Raj Oil Mills Ltd Management Discussions

ECONOMIC SCENARIO Global

At the start of the year under review, the global economy was expected to sustain a modest recovery. The macroeconomic outlook turned volatile in the recent months amidst the ongoing geopolitical developments, particularly in the Middle East, leading to some variability in global energy markets and operating environment.

Multilateral institutions have since revised their global growth outlook, citing the combined effects of elevated energy prices, tighter financial conditions, and softer global demand. Despite these headwinds, certain structural growth drivers remain intact, including ongoing investments in digital infrastructure and artificial intelligence. Near-term global economic conditions are being influenced by geopolitical developments, energy market dynamics and fiscal conditions, alongside accelerating investments in digital and AI, collectively shaping demand patterns and cost structures.

India

Indias economic growth remained robust during the year, supported by strong domestic demand, resilient private consumption and sustained public investment. Services and manufacturing continued to drive growth, while easing inflation and improved liquidity supported credit and economic activity. The outlook remains resilient, with consumption, investment, infrastructure spending and structural reforms expected to support medium-term growth, although geopolitical tensions, trade uncertainties and energy price volatility remain key risks.

Middle East and North Africa

Economic activity across the Middle East and North Africa remained relatively resilient, supported by oil and non-oil sectors, public investment and strengthening private demand. Non-hydrocarbon sectors continued to support growth in GCC economies, while conditions improved in several oil-importing economies. The regional outlook remains moderately positive, although geopolitical developments, energy prices and supply-chain disruptions remain key uncertainties.

South Africa

South Africas economic activity improved during the year, supported by resilient private consumption, improved electricity availability and recovering business confidence. Agriculture and services also contributed to growth, while structural reforms supported macroeconomic stability. Growth is expected to improve gradually, supported by reforms in the energy and logistics sectors, recovering private investment and continued consumer spending.

Bangladesh

Bangladeshs economic growth moderated during the year amid subdued domestic demand and tight monetary and fiscal conditions. Strong remittance inflows, recovering exports and resilient industrial activity provided support, while inflation continued to weigh on household purchasing power. Growth is expected to recover gradually, supported by improving domestic demand, remittances, investment and strengthening external balances.

Vietnam

Vietnams economy remained strong during the year, supported by robust manufacturing, recovering tourism and resilient domestic demand. Export-oriented manufacturing, construction and services continued to contribute to economic activity. Growth is expected to remain robust, supported by demand, although external trade conditions and geopolitical

FAST MOVING CONSUMER GOODS (FMCG) SECTOR IN

Indias consumption landscape is undergoing a structural transformation, supported by rising disposable incomes, increasing formalisation, rapid digital adoption and expanding consumer aspirations across urban and rural markets. Private consumption continues to remain a key driver of economic activity, supported by improving access to organised retail and digital platforms.

The retail ecosystem is steadily evolving, with modern trade, E-Commerce, Quick Commerce and direct-to-consumer channels gaining traction alongside traditional general trade. Consumers are increasingly seeking convenience, wider product choices and faster fulfilment, accelerating the adoption of digital-first and omnichannel models.

Premiumisation and formalisation continue to shape the FMCG sector, with branded products gaining preference due to increasing quality consciousness and growing focus on health and wellness. Digital-native and emerging brands are also expanding rapidly by addressing niche consumer needs through innovation, targeted marketing and direct consumer engagement.

Consumption trends are increasingly influenced by affluent urban consumers, younger demographics and rising digital penetration across rural markets. Greater awareness, increasing participation of women in household consumption decisions, demand for personalised products and evolving health and wellness preferences are further reshaping FMCG demand.

These structural trends are expected to create opportunities across both established and emerging FMCG categories, while requiring companies to remain agile in portfolio management, pricing, distribution, supply chain efficiency and consumer engagement.

KEY OPPORTUNITIES AND TRENDS

1. Quick Commerce Transforming FMCG Distribution

Quick Commerce continued to gain momentum, particularly across urban and densely populated markets, driven by convenience, faster delivery and expanding product assortments. Its growing adoption across packaged foods, beverages and personal care categories is creating new opportunities for FMCG companies to improve product visibility, respond quickly to consumer preferences and scale niche and premium offerings. The channel is also influencing assortment, pricing and distribution strategies.

2. Gradual Recovery in Urban Consumption

Urban consumption showed signs of recovery during FY26, supported by improving consumer sentiment and demand across key categories. While value-conscious consumption remained relevant in essential segments, premiumisation continued among middle and higher income consumers. Smaller cities also contributed to demand growth, while metropolitan markets increasingly adopted E-Commerce and Quick Commerce channels. This trend is creating opportunities across both value and premium product segments.

3. Sustainability and Evolving Consumer Preferences

Consumer preferences are increasingly being influenced by health, wellness, sustainability and product transparency. Demand for natural and responsibly sourced products is gaining importance across food and non-food categories, while packaging and environmental impact are receiving greater attention. Brands that integrate sustainable practices across products, packaging and sourcing, while maintaining quality and affordability, are expected to gain increasing consumer relevance.

4. Rural Demand as a Long-Term Growth Driver

Rural markets continued to remain an important growth driver for the FMCG sector during FY26, supported by improving incomes, increasing digital penetration and expanding distribution reach. Rising internet and smartphone adoption, along with better logistics and last-mile connectivity, is improving consumer access to branded FMCG products. Affordable innovations, suitable pack sizes and targeted distribution strategies are expected to create sustained growth opportunities across rural markets.

5. D2C and Digital-First Brands Intensifying Competition

The growing presence of Direct-to-Consumer (D2C) and digital-first brands is increasing competitive intensity across FMCG categories. These brands are leveraging digital platforms, consumer insights and agile operating models to identify emerging trends and introduce differentiated products rapidly. This is accelerating innovation and competition, particularly in premium and niche segments. Established FMCG companies will need to strengthen digital engagement, accelerate innovation and remain responsive to changing consumer preferences and channel dynamics.

6. GST Rationalisation Supporting Formalisation and Demand

The evolving GST framework continues to support the formalisation and efficiency of the FMCG sector. Improved tax compliance, greater pricing transparency and potential benefits from rationalisation across categories can enhance consumer affordability and support demand. Over the medium term, GST-led efficiencies are expected to further encourage the shift towards organised retail and digital channels.

PERFORMANCE OVERVIEW

In FY26, Revenue from Operations stood at 151.37 crore, registering a strong 32.26% year-on-year growth over 114.45 crore in FY25. The business continued to demonstrate strong financial performance, supported by improved operating momentum. Profit Before Tax stood at 4.95 crore, compared with 2.80 crore in the previous year, registering a growth of approximately 77%.

With a clear focus on market expansion, distribution excellence and consumer-centric growth, Raj Oil Mills Limited

(ROML) continues to build a stronger presence across Indias edible oil market. The Company is enhancing its manufacturing and supply chain capabilities while leveraging digital platforms and regional market opportunities to strengthen competitiveness and create sustainable long-term value.

Revenue

Segment	Revenues	Revenues	PAT	PAT
	(Rs. in Lakhs)	(Rs. in Lakhs)	(Rs. in Lakhs)	(Rs. in Lakhs)
	FY 2026	FY 2025	FY 2026	FY 2025
Edible Oil	15,137.08	11,445.56	466.80	269.68

The Key Financial Ratios for FY 2025-26 and FY 2024-25 along with explanation for significant changes (change of 25% or more, if any) are as follows:

Particulars	2025-26	2024-25	Change (%)	Reason of change
Debtors Turnover	15.37	9.95	54.49%	The ratio improved significantly due to revenue growth and decrease in average trade receivable.
Inventory Turnover	12.42	11.38	9.21%	-
Interest Coverage Ratio	9.43	3.87	143.67%	The ratio improved due to decrease in finance cost and increase in profit.
Current Ratio	0.59	0.53	11.40%	The variance in the ratio is primarily attributable to the decrease in total debt and increase in total equity during the year.
Debt Equity Ratio	12.28	(12.95)	(194.81%)	The variance in the ratio is primarily attributable to the decrease in total debt and increase in total equity during the year.
Operating Profit Margin (%)	3.66	3.30	10.91%	-
Net Profit Margin (%)	3.08	2.36	30.88%	The variance in ratio is due to growth in profit during the year and revenue from operations.
Return on Net Worth (%)	652.04	(69.53)	(1,037.98%)	Due to the increase in profit during the year and the change in the Companys net worth position.

SHAREHOLDER VALUE

At Raj Oil Mills Limited (ROML), creating sustainable long-term value for shareholders remains an integral part of the

Companys growth strategy. During FY26, the Company continued to focus on strengthening its core business, improving operational performance, expanding market reach and enhancing financial resilience. The Company remains committed to disciplined capital allocation, efficient utilisation of resources and sustainable business growth. With continued investments in manufacturing capabilities, distribution infrastructure, brand development and emerging sales channels, ROML aims to strengthen its competitive position and build a stronger foundation for long-term value creation. Going forward, the Company will continue to focus on profitable growth, operational efficiency, prudent financial management and responsive execution, while remaining committed to protecting and enhancing shareholder value over the long term.

SALES & DISTRIBUTION

During the year, Raj Oil Mills Limited (ROML) continued to strengthen its go-to-market strategy, with focused efforts across traditional trade, Modern Trade and emerging digital channels. Investments in distribution expansion and market coverage supported improved reach, execution and productivity across key markets.

E-Commerce and Quick Commerce continued to gain momentum, supported by increasing consumer adoption and demand for convenience. The Company strengthened its engagement with key digital platforms, focusing on product availability, online visibility, assortment and targeted promotional initiatives. Data-led insights and analytics are being leveraged to optimise product offerings and enhance consumer engagement.

Modern Trade also delivered healthy growth during the year, supported by improved product availability, stronger in-store visibility and disciplined execution across key accounts. The Company remains focused on strengthening channel partnerships and improving execution capabilities to drive sustainable growth and market penetration.

MANUFACTURING

Manufacturing Facility Manor, Palghar

Raj Oil Mills Limited operates its manufacturing facility at Manor, Palghar, Maharashtra, which forms an important part of the Companys manufacturing and supply chain infrastructure. The facility supports the Companys production requirements and enables efficient servicing of its growing market presence.

During the year, the Company remained focused on operational efficiency, product quality, capacity utilisation and process optimisation. Continuous efforts towards improving manufacturing and supply chain capabilities are aimed at ensuring consistent product availability and maintaining quality standards across markets.

Going forward, the Company will continue to strengthen its manufacturing capabilities at Manor, Palghar, with a focus on efficiency, scalability, quality and cost optimisation to support its long-term growth objectives.

OUTLOOK

Raj Oil Mills Limited (ROML) remains focused on building sustainable growth by strengthening its presence in the edible oil and food essentials market. The Company expects continued opportunities from evolving consumer preferences, increasing demand for branded products, rural and urban consumption growth, and the expanding adoption of organised retail, E-Commerce and Quick Commerce.

Going forward, ROML will continue to focus on expanding market reach, strengthening its distribution network, improving manufacturing and supply chain efficiencies, and enhancing brand and consumer engagement. The Company will also leverage digital platforms and data-driven insights to respond more effectively to changing consumption patterns and emerging market opportunities.

The Company remains committed to prudent cost management, operational efficiency and disciplined execution while navigating factors such as commodity price volatility, competitive intensity, inflationary pressures and changing market conditions.

With a strengthened focus on profitable growth, operational excellence and consumer-centric innovation, ROML aims to enhance its competitive position and create sustainable long-term value for its shareholders and other stakeholders.

INFORMATION TECHNOLOGY & DIGITAL

ROML continues to leverage digital technologies and analytics to strengthen operational efficiency and enhance consumer engagement. The Company is expanding its presence across social media, E-Commerce and digital marketing platforms to build stronger consumer connect and enhance brand visibility across its portfolio.

The use of data and analytics enables the Company to gain deeper insights into evolving consumer preferences, supporting informed business decisions, product innovation and improved customer experience. These initiatives are contributing to a more agile, consumer-centric and digitally enabled business model.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

We have a well-established and comprehensive internal control structure across the value chain to ensure that:

Our assets are safeguarded and protected against loss from unauthorized use or disposition,

Transactions are authorized, recorded and reported correctly and operations are conducted in an efficient and cost-effective manner.

The key constituents of the internal control system are:

Policies on operational and strategic risk management

Robust management information system

Comprehensive Information Security Policies and guidelines

Comprehensive internal audit and review system

Establishment and periodic review of business plans

Identification of key risks and opportunities and regular reviews by top management and the Board of Directors

Clear and well-defined organization structure and limits of financial authority

Continuous identification of areas requiring strengthening of internal controls

Standard operating procedures to ensure effectiveness of business processes

Systems of monitoring compliance with statutory regulations

Well-defined principles and procedures for evaluation of new business proposals/capital expenditure

Well-defined Internal Financials Controls framework

An effective whistle-blowing mechanism

Training/awareness sessions on policies and code of conduct compliance

Robust Crisis Management Framework

RISK MANAGEMENT

Risk management is an integral part of Raj Oil Mills Limiteds (ROML) business and strategic planning process. The Company follows a structured approach to identify, assess, monitor and mitigate risks arising from both external market conditions and internal operations.

The risk management framework is integrated with the Companys strategic planning and decision-making processes, enabling timely identification of potential challenges and appropriate mitigation measures. The Company remains focused on strengthening its resilience, protecting business continuity and supporting sustainable growth.

Internal Financial Controls (IFC)

Internal Financial Controls (IFC) As per section 134(5)(e) of Companies Act 2013, IFC means the policies and procedures adopted by the Company for ensuring:

Accuracy and completeness of accounting records

Orderly and efficient conduct of business, including adherence to policies

Safeguarding of its assets

Prevention and detection of frauds

We have implemented a robust internal financial controls framework within the Company. The Internal Financial Controls have been documented and embedded in the business processes. Design and operating effectiveness of controls are tested by the management annually and later audited by statutory auditors. Statutory auditors have issued an unqualified report after checking the effectiveness of these controls.

The management believes that strengthening IFC is a continuous process and therefore it will continue its efforts to make the controls smarter with focus on preventive and automated controls as opposed to mitigating manual controls. The Company has robust ERP and other supplementary IT systems which are integral part of internal control framework. The Company continues to constantly leverage technology in enhancing the internal controls.

HUMAN RESOURCES

At Raj Oil Mills Limited (ROML), our people remain central to our growth and transformation journey. The Company is committed to fostering a collaborative, inclusive and performance-driven workplace where employees are encouraged to develop their capabilities and contribute meaningfully to the organisations objectives.

During the year, the Company continued to focus on strengthening talent capabilities, promoting employee engagement, embracing digital processes and building a future-ready workforce. These initiatives are aimed at creating an environment where talent can thrive while supporting sustainable business growth.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains certain statements that may constitute forward-looking statements within the meaning of applicable laws and regulations. Such statements, including those relating to the Companys objectives, strategies, plans, expectations, estimates and projections, are based on the Companys present assessment of future events and circumstances and are subject to various risks, uncertainties and assumptions. Accordingly, actual results, performance, achievements and developments may differ materially from those expressed or implied in such forward-looking statements.

Several factors may cause actual outcomes to differ materially from those anticipated, including, inter alia, availability and volatility in the prices of raw materials, changes in consumer demand and market conditions, competitive dynamics, changes in governmental policies, laws and regulations, taxation and regulatory regimes, foreign exchange fluctuations, inflationary pressures, interest rates, supply chain disruptions, economic and business conditions in India and other markets in which the Company operates, and other factors beyond the Companys reasonable control.