20 Microns Ltd Management Discussions

Macroeconomic and Industry Environment

Global Economy

The global economy in FY26 continued on a path of moderate and uneven expansion, navigating elevated geopolitical risks, trade policy uncertainty, and uneven regional recoveries. As per the January 2026 World Economic Outlook Update of the International Monetary Fund, global GDP growth is estimated at around 3.3% in 2025 and is expected to remain broadly unchanged at 3.3% in 2026, before easing slightly to approximately 3.2% in 2027.

Growth remains uneven across regions. Advanced economies are projected to expand by about 1.7% in 2026, constrained by softer industrial activity and tighter credit conditions. The United States is expected to grow at roughly 2.0%, supported by consumer spending and ongoing investment in technology and infrastructure. The Euro Area, meanwhile, is forecast to register a more modest ~1.2% growth, as manufacturing recovery remains gradual despite easing inflation.

Emerging markets and developing economies continue to outperform, with growth projected at approximately 4.2% in 2026. Asia remains the principal driver of this momentum, with regional growth expected in the 4.5%–5% range, underpinned by strong domestic consumption, public investment, and expanding manufacturing capacity, particularly in India and select ASEAN economies.

Inflationary pressures are easing globally, with headline inflation expected to decline from an estimated 4.1% in 2025 to around 3.8% in 2026 and 3.4% in 2027. This moderation is enabling a gradual shift toward more accommodative monetary policies, improving liquidity conditions and supporting capital formation.

Despite this stabilising trends, downside risk remains elevated. Prolonged global tensions with trade conflicts, uncertainty around technology-led productivity gains, and potential financial market corrections could weigh on investment sentiment. While global trade is showing early signs of stabilisation, policy unpredictability continues to cap the pace of recovery.

Overall, the FY27 outlook points to stable, factoring global trade conflicts limits to modest global growth, led by Asias structural strength, supported by relative resilience in the US, and tempered by slower momentum in Europe. For manufacturing-oriented sectors, this environment underscores the importance of operational efficiency, regional market diversification, and value-added innovation as key drivers of sustainable performance amid persistent global uncertainty.

India Economy

India sustained strong economic momentum in FY26, reaffirming its position as one of the worlds fastest-growing major economies. Official estimates from the Economic Survey 2025-26 project real GDP growth at about 7.4 % for FY 26, driven by robust domestic demand, expanding services and industry activity, and resilient investment trends. Consumption remained a key driver of growth, with private final consumption forming the largest share of GDP. National output gains were supported by broad-based expansion across agriculture, industry, and services, despite persistent global uncertainties arising from geopolitical and trade pressures.

Fiscal Year	Real GDP Growth (%)
FY25	6.5 %
FY26	7.3 %
FY27 (Forecast)	6.8–7.2 %

Government structural measures, including rationalisation of indirect taxes and targeted incentive schemes such as Production-Linked Incentives (PLI), supported manufacturing and export competitiveness. During FY26, the manufacturing sector in India demonstrated resilient performance and structural momentum despite global headwinds. Industrial activity continued to expand, with manufacturing emerging as a key contributor to economic growth. Manufacturing Gross Value Added (GVA) expanded by 8.4 % in the first half of FY26, outpacing the broader industrial sector and exceeding its pre-pandemic trend as resilient demand supported output and improved utilisation of existing capacities.

Macroeconomic stability continued to be a defining feature of the year. Headline inflation averaged historically low levels during the year, supported by effective supply management and policy moderation.

FY26 proved challenging on the external front, marked by heightened global trade uncertainty and the imposition of punitive tariffs that strained exporters and weighed on business confidence. FY27 is expected to be a year of adjustment as these measures begin to support domestic demand and investment, even as external conditions remain uncertain.

Looking ahead, the outlook for FY27 remains positive, with the Economic Survey projecting 6.8–7.2%, underlining continued expansion amid global headwinds.

India Mining Industry

Indias mining sector demonstrated robust momentum in FY26, reinforcing its strategic importance to the national economy. The estimated value of total mineral production for FY26 stood at USD 18.68 billion, marking a meaningful increase from USD 17.49 billion in FY25, a year-on-year rise of approximately 12.5%. Non-metallic minerals, including industrial minerals such as limestone, calcite, and kaolin, continue to constitute a significant share of overall production value, remaining foundational inputs for paints, coatings, plastics, rubber, and ceramics manufacturing.

Iron ore production for FY26 is projected at 289.1 million tonnes, while coal production from captive and commercial mines reached 210.46 million tonnes, reflecting year-on-year growth of 10.22%. Twelve new captive and commercial coal blocks became operational during the year, adding over 86 MTPA of annual production capacity, underscoring the governments continued thrust on resource self-sufficiency.

Indias mineral wealth is geographically concentrated, with seven states - Odisha, Chhatisgarh, Rajasthan, Karnataka, Jharkand, Madhya Pradesh and Maharashtra, accounting for over 97% of total mineral production value. Eastern and central India dominate due to the mineral-rich Deccan Plateau and Chhota Nagpur belt, while Rajasthan leads in non-metallic industrial minerals.

On the policy front, FY26 marked a significant inflection point for Indias mineral ecosystem. In January 2025, the Government of India launched the seven-year National Critical Mineral Mission (NCMM) with a total outlay of

Rs.34,300 crore, covering the period FY25 to FY31. The Mission targets the entire value chain - from domestic exploration and mining to processing, recycling, and international strategic partnerships, with the aim of reducing import dependence and positioning India as a key player in the global green economy. Under its ambit, more than 100 critical mineral blocks are to be auctioned and 1,200 exploration projects undertaken by 2031.

In parallel, Indias mining and construction equipment sector is projected to grow at 19% per annum, potentially adding USD 99 billion to the economy and 20 million jobs by 2030. These developments signal a structurally positive outlook for industrial mineral producers, as policy momentum, infrastructure-led demand, and the national push for value-added processing collectively strengthen the demand environment.

End-Use Industry Overview

The Company operates across end-use industries that sit at the core of Indias consumption, manufacturing, and infrastructure ecosystem. FY25 unfolded in a mixed global environment, moderate international recovery, pricing pressure in select export-linked markets, and steady domestic demand anchored by public capital expenditure and urban consumption.

Across industries, three structural shifts were visible:

1. From volume to value: Customers are prioritising performance-enhanced, specification-driven inputs.

2. From cost to optimisation: Procurement teams are seeking yield improvement, formulation efficiency, and supply reliability.

3. From compliance to competitiveness: Sustainability, traceability, and environmental alignment are now strategic requirements.

Against this backdrop, the Companys mineral-based solutions are increasingly positioned in higher-value applications rather than commoditised supply chains.

The following four end-use segments materially influence the Companys performance:

1. Paints and Coatings

Paints and Coatings Market

Market forecast to grow at a CAGR of 6.5%

Indias paints and coatings industry is projected to reach USD 336 billion by 2030, growing at a CAGR of approximately 6.5%. Growth is supported by expansion in automotive, construction, and infrastructure sectors, rising urbanisation and disposable income, strong housing demand, including affordable housing and smart city initiatives and increasing adoption of water-based and eco-friendly paints.

Market Trends:

? Premiumisation of Decorative Paints: Consumer preference is moving toward premium emulsions, textures, and specialised finishes. These formulations demand higher opacity, improved dispersion, and enhanced rheological stability, increasing the technical intensity of functional fillers. As brands compete on differentiated performance, reliance on engineered mineral grades with consistent quality has strengthened.

? Low-VOC and Regulatory Compliance: Heightened environmental standards and consumer awareness are accelerating the transition toward low-VOC and compliant formulations. Reformulation efforts require mineral additives that preserve performance characteristics while meeting emission norms, favouring suppliers with technical formulation capabilities.

? New Capacity and Raw Material Qualification:

Capacity expansion and entry of new players are increasing demand for supplier qualification and consistent raw material performance. This environment supports long-term partnerships with suppliers demonstrating reliability, technical support, and quality assurance. Increased competitive intensity heightens pressure on consistency, dispersion behaviour, and batch-to-batch reproducibility.

? Infrastructure-led Protective Coatings: Growth in roads, railways, metros, and industrial infrastructure is driving demand for high-durability protective coatings. These applications require corrosion resistance, chemical stability, and performance longevity, elevating the importance of specialty mineral inputs. Sustained public capital expenditure provides medium-term demand visibility in this segment.

Outlook

Demand visibility remains stable, supported by infrastructure and housing momentum. Premium product mix and regulatory compliance will continue to elevate the role of engineered mineral grades in both decorative and industrial coatings.

2. Plastics and Polymer Compounds

Indias plastics industry is valued at approximately USD 42–45 billion, with projections to reach USD 44.5 billion by 2030, growing at an estimated 11% CAGR. Packaging accounts for nearly 42% of industry demand, supported by e-commerce growth and organised retail expansion.

Indias Plastics Industry: At a Glance

India is emerging as a global powerhouse in plastics and polymers, driven by strong central and state government support.

10 Lakh Crore – Target industry size in the next 4–5 years

1 Crore+ Jobs – Projected new employment opportunities

$25 Billion Exports – Set to be achieved by 2027

10 Plastic Parks – Across India, building industrial clusters

Indias First Bioplastics Policy (UP, 2024) – Attracting sustainable investments

The Export Powerhouse:

India has successfully positioned itself as a "Global Benchmark" for plastic machinery and components. From high-precision medical devices exported to the Americas to complex automotive components fueling Asian supply chains, the "Made in India" label in polymers now signifies technical maturity.

Government Initiatives:

Government support continues to strengthen the plastics ecosystem through targeted manufacturing and infrastructure policies. Key initiatives include:

? PLASTINDIA 2026 – "Bharat Next" Vision: One of the worlds largest plastics exhibitions, PLASTINDIA 2026 underscored the Governments commitment to manufacturing-led growth and self-reliance. The platform showcased advancements across raw materials, machinery, extrusion, moulding, and recycling technologies, while reinforcing Indias strength across the full plastics value chain: men, material, machines, and markets. The event positioned India not merely as a consumption market, but as a global production and export hub.

? Make in India & Production Linked Incentive (PLI):

Targeted incentives are accelerating investments in petrochemical complexes, compounding units, and downstream conversion facilities. These schemes are driving capacity expansion, localisation of specialty grades, and higher value addition within India.

? Infrastructure & Circular Economy Push: Under PM GatiShakti and Swachh Bharat Phase II, infrastructure-led demand—particularly for HDPE piping and advanced packaging, has gained momentum. Simultaneously, Extended Producer Responsibility (EPR) norms are catalysing investments in recycling, co-extrusion technologies, and circular polymer solutions.

Outlook:

While the sector remains exposed to volatility in raw material costs, the overall outlook is one of stability, supported by resilient demand in the packaging segment and steady growth in consumption. This continues to reinforce the long-term importance of high-consistency mineral fillers.

At the same time, the industry is gradually shifting from volume-led supply toward performance-driven, value-added solutions, with customers increasingly seeking formulation efficiency, consistency, and application-specific outcomes. This transition is expected to move suppliers toward a more integrated, solution-oriented role, shaping the next phase of growth.

3. Specialty Chemicals and Functional Fillers:

The specialty chemicals industry is undergoing a structural transformation, transitioning from scale-driven commoditisation toward application-specific, performance-led and sustainability-aligned solutions. Globally, the specialty chemicals market is expected to grow at a CAGR of ~6–7% over the medium term, consistently outpacing the broader chemicals segment.

India continues to demonstrate structurally higher growth, with the specialty chemicals sector projected to expand at a CAGR of ~11–12%, supported by manufacturing localisation, import substitution, infrastructure expansion, and increasing export diversification. This growth trajectory reflects a broader shift toward value-added, innovation-driven chemical applications across industries.

Market Trends:

Performance-Led Material Selection: What used to be a cost-driven decision is now a performance-driven one. Customers expect materials that actively improve the end product, whether thats better durability in coatings, higher strength-to-weight ratios in plastics, or improved finish and consistency in industrial applications. Functional fillers are no longer passive inputs; theyre engineered to deliver specific outcomes like scratch resistance, thermal stability, or enhanced flow properties. This is pushing manufacturers to invest more in R&D and application development rather than just production scale.

Formulation Efficiency and Cost Optimisation:

Instead of simply looking for cheaper raw materials, manufacturers are redesigning formulations to extract more value from every unit of input. Functional fillers and additives play a key role here. They can reduce resin usage, improve dispersion, or enhance output characteristics, allowing manufacturers to lower overall production costs without compromising quality. In many cases, slightly higher-value inputs actually reduce total system cost.

Sustainability and ESG Alignment: Regulation and customer expectations are pushing sustainability from a "good to have" to a non-negotiable. This includes lower emissions, safer chemistries, recyclability, and reduced environmental impact across the lifecycle. For specialty chemicals, this translates into demand for eco-friendly additives, low-VOC materials, and products that enable customers to meet their own ESG targets. Export-oriented sectors, in particular, are facing tighter compliance requirements from global markets, making this a critical driver.

Supply Chain Reliability and Traceability: After years of global disruptions, reliability has become as important as cost. Customers want assurance that materials will be available consistently, with uniform quality and minimal risk of disruption. Traceability is also gaining importance, especially in regulated industries. Being able to track source, quality, and compliance across the supply chain is now a differentiator. Suppliers with integrated operations, strong quality systems, and dependable logistics networks are seeing a clear advantage.

Key Government Initiatives

? The Union Budget 2025-26 allocated approx. USD 18.7 billion to the Ministry of Chemicals and Fertilizers, signalling continued government commitment to sector development. This represents one of the highest-ever allocations to the Ministry, underpinning investment in chemical parks, infrastructure, and enabling schemes. The allocation supports the Governments broader vision of growing the chemical industrys GDP contribution and generating employment at scale.

? The Governments 2034 roadmap includes a PLI-type output incentive of 10–20% for agrochemicals and high-value chemical sub-segments, signalling that a structured incentive framework remains on the policy agenda.

? With global companies actively seeking to de-risk supply chains dependent on China, India is emerging as the preferred "China+1" sourcing destination. Strategic investors from Japan, Korea, and Thailand have shown increasing interest in Indian specialty chemical companies as they diversify sourcing.

Outlook

India is increasingly being recognised as a preferred sourcing destination for specialty chemical inputs. Competitive production economics, availability of skilled technical manpower, and a supportive policy environment are enabling domestic manufacturers to strengthen capabilities and align with global standards. The industry outlook remains positive, supported by structural demand drivers and increasing integration into global value chains.

4. Rubber:

Indias rubber industry is entering a decisive phase of structural transformation. Demand remains robust, driven by tyre manufacturing for domestic and export markets, along with growth in industrial rubber goods, conveyor systems, footwear, medical gloves, and rubberised infrastructure products.

? Resilient Demand Environment: Rubber consumption remains robust, anchored by high OEM output in the automotive sector and Indias rising status as a global hub for two-wheelers and electric mobility. Beyond tires, growth is fueled by industrial goods, medical gloves, and infrastructure-linked applications, creating a diversified demand base for both natural and synthetic rubber.

? Policy and Structural Support: Strategic government focus on MSME credit access and technology upgrades is enhancing export competitiveness. Furthermore, new initiatives targeting natural rubber traceability and plantation expansion are designed to meet global sustainability norms while gradually reducing long-term import dependence through improved domestic yields.

? Sustainability and Compliance: ESG is now a core procurement driver, with the automotive and aerospace sectors prioritising low-carbon materials and recycled content. This shift is accelerating the adoption of reclaimed rubber and bio-based elastomers, compelling manufacturers to invest in green compounding solutions and energy-efficient, zero-emission production systems.

Outlook

The industry enters the coming year with constructive demand visibility. Expansion in synthetic rubber capacity, deeper digital integration across production lines, and stronger sustainability frameworks are expected to shape the next phase of growth.

Global demand for Indian rubber products, particularly tyres, automotive components, and engineered industrial goods, is likely to strengthen as international customers diversify sourcing toward competitive and quality-compliant markets.

Potential policy interventions aimed at rationalising import duties, strengthening export incentives, and supporting domestic raw material availability could further enhance industry competitiveness and improve medium-term demand stability.

Across paints and coatings, plastics and polymers, construction chemicals, and rubber, the operating environment remains structurally supportive, though increasingly specification-driven. Demand continues to be anchored by infrastructure spending, manufacturing localisation, urban consumption, and export diversification.

For the Company, these shifts reinforce the relevance of consistent quality, technical capability, and application-driven engagement with customers. Growth across end-use industries is expected to remain steady, with medium-term visibility supported by policy direction, capital expenditure momentum, and Indias expanding role in global supply chains.

Others: Ceramic, Paper, Ink and Construction Chemicals Industry

These industries are entering a phase of steady transformation, supported by structural demand from infrastructure, packaging, printing, and real estate. While relatively smaller in scale compared to core industrial sectors, they collectively represent a stable and diversified demand base, with increasing emphasis on quality, efficiency, and sustainability.

Key Trends:

? Stable and Broad-Based Demand: Demand across these sectors remains resilient. Ceramics is supported by housing and exports; paper is driven by packaging, tissue, and specialty grades; inks benefit from packaging and industrial printing; while construction chemicals are closely linked to infrastructure development and urbanisation. Together, these segments provide consistent and multi-sectoral demand visibility.

? Shift Toward Performance and Efficiency: End-user industries are increasingly focused on improving product performance while optimising costs. This is leading to adoption of better formulations, improved material usage, and enhanced process efficiencies across segments. Whether it is durability in ceramics, print quality in paper, or strength and workability in construction chemicals, performance is becoming a key differentiator.

? Sustainability and Regulatory Focus:

Environmental considerations are gaining importance across all segments. There is rising demand for low-emission inks, sustainable paper solutions, and environmentally compliant construction materials. Export-oriented applications, in particular, are witnessing stricter adherence to global standards, pushing industry players toward cleaner and more responsible practices.

? Evolving Toward Quality and Consistency:

Customersareincreasinglyprioritisingconsistency, reliability, and standardisation in inputs and processes. This is driving gradual formalisation and quality upgrades across these industries, with greater focus on controlled manufacturing, traceability, and supply chain reliability.

Outlook

Individually, these industries may not exhibit high-growth trajectories; however, they are expected to deliver stable to moderate growth, supported by underlying economic activity. Their significance lies in providing diversified, noncyclical demand streams, with selective opportunities emerging in higher-value and specialised applications.

Business Overview

20 Microns Limited stands at the forefront of Indias industrial minerals sector, shaping the evolution of material science through innovation, scale and deep technical expertise. With decades of domain experience, the Company has consistently redefined industry standards by pioneering high-quality micronisation and advancing into sub-micron and nano-sizing technologies.

Over the years, the Company has evolved into a value-added materials solutions provider with a growing presence in Performance Minerals, Specialty Chemicals and Functional Additives. This evolution reflects a clear strategic direction, moving up the value chain to deliver engineered materials that enhance product performance across diverse industrial applications.

Its state-of-the-art R&D and Product Application Centre drives innovation, enabling technology-led, application-specific solutions across diverse industries. Backed by integrated manufacturing, customer-centric engagement and a widening global reach, the Company remains focused on delivering enhanced performance, superior functionality and sustainable value.

20 Microns Limited operates across a diversified portfolio of Performance Minerals and Functional Additives, serving a wide spectrum of industries.

Business Segments:

The segmental mix reflects both scale and balance: Paints (46%), Polymers (26%), Rubber (10%), Ceramics (5%), Paper (4%), and Others (9%).

This diversified presence reduces cyclicality risk while enabling deeper penetration in high-value applications.

1. Paints, Coatings & Printing Inks

Being the segments highest contributor to revenue chart, the portfolio includes: The portfolio includes hydrous and calcined kaolin, calcium carbonate (including sub-micron grades), talc, silica, synthetic barium sulphate, opacifiers, rheological modifiers and matting agents.

Key focus areas:

? Enhancing opacity, sheen, scrub resistance and durability ? replacement

Cost optimisation through TiO2

solutions

? Development of engineered and nano-sized mineral solutions

? Strong technical engagement through application labs

The segment benefits from premiumisation trends in decorative paints and increasing demand for high-performance industrial coatings.

2. Plastics & Polymers

A strong growth vertical catering to PVC pipes and profiles, masterbatches, engineering plastics, films and cable compounds. The portfolio includes coated and uncoated calcium carbonate, talc, barytes, flame retardants and multifunctional processing aids.

Key focus areas:

? Performance enhancement and cost efficiency

? Flame retardancy and desiccant solutions

? Antiblock and dispersion technologies

? Backward integration and global sourcing strength International operations support consistent quality and supply reliability.

3. Rubber

This segment supplies engineered fillers, activators, processing aids and reinforcement solutions for tyres, hoses, belts and automotive components.

Key focus areas:

? Partial replacement of carbon black and silica

? Reinforcement and barrier property improvement

? High-purity magnesium oxide and specialty calcined kaolin

? Nano clay and advanced filler solutions

The segment is aligned with automotive and industrial growth trends.

4. Ceramics

The Company provides hydrous and calcined kaolin, feldspar, quartz, talc and specialty minerals for tiles, sanitaryware and tableware.

Key focus areas:

? High firing whiteness and controlled chemistry

? Consistent plasticity and workability

? Premium low-iron and high-brightness grades

The portfolio supports both mass and premium ceramic applications.

5. Paper

The Paper segment delivers coating pigments and engineered fillers designed to enhance gloss, opacity and printability.

Key focus areas:

? Low-abrasion kaolin and calcium carbonate ? replacement solutions

TiO2

? Barrier-enhancing talc and rheology modifiers

? Improved coating efficiency and cost optimisation

6. Others

This includes functional additives across industries, mineral-based fertilizers and construction chemical solutions.

Key focus areas:

? Expansion into specialty and higher-margin applications

? Product innovation and diversification

? Strengthening presence in niche segments

20 MCC — Construction Chemicals Division

20 MCC is a wholly owned subsidiary of 20 Microns Limited, established in 2015 to build a dedicated mineral and polymer-based waterproofing and construction chemicals portfolio. Operating as a B2C retail division, 20 MCC marks the Companys strategic extension from industrial B2B supply into consumer-facing branded construction solutions, distributing products through a network of 170+ dealers concentrated in Tier 2 and Tier 3 cities across India.

MinFert - Mineral-Based Agriculture Division

Launched in 2017, the MinFert Division of 20MCC marked entry into the mineral-based agriculture inputs space, developing a range of plant nutrients, soil conditioners, and crop protection products derived from the Companys core mineral platform. Minfert operates in the B2C retail channel, distributed through agri-dealers and rural retail networks targeting farm-level end-users. The division reflects the Companys conviction that the same mineral science underpinning industrial applications, micronisation, surface modification, and particle engineering, can deliver differentiated performance in agriculture, where mineral-based inputs improve soil health, nutrient bioavailability, and plant resilience.

Financial performance summary on Standalone basis

	FY25	FY26	% Change
Revenue	804.09	832.81	3.57%
EBIDTA	97.36	103.17	5.97%
Depreciation	15.07	16.25	7.88%
EBIT	82.29	86.91	5.62%
Finance cost	15.73	14.11	-10.28%
Profit before Tax (PBT)	73.70	81.18	10.15%
Profit after Tax (PAT)	56.36	60.23	6.87%

Summary of Balance Sheet

	FY25	FY26
Equity and liabilities
Equity share capital	17.64	17.64
Other equity	363.49	414.42
Non-current liabilities	52.00	43.53
Current liabilities	177.36	178.82
Total	610.49	654.41

 

	FY25	FY26
Assets
Non-current assets	84.33	82.30
Fixed assets	223.01	225.97
Current assets	303.15	346.14
Total	610.49	654.41

 

Particulars	Numerator	Denominator	FY26	FY25	Variance %	Reason for variance
Current Ratio (times)	Current Assets	Current Liabilities (Excl. Customer deposits)	1.94	1.71	13.25%	--
Debt-Equity Ratio (times)	Debt consists of borrowings	Shareholders Equity	0.26	0.31	-16.09%	--
Debt Service Coverage Ratio (times)	Earning for Debt Service = Net Profit after taxes + Non- cash expenses/ adjustment + Interest + loss on sale of asset	Interest on Borrowings + Principal Repayments	4.05	3.58	13.13%	--
Net profit ratio (%)	Net Profit after tax	Revenue from operations	7.31%	7.09%	3.09%	--
Return on Equity Ratio (%)	Net Profits after taxes – Preference Dividend (if any)	Average Shareholders Equity	14.81%	16.00%	-7.43%	--
Return on Capital employed (%)	Profit before tax + Interest on borrowings	Average Capital Employed=Tangible Net Worth + Total Debt + Deferred Tax Liability	16.78%	17.28%	-2.89%	--
Return on investment (%)- unquoted *	Income generated from investments	Average investment	-33.87%	25.00%	-235.48%	Due to reduction in the net value of the investment.
Inventory turnover ratio (times)	Revenue from operations	Average Inventory	7.23	7.79	-7.16%	--
Trade Receivables turnover ratio (times)	Revenue from operations	Average Trade Receivable	5.83	6.68	-12.71%	--
Trade payables turnover ratio (times)	Net Purchases	Average Trade Payables	7.15	7.80	-8.31%	--
Net capital turnover ratio (times)	Reveune from operations	Working Capital	4.92	6.32	-22.07%	--

* Investments made in Subsidiaries and associates for business objective is not considered investments for the purpose of calculation of this ratio.

Financial Performance Summary

Risks and mitigation

Risk management remains embedded within strategic planning, operational execution and governance oversight. During the year, the Company strengthened its enterprise-wide risk framework to ensure resilience across financial, operational and compliance dimensions.

Our risk management process

Risk identification

Systematically identify potential risks across operations, supply chains, market and regulatory landscapes.

Control implementation

Develop appropriate teams, processes, and tools to mitigate the most significant risks efficiently.

Monitoring and review

Continuously track key risk indicators and regularly update mitigation strategies to ensure they remain effective and responsive.

Risk assessment

Evaluate and prioritize these risks based on their likelihood of occurrence and potential impact on the business.

Risk Area	Potential Impact	Risk Level	Mitigation Strategy
Raw Material & Resource Security	Fluctuations in mineral availability, mining regulations, energy costs and logistics expenses may impact production costs and margins.	High	Diversified and planned sourcing cycles, captive mining reserves, strategic inventory management, long-term supplier partnerships, and continuous cost optimisation initiatives.
Demand Cyclicality Across End-Use Industries	Slowdown in paints, polymers, rubber, ceramics or construction sectors could affect volumes and profitability.	Medium	Diversified end-market portfolio, expansion into specialty applications, customer diversification and focus on value-added products.
Global Trade, Export & Geopolitical Risk	Trade restrictions, freight disruptions, currency volatility and geopolitical developments may affect export competitiveness and supply chains.	Medium	Balanced domestic-export mix, market diversification, active treasury management and strengthened logistics planning.
Operational & Project Execution Risk	Delays in capacity expansion, integration of overseas assets or operational disruptions may impact growth objectives.	Medium	Structured project governance, performance monitoring systems, standardised operating procedures and leadership oversight.
Sustainability, Environmental & Regulatory Risk	Increasing environmental regulations, ESG expectations and compliance requirements may affect operating costs and market access.	High	Adoption of ISO and Responsible Care practices, regular environmental audits, resource-efficiency initiatives and proactive compliance monitoring.
Technology, Cybersecurity & Digital Risk	Increased digitalisation exposes the Company to cybersecurity threats, data breaches and operational disruptions.	Medium	Strengthened IT governance, cybersecurity protocols, access controls, disaster recovery systems and periodic security assessments.

Internal Controls and Governance

The Company maintains a strong internal control framework aligned with the scale and complexity of its operations. During FY26, risk-based internal audits were conducted across key functions and manufacturing locations to assess compliance with policies, standard operating procedures and statutory requirements.

Audit findings and corrective actions were reviewed quarterly by the Audit Committee, which monitored implementation and evaluated the effectiveness of the control environment. Timely closure of observations remained a priority, reinforcing accountability and process discipline.

Internal financial controls were further strengthened through improved documentation, digital tracking and tighter integration across procurement, production, inventory, sales and treasury processes.

The Board of Directors oversees the adequacy and operating effectiveness of internal financial controls, ensuring reasonable assurance over financial reporting, asset safeguarding and regulatory compliance. Based on reviews conducted during the year, the internal control systems were found to be adequate and operating effectively.

Information Technology

The Company operates on an integrated IT framework that enables seamless service administration and delivery across functions. From production planning and inventory control to electronic procurement, paperless workflows, budgeting, forecasting and cash flow monitoring, the systems generate real-time business intelligence that supports informed and timely decisions across 20ML.

Aligned with global standards in information automation and performance monitoring, the IT architecture supports structured MIS reporting, secure remote access and improved process efficiency. Enhanced cybersecurity protocols, system upgrades and VAPT testing were undertaken during the year have further reinforced reliability and data protection.

The in-house technical team continues to play a pivotal role in system optimisation, customisation and user enablement. Beyond routine support, the team actively drives process automation and technology adoption initiatives, ensuring that the Companys digital capabilities evolve in step with its strategic growth objectives.

Human Resource

20 Microns continues to draw its strength from a committed and capable workforce that remains central to its sustained growth. As on March 31, 2026, the Companys employee base stood at 413. This underscores the Companys continued investment in people to support its scaling operations and expanding market presence. The Company promotes gender diversity by employing 10 women employees, including at leadership levels, and ensures a safe and dignified workplace through strict compliance with its POSH policy framework.

Recognising that people are its most valuable asset, 20 Microns has further strengthened its HR processes and people practices to align with evolving business priorities. A dedicated focus on innovation is reflected in the presence of 43 employees in research and development functions, supporting product development, application engineering, and continuous improvement initiatives. Structured on-the-job learning, focused workshops and external training programmes continue to provide employees with opportunities to enhance their technical capabilities and leadership skills.

The Companys ability to attract, integrate and retain high-quality talent remains a defining strength. Cordial industrial relations, a culture of openness and continued emphasis on safety and well-being reinforce employee confidence and engagement. Senior management remains actively involved in fostering a work environment that supports both professional excellence and personal growth.

At 20 Microns, human resource management extends well beyond compensation and performance reviews. The Company adopts a lifecycle approach to talent development, guiding employees through meaningful career pathways, enabling skill enhancement and encouraging long-term association. With a workforce comprising seasoned professionals supported by a steady infusion of new energy, 20 Microns is well-positioned to leverage emerging opportunities while navigating industry complexities with resilience and confidence.

Health & Safety

The Company follows a uniform health and safety framework across all sites, embedding HSE standards into daily operations. Structured training programmes, mock drills and periodic awareness sessions reinforce preparedness and safe work practices. Regular safety audits, risk assessments and compliance reviews are conducted to identify potential hazards and strengthen preventive controls. Plant-level safety committees actively monitor practices, implement corrective actions and ensure accountability.

During the year, continued investments in safety infrastructure, process improvements and monitoring systems enhanced workplace safeguards. The focus extends beyond compliance, fostering a culture where safety is integral to operational excellence. Employee wellness initiatives, including periodic health check-ups and awareness programmes, supported both physical and mental well-being, reinforcing a safe and resilient work environment.

Cautionary Statement

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be ‘forward-looking statements within the meaning of applicable securities laws & regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand, supply, and price conditions in the domestic & overseas markets in which the Company operates, changes in Government regulations, tax laws & other statutes, and other incidental factors. The Company assumes no responsibility in respect of forward-looking statements, which may be amended or modified in the future.