Indofood Sukses Makmur (INDF) - Solid Fundamentals Amid Market

Recommendation & Valuation

• Recommendation: SELL
• Current Price: Rp 8,150
• Fair Value (DCF): Rp 5,925 per share
• Potential Downside: ~27.3%

The current market price is considered above its intrinsic value, therefore investors are advised to sell or wait for a price correction.

Company Fundamentals (INDF)

• Market Dominance: Holds 61.93% FMCG market share in 2024, outperforming Mayora (19.3%) and Unilever (18.8%).
• Valuation: Trading at P/E 5.17x and PBV 0.62x, considered attractive and below historical averages.
• Financial Structure: Conservative balance sheet with debt-to-equity ratio 0.85x and quick ratio 1.67x, indicating strong liquidity.
• Dividend: Cash dividend of Rp 267 per share with a 3.47% dividend yield.

Macroeconomic & Industry Review

• Economic Growth: Indonesia grew 4.87% (YoY) in Q1-2025.
• Inflation: Declined from 2.61% to 0.76%.
• Exchange Rate: USD/IDR at 16,494 affecting import costs but supporting export opportunities.
• Processed Food Industry: Supported by strong domestic consumption and rising food expenditure.

Investment Risk Analysis

• Interest rate risk
• Foreign exchange risk (USD exposure)
• Credit risk
• Liquidity risk
• Commodity price risk (especially palm oil)

Technical Analysis

• Signal: Bullish continuation after breakout above Rp 7,650 resistance
• Entry Area: Rp 7,240
• Target 1: Rp 7,650
• Target 2: Rp 8,150
• Stop Loss: Rp 6,750