Buy, 46% upside

18 May 2026

Price Rp 6825

Target price Rp 9950

Investment Considerations

Positive volume growth across all business segments

• ICBP recorded sales growth of 7.6% YoY and 16.9% QoQ in Q1-2026, reaching IDR 21.7 trillion, supported by volume expansion across all major business segments. Domestic sales remained the largest contributor at IDR 15.47 trillion, accounting for 71.2% of total revenue, although slightly lower than the prior year.
• Export revenue increased 12.9% YoY in Q1-2026, driven by stronger growth in the US and Asian markets, while the Middle East and Africa also delivered solid growth of 8.9% YoY
• The noodle segment remained the key earnings driver, with revenue growing 8.2% YoY to IDR 16.12 trillion, supported by 3% volume growth in both domestic and overseas markets. However, segment EBIT margin declined to 23.9% in Q1-2026 from 25.8% previously.
• The dairy segment recorded revenue growth of 6.2% YoY and 14.7% QoQ to IDR 2.8 trillion, supported by 9% volume growth, particularly in liquid milk products. Despite higher raw material costs, EBIT margin improved sequentially to 10.2% from 9.1%.
• The food seasonings segment delivered stable performance, with revenue increasing 3.5% YoY to IDR 1.42 trillion, supported by 2% volume growth, while EBIT margin improved to 15.0% from 14.3%.
• The snack foods segment recorded strong growth of 6.5% YoY and 17.7% QoQ to IDR 1.0 trillion, supported by healthy volume growth across most categories. EBIT margin improved significantly to 4.4%, compared with 1.1% in the previous quarter.
• The beverages segment declined 3.0% YoY to IDR 361 billion, despite 3% volume growth, mainly due to product mix effects. Segment EBIT margin softened slightly to 13.3% from 13.6%.   
• Meanwhile, the nutrition and special foods segment posted revenue growth of 4.5% YoY to IDR 377 billion, supported by 10% volume growth, primarily from baby food products. EBIT margin improved to 10.8% from 10.4%. 
• Looking ahead, management maintains a constructive outlook for FY2026, targeting mid-single-digit revenue growth of 5%–7%, despite continued soft consumer demand.

Q1 2026 Results: Margin Resilience Despite FX Headwinds

• ICBP’s Q1-2026 net profit declined 3.1% YoY, although improving 21.6% QoQ to IDR 2.95 trillion, mainly due to lower foreign exchange gains from operating activities, which declined 84% YoY to IDR 101.5 billion.
• Core profit also declined 4.1% YoY to IDR 2.95 trillion. Gross profit increased 3.5% YoY to IDR 7.55 trillion, while gross margin remained stable at 34.8%, reflecting the company’s ability to manage rising input costs effectively. Cost of goods sold increased 9.9% YoY, driven by 8.5% YoY higher raw material costs and a 17.6% YoY increase in production expenses
• Operating profit declined 10.4% YoY, but improved 18.0% QoQ to IDR 4.62 trillion, with operating margin remaining stable at 21.3%, indicating resilient operating leverage and disciplined cost management.

Valuation: Maintained Buy with TP IDR 9,950

• We maintain our BUY recommendation on ICBP with a 12-month target price of IDR 9,950, implying 46% upside, based on 12x forward P/E. Our positive outlook is supported by solid volume growth across all segments, selective category recovery, and resilient margins driven by disciplined cost control.