ADF Foods Limited conducted its Q1 FY27 earnings conference call on July 30, 2026, with management including Mr. Bimal Thakkar (Promoter, Chairman, Managing Director and CEO), Mr. Srinivas Ayyagari (CFO), and Mr. Sumer Thakkar (Promoter, Vice President, Sales and Strategy).

Financial Performance

Consolidated Results:

  • Revenue from operations: INR167.3 crores, up 25.9% year-on-year
  • EBITDA: INR29.7 crores, up 26% year-on-year
  • EBITDA margin: 17.7%
  • Profit after tax: INR17.3 crores, up 13.4% year-on-year
  • PAT margin: 10.3%

Stand-alone Results:

  • Revenue from operations: INR120.9 crores, up 20.5% year-on-year
  • EBITDA: INR27.5 crores, up 22.6% year-on-year
  • EBITDA margin: 22.8% (improved 40 basis points)
  • Profit after tax: INR18.3 crores, up 7.6% year-on-year
  • PAT margin: 15.1%

Segment Performance:

  • Processed foods revenue: INR144 crores, up 28.5% year-on-year
  • Processed foods EBITDA: INR31.2 crores with margin of 21.6%
  • Distribution segment revenue: INR23.2 crores with margin of 11.5%

Key Developments

The company achieved its fourth consecutive quarter of double-digit year-on-year revenue growth despite geopolitical uncertainties, supply chain disruptions, vessel shortages, and elevated freight costs.

Tariff Refund:

  • U.S. subsidiary received tariff refund of USD2.08 million (INR19.69 crores) from U.S. government
  • USD0.77 million (approximately INR7 crores) booked in Q1 P&L
  • Balance amount reflected in balance sheet for June quarter
  • Treatment will be evaluated based on customer arrangements in coming quarters

Manufacturing Expansion:

  • Surat greenfield facility commenced operations in Q4 FY26
  • Began commercial deliveries and initial container shipments in Q1 FY27
  • Facility expands frozen food manufacturing capabilities
  • Expected to reach full capacity in 2-3 years
  • Target revenue contribution of INR40-50 crores for FY27
  • Full capacity potential: approximately INR300 crores

Certification:

  • Received AEO-T3 certification from CBIC in May 2026
  • Enables faster customs clearances, reduced inspections, and improved export efficiency
  • Expected to benefit inventory turns and cash conversion

Brand Performance

Ashoka Brand:

  • Delivered strong quarter-on-quarter growth
  • Revenue CAGR of more than 20% over last 5 years
  • Growth supported by South Asian diaspora demand and deeper international market penetration

Truly Indian Brand:

  • Present across more than 3,000 stores in United States
  • Growth driven by 60% same-store growth and 40% new listings
  • Targeting mainstream consumer segments beyond diaspora

Soul Brand:

  • Domestic brand strengthening presence in India
  • Focus on expanding product portfolio and reach across e-commerce, quick commerce, and modern trade
  • Undergoing strategy changes to improve performance

Operational Challenges

Supply Chain Issues:

  • Geopolitical uncertainties from West Asia conflict
  • Vessel shortages and trade route disruptions
  • Elevated fuel and ocean freight costs (3% margin impact)
  • 30% of goods ready in June could not be shipped due to container non-availability
  • Company started passing on freight increases to customers (65-75% pass-through in major markets)

Guidance and Outlook

FY27 Targets:

  • Revenue guidance: upwards of INR900 crores
  • EBITDA margin target: high teens (17-19%)
  • Cautiously optimistic despite external uncertainties

Capacity Planning:

  • Total manufacturing capacity potential: INR1,250 crores (excluding agency business)
  • Full utilization expected by FY30

Additional Financial Items:

  • PLI benefits: INR16 crores for FY27 (final year of scheme)
  • Legal award: USD2.8 million from won case (recovery in process)
  • Depreciation: Expected to increase with Phase 2 Surat expansion (INR20-25 crores additional capex)

Geographic Expansion

  • Setting up step-down subsidiary in Ireland to address European market
  • Planning increased focus and investment in UK and Europe markets
  • Expecting high double-digit growth from European region

Market Presence

  • West Asia market recovering, returning to approximately 15% of business
  • Strong order book despite shipping challenges
  • Company leveraging position as large exporter to negotiate with shipping companies

Investment Strategy

  • Continuing investments in growth brands (Truly Indian, Soul)
  • 75% of sales from own brands, 25% from B2B and private label
  • Brand building expenses expected to reduce as percentage of sales over time