UFM Industries Ltd Management Discussions

INDIAN ECONOMY AND INDUSTRY AT A GLANCE

In 2024, the global economy navigated moderate growth amidst persistent inflationary pressures and geopolitical instability. A year marked by significant global elections, the immediate impact of which is evident, while long term effects remain to be seen, added another layer of complexity. Monetary policy, particularly interest rate adjustments in major economies, remained a central focus. Emerging markets exhibited diverse performance, influenced by commodity markets and debt vulnerabilities. Trade tensions and supply chain disruptions continued to strain global commerce and investment, while geopolitical volatility persisted. While, Indias real GDP is projected to grow at 6.5%2 in financial year 2024-25, following a steady recovery to pre-COVID levels. But this growth was slower than expected, it continues to be one of the fastest growing major economies.

Looking ahead, India is expected to maintain its position as one of the fastest-growing major economies. The momentum is anticipated to be driven by sustained government investments in infrastructure, a growing middle class, and increasing digital adoption. The Governments reforms aimed at boosting manufacturing, enhancing productivity and improving ease of doing business will play a crucial role in ensuring long-term sustainable growth. Within this, private consumption will play an important role. The ability to navigate global factors such as geopolitical developments, market sentiment shifts, and currency fluctuations will be crucial for maintaining growth momentum.

PRODUCTION AND COST DEVELOPMENTS

During the year under review, the company has seen improvement in capacity utilization as well reducing cost through better synergy between sales and logistics. Your company has seen considerable increased in its market share in the state of Mizoram. Company has also retained leadership position in the bakery and high quality flour segment in Barak valley. Company is seeing good progress in the supply chain and logistics bringing overall cost effectiveness

OPPORTUNITIES AND THREATS

Driven by the high-value processing of various agricultural products, increased urbanization, rising disposable incomes, the rise of nuclear families, and the demand for convenient food, Indias food processing industry is expected to reach a staggering position. FY 2024-25 was a year of evolving consumer preferences, shifting market dynamics and digital transformation.

The food processing sector in India presents both challenges and opportunities for the country. Some of the key challenges facing the sector include inefficient supply chain management, a lack of adequate infrastructure poor quality control, and limited access to finance, particularly for small and medium enterprises.

OUTLOOK AND RISK

India continues to be one of the fastest growing major economies in the world. The growth prospects for the Indian Industry in FY 2025-26 seem attractive on account of favourable

demographics, rising disposable incomes, increasing rural consumption and government-led initiatives focused on investment and demand. Despite the global economic slowdown primarily due to tariff uncertainties and restrictive trade practices, Indias GDP is expected to grow at around 6.5% thereby offering strong growth prospects for the FMCG sector. However, rising protectionism, global trade disruptions and geopolitical tensions have slowed international economic activity and increased the risk of recession in several economies. These developments may impact India indirectly through inflation, currency fluctuations and global demand pressures. High input prices especially for key commodities like wheat, edible oil, etc. remain a significant concern. Any adverse developments in monsoon or crop yield could intensify inflationary pressures and impact growth especially in rural markets. Additionally, the competitive intensity in both organized and unorganized segments continues to put pressure on pricing and margins.

FORWARD LOOKING AND CAUTIONARY STATEMENT

Statements in this report describing the Companys objectives, expectations, or predictions, may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in Government regulations, tax laws, economic developments within the country and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis, of any subsequent developments, events, or information.