Orient Beverages Ltd Management Discussions

a. Industry structure and developments:

In 2024, the global economy experienced moderate growth of 3.3% (IMF World Economic Outlook, April 2025) amid a challenging macroeconomic environment. Persistent geopolitical tensions, disruptions in trade routes, and high interest rates in major economies created headwinds for global trade and consumption. However, resilient labour markets, easing inflationary pressures, and stable private consumption helped sustain economic activity, particularly in emerging markets. In the FMCG sector, demand remained steady, driven by essential consumer goods, and a growing preference for health and sustainability focused products. Looking ahead to 2025, the IMF has cut its forecast for the global economic growth to 2.8% following tariff measures being announced by the United States and countermeasures taken by its trading partners. Global growth is expected to recover to 3% in 2026. The United States and the Euro Area are expected to grow at 1.8% and 0.8% respectively. The emerging markets while impacted by the tariff shocks continue to be the growth drivers and are expected to grow by 3.7% in 2025 and 3.9% in 2026.

India remains a bright spot in the global economy, with GDP growth estimated at 6.5% in FY25 (Economic Survey), driven by strong domestic consumption, infrastructure investments, and policy reforms. The Country continues to benefit from a growing middle class, rising disposable incomes, and increasing digital penetration, all of which are fuelling demand for FMCG products. Despite global uncertainties, Indias inflation has moderated and improving rural and urban consumption trends have kept the economy on a stable growth trajectory. For the FMCG sector, 2025 presents significant growth opportunities, particularly in rural markets, where improving agricultural output, government welfare schemes, and better connectivity are expected to drive demand. Health and wellness focused products, and sustainability-driven innovations continue to shape consumer preferences. The rapid adoption of e-commerce including Quick commerce is also reshaping the sector, offering brands new ways to engage with consumers. While input cost volatility and regulatory changes remain key challenges, the industry is expected to benefit from stable demand, supply chain advancements, and innovation-driven growth.

b. Opportunities and threats: The Companys main threat is competition from multinational giants and local entrepreneur who are also engaged in beverages industry. The change in taste of consumers gives opportunities to the Company to grow further.

c. Segment wise performance: The Company is operating in one segment only i.e. Beverage. Sale of Beverages has increased to 14,22,848 thousand in the FY 2024-25 from 12,56,051 thousand in the FY 2023-24, showing an increase of 13%.

d. Outlook: The Company is likely to focus mainly on beverages segment. The Company will also look forward for any attractive opportunities, if available in other sectors.

e. Risks and concerns: The risk of the Company are interest risk, market risk etc. Increased competition from multinational giants and increase in government levies, from time to time, are main concern of the Company.

f. Internal control systems and their adequacy: The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

g. Financial performance with respect to operational performance: The financial performance of the Company for the year 2024-25 is discussed in the Directors Report under the head ‘Operation and State of Companys affairs.

h. Material developments in human resources and industrial relations front: The Company sincerely make efforts and gives special attention to Human Resources/Industrial Relations development. Industrial relations remained cordial throughout the year and there was no incidence of strike, lock out etc.

i. Cautionary statement: The statements describing the Companys outlook, estimates or predictions may be forward-looking statements based on certain assumptions of future events. Actual results may differ materially from those expressed or implied, since the Companys operations are infl uenced by external or internal factors. Your Company closely monitors all major developments likely to affect the operations and will respond to meet the potential threats and to gain from any possible opportunities.