Kovilpatti Lakshmi Roller Flour Mills Ltd Management Discussions

INDUSTRY STRUCTURE, DEVELOPMENTS AND FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Results

The Companys total income stood at 41,299.02 lakhs in contrast to 42,879.75 lakhs achieved during the previous year 2025-26.

The EBIDTA of the Company for FY 2025-26 is 2,639.66 lakhs compared to 1,688.34 lakhs in FY 2024-25.

The PAT reported for FY 2025-26 is 818.03 Lakhs compared to 128.97 lakhs in FY 2024-25.

OPPORTUNITIES, THREATS, RISKS & CONCERNS

Foods Division Opportunities

• Rising demand for branded, hygienically processed, and packaged staple foods continues to support growth in the organized food sector.

• Increasing consumer preference for value-added wheat-based products, including fortified flour, multigrain flour, whole wheat products, and convenience foods, provides opportunities for product diversification and improved margins.

• Expansion of modern retail, e-commerce platforms, and institutional sales channels enhances market access and customer reach.

• Government initiatives to strengthen food processing, warehousing, logistics, and agricultural infrastructure are expected to improve supply chain efficiency.

• Growing awareness of nutrition and food safety offers opportunities to develop premium and health-focused product portfolios.

• Export opportunities for processed wheat products may improve, subject to domestic availability and Government export policies.

Threats

• Wheat prices continued to remain volatile during FY 2025-26 due to changing weather patterns, procurement policies, domestic demand, and global market developments.

• Any reduction in wheat production caused by heat waves, unseasonal rainfall, or other climatic events may impact the availability and quality of wheat.

• Government interventions such as minimum support price (MSP) revisions, procurement \ by public agencies, stock regulations, export restrictions, or import policy changes may influence raw material availability and procurement costs.

• Intensifying competition from organized and regional brands may exert pressure on pricing and market share.

• Rising costs of packaging materials, transportation, fuel, power, and labour could affect profitability if not adequately mitigated.

Risks and Concerns

• Raw Material Availability Risk: Wheat procurement is dependent on seasonal production, crop quality, and market arrivals. Any shortfall in production or quality deterioration may increase procurement costs and affect manufacturing efficiency.

• Commodity Price Risk: Significant fluctuations in wheat and other agricultural commodity prices may impact gross margins and working capital requirements.

• Climate Risk: Increasing frequency of extreme weather events may adversely affect agricultural output, supply continuity, and procurement planning.

• Supply Chain Risk: Transportation disruptions, logistics bottlenecks, and storage constraints could affect timely procurement and product deliveries.

• Regulatory Risk: Changes in food safety regulations, quality standards, environmental requirements, or trade policies may require operational adjustments and additional compliance costs.

• Consumer Demand Risk: Changes in consumer preferences, pricing sensitivity, and competitive product launches could impact sales volumes.

Engineering Division

Opportunities

• Continued investments in infrastructure, manufacturing, renewable energy, power, and industrial modernization are expected to support demand for engineering products and services.

• Government initiatives promoting domestic manufacturing and infrastructure development provide opportunities for capacity expansion and localization.

• Increasing adoption of automation, digital manufacturing, energy-efficient equipment, \ and Industry 4.0 technologies offers avenues for innovation and value-added solutions.

• Expansion of aftermarket services, maintenance contracts, and refurbishment activities provides recurring revenue opportunities.

• Export opportunities may improve with increasing global demand for competitively priced engineering products manufactured in India.

Threats

• Volatility in steel, non-ferrous metals, and other industrial raw material prices may affect manufacturing costs and profitability.

• Supply chain disruptions, geopolitical uncertainties, and longer lead times for imported components may impact production schedules and project execution.

• Intense competition from domestic and international manufacturers may result in pricing pressure and lower margins.

• Delay or postponement of capital expenditure by industrial customers due to economic uncertainty could impact order inflows.

• Rapid technological advancements require continuous investment in product development and manufacturing capabilities.

Risks and Concerns

• Raw Material Price Risk: Fluctuations in steel and engineering material prices may adversely affect project costs and margins.

• Supply Chain Risk: Dependence on timely availability of critical components and imported equipment exposes the business to procurement and logistics risks.

• Execution Risk: Delays in customer approvals, project implementation, or commissioning may impact revenue recognition and profitability.

• Technology Risk: Failure to adopt emerging technologies or changing customer requirements could reduce competitiveness.

• Customer Concentration Risk: Dependence on a limited number of key customers or sectors may increase business risk during industry slowdowns.

• Human Resource Risk: Availability and retention of skilled engineers and technicians remain critical for maintaining operational excellence.

• Economic and Geopolitical Risk: Inflation, interest rate movements, currency fluctuations,^ and geopolitical developments could influence investment decisions and demand for engineering products.

SEGMENT-WISE AND PRODUCT-WISE PERFORMANCE

Segment-wise and product-wise results are stated separately under the relevant notes on accounts to the financial statements.

Outlook

The Company continues to monitor developments in the domestic and global business environment, including agricultural production trends, wheat availability, commodity price movements, supply chain conditions, regulatory changes, and macroeconomic indicators. While volatility in raw material prices, climate-related uncertainties, and geopolitical developments remain key concerns, the Company is focused on strengthening procurement strategies, improving operational efficiencies, enhancing supply chain resilience, expanding value-added products, and maintaining prudent risk management practices to sustain long- term growth and profitability.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Planned periodic reviews are carried out resulting in identification of deficiencies and formulation of time bound action plans to improve efficiency. The adequacy of the internal control systems is periodically reviewed by the Audit Committee. This, supplemented with existing periodical management reviews, will enable the Company to improve its monitoring system at all levels.

The Company has internal control procedures commensurate with its size and the nature of its business for purchase of raw materials, plant and machinery, components, other items and sale of goods.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the company during the financial year 2024-2026 has been discussed in the Directors Report and the audited financial statements, which has been prepared in accordance with the requirement of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, discloses a true and fair view of the performance of the company during the said period.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company believes that its people are a key differentiator, especially in knowledge driven, competitive and a global business environment. Adapting work culture to suit the dynamic balancing of people requirements and employee needs is an ongoing process. Fundamental HR processes which enable higher performance orientation, speed, skill and competency development, talent management are corner stones for the success of any organization. The Company is giving direct employment to 237 employees as in the past, the industrial relations continued to remain cordial in all the divisions of the Company.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS INCLUDING DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

Sl. No	Description	31-03-2026	31-03-2025	% change	Explanations, if any
1	Current Ratio	1.23	1.38	-10.87%	-
2	Debt Equity Ratio	1.10	1.01	8.91%	-
3	Debt Service Coverage Ratio	1.41	0.94	-28.79%	Due to Increase in Profitability
4	Return on Equity Ratio (%)	12.23%	1.63%	530.41%	Due to Increase in Profitability
5	Inventory Turnover Ratio	7.00	6.83	2.49%	-
6	Trade Receivables Turnover Ratio	17.99	22.55	-20.22%
7	Trade Payables Turnover Ratio	16.68	24.65	-32.33%	Due to Drop in Revenue and Increase in Avg Trade Payables.
8	Working capital Turnover Ratio	23.46	19.17	22.38%	-
9	Net profit ratio (%)	2.47%	0.79%	723.33%	Due to Increase in Profitability
10	Return on Capital Employed (%)	6.86%	4.20%	-25.84%	Due to Increase in Profitability
11	Return on Investment (%)	NA	NA	-	-

CAUTIONARY STATEMENT

Management Discussion and Analysis forming part of the Directors Report is in Compliance with Corporate Governance Standards incorporated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with Stock Exchange and such statements may be "forward looking" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include Economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.

	For and on behalf of the Board
	Sharath Jagannathan	Ashwin Chandran
Place : Coimbatore	Chairman and Managing Director	Director
Date : May 29, 2026	DIN : 07298941	DIN : 00001884