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 2025 and 3.1 percent in 2026, an upward revision from the April 2025 World Economic Outlook. This reflects front-loading ahead of tariffs, lower effective tariff rates, better financial conditions, and fiscal expansion in some major jurisdictions. Global inflation is expected to fall, but US inflation is predicted to stay above target. Downside risks from potentially higher tariffs, elevated uncertainty, and geopolitical tensions persist. Restoring confidence, predictability, and sustainability remains a key policy priority.

Indian Economy

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

India is now the worlds fourth-largest economy and is projected to become the third largest by 2030-31 with a GDP of US$ 7.3 trillion. This transformation stems from a decade of focused governance, structural reforms, and strengthened global positioning. Backed by strong domestic demand, favourable demographics, and sustained policy reforms, India continues to enhance its global footprint in trade, investment, and innovation. Over the past decade, Indias GDP at current prices has surged from US$ 1.23 trillion in FY15 to an estimated US$ 3.82 trillion in FY25, tripling in just ten years. In FY25, Indias nominal GDP grew by 9.9% and real GDP by 6.5%, with similar trends expected in FY26, indicating sustained economic momentum. This trajectory is underpinned by macroeconomic stability, a resilient external sector, narrowing fiscal deficit, easing inflation, and high consumption expenditure. Additionally, improving employment prospects and the governments focus on long-term structural reforms are expected to play a key role in sustaining growth.

Indias headline annual retail inflation fell from 2.82% in May to 2.10% in June 2025, primarily driven by a significant decline in food prices, which turned negative at -1.06%. This marks the lowest headline CPI since

January 2019. Indias job market rebounded in May 2025 with an 8.9% rise in listings after eight months of decline, led by strong hiring in childcare (27%), personal care and home health (25%), education (24%), and manufacturing (22%), according to Indeed.

Edible Oil Industry

For the 2025 26 marketing year, FAS forecasts soybean production in India at 12.50 mt, down slightly from last years record 12.9 mt, largely due to a small dip in area (to 13.30 m ha) and a yield decline to 0.94 t/ha. Crushing is expected to hover around 12.5 12.7 mt, with soymeal output staying roughly at 9.3 9.4 mt, assuming export momentum remains unchanged.

Soybean oil output has been revised downward to 2.04 mt, and imports are now projected at 4.6 mt, reflecting greater domestic availability and carry over stocks. USDA now projects Indias total oilseed production at 43 mt, with rapeseed mustard finally overtaking soybean in output shifting Indias oilseed mix toward rabi crops.

With expectations for lower international soybean oil prices, the FAS has raised its import forecast to 3.7 million tonnes, an increase of 21% compared to 2023-24.

• Opportunities and Threats

Opportunities

National Mission on Edible Oils Oilseeds (NMEO-Oilseeds)

The government has launched the NMEO-Oilseeds to boost domestic oilseed production. The mission focuses on high-yielding seed varieties, better market linkages, procurement, value addition, crop insurance, and adoption of modern farming techniques in mustard, groundnut, sesame, soybean, and sunflower cultivation. Currently, the existing yield gap in oilseeds is about 60%, and reducing the productivity gap through varietal development to 20% in the next five years can lead to additional production of 13-14 million tonnes (MT) of oilseeds or 3-4 MT of edible oils. This can be achieved without bringing any additional area under oilseeds cultivation. Drishti IAS+1Khetigaadi+1

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 face a substantial demand-supply gap in edible oils, leading to heavy reliance on imports to meet domestic needs. Imports accounted for 60% of Indias edible oil requirements in 2022-23, with palm oil, soybean oil, and sunflower oil being the major contributors. Drishti IAS

Rainfed Farming and Low Productivity

Nearly 72% of Indias oilseed cultivation is rainfed, predominantly carried out by small farmers, leading to low productivity. The limited irrigation coverage and vulnerability to erratic weather patterns pose challenges to increasing domestic oilseed production. Drishti IAS+1Drishti IAS+1Drishti IAS

Policy Challenges and Market Dynamics

The reduction in import duties on edible oils to curb rising food prices has led to concerns among domestic producers. While the move aims to make imported edible oils more affordable, it may impact local farmers and processors by increasing competition from cheaper imports. Business Standard+1The Economic Times+1

Surge in imports of edible oils

The surge in import of edible oils has affected price realisation of oilseeds farmers. Indias edible oil imports rose sharply by 38.5% to 15.9 lakh tonnes in November 2024, driven by a significant surge in shipments of crude sunflower oil and crude soybean oil, according to data from the Solvent Extractors Association of

India (SEA). Most of the imports are from Malaysia, Indonesia, Argentina, Brazil, Russia and Ukraine.

To contain retail level edible oil prices during FY 2024 25, the government maintained reduced import duties through March 31, 2025. Crude palm, soybean and sunflower oils attracted only a 5 % agriculture infrastructure cess plus a 10 % surcharge (educational/social welfare cess), for an effective duty of ~5.5 %. In June 2023, the government also cut basic duty on refined soybean and sunflower oils from 17.5 % to 12.5 % (effective ~13.7 %). Industry body SEA cautioned that prolonged low duty structure could turn India into a dumping ground for cheap edible oils, harming both domestic oilseed farmers and oil processors.

• Segment-wise Performance

	Year Ended
Particulars	31.03.2025	31.03.2024
1 Segment-wise Revenue
(a) Agri Commodities	1723.71	1693.90
(b) Power	1.14	5.77
(c) Other	3.85	6.38
Total	1728.70	1706.05
Net Sales/Income from Operations	1728.70	1706.05
2 Segment Results
Profit/Loss before Interest and Tax:
(a) Agri Commodities	61.67	47.05
(b) Power	(0.70)	3.87
Total	60.97	50.92
Less: Interest	11.10	8.82
Total Profit Before tax	49.87	42.11

• Outlook

On the processing front, operating volumes in FY 2024 25 were higher than in FY 2023 24, and this outcome combined with an improvement in realised unit prices translated into increased turnover for FY 2024 25. 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. 1724.85 Crores as compared to Rs 1699.67 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. 36.90 Crores, as compared to Rs. 31.26 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	2023-24	2024-25	Variance
1.	Debtors Turnover	15.07	21.71	44%
2.	Inventory Turnover	8.04	6.51	-19%
3.	Interest Coverage Ratio*	5.78	5.49	9.47%
4.	Current Ratio**	2.89	4.34	50%
5.	Debt-Equity Ratio***	0.35	0.14	-59%
6.	Operating Profit Margin %	16.11	17.23	7%
7.	Net Profit Margin %****	1.83	2.13	17%
8.	Return on Net Worth	16.11	17.23	7%

Explanation (For variance of 25% or more):

*The gross revenue has improved due to increase in volume of business, leading to better fund management. **Ratio have an adverse effect due to significant increase in the value short term Borrowings. ***The overall change in the Short-term borrowing to meet the Working Capital Requirement has a significant impact in the ration in current year. ****The ratio have changed mainly due to variation in Net Profit is due to volatility in price of commodity in the market and due to decrease in revenue

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: 01-09-2025	Vijay Shrishrimal	Dhirendra Shrishrimal
Place: Raipur	Chairman & Managing	Whole-time Director &
	Director	CFO
	DIN: 00323316	DIN: 00324169