Sundrop Brands Limited, formerly known as Agro Tech Foods Limited, is positioning itself as a scaled food platform dedicated to "Bringing joyful food experiences to the modern consumer." The company's strategy is centered on creating innovative, delicious, and convenient food solutions. It operates as a powerhouse of owned and perpetually licensed food brands with strong consumer recall and global affiliation, most notably through its core brands: Sundrop and Del Monte. The company is focused on high-growth, high-margin categories, leveraging a renewed focus on its core product portfolio to drive growth. The business model integrates both organic growth initiatives and inorganic acquisitions to build a stable of category-leading brands. With a clear vision for the future, Sundrop Brands is leveraging its complementary channel strengths and manufacturing capabilities to accelerate growth, backed by a management team with strong credentials aimed at driving profitability and creating shareholder value.

Official Website: http://www.sundropbrands.com/

• Q3 FY26 Performance (Proforma, Year-over-Year)

• Revenue from Operations: Grew 10% to INR 407.5 Cr from INR 370.3 Cr.

• EBITDA: Increased significantly by 80% to INR 29.5 Cr from INR 16.4 Cr. The EBITDA margin expanded to 7.2% from 4.4%. This calculation excludes one-time expenses and ESOP charges.

• Profit Before Tax: Stood at INR 12.2 Cr, a substantial improvement from INR 0.7 Cr in the prior year's quarter.

• YTD FY26 Performance (Proforma, Year-over-Year)

• Revenue from Operations: Grew 10% to INR 1,162.9 Cr from INR 1,056.7 Cr.

• EBITDA: Increased by 41% to INR 61.3 Cr from INR 43.4 Cr. The EBITDA margin improved to 5.3% from 4.1%. This is also normalized for one-time expenses and ESOPs.

• Profit Before Tax: Grew over 700% to INR 13.9 Cr from INR 1.7 Cr.

• Balance Sheet Strength (as of Dec 31, 2025)

• Net Worth: Stood at a strong INR 1,463 Cr.

• Liquidity: The company maintained a Free Cash balance of INR 20.2 Cr.

• Debt: Borrowings were minimal at INR 21.5 Cr, indicating a very healthy balance sheet.

• Investment in Growth

• Advertising & Promotion (A&P): YTD A&P expenses increased by 37% to INR 72.1 Cr, demonstrating a commitment to brand building and driving sales.

The company has delivered strong, profitable growth in Q3 and YTD FY26, marked by double-digit revenue increases and significant expansion in EBITDA margins, all supported by a robust and nearly debt-free balance sheet.

• Hybrid Brand Portfolio: The company operates a unique model combining its owned brand, Sundrop, with a perpetually licensed, globally recognized brand, Del Monte. This provides a mix of homegrown equity and international brand power.

• Scaled Food Platform Strategy: Sundrop Brands is not just a product company but is building a "scaled food platform." This strategy allows it to operate across multiple high-growth and high-margin categories, from popcorn and spreads to culinary and Italian foods.

• Capital Efficient Growth Model: The strategy explicitly includes a capital-efficient approach to building scale, utilizing both organic product innovation and inorganic acquisitions (like Del Monte Foods) to own category-leading brands.

• Focus on Modern Consumer Trends: The entire vision and mission are oriented towards the "modern, evolving consumer," indicating an agile business that adapts to changing tastes for branded, convenient, and packaged foods.

Sundrop Brands' unique combination of a powerful brand portfolio, a platform-based approach, and a focus on modern consumer trends provides a distinct competitive advantage in the Indian food market.

• Favorable Consumer Megatrends: The company is strategically positioned to benefit from consumer megatrends that are driving the consumption of branded and packaged foods in India. This implies a growing addressable market and a tailwind for the company's product categories.

• Shift to Branded Goods: The growth across categories like popcorn, culinary sauces, and premium staples points to an ongoing consumer shift from unorganized or unbranded products to trusted, packaged brands that offer quality and convenience.

The company is operating in a favorable industry environment where consumer preferences are shifting towards the very types of branded and convenient food products that form its core portfolio.

• Overall Business Growth:

• The consolidated group revenue grew by 10% in both Q3 FY26 and YTD FY26 on a like-for-like basis.

• The Sundrop business grew 11% in Q3, while the Del Monte business grew 8%.

• Channel-Specific Growth:

• E-commerce: This channel is a significant growth engine, expanding by 31% in Q3 FY26 and 39% YTD FY26. This growth is fueled by focused investments in performance marketing and the rise of quick commerce.

• Core Category Performance:

• The contribution of core categories (Popcorn, Culinary, Spreads, Italian, etc.) to the business has increased from 53% in FY23 to 61% in Q3 FY26, indicating successful strategic focus.

• Popcorn: The category grew at over 18% (value) in Q3, driven by strong performance in both Ready to Cook and Ready to Eat formats and new user penetration.

• Culinary: Continued its double-digit growth momentum (10% value, 12% volume in Q3) on the back of B2B verticals and organized retail.

• Premium Staples (Edible Oils): Returned to volume growth of 5% in Q3, driven by new price-point packs.

• Italian: While value growth was negative due to passing on commodity price benefits to consumers, volumes showed strong stimulation, growing 34% YTD.

Growth is broad-based and strategically driven, with a notable acceleration in the high-potential e-commerce channel and a successful focus on expanding the contribution of core, high-margin categories.

• Unlocking Value in Core Categories: The company has identified significant headroom for growth in its core categories, which now form 61% of the business.

• Distribution Expansion: There is a clear opportunity to drive growth in categories like Ready to Eat popcorn through new user penetration via expanded distribution.

• Franchise Extension: The company is successfully expanding its strong brand franchises into adjacent categories, such as leveraging the "Sundrop Heart" brand to enter the Oats market via e-commerce and modern trade.

• Bridging Portfolio Gaps: In the Spreads category, where performance was under pressure, the company has identified and is acting on the opportunity to bridge competitive gaps by launching 7 new SKUs, including High Protein and Chocolate variants, to cater to shifting consumer preferences.

• Stimulating Volume with Pricing: In the Italian category, softening olive oil prices created an opportunity to reduce consumer prices, which successfully stimulated strong volume growth of 34% YTD.

The company is actively pursuing multiple, well-defined opportunities, from expanding distribution and extending brands to strategically adjusting pricing and product portfolios to capture market share.

• Margin Improvement Programs: The company has onboarded external partners and is actively implementing programs to improve margins in packaging materials, manufacturing, and logistics. This is a clear strategic priority aimed at enhancing profitability.

• Sales Force Automation: A national rollout of Sales Force Automation is underway to drive sales productivity. As of Q3 FY26, 58% of the targeted outlets were brought onto the tech platform, with a goal of covering 375,000 outlets with the current frontline team.

• Continued Investment in Core Portfolio: The plan is to continue renewed investment in the core portfolio to accelerate growth, as evidenced by the 37% YTD increase in A&P spending.

• Innovation Pipeline: The company plans to continue leveraging new product development as a growth driver. The launch of over 70 new products in YTD FY26 demonstrates a commitment to innovation to meet evolving consumer needs.

Future plans are focused on a dual strategy of driving top-line growth through brand investments and innovation while simultaneously enhancing bottom-line profitability through technology-led sales productivity and cost-optimization programs.

• Gross Margin Expansion:

• Gross margins expanded significantly by 330 basis points (3.3%) in Q3 FY26.

• On a YTD FY26 basis, gross margins improved by 230 basis points (2.3%).

• This improvement is a direct result of margin improvement programs focused on material costs.

• EBITDA Margin Improvement:

• Proforma EBITDA margin for Q3 FY26 was 7.2%, a substantial increase from 4.4% in the same quarter last year.

• YTD FY26 proforma EBITDA margin stood at 5.3%, up from 4.1% in the previous year.

• The 80% growth in proforma EBITDA in Q3 significantly outpaced the 10% revenue growth, highlighting strong operating leverage and the success of cost-control initiatives.

The company is successfully executing its margin expansion strategy, delivering significant improvements in both gross and EBITDA margins through targeted cost-efficiency programs.

• Category-Specific Pressure:

• The Spreads & Dips business continues to be "under pressure," experiencing a loss of share in Modern Trade and E-commerce channels. This is attributed to a consumer shift towards High Protein and Chocolate variants, a gap the company is now trying to address with new launches.

• Commodity Price Volatility:

• The performance of the Premium Staples (Edible Oil) and Italian (Olive Oil) categories is linked to commodity price movements. While recent softening in olive oil prices was used to stimulate volume, future inflation could negatively impact margins or demand.

• Execution Risk:

• The success of the company's growth and margin expansion plans depends on the effective execution of multiple initiatives, including the national rollout of Sales Force Automation and the integration of the Del Monte business.

While the overall outlook is positive, the company faces specific risks in its Spreads category and remains exposed to commodity price fluctuations and the general execution risks associated with its strategic initiatives.

• New Product Launches:

• The company has been aggressive with innovation, launching over 70 new SKUs across its Act II, Sundrop, and Del Monte portfolios in YTD FY26.

• These new launches are already making a material impact, contributing INR 55 Cr, or approximately 5% of overall sales, in the first nine months of the fiscal year.

• Key launches include Popcorn Kernels, High Protein Peanut Butter variants, and new price-point packs for Sundrop oils.

• Sales Force Automation (SFA) Implementation:

• The SFA project, initiated in Q1 FY26, is being scaled up nationally to improve sales force productivity and tracking.

• Outlet enrollment on the tech platform has shown strong sequential progress, increasing from 11% of coverage in Q1 to 30% in Q2 and reaching 58% (217,000 outlets) in Q3.

The company is demonstrating strong execution on its innovation and technology roadmaps, with new products already contributing meaningfully to revenue and the sales automation project progressing rapidly.