MADHUSUDAN - Madhusudan Masa

📊 NSE: MADHUSUDAN 🏢 Food - Processing - Indian 📅 Last Updated: 12/14/2025 9:25

💰 Financial Performance

Revenue Growth by Segment

Standalone revenue for H1FY26 grew 18.7% YoY to INR 118.22 Cr. Branded products are the primary growth driver, with management targeting a contribution of 70-75% to total revenue in FY26, up from 66% in FY25. Branded sales are split into Ground Spices (45%), Whole Spices (35%), and Blended Spices (13%).

Geographic Revenue Split

The company operates primarily within India with no separate reportable geographical segments. Operations are concentrated in Gujarat, with manufacturing facilities located in Jamnagar and Rajkot.

Profitability Margins

Gross margins for the spices business are approximately 18%, which is lower than the 30% seen in some SME peers. Net Profit Margin for H1FY26 was 6.5%, a slight decrease of 8 bps YoY from 6.6% in H1FY25.

EBITDA Margin

EBITDA margin for H1FY26 stood at 11.9% (INR 14.06 Cr), an improvement of 52 bps YoY. Management targets an annualized EBITDA margin of 12-13% for FY26 as the mix of high-margin branded products increases.

Capital Expenditure

The company is expanding its total manufacturing capacity from 10,800 MT to 12,000 MT. Capital expenditure on fixed assets for H1FY26 was INR 1.85 Cr.

Credit Rating & Borrowing

CRISIL assigned a 'BBB-/Stable' rating to INR 75.3 Cr of bank debt in August 2025. CARE Ratings upgraded the long-term rating to 'BB+; Stable' in April 2025. Interest Service Coverage Ratio (ISCR) for H1FY26 was 4.32x.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include agricultural commodities such as whole spices and ground spices. Cost of goods sold (COGS) increased in FY25, which pressured overall ratios.

Import Sources

Sourced primarily from agricultural supply chains within India, particularly Gujarat, though the company faces regulatory scrutiny for exports (e.g., ETO contamination alerts).

Capacity Expansion

Current installed capacity is 10,800 MT (Jamnagar: 4,800 MT; Rajkot: 6,000 MT). Planned expansion will increase total capacity to 12,000 MT to support a 30% CAGR target.

Raw Material Costs

Raw material costs are a significant portion of the 82% total expenditure. The business is vulnerable to price volatility and seasonality of agricultural commodities.

Manufacturing Efficiency

The company operates two facilities in Gujarat. Efficiency is being driven by a shift toward premium branded offerings and disciplined order intake.

Logistics & Distribution

The company is penetrating newer geographies by adding dealers; advertisement expenses for brand building reached INR 1.25 Cr during the peak season.

📈 Strategic Growth

Expected Growth Rate

30%

Growth Strategy

The company aims to achieve a 30% CAGR over the next 3-5 years by increasing the branded product mix to 75%, expanding capacity to 12,000 MT, and focusing on high-margin categories like premium blends and organic spices.

Products & Services

Ground Spices, Whole Spices, Blended Spices, and other food products sold under 500+ SKUs.

Brand Portfolio

Double Hathi, Maharaja, Mantaya, and 77 Green.

New Products/Services

Focusing on premium blends, organic spices, and health-oriented variants to drive margin improvement.

Market Expansion

Expanding into newer geographies through an increased dealer network and strategic reduction in low-margin trading volumes.

Strategic Alliances

Acquired Vitagreen Products Pvt. Ltd on July 26, 2024, to expand the consolidated portfolio.

🌍 External Factors

Industry Trends

The spice industry is shifting toward branded, hygienic, and ready-to-use products. MML is positioning itself to capitalize on this by increasing its branded mix from 66% to 75%.

Competitive Landscape

Faces intense competition from large FMCG players like ITC, Tata, Everest, and MDH, as well as unorganized local producers.

Competitive Moat

Durable advantages include a 40+ year brand legacy (Double Hathi), an entrenched marketing network, and integrated manufacturing facilities in Gujarat.

Macro Economic Sensitivity

Highly sensitive to agricultural cycles and monsoon performance due to the nature of raw material procurement.

Consumer Behavior

Rising consumer demand for hygienic and authentic spice products is driving the shift toward branded portfolios.

Geopolitical Risks

Increasing global checks and ETO contamination alerts pose risks to the export segment and require strict compliance.

⚖️ Regulatory & Governance

Industry Regulations

Increasing domestic and global regulatory scrutiny, particularly regarding ETO contamination alerts, requires strict adherence to manufacturing, testing, and labeling standards.