Raj Oil Mills Ltd Management Discussions

Over the years, ROML has expanded its operations and capabilities, running state-of-the-art manufacturing facilities and refining units. The Company operates out of Mumbai and distributes products across multiple Indian states through an extensive dealer and distributor network. In line with its vision to be a household staple, ROML continues to introduce value-added edible oil variants catering to evolving consumer preferences.

Following corporate restructuring and new promoter leadership, the Company has returned to profitable growth, backed by its strong brand and operational efficiency. ROML continues to focus on filtered oils, driven by steady consumer demand rooted in tradition. Refined oils remain part of the portfolio, though filtered oils are expected to support future topline growth. The religious oil segment also contributes consistent volumes, aiding overall revenue momentum.

In addition to its core product offerings, the Company is focused on responsible manufacturing practices and long-term value creation. Efforts are underway to modernize packaging, expand capacity, and deepen market penetration in underserved geographies.

By staying rooted in its legacy while embracing innovation and market trends, Raj Oil Mills Limited is poised to play a growing role in Indias food and agri-processing landscape delivering trust, tradition, and taste to millions of Indian kitchens.

Indonesias hike in biodiesel blending from B35 (35% biodiesel blend) during April to December 2024, to B40 starting January 2025 created robust demand for palm oil, equivalent to nearly 13 million metric tons of

Indonesias 48 million MT palm oil production. This policy supported palm oil prices, maintaining their premium over soybean and sunflower oils, even as soft oils remained competitive.

Indian edible oil imports grew nearly 5% year-on-year from April 2024 to March 2025, despite a 12% decline in palm oil imports, reflecting these global dynamics. At ROML, we proactively diversified our supply chain across multiple geographies to mitigate geopolitical risks and ensure stable sourcing.

Agricultural markets are increasingly influenced by global macroeconomic factors, including interest rates and liquidity flows, more so than five years ago. Among major consumers, India stood out with steady consumption growth, although it moderated in the later half of the year following higher import duties imposed to protect domestic farmers.

In September 2024, the Government of India raised import duties on crude edible oils (soy, palm, sunflower) to an effective 27.5% and refined oils to 35.75%, aiming to boost local production. While these measures led to higher edible oil prices, their impact on domestic oilseed prices was limited, with soybean prices facing pressure due to a global protein surplus. Additionally, policy shifts restricting the use of edible oils for biodiesel fuel helped reduce diversion from food consumption, supporting market stability.

INDIAN EDIBLE OIL MARKET

The Indian edible oil market has witnessed significant fluctuations over the past year, driven by global supply chain disruptions, shifting consumer preferences, and domestic policy changes. A notable policy shift led to a 25 30% surge in vegetable oil prices, which, when combined with persistent food inflation, has led to a visible dampening of consumer demand.

Sunflower Oil has emerged as the fastest-growing category in the ROCP segment, registering 9% growth (Nielsen). This growth is largely attributed to a rising trend in health consciousness, with consumers increasingly preferring oils perceived as lighter and healthier.

Soybean Oil has maintained positive momentum, growing at 2%, driven by its affordability and versatility in Indian cooking practices.

A notable consumer shift from palm oil to softer oils like sunflower and soybean has been observed. This trend has been accelerated by the disproportionate rise in palm oil prices, making it relatively less attractive for the price-sensitive value segment.

The second half of the year proved to be challenging for the edible oil industry. A mid-September hike in customs duties on edible oils led to a marked moderation in consumer demand. Additionally, a significant surge in palm oil prices further constrained demand, particularly in the mass-market segment. Consumers responded by substituting palm oil with alternative, value-for-money edible oils.

The Indian Food and FMCG sector is undergoing a dynamic transformation, driven by growing consumer preferences for health-oriented, convenient, and premium food products. Channel affinity has notably shifted towards Q-commerce platforms, modern trade, and digital marketplaces, with consumers valuing speed, quality, and trusted brands. This evolution has led to a demand surge in branded essentials, particularly in edible oils and everyday cooking ingredients.

Amid this shift, ROML continues to strengthen its foothold in the edible oil segment by enhancing its brand appeal and expanding its distribution reach. The Company has strategically aligned itself with emerging consumption trends by increasing its presence across general trade, institutional channels, and e-commerce. With flagship brands like Guinea, Tilraj, and Cocoraj, ROML caters to a broad demographic with a focus on purity, tradition, and value.

Backed by a robust distribution network and a growing retail footprint, ROML has maintained strong traction across both urban and semi-urban markets. Efforts have been made to improve product availability through efficient supply chain practices and by exploring smaller, regionally tailored SKUs, especially for metro cities and digital-first consumers. This has enabled the company to tap into the momentum seen in convenience-driven shopping behavior, which is shaping the future of the FMCG industry.

Looking ahead, ROML aims to reinforce its position as a consumer-centric brand by leveraging digital platforms, expanding its premium product portfolio, and enhancing consumer engagement through consistent quality, heritage trust, and innovation.

BUSINESS PERFORMANCE

The Key Financial Ratios for FY 2024-25 and FY 2023-24 along with explanation for significant changes (change of 25% or more, if any) are as follows:

As part of our ongoing efforts to expand into value-added and health-oriented segments, the Company is introducing Cold Pressed Groundnut Oil. Extracted through traditional wooden-press methods without the use of heat or chemicals, cold pressed groundnut oil preserves natural nutrients, aroma, and authentic taste. This launch underscores our commitment to providing consumers with healthier and more wholesome alternatives in line with the growing shift towards mindful eating and sustainable living.

The growth prospects for cold pressed groundnut oil are encouraging, driven by rising health consciousness, preference for natural and chemical-free cooking mediums, and increasing consumer willingness to pay a premium for purity and authenticity. Market studies indicate that cold pressed edible oil categories in India are witnessing strong double-digit growth, particularly in urban centers and e-commerce platforms. With the

Companys established brand equity, trusted distribution channels, and focus on quality, management believes that cold pressed groundnut oil will emerge as a key growth driver, contributing to revenue enhancement, margin improvement, and long-term value creation.

The Company distributes its range of edible oils through a diversified and strategically structured multi-channel sales network to ensure wide consumer reach across India. The General Trade (GT) segment remains the backbone of the Companys distribution, serving a vast network of kirana stores and regional wholesalers. The Company continues to deepen its reach in both urban and semi-urban markets.

To capture evolving consumer preferences, ROML has strengthened its presence in the Modern Trade (MT) channel through partnerships with leading retail chains, enhancing brand visibility and consumer engagement. In line with shifting market dynamics, the Company is also expanding its E-Commerce and Digital Commerce footprint via platforms such as Amazon, Dmart and Flipkart, catering especially to digitally savvy and health-conscious consumers.

Additionally, the Company maintains a presence in the Institutional/B2B segment, supplying oils in bulk packs to the HoReCa (Hotels, Restaurants, and Caterers) industry. While export volumes remain modest, ROML continues to explore select overseas markets with demand for authentic Indian edible oils.

Raj Oil Mills Ltd. operates a fully integrated manufacturing facility at Manor, Palghar, which supports end-to-end processes including oilseed crushing, refining, packaging, and warehousing. The facility is equipped to produce a wide range of edible oils filtered, refined, and cold-pressed across mustard, groundnut, sunflower, soyabean, coconut, and sesame variants.

During FY 2024 25, the Company strengthened its manufacturing flexibility by introducing new SKU formats tailored to regional demand, while also focusing on operational efficiency and cost optimization. Stringent quality assurance protocols aligned with FSSAI and ISO standards were maintained to ensure product consistency and consumer safety. ROMLs investment in innovation, blending technology, and process automation positions it to respond swiftly to market trends and consumer health preferences.

Raj Oil Mills Ltd. enters the coming fiscal year with renewed focus on strengthening its position in the edible oil and food processing sector by building a more agile, customer-centric, and innovation-driven business model. The Company remains committed to expanding its footprint across India through a combination of diversified product offerings, improved distribution channels, and strategic investments in quality, efficiency, and brand development.

Going forward, ROML aims to grow its presence in both urban and semi-urban markets by leveraging its trusted brands and developing deeper distribution capabilities. The Company will continue to focus on its core strength high-quality edible oils and simultaneously explore opportunities in value-added products and healthier variants in response to evolving consumer preferences.

To drive future growth, ROML is strengthening its retail presence by expanding general trade, modern trade, and e-commerce channels. Plans are underway to scale the direct distribution network to improve market reach and ensure last-mile availability, especially in high-demand and under-penetrated regions. The Company also intends to enhance visibility through targeted marketing campaigns and brand-building initiatives.

Operationally, ROML will continue to invest in process optimization, packaging innovation, and supply chain efficiencies to reduce costs and improve delivery timelines. Focus on in-house capabilities, quality control, and automation will support the Companys long-term objective of building a structurally strong, low-cost operating model. Enhancing margins and delivering consistent product quality remain key priorities.

As the business landscape evolves, ROML is actively exploring opportunities for innovation-led growth, whether through product differentiation, partnerships, or backward integration. By staying aligned with consumer needs and market trends, the Company is well-positioned to deliver sustainable growth and strengthen its leadership in the edible oil sector.

Comprehensive Policies and Procedures: The Company maintains well-defined policies covering crucial activities, including financial closure, automated processes and entity-level controls. These policies are continuously tested for effectiveness and compliance as part of an ongoing management review process, reinforcing a culture of accountability within a structured governance framework.

Delegation of Authority: A clear, hierarchical delegation of authority specifies approval limits for revenue and expenditure decisions. These limits undergo regular reviews to ensure they align with evolving business needs, supporting agile decision-making in both daily operations and strategic initiatives.

Strategic Business Planning: The Company operates with precisely crafted business plans for each segment, incorporating annual evaluations, financial forecasting and operational roadmaps. Progress is monitored monthly, ensuring agility and adaptability in response to market dynamics.

Advanced Technology Integration: The Company streamlines data capture, accounting, consolidation and management reporting. Automated controls are embedded into core processes, minimizing deviations and ensuring adherence to global best practices.

Compliance Management System: An integrated compliance management system offers real-time updates on regulatory changes. This ensures comprehensive coverage of applicable laws, supported by a management dashboard that enhances visibility and oversight across operating units.

Risk-Based Internal Audits: The Company Audit team conducts systematic, risk based audits. These audits cover key operational areas, with findings reported directly to the Audit Committee. This ensures ongoing evaluation of compliance, operational effectiveness and process integrity.

Web-Enabled Audit Processes: Internal audits operate through a fully digital Audit Management System (AMS), ensuring transparency, efficiency and streamlined reporting. The Audit Committee oversees the execution of audit plans, assesses the sufficiency of internal controls and ensures timely implementation of recommendations to enhance risk management frameworks.

Governance Oversight: Several Board Committees, predominantly comprising Independent Directors, are responsible for overseeing internal controls and governance practices. Their work ensures that corporate governance standards remain aligned with best practices. Further details on these Committees are available in the Corporate Governance Report.

Our strategic investments in digital and analytics have fortified our operational framework, driven efficiencies and enhanced the overall customer experience. We have been tapping the potential of social media platforms, e-commerce channels and targeted digital marketing strategies to enhance customer engagement and foster brand loyalty across our diverse portfolio. By harnessing the power of analytics, we garner valuable consumer insights that fuel product innovation and elevate consumer satisfaction.

Competition Risk:

The edible oil industry is marked by intense competition, with frequent shifts in consumer preferences and pricing strategies. To mitigate this, the Company maintains an agile go-to-market strategy, leverages a strong value-driven brand proposition, and continuously innovates to retain consumer trust and brand strength.

Disruptions arising from logistical constraints, geopolitical barriers, or import restrictions can affect timely procurement and production. The Company mitigates this by maintaining strong supplier partnerships. Seasonal inventory planning is also undertaken to build reserves.

As a player in the food industry, maintaining the highest standards of quality and safety is critical. The Company has implemented stringent quality control protocols across all stages of production. Time to time internal and third-party audits, if requires are conducted to ensure compliance with regulatory norms and to uphold consumer trust.

Climate Change and Environmental Risks:

The agri-business sector is directly impacted by climate variability, extreme weather events, and tightening environmental regulations. These factors can affect crop yields and resource availability. Raj Oil Mills Ltd. mitigates these risks through sustainable procurement practices, carbon reduction efforts, and investment in resource conservation, aligning operations with evolving environmental standards.

Volatility in global commodity prices, driven by geopolitical tensions, climate events, and demand-supply imbalances, can impact margins. Raj Oil Mills mitigates this risk through hedging strategies, forward contracts, and by closely monitoring price trends to structure pricing mechanisms with customers.

Global uncertainties such as sanctions, inflationary pressures, and trade restrictions may disrupt operations. The Company manages these risks by diversifying its edible oil portfolio and maintaining strong liquidity and working capital to absorb potential shocks.

Workplace safety is a critical focus area, especially in environments involving heavy machinery and hazardous materials. The Company has implemented strong safety protocols, including employee training, risk zone segregation, surveillance systems, and fire-hydration setups to ensure a safe and compliant working environment.

Rapid technological advancements require continuous adaptation to maintain operational efficiency and competitiveness. The Company addresses this risk by collaborating with technology partners to integrate emerging solutions, while consistently investing in digital capabilities and automation across key functions.

At Raj Oil Mills Limited, our people are the foundation of our success. The Company is committed to fostering a dynamic, skilled, and motivated workforce that drives innovation, operational excellence, and sustainable growth. With a strong focus on attracting and retaining talent, ROML continues to build capabilities across all functions to support its expanding operations.

The Company actively promotes a culture of innovation by encouraging employees to challenge the status quo and lead efficiency-driven projects across departments. Several such initiatives were successfully implemented during the year, contributing to improved productivity and business outcomes.

Employee development remains a core focus area. ROML conducted a series of structured training programs to enhance technical expertise, leadership skills, and strategic thinking capabilities. These programs are tailored for different employee segments individual contributors, line managers, and senior leaders ensuring a holistic and future-ready approach to talent development.

The Companys workplace culture is built on inclusivity, empowerment, continuous learning, and performance-driven values. By creating an environment where employees feel valued, supported, and inspired, Raj Oil Mills Ltd. ensures that its human capital remains a strategic enabler of long-term success.

The Management Discussion and Analysis sections contain the Companys objectives, projections, estimates and expectations may constitute certain statements, which are forward-looking within the meaning of applicable laws and regulations. The statements in this management discussion and analysis report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the governmental regulations, tax regimes, forex markets, economic developments within India and the countries with which the Company conducts business and other incidental factors.