💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 17.5% YoY to INR 15,716.59 lakhs in FY25. The Non-vegetarian segment remains the primary driver, contributing 96.3% of total revenue, while Vegetarian and Plant-based segments contributed 2.8% and 0.9% respectively. The company targets a 20% revenue increase for the existing non-vegetarian facility in FY26, aiming for INR 180-185 crores.

Geographic Revenue Split

Domestic sales account for 100.0% of revenue as of FY25. The company currently has no export revenue (0.0%), though it aims to expand to international markets in the near future through the Allana JV and new product lines.

Profitability Margins

Gross margins were impacted by a 30% shift in product mix toward hand-cut/artisan products, which grew from INR 10 crores to INR 46 crores in revenue but carried higher initial acquisition and production costs. Net profit before tax slightly decreased by 2.9% from INR 855.87 lakhs in FY24 to INR 830.95 lakhs in FY25 due to these higher acquisition costs and investments in manpower.

EBITDA Margin

Operating profit before capital changes stood at INR 1,132.27 lakhs (approximately 7.2% margin) in FY25, compared to INR 1,217.92 lakhs in FY24. The margin compression was driven by a INR 60 lakh cost for customer trials, R&D, and sampling for new artisan product lines.

Capital Expenditure

Planned CAPEX includes INR 45 crores (INR 4,500 lakhs) for the Allana JV facility in Aurangabad and approximately INR 24.11 crores for the new vegetarian manufacturing facility (Plant II). As of March 2025, INR 22.92 crores of IPO proceeds had been utilized for setting up manufacturing facilities.

Credit Rating & Borrowing

Long-term borrowings increased by 190% to INR 358.18 lakhs in FY25 from INR 123.51 lakhs in FY24. Finance costs rose 43% YoY to INR 122.70 lakhs, reflecting increased debt utilization for expansion projects.

⚙️ Operational Drivers

Raw Materials

Chicken is the primary raw material (estimated >70% of RM cost), followed by edible oil and vegetables such as onions. Chicken and oil are managed through annual contracts and 4-5 month long-term tie-ups to stabilize costs.

Import Sources

Sourced domestically within India, primarily through annual contracts with suppliers to mitigate the volatility of agri-commodity prices.

Key Suppliers

Not specifically named in the documents, but the company utilizes long-term tie-ups for oil and annual contracts for chicken and other major ingredients.

Capacity Expansion

Current non-vegetarian capacity is 5,562.5 MT/year. Expansion includes a new 16,000 MT/year vegetarian facility (Plant II) targeted for commissioning by August 2025 and a 7,000 MT/year JV facility with Allana Group expected to be operational by Q3 FY26.

Raw Material Costs

Cost of materials consumed rose 21.4% to INR 11,630.43 lakhs in FY25, representing 74% of revenue. The company uses annual pricing contracts with both suppliers and QSR customers to pass through costs, though extreme chicken price spikes can temporarily squeeze margins.

Manufacturing Efficiency

The company is transitioning from handmade artisan products to automated lines (e.g., imported cutting lines) to rationalize manpower costs and improve margins as volumes stabilize.

Logistics & Distribution

Distribution network includes 31 distributors across 40 cities, serving 316 QSR locations. Logistics costs are part of the operational overhead supporting a 17.5% revenue growth.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth will be driven by a 4X revenue target by FY28-29 through three pillars: 1) 20% growth in core chicken QSR business, 2) Commissioning of the 16,000 MT vegetarian plant (INR 200-210 Cr potential), and 3) The Allana JV (INR 180-190 Cr potential) focusing on meat exports and domestic RTE products.

Products & Services

Frozen and ready-to-eat (RTE) processed foods including chicken nuggets, patties, deli slices, rice bowls, empanadas, handmade samosas, and plant-based snacks.

Brand Portfolio

Chatha Foods Limited (CFL).

New Products/Services

Recent launches include rice bowls, sweet empanadas for a large Chinese fast-food chain, and a premium snacking range for cinema chains (PVR). New vegetarian patties for a large burger chain are currently in trials.

Market Expansion

Expanding from B2B QSR focus to include the foodservice sector (hotels/cafes) and international markets via the Allana JV. Target regions include 40 domestic cities and future meat exports.

Market Share & Ranking

Not disclosed as a specific percentage, but identifies as a leading supplier to major domestic and international QSRs in India.

Strategic Alliances

Joint Venture with Frigorifico Allana Pvt Ltd (Allana Group) titled 'Allana CF Foods Pvt Ltd' (70% CFL ownership) to produce RTE/RTC meat products for domestic and export markets.

🌍 External Factors

Industry Trends

The QSR industry is shifting toward 'artisan' or handmade-style products. CFL is positioning itself by investing in handmade production that later transitions to automated efficiency as volumes scale.

Competitive Landscape

Key competitors include Darshan Foods (Gurgaon), Venky's, Sneha Farms, and Square Meal (Bangalore).

Competitive Moat

Moat is built on deep B2B integration with QSR giants (Dominos, Subway), involving long-term R&D cycles (6-12 months) and NDAs on customized SKUs, making it difficult for competitors to displace them.

Macro Economic Sensitivity

Sensitive to food inflation and agri-commodity cycles, particularly chicken and vegetable prices, which affect the cost of materials (74% of revenue).

Consumer Behavior

Increasing demand for 'frozen-to-fry' convenience and vegetarian/plant-based options in QSR menus, prompting CFL's massive capacity expansion in the vegetarian segment.

Geopolitical Risks

Potential trade barriers for meat exports which the Allana JV intends to navigate using Allana's existing global distribution network.

⚖️ Regulatory & Governance

Industry Regulations

Subject to FSSAI standards and meat processing regulations; the Allana JV specifically targets international export standards for meat products.

Environmental Compliance

Operates state-of-the-art hygienically prepared food facilities; compliance costs are integrated into general manufacturing overheads.

Taxation Policy Impact

Effective tax rate reflected in the provision for deferred tax liabilities which decreased from INR 244.88 lakhs to INR 212.17 lakhs in FY25.

Legal Contingencies

No major pending litigation or court cases disclosed in the provided financial statements or transcripts.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the successful commissioning and ramp-up of the new vegetarian plant (16,000 MT) and the Allana JV, which represent a massive jump from current 5,562 MT capacity.

Geographic Concentration Risk

100% of current revenue is from the Indian domestic market, with a focus on urban centers served by major QSR chains.

Third Party Dependencies

High dependency on the Allana Group for the success of the export strategy and on Dominos/Subway for nearly 68% of total revenue.

Technology Obsolescence Risk

Risk of manual artisan processes becoming uncompetitive; mitigated by the planned transition to imported automated cutting and processing lines.

Credit & Counterparty Risk

Receivables nearly doubled in FY25 (from INR 1,515 lakhs to INR 2,940 lakhs); management is actively working to bring the cash conversion cycle down to 50-55 days.