Saptarishi Agro Industries Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

Saptarishi Agro Industries Limited has strategically diversified its business operations with a focus on value-added food processing and integrated real estate development while continuing its presence in the agri-business sector. During the Financial Year 2025-26, the Company achieved significant milestones through the successful commissioning of its French Fries and Frozen Vegetable Processing Facility at Fanidhar Mega Food Park, Mehsana, Gujarat and the launch of the first phase of its integrated land development project at Chengalpattu, Tamil Nadu under the brand "Growth Town." The Companys business operations are presently organised into three principal business segments:

- Trading of Mushrooms and allied agricultural products;

- Manufacturing and Trading of Frozen French Fries and Frozen Vegetables; and

- Land Development and Sale of Residential Plots.

This diversified business model enables the Company to reduce dependence on a single business vertical while creating multiple long-term revenue streams supported by modern infrastructure, strategic investments and efficient project execution.

TRADING (MUSHROOMS & ALLIED AGRICULTURAL PRODUCTS) Industry Structure & Developments

Indias mushroom industry continues to witness gradual growth driven by increasing consumer awareness regarding healthy dietary habits, higher protein consumption and demand for nutritious food products. Growth in organised retail, hospitality, quick service restaurants and e-commerce platforms has further expanded the market for fresh as well as processed mushrooms.

Government initiatives supporting food processing, cold chain infrastructure and farmer producer organisations continue to provide opportunities for organised participants. Although the industry remains fragmented, increasing emphasis on quality standards, food safety and traceability is expected to support organised businesses over the long term.

Business Performance

The Company continues to maintain its presence in the mushroom trading business. The management remains focused on maintaining customer relationships, improving operational efficiencies and exploring opportunities for expanding the product portfolio in line with changing consumer demand.

Amount in Lakhs

Particular	FY 2025-2026	FY 2024-2025
Revenue	6666.87	1366.99
Segment Profit/(Loss) Before Tax	276.14	362.05
Segment Assets	2119.55	1811.87
Segment Liabilities	1628.06	457.35

Opportunities

- Growing demand for healthy and protein-rich food products.

- Increasing acceptance of value-added and processed food products.

- Expansion of organised retail and food service industry.

- Government support for food processing and agricultural infrastructure.

Threats

- Perishable nature of agricultural produce.

- Price volatility and seasonal availability.

- Increasing competition from organised and unorganised participants.

- Rising logistics and storage costs.

Outlook

The Company intends to continue its presence in the mushroom trading business while leveraging its experience in food processing to strengthen operational efficiencies and improve profitability. Management will continue evaluating opportunities to diversify the product portfolio based on market demand.

MANUFACTURING & TRADING (FROZEN FRENCH FRIES & FROZEN VEGETABLES - GUJARAT) Industry Structure & Developments

The Indian frozen food industry has witnessed robust growth over the last few years, driven by changing consumer lifestyles, increasing urbanisation, expansion of organised retail and growing demand from quick service restaurants, hotels, institutional buyers and export markets. Rising preference for convenience foods, improved cold-chain infrastructure and increasing adoption of frozen food products have further accelerated market growth.

The French fries segment continues to remain one of the fastest-growing categories within the frozen food industry owing to increasing consumption through restaurant chains, food delivery platforms and international markets. Simultaneously, demand for frozen vegetables is also witnessing steady growth due to changing food consumption patterns and increasing awareness regarding hygienically processed food products.

Recognising these emerging opportunities, the Company has established a modern Frozen French Fries and Frozen Vegetable Processing Facility at Fanidhar Mega Food Park, Mehsana, Gujarat, equipped with advanced processing technology and supporting utility infrastructure.

Business Performance

During the year under review, the Company successfully completed installation and commissioning of its Frozen French Fries and Frozen Vegetable Processing Facility at Fanidhar Mega Food Park, Mehsana.

The project has been developed with an installed processing capacity of approximately1 Metric Ton per hour, enabling annual production capacity of around 6,000 Metric Tons of finished products based on planned operational schedules.

During the year, the Company completed installation and commissioning of major utility infrastructure including boilers, refrigeration systems, transformers, HT and LT electrical systems, air compressors, e_uent treatment plant (ETP), sewage treatment plant (STP), reverse osmosis plant, natural gas systems, cold storage facilities and other production support utilities. Necessary statutory approvals and operational licences required for commencement of commercial production were substantially obtained during the year.

The Company also completed installation of packaging facilities, refrigeration systems, utility pipelines, oil storage infrastructure, workers hygiene facilities, administrative block and quality control arrangements to ensure efficient manufacturing operations in compliance with applicable food safety standards.

To improve operational efficiency and sustainability, the Company further approved installation of a 115 KW Solar Rooftop Power System at its manufacturing facility and authorised the execution of necessary agreements and regulatory documentation.

The Board also authorised designated offcials to complete all necessary formalities with Uttar Gujarat Vij Company Limited (UGVCL) relating to electricity connection, enhancement of load, execution of power supply agreements and associated operational requirements.

During the year, the Company successfully recruited experienced professionals across production, quality assurance, engineering, maintenance, administration, finance and marketing functions to support commercial operations. Recruitment for selected key managerial positions continued during the year to further strengthen operational capabilities.

The Company has introduced its own consumer brand "FRAYTOZ" for marketing of frozen food products. Branding activities, packaging design, product samples and commercial packaging materials were completed during the year, enabling commencement of marketing and sales activities.

The manufacturing facility has also been designed to process vegetables in addition to French fries, thereby enhancing product diversification, improving plant utilisation and creating additional revenue opportunities.

Amount in Lakhs

Particular	FY 2025-2026	FY 2024-2025
Revenue	393.24	6570.56
Segment Profit/(Loss) Before Tax	-944.58	41.31
Segment Assets	4826.27	4676.69
Segment Liabilities	2886.64	4937.04

Opportunities

- Growing domestic and international demand for frozen food products.

- Expansion of organised retail, institutional buyers and quick service restaurant chains.

- Export opportunities for value-added processed food products.

- Government support for food processing and cold-chain infrastructure.

- Product diversification through frozen vegetables and allied processed food products.

- Renewable energy initiatives expected to improve long-term operating efficiency.

Threats

- Fluctuation in availability and prices of agricultural raw materials.

- Intense competition from established domestic and international manufacturers.

- Dependence on uninterrupted utility services and cold-chain infrastructure.

- Changes in food safety regulations and export requirements.

- Infiationary pressures on packaging, transportation and utility costs.

Outlook

The Company expects the successful commissioning of its processing facility to significantly strengthen its operational capabilities and create sustainable long-term growth opportunities. Going forward, the management intends to focus on capacity utilisation, expansion of domestic and export markets, strengthening the FRAYTOZ brand and introduction of additional value-added frozen food products to enhance revenue diversification and improve shareholder value.

LAND DEVELOPMENT (CHENGALPATTU, TAMIL NADU) Industry Structure & Developments

The Indian real estate sector continues to be one of the key contributors to the countrys economic growth. Increasing urbanisation, infrastructure development, favourable government policies, rising disposable income and growing demand for planned residential communities have supported sustained growth in the residential plotted development segment. The implementation of the Real Estate (Regulation and Development) Act, 2016 (RERA) has further enhanced transparency, improved buyer confidence and encouraged organised development.

The plotted development segment has witnessed increased demand, particularly in suburban locations surrounding metropolitan cities, driven by improved connectivity, infrastructure expansion and preference for long-term investment in land assets. The Governments continued focus on urban infrastructure and planned development is expected to provide further impetus to this sector.

Recognising these opportunities, the Company has strategically undertaken a Joint Development Project at Chengalpattu, Tamil Nadu, to unlock value from its land assets through phased residential development.

Business Performance

During the year under review, the Company achieved significant progress in its Joint Development Project at Chengalpattu, Tamil Nadu under the project name "Growth Town." The first phase of the project, spread over approximately 8.61 acres, received all major statutory approvals from the competent authorities, enabling the Company to formally launch the project for booking during the year. The project comprises approximately 210 residential plots of various sizes supported by planned internal roads, open spaces, childrens play area, entrance infrastructure and utility services in accordance with the approved development plan.

During the year, the Company successfully completed execution of the required Gift Deeds in favour of the concerned local authorities as part of the development approval process. Necessary infrastructure development including internal roads, compound wall and other common facilities progressed in line with the approved project schedule.

Subsequent to the launch of the project, encouraging customer response was received. A substantial number of plots were booked and registrations were completed during the year, while registration of the remaining plots is expected to be completed in the normal course of business.

The Company also initiated necessary regulatory procedures for the development of the subsequent phases of the project. Applications for land conversion, statutory approvals and other regulatory compliances relating to the next phase were undertaken during the year to ensure timely project execution.

In order to facilitate smooth implementation of future development activities, the Company approved opening of a dedicated RERA Account, authorised execution of Sale Deeds, approved conversion of identified wet land into dry land in accordance with applicable laws and also approved restructuring of the existing mortgage with HDFC Bank Limited to facilitate phased development of the project.

The management remains focused on timely execution of the subsequent phases while ensuring compliance with all applicable statutory and regulatory requirements.

Amount in Lakhs

Particular	FY 2025-2026	FY 2024-2025
Revenue	0	6570.56
Segment Profit/(Loss) Before Tax	887.91	41.31
Segment Assets	526.51	4676.69
Segment Liabilities	1878.37	4937.04

Opportunities

- Growing demand for plotted residential developments in suburban growth corridors.

- Increasing investment in infrastructure by the Government.

- Rising preference for land ownership as a long-term investment.

- Transparent regulatory framework under RERA improving customer confidence.

- Significant value unlocking opportunities from phased development of the Companys land bank.

- Potential expansion into subsequent phases of the project.

Threats

- Changes in real estate regulations and approval timelines.

- Fluctuations in construction and infrastructure development costs.

- Changes in customer demand and market conditions.

- Delays in statutory approvals for future phases.

- Economic conditions affecting investment sentiment in the real estate sector.

B. BUSINESS ANALYSIS

The Company has adopted a diversified business strategy with operations across food processing, agricultural trading and real estate development, thereby reducing dependence on a single business segment and creating multiple sources of revenue.

During the year under review, the Company successfully completed the commissioning of its Frozen French Fries and Frozen Vegetable Processing Facility at Fanidhar Mega Food Park, Mehsana, Gujarat. The project has established a strong manufacturing base supported by modern processing technology, utility infrastructure, quality assurance systems and renewable energy initiatives, enabling the Company to address the growing demand for value-added frozen food products in domestic as well as export markets.

The Company also launched the first phase of its residential plotted development project "Growth Town" at Chengalpattu, Tamil Nadu after obtaining the requisite statutory approvals. The encouraging response received from customers and the substantial progress achieved in registrations reflects the strong growth potential of this business segment. Simultaneously, the Company has initiated preparatory activities for the subsequent phases of development to ensure continuity of operations and sustainable value creation. The mushroom trading business continues to complement the Companys diversified operations while leveraging its long-standing experience in the agri-business sector.

With modern manufacturing infrastructure, strategic land assets, diversified business operations and a prudent management approach, the Company is well positioned to capitalise on emerging opportunities across its business segments and generate sustainable long-term value for its stakeholders.

C. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate system of internal controls commensurate with the size, nature and complexity of its business operations. The internal control framework is designed to ensure efficient utilisation of resources, safeguarding of assets, accuracy and reliability of financial reporting, compliance with applicable laws and regulations and effective management of operational risks.

The Company has implemented appropriate internal control procedures across procurement, inventory management, production, finance, project execution, sales, statutory compliances and information systems. The internal financial controls are periodically reviewed by the management and the Audit Committee to ensure their continued effectiveness and adequacy.

During the year under review, with the commissioning of the Frozen French Fries & Frozen Vegetable Processing Facility and commencement of the Companys real estate operations, additional operational control mechanisms were implemented for production processes, quality assurance, inventory management, statutory approvals and project monitoring. Necessary controls were also strengthened for monitoring utility infrastructure, project expenditure, regulatory compliances and contract execution.

The management believes that the existing internal control systems are adequate and effective and provide reasonable assurance regarding orderly and efficient conduct of business, protection of assets and prevention and detection of frauds and errors.

D. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the Financial Year 2025-26, the Company continued to strengthen its operational capabilities through strategic investments across its manufacturing and land development businesses.

The successful commissioning of the Frozen French Fries & Frozen Vegetable Processing Facility at Fanidhar Mega Food Park, Mehsana marked a significant milestone in the Companys expansion strategy. The Company completed installation of major plant and machinery, utility infrastructure, cold storage facilities, quality control systems and other supporting infrastructure required for commercial production. The introduction of the Companys own consumer brand "FRAYTOZ" further establishes its presence in the value-added frozen food segment.

The Company also achieved substantial progress in its Joint Development Project at Chengalpattu, Tamil Nadu through the successful launch of the first phase of the "Growth Town"project. During the year, the Company completed major statutory compliances, infrastructure development activities and commenced registration of residential plots, creating an additional source of long-term revenue.

The Company continued to invest in strengthening its operational infrastructure through renewable energy initiatives, utility enhancements, human resource development and technology-driven operations. These strategic initiatives are expected to contribute positively towards improving operational efficiency and supporting sustainable business growth in the coming years.

A detailed analysis of the Companys financial performance forms part of the Directors Report together with the Audited Financial Statements forming part of this Annual Report.

E. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company firmly believes that its employees are its most valuable resource and remain integral to its long-term success.

During the year, the Company significantly strengthened its organisational capabilities by recruiting experienced professionals across production, quality assurance, maintenance, engineering, administration, finance, marketing and operational functions to support the commissioning and commercial operations of its food processing facility.

Continuous emphasis was placed on employee development, operational excellence, workplace safety, regulatory compliance and performance-driven culture. The Company also continued to focus on creating a healthy, safe and inclusive work environment through appropriate welfare measures and training initiatives. Industrial relations remained cordial throughout the year. The management places on record its appreciation for the commitment, dedication and contribution of its employees towards achieving the Companys operational and strategic objectives.

F. KEY FINANCIAL RATIOS

Pursuant to the provisions of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of the Key Financial Ratios together with explanations for significant changes, wherever applicable, have been provided in the Financial Statements forming part of this Annual Report.

The management regularly monitors these financial indicators to assess liquidity, operational efficiency, capital structure and overall financial performance and continues to undertake suitable measures for improving operational and financial performance.

Sr. Particulars	(Amount in _ Lakh)		2025-26	2024-25	%	Reason for deviation
No	2025-26	2024-25			Change	by more than 25%
1 Current Ratio,	5598.53	6028.58	1.07	1.15	-7.58	Not Applicable
Current Assets / Current Liabilities	5246.73	5221.62
2 Debt-Equity Ratio, Non Current Borrowing + Current Borrowing / Shareholder Equity	3761.94 1079.28	1390.49 993.56	3.49	1.40	149.06	The Company has continue to obtain new borrowing from the Bank during the year which resulted into increase in debt of the company thereby, there is major change in this ratio.
3 Debt Service Coverage Ratio, EBIT / Interest Expense+Principal Repayment during the year for long term loans	219.49 839.05	292.72 78.71	0.26	3.72	-92.97	Increase in repayment capacity of the company
4 Return on Equity	89.35	214.02	8.62	24.77	-65.19	Due to Decrease in
Ratio (%), (PAT/Avg. Eq.Shareholders Fund)*100	1036.42	864.15				profit margin of the company

 

Sr. Particulars	(Amount in _ Lakh)		2025-26	2024-25	%	Reason for deviation
No	2025-26	2024-25			Change	by more than 25%
5 Inventory turnover	7191.89	7446.03	0.47	2.14	-77.90	Due to Decrease in
ratio, Cost of goods	1872.60	428.40				business cycle of the
sold /Average						company
Inventories
6 Trade Receivables	7060.12	7943.15	2.02	2.54	-20.55	Not Applicable
turnover ratio, Net	3492.88	3122.00
Credit Sales/Average
Trade Receivable
7 Trade payables	6900.81	7954.45	2.11	3.32	-36.51	With increased
turnover ratio, Net	3269.13	2392.43				borrowing company
Credit Purchase/						has paid to its creditors
Average Trade						which resulted into
Payables						decrease in ratio.
8 Net capital turnover	7060.12	7943.15	12.19	11.52	5.80	Not Applicable
ratio, Sales/Average	579.38	689.65
Working Capital
9 Net profit ratio (%),	89.35	214.02	0.01	0.03	-53.03	On account of potato
(Profit After Tax/	7060.12	7943.15				loss; companys profit
Sales)*100						margin reduced.
10 Return on Capital	219.49	292.72	0.05	0.12	-63.08	Due to Decrease in
employed,						profit margin of the
Operating						company
Profits(EBIT)/Capital	4841.21	2384.05
Employed(Net
Assets)*100

G. OUTLOOK

The Company remains optimistic about its future growth prospects, supported by its diversified business model comprising food processing, agri-business and real estate development.

The successful commissioning of the Frozen French Fries & Frozen Vegetable Processing Facility provides the Company with a strong platform to expand its presence in the domestic and international frozen food markets. Going forward, the management intends to focus on improving capacity utilisation, strengthening the FRAYTOZ brand, expanding institutional and export business and introducing additional value-added frozen food products to enhance operational efficiency and profitability.

In the real estate segment, the Company remains committed to the successful execution of the subsequent phases of the Growth Town project. The management will continue to focus on timely regulatory approvals, infrastructure development and efficient project execution to maximise value from its land assets while maintaining high standards of governance and compliance.

The Company will also continue exploring opportunities for strategic expansion, operational excellence, technology adoption and sustainable business practices to strengthen its competitive position and create long-term value for all stakeholders.

H. CAUTIONARY STATEMENT

Statements made in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations. These statements are based on certain assumptions and expectations of future events and are subject to various risks and uncertainties.

Actual results may differ materially from those expressed or implied depending upon economic conditions, changes in government policies, regulatory developments, market conditions, demand and supply dynamics, availability and prices of raw materials, competition, climatic conditions and other factors beyond the control of the Company.

The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of subsequent developments, information or events except as required under applicable laws.