GP Petroleums Ltd Management Discussions

Management Discussion and Analysis

This management discussion and analysis report is prepared as per the requirements of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report provides a comprehensive analysis of the business performance and operations, as well as the financial achievements, industry status, and future strategies of the Company. The discussions contained in this Report are intended to provide readers with a meaningful understanding of the Companys business and performance, while ensuring that commercially sensitive information and the Companys competitive interests remain protected.

GLOBAL MACRO - AN UNCERTAIN FORECAST:

Continued geopolitical events along with changing dynamics of global trade have been driving factors behind the course of world economy. The war situation prevailing in the Middle East region along with increasing prices of oil as well as other commodities has made global economic growth projections for 2026 uncertain. In the past, geopolitics has always been a driving factor leading to global supply chain disruptions causing inflation pressures and affecting economic activities of the regions until normalization returns.

Furthermore, last years change in trade policies of US greatly affected international trade activities and global economic sentiment. Even as world economies were adapting to new trade realities, the worsening situation in Middle East region further increased the uncertainty in the global economic environment.

According to the World Banks report "Global Economic Prospects" for June 2026, global economic growth is forecasted to decrease to 2.5% in 2026¹ from 2.9% in 2025 and is going to stay at its lowest level since COVID-19 pandemic. Under a more pessimistic scenario involving heightened risks, where energy supply shocks prove more severe than expected and financial stress remains elevated, the World Bank estimates that global growth could decline to 1.3% in 2026.

The OECD (Organisation for Economic Co-operation and Development) has also described global economy Under Pressure² amid rising global geopolitical tensions and persistent policy uncertainty. Under a Base scenario, the OECD has downgraded the global growth to 2.8% in 2026 from 3.4% in 2025. However, under an adverse condition, where the ongoing conflict persists into 2027, the OECD cautions that global growth could slow significantly to 2.1% in 2026 and 1.8% in 2027.

The gap between the two institutions is a reminder that the range of outcomes matters more this year than any single point forecast.

INDIAN ECONOMY - THE OUTLIER

Despite geopolitical tensions persisting in the Middle East and consequent moderation of global growth expectations, India still continues to be among the fastest-growing large economies in the world. The growth prospects in India remain buoyed by sound domestic fundamentals, including healthy consumer demand, robust public investments, and improved private sector contribution. According to the Ministry of Statistics and Programme Implementation (MoSPI), real GDP has been estimated to grow by 7.7%³ in FY25-26 as per the new series of Annual and Quarterly GDP estimates with base year 2022-23 announced by the Government of India.

As per the World Bank, the Indian economy performed well even in the early period of the year amidst uncertainly on account of geopolitical uncertainties. Healthy domestic demand continues to drive the Indian economy, with resilient domestic consumption, especially in the rural market, along with recovering urban demand. This is evident from the robust collections of indirect taxes levied from domestic consumption, signaling strong economic performance.

However, despite little moderation, India is still one of the countries that has recorded the highest growth rate. In terms of growth for FY27 and FY28, OECD predicts rates of 6.3%⁴ and 6.4%, respectively, for India. Similarly, the World Bank has predicted GDP growth rate of 6.6%⁵ for FY27.

It is clear that despite various risks and uncertainties facing the Indian economy globally, factors such as sound macroeconomic fundamentals, rising digital economy, favorable demographic factors, and reforms ensure that the medium-term outlook for the Indian economy is quite good. This is in addition to the continued drive to increase economic growth through the development of infrastructure in the country.

Furthermore, as per the World Bank, even as the impacts of weak external demand on account of geopolitical risks will impact negatively, moderation in tariff rates by USA and the signing of trade pacts with the UK, Oman, New Zealand and the EU since 2024⁶, will mitigate some of the impact. These factors will positively influence the development of Indias merchandise exports and its trade competitiveness. Therefore, economic growth will accelerate over the next two fiscal years owing to high domestic consumption, investments, and improved export performance.

LUBRICANTS INDUSTRY

The Indian lubricants sector has continued to exhibit a robust rate of growth driven by rising industrial operations, growing automobile ownership, and increasing trends of efficiency and sustainability. Based on Persistence Market Research Report, the market size of Indian lubricants sector is expected to rise to US$ 6.6 billion by 2032 from around $ 4.8 billion in 2025 - an estimated CAGR of 4.65%⁷.

There are various shifts taking place in the Indian lubricants sector, which have been propelled by customer demands, technology innovations, and increased stringent environmental regulations. The country is set to emerge among the biggest consumers of energy worldwide and consequently the need for superior lubricants in the automotive, industrial, and infrastructure sectors will continue to increase. The development and use of synthetic, biodegradable, and application-specific lubricants is another trend that is currently emerging.

The automotive industry still plays the most significant role in consuming lubricants, and this trend is likely to stay in place going forward. With increased automobile use in both rural and urban areas, along with the rise in the number of automobiles, there will be constant demand for motor oil, transmission fluid, coolant, grease, and other types of lubricants. There will also be continued demand arising from the increasing importance of the aftermarket sector, especially with respect to two-wheelers.

GP PETROLEUMS - A FIVE DECADE LEGACY

GP Petroleums Limited (GPPL), through its main brand IPOL, has managed to establish an influential and enduring presence within the Indian lubricants industry. Launched in 1973, IPOL is one of the few indigenous brands which were able to survive and sustain itself over the past five decades while being in competition with various multinational and even public-sector lubricants producers.

The Company manufactures and markets a comprehensive range of automotive and industrial lubricants, rubber process oils, greases and specialty products. Supported by a strong distribution network of over 500 distributors/channel partners, 900+ direct customers and 18 strategically located warehouses, the Company has established a pan-India presence and continues to expand its international footprint by exporting its products to more than 12 countries.

Manufacturing and storage capacities, such as the factory in Vasai close to Mumbai, where GPPL is able to blend up to 80,000 KL per year of lubricants & greases, and to store up to 15,000 KL of base oil, is another source of its competitive advantage. With the help from advanced product development and quality control laboratories, GPPL produces all kinds of lubricants in accordance with internationally recognized standards and OEM specifications. A wide range of products of GPPL is able to cover virtually any application within automotive, industrial, engineering, rubber, and infrastructure segments.

Collaborations with reputable international manufacturers of additives and specialty chemicals, as well as exclusive cooperation agreement signed by GPPL with the Spanish oil company Repsol for producing and marketing Repsol- branded lubricants in India, make the Company capable of creating top-grade products.

SEGMENT-WISE PERFORMANCE

The Company reports two business segments: Manufacturing, comprising Industrial Lubricants, Rubber Process Oils and Automotive Lubricants; and Trading comprising Bitumen, Base Oil and Fuel Oil.

Segment-wise Gross Revenue performance is tabulated below:

Segment*	Gross Revenue FY26	Gross Revenue FY25	Change (%)
	(In Cr)	(In Cr)
Industrial Lubricants	271.6	260.9	4.1%
Rubber Process Oils	220.5	198.8	10.9%
Automotive Lubricants	85.9	82.5	4.1%
Trading (Bitumen and	106.9	106.0	0.8%
Others)
Total	684.9	648.2	5.7%

* The Segment-wise Gross Revenues presented above are before the deduction of Sales Related Expenses as required under Ind /AS 115.

Industrial Lubricants: The Industrial Lubricants business sustained its impressive growth trend during FY2025-26, thanks to consistent efforts in terms of innovation in its product portfolio, deeper customer engagement, entry into high-end industrial segments and strategic collaboration with OEMs. In the financial year under review, the Company has been able to position itself even more strongly as an integrator of lubricant solutions, with high-performance lubricants, technical knowledge and application support that assist customers in increasing their productivity and efficiency.

Metalworking Fluids was one of the key strengths of the Company, which made its contribution towards business growth. The Company, apart from maintaining its existing product range in water soluble cutting fluids, semi-synthetic coolants, neat cutting oils and rust preventives, added another product offering with the development of innovative synthetic ester-based water-miscible metalworking fluids.

Furthermore, throughout the year, GP Petroleums introduced a series of semi-synthetic coolants designed especially for aluminum parts manufacturing. This is owing to the needs of the rigorous specifications of the aerospace, defense, and automotive industries. Additionally, IPOL has released a new range of mild alkaline aqueous cleaners, which are effective in delivering superior cleaning results at normal temperatures. This helps customers save on energy usage and operating costs.

Besides that, IPOL continued to diversify its industrial lubricant product line in various fields of applications. In addition to expanding its existing metalworking fluids product line, the Company started producing neat cutting oils, EDM oils, hydraulic oils, quenching oils, cold forging oils, pressing oils, industrial cleaners, greases and rust preventives. These products cover a broad range of industries such as machine tools, tube mills, forging, fasteners, transmission tower manufacture, home appliances, engineering and infrastructure as well as general industry. Due to the advanced technology incorporated into these products, customers have gained benefits like better machining results, improved surface finish, increased tool life and process consistency.

One of the unique features of the company remains its superior technical services offering. The Company is of the view that industrial lubricants need regular monitoring and technical support to give the best performance. In the current year, GP Petroleums has strengthened its Coolant Management Services, wherein technical staff collaborates closely with the clients in extending the life of coolants, reducing the consumption of lubricants and improving performance of machines and processes. These efforts have proved beneficial in strengthening client relationships, gaining product acceptability and encouraging higher adoption of premium lubricants.

There has been significant success in the diversification of operations into rapidly growing industrial sectors during the year. Besides being strong in machine tools and metalworking segments, the Company has made inroads into the automotive components industry, aerospace industry, defence, aluminium processing, infrastructure industry, forging, fasteners, home appliances, and tube manufacturing industries. The quenching oil business has become another area of growth owing to the growing demand for quality products in heat-treatment processes. Our Company also continued to increase its presence in the infrastructure business by providing various engine oils, gear oils, and greases and also by expanding our existing business in the sugar industry where our brand IPOL is known for its decades of customer relations.

Establishing cooperation with OEMs and developing application-specific lubricants continued to be one of the strategic priorities of the Company during the year under discussion. An important achievement in the work with OEMs for the financial year 2025-2026 was getting an internationally recognized approval from Bosch Rexroth Germany for our premium hydraulic oil.

Apart from these product initiatives and technological advancements, GP Petroleums made efforts to build engagement in the market through participation in major industrial exhibitions throughout the country along with an increased digital engagement program. Such initiatives improved the visibility of the brand, created new leads, improved engagement with the OEMs and their channel partners, and also built on the value proposition of the Company in the industrial lubricant market. Expansion of the distribution network also took place in the form of appointment of new channel partners in certain strategic locations, along with regular training and technical assistance to the customers.

On the future front, the outlook for the Industrial Lubricants segment appears to be favorable. Increased industrial activities, infrastructure development, manufacturing activities, and the increasing need for high-performance lubricants are likely to support the growth of the business going forward. In this context, GP Petroleums looks well positioned with its diverse product range, technological strength, growing OEM collaborations, customer-oriented approach, and improved market reach.

Rubber Process Oil: The Rubber Process Oils (RPO) business unit maintained its momentum and established itself firmly as another one of the important growth areas for GP Petroleums in FY2025-26. Leveraging its decades of experience, extensive product portfolio and advanced technical know-how, the Company strengthened its market presence amongst top-tier tyre companies, rubber components makers and industrial end-users. The business enjoyed the benefit of active engagement with customers, superior product quality and the Companys capability to come up with tailor-made application solutions for changing customer needs.

An important aspect of the Companys business activities during the year included the continuing growth of its specialty paraffinic oil portfolio. The Company posted solid results in this regard through its efforts on developing specific products, using innovative raw material formulations and working closely with its customers. With its broad product range of low- to high-viscosity paraffinic oils, GP Petroleums was able to cater to a vast array of rubber applications from basic compounds to advanced applications. The paraffinic oil range has helped enhance the Companys profile in niche areas like butyl reclaim rubber and butyl tube applications, thus providing more options for growing the business.

GP Petroleums expertise in Low PCA (Polycyclic Aromatic) Rubber Process Oils provided another source of competitive advantage for the Company. Having been among the first producers in India to introduce this technology, GP Petroleums can be considered a reliable supplier of environmentally friendly process oils that comply with all the quality and performance specifications of todays tyre makers. The products help improve processing performance and product consistency, while helping clients comply with environmental regulations.

Along with specialty paraffinic and Low PCA grades, the Company also achieved good progress in sales of aromatic rubber process oils in selected rubber applications. Despite the fact that the trend towards the development of specialty and eco-friendly products is gaining momentum in the industry, aromatic oils still play an important role in certain non-tyre and industrial rubber applications. The diversified product portfolio of the Company ensures its flexibility to serve the needs of the different customers in various end use industries under any market circumstances.

The export business was also developing well in FY2025- 26 with growing demand from foreign tyre producers and rubber products manufacturers. The ability to provide high-quality products with steady performance and reliable supply allowed the Company to reinforce its position in selected foreign markets. Further export possibilities, mainly of specialty paraffinic and Low PCA Rubber Process Oils, are seen as promising directions for growth due to the growing demand of foreign customers for reliable and competent suppliers.

Maintaining the quality consistency has been another distinctive feature of our business during this year. As rubber process oils have an effect on the processing behavior of finished rubber products, it is essential for customers to maintain stable product features. Therefore, the Company maintained its good reputation as a supplier providing consistent quality through proper process control, well- developed quality assurance system and reliable logistics services. It positively influenced the level of customer trust, enhanced existing relations and allowed us to build our business with several leading tyre producers.

Moreover, it should be noted that during the year GP Petroleums distinguished itself by a client-oriented approach oriented at technical consultations and practical use of our products. Active cooperation with clients within the framework of product tests, consultations and product approvals allowed us to launch new products more quickly and to transform development into sustainable business relationship.

Going forward, the prospects of the Rubber Process Oils segment seem positive. Growth in demand from the tyre and rubber industry, preference for performance and ecofriendly process oils, as well as potential in export markets are some of the factors that could aid in future growth. The emphasis of the Company would be on expansion of its portfolio of specialty paraffinic products, leading position in Low PCA Rubber Process Oils, close cooperation with top tyre and rubber producers, as well as new uses of its products in other industries apart from rubber processing. With its strong technical capabilities and varied range of products catering to customers, the Rubber Process Oils segment is poised to be a major growth driver for GP Petroleums.

Automotive Lubricants: The performance of the Automotive Lubricants segment was once again impressive in FY2025-26, helped by the robust performance of the Indian auto industry, along with continued demand from the replacement sector. India retained its status as one of the largest auto lubricants markets in the world, due to rising number of vehicles owned, larger number of registered vehicles, and increased importance being attached to preventive maintenance. The performance of the Companys automotive lubricants business was further enhanced by such positive industry developments while it worked to expand its presence in important customer segments.

For the year under review, the primary focus of GP Petroleums was on expanding its reach through a balanced brand portfolio, which includes the use of its proprietary homegrown brand IPOL along with that of Repsol, its partner. While the brand IPOL kept gaining market presence in the value as well as mid-premium categories, Repsol helped the company establish its presence in the premium lubricant category with the help of its rich global motorsport background and technological strength.

One of the most important strategic priorities of the year is the expansion of the distribution footprint of the Company. GP Petroleums has continued to designate new distributors in selected strategic regions with the aim of increasing the availability of its products, building stronger retail presence, and penetrating deeper into the market. The Companys wide distribution network, which is backed by robust channel engagement efforts, remains an important contributor to the wider reach of both IPOL and Repsol products in urban as well as new Tier II and Tier III markets.

The Company has also remained committed to increasing the premium and added-value share of its products. As new vehicle technologies emerge and new OEM requirements arise, there is an increasing need for synthetic and semisynthetic lubricants. For this reason, GP Petroleums has continued to market higher performance engine oils and speciality automotive lubricants, which provide better engine protection, extended oil drains and fuel economy.

Nevertheless, the two wheeler and agricultural segments formed the core of the business for the Companys automotive lubricants in the year. The two segments provide substantial after-market opportunities that are underpinned by the growing number of vehicles and mobility in India. On the other hand, the Company increased its market share in the passenger vehicle and heavy duty commercial vehicle categories through focused customer acquisition, wider product range and increased distribution. Both of these segments have considerable growth opportunities in the long term owing to the rising trend of using premium lubricants among the passenger vehicle and fleet customers.

Trading (Bitumen and Others): To strengthen its long-term presence in the specialty bitumen segment as a part of its strategy, the Company, along with West Coast Oils LLP (JV Partner), established a Joint Venture Company (JVC) Amron Oil Resources Private Limited in June 2025. The Joint Venture has been established to manufacture, process, refine, stock, market and distribute a wide range of specialty bitumen products, including value-added grades catering to the evolving requirements of the infrastructure and road construction sectors.

Bitumen is a business which is well suited for GP Petroleums current portfolio as both businesses share similar core competencies in procurement, storage, distribution, and client relations. With the growing pace of infrastructure spending across the country, the Company sees the potential of creating synergies and diversifying its revenue base through this business line as well.

Bitumen is an essential raw material required for building roads, highways, airport runways, ports and other infrastructure projects and it is expected to see sustained demand in the coming years due to the focus of the Government of India on developing infrastructure through its various programs like PM Gati Shakti, Bharatmala Pariyojana and National Infrastructure Pipeline.

The Companys strategic foray into the Bitumen business has received an encouraging response from the market, marking an important milestone in its diversification journey. During the previous year, GP Petroleums Limited entered into a Bulk Bitumen (VG-30) Supply Agreement with Hindustan Petroleum Corporation Limited (HPCL) for the supply of up to 50,000 MT over a one-year period, with an estimated contract value of approximately 223 crore. While the off-take during the initial contract period was lower than the tendered quantity due to reduced demand from HPCL, the Company successfully fulfilled the requirements placed under the contract. In recognition of the Companys execution capabilities, product quality and supply reliability, HPCL renewed the agreement for a further period of one year for balance tender quantity of 42,200 MT reaffirming its confidence in GP Petroleums as a trusted business partner.

In line with its strategy to build integrated manufacturing capabilities in the specialty bitumen business, the Company has initiated the acquisition of an asset i.e. manufacturing facility ("Plant") at Savli, Gujarat. Upon completion, the facility will significantly enhance the Companys capability to manufacture value-added specialty bitumen products and strengthen its operational presence in this high-growth segment. The acquisition is currently in the advanced stages of completion, with statutory registrations and other customary transfer formalities underway.

In January 2026, Bharat Petroleum Corporation Limited (BPCL) awarded a Letter of Allotment (LOA) as the L1 bidder for the supply of 6,000 MT of Paving Grade Bulk Bitumen (VG30) and as the L2 bidder for 1,800 MT of VG40 Bulk Bitumen conforming to IS:73:2013 at Pipavav Port for a period of one year. The LOA is valued at approximately 38 crores.

Our Base Oil and Fuel Oil trading business supports the Companys integrated business model by capitalising on market opportunities, optimising supply chain efficiencies and expanding our customer reach across domestic and international markets.

These developments provide a strong foundation for scaling the Bitumen business and reinforce the Companys strategy of building a meaningful presence in Indias growing infrastructure sector.

OPPORTUNITIES

The Indian lubricants industry continues to present significant growth opportunities, supported by rising vehicle ownership, increasing industrialization, infrastructure development, and evolving customer preferences. The CAGR of 4.6% as mentioned above reflects the sectors long-term growth potential and these growth opportunities include:

Growing Automotive Parc and Aftermarket Demand: India remains one of the worlds largest automotive markets. According to a NITI Aayog report⁸ the cumulative number of End-of-Life Vehicles (ELVs) is expected to increase to nearly 23 million by the end of 2025 creating a sizeable replacement and maintenance market. Further, SIAM reported two-wheeler vehicle sales of over 21.7 million units⁹ in FY2025-26, a robust growth of 10.7% YoY; while three-wheeler sales were 8.36 lakh units with a growth of 12.8%, supporting sustained demand for engine oils, transmission fluids, coolants, and greases.

Infrastructure and Manufacturing Expansion: Continued investments under the National Infrastructure Pipeline (NIP), PM Gati Shakti, railway modernization, mining, construction, and manufacturing initiatives are expected to increase demand for industrial lubricants, hydraulic oils, metalworking fluids, and specialty greases. According to the Union Budget 2026-27, the Government continues to prioritize capital expenditure to strengthen infrastructure-led economic growth and hence the public sector expenditure is proposed to be increased by ~9% to 12.2 lakh crore in FY2026-27 from 11.21 crore in FY2025-26 (Budget Estimates).¹⁰

Premiumization and Technology-led Products: Industry reports by Ken Research and Persistence Market Research highlight a growing shift toward synthetic and semi-synthetic lubricants as consumers and industrial users increasingly prioritize equipment efficiency, extended drain intervals, and lower maintenance costs. This trend is expected to support value growth across lubricant categories.

Emerging Opportunities from Energy Transition: While electric mobility may gradually reduce demand for conventional engine oils, it is creating new opportunities for EV-specific fluids, battery thermal management solutions, coolants, transmission fluids, and specialty greases. According to the International Energy Agency (IEA), India remains one of the fastest-growing EV markets globally, supported by government incentives and expanding charging infrastructure.

Sustainability-driven Innovation: Growing environmental awareness and evolving regulatory standards are driving demand for bio-based lubricants, environmentally acceptable lubricants (EALs), and energy-efficient formulations across industrial applications.

Opportunities for GP Petroleums

The evolving dynamics of the Indian lubricants industry present multiple opportunities for GP Petroleums across its core business segments. The Companys diversified portfolio, comprising automotive lubricants, industrial lubricants, and rubber process oils, positions it to participate in several structural growth trends shaping the sector.

The continued expansion of Indias vehicle population, particularly in the two-wheeler and commercial vehicle segments, is expected to support steady growth in the automotive aftermarket, where lubricant replacement remains a recurring requirement. With its established IPOL brand, extensive distributor network, and wide product range, the Company is well placed to address demand arising from both vehicle additions and the ageing vehicle parc.

In the industrial segment, increasing investments in manufacturing, infrastructure, mining, construction, logistics, and power generation are expected to drive demand for specialized lubricants and greases. GP Petroleums broad industrial product portfolio and technical capabilities provide opportunities to deepen its presence in these sectors, particularly as customers increasingly seek higher- performance lubricants that enhance equipment reliability and operating efficiency.

The ongoing shift towards premium and application-specific lubricants also presents a value-accretive opportunity. Through its relationships with leading global additive technology providers, the Company continues to expand its portfolio of high-performance products aligned with evolving customer requirements and stricter equipment specifications.

The rubber process oils business is expected to benefit from sustained growth in the tyre, automotive components, and industrial rubber products sectors, supported by rising mobility, infrastructure development, and manufacturing activity. As these end-user industries expand, demand for quality process oils is likely to remain robust.

While the transition towards electric mobility may gradually alter lubricant consumption patterns over the long term, it is also expected to create opportunities in specialty fluids, thermal management solutions, and other advanced applications. GP Petroleums remains focused on monitoring these emerging trends and aligning its product development initiatives with the changing needs of the market.

THREATS

The world lubricants market is in a highly dynamic environment where the external situation has a direct bearing on demand, logistics and pricing. The current geopolitical volatility and resultant disruption in supply chain create an effect that reverberates through the lubricants value chain from sourcing, inventory management to overall market sentiment. Any disturbances in the crude oil production, refining activities and shipping channels are likely to affect crude and base oil prices, freight costs and availability of crucial raw material inputs. High macroeconomic volatility could limit the demand for lubricants in both the automotive and industrial sectors.

The other structural factor that has an impact on the longterm prospects for the industry is the shift towards cleaner modes of transportation and greener technology on a global scale. Even though ICE cars will continue to prevail in India for years to come, the trend of growing popularity of electric vehicles along with evolving environmental policies in several countries has changed lubricants demand dynamics. Furthermore, growing pressure from consumers, shareholders and governments towards sustainable production is creating additional momentum for developing eco-friendly products and production processes.

RISKS & CHALLENGES

The lubricant manufacturing industry is currently experiencing a major change due to technological developments and evolving customers expectations along with stricter regulations. Modern automobiles and machines require advanced lubricants that can offer excellent protection, higher fuel efficiency and more drain cycles. This has led to a shift for the industry away from volume-driven production to premium and application-oriented lubricant production, though contributing positively to machinery performance and maintenance costs for end users. Volatile forex movement also necessitates risk mitigation measures to ensure least impact on the profitability & margins.

Strict requirements regarding emissions, sustainable production, quality of products and waste management are also becoming important in the industry. Meeting such requirements necessitates regular investments into research and development, product development and quality assurance. In the Indian context, the environment is no different as organized players, multinationals and local manufacturers compete in variety of segments. The unpredictable nature of prices of raw materials along with the changing consumer tastes towards advanced and high-end lubricants adds to the challenges that are faced regarding pricing and margins. In such an environment, success can only be achieved if the company is able to innovate, optimize costs, build resilient supply chain capabilities, and provide a differentiated product range backed up by robust technical services.

Risk Mitigation

GP Petroleums continues to tackle the challenges in the industry via an effective mix of product diversification, collaboration in technology, manufacturing prowess, and market reach. GP Petroleums business model is not reliant on a particular segment as there are different types of products offered by the company which includes automotive lubricants, industrial lubricants and rubber process oils.

For dealing with raw materials and other issues related to supply chain, GP Petroleums takes advantage of their storage facilities, relationships with suppliers and sound inventory planning. In addition to this, collaborations of the Company with some of the top names in the field of additives technology enables GP Petroleums to innovate and develop products in accordance with OEM specifications.

Realizing the trend towards premiumization in the market, GP Petroleums has been steadily diversifying into various high performing lubricants and specialized products.

Due to the Companys wide-reaching distribution network and established reputation of its IPOL brand, it has a diverse clientele which ensures that it is not overly dependent on a particular segment of customers. Furthermore, being a leading supplier of rubber process oils provides the opportunity to benefit from the growth prospects coming out of the tyres and industrial rubber market segments.

As advancements are made in the area of mobility technologies, such as the increase of use of electric cars, GP Petroleums continues to stay vigilant of new trends in the markets as well as opportunities in related lubricants and specialty fluids product lines.

OUTLOOK

Prospects of growth in the lubricants industry are favorable, underpinned by the increase in industrial activity, number of vehicles, infrastructure development, and increasing demand for high-quality lubricants.

There is a slow but definite trend towards the use of synthetic lubricants, specialty fluids, and custom lubricants in the lubricants industry. Innovation in machinery, changes in OEM requirements, and stricter environmental regulations would help promote the use of lubricants that are performing better and have higher service life. In addition, the gradual movement towards electric mobility could change the pattern of demand in the conventional lubricants category but would also present opportunities in the field of thermal fluids and greases.

The future success of the industry will not just depend on higher levels of consumption but also innovation, differentiation, and meeting customer and sustainability demands. Those companies that have technological competence along with effective distribution capabilities and customer-oriented product development can be considered best positioned to take advantage of these new opportunities.

GP Petroleums Growth Outlook

For the time being, GP Petroleums priorities remain in building itself up in the areas of automotive lubricants, industrial lubricants, and rubber process oils. There are several reasons for GP Petroleums to be optimistic about the prospects of development, as there is an increase in the consumption of lubricants due to higher car ownership rates, industrial growth, and investment in infrastructure.

The Company is set to grow through increased penetration of its IPOL brands, market penetration, expansion into the industrial and special lubricants segments, and sales of value-added products. The Companys partnerships with the worlds top lubricants additives companies help to create products that meet the current demands of customers and original equipment manufacturer (OEM).

At the same time, having a diverse portfolio of products, distribution network, strong manufacturing capacity, and ability to export gives the Company a strong ground for future growth.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

At GP Petroleums, we believe that our employees are the driving force behind our sustained success. As on March 31, 2026, the Company had a workforce of 258 employees on its rolls. Our people strategy is built on nurturing a high-performance culture that encourages innovation, collaboration and continuous learning, while remaining anchored in our core values of PATH - Passion, Agility, Thinking Big and Honesty. By aligning our human capital initiatives with our business priorities, we continue to build a future-ready organisation capable of delivering long-term value.

Cultivating a High-Performance Workplace

We remain focused on fostering an inclusive and engaging work environment where employees are empowered to contribute, collaborate, and grow. During the year, several initiatives were undertaken to strengthen workplace culture through enhanced communication, cross-functional collaboration, and recognition-driven practices. Employee feedback continued to play an important role in shaping our people policies and improving the overall employee experience.

Developing Talent and Future Capabilities

Building organizational capability remained a strategic priority. We introduced structured learning interventions designed to strengthen leadership capabilities, enhance functional expertise, and improve digital readiness across the organization. In addition to technical and role-based learning, employees participated in behavioural development programmes, compliance training, and experiential on-the- job learning to improve agility and resilience in an evolving business environment.

Performance Excellence and Employee Recognition

Our performance management approach continued to evolve with greater emphasis on accountability, measurable outcomes, and individual development. Enhanced recognition programmes celebrated both individual excellence and collaborative achievements, reinforcing a culture that values performance, innovation, and continuous improvement.

Strategic Talent Acquisition

Talent acquisition efforts remained aligned with our longterm business objectives. We strengthened our recruitment approach by leveraging multiple sourcing channels, including employee referrals, while continuing to enhance our employer brand and Employee Value Proposition (EVP). These initiatives enabled us to attract professionals who share our values and contribute meaningfully to organizational growth.

Employee Health, Safety and Well-being

Creating a safe and healthy workplace continues to be a fundamental commitment. Throughout the year, we organized preventive health check-up camps, wellness initiatives, mental health awareness programmes, and safety training sessions to support employee well-being. Regular safety audits, emergency preparedness drills, and risk assessments were conducted across locations in accordance with our Health, Safety, Security and Environment (HSSE) framework.

Compliance and Responsible Governance

Maintaining robust governance standards and ensuring statutory compliance remained integral to our people practices. Regular compliance reviews and internal audits helped reinforce adherence to applicable labour regulations and corporate policies across all operating locations.

The Company continued to maintain an active Internal Committee under the Prevention of Sexual Harassment (POSH) framework. Awareness programmes were conducted periodically to reinforce a respectful and inclusive workplace culture. No complaints were reported during the year.

Continuous monitoring of labour law compliance through periodic assessments and timely corrective actions supported smooth operations while minimizing compliance risks and industrial disputes.

Strengthening Our Employee Value Proposition

Our human resource initiatives are designed to support sustainable business growth while creating meaningful opportunities for employees to learn, perform, and succeed. By investing in capability development, employee wellbeing, inclusive practices, and a strong workplace culture, we continue to strengthen our Employee Value Proposition and reinforce our position as an employer of choice within the industry.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established and maintains a robust system of internal controls commensurate with the nature, size and complexity of its business. The internal control framework encompasses financial, operational and compliance controls and provides reasonable assurance regarding the reliability of financial reporting, preparation of financial statements in accordance with applicable accounting standards, safeguarding of assets, compliance with applicable laws, regulations and internal policies, and the orderly and efficient conduct of business operations.

The Companys internal financial controls over financial reporting are designed to ensure the maintenance of accurate and complete accounting records, appropriate authorisation and recording of transactions, safeguarding of assets, and prevention and timely detection of unauthorised use or disposition of assets that could have a material impact on the financial statements.

In addition to financial controls, the Company has established appropriate operational and compliance control mechanisms to support efficient business processes, ensure adherence to statutory and regulatory requirements, safeguard business continuity, and promote ethical and responsible conduct across the organisation. These controls are periodically reviewed and strengthened in line with evolving business needs and the regulatory environment.

In compliance with Section 134(5)(e) of the Companies Act, 2013, the Company has implemented an effective Internal Financial Controls (IFC) framework to discharge the responsibilities prescribed under the Directors Responsibility Statement.

The internal audit function operates independently in accordance with a risk-based audit plan approved by the Audit Committee. The adequacy and operating effectiveness of the Companys internal control systems, including internal financial controls, are reviewed periodically through internal audits, and the audit findings together with the status of corrective actions are regularly reviewed by the Management and the Audit Committee.

During the year under review, the Companys internal financial controls were evaluated through periodic testing. Based on the assessment carried out, no material weakness or significant deficiency was identified in the design or operating effectiveness of the controls. Accordingly, the Board is of the opinion that the Companys internal control systems, including internal financial controls, were adequate and operating effectively in all material respects as at 31 March 2026.

DISCUSSION ON CONSOLIDATED FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year 2025-26, the Company delivered a steady financial performance amidst a dynamic business environment.

Revenue from operations increased to 642.61 Crores from 609.84 Crores in the previous year, registering a growth of approximately 5.4%. The growth was primarily driven by the Companys core manufacturing business, with manufacturing revenue increasing from 504 Crores to 536 Crores, while the trading business continued to remain stable in line with its opportunistic business model.

Profit Before Tax (PBT), excluding a one-time exceptional charge of 3.26 Crores, stood at 38.6 Crores, up 8.9% as against 35.46 Crores in FY 2024-25. Including the one-off labour code charge, PBT was flat at 35.34 Crores.

Profit After Tax (PAT) improved marginally to 26.47 Crores from 26.32 Crores in the previous year, reflecting the strength of the Companys underlying business performance and prudent financial management.

The Companys consistent operational performance, supported by disciplined cost management, efficient manufacturing operations and prudent financial management, enabled it to sustain healthy profitability while strengthening its core business. The continued focus on operational excellence and long-term value creation positions the Company well to capitalise on future growth opportunities.

CHANGES IN KEY FINANCIAL RATIOS

Details of changes as compared to the previous financial year in key financial ratios, along with explanations thereof, including:

Particulars	Unit	2025-26	2024-25	% Change
Debtors Turnover Ratio	Times	4.27	4.07	4.9%
Inventory Turnover Ratio	Times	6.50	6.58	(1.2)%
Interest Coverage Ratio	Times	50.39	73.35	(31.3)%
Current Ratio	Times	4.69	4.91	(4.5)%
Debt Equity Ratio	Times	0.07	0.10	(30.0)%
Operating Profit Margin	%	6.07	6.40	(5.2)%
Net Profit Margin	%	4.12	4.32	(4.6)%
Return on Net worth	%	7.46	8.00	(6.8)%

Debtors Turnover Ratio measures the efficiency with which the Company collects its trade receivables and reflects the effectiveness of its credit management practices. The ratio is calculated by dividing revenue from operations by the average trade receivables for the year. The ratio improved to 4.27 in FY 2025-26 from 4.07 in FY 2024-25, indicating enhanced collection efficiency and effective management of working capital.

Inventory Turnover Ratio measures the efficiency with which the Company manages its inventory by indicating the number of times inventory is sold and replenished during the year. It is calculated by dividing the cost of goods sold by the average inventory. The ratio stood at 6.50 in FY 2025-26 as compared to 6.58 in FY 2024-25, remaining broadly stable and reflecting efficient inventory management with optimal inventory levels and effective movement of goods through the business cycle.

Interest Coverage Ratio measures the Companys ability to meet its interest obligations from its Earnings Before Interest and Taxes (EBIT) and is calculated by dividing EBIT by interest expenses. The ratio stood at 50.39 in FY 2025-26 as compared to 73.35 in FY 2024-25. The decline of 31% was primarily attributable to higher interest cost, which rose to 0.69 Cr from 0.48 Cr combined with lower operating earnings during the year. Despite a fall, the ratio continues to remain at a healthy level, reflecting the Companys strong debt servicing capacity and comfortable coverage of its finance costs.

Current Ratio is one of the key liquidity indicator that measures the Companys ability to meet its short-term obligations using its current assets and provides an assessment of its short-term financial strength. It is calculated by dividing current assets by current liabilities. The ratio stood at 4.69 in FY 2025-26 as compared to 4.91 in FY 2024-25, continuing to reflect a strong liquidity position and adequate current assets to comfortably meet short-term liabilities.

Debt Equity Ratio measures the proportion of the Companys total debt to its shareholders equity and indicates its financial leverage and long-term solvency. As the Company has very small long-term borrowings, the ratio also includes short-term borrowings and lease liabilities (total debt). The ratio improved to 0.07 in FY 2025-26 from 0.10 in FY 202425, reflecting a 30% reduction in leverage. The Company continues to maintain a conservative capital structure with minimal debt and remains predominantly equity-financed.

Operating Profit Margin is a key profitability ratio that measures the Companys ability to generate operating profit from its core business operations. It is calculated by dividing operating profit by revenue from operations. The margin remained broadly stable during the year at 6.07% as compared to 6.40% in the previous year. The marginal decline reflects normal variations in the Companys cost structure while maintaining overall operational efficiency.

Net Profit Margin reflects the proportion of profit before tax earned from each rupee of revenue generated and is calculated by dividing Profit After Tax by revenue from operations. The margin stood at 4.12% in FY 2025-26 as compared to 4.32% in FY 2024-25. The marginal moderation was primarily attributable to one-time factors recognised during the year. Nevertheless, the Company continued to maintain a healthy level of profitability, reflecting the resilience of its operations and prudent financial management.

Return on Net Worth reflects the Companys ability to generate returns on shareholders funds and is calculated by dividing Profit After Tax by shareholders equity. The ratio declined marginally to 7.46% in FY 2025-26 from 8.00% in FY 2024-25, primarily on account of a higher equity base.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis that describe the Companys objectives, projections, estimates, expectations or predictions may be forward-looking within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events, and actual results may differ materially from those expressed or implied.

Important factors that could cause actual results to differ include, among others, changes in the price and availability of crude oil and base oil, foreign exchange movements, economic conditions in India and in the markets to which the Company exports, changes in government regulation, tax laws and other statutes, the pace of adoption of electric mobility, the outcome of contractual arrangements and joint venture operations, and other incidental factors.

The Company assumes no obligation to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent development, information or event, except as required by applicable law.