ADFFOODSNSEQ1 FY23August 2, 2022

ADF Foods Limited

5,541words
92turns
8analyst exchanges
3executives
Management on call
Bimal Thakkar
CHAIRMAN & MANAGING DIRECTOR, ADF FOODS LIMITED
Shardul Doshi
CHIEF FINANCIAL
Devang Gandhi
CHIEF OPERATING OFFICER, ADF FOODS LIMITED OFFICER, ADF FOODS LIMITED
Key numbers — 40 extracted
INR 97.2 crore
aw material inflation and supply chain disruptions. In the current quarter we recorded revenues of INR 97.2 crore in Q1 FY23 a growth of 12.5% from Q1 FY22. Our EBITDA and PAT stood at INR 9.1 crore and INR 7.6
12.5%
disruptions. In the current quarter we recorded revenues of INR 97.2 crore in Q1 FY23 a growth of 12.5% from Q1 FY22. Our EBITDA and PAT stood at INR 9.1 crore and INR 7.6 crore respectively. On the c
INR 9.1 crore
revenues of INR 97.2 crore in Q1 FY23 a growth of 12.5% from Q1 FY22. Our EBITDA and PAT stood at INR 9.1 crore and INR 7.6 crore respectively. On the cost front, our margins were impacted due to high raw mat
INR 7.6 crore
.2 crore in Q1 FY23 a growth of 12.5% from Q1 FY22. Our EBITDA and PAT stood at INR 9.1 crore and INR 7.6 crore respectively. On the cost front, our margins were impacted due to high raw materials and freight
1 million
to inform that the board has given its in principle approval for making a strategic investment of $1 million in a U.S. based entity called NaanSense operating LLC. It's a startup engaged in the business of e
12.4%
f you on the financial highlights for first quarter. In Q1 FY23 our consol. revenues increased by 12.4% to INR 97.2 crores compared to the same quarter last year. Also, our gross margin increased by 26.
26.9%
.4% to INR 97.2 crores compared to the same quarter last year. Also, our gross margin increased by 26.9% to INR 47.9 crore as compared to the same quarter last year. Gross Margin stood at 49.2%. For Q1
INR 47.9 crore
R 97.2 crores compared to the same quarter last year. Also, our gross margin increased by 26.9% to INR 47.9 crore as compared to the same quarter last year. Gross Margin stood at 49.2%. For Q1 our EBITDA stood a
49.2%
eased by 26.9% to INR 47.9 crore as compared to the same quarter last year. Gross Margin stood at 49.2%. For Q1 our EBITDA stood at INR 9.1 crore and EBITDA margin stood at 9.3%. As Bimal said, our marg
9.3%
Gross Margin stood at 49.2%. For Q1 our EBITDA stood at INR 9.1 crore and EBITDA margin stood at 9.3%. As Bimal said, our margins were affected this quarter due to inflationary pressure on raw materia
INR 47.9 crore
NR 97.2 crore compared to the same quarter last year. Also, our gross margin increased by 26.9% to INR 47.9 crore as compared to the same quarter last year. Gross Margin stood at 49.2%. For Q1 our EBITDA stood a
7.9%
e will start booking it in the coming quarters. Q1 PAT stood at INR 7.6 crore with PAT margin of 7.9%. For Q1 FY23 processed and preserve food revenues increased by 12.8% to INR 78.6 crore and agency
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Guidance — 18 items
Bimal Thakkar
opening
“To mitigate this, ADF took a price hike in June the full impact of which will be seen in the coming quarters.”
Bimal Thakkar
opening
“Further we are also witnessing softening of raw material and freight costs which will also have a positive effect on margins going forward.”
Shardul Doshi
opening
“In addition, MOFPI has sent letters to all the beneficiaries whereby they have pushed the PLI incentive by one year and will now be applicable from FY22- FY23 till FY26-FY27.”
Bimal Thakkar
qa
“Okay, so the first quarter has just got one shipment in and just about GBP 38,000 to 35,000 revenue (Technical issues) At the end of this year we hope to at least get to GBP 0.5 million in revenue from Patanjali that's what our expectation is.”
Bimal Thakkar
qa
“We expect to close the year with about GBP 0.5 million in revenue for Patanjali in this year.”
Shardul Doshi
qa
“So going forward, hopefully, we should see some benefits coming out of it.”
Bimal Thakkar
qa
“Our endeavor will be to try and maintain what we have done in the past.”
Bimal Thakkar
qa
“So, we hope to be at anywhere between 15% to 18% EBITDA margins.”
Ninad Sabnis
qa
“So, do we anticipate any positive impact of that on our P&L and balance sheet, going ahead?”
Bimal Thakkar
qa
“They plan to scale it up to in the next three to four years.”
Risks & concerns — 9 flagged
To mitigate this, ADF took a price hike in June the full impact of which will be seen in the coming quarters.
— Bimal Thakkar
As Bimal said, our margins were affected this quarter due to inflationary pressure on raw material and freight, as well as supply chain disruption in our U.S.
— Shardul Doshi
As Bimal said, our margins were affected this quarter due to inflationary pressure on raw material and freight, as well as supply chain disruption in our U.S.
— Shardul Doshi
So, do we anticipate any positive impact of that on our P&L and balance sheet, going ahead?
— Ninad Sabnis
And so, it's very difficult to quantify at this Atr FOODS LTD.
— Bimal Thakkar
So, across the board, we’ve been talking to companies, we’re seeing some solid slowdown in Europe and U.S., given inflation rates where they are right now.
— Bimal Thakkar
Are we seeing some further slowdown or let’s says some lower off take from our customers given these issues?
— Bimal Thakkar
So, as I mentioned the last two months there has been a bit of a slowdown, but it’s not because of the inflationary (technical issues).(39.05) We are already seeing I mean, from the last week onwards, things are again getting back to normal.
— Bimal Thakkar
So hopefully, I mean, of course the inflation pressure is there across the world.
— Bimal Thakkar
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Q&A — 8 exchanges
Q
My first question, how much revenue get from Patanjali product in this quarter? And give some idea for full year FY23 top line from Patanjali product? And second question..
Bimal Thakkar
Yes. No, no, go ahead. Our EBITDA margin and PAT margin are declined. So, it is temporary down or permanent? And what is the reason behind it? And also, you saying your opening remarks, your raw material costs are high but our gross profit margin are increase? So, give some idea. Yes, so, your first question about Patanjali how much revenues were there in the first quarter? It was -- we have, our first shipment actually just came in, in about in May this year. Okay, so the first quarter has just got one shipment in and just about GBP 38,000 to 35,000 revenue (Technical issues) At the end of th
Q
Yes. Hi, good afternoon, sir. I have two questions. And first one of them, just following up from my question on last call. We have some good plans to foray -- we already forayed and we had to -- we have plans to make better inroads in the QSR segment, which offers a great opportunity in a market like India also. So, can we just know any progress on that front? Yes, so in India, we have started supplying already to one of the chains and we are on the second order with them. So it is progressing in the right direction. And we are trying to add more products as well. Great. And if I may, I want
Bimal Thakkar
Shardul, you want to answer that? Atr FOODS LTD. CJudt'uf1llre-11.i(nld .. ADF Foods Limited July 29, 2022 Yes. Definitely, in fact this is going to help us in long term because this freight translates into the top line increase for us. But just a word of caution, we operate in two currencies, even we operating GBP. So, GBP has come down by almost 6%, 7% compared to the earlier levels and the dollar has gone up to that extent. Of course, our USD exposure is more so net we will benefit more compared to what we lose on GBP.
Q
Sir, just on your opening remarks you mentioned about price hikes being taken, can you help us understand versus the quarter comparable that you allude to, how much raw material cost has increased and in tandem, how much price increase are we taking?
Bimal Thakkar
The price increase has been taken on selective products. And the overall impact on some of the products we've taken is about 8% to 10%. So, I think the overall impact, Shardul would be around 3% to 5% for us on an overall basis? Yes. And the raw materials you know again so if we look at our key raw materials for example, this year, mangoes or wheat flour, oil all these have increased tremendously, I mean, you know, some of them have gone up by as high as 30%, 35%. We obviously cannot pass on the full increase to the consumers. So, we have been absorbing some of it but on our key products where
Q
Sir, you had mentioned about an approval to invest in a U.S. based LLC. Sorry, I missed the name of the company, and whether you're acquiring or investing, so could you clarify that, and the amount to be invested? So, the company is called -- so it's a QSR, I mean, they have a fast casual dining restaurant and QSR model, the brand is called NaanSense. So, it basically specializes in Indian food targeting the mainstream Americans. The amount the ins in principle approval we've got is for a million dollars, we'll be taking the minority stake in there. And we would be the preferred suppliers to t
Keshav
So, is there a quantum if you can get to the business opportunity at hand with them? See, they have just started with one outlet. They plan to scale it up to in the next three to four years. They plan to go up to close to 50 outlets. And so, it's very difficult to quantify at this Atr FOODS LTD. CJudt'uf1llre-11.i(nld .. ADF Foods Limited July 29, 2022 point, but if they get to that level, we should be looking at a decent amount of revenue coming from them. Sure, sir. And so, what kinds of business opportunities are you looking at in the cloud kitchen space, if you can give a qualitative idea
Q
Hi. Good evening and thank you so much for the opportunity. My first question was, could you do throw some light on the demand scenario right now in the U.S.?
Bimal Thakkar
Well, the last two months, things have been a little bit slow. But that's because it's basically everyone's been travelling, it's holiday season. So, we are now expecting from August things to come back to normal. So we don't see any kind of problem in terms of the demand. But last two months have been a little slow, which is because of the holidays and travel. (Technical issues) 29.48 because of COVID everyone was -- the travel was not there and suddenly people have just started travelling when they've got the opportunity. Got it. Understood. Thank you for that. My second question would be re
Q
Thank you for the follow up sir. Just trying to understand -- I understand you don't give mix between the brands. But if you can help us understand how these brands have grown on a y-o-y basis, Ashoka and all our brands? Atr FOODS LTD. CJudt'uf1llre-11.i(nld .. ADF Foods Limited July 29, 2022
Bimal Thakkar
Shardul, you want to take that? Yes. So, in fact, we have seen growth in absolute number in most of our brands, whether it’s Ashoka, Camel and Aeroplane or Truly Indian. So, these are – ADF Soul is a brand which we have kept for India so, that when we are launching products in this quarter it will come under that brand. But in terms of overall percentages, we have certain private label or b2b business also, which we do in fact, that’s coming down which used to be earlier 35%, it’s down to now between 25% to 30%, which is anyway now compensated with higher growth in Ashoka, Ashoka in fact has b
Q
Okay. Sir, in FY23 what revenue generate from Patanjali product because due line distribution, I did not get exact number? So, it is a GBP 1.5 million or GBP 0.5 million.
Bimal Thakkar
No, GBP 0.5 is what we will look at achieving this year because it was a little -- we started off only in May. So, we expect at least a minimum of GBP 0.5.
Q
Thank you, everyone for your participation and please stay safe, and we will look forward to connecting with you in the next quarter. Thank you.
Management
Speaking time
Bimal Thakkar
32
Anupam Agarwal
14
Shardul Doshi
12
Moderator
10
Abhishek Agarwal
8
Devang Gandhi
6
Aakash Javeri
4
Keshav
2
Nikhil Vora
2
Bhavin Soni
1
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Opening remarks
Bhavin Soni
Good evening, everyone. I am Bhavin Soni from Orient Capital. We are investor relations advisors to ADF foods Limited. I hope that all of you and the families are safe and well. On behalf of ADF Foods Limited, I extend a very warm welcome to all participants on this Q1 FY23 financial results discussion call.
Bimal Thakkar
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 the 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 forward-looking statements, which are completely based upon our beliefs, opinions and expectations as of today. These statements are not a guarantee of future performance and involve unforeseen risks and uncertainties. With this, I hand over the call from Mr. Thakkar for his opening remarks. Over to you, sir. Thank you, Bhavin. Good evening, everyone. I hope you and your families are healthy and safe and I pray for their well-being. I'm pleased to welcome you all to our Q1 FY23 earnings conference call. Before I provide an update on our business and performance, I would like to
Shardul Doshi
Thank you, Bimal. Good evening, everyone. Thank you for joining us today. Let me brief you on the financial highlights for first quarter. In Q1 FY23 our consol. revenues increased by 12.4% to INR 97.2 crores compared to the same quarter last year. Also, our gross margin increased by 26.9% to INR 47.9 crore as compared to the same quarter last year. Gross Margin stood at 49.2%. For Q1 our EBITDA stood at INR 9.1 crore and EBITDA margin stood at 9.3%. As Bimal said, our margins were affected this quarter due to inflationary pressure on raw material and freight, as well as supply chain disruption in our U.S. based subsidiary. We are working closely on resolving the supply chain issue and confident of finding an alternative in next few quarters. Okay. Yes. So, in Q1 FY23 our consol revenues increased by 12.4% to INR 97.2 crore compared to the same quarter last year. Also, our gross margin increased by 26.9% to INR 47.9 crore as compared to the same quarter last year. Gross Margin stood at
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