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Business News/ News / ADF Foods plans 100 crore capex
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ADF Foods plans ₹100 crore capex

Currently, 98% of the Mumbai-based company’s revenues come from overseas sales

ADF Foods is open to inorganic expansion as well. (Bloomberg)Premium
ADF Foods is open to inorganic expansion as well. (Bloomberg)

Mumbai: Ready-to-eat food manufacturer ADF Foods has set an ambitious target of doubling its revenue every three years, from about 450 crore currently, as it aims to tap into the growing demand for pre-cooked food items across international and domestic markets.

Currently, 98% of the Mumbai-based company’s revenues come from overseas sales, but it is ramping up its domestic business with the newly-launched pickle and cooking pastes brand Soul, which it plans to grow to 100 crore in the next three years, its chairman and managing director Bimal Thakkar told Mint in an interview.

The company will invest 100 crore over the next two years to expand its manufacturing capacity, while eyeing acquisitions for inorganic growth.

“We are a debt-free company, sitting on a cash reserve of over 150 crore. Currently, we have two manufacturing facilities across Gujarat and Maharashtra and have already identified a place in Surat to build a 1 lakh square feet greenfield plant. This will cost around 60 crore. We are also expanding existing capacity and investing 30-40 crore for that," Thakkar said.

ADF Foods is open to inorganic expansion as well. “We are value buyers and are constantly evaluating possible takeovers. It has to be complimentary to our business," he added.

In Gujarat, the company has a 15,000-square-metre factory in Nadiad, while the Nashik facility is spread across 10,100 square metres. It also has two warehouses in Atlanta and New Jersey in the US, totalling 1 lakh square feet.

Thakkar said that the company is on track to doubling its revenue every three years, as its flagship brand Ashoka continues to grow at a 35% compounded annual growth rate, while other brands like Truly Indian and Soul show good traction.

“Ashoka is already a brand of over 200 crore, serving the Indian diaspora overseas. Truly Indian, which caters to non-Indians, is around 15 crore, and Soul, which we recently launched for the Indian market, is doing 3-4 crore in business. We see a big opportunity in both Truly Indian and Soul, with the latter having the potential to become a 100 crore brand in the next three years," Thakkar said.

Under Ashoka, the company sells frozen snacks including samosas, kathi rolls, dosa wraps, parathas, as well as shelf-table products like sauces, chutneys, and pickles. Under Truly Indian, the company has a range of popular Indian favourites – but with a subtler treatment, ideal for the non-Indian palate. The company has already launched the brand in Germany and a few other markets, and will be introducing it in the US in the next few months.

It also has other brands including Camel, Aeroplane and Nate’s (plant-based meat and vegan food options). Overall, it has a portfolio of 500-600 products across these brands.

For ADF Foods, North America, including Canada, is its biggest market, followed by Europe, Gulf Cooperation Council, and Asia Pacific, Thakkar said.

ADF Foods posted a 40% on-year jump in consolidated net profit at 29.7 crore, on revenue of 237 crore in the first six months of the current fiscal year to March 31. The company’s Ebitda margin rose to 18.4% in 1HFY24, compared to 13.3% in the comparable period last fiscal.

While the promoters hold a 36.29% stake in ADF Foods, Infinity Holdings is the largest public shareholder in the company with a 13.06% stake. Authum Investment and Infrastructure Ltd holds 12.05%, while Nikhil Vora-founded Sixth Sense Ventures owns a 6.4% stake in ADF Foods.

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Published: 15 Jan 2024, 11:53 PM IST
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