The performance of the Company in FY 2023-24 represents an inflection point
PERFORMANCE OVERVIEW
I am pleased to present the exceptional performance of your Company during the year
under review. The dedication and hard work of our team culminated in a year of record
success, marked by significant achievements in revenue and profitability. During this
year, we surpassed significant financial milestones. Our consolidated revenue crossed the
threshold of Rs. 500 crore for the first time in FY 2023-24. This is achievement was a
direct result of our strategic focus on volume growth and a more favourable product mix.
Our financial robustness was further evidenced by our consolidated EBITDA margin
reaching 20.2%. On a standalone basis, the results were equally remarkable, with our
EBITDA and PAT nearly doubling over the past two years. The demand for our brands remained
strong across our markets, reflecting the strength and resilience of our product
offerings.
FINANCIAL OVERVIEW
On a standalone basis, your Company reported a 17.2% growth in revenue, climbing from
Rs. 353.3 crore in FY 2022-23 to Rs. 414.1 crore in FY 2023-24. EBITDA grew by a
remarkable 32.8% from Rs. 76.8 crore in FY 2022-23 to Rs. 102.0 crore in FY 2023-24, while
Net Profit After Tax rose by 32.7% from Rs. 60.0 crore in FY 2022-23 to Rs. 79.6 crore in
FY 2023-24. EBITDA margin strengthened from 21.7% to 24.6%.
On a consolidated basis, your Company reported a revenue of Rs. 520.3 crore, indicating
a 15.6% growth over FY 2022-23 – a substantial improvement over the previous year's
growth rate of 7.0%. Similarly, Net Profit After Tax strengthened by 32.1% from Rs. 55.9
crore in FY 2022-23 to Rs. 73.8 crore in FY 2023-24. EBITDA margin improved from 17.9% to
20.2%. The highlight of the Company's performance in FY 2023-24 transpired during the last
quarter of the year under review. The standalone revenues increased by 31.3% in the fourth
quarter over the corresponding period of the previous year, and 24.9% over the preceding
quarter. Similarly, on a consolidated basis, revenues increased by 24.8% in the fourth
quarter over the corresponding period of the previous year and 18.5% over the preceding
quarter. Your Company achieved its best performance across all key financial indicators,
including revenues, margins profile and bottom-line profitability. The sharp improvement
in revenues and margins during FY 2023-24 was the outcome of a concerted effort in brand
building and a strategic investment in profitable products.
KEYGROWTH DRIVERS
During FY 2023-24, your Company's growth was propelled by a series of strategic drivers
that laid the foundation for continued success.
First, our unwavering commitment to our core specialty of ethnic Indian foods paid
rich dividends. is distinctive positioning resonated favourably in the market, following a
sustained growth of the South Asian diaspora across the globe.
Second, the Company's sustained brand investments fortified its market presence and
fostered consumer loyalty. is strengthened brand recall and a habit-forming offtake.
Third, efforts to expand and enhance our distribution network in the USA ensured
that our products were always available in the market. is strategic move guaranteed a
persistent presence on store shelves across our distribution channels.
Fourth, our robust and cash-rich Balance Sheet provided us with the financial
backbone to support and amplify our business-strengthening initiatives. The synergy of
these strategic initiatives translated into an infection point for the Company, laying the
groundwork for an elevated growth trajectory.
BRAND HEALTH
At ADF, our principal business catalyst is the health of our brands.
In FY 2023-24, the Company's flagship brand Ashoka achieved a remarkable milestone,
with revenues surpassing the Rs. 250 crore mark. The brand grew a CAGR of 29% over the
three-year period leading to FY 2023-24. The brand's strength was anchored in its strong
association with authentic ethnic Indian cuisine, unique and diverse product offerings
that cater to discerning tastes, and its consistent availability on store shelves. Ashoka
sustained its growth trajectory through the strategic introduction of innovative products,
expansion into new geographic markets, and deeper market penetration within established
territories.
During the year under review, the Company continued to deepen the brand's expansion,
marketing expenditure, multi-channel engagement (digital platforms, television
advertising, sampling initiatives, and in-store promotions), and prime shelf space.
In FY 2023-24, the Company also embarked on an ambitious expansion of the ‘Truly
Indian' brand, addressing the non-ethnic diaspora. The Company added a range of frozen
products and expanded the range of cooking sauces, pastes, and ready-to-eat curries. The
brand garnered a positive reception in the US, securing listings in various supermarkets
and indicating promising potential. With a dedicated new team in the US, and an already
strong team in Germany, we remain committed to investing behind the brand's sustainable
growth.
The ADF Soul brand successfully tapped into the Indian market through the Company's
proprietary e-commerce platform (https://soul-foods.in), as well as other leading
e-commerce and quick commerce marketplaces like Amazon, Flipkart, Swiggy Instamart, and
BigBasket. We strategically expanded the brand's product range with timely category
extensions under chutneys, pickles in olive oil, and traditional pickles and remained
poised to launch more products in the better-for-you foods space. The Company committed
Rs. 13 crore to catalyze the growth of ADF Soul with the objective of scaling the brand to
Rs. 100 crore in revenues in the next three to four years. The Indian market presents a
significant opportunity, and our investment in ADF Soul reflects our confidence in the
growth potential in India.
In tandem with this expansion, we are implementing a series of operational improvements
and brown field initiatives that will enhance the manufacturing capacity in our Nadiad and
Nasik plants. The Company initiated the commissioning of a Rs. 15 crore cold storage in
the Nadiad manufacturing plant, which will also enhance operational efficiency.
DISTRIBUTION NETWORK
During the last few years, the Company strategically commissioned its warehouse
infrastructure in the US, encompassing 100,000 square feet, to ensure that our products
are well stocked. During the year under review, the Company created a large freezer
capacity in the New Jersey warehouse, empowering the Company to achieve a faster
fulfilment of the frozen products category in the US market.
AGENCY DISTRIBUTION BUSINESS
In addition to the established processed foods business, the Company represented
esteemed brands like Knorr soups, Lipton, Brooke Bond Red Label, Yellow Label and Taj
Mahal in the US and the UK. is business line contributed Rs. 88 crore in revenue during FY
2023-24.
PROPRIETARY MANUFACTURING CAPACITY
The core of our business effectiveness lies in the capacity to manufacture unique
ethnic products in our plants (Nadiad and Nasik).
Recognizing the increasing demand and our growing brand presence, the Company is in the
process of adding a third unit, creating its next growth platform. The Company initiated a
Rs. 75 crore greenfield expansion project (Phase One) in Surat, Gujarat, dedicated to new
frozen product lines. is state-of-the-art facility is slated for commissioning in the next
16 months and is expected to be one of the first in India to launch such unique offerings
in the food processing sector. Upon reaching full capacity, this plant could contribute
Rs. 250 crore to our revenue.
In tandem with this expansion, the Company is implementing a series of operational
improvements and brownfield initiatives to enhance the manufacturing capacity in the
Nadiad and Nasik plants. The Company initiated the commissioning of a Rs. 15 crore cold
storage facility within the Nadiad manufacturing plant, intended to enhance operational
efficiency.
THE INDIA BUSINESS
Historically, the Company has always been export-focused, marketing products in
international geographies to a growing Indian diaspora. The Company increasingly
recognized the emergence of a segment within the Indian market that seeks to spend more on
packaged food products and willing to pay higher prices for niche offerings. The Company
remained focused on building product offerings and a team to service this growing market.
The Company appointed a Business Head and charted an e-commerce-first strategy, followed
by a roadmap to gradually enter modern trade on the back of a successful e-commerce
presence.
OUTLOOK
At ADF, our optimism for the future is grounded in compelling factors.
First, the global recognition of India's cultural influence is on the rise, leading
to an increased acceptance of India's tradition and food – by the ethnic diaspora and
the non-ethnic diaspora.
Second, our strategic distribution efforts helped place products within easy reach
of customers across the US market. By expanding the network of distribution partners and
increasing a presence in various global regions, the Company secured more shelf space,
which, in turn, led to a faster product turnover. is success is a testimony to our prudent
brand positioning and product quality, creating a virtuous cycle of increased shelf
allocation by store owners.
Third, modern lifestyle's time constraints are prompting consumers to buy more and
scratch-cook less. is trend is particularly evident with Indian cuisine, known for its
complexity and time-intensive preparation, making the Company's ready-to-eat offerings an
attractive alternative.
Fourth, the Company's unique position as a listed and professional organization
brings scale advantages and access to resources, enabling timely investments in brand
development and distribution networks. is commitment to research and development
represents a strategic priority, helping position our brands as being innovative and
adaptive to changing consumer needs.
The Company is at a pivotal moment where core competencies are converging. With clear
visibility and strategic investments in our brands, manufacturing facilities, and
distribution channels, it is confident of reaching Rs. 1,000 crore in revenue within three
years. The Company is enthusiastic about the boundless potential of the business and
remains dedicated to pursue healthy and sustainable growth. The sky is indeed the limit at
ADF, as it looks forward to a future of sustained growth momentum and value creation.
Bimal akkar
Chairman, Managing Director & CEO