ADF Foods advances 19% on heavy volumes, stock hits new high

Shares of ADF Foods moved higher by 19 per cent to Rs 630, also its new high on the BSE on Monday on the back of heavy volumes. The stock of the packaged foods company has rallied 45 per cent in the past eight trading days.

Effective from today, December 7, the BSE has revised the price band of the stock to 20 per cent from 5 per cent earlier. Till 03:02 pm, a combined 856,000 equity shares had changed hands on the counter on the NSE and BSE.

ADF is a consumer-focused company and a leader in prepared ethnic food offering ready-to-eat (RTE) items, ready-to-cook (RTC) items, sauces, pickles, pastes, dips, and frozen foods under its 7 Flagship brands. It manufactures, distributes, and markets Indian food along with organic Mexican and natural Mediterranean foods. The company’s products are available in over 50 plus countries through a strong distribution network across US, Canada, Europe, Australia, Asia, and Middle East.

While announcing September quarter (Q2FY21) results on November 9, the management said that all businesses including exports of ethnic food, US business, and agency distribution were seeing good growth.

The company’s facilities are currently operating at pre-covid levels and seeing increased demand in the prepared food segment with significant changes in consumer habits. The management believes that the company is well placed to tap the growing opportunities on the back of its brand reputation, global distribution network, and robust balance sheet.

The company’s total debt as of September 30, 2020, stood at Rs 13 crore, which constitutes short-term borrowings. Total cash and cash equivalents stood at Rs 74 crore.

For Q2FY21, ADF Foods had reported 36 per cent year-on-year (YoY) growth in profit after tax at Rs 12.60 crore, on the back of a 52 per cent YoY jump in the total income of Rs 96.80 crore. EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin remain robust at 19 per cent, but contracted by 400 basis points from 23.2 per cent in the previous year quarter.

The “Agency distribution segment” where the Company acts as distribution agent of food products for a fast-moving consumer goods (FMCG) global major across the US and UK markets, contributed Rs 20 crore revenues in Q2FY21, it said.