ADFFOODSNSEQ4 FY2022May 27, 2022

ADF Foods Limited

3,612words

65turns

8analyst exchanges

6executives

Download PDF ↗ADFFOODS stock page →

Management on call

Bimal Thakkar

CHAIRMAN & MANAGING DIRECTOR, ADF FOODS LIMITED

Shardul Doshi

CHIEF FINANCIAL OFFICER, ADF FOODS LIMITED

Devang Gandhi

CHIEF OPERATING OFFICER, ADF FOODS LIMITED

Shivaan Thakkar

ADF FOODS LIMITED

Sumer Thakkar

ADF FOODS LIMITED

Bhavin Soni

INVESTOR RELATIONS ADVISOR, ORIENT CAPITAL

Key numbers — 40 extracted

Rs. 421 crore

ted supply chain all over the world. We recorded the highest revenues in our Company's history of Rs. 421 crores in FY22, a growth of 14% from FY21. Your board has recommended a dividend of Rs. 4 per share. Th

14%

We recorded the highest revenues in our Company's history of Rs. 421 crores in FY22, a growth of 14% from FY21. Your board has recommended a dividend of Rs. 4 per share. The growth this year was pri

Rs. 4

ry of Rs. 421 crores in FY22, a growth of 14% from FY21. Your board has recommended a dividend of Rs. 4 per share. The growth this year was primarily driven by robust volume offtake, introduction of new

Shardul Doshi: Thank you Bimal. Good evening to all of you. In Q4 FY22, our revenue increased by 5% to Rs. 108 crores compared to the same quarter last year. Also, our gross margin increased by 25%

Rs. 108 crore

ul Doshi: Thank you Bimal. Good evening to all of you. In Q4 FY22, our revenue increased by 5% to Rs. 108 crores compared to the same quarter last year. Also, our gross margin increased by 25% to Rs. 57 crores

25%

5% to Rs. 108 crores compared to the same quarter last year. Also, our gross margin increased by 25% to Rs. 57 crores as compared to the same quarter last year. Over Q4, our EBITDA stood at Rs. 15

Rs. 57 crore

. 108 crores compared to the same quarter last year. Also, our gross margin increased by 25% to Rs. 57 crores as compared to the same quarter last year. Over Q4, our EBITDA stood at Rs. 15 crores and PAT at

Rs. 15 crore

d by 25% to Rs. 57 crores as compared to the same quarter last year. Over Q4, our EBITDA stood at Rs. 15 crores and PAT at Rs. 11 crores which translates to a PAT margin of 10.4%. As far as full year FY22 is

Rs. 11 crore

as compared to the same quarter last year. Over Q4, our EBITDA stood at Rs. 15 crores and PAT at Rs. 11 crores which translates to a PAT margin of 10.4%. As far as full year FY22 is concerned, our total cons

10.4%

4, our EBITDA stood at Rs. 15 crores and PAT at Rs. 11 crores which translates to a PAT margin of 10.4%. As far as full year FY22 is concerned, our total consolidated revenue stood at Rs. 421 crores, a

Rs. 335 crore

th of 14% Y-on-Y. Out of this, our segment Processed & Preserved Food revenue increased by 14% to Rs. 335 crores and Agency Distribution segment increased by 12% to Rs. 86 crores. Gross margin ratio increased

12%

rved Food revenue increased by 14% to Rs. 335 crores and Agency Distribution segment increased by 12% to Rs. 86 crores. Gross margin ratio increased from 42% to 50% which stood at Rs. 212 crores, a g

Advertisement

Guidance — 20 items

Bimal Thakkar

opening

“Going forward, we will continue to focus on the following key pillars to achieve a sustainable and a profitable growth; one, increasing capacities through Greenfield and Brownfield investments; two, strengthening our distribution network and third, growing our agency distribution business.”

Bimal Thakkar

opening

“To conclude, I would like to reiterate that we will continue to remain disciplined and maintain prudent financial practices while we aim to execute our growth initiatives.”

Bimal Thakkar

“It is just being launched in the market, it is still not known out there in that region, so we hope to be at about 1 to 2 million and then we will scale it up.”

Shardul Doshi

“So, we have booked PLI revenues, it will be around Rs.”

Sanjay Awatramani

“Sir, next is that for FY23, can we expect, I mean the margins to be in the range of again 18% to 20% or stick to this 15% to 18% range?”

Sanjay Awatramani

“And next is that you said that we have been in tieup with Patanjali, so what is this exactly we are doing with Patanjali, you said that we will be doing for UK and Europe region, so what exactly we will be working on this, this is a revenue share, what is this exactly, can you please elaborate on this?”

Bimal Thakkar

“We will basically be distributing their products within the ethnic Indian stores, so we will be buying products from them.”

Bimal Thakkar

“Our UK entity will be buying product from them and then distributing it.”

Abhishek Singhal

“Second question is regarding to, in quarter 4, 10.25 lakhs promoter shares were pledged, is there any specific reason or when it will be free from pledge?”

Bimal Thakkar

“As you are aware, there were warrants which were issued and this pledge was basically done for paying off the warrants, so we hope to clear this off in the next 1 to 2 years.”

Risks & concerns — 6 flagged

This helped us neutralize impact of freight cost and raw material inflation significantly in the current year.

— Shardul Doshi

We continue to face this pressure even in this year, but we are again looking at further price increase happening in this financial year as well and we will again continue to try and cut cost to a better product mix and see that we try and get back to the same kind of levels.

— Bimal Thakkar

It is a very volatile situation Sanjay everywhere; commodity prices have gone through the roof.

— Bimal Thakkar

We are obviously going to do our best to get it back to the previous levels, but the situation continues to remain volatile, but we are doing our best like I said we are going to put in a price increase and try and see how best we can cut on costs, so that is all I can say.

— Bimal Thakkar

So, the situation remains volatile especially on the commodity prices, it continues to remain volatile.

— Bimal Thakkar

As I mentioned, we are putting in our price increase as well and because we are large buyers and exporters, we still get a preferential rate when we negotiatewith shipping companies or even with our vendors, but the situation continues to remain volatile and we hope it gets better.

— Bimal Thakkar

Advertisement

Q&A — 8 exchanges

Sir, any topline comes from Patanjali in quarter 4? ~ FOODS LTD. 9ttdl11tllre,w<nld ..

Bimal Thakkar

No, nothing has come in from Patanjali in Q4. And what is the expectation for the financial year 23 from Patanjali? We estimate, first year to be around anywhere between 1 to 2 million pounds. It is just being launched in the market, it is still not known out there in that region, so we hope to be at about 1 to 2 million and then we will scale it up. Sir, how many incentive we received in PLI scheme in financial year 22? We have eligibility of almost Rs. 8 crores to receive under PLI in FY22. But it will receive in current year, right? Yes. Okay. So, we have booked PLI revenues, it will be aro

The EBITDA margins have been reduced by almost 3% in this year FY22, so any specific reason that there is a decrease of 3% in this year?

Bimal Thakkar

Main reason for that has been, I am sure you would be aware that there is a huge supply chain disruption all over the world, freight rates have gone up through the roof, input costs have gone up. Despite all of that we have still been able to maintain a healthy EBITDA margin, we put in the price increase, we were able to deliver better product mix. So that is the main reason for this reduction. We continue to face this pressure even in this year, but we are again looking at further price increase happening in this financial year as well and we will again continue to try and cut cost to a bette

Sir, my question is regarding to, any inorganic acquisition in your part, if yes, when executed?

Bimal Thakkar

We continue to evaluate opportunities and we are having conversations with couple of people, so I hope we are able to do something in this first quarter and the discussions are going on at the moment. That is all I can say. Second question is regarding to, in quarter 4, 10.25 lakhs promoter shares were pledged, is there any specific reason or when it will be free from pledge? As you are aware, there were warrants which were issued and this pledge was basically done for paying off the warrants, so we hope to clear this off in the next 1 to 2 years. Just to add to this, the promoter holding is n

Sir, I would like to ask, are we planning to grow inorganically considering that we have huge cash in bank balance in our balance sheet as of now, so like Rs. 80 crores I believe, so are we open for any kind of acquisition going forward? And second question would be like, what kind of interest are we receiving from this cash and cash balance? Can you please put some light on that, sir? ~ FOODS LTD. 9ttdl11tllre,w<nld ..

Bimal Thakkar

Yes, as I mentioned earlier, we are actively looking at inorganic opportunities, so when something does happen, we will announce that. I didn’t get the second question, if you could please repeat the second question? So, we have bank balance also, sir, so just wanted to understand what kind of interest like we are receiving in other income, breakup of that if possible can you provide? We get around, see the money has been invested either in bank fixed deposits or into the mutual fund bid split and we get same 4% to 5% return right now. Then this is all temporary and will be used for acquisitio

Sir, first of all I would like to compliment the new presentation, really well made and informative and as a first time viewer it really introduced me to the Company quickly and properly, my questions are more macro based, so I have two questions, the first one is around the QSR space which is of course growing at rapid price model globally, but domestically as well and it is a very exciting space to be in, so in the QSR, we have Cloud Kitchen growing by leaps and bounds, so do you have any plans of entering this space and do you see any strategy to approach these avenues and grow further?

Bimal Thakkar

Yes, you are absolutely right, this space is growing tremendously and we want to be part of this growth. So, as I mentioned, we are actively pursuing this because we have all the infrastructure to cater to their needs, so we have in fact, we already have our first order with one of the domestic chains, in fact just last week is when we received our first order, so we hope to continue to keep growing in that space. So, we are actively pursuing this vertical. Second follow-up question, similarly on the broader market trend, we see that veganism is on the rise everywhere and I guess it has been q

I just have a few good questions, the first question is basically, in regards to the R&D, we launched new products, let us say something like Khansaama, so I just wanted to understand is any R&D done before or is it a trial-and-error perspective being on the market expect for that before you decide to scale it up? And just a follow-up question also, you have a very healthy board, I just wanted to understand any plans on leveraging the expertise of the board in terms of new geographies, say something like upcoming growing economy, something like Kenya, something like Uganda where the presence i

Bimal Thakkar

As far as R&D goes, we have a full fledged team for R&D, so it is not really a trial and error,. Saying we have chefs who are there, we have a focused group where we try out the products, so there is a lot of work which happens before the product is launched. Yes, after it is launched, some fine tuning can happen later, but a lot of home work is done before we launch products and as far as the board, we have got a great board and they are always there to guide us and help us, implement our growth strategies, so they are very involved and help us wherever possible, so we continue to seek their

Sir, could you please tell us about this new subsidiary which has been incorporated, going forward what is the road map and future strategy for it?

Bimal Thakkar

This is going to be our e-commerce platform and we will be selling products through that and we will also be looking at other products which we will sell through this platform. And what would be the other products include? You know like how we have got a vertical for taking on, for example, distributing the Unilever products or Patanjali product, so we will explore other products, it could be imported products, it could be products from India, which we will sell through this platform once this platform is established. The first thing would be to launch our own products under the Soul brand and

Thank you very much and hope to catch up with you all in the next quarterly earnings and be safe and take care.

Bimal Thakkar

Thank you. Ladies and gentlemen, on behalf of ADF Foods Limited, that concludes this conference call. Thank you for joining us and you may now disconnect your lines.

Speaking time

Bimal Thakkar

Moderator

Shardul Doshi

Raj Shah

Ravi Naredi

Sanjay Awatramani

Raj Ojha

Behzad

Abhishek Singhal

Ninad Sabnis

Advertisement

Opening remarks

Bhavin Soni

Thanks. Good evening everyone, I, Bhavin Soni, from Orient Capital, we are Investor Relations Advisor to the Company. I hope that all of you and your families are safe and healthy. On behalf of ADF Foods Limited, I extend a very warm welcome to all the participants on Q4 and FY22 financial results discussion call. Today, on the call, I am joined by Mr. Bimal Thakkar - Chairman & Managing Director; Mr. Shardul Doshi - Chief Financial Officer and Mr. Devang Gandhi - Chief Operating Officer. I hope everyone has had an opportunity to go through our investor deck and press release that we uploaded on the exchanges and Company's website. Before we begin the call, I would like to give a short disclaimer. This call may contain some of the forward-looking statements which are completely based upon our beliefs, opinions, and expectation as of today. These statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this, I hand over the call to Mr

Bimal Thakkar

Thank you Bhavin. Good evening everyone. I hope you and your families are safe and well. I welcome you all to our Q4 FY22 Earnings Conference Call. Before I provide an update on our business and performance, I would like to express my gratitude to all our stakeholders for being a part of this growth journey. I am pleased with the performance our team has achieved during the quarter, despite the challenges of the third wave of COVID and the geopolitical tensions which has disrupted supply chain all over the world. We recorded the highest revenues in our Company's history of Rs. 421 crores in FY22, a growth of 14% from FY21. Your board has recommended a dividend of Rs. 4 per share. The growth this year was primarily driven by robust volume offtake, introduction of new products and entry into new geographies to cater to both global audience and Indian Diaspora. Product development and innovation is the cornerstone of our business. In this line, we have created a new brand named Khansaama,

Shardul Doshi

Thank you Bimal. Good evening to all of you. In Q4 FY22, our revenue increased by 5% to Rs. 108 crores compared to the same quarter last year. Also, our gross margin increased by 25% to Rs. 57 crores as compared to the same quarter last year. Over Q4, our EBITDA stood at Rs. 15 crores and PAT at Rs. 11 crores which translates to a PAT margin of 10.4%. As far as full year FY22 is concerned, our total consolidated revenue stood at Rs. 421 crores, a growth of 14% Y-on-Y. Out of this, our segment Processed & Preserved Food revenue increased by 14% to Rs. 335 crores and Agency Distribution segment increased by 12% to Rs. 86 crores. Gross margin ratio increased from 42% to 50% which stood at Rs. 212 crores, a growth of 37% Y-on-Y. This was achieved due to better product mix and price action. This helped us neutralize impact of freight cost and raw material inflation significantly in the current year. Our EBITDA stood at Rs. 67 crores, PBT stood at 65 crores and PAT stood at Rs. 48.5 crores w

Advertisement

← All transcripts ADFFOODS stock page →

ADF Foods Limited

Market Movers