Indonesia equity strategy - Meal program: Expect a better trickle-down effect

Meal program: Expect a better trickle-down effect

We view the Nutritious Meal Program as an increasingly important demand stabiliser for mid- to low-income consumers heading into 2026. Indonesia concluded the program’s first year with IDR58trn in disbursement, equivalent to ~82% of the full-year budget, broadly in line with our expectation. Execution was heavily back-loaded, with average monthly disbursement accelerating to IDR12trn in 4Q25 from just IDR2trn in 9M25.

A more meaningful implication could be a higher disbursement in 2026 as the program starts off with a high base. We estimate that the meal program may disburse up to IDR270trn in 2026F, implying a near five-fold increase vs 2025. This should provide firmer support for mid- to low-income consumers through relatively stable prices for soft commodities, household savings on meal costs, and job creation from kitchen operations.

First-year recap: learning curve and infrastructure ramp-up

Disbursement remains contingent on the availability of human resources and kitchen infrastructure, both of which faced bottlenecks through late-July 2025. Beyond capacity constraints, the program also requires continuous refinement in disbursement mechanics and quality standards – a potential challenge for a newly rolled-out initiative.

As of 2025, the program had scaled up to 18.5K kitchens and 52mn recipients (~63% of their respective targets). This provides a solid base for a stronger disbursement trajectory in 2026, in our view. We expect the program to scale up to 30K kitchens and reach 83mn recipients, both reaching their full targets, though the pace of expansion is likely to moderate as most easily accessible locations have been majorly covered.

Soft commodity inflation remains modest and manageable

We observe rising producer prices for soft commodities alongside the program’s ramp-up period. However, inflation remains manageable, as most commodities experienced deflation prior to the program’s implementation. This results in improved terms of trade for farmers and fishermen, supporting grassroots purchasing power on top of the direct stimulus effect.

Market positioning: FMCG and retail

Given the expected step-up in disbursement, we see FMCG and retail as the primary beneficiaries. Our estimates imply average monthly disbursement of IDR23trn in 2026F (vs IDR4.7trn in 2025), a near five-fold increase.

Execution risks remain, particularly around technical implementation. That said, even if the monthly run rate sustains at IDR12trn, total disbursement would still reach IDR144trn, a near three-fold increase. Our top picks against this backdrop are ULTJ IJ, MYOR IJ, CMRY IJ, ICBP IJ, AMRT IJ, and MIDI IJ – all rated Buy

Fig. 8: Trickle down estimation – our estimated disbursement could reach 39% of 2026F regional transfer

IDRtn	Meal Budget	Est. R/T 2026F	% R/T
Java	134	228	59%
Sumatera	65	173	38%
Kalimantan	18	102	18%
Sulawesi	21	75	28%
Bali & Nusra	17	44	38%
Maluku & Papua	14	71	20%
Total	270	693	39%

Source: MoF, Verdhana estimates

INVESTMENT RATINGS
A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general.

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Research Analysts

Jupriadi Tan (Jupriadi.tan@verdhana.id)

Gerald Hugo (Gerald.hugo@verdhana.id

Tags: EQUITY STRATEGY, Indonesia equity strategy, Jupriadi Tan, Gerald Hugo

Indonesia equity strategy - Meal program: Expect a better trickle-down effect

Meal program: Expect a better trickle-down effect

Fig. 1: Meal program realization (1/3) – IDR58trn disbursed out of IDR71trn budget

Fig. 2: Meal program realization (2/3) – 52mn recipients out of 83mn target

Fig. 3: Meal program realization (3/3) – 18.5K kitchen out of 30K target

Fig. 4: Monthly trend of meal program rollout

Fig. 5: Soft commodity prices trend – monthly inflation picks up alongside the ramp up

Fig. 6: Improved terms of trade by farmers and fishermen

Fig. 7: Vendors by region – expansion was focused on Java given its accessibility

Fig. 8: Trickle down estimation – our estimated disbursement could reach 39% of 2026F regional transfer

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Indonesia equity strategy - Meal program: Expect a better trickle-down effect

Fig. 1: Meal program realization (1/3) – IDR58trn disbursed out of IDR71trn budget

Fig. 2: Meal program realization (2/3) – 52mn recipients out of 83mn target

Fig. 3: Meal program realization (3/3) – 18.5K kitchen out of 30K target

Fig. 4: Monthly trend of meal program rollout

Fig. 5: Soft commodity prices trend – monthly inflation picks up alongside the ramp up

Fig. 6: Improved terms of trade by farmers and fishermen

Fig. 7: Vendors by region – expansion was focused on Java given its accessibility

Fig. 8: Trickle down estimation – our estimated disbursement could reach 39% of 2026F regional transfer

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