Orient Beverages Ltd Management Discussions

a. Industry structure and developments: During FY 2025-26, the global economy remained resilient despite continued geopolitical tensions, trade policy uncertainties, disruptions in global supply chains and volatility in commodity and energy prices. The global economic environment continued to be influenced by changing tariff policies, elevated geopolitical risks and divergent monetary policy conditions across major economies. The International Monetary Fund, in its April 2026 World Economic Outlook, projected global growth at 3.1% for 2026 and 3.2% for 2027, while highlighting continued downside risks arising from geopolitical developments, trade fragmentation and commodity price volatility.

India continued to remain one of the fastest-growing major economies. As per the Economic Survey 2025-26, Indias real GDP growth for FY 2025-26 was estimated at 7.4%. Domestic demand remained the principal driver of economic activity, supported by private consumption, investment, improving rural demand and favourable inflation conditions. The Indian FMCG sector continued to benefit from rising disposable incomes, increasing urbanisation, expanding rural consumption, greater penetration of modern retail and e-commerce, and changing consumer preferences. The sector is witnessing increasing demand for convenient, affordable, health-oriented and value-added products. Quick commerce and digital retail channels are also changing the way consumers discover and purchase FMCG products, providing established as well as emerging brands with additional avenues for market expansion.

For the beverage industry, the growth opportunity continues to be supported by Indias large and increasingly aspirational consumer base, rising consumption in tier-II and tier-III cities, changing lifestyles, product innovation and increasing availability through modern trade and digital channels. At the same time, the industry continues to face challenges arising from intense competition, volatility in raw material and packaging costs, regulatory requirements and changing consumer preferences. Looking ahead, the Company expects the Indian consumption story to remain favourable, while maintaining a close watch on global economic developments, commodity prices, regulatory changes and competitive intensity.

b. Opportunities and threats: The beverage industry continuestooffersignificantgrowth opportunities on account of

Indias growing consumer base, increasing disposable income, changing consumption habits and rising demand for a wider variety of beverage products.

The Companys opportunities include expansion of its distribution network, deeper penetration into rural and semi-urban markets, product innovation, increasing presence in modern trade and e-commerce channels, and responding effectively to changing consumer tastes and preferences. The growing emphasis on health, wellness, convenience and differentiated products also provides opportunities for the Company to strengthen and diversify its product portfolio.

The principal threats faced by the Company include intense competition from multinational companies as well as established and emerging domestic players in the beverage industry. Volatility in the prices of key inputs, packaging materials, energy and transportation costs, changes in consumer preferences, regulatory changes and increases in government levies may also impact the Companys operations and profitability.

c. Segment wise performance: The Company is operating in one segment only, i.e. Beverage. During FY 2025-26, sale of beverages stood at Rs 15,712.75 lakh, as compared to Rs 14,228.48 lakh in FY 2024-25, representing an increase/decrease of 10% over the previous year. The Companys performance during the year reflects its continued focus on the beverage segment, supported by market demand, distribution efforts and its ability to respond to changing consumer preferences.

d. Outlook: The Company will continue to focus primarily on the beverage segment and intends to strengthen its market position through continued focus on product quality, distribution, customer relationships and operational efficiency.

The Company will also evaluate opportunities for expansion into new markets, products or business areas where such opportunities are considered commercially attractive and consistent with its long-term objectives.

e. Risks and concerns: The Companys business is exposed to various risks, including market risk, interest rate risk, input cost volatility, competitive risk, regulatory risk and changes in consumer preferences. Intensifying competition from multinational and domestic beverage companies may exert pressure on pricing, market share and margins.

In addition, fluctuations in the prices of raw materials, packaging materials, fuel, electricity and transportation may affect operating costs.

Changes in government policies, taxation, duties, levies, food and beverage regulations and other statutory requirements may also have an impact on the Companys business. The Company continues to monitor these risks and takes appropriate measures, wherever considered necessary, to mitigate their potential impact on its operations.

f. Internal control systems and their adequacy: The Company has adequate systems of internal control commensurate with its size and the nature of its operations. The internal control systems are designed to ensure orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

The Company periodically reviews its internal control systems and procedures to ensure that they remain appropriate and effective in view of the changing business environment and operational requirements.

g. Financial performance with respect to operational performance: The financial performance of the Company for FY 2025-26 is discussed in the Directors Report under the head Operation and State of Companys Affairs.

The Companys operational performance during the year should be read in conjunction with the audited financial statements and the accompanying notes forming part of the Annual Report.

h. Material developments in human resources and industrial relations front: The Company recognises that its employees are an important asset and continues to place emphasis on human resource development, employee engagement, skill enhancement and maintaining a positive work environment. The Company continues to make sincere efforts towards the development of its human resources and maintaining healthy employee relations. Industrial relations remained cordial throughout the year and there was no incidence of strike, lock-out or other significant industrial dispute during the year.

i. Cautionary statement: The statements made in this Management Discussion and Analysis describing the Companys objectives, expectations, estimates, outlook and predictions may constitute forward-looking statements within the meaning of applicable laws and regulations. These statements are based on certain assumptions and expectations concerning future events and business conditions.

Actual results may differ materially from those expressed or implied in such forward-looking statements due to various factors, including changes in economic conditions, consumer demand, competition, input costs, government policies and regulations, taxation, interest rates, availability of resources, geopolitical developments and other risks and uncertainties.

The Company continues to closely monitor major developments that may affect its operations and will endeavour to respond appropriately to potential risks while pursuing opportunities for sustainable growth.