Key Quantitative Figures and Financial Details

  • FY26 PLI Incentive: Received and recognized INR 33.86 crores for FY25 under Production Linked Incentive scheme
  • Borrowings: Standalone borrowings reduced by INR 16 crores to INR 411 crores from INR 427 crores previous year (including Kusum Spices, total additional INR 10 crores)
  • Inventory Value: Tomato processing inventory of approximately 9,000 metric tons valued at INR 70-75 crores
  • Frozen Food Growth: Delivered volume growth of approximately 28% during FY26
  • Tetra Recart Orders: Confirmed orders currently stand at approximately 400 metric tons valued at around INR 8 crores
  • Spray Drying Expansion: Investing INR 2.5 crores to expand capacity by 120 metric tons per annum
  • Solar Installations: Additional solar installations at Vankal and Gonde facilities (1,300 kWp at each facility with less than 3-year payback)
  • Interest Cost: Reduced to INR 10 crores compared to previous year
  • PLI Scheme Total: Total potential incentive of approximately INR 145 crores, with INR 83 crores received so far and INR 60+ crores remaining

Dates of Action and Effectiveness

  • Conference Call Date: 2nd June, 2026
  • Spray Drying Expansion: Commercial production targeted for December 2026
  • Pectin Production: Commercial production started approximately 7-8 days before the call (late May 2026)
  • Solar Installation: Recent additional installations at Vankal and Gonde facilities
  • PLI Incentive: Received during Q4 FY26 for FY25 performance

Parties and Entities Involved

  • Management Participants: Mr. Milan Dalal (Managing Director), Mr. Moloy Saha (Chief Executive Officer), Mr. Anand Krishnan (Chief Financial Officer)
  • Moderator: Ms. Deepali Kumari (Arihant Capital Market Limited)
  • Customers Mentioned: Coca-Cola, PepsiCo, Unilever, Dabur, Reliance (Campa brand), Costco, Walmart, Tata (Capital Foods/Ching's Masala)
  • Regulatory Reference: SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 - Regulation 30 read with Schedule III
  • Government Schemes: Production Linked Incentive (PLI) scheme, National Horticulture Board cluster development program

Operational and Strategic Updates

Business Performance Challenges

FY26 witnessed challenging operating environment with:

  • Lower realizations due to pass-through of lower raw material costs
  • Temporary disruptions in certain export markets (Middle East geopolitical situation in March)
  • Lower tomato processing volumes due to constrained availability of quality tomatoes
  • Impact from unseasonal rains affecting crop quality

Growth Initiatives and Guidance

  • Volume Guidance: Expecting 18% volume growth for FY27
  • Frozen Foods: Strong momentum continuing with U.S. market demand growth
  • Tetra Recart: Targeting INR 20 crores business in FY27 with total facility capacity of INR 80+ crores
  • Pectin Production: Commercial production started; expecting 50% capacity utilization in current year with INR 7-8 crores revenue potential at 70% gross margins
  • Frozen Segment Target: Aiming for INR 300-400 crores business in next 3-4 years (currently ~INR 100 crores)

Capacity Expansion

  • Spray drying line capacity expansion by 120 metric tons per annum
  • Tetra Recart business development with export market focus
  • AI-driven automation initiatives across operations
  • Exploring National Horticulture Board cluster development program for frozen segment expansion

Market Development

  • Export Markets: Diversifying beyond Middle East to Europe, US, and Southeast Asia for spices
  • Frozen Foods: Expanding in US market with major retailers and exploring European opportunities
  • HoReCa Segment: Focusing on hotel, restaurant and catering business segment growth
  • Geographic Mix: India represents 58% of revenue, with US and UK as other significant markets

Raw Material and Procurement

  • Mango procurement cycle: Mid-April to August first week (contributes >75% of volume)
  • Approximately 45-50% of stocks carried forward to next year
  • Domestic dispatch pattern: 60-65% moves from December to June
  • Export dispatch: Uniformly throughout the year from September to next August

Capital Structure and Financial Impact

  • Debt Reduction: Focus on reducing working capital debt
  • Long-term Debt: INR 71-72 crores with annual commitment of ~INR 20 crores
  • Capex Plans: Evaluating NHB cluster development program; no major capex planned after current initiatives
  • Working Capital: Intensive due to inventory holding for customers; improving through better debtor collection and customer advances

Forward-Looking Statements

  • Expect demand from Middle East to normalize over time
  • Anticipate good consumption in beverage industry if rains not affected till June end
  • Planning for potential El Niño effect on mangoes next year
  • Internal target to make non-mango businesses contribute 40% of total revenue without degrowing mango business