Bodal Chemicals Ltd Management Discussions

GLOBAL ECONOMY

The global economy in 2024 navigated a complex interplay of moderating inflation, shifting monetary policies, and persistent geopolitical undercurrents. While fears of a widespread recession have largely receded, the year was characterised by a steady but slow growth trajectory, as the International Monetary Fund (IMF) described.

Global growth is estimated to be around 3.2% for 2024, showing resilience but remaining below pre-pandemic levels. This resilience, however, masks significant divergence across regions and sectors. Advanced economies experienced a slight acceleration in growth, driven by factors such as robust consumer spending in the United States, supported by healthy employment and income growth. However, this growth is tempered by uncertainties surrounding future policy directions, including regulatory, trade, and fiscal policies. Meanwhile, emerging markets and developing economies faced a more nuanced landscape. While some regions, like India and Southeast Asia, demonstrated robust growth propelled by strong domestic demand, others grappled with challenges such as slower growth in China, lingering inflationary pressures, and high debt burdens.

Infiation, a key concern in recent years, continued its moderating trend in 2024. Global inflation is expected to decline, offering some relief to households and businesses. This disinflation has allowed several central banks to begin easing monetary policy, though the pace and extent of these actions vary considerably.

In 2024, global trade reached an unprecedented US$33 trillion, marking a 3.7% increase from the previous year. As reported by UN Trade and Development, this growth was primarily fuelled by the services sector, which expanded by 9% and contributed US$700 billion, nearly 60% to the total growth. Trade in goods increased by 2%, adding US$500 billion. While trade demonstrates strong performance, UNCTAD cautions that uncertainty is anticipated in 2025. Further, US tariffs can significantly impact the global economy by disrupting established trade flows and supply chains, increasing costs for businesses and consumers, and often provoking retaliatory measures from trading partners.

Looking ahead to 2025, the global economy is expected to maintain a similar trajectory of moderate growth. The continued easing of monetary policy in many regions should support economic activity, but this will be tempered by the lingering effects of the challenges observed in 2024. Specifically, uncertainties around future policy directions in advanced economies, the varied performance of emerging markets, and persistent geopolitical risks are expected to shape the economic landscape. Infiation is projected to decline further, though core inflation may remain sticky in some sectors.

INDIAN ECONOMY

Indias economic narrative for fiscal year 2025 is one of calibrated expansion. Amidst what the United Nations describes as a precarious moment for the global economy, India stands out as a rare bright spot.

According to the mid-year update of the World Economic Situation and Prospects, India is projected to grow 6.3% in the current fiscal year, the fastest among major economies. This strong performance is expected to persist, with growth forecasted at 6.4% in FY2026. This growth is underpinned by resilient domestic consumption, particularly in rural areas, and sustained public investment in infrastructure. The governments focus on capital expenditure, especially in sectors like roads, housing, logistics, and railways, remains a crucial catalyst for economic momentum.

Infiationary pressures eased significantly, with retail inflation dropping to 3.16% in April 2025—the lowest since July 2019, remaining below the Reserve Bank of Indias (RBI) 4% target for the third consecutive month. This deceleration, primarily due to a sharp decline in food prices, particularly vegetables, provided the RBI with room to adopt an accommodative monetary policy stance, including recent rate cuts to stimulate economic growth. Indias total exports reached an all-time high of US$824.9 billion in 2024–25, marking a 6.01% increase from US$778.1 billion in 2023–24. This substantially rose from US$466.22 billion in 2013–14, underscoring a decade of consistent export growth. The industrial sector expanded by 6.2%, driven by strong performance in electricity and construction. The services sector, accounting for 55.3% of gross value added (GVA), continued to be a major contributor, with services exports rising by 12.8% year-on-year.

Goods and Services Tax (GST) collections in India reached an unprecedented high of approximately _2.37 lakh crore in April 2025, marking a substantial 12.6% year-on-year increase. This figure surpasses the previous second-highest collection of _2.10 lakh crore recorded in April 2024, since the GSTs implementation in July 2017. For context, the collection in the preceding month, March 2025, stood at _1.96 lakh crore.

Foreign direct investment (FDI) inflows revived, increasing 17.9% year-on-year to US$55.6 billion in the first eight months of FY25, reflecting sustained investor confidence in Indias economic prospects. Forex reserves remained robust at US$640.3 billion at the end of December 2024, covering 10.9 months of imports and 90% of external debt.

Looking ahead, Indias economic trajectory will be shaped by a confluence of domestic reforms and global developments. Continued government efforts to improve the ease of business, enhance manufacturing competitiveness, and deepen financial inclusion will remain critical drivers of sustainable growth.

On the external front, Indias outlook may be moderately influenced by evolving US tari_ policies and the anticipated UK-India Free Trade Agreement (FTA). Increasing US tariffs on key Indian exports, such as steel, textiles, and pharmaceuticals, could weigh on export earnings and disrupt supply chains. In contrast, the successful conclusion and implementation of the UK-India FTA could significantly boost bilateral trade, offering preferential market access to Indian exporters in sectors like services, automotive components, and agriculture.

Additionally, the effective management of inflationary pressures, coupled with sustained momentum in domestic consumption and investment, will play a pivotal role in shaping Indias economic performance in the years ahead.

THE CHEMICAL INDUSTRY

GLOBAL

The global chemical industry in 2024 is navigating a complex landscape marked by both recovery and persistent challenges. Following a period of economic realignment post-pandemic, the industry is experiencing a modest growth phase, with the global chemical industry size valued at US$6,182 billion in 2024 and projected to reach US$6,324 billion by 2025. This growth is driven by a notable shift towards specialty chemicals catering to specific, high-performance needs across automotive, electronics, and pharmaceutical sectors. These specialty chemicals are crucial for developing advanced, sustainable solutions, including bio-based chemicals and eco-friendly manufacturing processes.

While the chemical industry demonstrated expansion in 2024, several factors moderated this growth. Persistent supply chain disruptions, fuelled by geopolitical tensions and trade issues, led to shortages, delays, and price fluctuations. Logistical challenges like port congestion compounded these problems.

Furthermore, the critical need for sustainability necessitates significant investment in cleaner technologies and circular economy models, demanding capital and operational adjustments. Regional dynamics also shaped the landscape, with Asia Pacific remaining a primary growth engine despite overcapacity concerns in some areas. Europes recovery was uneven, impacted by energy costs and regulations, while North America benefited from resources like shale gas but faced domestic demand and policy influences.

The future anticipates continued growth driven by specialty chemicals and gradually easing supply chain pressures. However, agility will be crucial for companies to navigate evolving market conditions, geopolitical factors, and the increasing demand for sustainability.

INDIAN

The Indian chemical industry significantly contributes to the countrys economy, accounting for approximately 1.4% of its GDP and 9% of its Gross Value Added (GVA). India is the sixth-largest producer of chemicals globally and the second-largest manufacturer and exporter of dyes and pigments. The sector is highly diversified, encompassing petrochemicals, specialty chemicals, agrochemicals, pharmaceuticals, dyes, and pigments.

In FY 2025, Indias chemical industry demonstrated remarkable resilience and growth, solidifying its position as a pivotal player in the global chemical landscape. Valued at approximately US$300 billion, the sector will reach US$1 trillion by 2040, driven by robust domestic demand, strategic policy initiatives, and a focus on sustainability and innovation.

Domestic Demand and Export Performance

Indias chemical industry thrives on strong domestic consumption, accounting for about 70% of its output. Agriculture, pharmaceuticals, textiles, and construction sectors fuel this demand. On the export front, the industry is poised to surpass US$30 billion in FY25 due to government initiatives like proposed import duty cuts on essential raw materials and support measures for MSMEs. Notably, implementing a new free trade agreement with the United Kingdom is expected to double exports of organic chemicals, reaching US$966 million by 2027.

Investment and Infrastructure Development

Significant investments are shaping the industrys future. India anticipates US$87 billion investments over the next decade to meet rising petrochemical demand, with the sectors value projected to grow from US$220 billion to US$300 billion by 2025.

Sustainability and Innovation

Aligning with global environmental goals, Indias chemical industry embraces sustainability by adopting green technologies and eco-friendly practices. The governments commitment of achieving net-zero emissions by 2070 propels the sector towards sustainable growth. Companies are investing in research and development, focusing on bio-based chemicals and advanced materials while leveraging digital technologies like artificial intelligence and predictive analytics to enhance operations.

Several factors contributed to the performance of the Indian chemical industry.

Strong Domestic Demand: Indias large population, rising disposable income, urbanisation, and increasing consumption levels are driving strong domestic demand for chemicals across various industries, including pharmaceuticals, consumer goods, construction materials, and automotive. This provides a crucial bu_er against global market volatility.

Global Supply Chain Diversification: Global companies are increasingly looking to diversify their supply chains, and India is emerging as a preferred alternative due to its skilled labour, technical expertise, and cost-e_ective manufacturing capabilities. This creates significant export opportunities for Indian chemical firms.

Government Support and Initiatives: The government initiatives mentioned above, such as PLI schemes, PCPIRs, Plastic Parks, and FDI policies, are designed to boost domestic production, attract investment, and enhance export competitiveness. Reduced import duties on raw materials and measures to support MSMEs will also contribute.

End of Inventory Destocking: The global trend of inventory destocking, which had impacted demand in previous periods, is largely over. This will lead to restocking demand and support higher volumes for Indian chemical companies. .

Government Initiatives

Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs): These are special economic zones designed to facilitate petroleum and petrochemical production by leveraging shared infrastructure and support services. The government aims to attract investments worth _10 lakh crore by 2025 under the new PCPIR Policy, with a target of _20 lakh crore by 2035.

Chemical Promotion Development Scheme (CPDS): This scheme promotes the growth of the chemical and petrochemical industry by creating knowledge products (studies, surveys, data banks) and disseminating information through workshops, seminars, and exhibitions. It also incentivises research and innovation through excellence awards.

Centres of Excellence (CoEs): The Department of Chemicals and Petrochemicals has set up CoEs to promote research and development in the sector, focusing on developing new molecules and technologies, improving existing technology, and promoting new applications of polymers, chemicals, and plastics.

Foreign Direct Investment (FDI) Policy: India allows 100% FDI in the chemical sector under the automatic route, with exceptions for certain hazardous chemicals. This policy aims to attract foreign investment and promote self-sufficiency.

Quality Control Orders (QCOs): The government has initiated efforts to make Bureau of Indian Standards (BIS) quality parameters mandatory for imported and domestically manufactured chemicals to ensure quality and prevent dumping substandard chemicals.

Outlook

The Indian chemical industry is on a robust growth trajectory for FY26. Strategic government policies, such as the Production Linked Incentive (PLI) scheme and the development of Petroleum, Chemicals, and Petrochemical Investment Regions (PCPIRs), address these issues and foster a conducive environment for growth.

BASIC CHEMICALS

Indias basic chemicals sector showed volume-driven resilience in FY25 despite facing persistent global headwinds. Total chemical exports experienced significant growth for the year, supported by government initiatives such as customs duty cuts on key raw materials, including phosphoric acid and boric acid, alongside increased support for MSMEs. These policy interventions helped mitigate a challenging global environment characterised by price softness and oversupply. Gujarat remained the clear leader in export performance, accounting for 46.16% of Indias total chemical exports—approximately $12.9 billion out of $28.7 billion—thanks to its robust manufacturing base and efficient environmental clearances. Domestically, the sector witnessed around 8% growth in FY25, driven by strong demand across industries such as construction, pharmaceuticals, paints, and agrochemicals. However, pricing remained under pressure due to excess global inventory and aggressive Chinese exports. The sector also saw sustained capital investments during the year, and analysts note that with most

BENZENE DOWNSTREAM

Indias benzene downstream segment in FY25 demonstrated steady momentum, anchored by rising derivative demand even as regional uncertainties lingered. The overall benzene market in India is valued at approximately USD 3.1 billion in 2024, with projections indicating a 4–6% CAGR through FY33, driven by the construction, automotive, electronics, and chemical end-use sectors. Domestic benzene output remained robust, supported by refinery-integrated expansions, addressing prior dependence on imports of key derivatives like styrene and phenol. FY25 saw India emerge as a net benzene exporter, bolstered by competitive pricing from newly operational capacities. Yet, Asian market prices remained volatile, fluctuating between US$750 and US$1,200 per tonne, influenced by swings in feedstock costs and uneven demand. A significant trend was the rising consumption of benzene derivatives—particularly ethylbenzene (for styrene production), cumene, cyclohexane, and aniline—underpinning growth in plastics, resin, and rubber sectors. capacities now commissioned, a shift toward cash flow optimisation and deleveraging is expected in FY26. Petrochemicals stood out within the basic chemicals segment. India emerged as a bright spot in global petrochemical demand, led by surging consumption in electric vehicle components, solar panels, home appliances, and automobiles. The Indian petrochemicals market expanded from $220 billion to $300 billion by 2025, with major capacity additions underway from players like Nayara Energy and Haldia Petrochemicals. Looking ahead to FY26, the sector is expected to grow at a steady rate of 7–8%, primarily driven by higher volumes. Domestic sales are projected to increase by 8–9%, while exports are likely to grow by 4–5%. However, pressure on realisations is expected to continue amid global oversupply and trade uncertainties, including risks associated with evolving tari_ structures and potential Chinese dumping. As per industry outlooks, companies with diversified portfolios and strong domestic linkages are expected to outperform.

Despite strengthening fundamentals, FY25 faced headwinds: downstream capacity lagged behind derivative demand, necessitating continued reliance on imports , while global macro uncertainties clouded the outlook. S&P Global noted ongoing supply-side asset reviews and potential asset shutdowns in Asia, reflecting broader market caution.

Looking ahead to FY26, a recovery in downstream consumption is anticipated, bolstered by new derivative investments and industrial activity normalisation. Domestic benzene demand is forecast to grow in tandem with the broader chemical sectors 7–8% growth trajectory, while export volumes remain strong. However, challenges persist: crude volatility, upstream feedstock costs, and regulatory compliance—especially regarding emissions—could pressure margins and necessitate investment in environmental upgrades.

CHLOR_ALKALI

Indias chlor-alkali industry made solid gains in FY25, reflecting volume-led growth, technology upgrades, and strategic environmental alignment. The Indian market was valued at approximately USD 2.40 billion in 2024, with projections to reach USD 3.46 billion by 2033 at a 4.18% CAGR from 2025 to 2033. This production scale-up aligns with the sectors transition toward greener, energy-e_cient membrane technology. International caustic soda prices remained stable to strong in the first quarter of 2025. For instance, North American prices hovered near $495/tonne in Q1 2025, while April saw stable, regionally diverse pricing. This pricing environment supported domestic margins and export competitiveness. The chlor-alkali segment has increasingly been linked with green hydrogen and ammonia efforts, leveraging by-product hydrogen streams. Recent conference discussions underscore

SPECIALTY CHEMICALS

In FY25, Indias specialty chemicals sector showed early signs of stabilisation after a challenging period marked by global headwinds and supply chain disruptions. According to PhillipCapital, Q4 FY25 saw encouraging signals in pricing and export volumes, especially in pharma chemicals, where compounds like ATBS and refrigerant gases rebounded strongly. Despite a volatile macro backdrop including geopolitical tensions, container shortages, and higher input costs, pharma-related specialty chemicals experienced double-digit growth. Meanwhile, analyst reports from Business Today and India Ratings highlight how geopolitical disruptions—especially in supply chains due to conflicts—had muted sector earnings earlier in FY25. However, the second half witnessed recovery driven by cost rationalisation and better utilisation integration of renewable-powered electrolysers and carbon capture, reflecting a broader green-chemistry push.

Derivative markets are also gaining momentum. Although specific margin figures are not included in recent summaries, the broader trend suggests a rising orientation towards higher-margin products. Looking ahead to FY26, the sector is expected to maintain 4–5% annual growth, aligned with national chlor alkali market projections. Export volumes and domestic utilisation should remain robust, driven by steady demand for PVC, textiles, and water treatment. Green-hydrogen-linked plant development and continued rollout of membrane-cell capacity will further underpin modernisation.

levels. Crisil projects a 7–8% revenue growth in FY26, primarily volume-led, with domestic sales climbing 8–9% and exports rising 4–5%. Margin pressure is expected to persist due to the unpredictability of US tariffs, global oversupply, and commodity price volatility. Behind the scenes, specialty chemicals manufacturers are planning significant capex: Windmill Capital estimates _16,100+ crore of investments between now and FY27, focused on segments including agrochemicals, performance polymers, and pigments. The China+1 strategy remains a structural tailwind, as global buyers continue to diversify their supply chains. This trend, combined with import substitution, supports long-term demand for differentiated, high-margin chemistries.

THE DYESTUFF INDUSTRY

The Indian dyestu_ industry, a vital subset of the broader chemical sector, is navigating a complex yet promising landscape in FY 2025. This sector is critical in supplying essential inputs to a diverse range of downstream industries, most notably textiles, including leather, paper, plastics, and printing inks. India holds a prominent position in the global dyestu_ market, driven by its large textile base and a growing emphasis on exports.

Secondly, the growth of the Indian textile industry, both for domestic consumption and exports, continues to be a crucial factor. The textile sector, encompassing industries involved in clothing design, manufacturing, textile distribution, and utilisation, extensively employs dyes for colouring and designing cellulosic _bres like cotton and linen. Thirdly, technological advancements are playing a transformative role. The adoption of digital textile printing is gaining momentum, offering the potential to reduce water consumption, chemical waste, and production time. Digital textile printing is rapidly scaling in India, giving dyestu_ and textile makers huge sustainability and speed benefits: market analysts _ag strong India growth in digital printers, vendor/tech studies report printing/dyeing-stage water savings ranging from substantial percentages up to ~95% (depending on the technology), and Indian manufacturers are commercializing local solutions that enable faster, lower-waste, on-demand production for MSMEs.

However, the industry also faces challenges. These include the need for continuous technological upgrades, managing fluctuating raw material prices, and ensuring compliance with stringent environmental standards. The industry is also navigating the complexities of global supply chain dynamics and evolving consumer preferences, including the demand for more customised and personalised products. Despite these challenges, the Indian dyestu_ industry is well-positioned for continued growth, driven by its inherent strengths.

OPPORTUNITIES IN THE INDIAN CHEMICAL INDUSTRY

Growing Domestic Demand

Indias consumption of chemicals is on the rise, driven by sectors like agriculture, pharmaceuticals, textiles, construction, and automotive. As the economy expands and urbanisation accelerates, the demand for chemical-based products is expected to grow substantially.

China+1 Strategy

Amid global efforts to diversify supply chains due to geopolitical tensions and rising costs in China, India is becoming a favoured alternative. The China+1 strategy adopted by global manufacturers opens up opportunities for Indian chemical companies to step into global value chains, especially in specialty and custom chemical manufacturing.

Government Support & PLI Schemes

The Indian government is actively promoting the chemical sector through policy incentives and regulatory reforms. Schemes such as the Production Linked Incentive (PLI) for specialty chemicals aim to boost domestic production and exports. Additionally, the Make in India initiative, easier FDI norms, and focus on industrial clusters and chemical parks are helping attract investments and improve sectoral competitiveness.

Export Potential

India has emerged as a significant exporter of chemicals, serving markets in the US, Europe, Africa, and Asia. Its strategic geographic location, cost advantages, and evolving capabilities make it well-positioned to become a global chemical manufacturing and export hub.

Digital Transformation

The chemical industry in India is beginning to embrace digital technologies such as artificial intelligence, the Internet of Things (IoT), and big data analytics. These tools are helping companies optimise production processes, enhance supply chain efficiency, reduce waste, and improve safety standards.

CHALLENGES IN THE INDIAN CHEMICAL INDUSTRY

Environmental Regulations

The industry faces growing pressure to comply with stringent environmental and safety regulations. Adopting green chemistry, managing hazardous waste, reducing emissions, and improving energy efficiency require significant investment. Non-compliance can lead to legal consequences and reputational damage, making environmental sustainability a critical challenge for companies of all sizes.

Infrastructure Gaps

Despite progress, Indias infrastructure, particularly in logistics, power, and industrial zones, remains inadequate compared to global benchmarks. The lack of integrated chemical hubs, ine_cient transport networks, and high logistics costs hinders the industrys ability to scale operations and compete globally.

Raw Material Dependence

A major concern for the Indian chemical industry is its dependence on imported raw materials, especially from China. This over-reliance makes the supply chain vulnerable to global disruptions, price volatility, and geopolitical uncertainties.

COMPANY OVERVIEW

Bodal Chemicals Ltd. is a globally recognised player in the chemicals and dyestu_ sector, with a strong legacy that spans over 35 years. Established in 1989 as a dye intermediates company, Bodal has evolved into a prominent manufacturer and exporter of dye intermediates, dyestu_s, and basic chemicals. Through strategic forward and backwards integration, the Company has enhanced its capabilities and product portfolio, solidifying its position as Indias largest domestic producer of dye intermediates.

A significant milestone in Bodals journey occurred in 2006, when the Company went public through a reverse merger with a listed entity. Over the years, Bodal has established a reputation for its commitment to quality, innovation, and customer-centric solutions, ensuring long-term satisfaction for a broad and diverse client base.

The Company operates eight state-of-the-art manufacturing facilities strategically situated in Vadodara, Khambhat, Bharuch (Sayakha), Mathura (Kosi), and Punjab. These facilities collectively produce over 200 products, supporting an impressive annual manufacturing capacity of 470,000 MTPA. With a well-established distribution network of more than 70 distributors, Bodal serves over 600 clients across the textiles, paper, leather, and water puri_cation industries.

In addition to its manufacturing strength, Bodal has 11 depots across India, China, Turkey, Bangladesh, and Indonesia, ensuring seamless supply chain operations. Its two dedicated R&D centres in Gujarat continue to drive innovation and product development, enhancing the Companys global competitive edge.

OPERATIONAL AND FINANCIAL OVERVIEW

KPI\u2019s	Standalone
	FY 25	FY 24
Revenue (Rs in Million)	17326.58	14018.7
EBITDA (Rs in Million)	1742.46	1233
PAT (Rs in Million)	195.78	77.32
EBITDA Margin (%)	10.06%	8.80%
PAT Margin (%)	1.13%	0.55%
Net Debt/Equity (in times)	0.77	0.78
ROE (%)	1.71%	0.68%
Net Working Capital Days	21.42	23.12
ROCE (%)	6.85%	4.04%
EPS (Rs)	1.56	0.61
Particulars	FY 25	FY 24
Total Revenue (C in million)	17,326.58	14,018.70
R&D Expenses (C in million)	47.37	44.94
Earnings Before Interest, Tax, Depreciation, and Amortisation (C in million)	1,742.46	1,233.00
Profit Before Tax (C in million)	265.97	118.41
Profit After Tax (C in million)	195.78	77.32
Total Assets (C in million)	23956.54	23,356.26
EPS (C)	1.56	0.61

Name of Metric

Name of Metric	FY 2024-25	FY 2023-24	% Change	Explanation in case of change is 25% or more, as compared to previous year
Inventory Turnover	3.07	2.69	14.13%	--
Current Ratio	1.13	1.13	0	--
Debt-Equity Ratio	0.79	0.79	0	--
Debtors\u2019 Turnover	4.48	3.54	26.55%	In FY 25 turnover increased
Operating Profit Margin	6.19%	4.60%	34.77%	In FY 25, Profit has increased compared to previous years profit.
Return on Net Worth	1.70%	0.68%	149.02%	In FY 25, Profit has increased compared to previous years profit.
Interest Coverage Ratio	1.33	1.23	8.44%	--

RISKS AND MITIGATION STRATEGIES

The Company recognises that operating in a dynamic business environment naturally involves certain unavoidable risks. It has established a comprehensive risk management framework to address these challenges. This proactive approach helps mitigate complacency, acknowledges inherent limitations, and employs targeted strategies to manage various risk categories.

Competition Risk

The Indian chemicals sector is highly competitive, particularly from lower-cost producers in regions like China. This poses a direct threat to Bodals market share.

Mitigation measures

Bodal actively combats this by continuously introducing new products, demonstrating its commitment to innovation and addressing evolving market demands. This proactive approach helps maintain a competitive edge. Moreover, Bodal leverages its long-standing client relationships built on trust and reliability. These established partnerships make customers less likely to switch to competitors, valuing Bodals proven track record.

Capacity Risk

Bodal Chemicals faces the risk of insufficient production capacity to fulfil customer orders. This could result in lost sales, customer dissatisfaction, and damage to the Companys reputation.

Mitigation measures

To address this, Bodal employs meticulous demand forecasting and aligns its production plans accordingly, maintaining a strategic inventory butter. This proactive approach allows them to anticipate and manage potential capacity shortfalls. Furthermore, Bodal optimises its existing production processes and minimises waste generation.

Supply Chain Risk

Disruptions within the supply chain, such as shortages of raw materials or equipment malfunctions, could negatively impact Bodal Chemicals profitability.

Mitigation measures

Bodal fosters robust relationships with its suppliers, ensuring a steady flow of essential raw materials and minimising the risk of disruptions. Furthermore, by managing a portion of its raw material supply chain and pursuing backward integration, Bodal decreases its reliance on external vendors, significantly enhancing its resilience to supply chain challenges.

Brand Risk

Negative events or public perception could harm Bodal Chemicals reputation and erode customer trust, leading to decreased sales, difficulty attracting new customers, and potential legal repercussions.

Mitigation measures

Bodal actively engages with the public, transparently communicating its product information, operational practices, and commitment to sustainability and safety. The Company employs rigorous quality control measures and invests in thorough product safety testing to prevent potential brand-damaging incidents. Moreover, Bodals emphasis on developing and promoting environmentally friendly practices significantly enhances its brand image and resonates positively with stakeholders.

Regulatory and Compliance Risks

The chemical industry is heavily regulated, with evolving environmental regulations, safety standards, and trade policies. Non-compliance can result in fines, production shutdowns, and legal liabilities.

Mitigation measures

Bodal keeps abreast with regulation changes and maintains accurate and comprehensive records of all compliance-related activities. Further, it ensures all necessary environmental permits and licenses are obtained and maintained.

HUMAN RESOURCE MANAGEMENT

At Bodal Chemicals, employees are the foundation of the Companys success. The organisation fosters a culture of diversity and inclusion, essential for innovation and excellence.

Bodals focus on talent management shows in its ability to attract, retain, and develop a high-performing workforce, which is crucial to its growth. Collaboration is central to Bodals environment, where individuals unite around shared goals for collective success.

Recognising continuous learning, Bodal emphasises employee development through comprehensive training programmes that motivate, upskill, and empower the workforce. These initiatives align employees with evolving industry trends and global best practices, enabling Bodal to attract and retain top talent.

Implementing forward-thinking HR initiatives and effective people management reflects Bodals commitment to its human capital. By prioritising employee well-being, career growth, and skill enhancement, the Company fosters a positive and engaging workplace culture that encourages loyalty and long-term commitment. As of March 2025, Bodal Chemicals employs over 2000 individuals, showcasing its dedication to building a strong, capable, and motivated team.

SHE Policy

Bodal Chemicals is deeply committed to sustainable growth and the well-being of society through its robust Safety, Health, and Environment (SHE) policy. By prioritising these crucial aspects, the Company strives to meet the needs of all its stakeholders while progressing towards its long-term strategic plan (LTSP) and its ambitious Target Zero Pollution goal. Safety: Safety is a core principle embedded in all of Bodals operations. To ensure a secure working environment, the Company has appointed dedicated safety representatives at each plant who work closely with the central safety team. All new hires undergo thorough safety training as part of their induction. This extensive program includes classroom instruction on safety principles, Material Safety Data Sheets (MSDS), and emergency protocols, complemented by practical hands-on training and regular safety drills. Appropriate personal protective equipment is mandatory for all personnel, and fire hydrant systems are installed throughout its facilities to mitigate fire hazards effectively.

Health: The health and well-being of its employees are of utmost importance at Bodal. To safeguard their health, the Company operates an on-site Occupational Health Centre (OHC) staffed with a full-time physician and a dedicated medical support team, with a 24/7 ambulance service available. The OHC provides comprehensive healthcare services, including pre-employment screenings, regular check-ups, outpatient treatment, and annual in-depth medical assessments covering pathology, radiology, and specialised organ function tests. To proactively manage potential health risks, Bodal offers workplace hazard training and conducts health campaigns focused on prevalent diseases such as malaria, dengue, chikungunya, and vitamin B12 de_ciency.

Environment: Bodal Chemicals has two in-house e_uent treatment plants (ETPs) designed to meet international safety and environmental norms, along with preliminary treatment and incineration facilities. The company maintains strict internal environmental compliance controls and operates a transparent system for recording and sharing data with state environmental authorities. Beyond its own infrastructure, Bodal is also connected to a common e_uent treatment facility. Its environmental management is guided by the corporate SHE policy, the goal of Target Zero Pollution, and continuous evaluation of risks and improvements from an engineering and process perspective.

SUPPLY CHAIN MANAGEMENT

Bodal Chemicals, a global leader in over 30 countries, delivers innovative solutions that add value to its customers. Recognising the role of supply chain excellence in todays competitive environment, Bodal invests in advanced systems to empower clients and enhance operations.

The Companys supply chain strategy combines strategic planning, cutting-edge tools, and strong partnerships to optimise the value chain. From demand forecasting and procurement to

INFORMATION TECHNOLOGY

Bodal Chemicals uses advanced technology to drive operational excellence and sustain a competitive edge. Aware of ITs crucial role in the current business landscape, the Company commits to continuous enhancement and oversight of its IT infrastructure.

Bodals integrated IT systems efficiently manage databases, monitor operations, and provide insights for strategic decision-making. By leveraging top manufacturing, inventory control, and logistics, Bodal ensures integrated operations at every stage. This commitment to excellence is evident in Bodals production facilities, where continuous monitoring and process improvements enhance efficiency. By developing expertise in its trade network and providing training programmes for its sales force, Bodal reinforces its reputation as a reliable and forward-thinking partner.

software solutions and timely upgrades, the Company ensures accurate data analysis and stays updated with technological innovations.

Bodals robust Enterprise Resource Planning (ERP) system streamlines processes organisation-wide. This system supports supply chain expansion, enhances sourcing precision, and improves forecasting, reinforcing Bodals position as a forward-looking, tech-enabled enterprise.

CAUTIONARY STATEMENT

Statements in the Directors Report, Management Discussion and Analysis or elsewhere in this annual report contain forward-looking statements, including, but without limitation, statements relating to implementing strategic initiatives and other statements relating to Bodal Chemicals Ltd.s future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning our businesss development, several risks, uncertainties, and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macroeconomic, Governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. Bodal Chemicals Ltd. undertakes no obligation to publicly revise any forward-looking statements to reflect future/likely events or circumstances.