Dangee Dums Ltd Management Discussions

[Pursuant to Regulation 34 read with Part B Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

ECONOMIC OVERVIEW:

A) Global Economy Overview:

In 2024, the global economy continued to navigate a complex and evolving macroeconomic environment, achieving an estimated growth rate of 2.9%, reflecting modest improvement from 2.5% in 2023.

According to the International Monetary Fund (IMF), advanced economies are projected to grow at 1.7% in 2024, up from 1.5% in the previous year, driven by resilient consumer demand and gradual easing of inflation. In contrast, emerging markets and developing economies are expected to expand at a rate of 4.2%, supported by domestic consumption, public investment, and stronger external demand.

The global bakery products market size was valued at USD 480.23 billion in 2024. The market is projected to grow from USD 504.78 billion in 2025 to USD 731.69 billion by 2032, growing at a CAGR of 5.45% during the forecast period. Growth is driven by increased consumer preference for convenience foods, rising health consciousness and innovation in baked goods. Europe maintained its leading position with a market share of 32.83%, while the United States is projected to reach USD 148.98 billion by 2032, fueled by sustained consumption of bread, cakes, and pastries.

India, one of the fastest-growing major economies, is expected to grow at 6.8% in 2024, supporting increased demand for packaged and ready-to-eat food products. China, while facing structural challenges in its property sector and trade environment, is still forecasted to grow at 4.6%, contributing significantly to FMCG sector growth through its vast urban consumer base.

Globally, inflation is expected to ease—falling from 6.8% in 2023 to 5.9% in 2024, and further to 4.5% in 2025. In advanced economies, inflation is projected to drop to 2.6%, aided by tight monetary policy. This disinflationary trend helps stabilize raw material and logistics costs, which is critical for margin management in the FMCG and bakery industries.

B) Indian Economy Overview:

India has maintained its position as the fastest-growing major economy in the world and is steadily moving towards becoming the third-largest economy globally. This growth trajectory is backed by a robust democratic foundation, strategic policy reforms and increasing global investor confidence. As India aims to clinch the third spot in terms of GDP, the consumer market is projected to become the third-largest in the world by 2027. Within this transformative environment, the Fast-Moving Consumer Goods (FMCG) sector continues to play a pivotal role in shaping consumption patterns and driving domestic demand.

The Indian bakery market size reached USD 13.8 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 31.5 Billion by 2033, exhibiting a growth rate (CAGR) of 9.12% during 2025-2033. This growth is driven by changing consumer preferences, rising disposable incomes and an increasing inclination toward ready-to-eat and convenient food options. Factors such as the growing influence of Western food habits, expanding retail and e-commerce infrastructure, and the rising popularity of cakes and bakery products on special occasions are contributing significantly to market expansion.The growing population is resulting in the increasing demand for bakery food products inlndia. This represents one of the key factors positively influencing the market.The market is also witnessing a shift towards health-conscious consumption, prompting manufacturers to introduce whole grain, sugar-free, and high-protein variants. Increased investments in research and development (R&D) are helping companies align product innovation with evolving consumer expectations.

Indias bakery exports are also on an upward trajectory, growing from USD 346.7 million in FY2019 to USD 557.6 million in FY2024, registering a CAGR of approximately 10%. This highlights the sectors increasing contribution to international markets and underscores its potential for global competitiveness.

Urban India currently accounts for approximately two-thirds of overall bakery consumption. However, rural markets are emerging as new frontiers of growth, backed by rising disposable incomes, better retail penetration, and accelerated digital adoption. Government initiatives to support the food processing sector, along with favorable policy reforms, are enhancing rural connectivity and facilitating broader market access.

Digital transformation is playing a critical role in shaping the future of the bakery industry. The rapid adoption of e-commerce and quick commerce platforms is reshaping consumer engagement and driving convenience-led consumption. These platforms have become essential distribution channels, especially in urban and semi-urban areas.

INDUSTRY STRUCTURE AND DEVELOPMENTS :

The cake manufacturing industry is undergoing robust growth, propelled by shifting consumer preferences, rising disposable incomes, and rapid urbanization. As lifestyles become increasingly fast-paced, demand for convenient, high-quality bakery products—especially cakes—has surged significantly. The industry features a dynamic blend of large multinational corporations and niche artisan bakeries, resulting in a competitive and diversified market environment.

Innovation remains a cornerstone of this growth, with companies introducing health-conscious alternatives, exotic flavors, and premium offerings to cater to evolving consumer tastes. Technological advancements in manufacturing and automation have further enhanced operational efficiency, product consistency, and scalability. Additionally, the expansion of robust distribution networks—both traditional and digital—has improved market penetration and customer access.

The COVID-19 pandemic has accelerated digital transformation, leading to a notable increase in online sales and home delivery services. This shift in consumer buying behavior has encouraged companies to strengthen their e-commerce presence and digital engagement strategies. At the same time, the regulatory landscape is becoming more stringent, particularly around food safety, labeling, and quality control. Compliance with these evolving norms is essential for sustained growth and consumer trust.

During the past financial year, our company strategically positioned itself to leverage emerging opportunities within the sector. We focused on innovation, quality enhancement, and customer-centricity as core pillars of our operational and growth strategy. Key initiatives included: Investment in advanced manufacturing facilities to boost production capacity while ensuring the highest standards of hygiene and safety; Diversification of our product portfolio with the launch of new flavors and formats, tailored to a wide range of consumer preferences; Strengthening of customer engagement through targeted marketing campaigns and digital touch points.

OPPORTUNITIES AND THREATS:

The bakery, confectionery, and ice cream products industry continues to evolve in 2025, driven by changing consumer preferences, health consciousness, and sustainability trends. Theres rising demand for healthier indulgences like low-calorie, gluten-free, vegan, and protein-rich products, opening new innovation avenues. Eco-friendly packaging and ethical sourcing are becoming essential for brand loyalty. Technological advancements, especially Al-driven personalization, and growing interest in premium, artisan and experiential products are further fueling growth. Strategic tie-ups with food-tech startups and the rise of food tourism also present exciting opportunities.

At the same time, the industry faces several challenges. Climate change is affecting raw material availability and prices, while alternative ingredient innovations are disrupting traditional product lines. Increasing cyber security threats, stricter regulatory norms on sugar and additives, and growing preference for local or homemade products add pressure. Additionally, intense competition and market saturation in urban areas demand continuous innovation and differentiation.

This analysis aims to highlight the key opportunities and threats faced by companies such as :

A) Opportunities:

- Strong brand name and image

- Growing consumer demand for baked and confectionery products

- Innovation and Product Development

- Urbanization and Changing Lifestyles

- Expansion of e-commerce and digital platforms

- Rising demand for health-conscious indulgent products

- Al and data-driven personalized offerings

8) Threats:

- Cybersecurity threats in e-commerce and supply chain systems

- Climate change causing raw material volatility and price surges a Market saturation

a Stricter government regulations a Supply Chain Disruptions

a Consumer preference shift towards local/home-based alternatives a Economic Fluctuations

Our Company has become a household name in Gujarat when it comes to Cakes and other Bakery products. The brand has found its niche in democratizing consumption of high quality cakes and pastries. We have a single segment i.e. Manufacturing and Trading of Bakery & Confectionery Products. The Comparative performance of the Company has been detailed in the financial Statements for Financial Year 2024-25.

OUTLOOK:

Global and Domestic Outlook:

The global bakery products market continued its upward trajectory in FY 2024-25, driven by evolving consumer preferences, increased health awareness, and rising demand for convenience food. Valued at over USD 500 billion, the global bakery sector is expected to grow at a CAGR of 4-6% over the next five years. The industry is witnessing a marked shift towards healthier offerings, such as gluten-free, multigrain, and organic bakery items, with strong traction across North America, Europe and parts of Asia-Pacific.

On the domestic front, the Indian bakery industry continues to be one of the fastest-growing segments within the food processing sector. With an estimated market size exceeding INR 60,000 crore, the industry is projected to grow at a CAGR of 8-10%, outpacing global trends due to Indias large young population and growing middle class. Demand for premium, artisan and value-added bakery products such as cakes, cookies and health-based alternatives is increasing, especially in Tier I and Tier II cities.

Going forward, the industry is expected to witness continued product innovation, rising investment in automated production, and strategic collaborations to meet the evolving tastes of consumers. Rising raw material costs, compliance with food safety regulations, and supply chain disruptions pose potential risks; however, the long-term outlook remains robust, both globally and domestically.

RISKS AND CONCERNS:

In 2025, the risk landscape for the bakery and food processing sector is evolving rapidly, shaped by shifting consumer preferences, regulatory reforms, technological advancements, climate-related challenges, and global economic volatility. As the industry grows to meet rising demand for health-focused and convenience-driven products, companies like ours must remain agile and proactive. Recognizing this dynamic environment, our Company places strong emphasis on identifying, assessing, and mitigating a wide spectrum of strategic, operational, financial, and compliance-related risks to ensure sustained performance and long-term value creation.

- Stringent Regulatory Compliance

- Raw Material Price Volatility & Supply Chain Disruptions

- Supply Chain Disruptions

- Food Safety and Product Quality Risks » Changing Consumer Preferences

- Technological Disruption & Automation Gap

- Climate Change and Environmental Impact

- Cybersecurity and Data Protection Risks

- Manpower Retention and Skill Gaps

- Economic and Demand Uncertainty

By fostering a culture of informed and monitored risk-taking, we aim to convert potential risks into opportunities, maintaining our competitive edge while safeguarding stakeholder value.

Your Company places high importance on maintaining strong and effective internal control systems to ensure operational excellence, financial integrity, and statutory compliance. These controls are critical in safeguarding assets, ensuring the reliability of financial reporting and promoting efficient and effective business operations.

The Board of Directors has put in place a robust framework of internal financial controls, which is regularly reviewed and strengthened. These controls are designed to facilitate the orderly conduct of business, ensure accuracy in accounting records and achieve compliance with applicable laws and regulations. The Audit Committee supports the Board in overseeing the effectiveness of the internal control systems, reviewing reports, and suggesting improvements wherever necessary.

The Company leverages a comprehensive ERP system that integrates data across locations for accounting, consolidation, and management information purposes. This facilitates seamless data flow and enhances operational coordination across functions. A well-defined Risk Management Framework is in place to proactively identify, assess, and mitigate key risks. Periodic risk assessments are conducted to monitor emerging threats, and corrective actions are promptly implemented. Standard Operating Procedures (SOPs) are established for all critical processes, supported by regular employee training to ensure adherence and accountability. The Companys IT infrastructure includes advanced systems and security protocols to ensure data integrity and minimize cybersecurity threats. These are further strengthened through regular internal and external audits.

A dedicated compliance team continuously monitors regulatory changes and ensures that the Company remains compliant with domestic regulations. Training sessions and compliance updates are conducted at regular intervals to keep all stakeholders informed and aligned.

Management periodically reviews the internal control systems to ensure their alignment with strategic objectives. Real-time monitoring systems are employed to detect any operational deviations, enabling swift corrective action. To further strengthen our governance mechanisms, the Company has implemented a Whistle-Blower Policy that encourages employees to report any unethical practices or concerns anonymously and without fear of retaliation. The Companys comprehensive and dynamic internal control environment ensures the delivery of high-quality bakery and confectionery products while upholding stakeholder interests and supporting sustainable growth.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

- The Companys Total Revenue was Rs. 2743.54 Lakhs in 2024 -25 as compared to Rs. 2630.38 Lakhs in the previous year.

- The Companys Total Expenditure was Rs. 2828.10 Lakhs in 2024-25 as compared to Rs.2755.56 Lakhs in the previous year.

- Profit/(Loss) before Tax was Rs. (84.56) Lakhs as compared to Rs. (125.18) Lakhs in the previous year.

- The Net Profit/(Loss) after tax for the year was Rs. (52.17) Lakhs as compared to Rs. (88.04) Lakhs in the previous year.

* Total comprehensive income was Rs. 2.57 Lakhs as against Rs. 3.00 Lakhs in the previous year.

- The Cash and Cash equivalent as at 31 st March, 2025 was Rs.17.53 Lakhs as against Rs. 37.54 Lakhs in the previous year.

* The detailed Financial and Operational Performance present in notes to accounts for the financial year 2024 25 which forms a part of this Annual Report.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS :

The Company believes that its intrinsic strength is its people and human capital is the greatest asset. The Company has always paid special attention to recruitment and development of all categories of staff. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operation. We focus on attracting and retaining the best possible talent.Our business model includes senior executives, professionals, and both experienced and semi-qualified staff. We also have skilled, semi-skilled, and unskilled workers. Combined with our strong management team, this has allowed us to successfully implement our growth plans.

In the past year, our Human Resources and Industrial Relations departments have made significant progress. We have successfully implemented new policies that improve employee engagement, such as offering more flexible working hours. Our training programs have been expanded to cover emerging skills, ensuring our workforce remains competitive and future-ready. We have also strengthened our diversity and inclusion initiatives, resulting in a more inclusive workplace environment.

On the industrial relations front, we have fostered stronger relationships with our labor unions through regular communication and collaboration. This has led to a smoother negotiation process and more mutually beneficial agreements.

The key financial ratios of the Company where there has been significant change (25% or more) and change in Return on Net Worth are summarized below along with detailed explanation:

Particulars	Unit	F.Y. 2024*25	F.Y. 2023-24	% of Change	Detailed Explanation, if there is any significant change i.e. 25% or more.
Debtor Turnover Ratio	Times	3.13	2.56	(17.59%)	-
Inventory Turnover Ratio	Times	14.31	13,68	(4.55%)	-
Interest Coverage Ratio	Times	0.52	0.51	1.96	-
Current Ratio	Times	0.43	0.26	67.06%	The ratio has improved due to effective working capital management.
Debt Equity Ratio	Times	0.14	0.51	71.94%	The ratio has improved due to [repayment of [debts.
Operating Profit Margin	%	3.48	5.27	(33.96)	-
Net Profit Margin	%	(1.94)	(3.53)	44.96%	The ratio has improved due to reduction in losses.
Return on Networth	%	(0.05)	(0.07)	(30.32%)	- [The ratio has increased due to decrease in profitability.

By the order of the Board,

Date: August 26, 2025
Place: Ahmedabad	For, Dangee Dums Limited
	Nikul Jagdishchandra Patel
	Chairman & Managing Director
	(DIN: 01339858)