DCW Ltd Management Discussions

Economic Ovzerview and Outlook

Overview of the Global Economy

After enduring a prolonged series of unprecedented shocks, the global economy had begun to stabilise, with modest yet steady growth and expectations that the worst was behinc Global financial conditions remained largely supportive in major advanced economies (AEs), reflecting a gradual shift toward less restrictive monetary policies as inflation began aligning with target levels. While sovereign bond yields in AEs declined in the first half of 2024, they rose again in the second half due to renewed concerns about inflation and diverging policy paths among key central banks. In contrast, sovereign yields in emerging markets and developing economies (EMDEs) generally eased amid the global interest rate cut cycle. The US dollar remained strong throughout the year, exerting downward pressure on several AE and EME currencies. Despite intermittent volatility, global equity markets moved higher, buoyed by investor optimism, though tempered by concerns over high valuations, uneven policy responses, slower disinflation, geopolitical tensions, and uncertainty surrounding evolving tariff regimes.

Growth was projected to remain at 3.3% in 2024, maintaining the pace set in 2023, supported by a continued decline in global headline inflation, despite some upward revisions in select countries. However, fresh uncertainty has emerged as major policy shifts begin to reshape the international trade landscape. Since February, the United States has introduced multiple rounds of tariffs targeting key trading partners, many of whom have responded with countermeasures. These developments are once again testing the global economys resilience.

On April 2, the United States implemented broad-based tariffs, leading to significant declines in major equity indices and sharp increases in bond yields. Although markets partially recovered following a pause and subsequent exemptions announced from April 9 onward, the impact of these tariffs and rising trade policy uncertainty has been considerable. As a result,

WTO economists now project a 0.2% contraction in global merchandise trade in 2025, a sharp downgrade from the 2.9% growth recorded in 2024. A modest recovery of 2.5% is expected in 2026, primarily driven by subdued global demand.

The global economic outlook for 2025 and 2026 remains uncertain, weighed down by several persistent challenges, including a slowing pace of disinflation, high levels of public debt in many countries, ongoing geopolitical conflicts, escalating trade tensions, financial market volatility, and climate-related disruptions. According to the IMF, Global GDP growth is projected to moderate to 2.8% in 2025, before edging up to 3.0% in 2026, down from 3.3% in 2024. Emerging Market and Developing Economies (EMDEs) are expected to grow at 3.7% in 2025, with a slight increase to 3.9% in 2026. In contrast, growth in Advanced Economies (AEs) is forecast to slow to 1.4% in 2025 from 1.8% in 2024, with a modest recovery to 1.5% in 2026.

Global inflation is projected to ease from 5.7% in 2024 to 4.3% in 2025 and further decline to 3.6% by 2026. However, achieving near-term price stability may prove challenging due to persistently high services inflation in several regions, the inflationary impact of increased tariffs in the United States, and potential risks arising from diverging monetary policy responses across economies.

Overview of the Global Commodity Market

The global commodity market is currently navigating heightened volatility and uncertainty, primarily driven by escalating trade tensions and shifting global policy dynamics.

The turmoil in commodity and financial markets in April 2025 reflects an emerging consensus that adverse trade policy developments, coupled with broader geopolitical uncertainties, will significantly dampen global economic growth. This instability has triggered a notable decline in commodity prices, bringing an end to a stable period and marking the beginning of the most volatile decade for commodity prices in at least fifty years.

According to the World Bank, Commodity prices are projected to decline sharply by approximately 12% in 2025, with a further 5% decline anticipated in 2026, resulting in prices reaching a six-year low. This broad- based softening is primarily attributed to weakening global demand, with more than half of all commodities expected to see price reductions this year, many by over 10%.

Oil prices are expected to exert substantial downward pressure on the aggregate commodity index in 2025. This reflects a marked slowdown in global oil consumption, alongside an increase in supply. In particular, the growth of shale oil production is projected to slow significantly, as the West Texas Intermediate (WTI) benchmark remains below profitable levels for most new drilling operations. Additionally, structural shifts·such as the accelerated adoption of electric vehicles·are reducing the oil intensity of economic output, further suppressing demand.

Agricultural commodity markets are also being reshaped by recent trade restrictions, with agrarian goods not exempted from new tariffs. While prices for food and raw material commodities are expected to soften in 2025, the overall decline in agricultural prices is projected to be modest. This is primarily due to a sharp anticipated increase in beverage prices, which offsets broader deflationary trends in the sector.

Prices for base metals, which are closely tied to global industrial activity, are forecast to decline significantly over the next two years in response to weakening economic growth. Although industrial commodities have been partially shielded from recent tariff rounds, the overall sentiment in these markets remains cautious. The fertiliser market, while not explicitly detailed, is likely to mirror broader commodity trends, facing downward price pressures amid reduced input demand and market uncertainty.

Looking ahead, the commodity market is expected to remain under pressure due to subdued global growth and trade policy risks. Overall prices are projected to decline sharply in 2025 and continue to soften in 2026, with oil prices leading this downtrend. Although agricultural and industrial commodities may exhibit varied trends, the overarching narrative suggests continued volatility and price weakness across most segments of the global commodity landscape.

Overview of the Indian Economy:

The Indian economy demonstrated resilience in FY2024-25, bolstered by strong macroeconomic fundamentals and timely policy interventions. Economic activity gained momentum in the second half of the year, rebounding from the slowdown experienced in Q2, driven by a revival in rural demand, increased government spending, a recovery in the agricultural sector, and sustained strength in the services sector. The financial system remained stable and well-capitalised, supported by the robust balance sheets of both financial institutions and corporates.

According to the provisional estimates released by the Ministry of Statistics and Programme Implementation, Indias real GDP is projected to grow by 6.5% in FY2024-25, while nominal GDP expanded by 9.8% during the same period. Among key sectors, the construction industry is expected to post the highest growth at 9.4%, followed by 8.9% in public administration, defence, and other services, and 7.2% in financial, real estate, and professional services. Despite prevailing global uncertainties, the domestic economy maintained strong momentum. The fiscal deficit for FY2024-25 improved marginally to 5.6% of GDP, better than the revised estimate of 5.8%.

Inflation moderated in FY2024-25, averaging 4.6%, down from 5.4% a year earlier, aided by easing input costs, effective supply-side measures, and the continued impact of past monetary tightening. Core inflation fell to 3.5%, while fuel prices declined by 2.5% due to softer global energy prices. However, food inflation remained high at 6.7%, with spikes driven by weather- related supply shocks and tight market conditions in cereals, fruits, edible oils, and meat. Inflation peaked at 9.7% in October 2024, before easing to 2.9% by March 2025, reflecting improved supply dynamics.

Indias merchandise exports recorded a marginal growth of 0.1% in FY2024-25 recovering from a 3.1% decline in the previous year. In contrast, merchandise imports rose by 6.2%, reversing the 5.3% contraction seen a year earlier.

As a result, the merchandise trade deficit widened to USD 282.8 billion in FY2024-25, up from USD 241.1 billion in the preceding year. However, the impact on the current account deficit (CAD) was mitigated by robust services exports and a stable inflow of remittances, keeping the CAD at a manageable 1.3% of GDP during April- December 2024, compared to 1.1% a year earlier.

The outlook for the Indian economy in FY2025-26 appears positive, underpinned by a recovery in consumption, sustained government focus on capital expenditure alongside fiscal discipline, and strong financial positions of banks and corporates. Supportive financial conditions continued momentum in the services sector, and rising consumer and business confidence further strengthened growth prospects.

The agriculture sector is expected to perform well, aided by a forecast of an above-normal monsoon and recent policy initiatives announced in the Union Budget. Meanwhile, the manufacturing sector is likely to see improved traction driven by rising domestic demand, increased capacity utilisation, and robust corporate and banking fundamentals. Counting on these positive indicators, the RBI has projected a real GDP growth rate of 6.5% for FY26, with risks described as “evenly balanced.”

Echoing similar expectations, the International Monetary Fund (IMF) initially projected Indias economic growth at 6.5% in its January 2025 World Economic Outlook. However, in its April update, the forecast was revised downward to 6.2%, citing global policy uncertainties and rising protectionist sentiments that could disrupt the global trade landscape. Despite the downgrade, India is still expected to remain the worlds fastest- growing major economy.

Industry Overview:

Overview of the Global Chemical Industry:

The global chemical industry is a cornerstone of the world economy, contributing an estimated $5.7 trillion·approximately 7% of global GDP·through direct, indirect, and induced impacts. It supports 120 million jobs worldwide, underscoring its extensive reach across various sectors. Directly, the industry adds $1.1 trillion to global GDP and employs 15 million individuals, making it the fifth-largest manufacturing sector globally. Notably, for every dollar generated by the chemical industry, an additional $4.20 is produced elsewhere in the global economy. The Asia-Pacific region leads in contribution, accounting for 45% of the industrys total economic value and 69% of all jobs supported. Europe and North America follow, contributing $1.3 trillion and $866 billion to global GDP respectively. These figures underscore the chemical industrys pivotal role in driving economic growth and employment worldwide.

The global chemical industry experienced a moderate recovery in 2024, with production levels increasing year-over-year compared to 2023.

This growth was primarily driven by the easing of the destocking cycle and a gradual rise in demand across various product segments. However, the industry faced challenges, including soft demand in specific markets and uneven growth across regions. To navigate these challenges, chemical companies implemented cost-reduction strategies and focused on improving operational efficiencies. Investments in decarbonisation and innovation continued, reflecting the industrys commitment to sustainability and longterm growth.

Looking ahead to 2025, the chemical industry is expected to continue its recovery, with global chemical production projected to grow by 3.5%. Companies are anticipated to balance short- and long-term goals by focusing on innovation, sustainability, and resiliency to drive efficiency and growth. Strategies may include enhancing performance through a multidimensional approach to innovation, accelerating decarbonisation efforts, and improving supply chain flexibility and agility. Additionally, the industry is likely to see increased merger and acquisition activity as companies seek growth opportunities and portfolio optimisation.

According to MarketsandMarkets, the global chemical industry is poised for modest growth, supported by key drivers such as the accelerated shift toward speciality chemicals, rising demand for high-performance and sustainable solutions, and the rapid adoption of green energy and digital technologies, including AI and 3D printing. These trends are being reinforced by increasing environmental regulations, evolving consumer preferences, and policy mandates promoting clean energy and circular economy practices. Amid these transformations, the industry is expected to continue innovating across various end-use sectors, including automotive, construction, electronics, and personal care. The global chemical industry was valued at USD 6,182 billion in 2024 and is projected to grow modestly to USD 6,324 billion by 2025, reflecting a 2.3% compound annual growth rate (CAGR).

Overview of Global Speciality Chemical Industry:

The global speciality chemicals industry is poised for steady growth in 2025, driven by increasing demand for high-performance, customised solutions across sectors such as automotive, electronics, construction, agriculture, and personal care. According to the IMARC Group, the market reached USD 780.3 billion in 2024 and is projected to grow at a CAGR of 3.23% through 2033, reaching approximately USD 1,054.7 billion by then. Similarly, Technavio anticipates a more robust growth, projecting an increase of USD 383.2 billion between 2024 and 2029, at a CAGR of 6.7%.

Key growth drivers include the rising demand for speciality chemicals in sectors like electronics, automotive, construction, and agriculture. The shift towards sustainable and ecofriendly products is also propelling the market forward. Technological advancements, such as the integration of AI and 3D printing, are enhancing production efficiency and enabling the development of innovative products.

For instance, AI is being utilised for predictive maintenance and formulation optimisation, reducing downtime and improving efficiency in manufacturing processes.

Regionally, the Asia-Pacific dominates the market, accounting for 41.05% of the global share in 2024, with countries such as China, India, and Japan leading due to rapid industrialisation and urbanisation. North America is expected to experience significant growth, driven by advanced technological infrastructure and substantial investments in research and development (R&D). Europes market benefits from stringent environmental regulations and a strong focus on sustainability, with countries such as Germany, France, and the UK leading the way in innovations, particularly in green chemistry and biobased chemicals.

Despite the positive outlook, the industry faces challenges such as supply chain disruptions, geopolitical tensions, and stringent environmental regulations. Companies are investing in green technologies and circular economy initiatives to mitigate these challenges and meet the growing demand for sustainable products. For example, the adoption of green energy sources, such as solar and wind power, is transforming production processes, reducing carbon emissions, and decreasing dependency on fossil fuels.

Overview of Indian Speciality Chemical Industry:

The Indian speciality chemicals sector is poised for fast-paced growth, driven by its emergence as a preferred manufacturing hub for both domestic and international markets. This sector, which accounts for approximately 22% of Indias total chemicals market, is pivotal in driving the broader industrys growth. With India ranking sixth in global chemical production and 14th in exports, the sectors contributions span vital industries such as agrochemicals, pharmaceuticals, textiles, and more, projected to reach a market size of over US$1 trillion by FY 2040.

Government support has been instrumental in advancing Indias speciality chemicals industry, with initiatives like the Public Procurement (Preference to Make in India) policy, the Chemicals Promotion and Development Scheme, and the development of plastic parks bolstering sectoral growth. Despite external challenges, including geopolitical tensions and fluctuating global demand, the industry remains resilient, driven by its strong fundamentals, technological integration, and focus on core capabilities.

Recognised as a sunrise sector by the Ministry of Chemicals and Fertilisers, the industry benefits from targeted incentives such as the Production Linked Incentive (PLI) Scheme, aimed at enhancing domestic manufacturing and exports.

The sectors role in industrial and agricultural advancement is underscored by its contribution of essential inputs to downstream industries.

Sustainability is increasingly central to the industrys evolution. Efforts are underway to adopt green technologies, reduce environmental impact, and work towards net-zero emissions. Investments in industrial parks equipped with modern effluent treatment systems reflect this commitment to environmental stewardship.

Construction Chemicals Segment

The Indian construction chemicals market has experienced robust growth, fuelled by major government initiatives, rapid urbanisation, and large-scale infrastructure development. The push for projects such as smart cities, highways, metro rail systems, and residential schemes like Pradhan Mantri Awas Yojana (PMAY) has led to rising demand for innovative and sustainable construction solutions. The market has seen increased use of concrete admixtures, underground construction solutions, and eco-friendly materials aimed at improving strength, durability, and workability, which are significant in Indias high-humidity and heavy monsoon conditions. Additionally, events like “India Chem 2024” underscore the governments efforts to promote self-reliance and attract investment in construction chemicals.

Government-backed programmes such as PM Gati Shakti, the National Building Code, and Affordable Housing for All are catalysing growth in the sector by creating opportunities for R&D and product innovation. Strategic infrastructure investments through initiatives like the Sagar Mala Project and Bharatmala Pariyojana, along with the adoption of advanced construction technologies like prefabrication and 3D printing, are further boosting demand for specialised construction chemicals. As India continues to expand its urban and industrial footprint, construction chemicals are becoming essential components of modern, resilient, and sustainable infrastructure development.

According to Precedence Research, the Indian construction chemicals market is valued at USD 4.48 billion in 2025. It is projected to grow to approximately USD 6.19 billion by 2034, registering a compound annual growth rate (CAGR) of 3.63% over the forecast period. These revenue-based projections are benchmarked with 2024 as the base year.

Dyes and Pigments Segment

Indias dyes and pigments segment is poised for steady growth, underpinned by robust end-use demand and supportive industrial dynamics. As of 2024, the market was valued at USD 1.28 billion and is expected to reach USD 1.70 billion by 2033, reflecting a compound annual growth rate (CAGR) of 3.26% from 2025 to 2033, according to the IMARC Group. This growth trajectory is being shaped by the expansion of key sectors such as textiles, plastics, packaging, and construction, alongside rising preferences for environmentally friendly and regulatory-compliant colourants.

A major contributor to domestic consumption is the textile industry, one of Indias largest and most dynamic sectors. The demand for dyes, ranging from reactive and vat dyes to acid and disperse variants, continues to grow due to the variety of fabrics and evolving fashion trends. Government initiatives such as the Production Linked Incentive (PLI) scheme and Integrated Textile Parks have further bolstered scale, technological adoption, and export readiness in the textile value chain. Urbanisation and rising disposable incomes are also fuelling demand for diverse and vibrant textile products, thereby sustaining the need for high-quality dyes and pigments.

Simultaneously, the plastics and packaging industry is emerging as a critical growth engine. With increasing output from FMCG, pharmaceutical, and e-commerce sectors, there is a heightened demand for pigments and masterbatches that offer UV resistance, brand consistency, and aesthetic appeal. Innovations in flexible and biodegradable packaging are driving the adoption of specialised pigments that cater to new material types while meeting regulatory requirements for safety and sustainability. Moreover, Indias positioning as a competitive manufacturing base is unlocking export potential, aided by policy support aimed at reducing reliance on imported inputs.

Water Treatment Chemicals Segment

Indias water treatment chemicals segment is gaining increasing prominence as sustainable water management becomes a national imperative amid rapid industrialisation, urbanisation, and escalating water scarcity. Water treatment chemicals play a vital role in purifying natural and wastewater sources to meet regulatory and operational standards for municipal, industrial, and agricultural use. These include coagulants and flocculants for particle removal, disinfectants such as chlorine for microbial control, pH adjusters to enhance process efficiency, and corrosion inhibitors to protect pipelines and infrastructure. Their application ensures both public health safety and environmental compliance.

In 2024, the Indian water treatment chemicals market was valued at USD 2.0 billion, and it is projected to grow to USD 3.3 billion by 2033, reflecting a healthy compound annual growth rate (CAGR) of 5.1% from 2025 to 2033, according to the IMARC Group. The expansion of key sectors such as power generation, manufacturing, and chemical processing·each with high water consumption and wastewater discharge·continues to be a robust growth driver. Regulatory mandates surrounding effluent treatment, combined with rising public awareness of the environmental and health impacts of untreated water, are pushing industries to invest in advanced water treatment solutions.

Additionally, the market is witnessing a shift towards innovative and eco-friendly chemicals that align with global sustainability goals. As demand for cost-effective, high-efficiency, and environmentally friendly alternatives rises, manufacturers are investing in R&D to enhance the performance and environmental profile of their products. With increasing emphasis on circular water use and zero liquid discharge systems, Indias water treatment chemicals segment is poised for long-term structural growth.

Homecare Ingredients Segment

The Homecare Ingredients segment in India, closely aligned with the broader Personal Care Ingredients market, is experiencing robust growth driven by rising disposable incomes, evolving consumer preferences, and increased emphasis on hygiene and wellness. According to TechSci Research, Indias personal care ingredients market is projected to grow at a compound annual growth rate (CAGR) of 4.25% through 2029. This expansion is underpinned by the widespread use of key functional ingredients, including surfactants, emulsifiers, rheology modifiers, and conditioning agents, not only in personal care products but also in household cleaning and hygiene solutions.

A significant growth catalyst is the increasing shift of consumers towards high-performance and eco-friendly homecare products. The COVID-19 pandemic has intensified the focus on hygiene and sanitation, thereby elevating demand for advanced cleaning formulations that contain safe and sustainable ingredients. This trend is complemented by the growing influence of Direct-to-Consumer (D2C) brands and digital platforms that offer tailored, premium home care products to urban and semi-urban consumers. These brands are quick to incorporate clean-label ingredients and position their products as both practical and environmentally responsible.

Additionally, the growing consumer preference for natural, organic, and biodegradable homecare ingredients is reshaping product development strategies. With heightened awareness of the environmental impact of conventional chemical-based cleaners, manufacturers are investing in research and development to create plant- based alternatives that deliver efficacy while minimising ecological harm.

This demand for greener formulations is further amplified by supportive government policies and industry regulations that aim to encourage sustainability in domestic chemical manufacturing.

As income levels continue to rise and lifestyles become more aspirational, Indian households are increasingly investing in high-quality home care solutions. The segment is expected to maintain robust growth momentum, presenting many opportunities for innovation, investment, and expansion in the years ahead.

Company Overview:

DCW Limited stands as a stalwart in the chemical industry, exhibiting a rich legacy spanning over eight decades, rooted in a culture of innovation and excellence. Established in January 1939, the companys journey began with the acquisition of Indias first soda ash factories in Dhanghadra, Gujarat. Since then, DCW has evolved into one of the fastest-growing chemical conglomerates in India, with a robust presence across multiple products and locations.

At the core of DCWs operations lies a relentless pursuit of innovation, exemplified by its history of pioneering new products and processes. The company holds a prominent position in key segments, including Chlor- Akali, Soda Ash, and PVC, further strengthened by a strategic shift towards high-value-added speciality chemicals. This diversification not only fortifies DCWs competitive advantage but also underscores its commitment to meeting evolving market demands.

DCW Limited caters to a diverse clientele, both domestically and internationally, offering a comprehensive range of products that spans Basic and Speciality Chemicals. Within its expansive portfolio, speciality chemicals such as Chlorinated Poly Vinyl Chloride (CPVC) and Synthetic Iron Oxide Pigment (SIOP) find applications across various industries, including construction, paints, plastics, and more.

The companys Basic Chemicals portfolio comprises other chemicals, including Hydrochloric Acid, Liquid Chlorine, and Trichloroethylene, which serve as critical components in various sectors such as pharmaceuticals, water treatment, and electronics. Meanwhile, larger basic chemicals, including Caustic Soda, Soda Ash, Synthetic Rutile and PVC, which are indispensable in numerous applications ranging from paper production to agriculture.

Looking ahead, DCW Limited is strategically positioned to capitalise on the burgeoning speciality chemicals market, with a steadfast commitment to enhancing bottom-line stability and expanding profit margins. Leveraging its proven expertise in innovation and product development, the company is poised to reinforce its leadership in the Basic Chemical segment, while concurrently driving growth in high- value Speciality Chemicals.

Manufacturing:

DCW operates two manufacturing facilities, one situated in Dhanghadra, Gujarat, and the other in Sahupuram, Tamil Nadu. The Sahupuram plant, sprawling over 2,500 acres of land, is a versatile, self-sustaining facility equipped with innovative technology to ensure superior levels of safety, productivity, efficiency, and consistent product quality. This facility can adjust production volumes according to client requirements, ranging from small-scale pilot runs to large-scale production operations. Its strategic proximity to the Tuticorin port confers a significant advantage for exporting products to international markets.

Moreover, the Sahupuram plant features a captive power plant with a robust installed capacity of 58 MW, effectively meeting the facilitys power consumption needs. Emphasising its commitment to environmental sustainability, DCW has implemented various initiatives at its manufacturing sites to recover, recycle, preserve, and minimise water consumption. Additionally, the companys coal-fired captive power plant contributes to a total power generation capacity of 58 MW, ensuring an uninterrupted and reliable power supply to the facility.

DCW Limited has planned a significant expansion of its CPVC (Chlorinated Polyvinyl Chloride) production capacity from 20,000 metric tons to 50,000 metric tons, representing a 150% increase in capacity. This 140 crore investment will be executed in phases, with 20,000 MT becoming operational in H2 FY26 and an additional 10,000 MT by the end of FY26. The expansion leverages a mix of new installations, de-bottlenecking, and process optimisation, and is aligned with the growing domestic demand for CPVC driven by infrastructure and industrial needs. Notably, DCW plans to fund 30% of the capital expenditures (capex) through internal accruals, with the balance to be covered by debt, maintaining its focus on deleveraging.

DCWs corporate headquarters are in Mumbai, with operational offices established in New Delhi, Chennai, Sahupuram, and Dhanghadra, facilitating the efficient management and coordination of its business operations across various regions.

Basic Chemicals Segment:

DCW Limited remains a key player in the basic chemicals sector, offering a robust portfolio of essential industrial products. The segment comprises three core offerings: Soda Ash, Caustic Soda and PVC, which remain critical to a broad spectrum of applications across industries. In FY25, the basic chemicals segment retained its position as the most significant contributor to the companys topline, accounting for 73% of total revenue. Over the period from FY21 to FY25, this segment has witnessed a healthy compound annual growth rate (CAGR) of 4.2%, underscoring its consistent performance and strategic importance in DCWs business mix.

A. Soda Ash:

Soda Ash, also known as Washing Soda or Sodium Carbonate, is a critical raw material used across various industries, including detergents, glass manufacturing, textiles, dyes intermediates, and pharmaceuticals. Its alkaline nature makes it especially valuable in detergent production, where it efficiently removes grease and stains. The increasing demand for glass, particularly from the construction and renovation sectors, continues to strengthen the market outlook for Soda Ash. DCW operates a Soda Ash plant in Dhrangadhra, Gujarat, with an installed capacity of 1,08,000 metric tons per annum (MTPA) as of March 31,2025, and achieved a robust capacity utilisation rate of 86%. The Soda Ash segment recorded a compound annual growth rate (CAGR) of 8 % from fiscal year 2021 (FY21) to fiscal year 2025 (FY25).

B. Caustic Soda:

Caustic Soda is a highly versatile industrial chemical extensively used across various sectors, including pulp and paper, alumina refining, soaps and detergents, petroleum processing, and other chemical manufacturing processes. Its utility also extends to water treatment, food processing, textiles, metal and glass processing, and mining operations. DCW operates its Caustic Soda facility in Sahupuram, Tamil Nadu, with an installed capacity of 96,000 metric tons per annum (MTPA) as of March 31,2025, and a capacity utilisation rate of 80%. The Caustic Soda segment registered a compound annual growth rate (CAGR) of 11% during FY21 to FY25.

C. PVC (Polyvinyl Chloride):

Polyvinyl Chloride (PVC), the third- most widely produced synthetic plastic polymer globally, plays a crucial role in a broad range of applications, including pipe manufacturing, automotive components, sanitary fittings, wire and cable insulation, flexible hoses, and packaging. DCW operates a modern PVC manufacturing facility in Sahupuram, Tamil Nadu, with an installed capacity of 1,00,000 metric tons per annum (MTPA) as of March 31,2025, and an impressive capacity utilisation rate of 94%. The PVC segment remained flat between fiscal year 2021 (FY21) and fiscal year 2025 (FY25).

Other Basic Chemicals:

While perhaps not as prominent in terms of total revenue contribution, DCW Limiteds other Chemicals hold immense potential for further exploration and growth. This segment encompasses a range of critical chemicals that serve as key building blocks in various industrial processes.

1. Sodium Bicarbonate:

Sodium Bicarbonate, commonly known as baking soda, finds applications across diverse industries, including food and beverage, pharmaceuticals, personal care products, and chemical processing. It serves as a leavening agent in baking, a pH buffer in pharmaceutical formulations, and an ingredient in toothpaste and skincare products.

2. Hydrochloric Acid:

Hydrochloric Acid is a versatile chemical used in industries such as metal processing, water treatment, chemical synthesis, and food processing. It plays a crucial role in the production of chlorides, pharmaceuticals, dyes, and fertilisers, as well as in the pickling of steel and as a pH adjuster in water treatment processes.

3. Liquid Chlorine:

Liquid Chlorine serves as a vital chemical in the production of various chlorinated compounds used in water treatment, disinfection, pharmaceuticals, plastics, and agrochemicals. It is also employed in the manufacture of PVC, solvents, and pesticides.

4. Trichloroethylene:

Trichloroethylene is widely utilised as a solvent in metal degreasing, dry cleaning, and extraction processes. It finds application in industries such as aerospace, automotive, electronics, and manufacturing.

5. Utox:

Utox, also known as perchloroethylene or tetrachloroethylene, is primarily used as a solvent in dry cleaning, metal degreasing, and textile processing. It also finds applications in the production of adhesives, coatings, and as a precursor in the synthesis of other chemicals.

6. Ferric Chloride:

Ferric Chloride serves as a coagulant in water treatment and wastewater treatment processes. Additionally, it finds application in the production of printed circuit boards, etching of metals, and as a catalyst in organic synthesis.

7. Sodium Hypochlorite:

Sodium Hypochlorite, commonly known as bleach, is extensively used as a disinfectant, bleaching agent, and sanitiser in water treatment, sanitation, household cleaning, and laundry applications.

8. Ammonium Bicarbonate:

Ammonium Bicarbonate finds application in the food and beverage industry as a leavening agent in baking and as a pH buffer. It is also used in the production of ceramics, plastics, and pharmaceuticals.

Speciality Chemicals Segment Overview:

DCW Limited continues to strengthen its position in the speciality chemicals domain, offering a diversified portfolio of high-value products designed to serve niche industrial applications. This segment comprises three differentiated products, each catering to specific end-use sectors with consistent demand and technical performance. In FY25, the speciality chemicals segment has contributed 26.3% of total revenue. The speciality chemicals segment registered a compound annual growth rate (CAGR) of 26% over FY21-FY25.

1. Synthetic Iron Oxide Pigments (SIOP):

DCW reaffirmed its leadership in the production of Synthetic Iron Oxide Pigments (SIOP) in India, catering to diverse sectors such as construction, paints, paper, laminates, packaging, furniture, plastics, and rubber. The companys Sahupuram facility in Tamil Nadu utilises a unique zero-discharge precipitation process, delivering both operational efficiency and environmental sustainability. The strong momentum in infrastructure and real estate development continues to bolster demand for SIOP. As of March 31.2025, DCWs SIOP plant had an installed capacity of 30,000 metric tons per annum (MTPA). The segment recorded a compound annual growth rate (CAGR) of 35% over the fiscal years 2021-2025.

2. Chlorinated Poly Vinyl Chloride (C-PVC):

Chlorinated Polyvinyl Chloride (CPVC) remained a strategic pillar of DCWs speciality chemicals portfolio. Produced through a chlorination process of PVC homopolymer, CPVC offers enhanced flexibility, superior thermal stability, and excellent resistance to chemicals and corrosion, making it ideal for applications across construction, chemical processing, electricals, electronics, healthcare, and material handling. DCW remains the sole domestic manufacturer of CPVC, operating its production facility in Sahupuram, Tamil Nadu. As of March

31.2025, the plant had an installed capacity of 21,600 metric tons per annum (MTPA) and achieved a robust capacity utilisation rate of 106%. The CPVC segment registered a compound annual growth rate (CAGR) of 22% from fiscal year 2021 (FY21) to fiscal year 2025 (FY25).

Company Outlook:

DCW Limited is strategically positioned for sustained growth, driven by rising domestic demand across its diversified business segments. In the basic chemicals space, the Soda Ash business shows strong promise, supported by global market projections that estimate the Soda Ash market to grow from USD 20.69 billion in 2024 to USD 30.6 billion by 2033, reflecting a compound annual growth rate (CAGR) of 4.4% from 2025 to 2033. China currently dominates this market, holding a 44.3% share as of 2024.

The global growth trajectory is being fuelled by rising applications in the construction and automotive sectors, increasing adoption in wastewater treatment, robust capacity expansions, government incentives, and the availability of abundant raw materials.

The PVC remains a significant revenue contributor, accounting for 34 % of DCWs total revenue in FY2025. The companys PVC plant in Sahupuram operated at 98% capacity utilisation, reflecting robust demand in infrastructure, automotive, and consumer applications. Globally, the polyvinyl chloride (PVC) market reached USD 47.0 billion in 2024 and is expected to grow to USD 65.7 billion by 2033, registering a compound annual growth rate (CAGR) of 3.6% from 2025 to 2033. This growth is being driven by increasing demand for durable and flexible materials in consumer products, rising personal vehicle ownership, and heightened emphasis on enhancing wire insulation and cable sheathing in electronic devices.

Similarly, Caustic Soda remains a high- potential market, with a global value of 83.2 million tons in 2024 and projected to reach 95.7 million tons by 2033, growing at a CAGR of 1.41% from 2025 to 2033. Asia-Pacific continues to dominate global demand. The market is being driven by rising demand for lightweight materials such as aluminium, rapid growth in the pulp and paper industry, and the expanding need for water treatment services. This segment contributed 27% to DCWs revenue in FY2025, reflecting its resilient demand and strong fundamentals.

In the speciality chemicals portfolio, DCW continues to strengthen its position. The Synthetic Iron Oxide Pigments (SIOP) business, which serves sectors such as construction, paints, and packaging, accounted for 10% of total revenue in fiscal year 2025. Additionally, DCW is the only domestic producer of Chlorinated Polyvinyl Chloride (CPVC), a niche segment valued at USD 2.2 billion in 2024 and projected to grow at a robust compound annual growth rate (CAGR) of over 11.8% from 2025 to 2034. Known for its superior thermal and mechanical resilience, CPVC contributed 16% to the companys revenue in FY2025, underscoring DCWs strategic positioning in high- growth speciality materials.

Despite global headwinds and challenges, including a petrochemical feedstock gap, R&D talent shortages, and Indias persistent trade imbalance, DCW remains confident. With cost advantages in labour, utilities, and infrastructure, and a clear focus on operational efficiency and profitability, the company is well-placed to capitalise on domestic and global opportunities, reinforcing its contribution to Indias industrial and economic progress.

Financial Overview:

In FY2025, the company achieved revenue from operations of 20,003 million, marking a 6.9% year-on-year growth compared to 18,716 million in the previous year. The basic chemical revenue for FY2025 reached 14,631 million, representing a 1.70% year- over-year decrease. Speciality chemical revenue also saw significant growth, standing at 5,257 million, representing a remarkable 42.78% increase year- on-year.

The EBITDA for FY2025 experienced robust growth, increasing by 10.2% year-over-year to 1,934 million, compared to 1,755 million in FY2024. The Caustic Soda and Soda Ash segments played a significant role in driving this growth, accounting for the higher share of overall EBITDA. The EBITDA margin for FY2025 improved to 9.67%, up by 29 basis points year-on-year. This improvement can be attributed to effective cost-control measures and favourable market dynamics, which contributed to enhanced operational efficiency and margin expansion.

The profit before tax recorded for FY2025 amounted to 494 million, a substantial increase from 253 million in the previous year. Similarly, the profit after tax for the year surged to 303 million, compared to 157 million in the last year.

Particulars ( in Million)	FY25	FY24
Operational Income	20003	18716
Total Expenses	18069	16961
EBITDA	1934	1755
EBITDA Margins (%)	9.67%	9.38%
Other Income	231	183
Depreciation	999	938
Interest	672	735
Profit before Exceptional Items	494	265
Exceptional Items	-	-12
PBT	494	253
Tax	191	97
Profit After Tax	303	157
PAT Margins (%)	1.51%	0.84%
Other Comprehensive Income	-6	-2
Total Comprehensive Income	297	155
Diluted EPS (INR)	1.03	0.53

Changes in Key Financial Ratios and Return on Net Worth:

Significant alterations in key financial ratios, demonstrating a variation of 25% or more compared to the preceding fiscal year, are elaborated upon in the Notes to Accounts within the Annual Report. These details, accompanied by comprehensive explanations where applicable, shed light on the underlying factors driving these shifts. Additionally, any modifications in the Return on Net Worth from the previous fiscal year are thoroughly analysed and delineated in the same section of the report, providing stakeholders with valuable insights into the companys financial performance and trajectory.

Rating updates:

As of April 2, 2025, India Ratings & Research reaffirmed DCW Limiteds credit ratings, reflecting continued confidence in the companys financial discipline and operational resilience. The companys term loans were rated at IND A/Stable, with a reduced sanctioned amount of 3,977 million (down from 4,454 million). Fund-based working capital limits of 115 million were rated IND A/Stable/IND A1, while non-fund-based working capital limits amounting to 3,392 million were assigned an IND A1 rating. Additionally, fund- and non-fund-based working capital limits worth 1,050 million were also rated IND A1. These ratings underscore DCWs stable credit profile and robust liquidity position.

Risks and Concerns:

Risk	Updated Mitigation Strategy
Regulatory Risk	With increasing global focus on sustainability, ESG compliance, and emission control, regulatory environments have become more dynamic. DCW maintains robust compliance with evolving Safety, Health, and Environmental (SH&E) regulations, including SEBI BRSR mandates. Active engagement with regulators and investments in green chemistry, waste minimisation, and zero-liquid discharge processes help mitigate these risks.
Raw Material Risk	Volatility in global commodity markets and supply chain disruptions, as seen recently, continue to impact raw material availability and pricing. DCW counters this through diversified sourcing, long-term contracts, and strategic backwards integration projects. The company also maintains optimal inventory buffers to avoid production interruptions.
Forex Risk	The Indian rupee has remained volatile amidst global macroeconomic uncertainties. DCW mitigates this by aligning export revenues and raw material imports in USD, naturally hedging currency exposure. Initiative-taking monitoring and the use of forward contracts and hedging instruments help cushion the impact of adverse currency movements.
Innovation Risk	Rapid technological advancements and customer expectations in speciality chemicals necessitate continual innovation. DCW has strengthened its R&D investments and institutionalised innovation frameworks. Collaboration with academic and research institutions, as well as securing IP rights, ensures sustained product differentiation and a competitive edge.
Customer Retention Risk	With increased competition and evolving buyer preferences, retaining long-term clients is a strategic priority. DCW engages in co-creation with key clients, offers customised solutions, and ensures reliability in supply and quality. These efforts, combined with robust technical support and continuous value delivery, reinforce customer stickiness.
Quality Risk	Rising global quality benchmarks demand stringent assurance systems. DCW adheres to ISO 9001, 14001, and 45001 standards. Advanced process automation, digital quality checks, and continuous personnel training ensure consistent product quality, thereby reducing the likelihood of customer complaints and reputational damage.
Geopolitical Risk	Ongoing geopolitical tensions and supply chain realignments pose challenges. DCW has increased localisation of raw material sourcing and maintains diversified supplier networks. It continuously evaluates alternate logistics routes and geographies while enhancing domestic market share to buffer against global disruptions.

Information Technology:

DCW Limited recognises the critical role of a robust and secure IT infrastructure in ensuring business continuity, operational efficiency, and strategic decision-making. The Company has built a comprehensive IT backbone, incorporating best-in-class systems to support its administrative functions, production management, and service delivery across its operations.

A key strength of DCWs IT ecosystem lies in its ability to generate business intelligence across critical areas, including production planning, electronic procurement, transaction processing, budgeting, forecasting, and cash flow modelling. These capabilities enable data-driven decision-making and enhance operational agility.

The Company has adopted global benchmarks in information automation, performance tracking, remote working capabilities, and management excellence. Its in-house technical team is responsible for system development, user support, and driving technological innovation aligned with business goals.

Cybersecurity and data privacy are core priorities. DCW has implemented a structured cyber risk framework, including a formal cybersecurity policy accessible via its intranet. The Company migrated its data centre to a secure cloud environment managed by a globally recognised vendor with embedded risk controls. Additionally, a Disaster Recovery (DR) site located in a separate seismic zone ensures business resilience in the event of system disruptions. Preventive controls, such as restricted access to nonbusiness websites, personal email accounts, and unauthorised USB devices, further enhance data integrity and protection.

Human Resource Management:

DCW Limited places great emphasis on leveraging the domain knowledge and experience of its promoters and management team to gain a significant competitive edge in existing and new markets. The company continues to invest in its human capital by recruiting qualified professionals and key personnel, enabling it to operate independently. Upholding principles of meritocracy, integrity, legality, and compliance, DCW Limited fosters a culture of transparency and accountability. Governance policies are in place to encourage employees to raise complaints without fear of retribution or discrimination. The companys Code of Conduct includes provisions related to the prevention of sexual harassment and whistleblower protection, ensuring a safe and ethical work environment.

Health & Safety:

Sustainability lies at the heart of DCW Limiteds operations, with a strong focus on safety risk management and human capital preservation. Adhering to a “Zero Harm” policy for human capital and plant assets, the company has maintained an exemplary safety record over the past decade with zero human capital loss. Moving forward, DCW Limited remains committed to enhancing safety performance through behavioural safety initiatives and process safety risk management reviews. Additionally, the company strives to exceed minimum compliance requirements by prioritising human capital development, waste management, and community engagement.

Internal Controls:

DCW Limited has implemented robust internal control systems tailored to its business nature and operational scale. These systems ensure the authorisation, recording, and reporting of transactions in accordance with internal control policies, regulatory guidelines, and risk management principles. The adequacy of these systems is periodically reviewed by the Audit Committee of the Board of Directors, which also oversees the resolution of significant audit observations. Looking ahead, the company plans to review its Internal Control Framework to align with evolving regulatory requirements and adopt early changes deemed necessary.

Cautionary Statement:

The Management Discussion and Analysis may contain forward-looking statements regarding the Companys objectives, projections, estimates, and expectations, subject to applicable securities laws and regulations. Actual results may differ from these statements due to various factors, including economic conditions, government regulations, tax laws, and market dynamics that affect demand, supply, and pricing.