Saptarishi Agro Industries Ltd Management Discussions

Saptarishi Agro Industries Ltd., a joint venture with Tamil Nadu Industrial Development Corporation (TIDCO), was established in 1994 as a pioneering initiative in Indias mushroom cultivation sector. With a technology tie-up with Dalsem Veciap B.V., Netherlands, the company was among the first in India to bring modern, climate-controlled systems for commercial-scale button mushroom production. Over time, the companys vision has evolved to create a comprehensive end-to-end business value chain focused on mushrooms and exotic horticulture produce, spanning cultivation, processing, packaging, and supply chain management. Saptarishi Agros integrated platform is designed to generate value for key stakeholders, including investor groups, farmer producer organizations, and consumers.

The Company is poised for a significant phase of growth and diversification, with the launch of two key projects that reflect its forward-looking vision and strategic expansion plans. Having built a strong foundation in the agri-business sector, particularly through consistent involvement in the trading of mushrooms over the years, the Company has steadily strengthened its presence and expertise in this segment.

Building on this momentum, the Company is now set to enter the Frozen Fruits & Vegetables (FFV) market with the introduction of a new brand. This venture is aimed at meeting the rising consumer demand for convenient, healthy, and high-quality food products. All necessary regulatory approvals have been obtained, and preparations for the brand launch are already underway, with operations expected to commence shortly.

In addition to its agri-business expansion, the Company is also venturing into the real estate sector through a Land Development project focused on residential plot sales. This project will be rolled out in two phases: the first phase was launched in the first half of the financial year as Growth Town Project, and the second phase is scheduled in the latter half of the financial year.

These initiatives position the Company to diversify its revenue streams, enhance long-term sustainability, and create greater value for stakeholders. With a clear focus on innovation, quality, and market relevance, the Company is well- positioned to capitalize on emerging opportunities in both the FMCG and real estate sectors.

During the financial year 2024-2025, the Company restructured its operations into three distinct segments based on location and core activities

a. Trading (Mushrooms) - Jodhpur: Engaged primarily in the trading of mushrooms and related commodities.

b. Land Sale - Tamil Nadu: Focused on the sale and management of land assets situated in Chennai Padalam.

c. Manufacturing & Trading (Frozen Fruits & Vegetables) - Gujarat: Involved in the manufacturing of mushroom products along with their trading and distribution.

This strategic segmentation aims to enhance operational efficiency, enable focused business development, and support region-specific growth initiatives:

TRADING (JODHPUR)

Industry Structure and Developments: The mushroom trading industry is expanding rapidly due to rising demand for nutritious and plant-based foods. It includes edible, medicinal, and exotic varieties, traded both domestically and internationally. Key producers like China, the U.S., and India supply to food services, retail, and wellness markets. Technological advancements and government support have boosted cultivation and processing. Value-added products such as dried mushrooms and supplements are gaining popularity.

Opportunities

* Rising demand for organic, functional, and plant-based foods globally

* Expansion of export markets, especially for medicinal and value-added mushrooms

* Government support through subsidies, training, and agri-schemes

* Growing interest in sustainable and urban farming practices

* Emerging e-commerce and direct-to-consumer sales channels Threats:

* High perishability and lack of adequate cold chain infrastructure

* Price volatility due to seasonal and regional supply fluctuations

* Limited farmer awareness and technical knowledge

* Stringent quality standards and certifications for export markets

* Vulnerability to pests, diseases, and climate variations Product-wise Performance [as on 31-03-2025 (Rs. in Lakhs)]

The Company has been actively involved in the trading of mushrooms for several years, steadily strengthening its presence in this segment. We are pleased to present a summary of its performance below:

(in lakhs)

Revenue (Net sales/Income from operations)	1366.99
Results(Profit/Loss) before Interest & Tax	362.05
Assets	1811.87
Liabilities	457.35

Outlook

The outlook for the mushroom trading industry is highly promising, with global demand expected to grow at a CAGR of 8-10% through 2030. Rising interest in plant-based nutrition, functional foods, and medicinal mushrooms is driving this growth. The Asia-Pacific region, especially China and India, leads in production, while Europe and North America show strong demand for organic and value-added products. Technological advancements and government support are further strengthening the industry. Despite challenges like perishability and infrastructure gaps, the sector holds strong long-term growth potential.

Risks & Concerns:

The mushroom trading industry faces several risks and concerns that could impact growth. Key among them is the high perishability of mushrooms, which requires efficient cold chain logistics ?€” often lacking in developing regions. Price volatility due to seasonal fluctuations and supply-demand imbalances can affect profitability. Limited farmer awareness, inadequate training, and inconsistent quality control pose challenges to scaling operations. Exporters must also navigate strict international regulations and certification requirements. Additionally, vulnerability to pests, diseases, and climate change can disrupt production cycles. Addressing these risks is essential for sustainable industry growth.

LAND DEVELOPEMNT PROJECT (TAMIL NADU)

Industry Structure and Developments

The residential plot market is witnessing rapid growth due to their proximity to major highways and industrial or commercial hubs. Excellent road and rail connectivity, coupled with ongoing infrastructure developments such as bypass roads and transport terminals, are significantly boosting real estate demand. Developers are increasingly offering government-approved plots equipped with essential amenities, making these areas attractive to both end- users and investors. These evolving zones are quickly gaining popularity as promising destinations for affordable housing and long-term capital appreciation.

Opportunities:

* Rising demand due to infrastructure projects (airports, expressways)

* Urban expansion driving residential and commercial land sales

* Industrial growth boosting need for logistics and manufacturing land

* Government incentives and policy support for development zones Threats:

* Regulatory changes causing delays or legal challenges

* Farmer protests and environmental concerns over land acquisition

* Title disputes and unclear ownership affecting transactions

* Risk of overvaluation in speculative land markets Product-wise Performance [as on 31-03-2025 (Rs. in Lakhs)]

The Company is excited to announce the initiation of its land development project, a significant step toward future growth. The first phase is already launched as Growth Town in the first half of the ensuing financial year, with the second phase to follow in the latter half. we are pleased to share the performance details below:

(in lakhs)

Revenue (Net sales/Income from operations)	5.60
Results(Profit/Loss) before Interest & Tax	(110.63)
Assets	171.72
Liabilities	272.31

Outlook

The Company expects strong growth from its Tamil Nadu land development project, with Phase 1 launching in early FY 2025-26. Strategic location, infrastructure growth, and rising demand for plotted housing support a positive market outlook. While initial costs affect short-term results, revenue and profitability are projected to improve as sales begin. Focus remains on timely execution, compliance, and value creation.

Risks & Concerns:

While this project offers promising growth potential, certain considerations remain. Gradual improvement in social infrastructure and public transport may be needed to support long-term residential settlement. As with any emerging locality, timely provision of civic amenities and services will be crucial. Market dynamics, regulatory timelines, and buyer expectations should be closely monitored to ensure smooth project execution and sustained investor confidence.

MANUFACTURING & TRADING (GUJARAT)

The frozen fruits and vegetables industry is growing steadily due to rising demand for healthy, ready-to-use food options. It operates through a structured value chain that includes farming, processing with IQF technology, cold- chain logistics, and retail distribution. Major players is seeing rapid growth driven by urbanization and modern retail expansion. Innovations such as organic and preservative-free variants, along with eco-friendly packaging, are reshaping the sector to meet evolving consumer preferences.

Opportunities:

* Growing demand for healthy, convenient food options.

* Rising awareness of nutrient retention in frozen products.

* Expansion of modern retail and cold chain infrastructure in emerging markets.

* Increasing popularity of organic and preservative-free frozen items.

* E-commerce and direct-to-consumer delivery growth.

Threats:

* Cold chain dependency and high logistics costs.

* Fluctuating raw material (fruit/vegetable) prices.

* Seasonal availability and climate change affecting supply.

* Competition from fresh produce and canned alternatives.

* Regulatory and food safety compliance challenge

Product-wise Performance [as on 31-03-2025 (Rs. in Lakhs)]

The Company is poised to launch its frozen fruits and vegetable snacks project, marking a new and exciting venture. The commencement of operations is expected shortly. As the project is yet to be launched, a summary of its projected performance is provided below

(in lakhs)

Revenue (Net sales/Income from operations)	6570.56
Results(Profit/Loss) before Interest & Tax	41.31
Assets	4676.69
Liabilities	4937.04

Outlook

The outlook for the frozen fruits and vegetables industry is positive. The global market is expected to grow steadily due to rising demand for healthy, ready-to-eat foods. In countries like India, better cold storage and growing urban lifestyles are boosting sales. More people now prefer frozen produce because it lasts longer, keeps nutrients, and reduces food waste. With new trends like organic and preservative-free options, the industry is set to expand further in both domestic and international markets.

Risks & Concerns

The project faces key risks including seasonal and climate-related raw material fluctuations, and strict regulatory compliance. Competition from fresh and canned alternatives also poses market challenges. The Company will focus on efficient supply chain management and quality assurance to mitigate these risks.

INTERNAL CONTROL SYSTEMS AND THE ADEQUACIES

The company has a structured internal control and risk management framework in place to ensure operational efficiency, safeguard assets, and maintain accurate financial records. Controls are applied across key functions like procurement, inventory, finance, and project execution. Regular reviews and audits help identify areas for improvement. As of now, no material weaknesses have been observed. Minor process improvements have been implemented to enhance tracking, reporting, and compliance.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE.

The discussion on the Companys financial performance in relation to its operational activities has been provided in detail in the Directors Report, which forms part of this Annual Report. During the year, the Company secured financial assistance from banks to support its ongoing operations and expansion needs. Details of these financial arrangements have been disclosed in the Notes to the Financial Statements, which form an integral part of the Annual Report.

LIKELY DEVELOPMENTS IN HR/INDUSTRIALRELATIONS

During the year, the Company focused on strengthening its human resources in alignment with operational needs and project expansion. Personnel were appointed across key departments to enhance capability and operational readiness. The Company continues to invest in recruitment, skill development, and employee engagement initiatives to support long-term growth. The overall work environment remained positive and cooperative, with regular communication and coordination maintained among employees and management.

KEY FINANCIAL RATIO

Pursuant to amendment made in Schedule V to the SEBI Listing Regulations, details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios and any changes in Return on Net Worth of the Company (on standalone basis) including explanations therefore are given below:

Sr no.	Particulars	Numerator	31-Mar- 25	31-Mar- 24	31-Mar- 23	% Change	Reasons
1	Current ratio	Current Assets	1.15	1.49	1.18	-22.40%	Due to decrease in liquidity
		Current Liabilities
2	Debt- equity ratios	Total Debt	1.40	0.71	0.06	98.38%	The Company has taken new borrowing from the Bank during the year which resulted into increase in debt of the company thereby, there is major changein this ratio.
		Shareholders Equity
3	Debt service coverage Ratio	PBT + Depreciation + Interest + loss on sale of asset etc.	0.20	0.42	1.95	-52.16%	Increase in repayment capacity of the company
		Debt service
4	Return on Equity	Profit After Tax (Attributable to Owners)	24.77%	32.21%	11.89%	-23.11%	Due to Decrease in profit margin of the company
		Avg. Shareholders equity
5	Inventory Turnover Ratio	Cost of Goods Sold	2.14	1.54	1.58	39.09%	Due to overall increase in business cycle of the company.
		Average Inventory
6	Trade Receivable Turnover Ratio	Net Credit Sales	254%	231%	173%	10.33%	Due to Increase in turnover but decrease in profit margin the company has granted more period for payment to the debtors.
		Average Accounts Receivable
7	Trade Payable Turnover Ratio	Net Credit Purchase	332%	259%	180%	28.19%	Due to reduction in profit margin and increase in trade receivable ratio company has delayed payment to creditors
		Average Accounts Payable
8	Net Capital Turnover Ratio	Net Sales	5.97	8.61	12.77	-30.62%	Due to implementation of strict collection policy and reduction of business cycle of the company.
		Average Working capital
9	Net Profit Ratio	Net Profit	2.69%	4.95%	1.54%	-45.55%	Due to Decrease in profit margin of the company
		Net Sales
10	Return on Capital Employed	Earning before interest and taxes	12.28%	19.84%	10.59%	-38.12%	Due to Decrease in profit margin of the company
		Capital Employedx
11	Return on Investment	Market Value at end of the year	1.34	1.38	1.15	-2.48%	NA
		Market Value at the beginning of the Year

CAUTIONARY STATEMENT

This Management Discussion and Analysis Report includes forward-looking statements that reflect the Companys current expectations regarding future performance, strategies, and developments. These statements are based on certain assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Factors such as market dynamics, regulatory changes, economic conditions, and unforeseen events may impact outcomes. The Company does not guarantee the accuracy of these projections and undertakes no obligation to update or revise any forward-looking statements in light of future developments.

	For & By order of the Board,
	Saptarishi Agro Industries Limited
	Krunal R Patel
Date : 12th August 2025	Chairman
Place : Ahmedabad	DIN-02517567