XA Update Report | PT Indofood Sukses Makmur Tbk. (INDF) – Resilient Core Earnings, Diversified Business Continues to Deliver

 

 

By Steven Willie

10-August-2026

 

 

INDF posted a solid 1H26, with revenue growing +9% YoY to IDR 65.5 tn, in line with our estimates at 50% of our FY26F. 2Q26 revenue grew +12% YoY (-7% QoQ), driven by broad-based volume growth across all segments. Gross margin narrowed slightly to 32.6% (vs. 33.1% in 1H25) on higher input costs, though EBIT still rose +14% YoY, led by Bogasari’s strong 21% YoY EBIT growth. Net profit fell -19% YoY to IDR 4.7 tn, weighed down by a sharp increase in net forex losses from financing activities amid IDR depreciation. Stripping out this non-operating item, core profit grew a solid +7% YoY to IDR 6.2 tn.

 

 

🔹1H26 & 2Q26 Financial Performance

 

•Solid, broad-based revenue delivery. INDF booked a solid 1H26, with revenue growing +9% YoY to IDR 65.5 tn, in line with our estimates at 50% of our FY26F. 2Q26 revenue grew +12% YoY (-7% QoQ), driven mainly by broad volume growth across all segments. By segment, 2Q26 revenue was led by CBP at +15% YoY (-6% QoQ), followed by Bogasari at +12% YoY (-7% QoQ) and Agribusiness at +3% YoY (-4% QoQ), while Distribution grew a modest +1% YoY (-15% QoQ).

 

 

• Bogasari leads EBIT growth despite margin pressure. GPM in 1H26 softened slightly to 32.6% (vs. 33.1% in 1H25), while OPM improved to 20.3% (vs. 19.5% in 1H25). The margin pressure stemmed from higher input costs, namely CPO and wheat, compounded by IDR depreciation, higher production costs from fertilizer timing in Agribusiness, and elevated freight costs. Despite this, 1H26 EBIT rose +14% YoY, supported by Bogasari’s EBIT growth of 21% YoY (OPM: 9.4% in 1H26 vs. 8.5% in 1H25).

 

 

• Bottomline dragged by forex loss; core earnings remain solid. Net profit fell -19% YoY to IDR 4.7 tn in 1H26 (42% of our old FY26F estimates / 43% of our new FY26F estimates). The decline was mainly driven by net forex losses from financing activities, which surged to IDR 3.4 tn (vs. IDR 231 mn in 1H25), primarily due to IDR depreciation against foreign currency-

denominated debt, particularly US$ bonds. Excluding this non-operating item, 1H26 core profit grew a solid +7% YoY to IDR 6.2 tn.

 

 

 

🔹Unchanged Outlook for 2H26F, Adjusting Our Bottom-Line Forecast

 

• CPO prices stay elevated; we expect stability into year-end. Global CPO price remains high at MYR 4,630/ton (+16% YTD/+11% YoY). Domestically, though not fully tracking global trends, INDF’s CPO ASP has also risen 3% YoY to IDR 14,615/kg in 1H26. We expect prices to remain stable at the current >MYR 4,400-4,500/ton level through year-end.

 

 

• IDR movement remains the key variable to watch. We view IDR, which impacts both input costs and forex losses, as the company’s biggest variable going forward. IDR has depreciated -8% YoY to ~IDR 17,800, and any further weakness against the USD would amplify net forex losses. Given these persistent headwinds, we adjust our FY26F net profit forecast for INDF to IDR 11.0 tn, implying +3% YoY growth, with NPM at 8.4% (vs. 8.7% in FY25). That said, should IDR stabilize against the USD, we see room for a reversal in forex losses, which would serve as a key re-rating catalyst for INDF going forward. We will continue to closely monitor IDR trajectory as our primary catalyst watch.

 

 

 

🔹 OVERWEIGHT Recommendation with Target Price at IDR 7,750/Share

 

 

• We maintain our OVERWEIGHT rating on INDF with an unchanged target price of IDR 7,750. We maintain our OVERWEIGHT rating on INDF with an unchanged target price of IDR 7,750. Our FY26F outlook for INDF remains intact, with the key variable continuing to be IDR movement and input cost trends. We note that INDF’s business remains solid, underpinned by its diversified segment mix. We believe INDF is currently undervalued, trading at a forward P/E of ~6.2x, a 35% discount to ICBP at 9.5x. We view current levels as an attractive entry point for investors seeking defensive exposure to Indonesia’s staples sector.

 

 

• Risks : (1) Weaker-than-expected consumer purchasing power; (2) higher-than-anticipated input costs; (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