INDF - Forex gains mask flat GP, while agribusiness shines

INDF - Forex gains mask flat GP, while agribusiness shines
(Maintain BUY; TP IDR9,420)

* INDF's 1H25 results show a split picture. While revenue grew 4.4%, a 7% jump in input costs neutralized gains, leaving gross profit flat. However, a significant reduction in forex losses caused net income to leap 51%. This one-time gain was the primary reason 1H25 earnings beat expectations.

* Across segments, CBP remained flat, while Bogasari's revenue dipped 2% despite strong flour volume. The Agribusiness segment was a standout performer, with revenue surging 33% and EBIT jumping 76%, driven largely by its plantations division. Conversely, the edible oils & fats division saw a 15% EBIT decline despite a 19% increase in sales, as cost input higher.

* We expect better EBIT coupled with stable net financing which will impacting to a resilience FY25 earnings. Maintain BUY with higher SOTP-based TP of IDR 9,420 (8.5x ‘25F P/E), while currently trading at an attractive 7.7x 2025F P/E, slightly above its -1SD.

Regards,
Akhmad Nurcahyadi - KBVS Research team