Summary
Foods & Inns Ltd. - Q3 FY26 Earnings Call Summary Friday, February 13, 2026, 4:00 PM
Event Participants
Executives 3 Anand Krishnan (CFO), Milan Dalal (Managing Director), Moloy Saha (CEO)
Analysts 4 Deepali Kumari (Arihant Capital), Kaushal Shah (Individual Investor), Kaushal Sharma (Equinox Capital), Saket Kapoor (Kapoor & Co), Venkatesh Ranganathan (Banana Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (9M FY26) | ₹580 crores | -4.7% YoY; impacted by lower average realizations due to pass-through of lower raw material costs. |
| PBT (9M FY26) | ~₹12 crores | -40% YoY; impacted by MTM forex losses on hedged exports and higher freight/operational costs. |
| Gross Profit (9M FY26) | ₹235 crores | +8.7% YoY; absolute gross margins remain protected through raw material cost pass-through model. |
| Frozen Food Volume | 35% Growth | Strong momentum in Q3; 9M FY26 volumes up 37% driven by value-added products and airline clients. |
| Net Debt | ~₹460 crores | Increased from ₹360 crores YoY; driven by higher inventory for non-mango seasonal procurement. |
| Long-Term Debt | ₹50 crores | Reduced by ~₹20 crores YoY; primarily relates to PLI 1.0 and tomato plant capex. |
| PLI Incentive (FY24) | ₹25 crores | Received in FY25; FY25 claim submitted and awaiting imminent disbursement. |
Geographic & Segment Commentary
- US Market: Represents 10-12% of annual revenue; currently facing temporary “call-off” delays due to tariff uncertainty (peak 50%, expected to settle at ~18%). Management noted no order cancellations and expects a clearing of the backlog following clarity on US tariff refunds.
- Middle East & Russia: Strong traction in Russia for B2C brands; Middle East expansion initiated through airline partnerships and large retailers. Specifically, the company has maintained a 45-year relationship with Lacnor in the UAE for mango pulp.
- Frozen Foods: Currently running at near 100% capacity in Nashik (three shifts) for snacks and Indian breads. Volume growth remains robust at 35%+ YoY with new supplies commenced to two financially strong airline customers.
Company-Specific & Strategic Commentary
- Product Diversification: Shifting focus from Mango-dominant (74%) to a target mix of 60% Mango / 40% Non-Mango (Guava, Tomato, Garlic, Ginger) to reduce seasonality.
- Pectin Project: ₹12-13 crore investment for “waste-to-wealth” circular economy; currently in long-cycle formulation testing with MNCs. Commercial orders are expected to scale in FY27 with a single-shift revenue potential of ₹15 crores.
- Tetra Recart: ₹30 crore investment in eco-friendly packaging; currently at low utilization (₹5 crore 9M revenue). Management pivots focus to export markets (Russia, Europe) where awareness is higher, targeting 5x-6x growth next year.
- Spray Drying: Expanding capacity by 120 MTPA at Gonde; currently 100% utilized supplying seasonings to MNCs like PepsiCo (Lay’s), Unilever, and ITC.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Growth | 10% - 15% (Internal Target) | Absolute growth target (not margin %) for both Gross Profit and EBITDA. |
| Q4 FY26 Performance | Higher Volumes | Historically the strongest quarter; expected to recover revenue/profit gaps from previous nine months. |
| Pectin Utilization | 70% - 75% by FY27 | Based on expected conversion of current MNC lab approvals into commercial contracts. |
Risks & Constraints
| Risk | Context |
|---|---|
| Seasonality & Working Capital | High dependence on summer crops leads to quarterly volatility; non-mango expansion currently increases inventory holding and debt. |
| Commodity Pricing | Mango and Tomato are pure pass-through; while absolute margins are fixed, revenue fluctuates based on raw material price cycles. |
| Regulatory/Tariffs | US reciprocal tariffs (up to 50%) caused “deferred call-offs,” though management expects recent trade negotiations to lower these to ~18%. |
Q&A Highlights
Financial Performance & Debt
- Question: Why has profitability dipped despite lower interest costs? (Saket Kapoor)
- Answer: MTM forex losses from rupee depreciation and increased operational/freight costs impacted the 9M results. However, absolute gross profit grew 8.7%, and Q4 is expected to close the gap (Anand Krishnan).
- Question: Clarify the high short-term debt of ₹410Cr despite lower mango prices. (Kaushal Sharma)
- Answer: Debt is higher because the company is holding high-value 2024 mango inventory while simultaneously building stocks for the expanding non-mango (tomato/garlic) businesses (Moloy Saha).
Tomato & Pectin Business
- Question: What is the status of the tomato order book given the crop delay? (Venkatesh Ranganathan)
- Answer: ₹55 crores executed in 9M; expect another 20% in Q4. Final pricing for industrial contracts is only crystallized post-season (Milan Dalal).
- Question: Why is the Pectin revenue taking so long to materialize? (Natasha Singh)
- Answer: MNCs require 6-7 months for consumer testing and formulation changes as Pectin is a critical high-end ingredient; commercial scale-up is expected in FY27 (Moloy Saha).
Strategic Partnerships
- Question: Are there any new strategic partnerships in the pipeline? (Venkatesh Ranganathan)
- Answer: Signed two large airline customers for frozen foods; currently exploring further strategic options and partnerships with Middle East retailers (Anand Krishnan).
Key Takeaway
Foods & Inns Ltd. reported a steady Q3 FY26, albeit with revenue and PBT pressure due to lower commodity realizations and MTM forex losses. While 9M FY26 revenue fell 4.7% to ₹580 crores, absolute gross profit grew 8.7%, reflecting a successful pass-through model. The company is aggressively diversifying away from mango (currently 74% of mix) into high-margin segments like Frozen Foods (35% volume growth) and Spray Drying (capacity expanding by 120 MTPA). Despite temporary US tariff hurdles and a delayed tomato crop, management maintains a positive outlook for Q4 FY26, citing strong demand from new airline clients and a healthy Totapuri mango flowering season. The long-term strategy hinges on “waste-to-wealth” via the Pectin JV and scaling Tetra Recart packaging in export markets, with internal targets of 10-15% absolute EBITDA growth as these platforms mature.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: