Bhaskar Agrochemicals Ltd Management Discussions

Management Discussion and Analysis Report:

(a) Industry structure and developments:

The global economy during FY 2025-26 continued its path of gradual and uneven recovery, shaped by evolving trade and tariff policies, persistent geopolitical tensions and shifting monetary conditions across major economies. According to the International Monetary Funds World Economic Outlook, global growth is estimated at around 3.2% for 2025, moderating marginally to about 3.1% in 2026.

India continued to be one of the fastest-growing major economies during the year. Domestic and international agencies, including the RBI, IMF and the Ministry of Statistics and Programme Implementation, placed Indias real GDP growth for FY 2025-26 broadly in the range of 6.5% to 7.4%, supported by resilient domestic consumption, sustained government capital expenditure and healthy services sector activity, even as export-oriented segments faced some headwinds from elevated tariffs imposed by certain trading partners.

The Indian agrochemical sector continued its steady growth momentum during the year, aided by robust domestic demand, a widening export footprint and continued government emphasis on farmer welfare and modern farming practices. Independent industry estimates place the size of the domestic agrochemicals market in the region of USD 9 billion for 2025, with the sector expected to grow at a healthy pace over the medium term. Continued adoption of precision farming, drone-based spraying, IoT-enabled monitoring and AI-driven crop protection technologies has further improved efficiencies and agrochemical utilisation across the value chain.

(b) Opportunities and Threats:

1. Opportunities

• The continuation of Government schemes such as PM-Kisan, together with soil health and crop insurance initiatives and periodic revisions in minimum support prices, is helping sustain farm-level spending capacity on crop protection inputs.

• Farmers and institutional buyers are increasingly moving towards biopesticides and sustainable cultivation methods, opening up a growing category alongside the Companys conventional product range.

• Sustained outreach and training initiatives across the industry are improving farmer awareness of safe and judicious agrochemical application, which supports more consistent, repeat demand over time.

• Indias strengthening position as a cost-competitive manufacturing hub for agrochemical formulations continues to open up new avenues in export markets.

2. Threats

• Elevated stock levels with channel partners in certain geographies could keep pricing under pressure in the near term.

• Continuing disruptions in global supply chains expose input costs to sudden and unpredictable swings.

• Shifts in tariff and trade policy in key overseas markets could affect the pace and predictability of export demand.

• The entry and expansion of both domestic and multinational players is intensifying competitive intensity across product categories.

3. Segment-wise / Product-wise Performance

During FY 2025-26, the Company achieved a total revenue of Rs. 12,224.63 Lakhs compared to Rs. 9,059.33 Lakhs in FY 2024-25, registering a growth of 34.94%.

Profit after tax stood at Rs. 468.41 Lakhs against Rs. 389.70 Lakhs in the previous year, an increase of 20.20%, reflecting improved operational efficiencies, better cost optimisation and continued growth in the Companys core formulation business.

Revenue from operations (sale of manufactured products and job-work services) stood at Rs. 12,191.81 Lakhs for FY 2025-26, as against Rs. 9,050.60 Lakhs in FY 2024-25, in line with the overall growth in the Companys business.

4. Outlook

Having delivered a strong growth in both revenue and profitability in FY 2025-26, the Company intends to build on this momentum by widening its product portfolio, deepening engagement with existing domestic and overseas customers, and pursuing fresh opportunities in the biopesticides and export segments. While the competitive landscape and input-cost environment remain challenging, the Board and management approach FY 2026-27 with measured confidence, underpinned by the Companys operational track record and its focus on cost discipline.

5. Risks and Concerns

The Company continues to operate under a structured risk management framework designed to identify emerging risks early and put in place appropriate mitigation measures. The key risk categories monitored are:

• Market-related risks, arising from shifts in customer demand and pricing pressure in a competitive marketplace.

• Operational risks, including disruption to supply chains, shortages of key raw materials, and constraints on production continuity.

• Regulatory risks, stemming from changes in government policy and evolving environmental compliance requirements.

• Financial risks, relating to movements in foreign exchange rates and interest rates.

6. Internal Control Systems and Adequacy

The Company maintains an internal control environment that is appropriate to the scale and nature of its operations, aimed at safeguarding assets, ensuring the reliability of financial reporting, and supporting operational efficiency. These controls are periodically tested through internal and system audits, with observations placed before the Audit Committee for review. Where gaps are identified, corrective steps are taken promptly to reinforce the Companys governance and compliance framework.

7. Discussion on Financial Performance

A detailed discussion of the Companys financial performance for the year is set out in the Financial Summary and Highlights section of the Boards Report, and should be read together with this Report.

8. Human Resources and Industrial Relations

The Company continues to invest in its people through focused efforts on retention, training and overall employee well-being. As on 31st March 2026, the Company has 162 permanent employees on its rolls, compared to 130 as on 31st March 2025. During the year, the Company carried forward its employee engagement, skill-building and workplace safety initiatives, aimed at strengthening workforce capability and morale.

9. Significant Changes in Key Financial Ratios

In accordance with Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the key financial ratios of the Company for FY 2025-26, together with the corresponding figures for FY 2024-25, are set out below, along with explanations for the changes therein:

PARTICULARS	2025-2026	2024-2025	REMARKS
Current ratio	1.10	1.15	-
Debt equity ratio	0.13	0.31	The variance is on account of increase in the profit and repayment of loans.
Debt Service Coverage Ratio	4.32	3.19	-
Return on Equity (%)	21.61	22.05	-
Inventory Turnover Ratio	3.54	3.34	-
Trade Receivables Turnover Ratio	5.63	4.98	-
Net Profit Margin (%)	3.84	4.30	-

10. Disclosure of Accounting Treatment

In preparing the financial statements for the year, the Company has followed the accounting treatment prescribed under the applicable Indian Accounting Standards, and has not adopted any treatment that departs from these standards.

11. Cautionary Statement

This Report contains certain forward-looking statements concerning the Companys business prospects, plans and outlook, prepared on the basis of managements current assumptions and expectations regarding future events. Such statements are subject to inherent risks and uncertainties, and actual outcomes could vary materially on account of factors including, but not limited to, changes in economic and market conditions, government and regulatory policy, input price movements, and other developments beyond the Companys control. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.