ADF Foods reports FY25 revenue growth of 13.3% amid rising costs and brand

ADF Foods Limited has reported its financial results for the fourth quarter and full year ended March 31, 2025, showcasing a robust year-over-year revenue growth despite facing margin headwinds from higher input costs and expanded branding spends. The ethnic and ready-to-eat foods manufacturer continues to push forward with international brand expansions, new distribution agreements, and operational efficiencies.

How Did ADF Foods Perform in Q4 and FY25?

For the fourth quarter of FY25, ADF Foods reported consolidated revenue from operations of ₹159.1 crore, marking a 3.5% increase year-on-year and 7.9% sequentially. However, consolidated EBITDA fell sharply by 28.1% to ₹24.6 crore from ₹34.3 crore in Q4 FY24. Consolidated profit after tax declined by 34.4% year-on-year to ₹16.4 crore.

On a full-year basis, consolidated revenue rose to ₹589.6 crore, up 13.3% from ₹520.3 crore in FY24. Despite the revenue growth, full-year EBITDA dropped by 6.3% to ₹98.3 crore, and profit after tax contracted by 6.2% to ₹69.2 crore. EBITDA margin slipped from 20.2% in FY24 to 16.7% in FY25, while net profit margin narrowed from 14.2% to 11.7%, indicating pressure from operating costs and investment-led expenditures.

Standalone results for FY25 told a relatively stronger story. Revenue climbed 15.5% year-on-year to ₹478.4 crore. EBITDA grew modestly to ₹105.2 crore, and PAT increased marginally to ₹80.2 crore, indicating stability in the domestic business despite similar pressures on margins. The standalone EBITDA and PAT margins stood at 22% and 16.8% respectively, though lower than last year’s 24.6% and 19.2%.

What Are the Key Growth Drivers Behind ADF Foods’ Performance?

ADF Foods attributed its full-year topline growth to the performance of its flagship brands—particularly Ashoka and Truly Indian—as well as geographic expansion and new listings. The company reported that Ashoka continued to perform well outside the USA, with new teams being set up in Australia and a reorganization of its U.S. sales structure.

The Truly Indian brand gained visibility with over 1,400 U.S. store listings following fresh entries in major chains like Safeway and Albertsons. The company is undergoing a visual identity refresh of the brand to maintain consumer resonance.

In India, the ADF SOUL brand launched a frozen range aimed at the quick commerce and modern trade segments, further diversifying its domestic product portfolio.

Additionally, the company secured nationwide U.S. distribution rights for Lipton Tea on the back of an expansion of its agency distribution business from the East Coast to the West Coast, marking a significant milestone in its American operations.

How Is ADF Foods Managing Cost Pressures?

ADF Foods’ FY25 results underline the dual challenge of navigating rising operating costs—especially for raw materials, freight, and labour—while investing in growth-oriented activities like branding and market expansion.

The company noted that stringent cost control measures and improved process efficiencies helped mitigate some of these impacts, but EBITDA and PAT margins still witnessed meaningful erosion. The full-year standalone EBITDA margin declined 260 basis points to 22%, while consolidated margin dropped 350 basis points to 16.7%.

Nonetheless, the management’s willingness to endure short-term margin compression in pursuit of long-term brand value creation was evident in its ongoing brand revamps, new market entries, and agency business expansion.

What’s the Outlook for ADF Foods in FY26?

Chairman and Managing Director Bimal Thakkar indicated confidence in sustaining growth momentum in the coming year. The company expects strong contributions from its flagship and emerging brands, driven by deeper retail penetration, international growth strategies, and stronger distribution partnerships.

Operationally, the expansion of ADF’s Surat Greenfield facility is on track, with commencement targeted for the second half of FY26. Once online, this facility is expected to significantly augment production capacity and efficiency.

The company’s focus on ethnic convenience foods, frozen meals, and organic offerings remains aligned with rising global demand for ready-to-eat and health-conscious products. This long-term alignment continues to attract new distribution deals and shelf space in large international retail chains.

What Are the Sentiment and Stock Market Implications?

As of the latest trading session before the earnings release, ADF Foods shares on the BSE (Scrip Code: 519183) had been trading in a relatively narrow range, reflecting cautious investor sentiment amid rising expenses and global food cost volatility. The company’s flat profit growth on a standalone basis and decline in consolidated earnings could weigh on short-term stock performance, particularly if margin compression persists into the next quarter.

From an institutional perspective, while FIIs and DIIs have maintained passive holdings in the FMCG and ethnic food sector due to its defensive characteristics, near-term flows could depend on management’s ability to restore margins and deliver bottom-line growth in tandem with top-line expansion.

Based on current fundamentals and the forward-looking commentary from the management, the stock may be viewed as a “Hold” candidate for existing investors, with a potential upgrade to “Buy” contingent on improved Q1 FY26 margins and Surat facility outcomes.

What Makes ADF Foods a Global Ethnic Foods Player?

ADF Foods operates across 55+ countries, exporting its Indian ethnic and organic products to major markets including the USA, Canada, Europe, Australia, and the Middle East. Its product range spans frozen ready meals, pickles, pastes, sauces, dips, and ready-to-cook kits under brands such as Ashoka, Truly Indian, Nate’s, PJ’s Organics, and ADF Soul.

This multi-brand, multi-continent approach helps it remain resilient to regional shocks and allows cross-leveraging of operational synergies across markets.

The company’s aggressive investment in visual identity refreshes, frozen food lines, and brand portfolio expansion—including its venture into the beverage segment via Lipton—also indicates its long-term vision to evolve into a comprehensive ethnic food and beverage platform.

ADF Foods’ FY25 performance underscores its ability to deliver consistent top-line growth amid rising costs and evolving consumer trends. With promising developments in distribution reach, brand repositioning, and geographic expansion, the company remains well-placed to capture the growing global demand for ethnic and ready-to-eat foods. While margin compression poses a near-term concern, strategic investments and new capacity from the Surat facility are likely to support operational efficiency and long-term earnings visibility.