ADF Foods Limited (NSE: ADFFOODS) Q1 2026 Earnings Call dated Aug. 01, 2025
Corporate Participants:
Unidentified Speaker
Bimal R. Thakkar — Chairman, Managing Director and Chief Executive Officer
Shardul Doshi — Chief Financial Officer
Sumer Thakkar — General Manager, Sales & Strategy
Analysts:
Unidentified Participant
Ravi Udeshi — Analyst
Shalini Gupta — Analyst
Kumar Saurabh — Analyst
Param Vora — Analyst
Bhumin Shah — Analyst
Ravi Naredi — Analyst
Pallavi Deshpande — Analyst
Mihir Vyas — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the ADF Foods Limited Q1FY26 conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchtone phone. I now hand the conference over to Mr. Ravi Udeshi from EY. Thank you. And over to you sir.
Ravi Udeshi — Analyst
Thank you Shruti and good afternoon everyone. We welcome you to the Q1 FY26 earnings conference call of ADF to take us through the results and to answer your questions. We have with us the top management of EDF Food Ltd. Represented by Mr. Dimal Thakkar, the Promoter and also the Chairman and Managing Director, Mr. Sumed Thakkar, the General Manager, Sales and Strategy and Mr. Shardhu Doshi, the Chief Financial Officer. We will start the call with an overview of the business and the recent business updates by Mr. Sumed Thakkar and then Mr. Shahruz Doshi will give his comments on the financials.
As usual, the standard safe clause applies while we start the call. With that said, I will now hand over the call to Sumer. Over to you Sumer.
Sumer Thakkar — General Manager, Sales & Strategy
Thank you, Ravi. Good evening everyone. In Q1FY26, our consolidated revenue rose by around 10% year on year to Rupees 132.9 crores even as we faced global economic uncertainties, tariffs and seasonal fluctuations. Consolidated EBITDA stood at rupees 23.5 crores reflecting a healthy margin of 17.7%. Despite ongoing brand investments and rising input costs. These challenges were effectively mitigated through disciplined cost management and enhanced operational efficiency. The strategic reorganization of our sales team in the US and the formation of a new team in Australia in previous quarters have started to yield positive outcomes in terms of new listings.
We expect this to result in revenue growth in the coming quarters. We successfully completed a brand refresh for Truly Indian and showcased the updated identity at a prominent food exhibition, receiving encouraging feedback from the trade as well as the consumers. With the refreshed packaging set to roll out in Q3 FY26, we anticipate further momentum and increased brand traction. The expansion of the Surat Greenfield facility is progressing as planned and is on track to commence operations in the second half of FY26. Looking ahead, we remain cautiously optimistic of sustaining our growth trajectory in the current financial year amidst global economic uncertainties and tarriers and expect to achieve meaningful scale across all business segments.
I will now hand over to Shadal, our CFO who will comment on the financials. Thank you.
Shardul Doshi — Chief Financial Officer
Thank you Sameer and good evening to everyone. I’ll first share the consolidated performance for Q1FY26. The company’s consolidated revenues reached INR 132.9 crores marking a 9.3% increase year on year and a 16.5% decrease quarter on quarter. Consolidated EBITDA for The quarter was INR 23.5 crores which is a 20% increase from the previous year and the EBITDA margin was 17.7% which is increased by 160bps so YNY and 220bps Q1Q. The consolidated PAT for the quarter was Rupees 15.2 crores. This represents a 5.9% increase year on year and a 7.3% decrease quarter on quarter. The resulting PAT margin was 11.5% in the first quarter of fiscal year 2026.
Standalone revenues were Rupees 100.3 reflecting a 3.4% YNY growth and and 25.5% quarter on quarter decrease. The company’s EBITDA for The quarter was rupees 22.5 crores which is 1.3% decrease y on y and a 23.3% decrease from the previous quarter. The EBITDA margin was 22.4%, a decrease of 110bps year on year and an increase of 60bps quarter on quarter. Profit after tax for the quarter was Rupees 17 crores with a patent margin of 16.9%. The company is making long term investment in its brand and management resources as we have been telling you in the past with an eye towards future growth.
Despite these investments and the challenges of rising input cost, the Company’s effective cost management in other areas has helped protect its overall profitability. The company plans to continue balancing its cost structure to maintain its profitability matrix. These strategic investments have already resulted in some significant listings for Ashoka and Truly Indian brands in major retail chains. This is a promising start with the potential for higher growth in the coming quarters. Notably, the Truly Indian brand is now available in 1600 stores across the USA. The company’s capital expenditure program is on track with over 90% of our budget fully committed now and we have already spent 50% of it.
The new plant is also expected to be commissioned by second half of this fiscal year. The Company’s financial position also remains strong with a net debt free balance sheet and a robust net cash balance of INR 95 crores. With this I now return to Ravi Udeshi to open the floor for question and answer. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shalini Gupta from East India Securities. Please go ahead.
Shalini Gupta
Good evening sir, I had a couple of questions. One is that you were saying that Ashoka has got a new listings in the usa, uk. So which of these new listings?
Bimal R. Thakkar
So hi Shalini, this is Dimal Thakkar. The new listings which we’ve got are in Australia, in UK and in the us These are with large retail chains, club stores like Costco, that is for Australia and US and we’ve got some additional listings in the UK in Tesco.
Shalini Gupta
Tesco. And sir, you said the same thing about, about truly Indian. So if you could just speak about that also.
Bimal R. Thakkar
So truly Indian, we’ve got some additional listings in various supermarkets across America and also we’ve been able to get a listing in Costco in one of their divisions in the U.S. all these listings, I mean the product will be available from October and September, early October onwards. So.
Shalini Gupta
Okay. And sir, like I just was little curious, bank promotion expenses are like 15 crores which is almost the same as freight cost. So if you could say how much was the freight cost this quarter and how much was the brand promotion expense?
Shardul Doshi
Yeah, so the freight cost is around. Of my standalone revenue, it’s almost around 6% while our total marketing spend which includes the truly independent sole brand also is almost 7.8%.
Shalini Gupta
So almost 8%.
Shardul Doshi
Almost 8%, correct, yes.
Shalini Gupta
And sir, if you could just, you know the tariff, Mr. Trump is going all over the place. So if you could just say what, what is the gonna be the. Right now you said that tariffs are 10% on, on you people. So if you could just say, let’s say he imposes, imposes 25 tariffs that will have to be borne by you or how does it work out?
Shardul Doshi
Yes.
Shalini Gupta
Yes, I’m there.
operator
I think. So again, network issue has been created.
Bimal R. Thakkar
Yes, I’m on the call. So Shalini, the situation still remains dynamic and we’re still waiting to see what’s actually going to come into fruition. As of now it was supposed to come into effect from 1st of August and I believe the delayed it to the 7th of August. But no, we will definitely not absorb the entire increase across all our various products that go to the US. We might strategically choose to absorb some of them for some key products that we want to grow but it’s still subject to what policies actually come into effect. But we have the flexibility of passing.
On that increase across the channel. So some to the retailer, some to the distributor.
Shalini Gupta
Yeah, I mean that is, that is what, what everybody is talking about. Not everybody can absorb these tariffs because they are really quite, quite huge. So I mean even in the tech field sector though it’s technology services are not being, the tariffs have not been put on that. But even over there people are talking about passing on and, and I mean, I mean I don’t want to go into what Mr. Trump is saying. He’s saying they can’t be passed on, the corporations have to absorb it. So I don’t know, I mean I really don’t want to comment on it sir, Like I wanted to ask you about the Capex.
If you could say how much has been the Capex in the quarter and how much are you expecting during the year?
Bimal R. Thakkar
Yes, you want to get that Capex question? Sorry, my connectivity is bad so. Yeah, yeah.
Shardul Doshi
So Shalini, for our surest Greenfield there is a 90 crore capex which is planned and almost 90% of that is already committed. We have already spent 40, sorry, 50% of that and we accept this plan to become operational in Q3. So by then we should be in a position to spend the rest of the Capex also while other than this also there are certain brownfield projects which are going on in both the factories, Nadia and Nasik which is to an extent of almost 50 crores and I’ll say half of that is also spent by now and balance will be spent in the current financial year.
Shalini Gupta
Okay, okay, yes. And my last question. Sorry, sorry, sorry.
operator
A request to all participants, please restrict your questions to two questions per participant. For more questions please rejoin the queue. The next question is from the line of Kumar Saurabh from Scientific Investing. Please go ahead.
Kumar Saurabh
Hello sir, if we look at FY25 number of Ashoka, so like last 5 years looks good but last year we. Grew only at 5% in the Ashoka. Brand and Q1 looking at the overall. Numbers also it looks like single digit. Growth rate and this was like one brand which was doing well and then we wanted to scale up two more brands. So why in Ashoka, the growth rate. Has not been at par. And what are the remedial measures we. Are taking and how do things look like for next one to three years?
Bimal R. Thakkar
So you know, as we had mentioned earlier, we were doing some reorganization of some certain distributors, adding some more distributors in certain markets, taking out some existing distributors. So all that was the reason why you have seen a slight slowdown on the Ashoka side. Plus also our sales team reorganization happened in the US. All that has happened now and we are very confident in the coming. I mean we are already seeing results from this last quarter, things are getting better and, and we are fairly confident about the growth in the next few next quarters for the Ashoka brand.
Also, you know the first in this last quarter we had to. You were aware that we had a GPCB notice for which we got a stay order for. And so in the month of April our production in the Nadia factory was also not at full capacity because of that GPCB notice. And then from May June onwards we had production going on as normal. So that also impacted the first quarter sales.
Kumar Saurabh
Okay. And sir, on the sole brand, what is the current monthly run rate of revenue and how it was six months. Back and are you happy the way. Things are going on or like if you can give more updates on the sole trend.
Bimal R. Thakkar
So on the sole brand. It has not gone as we had planned earlier. That’s why we did a revision on our three year forecast. We are doing some changes in again in the sales team, in our strategy and we remain fairly confident that this brand will do well in the Indian market. We’ve just started modern trade a few months ago. We’ve got some encouraging response and also quick commerce. We just got listings from last month onwards with a few of the big names. So we feel fairly confident that this will do well. But the 100 crore plan which we had for three years that has been torn down to anywhere between 50 to 75 crores.
Kumar Saurabh
And where did we go wrong? Like is it in terms of pricing or is it in terms of product positioning? What has been the reason?
operator
Please rejoin the queue for more questions. The next question is from the line of Parambora from Trinetra Asset managers. Please go ahead.
Param Vora
All right, thank you for taking my question. So I have a question regarding the syrup facility which is expected to commence in second half of financial year 26. So sir, what is the expected capacity and what is the product mix we expect in that facility? So in that facility also we are looking at certain frozen products which are currently not being done in the Nadiyad factory. So there’s a new product line which we are doing there and some of the products which we are doing in Nadiyat we’ve enhanced capacity, expanded capacity in the Surat factory Shahdul.
In terms of tonnage do you want to let them know what the capacity is going to be?
Bimal R. Thakkar
So it will be around 10,000 metric tons capacity which will. And it is phase one which is. Which is which we are constructing right now.
Param Vora
Okay. And how much time will it take to break even? So we expect to get in year two on a break even situation there after we’ve started production. Okay, thank you. I’ll be back in queue.
operator
Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star and one on their touchstone telephone. Our next question is from the line of Bhumin Shah from Samiksha Capital. Please go ahead.
Bhumin Shah
Thanks for the opportunity. We won from distribution right end of January for the entire US and the time has increased by 30 for the distribution business. If I look at the distribution business which is around 7%. So how the
operator
moment your voice is sounding.
Bhumin Shah
Yeah, I. I was wrong. Definitely.
operator
Okay sir, thank you. The next question is from the line of Shubhanu Bangal from Three head Capital. Please go ahead. No sir, you’re not audible. Your voice is.
Unidentified Participant
Hello.
operator
Hello.
Unidentified Participant
Hello. Now was it?
operator
Yes sir. Now you can see
Unidentified Participant
why your distribution margin.
Shardul Doshi
So this. You know I think what happens is in distribution business which is primarily the tea business which we are doing it over there there are certain marketing incentives which we keep getting and once they’re approved we book it also now we have now got a certain portion of our incentive inbuilt into the pricing so that margins have slightly improved over the period. However I think from estimate perspective you should still keep around between 12 to 14% yearly margin for from the distribution business.
Unidentified Participant
This is one time.
Shardul Doshi
You know I think there will be. There will always be some fluctuations in corporate quarter on quarter but I think steady state affair you should. We should be in a position to do 12 to 14%.
Unidentified Participant
Give me my second question on. Give me some color on how this tul Indian going for us.
Bimal R. Thakkar
Well, we’ve been able to get some good listings in the last quarter and the whole brand refresh also which we have done has had a very positive response as Sumay mentioned in his opening statement. So we feel fairly confident about the growth on the Tuli Indian brand. Things are going as planned. As far as to the Indian goes.
Unidentified Participant
Any carri can impact to the Indian. Any tariff can Impact?
Shardul Doshi
Yes. No. So the tariff I think on the tariff, you know we have to wait to get some clarity on what actually is the final tariff. And yes, it. Whatever is. I mean if there is an impact we will try and pass on whatever possible to. You know, within the value chain. So we are not yet sure on what. How the. How it will impact till we have proper clarity on the tariff.
Unidentified Participant
Thank you.
operator
Thank you. Our next question is from the line of Ravi Naraddy from Nareddi Investment. Please go ahead.
Ravi Naredi
Sir. Currently at which capacity utilization we are running. So Mr. Ravi, you know we have various products, various product categories. So I’m going to say at an average overall we should be at about 75 to 80%. In some products we are about 100% or at 100% at somewhere 50. So on a weighted average I would say at about 70 to 75 to 80. Very nice. Good capacity, sir. And one more. US go down inventory turnover. Can you tell how much stock there we maintain there and how much turnover we get? So just do you want to get that?
Shardul Doshi
If you are referring, I think we received the distribution rights for the west in the month of March. And we had to buy inventory from our previous distributor. Hence the inventory went up in that particular in the month of March. So if you look at the console which includes your standalone first that’s concerned. I think it’s the inventory turnover is around 131 days.
Ravi Naredi
131 days. And sir, impact of 25% duty on us, how it impact us?
Shardul Doshi
So Mr. Ravi, I think you know, we all have to wait and watch and see what the final tariff comes in. So we will be whatever it is, there will be some amount which will be passed on. So at the, you know, if you look at it at the end retail or at the consumer level, this 25% doesn’t lead to 25%. Right. It would be anywhere between 10 to 15% at the end MRP level. And there will be within the value chain where everyone will absorb.
So. So you know we will absorb some of the bad. The distributors will absorb some. Retailers will absorb some and consumers will absorb some. So it’s going to be once we have a full clarity we decide on the strategy. Right, Right. And how much top line we are getting from Australia. No problem. No problem. Yes.
operator
Thank you. The next question is from the line of Pallavi Deshpande from Samiksha Capital. Please go ahead.
Pallavi Deshpande
Yes, sir. Thank you for taking my question. This is regarding the distribution business. We had an increase in the TAM size But still the growth is not there. So I wanted to understand when can we see the full growth potential for that?
Bimal R. Thakkar
Well, you know, as Chardon mentioned, we’ve now received the full US only from the last quarter onwards. Right. So we will start seeing traction and growth in the coming quarters. Typically the first quarter always there is. It’s kind of. It’s not always been. There is like a slowdown in the first quarter for us always historically as well. So from the second quarter onwards.
Pallavi Deshpande
And so my second question would be like in terms of Tesco over there, we have seen an increase in access to some more stores. Is there also an increase in the SKUs and how’s the traction for that?
Bimal R. Thakkar
So the listings have just happened in the additional listings have just happened last month and yes, there are some new SKUs which have happened and again we feel fairly optimistic on the success. The initial response on these new SKUs has been very encouraging and you’ll start seeing the actual effect in the quarters in the coming quarters.
Pallavi Deshpande
And what would be the number of stones access would be for Test 1.
Bimal R. Thakkar
You want to take that?
Sumer Thakkar
Yeah, sure. So on average across the sku, some. Some are slightly lower but it goes up to 150 additional stores.
Pallavi Deshpande
Okay, Right. And the second one would be on. Costco in terms of that where. I mean how many product, I mean skus there and anything happening there also in terms of increase there.
Sumer Thakkar
So the Costco list, we’ve got three SKUs listed and there are two in Australia and two in the US. Both these will get on the shelves only from the first week of October. So we will only see the response once it gets in. But we feel fairly confident that this will do well and once we have success with that in one division then we can approach the other Costco division. So we feel fairly optimistic on the Costco business.
Pallavi Deshpande
So my last question would be on Deep Kitchen.
operator
Please read the queue for more questions. Our next question is from the line of Bhumin Shah from. From Samiksha Capital. Please go ahead.
Bhumin Shah
Yeah, all of my questions.
operator
Thank you sir. A reminder to all participants, anyone who wishes to ask a question may press star and one on that Touchstone telephone. Our next question is from the line of Ravi Narendi from Narendi Investment. Please go ahead.
Ravi Naredi
Thank you very much to give again chance sir. How much top line we get from Australia in quarter one? Stargool. You want to get that? So Mr. Ravi, the new listings in Costco as I mentioned will only you will start seeing that effect only in Q3 onwards. So right now. Yeah. So in the end September first week October. So that’s when you will start seeing. Yeah. And how much PLI will achieved in this quarter.
Shardul Doshi
PLI. What we have booked is around 2 and a half crores in this quarter.
Ravi Udeshi
Okay. Thank you very much.
operator
Thank you. Our next follow up question is from the line of Pallavi Deshpande from Samiksha Capital. A reminder to all participants. Anyone who wishes to ask a question may press star and one on the touchstone telephone. Pallavi ma’, am, please go ahead.
Pallavi Deshpande
Thank you for the opportunity again. So I just wanted to understand in on this status thing. Right. So Deep Kitchen is the market leader and I understand for Indian foods in the us. So do they. So how. What percentage of their sourcing would be from India versus the US itself.
Bimal R. Thakkar
So you know I wouldn’t have data on how much how their revenue split is between India and this. But majority of their vegetarian products are all being made in India. So they focus on their non vegetarian range and manufacture that in the United States. So this will also definitely impact them. I mean whatever it is, it’s going to impact every Indian company. Right. So it will obviously impact beat as well.
Pallavi Deshpande
My second question would be in terms of. Yeah, sorry. Yeah. I’ll just come back.
Bimal R. Thakkar
Yeah.
Pallavi Deshpande
Thank you.
operator
Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star and one on the touchstone telephone. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our next follow up question is from the line of Subhanu Bangla from three Head. From three Head Capital. Please go ahead.
Unidentified Participant
Thank you for opportunity. Business makeup according to five brands.
Bimal R. Thakkar
I’m sorry, I can’t. Can you repeat your question please?
Unidentified Participant
Can you give me a coffee cup?
Bimal R. Thakkar
Sorry, Shadow, I can’t understand.
Shardul Doshi
Okay. I don’t know.
operator
Please repeat your question.
Unidentified Participant
Am I audible now?
operator
Yes sir. Now you’re clearly audible. Please go ahead.
Unidentified Participant
The question is can you give me.
Bimal R. Thakkar
I’m so sorry.
operator
Okay. Thank you sir. The next question is from the line of Mihir Vyar from 9rays Equireesearch. Please go ahead.
Mihir Vyas
Hi. Am I audible?
Bimal R. Thakkar
Yes.
Mihir Vyas
Sir. As you have given revenue guidance of thousand crore by FY27. Can you give color on how the margins will fare in the time and as well as any guidance about how what kind of PLI benefits company can gain.
Shardul Doshi
So to answer your PLI question. We’ve got 63 crores which has been sanctioned to us by the government. And we hope to utilize the entire 63 crores in these five years that we’ve been as per the sanction. And in terms of the margin guidance, I mean as of now the remain fairly confident of achieving the same kind of margins that we have up for getting to the thousand crores.
Mihir Vyas
Thank you sir.
operator
Thank you. Our next question is from the line of Pallavi Deshpandi from Samiksha Capital. Please go ahead, ma’.
Pallavi Deshpande
Am. Yes, I just wanted some listing on our advertising and marketing budget. Like how does it look in terms of percentage of revenue. And second would be freight cost.
Bimal R. Thakkar
Sadhu, I’ll let you get that please.
Shardul Doshi
Yeah. So marketing cost, our budget will remain in the level of 7 to 8% of our top line. That’s what we expect. Because right now our investment mode is on as far as both the brands Truly Indian and Solis they are concerned and we continue to spend money even on the Ashoka brand. And secondly on the freight cost there is no see budget wise we have maintained around 6 to 7% for it. In quarter one it was around 6% for us. But this is variable. I think what we have seen is this keep going up and down.
So on the overall basis if it remains below 8% that’s good for us.
Pallavi Deshpande
Right. I was just expecting that because we’re doing it now with Costco or Tesco, our advertising spend would actually come down. We would have a squeeze on the gross margin that would be offset by advertising. Advertising. I was expecting that. How does it work when we start this?
Shardul Doshi
Yeah, so Costco and those sales, as Vimar said, I think they will start coming in from the Q3 onwards. So there will not be, you know, I think we have to that this will be ramped up in a quarters later on. You know, I think it’s not that we will get significant revenues immediately in quarter two or quarter three from that.
Pallavi Deshpande
So longer term wouldn’t that be right that we would have a lower ad spend and marketing spend once it ramps up there with the lower gross margin in turn.
Shardul Doshi
Yes, yes, of course. As the revenue grows the ad spend also in terms of percentage would reduce and we expect it to go down to around 5%. That would be the ideal strategy state we would like to be at.
Pallavi Deshpande
Thank you so much.
operator
Thank you. Ladies and gentlemen, a reminder to everyone, please press Star and one if you have any questions. I repeat a reminder to everyone, all the participants, anyone who wishes to ask a question may press Star and one on their touchstone telephone. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, as there are no further questions from the participants. I now hand the conference over to the management for closing comments. Thank you. And over to you, sir.
Bimal R. Thakkar
Thank you, everyone, for the attendance and questions, and we look forward to catching up again in the next quarter. Thanks and have a good day.
Shardul Doshi
Thank you.
operator
Thank you. On behalf of ADF Words limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.