Foods & Inns Limited — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

Foods & Inns reported a steady Q3 FY26 with flat overall sales tonnage, primarily due to US tariff uncertainty impacting call-offs. Despite lower average realizations, gross profit for 9M FY26 increased by 8.7% to INR235 crores, though EBITDA saw a decline of INR10 crores due to MTM forex losses and higher operating costs. The frozen food segment showed strong growth, with volumes up 35% YoY in Q3, and the company is expanding spray drying capacity and progressing on Tetra Recart utilization.

Highlights

  • Frozen food business volumes grew approximately 35% YoY in Q3 and 37% YoY for 9M FY26, demonstrating strong growth momentum.

  • Gross profit increased by 8.7% for 9M FY26, from INR216 crores to INR235 crores, despite lower average realizations.

  • Successfully onboarded two large, financially strong airline customers for the frozen food segment.

  • Initiated spray drying capacity expansion of 120 metric tons per annum, with construction underway.

  • Long-term debt was reduced by approximately INR20 crores year-on-year, contributing to interest cost reduction.

Concerns

  • Overall sales tonnage remained flat in Q3 FY26 due to deferred call-offs from US customers amid tariff-related uncertainty.

  • Average realizations were lower year-on-year, reflecting sales from 2025 crop season inventory produced at significantly lower raw material costs.

  • EBITDA for 9M FY26 declined by approximately INR10 crores, partly due to MTM forex loss and increased freight/operational expenses.

  • Commercialization of the Pectin project is a long process, with substantial sales expected only from next year onwards, despite investments.

  • Tomato crop procurement commenced with a slight delay compared to prior years due to seasonal factors.

Key financials

2 periods

9M FY25

  • Revenue
    ₹610 Cr
  • Gross Profit
    ₹216 Cr
  • Profitability
    ₹20 Cr

9M FY26

  • Revenue
    ₹580 Cr
  • Gross Profit
    ₹235 Cr
    YoY +8.7%
  • Profitability
    ₹12 Cr
  • EBITDA
    —

What they filed

Q1 FY27: revenue down 33.3%, net profit down 46.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue169 189 397 236 193 +14%150 −21%289 −27%157 −33%
EBITDA24 19 48 26 18 −25%17 −9%40 −17%20 −20%
Net profit11 1 23 7 1 −94%0 −46%19 −16%4 −46%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Frozen Food
    35% Q3 FY26 Volume Growth37% 9M FY26 Volume Growth
  • Pectin
    ₹350 Cr India Market Size₹15 Cr Revenue Potential (Single Shift)
  • Tetra Recart
    ₹5 Cr 9M FY26 Revenue
  • Tomato Paste & Related Products
    ₹55 Cr Revenue (3 Quarters)

Capital allocation

high confidence
  • Capex Capex disclosed
    • Pectin project investment ₹12 Cr
    • Tetra Recart equipment ₹24 Cr
    • Tetra Recart infrastructure ₹6 Cr
    • Greenfield plants (Vankal), brownfield (Gonde for spray drying, cold room, frozen food factory)
    • Tomato processing plant commissioned
    So basically, with respect to the investments, basically, the Pectin project is around INR12 crores to INR13 crores of investment that we have actually done. And with respect to the Tetra Recart, basically, it's a INR30 crores investment that we did broken up into INR24 crores for the equipment and the balance INR6 crores for the infrastructure that we built.
  • Debt Debt disclosed Cost 9.2%
    • Repayment Repaid long-term debt ₹20 Cr
    As of now my total debt is around INR460 crores approximately, long-term and short-term put together. Long term is around INR50 crores.

Guidance & targets

Profitability

  • EBITDA & Gross Margin Growth Profitability · Year-on-year basis · Low confidence 10-15%
    We are internally looking at anywhere between 10% to 15% growth on EBITDA as well as gross margin on a minimum basis on a year-on-year basis. That's the internal targets that we have, but that's not a guidance, please.

    — Anand Krishnan

Other

  • PLI Income Other · FY26 · Medium confidence Similar to or a little higher than INR25 crores
    PLI amount for the current year last year, we have given around INR25 crores. This year, we have submitted our application. It is under process. So today, we may not be able to give the exact figure. But we believe that based on the our sales and all these things, it will be similar like last year, maybe a little higher than last year. ... Yes. Higher than last year is what the number is. We don't want to confirm on the number because it is all government related. So we have applied for a certain number. We are 99% hopeful that, that should be the number that we should get.

    — Moloy Saha / Anand Krishnan

  • US Tariff Rate on Mango Pulp Other · Future (awaiting formal notification) · Medium confidence 18-19%

    Previously 25% → 18-19%

    But with the recent development, it's likely to be 18% or 19%, but that formal notification yet to receive.

    — Moloy Saha

Capacity

  • Pectin Capacity Utilization Capacity · Next year onwards · Medium confidence 70-75%
    But next year onwards, we are expecting that at least 70% -75% of our capacity we can be able to utilize.

    — Moloy Saha

Revenue

  • Pectin Revenue Potential (Single Shift) Revenue · Annually · High confidence INR15 crores
    if we were to run our Pectin plant on a single run basis, then we can generate around INR15 crores of revenue. But that INR15 crores would be actually split into 50-50, wherein we will be consolidating only 50% of it because it's a joint venture per se.

    — Anand Krishnan

  • Tomato Paste Revenue Growth Revenue · Next quarter (implied) · Low confidence 20% increase
    it can increase by another, say, 20%.

    — Moloy Saha

Volume

  • Tetra Recart Volume Growth Volume · Next year onwards · Medium confidence 5-6x current volume
    next year onwards we are expecting that it can be 5x to 6x of current volume.

    — Moloy Saha

  • Frozen Food Segment Growth Volume · Next 3-4 years · Medium confidence Maintain same pace
    this segment is likely to grow in the same pace for the next 3 to 4 years across the world.

    — Moloy Saha

What to watch in Q4 FY26

US Tariff Formal Notification

Next quarter
Current Awaiting formal notification
Target Formal notification of 18-19% tariff

Why it matters

Resolution of tariff uncertainty could unblock deferred US orders and improve sales, impacting revenue and profitability.

But with the recent development, it's likely to be 18% or 19%, but that formal notification yet to receive.

Risks & concerns

  • US Tariff Uncertainty

    medium

    Deferred call-offs from US customers impacted Q3 sales tonnage due to lack of clarity on tariffs, though formal notification of reduced tariffs is awaited.

    Management acknowledged

  • Raw Material Price Volatility & Inventory Valuation

    medium

    Lower average realizations due to sales from 2025 inventory produced at lower raw material costs; future prices can fluctuate, impacting inventory valuation, creating a cyclical effect.

    Management acknowledged

  • Working Capital Blockage

    medium

    Increased working capital due to inventory build-up for non-mango seasonal products (guava, tomato, chili, garlic, ginger) to cater to demand for 6-7 months.

    Analyst acknowledged

  • Delay in Pectin Commercialization

    medium

    Pectin commercial orders from major customers are expected from Q1 next year, with substantial sales only from next year onwards, due to extensive testing and formulation changes required by clients.

    Management acknowledged

  • Seasonality of Business

    low

    Mango is a summer fruit and tomato has specific seasons, making quarter-on-quarter performance volatile and requiring year-on-year assessment.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Tomato Order Book & Transparency Evasive
Sir, if you don't allow me to talk then how can you continuously you are pausing me and asking. Let me allow, if you have some patience. You just allow me finish and then you ask me. I am very happy to give all your answers, sir. ... No, not necessary, Venkatesh. If you're going to talk so rudely, we don't need to necessarily give you answers. It's your choice to either be invested in the company or not.

Management refused to disclose specific tomato order book figures, citing commercial sensitivity and industry practice, leading to analyst frustration and indicating a lack of transparency on a key seasonal product.

Asked by Venkatesh Ranganathan

US Tariff Impact on Q3 Volumes & Revenue Direct
US volume overall annual basis is approximately 10%. But overall we see the business is growing. In the last one year it has grown and although due to the tariff it is temporarily paused and again it started.

Clarifies the reason for flat Q3 volumes and the company's exposure to the US market (10% of revenue), attributing the pause to tariff uncertainty.

Asked by Kaushal Sharma

US Tariff Rate on Mango Pulp Direct
It was at the peak time it was 50%, because including the additional tariff on Russian oil, 25%, so it was 50%. Now mango pulp had reduced to 25% but frozen category still continuing 50%. But with the recent development, it's likely to be 18% or 19%, but that formal notification yet to receive.

Provides specific tariff rates and the expected reduction, which could alleviate future uncertainty and unblock deferred US orders.

Asked by Kaushal Sharma

Strategic Partnerships & Middle East Expansion Partial
Venkatesh ji, we always keep on exploring all these options and a lot of things are actually going on in the company with respect to exploring options. But unfortunately, till the deal is signed, we might not be able to tell you anything on it.

Indicates ongoing M&A/partnership discussions, particularly with large retailers in the Middle East, but management is tight-lipped on specifics, suggesting potential material developments.

Asked by Venkatesh Ranganathan

Seasonality of Business & Quarterly Performance Direct
Quarter 3 is going to be very difficult because basically mango is a summer fruit and production happens in summer and basically our clientele is a juice manufacturer and generally especially in India, not necessarily around the world, but in India it's a summer drink and not necessarily a winter drink. So our typical contract goes over 15 to 18 months and the call-offs do happen.

Explains the inherent seasonality of the business, particularly for mango products, and why quarter-on-quarter analysis might not be ideal, guiding investors to look at year-on-year performance.

Asked by Saket Kapoor

Pectin Project Commercialization & Revenue Potential Direct
As of now, we from the -- only couple of customers, we have some visibility that in the month of March, we may get some commercial order. But major customers are likely to come from the Q1 of next year.

Provides a timeline for initial commercial orders for the Pectin project, indicating that significant revenue is still some quarters away despite the investment.

Asked by Saket Kapoor

Tetra Recart Business Model & Export Focus Direct
Meantime we have changed our focus from India market to export market, where we are seeing that export market already very well aware about this product and easily acceptability. So we are able to gather a momentum which was temporarily paused since we are focusing in domestic market.

Explains the strategic shift in the Tetra Recart business from domestic to export markets due to better acceptance and momentum, aiming for quicker revenue recovery.

Asked by Saket Kapoor

Working Capital Increase & Non-Mango Inventory Direct
As you know, we are more focusing on non-mango business. Non-mango business means we are focusing on guava, tomato is a big bit, then chili, garlic, ginger, these are all seasonal. During the season, we have to produce. And that same stocks we need to hold for all of for next average next 6, 7 months and other than mango.

Clarifies that the increase in working capital is primarily due to the strategic shift towards non-mango seasonal products, which require inventory build-up during their respective seasons.

Asked by Kaushal Sharma

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance and Profitability Overview

Foods & Inns reported a steady Q3 FY26, with overall sales tonnage remaining flat, primarily attributed to deferred call-offs from US customers due to tariff uncertainty. Average realizations were lower year-on-year, reflecting sales from 2025 crop season inventory produced at significantly lower raw material costs. For the nine months ending December 31, 2025, revenue stood at INR580 crores, a decrease from INR610 crores in the previous year. Despite this, gross profit increased by 8.7% from INR216 crores to INR235 crores. However, EBITDA for the same period saw a decline of approximately INR10 crores, partly due to MTM forex losses and increased freight and operational expenses.

Strong Growth in Frozen Food Business

The frozen food business demonstrated robust growth momentum in Q3 FY26, with volumes increasing by approximately 35% year-on-year. For the nine-month period, volumes were up around 37% year-on-year. This growth was driven by improved realizations from value-added products within the frozen category. The company successfully commenced supplies to two large, financially strong airline customers during the quarter and remains optimistic about sustained global demand growth in this segment for the next 3 to 4 years.

Strategic Initiatives and Capacity Expansion

In line with its focus on scalable and differentiated platforms, Foods & Inns initiated a spray drying capacity expansion of 120 metric tons per annum, with construction already in progress. The company is also advancing its international expansion in Tetra Recart, which generated around INR5 crores in revenue for the first nine months of FY26, with expectations of 5-6x volume growth next year. Further investments include automation, solar energy at its Vankal and Gonde plants, and the Pectin project, all aimed at enhancing efficiency, sustainability, and long-term value creation.

Pectin Project Progress and Commercialization Timeline

The Pectin project, which involved an investment of INR12-13 crores, is a high-end product with a significant market potential in India (INR350-400 crores). While the company has submitted samples and is awaiting commercial orders, significant sales are not expected until next year onwards, with initial commercial orders from a couple of customers anticipated in March. This delay is attributed to the extensive testing and formulation changes required by large clients, as Pectin is used in minimal quantities and requires thorough validation.

US Market Dynamics and Tariff Impact

The US market constitutes approximately 10% of the company's overall annual volume. Q3 FY26 sales tonnage was impacted by deferred call-offs from US customers due to uncertainty surrounding tariffs. Historically, mango pulp tariffs peaked at 50%, then reduced to 25%. With recent developments, the tariff rate is expected to further decrease to 18-19%, pending formal notification. Management noted that customers were willing to absorb some tariff impact, and with clarity on refunds, dispatches are expected to resume soon.

Debt and Working Capital Management

The company's total debt stands at approximately INR460 crores, comprising both long-term (INR50 crores) and short-term working capital. Working capital increased from INR360 crores to INR410 crores, primarily due to inventory build-up for non-mango seasonal products like guava, tomato, chili, garlic, and ginger, which require stocking for 6-7 months. The cost of debt ranges from 9.2% to 9.8%, and the company holds a BBB rating from CRISIL. Approximately INR20 crores of long-term debt was repaid year-on-year.

PLI Incentive and Tomato Business Update

The application for FY25 PLI incentive claims has been submitted, and the company is awaiting disbursement, which is expected soon. Management anticipates the FY26 PLI income to be similar to or slightly higher than the INR25 crores received in FY25. For the tomato business, crop procurement commenced with a slight delay but is progressing. The company has already achieved INR55 crores in revenue from tomato paste and related products over three quarters and expects a potential 20% increase, though specific order book figures were not disclosed due to ongoing negotiations and industry practice.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Fast Moving Consumer Goods earnings calls