Tasty Bite Eatables Ltd Management Discussions

Economic Overview

Global Economy 1

CY 2024 demonstrated the strength and adaptability of the global economy. The global economy achieved an estimated 3.3% growth rate despite economic hurdles such as supply chain disruptions, shifting trade policies, geopolitical uncertainties and inflationary pressures. The US economy exhibited notable growth facilitated by strong economic fundamentals, high employability and significant gains in technology stocks and robust corporate earnings. The Eurozone faced difficulties in the manufacturing sector, especially in Germany. Growth in China was subdued as it faced challenges in its real-estate sector and reduced consumer confidence and spending. Emerging markets and developing economies outperformed advanced economies, recording a growth rate of 4.3% compared to 1.8% in advanced economies. A major driver of this stability was strong consumer demand, supported by a decline in inflation from 6.7% in CY 2023 to 5.7 in CY 20242, alongside proactive monetary policies and liquidity measures. Expanding energy supplies further helped control production costs, keeping consumer prices in check and sustaining spending momentum.

Global GDP is projected to grow at 2.8% in CY 2025 and 3.0% in CY 2026. With easing inflation augmenting household purchasing power but the recent uncertainty around the reciprocal tariffs imposed by the US on its import is disrupting global trade which can lead to increased costs, supply chain uncertainties and heightened recession risks. In response businesses all around the world are delaying investments and restructuring operations. To stabilise the impact of the tariffs, leaders around the world are undertaking diplomatic and economic steps through dialogue, trade alliances and strategic negotiations to ease rising tariff tensions and stabilise global trade.

The global inflation is expected to decline to 4.3% in CY 2025 and 3.6% by CY 2026, enabling continued growth in consumer-driven sectors. However, the implementation of new tariff laws by the US will continue to pose threats to the global trade landscape. Emerging markets, driven by rising incomes and expanding middle classes, are expected to maintain resilience and clock in a 3.7% growth rate, while advanced economies are projected to grow at 1.4% in CY 2025. Although geopolitical uncertainties remain, fiscal discipline, strategic government investments and resilient consumer spending are likely to support stable global economic growth.

Indian Economy3

India recorded an estimated 6.5% GDP growth rate in FY 2025, solidifying its position as one of the fastest-growing major economies. Growth was driven by rising consumption, supported by government infrastructure initiatives, structural reforms and a flourishing digital economy. Key sectors such as manufacturing, agriculture and services saw significant advancements, encouraging both rural and urban spending. Inflation eased from 5.4% in FY 20244 to 3.6% in FY 2025, bolstering consumer confidenceandleadingtoincreasedretailanddiscretionary purchases. The easing inflation has pushed RBI to infuse C1.5 trillion into the banking system to support the

demand for liquidity and propel economic activity.5 Rural demand remained strong, backed by a resilient agricultural sector and supportive welfare programmes, while urban consumption surged, driven by higher disposable incomes and evolving lifestyle aspirations.

With global tariff uncertainties impacting the trade environment, India presents itself as an attractive destination for investment owing to a stable policy framework and favourable business environment. Indias economy is expected to maintain this momentum, with a GDP growth projection of 6.5% in FY 2026 supported by healthy rabi prospects and an expected recovery in industrial activity.6 One of the key drivers of consumption is anticipated to be the Government of Indias income tax reforms, which have exempted individuals earning up to INR 12.75 lakh from income tax.7 This initiative significantly enhances disposable income, especially for middle-class households, thereby encouraging discretionary spending. Furthermore, the Reserve Bank of India (RBI) is likely to take a more accommodative approach to monetary policy, with additional easing expected in FY 2026. With inflation stabilising, government efforts to promote industrial and digital expansion will likely create an environment conducive to spending-led growth. In addition, the government is maintaining a close observation on the global tariff scenario to strategically calibrate its response. Further, the rapid rise in high-net-worth individuals and ultra-high-net-worth individuals signals a shift toward premium consumption, reflecting increasing financial prosperity. As India moves through what many are calling ‘Indias Decade, this consumption-driven growth, combined with innovation and strategic global integration, positions the country for sustained economic prominence.

Global Ready to Eat Food Industry9

The global Ready-To-Eat (RTE) foods market was valued at about USD 404.78 billion in 2024. The market includes products such as ready meals, instant noodles, breakfast cereals, snacks, meat products and bakery items. These foods are popular because they are quick and easy to prepare, which suits busy lifestyles, especially in cities. Europe is currently the largest market, commanding 33.41% of the total share.

The ready-to-eat foods market is expected to grow steadily in the years ahead. It is projected to increase from USD 425.39 billion in 2025 to USD 626.13 billion by 2032, with an average yearly growth rate of 5.68%. This growth will be driven by the rising demand for convenient food, growing urban populations and an increase in the number of working professionals who prefer quick meal options. Improvements in product variety, better packaging and wider availability in stores and online platforms will expedite market expansion.

Indian Ready to Eat Food Industry 11

In 2024, the ready-to-eat meals market in India was worth an estimated USD 5.75 billion. This market is witnessing expedited growth as consumers increasingly prefer quick and easy meals, especially those living in cities and working long hours. An increasing number of consumers are preferring ready to eat meals that are healthy, organic, preservative-free and high in protein. Traditional Indian dishes, international flavours and health-focused meals are all part of this market. Easy-to-find packaging and a wider network of stores offering these meals are augmenting the sales of these items. The Indian Railways are now offering ready-to-eat meals in its flagship Vande Bharat trains which is making these foods even more popular.

By 2033, the Indian ready-to-eat meals market is expected to grow to about USD 11.74 billion. This means it will grow by around 8.26% every year between 2025 and 2033. This notable growth is expected to be propelled by the rising number of people moving to cities, rise in nuclear families and heightened demand for healthy and quick meal options. New food technology, better packaging and more online shopping options will also help the market grow. In the future, as people look for tasty, healthy and easy meal options, ready-to-eat foods in India will become even more popular.

Indian Food Service Industry 13

In FY 2025, the food services market in India is worth around USD 66 billion. This includes everything from eating out in restaurants to ordering food online. The market is growing fast because more people are moving to cities, earning more money and looking for easy and quick ways to eat. Online food delivery is getting more popular too. In 2023, it made up about 12% of the total market and by 2030, it is expected to grow to 20%. This is happening because people have better access to mobile apps and more food choices are available online.

By the year 2030, Indias food services market is expected to grow to USD 108–120 billion. This means it will grow by about 10–12% every year. Right now, there are around 320–340 million people who eat out or order food and this number is expected to grow to 430–450 million by 2030. More people will be eating out or getting food delivered more often. Also, many new food businesses will start up, offering different types of meals to match what people like in different parts of India. The use of mobile apps and online platforms will keep helping the market grow even faster.

Quick Service Restaurant (QSR) Industry14

The Indian Quick-Service Restaurant (QSR) industry, which includes popular fast-food chains like Dominos, KFC, and McDonalds, has been growing steadily. In FY2025, the industry is expected to grow by 10–12%, better than the 9% growth seen in FY2024. This growth is mostly due to more new stores being opened, about 705–715 in FY2024 and FY2025. However, the average daily sales per store dropped to USD 1,012 in FY2025 from USD 1,060 in FY2024 because of lower customer footfalls. Rising food prices and tough competition also caused profits to shrink, with margins falling to around 17.3% from 20% two years ago. Many companies still managed well by using their own profits to open new stores instead of taking large loans, which helped keep debt levels under control.

Looking ahead, the QSR industry in India is expected to grow faster in FY2026, with revenue likely to increase by 16–19%. This growth will be helped by the opening of around 850–870 new stores, better demand from customers, and the success of value-for-money meal options. As peoples incomes go up and more people use food delivery apps, the number of customers is also expected to rise. Profit margins are likely to stay between 17–19% and may improve further as new stores become more profitable. With better planning, more store openings and improved customer spending, the future of the QSR industry in India looks strong and promising.

Indian Cloud Kitchen Industry15

In 2024, the cloud kitchen market in India is worth about USD 1.13 billion. A cloud kitchen is a place where food is made only for delivery, without any dine-in space. These kitchens are growing fast because they are cheaper to run and work well with food delivery apps like Zomato and Swiggy. More people now prefer to order food online because of their busy lives, more income and convenience. Also, after COVID-19, many people got used to ordering food at home, which helped cloud kitchens become even more popular.

By 2030, the Indian cloud kitchen market is expected to grow to USD 2.84 billion. This means it will grow by about 16.66% every year from 2025 to 2030. The growth will come from better technology, more people using mobile apps to order food and the rising demand for easy and different types of food. The northern part of India has the biggest share of the market and mobile app-based food ordering is growing the fastest. But cloud kitchens still need to focus on keeping food quality high, delivering on time and managing costs to stay successful.

Key Growth Drivers

Key Trends

Key Challenges

Company Overview

Tasty Bite Eatables Ltd. (TBEL) was founded in 1985 and is headquartered near Pune, India. It is a leading provider of ready-to-eat Indian and Asian meals, sauces and frozen food products. Known for its commitment to natural, preservative-free foods, TBEL caters to both global retail consumers and foodservice partners, with a strong presence in markets like the US, Canada and the UK. Over the years, the Company has expanded its offerings, launched foodservice operations under Tasty Bite Food Service (TFS) and established the Tasty Bite Research Centre (TBRC). Since being acquired by Mars Food in 2017, TBEL has further strengthened its focus on sustainability, utilising renewable energy, recycling wastewater and responsibly sourcing ingredients from which some are grown on its own farms. The Company is certified by several international quality and safety standards and has won multiple awards for its product excellence and workplace culture. Guided by experienced leadership, TBEL continues to innovate and deliver convenient, high-quality food solutions globally.

• Large scale manufacturing: The Company has invested in modern manufacturing facilities that allowing it to produce high quality products on a large scale.Theirfacilitiesuseavarietyoftechnologieswhich allow them to manufacture a wide range of products.

• Focus on innovation: The Company is constantly innovating and developing new products to meet the changing preferences of the customers. It has a strong R&D team that is passionate about devising new ways to improve their products.

• Special product lines: The Company offers a wide range of products to cater to the specific needs of their customers. They manufacture organic food and all natural food among others aiming to secure a broad customer base while promoting health and well-being.

• Strong financial performance: The Company has a track record of strong financial performance. They have been growing in profits and market share in recent years.

• Product quality: The Company manufactures its products using top quality ingredients and conducts quality checks at every step to uphold the highest standards of quality and safety.

• Strong Supply chain: An efficient supply chain ensures a sustainable food system for the Company facilitating the flow of products from the point of manufacturing to the point of consumption. This process reduces waste, improves efficiency and promotes transparency throughout.

• Strategic Partnerships: The Company partners with the most leading QSRs (Quick Service Restaurants), cloud kitchen chains and HORECA (Hotels, Restaurants and Caterers) players in India as well as around the globe. This establishes a strong market presence for the Company and promotes growth.

Capability Build-up

Tasty Bite is strengthening its capabilities to prepare for future growth and meet changing consumer preferences. The Company is focusing on developing its ability to innovate, produce high-quality food and respond quickly to market demands. This includes adding new product lines, improving packaging and strengthening its operations. Tasty Bite is also growing its reach by launching meal kits designed for busy, health-conscious families in major cities in India, alongside growing its range of sauces and food service products in both the US and other markets. The Company is investing in its production facilities, reducing its capital expenditure while making sure resources are used efficiently and effectively. This lets Tasty Bite maximize its potential and pursue new opportunities without losing financial discipline. At the same time, Tasty Bite is strengthening its relationships with its business-to-business clients and growing its capabilities in the business-to-consumer segment too. All these initiatives enable Tasty Bite to bring convenient, high-quality food to more people and grow its market presence.

Competitive Landscape

Indias food service industry is characterised by rapid evolution and immense potential, offering abundant opportunities for growth, innovation and strategic expansion. Companies that demonstrate agility in adapting to the shifting consumer behaviour and market trends are well-positioned to lead in this dynamic environment. The sectors long-term outlook remains positive owing to favourable demographic shifts, expedited urbanisation and the widespread adoption of digital technologies.

With the maturation of the market, signs of consolidation are becoming more evident. Dominant players are strengthening their presence through aggressive expansion, product diversification and innovation-led strategies. In particular, the Quick Service Restaurant (QSR) segment has shown impressive resilience, maintaining a consistent growth trajectory despite external pressures. Over the past fiscal year, the sector has successfully navigated headwinds, such as increased competition from food delivery platforms, cost inflation and stagnant Same-Store Sales growth (SSSG), reaffirming its ability to adapt and remain competitive.

This evolving landscape calls for a strategic focus on brand differentiation, operational efficiency, digital engagement and customer-centric innovation to stay ahead in a fast-paced market.

Sustainability Commitment

Tasty Bite Eatables Ltd. places sustainability at the core of its operational philosophy, integrating socially responsible practices with environment-conscious processes. The Company is committed to protecting natural ecosystems, conserving energy and reducing reliance on non-renewable resources. Through strategic investments in renewable energy, waste reduction and carbon footprint minimisation, Tasty Bite aims not only to meet regulatory requirements but also to lead by example in sustainable food manufacturing. These efforts reflect the Companys vision of long-term environmental stewardship and its role in contributing to a healthier planet.

Strategic Pillars for Long-Term Growth

Operational Highlights

Financial Highlights

Financial Ratios

Financial Analysis

Despite the challenges faced by the Company in Q1 of FY 25 the company bounce back and recorded a growth of 2.7% over the previous year. The Companys revenues stood at INR 5,730.15 million for the year under review, against INR 5,581.96 million in the previous financial year.

The Companys overall performance for the year remained stable. The Exports-led Consumer Business declined by 2.8% year-on-year, with sales of INR 3827.58 million as against INR 3938.40 million in the previous year. In contrast, the Tasty Bite Food Service (TFS) business grew by 15.6% year-on-year, with sales of INR 1657.79 million, against INR 1434.67 million previously.

Profit after tax for FY 2025 was INR 256.08 million, down from INR 415.17 million in FY 2024, reflecting a decline of 38.32%. Profit after tax as a percentage of revenue stood at 4.5% in FY 2025, against 7.4% in FY 2024.

Supply Chain

Dealing with supply chain problems is a big challenge for manufacturing companies today, especially with global rules changing and trade becoming more uncertain. Global Supply Chains are more interconnected than they were ever in the past, especially with major global conflicts and trade restrictions impacting demand and supply creating both short term and long term mismatches.

One such recent example is the current US tariff uncertainty, which is affecting global trade and making it harder to plan and manage costs. Food regulations are also getting stricter around the world. Tasty Bite is staying ahead by proactively managing food compliances for all its export and domestic markets through a robust integration of sourcing supply chain and preparing early for any change that may impact our customers. The Company works closely with its suppliers, using the Mars Mutuality Principle to create a smart sourcing plan that focuses on whats best for customers.

To help reduce the effects of rising global prices and trade disruptions, Tasty Bite has taken smart steps like improving shipping plans, mixing long-term and short-term contracts, locking in prices for important ingredients and a keen focus on Company wide value leadership initiatives that aim to bring efficiency in product development, sourcing, manufacturing and logistics with an aim to offset any potential inflation impact. This has helped the Company to reduce wastages across supply chain, keep inflation in control and reduce the impact on customers.

Human Resource

Tasty Bite remains steadfast in its commitment to cultivating a workplace that is friendly, fair and high performing, promoting mutual growth for both the Company and its employees. The organizations human capital strategy is focused on deepening employee engagement, strengthening a culture of performance, and building a future-ready enterprise.

To enhance organizational capabilities, Tasty Bite emphasizes agility and the development of leadership at all levels. Its learning and development initiatives are structured to empower employees through targeted skill-building programs, cross-functional exposure, and experiential learning opportunities.

The Companys performance management system is built around the principles of clarity, ownership, and impact.

The adoption of Objectives and Key Results (OKRs) across the organization ensures strong alignment with strategic business priorities. This is further supported by structured goal-setting and timely feedback mechanisms.

Tasty Bites rewards philosophy is grounded in meritocracy. The Company employs a performance-linked compensation model that recognizes individual contributions and drives organizational results. Competitive compensation, comprehensive benefits, and flexible work arrangements underscore Tasty Bites commitment to employee well-being. The Companys wellness programs address physical, emotional, and mental health, embodying a holistic approach to employee care.

Diversity and inclusion are core to Tasty Bites organizational culture. Notably, women comprise approximately 58% of the shop floor workforce which is a testament to the Companys efforts to promote gender diversity. Employee motivation and engagement are further strengthened through ongoing learning sessions, interactive activities, and celebrations designed to foster a sense of belonging and pride.

In terms of engagement and communication, Tasty Bite maintains open lines of dialogue and actively supports employee-led engagement initiatives. Its culture, rooted in trust and transparency, ensures that every individual feels valued, supported and empowered to learn, contribute and grow.

Quality Management

The Companys quality mission, expressed as ‘rise beyond certifications, reflects a commitment to achieving excellence that surpasses standard benchmarks. This philosophy ensures that the Quality Management System is not just a compliance tool, but a driving force behind operational excellence at every level—spanning design, procurement, manufacturing, sales and distribution. The Company is dedicated to producing superior products, maintaining stringent food safety protocols and consistently addressing consumer and customer feedback. It upholds all legal and regulatory standards across its markets, reinforcing its position as a trusted and responsible industry leader.

Certifications Held by the Company

The Company also adheres to the highest levels of compliance with Customs Trade Partnership against Terrorism (CT - PAT) standards, which gives the Company an advantage for smooth exports to US, which is the most important export market for the Company.

Compliance, Finance, Accounts and Internal Financial Controls

The finance and accounting team works closely with all other departments to help grow the Companys value and make sure strong financial and management systems are used every day. The Company takes internal controls and risk management very seriously. It regularly checks these systems to spot and manage any risks in operations. A special management team carefully reviews and handles these risks through stringent processes. Outside auditors, both internal and statutory, also keep an eye on everything. These control systems are well-matched to the Companys type of work and how big and complex it is.

Standard Operating Procedures and Risk Control Matrix for all business processes to ensure effective internal financial control.

Oversight by an Audit Committee carried out by an experienced and qualified firm of Chartered Accountants.

End to end integration of ERP system across supply chain, manufacturing and sales processes.

Review and approval of annual operative and capital expenditure budget and monthly monitoring of actual spend.

Regular review of key business risks such as new product development, foreign exchange management, commodity risk management and financial reporting.

Legal framework with respect to compliances applicable to the Company. The Company has implemented compliance tools in both the factory and the head office.

For overall supervision of controls, the Company has a Management Committee (MCom) to take key business decisions.

The statutory auditors have issued an unmodified audit report The Audit Committee and Independent Directors believe that the internal financial control commensurate with the nature and size of the organisation and complexity of the business.

Cautionary Statement

In accordance with relevant securities laws and regulations, comments in the Management Discussion and Analysis that describe the Companys goals, plans, estimates, or expectations may be deemed to be "forward-looking statements." Actual outcomes could significantly vary from those that were stated or indicated.

Economic conditions affecting supply and demand, price conditions in domestic and international markets where the Company operates, competitive pressures in these markets, changes in governmental regulations, tax laws and other statutes, as well as incidental factors, are significant variables that could have an impact on results.

Appreciation

The Directors of the Company would like to express their sincere gratitude for the co-operation received from banks, government agencies, clients, vendors and suppliers during the year. They also acknowledge the role played by affiliate markets in expanding the Companys presence in foreign markets. Alongside, they appreciate the constant patronage received from diverse stakeholders and all parties involved in the Companys operation.