Rama Phosphates Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

INDIAN ECONOMY

In spite of global uncertainties and volatility and other external challenges, the Indian economy has showed good resilience though the current economic environment could cause a slowdown in the overall global GDP growth. Indian economy is largely growth driven by consumption and capital investment and that we are lesser disadvantaged position. Currently India has a very moderate External Debt-GDP ratio of 19% with substantial forex reserves (close to 11 months of import cover). Recent proactive measures by RBI and microfinance stress handling by both the Banks and NBFCs augurs well for sustainable growth going forward.

The economic stability, based on strong macro fundamentals and slowing inflation, is a solid foundation for the sustained growth. Agriculture is robust, bolstered by good harvests and "near normal" monsoon forecast. With the stable inflation, improved rural demand coupled with optimistic urban consumption, the industry and services are resilient in spite of adverse global scenario. With the appropriate government policies to boost manufacturing sectors, Indian economy would take a pole position in the global arena.

INDIAN AGRICULTURE

The Indian agricultural scenario in FY 2025 is a mix of progress shaped by economic climate and policy facto Rs. The salient features are given below -

1. Economic Contribution and Workforce

Agriculture contributes approximate 17-18% of Indians GDP employing 45% workforce (250300 million people) though its economic share is declining due to growth in services and industries.

2. Production and Food Security

India achieved record food grain production of 330 million MT in FY 2023-24 while for FY 2024-25 it is estimated slightly lower due to uneven monsoon.

The green revolution legacy ensured surplus in staple items like rice and wheat but diversification into high value crops (horticulture, dairy and fisheries) is rising.

Food security is bolstered by scheme like PM - Garib Kalyan Yojana distributing free foodgrains to 800 million people though nutritional deficiency challenge persists.

3. Climatic changes

Erratic monsoon, heat waves and extreme weather conditions.

4. Small landholding

86% of farmers are small/marginal (owning < 2 hectares) limiting economies of scale and mechanization.

5. Soil degradation

Overuse of unbalanced fertilization and monocropping depletes soil health. Only 30% of arable land is adequately irrigated.

6. Over the past year, the Indian agricultural landscape has faced diverse pressures and weather uncertainties to marginal extent underscoring the importance of adaptability and forward-thinking strategies. India has a geographical area of 328.73 million hectares (m ha) spread over climatic regions. India has the second-largest agricultural land in the world and provides livelihood to 58% of the total population. With the worlds largest cattle herd (buffaloes), India is the largest milk producer in the world. Also, it has the largest area planted for wheat, rice and cotton and is one of the largest producer of pulses and spices in the

world. It is the second - largest producer of fruit, vegetables, tea, farmed fish, cotton, sugarcane, wheat, rice and sugar and for India to become a fully industrialized and developed nation, agriculture is an essential component.

7. With increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storage, it is expected that the agriculture sector will reap benefits in the next few years.

8. Trade and Export Agri exports reached $ 50 billion and at the same time import dependence on edible oil (60%) and Pulses (10%) are main concern areas.

INDIAN FERTILIZER INDUSTRY OUTLOOK

- Doubling farmers income

- Climate resilient crops

- Micro irrigation

- Youth migration to urban areas pose major threat to rural labour availability and there is strong need for mechanization.

As per newspaper article published by Indian Express, FY 25 was a good year for Indian agriculture, in which both tractors and fertilizers notched up impressive sales growth. The tractor and fertilizer sales data act as a mirror for farm sector growth. The data is given below:

CONSUMPTION/SALE OF FERTILISER PRODUCTS, TRACTORS

	Urea	DAP	NP/NPK	SSP	MOP	Tractor sales
2013-14	306	7357	7264	38.79	22.8	633546
2014-15	306.1	7626	82.78	3959	2853	551.463
2015-16	306.35	91.07	8821	4253	24.67	433.769
2016-17	296.14	89.64	84.14	3757	28.63	5,82.662
2017-18	298.94	92.94	85.96	3439	3158	7.11,478
2018-19	314.18	9211	9028	35.79	2957	7,80,032
2019-20	33655	101	9857	44.03	27.87	7,05,011
2020-21	350.43	119.11	118.11	44.89	3425	8,99,407
2021-22 2022-23	3415 35725	92.72 104.18	114.79 100.74	5651 50.17	2456 1632	8,42266 9.45311
2023-24	357.8	108.12	110.73	45.44	16.45	8,67237
2024-25	387.74	92.82	14214	4929	22.02	939.713
Fertiliser figures in lakh tonnes. Source: The Fertiliser Association of India

Tractor sales data for April-March fiscal yea Rs. Source: Tractor and Mechanization Association

As per researchandmarkets.com analysis report, the fertilizer market in India is expected to grow from US$ 43.54 billion in 2024 to reach US$ 74.06 billion by 2033, with a CAGR of 6.08% during the period from 2025 to 2033

It further reports that increasing productivity in agriculture, subsidies provided by the government, and the increasing demand for wheat, rice, and vegetables are some of the reasons behind this growth. The report also emphasises the growing shift towards sustainable farming practices such as biofertilizers whilst balanced nutrient management is also another reason.

Fertilizer sales and consumption in FY25

Farmers bought a record 655.94 lt of fertilizers in F.Y. 2025

The consumption of total fertilizer products is about 65 million MT annually and the share of urea consumption is about 59%.

It is reported that there was a record jump of 9 per cent in overall fertilizer sales during 2024-25 in the country as compared to last year. However, paradoxically, their consumption is increased by just 1 per cent against estimated demand. The main contributing items for increased sales are DAP MOP and Complex fertilizers.

As per the latest sales figures announced by government officials, Urea were 387.92 lacs tonnes (lt) during the last fiscal, up 8.4 per cent from 357.81 lt in 2023-24. Sales of Muriate of Potash were up 33.9 per cent at 22.02 lt from 16.44 lt, and Complex (a combination of all nutrients) saw a 28.2 per cent rise to 149.72 lt from 116.8 lt. However, the sales of di-ammonium phosphate dropped to 96.28 lt from 109.74 lt, mainly due to scarcity till mid-November 2024.

The production of SSP is increased by 16.8% at 51.77 lac MT and sales by 8.5% over previous year. In spite of this moderate increase, as against installed capacity of 128.7 lac MT by 102 units, the total operating capacity stands at 122.18 lac MT by 97 units (5 units non-operational), the production has not been going up and is lingering around 50-55 lac MT per annum in the past many years.

Production and consumption data

Production, Im port and Sale of Major fertilizers 2023-24 and 2024-25 (April/March)
	Urea	DAP	NP/NPKs	SSP	MOP
Production (Million MT)
2023-24	31.41	4.29	9.55	4.43	-
2024-25 (P)	30.64	3.77	11.33	5.17	-
+/- % in 2024-25 over 2023-24	-2.4	-12.2	18.7	16.8	-
Import (Million MT)
2023-24	7.04	5.57	2.22	-	2.87
2024-25 (P)	5.65	4.57	2.27	-	3.54
+/- % in 2024-25 over 2023-24	-19.8	-.17.9	2.5	-	23.4
Sale# (Million MT)
2023-24	35.78	10.81	11.07	4.54	1.64*
2024-25 (P)	38.77	9.28	14.21	5.93	2.20*
+/- % in 2024-25 over 2023-24	8.4	-14.2	28.4	8.5	33.9

#=DBT sale *MOP for direct application (P)=Provisional

Agri-Economy scenario

The Agri - sector has demonstrated resilience with an average growth of 5% from F.Y. 2017 to F.Y. 2023 and projected growth of 3.8% in F.Y 2025 as per Economic Survey 2024-25. It contributes around 20% to Gross Value Added (GVA).

Agriculture and Allied sector has been the backbone of the Indian economy, playing a vital role in national income and employment. This sector contributes nearly 17 - 18 percent to GDP of the country. Quite a large population directly or indirectly are engaged in the sector for their livelihood. Further, various agribased industries depend on agriculture to meet their requirement of raw materials, supporting economic growth

Data Snapshot (F.Y. 2024-25)

- Food grains	320 - 330 million tonnes
Production
- Horticulture production	350 million tonnes
- Milk production	230 million tonnes (World largest)
- Agri GDP growth	3- 4% annually
- Irrigation coverage	50% of net sown area (142 million hectares)

Soil and Productivity

It is reported that soils at many places in India are deficient in organic carbon, macronutrients and essential secondary (sulphur) and micronutrients such as zinc, boron and iron. Deterioration of soil health adversely affects fertility, productivity and overall agricultural sustainability. To achieve optimal crop yields, it is imperative to use fertilizers judiciously. In the interest of balanced fertilization, realistic ratio of NPK should be encouraged.

Additionally, use of drones and fertigation techniques are being implemented to optimize fertilizer applications. Programme for Restoration, Awareness Generation, Nourishment, and Amelioration of Mother Earth (PM-PRANAM) initiative incentivises states to adopt alternative fertilizers such as Nano Urea, Nano DAP and organic fertilize Rs. By promoting these sustainable options, the government aims to improve soil health, reduce environmental pollution, and boost agricultural productivity

Import dependency

P&K sector is almost entirely dependent on import of raw materials due to lack of natural resources of phosphate and potash. However, the industry on its part, has continuously endeavoured to ensure timely availability of fertilizers through domestic production and imports even at times with negative margins.

As per the Institute of Pesticides Formulation, Potassium Derived from Molasses (PDM), a byproduct of sugar industry has min. 14.5% potash and can be used by farmers in field as an alternative to MOP thus reducing dependence on imported potash.

Urea and MOP contain 46% nitrogen (N) and 60% potash (P) respectively. DAP has 46% phosphorous (P) plus 18% nitrogen (N). Most crops dont require fertilizers with such high percentage of individual nutrients. They need balanced fertilization - products with nutrients in the right quantities and ratios for effective absorption through the plant roots and leaves. These include not only N, P and K, but also secondary nutrients (sulphur, calcium and magnesium) and micronutrients (zinc, iron, copper, boron, manganese and molybdenum).

Single Super Phosphate fertilizer fortified with Boron and Zinc plays a major role in weaning away farmers from high-analysis fertilizers which also translates into more efficient use of imported material and saves scarce foreign exchange.

Monsoon

As per IMD forecast, monsoon is expected to be "above normal" or greater rainfall during the south west monsoon season (June-September) in this year 2025 in India. This rainfall translates into 5% more in this season than the historical average of 87cm. Thus, it is envisaged that this would be a second year of "above normal" rains as there was rainfall of 8% more than the historical average in the last year also.

Rainfall in India happens in dipole pattern as the highest rainfall happens in North eastern parts and the lowest rainfall occurs in the Thar Desert region of Rajasthan. Ironically, this pattern in reversing for the last decade or so as per IMD.

Major Initiative undertaken by authorities

GoI initiates appropriate policy measures and budgetary allocation under various schemes/ programmes for enhancing the nations agricultural output and thus ensuring food security and also for the welfare of farmers for increasing production, remunerative returns and income support to farme Rs. For faster and wider development of agriculture in the country and to mitigate farmers challenges, following initiatives have been taken by authorities -

i. PM-Kissan Yojana: This scheme provides Rs. 6000/- annually to 120 million farmers aiding income stability.

ii. F.P.O. (Farmer Producer Organisation):

10000 FPOs aim to improve bargaining power and market access to farmers.

iii. Fertilizer subsidy and MSP: Fertilizer subsidy to the extent of Rs. 2.5 lac crore in F.Y. 2025 and periodic hike in MSP for 23 crops to support farmers income.

iv. Scheme for diversification: PM-Matsya Sampada Yojana (Fisheries) and National Horticulture mission promote allied sectors.

v. Clean plant Programme: To enhance the quality and productivity of horticulture crops by providing disease free planting material and will benefit dissemination and adoption of climate resilient varieties, with yield enhancement.

vi. Digital Agriculture Mission: The Mission is conceived as an umbrella scheme to support digital agriculture initiatives, such as creating Digital Public Infrastructure, implementing the Digital General Crop Estimation Survey (DGCES), and taking up other IT initiatives by the Central Government, State Governments, and Academic and Research Institutions. Platform like e-NAM connection 1000 plus mandies in the country. The Government has approved the Digital Agriculture Mission in September 2024 with a total outlay of Rs. 2817 Crores to connect platform like e-NAM with 1000 plus mandies in the country.

vii. Progressive expansion of Agriculture Infrastructure Fund Scheme: The expanded scope includes allowing individual eligible beneficiaries for creation of infrastructure covered under viable projects for building community farming assets, integrated processing projects, convergence of PM Kusum.

viii. National Mission on Edible Oils - Oilseeds (NMEO-Oilseeds): This aims to boost domestic oilseed production and achieving self-reliance in edible oils. The Mission will be implemented over a seven-year period, from 2024-25 to 2030-31.

ix. National Mission on Natural Farming : The

Scheme has a total outlet Rs. 2481 crore to cover 7.5 lac hectare area till F.Y. 2025-26

x. Technological advancement: Precision farming - drones, IoT and AI based Apps are gaining tractions. GM Crops - BT cotton dominated whilst debates on GM-mustard and GM-Brinjal continues.

xi. Renewal energy: solar pumps under PM- Kisan Scheme reduce irrigation cost.

Moreover, following significant programmes have also been initiated during the FY 2024-25.

i. National Pest Surveillance System (NPSS)

ii. AgriSURE - Agri Fund for Start Ups & Rural Enterprises

iii. Krishi Nivesh Portal (Phase -I)

iv. Krishi-DSS Portal - A Geospatial platform for Indian Agriculture

v. Introduction of Voluntary Carbon Market (VCM) for various sustainable agriculture practices

This augurs well to achieve "Atmanirbhar Bharat" of our country.

STATUS OF NUTRIENT BASED SUBSIDY (NBS)

NUTRIENTS	KHARIF 1/4/2025 to 30/9/2025	RABI 1/10/2024 to 31/3/2025	KHARIF 1/4/2024 to 30/9/2024	RABI 1/10/2023 to 31/3/2024	KHARIF 1/4/2023 to 30/9/2023	1/1/2023 to 31/3/2023	1/10/2022 to 31/12/2022
Nutrient Subsidy Rs. Per Kg
"N"	43.02	4302	47.02	47.02	76.49	99.27	98.02
"P"	43.6	30.8	28.72	20.82	41.03	49.94	66.93
"K"	2.38	2.38	2.38	2.38	15.91	25.7	23.65
"S"	2.61	1.78	1.89	1.89	2.8	2.84	6.12
Product Subsidy ^ Per Ton on SSP	7263	5121	4804	3540	6872	7513	7513
Revision in Percentage	41.83%	6.60%	35.71%	(48.49%)	(8.53%)	0.00%

With increase in subsidy rates for P&K fertilizers coupled with "above-normal" monsoon predictions, industry expects better margin in the ensuing financial year. At the same time, there is a reduction of 6% to Rs. 1.77 lac crore on subsidy outgo from governments kitty which is mostly due to decline in import of Urea by 19.8% and DAP by 17.9% during FY 25.

Fertilizer Subsidy

						(Rs. in cr)
	2020-21	2021-22	2022-23	2 523-24	2024 25	(% Chg
Urea	90,549.27	1,00,988.13	1,65,217.13	1,23,092.04	1,24,319.50	1.0
P&K	37,372.47	52,769.97	86,122.23	65,199.58	52,810.00	-19.0
Total	1,27,921.74	1,53,758.10	2,51,339.36	1,88,291.62	1,77,129.50	-5.9

For FY 26, the government, has estimated the fertilizer subsidy to be about Rs. 1.68 lac crore with Rs. 1.19 lac crore allocated for urea and Rs. 49,000 crore for phosphatic and potash fertilizers.

Impact of government subsidies on RPL

Govt. subsidy, particularly (NBS) Nutrient Based Subsidy scheme for Phosphatic fertilizers like Single Super Phosphate (SSP) plays a significant role in the financial and operational performance of fertilizer companies like RPL.

The Indian Govt. provides subsidies to Phosphatic and Potash (P & K) fertilizers under NBS scheme to ensure affordability of fertilizers to farmers and stabilize significant imports cost. For SSP subsidy is fixed per tonne basis adjusted periodically based on international prices of DAP and Sulphur.

As per the statement given above, in FY 2026, the government increased subsidy amount by Rs. 2142 PMT reflecting effective support to farmers amid volatile global raw material prices and also improve price stability and market competitiveness.

STATUS OF SSP FERTILIZER INDUSTRY

Single Super Phosphate (SSP) contains 14.50% water soluble phosphate and its basic raw material is Rock Phosphate and Sulphuric Acid. This SSP fertilizer is widely used for crops like oilseeds, cereals pulses etc., as it is effective in promoting root development and primary plant growth including growth of pods. Apart from Phosphorus, it provides calcium and Sulphur to the plants. SSP is wholly indigenous alternative fertilizer to import- dependent DAP fertilizer.

The majority of SSP fertilizer manufacturers falls under and patronized by MSME sector and to promote indigenous companies would achieve stemming outflow of precious foreign exchange on imported fertilizers.

In order to ensure survival and food availability for the growing population, yields from the field are to be increased consistently. This can be achieved only by balanced use of nutrients considering fertile soil erosion. SSP fertilizer plays a pivotal role in this regard in rejuvenating nutrients in the field. Increased awareness of fertilizer efficiency in farming community with sustainable techniques would result in food security.

The spread of SSP plants all across the country has provided distinct advantage of effectively meeting the demand of these vital nutrients in a very short span of time at competitive prices.

EDIBLE OIL SCENARIO

As per available data, the average oil consumption per head has been doubled to 1.86 liter from 1.0 liter per month in the year 1993-94. At the same time, national edible oil consumption has surged from about 11 MMT (million MT) in the year 200405 to approximate 25.00 MMT today with most of the 13.6 MMT increase driven by soybean oil, palm oil, sunflower oil and rice bran oil.

In India soybean oil is the second most consumed edible next to palm oil. The key driving factors for increase in consumption include rising health awareness of Indian population particularly in 2 & 3 tier cities coupled with increase in disposable income. The demand for non-food applications is also a contributing factor for high consumption.

STRENGTH AND WEAKNESS

Rama Phosphates Limited is a key player in Indian fertilizer industry and possess several strength that aligns with the dynamics of Indian agriculture scenario.

• Established market presence and longevity

Company is a well-established Public Limited Company on BSE and NSE with over 40 year operations and the pioneering unit in Pune operating for 50 yea Rs. This longevity reflects in reliability and brand recognition in fertilizer sector. Its strong market presence is evident in its brands, i.e. "Girnar" and "Suryaphool" widely recognized across various states catering to the needs of farmers in key agriculture regions.

• Strategic manufacturing location

Plants of the Company are located at proximity to high demand agriculture zones ensuring efficient distribution and reduced logistic costs.

• Diversified Product portfolio

Company produces a wide range of products including:

- Fertilizers,

- Micronutrients

- Chemicals

- Edible oil

This diversification mitigates risks associated with depending on a single product and aligns with India push for diversified agriculture including horticulture and allied sectors

• Higher capacity utilization as compared to industry average.

• Focus on sustainable and innovative products

• Strong Promotor Holdings

With promotor holding of 75%, RPL benefits from stable leadership and long term strategic focus ensuring confidence among investors and stakeholders.

• Client Centric Approach

• Alignment with Indian Agricultural needs

The Companys strategic locations and diversified portfolio cater to the needs of Indias 142 million hectare of arable land particularly in rainfed regions. The Companys focus on fortified fertilizers and organic manures support climate resilient monsoon and soil degradations.

• Expand Digital Reach

The Company is expanding digital reach targeting tech-savvy farmers adopting precision farming.

CHALLENGES

• Subsidy reliance

The Companys operations particularly SSP fertilizer heavily dependent on Govt. subsidy.

Any adverse policy could disturb cash flows

• Price volatility exposure

The fertilizer sector faces input cost fluctuation on Rock Phosphates and Sulphur

• Limited Technological adoption due to availability of lesser reserves

• R&D constraints due to limited resources

• Competition pressure

The Company faces strict competition due to lower industry capacity utilization

• Operations and Environment

Environmental compliance risks

• Low social media presence Steps to mitigate challenges:

- Expanding market reach in Northern and Eastern sectors

- Boosting digital engagement in social media platforms

- Working on AI based farmer advisory App

- Invest in R&D : Contemplating introduction of bio-fertilizers

OPPORTUNITIES & THREATS

• Growing demand for phosphatic fertilizers

• India agriculture contributes 17-18% to GDP and employing 45% of workforce

• Relies heavily on phosphatic fertilizers to boost yield of pulses, oilseeds and horticulture crops

• Expansion in organic and sustainable fertilizers

• Adoption of precision farming and technology like FPO/e-NAM and enhanced digital marketing.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Ratio Analysis	As at 31.03.2025	As at 31.03.2024	Unit
Current Ratio	1.76	1.65	Times
Debt-Equity Ratio	0.33	0.41	Times
Debt Service Coverage Ratio	2.04	(0.56)	Times
Return on Equity Ratio	3.78	(9.39)	Percentage
Inventory Turnover Ratio	104.10	118.64	Days
Trade Receivable turnover Ratio	79.19	99.95	Days
Trade Payable turnover Ratio	67.63	59.94	Days
Net Capital turnover Ratio	4.18	3.20	Times
Net Profit Ratio	1.84	(5.15)	Percentage
Return on Capital Employed	7.67	(5.60)	Percentage
Return on Investment Ratio	106.31	62.39	Percentage

INDUSTRIAL SAFETY, ECOLOGY & POLLUTION CONTROL

• Requisite approvals from respective authorities are well in place for operations of all plants.

• Safety trainings, mock-drill activities are regularly conducted and basic trainings are imparted to all workmen and staff at all plants.

• On-line monitoring as per the directives of pollution control authorities are installed and thus complying with the requirements.

OUTLOOK

Short Term: (2025-26)

• The Company is likely to sustain growth by leveraging trusted brands in distant areas

• Govt. scheme can drive SSP sales supporting India food security goal

• After commissioning of Dhule plant, financial performance may improve significantly due to economies of scale and lower cost of production

• To provide digital engagement and focus more on value-added products

• To increase presence in chemical segment

Medium Term: (2026-28)

• With sustainable growth in SSP and technological integration and leveraging chemical business, RPL will further strengthen financial position

• To invest in Solar Parks to reduce energy consumption cost

Long Term: (2028-32)

• Becoming a Key player in P&K segment across India and significantly improve diversified agriculture portfolio viz., organic, water-soluble and bio-fertilizers.

• Achieve diversified portfolio and become 1500 crore turnover Company.

RISK MANAGEMENT POLICY

Your Company operates in a dynamic business environment which have a bearing on day-to-day operations and thus has adequate internal financial control systems to monitor processes, financial reporting and compliance with applicable regulations viz., legislative changes, financial market volatility etc. Moreover, Risk Management is an integral part of the business process. It is pertinent to note that existing systems are reviewed by Statutory/Internal Auditors and due reporting is made to the Audit Committee for identification of deficiencies and necessary time bound actions to be taken. The Committee constituted as per statutory requir-ements reviews the risk management periodically and ensure suitable policies/actions are taken to create sustainable value to all stakeholders.

CORPORATE SOCIAL RESPONSIBILITY

Our Corporate Social Responsibility is based on conviction rather than obligation. We extend our helping hands to fulfill ambition of deprived humans in our factory vicinity through direct or indirect monetary contribution and other requisite assistance as per the need.

HUMAN RESOURCE MANAGEMENT

Cordial relations are maintained at all levels by Key personnel in all plants so as to achieve optimum production.

CAUTIONARY STATEMENT

The Companys performance is mainly dependent on several external factors which are beyond the control such as monsoon, Government policies, fluctuation in prices of raw material, foreign exchange risk and other internal factors which could adversely affect the operations of the Company.

Some of the foregoing statements in the report may be forward looking and are stated as required by applicable laws & regulations. Many external and internal factors may affect the actual results which could be different from the projections made by the Directors with respect to future performance and outlook of the Company.

	For and on behalf of the Board of Directors
	HARESH D. RAMSINGHANI
	CHAIRMAN & MANAGING DIRECTOR
	DIN: 00035416
Place: Mumbai
Date : May 14, 2025