Anupam Rasayan India Ltd Management Discussions

Global Economic Review

The global economy remained resilient in 2025 despite geopolitical tensions, evolving trade policies and persistent macroeconomic uncertainty. While inflationary pressures moderated across several economies and financial conditions gradually improved, growth remained constrained by geopolitical conflicts, supply chain disruptions and an uneven recovery across regions. Businesses across industries accelerated efforts to strengthen supply chain resilience, diversify sourcing networks and enhance operational agility.

According to the International Monetary Funds World Economic Outlook Update of January 2026, global growth is estimated at 3.2% in 2025

and is projected at 3.3% in 2026 and 3.2% in 2027, remaining below long-term historical averages. Advanced economies continue to expand modestly, supported by resilient United States activity and technological investment, particularly in artificial intelligence, while emerging markets and developing economies remain the primary contributors to global growth, supported by stronger domestic demand, manufacturing activity and investment flows. Long-term structural themes such as digitalisation, artificial intelligence, energy transition and industrial modernisation continued to drive investment, creating new opportunities across manufacturingintensive sectors.

Source: IMF World Economic Outlook Update, January 2026.

Growth remained divergent across regions. The United States continued to demonstrate resilience, supported by robust consumption and heavy investment in technology and artificial intelligence infrastructure, while the euro area and several other advanced economies grew more slowly amid elevated energy costs and weak industrial demand. Among emerging markets, India remained the standout performer, with China stabilising and other Asian economies benefiting from the reconfiguration of global supply chains. Headline inflation eased across most major economies as earlier monetary tightening took effect and commodity prices moderated, allowing central banks to begin gradually easing policy, although the pace of rate reductions remained cautious given lingering price and trade-policy risks.

Notwithstanding near-term uncertainties around trade policy and geopolitical fragmentation, these structural growth drivers are expected to support global economic activity and promote innovation and competitiveness across industries over the medium term. Coordinated efforts to stabilise trade, implement structural reforms and rebuild fiscal space remain important to sustaining momentum and containing downside risks. For manufacturingintensive and export-oriented businesses, the environment continues to reward those that can offer supply-chain reliability, differentiated technology and a diversified geographic footprint.

Global Chemical Industry

The global chemical industry continued to operate in a dynamic environment during the year. While demand conditions improved gradually across several end-use industries, the pace of recovery remained uneven across geographies and product categories. According to the American Chemistry Council, global chemical production growth is expected to moderate to approximately 1.9% in 2026, against 2.6% in 2025, reflecting persistent supply-demand imbalances, policy uncertainty and subdued industrial activity in several developed markets. Europe is expected to return to marginal growth of around 0.2% after a contraction in 2025, while North America is projected to expand by approximately 0.5%. Africa and the Middle East are set to record the fastest growth, accelerating to around 3.8%. Asia-Pacific remains the primary growth engine, driven by industrial expansion,

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rising domestic consumption and increasing investment in downstream chemical value chains, with India standing out as a key growth market.

Source: American Chemistry Council, Year-end and Mid-Year 2026 Chemical Industry Outlook.

Beyond cyclical factors, the global chemical industry is undergoing structural transformation. Companies are increasingly prioritising supply-chain resilience, a regional manufacturing footprint and portfolio optimisation in response to geopolitical fragmentation and shifting trade flows. Sustainability is becoming a key imperative, with growing investment in low- carbon technologies, circular economy solutions and resource-efficient production processes. Simultaneously, digitalisation, automation and artificial intelligence are reshaping research, manufacturing and supply chain operations, enabling companies to improve productivity, accelerate innovation and enhance operational resilience. The convergence of these trends is redefining competitive advantage and creating opportunities for innovation-led companies with specialised technologies and differentiated capabilities.

Global Speciality Chemicals Industry

The global speciality chemical industry continues to outperform the broader chemicals sector, supported by increasing demand for high- performance, application-specific solutions across pharmaceuticals, electronics, agrochemicals, personal care, construction, performance materials and energy-transition applications. According to Mordor Intelligence, the global speciality chemicals market was valued at approximately US$1.21 trillion in 2025 and is projected to reach nearly US$1.54 trillion by 2031, growing at a compound annual growth rate of 4%. Growth is being driven by increasing product complexity, rising performance requirements, rapid technological advancement and the growing need for sustainable and customised chemical solutions. As industries increasingly prioritise innovation, efficiency and environmental stewardship, speciality chemicals are becoming critical enablers of next-generation manufacturing and industrial development.

Source: Mordor Intelligence, Speciality Chemicals Market, 2025.

Trends Shaping the Speciality Chemicals Industry

Sustainability and circularity driving innovation:

customers and regulators increasingly demand low-carbon products, bio-based materials, recyclable solutions and resource-efficient manufacturing. Companies are investing in green chemistry, circular economy initiatives and cleaner production technologies to enhance competitiveness and meet evolving environmental expectations.

Digital transformation and Industry 4.0: the integration of artificial intelligence, the Internet of Things and advanced analytics is reshaping chemical research and production. These tools enhance predictive maintenance, optimise supply chains and accelerate innovation, with digital twins and hybrid modelling emerging as key enablers of data-driven operations.

Focus on health and environmental safety: there is growing emphasis on designing chemicals that are safer for human health and the environment, involving non-toxic alternatives and the reduction of hazardous substances, driven by stringent regulation and consumer awareness.

Economic resilience through innovation: amid macroeconomic challenges, the industry is focusing on high-value speciality chemicals for sectors such as electronics and pharmaceuticals, alongside strategic partnerships to diversify portfolios and mitigate volatility.

Source: McKinsey 8 Company; Deloitte; Grand View Research.

Challenges

Declining financial performance: after years of outperforming broader markets, total shareholder returns in the chemicals industry have lagged and flattened over recent years, owing to rising capital costs, shrinking margins from higher input costs, and weaker demand in end markets such as construction and automotive.

Geopolitical and trade disruptions: trade disputes and potential new tariffs are disrupting global supply chains, complicating sourcing strategies and increasing costs, particularly for companies reliant on cross-border trade.

Sustainability and decarbonisation pressures: the transition to low-carbon processes and feedstocks is capital-intensive and complex, with high energy costs and regulatory requirements straining financial resources.

Innovation lag: limited R&D investment and the slow adoption of digital tools have hindered competitiveness in a market demanding novel solutions for energy transition and circularity.

Regional competitive imbalances: overcapacity in certain regions, coupled with new plant startups, is pressuring global prices and margins, while some regions struggle with high energy costs and low operating rates.

Workforce and demographic shifts: an ageing workforce and changing skill requirements pose challenges fortalent acquisition and retention, requiring investment in upskilling to support digital transformation and sustainable practices.

Source: McKinsey & Company,The State ofthe Chemicals Industry, December 2024.

Indian Economic Review

India retained its position as the fastest-growing major economy during the year. According to the National Statistics Office, Indias real GDP is estimated to have grown by 7.7% in FY 2025-26 (Provisional Estimates), with nominal GDP growth of 8.9%, an improvement on the 7.1% real growth recorded in FY 2024-25. This performance is supported by strong macroeconomic fundamentals, resilient domestic demand and robust activity across industry and services, even as global conditions remained uncertain.

Source: National Statistics Office, Ministry of Statistics and Programme Implementation, Provisional Estimates of Annual GDP 2025-26.

Industry and services continued to anchor growth, supported by sustained public capital expenditure, a gradual revival in private investment and healthy credit growth. Manufacturing benefited from policy measures aimed at strengthening domestic production, while the services sector remained buoyant. Agriculture remained a vital pillar ofthe economy, aided by favourable monsoon conditions and continued policy support, which in turn supported rural demand and, importantly for the Company, demand for crop protection chemistries. Moderating inflation and a stable external position provided room for supportive monetary and fiscal policy, reinforcing Indias role as a key driver of global economic growth.

Financial Statements

The medium-term outlookfor India remains favourable, underpinned by demographic strength, structural reforms, sustained infrastructure investment and a growing manufacturing base. Government initiatives to promote domestic manufacturing, deepen value chains and attract investment continue to create opportunities for domestic producers, particularly those participating in higher-value and export-oriented segments. Forthe speciality chemicals sector, these tailwinds are reinforced by global supply-chain diversification and the China- plus-one sourcing strategy, which continue to channel investment and customer interest towards Indian manufacturers with the requisite scale, technology and compliance credentials.

Indian Chemicals Industry

The Indian chemicals industry, a cornerstone of the nations economic growth, continues to play a pivotal role in supporting agriculture, food security, textiles and industrial sectors. The industry demonstrated resilience during the year, leveraging robust domestic demand and government initiatives to navigate global headwinds. India continues to strengthen its position as a competitive manufacturing base, supported by expanding capacity, improving cost competitiveness and a growing focus on higher-value segments such as speciality chemicals and pharmaceuticals.

Source: Department of Chemicals and Petrochemicals; Invest India.

Indias speciality chemicals segment remains one of the most attractive within the sector. Industry estimates place the size of the domestic speciality chemicals market at approximately US$64 billion, with growth expected in the high single to low double digits over the coming years, supported by import substitution, rising exports, the China-plus- one sourcing strategy and increasing investment in research and development. Speciality chemicals account for a significant and rising share of the overall market.

Source: Grand View Research; IMARC Group; industry estimates.

Trends

Sustained production momentum: major chemicals continue to build on their production growth, while petrochemicals, including synthetic fibres and polymers, are witnessing increased output to meet rising industrial and consumer needs.

Growing export market: chemical and petrochemical exports remain a key growth driver, supported by strong global demand for organic and speciality chemicals and by Indias competitive pricing and trade-friendly policies.

Focus on high-value segments: the industry is prioritising diversification into speciality chemicals and pharmaceuticals, with increased investment to capture global opportunities in these high-margin sectors.

Advancing sustainability: companies are adopting greener manufacturing processes and technologies, such as carbon capture, to comply with environmental regulations and meet evolving consumer expectations.

Challenges

Inverted duty structure: higher duties on raw materials than on finished products increase production costs and can make imports more competitive, particularly for speciality chemicals and petrochemicals.

Import dependency: despite strong export growth, the sector remains reliant on imported raw materials, exposing it to global supply chain disruptions and price volatility.

Global trade and geopolitical risks: geopolitical tensions, potential tariffs and anti-dumping actions create uncertainty for export markets and can disrupt supply chains.

Sustainability and regulatory compliance costs: adopting low-carbon technologies and meeting stringent environmental regulations requires significant capital investment, particularly for smaller players.

Infrastructure and funding constraints: limited funding for infrastructure and tax-related challenges can restrict capacity expansion and the ability to meet rising domestic demand.

Outlook

The Indian chemical industry is well positioned for sustained growth, driven by robust domestic demand, favourable government policies and increasing global market opportunities. Government initiatives such as the Production Linked Incentive scheme and the development of Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) continue to attract significant investment. The industrys growing focus on speciality chemicals, supported by innovation, import substitution and export potential, positions India to capture a larger share of the global market over the medium to long term. The shift towards sustainable practices, including green chemistry and circular economy principles, further strengthens Indias position in line with global trends.

Source: Invest India; Department of Chemicals and Petrochemicals.

Company Overview

Since its inception in 1984, Anupam Rasayan India Limited has established itself as a leading player in Indias speciality chemicals sector, renowned for its expertise in custom synthesis and integrated manufacturing. With over four decades of experience, the Company delivers complex, multi-step chemical solutions tailored to industries such as crop protection, pharmaceuticals, personal care, polymers and electronics, solidifying its reputation as a trusted global partner.

The Company operates eight manufacturing facilities across India and the United States, with a combined installed capacity exceeding 200,000 MT. These facilities enable the Company to address the dynamic demands of its international clients. Its commitment to innovation is driven by its DSIR-recognised R&D centres, where a team of over 90 skilled scientists advances product and process development.

The Companys operations are structured around two primary segments: Life Science-related Speciality Chemicals, which accounts for 82% of revenue and serves crop protection, personal care and pharmaceuticals; and Performance Materials, contributing 18% of revenue and serving electronic chemicals and polymers. This diversified portfolio enhances the Companys resilience and market reach. Serving a global clientele of over 185 clients, including multinational corporations, the Company is recognised by the Government of India as a three- star export house and contributes meaningfully to Indias export economy.

Positioning and Outlook

Anupam Rasayan is strategically expanding its footprint in the global speciality chemicals market through diversification, innovation and capacity growth. In FY 2025-26, the Company manufactured over 125 complex products across life sciences and performance materials, reducing reliance on any single segment. Sustainability remains a priority, supported by 27.5 MW solar and hybrid renewable energy plant. Despite ongoing agrochemical cyclicality, the Company remains well positioned to seize emerging global opportunities, supported by an increasing contribution from performance materials and pharmaceuticals, a strong product pipeline and expanding global customer engagement.

Performance Review

(Consolidated audited results, per the FY26 investor presentation and audited financial results)

Particulars ( D million)	FY26	FY25	YoY Change
Revenue from operations	23,655	14,370	65%
Total income	23,836	14,485	65%
EBITDA	5,430	4,123	32%
EBITDA margin	23%	28%	-
Profit after tax	2,222	1,600	39%
PAT margin	9%	11%	-
Earnings per share (D)	15.09	8.50	78%
Net cash from operating activities	3,343	-301	-

On a standalone basis, the Company recorded total revenue of D16,955 million (up 86%), EBITDA of D4,252 million (up 53%) and profit after tax of D1,614 million (up 122%) in FY 2025-26. Growth was driven by the commercialisation of new products, the addition of new multinational customers, improving asset utilisation and healthy traction across key business verticals. The Company delivered its highest-ever annual sales and operating cash flow during the year.

Segment Performance

The composition of the Companys business continued to diversify during the year. The agrochemical segment, which had faced a subdued demand environment in prior periods, saw a healthy revival supported by improving channel inventory levels and the gradual normalisation of global demand. The pharmaceutical and polymer businesses continued to perform strongly, driven by the ramp-up of recently commercialised molecules and the addition of new products, reflecting the Companys deliberate shift towards higher- value, technology-intensive applications. Personal care continued to contribute steadily. Demand from customers in the United States and Japan strengthened over the year, with Japan in particular emerging as a meaningful contributor to revenue.

On a standalone basis, agrochemicals accounted for 55% of revenue, pharmaceuticals 20%, performance materials 18% and personal care 7%, reflecting a more balanced and resilient portfolio than in previous years.

The Company completed the final phase of its multiyear capital expenditure programme during the year, with all major facilities now commissioned and commercialised. Having doubled its manufacturing capacity over the last three years, the Companys focus is shifting from capacity creation towards capacity utilisation, commercial execution and customer acquisition, which is expected to support operating leverage and cash generation without a significant incremental capital requirement in the near term. The acquisition of Jayhawk Fine Chemicals Corporation, which began contributing to revenue from 27 February 2026, and the proposed acquisition of a controlling stake in Bliss GVS Pharma are expected to broaden the Companys participation across the speciality chemicals and pharmaceutical value chains in the years ahead.

Internal Control and Adequacy

The Company maintains an adequate internal control system commensurate with the size, scale and complexity of its operations. Well-defined policies, processes and authority matrices support the reliability of financial reporting, the safeguarding of assets, compliance with applicable laws and the orderly conduct of business. The internal audit function reviews the effectiveness of these controls, and the Audit Committee periodically reviews audit findings and the adequacy of the control environment.

Human Resources

The Company regards its people as central to its long-term success. It focuses on attracting, developing and retaining talent through capability building, technical training, leadership development and employee well-being initiatives, while maintaining a safe and inclusive workplace. As on 31 March 2026, the Company had a committed workforce of over 2,500 employees, including contractors.

Opportunities and Threats

Opportunities include the increasing outsourcing of speciality chemistries by global innovators, the diversification of global supply chains, rising demand across pharmaceuticals, performance materials and electronic chemicals, and the Companys expanding global manufacturing footprint following the Jayhawk acquisition and the proposed Bliss GVS Pharma acquisition. Threats include agrochemical cyclicality, raw material price and supply volatility, foreign exchange fluctuation, evolving regulatory requirements and competition from established global and regional players.

Business Outlook

The Company remains optimistic about the opportunities emerging across both life sciences and performance materials. With a diversified portfolio, an expanding global footprint, deepening participation in customer value chains, a robust development pipeline and completed capacity additions, the Company is well positioned to participate in the next phase of growth. The focus in the near term is on improving asset utilisation, commercialising pipeline molecules, integrating recent acquisitions and strengthening cash generation.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward-looking within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic conditions, government regulations, tax laws and other incidental factors.

Key Financial Ratios

Ratio	Numerator and Denominator	FY25-26		FY24-25		% of variance	Reason for variance more than 25%
Current Ratio	Current Assets	28,157.95	1.29	23,332.61	1.37	-5.29%
	Current Liabilities	21,778.89		17,092.55
Debt-Equity	Total Debt	15,230.57	0.47	12,678.43	0.45	4.17%
Ratio	Shareholders Equity	32,349.52		28,050.77
Debt Service Coverage Ratio	Profit After Tax + Non Cash + Interest	4,126.19	2.96	2,655.71	2.37	24.78%
	Interest + Principal Repayments	1,392.85		1,118.58
	Profit After Tax	1,613.96	5.34%	726.74	2.62%	103.76%	Increase in return
Return on Equity Ratio	Avg. Shareholders Equity	30,200.15		27,708.14			on equity ratio is on account of higher profitability during the year.
Inventory	Sales	16,755.67	1.22	8,958.99	0.76	59.39%	Increase in Inventory
Turnover Ratio	Average Inventory	13,763.13		11,729.59			Turnover ratio is on account of higher Sales during the year.
Trade	Net Sales	16,755.67	2.13	8,958.99	1.50	42.38%	Increase in Trade
Receivables Turnover Ratio	Avg. Receivables	7,860.11		5,983.70			Receivables Turnover ratio is on account of higher Net Sales during the year.
Trade Payables Turnover Ratio	Net Purchases	9,864.87	1.40	6,837.89	1.46	-4.21%
	Avg. Trade Payables	7,065.45		4,691.07
Net Capital	Net Sales	16,755.67	2.63	8,958.99	1.44	82.98%	Increase in Net Capital
Turnover Ratio	Current Assets - Current Liabilities	6,379.06		6,240.91			Turnover Ratio is on account of higher Net Sales during the year.
Net Profit	Net Profit	1,613.96	9.63%	726.74	8.11%	18.74%
Ratio	Net Sales	16,755.67		8,958.99
Return on	Earnings Before Interest and Tax	3,103.64	6.44%	1,877.64	4.52%	42.51%	Increase in Return on Capital Employed is
Capital Employed	Tangible Net Worth + Total Debt + Deferred Tax Liability	48,213.45		41,568.32			on account of higher profitability during the year.
	Other Income	84.75	10.17%	87.64	5.16%	96.94%	Increase in return on
Return on Investment	Average Cash, Cash Equivalents & Other Marketable Securities	833.36		1,697.08			investments ratio is on account of reduction in the average cash, cash equivalents and other marketable securities during the year.