Venkys India Ltd Management Discussions

The global economic growth was slightly high at 3.4% in 2025-26 as compared to 3.3% in the previous year. This slow growth was largely influenced by the US tariff shock during April & May, 2025 due to which the overall growth remained uneven, with advanced economies facing subdued demand while emerging markets continued to perform better supported by strong domestic consumption.

Indian economic performance in 2025-26 was generally broad-based and resilient backed by healthy agricultural output and normal monsoon conditions. The real GDP growth estimated at 7.6% for FY 2026 was better as compared to 7.1% in the previous year. This underscores the strength of domestic demand, government spending and investment activities.

For the poultry sector though it continues to face structural challenges in the form of high feed prices and less remunerative realisations it has the potential to scale significantly in the long run since the sector is growing at a rate of around 8% per annum. Rising commercialization of poultry farming activities is expected to see that this type of growth is sustainable.

2. Opportunities, Threats, Risks and Concerns :

As we have been witnessing in the last several years, the poultry sector is well positioned to continue to grow in the coming years as well. The National Institute of Nutritions recommended level of 180 eggs and 11 kgs of meat as per capita consumption provide good scope for the future growth, as compared to the present per capita consumption, which is only 91 eggs and 4.9 kgs of meat. Steady fresh investment in poultry sector especially in the processing segment- and increasing production capacities from the existing players across the country augurs well for the ever growing market for poultry products. Rising processed poultry products demand and lifestyle shifts as a result of urbanization, growth in nuclear families and a large working population are driving increased consumption of packaged and convenience foods. After the Covid-19 lot of importance is given to immunity and the consumption of eggs and chicken for building immunity is also going up. All over the country, there is a growing demand for eggs and chicken and this will give impetus for consumption in deficit States like North-East and Central India. Various States are encouraging poultry in their area because poultry sector provides employment potential in villages and ensure they are self-sufficient for poultry products. However, inadequate capacities in cold storage segment for processed poultry products, volatility in raw material prices due to environmental and geopolitical disruptions and high fluctuations in petroleum products prices are frequently impacting production costs and margin stability.

3. Segmentwise Performance: a. Poultry and Poultry Products

The Companys major business segment is Poultry and Poultry Products which consist of production and sale of day old broiler and layer chicks, specific pathogen free eggs, processed chicken products and poultry feed. In the financial year 2025-26 this segments turnover was Rs. 1,896.75 Cr. as compared to Rs. 1,927.96 Cr. in the previous year. The segments profit before tax and interest was Rs. 65.46 Cr. as compared to Rs. 99.51 Cr. in the previous year. b. Animal Health Products

The Company has its animal health products manufacturing facility at Pune. This segments sales turnover was Rs. 391.64 Cr. as compared to Rs. 339.31 Cr. in the previous year. Profit before tax and interest was Rs.98.99 Cr. as against Rs. 72.35 Cr. c. Oilseed

Oilseed segment registered a sales turnover of Rs. 1,554.14 Cr. as compared to Rs. 1,140.75 Cr. in the previous year. Profit before tax and interest was Rs. 54.38 Cr. as against Rs. 19.14 Cr. in the previous year.

4. Outlook

While certain near term challenges remain for the poultry sector, we are confident in the long term growth potential of the Companys business. Rising health and wellness awareness and steady increase in disposable income are expected to drive more demand for poultry products due to their rich protein base at affordable prices. From financials point of view, a robust balance sheet, negligible borrowings and a strong foundation of scientific expertise collectively position Venkys very well to pursue further growth opportunities. With the diversified nature of business activities within the poultry sector - operating in various States in the country - Venkys is well placed and, therefore, the Management is confident that the overall business outlook remains positive.

The internal control system is designed to ensure that all the financial and other records are reliable for preparing financial statements and for maintaining accountability of the assets. The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and that transactions are authorised, recorded and reported correctly.

Commensurate with the size of operation, your Company has Internal Audit department which continuously reviews the internal control system by an exclusive programme of Internal Audit. The significant findings are then discussed by the Audit Committee of Directors and corrective measures are initiated. The Audit Committee also monitors the implementation of recommendations made by it.

The Companys turnover registered an increase of 12.64% at Rs.3,774.93 Cr. as compared to Rs.3,351.17 Cr. in the previous year. The Company registered an increase of 19.40% in profit at Rs.139.25 Cr. as compared to Rs.116.62 Cr. in the previous year.

The Company added long term borrowings of Rs.9.50 Cr as on 31.03.2026 against no long term borrowings in the previous year. The short term borrowings of the Company during the year decreased by 7.19% from Rs. 165.14 Cr. to Rs. 153.27 Cr. Finance cost of the Company marginally increased from Rs.16.34 Cr. to Rs.17.04 Cr.

Keeping in view liquidity, returns and also safety, the Company has invested certain funds in bank deposit and debt/liquid schemes of mutual funds.

/ Industrial Relations front, including number of people employed:

In line with VH Groups corporate philosophy, the Human Resource is considered as the most valuable resource in the Company. The focus is on developing a performance culture with high standards of efficiency and innovation. Employee relations at all levels continue to remain cordial. As on 31^st March, 2026 the Company has 5,488 employees.

Details of significant changes (25% or more) in key financial ratios along with detailed explanation for such change as compared to the previous financial year: