Leo Dryfruits & Spices Trading Ltd Management Discussions

1. Macro-Economic Overview

1.2 Indian Economy Overview

Indias economy continued to demonstrate resilience during FY 2025-26, with real GDP estimated to have grown by 7.6% supported by strong domestic demand, sustained investment, and improving macroeconomic conditions. Private consumption remained a key driver of activity, supported by moderating inflation, stable employment, and improving purchasing power. Agriculture and allied activities also provided support to rural demand, while favourable foodgrain and horticulture output contributed to overall economic stability. The Government continued to reinforce growth through infrastructure development and policy support, with ?12.2 lakh crore allocated towards capital expenditure for FY 2026-27. Meanwhile, Indias growing integration with global markets was reflected in record exports of USD 863.1 billion during FY 2025-26, underscoring the broadening base of domestic and external economic activity.

Indian Economy GDP Growth Rate (in %)

Year	FY 2021-22	FY 2022-23	FY 2023-24	FY 2024-25	FY 2025-26
GDP Growth Rate	8.7	7.0	8.2	6.5	7.7

Source: MoSPI Provisional Estimates FY2025-26

Indian FMCG Industry

Indias FMCG industry continues to evolve across both consumption patterns and distribution channels. According to NielsenIQ, FMCG value growth stood at 7.8% year-on-year in OND 2025, while rural markets continued to outperform urban markets in volume growth for the eighth consecutive quarter. Modern trade recorded a threefold acceleration over the preceding quarter, while e-commerce accounted for 18% of FMCG sales across the top eight metros. Quick commerce contributed more than three-fourths of e-commerce FMCG sales, highlighting its increasing relevance to the sector.

The changing channel landscape is creating opportunities for emerging and regional brands alongside established players. General trade continues to provide extensive reach, while modern trade, e-commerce and quick commerce are enabling greater product visibility, consumer trial and faster replenishment. The continued momentum of smaller manufacturers also indicates opportunities for agile companies with differentiated offerings and focused distribution strategies.

Key Trends

Continued growth in branded consumption

Rural demand remaining an important volume driver

Rapid growth of e-commerce and quick commerce

Increasing adoption of smaller and accessible pack formats

Premiumisation across selected categories

Growing relevance of regional and local brands

Digital-led product discovery

Indian Food Processing Industry

Indias food processing sector is entering a valued growth phase, driven by evolving consumer preferences, urbanisation, rising aspirations and the increasing demand for convenient, differentiated and higher-value food products. The latest Deloitte-FICCI report estimates a USD 600 billion opportunity by 2030, highlighting the sectors expanding role in Indias consumption economy. Growth is increasingly moving beyond basic processing towards branded, value-added and consumer-focused products, supported by digital channels, innovation, stronger supply chains and rising opportunities in domestic as well as export markets.

Key Industry Trends

Value-led growth:  Increasing focus on value addition, branded products and differentiated offerings.

Premiumisation:  Rising consumer willingness to pay for quality, nutrition, convenience and superior experiences.

Convenience-led consumption:  Changing lifestyles are driving demand for ready-to-cook, ready-to-eat and easy-to-prepare products.

Quick-commerce expansion:  Quick commerce is becoming an important channel for product discovery, trial and premiumisation.

Digital-first launches:  Around 60-70% of new food products are being launched through quick commerce and e-commerce before wider retail expansion.

Omnichannel retail:  Online channels are expected to account for 25-30% of food retail sales across Indias top metros by 2030.

Export opportunity:  Processed foods currently represent only around 20% of Indias food exports, indicating significant scope for further value addition and global penetration.

Supply-chain resilience:  Greater emphasis on efficient sourcing, processing, storage and distribution is shaping competitiveness.

Product innovation:  Consumer demand is encouraging greater experimentation across formats, flavours, nutrition and consumption occasions.

Indian Packaged Food Industry

Indias packaged food industry is benefiting from the gradual shift from loose and unbranded products towards packaged, standardised and branded alternatives. According to IMARC, Indias packaged food market is estimated at USD 137.25 billion in 2026, compared with USD 129.18 billion in 2025, and is projected to reach USD 238.83 billion by 2034, representing a CAGR of 6.24% during 2026-34.

The transition is being supported by urbanisation, rising disposable incomes, changing lifestyles, convenience-led consumption and improving retail infrastructure. Consumers are increasingly seeking products that offer consistent quality, hygiene, portability and ease of preparation. At the same time, the expansion of modern retail, e-commerce and quick commerce is increasing access to packaged food products beyond traditional retail channels.

Structural Shifts

Loose to packaged:  Increasing emphasis on hygiene, consistency, traceability and shelf life.

Unbranded to branded:  Greater consumer recognition of established brands and standardised quality.

Traditional to convenient:  Familiar food categories are increasingly available in ready-to-use and easy-to-prepare formats.

Offline to omnichannel:  General trade is increasingly complemented by modern retail, e-commerce and quick commerce.

Mass to segmented consumption:  Health, premiumisation, affordability and regional preferences are creating differentiated demand.

Indian Spices & Seasonings Industry

Indias spices industry continues to benefit from strong domestic consumption, its deep culinary relevance and increasing demand for packaged and value-added formats. The Indian spices market was valued at approximately ?2.22 lakh crore in 2025 and is projected to reach approximately ?5.29 lakh crore by 2034, representing a CAGR of 10.14% during 2026-34. Growth is being supported by urbanisation, demand for authentic flavours, food processing, organised retail and digital commerce.

The shift towards packaged formats represents a significant structural opportunity. Packaged products accounted for approximately 67% of the spices market in 2025, reflecting increasing preference for hygienic, standardised and convenient products. Blended spices and ready-to-use seasonings are also gaining relevance as consumers seek consistency and reduced preparation time.

Indias position in the global spices trade remains strong. During FY2025-26, India exported 17.34 lakh tonnes of spices and spice products valued at ?39,140 crore, with chilli, cumin, spice oils and oleoresins, small cardamom, mint products and turmeric among the major contributors.

Key Industry Drivers

Growth of packaged spices

Increasing adoption of blended spices and seasonings

Demand for authentic and regional flavours

Growth in food processing and HoReCa consumption

Expansion of modern retail and digital channels

Premiumisation and demand for differentiated products

Significant export potential

Indian Dry Fruits & Nuts Industry

Indias dry fruits and nuts market is gradually transitioning from a predominantly loose and traditional category towards a more organised, branded and consumption-led market. According to Wazirs 2025 assessment, the Indian dry fruits market was estimated at approximately ?67,000 crore and is expected to reach around ?1,17,000 crore by 2030. The organised segment is expected to increase its market share from approximately 13% to 18% over the same period.

Consumption is also expanding beyond traditional festive and gifting occasions. Dry fruits are increasingly being incorporated into everyday snacking, breakfast, health-oriented diets and food preparation. Greater nutritional awareness, convenient packaging and product innovation are supporting the development of new consumption occasions, while festive and corporate gifting continue to provide premium demand.

Indian Savoury Snacks & Namkeen Industry

Indias savoury snacks market remains a large and competitive category, with participation from national, regional and local brands. According to Ken Research, the market was estimated at approximately USD 6.5 billion in 2025 and is projected to grow at around 9.2% CAGR through 2031. The category encompasses packaged chips, ethnic namkeen, bhujia, extruded snacks, roasted products and other ready-to-eat savoury offerings.

Consumer preferences within the category are becoming increasingly differentiated, with affordability, regional flavours, convenience and product innovation influencing purchasing decisions. The market remains fragmented, creating opportunities for brands that can combine competitive pricing with differentiated products, effective distribution and consumer relevance.

Company Overview

Leo Dryfruits & Spices Trading Limited is a food products company engaged in the processing, packaging and distribution of spices, dry fruits, seasonings, ghee and other food products, with its operations supported by a processing facility in Navi Mumbai. Over time, the Company has expanded its presence across traditional food categories as well as convenience-led and value-oriented segments. Its business is supported by a growing distribution network spanning general trade, institutional sales, HoReCa, modern retail and digital channels. With its portfolio of brands and expanding market reach, Leo is progressively building a broader packaged-food platform while strengthening its capabilities across sourcing, processing, packaging and distribution.

SWOT Analysis

Strengths

Diversified presence across spices, dry fruits, ghee, frozen foods and savoury snacks supports a broader revenue base.

VANDU, and MUNCHIN provide differentiated offerings across traditional, convenience-led and value-oriented food categories.

Established presence across CSD, HoReCa, organised retail, e-commerce and institutional channels strengthen market access.

Integrated processing and packaging capabilities provide greater control over product quality, consistency and food safety.

ISO 9001:2015 and ISO 22000:2018 certifications reinforce the Companys quality and food-safety standards.

Weaknesses

Geographic presence remains concentrated across select states compared with larger pan-India FMCG players.

Exposure to agricultural commodities and imported dry fruits creates sensitivity to raw material prices and currency movements.

Relatively smaller operating scale compared with established FMCG companies limits purchasing and marketing leverage.

Expansion across newer categories and channels requires continued investment in distribution and brand building.

Opportunities

Rising consumption of branded, hygienic and convenient packaged foods provides scope for category and market expansion.

Rapid growth of quick commerce creates new opportunities for product discovery, trial and frequent consumption.

Expansion across CSD, IRCTC and other institutional channels can support larger and recurring order opportunities.

Growing demand for makhana, millet-based foods, savoury snacks and convenience foods support portfolio diversification.

Wider geographic penetration and potential international expansion can increase the Companys addressable market.

Entry into catering and food-service formats through the wholly owned subsidiary creates potential for additional revenue streams.

Threats

Intense competition from national, regional and emerging FMCG brands may exert pressure on pricing, distribution and margins.

Volatility in spice, dry fruit and other agricultural commodity prices can affect input costs and profitability.

Dependence on imported raw materials exposes the Company to currency movements, global supply conditions and geopolitical risks.

Changing consumer preferences require continuous product innovation and portfolio adaptation.

Evolving food safety, labelling, packaging and regulatory requirements may increase compliance complexity and costs.

Financial Overview

FY 2025-26 reflected the Companys continued focus on revenue growth, operating efficiency and business diversification. Revenue from Operations stood at ?1,742.41 lakhs in FY 2025-26, compared with ?873.11 lakhs in FY 2024-25, supported by higher sales across its core spices, dry fruits and food product categories, along with a wider distribution footprint and increasing contribution from institutional and emerging channels. EBITDA stood at ?198.52 lakhs in FY 2025-26, compared with ?148.21 lakhs in the previous year, reflecting the operating leverage from higher business volumes, improved utilisation of processing capabilities and a broader product and channel mix. Profit After Tax stood at ?105.39 lakhs in FY 2025-26, compared with ?81.64 lakhs in FY 2024-25, supported by the improvement in operating performance and the Companys continued focus on cost and operational efficiency. Overall, the financial performance reflects the Companys progress towards building scale, broadening its market presence and strengthening its position across the packaged food value chain.

Financial Overview

Particulars	FY 2024-25	FY 2025-26	Change (%)
Revenue from Operations	873.11	1,742.41	99.6%
EBITDA	148.21	198.52	34.0%
Profit After Tax	81.64	105.39	29.1%

Risk Management

The Company adopts a structured and proactive approach to identifying, assessing and mitigating key business risks, with a focus on protecting operations, strengthening resilience and supporting sustainable growth.

Key Risk	Impact	Mitigation Measures
Commodity Price Volatility	Dependence on imported dry fruits exposes the Company to fluctuations in global commodity prices, import duties and foreign exchange movements, which may impact input costs and margins.	Diversification of sourcing across geographies, strategic procurement, evaluation of long-term supply arrangements and increasing focus on relatively less import-dependent categories such as spices and namkeen.
Competitive Pressures	Intense competition from established FMCG brands and regional players may impact pricing, market share, brand visibility and margins.	Continued focus on brand building, consistent product quality, ISO-certified processes, product innovation across brands and expansion into new markets and distribution channels.
Supply Chain Complexities	Disruptions in sourcing, transportation, storage and distribution could affect product availability, delivery timelines and product freshness.	Strengthening supply-chain infrastructure and processes, improving inventory and logistics management, and leveraging technology to enhance operational efficiency and supply-chain visibility.

Internal Control System, Adequacy and Compliance

The Company has established a structured internal control framework to support operational efficiency, reliable financial reporting and compliance with applicable laws and regulations. The framework is designed to provide reasonable assurance over the orderly conduct of business, safeguarding of assets and accuracy of financial information. Key elements include a defined control environment, periodic risk assessment and control activities covering authorisation, verification and segregation of duties. The internal audit function periodically reviews the effectiveness of these controls and identifies areas for improvement. Audit observations and recommendations are placed before the Audit Committee for review and appropriate action, enabling continuous oversight and strengthening of the Companys internal control environment.

Human Resources

The Company recognises its employees as an important enabler of its growth and operational performance. It seeks to foster a collaborative, inclusive and performance-oriented work environment that supports employee engagement, capability building and professional development. The Company focuses on strengthening functional capabilities through continuous learning and development, while encouraging employees to contribute towards its operational and strategic priorities. As of 31 March 2026, the Company had [ ] permanent employees across various functions and levels, supporting its operations and growth initiatives.

Cautionary Statement

This Annual Report may contain forward-looking statements relating to the Companys objectives, plans, expectations, estimates and future performance. Such statements are based on managements current assumptions, expectations and available information and are subject to various risks and uncertainties. Factors including changes in economic and political conditions, foreign exchange movements, regulatory developments, industry dynamics and other external factors may cause actual results and outcomes to differ materially from those expressed or implied in such statements. The Company does not undertake any obligation to publicly update or revise these forward-looking statements in response to subsequent developments or events.