Vintage Coffee & Beverages Ltd Management Discussions

[Pursuant to Schedule V (B) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015]

The Management Discussion and Analysis Report has been prepared in accordance with the provisions of Regulation 34(2)(e) of the LODR Regulations, read with Schedule V(B) thereto, with a view to provide an analysis of the business and Financial Statements of the Company for FY 2025-26 and should be read in conjunction with Companys standalone and consolidated financial statements, the Directors report and other information included elsewhere in the Annual Report.

1. Forward-Looking Statement

This Management Discussion and Analysis (MD&A) contains certain statements describing the Companys objectives, expectations, estimates, projections, plans, strategies and outlook that may be considered forward-looking statements within the meaning of applicable laws and regulations. Such statements are based on managements current expectations, assumptions and estimates.

Actual results may differ materially from those expressed or implied due to factors including changes in global and domestic economic conditions, green-coffee availability and prices, exchange-rate movements, customer demand, competitive intensity, freight and logistics costs, regulatory developments, project-execution risks, financing conditions, climate-related disruptions and other factors beyond the Companys control.

The Company undertakes no obligation to publicly update or revise any forward-looking statement, except as required under applicable law.

2. OVERVIEW

Coffee is the second largest traded agricultural commodity in the world. It provides livelihood millions of people in various sectors.

As per USDA, the global green coffee production for the year 25-26 was 178.8 million bags with exports at 173.45.5million bags. Ending stocks were at 24.27 million bags. Correspondingly, for 26-27 , green coffee production is forecasted to a record 189.7 million bags. Consumption is expected to grow to 179.7 million bags and closing stocks at 26.2 million bags.

The favourable demand supply situation along with reasonable certified closing stocks ensured that green coffee prices started moving up leading to increase in prices of value-added products also.

Instant coffee market is valued at USD 11.4 billion. The market is further projected to grow in the forecast period of 2022-2027 at a CAGR of 4.9% to reach USD 15.2 billion by 2026.

Spray dried instant coffee dominated the global instant coffee market at the lower end of price spectrum. granulated coffee and freeze-dried instant coffee complete the other higher priced segments in Instant Coffee contributing to more than 50% of the Instant coffee category.

Instant Coffee is available in concentrated liquid, powdered form and in granules, in sachets or glass jars are gaining immense popularity, especially among the working population across the globe.

GLOBAL ECONOMIC TRENDS

During FY 2025-26, the global economy continued to experience uneven growth, persistent geopolitical uncertainties, changing trade flows, currency volatility and periodic inflationary pressures. Consumer-facing industries operated in an environment where customers increasingly balanced affordability with quality, convenience and dependable product availability.

For food and beverage manufacturers, the year underscored the importance of resilient supply chains, disciplined input procurement, flexible manufacturing capability, quality assurance and strong customer relationships. Businesses with specialised product capabilities and an export-oriented operating model remained exposed to global demand conditions, commodity-price movements, foreign-exchange fluctuations and trade-related developments.

As per IMF, global economic growth rate was at 3.0% for 2026 and 3.4% for 2027. This projection emphasizes moderate growth despite the headwinds presented by inflation and potential trade disruptions and geopolitical situations.

ROBUST INDIAN ECONOMY

Inspite of continuing global uncertainties Indian economy and GDP grew from USD3.55 trillion in 24-25 to USD3.66 trillion in 25-26.driven by a strong domestic demand, policies and growing investments. The government of India is proactively interacting with producers and exporters of Coffee to push up exports.

COFFEE INDUSTRY IN GROWTH PHASE

Instant coffee production has been growing in line with the growing consumption trends triggered by global economic growths. Consumption continues to be ahead of production creating a favourable demand supply situation for Instant Coffee. With rising per capita incomes, and double income households ,more people are trying Newer experiences such as cafes, specialty cafes and premium products . Focus on wellness and social media trends, increasing desire for functional coffee (coffees infused with Vitamins, Minerals is being witnessed in both traditional and non-traditional markets.

The fastest growing markets continue to be developing economies with Asia-Pacific and the fastest growing segment appears to be Freeze Dried Coffee.

GLOBAL COFFEE TRENDS

Global coffee production is forecast to reach a historic high of 186.6 million bags in the 206-27 crop year registering a growth of 10.8 million bags over the previous year, according to the latest outlook by the United States Department of Agriculture (USDA).

This growth is driven largely by a record output in Brazil, Ethiopia, Uganda and Vietnam..

The globally, Instant coffee (spray and agglomerated instant coffee) which is a value add over Conventional coffee is growing at around 2% CAGR. Growth rates are higher in Asia pacific, Central Asian , Baltic and central American markets and for Freeze dried Instant Coffee, a premium product segment. Private labels are showing a strong growth opportunity.

In spite of difficulties on global political and economic front, the global coffee market is anticipated to reach US$134.25 billion and Vintage Coffee is well positioned to gain a fraction of this ever-growing coffee market.

Coffee consumption is increasingly being shaped by convenience, premiumisation, accessibility and customisation. The Company believes that the following trends will remain relevant to the industry:

Convenience-led demand: Consumers continue to value easy-to-prepare, consistent and shelf-stable coffee products. This supports demand for soluble coffee formats across homes, offices, institutions and travel-related consumption occasions.

At-home and workplace consumption: Instant coffee is well suited to at-home, office and institutional consumption due to quick preparation, convenience and ease of storage.

Premiumisation: Consumers are increasingly seeking better aroma, improved taste, quality assurance and differentiated formats. This trend supports higher-value coffee categories, including agglomerated and freeze- dried coffee.

Private-label growth: Retailers, distributors, food-service operators and emerging consumer brands are increasingly seeking reliable manufacturing partners for customised coffee products, packaging formats and market-specific formulations.

Omnichannel distribution: Modern trade, e-commerce, quick-commerce, cafes, food-service channels and direct- to-consumer platforms are broadening product access and creating new consumption occasions.

Responsible consumption: Customers and consumers are showing increasing interest in product traceability, responsible sourcing, food safety, sustainable packaging and environmental stewardship.

VINTAGE COFFEES High growth plans continue...

Vintage Coffee & Beverages Limited (VCBL or the Company) is engaged in the manufacture of instant coffee, agglomerated coffee, instant chicory and related value-added beverage products. The Companys business is supported by its focus on specialised coffee processing, export-oriented manufacturing and the ability to offer private-label and customised solutions to customers.

The Companys product portfolio is designed to address a range of customer requirements:

Spray-dried instant coffee , providing an established, convenient and scalable soluble-coffee format.

Agglomerated instant coffee , providing enhanced product characteristics and a differentiated offering within the soluble-coffee segment.

Instant chicory , supporting coffee-and-chicory blends and customer-specific beverage solutions.

Value-added and customised beverage products , designed around customer specifications, product positioning and relevant market requirements.

Vintage Coffee and Beverages Limited (VCBL) is expanding aggressively in fast growth markets such as Africa, Central America and other growing markets on the strong foundation of product quality, customer relationships and with a collaborative approach with customers leading to development of many new blends adding to the current portfolio.

The Company has invested in experienced manpower holding key positions manging the profit centres. Employee retentions at senior levels are very high and has ensured a focused growth on the stated strategy.

The Company has now successfully completed its planned production capacity increase by 4500 MT taking its total annual capacity to 11000 MT of spray and agglomerated Instant Coffee.

Freeze-Dried Coffee Project

The Company has announced plans to establish a freeze-dried coffee facility in Telangana with an initial proposed capacity of 5,500 MT per annum . Freeze-dried coffee is a premium segment within soluble coffee and is generally associated with higher aroma retention, premium positioning and enhanced product differentiation.

Management has indicated that the project is expected to be implemented in phases. Public disclosures have referred to a targeted commencement of trials by around June 2027 and commercial production from the second quarter thereafter, subject to project execution, installation, commissioning, approvals, demand conditions and other customary factors.

The proposed freeze-dried coffee facility is expected to complement the Companys existing spray-dried and agglomerated coffee capabilities and may enable the Company to address higher-value customer requirements. The project remains subject to detailed execution, financing, capital-expenditure management, vendor performance, customer qualification and market realisations.

The Company has taken into cognizance, the global green coffee production and prices and has taken adequate steps to cover its requirements at optimal prices.

BUSINESS REVIEW

The company has laid out a clear roadmap for the next few years, post a strategy development process to ensure rapid growth in line with last several quarters performance. The company will also focus on high margin products in its sales mix. New products will be introduced in new segments. The company is also on course to starting its Freeze-dried instant coffee initiative next year.

The year gone by has witnessed many events potentially impacting the business, We have see coffee prices firming up, changing Geopolitical situations, which had further impacts on logistics and related activities, coupled with intense competitor activities, However, the company has a well laid out strategy development and implementation process which helped identify potential issues, blind spots etc and has taken effective steps to achieve its stated objectives for the year.

The company has taken adequate steps to broad base its sale to protect against any potential geopolitical/economic issues. While the company is present on B-to-B platforms in India, it has also taken steps to be present on e-commerce platforms and could possibly extend to quick service platforms and selectively in Modern trade.

Particulars (INR Lakh)	FY2526	FY2425	% Growth
I Total Revenue	56,084	31,252	\u25b2 79.5%
EBIDTA	10,743	5,699	\u25b2 88.5%
X EBIDTA %	19.2%	18.2%	-
S 5 PBT	8,889	4,415	\u25b2 101.4%
X PBT %	15.9%	14.1%	-
PAT	7,219	4,015	\u25b2 79.8%
X PAT %	12.9%	12.8%	-
- Net Worth	56,921	30,295	-
S Total Borrowings	12,363	8,195	-

FINANCIAL METRICS

The Turnover of the company has increased from Rs.308.52 Crores in FY 2024-25 to Rs.553.05 Crores in FY 2025-26.this turnaround has improved profit from 40.15 crores in FY 2024-25 to Rs.72.19 Crores in FY2025-26. Return on Capital Employed has improved from 14.22% in 2024-25 to 15.66% in 2025-26. Debt to Equity Ratios have improved from 0.27 in 2024-25 to 0.22 in 2025-26. Earnings per share have improved from Rs.3.19 in 2024-25 to Rs.5.22 in 2025-26.

3. INDUSTRY STRUCTURE AND DEVELOPMENTS

As being seen in the recent trend, global consumption is increasing. Consumption increase is being observed in developing countries in line with economic growth. Developed countries are looking at premiumization of products.

People are becoming more sensitized to social and ethical aspects in daily life in general and for coffee in particular. We are observing demand for certified coffee products.

4. OPPORTUNITIES AND THREATS

I. Opportunities

The Company believes the following factors may support growth:

Sustained global demand for soluble coffee and convenient beverage formats.

Increased demand for private-label and contract-manufactured coffee products.

Growing domestic acceptance of coffee across geographies and demographic segments.

Premiumisation within the coffee category and increasing demand for differentiated formats.

Opportunity to participate in agglomerated and freeze-dried coffee categories.

Expanding modern trade, e-commerce, quick-commerce and food-service channels.

Potential operating leverage from higher utilisation of expanded capacity.

Opportunity to create deeper customer relationships through customised formulations, blends and packaging solutions.

II. Threats

The Companys operations may be affected by:

Volatility in green-coffee prices and availability.

Weather-related supply disruptions in producing countries.

Foreign-exchange fluctuations affecting export realisations and input costs.

Freight, container availability and logistics-cost volatility.

Competitive intensity from domestic and international coffee manufacturers.

Customer concentration and pricing pressure in business-to-business markets.

Product-quality, food-safety, regulatory and traceability requirements.

Delays, cost overruns or other risks associated with capacity-expansion projects.

Changes in international trade regulations, duties, product standards and market-access requirements.

5. RISK, CONCERNS AND THREATS

As always global economy, Political disturbances continue and may pose potential problems.Despite increase in coffee consumption, new players are joining to cater to the increasing demand.

However, your company has sound planning and strategy in place to meet the stated budgetary targets. It has robust processes to identify blind spots and is geared up to meet all the potential challenges and confident to meet its set objectives for the year.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has laid down procedures and control framework for the governance of orderly and efficient conduct of its business, including adherence to policies, safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial reports. These include regulations in manual or automated (ERP) applications including other IT applications, wherein transactions are approved and recorded). Appropriate review and control mechanisms are one of our mandates in ensuring that such control systems are adequate and are operating effectively on an ongoing basis. The Company is responsible for establishing and maintaining optimal internal controls in preparation and presentation of financial statements, including assertions on the internal financial controls.

7. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE REVENUES - STANDALONE:

During the year under review, the Company on a standalone basis has recorded an income of Rs. 31,658.84 and Profit of Rs. 1375.48 lakhs as against the income of Rs. 11,348.57 lakhs and Profit of Rs. 593.20 lakhs respectively in the previous financial year ending 31.03.2025.

REVENUES - CONSOLIDATED:

During the year under review, the Company on a consolidated basis has recorded an income of Rs. 55,304.53 lakhs and Profit of Rs. 7,219.29 lakhs as against the income of Rs.30,852.08 lakhs and Profit of Rs.4,015.04 lakhs respectively in the previous financial year ending 31.03.2025.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Your Company treats its Human Resources as its important assets and believes in its contribution to the all-round growth of the Company. The Company takes steps from time to time to upgrade and enhance the quality of this asset and strives to maintain it in agile and responsive form. The Company is an equal opportunity employer and practices fair employment policies. The Company is confident that its Human Capital will effectively contribute to the long-term value enhancement of the Organization. The Company has complied with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, relationship between the management and the employees continued to be cordial. The Companys Directors wish to place their sincere appreciation for the devoted services of all employees and workers of the Company on record.

9. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS YEAR (STANDALONE FINANCIAL STATEMENTS)

Ratios as per Schedule III Requirements

SI No Ratio	Formula to Calculate Ratio	31-03-2026	31-03-2025	31-03-2026	31-03-2025	Variance	Reason for Variance
(a) Current Ratio	Current Assets	13,179.21	2,197.71	6.18	3.10	99.54	Due to sharp increase in current assets, outpacing growth in current liabilities
	Current Liabilities	2,133.73	709.98
(b) Debt Equity Ratio	Total Debt	2,065.38	1,007.48	0.04	0.03	19.27	Not Applicable
	Total Equity	49,776.78	28,959.61
(c) Return on Equity Ratio	Net Income	1,375.48	593.20	2.76%	2.05%	34.90	Due to net income growing faster than shareholders equity
	Shareholders Equity	49,776.78	28,959.61
(d) Trade Receivables Turnover Ratio	Turnover	31,658.84	11,348.57	9.16	9.36	-2.13	Not Applicable
	Average Trade Receivables	3,455.50	1,212.26
(e) Trade Payables Turnover Ratio	Turnover	31,658.84	11,348.57	34.44	24.06	43.11	Due to increase in turnover outpacing the rise in average trade payables
	Average Trade Payables	919.34	471.63
(f) Net Working Capital ratio	Turnover	31,658.84	11,348.57	5.05	7.63	-33.77	Due to net working capital growing faster than turnover
	Net Capital	6,266.60	1,487.73
(g) Net Profit Ratio	Net Profit after Tax	1,375.48	593.20	4.34%	5.23%	-16.88	Not Applicable
	Turnover	31,658.84	11,348.57
(h) Return on Capital Employed	EBIT	2,063.11	807.76	4.00%	2.70%	48.31	Due to EBIT growing faster than capital employed
	Capital Employed	51,607.66	29,967.09
Sales Growth Ratio (i)	(Current Year Sales - Previous Year Sales)	20,310.27	3,959.15	178.97%	53.58%	234.03	Due to higher turnover growth this year compared to previous years lower base growth
	Previous Year Sales	11,348.57	7,389.42
EBDITDA Ratio (j)	EBDITDA	2,351.27	981.76	7.43%	8.65%	-14.15	Not Applicable
	Revenue from Operations	31,658.84	11,348.57
PBT Ratio (k)	Profit Before tax	1,845.27	795.87	5.83%	7.01%	-16.89	Not Applicable
	Turnover	31,658.84	11,348.57

CONSOLIDATED FINANCIAL STATEMENTS: RATIOS

10. ANY OTHER SECTOR SPECIFIC RATIOS, AS APPLICABLE

Not Applicable

11. DISCLOSURE OF ACCOUNTING TREATMENT:

During the preparation of Financial Statements for F.Y. 2025-26 the treatment as prescribed in accounting standards has been followed by the Company. There are no significant changes in Accounting Treatment as followed by the Company in current financial year as compared to previous financial year.

For and on behalf of the Board of Directors Vintage Coffee and Beverages Limited

SI No Ratio	Formula to Calculate Ratio	31-03-2026	31-03-2025	31-03-2026	31-03-2025	Variance	Reason for Variance
(a) Current Ratio	Current Assets	40,035.25	21,235.82	4.38	4.46	-1.85%	Not Applicable
	Current Liabilities	9,146.98	4,762.10
(b) Debt Equity Ratio	Total Debt	12,362.52	8,195.37	0.22	0.27	-19.72%	Due to increase in equity from profits.
	Total Equity	56,921.32	30,294.64
(c) * Return on Equity Ratio	Net Income	7,219.29	4,015.04	0.13	0.13	-4.30%	Not Applicable
	Shareholders Equity	56,921.32	30,294.64
(d) Trade Receivables Turnover Ratio	Turnover	55,304.53	30,852.08	5.21	6.13	-15.03%	Not Applicable
	Average Trade Receivables	10,620.55	5,034.46
(e) Trade Payables Turnover Ratio	Turnover	55,304.53	30,852.08	70.20	28.41	147.12%	Due to increase in turnover coupled with decrease in average trade payables
	Average Trade Payables	787.78	1,086.02
(f) Net Working Capital ratio	Turnover	55,304.53	30,852.08	2.34	2.41	-3.19%	Not Applicable
	Net Capital	23,681.00	12,789.76
(g) Net Profit Ratio	Net Profit after Tax	7,219.29	4,015.04	0.13	0.13	0.31%	Not Applicable
	Turnover	55,304.53	30,852.08
(h) Return on Capital Employed	EBIT	9,798.34	5,013.71	15.66%	14.22%	10.12%	Not Applicable
	Capital Employed	62,551.90	35,247.05
Sales Growth Ratio (i)	(Current Year Sales - Previous	24,452.45	17,748.22	79.26%	135.44%	-41.48%	Due to high base effect of previous years growth
	Previous Year Sales	30,852.08	13,103.86
EBDITDA Ratio (j)	EBDITDA	9,964.00	5,298.55	18.02%	17.17%	4.91%	Not Applicable
	Revenue from Operations	55,304.53	30,852.08
PBT Ratio (k)	Profit Before tax	8,889.38	4,414.51	16.07%	14.31%	12.33%	Not Applicable
	Turnover	55,304.53	30,852.08

Balakrishna Tati	Sai Teja Tati
Chairman and Managing Director	Whole-time Director
DIN:02181095	DIN:09494526
Place: Secunderabad
Date: 04.09.2026