Oswal Agro Mills Ltd Management Discussions

The global economy in FY 2024-25 remained under significant pressure from a confluence of persistent macroeconomic challenges and geopolitical disruptions. After a modest recovery from the pandemic-era downturns, global growth began to decelerate amid tighter monetary policies, elevated inflation, ongoing supply chain adjustments, and increased geopolitical fragmentation.

Considering escalating trade tensions and elevated policy-induced uncertainty, global growth is projected to reduce from an estimated 3.3% in 2024 to 2.8% in 2025, before recovering to 3% in 2026 as per the IMFs World Economic Outlook Update April 2025. Central banks in major economies, particularly the US Federal Reserve and European Central Bank, have adopted a cautious stance, prioritizing inflation control overgrowth acceleration.

Supply chain stabilization, easing commodity prices, and improved labour market conditions have provided partial relief to global markets. However, risks remain elevated due to ongoing conflicts in Eastern Europe and the Middle East, coupled with renewed concerns over global debt sustainability. Volatility in global capital flows and currency markets remains a concern for businesses operating in developing economies. Global investors are now focusing more on sustainable practices, ESG disclosures, and energy-efficient innovations.

India emerged as a bright spot in the global economy during FY 2024-25, maintaining its status as one of the fastest-growing major economies. The country recorded an estimated GDP growth of 6.8%, driven by strong domestic consumption, government-led capital expenditure, and resilience across key sectors such as services, manufacturing, and infrastructure.

According to projections by Morgan Stanley, Indias economy is poised for substantial growth over the next few years. From a GDP of $3.5 trillion in 2023, the Indian economy is expected to expand to $4.7 trillion by 2026, positioning it as the fourth-largest economy globally, following the United States, China, and Germany. By 2028, India is forecasted to surpass Germany, reaching a GDP of approximately $5.7 trillion, thereby becoming the third-largest economy in the world.

This impressive trajectory is underpinned by strong macroeconomic fundamentals, policy stability, and significant improvements in infrastructure. As a result, India is also set to emerge as one of the worlds most attractive consumer markets, with an increasing share in global economic output and enhanced investor confidence across key sectors.

During 2024-25 rural consumption remained resilient, supported by strong agricultural performance, while the services sector continued to be a major driver of growth. Manufacturing exports, particularly in high-value-added segments, showed robust performance, reflecting Indias expanding role in global value chains. However, infrastructure investments and capital expenditure have been relatively constrained. This, along with elevated input costs, has resulted in moderated growth within the secondary sector.

The governments continued emphasis on infrastructure development, digital transformation, and manufacturing under the ‘Make in India initiative contributed to job creation and improved investor sentiment. Key sectors such as construction, banking, FMCG, and renewable energy saw notable expansion.

The Indian real estate sector witnessed a strong and broad-based recovery in FY 2024-25, driven by renewed investor confidence, solid end-user demand, proactive policy support, and evolving business models. This year marked a period of resilience and transformation across residential, commercial, industrial, and alternative real estate segments. Investment activity surged, with nearly USD 7 billion in real estate deals and growing interest in REITs and institutional platforms. Digital reforms like land record modernization and infrastructure upgrades further improved the investment climate and operational efficiency.This year was a transformative year for Indian real estate, with strong sectoral resilience, increased institutional participation, and deeper integration of technology and sustainability principles. The outlook remains positive, supported by macroeconomic stability, policy continuity, and evolving consumer preferences. The sector is well-positioned to play a central role in Indias urban growth story over the next decade.

During the financial year, the Company demonstrated a strong operational and financial performance, with notable growth in profitability despite external market challengesThe Company remains committed towards achieve best in the industry and by optimise the cost and its efficiency which translates into increasing the profit margins for the Company. Despite the subdued performance of overall trading sector, your Company earned a profit after tax of Rs. 108.82 crores as against a profit of Rs. 1.75 crores in the previous year.

The Companys performance overview during the financial year 2024-25 is shown below:

During the year 2024-25, the Company has dealt in trading of commodities, real esate and has also generated income from interest on intercorporate deposits, trading in mutual funds and other miscelleneous incomes. Further, the Company has been carrying on the other non-financial activities since its inception.

During the year ended March 31, 2025, the Company was operating under the business of trading, real estate and investing as separate business segments. Details of segment wise revenue, results and capital employed are given under note no. 39 of notes to accounts forming part of the annual report.

The Company is exploring new opportunities for diversification into other sectors through new investments and also exploring possibilities of undertaking some real estate projects, the outlook for which seems to be quite encouraging. The Company is cautiously optimistic in its outlook for the year 2024-25.

The company aims to leverage market opportunities through strategic project launches, enhanced customer service, and sustainable development practices. Continued focus on financial discipline and operational excellence will be key to maintaining growth momentum and delivering value to our stakeholders.

While the management of your Company is confident of creating and exploiting the opportunities, it finds the following challenges:

(i) Economic Uncertainty

(ii) Interest Rates and Financing

(iii) Regulatory Changes

(iv) Supply and Demand Imbalance.

The Company is exposed to specific risks that are particular to its businesses and the environment within which it operates, including inter alia, market risk, competition risk, human resource risk, execution risk and significant downturn in the economic cycle. It is endeavour of the management that the profitability of the Company is insulated to the extent possible from all the above risks by taking appropriate steps for mitigating the risks in a proper manner.

Human resources

The Company is committed to ensuring that all are treated with dignity and respect. We have been taking utmost care of our people and providing them with the best working facilities. The Human Resources and the Legal and Secretarial departments in collaboration with other functions ensure protection against sexual harassment of women and men in the workplace and for the prevention and redressal of complaints in this regard. We also aim to build a safe environment to work in and to ensure a sense of belongingness, that they are heard here, among the workers. We provide various learning opportunities to enhance the skills and knowledge the workers already possess.

Internal Control Systems

Adequate internal control systems commensurate with the nature of the Companys business, size and complexity of its operations are in place and have been operating satisfactorily.

Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations. Internal control systems are designed to ensure that all assets and resources are acquired economically, used efficiently and adequately protected.

Discussion on financial performance with respect to operational performance

The companys major operations are in trading activities. It also deals in financing activities like extending of inter-corporate deposits. The company earned a profit after tax of Rs. 108.82 crores as against a profit of Rs. 1.75 crores in the previous year. This substantial increase reflects the Companys focused execution, disciplined financial management, and favorable market conditions.

The company revenue from operations comprises of revenue from trading activities of Rs. 161.76 crores for financial year 2024-25. Apart from trading segment, during the year, the Company has also received income from interest on Inter-Corporate deposits (ICDs) and investments in mutual funds.

The Company remains committed towards enhancing operational efficiencies, optimizing risk management, and expanding its market footprint. With a diversified income stream and a prudent growth strategy, the outlook for the future remains positive and encouraging.

A comparative table showing synopsis of financial year 2024-25 vs. 2023-24 of Key Financial Ratios is provided below:

The Board takes responsibility for the total process of risk management in the organization. The Company follows well- established and detailed risk assessment and minimization procedures, which are periodically reviewed by the Board.

The Company takes a very structured approach to the identification and quantification of each risk and has a comprehensive Board approved risk management policy. The scope of the Audit Committee includes review of the Companys financial and risk management policies. The Audit Committee reviews the Audit reports covering operational, financial and other business risk areas.

The standalone & consolidated financial statements for the year ended March 31,2024 have been prepared and presented on a going concern basis under the historical cost convention (except for certain financial instruments which are measured at fair values), on the accrual basis of accounting and comply with the Indian Accounting Standards prescribed by Section 133 of the Companies Act, 2013 (‘the Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued there after, other pronouncements of the Institute of Chartered Accountants of India, guidelines issued by Securities and exchange board of India (SEBI) and the relevant provisions of the Companies Act, 2013 (to the extent notified)/Companies Act, 1956.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or are vision to an existing accounting standard requires a change in the accounting policy hitherto in use.

Statements in the Management Discussion and Analysis Report describing your Companys objectives, projections, estimates and expectations may be interpreted as "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to Companys operations include economic conditions affecting demand/ supply, price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations, tax laws and other statutes.