Nagarjuna Agri Tech Ltd Management Discussions

1. OVERVIEW REVIEW

Primarily, the Company had operated in the floriculture sector, with its core business involving cultivation and sale/export of roses. The Company has established greenhouse facilities and markets its products in domestic as well as international markets, including Europe and the Middle East.

In the last year, the Company was acquired by the promoters with more than 60% of control over the business size and model. The Company hence decided to change the over all structure and object clause of the Company to have growth and sustainability in the market.

During the year under review, the Company has decided to move in FMCG segment for expansion of business. The Board Composition changed during the year under review and later on, the Company has changed its main object from cultivation and sale of roses to a new variety of chain in FMCG segment. The Board has decided to diversify the business plans of the Company which will be benefited to both the company as well as the shareholders. Therefore, the Company has planned to move into Fast moving consumer goods (FMCG) sector and make it the major chunk of the portfolio for the welfare of the company. As FMCG is a vast area, the Company preferably choose to have namkeens, premium extruded snacks, bakery items on a larger range along with instant noodles.

Additionally, the Company has made Allenby Food 6t Beverages Private Limited its wholly Owned Subsidiary Company, by issuing equity shares on preferential basis to the shareholders of Allenby Food 6t Beverages Private Limited in proportion to their shareholding for consideration other than cash i.e., swap of Equity shares through preferential basis to augment future prospects of the Company.

By bringing the organizations together, the Company is not just expanding the portfolio but creating new possibilities for innovation, scale, and long-term value creation. The acquisition enhances our geographic footprint, particularly in North east states, West Bengal, Bihar Et Jharkhand and also further planning to have niche in states of Uttar Pradesh Et Odhisa in near future, allowing us to reach more consumers than ever before. The Company is also gaining a talented team with deep expertise in innovation, R&D, and brand building.

2. INDUSTRY STRUCTURE AND DEVELOPMENT

The FMCG sector in India has expanded steadily, supported by consumer-driven growth and higher product prices, particularly for essential goods. It provides employment to around three million people, accounting for approximately 5% of total factory employment in the country. As Indias fourth-largest sector, FMCG plays a vital role in the economy, with household and personal care products alone contributing 50% of total FMCG sales.

The industry is projected to maintain healthy momentum, supported by rising disposable incomes, a young consumer base, increasing brand awareness, and favourable government initiatives and policies. Household FMCG spending in India rose 8% to Rs. 17,792 crore (US$ 2.07 billion) by April 2025 and is expected to increase further to around Rs. 20,000 crore (US$ 2.27 billion) by the end of 2025, driven by higher consumption across staples as well as non-staples. More importantly, Indias vast middle-class population, which is larger than the total population of the USA, and its median age of just 27 are shaping consumption trends. Rising aspirations, greater financial inclusion, and social safety nets are further fuelling demand.

Looking ahead, Indias FMCG sector is expected to record a slight revenue increase of 100 to 200 basis points, bringing growth to 6 to 8% in FY26, supported by stable rural demand and a revival in urban markets. The urban segment currently contributes about 62% of total revenue, but rural India has emerged as a stronger growth driver in recent years. Semi-urban and rural regions now account for 50% of total rural spending on FMCG, with rising incomes and evolving consumer preferences narrowing the urban-rural gap.

3. OPPORTUNITIES AND STRENGTH

Rural Growth: Rising incomes in rural sectors create new buying power for branded goods.

Digital Retail: Online grocery delivery apps and e-commerce platforms open direct-to-consumer sales.

Eco-Friendly Lines: Consumer demand for organic, healthy, and sustainable packaging drives fresh product tiers.

Premium Options: Upgrading basic buyers to higher-priced, premium product lines increases revenue

4. THREATS AND RISK

Price Volatility: Unstable raw material and crude oil costs squeeze profit margins, o Stiff Rivalry: Intense competition from local upstarts and private labels forces heavy ad spending, o Tighter Laws: Strict rules on plastic waste, labeling, and food safety raise compliance costs, o Inflation Slumps: Economic dips cause shoppers to cut back on non-essential packaged goods.

5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective and reliable internal control system commensurate with the size of its operations geared towards achieving efficiency in its various business operations, safeguarding assets, optimum utilization of resources and compliance with statutory regulations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The internal control system is looked after by Directors themselves, who also looked after the day to day affairs to ensure compliances of guide lines and policies adhere to the management instructions and policies to ensure improvements in the system. The Internal Audit reports are regularly reviewed by the management and efforts for continued improvement of internal control system are being consistently made in this regard.

6. HUMAN RESOURCES VIS-A-VIS INDUSTRIAL RELATIONS

We believe that our employees are key contributors to our business success. We focus on attracting and retaining the best possible talent. The Company, values and appreciates the dedication and drive with which its employees have contributed towards improved performance during the year under review. The relations with workers and staff are cordial during the year under review. All issues pertaining to staff matters are resolved in harmonious and cordial manner. Our Company looks for specific skillsets, interests and background that would be an asset for our business.

7. RISK MANAGEMENT

All material Risks faced by the Company are identified and assessed. For each of the risks identified, corresponding controls are assessed, and policies and procedures are put in place for monitoring, mitigating and reporting risk on a periodic basis.

8. KEY FINANCIAL RATIOS

STANDALONE

9. CAUTIONARY STATEMENT

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates, and others may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, and price conditions in the domestic and overseas markets in which the Company operates changes in the Government regulations, tax laws, any epidemic or pandemic and natural calamities over which we do not have any direct/indirect control.