Ritesh International Ltd Management Discussions

Industry Structure, Developments, Opportunities and Threats

The Indian market for stearic acid and fatty acids is a dynamic and growing sector, integral to a wide range of industries. It is largely driven by the countrys robust manufacturing base, particularly in oleochemicals, and increasing domestic and international demand for various end-use products. The Rubber and PVC industry is growing at a faster pace. Our product range includes Stearic acid, Fatty Acids; the ultimate users of our products are Rubber and PVC industries. Since our inception, we are providing superb quality products to our valued customers at national level. The raw materials are procured from reliable vendors and each product is tested on several parameters to ensure optimum quality Therefore the demand of our products is set to grow at much faster rate. Your company is trying its best to increase the market share of its products and to economize its production.

Further, the Company is now actively taking steps to improve the Oil division business. The Company has made sales of Rs. 16006 lakhs from stearic acids & other non-edible oils (Previous year Rs. 11917.30 lakhs) and sale of garments Rs. 694.06 lakhs (Previous year Rs. 980.76 lakhs). Company is in process to increase the market for stearic division now.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The global and Indian oleochemicals industry operates as a foundational building block for sustainable, bio-based industrial applications. Oleochemicals derived from natural non-edible vegetable oils (such as palm stearin, rice bran oil, castor oil, and technical grade acid oils) and tallow serve as eco-friendly, biodegradable alternatives to petroleum-derived petrochemical building blocks. Your Company operates primarily in the specialized segment of processing non-edible oils and technical fats into high-purity Fatty Acids, Stearic Acid, and Refining By-Product Crude/Refined Glycerin. The key drivers and market developments during FY 2025-26 include: Domestic Market Expansion: The domestic demand for oleochemicals, particularly Stearic Acid and Distilled Fatty Acids, continues to demonstrate resilient annual growth (~4.3% to 5.3% CAGR). Growth is heavily anchored by the robust expansion of downstream user industries in India, including personal care (soaps, cosmetics, emollients), rubber processing (tyre manufacturing), PVC stabilizers, plastics, pharmaceuticals, and textile auxiliaries. Global Raw Material Trends & Sustainability: Global supply dynamics were shaped by feedstock cost fluctuations in palm-based inputs from Southeast Asia (Indonesia and Malaysia). Concurrently, tightening environmental norms and global decarbonization commitments have accelerated the transition among industrial consumers away from synthetic petrochemicals toward green, renewable oleochemical inputs. Value-Addition Shift: The Indian market witnessed increased demand for high-purity, triple-pressed stearic acid grades and pharma-grade refined glycerin (99.5% purity). Value-added derivatives present higher margin opportunities compared to commodity-grade technical fats.

OPPORTUNITIES AND THREATS

1. OPPORTUNITIES

Expansion in Rubber & Tyre Manufacturing: Surging production in automobile, commercial vehicle, and two-wheeler segments has led to expanded tyre manufacturing capacities in India, driving steady domestic demand for Stearic Acid as a crucial vulcanizing activator.

Booming Personal Care and FMCG Demand: Increasing urbanization and rising per capita expenditure on personal care and hygiene products drive high volume requirements for Distilled Fatty Acids and refined Glycerin. PVC & Plastics Industry Growth: Growing infrastructure and housing projects in India fuel demand for PVC pipes, fittings, and window profiles, wherein Stearic Acid acts as an essential internal/external lubricant and processing aid. High-Value Glycerin Applications: Emerging applications of Glycerin in alkyd resins, polyurethane foams, pharmaceutical formulations, and green solvent synthesis present lucrative avenues for forward integration.

2. THREATS & CHALLENGES

Feedstock Volatility: The primary raw materials (non-edible oils, palm fatty acid distillates, and crude palm stearin) are tied to international commodity markets, foreign exchange movements, and agricultural yields.

Import Competition from ASEAN: Large-scale low-cost imports of oleochemical products from Southeast Asian nations (benefiting from proximity to palm plantations) create periodic pricing pressure on domestic primary producers. Environmental Compliance & Effluent Handling: Strict requirements under Pollution Control Board regulations (Zero Liquid Discharge norms) demand continuous capital expenditure in effluent treatment and sustainable utility operations.

Segment Wise performance

As the Companys business activities fall within a single primary business segment, Hence, the reporting on Segment wise Performance of the Company as per the provisions is not applicable / required. However, the Company has made sales of Rs. 16006 lakhs (Previous year Rs. 11917.30 lakhs) of Oil Division.

Financial Performance of the Company

The companys overall operational performance has been good during the financial year 2025-26. Revenue of the Company is generated mainly from sale of Stearic Acids and Other Non-edible Oils. Companys achieved sales. The Company has made sales of Rs. 16006 lakhs from stearic acids & other non-edible oils (Previous year Rs. 11917.30 lakhs) and sale of garments Rs. 694.06 lakhs (Previous year Rs. 980.76 lakhs) during the Financial Year.

Risk and Management Perception

The operations of your company are subject to general business risks and competition in the industry, which can affect the growth of the company. Your company continuously updates its systems and procedures to reduce uncertainties and risks and explore new market to cope with the competition.

Internal Control and their adequacy

The Company has adequate system of internal control and internal audit system and management has access of all its assets and proper procedure is adopted for disposal of any assets of the company.

The Company has appointed an Independent Auditor to ensure compliance and effectiveness of the Internal Control Systems in place.

The Audit Committee is regularly reviewing the Internal Audit Reports for the auditing carried out in all the key areas of the operations. Additionally, the Audit Committee approves all the audit plans and reports for significant issues raised by the Internal and External Auditors. The Scope of the Internal audit is not limited to accounts only but also includes operations, inventories, costing records, physical verifications of immovable and movable assets etc. on regular basis. Regular reports on the business development, future plans and projections are given to the Board of Directors.

Material development in human resources and industrial relation front, including No. of people employed

Human Resources Development, in all its aspects like training in safety and social values is under constant focus of the management. Relations between the management & the employees at all levels remained healthy & cordial throughout the year. The Management and the employees are dedicated to achieve the corporate objectives and the targets set before the company. Industrial relations remained cordial and harmonious during the year under review and there was no working day loss due to any adverse activities. The company had employed 143 persons during the financial year 2025-26.

Cautionary Statement

The Annual Report including those which relate to the Directors Report, Management Discussion and Analysis Report may contain certain statements on the Companys intent expectations or forecasts that appear to be forward looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statements.