Best Agrolife Ltd Management Discussions

Global Economy Overview

The global economy entered FY26 on a steadier footing before being tested
afresh by the outbreak of conflict in the Middle East. Under the assumption
that the conflict remains limited in duration and scope, global growth is
projected at 3.1% in 2026 and 3.2% in 2027, a step down from the pace of
about 3.4% recorded over 2024 and 2025, and below the pre-pandemic
average of 3.7%. The moderation reflects firmer commodity prices, renewed
inflation pressure and tighter financial conditions, the burden of which falls
most heavily on emerging market and developing economies, particularly
commodity importers.

Global headline inflation is expected to
rise modestly in 2026 before resuming
its downward path in 2027, with
crude oil assumed to average close to
US$82 a barrel in 2026 before easing
the following year. While disinflation
remains broadly intact across most
advanced economies, the United
States is likely to see price pressures
persist for longer. The balance of risks
is firmly to the downside: a longer or
wider conflict, deepening geopolitical
fragmentation, a reassessment of
expectations around productivity
gains from artificial intelligence, or a
renewed escalation in trade tensions
could each weaken growth. A durable
de-escalation, clearer trade policy
and renewed structural reform could,
by contrast, restore confidence and
support a faster recovery.

Source: IMF, World Economic Outlook,
April 2026.

Indian Economy
Overview

India retained its position as the
fastest-growing major economy
for a fourth consecutive year,
with real GDP growth for FY26
estimated at 7.4%, underpinned by
the twin engines of consumption
and investment. Private final
consumption expenditure rose to
61.5% of GDP, reflecting low inflation,
stable employment and rising real
purchasing power. The strength of
domestic demand cushioned the
economy through an unusually
difficult external environment
marked by heightened global trade
uncertainty and steep tariffs.

Policy continued to provide a
supportive backdrop. The Government
used the external stress as an
opportunity to advance reform,
including rationalisation of the Goods
and Services Tax, deeper deregulation
and simpler compliance across
sectors. Macroeconomic stability
remained well anchored: the current
account deficit stayed moderate at
0.8% of GDP in the first half of FY26,
while foreign exchange reserves
covered more than eleven months
of imports.

Looking ahead, the cumulative effect
of recent reforms appears to have
lifted IndiaRs.s medium-term growth
potential closer to 7%. The Economic
Survey projects real GDP growth of
6.8% to 7.2% for FY27, framing the
year as one of adjustment as firms and
households adapt to a changing policy
and trade landscape.

External risks persist, with the
Reserve Bank of India and several
rating agencies trimming their FY27
projections to around 6.4% to 6.6% in
response to Middle East tensions and
firmer crude oil prices. On balance,
the outlook is one of steady growth
amid global uncertainty.

Source: Economic Survey 2025-26,
Government of India.

Global Agrochemicals Market

The global agrochemicals market
continued to expand through a
period of cyclical pricing pressure
and channel inventory correction.
Industry estimates value the market
at around US$251.4 billion in 2026,
with projections pointing to US$346.7
billion by 2033, a compound annual
growth rate of about 4.7% over the
forecast period. The market spans
three broad areas: crop protection
chemicals, crop nutrition and a fast-
growing biologicals segment, each
adapting to tighter regulation and
changing farmer preferences.

Agrochemicals, comprising fertilisers,
pesticides, herbicides and bio-
stimulants, remain essential inputs for
raising crop yields, protecting against
pests and weeds, and maintaining
soil health. With the global population
still rising and arable land shrinking
under urbanisation and climate
stress, the need to lift productivity per
hectare has rarely been greater. This
keeps agrochemicals central to food
security across both developed and
developing economies, and sustains
demand through cyclical swings in
pricing and inventory.

Fertilisers account for the largest
share of the market, at roughly 47%,
reflecting their role in sustaining yields
across cereals, oilseeds and cash
crops. Pesticides represent the fastest-
growing product category, as pest
resistance, climate-driven crop stress
and the wider adoption of integrated
pest management lift demand. Within
crop protection, herbicides hold a
meaningful share on the back of weed-
management needs and rising labour
costs, while biologicals are gaining
ground quickly, helped by premium
pricing of roughly 40% to 60% over
conventional inputs and by regulatory
support in developed markets.

Regional dynamics continue to shape
the market. East Asia leads global
consumption with about a 28% share,
supported by large agricultural bases
and food-security programmes in
China and India, while Latin America
is among the fastest-growing regions,
driven by export-oriented soybean,
corn and sugarcane cultivation.

Technology is changing how products
are made and applied, with precision
farming, drone-assisted spraying and
ultra-low-volume formulations moving
demand towards high-performance,
targeted solutions. At the same time,
stricter residue norms, rising re-
registration costs and environmental
concerns act as constraints,
particularly in developed markets,
and are hastening a shift towards
safer, bio-based and next-generation
active ingredients.

Source: Persistence Market Research,
Agrochemicals Market, May 2026.

Indian Agrochemicals
Market

IndiaRs.s agrochemicals sector remains
central to the countryRs.s agricultural
transformation and to its food security.
The market was valued at around
US$24.75 billion in 2025 and is
forecast to grow by close to US$20.9
billion over 2026 to 2030, a compound
annual growth rate of about 13%.
Demand is driven by the need to feed
a large and growing population from
limited arable land, even as crop losses
to pests, weeds and disease are still
estimated at 15% to 25% of potential
output each year.

Agrochemicals, spanning fertilisers,
pesticides, herbicides and plant growth
regulators, are indispensable to Indian
agriculture. Cereals and grains such
as rice, wheat and maize remain the
largest consumers, keeping demand
for crop protection and nutrition firm
across major agricultural states, while a
gradual shift towards horticulture and
high-value crops is lifting demand for
fungicides and bio-rational products.
India has strengthened its position
in global trade, ranking among the
largest producers and exporters of
agrochemicals, with crop protection
exports of around US$3.3 billion in
FY25, close to three times the level of a
decade earlier. The India-UK Free Trade
Agreement signed in 2025, which
removes tariffs on the large majority
of trade lines, including organic
chemicals and agrochemicals, adds a
further opening for exporters, although
roughly half of technical-grade active
ingredients are still imported.

The sector is moving towards
more sustainable, targeted and
technologically advanced solutions.
Herbicides remain a high-growth
category as rural labour shortages
raise the cost of manual weeding,
and biologicals and biopesticides
are growing quickly as farmers and
policymakers give greater weight to
soil health and residue compliance.
Government policy remains a strong
influence: the Make in India and
Atmanirbhar Bharat programmes
encourage domestic manufacturing
and reduce import reliance, while
schemes such as the Prime Minister
Dhan-Dhanya Krishi Yojana, PM-
PRANAM and the National Mission on
Natural Farming steer support towards
bio-inputs and balanced fertiliser use.
Challenges remain, including raw
material cost volatility, dependence
on imported intermediates, and
increasingly stringent state-level
regulation. For research-led, backward-
integrated companies, the Indian
market offers meaningful room to build
sustainable, innovation-led portfolios.
Source: Technavio, India Agrochemicals
Market. Figures vary across providers
and definitions.

Company Overview

Best Agrolife Limited is among
IndiaRs.s leading research-driven
agrochemical companies, committed
to transforming agriculture through
research and development and
sustainable crop protection. The
Company operates across the full
value chain, from the manufacturing
of technicals and formulations to
farmer-ready branded solutions,
and is recognised among the top
agrochemical companies in India
by AgroPages. Its operations are
anchored by four manufacturing units
with an installed capacity of 7,000
MTPA of technicals and 35,500 KL of
formulations. These are supported by
a distribution network spanning 21
states, around 40 warehouses and
close to 10,000 dealers, together
with an expanding international
presence. The Company holds more
than 530 formulation registrations
and offers a portfolio of patented and
branded products anchored by nine
key patented formulations, recently
complemented by a range of bio-
stimulants.

The CompanyRs.s competitive strength
lies in its research and intellectual
property capabilities, its backward
integration into technicals, and its
deepening engagement with the
farming community. Supported by a
team of more than 800 professionals,
the Company continues to focus on
operational excellence, responsible
innovation and disciplined execution.

Financial Overview

FY26 was a year of disciplined
consolidation for Best Agrolife Limited,
set against a difficult backdrop for the
agrochemical industry. Unseasonal
and uneven weather, variable pest
incidence, high channel inventory,
weak dealer liquidity and volatile raw
material prices weighed on demand
across several crop segments and
geographies. In this setting, the
Company chose to protect the
longer-term health of the business
rather than chase near-term volumes,
accepting a softer year on the top line
as a consequence.

Consolidated revenue from
operations was C1,257 crore, against
C1,814 crore in FY25, a decline of
31%. Despite the lower volumes,
gross margin held firm and edged
up to approximately 30% from
around 29% a year earlier, helped by
a better product mix and calibrated
pricing. Profitability further down the
statement was weaker: EBITDA stood
at C100 crore, with a margin of 8%,
against C200 crore and 11% in FY25,
and profit after tax was C9 crore,
compared with C70 crore in the prior
year, as reduced operating leverage
on a smaller revenue base flowed
through to the bottom line.

The fourth quarter absorbed much
of the yearRs.s pressure. A sharp rise in
raw material prices through March,
following geopolitical developments
in the Middle East, led the Company
to curtail dispatches and step back
from low-realisation sales across both
institutional and branded channels.

This decision affected near-term
revenue by an estimated C50 crore
to C70 crore, but was taken to
protect medium-term profitability
and to maintain channel discipline.
To counter higher input costs, the
Company implemented two rounds
of price increases, in April and
May 2026, the benefits of which
are expected to come through
progressively from FY27.

Viewed as a whole, FY26 was less
about headline growth and more
about steadier execution and a more
focused business. The decisions
taken during the year, while costing
some revenue and margin in the
short term, were aimed at placing
the Company on a sounder footing
for more measured and durable
growth in the periods ahead.

Key Financial Ratios

The key financial ratios disclosed by the Company for FY26, with prior-year comparatives, are set out below.

Ratio	FY26	FY25	% change	Reason
Current Ratio	1.72	1.53	12.22%	-
Debt-Equity Ratio	0.43	0.56	(22.98)%	3
Debt Service Coverage Ratio	1.92	1.12	72.23%	4
Return on Equity	0.07	0.12	(37.01)%	1
Inventory Turnover Ratio	2.48	2.59	(4.19)%	-
Trade Receivables Turnover Ratio	3.05	3.53	(13.45)%	-
Trade Payables Turnover Ratio	3.67	2.74	33.77%	2
Net Capital Turnover Ratio	3.00	4.14	(27.64)%	2
Net Profit Ratio	4.62 %	5.32%	(13.17)%	-
ROCE	10.85%	14.81%	(26.73)%	1
Return on Investment#	-	-	-	-

# No income has been received on investment in the year ended 31 March 2026 and 31 March 2025 hence reported as nil.

1 Decreased primarily on account of decrease in net profits mainly attributable to lower operating profits charge during
the current year.

2 Decrease primarily on the account of decreased sales during the current year.

3 The ratio has been increased/ decreased due to better management of working capital during the year.

4 Increase primarily on the account of decrease in borrowings during the current year.

Outlook

Best Agrolife Limited enters FY27
with an improved strategic position,
while remaining attentive to the
external environment. Its patented
and speciality portfolio continues to
support the growth strategy. During
FY26, the Company launched three
patented formulations, Best Man,
Fetagen and Shot Down, which
have seen encouraging market
acceptance, with Best Man gaining
traction in the horticulture segment.

In FY27, the Company plans to launch
four additional patented products,
Fluzam, Midcotin, Cubax Power Extra
and Trishanku, further expanding its
speciality crop protection portfolio.

Innovation and intellectual property
remain central to the strategy. FY26
saw the grant of seven patents,
including the CompanyRs.s proprietary
Nano Urea, while the synthesis
research centre successfully
commercialised an eighteen-stage
Topramezone manufacturing process.
At least four new-generation molecules
are expected to be produced at
the Gajraula facility, reinforcing
the CompanyRs.s commitment to
innovation-led growth and self-reliant
manufacturer. Responding to farmer
demand, the Company has also
entered the bio-stimulants segment
with five products: Sprink, Richgrow
Gold, Emprole, Tornet and Punctual.

Profitability is expected to recover
gradually from the first quarter of
FY27 as the calibrated pricing actions
already taken take effect, supported by
a rising contribution from differentiated
products. To protect brand equity, the
Company is introducing high-security
holograms on key products such as
Ronfen to counter counterfeiting,
and is updating product labels to
display Mode of Action classifications
under the IRAC, HRAC and FRAC
frameworks to help farmers manage
pest resistance.

The CompanyRs.s international footprint
continues to widen. Registrations are
progressing across Mexico, Sri Lanka,
Thailand and Vietnam, consignments
are being shipped to Sudan, and
the Company is in the final stages
of establishing a subsidiary in Brazil,
with growing interest in its patented
Nano Urea formulation abroad. As
global supply chains diversify under
the China-plus-one strategy, the
CompanyRs.s expanding technical
capacity and backward integration
place it advantageously to meet
emerging demand. The Company
remains alert to near-term headwinds,
including the progression of the
monsoon, the potential impact of
El Nino, the continuing Middle East
conflict and raw material price volatility.
Its response rests on operational
discipline, capital efficiency, inventory
control, prudent returns policies and
tight control of expenses.

Human Resources

At Best Agrolife Limited, human capital
remains one of the CompanyRs.s most
valuable assets and a key driver of
sustained growth. The Company
continues to invest in continuous
learning, upskilling and specialised
training so that employees are
equipped to perform in a dynamic
agrochemical landscape, while
strengthening its employer brand to
attract talent and support long-term
retention. A positive, inclusive and
collaborative culture lies at the heart
of the people strategy, and employee
relations across all levels remained
harmonious throughout FY26. As on 31
March 2026, the Best Agrolife Group
employed a team of more than 800+
permanent employees During the year,
the Company conducted employee
orientation, POSH and Whistle Blower
Policy awareness, Group Mediclaim
orientation, preventive health camps
and an International WomenRs.s
Day celebration.

Internal Control
Systems and Their
Adequacy

Best Agrolife Limited maintains a
robust internal control framework
designed to safeguard the CompanyRs.s
assets and ensure their efficient use.
The system is structured to mitigate
the risk of unauthorised use or
disposal of assets and to ensure that
transactions are properly authorised,
accurately recorded and faithfully
reported. A well-defined monitoring
mechanism supports effective
oversight across functions, helping to
ensure that resources are deployed
prudently and that operations remain
compliant with applicable laws,
regulations and internal policies. The
CompanyRs.s internal control systems
have been independently reviewed by
the auditors and assessed as adequate
and operating satisfactorily.

Cautionary Statement

This Annual Report, including
the Management Discussion and
Analysis, contains forward-looking
statements that reflect the CompanyRs.s
current expectations, projections
and assumptions regarding future
performance, plans and business
objectives. By their nature, these
statements are subject to risks and
uncertainties, many of which lie
beyond the CompanyRs.s control. Actual
results may differ materially from those
expressed or implied.