Mangalam Seeds Ltd Management Discussions

Indian Economic Overview

i) Agriculture

The agriculture sector in India is a critical component of the countrys economy and plays an important role in employment, food security, and rural development. Agriculture contributes approximately 17–20% to Indias Gross Domestic Product (GDP). Although its share in GDP has gradually declined due to the rapid growth of other sectors such as industry and services, agriculture continues to remain a significant part of the economy. It provides employment to about 45–50% of the Indian workforce, making it the largest source of livelihood for the rural population. However, many farmers still face issues such as underemployment and subsistence farming, which limits their income and productivity.

India has around 150 million hectares of net sown area, which is primarily used for cultivating major food and cash crops. Important food crops include rice, wheat, maize, and pulses, and India is one of the largest producers of rice and wheat in the world. In addition to food crops, the country also produces several important cash crops such as sugarcane, cotton, tea, and spices. India is also a leading producer of fruits and vegetables. Although India has made significant progress in increasing agricultural productivity through improved seeds, fertilizers, and modern farming practices, there are still large differences in crop yields across different regions due to variations in soil quality, irrigation facilities, and farming techniques.

Irrigation plays a crucial role in agricultural production in India. Approximately 45% of the total cropped area is irrigated, while the remaining area depends largely on monsoon rainfall. As a result, fluctuations in rainfall and irregular monsoon patterns can significantly affect agricultural output. To address this issue, the government has launched several programs such as the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) to improve irrigation infrastructure and promote efficient water management. The government also supports farmers through policies such as the Minimum Support Price (MSP) system, subsidies on fertilizers, and crop insurance schemes to protect farmers from price fluctuations and crop losses.

Despite its importance, the agriculture sector in India faces several challenges. Climate change has increased the frequency of droughts, floods, and unpredictable weather conditions, which negatively affect crop production. Environmental issues such as soil erosion, salinization, and nutrient depletion also reduce land productivity. In addition, many farmers struggle with limited access to markets, inadequate storage facilities, and unfair pricing, which can reduce their income. However, the sector is gradually adopting modern technologies such as precision farming, improved crop varieties, and digital tools for better farm management. These technological advancements aim to increase efficiency, improve productivity, and support the sustainable development of agriculture in India.

ii) Real Estate

India is one of the fastest-growing major economies in the world, and the real estate and construction sector plays a vital role in its overall economic development. Rapid urbanization, population growth, and rising income levels are continuously increasing the demand for residential housing, commercial complexes, industrial buildings, warehouses, shopping malls, and infrastructure projects across the country. The sector is closely linked with various industries such as cement, steel, bricks, electrical equipment, and construction materials, making it one of the largest employment generators after agriculture.

Government initiatives like Pradhan Mantri Awas Yojana, Smart Cities Mission, and reforms such as Real Estate (Regulation and Development) Act, 2016 have improved transparency, encouraged investment, and boosted housing and infrastructure development. In addition, increased focus on industrial corridors, Special Economic Zones (SEZs), logistics parks, highways, airports, and urban infrastructure has created significant opportunities for real estate developers and construction companies. With strong economic fundamentals, supportive government policies, and growing demand for modern housing and commercial spaces, the Indian real estate sector is expected to continue expanding and contribute significantly to the countrys economic growth in the coming years.

Industry Structure and Developments.

Indias agricultural sector continues to play a vital role in ensuring economic stability and food security during FY 2025–26. The sector has maintained steady growth in recent years, with an average annual growth rate of around 4–4.6%, and continues to contribute significantly to the countrys Gross Value Added (GVA). Agricultural exports remain strong, with India retaining its position as a net exporter of agricultural commodities, supported by rising global demand for cereals, pulses, and horticultural products.

The Governments policy of fixing Minimum Support Prices (MSPs) at least 50% above the cost of production (A2+FL) has helped provide price stability to farmers and encouraged diversification toward pulses, oilseeds, and other high-value crops. In addition, increased production and promotion of coarse grains and millets (nutri-cereals) highlight the growing focus on nutrient-rich and climate-resilient crops.

Supported by government initiatives and the efforts of farmers and agricultural scientists, Indias agricultural sector is expected to continue contributing to agricultural productivity, food security, and rural development.

Indias real estate sector continues to play a significant role in the countrys economic development during FY 2025–26. The sector remains one of the key contributors to economic growth, urban development, and employment generation. Supported by rapid urbanization, infrastructure development, and rising demand for residential and commercial properties, the real estate industry has witnessed steady expansion in recent years.

Government initiatives such as the Real Estate (Regulation and Development) Act (RERA), Pradhan Mantri Awas Yojana (PMAY), and the development of smart cities have strengthened transparency, increased investment, and improved consumer confidence in the sector. Additionally, the growth of Real Estate Investment Trusts (REITs) and increased institutional investment have further boosted the sectors development.

The demand for affordable housing, commercial spaces, and modern infrastructure continues to grow, driven by rising incomes, urban migration, and expanding business activities. With continued policy support and infrastructure development, Indias real estate sector is expected to remain a key driver of economic growth and urban transformation in the coming years.

Outlook

Competition in crop production, particularly in the development of value-added traits, is expected to intensify in the coming years. This trend is driven by the need to address climate change, evolving pest and disease pressures, and changing agricultural conditions, which increase the complexity of crop management and affect the durability of agricultural products. To tackle these challenges, there is a growing emphasis on advanced breeding techniques and modern genetic technologies that can accelerate the development of improved crop varieties.

The expansion of protected cultivation, organic farming, and specialized vegetable products is also expected to continue. Additionally, there is an increasing focus on seed enhancement technologies, including the use of high-quality and high-value seeds that offer improved performance and productivity. This shift is largely driven by the rising demand from professional vegetable growers, who require reliable and high-yielding seed varieties.

Another significant development in the sector is the consolidation of vegetable seed companies, with multinational corporations increasing their investments in research, breeding, and advanced technologies to strengthen their competitive position. The vegetable seed market is expected to witness steady growth in the coming years, supported by the expansion of vegetable cultivation areas and increasing consumer demand for vegetables.

To keep pace with these developments, the seed industry requires sustainable business models supported by strong systems, efficient processes, and strategic planning, similar to those adopted by leading multinational companies. In addition, the export of vegetable seeds is showing a growing trend, creating new opportunities for market expansion and international trade.

Competition in the real estate sector is expected to intensify in the coming years as developers increasingly focus on value-added features, sustainability, and smart infrastructure. Rapid urbanization, population growth, and rising demand for modern housing are driving the need for innovative construction practices and efficient project management. Additionally, climate change concerns and environmental regulations are encouraging the adoption of green buildings, energy-efficient designs, and sustainable construction materials.

The expansion of affordable housing, integrated townships, and commercial real estate is anticipated, supported by growing urban migration and infrastructure development. Government initiatives and regulatory frameworks aimed at improving transparency and accountability in the sector have also contributed to strengthening investor and consumer confidence. At the same time, developers are increasingly adopting digital technologies, data-driven planning, and modern construction methods to enhance project efficiency and reduce development timelines.

Another significant trend in the industry is the growing participation of institutional investors and Real Estate Investment Trusts (REITs), which are helping to improve capital availability and market stability. The sector is also witnessing consolidation among real estate developers, with larger firms expanding their presence through partnerships and acquisitions.

With increasing demand for quality housing, commercial spaces, and modern infrastructure, the real estate sector is expected to experience steady growth in the coming years. To adapt to the evolving market environment, real estate companies are focusing on sustainable business models, improved governance, and long-term strategic planning, while also exploring opportunities for expansion in both domestic and international markets.

Indias Agriculture Sector

India is primarily an agrarian economy. While agriculture is estimated to account for just over 16 percent of the US$ 3.7 trillion economy, the sector employees over 50 percent of the population. India has largely achieved self-sufficiency in production of food grains, delivering strong and fast economic growth for the past several years, and this trend is projected to continue in the future. The country has unique competitive advantages with the largest arable land area (43 percent) of an estimated 150 million hectares and diverse agro-climatic conditions supporting the cultivation of various crops. The agricultural sector indeed plays a vital role in Indian economics, politics, and society.

India is among the highest-ranking countries in production volume for various commodities like rice, cotton, dairy, fruits, vegetables, meat and seafood, but the nation has access to only 60 percent of the produce due to lack of storage infrastructure, which leads to an estimated loss of up to 40 percent of the produce. In fact, these losses are estimated at $13 billion annually.

Over the past decade, agriculture and horticulture outputs have seen record growth year-after-year. Yet, crop yields are still generally lower compared to the world average. This low productivity is due to many factors such as erratic monsoons (over 50 percent of cultivated land is monsoon dependent), shrinking groundwater resources, decline in soil fertility, inefficiency in the food distribution system, lack of storage, transportation, lack of awareness in the use of modern agricultural practices and technologies among the farming community, unpredictable weather, small average farm sizes of 1.08 hectares, and agricultural subsidies that distort market signals and hamper productivity-enhancing investment.

The agricultural sector in India is witnessing a shift from traditional farming to organic farming, horticulture, aquaculture, poultry, and dairy production. The demand for fresh and processed products of all types is increasing due to rapid urbanization, the rise in incomes, and changing consumption habits of the population. The growth of an efficient cold chain network from "farm to fork" will help curb the current spoilage rate of agricultural output while helping producers capture value as products retain quality and give extra benefit to consumers.

Farmers Income

The average income of farmers in India is relatively low compared to other professions. Estimates vary, but as of recent data, the average monthly income of a farmer is around Rs 10,000 to Rs 15,000. This figure can fluctuate based on factors like crop yields, market prices, and input costs. Income levels can differ significantly between regions. Farmers in states like Punjab, Haryana, and Maharashtra may have higher incomes due to better infrastructure and access to markets, while those in less developed states often face lower incomes. Several government programs aim to enhance farmer welfare and income, including the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) for irrigation and the National Agriculture Market (eNAM) for better price discovery. Programs like the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) provide direct income support to farmers, aiming to alleviate financial stress and improve livelihoods.

Efforts to boost interest in farming

Enhanced curriculum in schools and universities focusing on modern agricultural practices and technology aims to spark interest among students. Institutions like the Indian Council of Agricultural Research (ICAR) offer specialized courses and research opportunities. Programs such as the Skill Development Scheme under the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) provide training in various agricultural skills, including advanced farming techniques and entrepreneurship. The introduction of technologies like precision farming, drones, and soil sensors makes farming more efficient and less labor-intensive, attracting tech-savvy individuals. Platforms like e-NAM (National Agriculture Market) and various mobile apps help farmers access real-time market information, weather forecasts, and expert advice, making farming more data-driven and attractive. Government schemes offer subsidies for purchasing modern equipment, seeds, and fertilizers. This financial support can reduce the initial investment burden and encourage interest in farming. Easy access to credit through programs like Kisan Credit Cards (KCC) helps farmers manage their finances and invest in better farming practices. Initiatives to facilitate direct marketing, such as Farmers Markets and online platforms, help farmers get better prices for their produce. Encouraging value addition through agro-processing, packaging, and branding helps farmers diversify their income sources and improve profitability. Government programs and NGOs promote organic farming through training, certification, and marketing support, appealing to environmentally conscious individuals. Initiatives focusing on sustainable practices, such as soil conservation and water-efficient farming, attract those interested in eco-friendly agriculture. Public campaigns and educational programs aim to improve the perception of farming as a viable and rewarding career option, emphasizing its importance to national food security and rural development.

Indias Real Estate Sector

Indias real estate sector continues to be one of the key drivers of economic growth and urban development. The sector plays a significant role in generating employment and contributes substantially to the countrys Gross Domestic Product (GDP). Rapid urbanization, population growth, rising income levels, and infrastructure development have led to increasing demand for residential, commercial, and retail spaces across major cities and emerging urban centers.

Government initiatives such as the Real Estate (Regulation and Development) Act (RERA), Pradhan Mantri Awas Yojana (PMAY), and the Smart Cities Mission have improved transparency, accountability, and investment in the sector. These reforms have strengthened consumer confidence and encouraged greater participation from both domestic and international investors.

The sector is also witnessing growing adoption of sustainable construction practices, smart building technologies, and green infrastructure in response to environmental concerns and changing consumer preferences. Additionally, the expansion of Real Estate Investment Trusts (REITs) and increased institutional investments have enhanced the availability of capital for large-scale projects.

With continued policy support, infrastructure expansion, and rising housing demand, Indias real estate sector is expected to experience steady growth and play an important role in the countrys economic development and urban transformation in the coming years.

Mangalam Seeds Overview

Mangalam Seeds specializes in the production of various types of seeds, including field crops (like cereals and pulses) and horticultural crops (such as vegetables and flowers). The company emphasizes the quality and reliability of its seeds, often focusing on high-yield and disease-resistant varieties. Mangalam Seeds invests in research and development to enhance seed quality and develop new varieties suited to different climatic conditions and agricultural needs. The company may collaborate with research institutions and agricultural universities to advance its seed technology. Apart from supplying seeds, Mangalam Seeds might offer advisory services to farmers on best practices for planting and crop management. Adoption of modern agricultural technologies and practices to support farmers in maximizing their crop productivity. Mangalam Seeds operates in various regions within India, catering to the diverse agricultural needs across different states. The companys market presence may extend to international markets depending on its export capabilities. The company likely has an extensive distribution network to ensure the availability of its seeds across various agricultural regions. Like many seed companies, Mangalam Seeds may focus on sustainable farming practices, including environmentally friendly seed production methods and promoting sustainable agriculture. The company might engage in CSR activities related to rural development, farmer welfare, and community support. Specific financial performance details are typically available in annual reports or financial statements, which provide insights into the companys revenue, profitability, and growth trajectory. The company faces challenges common to the seed industry, such as fluctuating agricultural policies, climate change impacts, and competition in the seed market. There are opportunities for growth in the form of expanding product lines, entering new markets, and adopting advanced agricultural technologies. The company operates in the real estate sector, focusing on the development of residential, commercial, and mixed-use projects to meet the growing demand for modern infrastructure and housing. It emphasizes quality construction, timely project delivery, and customer satisfaction, while adopting modern architectural designs and sustainable building practices. The company collaborates with architects, engineers, and urban planners to develop well-planned projects suited to changing market demands. It also adopts advanced construction technologies and efficient project management practices to enhance productivity and reduce development timelines. With operations across various regions in India, the company caters to the increasing needs of urban development and infrastructure expansion. The company may also engage in sustainable development initiatives and corporate social responsibility activities, while exploring opportunities for growth through urbanization, infrastructure development, and evolving real estate market trends.

A. BUSINESS HIGHLIGHTS

Turnover:

Mangalam Seeds Limited has turnover of Rs. 1,008,205,235 /- in FY 2025-26 and Rs. 943,230,218 /- in FY 2024-25.

Employee Benefit Expenses:

Employees emoluments (other than managerial remuneration) is Rs. 4,08,97,646/- during the year as against Rs. 3,37,07,890/- during the previous year.

Administrative and Selling Expenses:

Major components of administrative and other expenses include Bank Charges & Commission, Sales Promotion & Presentation, Brokerage & Commission, Site Exp., Legal and Professional Tax, Rent, listing fees, insurance premium, Sundry Exp., Bad Debts written off, etc.

Depreciation:

Depreciation charge for the current year came to Rs. 15,577,502 as against Rs. 1,20,15,921.00 as against of the previous year.

Provision for Tax:

The Company has made provision towards Current Tax of Rs. 16,546,605.00 Deferred taxes of Rs. 4,366,778.00 & short provision of Rs. (425,054) and as against Current Tax of Rs 20,732,376.00 deferred tax was 401,495 & short provision of Rs 607,364 of the previous year.

Profit/Loss after Tax:

The Company has made profit after tax for the current year is Rs. 83,041,088.00 as against profit of Rs. 10,10,62,481.00 during the previous year. The Directors are hopeful for the better performance in the future.

Earnings per Share:

Basic and diluted earnings per share for the current year worked out to Rs. 7.56 as against Rs. 9.20 of the previous year.

B. SEGMENT WISE PERFORMANCE:

The Company operates in a sale of seeds, which has remained the core strength and focus area of the business. Concentrating on this segment enables the Company to channel its resources, expertise, and R&D towards delivering superior quality seeds that cater to the evolving needs of farmers. This focused approach not only strengthens the Companys market presence but also helps in maintaining consistency, efficiency, and long-term growth prospects.

The Company involved in crop Research and Development through breeding, Production of seeds, processing, packing and marketing of high performing hybrid and open pollinated varieties of agricultural crops. Your company has adopted various marketing strategies for sustained growth including increase in number of clients / customers to reduce the dependency on any single client / customer.

The Company operates in the real estate sector, concentrating on this segment enables the Company to channel its resources, expertise, and planning capabilities toward delivering quality residential, commercial, and mixed-use developments that meet the evolving needs of urban consumers and businesses. This focused approach strengthens the Companys market presence while ensuring efficiency, consistency, and long-term growth prospects. The Company is involved in project planning, development, construction, and marketing of real estate properties, adopting modern construction practices and effective project management techniques. It also implements various marketing and customer outreach strategies to support sustained growth, including expanding its customer base and reducing dependency on any single client or market segment. Through continuous improvement in project quality and customer service, the Company aims to enhance its position in the competitive real estate market.

C. BUSINESS OVERVIEW:

Industries overview:

The management is confident of improvement in the companys working in the near future with fast growth. The seed industry has witnessed a substantial change in the past century, with farmers re- lying on purchasing seeds from market with better traits rather than relying on seeds from previous seasons harvest. Developments in seed technology have increased the momentum of the industrys growth, and the introduction of genetically modified crops has further boosted the seed market.

Indias real estate sector is one of the key drivers of economic growth, contributing significantly to employment generation and infrastructure development. Rapid urbanization, population growth, and rising income levels have increased the demand for residential, commercial, and mixed-use developments. Government initiatives such as regulatory reforms and infrastructure development programs have further strengthened transparency and investor confidence in the sector.

Diversified Product Portfolio:

The Companys product portfolio covers a diversified range of agricultural seeds that cater to the varied needs of farmers. Its offerings include Grain Seeds, Oil Seeds, Spicy Seeds, Pulse Seeds, Fiber Seeds, Fodder Seeds, Kitchen Garden Vegetables, and Hybrid Vegetables. With such a wide variety, the Company enables its customers to source multiple seed requirements from a single reliable vendor, strengthening long-term relationships and creating opportunities to serve both existing and new customers more effectively.

The Company offers a diversified portfolio of real estate projects including residential developments, commercial spaces, and mixed-use properties. This diversified approach allows the Company to cater to the varying needs of customers and businesses while expanding its presence across different market segments

Well Equipped Research and Development facility:

Company has a well-equipped Research and Development facility to improve quality of the products and to produce high performance of agriculture seeds. The R&D team includes plant breeders, crop protection specialists, agronomists, seed technologists, biotechnologists and physiologists.

The Company focuses on innovative design, modern construction techniques, and sustainable development practices. By adopting advanced planning methods, efficient construction technologies, and environmentally responsible solutions, the Company aims to improve project quality, efficiency, and long-term value for customers.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

KEY FINANCIAL RATIOS:

D. SWOT ANALYSIS OF THE COMPANY

Strengths:

a. Indepth knowledge of industry

b. In-house Research and Development (R&D) unit

c. Broadbase Distribution Network

d. Robust and scalable distribution

e. Strong brand reputation

f. Experienced management team

g. Customer-focused approach

Weaknesses:

a. Dependency upon external factors like climate, weather conditions

b. Hybrid seeds are costlier than natural seeds, farmer prefers natural seeds rather than Hybrid seeds

c. Time period for developing product is long

d. Fluctuating construction material costs

e. High capital investment requirement

Opportunities:

a. Government initiative to promote agriculture industry will help our industry to grow

b. Continues development in R&D work resulting into yielding of new product (seed)

c. Abundant water, electricity and subsidies to farmer by government will help the agriculture industry to grow

d. Growing demand for stress-tolerant crops

e. Adoption of smart technologies

f. Rapid urbanization growth

Threats:

a. Competition from producer of certified seed

b. Industry is prone to changes in government policies

c. No entry barriers in our industry which puts us to the threat of competition from new entrants

d. Fluctuations in the market prices.

e. Increasing construction costs

f. Intense industry competition

E. RISKS AND CONCERNS:

Mangalam Seeds Ltd. mainly focuses on its strong manpower base and technical expertise as the key drivers of growth. Apart from risks arising out of changes in governmental policies and regulatory frameworks, the business is also exposed to certain operational and industry-related risks such as climatic variations, input cost fluctuations, and competition. These risks are regularly monitored and mitigated through timely corrective actions, adoption of improved practices, and continuous engagement with stakeholders. The Company has also taken necessary measures to safeguard its assets, resources, and overall business interests. The Company faces several risks and concerns that may impact its operations and growth. These include changes in government regulations and compliance requirements, fluctuations in market demand for real estate, and possible delays in project completion due to approvals or construction issues.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has proper and adequate internal control systems commensurate with its size and nature of operations. These systems provide reasonable assurance that the Companys assets are safeguarded and that all transactions are properly authorized, recorded, and reported. The internal control framework helps in effectively monitoring business processes, financial reporting, and compliance with applicable laws and regulations. The system is designed to ensure that financial and other records are reliable and present a true and fair view of the Companys business operations. Further, a qualified and independent Audit Committee of the Board of Directors regularly reviews the adequacy and effectiveness of the internal control systems and recommends necessary improvements to strengthen them.

G. HUMAN RESOURCE MANAGEMENT:

The Company believes that human resources are one of the most valuable assets of the organization, contributing significantly to its growth, progress, profitability, and long-term shareholder value. Although not reflected in the corporate balance sheet, the commitment and capabilities of employees play a vital role in achieving the Companys strategic objectives. During the year, the Company continued its efforts to strengthen its HR policies and processes in order to enhance overall organizational performance and maintain a positive work environment.

The vision of the Company is to build a strong organizational culture, value system, and professional skills that support the achievement of both short-term and long-term goals. In todays dynamic business environment, the Company recognizes the importance of continuous learning and skill development. Therefore, capability building of employees remains a key priority. Regular training and development programs are conducted to enhance employees skills and effectiveness in their current roles while also preparing them for future responsibilities.

Training programs are designed based on the specific learning needs of employees and in consultation with relevant stakeholders. These programs are delivered through multiple methods such as classroom sessions, on-the-job training, and digital learning platforms. The Company also collaborates with internal experts and external training partners to ensure effective learning interventions. The Company continues to maintain healthy industrial relations and a supportive work culture across the organization.

As on the date of this report, the Company employs 89 employees across its operations.

H. ENVIRONMENT SAFETY, HEALTH AND ENERGY CONSERVATION

Safety at the workplace is of paramount importance to the Company. The Company continuously strives to ensure that various safety training and awareness programs are conducted throughout the year for its employees. The objective is to maintain the highest standards of safety across workplaces and project sites while ensuring the implementation of latest industry best practices. These initiatives not only promote a safe working environment but also help in improving operational efficiency and effective resource utilization.

I. RISK MITIGATION FRAMEWORK

Despite strong growth potential, the real estate sector faces several challenges that may affect business performance. Fluctuations in market demand, economic conditions, and changes in government policies or regulatory requirements can impact project approvals and development timelines. The industry also faces challenges related to rising construction material costs, land acquisition issues, and delays in regulatory clearances, which may affect project execution and profitability. Additionally, the real estate sector is influenced by interest rate movements, financing availability, and changing customer preferences. Any significant economic slowdown or reduction in purchasing power may affect property demand. To address these challenges and uncertainties, the Company follows a comprehensive and integrated risk management framework aimed at identifying potential risks monitoring market developments, and implementing appropriate mitigation strategies to ensure sustainable business operations.

J. CAUTIONARY STATEMENT

Statement - "Forward-Looking Statements", including but not limited to statements relating to the implementation of strategic initiatives and other statements regarding future business developments and economic performance of the Company. While these forward-looking statements reflect the Companys current assessment and expectations concerning the development of its business, several risks, uncertainties, and other unknown factors could cause actual results to differ materially from those expressed or implied in such statements.

These factors include, but are not limited to, general market conditions, macro-economic and regulatory developments, changes in government policies, fluctuations in interest rates, availability of financing, competitive pressures, technological advancements, and changes in the financial conditions of customers and business partners. Other factors beyond the Companys control may also influence its business and financial performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.