Madhusudan Masala Ltd Management Discussions

For the financial year ended 31 March 2026, pursuant to Regulation 34 read with Schedule V Part B of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Industry structure and developments

Indias spice industry occupies an unusual position within packaged foods. Consumption is near-universal and largely non-discretionary, yet the product itself resists standardisation. Preferences for pungency, colour, grind and blend composition vary sharply between states, and within states between communities. A blend that performs in one market frequently fails in another without reformulation.

The consequence is a market that remains substantially unbranded and regionally fragmented, in contrast to categories such as edible oil or flour where national brands consolidated earlier. Loose and semi-branded spices continue to hold a significant share of household consumption, particularly outside metropolitan markets.

Three developments are reshaping this position. Food safety enforcement under the Food Safety and Standards Act has tightened materially, raising the compliance cost of informal processing and favouring organised manufacturers with laboratory capability. Packaging and labelling requirements under the Legal Metrology (Packaged Commodities) Rules have had a similar effect. And consumer willingness to pay for verified purity has risen following adulteration incidents reported in the sector.

For an organised manufacturer this creates an opening that is regional rather than national in character. The opportunity is not to build a single uniform product for India, but to build the manufacturing discipline, distribution reach and quality assurance of a national company while retaining formulations that are regionally specific.

The opportunity is not to build a single uniform product for India, but to build the discipline of a national company while retaining formulations that are regionally specific.

THE STRATEGIC POSITION THE COMPANY OCCUPIES

The structural shift the Company is making

How the category is changing.

Food safety enforcement

Enforcement under the Food Safety and Standards Act has tightened materially. The compliance cost of informal processing has risen, favouring manufacturers with in-house laboratory capability and documented process control. The Company operates its own testing laboratory and tests at intake and again before despatch.

Packaging and labelling

Requirements under the Legal Metrology (Packaged Commodities) Rules have had a similar effect. A specified, sealed and labelled pack carries a quality claim, a consistent weight and a batch code that loose product cannot. This is the mechanism by which a commodity becomes a branded good.

Consumer expectation

Consumer willingness to pay for verified purity has risen following adulteration incidents reported in the sector. This favours manufacturers able to evidence sourcing, processing and testing, and disadvantages those competing on price alone.

Where the Company sits in that shift

The Company manufactures and markets more than thirty-two varieties of spices under four brands — Double Hathi, Maharaja, Mantavya and 77 Green — together with whole spices, ground spices, tea and a range of allied grocery products.

Its position rests on regional formulation rather than national uniformity. Chilli, turmeric and coriander account for the whole of branded ground spice revenue, and the same three commodities are manufactured to different specifications for different regions. More than thirteen varieties of chilli powder alone are produced within the ground spice range.

This is a structural advantage over both ends of the competitive field. National brands carry greater advertising capacity but cannot economically hold regional formulations at this granularity. Regional and unorganised players hold local taste knowledge but operate without formal specification, laboratory capability or the assortment depth that converts distribution.

Portfolio at a glance
Spice varieties	32+
Chilli powder varieties	13+
Whole chilli specifications	9
Stock-keeping units	500+
Brands	4
States with branded presence	15

Distribution depth is the binding constraint.

Distribution depth, rather than manufacturing capacity or product acceptance, is what limits branded growth in this category. Expansion of the retail counter base, the distributor network and the super-stockist tier therefore translates relatively directly into branded volume.

The Company reaches retail through a multi-tier structure. Super stockists are appointed region by region, each supporting ten to fifteen distributors, with each distributor serving forty to fifty retailers. A dedicated field team of 101 people supports that structure across fifteen states.

What converts new distribution is assortment. With more than 500 stock-keeping units across four brands, a distributor can consolidate a wide range with a single supplier rather than dealing with several — a structural advantage over regional players carrying a narrow range.

Distribution added during FY 2025-26

CHANNEL	ADDED DURING THE YEAR
Retail grocery stores	21,000+
Wholesalers	770+
Distributors	120+
Super stockists	10 to 15
New states entered	2

Additions during the year as disclosed at the Q4 and FY 2025-26 earnings call held on 27 May 2026. Opening and closing counts have not been stated by the Company.

Manufacturing base supporting the expansion

Both manufacturing units operated at or close to full capacity throughout the year — 99% at the Companys plant at Hapa, Jamnagar, and 100% at the Vitagreen facility at GIDC Lodhika, Metoda, Rajkot. Part of the Companys grocery and blended spice manufacture is currently placed with third-party vendors because in-house capacity is fully committed.

A greenfield manufacturing platform is under development through the wholly owned subsidiary, Vitagreen Products Private Limited, at Sanosara on the Rajkot-Jamnagar highway. As at 31 March 2026 the project remained under development, and its planned capacity is accordingly not included in the Groups installed manufacturing capacity for FY 2025-26.

Opportunities & Threats

Opportunities

Continued branded conversion

The Companys principal opportunity is the continued conversion of its business from bulk and semi-branded supply toward packaged consumer brands. This shift carries a structurally higher realisation per unit and reduces exposure to commodity price pass-through. Branded sales reached 69.9% of consolidated revenue during the year, against 62.7% a year earlier.

Distribution-led growth

Distribution depth remains the binding constraint on branded growth in this category rather than manufacturing capacity or product acceptance. Expansion of the retail counter base, the distributor network and the super-stockist tier therefore translates relatively directly into branded volume.

Multi-brand positioning

The Companys multi-brand structure allows differentiated positioning across price tiers and regions without cannibal- isation. The adjacent grocery range — including flours, papad, soya products, asafoetida, pickle masala, salts and dry fenugreek — permits basket expansion through the same distribution infrastructure at low incremental cost.

Manufacturing platform

The greenfield manufacturing platform being developed through the wholly owned subsidiary, Vitagreen Products Private Limited, is intended to add processing capability to support this expansion.

Threats

Agricultural input volatility

Agricultural input prices are volatile and driven by monsoon performance, sowing patterns and crop disease, none of which the Company controls. Procurement is concentrated in defined spice belts, and adverse conditions in those geographies affect both cost and availability.

Competition at both ends

The category remains highly competitive at both ends — from established national brands with greater advertising capacity, and from regional and unorganised players competing on price with lower compliance overheads.

Working capital intensity

Working capital intensity is high. Seasonal procurement requires inventory to be built ahead of consumption, and extending distribution into new markets lengthens the receivables cycle before it improves. This is discussed further in the section on financial performance.

Regulatory and food safety risk

Regulatory risk in food safety is meaningful. A quality failure in a consumer-facing food product carries reputational consequences disproportionate to its financial cost.

Our Business

Madhusudan Masala Limited manufactures, processes and markets spices and allied grocery products from Jamnagar, Gujarat, through four brands and a wholly owned subsidiary at Metoda, Rajkot.

What we make

More than thirty-two varieties of spices across ground spices, whole spices and blended recipe masalas, together with tea and a range of allied grocery products including rajgira flour, papad, soya products, asafoetida, achar masala, sanchar, sindhalu and kasuri methi.

Where we operate

Manufacturing and processing operations are located at Hapa Road, Jamnagar. The Companys wholly owned subsidiary, Vi- tagreen Products Private Limited, operates from GIDC Lodhi- ka, Metoda, Rajkot. Branded distribution extends across fifteen states.

How we sell

Through a multi-tier structure of super stockists, distributors, wholesalers and retail grocery stores, supported by a dedicated field team of 101 people, alongside institutional and bulk channels served under the Hotel Special range.

Category composition, FY 2025-26

CATEGORY	FY 2025-26	FY 2024-25	GROWTH	SHARE OF CONSOLIDATED REVENUE
BRANDED
Ground spices	8,975.46	5,459.56	+64.4%	30.8%
Whole spices	6,703.00	6,235.69	+7.5%	23.0%
Other grocery	3,319.33	1,871.30	+77.4%	11.4%
Blended spices	1,176.03	779.99	+50.8%	4.0%
Tea	214.55	128.28	+67.3%	0.7%
Total branded	20,388.38	14,474.82	+40.9%	69.9%
NON-BRANDED
Whole spices	4,068.99	4,528.66	-10.1%	13.9%
Food grains	4,665.73	4,265.13	+9.4%	16.0%
Total non-branded	8,734.72	8,793.79	-0.7%	30.1%
Grand total	29,123.10	23,268.61	+25.2%	100.0%

Rs in lakh, consolidated. Category figures are drawn from the Companys internal segment analysis and were disclosed at theQ4 and FY 2025-26 earnings call held on 27 May 2026. Shares are stated against audited consolidated revenue from operations of Rs29,171.46 lakh; the internal analysis totals Rs29,123.10 lakh, a difference of Rs48.36 lakh.

Mission & Vision

Vision

To be a pioneering force in Indias vibrant spices industry, leveraging our legacy of quality, purity and innovation to become a household name. By 2030, we envision achieving a 1% market share, symbolising our commitment to excellence and customer satisfaction.

Mission

To craft a legacy of trust and excellence, delivering unparalleled quality, purity and freshness in every spice that bears our name, expanding our reach and strengthening our distribution network to make Madhusudan Masala Limited a preferred choice for millions.

Segment-wise or Product-wise Performance

The Company operates in a single reportable segment — manufacturing, processing and trading of spices and allied grocery products. Accordingly, segment reporting under Accounting Standard 17 is not applicable, and the discussion is presented on a product-category basis for the information of members.

Ground spices led growth

Ground spices grew fastest in absolute terms, adding Rs35.16 crore. Chilli, turmeric and coriander account for the whole of this category, manufactured to regionally specific formulations across more than thirteen chilli varieties alone.

Non-branded contracted deliberately

Non-branded whole spices declined 10.1%. That contraction is deliberate — it is the commodity half of the business, where margin is thin and competition is on price alone, and the Company is reallocating that volume toward packed branded goods.

Performance Highlights, FY 2025-26

Outlook

The Company enters FY 2026-27 with a heavily utilised manufacturing base, a branded mix approaching seventy per cent of revenue, and a greenfield manufacturing platform under development through its wholly owned subsidiary. The operating priority for the year ahead is the conversion of reported profitability into operating cash flow.

Future Outlook

Deepen before widening

Increase throughput in markets already served before extending the distribution footprint into new ones. Distribution depth, not manufacturing capacity, is what limits branded growth.

Shift the mix further

Continue moving revenue from bulk and semi-branded supply toward packaged consumer brands, and within that toward blended spices, which carry the highest realisation in the portfolio.

Build the platform

Progress the greenfield facility at Sanosara, designed around automation, controlled processing and integrated packaging, to bring currently outsourced production in-house.

Our Competitive Strength

The Company competes against national brands with greater advertising capacity at one end, and regional and unorganised players with lower compliance overheads at the other. Its position rests on five things neither set of competitors readily replicates.

Regional formulation at granularity

The same three commodities — chilli, turmeric and coriander — are manufactured to different specifications for different regions, with more than thirteen chilli powder varieties in the ground spice range alone. National brands cannot economically hold formulations at this granularity; regional players hold the taste knowledge but not the manufacturing discipline.

Integrated procurement and storage

Crop is bought at harvest when quality is best and price lowest, and held through the year in the Companys own 4,029 MT cold storage, commissioned for captive use in 2024. This removed dependence on rented storage and gave control of both cost and condition of raw material.

Assortment depth

More than 500 stock-keeping units across four brands allow a distributor to consolidate a wide range with a single supplier rather than dealing with several. This is the principal reason new distribution converts, and it is a structural advantage over players carrying a narrow range.

Quality infrastructure

An in-house testing laboratory tests at intake and again before despatch. As food safety enforcement tightens, laboratory capability shifts from a cost to a competitive advantage over informal processors.

Four decades of blending knowledge

The business has blended spices in Jamnagar since 1977. Regional formulations developed over four decades reside with technical personnel and cannot be acquired quickly. This is both a competitive strength and, as noted under risks and concerns, a dependency on key personnel.

Risks and Concerns

Raw material price and availability

Spice crops are exposed to monsoon variability, sowing decisions and disease. The Company mitigates this through seasonal procurement at harvest, cold storage capability and sourcing across multiple growing regions, but cannot eliminate the exposure.

Working capital and liquidity

The combination of seasonal inventory and lengthening receivables absorbs cash. The Company funds this substantially through short-term borrowings, which exposes it to interest rate movements and to the continued availability of working capital limits.

Concentration of receivables ageing

An aged cohort of Rs906.01 lakh remains outstanding. No amount was outstanding beyond three years at either balance sheet date and no receivable has been classified as doubtful.

Competition

The Company competes against national brands with greater marketing resources and against unorganised players with lower compliance costs.

Food safety and product quality

The Company operates an in-house testing laboratory and maintains applicable certifications. Notwithstanding this, a product quality failure would carry consequences beyond its direct financial cost.

Regulatory compliance

The Companys securities are listed and it is subject to continuous disclosure obligations. During the year under review certain lapses in timeliness were identified by the Secretarial Auditor and are disclosed in the Directors Report, together with managements response. The Company has strengthened its monitoring of disclosure timelines.

Key personnel

The business depends on the continuity of promoter management and on technical personnel with knowledge of regional blending formulations developed over four decades.

Internal Financial Control Systems and their Adequacy

The Company maintains internal control systems commensurate with the size, scale and nature of its operations, designed to safeguard assets, ensure the accuracy and completeness of accounting records, prevent and detect fraud, and secure compliance with applicable law. M/s P. R. Nakum & Associates, Chartered Accountants, act as Internal Auditor and conduct periodic reviews of operational and financial functions, reporting to the Audit Committee and the Board.

The Statutory Auditor has reported on internal financial controls over financial reporting under Section 143(3)(i) of the Companies Act, 2013 and has expressed an unmodified opinion, concluding that such controls were adequate and operating effectively as at 31 March 2026. The Audit Committee has reached the same conclusion under Section 177. The auditors further reported that the accounting software operated with an audit trail throughout the year and that no instance of tampering came to their notice.

Financial Performance and Review of Operations

Revenue growth of 26.32% on a consolidated basis was accompanied by EBITDA growth of 36.2%, so operating margin expanded during the year — from 10.5% to 11.3% excluding other income. This reflects the shift in mix toward branded goods, which carry a structurally higher realisation than bulk and semi-branded supply.

Revenue and profitability

Revenue from operations on a standalone basis rose to Rs26,154.05 lakh revenue rose to Rs29,171.46 lakh from Rs23,092.48 lakh, an increase of

Profit before tax rose 40.48% to Rs2,168.39 lakh on a standalone basis and profit after tax rose 38.54% to Rs1,616.20 lakh. On a consolidated basis profit after tax rose to Rs1,850.12 lakh from Rs1,502.25 lakh.

Finance costs and capital structure

Finance costs were broadly flat at Rs624.31 lakh against Rs619.10 lakh. Total debt on a standalone basis rose to Rs6,908.13 lakh from Rs6,525.26 lakh — absolute borrowings therefore increased during the year. The

debt-equity ratio improved from 0.71 to 0.59, but this reflects growth in the equity base rather than any reduction in borrowings, and the Company does not characterise the year as one of deleveraging.

Shareholders funds rose to Rs11,797.25 lakh from Rs9,131.02 lakh, reflecting both retained earnings and the conversion of 7,70,000 warrants into equity shares on 27 March 2026, which brought in Rs1,045.28 lakh.

Working capital and cash flow

Operating cash flow remained negative during FY 2025-26, notwithstanding the improvement in reported profitability. Operating profit before working capital changes was Rs2,991.02 lakh; working capital movements absorbed a substantially larger amount. The position improved materially year on year — but from a large negative to a small negative, and the Company does not presentthis as a turnaround.

The two drivers are inventory and receivables. Inventory build reflects seasonal procurement and is intrinsic to the business model rather than a deterioration in efficiency. Receivables growth reflects extension of the distribution network into newer markets, where credit terms are necessarily longer during the establishment phase.

Working capital movement

MOVEMENT	FY 2025-26
Increase in trade receivables	(1,487.94)
Increase in inventories	(1,570.69)
Increase in trade payables	288.63
Loans and advances	311.13
Other liabilities and provisions	(321.67)

Rs in lakh, standalone. After income tax paid of Rs517.63 lakh, net cash used in operating activities was negative.

Receivables ageing

AGEING	FY26	FY25
Less than 6 months	3,977.02	2,586.00
6 months to 1 year	171.95	79.40
1 to 2 years	53.91	955.54
2 to 3 years	906.01	-
More than 3 years	-	-
Total	5,108.88	3,620.94

The increase in the two-to-three-year bucket is a single ageing cohort moving forward by one year, reduced from Rs955.54 lakh to Rs906.01 lakh by collections of Rs49.53 lakh. It does not represent new delinquency arising in FY 2025-26.

Next Steps Towards Success

Convert profit to cash

Shorten the receivables cycle and manage the seasonal inventory build so that reported profitability reaches operating cash flow. This is the operating priority the Board has set for the year ahead.

Deepen distribution

Increase throughput in markets already served before extending the footprint further. Distribution depth rather than manufacturing capacity is what limits branded growth in this category.

Complete the platform

Progress the greenfield facility under development through the wholly owned subsidiary, bringing currently outsourced grocery and blended spice manufacture in-house.

Material Developments in Human Resources and Industrial Relations

The Company had 73 employees on its standalone rolls as at 31 March 2026. Employee benefits expense for the year was Rs575.54 lakh on a consolidated basis against Rs562.19 lakh in the preceding year.

Industrial relations remained cordial throughout the year. The Company is in compliance with the Maternity Benefit Act, 1961. No complaint of sexual harassment was received during the year under review.

During the year the Company implemented the Madhusudan Employee Stock Option Scheme 2025, approved by members through postal ballot on 26 April 2025. The Nomination and Remuneration Committee granted 66,800 options on 24 February 2026 at a grant price of Rs10 per option, extending an ownership interest to eligible employees.

The business depends on technical personnel carrying knowledge of regional blending formulations developed over four decades. Retention of that knowledge, and its transfer to the next generation of production staff, is treated by the Board as an operational priority rather than a personnel matter.

Human resources at a glance

Employees, standalone	73
Employee benefits expense	Rs575.54 L
Prioryear	Rs562.19 L
ESOP options granted	66,800
Grant price per option	Rs10
Date of grant	24 Feb 2026
POSH complaints received	Nil

Key Financial Ratios

Disclosed pursuant to Schedule V Part B of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, on a standalone basis. An explanation is given for every ratio where the change exceeds 25%.

PARTICULARS	F.Y. 2025-26	F.Y. 2024-25	% OF CHANGE	REASONS
Current ratio (times)	2.29	2.15	6.92	-
Debt equity ratio (times)	0.59	0.71	(18.06)	-
Debt service coverage ratio (times)	2.62	2.44	7.32	-
Interest service coverage ratio (times)	4.68	3.65	28.26	The Interest Service Coverage Ratio has increased during the year on account of the increase in EBITDA, which resulted in higher coverage of interest service.
Return on equity ratio (times)	0.15	0.17	(9.07)	-
Inventory turnover ratio (times)	1.52	1.93	(21.53)	-
Trade receivables turnover ratio (times)	5.99	6.01	(0.36)	-
Trade payables turnover ratio (times)	61.23	79.34	(22.84)	-
Net capital turnover ratio (times)	2.35	2.84	(17.09)	-
Net profit ratio (%)	6.18	5.39	14.68	-
Return on capital employed (%)	25.11	28.33	(11.38)	-

Figures in brackets denote a decrease. Ratios are computed on a standalone basis and correspond to Note 55 to the standalone financial statements. The Interest Service Coverage Ratio is the only ratio crossing the 25% threshold requiring explanation under Schedule V.

Working capital ratios

Inventory turnover fell from 1.93 to 1.52 times as average inventory rose from Rs6,544.76 lakh to Rs9,627.35 lakh, reflecting seasonal procurement at harvest ahead of consumption.

Capital structure

The debt-equity ratio improved from 0.71 to 0.59, driven by growth in shareholders equity from Rs9,131.02 lakh to Rs11,797.25 lakh rather than by any reduction in borrowings.

Returns

Return on capital employed moved from 28.33% to 25.11% as average capital employed rose from Rs7,633.06 lakh to Rs11,122.21 lakh following the conversion of warrants into equity.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may constitute forward-looking statements within the meaning of applicable securities laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations and tax regimes, economic developments within India, and other incidental factors.

The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent development, information or event, except as required by applicable law.

Statements regarding the greenfield manufacturing platform under development, planned capacity on commissioning, and the Companys distribution and category objectives are forward-looking and should be read subject to this statement.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as at the date of this report.

Registered Office F. P. No. 19, Plot No. 1-B, Hapa Road	For and on behalf of the Board of Directors Madhusudan Masala Limited
Jamnagar361001, Gujarat, India CIN:L15400GJ2021PLC127968	Rishit Dayalaji Kotecha	Hiren Vijaykumar Kotecha
	Chairman cum Managing Dir ector	Whole-time Director
Place: Jamnagar		DIN:02519243
Date: September 07,2026	DIN:00062148