Madhusudan Masala Ltd Management Discussions

# The Indian spices market reached INR 2,00,643.7 Crores (approx. USD 24 billion] in 2024 and is projected to grow at a CAGR of 10.56% to reach INR 5,13,253.9 Crores (approx. USD 62 billion] by 2033.

* In USD terms, the market is expected to grow from US$ 8.41 billion in 2024 to US$ 17.04 billion by

billion by 2033, reflecting a robust CAGR of 8.16% during 2025-2033.

• Spices production in India was estimated at 12 million metric tonnes in FY24, up from 11.14 million tonnes in FY23, indicating steady year-on- year growth.

Key Growth Drivers

• Rising Domestic and Global Demand: Increasing consumption in the food and beverage sector, internationalization of Indian cuisine, and a growing preference for authentic flavors are fueling demand.

• Health and Wellness Trends: Spices are valued for their medicinal properties, including antiinflammatory, antioxidant, and antimicrobial effects, driving usage in both culinary and therapeutic applications.

• Government Support: Initiatives such as "One District, One Product" and efforts to secure Geographical Indication (GI) tags for regional spices are strengthening the sectors global competitiveness.

• Innovation and Value Addition: The market is witnessing a surge in value-added products·such as blended masalas, spice powders, oleoresins, and oils·catering to evolving consumer preferences for convenience and health.

Key recent developments:

• Export Growth: India exported spices worth USD 4.46 billion in FY 2023-24, aiming to double to USD 10 billion by 2030. Demand is driven by global appetite for Indian cuisine and health-based spices like turmeric and ginger.

• Value Addition Push: Only ~48% of Indias spice exports are value-added. Government initiatives are pushing for more processed and blended products rather than raw spice exports.

• Consumer Trends: Rising demand for ready-to-use spice blends, smaller packs (^5-^10), and healthconscious products is fueling innovation in packaging and formulations.

• Tech & Infrastructure: Investments in cold storage, automation, and e-commerce are helping organized players scale. Govt-backed Spices Parks offer shared processing facilities.

The Indian spices and masala industry is poised for sustained high growth, underpinned by:

• Continued expansion in domestic consumption and the food processing sector.

• Increasing penetration of Indian spices in global markets, supported by government initiatives and industry modernization.

• Rising demand for organic, health-oriented, and ready-to-use spice blends.

• Ongoing product innovation and diversification to cater to evolving culinary trends.

Incentives Provided by the Government of India for the Spices Sector

The Government of India has implemented a comprehensive set of incentives and support measures to promote the growth, value addition, and export of spices and masalas. Key incentives and schemes include:

• SPICED Scheme (Sustainability in Spice Sector through Progressive, Innovative and Collaborative Interventions for Export Development):

• Approved for implementation up to 2025-26, this scheme aims to expand the area and productivity of key spices (such as cardamom), improve post-harvest quality, promote export of value-added spices, ensure compliance with international quality standards, and build capacity among stakeholders.

• Financial assistance is available for exporters, farmers, and FPOs under various export development and promotion programs, with applications processed online.

• Reduced Value Addition Requirement for Export-Oriented Units (EOUs):

• As of June 2024, the Ministry of Commerce and Industry has reduced the value addition requirement for processed goods manufactured from imported spices. This liberalization makes it easier for EOUs to export processed spices, enhancing their competitiveness in global markets.

• Spices Board Support

oThe Spices Board of India provides financial incentives for market research, participation in trade fairs, and export promotion activities. It also supports exporters in meeting international quality standards and accessing new markets.

• Spices Parks and Infrastructure Development

The government has established eight crop- specific Spices Parks across India, offering common processing facilities (cleaning, sorting, grading, grinding, oil extraction, and packaging] to benefit farmers, exporters, and FPOs. These parks also provide plots for setting up private processing units, fostering value addition and employment generation.

These incentives collectively aim to boost the competitiveness, quality, and export potential of the Indian spices industry, ensuring sustainable growth and global leadership.

• One District One Product (ODOP) Scheme

One District One Product (ODOP] initiative is aimed at fostering balanced regional development across all districts of the country. The initiative aims to select, brand, and promote at least One Product from each District (One District - One Product] of the country for enabling holistic socioeconomic growth across all regions. The ODOP Initiative has identified a total of 1102 products from 761 districts across the country. The scheme supports rural entrepreneurship,

infrastructure development, and agri-export promotion, particularly for spices like cardamom, pepper, and turmeric.

• Other Export Promotion Initiatives

The government regularly organizes capacitybuilding and skill development programs, offers assistance for compliance with international standards, and provides funding for innovation and technology adoption in the spice sector.

1. Rising Demand for Packaged Spices

Increasing urbanization, busy lifestyles, and preference for hygienic, ready-to-use food products are driving demand for branded and packaged spices, especially in tier-2 and tier-3 cities.

2. Expansion of Distribution Network

Madhusudan Masala can further grow by expanding into untapped regions within India and exploring export markets through aggressive distribution partnerships and online platforms.

3. Value-Added Product Portfolio

Growing consumer interest in blended masalas, instant mixes, and health-oriented products (e.g., turmeric, cumin, ginger) presents scope for innovation and premiumization.

4. Government Support & Policy Incentives

Initiatives by Spices Board of India, PMFME (Pradhan Mantri Formalisation of Micro Food Processing Enterprises), and PLI schemes for food processing are favorable for organized players investing in quality, branding, and capacity expansion.

5. Technological Upgradation & Automation

Use of modern cleaning, grading, blending, and packaging technologies can help improve efficiency, consistency, and shelf life·boosting margins and market trust.

1. Raw Material Price Volatility

Fluctuations in prices of key spices due to climate change, crop failure, or export demand can impact input costs and gross margins.

2. Rising Regulatory Scrutiny

Increasing domestic and global checks (e.g. ETO contamination alerts) can affect exports and require strict compliance in manufacturing, testing, and labeling.

3. High Industry Competition

The spice industry faces intense competition from regional brands, large FMCG players (e.g., ITC, Tata, Everest, MDFI), and unorganized local producers, pressuring market share and pricing.

4. Working Capital Requirements

The business is working-capital-intensive, with high inventory and receivable cycles, which may affect liquidity, especially in a high-interest rate environment.

5.Supply Chain Disruptions

Dependence on agricultural supply chains makes the company vulnerable to monsoon failure, transport strikes, and commodity shortages.

Our Business

Madhusudan Masala Limited (“the Company” or “MML”] is a leading manufacturer and processor of spices and food products in India, with a legacy spanning over four decades. Renowned for its unwavering commitment to quality, innovation, and customer satisfaction, MML has established itself as a trusted name in the Indian spices industry. The Companys diversified product portfolio, robust manufacturing capabilities, and extensive distribution network have positioned it as a prominent player in both regional and national markets. Founded in 1982 by Mr. Dayalji Vanravan Kotecha and Mr. Vijaykumar Vanravan Kotecha, the company has grown into a respected brand, now led by the next generation, Mr. Rishit Dayalji Kotecha and Mr. Hiren Vijaykumar Kotecha, with extensive industry experience. The promoters of Madhusudan Masala Limited are distinguished industry professionals with decades of experience in the spices and food processing sector. Their visionary leadership has been instrumental in shaping the Companys growth trajectory and establishing its reputation for quality and innovation. They bring deep expertise in product development, manufacturing excellence, supply chain management, and strategic expansion. Under their stewardship, Madhusudan Masala Limited has evolved from a regional enterprise into a prominent player with a pan-India presence, consistently upholding the highest standards of corporate governance and ethical business practices. The promoters remain actively involved in the Companys operations, ensuring a strong alignment between long-term vision and day-to-day execution.

Product Portfolio

MML offers an extensive range of over 32 varieties of spices across more than 500 SKUs, marketed under four well-established brands. The product line includes ground spices, blended spices, whole spices, grocery items, instant mixes, and other food products. The Companys flagship “DOUBLE HATHI” brand is particularly recognized for its 13 distinct varieties of chilli powder, catering to a wide spectrum of regional palates.

Manufacturing Capabilities

The Company operates state-of-the-art manufacturing facilities with a combined annual capacity exceeding 5,400 MT, including:

Jamnagar Unit: 4,800 MT per annum

Rajkot Unit: 600 MT per annum

All manufacturing units are FSSAI-certified and supported by in-house research and development, ensuring consistent quality, product innovation, and compliance with the highest food safety standards

Distribution Network

As of March 31, 2025, MMLs products are available through a widespread network comprising:

Over 25,000 retail grocery stores

More than 6,000 wholesalers

285+ distributors

The Company maintains a strong presence in Saurashtra, Gujarat, and Maharashtra, with a growing footprint in Chandigarh, Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand, Delhi, and Jammu & Kashmir. Strategic expansion in FY 2024-25 included the appointment of Super Stoc kists and Distributors in Maharashtra, Goa, and Telangana, further strengthening market reach.

Strategic Initiatives

In FY 2024-25, MML acquired 100% equity in Vitagreen Products Private Limited, enabling entry into new product segments and geographies. The Company also commenced operations at its newly owned cold storage facility with a capacity of 4,029 MT, enhancing its supply chain and raw material management.

Historical Milestones

• 1977: Launch of the "DOUBLE HATHI" brand, marking the Companys entry into the spices industry.

• 1980-1982: Establishment of manufacturing

operations in Hapa, Jamnagar, and registration of the “DOUBLE HATHI” trademark. Obtained AGMARK certification for quality assurance.

• 1996: Introduction of spices in polypacks (50g to lkg], improving product accessibility and shelf life.

• 2000-2003: AGMARK certification under the Agriculture Produce (Grading and Marketing] Act, 1937, and launch of the “MAHARAJA” brand.

• 2015-2018: Commissioning of a modern plant in Hapa, Jamnagar, FSSAI certification, and establishment of a multi-commodity cold storage facility.

• 2021: Transition to a private limited company as “Madhusudan Masala Private Limited.”

• 2023: Conversion to a public limited company and successful listing on the NSE SME Platform on September 27, 2023.

• 2024: Acquisition of Vitagreen Products Pvt. Ltd. and expansion of distribution and storage infrastructure.

Missions 8 Visions

Mission:

To deliver high-quality food products that meet the highest standards,

To offer cost-effective solutions for our customers, and

To expand the availability of our products, ensuring they reach a wider and more diverse customer base across regions.

Vision:

To emerge as a leading pan-India brand in the C-T-C (Chili, Turmeric, Coriander] spices segment,

leveraging expertise in quality spices and regional market insights,

To capture 1% of the Indian spices market through consistent quality, innovation, and distribution excellence.

Segmeiaft-wise or Prodwct-wisc

Performance

During the financial year 2024-25, Madhusudan Masala Limited continued to deliver steady performance across its core product categories, driven by consistent demand, an established brand presence, and a wide-reaching distribution network. Operating primarily under its flagship brand “Double Hathi”, the Company serves markets with a diverse portfolio of spice products.

The key product segments and their indicative contribution to revenue (based on FY 2024-25 financial data] are as follows:

1. Blended Spices (Masala Powders]

Under this vertical, we make 13 types of Masalafs] and each blend has been formulated with the intent to impart the genuine taste to various Indian food preparations along with desired flavor and aroma. Our ability to continuously upgrade our product range to address shift in customer preferences, just in time inventory availability and changes in demand has helped us to maintain the diversified product portfolio. We grind and blend spices at our manufacturing facility. Blended spices are the mixture of spices that is required to make a dish in its most authentic form. We are equipped with plant and machinery which enables processing, grading and packaging of manufactured spices all in a hygienic way. In 2023-24 the revenue from sale of this segment was 163.27 lakhs which is 779.99 lakhs in 2024-25.

2. Ground Spices (Straight Spices]

Accounting for approximately 23.46% of the Companys revenue, this segment includes staples like Turmeric Powder, Red Chilli Powder, Cumin Powder and Coriander

Powder. These products are essential to Indian cooking and benefit from year-round demand across both retail and institutional channels. The Company ensures high product quality through careful sourcing from major spice-growing regions and advanced processing techniques. In 2023-24 the revenue from sale of this segment was 4585.19 lakhs which is 5459.56 lacks in 2024-25.

3. Whole Spices

Whole spices contribute 26.80% of overall revenue. Key products in this segment include Dry Whole Chili, Cumin Seeds, Coriander seeds, Mustard Seeds, Sesam, Fennel, Fenugreek, Mustard. The segment has witnessed growing demand from health-conscious consumers and Hotel/Restaurant/Catering sector, with increasing preference for unprocessed, naturally preserved ingredients. In 2023-24 the revenue from sale of this segment was 3982.27 lakhs which is 6235.69 lacks in 2024-25.

4. Other Grocery Products and Tea

This segment includes value-added offerings such as Himalayan Pink salt, Black salt, Kasuri Methi, Asafoetida (Hing], Rajgira Flour, Soya chunks, Katlu powder, Tea blends and customized spice blends for snacks and pickles. It contributes around 8.55% of total revenue. While currently a smaller portion of the portfolio, this category presents future growth potential through product innovation and line extensions. In 2023-24 the revenue from sale of this segment was 421.43 lakhs which is 1999.58 lacks in 2024-25.

Performance Highlights (FY 2024-25)

* Total Revenue: ^216.50 crore (standalone] and ^230.92 crore (consolidated]

* Major revenue contributors: Whole spices and ground spices accounted for over 50% oftotal turnover.

* Distribution Network: 285+ distributors across 7+ states in India with presence in 25000+ Retail Grocery stores

Outlook

Looking ahead, each product segment is expected to benefit from rising consumer demand for hygienic, ready-to-use, and authentic spice products. The Company aims to strengthen its performance through capacity expansion, deeper market penetration, and new product development·particularly in high-margin categories such as premium blends, organic spices, and health-oriented variants. With a strong brand legacy and expanding global reach, Madhusudan Masala Limited is well- positioned to capitalize on both domestic and international growth opportunities. We are striving to:

Develop new products that meet the needs of Customers

Improving the packaging of its products to make them more appealing to patients and to protect them from tampering. Investing in R&D to develop new products and to improve the efficacy and safety of its existing products.

Expanding its retail presence to reach more clients.

Improving its design abilities to create more appealing and effective packaging.

Improving its inventory management to ensure that it has the right products in the right place at the right time.

Fu&ure Outlook

Madhusudan Masala Limited

MML is set for strong growth, targeting a ~30% CAGR over the next 3-5 years. The Company is focusing on:

Regional Expansion: Strengthening presence in Gujarat, and expanding into Maharashtra, Goa, Telangana, and northern states like Haryana, UP, Bihar, J&K, and Jharkhand.

Product Diversification: Investing in R&D to launch new and region-specific products, including a universal C-T-C blend.

Branded Sales Growth: Increasing focus on branded spice and food product sales while enhancing brand visibility and market share.

This strategic direction aims to scale operations and reinforce Madhusudans position as a leading player in the Indian spice and food segment.

The company has been consistently taking steps to enhance its research and development units. This includes investing in new technologies, hiring top talent, and creating a culture of innovation which is evident in its growing portfolio of products and its expanding presence in the market.

We are committed in providing high-quality products to our customers. We have a rigorous quality control system in place, and we are constantly investing in new technologies to improve our manufacturing processes. We are also committed to provide our clients with excellent customer service.

Oar Competitive Strength

1. Experienced promoters and management team

41+ years of combined industry experience providing strong strategic and operational leadership.

Expertise has been key to the companys growth and market positioning

2. Strong Brand Recognition and Recent Acquisition

Established brands like "DOUBLE HAATHI" "MAHARAJA" and "MANTAVYA" trusted for quality.

Recent acquisition of Vitagreen Products and "77 GREEN" brand expands presence in organic and blended spices, tapping into growing health-conscious trends.

3. In-House Manufacturing and Capabilities

State of the art facilities for hygienic processing, grading, and packaging.

HACCP and FSSAI certifications ensure food safety and product quality

4. Diversified Product Portfolio

Offers a wide range of ground, blended spices, and essential grocery products.

Strong appeal across various consumer segments.

5. Commitment to Quality

ISO 9001:2015 and ISO 22000:2018 certifications ensure high-quality production.

Rigorous quality control across sourcing, manufacturing, and packaging.

6. Long-Term Customer Relationships

Strong network with 5700+ wholesalers and 10,000+ retailers.

Deep understanding of the Indian palate ensures strong customer loyalty.

7. Key player in the spice industry

Madhusudan Masala is a key player in the spice industry, with a well-rounded portfolio that includes the recent addition of 77 GREEN, strengthening its leadership in both traditional and health-conscious markets.

Risk Arad Concerns

1. Commodity Price & Agri Dependency Risk

Being highly dependent on agriculture-based raw materials, the Company is exposed to crop failures, unpredictable monsoons, and agri-inflation. Seasonal variations or sudden shortages can disrupt procurement planning and cost structures.

2. Changing Consumer Preferences

Consumer trends are shifting toward organic, preservative-free, low-sodium, and functional foods.

Failure to align with these expectations could result in product obsolescence and reduced shelf performance.

3. Manpower & Skill Gaps

Expansion into modern production and processing requires skilled technical manpower. Any gaps in workforce training, retention, or productivity could impact operational efficiency and product consistency.

4. Data and Cybersecurity Risk

With increasing digital transactions, distributor portals, and ERP integration, the Company is exposed to risks relating to data leaks, cyberattacks, or system failures·especially in sales and inventory management platforms.

5. Environmental and Sustainability Risks

Stringent future regulations on water use, plastic packaging, carbon emissions, and waste disposal could affect costs and compliance requirements. Customers and regulators increasingly expect eco- friendly and sustainable practices.

Internal Finance Control Systemes and Otfeer Adequacy:

The company has a comprehensive system of internal financial controls that is appropriate for its size and operations. This system ensures timely and accurate financial reporting, the safeguarding of assets, and compliance with all applicable laws and regulations. The companys internal auditors regularly review the internal financial control system to ensure its effectiveness, and any necessary changes or suggestions are incorporated into the system. The internal audit reports are also reviewed by the companys audit committee

Discussions of Financial Performance witfe Respect to Operational Performance

The key strategy will be focused around:

1. Financial strength & liquidity

2. Professional Management

3. Timely completion of Orders

4. Customer care

5. Brand Equity

Financial Performance and Review of Operations

By the efforts of our sales team in right direction and support of our channel partner, our revenue from operations increased by 33.46% in FY-25 compared to INR 16,221.98 lakhs in FY-24 while our Profit After Tax has tremendously increased by 26.84% to 1,166.59 lakhs.

The company is focusing on increase in branded sales. The total revenue from Branded Sales is increased from 56.43% in FY- 24 to 62.21% in FY-25. This is a remarkable achievement for us to increase our branded business. All this made due to hard efforts of our sales team our channel partners and our marketing agency who guide us for smart and efficient way to create brand awareness across the region.

Next Step towards success

The growth continues for in coming years also, as we are now on flying mode, we will do our best for achieving 30% [CAGR] growth in topline every year. To achieve that desired target our road map is ready. We already started flying on runway. Our small step to expand our reach in more regions, we took smart decision by acquiring similar line manufacturing company “Vitagreen product Private Limited”, as this company has sales channel spread over 7 states and good knowledgeable sales team for respected territory. Secondly, we also got ready-to-cook product portfolio and wider range of blended spice from Vitagreen. Both these positive factors will boost our top line as expected. Apart from benefits from acquisition we believe in strong relation with sales channel which we learnt from our first generation, which help us to create long term relation with channel partner. Furthermore, in we are very confident in establishing our brand in northern and western region very quickly by showing positive response of good quality and trusted brand reviews by newly added channel partners in respected regions.

Material Bevelopireerate Ira Hmreara rescmrces/Iradustrial Relaftioras

Company is committed to create an enabling corporate environment that fosters belongingness, innovation and ownership through its EVP pillars of InviTING, IgniTING, CreaTING and RespecTING. Your Company also received several awards which highlights its dedication to put employees at the forefront and create a culture that encourages and nurtures their growth.

Company continuously strives towards enhancing the well-being of its employees through initiatives focused on increasing awareness across the 4 pillars of physical, mental, financial & social well-being. Sessions focused on recognizing the need for physical activity, preventive medical care through sessions by doctors on various health related topics, medical concierge desk and several fitness related competitions & sports events. Awareness sessions on inheritance, investments, tax planning and filing of returns.

As of March 31, 2025, the company has a total staff strength of 161. This comprises 85 employees on salary and 76 employees on wages. Of the 85 salaried employees, 45 are classified as permanent employees.

For the purpose of this disclosure, permanent employees are those employees who were on the rolls of the Company as at March 31, 2025 and who had completed three months or more of continuous service as on March 31, 2025, employees on its rolls, including factory workers. The company will continue to create opportunities and ensure that it recruits diverse candidates without compromising on merit.

Key Financial Ratios

Note 54 Ratios

Cawfcioisary Statement

Statement in this report describing the Companys objectives projections estimates and expectation may constitute “forward looking statement” within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumption and expectations of future events. These Statements are subject to certain risk and uncertainties. The Company cannot guarantee that these assumption and expectations are accurate or will be realized. The actual results may different from those expressed or implied since the Companys operations are affected by many external and internal factors which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments information or events.