Mayora Indah (MYOR IJ)
Conservative FY26 Top Line Guidance with Managed Margin Resilience
- 1Q26 rev is expected to be flat to slightly down yoy on timing effects of Eid, while margins are expected to remain resilient and potentially improve qoq.
- Cost pressures from Middle East tensions to emerge from 2Q26, with modest freight impact and max ~2% margin dilution from packaging cost.
- We adjusted FY26/27F net profit estimates by +1.0/-3.3% and reiterate Buy rating, with unchanged TP of Rp2,700.
Conservative FY26 outlook amid Middle East tensions
Management guides a conservative 5-8% revenue growth in FY26F (vs. +7.2% yoy in FY25), primarily volume-driven with a balanced contribution from domestic and export markets. Export growth is expected to remain relatively subdued, as elevated fuel prices linked to ongoing Middle East tensions weigh on consumer purchasing power in key markets. MYOR targets FY26F gross margin in the range of 23-25% (vs. FY25: 22%), factoring in higher crude oil and raw material costs, and ~30% increase in packaging cost. Mgmt sees some key input prices to remain favorable thus far: cocoa prices have declined to approx. ~US$3k/ton, coffee prices are expected to improve as we enter the harvest season, while coconut and sugar prices remain relatively stable.
Soft 1Q26 revenue outlook, margin to remain resilient
While overall market conditions remain relatively stable, management indicated that 1Q26 revenue growth will be partly affected by timing factors, with ~Rp500bn of domestic sales linked to pre-Eid shifted into 4Q25. Additionally, this year’s Eid transportation restrictions were longer compared to last year (13 days in FY26 vs. 8 days in FY25) which may further weigh on sales momentum. Therefore, 1Q26 revenue is expected to be flat to slightly down yoy. Despite softer topline outlook, gross margin is projected to improve sequentially and potentially exceed 4Q25’s 23.7%, as the impact from Middle East tensions has yet to fully materialize.
Impact of Middle East tensions: cost pressures to emerge from 2Q26
Management indicated that the impact of higher freight and packaging costs will begin to materialize from 2Q26 onwards. Freight costs are expected to increase modestly, with the maximum impact estimated at 0.2-0.3% of revenue, while higher packaging costs could dilute gross margin by approx. 2% under worst-case scenario, assuming other costs remain unchanged. Operationally, raw material procurement has not faced any scarcity to date. Reflecting these cost pressures and a more conservative ASP outlook, we revise our revenue and earnings estimates by -1.8/+1.0% in FY26F and -4.5/-3.3% in FY27F. This results in projected earnings growth of +13.3% yoy in FY26F and +16.2% yoy in FY27F.
Maintain Buy rating, with unchanged TP of Rp2,700
Despite potential headwinds from Middle East tensions, we believe MYOR can sustain its margins, as management has incorporated higher cost assumptions into its conservative guidance and retains pricing flexibility to mitigate cost pressures if needed. We maintain our TP unchanged at Rp2,700, based on an unchanged 18.5x FY26F PE, in line with its three-year historical average. Tactical (3M) view: N. We expect a seasonal qoq slowdown post-Eid alongside potential margin headwinds from rising freight and packaging costs.
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