Coromandel Agro Products and Oils Ltd Management Discussions

For the Financial Year 2025-26

1. This section shall include discussion on the following matters within the limits set by the listed entitys competitive position:

(a) INDUSTRY STRUCTURE AND DEVELOPMENTS

India is a geographically and culturally diverse nation, and consumer preferences for edible oils vary significantly across regions. Groundnut oil enjoys strong preference in the Southern and Western regions; mustard and rapeseed oils dominate the Eastern and Northern belts; while coconut and sesame oils continue to retain significance in parts of South India. Consumers in the northern plains have traditionally preferred Vanaspati, a partially hydrogenated blend of soybean, sunflower, rice bran, and cottonseed oils.

Over the years, advancements in modern refining technologies — including physical refining, bleaching, and deodorization — have transformed the edible oil industry by rendering oils practically colorless, odorless, and tasteless. These developments have facilitated greater interchangeability among oils across culinary applications and contributed to the emergence of a more integrated and homogeneous national edible oil market.

The global edible oil market continued its strong growth trajectory during FY2025-26. The global cooking oil market was valued at approximately USD 296.41 billion in 2025 and is projected to grow from USD 308.74 billion in 2026 to USD 378.54 billion by 2031, registering a CAGR of approximately 4.16% during 2026-2031. Asia-Pacific remained the dominant consumption hub with an estimated 52.70% market share in 2025, led primarily by China, India, and Indonesia.

Global oilseed crushing is forecast to rise by approximately 4% in 2026-27 to a record 607 million tons. The largest incremental growth is expected from Brazil and the United States, where crushing capacities are being expanded to meet increasing domestic biofuel mandates and export demand. Global oilseed stocks are also projected to reach a record 147 million tons, supported largely by recovery in sunflower seed production.

Indonesia and Malaysia continued to dominate global palm oil production, collectively accounting for nearly 83% of worldwide palm oil output during 2025. China, the United States and Brazil are remained major producers of soybean oil, while Canada and the European Union led canola oil production. Russia and Ukraine together continued to account for a substantial share of global sunflower oil output, although Ukraines production recovery remained below pre-conflict levels due to continuing geopolitical instability in the Black Sea region.

Indias edible oil market is projected to grow at a CAGR of approximately 3.52% during FY2025- FY2032, expanding from USD 19.86 billion in FY2024 to USD 26.19 billion by FY2032. Domestic oilseed production touched a new high of 42.609 million tons as per the Third Advance Estimates for 2024-25, surpassing the previous year by 29.40 lakh metric tons. This represents a positive structural development towards long-term self-sufficiency in edible oils, though domestic production still remains substantially below Indias overall edible oil demand.

The Government of India has continued to place strategic emphasis on enhancing domestic oilseed production in order to reduce import dependency and strengthen food security. In this direction, the Government has substantially increased the Minimum Support Prices (MSP) for major oilseed crops including mustard, groundnut, soybean, sunflower, and sesame. The enhanced MSP regime is expected to incentivize farmers to increase acreage under oilseed cultivation, improve domestic availability of oilseeds, and support the long-term objective of reducing dependence on imported edible oils.

(b) OPPORTUNITIES AND THREATS

I. Domestic Demand Drivers and Opportunities

India continues to remain the worlds largest importer of edible oils, while structural demand growth remains supported by rising disposable incomes, rapid urbanization, changing food habits, and sustained expansion in the processed food industry.

Consumer awareness regarding health and nutrition has emerged as a significant growth driver for the industry. Increasing incidence of cardiovascular diseases, obesity, diabetes, and lifestyle-related disorders has accelerated demand for healthier and nutritionally-enhanced edible oil variants, including cold-pressed oils, rice bran oil, canola oil, olive oil, and fortified oils enriched with vitamins, omega-3 fatty acids, and natural antioxidants.

The premium specialty oil segment — comprising extra virgin olive oil, sesame oil, flaxseed oil, avocado oil, and similar value-added categories — continues to witness robust growth, supported by evolving dietary preferences, international culinary exposure, and increasing purchasing power among consumers. Demand for cold-pressed oils has also increased steadily due to consumer preference for minimally processed products that preserve natural flavour and nutritional value.

The growing penetration of quick-service restaurants (QSRs), organised retail, and industrial food processing industries continues to drive edible oil consumption across institutional and commercial segments. Multi-purpose refined oils, particularly sunflower oil and soybean oil, continue to enjoy broad consumer acceptance owing to their versatility in cooking, frying, and baking applications.

A major structural opportunity for the industry during FY2025-26 has been the operationalisation of the National Mission on Edible Oils - Oilseeds (NMEO-Oilseeds), approved with an outlay of ^10,103 crore for the period 2024-25 to 2030-31. The mission aims to significantly enhance domestic oilseed production from 39 million tonnes in 2022-23 to 69.7 million tonnes by 2030-31 by promoting cultivation of rapeseed-mustard, soybean, groundnut, sunflower, sesame, cottonseed, rice bran, and tree-borne oilseeds.

Simultaneously, the National Mission on Edible Oils - Oil Palm (NMEO-OP) has substantially expanded oil palm cultivation, with total area coverage reaching approximately 6.20 lakh hectares by November 2025. Crude Palm Oil (CPO) production increased to approximately 3.80 lakh tonnes during 2024-25 compared to 1.91 lakh tonnes a decade earlier. Together, these initiatives aim to enable India to meet nearly 72% of its edible oil requirements through domestic production by 2030- 31.

The Union Budget 2025-26 further strengthened the Governments “Atmanirbhar Bharat” vision through enhanced allocations for oilseed development, launch of a National Mission on High-Yielding Seeds, and creation of over 600 value-chain clusters across 347 districts covering more than 10 lakh hectares annually through Farmer Producer Organisations (FPOs), cooperatives, and public-private partnerships.

Further, the Governments increase in Minimum Support Prices (MSP) for maj or oilseeds — including mustard, groundnut, soybean, Cotton and other oilseed crops — is expected to encourage higher cultivation, improve farmer income stability, and enhance domestic availability of oilseeds over the medium to long term. In addition, the continuation of 20% basic customs duty on crude edible oil imports provides supportive pricing conditions for domestic refiners and oilseed processors.

II. Geopolitical Risks and Threats

1. Iran-Israel Conflict and Strait of Hormuz Crisis

One of the most significant geopolitical developments impacting global commodity markets during FY2025-26 has been the escalation of the Iran-Israel conflict and the resulting disruption in the Strait of Hormuz — one of the worlds most critical energy and shipping corridors.

The disruption in shipping movements through the Strait of Hormuz resulted in severe volatility across global crude oil, LNG, freight, and commodity markets. The crisis significantly impacted global logistics, shipping insurance costs, bunker fuel prices, and vessel availability, leading to substantial escalation in transportation and procurement costs across industries.

India remains particularly vulnerable to such disruptions due to its high dependence on imported crude oil, LPG, LNG, and edible oils. Elevated crude oil prices, depreciation of the Indian Rupee, higher shipping costs, and inflationary pressures have materially increased the cost structure across the edible oil value chain.

The specific implications for the edible oil industry include:

Significant increase in freight and logistics costs due to vessel rerouting and higher war-risk insurance premiums;

Supply chain disruptions affecting global availability and shipment schedules of edible oils; Volatility in prices of soybean oil, sunflower oil, and palm oil;

Escalation in energy and processing costs impacting refining and packaging operations;

Inflationary impact on agricultural inputs including fertilisers and transportation;

Increased pressure on working capital requirements due to higher inventory and import costs.

These developments have created heightened uncertainty and volatility within global edible oil markets and may continue to impact pricing dynamics and supply chain stability in the near to medium term.

2. Continuing Russia-Ukraine Conflict

The prolonged Russia-Ukraine conflict continues to exert pressure on global vegetable oil markets, particularly sunflower oil supplies. Ukraine remains a major global exporter of sunflower oil, and despite partial recovery in production, supply levels remain below historical averages.

Persistent geopolitical uncertainty in the Black Sea region, elevated freight and insurance costs, and ongoing risks to export infrastructure continue to impact global sunflower oil trade flows and pricing dynamics.

3. Sino-US Trade Tensions

Continuing trade tensions between the United States and China have contributed to volatility in global soybean and agricultural commodity markets. Tariff escalations, retaliatory trade measures, and shifts in procurement patterns have created uncertainty in soybean oil pricing and global trade flows.

Further, trade-related developments involving Canadian rapeseed exports and Chinese anti-dumping investigations may potentially alter global canola oil trade patterns and influence international vegetable oil pricing structures.

4. Palm Oil Market Dynamics

Indonesias implementation of the B40 biodiesel mandate has materially increased domestic palm oil consumption for energy applications, thereby reducing availability for food usage and tightening global palm oil supplies.

In addition, ageing plantations, lower productivity levels, and tight inventory conditions in Indonesia and Malaysia are expected to keep palm oil prices structurally elevated over the medium term. Consequently, Indias palm oil imports are expected to remain under pressure as consumers and processors increasingly shift towards comparatively cost-effective alternatives such as sunflower oil and soybean oil.

Despite these challenges, Indias edible oil industry continues to demonstrate resilience, supported by strong domestic demand fundamentals, favourable long-term consumption trends, and sustained policy support from the Government towards enhancing domestic oilseed production and reducing import dependency.

(c) SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company presently operates across two principal business segments:

Seed Processing Segment, comprising cottonseed processing and edible oil production; and Wind Power Generation Segment.

Seed Processing Segment Cottonseed Procurement

Average cottonseed procurement prices continued their upward trajectory during FY2025-26, following the increase from ^27,530 per tonne to ^30,425 per tonne recorded in the previous year. The increase was primarily attributable to a tighter cottonseed supply environment arising from lower-than- expected national cotton production, which constrained raw material availability and elevated procurement costs across the industry.

In response to these market conditions, the Company adopted a disciplined and calibrated procurement strategy aimed at balancing inventory build-up with prevailing market price trends in order to optimize the spread between production costs and realized sales values. The Company continued to focus on prudent inventory management, procurement efficiency, and operational discipline to mitigate the impact of raw material price volatility.

Edible Oil Segment

The edible oil industry during FY2025-26 was influenced by a combination of domestic policy interventions and global geopolitical disruptions. The increase in basic customs duty on crude edible oil imports in September 2024 provided a degree of price support to domestic refiners and processors.

However, the Strait of Hormuz crisis during March 2026 significantly impacted global freight markets, energy prices, logistics availability, and overall supply chain stability. These developments resulted in substantial inflationary pressure across the edible oil value chain.

Despite the challenging operating environment, the Companys edible oil business benefitted from improved domestic price realizations during the year, although such gains were partially offset by higher raw material procurement costs, elevated freight charges, and increased energy expenses.

By-Products

De-oiled Cakes, Hulls and Linters

The by-product segment comprising De-oiled Cakes, Hulls, and Linters maintained a positive pricing trend during the financial year, supported by favorable market dynamics and improved demand from downstream processing industries.

During the year under review, the Company achieved a turnover of ^10,632.84 Lakhs as against ^15,905.46 Lakhs during the previous financial year.

Profit Before Tax (PBT) stood at ^415.39 Lakhs as compared to ^481.49 Lakhs during FY2024-25. Net Profit for the year amounted to 10.31 Lakhs as against ^376.48 Lakhs in the previous year.

Wind Power Generation Segment

The Companys wind power project located in Gujarat continued to encounter operational challenges arising from changing wind patterns and lower wind intensity in the region.

Revenue generated from wind power operations during the year stood at ^38.47 Lakhs as compared to ^34.78 Lakhs during FY2024-25.

The broader energy market disruptions arising from the Strait of Hormuz crisis — including fuel shortages and increased focus on renewable energy security — further reinforced the long-term strategic importance of the Companys renewable energy assets, notwithstanding the weather- dependent nature of near-term generation volumes.

OUTLOOK

Indias edible oil industry is expected to maintain a strong long-term growth trajectory, supported by favorable demographic trends, rising urbanization, increasing disposable incomes, and growing health consciousness among consumers.

The increasing consumer shift toward healthier, premium, fortified, and ethically sourced edible oil variants presents significant opportunities for organized sector participants willing to invest in quality enhancement, branding, product innovation, and distribution infrastructure.

The Government of Indias National Mission on Edible Oils (NMEO) framework represents one of the most comprehensive and well-funded policy initiatives undertaken to reduce structural dependence on imported edible oils. The combined outlay under NMEO-Oilseeds and NMEO-Oil Palm exceeding ^21,000 crore aims to substantially increase domestic oilseed production and meet nearly 72% of Indias edible oil demand domestically by 2030-31.

Successful implementation of these initiatives is expected to structurally strengthen Indias edible oil ecosystem, reduce exposure to global commodity market volatility, and improve long-term income sustainability for oilseed farmers.

In the near term, however, geopolitical instability arising from the Strait of Hormuz crisis and continuing global conflicts may continue to exert upward pressure on edible oil prices, freight costs, logistics expenses, and energy inputs. These developments reinforce the strategic importance of Indias efforts toward self-reliance in edible oil production.

Further, increasing investment in research and development of high-yielding and climate-resilient oilseed varieties, including genome-editing-based seed technologies supported under NMEO-Oilseeds, is expected to improve agricultural productivity and long-term supply stability.

The Production Linked Incentive (PLI) scheme for food processing is also expected to support value addition, strengthen branded edible oil manufacturing, and improve overall supply chain resilience within the industry.

(d) RISKS AND CONCERNS

I. Geopolitical and Global Supply Chain Risk

The Iran-Israel conflict and the consequent disruption in the Strait of Hormuz represent one of the most significant near-term geopolitical risks affecting the global edible oil industry and commodity supply chains.

The disruption in shipping movements through the Strait has resulted in elevated freight costs, energy price inflation, logistics bottlenecks, vessel shortages, and increased insurance premiums, all of which have materially impacted the edible oil value chain globally.

India remains particularly exposed due to its substantial dependence on imported crude oil, LPG, LNG, and edible oils. Rising crude oil prices, currency depreciation, and inflationary pressures continue to impact transportation, processing, packaging, and procurement costs across the industry.

The risk of prolonged geopolitical instability and continuing trade flow disruptions remains a material concern and may continue to exert pressure on input costs and supply chain efficiency during the coming periods.

II. Import Dependency and Structural Supply Risk

India continues to import nearly 56-57% of its edible oil requirements, thereby exposing the domestic industry to global commodity price volatility, geopolitical developments, trade restrictions, and international logistics disruptions.

The dependence on imports from Indonesia, Malaysia, Argentina, Brazil, Russia, and Ukraine creates structural supply vulnerabilities that may continue to impact domestic price stability and procurement economics despite ongoing Government initiatives aimed at enhancing domestic oilseed production.

III. Raw Material Availability Risk — Cottonseed

Availability of cottonseed at competitive prices remains a key operational risk for the Company. Cottonseed supply is dependent upon national cotton production, climatic conditions, pest incidence, and farmer acreage allocation.

Any shortfall in cotton production or reduction in acreage may result in supply constraints and higher procurement costs, thereby impacting processing margins and profitability.

The Company continues to mitigate this risk through disciplined procurement planning, inventory management, and active price risk monitoring mechanisms.

IV. Commodity Price and Foreign Exchange Risk

The edible oil industry operates within an internationally integrated commodity market where global price movements directly influence domestic market dynamics.

Volatility in global prices of palm oil, soybean oil, sunflower oil, and other commodities, together with fluctuations in foreign exchange rates, particularly the Indian Rupee against the US Dollar, may materially affect import costs and operating margins.

The Company continues to strengthen its risk management practices, including appropriate hedging mechanisms and systematic monitoring of commodity and currency exposures.

V. Environmental and Regulatory Risk

The expansion of oilseed cultivation under various Government missions, while strategically important, also presents environmental and sustainability-related concerns.

Excessive monoculture farming, depletion of soil nutrients, groundwater stress, and increased dependence on chemical fertilizers and pesticides may create ecological and regulatory challenges over the long term.

Environmental, Social and Governance (ESG) considerations are becoming increasingly significant for investors, lenders, regulators, and consumers. Accordingly, sustainable agricultural practices, climate- resilient cultivation methods, precision farming, efficient water management, and balanced ecological development are expected to gain increasing importance within the industry.

The Company remains supportive of environmentally sustainable and climate-conscious agricultural practices within its operational and procurement framework.

VI. Company Risk Management Framework

The Company continues to place strong emphasis on risk management and has implemented various measures for mitigating the impact of commodity price fluctuations, foreign exchange volatility, and operational uncertainties on profitability.

The Company has also initiated steps toward strengthening and upgrading its enterprise-wide risk management framework in line with evolving market conditions and industry requirements.

Key determinants of the Companys business risk profile include:

Ability to manage regulatory and policy changes;

Agro-climatic and raw material availability risks;

Operational efficiency and cost optimization;

Product diversity and market positioning;

Commodity price and foreign exchange risk management;

Supply chain resilience and procurement efficiency.

The Board of Directors and Management continuously monitor emerging risk factors and remain committed to adopting proactive and adaptive risk mitigation strategies to safeguard the Companys long-term operational and financial stability.

(e) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company continues to process cottonseed through scientific and efficient processing methods for the manufacture of edible oil, de-oiled cake, hulls, and linters.

During the financial year under review, Operational Revenue decreased to ^10,632.84 Lakhs as compared to ^15,905.46 Lakhs during the previous financial year, representing a decline of approximately 33% on a year-on-year basis.

Profit Before Tax (PBT) for the year stood at ^415.39 Lakhs as against ?481.49 Lakhs in the previous year.

The decline in operational performance during the year was primarily attributable to lower raw material availability, elevated cottonseed procurement costs, volatility in edible oil markets, increased freight and logistics expenses, and inflationary pressures arising from global geopolitical developments.

Despite the challenging business environment, the Company continued to focus on operational efficiency, prudent procurement practices, cost control measures, and disciplined working capital management in order to protect profitability and maintain business stability.

(f) CAUTIONARY STATEMENT :

Statements in the Boards Report and Management Discussion and Analysis describing the Companies objectives, projections, estimates, expectations may be “forward looking statements” within the meaning of applicable security laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the companys operations include, among others, economic conditions effecting demand / supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.

2. DISCLOSURE OF ACCOUNTING TREATMENT :

Where in the preparation of financial statements, during the year there was no different treatment from that prescribed in an Accounting Standard has been followed, the fact shall be disclosed in the financial statements.

OTHER KEY FINANCIAL INDICATORS :

Ratios	2025-26	2024-25	Change	% Change
Debtors Turnover *	8.48	18.48	(10.00)	(54.14%)
Inventory Turnover *	3.66	5.82	(2.16)	(37.11%)
Current Ratio a	2.29	2.42	(0.13)	(5.37%)
Interest Coverage Ratio **	14.10	6.05	8.05	133.06%
Debt Equity Ratio **	0.51	0.43	0.08	18.60%
Operating Profit Margin (%) aa	4.20%	3.63%	0.58	15.99%
Net Profit Margin (%) a*	2.92%	2.37%	0.55	23.36%
Return on Net Worth a**	0.10	0.13	(0.03)	(25.79%)

Notes: *Decrease in Debtors & Inventory Turnover were primarily on account of lower sales turnover during the year in proportion to the turnover ofthe company in FY 2024-25 . ACurrent Ratio is decreased due to more Bank dues payable as on the financial year ending date. **Interest Coverage Ratio & Debt Equity Ratio have increased due to increase in profits. AAOperating Profit Margin (%) has increased due to increase in profits. A*Net profit Margin (%) has increased due to increase in net profit. A**Return on Net Worth has decreased due to decrease in Profit after tax Amount when compared to previous year.

Material developments in Human Resources / Industrial Relations front, including number of people employed

Your Company has been putting high emphasis on driving an effective and transparent performance culture with an open mindset. This is evident in the way performance is closely tracked and its impact on your Companys financial sustainability monitored. Leaders today provide feedback not only on performance but also on demonstration of Core Values and Leadership skills defined for each layer of Organization hierarchy. Top performers and high achievers are recognized for their exemplary performance as part of the rewards and recognition program. In the year gone by, your Company has focused on functional training programs such as Food Safety and Regulations, Energy Management, Lean Sigma, TQM, Industrial Safety, Your Company provides learning opportunities through facilitator led learning, workshops and experiential learning through projects, programs and assignments. Your Company has continued to maintain amicable Industrial Relation footprints by focusing on increased worker level engagement through formal and informal communication and training forums. As of 31st March 2026 , your Company had 130 employees on its rolls.