Indofood Sukses Makmur (INDF)

A Mixed 3Q25 Results Backed by Agribusiness

 

  • A solid Agribusiness growth and resilient Bogasari margins underpinned INDF’s mixed 3Q25 performance.
  • We expect the momentum in Agribusiness to sustain to 4Q25, supported by additional demand from B50 implementation and sustain prices.
  • We maintain our Buy rating with a higher SOTP-based TP of Rp9,400, as we roll over our valuation to FY26 earnings.

 

INDF’s solid topline driven by Agribusiness

INDF delivered a mixed 3Q25 performance, with strong contributions from the Agribusiness segment (rev growth of +27.1% yoy) driven by higher ASP and volume. Bogasari also recorded steady rev growth +6.8% yoy, maintaining a resilient op margin of 9.5%. With wheat prices are relatively stable, the company has kept its pricing strategy unchanged and reiterate its 6-8% margin guidance.

Agribusiness: solid quarter backed by stronger volume and higher ASP

In the plantation segment, we expect CPO prices to stay favorable through year-end, supported by additional demand from B50 implementation next year while production constraints may help to support prices. Our CPO price assumption stands at MYR4,500/ton for FY25F. During the call, management noted that Malaysia’s tariff exemption to the US has no direct impact as INDF did not directly export palm oil.

 

A slight cut in FY25-26F forecast

We revised our revenue assumptions by -0.3/-0.4% in FY25/26F, mainly reflecting softer ICBP performance, partially offset by the upward revision in Agribusiness on higher volume and pricing assumptions. We anticipate Agribusiness to post the strongest growth of +15.4% yoy, followed by Bogasari +4.5%, ICBP +3.5%, and Distribution +2.4%. We lowered our FY25/26F core profit forecast by -2.8/-3.3%, translating to core profit decline -12.4% yoy in FY25F and +3.0% increase In FY26F.

 

Maintain Buy with higher TP of Rp9,400

We maintain our Buy rating on INDF with higher SOTP-based TP of Rp9,400 as we roll over our valuation to FY26 earnings, implying 7.2x PE FY26F. Currently, INDF trades at an attractive 5.4x FY26F PE which is -43.8% discount to ICBP’s current valuation.

 

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