Prataap Snacks Ltd Management Discussions

Indian Economy

Overview

In FY25, Indias economy demonstrated resilience, despite subdued domestic demand and persistent global headwinds stemming from a rapidly shifting trade and policy landscape, reaffirming its status as the worlds fastest-growing major economy. Sluggish urban demand due to elevated all-round inflation and slowing growth, as well as price hikes across product categories, along with a gradual rural recovery, led to the consumer goods space witnessing muted growth in FY25.

Although real GDP growth is projected to moderate to 6.5% in FY25 from 9.2% in FY24, the economy continues to draw strength from favourable demographics and rising middle-class affluence, which underpin resilience across consumption, services, and capital markets.

GDP Growth

The moderation in real GDP growth can be largely attributed to a deceleration in the Gross Fixed Capital Formation (GFCF) from 10.1% in H1 FY24 to 6.4% in H1 FY25. During the initial months of FY25, capital expenditure by the Union Government declined to a monthly average of 0.60 Lakh Crore, reflecting a temporary pause in spending across various levels of government due to the general elections and disruptions caused by atypical monsoon patterns. While the post-election period witnessed a recovery in capital expenditure, averaging 0.66 Lakh Crore per month between July and November 2024, the sluggishness in spending at the start of the year had a cascading effect, with secondary and tertiary impacts of lower government spending felt throughout the remainder of the fiscal year.

Domestic Consumption

The nation continued to leverage its favourable demographic profile, rapid urbanisation, and growing digital infrastructure to stimulate growth.

An indicator of the countrys economic resilience was the significant 9.1% increase in net goods and services tax (GST) collections in April 2025 2.09 Lakh Crore from the net GST revenue collected in March 2025, which points to a robust economic performance in the last month of FY25. The total net tax revenue collected from economic activity has grown to 19.7 Lakh Crore in FY25, up from 18.2 Lakh Crore in FY24.

The countrys private consumption also doubled to US$ 2.1 Trillion in 2024 from US$ 1 Trillion in 2013, growing at 7.2% CAGR during 2013-2023, placing India well on course to becoming the third-largest consumer market by 2026.

Factors Supporting Growth

• Demographics: Indias strong demographic dividend is driving growth and a consumption surge. Gen Z and millennials, accounting for 52% of the population, are opting for premium brands, sustainable products, and personalised experiences.

• Government Policies: Forward-looking policies aimed at strengthening the manufacturing, infrastructure, and services sectors, like the PLI (Production Linked Incentive) scheme, foster a favourable environment for sustained economic activity.

• Economic Reforms: The Union Budget 2024-25, themed ‘Next Generation Reforms, aimed to bolster economic growth, improve productivity, and enhance the efficiency of markets and sectors. Key reforms across multiple sectors were highlighted, underscoring the importance of collaboration between the central government and state administrations to advance competitive federalism and drive sustained economic growth.

Outlook

The resilience of the Indian economy has positioned it to lead the global economy once again, with projections indicating it will remain the fastest-growing major economy over the next two years. Despite a slight downward revision in the 2025 forecast in April 2025 compared to January 2025, the overall economic outlook remains robust and far surpasses the global economic growth forecast.

According to the International Monetary Funds (IMF) World Economic Outlook (April 2025), Indias economy is expected to grow by 6.2% in 2025 and 6.3% in 2026, sustaining a strong competitive advantage over both global and regional counterparts. The strong momentum in Indias GDP growth will enable it to emerge as the fourth-largest economy in May 2025.

Source: IMF World Economic outlook, April 2025 (*GDP growth rates for India are on a fiscal year basis; 2025 refers to 2025/26), Press Information Bureau (April 2025)

According to the IMFs projection, India would be able to achieve its ambition of becoming a US$ 5 Trillion (~ 41.5 Lakh Crore) economy by 2027, with a GDP exceeding US$ 6.8 Trillion (~ 5,644 Lakh Crore) by 2030. This showcases the strength of Indias macroeconomic fundamentals and its ability to maintain momentum in a complex international environment. Reforms in infrastructure, innovation, and financial inclusion, supported by strategic government initiatives, solidify its role as a significant driver of global economic activity. Indias growth process has been proficiently supported by stability on fronts such as inflation, fiscal health, and balance of payments

Sources: Organisation: International Monetary Fund Publications: The Hindu, Business Standard, Outlook Business

Industry Overview and Outlook

Indian Consumer Industry

Overview

In 2024, private consumption by Indias approximately 294 million households has almost doubled to US$ 2.1 Trillion over the past decade, growing at 7.2% CAGR and overtaking the US, China, and Germany. Per capita income surpassed 2.1 Lakh by FY25. Private Final Consumption Expenditure (PFCE) at Constant Prices, which accounts for nearly 58% of the GDP, is expected to witness a growth rate of 7.6% in FY25 over 5.6% observed in FY24.

Between 2012 and 2024, there has been a notable evolution in discretionary spending among rural and urban households. There has been a dramatic decrease in expenditure on essential food items such as cereal (13-15% in 2024 from 21-26% in 2012), to an equally marked increase in spending on eggs, fish, meat, processed foods, dining out, and ordering in. At present, these categories together account for 31-37% of food-related expenditure, up from 24-30% in 2012. This shift is reflective of Indias growing urbanisation, global influences, and rising incomes.

Growth Drivers (India)

1. Rising Disposable Incomes: With rising salaries leading to increased disposable incomes, rapid urbanisation and a large tech-fluent, aspirational population, India is emerging as one of the most dynamic consumer markets.

2. Urbanisation: Expansion of urban spaces boosts demand for goods, services, and infrastructure. Urban households continue to lead in discretionary spending, but rural consumers are increasing their non-food expenditure on services, technology, and lifestyle products, fuelled by higher incomes, infrastructure growth and changing patterns of consumption, narrowing the urban-rural divide.

Source: Deloitte Analysis National Statistical Office (NSO)

3. Digital Transformation: Rapid adoption of technology is enhancing accessibility to products, with a wider range of customers able to purchase goods via alternate channels like e-commerce.

4. Demographic Shifts: Young, tech-savvy populations or ageing markets can each drive demand in different sectors with global trend adoption and increasing purchasing power. Indias 733 million Gen Z and millennial population drives this powerful growth.

5. Government Policies and Reforms: The proposal of reduced direct tax slabs and rates under the new income tax regime listed in the Union Budget 2025-26, will boost disposable income for the middle class and spur economic activity.

6. Micro-market Entry: Brought about by rapid urbanisation, entry into white spaces and underpenetrated regions within the country helps fuel sales and diversification.

Source: Deloitte Analysis

7. Innovation & R&D: Product development, AI, and automation improve efficiency and attract consumers.

8. Consumer Behaviour Shifts: Trends like premiumisation, sustainability, and health consciousness drive new demand patterns.

9. Supply Chain Optimisation: I mprove d logistics and local sourcing reduce costs and enhance competitiveness.

Outlook

Indias consumer market is on the verge of significant transformation, by virtue of rising incomes and changing spending patterns. The country is poised to become the third-largest consumer market by 2026.

Discretionary spending is expected to register an 8.7% CAGR by FY30, with urban expenditure growing at 8.4% and rural expenditure growing at a CAGR of 9.1%. Indias

GDP is projected to grow at an 11% CAGR, reaching 6,059 Lakh Crore by FY30, with domestic consumption driving 60% of the economy.

Sources: Organisations: Press Information Bureau, Ministry of Statistics and Programme Implementation, Deloitte, Retailers Association of India, India Brand Equity Foundation Publications and Wires: Business Standard, Outlook Business, Reuters

Indian Agricultural Sector

Overview

The primary source of livelihood for approximately 46.1% of the population, agriculture is the backbone of Indias economy. In recent years, Indias agricultural sector has shown impressive resilience against a backdrop of extreme weather conditions and other factors. This is characterised by steady growth rates of an average of 5% annually from FY17 to FY23, and its contribution of ~16% of the GDP for FY24 (PE).

The agricultural sector is expected to rebound to a growth of 3.8% in FY25, compared to the sectors recorded GVA of 1.4% in FY24. This growth and stability are primarily due to several government initiatives aimed at boosting productivity, encouraging crop diversification, and raising farmers incomes.

Impact of Inflation

In FY25, the countrys food inflation, measured by the Consumer Food Price Index (CFPI), faced immense pressures, primarily brought on by supply disruptions of a few food items like vegetables and pulses. Extreme weather conditions, like heat waves and erratic rainfall, are affecting major producing states. Edible oil, too, was subjected to inflationary pressures, rising from (14.8)% in FY24 to 5.5% in FY25. This led to dents in disposable incomes and subdued urban spending.

• Edible oils

The rising prices of edible oils and vegetables like onions and tomatoes increased grocery expenditure for Indian households prior to the 2024 festival season, which runs annually from late September to early November. Retail inflation, especially for food, remained high. In September 2024, retail inflation stood at 5.4%, and food inflation at 9.2% vegetable prices were 36% higher than in the same period in 2023.

In September 2024, the Central Government took steps to support domestic edible oilseed prices by advising the Edible Oil Associations to maintain the existing MRP. This MRP had earlier been reduced in response to falling international prices and lower import duties. The directive aimed to ensure price stability for consumers while utilising existing stocks of edible oils imported at 0% and 12.5% Basic Customs Duty (BCD), before the revised, higher duties came into effect. The government also implemented an increase in the BCD on Refined Palm Oil, Refined Sunflower Oil, and Refined Soybean Oil from 12.5% to 32.5%, making the effective duty on Refined Oils 35.7%. By raising the landed cost of imported edible oils, these measures aimed to boost domestic oilseed prices, encourage higher production, and ensure fair compensation for farmers.

Palm Oil

Palm oil futures prices saw a steady rise from FY20 to FY21, driven by tightening supplies and firm global demand. The trend intensified in FY22, which recorded the highest average prices due to pandemic-related disruptions and geopolitical uncertainties. While prices remained elevated in FY23, they moderated in FY24, driven by improving supply conditions. FY25 is showcasing a renewed uptick, highlighting ongoing market volatility—impacting input costs and margin structures for FMCG companies reliant on edible oils.

Source: Industry data

• Vegetables and pulses

Although vegetables and pulses together hold a total weightage of 8.42% in the Consumer Price Index (CPI) basket, their contribution to overall inflation stood at 32.3% between April and December 2024, setting the stage for the exponential inflation recorded during the recently concluded fiscal year. Tomatoes, garlic, and onions also contributed greatly to the inflation rates in vegetables and foods.

According to reports, the contribution of vegetables alone to the food inflation basket in FY25 stood at 43.7%, up from 30.8% in FY24. This resulted in a marginal decrease in food inflation, from 7.5% in FY24 to 7.3% in FY25, despite a sharper decline in overall inflation during this period, from 5.4% to 4.6%. The inflation of vegetables averaged 19.4% in FY25, compared to 14.9% in FY24, with garlic, potatoes, onions, and tomatoes recording inflation rates of 55.4%, 53.3%, 37.4%, and 18.8%, respectively.

Outlook

The supply chain disruptions and subsequent inflation brought on by erratic weather conditions in FY25 highlight the agricultural sectors susceptibility to climate change. Hence, the government has introduced key policy initiatives to facilitate climate resilience and accelerate sustainable output and economic growth.

In FY25, the Union Cabinet approved the ‘National Mission on Edible Oils Oilseeds (NMEO-Oilseeds), aimed at boosting domestic oilseed production to 24.45 million tonnes and becoming self-reliant in edible oils, aligning with Atmanirbhar Bharat. The Mission will be implemented over seven years, from 2024-25 to 2030-31, with a financial outlay of 10,103 Crore.

The Union Budget 2025-26 also highlighted agriculture as one of the key sectors fuelling the countrys journey to Viksit Bharat 2047. The Budget announced the ‘Prime Minister Dhan-Dhaanya Krishi Yojana in partnership with states covering 100 districts to improve productivity, adopt crop diversification, enhance post-harvest storage and irrigation facilities, and facilitate availability of long- and short-term credit.

A comprehensive multi-sectoral ‘Rural Prosperity and Resilience programme will also be launched in partnership with the states to address underemployment in agriculture. Measures have been outlined for a ‘Comprehensive Programme for Vegetables & Fruits and ‘National Mission on High-Yielding Seeds, among other initiatives, to significantly promote agriculture and allied activities.

Sources:Organisations: Press Information Bureau Publications and Wires: The Economic Times, Reuters, Economic Survey 2024-25

Indian Packaged Food Industry

Overview

The Indian packaged food industry is undergoing substantial growth, fuelled by accelerating urbanisation, evolving consumer lifestyles, and a growing demand for convenience foods. The industry posted a CAGR of ~15%, between 2012 and 2024. It was noted that pre-packaged, ready-to-eat foods from India — such as millets, pickles, and spices — are gaining popularity both domestically and globally. Indian companies have been encouraged to invest in innovation, improved packaging, sustainability, and process mechanisation for enhanced hygiene.

Growth Drivers:

1. Rapid Urbanisation: Rising urbanisation and dual-income households are driving greater demand for ready-to-eat and convenience meals, as time-saving solutions become increasingly essential in busy lifestyles.

2. Changing Consumer Lifestyles: Busy schedules, on-the-go culture, and increasing disposable incomes render packaged foods convenient and quick to consume.

3. Wide Range of Distribution Channels: An increasing number of modern trade and quick commerce — especially e-commerce — channels, exponentially boost this sector.

4. Integration of Technology: Advancements and innovations in food processing and packaging aimed at preserving the freshness and quality of packaged foods for longer periods.

5. Government Support: The Production Linked Incentive Scheme for Food Processing (PLISFPI), approved in March 2021 with a budget of $ 1.3 Billion (~Rs.10,800 Crore), aims to boost manufacturing, support innovative and organic SME products, and promote Indian brands globally.

Outlook

Indias food processing industry is poised for significant transformation, driven by urbanisation, shifting consumer preferences, and a supportive policy environment.

The PLI Scheme is catalysing this shift by incentivising production of ready-to-eat foods, processed produce, and dairy, while strengthening infrastructure, attracting technology, boosting exports, and enhancing Indias global competitiveness.

Rural spending is expected to increasingly align with urban trends, with a slight reduction in food expenditure and a shift towards processed foods, dining out, and entertainment. By 2030, food spending in rural households is expected to decrease from ~51% to ~49%, while for urban households is expected to see a decline from ~42% to ~40%. Packaged food and dining out are expected to see increased allocation, rising from 9.4% to 11.3% in rural areas and 10.6% to 12.3% in urban areas.

Through the Ministry of Food Processing Industries (MoFPI), the Government of India is taking all necessary steps to boost investments in the food processing industry in India. The Government of India has continued the umbrella PMKSY scheme with an allocation of 4,600 Crore till March 2026.

Sources:

Organisations: Press Information Bureau, Deloitte, Retailers Association of India, India Brand Equity Foundation, IMARC Group

Indian Packaged Snack Foods

Overview

Packaged savoury snack foods and sweets comprise 33.4% of Indias packaged food industry, which is worth approximately 3,75,000 Crore. Comprising traditional Indian snacks like namkeen, Western snack foods like potato chips, and more, the countrys organised snack foods market, in particular, was valued at approximately 50,800 Crore in 2024, growing from 42,695 Crore (2023), 41,957 Crore (2022), and 34,874 Crore in 2021. Within this market, the Extruded Namkeen foods category, comprising puffs, popcorn, and other ready-to-eat cereals, is performing exceptionally well, comprising 16% of the market in 2024.

Rising levels of urbanisation, increasing discretionary incomes, evolving consumer lifestyles with a preference for on-the-go snacking, a growing youth demographic, and the adoption of Western dietary preferences are contributing to this steady demand and growth.

The penetration of low-unit packs, priced at 1, 5, and 10 per unit, is 35–40% in the domestic FMCG market, also catering to this demand for convenient, ready-to-eat snack products across a broad consumer base.

Growth Drivers (India)

1. Shifting Consumer Lifestyles: Rapid urbanisation and rising disposable income have propelled a developing preference for convenience foods.

2. DemographicDividend: Indias young demographic, which forms a significant portion of the population, shows an inclination towards quick, budget-friendly, easy-to-eat and on-the-go snack options.

3. Innovative Product Launch: Creating healthy, flavour-driven, and premium innovations based on trending consumer behaviours attracts various consumers across demographics.

4. Globalisation and Market Exploration: Western influence has introduced diverse, innovative snack foods to the Indian market, driving growth in Indias snack foods sector.

5. Strategic Competitive Pricing: Efficient mass production and supply chains help maintain quality at lower costs, like employing the Direct-to-Consumer (D2C) process to reduce prices and maintain profitability. Regional brands offer affordable options, boosting access in urban and rural areas, while promotions, discounts, and value bundles encourage bulk purchases and drive sales.

6. Diversified Distribution Channels: Expanding retail and e-commerce infrastructure, like presence in supermarkets and hypermarkets, and expansion of quick commerce in tier 2 and tier 3 cities, has boosted accessibility.

7. Government Regulations: Strict regulations by the Food Safety and Standards Authority of India (FSSAI) have strengthened consumer confidence in packaged snack foods by enforcing stringent quality, safety, and compliance standards.

Outlook

Indias packaged snack foods market is rapidly evolving, driven by intense competition among global brands, homegrown players, and health-focused startups offering premium products. The domestic snack foods market is projected to reach 1,01,811.2 Crore by 2033, reflecting a compounded annual growth rate (CAGR) of 8.63% from 2025 to 2033.

Leading manufacturers are driving a favourable market outlook for Extruded Namkeen through aggressive marketing and robust distribution strategies, supported by the widespread reach of retail channels. Looking ahead, the market value of Extruded Namkeen is projected to reach approximately 9,700 Crore (US$ 1,144.1 Million) by 2033, expanding at a CAGR of 6.84% during the period 2025 to 2033 .

The Western influence on snacking preferences has ensured the organised Western salty snack foods segment (which includes extruded snack foods) currently estimated at ~ 24,000 Crore, is projected to grow at 14-15% CAGR for the next two to three years. This rapid Westernisation of tastes presents FMCG companies creating products in this segment with a favourable growth opportunity.

Sources: Organisations: IMARC Group, NielsenPublications and Wires: The Economic Times, Financial Express, Outlook Business

About Prataap Snacks Limited

Company Overview

Founded in 2003, Prataap Snacks Limited (hereafter referred to as ‘PSL or ‘the Company) has established itself as a key market player in Indias packaged snack foods manufacturing industry. Through its brands, ‘Yellow Diamond and ‘Avadh, the Company offers a range of products in the Potato Chips, Extruded Namkeen, Pellet Namkeen, Ethnic Namkeen, and Sweet Snack foods categories.

The Company is headquartered in Indore, Madhya Pradesh, and operates 16 manufacturing facilities, of which 7 (Indore 1&2, Assam, Bengaluru, Kolkata and Rajkot 1&2) are proprietary, and the other 9 (Kolkata, Jharkhand, Hyderabad, Kanpur, Karnal, Patna, Hissar, Gwalior, and Nalbari) are on contract manufacturing basis.

PSL has an extensive pan-India presence, equally spread across metro cities and urban clusters, and in rural areas, tier 2 and 3 cities, and towns. Its products, available in various packet sizes at attractive price points like 5 and above, are present at independent grocers and small retail stores in the lanes and bylanes of its key markets. The Company is currently in the process of building its presence in modern trade, quick commerce, and overseas markets.

PSL currently leads the market for Extruded Namkeen and Rings, and is among the Top 5 players in the Western Savoury Snacks market/segment.

Key Initiatives and Strategic Focus

This past fiscal year, PSL has focused on strengthening its position as a key player in Indias snacks market. The Company is committed to retaining its position as the market leader in the Extruded Namkeen and Rings categories in the coming years. PSL is also focusing on product portfolio diversification and innovation to appeal to a wider consumer demographic and deliver accretive margins, showcasing its agility to adapt to rapidly evolving snacking trends and consumer preferences.

PSL is also deepening its focus on enhancing its execution and performance culture to boost productivity. The Company has implemented a comprehensive transformation programme, geared towards improving revenue, operational efficiency, cost optimisation, and distribution enhancement. It also looks to further refine its existing operational strategies, which have been modernised with the incorporation of the following tools:

• Data analytics

- An experienced Sales Analytics department equipped with advanced BI tools

- Consistent monitoring, tracking of profitability at region- and SKU-level to enhance decision-making

• Production automation

- Production processes managed with complete ERP solutions

- Deployment of software to manage grammage during the packing process

• Sales automation

- Cutting-edge Sales Force Automation utilised to guide the sales team with assisted order-taking

- Enables market gap identification and optimises sales routes through geotagging outlets

In FY25, PSL focused on strengthening its core, which tided the Company over in times of macroeconomic uncertainty; in FY26, it intends to leverage its momentum to drive growth.

The core elements of this strategy include:

Distribution Network Initiatives

• Refining Distribution Efficiency: PSL has established its presence across 27 states and 4 union territories, with the help of 16 favourably located manufacturing facilities and an extensive distribution network. Supported by 5,200-plus super/sub-distributors, reaching approximately 2.5 million touchpoints, the Company caters to the snacking needs of millions of Indians.

The Company is focused on strengthening its ongoing augmentations, like range selling in its command markets, where it has established a stronghold, and sales force automation (SFA) to streamline and guide the sales team with assisted order-taking, based on consumption patterns retrieved up to the last mile. SFA is also utilised to identify gaps in the market and optimise sales routes by geotagging retail outlets. The Company also engaged in market re-segmentation to better align resources with high-impact opportunities.

• Diversifying Distribution Channels: PSL continues to place emphasis on its sales strategies and efforts in its command markets, while equally focusing on strengthening its presence in its expand markets to maintain and enhance its leading market position. The Company is looking to expand its footprint across new distribution channels, including modern trade and quick commerce, to reach a wider audience. The Company is also in the nascent stages of exporting products.

Product-Led Initiatives

• Elevating Product Offerings and Portfolio: The Company currently offers 150-plus stock-keeping units (SKUs) under ‘Yellow Diamond and ‘Avadh. PSL would augment its existing products to drive in-home consumption and support growth across modern trade and e-commerce channels. The Company also prioritises keeping on top of consumer trends to ensure rapid product adaptability and innovation, driving growth.

• Scaling Pellet-Based Products: Building on the strong performance of its pellet-based products under the ‘Avadh brand in Gujarat, PSL is confidently expanding this successful category nationwide. By replicating the proven formula across India and leveraging the trusted Yellow Diamond brand, PSL is scaling up production and distribution to bring these popular snack foods to a wider consumer base.

Cost-Efficiency Initiatives

• PSL aims to boost profit margins by focusing on high-margin products, increasing productivity, and reducing costs. In response to recent cost pressures due to inflation in raw material prices and a slowdown in consumer demand, the Company commenced several strategic initiatives to structurally enhance the margin profile

• Strong inflationary trends, which hiked up the prices of crucial raw materials like potatoes and palm oil and reinstatement of import duties on crude and refined palm oil, were mitigated through several measures implemented by the Company, like recipe adjustments, packaging adjustments, process reengineering, rationalisation of grammages and trade margin reduction, which have helped to partially offset the impact of rising costs.

• Working towards a sustainable profitability model, the

Company also continuously engages in analysing granular costs across its manufacturing units, like examining input costs, electricity, manpower, and logistics, to ensure and instate peak cost-optimisation.

Products

Catering to the snacking needs of millions of Indians, PSL has a wide range of products like Ethnic Namkeen, Potato Chips, Extruded Namkeen, and Sweet Snack foods under the ‘Yellow Diamond and ‘Avadh brands.

Company Outlook

PSLs consistency in augmenting and refining its processes, engaging in strategic cost optimisation practices, and focusing on strengthening its core markets while simultaneously exploring opportunities in underpenetrated markets, enables it to continue on a steady growth trajectory of 12% CAGR (2015-2025). The Company aims to drive topline growth by implementing Sales Force Automation (SFA) to enhance range selling, optimise distribution throughput, and create and oversee micro-level strategies, with a strategic focus on dominating in regions where it holds a strong market share.

PSL is also working towards aligning its current portfolio with the ongoing exploration of new distribution and sales channels, such as institutional channels and quick commerce. These will open new, high-frequency consumer occasions. As the Companys export volume is currently in its nascent stage, it anticipates strategic scaling to enrich margins in the coming quarters.

PSL is also focused on improving its margins through channel cost optimisation, reducing distribution costs and optimising trade margins; optimising operational cost through the deployment of initiatives like process reengineering and debottlenecking to structurally reduce costs; logistics cost optimisation to drive efficiency by optimising loads and routes, and leveraging technology; and enhancing its product portfolio with premium products to target higher margin products and categories. The Companys long-term target operating model comprises 3 aspects – achieving consistent revenue growth of ~15%, which is faster than its operating industry; becoming profitability-centric with >10% EBITDA margin; and maintaining a capital efficiency of 15-20% RoCE.

SWOT Analysis

Strengths

• Market Leader in Rings and Extruded Namkeen

• Pan-India Presence

• Diversified and Innovative Product Portfolio

• Introduction of Health-Conscious Snacks

• Strong Focus on Quality and Food Safety Compliance

• Strategically Located Manufacturing Facilities

• Tech- and Data-Enhanced Operational Governance

• Well-Established Brand Name and a Robust Distribution Network

• Experienced Leadership

• Products for All Age Groups

Weakness

• Intense Competition from Organised and Unorganised Competitors

• Limited Product Differentiation

• Dependence on Raw Materials at Competitive Prices

Opportunities

• Increasing Urbanisation, Consumer Spending, Online Shopping

• Growing Familiarity with Brands and

Changing Lifestyles

• Tapping Underpenetrated, Underserved Markets and White Spaces

• Introducing Products to Aid Premiumisation and Enrich Margins

• Exploring Alternate Channels like Modern Trade, Quick Commerce

• Scaling Exports

• Regular Introduction of New Products

• Enhancing the Existing Product Portfolio

Threats

• Increase in Raw Material Prices

• Persistent Inflationary Trends

• Sluggish Consumer Demand

• Growing Public Health Awareness Leading to

Dietary Alterations

Financial Review

Financial Performance and Business Update for FY25

In FY25, PSL reported an annual revenue of 1,70,770 Lakh compared to 1,61,793 Lakh in FY24, achieving a Y-O-Y change of 6% amid a challenging macroeconomic environment. The Company maintained its position as the nationwide market leader in the Extruded Namkeen and Rings category. The Pellet Namkeen segment also continued to perform strongly, supported by an expanded retail footprint and a broader product range through strategic range-selling.

During the year, the Company experienced an exceptional loss due to a fire at the manufacturing facility in Jammu.

Despite this, the Company demonstrated resilience in performance by reporting growth in revenues. To ensure operational continuity at proximate markets in light of the fire, production was ramped up at PSLs Hisar and Karnal facilities.

PSL achieved 46,455 Lakh in gross profit. Operating EBITDA was calculated at 4,869 Lakh. Profit before tax and exceptional items (PBT) was calculated at (1,765) Lakh in FY25 from 7,741 Lakh in FY24. Finance costs were valued at 681 Lakh in FY25 (from 577 Lakh in FY24), while depreciation was calculated as 6,919 Lakh in FY25 (from 6,636 Lakh in FY24). Profit After Tax (PAT) was calculated as (1,404) Lakh, after giving effect to an exceptional loss of 3,433.53 Lakh.

The Board has recommended a dividend of 10% per share on a face value of 5 each, translating to 0.50 per share. As of March 31, 2025, PSLs net worth was calculated as 69,025 Lakh, compared to 72,876 Lakh as of March 31, 2024. The Company maintains a robust balance sheet, supported by a healthy free cash position of 8,140 Lakh.

In FY25, ICRA reaffirmed Prataap Snacks [ICRA] A+ (Stable) rating, citing a strong credit profile backed by experienced leadership, an extensive distribution and manufacturing network, a diverse product portfolio, and healthy financial and liquidity metrics.

Details of Significant Change in Key Financial Ratios

Ratios	Unit	FY25	FY24	% Change	Change
Margin NetProfit	%	(2.0)	3.3	(160.6)	Decrease in profit on account of the increase in key raw materials prices and an exceptional loss by fire at the Jammu plant
Operating Profit Margin	%	2.9	8.7	(66.7)	Rise in prices for key raw materials such as palm oil, potato, gram flour and wheat.
Debtor Turnover	times	120	129	(7.0)	Marginal increase in the average credit period offered to customers in the current year have resulted in a lower debtors turnover ratio
Stock Turnover	times	8.5	7.8	9.0	Decrease in inventory has resulted in an improvement in the stock turnover ratio
Debt Equity Ratio	times	0.06	0.03	100.0	Increase in short-term borrowings from the bank has resulted in an increase in the ratio
Current Ratio	times	1.6	1.7	(5.9)	Increase in current liabilities has resulted in a lower current ratio
Interest Coverage Ratio	times	(1.6)	14.4	(111.1)	Decreased considerably due to negative earnings before interest and taxes (EBIT)
Return on Net Worth (RoNW)	%	(5.0)	7.3	(168.5)	Decreased considerably due to negative profit

Risk Management and Mitigation

At PSL, regular risk assessments and scenario planning are conducted to anticipate potential disruptions and develop contingency plans. The Company encourages an open channel of communication and collaboration across departments to ensure organisation-wide risk preparedness and responsibility.

PSL has developed a comprehensive risk management framework, integrated into its strategic planning and decision-making processes. PSLs Enterprise Risk Management practices have identified and mitigated the following risks:

Economic Uncertainty

Evolving macroeconomic conditions influence consumer trends, purchasing behaviours, and workplace dynamics, creating potential obstacles for the Company.

Mitigation Measures: As a long-term strategy, PSL closely monitors trends in consumer behaviour and economic indicators and augments its product portfolio accordingly. The Company also identifies expansion opportunities to new markets to avoid dependence on a single region. The Company prioritises robust consumer engagement, innovative marketing and distribution strategies, enhanced operational efficiency with technology and data-led systems, optimised supply chain management, and cost-efficient measures.

Raw Material Price Risk

PSLs operations are heavily dependent on raw materials like potatoes, palm oil, and packaging laminate. Rising prices, disruptions in the supply chain, and resource shortages can impact costs and profit margins.

Mitigation Measures: During FY25, the prices of raw materials witnessed a sharp hike due to persistent inflationary trends, with potatoes and palm oil most impacted. The reinstatement of import duties on refined palm oil also contributed to the increase in raw material costs. The Company partially offset this impact by implementing several mitigation measures, like recipe adjustments, process re-engineering, and grammage and trade margin optimisation. The Company also prides itself on forging strong partnerships to maintain an uninterrupted supply of materials and securing mid- to long-term contracts for procuring packaging laminates and palm oil. PSL secures its potato supply through refrigerated storage facilities for bulk purchases and an expanded procurement network. The Company employs forward contracts, continuous process re-engineering, and cost optimisation strategies to manage the impact of rising costs of raw materials and packaging on profitability.

Competition Risk

The packaged consumer goods industry is highly competitive, with large, established, organised players, and mid and small regional players offering strong competition to PSL, potentially impacting its growth and profitability.

Mitigation Measures: Innovation is key at PSL, which remains committed to keeping on top of consumer preferences by diversifying its product portfolio to reflect them. The Company leverages this strategy to maintain its position as a domestic market leader in the Extruded Namkeen and Rings categories, and in the top 5 of the Western snack foods market. PSL has also established an extensive distribution network with strategically located manufacturing facilities, favourably positioning it to experience consistent growth. PSL prioritises the addition of new touchpoints in underpenetrated markets, and consolidating its presence across modern trade and quick commerce channels. PSL is also focused on scaling its Namkeen offerings and expanding the pellet-based product category to capture a wider market.

Cybersecurity Risk

System breaches through hacking and virus attacks could compromise the Companys server, leading to significant financial losses, operational disruptions, sensitive data theft, and damage to the Companys reputation. Internal errors, such as technical errors or system malfunctions, can also cause downtime, data loss, and operational inefficiencies.

Mitigation Measures: PSL continuously monitors and assesses cybersecurity risks, regularly reviews safety feature logs, and has real-time server mirroring and backups. The Company has implemented a robust, multi-layered cybersecurity framework aligned with the recent addition of technology, automation and data-led augmentations to its operational governance processes. Its web portals are secured with passwords, firewalls, VPNs, and SSL certificates. The Company has implemented a Disaster Recovery Mechanism (DRM) for real-time server replication to ensure business continuity in case of system failures. Endpoint Detection and Response (EDR) and Data Leakage Prevention (DLP) systems are implemented across all relevant devices and servers. CCTV cameras with authorised access are also installed in server rooms.

Human Resources

PSL attributes its continued growth and success to the invaluable contributions of its workforce, and emphasises a fair and balanced approach to human resource management.

Organisational goals and significant milestones are achieved by employing effective personnel management practices, strategic development initiatives, productivity enhancements, and reward systems. The Company prides itself on its structured and strategic approach to talent management and succession planning, building a robust leadership pipeline within and beyond the organisation and ensuring seamless business continuity.

PSL also offers an Employee Stock Appreciation Rights Plan (ESARP), which enables permanent employees to become shareholders based on their eligibility. As of March 31, 2025, PSL employed 2,969 employees (permanent and others), and its industrial facilities operate without labour unions, experiencing no disruptions due to labour unrest throughout FY25.

The Company remains committed to investing in employee growth and development, empowering them to navigate the highly competitive packaged consumer goods industry and flourish.

Corporate Social Responsibility

Commitment to inclusive societal upliftment forms the core of PSLs ethos. In FY25, the Company invested 79 Lakh in initiatives across healthcare, human and animal welfare, education, and community upliftment, intended to drive responsible growth, aligning with the needs of the communities where the Company operates.

In the realm of healthcare, PSL directed its CSR expenditure towards improving medical infrastructure, and maternal, child, and elderly healthcare. In the field of education, it enhanced accessibility to education and special education, as well as infrastructure for children from rural areas and those coming from underprivileged backgrounds.

To improve livelihood development, PSL promoted skill-building and self-sufficiency among disadvantaged communities. The Company also invested in athletic training in the field of sports and undertook afforestation initiatives for environmental sustainability. Animal welfare was also a focus, with support provided for the well-being and care of stray, wounded, and ill animals.

Internal Control System

PSL has implemented a comprehensive internal control system. The framework is customised in alignment with the pan-India scale and complexity of the Companys business. Regular internal audits and management reviews in key areas like procurement, production, information technology, sales, supply chain, marketing, and finance are conducted.

The Companys management team and an independent internal auditor provide an unbiased assessment of PSLs risk management, business processes, operations, financial reporting, and compliance to the Audit Committee. The Committee then develops action plans for review and updates. The management team also reviews the internal auditors reports and implements corrective actions to augment PSLs controls and systems.

Cautionary Statements

Certain statements contained within this report may constitute forward-looking statements. These statements are inherently subject to a range of risks and uncertainties, including but not limited to changes in regulatory frameworks, shifts in local political or economic conditions, and other factors that may result in actual outcomes differing materially from those anticipated or projected in such statements.

Prataap Snacks Limited disclaims any responsibility for actions taken based on these forward-looking statements. Furthermore, the Company assumes no obligation to publicly update any forward-looking statements to reflect subsequent events, developments, or changes in circumstances, except as may be required under applicable law.