27 revenue guidance of INR925-1,000 crores is contingent on the geopolitical situation stabilizing within 1-2 months; otherwise, growth could be limited to 12-15% (INR800-850 crores).

Brand Performance and Market Penetration

The flagship brand, Ashoka, continues to strengthen its presence through deeper penetration in existing core markets (North America, UK, Europe, Australia, New Zealand), new product categories, and new market entries, with a projected growth of 30-35% in FY27. The Truly Indian brand has shown accelerated growth, driven by new listings across leading retail chains like Costco, Raley's, Safeway-Albertsons, and Whole Foods Markets in the U.S., now servicing close to 3,000 stores. Truly Indian is expected to generate INR75-80 crores in FY27, benefiting from the growing mainstream consumer preference for vegan and healthy Indian food.

Capital Allocation and Shareholder Returns

ADF Foods maintains a strong financial position, being net debt-free with a robust cash surplus of INR78.2 crores, providing flexibility for future growth. The company invested approximately INR124 crores in capex over the last two years for both greenfield and brownfield expansions. For FY27, an additional INR20-25 crores is planned for Surat Phase 2 (pizza base line), and INR15-20 crores for brownfield debottlenecking/modernization. The Board recommended a final dividend of 30% of face value, bringing the total dividend for FY26 to 60%.

This is an AI-generated summary of a publicly available earnings call transcript.

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