Continental Seeds and Chemicals Ltd Management Discussions

The operating income of the Company for the financial year ended 31st March, 2026 stood at ?6151.08 Lakhs as against ?9075.01 Lakhs in the previous financial year ended 31st March, 2025. There is a decline in operating income, the Company has maintain the consistency in profitability, recording a net profit of ?100.54 Lakhs as compared to ? 182.53 Lakhs in the previous year

INDUSTRY OVERVIEW FOR THE COMPANY

The Company operates across diversified business segments comprising agricultural seeds, specialty and performance chemicals, mentha oil and critical pharmaceutical intermediates / active pharmaceutical ingredients (APIs). These sectors are integral to Indias broader objectives of strengthening domestic manufacturing, enhancing agricultural productivity, reducing import dependence, increasing value-added exports and establishing India as a reliable global manufacturing and supply-chain partner.

During FY 2025-26, the Indian economy continued to demonstrate resilience despite a challenging global environment characterised by geopolitical uncertainties, commodity- price volatility, changing trade policies and disruptions in international supply chains. The outlook for FY 2026-27 remains broadly positive, supported by domestic consumption, infrastructure and manufacturing investment, increasing export diversification, government initiatives for self-reliance and the growing integration of Indian manufacturers into global value chains.

AGRICULTURE AND AGRICULTURAL SEEDS

India continues to be one of the worlds largest agricultural producers and has significant potential to expand its presence in global agricultural and food markets. According to the Economic Survey 2025-26, Indias agricultural exports increased from approximately US$34.5 billion in FY 2019-20 to US$51.1 billion in FY 2024-25, representing a CAGR of approximately 8.2%. However, agricultural exports remained broadly stagnant between FY 2022-23 and FY 2024-25, highlighting the considerable untapped potential for higher-value and processed agricultural exports.

India is the worlds second-largest agricultural producer by value, while its share in global agricultural exports remains relatively modest. This gap between production strength and export penetration presents substantial opportunities for improving productivity, quality, traceability, post-harvest management, processing and value addition. The Economic Survey 2025-26 has identified the potential for India to achieve approximately US$100 billion of combined exports of agriculture, marine products and food and beverages over the next four years.

Agricultural Seeds

The agricultural seeds industry is strategically important for improving crop productivity, quality and resilience. Increasing adoption of high-yielding, hybrid and improved seed varieties, together with the need for climate-resilient agriculture, is expected to support long-term demand for quality seeds.

The sector is increasingly influenced by factors such as:

• adoption of improved and hybrid seed varieties;

• increasing focus on crop productivity and yield improvement;

• climate variability and demand for drought-, heat- and disease-resistant varieties;

• increasing mechanisation and commercialisation of agriculture;

• growth in horticulture and high-value crops;

• expansion of organised agricultural distribution networks;

• increasing farmer awareness regarding certified and quality planting material; and

• greater emphasis on traceability, quality assurance and technology-enabled agriculture.

CHEMICAL

The Indian chemical industry continues to occupy a strategically important position in the countrys manufacturing ecosystem. It has extensive linkages with pharmaceuticals, agriculture, automotive, construction, consumer products, textiles, plastics and other downstream industries.

According to the Department of Chemicals and Petrochemicals, the chemical and petrochemical industry encompasses more than 80,000 commercial products and plays an important role in food security, healthcare, agriculture and industrial development. The sector accounted for approximately 8.1% of manufacturing GVA at current prices in FY 2023-24.

The Department of Chemicals and Petrochemicals latest annual report also highlights Indias objective of increasing domestic chemical production, reducing import dependence, promoting innovation and technology adoption and improving sustainability and safety standards.

Indias chemical industry has also attracted significant investment. FDI equity inflows into the chemicals and petrochemicals sector reached approximately ?8,942 crore during FY 2024-25, compared with ?6,985 crore during FY 2023-24, representing an increase of approximately 28%.

The broader Indian chemicals market was estimated at approximately US$250 billion in 2024 and is projected to reach around US$300 billion by 2028. India is also increasingly positioned as an alternative manufacturing and sourcing destination under the global China+1 strategy.

SPECIALTY CHEMICALS

Specialty chemicals represent one of the higher-value segments of the Indian chemical industry. Demand is supported by agriculture, pharmaceuticals, personal care, construction, automotive, electronics, coatings, dyes and other industrial applications.

The Indian specialty chemicals market is expected to benefit from:

• increasing domestic consumption;

• import substitution;

• global supply-chain diversification;

• Chinas changing cost and regulatory environment;

• increasing outsourcing by multinational companies;

• higher demand for customised and application-specific chemicals;

• investments in manufacturing capacity;

• development of green and sustainable chemistry; and

• increasing emphasis on product quality and regulatory compliance.

The broader specialty chemicals market was valued globally at approximately US$64.5 billion in 2024 and is projected to reach approximately US$92.6 billion by 2033. Indias specialty chemicals industry is expected to benefit from increasing domestic demand and the relocation and diversification of global supply chains.

MENTHA OIL AND MINT-BASED PRODUCTS

India has historically maintained a dominant position in the global natural mentha oil and menthol market and remains an important production and export centre.

Mentha oil is widely used in pharmaceuticals, oral-care products, food and beverages, confectionery, cosmetics, personal care products and fragrances. Demand is therefore linked to both consumer spending and industrial demand across multiple end-use sectors.

FY 2025-26 INDUSTRY SCENARIO

During FY 2025-26, the mentha industry faced a more complex operating environment.

While India continued to remain a major global supplier of natural mentha oil, the industry came under increasing pressure from synthetic mint alternatives.

The growing use of synthetic mint products is becoming a structural challenge because synthetic products can offer relatively stable pricing, consistent quality and year-round availability. This has increased competitive pressure on natural mentha oil producers and exporters.

The sector has also remained sensitive to:

a) weather and crop conditions;

b) acreage and crop yields;

c) inventory levels;

d) pharmaceutical and personal-care demand;

e) international prices;

f) exchange-rate movements;

g) export duties and trade policies; and

h) competition from synthetic menthol and mint derivatives.

Exporters have additionally faced challenges arising from changes in international trade policies and tariffs, particularly in important export markets. The impact of US tariff measures during 2025 demonstrated the vulnerability of regional mentha- processing and export clusters to changes in international trade conditions.

OVERALL INDUSTRY OUTLOOK FOR FY 2026-27

The outlook for the Companys principal operating sectors remains broadly favourable, although the operating environment is expected to remain dynamic.

The agricultural seeds business is expected to benefit from increasing agricultural productivity requirements, demand for improved seed varieties, crop diversification and climate-resilient agriculture.

The Chemical and specialty chemical business is expected to benefit from domestic manufacturing growth, import substitution, global supply-chain diversification and Indias increasing participation in the China+1 strategy.

The Mentha oil business is expected to benefit from continuing demand from pharmaceutical, personal-care, flavour and fragrance industries, although competition from synthetic alternatives and raw-material price volatility will remain important challenges.

The Pharmaceutical Intermediates and API business offers particularly attractive structural opportunities because of the strategic importance of domestic manufacturing, the need to diversify global pharmaceutical supply chains and continued growth in Indian pharmaceutical exports. The strong growth in bulk drugs and drug-intermediate exports recorded during Q1 FY 2026-27 is an encouraging indicator for the sector.

Overall, Indias manufacturing ecosystem is moving towards greater domestic value addition, supply-chain resilience, technology adoption and export competitiveness. Government initiatives aimed at strengthening manufacturing, reducing import dependence and promoting investment are expected to support the Companys addressable markets over the medium term.

Sd/-

PRAVEEN RASTOGI

Chairman and Managing Director

DIN:01414608

M-73 B, 1st Floor

Malviya Nagar, New Delhi 110017

Date: 01/09/2026 Place: New Delhi