ruchi soya industries ltd share price Management discussions

Global Economic Review

The calendar year 2022 commenced with a cautious sense of optimism as the global landscape navigated through various challenges. Factors such as the Russia-Ukraine conflict, supply chain disruptions, inflationary pressures and tightening monetary policies had a moderating effect on global output. Additionally, China experienced a temporary setback in growth during 2022 due to a surge in COVID-19 cases following the relaxation of restrictions. According to the

International Monetary Fund (IMF), the global economy recorded a GDP growth rate of 3.4% in 2022, which was lower than the previous years growth of 6.3%.

Outlook

Despite challenges, there is a positive outlook for the future. Inflation is expected to soften from 8.7% in 2022 to 7.0% in 2023. Emerging and developing economies are projected to demonstrate stronger growth rates compared to advanced economies. With China lifting

COVID-19-related restrictions, economic activities are expected to rebound, easing supply chain challenges. The International Monetary Fund (IMF) maintains an optimistic outlook for the world economy, forecasting a growth rate of 2.8% in 2023. These projections indicate the potential for a gradual recovery and a renewed momentum in global economic dynamics.

Indian Economic Review

The Indian economy has displayed remarkable resilience, effectively navigating the global disruptions. India emerged as the worlds fastest-growing economy, supported by favourable government policies and increased private consumption. Projections from the National

Statistical Office (NSO) indicate that Indias GDP for FY23 expanded by 7.0%, showcasing impressive growth. The economy reported growth of 9.1% in FY2021-22.2

India also enjoyed a continued growth in its private consumption which is estimated to be around 7.3% for FY23. Indias notable achievement in administering the worlds second-largest vaccination drive, consisting of over 2 billion doses, has not only contributed to public health but also bolstered consumer sentiment and confidence. The RBI came up with various initiatives to curb the inflation and limit the detrimental impacts caused by it.

One of the broad signs of strong economic activity is the increase in

GST collections. The average monthly gross GST collection for the last quarter of the FY 2022-23 has been H1.55 lakh crore against the average monthly collection of H 1.51 lakh crore, H1.46 lakh crore and H1.49 lakh crore in the first, second and third quarters respectively3. The increasing GST collection serves as a barometer for higher consumer spending, business investment and overall confidence in the economy and its growth prospects.

Outlook

The Reserve Bank of India (RBI) has forecasted a GDP growth of 6.5% with inflation at 5.1% in FY24, signalling a positive outlook for the countrys economic performance. The governments emphasis on enhancing public digital infrastructure will create abundant opportunities for individuals and businesses, fostering economic strength and promoting holistic growth across the nation4.

The formalisation of Indias economy has brought about transformative changes, promoting transparency and yielding positive outcomes for businesses. This transformation sets the stage for a robust growth trajectory in the coming years. Indias potential as a manufacturing hub has gained significant traction as countries and companies seek to diversify their manufacturing sources and relocate from China.

Escalating tensions between the United States and China, driven by trade issues and technological competition, have further accelerated this trend. To leverage this opportunity, the Indian government has introduced initiatives like ‘Aatmanirbhar Bharat and ‘Make in India, aimed at strengthening the manufacturing sector. Additionally, the establishment of the Infrastructure Finance Secretariat has created a favourable environment for private investment in infrastructure.

India has set ambitious goals for its economic growth, aiming to become a $5 trillion economy by 2025 and the worlds third-largest economy by 2030. To realise its economic goals, the government has devised a comprehensive strategy that places a strong emphasis on renewable energy. India is poised to become a major player in consumer spending. Projections indicate that by 2030, Indias consumer expenditure will reach an impressive $6 trillion, positioning the country as the third-largest consumer spender globally, closely following the United States and China. This surge in consumer spending signifies the growing purchasing power and economic strength of the Indian population.5

Industry Overview FMCG7

The FMCG sector, ranking fourth in the Indian economy, has emerged as a major employer, providing livelihood to approximately

3 million individuals. In FY23, it witnessed a revenue growth of ~9%, propelled by favourable government policies, a surge in consumer consciousness, improved accessibility and evolving lifestyles. In recent years, India has witnessed a dynamic transformation in the FMCG space. Premiumisation, urbanisation, and the health-conscious choices have not only altered consumer preferences and lifestyles but are also redefining industries. Rising disposable incomes, a growing upper middle class and a desire for improved lifestyles have turned the consumers for higher quality, aspirational, and value-added products. The health-conscious movement is gaining momentum in India as consumers become increasingly aware of the importance of well-being. A growing emphasis on holistic health, fitness, and nutrition has driven individuals to adopt healthier lifestyles. As the number of health-conscious consumers is growing in India, there is massive headroom for growth.

Indias expansive digital landscape, boasting a staggering 800 million internet users who spend an average of 7.3 hours on their smartphones each day, has opened significant opportunities for the FMCG market.

E-commerce has played a pivotal role in this transformation recording a 36.8 year-on-year growth in 2022 and accounting for 17% of the overall FMCG consumption. The Union Budget of FY23 allocated US$222 million to the Department of Consumer Affairs and US$27.82 billion to the Department of Food and Public Distribution to further push for the growth of the Indian FMCG market.

Food Inflation

The rise in retail inflation can be attributed to an escalation in food inflation, particularly within the ‘Food and beverages category, which significantly contributed to headline inflation during FY23. This inflationary trend was largely driven by factors such as vegetables, cereals, milk and spices. The Reserve Bank of India (RBI) has additionally projected persistent domestic price increases for cereals and spices in the upcoming period.

Outlook

The Indian FMCG market is poised for remarkable growth, with a projected compound annual growth rate (CAGR) of 27.9% until 2027. This is complemented by the rapid development of the Indian e-commerce market, which is expected to witness a CAGR of 26.7% until 2027, fuelled by the increasing number of internet and smartphone users. Additionally, the Indian online grocery market is forecasted to experience a robust CAGR of 32.7% until 2032. The growth of the Indian FMCG sector can be attributed to several factors, including the rising middle-class population, ongoing economic development, revival of rural markets and a young and ambitious demographic. The FMCG segment is expected to experience a volume driven growth rather than a price-led growth. With these favourable conditions in place, the Indian FMCG sector is expected to sustain its upward trajectory, presenting significant opportunities for businesses operating within this industry.

Growth Drivers11

Population Growth

Indias thriving population growth holds immense potential for the

FMCG sector, paving the way for substantial growth opportunities. As the population continues to expand, the demand for FMCG products is set to rise significantly. By 2030, Indias population is projected to reach a staggering 1.5 billion, further bolstering the growth prospects for the FMCG industry. With this promising outlook, FMCG companies are tapping into the vast consumer base and strategically positioning themselves for long-term success in the Indian market.

Increasing Consumer Market

By 2030, India is poised to emerge as the worlds largest market for young consumers, with 357 million individuals under the age of 30.

Simultaneously, the country is projected to house 290 million people in its thriving metropolitan areas. This significant demographic shift positions India as a key player in the global youth consumer market, accounting for one-fifth of its total. This surge in the young population presents a remarkable growth opportunity for the FMCG sector. With a burgeoning consumer base and a growing preference for convenience and quality products, the FMCG industry is set to flourish as it caters to the evolving needs and aspirations of Indias youth.

Growth of E-commerce

The technological revolution sweeping across India has greatly enhanced accessibility to products for consumers. With the advent of websites and mobile applications, features such as advanced search options and easy ordering processes have made it incredibly convenient for users to find and purchase their desired items. Moreover, the ability to target specific demographics and personalise marketing strategies has allowed FMCG brands to engage with consumers in more meaningful ways. This surge in e-commerce is expected to continue in the future, driven by the increasing number of smartphone users and the widespread availability of internet access. Projections indicate that India will surpass 1 billion internet users by 2030, further fuelling the growth of e-commerce.

Value Augmentation

The growth of the FMCG sector in rural India is expected to be bolstered by the increasing rural consumption. The governments dedicated programs aimed at promoting rural development have also played a crucial role in supporting the growth of the rural FMCG sector. FMCG products account for approximately 36% of the total rural expenditure which is expected to increase as rural areas continue to experience economic growth and improvements in living standards. This presents a promising opportunity for FMCG companies to tap into the vast potential of rural markets and cater to the evolving needs and aspirations of rural consumers.

Technology

Market research and data analytics play a pivotal role in understanding consumer behaviour and purchase patterns in the FMCG sector. They provide valuable insights that help businesses identify trends and adapt their strategies accordingly. With the rapid advancement of technology, companies can now leverage the latest software and tools to stay ahead of changing consumer demands. By integrating these cutting-edge technologies, companies can optimise their supply chains, making them more efficient and adaptable to market fluctuations. This not only enhances their ability to meet consumer expectations but also improves overall operational efficiency. Embracing technological advancements in market research and data analytics empowers

FMCG businesses to make data-driven decisions, stay competitive, and effectively cater to the evolving needs of their customers.

Creation of Brand Communities

In the current landscape, consumers have easy access to information about other consumers who have made similar transactions. This has prompted companies to develop marketing strategies aimed at fostering brand communities among like-minded customers who share common social, political and cultural attributes. By building these communities, companies can create a sense of belonging and connection among their customers, leading to increased brand loyalty and advocacy. These strategies focus on creating platforms and spaces where customers can engage with each other, share experiences and form relationships based on their shared interests and values.

1.5 billion Largest

e forecasted population Market for young of India by 2030 consumers by 2030

1 billion

Forecasted internet users in the country by 2030

Nutraceuticals

The significant growth of Indias Nutraceuticals sector can be largely attributed to the impact of the COVID-19 pandemic on the consumers mindsets. The pandemic prompted a noticeable change in consumer preferences, with a greater emphasis on preventive healthcare, healthier products and adopting healthier lifestyles. This shift in demand resulted in pharmacies stocking up on nutraceuticals, which in turn contributed to the substantial growth of the sector. Estimates indicate that during the pandemic, a staggering number of over 640 million Indians consumed nutraceuticals. The pandemic served as a catalyst for the heightened awareness and prioritisation of health and wellness, driving the demand for nutraceutical products.12

Outlook13

The Indian nutraceuticals market is poised for promising growth, with estimates projecting a compound annual growth rate (CAGR) of 15% until 2028. This upward trajectory has attracted the attention of global companies, who recognise the immense potential of Indias growing consumer base. Factors such as the rise in disposable income, rapid urbanisation, a growing middle class and the expansion of the e-commerce sector have contributed to the robust growth of the domestic nutraceuticals market. These favourable conditions create a favourable environment for both local and international players to capitalise on the increasing demand for nutraceutical products in India. With a thriving market and a positive outlook, the Indian nutraceuticals industry presents significant opportunities for companies looking to expand their presence and cater to the evolving needs of health-conscious consumers.

640 million 15%

Indians consumed CAGR of the Indian nutraceuticals during nutraceuticals market the pandemic till 2028

Growth Drivers14

Shifting Mindset of Consumers

There is a notable shift in consumer behaviour towards taking a proactive approach to their health and well-being. Individuals are now more conscious about the products they consume, ensuring that they contribute to their overall wellness. This presents a significant chance for the Nutraceuticals Industry in India to experience significant expansion. In line with this trend, the Indian preventive healthcare sector is projected to witness remarkable growth, with estimates indicating that it will reach a value of $197 billion by 2025, reflecting a CAGR of 22%.

Personalised Products

The rapid growth of e-commerce and increased health awareness among consumers have empowered them to utilise available technology to access products that align with their specific needs and preferences. This trend reflects consumers proactive approach towards improving their well-being and their ability to explore and find the most suitable products. With the convenience and wide range of options offered by e-commerce platforms, consumers now have enhanced accessibility to diverse product offerings. This shift not only benefits consumers in finding products that cater to their unique requirements but also enables businesses to connect with their target audience more effectively.

Increased Consumer Awareness

Consumers are displaying a growing consciousness regarding the sourcing and development practices employed by companies. This shift in consumer behaviour is prompting brands to adopt a more transparent approach and provide robust scientific research and evidence to support their product claims. In response to this demand, the nutraceutical segment is experiencing a surge in investments dedicated to research and development (R&D) and innovation which has empowered it to address specific health concerns with targeted solutions. The commitment to R&D and innovation not only ensures that brands are meeting consumer expectations for efficacy and safety but also paves the way for advancements in the field of nutraceuticals.

Consumer Experience and Product Innovation

Companies are actively developing nutraceuticals in various convenient forms such as tablets, gummies, chewable and mixes, making them easily consumable for individuals. Furthermore, these companies are committed to providing comprehensive information about their products to consumers, enabling them to make well-informed decisions regarding their health and well-being. By offering transparent details about the ingredients, dosage and potential benefits, companies aim to empower consumers to choose the nutraceutical products that align with their specific needs.

22% $197 billion

CAGR of the Indian Estimated Indian preventive preventive healthcare healthcare sectors value sector till 2025 by 2025

Emerging Hub of Nutraceuticals15

The nutraceutical industry is experiencing a significant upswing in India, driven by a growing consumer focus on health, hygiene and wellness amplified by the impact of the pandemic. Domestic manufacturers are fulfilling a substantial portion of the countrys nutraceutical demand, and the sector is set to witness continuous growth. Factors such as the health consciousness wave sweeping the nation, easier access to nutraceuticals through retail, e-commerce, social media platforms and the dedicated category for health-boosting supplements in Indias vast e-retail landscape contribute to increased demand and sales. Aggressive marketing strategies centred around self-care and promotion through medical pharmacies have further bolstered the sales of nutraceutical products.

The trust in herbal and herb-derived formulations among Indian consumers has also contributed to the industrys success.

Moreover, the diverse range of nutraceutical offerings has enabled manufacturers with production capabilities to cater to a wide market without the need for extensive infrastructure setup. As the nutraceutical market in India continues to evolve, domestic manufacturers stand at the forefront, fulfilling the nations growing demand for preventative healthcare products.

Edible Oil

India has emerged as the leading global importer of edible oil with estimates indicating that India imports approximately 15% of the worlds total edible oil as of FY23. While imports were historically cost-effective, recent challenges such as supply chain disruptions due to the pandemic and conflicts between Russia and Ukraine have resulted in increased prices for imported edible oil. This has pushed the government of India to push for the increase of domestic edible oil production.

Outlook17

The future of the Indian edible oil market looks promising, with projections indicating significant growth in the coming years. By

2028, the market size is expected to reach a substantial 26.7 million tonnes, with a compounded annual growth rate (CAGR) of 1.55% leading up to that year. The increasing awareness among consumers about health concerns and the role of edible oil in maintaining well-being is a key driver behind this growth. Moreover, the growing presence of international cuisines in India has further propelled the demand for edible oil, given its multiple applications in cooking.

Recognising the importance of this sector, the Indian government has proposed the National Mission on Edible Oil (NMEO) to ensure the countrys self-sufficiency in edible oil production and meet the rising consumption demands.

26.7 million 1.55% tonnes

Indian Edible Oil market CAGR of the Indian Edible size by 2028 Oil market till 2028

Growth drivers18

Rising Consumer Health Concerns

Consumers are adopting a more health-conscious approach, placing greater emphasis on improving their well-being. As a result, there has been a noticeable shift in their dietary choices, with an increased focus on incorporating edible oil into their meals. The rising awareness of the benefits associated with consuming edible oil, such as its contribution to a balanced diet and overall health has played a significant role in this trend. Consumers are gradually recognising the importance of incorporating quality edible oils in their cooking and food preparation processes to promote a healthier lifestyle.

Additional Players in the Segment

The edible oils sector is witnessing a surge in new entrants, contributing to a vibrant and competitive domestic market. The growing number of companies entering this sector brings with it a diverse range of products, offering consumers a wider variety of choices. With more players in the market, consumers can expect an expanded selection of edible oil products that cater to their specific preferences and dietary needs. This influx of competition not only enhances consumer options but also encourages companies to continually improve their offerings, ensuring quality, affordability and innovation.

Domestic Push

The Indian government is actively working towards reducing the nations reliance on imported edible oil. To achieve this objective, several schemes and policies have been implemented to support the domestic production and increase the availability of domestic edible oil. While the international market is anticipated to witness a decline in edible oil prices, the governments focus is on enhancing Indias self-sufficiency and resilience to global fluctuations.

Oil Palm Plantation

India stands as the largest importer and second-largest consumer of palm oil globally with estimates suggesting that the country imports around 14 Million Tonnes (MT) of palm oil every year. While Indias domestic production of palm oil is growing, the country continues to rely primarily on imports to meet its demand. The versatility of palm oil extends beyond the food industry, with increasing demand observed in non-food applications like surfactants, personal care products, cosmetics, and agrochemicals. This diversification of usage presents a promising opportunity for the palm oil sector.

Largest Second largest

Importer of palm oil Consumer of palm in the world oil in the world

Potential Area and Area Coverage under Oil Palm21

27.99 3.50 lakh Ha. lakh Ha.

Potential area Area covered

1.89 lakh Ha.

Outlook22

The Indian palm oil market is poised for steady growth, with an estimated CAGR of 5.6% until 2028. In line with reducing import dependency, the government has introduced the ambitious ‘National Edible Oil Mission, targeting a 30% reduction in imports by 2030. As part of this mission, India aims to expand the cultivated area dedicated to palm oil to 1 million hectares by 2026. With increasing emphasis on cultivating palm oil within the country, India is set to strengthen its position as a key player in the global palm oil market. The projected growth and government initiatives present promising opportunities for the domestic palm oil industry in the coming years.23

5.6%

CAGR of the palm oil market by 2026

Growth drivers24

Domestic Push for Production

The Indian government is committed to promoting self-reliance and reducing dependency on imports, particularly in the palm oil sector.

Recognising the importance of a resilient and robust domestic supply chain, the government has placed a greater emphasis on increasing the production of palm oil within the country. The disruptions faced in the past have served as a catalyst for this strategic shift, highlighting the vulnerabilities associated with relying heavily on imports.

Diverse Applications of Palm Oil

The demand for palm oil has witnessed a steady rise due to its versatile applications. Apart from being widely used in processed food items, palm oil has found increasing usage in non-food sectors such as surfactants, personal care products, cosmetics, agrochemicals, and biofuels. This diverse range of applications has contributed to the growing demand for palm oil in various industries. The versatility of palm oil as a raw material has not only bolstered its consumption in the food sector but has also opened new avenues in non-food industries, where its unique properties are highly valued.

Rapidly Growing Domestic Food Service Sector

The food service sector in India is witnessing rapid growth, encompassing a wide range of establishments such as hotels, cafes, restaurants, and more. This flourishing sector heavily relies on the seamless production and availability of palm oil, which plays a pivotal role in their operations. The increasing demand from the food service industry is a key driving force behind the growth of the palm oil market in India.

Wind Power

India is currently the 4th country in the world in terms of installed wind energy capacity. With a clear vision of promoting sustainable practices and clean energy sources, the government has unveiled an extensive plan to ignite a green revolution in India. Central to this plan is the ambitious target of installing 500 GW of renewable energy capacity by 2030, showcasing the nations commitment to a greener future. This comprehensive strategy includes the installation of 280 GW of solar power and 140 GW of wind power, harnessing the immense potential of these renewable sources. Notably, Indias consistent investments in wind energy have propelled the country to the fourth position in terms of renewable energy capacity and wind energy specifically.

4th largest 140 GW

Installed wind energy Targeted wind energy capacity in the world capacity by 2030

Outlook25

Indias cumulative wind energy capacity is poised to experience a steady and optimistic growth, reaching a capacity of 52.48 GW by FY27 at a CAGR of 5.84%.26 This upward trajectory is attributed to the governments proactive initiatives and focus on attaining the national renewable energy targets. Recognising the immense untapped potential of the domestic offshore wind energy market, India is also directing its efforts towards bolstering it with an ambitious target of installing 30 GW of offshore wind power by 2030. By harnessing the vast offshore wind resources, India aims to further expand its renewable energy portfolio and solidify its position as a front-runner in the global renewable energy sector.

30 GW 52.48 GW

Targeted offshore wind Wind energy capacity energy capacity by 2030 by FY27

5.84%

CAGR of wind energy capacity by FY27

Business Overview

In FY23, our performance has soared to new heights, reflecting the commitment of our dedicated team. We proudly celebrate our remarkable success across diverse segments, a testament to our relentless pursuit of excellence. Through continuous improvement initiatives, we have achieved outstanding results, driving us to explore new avenues and diversify our revenue mix strategically. Embracing calculated risks, we have navigated towards success by increasing the share of our FMCG segment in the revenue mix, safeguarding against uncertainties and propelling us towards a more resilient future. The relentless pursuit of growth and innovation remains at the heart of our endeavours as we strive to exceed expectations and create a lasting impact in the market.

Food & FMCG

In the dynamic landscape of FY23, our FMCG segment has emerged as a standout performer, registering remarkable growth and cementing its position as the fastest-growing segment within our Company.

We have witnessed steady progress across our 4 verticals in the segment. This was possible due to the strong foundation laid by our robust distribution network and the trust of our valued customers in our brand, which we have diligently built over four decades. As we reflect on this journey, we take pride in leveraging our brand equity and distribution prowess, enabling us to navigate challenges and seize opportunities, propelling ourselves towards a bright and promising future.

In FY23, we have achieved an extraordinary milestone, recording a remarkable revenue of H6,218 Crores and a robust EBITDA of H1,137 Crores. This extraordinary growth can be attributed to our strategic focus on premiumisation, where we have expanded our product offerings and ventured into diversified distribution channels. We continue to be industry pioneers in texturised soya products and our ghee, biscuits and honey are immensely popular with our customers.

Our relentless efforts in strengthening our FMCG segment have paid off, driving the impressive financial performance that reflects our commitment to innovation, customer satisfaction and sustainable growth. As we continue to forge ahead on this trajectory, we remain dedicated to further elevating our brand, expanding our market presence and delivering unparalleled value to our customers and stakeholders alike.

H6,218 crores H1,137 crores

Revenue achieved in FY23 EBITDA achieved in FY23 269.41% y-o-y growth 501.26% y-o-y growth

Foods

H3,791 crores H808 crores

Revenue in FY23 EBITDA for FY23

Biscuits

H1,352 crores H118 crores

Revenue in FY23 EBITDA

Nutraceuticals

H509 crores H211 crores

Revenue in FY23 EBITDA

Soya Protein

H566 crores

Revenue in FY23

Outlook

In the coming years, our ambitions revolve around seizing opportunities in the market by embracing the concept of premiumisation and introducing innovative new products. We aim to fortify our market presence through enhanced distribution channels, ensuring our products reach customers nationwide. Diversifying our offerings in line with customer preference and evolving trends, will enable us to cater to various consumer segments, fostering stability in our business with higher margins. Moreover, we are attuned to the evolving consumer preferences for health and wellness, and we plan to capitalise on the strong brand recall and success of our Nutrela, Patanjali & other brands. As we embark on this journey, we strive to uphold our core values of quality, sustainability and customer-centricity, driving us towards sustained growth and delivering exceptional value to our customers and stakeholders.

Edible Oils

As a significant contender in Indias integrated oilseed solvent extraction and edible oil refining industry, our accomplishments have been fuelled by health-centric value propositions. In addition to our notable presence in the oil palm plantation and oleochemicals sectors, we are in sync with the national endeavour to curtail edible oil imports to solidify the economic well-being of the nation.

Our Verticals

Edible Oils Business

Despite external challenges, our Edible Oil segment has showcased exceptional performance, surpassing expectations in FY23. We achieved a remarkable 21% growth in volume, outpacing the industrys average growth rate of approximately 3%. Our revenue soared to H24,473 Crores, and our EBITDA reached H14 Crores. This success can be attributed to our commitment and strategic investments in bolstering our supply chain, enhancing processing capabilities, and expanding distribution networks. With these efforts, we have fortified our position in the market and are poised for sustained growth in the

Edible Oils segment in the years to come.

H24,473 crores H14 crores

Revenue in FY23 EBITDA in FY23

21%

Growth in volume

Outlook

Our extensive oil refining infrastructure and capacity have solidified our position as a key player in the seed crushing industry. As one of the largest producers of Soya by-products in the country, we are witnessing strong demand for our non-GM soybean meal from international markets. Our robust distribution network is geared towards promoting Premium and blended oils, enabling us to achieve better profit realisation. We prioritise product innovations and fortifications with essential micronutrients, further reinforcing our commitment to delivering nutritious and health-conscious offerings to our valued consumers. With these strengths, we are well-positioned to continue our upward trajectory and make a positive impact in the market.

Robust Brands

Ruchi Gold	Mahakosh	Sunrich
One of the leading Indian palm oil brands	Focused on middle income segment	Mid-market sunflower oil brand
Nutrela	Patanjali	Soyumm
Consists of premium & blended oils	Strong brand in Mustard oil along with premium products	Strong recall across India

Oil Palm Plantation

In FY23, our Oil Palm Plantation segment achieved remarkable growth and expansion by adding 63,816 hectares of land under cultivation, resulting in a total land allocation of 6,28,000 hectares. This expansion contributed to an impressive annual revenue of H1,161 crores and EBITDA of H216 crores, highlighting the segments robust financial performance. As one of the largest players in the country based on allocated area, our asset-light business model is facilitated by a Public Private Partnership through a tripartite agreement between farmers, the government, and our company.

This strategic collaboration enables us to further strengthen our presence and drive sustainable growth in the Oil Palm Plantation segment. Additionally, our partnership with leading overseas suppliers for clonal planting material and establishment of seed gardens underscores our commitment to maintaining high-quality standards and promoting the adoption of advanced agricultural practices. To further solidify our position and accelerate growth, we proactively engaged with several states through Memorandums of Understanding

(MoUs), forging strategic partnerships that will bolster our operations and drive the expansion of our oil palm plantation segment. With these concerted efforts, we are poised to capitalise on emerging opportunities and drive sustained success in this segment.

H1,161 crores H216 crores

Revenue in FY23 EBITDA in FY23

63,816 Ha. 6,28,000 Ha.

Of land added under Total land allocated cultivation in FY23 as of FY23

Outlook

Our oil palm plantation segment is projected to experience a remarkable fourfold increase in value over the next four years, signalling an exciting period of growth and prosperity. This significant expansion is the result of our strategic plans to further develop and enhance our presence in the industry. In FY24, we have ambitious plans to establish plantations across 25,000 hectares, setting the stage for accelerated progress and promising returns. With such robust expansion initiatives in place, we are confident in our ability to capitalise on the immense potential of the oil palm market and drive sustained growth for our

Company. Through innovative practices, responsible stewardship, and continuous improvement, we are committed to achieving new heights in the oil palm plantation segment and contributing to the economic development of the regions we operate in with a business model that harmonises seamlessly with the Atmanirbhar Bharat campaign of the National Mission on Edible Oil Oil Palm (NMEO-OP).

Performance and financial overview

We experienced another year of outstanding performance, driven by our varied strategic decisions, growing FMCG segment and our commitment to quality control, premiumisation and portfolio diversification. Across all business segments, we have achieved remarkable progress, capitalising on shifting consumer sentiments. Our strong brand presence has not only strengthened our foothold in existing markets but also allowed us to penetrate new regions. Our state-of-the-art manufacturing and distribution facilities play a crucial role in ensuring our operational efficiency, enabling us to meet the demands of our dynamic market. With this strong foundation, we are well-positioned to continue our growth trajectory and deliver value to our stakeholders in the years ahead.

In FY23, we achieved a revenue of H31,821 Crores, a 31% increase compared to last years revenue of H24,284 Crores. Our EBITDA reached H1,577 Crores, reflecting a year-on-year growth of 0.73% compared to H1,566 crores. We recorded a Profit Before Tax (PBT) of H1,179 Crores which is a 9.8% increase from last years PBT of H1,074 Crores. The net profit for the year stood at H886 Crores which is 9.9% higher than previous years net profit of H806 Crores.

Financial Review and Analysis

(H in Lakh)

Particulars	FY 2022-23	FY 2021-22
Total Income (including other income)	31,82,145.48	24,28,438.22
Less: Total expenses other than finance cost and depreciation	30,24,401.27	22,71,839.53
Profit/(Loss) before depreciation, finance cost and tax	1,57,744.21	1,56,598.69
Less: Finance cost	23,885.08	35,487.79
Less: Depreciation and Amortisation and impairment Expenses	15,963.00	13,672.75
Profit for the year before exceptional items and tax	1,17,896.13	1,07,438.15
Profit for the year before tax	1,17,896.13	1,07,438.15
Total Tax Expenses	29,252.02	26,807.26
Net Profit for the year after tax	88,644.11	80,630.89
Add: Items that will not be reclassified to statement of Profit and Loss	(476.35)	1,222.70
Add: Items that will be reclassified to statement of Profit and Loss	37.05	8.68
Total Comprehensive income for the year	88,204.81	81,862.27

Details of Significant Changes in the Key Financial Ratios and Return on Net Worth

Pursuant to the Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios and any changes in Return on Net Worth of the Company including explanations thereof are given below:

Sl. No.	Key Financial Ratios	FY 2022-23	FY 2021-22	% of changes in Key Financial Ratios	Explanation
1	Debtors Turnover	26.34	39.21	(32.82)	This decrease is due to increase in revenue from operations as compared to average trade receivables.
2	Inventory Turnover	8.94	9.06	(1.32)	Not Applicable
3	Interest Service Coverage	5.94	4.03	47.39	This increase is due to decrease in current year interest expenses due to repayment of all debts.
4	Debt Service Coverage	0.40	2.49	(83.94)	This decrease is due to repayment of all debts resulting in less finance cost as compare to previous financial year.
5	Gearing Ratio	0.16	0.64	(75.00)	In current financial year, the Company has issued equity shares by way of further public offering (FPO), resulting in increase in total equity and repayment of all debts. This is the reason for sharp decrease.
6	Current Ratio	2.44	2.82	(13.48)	Not Applicable
7	Debt Equity Ratio	0.16	0.64	(75.00)	In current financial year, the Company has issued equity shares by way of further public offering (FPO), resulting in increase in total equity and repayment of all debts. This is the reason for sharp decrease.
8	Operating Profit Margin	4.46%	5.89%	(24.30)	Not Applicable
9	Net Profit Margin	2.81%	3.33%	(15.59)	Not Applicable
10	Return on Net Worth	11.07%	15.76%	(29.76)	This decrease is due to increase in average equity.

Internal Control Systems

The Company has a well-established and comprehensive internal control system and structure across the value chain to ensure that its assets are safeguarded; transactions are authorised, recorded and reported correctly; and operations are conducted in an efficient and cost-effective manner. The Company has well defined policies and procedures that cover all significant activities. The effectiveness of the same is tested which includes financial closure, automated controls, and entity level controls. Adherence to these policies and procedures is a vital component of the management review process. The Company has an online compliance management tool that offers comprehensive coverage of all laws that apply to the business and provides compliance updates for each of the operating units.

The internal control system is regularly tested and reviewed by an Independent Internal Auditor, commensurate to the size and nature of the business. The Internal Auditor is appointed by the Audit Committee of the Board. Internal audits are undertaken on a continuous basis, covering various areas, with the intent to cover all material business processes and locations under internal audit. The internal audit program is reviewed by the Audit Committee at the beginning of the year to ensure that the coverage of the areas is adequate. The reports of the internal auditors are regularly reviewed by the management and corrective action is initiated to strengthen the controls and enhance the effectiveness of the existing systems. Summaries of the reports and actions taken on audit findings are presented to the Audit Committee of the Board.

Information Technology

Efficiency is a crucial driver of our success, automating routine tasks can greatly enhance overall efficiency. We recognise the importance of our IT systems in enabling automation and ensuring secure enterprise operations. By focusing on functionality, infrastructure and governance, we aim to optimise our IT systems and enhance our capabilities. This strategic approach helps streamline processes, improve productivity and maintain a secure environment for seamless automation.

SAP – ERP	HR – Konnect	B-POS
Used to manage the core business functions efficiently from Human Resource, accounts and financials, purchasing, inventory, supply chain, sales and customer relationships to reporting and analytics.	Used as employee self-service tool to manage their personal information, leave, attendance and PMS online.	Real Time Cloud-Based Solutions which is being used for secondary sales. With this, retailers are managing Inventory & Accounting, GST Reports, E-way bill, E-invoice, Loyalty Programs Management, Schemes & Offers Automation of PFL.
B-FORCE	I-Palm	GEO-TAG
Used for sales force automation. Implemented Key features are Attendance Management, Expense Management, Complaints, Payments and Target Management.	Used for automation of FFBs procurement process end to end through HHD (Hand Held Device).	an application to Capture Land Parcels, Capture GPS coordinates of Farmers Land Parcels boundaries and link to the Crop Management System. It gives us complete tracking & monitoring of the Field Force.
Tableau		Power BI
We harness the power of data analytics to enhance our performance insights empowering us to foster a comprehensive understanding of our operations and trends. It also enables us to effectively share diverse datasets with our stakeholders in an interactive format.		We leverage valuable insights within our organisation to drive continuous evolution, utilising data integration to enhance our business intelligence.

Key Projects Implemented During FY 2022-23

We successfully acquired the food business of Patanjali Ayurved for approximately H690 crores to strengthen our foothold in the Food and FMCG sector. This strategic acquisition has yielded remarkable outcomes, enhancing our food portfolio with the addition of 21 new products. Consequently, we have reinforced our position as a household brand and strategically positioned ourselves to assertively capture a larger share of the FMCG market. This acquisition also aligns seamlessly with our growth trajectory and further solidifies our market presence.

Human Resource

We value our human capital and recognise its pivotal role in driving our business performance. As of March 31, 2023, our Company has employed a significant number of full-time employees, highlighting their importance within our organisation. To enhance the employee experience, our Company adopts a focused approach, emphasising a high-performance culture through robust performance management systems, learning and development initiatives and system-driven

HR processes.

Furthermore, our Companys commitment to creating an exceptional workplace environment is evident through the certification as a Great Place to Work. This certification reflects our Companys excellence in fostering respect, fairness, credibility, pride and camaraderie among its employees.

We are embracing global best practices in the HR domain. Our HR is taking on a more strategic role, ensuring the recruitment of top talent, identifying future core capabilities, and implementing focused approaches for our Companys growth. We emphasise on continuous improvement by enhancing and automating our HRIS system, reskilling and upskilling our employees through dedicated programs, and driving leadership, culture and overall employee experience. Through these efforts, we aim to create an environment that attracts and retains talented individuals, supports their development, and contributes to the overall success and growth of the organisation.

Cautionary Statement

Certain statements in the ‘Management Discussion and Analysis section may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which would be different from what the Board of Directors envisage in terms of future performance and outlook. Investors are cautioned that this discussion contains forward-looking statements that involve risks and uncertainties including, but not limited to, risks inherent in our Companys growth strategy, dependence on certain businesses, dependence on the availability of qualified and trained manpower and other factors discussed. This discussion and analysis should be read in conjunction with the Companys financial statements and notes on accounts.