Tapi Fruit Processing Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS & OUTLOOK

Introduction

The global macroeconomic landscape faces significant headwinds in the year ahead, characterized by decelerating growth, persistent geopolitical tensions, and a cautious recalibration of monetary policy. A key driver of this slowdown is the intensification of trade disputes—most notably, the implementation of U.S. tariffs, including a 10% baseline levy and elevated duties on Chinese imports. These measures have disrupted global trade flows, provoked retaliatory actions, and heightened policy uncertainty, collectively dampening investor confidence, curbing capital expenditures, and sustaining inflationary pressures.

The International Monetary Fund (IMF) projects global GDP growth at 2.8% for 2025, slightly outpacing the World Banks estimate of 2.3%. While global inflation is expected to decline to 4.2%, the disinflationary trajectory will likely be uneven, with advanced economies on track to meet central bank targets ahead of their emerging market counterparts.

Trade performance is expected to weaken significantly, with global trade volumes forecast to grow by just 1.7% in 2025—a notable drop from 3.8 % in the prior year. This decline reflects the compounded effects of escalating trade restrictions and mounting policy ambiguity. As a result, stakeholders across the public and private sectors are closely monitoring developments in energy markets, global supply chains, and key international trade corridors.

Indian economic review

Indias economic performance in FY25 has demonstrated resilience amid global uncertainties, with real GDP growth estimated between 6.3% and 6.5%. This steady growth trajectory is underpinned by robust domestic demand, strategic public investments, and a rebound in key sectors.

Deloittes May 2025 outlook projects Indias GDP growth in the range of 6.3% to 6.5% for FY25, with expectations of 6.5% to 6.7% for FY26. This optimistic forecast is attributed to tax incentives boosting consumer spending and strong domestic demand. However, potential headwinds include global trade uncertainties and the impact of international tariff regimes.

EYs assessment aligns with this outlook, projecting Indias real GDP growth at 6.4% for FY25 and 6.5% for FY26. The firm emphasizes the importance of well-calibrated fiscal strategies that support human capital development while maintaining fiscal prudence to enhance longterm growth prospects.

On the supply side, the agriculture sector is projected to grow by 3.8%, bolstered by favorable monsoon conditions and enhanced productivity in horticulture, livestock, and fisheries. The industrial sector is expected to expand by 6.2%, supported by growth in construction activities and utilities. The services sector continues to be a significant contributor, maintaining its upward trajectory.

Inflationary pressures have moderated, with retail headline inflation softening to 4.9% during April-December 2024. The Reserve Bank of India anticipates aligning consumer price inflation with the target of around 4% in FY26. Fiscal indicators remain robust, evidenced by an 8.2% growth in capital expenditure between July and November 2024. Additionally, gross FDI inflows increased by 17.9% year-on-year, reaching USD 55.6 billion in the first eight months of FY25. Foreign exchange reserves stood at USD 640.3 billion as of December 2024, sufficient to cover 10.9 months of imports and approximately 90% of external debt.

Looking ahead, Indias economic prospects remain favorable, supported by structural reforms, infrastructure development, and a focus on self-reliance. The governments commitment to enhancing the manufacturing sector and fostering innovation positions the country for sustained growth, with aspirations to ascend to the position of the worlds third-largest economy in the coming years.

(Source - https://www2.deloitte.com/us/en/insights/economy/asia-pacific/india-economic-outlook.html

https\//www.pib.gov.in/PressReleasePage.aspx?PRID=2113316

https\//www.ey.com/en_in/services/tax/india-eccnomic-pulse)

FOOD PROCESSING INDUSTRY

The food processing industry in India has witnessed rapid growth in the recent past, with the sector emerging as one of the most promising industries driving the economic growth of the country. The food processing industry in India reached a value of US$ 336.4 billion in 2023 and is expected to reach US$ 735.5 billion, at a CAGR of 8.8% during 2023-2032, Backed by changes in consumer lifestyle and preference, the demand for processed food has increased in the Indian market. These factors coupled with an increasing urban population and busy work schedules promote the consumption of RTE (ready-to-eat) meals and packaged foods. The Government of Indias efforts to unclog regulatory bottlenecks toward ensuring ease of doing business have also encouraged an increasing number of new players into the mar ket. This also gives the country a great opportunity to export food items. However, food processing products currently constitute only 16% of Indias Agri-exports-the comparative figures for the US and China are 25% and 49%, respectively. This gap offers a tremendous chance for development, notably in processed fruits and vegetables and dairy sectors.

Fruits Pulp

The global fruit pulp industry has witnessed steady growth in the recent years. It will grow from $1.47 billion in2024 to $1.53 billion in 2025 at a compound annual growth rate (CAGR) of 3.5%. The fruit pulp market size is expected to see steady growth in the next few years. It will grow to $1.82 billion in 2029 at a compound annual growth rate (CAGR) of 4.5%. The increasing demand for pulp-based food products is expected to drive the growth of the fruit pulp market going forward. Pulp-based food products refer to processed food items in which fruit

or vegetable pulp is incorporated to enhance the natural flavour and taste of desired fruit and vegetable. In pulp-based food products, fruit pulp is utilized in the production of goods including jams, marmalades, jellies, candies, beverages, and flavourings that contain fruit.

India is emerging as a prominent market for fruit and vegetable pulps, with the industry forecasted to increase by 203 billion at a CAGR of 9% between 2024 and 2029. The fruit pulp market is experiencing significant growth due to several key trends. Firstly, the increasing urbanization and changing consumer lifestyle preferences towards healthier food options are driving market demand. Fruit pulp is used in a variety of applications, from beverages and cocktails to desserts and baked goods. Consumers are increasingly seeking out fruit pulp products for their health benefits, including calcium, zinc, and stress release, as well as immune system support, osteoporosis prevention, and hypertension reduction. As a result, fruit pulp is becoming an essential ingredient in many food and beverage offerings. Overall, the fruit pulp market is poised for continued growth, driven by consumer lifestyle trends and the health benefits associated with processed fruits.

Some of the key factors fuelling the consumption of fruit and vegetable pulp globally includes: a widening application in food products, rising private label offerings, investments in pulp processing technology, and capacity expansions by leading players. Developed regions like North America and Europe are mature markets. The Asia-Pacific region and Latin America offer strong growth potential owing to rapid urbanisation, rising incomes, and an increasing middleclass population. Overall, the fruit and vegetable pulp sector is poised for a prosperous future globally backed by a strong health and wellness trend.

(Source: https://www.thebusinessresearchcompany.com/report/fruit-pulp-global-market-report

https://www.technavio.com/report/fruit-pulp-market-industry-in-india-analysis)

Jellies and Gummies

The global jellies & gummies market size was valued at USD 38.18 billion in 2024 and is projected to reach USD 47.65 billion by 2030, growing at a CAGR of 3.8% from 2025 to 2030. The market growth is attributable to the increasing consumer demand for convenience foods. With hectic schedules and busy lifestyles, consumers have increasingly sought quick and easy snack options, including jellies and gummies. These products are convenient and come in a wide range of flavors and forms that appeal to a broader range of consumers. Health consciousness among consumers is another major factor propelling the market.

The market growth is attributed to growing vegan population, booming candy industry, rising awareness regarding the side effects of chocolate consumption, and increasing consumer spending. Jellies and gummies have been gaining an increasing traction among the consumers on account of their frequent purchases and growing consumption of candies over chocolate. Factors impacting the purchase decision of consumers include unique flavors, textures, candies design, shape, packaging, and sugar content. Snacking, personal rewards on-the-go, occasions, and holidays are the major reasons for the consumption of jellies and gummies. Candies are mostly popular among kids and they are the major target consumers for the candy makers.

(Source: https://www.grandviewresearch.com/industry-analysis/iellies-gummies-market)

Organic Food and Beverages

The global organic food and beverage market is projected to grow from USD 314.1 million in 2025 to USD 1,066.4 million by 2035, registering a CAGR of 13%. The market expansion is being driven by rising health awareness, clean-label trends, and growing concerns over synthetic additives in food. Consumers are increasingly shifting toward chemical-free, non-GMO, and sustainably produced food and beverage options. Innovations in organic product formulations, eco-friendly packaging, and enhanced e-commerce access across urban and semi-urban regions further accelerate the demand.

(Source: https://www.futuremarketinsights.com/reports/organic-food-and-beverages-market)

Nutraceutical products

The global nutraceuticals market size was estimated at USD 591.1 billion in 2024 and is projected to reach USD 919.1 billion by 2030, growing at a CAGR of 7.6% from 2025 to 2030. The aging global population, particularly in developed nations, is actively seeking solutions to maintain health and manage age-related conditions, leading to a surge in demand for supplements targeting joint health, cognitive function, and cardiovascular wellness. Simultaneously, rising rates of chronic diseases like obesity and diabetes are prompting individuals to adopt healthier lifestyles, including incorporating nutraceuticals into their daily routines. This proactive approach to health management is a key trend powering the industry forward.

Consumers are increasingly scrutinizing ingredient lists, seeking clean labels, and opting for plant-based options. This aversion to synthetic ingredients and a desire for transparency is driving demand for nutraceuticals derived from natural sources, such as fruits, vegetables, herbs, and botanicals. Innovations in extraction and processing technologies are also playing a crucial role, enabling manufacturers to create more potent and bioavailable formulations from these natural ingredients. This trend extends beyond just ingredient sourcing and encompasses ethical and sustainable production practices, further shaping consumer choices.

The increasing understanding of personalized nutrition and the role of gut health are also significant demand drivers. Consumers are moving away from a one-size-fits-all approach and are exploring nutraceuticals tailored to their individual needs based on factors like genetics, lifestyle, and health goals. The growing body of research highlighting the gut microbiomes influence on overall health has fueled demand for probiotics, prebiotics, and other gut-health-focused supplements.

(Source: https://www.grandviewresearch.com/industry-analysis/nutraceuticals-market)

GOVERNMENT INITIATIVES

• Providing financial assistance and fiscal incentives to develop common supply chain infrastructure including cold storage, packaging, logistics etc. to lower investment costs, increase viability, and ensure regulatory compliance.

• PLI schemes to support the creation of infrastructure to encourage manufacturing champions based out of India.

• The Mega Food Park Scheme would create integrated infrastructure for storing and processing requirements of the food processing industry.

• The PM Formalisation of Micro Food Processing Enterprises scheme helps the small micro-units engaged in the food processing industry by providing a subsidy of 35% on project costs, up to a maximum of Rs. 10 lakh (US$ 11,980) per the Ministry of Food Processing Industries.

• The government of India has liberalized the FDI norms to allow as high as 100% FDI in food products e-commerce through an automatic route issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.

• Promoting processing clusters and strong linkages from farm to retail through measures like setting up Mega Food Parks with appropriate incentives.

• Supporting the creation of services for R&D, testing, quality improvement, marketing etc., to enhance innovation, competitiveness, and eco-friendly packaging.

• Assisting new and existing micro food enterprises through capital investment support along with strengthening linkages, common facilities, training etc., through the Pradhan Mantri Formalisation of Micro food Processing Enterprises (PMFME) scheme.

• Supporting the setting up of new micro units and upgrading existing micro food processing units, through the PMFME scheme.

BUSINESS OVERVIEW OF TAPI

Tapi Fruit Processing Limited is thriving in the highly favorable business environment for the Indian food processing industry, capitalising on the increasing demand for processed fruits and vegetables. The company have a successful track record of over two decades in the Indian food industry which has enabled them to develop an effective business model with stringent control over processes, including raw ingredient procurement, manufacturing operations, inventory management across their large range of products and SKUs, management of distribution logistics across India, as well as managing deemed export sales.

Tapi Fruit Processing Limited unwavering commitment to sustainability and ethical manufacturing practices, differentiates it from the commoditised nature of this industry enabling it to become the preferred supplier to top brands globally. The Company actively embraces renewable energy, water conservation measures, and effective waste management initiatives, demonstrating its dedication to minimising its environmental footprint.

The domestic candied fruits and jelly industry also experienced a year of robust growth. Some factors for this growth include the resurgence of out-of-home channels and pent-up demand driven by consumers returning to socialising along with increased outreach in rural electrification and increase of capacities by large brands.

The Indian beverages industry presents significant growth opportunities in the future, driven by deeper penetration into rura l markets, an expanding demographic profile, and a growing middle-class population. Furthermore, with the growth in per capita income, consumers are willing to spend more on premium and niche products. Urbanisation is also playing a significant role in the growth of the industry, as more people move to urban areas and have greater disposable income.

The Company has implemented several strategic initiatives to enhance its operational excellence.

PRODUCTS AND SERVICES

Products Candied, Crystallized and Glazed Fruit and Vegetable Products ("Candied Fruit")	Description These products are made out of 100% fruits and vegetables cooked in sugar syrup. Our products under this category includes tooty fruity, karonda cherry, amla candy. We sell these products under our brand "Tapi", "MumMum" and "Boleto".
Fruit Bar, Jellies, Fruit Jam & Fruit Leathers ("Fruit Jellies")	A product made out of natural fruit pulps dried and shaped in to roll form or bar forms. Our products under this category includes mango fruit rolls, tamarind bars etc. These are fruit jellies made from sugar, glucose, pectin along with fruit pulps added with flavours and colors. Our products under this category includes jelly balls, fruit bears, fruit jelly pops, Jams, fruit katli and jelly cubes. Fruit Jam made from sugar, glucose, pectin along with fruit pulps added with flavours and colors.
Chutney & Sauces	In this category we sell Ketchup made from tomato paste under our brand "Tapi".
Beverages	Under this category our product includes fruit crush and fruit syrups. Our Company recently reintroduced its fruit syrups under its new packaging, with added fruit content.
Nutraceutical Products	We manufacture herbal base nutraceutical products as gummies, fortified with minerals as a functional food. These products are available as multi vitamin gummies, etc.

RESEARCH AND DEVELOPMENT

Tapi have placed a strong emphasis on developing their in-house R&D abilities, which, has been instrumental in companys growth. Their in-house R&D initiatives have resulted in the expansion of companys product portfolio, maintaining the quality of our products and translating feedback received from customers, dealers and distributors into concrete results.

The research and development activities emphasize designing and developing new products keeping in mind market standards, customer requirements, cost of production and compliance with applicable standardization norms.

OPPORTUNITIES

^ Growing Packaged Food and Beverage Consumption: Large and Expanding Indian Market ^ Rising urbanisation and changing consumption patterns

^ The growing emphasis on health and wellness among consumers has led to an increased demand for organic and plant-based foods.

^ International Market Expansion: Introducing Products to Cater to Indian Diaspora and Ethnic Food Aisles ^ Premium Product Development: Targeting Consumers Seeking High-Quality Offerings ^ Strengthening Supply Chain and Business Practices: Enhancing Operational Efficiency and Cost Reduction

THREATS

^ High Tax Structure

^ Volatility in Commodity and Currency Rates: Led by inflationary pressures and mobility restrictions ^ Broad-Based Cost Pressures: Including commodity prices, input cost inflation, and freight challenges

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE & DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The company is primarily engaged in the business of FMCG product, which constitute a single reportable segment in accordance with Ind AS 108 - "Segment Reporting".

Financial Highlights INR In Hundred

Particulars	Standalone		Consolidated
	F.Y. 2024-25	F.Y. 2023-24	F.Y. 2024-25	F.Y. 2023-24
Revenue from Operations	17,49,760.90	21,01,666.52	20,18,862.53	22,28,526.71
Other Income	9,020.98	25,479.76	9,216.14	25,733.74
Total Income	17,58,781.88	21,27,146.29	20,28,078.67	22,54,260.45
Less: Total Expenses before Depreciation, Finance Cost and Tax	18,26,843.15	20,79,523.47	20,73,944.57	21,97,681.27
Profit before Depreciation, Finance Cost and Tax	(68,061.28)	47,622.81	(45,865.90)	56,579.18
Less: Depreciation	92,815.89	76,774.13	94,949.67	77,359.17
Less: Finance Cost	9,383.15	5,913.85	9,395.10	5,919.65
Profit Before Extraordinary & Exceptional Items and Tax	(1,70,260.31)	(35,065.17)	(1,50,210.67)	(26,699.65)
Less: Extraordinary & Exceptional Items	(14,834.45)	(10,975.26)	(14,834.45)	(10,975.26)
Profit before tax	(1,55,425.86)	(24,089.91)	(1,35,376.22)	(15,724.39)
Less: Current Tax	-	-	5,339.00	1,354.60
Less: Earlier Years Tax	-	-	706.37	-
Less: Deferred tax Liability (Asset)	1,801.78	1,103.38	1,732.02	1,168.54
Profit after Tax	(1,57,227.64)	(25,193.29)	(1,43,153.61)	(18,247.53)

Financial Performance On Standalone Basis

During the year under review, the revenue from operation of the Company was stood at INR 17,49,760.90 Hundred as against that of INR 21,01,666.52 Hundred for previous year. Revenue from operation of the Company was decreased by 16.74% over previous year. The revenue from operations of the Company is decreased due to complete closure of production for more than one month during the year, in order to facilitate the shifting of existing machinery and the installation of new machinery within the facility.

Loss before Tax for the financial year 2024-25 stood at INR 1,55,425.86 Hundred as against Loss before Tax of INR 24,089.91 Hundred making the net loss of INR 1,57,227.64 Hundred for the financial year 2024-25 as against the net loss of INR 25,193.29 Hundred for the financial year 2023-24. Due to increase in raw material prices, other expenses and decrease in revenue from operation, the Company could not generate the requisite profit.

The Board is making its continuous efforts for re-visiting the purchase policy of the Company and increasing the capacity utilization of manufacturing capacity. The company has expanded production capacity and production area for generating more revenue and profit. The Management is also confident that the addition of new automated production and packing machinery would help in achieving a reduction in fixed costs, and that reduced manual intervention in production would lead the Company to generate profit in the coming years. Company has also added New profitable Products as well as expansion in nutraceutical products which will help in generating more revenue and profits.

On Consolidated Basis

The consolidated revenue from operation of the Company for financial year 2024-25 stood at INR 20,18,862.53 Hundred as against that of INR 22,28,526.71 Hundred for previous year. Loss before Tax for the financial year 2024-25 stood at INR 1,35,376.22 Hundred as compared to INR 15,724.39 Hundred for the previous financial year 2023-24. The consolidated net loss of INR 1,43,153.61 Hundred for the financial year 2024-25 as compared to INR 18,247.53 Hundred for the previous financial year 2023-24.

RISK AND CONCERNS

The Company is exposed to various risks and uncertainties which may adversely impact its performance. The Companys future growth prospects and cash flow generation could be materially impacted by any of these risks or opportunities. The major risks as identified by the Company are demand-risks due to any resurgence in the COVID 19 pandemic, currency risk associated with imports, unfair competition, etc. The Company follows the Enterprise Risk Management (ERM) framework to manage and mitigate such risks which is primarily based on the integrated framework for enterprise risk management and internal controls developed by the Company.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS (STANDALONE BASIS)

Particulars	F.Y. 2024-25	F.Y. 2023-24	% Change	Reason
Debtors Turnover	12.74 times	13.10 times	2.75%	-
Inventory Turnover	8.87 times	11.05 times	19.73%	Decrease in Sales
Interest Coverage Ratio	(5.67) Times	9.91 times	(157.25)	Decrease in EBITD
Current Ratio	0.98 times	5.60 times	82.50%	Increase in Current Liabilities
Debt Equity Ratio	0.59: 1.00	0.16: 1.00	268.75%	Increase in Total Debt
Operating Profit Margin (%)	(8.88%)	(1.15%)	674.95%	Decrease in PBT
Net Profit Margin (%)	(8.99%)	(1.20%)	649.60%	Decrease in Net Profit
Return on Net Worth	(13.97%)	(2.77%)	404.44%	Decrease in Net Profit after Tax

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS (CONSOLIDATED BASIS)

Particulars	F.Y. 2024-25	F.Y. 2023-24	% Change	Reason
Debtors Turnover	14.44 times	13.87 times	4.11%	-
Inventory Turnover	10.17 times	11.66 times	12.78%	Decrease in Sales
Interest Coverage Ratio	(3.30) times	11.41 times	(128.94)%	Decrease in EBITD
Current Ratio	1.03 times	5.05 times	79.60%	Decrease in Current Assets and Increase in Current Liabilities
Debt Equity Ratio	0.58: 1.00	0.16: 1.00	262.50%	Increase in Total Debt
Operating Profit Margin (%)	(6.71%)	(0.71%)	850.34%	Decrease in PBT
Net Profit Margin (%)	(7.09%)	(0.82%)	765.98%	Decrease in Net Profit
Return on Net Worth	(12.55%)	(2.00%)	528.74%	Decrease in Net profit after tax

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Control system and adequacy Internal Control measures and systems are established to ensure the correctness of the transactions and safe guarding of the assets. Thus, internal control is an integral component of risk management. The Internal control checks and internal audit programmes adopted by the Company plays an important role in the risk management feedback loop, in which the information generated in the internal control process is reported back to the Board and Management. The internal control systems are modified continuously to meet the dynamic change. Further the Audit Committee of the Board of Directors reviews the internal audit reports and the adequacy and effectiveness of internal controls.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company believes in establishing and building a strong performance and competency driven culture amongst its employees with greater sense of accountability and responsibility. The Company has taken various steps for strengthening organizational competency through the involvement and development of employees as well as installing effective systems for improving their productivity and accountability at functional levels. The Company acknowledges that its principal asset is its employees. Ongoing in-house and external training is provided to the employees at all levels to update their knowledge and upgrade their skills and abilities. As on M arch 31, 2025, the Company had total 47 full time employees. The industrial relations have remained harmonious throughout the year.

CAUTIONARY NOTE

Statements in this Report, describing the Companys objectives, projections, estimates and expectations may constitute forwa rd looking statements within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be different from those expressed or implied since the Companys operations are affected by many external and internal factors, which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.