Rajgor Castor Derivatives Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPEMENT:

On the global front, geopolitical tensions remain ongoing, although slightly eased compared to last year. The Red Sea shipping crisis gradually stabilized by Q2 of 2024-25, which helped normalize trade routes and reduce freight costs. However, persistent inflationary pressures, fluctuating interest rates, and policy tightening in Western economies have continued to create uncertainty in global demand patterns. These macroeconomic headwinds have led to cautious inventory planning by importers, causing fluctuations in demand, especially in Q2 and Q3, followed by demand recovery in Q4.

The global market for castor oil and its derivatives continues to show resilient growth, particularly in Asia, Europe, and North America. The global economic recovery post-pandemic is progressing slowly, though it remains volatile due to ongoing geopolitical issues and inflationary pressures.

Key Updates:

• Exports: Indias castor oil exports have seen steady growth, with volumes increasing from 646,702 Metric Tons in 2023-24 to an estimated 662,598 Metric Tons in FY 2024-25. (Source: SEA)

• Castor Seed Production: The production of castor seeds in India is forecasted to be around 15.6 lakh tonnes in FY 2024-25, from 20.54 lakh tonnes in FY 2023-24, a significant decrease from previous years, primarily due to reduced acreage and adverse weather conditions such as high temperatures that reduced crop yields, particularly in Gujarat and Rajasthan.

B. OPPORTUNITIES AND THREATS:

I. OPPORTUNITIES

• Rising Global Demand for Sustainable Products

Increasing preference for bio-based and environmentally friendly products is driving demand for castor oil and its derivatives, especially in sectors like pharmaceuticals, cosmetics, lubricants, and specialty chemicals.

• Expansion in Export Markets

The global shift towards diversifying supply chains has opened up new opportunities in international markets. Indias strong presence in castor oil production gives the Company a competitive edge in expanding exports.

• Value-Added Product Development

There is growing market demand for high-margin, customized derivatives of castor oil. Investing in R&D and product innovation offers potential for diversification and improved profitability.

• Supportive Government Policies

Government initiatives aimed at boosting agro-based industries and exports, including subsidies and incentives, are creating a favourable environment for growth in the castor oil segment.

• Increased Use in Industrial Applications

Castor oil is gaining traction as a sustainable raw material in industrial applications such as paints, coatings, plastics, adhesives, and bio-lubricants, creating long-term business potential.

• Growing Focus on Health and Wellness

The rising consumer focus on natural, chemical-free ingredients in health, nutrition, and personal care products is increasing demand for castor oil in the wellness sector.

II. THREATS

• Volatility in Raw Material Prices

Castor seed prices are subject to fluctuations due to seasonal availability, climatic conditions, and shifts in agricultural patterns, directly impacting production costs and margins.

• Global Market Fluctuations

International demand for castor oil and its derivatives can be affected by global economic slowdowns, changing trade policies, or substitute product availability.

• Regulatory and Compliance Risks

The industry is subject to stringent environmental, quality, and export regulations. Non-compliance, even inadvertent, can lead to fines, shipment delays, or reputational damage.

• Currency Exchange Rate Risk

Since a significant portion of revenue may come from exports, adverse currency fluctuations can impact profitability and price competitiveness in international markets.

• High Competition and Pricing Pressure

The presence of multiple players in both domestic and global markets leads to intense competition, which can put pressure on pricing and margins.

C. SEGMENT:

The Company continues to focus exclusively on its core area of operation?Castor Oil and its derivatives? under a single reportable business segment. No changes have occurred in the nature or structure of business segments during the year.

D. OUTLOOK:

The Company remains positive about its near-term outlook, driven by stable domestic demand, improved operational efficiency, and disciplined cost management. Despite broader economic uncertainties and input cost pressures, the Company continues to maintain business continuity and meet its obligations. Notably, the current year witnessed a significant surge in export growth, reflecting increased global demand for our quality products and the success of our market expansion efforts. With a strong focus on customer satisfaction, product quality, and brand development, the Company aims to strengthen its position across India and further scale its presence in international markets.

E. RISKS AND CONCERNS:

Key risks impacting the business include:

• The Companys business continues to be impacted by seasonal fluctuations in demand, which can lead to inconsistency in sales volumes and affect financial performance across different periods.

• Increasing regulatory requirements, particularly related to environmental compliance, food safety, and labour laws, present an ongoing challenge. Non-compliance could result in penalties or operational restrictions.

• Rising inflation and volatile global commodity prices continue to exert pressure on input costs. If the Company is unable to pass on these costs to customers, it could lead to margin erosion.

• The availability of trained and skilled manpower remains critical to maintaining production quality and efficiency. Any shortage or high attrition rate could adversely impact operations.

• Disruptions in logistics and transportation networks, due to weather conditions, strikes, or other external factors, can delay procurement and delivery, thereby affecting the overall supply chain.

• As business processes become more digitized, the risk of cybersecurity threats has increased. Any breach in the IT systems may lead to operational disruptions and compromise sensitive business data.

F. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company continues to maintain a robust internal control framework that aligns with the scale and complexity of its operations. The systems in place are designed to ensure effective procurement of raw materials, machinery, components, and efficient sale of finished goods, while safeguarding the Companys assets and ensuring accuracy in financial reporting.

Internal controls are embedded across all key operational and financial processes, aiming to promote adherence to internal policies, applicable laws and regulations, and to facilitate optimal use of resources. These controls are not static ? they are regularly evaluated and upgraded in response to evolving business dynamics and regulatory developments.

During the year under review, the Audit Committee, in collaboration with internal auditors, conducted periodic assessments and recommended enhancements to the control environment wherever necessary. The Company remains proactive in strengthening its control mechanisms to ensure business continuity and resilience.

G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The financial year 2024-25 was a landmark year for Rajgor Castor Derivatives Limited, marked by exceptional growth in exports and solid operational execution. The Company recorded a remarkable over 430% surge in

export revenues, reflecting its growing presence in international markets and the effectiveness of its global expansion strategies.

This exponential increase in exports significantly boosted the overall financial performance, supported by continued stability in domestic sales and improved plant efficiency. The Companys ability to scale production and meet rising global demand is a testament to its robust manufacturing capabilities and agile supply chain.

Operationally, the year saw further optimization of capacity utilization, deeper market penetration, and product diversification. Strategic investments in quality enhancement and compliance with international standards played a crucial role in gaining customer trust in newer geographies.

With strong fundamentals and a growing global footprint, the Company is well-positioned to maintain its growth trajectory and continue delivering value to stakeholders.

The financial performance for FY 2023-24 and FY 2024-25 is summarized below.

(Amount in Rupees)

Particulars	Current Year 31.03.2025	Previous Year 31.03.2024
Revenue from Operations	6,254,003,567	5,648,357,605
Other Income	19,719,739	14,66,182
Total Revenue	6,273,723,306	5,649,823,787
Total Expenditure (Including Change in Inventories)	6,134,572,977	5,513,423,466
Profit Before Tax	139,150,329	136,400,321
Less: Tax expense/ Deferred tax liability	49,075,393	38,562,063
Profit after Tax	90,074,936	97,838,258
Earnings Per Share (Basic)	3.77	5.18
Earnings Per Share (Diluted)	-	-

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

In the current year, Rajgor Castor Derivatives Limited continued to build on its strong foundation of employee engagement, development, and inclusivity. The Company maintained a harmonious work environment, fostering collaboration and mutual respect across all levels of the organization.

Recognizing people as the cornerstone of its growth, the Company advanced several HR initiatives aimed at enhancing employee experience and operational efficiency. Key HR processes?such as recruitment, onboarding, leave and attendance management?were further streamlined through technology integration and automation.

Training and capability development remained a strategic priority. Diversity and inclusion continued to be a driving value, with active efforts made to ensure fair and transparent recruitment practices. Feedback-driven improvements, along with benchmarking against industry best practices, enabled the Company to refine its HR framework and policies.

As of March 31, 2025, the Company employed 49 permanent staff members. Looking ahead, the Company remains committed to attracting diverse talent, retaining high-performing individuals, and fostering a people-first culture where every employee has the opportunity to grow and contribute meaningfully.

I. HEALTH, SAFETY, AND SECURITY MEASURES:

During the year, the Company has further strengthened its focus on occupational health, safety, and overall well-being of its employees and surrounding communities. We have adopted a proactive approach, integrating safety into every level of operation, and reinforcing a culture where safety is everyones responsibility.

In line with our commitment to ensure a safe and secure workplace, we continued to conduct comprehensive safety audits and risk assessments across all operational units. This year, additional emphasis was placed on preventive measures and continuous improvement. Moreover, the Company has maintained strict adherence to all statutory safety norms and environmental regulations.

Our initiatives are guided by the belief that a healthy workforce is a productive and resilient one. The Company remains unwavering in its pursuit of achieving zero-harm workplaces and fostering a culture of care, accountability, and vigilance.

J. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Sr. No.	Ratio	FY 2023-24	FY 2024-25	% Change	Explanation
1.	Debtors Turnover	9.95	6.95	-30.97%	Although the collection cycle for trade receivables has improved, the overall decline in the trade receivable turnover ratio was influenced by prevailing market conditions and more flexible selling terms adopted to support sales growth, including pricing strategies better aligned with customer expectations.
2.	Inventory Turnover	24.66	22.26	-9.76%	-
3.	Current Ratio	1.50	1.89	26.25%	The improvement in the current ratio was principally attributable to reductions in trade payables and advances from customers, which led to a decrease in current liabilities and a strengthened liquidity position.
4.	Debt-Equity Ratio	0.64	0.53	-17.67%	-
5.	Net Profit Ratio	1.73	1.44	-16.85%	-
6.	Operating Profit	3.57	3.37	-5.6%	-
	Margin

K. DETAILS OF CHANGE IN RETURN ON EQUITY RATIO:

Ratio	FY 2023-24	FY 2024-25	% Change	Explanation
Return On Equity Ratio	19.99	11.46	-42.69%	The decline in Return on Equity was primarily attributable to an increase in average shareholders equity, following the capital infusion from the companys public listing in the prior year. The growth in equity outpaced the increase in net income, resulting in a lower return on equity for the reporting period.

CAUTIONARY STATEMENT

This Management Discussion and Analysis Report contains forward-looking statements that reflect the Companys current views with respect to future events and financial performance. These statements are based on various assumptions and involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements of the Company to differ materially from those expressed or implied. Forward-looking statements include, among other things, managements beliefs and expectations regarding the Companys future operations, business prospects, growth plans, competitive position, market demand, customer preferences, technological developments, and macroeconomic and regulatory conditions. While these statements represent the Companys current judgment and expectations, a number of external and internal factors could cause actual developments and results to differ significantly, including but not limited to economic conditions, geopolitical risks, foreign exchange fluctuations, regulatory changes, commodity price volatility, weather and climate impact, operational risks, competition and market dynamics, and technology disruption.

For and on behalf of Board of Directors of
RAJGOR CASTOR DERIVATIVES LIMITED
Sd/-	Sd/-
MAHESHKUMAR SHANKARLAL RAJAGOR	BRIJESHKUMAR VASANTLAL RAJGOR
Chairman and Non-Executive Director	Managing Director
DIN: 07765332	DIN: 08156363
Date: 04.09.2025	Date: 04.09.2025
Place: Ahmedabad	P lace: Ah me d a ba d