Sido Muncul Retains Market Leadership Despite Q1 2026 Revenue Decline

JAKARTA — Jakartaweekly.com, PT Industri Jamu Dan Farmasi Sido Muncul Tbk, Indonesia’s largest herbal medicine manufacturer, reported a 19% year-on-year decline in revenue during the first quarter of 2026, primarily due to distributor inventory adjustments rather than weakening consumer demand.

The company recorded revenue of Rp640.5 billion in Q1 2026, compared to Rp789.1 billion during the same period last year. However, President Director Irwan Hidayat emphasized that the decline was not caused by lower end-consumer demand.

“The decline in financial performance was caused by restrictions on sales to distributors as part of inventory normalization efforts. Consumer demand remains stable and even increased in several regions,” Irwan told Jakartaweekly.

Operating through a nationwide network of more than 120 distributors, Sido Muncul said it continues to maintain leadership in Indonesia’s herbal medicine market by focusing on innovation and a strong commitment to social and environmental sustainability.

According to management, the inventory adjustment policy was introduced to address excessive stock accumulation at distributor level. The issue intensified after distributors purchased large quantities at old prices toward the end of 2025, before official price increases took effect.

Under the company’s tiered sales system, distributors receive incentives such as discounts or rewards when purchasing in large volumes. As a result, some distributors sold products below the newly adjusted market price, creating pricing distortions.

“They bought products using old prices and then sold them cheaply in the market, even after official prices increased. That damages the market,” Irwan explained.

Despite lower revenue recognition, retail demand remained resilient, particularly in Java and Sumatra, where consumer demand continued to rise. The company said sales data from distributors to retailers showed no significant decline, indicating that the company’s business fundamentals remain solid.

Preparing Growth Strategy Ahead of 75th Anniversary

As Sido Muncul approaches its 75th anniversary in November 2026, the company has prepared six strategic initiatives aimed at driving long-term growth.

The first initiative is the launch of SidoHerbalPedia, an educational platform focused on increasing public understanding of herbal-based medicine.

Second, the company plans to strengthen upstream agricultural research to improve the quality of spices and medicinal plants used as raw materials.

Third, Sido Muncul is expanding research into herbal treatments for diseases such as cancer, diabetes mellitus, and immune system enhancement, as part of efforts to broaden its scientifically validated herbal product portfolio.

Fourth, the company will conduct additional preclinical testing on existing products to strengthen scientific validation and improve consumer confidence.

Fifth, Sido Muncul is accelerating international expansion by targeting mainstream retail markets abroad, particularly in Saudi Arabia and China.

“We are working to secure approval from Saudi Arabia’s food and drug authority so our products can enter their retail market,” Irwan said.

The sixth initiative focuses on maintaining product quality across all business lines while improving operational efficiency through production optimization, packaging improvements, supplier management, promotional spending efficiency, and supply chain enhancement.

Strong Profitability Maintained Throughout 2025

Throughout 2025, Sido Muncul recorded revenue of Rp4.08 trillion, up 4% year-on-year, while net profit reached Rp1.23 trillion.

The performance was achieved despite continued pressure from selective consumer spending, foreign exchange fluctuations, and raw material price volatility. Nevertheless, the company maintained strong profitability, posting an operating margin of 38% and a net profit margin of 30%.

Entering 2026, management remains optimistic about growth prospects, supported by improving domestic purchasing power, rising health awareness, and opportunities for continued international expansion.

Trimegah Securities Sees Temporary Sales Pressure

Research analysts at Trimegah Sekuritas Indonesia — Ignatius Samon, Heribertus Ariando, and Luther Avery — noted in a March 31, 2026 research report that Sido Muncul’s performance in the first two months of 2026 remained stable, supported by higher mobility and health awareness during the Lebaran season.

However, the analysts projected weaker first-quarter sales due to the company’s ongoing distributor inventory reduction initiative, which is expected to continue for three to four months.

For the remainder of 2026, the brokerage said Sido Muncul’s strategy will focus on launching new products, optimizing channel execution, shifting toward more cost-effective marketing campaigns, and expanding both existing and new export markets.

Management has also decided not to increase average selling prices (ASP) this year, citing geopolitical uncertainties and concerns over post-Lebaran consumption trends in order to maintain product affordability and protect volume growth.

Trimegah Securities projects moderate growth of 5% to 8% year-on-year in both revenue and earnings for 2026.

The brokerage also revised down its 2026 and 2027 earnings forecasts by 7% and 9%, respectively, after factoring in softer-than-expected 2025 performance, more conservative volume growth assumptions in the herbal segment, and the company’s decision not to raise prices this year.

Following the revision, Trimegah estimates Sido Muncul’s earnings will reach Rp1.3 trillion in 2026 and Rp1.4 trillion in 2027, representing annual growth of 6% and 8%, respectively, which remains within the lower end of management’s guidance range.