INDF - 1Q25 PATMI +11% yoy; inline

KBVS Update
Friday, 9 May 2025

INDF - 1Q25 PATMI +11.2% yoy; inline
(Maintain BUY; TP: IDR8,800)

* INDF 1Q25 PATMI growth at +11.2% yoy to IDR 2.72tn, came in line with street forecasts and our ‘25F net income for INDF at 23.3%/28.2% vs 26.2%. Solid PATMI growth of 11.2% yoy mainly underpinned by net gains on foreign exchange of IDR 809.83bn.

* INDF mild revenue growth was caused by flat distribution business (1.5% yoy) and weak bogasari segment (-4.6% yoy). CBP segment recorded a 2.1% yoy growth and remain as INDF’s main revenue driver. Worth to note that on quarterly basis, the growth was much stronger.

* Despite soft, INDF still enjoying higher margin from top to bottom. EBIT margin stood at 21.9% from 20.8% (+110bps) on stronger agribusiness and bogasari margin. Net profit margin came in 68bps yoy higher from 8.0%.

* We expect to see a better earnings growth in the coming quarters mainly driven by steady volume growth and price adjustment impact on CBP. Continuing stable agribusiness and stronger bogasari margin will become as bonus catalysts. Adding our ‘2Q25F net income of IDR3.03t to 1Q25 will resulting to a 1H25F net profit of IDR5.67tn (1.9% yoy) and still more conservative than ‘1H25F consensus (5.1% yoy).

* Maintain BUY, SOTP TP of IDR8,800 implying 7.6x ‘25F P/E, while it is currently trading at 6.6x ‘25F P/E, or below its -1SD of 7.1x ‘25F P/E.

Regards,
Akhmad Nurcahyadi - KBVS Research