XA Update Report | PT Industri Jamu Dan Farmasi Sido Muncul Tbk. (SIDO) – Inventory Reset in Progress, Rebased Guidance

 

 

By Steven Willie (Research Associate)

13-May-2026

 

 

1Q26 revenue declined -19% YoY (-53% QoQ) to IDR 640 bn (15% of our FY26F estimates), driven by channel inventory normalization and tighter sell-in discipline following improved distribution visibility. Herbal revenue fell -26% YoY (-70% QoQ), F&B declined -15% YoY (-20% QoQ). Meanwhile, Pharma was the quarter’s standout, rising +26% YoY (-14% QoQ). GPM moderated to 50% (vs. 52% in 1Q25), as raw material cost deflation and cost discipline partially offset lower volumes and Lebaran logistics disruptions. . OPM contracted to 29% (vs. 36% in 1Q25), further pressured by A&P stepping up to 8% of revenue (vs. 6% in 1Q25). Net profit declined -37% YoY to IDR 147 bn (12% of our FY26F estimates), with NPM at 23% (vs. 30% in 1Q25), broadly in line with operating performance.

 

 

 

🔹 1Q26 Financial Performance

 

• Sell-in reset dominates the quarter. 1Q26 revenue declined -19% YoY (-53% QoQ) to IDR 640 bn (15% of our FY26F estimates), driven by channel inventory normalization and tighter sell-in discipline following improved distribution visibility. Management emphasized that sell-in weakness does not fully reflect consumer demand erosion, with channel normalization projected to conclude by May 2026.

 

 

• Pharmacy segment offsets softness. Herbal revenue fell -26% YoY (-70% QoQ) on sell-in normalization within the Tolak Angin Group and softer global essential oil pricing. F&B declined -15% YoY (-20% QoQ), reflecting Energy Drinks inventory normalization and weaker mining-workforce demand amid delayed RKAB issuance. Pharma was the quarter’s standout, rising +26% YoY (-14% QoQ) on strong OTC growth driven by expanded institutional reach, e-catalog execution, and improved channel coverage.

 

 

• Exports still intact, headline masks underlying strength. Export revenue contracted -4% YoY, dragged by lower essential oil sales. Excluding this, underlying export growth stood at +45% YoY. Export mix edged up to 14% of revenue (vs. 12% in 1Q25).

 

 

• Margin resilience at the gross level. GPM moderated to 50% (vs. 52% in 1Q25), as raw material cost deflation and cost discipline partially offset lower volumes and Lebaran logistics disruptions. At segment level, Herbal margin improved to 62% (vs. 61% in 1Q25) on patchouli oil and ginger cost deflation; Pharma margin expanded sharply to 40% (vs. 26% in 1Q25) on a richer institutional sales mix; F&B compressed to 43% (vs. 46% in 1Q25) on weaker operating leverage and higher sugar and taurine costs.

 

 

• Operating deleverage and higher A&P weigh on bottom-line. OPM contracted to 29% (vs. 36% in 1Q25), further pressured by A&P stepping up to 8% of revenue (vs. 6% in 1Q25). Net profit declined – 37% YoY to IDR 147 bn (12% of our FY26F estimates), with NPM at 23% (vs. 30% in 1Q25), broadly in line with operating performance.

 

 

 

🔹 Maintaining BUY Recommendation with TP at IDR 500 /Share

 

• Resetting to a realistic recovery path. Management revised FY26 guidance to flat revenue and net profit growth (0% YoY vs. prior guidance of +5–8% YoY), reflecting the pronounced sell-in compression in 1Q26. In response, we lower our FY26F revenue to IDR 4.19 tn (+3% YoY) and net profit to IDR 1.25 tn (+2% YoY), embedding a more conservative channel recovery path weighted toward 2H26. Management has also ruled out broad-based ASP increases in FY26, treating price hikes as a last resort given the increasingly selective consumer environment.

 

 

• Hantavirus developments worth monitoring. We continue to monitor the evolving Hantavirus situation, which — if it gains broader public attention — could serve as an incremental positive catalyst for Pharmacy segment. This remains a watch item, not a base-case assumption.

 

 

• MSCI Small Cap deletion: no fundamental read-through. We view SIDO’s removal from the MSCI Small Cap Index is a passive, index driven event with no bearing on its business fundamentals.

 

 

 

🔹 OVERWEIGHT Recommendation with Target Price of IDR 510/Share (Prev. IDR 590/share)

 

• We downgrade our rating to OVERWEIGHT on SIDO with a revised target price of IDR 510/share (from IDR 590 previously). The downgrade reflects reduced near-term earnings visibility following the pronounced sell-in compression in 1Q26. That said, the 1Q26 weakness remains systemic — driven by a channel inventory correction. With sell-out trends intact and normalization expected by May 2026, we view 2H26 as the key inflection point for earnings recovery. We continue to favor SIDO for its defensive sector narrative and consistent dividend profile.

 

 

• Key risks to our forecast assumptions: (1) Sustained essential oil price weakness; (2) weaker-thanexpected consumer purchasing power; (3) persistent softness in mining-sector F&B demand; (4) higherthan-expected input costs.

 

 

 

 

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