Polo Queen Industrial and Fintech Ltd Management Discussions

Global Overview

During FY 2024-25, the global economy recorded moderate but uneven growth, shaped by inflationary pressures, geopolitical uncertainties, and divergent monetary policy stances across regions. Advanced economies showed signs of cautious recovery supported by resilient consumer demand, while emerging markets, particularly in Asia and Africa, continued to lead global growth on the back of strong domestic consumption and investment flows. Accelerated adoption of digital technologies, artificial intelligence, and sustainability-led business practices became integral to corporate strategies, with supply chain diversification, ESG compliance, and climate-related risks influencing long-term decision-making.

Indian Economy

The Indian economy remained one of the fastest-growing major economies globally, driven by strong domestic consumption, robust infrastructure spending, and steady inflows of foreign investment. Government reforms, a focus on manufacturing under the "Make in India" initiative, and rapid digitisation continued to strengthen economic fundamentals. Resilient rural demand, expanding middle-class consumption, and demographic advantages further supported the countrys growth momentum, making India an attractive destination for global investors.

Indian FMCG Sector

The FMCG sector in India sustained healthy growth during FY 2024-25, supported by recovery in rural demand, premiumisation of product categories, and rising urban consumption. The sector benefitted from structural tailwinds including favourable demographics, rising disposable incomes, and increasing penetration of organised retail and e-commerce channels. Growing consumer preference for health, wellness, and sustainable products mirrors global trends, while companies continue to leverage wide distribution networks, innovation, and digital-first strategies to expand their reach. Overall, the FMCG industry in India remains poised for steady growth, supported by evolving consumer behaviour, technological adoption, and a strong macroeconomic backdrop.

Outlook

Looking ahead, the global economic environment is expected to remain cautiously optimistic, with moderating inflation, gradual recovery in global trade, and increased investments in technology and sustainability initiatives. However, risks arising from geopolitical tensions, commodity price volatility, and climate-related disruptions may continue to influence market dynamics. The Indian economy is well-positioned to sustain its growth trajectory, supported by resilient domestic demand, government-led infrastructure development, and a strong push towards digitisation and manufacturing. Within this framework, the FMCG sector is poised to benefit from favourable demographics, rising disposable incomes, and expanding e-commerce penetration. Companies that focus on innovation, premiumisation, operational efficiency, and sustainability are expected to gain a competitive edge. Your Company remains committed to leveraging these opportunities, strengthening its market position, and creating long-term value for all stakeholders through a balanced strategy of growth, efficiency, and resilience.

Company Overview

Polo Queen Industrial and Fintech Limited (established in 1984 and based in Mumbai) operates as a multi-divisional enterprise under the House of Rajkamal, with diversified operations across FMCG, chemicals & minerals trading, information technology, and financial services. Its FMCG portfolio spans personal, home, kitchen, and fabric care products, supported by complementary divisions in chemicals, IT park development, and NBFC operations.

Division Doan Rajkamal

Doan Rajkamal is the FMCG division of Polo Queen Industrial and Fintech Limited, leveraging the groups extensive experience in pan-India marketing to excel in the FMCG sector. It offers a diverse range of high-quality products for personal, home, kitchen, and fabric care, which are highly valued by consumers in both the Indian civilian market and the Indian Defence Forces. The divisions products cater to all age groups and social demographics, reflecting its broad market reach. Doan Rajkamal continually introduces new products, each providing unique and superior value, enhancing choice for discerning consumers and offering an extensive selection for dealers, distributors, and retailers to promote.

Brand POLOQUEEN

With the creation of POLOQUEEN, we aim to provide consumers with an exceptional experience and empower them to meet their everyday FMCG needs. POLOQUEEN represents a commitment to quality, blending innovation, advanced technology, product effectiveness, and smart pricing to become the preferred choice for many. Our diverse product range addresses nearly every household need, from personal and kitchen care to fabric and home care, ensuring that POLOQUEEN is a trusted companion for every consumer. Rapidly expanding, POLOQUEEN is driven by a vision to become one of Indias leading FMCG companies.

Financial Performance Overview (FY 2024-25):

During FY 2024-25, The Company delivered strong topline expansion, with consolidated revenue reaching Rs.81.58 crore-a robust growth of 15.5% year-on-year, and outperforming its three-year CAGR of 12.8%. Despite rising cost pressures (expenses growing by ~16.4%), the Company maintained profitability, reporting a consolidated net profit in the range of Rs.2.6 crore to Rs.2.36 crore (Smart-Investing), reflecting a healthy PAT margin of approximately 4-4.2%. Employee and interest costs remained largely under control, accounting for ~5.7% and ~2% of revenues respectively

Our Opportunities and Threats

Risk management is a core component of our strategy and crucial to achieving our long-term objectives. Our organizational success hinges on our ability to identify and capitalize on opportunities within our markets. We integrate risk management into our operations by making risk and opportunity assessment a central part of the Boards agenda.

Our approach to risk management includes:

Urgency of Action: Addressing critical issues like plastic pollution and climate change proactively, without being hindered by the uncertainties of their potential impacts.

Adherence to Principles: Ensuring that our actions align with our Code of Business

Principles and Code Policies.

Operational Efficiency: Continuously striving to enhance our operational efficiency and effectiveness.

We aim to provide reasonable assurance that our assets are protected, risks are assessed and mitigated, and necessary disclosures are reported to senior management, the Board, and relevant committees, including the Chief Financial Officer, Audit Committee, and Risk Management Committee.

Our risk management framework includes detailed internal controls and assigns responsibility for managing both overall risks and specific controls. We evaluate risks from multiple perspectives-short-term and long-term, internal and external, including financial, operational, sectoral, sustainability (particularly Environmental, Social, and Governance), information, cybersecurity, legal, and compliance risks. The Risk Management Committee and the Board review emerging risks and changing risk landscapes regularly, with formal reviews occurring at least twice a year.

The Board, guided by the Risk Management Committee, consistently reviews significant risks and decisions that could materially impact the Company. These reviews evaluate the Companys risk tolerance in alignment with its business strategy and assess the effectiveness of management controls in mitigating risk exposure.

Risk	Risk Description	Management of Risk	Level of Risk
Consumer Preference	Our success hinges on the value and relevance of our brands and products to consumers, as well as our ability to innovate and stay competitive. Rapid changes in consumer tastes, preferences, and behaviors, coupled with increased competition from new market entrants, further intensify these dynamics. Consumers are increasingly drawn to brands that fulfill both their functional needs and demonstrate a clear social or environmental purpose. A lack of product diversification in key market segments could result in a loss of market share and a long-term competitive disadvantage. Therefore, it is crucial for us to continuously develop innovative products that address consumer needs and to effectively communicate through the right messaging content and channels. This approach is essential to maintaining the strength and relevance of our brands.	To mitigate brand preference risk, the Company has appointed celebrity Ms. Ravina Tondon as a brand ambassador. Her endorsement is expected to enhance brand visibility and appeal, leveraging her widespread recognition and influence. This strategic move aims to strengthen brand affinity, attract a broader audience, and solidify consumer trust. The Company actively monitors external market trends and gathers insights from consumers, customers, and shoppers to shape our category and brand strategies. We strategically invest in markets and segments where we have established, or are confident we can establish, a competitive edge.	Moderate
Legal & Regulatory Risk	Legal & Regulatory Risk Compliance with laws and regulations is a critical aspect of PQIFs operations. Changes and increases in regulations at both Central and State levels-such as those related to direct and indirect taxes, data privacy, corporate governance, disclosure requirements, packaged commodities, labor laws, consumer communications, advertising, and imports-may adversely affect growth and profitability. These regulatory shifts could expose the Company to civil or criminal actions, resulting in potential damages, fines, and sanctions against the Company or its employees, which could impact our corporate reputation. Additionally, regulatory changes may significantly affect the cost of doing business.	We are dedicated to adhering to the countrys laws and regulations. Specialized teams are responsible for establishing detailed standards and ensuring that all employees understand and comply with regulations pertinent to their roles. Our legal and regulatory teams continuously monitor and review our practices to ensure alignment with relevant laws and legal obligations. Additionally, these teams collaborate with industry and trade associations to provide input on emerging regulations, considering a multi stake holder perspective.	Moderate
Supply Chain	Our business relies heavily on the efficient procurement of materials, manufacturing processes, and timely product distribution. Our supply chain is vulnerable to various risks, including physical disruptions, environmental and industrial accidents, labor unrest, trade restrictions, or issues with key suppliers, all of which could impact our ability to fulfill customer orders. The cost of our products is closely linked to the prices of the underlying commodities and materials, and fluctuations in these costs may adversely affect our business, particularly if not managed effectively. Geopolitical uncertainties also pose challenges to the resilience and continuity of our supply chain. Ensuring robust manufacturing and logistics operations will require ongoing attention and adaptability.	We have established contingency plans to ensure continuity in key material supplies, including securing alternative sources at short notice, transferring or sharing production across manufacturing sites, and using substitute materials in our product formulations. Commodity price risk is managed through strategies such as forward buying, hedging, and adjusting product pricing. We continuously monitor and model market trends, integrating these insights into our forecasting process. Additionally, we have policies and procedures in place to ensure the health and safety of our employees and products, as well as to address major incidents through business continuity and disaster recovery plans.	Moderate
Digital Transformat ion	Emerging digital technologies, analytics, and big data offer significant opportunities to transform our business. These advancements enable us to make impactful changes and enhance capabilities across the value chain, fundamentally redefining our operations. By investing in digital capabilities for our systems, workforce, and business models, we can ensure our operations are future-fit, remain agile, and effectively respond to evolving stakeholder needs.	We are integrating advanced technologies to optimize operations, boost customer engagement, and foster innovation. This involves using data analytics for improved decision-making, implementing digital tools to enhance supply chain efficiency, and leveraging digital platforms to personalize interactions and broaden market reach.	Opportunity

"About Mega Project"

Your companys proposed greenfield expansion projects for Agro Processing at Mahad MIDC and Data Centre at Dombivli Maharashtra are alive and kicking.

With a buoyant capital market and Indias increasing capital investments in manufacturing and services, your Directors are confident of achieving the required breakthrough in its discussions with financial institutions towards fundraise and implementation of these major growth projects.

The mega project status granted for the Agro Processing project at Mahad by the Government of Maharashtra continues to aid us in our initiatives.

Segment - wise or Product - wise performance

The net revenues from operations increased from Rs.6844.03 Lakhs to Rs. 8042.07 Lakhs in 2024-25. Profit before tax increased from Rs.183.39 Lakhs to Rs.275.00 Lakhs in 2024-25. The net profit was Rs.184.86 Lakhs compared to Rs.126.22 Lakhs in the previous year.

Your company is actively working in the mineral trading area scouting for reliable and competitive source of mineral raw materials from mines in the African region to achieve sustained profitable growth.

In addition, in the Chemical space, your company has started manufacturing specialty additives for the cleaning industry via the job work route at 3rd party site. These specialty additives have been developed with long term internal R&D and act as import substitutes for some conventional surfactants used in the cleaning industry. Your companys specialty additives are green environmentally friendly and readily biodegradable with significant growth prospects.

Internal Control Systems and their adequacy

Polo Queen has a sound Internal Control System, which aims to assure that operations are effective and well aligned with the strategic goals. The internal control framework is intended to ensure correct, reliable and timely financial reporting and management information. The Company has implemented the Internal Financial Control (IFC) framework to ensure proper Internal

Controls over financial reporting. Then internal control system is further supplemented by Internal Audit carried out by an independent firm of Chartered Accountants and periodic review by Management. The Internal Audit process is designed to review the adequacy of internal control checks in the system and covers all the significant areas of the Companys operations. The Audit Committee reviews the adequacy and effectiveness of the internal control systems and tracks the implementation of corrective actions. Significant audit observations and corrective actions taken by the Management are presented to the Audit Committee.

Human Resource

Company operations are challenging as its people centric. Company truly values its human resources, who have committed themselves to the Companys Mission and Vision.

An effective talent management strategy and an optimum workforce helps us meet the demand for talent in our business.

We have been focusing on training and development for enhancing the capabilities of our personnel and building on their core technical skills throughout the year

Financial Ratios

Ratio	March 31,	March 31,
	2025	2024
Current Ratio	0.92	0.80
Debt-equity ratio (times)	0.06	0.07
Debt Service Coverage Ratio	1.00	1.00
Return on Equity Ratio (in %)*	0.98%	0.68%
Inventory Turnover Ratio (%)	23.98	22.77
Trade Receivables Turnover Ratio	6.72	5.03
Trade Payables Turnover Ratio	0.01	0.02
Net working capital turnover Ratio	0.43	0.37
Net profit Ratio (in %)*	2.30%	1.84%
Return on Capital employed Ratio*	2.29%	1.80%
Return on Investment (%)	0.01%	0.00%