Ashish Kacholia Portfolio FMCG Stock Declares 200% Special Dividend For FY24: Buy?

ADF Foods is a small-cap FMCG firm that operates as a leading food manufacturer with a presence in more than 55 nations. Indian, Middle Eastern, Mediterranean, and other international cuisines are among the many ethnic delicacies offered by the firm. The company's unmatched network of more than 180 distributors located in 55 countries allows it to reach customers worldwide. Following the company's announcement of a 400% special dividend for FY24, the stock was trading higher on Thursday.

ADF Foods Dividend

"The Board of Directors at its Meeting held today i.e. Tuesday, 31st October, 2023 declared a Special Dividend @ Rs. 4/- per share (i.e. 200%) on equity shares of face value of Rs. 2/- (Rupees Two Only) each for the Financial Year 2023-24 in order to celebrate three decades of listing of the Company's shares on the recognized Stock Exchanges. Pursuant to Regulation 42 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Special Dividend, will be paid within 30 (thirty) days from the date of declaration of dividend to those Members whose names appear in Register of Members / List of Beneficial Owners of the Company as on Friday, 10th November, 2023 ("Record Date"), received from the Depositories," said ADF Foods in a stock exchange filing.

ADF Foods Q2 Results

The company said in an exchange filing that its standalone revenue from operations was Rs 97.3 Cr during the quarter ended 30th September 2023 up by 17.0% YoY from Rs 83.2 Cr in the year-ago quarter. Its EBITDA reached Rs 22.7 Cr in Q2FY24 up by 46.2% YoY from Rs 15.5 Cr in Q2FY23. The company said its standalone net profit for the quarter under review was Rs 17.7 Cr up by 35.4% from Rs 13.1 Cr in Q2FY23.

Mr. Bimal Thakkar - Chairman & Managing Director said, "The quarter gone by was an important one for our company as we took some necessary steps to ensure the company is set firmly on the long-term path of growth. We believe that the recipe to lasting success is in three ingredients - products, process and people. Our products fulfill our mission - to serve Indian ethnic foods to the entire world. The success of our products translates to tangibles such as sales growth, but also intangibles such as the appreciation of our consumers. Our process ensures the quality of our products and our ability as an organization to adapt to exigencies."

"The last part of this trifecta - our people - is perhaps the most impactful. People drive processes and determine whether an organization's present meets its vision. It is with this belief in mind that I am pleased to announce we have welcomed new faces at senior management levels within our company. They not only share our vision but also have the necessary skillset to make it a reality," he further added.

ADF Foods Share Price Target

Deven Mehata-Equity Research Analyst at Choice Broking said, "ADFFOODS is showing promising technical indicators that suggest a positive outlook for the stock. Currently trading at 226 levels, the presence of a strong support zone in the range of 205-210 levels provides a safety net for the stock, potentially attracting buying interest if the price approaches this range. Moreover, the stock is trading above its long-term 200-Day EMA and mid-term 50-Day EMA levels, which is a bullish sign. The crossover of short-term EMA above long-term EMA is often interpreted as an indicator of positive momentum and a potential uptrend."

"The momentum indicator, with an RSI around 50 levels, indicates strength without being in an overbought or oversold condition, suggesting room for further price gains. Investors should take note of a crucial resistance level at 242, and if the stock manages to break through this barrier, it could target the all-time high levels of 260 and potentially higher. For investors who entered at lower levels, trailing stop losses is a prudent strategy to safeguard gains," he further added.

ADF Foods Shareholding Pattern

During Q2FY24, the company reported promoters' shareholding of 36.29%, FIIs stake of 9.57%, DIIs stake of 7.91% and public stake of 46.24%. As per the shareholding pattern of ADF Foods for the July-September 2023 quarter, ace investor Ashish Kacholia held 11,38,025 shares in his portfolio or 1.04% equity stake in the company.

Disclaimer

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