💰 Financial Performance

Revenue Growth by Segment

Domestic sales witnessed strong growth, constituting 45.41% of total revenue in 9MFY2025 compared to 22.56% in FY2024. The India business is targeted to grow from INR 539 Cr in FY25 to INR 2,000 Cr by FY28, while the International business is projected to grow from INR 783 Cr to INR 1,500 Cr in the same period.

Geographic Revenue Split

In H1 FY26, Export revenue stood at INR 424.8 Cr (61.6% of operations) and Domestic revenue at INR 248.0 Cr (36.0%). This reflects a shift from FY25 where the mix was 59% International and 41% India.

Profitability Margins

PAT margins stood at 4.8% in H1 FY26, up 89 bps from 3.9% in H1 FY25. Historically, PAT margins were 4.5% in FY25 and 4.6% in FY24. The improvement is driven by higher price realizations and a shift toward higher-margin domestic packaged foods.

EBITDA Margin

EBITDA margin improved to 7.9% in H1 FY26 from 6.4% in H1 FY25, a 153 bps increase. Absolute EBITDA grew 25.8% YoY to INR 56.0 Cr in H1 FY26 from INR 44.5 Cr, driven by operational efficiencies and brand-led growth.

Capital Expenditure

The company has indicated an absence of major debt-funded capex over the medium term. However, it raised INR 136.5 Cr through share warrants to fund future growth and strategic investments like 10X Ventures.

Credit Rating & Borrowing

Acuité has reaffirmed a 'Stable' outlook. Total debt stood at INR 211.2 Cr as of September 2025, significantly reduced from INR 364.2 Cr in March 2025. Interest coverage ratio improved to 4.5x in FY25 from 3.5x in FY24.

⚙️ Operational Drivers

Raw Materials

Paddy and Basmati Rice are the primary raw materials, accounting for the bulk of the cost of goods sold. Other materials include wheat (for Atta), pulses (for Besan), and oilseeds.

Import Sources

Sourced primarily from domestic agricultural hubs in India, particularly Haryana (Panipat and Naultha) where milling plants are located, and Gujarat (Gandhidham) for export processing.

Key Suppliers

The company utilizes a network of 240+ suppliers. Purchases from trading houses accounted for 73.64% of total purchases in FY25, with the top 10 trading houses contributing 31.76% of those specific purchases.

Capacity Expansion

Current annual production capacity is 440,800 MT. This includes 3 milling plants (550 MT/day) and 9 Sortex plants (1,400 MT/day). Expansion is supported by 10 third-party manufacturing units with monthly capacities of 4,800 MT for Atta and 4,000 MT for Edible Oil.

Raw Material Costs

Raw material costs are highly sensitive to monsoon conditions. In FY24, while sales volumes declined, price realizations increased by 3.85%, helping to offset volume drops.

Manufacturing Efficiency

The company operates advanced facilities with GMP, ISO 22000, and US FDA certifications. Sortex capacity (1,400 MT/day) is nearly triple the milling capacity (550 MT/day), indicating a focus on high-quality finishing and export standards.

Logistics & Distribution

Distribution is handled through 125 distributors and a network of 103,000+ Kirana store touchpoints. Domestic sales are primarily managed through the subsidiary GRM Foodkraft Limited.

📈 Strategic Growth

Expected Growth Rate

36.50%

Growth Strategy

The company aims to reach INR 3,500 Cr revenue by FY28 by aggressively penetrating the Indian packaged foods market, launching Ready-to-Eat (RTE) and Ready-to-Cook (RTC) products, and acquiring niche margin-accretive businesses through its 10X Ventures arm.

Products & Services

Basmati rice, Spices, Atta (flour), Besan, Edible Oil, Ready-to-Eat meals, Ready-to-Cook products, and specialty coffee.

Brand Portfolio

10X, Himalaya River, Tanoush, and Rage Coffee (via 44% stake in Swmabhan Commerce Pvt Ltd).

New Products/Services

Recent launch of the 10X brand in 12 international countries and expansion into the digital-first coffee market via Rage Coffee. RTE and RTC products are expected to be major future contributors.

Market Expansion

Expanding 'Tanoush' brand into Georgia, Chile, and Morocco. Secured government orders in Oman and partnerships with Al-Naqeeb Group in Yemen.

Market Share & Ranking

Positioned as a prominent food FMCG player with a 5-decade legacy; specific market share percentage not disclosed.

Strategic Alliances

Acquired a 44% stake in Swmabhan Commerce Pvt Ltd (Rage Coffee). Partnered with 10 third-party manufacturers to expand Atta and Edible Oil production.

🌍 External Factors

Industry Trends

The industry is shifting from unbranded to branded packaged foods. GRM is positioning itself by moving from a pure rice exporter to a diversified FMCG player with a focus on 'digital-first' and 'lifestyle' brands.

Competitive Landscape

Competes with both domestic rice majors and global food FMCG companies. Differentiation is sought through niche acquisitions like Rage Coffee.

Competitive Moat

Moat is built on a 50-year brand legacy, a massive distribution network of 103k+ touchpoints, and established global supply chains. Sustainability is driven by the transition to high-margin branded consumer goods (10X brand).

Macro Economic Sensitivity

Highly sensitive to agricultural inflation and monsoon patterns which dictate raw material costs and availability.

Consumer Behavior

Increasing demand for convenience foods (RTE/RTC) and premium branded staples among Indian consumers is driving the company's domestic strategy.

Geopolitical Risks

Significant exposure to Middle Eastern countries; economic or political instability in this region poses a direct risk to the 61.6% export revenue share.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to food safety standards (FSSAI, US FDA, BRC), export-import policies on rice, and environmental norms for milling plants.

Environmental Compliance

The company monitors environmental and social impacts of products and processes as part of its NBRBC (National Business Responsibility and Business Conduct) reporting.

Taxation Policy Impact

Effective tax rate was approximately 23% in H1 FY26 (INR 10.1 Cr tax on INR 44.0 Cr PBT).

Legal Contingencies

The company reported zero disciplinary actions against Directors or KMPs for bribery or corruption in FY24 and FY25. No major pending litigation values were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Inventory price risk is a major uncertainty; a sharp drop in basmati prices could lead to significant write-downs on the INR 227.1 Cr inventory.

Geographic Concentration Risk

61.6% of revenue is derived from exports, with a heavy concentration in Middle Eastern markets.

Third Party Dependencies

Increasing reliance on 10 third-party units for the expansion of the Atta and Edible Oil segments.

Technology Obsolescence Risk

Risk is low in milling, but the company is proactively adopting 'digital-first' strategies to avoid obsolescence in consumer engagement.

Credit & Counterparty Risk

Trade receivables stood at INR 534.9 Cr as of Sep 2025, representing a significant portion of the balance sheet (61.8% of total assets), requiring strict credit monitoring.