Bhagiradha Chemicals & Industries Ltd Management Discussions

Global Economic Overview

The global economy held firm in 2025, weathering geopolitical tension, inflation and shifting trade dynamics. The IMFs World Economic Outlook 2026 puts worldwide GDP growth at roughly 3.4%, driven by strong services activity, technology-led investment and improving financial conditions. Even so, conflict, logistics strain and energy volatility kept uncertainty elevated.

Advanced economies posted a modest but steady 1.9%, holding up against high interest rates and softer industrial output. Stable labour markets, durable services demand and sustained funding for AI and digital infrastructure underpinned the result. The US remained sturdy on robust consumer spending and technology outlays, while Europe recovered gradually on fiscal stimulus and capital projects despite high energy costs.

EMDEs again outpaced developed markets, climbing 4.4% on healthy domestic consumption, manufacturing expansion and infrastructure investment. India remained one of the worlds fastest-growing major economies, propelled by public works, factory-sector strength and rising household spending.

Inflation and Monetary Environment

Headline inflation cooled to 4.1% in 2025 from postpandemic peaks, aided by easing supply networks and steadier demand — though higher transport and input costs still weighed on producers. Central banks held a cautious line, balancing price control against growth while monitoring liquidity, capital flows and financial stability.

Global Trade and Supply Chain Dynamics

World trade proved durable, with volumes up 5.1% on orders across technology, healthcare and industrial sectors. Companies accelerated supply chain diversification and regional production to cut dependence on concentrated sourcing networks.

Geopolitical Risks and Economic Challenges

Conflict, trade fragmentation and regional tension remained the dominant threats. Shipping disruptions, steeper tariffs and sanctions raised logistics expenses, while volatile oil and gas prices fed directly into factory costs and retail prices. Tighter regulation and harder financing conditions added further headwinds, pushing firms toward operational efficiency, digital transformation and sourcing resilience.

The sharpest shock arrived early in the year. On 28 February 2026, joint US—Israeli strikes against Iran triggered a war that disrupted Gulf energy flows and shut the Strait of Hormuz — the route for roughly 20% of seaborne crude oil and LNG exports. Petroleum prices jumped immediately, US gasoline rose more than a dollar per gallon, and supply-chain pressure surged to multi-year highs. Energy-importing nations across Asia and Europe absorbed the heaviest blow, while the US — cushioned by domestic output — faced steeper inflation but a more contained economic hit.

Outlook

The IMF projects worldwide GDP growth of 3.1% in 2026 and 3.2% in 2027, signalling stable medium-term expansion despite external shocks. Developed markets should see moderate but firm gains on cooling price pressures and continued investment in technology and automation, while EMDEs remain the primary engine of global growth.

Consumer prices are projected to rise to 4.4% in 2026 before slowing to 3.7% in 2027 as supply chains stabilise. The Iran war is now the key swing factor for the year ahead: economists estimate the oil price surge could add around 0.6 percentage points to headline inflation, with the broader outlook hinging largely on how durable the ceasefire proves.

Over the longer term, AI, automation, digital infrastructure and advanced manufacturing should remain principal drivers of productivity, alongside sustained appetite in healthcare, pharmaceuticals and sustainable production. Yet geopolitical strife, commodity price volatility and trade fragmentation will continue to shape the business landscape through 2027. Companies with diversified operations, sound compliance frameworks and innovation-led strategies are best placed to navigate it.

Indian Economic Overview

Indias economy showed striking strength and momentum in FY 2025-26, propelled by firm domestic demand, reviving investment, cooling price pressures and sustained, government-led infrastructure spending. Despite global geopolitical strain, trade disruption and sluggish advanced-economy performance, India held its place among the worlds fastest-expanding major economies. Sound macroeconomic fundamentals, healthy banking and corporate balance sheets, rising household expenditure and continued policy reform reinforced the countrys upward trajectory.

Real GDP is estimated to have grown 7.4% in FY 202526, up from 6.5% a year earlier. The acceleration was driven chiefly by robust private consumption, public capital outlays, durable services activity and a recovering manufacturing base. Private Final Consumption Expenditure climbed to 61.5% of GDP — its highest share since 2011-12 — signalling stronger consumer confidence and purchasing power.

Agricultural Sector Prospects

Agriculture and allied activities continue to provide stability to Indias growth momentum by supporting rural demand and income security. The sector is estimated to grow by 3.1% in FY26, aided by a favourable monsoon in HI FY26, while agricultural GVA expanded by 3.6% in the same period, up from 2.7% in HI FY25, reflecting better crop performance. Allied segments such as livestockand fisheries have also remained resilient, recording steady growth of around 5-6% and contributing to the sectors balanced and diversified expansion.

Manufacturing and Industrial Growth

Industry gained momentum in FY 2025-26 on the back of higher infrastructure spending, supply chain diversification and rising domestic demand. The industrial segment expanded 7% in the first half of FY 2025-26, against 6% a year earlier, while manufacturing rebounded sharply to 9% in the second quarter after a brief slowdown.

The manufacturing base is shifting steadily toward medium- and high-technology output, which now makes up nearly 46% of total value added. Initiatives such as the Production Linked Incentive (PLI) Scheme, Make in India, the National Logistics Policy and industrial corridor development continue to bolster competitiveness and capacity across industries.

New Delhi sustained its push through larger capital spending, infrastructure expansion, manufacturing incentives and digital initiatives. Effective capital outlay rose to nearly 4% of GDP in FY 2024-25, while the fiscal deficit is projected to stay below 4.5% of GDP in FY 202526.

Monetary Policy

The Reserve Bank of India (RBI) kept a balanced stance through FY 2025-26, anchoring prices while supporting expansion. With inflation easing markedly, conditions remained relatively accommodative, helping sustain investment and spending. The banking system held steady — cleaner balance sheets, better asset quality, strong credit offtake and ample liquidity. Higher lending to industry, MSMEs, retail borrowers and infrastructure projects fed the broader pickup. Throughout, the RBI tracked global uncertainty, commodity price swings, exchange-rate volatility, and imported inflation risks while safeguarding financial stability.

Inflation

Retail inflation cooled sharply during FY 2025-26, sliding from 4.6% in FY 2024-25 to 1.7% over April-December, largely on softer food prices, favourable weather and stronger farm output. The decline lifted household purchasing power and underpinned consumption. Food prices eased substantially as vegetables, pulses and spices grew cheaper. Upside risks remain, though — climbing global commodity prices, imported inflation from a weaker rupee, supply disruption and volatile precious-metal costs.

External Sector

Indias external position stayed sturdy despite persistent global headwinds and trade friction. The Current Account Deficit narrowed to 0.8% of GDP in the first half of FY 2025-26, from 1.3% a year earlier. Strong services exports — led by information technology and professional services — together with healthy remittance inflows, helped offset the merchandise trade gap. Foreign Direct Investment rose to USD 81 billion in 2025, a 13% year-on-year gain, and foreign-exchange reserves stayed comfortable, covering nearly 11 months of imports and 94% of external debt as of January 2026.

That position now faces a fresh test from the US-Iran war that erupted in February 2026. India sources about half its crude oil, 60% of its LNG and almost all of its LPG through the Strait of Hormuz, leaving it acutely exposed to the resulting supply squeeze and oil-price spike. The rupee slipped past 92 per dollar in March as investors pulled over US$3 billion from domestic equities, prompting heavy RBI intervention to steady the currency. The chief economic advisor has warned that the trade deficit will widen significantly in the financial year ending March 2027.

Outlook

Indias outlook for FY 2026-27 stays constructive, with real GDP growth projected at 6.8%-7.2%. Internal demand, infrastructure spending, rising private investment and steady consumption should remain the principal engines. Manufacturing and services are likely to gain from deeper global integration, digitalisation and PLI-led capacity additions. The external account is expected to hold firm, supported by services exports, remittances and reserves covering close to 11 months of imports.

The Iran war, however, is the key swing factor for the year. Analysts estimate that crude sustained near $100 a barrel could slow FY27 growth to about 6.6%, with prices around US$130 dragging it toward 6%. Prime Minister Modi has urged citizens to conserve fuel, defer gold purchases and limit overseas travel to ease the pressure — underscoring how heavily the years trajectory hinges on the conflicts duration and the path of energy prices.

The global agrochemical industry, valued at roughly USD 300 billion in 2025, encompasses fertilisers and crop protection chemicals. Fertilisers led the product mix with 77.1% of revenue, while cereals and grains topped the application segment at 46.8%. Asia-Pacific — anchored by China and India — remained the dominant region, accounting for 52.7% of global sales.

Demand drivers

A rising world population, rapid urbanisation and mounting food-security concerns continue to lift the need for agricultural inputs. The Food and Agriculture Organisation estimates that food output must climb nearly 50% by 2050, even as pests and diseases destroy over 40% of crops each year — leaving little room to farm without yield-protecting and yield-enhancing chemistry.

Shift toward sustainability

Regulators worldwide are steering agriculture away from chemical-intensive practices. Frameworks such as the European Green Deal and Indias backing for biofertilizers are accelerating the uptake of eco-friendly solutions, spurring the development of biological products, precision techniques and environmentally compliant formulations.

Biologicals — biofertilizers, microbial pesticides and biocontrol agents — are expanding briskly on growing preference for organic farming, regulatory incentives and sharper environmental awareness; Indias biologicals segment, in particular, is positioned for strong long-term gains. A parallel move toward low-carbon fertilisers and regenerative practices is opening fresh opportunities, with green ammonia, smarter nutrient management and carbon-efficient methods gaining ground as the sector works to curb agricultural emissions.

Technology and precision farming

Digital tools — drones, IoT sensors, AI-based monitoring and predictive analytics — are reshaping modern cultivation. By optimising chemical use, reducing waste and boosting productivity, they strengthen the value proposition of agrochemical firms that now offer technology-enabled farming services.

Key challenges

The industry still contends with volatile raw materials and energy costs, as well as recurring supply chain disruptions. Fertiliser production remains tightly tied to natural-gas prices, a swing factor for manufacturing costs and margins. Elevated input prices also strain affordability for smallholder farmers in developing economies, adding pricing pressure across the value chain.

Outlook

The global agrochemicals market is projected to reach USD 449.9 billion by 2033, advancing at a 5.2% CAGR from 2026. Beyond headline expansion, the industrys trajectory is being reshaped by a decisive shift toward sustainable, environmentally responsible farming.

As producers work to raise food production efficiency while limiting environmental impact, demand is moving steadily toward organic-friendly growth promoters, biological crop protection products and advanced nutrient management solutions. Supportive government policy, regulatory encouragement and continuous innovation are expected to accelerate the development of greener fertiliser and crop-protection technologies. Together, these forces should anchor durable, longterm growth — positioning the agrochemical sector as a central enabler of modern, sustainable agriculture.

Regional Insights

US Agrochemicals Market Overview

The U.S. agrochemicals market was valued at approximately USD 35.88 billion in 2025 and is projected to reach nearly USD 43.03 billion by 2035, registering a CAGR of 1.95% during 2026-2035. In volume terms, the market is expected to increase from 10 million metric tons in 2025 to around 12.09 million metric tons by 2035.

Market growth is supported by rising demand for specialised and cost-efficient crop protection products, expanding demand for food and beverages, and increasing adoption of advanced farming technologies such as precision agriculture, artificial intelligence, and digital farming solutions. Government subsidies and agricultural support programs are further encouraging the adoption of modern farming practices and agrochemical products across the country.

Sustainability remains a major focus area within the U.S. agrochemicals industry. Demand for environmentally friendly products such as bio stimulants, bio-pesticides, and soil health management solutions is growing steadily as farmers increasingly shift toward sustainable agricultural practices. The integration of precision agriculture technologies is also helping optimise agrochemical usage, improve operational efficiency, and reduce environmental impact.

European Agrochemicals Market

The European agrochemicals market was valued at USD 45.43 billion in 2025 and is projected to reach USD 60.53 billion by 2034, growing at a CAGR of 3.24% from 2026 to 2034. Market growth is primarily driven by declining arable land, rising demand for effective crop protection solutions, and increasing investments in agricultural research and development.

Nitrogenous fertilisers continue to dominate the market, while demand for pesticides—particularly herbicides, fungicides, and insecticides—is growing steadily due to the rising incidence of crop pests and diseases. Grains and cereals remain the largest application segment across the region. However, stringent environmental regulations and concerns regarding chemical toxicity continue to pose challenges for market expansion.

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https://www.grandviewresearch.com/industry-analysis/ agrochemicals-market

https://www.towardschemandmaterials.com/insights/us- agrochemicals-market

https://www.marketdataforecast.com/market-reports/europe- agrochemicals-market)

Indias agrochemicals market is set for solid expansion, estimated at USD 9.59 billion in 2026 and projected to reach roughly USD 13.25 billion by 2031, a 6.66% CAGR over the period. The momentum rests on a strong domestic manufacturing base, mounting agricultural productivity needs, growing export demand and supportive policy for sustainable farm inputs. India now ranks as the worlds fourth-largest producer and second- largest exporter of agrochemicals, serving more than 150 countries.

Product Segment Trends

Fertilisers remained the leading category, holding 54.60% of market share in 2025. Pesticides, by contrast, are set for the sharper advance — a projected 10.12% CAGR through 2031 — as pest resistance, shifting climatic patterns and stronger demand for crop protection take hold. Formulation technology is also evolving quickly, with nano-nutrient liquids and water- dispersible granules winning favour for their higher efficiency, lower dosage and safer application.

Application-Wise Demand

Grains and cereals accounted for 46.75% of the market in 2025, reflecting Indias large staple-crop base and food-security priorities. Fruits and vegetables, however, are emerging as the fastest-growing application at a projected 8.78% CAGR through 2031, driven by a sharper focus on horticulture, higher-value crops, and export-oriented, quality-driven cultivation.

Key Growth Drivers

Demand is underpinned by climbing food requirements, a stronger emphasis on farm productivity and the steady modernisation of cultivation practices. Population pressure and shrinking arable land are widening the use of fertilisers, herbicides, pesticides and speciality crop- protection products to maximise output. Farmers, too, increasingly recognise the economic payoff — better crop quality, higher yields and reduced post-harvest losses.

Technology and Sustainability Trends

Precision farming, drone-based spraying, smart irrigation and data-driven agriculture are reshaping how inputs are applied across India, helping optimise chemical use, sharpen efficiency and limit environmental impact. Sustainability is recasting the landscape in parallel, with brisk demand for bio-pesticides, biofertilizers and eco-friendly crop-protection solutions as growers turn toward organic methods. Government programmes backing agricultural modernisation, greener inputs and advanced technology continue to reinforce this shift.

Export Landscape

Indias standing in the global market is strengthening, with agrochemical exports projected to exceed USD 3.3 billion in 2026, spread across Europe, Southeast Asia, West Africa and the United States. Competitiveness has improved on the back of lower tariff structures relative to China, expanding manufacturing capacity and tighter quality control — gains most visible in technical-grade and specialised formulations. Shifts in Chinas export policy are creating additional room for Indian technical manufacturers, though cost pressures persist for nonintegrated formulators. While the country still imports technical-grade intermediates, domestic output is rising steadily to curb that dependence.

Challenges

The industry continues to grapple with reliance on imported raw materials — chiefly from China — alongside evolving regulation and state-level curbs on certain products. Volatile input prices and compliance costs weigh on operations. Even so, deeper innovation, export strength and the pivot toward sustainable, speciality solutions are expected to bolster the longterm outlook.

Government Initiatives — Union Budget 2026-27

The Budget sharpened New Delhis focus on building out the chemicals and agrochemicals ecosystem through infrastructure, sustainability and manufacturing support:

• Chemical Parks (D600 crore): A new challenge- based scheme to establish three dedicated parks, strengthening domestic chemical-manufacturing capacity.

• Cluster-based industrial models: Integrated, plug- and-play clusters with shared utilities, logistics, environmental infrastructure and compliance facilities to cut project costs — extending established formats such as Plastic Parks, Bulk Drug Parks and PCPIRs.

• CCUS technologies (D20,000 crore): Five-year support for Carbon Capture, Utilisation and Storage to advance low-carbon manufacturing.

• Environmental compliance: Promotion of shared waste management, energy-efficient infrastructure and safer industrial practices.

• Innovation and MSMEs: Encouragement for advanced manufacturing, speciality chemistry and process innovation, with cluster development aimed at drawing investment, generating jobs and lifting MSME participation and exports.

Outlook

Indias agrochemicals industry should sustain strong momentum, supported by rising food demand, growing productivity needs and the wider adoption of modern cultivation practices. Precision farming, biofertilizers, speciality crop-protection products and sustainable inputs are expected to drive transformation, while government backing for domestic manufacturing, infrastructure and responsible farming reinforces longterm prospects. Combined with strong manufacturing capability and rising investment in innovation, Indias growing export footprint positions the sector for durable, competitive expansion.

That trajectory, however, carries a near-term risk from the US-Iran war that began in February 2026. With Iran among the worlds largest urea exporters, its production halt and the disruption of Gulf gas flows pushed global urea benchmark prices up roughly 26% within two weeks and European natural-gas prices up about 45%.

For India — which imports nearly half its natural gas and sources most of its ammonia cargoes through the Strait of Hormuz — this raises feedstock costs for domestic urea and nitrogen fertiliser producers; the government has already introduced gas rationing that caps fertiliser plants at 70% of their six-month average consumption.

Constrained imports of amines could similarly raise costs for crop-protection formulators. Healthy fertiliser stocks and a strong Rabi harvest have cushioned the immediate impact. Still, a prolonged conflict could elevate input costs, widen the subsidy burden and squeeze margins — especially for non-integrated formulators — through the kharif season ahead.

SWOT Analysis

Strengths

• Cost-Competitive Manufacturing Base:

India has emerged as a globally competitive agrochemical manufacturing hub with strong export capabilities across the US, Europe, Africa, and emerging markets.

• Skilled Technical Workforce: The availability of qualified, cost-efficient scientific and technical talent supports large-scale manufacturing and formulation capabilities.

• Strong Domestic Demand: Rising food security requirements, growing population, and shrinking arable land continue to support long-term demand for crop protection and agricultural input solutions.

• Diverse Product Portfolio: Presence of both domestic and multinational players offering a wide range of insecticides, fungicides, herbicides, and speciality agrochemical products.

Weaknesses

• Dependence on Monsoon Cycles: Industry performance remains closely linked to rainfall patterns and agricultural output, making demand vulnerable to adverse weather conditions.

• Limited Innovation-Led R&D: The sector remains largely focused on generic products, with comparatively low investment in new-molecule discovery and advanced research.

• Reliance on Imported Raw Materials:

Significant dependence on imports of intermediates and technical-grade chemicals, particularly from China, affects supply chain stability and costs.

• Uneven Agrochemical Consumption: Per- hectare agrochemical usage remains relatively low and inconsistent across regions and crop categories.

Opportunities

• Expanding Export Potential: India is well- positioned to strengthen its presence in global agrochemical markets through higher exports and growing demand for generic products.

• Patent Expiry Opportunities: Expiration of several global agrochemical patents is creating opportunities for Indian manufacturers to launch cost-effective generic alternatives.

• Rising Demand for Sustainable Solutions: Increasing preference for bio-pesticides, biofertilizers, and integrated pest management is opening new avenues for growth.

• Technology-Driven Agriculture: Advancements in precision farming, digital agriculture, drone spraying, and nanotechnology are expected to transform agrochemical application practices.

Threats

• Stringent Environmental Regulations:

Tighter regulatory norms and restrictions on chemical use may affect product approvals and operational flexibility.

• Shift Towards Organic Farming: Growing adoption of organic and residue-free farming practices could reduce long-term dependence on conventional chemical pesticides.

• Increasing Adoption of GM Crops: Pest- resistant genetically modified seeds may reduce the need for certain classes of insecticides.

• Counterfeit and Low-Quality Products: The presence of counterfeit agrochemical products continues to impact brand reputation, farmer confidence, and industry profitability.

Company Overview

Bhagiradha Chemicals & Industries Limited (BCIL) is a research-driven agrochemical manufacturer specialising in high-quality technicals, intermediates, and formulations, supported by robust in-house R&D and cost-efficient, non-infringing process technologies.

With manufacturing facilities of the company and its wholly owned subsidiary located at Ongole and Kadechur, the Company possesses diversified process capabilities and a steadily expanding production base. Its portfolio spans insecticides, herbicides, fungicides, and speciality intermediates, and is backed by a government-approved R&D centre.

The Ministry of Science & Technology, Government of India, has recognised the companys state-of-the-art R&D centre that is located within the plant premises in Ongole. With modern technology, advanced instrumentation and a team of qualified professionals, this facility plays a crucial role in the companys R&D efforts, developing efficient processes for new products, improving existing processes through backward integration, and optimising scale.BCIL serves leading domestic agrochemical companies and exports to several other countries.

The Company continues to strengthen its backward integration capabilities, expand its contract manufacturing business, and advance sustainability initiatives through investments in renewable energy and Zero Liquid Discharge (ZLD) systems.

The agrochemical industry, similar to several other sectors, experienced a challenging business environment during the year under review. Fluctuating market dynamics, unfavourable economic conditions, challenging business conditions impacted overall industry performance. These factors influenced industry growth and created headwinds for businesses across the sector. In the face of these challenges, our Company remained resilient, focusing on agility, innovation, and maintaining strong standards of operational efficiency and corporate governance.

Although the year presented certain obstacles, we continued to pursue strategic initiatives and investments aimed at strengthening our long-term growth prospects and sustainability objectives. We remain focused on identifying new opportunities for growth and are dedicated to strengthening operational efficiency, improving business outcomes, and generating longterm value for our stakeholders.

Operational Highlights

Bhagiradha Chemicals & Industries Limited (BCIL) operates within the agrochemical industry, primarily focusing on Herbicides, Insecticides, Fungicides and speciality intermediates.

Herbicides: Selective and systemic herbicide solutions enabling efficient weed control, developed with a focus on performance, crop safety, and manufacturing consistency.

Insecticides: A comprehensive range of insecticide technicals developed through strong process chemistry to address diverse pest control requirements across crops.

Fungicides: High-quality fungicide technicals designed to support effective disease management, combining process expertise with scalable manufacturing capabilities.

Financial performance with respect to operational performance

During the financial year, the Companys operational performance remained resilient despite a challenging market environment characterized by fluctuating raw material prices and evolving demand patterns in the agrochemical sector. Improved capacity utilization, enhanced production efficiency, and effective supply chain management contributed to stable operations and optimized manufacturing costs. These operational improvements supported the Companys financial performance by strengthening Revenue and maintaining profitability. The Companys focus on operational excellence, product quality, and customer-centric solutions continues to reinforce its financial stability and position it for sustainable long-term growth.

During FY 2025-26, the Company delivered strong operational growth, reflected in a significant increase in revenue from operations. On a standalone basis, revenue from operations grew by 19.45% to 152,122.21 lakhs from 143,635.74 lakhs in the previous year and on a consolidated basis, revenue from operations increased by 21.67% to 153,594.33 lakhs from 144,047.41 lakhs in FY 2024-25, reflecting the continued strength of the Groups operational performance.

The Companys focus on operational efficiency, product portfolio optimization, and disciplined execution enabled it to achieve healthy revenue growth and strengthen its market position, despite prevailing market conditions.

Financial/Operational overview

Particulars	FY 2025-26	FY 2024-25	% Variance	Explanation
Debtors turnover	2.79	3.12	(10.58)	Marginal increase in receivable period is in line with industry norms concerning Agro chemical industry
Inventory turnover	14.94	8.60	73.72	Improvement is in line with overall growth in business volumes
Interest coverage Ratio	3.65	7.03	(48.07)	Variation in WC utilisation in line with increase in business volumes and availment of term loans.
Current ratio	1.80	4.10	(56.14)	Short term funds deployment in revenue generating assets
Debt Equity Ratio	0.13	0.11	17.29	Marginal increase is due to working capital utilisation
Operating Profit Margin (%)	8.19	7.33	11.7	Increase in business volumes has enabled improvement in operating profit margins
Net profit margin (%)	4.98	6.00	(16.95)	Fall in non-operational income resulted in fall of net profit margins
Return on net worth (%)	3.63	3.92	(7.41)	Marginal fall is due to reduction in non-operating income

Human Resources

At Bhagiradha, people remain the foundation of sustainable growth and operational excellence. The Company views its human capital as a strategic strength and is committed to fostering a workplace that promotes inclusivity, collaboration, continuous learning, and employee well-being.

Driven by a people-centric philosophy, the Company invests consistently in capability building through structured training programmes, technical upskilling initiatives, leadership development, and employee engagement activities. By nurturing a culture of accountability, innovation, and performance excellence, Bhagiradha empowers employees to contribute meaningfully to the Companys long-term success.

The organisation maintains a merit-based and performance-oriented work environment where talent, commitment, and achievement are recognised and rewarded. Equal emphasis is placed on maintaining a safe, healthy, and positive workplace through robust safety practices, employee welfare initiatives, and transparent communication across all levels of the organisation.

The Company continued to strengthen its human resource capabilities during the year by focusing on talent development, leadership enhancement, and organizational effectiveness. Various learning and development initiatives were undertaken to upgrade technical, managerial, and functional competencies in line with evolving business requirements. Efforts were made to foster a culture of continuous improvement, accountability, and innovation across the organization. The management believes that a skilled and motivated workforce remains a key enabler in achieving operational excellence and sustaining the Companys competitive position in the agrochemical industry.

Bhagiradha fosters a culture of open communication and participative decision-making, building strong trust between employees and management while promoting career development and retaining talented professionals. As of March 31 2026, the Company had 527 employees on its rolls.

Industrial Relations

The Company maintained stable and harmonious industrial relations across its manufacturing facilities during the financial year under review. There were no significant industrial disputes or disruptions affecting operations, enabling the Company to achieve its production and business objectives. The management continued to emphasize compliance with applicable labour laws, industrial regulations, and statutory requirements, ensuring a conducive operating environment. Effective coordination between management and workforce representatives supported operational continuity and productivity. The Company remains committed to sustaining a positive industrial relations climate that supports efficient operations and long-term business growth.

The Company maintained strong and constructive relationships with industry associations, trade partners, distributors, suppliers, and other stakeholders during the financial year. Active engagement with industry bodies enabled the Company to remain abreast of regulatory developments, market trends, technological advancements, and evolving customer requirements within the agrochemical sector. The Company continued to strengthen its trade network through collaborative partnerships, ensuring efficient supply chain management and wider market reach. These relationships contributed to business continuity, operational efficiency, and the Companys ability to respond effectively to changing market dynamics

Health and Safety Measures

Employee safety and well-being remain central to Bhagiradhas operational philosophy. The Company is committed to maintaining the highest standards of occupational health and safety through robust systems, continuous monitoring, and proactive risk management practices across its facilities.

Dedicated safety teams at each manufacturing location regularly assess operational processes, identify potential hazards, and implement corrective measures to ensure a safe and compliant work environment. Factory leadership actively oversees safety performance and drives continuous improvement initiatives aligned with established OHS standards and regulatory requirements.

Beyond physical safety, the Company also prioritises employee wellness through various health and wellbeing initiatives designed to support mental, emotional, and overall workplace wellness, fostering a secure, healthy, and productive work culture.

Risks and Concerns

The agrochemical industry continues to operate in a dynamic, evolving environment shaped by geopolitical uncertainties, climate-related disruptions, tightening regulations, and volatile global market conditions.

During 2025-26, the sector witnessed stabilising revenue growth; however, profitability and operational performance remained exposed to multiple external risks, including fluctuations in raw material prices, supply chain dependencies, currency volatility, and changing environmental and residue compliance standards in global markets.

Irregular weather patterns and evolving customer demand trends further added to industry-wide challenges. In this environment, Bhagiradha remains focused on strengthening operational resilience through product diversification, process optimisation, backward integration, prudent financial management, and sustainable manufacturing practices to mitigate risks and ensure long-term business stability effectively.

Type of Risks	Risk Description	Mitigation Measures
OPERATIONAL RISK
Market Risk	Intense competition within the agrochemical industry may impact pricing, margins, and business growth.	The Company continuously monitors market dynamics, competitor strategies, and industry trends. Focus remains on improving operational efficiency through process optimisation, cost rationalisation, budgetary controls, and robust management systems to strengthen competitiveness.
FINANCIAL RISK
Credit Risk	Delays or defaults in customer payments could adversely affect cash flows and financial performance.	A structured credit evaluation framework is followed to assess customer creditworthiness. Receivables are closely monitored through dedicated recovery and follow-up mechanisms, while adequate provisions are created for doubtful debts wherever necessary.
Foreign Exchange Risk	Exposure to foreign currency fluctuations on exports and imports may impact profitability.	The objective of the Companys risk management policy is to reduce risks from adverse currency fluctuations by managing foreign exchange uncertainty and volatility through a Board-approved forex hedging policy.
HUMAN CAPITAL RISK OR PEOPLE RISK
Talent Acquisition & Retention Risk	The ability to attract, retain, and develop skilled talent remains a key priority for the Company, as it is essential for maintaining operational continuity and supporting the effective execution of its strategic objective	The Company follows a structured recruitment and talent management approach focused on hiring the right talent, promoting career development, strengthening employee engagement, and building leadership capabilities across the organisation.
Environmental Risk	There is a risk of pollutants being released into the environment, endangering the ecosystem and harming the Companys reputation.	The Company operates its own Effluent Treatment Plant (ETP) comprising agitated thin film dryers, multiple effect evaporators, scrubbers, etc., besides a Sewage Treatment Plant (STP) and ensures zero liquid discharge. Green belt is developed all around the manufacturing plant to strictly comply with regulatory norms. Solid effluent is sent to government-approved agencies for incineration.

Internal Control Systems and their Adequacy

The Company has established a comprehensive internal control framework, which includes thoroughly documented policies and procedures. This proactive approach helps in early detection of any financial and

Company Outlook

The outlook for the agrochemical industry remains positive, supported by favourable monsoon forecasts, increasing agricultural productivity and growing awareness of modern crop protection practices. Rising food demand, changing cropping patterns, and the need to improve farm yields are expected to drive sustained demand for agrochemical products in both domestic and international markets. Globally, inventory levels are gradually normalizing, creating opportunities for export recovery and improved market sentiment. The Company operational issues. Internal financial controls have been documented, digitised and embedded in the business process and are continuously monitored through regular internal audits and management reviews. remains focused on strengthening its product portfolio, expanding manufacturing capabilities, and enhancing backward integration to improve operational efficiency and competitiveness. With a strategic emphasis on innovation, cost optimization, and market diversification, the Company is well-positioned to capitalize on emerging opportunities and deliver sustainable growth in the coming years.

CAUTIONARY STATEMENT

The statements in the Management Discussion and Analysis regarding the Companys objectives, projections, estimates and expectations may constitute "forward-looking statements" under applicable securities laws and regulations. Actual results may differ materially from those anticipated due to various factors, including economic conditions impacting demand-supply dynamics and pricing in the Companys markets, changes in government regulations, tax laws and other relevant statutes, as well as other unforeseen factors.