Shri Venkatesh Refineries Ltd Management Discussions

Overview

Shri Venkatesh Refineries Limited (SVRL) is a leading Indian FMCG and agro-processing company with an expanding global footprint, engaged in the manufacturing and processing of edible and non-edible oils and allied products. The Company operates an integrated crop-to-consumer business model encompassing sourcing, processing, refining, packaging and distribution, with a consistent focus on product quality, operational efficiency and customer satisfaction.

The Indian economy remained resilient during FY 2025-26 despite a challenging global environment characterised by geopolitical tensions in Europe and the Middle East, which created significant uncertainties for the global economy and posed challenges to inflation management. These conditions resulted in price pressures across several core consumer goods and services.

Indias edible oil industry continues to remain significantly dependent on imports, with more than 50% of the countrys total edible oil requirement being met through imports. Consequently, domestic edible oil prices remain sensitive to international commodity prices, exchange-rate movements, global supply conditions and geopolitical developments.

At the same time, Indias consumption of edible oils has continued to grow, supported by population growth, rising incomes, urbanisation, changing dietary preferences and increasing consumer demand for packaged and branded products. Domestic consumption has been growing faster than domestic production, resulting in continued dependence on imports and creating both challenges and opportunities for participants across the edible oil value chain.

The Companys diversified portfolio comprises soybean oil, palm oil, sunflower oil, cottonseed oil and groundnut oil, along with vanaspati and other value-added products. This diversified product mix enables the Company to address varying consumer preferences and market requirements while reducing dependence on any single product category.

Business Overview

Shri Venkatesh Refineries Limited (SVRL) is one of the fastest growing refinery company under Brand name "Rich Soya", Rich Sun" and "Silver Gold". Our Company is primarily engaged in the business of refining and preservation of Edible oils mainly soyabean oil. The business process involves purchase of the raw oil, then refining, packaging and selling of the edible oil. we are also engaged in the business of trading of edible oil mainly soyabean oil, sunflower oil, cotton seed oil and palm oil.

At present our Company has a refining capacity of almost 108,000 tons. We dedicate immense amount of energy in building long and sustainable relation with our customers to understand their market needs while keeping them well informed of the market trends and price at regular intervals. We have a well- established network spread across Maharashtra catered by our distributors, distributing our products through different points of presence. These agents then distribute our products to the numerous retailers spread across the state. We intend to engage more distributers to increase the product visibility by our continuous brand building activities through various incentives and promotional schemes. we setup environment friendly solar power panels of 650KWH at our factory premises. The electricity generated at these solar plants is used for captive consumption by our company.

Industry Overview

In India, Edible oil market is driven by increase in consumption of high quality & It plays important role to health conscious consumers. Edible oil constitutes an important component of food expenditure in Indian households. Edible oils provide nutrients to the body. These are rich source of dietary energy and contain more than twice the caloric value equivalent to the amount of carbohydrates. Functionality of oils and fats not only adds avor in the food, but it also increases the nutritional value of food also.

The Food Safety and Standards Authority of India (FSSAI) supervises the manufacture, packaging, and distribution of edible oils in India.

Growing demand for edible oil, rapid growth and expansion in the food sector is expected to enhance the growth of the edible oil market. The edible oils market is expected to reach USD 190.88 billion by 2030, which is USD 102.37 billion in 2022, registering a CAGR of 8.10% during the forecast period of 2023 to 2030. Sunflower, mustard, palm and soya oils are commonly used which compromises 85-90% of the total edible oil consumption in India. The Hotel, Restaurants and Cafeterias sector accounts for 40% of the 23 million tonnes edible oil demand required annually and 60% of the volume is consumed by the end consumer segment, with each of these segments consuming oil in packets.

The edible oil industry is one of the most important within the agriculture sector in India, the worlds largest importer from Russia, Ukrane, USA, Brazil Indonesia and Malaysia and the third largest consumer.

Growth Driver

A growing population and rising per capita consumption are expected to influence demand growth. Nowadays, consumers are highly conscious of their health. Thus, they are using high quality edible oil which is expected to create numerous opportunities for market growth. Growing demand for edible oils with low cholesterol, calories and fat content is propelling the market growth.

Future outlook

The Company maintains a very positive outlook of the future with its foray into new segments and the strengthening of the existing businesses. The company intends to steady growth and minimise risk by way of different product portfolio. The Company plans continuous expansion of its product portfolio such as Soya oil, Sunflower oil, Palm oil, mustard Oil and provide quality product.

The Company aims to set up distribution channel to ensure smooth supply of Products. Further Company aims to become largest edible oil refining Company.

Financial review Details of Company Affairs

Your company has achieved a total income of 1,37,872.35 lakhs during the year under review as against 70,164.21 lakhs in the previous financial year. The net profit after tax of the company for the year under review is 3,820.26lakhs as against 1,807.87 lakhs for the previous year.

Key financial ratios - Significant changes and explanations

In accordance with Notification dated March 24, 2021, the Central Government in its Amendment to Schedule III to Companies Act 2013 stated that The Company shall disclose the following ratios which shall indicate the financial performance. The Company is required to give details of significant changes

(change of 25% or more as compared to the previous financial year) in sector-specific key financial ratios, as well as any changes in return on net worth.

Internal control systems and their adequacy:

The Company has a strong internal control systems for business processes, operations, financial reporting, fraud control, and compliance with applicable laws and regulations and best in class processes commensurate with its size and scale of operations to safeguard its assets and protect against loss from any un-authorized use or disposition. Statutory and internal Auditors carry out periodical review of the functioning and suggest changes if any.

The Audit Committee of the Board meets periodically to review various aspects of performance of the Company and reviews the adequacy and effectiveness of the internal control system and suggests improvement for strengthening them from time to time. Auditors also attends this Meeting and conveys their views on the business process and also of the policies of financial disclosures. When found necessary, the Committee also gives suggestions on this matter.

Revenue and capital expenditure are strictly governed by approved budgets and the expenditure approval levels are defined by a delegation-of-authority mechanism. Review of capital expenditure is undertaken based on the expected benefits for the Company.

Human Resource and Employee Relations:

As business continues to grow at a steady pace amidst greater consumer expectations, the Human Resource Departments responsibility of nurturing the potential of employees is also greater. With digitization of the HR function we have made further progress towards creating an environment that fosters learning and growth.

We continue to deepen our relationship with campuses across the country to hire fresh talent. Our talent acquisition programme is also continually focused on hiring best in class lateral talent. The Nomination & Remuneration Committee (NRC) along with senior employees across other departments is invested in developing internal talent, and performing employees are given enhanced job responsibilities in your fast growing company.

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 the 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.