ADF Foods Ltd announced that the United States District Court, Southern District of New York, has issued a favourable order in litigation involving its step-down wholly owned subsidiary, ADF Foods (USA) Ltd. The court's Findings of Fact and Conclusions of Law mark a significant positive outcome for the company in the dispute filed by Ascot Valley Foods, Ltd.

The litigation originated from a case filed by Ascot Valley Foods, Ltd. against ADF Foods (USA) Ltd. for alleged violation of a Co-pack agreement. In response, ADF Foods (USA) Ltd. filed counterclaims, including allegations of misappropriation of its proprietary recipes and trade secrets. The court has now ruled largely in favour of the subsidiary, directing that Ascot disgorge profits earned through the misappropriation of ADF's proprietary information.

Financial Implications

The order specifies that ADF Foods (USA) Ltd. is entitled to US$ 2,298,114 towards disgorgement of Ascot's profits computed till December 2025. This amount represents Ascot's profits earned through the misuse of ADF's proprietary recipes and trade secrets up to December 31, 2025. Additionally, the court has outlined a mechanism to compute further amounts for the period from 2026 onwards.

Conversely, the liability of ADF Foods (USA) Ltd. has been restricted to US$ 100,706.96 plus interest. The parties have been granted 14 days from the date of the order to meet and confer, or raise objections to the proposed judgment and injunction order in case of disagreement.

Next Steps

ADF has been directed to file a proposed judgment for its trade secret claim, which includes the mechanism for computing damages beyond 2025 and a proposed permanent injunction order. ADF Foods (USA) Ltd. stated it will take the necessary steps in accordance with the court's directions.

The company noted that the matter remains subject to final judgement, any further proceedings, and recovery or enforcement processes. Consequently, the amounts mentioned should not be construed as having an immediate financial statement or profit and loss impact. The financial impact will be assessed in accordance with applicable accounting standards upon completion of the relevant legal and accounting evaluation.

ADF Foods Limited reported its financial results for the fourth quarter and fiscal year ended March 31, 2026. The company achieved its highest-ever consolidated quarterly revenue, growing 23.7% year-on-year to Rs. 196.7 crore in Q4 FY26. Consolidated net profit for the quarter rose by 57.6% to Rs. 25.9 crore, while EBITDA increased by 38.9% to Rs. 34.3 crore, with margins expanding to 17.4%. The audited standalone and consolidated financial results were published in Business Standard and Lokmitra on May 14, 2026.

Q4 Consolidated Performance

The company posted robust growth across key metrics during the quarter. Consolidated revenue increased from Rs. 159.1 crore in Q4 FY25 to Rs. 196.7 crore in Q4 FY26. Profit After Tax (PAT) improved to Rs. 25.9 crore from Rs. 16.4 crore in the corresponding prior-year quarter. The EBITDA margin expanded by 190 basis points to 17.4%.

Standalone and Annual Performance

On a standalone basis, Q4 revenue grew by 11.6% to Rs. 150.3 crore, while PAT increased by 40.0% to Rs. 30.1 crore. For the full fiscal year FY26, consolidated revenue reached Rs. 683.2 crore, a 15.9% increase over the previous year's Rs. 589.6 crore. Annual consolidated PAT stood at Rs. 96.8 crore, reflecting a 39.7% growth compared to FY25.

Management Commentary and Outlook

During the earnings conference call, management highlighted that the growth was driven by volume, product mix, and rupee depreciation. The flagship brand, Ashoka, continues to strengthen its presence, while the mainstream brand, Truly Indian, exceeded expectations, winning the NEXTY Award for its Tikka Masala Naan. Operations commenced at the Surat greenfield facility in Q4 FY26, with a planned scale-up. The company remains cautiously optimistic despite challenges in the Middle East due to geopolitical tensions, which impacted shipments in March and April. For FY27, management provided revenue guidance of Rs. 925 crore to Rs. 1,000 crore, assuming the situation stabilizes.

Dividend Declaration and Record Date

The Board of Directors recommended a final dividend of Rs. 0.60 per share, or 30%, for the financial year 2025-26. This is in addition to the interim dividend of Rs. 0.60 per share declared earlier, bringing the total dividend for FY26 to Rs. 1.20 per share. The company has set Wednesday, August 5, 2026, as the record date for determining shareholder eligibility for the final dividend. The Register of Members and Share Transfer Books will remain closed from Thursday, August 6, 2026, to Wednesday, August 12, 2026.