XA Update Report | PT Indofood CBP Sukses Makmur Tbk. (ICBP) – FY26 Earnings Face Headwinds as Margins Stay Compressed

 

 

By Steven Willie (Research Associate)

21-Apr-2026

 

 

ICBP recorded a modest topline growth in FY25, with revenue increasing by +3% YoY to IDR 74.9 tn, representing 99% of our full-year estimates. In 4Q25, revenue grew at a stronger pace of +9% YoY to IDR 18.6 tn. GPM declined to 35% (vs. 37% in FY24), mainly due to higher input costs, particularly CPO prices. Despite this pressure, OPM remained stable at 22%, supported by an -8% YoY decline in operating expenses. Excluding non-recurring items and FX impact, core profit fell by -4% YoY to IDR 9.98 tn (vs. IDR 10.41 tn in FY24). ICBP recorded a turnaround in income from associates and JV, posting a gain of IDR 236 bn in FY25 compared to a loss of IDR 1.39 tn in FY24, which was previously impacted by impairment losses on investments. As a result, reported net profit increased by +22% YoY to IDR 10.8 tn, with NPM improving to 12% (vs. 10% in FY24), though this was partly driven by non-operational factors.

 

 

🔹 FY25 & 4Q25 Financial Performance

 

• Stronger Finish, but Full-Year Growth Remains Modest. ICBP recorded a modest topline growth in FY25, with revenue increasing by +3% YoY to IDR 74.9 tn, representing 99% of our full-year estimates. In 4Q25, revenue grew at a stronger pace of +9% YoY to IDR 18.6 tn, supported by continued government spending and a gradual recovery in consumer purchasing power compared to 1H25. Segmentally, growth was primarily driven by the noodles division, which expanded by +10% YoY (-2% QoQ), followed by food seasonings at +12% YoY (+5% QoQ), nutrition and special foods at +8% YoY (+17% QoQ), and dairy at +4% YoY (+5% QoQ). Meanwhile, snack foods posted a relatively muted growth of +2% YoY (-8% QoQ), while the beverages segment declined by -8% YoY (+4% QoQ).

 

 

• Overseas Growth Provides Support Amid Soft Domestic Trends. FY25 revenue growth was supported by both domestic and international markets, with overseas sales rising by +5% YoY and domestic sales increasing by +2% YoY. The stronger overseas performance was mainly driven by demand in Asia and Africa, which grew by +8% YoY, partially offsetting softer domestic momentum.

 

 

• Cost Pressures Persist, While Efficiency Limits Margin Downside. GPM declined to 35% (vs. 37% in FY24), mainly due to higher input costs, particularly CPO prices which increased by +10% YoY to IDR 14,101/kg (vs. IDR 12,807/kg in FY24). Despite this pressure, OPM remained stable at 22%, supported by an -8% YoY decline in operating expenses. Excluding non-recurring items and FX impact, core profit fell by -4% YoY to IDR 9.98 tn (vs. IDR 10.41 tn in FY24), reflecting the impact of elevated raw material costs.

 

 

• Non-Operating Recovery Lifts Reported Earnings. ICBP recorded a turnaround in income from associates and joint ventures, posting a gain of IDR 236 bn in FY25 compared to a loss of IDR 1.39 tn in FY24, which was previously impacted by impairment losses on investments. As a result, reported net profit increased by +22% YoY to IDR 10.8 tn, with NPM improving to 12% (vs. 10% in FY24), though this was partly driven by non-operational factors.

 

 

 

🔹 FY26 Outlook: Growth Holds, Cost Pressure Builds

 

• Margins Likely to Stay Under Pressure. We expect margin pressure to persist into FY26, primarily driven by rising input costs, especially global CPO prices which have increased by approximately +11- 12% YTD to around MYR 4,400-4500/MT. This is attributable to the implementation of Indonesia’s B50 and Malaysia’s B12 biodiesel mandates, which may reduce seaborne supply, alongside potential supply tightening in Malaysia in 2H26F. As a result, we forecast FY26F GPM to remain at 35%, with OPM slightly moderating to 21% and NPM stable at 12%.

 

 

• Topline Growth Intact, but Earnings Momentum Remains Limited. On the topline, we project FY26 revenue to grow by +5% YoY to IDR 78.6 tn, in line with management’s guidance of +5%–7% YoY growth, supported by a relatively low base in FY25. However, earnings growth is expected to remain subdued, with FY26F net profit projected to increase modestly by +2% YoY to IDR 9.3 tn, reflecting ongoing cost pressures and a more normalized profitability trajectory.

 

 

 

🔹 HOLD Recommendation with Target Price at IDR 6,900/Share (Prev. IDR 9,700/Share)

 

• We downgrade our rating to HOLD on ICBP with a revised target price of IDR 6,900 (from IDR 9,700 previously). The downgrade is primarily driven by persistent margin pressure from elevated input costs, alongside a more normalized earnings trajectory post-FY25.

 

 

• 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 (d) 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