Kanchi Karpooram Ltd Management Discussions

The Management presents an overview of the Companys operating and financial performance during financial year 202425 and provide an outlook for business performance in the coming years in this section.

Industry structure and developments

Camphor is produced both naturally from camphor tree oil and synthetically, mainly using alphapinene derived from turpentine oil. Camphor finds widespread applications in pharmaceuticals, personal care, cosmetics, fine chemicals, and industrial sectors.

The market is further supported by the growth of synthetic resins, aroma chemicals, and the Flavour & Fragrance industry. Ongoing R&D investments by major players and the steady expansion of the pharmaceutical industry are likely to create significant future opportunities in the camphor market.

Opportunities and Threats

The camphor industry in India presents several opportunities for growth and diversification. Rising consumer interest in wellness, Ayurveda, and aromatherapy is driving demand for camphorbased products such as oils, balms, and diffusers. Diversifying into pharmaceutical and industrial applications also provides stable revenue beyond the traditionally seasonal religious demand.

Camphor is widely used in the plastic industry as a plasticizer, additive, and biobased polymer building block. It improves flexibility and moldability in materials like PVC and PLA and offers ecofriendly, nontoxic alternatives to traditional plasticizers. Camphor derivatives like camphoric acid and isoborneol are also used in biobased polyesters and polyamides, enhancing strength, heat resistance, and sustainability.

As an additive, camphor provides antimicrobial properties, fragrance, and UV protection, beneficial in packaging and medical plastics. Its also used to enhance the flexibility and thermal performance of biodegradable plastics like PLA and PHA.

However, the industry faces challenges such as price volatility of imported gum turpentine oil, and competition from dumping of camphor from China.

Product wise Performance

Camphor

Camphor is the primary product of the Company which contributes to 78.54 % of sales. Due to its varied domestic applications, it presents an opportunity to explore FMCG retail market through ecommerce and other modern trading means.

Dipentene

Dipentene, a byproduct of camphor manufacturing, is widely used in the paint industry. It also functions as a dispersing agent in products like oils, resins, paints, varnishes, lacquers, floor waxes, and furniture polishes. Additionally, dipentene serves as a fragrance and flavoring agent.

Isoborneol

Isoborneol is commonly used as a fragrance and flavor agent and its usage across the world has led to accelerated consumption in aromatherapy and wellbeing.

The Company anticipates an increase in volume, revenue and profitability in other byproducts such as Gum rosin and Rosin Derivatives in the years ahead. The Company is confident to enhance the margin and volume in the coming years in other byproduct categories, both in domestic and international markets.

Outlook and Prospects

The Company currently operates in a challenging market environment characterized by intense competition from low cost Chinese imports, often perceived as a result of dumping practices. While price pressures from Chinese products persist, the company continues to emphasize highquality manufacturing standards, regulatory compliance, and certified formulations, areas where imported products often fall short. This positions the company favourably among customers in regulated sectors such as pharmaceuticals, foodgrade products, and highend industrial applications.

Further, internal efforts are underway to streamline operations, improve energy efficiency, and optimize raw material sourcing.

Investment in the real estate

During the year under review, the Company successfully obtained all required permits, licenses, and approvals from the relevant government authorities to commence construction activities. Following the receipt of these preliminary approvals, construction work at the site has officially begun. The land preparation, establishment of a continuous water supply, and other ancillary activities related to the construction are currently in progress.

Risks and Concerns

No organization is risk free and a Company with a bigger market share has higher risks. Some of the key risk factors that are concerning to the Company are:

Operational risks:

Fluctuations in the price and availability of the main raw material may have an impact in the demand and supply gap and may pose a challenge to the Companys competitive position.

Financial risks:

Your company must import raw materials in a timely manner, which requires substantial working capital. This calls for a careful and strategic approach to raw material procurement, taking into account the available financial resources and associated risks.

Regulatory and Legal risks:

The company must comply with various regulations imposed by Central, State, and local authorities within the specified timeframes. Failure to do so may result in significant penalties, sanctions, or other legal consequences.

Competition risks:

As the industry is highly competitive, your Company strives to mitigate this risk by focusing on unique value propositions such as superior quality, customer service and broaden the product segment to tap into new customer segments.

Risk management:

The Company monitors, analyses and assesses various parameters of these risks and has placed efficient strategic measures which are in line with normal industrial practice.

Internal Control Systems and their adequacy

The Company has established an efficient internal controls and audit procedures, commensurate with its size and nature of its operations. This is further strengthened by the Internal Audit done concurrently whose findings are discussed by the Board of Directors to address and act upon the observations made thereunder.

Besides, the Company has an Audit Committee, comprising NonExecutive Directors, to monitor its financial systems, controls, management and operations.

Discussion on financial performance with respect to operational performance

The company demonstrated strong resilience during the financial year, reporting a significant surge in standalone revenue from operations compared to the previous year.

The total income from operations on standalone increased by 18.75%. from Rs. 13,116.28 Lakhs in previous year 202324 to Rs. 15,575.01 Lakhs in 202425. Profit before tax (PBT) and after exceptional items from continuing operations on a standalone basis increased by 551% from Rs. 296.15 Lakhs in 202324 to Rs. 1929.06 Lakhs in 202425. After accounting for the provision for tax of Rs. 504.84 Lakhs, profit after tax (PAT) on continuing operations on a standalone basis increased by 1011% from Rs. 128.95 Lakhs in 202324 to Rs. 1,433.28 Lakhs in 202425.

Managerial Developments in Human Resources and Industrial Relation

The Company believes that the Employees are the vital assets and their active continuity with the Company during a dynamic, challenging and competitive environment is the objective that the Company focuses on. The Company aims to match the individual needs with those of the organization and provide internal support so both can accomplish their goals. This entails creating a growth culture with programs and policies that promote upskilling and development.

Number of people employed and on the payrolls of the Company is 121 as on 31st March 2025.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefore, including:

PARTICULARS	202425	202324
A: Profitability ratios
Operating Profit Margin	10.02%	Nil
Net Profit Margin	9.41%	1.14%
Return on Equity	6.92%	0.73%
B. Ratio for Assessing Financial Health
Capital Turnover Ratio	1.09	0.99
Fixed Assets Turnover Ratio	2.24	2.51
Inventory Turnover Ratio	1.57	1.43
Debtors Turnover Ratio	11.73	8.63
Current Ratio	24.18	20.96
D: Earnings and dividend ratio
Dividend percentage	10%	10%
Earnings per Share	32.81	3.34
Book Value Per share	489.92	476.52

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% and more as compared to the immediately previous financial year) in key financial ratios.

Ratios where there has been significant change from Financial Year 202324 to Financial Year 202425 Increase in current ratio:

The profits earned by the company during the year have been invested in short term fixed deposits with banks and financial institutions leading to increase in the current asset. Hence increase in the ratio.

Return on equity, Return on capital employed and Net profit Ratio :

Higher sales volumes contributed to operational efficiency, resulting in an increased ratios.

Cautionary Statement

The Management Discussion and Analysis Report contains forwarding looking statements based upon the data available with the Company, assumptions with regard to global economic conditions, the Government policies etc. The Company cannot guarantee the accuracy of assumptions and perceived performance of the Company in future. Therefore, it is cautioned that the actual results may materially differ from those expressed or implied in the report.

For and on behalf of the Board of Directors KANCHI KARPOORAM LIMITED

Suresh Veerchandji Shah

Managing Director DIN: 01659809

Place: Chennai Date: 13^th August 2025

Dipesh Suresh Jain

Managing Director DIN: 01659930