Taufika Foods and Lovello Ice-cream financial analysis: 43% sales growth on a restated, debt-heavy balance sheet (Oct 2026)

Investment considerations: fast-growing ice-cream sales against a qualified audit and BDT 2.3bn of borrowings

Taufika Foods and Lovello Ice-Cream PLC makes and sells ice cream under the Lovello brand from a factory at Bashile, Kathali, Valuka in Mymensingh, with a head office in Banani, Dhaka [8] [1 p.10]. It listed on the Dhaka Stock Exchange in 2021 after a BDT 300m initial public offering subscribed in January 2021 [8] [6 p.3]. It has 98.175 million shares, its fiscal year ends on 30 June, and it sells through 17 sales territories and 18 depots, from which trade receivables are collected [8] [1 p.143] [1 p.126].

The business story in the filings has two halves. The operating half is steady: net sales went from BDT 779m in FY2018 to BDT 1,151m in FY2025 and gross margin stayed in a 40.8%-42.3% band in every year [5 p.68] [1 p.75] [1 p.130]. Nine-month sales to March 2026 were BDT 1,423m, up 42.9%, and nine-month profit doubled to BDT 301m [2 p.3]. The financial half is heavier: the company owns or leases a fleet of freezers placed in shops, which is why depreciation runs at 11.9%-15.1% of sales and finance cost at 12.4%-17.5% of sales [14]. In FY2025 the auditor found that assets and liabilities had been misstated since 2021; the restated June 2024 balance sheet carries BDT 811m more long-term loans than was first reported [1 p.121] [14]. This note sets out what the filings show on both halves.

Business: a freezer-led ice-cream distributor whose four biggest lines make 56% of sales

Lovello's product list in the FY2024 accounts has 32 lines across sticks (lolly, chocobar, crunchy bar), cups, cones, 250 ml to 1 litre containers, kulfi, cakes and premium flavours [3 p.27]. The four largest were 100 ml cups (BDT 145m), mini cones (BDT 140m), maxi cones (BDT 136m) and the 'Hidden Heart' 50 ml stick (BDT 131m); together they made 56% of FY2024 net sales [3 p.27]. The directors describe the range as covering both premium and regular segments, with the mini series selling in rural as well as urban areas [6 p.2].

Ice cream needs a cold chain. The company buys chest freezers and places them in shops, and runs refrigerated vans and depots; at June 2024 freezers were BDT 989m of the BDT 1,864m gross cost of property, plant and equipment, plus BDT 325m of leased freezers [1 p.158]. That is why most depreciation is booked in marketing and selling expenses (BDT 128m of BDT 151m in FY2025) and why the company earns 'rent received against freezer' (BDT 25.2m in FY2025) [1 p.151]. The IPO money went the same way: BDT 64m on freezers, BDT 86m on plant, BDT 27m on vehicles and BDT 90m on loan repayment [6 p.3].

One feature of that FY2024 product note stands out: every one of the 32 lines grew by exactly the same 5.14% over FY2023 (for example kulfi BDT 79.3m to 83.4m, mini cones BDT 132.9m to 139.7m) [3 p.27]. Real product sales rarely move in lockstep, which suggests the split is an allocation of the total rather than a record of what each product sold. The note is also headed 'quantity wise' but gives taka, not units. The filings therefore do not let an investor separate volume from price, which the sector format asks for.

Ice cream carries VAT at 15% and supplementary duty at 5% [3 p.16]. In FY2025 gross sales were BDT 1,446m and SD and VAT BDT 295m, 20.4% of gross, leaving net sales of BDT 1,151m [1 p.150]. Any change in the SD rate in a budget moves net sales and shelf prices directly.

Line items: a 42% gross margin is eaten by freezer depreciation and interest

Net sales. Sales rose 18.5% in FY2019, were flat in FY2020 and fell 9.8% in FY2021, the COVID year, before recovering to BDT 960m in FY2022 [14]. They then stalled for two years (-1.7% in FY2023, +5.1% in FY2024) and accelerated to +16.0% in FY2025 and +42.9% in 9M FY2026 [14] [2 p.3]. The company attributes FY2025 profit growth to sales growth of 16% [1 p.152] and 9M FY2026 profit growth to sales growth of 43% [7]; it gives no split by volume and price. Demand drivers named by the directors are rising incomes, urbanisation and rural electrification; they cite 16% growth in the ice-cream market in 2025 without a source [6 p.2]. Ice cream is seasonal, and Q3 (January-March) is a cool-weather quarter: Q3 FY2025 net sales were only BDT 254m against BDT 469m in Q3 FY2026 [2 p.3].

Cost of goods sold. Raw materials were 77% of FY2025 cost of production (BDT 550m of BDT 714m) and factory overhead 23% (BDT 164m), of which electricity BDT 44.6m, wages BDT 48.3m and depreciation BDT 44.9m [1 p.150]. Raw-material consumption rose 24.7% in FY2025 while net sales rose 16.0%, but gross margin still edged up to 42.3% because finished-goods stock rose by BDT 48m [1 p.150] [14]. The inputs are milk powder, sugar, flavours and packaging; one FY2024 payables list names Danish Milk Bangladesh and plastic packaging suppliers [3 p.25]. Imported milk powder exposes cost to the taka, yet margin barely moved through FY2022-FY2024, so price increases have passed cost on. The auditor notes that inventory was valued at cost without a net-realisable-value test [1 p.126].

Operating expenses. Administrative expenses are small and flat at BDT 15-17m [1 p.151]. Marketing and selling expenses were BDT 151m in FY2025, but 85% of that (BDT 128m) was depreciation of freezers and vehicles; advertising was only BDT 2.1m and sales salaries BDT 12.1m [1 p.151]. So the 'marketing' line is really the cost of the cold chain. It moves with freezer purchases, not with campaigns: it jumped by BDT 25.5m in FY2025 as depreciation rose by BDT 26.9m [1 p.151]. In 9M FY2026 operating expenses rose only 2.6% while sales rose 42.9% [2 p.3].

Finance cost. This is the largest line after cost of goods sold: BDT 145m in FY2025, of which bank-loan interest BDT 95.5m and lease interest BDT 47.3m [1 p.151]. It was 16-18% of sales in FY2018-FY2020, fell to about 12.5% after the IPO repaid BDT 90m of loans, and has stayed there [14] [6 p.3]. The main Shimanto Bank term loans carry 13.5% [1 p.146]. Against average borrowings, however, the income-statement finance cost works out to only 6.6% in FY2025, down from 10.3% in FY2024 [14]. The gap is explained by the BDT 90m increase in 'un-allocated bank interest' capitalised in advances during FY2025 [1 p.144]. Had that amount been charged to profit, FY2025 profit before tax of BDT 192m would have been about BDT 103m, before any tax effect [14]. Each 1pp on BDT 2.2bn of average borrowings is about BDT 22m of interest a year at the FY2025 debt level [14].

Other income and tax. Other income doubled to BDT 27.4m in FY2025, almost all freezer rent (BDT 25.2m against BDT 10.2m) [1 p.151]. Workers' profit participation is 5% of profit [1 p.112]. Income tax has run at 20% of profit before tax since FY2023 [14]; the company paid only BDT 3.5m of tax in cash in FY2025 while the provision rose to BDT 156m [1 p.132] [1 p.129], and BDT 232m by March 2026 [2 p.2]. The unpaid tax provision is a liability that will need cash.

9M FY2026: sales +43% and profit doubled as costs and interest stayed flat

The nine months to March 2026 are the strongest period on record. Net sales were BDT 1,423m (+42.9%), gross margin 42.7% (flat), operating expenses BDT 133m (+2.6%) and finance cost BDT 119m (-1.3%), so net profit doubled to BDT 301m and EPS reached BDT 3.06 against BDT 1.59 [2 p.3] [7]. Q3 alone earned BDT 91m against BDT 20m [2 p.3]. Operating cash flow was BDT 643m and the company repaid BDT 136m of bank loans [2 p.5]. Two balance-sheet moves offset part of that: trade payables rose from BDT 230m to BDT 380m, and inter-company receivables rose from BDT 8.7m to BDT 148m, an outflow of BDT 139m shown in financing activities [2 p.2] [2 p.5]. The filing does not name the inter-company counterparty. These are unaudited figures, and the FY2026 audit is due at the 5-Nov-2026 board meeting [7].

Ratios: stable ~42% gross margin, ROE 14%, but a 376-day cash cycle and 1.9x net debt/equity

Ratios are computed in the model from the filed statements. Margins are the stable part. Gross margin ranged 40.8%-42.3% over FY2018-FY2025 and operating margin 25.4%-27.8% over FY2021-FY2025 [14]. Net margin roughly doubled from 5.5% (FY2018) to 13.4% (FY2025) as finance cost fell from 16% to 13% of sales and tax fell from 49% to 20% of pre-tax profit [14]. ROE was 9.6% in FY2023, 10.9% in FY2024 and 14.1% in FY2025; on annualised 9M FY2026 profit it is 32.8% [14]. EBITDA covers finance cost about 3.4x, but operating profit only 2.2x [14].

Efficiency is the weak part. Receivables were 184 days of sales at June 2025, up from 135 in June 2022; inventories 319 days of cost of goods sold; the cash conversion cycle was 376 days [14]. For a product sold through shops, that is long. Receivables are spread across 17 territories and only BDT 29m (5%) was more than six months old at June 2025, but there is no bad-debt provision and the auditor says the company has no written credit policy [1 p.143] [1 p.126]. On annualised 9M FY2026 sales the cycle shortened to 215 days, helped by higher payables [14].

What drives returns to shareholders. Three things stand out from the history. First, earnings quality: finance cost took about 30% of EBITDA in FY2025, and the FY2025 profit includes the benefit of interest parked in advances, so reported EPS is higher than an all-interest-expensed figure would be [14] [1 p.144]. Second, cash conversion: after interest and capex the business consumed cash in FY2023 and FY2025 and produced it in FY2024 and 9M FY2026 [14]. Third, capital allocation: the company paid out between 67% and 98% of profit in cash dividends from FY2021 to FY2025 while borrowing to buy freezers and plant, and in the last two years added bonus shares, which raised the share count from 85m to 98.175m without bringing in cash [14] [8]. The payout ratio has fallen each year since FY2021 as profit grew faster than the cash dividend per share. A shareholder therefore depends on profit continuing to grow faster than interest, and on the capitalised interest and tax arrears not turning into a large one-off charge.

Balance sheet: the restatement added BDT 811m of loans and BDT 248m of interest sits in advances

The FY2025 accounts restate the 30-Jun-2024 balance sheet. Management says liabilities and the matching assets 'were not completely recorded in the FY 2020-21 to 2023-24' and were corrected under IAS 8 [1 p.65]. The effect is large: PPE +BDT 323m, inventories +BDT 51m, advances +BDT 332m, total assets +BDT 706m, long-term loans +BDT 811m and equity -BDT 83m [14]. Two Shimanto Bank loan accounts of BDT 685m and BDT 126m appear in the restated list that were not in the June 2024 accounts [1 p.146]. DSE was told FY2024 EPS was restated to BDT 1.79 and NAV to BDT 12.40 [7]; the FY2025 income statement still shows the FY2024 comparative at BDT 1.43 [1 p.130], so the restated FY2024 profit is not shown in the statements.

Advances are now the second-largest asset after PPE. At June 2025 they were BDT 773m, or 19.9% of total assets [1 p.129] [14]. Of that, BDT 229m is 'un-allocated bank interest', BDT 19m 'un-allocated lease interest', BDT 220m an advance to a land supplier, BDT 227m advances to suppliers and BDT 73m advance tax [1 p.144]. The auditor says the land advances were paid to an agent rather than the landowner and some supplier advances have stayed unadjusted for a long time [1 p.121]; management replies that paying an agent is legal under the Contract Act 1872 and that capitalising the interest follows IAS 23 [1 p.65]. IAS 23 allows borrowing costs to be capitalised into a qualifying asset that is being built; the filings do not name the asset the BDT 248m relates to.

Cash is BDT 138m, but BDT 116m of it was cash in hand, BDT 110m at depots, against BDT 22m at banks [1 p.144]. Bank confirmations from Prime, AB, National, NRB and IFIC banks, and confirmations of receivables, payables and supplier advances, were mostly not received by the auditor [1 p.126]. Borrowings were BDT 2,280m at June 2025 and BDT 2,168m at March 2026; long-term loans of BDT 1,918m are from Shimanto Bank (BDT 1,358m) and Trust Bank (BDT 560m) [1 p.146] [2 p.2]. The DSE company page lists the same BDT 1,616m long-term and BDT 302m short-term (current) loans [8].

Cash flow: after interest and capex, FY2025 free cash flow was BDT -119m; 9M FY2026 turned positive

Reported operating cash flow has exceeded profit in every year shown: 1.7x in FY2023, 2.9x in FY2024 and 2.1x in FY2025 [14]. That is flattered by classification. The company puts 'financial expenses' (BDT 145m in FY2025) under financing activities, as IAS 7 permits, and it adds back depreciation of BDT 174m [1 p.132] [1 p.152]. After interest, operating cash flow was BDT 63m, 226m and 176m, and after spending on PPE and work in progress, free cash flow was BDT -148m, 66m and -119m [14]. Over FY2023-FY2025 the shortfall and dividends of BDT 260m were funded by net bank loans of BDT 441m [4 p.9] [3 p.9] [1 p.132]. 9M FY2026 broke the pattern: free cash flow after interest was BDT 336m and loans fell [2 p.5] [14].

Audit and governance: ten auditor findings, late interims and a 6.8pp fall in sponsor holding since June 2025

The FY2025 opinion by Kazi Zahir Khan & Co. is qualified, and DSE published it on 22-Dec-2025 [1 p.121] [7]. The auditor's points are summarised below. Beyond the restatement, it records non-compliances: VAT payable of BDT 208m unpaid since September 2024; BDT 4.9m of undistributed dividend not moved to the Capital Market Stabilisation Fund; and the increase in share capital not filed with the RJSC [1 p.121]. Emphasis-of-matter paragraphs add that the company has no written sales or returns policy, has not applied IFRS 15 or the IFRS 9 expected-credit-loss model, and that its provident fund (since 2021) and workers' profit participation fund (since inception) are unaudited [1 p.126]. Management's reply attributes the VAT arrears to slow collections and says the fund audits have been decided [1 p.65].

Interim reporting has also been late. The Q3 FY2025 accounts (to March 2025) were considered by the board on 9-Oct-2025 and published on 12-Oct-2025, the same day as the FY2025 annual results, about six months after the quarter ended [7]. The IPO-fund certificate records two BSEC extension requests that had not been approved, and spending above the prospectus amounts on freezers (BDT 5.9m) and vehicles (BDT 6.4m) without BSEC approval [6 p.4] [6 p.5].

The board has six members: chairman Datin Shamima Nargis Haque, managing director Dato' Engr. Md. Ekramul Haque, their daughters Muhsinina Taufika Ekram and Muhsinina Sharika Ekram, and two independent directors, Ruhul Ameen FCMA (audit committee chair) and Barrister Sajed Ahammad Sami [1 p.76]. Taufika Engineering Limited, whose directors are the chairman and MD, held 7.08% at June 2025 [1 p.77] [7]. On 25-Nov-2024 the board approved buying 50% of Sharika Foods & Amandala Limited (500,000 shares at BDT 10) subject to AGM consent [7]; that AGM has passed, and the filings in the corpus do not show the outcome. On 3-Dec-2025 the company told DSE that a court order imposing a travel ban on the MD and his family, reported online on 26-Nov-2025 in a case filed by the Anti-Corruption Commission, had been 'procured most illegally' and had no financial impact [7]. ARGUS Credit Rating rated the company A (long term) and ST-2, stable, on 5-Jan-2026 [7].

Peers: the highest gross margin of three food makers, and the highest interest burden (12.6% of revenue)

No other ice-cream maker is listed on DSE. The closest listed food peers are Rangpur Dairy & Food Products (RDFOOD), a milk processor that shares Lovello's dairy input costs, and Olympic Industries (OLYMPIC), the largest listed biscuit and confectionery maker; all three have June year ends [9 p.51] [10 p.10]. Figures are from each company's FY2025 statements on the labels shown in the workbook. Lovello's gross margin of 42.3% is far above RDFOOD's 19.4% and OLYMPIC's 23.9%, but its finance cost takes 12.6% of revenue against 5.8% and 0.2% [14]. Net margin (13.4%) is the highest of the three; ROE (14.1%) is below OLYMPIC's 17.4% and above RDFOOD's 3.6% [14]. RDFOOD's FY2025 operating cash flow was BDT 12.5m on BDT 46.1m of profit [9 p.53].

Price and multiples: BDT 49.0 is 15.7x trailing earnings and 3.6x book

The shares rose from BDT 32.8 (adjusted) at June 2023 to BDT 93.9 at June 2025, then fell to BDT 70.9 at June 2026 and BDT 49.0 on 29-Oct-2026; the 52-week range is BDT 42.2-96.6 [13] [8]. The largest monthly fall was in August 2026 (BDT 69.5 to 52.5); DSE news shows no company disclosure that month [13] [7]. At BDT 49.0 the market value is BDT 4,811m, 31.2x FY2025 EPS, 15.7x trailing 12-month EPS and 3.6x March 2026 NAV [14]. These multiples are shown as facts against the company's own history and peers.

What's next: the audited FY2026 accounts on 5-Nov-2026 are the main signpost

The next filing settles several open questions. The board meets on 5-Nov-2026 to consider the audited FY2026 accounts [7]. That set will show whether the auditor's FY2025 qualifications were cleared, how much more interest was capitalised in advances, what the inter-company receivable of BDT 148m is, and whether the BDT 208m VAT arrears and BDT 232m tax provision were paid. It will also show Q4 (April-June), the peak ice-cream season, which the 9M figures leave out. The AGM date and the FY2026 dividend should come from the same meeting. On tax, LDC graduation was moved from 24-Nov-2026 to 24-Nov-2029 by the UN General Assembly on 29-Oct-2026 [11] [12].

Passed events whose outcome is not yet in the filings: the 25-Nov-2024 board decision to buy 50% of Sharika Foods & Amandala (passed), outcome unknown; the 14th AGM on 28-Dec-2025, which was asked to raise authorised capital from BDT 1bn to BDT 2bn (passed), outcome unknown [7] [1 p.10].

Risks: the reliability of the balance sheet and the cost of debt matter more than ice-cream demand

Each risk below is tied to the line it moves. The largest are the quality of the reported numbers and the interest burden, because a company with 1.9x net debt to equity and a qualified audit has little room for a further restatement [14].

Key questions: capitalised interest, the BDT 148m inter-company balance and volumes

Lovello is a branded ice-cream maker with a stable gross margin and fast recent sales growth, built on a freezer fleet financed largely with bank debt. The filings show the operating business improving in 9M FY2026; they also show a restated balance sheet, interest held on the balance sheet instead of in profit, tax and VAT arrears, and an audit opinion that is qualified. On 29-Oct-2026 the shares traded at 15.7x trailing 12-month EPS and 3.6x March 2026 NAV [14].

FAQ

What does Taufika Foods and Lovello Ice-cream PLC do?

It makes and sells Lovello ice cream (sticks, cups, cones, containers, kulfi) from a factory in Valuka, Mymensingh, through shops served by its own freezers, vans and 18 depots [3 p.27] [1 p.126].

When does Lovello's fiscal year end?

30 June [8].

What did Lovello earn in FY2025 and 9M FY2026?

FY2025 net profit BDT 154m, EPS BDT 1.65; 9M FY2026 net profit BDT 301m, EPS BDT 3.06 (unaudited) [1 p.130] [2 p.3].

Is the audit opinion clean?

No. The FY2025 opinion is qualified over restated balances, unverified assets and capitalised interest [1 p.121].

How much debt does Lovello have?

BDT 2,280m of loans and leases at June 2025 and BDT 2,168m at March 2026 [14].

What dividend did Lovello pay for FY2025?

11% cash and 5% stock, credited and paid by 11-Jan-2026 [7].

Sources

1. Taufika Foods and Lovello Ice-Cream PLC Annual Report 2024-25 (year to 30-Jun-2025) · link · accessed 2026-10-31
2. Taufika Foods and Lovello Ice-Cream PLC unaudited financial statements, nine months to 31-Mar-2026 · link · accessed 2026-10-31
3. Taufika Foods and Lovello Ice-Cream PLC audited financial statements 2023-24 · link · accessed 2026-10-31
4. Taufika Foods and Lovello Ice-Cream PLC audited financial statements 2022-23 · link · accessed 2026-10-31
5. Taufika Foods and Lovello Ice-Cream PLC Annual Report 2021-22 · link · accessed 2026-10-31
6. Taufika Foods and Lovello Ice-Cream PLC, directors' report extract with IPO fund utilisation certificate (dated 20-Oct-2024) · link · accessed 2026-10-31
7. Dhaka Stock Exchange, LOVELLO news archive (company disclosures, Nov-2024 to Oct-2026) · link · accessed 2026-10-31
8. Dhaka Stock Exchange, LOVELLO company page (dividend history, shareholding, loans, market data, 1-Nov-2026) · link · accessed 2026-10-31
9. Rangpur Dairy & Food Products Limited Annual Report 2024-25 · link · accessed 2026-10-31
10. Olympic Industries PLC Annual Report 2024-25 · link · accessed 2026-10-31
11. The Daily Star, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
12. The Business Standard, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
13. AnalystBro price data (TradingView feed): DSE:LOVELLO, DSE:RDFOOD, DSE:OLYMPIC bars to 29-Oct-2026 · link · accessed 2026-10-31
14. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31