Vijay Solvex Management Discussions

1. This section shall include discussion on the following matters within the limits set by the listed entitys competitive position:


The Indian economy appears to have moved on after its encounter with the pandemic, staging recovery in FY 2022-23 ahead of many nations. RBI in its Monetary Policy announcement during February 2023 projected 7% GDP growth for FY 2022-23. These optimistic growth forecasts stem in part from the resilience of the Indian economy seen in the rebound of private consumption seamlessly replacing the export stimuli as the leading driver of growth. The uptick in private consumption has also given a boost to production activity resulting in an increase in capacity utilization across sectors. The rebound in consumption was facilitated by the near-universal vaccination coverage overseen by the government that brought people back to the streets.

The growth rate reflects the strong fundamentals of our economy as it has emerged as the fastest- growing major economy in spite of the fact that India has also faced the challenge of reining in inflation as the Central Bank has taken measures on the policy fronts to manage the inflationary pressure. The RBI also projected the economic growth to slow down to 6.4% in FY 2023-24, citing risks from geo-political tension and tightening global financial conditions.

According to the Indian Meteorological Department, the year 2022 delivered 6% higher rainfall than the long-period average. Indias wheat harvest was expected to rise to around 107 mn metric tons (MMT) in 2022-23 from 102 MMT in the preceding year. Rice production at 122 mn metric tons (MMT) was down 6% due to unseasonal rains. Pulses acreage grew 5% to 154.80 lac hectares following better monsoon rains. Due to a renewed focus, the oilseed area increased by 7.31% from 102.36 lac hectares in 2021-22 to 109.84 lac hectares in 2022-23. Indias wheat production in the crop year 2022-23 was expected to be 102.9 mn tonnes (MT), less than the governments estimate of 112 MT.

The countrys retail inflation, measured by the Consumer Price Index (CPI), cooled to 5.66% in March 2023. Inflation data on the Wholesale Price Index (WPI) (which calculates the overall prices of goods before selling at retail prices) eased to 1.34% during the period. In 2022, CPI hit its highest of 7.79% in April 2022; WPI reached its highest of 15.88% in May 2022.

Per capita income almost doubled in nine years to Rs. 172,000 during the year under review, a rise of 15.8% over the previous year. Indias GDP per capita was US$ 2,450 (March 2023), close to the magic figure of US$ 2500 when consumption usually spikes across countries.

The edible oil industry in India is fragmented wherein 13% of oil is sold as loose/unbranded and the consumers are shifting to branded oils, which bodes well for the organized players. The branded edible oil market is estimated to be around Rs. 1,56,000 cr and is expected to grow faster than the overall category gaining a lions share of close to 90% of the total market in terms of value in the coming five years. It is estimated that close to 75% of the total edible oil available in terms of volume is retailed as a branded product.

The four key edible oils, palm, soya, mustard and sunflower constitute 85-88% of the total consumption in India in terms of volume. Palm oil is primarily used by the large-scale food processing enterprises. It is also used in blended oils for domestic consumption. India imports most of its palm oil consumption.

Soybean oil, mustard oil and sunflower oil is largely used for domestic consumption. The other oils include sesame oil, coconut oil, groundnut oil, rice bran oil amongst others. A gradual shift is being witnessed in favour of soft oils such as soyabean oil, sunflower oil, mustard oil. Consumption in rural India constitutes almost 50% of the total consumption in this category by volume.

Revenue in the Edible Oils market amounts to US$ 33bn in 2023. The market is expected to grow annually by 5.26% (CAGR 2023-2028). In the Edible Oils market, volume is expected to amount to 7.9 bn kg by 2028. The Edible Oils market is expected to show a volume growth of 1.6% in 2024.

Indias import of edible oils increased by 22.29 per cent in the first six months of the oil year 2022-23 (November to October) following a significant rise in the import of palm oil and sunflower oil during the period. According to data available from the Solvent Extractors Association of India (SEA), the country imported 80.02 lakh tonnes (lt) of edible oil during November-April against 65.43 lt in the corresponding period a year ago.

Indias per capita consumption of edible oil is relatively low at 19-19.80 kg per year, compared to the global average of 24 kg per year. However, with a growing population and increasing per capita consumption, demand for edible oils is expected to increase.

The Indian government is making continuous efforts to increase the domestic availability of edible oil and reduce import dependency The government has been implementing a Centrally-sponsored scheme, National Food Security Mission — Oilseeds and Oil palm (NFSM-OS and OP) from 201819 to increase the production and productivity of oilseeds in the country.

The government has also launched a separate mission for oil palm, namely National Mission on Edible Oils (Oil Palm) — NMEO (OP) in 2021-22.

Both NFSM — Oilseeds and NMEO (OP) are being implemented in the country with the objective of augmenting the availability of edible oils by increasing the production and productivity of oilseeds and oil palm and reducing the import burden.


India is one of the largest consumers and importers of edible oil in the world, with a domestic demand of approximately 24-25 million tons/ year. Despite being the third-largest producer of oilseeds globally, India still imports nearly 70% of its edible oil requirements.

Indias edible oil sector is facing various challenges, including low prices for mustard seeds, discontinuation of duty-free sunflower oil imports, and a shift in imports from palm oil to soft edible oils. The government needs to take prompt action to ensure that farmers receive a fair price for their produce and that the countrys edible oil requirements are met. The focus should be on improving domestic production, reducing import dependence, and supporting the farming community. A balanced approach that considers the interests of all stakeholders is necessary to address the concerns surrounding the edible oil sector in India.

India is blessed with many positive factors that enable it to stand in a unique position in Agro-based products. After achieving independence, India is positive whereby it has become a net employer of agricultural-based products. India is a major oilseed-producing country among the different countries producing oilseeds; India has the largest area and production of a few oilseed crops, namely groundnut, rapeseed/mustard, sesame, and coconut. Yet, India is the largest importer of edible oil. Indias edible oil market is estimated at INR 5,19,905 Crore by the year FY 2027-28, with the unorganized oil market showing a decline in the market share with a CAGR of around 5%.

With the increasing awareness about the health benefits of the different oils, the perception of the consumers, and the commonly seen trend is the inclusion of a variety of oil in the daily diet. With this, there has been a considerable shift from traditional oils towards non-traditional oils, such as olive oil and rice bran oil to name a few. Yet, this has not stopped consumers from eliminating traditional oil from their diet. Edible oil packaging has evolved over the years to encompass a wide range of packaging products such as jerry cans, pouches, jars, tin cans, and bottles, among others. The growth of the packaged oil type was not even and only certain variants showed growth in the market. After more than a year of sustaining lockdown, the firms have started to witness recovery in demand with major players now confident of sustaining growth if the situation remains favorable.


Edible Oil Division

The Edible Oil business continues to account major part of the Companys turnover. The market environment continuous to be very competitive. The Companys products are well accepted in national market under the various brand names. Your company is leading regional player in edible oil and Vanaspati ghee, backed up with strong distribution network. Your Company faces intense competition from low priced and unscrupulous brands. The outlook of the industry is positive looking to the size of opportunity. The Company is hopeful that there would be healthy market growth over the next few years.

Ceramic Division

Your Companys ceramic division sale performance during the year is Rs. 1632.30 lacs. Companys ceramic products are well accepted in India. Your Company is hopeful of a healthy growth both in volume and value over next few years.

Wind Power Division

During the period under review, Wind Power Generation plant of the Company located at Village Hansua, District Jaisalmer, Rajasthan was not in operation as the segment is not financially viable to run. However, the effect of this segment is very marginal on overall revenue of the Company.


The growth in the edible oil industry has resulted from many driving factors; not only from the demand perspective but also from a consumer perspective. From the consumer trends perspective, demand is driven in the area of fat content, health benefits, packaging, and price. This increasing awareness is the reason for the consumer shift from the unorganized market to the purchase of branded edible oil.

As domestic production does not meet the increasing domestic demand, India relies highly on imports, with few oils contributing significantly to the exports. Crushing of groundnut, rapeseed/mustard, and sunflower is reserved for the small-scale sector. These makeup over two-thirds of the aggregate oilseed output of the country. This has translated into a lack of significant investments in large, integrated processing plants and poor economies of scale in the operations of existing players. To harmonize the interests of farmers, processors, and consumers and at the same time, regulate the large import of edible oils to the extent possible, the import duty structure on edible oils is reviewed from time to time. The country exports edible oils in small quantities to meet expatriate demand. The rise in exports of edible oils is a positive development for Indias oilseed growers, enabling higher realizations for the crops. The rise in bulk exports is seen as a big boost as it brightens the prospects for better remuneration for the oilseed crops. Edible oils are freely exportable in bulk, while mustard oil is allowed in consumer packs not exceeding 5 kg.

Together, groundnut, soybean, and rapeseed/mustard account for over half of the output of cultivated oilseeds in India. Efficiency gains in the oilseed-processing sector have been hampered by poor infrastructure and policies restricting economies of scale in processing plants. Carried out with indepth analysis, the report India Edible Oil Market Outlook, 2027-28 gives an insight into the transformation to occur in the edible oil market. With consumer buying behaviour differing among the states, the northern region is expected to lead the market in terms of consumption of packaged edible oil.

Edible oil, also referred to as cooking oil, is a type of fat obtained from plants, animals, or microorganisms. It consists of triglycerides, made of three fatty acids and one unit of glycerol. Sunflower, olive, palm, soybean, and canola are widely used edible oils enhancing food flavors.

Edible oils act as an intensive source of energy, delivering essential nutrients to the body, including vitamins A and D. Besides this, they act as a heat transfer medium at high temperatures and enhance taste sensation in spreads and salad dressings. The Food Safety and Standards Authority of India (FSSAI) supervises the manufacture, packaging, and distribution of edible oils in India.

The rise of the Indian edible oil market is expected to be aided by the expanding economy and population, shifting dietary preferences, and increased penetration of processed goods. Customers are more inclined towards premium edible oils as they become more health conscious. Additionally, the demand for value-added edible oils like rice bran oil, canola oil, and olive oil has soared due to the high prevalence of non-communicable disorders, including high cholesterol, diabetes, and hypertension.

Despite a flourishing agricultural industry, India imported over 15 million tonnes of edible oils worth around $73 billion in 2019, accounting for 40% of the countrys total import bill and 3% of the agricultural import bill. The major cause of this shortfall is the inability of domestic oil production to fulfill demand. Besides, price fluctuations in the international market have impacted the cost of edible oils in Indias local market, which has hampered the markets development.

In India, the rising consumer health concerns towards the high prevalence of coronary heart diseases, diabetes, obesity, gastrointestinal disorders, etc., are primarily driving the demand for healthy edible oil. Additionally, the market is further catalyzed by the growing awareness towards several health benefits of organic and low-cholesterol edible oil. As a result, various regional manufacturers are launching healthy product variants enriched with omega-3, vitamins, and natural antioxidants. Moreover, the changing consumer dietary patterns and their hectic work schedules have led to the increasing consumption of processed food items. The rising demand for edible oil in the food processing sector as food preservatives and flavoring agents is also catalyzing the market growth in the country. Additionally, the elevating consumer living standards coupled with the increasing penetration of international culinary trends are further augmenting the demand for high-quality product variants, such as olive oil, sesame oil, flaxseed oil, etc. Apart from this, the expanding agriculture sector along with the launch of several initiatives for enhancing the production of oilseeds in the country is also propelling the market.

Edible oil imports rose 8 per cent year-on-year in March to 11.35 lakh tonnes. the Solvent Extractors Association of India (SEA) in a statement said edible oil imports rose to 11,35,600 tonnes in March from 10,51,698 tonnes in the year-ago period.


One of the key risks that edible oil companies face is the risk arising out of the volatility in the prices of raw materials (oilseeds), crude and refined edible oil, which may be influenced by trends in international commodity prices, currency fluctuations, domestic demand-supply dynamics and macro-economic trends. The domestic edible oil prices are directly linked to the prices of imported palm and soybean oil due to heavy reliance on imports and their substitutability with other oil varieties. While mustard oil is almost entirely produced within the country, soybean oil is imported in significant quantities (about 60%-70%). Palm oil and sunflower oil is almost entirely imported in crude (for refining in port-based refineries) as well as in the refined form. Given the high volatility in international edible oil prices, domestic participants are exposed to the risk of unexpected squeeze on margins because of the mismatch between the prices of raw materials and final products (which are both linked to domestic factors as well as global ones). With a significant portion of the consumed oil being imported, the foreign currency movements also have an impact on the profit margins of industry players.

Indias growing import of edible oils, particularly palm oil and sunflower oil, highlights the significance of monitoring global market dynamics and domestic policies. With imports accounting for around 56% of total annual consumption, maintaining a delicate balance between imports and domestic production becomes crucial. However, the excessive import of refined palm oil has led to the underutilization of capacity in the palm oil refining industry.

The declining landed prices of palm oil, soybean oil, and sunflower oil pose challenges and opportunities for Indias edible oil industry. Farmers face reduced income, and low refining capacity hampers efficiency. Market volatility and import dependence add risks.

In order to harmonize the interests of farmers, processors and consumers, Government reviews the duty structure of edible oils from time to time.

Your Company continues to place a strong emphasis on the risk management and has successfully introduced and adopted various measures for hedging the price fluctuations in order to minimize its impact on profitability. Also, your Company has initiated setting-up of a framework to upgrade itself to a robust risk management system. The key determinants of business risk profile of the company are their ability to overcome the regulatory risk and agro-climatic conditions. Other operational factors include operating efficiency, product diversity, market position, and ability to secure raw material as well as the commodity price and forex-risk management systems.


Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These systems are designed to ensure that all the assets of the company are safeguarded and protected against any loss and that all the transactions are properly authorized recorded and reported.

The company has an internal audit function, which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. It is also responsible for assessing and improving the effectiveness of risk management, control and governance process.


During the period under review, on standalone basis, your Company has achieved a Total Revenue from Operations of Rs. 2,43,012.51 Lakhs as against Rs. 2,71,554.22 Lakhs in the previous financial year. The Profit before Finance Cost, Depreciation and Tax is Rs. 2,703.76 Lakhs, Profit after Tax is Rs. 1,503.05 Lakhs and Total Comprehensive Income is Rs. 1,500.72 Lakhs as compare to Rs. 7,959.81 Lakhs, Rs. 5,413.99 Lakhs and Rs. 5,464.05 Lakhs respectively in the previous financial year. During the year the Total Revenue from Operations and Profit after Tax of the Company has decreased by 10.51% and 72.24% respectively due to unfavourable market conditions in overall edible oil sector.


The company considers its human resources as the cornerstone. Congenial and safe work atmosphere, appropriate recognition and rewards, constant communication, focus on meeting customer needs and change management through training are the hallmarks for development of human resources of the company. Every employee is aware of the challenges posed by the current economic environment. Employee morale has remained high even during difficult times. The employees have co-opted fully with the management in implementing changes as required in the market. There were 127 permanent employees on the rolls of the Company as on 31st March 2023.


Ratios 2022-23 2021-22 % Change
Debtors Turnover 54.58 60.73 (10.13)%
Inventory Turnover 23.46 23.50 (0.17)%
*Interest Coverage Ratio 6.66 34.44 (80.66)%
**Current Ratio 2.75 1.97 39.59%
#Debt Equity Ratio 0.30 0.71 (57.75)%
##Operating Profit Margin (%) 1.09 2.85 (61.75)%
ANet Profit Margin (%) 0.62 1.99 (68.84)%
Return on Net Worth (%) 5.49 22.65 (75.76)%

*During the financial year interest expenses has increased and profitability of the Company has decreased in comparison to the previous financial year, hence the Interest Coverage Ratio has decreased.

**The increase in Current Ratio is mainly on account of significant decrease in Current Liabilities as compare to Current Assets of the Company.

#Debt Equity Ratio decreased due to payment of loans and increase in shareholders equity on account of profit for the year.

##During the financial year the profitability of the Company has decreased due to unfavourable market conditions which caused for decrease in Operating Profit Margin.

ADuring the financial year the Net Profit after Tax of the Company has decreased due to unfavourable market conditions which caused for decrease in Net Profit Margin.


During the financial year Net Profit after Tax of the Company has decreased due to unfavourable market conditions in overall edible oil sector. Hence, due to decrease in Net Profit, the Return on Net Worth has decreased by 75.76% during the current financial year.


The financial statements of the Company for the financial year ended March 31, 2023 were prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India.


It may please be noted that the statements in the Management Discussion and Analysis Report describing the companys objectives and predictions may be forward looking within the meaning of applicable rules and regulations. Actual results may differ materially from those either expressed or implied in the statement depending on circumstances.

Place: Alwar By order of the Board of Directors
Date: 14.08.2023 For Vijay Solvex Limited
(Daya Kishan Data) (Vijay Data)
Whole Time Director Managing Director
DIN:01504570 DIN:00286492
Neelanchal 7, Shubham Enclave, Bhagwati Sadan,
Jamna Lal Bajaj Marg, C-Scheme, Swami Dayanand Marg,
Jaipur-302001 (Raj asthan) Alwar-301001 (Rajasthan)