ADF Foods aims to double its revenue every three years, says CMD
By Mangalam Maloo, CNBC TV18 | August 9, 2023
Mumbai-based food manufacturer ADF Foods has set an internal goal to double its revenue every three years through organic as well as inorganic way, and it wants to continue this strategy for at least the next six years.
Bimal Thakkar, the CMD of ADF Foods, said the internal goal of the company is to double its revenue every three years. "We want to do this for the next six years at least. We can look at achieving the target both, organically and inorganically," he said.
Thakkar said he is also confident of achieving the guidance numbers and the other goal is to maintain the present margin level. "We feel confident we should be able to keep that," he said.
In the April-June quarter this year, the company reported a 93 percent increase in its consolidated profit after tax at Rs 14.7 crore as against the year-ago quarter's Rs 7.6 crore. The increase in profit was mainly on account of higher revenues. Its revenue from operations increased to Rs 112.4 crore, a 15.7 percent jump over the previous corresponding quarter's Rs 97.2 crore.
Thakkar said the company's Ashoka brand continues to grow well and in the first quarter it expanded over 40 percent. The expectation is that the Ashoka brand will exceed Rs 300 crore this year.
"As far as the India business goes, we have relaunched our brand last year. We are in the process of finalising a business head and he will join in the third quarter of this year. And our plan is to first look at eCommerce and then within the next 15 to 18 months we will get into modern trade. So we feel very optimistic for India and in the next five years, we expect India to at least contribute around Rs 80 crore in topline for us," he said.
He also said the US distribution business should make money by this year end. The company has made investments in two warehouses in the US, one each in New Jersey and Georgia. "We feel fairly confident that by the end of this year, the distribution business will make money for us. These investments are for the future. So going forward, you will see a lot of contribution coming in from the US subsidiary as well," he said.
He said the US subsidiary of the FMCG company has been set up to help it move up the value chain. "All our Ashoka business will be funnelled through this subsidiary. And we go directly to the retailers with this. So the Ashoka growth is going to be fuelled, as we have better control over our distribution in the US," he added.
On the company's Surat Greenfield plant, Thakkar said the plans are likely to be finalised by this month-end. "We expect that the plant to be up and running within 18 months. The initial cost for the first phase would be around Rs 50 to 60 crore and once that plant is operational, we should expect about Rs 150 crore in topline from that factory," he said.
He added the company has taken care of all the bottlenecks in its existing plants in Nadiad and Nashik, which he said will help bring in an incremental Rs 100 crore in revenue by this year-end. "Currently, some of our lines are already upwards of 90 percent, which is where this debottlenecking is helping us grow and some lines are at about 60 to 70 percent," he said.
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