Mayank Cattle Food Ltd Management Discussions

ECONOMIC OVERVIEW GLOBAL ECONOMY

Global growth is projected at 3.3 percent both in 2025 and 2026, below the historical (2000 19) average of 3.7 percent. The forecast for 2025 is broadly unchanged from that in the October 2024 World Economic Outlook (WEO), primarily on account of an upward revision in the United States offsetting downward revisions in other major economies. Global headline inflation is expected to decline to 4.2 percent in 2025 and to 3.5 percent in 2026, converging back to target earlier in advanced economies than in emerging market and developing economies.

Medium-term risks to the baseline are tilted to the downside, while the near-term outlook is characterized by divergent risks. Upside risks could lift already-robust growth in the United States in the short run, whereas risks in other countries are on the downside amid elevated policy uncertainty. Policy-generated disruptions to the ongoing disinflation process could interrupt the pivot to easing monetary policy, with implications for fiscal sustainability and financial stability. Managing these risks requires a keen policy focus on balancing trade-offs between inflation and real activity, rebuilding buffers, and lifting medium-term growth.

Where inflation is proving more sticky, central banks are moving more cautiously in the easing cycle while keeping a close eye on activity and labor market indicators as well as exchange rate movements. A few central banks are raising rates, marking a point of divergence in monetary policy.

Global financial conditions remain largely accommodative, again with some differentiation across jurisdictions. Equities in advanced economies have rallied on expectations of more business friendly policies in the United States. In emerging market and developing economies, equity valuations have been more subdued, and a broad-based strengthening of the US dollar, driven primarily by expectations of new tariffs and higher interest rates in the United States, has kept financial conditions tighter.

Economic policy uncertainty has increased sharply, especially on the trade and fiscal fronts, with some differentiation across countries (Figure 1). Expectations of policy shifts under newly elected governments in 2024 have shaped financial market pricing in recent months. Bouts of political instability in some Asian and European countries have rattled markets and injected additional uncertainty regarding stalled progress on fiscal and structural policies. Geopolitical tensions, including those in the Middle East, and global trade frictions remain elevated.

The Outlook

IMF staff projections assume current policies in place at the time of publication. They incorporate recent market developments and the impact of heightened trade policy uncertainty, which is assumed to be temporary, with the effects unwinding after about a year, but refrain from making any assumptions about potential policy changes that are currently under public debate. Energy commodity prices are expected to decline by 2.6 percent in 2025, more than assumed in October. This reflects a decline in oil prices driven by weak Chinese demand and strong supply from countries outside of OPEC+ (Organization of the Petroleum Exporting Countries plus selected nonmember countries, including Russia), partly offset by increases in gas prices as a result of colder-than-expected weather and supply disruptions, including the ongoing conflict in the Middle East and outages in gas fields. Nonfuel commodity prices are expected to increase by 2.5 percent in 2025, on account of upward revisions to food and beverage prices relative to the October 2024 WEO, driven by bad weather affecting large producers. Monetary policy rates of major central banks are expected to continue to decline, though at different paces, reflecting variations in growth and inflation outlooks. The fiscal policy stance is expected to tighten during 2025 26 in advanced economies including the United States and, to a lesser extent, in emerging market and developing economies.

Global growth is expected to remain stable, albeit lack luster. At 3.3 percent in both 2025 and 2026, the forecasts for growth are below the historical (2000 19) average of 3.7 percent and broadly unchanged from October (Table 1; see also Annex Table 1). The overall picture, however, hides divergent paths across economies and a precarious global growth profile.

Policy Priorities

Against the backdrop of elevated uncertainty, policies need to rein in short-term risks and rebuild buffers while pushing ahead efforts to lift medium-term growth prospects.

Monetary policy should ensure that price stability is restored while supporting activity and employment. In economies in which inflationary pressures are proving persistent and the risk of upside surprises is on the rise, a restrictive stance will need to be maintained until evidence is clearer that the underlying inflation is sustainably returning to target. In economies in which activity is cooling fast and inflation is on track to durably go back to target, a less restrictive stance is justified.

Last but not least, multilateral cooperation is vital in containing fragmentation, sustaining growth and stability, and addressing global challenges. Trade policies should be consistent with the legal framework of the World Trade Organization (WTO), as well as being clear and transparent, to reduce uncertainty, lower volatility in markets, and mitigate distortions. Priorities should be given to restoring a fully and well-functioning WTO dispute settlement system, leveling the playing field, and achieving clarity and coherence of the desire among countries for greater resilience within the rules-based multilateral trading system.

Source:https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-january-2025

INDIAN ECONOMY

As per the first advance estimates released by the National Statistical Office, Ministry of Statistics & Programme Implementation (MoSPI), the real gross domestic product (GDP) growth for FY25 is estimated to be 6.4 per cent. From the angle of aggregate demand in the economy, private final consumption expenditure at constant prices is estimated to grow by 7.3 per cent, driven by a rebound in rural demand. PFCE as a share of GDP (at current prices) is estimated to increase from 60.3 per cent in FY24 to 61.8 per cent in FY25. This share is the highest since FY03. Gross fixed capital formation (GFCF) (at constant prices) is estimated to grow by 6.4 per cent.

On the supply side, real gross value added (GVA) is also estimated to grow by 6.4 per cent. The agriculture sector is expected to rebound to a growth of 3.8 percent in FY25. The industrial sector is estimated to grow by 6.2 per cent in FY25. Strong growth rates in construction activities and electricity, gas, water supply and other utility services are expected to support industrial expansion. Growth in the services sector is expected to remain robust at 7.2 per cent, driven by healthy activity in financial, real estate, professional services, public administration, defence, and other services. The analysis of growth trends in this chapter, hereinafter, is mostly based on the trends in the first half (H1) of FY25, on which the information base is more comprehensive.

The Outlook

A steady growth trajectory shapes the global economic outlook for 2024, though regional patterns vary. The near-term global growth is expected to be a shade lower than the trend level. The services sector continues to drive global expansion, with notable resilience in India. Meanwhile, manufacturing is struggling in Europe, where structural weaknesses persist. Trade outlook also remains clouded in the next year.

Inflationary pressures have been easing globally, though risks of synchronized price pressures linger due to potential geopolitical disruptions, such as tensions in the Middle East and the ongoing Russia-Ukraine conflict. Central banks have adopted more accommodative monetary policies. However, the pace of rate cuts varies across regions depending on the growth imperatives and the pace of disinflation, creating potential divergences in economic recovery.

On the domestic front, rebounding rural demand augurs well for consumption. Investment activity is expected to pick up, supported by higher public capex and improving business expectations. Capacity utilisation in manufacturing remains above the long-term average, and private sector order books have shown steady growth, alongside a rise in investment intentions. However, these gains could be tempered by the global excess capacities in sectors such as steel, leading to aggressive trade policies in search of demand.

Going forward, food inflation is likely to soften in Q4 FY25 with the seasonal easing of vegetable prices and Kharif harvest arrivals. Good Rabi production is likely to contain food prices in the first half of FY26. Adverse weather events and rise in international agricultural commodity prices, however, pose risks to food inflation. Global energy and commodity prices have softened in the recent past, making the core inflation outlook benign. However, risks remain on account of significant global political and economic uncertainties.

(Source: https://www.indiabudget.gov.in/economicsurvey/doc/echapter.pdf)

INDUSTRY OVERVIEW

GLOBAL ANIMAL FEED INDUSTRY

Livestock raising and the consumption of animal products make a crucial contribution to the economic and nutritional wellbeing of millions of people around the world. Animal feeds play a leading role in the global food industry and feed is the largest and most important component to ensuring safe, abundant and affordable animal proteins.

World compound feed production has reached over 1 billion tonnes annually. Global commercial feed manufacturing generates an estimated annual turnover of over US $400 billion. Commercial production or sale of manufactured feed products takes place in more than 130 countries and directly employs more than a quarter of a million skilled workers, technicians, managers and professionals.

IFIF and its Members are keenly aware of the demographic and sustainability challenges which lie ahead of the food and feed industry. The UN Food and Agricultural Organisation (FAO) estimates that the world will have to produce ca. 60% more food by 2050.

One of the challenges is that on top of the 1 billion tonnes of feed produced by the feed industry, around 300 million tonnes of feed is produced directly by on farm mixing. This poses challenges as food safety authorities do not regularly audit mixing by farmers and regulatory authorities only inspect when there is a problem. IFIF believes it is vital for the feed industry and for the sustainability of the whole feed and food chain that clear standards apply throughout the whole feed chain. We believe both industrial and on farm mixers should be controlled and inspected on a regular basis.

(Source: https://ifif.org/global-feed/industry/)

Global Feed Statistics

Today world compound feed production is estimated to be just over one billion tonnes annually. Global commercial feed manufacturing generates an estimated annual turnover of over US $400 billion.

The last years have continued to see an increase in the demand for animal protein worldwide, including for dairy. Generally we have seen a growth of production particularly in the developing world, with the developed world remaining more or less stable.

The United Nations Food and Agriculture Organization (FAO) estimates that by 2050 the demand for food will grow by 60% and that between 2010 and 2050 production of animal proteins is expected to grow by around 1.7% per year, with meat production projected to rise by nearly 70%, aquaculture by 90% and dairy by 55%. This already marks a growth factor of almost two, however if we were to extrapolate the growth rates of the last forty years forward to 2050, this would in theory quadruple the needs.

INDIAN ANIMAL FEED INDUSTRY

India currently represents one of the largest feed producers in the world. Animal feed includes various raw, processed and semi-processed products that are fed to livestock. Some of the most common feeds include pasture grasses, cereal grains, hay and silage crops, and other by-products of food crops, such as brewers grains, pineapple bran and sugar beet pulp.

These products are carefully formulated with the help of nutritional additives, like vitamins and minerals, to maintain the overall health of animals and improve the quality of various end-products, including milk. In this country, there has been a rise in public concern regarding the safety of animal-origin food products due to the prevalence of food-borne bacterial infections, bovine spongiform encephalopathy (BSE) and dioxin contamination. These concerns have prompted regulatory organizations to inspect and improve feeding practices in the country.

Recently, it was noted that raw materials used in the production of animal feed, like soybean meal, sorghum and maize, are being diverted for the consumption of humans, leading to a shortage in the feed industry. Furthermore, the expensive nature, and price and supply volatility of these raw materials is encouraging industry players to switch to sustainable and lower-cost ingredients for livestock production.

Some of these novel ingredients include insect meal and Distillers dried grain with solubles (DDGS). Besides this, currently has a separate set of livestock policies that focus on increasing the overall productivity. Some of the schemes that are acting in favor of the animal feed market include E-Pashu Haat, Livestock Insurance Scheme, Rashtriya Gokul Mission, and National Livestock Mission.

Key Market Segmentation:

The market categorized based on product type.

Breakup by Product Type:

Poultry Feed

Cattle Feed

Aquafeed

At present, poultry feed is the most popular product type in the market

OPPORTUNITIES

A. Growing Demand for Dairy Products: As the demand for dairy products increases, there is a corresponding rise in the need for high-quality cattle feed, presenting a significant market opportunity.

B. Government Support and Subsidies: Various government initiatives and subsidies aimed at improving agricultural productivity and supporting the dairy industry can provide financial and operational benefits.

C. Innovations in Animal Nutrition: Advancements in animal nutrition and feed technology can help the company develop superior products, improving cattle health and milk yield, thereby attracting more customers.

D. Expanding into New Markets: Expanding operations into emerging markets where dairy farming is growing can open new revenue streams.

E. Sustainability and Organic Products: With a growing consumer preference for organic and sustainable products, there is an opportunity to develop and market organic cattle feed.

F. Strategic Partnerships: Forming alliances with dairy cooperatives, veterinary services, and research institutions can enhance product offerings and market reach.

G. E-commerce and Digital Marketing: Leveraging e-commerce platforms and digital marketing strategies can help in reaching a broader customer base and improving sales.

THREATS

A. Market Competition: Intense competition from established players and new entrants in the cattle feed market can impact market share and profitability.

B. Fluctuating Raw Material Prices: Volatility in the prices of raw materials used in cattle feed production can affect the cost structure and profit margins.

C. Regulatory Challenges: Changes in government policies, regulations, and compliance requirements can pose operational challenges and increase costs.

D. Technological Disruptions: Rapid technological changes and the adoption of alternative feeding solutions could render existing products less competitive.

E. Supply Chain Disruptions: Disruptions in the supply chain due to geopolitical issues, transportation problems, or natural disasters can affect the timely delivery of products and raw materials

SEGMENT WISE AND PRODUCT WISE PERFORMANCE

The Company is engage into the business of manufacturing, mechanized expelling, packaging, trade and selling of Maize oil (Non-edible), Maize Cake (Cattle Feed), Maize Germ, Cotton cakes, Cotton Bales, Cotton Wash Oil, Cotton Seed, Cotton Soap and Gunny Bags.

(Amount in Lakhs)

Particular	Revenue from operations
	2024-25	2023-24
Cotton Bales	2650.10	2894.40
Cotton Cake	3016.67	262.13
Cotton Seeds	188.54	439.28
Cotton Wash Oil	1145.43	37.92
Empty Gunny Bags	104.98	138.78
Maize Oil	17921.26	13186.82
Maize Cake	14050.5	12070.18
Cotton Soap	2.65	-
Other Sale	5.67	-

OUTLOOK

We believe that Indias comparatively strong position in the external sector reflects the countrys generally positive outlook for economic growth. Company is focusing on bolstering our production capacity and expanding our presence across Gujarat. We are committed to enhancing the visibility and reputation of our cattle food offerings within the Indian market. By undertaking these strategic endeavors, we aim to reinforce our foothold in the industry, ensuring that our brand becomes synonymous with excellence and reliability among our valued customers. We desire to

Reinforce our brand gratitude

Continue focus on research and development

Enlarge our dealer network

Enlarge geographical reach

Focus on manufacturing cattle food products to cater to stipulate by health-conscious consumers

RISK AND CONCERNS

Supply Chain Disruptions: Any disruptions in the supply chain, such as transportation strikes or natural disasters, can affect our ability to procure raw materials and deliver finished products to our customers.

Competitive Pressure: The cattle feed industry is highly competitive, with numerous players vying for market share. We need to continuously innovate and improve our products to stay ahead of the competition.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUECY

The Company has put in place an adequate system of internal control commensurate with its size and nature of business to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the Company checks and verifies the internal control system and monitors them in accordance with the policy adopted by the Company. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

FINANCIAL AND OPERATIONAL PERFORMANCE

(in Lakhs)

Particulars	Financial Year
	2024-25	2023-24
Income From Operations	39,085.79	29,029.51
Other Income	37.03	33.73
Total Income	39,122.82	29,063.24
Total Expenses	38,411.77	28,663.14
Profit / (Loss) before Tax	711.05	400.10
Less: Tax Expenses	213.8	96.67
Net Profit / (Loss) for the year after Tax	497.25	303.43
Earning Per Shares (Basic in INR)	9.21	7.80

HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Company had cordial and harmonious industrial relations at all levels of organizations. The company believes that the industry has the tremendous potential to impact the society, nation and the world positively. Its employees are major stakeholders and their efforts have direct stake in the business prospectus of the organization. The employees have extended a very productive cooperation in the efforts of the management to carry the company to greater heights. The Company considers employees as their biggest competitive advantages. The Company takes initiative like training and development for its people to increase the performance. The Company has taken various steps to improve and enhance skill of its people. The Company has continued to give special attention to human resources and overall development.

Policies related to Prevention of Sexual Harassment at workplace ("POSH") and vigil mechanism / Whistle-blower are also available to all employees and workers. The Company is committed to creating and maintaining an atmosphere in which all employees can work together, without fear of sexual harassment, exploitation or intimidation. Whistle Blower Policy also enables employees to raise concerns about unacceptable, improper or unethical practices being followed in the organization, without necessarily informing their supervisors

Your Company is committed to identifying, preventing, and mitigating adverse human rights issues which affect employees, suppliers, and other external stakeholders. The Company offers various safeguards to all stakeholders and maintain them with respect for their privacy and dignity.

The Company would like to sincerely appreciate the valuable contribution and support of employees towards the performance and growth of the Company. The management team comprises of professionals with a proven track record. The Company continues to remain focused and sensitive to the role of human resources in optimizing results in all its areas of working and its industrial relations also continue to be cordial.

KEY FINANCIAL RATIO

Particular	31.03.2025	31.03.2024
Debtors Turnover	20.87	20.74
Inventory Turnover	11.66	9.63
Interest Coverage Ratio	2.95	2.19
Current Ratio	1.48	1.72
Debt Equity Ratio	1.13	1.31
Operating Profit Margin	4.52	4.55
Net Profit Margin	1.27	1.05
Return on Net-worth	15.63	11.90

CAUTIONARY STATEMENT

Certain statement made in this report describing Companys Objective, Projects, estimates and expectations may be forward looking statement within the applicable laws and Regulations. Actual results may differ from such expectations and forward looking statement due to various risk and uncertainties. Several factors affecting companys operation like economic condition affecting demand and supply, Government regulations and Tax Laws, Competitions prevailing at the relevant time, natural calamities etc. The Company assumes no responsibility to publicly amend, modify or revise any of these statements on the basis of any subsequent developments, information or events.