DCM Shriram Ltd Management Discussions

Management Discussion and Analysis report

Performance Review

Financial Year 2025-26 was characterized by tentative global stabilisation amid persistent uncertainties. Easing inflation in several advanced economies supported beginning of a more accommodative monetary stance, though growth remained uneven across regions. Geopolitical friction and rising trade protectionism continued to shape commodity markets, logistics corridors and capital flows.

The escalation of conflict in West Asia emerged as a material external risk. Although India is geographically insulated from the conflict, its economic ecosystem is closely intertwined with the region through energy, fertilizer supply chains, shipping routes, and export markets. These developments have reinforced the importance of supply chain agility, diversified sourcing and operational resilience for energy intensive operations such as ours. The Indian economy demonstrated strong resilience amidst these global headwinds. While elevated energy prices exerted inflationary pressures and tested currency stability, macroeconomic fundamentals remained robust, supported by healthy foreign exchange reserves, proactive monetary policy, and sustained domestic consumption. Continued government capital expenditure, along with a gradual revival in private capex, supported growth in the manufacturing sector. India continues to remain well-positioned as a stable growth engine in an increasingly fragmented global economy.

In FY26, the Company delivered a resilient performance underpinned by our diversified business model, optimized capacity utilisation and disciplined cost management. Overall expansion was driven by broad- based volume growth, stable end-user demand, and improved realizations in the Chemicals business, complemented by volume-led growth in the Shriram Farm Solutions segment. Fenesta Building Systems segment contributed to revenue growth but faced transient margin moderation, whereas the Sugar and Ethanol business improved its profitability despite a slight dip in revenue.

Our focus on value-chain integration, operational efficiency, and cost discipline helped us navigate a dynamic environment. Investments made in prior periods that were commissioned or reached optimal utilization this year have started contributing and will further strengthen our scale. Financial prudence remains a key advantage. A strong balance sheet and disciplined working capital management supported continuity amid commodity volatility. Healthy operating cash flows funded growth while preserving agility to capture opportunities.

Sustainability remains integral to both our long-term strategy and daily operations. We remain deeply committed to responsible resource utilization, minimizing our environmental footprint, and fostering meaningful engagement with our communities.

Total Revenue from operations (excluding excise duty) increased to Rs. 13538 crore vs. Rs. 12077 crore last year reflecting broad based growth across Chemicals, Agri Inputs and Fenesta.

• Chemicals and Vinyl business: Overall revenue was higher by 31% at Rs. 4651 crore. Chemicals revenue was up by 38% at Rs. 3832 crore vs. Rs. 2777 crore led by volume driven growth on account of capacity expansion and new product introductions as well as higher realizations. Vinyl revenue was up by 4% at Rs. 819 crore vs. Rs. 785 crore driven by higher volumes, partially set off by lower realizations due to dumping by China.

• Sugar and Ethanol business: Overall revenue (excluding excise duty) was marginally lower by 2% to Rs. 3770 crore vs. Rs. 3862 crore in FY25 mainly due to lower volumes in sugar and ethanol, partially compensated by higher sugar realizations.

• Fenesta Building Systems business represents one of our consumer facing business wherein, revenues were up by 28% to Rs. 1112 crore driven by higher volumes and scale up of new product platforms.

• Agri Input businesses - Shriram Farm Solutions, our other consumer facing business, also had a volume driven growth across all verticals, especially Research Wheat, with a revenue increase of 18%. Revenue for Bioseed business was up by 3% driven by higher realizations of all major crops and sale of vegetable germplasm and technology. Fertilizer business revenue decreased by 1% mainly due to lower gas prices which is a pass through. Overall, Agri Inputs business revenues were up by 7% at Rs. 3800 crore.

Profit before depreciation, interest, tax and exceptional items (PBDIT) increased by 15% to Rs. 1694 crore vs. Rs. 1472 crore last year:

• Chemicals business PBDIT stood at Rs. 750 crore, reflecting an increase of 50% from last year. This growth is attributed to higher volumes and improved margins on the back of better realizations and lower variable costs, aided by reduced power rates and improved operating efficiencies.

• Vinyl business PBDIT stood at Rs. 93 crore as compared to Rs. 115 crore last year despite higher volumes mainly due to lower realizations vs. last year due to dumping of surplus supply from China.

• Sugar and Ethanol business PBDIT stood at Rs. 438 crore, a growth of 6% from last year mainly due to better margins in both sugar and ethanol.

• Fenesta Building Systems business PBDIT was lower at Rs. 150 crore vs. Rs. 154 crore due to higher fixed costs incurred towards building new platforms, capability enhancement, along with increased sales and promotion spends, partially compensated by higher volumes.

• Agri Input businesses performance has been better than last year with overall PBDIT coming in at Rs. 459 crore, an increase of 6%.

Shriram Farm Solutions PBDIT improved to Rs. 296 crore vs. Rs. 283 crore last year led by higher volumes across all verticals especially research wheat.

Bioseed Business witnessed a drop in earnings, with PBDIT at Rs. 57 crore vs. Rs. 66 crore last year due to lower volumes in cotton and corn crops.

Fertiliser Business PBDIT was higher at Rs. 105 crore vs. Rs. 85 crore last year led by higher arrears received in FY26.

• Cement Business PBDIT witnessed a decline of Rs. 6 crore due to higher input cost, partially offset by higher realizations.

Overall PBDIT margins improved to 12.5% from 12.2% last year.

PAT stood at Rs. 856 crore, up 42% from Rs. 604 crore in FY25.

• Finance Costs - Increased by 15% to Rs. 176 crore owing to lower interest capitalization and higher debt during the year on account of capital expenditure.

• Tax out go was Rs. 190 crore.

• EPS for the year stood at Rs. 55.7 (before exceptional item) and at Rs. 54.7 (after exceptional item) vs. Rs. 38.8 in FY25.

Net Debt as on March 31,2026 stood at Rs. 1767 crore vs. Rs. 1395 crore.

Capital Expenditure: In line with our strategy to strengthen businesses through scale, integration, and cost efficiency, we are executing a range of growth projects.

The progress of ongoing projects is as below:

Projects under implementation

• Aluminium Chloride expansion by 100 TPD and Calcium Chloride facility of 225 TPD is planned to be commissioned by Q1 FY27.

• Anhydrous Sodium Sulphate (AnSS) is expected to be completed by Q1 FY27

• Energy saving project is expected to be commissioned in Q2 FY28

• Aluminium extrusion plant for Fenesta is expected to be commissioned by Q2 FY27

• 68 MW peak (average: ~34 MW) Renewable (Solar + wind) power for Kota complex via SPV route (group captive) by Q1 FY27, (injection of 15 MW (average) started from 4th May26)

• Enhancement by 48 MW (peak) in Renewable (Solar + wind) power for Bharuch complex via SPV route (group captive)

• 36 KTPA Formulated Resins (FR) Capacity Expansion in HSCL by Q2 28 Apart from above, board has given in principal approval towards the acquisition of salt mines to facilitate backward integration of the companys chemical business into salt.

The Company completed following investments in FY26 at a cumulative cost of ~Rs. 1106 crore:

• 52000 TPA Epichlorohydrin (ECH) facility with Glycerine purification facility (partially in Oct25 and remaining in Apr26)

• Enhancement by 6.6 MW in Renewable (Solar + wind) power for Bharuch complex via SPV route (group captive)

• Acquisition of 53% equity stake in DNV Global Pvt Ltd for backward integration into windows and doors hardware business

• Acquisition of 100% equity stake in Hindusthan Speciality Chemicals Limited for forward integration into advanced materials

Further, the company sold 50% stake in its subsidiary, Shriram Polytech Ltd., to Teknor Apex B.V. to form a Joint Venture. The joint venture is designed to combine Shriram Polytechs strong Indian manufacturing base in vinyl compounds with Teknor Apexs global expertise in specialized formulations.

We believe these steps will significantly strengthen our businesses. Key Financial Ratios Standalone

Ratios	Mar26 Mar25		Remarks
Operating Profit Margin (%)*	11.1%	10.8%	Higher profits led by higher volumes of chemical products and higher realizations
Net Profit Margin (%)*	6.4%	4.8%	Higher net profits due to higher operating profits, partially offset by higher depreciation and finance cost
Interest Coverage Ratio	14.8	16.2	Due to higher finance cost
Current Ratio	1.4	1.5
Net Debt Equity Ratio	0.24	0.21
Inventory Turnover	5.5	5.4
Debtors Turnover	14.6	18.0	Due to higher debtors
Return on Net Worth (%)	11.4%	8.3%	Due to higher net profits

*Operating profit and Net profit margins are calculated on Net revenue from operations (excluding excise duty).

BUSINESS-WISE PERFORMANCE REVIEW AND OUTLOOK Chemicals and Vinyl

Our Chemicals and Vinyl business is highly integrated and energy intensive. Chemicals operations are at two locations (Bharuch - Gujarat and Kota - Rajasthan) while Vinyl is at Kota only. The business is supported by a total of 345 MW captive power with flexi fuel option at both locations and 50 MW (peak) captive renewable power at Bharuch. The business has multiple revenue streams. The Chemicals business has following products-Caustic Soda, Chlorine, Hydrogen, Hydrogen Peroxide, Hydrochloric Acid, Aluminium Chloride, Stable Bleaching Powder, Sodium Hypochlorite and Advanced materials comprising of Glycerine, Epichlorohydrin (ECH) and Epoxy Resins. The Vinyl business includes PVC Resins, Calcium Carbide and Polymer Compounds.

The Revenue, PBDIT and Capital employed for the business for FY26 is as follows:

The segments revenue stood at Rs. 4651 crore vs. Rs. 3562 crore in FY25 and PBDIT at Rs. 843 vs. Rs. 614 crore in FY25. The increase is primarily due to higher volumes and better margins supported by higher realizations and lower input cost led by lower power rates and better operating efficiencies.

The Caustic industry in India has a combined installed capacity of ~6.4 million metric tonnes per annum (~5.9% share of global installed capacity). The top 4 players (Grasim, DCM Shriram, GACL and Epigral) account for ~54% of the total installed capacity. The domestic demand for caustic soda in the last 10 years has increased at a ~5% CAGR and is expected to grow in the same range with the growth in its consuming sectors viz alumina, textile, pulp & paper, soap & detergents, pharmaceuticals, etc. and growth in downstream chlorine industry viz. Petrochemicals (PVC, CMS, CPW), agro-chemicals, specialty chemicals and water treatment segments.

The advanced material business of the company continues to witness healthy growth led by Epoxy with all key players adding as well as looking to add further capacities in view of increasing domestic demand. The Government has also supported the domestic industry by levying AntiDumping Duty (ADD) on both Epichlorohydrin (ECH) & Epoxy.

Hydrogen peroxide continues to be oversupplied in domestic market and Bangladesh continues to dump its material in India led by subsidized Natural Gas prices in Bangladesh.

In Caustic we are the second largest caustic player in the country with Bharuch being the largest single location caustic manufacturing plant. The caustic soda capacity is at 2225 TPD at Bharuch and 524 TPD at Kota supported with flaking capacity of 900 TPD and 230 TPD respectively. These capacities are supported by capacities of associated chemicals like chlorine and compressed hydrogen further augmented by downstream products like hydrogen peroxide (165 TPD), hydrochloric acid, stable bleaching powder, aluminium chloride, and sodium hypochlorite. The chlorine downstream projects of additional aluminium chloride & calcium chloride are in advanced stages of commissioning and likely to start commercial production in Q1 of this year. Advanced materials have a capacity of 150 TPD for epichlorohydrin (ECH) supported by refined glycerine capacity of 368 TPD. This is further integrated with 33551 TPA capacity of epoxy resins comprising of both liquid & derivatives of epoxy resins in its newly acquired entity M/s Hindusthan Specialty Chemical Limited.

Our board has also approved a 48 MW hybrid power project which will augment the existing 50 MW hybrid power for Bharuch. Also 68 MW hybrid power project for Kota complex is likely to be commissioned by Q1 FY27. This will not only help in reducing cost but will also go a long way in our sustainability initiatives.

The Chemicals business remains exposed to price volatility and to import led dumping in certain product lines. We are accelerating downstream integration (Aluminium Chloride, Calcium Chloride, ECH) and captive renewable power projects to improve margin capture and reduce feedstock and energy cost sensitivity.

The Revenue, PBDIT and Capital Employed for this business for FY26 are as follows:

Year	Sales (MT)	ECU Realizations (Rs./MT)
FY26	7,85,914	28,924
FY25	7,01,880	28,476
% Change	12.0	1.6

The chemical segment reported revenue of Rs. 3,832 crore, an increase of 38% Y-o-Y This is majorly attributed to high volumes, better ECU prices and new products.

PBDIT at Rs. 750 crore increased 50% Y-o-Y, driven by higher volumes and improved margins.

Our strategy: The company over the last couple of years has significantly invested to increase scale, drive cost efficiencies and diversification of revenue streams to enable growth and add value to the business in a sustainable manner. We have been consistently matching the capacity augmentation with downstream integration, greener and efficient sources of energy and operational excellence. The business is reinforcing its digital framework to improve efficiency of its operations.

The company is currently focussed on scaling the advance material business including the recent acquisition and continues to explore the next wave of growth for the business.

Vinyl business is involved in the manufacturing of PVC Resins, Calcium Carbide and Polymer Compounds. The business is an integral part of the Chemicals and Vinyl manufacturing facility at Kota with integration in terms of Captive Power, Chlorine and Calcium Carbide. DCM Shriram Ltd. is the only company in the country which manufactures PVC Resin through the Calcium Carbide route as against the alternate Ethylene route.

The Company is the oldest manufacturer of PVC Resins currently operational in the country with a rich experience of six decades in the business.

The Calcium Carbide manufactured by the company is partly sold as merchant Carbide, while a large part is captively consumed for the manufacture of PVC Resins. The PVC Resins are sold directly in the market. They are also captively used for manufacture of uPVC window and door profiles for Fenesta as well as compounding.

PVC Resin is a synthetic resin made from the polymerization of vinyl chloride with 57% chlorine and 43% carbon content. PVC Resin is the third largest plastic in production and consumption in the world. It is a widely used raw material that enables fabrication of an extensive range of products. Its applications include pipes and fittings, profiles and tubes used in modern construction, windows and doors, sidings, wires and cables, flooring and roofing, as well as packaging films that help conserve food. PVC also plays an important role in healthcare, with applications such as IV and blood bags, blister packaging for pills, and other critical medical devices—making it an integral part of day-to-day life. Calcium Carbide, on the other hand, is used in the production of dissolved acetylene gas and de-sulphurizing (DS) compound besides use in production of PVC resins.

Indias PVC resin installed capacity is ~1.5 million TPA. Despite a two-year COVID-led demand dip, the Indian PVC market delivered ~6% CAGR over FY10-FY26, driven primarily by pipes and fittings for construction and agriculture; FY26 domestic PVC demand is estimated at ~4.5 million tonnes. Pipes and fittings account for ~80% of Indias PVC consumption (vs. ~46% globally). With Indias GDP expected to grow ~6-7%, PVC demand—an infrastructure-linked polymer—is also expected to grow ~6-7%, supported by government-led infrastructure and housing initiatives, the Jal Jeevan Mission, smart cities, and higher farm income. India remains a bright spot amidst current geopolitical uncertainty being the top import destination for PVC globally. India has continued to absorb surplus global supply as consumption remained strong. China, South Korea, Japan and Taiwan account for 80% of total PVC imports into India. Indias calcium carbide market is primarily driven by the dissolved acetylene gas segment. Demand is expected to remain stable in FY27, supported by continued infrastructure spending and sustained requirements from dissolved acetylene gas and de-sulphurizing compounds in the expanding steel sector.

The imports bridge the gap between domestic demand and supply in case of both PVC resin and Calcium Carbide. Despite rapid growth in demand & likely increase in domestic PVC capacity in India in the coming years, the demand-supply gap in India would still persist & be met by imports.

Shriram PolyTech Limited (50% JV w.e.f. 17th Apr26; erstwhile wholly owned subsidiary of DCM Shriram Limited), stands as one of the established and organized players in the PVC compounds industry in India. With a legacy spanning over six decades, the company operates a world-class manufacturing facility with the production capacity of 24,050 TPA. The company adheres to international standards, holding certifications such as ISO 9001, ISO 14001, IS0 45001 and ISO 13485 underscoring its commitment to quality, sustainability, and workplace safety.

Initially catering to the footwear and wire & cable industries, the company has diversified into high-value segments, including Flame Retardant Low Smoke (FRLS) and Heat Resistant Cable Compounds, Automotive, Food & Medical Grade Compounds, Colored PVC Compounds, and Specialty Compounds. This evolution reflects the companys strategic focus on innovation and its ability to meet the dynamic requirements of various industries.

The Indian PVC compounds market is a dynamic and rapidly expanding segment, driven by multiple end-use industries. The estimated total demand for PVC compounds in India stood at ~3.6 lakh metric tonnes (MT) per year in 2025-26, with ~5% import share.

Business Performance

The Revenue, PBDIT and Capital Employed for Vinyl business in FY26 is as follows:

	PVC Resins		Carbide
Year	Sales (MT)	Realizations (Rs./MT)	Sales (MT)	Realizations (Rs./MT)
FY26	61,153	70,668	32,637	58,451
FY25	55,736	77,629	27,924	61,597
% Change	9.7	-9.0	16.9	-5.1

The business segment revenue was higher by 4% Y-o-Y driven by higher volumes, however PBDIT decreased by 19% Y-o-Y mainly due to one time gains of Rs. 16 crore in previous year and lower realizations Y-o-Y Realizations for Carbide dropped as international prices reduced from average $686/MT for PE Mar25 to average $637/MT for PE Mar26. Realizations for PVC decreased marginally as international prices decreased from average $814/MT for PE Mar25 to average $721/MT for PE Mar26.

Our Strategy: The business has swing capability to sell more PVC Resin or Calcium Carbide depending upon the margins of these products. The company is focused on maximizing margins through cost reduction initiatives, capex and continuously evaluating new models that enhance process efficiency and support business profitability.

PVC demand continues to be on track for long term positive growth fuelled by Indias robust GDP growth with domestic consumption driven industry supported by low PVC per capita consumption in India and the continued focus of the Govt. on infrastructure development. The Calcium Carbide demand also remains stable amid robust capital expenditure on infrastructure development by the Govt.

In the compounding business, the recently formed Joint Venture strengthens DCM Shrirams position in the polymer compounding market and allows Teknor Apex to expand its footprint in Asia, focusing on innovation and sustainable growth.

Sugar and Ethanol

India is the second largest producer and largest consumer of sugar in the world. Indian Sugar Industry is highly fragmented with private sector, Government undertakings, Co-operatives, and unorganized players. Unorganized players are mainly involved in production of Gur and Khandsari, the less refined form of sugar. The crushing period varies from region to region beginning in October/ November and goes on till March/April in all states except in southern states like Tamil Nadu, Andhra Pradesh where it continues till July/ August. In domestic context, sugar is the second largest Agro based industry supporting over 50 million farmers along with indirect employment to rural population. It is estimated that about 7.5% of the rural population in India is involved with the sugar industry.

There have been no significant investments in global sugar capacities over the last few years. The variations in global sugar production have been largely attributable to the sugarcane availability and the flexibility in Brazil between sugar and ethanol production. World sugar balance sheet is expected to be in a surplus of ~ 2.9 MMT in SS 25-26.

India is structurally a sugar surplus nation. In the current season overall sugar production is expected to be ~28.3 MMT after considering a diversion of sugar of about 3.1 MMT to ethanol. The consumption is close to 28.1 MMT Additionally, Govt. has allowed an export of 2 MMT in SS 2025-26 which is likely to close at 1 MMT. Indian sugar season 2025-26 is expected to end with a stock of ~ 4.3 MMT.

On the Ethanol front, OMCs have allocated 1058 Cr ltrs of ethanol in ESY 25-26 (1039 Cr ltrs supplied LY) against industry offer of 1776 Cr ltrs, implying an overall allocation of 60%. Within the allocated volume, grain and sugar-based feedstock contribute 72% and 28%, respectively, supporting achievement of the 20% blending targets. Countrywide distillery capacity is outstripping demand and ethanol disposal surfaces as a major challenge for the industry. The business needs proactive policy support from the government.

Sugar and ethanol economics are sensitive to policy changes (allocation, export permissions, blending mandates) and to seasonal cane yields. We are diversifying product mix (CBG, potash), strengthening farmer engagement programs to improve cane quality and pursuing merchant ethanol and power sales to optimise realisations.

DCM Shriram is a major player in the domestic sugar industry and is based out of the State of Uttar Pradesh. The company has four integrated sugar complexes located in central U.P at Ajbapur (13,500 TCD), Hariawan (13,000 TCD), Loni ( 9,400 TCD) and Rupapur (6,500 TCD) with a total crushing capacity of 42,400 TCD, with total refined sugar capacity of 26,500 TCD. The operations are further supported by power cogeneration capacity of 166 MW (Sugar- 152 MW, Distillery- 14 MW), of which 86 MW of power can be exported. These four units are fully integrated with three distilleries - two on molasses feedstock located at Ajbapur (120 KLD) & Hariawan (190 KLD) and one on multi-feedstock at Ajbapur (250 KLD), a country liquor bottling line of ~11,800 tetra cases per day and a 12 TPD Compressed Bio Gas (CBG) plant utilizing press mud. To further enhance the value of our by-products, we operate a 4,600 TPD potash (K2SO4) plant utilizing distillery ash under our 100% subsidiary.

The Revenue, PBDIT and Capital Employed for this business for FY26 are as follows:

	Sugar (Domestic)		Ethanol
Particulars	Sales	Realisation	Sales	Realisation
	(Lac Qtl)	(Rs./Qtl)	(Lac Ltr)	(Rs./Ltr)
FY26	58.1	4,071	1,515.5	59.5
FY25	62.2	3,912	1,541.0	62.5
% Change	-6.5	4.1	-1.7	-4.8

Operational Data (Financial Year Basis)

FY	Cane Crushed (Lac Qtl)	Recovery Rate%	Sugar Produced (Lac Qtl)
FY26	472.8	10.8	51.0
FY25	565.4	10.5	58.6

The decrease in Revenue is mainly due to lower volumes of sugar and ethanol and lower ethanol realizations due to sales mix, partially compensated by higher sugar realizations.

The increase in PBDIT is mainly due to the addition of new businesses- CBG & Potash and higher sugar realizations and power tariffs, partially set off by higher cost of production.

CBG and potash businesses, added in FY26, are expected to provide incremental margin stability by monetising by-products and reducing dependence on sugar only realisations.

Our Strategy: Sugar business has over the last couple of years, built a fully integrated sugar complex having a capability of capturing full downstream value for all its four sugar factories. Now our key focus areas are:

1. Improving productivity and quality of sugarcane through dedicated cane development efforts, thereby benefiting both farmers in terms of higher yields and mills in terms of better recoveries & volumes.

2. Sweating existing assets and drive operational efficiencies across all business lines.

3. Further evaluate options of value addition on by-products.

4. Improve digital utilisation across our activities in the farm as well as operations.

FENESTA BUILDING SYSTEMS

Fenesta Building Systems is Indias largest and most preferred Windows & Doors brand. Fenesta provides complete solutions in terms of design, manufacture, fabrication, installation and service of precision-engineered, made-to-order windows, door & Fagade systems. Currently 8 Fabrication plants (4 uPVC, 2 Aluminium and 2 facade), one Extrusion unit (10 extrusion lines) and one hardware plant (DNV) are operational. There are 421 dealers in 268 cities along with 9 company owned and operated showrooms. Fenesta has international presence in 7 countries.

The consumer facing business of the company provides solutions for uPVC, System Aluminium windows, WPC & Engineered wooden doors and Glass Fagades. We continue to invest in enhancing capacities and have gotten into Windows and Doors Hardware Business by acquisition of 53% stake in DNV Global Private Limited.

We are also setting up an Aluminium extrusion plant, which will help us to reduce lead time and enhance customer experience and will also help the Company get into the new line of business.

The Revenue, PBDIT and Capital Employed for this business for FY26 are as follows:

FY26	5,03,385	19,653
FY25	4,17,356	20,513
% Change	20.6	-4.2

PBDIT for the business is lower at Rs. 150 crore vs Rs. 154 crore in FY25 due to lower margins because of product mix, higher fixed costs in core business towards enhancing capacities along with sales promotion, setting up new business platforms like Fagade, Wooden doors and acquisition related costs, partially set off by increase in volumes.

Our Strategy: Strategic focus area of the business is to provide exceptional customer experience and offer comprehensive product portfolio, resulting in sustained volume growth. The business is investing in setting up newer revenue platforms and enhancing capacities to accelerate future growth. Fenesta will continue to innovate new products across all its verticals. It continues to focus on growth both geographically & by increasing product offerings in Windows, Doors, Facades, Hardware and adding new product platforms. The business aims to evolve Fenestas positioning as a comprehensive "lifestyle partner", expanding its footprint in the building materials category to capture a larger share of the consumer wallet resulting in sustained business growth.

SHRIRAM FARM SOLUTIONS

The Indian agriculture sector is undergoing a significant structural transition, shaped by climatic variability, evolving farmer preferences, regulatory reforms, and rapid advancements in technology. While short-term challenges such as uneven monsoons, commodity price volatility, and geopolitical disruptions have created periodic uncertainty, the medium-to-long term outlook remains resilient. Rising food demand, increasing focus on farm productivity, a gradual shift towards high-value crops, and sustainability-led practices continue to drive structural growth. Farmers are increasingly discerning and value-conscious, prioritizing reliable, yield-enhancing solutions that mitigate risk and improve farm economics.

Shriram Farm Solutions (SFS) is steadfast in its commitment to empower farmers through science-driven, trusted, and differentiated agri-input solutions across seeds, crop protection, and specialty plant nutrition. Anchored in strong research capabilities, collaborative partnerships, and robust on-ground execution, the Company remains focused on enabling sustainable agricultural productivity while strengthening farmer trust in the Shriram brand. Guided by a long-term vision of becoming a preferred, innovation-led agri-solutions partner, SFS continues to invest in research, product differentiation, operational excellence, and capability building to create enduring value for farmers, channel partners, and all stakeholders. During FY26, SFS delivered a resilient financial performance, achieving an 18% year-on-year revenue growth. The year witnessed an extended monsoon and heavy rainfall during the early part of Q3, leading to waterlogging and crop damage across key Kharif crops such as Soybean, Bajra, Pulses, and Maize. Lower farmer profitability during the Kharif season resulted in moderated spending during Rabi, with increased use of saved seeds in Wheat. Despite these headwinds, SFS achieved its highest-ever Research Wheat Seed sales, registering a robust growth of approx. 23%, underscoring strong farmer confidence in the Companys seed portfolio. The Crop Protection segment recorded a healthy 20% revenue growth, supported by strong farmer acceptance of recently launched molecules and a calibrated focus on high-value products. Specialty Plant Nutrition continued its growth momentum, driven by increasing adoption of research-backed, own R&D innovative products, reinforcing SFSs positioning in differentiated nutrition solutions.

Shriram AgSmart Limited, the Companys subsidiary, plays a pivotal role in strengthening SFSs integrated agri-solutions ecosystem. Through value-added plant nutrition manufacturing, process excellence, and scalable infrastructure, AgSmart is steadily improving capacity utilization, quality consistency, and sustainability performance. The subsidiary is emerging as a key enabler of differentiated growth, supporting farmer-centric innovation and operational reliability.

SFS has proactively leveraged digital solutions as a key enabler of scalable growth, productivity, and stakeholder value creation. During the year, SFS has launched a comprehensive digital transformation program to embed AI and advanced analytics across the entire value chain—farmer engagement, channel partners, salesforce, marketing, R&D, supply chain, manufacturing, HR, and finance. The initiative prioritizes high-impact, high- feasibility use cases through a phased roadmap, with Wave 1 focused on immediate growth acceleration, cost productivity, and faster decisionmaking. A robust data foundation and enterprise-wide AI copilots are being established to enhance farmer outcomes, improve operational efficiency, and build long-term competitive advantage.

SFS also continued to strengthen its product portfolio through new and differentiated launches across crop protection and specialty plant nutrition. With a focus on climate-resilient solutions and research-backed product innovation, the Company remains well positioned to address evolving agronomic needs, support farm productivity, and sustain growth momentum across key markets.

The Revenue, PBDIT and Capital Employed for this business for FY26 are as follows:

Revenue increased by ~18% to Rs. 1689 crore, compared to Rs. 1436 crore in the previous year. Growth was fueled by volume growth across all verticals, mainly research wheat seeds and crop protection.

PBDIT rose by ~5% to Rs. 296 crore, up from Rs. 283 crore last year, driven by higher volume, partially set off by lower margins.

Our Strategy: SFSs long-term strategy is anchored in proprietary R&D, organizational agility, continuous innovation, and deeper market penetration. This strategy is further strengthened through strategic collaborations with leading research institutions and agrochemical companies. Our Investment for Growth initiative reflects a strong commitment to advancing science-based solutions, building exclusive partnerships, and reinforcing brand presence at the grassroots level. The ongoing expansion of R&D capabilities across multiple crops, supported by extensive field trials, remains aligned with our vision of "Better Science, Better Harvest." Through these focused efforts, we continue to deliver superior agricultural solutions that empower farmers and drive sustainable, long-term growth. In parallel, the Company is undergoing a digital transformation journey, leveraging AI-enabled platforms and data-driven tools to enhance decision-making, operational efficiency, and collaboration—fostering a future-ready work culture aligned with evolving business needs.

BIOSEED

Bioseed is a Research oriented organization and believes in serving the farmers by providing high quality hybrid and varietal seeds with desired traits. It is a business with end to end integration which involves research, production, processing and sales.

The key crops that we deal in India comprise of Corn, Paddy, BT Cotton, and Vegetables among others. In Philippines, we deal in Corn and Paddy. Our distribution network is wide spread across regions and continues to grow.

We spend about 6-8% of our revenue on research activities. This has led to a healthy product pipeline. The product development is not only focused on providing high yielding hybrids, but also meeting other challenges, such as pest resistance, disease tolerance, salinity and drought tolerance. The Company has got into research alliances to further strengthen its capabilities in new technologies.

The Revenue, PBDIT and Capital Employed for this business for FY26 are as follows:

Bioseed Revenues in FY26 stood at Rs. 666 crore vs. Rs. 648 crore last year. Indian operations witnessed an increase in revenue to Rs. 518 crore from Rs. 507 crore last year, driven by higher realizations mainly in corn and paddy, partially set off by lower volumes in cotton and corn. The Philippines revenue in FY26 increased to Rs. 148 crore vs. Rs. 141 crore in the previous year. PBDIT for Indian operations is on similar lines as last year. PBDIT for Philippines operations was lower than last year mainly due to lower margins, impacted by weaker market sentiment amid adverse weather conditions.

Our Strategy: Research and development are the foundation of this business and we continue to invest in it. The business is strengthening as well as rationalising its product portfolio and intensifying marketing efforts to enhance trust and create a demand pull by organizing the field activities especially on newly launched hybrids in all the major crops. The trade channel is also being strengthened.

FERTILIZER (UREA)

The companys Urea plant located at its integrated manufacturing complex at Kota, Rajasthan, is one of the oldest plants in the country with a reassessed capacity of 3,79,500 TPA. The company enjoys high brand equity amongst the farmers and has an extensive distribution network over the entire Northern and Central India.

India is the second largest producer and consumer of Urea in the world. Urea is the most preferred fertilizer and constitutes about 81% of entire N fertilizer consumption in the country. Low farm gate price (fixed by government) and high nitrogen content has made it a preferred choice of the farmers. The gap between demand and supply of Urea has been met through imports. Due to closure of Nagarjuna Fertilisers (both the plants) and Kanpur Fertilizer plant, domestic Urea production decreased to 30.4 MMT during FY25 and is expected to be ~30 MMT during FY26, in-spite of commissioning of six new Urea Plants over recent years.

Urea consumption is expected to be ~40 MMT during FY26. Therefore, the imports are expected to increase to ~10 million MT during FY26 against ~5.6 million MT in FY25.

The Government of India has allocated Rs. 91,000 Crores for Urea Subsidies in FY27, which appears slightly insufficient to fully cover subsidy payouts at current gas prices. In view of ongoing West Asia war, there may be reduced availability of Natural Gas due to disruptions in LNG supplies.

The Revenue, PBDIT and Capital Employed for this business for FY26 are as follows:

Year	Sales (MT)	Realizations (Rs./MT)
FY 26	4,02,433	33,225
FY 25	4,03,966	34,234
%Change	-0.4	-2.9

The Revenue of the Fertilizer business stood at Rs. 1445 crore vs Rs. 1461 crore last year. The PBDIT is higher at Rs. 105 crore vs Rs. 85 crore mainly due to receipt of subsidy arrears.

The business experienced lower revenue compared to last year, primarily due to a reduction in gas prices, which averaged to US$ 13.2/MBT versus US$ 14.7/MBT in the previous year, which is a pass-through cost and a decline in volumes. In Q4, gas prices stood at US$ 12.6/MBT. In-spite of lower sales, PBDIT increased mainly due to receipt of arrears related to previous years.

In our drive towards sustainability, we have been making sincere efforts to reduce CO Emissions by way of reducing energy consumption thereby reducing use of fossil fuels. Similarly, significant reduction in water consumption has been achieved over the years by undertaking various water conservation schemes.

Our Strategy: The Company has been making continuous efforts towards improvement in energy consumption, maximising urea production as well as control on fixed expenses.

OTHER BUSINESSES CEMENT

The company operates a Cement plant with a capacity of 400,000 TPA located at its integrated manufacturing facility at Kota. Calcium Hydroxide sludge is generated in the process of manufacturing PVC resins through Calcium Carbide route, which is then converted to Cement in an environment friendly manner using Wet process.

‘Shriram Cement is positioned as a premium brand in the Delhi-NCR and Rajasthan markets. The Company manufactures premium-quality Pozzolana Portland Cement (PPC) and Ordinary Portland Cement (OPC), known for their light colour, superior strength, and early setting properties. The Company launched Shriram Power+ Cement, a premium PPC variant engineered for enhanced performance and reliability.

Cement industry in India has benefitted from high volume growth, majorly driven by a revival in demand from the housing sectors & upcoming infrastructure projects. The cement industry growth is expected to be ~7% in FY26 with capacity utilisation of ~70%.

Business Performance:

Revenue of the Cement business is higher at Rs. 171 crore vs. Rs. 167 crore last year. The increase in revenue by 2% was on account of higher volumes and realizations. The PBDIT stood at -ve Rs.13 crore this year as compared to -ve Rs. 7 crore last year.

Our Strategy: The business is focused on further improving its efficiencies and optimizing its cost structure along with product mix for generating higher returns. The company is making continuous efforts towards improvement in energy consumption, maximising Cement production as well as controlling fixed expenses.

HARIYALI KISAAN BAZAAR

The Retail operations were rationalised in 2013. The Company has limited its current operations to fuel retailing, which is also being rationalized.

OPPORTUNITIES, THREATS, RISKS, AND MITIGANTS

The Companys structure as a diversified conglomerate provides a natural hedge against cyclical headwinds; however, individual business segments operate in dynamic environments and remain exposed to specific industry opportunities and risks.

Opportunities

• Strategic Growth through Integration and Adjacencies

o The Company actively evaluates and pursues both organic and inorganic growth avenues. Our focus remains on achieving economies of scale, expanding into adjacent product categories, executing backward and forward integration, and maximizing value addition across all existing business segments.

• Rising Demand for Climate-Resilient Agri-Inputs

o Increasing climate variability and extreme weather events are intensifying the need for specialized farm inputs and resilient seeds. With domestic and global food demand rising, there is a critical need for higher agricultural productivity, climate-adapted seeds, and effective pest management solutions. Our agri-input businesses are strategically positioned to address these evolving agronomic requirements.

• Expansion of the "Fenesta" Brand

o Leveraging its established market leadership and expertise in the fenestration industry, Fenesta Building Systems is continuously exploring opportunities to diversify into related building material categories and invest in adjacent platforms to drive the next phase of growth and evolve as a lifestyle partner of choice for the customers.

• Strong Brand Equity and Stakeholder Trust

o Across all divisions, the Company benefits from robust brand recall and a high degree of credibility. This deep-rooted trust extends across our entire stakeholder matrix, from the farming community to suppliers to end-consumers and B2B partners.

• Robust Financial Foundation Enabling Capital Allocation

o The Companys robust financial health—characterized by strong operating cash flows provides the strategic bandwidth to consistently reinvest in capacity expansions, modernization initiatives, and new business adjacencies.

Risks, Threats, and Mitigants

• Geopolitical and Supply Chain Uncertainties

o Risk: Heightened geopolitical tensions and trade-policy shifts (including sanctions, trade protectionism and export controls) can trigger volatility in raw material prices, tighten the availability of critical inputs, and disrupt global transit routes. This can impact production costs, working capital cycles, and supply continuity.

o Mitigation: We de-risk our supply chain through a diversified supplier and logistics mix, proactive inventory management, and strategic long-term contracting for critical inputs. Furthermore, our integrated operations, captive power generation, and overall portfolio diversification ensure operational resilience and uninterrupted customer service.

• Energy-Intensive Manufacturing Operations

o Risk: The Chemicals and Vinyl operations are highly energyintensive, exposing the business to fuel cost volatility and sustainability challenges.

o Mitigation: We consistently invest in operational efficiencies, modern technologies, and an optimized fuel mix. This targeted approach ensures our unit production costs remain globally competitive while actively minimizing our environmental footprint.

• Agro-Climatic Risks in Sugarcane Production

o Risk: Sugarcane availability, yield, and recovery rates are inherently vulnerable to agro-climatic risks, including erratic monsoon patterns, droughts, and pest outbreaks.

o Mitigation: We engage extensively with our farmer network to promote advanced agronomic practices. By supplying superior seed varieties and high-quality farm inputs, we aim to enhance crop resilience and farm-level productivity against climate volatility.

• Environmental and Transition Risks

o Risk: Given the resource-intensive nature of chemical and manufacturing operations, transitioning to sustainable practices and managing carbon footprints is a critical mandate.

o Mitigation: Sustainability is integrated into our core strategy. We are aggressively increasing the share of renewable energy in our portfolio, utilizing bagasse-based co-generation in sugar and biomass co-firing in our coal-based power plants. Currently, 27% of our energy consumption is derived from green sources. Furthermore, we are over 10x water positive and continually invest in circular economy initiatives to drive down our carbon and water footprints.

• Capital Intensity of Core Businesses

o Risk: The Sugar, Chemicals, Vinyl, and Fertilizer segments operate with high capital intensity, which can expose the company to leverage and financial risks during cyclical downturns.

o Mitigation: We adhere to prudent financial management principles. This risk is mitigated by rigorously optimizing working capital, maintaining low debt-to-equity ratios, and ensuring stringent returnon-capital-employed (ROCE) thresholds for all new investments.

• Regulatory and Policy Dynamics

o Risk: Segments such as Sugar, Fertilizers, and specific Agri-inputs operate in a highly regulated environment. Unanticipated policy interventions or changes in subsidy regimes can impact profitability and operational planning.

o Mitigation: We mitigate regulatory exposure through balanced capital allocation across our diversified segments. We also maintain continuous, constructive engagement with regulatory bodies and industry associations to advocate for sustainable policy frameworks.

• Evolving Compliance and Governance Landscapes

o Risk: The increasing complexity of the statutory and regulatory landscape necessitates stringent compliance. Lapses can lead to financial penalties, operational disruptions, and reputational damage.

o Mitigation: We maintain a proactive compliance posture managed through robust internal controls, digitized monitoring systems (IT tools), and continuous legal reviews. This ensures strict adherence to all statutory requirements and high standards of corporate governance.

Internal Control Systems and their Adequacy

The procedures and controls are documented for all the key business processes and adhered to. Risk and Control Matrices (RCM) are documented for all key business cycles and processes and are reviewed by the Business Accounts and Internal Audit teams at periodical intervals.

The Internal Audit team along with co-sourced internal audit teams carries out independent testing of effective functioning of key controls for all major business cycles either as part of the internal audits or through yearly testing plan which is duly approved by the Audit Committee at the start of the year. Further, these processes and controls are supported by SAP S4 HANA ERP and making them further robust. The key observations noted in internal audit reviews are presented to the Management and Audit Committee along with the remediation plans and action taken report.

Human Resources and Industrial/ Employee Relations

At DCM Shriram, our Human Resources strategy is a critical enabler of long-term value creation. As the organization evolves in response to shifting business models, technological disruption, and sustainability imperatives, HR continues to play a pivotal role in shaping a future-ready, agile, and inclusive workforce. Our people strategy is firmly aligned with business growth priorities and is anchored on building capabilities for tomorrow, enhancing digital and AI readiness, and fostering a culture that supports continuous learning and innovation.

Our HR roadmap is structured around five strategic pillars—Building the Future Ecosystem, Enhancing Capabilities, Employee Experience & Efficiency, Culture, and Sustainability—ensuring that talent decisions today prepare the organization for the challenges and opportunities of the future. Central to this approach is a multi-year talent strategy aligned to business growth plans, supported by forward-looking organization design, leadership succession planning, and early identification of future skill requirements across functions and businesses.

Drive Growth: Building the Future Leadership Ecosystem Building a strong leadership pipeline is central to DCM Shrirams growth strategy. The Company has adopted a multi-pronged approach that integrates.

Early in Career (EIC) programmes, Organisation and Leadership Process (OLP), and structured succession planning to ensure leadership continuity across businesses and functions.

• Our Early in Career (EIC) ecosystem is designed to attract high-potential talent early, accelerate readiness through structured exposure, and create a robust feeder pool for future leadership roles. The ecosystem spans multiple structured programmes that provide early exposure to the organisations businesses, culture, and values:

o The Summer Internship Programme serves as a strategic talent identification platform, offering students from premier institutions hands-on experience through live business projects, leadership interactions, and a structured group-level bootcamp; high-performing interns are extended Pre-Placement Offers to strengthen early engagement and retention.

o The Management Trainee (MT) programme develops well-rounded business leaders through planned rotations across businesses and cross-functional roles, building enterprise perspective, strategic thinking, and ESG awareness.

o Complementing this, the Technical Management Trainee (TMT) programme focuses on grooming future technical and operational leaders by combining deep functional exposure with leadership capability development across manufacturing-led businesses. o The Global Leaders in Development & Execution (GLIDE)

programme is designed to develop accelerated leadership development initiative aimed at cultivating high-potential talents into Business Leadership roles. Together, these programmes ensure a robust, diverse, and future-ready leadership pipeline aligned with DCM Shrirams growth ambitions.

• DCM Shrirams Organization and Leadership Process (OLP) forms the backbone of its leadership continuity and talent risk management framework. Through a structured and forward-looking approach, the organisation identifies critical roles, assesses performance and potential, and builds robust succession pipelines aligned with medium and long-term business growth plans.

The OLP enables proactive identification of leadership gaps, targeted development planning for successors, and informed talent decisions across businesses and functions. By integrating succession planning with strategic workforce planning, the process ensures readiness for future roles, mitigates leadership risks, and strengthens organisational resilience. This disciplined approach to leadership continuity supports sustainable growth and ensures that the organisation remains prepared to navigate evolving business and market challenges.

Diversity, Equity and Inclusion are integral to DCM Shrirams people and sustainability agenda. Our DEI vision—WIDE (We are Inclusive, Diverse and Equitable)—aims to create a workplace where diverse perspectives are valued, opportunities are equitable, and every employee feels empowered to contribute meaningfully.

Our DEI strategy is anchored on four integrated pillars:

Recruitment

We are committed to inclusive and bias-aware hiring practices to widen access to opportunities. Targeted campus hiring, collaboration with DEI hiring experts, and structured assessments help ensure fairness and transparency. As part of our focused gender diversity agenda, the Company has set a target to increase women representation.

Retention

Retention efforts focus on creating a supportive ecosystem that enables diverse talent to thrive. Progressive policies such as childcare and nanny support, fair performance evaluation post maternity leave, menstrual wellness for women employees in field roles, and enhanced safety provisions for women in field roles strengthen engagement and long-term retention. These are complemented by wellness, safety, and infrastructure initiatives.

Rising

The Rising pillar focuses on enabling career progression and leadership readiness for diverse talent. Structured initiatives such as the Women Development Program, mentoring forums, and leadership journeys across career stages aim to build confidence, capability, and visibility for women professionals, strengthening the internal pipeline of diverse leaders.

Reinforcing

DEI is reinforced through continuous communication, leadership engagement, and grassroots participation. Employee Resource Groups (ERGs) across businesses provide platforms for dialogue, community building, and leadership interaction. Regular sensitization programmes and progress reviews help embed inclusive behaviours into everyday decision-making and organizational culture.

In addition, DCM Shriram continues to translate DEI intent into visible impact through path-breaking inclusion initiatives, including an all-women-run Caustic Soda Flaker Plant at Bharuch, women-managed packing units in Sugar, and the inclusion of differently abled employees across manufacturing locations. These initiatives reflect our commitment to building an inclusive, resilient, and future-ready organization.

Capability Build-up through Learning and Development

At DCM Shriram, capability development is a strategic lever for building a future-ready leadership pipeline and sustaining long-term organizational performance. Our Learning and Development (L&D) framework follows a holistic and structured approach, designed to build leadership, functional, technical, and digital capabilities across career stages, aligned with evolving business and sustainability priorities.

• Leadership capability is strengthened through a suite of stage-based leadership development programmes. These include development journeys for first-time managers, emerging leaders, and senior leaders, with flagship interventions such as the Advanced Leadership Development Program (ALDP)—now rechristened as RISE—which focuses on strategic thinking, enterprise leadership, and business transformation. Senior leaders are further supported through external partnerships, including immersive learning experiences with leading academic institutions, to build future-oriented perspectives and decision-making capabilities.

• For early and mid-career talent, programmes such as Emerging Leaders Development Program (ELDP) and Own Your Development (OYD) provide structured capability building in leadership, stakeholder management, and personal effectiveness.

• Capability development is further enabled through digital learning platforms, including Cornerstone OnDemand (CSOD), which offer self-paced, personalised learning journeys supported by gamification and analytics. Focused interventions in digital fluency, analytics, AI awareness, and functional excellence, along with mentoring, coaching, and experiential learning, ensure continuous upskilling and reskilling. Together, these programmes embed a strong learning culture and enable employees and leaders to remain agile, capable, and future-ready.

Culture and Employee Engagement

At DCM Shriram, the commitment towards people is deeply rooted in the organizations core values and beliefs, which guide behaviour and decision-making across the entire employee life cycle. Culture is systematically embedded through the DCM Shriram Way, with leaders playing a central role in reinforcing values through regular and visible communication. This ensures employees clearly understand the importance of demonstrating values in their day-to-day work and reinforces alignment between organizational purpose and individual actions.

Values are integrated into formal people processes to drive consistency and accountability. The values framework is linked to performance management and potential assessment outcomes, ensuring that both results and behaviours are evaluated. Senior leadership hiring, including all General Manager and above appointments, is anchored in the values framework, strengthening leadership accountability for culture. Desired behaviours are reinforced through structured recognition programmes that celebrate employees who exemplify "living the values" at work, while learning and development initiatives are aligned to the values and behaviour framework, enabling leaders to build capability while acting as culture stewards.

Digital HR and Employee Experience

Digital transformation continues to enhance employee experience and HR effectiveness at DCM Shriram. Alongside optimization of HRMS platforms and digital workflows, the Company has strengthened its employee listening and engagement capabilities.

During the year, inFeedo, an AI-powered employee listening platform, was launched as a Chief Listening Officer for employees. The platform enables continuous, real-time feedback, early identification of engagement and retention risks, and data-driven interventions by managers and HR teams. These initiatives support transparent communication, faster decision-making, and a more responsive and experience-led HR function, aligned with evolving employee expectations and future ways of working.

Employee/ Industrial Relations

The cornerstones of DCM Shrirams employee relations philosophy are inclusion, transparency, empowerment, equal opportunity, and ethical conduct. Every employee is expected to uphold and demonstrate the Companys core values, I ACT ON, in both conduct and decision-making. Employee relations remain a key focus area, recognising that the availability of a qualified, trained, and engaged workforce is critical to sustainable business success.

The Company is committed to ensuring full compliance with all statutory requirements relating to the workforce, which represent the minimum standards of governance. Compliance is regularly monitored and reviewed to ensure statutory provisions are implemented in both letter and spirit.

DCM Shriram actively promotes two-way communication between employees, management, external stakeholders, and government authorities through structured forums such as Works Committees, Safety Committees, and other representative platforms. Wage agreements are concluded amicably through bipartite or multi-partite collective bargaining, balancing business imperatives with employee aspirations.

Holistic employee well-being is a priority, with strong emphasis on health, safety, and environment. Regular health check-ups, medical camps, and safety training programmes are conducted across locations, supported by appropriate systems, controls, and personal protective equipment for all persons entering Company premises. The Company is an inclusive and equal opportunity employer, with Internal Committees in place across establishments and full compliance with the POSH Act. Continuous training and development, proactive conflict-prevention measures, and community engagement initiatives further strengthen positive industrial relations, extending the Companys commitment beyond the workplace into surrounding communities.