Poona Dal and Oil Industries Ltd Management Discussions

ANNEXURE IV TO THE DIRECTORS REPORT

For the Financial Year 2024-25

I. MANAGEMENT DISCUSSION AND ANALYSIS

1. Macroeconomic Overview GDP Growth:

The Indian economy in FY 2024-25 demonstrated resilience amidst global headwinds, maintaining a GDP growth of around 6-7%. This was supported by a recovery in private consumption, increased government expenditure, and a revival in industrial and infrastructure activities.

Inflation:

Inflationary pressures persisted during the year, largely on account of elevated global commodity and crude oil prices. The Reserve Bank of India (RBI) undertook calibrated monetary tightening, including repo rate adjustments, to keep inflation under control while ensuring growth momentum.

Currency Fluctuations:

The Indian Rupee witnessed volatility against the US Dollar, influenced by global economic uncertainties, monetary policy shifts in advanced economies, and Indias oil import bill, which continued to impact the trade deficit.

2. Impact on the Oil Industry Crude Oil Prices and Imports:

Indias heavy reliance on crude oil imports exposed the economy to global price fluctuations, which directly impacted energy costs, production, and transportation sectors.

Domestic Oil Production:

Policy reforms and incentives aimed at enhancing domestic production were implemented; however, production growth lagged behind demand, keeping import dependence high.

Renewable Energy Transition:

The government accelerated investments in biofuels, solar, and wind energy under its long-term sustainability strategy. This shift is expected to gradually reduce reliance on fossil fuels and strengthen energy security.

3. Impact on the Agro-Industry Agricultural Output:

The agriculture sector recorded stable growth, aided by a favorable monsoon and schemes such as PM-KISAN providing direct income support. Agriculture continues to employ a large section of Indias population and remains vital to rural prosperity.

Rural Demand:

Improved farm income spurred rural demand, reflected in higher sales of consumer goods, fertilizers, and agrochemicals.

Agri-Exports:

India sustained its position as a key exporter of agricultural commodities such as rice, wheat, and spices. Government efforts toward improving infrastructure and logistics yielded positive results in boosting exports.

Challenges:

Despite growth, the sector grappled with higher input costs (fertilizers, pesticides), supply chain disruptions, limited market access for smallholders, and price volatility.

4. Government Policies and Reforms Atmanirbhar Bharat:

Focus remained on self-reliance, with initiatives supporting indigenous seed production, farm mechanization, and agroprocessing.

Agro-Industry Incentives:

Subsidies for irrigation, farmer-friendly credit schemes, and support for value-added agricultural activities were strengthened.

Sustainability Focus:

Policies promoting organic farming, micro-irrigation, and water conservation gained traction, aimed at reducing the ecological footprint of agriculture.

5. Outlook for FY 2025-26 Oil Industry:

The sector is likely to face continued volatility in global crude oil prices and growing pressure to transition toward renewables. Policy support for domestic production and alternative energy sources may partially mitigate these risks.

Agro-Industry:

The sector is expected to grow steadily, supported by government schemes, technological innovations, and improving rural demand. However, risks from climate change, input cost pressures, and market access challenges need careful management.

II. INDUSTRY OVERVIEW

Strengths

Strong Agricultural Base: Maharashtra produces diverse pulses such as tur (pigeon pea), chana (gram), and urad (black gram).

Large Consumer Base: High demand for pulses and edible oils, with Maharashtra being one of the largest consumer markets.

Established Processing Industry: Well-developed processing units, including modern mills and refineries, especially for besan and edible oils.

Government Support: Central and state subsidies, MSP, and farmer incentives provide stability to the sector. Weaknesses

Monsoon Dependence: Heavy reliance on rain-fed agriculture leads to crop fluctuations.

Infrastructure Gaps: Inadequate storage, logistics, and distribution infrastructure cause post-harvest losses.

Fragmented Market: Presence of numerous unorganized players results in inefficiencies and lack of standardization.

Low Quality Awareness: Limited awareness of international quality standards hampers competitiveness in global markets.

Opportunities

Rising Health Awareness: Growing demand for protein-rich pulses, whole grains, and healthy oils.

Export Potential: Significant opportunity in processed pulses and oils, supported by Maharashtras proximity to major ports.

Value-Added Products: Increasing consumer preference for packaged atta, organic besan, fortified oils, and ready-to- cook products.

Government Initiatives: Schemes such as PMKSY and NFSM encourage investment in food processing and agroinfrastructure.

Threats

Price Volatility: Global commodity cycles, particularly in edible oils, impact margins.

Climate Change: Erratic weather patterns pose risks to agricultural productivity.

Import Competition: Cheaper imported pulses and oils, especially palm oil, challenge domestic producers.

Regulatory Uncertainty: Frequent changes in trade policies, MSP, and compliance requirements create business risks.

III. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has robust internal control systems with appropriate checks and balances. Regular audits and reviews ensure asset safeguarding, adherence to accounting standards, and operational efficiency. Cost-control measures have contributed to profitability. The internal audit team reports significant observations directly to the Audit Committee for timely corrective actions.

IV. HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company continues to uphold its values of quality, integrity, leadership, and respect for people. Industrial relations remained cordial across locations during FY 2024-25. The Company continues to invest in employee engagement, skill development, and welfare initiatives.

V. CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forward-looking statements based on current expectations. Actual results may vary materially due to factors such as financing availability, competitive pressures, economic shifts, regulatory changes, tax policies, litigations, and fluctuations in exchange or interest rates.