ADF Foods

Dalal Street Investment Journal - - COVER STORY -

ADF Foods, founded in 1932, is a Mumbai-based com­pany en­gaged in man­u­fac­tur­ing, mar­ket­ing and dis­tribut­ing eth­nic In­dian food prod­ucts. Its prod­ucts in­clude pickles, chut­neys, ready-to-eat items, paste and sauces, frozen foods and spices un­der var­i­ous brand names such as Truly In­dian, Ashoka, Aero­plane, Camel, etc. Its dis­tri­bu­tion net­work is spread across Europe, the United States, the Mid­dle East, Aus­tralia, Canada, and Asia. The com­pany also of­fers con­tract man­u­fac­tur­ing ser­vices.

On the fi­nan­cial front, the com­pany’s rev­enue rose 3.81 per cent to ₹166.73 crore in FY17 com­pared to the pre­vi­ous fis­cal. The com­pany’s PBDT de­clined 13.15 per cent to ₹26.15 crore in FY17 from ₹30.11 crore in FY16. The com­pany’s net profit de­clined from ₹14.10 crore in FY16 to ₹12.37 crore in FY17, reg­is­ter­ing a de­cline of 12.26 per cent. On a quar­terly ba­sis, ADF Foods posted 3.79 per cent in­crease in its rev­enue to ₹41.87 crore in Q1FY18 from ₹40.34 crore in Q1FY17. The com­pany’s PBDT in­creased 1.74 per cent to ₹7.56 crore in the first quar­ter of FY18 on a yearly ba­sis. The com­pany’s net profit rose 16.34 per cent to ₹4.27 crore for the cor­re­spond­ing pe­riod.

On the valu­a­tion front, the com­pany is trad­ing at a PE mul­ti­ple of 38.71. Its re­turn on cap­i­tal em­ployed stood at 7.63 per cent, whereas its re­turn on eq­uity stood at 6.48 per cent. The com­pany is vir­tu­ally debt-free. The com­pany has been main­tain­ing a healthy div­i­dend pay­out of 33.47 per cent. We ex­pect the stock price of ADF Foods to rise.

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