Chemkart India Ltd Management Discussions

A. COMPANY OVERVIEW

Our Company was originally incorporated as Chemkart India Private Limited under the Companies Act, 2013, pursuant to a Certificate of Incorporation dated 06 March 2020 issued by the Deputy Registrar of Companies, Maharashtra, with Mr. Ankit Shailesh Mehta and Ms. Parul Shailesh Mehta as the initial subscribers to the Memorandum of Association.

Subsequently, our Company was converted into a public limited company and its name was changed to Chemkart India Limited vide a fresh Certificate of Incorporation dated 04 October 2024, issued by the Registrar of Companies, Central Processing Centre, bearing Corporate Identification Number (CIN) U51220MH2020PLC338631.

Our Companys Equity Shares were listed on the SME Platform of BSE Limited in July 2025, pursuant to its maiden initial public offering comprising a fresh issue of 26,00,000 Equity Shares and an offer for sale of 6,29,200 Equity Shares by the Promoter Selling Shareholders, aggregating to approximately ^ 8,008.42 lakh.

B. BUSINESS OVERVIEW

Our Company is engaged in the trading and value-added processing of nutraceutical, health and sports- supplement ingredients, and is positioned as a one-stop destination for manufacturers of finished nutritional and dietary-supplement products. We offer products across seven principal categories - Amino Acids, Health Supplements, Herbal Extracts, Nucleotides, Protein, Sports Nutrition and Vitamins - supplied predominantly on a Business-to-Business (B2B) basis.

Our business may be broadly divided into the following categories:

i. Trading of nutraceutical and health-supplement ingredients;

ii. Processing (blending and grinding) of raw materials into customer-specific formulations at our Bhiwandi facility;

iii. Backward-integrated marketing and trading of nutraceutical products through our subsidiaries.

We operate a warehousing, blending and grinding facility spread over approximately 28,259 sq. ft. at Kalher, Bhiwandi, Thane, Maharashtra, with an installed capacity of approximately 540 MT per annum on the grinding line and 450 MT per annum on the blending line, used primarily to create customer-specific formulations. During the first half of FY 2024-25, we diversified and strengthened backward integration by acquiring 99% equity stakes in two subsidiaries - Easy Raw Materials Private Limited and Vinstar Biotech Private Limited - both engaged in the marketing, trading and, prospectively, formulation of nutraceutical and wellness products for human and animal consumption.

We believe our quality-tested product portfolio, in-house processing capabilities and customer-centric, B2B- focused approach have enabled us to build long-standing relationships with customers and suppliers across India.

C. GLOBAL ECONOMY

Global economic activity has remained resilient but uneven, with growth diverging across major economies amid continuing trade-policy uncertainty, tighter-for-longer financial conditions in several jurisdictions, and gradually moderating inflation. Growth in the United States has been supported by robust consumption, while momentum in China and parts of Europe has been comparatively subdued, weighed down by soft manufacturing activity and weaker external demand. Central banks in most major economies are proceeding cautiously with policy easing, balancing progress on disinflation against persistent services-price pressures and periodic bouts of currency and commodity volatility.

D. INDIAN ECONOMIC SCENARIO OPPORTUNITIES

India has continued to be among the fastest-growing major economies, underpinned by resilient private consumption, sustained public capital expenditure and a gradual pick-up in private investment supported by moderating interest rates. Headline inflation has remained broadly within the Reserve Bank of Indias target band, aided by softer food and energy prices, providing room for a more accommodative monetary policy stance. Continued Government focus on ease of doing business, infrastructure creation and formalization of the economy is expected to support demand across consumer-facing and B2B sectors, including nutraceuticals, even as elevated global trade-policy uncertainty and currency volatility remain watch points for import-dependent businesses.

E. DOMESTIC DEMAND SUPPORTS ACTIVITY

Domestic demand indicators, including private consumption and services activity, have remained resilient, supporting demand for health, wellness and nutrition-related products. Rising health consciousness, greater participation in fitness and sports nutrition, and increasing disposable incomes across urban and semi-urban India continue to expand the addressable market for nutraceutical ingredients and finished supplements, benefiting B2B ingredient suppliers such as our Company.

F. INDUSTRY STRUCTURE AND DEVELOPMENT

Our Company operates in the Indian nutraceutical, health and sports-supplement industry - an intersection of the nutrition and pharmaceutical sectors covering amino acids, proteins, vitamins, herbal extracts, nucleotides and related dietary ingredients. The Indian nutraceutical market remains largely fragmented, comprising both organized and unorganized players, with pricing and demand influenced by global raw- material availability, currency movements and the evolving regulatory framework administered by the Food Safety and Standards Authority of India (FSSAI). Demand has been structurally supported by rising preventive- health and immunity-linked nutrition awareness following the COVID-19 pandemic. We believe this fragmented, high-growth landscape continues to present opportunities for organized, quality-focused distributors and processors, such as our Company, to expand market share through customer trust, product breadth, in-house processing capability and reliable supply chains.

G. OPPORTUNITIES, THREATS, RISK AND CONCERNS

Our results of operations and financial condition are subject to a number of risks and uncertainties, including, among others:

- Dependence on the continuous and timely supply of raw materials/traded products from key suppliers, and the absence of long-term or exclusive supply arrangements;

- Geographical concentration of operations, with revenue and facilities significantly weighted towards the Mumbai Metropolitan Region;

- Exposure to volatility in global commodity prices and foreign exchange rates affecting imported ingredients;

- Regulatory risk given the evolving compliance landscape applicable to nutraceutical, food and health- supplement products, including FSSAI and related requirements;

- Working-capital intensity of the business, given the need to carry inventory and extend credit to customers;

- Integration risk associated with the recently acquired subsidiaries, Easy Raw Materials Private Limited and Vinstar Biotech Private Limited, and their planned expansion into manufacturing;

- General macroeconomic, interest-rate and credit-risk factors affecting customers ability to pay and the Companys cost of borrowing.

Notwithstanding the above, the Company believes that its diversified product portfolio across seven categories, its in-house blending and grinding capability, its expanding customer base and its recent backward integrafion into subsidiary operafions position it well to capture opportunifies arising from the structural growth of the Indian nutraceutical industry.

H. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Revenue growth normalized after a strong base year. Revenue from Operafions grew 4.58% YoY, from ^ 203.28 Crore in FY 2024-25 to ^ 214.66 Crore in FY 2025-26; a marked deceleration from the 53.97% growth recorded in the prior year, consistent with growth moderating off a much larger base. Other Income fell sharply (-55.80%), from ^ 2.18 Crore to ^ 0.96 Crore, likely reflecting lower foreign-currency fluctuation gains compared with FY25. As a result, Total Income grew just 3.94% to ^ 213.56 Crore.

Margins compressed, driven by input costs. Cost of Material Consumed rose 53.13% YoY, from ^ 7.49 Crore to ^ 11.46 Crore - a much faster pace than revenue growth - indicating either raw-material price inflafion or a shift in mix toward more processing-intensive (as opposed to pure trading) volumes. Employee Benefit Expenses confinued their steep climb (+46.76%, to ^3.12 Crore) as the Company confinued to scale headcount, including at its subsidiaries. Other Expenses rose a more moderate 14.93%. These pressures were only partly offset by lower Finance Costs (-20.11%, to ^ 1.45 Crore) and lower Depreciation (-28.20%, to ^ 0.44 Crore), both suggesfing confinued deleveraging and a slower pace of capital expenditure during the year.

Profitability declined for the first time in the three-year track record. EBITDA fell 11.66% YoY, from ^ 32.76 Crore to ^ 28.94 Crore, with EBITDA margin contracting by 251 bps, from 16.12% to 13.61%. Profit Before Tax declined 14.07%, from ^ 32.59 Crore to ^ 28.01 Crore, and Profit After Tax declined 14.37%, from ^ 24.75 Crore (^ 24.26 Cr on a PBT-less-tax basis) to ^ 20.77 Crore. PAT margin contracted by 217 bps, from 11.94% to 9.77%.

I. OUTLOOKS FOR 2026-27.

FY 2025-26 was a year of consolidation rather than confinued high growth for the Company, with revenue growth normalizing to 4.58% and EBITDA and PAT margins contracfing as raw-material costs rose faster than revenue.

Going into FY 2026-27, the Companys priorities include:

(i) scaling up its processing and blending operations at the Bhiwandi facility to capture a greater share of value-added revenue;

(ii) integrating and growing its two newly acquired subsidiaries, Easy Raw Materials Private Limited and Vinstar Biotech Private Limited, including their planned foray into nutraceutical manufacturing;

(iii) deepening its customer base and product portfolio across its seven core categories; and

(iv) strengthening working-capital management and internal systems to support a listed-company governance framework.

While near-term performance will remain sensitive to global raw-material prices, currency movements and regulatory developments, the Company believes the underlying growth drivers of the Indian nutraceutical industry - rising health awareness, growing sports-nutrition adoption and formalization of B2B supply chains - support a continued growth trajectory into FY 2026-27 and beyond.

J. RISK MANAGEMENT

Risk management is a key aspect of the Companys Corporate Governance framework, aimed at improving governance practices across the Companys activities. The Companys risk management policy and processes are designed to enable it to proactively identify and manage uncertainty and changes in the internal and external environment, so as to limit adverse impacts and capitalize on emerging opportunities. The Board of Directors has adopted a risk management policy and procedures in this regard, which it reviews and amends from time to time, covering supply-chain, regulatory, financial, foreign-exchange and integration-related risks relevant to the Companys business.

K. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company implemented suitable controls to ensure its operational, compliance and reporting objectives. The Company has adequate policies and procedures in place for its current size as well as the future growing needs. These policies and procedures play a pivotal role in the deployment of the internal controls. They are regularly reviewed to ensure both relevance and comprehensiveness and compliance is ingrained into the management review process.

Adequacy of controls of the key processes is also being reviewed by the Internal Audit team. Suggestions to further strengthen the process are shared with the process owners and changes are suitably made. Significant findings, along with management response and status of action plans are also periodically shared with and reviewed by the Audit Committee. It ensures adequate internal financial control exists in design and operation.

L. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO THE OPERATIONAL PERFORMANCE

During the year under review, your Company has achieved satisfactory financial results and details are provided in the Directors Report.

M. MATERIAL DEVELOPMENTS ON HUMAN RESOURCES

Our strategic objective is to build a sustainable organization while creating growth opportunities for our employees and generating profitable returns for our investors. Employee benefit expenses grew from ^214.66 lakh in FY 2024-25 to ^312.00 lakh in FY 2025-26, an increase of 45.35%, following growth of 84.48% in the previous year, reflecting continued headcount additions and wage increases as the Company builds out its team, including at its recently acquired subsidiaries, even as overall revenue growth moderated during the year. The Company continues to invest in training and in building managerial and quality-control depth to support its post-listing growth plans. Employee relations remained cordial throughout the year.

N. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may constitute Forward-Looking Statements within the meaning of applicable securities laws and regulations. While these forward-looking statements reflect the Companys current assessment and expectations concerning its future business developments, actual results could differ materially from those expressed or implied due to various risks, uncertainties and other factors, including but not limited to economic conditions affecting demand and supply, price conditions in domestic and export markets, movements in currency exchange and interest rates, competitive pressures, changes in Government regulations, tax laws and other statutes, and other incidental factors. The Company undertakes no obligation to publicly revise any forward-looking statement to reflect future or likely events or circumstances.

	By order of the Board of Directors For Chemkart India Limited Sd/-
18th August 2026	Ankit Shailesh Mehta
Mumbai	Chairman and Managing Director DIN:06792217