Kabsons Industries Ltd Management Discussions

Industry structure and developments

The LPG sector in India is poised for robust growth, with a projected compound annual growth rate (CAGR) exceeding 3.5% between 2022 and 2027. This upward trajectory is being driven by rising demand across key segments—Domestic, Industrial, Automobile, and Commercial—underscored by the governments continued emphasis on cleaner energy alternatives.

Reflecting this growing demand, the number of LPG bottling plants in the country has increased significantly, reaching 202 facilities, as reported by the Petroleum Planning and Analysis Cell (PPAC). This infrastructure expansion supports Indias broader energy transition and highlights the sectors momentum. India is also on track to become the worlds largest residential consumer of LPG by 2030, surpassing China. This shift is bolstered by strong policy support: LPG coverage has expanded dramatically from 61.9% in April 2016 to nearly 100% today, marking a transformative milestone in energy accessibility and household fuel security.

Opportunities and Threats

Opportunities: A significant opportunity for the LPG sector lies in the potential policy shift by the Central Government to allow private companies to sell subsidized LPG—an area currently dominated by state-owned oil marketing companies (OMCs). Such a move could introduce competition, improve efficiency, and enhance consumer choice.

To explore this possibility, a five-member committee was constituted on May 30, 2019, tasked with reviewing the existing LPG marketing framework and evaluating the need for liberalizing policies to encourage greater private sector participation. While this initiative signals a progressive intent, tangible policy action has been limited, and the pace of reform remains gradual. Unlocking this opportunity could reshape the competitive landscape and catalyze further growth in the sector.

Threats: Although the LPG sector faces minimal immediate threats, the long-term landscape presents emerging challenges. Chief among these are the gradual rise of Piped Natural Gas (PNG) for household and industrial use, and the growing adoption of Electric Vehicles (EVs), which could impact LPG demand in the automobile segment.

While infrastructure development for PNG and EVs remains complex and capital-intensive—particularly in areas with lower disposable incomes or challenging geography—these alternatives are steadily gaining traction. As technological advances and policy incentives continue to support their growth, they may pose a competitive threat to LPG in the years ahead.

Risk Management

Risk management remains integral to our overall business strategy. We proactively identify, assess, and address risks through structured mitigation frameworks designed to safeguard operational continuity and financial stability. In an increasingly competitive landscape, sustaining service revenue is a key focus. Our approach balances agility with prudence—ensuring we are well-positioned to navigate market volatility, regulatory changes, and evolving customer needs while maintaining a resilient and adaptive business model.

Outlook

For FY 2024–25, revenue performance has been supported by continued service to large private clients and the strategic leasing of facilities—including the new factory shed in Aurangabad, which became operational in April 2023. All company plants remain active, either through direct operations, third-party bottling, or lease arrangements, with the exception of the Jaipur and Dharwad LPG Bottling Plants.

Looking ahead, we are focused on expanding revenue streams through product innovation and market diversification. Notably, we have started AEROSOL-grade LPG in 33kg cylinders under our brand "KABSONS," along with 17kg cylinders for commercial and industrial use from our Rohtak plant.

We anticipate robust growth in LPG demand across key segments—residential, commercial, and industrial—driven by evolving customer needs and the broader shift toward cleaner energy solutions. Our efforts remain centered on maximizing operational efficiency, enhancing product offerings, and capitalizing on emerging market opportunities.

Internal financial control and its adequacy

The Board has established internal financial controls that comply with the Companies Act, 2013 and Stock Exchange Listing Regulations. These controls are designed to ensure efficient business conduct, asset protection, fraud prevention, accurate accounting records, and reliable financial reporting.

Financial Performance Discussion

For FY 2024-25, the company reported a total income of Rs.405,634.07 284,833.91 thousand, a substantial increase from Rs. 120,800.16 thousand in FY 2024-25. Profit after tax decreased to Rs. 20,624.82 thousand, from Rs.26,057.03 thousand the previous year. This represents a remarkable 42.41% increase in total revenue and a 20.85% decrease in net profit compared to the prior financial year.

Human Resources and Industrial Relations

Our management values employees as vital assets, focusing on their development, motivation, and retention. As of the end of the year, the company employed 27 individuals.

Cautionary Statement

This discussion contains forward-looking statements based on current estimates and expectations. Actual results may vary materially from those expressed or implied due to various factors

Financial Ratios

The Key Financial Ratios with detailed explanations were disclosed in the Financial Statements, which forms part of this Report.

Annexure - IV

Information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (Remuneration in Thousands)

S. No. Name	Designation	Remuneration Paid For the year 2024-25.	Remuneration Paid For the year 2023-24.	Increase in Remuneration From Previous Year	Ratio/times for median of Employee Remuneration
1. M Krishna Murthy	Chief Financial Officer	2,697.90	2,492.66	205.27	12.42
2. M. Nagaraju Resigned on 30-08-2023	Company Secretary cum Compliance officer	Nil	154.00	Nil	Nil
3. Madhu Thokala Appointed on 14-11-2023	Company Secretary cum Compliance officer	372.00	155.00	Nil	Nil

a) Number of permanent employees on the roles of the company: 27 b) Comparison of remuneration of each Key Managerial Personnel against the performance of the Company: Company is having mainly income from Plant leases. Hence not comparable with the performance of the company.

For and on behalf of the Board of Directors of	Sd/-
Kabsons Industries Limited	Rajiv Kabra
Place : Hyderabad	Chairman & Managing Director
Date : 22.05.2025	DIN : 00038605