Gandhar Oil Refinery India Ltd Management Discussions

Economic Overview

Global Economy¹

The global economy demonstrated resilience in CY 2025 despite persistent trade tensions and geopolitical uncertainties. Global GDP expanded by 3.4%, supported by resilient consumption, continued investments in technology and digital infrastructure and sustained policy support across major economies. Global inflation moderated during the year, declining from 5.8% in CY 2024 to 4.1% in CY 2025, reflecting easing supply-chain constraints, softer commodity prices and the cumulative impact of tighter monetary policies.

Advanced economies expanded by 1.9%, led by the United States, while emerging market and developing economies grew by 4.4%, supported by relatively stronger domestic demand and government spending. However, geopolitical developments and evolving trade dynamics continued to create uncertainty across global supply chains, commodity markets and industrial activity.

Outlook

Global economic growth is projected to moderate to 3.1% in CY2026 before improving marginally to 3.2% in CY2027. Advanced economies are expected to grow at 1.8% and 1.7% in CY2026 and CY2027, respectively, while emerging market and developing economies are projected to expand by 3.9% and 4.2%. The moderation in CY2026 primarily reflects the escalation of geopolitical conflict in the Middle East, which has lifted energy prices, firmed inflation expectations and tightened financial conditions across markets. Consistent with these assumptions, the IMF expects average crude oil prices to increase to approximately USD 82 per barrel in CY2026 from around USD 68 per barrel in CY2025, before easing in CY2027.

Global inflation is expected to remain contained, with headline inflation projected at 4.4% in CY 2026 before easing to 3.7% in CY 2027. Continued technological advancements, strengthening trade partnerships and improving supply-chain resilience are expected to support economic activity. Nevertheless, geopolitical uncertainties, evolving trade policies and financial market volatility may continue to influence the pace of global growth in the near term.

India remained one of the fastest-growing major economies globally, with real GDP estimated to expand by 7.7% in FY 2026, compared to 7.1% in FY 2025. Growth was supported by strong domestic consumption, sustained public capital expenditure, healthy services sector activity and improving industrial performance. Government initiatives such as Production Linked Incentive (PLI) schemes, infrastructure investments and policy reforms continued to strengthen economic momentum and support long-term competitiveness.

Inflation remains under control, with the latest Consumer Price Index (CPI) at 3.48%⁴ based on the revised 2024 base year, supporting household purchasing power and consumption across urban and rural markets. India also continued to strengthen its integration with global value chains through trade partnerships and supply- chain diversification initiatives, reinforcing its position as a preferred investment destination. Simultaneously, the recent India-EU Free Trade Agreement (FTA) and advancing trade dialogue between India and the US have strengthened Indias integration into global value chains, enhancing prospects for export diversification, technological collaboration and long-term growth.

Outlook

India is expected to remain among the fastest-growing major economies, with real GDP growth projected at 6.6% in FY 2027⁵. Continued government investment in infrastructure, improving private consumption and sustained policy reforms are expected to support economic activity.

Structural initiatives aimed at improving ease of doing business, expanding manufacturing capabilities and strengthening trade linkages are likely to enhance long-term growth prospects. Inflation is projected to remain at a manageable level of 4.6% in FY 2027, supporting macroeconomic stability.

Rising disposable incomes, premiumisation in personal care, expanding pharmaceutical manufacturing and the Governments continued infrastructure push, with the Union Budget 2026-27 raising capital expenditure to Rs.12.2 lakh crore and effective capital expenditure toRs.17.15 lakh crore (4.4% of GDP),areexpected tosupport demand across the Companys key end-use segments spanning consumer, healthcare, automotive and industrial applications.

India now has Free Trade Agreements (FTAs) witRs. 38 partner nations, spanning continents and economies of various sizes.⁶

Industry Overview

Global Oil Market⁷

In CY 2025, the global oil market displayed relative stability amid a period of structural recalibration. Global supply surged by 3 mb/d to a peak of around 107.4 mb/d by year-end. The bulk of incremental supply originated from non-OPEC+ producers, such as the US, Canada, Brazil, Guyana and Argentina, which collectively accounted for nearly 60% of the growth. OPEC+ contributions, led by Saudi Arabias production ramp-up, added momentum, while refinery throughputs hit 85.7 mb/d in December ahead of maintenance.

The demand grew steadily at 850 kb/d, fuelled by non-OECD economies, though petrochemical and gasoline segments faced headwinds from lower prices and economic normalisation post-tariff issues. Inventories increased by470 mb (1.3 mb/d average), providing a healthy buffer with crude dominating builds, especially in China and on water. Benchmark prices such as North Sea Dated averaged $62.64/ bbl, down from prior highs but stable despite geopolitical flare-ups in Iran, Venezuela, Russia and Kazakhstan. This movement highlights the markets ability to adapt through diversified supply and robust storage. Looking ahead into CY 2026, the oil sector is expected to sustain its positive momentum. Demand is foreseen to accelerate to 930 kb/d growth, driven by non-OECD regions as economies stabilise and petrochemical feedstocks rebound. Supply should rise another 2.5 mb/d to 108.7 mb/d, led by non-OPEC+ at 1.3 mb/d, building on the preceding years strong foundation and ample stockpiles that offer a safety net against disruptions.

Refinery runs are expected to hold steady at 84.6 mb/d with healthy margins recovering, while lower prices from last year support broader consumption. Even with potential geopolitical risks, the markets surplus buffer and production flexibility point to balanced growth, creating opportunities for steady profitability and investment against the backdrop of a normalising global landscape.

The global specialty oil industry forms a critical part of the downstream petroleum value chain, supplying high-performance and application-specific products across diverse end-use sectors, including pharmaceuticals, personal care, food processing, automotive, industrial manufacturing, chemicals and power. Industry demand continues to be supported by increasing industrialisation, expanding healthcare and consumer markets, evolving regulatory standards and the growing preference for high-purity and value- added petroleum products.

The global specialty oil market is estimated at approximately USD 15.3 billion in 2025 and is projected to reach USD 28.8 billion by 2033, reflecting a CAGR of 8.2% over the forecast period. Growth is expected to be driven by increasing consumption of specialty lubricants, process oils and other high-performance petroleum products across industrial and consumer applications, with Asia- Pacific remaining the largest and fastest-growing regional market.

APAC Oil Market⁹

The Asia Pacific base oil market reached an estimated value of USD 21.87 billion in CY 2025. This figure signals steady expansion across automotive and industrial segments in the area. Lubricants derived from base oils remain critical in reducing friction and heat management and maintenance of mechanical efficiency.

China dominated as the powerhouse at USD 11.01 billion, fuelled by its expansive automotive production base and industrial scale. India followed at USD 3.27 billion, propelled by surging vehicle output, infrastructure development and expanding manufacturing activity. Group I based oil led at 50.09% share owing to its affordability and wide applicability in conventional engine oils (54.75% of apps), gear lubes and greases. Urbanisation, machinery demand and emission rules kept the wheels turning smoothly across diverse climates.

The market outlook remains constructive, with projections indicating growth to USD 38.60 billion by CY 2034 at a healthy 6.5% CAGR. China is foreseen to retain its leadership at USD 11.74 billion in CY 2026, while India gathers pace at 8.02% on the back of refinery expansions and premium synthetics. Group IV synthetics and process oils are anticipated to witness a surge in demand.

Healthcare and renewables are foreseen to open fresh avenues, while partnerships and tech upgrades such as advanced Group M/MI, which promise cost competitiveness, longer life and greener operations catalyse demand. This outlook positions APAC as the global lubricant hub, blending demand firepower with smart sustainability.

Indias role in the global oil landscape is poised to expand substantially over the coming decade. Sustained economic growth, favourable demographics and rising energy demand are expected to be crucial enablers. The country has experienced considerable progress in cleaner fuel adoption. As the worlds third-largest ethanol producer, India has achieved a blending rate of 12%. This indicates a steady progress towards energy diversification. LPG penetration has widened significantly, particularly in rural regions, with imports increasing nearly threefold over the past decade to support clean cooking initiatives.

On the refining front, India has planned capacity additions of approximately 1 million barrels per day over the next seven years. This expansion positions the country as one of the fastest-growing refining hubs outside China. India already ranks as the fourth-largest exporter of middle distillate and sixth in refinery products at 1.2 million barrels per day. India has stepped up as a critical swing supplier amid shifting trade flows and reduced Russian exports to Europe.

Domestic production remains relatively modest at around 700,000 barrels per day (13% of needs). Consequently, imports reached 4.6 million barrels per day to cater to the fuel demand. By FY 2030, Indias oil demand is envisioned to surge by nearly 1.2 million barrels per day to 6.6 million, representing over a third of global growth. This is expected to be led by the demand of diesel for industry, jet fuel for travel (5.9% annual rise) and LPG for petrochemicals. Refining is anticipated to reach 6.8 million barrels per day, pushing exports to 1.4 million by mid-decade before stabilising at 1.2 million as local requirements grow.

Notably, EV adoption and enhanced efficiency will save 480,000 barrels daily, while biofuels like 20% ethanol are expected to cut import strain by late FY 2026. The emphasis of the government on cleaner energy and structural resilience point to a vibrant and sustainable future.

Crude Oil Price in India

Crude prices remained largely range-bound through the first eleven months of FY 2025-26 before rising sharply in March 2026 following the outbreak of conflict in West Asia, lifting the Indian basket average for the year to USD 73.20 per barrel. The Company continues to monitor feedstock markets closely, with calibrated procurement, inventory discipline and pricing actions helping mitigate the impact of input-cost volatility on margins.

The global white oil market was valued at USD 2.43 billion in CY 2025. This was enabled by the surging demand of high-purity, nontoxic ingredients across personal care, pharmaceuticals and food processing. Asia Pacific commanded 53.2% share of the global revenue, buoyed by rapid urbanisation and rising disposable incomes and expanding consumption across China, India and Southeast Asia.

Personal care applications represented the largest segment, grabbing 29% of the market. This performance can be attributed to white oils odourless, colourless and non-reactive properties that make it suitable for skincare, haircare and baby care products. Pharmaceutical formulations and adhesive applications provided additional growth momentum. Major global players alongside regional specialists bolstered supply and maintained competitive pricing, fuelling a post-pandemic rebound in cosmetics and health-focused goods.

In the years ahead, the market is foreseen to grow to USD 3.4 billion by CY 2033 at a steady 4.3% CAGR. Growth is expected to be led by Asia-Pacific, with China projected to race ahead at 4.6% on the back of rising middle-income consumption and industrial usage. Adhesives are expected to emerge as one of the fastest growing segments, growing at 4.6% CAGR. Personal care and pharmaceutical applications are expected to remain foundational amid stricter food safety norms and healthcare awareness. Producers can capitalise on emerging opportunities from the Asia Pacific region by scaling up cosmetics, baby care and lubricants.

Indias white oil market stood strong at 314.85 million litres in FY 2025, fuelled by consistent demand from personal care, pharmaceutical and polymer applications. Pharma and high-purity grades dominated with a 72.45% share, while low-viscosity variants captured around 67.60%. This reflects the demand for value-added products in a maturing industrial landscape. Personal care applications remained the top segment at 57.80%, fuelled by growing consumer needs, as refineries ran at over 103% utilisation to meet specialised demands without heavy imports. This setup highlights Indias edge in integrated supply chains and port access, keeping producers agile amid base- oil price swings and synthetic rivals.

The outlook for the market remains favourable. The market is expected to reacRs. 346.73 million litres by FY 2031 at a consistent 1.62% CAGR. Pharma grades are envisioned to grow at 1.69%, low viscosity at 1.63% and pharmaceuticals surging at 2.02%, reflecting sustained healthcare demand. Indias refining capabilities and product diversification position the industry to explore export-oriented specialty opportunities, reinforcing long-term competitiveness amid substitute pressures. This optimistic path promises reliable expansion, innovation in high-end applications and stronger self-reliance for a more efficient future.

Global Industrial Oil Sector¹⁴ Global Industrial Oils Market Size

The global industrial oils market stepped into CY 2025 on a firm footing, reaching an estimated valuation of USD 116.95 billion, up from USD 110.86 billion in CY 2024. Growth was led by the Asia Pacific region, which accounted for approximately 42% of the global share. This was facilitated by sustained industrial expansion across China, India and Japan.

Palm oil retained dominance, while light (Grade I) variants captured the largest slice by type, fuelling key end-uses such as biodiesel. These versatile lubricants are utilised across sectors and systems, ranging from turbines and compressors to cosmetics, pharmaceuticals and heavy equipment. They prevent corrosion, reduce friction and enhance efficiency across factories worldwide.

The post-pandemic rebound in manufacturing and automotive production have further strengthened consumption, especially in food processing and personal care segments. Leading global players, such as Bunge, Wilmar and Cargill continued to invest in innovation, responding to evolving environmental expectations and the gradual rise of electric mobility.

Looking ahead to CY 2034, the market is projected to expand at a steady 5.45% CAGR, reaching an estimated USD 188.52 billion. Asia Pacific is expected to grow at around 5.58% and reach USD 80.12 billion on the back of urbanisation, expanding vehicle fleets and cost- competitive production hubs.

Biodiesel and renewables, supported by policies such as Europes RED II emission targets are expected to provide additional impetus. Concurrently, light oils demand is anticipated to thrive across cosmetics and pharma sectors. While electric vehicles adoption may weigh on certain lubricant categories, broader industrial automation, biofuel expansion and rising manufacturing activity are likely to ensure ample growth runway for the sector.

Global Automotive Oil Market¹⁵ Global Automotive Oil Market Size

The global automotive lubricants market commenced CY 2025 on a stable growth trajectory, reaching an estimated value of USD 73.07 billion. The demand continued to stem from rising vehicle production and ownership levels, especially across emerging markets. Asia Pacific commanded 42% of the global share, attributable to sustained automotive growth across China, India and Japan.

Engine oils remained a crucial product category, indicating their essential role in curbing friction, cooling engines and enhancing durability across passenger and commercial vehicles. Conventional oils accounted for an estimated 54% of the aggregate owing to their cost efficiency and widespread compatibility.

Gear oils, transmission fluids, coolants and greases maintained steady demand. Industry giants, such as ExxonMobil, Shell, Castrol and Indian Oil continued to place emphasis on innovation aimed at augmenting fuel efficiency and meeting eco-norms amid EV transition. Aftermarket servicing and manufacturing hubs in North America and Europe kept volumes humming, even as synthetics gained ground for superior performance in extreme conditions.

Heading into CY 2035, the market is envisioned to grow to USD 87.40 billion at a 1.81% CAGR. The Asia Pacific market is projected to reach USD 37.58 billion, facilitated by fleet expansion, hybrid adoption and EV-compatible lubricants. Synthetics and gear oils are expected to witness strong demand as innovations such as biodegradable formulas, nanotech additives and high-performance lines for cleaner engines gain prominence. Europes green laws and North Americas R&D efforts create chances for eco-friendly lubricants. Biofuels and predictive maintenance help overcome short-term issues. Rising vehicle sales and after market growth turn EV challenges into opportunities for smarter, greener lubes.

Global Petroleum Jelly Market¹⁶ Global Petroleum Jelly Market Size

The global petroleum jelly market stood at USD 565.8 million in CY 2025, buoyed by steady demand from pharmaceuticals, cosmetics, personal care and industrial applications as a trusted moisturiser, protector and lubricant. North America led the demand with strong traction in medical-grade and skincare products, such as ointments, lip balms and wound healers. The Asia-Pacific region, particularly China and India have emerged as growth hotspots due to rising incomes, beauty trends and expanding pharma manufacturing.

USP-grade variants led the demand owing to their purity and usage in sensitive skin and medical applications. Cosmetics and personal care represented a notable share of the demand as hypoallergenic, fragrance-free trends gain ground. Leading industry players, such as Unilever (Vaseline), P&G, Sonneborn, Sasol and Raj Petro maintained steady supply, blending traditional refining with new-age innovations, despite crude price fluctuations.

The market is expected to trace an upward trajectory and reach USD 829.5 million by CY 2035 at 3.9% CAGR. The Asia-Pacific remains a vital area as demand thrives on the back of K-beauty, Ayurveda blends and urban skincare surges in Japan, South Korea and India. USP pharma segments are envisioned to lead, propelled by AI- optimised formulations, self-healing tech and eco-variants for wound care and baby products, while technical grades are likely to gain in rust-proof coatings and auto lubes. Opportunities continue to stem from the sustainable shift to carbon-neutral refining, plant-infused jellies and smart packaging. This positive outlook promises more personalised, high-performance solutions, wider access and robust gains for innovators worldwide.

Global Transformer Oil Market¹⁷ Global Transformer Oil Market Size

Transformer oil is a critical insulating and cooling medium used in power transformers, switchgear and other electrical equipment, playing an essential role in ensuring the safe and efficient transmission and distribution of electricity. Demand for transformer oil is closely linked to investments in power infrastructure, grid modernisation, renewable energy integration and rising electricity consumption.

According to Fortune Business Insights, the global transformer oil market was valued at USD 3.57 billion in 2025 and is projected to grow from USD 3.79 billion in2026to USD 6.23 billion by2034, registering aCAGR of 6.4% during the forecast period. Asia-Pacific accounted for approximately 50% of the global market in 2025, driven by significant investments in transmission and distribution infrastructure, rapid urbanisation and growing electricity demand across emerging economies.

The long-term outlook for the transformer oil industry remains favourable, supported by continued investments in grid expansion, replacement of ageing transmission infrastructure, increasing renewable energy capacity and the growing electrification of transport and industrial sectors. These structural trends are expected to drive sustained demand for transformer oils and other insulating fluids over the medium to long term.

Raw Material Landscape - Base Oil Sourcing¹⁸

Base oil is the primary feedstock for the specialty oil industry and constitutes a significant proportion of manufacturing costs across a wide range of value-added petroleum products. As a crude oil derivative, base oil prices are influenced by global crude oil movements, refining economics, supply-demand dynamics and geopolitical developments, making efficient procurement and supply chain management critical to maintaining cost competitiveness and operational resilience.

India continues to be structurally dependent on imports to meet its base oil requirements, particularly for premium Group II and Group III grades used in high-performance lubricant and specialty oil applications. In 2025, Indias base oil imports exceeded 3.0 million tonnes, registering an increase of 10.7% over the previous year, reflecting robust domestic demand. During the same period, domestic lubricant and grease consumption grew by 9.4% to 4.83 million tonnes, driven by sustained growth across the automotive, industrial and manufacturing sectors. South Korea remained Indias largest supplier of base oils, followed by Singapore, the UAE and other Middle Eastern markets, underscoring the countrys continued reliance on diversified import sources. These trends are expected to support sustained demand for specialty oil manufacturers while reinforcing the importance of secure sourcing strategies and supply chain flexibility across the industry.

Key End-Use Demand Pools - Consumer and Healthcare¹⁹

Demand for high-purity white oils is underpinned by the continued expansion of the consumer products and healthcare industries, where stringent quality, safety and regulatory standards make white oils an essential input across pharmaceutical, personal care, cosmetics and food-grade applications. Indias beauty and personal care market is estimated at approximately US$27 billion in FY25 and is projected to reach US$39 billion by FY30, supported by rising disposable incomes, premiumisation, digital commerce and increasing consumer awareness.

The Indian pharmaceutical industry remains one of the largest globally, with the market estimated at US$57.6 billion in 2025, expected to grow to US$79.7 billion by 2031. India is the third-largest pharmaceutical producer by volume, supplies 20% of global generic medicines and accounts for approximately 60% of global vaccine production, reinforcing long-term demand for pharmaceutical-grade white oils and other high-purity specialty oils.

Growth Drivers

Shifting Consumer Lifestyles

Indias youthful demographic profile continues to shape consumption patterns. Aspirational millennials and Gen Z consumers are embracing premium grooming and wellness routines, prioritising clean, hypoallergenic ingredients that rely on high-purity white oils for superior texture and safety in everyday skincare and haircare essentials.

Regulatory Push for Quality

Stricter pharma and F&B standards implemented by CDSCO and FSSAI mandate odourless, non-toxic white oils usage in ointments, capsules and food-grade coatings, ensuring consistent quality. This is expected to present fresh opportunities for compliant, trusted suppliers to gain market edge.

Booming E-commerce Accessibility

Digital platforms, such as Amazon and Flipkart have democratised access to white oil-based cosmetics and pharma products, spurring impulse purchase decisions among tier-2/3 city consumers and amplifying volume through seamless last- mile delivery networks.

Industrial Diversification

Indias pivot to specialty manufacturing (EV battery coolants, solar panel lubes, etc.) elevates white oils role as a versatile extender and stabiliser, promoting innovation in adhesives and polymers for a self-reliant supply chain.

Sustainability and Clean Label Appeal

Eco-aware urbanites favour brands with recyclable packaging and bio-derived white oil blends, aligning with green certifications that enhance shelf appeal and build loyalty in personal care amid rising ESG expectations.

Healthcare Infrastructure Expansion

Government-led Ayushman Bharat and rural clinic networks are likely to heighten demand for reliable white oils in affordable ointments and vaccines, bridging the urban-rural divide while supporting Indias pharma export leadership.

Power Transmission and Electrification Investments²⁰

Indias National Electricity Plan for transmission envisages an investment of approximately Rs.9.15 lakh crore, with the countrys transformation capacity planned to rise from 1,407 GVA in January 2026 to 2,345 GVA by 2032 and the transmission network expanding to 6.48 lakh ckm. Together with record renewable energy capacity additions, this multi-year build-out underpins sustained demand for transformer and insulating oils — a segment in which the Company recorded strong volume growth during the year.

Company Overview

Gandhar remains a leading manufacturer of white oils by revenue, specialising in Personal Care, Healthcare and Performance Oils (PHPO), Process & Insulating Oils (PIO) and Lubricants, including automotive and industrial oils. The Company operates three strategically located manufacturing facilities, comprising two facilities in India at Taloja (Maharashtra) and Silvassa (Dadra & Nagar Haveli) and one international facility in Sharjah, UAE. This manufacturing footprint enables efficient servicing of both domestic and international markets. Gandhars products comply with stringent national and international quality standards and are supported by certifications and approvals from the Indian FDA, ISO, Kosher, BIS and Halal authorities.

Founded in 1992, Gandhar has established a strong position in the specialty oils industry through continuous product innovation, capacity expansion and customer-centric solutions. Supported by an experienced management team and a diversified customer base, the Company exports its products to more than 100 countries across Europe, the Americas, Africa and the Asia-Pacific region. International business continues to be a key growth driver, contributing 42.8% of consolidated revenue in FY26. With a strong manufacturing base, extensive distribution network and deep expertise in specialty oils, Gandhar remains well positioned to capitalise on growth opportunities across domestic and global markets.

Operational Performance Manufacturing and Operating Efficiency

Manufacturing sales volume increased by 9.1% to 545,755 kL during FY2026, supported by healthy demand across key product segments and disciplined execution across manufacturing facilities. The richer product mix, led by the PHPO portfolio, together with improved operational efficiencies and cost optimisation initiatives, contributed to stronger manufacturing gross margin spreads and improved profitability during the year.

Capacity Utilisation

The Companys manufacturing network continued to operate at high utilisation levels during FY2026. Manufacturing facilities in India operated at approximately 125% capacity utilisation through multi-shift operations, while overall utilisation across the three manufacturing facilities stood at approximately 93%, reflecting the respective capacity bases and operating configurations of the facilities.

Capital Allocation and Cash Flow

The Company maintained a disciplined capital allocation approach during the year, focusing on strengthening operating cash flows, maintaining a prudent capital structure and funding growth initiatives through internal accruals. Cash flow from operating activities improved significantly to Rs.127.77 crore during FY2026 from Rs.14.72 crore in FY2025, supported by improved working capital management and stronger operating performance.

Capacity Expansion and Capital Allocation

The Company continues to evaluate phased capacity expansion at its Taloja manufacturing facility, supported by the acquisition of an adjoining land parcel. With the Indian manufacturing facilities operating at high utilisation levels, including multi-shift operations, the expansion is intended to provide additional capacity to support future demand while leveraging existing infrastructure and shared resources. The Company is currently working on a detailed capacity expansion and capex plan, with further clarity expected as the plans progress.

The Company has also established a subsidiary in South Africa to evaluate opportunities for expanding its presence in the region. The nature and scale of the proposed operations, whether through an office or manufacturing facility, are currently under evaluation, and the Company will assess the investment requirements based on the identified business opportunity.

Financial Performance

The standalone total income of the Company during FY2026 stood at Rs.3,444.00 crore compared to Rs.3,175.11 crore during FY2025.

The consolidated total income during FY26 stood at Rs.4,254.60 crore compared to Rs.3,909.93 crore during FY2025. The consolidated revenue thus increased by Rs.344.68 crore, representing a growth of 8.81% over the previous year.

On a consolidated basis, profitability improved meaningfully: the EBITDA margin expanded to 5.53% in FY2026 from 4.50% in FY2025 and profit after tax rose 64.3% to Rs.137.25 crore from Rs.83.52 crore.The improvement was supported by healthy total sales volume growth of 9.1% to 545,755 KL, a richer product mix led by the PHPO segment, relative stability in base oil prices through most of the year and the normalisation of ocean freight costs, partially offset by the sharp rise in crude-linked input costs towards the close of the year.

As per the standalone financials, the Company earned a profit before tax of Rs.180.93 crore in FY 2026 as against Rs.105.46 crore in FY2025.

In FY2026, the Company generated operating cash flows of Rs.127.77 crore, compared with Rs.14.72 crore in FY2025, reflecting stronger working capital management and improved operating performance. During the year, the Company paid dividends amounting to Rs.12.23 crore, demonstrating its continued commitment to delivering value to shareholders while maintaining adequate financial flexibility to support future growth initiatives.

Standalone Return on Net Worth:

Standalone Return on Net Worth increased to 11.19% in FY2026 from 6.59% in FY2025, reflecting the substantial improvement in profitability during the year, with standalone PAT increasing to RS. 138.40 crore from H 75.30 crore.

The difference between standalone and consolidated total income primarily reflects the contribution of the Companys overseas subsidiary operations, including the Texol business in Sharjah, UAE.

Petroleum Products and Specialty Oil

The turnover of the oil segment increased from Rs.3,156.25 crore in FY2025 to Rs.3,412.34 crore in FY2026, representing a growth of 8.11%. The turnover of the other segment increased from Rs.4.01 crore in FY2025 to Rs.10.22 crore in FY2026.

Financial Snapshot (Standalone)

(H in Crores)

Particulars	FY2022	FY2023	FY2024	FY2025	FY2026
Revenue	2,989.65	2,946.21	2,858.92	3,175.11	3,444.00
EBITDA	228.50	253.81	199.95	145.53	207.67
PAT	196.61	169.53	118.71	75.30	138.40
D/E	0.08	0.02	0.02	0.00	0.00

Key Ratios

Particulars	Consolidated	Standalone
	2025-26	2024-25	2025-26	2024-25
EBITDA/Turnover (%) (before exceptional items)	5.53	4.50	6.07	4.60
Return on Net Worth (%)	10.21	6.65	11.19	6.59
Book Value per Share (Rs.)	142.99	131.68	132.85	119.89
Earnings per Share (Rs.)	13.83	8.18	14.14	7.69
Debtors Turnover (days)	62	63	67	63
Inventory Turnover (days)	55	43	56	40
Current Ratio	2.61	2.91	3.03	3.77
Interest Coverage Ratio	6.24	3.16	8.83	3.61
Operating Profit Margin (%)	5.13	4.16	5.94	4.36
Net Profit Margin (%)	3.23	2.14	4.02	2.37

Explanation for change exceeding 25% (Standalone)

1. EBITDA/Turnover:

Improvement was driven by a richer product mix, particularly the PHPO portfolio, along with improved manufacturing efficiencies and cost optimisation.

2. Return on Net Worth:

The improvement was primarily attributable to stronger profitability during the year, supported by higher operating margins and improved operational performance.

3. Earnings per Share:

The increase reflects the significant improvement in profitability, with standalone PAT rising materially during the year.

4. Inventory Holding Period:

The increase reflects inventory maintained in line with procurement requirements and anticipated demand amid evolving supply-chain conditions. The Company also continued to optimise inventory levels considering the prevailing geopolitical environment.

5. Interest Coverage Ratio:

The improvement was supported by stronger operating profitability and the Companys debt-free standalone capital structure.

6. Operating Profit Margin:

The improvement was supported by product-mix enhancement, operational efficiencies and cost optimisation, which strengthened manufacturing gross margin spreads.

7. Net Profit Margin:

The improvement reflects stronger operating profitability and the substantial increase in standalone PAT during the year.

STRENGTHS

1. Leadership in Specialty and White Oils

The Company continues to hold a strong position in pharmaceutical, healthcare, personal care and performance oils. Its presence in high-purity and regulated segments enhances entry barriers and strengthens long-term customer relationships.

2. Diversified Product and End-Use Portfolio

With a portfolio spanning white oils, process oils, transformer oils, lubricants and petroleum derivatives, the Company serves a wide range of industries, including FMCG, healthcare, automotive and infrastructure. This breadth of exposure helps cushion demand fluctuations and provides revenue stability across cycles.

3. Strong Export Orientation

A well-established footprint across Asia, the Middle East and Africa provide geographic diversification and steady foreign currency earnings. It further reduces dependence on domestic demand cycles.

4. Strategic Manufacturing Footprint

Facilities in India and the UAE support supply chain efficiency, raw material accessibility and export competitiveness.

5. Established Global Customer Relationships

Long-standing partnerships with leading multinational and domestic clients bolster revenue stability and recurring business.

6. High Entry Barriers through Regulatory Approvals

The Companys products are supported by multiple international certifications and regulatory approvals, including India FDA, BIS, ISO, Kosher and Halal certifications. These approvals, together with lengthy customer qualification cycles, create significant barriers to entry in regulated end-use industries.

WEAKNESSES

1. Exposure to Feedstock Volatility

Profitability remains linked to movements in crude-derived base oil prices and supply conditions. Margin stability can be influenced by input cost fluctuations.

2. Limited Penetration in Developed Western Markets

While the Company has secured a strong foothold in emerging regions, deeper penetration into North America and parts of Europe remains an area for expansion.

3. Working Capital Intensity

Export-driven operations and inventory management requirements can lead to elevated working capital cycles, particularly during periods of pricing volatility or freight disruptions.

4. Scale Compared to Integrated Refiners

Compared with large integrated refiners and petrochemical conglomerates, the Company may have comparatively lower leverage in procurement and logistics negotiations.

OPPORTUNITIES

1. Growth in Healthcare and Personal Care Demand

Rising global consumption of cosmetics, pharmaceuticals and healthcare products continues to drive structural demand for high-grade white oils.

2. Supply Chain Diversification (China+1 Trend)

Global companies are increasingly diversifying their procurement away from a single country. This may create opportunities for Indian specialty manufacturers.

3. Infrastructure and Power Sector Expansion

Growing investments in power transmission and industrial infrastructure are expected to sustain demand for transformer oils and industrial lubricants.

4. ESG and Sustainable Product Development

Greater emphasis on environmental stewardship and compliance presents scope for cleaner processing technologies, improved disclosures and product innovation aligned with evolving regulatory expectations.

5. Operational Efficiency through Digitalisation

Adoption of automation, predictive maintenance and data-driven planning offer avenues to optimise production efficiency and enhance cost discipline.

6. Expansion of Value-Added Product Offerings

Increasing customer preference for specialised, customised and value-added products presents opportunities to deepen customer relationships, enhance wallet share and strengthen the Companys position across key end-use industries.

7. Import Substitution and Specialty Manufacturing

Indias increasing focus on domestic specialty chemical and pharmaceutical manufacturing, supported by government initiatives, is expected to create incremental demand for high-purity specialty oils and reduce reliance on imports.

THREATS

1. Global Economic Uncertainty

A slowdown in global industrial activity across crucial export markets could temper demand and narrow pricing flexibility.

2. Geopolitical and Freight Disruptions

Instability in critical shipping corridors or oil-producing regions may affect freight availability, delivery timelines and input costs.

3. Intensifying Competition

Capacity additions by domestic refiners and global specialty oil players may heighten pricing pressure and impact margins.

4. Regulatory Tightening

Stricter environmental, safety and chemical regulations could necessitate additional compliance costs and capital expenditure.

5. Long-Term Energy Transition Risks

Over the longer term, shifts towards electric mobility and renewable energy may gradually alter consumption patterns for petroleum-based products.

6. Foreign Exchange Volatility

Given the Companys significant export business and imported raw material requirements, fluctuations in foreign exchange rates may impact profitability and working capital.

Business Outlook

Gandhar Oil Refinery remains well positioned to capitalise on growth opportunities across the specialty oils industry, supported by its leadership position in the white oils market, diversified product portfolio and strong global presence. The Company will continue to strengthen its focus on high-growth consumer, healthcare and pharmaceutical end-use sectors while expanding its presence across domestic and international markets.

Key priorities include increasing penetration in existing geographies, entering select new markets, expanding the PHPO product portfolio and strengthening customer relationships through a broader range of value-added offerings. The Company also aims to enhance wallet share with existing customers, acquire new customers and progressively move up the value chain through contract manufacturing of finished products.

Backed by its integrated manufacturing capabilities, established export network and commitment to operational excellence, Gandhar remains confident of delivering sustainable growth and long-term value creation.

Environment, Safety and Sustainability

Responsible business practices remain integral to Gandhar Oils long-term growth strategy. The Company integrates environmental stewardship, operational safety and resource efficiency into its manufacturing and business processes, while continually strengthening governance frameworks to support sustainable value creation.

Environmental Stewardship

The Company continued to strengthen its environmental performance through initiatives focused on improving energy efficiency, enhancing water stewardship, reducing waste generation and increasing the adoption of renewable energy across its operations. These initiatives support regulatory compliance while improving operational efficiency and reducing the Companys environmental footprint.

Resource Efficiency

Gandhar Oil continues to optimise the utilisation of energy, water and raw materials through process improvements, operational discipline and infrastructure enhancements. Responsible resource management remains an important lever for improving manufacturing efficiency, strengthening supply-chain resilience and supporting long-term business sustainability.

Health and Safety

Providing a safe and healthy workplace remains a fundamental priority across all manufacturing facilities. The Company maintains structured Health, Safety and Environment (HSE) systems supported by preventive maintenance, safety training, emergency preparedness programmes and continuous employee engagement, reinforcing a strong culture of workplace safety and operational excellence.

Sustainability and Governance

The Companys sustainability agenda extends beyond environmental performance to encompass responsible governance, ethical business practices and stakeholder value creation. Gandhar Oil remains committed to aligning its operations with evolving sustainability expectations while embedding responsible business practices across its value chain.

ESG Reporting

A detailed overview of the Companys environmental initiatives, energy and water management, waste management practices, renewable energy initiatives, employee health and safety programmes, ESG performance metrics and statutory sustainability disclosures is provided in the Environment section and the Business Responsibility and Sustainability Report (BRSR), which forms an integral part of this Annual Report.

Materiality in Human Resources

HR materiality recognises that the strength of an organisation rests on the talent, commitment and well-being of its people. It entails identifying workforce priorities that constructively influence performance, culture and stakeholder confidence. At Gandhar Oil Refinery, these priorities are closely interwoven with the Companys core business goals, emphasising talent management, employee engagement, diversity and regulatory adherence. This strategy boosts operational efficiency, mitigates risks and embeds social accountability into the Companys sustainability efforts.

The Company follows a systematic process of engaging stakeholders, evaluating and ranking key HR topics and weaving them into strategic plans. Continuous monitoring and transparent disclosure of these vital HR aspects keep the Company responsive to emerging needs, ensuring sustained progress.

As of the reporting year, the Companys workforce surpassed 365+ employees.

Risk Management and Mitigation Strategy

Risk	Risk Impact	Mitigation Strategy
Macroeconomic Risk	Global economic moderation, geopolitical tensions and ongoing trade fragmentation may influence export demand, industrial activity and capital expenditure cycles impact export demand, industrial consumption and expansion plans.	Diversify revenue streams across geographies and end- use sectors; strengthen presence in resilient segments, such as healthcare and personal care; maintain prudent capital allocation and liquidity buffers.
Oil Price Volatility Risk	Fluctuations in crude-linked base oil prices may affect procurement costs, margin realisation and pricing stability.	Continue supplier benchmarking and maintain long-term supply arrangements; incorporate calibrated price- pass-through clauses in contracts; enhance demand forecasting and inventory optimisation to manage procurement cycles efficiently.
Currency Risk	A significant portion of revenue is derived from exports; foreign exchange fluctuations may impact profitability and cash flows.	Maintain a structured hedging policy; utilise forward contracts and natural hedges; align export receivables and import payables to reduce net exposure.
Environmental and Sustainability Risk	Growing global focus on sustainability, carbon footprint reduction and bio-based alternatives may impact demand patterns and compliance requirements.	Invest in cleaner technologies and energy-efficient processes; strengthen ESG disclosures; explore development of sustainable and specialty product variants aligned with evolving customer preferences.
Regulatory Risk	Alterations in environmental, safety and chemical regulations may escalate compliance costs or necessitate operational adjustments.	Maintain a proactive compliance framework; continuous oversight of regulatory developments across operating geographies; direct investment towards systems and processes that meet evolving standards.
Supply Chain and Logistics Risk	Disruptions in global shipping routes, freight volatility and geopolitical fragmentation may impact raw material procurement and exports.	Diversify supplier base and logistics partners; maintain optimal safety stocks; enhance supply chain visibility through digital tracking and planning tools.
Competitive Risk	Heightened competition from domestic refiners and global specialty oil manufacturers may lead to pricing pressure.	Focus on value-added specialty products; deepen customer relationships through quality and reliability; strengthen R&D and product differentiation capabilities.
Energy Transition Risk	Expedited adoption of electric mobility and renewable sources may reduce longterm demand for certain petroleum-based products.	Expand portfolio toward high-purity specialty oils and performance products less exposed to automotive cyclicality; monitor emerging applications in nonautomotive industrial sectors.
Human Capital Risk	Talent retention, skill upgradation and leadership continuity are critical for sustained growth.	Invest in employee engagement, training, succession planning and structured HR development initiatives aligned with long-term strategic objectives.

Internal Control Systems and Their Adequacy

The risk management and internal control framework is developed and put in place in accordance with the principles and standards contained in the organisations corporate governance code. It is an integral part of the Companys overall framework, with significant findings being reported by the internal auditor to the Audit Committees. The Board of Directors advises and has strategic supervision of the Executive Directors and management and of the monitoring and support committees. The control and risk committee and the department head in charge of audit must work under the supervision of the Statutory Auditors commissioned by the Board.

Cautionary Statement

The statements made in this section describes the Companys objectives, projections, expectation and estimations which may be ‘forwardlooking statements within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements based on any subsequent developments.