Jhandewalas Foods Ltd Management Discussions

A. THE INDUSTRY:

There has been a sea change in the Indian culinary and food retail sectors, especially after the pandemic. Even though it s mostly an unorganized industry, retail sales in India contribute around 10% to the GDP. Moreover, the food and Indian grocery market size is the most significant today, with 63% of the total retail market. The food retail business in India is booming, and it s a multi-faceted industry that includes processors, distributors, retailers, and culinary service providers. While modern retailers have been steadily expanding their market share, especially in major cities, traditional merchants such as Kirana stores or local stores have steadily declined. However, they still make up more than 95% of India s food stores. According to the IMARC report, the global dairy industry is projected to register a CAGR of 5.79% during the forecast period (2023 to 2028).Milk production in the European Union, the second largest milk producer, is projected to at a slower pace when compared to the world average. Despite a slight surge in domestic milk production compared to the previous decade, China is anticipated to remain the world s largest importer of milk products. Moreover, population growth has raised the demand for livestock products and is a primary factor in increasing the import of dairy products to Asian countries. In the next decade, the world s per capita consumption of fresh dairy products is expected to grow by 1.4%per annum, slightly faster than the last decade due to higher per capita income growth.

With the advent of modern retail formats, such as supermarkets and e-commerce platforms, consumers buying patterns have evolved. Along with this, consumers are preferring packaged ghee over loose ghee for reasons such as assurance of quality, hygiene, longer shelf-life, and convenience. Therefore, it is significantly supporting the market. In addition, packaged ghee manufacturers often maintain stringent quality checks to ensure that the products are free from adulteration and meet the specified standards, providing an edge over loose ghee. This shift in consumer preference towards packaged ghee, driven by the promise of quality and convenience, is fuelling the growth of the ghee industry in India. The global ghee market size reached US$ 52.6 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 90.5 Billion by 2032, exhibiting a growth rate (CAGR) of 6% during 2024-2032. The escalating health consciousness, surging demand for natural and organic products, cultural and traditional uses, increasing usage for culinary purposes, growth in the dairy industry, and rising disposable incomes are some of the key factors influencing the market growth.

Report Attribute	Key Statistics
Base Year	2025
Forecast Years	2026-2032
Historical Years	2018-2025
Market Size in 2025	US$ 52.6 Billion
Market Forecast in 2032	US$ 90.5 Billion
Market Growth Rate 2026-2032	6%

Understanding the market

Any business that sells food to the general public is considered part of the food retail industry. Supermarkets, hypermarkets, grocery shops, convenience stores and specialty shops, some of which are part of larger retail networks and others of which operate independently, make up most of today s retail commerce. As we know, food and grocery stores dominate India s retail landscape and are likely to expand because of the growing trend of premiumisation and processed food products. Many factors have contributed to the changes in the grocery industry as a result of the pandemic s uncertainty, including: Adoption of digital technologies: India has had one of the fastest rates of digital usage in the world.

Nearly 880 million people are online and 9,192 crore worth of deals were made digitally in 2022-23. Inventiveness: New start-ups have emerged from digitalisation, and have customised their business strategies to fit the Indian market. Direct-to-consumer transactions: A game-changer in the retail industry that is changing the game for Indian consumers. Online grocery shopping has been growing since the e-commerce boom in India. With an estimated $2-3 billion in 2020 and a predicted $10-12 billion by 2026, the Indian e-grocery business has had a compound annual growth rate (CAGR) of more than 50%. Retail food and gourmet are projected to rank among the top direct-to-consumer segments by 2027. In 2023, the online grocery store industry in India was worth more than 669 billion rupees. However, the online grocery market in India accounts for less than 1% of the market, while stores make up over 4%.

Government Initiatives

The Government of India aims to boost growth in the food processing sector by leveraging reforms such as 100 percent foreign direct investment (FDI) in marketing of food products and various incentives at central and state government levels along with a strong focus on supply chain infrastructure. Considering the fact that the development of food industry benefits the most interiors of the country by giving boost to the agricultural sector, the government initiatives to promote the industry is assured.

B. SWOTANALYSIS:

Strengths

Abundant availability of diverse types of raw material and varied agro-climatic zones. Leading producer of various agricultural commodities such as milk, fruits and vegetables, marine products, etc.

Priority sector status for agro-processing given by the central Government Growing domestic market

Proximity to growing international markets like Gulf, Middle East etc. with a sea route.

Weaknesses

Lack of adequate infrastructural facilities, viz., Power, Road & Rail connectivity, Storage, etc Large number of intermediaries in the supply chain leading to wastage and price rise at each level.

Capital intensive - High requirement of working capital because of the seasonal nature of raw material.

Lack of established linkages between R&D labs and the industry.

Opportunities

Diversification into cultivation of high value agricultural crops by the farmers Setting up of Special Economic Zones (SEZs), Agri- Export Zones (AEZs) and mega food parks for providing the needed infrastructure for small scale units. Rising income levels and changing consumption patterns of Indian population. Emerging scope for functional foods, geriatric foods, low fat foods, etc. Rationalization of food laws and enabling policies of GOI & State Governments for development of the sector. Increased demand for ethnic food in most of the countries due to increased NRI population in those countries.

Threats

Preferences for fresh food than chilled or frozen. Competition from other countries/players

No barriers to entry leading to emergence new competitors both at local and national level Big Competitors - few famous brands also aligned with product portfolio

Challenges being faced: i. Huge investments in setting up distribution network and promoting brands:

With our future growth strategy of expanding our product range and customer and geographical reach, we need to invest in setting up a strong distribution network. Brand is an important variable which influences the buying decision of a customer, especially in packaged food industry. Though we are an established Brand, we need to make substantial investments towards our brand building and thus further strengthen the brand recognition and preference of the customers. ii. Spending on advertisements is aggressive:

Spending on advertisements and promotional activities need to be quite aggressive in the FMCG/ packaged food industry which is characterized as quite competitive in India. iii. Inadequate Infrastructure Facilities:

Development of processed food industry is dependent on infrastructure facilities like storage and transportation. Our country still needs to develop such primary facilities a lot.

RISK & CONCERNS:

To sustain and grow in global market one must be ready for some level of uncertainty. Greater the uncertainty, higher the risk. The risk management function is integral to the Company and its objectives include ensuring that critical risks are identified, continuously monitored and managed effectively in order to protect the Company s business. The Company operates in an environment which is affected by various factors some of which are Controllable while some are outside the control of the company. The Company proactively takes reasonable steps to identify and monitor the risk and makes efforts to mitigate significant risks that may affect it. Some of the risks that are potentially significant in nature and need careful monitoring are listed here under: i. Procurement Risk: Adequate and uninterrupted availability of key raw materials at the right prices is crucial for the Company. Our raw materials are agri and allied natural products thus production of our products depends on the vagaries of nature. Therefore, any disruption in the supply due to a natural or other calamity or violent changes in the cost structure could adversely affect the Company s ability to reach its consumers with the right value proposition.

ii. Competition from existing Brands: The Branded segment of food industry in India is witnessed by strong hold of a few multinational as well as Indian majors with deep pockets. Their Heavy investment on network and Brand strengthening or any probability of price war poses risk to our company. However ours are established brands and enjoy customer loyalty on account of long history of consistently delivering quality products at reasonable price.

iii. Competition from unorganized sector: Another characteristic of this industry is the presence of unorganized sector offering products in loose/ unbranded form which intensifies competition. The Company has strengthen its distribution channel and has invested significantly in making the brand stronger which helps differentiate their product. iv. Policy risk: Any sudden change in food security policy and other regulations may hit the profit margins badly. The Company abides by food security policies published by the government to ensure safety as per food quality standards. The products are moved through adequate quality checking procedures.

C. SEGMENT WISE- PRODUCT WISE PERFORMANCE

The Company is engaged in one business segment i.e. manufacturing of food products like different types of ghees, Chai Masala, Spice Mixes, Poha Masala, Company is also engaged in the marketing of Saffron, Poha, Pasta, Quinoa Pasta, Groundnut Oil, Papad, A2 Ghee. Hence, accordingly there is only single reportable segment. The ghee market in India size reached INR 3,482 Billion in 2026. Looking forward, IMARC Group expects the market to reach INR 6,931 Billion by 2032, exhibiting a growth rate (CAGR) of 8.72% during 2026-2032. The growing consumption of ghee among the masses, the escalating shift towards organic food products due to the rising health consciousness and rapidly growing the e-commerce sector are among the key factors driving the market growth. The rising food services sector in India has significantly contributed to the growth of the ghee industry. Ghee is an integral part of various Indian dishes, and its use in restaurants, hotels, and other foodservice outlets has increased exponentially. Along with this, the exploration of fusion cuisine has led to the creative application of ghee in non-traditional dishes, thereby expanding its usage and popularity. As the food service industry continues to grow, so too will the demand for ghee. In addition, the shift towards organic food products has been a prominent trend in recent years. Consumers are increasingly seeking out organic ghee due to perceived health benefits and environmentally friendly production processes. Organic ghee is free from pesticides and other harmful chemicals, and its production supports sustainable farming practices. The rise in consumer awareness about these benefits, along with the expansion of retail channels selling organic products, is a major driver for the growth of the organic ghee segment in India.

D. OUTLOOK

The Indian economy continues to demonstrate resilience supported by strong domestic consumption, increasing urbanization, rising disposable income and structural reforms. The FMCG and food processing sectors are expected to remain key growth drivers due to evolving consumer preferences and increasing demand for quality packaged food products.

The Company believes that the shift from unbranded and loose products towards branded packaged food will continue to create growth opportunities. Consumers are increasingly seeking products offering quality assurance, hygiene, convenience and value, which supports the expansion of organized players in the food industry.

The increasing penetration of modern retail, e-commerce platforms and digital marketplaces is expected to provide additional avenues for business expansion. The Company intends to leverage these opportunities by strengthening its product portfolio, enhancing distribution capabilities and improving consumer engagement.

The Company remains focused on sustainable growth by balancing expansion initiatives with operational efficiency, cost optimization and continuous improvement in product quality.

E. THE WAY FORWARD

With the increasing demand of packaged food, the industry is set to grow. We are leveraging on the growing opportunities and have started our journey to transform our self from a Ghee company to a food conglomerate. Also we need to prepare our self to face the growing competition in the industry. i. Product Expansion: We manufacture and market our products under the brands: Naman, Godhenu, Nutri Flakes, Sweet Bites, Yumm Yoo, Polki. Our product portfolio includes Buffalo Ghee, Cow Ghee, A2 Gir Cow Ghee, Premium Buffalo Ghee, Kesar ( Saffron ), Poha ( Flattened rice ), Mangodi, Papad, Refined Groundnut Oil, Pasta, Varieties of Chutney, Chai ( Tea ) Masala and Poha Masala, Indian Spices, Chilla Pre Mix, Rava Idli Mix and many more. ii. Market Expansion: We are expanding our footprints by venturing into new markets. The Company over the last few years has created a market leadership position for itself in branded ghee segment in Rajasthan and making its presence in Hyderabad, Jammu & Kashmir, Madhya Pradesh, Uttarakhand and gradually opening in Delhi, Haryana, Maharashtra, Gujarat, West Bengal and Bangalore. On a regular basis we organize marketing and promotional activities line Participation in trade fairs, distributors and caterers meet, hoardings and print media advertisements, canopies etc. We have also associated our self with online market places. We are also increasing our institutional sales by associating our self with corporate clients; Haldiram s, Ghasitaram s, Baidyanath, Bikaji, Bhika Ram Chandmal, Prashant Corner, Dabur, Om sweets, Bikano, Dadu s Sweet.

iii. Brand continuestoinvestinbrand building initiatives, customer awareness programs and marketing Development: Brand recognition plays a critical role in the FMCG sector. The Company

The Company intends to enhance brand visibility through: Digital marketing initiatives Retail promotions Consumer engagement activities Product awareness campaigns

iv. Stronger Distribution Channel: We have a strong distribution team, with a network of about 50,000 retailers and have a vast network of 550 distributors all over India. We continuously engage with them and make our relationship stronger. We on a regular basis organize events like Distributors meet, recognition of performing distributors. v. Diversified sales platforms: The Company is focusing on increasing its presence across multiple sales channels including: General trade Modern retail Institutional sales E-commerce platforms Direct consumer channels This diversified approach helps the Company improve customer reach and reduce dependency on any single channel.

vi. Stronger management team: Our management team is a mix of experience and youth energy. We are continuously enriching our self with qualified and experienced management team and workforce.

F. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY/ CORPORATEGOVERNANCE :

The Company maintains a robust internal control framework designed to ensure operational efficiency, reliability of financial reporting, compliance with applicable laws and safeguarding of assets. The internal control system is supported by well-defined policies, procedures, authorization mechanisms and monitoring systems appropriate to the size and complexity of the Company s operations. The Company has implemented adequate systems to: Ensure accuracy and reliability of financial information Maintain proper accounting records Protect assets against unauthorized use Prevent and detect errors and irregularities Ensure compliance with applicable statutory requirements

The internal audit function periodically reviews business processes, operational controls and financial systems. The observations and recommendations of internal auditors are reviewed by the management and presented before the Audit Committee for consideration and necessary action. The Audit Committee regularly reviews the effectiveness of internal control systems and monitors implementation of corrective measures. The Company continues to strengthen its internal processes through technology adoption, process improvement and enhanced monitoring mechanisms.

G. DISCUSSION ON FINANCIAL PERFORMANCE

Lookingahead,we will continueto invest in technology and enhance our digital platforms and marketing strategies. We are well-positioned to capture future growth, improve margins, and maintain operating leverage. Our commitment to balancing growth, investment, and quarterly dividends aims to create sustainable value for our stakeholders. FY 2025-26 presented challenges of moderating consumer demand in an inflationary environment. Viewing this as an opportunity, we leveraged our strengths and delivered a robust operational and financial performance. In the financial year 2025-26, the revenue from operations of the company has increased from Rs. 17583.10 lakhs to Rs. 8664.08 lakhs. Throughout the year, we focused on expanding our customer base, capitalizing on our diverse portfolio, and leveraging our brands presence. Despite challenges, we gained market share and continued to fortify our growth levers, aiming to create a stronger and more sustainable future. volatilityThe FMCG sector remained competitive due to changing consumer behavior, raw material price and increased marketing requirements. Despite these challenges, the Company remained focused on sustainable growth and long-term value creation. margins, optimizing costs and creating sustainable value for shareholders.Going forward, the Company will continue to focus on improving operational performance, enhancing Theestablished market presence will support future growth opportunities.Company believes that its strong product portfolio, experienced management team and

H. HUMAN RESOURCES MANAGEMENT

Human resources remain a key pillar of the Company s growth and operational success. The Company believes that motivated, skilled and committed employees are essential for achieving long-term objectives. The Company continues to focus on developing a productive and inclusive workplace through: Employee development initiatives Skill enhancement and training programs Performance-oriented culture

Employee engagement activities Safe and healthy working environment

The Company promotes a culture of teamwork, transparency and continuous improvement.

The management continues to strengthen its workforce by attracting, developing and retaining talent across various functions including manufacturing, sales, marketing, finance and operations. The Company recognizes employee contribution towards achieving business objectives and remains committed to creating opportunities for professional growth and development.

Cautionary statement

Statements in this Management Discussion and Analysis Report describing the Company s objectives, expectations, estimates, projections or future plans may constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to various factors including changes in economic conditions, market demand, raw material prices, competition, government policies, regulatory changes, taxation policies and other business risks. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements based on subsequent developments, except as required under applicable laws. The readers are advised to consider the above factors and uncertainties while evaluating the Company s future prospects.