ADF Foods Limited

Consumer Defensive — Packaged Foods · NSE

₹269.15−₹6.45 (−2.34%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of ADF Foods Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

ADF Foods Limited produces and exports ethnic and convenience food products in India and internationally. It operates through Process and Preserved Food; and Distribution Business segments.

IndustryPackaged Foods

SectorConsumer Defensive

Employees394

Annual revenue₹641 Cr

How does it make money?

Turns over ₹641 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹23 left at the operating level before interest, tax and depreciation. Each of its 394 employees supports ₹1.63 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin23.3%

Net margin14.0%

Revenue / employee₹1.63 Cr

Who are its competitors?

The closest listed comparisons in its industry are NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

TATA CONSUMER PRODUCT LTDP/E 59.3x · ROE 7.5%

DABUR INDIA LTDP/E 34.7x · ROE 17.2%

What is its competitive advantage?Some evidence

ROCE of 19.2% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE19.2%

ROE15.7%

Peer median ROE51.0%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 15.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+15.0%

Analysts1

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +44% while net margin moved +11% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+44%

Margin effect+11%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 32.2x already prices in growth
• P/E is close to its own historical median of 39.1x
✗ P/B of 5.17x is a steep premium to book

Quality vs. Valuation

Company Quality

73/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

57/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

32.2x

3Y Median

39.1x

40 monthly readings · mean 38.3x · range 26.5x–49.3x

Sector Median

51.7x

median of 4 sector peers

🟢Current valuation is approximately 18% below its 3y median of 39.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 38% below the peer median of 51.7x.

vs. its own history

Fair

39.1x median over 40 months · -18%

vs. sector peers

Cheap

51.7x median of 4 peers · -38%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

32.2x

P/B

5.17x

EV/EBITDA

19.7x

PEG

1.89

Dividend Yield

0.45%

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 19.8% to 23.3% over 3 years.
Return on capital is rising
ROCE has improved from 16.1% to 19.2%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 89% against revenue growth of 44% — stock may not be moving.

Red Flags

3 items require attention · 1 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 9.63x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹25 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 89% against revenue up 44% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.2% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 19.8% to 23.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 38% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 9.63x. Interest is payable whether or not the business has a good year.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 10% a year✓ 13.0% CAGR
Latest reported year was 25.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 21%✓ 23.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹25 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 19.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹2,957 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

32.2x

Fair

Fairly valued against the generic band

P/B Ratio

5.17x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹8.37

Profitable

Profitable on a per-share basis

ROE

15.7%

Strong

Strong capital efficiency

ROCE

19.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

9.63x

High

High leverage

Revenue Growth (YoY)

25.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

13.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.45%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹25 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹269.15

Operating Margin

14.3%

Average

Average margins

Net Margin

12.8%

Good

Strong bottom-line conversion

Current Ratio

3.84

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.60

Defensive

Steadier than the market

52W Range Position

60%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

276.8 / 271.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

50.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹444 Cr	₹501 Cr	₹558 Cr	₹641 Cr	+13.0%
EBITDA	₹88 Cr	₹111 Cr	₹111 Cr	₹150 Cr	+19.3%
EBITDA Margin	19.8%	22.1%	19.9%	23.3%	—
PAT (Net Profit)	₹56 Cr	₹75 Cr	₹69 Cr	₹90 Cr	+17.0%
EPS	₹5.12	₹6.85	₹6.3	₹8.19	+17.0%
ROE	13.4%	17.1%	14.1%	15.7%	—
ROCE	16.1%	19.9%	16.8%	19.2%	—
Total Debt	₹55 Cr	₹56 Cr	₹59 Cr	₹55 Cr	-0.1%
Free Cash Flow	₹24 Cr	₹54 Cr	-₹4 Cr	-₹25 Cr	—

🟢 Revenue has grown at 13.0% a year over 3 years.

🟢 EBITDA has grown at 19.3% a year over 3 years.

🟢 EBITDA Margin has risen from 19.8% to 23.3% over 3 years (+3.5 pts).

🟢 PAT (Net Profit) has grown at 17.0% a year over 3 years.

🟢 EPS has grown at 17.0% a year over 3 years.

🟢 ROE has risen from 13.4% to 15.7% over 3 years (+2.3 pts).

🟢 ROCE has risen from 16.1% to 19.2% over 3 years (+3.1 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.1% a year).

🔴 Free Cash Flow has turned negative, from ₹24 Cr to -₹25 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹755 Cr

Total Liabilities

₹183 Cr

Total Debt

₹55 Cr

Cash & Equivalents

₹66 Cr

Operating Cash Flow

₹58 Cr

Capex

-₹83 Cr

Shareholding (proxy)

Institutional Holding

21.0%

Insider Holding

55.3%

Corporate Actions

Dividend Rate

₹1.2

Ex-Dividend Date

05 Aug 2026

Analyst Consensus

Recommendations

0 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹261

-3.0% vs CMP

Target Range

₹261 – ₹261

Peer Comparison

Company	P/E	ROE
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

Recent News

3 mixed3 general

ADF Foods Share Price

Upstox, 16 Oct

ADF Foods (NSEI:ADFFOODS) Stock Forecast & Analyst Predictions

Simply Wall Street, 03 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

ADF Foods Limited (ADFFOODS.NS) Slips 1.17% to ₹288.30, Holding Mid-Range Between Key Levels - Fair Value Gap

https://www.siam.in/, 08 Oct

ADF Foods Share Price Target 2026: Expert Forecast, Growth Catalysts and Key Risks

Univest, 08 MayAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

SBI Funds Management buys 2% stake in ADF Foods, ICICI Prudential MF picks up additional Pfizer shares...

Moneycontrol.com, 26 Apr

Why Did ADF Foods Limited (NSE: ADFFOODS) Stock Slip Over 10% After Q1 FY27 Results?

Kalkine India, 30 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong15.8/20

🟡Financial HealthAdequate10.6/20

🟢GrowthStrong16.1/20

🟢ProfitabilityStrong11.9/15

🔴ValuationDemanding6.5/15

🟡RiskModerate4.8/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 10% a year13.0% CAGR
✓EBITDA margin holds above 21%23.3%
✗Free cash flow remains positive-₹25 Cr
✓Debt / EBITDA stays below 2x0.4x
✓ROCE stays above 16%19.2%