Madhusudan Masala Q1 FY26 Results: PAT up 227%, On-track FY26 Guidance

Strong guidance of 30% CAGR for next 3-5 years. Q1-26 performance ahead of FY26 guidance. Available at very attractive valuations with leeway for execution risks.

Money Muscle

Sep 01, 2025

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1. Spices & Food Products

madhusudanmasala.com | NSE - SME: MADHUSUDAN

Madhusudan Masala - not be suited for all:
Microcap - Market cap ~₹200 Cr
Limited Trading Volume - Entry and exit is a problem
Minimum Purchase = 1,000 stocks = ~₹1.4 lakh required to enter

Manufactures and markets a wide range of products under four brands – Double Hathi, Maharaja, Mantavya, and 77 Green (via Vitagreen acquisition).

Product Portfolio:

Ground Spices – chili, turmeric, coriander, cumin.
Blended Spices – garam masala, pav bhaji masala, biryani masala, sambhar, etc.
Whole Spices – coriander seeds, cumin, chili, fenugreek.
Grocery & Allied Products – hing, tea, kasuri methi, papad, pickles, soya product
Instant Mixes – dosa, idli, khaman, gulab jamun (via Vitagreen).

Market Presence:

Stronghold in Saurashtra (35% market share) and Gujarat (~5% share overall).
Long-term vision: build a pan-India spice brand with 1% market share in the Indian spice industry.

2. FY23–25: PAT CAGR of 63% & Revenue CAGR of 35%

Shift to branded spices from trading: Branded share 47% → 62% in FY25.
Portfolio widened: Entry into blended spices & instant mixes via Vitagreen acquisition.
Footprint expanded: From Gujarat-centric to presence in 7+ states.
Infrastructure built: New cold storage, second plant at Rajkot.
Distribution deepened: 25,000+ retail stores, e-commerce entry

3. FY25: PAT up 63% & Revenue up 42% YoY

Strong topline growth with stable EBITDA margins
High capacity utilisation (>82%) → expansion/capex need in coming years.
Geographic footprint widening beyond Gujarat/Maharashtra, supported by Vitagreen integration.

4. Q1 FY26: PAT up 141% & Revenue up 146% YoY

PAT down 26% & Flat Revenue QoQ

Growth driven by Vitagreen integration and expansion beyond Gujarat.
Margins stable at ~10% EBITDA despite higher marketing/expansion spend.

Capacity nearly full (>85% utilisation) → capex may be required in FY27.
Branded sales now 2/3 of total revenue, a positive for profitability trajectory.
Working capital heavy (high inventory & receivables) remains the key structural risk.
- Inventories: structurally high due to seasonal procurement model
- Trade Receivables: elevated due to 45-day distributor credit.
- Borrowings: High short-term debt ₹66.1 Cr vs a market cap of ₹200 Cr

5. Business Metrics: Return Ratios Muted by Capital Raise

Funds from IPO in FY24 followed funds through Preferential issue in FY25 muted returns

6. Outlook: 30% CAGR for 3-5 Years

6.1 FY26 Guidance — Madhusudan Masala

We have a projected five year sales target is 30%, and definitely we
will achieve the CAGR of 30% of CAGR for the next 3 to 5 years.
As per our projection it will be 30% minimum. It will be the same for
standalone also. We have more expectations from Vitagreen. So there
we have a projection of 30% to 40% for this year.
EBITDA can be maintained. Because when we enter a new market, then obviously, after the expense of marketing activities and staff, there can be a little pressure on EBITDA.
We are constantly reducing our non-branded trading business. So where
there is a low margin in our business, we will reduce it and increase
the high margin category of our branded business. So our EBITDA
will remain maintained.
We have a plan to cover Rajasthan, Madhya Pradesh and Jharkhand states in this FY26. Maybe we will start Rajasthan from the Q1 of FY26.

6.2 Q1 FY26 vs FY26 Guidance — Madhusudan Masala

Ahead of FY26 guidance on revenue growth

Strong Start vs FY26 Guidance:
- Q1 FY26 revenue was ₹75 Cr, in-line with ₹75 Cr/quarter run-rate needed for 30% growth.
- Traditionally, H2 is stronger than H1. Madhusudan Masala could potentially exceed the 30% growth guidance.
Strong Margins: EBITDA margin in-line with guidance range (10–11%).
Branded Sales Mix: At 67% in Q1 FY26, above FY25’s 62%

Madhusudan Masala’s Q1 FY26 performance is ahead of FY26 guidance on revenue growth, while margins and branded mix are exactly within expected ranges.

7. Valuation Analysis

7.1 Valuation Snapshot — Madhusudan Masala

CMP ₹138.5; Mcap ₹200.41 Cr

Attractive Forward Valuation:

Scope for valuation re-rating if growth trajectory sustains.
Valuations are undemanding — provide flexibility to sustain periods where performance is not as per guidance
Trades at a discount to FMCG peers and most branded food peers, reflecting regional scale and execution risks.

At ~10× FY26E earnings and <9× EV/EBITDA, which is attractive compared to larger FMCG peers. With 30% CAGR growth visibility, stable margins, and rising branded mix, the stock offers re-rating potential if execution in new geographies is successful. However, scaling up with the 30% momentum is a key risk.

7.2 Opportunities at Current Valuation

Attractive Forward Valuation: Trading at a discount, well below branded FMCG peers. Scope for re-rating if growth sustains.
Growth Visibility: 30% CAGR over 3-5 years — possibility to exceed FY26 guidance
Regional Strength: Strong in Saurashtra, now leveraging Vitagreen to expand in North & East.
Category Tailwinds: Growing consumer shift from unbranded to branded spices and convenience mixes supports long-term demand.

7.3 Risks at Current Valuation — Madhusudan Masala

Microcap Risk: May not grow into a small-cap; Illiquid, SME-listed; entry/exit difficult
Scale vs Valuation Gap: While valuations look cheap, discount may persist until Madhusudan demonstrates sustained growth outside Gujarat and builds a national brand.
Execution Dependence: Scaling outside Gujarat requires distributor build-up, marketing spends, and consumer acceptance.
Competitive Intensity: Faces national players (MDH, Everest, Aachi, Suhana) and entrenched regional players (Ramdev, Adani) — pricing and margin pressure possible.
Working Capital Heavy Model: High inventory and receivables → elevated short-term borrowings. Growth may strain cash flows further.
Commodity Price Volatility: Key inputs (chili, turmeric, coriander) subject to sharp seasonal swings, impacting gross margins despite storage strategy.