Oba’s annual report first takes the reader to Gaziantep and Hendek: roughly 3,000 tons of daily wheat milling capacity, 2,000 tons of daily pasta production capacity, exports to more than 100 countries. On paper, this is not a small food story; it is a large industrial line that grinds wheat at scale and ships dry food to the world.
Then the income statement for the first quarter of 2026 draws a thin line beneath that machinery. There are 4.83 billion TL of sales. Gross profit is 525 million TL. Operating profit is 104 million TL. Net monetary position loss is 579 million TL, deferred tax expense is 541 million TL, and at the bottom there is an 880 million TL loss. The factory is large; what is being bought in the stock is not the size of the factory, but the belief that this thin margin will thicken again.
| Period | Gross margin | Operating margin | Net margin |
|---|---|---|---|
| 2025Q1 | 15.5% | 10.0% | 5.5% |
| 2026Q1 | 10.9% | 2.2% | -18.2% |
In the first quarter of 2025, the gross margin was 15.5%. In the first quarter of 2026, it was 10.9%. On the same-period comparison, the operating margin fell from 10.0% to 2.2%; the net margin turned from a 5.5% profit to an 18.2% loss. This decline cannot be explained by an accounting line alone. Yes, TMS 29 and the tax effect enlarge the net loss; but the business sitting above those lines is not yet comfortable either. A quarter that extracts 104 million TL of operating profit from 4.83 billion TL of sales does not carry a premium valuation.
The company’s defense is real: the balance sheet is not fragile. At the end of Q1, there were 2.69 billion TL of cash and cash equivalents, roughly 74 million TL of financial debt and other financial liabilities, and 11.20 billion TL of equity. This is not a debt-wall story. The rough beauty of the case is exactly here: not a bad balance sheet, but an expensive expectation.
| Line item | 2026Q1 |
|---|---|
| Revenue | TRY 4.83bn |
| Gross profit | TRY 525m |
| Operating profit | TRY 104m |
| Net monetary position loss | TRY -579m |
| Deferred tax expense | TRY -541m |
| Net loss | TRY -880m |
The cash side is less polite. Cash flow from operating activities was negative 939 million TL. Inventories rose from 1.02 billion TL at the end of 2025 to 2.07 billion TL at the end of the first quarter of 2026; the inventory movement consumed 1.05 billion TL in the cash flow statement. This can be seen from time to time in a growing export factory. But when margins are also narrowing in the same quarter, the inventory shelf does not say only “growth preparation” to the investor; it also says “working capital risk.”
Management’s language in the annual report has two parts. On one side, it describes efficient use of production capacity, protection of export markets, preservation of a strong financial structure, and the achievement of most targets. On the other, the same report admits that targeted profitability remained limited because of high inflation, exchange-rate volatility, and energy costs. Q1 2026 looks like the continuation of that second sentence.
The risks come from the company’s own raw material. The main inputs of pasta production are wheat and semolina; energy, logistics, and supply costs cut directly into the margin. Because a significant share of sales is tied to exports, currency movements, competition, country-level demand, and trade policies are not just footnotes. Management writes that the risk committee monitors foreign exchange, energy, inflation, and export competition as priority areas; the market prices the same list as a multiple.
There is also a control reality in the governance structure that needs to be read. According to the annual report, Alpinvest holds 57%, Turkey Pasta Holding 23%, and the publicly traded float 20%. A and B group shares carry board nomination privileges and five voting rights at the general assembly. The report states that related-party transactions are conducted in line with market conditions and that there were no transactions in favor of the controlling company. Good. Still, the minority investor should know that what is being bought here is not a scattered public float, but a privileged control table.
| Valuation input | Amount / ratio |
|---|---|
| Market value | TRY 24.39bn |
| Net cash | TRY 2.61bn |
| Enterprise value | TRY 21.78bn |
| Trailing-four-quarter EBITDA | TRY 765m |
| EV/EBITDA | 28.5x |
| Price/book | 2.18x |
The harshest part of the price is here. With market data from May 21, 2026, OBAMS trades at 8.48 TL, with a market value of roughly 24.39 billion TL. On Q1 equity, that is 2.18x book value. After stripping out cash and financial debt, the enterprise value is roughly 21.78 billion TL. EBITDA for the last four quarters is approximately 765 million TL; that means 28.5x EV/EBITDA.
This multiple cannot be carried merely by saying “it is a food company, it is defensive.” For it to be carried, the margin must truly come back. If we annualize Q1 sales and use the same cost base, the picture is unforgiving: if the gross margin stays around 11%, annualized EBITDA is roughly 890 million TL and EV/EBITDA is about 24.5x. If the gross margin rises to 18%, EBITDA approaches 2.27 billion TL and the multiple falls to 9.6x. In other words, the hidden sentence inside today’s price is this: “This factory will again approach its old margin.”
| Gross-margin assumption | Annualized EBITDA | EV/EBITDA |
|---|---|---|
| 8% | TRY 335m | 65.0x |
| 10.9% (2026Q1) | TRY 890m | 24.5x |
| 15% | TRY 1.69bn | 12.9x |
| 18% | TRY 2.27bn | 9.6x |
The anti-thesis is strong and fair. Oba is not an empty story. It is an industrial company founded in Gaziantep in 1966, with two production legs, a wide export network, and net cash on its balance sheet. The disclosures regarding the transfer of the noodle factory to Nissin Foods specifically emphasize that the pasta factories were not sold; the core production asset remains in place. The 35 million dollar Africa-weighted sales contract in 2025 also shows that the company can find demand. If the gross margin returns above 15% within two or three quarters, inventories unwind, operating cash turns positive, and the monetary loss/tax burden stops crushing net profit, today’s expensive-looking multiple can normalize quickly.
My judgment is still Expensive. Because the investor today is not only buying a low-debt export factory; the investor is also paying upfront for margin repair. The Q1 data does not show that repair. Gross margin is narrow, operating profit is thin, cash is tied up in inventory, and TMS 29 plus deferred tax are battering the net result. In this combination, 2.18x book value and 28.5x last-four-quarter EV/EBITDA suit a growth investor pricing a recovery more than a patient value investor.
This stock may belong to an investor who trusts the large production line and the balance-sheet comfort enough to buy margin normalization early. For the investor who wants to see the proof first, the three things to wait for are clear: gross margin rising above 15%, operating cash turning positive, and inventory growth closing not with a story but with collection. To become a partner in OBAMS today is not to invest in two thousand tons of capacity, but to put money into the belief that this capacity will once again leave behind a thick margin.