Aayush Food And Herbs Ltd Management Discussions

Indian Economy Overview

Despite persistent global economic headwinds, including trade uncertainties and geopolitical tensions, the Indian economy demonstrated remarkable resilience in FY 25 and is projected to maintain its position as the fastest growing major economy in the world. Real GDP grew by

6.5%, reaching 187.97 lakh crore at constant prices. This growth was driven primarily by a 9.4% expansion in the construction sector, 8.9% in public administration and defense, and 7.2% in financial, real estate, and professional services, reflecting robust activity across key segments of the economy.

On the demand side, Private Final Consumption Expenditure (PFCE) increased by 7.2%, indicating sustained domestic demand and healthy consumption trends across both rural and urban markets. Gross Fixed Capital Formation (GFCF) also posted a 7.1% growth, underscoring continued investor confidence and momentum in capital-intensive sectors.

The primary sector, encompassing agriculture, livestock, forestry, fishing, and mining, witnessed a notable recovery, registering 4.4% growth, up from 2.7% in the previous fiscal year. This improvement can be attributed to favorable monsoon conditions, higher agricultural output, and improving rural demand dynamics.

Overall, Indias macroeconomic stability, coupled with resilient domestic drivers, continues to position it as one of the strongest and fastest-growing major economies globally. By 2028, India is expected to overtake Germany, reaching USD 5.7 trillion in GDP, becoming the third-largest economy and one of the worlds most attractive consumer markets, aided by stable macroeconomic policies and improved infrastructure.

Health & Wellness Industry Outlook

The Indian health and wellness sector is poised for continued growth and innovation, expected to grow at a steady pace of 5% annually from 2024 to 2032. The integration of technology, personalized solutions, and a focus on preventative care are expected to drive further expansion. The governments support for traditional Indian healing systems and the growing interest in wellness tourism will also contribute to the sectors positive trajectory. Indias commitment to fortifying its healthcare infrastructure is demonstrated by its public expenditure on health. In the fiscal year 2032-24, Indias public spending on healthcare escalated to 2.6 % of its Gross Domestic Product (GDP), marking a significant rise from 2.1% in the previous fiscal year. Furthermore, the Union Budget for 2024-25 has allocated Rs. 98,461 crores (approximately US$ 13 billion) to the healthcare sector, reflecting a 2.6% increase from the previous fiscal year. This substantial increase underscores the governments focus on healthcare investment to expand facilities, upgrade existing infrastructure, and enhance service delivery across primary, secondary, and tertiary care.

Enabling Healthcare Growth: The Role of Government Initiatives and Policy Support

Ayushman Bharat

The Indian government launched Ayushman Bharat scheme launched by the Indian government is one of the largest government-funded healthcare programs globally, aimed to provide health insurance to over 500 million vulnerable individuals and families. This program enables beneficiaries to receive cashless treatment at empaneled hospitals for secondary and tertiary care, thereby reducing out-of-pocket healthcare costs and eliminating financial barriers to accessing medical treatment. The budget allocated for the financial year is around 7200 crores, which is expected to double to 15,000 crores by 2025. As of 2022, Ayushman Bharat has already empaneled over 24,000 hospitals and covered more than 16 million hospital admissions, providing up to INR 500,000 per family annually. Ayushman Bharat aims to enhance the healthcare system comprehensively, from primary to tertiary levels, promoting health and facilitating early disease detection.

National Health Mission (NHM)

The National Health Mission (NHM) offers technical and financial assistance to States and Union Territories (UTs) to strengthen public healthcare facilities. In response to the COVID-19 pandemic, the India COVID-19 Emergency Response and Health Systems Preparedness Package provided financial support and essential supplies, such as PPEs, N95 masks, and ventilators. The second phase of this scheme (ECRP-Phase-II) allocated 23,123 crores (approximately USD 2.78 billion) to improve national health preparedness, including establishing pediatric units, increasing ICU bed availability, and creating prefabricated hospital structures in rural and peri-urban areas.

Foreign Direct Investment (FDI)

India has extensively liberalized its foreign direct investment regime to attract more investment into the healthcare sector. Between 2000 - 2021, India has received USD 6.8 Billion in FDI in hospitals and diagnostic centers. Currently, the government has permitted 100% FDI in the hospital sector, medical devices, and the AYUSH wellness segment. In the pharmaceutical sector, 100% FDI is allowed through the automatic route and 74% through the government route. This liberalization aims to foster growth, innovation, and competitiveness in the healthcare industry, drawing significant foreign investment to enhance infrastructure and services.

Recent Strategic Developments: Enabling Aayush Wellness to Unlock Value in the Transforming Healthcare Sector

1. Launches Herbal Pan Masala:

The pan masala market in India is substantial and growing, valued at over INR 46,000 crore with 27.49 crore People Consume Tobacco based Products on daily basis. According to the Global Adult Tobacco Survey (GATS-2) conducted in 2019 found that Almost 28.9% of the Smokeless Tobacco Users expressed a desire to quit, a number expected to rise with increasing awareness and health consciousness. With these shifting dynamics, the launch of an herbal pan masala positions the company to capture a share of this transitionary demand by offering a product that replicates the taste experience of traditional pan masala while aligning with the consumer shift towards healthier alternatives.

2. Enter the Nutraceutical Market with Sleep Gummies:

In India, almost 49% of the people face difficulty falling asleep at least three times a week, according to the latest study by ResMed. This growing sleep challenge is largely attributed to factors such as rising work-related stress, irregular lifestyles, excessive screen exposure, poor dietary habits, and underlying health conditions. Together, these causes are contributing to a widespread sleep deficit, making sleep-related issues a significant public health concern. Amid these challenges, the launch of Sleep Gummies positions the Company to address a large and underpenetrated market segment. By offering a convenient nutraceutical solution aligned with rising health consciousness and preventive healthcare trends, the product creates a strong growth opportunity in the wellness and nutraceutical space, while reinforcing the Companys strategy of capturing demand in high-potential consumer health categories.

3. Launches Beauty Gummies:

Indias Beauty and Personal Care (BPC) market was valued at approximately USD 28 billion in 2024 and is projected to reach USD 34 billion by 2028, with an annual growth rate around 10-11%. The Beauty Supplements are transforming the beauty Market by shifting focus from external treatments to beauty from within solutions, fueled by consumer demand for holistic wellness and a greater understanding of the connection between nutrition and appearance. The Beauty Supplement Market is growing at CAGR of 8%, Projected to reach USD 6.98 Billion. By addressing the growing consumer demand for convenient and effective beauty-from-within solutions, the company has launch Beauty Vitamin Gummies which provide a comprehensive solution for individuals struggling to maintain their natural beauty due to poor diet and nutritional deficiencies. This strategic entry enables the company to capture incremental share in a fast-expanding segment, diversify its nutraceutical portfolio, and unlock sustained revenue growth within the broader beauty and personal care market.

4. Introduces Rs. 10/- Herbal Pan Masala Sachet:

The company has introduced a 10 herbal pan masala sachet, strategically designed to expand accessibility and accelerate market penetration. With pan masala largely being a mass-consumed product, affordability and convenience play a crucial role in driving adoption, especially among first-time users and price-sensitive consumers. The 10 pack allows the company to tap into a wider consumer base, enhance product trials, and build recurring consumption habits. This entry-level SKU also strengthens distribution reach across general trade and Kirana stores, creating a scalable growth pathway while complementing the premium packs already available in the market.

5. Aayush Herbal Masala Listed on Flipkart:

The companys Aayush Herbal Masala has been listed on Flipkart, a move that significantly strengthens its digital distribution and brand visibility. With e-commerce platforms increasingly shaping consumer purchase behavior in India, the listing enables the company to access a pan-India customer base beyond traditional retail channels. Flipkarts strong presence in Tier II and Tier III cities further enhances reach to value-conscious consumers, aligning with the companys strategy of expanding accessibility. This step not only diversifies sales channels but also creates an efficient route to capture the fast-growing Online demand.

6. Aayush Nutraceutical Product range on Amazon:

Aayush Wellness has expanded its digital presence by listing its nutraceutical product range, including

Dreamy Sleep Gummies and Beauty Vitamin Gummies on Amazon, one of Indias most trusted e-commerce platforms. This strategic move enhances product visibility, strengthens consumer accessibility, and positions the company to tap into the rapidly growing online health and wellness market. By leveraging

Amazons extensive reach and customer base, the company aims to accelerate adoption of its nutraceutical offerings and deepen market penetration across diverse geographies.

7. Aayush Wellness Limited Secures US $3 Million Export Order from Singapore

Aayush Wellness Limited has secured an export order worth US $3 million from M/s Cosmos Holdings Pte

Ltd, a leading distributor in Singapore. This milestone marks the Companys formal entry into the Singapore nutritional supplements market, which is projected to exceed USD 1.03 billion by 2033, growing at a CAGR of 6.87 percent, supported by rising health awareness and demand for premium nutraceutical products. The development not only validates the international acceptance of Aayush Wellness portfolio but also creates meaningful value by diversifying revenue streams beyond India, reducing exposure to domestic demand cycles, and improving long-term growth visibility. Entry into a developed and highly regulated market like Singapore further enhances the Companys global credibility and serves as a strategic gateway to Southeast Asia, positioning exports as a key driver of sustainable expansion.

8. Aayush Wellness Limited Diversifies into Wellness Tourism Business

The tourism sector is a significant contributor to Indias GDP, contributing approximately 5% to the Countrys GDP. Within this space, wellness tourism has emerged as a fast-growing segment, valued at USD 21.31 billion, fueled by rising lifestyle-related health concerns, greater consumer focus on preventive care, and Indias positioning as a global hub for Ayurveda and holistic healing. Against this backdrop, Aayush Wellness Limited plans to invest up to 30 crores over the next two years to establish world-class wellness centers in collaboration with government agencies, tourism boards, and private partners. The initiative not only creates a new revenue stream but also strategically positions the Company at the convergence of healthcare, hospitality, and tourism sectors with strong long-term growth potential. By integrating its expertise in wellness with Indias tourism ecosystem, the Company aims to build sustainable value while reinforcing its vision of promoting holistic health and well-being.

9. Aayush Wellness Expands its footprint in Healthcare Sector By Launching Healthcare center

The Indian healthcare sector, valued at USD 372 billion, is undergoing rapid transformation shifting from reactive treatment to preventive care, integrating digital innovations such as AI-based diagnostics and telehealth, and embracing value-based models that focus on patient outcomes. In line with these structural shifts, Aayush Wellness Limited has launched its own healthcare center aimed at delivering preventive healthcare solutions that are both affordable and accessible. This initiative positions the Company to address rising demand for early detection and holistic health management, while creating a scalable platform that bridges conventional healthcare with its nutraceutical and wellness offerings. By focusing on accessibility and affordability, the Company not only expands its footprint in a high-growth sector but also reinforces its mission of improving public health outcomes.

10. Strategic Growth Division:

During the year, the Company established a Strategic Growth Division with a dedicated corpus of Rs. 50 million. This initiative reflects the Companys commitment to fostering innovation and strengthening its position in the healthcare and wellness market. The division has been created to invest in promising startups and existing businesses that demonstrate the potential to transform the industry and enhance consumer well-being. In addition to financial support, the Company intends to provide portfolio businesses with access to its industry expertise, operational guidance, and extensive network. This holistic approach is expected to accelerate their growth trajectory and contribute to the Companys long-term strategic objectives.

Competitive Landscape

The healthcare and wellness industry in India is witnessing rapid growth, driven by rising lifestyle-related health issues, increasing health awareness, and digital adoption. The market is highly competitive, while established players dominate large-scale distribution and healthcare infrastructure, emerging companies are disrupting the space through digital platforms and affordable preventive care solutions. In this environment, Aayush Wellness stands out through its differentiated strategy of blending traditional Indian wellness practices with modern innovations, coupled with an omni-channel presence spanning offline, online, and export markets. By addressing diverse consumer segments, from premium health-conscious buyers to mass-market users with its 10 sachets and expanding into telemedicine, online diagnostics, and wellness tourism, the Company has carved a unique multi-vertical presence that positions it strongly against both domestic and international competitors.

FINANCIAL PERFORMANCE:

The Company delivered an exceptional financial performance during FY 2024 25, underscoring its strong growth trajectory and operational resilience. Revenue for the year stood at 7,338.59 lakhs, registering an extraordinary increase of 8,645% over the previous fiscal years revenue of 83.92 lakhs. This unprecedented surge reflects the growing acceptance of our offerings across key geographies.

Profitability trends were equally encouraging, with net profit climbing to 336.58 lakhs compared to 57.18 lakhs in FY 2023 24, recording an impressive 489% year-on-year growth. The improvement in earnings signals not only higher volumes but also disciplined financial management and efficient cost structures. Importantly, this surge in profitability strengthens the balance sheet, enhances cash flow visibility, and provides greater headroom for reinvestment and long-term value creation.

Earnings per Share (EPS) rose sharply to 0.692 in FY 2024 25 from 0.176 in the previous year, reflecting an impressive 293 percent year-on-year growth and highlighting stronger returns for shareholders. Together, the revenue and profit trajectory of FY 2024 25 underscores a significant strengthening of the

Companys fundamentals. The results also serve as a demonstration of its ability to scale operations while maintaining profitability, thereby building confidence among stakeholders about its capacity to deliver sustainable growth in the years ahead.

KEY RATIOS

Particulars	FY2025	FY2024
Return on Equity	40.6%	11.6%
EBIT Margin	4.6%	70.6%
Return on Capital Employed	41%	12%
Net Profit Ratio	5%	98%
EBITDA Margin	4.6%	70.8%
Price to Earnings ratio (P/E)	81.12x	6.65x

SWOT Analysis