Modi Naturals Ltd Management Discussions

In CY 2024, the global economy navigated a transitional phase marked by resilience and uncertainty due to geopolitical shifts, trade policy changes, and monetary adjustments. While inflationary pressures eased and economic activity held steady in most regions, disruptions caused by global conflicts, election cycles, and trade realignments created uneven momentum. However, as it progressed through 2025, the landscape is undergoing significant shifts due to escalating geopolitical tensionsand evolving economic challenges. Source: IMF Report on World Economic Outlook, April 2025

India remains one of the fastest-growing major economies, with the IMF projecting 6.5% GDP growth for FY 2024-25 and FY 2025.26. Key drivers sustaining Indias outlook include Rural demand recovery, supported by a favourable monsoon and government spending, Urban consumption resilience, particularly among upper-income segments and Ongoing public infrastructure investments and improvements in the business environment. Source: Economic Survey 2024-25, IMF Report January 2025

The FMCG sector experienced steady growth during FY 2024-25, underpinned by a gradual recovery in rural demand and relatively stable urban consumption. Rural markets benefitted from improved minimum support prices (MSPs), favourable monsoon conditions,and continued government interventions, while urban demand presented a mixed picture buoyed by the upper-middle and affluent segments, but tempered at the mass level by persistent retail and food inflation. Key sectoral trends included the continued momentum in Modern Trade and E-commerce channels, even as General Trade remained under pressure. Notably, retail inflation moderated towards the latter part of the fiscal year, offering some reliefto consumers and helping restore confidence. The edible oil sector remains a vital part of Indias food economy, though it faces challenges such as supply volatility,

fragmented production, and inconsistent reporting. In a significant regulatory development, the Government of

India notified the Vegetable Oil Products, Production and Availability (VOPPA) Regulation Order, 2025 on August 1, aimed at improving transparency, monitoring, and price stability. As part of the organised sector, compliance with the new: norms is well within operational capacity. Existing

reporting systems arandih.gn degree of transparency ensure alignment with regulatory intent, resulting in minimal

disruption. Thechnngevmeaxpedh tbdeter hoarding,stabilise supply chains, and enhance policy responsiveness. The regulatory shift represems:noppqmmty to strengthen governance and reinforce market discipline. While the

implementation phase may po: s for unorgamsqn players, it offers ong -term benefits for producers

aaherlngwma“‘ >rms. Or

Indias ethanol sector is uncj‘ergolng a transformative phase, driven by the gwamment ‘s ambitious target of

achieving20%ethanol blending in petrolunder its clean energy roadmap. With grain-based ethanol production now surpassing sugar-based output, the policy landscape is evolving rapidly to balance energy needs with food security ‘and feedstock availability: While concerns around rising grain prices and potential implications for food supply

persist, the governments racent move to allocate 52 lakh lonnesofsurplus@cafor ethanol production, supported by rgeted subsidies, reflects astrong commitment to ensuring feedstocksupplyam economic viability for producers.

* OurBusiness Performance

Consumer Division

Ourjourney into the health and wellness space began with the launch of Oleev in 2012, marking a significant pivot in our approach to consumer health. Oleev, especially Oleev Active, has since become a trusted name among health- conscious Indian consumers, combining the goodness of olive oil with the functionality of everyday cooking oils.

With afocus on heart health, cholesterol management, and active lifestyles, Oleev oils have grown to embody quality,

wellness, and aspirational living. We are Indias only major producer of multi-source edible oil blended with olive oil and proudly rankas the third-largest super-premium edible oil brandin the country. Expanding on this vision,we introduced Oleev Kitchen, a sub-brand offering health-forward convenience foods such as Pasta, and Super Soup Indiasfirst ready-to-cook soup fortified with pre- and probiotics. Diversifying further into snacking and beverages, we launched Pipo (flavoured popcorn), Roasted Peanuts in health-centric variants, and

Jynx, a powdered vitamin-C drink mix each designed to blend taste, nutrition, and convenience. Consistently

prioritising innovation over commoditisation, we have consciously stayed away from mass-market oils like soybean or mustard, focusing instead on differentiated, value-added offerings tailored to today s wellness-focused consumer. During the year, brand-building remained a strategic priority, highlighted by the appointment of Karishma Kapoor as

Oleevs brand ambassador, which significantly enhanced brand recall and emotional connection. On the distribution

front, we strengthened General Trade through targeted interventions and expanded presence in Modern Trade, E- commerce,and Quick Commerce. We leveraged the strong distribution ecosystem built around our edible oil business spanning traditional retail, Modern Trade, E-commerce platforms, Quick Commerce, and CSD to efficiently scale our new product lines. This integrated multi-channel approach ensures heightened visibility, availability, and consumer reach. Our ability to monitor emerging trends and rapidly innovate has been key to identifying market gaps and launching relevant products, reinforcing our position as a forward-looking, health-first consumer brand. Over the past10 years, our Consumer Division revenues have increased from 43 crore in FY15 to 179 crore in FY25, with a CAGR of 15%, reflecting the strength of our brands and growing consumer demand. Further, to support and accelerate continued momentum, we are strategically reinvesting cash flows generated from our Ethanol business

into the Consumer segment, ensuring sustained growth and

.&‘@ dst rising energy demands and the Government of Indias ambitious tar achieving20% ethanol blendingin petrol. Ethanol Division of Modi Biotech a wholly owned subsidiary has emerged as a key growth driver in the country ng biofuel value chain. Modi Naturals has infused 35% of the total investment in Modi Biotech Pvt.Ltd. throughequitycontribution, while the remaining funding requirement has been metthfough debt.

Plant is strategically located in Raipur, Chhattisgarh, the facility enjoys significant logistical advantages, including proximity to grain-surplus regions and seamless connectivity to oil depots and national distribution networks. This advantageous positioning ensures cost-effective raw material procurement and efficient distribution, thereby enhancing operational efficiency and competitiveness.

Commercial operations commenced in November 2023 with a first installed capacity of 130 KLPD, backed by a capital

investment of 150 crore. Operating at full capacity,the distillery has successfully integrated into the national ethanol blending programme, contributing meaningfullyto Indias clean energy agenda while maintaining robust operating margins. In November 2024,we secured a breakthrough order worth 3300 crore for the upcoming ethanol year (November - Octaber), reflecting strong market demand and reinforcing confidence in the ethanol businesss execution capabilities and product quality. This milestone not only demonstrates the operational excellence but also underlinesits strategic relevance in the evolving energy ecosystem. Encouraged by strong performance, supportive government policies including capital subsidies and rice allocation and resilient demand fundamentals, the Company has initiated a capacity expansion of 180 KLPD, With a

second-phase investment of Y100 crore, the total installed capacity will increase to 310 KLPD upon completion.

Additionally, improved realisations from by-products, such as Distillers Dried Grains with Solubles (DDGS), CO2 etc., are contributing positively to overall margins. These by-product synergies not only improve profitability but also strengthen the Companys sustainability credentials by reducing waste and maximising resource utilisation. This expansion underscores the Companys commitment to innovation, sustainability, and alignment with Indias

nationalenergy objectives.

Financial Performance Fy25

At the outset of the financial year,the Company set ambitious performance targets Revenue of 680 crore, EBITDA of 50 crore, and PAT of I30 crore. These targets were met, driven by robust execution and favourable market

dynamics. This performance highlights the strength of our operational framework and our ability to effectively

respond toa mand enposi IbnmentacmssalltusmessFMsions

The consolidats m operations was up by 65.8% to Rs. 662.9 crore year-on-year. EBITDA grew by 517% to

Rs.56 crore. Esm i 4%. PAT became positive to Rs. 31 crore as compared to a loss of Rs. 1.4 crore in 48.8 crores ver \]s negative cash flow of Rs. 6.8 crore in FY 24. ROCE

Debt-to-equity stood at1.22 cr in FY25 versus 187cr in

engine and sxrateg ic enabler, generating strong cash nws that are bemg vennvested into expanding our FMCG pottfolio driving innovation, strengthening dastributlon, \d enhancing bm d eqalu.Thus synergy is fostering a

tainable, diversified gmwm- model and improving overall business resilxm ForFY 202526, we expect to il u-a?t in the range. & 0f 2850-880 crore, EBITDA between 780-85 c i W between 242-48 crore. The

?>~. nytem;@sun:ra;kmachmei ted guidance. q Al ‘ em ident in Indias long-term economic mjemry. su by rising Jomestic consumpt-on,‘ ) \ , reasing glol mznmo%kcmhunhummnmnon distribution expan ions us wellto emevgmgbpgonumua Aligned withcapture the nations clean enert i m%rvModl urals is well placed to deliver sustainable, stakehold m;lveuva&g{uheyearsahmd