Mishtann Foods - Mishtann Foods

📊 BSE: 539594 🏢 Packaged Foods 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Overall revenue grew 41.98% in FY22 to INR 498.51 Cr. Q2 FY25 total income reached INR 341.89 Cr, representing a 17.38% increase YoY driven by robust demand for premium Basmati and salt varieties.

Geographic Revenue Split

Revenue is split between Domestic (India) and International (Middle East, Singapore). International operations in the UAE contribute significantly due to lower taxation (~1% effective rate) and higher margins on commodity trading.

Profitability Margins

PAT margins improved to 7.68% in FY23 from 6.32% in FY22. Q2 FY25 net profit stood at INR 106.57 Cr, reflecting a 21.89% YoY growth due to higher-margin rock salt sales and operational efficiency.

EBITDA Margin

EBITDA margin reached 31.70% in Q2 FY25 (INR 108.37 Cr), a significant increase from 12.69% in FY23 and 10.43% in FY22, driven by a shift toward premium products and cost management.

Capital Expenditure

The company has a planned outlay of INR 2,250 Cr for a 1000 KLPD ethanol facility in Gujarat, with Mishtann's direct contribution expected to be INR 100-125 Cr.

Credit Rating & Borrowing

Credit rating was IVR BBB/Stable (Long Term) and IVR A3+ (Short Term) as of July 2022; ratings were reaffirmed and withdrawn in August 2023 at the company's request. Total rated bank facilities were INR 70.00 Cr.

⚙️ Operational Drivers

Raw Materials

Paddy (Basmati and emerging varieties) accounts for the bulk of production expenses. Other materials include common salt, crystal salt, and rock salt (sourced from imported materials).

Import Sources

Paddy is sourced from Haryana and Rajasthan. Rock salt is sourced from imported materials (countries not specified). Ethanol project is located in Gujarat.

Key Suppliers

The company maintains a tacit arrangement with approximately 15,000 contract farmers primarily in Haryana and Rajasthan for regular paddy supply.

Capacity Expansion

Current rice processing capacity is supported by a state-of-the-art facility in Gujarat. Planned expansion includes a 1000 KLPD ethanol facility expected to be operational by mid-2026.

Raw Material Costs

Paddy procurement is the primary cost; even slight price variations drastically impact profitability. The company uses forward booking and inventory management to mitigate price fluctuation risks.

Manufacturing Efficiency

Precision processing technology in Gujarat ensures quality. Average bank facility utilization was 72.09% (Dec 2020 - June 2022), indicating sufficient cushioning.

Logistics & Distribution

Distribution is outsourced to a third-party company to manage 125,000 retailers, reducing internal operating costs and day-to-day logistical requirements.

📈 Strategic Growth

Expected Growth Rate

17-20%

Growth Strategy

Growth will be achieved through the mid-2026 operationalization of the 1000 KLPD ethanol plant, expanding the retailer base from 125,000 to 160,000, and penetrating high-margin markets in the USA and Singapore.

Products & Services

Premium Basmati rice, emerging rice varieties, wheat, edible common salt, crystal salt, rock salt, and black salt.

Brand Portfolio

Mishtann.

New Products/Services

Rock salt, black salt, and a planned 1000 KLPD ethanol production facility.

Market Expansion

Expansion into Eastern India, North Eastern India, USA, Singapore, and the UK. UAE operations are being scaled for global trading.

Strategic Alliances

Preliminary discussions for developing industrial parks and partnering with EV component manufacturers to diversify beyond FMCG.

🌍 External Factors

Industry Trends

Basmati shipments grew 20% in the first 10 months of FY24. The industry is shifting toward healthier, organic, and premium branded products.

Competitive Landscape

Highly competitive industry with global, pan-India, and regional players. MFL competes by leveraging price differentials in tier-2 and tier-3 towns.

Competitive Moat

Moat is built on a network of 15,000 contract farmers and a tax-efficient global structure (1% UAE tax), which provides a durable cost advantage over domestic-only competitors.

Macro Economic Sensitivity

Highly sensitive to monsoon patterns and agro-climatic conditions which dictate paddy yield and quality.

Consumer Behavior

Shift toward premiumization and innovative products like rock salt and organic varieties to meet healthier lifestyle demands.

Geopolitical Risks

Tensions in the Middle East (Iran/Iraq) may lead to shortages in other Gulf nations, potentially surging export orders and prices for Basmati rice.

⚖️ Regulatory & Governance

Industry Regulations

Subject to close government oversight regarding food production, supply, and distribution laws in India and export destinations.

Environmental Compliance

The ethanol project requires clearances from the Central Ground Water Board and local environmental authorities, which are currently being processed.

Taxation Policy Impact

Effective tax rate is approximately 1% due to operations governed by UAE rules. Indian corporate taxes are paid as per pertinent local laws.

Legal Contingencies

Management notes potential tax interpretation matters regarding UAE operations but asserts the company has the financial strength to handle any far-fetched demands.

⚠️ Risk Analysis

Key Uncertainties

High trade receivables of INR 824 Cr against a turnover of INR 724 Cr pose a significant liquidity and realization risk if not collected within the 3-6 month window.