N K Industries Ltd Management Discussions

The global castor oil market demonstrated steady growth in FY 2025-26, reaching an estimated volume of approximately

812.1 Kilo Tons at the start of 2026. Projections indicate a continued upward trajectory, with expectations to attain 891.0 Kilo Tons by 2034, reflecting a Compound Annual Growth Rate (CAGR) of 1.03%.

India maintained its position as the leading producer and exporter of castor oil globally, accounting for nearly 85% to 90% of the international trade. In the 2025-26 market window, India exported over 675,168 metric tonnes of castor oil, valued at approximately USD 1.01 billion. Gujarat continued to dominate domestic production, contributing over 85% of Indias total castor seed output, followed sequentially by Rajasthan and Andhra Pradesh.

Indias castor oil industry navigated shifting trade patterns in FY 2025-26. During the five-month period from April to August 2025, cumulative castor oil exports reached 301,065 metric tonnes. In specific periods like July 2025, single-month exports stood at 49,928 metric tonnes, generating a corresponding export value of Rs. 681.70 crore. Meanwhile, domestic raw material costs remained steady, with the average price of castor seed in Gujarats Mehsana district successfully ranging between Rs. 6,500 and Rs. 7,050 per quintal.

The rising utilization of castor oil in numerous industries, such as personal care, chemicals, pharmaceuticals, lubricants, etc., owing to its unique properties and versatility, are primarily driving the market.

India holds an overwhelming global monopoly on the castor industry, commanding an 85% to 90% share of total world production. Gujarat remains the undisputed leader, contributing over 85% of Indias domestic castor seed output, followed sequentially by Rajasthan and Andhra Pradesh. Originally native to Eastern Africa (Ethiopia), the castor plant thrives in hot, tropical environments. Today, just three nations-India, China, and Brazil-account for roughly 88% of total global cultivation area, yielding between 15 and 20 lakh tonnes of seed annually. The resulting oil is highly versatile, acting as a vital base for washing soaps, lubricating greases, laxatives, surfactants, nylon-11, and hydraulic fluids, while the leftover castor cake serves as organic agricultural manure. Reflecting strong industrial demand, raw castor seed prices reached Rs. 5,950 per quintal in July 2024, pushing Indias annual castor oil export revenues to over Rs. 8,000 Crores.

Looking forward, the global castor oil market is projected to experience steady growth from 2026 to 2031, driven by its versatility as a bio-based, eco-friendly raw material for high-value applications like biodiesel, lubricants, and specialized industrial coatings. While its high ricinoleic acid content makes it a crucial, sustainable alternative to petroleum-based chemicals, market growth faces challenges from volatile, weather-dependent supply chains, and its use in the food industry is limited to specialized, non-culinary, high-grade applications.

GLOBAL CASTOR OIL MARKET DRIVERS/CONSTRAINTS:

The global castor oil derivatives market, valued at over USD 1.5 billion in 2025, is projected to reach USD 2.88 billion by 2034, growing at a 6.90% CAGR due to rising demand for green chemicals in coatings, cosmetics, and pharmaceuticals. Major industry players are increasing their portfolio of castor-based, sustainable ingredients, exemplified by BASF SEs 2020 launch of Lamesoft r Balance for stabilizing cleansing formulations.

The primary market restraints hindering the global castor oil derivatives industry include intense raw material price volatility and high production processing costs compared to cheaper synthetic alternatives. Furthermore, the market faces significant supply chain vulnerabilities due to a geographical monopoly, as global production relies heavily on seasonal monsoon patterns within a single dominant growing region.

RISK AND CONCERNS

The Company is exposed due to disparity resulting into pressure on margin. Moreover non-availability of funds due to sickness of the unit and poor market conditions affects the quick turnaround. However, the Management is aware of the said problems & therefore has designed the system to address the same.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an adequate system of internal control across all functions such as purchase, sale and acquisitions of fixed assets, cash & bank. Job work is carried out within the time schedule. The Company has set up an Audit Committee comprising of Non-Executive Independent Directors. The Company has also appointed the firm of Chartered Accountants to carry out Internal Audit, where one of their function is to review the Internal Control system regularly, with a view to further strengthen the same.

FINANCIAL HIGHLIHTS AND PERFORMANCE

The Financial highlights of the Company are as under ( In lacs)

PARTICULARS	Standalone		Consolidated
	Year Ended 31.03.2026	Year Ended 31.03.2025	Year Ended 31.03.2026	Year Ended 31.03.2025
Revenue from operations	240.00	240.00	1244.89	1612.82
Other Income	48.47	64.51	52.07	67.83
Total Income	288.47	304.51	1296.96	1680.65
Total Expenditure	339.48	373.37	1412.73	1787.56
Profit / (Loss) before Finance Cost, Depreciation & Amortization and Tax Expenses	(51.01)	(68.86)	(115.77)	(106.91)
Finance Cost	3.84	0.73	4.09	0.90
Depreciation & Amortization	230.95	241.63	245.65	255.72
Profit/(Loss) Before Tax	(285.79)	(311.22)	(365.52)	(363.53)
(i) Current Tax	-	-	-	-
(ii) Deferred Tax	8.44	(3.41)	3.20	8.26
(iii) Earlier period tax (written back)	-	-	-	-
Total Tax (i+ii+iii)	8.44	(3.41)	3.20	8.26
Profit /(Loss) after Tax	(277.35)	(314.63)	(362.31)	(355.27)
Other Comprehensive Income	3.45	(38.66)	3.45	(38.66)
Items that will not be reclassified to profit and loss	3.45	(38.66)	3.45	(38.66)
Total Comprehensive Income	(273.90)	(353.28)	(358.86)	(393.93)

Sr No	Particular	Formula	Ratio		Remarks
			2025- 26	2024- 25
(i)	Debtors Turnover	Net Credit Sales / Average Debtors	0.03	0.03	-
(ii)	Inventory Turnover	COGS/ AVERAGE INVENTORY	NA	NA	NA
(iii)	Interest Coverage Ratio	EBIT / INTEREST EXPENSE	NA	NA	NA
(iv)	Current Ratio	Current Asset / Current Liabilities	8.08	8.88	-
(v)	Debt Equity Ratio	Total Debt / Total SH Equity	NA	NA	NA
(vi)	Operating Profit (Loss) Margin (%)	Operating Profit (Loss) / Total Revenue	NA	NA	NA
(vii)	Net Profit Margin (Loss) Margin (%)	Net Profit (Loss) / Revenue	(116%)	(131%)	-

HUMAN RESOURCE

Throughout the year under review, the Company continues to make strides towards improving HR Processes and Practices to create an organisation for long-term sustainability. The Company emphasises on fostering personal growth and development within an environment that promotes professionalism and excellent performance. The Company has focused on developing staff capabilities as this will enable the company to achieve higher operational standards. The Company sponsors a variety of seminars to help employees grow. Additionally, the Company also organises various training programmes to improve employees abilities.

MANPOWER:

The Management is continuously trying to see that the unit runs on job work basis as well as direct sales. Once the funds are available, it will help to enhance the utilization of its capacity and thereby create further employment.

CAUTIONARY STATEMENT

This Management Discussion and Analysis may contain forward-looking statements within the meaning of applicable securities laws and regulations if it refers to the Companys goals, plans, estimates, expectations, or predictions. Results might significantly vary from those stated or inferred. The Companys operations can have an impact due to factors like global and Indian demand and supply conditions, finished goods prices, input material availability and prices, cyclical demand and pricing in the Companys key markets, changes to governmental regulations and taxation systems, and economic developments in India and the nations where the Company conducts business, as well as other factors like litigation and labour negotiations. The Company disclaims any obligation to publicly edit, modify, or revise forward-looking statements in light of unforeseen circumstances, new information, or other factors.

ANNEXURE- D

DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

? The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2025-26 and the percentage increase in remuneration of each Director, Chief Financial Officer, Company Secretary in the Financial Year 2025-26:

Sr. No.	Name of the Director/ KMP and Designation	Remuneration of Director/ KMP for the financial year 2025-26 (in )	% increase in Remuneration in the Financial Year 2025- 26	Ratio of remuneration of each Director to the median employee of the Company
1.	Mr. Nimish K. Patel (Chairman & Managing Director)		-	10.22 : 1
2.	Mr. Hasmukh K. Patel (Whole Time Director)		-	2.75 : 1
3.	Ms. Himanshi Shah (Independent Woman Director)		-	N.A
4.	Mr. Snehalbhai Patel (Independent Director)		-	N.A
5.	Mr. Ashwinbhai P. Patel (Chief Finance Officer)		-	4.43 : 1
6.	Mr. Priyam N Patel (Chief Executive Officer)		-	10.22 : 1
7.	Ms. Jelin Dodiya (Company Secretary resigned dated 02.01.2026)		-	0.47 : 1
8.	Ms. Ashna Harishkumar Pahwa (Company Secretary & Compliance Officer appointed w.e.f. 13.03.2026)		-	0.32 : 1

? The median remuneration of employees of the Company during the year under review was Rs. 24,452/- p.m.

? Increase in remuneration of Directors and Key Managerial Personnel during the financial year 2025-26 is as per the table above.

? The average percentage Increase in the median remuneration of employees of the Company during the financial year: - 8.12%

? The number of permanent employees on the rolls of Company: 169 as on 31st March, 2026.

? Percentage increase over decrease in the market quotations of shares of the Company in comparison to the rate at which the Company came out with the last public offer: N.A.

? Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: NA

? The key parameters for any variable component of remuneration availed by the Directors: N.A.

? Affirmation that the remuneration is as per the Remuneration Policy of the Company: The Company affirms remuneration is as per the Nomination and Remuneration Policy of the Company.

? Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

? Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company:

As the Company is having huge accumulated losses there was no increase in the remuneration of Key Managerial Personnel of the Company during the year under review.

? The key parameters for any variable component of remuneration availed by the Directors: N.A.

? The median ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: There is no such employee.

? Affirmation that the remuneration is as per the Remuneration Policy of the Company: The Company affirms remuneration is as per the Nomination and Remuneration Policy of the Company.