Shivashrit Foods Ltd Management Discussions

GLOBAL ECONOMY OVERVIEW

The global economy demonstrated resilience during 2025 despite continued geopolitical tensions, trade policy uncertainties, inflationary pressures in certain regions, and fluctuations in commodity prices. While growth momentum moderated across several developed economies, emerging markets continued to contribute significantly to global economic expansion.

Growth in the services sector, technological innovation, improving supply chain efficiencies, and easing inflation supported economic activity worldwide. However, challenges such as climate change, geopolitical conflicts, and trade disruptions continued to impact business sentiment and investment decisions.

The global food processing industry remained relatively resilient owing to rising demand for convenience foods, packaged food products, and ready-to-eat offerings. Growing urbanization and changing consumer preferences continued to drive demand for processed agricultural products across both developed and emerging markets.

Regional growth (%)	2025	2024
World output	2.9	3.2
Advanced economies	1.5	1.7
Emerging and developing economies	4.4	4.2

Key Developments and Risks

During 2025-26, the global economy witnessed:

- Continued geopolitical tensions affecting global trade and energy markets.

- Rising protectionist measures and tariff-related uncertainties impacting international commerce.

- Supply-chain diversification initiatives by multinational companies.

- Increased investment in artificial intelligence, automation, and digital infrastructure.

- Volatility in energy and commodity prices.

Major risks include geopolitical conflicts, trade fragmentation, inflationary pressures arising from energy costs, climate-related disruptions, and financial market volatility.

Outlook

Global growth is expected to remain moderate in 2026. While strong services activity, technological innovation, and improving supply chains may support growth, geopolitical uncertainties and trade-related risks could continue to weigh on economic prospects. Governments and central banks are expected to focus on maintaining macroeconomic stability while supporting long-term growth.

INDIA ECONOMIC OVERVIEW

India continued to be among the worlds fastest-growing major economies during FY 2025-26. Economic growth was supported by strong domestic consumption, rising infrastructure investments, healthy agricultural output, and continued policy support for manufacturing and food processing sectors.

Growth in rural demand, increasing disposable incomes, government initiatives to strengthen food processing infrastructure, and continued investment in cold-chain logistics contributed positively to the Agri-processing sector.

The countrys strong demographic profile, growing middle-class population, digital transformation, and improving logistics ecosystem continue to create opportunities for food processing companies.

Key Economic Drivers

- Robust domestic consumption.

- Expansion in food processing and agricultural value chains.

- Increased government focus on agri-infrastructure development.

- Rising demand for packaged and convenience foods.

- Growing exports of processed agricultural products.

Outlook

Indias medium-term economic outlook remains positive. Increasing urbanization, favorable demographics, strong domestic demand, and continued investments in agriculture and food processing are expected to create sustainable growth opportunities for the industry.

POTATO FLAKES INDUSTRY OVERVIEW

Potato flakes are among the most important dehydrated potato products used extensively in snack foods, instant food preparations, bakery products, soups, sauces, and quick-service restaurant applications.

The global potato flakes industry continues to expand due to increasing consumer demand for convenience foods and the growing penetration of organized retail and food service chains.

Major food manufacturers increasingly prefer potato flakes owing to:

- Longer shelf life.

- Ease of transportation and storage.

- Consistent quality.

- Reduced wastage.

- Versatility across food applications.

Growing adoption by snack manufacturers, fast-food chains, instant food producers, and institutional consumers continues to drive market expansion globally.

INDIAN POTATO FLAKES INDUSTRY

India is one of the worlds largest potato-producing countries, providing a strong foundation for the potato processing industry.

The Indian potato flakes market continues to witness healthy growth driven by:

- Expansion of branded snack manufacturers.

- Growth of quick-service restaurants (QSRs).

- Rising demand for convenience foods.

- Increasing exports to Middle East, Africa and Asian markets.

- Government support for food processing and agri-export development.

The emergence of India as a competitive processing hub, coupled with abundant raw material availability, provides significant opportunities for growth.

Opportunities

- Growing demand from snack food manufacturers.

- Export market expansion.

- Product diversification into value-added potato products.

- Rising demand for clean-label and natural food ingredients.

- Increasing application in food service and QSR segments.

Challenges

- Fluctuation in potato prices.

- Weather dependency affecting crop yields.

- Storage and cold-chain requirements.

- Rising transportation and logistics costs.

- Competition from alternative starch products.

Industry Outlook

The outlook for the Indian potato flakes industry remains positive. Rising consumption of processed food products, increasing export opportunities, and investment in food processing infrastructure are expected to drive long-term demand growth.

COMPANY OVERVIEW

Shivashrit Foods Limited is engaged in the manufacturing and marketing of premium-quality potato flakes. The Company operates a modern potato processing facility in Uttar Pradesh and caters to a diverse customer base comprising snack manufacturers, food processing companies, institutional buyers, and export customers.

The Company focuses on:

- Producing high-quality potato flakes.

- Building long-term farmer relationships.

- Strengthening raw material sourcing.

- Expanding domestic and international markets.

- Enhancing operational efficiencies.

- Developing value-added potato-based products.

Through a combination of technology, efficient sourcing, and customer-centric operations, the Company continues to strengthen its presence in the potato processing industry.

FINANCIAL REVIEW

Revenue Performance

Revenue from Operations increased to Rs. 11,351.47 Lakhs during FY26 as compared to Rs. 10,469.34 Lakhs in FY25, registering a growth of 8.43%.

Total Income increased by 9.10% to Rs. 11,547.62 Lakhs from Rs. 10,584.59 Lakhs in the previous year. The growth was driven by improved sales realization, continued demand from industrial customers, and expansion in market reach.

Profitability

EBITDA increased by 11.40% to Rs. 2,604.82 Lakhs in FY26 as against Rs. 2,338.18 Lakhs in FY25. Profit Before Tax increased by 17.00% to Rs. 1,776.78 Lakhs compared to Rs. 1,518.66 Lakhs in the previous financial year.

Profit After Tax grew by 16.55% to Rs. 1,405.00 Lakhs from Rs. 1,205.50 Lakhs in FY25.

The improvement in profitability reflects operational efficiencies, effective cost management, and improved capacity utilization.

Finance Cost and Depreciation

Finance costs stood at ?451.29 Lakhs during FY26 compared with ?381.40 Lakhs in FY25.

Depreciation and amortization expenses decreased to ?376.75 Lakhs from ?438.12 Lakhs in the previous year.

Earnings Per Share

Basic and Diluted Earnings Per Share stood at Rs. 8.51 per share during FY26 compared with Rs. 8.61 per share in FY25.

KEY STRENGTHS

- Established presence in the potato flakes market.

- Strategic location in a potato-producing belt.

- Strong farmer relationships and sourcing network.

- Modern processing facilities and quality control systems.

- Growing domestic and export customer base.

- Focus on operational efficiency and product quality.

- Experienced management team with industry expertise.

RISK MANAGEMENT

The Company has established a risk management framework to identify, monitor, and mitigate business risks.

KEY RISKS INCLUDE:

Raw Material Risk

Potato availability and prices may fluctuate due to weather conditions and crop yields. The Company mitigates this risk through farmer engagement programs and diversified sourcing arrangements.

Market Risk

Changes in customer demand, competition, and pricing pressure may impact profitability. The Company focuses on customer diversification and product quality to maintain competitiveness.

Operational Risk

Disruptions in manufacturing operations may affect business performance. Preventive maintenance practices and robust operational controls help mitigate operational risks.

Regulatory Risk

Changes in food safety, environmental, and export regulations may impact operations. Continuous compliance monitoring ensures adherence to applicable regulations.

HUMAN RESOURCES

The Company believes that human capital is fundamental to sustainable growth and business success.

The Company continues to focus on:

- Employee development and training.

- Workplace safety and health.

- Performance-driven culture.

- Employee engagement and retention.

- Equal opportunity and diversity.

Industrial relations remained cordial throughout the year.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains an adequate system of internal controls commensurate with the size, nature, and complexity of its business operations.

These controls are designed to ensure:

- Safeguarding of assets.

- Compliance with applicable laws and regulations.

- Accuracy of accounting records.

- Reliability of financial reporting.

- Operational efficiency and effectiveness.

The internal control framework is regularly reviewed by management, internal auditors, and the Audit Committee to ensure its effectiveness and continuous improvement.

CAUTIONARY STATEMENT

Certain statements contained 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. Actual results may differ materially from those expressed or implied due to various factors including changes in economic conditions, government policies, market demand, raw material availability, competitive pressures, and other risks and uncertainties. The Company undertakes no obligation to publicly update any forward-looking statements.

CIN No. - U15490UP2017PLC096223

GSTIN - 09AAZCS1229D1Z2

PAN - AAZCS1229D

Phone: 0571-2525577

0571-3500346

Shivashrit Foods Limited

Formerly Shivashrit Foods Pvt. Ltd.