GLOBAL ECONOMY
The global economy is expected to maintain moderate
growth over the coming years, supported by strong
domestic demand, continuous technological investments,
and favourable financial conditions. The IMFs World
Economic Outlook (April 2026) projects global GDP
growth at 3.1% in CY 2026, following an estimated 3.4%
expansion in CY 2025, before a slight improvement to
3.2% in CY 2027. Although the outlook reflects underlying
strength, evolving geopolitical developments continue
to affect growth prospects. These include trade-related
uncertainties between the United States and China,
alongside persistent tensions in the Middle East. Even so,
supportive policy measures and continued investment are
expected to sustain global economic momentum over the
medium term.
I Growth of Global Economy Projected in
A CHANGING INFLATION ENVIRONMENT
After a sustained period of disinflation, global prices came
under renewed pressure as Middle East tensions escalated
in early CY 2026. Concerns over the security of the Strait
of Hormuz, a critical global energy corridor, drove oil
and gas prices sharply higher. The impact soon extended
beyond energy, raising transportation costs, shipping
insurance premiums, fertiliser prices, and broader trade
expenses. For commodity-importing economies, these
developments complicated the return to price stability just
as policymakers prepared to ease monetary policy.
Inflation trends, however, remained uneven across regions.
China continued to grapple with weak price growth and
persistent deflationary pressures. India, by contrast,
benefited from easing food inflation, softer commodity
prices, and supportive fiscal measures that moderated
consumer prices. Across Latin America, inflation eased
further but remained above official targets in several
economies. Consequently, policy responses diverged.
Many advanced economies cautiously lowered interest
rates, while several emerging markets continued prioritising
inflation control and exchange-rate stability alongside
economic growth.
(Source: https://www.imf.org/en/pubHcations/weo/
issues/2026/04/14/world-economic-outlook-april-2026)
EMERGING MARKETS AND DEVELOPING ECONOMIES
Emerging and developing economies remained key drivers
of global growth, supported by resilient consumer demand,
sustained infrastructure investment, and favourable
demographics. India continued to lead this momentum
through robust domestic demand and investment-led
expansion. More broadly, Asia retained its position as
the largest contributor to global growth, generating a
substantial share of new economic output and reinforcing
its role as a cornerstone of the global economy.
(Source https://www.imf.ora/en/pubHcations/weo/
issues/2026/04/14/world-economic-outlook-april-2026)
OUTLOOK
The global economic outlook remains resilient despite
persistent uncertainty. Geopolitical tensions, growing
trade fragmentation, limited fiscal capacity across several
economies, and the risk of renewed financial market
volatility continue to weigh on prospects. At the same
time, rapid advances in artificial intelligence present
a significant long-term opportunity. By enhancing
productivity, accelerating innovation, and easing supply-
side constraints, Al could support future growth, although
its benefits will likely differ across countries and industries
as adoption progresses.
INDIAN ECONOMY
India continued to demonstrate remarkable economic
resilience despite heightened global uncertainty and
shifting geopolitical dynamics. According to provisional
estimates, real GDP grew 7.7% in FY 2025-2026, reinforcing
Indias position among the worlds fastest-growing major
economies. Strong domestic demand, healthy foreign
exchange reserves, a well-capitalised financialsector, stable
inflation, and a predominantly domestically financed public
debt profile underpinned this performance. Together,
these strengths enhanced the economys ability to absorb
external shocks and navigate geopolitical tensions, supply
chain disruptions, and evolving trade patterns.
Real GDP Growth Rate of Indian Economy (in %)
I Growth of Indian Economy Projected in FY
2025-2026
The Union Budget 2026-2027 reinforced Indias long-term
growth agenda by prioritising manufacturing and industrial
development. Strategic sectors, including semiconductors,
electronics, biopharmaceuticals, and rare earth processing,
received targeted policy support to strengthen domestic
capabilities and reduce external dependence. At the same
time, traditional industries, including textiles and established
manufacturing clusters, benefited from incentives to
modernise operations, improve productivity, and enhance
global competitiveness.
Infrastructure development remained central to economic
expansion. Public capital expenditure increased to Rs. 12.2
lakh or from Rs. 11.21 lakh or in the previous year, supporting
investments in transport networks, logistics infrastructure,
and urban development. Policy attention also shifted towards
Tier II and Tier III cities, particularly those with populations
exceeding 5 lakh, recognising their growing role as centres of
consumption, investment, and employment. For businesses
operating in electronics and technology products, this
expanding economic footprint beyond metropolitan markets
creates significant growth opportunities.
Despite strong economic fundamentals, weather-related
risks remained a key concern. The likelihood of an El Nino
event and a weaker-than-normal monsoon increased, with
forecasts indicating below-average rainfall during CY 2026.
Although agriculture now contributes a smaller share of
GDP, it continues to support a substantial workforce while
influencing rural incomes, consumption, and food prices. A
prolonged rainfall deficit could reduce agricultural output,
particularly for rain-fed crops, increasing food inflation and
weakening rural demand. However, improved irrigation
coverage, healthy reservoir levels, and substantial food
grain buffer stocks have strengthened Indias resilience
compared with previous El Nino episodes, helping limit the
potential economic impact.
Monetary policy remained supportive while balancing
emerging risks. Following cumulative policy rate cuts of
100 basis points during FY 2025-2026, the Reserve Bank of
India (RBI) kept the repo rate unchanged at 5.25% in June
2026, maintaining a neutral stance that preserves flexibility
to respond to evolving domestic and global conditions.
Consumer price inflation remained benign at 5.95% in
May 2026, supported by favourable food prices, strong
agricultural output, and subdued core inflation. Against
this backdrop, the RBIs calibrated approach aims to
sustain growth while preserving macroeconomic stability
and anchoring inflation expectations amid an increasingly
uncertain global environment.
(Source httPsWwww.pib.gov.in/PressReleasePage.
asDXRsPRID=2272112&rea=48&lana=l)
I Inflation in May 2026
OUTLOOK
The RBI has lowered its FY 2026-2027 GDP growth
forecast to 6.6% from 6.9%, citing geopolitical tensions in
West Asia, higher crude oil prices, supply chain disruptions,
and weather-related risks. Despite these uncertainties, it
retained the repo rate at 5.25% and maintained a neutral
policy stance. This reflects confidence in the economys
resilience, supported by robust consumption, investment,
manufacturing, and services exports.
However, the RBI identified a below-normal monsoon
and El Nino conditions as key risks to agricultural output,
rural demand, and food inflation. Economists also remain
concerned about rising crude oil prices, given Indias
reliance on imports. Reflecting these risks, institutions
including ICRA and HSBC have lowered their growth
forecasts, warning that prolonged geopolitical tensions
could further weaken growth while fuelling inflation.
Against this backdrop, policymakers may find it increasingly
difficult to balance growth with price stability. Persistently
high oil prices could widen the current account deficit,
strain fiscal finances, and further complicate the RBIs
monetary policy decisions in the coming quarters.
(Source https://economicti mes.indiatimes.com/news/
economv/indicators/rbi-gdp-growth-forecast-fv-2026-27-
mpc-meeting-india-economic-outlook-adp-forecast-india/
artideshow/131519300.cmsRsfrom = mdr)
I Projected Growth Rate of Indian economy in
FY 2026-2027
INDUSTRY REVIEW
FMCG Industry
Indias FMCG sector continued to grow steadily, driven
by resilient consumer demand and higher prices for
essential products. The industry remains a major employer,
supporting nearly 5 Mn jobs and accounting for around 5%
of Indias factory workforce. As the countrys fourth-largest
sector, FMCG plays a vital economic role, with household
and personal care products contributing nearly half of total
industry sales.
FMCG is |
3 Mn | 5% 1 |
Indias fourth- |
People | Of Countrys Total Factory |
largest sector |
Employed in | Workforce is Employed in |
| FMCG Sector | FMCG Sector |
The sector remained resilient during FY 2025-2026,
supported by stable consumer demand, easing inflationary
pressures, and the continued expansion of modern retail.
Rural markets remained the primary driver of volume
growth, while urban demand gradually recovered across
smaller towns and metropolitan areas. Meanwhile,
e-commerce and quick commerce strengthened their
presence across urban India, emerging as key growth
drivers for FMCG sales.
A defining development during the year was the
implementation of GST 2.0, which reshaped the FMCG
landscape through a simplified tax structure. Standard and
essential goods attracted a 5% GST, premium products 18%,
and sin and luxury goods 40%, while daily staples remained
exempt. The reform aimed to improve affordability, simplify
taxation, and encourage companies to pass tax benefits to
consumers, supporting demand. Although the transition
initially prompted pricing and supply chain adjustments
across much of the FMCG portfolio, organised retail
adapted faster than traditional trade, helping preserve
market stability.
Category performance remained uneven. Food products
benefited from GST-led price corrections and stable edible
oil prices, driving stronger consumption. By contrast,
home and personal care categories recorded slower
volume growth because of greater exposure to pricing
adjustments. Small and medium-sized manufacturers also
continued to outpace larger players in volume growth,
reflecting their agility in responding to evolving consumer
preferences, pricing trends, and local market opportunities.
(Source https://n ielsenia.com/alobal/en/news-center/2026/
nia-ast-2-O-transition-reshapes-indias-fmca-arowth-
landscape/
Rural FMCG Sales
Rural India remains a key growth engine for the FMCG sector,
supported by rising aspirations, stronger infrastructure, and
wider market access. Government initiatives across housing,
road connectivity, financial inclusion, and livelihood
generation have improved living standards, creating a
stronger foundation for consumption. Better infrastructure
and connectivity have also enhanced access to goods,
services, and distribution networks, integrating rural
consumers more closely with the broader economy.
This progress is reshaping rural demand. Consumption now
extends beyond essentials, with consumers increasingly
seeking quality, convenience, and greater value. Higher
disposable incomes, expanding retail access, and growing
digital exposure have created a more informed and
aspirational consumer base, driving demand for branded,
premium, and value-added products across categories.
Despite these opportunities, rural markets remain
operationally complex. Geographic dispersion,
infrastructure gaps, seasonal disruptions, and fragmented
distribution networks continue to raise last-mile delivery
costs. Lower population density and limited retail
infrastructure in some regions further constrain supply
chain efficiency and product availability.
To overcome these challenges, FMCG companies are
adopting localised distribution models, strengthening
partnerships with rural entrepreneurs and retailers, and
using technology to enhance demand forecasting and
inventory management. Meanwhile, e-commerce, digital
platforms, and community-led distribution initiatives are
expanding rural reach and improving service levels.
Looking ahead, rural Indias transition from a value-
conscious market to an aspiration-driven consumer
economy offers significant growth opportunities. Success
will depend on balancing affordability with innovation,
strengthening rural distribution, and developing products
that meet the evolving preferences of a more connected
and discerning consumer.
GROWTH DRIVERS
Rising Disposable Incomes
Rising disposable incomes continue to drive growth across
Indias FMCG sector, supporting higher consumption of
both essential and discretionary products. Recent tax
reforms and fiscal measures aimed at increasing household
disposable income are expected to strengthen consumer
confidence and spending. Improved purchasing power
should sustain demand for packaged foods, personal care
products, home care solutions, and premium offerings,
creating a favourable environment for industry growth.
Favourable Demographic Profile
Indias demographic advantage remains one of the FMCG
industrys strongest long-term growth drivers. With a
median age of approximately 29.8 years, the country
has one of the worlds youngest consumer populations.
As urbanisation and incomes continue to rise, younger
consumers increasingly favour convenience, innovation,
quality, and personalised experiences. Their evolving
lifestyles are reshaping consumption patterns and
accelerating demand for differentiated products, creating
opportunities for FMCG companies to broaden their
portfolios and deepen market penetration.
(Source https://www.business-standard.com/industrv/news/
f mca-indust rv-eves-hiah-sinale-diait-volume-arowth-in-
2026- better-marains-125122200220 l.html#: :text=vears%20
to%20come.-.lndias%20vouna%20demoaraphic%2C%20
characterised%20bv%20MiUennials%20and%20Gen%20
Z%2C%20has.%2Doriented%20spending%2C%20he%20said )
MSMEs as a Critical Growth Enabler
Micro, Small and Medium Enterprises (MSMEs) are integral
to strengthening the FMCG ecosystem. They support
localised manufacturing, enhance supply chain agility,
drive innovation, and create employment. According
to the Economic Survey 2025-26, India has over 7.47 or
MSMEs employing more than 52.82 or people, making
the sector the countrys second-largest employer after
agriculture. MSMEs contribute around 51.1% of Indias GDP,
55.4% of manufacturing output, and 48.58% of exports.
They also serve as vital partners for FMCG companies
through contract manufacturing, packaging, logistics, and
regional sourcing, while promoting local value addition
and inclusive economic growth.
(Source https://www.pib.aov.in/PressReleasePaae.
aspxRsPRID=2219984&rea=48&lana = 2)
The Rise of Quick Commerce
Quick commerce has become one of the most significant
developments in Indias retail landscape. Powered by
technology-enabled dark stores and hyperlocal fulfilment
networks, it has reshaped consumer expectations around
convenience, accessibility, and delivery speed. Initially
serving as an emergency grocery solution, the channel
has evolved into a preferred destination for everyday
FMCG purchases, including snacks, beverages, personal
care products, and household essentials. As consumer
buying behaviour continues to shift, FMCG companies
are redesigning supply chains, optimising inventory, and
developing channel-specific offerings to capture this
growing opportunity.
Accelerating Digital Transformation
Digital transformation is redefining the FMCG value
chain by improving efficiency, strengthening customer
engagement, and enabling faster, data-driven decisions.
Companies are increasingly adopting technologies such as
artificial intelligence (Al), the Internet of Things (loT), cloud
computing, and data analytics to enhance manufacturing,
procurement, inventory management, and distribution.
Premiumisation and Wellness-Led Consumption
Growing demand for premium, health-focused products
is reshaping consumption across the FMCG sector. Rising
disposable incomes and greater consumer awareness are
shifting purchase decisions towards quality, health benefits,
ingredient transparency, and overall value. This shift is
fuelling demand for premium packaged foods, functional
nutrition, organic products, clean-label formulations,
and science-backed personal care solutions. Consumers
increasingly pay more for products that reflect their health,
wellness, and lifestyle aspirations. This creates opportunities
to expand premium portfolios while improving profitability.
Sustainability as a Strategic Imperative
Sustainability has become integral to long-term value
creation in the FMCG sector We continue investing in
recyclable packaging, lower carbon emissions, greater
resource efficiency, and responsible sourcing. Alongside
these efforts, regenerative agriculture and sustainable
supply chains help mitigate climate-related risks while
strengthening brand reputation and stakeholder trust.
Together, these initiatives enhance long-term resilience
and competitive differentiation.
Strong Investment Momentum
The FMCG sector continues attracting strong domestic
and foreign investment, supported by favourable policies,
expanding consumer markets, and stronger manufacturing
capabilities. Meanwhile, established companies are
investing in emerging brands, digital-first businesses, and
direct-to-consumer (D2C) platforms to capture evolving
consumer preferences and strengthen future growth
pipelines.
Government Initiatives
Government policies continue to support the growth of
Indias FMCG sector by strengthening rural consumption,
improving infrastructure, advancing food processing,
and promoting formalisation across the value chain.
Investments in rural development, agriculture, housing,
and connectivity are improving market access, expanding
consumption, and enhancing distribution efficiency,
particularly across semi-urban and rural regions.
Meanwhile, continued emphasis on food processing,
supply chain modernisation, and ease of doing business
is boosting competitiveness and operational efficiency.
Initiatives supporting MSMEs, domestic manufacturing,
and stronger quality and food safety standards are further
building a more resilient and organised FMCG ecosystem.
OUTLOOK
Indias FMCG sector is projected to grow by 8% to 10% in FY
2026-2027, reinforcing its role as a key driver of the countrys
consumption-led economy. Growth is expected to stem
primarily from selective price increases as companies offset
rising input costs. Higher crude oil-linked raw material
prices, packaging costs, freight expenses, and supply chain
disruptions have significantly increased operating costs.
Manufacturers of soaps, detergents, shampoos, and other
personal care products are expected to face the greatest
pressure because crude oil-derived inputs account for a
significant share of their raw material costs.
Despite this, volume growth is expected to moderate to 2%
to 3%, down from 5% to 6% in the previous year. Persistent
inflation, softer consumer sentiment, and potential
monsoon-related risks could weigh on demand across
both urban and rural markets.
Although consumer spending remained resilient during
FY 2025-2026, FMCG stocks lagged broader market
and diversified consumption indices. Incremental
spending increasingly shifted towards discretionary
categories, including automobiles, travel, hospitality,
retail, and consumer durables, instead of everyday
staples. Consequently, broader consumption indices
outperformed traditional FMCG companies despite
favourable macroeconomic conditions.
The past few years have also reshaped the perception of
FMCG as a purely defensive sector. Historically, essential
products helped sustain demand during economic
slowdowns. FHowever, supply-side pressures, including
higher crude oil and edible oil prices, currency depreciation,
and geopolitical disruptions, have shown that even defensive
sectors remain vulnerable when costs rise sharply.
Against this backdrop, FMCG companies are expected to
rely on selective price increases, shrinkflation, smaller pack
sizes, targeted promotions, and supply chain optimisation.
Together, these measures should help preserve
affordability, protect market share, and sustain profitability
in an increasingly price-sensitive market.
(Sources httDs://www.anaelone.in/news/economv/india-
s-f mca-sector-expected -to-a row-8-10- in-fv27-d riven- bv-
Drice-hikes-desDite-risina-costs-slow-demand
httDs://www.cnbctvl8.com/market/aoldman-sachs-fv27-fmca-
arowth-consumer-sta pies-disc retionarv-crude-oil-prices-ast-
inflation-west-asia-aeopolitical-tensions-19921393.htm)
HOME AND PERSONAL CARE INDUSTRY
The Indian home care market continues to expand
rapidly. Valued at an estimated USD 11.9 Bn in CY 2025,
it is projected to reach approximately USD 27.4 Bn by CY
2030, growing at a CAGR of around 18%. Indias Beauty
and Personal Care (BPC) market is also on a strong growth
trajectory. Currently valued at over USD 27 Bn, it is expected
to approach USD 40 Bn by CY 2030, driven by evolving
consumer preferences and deeper market penetration.
Market Size (USD Bn)
MANAGEMENT DISCUSSION & ANALYSIS (Contd.)
httDs://www.Dersonalcareinsiahts.com/news/india-beautv-
boom-safetv-concerns.html)
GROWTH DRIVERS
Quick Commerce and Digital Infrastructure
Quick commerce has reshaped consumer purchasing
behaviour by making everyday home and personal care
products more accessible. Faster deliveries have increased
purchase frequency, while wider 5G adoption and stronger
logistics networks have expanded access to premium
products across Tier-2 and Tier-3 cities. Together, these
developments have significantly widened the addressable
market.
Shifting Consumer Preferences
Indian consumers are moving beyond basic hygiene
towards wellness, self-care and personalised beauty
solutions. This shift has accelerated demand for premium
formats such as body washes while driving the skinification
of body care, with products addressing specific concerns
including pigmentation, hydration and barrier repair. At the
same time, changing social norms and growing awareness
of personal grooming have expanded the mens grooming
category beyond shaving into skincare serums, specialised
hair care and targeted grooming routines.
Growing Demand for Science-Backed and Clean Beauty
Solutions
A more informed and digitally connected consumer base is
driving demand for products that combine scientific efficacy
with trusted natural ingredients. Consumers increasingly
prefer formulations containing active ingredients such as
niacinamide, hyaluronic acid and vitamin C, influenced by
dermatologists and beauty content creators. Meanwhile,
strong trust in Ayurveda and clean beauty continues to
support products that combine natural ingredients with
clinical validation and safety testing
Premiumisation and Rising Influence of Global Beauty
Trends
Rising disposable incomes and greater exposure to global
beauty trends continue to accelerate premiumisation across
the HPC sector. Although mass-market products account
for most volumes, premium and luxury segments are
growing faster International beauty brands are expanding
through both physical and digital channels, supported by
specialised beauty retailers The fragrance segment reflects
this trend, with premium perfumes steadily gaining share
over traditional deodorants as consumers increasingly seek
products that reflect their identity and lifestyle aspirations
Urbanisation and Appliance Adoption Driving Home Care
Evolution
Rapid urbanisation and increasing adoption of modem
household appliances are transforming the home care
segment Greater penetration of dishwashers and automatic
washing machines has boosted demand for specialised
products, including liquid detergents, fabric conditioners,
dishwasher tablets and other high-performance cleaning
solutions. Consumers are also trading up to premium
home hygiene products, including antibacterial cleaners,
surface care solutions and home fragrancing systems,
reinforcing home care as an important lifestyle category.
OUTLOOK
The Indian Home and Personal Care (HPC) industry
is well positioned for sustained growth, strengthening
Indias position among the worlds largest beauty markets
Consumer spending is steadily shifting from occasional
discretionary purchases towards everyday self-care,
wellness and personal expression
As the market matures, competition is expected to
intensify between emerging digital-first brands and
established FMCG players While D2C brands continue
to attract consumers through innovation and agility,
larger incumbents are reinforcing their market positions
through acquisitions, brand incubation and omnichannel
distribution
Over the long term, sustained competitive advantage
will depend not only on brand building and customer
acquisition but also on investments in manufacturing,
supply chain resilience, research and development, and
regulatory compliance At the same time, greater scrutiny
of ingredient safety, clean-label claims and sustainable
packaging will continue to shape product innovation and
operational strategies across the industry
S ou rce https://www.ibluu.com/insiqhts/inside-indias-40bn-
beau tv-and-personal-care-market-and-the-world s-next-
global-personal-care-powerhouse-bv-2050/)
FOOD & BEVERAGES INDUSTRY
Indias food & beverages (F&B) sector remains one of the
countrys largest consumption-driven industries. Valued
at approximately USD 437.6 Bn in CY 2024, the market is
projected to reach USD 875 Bn by CY 2030, registering a
CAGR of about 12.5%.
Market Size (USD Bn)
GROWTH DRIVERS
Rising Incomes and Evolving Consumer Preferences
Indias expanding middle class and rising disposable
incomes continue to reshape food consumption across
metropolitan and emerging cities. Consumers are spending
more on dining out, online food delivery, premium cafes,
and other experiential formats. Meanwhile, busy urban
lifestyles and a growing preference for convenience
are driving demand for quick-service restaurants, cloud
kitchens, and organised food brands. These trends have
also attracted strong private equity interest, underlining
the sectors growth potential. As a result, organised food
businesses are growing 1.5-2 times faster than the broader
industry, reflecting the shift towards scalable, branded, and
professionally managed food service platforms.
Strong Agricultural and Dairy Foundations
Indias F&B industry is supported by one of the worlds
largest agricultural and dairy ecosystems, providing a
resilient supply base. The country produces nearly one-
fourth of the worlds milk, while its dairy sector contributes
around Rs. 12 Tn to the economy. More than 17 Mn farmers
across 2.35 lakh villages participate in dairy cooperatives,
strengthening rural livelihoods and supply chain efficiency.
Government initiatives, including White Revolution 2.0,
are expected to further enhance production capacity and
improve distribution networks.
(Source: httPsYA/vww. makreo.com/bloaA/vhat-is-drivina-
india-s-food-beve rage-market-growth-and -how-can - market-
research-unlock-the-QDDortunitv)
Expansion of Organised Food Services
Indias food services industry is expected to exceed USD
125 Bn by CY 2030, with the organised segment expanding
at nearly twice the pace of the unorganised market. At
the same time, digital ordering platforms are reshaping
consumer behaviour. Customers now order from 30%
more restaurants, explore 20% more cuisines, and
increasingly embrace late-night dining, which is growing
almost three times faster than traditional dinner occasions.
Innovation in Beverages
The beverage category has emerged as one of the fastest-
growing segments within Indias F&B landscape. Demand
is rising for matcha and hojicha beverages, cold brews,
bubble tea, and fusion cafe drinks. Beyond metropolitan
markets, Tier-2 and Tier-3 cities are driving the next phase
of premium and experiential beverage consumption.
F&B Demand is Redefining Retail Real Estate
Rapid expansion of the F&B sector is reshaping retail real
estate across India. Over the past two years, the category
accounted for nearly 4 Mn sq. ft. of retail leasing across the
countrys seven largest cities. In response, developers are
allocating up to 25% of mall space to food and beverage
operators. High streets continue to dominate leasing,
accounting for 54% of total absorption, led by Bengaluru,
followed by Mumbai and Delhi NCR. Looking ahead,
another 6 Mn sq. ft. of F&B-focused retail space is expected
to be delivered by CY 2028.
(Source httDs://www.makreo.com/b[oa/what-is-drivina-india-s-
food-beveraae-market-arowth-and-how-can-market-research-
unlock-the-QDDortunitv)
OUTLOOK
Indias F&B industry is well positioned for sustained long-
term growth, with the packaged foods & beverages market
expected to surpass USD 150 Bn by CY 2050. Rising
disposable incomes, rapid urbanisation, growing demand
for convenience, and the continued expansion of quick
commerce and organised retail will remain key growth
drivers. At the same time, evolving consumer preferences,
digital adoption, product innovation, and changing retail
real estate dynamics are creating significant opportunities
across the value chain.
(Source httDs://redseer.com/reDorts/reinventina-Dackaaed-fb-
with-auick-commerce/)
ICE CREAM INDUSTRY
The Indian ice cream market was valued at approximately
Rs. 512.8 Bn in CY 2025 and is projected to reach Rs. 562.9
Bn in CY 2026. It is expected to sustain strong momentum
over the next decade, expanding to nearly Rs. 1,192.4 Bn
by CY 2054 at a CAGR of 16.0% between CY 2026 and CY
2054.
GROWTH DRIVERS
Low Per Capita Consumption
Indias ice cream market continues to benefit from rising
per capita consumption, reflecting wider consumer
acceptance and deeper market penetration. Consumption
remains well below that of developed markets such as
New Zealand and the United States, highlighting substantial
untapped potential. As affordability, accessibility and
consumer awareness improve, the market offers significant
long-term growth opportunities.
Climate Change and Seasonal Demand Growth
Rising temperatures, longer summers and recurring
heat waves continue to drive ice cream consumption
across India. Consumers increasingly view ice cream as
a preferred refreshment during extreme weather, making
climate-driven demand a key catalyst for category growth.
Expansion of Quick Commerce and Market Accessibility
Rapid growth in e-commerce and quick commerce has
transformed product accessibility, allowing consumers to
purchase ice cream instantly and encouraging impulse
buying. At the same time, stronger logistics and cold-chain
infrastructure have expanded market reach across urban,
semi-urban and smaller cities.
Rural Penetration and Growth of Regional Manufacturers
Growing demand from rural and Tier-ll and Tier-Ill markets,
alongside the expansion of regional and unorganised
manufacturers, continues to support market growth.
Affordable raw materials, simple production processes and
strong consumer preference for traditional flavours such
as kulfi and kalakand have further accelerated penetration
beyond metropolitan centres.
Product Innovation and Premiumisation
Continuous flavour innovation, premium product launches
and rising disposable incomes are driving value growth.
Consumers are increasingly exploring exotic and indulgent
flavours, while evolving lifestyles and higher discretionary
spending continue to strengthen demand for premium
offerings. This creates opportunities for brands to diversify
portfolios and capture higher-margin segments.
Rising Health and Wellness Consciousness
Greater awareness of health, nutrition and wellness is
reshaping the category and accelerating demand for
better-for-you alternatives. Consumers increasingly prefer
low-sugar, low-fat, high-protein and plant-based options
that align with their dietary choices and fitness goals.
In response, manufacturers are introducing innovative
formulations featuring probiotics, prebiotics, herbs and
micronutrients, alongside dairy-free and vegan offerings.
Alternative ingredients, including whey protein isolate
(WPI), are further enhancing nutritional value without
compromising taste or texture, supporting the premium
health-focused segment.
Expansion of Retail Networks and Cold Chain
Infrastructure
The continued expansion of modern retail channels and
cold-chain infrastructure remains central to Indias ice
cream market growth. Valued at approximately USD 24.9
Bn in CY 2025, the Indian cold-chain market is projected
to exceed USD 55 Bn by 2051, reflecting sustained
investment in cold storage, refrigerated transportation
and temperature-controlled retail networks. These
developments are improving storage, handling and
distribution while helping manufacturers preserve product
quality and expand their presence across urban and semi-
urban markets. Coupled with the growth of supermarkets,
hypermarkets and convenience stores, they are enabling
broader product availability and supporting sustained
category expansion.
(Source htt ps:/Aa/ww.mordorintelliaence.com/industrv-
reports/india-cold-chain-logistics-market)
OUTLOOK
Indias ice cream market is entering a new phase of
growth, supported by rising consumption frequency,
premiumisation and increasingly sophisticated consumer
preferences. Although category penetration is relatively
high, usage frequency remains low, leaving significant
headroom for expansion as brands create new
consumption occasions through product innovation and
portfolio diversification. At the same time, the gap between
indulgence and wellness is narrowing, with low-sugar,
high-protein and functional nutrition products gaining
prominence. Consequently, manufacturers are broadening
their portfolios with healthier, value-added offerings that
combine indulgence with nutritional benefits.
OTC PHARMACEUTICALS INDUSTRY
Indias healthcare landscape is undergoing a fundamental
shift, with consumers taking greater responsibility for
managing everyday health needs. Valued at approximately
Rs. 47,000 or (USD 5.6 Bn) in CY 2024, Indias over-the-
counter (OTC) market is projected to nearly double to
Rs. 98,000 or by CY 2050, recording a CAGR of 15%.
Despite being one of the worlds most populous countries,
India remains significantly underpenetrated in OTC
consumption. Per capita spending is less than one-tenth
of the global average, underscoring substantial growth
potential.
Market Size (Rs. cr)
(Source httDs://www.ev.com/en in/newsroom/2026/01/india-
s-over-1 he-cou nter-d rug s-market-set-to-hit-dollor-98-000-
c rore-by- 2030 -growing-at-13 -perce nt-cagr-ev-part he non -
report)
GROWTH DRIVERS
Consumer-Driven Wellness Surge
Urban consumers are increasingly embracing self-care, with
around 62% opting to self-medicate for common ailments
such as fever, colds, and digestive discomfort. Meanwhile,
changing lifestyles, rising stress, environmental challenges,
and greater health awareness are accelerating demand
for preventive wellness products, including multivitamins,
immunity supplements, and cosmeceuticals.
Cost-Effective Healthcare Access
OTC medicines empower consumers to manage minor
ailments independently, reducing dependence on physician
consultations and lowering out-of-pocket (OOP) expenses.
Healthcare professional visits account for nearly 86% of
healthcare spending, compared with 10% for self-medication
and 4% for pharmacist-led care. This highlights the cost-
effectiveness of self-care for routine health conditions.
Rise of E-Commerce and E-Pharmacies
The rapid growth of e-commerce and digital pharmacy
platforms has transformed OTC retail by offering convenient
access, personalised recommendations, and doorstep
delivery. The COVID-19 pandemic further accelerated this
shift, reinforcing digital channels as a preferred purchase route.
Innovative OTC Formats
Rising health awareness and expanding product categories
are driving innovation through convenient formats
such as gummies, melts, and dissolvable tablets. These
user-friendly offerings particularly appeal to younger
consumers, including Gen Z, making wellness products
more accessible and enjoyable.
Emergence of a Structured OTC Regulatory Framework
India is steadily moving towards a formal OTC regulatory
framework, creating a more transparent and predictable
operating environment. Similar to established markets such
as the US, Canada, and Europe, the framework is expected
to improve product safety, strengthen consumer trust, and
support the growth of organised industry participants.
Government Initiatives
Government initiatives, including the Pradhan Mantri
Bhartiya Janaushadhi Pariyojana (PMBJP), are expanding
access to affordable, quality-assured generic medicines.
Through an expanding network of Janaushadhi Kendras,
essential healthcare products are reaching millions of
consumers at significantly lower prices. These efforts are
encouraging greater adoption of self-care while supporting
broader OTC market growth.
OUTLOOK
Indias OTC market is well positioned for sustained growth,
driven by rising health awareness, higher disposable
incomes, greater adoption of preventive healthcare, and
expanding digital commerce. As consumers become
more informed and proactive, demand is expected to
shift further towards self-care, wellness, and preventive
healthcare solutions. This positions OTC as a compelling
growth opportunity for pharmaceutical companies beyond
traditional prescription-led businesses.
Looking ahead, success will depend on building trusted
consumer brands, embracing data-driven multi-channel
marketing, strengthening digital engagement, and
maintaining consumer confidence. Companies expanding
from prescription (Rx) to OTC products must also balance
broader consumer outreach with sustained credibility
among healthcare professionals.
A robust regulatory framework will be equally critical. Clear
guidance on product classification, labelling, health claims,
and consumer communication will promote responsible
self-medication, strengthen consumer confidence, and
encourage long-term industry investment.
FOOTWEAR INDUSTRY
Indias footwear market was valued at approximately
USD 20.67 Bn in CY 2025 and is projected to reach USD
47.55 Bn by CY 2054, registering a CAGR of 9.7%. Rising
disposable incomes, increasing footwear penetration,
evolving consumer preferences, and expanding demand
across branded and organised retail channels continue to
support this growth.
(Source https://www.imarcarouD.com/india-footwear-market)
The non-athletic segment remained the markets primary
driver, accounting for 67.64% in CY 2025. Strong demand
for formal, casual, and traditional footwear underpinned its
performance. In contrast, athletic footwear, with a 52.56%
share, is expected to be the fastest-growing category. It
is projected to expand at a CAGR of approximately 11.8%
through CY 2054, driven by rising fitness awareness,
growing athleisure adoption, and sustained investments by
global sportswear brands.
The premium segment accounted for 54% of the market
in CY 2025, reflecting rising brand consciousness,
higher disposable incomes, and social medias growing
influence on purchasing decisions. The mass-market
segment represented the remaining 46%, supported by
steady demand for affordable products from domestic
manufacturers.
Regionally, North India led the market with a 55.0% share,
supported by its large consumer base and established
manufacturing ecosystem, particularly in Agra. South India
followed with 24.6%, driven by urbanisation and rising
consumption in cities such as Chennai and Bengaluru.
West and Central India contributed 22.8%, benefiting
from expanding organised retail penetration. East India
accounted for the remaining 17.6%, supported by improving
retail access and growing consumer demand.
(Source https://www.imarcarouD.com/india-footwear-market)
GROWTH DRIVERS
Expanding Urban Population and Higher Consumer
Spending
Indias urban population is expected to approach 600 Mn
by CY 2051, expanding the footwear consumer base. Rising
disposable incomes are also steering consumers towards
branded products that deliver superior style, comfort, and
quality. This shift is accelerating premiumisation while
increasing the reach of organised footwear brands across
metropolitan and emerging urban markets.
(Source https://www.imarcaroup.com/india-footwear-market)
Growth of E-Commerce and Digital Retail Channels
Expanding internet access and smartphone adoption,
especially across Tier II and Tier III cities, continue to
transform footwear retail. Indias e-commerce market is
projected to surpass USD 145 Bn by CY 2025, driven by
mobile-first shopping and personalised digital experiences.
Online marketplaces offer wider product choices while
helping brands expand their reach efficiently across the
country.
(Source https://www.imarcgroup.com/india-footwear-market)
Expansion of Regional Manufacturing Clusters
The success of established footwear hubs, particularly
in Tamil Nadu, is encouraging other states to strengthen
their manufacturing ecosystems. Uttar Pradesh, Haryana,
Andhra Pradesh, and Telangana are attracting investments
through supportive policies, infrastructure development,
and workforce initiatives. As new regional clusters emerge,
they are expanding production capacity, generating
employment, and fostering balanced industrial growth
nationwide.
Rising Demand for Athleisure and Fashion-Oriented
Footwear
Growing health awareness, evolving fashion preferences,
and a young consumer base continue to fuel demand
for athleisure and lifestyle footwear. Hybrid work models
have further reinforced this trend by increasing demand
for footwear that blends comfort, functionality, and style.
In response, brands are expanding their portfolios with
innovative offerings across athletic and casual segments.
Technology Adoption across Manufacturing and Retail
Advanced technologies are reshaping the Indian footwear
industry. Manufacturers are adopting automation, artificial
intelligence, and data-driven production systems to
improve efficiency and lower costs. At the consumer
level, innovations such as augmented reality-enabled
virtual try-ons and personalised shopping experiences are
strengthening engagement, accelerating e-commerce
adoption, and helping brands meet evolving expectations.
Sustainability and Eco-friendly Footwear
Sustainability is emerging as a key growth driver as
consumers increasingly value environmental responsibility
and ethical production. Growing awareness is boosting
demand for footwear made from recyclable, renewable,
and eco-friendly materials. In response, manufacturers and
brands are investing in sustainable product development,
adopting greener production processes, and enhancing
supply chain transparency.
Government Initiatives
Government initiatives, including 100% foreign direct
investment (FDI) in footwear, Production-Linked Incentive
(PLI) schemes, and leather duster development prog rammes,
are strengthening the domestic manufacturing ecosystem.
These measures are attracting investments, expanding
production capabilities, reducing import dependence,
and reinforcing Indias position as a globally competitive
footwear manufacturing and export hub.
Trade Compliance and Import Regulation Framework
Stronger enforcement of rules of origin under trade
agreements, including ASEAN FTA and SAFTA, is creating
a more level playing field for domestic manufacturers.
By limiting trade circumvention and promoting fair
competition, these measures encourage local production,
attract investment, and deepen Indias integration into
regional and global supply chains.
OUTLOOK
Indias footwear and leather industry is entering a
transformative phase, supported by favourable policies,
expanding manufacturing capabilities, and rising global
demand. As the country strengthens its role in international
value chains, the sector is poised to become a major
contributor to industrial growth, exports, and employment.
This long-term potential is reflected in the industrys
ambition to achieve a turnover of USD 90 Bn by CY 2030.
The Indian Footwearand Leather Development Programme
(IFLDP), backed by a government outlay of Rs. 1,700 or,
is expected to drive this transformation. The programme
aims to develop world-class infrastructure, accelerate
technological modernisation, and enhance manufacturers
competitiveness. It also supports integrated manufacturing
clusters for footwear, leather goods, and accessories,
creating a robust ecosystem for large-scale production
and exports.
Alongside manufacturing expansion, the industry
continues to prioritise innovation, design excellence, and
skill development. Collaborations with leading institutions,
including CSIR-CLRI, are advancing design capabilities
and strengthening industry-academia partnerships. At the
same time, specialised training programmes in footwear
and apparel design are building a skilled workforce capable
of meeting evolving market needs and global quality
standards.
CONTRACT MANUFACTURING INDUSTRY
Indias contract manufacturing industry is witnessing robust
growth, driven by supportive government policies, rising
private investments, and the diversification of global supply
chains. Its competitive cost structure, expanding skilled
workforce, and strengthening manufacturing ecosystem
make India an increasingly attractive destination for global
companies seeking reliable, scalable production across
industries.
According to several market reports, India is witnessing
growing demand for contract manufacturing services,
driven by increasing cost pressures across industries. At
the same time, strong domestic and international demand,
coupled with extensive support from manufacturing
consultants, is accelerating the growth of the countrys
contract manufacturing sector.
To further strengthen the industry, the Government of
India has permitted 100% Foreign Direct Investment (FDI)
under the automatic route. This policy is encouraging
greater foreign investment and creating new business
opportunities across manufacturing segments. It also
positions India as an attractive manufacturing destination
for global companies seeking to diversify their supply chains
and expand operations amid ongoing shifts in global trade
dynamics, including the U.S.-China trade tensions.
To capitalise on these opportunities, contract manufacturers
are expanding facilities, pursuing mergers and acquisitions,
and forming strategic partnerships to strengthen capabilities
and broaden market reach. Together, these initiatives are
enhancing the industrys competitiveness and supporting
its long-term growth.
Key government initiatives supporting the sector include:
- 100% FDI under the automatic route.
- Permission for foreign single-brand retail enterprises
to sell goods manufactured in India, subject to the
prescribed 30% local sourcing requirement.
(Source https://india.acclime.com/auides/contract-
manufacturing/)
Just like the FMCG industry, the contract manufacturing industry has evolved multi-fold over the years:
Phase |
Period | Key Characteristics |
Phase 1 |
1980s | - Small Scale Industry (SSI) reservations protected domestic manufacturing. - Tax exemptions provided for SSI units. - Focus on encouraging small-scale production through policy support. |
Phase II |
2000s | - Shift from SSI reservations to area-based reservations. - Direct tax exemptions introduced to stimulate investment. - Indirect tax exemptions provided to support regional industrial development. |
Phase III |
Present Day | - Introduction of GST and creation of a unified national market (One
Country, One Market). - Significant changes in distribution and supply networks. - Growth
of e-commerce and modern trade channels. - Rapid emergence of small brands, many
preferring asset-light models rather than investing |
Phase IV |
Future Outlook | - India evolves into a global sourcing and pharmaceutical generics
hub. - Continued rise of small brands with limited interest in owning manufacturing
assets. - Product categories become more fragmented, moving away from duopolies and
oligopolies |
FAVOURABLE OPPORTUNITIES FOR CONTRACT
MANUFACTURERS IN INDIA
As businesses pursue greater agility and cost efficiency, they
are increasingly partnering with third-party manufacturers
to support growth and strengthen competitiveness. Todays
contract manufacturers offer far more than production
capabilities. Their strategic insight, technical expertise
and cross-industry experience help optimise operations,
strengthen supply chains and drive sustainable growth.
In-Depth Technical Expertise
Serving clients across multiple industries gives contract
manufacturers broad technical expertise in production
processes, cost optimisation and operational efficiency.
Their experience also helps identify design flaws and
manufacturing risks early, enabling businesses to avoid
costly mistakes and reduce investment risks.
Cost Savings
Contract manufacturing significantly lowers both
operational and capital expenditure. By outsourcing
production, companies avoid substantial investments
in manufacturing facilities, equipment and workforce
management. Reliable manufacturing partners also
streamline vendor coordination, minimise unexpected
costs and reduce labour expenses, improving overall
profitability.
Production Scalability
Expanding production often challenges start-ups and
small and medium-sized enterprises (SMEs) with limited
resources. Contract manufacturers overcome these
constraints through established facilities, skilled talent and
scalable production capacity. This enables businesses to
increase output quickly, respond to shifting demand and
scale operations without significant capital investment.
Regulatory Compliance Expertise
Indian contract manufacturers possess extensive
knowledge of domestic and international regulations. Their
expertise helps businesses navigate complex compliance
requirements, secure necessary certifications and meet
safety, quality and environmental standards. Consequently,
companies can minimise compliance risks and accelerate
market entry.
Faster Time-to-Market
An established manufacturing ecosystem enables
businesses to speed up product development and
commercialisation. Contract manufacturers provide
immediate access to production infrastructure, skilled
personnel and robust supply chain networks, shortening
timelines for prototyping, manufacturing and distribution.
This helps companies launch products faster and respond
swiftly to changing market demands.
Superior Product Quality
Indian contract manufacturers have earned a strong
reputation for delivering superior product quality through
advanced manufacturing practices and rigorous quality
standards. By leveraging technologies such as CNC
machining, 3D printing and precision engineering, they
achieve exceptional accuracy and consistency across
production runs. Skilled engineers and technical specialists
complement these capabilities with meticulous execution,
producing products that combine functionality with refined
aesthetics.
Access to Established Local Supply Chains
Long-standing relationships with raw material suppliers
and logistics partners enable contract manufacturers to
secure reliable procurement and cost-effective sourcing.
Their established supply chain networks reduce lead
times, lower transportation costs and ensure a consistent
supply of high-quality materials, supporting uninterrupted
production and operational efficiency.
THREATS
Competition from the Unorganised Sector
Indias FMCG industry remains highly fragmented, with
competition from established national brands and
numerous regional and unorganised players. Regional
businesses often enjoy strong customer loyalty within
their markets. Their ability to respond quickly to evolving
preferences and maintain dose customer relationships
strengthens their competitive position. Consequently,
contract manufacturers serving national and multinational
FMCG brands may face pricing pressure, fluctuating
demand, and market share challenges in regions where
local players maintain a strong presence.
Intellectual Property Infringement
Outsourcing production to third-party manufacturers
increases the risk of intellectual property (IP) theft or
infringement. The risk is particularly significant for products
relying on patented technologies, proprietary designs,
or specialised manufacturing processes. Without robust
security measures and effective safeguards for confidential
information, sensitive knowledge may be leaked, copied,
or misused.
Supply Chain Challenges
Contract manufacturing can create supply chain
complexities that disrupt production and delay deliveries.
Raw material shortages, procurement delays, inconsistent
material quality, transportation disruptions, and
operational interruptions at manufacturing facilities can
affect production schedules. These challenges may also
compromise the quality of finished products.
Quality Control Concerns
Maintaining consistent quality becomes more challenging
when production is outsourced. Differences in
manufacturing standards, production practices, or quality
assurance processes between the Company and its
manufacturing partner may result in defects or product
inconsistencies. Such issues can increase returns, reduce
customer satisfaction, and damage our reputation.
Contractual Risks
Poorly drafted or inadequately negotiated contracts can
expose companies to significant operational and financial
risks. Ambiguous terms, unclear responsibilities, unrealistic
production schedules, and inadequate quality requirements
may trigger disputes, delays, and unforeseen costs. Well-
defined contractual agreements remain essential for
sustaining successful manufacturing partnerships.
Time-Related Risks
Selecting an unsuitable contract manufacturing partner
can delay production and postpone market entry. Although
manufacturers continually pursue efficiency and cost
optimisation, delays may still arise. Even superior products
can lose commercial potential if competitors enter first or
customer demand shifts before launch.
Managing Supply Chain Risks
Global supply chains continue to face disruption from raw
material shortages, transportation bottlenecks, geopolitical
uncertainties, and economic volatility. Excessive
dependence on a single supplier or sourcing region
increases exposure to unexpected disruptions, affecting
production continuity and business resilience. We mitigate
these risks through supplier diversification, adequate
safety stock, and stronger supplier relationships. We also
leverage real-time supply chain monitoring, data analytics,
and structured risk management frameworks to improve
visibility and respond proactively to emerging disruptions.
Why HFL for Contract Manufacturing
Recognised as one of Indias most diversified contract
manufacturers, we have expanded through disciplined
organic growth and strategic acquisitions. This balanced
approach strengthens our capabilities, broadens our
presence across categories, and enables us to anticipate
industry trends. As customer requirements evolve, we
continue to deliver agile, scalable manufacturing solutions
across multiple sectors.
Integrated End-to-End Manufacturing Platform
We offer a comprehensive manufacturing ecosystem
supported by modern infrastructure and integrated
processing, packaging, warehousing, and logistics
capabilities. This end-to-end platform helps our customers
simplify operations, accelerate time-to-market, and
improve supply chain efficiency.
Partnering with us gives customers access to high-quality
manufacturing while protecting intellectual property
and ensuring consistent product standards. This allows
them to focus on innovation, brand building, customer
engagement, and long-term growth.
Flexible Manufacturing Models for Every Stage of Growth
To address the diverse needs of our customers, we operate
through a flexible three-tier business model:
- Dedicated Manufacturing Facilities: Exclusive
production facilities designed for large-scale anchor
customers with significant volume requirements.
- Shared Manufacturing Units: Cost-efficient production
infrastructure that delivers economies of scale for
customers with moderate manufacturing needs.
- Turnkey Private Label Solutions: End-to-end product
development and manufacturing services that enable
emerging brands to move rapidly from concept to
market.
Operational Excellence and Speed of Execution
Execution excellence distinguishes us. Strong project
management capabilities enable us to expand capacity,
modernise facilities, and commission new production
lines within compressed timelines. This agility helps
our customers minimise capital expenditure, optimise
operating costs, and respond quickly to changing market
demands.
Diversified Portfolio and Long-Term Customer
Relationships
Our manufacturing capabilities span home and personal
care, food and beverages, leather products, mosquito
repellents, ice cream, footwear, and OTC pharmaceuticals.
This diversified portfolio, combined with our ability to
respond swiftly to changing consumer preferences, makes
us a preferred manufacturing partner for both domestic
and international brands.
We build enduring customer relationships founded on
trust, quality, confidentiality, and operational reliability.
Long-term contracts enhance revenue visibility while
reinforcing our position as a scalable, dependable, and
globally competitive manufacturing partner.
Growth Drivers for Contract Manufacturers
Contract Manufacturing has become an integral part of
the FMCG value chain, with its growth closely aligned to
that of the broader industry. Consequently, the long-term
structural drivers supporting FMCG demand continue to
create significant opportunities for Contract Manufacturers.
COMPANY OVERVIEW
Hindustan Foods Limited (aiso referred to as HFL, or
The Company) is Indias largest and most diversified
multi-category FMCG Contract Manufacturer, backed
by a track record spanning more than three-and-a-half
decades. Our diversified business model drives stability and
resilience, enabling us to serve a broad range of consumer
categories.
Our presence spans Home Care, Personal Care, Pet Care
& Hygiene, Beauty & Cosmetics, Household Insecticides,
Food & Beverages, Ice Cream, Leather & Sports Footwear,
Healthcare & Wellness and Foot Care. Complementing
this portfolio, our Research and Development capabilities
enable us to continuously enhance our formulation
expertise and expand our product offerings across multiple
FMCG segments.
Our manufacturing network comprises 42 strategically
located facilities across India. Each facility is equipped
with advanced processing technologies, automated
packaging systems, warehousing, and integrated logistics
infrastructure. Our in-house laboratories uphold rigorous
quality standards at every stage of production. At the same
time, our dedicated Product Development arm drives
innovation and product excellence.
Together, these capabilities enable us to deliver scale,
consistency, quality, and speed, reinforcing our position as
a trusted manufacturing partner for leading brands.
During FY 2025-2026, we achieved several significant
operational and strategic milestones that strengthened our
manufacturing capabilities and positioned us for long-term
growth. This reflects our continued investment in capacity
creation and infrastructure development.
Within our Ice Cream business, we commissioned the
Panipat [Haryana] manufacturing facility in less than 10
months, demonstrating strong execution capabilities.
At the same time, we enhanced backward integration
by acquiring a Waffle Cones manufacturing unit and
commissioning an Ice Cream Sticks production facility
These initiatives strengthened supply chain efficiency while
providing greater operational control.
Furthermore, our Footwear division achieved an important
milestone by reaching operational stability While the
business delivered a strong performance, it encountered
some margin pressure towards the end of the year due
to higher petrochemical prices arising from geopolitical
developments.
We aiso continued to strengthen our shared manufacturing
platform, with its contribution to total EBITDA increasing to
26% in FY 2025-2026 from 15% in the previous year. This
demonstrates the expanding scale and diversification of
our business model.
In addition, the acquisition of a Personal Care facility
in Aurangabad expanded our footprint in the category,
enabling us to support premium and direct-to-consumer
brands through flexible and smaiier-batch production
solutions.
FINANCIAL HIGHLIGHTS
Particulars |
FY 2024-2025 1 (Restated) |
FY 2025-2026 | YoY Growth (%) |
Revenue from Operations |
3,638.7 | 4,251.0 | 17 |
EBITDA |
315.3 | 377.0 | 20 |
Profit After Tax |
115.2 | 149.0 | 29 |
Basic Earnings per Share (Rs.) |
9.85 | 12.34 | 25 |
Statement of Key Ratios
Types of Ratios |
Explanation of Ratios |
FY 2024-2025 (Restated) |
FY 2025-2026 | % Change |
Inventory |
Measures how often inventory is sold and replenished |
4.50 | 5.82 | (15.1) |
Current Ratio |
A liquidity ratio that assesses a companys ability to meet |
1.45 | 1.41 | (14) |
Net Profit |
Indicates the percentage of revenue retained as net profit |
5.17 | 5.51 | 10.7 |
Debtors |
Measures how efficiently the Company manages credit |
18.79 | 18.25 | (5.0) |
Return on Net |
Reflects how effectively the Company generates profit from |
14.72 | 14.29 | (2.9) |
RISKS AND THEIR MITIGATION STRATEGY
As a leading Contract Manufacturer, we operate in a dynamic environment shaped by
operational, financial, regulatory, and
market risks. To address these challenges, we have established a structured risk
management framework that enables us to
identify, assess, and mitigate potential risks. By integrating risk management into our
business planning and daily operations,
we enhance resilience, safeguard stakeholder interests, and support sustainable growth
across business cycles.
Risk |
Impact |
Mitigation Strategy |
Risk Level |
|
Economic Risk |
Our business is influenced by external |
We manufacture a diversified portfolio of essential |
Medium |
|
Raw |
Our operations are exposed to raw |
Our business model enables us to pass on a |
Low |
|
Risk |
Impact |
Mitigation Strategy |
Risk Level | |
Liquidity Risk |
Our business is exposed to liquidity risk, |
We actively monitor and manage cash flows through |
Low | |
Contract Risk |
Our business is exposed to financial and |
We focus on consistently delivering high-quality |
Low | |
Quality and |
Our reputation depends on maintaining the |
To mitigate quality and safety risks, we maintain a |
Low | |
Personnel Risk |
We operate in a highly competitive talent |
To address this risk, we maintain a structured |
Medium | |
HUMAN RESOURCE MANAGEMENT
At HFL, we believe our employees are central to our
success. We are committed to building a future-ready
workforce through an agile and forward-looking talent
strategy that enables us to attract, develop, and retain high-
calibre professionals, while fostering a supportive, inclusive,
and growth-oriented work environment. Through active
monitoring of our employee engagement, we continue
to enhance productivity and strengthen organisational
performance.
We invest in continuous learning and development through
year-round training programmes focused on health, safety,
and skill enhancement. By prioritising career development,
employee well-being, empowerment, and inclusivity, we
create a positive employee experience while strengthening
organisational resilience. We further maintain stringent
safety standards across all our operational sites and work
closely with regulatory authorities to ensure compliance
and prevent workplace incidents.
As of March 31, 2026, our workforce comprised 1,646
employees.
During FY 2025-2026, we implemented several initiatives
to strengthen organisational capabilities, expand our
workforce, and enhance regulatory compliance, thereby
supporting the continued growth of our operations.
Organisational Development and Leadership
Strengthening
- Introduced structural changes to enhance
accountability and execution at the business unit level
as the Company scaled
- Appointed dedicated Business Heads for the OTC
Pharma, Ice Cream, and Food & Beverages segments,
along with a President for Food & Beverages, to
strengthen focused leadership
- Established an International Business Division, led by
an experienced industry professional, to expand global
sourcing capabilities and accelerate export growth
Workforce Expansion and Capability Building
- Supported significant hiring requirements through
new manufacturing facilities, including plans to recruit
around 500 employees for the Panipat ice cream plant
- Invested heavily in training and skill development
programmes within the footwear business, particularly
at our South facility, to improve workforce productivity
and meet stringent international quality standards
- Supported operational excellence through dedicated
teams focused on automation, Kaizen practices, and
Six Sigma methodologies to improve efficiency and
competitiveness
Compliance and Regulatory Preparedness
- Recognised a one-time provision of Rs. 4.57 Cr related
to the implementation of the New Labour Code,
forming part of the years exceptional expenses
- Maintained a strong focus on operational discipline
across our manufacturing network by ensuring
workplace safety, regulatory compliance, and timely
approvals while commissioning new production lines
and facilities
CORPORATE SOCIAL RESPONSIBILITY (CSR)
We remain committed to advancing the highest standards
of ethical, inclusive, and sustainable business practices
in line with our Corporate Social Responsibility (CSR)
philosophy We believe that social responsibility and
environmental stewardship are integral to our long-term
growth strategy. By embedding innovation into our CSR
initiatives and aligning them with our business operations,
we continue to create meaningful impact and contribute
towards building a stronger, more resilient society.
Our CSR initiatives are centred around creating
meaningful and sustainable impact across key areas,
including education, healthcare, sanitation, environmental
sustainability, sports development, and the promotion of
arts and culture. Through these initiatives, we continue to
support underserved communities by improving access
to education, strengthening public infrastructure, and
supporting critical healthcare needs.
As part of our commitment to education, we are enhancing
learning environments in government schools by providing
educational resources, including books, uniforms, laptops,
desks, and sports equipment. We are also helping to create
safer and more inclusive spaces through initiatives that
improve access to safe drinking water, install water facilities,
and introduce solar-powered streetlights. Together, these
efforts are fostering safer, more functional, and conducive
surroundings for students and local communities.
Looking ahead, we remain focused on empowering the
girl child through interventions that promote education,
menstrual hygiene awareness, and overall well-being. In
healthcare, we continue to support life-changing medical
assistance through initiatives covering cancer treatment,
cataract surgeries, and the distribution of prosthetic limbs
and mobility aids to differently abled and economically
disadvantaged individuals.
These sustained efforts reflect our commitment to
fostering inclusive growth, enhancing quality of life, and
creating lasting social impact across the communities we
serve.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
A strong internal control environment is fundamental
to protecting stakeholder interests, ensuring regulatory
compliance, and supporting long-term value creation.
The Board of Directors has established a comprehensive
Internal Financial Controls (IFC) framework in accordance
with the requirements of Section 134(5)(e) of the Companies
Act, 2015. Designed to reflect the Companys size,
complexity, and operational requirements, the framework
provides a structured approach to strengthening risk
management and governance.
The Company recognises that the IFC framework must
continuously evolve with changing business models,
technological advancements, competitive dynamics,
industry practices, regulatory requirements, and broader
economic conditions. Accordingly, we regularly review
and refine our control environment to ensure continued
relevance and effectiveness.
As the business grows and diversifies, potential control gaps
may emerge. To address these proactively, the Company
follows a systematic process to identify, evaluate, and
mitigate such gaps in a timely manner. Where required, we
implement additional or enhanced controls to strengthen
the overall control framework and ensure effective
management of material risks.
CAUTIONARY STATEMENT
This document contains statements about expected future
events and financials of the Company, which are forward
looking. By their nature, forward-looking statements
require the Company to make assumptions and are
subject to inherent risks and uncertainties. There is a
significant risk that the assumptions, predictions, and other
forward-looking statements may not prove to be accurate.
Readers are cautioned not to place undue reliance on
forward-looking statements as several factors could cause
assumptions, actual future results, and events to differ
materially from those expressed in the forward-looking
statements. Accordingly, this document is subject to the
disclaimer and qualified in its entirety by the assumptions,
qualifications, and risk factors referred to in this section of
the Annual Report.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
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IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132 (Member ID - NSE: 10975 BSE: 179 MCX: 55995 NCDEX: 01249), DP SEBI Reg. No. IN-DP-185-2016, IA SEBI Regn. No: INA000000623, Merchant Banker SEBI Regn. No. INM000010940, RA SEBI Regn. No: INH000000248, BSE Enlistment Number (RA): 5016, AMFI-Registered Mutual Fund Distributor & SIF Distributor
ARN NO : 47791 (Date of initial registration – 17/02/2007; Current validity of ARN – 08/02/2027), PFRDA Reg. No. PoP 20092018, IRDAI Corporate Agent (Composite) : CA1099
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.
