Tanvi Foods India Ltd Management Discussions

Disclaimer

The section contains a discussion on the opinions and perceptions of the Management on the trends that impact the Company. It has been collated from Information available publicly and reports by various nodal and governmental agencies that the Management believes to be accurate at the time publishing this report. The Company does not undertake or revise any of the opinions or statements expressed in this report consequent to, inter alia, revisions to the reports mentioned herein, new information, future events or otherwise.

This Management Discussion and Analysis Report presents a brief presentation of Companys performance over the previous years and simultaneously attempts to make a fair and practical analysis of our strengths and weaknesses and our position at micro level vis a vis the global scenario. While we recapitulate our past performance in this Annual Report, we have also endeavored to present our areas of focus which we feel would help the Company to go to next level.

This report may contain forward-looking statements, identified by words like plans, expects, will, anticipates, believes, intends, projects, estimates and so on. All statements that address expectations or projections about the future, but not limited to the Companys strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, we do not guarantee that these are accurate or will be realized.

Our actual results, performance or achievements could thus differ from those projected in any forward-looking statements. We assume no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events.

1. Industry structure and developments

The global frozen food industry continues to demonstrate resilience and long-term growth, supported by changing lifestyles, urbanisation, increasing participation of women in the workforce, growth of dual-income households and greater demand for convenient meal solutions. Improvements in cold-chain infrastructure, freezing technology, organised retail, food-service distribution and e- commerce are further improving the accessibility of frozen products.

Consumer preferences are gradually moving beyond basic frozen commodities towards ready-to-cook foods, ready meals, snacks, appetisers, ethnic cuisines, clean-label products and portion-controlled formats. Convenience, consistency, reduced preparation time, longer shelf life and lower food wastage remain important factors supporting category growth.

Global retail sales of frozen ready meals increased at a compound annual growth rate of approximately 4.1% between 2020 and 2025, reaching an estimated US$48.8 billion in 2025. The category is projected to maintain steady growth through 2030, although actual performance may vary across markets depending on inflation, consumer spending, freight costs, tariffs, regulatory changes and retail competition.

For Tanvi Foods India Limited, the increasing global preference for authentic Indian cuisine, frozen snacks, restaurant solutions and convenient retail products presents a meaningful long-term opportunity.

Regional Market Trends United States

The US is a large and mature frozen food market, driven by convenience, strong cold-chain infrastructure and widespread household consumption. Growing demand for Indian and globally inspired frozen foods, along with restaurant demand for consistent and easy-to- prepare products, presents an opportunity for Tanvi Foods.

United Kingdom

The UK has a well-established frozen food market supported by supermarkets, ethnic stores and food-service operators. Its sizeable Indian and South Asian population and growing demand for authentic, convenient and competitively priced products provide an opportunity for Tanvi Foods, with UK operations proposed to commence from September 2026.

Canada

Canada has a sizeable frozen ready-meal market with growing demand for convenient and multicultural foods. The strong Indian and South Asian consumer base provides an attractive opportunity for Tanvi Foods across frozen ready meals, snacks and food-service products.

Australia

Australia has strong adoption of convenience foods and a diverse multicultural consumer base, supporting demand for frozen ready meals, snacks and Indian cuisine. Tanvi Foods sees opportunities in retail and restaurant-focused products, subject to applicable import, biosecurity and labelling requirements.

Europe

Europe represents a large and diverse frozen food market, with demand driven by convenience, sustainability, food-waste reduction and international cuisines. Tanvi Foods proposes to evaluate selected European markets through its UK presence, subject to regulatory and commercial feasibility.

Middle East

The UAE, Saudi Arabia and other GCC markets offer attractive opportunities for frozen foods due to urbanisation, expatriate populations, modern retail and a strong food-service sector. Tanvi Foods proposes to explore frozen snacks, ready meals, gravies and restaurant packs through suitable local partners.

2. Opportunities, Risks, Concerns and threats Opportunities

The principal opportunities available to the Company include:

• Increasing global demand for authentic Indian food;

• Growth of frozen ready-to-cook foods, snacks and ethnic meals;

• Rising demand for standardised B2B restaurant products;

• Expansion of Indian and South Asian retail formats overseas;

• Direct distribution through the Companys US warehouse network;

• Commencement of UK operations;

• Entry into Canada, Australia, Singapore, the Middle East and Europe;

• Development of preservative-free and clean-label products;

• Expansion into Indian retail, modern trade and e-commerce; and

• Product customisation for institutional, retail and private-label customers.

Threats, Risks and Concerns

The Companys operations are subject to various risks, including:

• Changes in import duties, tariffs and trade policies;

• Foreign-exchange fluctuations;

• Freight, fuel, raw-material, packaging and energy-cost increases;

• Geopolitical developments and shipping-route disruptions;

• Extended export and receivable cycles;

• Working-capital availability;

• Cold-chain interruptions and inventory losses;

• Changes in food-safety, labelling and import regulations;

• Product-registration and certification requirements;

• Competition from domestic, international and private-label brands;

• Customer concentration and credit risk; and

• Consumer preferences relating to nutrition, sodium, allergens and processed foods.

The Company seeks to mitigate these risks through geographic diversification, product development, customer credit controls, insurance, quality systems, supplier development and phased market entry.

3. Segment-wise or product-wise performance

The Company is engaged principally in one reportable business segment, namely food processing and trading. Accordingly, separate segment-wise financial results are not reported. The principal product groups include samosas and other snacks; fresh and frozen agricultural products such as corn and green peas; spring rolls and other rolls; and prepared foods such as dals and curries.

Standalone revenue from operations increased to Rs. 10,639.34 lakh in FY 2025-26 from Rs. 8,469.74 lakh in FY 2024-25, a growth of 25.6%. The growth reflects higher business volumes and the scaling of operations from the Seetharampuram facility. Consolidated revenue from operations was Rs. 10,256.19 lakh; the difference from standalone revenue primarily reflects consolidation adjustments and elimination of intra-group transactions.

Subsidiary footprint

a) Polar Cube Cold Storage Solutions Private Limited remained a wholly owned subsidiary and supports cold-storage and warehousing activities.

b) Tanvi Foods USA Inc. remained a 55% subsidiary and supports the sale and distribution of frozen products in the United States.

c) Tanvi Foods UK Limited was incorporated on January 8, 2026 as a 51% subsidiary to support business development in the United Kingdom.

d) Squarepeg Distribution Services Private Limited ceased to be a wholly owned subsidiary following divestment of the Companys entire shareholding on 30.06.2025 Its results up to the date of cessation have been considered in the consolidated financial statements, as applicable.

4. Outlook

The Company intends to focus on improving capacity utilization, widening its product portfolio, strengthening domestic distribution and expanding exports. The approximately Rs. 45 crore Seetharampuram project provides a platform to serve both domestic and overseas demand with enhanced processing and freezing capability. Management will also focus on product quality, food safety, customer service, procurement efficiency, receivable discipline and tighter working-capital management.

The overseas subsidiaries are expected to assist market access and customer development, while the Company will evaluate expansion in a measured manner, considering regulatory requirements, channel economics, currency risk and collection cycles. The outlook remains subject to demand conditions, raw-material availability and pricing, competitive intensity, logistics, currency movements and the other risks described below.

5. Internal control systems and their adequacy

The Company has internal financial controls and operating procedures commensurate with its size, nature of operations and evolving business requirements. The framework covers authorization and recording of transactions, safeguarding of assets, inventory and receivable controls, statutory compliance, financial reporting and management review.

The internal audit function reviews selected processes and reports its observations to the Audit Committee. The Audit Committee reviews the adequacy and effectiveness of internal controls, financial reporting processes, internal-audit findings and corrective actions. The statutory auditors have also considered internal financial controls over financial reporting in accordance with the applicable legal and professional requirements. Management continues to strengthen systems and controls as operations and the international footprint expand.

6. Financial performance with respect to operational performance

The financial performance for FY 2025-26 and the comparative year is summarized below:

Particulars	Standalone FY 2025-26	Standalone FY 2024-25	% Change	Consolidated FY 2024-25	Consolidated FY 2025-26	% Change
Revenue from operations	10,639.34	8,469.74	25.60%	10,256.19	8,536.09	20.1%
Other income	353.35	12.38	2,754.70%	353.35	13.46	2,525.90%
Total income	10,992.69	8,482.12	29.60%	10,609.54	8,549.54	24.10%
Finance costs	289.72	223.50	29.60%	289.72	223.50	29.60%
Depreciation and amortization	289.32	50.76	469.90%	289.32	50.76	469.90%
Profit before tax	90.55	30.68	195.20%	215.69	30.25	613.00%
Profit after tax	90.98	36.55	148.90%	215.44	36.12	496.40%
Basic EPS (Rs.)	0.71	0.28	148.90%	1.25	0.28	343.80%

Standalone operating revenue grew 25.60%, while profit after tax increased 148.90%. Other income rose materially during the year. Finance costs increased with the funding profile, while depreciation increased following capitalization and use of the expanded asset base. Despite these charges, improved revenue and earnings resulted in higher profitability. On a consolidated basis, profit after tax increased to Rs. 215.44 lakh, aided by the contribution of subsidiaries, subject to consolidation adjustments and minority interest.

Trade receivables increased to Rs. 1,660.19 lakh at March 31,2026 from Rs. 417.74 lakh at March 31,2025, reflecting the timing and mix of collections, including expansion of export business. Inventory stood at Rs. 3,525.73 lakh compared with Rs. 3,625.72 lakh. Management is placing continued emphasis on receivable monitoring, collection discipline and inventory efficiency.

7. Human resources and industrial relations

Human resources remain important to production quality, food safety, customer service and business growth. The Company continued to focus on recruitment, on-the-job training, hygiene and safety awareness, performance management and employee engagement. Industrial relations remained cordial during the year and there were no material work stoppages reported.

As at March 31, 2026, the Company had approximately 258 permanent employees. Women represented approximately 85% of the workforce, reflecting the Companys continuing emphasis on inclusive employment. The Company will continue to build technical, operational, quality and managerial capabilities in line with business requirements.

8. Key financial ratios and significant changes

The following standalone ratios are presented in accordance with Part B of Schedule V to the SEBI Listing Regulations. A movement of 25% or more has been marked as significant. Ratios are based on the methods used in the financial statements; percentage change is calculated with reference to the preceding year.

Ratio	FY 2025-26	FY 2024-25	% Change	>25%	Explanation
Debtors / trade receivables turnover (times)	6.41	20.27	(68.40%)	Yes	Higher year-end receivables due to the timing and mix of collections, including export business.
Inventory turnover (times)	2.98	2.36	26.00%	Yes	Revenue increased while average i nventory remained broadly stable, improving inventory productivity.
Interest coverage ratio* (times)	1.31	1.14	15.40%	No	Improved earnings before interest and tax partly offset the increase in finance costs.
Current ratio (times)	1.66	1.73	(4.40%)	No	Current assets continued to cover current liabilities; the movement was not significant.
Debt-equity ratio (times)	0.32	0.30	6.10%	No	Borrowings increased moderately relative to shareholders equity.
Operating profit margin**	3.57%	3.00%	19.10%	No	Higher earnings before interest and tax relative to operating revenue.
Net profit margin	0.86%	0.43%	98.20%	Yes	Higher revenue and other income, together with operating leverage, increased profit after tax.

RATIO BASIS:

*Interest coverage = earnings before interest and tax / finance costs.

**Operating profit margin = earnings before interest and tax / revenue from operations. Other ratios follow the basis disclosed in the notes to the standalone financial statements. Figures are rounded.

9. Return on net worth

Measure	FY 2025-26	FY 2024-25	% Change	>25%	Explanation
Return on net worth / equity	1.28%	0.52%	145.70%	Yes	The increase is primarily attributable to the rise in profit after tax from Rs. 36.55 lakh to Rs. 90.98 lakh, while shareholders equity increased moderately.

Return on net worth has been computed as profit after tax divided by shareholders equity, consistently with the ratio note forming part of the standalone financial statements. Kindly also refer to Note 31C of the financial statements.

10. Accounting treatment

The financial statements have been prepared in accordance with the Accounting Standards prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Accounting Standards) Rules, 2021, and other generally accepted accounting principles in India, as applicable. The Company has not followed any accounting treatment different from that prescribed in the applicable Accounting Standards requiring explanation in this Management Discussion and Analysis. There has been no deviation in the accounting treatment from that prescribed in the Accounting Standards.

Cautionary Statement

This report contains forward-looking statements extracted from reports of Government Authorities / Bodies, Industry Associations etc. available on the public domain which may involve risks and uncertainties including, but not limited to, economic conditions, government policies, dependence on certain businesses and other factors. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. This report should be read in conjunction with the financial statements included herein and the notes thereto. We assume no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events.

For and on behalf of the Board of
Tanvi Foods (India) Limited

Sd/-
Sri Nagaveer Adusumilli
Chairman & Managing Director
DIN:02096695
Place: Hyderabad
Date: 05.09.2026

Sd/-
Vasavi Adusumilli
Whole Time Director & CFO
DIN: 02589803
Place: Hyderabad
Date: 05.09.2026