A-1 Ltd Management Discussions

Global Outlook

The worlds chemical industry began bouncing back in 2025 and is set to keep improving in 2026, but growth is slow and steady.

Companies feel more hopeful, yet remain careful due to uncertainty about how quickly markets will recover.

The phase during which companies were reducing their stock levels ended in 2025, making the market more stable except in agrochemicals, which are still facing some challenges.

The 2025 26 global conflict introduced significant challenges and opportunities for Indias chemical and logistics sectors, characterized by supply chain disruptions, soaring logistics costs, and increased trade volatility. Import dependency from affected regions caused feedstock shortages, while international tari s squeezed export potential margins and Chinese oversupply placed downward pressure on bulk chemical margins.

In response, Indian rms accelerated efforts toward supply chain resilience adopting strategies like distributed warehousing and inventory bu ering while leveraging government incentives such as PLI and PCPIRs to reduce import dependence and boost domestic production.

To maintain competitiveness amidst this instability, the industry has pivoted toward high-value specialty chemicals and increased investments in AI, process innovation, and regional production hubs. Supported by coordinated government policy [PLI schemes], these measures aim to mitigate near-term market volatility. By focusing on R&D and domestic capacity, India is well-positioned to convert these challenges into long-term strategic advantages, potentially to emerge as a regional leader in integrated logistics and chemical manufacturing.

Most growth in 2025 was from higher sales volumes and price increases.

Indias Rapid Chemical Industry Growth

There is a rise in demand from end-user industries such as food processing, personal care and home care is driving the development of different segments in Indias specialty chemicals market.

India is the sixth largest producer of chemicals in the world and third in Asia, contributing 7% to Indias GDP.

Indias specialty chemicals companies are expanding their capacities to cater to rising demand from domestic and overseas.

With global companies seeking to de-risk their supply chains, which are dependent on China, the chemical sector in India has the opportunity for a significant growth.

In the specialty chemicals sector, manufacturers are focusing on green solvents, biodegradable surfactants, and bio-based polymers, with Indias green chemicals market expected to grow at a CAGR of over 10% and exceed US$ 15 billion by 2027.

As part of the Union Budget 2026-27 the government allocated Rs. 185.72 crore (US$ 21.0 billion) to the Ministry of Chemicals and Fertilizers.

In November, 2025, Government of India launched a scheme for Rare Earth Permanent Magnets (REPM) with a financial outlay of Rs. 7,280 crore (US$ 824 million) to develop domestic manufacturing capacity of around 6,000 MTPA. This will lead to growth in mining and explosive industries.

PLI schemes were introduced to promote Bulk Drug Parks, with a budget of Rs. 1,629 crore (US$ 213.81 million).

The Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) set up at Paradip has attracted investments worth Rs.73,518 crores (US$ 8.84 billion), The Dahej PCPIR project in Bharuch, comprising 180 existing and 650 under construction industrial units has attracted an investment of Rs. 1 lakh crore (~US$ 12 billion)

Market Demand: Much of this growth is thanks to rising domestic demand and government efforts to boost self-su ciency.

Exports: India sells chemicals to over 175 countries, with chemicals making up about 15% of its exports.

Strong Expansion: Indias chemical sector is growing quickly, expected to reach $380 billion by 2030 (up from $300 billion in 2025).

Major Investments: Investments in new chemical projects, mainly for building infrastructure and encouraging innovation in petrochemicals.

Focus on Sustainability: Companies are increasingly using greener, safer, and more environmentally friendly practices and technologies.

Digital Adoption: Tools like arti cial intelligence and the Internet of Things are helping streamline production and supply chains.

Defence: Defence production reached a record high in FY 2025-26, marking an impressive increase over the past decade. India now exports defence equipment to over 100 neighbouring countries, with the USA, France, Tunisia and Armenia being top buyers in 2025-26.

Industry Challenges and Adjustments

War and Global Risks: Ongoing global con icts, climate issues, and new regulations are causing companies to rethink where they get supplies and to spread out production. Meanwhile tentatively diverting focus on the sectors that are being affected positively.

Specialty Chemicals: Demand for customized and advanced chemical products remains strong, especially in uncertain times.

The demand for specialty chemicals has decreased in Europe. This decline is primarily attributed to a combination of factors, including high energy prices, weak global demand, and increased competition on global markets.

Modernizing Chemical Logistics in India

Better Supply Chains: Indian companies are updating their supply chains with real-time tracking, advanced data analysis, and smarter algorithms.

Smarter Production and Inventory Management: These tech upgrades help factories schedule efficiently, avoid slowdowns, and make supply chains more reliable. The industry is adopting “just-in-time” inventory methods to cut costs, which requires closer teamwork among partners. More companies now use “push-driven” systems to better control stock and serve customers faster.

Key Global and Indian Trends

Increased focus on sustainability and environmental responsibility. Fast-tracked digitalization to boost productivity. Industry-wide moves to modernize and strengthen supply chains.

Government Supporting Freight and logistics with rounding up major investments in Ports and Highways.

STRENGTHS AND THREATS :

STRENGTHS	THREATS
A-1 Limited stands among Indias largest and most established traders and distributors of industrial acids and chemicals, with over 50 years of experience.	Intense competition from local players and importers who may offer select products at lower prices. Exposure to potential raw material shortages, price volatility, and fluctuations in market demand.
The company benefits from an experienced management team known for upholding the highest ethical standards.	Heavy reliance on chemical imports contributes to market instability.
Ownership of a dedicated eet ensures seamless, timely delivery of goods directly to manufacturers.	Ongoing global con icts and economic uncertainties can disrupt markets and shift industry focus.
The business is recognized for prompt delivery services and efficient nancial transactions.
Commitment to quality assurance guarantees adherence to strict product standards.
Strong, cordial relationships are maintained with both suppliers and customers, fostering trust and reliability.

SEGMENTWISE/ PRODUCTWISE BIFURCATION: Our company deals in following products:

1 NITRIC ACID (HNO3) ALL GRADES (18-40%, 61%, 68%, 72%, 98%)

It is also referred to as fuming nitric acid. Depending on the amount of nitrogen dioxide present, fuming nitric acid is further characterized as white fuming nitric acid or red fuming nitric acid, at concentrations above 95%. Nitric acid is the building block chemical for the production of many other chemical compounds. It is used in manufacturing several types of polymers like polyamides and polyurethane. Nitric acid is also commonly used as rocket propellants in the aerospace industry. It is also used for manufacturing nitrogen-based compounds like nylon as well as most of the explosives like trinitrotoluene (T.N.T.), nitroglycerin, amongst others. Other uses include, production of nitrate salts, making dyes, coal tar products and drugs. It is also used mostly for the puri cation of precious metals like platinum, gold, and silver. In fertilizer production, Nitric acid is used for manufacturing different types of nitrogenous fertilizers like calcium nitrate, ammonium nitrate, etc. Nitric acid is a key component which is also a byproduct of Ammonia. Nitric acid is widely used in Steel Industry as well.

2. HYDROCHLORIC ACID:

Hydrochloric acid is used in the production of organic compounds like vinyl chloride and dichloromethane for plastics or PVC (Polyvinyl Chloride), bisphenol A, and many others. This acid is used to prepare compounds that are used as water treatment chemicals. Some examples include polyaluminium chloride (PAC), iron(III) chloride, ferric acid, an aluminum carbohydrate which are used in treating the water. It is also used in the regeneration of ion exchange resins and it is speci cally used to rinse the cations from the resins.This acid is used to purify table salts. Further, HCl is used mostly for regulating the acidity (pH) of solutions and it is used in controlling the pH of pharmaceutical products, foods, and water.Hydrochloric acid is used in the production of oil production. Generally, HCl acid is injected into a rock where due to the reaction the rock forms large-pore structures. Now, this significantly assists in oil production. HCL is widely used in Fertilizer industry as well.

3. SULPHURIC ACID:

Sulphuric acid is a mineral acid with molecular formula H2SO4. It is a colorless, odorless, and syrupy liquid that is soluble in water, in a reaction that is highly exothermic. Its corrosiveness can be mainly ascribed to its strong acidic nature, and if concentrated its dehydrating and oxidizing properties. It is also hygroscopic, readily absorbing water vapour from the air. Sulphuric acid at even moderate concentrations is very dangerous upon contact with skin.

The most common use of sulphuric acid (60% of total) is for fertilizer manufacture. It is used in different industries such as wastewater processing, production of cleaning agents, processing of minerals, producing explosives, detergents and paper industry for the manufacture of aluminium sulfate Used to damage the cancerous cell DNA by the manufacture of chemotherapy drugs. It is used in ointments to treat various skin infections. It is the basic ingredient of topical ointment named Debacterol in the treatment of canker sores.

4. TECHNICAL GRADE UREA (TGU):

Technical Grade Urea is an organic compound. Urea serves an important role in the metabolism of nitrogen-containing compounds. Urea is widely used in fertilizers as a source of nitrogen and is an important raw material for the chemical industry. It is a colorless, odorless solid, highly soluble in water, urea is basically non-toxic. The human body uses urea in many processes, most notably nitrogen excretion.one of the most important use of T.G.Urea is manufacturing of Diesel Exhaust Fuel (DEF).

5. ACETIC ACID:

Acetic Acid is used in textile industries for textile processing and printing. Acetic acid is one of the simplest carboxylic acids. It is an important chemical reagent and industrial chemical that is used in the production of plastic soft drink bottles, photographic lm; and polyvinyl acetate for wood glue, as well as many synthetic bres and fabrics.

6. ETHYL ACETATE:

This colorless liquid has a characteristic of sweet smell (similar to pear drops) and is used in glues, nail polish remover, deca einating tea and co ee, and cigarettes. Ethyl acetate is the ester of ethanol and acetic acid; it is manufactured on a large scale for use as a solvent. Ethyl acetate is used primarily as a solvent and diluent, being favored because of its low cost, low toxicity, and agreeable odor. For example, it is commonly used to clean circuit boards and in some nail varnish removers (acetone is also used). Co ee beans and tea leaves are deca einated with this solvent (when supercritical CO2 extraction is not possible). It is also used in paints as an activator or hardener. Ethyl acetate is present in confectionery, perfumes, and fruits. In perfumes it evaporates quickly, leaving the scent of the perfume on the skin. Ethyl acetate is the most common ester in wine, being the product of the most common volatile organic acid acetic acid, and the ethyl alcohol generated during the fermentation. The aroma of ethyl acetate is most vivid in younger wines and contributes towards the general perception of "fruitiness" in the wine.

7. OLEUM:

Oleum is a cloudy, gray, fuming, oily, corrosive liquid, with a sharp, penetrating odor. Its composition is that of H2SO4 with dissolved So3.

8.SODIUM HYPOCHLORITE:

Sodium hypochlorite is an excellent steriliser, oxidiser and decolouring agent. It is used to make disinfectants and a variety of pharmaceutical drugs. It is also widely used for water treatment.

In the process, sodium hypochlorite (NaClO) and sodium chloride (NaCl) are formed when chlorine is passed into a cold dilute sodium hydroxide solution. The solution must be kept below 40 ?C (by cooling coils) to prevent the undesired formation of sodium chlorate.

PROVIDING LIQUID CHEMICAL TRANSPORTATION ALL OVER INDIA:

Our Company provides transportation facilities to our customers through our owned eet of tankers. Our products are marketed and sold PAN India. The products are provided to the customer on demand basis and as and when demand arises, the product is procured from the suppliers including companies like Gujarat Narmada Valley Fertilizers Company Limited (GNFC), Gujarat State Fertilizers & Chemicals Limited (GSFC), DCM Sriram, Nirma Ltd, SRF Ltd, GACL, HZL, Bodal Chemicals, Ishan Dyes and Grasim Industries & many other Industrial Units and is made available to the customer.

OUTLOOK: Our company is focusing on cost reduction measures as well as to improve processes to enhance customer satisfaction which will have a long term benefit in helping our company to achieve its goals and scale new heights in the growth path. This will not only help us in providing products at better economical & competitive rates but will also give us an overall ace in the Industrial Chemical Sector. With a good order book and customer support and the product variety in hand, we expect good growth in the whole year. With a play towards very high volume/low price materials, we are expecting a very different outcome in terms of sales in the year.

RISKS AND CONCERNS: Our Company had put a risk management framework in place by the defined statements of purpose, post a comprehensive review of its risk management process. Our Company takes a fresh look at the risk management framework through our Audit Committee at least once in a year. The review involved understanding the existing risk management initiatives and assessment of risks in the businesses as the relative control measures and arriving at the desired counter measures keeping in mind the risk appetite of the organization. The audit Committee has periodically reviewed the risks in the business and recommended appropriate risk mitigating actions.

The business of the Company is likely to be affected by various internal and external risks enumerated as under:

Our success depends largely upon the services of our Promoter, Directors and other key managerial personnel and our ability to attract and retain them.

The prices we are able to obtain for the products that we trade depend largely on prevailing market prices.

We face intense competition in our businesses, which may limit our growth and prospects.

Global economic, political and social conditions may harm our ability to do business, increase our costs and negatively affect our stock price.

Global recession and market conditions could cause our business to su er.

Natural calamities and changing weather conditions caused as a result of global warming could have a negative impact on the Indian economy and consequently impact our business and profitability.

Tax rates applicable to Our Company may increase and may have an adverse impact on our business.

Political instability or changes in the Government could adversely affect economic conditions in India generally and our business in particular. As a responsible employer, to ensure occupational safety and employment standards, your Company maintains strict safety and quality control programs to monitor and control these operational risks.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY: The Company implemented suitable controls to ensure its operational, compliance and reporting objectives are achieved. The Company has adequate policies and procedures in place for its current size as well as the future growth needs. These policies and procedures play a pivotal role in the deployment of the internal controls. They are regularly reviewed to ensure both relevance and comprehensiveness, and compliance is ingrained into the management review process. These policies are regularly followed and updated to bring out the best efficiency out of the resources.

Adequacy of controls of the key processes is also being reviewed by the Internal Audit team. Suggestions to further strengthen the process are shared with the process owners and changes are suitably made. Significant ndings, along with management response and status of action plans are also periodically shared with and reviewed by the Audit Committee. It ensures adequate internal financial control exists in design and operation.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

On a standalone basis, the revenue from operations for FY 2025-26 was Rs. 34,290.92 Lakhs under the previous years revenue from operations of Rs. 33,149.42 Lakhs. Net Profit after tax for FY 2025-26 was Rs. 599.21 Lakhs against the previous years Net Profit after tax of Rs. 365.10 Lakhs.

On a consolidated basis, the revenue from operations for FY 2025-26 was Rs. 34290.92 Lakhs over the previous years revenue from operations of Rs. 33149.42 Lakhs. Net Profit after tax for FY 2025-26 was Rs. 599.21 Lakhs against the previous years Net Profit after tax of Rs. 365.10 Lakhs.

On standalone basis, Earnings per Share for FY 2025-26 was Rs. 0.13 against the previous years Earnings per Share of Rs. 0.08.

On consolidated basis, Earnings per Share for FY 2025-26 was Rs. 0.13 against the previous years Earnings per Share of Rs. 0.08.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED: We believe that our employees are key contributors to our business success. We focus on attracting and retaining the best possible talent. Our Company looks for specific skill-sets, interests and backgrounds that would be an asset for our business.a

Category	Number
Chairman cum Managing Director, Whole-Time Director	3
Independent & other Non-Executive Director	7
Accounts & Administration & Financial Operations	5
Marketing	6
Secretarial & Legal	1

Our HR Department ensures a competent and committed team engaged in building a culture of learning to achieve excellence in performance and employee satisfaction by enhancing their skills through Training & Development Programs for innovation & continual improvement of the employees. At A-1 Limited, we lay a lot of emphasis on transparent and open two-way communication between the management and the employee.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Key Financial Ratios	Numerator	Denominator	31.3.2026	31.03.2025	Variance
1.Current Ratio	Current Assets	Current liabilities	1.73	2.50	-30.56%
2.Debt-Equity Ratio	Total Debt	Shareholders Equity	0.77	0.43	78.21%
3.Debt service coverage ratio	Earnings available for Debt Servicing	Total Debt Service	0.30	0.46	-35.70%
4.Return on Equity Ratio	Profit after Taxes	Average shareholders Equity	11.30%	7.32%	54.38%
5.Inventory turnover ratio (in days)	Cost of Goods sold	Average Inventory	98.66	133.61	-26.16%
6.Trade Receivables turnover ratio (in days)	Revenue from Operations	Average Trade receivables	5.33	8.15	-34.57%
7.Trade Payables turnover ratio (in days)	Purchase of Goods & Services and other expenses	Average trade payables	72.28	241.68	-70.09%
8.Net Capital turnover	Revenue from Operations	Working Capital	9.23	9.76	-5.36%
9.Net Profit Ratio	Net profit after taxes	Revenue from Operations	1.75%	1.10%	58.66%
10.Return on Capital Employed	Earnings Before interest & Tax	Capital Employed	10.20%	9.37%	8.88%
11.Return on Investment	Income from Investments	Cost of Investment	NA	NA	NA

Reason for Variance above 25% in ratios

1. Due to increase in working capital loan

2. Due to increase in working capital loan

3. Due to increase in profit

4. Due to increase in profit

5. Due to increase in average inventory

6. Due to increase in trade receivables

7. Due to increase in trade payables

8. NA

9. Due to increase in net profit

10. NA

DISCLOSURE OF ACCOUNTING TREATMENT: The Company adopted Indian accounting standard (“Ind As”) prescribed under section 133 of the companies act, 2013 read with relevant rules issued there under and in terms of Regulation 33 of the SEBI (LODR) Regulations, 2015 and the Companies (Indian accounting Standards) (Amendment) Rules, 2016. Beginning April 1, 2020, the company has for the first time adopted IND AS with the transition date of April 1, 2019.

CAUTIONARY STATEMENT: Readers are cautioned that this Management Discussion & Analysis pertaining to A-1 Limited contains forward-looking statements that involve risks and uncertainties. When used in this discussion, the words “anticipate,” “believe,” “estimate,” “intend,” “will,” and “expected” and other similar expressions as they relate to the Company or its business are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results, performances or achievements, risks and opportunities could differ materially from those expressed or implied in these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements as these are relevant at a particular point of time and adequate restraint should be applied in their use for any decision making or formation of an opinion. This document does not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. This document neither gives any guarantee of return nor any recommendation of investment in the securities of the Company.

Registered Offie:
Corporate House No. A-1, Shivalik Business Centre, B/h. Rajpath Club, S. G.	For and on behalf of the Board, A-1 LIMITED, (Formerly known as A-1 Acid Limited)
Highway, Bodakdev, Ahmedabad,	Sd/-	Sd/-
Gujarat, India, 380059	Harshadbhai N. Patel	Jitendra N. Patel
Date: 26.08.2026	Chairman & Managing Director	Whole-Time Director
Place: Ahmedabad	DIN: 00302819	DIN: 00164229