/** Title: Foods and Inns FY26: Lower realizations, stronger margins, and a push beyond mango */

Foods and Inns FY26: Lower realizations, stronger margins, and a push beyond mango

Foods and Inns ended FY26 with a mix of pressure and progress. Consolidated total income fell to Rs 880 crore from Rs 1,005 crore in FY25, reflecting a year where realizations dropped sharply and export dispatches faced disruption in the March quarter. Yet the company also reported an improvement in gross profitability, with FY26 gross margin rising to 39.1% from 33.6% in FY25, showing the impact of lower raw material costs flowing through the pass-through model.

For Q4FY26, total income was Rs 294 crore versus Rs 400 crore in Q4FY25, while EBITDA came in at Rs 45 crore (margin 15.4%) and PAT at Rs 19 crore. For the full year, EBITDA was Rs 112 crore and PAT Rs 28 crore. Management described FY26 as a challenging operating environment due to lower realizations, temporary disruptions in certain export markets, and lower tomato processing volumes because of constrained availability of quality tomatoes.

At the same time, Foods and Inns continued investing in newer verticals that can reduce dependence on mango and improve utilization across cycles. Frozen foods showed strong momentum, Tetra Recart order flow improved gradually, and the pectin project moved into commercial production.

FY26 performance: volumes up, realizations down

Foods and Inns reported FY26 sales tonnage of 102,072 MT compared to 98,399 MT in FY25. Domestic volumes increased to 74,216 MT from 72,254 MT, and export volumes to 27,855 MT from 26,145 MT.

However, revenue declined. The company attributed this largely to two factors. First, realizations fell due to sales of inventory manufactured in the 2025 crop season at substantially lower raw material costs. Second, Q4 dispatches were affected by the geopolitical situation in March, including vessel availability challenges that delayed shipments.

Management reiterated that pricing remains a direct pass-through of raw material movements. This makes tonnage growth a more reliable operating metric than revenue growth in any single year.

Financial snapshot

Segment mix: still pulp-led, but the diversification agenda is visible

The investor presentation shows a clear revenue concentration in Fruits and Vegetable Pulping, which contributed Rs 695 crore in FY26. Frozen foods, at Rs 92 crore, is the next meaningful vertical, while spray drying and spices and masala reported Rs 19 crore each. Tetra Recart RTE/RTC remains small at Rs 3 crore but is positioned as a capacity utilization and packaging-led growth option.

Management also shared an internal strategic intent on the call: over time, the company aims for non-mango businesses to contribute about 40% of total revenue without degrowing the mango business.

FY26 vertical revenue contribution

Operational updates: what moved during the year

Mango and the Middle East disruption

On pulps, management highlighted how conflict in West Asia diverted good-quality mangoes that are normally sold as table fruit into processing, at favorable prices during the season. The company stated its mango pulp business has exposure of about USD 2 million to Middle Eastern markets. While demand was temporarily affected, the company expects normalization and potential pent-up demand as conditions stabilize.

Tomato: constrained quality and lower production

Tomato paste production was lower during the season due to constrained availability of quality tomatoes, which affected processing volumes. On the call, management said they had around 9,000 MT of tomato stock with back-to-back orders, and discussed an estimated stock value of roughly Rs 70 to 75 crore expected to be dispatched.

Frozen foods: momentum continues

Frozen food volumes grew about 28% YoY in FY26. The company stated improved realizations due to a higher share of value-added products, and management cited growing demand from the US market. They also noted that the frozen segment has high supply chain and cold storage costs, which must be considered below the gross margin line.

Spray drying: capex plus a temporary disruption

Foods and Inns is adding 120 MTPA of spray drying capacity with an estimated investment of about Rs 2.5 crore. Management indicated commercial run is targeted for December. Operations in this segment were impacted during March and April 2026 due to unavailability of gas supply, which later normalized.

Tetra Recart: order book building, export focus

The company reported confirmed Tetra Recart orders of about 400 MT, valued around Rs 8 crore, with additional orders under discussion. On the call, management said they expect approximately Rs 20 crore business in FY27. They also discussed that the facility has capacity of around Rs 80 crore plus in product value terms.

Management acknowledged the ramp has been slower than desired, particularly in India where retort pouches are typically cheaper. The company is focusing on export markets, with management citing presence in markets such as the US, Germany, Finland and Canada.

PLI and efficiency: incentives and cost actions

A significant Q4 milestone was the recognition of the FY25 PLI incentive of Rs 33.86 crore. On the call, management stated cumulative PLI received is about Rs 83 crore, against total potential eligibility of about Rs 145 crore.

On energy, the company highlighted solar capacity additions at Vankal and Gonde. In the presentation, Vankal solar capacity addition was 1,263 kWp and Gonde total solar capacity was 1,850 kWp with newly added capacity of 1,350 kWp. On the call, management stated these solar projects were added in May and would begin usage in the coming months, and indicated a payback period of less than 3 years.

The company also mentioned investment in AI technologies for automation of production efficiencies and back-office processes, with savings expected to accrue progressively.

Pectin project: waste-to-value moves into commercial production

Foods and Inns described the pectin initiative as a circular economy project. Mango pulping generates significant waste, and the company has set up a JV facility in Chittoor, Andhra Pradesh to convert fruit waste into pectin, oils and butter.

On the call, management stated commercial production started about 7 to 8 days earlier after resolving teething issues. They indicated that at 50% utilization, revenue expectation is around Rs 7 to 8 crore, and gross margins are around 70% because raw material is derived from waste. Management also highlighted the import substitution opportunity: India imports a large share of its pectin requirements, with India import mentioned at about 350 MT versus the company capacity of 150 MT.

Guidance and what management is watching

The company did not provide margin guidance, repeatedly stating margins depend on product mix and raw material pass-through dynamics. However, management did give a volume growth outlook. Based on customer updates and the market scenario, management expects around 18% overall volume growth for FY27. They also noted that growth is expected to be driven by frozen foods and Tetra Recart.

Management also discussed the seasonal nature of the industry. Production runs from mid-April to early August for a large portion of volume, and export dispatches tend to move out uniformly through the year. They stated roughly 45% stock carries forward into the next year.

Key takeaways

FY26 was a reminder that Foods and Inns operates in a cyclical, commodity-linked, logistics-sensitive environment. Revenue fell sharply, PAT declined, and a few disruptions such as shipping availability and gas supply constraints played out in real time.

But it also showed how the company is building beyond mango. Frozen foods grew strongly, Tetra Recart is seeing repeat orders in export markets, the pectin project entered commercial production, and energy initiatives are being implemented for longer-term efficiency.

The most concrete forward indicator from management is the FY27 volume growth expectation of around 18%. Whether that translates into stronger profitability will depend on product mix, capacity utilization across newer verticals, and how smoothly the next crop and export cycle plays out.