SIDO - Anticipate a bumpy road ahead, after a good FY25

KBVS Update
Wednesday, 11 Mar 2026

SIDO - Anticipate a bumpy road ahead, after a good FY25
(Downgrade to HOLD, with lower TP IDR540)

* Industri Jamu dan Farmasi Sido Muncul’ (SIDO) earnings grew 4.5% yoy/88.3% qoq in 4Q25, due to higher sales amid prolonged unpredictable weather during festivities, with better cost management. As a result, SIDO’ net profit 5% yoy in FY25, which came slightly above ours' (101.8%) and consensus expectation (103.7%).

* SIDO' revenue significantly recovered qoq in 4Q25 as it grew 4.5% yoy/50% qoq due to higher sales amid prolonged unpredictable weather during festivities, along with product restocking by distributors for Ramadan month. As a result, SIDO FY25’ revenue grew 4.1% yoy, mainly driven by higher export sales (+31% yoy) and F&B revenue (+11.7% yoy).

* SIDO' gross profit and EBIT grew 0.6% yoy/61.9% qoq and 4.6% yoy/96.1% qoq, respectively in 4Q25. All in all, SIDO’ net margin still expanded to 30.1% (+20bps yoy) in FY25 as the company succeeded to reduce its advertising and promotion (A&P) expense (-6.7% yoy) or around 10.4% of its FY25 revenue (vs 11.7% in FY24).  

* We adjusted our SIDO ‘26F revenue to IDR4.3 tn (-2.3% from prior) as per our view that prevailing macroeconomic conditions, particularly high inflation and a weakening labor market, have constrained consumer purchasing power. We also anticipate around -30bps yoy gross margin in ‘26F as SIDO maintains its ASP for several main products (i.e. Tolak Angin, etc) to boost sales amid higher raw material prices. Thus, we still expect SIDO’ earnings to reach IDR1.29 tn (-3.2% from prior) in '26F.

* Downgraded to HOLD on SIDO with lower TP of IDR540/share, which implies 12.5x ‘26F P/E. Currently, SIDO is trading at 11.7x ‘26F P/E or at its -1.5stdev of its 5 years’ mean P/E.

Regards,
Andre Suntono - KBVS Research team