Last year given as Janamashtami Pick
Fundamental Analysis
Financial Performance
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Revenue & Profit Growth: In the trailing three years, ADF Foods has delivered revenue growth of about 12-16% and profit growth of 9-11% annually, reflecting solid momentum in both domestic and international markets.
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Profitability Ratios:
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ROE (Return on Equity): Around 15%, indicating efficient utilization of equity for generating profits.
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ROCE (Return on Capital Employed): ~14-17% in recent financial years, showing good returns on total capital employed.
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Net Profit Margin: Consistently near 12%, which is healthy for packaged food manufacturers.
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Dividend Policy: Dividend payouts have averaged around 39% of annual profits, offering moderate income for shareholders.
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Stock Valuation:
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P/E Ratio: ~36, suggesting a premium valuation relative to sector averages.
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Price/Book: ~5.14, signaling robust investor confidence in future growth.
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Balance Sheet & Cash Flow
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The company maintains a solid balance sheet with steady reserves growth and manageable liabilities.
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Cash Conversion Cycle has shown fluctuations, but working capital management remains effective for inventory-rich FMCG operations.
Growth Drivers
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Export Focus: Major earnings from North America, Europe, and the Middle East through brands like Ashoka and Soul.
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Product Portfolio: Expanding to organic, health-centric, and ready-to-eat foods, catering to evolving consumer preferences.
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Operational Expansion: Investments in automation and new plants (e.g., Surat project) to boost capacity and efficiency.
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Innovation: Targeting vegan and health-conscious segments, and leveraging digital/D2C sales platforms.
Risks & Challenges
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Raw Material Volatility: Fluctuations in key input prices (spices, pulses) can squeeze margins.
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Export Dependency: Heavy reliance on overseas sales exposes the company to currency and geopolitical risks
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Competition: Intense market rivalry from both Indian and global FMCG companies could affect pricing power.
Future Prospectus
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Earnings & Revenue Growth Forecast: Analysts project annual EPS and revenue growth rates of 21–22% and ~14%, respectively, over the next few years.
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These targets assume continued sector growth, successful expansion, and stable macroeconomic conditions.
Summary Table: Key Financials (FY2025)
| Metric | Value (FY2025) |
|---|---|
| Revenue | ₹601Cr |
| Net Profit | ₹70Cr |
| ROE | 15% |
| ROCE | 14–17% |
| Dividend Payout Ratio | ~39% |
| Market Cap | ₹2,498Cr |
| P/E Ratio | 36 |
ADF Foods shows strong fundamentals, driven by export-led growth, product innovation, and consistent financial performance. Looking ahead, its prospects remain positive, with double-digit growth expected, although investors should stay alert to sector and macro risks such as input cost pressures, currency volatility, and competitive dynamics.
Technical Analysis
Monthly
As per the monthly chart of the stock, this stock is in downtrend for last 8-9 months. but now again trading near major trendline support and if holds 218-20, the stock can inch up higher. Support exists near 210.
Weekly
On the weekly chart, a clear bearish pattern, "Head & Shoulder pattern" is visible. However, the neckline support is still intact. Thus, trade short only on breaching the neckline i.e. 218 on closing basis on the weekly chart.
Daily
