Best Agrolife Ltd Management Discussions

Management Discussion and Analysis Report

Economic overview

GLOBAL ECONOMY

Global economic growth is projected to reach 3.0% in 2025, rising modestly to 3.1% in 2026. These estimates represent slight upward revisions from earlier projections, reflecting a combination of factors including faster-than-anticipated adjustments to trade expectations, lower-than-expected effective US tariffs, improved financial conditions supported by a softer US dollar, and fiscal expansion across key economies.

Headline inflation worldwide is expected to ease to 4.2% in 2025 and 3.6% in 2026. However, this overall trend conceals significant regional disparities. While inflation is likely to stay elevated in the United States, it is expected to remain relatively subdued in several other major economies.

Despite the moderate improvements, downside risks persist. Potential increases in tariff rates, unresolved trade tensions, and geopolitical uncertainties could disrupt global supply chains and fuel commodity price volatility. Moreover, heightened fiscal imbalances or rising risk aversion could tighten global financial markets by pushing up long-term interest rates. Concerns around economic fragmentation and lack of structural reform progress may further amplify financial market volatility.

However, on the upside, if ongoing trade negotiations yield a more stable and transparent policy framework, global growth may see additional support. Restoring investor confidence, ensuring financial and price stability, rebuilding fiscal buffers, and committing to structural reforms remain key policy imperatives.

Volatility has remained elevated, though some short-term relief has emerged. The temporary 90-day suspension of certain US-China tariffs, alongside a delay in broader US tariff hikes, has marginally improved sentiment. Nonetheless, ongoing legal disputes and uncertainty over longer-term fiscal paths in the US continue to cast a shadow on global economic stability.

Source: IMF - World economic outlook - July2025

INDIAN ECONOMY

Indias economic outlook for FY26 is shaped by a complex interplay of global uncertainties and strong domestic fundamentals. Despite concerns arising from a marginal moderation in GDP growth, estimated at 6.2% for FY25, broader indicators point to underlying economic resilience.

Growth comparisons with the previous two fiscal years may suggest a slowdown; however, recent upward revisions to GDP figures for earlier periods present a more balanced view. Notably, FY24 growth was revised upward to 9.2%, marking the strongest pace in over a decade (excluding the postpandemic rebound). These adjustments reinforce confidence in the robustness of Indias domestic consumption, which continues to be a major pillar of growth.

Temporary headwinds in FY25, such as election-related uncertainty, erratic monsoon patterns in the initial quarters, and disruptions across global trade channels, have impacted sentiment and sectoral performance. However, these influences are largely transient and should ease as stability returns in both domestic and global policy environments.

On the positive side, several macroeconomic enablers are expected to drive growth in FY26. Tax incentives announced in the Union Budget are likely to stimulate consumption and investment activity, potentially adding 0.6% to 0.7% to the GDP. Add to that, lower inflation, favourable borrowing costs, range-bound crude oil prices, and improved liquidity conditions are likely to support broad-based recovery across sectors.

At the same time, external risks remain. India continues to navigate evolving trade dynamics, particularly with the United States. Current tariff structures on Indian exports, if intensified, could marginally dampen growth, shaving off an estimated 0.1% to 0.3% from the projected trajectory.

Balancing these two sets of forces, Indias growth forecast for FY26 stands in the range of 6.5% to 6.7%. Recent high- frequency indicators such as GST collections, automotive sales, and FMCG demand suggest a healthy underlying momentum in the economy.

In summary, India remains well positioned to sustain its growth momentum amid a changing global economic landscape.

With a proactive policy framework, stable macroeconomic fundamentals, and a resilient consumption base, the country is expected to maintain its path towards long-term economic transformation.

Industry overview

GLOBAL AGROCHEMICALS MARKET

The global agrochemicals market continues to demonstrate steady growth, with the market size estimated at US$ 223.03 billion in 2024. It is projected to rise to US$ 230.61 billion in 2025 and further expand to US$ 301.34 billion by 2033, reflecting a CAGR of 3.4% during the forecast period (2025-2033). This growth trajectory highlights the pivotal role agrochemicals play in ensuring food security and supporting modern agriculture amid mounting global challenges.

Agrochemicals, comprising fertilisers, pesticides, herbicides, and bio-stimulants, serve as essential inputs in enhancing crop yield, protecting against pests and weeds, and enriching soil quality. With the global population continuing to expand and arable land becoming increasingly scarce due to rapid urbanisation and climate stress, the need to intensify agricultural productivity is more critical than ever. Agrochemicals remain a cornerstone in helping farmers optimise production and maintain soil vitality, thereby improving both the quality and quantity of food output.

The markets momentum is primarily driven by several structural factors. These include rising global food demand, degradation of cultivable land, increased awareness among growers about crop protection solutions, and technological advancements in farming techniques. Emerging economies, in particular, are witnessing a surge in agrochemical consumption due to increased agricultural trade, the influx of new pests and pathogens, and a greater need for high-yield practices to sustain growing populations. As farming evolves in these regions, there is a noticeable shift toward the use of advanced crop protection chemicals and fertilisers.

Government support in the form of subsidies, tax incentives, and rural development programmes has further bolstered agrochemical demand. Countries with agriculture-led economies are focusing on improving farm productivity, especially in cash crops, which inherently rely on agrochemical usage. These interventions are expected to contribute significantly to the growth of the global agrochemicals market in the near to medium term.

However, the sector also faces key challenges. The increasing popularity of organic and natural farming practices, coupled with rising concerns about chemical residue in food and environmental impact, is leading to a growing preference for bio-based solutions. Stringent regulations, especially in developed markets, and the adverse ecological effects of synthetic chemicals, including groundwater contamination and soil toxicity, may act as restraints on the markets expansion.

Yet, these very challenges are catalysing a wave of innovation. The emergence of bio-fertilisers and eco-friendly pesticides, supported by rigorous research and development by agricultural and chemical companies, is redefining the future of crop protection. The integration of biotechnology in agrochemical manufacturing and the development of safer, more targeted active ingredients are expected to open new avenues of growth. As farmers increasingly seek high- performance, sustainable inputs, companies investing in differentiated, next-generation agrochemical products are likely to gain a competitive edge.

In summary, while the global agrochemicals market operates in a landscape of evolving regulations and consumer preferences, it remains fundamentally strong. With rising food demand, declining arable land, and increasing pressure to enhance yield per hectare, the sector is expected to continue playing an indispensable role in securing global food systems. For innovative and forward-looking companies, the market presents both opportunities and imperatives for transformation, sustainability, and growth.

Source: https://straitsresearch.com/report/agrochemical-market

INDIAN AGROCHEMICALS MARKET

Indias agrochemicals sector continues to be a cornerstone of the nations agricultural transformation, driven by the dual imperatives of enhancing productivity and ensuring food security. Valued at approximately USD 15.5 billion in 2024, the Indian agrochemicals market is poised for sustained expansion, with projections indicating a growth to USD 23.3 billion by 2033, at a CAGR of 4.28% during 2025-2033.

This upward trajectory reflects the sectors central role in advancing Indias agricultural competitiveness and supporting the nutritional needs of a growing population.

Agrochemicals, encompassing fertilisers, pesticides, herbicides, and other plant protection chemicals, are indispensable to modern agriculture, enabling farmers to improve crop yields, protect harvests from pests and diseases, and maintain soil health. Fertilisers supply essential nutrients such as nitrogen, phosphorus, and potassium, while crop protection chemicals safeguard plants against weeds and pests that could otherwise cause substantial damage and reduce yield potential.

The sector is currently experiencing a paradigm shift as it embraces more sustainable, targeted, and technologically advanced solutions. Innovations such as precision farming, genetically modified organisms (GMOs), and improved agrochemical formulations are reshaping farming practices, enabling more efficient and environmentally conscious applications. While the growing use of agrochemicals has brought undeniable benefits in yield enhancement and food supply stability, it has also raised concerns over ecological and human health impacts, prompting an industry-wide focus on safer, greener alternatives and more responsible usage patterns.

Multiple structural trends are fuelling this transformation.

Indias rising population and increasing food consumption are intensifying the demand for high-output, resource-efficient agriculture. At the same time, heightened awareness among farmers about the economic advantages of agrochemical usage, such as improved crop quality, lower post-harvest losses, and greater income stability, is accelerating adoption across rural India. The emergence of biopesticides and organic crop protection solutions further reflects a gradual shift towards sustainable agriculture, where ecological balance and productivity go hand in hand.

Government initiatives remain a key catalyst for growth. Policy frameworks such asMake in India are encouraging domestic manufacturing of agrochemical inputs, reducing reliance on imports, and streamlining regulatory processes. Financial incentives, input subsidies, and support for modernisation through digital agriculture, drones, and ultra-low-volume formulations are also driving market expansion.

Among crop protection segments, herbicides continue to hold a significant share due to their efficiency in weed management and labour cost savings, particularly important in labour-scarce regions. The export of Indian agrochemical products, particularly herbicides, is expected to stabilise and grow gradually, despite recent headwinds from global inventory corrections and competitive pricing from China. Indias strength in manufacturing generics such as glyphosate, atrazine, glufosinate, and chlorantraniliprole further supports this global footprint.

Technological progress is enhancing the efficiency and efficacy of agrochemical applications. The rise of precision farming and drone-assisted spraying is shifting demand towards high-performance, ultra-low-volume concentrates and adjuvants. These innovations are particularly aligned with sustainable farming goals and offer significant potential for optimising input use.

The market is also being shaped by regional dynamics. Cereal and grain crops, including rice, wheat, and maize, remain the primary consumers of agrochemicals in India. Consequently, demand for crop protection products and fertilisers remains strong in major agricultural states. As climate variability, soil degradation, and water scarcity persist as challenges, the role of science-led agrochemical solutions becomes even more critical.

Despite the promising outlook, the industry must navigate several headwinds. These include rising raw material costs, evolving regulatory norms, concerns over environmental impact, and the need for dependable contract manufacturing ecosystems. Addressing these challenges will require sustained investment in R&D, a focus on innovation, and proactive engagement with regulators and farming communities.

In conclusion, the Indian agrochemicals market stands at a critical juncture, balancing high-growth potential with an urgent need for sustainability. The transition to smarter, safer, and more efficient inputs is underway, and companies that embrace this change with agility and foresight will be well- positioned to lead the next wave of agricultural evolution in India.

Source: https://www.imarcgroup.com/india-agrochemicals-market

Company overview

Best Agrolife Limited (BAL) is one of Indias fastest-growing agrochemical companies, committed to transforming agriculture through science-driven innovation and sustainable crop protection solutions. As a research-led enterprise with a growing portfolio of patented and branded products, we operate across the entire value chain, from manufacturing technicals and formulations to delivering farmer-ready branded solutions.

With four state-of-the-art manufacturing units, a strong distribution network across 21 Indian states, and an expanding footprint in over 90 international markets, we are well-positioned to address the evolving needs of modern agriculture. Ourstrength lies in our deep understanding of crop challenges, robust R&D capabilities, IP-driven product development, and our ability to scale solutions that enhance farm productivity while ensuring environmental responsibility.

Recognised as the 13th largest agrochemical company in India, we continue to focus on driving value through operational excellence, responsible innovation, and deep engagement with the farming community. Our aim is to empower agriculture and enrich lives, responsibly, sustainably, and strategically.

Financial overview

FY25 was a year of strategic recalibration and operational discipline at Best Agrolife Limited. Amidst a challenging agrochemical landscape marked by pricing pressures and evolving market dynamics, we remained resolute in our commitment to building a more resilient, efficient and future-ready business. While revenue from operations stood marginally lower at Rs.1,814 crore, the year was defined less by top-line growth and more by decisive internal reforms aimed at fortifying our long-term fundamentals.

We focused sharply on improving working capital efficiency, streamlining inventory, enhancing liquidity, and strengthening our balance sheet. A significant reduction in inventory and borrowings, coupled with a fivefold surge in operating cash flows, reflects the success of our financial discipline. Profitability metrics, including EBITDA and PAT, adjusted in line with our strategic shift toward sustainable branded sales and realignment of our product mix.

Key structural reforms, such as geographic brand restructuring and targeted sales team realignment, helped us sharpen our go-to-market capabilities, drive demand-led growth, and reduce sales returns. Our capital investments in technical manufacturing expansion further reinforce our readiness to meet future demand and scale more efficiently.

FY25 may not have been a year of headline growth, but it was a year of grounded execution and prudent transformation.

The financial indicators reflect a company building strength from within, sowing with intention to reap resilient, sustainable arowth in the vears ahead.

Key financial ratios

Key financial ratios	Year Ended 311 March 2025	Year Ended 311 March 20241	% Variance	Reason for variance
a. Current ratio	1.53%	1.21	26.44%	The increase in current ratio is due to better management of working capital during the year.
b. Debt-equity ratio	0.56	0.94	-40.35%	The decline in debt-to-equity ratio is due to better working capital management, leading to reduced external borrowing.
c. Debt service coverage ratio	1.12	1.08	3.59%	The increase is mainly due to better cash flow and improved working capital.
d. Return on equity	0.12	0.04	210.35%	The increase is on account of higher net profits, mainly attributable to improved gross profit margins during the year.
e. Inventory turnover Ratio	2.59	4.60	-43.70%	Decrease is mainly due to lower sales during the year, leading to slower movement of goods and higher stock levels.
f. Trade receivables turnover ratio	3.53	5.72	-38.38%	Decrease in trade receivables turnover ratio reflects extended credit terms and a slight dip in sales volume, resulting in slower collections during the year
g. Trade payables turnover ratio	2.74	5.60	-51.06%	Decline is primarily due to reduced purchase volumes and extended payment cycles, reflecting efficient cash flow management during the year
h. Net capital turnover ratio	4.14	11.02	-62.38%	Decrease is mainly due to lower sales and purchase volumes during the year, leading to less efficient use of capital employed.
i. Net profit ratio	5.32%	1.06%	401.32%	Increase is mainly driven by improved gross margins and better control over operating expenses, leading to stronger overall profitability
j. Return on capital employed	14.81%	8.81%	68.14%	Increase is mainly due to higher net profits earned during the year, resulting in better returns on capital employed.
k. Return on investment"				-NA

Outlook

As we look to the future, we remain confident in our growth trajectory despite the headwinds currently impacting the agrochemical sector. The strategic initiatives and prudent investments undertaken in FY25 are expected to yield meaningful results in the coming years, reinforcing our longterm value creation agenda.

With a robust pipeline of innovative products under development, we are well-positioned to strengthen our market leadership. The upcoming launches of differentiated crop protection solutions in FY26, such as Shot Down, Best Man, Fetagen, and Cubax Power Extra, are set to not only expand our portfolio but also enhance our market share across key regions.

Our sustainability-led approach continues to gain momentum, exemplified by the commissioning of a 3 MW solar power plant at our Gajraula facility. This move emphasises our alignment with global imperatives of environmental responsibility and positions us favourably in an increasingly climate-conscious agri-inputs ecosystem.

Simultaneously, our presence in over 90 export markets and our commitment to product registration in key geographies underscore the significant strides we are making towards becoming a globally recognised player. As global supply chains recalibrate in favour of diversification under theChina plus One strategy, our expanding manufacturing capacities, technical capabilities, and backward integration place us in an advantageous position to meet emerging global demand.

While we remain mindful of ongoing challenges such as margin pressures, regulatory complexities, and market volatility, our sharpened focus on innovation, sustainability, farmer-centric solutions, and brand equity will continue to guide our strategic direction. Investments in R&D, selective acquisitions, and manufacturing scale-ups have created a strong springboard for future expansion.

In summary, Best Agrolife is equipped with the right levers to navigate a complex operating environment and emerge stronger. Our extensive distribution network, expanding global footprint, and commitment to innovation and sustainability serve as the pillars of our growth. As we execute our vision with discipline and agility, we are poised to play an increasingly pivotal role in the future of Indias agrochemical industry.

Human Resources

At Best Agrolife, we recognise that our human capital is one of our most valuable assets and a key driver of our sustained growth. Guided by this belief, we remain deeply committed to nurturing and empowering our workforce through ongoing engagement and development initiatives.

By investing in continuous learning, upskilling, and specialised training programmes, we ensure that our employees are equipped with the knowledge and capabilities needed to thrive in a dynamic agrochemical landscape. Parallelly, we remain focused on building a strong employer brand, one that reflects our values, attracts top talent, and fosters long-term retention.

Creating a positive, inclusive, and collaborative work culture lies at the heart of our people strategy. We strive to provide an environment where employees feel valued, motivated, and aligned with the Companys broader purpose. Employee relations across all levels remained harmonious throughout FY25, and we are committed to sustaining this culture of mutual respect and trust.

As of 31^!f March 2025, the Best Agrolife Group proudly employed a team of 800 dedicated permanent professionals, each contributing meaningfully to our shared vision of agricultural excellence.

Internal control systems and their adequacy

At Best Agrolife, we have instituted a robust internal control framework designed to safeguard the Companys assets and ensure their optimal utilisation. This comprehensive system significantly mitigates the risk of unauthorised use or disposal of assets and ensures that all transactions are duly authorised, accurately recorded, and appropriately reported.

With a focus on enhancing resource efficiency and streamlining operations, we have established a well-defined monitoring mechanism that facilitates effective oversight across all functions. This ensures that resources are deployed judiciously and operations remain compliant with applicable laws, regulations, and internal policies. Our internal control systems have been independently reviewed and assessed as adequate and satisfactory by the auditors, reaffirming our commitment to operational excellence and governance integrity.

Cautionary statement

This Annual Report, including the Management Discussion and Analysis and other sections, contains forward-looking statements that reflect our current expectations, projections, and assumptions regarding future performance, plans, and business objectives. These statements are inherently subject to risks and uncertainties, many of which are beyond the Companys control.

Actual results may differ materially from those expressed or implied due to a range of factors, including but not limited to, economic and political developments in India and other countries where we operate, changes in interest rates, evolving government regulations and policy shifts, amendments in tax laws, and other external or unforeseen circumstances. Readers are advised to consider these risks and uncertainties when evaluating the Companys future prospects and to avoid placing undue reliance on forward-looking statements.