MRP Agro Ltd Management Discussions

Global Economic Outlook

The global economy navigated a complex operating environment during FY 2025–26, marked by geopolitical tensions, evolving trade policies, and persistent supply chain realignments. The ongoing conflicts in West Asia and Eastern Europe disrupted key trade routes and energy markets, contributing to commodity price volatility, inflationary pressures, and heightened uncertainty across global financial markets.

Trade dynamics remained fluid as major economies increasingly adopted protectionist measures and revised tariff regimes. These developments prompted businesses to diversify sourcing strategies and strengthen supply chain resilience through near-shoring and friend-shoring initiatives. While these measures enhanced long-term resilience, they also resulted in higher transition costs and operational adjustments.

Despite these challenges, the global economy demonstrated resilience, supported primarily by robust growth in emerging markets. Global GDP expanded by 3.4% in the year 2025, with Emerging Market and Developing Economies (EMDEs) growing by 4.4% while advanced economies recorded a more modest growth of 1.9%. Inflationary pressures moderated during the year, with global inflation easing to 4.1% in 2025, reflecting the gradual normalisation of monetary conditions and supply chains.

Looking ahead, the World Bank, in its June 2026 Global Economic Prospects, projects global growth of 2.5% in 2026 and 2.8% in 2027, reflecting the impact of geopolitical tensions, higher energy prices, trade-related uncertainty and tighter financial conditions. While global trade and investment activity are expected to remain resilient, the operating environment continues to warrant prudent policy measures, supply chain diversification, and strategic agility from businesses across industries.

India continued to strengthen its position as one of the fastest-growing major economies, supported by resilient domestic demand, sustained public investment, and stable macroeconomic fundamentals. While inflation remains exposed to external risks arising from geopolitical tensions and energy price volatility, favourable agricultural output, comfortable food grain buffer stocks, and adequate reservoir levels are expected to support the moderation of price pressures.

Over the next decade, Indias expanding economic base and rising per capita income are expected to support continued growth in consumption and a gradual shift in consumption patterns towards premium, convenience-oriented and value-added products. This structural transformation is driving a shift in consumption patterns from essential spending towards premium, convenience-oriented, and value-added products.

Consumer spending on packaged foods has increased from approximately 4,800 per capita in 2020 to 7,600 in 2025, underscoring the growing demand for branded and packaged food products. Rising disposable incomes, rapid urbanisation, increasing workforce participation, changing household structures, and wider digital adoption continue to accelerate this trend. The rapid expansion of organised retail, e-commerce, and quick commerce is further enhancing product accessibility and supporting the premiumisation of food categories.

These structural drivers position Indias packaged food industry for sustained long-term growth, creating significant opportunities for organised players with strong brands, diversified product portfolios, and robust distribution capabilities.

India has a large and structurally significant foodgrain market, supported by a substantial domestic consumption base and a wide agricultural supply chain. As per the Third Advance Estimates released by the Department of Agriculture and Farmers Welfare, Indias foodgrain production for 2025-26 is estimated at 376.56 million tonnes, compared with 357.73 million tonnes in 2024-25, representing an increase of approximately 5.3% and the highest-ever estimated foodgrain production in the country. Rice production for 2025-26 is estimated at 154.02 million tonnes, while wheat production is estimated at 120.66 million tonnes.

CAGR: 4.21%

According to Mordor Intelligence, the Indian agriculture market was valued at approximately USD 452 billion in 2025 and is expected to reach USD 471.03 billion in the year 2026 and USD 578.89 billion by the year 2031, representing a CAGR of 4.21% during 2026-2031.

Indias agricultural exports increased from USD 34.5 billion in FY 2019-20 to USD 51.1 billion in FY 2024-25, representing a CAGR of 8.2%. The share of processed food exports increased to 20.4% in FY 2024-25, indicating increasing value addition within the agricultural export basket.

Expansion into value-added food processing: The proposed/established flour mill will enable the Company to move beyond trading of raw food grains into processing and value addition, allowing it to participate in a larger portion of the wheat-to-consumer value chain. This can also provide opportunities for improved product realisation and diversification of revenue streams.

Strong domestic wheat and foodgrain availability: Indias foodgrain production is estimated at a record 376.56 million tonnes for 2025-26, while wheat production is estimated at 120.66 million tonnes. The availability of a large domestic raw-material base supports the Companys ability to procure wheat and undertake milling operations.

Growing food-processing ecosystem: Government policy continues to encourage food processing and value addition. The Production Linked Incentive Scheme for Food Processing Industry (PLISFPI), with an approved outlay of 10,900 crore for FY 2021-22 to FY 2026-27, has supported expansion of processing capacity, investment and food-product sales. As of June 2026, projects supported under the scheme had created approximately 34 lakhs.

Export and wider market opportunities: Indias agricultural exports increased from USD 34.5 billion in FY 2019-20 to USD 51.1 billion in FY 2024-25, while the share of processed food in agricultural exports has also increased. This indicates an expanding opportunity for value-added agricultural products, subject to applicable export policies and market conditions.

The Company is engaged in the trading of food grains, fly ash and coal, including the import and export of these commodities, catering primarily to customers across domestic and industrial markets. With an established domestic procurement network, the Company has developed a presence across its key markets and focuses on efficient sourcing, quality and timely supply.

In addition to its trading activities, the Company is engaged in the dal processing business, wherein raw pulses are processed through cleaning, hulling and splitting to produce quality dal products. The Companys processing facility is equipped with appropriate processing capabilities and quality-control systems to support consistent product quality and meet customer requirements.

This diversification across commodity trading and food processing enables the Company to broaden its product portfolio, participate in value-added food processing and pursue opportunities across the agri-based value chain.

The Company continued to strengthen its product portfolio and market presence through focused business development and capacity expansion initiatives.

The Company continues to focus on strengthening its presence across its core businesses of food grains, fly ash and coal through focused sourcing, sales and distribution initiatives. Given the nature of the food grain business, sales and marketing activities play an important role in strengthening product visibility, communicating the Companys value proposition and expanding customer reach. The Company engages with customers through various marketing and communication platforms to enhance product awareness and support market development.

The Company has also made significant progress in the implementation of its Flour Mill Project, which is expected to strengthen its value-added food processing capabilities and support future growth. During the year:

• The Company sanctioned a term loan of ?8.00 crore for financing the project.
• An agreement was executed for the construction of a Pre-Engineered Building (PEB) at a contract value of ?6.51 crore.
• Purchase orders were placed with various suppliers for the procurement of plant and machinery required for the project.

The Company remains optimistic about the long-term growth prospects of its businesses. Increasing demand for quality food products, continued infrastructure development and the Companys planned manufacturing expansion are expected to support sustainable growth. The commissioning of the Flour Mill Project is anticipated to enhance operational efficiencies, improve product offerings and strengthen the Companys competitive position. The Company will continue to focus on prudent cost management, operational excellence, customer satisfaction and market expansion while maintaining a disciplined approach to risk management.

Commodity Price Volatility
The prices of food grains, coal and other traded commodities are influenced by factors such as crop output, seasonal demand, government procurement policies, global commodity trends and geopolitical developments. Significant price fluctuations may impact procurement costs, inventory valuation and operating margins.

Supply Chain and Procurement Risk
Timely availability of quality raw materials is critical to the Companys operations. Factors such as adverse weather conditions, transportation disruptions, logistics bottlenecks or regional supply constraints may affect procurement and product availability.

Climate and Seasonal Risk
Agricultural production is inherently dependent on monsoon patterns, climatic conditions and crop yields. Unfavourable weather events may affect the availability, quality and pricing of food grains.

Regulatory and Policy Risk
The Companys operations are subject to various laws and regulations relating to agricultural markets, mining, taxation, environmental compliance and food safety. Changes in government policies, licensing requirements, GST regulations or environmental norms may affect business operations and profitability.

Competitive Risk
The Company operates in a competitive marketplace comprising organised players, regional traders and local market participants. Increased competition may exert pressure on pricing, customer acquisition and market share.

Logistics and Infrastructure Risk — Transportation costs, fuel price fluctuations, availability of vehicles and infrastructure constraints can influence procurement efficiency and timely delivery of products, particularly in the bulk trading business.

Credit Risk — The Company is exposed to the risk of delayed payments or defaults by customers, which may impact cash flows and working capital requirements.

Project Execution Risk — The ongoing Flour Mill Project involves risks relating to project execution, timely delivery of machinery, cost escalation, regulatory approvals and commissioning schedules. Delays could impact the anticipated operational benefits.

The Indian agricultural and commodity trading sector continues to present significant growth opportunities, supported by a large and growing consumer base, increasing demand for food grains, expanding industrial activity, infrastructure development, and growing domestic and international trade. The key opportunities for the Company are as follows:

Expansion of Commodity Trading: The growing requirement for efficient sourcing and distribution of agricultural and industrial commodities presents opportunities for the Company to expand its trading activities across food grains, coal and fly ash and strengthen its presence across different regions.

Large and Diverse Consumer Base: Diversified Customer Base and Market Reach, coupled with urbanisation, changing consumption patterns and improving distribution networks, provides the Company with opportunities to expand its geographical reach, and overall trading volumes.

Growing Demand for Coal and Fly Ash: Continued industrial and infrastructure activity is expected to support demand for coal, while increasing utilisation of fly ash in cement, concrete, bricks, roads and other construction applications provides opportunities for the Companys fly ash trading business.

Expanding Food Grain Market: Indias large population, increasing food consumption and sustained demand for essential agricultural commodities provide a favourable environment for the growth of the food grain trading business. The Company can leverage its sourcing and distribution capabilities to cater to the requirements of customers across diverse markets.

Growth Potential in Import and Export Activities: The growing integration of domestic and international commodity markets presents opportunities for the Company to expand its import and export activities. By developing reliable supplier and customer networks, the Company can explore suitable domestic and overseas markets for food grains and other traded commodities, subject to prevailing regulations and market conditions.

Expansion into Value-Added Food Processing: The Companys ongoing Flour Mill Project provides an opportunity to expand its presence in value-added food processing and reduce its dependence on traditional commodity trading activities. The project is expected to enable the Company to participate in the wheat processing value chain, diversify its product portfolio and create opportunities for additional revenue streams and improved realisation, subject to successful commissioning and market conditions.

The company has a comprehensive system of internal financial controls that is appropriate for its size and operations. This system ensures timely and accurate financial reporting, the safeguarding of assets, and compliance with all applicable laws and regulations. The companys internal auditors regularly review the internal financial control system to ensure its effectiveness, and any necessary changes or suggestions are incorporated into the system. The internal audit reports are also reviewed by the companys audit committee.

The key strategy will be focused around:

1. Financial strength & liquidity
2. Professional Management
3. Timely completion of Orders
4. Customer care

The Company considers its employees to be one of its most valuable assets. It continues to focus on developing a performance-oriented work culture through employee engagement, skill development and a safe and healthy working environment. Industrial relations remained cordial throughout the year.

Industrial relations remained cordial throughout the year. As at 31 March 2026, the Company had 15 employees.

Statement in this report describing the Companys objectives projections estimates and expectation may constitute "forward looking statement" within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumption and expectations of future events. These Statements are subject to certain risk and uncertainties. The Company cannot guarantee that these assumption and expectations are accurate or will be realized. The actual results may different from those expressed or implied since the Companys operations are affected by many external and internal factors which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments information or events.