Madhusudan Masa — Q4 FY25 earnings call

Call held 28 May 2025

Management summary

Madhusudan Masala Limited reported robust performance for FY25, with consolidated revenue of INR 230 crores and standalone revenue growth of 33%, largely volume-driven. The company successfully maintained its EBITDA margin at 10.8% while strategically increasing branded sales and optimizing capacity utilization. Key initiatives include expanding distribution in new states and growing e-commerce presence, alongside managing inventory for quality and price benefits.

Highlights

  • Consolidated revenue for FY25 was INR 230 crores, with standalone revenue at INR 216 crores.

  • Standalone revenue growth was 33% for FY25, primarily driven by a 36-37% volume growth.

  • EBITDA margin was maintained at 10.8% for FY25, despite new market entry expenses.

  • Branded sales mix improved to over 62% of total sales in FY25, compared to 56% in the previous year.

  • Both the Jamnagar unit (4,800 metric ton capacity) and the Vitagreen unit (600 metric ton capacity) achieved 82% capacity utilization in FY25.

  • Expanded e-commerce presence across Amazon, Jiomart, Flipkart, and Miso, now receiving over 300 orders per day.

Concerns

  • Non-branded trading business, which has a lower margin of 4%, constituted 38% of sales in FY25, though management aims to reduce this.

  • Inventory levels are strategically high due to seasonal procurement (70% of next year's requirement) but require significant working capital.

  • A contingent liability of INR 10 crores from the trading business for FY24 was noted, related to receivables from merchant exporters, though collaterals are in place.

Key financials

  1. Revenue (Consolidated) ₹230 Cr
  2. Revenue (Standalone) ₹216 Cr
  3. Standalone Revenue Growth 33% +33%YoY
  4. EBITDA Margin 10.8% -0.1%YoY
  5. Branded Sales % of Total 62% +10.7%YoY
  6. Non-branded Sales % of Total 38% -17.3%YoY

What they filed

Q1 FY27: revenue up 34.5%, net profit up 55.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue70 63 73 73 45 −35%76 +20%97 +33%98 +34%
EBITDA8 5 7 8 7 −13%8 +80%11 +50%11 +47%
Net profit4 2 6 4 3 −16%5 +104%6 +8%7 +56%
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

  • Ground Spices
    15% Margin
  • Blended Spices
    25% Margin
  • Whole Spices
    8% Margin
  • Grocery Products
    12% Margin
  • Trading Business
    4% Margin

Capital allocation

high confidence
  • M&A Vitagreen Products Private Limited Acquisition · Closed · Consideration ₹7.75 Cr

    To expand product portfolio, manufacturing capabilities, and geographical presence, particularly in blended spices and instant mix products.

    Contributed to 3.5% of blended spices business (up from 1%) and added 600 metric ton capacity, utilized at 82%. An exceptional item of INR 3 crores was recorded from the sale of land not acquired by Madhusudan.

    we acquired 100% equity stake in Vitagreen Products Private Limited. (page 4); we acquired Vitagreen in INR7.75 crores, 100% from its promoter. (page 16); this INR3 crore exceptional item is actually the balance sheet of Vitagreen when we acquired it, at that time, the portion of land building was not procured by us. (page 16)

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · FY26 · High confidence 30% minimum
    As per our projection it will be 30% minimum.

    — Rishit Kotecha

  • Standalone Revenue Growth Revenue · FY26 · High confidence 30% minimum
    It will be the same for standalone also.

    — Rishit Kotecha

  • Vitagreen Revenue Growth Revenue · FY26 · High confidence 30% to 40%
    We have more expectations from Vitagreen. So there we have a projection of 30% to 40% for this year.

    — Rishit Kotecha

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 11-11.5%

    From 10.8% today

    So this 11% will be maintained for the next year as well, we are sure of that. (page 12); See, for EBITDA the target that we are taking is 11%, our 11%, 11.5% target, we are taking that because our category-wise margins in ground spices, we have a margin of 15%. (page 13)

    — Rishit Kotecha

Business Mix

  • Trading Business Share Business Mix · FY26 · High confidence 30% to 35%

    From 38% today

    So next year, our trading business will be less than this. So where there is a low margin in our business, we will reduce it and increase the high margin category of our branded business. So our EBITDA will remain maintained. (page 8); our target is to maintain it between 30% to 35%. (page 13)

    — Rishit Kotecha

Distribution

  • New Distributors Distribution · next year · High confidence 30-35

    From 20 today

    For example, this year 20 distributors joined. So for next year we are taking the target of 30, 35 distributors.

    — Rishit Kotecha

Compliance

  • Quarterly Results Declaration Compliance · FY26 · Medium confidence From Q1 FY26
    Yes we are trying to declare quarterly and 99% we will try to give quarterly results from FY26. May be we can start from first quarter.

    — Rishit Kotecha

What to watch in Q1 FY26

Quarterly Results Declaration

Q1 FY26
Current Not declared quarterly in FY25
Target Quarterly results declared for Q1 FY26

Why it matters

Declaration of quarterly results will enhance transparency and provide more frequent updates on company performance.

Yes we are trying to declare quarterly and 99% we will try to give quarterly results from FY26. May be we can start from first quarter.

Risks & concerns

  • Competition in New Markets

    medium

    Entering new markets involves facing existing brands and competition, which requires strategic schemes for retailers and marketing activities.

    Management acknowledged

  • EBITDA Pressure from New Market Entry

    medium

    Initial expenses for marketing activities and staff in new markets can put a 'little pressure' on EBITDA, though this is managed by increasing sales of higher-margin branded products.

    Management acknowledged

  • Contingent Liability from Trading Business

    medium

    A contingent liability of INR 10 crores from FY24 relates to receivables from merchant exporters where payment is stuck, but management states collaterals are in place and expects it to clear this year.

    Analyst acknowledged

Q&A highlights

8 direct
H1 vs H2 Growth Pattern Direct
What is there is that our business is generally that first half is somewhat slow and second half is our season period. Marriages etc., are also in that period. So, our sales are good in H2 period. But last year, in the first half we had appointed new distributors, who were already connected with Vitagreen, in the North state. So, from there, due to the new distributor we got orders in August-September, due to that our H1, which generally we have a one-third, two-third ratio, last year end of first half we got good distributors from Northern state, so we got a good order from there. And in our non-branded business, the post-Diwali season of Ajwain and Corriander, that season was a little early. So, our sales of non-branded also was more in the first half. Due to that the one-third, two-third ratio shrunk and our sales in the first half were also good. So, due to this compared to '24, the H1 growth you must be seeing is less. But throughout the entire year we have achieved growth of 33%.

Clarifies the seasonal nature of the business and explains the unusual H1 growth in the previous year due to specific market entry and seasonal factors, setting expectations for a more typical 40-60 H1/H2 split in FY26.

Asked by Vijay Chauhan

Volume vs Value Growth in FY25 Direct
See, our volume growth has been more, because compared to last year, our main product is chili powder. So in chili powder, this year the price has been decreasing by 15% to 20%. So if we compare this quantity-wise, then we will see a growth of 10% to 12%. But this was set off somewhere with turmeric and coriander, cumin. So the price in turmeric has already doubled compared to last year. So our quantity-wise growth, this year our 33% volume growth is going to be around 36% or 37%.

Provides a crucial breakdown of the 33% standalone revenue growth, indicating that the majority (36-37%) was driven by volume, which is a high-quality growth driver, despite price fluctuations in key commodities.

Asked by Akshat Jain

Chili Price Outlook Direct
In the current season, the procurement that was going on, when the first crop came in the season, the price at that time, has now gone up by 10%, 15%. Because the carry forward stock was a big quantity because last year, the export of chili was very low. In Bangladesh, the majority goes from India. So there too, the export was low. It was also low in China. Because of that, the carry forward stock was big. So the new crop, the first crop, the price pressure was visible in that. But after that, it started getting so liquidated in the domestic market that when the second crop came, the price that was getting at the normal price, it stopped becoming available. And in good quality, there was a 15% hike. So now we feel that this year, this price should remain stable. There won't be a big jump in this. And there is no chance of going down.

Offers insights into input cost trends for a major product (chili), indicating a recent 10-15% price hike after initial pressure and an expectation of stability, which is important for margin forecasting.

Asked by Akshat Jain

Low Blended Spices Sales Share Direct
No, not even that much in blended. Earlier, we were at 1%, but after consolidating and with the arrival of Vitagreen, we have now reached 3.5%. So this can be called an achievement that we were able to do 3.5 times our blended spices business. But if we look at the value, then it's not a big amount. But in this category, we are doing a lot of work. In marketing initiatives and products, we are bringing a lot of new products and a lot of improvements in packaging and we are working on how to increase it further.

Addresses a potential concern about the low contribution of higher-margin blended spices, clarifying that it has grown significantly (3.5x) post-acquisition and is a focus area for future growth through product and packaging innovation.

Asked by Akshat Jain

Exceptional Item of INR 3.1 crores Direct
Okay, in consolidated, yes, the Vitagreen that we acquired, we acquired Vitagreen's fixed assets like its plant, but we did not acquire its land building. So, our previous promoter took the land in the name of the company. So this land was in the name of Vitagreen. So Vitagreen transferred it as a sale deed in the name of another company of the promoter. So, because of long-term capital gain, this INR3 crores is that.

Explains a one-time, non-recurring exceptional gain of INR 3.1 crores, clarifying it as a long-term capital gain from a land sale related to the Vitagreen acquisition, ensuring it's not misconstrued as operational profit.

Asked by Darshil Jhaveri

High Inventory Levels and Strategy Direct
Inventory levels, for next year, our sales target is according to that we keep on procuring it in the season. Because the season is generally between January and March. So if our target for next year is something, then according to that we procure it in the current year and keep it. Almost 70% of our procurement happens in the season. So next year we are taking the target to match that target. And this year the quality and the stability of the price that we can see, we have increased our procurement this year.

Justifies the high inventory levels as a strategic move to procure 70% of raw materials during the season (Jan-Mar) to ensure quality and price stability for the entire year, linking it directly to sales targets.

Asked by Tanay Shah

Vitagreen Working Capital and Receivables Direct
Yes, in Vitagreen, the receivables are of INR11 crores. And in Madhusudhan, it is of INR36 crores. In Vitagreen, when we acquired some raw materials, there were some raw materials which we were not able to use for quality concerns. So we did a bulk sale of INR4.5 crores. So my payment was pending in Vitagreen. So it showing a large amount of receivable.

Clarifies the high receivables for Vitagreen, attributing INR 4.5 crores to a bulk sale of raw materials with quality issues, which was a one-off event, addressing concerns about working capital efficiency.

Asked by Vaibhav Kapoor

New Market Entry Strategy and Retailer Conviction Direct
Your second question is when we enter a new region, why will the retailer let us enter there? So, for that, the margins that you mentioned is our first tool to provide a healthy margin to convince them. And secondly, the appointment of distributors is different from other companies. We identify such distributors who only work on spices and not the entire FMCG product. They only know about spices and are knowledgeable about spices that if they go to a retailer, they will buy the product on their relationship. So our first attempt is to appoint such a distributor who is well-connected with the spices industry and has been in the market for a long time. So, it becomes easier to convince the retailer.

Details the company's strategy for gaining shelf space in new markets, focusing on offering attractive margins (30% for retailers, 9% for distributors), providing 45-day credit, and leveraging specialized, well-connected distributors.

Asked by Resha Mehta

2 min read 6 chapters

Detailed narrative

FY25 Performance and Growth Drivers

Madhusudan Masala Limited achieved a consolidated revenue of INR 230 crores for FY25, with standalone revenue reaching INR 216 crores. The company reported a strong standalone revenue growth of 33%, primarily driven by a significant 36-37% increase in volume. This growth was achieved despite a 15-20% decrease in chili powder prices, which was offset by a doubling of turmeric prices and increases in coriander and cumin prices.

Strategic Market Expansion and Distribution

The company is actively expanding its geographical presence beyond Gujarat and Maharashtra, having entered northern states like Chandigarh, Uttar Pradesh, Jammu Kashmir, and Punjab, leveraging the acquired Vitagreen network. For FY26, the plan includes covering Rajasthan, Madhya Pradesh, and Jharkhand. Marketing initiatives involve deploying shop facias, free sampling, dealer distribution expansion, and seasonal advertising, with a target of adding 30-35 new distributors next year, building on the 20 added in FY25.

Product Portfolio and Manufacturing Efficiency

Madhusudan Masala operates with four brands: DOUBLE HAATHI (premium), MANTAVYA, MAHARAJA (economy), and 77 GREEN (from Vitagreen). The Jamnagar manufacturing unit, with a capacity of 4,800 metric tons, achieved 82% utilization in FY25. The acquired Vitagreen unit in Rajkot, with a 600 metric ton capacity, also reached 82% utilization, focusing on blended spices and instant mix products. The company's strategy involves procuring 70% of raw materials during season (Jan-Mar) to ensure quality and price benefits.

Margin Management and Business Mix

The company successfully maintained its EBITDA margin at 10.8% for FY25, slightly down by 0.1% from the previous year. This was achieved by strategically reducing the share of lower-margin non-branded trading business from 46% last year to 38% in FY25, with a target to further reduce it to 30-35% in FY26. Higher-margin branded sales now account for over 62% of total sales, up from 56% previously, contributing to margin stability despite new market entry costs.

Inventory and Working Capital Strategy

Madhusudan Masala maintains high inventory levels, procuring approximately 70% of its raw material requirements during the seasonal period (January to March) to secure good quality and favorable prices. This strategy ensures stock availability for the entire year. While this leads to higher inventory, it is deemed necessary for business continuity and price stability. The company also clarified that a significant portion of Vitagreen's receivables (INR 4.5 crores) was due to a bulk sale of raw materials with quality concerns, which was a one-off event.

E-commerce and Digital Presence

The company has significantly expanded its e-commerce presence, listing products on major platforms like Amazon, Jiomart, Flipkart, and Miso. This initiative, launched six months prior, has seen substantial growth, with daily orders increasing from 4-5 to over 300 across these platforms. While the volume from e-commerce is not yet a large percentage of total sales, it is contributing to brand visibility and customer reach across India.

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