Tinna Trade Ltd Management Discussions

Global economic review

The global economy moderated slightly in 2024, with growth easing from 3.3% in 2023 to 3.2% in 2024. The slowdown was led by weaker manufacturing activity in Europe and Asia, supply chain disruptions, and soft consumer sentiment. The services sector, however, remained resilient, cushioning the impact.

Growth in advanced economies was steady at 1.7%, while emerging and developing economies slowed to 4.2% from 4.4% in 2023. Notably, global inflation declined from 6.1% in 2023 to 4.5% in 2024, and is projected to further ease to 3.5% in 2025 and 3.2% in 2026, supported by stable monetary policies and improved labor supply.

Regional growth (%)	2024	2023
World output	3.2	3.3
Advanced economies	1.7	1.7
Emerging and developing economies	4.2	4.4

Key developments and risks

In 2025, the return of Donald Trump as U.S. President brought renewed trade uncertainty, with tariff threats and reciprocal measures by major economies creating volatility in global markets.

Other risks include geopolitical tensions, climate-related challenges, and fragile manufacturing activity, all of which could weigh on medium-term growth prospects.

Outlook

The World Bank projects global growth at 2.7% in 2025 and 2026, reflecting trade frictions and macroeconomic risks. While headwinds persist, ongoing recovery in services and improving supply chain resilience may support stability.

(Sources: IMF, United Nations, World Bank)

Indian economic review

The Indian economy grew by 6.5% in FY2024-25, compared to a revised 9.2% in FY2023-24, marking a four-year low.

The moderation was led by weaker manufacturing growth and lower net investments. Despite this slowdown, India retained its position as the worlds fifth- largest economy.

Indias nominal GDP stood at H330.68 trillion in FY2024-25 (FY2023-24: H301.23 trillion). Per capita income improved from H2,15,936 in FY2023-24 to H2,35,108 in FY2024-25, reflecting continued economic expansion.

The Indian rupee depreciated 2.12% against the US dollar, closing at H85.47 by FY2024-25 end. However, in March 2025, it witnessed its strongest monthly appreciation since 2018 due to a weaker dollar.

Inflation and external sector

Inflationary pressures eased, with CPI inflation averaging 4.63%, the lowest since the pandemic, supported by moderating food prices and stable commodities. Forex reserves reached a record US$ 676 billion (April 2025), reinforcing external stability.

FDI inflows rose 13.6% to US$ 81 billion, the fastest expansion since 2019-20, despite a contraction in Q4 due to U.S. policy uncertainty. Exports of goods and services grew to US$ 824.9 billion (FY2024-25) from US$ 778 billion in FY2023-24, while merchandise exports rose 6% YoY.

Fiscal and financial sector performance

GST collections: Net GST rose 8.6% YoY to H19.56 lakhs crore, while gross collections stood at H22.08 lakhs crore (+9.4%).

Banking sector: NPAs declined to 2.6% (Sep 2024), while CRAR remained strong at 16.7%, reflecting robust capital buffers.

Capital markets: NIFTY 50 rose 5.3%, SENSEX 7.5%, marking their weakest gains in two years. Gold surged 37.7%, highlighting global uncertainty.

Mutual funds: AUM expanded 23% YoY to H65.7 lakhs crore, with SIP contributions rising 45% to H24,113 crore/month.

FPIs: Net inflows touched US$ 20 billion, though the last quarter saw selling pressure amid U.S. tariff announcements.

Sectoral performance

Agriculture: Grew 4.6% (FY2023-24: 1.4%), aided by favourable conditions.

Manufacturing: Growth slowed sharply to 4.5% (FY2023-24: 12.3%).

Industry: Overall industrial GVA expanded 6.5%, driven by construction (+9.4%) and utilities (+6.0%).

Services: Expanded 8.9%, led by public administration and trade-related services.

From a demand perspective, PFCE grew 7.2% (FY2023-24: 5.6%), while GFCE slowed to 3.8% (FY2023-24: 8.1%).

Growth of the Indian economy

	FY22	FY23	FY24	FY25
Real GDP growth (%)	8.7	7.2	9.2	6.5

(Source: MoSPI, Financial Express)

Growth of the Indian economy quarter by quarter, FY2024-25

	Q1 FY25	Q2 FY25	Q3 FY25	Q4 FY25
Real GDP growth (%)	6.5	5.6	6.2	7.4

(Source: The Hindu, National Statistics Office)

Outlook

India remains one of the fastest-growing major economies, underpinned by resilient consumption, infrastructure spending, strong forex reserves, and rising FDI inflows. However, growth prospects face challenges from global trade uncertainties, volatile capital flows, and manufacturing headwinds.

Global wine industry overview

Wine is one of the worlds oldest and most celebrated beverages, valued for its diversity, complexity, and cultural significance. Produced primarily from fermented grapes, its character is shaped b factors such as grape variety, soil, climate, and wine making techniques. The major styles include red, white, rose, sparkling, fortified, and dessert wines, each offering distinctive aromas and flavours. Beyond consumption, wine is associated with heritage, gastronomy, and social occasions, making it a unique blend of craftsmanship, tradition, and shared experience.

The global wine industry is a vibrant and evolving market, balancing tradition with innovation and catering to diverse consumer preferences across established and emerging regions. While Europe continues to dominate with its heritage and regulated appellation systems, new growth is emerging from markets such as the United States, Australia, Chile, India, and China.

Market growth is being shaped by premiumisation, demand for distinctive varietals and authentic provenance, and sustainable production practices. Additional momentum is provided by wine tourism, e-commerce accessibility, and collaborations among leading producers. The perception of wine as a lifestyle product with certain health benefits, combined with shifting consumer habits, is boosting demand.

The industry is positioned for long-term expansion, projected to grow from USD 508.1 billion in 2024 to USD 793.9 billion by 2033, at a CAGR of 4.83% (2025-2033).

Demand drivers

Health and wellness: Rising awareness of health benefits supports wine consumption in general when compared with alcohol or spirits.

Premiumisation: Consumers are increasingly shifting towards higher-quality and luxury wines, reflecting a growing sophistication and willingness to spend.

Evolving consumption patterns:

Millennials and Gen Z are integrating wine into modern social and dining culture, driving the demand for new formats such as canned wines and RTD cocktails.

Sustainability and organic trends: Strong consumer preference for environment- friendly and ethically produced wines is accelerating the adoption of organic and biodynamic wine making practices.

(Source: IMARC)

Indian wine industry overview

The Indian wine market continues to evolve as a vibrant segment within the countrys alcoholic beverage industry, supported by rising urbanisation, changing lifestyles, and exposure to global dining cultures. Although wine represents a small share of Indias alcohol consumption, demand is rising among younger, urban consumers who associate it with sophistication, wellness, and social occasions.

Despite FY2024-25 being a challenging year marked by macro-economy factor. Domestic wineries expanded their portfolios with premium varietals and gained visibility through modern retail, e-commerce, and hospitality channels. Wine tourism, tasting sessions, and vineyard experiences deepened consumer engagement.

In 2024, the Indian wine market was valued at USD ~ 200 million and is projected to reach USD 700 million by 2033, at a CAGR of 16.3% (2025-2033)

Key demand drivers

Rising disposable incomes and lifestyle shifts: Expanding middle class and younger demographics increasingly view wine as an aspirational choice.

Wine tourism and local vineyards:

Maharashtra and Karnataka remain leading hubs, with wineries and promoting a wine culture through curated experiences.

Hospitality and e-commerce: Hotels, fine- dining, and digital platforms continue to expand market accessibility.

Urbanization and demographics: A growing urban population and a 950 million workforce-aged base by 2030 provide longterm consumption tailwinds.

Government initiatives: Favorable wine policies in Maharashtra and Karnataka and Made in UP initiatives have strengthened domestic production and branding.

Opportunities

- Rising demand for premium and luxury wines.

- Expansion of wine tourism and experiential marketing.

- Growth in modern retail, institutional outlets and online sales.

- Increasing preference for organic and sustainable wines.

Challenges

- Free trade agreement on imported wines.

- Regulatory complexity due to State-wise registrations.

- Competition from other Alco Bev players with larger marketing budgets.

- Advertising restrictions limiting brand visibility.

- Climate change risks impacting viticulture and grape quality.

Outlook

The outlook for the Indian wine industry remains positive. Despite the headwinds in FY2024-25, growth will be underpinned by premiumisation, urbanization, tourism, and supportive policies. The company is positioned to capitalize on these trends through its strong portfolio, distribution network, and vineyard experiences. Continued focus on innovation, sustainability, and consumer engagement will be critical in navigating regulatory and environmental challenges while securing long-term growth in the domestic and global markets.

Company overview

Fratelli Vineyards Limited is a leading Indian winemaker with a complete ownership of the grape-to-bottle value chain, supported by one of the countrys largest vineyard acreages under active farming and supported by long-term contract farmers. The company offers a diversified portfolio across the luxury, super premium, premium, and value categories, along with innovative formats that cater to evolving consumer preferences. The company is planning a first-of-its-kind luxury wine tourism resort in India at Akluj set amidst a 170-acre vineyard estate. With a distribution footprint extending to over 29 States and Union Territories, Fratelli continues to strengthen its market presence while focusing on premiumisation, operational excellence, and environmentally responsible practices.

Financial analysis of our wine business, FY2024-25 Balance Sheet

- Borrowings for FY2024-25 stood at H95.39 crores compared to H84.72 crores during FY2023-24.

- Total Non-Current Assets for FY2024-25 stood at H116.96 crore compared to H79.83 crore in FY2023-24.

- Net worth stood at H140.64 crores as on March 31, 2025 compared to H96.39 crores as on March 31, 2024, an increase of 45.91%.

- Total assets increased by 17.13% to H311.26 crore as on March 31, 2025 from H265.74 crores as on March 31, 2024.

- Inventories increased by 25.69% to H82.50 crores as on March 31, 2025 from H65.64 crores as on March 31, 2024.

Profit and loss statement

- Revenues decreased by 15.61% from H215.56 crores in FY2023-24 to H181.92 crores in FY2024-25.

- EBITDA stood at H0.23 crore in FY 202425 compared to H28.64 crore in FY 2023-24, primarily reflecting the Companys strategic investments and business initiatives undertaken during the year to drive sustainable long-term growth.

- Profit after tax decreased from H9.30 crores in FY2023-24 to H(12.83) crores in FY2024-25.

- Depreciation and amortization stood at H7.24 crores in FY2024-25 compared to H6.49 crores in FY2023-24.

Key ratios

Particulars	FY25	FY24
EBITDA/Turnover (in %)	0.13	13.29
EBITDA/Net interest (in %)	0.02	3.00
Debt / Equity ratio	0.68	0.88
Return on Equity (in %)	(10.83)	10.71
Book Value per shares (in H)	92.51	74.37
Earnings per share (in H)	(9.15)	7.61

Fratellis key moats: Excellence in viticulture and terroir to create exceptional wines

m Imported 12 grape varietals from the best regions of France and Italy

These varietals were then grafted on Indian root stock to develop indigenous clones

Excellence in viticulture and terroir to create exceptional wines

These are completely suited to Indian climatic and soil conditions to generate superior quality wines

Can be used to produce exquisite wines that cannot be replicated over the next several years

Commanding a third of the market share in a country where entry barrier of time is a strong moat
400 acres under active farming	1,000 acres supported by long term contract farmers	12 varietals imported from France	15 years of agronomical experience	Virgin, high minerality soil allows concentrated taste & flavour	13-30?c temperature perfect for cultivation of grapes

 

Fratellis collection of proprietary clones helps produce a unique portfolio of wines
- Chardonnay	- Cabernet Franc	- Petit Verdot
- Cabernet Sauvignon	- Mercolan	- Merlot
- Chenin Blanc	- Muller Thurgau	- Sangiovese Grosso
- Shiraz	- Gewurztraminer	- Sauvignon Blanc

Vast lead in business size over the next in line. Positioned to grow significantly, backed by a unique business approach

Risk management

Seasonal and climatic dependence on grape harvests	Regulatory changes in excise duties and state alcohol policies	Market concentration in the premium segments
Mitigation	Mitigation	Mitigation
Diversifying vineyard locations, introducing climate-resilient grape varietals, and investing in advanced irrigation and crop management systems to reduce weather-related yield variability.	Maintaining an active engagement with industry associations, monitoring policy developments across States, and adjusting pricing, product mix, and distribution strategies promptly in response to regulatory shifts.	Expanding product portfolio across different price points and formats to balance revenue streams and tapping into emerging Tier-2 and Tier-3 markets to widen the consumer base.

 

Supply chain disruptions for raw materials and packaging	Brand visibility and competition from domestic and international players	Foreign exchange fluctuations on imported equipment and inputs
Mitigation	Mitigation	Mitigation
Developing long-term contracts with local suppliers, maintaining a buffer inventory for critical inputs, and sourcing a high proportion of packaging materials domestically to reduce a dependence on imports.	Investing consistently in brandbuilding, experiential marketing, and consumer engagement through events, tourism initiatives, and collaborations to strengthen brand equity.	Using forward contracts and natural hedging strategies to minimise currency risk exposure for imported items.

Human resource management

Fratelli recognizes that its people are central to sustaining long-term growth and maintaining leadership in the Indian wine industry. The company fosters a culture of collaboration, skill development, and accountability to meet evolving business demands. As of FY2024-25, the workforce stood at 465 permanent employees across vineyards, production, quality, sales, marketing, and support functions. Training programs focused on viticulture, wine making, customer engagement, and leadership development. Employee wellbeing, diversity, and inclusion remained priorities, with structured initiatives to enhance workplace culture and retention. By aligning human capital strategies with business objectives, Fratelli ensures an agile and motivated workforce committed to excellence.

Internal control systems and their adequacy

The internal control systems are designed to ensure the orderly and efficient conduct of operations, safeguard of assets, accuracy and completeness of accounting records, and timely preparation of reliable financial information. These controls are aligned with the size and nature of the companys operations and are periodically reviewed for adequacy and effectiveness. Robust mechanisms are in place for risk assessment, compliance monitoring, and internal audits, supported by technology driven solutions that enhance transparency and operational oversight. Regular reviews by the Audit Committee and senior management facilitate the identification of process improvements and ensure that controls remain responsive to evolving business needs and applicable regulatory requirements.

Cautionary statement

This statement made in this section describes the companys objectives, projections, expectation and estimations which may be forward-looking statements within the meaning of applicable securities laws and regulations.