Eiko Lifesciences Ltd Management Discussions

GLOBAL AND ECONOMIC OUTLOOK

The global economic environment in 2024 and the near-term outlook present a mixed but promising landscape for the specialty chemicals sector. While macroeconomic uncertainties, geopolitical tensions, and inflationary pressures persist, the industry is buoyed by strong demand from key end-use sectors, a growing emphasis on sustainability, and continuous innovation.

The specialty chemicals market is projected to experience robust growth, with market size estimates expected to reach approximately USD 1,293.23 billion by 2034, growing at a CAGR of 3.66% from 2025 to 2034. This growth is underpinned by the increasing demand for high-performance, customized solutions in a variety of industries, including automotive (especially electric vehicles), electronics, construction, pharmaceuticals, and personal care. The shift towards more innovative, efficient, and sustainable products is a key driver, with a growing consumer and regulatory push for eco-friendly and bio-based chemicals.

However, the industry is not without its challenges. Geopolitical conflicts and trade tensions continue to create supply chain disruptions, leading to volatility in raw material and energy prices. This has been particularly evident in the European market. To mitigate these risks, companies are increasingly focusing on building more resilient and regionalized supply chains and investing in digital tools for real-time monitoring. Inflation and rising interest rates also pose a challenge, putting pressure on profit margins. In response, many companies are implementing cost-efficiency programs and leveraging data analytics for more dynamic pricing strategies.

INDIAN ECONOMY AND OUTLOOK: RESILIENT GROWTH AMIDST GLOBAL CROSSCURRENTS

The Indian economy continues to be a beacon of growth and stability in a world navigating significant economic and geopolitical uncertainties. As of mid-2025, India has solidified its position as the worlds fourth-largest economy and remains the fastest-growing major economy. Projections from various international and domestic agencies paint a picture of resilient growth, supported by strong domestic fundamentals, although headwinds from a complex global environment persist.

Leading institutions forecast a robust growth trajectory for India. The International Monetary Fund (IMF), in its April 2025 World Economic Outlook, projected Indias economy to expand by 6.2% in the fiscal year 2025-26 and 6.3% in 2026-27. While this represents a slight moderation from earlier forecasts, it significantly outpaces projected global growth of around 2.8% for 2025. Other analysts, including Deloitte, remain cautiously optimistic, forecasting growth in the range of 6.3% to 6.7% for the current fiscal, citing strong high-frequency indicators and the positive impact of policy reforms.

The Indian economy is on a firm footing in 2025, demonstrating remarkable resilience. The outlook is positive, with strong growth, moderate inflation, and a stable policy environment. However, navigating the challenges posed by the global slowdown and addressing domestic issues like unemployment and boosting private investment will be crucial for sustaining this growth momentum in the years ahead.

KEY DRIVERS FOR THE SPECIALTY CHEMICALS INDUSTRY (2025)

1. Innovation & Sustainability: Continued R&D in green chemistry, bio-based, and recyclable products is driving growth. Sustainability initiatives and circular economy adoption are critical to meeting regulatory and customer demands and gaining competitive advantage.

2. Growing Demand from High-Value Sectors: Rising consumption in electronics, pharmaceuticals, construction, water treatment, and advanced materials fuels specialty chemicals demand, with increasing need for customized, high-performance products.

3. Supply Chain Resilience & Geographic Diversification: Companies are building agile supply networks, emphasizing nearshoring and regional hubs (like India and Southeast Asia) amid geopolitical tensions and shifting trade policies, boosting export opportunities.

4. Operational Excellence & Cost Management: Digitalization, automation, and efficiency improvements help control costs and enhance margins amid raw material volatility and capacity challenges.

5. Workforce & Skills Development: Upskilling for digital capabilities, R&D, and sustainable manufacturing is essential for innovation and long-term industry competitiveness.

FINANCIAL AND OPERATIONAL PERFORMANCE

During the financial year 2024 25, the Company delivered a strong performance across key financial indicators, reflecting improved operational efficiency, disciplined execution, and early results from strategic initiatives.

Revenue from operations stood at 3,249.18 Lakhs, marking a growth of 16.3% over the previous years 2,792.93 Lakhs. This increase was driven by better volume off-take in core specialty chemicals, expansion into new product categories, and initial contributions from the logistics verticals.

EBITDA improved significantly to 307.45 Lakhs from 178.88 Lakhs in the previous year, representing a year-on-year growth of over 71.9%. The EBITDA margin expanded to 9.46% compared to 6.4% in FY 2023 24, highlighting improved cost efficiency and better product mix.

Profit after tax rose to 174.08 Lakhs from 75.15 Lakhs, nearly doubling on the back of higher operating leverage and streamlined expenses. The PAT margin improved to 5.19%, up from 2.69% in the previous year.

These results underscore the Companys continued focus on profitability, operational discipline, and value creation. The positive momentum also reflects the early benefits of diversification into logistics and healthcare research, which are expected to contribute more meaningfully in the coming years.

SEGMET

As on 31^st March 2025, the Company operates under the following segments (Both standalone and consolidated)-

Agrochemicals

Oleo Chemicals

Pharmaceuticals

Food Additives

clinical research, development

Logistics

MATERIAL DEVELOPMENT DURING THE YEAR

1. Expansion into Logistics through Subsidiary EikoVivify Logistics Private Limited (EVL)

During the year, Eiko LifeSciences Limited expanded into the logistics sector through its wholly owned subsidiary, EikoVivify Logistics Private Limited. This marks an important step in broadening the companys portfolio beyond specialty chemicals into a complementary and fast-growing space. EVL focuses on acquiring, manufacturing, leasing, renting, and managing shipping containers that support the movement and storage of goods. These containers are essential infrastructure for industries across the board, including chemicals, pharmaceuticals, consumer goods, and industrial products. The idea behind setting up EVL is to build a reliable, efficient, and scalable logistics platform. With our experience in global supply chains and international exports, this venture allows us to strengthen control over our logistics while creating a new source of income.

EVL has been set up with a clear plan:

To lease and manage a range of shipping containers used in logistics and storage.

To source containers both within India and from international markets.

To provide leasing services to companies involved in goods transportation.

To offer full-service container maintenance and management, along with related logistics support.

This move is expected to improve operational efficiency, reduce dependence on third-party logistics, and open new opportunities in an adjacent sector that aligns with our core business.

Key development during the year

EVL signed a long-term service agreement with S J Logistics (India) Ltd, a leading international logistics company. This partnership is a key milestone in our logistics journey. Under this arrangement, EVL acquired around 1,000 containers of different types and sizes including dry containers, open-top units, flat racks, and refrigerated containers. This agreement not only gives EVL immediate scale but also enables stronger integration with partners, better cost control, and sustainable growth for both parties.

2. Expansion into Clinical research and development in specialty chemicals, healthcare, and other medical fields through its subsidiary Eiko Scientific Solutions LLP.

This year, the Company also ventured into clinical research and healthcare-related innovation through its wholly owned subsidiary, Eiko Scientific Solutions LLP. This step reflects our intent to build long-term value in adjacent sectors that rely heavily on chemical innovation and regulatory expertise. chemicals, healthcare, and other medical fields. Its scop Eiko e also includes the import and export of cutting-edge technologies that have applications in pharmaceuticals, diagnostics, and healthcare delivery. The Board has approved an investment of up to 5 crore over the next three years for this initiative. The aim is to explore new frontiers in science and technology that complement our core business while creating opportunities in fast-growing and resilient sectors.

3. Rights issue during the year

On 17 December 2024, the Company issued a Final Reminder cum Forfeiture Notice for the First and Final Call payment on 14,10,894 partly paid rights shares. The call money was received on 12,71,303 shares. These shares were allotted on 24 January 2025 and subsequently listed on 28 April 2025. For the remaining 1,39,591 shares where the call money was not received, the Company has decided to forfeit them. The application for approval of forfeiture has been submitted to the BSE and received approval from BSE dated 28^th July, 2025

STANDALONE KEY FINANCIAL INFORMATION AND KEY PERFORMANCE INDICATORS (KPIS)

( in Lakhs unless otherwise specified)

r>

Particulars	Fiscal 2025	Fiscal 2024	Fiscal 2023
Revenue from operations	3,249.18	2,792.93	1,832.14
EBITDA	307.45	178.88	180.93
EBITDA Margin (%)	9.46	6.40	9.44
Profit/ (loss) after tax	174.08	75.15	76.88
PAT margin (%)	5.19	2.69	4.01

OPPORTUNITIES AND THREATS FOR SPECIALTY CHEMICAL COMPANIES IN INDIA

OPPORTUNITIES

1. Strong Domestic and Export Demand

Indias specialty chemicals sector is projected to grow at a CAGR of 11 16%, supported by surging demand from fast-growing end-user industries electronics, automotive, construction, food, and pharmaceuticals.

Exports are booming, growing at nearly 20% annually as global customers diversify supply chains away from China, presenting a "China+1" advantage for Indian players.

2. Favorable Government Policies and Incentives

Production-linked incentive (PLI) schemes, infrastructure investments (such as PCPIRs and plastic parks), and ease-of-business reforms are attracting investments and improving competitiveness.

India is expected to receive chemical industry investments worth 8 lakh crore by 2025, encouraging capacity expansion and innovation.

3. Technological and Innovation Edge

Enhanced R&D in specialty formulations, green chemistry, and process optimization distinguishes Indian companies internationally.

Investments in digital and automation technologies boost productivity and supply chain efficiency.

4. Emergence in High-Growth Segments

New growth frontiers include advanced materials for semiconductors, electric vehicles (EVs), battery storage, and clean energy solutions like green hydrogen, supported by strong policy and industry focus.

Steadily rising per capita chemical consumption currently below the global average signals significant untapped potential in domestic markets.

5. Global Value Chain Integration

Indias role in global specialty chemical value chains is set to deepen through trade agreements, export incentives, and growing technical capability, strengthening its position as a reliable global supplier.

THREATS

1. Overcapacity and Chinese Competition

Persistent global overcapacity, especially from China, continues to exert pricing pressures and heighten competition, both domestically and in export markets. Dumping by Chinese producers remains a key threat to Indian margins and market share.

2. Volatile Raw Material and Energy Costs

Fluctuations in prices of crude derivatives and other key inputs, compounded by uncompetitive global energy prices, can erode profitability and challenge operational planning.

3. Environmental Compliance and Regulation

Stricter domestic and international environmental norms require higher compliance investments. Delays in environmental clearances and evolving global ESG standards raise costs and operational risks.

4. Supply Chain and Logistical Risks

Geopolitical tensions, shifting global trade policies, and logistical bottlenecks amplify risks of supply disruptions and cost escalations.

Indias dependence on imports for certain feedstocks exacerbates vulnerability.

5. Project Execution, Talent, and Infrastructure Challenges

Delayed project approvals and infrastructure gaps (especially in ports and utilities) can slow expansion.

Acute need for skilled workforce in process chemistry and safety; lack of talent and industrial-academic partnerships may restrict rapid scaling and innovation.

6. End Market Volatility

Slow or uneven recovery in key export markets and cyclical risk in end-use sectors (e.g., auto, construction, agriculture) could impact demand stability and revenue growth.

PLANT & MACHINERY

Our manufacturing facilities have plant & machinery, which includes Stainless Steel Reactors, Stainless Steel Flaker, Glass Lined Reactors, Stainless Steel Centrifuges, Glass Line Centrifuges, Agitated Nutsche Filter, Blenders, Nitrogen Station, Steam Vacuum, Bag Filters, and support equipment like Boilers, Chilling Plant, Cooling Tower, Tray Dryers etc.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATION FRONT

The Company has young, capable, experienced and dedicated manpower and various professionals support from in house and external sources with expertise in different areas leading the growth of Company towards better operational and financial position. During FY 2024-25, the Company continued to show signs of positivity and growth, providing the Management with an appetite for enhancing potential and driving growth and development of its people. Further, Human Resource department is continuously reviewing the expense policy to become more cost effective. The Company values and understands the need for continuous growth and development of its people to have greater productivity and provide job satisfaction and also equip them to meet growing organizational challenges. Your Company has genuine concern and top priority for the safety and welfare of its employees.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a proper and adequate system of internal audit and controls which ensures that all the assets are safeguarded against loss from unauthorized use or disposition and that all transactions are authorized, recorded, and reported correctly. The Company continuously strives to improve upon/evolve and implement best practices with a view to strengthening the internal control systems.

The Company has assigned an internal audit function to a leading firm of Chartered Accountants. Regular internal audit and checks are carried out to ensure that the responsibilities are discharged effectively. All major findings and suggestions arising out of the internal audit are reported and reviewed by the Audit Committee. The Management ensures implementation of these suggestions and reviews them periodically.

RESEARCH AND DEVELOPMENT

Research and Development (R&D) plays a pivotal role in innovation and invention of new molecules. New product development is always a priority for the Company as the needs of consumers are constantly changing globally. Apart from new product development, its paramount for specialty chemicals companies to develop and upgrade existing products. Investment in research and development (R&D) is never wasted as the right kind of product and breakthrough can help the company to have an edge over competitors. Your Company emboldens R&D to cater to the need of our customers, and we have developed a number of niche molecules chemicals as per customer specifications for pharmaceutical industries, Argo Chemicals, fragrance and flavors.

ENVIRONMENTAL ISSUES

The Company is constantly engaged in upgrading our manufacturing processes by adopting the best available technology, which is environmentally sustainable and safe to operate. The primary focus of the Company has been pollution control and clean environment solution. Our aim is to have processes that have ‘zero impact on employees and the environment. We follow efficient manufacturing processes by using minimum energy and raw materials. The effluents generated at our manufacturing units are treated on-site to meet all the standards set by regulatory authorities.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATION PERFORMANCE

The Company has all the plans for tight budgetary control on key operational performance indication with judicious deployment of funds without resorting to any kind of borrowing wherever possible.

CAUTIONARY STATEMENT

The statement in this report on Management Discussion and Analysis may be forward looking statement within the meaning of applicable security laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could, however, differ materially from those expressed or implied.

Important factors that could make a difference to the companys operations include global and domestic demand supply conditions, finished goods prices, raw material cost and availability and changes in government regulations and tax structure, economic development within India and the countries with which the company has business contacts and other factors such as litigation and industrial relations.

The Company assumes no responsibility in respect of forward looking statements, which may be amended or modified in future on the basis of subsequent developments, information or events.

By order of the board	Registered Office
For Eiko LifeSciences Limited	604, Centrum IT Park,
	S G Barve Road, Near Mulund Check Naka
Sd/-	Wagle Estate, Thane West 400 604
Laxmikant Kabra	Phone: 022 - 2539 0009
Chairman	Emai: investor.relations@eikolifesciences.com
	Website: www.eikolifesciences.com