KN Agri Resources Ltd Management Discussions

Industry Structure and Developments

Global Economy https://www.imf.org/en/Publications/WEO

Global growth is projected at 3.0 percent for 2026 and 3.4 percent for 2027, broadly unchanged cumulatively from the April 2026 World Economic Outlook. The outlook is uneven: The war shock is weighing on energy importers and vulnerable economies, while AI-driven demand is lifting countries integrated into the global technology value chain

Indian Economy https://www.ibef.org/economy/monthly-economic-report

Indias economy sustained its growth momentum during the first quarter of FY27, supported by resilient domestic demand despite renewed global uncertainties. High-frequency indicators remained broadly positive, with e-way bill generation growing by 12.4% year-on-year, manufacturing PMI at 54.6 and services PMI at 58.7 during Q1 FY27. Electricity consumption expanded by 8.6% while IIP growth strengthened to 5.8% and the revised Index of Core Industries recorded 5.0% growth in June 2026. Domestic automobile sales also remained robust, increasing by 23.2% during April-June 2026. The launch of the Index of Services Production (ISP), alongside the revised industrial statistics framework, is expected to improve high-frequency monitoring of economic activity and support informed policymaking. Indias external sector continued to demonstrate resilience, with total exports of goods and services increasing by 9.5% year-on-year in June 2026. Merchandise exports remained the principal driver of export growth, while the sustained surplus in services trade continued to cushion the overall trade balance. India also strengthened its trade integration through the India-Oman Comprehensive Economic Partnership Agreement (CEPA), which came into force on June 1, 2026, while the India-United Kingdom Comprehensive Economic and Trade

Edible Oil Industry

For the 2026-27 marketing year, Indias total oilseed production is forecast at around 41.1 million tonnes (MT), broadly in line with the previous year. Soybean production is expected to decline to approximately 10.35 MT, mainly due to lower acreage of around 12.0 million hectares and a yield of about 0.92 t/ha. Soybean crushing is projected at around 9.3 MT, producing approximately 7.44 MT of soybean. Rapeseed-mustard is expected to remain Indias leading oilseed, with production rising to around 12.1 MT, reflecting the continued shift toward rabi oilseed crops.

Soybean oil production is forecast at approximately 1.68 MT, while soybean-oil imports are expected to increase to around 5.6 MT as domestic production remains insufficient to meet demand. Total vegetable-oil production is projected at about 9.5 MT, against imports of approximately 16.9 MT, highlighting Indias continued dependence on overseas supplies. Palm-oil imports are forecast at around 9.0 MT, while sunflower-oil imports are expected at approximately 2.2 MT. Overall, the edible-oil market in 2026-27 is expected to remain strongly import-dependent, supported by rising domestic consumption and competitive international oil prices.

Opportunities and Threats

Opportunities

National Mission on Edible Oils - Oilseeds (NMEO-Oilseeds) The Government of India continues to implement the National Mission on Edible Oils-Oilseeds (NMEO-Oilseeds) with an outlay of 10,103 crore to enhance domestic oilseed production and reduce dependence on edible-oil imports. The Mission targets increasing oilseed production to 69.7 MT by 2030-31 through improved seeds, technology adoption, market linkages and value-chain development.

During Kharif 2026-27, oilseed acreage stood at 200.08 lakh hectares as of 28 August 2026, up from 191.45 lakh hectares in the corresponding period of 2025-26. The continued policy support is expected to improve domestic oilseed availability and strengthen the edible-oil value chain.

Increased Minimum Support Price (MSP) for Oilseeds The government has increased the MSP for oilseeds, aiming to provide better price realization for farmers and encourage them to cultivate oilseeds. This move is expected to boost domestic production and reduce dependence on imports. Drishti IAS

Technological Advancements and Modern Farming Techniques The adoption of modern farming techniques and technological advancements can enhance productivity in oilseed cultivation. Investments in research and development for high-yielding seed varieties and efficient farming practices can contribute to achieving self-sufficiency in edible oils.

Threats

High Dependence on Imports India continues to have a significant demand-supply gap in edible oils, resulting in substantial dependence on imports. Imported edible oils meet around 56% of domestic consumption, with palm oil, soybean oil and sunflower oil accounting for the major share. This dependence exposes the domestic market to global price volatility and international supply conditions.

Rainfed Farming and Low Productivity A significant share of Indias oilseed cultivation is rainfed and dominated by small farmers, resulting in relatively low productivity. Limited irrigation and increasing weather variability remain key challenges to improving oilseed yields and achieving higher domestic production.

Policy Challenges and Market Dynamics Lower import duties on edible oils, aimed at controlling food prices, have increased competition from cheaper imports. While beneficial for consumers, prolonged low duties may pressure domestic oilseed prices and margins of local farmers and processors, highlighting the need to balance consumer affordability with domestic production.

Surge in imports of edible oils The surge in edible oil imports has put pressure on domestic oilseed prices and farmer realisations. India continues to rely significantly on imports from major producing countries such as Indonesia, Malaysia, Argentina, Brazil, Russia and Ukraine, increasing the vulnerability of domestic oilseed farmers to global price movements.

The Government has taken measures on import duties and pricing to balance consumer interests with domestic production. However, prolonged availability of cheaper imported edible oils remains a concern for domestic oilseed growers and processors, highlighting the need to strengthen domestic oilseed production, productivity and market linkages.

Segment-wise Performance Rs. (in Crores)

Particulars	Year Ended 31.03.2026	Year Ended 31.03.2025
1 Segment-wise Revenue
(a) Agri Commodities	1808.35	1723.71
(b) Power	1.27	1.14
(c) Other	7.40	3.85
Total	1817.02	1728.70
Net Sales/Income from Operations	1817.02	1728.70
2 Segment Results
Profit/Loss before Interest and Tax:
(a) Agri Commodities	55.17	61.67
(b) Power	(0.42)	(0.70)
Total	54.74	60.97
Less: Interest	10.70	11.10
Total Profit Before tax	44.05	49.87

Outlook On the processing front, operating volumes in FY 2025-26 were higher than in FY 2024-25, and this outcome combined with an improvement in realised unit prices-translated into increased turnover for FY 2025-26. Apart from processing, the agri supply chain business has also increased substantially.

Risks and Concerns The Company is committed to recognizing and managing the risks it is exposed to, both internal and external, and has put in place mechanisms to handle the same proactively and efficiently. The Company also recognizes that these risks could adversely affect its ability to create value for all stakeholders, and has taken steps to mitigate the same.

However, the Board does not perceive any major risks in the foreseeable future.

Internal Control Systems and their adequacy Your Company has in place an adequate system of internal control commensurate with its size and nature of business. The system provides a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies.

The Company has put in place proper controls, which are reviewed at regular intervals to ensure that transactions are properly authorized and correctly reported and assets are safeguarded.

Financial performance During the Year under review, Your Company has recorded a turnover of Rs. 1809.62 Crores as compared to Rs 1724.85 crores. The turnover has remained almost same despite much higher processing due to lower commodity prices. The Company registered the PAT (Profit after Tax) of Rs. 31.70 Crores, as compared to Rs. 36.90 Crores, during the previous financial year. This represents a marked improvement in PAT margin, reflecting stronger cost control and operational efficiency, even though the increase in turnover was modest.

Human Resources/Industrial Relations Human capital is viewed as a valuable resource and an integral part of the Companys success. The Company recognizes that its employees are its principal assets.

The company continues to attract and retain quality people. The Company also recognizes the importance of providing training opportunities to its employees. The Company believes in establishing and building a performance and competency driven culture amongst its employees with greater sense of accountability and responsibility.

The industrial relations within the Company have remained harmonious throughout the year.

Key Financial Ratios

S.No.	Particulars	2024-25	2025-26	Variance
1.	Debtors Turnover*	21.71	33.15	53%
2.	Inventory Turnover	6.51	6.74	3%
3.	Interest Coverage Ratio*	0.98	1.22	25%
4.	Current Ratio**	4.34	8.86	104%
5.	Debt-Equity Ratio***	0.14	0.09	-41%
6.	Operating Profit Margin %	6.57	6.43	-2.13%
7.	Net Profit Margin %****	2.13	1.74	-18%
8.	Return on Net Worth	17.23	14.18	-18%

Explanation (For variance of 25% or more): *The ratio has changed due to decline in the Average Trade Receivable to Rs. 54.59 Crores (PY Rs. 79.46 Crores). **Ratio have a positive effect due to significant decrease in short term Borrowings to Rs.42.46 Crores (PY Rs. 88.87 Crores).

Cautionary Statement Statements made herein, in the Management Discussion & Analysis Report describing the Companys projections, estimates, expectations, plans or predictions or industry conditions or events are forward looking statement. The actual results may differ from those expected or predicted, since the Companys operations are influenced by many external factors which are beyond the control of your Company. These include climatic and economic conditions affecting demand and supply, government regulations, taxation, and natural calamities over which the Company does not have any direct control.

	For and on Behalf of Board of Directors,
		KN Agri Resources Limited
Date: 01-09-2026	Vijay Shrishrimal	Dhirendra Shrishrimal
Place: Raipur	Managing Director	Whole-time Director & CFO
	DIN: 00323316	DIN: 00324169