United Foodbrands Ltd Management Discussions

Management Discussion and Analysis

Global Economic Outlook

Global growth remained resilient in 2025, although the operating environment in 2026 continues to be influenced by geopolitical uncertainty, supply chain realignments and inflationary pressures across key markets. According to the International Monetary Funds (IMF) World Economic Outlook, April 2026, global growth is projected at approximately 3.1% in 2026, reflecting moderation from earlier expectations amid rising geopolitical uncertainties. While the economic activity remained relatively resilient through 2025, evolving geopolitical developments and ongoing global uncertainties have introduced supply-side pressures across key commodity and energy markets, contributing to a more cautious macroeconomic environment and elevated inflationary risks.

Growth across economies remains moderate amid a mixed macroeconomic environment. Consumer demand and investment activity continue to support economic resilience in several developed markets, although tighter financial conditions and fiscal pressures may temper growth momentum. At the same time, certain regions continue to face challenges arising from weaker industrial activity and broader macroeconomic uncertainties. Across advanced economies, central banks are expected to maintain a calibrated approach towards monetary policy, balancing inflation management with the need to support economic growth.

Emerging markets and developing economies are expected to continue to contribute to global growth, with Asia remaining a key driver supported by resilient domestic demand and policy-led economic momentum despite external uncertainties. India continues to remain one of the fastest growing major economies, with the International Monetary Fund (IMF) estimating GDP growth at approximately 6.5% in FY26. This growth continues to be supported by robust domestic consumption, sustained public capital expenditure and strong service sector performance. Inflation is expected to remain within the target band of the Reserve Bank of India, supported by a prudent monetary policy. Additionally, favourable demographics, rising urbanisation and digital adoption continue to strengthen Indias medium term growth trajectory.

At a broader level, global economic environment continues to witness evolving trade dynamics, supply chain realignments and changing geopolitical priorities. Recent global developments have reinforced the importance of supply chain resilience and accelerated efforts towards diversification and regional economic partnerships. While these shifts are expected to reshape global trade and investment patterns over the long term, they are also contributing to a more cautious business environment characterised by elevated uncertainty, tighter financial conditions and relatively moderate global trade growth.

Key Markets for United Foodbrands Limited (UFBL)

UFBLs international presence across the Middle East, Malaysia and Sri Lanka, positions the Company across a diverse set of growth markets that continue to benefit from long-term structural consumption trends, while also navigating a dynamic global macroeconomic environment.

Across the Middle East, economic activity is anticipated to remain supported by public investments, diversification initiatives and continued growth in tourism, hospitality and retail sectors. While growth expectations across certain markets have moderated amid evolving geopolitical and macroeconomic conditions, the region continues to demonstrate resilience driven by ongoing economic diversification and infrastructure development initiatives.

The UAE is expected to continue witnessing steady growth, supported by its diversified non-oil economy and strong momentum across tourism, hospitality and trade. Saudi Arabia, the regions largest economy, continues to benefit from large-scale investments and economic transformation initiatives under Vision 2030. Oman is also expected to maintain stable growth supported by public spending and economic diversification efforts, while Bahrain is expected to witness relatively softer near-term economic momentum.

Malaysia is projected to maintain healthy growth supported by resilient domestic demand and continued recovery in services sector. However, like several import-dependent economies, the country remains exposed to external factors such as commodity price volatility and tighter global financial conditions.

The Sri Lankan economy continues to witness gradual economic stabilisation following its recent recovery phase, supported by ongoing reforms and improving macroeconomic indicators. The economy has shown signs of recovery led by tourism, services and policy-led fiscal consolidation measures.

Overall, while near-term global macroeconomic conditions remain volatile, structural growth drivers across UFBLs key international markets remain broadly intact, supported by favourable demographics, rising urbanisation, increasing organised consumption and continued expansion of hospitality and foodservices sectors.

Global Foodservices Industry Overview

The global foodservices industry continues to demonstrate resilient growth, supported by evolving consumer lifestyles, increasing urbanisation, rising disposable income and growing formalisation of dining formats. The industry continues to benefit from structural shifts towards convenience-led consumption, digital ordering ecosystems and growing preference for organised foodservice formats across both developed and emerging markets.

According to I MARC Group, the global foodservices market was valued at approximately US$3.19 trillion in 2025 and is expected to reach approximately US$4.27 trillion by 2034, reflecting a CAGR of around 3%. Asia Pacific accounted for nearly 37% of the global market in 2025, reinforcing its position as the largest and fastest growing regional market.

Market Structure and Regional Dynamics

The industry is predominantly driven by the commercial foodservices segment, including quick service restaurants (QSRs), casual dining restaurants (CDRs), cafes and delivery-led formats, which collectively account for a significant majority of global revenues for foodservices sector. Among these, QSR continues to lead scale and growth, benefittingfrom standardisation, affordability, and compatibility with the digital delivery ecosystem.

At the same time, experiential and premium dining formats continue to witness growing consumer traction, particularly across urban markets, driven by increasing preference for social dining, premium experiences and cuisine-led consumption occasions.

Regionally, Asia Pacific led by India, China and Southeast Asia continues to remain the largest and the fastest growing market supported by favourable demographics, increasing urbanisation, rising disposable incomes and higher penetration of organised dining formats.

Emerging markets across Asia, the Middle East and Africa continue to offer significant long-term growth opportunities, supported by increasing formalisation of foodservices, expanding digital ecosystems and evolving consumption patterns. The continued growth of delivery platforms, cloud kitchens and data-driven customer engagement models is further reshaping the industry and creating opportunities for scalable restaurant businesses.

Growth Drivers and Opportunities

UFBLs portfolio strategy remains well aligned with the structural trends shaping the global and Indian foodservices industry through a balanced mix of experiential dining brands, delivery-led formats and emerging adjacencies.

URBANISATION AND EVOLVING CONSUMER LIFESTYLES

Increasing urbanisation, changing consumer lifestyles and rising preference for convenience-led consumption continue to support growth in organised foodservices. Dining out is increasingly becoming a part of routine social and lifestyle behaviour, supported by growing exposure to diverse cuisines and evolving consumption occasions.

RISING DISPOSABLE INCOMES

Improving income levels and increasing discretionary spending are driving higher consumption across organised dining formats. Consumers are also increasingly seeking differentiated dining experiences, premium offerings and occasion-led consumption, particularly across urban and affluent catchments.

FORMALISATION OF THE FOODSERVICES SECTOR

The continued shift from unorganised to organised foodservice formats is expanding the addressable market for established brands. Factors such as consistency, hygiene, quality assurance and stronger digital integration continue to accelerate consumer preference towards organised players.

DIGITAL ECOSYSTEM AND OMNICHANNEL CONSUMPTION

Rapid adoption of online ordering, digital payments, loyalty programmes and delivery platforms continues to reshape consumption behaviour. The increasing convergence of dine-in, takeaway and delivery channels is enabling foodservice operators to engage consumers across multiple touchpoints while improving scalability and operational efficiency.

GROWTH OPPORTUNITIES ACROSS EMERGING MARKETS

Emerging markets and Tier II cities continue to offer significant long-term growth opportunities, supported by favourable demographics, rising urbanisation and increasing penetration of organised retail and foodservice infrastructure. Growing consumer aspirations and improving accessibility are further expanding the market opportunity beyond large metropolitan centres.

EXPERIENCE-LED AND OCCASION-BASED DINING

Consumers are increasingly gravitating towards experience-led dining formats that combine food, ambience and social engagement. The growing preference for celebration-led dining, group occasions and differentiated culinary experiences continues to create opportunities across casual dining and specialty restaurant segments.

Key Industry Risks and Operating Considerations

INPUT COST VOLATILITY

The foodservices industry continues to witness volatility across key input costs including food commodities, energy, packaging and labour. Fluctuations in raw material prices, supply- side inefficiencies and inflationary trends can potentially impact operating costs and margins across the sector.

EVOLVING REGULATORY AND COMPLIANCE REQUIREMENTS

Increasing focus on food safety standards, labour regulations, sustainability practices and environmental compliances may lead to higher compliance and operational management requirements across the industry.

COMPETITIVE LANDSCAPE

The industry remains highly competitive and fragmented, with the continued expansion of organised chains, regional brands, cloud kitchens and delivery-first operators increasing competitive intensity across formats. This may result in pricing pressures, higher customer acquisition costs and the need for continuous innovation and differentiation.

OPERATIONAL COMPLEXITY

Managing supply chain efficiencies, maintaining quality consistency, ensuring manpower availability and driving operational standardisation across multiple brands and geographies continue to remain important priorities for organised foodservice operators.

DEPENDENCE ON DIGITAL AND DELIVERY ECOSYSTEMS

While digital platforms and aggregators continue to enhance consumer reach and accessibility, increasing dependence on third-party delivery ecosystems may create challenges relating to commission structures, platform visibility, customer ownership and profitability management.

Emerging Trends and Technology Landscape

The global foodservices industry is undergoing a significant transformation driven by digital innovation and changing consumer expectations. Key trends include:

DIGITALISATION AND DELIVERY ECOSYSTEMS

The rapid growth of online aggregators, cloud kitchens and data-driven operations is reshaping business models and expanding addressable market.

CONVENIENCE AND OMNICHANNEL CONSUMPTION

Consumers increasingly expect seamless integration across dine-in, takeaway and delivery formats.

PREMIUMISATION AND EXPERIENCE

Demand for differentiated dining experiences is rising, particularly in urban centres, driving innovation in formats and offering

HEALTH, SUSTAINABILITY AND TRANSPARENCY

There is a growing emphasis on healthier menu options, sustainable sourcing and environmentally responsible packaging.

AUTOMATION AND ANALYTICS

Adoption of artificial intelligence, data analytics and automation is improving operational efficiency, demand forecasting and customer personalisation.

India Foodservices Market

A Large, Underpenetrated Growth Opportunity

Indias foodservices industry continues to demonstrate strong long-term growth potential, supported by favourable demographics, rising disposable incomes, rapid urbanisation and increasing digital adoption. According to the Redseer Strategy Consultants report the market is expected to grow from approximately US$90 billion in 2025 to over US$150 billion by 2030. Despite this growth, penetration remains limited at 13 percent of total food consumption, compared to 58-62 percent in the US and 42-46 percent in China.

The sectors growth continues to be driven by structural factors including increasing discretionary spending, changing consumer lifestyles, rising preference for convenience-led consumption and growing demand for organised and experience-led dining formats. Increasing exposure to global cuisines, premiumisation trends and evolving social consumption habits are also contributing to sustained industry expansion.

Formalisation Reshaping the Industry

One of the defining structural shifts is the rapid formalisation of Indias foodservices market. Consumers are increasingly gravitating towards organised restaurant brands that offer consistent quality, hygiene, food safety, digital convenience and trusted customer experiences.

Indian Cuisine: The Largest Consumption Opportunity

Indian cuisine continues to represent the largest and most diversified consumption pool within the countrys foodservices industry. Indian food spans multiple consumption options including everyday meals, family dining, celebrations, festive gatherings, social occasions, premium dining and food delivery. It encompasses a wide spectrum of formats including North Indian, South Indian, regional cuisines, hyperlocal cuisine, biryanis, kebabs, thalis and street-inspired offerings, giving operators significantly wider consumer relevance than most international cuisine categories. This breadth of demand enables brands to participate across multiple dayparts and customer occasions while maintaining strong repeat consumption.

Formats

As economies evolve, foodservices expenditure tends to increase both in absolute terms and also as share of GDP. India is currently at a relatively early stage of this curve, and is therefore well positioned to witness accelerated growth in foodservices consumption over the next decade.

The industry is also witnessing a shift towards scalable formats, supported by digital integration and omnichannel consumption behaviour.

QSRs and delivery-led formats continue to drive industry growth, while desserts, beverage and specialty formats are emerging as high- growth adjacencies. Traditional dine-in formats are evolving towards integrated dine in plus delivery models to cater to changing consumer preferences.

Industry growth continues to be supported by favourable developments across both demand and supply-side ecosystems. The rise in disposable incomes, urbanisation led socialisation and convenience preferences and exposure to global cuisines is met with infrastructure adoption in malls, office and retail hubs, and expansion of food delivery and payment ecosystem.

In addition, Tier II and emerging cities are increasingly becoming important growth drivers for the industry, supported by rising consumer aspirations, improving infrastructure and increasing penetration of organised retail and foodservice formats. Dining out growth in Indian markets beyond the top eight cities is estimated to be nearly two times that of the top eight cities, highlighting the significant long-term opportunity across emerging urban centres.

Dining Trends

Experience-led dining formats continue to benefit from evolving consumer preference for social, occasion-based and premium dining experiences, particularly across urban centres and emerging affluent markets. Dining out is increasingly becoming an integral part of lifestyle-led consumption, supported by rising discretionary spending, changing social habits and increasing preference for organised and differentiated dining formats.

INCREASING DINING-OUT AND CONVENIENCE-LED CONSUMPTION

Dining out frequency continues to increase, supported by long working hours, increasing disposable income, commuting times and nuclear families. Eating out is increasingly transitioning from an occasional activity to a more regular social and lifestyle-driven behaviour. Consumption occasions are also expanding beyond traditional meal occasions, supported by food delivery platforms and round-the-clock service availability.

EXPANDING PALATES AND CULINARY EXPLORATIONS

Indian consumers are actively exploring newer cuisines and restaurants while Indian cuisine continues to dominate. This evolution is playing out across two parallel trends. On one hand, there is growing appetite for global cuisines particularly Asian formats like Korean, Japanese and Vietnamese, which are rapidly gaining mainstream acceptance. On the other hand, global beverage trends such as matcha, boba tea and specialty cold beverages are gaining traction, particularly among younger consumers.

GROWTH IN DESSERTS AND INDULGENCE- LED CONSUMPTION

Desserts and indulgence-led categories are witnessing strong growth with increasing premiumisation, celebration-led consumption and evolving consumer preferences towards novelty and experiential offerings. The category also benefits from high-impulse demand and strong compatibility with delivery formats. Consumers are increasingly seeking differentiated products across artisanal desserts, fusion formats and visually distinctive offerings, driving continued innovation across the segment.

TECHNOLOGY TRANSFORMATION

Technology has been a major contributor, reshaping the foodservices industry, fundamentally altering how consumers discover, order, and experience food while enabling operators to scale with greater efficiency and agility. The proliferation of aggregator platforms has expanded the market across physical stores catchments, driving higher order frequency and enabling even small brands to reach national audiences.

At the same time cloud kitchens and multi- brand delivery models are lowering entry barriers and optimising capital deployment, allowing businesses to scale rapidly with asset- light formats.

UNITED FOODBRANDS IS WELL POSITIONED TO CAPTURE THE OPPORTUNITY

Indias rapidly formalising foodservices market increasingly favours operators with diversified brands, scalable operating platforms and the ability to serve consumers across multiple dining occasions and channels. United Foodbrands has built its business around these structural shifts, creating a multi- brand foodservices platform that combines disciplined expansion with a relentless focus on unit economics, operational consistency and long-term customer relationships.

The Company pioneered the over-the-table live grill concept in India and today remains one of the countrys leading organised casual dining operators. As at March 31, 2026, UFBL operated 262 restaurants, comprising 249 restaurants across more than 80 Indian cities and 13 restaurants across the United Arab Emirates, Oman, Malaysia, Bahrain, Sri Lanka and Saudi Arabia, providing a strong platform to participate in the growing demand for organised dining across both domestic and international markets.

Its diversified portfolio enables participation across a wide spectrum of cuisines, price points and consumption occasions. Barbeque Nation, the flagship brand, remains the cornerstone of the portfolio, combining the Companys signature live grill experience with an extensive menu spanning regional Indian specialities, kebabs, biryanis, Asian and international cuisines. Its broad culinary repertoire allows the brand to address multiple dining occasions, ranging from everyday family outings and celebrations to corporate gatherings and festive events, while continually refreshing its offerings through seasonal menus and culinary innovations to enhance guest engagement. Toscano and Salt extend the portfolio into premium casual dining through differentiated Italian and contemporary Indian dining experiences, allowing the Company to benefit from the growing preference for experiential and premium dining.

Beyond restaurants, UFBL has developed a portfolio of delivery-first brands comprising UBQ by Barbeque Nation, Barbeque in a Box and Dum Safar Biryani, enabling participation in the rapidly expanding convenience-led consumption market. These brands leverage the Companys existing culinary expertise, kitchen infrastructure and digital capabilities to improve asset utilisation while serving everyday meals, celebrations and cuisine-specific occasions. The majority investment in Willow Gourmet Private Limited, which manufactures and markets luxury French ice cream under the Omm Norn Nomm brand, further expands the Companys presence into the premium desserts category, a high-growth adjacency that is well aligned with delivery, gifting and celebration-led consumption.

The strength of this platform extends beyond its brand portfolio. UFBL continues to strengthen customer ownership through its expanding digital ecosystem, enhancing engagement, repeat visits and conversion across owned channels. The Companys technology capabilities increasingly enable data-led decision-making across demand forecasting, menu engineering, procurement and restaurant operations, supporting greater operating efficiency and improving store-level profitability as the business scales.

With a diversified portfolio spanning casual dining, premium dining, delivery and desserts, a growing national footprint, disciplined cluster- led expansion strategy and an integrated digital and operational platform, United Foodbrands is well positioned to capitalise on the continued formalisation, premiumisation and omnichannel evolution of Indias foodservices industry.

Business and Financial Performance Review & Outlook

FY26 demonstrated both the near-term cost and the long-term potential of disciplined scaling.

A subdued demand environment affected the first half, while higher investment in marketing, customer acquisition and network expansion weighed on annual profitability. Performance improved decisively in the second half as dine- in demand, transactions and operating leverage recovered across the portfolio. The year therefore ended with a stronger demand base, but also with a clear priority to translate growth into improved margins and returns.

During the year, the Company added 35 new restaurants across formats and geographies, including 14 restaurants in the fourth quarter, taking the consolidated network to 262 restaurants as at March 31, 2026. This represented the highest annual expansion undertaken by the Company in recent years.

Consolidated revenue from operations increased 8.6% to 313,387 million in FY26. Consolidated EBITDA was 32,078 million compared with 32,272 million in FY25, and the Company reported a net loss of 3619 million. The first-half demand slowdown reduced operating leverage, while marketing, customer-acquisition and accelerated expansion investments affected near-term profitability. The improvement in SSSG, guest throughput and restaurant operating profit during the second half provides a stronger base for margin recovery in FY27.

Barbeque Nation India remained the core of the portfolio. Value architecture, culinary innovation and guest-engagement initiatives helped restore footfall and repeat visits. Revenue increased 4.6% to approximately 310,254 million, while pre-lnd AS restaurant operating profit was 31,105 million at a margin of 10.8%, 120 basis points below the previous year. Managements focus is on restoring gross margin and productivity as volumes improve, through mix management, procurement efficiency, menu engineering and restaurant-level cost control.

The international segment grew 28.2% year on year to 31,247 million, supported by healthy same-store sales growth and the ramp-up of new restaurants. A pre-lnd AS restaurant operating margin of 22.2% demonstrated the strength of the format. Further expansion will remain focused on attractive trade areas, local operating capability and disciplined replication of the model.

The Premium CDR portfolio delivered 19.4% revenue growth to 31,909 million, with a pre-lnd AS restaurant operating margin of approximately 13.0%. Twelve restaurants were added during FY26, taking the network from 30 to 42. The opening pace and ramp-up of new restaurants moderated near-term margins, while the performance of mature restaurants continued to validate the underlying unit economics.

The long-term opportunity across organised, experience-led and premium foodservices remains substantial. UFBLs path towards more than 300 restaurants in FY27 will therefore be governed by two measures of progress: the breadth of the platform and the quality of its economics. The Company intends to sustain demand momentum while improving gross margin, restaurant productivity, delivery profitability and capital returns.

Adequacy of Internal Controls

UFBL has established a comprehensive internal control framework across all key business processes to ensure reliability of financial reporting, effective monitoring of operational and strategic objectives, and compliance to applicable policies, procedures, and statutory requirements. The Companys internal audit function, conducted by an independent professional firm, provides the Board of Directors and the Audit Committee with objective assurance regarding adequacy and effectiveness of internal controls and governance processes. During FY26, internal audits were undertaken by Messrs.

Deloitte Touche Tohmatsu India LLP. Any material audit findings and corresponding remedial actions are periodically reviewed by the Audit Committee, with appropriate follow-up mechanisms to ensure timely resolution.

The internal audit framework also includes periodic evaluation and testing of internal financial controls over financial reporting in accordance with the requirements of the Companies Act, 2013. In addition, the Company has implemented an enterprise-wide risk management framework aligned with the Companys strategic direction, to proactively identify, assess, and mitigate key business risks. The Risk Management Committee, constituted by the Board, oversees the Companys risk management framework and supports integration of risk management practices across the organisation. This approach strengthens governance standards, promotes a risk-aware culture and enables the Company to effectively manage strategic, operational, financial and compliance-related risks in line with its longterm business objectives and risk management philosophy.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company regards its people as central to its performance and long-term growth.

The Company continued to invest in training, capability building and leadership development, across restaurants, central kitchens and support functions, while strengthening a culture of ownership and service-led guest experience.

A significant development during FY26 was the implementation of the four Labour Codes (i.e., the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 - consolidating 29 existing labour laws) with effect from November 21, 2025. The Company undertook necessary measures to align its HR policies, employment practices and compliance processes with the revised labour law framework.

Employee relations remained cordial across all locations during the year, with no material industrial-relations issues, work stoppages or labour disputes. As at March 31, 2026, the Company employed 8,679 people.

BUSINESS & FINANCIAL RATIOS (on Standalone basis)

Particulars	FY26	FY25	% Change	Reason for Variance
Current Ratio	0.41	0.46	(10.46%)	-
Debt - Equity Ratio	2.06	1.64	25.77%	Refer note below
Interest Coverage Ratio	2.34	2.82	(17.17%)	-
Return on Equity Ratio	(0.16)	(0.09)	77.32%	Refer note below
Trade Receivable Turnover Ratio	191.16	176.50	8.31%	-
Inventory Turnover Ratio	9.81	9.14	7.31%	-
Operating Profit Margin (%)	0.21%	3.13%	(93.28%)	Refer note below
Net Profit Margin (%)	(5.71%)	(3.60%)	58.77%	Refer note below

Note:

Change is primarily on account of increase in losses during the year.

Cautionary Statement

This Management Discussion and Analysis contains forward-looking statements relating to the Companys business operations, performance, and outlook. These statements are based on current expectations and assumptions and are subject to a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated. Readers are advised to exercise caution and not place undue reliance on these forward- looking statements.