DSM Fresh Foods, parent of the Zappfresh brand, plans to triple its revenue to ₹600 crore by FY28, up from ₹220.8 crore in FY26. The strategy relies on scaling its asset-light retail network to 500 partner stores and increasing exports. Investors are monitoring the company’s ability to manage rising debt, margin pressure from a shifting product mix, and stiff competition in the fresh food sector.
DSM Fresh Foods Ltd, the company behind the Zappfresh brand, has announced a target to reach ₹600 crore in revenue by FY28. This plan marks a significant growth jump from the ₹220.8 crore reported in FY26. The company’s roadmap for this expansion centers on two main areas: growing its physical footprint and expanding its international reach.
The core of the domestic strategy involves an asset-light expansion model. The company aims to set up 500 partner-operated meat shops this fiscal year, allowing local entrepreneurs to manage the stores while the company provides the supply chain and brand support. This approach is intended to help the company scale without the heavy capital spending required for company-owned outlets. On the global front, the company is targeting growth in markets including the UK, Canada, the US, and the Middle East, with a specific focus on frozen food products.
While the growth targets are ambitious, the company faces several financial and operational challenges that investors are evaluating. In FY26, DSM Fresh Foods reported a net profit of ₹14.3 crore and an EBITDA of ₹31.1 crore, showing strong revenue growth of 69%. However, maintaining these figures while scaling up presents hurdles. Analysts and market observers have noted risks related to the company’s rising debt levels, which are being used to fund operations and expansion projects like the recent acquisition of Avyom Foodtech.
Profit margins are another key area to watch. The company is seeing a shift in its business mix, with a higher contribution from B2B (business-to-business) volumes compared to its higher-margin B2C (business-to-consumer) retail business. This change in product mix has the potential to compress profit margins. Furthermore, the company is dealing with pressure on working capital management, as indicated by rising debtor days, which means it is taking longer to collect payments from customers.
The fresh food and meat retail sector is also becoming increasingly competitive. Zappfresh must navigate challenges from organized modern trade retailers and the rise of quick-commerce platforms that offer rapid delivery, a segment where Zappfresh has intentionally chosen not to compete in order to prioritize profitability and supply chain stability. Additionally, rising raw material costs remain a constant risk that could impact gross margins if the company cannot pass these costs on to consumers.
Looking ahead, the next important updates for shareholders will be the company’s ability to stabilize its debt-to-equity ratio and manage its working capital cycle efficiently. Investors will likely track the performance of the new partner-store model to see if it can deliver the expected revenue without inflating costs. Any updates on margin recovery or commentary on demand trends in international markets will also be critical for assessing the company’s progress toward its FY28 target.