Borosil Scientific Ltd Management Discussions

GLOBAL ECONOMY The global economy in 2025 and early 2026 continued to demonstrate resilience but remained pressured by geopolitical conflicts, fragmented supply chains and trade dynamics, and tight financial conditions. According to the International Monetary Funds World Economic Outlook, global GDP growth is expected to moderate slightly to 3.1% in 2026, reflecting the economic toll of ongoing conflicts in West Asia, unpredictable trade policy shifts, and the implementation of protective tariffs across major economies. Advanced economies face subdued momentum from structural constraints such as aging labor forces and energy-related pressures that continue to increase the cost of industrial production. Meanwhile, commodity-importing emerging markets face headwinds from higher input costs and currency volatility. As a result, global headline inflation is expected to be around 4.4% in 2026 before resuming its downward trajectory. In response, industrial and manufacturing sectors are fundamentally rethinking their operational strategies. Companies are increasingly prioritizing localized supply chains, process automation, and sustained investments in technology to mitigate bottlenecks and maintain profitability and operational efficiency. Source: IMF World Economic Outlook, April 2026 Real GDP Growth Projections (in %) (Chart showing Real GDP Growth Projections: Global Economy, Advanced Economies, Emerging Markets and Developing Economies for 2025(E), 2026(P), 2027(P)) E: Estimated P: Projected Source: IMF World Economic Outlook Projections, April 2026 INDIAN ECONOMY As the fastest-growing major economy in the world, India stands out as a definitive bright spot. GDP growth is estimated at 7.4% for FY 2025-26, driven by strong domestic consumption, sustained and targeted government expenditure on physical infrastructure, and a rapidly expanding manufacturing base. The manufacturing sector recorded solid expansion, supported by strong export demand for engineering and consumer goods. Production-Linked Incentive (PLI) schemes, combined with a strong push toward digital public infrastructure and logistics, are accelerating Indias integration into complex global supply chains. Furthermore, the "China+1" strategy adopted by multinational corporations continues to disproportionately benefit Indian manufacturing, driven by a skilled workforce, improving ease of doing business, and strong intellectual property protections. Increasing private and public investments in healthcare, R&D, and advanced manufacturing are positioning India as a pivotal, competitive hub for scientific and industrial innovation. The Reserve Bank of India projects medium-term growth to remain in the range of 6.5%-7.0%, underpinned by macroeconomic stability, improving private investment, and strong consumption fundamentals. GDP Growth Projections (in %) (Chart showing GDP Growth Projections for FY 2024-25 (E), FY 2025-26 (P), FY 2026-27 (P)) E: Estimated P: Projected (Sources: MOSPI, RBI Keeps Rates on Hold, Forecasts 6.9% Growth for FY 2026-27) INDUSTRY OVERVIEW Pharmaceutical Market Global The global pharmaceutical industry was valued at approximately US 1.62Tnin2025andisprojectedtoreachUS 1.62 Tnin 2025 andisprojectedtoreachUS 1.72 Tn in 2026, growing at a year-over-year rate of 5.8%. This expansion is driven by demographic shifts, alongside the rising prevalence of chronic lifestyle conditions. Furthermore, scientific breakthroughs in novel biologics, complex large-molecule drugs, and targeted gene therapies are revolutionizing patient care globally. While pharmaceutical entities dedicate capital toward drug discovery and commercialization, their operations require absolute analytical precision and unbroken regulatory compliance. Borosil Scientific operates as a structural enabler in this ecosystem. Every API manufacturing block, quality control lab, and R&D hub relies on contaminant-free infrastructure. Our Class A volumetric flasks ensure precise chemical titrations, while premium sample vials guarantee drug integrity during HPLC analysis. Our precision-engineered glassware forms the non-negotiable backbone of global pharmaceutical quality assurance. With increasing adoption of GLP-1 drugs across the country, Borosil Process Systems is well positioned through its peptide synthesizers and reactor systems. India India supplies approximately 20% of global demand for generic medicine by volume. In 2025, the domestic Indian market was valued at approximately US 55Bn.Itisontracktowardalong\u2212termtargetofUS 55 Bn . Itisontracktowardalong \u2212 termtargetofUS 120-130 Bn by 2030, supported by an increasing number of FDA-approved manufacturing facilities. (Source: IBEF - Indian Pharmaceutical Industry Outlook) Key growth drivers a) Demographic shifts and an aging global population accelerating demand for chronic disease management and lifelong therapies. b) A surge in R&D spending on novel therapeutics, complex large-molecule drugs, and personalized medicine. c) Rising healthcare consumerization and expanding insurance coverage in emerging economies, widening the patient base. d) Sustained export momentum of generic medicines to highly regulated markets, catalyzed by imminent patent expiries for several blockbuster drugs. e) Proactive government policies, such as Indias PLI scheme, incentivizing domestic Active Pharmaceutical Ingredient (API) manufacturing and greenfield R&D setups. Biotechnology Market Global The global biotechnology market is experiencing an unprecedented boom, expanding from an estimated US 1.77Tnin2025toUS 1.77 Tnin 2025 toUS 2.02 Tn in 2026. It is expected to further reach approximately US$ 6.34 Tn by 2035, registering a robust CAGR of 13.61% from 2026 to 2035. This sector is rapidly transitioning from a niche research field into a mainstream commercial powerhouse, driven by successes in mRNA technologies, gene editing, and cellular agriculture. Global Biotechnology Market (US$ Tn) (Chart showing Market Size 2025, 2026, 2035 and CAGR 13.61%) (Source: Precedence Research - Biotechnology Market) India Mirroring global trends, Indias biotechnology sector is also experiencing exponential growth. Having reached US 195Bnin2025 ,upfromUS 195 Bnin 2025 , upfromUS 165 Bn in 2024, the sector is advancing at a staggering 18% annual growth rate. The sector is on track to reach a national target of US$ 300 Bn by 2030. (Source: PIB - Indias Bioeconomy Surges) Key growth drivers a) Advancements across core biomanufacturing sub-sectors, including genomics, predictive biomarkers, and vaccine development. b) Commercial shift toward personalized medicine and bio-agriculture, unlocking new global revenue streams. c) FDI-friendly policies encouraging ecosystem scaling in emerging biotech hubs, including India. d) Collaborative public-private research accelerating bench-to-market timelines. Biotechnological workflows deal exclusively with highly sensitive living organisms and complex cellular structures, with zero tolerance for cross-contamination. Borosil Scientific directly resolves these requirements. We supply premium microcentrifuge tubes, high-purity reagent bottles, and specialty glass bioreactors designed specifically for delicate cell culture propagation and fermentation scale-ups. Chemical Market Global The global chemical industry was valued at approximately US 6.2Tnin2024andwasprojectedtogrowmodestlytoaroundUS 6.2 Tnin 2024 andwasprojectedtogrowmodestlytoaroundUS 6.3 Tn in 2025. It remains the critical upstream supplier for virtually every modern manufacturing sector, from automotive to consumer electronics. Forecasts indicate steady expansion driven by sustainability trends, specialty chemicals, and demand from energy transition sectors like batteries and green hydrogen. (Source: MarketsandMarkets - Global Chemical Industry Outlook 2025) India The Indian chemical industry continues to demonstrate resilience amid a dynamic global operating environment. While FY 2025-26 has been marked by evolving geopolitical developments, trade-related uncertainties, and periodic supply chain disruptions, the sector is witnessing signs of gradual stabilization, supported by improving demand indicators and strengthening customer inquiries across key segments. Valued at approximately US 250Bnin2024 ,theindustryisprojectedtoreachUS 250 Bnin 2024 , theindustryisprojectedtoreachUS 300 Bn by 2028 and expand further to US$ 1 Tn by 2040, underscoring its long-term growth potential. With a diverse portfolio of over 80,000 commercial products, the sector serves as a critical enabler for industries ranging from agriculture and pharmaceuticals to consumer goods, infrastructure, automotive, and electronics. Its broad spectrum includes bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers, and fertilizers. India remains the worlds sixth-largest chemical producer and the third-largest in Asia, contributing nearly 7% to the nations GDP. Supported by rising domestic consumption, increasing manufacturing competitiveness, favorable policy initiatives, and global supply chain diversification trends, the Indian chemical industry is well-positioned to capitalize on emerging opportunities and sustain its growth momentum over the long term. (Source: IBEF - Indian Chemical Industry) Key growth drivers a) The upstream, foundational nature of chemicals across advanced manufacturing sectors such as automotive, electronics, pharmaceuticals, renewable energy, and infrastructure. b) Industrial push for sustainable, green chemistry, solvent recovery, and energy-efficient processing. c) Domestic scaling in emerging economies driven by rising consumption across crucial end-user industries such as food processing, personal care, and home care. d) Robust export demand for high-margin specialty and electronic chemicals, supported by global China+1 diversification strategies. e) Strategic establishment of sprawling Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) attracting large, multi-year capital expenditures. f) Chemical synthesis involves extreme temperatures and highly corrosive environments, requiring resilient infrastructure and uncompromising process control. The chemical industry relies extensively on robust pilot plants, continuous process optimization, and rigorous sample testing to maximize yield efficiency and ensure product purity. Borosil Scientific addresses these conditions through its heavy-duty advanced process systems. Our industrial-scale borosilicate glass reactors, robust filtration assemblies, and precision distillation units provide chemical engineers with safe, scalable, and corrosion-resistant infrastructure. This enables the seamless, successful transition of chemical production from benchtop formulations to commercial-scale operations. Agrochemicals Market Global The global agrochemicals market is projected to reach US 251.4Bnin2026andgrowtoUS 251.4 Bnin 2026 andgrowtoUS 346.7 Bn by 2033, registering a CAGR of 4.7% over the forecast period. The growth is primarily driven by increasing demand for high-yield and quality crop production across key agricultural sectors, where efficient pest control, soil fertility, and crop protection are critical. (Source: Persistence Market Research - Agrochemicals Market) India Indias agrochemicals market is estimated at US 9.59Bnin2026 ,andisprojectedtoreachUS 9.59 Bnin 2026 , andisprojectedtoreachUS 13.25 Bn by 2031, reflecting a CAGR of 6.66% over 2026-2031. This growth is being driven by strong domestic manufacturing capabilities, expanding export pipelines, and supportive policy measures that promote sustainable inputs. India continues to hold its position as the fourth-largest global producer, exporting finished agrochemical products worth approximately US$ 5 Bn annually to key markets across Europe, Southeast Asia, and West Africa. At the same time, advances in formulation science are reshaping the sector, with innovations such as nano-nutrient liquids and water-dispersible granules gaining wide farmer acceptance due to their lower dosage requirements and improved field safety. (Source: Mordor Intelligence - India Agrochemicals Market) Key growth drivers a) Imperative to dramatically enhance agricultural productivity and crop yields amid shrinking arable land and rising populations. b) Increasing climate volatility disrupting traditional growing seasons, requiring advanced and adaptive crop protection. c) Transition toward integrated pest management and precision farming. d) Intensive development of bio-based, low-residue crop protection products, pushing companies to intensify R&D and field-testing capabilities to meet stringent export standards. Developing effective yet ecologically safe agrochemicals requires hyper-accurate soil testing, pesticide residue analysis, and complex formulation development. Borosil Scientific equips the agrochemical sector with these analytical tools. Our portfolio includes Kjeldahl digestion units for nitrogen and protein analysis in fertilizers, and Soxhlet extraction apparatus for isolating active botanical compounds. Together, these ensure that every agrochemical innovation meets environmental safety and compliance standards before deployment in the fields. Laboratory Equipment Industry Global The global laboratory equipment market is on track to reach US$ 50.27 Bn by 2030, underpinned by a sharp uptick in targeted research funding and capital deployment into high-intensity R&D environments. Government allocations, particularly those directed toward biotechnology clusters and translational research, are not just expanding budgets but actively reshaping procurement patterns, with institutions prioritizing precision, automation, and scalability in lab infrastructure. At the same time, the rapid scale-up of biotechnology and pharmaceutical pipelines is creating sustained demand for specialized, high-throughput equipment. This is reinforcing a broader transition toward integrated, data-centric benchtop ecosystems, where instruments are increasingly interconnected, software-enabled, and designed to deliver real-time analytical insights. (Source: Grand View Research - Laboratory Equipment Market) India Indias laboratory equipment market is projected to reach revenues of US$ 3,348 Mn by 2030, growing at a CAGR of 6.7% over 2024-2030. This growth is being supported by a steady expansion in domestic manufacturing, as global and regional players increasingly establish production bases in India, attracted by a favorable regulatory environment and strong underlying demand. At the same time, the presence of a broad and competitive base of local manufacturers is strengthening supply resilience and improving cost competitiveness. (Source: Grand View Research - India Laboratory Equipment Market) Key growth drivers a) Industry-agnostic adoption of laboratory automation and AI-enabled data analytics. b) Demand for faster diagnostic turnarounds, driving uptake of smart, modular, and energy-efficient systems that minimize human error. c) Growing public and private investments in healthcare diagnostics, clinical testing infrastructure, and institutional laboratories. d) Rapid proliferation of diagnostic testing centers penetrating into Tier 2 and Tier 3 cities across developing nations. Through our LabQuest brand, Borosil Scientific is modernizing analytical infrastructure across Indian laboratories. We offer a sophisticated range of benchtop instrumentation, including high-speed centrifuges, precision bottle-top dispensers, vortex mixers, and automated analytical units. Designed and manufactured domestically, these instruments provide laboratories with cost-effective, world-class alternatives backed by superior local serviceability. This direct intervention reduces equipment downtime and lowers the capital barrier to entry for advanced research. Laboratory Consumables Market Global The laboratory consumables market is a key constituent of the broader life science and laboratory consumables market, which encompasses essential products such as reagents, glassware, plasticware, filtration products, and other laboratory supplies. The overall market was valued at US 31.88Bnin2025andisprojectedtoincreasetoUS 31.88 Bnin 2025 andisprojectedtoincreasetoUS 33.64 Bn in 2026, further growing to US$ 51.70 Bn by 2034, registering a CAGR of 5.52% during the forecast period. Global Lab Consumables Market (US$ Bn) (Chart showing Market Size 2025: 31.88, 2026: 33.64, 2034: 51.70 with CAGR 5.52%) (Source: Grand View Research - Life Science Consumables Market) India The Indian lab consumables market is witnessing parallel robust growth. The Indian laboratory consumables market was valued at US 979.93Mnin2025andisprojectedtoreachUS 979.93 Mnin 2025 andisprojectedtoreachUS 1.77 Bn by 2034, expanding at a CAGR of 6.81%. Among product categories, pipettes and tips accounted for the largest market share in 2025, reflecting their widespread use across laboratory and research applications. Meanwhile, the tubes and vials segment is expected to witness the fastest growth during the forecast period, emerging as the most attractive opportunity area within the laboratory consumables market. Indian Lab Consumables Market (US$ Mn) (Chart showing Market Size 2025: 979.93, 2034: 1,773.09 with CAGR 6.81%) (Source: Deep Market Insights - India Lab Consumables Market) 6) Demand Cyclicality in End-User Industries: Certain segments such as chemicals and industrial manufacturing are subject to cyclical demand patterns, which may impact capital expenditure on process equipment and laboratory infrastructure. COMPANY OVERVIEW Borosil Scientific Limited is a premier, integrated scientific and laboratory solutions provider, offering a specialized portfolio of over 4,500 precision products. Our consolidation of scientific, industrial, and process systems businesses under one umbrella has transformed us from a product vendor into a comprehensive end-to-end solutions partner. We cater to diverse, high-growth sectors including Pharmaceuticals, Research and Academia, Specialty Chemicals, Food and Nutrition, and Environmental Science, with a global footprint that spans over 90 countries. Manufacturing Advancements Innovation, uncompromising quality control, and operational self-reliance from the core of our manufacturing approach. We have actively expanded our domestic production capacities to meet surging domestic demand and growing export requirements, proactively mitigating global supply chain vulnerabilities. Our state-of-the-art facilities use premium ISO-compliant glass tubing, backed by in-house NABL-accredited calibration laboratories that ensure repeatable precision for our critical Class A volumetric products. Further, the integration of Geol Scientific has equipped our engineering teams to design and fabricate complex, custom industrial-scale pilot plants and automated reaction systems. We continue to use digital integration and Industry 4.0 concepts on the factory floor. This enhances product traceability and quality assurance. Our QR-coded calibration certificates and comprehensive ISI certifications confirm that every product meets global benchmarks. Expansion Strategy Our strategic growth blueprint for FY 2026-27 and beyond targets value creation and market penetration across four areas. a) Lab Instrumentation (LabQuest): We are rapidly expanding our presence in the high-growth liquid handling and automated analytics segments, focusing on high-margin, proprietary innovations designed at our Pune R&D center. b) Process Systems: The Company is rapidly scaling its bespoke offerings in customized chemical synthesis equipment to capture ongoing capital expenditure in Indias booming specialty chemicals and API manufacturing sectors. c) Pharmaceutical Packaging: We are expanding our manufacturing into adjacent, higher-value segments, including siliconized vials, specialized prefilled syringes, and precise glass cartridges for biologic and complex injectable drug manufacturers. d) Water Analysis and Filter Papers: We are enhancing our consumable portfolio to capitalize on the increasingly stringent environmental monitoring and food safety testing regulations across both domestic and international markets. Recently, we have entered into a technical collaboration with a German manufacturer of water systems. This has strengthened Borosil Scientifics footprint in one of the key product categories in Laboratories, Lab Water Purification Systems. Our Bhurach manufacturing facility is equipped to produce filter paper, strengthening our in-house product portfolio and empowering the scientific industry with reliable solutions. Market Opportunities by Sector a) Pharmaceuticals and Quality Control: Regulatory compliance requirements drive predictable, recurring demand for our precision volumetric glassware and USP Type I primary packaging. b) Chemicals and Process Engineering: The national strategic shift toward expanded domestic manufacturing creates a massive, multi-year runway for our specialized glass-lined reactors, distillation units, and pilot-plant infrastructure. c) Academia and Research: Increased and sustained government investment in higher education and institutional research provides a reliable volume baseline for our core laboratory consumables and basic instrumentation. Outlook by Business Division The outlook across all our business verticals remains positive. Our core Laboratory Glassware and Consumables division delivers steady volume growth through an established distributor network and growing digital procurement channels, including the Government-Marketplace. The LabQuest instrumentation portfolio is capturing significant market share by substituting expensive, hard-to-maintain imports with high-performance, serviceable domestic alternatives. Our Process Systems division is well-positioned to benefit from the ongoing industrial capacity in the chemical sector. Meanwhile, our Pharmaceutical Packaging arm benefits from long-term, high-volume supply contracts with global injectable manufacturers. Moving forward, cross-selling these integrated solutions as a unified ecosystem to institutional clients will be a primary lever for margin expansion and sustained revenue growth. PERFORMANCE OVERVIEW Operational and Financial Review In FY 2025-26, Borosil Scientific demonstrated robust operational resilience and value creation, supported by an expanded product portfolio, integrated manufacturing capabilities, and optimized supply chain logistics. Performance by Segment Please refer to Note 41- Segment Reporting of Standalone Financial Statements and Note 43 - Segment Reporting on Consolidated Financial Statements. (\u20b9 in lakhs) Metric (FY 2025-26) Standalone Consolidated Turnover 42,753.08 46,734.15 EBITDA 8,021.63 7,173.96 Profit before Exceptional Items and Tax 6,227.40 5,137.28 Profit for the year 3,972.46 3,458.12 Details of significant changes in key financial ratios, along with detailed explanations: Ratios (Based on Standalone Financials) FY 2025-26 FY 2024-25 Change (%) Explanation where change is more than 25% Return on Net Worth (%)* 7.04 6.71 4.99 - Return on Capital Employed (%) 13.28 11.27 17.86 - Basic Earnings per Share (EPS) (\u20b9) 4.47 3.94 13.42 - Debtors Turnover (no. of times) 6.31 6.75 (6.45) - Inventory Turnover (no. of times) 4.68 4.45 5.24 - Interest Coverage Ratio (no. of times) 148.85 63.16 135.67 Primarily due to decrease in finance cost and increase in EBIT Debt Service Coverage Ratio (no. of times) 45.21 21.10 114.27 Primarily due to decrease in borrowings Current Ratio (no. of times) 4.13 4.22 (2.10) - Debt-to-Equity Ratio (no. of times) 0.00 0.01 (94.67) Primarily due to decrease in borrowings Operating Profit Margin (%) 14.66 12.51 17.24 - Net Profit Margin (%) 9.29 8.92 4.15 - The change in return on Net Worth is primarily due to increase in earnings. RISK MANAGEMENT Navigating a dynamic and interconnected global market requires a structured, proactive, and institutionalized approach to risk management. The Company has institutionalized a structured risk management framework which enables early identification and active monitoring, assessing, and effective mitigation of key operational and strategic risks. Key Risk Description and Impact Mitigation Strategy Macroeconomic and Supply Chain Volatility Global economic moderation, inflationary pressures, global geopolitical tensions, and trade disruptions may impact demand for laboratory equipment affecting raw material procurement and export logistics. The Company mitigates supply exposure through supplier diversification, maintaining data-driven inventory buffers for critical components, and localized component sourcing. Input Cost Fluctuations, Competitive and Pricing Pressure Volatility in global energy prices, coupled with fluctuations in the cost of specialized raw glass tubing, may exert pressure on the Companys gross margins. This impact is further accentuated by intensifying competition from both domestic organized players and established global manufacturers, which may lead to sustained pricing pressure, particularly in commodity-based product segments. The Company mitigates margin and pricing pressures through strategic initiatives such as dual-fuel manufacturing capabilities, long-term price-locked vendor contracts, and dynamic pricing mechanisms that enable timely cost pass-throughs. Additionally, its strong global brand positioning, coupled with deep-rooted customer relationships in value-added and specialized product segments, supports customer retention and sustains long-term business stability. Vendor Dependency and Import Dependency Risk The Company is exposed to vendor concentration and import dependency risks, particularly for critical raw material such as borosilicate glass tubing and soda lime glass used in Laboratory Glassware and Pharmaceutical Primary Packaging. Reliance on a limited pool of domestic and international suppliers, along with technological constraints in developing indigenous capabilities for complex components, may impact supply continuity and cost stability. The Company is reducing import dependency through localization and backward integration initiatives, diversification of the vendor base, and strengthening multi-vendor sourcing frameworks with enhanced technical and operational capabilities and maintaining strategic long-term relationships with global suppliers to ensure supply resilience and continuity. Quality and Regulatory Compliance Serving stringently regulated sectors means any quality lapse or non-compliance poses a severe risk to brand equity and client retention. We counter this through enhanced internal audits, automated optical quality check systems on the production line, and continuous compliance with global ISO/ASTM and USP standards. Foreign Exchange Risks With a growing export footprint and specialized import requirements, currency fluctuations present a continuous financial risk. This exposure is managed through structured financial hedging mechanisms, forward contracts, and natural business hedges across our global operations. Technology and Innovation Risk Rapid technological advancements in laboratory automation, digital integration, and alternative materials may render existing products less competitive leading to product obsolescence. Sustained investments in R&D and product innovation with new product development, expansion of product lines and continuous engagement with customers and market research to anticipate evolving requirements.