ADF Foods

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.

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.

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).

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.

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%.