ADF Foods targets revenue doubling every 3 yrs, eyes domestic growth

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ADF Foods targets revenue doubling every 3 yrs, eyes domestic growth

ADF Foods targets revenue doubling every 3 yrs, eyes domestic growth

Industry News
Jan 18,24

The company aims to capitalize on the increasing demand for pre-cooked food items in both international and domestic markets.

ADF Foods targets revenue doubling every 3 yrs, eyes domestic growth

ADF Foods, a ready-to-eat food manufacturer, has set an ambitious goal of doubling its revenue every three years, currently standing at approximately Rs 450 crore. The company aims to capitalize on the increasing demand for pre-cooked food items in both international and domestic markets.

Presently, 98% of the Mumbai-based company's revenue comes from overseas sales. However, it is intensifying its focus on the domestic market through the newly-launched brand Soul, featuring pickles and cooking pastes. The company plans to grow Soul to Rs 100 crore in the next three years, according to Bimal Thakkar, the chairman and managing director.

To support its growth strategy, ADF Foods will invest Rs 100 crore over the next two years to expand manufacturing capacity, and it is also exploring acquisitions for inorganic expansion. Thakkar highlighted the company's debt-free status and cash reserves exceeding Rs 150 crore. Currently operating in Gujarat and Maharashtra, ADF Foods has identified a location in Surat for a new 1 lakh square feet greenfield plant, with an estimated cost of Rs 60 crore. Additionally, it plans to invest Rs 30-40 crore in expanding existing capacity.

Thakkar expressed the company's openness to inorganic expansion, emphasizing their value-oriented approach in evaluating potential takeovers that complement their existing business.

ADF Foods operates manufacturing facilities in Gujarat and Maharashtra, with warehouses in Atlanta and New Jersey in the US. Thakkar mentioned the company's commitment to doubling revenue every three years, attributing this growth to flagship brand Ashoka's 35% compounded annual growth rate. Other brands like Truly Indian and Soul are also gaining traction.

Ashoka, with a current valuation of over Rs 200 crore, serves the Indian diaspora overseas. Truly Indian, catering to non-Indians, has reached Rs 15 crore, while Soul, targeting the Indian market, has achieved Rs 3-4 crore in business. Thakkar sees significant opportunities for Truly Indian and projects Soul to become a Rs 100 crore brand in the next three years.

ADF Foods offers a diverse product portfolio, including frozen snacks and shelf-stable products under various brands such as Camel, Aeroplane, and Nate's (offering plant-based meat and vegan food options). The company has successfully entered global markets and plans further expansion.

North America, including Canada, constitutes ADF Foods' largest market, followed by Europe, Gulf Cooperation Council, and Asia Pacific. In the first six months of the current fiscal year, the company reported a 40% year-on-year increase in consolidated net profit at Rs 29.7 crore, with revenue reaching Rs 237 crore. The Ebitda margin rose to 18.4% in 1HFY24, compared to 13.3% in the same period last fiscal year.

Promoters hold a 36.29% stake in ADF Foods, with Infinity Holdings being the largest public shareholder (13.06% stake). Authum Investment and Infrastructure (12.05%) and Sixth Sense Ventures, founded by Nikhil Vora (6.4%), are also notable stakeholders in the company.

Source: Mint