Manorama Industries Ltd Management Discussions

Global Economy Overview

The global economy is undergoing a profound transformation as escalating trade tensions and persistent policy uncertainty reshape international commerce and growth patterns. Since early 2025, a surge in tariff increases across major economies has pushed average global tariff levels to heights not seen in decades. This sharp rise has disrupted trade flows and complicated the operation of intricate supply chains, slowdown contributing to a significant in global trade, which is now expected to grow by only 1.7% in 2025, well below overall economic expansion.

Consequently, global GDP growth is forecast to slow to 2.8% in 2025 before improving modestly to 3.0% in 2026.

This slowdown reflects a cumulative reduction of 0.8 percentage points directly linked to the recent wave of trade restrictions. Without these measures, growth would likely have remained stable at 3.2% in both years.

The subdued outlook is driven by a combination of factors. Protectionist tradepolicieshaveincreasedproduction costs and reduced efficiency, while retaliatory actions and tariff escalations have led to rerouted trade flows that diminish productivity. These changes these have amplified uncertainty, causing businesses to defer investments and rethink supply chain strategies.

At the same time, geopolitical instability, particularly the Iran-Israel conflict, has increased volatility in global markets. As a vital hub for energy and trade, the Middle East crisis has pushed up crude oil prices amid fears of supply disruptions through the Strait of Hormuz, driving up global logistics costs and insurance premiums. This, in turn, has placed pressure on emerging market currencies, including the Indian Rupee, through increased oil import bills and capital outflows, raising inflationary risks and complicating monetary policy.

Advanced economies face a dual challenge of weakening domestic demand and rising uncertainty, while many emerging markets contend with slowing investment and contracting consumer spending amid higher costs and financial volatility. The deep interconnection of global production difficulties, networksintensifies resulting in an uneven and fragile recovery.

Adding to this complex environment are recent developments in global currency markets, which have further fueled volatility. The notable depreciation of the US Dollar, driven by shifting interest rate expectations and evolving investor sentiment, has introduced both opportunities and risks. While a softer dollar may alleviate some pressure on emerging market currencies and support capital inflows, it also raises the risk of imported inflation,particularly in oil-importing economies.

(Sources: https://www.imf.org/en/Blogs/Articles/2025/04/22/the-global-economy-enters-a-new-era, https://economictimes.indiatimes.com/news/india/iran-israel-war-impact-on-india-economy-a-middle-east-flashpoint-that-indian- economy-cant-ignore/articleshow/121817874.cms?from=mdr, https://edition.cnn.com/2025/06/25/investing/us-dollar-decline-currency-markets)

Indian Economy

The Indian economy continues to demonstrate robust resilience and adaptability amid a complex global environment marked by geopolitical tensions, supply chain shifts, and inflationary headwinds. Despite these external challenges, India has sustained a strong growth trajectory, with real GDP projected to grow by 6.5% in 2024 25 and 6.6% in 2025 26, one of the fastest-growing major reaffirming economies globally.

A key pillar of this momentum is the strength of domestic consumption, underpinned by rising disposable incomes, rapid urbanization, and a growing middle class. This is being further reinforced by fiscal measures such as the enhanced income tax exemption limit to 12 lacs in Union Budget 2025 26, which is expected to boost household spending and demand across sectors like retail and consumer durables. At the same time, rural consumption is showing a meaningful recovery, driven by a favorable monsoon, improved farm output (3.5% growth in 2024 25), and signs of increasing rural incomes.

Indias sectoral growth has remained broad-based, led by the services sector, which contributes over 53% of GDP. Continued growth in IT, financial services, and digital platforms has positioned India as the second-largest exporter of telecommunications, computer, and information services globally. Complementing this, the industrial sector has also gained momentum with a 6.2% growth, reflecting strong capital investments in manufacturing, energy, and infrastructure.

Indias external sector performance has further strengthened its macroeconomic stability. During April December 2024, merchandise exports rose by 6%, services exports by 11.6%, and the current account deficit narrowed to 1.2% of GDP. This improvement has been supported by robust remittance inflows, increased FDI inflows (up 17.9%), and rising foreign exchange reserves, which stood at USD 640.3 Bn providing a comfortable buffer against global volatility.

While Indias growth outlook remains resilient, inflation dynamics have improved markedly, creating room for monetary easing. Retail inflation eased to a six-year low of 2.82% in May 2025, driven by sustained deflation in key food categories and contained core inflation. This trend has been supported by record Rabi crop output, a sharp decline in vegetable and pulses prices, and the forecast of an early and above-normal monsoon, which bodes well for Kharif crop prospects and future food supply.

With inflationary pressures receding and expectations moderating, particularly in rural areas, the Reserve Bank of India responded with a bold 50 basis points cut in the repo rate on June 6, 2025, bringing it down to 5.50%. This follows two earlier cuts since February 2025, totaling a 1% reduction in the repo rate for the year. Alongside this, the policy stance was shifted from ‘accommodative to ‘neutral, signaling a more cautious and data-driven approach to future rate decisions.

For Manorama Industries, this has translated into lower financing costs, improved liquidity, and reduced working capital pressures. These tailwinds are enabling greater investment in capacity expansion and innovation across its portfolio of plant-based fats such as sal butter, mango kernel oil, and cocoa butter equivalents (CBE). With rising demand from confectionery, bakery, snack, and personal care sectors, and favourable cost dynamics, Manorama is well-positioned to strengthen its competitiveness and scale its presence in global markets.

Global Cocoa Butter Equivalent (CBE) Industry

The global Cocoa Butter Equivalent (CBE) market is gaining increasing significance as a strategic solution within the chocolate and confectionery industry, addressing the challenge of rising cocoa butter prices and supply constraints while maintaining product quality. Valued at USD 1.23 Bn in 2024, the market is projected to expand steadily to USD 1.32 Bn in 2025 and reach USD 2.15 Bn by 2033, reflecting a compound annual growth rate (CAGR) of 6.12%. This growth is closely linked to evolving consumer preferences and cost pressures in the chocolate industry. As global de-mand for confectionery rises, especially in Europe and Asia, manufacturers are increasingly adopting CBEs to ensure consistent product quality while managing input costs amid cocoa price volatility.

In addition to being cost-effective, CBEs offer greater formulation flexibility and enhanced stability in various climatic conditions, which is particularly beneficial for manufacturers operating in tropical regions. The food and beverage sector remains the dominant application segment, with CBEs widely used in chocolate, bakery items, spreads, and confectionery fillings.

Consumer preferences are also shifting toward ethically sourced, sustainable, and health-conscious ingredients, prompting the development of CBEs with improved nutritional profiles and lower saturated fats. Although the production of raw materials like palm oil continues to raise environmental concerns, initiatives promoting sustainable sourcing practices are gaining traction across the industry.

Regionally, Europe leads global consumption, supported by regulatory frameworks allowing up to 5% CBE incorporation in chocolate products, and countries like Belgium process nearly 40% of their cocoa imports into CBEs and related products. Concurrently, North America is witnessing steady growth in CBE use, fueled by growing consumer demand for plant-based, affordable ingredients despite regulatory caps limiting substitution levels.

This landscape exemplifies a broader industry shift, where manufacturers balance cost management with a growing focus on sustainable and transparent supply chains. By incorporating CBEs sourced from responsibly managed oils, companies not only enhance supply chain resilience but also meet rising consumer demand for sustainability. This strategic alignment ensures product quality remains intact while positioning the CBE market for sustained growth amid evolving global market dynamics.

(Source: https://straitsresearch.com/report/cocoa-butter-equivalent-cbe-market)

Global Specialty Fats and Butters Market

The global Specialty Fats and Oils Market is growing steadily, valued at USD 16.3 Bn in 2024 and expected to reach USD 31.2 Bn by 2034, with a CAGR of 6.7%. Growth is driven by increased consumer demand for healthier, plant-based, and trans-fat-free food options, as well as regulations limiting trans fats in many countries. The bakery and confectionery sectors contributesignificantlyto the demand because they require fats thatdeliverspecifictexture and shelf life qualities.

Key growth drivers include:

North America is the largest regional market, making up about 45.9% of global sales, supported by a developed food industry and high consumer interest in functional and plant-based fats. New technologies like cultivated fats and interesterified traction, allowing producers to offer healthier and more sustainable alternatives. The markets growth reflects a focus on product quality, health benefits, and sustainability, making specialty fats and oils an important part of the food ingredients industry going forward.

(Source: https://market.us/report/specialty-fats-and-oils-market/)

Specialty Fats and Oils Market Segmentation Highlights (2024)

Global Chocolate Industry Overview

The global chocolate market is on a steady growth trajectory, projected to increase from USD 138.45 Bn in 2024 to USD 205.39 Bn by 2033, reflecting a compound annual growth rate (CAGR) of 4.48%. This growth is largely driven by evolving consumer preferences toward premium, health-oriented products, particularly dark, organic, and nutrient-rich chocolates.

Regional trends illustrate varied consumption dynamics. North America is experiencing increased demand for healthier chocolate options, while Europe maintains its focus on artisanal quality. The Asia-Pacific region is rapidly expanding due to rising incomes and urban lifestyles, and the Middle East is witnessing notable growth in the luxury segment supported by sectoral investments.

Health and wellness are key innovation drivers, encouraging the rise of plant-based, dairy-free, and functional chocolates that include superfoods and alternative ingredients. New flavor innovations ranging from herbs and spices to savory blends are appealing to adventurous consumers.

Sustainability continues to shape industry practices, with brands emphasizing ethical sourcing, eco-friendly packaging, and greater supply chain transparency. These initiatives reflect a broader shift toward environmentally and socially responsible production.

Chocolate is reaching a diverse audience through robust distribution networks. Physical retail formats like supermarkets and convenience stores remain vital, while online platforms are gaining traction as digital commerce expands. Agility and innovation remain critical for staying aligned with shifting market dynamics.

(Source: https://www.globenewswire.com/news-release/2025/02/19/3028512/28124/en/Chocolate-Market-Growth-Trends-and-Forecast-Report-2025-2033-with-Nestl%C3%A9-Mondelez-AMUL-Industries-The-Hershey-Company-Meiji-Saputo-Chocoladefabriken-Lindt-and-Sprungli-Hotel-Chocol.html)

Global HoReCa Market Overview

The Hotels, Restaurants, and Catering (HoReCa) market encompasses businesses engaged in hospitality services, including accommodation, dining, and event catering. This sector plays a vital role in job creation, tourism development, and the delivery of essential public-facing services. Valued at USD 3,394.6 Bn in 2023 and USD 3,574.5 Bn in 2024, it is projected to grow to USD 6,449.35 Bn by 2032, exhibiting a compound annual growth rate (CAGR) of 6.70%. This growth is primarily driven by urbanization, rising disposable income, and evolving food consumption patterns across emerging markets.

Key Growth Drivers

Growth is supported by digital booking platforms and increased infrastructure investment, such as the notable rise in new construction orders across developed and emerging economies, which enhances hospitality capacity and service readiness.

Innovation is important in the industry, with smart kitchen equipment, energy-efficient technology, and online ordering systems improving service and efficiency. Consumer preferences are shifting toward health-focused and sustainable food options, such as plant-based menus and food delivery. Digital food safety management systems are also being adopted to improve compliance and operations.

Regionally, Asia-Pacific is the largest market in 2024, while North America is expected to see the fastest growth. This growth is supported by tourism, themed events, and business travel.

The sector is also seeing mergers and acquisitions aimed at strengthening specialized services.

Global Confectionery Industry Overview

The global confectionery market is experiencing steady growth, valued at USD 368.31 Bn in 2024, with projections to reach USD 386.03 Bn in 2025, showing a growth of 4.8%. Growth is driven by indulgence, premiumization, and evolving consumer tastes. Further, the industry is expected to register a steady growth in the next few years, expanding to USD 464.12 Bn in 2029 at a CAGR of 4.7% from 2025 to 2029.

Key Segments and Trends

Chocolate Confectionery

Highlights

Dominant category, boosted by premium, functional, and seasonal offerings.

Demand is being driven not only by indulgence and emotional appeal but increasingly by premiumization and functionality, with consumers seeking added benefits such as protein enrichment, fiber content, and immunity-boosting ingredients.

The industry is also witnessing a digital evolution, with brands leveraging e-commerce, direct-to-consumer (DTC) channels, and AI-driven marketing to deliver personalized experiences.

Sugar Confectionery

Highlights

Growing in emerging markets via flavor or textural innovation.

These capabilities are enhancing supply chain efficiency, demand forecasting, and consumer targeting.

Regionally, North America and Europe remain mature, innovation-centric markets focused on health and sustainability. In contrast, Asia-Pacific is the fastest-growing region, fueled by rising incomes and evolving taste preferences. Emerging markets across Latin America, the Middle East, and Africa offer incremental growth

Price Points

Highlights

Mid-range dominates; luxury grows fastest due to artisanal and ethical demand.

opportunities driven by urbanization and increasing retail access.

However, the sector faces notable challenges. Health concerns have led to tighter regulatory oversight, including sugar taxes and labeling norms, prompting reformulation and innovation. Meanwhile, volatility in raw material prices notably in cocoa, sugar, and dairy, continues to pressure margins amid climate and geopolitical risks.

Global Cosmetics Industry Overview

The global cosmetics market remains strong and is undergoing rapid transformation. Valued at USD 335.95 Bn in 2024, it is expected to surpass USD 354.68 Bn in 2025 and reach USD 556.21 Bn by 2032, exhibiting a CAGR of 6.64% between 2025 and 2032. Fueled by increasing demand for skincare, natural ingredients, and digital innovation, the markets growth reflects changing consumer preferences toward clean, inclusive, and effective beauty products.

Market Breakdown

Segment	Status and Opportunity
Product Category	Skin and sun care leads with 40%+ share; deodorants and fragrances growing fastest (8.7% CAGR)
Gender Focus	Womens segment dominates; unisex products growing at fastest rate ( 8.1% CAGR)

Distribution Channels

Asia-Pacific remains the largest regional market (USD 1,372.1 Bn in 2022), led by population growth, rising incomes, and a strong innovation base in K-beauty and J-beauty. North America is the fastest-growing region, fueled by premium product demand and digital adoption.

Europe retains strength through legacy luxury brands, while LATAM and MEA are benefiting from rising urbanization and tourism.

Clean beauty and sustainability are reshaping consumer expectations, with growing demand for ethically sourced, paraben-free, and cruelty-free products. Global regulatory changes banning animal testing are accelerating innovation in safe, sustainable alternatives. Further, male grooming and unisex products are gaining traction, with mens cosmetics projected to grow at a CAGR of 5.2%, reflecting a broader shift toward inclusive, gender-neutral self-care.

One of the most transformative shifts in the cosmetics industry is the rapid rise of e-commerce, expanding at a CAGR of 8.9%, driven by convenience, variety, and peer reviews. Social commerce platforms have become powerful tools for product discovery and direct sales, especially in markets like the UK, where social media is among the top

Brick and mortar specialty stores lead; online sales fastest expanding (~8.9%) beauty platforms. Technology is also a growth engine, with AI and AR enabling personalized skincare, virtual try-ons, and smart diagnostics, boosting both engagement and conversion rates, especially online.

In conclusion, the global cosmetics market is characterized by strong consumer demand, rapid digital transformation, evolving demographic trends, and rising sustainability awareness.

Indian Specialty Fats and Butter Market

The Indian specialty fats and oils market is on a strong growth path, valued at USD 664.8 Mn in 2024 and projected to reach USD 1,080.1 Mn by 2030, registering a CAGR of 8.1%. This growth is driven by rising demand from the food processing, bakery, confectionery, dairy, and personal care sectors, as well as shifting consumer preferences toward convenience, health, and sustainability.

The Indian specialty fats and oils market is poised for sustained, high-value growth, supported by:

Ev olving consumer demands for he alth-conscious and sustainable foods Growth in industrial food applications Premiumization trends in both food and personal care segments Go vernment policy support and increasing domestic processing investments

Despite challenges related to price volatility and import dependence, the market remains attractive for both global players and domestic manufacturers, especially in high-margin segments like CBEs and functional fats.

(Source: https://www.grandviewresearch.com/horizon/outlook/specialty-fats-oils-market/india#:~:text=India%20specialty%20fats%20%26%20 oils%20market%20highlights,USD%201%2C080.1%20million%20by%202030)

Indian Chocolate Market Overview

The chocolate industry forms a confectionery significant market, driven by rising disposable incomes, urbanization, and shifting consumer preferences. The sector is set to expand from USD 2.48 Bn in 2025 to USD 3.58 Bn by 2030, registering a CAGR of 7.63%.

Indias demographic advantage, with over 65% of the population under the age of 35, is a major contributor to demand. Younger consumers are increasingly drawn to indulgent snacking options and are actively seeking low-sugar, dark, and health-focused alternatives. This trend is further supported by growing awareness of global consumption patterns and evolving lifestyle habits.

Greater accessibility through organized retail and digital platforms is facilitating wider distribution across rural and urban areas. With internet penetration reaching 48.7% in 2023, online retail has become a key driver, offering convenience and variety to a tech-savvy audience in smaller towns and cities.

Continuous innovation in product formats, flavors, and packaging is expanding market reach. Artisanal and sugar-free options are gaining popularity, while festive gifting trends are fueling demand for assorted and boxed chocolates. These offerings cater to diverse preferences and occasions, strengthening brand-consumer connection.

Indian HoReCa Market Overview

The Indian HoReCa market stood at USD 212.16 Bn in 2023 and is expected to grow to USD 223.41 Bn in 2024, reaching USD 442.5 Bn by 2035, reflecting a CAGR of 6.41% from 2025 to 2035. This robust growth highlights the sectors vital role in Indias economy and its dynamic response to evolving consumer behavior, urbanization, and digital transformation.

Key Growth Drivers

Urbanization

With Indias urban population projected to reach 600 Mn by 2031, there is growing demand for diversified dining and hospitality experiences.

Rising Incomes

Middle-class income growth (~8% annually) fuels discretionary spending on eating out and hospitality services.

Digital and Social

Influence

Social media (450Mn+ users) drives demand for visually appealing dining experiences, aiding marketing, and consumer engagement.

Tourism Expansion

Domestic tourism is rising (~20% growth), supported by initiatives like ‘Incredible India, boosting demand for hotels and restaurants.

The market is segmented by category into single outlets and chain establishments. Single outlets continue to thrive by offering localized, niche culinary experiences, while HoReCa chains benefit from standardization, scalability, and strong brand recall, particularly in fast food and delivery-friendly formats. By 2035, the HoReCa chain segment is expected to reach USD 282.21 Bn Service-wise, hotels benefit from the tourism surge, restaurants are embracing cultural fusion and innovation, cafes cater to youth-driven social needs, and pubs are growing in line with shifting lifestyle norms and urban nightlife culture.

Despite opportunities from expanding consumer demand, digital delivery, and sustainability trends, the sector faces hurdles such as regulatory complexities and supply chain challenges. However, the overall outlook remains optimistic.

With consumer preferences evolving toward healthier, tech-enabled, and environmentally responsible dining, the Indian HoReCa market is well-positioned to remain a central pillar of economic and lifestyle development in the coming decade.

Indian Confectionery Market Overview

The confectionery market in India is showing limited growth due to increasing health awareness, competition from healthier snack alternatives, fluctuatingraw and material prices. However, the segment continues to attract consumers because of the convenience and indulgence associated with confectionery products. In 2025, the market is projected to generate USD 6.56 Bn in revenue, with a CAGR of 4.74% between 2025 and 2030.

Health consciousness is leading to a demand for products that offer nutritional benefits. Consumers are opting for sugar-free and organic confectionery, influenced by awareness of the health effects of excess sugar and artificial ingredients. The shift also includes a preference for locally sourced and sustainable ingredients. These preferences are supported by government efforts promoting healthier eating patterns.

There is also a rising demand for premium products, with consumers willing to pay more for higher quality. While this trend provides growth opportunities, it may present cost and supply chain challenges for smaller companies. In addition, regional tastes continue to influence product choices, with a consistent demand for traditional sweets and snacks. Regulatory differences and varying tax rates across

Indian states further impact production and distribution.

From a macroeconomic standpoint, the market is influenced by consumer spending, population growth, and policy support. An expanding middle class and increasing disposable income are enabling wider market access. However, inflation and unstable raw material costs remain key challenges. Volume is expected to reach 1.48 Bn kg by 2030, while per capita consumption is estimated at 1.0 Bn in 2025. Per capita revenue is projected at USD 4.48 in 2025.

(Source: https://www.statista.com/outlook/cmo/food/confectionery-snacks/confectionery/india)

Indian Cosmetics Market Overview

The Indian cosmetics sector is undergoing considerable transformation driven by evolving consumer preferences and the expansion of digital platforms across urban and semi-urban regions. The market is estimated at USD 14.6 Bn in 2024 and is projected to reach USD 24.3 Bn by 2033, registering a CAGR of 5.9%. This growth is supported by rising disposable incomes, changing beauty standards, and a marked increase in online sales, which are expected to expand grow at a CAGR of 31%, reaching USD 37 Bn by 2025.

Segment-Wise Insights

Skincare

Skincare holds the largest share of the cosmetics market at USD 8.4 Bn in 2024. Demand is driven by a preference for natural, herbal, and highly efficacious products, as well as innovations in dermatology-based and anti-aging formulations.

Haircare, Body Care and Color

Cosmetics

Haircare, Body Care & Color Cosmetics categories continue to show steady growth, particularly in premium and mid-tier segments. Hair oils, serums, and body lotions are seeing increased traction due to rising self-care trends.

Mens Grooming

The mens grooming segment is gaining momentum, reflecting a broadening consumer base.

Products such as beard care, skin lotions, and men-specific face cleansers are contributing to this growth.

The industry offers considerable opportunities driven by increased urbanization and consumer openness to product innovation. However, challenges remain, including stringent regulatory frameworks and intensifying competition from both established and emerging players, particularly those emphasizing sustainability and ethical sourcing. Effectively navigating these dynamics will be essential for stakeholders aiming to benefit from the growth potential within the Indian cosmetics market.

Company Overview

Manorama Industries Limited (also referred to as ‘Manorama Industries, ‘Manorama, ‘The Company or ‘We), established in 2005, is a global pioneer in the manufacturing of Cocoa Butter Equivalents (CBE), specialty fats and butters, and a wide range of exotic, plant-based products derived from tree-borne seeds. We operates on a unique and sustainable ‘Waste to Wealth model, sourcing underutilized or discarded seeds from forests and converting them into high-value, food-grade inputs for the global food and cosmetic industries.

Our key raw materials include Sal seeds, Mango kernels, Kokum, and Mowrah seeds from India, as well as Shea nuts sourced from West African nations. We have built a deep-rooted procurement ecosystem, supported by a multi-decade-long engagement with millions of tribal and forest-dwelling communities across thousands of collection centers. All our transactions are conducted transparently through banking channels, ensuring traceability and financial inclusion.

We offer customized solutions tailored to the needs of leading global clients across the confectionery, chocolate, and personal care industries. As a globally recognized player in specialty fats, we are the only Company to offer a complete portfolio of exotic fats under one roof.

Global Footprint

Manorama Industries Limited has a well-established global footprint spanning raw material sourcing, manufacturing, and sales. We sources tree-borne seeds including Sal seeds, Mango kernel, Kokum, Mowrah, and Shea nuts from India and West Africa through a network of millions of tribal collectors and thousands of collection centers. To strengthen Shea nut procurement, we operate six subsidiaries across West African countries: Ghana, Nigeria, Benin, Togo,

Burkina Faso, and Ivory Coast. The Raipur manufacturing facilitys proximity to Visakhapatnam port supports efficient logistics for these imports.

We export cocoa butter equivalents, specialty fats, and exotic butters to multiple countries globally, supplying sectors such as confectionery, chocolate, and cosmetics worldwide, including key markets like Europe, Russia, Middle East, Japan, Latin

America, and the US, among others. Subsidiaries in the UAE, Brazil and six West African countries help in expanding our global presence and catering to new regional markets. We are recognized as a ‘Three Star Export House by the Government of India, reflecting our export strength and compliance.

Global Presence and Strategic Expansion

We have developed a strong global footprint through a strategic network of subsidiaries and operational hubs. We have set up six subsidiaries in West Africa to streamline raw Shea nut procurement and ensure reliability in sourcing. Additionally, our subsidiary in the UAE serves as a regional hub for sourcing and client engagement across the MENA region. In Latin America, we have established Manorama Latin America LTDA in Brazil, targeting one of the largest emerging markets for CBE and stearin-based products.

Looking ahead, we are actively evaluating our next phase of growth for the period between 2025-26 and 2030-31. Our focus is on:

F orward integration through entering the market of alternative cocoa butter equivalent (CBE) F orward integration through a Palm mid fraction manufacturing facility F orward integration through the production of industrial and compound chocolates Backward integration through setting up a processing unit for Sal, Mango and other exotic seeds in Raipur, India Backward integration through a prepress and solvent extraction plant in Burkina

Faso.

The above projects are carefully selected based on strategic alignment and payback period

Manufacturing Capacity and Capabilities

Our state-of-the-art manufacturing facility at Birkoni, near Raipur (Chhattisgarh), is a fully integrated unit that spans the entire processing spectrum, from solvent extraction and refining to interesterification and fractionation. Fractionation, in particular, is a core process for us, as it enables the precise separation of fats into their solid and liquid components. This is critical for producing Cocoa Butter Equivalents (CBE) and a range of high-performance specialty fats and butters that meet the stringent functional and sensory needs of end-user industries.

Total Integrated Capacity (in MTPA)

Seed Milling (Expeller)	90,000
Solvent Extraction Plant	90,000
Refinery	45,000
Interesterification	30,000
Fractionation	40,000
	15,000
Blending Station and Packing^	Expected to be Increased to 30,000 in 2025-26

Opportunities

Diverse Agro-Climatic Conditions	Rising Demand and Export Potential
Indias varied agro-climatic zones offer a rich and stable supply of raw materials, enabling consistent sourcing and reducing dependency on any single region. This diversity supports year-round produc- tion and facilitates value addition across multiple agricultural segments.	The increasing domestic appetite for processed foods, combined with a strategic focus on expanding exports, presents substantial growth opportunities. Enhanced infrastructure and global trade agreements further bolster Indias potential as a key player in international markets.
Technological Advancements	Elevated Spending Power and Luxury
Advancements in sustainable processing technologies have led to the development of products with extended shelf lives and improved quality. These innovations not only boost competitiveness but also enhance investor confidence by demonstrating long- term viability, scalability, and alignment with ESG- focused capital flows.	With rising disposable incomes, consumers are increasingly seeking premium and luxury products. This shift encourages companies to diversify their portfolios, introducing high-end and exclusive of- ferings that cater to evolving lifestyle aspirations.
Growing Market	Government Initiatives
The chocolate and cosmetic sectors are expanding rapidly, driven by changing consumer behavior, in- creased health and wellness awareness, and stronger purchasing power. This growth opens avenues for new product lines and emerging brands to capture market share.	Supportive government policies aimed at easing business operations and encouraging investment are accelerating sectoral growth. Initiatives that focus on innovation, skill development, and export promotion are creating a conducive environment for sustained industry expansion.
Export Potential	Rise of Ethical Beauty Products
Indias geographical advantage and availability of high- quality raw materials make it an attractive sourcing hub for industries like chocolate, confectionery, processed foods, and cosmetics. This facilitates stronger export opportunities and deeper integration into global supply chains.	There is a rising preference for beauty products that are cruelty-free, environmentally sustainable, and ethically produced. This trend is driving brands to adopt responsible manufacturing practices and develop offerings aligned with conscious consumerism.

Financial Overview

2024-25 marked a pivotal year in our financial journey. We achieved a revenue of 771 crore, registering a robust 69% year-on-year growth. Our export operations contributed 73% of the total revenue, reaffirming our strong global orientation and deepening relationships with international customers. Our EBITDA rose to 191 crore, a 2.6x increase over the previous year, with EBITDA margins expanding to 24.8%, driven by improved operating leverage and continued cost optimization. Profit After Tax (PAT) nearly doubled to 112 crore, delivering a PAT margin of 14.5%.

Over the period 2020-21 to 2024-25, we have delivered exceptional compound growth 40% CAGR in revenue, 54% in EBITDA, and 65% in PAT.

With rising capacity utilization, a broadening value-added product mix, and continued customer acquisition across global markets, we expect to cross 1,050 crore, in revenue in 2025-26. The Board has also recommended a final dividend of 0.60 per share, reflecting our sustained focus on enhancing shareholder value.

Revenue Mix and Geographic Distribution

Our export-led business model remains one of our key strengths. In 2024-25, exports accounted for 73% of our total revenue, while the domestic market contributed 27%. These ratios remained consistent across quarters, reinforcing our dependable presence in both international and domestic markets. Our ability to cater to global chocolate and confectionery majors is supported by a robust sourcing network and technologically advanced manufacturing capabilities.

Performance by Product Category

Our product portfolio continues to evolve in favor of higher-margin, niche offerings. In 2024-25:

Cocoa Butter Equivalent (CBE) contributed approximately 27% of total revenue, up significantly from around 10% in the previous year.

Stearin also contributed 45%, by revenue

Together, CBE and stearin represented around 72% of total and nearly 70% of our revenue, underscoring our strategic focus on value-added products with consistent global demand.

CBE prices are not directly impacted by cocoa butter price volatility, as our diversified raw material sourcing and reliance on forward contracts provide pricing stability. With contract durations typically ranging from three months to one year, we are able to ensure predictable realizations and limit our exposure to short-term commodity price swings.

Value from By-Products

Aligned with our ‘Waste to Wealth philosophy, we also generate value from by-products, such as de-oiled cake, which is sold to the Indian cattle feed industry. This segment contributed 432 Mn in 2024-25, highlighting our commitment to full-value utilization of inputs and operational efficiency.

Details of significant changes in key financial ratios, along-

Particulars	Numerator	Denominator	As of March 31, 2025	As of March 31, 2024	% Variance	Explanation for Change (>25%)
Current Ratio
The current ratio indicates a Companys overall liquidity position. It is widely used by banks in making decisions regarding the advancing of working capital credit to their clients.	Current Assets	Current Liabilities	1.67	1.62	3.18
Debt-Equity Ratio
The debt-to-equity ratio compares a Companys total debt including lease and liablities to shareholders equity. Both of these numbers can be found in a Companys balance sheet.	Total Debt including lease and liablities Net Profit After Taxes +	Total Shareholders Equity	1.04	1.03	1.59
Debt Service Coverage Ratio
Debt service coverage ratio is used to analyze the firms ability to pay off current interest and installments.	Depreciation and Amortizations + Interest +Loss/ (Profit) on Sale of PPE etc.	Interest + Principal Repayments	3.43	2.44	40.39	Increase in profitability as compare to previous year.
Return on Equity Ratio
It measures the profitability of equity funds invested in the Company. The ratio reveals how profitability of the equity holders funds has been utilized by the Company. It also measures the percentage return generated to equity-holders.	Net Profit After Taxes	Average Shareholders Equity	28.05%	12.63%	122.15	Increase in profitability as compare to previous year.
Inventory Turnover Ratio
This ratio is also known as stock turnover ratio, and it establishes the relationship between the cost of goods sold during the period or sales and average inventory held during the period. It measures the efficiency with which a Company utilizes or manages its inventory.	Sales	Average Inventory	5.25	3.86	35.84	Substantial increase in turnover during the year.
Trade Receivables Turnover
Ratio
It measures the efficiency at which the Company is managing the receivable.	Net Credit Sales	Average Trade Receivables	10.69	13.13	(18.63)
Trade Payables Turnover Ratio
It indicates the number of times sundry creditors have been paid during a period. It is used to judge the requirements of cash for paying sundry creditors. It is calculated by dividing the net credit purchases by average creditors.	Net Credit Purchases	Average Trade Payables	20.71	21.87	(5.27)
Net Capital Turnover Ratio
It indicates a Companys effectiveness in using its working capita	Net Sales	Working Capital	2.41	2.14	12.64
Ratio NetProfit
It measures the relationship between net profit and sales of the business	Net Profit	Net Sales	14.54%	8.77%	65.65	Increase in profitability as compare to previous year.
Return on Capital Employed
Return on capital employed indicates the ability of a Companys management to generate returns for both the debt holders and the equity holder. Higher the ratio, more efficiently in the capital being employed by the Company to generate return.	Earnings Before Interest and Taxes	Tangible Net Worth + Total Debt + Deferred Tax Liabilities	19.81%	10.62%	86.49	Increase in profitability as compare to previous year.

Risks and Concerns

Environmental and Social Risks in Tribal Areas

Manorama operates in forest-rich tribal regions of central India and West Africa, which present inherent environmental and social sensitivities. These areas are integral to the Companys diverse portfolio of natural raw materials including Sal, Mango, Kokum, Shea, and other exotic fats, making responsible sourcing vital to supply chain continuity and business sustainability. Any disruption in these regions could impact operations, infrastructure, and stakeholder trust. To mitigate such risks, Manorama adheres strictly to local environmental and social regulations, engages transparently with tribal communities, communities, conducts regular environmental impact assessments, and invests in inclusive development initiatives aimed at community welfare and long-term partnership.

Regulatory and Compliance Risks

Operating in a highly governed sector, Manorama is subject to numerous local, national, and international regulations. These include compliance with product safety standards, labeling norms, and environmental protocols. Any non-adherence canresultfines,product withdrawals, or reputational harm. Regulatory updates or new legislative requirements may necessitate alterations in production methods or formulations. Manorama takes a proactive stance by closely aligning its practices with legal standards to remain compliant and minimize risk.

Shifts in

Evolving consumer habits, economic shifts affecting disposable income, and lifestyle changes may influence demand for Manoramas premium products like specialty fats used in confectionery and cosmetics. In response, the Company has expanded its market presence across diverse geographies to reduce dependency on any one market and ensure consistent business performance.

Supply Chain Disruptions

Manoramas global operations depend on a multifaceted supply chain that includes various vendors, logistics partners, and transport frameworks. Interruptions caused by environmental events, geopolitical instability, labor issues, or transportation bottlenecks can affect procurement and distribution. To mitigate these risks, Manorama employs a broad supplier base, fosters reliable partnerships, and engages in real-time monitoring and risk preparedness across its supply operations.

Foreign Exchange (Forex) Risk

As an export-centric organization, Manorama is affected by fluctuations in currency exchange rates, which can influence financial stability. To manage this exposure, the Company implements a structured forex risk management policy, including regular exposure reviews and the use of hedging instruments to counter currency volatility.

Cybersecurity Risks

In todays increasingly digital business environment, Manorama faces threats such as data intrusions, cyberattacks, and digital fraud. A successful breach could compromise sensitive information and disrupt operations. The Company addresses these concerns by employing robust cybersecurity measures like advanced encryption, routine vulnerability checks, employee awareness programs, and collaboration with cybersecurity professionals to safeguard its systems.

M Saturation Competition and

The specialty fats and butters industry faces growing competition due to new entrants, technological innovations, and evolving consumer demands. This may lead to pressure on pricing and market share. Manorama mitigates these challenges by focusing on differentiated product quality, sustainable sourcing practices, ongoing innovation, and nurturing long-term customer relationships to maintain its competitive standing.

Outlook

Looking ahead, we are focused on increasing the share of CBE in our revenue. We continue to develop adjacent offerings such as no-palm spreads, bakery fats, and frozen dessert applications, which are gaining traction in export markets. With rising capacity utilization, a richer product mix, and deeper global partnerships, we are well positioned to achieve sustained margin expansion and earnings growth in the years ahead.

Internal Financial Control

System

Manorama Industries Limited has a structured internal financial control system in place, covering both business operations and financial reporting. These controls are designed in line with the Companys size and operational complexity.

The control framework includes clearly documented policies, guidelines, and standard operating procedures (SOPs). Regular audits are carried out by internal auditors to ensure compliance.

Any deviations are identified, and corrective measures are recommended.

The Audit Committee reviews these audit reports and ensures that necessary actions are taken, maintaining the effectiveness and consistency of the internal control system.

HR and Industrial Relations

Manoramas HR and industrial relations focus on its long-standing connection with tribal communities who collect raw materials. The Company depends on a network built over two Decades, involving millions of tribal collectors and thousands of seed collection centers in India and West Africa, creating a strong barrier to competitors.

The model empowers tribal women by ensuring payments reach them directly through banking channels, typically via village leaders, with audit teams monitoring compliance. As of March 31, 2025, the Company employed 498 workers contributing to its operations.

The Company has a well-versed HR team. Employee benefit expenses were 47.92 crore, in 2024-25. The Company also has ESOP scheme for employee benefit.

While detailed industrial relations policies for manufacturing are limited, the Birkoni plant is managed by experienced professionals under established governance. The Company maintains ethical, transparent relations with employees and sourcing communities.

Cautionary Statement

This Management Discussion and Analysis Report contains certain ‘forward-looking statements based on assumptions about the Companys current and future business strategies and operating environment. Actual results may differ materially due to various risks and uncertainties, including economic and political conditions in India and abroad, fluctuations in interest rates and securities markets, changes in regulations and government policies affecting the Companys business, and challenges in implementing strategies. The information provided is as of the stated date, and the Company is not obligated to update these statements.

Market data and other information have been sourced from reliable channels or internal estimates, but their accuracy and completeness cannot be assured.