Ravikumar Distilleries Ltd Management Discussions

GLOBAL ECONOMY

In CY 2026, the global economy sustained a stable growth trajectory of 3.4%, navigating trade frictions and policy ambiguity with notable resilience. This performance brings the adaptability of major economies to the fore. Accommodative financial conditions and fiscal & monetary policy support facilitated expansion. Advanced economies recorded a growth of 1.9%. The US exhibited steady growth, attributable to strong domestic demand and sustained investments in advanced technologies. Growth moderated across the Eurozone due to subdued industrial activity and weaker external demand. In contrast, emerging economies expanded by 4.4%. This was driven by strong export performance and steady trade across several Asian economies.

This is expected to result in a slight rise in inflation, with projections at 4.4% in CY 2026.1 Iowever, inflation is expected to decline to 3.7% in CY 2027, reflecting easing labour market conditions in several economies and subdued demand for tradable goods.

Indian economy

India continues to be one of the fastest-growing major economies globally, supported by its favourable demographic profile, strong domestic consumption, ongoing structural reforms, and a sustained drive towards digital transformation. Key contributors to this growth include healthy GST collections, expanding infrastructure, manufacturing sectors, and rapid technological adoption across industries. The governments emphasis on improving the ease of doing business and nurturing a vibrant startup ecosystem has further bolstered economic momentum.

Despite global uncertainty, Indias economy maintains strong momentum with a steady growth rate of 7.7%. Robust consumption and heightened investment activity positioned India as the fastest growing major economy for the fourth consecutive year. Inflation stayed well below the Reserve Bank of Indias (RBI) target band, at around 3.4%. Falling food prices primarily drove this decline. The price moderation reflects improved real purchasing power and supported consumption. As price pressures declined, monetary support was provided through a total reduction of 125 basis points in the policy repo rate. Despite global uncertainties and downward revisions in growth forecasts for other large economies, India is set to maintain its leadership in global economic grow^rth. Supported by strong fundamentals and strategic government initiatives, the country is well-positioned to navigate the challenges ahead. With reforms in infrastructure, innovation and financial inclusion, India continues to enhance its role as a key driver of global economic activity.

Indias merchandise imports grew faster than merchandise exports, resulting in a widening of the trade deficit. Gross FDI inflows remained robust, primarily benefiting the manufacturing and energy sectors. By year-end, the rupee hit an all-time low of approximately ?95/USD, driven by Middle East conflict volatility and FPI outflows. Despite this, the INR remained one of the least volatile emerging market currencies, supported by a modest current account deficit and strong forex reserves. A weakening rupee accelerates domestic inflation by driving up import costs (especially crude oil) and widens the trade deficit, though it provides a competitive boost to Indian exporters.

Industry structure and developments:

The Company is engaged in the business of manufacturing and trade of Indian Made Foreign Liquor (IMFL) under our own brand portfolio as well as under tie up arrangements with other companies. The IMFL comprises of Whisky, Brandy, Rum, Gin & Vodka. We started our initial capacity of 7,20,000 cases per annum and a bond capacity of 6300 cases of Excise Bonded warehouse. Presently our plant is having an installed capacity of 14,25,000 cases per annum and 12,250 cases of Excise Bonded warehouse.

Financial and Operational Performance:

During the year, the total Income from operations was Rs. 5702.01 lakhs compared to Rs. 7790.22 lakhs in the previous year recording a net profit of Rs. 13.68 lakhs, as against the net profit of Rs. 13.22 lacs in the previous year.

Material changes between the periods from end of Financial Year to the date of Report:

There are no material changes between the periods from end of Financial Year to the date of Report.

Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operation in future:

There are no other significant and material order passed by the Regulator/Court/Tribunals impacting the going concern status and Companys operations in future.

Opportunity And Threat

Opportunity:

The Indian liquor industry is poised for growth and expected grow @ 5% to 6% per Annum, driven by a combination of demographic shifts, urbanization trends, and rising income levels. This growth is fueled by the increasing preference for alcoholic beverages among the younger population, particularly millennials, who are drawn to beer for social gatherings and celebrations.

Threat:

Intense competition prevails in the segment, fuelled by the lucrative growth prospects of the industry

The industry also faces challenges such as regulatory hurdles, high taxation, and restrictions on advertising alcoholic beverages.

The Indian alcohol business is highly regulated, and each state has its own rules with respect to indirect taxes and duties, which can impact business operations. In addition, there are multiple regulatory considerations with respect to pricing, licensing, plant set-up, marketing & advertising and distribution. All these rules and regulations serve to create barriers to entry for both new and existing players.

Segment-wise or Product-wise performance:

Company operates in only one segment i.e. liquor business, hence the above point is not applicable to the Company.

Business Outlook:

The Indian alcohol market has been flourishing since the early 2000s. After recording strong growth between 7-12% annually until 2011, the industry faced a slowdown due to heavy import duties, varying state excise taxes, and political instability during election seasons. A major dip was witnessed in 2013 when spirits volume fell by 2-3%.

While whisky is the single largest spirits category at a pan-India level, regional markets such as Pondicherry, Tamil Nadu, Andhra Pradesh, and Kerala are dominated by brandy, which accounts for a significant share of spirits consumption. In fact, brandy represents over 45% of IMFL volumes in South India, making it the most widely consumed category in these regions. Rum continues to enjoy stable demand in certain coastal and defence-linked markets, while vodka, gin, and craft spirits are seeing steady urban growth.

Consumers are increasingly drawn to quality and premium products, supported by rising disposable incomes, urbanisation, and evolving social habits. The influence of social drinking and growing participation of women in alcohol consumption are also reshaping demand. With Indias youth comprising nearly 65% of the population, overall consumption is set to remain strong. Brandy maintains its leadership in the South, while beer remains the drink of choice for younger consumers.

Challenges persist in the form of high taxes, fragmented state regulations, restrictions on advertising, and demand sensitivity to household income levels. Nevertheless, as the economy expands, the alcohol sector continues to gain traction.

One of the most notable trends is the premiumisation of spirits. Premium and super-premium segments are growing faster than the overall industry, especially in categories like brandy, Indian single malts, and premium rum. The southern markets, in particular, are witnessing a strong shift towards higher-end brandy labels, creating opportunities for us to consolidate brand leadership.

While whisky leads nationally, the southern Indian market remains brandy-driven, complemented by steady demand for rum and beer. The premiumisation wave, beer expansion, and growing wine culture are reshaping the industry, ensuring strong growth for spirits producers well into the next decade.

RISKS AND CONCERNS:

Government regulations affect the Indian Liquor industry introducing structural rigidities. Apart from the high level taxes and levies regulations pertaining to licensing creation or expanding of brewing / distillery and bottling capacities, manufacturing process (grain based and molasses based) distribution and advertising impinge on the industry. Further liquor being a state subject, every state has different regulations (including those on distribution) and tax rate for the industry apart from restrictions as well as levies on the inter-state movement of liquor.

The India-European Union Free Trade Agreement signed in January 2026 significantly slashes steep import duties on European wines, spirits, and beers, making foreign alcohol cheaper and more accessible for Indian consumer.

In addition, Government is introducing some new licenses for new business entrants which poses a competition risk for the Companys product.

Future Outlook:

During current year,your Company will try to improve the performance with applying optimistic efforts.

Internal Control Systems and their adequacy:

The Managing Director Whole Time Director certification provided in the report discusses the adequacy of our internal control systems and procedures

Development in Human Resource / Industrial Relations (including number of persons employed)

The most important asset of the Company is its Human Resources.

Number of persons employed :55 employees as on 31st March 2026.

Cautionary Statements:

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectation may be forward looking statements with in the meaning of applicable securities law sand regulations. Actual results could differ materially from those expressed or implied.

Details of significant changes (i.e change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including not included in Management discussion and analysis report

As given in the notes to accounts.

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereto

As given in the notes to accounts.

ANNEXURE "A"

INFORMATION REQUIRED UNDER SECTION 197 OF COMPANIES ACT, 2013 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

1. The Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year 2025-26:

2. The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Finance Officer, Company Secretary or Manager, if any, in the financial year 2025-26 compared to financial year 2024-25:

3. The Median Remuneration of employee (MRe) excluding Executive Director was Rs.1,38,380/- and Rs. 1,45,550/- in fiscal year 2026 and 2025 respectively. Percentage decrease in median remuneration during the financial year 2025-26 is 4.92 %.

4. Number of permanent employees on the rolls of the Company: 55 employees as on 31.03.2026.

5 Key parameters for any variable component of remuneration availed by the Directors: - No variable components of remuneration availed by the directors.

6. Remuneration of Top 10 Employees of the Company

ANNEXURE "B"

PARTICULARS OF CONTRACTS / ARRANGEMENTS MADE WITH RELATED PARTIES

[Pursuant to Clause (h) of Sub-section (3) of Section 134 of the Companies Act, 2013, and Rule 8(2) of the

Companies (Accounts) Rules, 2014 - AOC-2]

This Form pertains to the disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in Sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto.

Details of contracts or arrangements or transactions not at arms length basis

There were no contracts or arrangements or transactions entered in to during the year ended 31st March, 2026, which were not at arms length basis.

Details of material contracts or arrangement or transactions at arms length basis

The details of material contracts or arrangement or transactions at arms length basis for the year ended 31st March, 2026 are as follows: