Vadilal Industries Ltd Management Discussions

(1) INDUSTRY STRUCTURE & DEVELOPMENT AND OUTLOOK.

a) Ice Cream Division Overview

India is the largest producer and consumer market of milk globally, accounting for more than one-fifth of global milk production. This abundant supply of raw material provides a strong backbone to the ice cream industry, enabling both mass and niche production. India is the largest producer and marketer of milk. Over recent years, Indias ice cream market has experienced rapid expansion, reflecting broader economic growth trends, growing at a robust compound annual growth rate (CAGR) of approximately 14.79 % from 2024-2031.

Indias ice cream market has made a strong recovery following the COVID-19 era, which had temporarily dampened demand. Post-pandemic, the market has seen a resurgence with annual growth rates stabilizing between 12-14%. Contributing factors include improved cold-chain infrastructure, higher urban and semi-urban demand, and evolving consumer preferences. Notably, consumer tastes have shifted toward higher-MRP offerings and products that emphasize innovation and experiential value, ranging from novel formats and flavors to premium collaborations. The presence of national, regional, and local players has intensified competition and diversified offerings, from traditional kulfis and cones to health-oriented and gourmet options. Quick-commerce platforms like Blinkit, Zepto, and Big Basket have further enhanced market access, delivering ice cream round-the-clock, even in smaller towns.

Organized players now account for nearly 50% of the Indian ice cream market, while the unorganized sector, largely composed of local vendors and small brands, continues to hold a strong rural and traditional market share. Indias growing middle class, rising disposable incomes, and aspirational youth segment are driving demand for more premium and differentiated offerings, including sugar-free, vegan, protein-rich, and exotic-flavoured ice creams. In 2024 alone, investments worth over USD 25 million flowed into emerging and niche ice cream start-ups, signalling confidence in longterm growth potential.

One of the most telling indicators of the sectors growth is the significant rise in per capita ice cream consumption in India. From just 200 ml annually five years ago, the average has surged to nearly 1600 ml in 2024 - 2025. While this figure remains modest compared to Western markets, such as the U.S. (20,000 ml) and New Zealand (28,000 ml) it underscores the considerable headroom for future expansion. This gap reflects both the untapped market potential in rural India and opportunities to cater to evolving urban taste profiles. Furthermore, consumption is steadily rising across Tier 3 and Tier 4 towns, driven by increasing income levels and shifting lifestyle aspirations, indicating broader demographic traction and deeper market penetration beyond traditional urban centers.

In conclusion, the Indian ice cream market is at a pivotal point of growth and transformation. With rising health consciousness, the adoption of international trends, and expanding retail infrastructure, the market is well-positioned to scale high. Given the relatively low per capita consumption, high milk availability, and a wide mix of traditional and contemporary consumer bases, the industry holds immense potential for further innovation and penetration across both mass and premium segments.

Developments

Growth in Quality and Quantity

Strengthening Our Market Presence through Innovation and Expansion

Vadilal is on an ambitious path to fortify its position in the Indian ice cream industry by introducing mega brands, installing next-generation machinery, and significantly expanding its manufacturing capabilities. A core part of our strategy lies in optimizing resource and raw material usage, a move that has significantly contributed to our accelerated growth.

In response to the rising demand for premium and clean-label ice creams in India, Vadilal has consistently expanded and strengthened its premium product portfolio over the past few years. Offerings such as natural tubs, cups, kulfies, premium bars, cones, ice cream sandwiches, artisan cakes, and other innovative formats have resonated strongly with healthconscious, discerning consumers — reinforcing Vadilals position as a trusted innovator in the premium segment.

Continuing its legacy of introducing novelty and delight to its product line-up, Vadilal made several exciting additions in FY 2024-25. These innovations have helped the brand deepen its footprint across retail channels while further cementing its connection with evolving consumer tastes. Signature premium lines — including Gourmet Naturals, Gourmet, Badabite, Flingo, Jumbo Cups, Ice Cream Cakes, Novelties, and Ice Trooper — maintained robust sales momentum. Complementing these, the year also saw the launch of indulgent new treats such as Vadilal Frootful Lagoon Slush, Jumbo Raspberry Dolly, Falala Very Berry Ice Candy, and Badabite Crunchy Choco Vanilla, expanding the portfolio with fresh and exciting formats.

Vadilal has also explored and revamped the packaging of its Buy One Get One party packs, Dolly ice cream, Frootful category making them more visually appealing and impactful on the shelf. These initiatives have helped Vadilal carve a distinctive niche in both retail trade and the minds of consumers.

We take immense pride in operating the countrys fastest cone-producing machine, with an impressive daily output of 23 lakh cones. Vadilal is currently the only ice cream brand in India equipped with such a high-capacity machine, positioning us as the leader in cones, cups, and candy segments. Every day, we manufacture 5.5 lakh litres of delightful ice cream to meet growing consumer demand.

Our production hubs are located in Pundhra (Gandhinagar, Gujarat) and Bareilly (Uttar Pradesh). To further scale operations and improve automation, both facilities underwent a comprehensive expansion and modernization drive, which has now been successfully executed.

Quality first

Commitment to Quality Amidst Market Challenges

Despite the prevalence of a vast unorganized segment within the ice cream sector—where smaller players often compete on low price points—Vadilal has chosen to view this challenge as an opportunity. Rather than compromise on quality, we have reinforced our commitment to excellence, helping us stand tall as the second-largest ice cream brand in India.

Progress in Niche Market

Creating Niche Experiences and Premium Offerings

The growing presence of international brands in Indias ice cream landscape has fuelled our drive for innovation. Vadilal has responded by introducing globally inspired dessert experiences for Indian consumers at our parlours. With its fusion-style offerings and carefully curated ingredients, the parlours promise a premium experience that appeals to modern tastes while staying true to Vadilals legacy.

At present, we operate over 40 parlours across the country, each serving as a dedicated consumer experience touchpoint. These outlets feature innovative product formats crafted to elevate indulgence and novelty. Our intent is to deliver a holistic brand experience encompassing ambience, product innovation, and service excellence. Vadilals parlours - Now For Ever, Happinezz, and Hangout—continue to be cherished community destinations, attracting patrons of all ages with a blend of timeless classics and trendsetting flavours.

Vaddy Mascot, Zara Muskuraiye Vadilal Khaiye

Were thrilled to introduce our new mascot, Vaddy, the cheerful new face of Vadilal! As part of our heart-warming campaign Zara Muskuraiye, Vadilal Khaiye, Vaddy brings smiles, joy, and a playful charm to every ice cream moment. This campaign went live across TV, OOH, Radio, and Print, Digital platforms, Events, aiming to create a deeper emotional connect with consumers of all ages. Vaddys fun-loving personality perfectly captures the delight of indulging in a Vadilal treat—spreading happiness, one scoop at a time! Importantly, this campaign was conceptualized and launched following consumer research and behavioural analysis, which provided key insights into emotional drivers and brand affinity across segments.

At Vadilal, we believe ice cream is more than just a dessert — its a way to spread joy, spark smiles, and brighten every moment. Whether youre sharing a cone with loved ones or treating yourself to a quiet indulgence, Vadilal Ice Cream is the perfect companion for celebrations, memories, and everyday joy. With every scoop, we bring people together and add a little sweetness to life.

b) Processed Food Division Overview:

In FY 2024-25, the global frozen food and ice cream industries continued their upward trajectory, driven by shifts in consumer lifestyles, digital adoption, and increased global mobility. Convenience, variety, health consciousness, and sustainability have emerged as key drivers shaping consumer demand across markets.

Frozen foods have become an essential part of modern households-not only for their convenience, but also for their ability to offer year-round access to global cuisines, seasonal ingredients, and balanced meal options. Trends such as clean-label formulations, plant-based alternatives, and premium ready-to-eat meals are influencing innovation and retail assortment strategies. Enhanced cold chain infrastructure and the growth of organised retail, including e-commerce, are further accelerating category penetration.

Simultaneously, the ice cream segment remains resilient and dynamic, with strong demand in developed regions such as the United States, Europe, and Australia, and rapid expansion in Asia-Pacific markets. Consumers are seeking out bold, international flavour profiles alongside health-oriented alternatives such as low-calorie, dairy-free, and high-protein options. Impulse formats and premium multi-packs continue to perform well, supported by product innovation and indulgent limited-time offerings.

Together, these shifts underscore the evolving role of frozen and impulse categories in everyday consumption patterns, offering a wide canvas for innovation, premiumisation, and global growth.

Global market view:

The global frozen food market was valued at USD 503.75 billion in 2024 and is projected to reach USD 712.8 billion by 2030, growing at a CAGR of 6.0%. Growth is driven by rising demand for convenience, improved cold chain infrastructure, and wider acceptance of ready-to-eat meals across developed and emerging regions.

The global ice cream market stood at approximately USD 82.19 billion in 2024 and is projected to grow at a CAGR of 6.5%, reaching USD 136 billion by 2032. Innovations in flavour, packaging, and health-forward indulgent offerings are key drivers.

The U.S. remains the worlds largest ice cream market, with sales projected to exceed USD 18 billion in 2025, growing at a CAGR of 5.9% through 2029. Its frozen food market was valued at USD 73.3 billion in 2023 and is expected to reach USD 102.5 billion by 2030, at a CAGR of 4.9%. Ethnic and plant-based options are contributing to category growth.

Canada is integrated within North Americas frozen food and ice cream markets, which reflect a CAGR of ~5-6%, supported by a preference for convenience and value-added frozen offerings.

Australias ice cream market stood at USD 1.05 billion in 2023, with a projected CAGR of 4.1% through 2032. The countrys frozen food sector continues to expand steadily. New Zealand mirrors Australasian trends, with increasing interest in premium and international frozen desserts and meals.

Europe led the frozen food market with USD 110.33 billion in revenue in 2023, accounting for over 30% of the global market. The regions ice cream market is expected to reach USD 34.6 billion by 2028, growing at a CAGR of 4.87%, supported by flavour innovation and sustainable packaging.

The Asia-Pacific frozen food market is the fastest growing globally, with a projected CAGR of 12.59%, driven by urbanisation, dual-income households, and time-saving consumption habits. The regional ice cream market is expected to reach USD 31.9 billion by 2028, at a CAGR of 7.3%, with strong growth in India, China, and Southeast Asia.

(2) OPPORTUNITY AND THREATS

a) Ice-cream Division

In recent years, the impulse category has dominated Indias ice cream market, a trend expected to persist as consumer interest in premium products and innovative flavours continues to rise. Convenience and value remain top priorities for modern consumers, highlighting a growing preference for quick yet high-quality indulgences

Gourmet Natural ice cream - Crafting Experiences, Not Just Products

Through years of brand-building, Vadilal has come to symbolize trust, hygiene, and happiness. Our Gourmet Natural product line is a shining example of that craftsmanship.

With consistent innovation and consumer-centric offerings, weve carved a distinct niche in the premium segment. The positive reception from our customers confirms that we are moving in the right direction. By staying attentive to emerging trends and continuing to deliver exceptional taste and quality, we aim to deepen brand loyalty and solidify our leadership in the premium space

Quick Comm/Modern trade

Retail Presence and Digital Expansion

We have a strong and growing presence across multiple retail and distribution channels. In Modern Trade, our products are available in leading outlets such as Reliance Retail, D-Mart, Spencers, Lulu Mall, Max Bazar, The New Shop, Osia Hypermart & Shubham K Mart.

In the QSR (Quick Service Restaurant) space, we are proudly associated with well-known chains including Barbeque Nation (BBQ), Honest, Octant Pizza, and Real Paprika. We also maintain strategic partnerships with several key accounts, such as Akshardham Temple - Premvati Uphar Gruh, Reliance JIO petrol pumps, Mukta Cinemas & Water Villa Water Park.

On the digital front, we are actively present across major Quick Commerce platforms, including Blinkit, Instamart, Big Basket, Swiggy Instamart, Zepto, Amazon Fresh & Flipkart Minutes, ensuring quick delivery and strong online visibility.

Additionally, in E-commerce, our offerings are available on Swiggy & Zomato, further strengthening our reach and accessibility across food delivery platforms.

Distribution and Logistics - Building a Cold Chain Network

Effective logistics are key to the success of any cold chain-dependent business. To increase our footprint, were strengthening our distribution network across cash-and-carry and modern retail formats. Were steadily expanding our cold chain infrastructure through an extensive fleet of refrigerated vehicles and deep freezers.

Our outreach strategy includes increasing direct consumer touchpoints via a network of dealers, Freezers on Wheels (FOWs), and exclusive ice cream parlours. In addition to large-scale advertising, were heavily invested in on-ground brand activations (ATL & BTL marketing) and innovative digital strategies, including influencer marketing and cross-promotions, to ensure top- of-mind recall and customer engagement.

b) Processed Food Division

The continued growth of digital-first consumption models, including online grocery platforms, quick commerce, and direct- to-consumer channels, is expanding consumer access to frozen and impulse products across markets.

Global exposure to diverse cuisines is increasing demand for ethnic ready meals, snacks, and desserts. This trend presents an opportunity for products rooted in authentic regional flavours to achieve broader acceptance and shelf space internationally.

The rising preference for portion-controlled indulgence and on-the-go formats is fuelling demand in the impulse ice cream category - particularly for bars, cones, and cups. This segment is expected to benefit from further innovation in packaging, texture, and flavour profiles.

Consumer emphasis on sustainability is growing, with heightened expectations around recyclable packaging, energy- efficient logistics, and responsible sourcing. Brands that adopt eco-conscious practices may gain competitive advantage in an increasingly values-driven marketplace.

At the same time, evolving consumer lifestyles and culinary curiosity are accelerating demand for convenience, premiumization, and healthier frozen food options, driving transformation across product development and retail strategies.

3) HIGHLIGHTS OF FINANCIAL PERFORMANCE AND OPERATIONAL PERFORMANCE.

The Company has earned Revenue from Operations of Rs 1011.33 crore during the year ended on 31 st March, 2025 as against Rs 912.57 crore during the previous year ended on 31 st March, 2024 i.e. increase of 10.82% compared to previous year.

After adding thereto, the other income of Rs 17.26 crore, the Company has earned total income of Rs 1028.59 crore during the year under review. The Company has incurred total expenses of 875.60 crore including Finance cost of Rs 8.30 crore and Depreciation and Amortization expenses of Rs 25.59 crores, during the year under review.

The Company has earned profit before Tax of Rs 152.99 crore during the year under review as compared to profit of Rs 128.57 crores during the previous year ended on 31 st March, 2024. The Company has earned profit of 113.88 crores during the year ended on 31 st March, 2025 after deducting total tax expenses of Rs 39.11 crore as compared to profit of Rs 95.84 crores during the previous year ended on 31 st March, 2024 after deducting total tax expense of 32.73 crore.

Turnover History
Financial year	Rs in crore
2015-16	455.38
2016-17	484.38
2017-18	520.13
2018-19	507.05
2019-20	516.62
2020-21	356.54
2021-22	544.11
2022-23	896.71
2023-24	912.57
2024-25	1011.33

4) SEGMENT WISE PERFORMANCE.

The company is primarily engaged in one business segment namely Food segment as determined by the chief operating decision maker in accordance with IND AS 108 - Operating segment and hence, Segment-wise Performance of the Company has not been provided.

5) RISKS AND CONCERNS

a) Ice Creams Division

Vadilal holds a 16% share of the organized segment in the Indian ice cream market. Our strength lies in our extensive pan- India distribution network, comprising over 1,50,000 dealers and trade partners, ensuring accessibility across urban, semi-urban, and rural markets.

To stay ahead in a competitive landscape, Vadilal proactively monitors market trends and competitor offerings. We believe that continuous innovation, product quality, and strategic foresight are crucial to staying relevant in an ever-evolving consumer market. While the unorganized segment continues to pose a challenge, Vadilal differentiates itself through its legacy of quality and expertise.

Our media strategy is robust and diversified, encompassing outdoor hoardings, in-store branding (POS/POP), television, radio, print, and digital platforms. With the digital ecosystem rapidly growing, weve increased our investments in platforms such as social media, OTT, and Connected TV (CTV), reinforcing our brand presence among younger and tech- savvy audiences.

That said, certain challenges remain. Rising input costs, cold chain infrastructure, and supply-side pressures are areas of concern. The company continues to monitor and manage these risks through operational efficiencies and strategic procurement planning.

b) Processed Food Division

The global frozen food and ice cream industry continues to navigate a dynamic environment shaped by external challenges. Climate-related disruptions in key agricultural regions and geopolitical tensions affecting global trade routes have contributed to occasional fluctuations in raw material availability and freight costs.

Regulatory changes across regions - particularly in labelling, packaging, and sustainability compliance - require ongoing adaptation and monitoring. Additionally, rising health consciousness and evolving consumer expectations are encouraging reformulation and innovation in product lines.

While supply chain pressures and currency fluctuations in select markets persist, companies with resilient sourcing, strong partnerships, and a diversified market presence are better positioned to respond to these developments.

6) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

In view of the management, the Company has adequate internal control systems for the business processes followed by the Company. The External and Internal Auditors carry out periodical reviews of the functioning and suggest changes if required. The Company has also a sound budgetary control system with frequent reviews of actual performance as against those budgeted.

The Audit Committee of the Board meets periodically to review various aspects of the performance of the Company and also reviews the adequacy and effectiveness of internal control systems and suggests improvement for strengthening them from time to time. The External Auditors also attend these meetings and convey their view on the business processes and also of the policies of financial disclosures. When found necessary, the Committee also gives suggestions on these matters.

7) HUMAN RESOURCE DEVELOPMENT:

Employee being prime force the Company gives equal emphasis on employee development and their engagement. The Company believes in enhancing the competencies of employee to create a high performing and innovative organization. Equal emphasis is given on the on technical & soft skills. There are cordial relations between the management and employee of the Company.

As on 31 st March, 2025, the Company has employed total 649 employees at all locations.

8) SIGNIFICANT CHANGES IN FINANCIAL RATIOS:

Refer Note 52 to Standalone Financial Statement

9) CAUTIONARY STATEMENT:

The statements made and figures given in the various sections of Management Discussion and Analysis are keeping in mind the Companys objectives, estimates and expectations. The Actual results may differ from those expected depending upon the economic conditions, changes in Govt. Regulations, tax regimes and other external and internal factors.

	For and On Behalf of the Board of Directors
	Shivakumar Dega
Date : 12 th August, 2025	Chairman
Place : Ahmedabad	DIN 00364444