Balaji Amines Ltd Management Discussions

Global Economy

Tenuous Resilience

Overview

The global economy demonstrated resilience in 2025, achieving an estimated real GDP growth of 3.4%, according to the International Monetary Fund (IMF) World Economic Outlook. This performance was broadly in line with, or slightly above, earlier projections, supported by strong technology-related investments (especially in artificial intelligence), fiscal and monetary policy support in key sectors, accommodative financial conditions in parts of the world, and private sector adaptability amid shifting trade policies. Crude oil prices, while relatively volatile due to geopolitical developments and supply-side concerns, remained broadly manageable during much of the year towards the end of FY26 and continued to influence inflation and trade dynamics across major economies.

Advanced economies grew at approximately 1.9% in 2025, while emerging market and developing economies (EMDEs) which continued to drive the majority of global expansion, posted stronger growth of 4.4%. Global headline inflation moderated to an estimated 4.1% in 2025, continuing its trajectory from prior years, though across regions. Infiation remained higher in some EMDEs and showed persistence in the United States. This trend enabled several central banks to maintain or gradually ease monetary policy, thereby supporting financial conditions.

International trade volumes (goods and services) expanded by 5.1% in 2025, reflecting front-loading of activity in response to trade policy changes, and reorientation of supply chains. However, rising protectionism led to shifts in trade patterns including, changes in US–China flows US- Global trade scenarios and increased routing through alternative regions such as Asian and other Global partners.

Risks to the 2025 outturn and near-term outlook were two-sided but increasingly tilted towards the downside by year-end, particularly with emerging geopolitical developments. Key concerns included escalation of trade tensions, renewed tari_ measures and protectionist policies by the United States, reassessment of AI-driven productivity gains, and rising commodity and crude oil price pressures across the region. Ongoing conflicts in the Middle East, including the US-Iran, Israel–Hamas war and broader regional instability, added uncertainty to global energy markets and disruptions in supply chains.

Outlook

The IMFs April 2026 update introduced a more cautious outlook for the global economy, highlighting rising downside risks. Global growth projections for 2026 have been revised downward to approximately 3.1%, with emerging market growth expectations also moderated to around 3.9%. These revisions are primarily attributed to escalating geopolitical tensions, particularly those impacting energy markets, as well as continued uncertainty in global trade and financial conditions. The evolving macroeconomic landscape underscores how sensitive global growth remains to external shocks.

https://www.imf.org/en/publications/weo/issues/2026/04/14/world-economic-outlook-april-2026 https://www.imf.org/en/publications/weo/issues/2026/01/19/world-economic-outlook-update-january-2026 https://www.reuters.com/business/imf-cuts-growth-outlook-warns-potential-global-recession-if-iran-war-worsens-2026-04-14/

Overview

The Indian economy delivered a robust performance during the FY26, emerging as one of the fastest-growing major economies globally. According to the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation, the Second Advance Estimates placed real GDP growth at 7.6%, an upward revision from the First Advance Estimates of 7.4%, and significantly higher than the 6.5% recorded in FY25. Nominal GDP growth was estimated at 8.6%, with real Gross Value Added (GVA) also expanding at 7.6%. These figures underscore sustained momentum driven by strong domestic demand, policy support, and structural reforms, even as global headwinds persisted.

Key sectoral drivers included buoyant services activity (real estate), which remained a major contributor to GVA growth. Agriculture benefited from healthy foodgrain production (estimated at 3,577.3 Lakh metric tonnes in FY25, up substantially year-on-year), supported by favourable monsoons and healthy reservoir levels. Manufacturing and industry showed steady improvement on the back of capacity utilisation gains, private investment revival, and government capital expenditure. Private consumption and investment continued to anchor growth, with Gross Fixed Capital Formation maintaining a healthy share of GDP.

Infiation moderated sharply and remained benign throughout FY26, providing a supportive backdrop for monetary policy and household spending. Stable food prices and stable core inflation helped maintain favourable economic conditions, while easing price pressures supported consumption and overall economic momentum.

Industrial activity remained healthy during FY26, supported by improved domestic demand, infrastructure creation, and policy-led manufacturing initiatives. The Index of Industrial Production (IIP) recorded steady growth across key sectors, particularly manufacturing, electricity, and capital goods, reflecting continued momentum in economic activity and capacity utilisation.

India also strengthened its focus on sustainability and green manufacturing. Government initiatives promoting renewable energy adoption, energy efficiency, electric mobility, green hydrogen, and sustainable infusion of capital for infrastructure building continued to gain

Outlook

Challenges during the FY26 were well-contained, though the broader outlook incorporates global factors such as geopolitical tensions (including developments in West Asia) and trade policy shifts. Domestic bu_ers, strong corporate and bank balance sheets, ongoing reforms, infrastructure push, and digital public infrastructure helped mitigate these challenges. The Economic Survey FY26 assessed Indias potential growth at around 7%, with real GDP growth for FY27 projected in the range of 6.8–7.2%, supported by capital accumulation, labour formalisation, and total factor productivity gains.

https://www.indiabudget.gov.in/economicsurvey/doc/Infographics%20English.pdf https://www.mospi.gov.in/uploads/latestReleases/latestfirelease_1768213461321_53cd35fd-1bbc-4b43-b92d-8fb67474ee74_Press_Release_of_CPI_for_December_2025.pdf https://prsindia.org/files/budget/budget_parliament/2026/Union_Budget_Analysis-2026-27.pdf https://www.icicipruamc.com/blob/emailmedia/mutualfund/Union%20Budget%202026-27-1.pdf https://economictimes.indiatimes.com/news/economy/indicators/rbi-gdp-growth-fy-2026-27-mpc-meeting-gdp-forecast-india-eases-growth-forecast-as-iran-war-oil-surge-risks-cloud-growth-trajectory/articleshow/130091660.cms?from=mdr https://www.mospi.gov.in/uploads/latestReleases/latestfirelease_1772189865181_f040336d-bc57-4aed-b80f-586d9ccb279e_Press_Note_on_New_Series_of_GDP_Estimates_with_ Base_Year_2022-23_27022026.pdf https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219907&reg=3&lang=2

Speciality Chemicals

Speciality chemicals are high-performance, application-specific chemicals designed to deliver targeted functionalities across industries such as pharmaceuticals, agrochemicals, personal care, water treatment, and construction. Unlike commodity chemicals, they are produced in dedicated, specialised, high technology plants and play a critical role in enhancing product performance, improving efficiency, and driving innovation across industrial and manufacturing ecosystems.

Global Speciality Chemical Industry

Steady Growth in a High-Value, Innovation-Led Market

Overview

The global speciality chemicals industry exhibited steady resilience in 2025, underpinned by sustained demand from high-value, performance-driven applications across key end-use sectors. According to Grand View Research, the global speciality chemicals market size was estimated at USD 1.02 trillion in 2025, with a projected expansion to USD 1.07 trillion in 2026 and further to USD 1.53 trillion by 2033, reflecting a CAGR of 5.2% from 2026-2033. This performance highlighted the segments relative stability compared to broader commodity chemical markets, driven by innovation, customisation, and its critical role in enhancing product quality, functionality and usability.

Regional dynamics in 2025 showed that Asia Pacific dominated the market with the largest revenue share of 33.0%, fuelled by rapid industrialisation, urban development, infrastructure projects, and strong demand from construction, automotive, electronics, and agriculture sectors. Within Asia Pacific, China accounted for a significant 38.9% revenue share. Europe emerged as the fastest-growing region over the forecast period with a projected CAGR of 5.8%, supported by stringent regulatory frameworks and a strong emphasis on sustainability and high-performance solutions. North America continued to benefit from advanced manufacturing capabilities, technological innovation, and demand for sustainable chemistries.

Major growth drivers in 2025 encompassed rising demand from end-use industries such as construction, automotive, personal care, electronics, pharmaceuticals, and agriculture/agro-processing. Speciality chemicals play an essential role in improving performance attributes while meeting evolving consumer and regulatory expectations.

Additional tailwinds included accelerating urbanisation and infrastructure development in emerging economies, along with a global shift towards eco-friendly, bio-based, and high-performance sectors.

Key trends shaping the industry involved heightened investment in R&D for innovative and sustainable solutions, regulatory-driven transitions toward lower environmental impact products, and opportunities arising from industrialisation in key markets like India, China, and Brazil. The market remained moderately fragmented, with competition among global majors and agile regional players, encouraging differentiation through customisation and green chemistry.

Challenges included stringent government regulations aimed at minimising environmental footprints, raw material cost volatility, and the need for continuous innovation to counter potential commoditisation in certain sub-segments.

Outlook

Looking ahead, the global speciality chemicals industry is poised for sustained expansion through 2033 at a steady 5.2% CAGR, reaching USD 1.53 trillion, supported by ongoing sustained growth drivers in emerging markets, rising demand for high-performance and sustainable solutions, and technological advancements across end-use sectors. Asia Pacific is expected to maintain its leadership, while Europes faster growth trajectory will be driven by regulatory emphasis on green chemistry and innovation.

https://www.grandviewresearch.com/industry-analysis/speciality-chemicals-market https://www.prnewswire.com/news-releases/speciality-chemicals-industry-statistics--trends-soon-to-be-a-us-1-trillion-market-by-2025-horizon-databook-by-grand-view-research-inc-302181510.html https://www.globenewswire.com/news-release/2025/12/18/3207546/0/en/ Speciality-Chemicals-Market-Size-to-Surpass-USD-1-37-Trillion-by-2035-Amid-Sustainability-and-EV-Driven-Demand.html https://www.fortunebusinessinsights.com/speciality-chemicals-market-105517 https://www.mckinsey.com/industries/chemicals/our-insights/global-chemical-industry-trends

Indian Speciality Chemical Industry

Strong Structural Growth

Overview

The Indian speciality chemicals industry sustained steady growth momentum in FY26, supported by strong domestic consumption, resilient exports, and Indias increasing integration into global supply chains. According to IMARC Group, the market reached approximately USD 67.0 billion in 2025, with projections indicating expansion to USD 93.4 billion by 2034 at a CAGR of 3.65% (2026–2034). This performance underscored the segments relative resilience compared to commodity chemicals, driven by its focus on high-value, application-specific products with lower cyclicality.

Speciality chemicals continued to gain share within Indias overall chemical industry, supported by superior margins and demand stability amid global headwinds such as overcapacity and trade fragmentation. Capacity utilisation across key sub-segments remained steady at 60–75%, even as incremental capacities were gradually being absorbed.

Growth during the year was anchored by robust demand across core end-use industries, including pharmaceuticals, agrochemicals, construction, automotive, electronics, personal care, and textiles, alongside ongoing urbanisation, infrastructure development, and industrial expansion. Innovation-led trends such as sustainability-focused formulations and advancements in R&D further supported value-added product development.

Government Initiatives

The Government of India continued to position the chemicals sector as a key pillar of industrial growth. In the Union Budget FY27, a new scheme was announced to establish three dedicated Chemical Parks through a challenge-based selection mechanism, with an allocation of I600 crore marking the first instance of targeted budgetary support for chemical park infrastructure. This initiative is expected to enhance domestic manufacturing capabilities, improve supply-chain integration, and reduce import dependence.

Support also continued through the Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIR) Policy 2020–35, targeting cumulative investments of I10 trillion by 2025, with a roadmap to scale up to I20 trillion by 2035. Established PCPIRs in Gujarat (Dahej), Andhra Pradesh (Visakhapatnam), and Odisha (Paradeep) provided integrated infrastructure and logistics for cluster-based development.

Additionally, the Production Linked Incentive (PLI) scheme for critical KSMs, drug intermediates, and APIs remained instrumental in strengthening domestic value chains in the pharma sector relevant to speciality chemicals. Complementary measures such as 100% FDI under the automatic route (except hazardous chemicals), Make in India, Plastic Parks, and Centres of Excellence for polymers further reinforced the ecosystem, alongside policy guidance on green chemistry and downstream value addition.

Opportunities

The industry continued to benefit from global supply-chain realignments, creating opportunities for India to expand its presence in high-value export segments such as pharmaceutical intermediates, agrochemicals, dyes & pigments, and performance chemicals. Strong cost competitiveness, a skilled workforce, and improving infrastructure supported this transition.

Sustainability emerged as a key growth driver, with rising demand for green solvents, biodegradable surfactants, bio-based polymers, and eco-friendly formulations. Indias green chemicals market is projected to exceed USD 15 billion by 2027, growing at over 10% CAGR, supported by regulatory momentum and evolving customer preferences.

Additional tailwinds included infrastructure-led demand, expanding manufacturing activity, and the potential to reduce Indias chemicals trade deficit over the medium term. Cluster-based development through Chemical Parks and PCPIRs is expected to enhance scale efficiencies and innovation capabilities, while ongoing investments, strategic collaborations, and consolidation opportunities continue to provide scope for industry expansion.

At the same time, challenges such as raw material price volatility, environmental compliance requirements, feedstock constraints, and competitive pressures from global overcapacity persisted. However, Indian manufacturers continued to leverage cost efficiencies, process innovation, and a diversified end-market presence to maintain competitiveness.

Outlook

The Indian speciality chemicals industry is expected to maintain a stable growth trajectory, supported by structural demand drivers, policy support, and increasing participation in global value chains. With the market projected to reach USD 93.4 billion by 2034, growth opportunities are likely to remain concentrated in high-value segments such as pharmaceutical intermediates, agrochemicals, construction chemicals, and sustainable solutions.

https://www.imarcgroup.com/india-speciality-chemicals-market https://niti.gov.in/sites/default/files/2025-07/NI-TI-Aayog-Chemical-industry-report.pdf https://pharma-dept.gov.in/schemes/production-linked-incentive-pli-scheme-promotion-domestic-manufacturing-critical-key https://assets.kpmg.com/content/dam/kpmg/in/ pdf/2022/11/Speciality-Chemicals-industry-India.pdf https://www.ibef.org/industry/chemical-industry-india https://www.indianchemicalnews.com/policy/chemical-parks-strengthening-indias-chemical-manufacturing-29298

Indian Aliphatic Amines Space

The Indian Aliphatic Amines sector forms a vital niche within the speciality chemicals industry, supplying critical intermediates for pharmaceuticals, agrochemicals, water treatment, personal care, solvents, and other industrial applications. Amines serve as fundamental building blocks in chemical synthesis, making them indispensable to industrial manufacturing and downstream value addition. Aliphatic amines and their derivatives dominate domestic production, with end-use consumption globally (and mirrored in India) skewed heavily toward pharmaceuticals (61%) and agrochemicals (26%).

India benefits from cost-competitive manufacturing, indigenous technology development (particularly in Ethylamines, methylamines and their derivatives), and strong export orientation, with 45–55% of amine-related export revenues traditionally directed to Europe, followed by other regions. The sector operates in an oligopolistic global structure, where the top six players control around 50% of capacities, and China accounts for 60% of worldwide production.

About the Company

Balaji Amines Limited, established in 1988 and headquartered in Solapur, Maharashtra, is one of Indias leading manufacturers of aliphatic amines, amines & derivatives, speciality chemicals etc., The Company commenced operations with the production of methylamines and has since evolved into a diversified chemical manufacturer with a strong presence across amines, derivatives, speciality chemicals, and pharma excipients.

Over the years, Balaji Amines has built a robust and integrated manufacturing platform, supported by state-of-the-art facilities in Maharashtra and Telangana. Its operations are characterised by process innovation, cost efficiency, and backward integration, enabling the Company to maintain competitive positioning in a technically complex and capital-intensive industry. The Company has also developed indigenous technology capabilities in amine manufacturing, a domain typically dominated by a limited number of global players.

The Company offers a diverse product portfolio, including methylamines, ethylamines, and a wide range of downstream derivatives such as Dimethyl Amine

Hydrochloride (DMA-HCl), choline chloride, morpholine, and various speciality chemicals. These products cater to a broad spectrum of end-use industries, including pharmaceuticals, agrochemicals, water treatment, personal care, rubber chemicals, and coatings, ensuring diversified revenue streams and demand resilience.

It has established a strong global presence, with its products meeting stringent international quality standards and being exported to multiple countries across North America, Europe, Asia, and other regions. Its focus on quality is reinforced by internationally recognised certifications, including ISO 9001, ISO 14001, and ISO 45001, reflecting its commitment to operational excellence, environmental responsibility, and workplace safety.

Balaji Amines growth strategy is anchored in continuous capacity expansion, value chain integration, and increasing share of high-value speciality products. With a strong emphasis on research and development, the Company continues to enhance its product offerings and improve process efficiencies, positioning itself to capitalise on emerging opportunities in the global speciality chemicals and amines market.

Financial Performance (Consolidated)

Internal Control Systems and their Adequacy

The Board of Directors has strong confidence in the Companys internal control framework, which is designed to support all operational areas through a structured and disciplined approach. Business processes are continuously evaluated to identify risks, enhance efficiency, and ensure compliance with applicable laws and regulations.

The Companys ERP and management information systems (MIS) are closely monitored to maintain the accuracy and integrity of financial reporting. Regular reviews by the Internal Auditor and Cost Auditor further strengthen the control environment, with their observations and recommendations presented to the Audit Committee and the Board, ensuring ongoing compliance and adherence to internal control standards.