Amrit Corp Ltd Management Discussions

1. ECONOMIC & BUSINESS ENVIRONMENT

The global economy in 2025 continued to demonstrate underlying resilience supported by steady consumption, sustained investments in technology and relatively stable financial systems. At the same time, elevated tariff regimes and ongoing trade fragmentation acted as a structural drag on global trade efficiency and investment sentiment. However, as the world moves into 2026, this growth trajectory is being tested by heightened geopolitical tensions and disruptions in energy markets, introducing new uncertainties into the macroeconomic environment.

India continues to be one of the worlds fastest growing large economy in 2025-26 supported by resilient domestic sustained government-led infrastructure investment, ongoing structural reforms and robust manufacturing sector, with real GDP growth expected to expand by 7.6% in FY 2025-26, surpassing previous projections. Several constructive developments through the year have strengthened the foundation for Indias medium to long term economic growth. Policy initiatives such as direct tax relief and GST rationalization are expected to support consumption, improve formalization and enhance the efficiency of the economy over time while accommodative monetary conditions have ensured effective liquidity transmission across the financial systems. Rural demand showed gradual improvement, supported by better agricultural output and continued government programmes while urban consumption remained steady on the back of rising disposable incomes and stable employment across services and manufacturing.

While long-term economic outlook for India remains constructive, the near-term trajectory is increasingly influenced by the geo-political developments and disruptions in energy markets leading to macro-economic uncertainty. The West Asia conflict has triggered a significant downgrade in Indias economic outlook for FY 26-27 with growth projected to slow-down to 6.4-6.6% and inflation expected to more than double to 5.10%. As of now, the policy makers are navigating a more complex environment, balancing inflation control with growth support which may result in tighter financial conditions and evolving liquidity dynamics. The duration of energy supply disruptions will remain a critical determinant of the outlook - while a short-lived shock could enable gradual stabilization, a prolonged disruption may amplify cost pressures and downside risk to growth.

2. DAIRY BUSINESS

(a) Industry structure and development

The Indian food processing sector has witnessed remarkable growth during the last decade with average annual growth rate of around 6.60%. The sector is one of the largest employment providers in the organized manufacturing sector.

India is worlds largest producer of milk contributing roughly 24-25% of global output. The milk production surged to 240 million tonnes in last financial year reflecting decades-long growth rate of 5.7%. Forecasts suggest that the milk output could hit 300 million tonnes by 2030. The dairy processing sector in India is experiencing a favourable outlook, driven by rising disposable incomes, changing consumption patterns and increasing demand for value-added dairy products such as ice creams, cheeses, flavoured milk, cold coffee, protein rich dairy products etc. Key regulations and government schemes play crucial role in enhancing milk production, productivity and processing infrastructure in the dairy sector. These factors collectively contribute to the robust growth and development of the dairy processing sector in India.

Over the years, the Indian dairy sector has proven to be a tool for rural development with its unique small holder-based dairying system leveraging cooperative strategies. Today, with the efforts of various stakeholders, supported by farmer-centric schemes of Government, India continues to be the largest

milk producer and consumer of milk. Backed by scientifically planned initiatives in the realm of productivity enhancement, animal nutrition and animal health, Indian dairy sector today is on the verge of another revolution that would further increase the milk production in the country. These technological advancements provide ample opportunities for India to play a major role in global dairy sector across the dairy value chain.

The dairy processing eco-system in India has evolved considerably over the years with well-developed backward and forward linkages along the value chain. A major share of dairy products consumed in India is in the form of fresh milk, accounting for majority of the total dairy market. With sufficient supply of milk domestically, there is immense potential for processed dairy products in India. This is bolstered by a strong demand within the country as well as the global market for processed dairy products. Products such as ghee, butter, cheese, paneer, skimmed milk powder, flavoured milk, fermented products, fortified dairy alternatives, etc. are witnessing substantial growth.

(b) Opportunities and threats

Dairy products are the chief source of protein for millions of lacto-vegetarian in the country. An even larger part of the population, who cannot afford meat, rely heavily on dairy for their dietary protein demand. India offers a variety of dairy-based cuisines that are unique to its diverse culture. The Indian dairy market continues to be a vital economic sector that provides livelihood to millions of people and contributes substantially to the countrys GDP. The market is poised for considerable growth due to growing middle class, which has more disposable income.

While milk has been staple for a majority of population from toddlers to senior citizens, the health benefits of milk are now being widely recognized including its contribution to digestive wellness and the advantage of dairy proteins. With consumers reconsidering their dietary choices, there has been reduction in consumption of carbohydrates and sugar leading to an increase in protein-based diets. Dairy has become an attractive source of natural proteins and, as such, many dairy products are being positioned as functional foods and beverages.

The Government of India is extensively working towards maintaining the standards of the industry by introducing different schemes/initiatives across the Indian market. The schemes include National Action Plan for Dairy Development (NAPD), National Programme for Dairy Development (NPDD), Interest Subvention on Working Capital Loans for Dairy Sector, Nationwide Artificial Insemination Programme (NAIP), Rashtriya Gokul Mission and the National Animal Disease Control Programme. These schemes are focussed on strengthening the infrastructure for milk quality testing and primary chilling facilities and increasing milk production by giving birth to genetically superior male or female bovine breeds. These supportive government schemes have helped in contributing to the stellar growth of the dairy market.

The above factors have thrown ample opportunities for the entrepreneurs of the dairy industry to scale-up their existing capacities to increase their business volumes and offer opportunities to the new entrants in the dairy business. The above positive factors have expanded employment opportunities both in rural and urban areas and the economic activity thrives in all the geographical areas and contribute to the overall economic development of the country and the well-being of the people and the cattle population.

The dairy industry in India, however, faces challenges on account of limited access to quality feed and fodder, traditional feeding practices and inadequate veterinary care contribute to low market yield per animal. Lack of effective breeding programme and poor herd management further exacerbate this issue. Seasonal variations in rainfall and rising temperatures also significantly reduce milk production. Poor hygiene standards during milking and milk handling lead to high microbial counts and spoilage. Outbreaks of diseases like Lumpy Skin Disease can also cause significant losses in the dairy sector and

impact cattle population. Another major challenge faced by the Indian dairy industry is inadequate cold storage/supply chain and logistics facilities.

Further, fluctuating market prices and lack of minimum support price (MSP) can make dairy farming less viable, particularly for small farmers. The entry of global dairy giants with aggressive pricing strategies and access to economies of scale can pose a threat to local dairy producers.

Plant-based hybrids /powders are disrupting the sector, offering sustainable alternatives for ecoconscious and lactose-intolerant population.

(c) Dairy Business Review

The production of dairy milk & milk products during the year was higher by 5.10% at 13,590 KL as against 12,931 KL in the previous year. For the year under review, the revenue from Dairy operations increased by 9.48% to Rs. 13,898.98 lakhs as against Rs. 12,695.08 lakh in the previous year.

The sales volumes of value-added products under Cool M and Just brands i.e. flavored milk, dairy mixes, dairy-based drinks, cold coffee and food preparations have grown by 34.96% on YoY basis. The private label products business has grown at a faster pace at 47.30%. However, B2B business (Soft Serve Milk and Cold Coffee), which constitutes about 52% of our total volumes, has witnessed a drop of 5.50%. The sales volume of the commoditized products, e.g. liquid milk and low fat cream, have risen marginally by 3.48% during the year.

During the year, three new variants of cold coffee under Just Brand, namely, Bold, Mocha and Zero Sugar have been launched in the market which have received a good consumer response;

To address specific challenges associated with pouch packaging, a new Tetra Pak Aseptic Filling Machine has been installed during the year, which is getting stabilized. This machine will be immensely useful in offering long shelf-life value added products without cold chain (Ice-Cream and Cold Coffee in particular) in line with market requirements;

The marketing and sales plans are being re-oriented to have increased focus towards supplychain efficient product offerings in both B2B and B2C markets and expansion of customer base to have minimal dependence on one or more large customers. New marketing team is continuously looking at acquisition of key potential clients and have already on-boarded two major customers and few others are in the pipeline;

Average raw milk prices during the year were higher at Rs.58/- per kg. as against the average milk prices of Rs.54/- per kg in the previous year. However, SMP prices have risen sharply by about 18% due to higher demand from food processing sector. The other manufacturing costs i.e packaging, stores &spares, fuel and wages were higher in comparison to previous year. This is partly due to changes in product-mix as retort products have higher manufacturing costs.

(d) Risks and concerns

The demand for milk and milk products in India is increasing rapidly because of urbanization, convenience demanded by consumers and shifting of consumers from loose to packaged dairy products. The growth in bovine population has contributed towards significant increase in milk production in the country. The livestock sector, however, is exposed to several constraints. The pre-dominant are low productivity, chronic shortages of feed and fodder, large population of unproductive cattle, low cattle health care, immunization & hygiene programs.

(e) Outlook

The dairy industry has significant potential for further growth and development, particularly in value added products like cheese, paneer, yogurt, flavored milk, desserts and probiotic drinks. These products offer greater margins and cater to the evolving consumer preferences for health, convenience and variety. The demand for these products is driven by increasing health awareness, rising middle class and changing dietary habits. Diary companies are investing in new product development and marketing strategies to capture this growing segment, diversifying beyond traditional milk products. Technological innovations are playing a crucial role in transforming the dairy industry. This includes advancements in dairy farm management, milk processing, packaging and supply chain logistics.

The long-term outlook of Indian dairy sector is favorable on account of increasing population, increase in per capita consumption, increasing health awareness, brand awareness, urbanization and increase in nuclear families. Given the attractive sector dynamics, our constant endeavor is to expand our product portfolio that resonate with the expectations of our customers i.e. QSRs, hotels, restaurants and the general public at large. The Company is continuously carrying out R&D and making necessary investments in technology improvements, development of functional and high protein dairy products and packaging facilities of different kinds to strengthen its retail portfolio by introducing innovative milk beverages in the retail market. The Company has also introduced cold coffee & dairy mixes in tetra packs for the B to B segment under the Cool M brand and coffee drinks in aluminium cans under the Just brand in the B to C segment, which have received good consumer response. More variants of cold coffee in aluminium cans are planned to be introduced as coffee beverages and drinks are experiencing significant growth in India in recent years. The B2B and private label businesses are also growing with on-boarding of large FMCG companies.

3. COMPANYS FINANCIAL PERFORMANCE & ANALYSIS

During the year under review, the Company recorded gross revenue of Rs. 16,494.49 lakhs as against Rs. 14,601.53 lakhs in the previous year. Operating profit (EBITDA) of Rs. 2,140.82 lakhs has been recorded in the financial year 2025-26 as against operating profit of Rs. 1,674.06 lakhs in the previous year.

4. HUMAN RESOURCES

The Company lays great emphasis on proper management of human resources and believes that this is the most important ingredient for achieving excellence in performance and sustainable growth. The management constantly reviews the skill mix and takes appropriate steps to achieve desired skill mix. For upgrading the skill, special emphasis is laid on training. Selective and intensive training is being imparted to employees at various levels.

5. CAUTIONARY STATEMENT

Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices, changes in government regulations, tax laws, economic development regulations within the country, lockdown conditions arising out of pandemic or otherwise and other factors such as litigation and industrial relations.

For and on behalf of the Board

Noida June 11, 2026

N.K. BAJAJ Chairman & Managing Director