XA Update Report | PT Indofood CBP Sukses Makmur Tbk. (ICBP) — Solid Top-Line, but Margin Headwinds Still Persist

 

 

By Steven Willie (Research associate)

8-May-2026

 

 

ICBP delivered a resilient top-line in 1Q26, with revenue rising +8% YoY (+17% QoQ) to IDR 21.7 tn, coming in line with our estimate at a 28% run-rate of our FY26F revenue forecast. Across business segments, the noodles division retained its crown as the primary growth engine, with revenue climbing +8% YoY (+17% QoQ). Gross profit margin contracted to 35% in 1Q26 from 36% in 1Q25, as elevated input costs — most notably CPO prices rising +17% YoY. The pressure was more pronounced at the operating level, with OPM declining sharply to 21% (vs. 26% in 1Q25). At the bottom line, core profit declined -4% YoY, and net profit attributable to owners fell -3% YoY to IDR 2.6 tn, with net profit margin narrowing to 12% (vs. 13% in 1Q25). Despite the margin headwinds, the result was broadly in line with our estimates, representing a 27% run-rate of our FY26F net profit forecast.

 

 

 

🔹 1Q26 Financial Performance

 

• Top-line on track — overseas momentum holds the fort. ICBP delivered a resilient top-line in 1Q26, with revenue rising +8% YoY (+17% QoQ) to IDR 21.7 trillion, coming in line with our estimate at a 28% run-rate of our FY26F revenue forecast. Growth was underpinned by a healthy geographic mix, with overseas sales advancing +13% YoY — reflecting the continued strength of ICBP’s international franchise — while domestic sales grew a steady +6% YoY, affirming the durability of consumer demand on the home front.

 

 

• Broad-based segment recovery, beverages the lone laggard. Across business segments, the noodles division retained its crown as the primary growth engine, with revenue climbing +8% YoY (+17% QoQ). Snack foods followed with +7% YoY (+18% QoQ), while dairy posted +6% YoY (+15% QoQ). Nutrition & special foods grew at a more modest +5% YoY (+5% QoQ), and food seasonings rebounded sharply on a sequential basis at +4% YoY (+27% QoQ). The lone soft spot was the beverages segment, which dipped -3% YoY (-3% QoQ), continuing its near-term softness.

 

 

• Margin compression deepens — input costs take their toll. Gross profit margin contracted to 35% in 1Q26 from 36% in 1Q25, as elevated input costs — most notably CPO prices rising +17% YoY — continued to weigh on cost of goods. The pressure was more pronounced at the operating level, with OPM declining sharply to 21% (vs. 26% in 1Q25). Compounding this, operating expenses surged +37% YoY, ultimately dragging operating profit down -10% YoY.

 

 

• Bottom line holds up — in line with estimates. At the bottom line, core profit declined -4% YoY, and net profit attributable to owners fell -3% YoY to IDR 2.6 tn, with net profit margin narrowing to 12% (vs. 13% in 1Q25). Despite the margin headwinds, the result was broadly in line with our estimates, representing a 27% run-rate of our FY26F net profit forecast.

 

 

 

🔹 Margins Remain the Key Overhang

 

• Our forecasts stay intact, but CPO remains the margin wildcard. Our FY26 estimates remain largely unchanged, though margin pressure remains the primary near-term risk. As highlighted in our previous report, CPO prices — already up 13% YTD — continue to find structural support from Indonesia’s B50 biodiesel mandate and Malaysia’s upcoming B15 implementation effective June 1st (stepping up from B10), dynamics we expect to keep CPO prices elevated well into 2H26F. Compounding this, the IDR has depreciated -4% YTD, adding another layer of cost pressure as the weaker currency inflates the landed cost of USD-denominated imports — most notably wheat, a key input for ICBP’s noodles segment. Together, these twin headwinds — elevated CPO and a softer IDR — reinforce our view that meaningful margin recovery is unlikely in the near term.

 

 

• Geopolitical easing could offer a relief valve — but timing is uncertain. That said, we are monitoring developments on the geopolitical front closely. An easing of U.S.-Iran tensions could weigh on crude oil prices, which in turn would undermine the economics of biofuels and potentially dampen demand for palm oil as a biodiesel feedstock. Should this scenario play out, it could provide meaningful relief to ICBP’s input cost profile — though the timing and magnitude of such a shift remains difficult to predict. We will continue to reassess our margin assumptions as the macro backdrop evolves.

 

 

 

🔹 HOLD Recommendation with Target Price at IDR 6,850/Share

 

• We maintain our HOLD rating on ICBP with a target price of IDR 6,850 per share. A more constructive macro environment — particularly a meaningful and sustained pullback in CPO prices alongside IDR appreciation remain the key re-rating catalysts in our 1-year view.

 

 

• Risks : (1) Weaker-than-expected consumer purchasing power; (2) higher-than-anticipated input costs, particularly key raw materials; (3) intensifying competition from substitute and competing brands; and (4) IDR depreciation

 

 

 

 

Download full report HERE.

 

 

 

 

NH Korindo Sekuritas Indonesia berizin dan diawasi Otoritas Jasa Keuangan (OJK). Untuk informasi lebih lanjut, anda dapat menghubuni CS kami via email CSO@nhsec.co.id