Euro India Fresh Foods Ltd Management Discussions

Global Economy

The global economy proved resilient in 2025, growing by about 3.3% despite higher trade barriers and a prolonged spell of policy uncertainty. Consumption held up, services activity stayed firm, and steady investment in technology supported momentum across the larger economies.

Growth is expected to ease in 2026. The IMF projects global output rising by 3.1% this year, with a modest recovery to 3.2% in 2027. Inflation, which had been falling steadily, is now expected to tick up to around 4.4% in 2026 before resuming its decline, largely on account of higher energy and commodity prices following the outbreak of conflict in West Asia.

The picture varies by region. Advanced economies have been relatively insulated and continue to grow at a modest pace, while emerging market and developing economies, projected to expand by about 3.9% in 2026, bear more of the strain, particularly commodity importers with limited fiscal room. Growth in China is placed at around 4.4%, and India remains among the fastest-growing large economies.

Risks are weighted to the downside. Renewed trade tensions, a wider or longer geopolitical conflict, or a reassessment of the returns from artificial-intelligence investment could each weaken activity, while easing tensions and faster productivity gains would improve the outlook.

Source: International Monetary Fund, World Economic Outlook, January 2026 Update and April 2026.

Indian Economy

Indias economy grew by 7.7% in FY26 according to official estimates, accelerating from 7.1% in the previous financial year and reaffirming its position as the fastest-growing major economy for a fourth consecutive year. Growth was driven by resilient consumption and a pick-up in investment activity, with the Reserve Bank of Indias own assessment placing FY26 growth at 7.6%. A notable driver during the year was the rationalisation of Goods and Services Tax rates carried out in September 2025, which moved a wide range of daily-use and packaged food items, including namkeen and other savoury snacks, into a lower 5% slab. This reform lifted household purchasing power and produced a marked consumption boost in the December quarter, although the effect had begun to moderate by the final quarter of the year as growth eased on a sequential basis.

The year was not without external strain. Elevated tariffs imposed by the United States created headwinds for exporters and tempered business confidence for part of the year, prompting the government to accelerate compliance simplification and deregulation measures alongside the GST rationalisation. Merchandise exports nonetheless expanded, aided by resilient services exports and steady remittance inflows, keeping the current account deficit at a moderate level and leaving foreign exchange reserves at a comfortable cushion against external obligations.

Looking ahead, growth is expected to moderate to a range of 6.6% to 6.9% in FY27 as the tailwind from the GST reform fades and as renewed volatility in global energy markets, following the outbreak of conflict in the Middle East, feeds through into domestic inflation. The Reserve Bank of India has projected consumer price inflation at 4.6% for FY27. Even so, medium-term potential growth is estimated at close to 7%, supported by continuing reform momentum, a young workforce and steady domestic demand.

[Source: Reserve Bank of India Monetary Policy Statement, April 2026; Economic Survey 2025-26, Ministry of Finance (PIB); Business Standard reporting on FY26 GDP data and GST Council decisions. ]

Indian Packaged Snacks Industry

Packaged snacks are one of the most active parts of Indias food and beverage market, sitting where traditional eating habits meet branded, convenient formats. The category spans traditional savouries such as namkeen, bhujia and fryums, western-style products including potato chips and extruded snacks, and a widening range of better-for-you options.

According to IMARC Group, the India snacks market was valued at about D50,590 crore in 2025 and is projected to reach roughly D1,03,556 crore by 2034, a compound annual growth rate of around 8.3% between 2026 and 2034. Chips account for close to two-fifths of the market by value, while namkeen remains the largest culturally rooted segment and continues to grow at a double-digit pace.

A large share of the market is still served by unbranded, regional producers, which leaves room for organised players to gain ground as buyers place greater weight on hygiene, consistent quality and food safety. Per-capita consumption also remains well below developed-market levels, pointing to a long runway for volume growth. Health-focused and premium sub-segments are expanding faster than the category as a whole and are drawing fresh investment.

Key Demand Drivers

HEALTH-LED AND PROTEIN-RICH SNACKING

Consumers are reading labels more closely and choosing snacks that carry a nutritional benefit. Demand has grown for baked rather than fried products, for multigrain and roasted options, and for items with high-protein or low-fat claims, alongside traditional favourites. Government promotion of millets as Shree Anna has encouraged a wave of millet-based launches, and a large share of urban buyers now actively look for healthier ingredients. This widens the category rather than displacing indulgent snacking, giving manufacturers room to extend portfolios into better-for-you formats while retaining core lines.

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QUICK COMMERCE AND DIGITAL RETAIL

The way snacks reach consumers has changed quickly. Quick-commerce platforms and online grocery services now place packaged snacks within minutes of an order, turning impulse purchases into a regular channel and complementing traditional retail. Digital retail also lowers the barrier for regional and newer brands to reach buyers beyond their home markets and gives manufacturers direct visibility of demand patterns. For companies with reliable supply and wide product ranges, these channels open incremental demand across both metropolitan and smaller urban markets.

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TAX RATIONALISATION AND AFFORDABILITY

The rationalisation of Goods and Services Tax rates from September 2025 reduced the tax applied to many packaged food items and lowered shelf prices for consumers. Because much of the category sits at accessible price points, even modest price relief supports volume, particularly in price-sensitive semi-urban and rural markets. Combined with low food inflation through FY26, this improved affordability has widened the base of consumers able to buy branded packaged snacks regularly.

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PREMIUMISATION AND FORMAT INNOVATION

TAt the same time, rising incomes are supporting premiumisation. Consumers are willing to pay for distinctive flavours, better ingredients and new formats, while portion-controlled packs and larger family or mega packs address different consumption occasions. Frequent launches and flavour experimentation, especially among younger buyers, keep the category dynamic and reward manufacturers with active research and development pipelines, allowing premium and value tiers to sit within the same portfolio.

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FORMALISATION AND THE SHIFT TO BRANDED SNACKS

A structural move from unbranded, locally made snacks towards organised, packaged brands continues to reshape the market. Buyers associate branded products with consistent taste, hygiene and food safety, and stricter regulatory standards reinforce this preference. Wider cold-chain and distribution infrastructure, supported by government food-processing schemes, is extending branded availability into locations previously served mainly by local producers, steadily enlarging the addressable market for established manufacturers.

Company Overview

Euro India Fresh Foods Limited is a packaged food manufacturer based in Surat, Gujarat, operating in Indias fast-moving consumer goods sector. The Company makes a diversified range of products that includes potato chips, namkeen, extruded snacks, fryums, fruit beverages and packaged drinking water, offered in several flavours and pack formats from pouches to tetra packs to family and mega packs.

Manufacture takes place at a technologically equipped, ISO 22000 certified facility, with automated lines, nitrogen-flushed packaging that protects freshness, and in-house quality laboratories. Every product is vegetarian and approved by the Food Safety and Standards Authority of India, and formulations exclude added MSG, artificial colours, trans fats, cholesterol and genetically modified ingredients. Quality checks run from raw-material intake through to dispatch, in line with Good Manufacturing and Good Hygienic Practices.

The Euro brand is well established in core markets such as Gujarat and Maharashtra and is extending nationally through a network of super-stockists, distributors and retail outlets, supported by offices in Mumbai and Surat. During FY26, the Company approved the consolidation of its manufacture at the new Euro Food Park in Chikhli, Navsari, moving operations from its earlier Ichhapore plant in Surat to improve operational efficiency and expand production capacity. Continuous product development, disciplined quality control and responsible manufacture remain central to how the Company competes.

Performance

Review

In FY26, Euro India Fresh Foods Limited reported revenue from operations of D152.04 crore, from D143.74 crore in FY25. EBITDA stood at D15.88 crore, against D13.67 crore in FY25, and profit after tax at D4.97 crore, against D5.60 crore in FY25.

Opportunities and Threats

Indias food processing and packaged snacks sector continues to offer meaningful headroom for growth, aided by relatively low per-capita consumption compared with other large markets, continuing urbanisation, and government support through schemes such as the Production Linked Incentive Scheme for Food Processing Industries. The GST rationalisation implemented in September 2025 has improved affordability for mass-market snack categories and is expected to widen the base of the organised sector at the expense of unbranded competitors. Quick commerce and modern trade are opening additional routes to market, complementing the traditional kirana network that still accounts for the bulk of category sales, particularly in semiurban and rural India. Rising interest in healthier, reformulated snacking options and continued momentum in exports of Indian ethnic foods provide further avenues for differentiation and growth.

At the same time, the sector faces a more difficult cost environment than a year ago. The outbreak of conflict in the Middle East during the year drove up prices of cooking oil, packaging material and energy, all significant inputs for fried and extruded snacks, and introduced fresh volatility into supply chains reliant on maritime trade routes. Competitive intensity remains high, with established players continuing to invest heavily in brand-building and distribution expansion, which raises the cost of customer acquisition for smaller manufacturers. These dynamics reinforce the importance of disciplined procurement, operating efficiency and continued product differentiation

Risk and Mitigation

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VOLATILITY IN INPUT COSTS

Prices of cooking oil, packaging material and energy have moved sharply amid global supply disruptions, including those linked to the conflict in the Middle East. The Company mitigates this exposure through advance procurement arrangements, inventory buffers and ongoing cost-efficiency initiatives across its manufacturing operations.

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REGULATORY AND POLICY CHANGES

Tax and labelling requirements for packaged food continue to evolve, as seen most recently in the September 2025 GST rationalisation.

The Company maintains continuous monitoring of regulatory developments, supported by its compliance and technical teams, to ensure timely adaptation of packaging, labelling and pricing.

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SHIFTING CONSUMER PREFERENCES

Consumer tastes are moving quickly towards healthier and more diverse snacking formats. The Company addresses this through sustained investment in research and development, regular new product introductions, and periodic refreshes of its existing range.

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QUALITY AND FOOD SAFETY RISK

Any lapse in food safety standards could affect consumer trust and brand reputation. The Company applies multi-stage quality control, periodic process audits and ongoing training across its manufacturing sites to maintain consistent product standards.

Internal Control Systems

The Company maintains an internal control system suited to the scale and nature of its operations. The controls are designed to give reasonable assurance that assets are safeguarded against unauthorised use or disposal and that transactions are properly authorised, recorded and reported. Business is conducted in line with the Companys policies and procedures, and the Audit Committee, together with management, reviews the adequacy and effectiveness of these controls and acts to improve them where needed.

Human Resources

The Company treats its people as central to its progress and links its success to the growth and wellbeing of its employees. It continues to invest in training and skill development and in strengthening its standing as an employer, so as to attract and retain capable people. During the year, employee relations remained constructive across all levels. As at 31 March 2026, the Company had 276 employees across production, quality control, field operations and corporate functions.

Cautionary

Statement

Statements in this Management Discussion and Analysis that describe the Companys objectives, projections, estimates and expectations may be forward-looking within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied, on account of factors such as economic conditions affecting demand and supply, price movements in domestic and international markets, changes in government regulation and tax law, and other incidental factors.

Key Financial Ratios

Particulars	Formula	31-Mar-26			31-Mar-25
		Numerator	Denominator	Ratio	Numerator	Denominator	Ratio	% Variance	Reason for Variance
Current Ratio	Current Asset/ Current Liabilities	10,480	5,585	1.88	9,451	4,551	2.08	-10%	Not Applicable
Debt-Equity Ratio	Total Debt/ Shareholders Equity	5,923	7,706	0.77	4,197	7,241	0.58	33%	Increase in borrowings from the bank has resulted in an increase in the ratio
Debt-Service Coverage Ratio	Earnings available for Debt Service / Debt Service	1,568	984	1.59	1,362	524	2.60	-39%	The drop in interest coverage ratio stems from increased finance costs, driven by higher interest expenses
Return on Equity Ratio	Net Profits after taxes/ Average Shareholders Equity	497	7,706	0.06	561	7,241	0.08	-17%	Not Applicable
Inventory Turnover Ratio	Sales/ Average Inventory	15,204	7,539	2.02	14,374	6,836	2.27	-11%	Not Applicable
Trade Receivable Ratio	Net Credit Sales / Average Accounts Receivable	15,204	2,063	7.37	14,376	1,979	7.26	1%	Not Applicable
Trade Payable Ratio	Net Credit Purchases / Average Trade Payable	11,047	890	12.41	9,768	893	10.94	13%	Not Applicable
Net Capital Turnover Ratio	Net Sales/ Working Capital	15,204	4,895	3.11	14,374	4,900	2.93	6%	Not Applicable
Net Profit Ratio %	Net Profit/ Net Sales	497	15,204	0.03	560	14,376	0.04	-16%	Not Applicable
Return on Capital Employed %	Earning before interest and taxes(EBIT)/ Capital Employed	1,207	9,952	0.12	1,091	8,340	0.13	-7%	Not Applicable
Return on Investment	Income generated from invested funds/ Average invested funds in treasury investments								Not Applicable