DCW Ltd Management Discussions

1. Economic and industry environment

Global economy

Growth and inflation through the year

The global economy grew by 3.5 per cent in 2025, matching the rate recorded in 2024. Growth is projected to slow to 3.0 per cent in 2026 and to recover to 3.4 per cent in 2027. Two forces worked against each other. The war in the Middle East delivered a negative supply shock, while momentum in the global technology cycle, driven by artificial intelligence, pushed the other way. Energy exporters and economies positioned inside the technology value chain gained. Energy importers outside it lost ground.

Advanced economies are projected to grow 1.7 per cent in 2026. Emerging market and developing economies are projected to grow 3.8 per cent, and

China 4.6 per cent, against 5.0 per cent in 2025.

Global headline inflation is projected to rise from 4.1 per cent in 2025 to

4.7 per cent in 2026, before easing to 3.9 per cent in 2027. Higher energy and food prices account for most of the increase, which was revised upward by 0.3 percentage points from April 2026. Disinflation since the beginning of 2024 has stalled. Consumer prices in emerging market and developing economies are projected to rise 5.8 per cent in 2026, against

5.2 per cent in 2025.

Interest rates and currency movements

Financial conditions eased through 2025 after an initial tightening in April, and the US dollar depreciated by 6 per cent between 1 April and the end of December. The conflict that began at the end of February 2026 reversed part of this. Bond yields rose, equity prices fell, and the US dollar strengthened, with emerging market commodity importers hit hardest.

Conditions eased again from their peaks in early April 2026 and remain accommodative by historical standards. Markets are pricing higher nominal policy rates, and long-term sovereign yields have risen. Several central banks in advanced and emerging market economies have already raised rates. In crude oil-importing Asian economies, weaker terms of trade pressured exchange rates and prompted a sharper upward repricing of expected policy paths.

Trade policy and tariff developments

The US effective statutory tariff rate rose to about 25 per cent early in 2025 and was reduced to about 18 per cent by the end of that year through bilateral agreements and exemptions. The rate collected has stayed persistently below the statutory rate. Following court rulings and executive actions, the rate underlying the April 2026 projections is 13.5 per cent, against 18.7 per cent assumed in October 2025. The rate the rest of the world imposes on US imports is unchanged at 3.5 per cent.

World trade volume growth is projected to slow from 5.0 per cent in 2025 to 3.5 per cent in 2026, before recovering to 4.3 per cent in 2027. Earlier front-loading of purchases, the drag from tariffs and the rerouting of trade linkages explain the slowdown. Trading relations continued to be rewired. US imports from China fell sharply, offset by increases from Taiwan Province of China, Vietnam and Mexico. Chinese exports were reoriented towards other Asian economies and, temporarily, towards Europe. Trade policy uncertainty remains historically high.

Global commodity markets

Crude oil and petrochemical feedstocks

Crude oil was soft for the first three quarters of FY2026 and rose sharply in the fourth. The average of the Brent, Dubai and West Texas Intermediate benchmarks moved from US$65.9 per barrel in the June 2025 quarter to US$67.5 and then US$62.1, before reaching US$75.7 in the March 2026 quarter. Brent averaged just below US$64 per barrel in the December 2025 quarter, its lowest quarterly level in more than four years.

The turn came late in the year. Brent rose about 20 per cent over the first two months of 2026 to reach US$72 per barrel by the end of February. The war in the Middle East then brought oil traffic through the Strait of Hormuz to a near standstill. Brent passed US$100 per barrel in the second week of the conflict and gained US$46 per barrel over March, the largest monthly increase on record. Brent is forecast to average US$86 per barrel in 2026, up from US$69 per barrel in 2025, before reverting to US$70 per barrel in 2027.

Demand destruction followed the price spike. The petrochemical industry recorded a significant slowdown in demand for ethane and naphtha, along with liquid petroleum gas, while cash premiums for crude oil and distillates reached multi-year highs in Asia.

World Bank energy price index, quarterly. Energy prices fell to their lowest quarterly level of the year in the December 2025 quarter, then rose in the March 2026 quarter as the Middle East conflict began. The steepest increase came in the quarter following the close of FY2026. Source: World Bank, ‘Commodities Price Data (The Pink Sheet), July 2026. Index 2010 = 100.

Coal, gas and transport costs

Thermal coal moved in the opposite direction to crude for most of the year. Australian thermal coal averaged US$104.0, US$110.5, US$109.3 and US$122.3 per tonne across the four quarters of FY2026, rising through the year. South African coal was close to flat over the same period, moving between US$91.3 and US$94.6 per tonne. The Australian price rose about 20 per cent in March 2026 over the previous month, as disruption to Middle East gas shipments raised demand for coal at power plants in East Asia and Europe.

Global coal consumption increased by approximately 1 per cent in 2025. In China and India, the two largest consumers, demand was dampened by rising solar, wind and hydropower generation. Both governments intensified efforts to replace imported coal with domestic production. The Australian coal price is forecast to rise 19.9 per cent in 2026 to US$130 per tonne, before falling 11.5 per cent in 2027. European natural gas, which competes with coal in power generation, rose about 60 per cent over March 2026 and is forecast to rise 25.4 per cent across the year.

Transport costs rose with fuel. Diesel shortages from the Gulf conflict, together with higher diesel prices, raised costs for coal producers and, in some cases, limited output.

Non-energy commodities and input costs

Non-energy commodities rose more moderately than energy through FY2026. The World Bank non-energy price index stood at 114.0 in each of the first two quarters of the year, then 116.1 and 120.8. The fertiliser index, the input complex most exposed to gas and sulphur, moved from 135.1 to 154.7 over the same four quarters, and is forecast to rise 30.7 per cent across 2026 before falling 16.1 per cent in 2027.

The transmission runs through cost rather than through any single market. Energy is an input into transportation, processing and the production of intermediate goods such as fertilisers and petrochemicals, so higher energy costs raise marginal production costs across the complex. Analysis of past geopolitical oil supply shocks, normalised to a 10 per cent rise in oil prices, shows natural gas prices rising about 7 per cent at their peak and fertiliser prices by slightly more than 5 per cent. Other commodity groups peak at around 2 per cent.

Taken together, the World Bank total commodity price index is forecast to rise 15.5 per cent in 2026, the first annual increase since 2022, and to fall 12.3 per cent in 2027.

Indian economy

Growth, inflation and policy rates

India recorded real gross domestic product growth of 7.7 per cent in FY2026, with gross value added expanding 7.9 per cent. Manufacturing outpaced services for the third consecutive year. Gross fixed capital formation grew 8.2 per cent, and the investment rate stayed near 32 per cent of nominal gross domestic product. The International Monetary Fund projects Indian growth at 7.7 per cent for the fiscal year.

The fourth quarter was the strongest of the year. Real gross domestic product grew 7.8 per cent against 7.0 per cent a year earlier. Services grew 9.9 per cent, industry 9.3 per cent and agriculture 3.6 per cent. Gross fixed capital formation grew 10.8 per cent, the strongest expansion recorded under the 2022-23 series.

Inflation stayed below target for most of the year. Headline consumer price inflation eased from 4.8 per cent in May 2025 to 3.4 per cent in March

2026. It then rose to 3.5 per cent in April and 3.9 per cent in May 2026. Core inflation held at 3.7 per cent from January to April 2026.

Investment-linked indicators, second half of FY2026. Investment and construction-linked activity ran well ahead of overall industrial output in the second half of FY2026, with capital goods and infrastructure the strongest segments.

Source: Reserve Bank of India, Bulletin, June 2026. Growth is year-on-year for the second half of FY2026.

The Monetary Policy Committee voted unanimously in June 2026 to hold the policy repo rate at 5.25 per cent and to retain the neutral stance. Growth for FY2027 is projected at 6.6 per cent and consumer price inflation at 5.1 per cent.

Industrial production and infrastructure spending

Industrial output grew 4.3 per cent in FY2026 on the revised Index of Industrial Production, rebased to 2022-23 and released in June 2026. The earlier 2011-12 series recorded 4.1 per cent for the same year. The two are not directly comparable. The revised series expanded the item basket from

839 items to 1,042 and added gas supply and water services as sectors.

Investment-linked segments were the stronger part of industrial activity. In the second half of FY2026, the infrastructure and construction component of industrial production grew 10.0 per cent. Capital goods production grew

14.2 per cent, and capital goods imports grew 13.8 per cent. Bank credit to infrastructure grew 9.5 per cent in the second half, against 1.9 per cent in the first.

Public investment supported this. The Union Government fiscal deficit moderated to 4.4 per cent of gross domestic product in FY2026 on provisional actuals, the lowest level since 2018-19.

The energy-linked core industries weakened after the year closed. Growth in the Index of Eight Core Industries moderated to 0.5 per cent in May 2026 from 1.8 per cent in April. Coal contracted 9.3 per cent, refinery products 8.7 per cent and natural gas 4.9 per cent. Electricity, cement and steel grew 8.7 per cent, 8.4 per cent and 5.0 per cent over the same month.

Construction and housing activity

Construction demand held through the second half of FY2026. Cement production grew 9.6 per cent, and steel consumption grew 7.6 per cent over that period. Fixed assets of 4,613 listed non-government non-financial companies grew 6.0 per cent in the second half.

The momentum carried into the following year. Infrastructure and construction goods output grew 7.1 per cent in April 2026, and capital goods output grew 16.0 per cent.

Housing recorded the largest fall in borrowing costs of any lending segment. Between February 2025 and April 2026, weighted average lending rates on outstanding rupee housing loans fell 121 basis points. Rates on fresh rupee housing loans fell 116 basis points. Housing credit grew steadily, and bank lending to commercial real estate remained strong.

Global chemical industry

Demand conditions and capacity overhang

The global chemical industry has moved into a structurally different operating environment. Three years of reduced demand and intensifying competition have reshaped value chains. The sector outperformed broader equity markets from 2004 to 2023, then gave up two decades of outsized performance in three years. Total shareholder return over the past five years has been 2.6 per cent a year, of which only 1.6 per cent came from performance rather than multiple expansion.

Capacity is the central problem. Capacity additions have outpaced consumption growth in several markets, and global petrochemical utilisation has fallen from a pre-pandemic average of about 80 per cent to around 70 per cent. Bringing global ethylene markets back into balance would require pausing every announced capacity addition worldwide and rationalising a further 20 million tonnes per annum. Rationalisation is accelerating, and some producers have paused the least economic additions, but government action to close older capacity across Asia has not yet moved the balances.

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Short-term demand improved late in the period. Purchasing managers index data recorded the strongest expansion in global chemicals new orders in just over four years in April 2026. Precautionary stock building ahead of expected price rises contributed to this. Chemicals output is nonetheless forecast to grow 2.9 per cent in 2026, cooling from the upturns of 2024 and 2025, with oversupply expected to hold back the recovery.

Chinese overcapacity and export pricing

China is the source of most of the additional capacity. Producers invested through and after the pandemic upcycle to build scale and polyethene, polyurethane, self-polystyrene and polyols. The country has shifted from net importer to major exporter in both petrochemicals and speciality chemicals, reconfiguring global trade flows.

Domestic demand did not keep pace. Chinese growth ran at 4 to 5 per cent between 2023 and 2025, against about 7 per cent before 2019, so the additional output was directed outward. Export volumes across agrochemical formulations, isocyanates and acetic acid grew at 12 to 16 per cent a year between 2019 and the 2020 to 2024 period. Export prices for the same products fell 11 to 21 per cent from their recent peaks.

The combination of rising volumes and falling prices has compressed margins for producers in both domestic and export markets. Chinese scale, cost position and improving quality standards are also narrowing the differentiation that once protected products. Isocyanates, long defended by capital intensity and process complexity, have seen that protection erode as Chinese capacity lifted export volumes and pushed global prices down.

Regional cost competitiveness

Europe has lost its cost position. European producers hold no factor cost advantage and carry legacy assets and overheads. Utilisation has fallen well below global averages, to 60-65 per cent in Western Europe. Asset closures, portfolio rationalisation and divestment have accelerated in response. European producers were also the hardest hit by input cost inflation in April 2026, with supplier delivery times deteriorating further.

North America is the weakest region in the forecast. Chemicals industrial production there is expected to contract 1.4 per cent in 2026, after growth slowed over the preceding two years, although the United States remains the second largest producer.

Asia is the exception. Steady production increases are expected in mainland China, India and Indonesia, with a further increase in South Korea. Trade policy has become a live factor across all regions, with US tariffs now averaging 18 per cent and accelerating the regionalisation of supply.

Indian chemical industry

Demand growth and import dependence

The Indian chemical industry contributed 8.1 per cent of manufacturing gross value added in FY2024. Production of major chemicals and petrochemicals reached 58,617 thousand tonnes in FY2025, a compound annual growth rate of 2.8 per cent since FY2016.

Demand is expected to grow well ahead of production. The domestic market is projected to grow 8 to 9 per cent a year over the next five to six years. That would take it from about US$160 billion to between US$230 and US$255 billion. A separate estimate places it above US$300 billion by 2030. Rising incomes are the principal driver, and construction is a direct source of that demand. The market for advanced waterproofing, sealants and performance coatings is growing at more than 1.5 times the rate of gross domestic product.

Domestic supply has not kept pace. India imported US$71 billion of chemicals in 2024, compared with US$39 billion in exports. Imports have grown about 10 per cent a year, while exports have grown 6 per cent. The trade deficit widened from US$17 billion in 2020 to US$32 billion in 2024.

Bulk chemicals account for US$21 billion of the import bill and polymers for US$15 billion. Mainland China supplies about 30 per cent of the total.

The cause is structural rather than commercial. Value chains remain fragmented and shallow, with integration gaps and limited access to process technology.

Import pressure and price erosion

Import competition has fallen unevenly across the industry. Base chemicals delivered a total shareholder return of 3.5 per cent over the past year against 7.1 per cent for speciality chemicals. Base chemicals lagged because of margin compression, lower utilisation rates and heightened price competition from imports, particularly from China.

Margins have compressed across most segments. Industry revenue tracked nominal gross domestic product growth of 6 to 7 per cent between FY2019 and FY2025. Operating margins nonetheless fell across multiple segments. Average revenue growth slowed by 10 percentage points between FY2023 and FY2025 against the three preceding years, while margins compressed by 1 to 2 percentage points. Utilisation across speciality chemicals has averaged 60 to 75 per cent, and new lines have run at 20 to 30 per cent.

Returns on capital have followed. Aggregate capital expenditure rose from about US$1.7 billion in FY2016 to a peak of about US$4.3 billion in FY2023.

Return on invested capital nonetheless fell from 18 to 20 per cent between

FY2017 and FY2022 to about 13.6 per cent by FY2025. Capital expenditure as a proportion of revenue has since decelerated by around 7.5 per cent. Segments that depend on imported inputs are expected to face the greatest margin pressure, while those able to draw on local feedstock are expected to fare better.

Import substitution and the policy response

Policy has treated upstream protection with caution. Strong protection for producers of basic materials and intermediate goods raises costs for the larger group of downstream manufacturers that use them, particularly those producing for export. Where upstream investment has been encouraged, it has been paired with an emphasis on cost competitiveness.

Quality Control Orders are the principal instrument applied to the sector. As of 31^st December 2025, 38 products fell under orders issued by the Department of Chemicals and Petrochemicals. The Department revoked 14 such orders in November 2025, seven in the polyester value chain, indicating a more selective approach.

Industrial chemicals have been identified as a priority for domestic scale-up, supported by demand assurance, procurement alignment, standards and time-bound support. Broader measures, including Make in India and the Remission of Duties and Taxes on Exported Products scheme, are intended to boost domestic production and export competitiveness. The scale of the import bill is itself the opportunity.

Indian speciality chemical industry

The global market and Indias share

Speciality chemicals account for about 20 per cent of the global chemical industry by value. They are valued for their functional properties rather than their composition, allowing producers to earn premium prices and wider margins than commodity chemicals. The global market is expected to grow from about US$800 billion in 2025 to nearly US$1.05 trillion by 2030.

India holds about US$40 billion of that market as at FY2025, or roughly one twentieth of the total. The United States, China and Europe have held the leading export positions over recent years. China alone accounted for 40 to 45 per cent of global chemical production before 2020. That concentration is now being contested. India, Japan, South Korea and Saudi Arabia have each emerged as alternative sources, and no single country is replicating Chinas breadth.

Indias established positions are in agrochemical specialities and pharmaceutical intermediates, with construction chemicals and electronic chemicals developing alongside them. Leading Indian speciality companies have grown 15 to 20 per cent a year over the past five years.

Where growth and margin are concentrating

The gap between speciality and commodity performance has widened sharply. Between 2018 and 2024, water treatment chemicals recorded the largest improvement in operating margin of any segment, at 73 per cent. Construction chemicals followed at 42 per cent and food and nutrition at 38 per cent. Agrochemicals improved 26 per cent and dyes and pigments 4 per cent. Over the same period, polymers and petrochemicals contracted on both revenue and margin, by 32 per cent and 28 per cent respectively.

Capital has followed. Speciality transactions have been priced at 12 to

18 times enterprise value to earnings before interest, tax, depreciation and amortisation, against 6 to 8 times for commodity chemicals.

Businesses operating below a 15 per cent margin are increasingly subject to structural review. Major international producers have divested commodity and pigment operations to concentrate on speciality platforms.

Government capital expenditure on roads, water treatment and energy is creating multi-year domestic demand for construction chemicals, water treatment chemicals and speciality coatings.

Advantages and constraints

Indias cost position is a long-standing advantage. Labour costs are structurally lower than in Europe or East Asia across all skill levels, and land and real estate costs in the main clusters remain low. Raw material access is favourable for several speciality inputs, including the sulphur, phosphorus, fluorine and chlorine chemistry value chains. A large domestic market provides revenue stability and allows companies to develop and scale products at home before export.

The constraints are structural. Research spending runs at about 0.6 to 0.7 per cent of gross domestic product, against 2 to 4 per cent in benchmark economies. That limits the move from process improvement to proprietary chemistry. The industry remains divided between a small, organised segment and a large base of micro, small and medium enterprises with limited access to formal credit. Most Indian plants are sized around domestic demand rather than global-scale benchmarks, and limited backward integration among smaller producers increases sensitivity to global feedstock prices.

Compliance is becoming a trade barrier. Registration under the European chemicals regime costs between €50,000 and €1,000,000 per substance each year, and those costs rose 19.5 per cent in 2025. From January 2026, European importers must buy carbon border certificates priced against the European carbon market. These requirements shift competitive advantage from cost and chemistry towards institutional capability.

Speciality chemicals now command roughly twice the earnings multiple of commodity chemicals, and the segments improving margins fastest are water treatment and construction.

End-use markets

Construction and infrastructure	Industrial and manufacturing	Water treatment and hygiene	Consumer and homecare
Chlorinated	Caustic Soda	Ferric Chloride	Soda Ash
Polyvinyl Chloride
Polyvinyl Chloride	Soda Ash	Sodium	Caustic Soda
		Hypochlorite
Synthetic Iron Oxide	Liquid Chlorine	Liquid Chlorine
Pigments	Hydrochloric Acid

The Companys products and the markets they serve. Several products serve more than one market. Liquid Chlorine, Soda Ash and Caustic Soda each appear twice.

Construction and infrastructure

Construction is the largest single destination for the Companys products, and three of them serve it. The Indian construction chemicals market was valued at US$4.48 billion in 2025 and is expected to reach US$6.19 billion by 2034, a compound annual growth rate of 3.63 per cent. Demand is supported by government housing and infrastructure programmes, the spread of ready-mixed concrete beyond the largest cities, and tighter quality standards for construction materials.

Chlorinated Polyvinyl Chloride serves this market entirely, since all CPVC consumed in India goes into pipes and fittings. Domestic installed capacity stood at 95,000 TPA as of 31^st March 2025, with production of 75,000 tonnes in FY2025 at 79 per cent utilisation. Imports over the same year were 170,000 tonnes, more than double domestic output. The Indian CPVC pipes market is projected to grow from US$582 million in 2025 to US$1.16 billion by 2031, a compound annual growth rate of 12.1 per cent. CPVC is displacing galvanised iron, steel and copper in hot and cold-water plumbing, and is being transport.specifiedin

Polyvinyl Chloride shows the same import pattern, but at a larger scale. Domestic capacity was 1.64 million TPA as of 31^st March 2025, and production was 1.54 million tonnes at 94 per cent utilisation. Imports rose 11 per cent to 2.9 million tonnes, close to twice domestic production. The PVC pipes market reached 3.1 million tonnes in 2025 and is expected to reach 5.6 million tonnes by 2034, a compound annual growth rate of 6.59 per cent. Water supply, sanitation and irrigation programmes support that growth.

Synthetic Iron Oxide Pigments follow construction activity through two routes, concrete colouring and architectural coatings. Building and construction accounted for 51.1 per cent of global iron oxide pigment revenue in 2025, the largest end use. Paints and coatings is the fastest-growing application, at 5.05 per cent a year to 2031.

Asia-Pacific held 44.6 per cent of the global market in 2025 and is growing faster than the global average. In India, the pigments market reached US$3.2 billion in 2025. The paints and coatings industry was valued at US$10.46 billion in the same year, with projections to reach US$16.38 billion by 2030.

India produces less CPVC and PVC than it imports, so domestic capacity additions compete with imports rather than domestic competition.

Industrial and manufacturing

Caustic Soda and Soda Ash supply a broad base of manufacturing industries. Their demand tracks industrial output rather than any single sector, which makes this the steadiest volume base in the Companys portfolio. The Indian chlor-alkali market was valued at US$2.40 billion in 2024 and is expected to reach US$3.46 billion by 2033, a compound annual growth rate of 4.18 per cent.

Indian caustic soda capacity stood at 6.40 million TPA as of 31^st March 2025.

Production reached 5.02 million tonnes in FY2025 at 78.4 per cent utilisation.

The trade position strengthened during the year. Imports fell 31 per cent to 152,000 tonnes while exports rose 20.9 per cent to 563,000 tonnes, leaving the country a net exporter. Alumina refining, pulp and paper, textiles and chemical processing are the principal consuming industries.

Caustic Soda and Soda Ash supply a broad base of manufacturing industries. Their demand tracks industrial output rather than any single sector, which makes this the steadiest volume base in the Companys portfolio. The Indian chlor-alkali market was valued at US$2.40 billion in 2024 and is expected to reach US$3.46 billion by 2033, a compound annual growth rate of 4.18 per cent.

Indian caustic soda capacity stood at 6.40 million TPA as of 31^st March 2025.

Production reached 5.02 million tonnes in FY2025 at 78.4 per cent utilisation.

The trade position strengthened during the year. Imports fell 31 per cent to 152,000 tonnes while exports rose 20.9 per cent to 563,000 tonnes, leaving the country a net exporter. Alumina refining, pulp and paper, textiles and chemical processing are the principal consuming industries.

Alumina is the demand driver most likely to move over the next five years. Indian aluminium demand is expected to reach 7.5 to 8 million tonnes a year by 2030, and refinery capacity is being added to match it. One producer alone is raising alumina capacity to 3.1 million tonnes a year by June 2026. Each tonne of alumina consumes caustic soda, so refinery expansion translates directly into domestic caustic demand.

Soda ash is positioned differently, with a weaker trade balance. Capacity was 4.52 million TPA as of 31^st March 2025, with production of 3.79 million tonnes at 84 per cent utilisation. Imports were broadly flat at 1.02 million tonnes, equivalent to more than a quarter of domestic production, while exports fell 30 per cent to 295,000 tonnes. The Indian glass market reached US$5.2 billion in 2025 and is expected to reach US$9.0 billion by 2034. Building and construction accounts for 80.7 per cent of flat glass demand.

Caustic soda and soda ash moved in opposite directions in trade during FY2025, with caustic soda imports falling by nearly a third while soda ash imports held near a quarter of domestic production.

Water treatment and hygiene

Water treatment is the fastest-growing end use in the Companys range, driven by public investment rather than industrial cycles. That gives it a demand profile largely uncorrelated with the rest of the portfolio.

The Jal Jeevan Mission has provided tap water connections to 158.3 million rural households by March 2026, up from 32.3 million at its launch in 2019. The next phase targets a further 30 million connections, and the mission has been extended to December 2028. Each connection adds to the volume of water requiring treatment and disinfection, and the effect is recurring rather than one-off, because treatment continues for the life of the connection.

The Indian water treatment chemicals market was valued at US$2.0 billion in 2024. It is expected to reach US$3.3 billion by 2033, a compound annual growth rate of 5.1 per cent. Coagulants and flocculants, biocides and disinfectants, corrosion and scale inhibitors, and pH adjusters are the principal product groups. Municipal supply, power generation, oil and gas, mining, chemical processing and pulp and paper are the main consuming sectors.

Wastewater is the largest opportunity. The Indian wastewater treatment market reached US$10.4 billion in 2025 and is expected to reach US$19.4 billion by 2034, a compound annual growth rate of 7.0 per cent. Tightening effluent standards and the spread of zero liquid discharge requirements are the principal drivers.

Three of the Companys products serve this market directly. Ferric Chloride acts as a coagulant in water and wastewater treatment. Sodium Hypochlorite and Liquid Chlorine act as disinfectants, and dosing requirements are set by standards rather than preference. World Health Organisation guidance calls for a minimum of 0.5 parts per million of free residual chlorine to be maintained in water distribution.

Rural tap water connections have risen almost fivefold since 2019, and every connection adds to the volume of water that must be treated and disinfected for the life of that connection.

Consumer and homecare

Household consumption provides the steadiest demand in the Companys portfolio, because it follows income levels and hygiene habits rather than capital spending. India is the worlds third-largest consumer and producer of soap and detergent products. Consumption stands at 8.9 million tonnes against production of 8.8 million tonnes, leaving the sector close to self-sufficient.

The Indian soda ash market reached 4.64 million tonnes in 2025 and is expected to reach 5.28 million tonnes by 2034, a compound annual growth rate of 1.37 per cent. Demand from soaps, detergents and household cleaning products is the principal driver of that growth. Caustic soda serves the same sector, which gives the Company two products exposed to a single consumption trend.

The laundry detergent market was valued at US$5.00 billion in 2025 and is expected to reach US$7.60 billion by 2034, a compound annual growth rate of 4.13 per cent. Powder formats held 48.5 per cent of the market in

2025 and remain dominant, supported by affordability and suitability for both hand and machine washing. Liquid formats are growing faster from a smaller base, with that market valued at US$1.15 billion in 2024 and projected at US$1.79 billion by 2033.

Three forces support consumption. Urbanisation continues to raise the share of households buying packaged cleaning products. Washing machine ownership is rising, shifting demand toward formulated detergents. Household hygiene awareness has remained elevated, and growth is now extending into semi-urban and rural markets rather than concentrating in the largest cities. Together, these factors give the segment a demand base largely independent of the construction and industrial cycles that drive the rest of the portfolio.

Detergent demand grows with incomes and hygiene habits rather than capital spending, making it the least cyclical source of soda ash and caustic soda demand.

Opportunities and threats
Opportunities	Threats
Import substitution in CPVC and PVC	Chinese overcapacity
India imports more of both than it produces	Rising export volumes at falling prices
Margin-accretive end-use markets	Soda ash import pressure
Water treatment and construction chemicals led margin	Imports exceed a quarter of domestic production
improvement globally
Inorganic chemistry	Energy and power costs
The most durable speciality sub-segment across cycles	Chlor-alkali production is electricity intensive
Policy-led demand	Trade policy and compliance
Water and alumina demand set outside the industrial cycle	Tariffs moving and non-tariff barriers hardening
Non-cyclical consumer demand	Structural industry constraints
Detergent consumption follows incomes	Sub-global scale and low research intensity

The same four end-use markets that carry the Companys growth also carry its exposure, because import competition arrives in the products with the largest domestic shortfall.

Opportunities

The clearest opportunity is that India does not make enough of what it uses. Domestic production of both Chlorinated Polyvinyl Chloride and Polyvinyl Chloride falls short of imports, and in CPVC the shortfall is more than double domestic output. Capacity added in these products competes against imports rather than against other domestic producers, which is a materially different commercial position from one of domestic oversupply.

Second, the segments the Company serves are the segments where margins have improved. Between 2018 and 2024, water treatment chemicals recorded the largest operating margin improvement of any chemical segment globally, and construction chemicals the second largest. Both are end-use markets for the Companys products. Over the same period, polymers and petrochemicals contracted on both revenue and margin.

Third, inorganic chemistry has proved the most durable part of the speciality sector. Companies focused on inorganics have delivered the strongest returns across every time horizon measured, supported by pricing power, long-term customer contracts and effective cost pass-through. Indias raw material position in chlorine chemistry is favourable, which is the base from which the Companys Speciality Chemicals products are made.

Fourth, demand in two of the four end-use markets is set by public policy rather than by the industrial cycle. Rural water connections and the wastewater programme create recurring treatment demand that continues for the life of each connection. Alumina refinery expansion creates caustic soda demand that is contracted rather than traded. Household consumption of soaps and detergents moves with incomes rather than with capital spending. Together these give a substantial part of the portfolio a demand base that does not move with construction or industrial activity.

Threats

The principal threat is Chinese overcapacity and the export pricing that follows from it. Capacity additions have outpaced consumption growth across several value chains, and global petrochemical utilisation has fallen to around 70 per cent. Chinese export volumes have risen at double-digit annual rates while export prices have fallen. The effect reaches Indian producers through both domestic price competition and weaker export realisations, and it is structural rather than cyclical.

Import pressure is most acute in soda ash. Imports run at more than a quarter of domestic production, and the country is a net importer, which is the opposite of the caustic soda position. Soda ash is a substantial part of the Basic Chemicals segment, so pricing in that product is set partly outside India.

Input costs are the second exposure. Energy prices rose sharply in the final quarter of

FY2026 and further after the year closed, and thermal coal, power and freight all moved with them. Chlor-alkali production is electricity intensive, which makes power cost a direct determinant of margin rather than a general overhead.

Trade policy has become an active variable rather than a background condition. Tariff levels have moved repeatedly, supply chains are regionalising, and compliance requirements are hardening into non-tariff barriers. Registration and carbon border costs in European markets now fall directly on exporters, and they weigh more heavily on producers without the scale to absorb them.

The structural constraints of the Indian industry apply to the Company as they do to its peers. Most Indian plants are sized around domestic demand rather than to global scale benchmarks, research spending across the sector runs well below international levels, and value chains remain shallow. These limit the pace at which import substitution can be converted into export position.

2. Company overview

Heritage and corporate profile

DCW Limited was incorporated in 1939 and began operations in

Dhrangadhra, Gujarat, as Indias first soda ash plant. The Company has since built positions in chlor-alkali, Synthetic Rutile and Polyvinyl Chloride, and has moved progressively into speciality chemistry. It is the first manufacturer of Chlorinated Polyvinyl Chloride in India and one of the largest commercial-scale producers of Synthetic Iron Oxide Pigments in Asia. The Company has completed more than eight decades of operation and manufactures over 15 chemicals across its product families.

Manufacturing locations

The Company operates two manufacturing sites. The Dhrangadhra plant in Gujarat is the original works and remains the registered office. The

Sahupuram plant in Tamil Nadu is the larger integrated site, located near a port, which shortens logistics for both raw material intake and export dispatch.

The Company holds a captive power capacity of 58 MW, which supports uninterrupted supply to electricity-intensive chlor-alkali operations. A group captive solar facility of 44.5 MW was capitalised on 3^rd April 2025 to substitute approximately 25 per cent of the power requirement at Sahupuram. Land holdings extend to approximately 2,900 acres, with adequate land available at Sahupuram for future expansion.

Product families

The portfolio is organised into three product families. Speciality Chemicals comprises Chlorinated Polyvinyl Chloride and Synthetic Iron Oxide Pigments. Basic Chemicals comprises Soda Ash, Caustic Soda and Polyvinyl Chloride. Intermediate Chemicals comprises Synthetic Rutile, Liquid Chlorine, Hydrochloric Acid, Trichloroethylene, Utox, Ferric Chloride, Sodium Hypochlorite, Sodium Bicarbonate and Ammonium Bicarbonate.

Integration runs through the portfolio. Salt, Liquid Chlorine, Hydrogen and Hydrochloric Acid are produced captively and consumed in the manufacture of value-added products. Chlorinated Polyvinyl Chloride is produced by chlorinating the Companys own Polyvinyl Chloride, linking the two principal segments at the plant rather than only on the balance sheet.

Market reach

The Company supplies more than 100 customers and distributes to over 14 countries, including the United States, Japan, Malaysia and markets across Europe. Products serve more than 15 end-use industries. Manufacturing technology is supported by a licence from Arkema of France. Exports accounted for 28 per cent of revenue in FY2026.

The shift in mix towards Speciality Chemicals

Speciality Chemicals contributed 0.5 per cent of revenue in FY2016. In FY2026, the contribution was 28 per cent of revenue and 80 per cent of EBITDA. That change came through successive capacity additions rather than acquisition.

Two programmes account for most of it. Chlorinated Polyvinyl Chloride capacity rose from 21,600 TPA to 50,000 TPA over the last year to 31^st March 2026. Synthetic Iron Oxide Pigments capacity was debottlenecked from 18,000 TPA to 28,000 TPA in an earlier year. Basic Chemicals nonetheless remains the larger part of the business at 71 per cent of FY2026 revenue.

3. Operational review: Specialty Chemicals

Segment position

Speciality Chemicals comprises Chlorinated Polyvinyl Chloride and Synthetic Iron Oxide Pigments. The segment recorded revenue of 5,923 million in FY2026, up from 5,257 million in FY2025, a growth of 12.7 per cent. Segmental margin was 29.7 per cent against 35.3 per cent. The segment produced 80 per cent of segmental earnings before interest, tax, depreciation and amortisation from 28 per cent of revenue.

The margin outcome is the more important fact of the year. Segmental earnings declined by approximately 5 per cent while revenue grew. This was due to a fall in Chlorinated Polyvinyl Chloride net realisations, not weakness in volume, cost, or utilisation.

Chlorinated Polyvinyl Chloride

Capacity reached 50,000 TPA during FY2026. The expansion from 20,000 TPA to 40,000 TPA was commissioned on 22^nd July 2025, ahead of the September 2025 schedule and reached full utilisation & was commercialised within the second quarter. The final 10,000 TPA was completed towards the end of March 2026, as scheduled.

Production rose 60 per cent over FY2025, and the Company recorded its highest-ever sales volumes. Capacity utilisation was 102 per cent, down from 106 per cent in FY2025, measured against a capacity base that expanded during the year.

Realisations moved the other way. Net realisations corrected by more than 20 per cent during FY2026 under pressure from competitively priced imports. Domestic production of Chlorinated Polyvinyl Chloride remains below import levels, so incremental domestic capacity competes for volume currently supplied from outside India.

Synthetic Iron Oxide Pigments

Capacity stood at 28,000 TPA following debottlenecking from an original 18,000 TPA. Capacity utilisation was 83 per cent against 86 per cent in FY2025. The Company has recorded the highest sales volume ear. y duringthefinancial

Sales exceeded production during the year, which reduced inventory. Pigments were the only part of the product range where net realisations did not decline during FY2026. Work continued extending the grade range to widen market reach.

Conditions entering FY2027

The expanded capacity was in place for the full year only from the fourth quarter, and the final tranche was completed at the end of March

2026. The situation in West Asia has created near-term disruption in Polyvinyl Chloride supply chains and pricing, which affects both input costs and spreads.

4. Operational review: Basic Chemicals

Segment position

Basic Chemicals comprises Soda Ash, Caustic Soda and Polyvinyl Chloride, and it is the larger part of the business. The segment recorded revenue of 15,382 Million in FY2026 against 14,631 Million in FY2025, growth of 5.1 per cent. That is 71 per cent of the Companys revenue.

Segmental margin returned to a positive 2.4 per cent from a breakeven position in FY2025. Higher production across all products in the segment improved fixed cost absorption and the substitution of grid power with group captive solar at Sahupuram reduced power cost.

Soda Ash

Capacity utilisation rose to 91 per cent from 86 per cent in FY2025. Fourth quarter production was the highest recorded in eleven quarters.

Pricing remained under pressure. Imports into India run at more than a quarter of domestic production, and the country is a net importer of soda ash, so domestic realisations are set partly outside India. Net realisations declined during FY2026 in common with most of the product range.

Caustic Soda

Capacity utilisation rose to 90 per cent from 80 per cent in FY2025, the largest improvement of any product in the portfolio.

Caustic soda production results in generation of Chlorine and Hydrochloric Acid which is captively consumed in production of Synthetic Rutile, Chlorinated Polyvinyl Chloride, Ferric Chloride, Trichloroethylene, Sodium Hypochlorite and other intermediates. That integration reduces exposure to the merchant chlorine market, where realisations are frequently negative.

Polyvinyl Chloride

Capacity utilisation reached 100 per cent from 98 per cent in FY2025.

External sales fell during the year due to captive consumption of Polyvinyl Chloride in production of incremental Chlorinated Polyvinyl Chloride.This was a deliberate allocation of output to the higher value product and not a shortfall in demand. Production itself increased.

Capacity utilisation by product, FY2025 and FY2026. Utilisation improved in caustic soda, PVC and soda ash, and eased in CPVC and SIOP against expanded capacity bases.

Power and input costs

The group captive solar facility of 44.5 MW was capitalised on 3^rd April 2025 and ran for the full year. It substitutes approximately 25 per cent of the power requirement at Sahupuram. Management indicated annual savings of 250 Million to 300 Million at full drawdown, depending on the prevailing coal price.

Coal and purchased power remain the principal input cost. Thermal coal prices rose through FY2026, and energy costs increased further in the fourth quarter. Chlor-alkali production is electricity intensive, so power cost is a direct determinant of segmental margin rather than a general overhead.

Margin through the year

The margin path was uneven. The segment recorded 2.0 per cent in the first quarter and 2.4 per cent in the second. In the third quarter, the segmental margin was negative, and Company earnings before interest, tax, depreciation and amortisation fell 20.6 per cent, with profit after tax down

63.4 per cent.

The fourth quarter was the strongest of the year. Segmental revenue reached 4,391 Million against 3,622 Million in the third quarter and

4,108 Million in the fourth quarter of FY2025. The full-year outcome of 2.4 per cent is a return to profitability rather than a recovery to historical levels.

Conditions entering FY2027

Utilisation improved across all three products during FY2026, and the solar substitution now runs on a full-year basis. Import competition in soda ash and Polyvinyl Chloride continues, and the West Asia situation has disrupted Polyvinyl Chloride supply chains and pricing in the near term.

Intermediate Chemicals is a product family rather than a reported segment. Most intermediate output is consumed captively or reported within the principal segments.

Other Basic Chemicals

Synthetic Rutile

Synthetic Rutile recorded its highest ever sales volumes in FY2026. Production rose 20 per cent over FY2025. Sales exceeded production during the year, reducing the inventory that had accumulated during earlier periods of weak export demand.

The product is sold principally to Japanese customers. The improvement reflected closer customer engagement and better dispatch planning rather than a change in market pricing.

The intermediate chemical range

Liquid Chlorine, Hydrochloric Acid, and Trichloroethylene come from the chlor-alkali operation and serve pharmaceutical, water treatment, metal processing and electronics customers. Utox, Ferric Chloride and Sodium Hypochlorite serve dry cleaning, metal degreasing, water and wastewater treatment and disinfection. Sodium Bicarbonate and Ammonium Bicarbonate serve food, pharmaceutical and personal care applications.

Chlorine integration and captive consumption

Chlorine produced with caustic soda is consumed within the Company rather than sold into the merchant market wherever possible. It is used in Trichloroethylene, Synthetic Rutile, Chlorinated Polyvinyl Chloride and across the intermediate range. This is how the chlor-alkali operation converts a by-product into revenue.

5. Operational review: Others

Segment position

The Others segment recorded revenue of 131 million in FY2026, up from

116 million in FY2025. Segmental margin was 71.7 per cent against 68.2 per cent. The segment is small in revenue and contributed 4 per cent of segmental earnings before interest, tax, depreciation and amortisation.

6. Financial review

Revenue from operations

Revenue from operations was 21,436 million in FY2026, up from 20,003 million in FY2025, a growth of 7.2 per cent. Growth came from volume rather than price. Net realisations declined across the product range during the year, except for Synthetic Iron Oxide Pigments.

Two effects worked against revenue. Chlorinated Polyvinyl Chloride realisations corrected by more than 20 per cent. Further incremental Polyvinyl Chloride volumes were diverted to captive consumption, removing them from external sales. Production and sales volumes rose across all product segments other than external Polyvinyl Chloride. Exports accounted for 28 per cent of revenue.

Operating costs

Total expenses were 19,220 million against 18,071 million, up 6.4 per cent, while revenue grew 7.2 per cent. Costs therefore grew more slowly than revenue, driving the margin improvement.

Power and fuel are the highest controllable costs and the principal items to move during the year. The group captive solar facility to substitute the power requirement at Sahupuram has been operational since April 2025 and ramped up in phases to reach its optimum capacity by the end of the fiscal year. Raw material costs reflected lower input prices for most of the year and higher energy-linked costs in the fourth quarter.

EBITDA and EBITDA margin

Earnings before interest, tax, depreciation and amortisation were 2,216 million, up from 1,932 million, a 14.7 per cent increase. Margin improved 68 basis points to 10.3 per cent. This is the second consecutive year of margin improvement from the FY2024 low of 9.4 per cent.

Segmental performance

The relationship between the two principal segments inverted during FY2026. Basic Chemicals returned to a positive margin of 2.4 per cent from a breakeven position, while the Speciality Chemicals margin contracted from 35.3 per cent to 29.7 per cent.

The cause of the Speciality Chemicals contraction was the fall in Chlorinated Polyvinyl Chloride net realisations and the consequent narrowing of the spread against Polyvinyl Chloride. It did not arise from volume weakness, cost inflation or underutilisation. Speciality Chemicals grew revenue 12.7 per cent on record volumes in the same year.

Speciality Chemicals still produced 80 per cent of segmental earnings from 28 per cent of revenue. Basic Chemicals produced 16 per cent of segmental earnings from 71 per cent of revenue. The two segments moved in opposite directions at the margin line, and the portfolio outcome was steadier than either segment alone.

The path through the year

Quarterly performance was uneven. Revenue rose through the year to 6,091 million in the fourth quarter. That was 13.2 per cent above the fourth quarter of FY2025 and 17.2 per cent above the third quarter.

Speciality Chemicals produced 80 per cent of segmental earnings from 28 per cent of revenue, and Basic Chemicals 16 per cent from 71 per cent. The portfolio outcome was steadier than either segment alone.

The third quarter was the weakest. Earnings before interest, tax, depreciation and amortisation fell 20.6 per cent and profit after tax

Basic Chemicals recorded a negative segmental margin. Quarterly earnings recovered to 646 million in the fourth quarter, 42.9 per cent above the third quarter and 16.0 per cent above the same quarter of FY2025.

Finance cost, depreciation and tax

Finance cost fell 7.5 per cent to 622 million from 672 million. This is the third consecutive annual reduction, from 1,261 Million in FY2023. Depreciation rose 3.9 per cent to 1,038 Million, reflecting the capitalisation of the completed capital expenditure. The tax charge was 264 Million against 191 Million.

Profit after tax and earnings per share

Profit before tax was 746 million against 492 million, up 51.6 per cent.

Profit after tax was482 million against 301 million, up 60.1 per cent from a low base. Profit margin earnings per share were 1.63 against 1.02.

Profit after tax growth was driven by improved earnings and lower finance costs; neither alone accounts for the movement.

Return ratios

Return on capital employed improved to 8.56 per cent from 6.46 per cent.

Return on equity improved to 4.57 per cent from 2.92 per cent. Both remain below the levels recorded in FY2023, when the commodity cycle was at its peak.

Working capital and liquidity

Working capital moved from 11 days to 1 day. This change came mainly from a reduction in inventories, which fell to 3,094 million from 4,276 million, as sales of Synthetic Iron Oxide Pigments and Synthetic Rutile exceeded production. Cash and bank balances, including fixed deposits, stood at

2,043 Million against 2,151 Million.

Significant changes in key financial ratios

The following ratios changed by 25 per cent or more against FY2025. Debt to equity fell from 0.41 to 0.26, down 37 per cent, on repayment of 1,500 million of gross debt with no fresh term borrowing. Net profit margin rose from 1.50 per cent to 2.25 per cent, up 50 per cent, on higher earnings and lower finance cost. Interest coverage improved by 27 per cent for the same reasons.

Debtors turnover, inventory turnover,currentratioandoperatingprofitmargin did not change by 25 per cent or more. The current ratio was 1.01, down from

1.08. Operating profit margin was 10.34 per cent, up from 9.66 per cent.

Return on net worth

Return on net worth was 4.57 per cent in FY2026, up from 2.92 per cent in FY2025, an increase of 56 per cent. The increase arose from a 60.1 per cent rise in profit after tax, against a smaller increase in net worth.

Credit rating

India Ratings and Research Private Limited retained the Companys ratings on 26^th June 2026. Bank loan facilities of 182 Million and 8,884 Million are rated IND A with a Stable outlook and IND A1. The rating has been maintained at this level since FY2024.

63.4 per cent, and

7. Capital expenditure and capital allocation

The capital expenditure cycle

FY2026 completed a capital expenditure programme that ran across three financial years. The programme had two components: expanding

Chlorinated Polyvinyl Chloride capacity and the group captive solar facility at Sahupuram. Both are now complete and operating.

Chlorinated Polyvinyl Chloride Phase III

Capacity rose from 40,000 TPA to 50,000 TPA during FY2026, with the final 10,000 TPA tranche completing towards the end of March 2026 as scheduled. The preceding tranche, taking capacity from 20,000 TPA to points to 2.25 per cent. Diluted 40,000 TPA, was commissioned on 22^nd July 2025 against a September 2025 schedule and reached full utilisation within the second quarter.

Taken across the programme, capacity rose from 21,600 TPA to 50,000 TPA. The expansion was commissioned on time and within budget, and the incremental output was commercialised without increasing inventory.

Group captive solar

The group captive solar facility was capitalised on 3^rd April 2025 with an installed capacity of 44.5 MW. It substitutes approximately 25 per cent of the power requirement at the Sahupuram plant. Benefits were visible in power costs from the first quarter and ran for the full year.

Synthetic Iron Oxide Pigments capacity position

Capacity stands at 28,000 TPA following debottlenecking from an original 18,000 TPA in an earlier year. Utilisation was 83 per cent in FY2026.

Funding and capitalisation

The programme was funded from internal accruals and existing facilities. No additional term borrowings were availed during FY2026. Capital work in progress fell to 216 Million on 31^st March 2026 from 563 Million a year earlier, as projects moved from construction into property, plant and equipment.

Balance sheet position at year-end

Gross debt stood at 2,758 Million on 31^st March 2026, down from 4,258 Million a year earlier, a reduction of 1,500 Million achieved entirely through scheduled repayments. Cash and bank balances, including fixed deposits, were 2,043 million, leaving net debt of 714 million.

Net debt to equity fell to 0.07 from 0.20. Net debt to earnings before interest, tax, depreciation and amortisation fell to 0.32 from 1.09. Finance cost fell for the third consecutive year.

Outlook

Management has stated that the expanded Chlorinated Polyvinyl Chloride capacity will improve speciality volumes. The Company enters the year with a leaner balance sheet. Management has also stated that it will remain watchful on capital deployment given the situation in West Asia. The Company has not published dated targets beyond these statements.

8. Risk management

Risk governance framework

The Board has adopted a Risk Management Policy and has constituted a Risk Management Committee in accordance with the Companies Act, 2013 and the applicable regulations. The Committee reviews risks and reports them to the Board. The Company holds ISO 9001,

ISO 14001, ISO 28000, ISO 45001, and ISO 50001 certifications.

Commodity price risk

The Companys principal products are priced against global benchmarks over which it has no influence. FY2026 provided the exposure directly. Net realisations declined across the entire product range during the year, except for Synthetic Iron Oxide Pigments. Chlorinated Polyvinyl Chloride realisations corrected by more than 20 per cent.

Mitigation rests on cost position and portfolio composition rather than on hedging, which is not available at scale for these products. Utilisation improved across all major products during FY2026, which spread fixed costs over higher volumes.

Import competition risk

Competitively priced imports, particularly from China, held domestic realisations down through FY2026. Soda ash imports run at more than a quarter of Indian production, and the country is a net importer. Chlorinated Polyvinyl Chloride and Polyvinyl Chloride imports both exceed domestic production.

Mitigation is through cost competitiveness, product qualification with anchor customers and integration that shortens the input chain. The domestic industry has sought trade-remedy protection for Polyvinyl Chloride.

Input cost and energy risk

Chlor-alkali production is electricity intensive, and power is the largest input cost. Thermal coal prices rose through FY2026, and energy costs rose further after the year-end. The group captive solar facility substitutes approximately 25 per cent of Sahupurams power requirement and reduces exposure to coal prices for that portion.

Foreign exchange risk

The Company both exports and imports, which provides a partial natural hedge. Where residual exposure requires it, the Company enters currency hedge contracts with multiple maturities.

Regulatory and environmental risk

Operations are subject to safety, health, and environmental regulations at both sites. Both plants operate zero effluent processes. The Company monitors air emissions and noise monthly, and tests pressure vessels, boilers, lifting tackle and passenger lifts on defined cycles.

9. Human resources

As of 31^st March 2026, the Company had a total workforce of 1,853 personnel, comprising 796 employees and 1,057 workers deployed across its manufacturing facilities and head office. The Company recognises its people as an important driver of business performance and places considerable importance on the expertise and industry experience of its promoters and leadership team. It continues to strengthen its workforce by bringing in skilled professionals and personnel with relevant capabilities to support business operations and future growth. The Company promotes a work culture built on fairness, ethical conduct, regulatory compliance, and accountability throughout the organisation. The Company also provides mechanisms for employees to voice concerns and report issues without apprehension of retaliation or unfair treatment. Through its Code of Conduct, the Company addresses matters such as preventing sexual harassment and protecting whistleblowers, reinforcing its commitment to a respectful, responsible, and transparent workplace.

10. Internal control systems and adequacy

Control framework

The Company maintains internal control systems appropriate to the nature of its business and the scale of its operations. The systems authorise, record, and report transactions in accordance with internal control policies, regulatory requirements, and risk management principles.

The implementation of SAP S/4HANA began during FY2026. The system standardises processes across both manufacturing sites and the head office, and strengthens financial control, data visibility and governance.

Internal audit

The internal audit function reports to the Audit Committee of the Board. The Audit Committee periodically reviews the adequacy of internal control systems and oversees the resolution of significant audit observations.

The statutory auditors, cost auditors and secretarial auditors reported no instances of fraud during FY2026 under section 143(12) of the Companies Act, 2013.

Statutory and regulatory compliance

Systems are in place to ensure compliance with applicable laws, and the

Board has confirmed that those systems effectively during the year. A Whistleblower Policy provides directors and employees with a channel to report concerns, including any leak of unpublished price-sensitive information. It provides direct access to the Chairperson of the Audit Committee.

Information technology and controls

The Company operates an information technology infrastructure that supports production planning, electronic procurement, transaction processing, budgeting, forecasting and cash flow modelling. An in-house technical team is responsible for system development and user support.

Cybersecurity and data privacy are managed under a structured cyber risk framework and a formal cybersecurity policy. The data centre has been migrated to a managed secure cloud environment. Access controls and information security are reviewed under that framework.

Cautionary statement

This Management Discussion and Analysis contains statements describing the Companys objectives, estimates and expectations that may be forward-looking within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed oradequateandoperating implied. Important factors that could affect operations include economic conditions in the markets served, changes in government regulation and tax laws, and movements in input costs. Other incidental factors affecting demand, supply and price may also apply.