1. At a Glance
Sundrop Brands, formerly Agro Tech Foods, is what happens when your popcorn brand is a hit, but your P&L turns into a horror flick. With ₹1,090 Cr in trailing revenue and a spanking new Del Monte acquisition, the company just posted a quarterly revenue of ₹372 Cr — a record. The twist? It lost ₹110 Cr last year and still trades at a frothy 75x earnings. Return ratios? ROCE 0.22%, ROE 3.75%. This is not a typo. Somewhere between Act II and chocolate spreads, the plot melted.
2. Introduction
Imagine selling peanut butter, popcorn, and ready-to-eat snacks to a rising urban Indian middle class and still somehow not making money. That’s Sundrop Brands for you — an FMCG enigma wrapped in a crunchy caramel drizzle.
The company’s pivot from just edible oils to high-margin foods like peanut butter, cereals, and snacks looked like the right move on paper. But over the past five years, sales have grown by just 1.47%, ROE averages 3.12%, and promoter holding tanked from 51.7% to 33.9%. It’s the FMCG equivalent of trying to launch a rocket using expired soda.
And yet, the hope lives on — Del Monte acquisition, improving quarterly profits, and a juicy ₹208 Cr revenue in Q1 FY26 say the game isn’t over.
3. Business Model (WTF Do They Even Do?)
Sundrop Brands operates in two primary segments:
- Edible Oils: Once the bread-and-butter (or rather oil-and-butter), now a commodity drag on margins.
- Foods (55% of revenue): Includes
- Ready-to-Cook(ACT II Popcorn)
- Ready-to-Eatsnacks
- Spreads(Sundrop Peanut Butter)
- Breakfast Cereals & Chocolates
The food business grew 11% over
FY22–FY24. But there’s a cost — investments in brand-building, distribution, and product R&D have eaten into profits.
4. Financials Overview
EPS (TTM) =-₹27.49→P/E is meaningless (still showing 75.2 because, hey, math needs positive numbers).
FY25 (TTM) Snapshot:
- Revenue: ₹1,090 Cr
- Operating Profit: ₹34 Cr
- PAT:-₹106 Cr
- OPM: 3%
- ROE: 3.75%
- ROCE: 0.22%
Revenue is growing again, but margin erosion and non-operating shocks (Del Monte costs?) nuked the bottom line.
5. Valuation – Fair Value Range
| Method | Metric Used | Multiple | Value/Share (₹) |
|---|---|---|---|
| EV/Revenue | 1.5× on ₹1,090 Cr sales | – | 450–550 |
| P/E | Not meaningful (loss-making) | – | N/A |
| DCF (Aggressive) | 8% CAGR, breakeven in 2 yrs | – | 480–600 |
Fair Value Range: ₹450 – ₹600
This FV range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 Revenue: ₹208 Cr; PBT: ₹6.62 Cr — green shoots?
- Del Monte acquisition added ~₹75 Cr+ in Q1, boosting topline.
- Sundrop Peanut Butter remains a category leader.
- Promoter
