Archit Organosys Ltd Management Discussions

Industry Structure and Developments:

The Company is primarily engaged in the business of manufacturing and selling of various chemical products. The production of chemicals (which includes alkali chemicals, inorganic chemicals, organic chemicals, pesticides and insecticides, dyes and dyestu ) has increased at a Compound Annual Growth Rate (CAGR) continuously. The chemical industry of India is a major industry in the Indian economy and, contributes 7% of the Countrys Gross Domestic Product (GDP). Globally, India is the fourth largest producer of agrochemicals after the United States, Japan and China. India accounts for 16-18% of the world production of dyestu s and dye intermediates. Indias chemical industry continues to be a global powerhouse, with the sector projected to grow from $220 billion in 2022 to $300 billion by 2025, driven by strong domestic demand, export opportunities, and strategic policy support

Specialty Chemicals Boom: Specialty chemicals like MCA and its derivatives are seeing double-digit growth, with Indias specialty chemicals market expected to grow at a CAGR of 11 12% through 2027.

Agrochemical Demand: Rising agricultural output and demand for herbicides are boosting MCA and SMCA consumption. Pharma Expansion: Indias pharmaceutical sector is expanding rapidly, increasing demand for intermediates like TCAC. Export Opportunities: With global companies diversifying away from China, Indian manufacturers are gaining traction in international markets

FDI In ows: The chemical sector attracted 1.42 lakh crore (~$23.2 billion) in FDI during FY 2024 25.

Government Support: PLI schemes and infrastructure projects like PCPIRs (Petroleum, Chemicals and Petrochemicals Investment Regions) are catalyzing growth

The Company has the capacity to withstand in the market and face the sti competition prevailing in the chemical business market.

Environmental Regulations: Chlorinated compounds face stricter environmental scrutiny, requiring cleaner technologies.

Raw Material Volatility: Prices of chlorine and acetic acid, key inputs, remain volatile.

Outlook: Despite challenges, the MCA-SMCA-CAC-TCAC segment is poised for steady growth, especially in export-driven and pharma-linked applications.

Segment Reporting as de ned in Ind AS 108 is not applicable, since the Company operates in only one segment.

The Company expects to increase its market share in the existing market by various scheme, especially in pharma industry, expanding its geographical coverage in more regions and undertaking large job contracts. We are cautiously optimistic of our prospects and believe that the year will go a long way in stabilizing our growth path. The Company also puts more e orts in R & D activities, reduction in process cycles, and improvement in existing process etc. The company is also diversifying in to pharma line, by importing bulk drugs and marketing in local market. Our Company has a well-established market of its own. The Directors are actively connected with the customers. Major customers of the Company include several large Indian and International companies who are engaged in the Agrochemical Manufacturing Sector, Pharmaceuticals Manufacturing Sector and Cosmetics Manufacturing Sector.

Company has developed various product like MCA, SMCA, CAC and TCAC. Company is selling their products across Pan India as well as USA, Europe, Latin America, Other Asian Countries and South Africa.

Our products nd their uses mainly in pharmaceutical Intermediates like Ibuprofen, Diclofenac, Aceclofenac, Oil eld chemicals used for Oil Drilling mainly In CMC manufacturing, Agriculture eld product majorly 2,4 D-Acid and many others, surfactants and cosmetic products as well as day to day personal use products, also used in Pigment.

Company is facing competition from various small-scale manufacturers in certain products. Manufacturing cost and administrative costs are also increasing day by day. But Company is equipped to meet the challenges by better marketing tactics and e ective management of cost and expenses.

The Company is also required to follow and maintain the norms laid down by Gujarat Pollution Control Board (GPCB) for discharge of its e uents. The Company is adhering to the norms laid down by GPCB and has spent a large amount of funds on changing the old machinery and erecting new machines which adhere to the new stringent laws of GPCB.

The Company has an adequate system of Internal Control relating to purchase of stores, raw materials, plant & machineries, equipments & various components and for the sale of goods commensurate with the size and nature of business of the Company.

The system of Internal Control of the Company is adequate keeping in mind the size and complexity of your Companys business. Systems are regularly reviewed to ensure e ectiveness.

Details of Key Financial Ratios are given below:

The Chemical industry is knowledge driven, considering this aspect we continue to build our team with high quality talent. The Company is putting thrust on providing training both in-house and outside. The key personnel are technically quali ed and fully trained to run chemical plants.

The Company 51 employees employed as on closure of Financial Year, The Company maintains cordial & harmonious relation with its employees.

In the preparation of nancial statements, there is no treatment di erent from that prescribed in an Accounting Standard has been followed during nancial year under review.