Excel Industries Ltd Management Discussions

The business of the Company is classified into two divisions - The Chemicals Division and the Environment and Biotech (ENBT) Division

CHEMICALS BUSINESS

The Chemicals Division operates in the Specialty Chemicals segments catering to various end use segments including Agrochemicals, Water Treatment, Detergents, Lube Oil Additives, Polymers and Pharmaceuticals.

Areas of Operations - Chemicals Division

The Company is a leading producer of specialty chemicals.

The Company is active in the manufacture of Agrochemical Intermediates Specialty Chemicals, Polymer Inputs and APIs.

The Company is a leading supplier of certain key Agrochemical intermediates. The Company has global scale capacities for these intermediates.

The specialty chemicals product range includes Anti-Scalant and Chelating Agents, Biocides and Phosphorous Derivatives.

In case of both -Agrochemical Intermediates as well as the anti- scalant and chelating agent range, the Company is backward integrated in the sense that the basic derivatives required for the production of these product categories are manufactured in house.

Phosphorous Chemistry is a core strength for the Company. The Company is a leading player in basic and advanced Phosphorous derivatives catering to various end use industries.

The Company is active in polymer inputs and Pharmaceutical Intermediates and APIs. The Company currently has a small portfolio of niche products for specific applications and is a market leader in some of these products.

INDUSTRY STRUCTURE AND DEVELOPMENT

India is the fifth largest producer of chemicals. The total size of the chemicals industry is US $ 200 billion with specialty chemicals constituting ~ 20 - 25% of it. This means that the size of the Indian specialty chemicals industry is ~ US$ 40- 45 billion

The Indian specialty chemicals industry delivered good growth during 2013-2022. However, it has been facing headwinds since the past two years due to supply chain disruptions, destocking and other macroeconomic factors.

However, the long-term story of the specialty chemicals sector in India remains intact.

The Company is a key supplier to the Agrochemicals and Specialty chemicals (Corrosion Inhibition - anti scaling / Chelating agent, biocides and Pharma Intermediates and APIs) It is an active participant in the biocides and pharma segments.

SEGMENT PERFORMANCE

Agrochemical Intermediates

India is a global player in Agrochemicals thanks to a strong manufacturing base and a large domestic market.

The size of the Indian agrochemicals industry is US$ 8.5 billion. India has built a strong position in Agrochemicals.

In case of Agrochemicals, the availability of locally backward integrated supply chain is a key contributor to the leadership position which the Indian Industry has been able to achieve in certain classes of agrochemicals. Excel has played a key role in developing the local supply chain for some of these intermediates. Agrochemicals in general face regulatory scrutiny. To address these concerns, the Industry has invested in a science-based approach of data generation which helps in mitigating the risks and safe use of these compounds.

The company is a leading supplier of certain key Intermediates to the Agrochemical Industry. Chinese manufacturers are also active in these intermediates.

Agrochemical Intermediates are influenced by the strong cycles of Agrochemical demand and the ability and resilience to weather these cycles is key to success in this area.

Specialty chemicals

As mentioned above, the specialty chemicals range of the Company includes Anti-Scaling and Chelating Agents, Biocides and Phosphorus Derivatives. Considering that this product group spans multiple product categories, the industry structure is sought to be separately elaborated as appropriate.

Corrosion Inhibition, anti - scaling and Sequestering Agents cover a wide range of chemistries and due to their properties are essential ingredients across end use segments including water treatment, soaps and detergents, industrial and institutional cleaners, textile auxiliaries and other end use industries.

Biocides are products which due to their anti-microbial properties are essential in wide ranging end applications such as paints and coatings, agrochemicals, metal working fluids, water treatment, wood preservation, adhesives and other applications.

Even though the dosage of biocides is low, because of their functionality, they have a critical role in the end formulations.

The Manufacture of Biocide Actives requires specialized chemistry capability including multi-step synthesis. In addition, formulation knowledge is required to ensure that the biocide works well with the end formulation.

Phosphorus Derivatives are an important class of products which find application in various segments like Agrochemicals, Lube Oil Additives, Mining Chemicals,

EV battery electrolytes, Pharma Intermediates and APIs, flame retardants and other applications. India has a well-developed Phosphorous Industry catering to the aforementioned segments.

Pharmaceutical Intermediates and APIs

? Pharmaceutical Industry has a high level of regulatory compliances

? India has emerged as a global player in the generic pharma space.

? However, the dependence of the Industries on imported APIs from China is high.

REVIEW OF YEAR 2024-25

The year 2023 - 24 was an unfavourable year mainly due to depressed demand for the products in which the Company is present.

The global agrochemicals industry went through a destocking cycle which lasted nearly two years. Destocking in major markets like USA also meant a depressed demand for certain specialty chemicals produced by the Company.

Green shoots of revival of agrochemical demand were seen in the last quarter of 2023-24.

During the year 2024 - 25, in keeping with the cyclical nature of the agrochemical industry, we saw sudden changes in demand.

For certain products in the specialty chemicals portfolio, the company faced price competition from Chinese producers who had large exportable surpluses due to the sluggish domestic demand in China.

The above challenges and sudden changes in the market situation demanded a great agility on the part of the Company. The Company retained a sharp focus on volumes, quick response to changes in market situation (e.g. ramp up of production volumes), careful monitoring of pricing and efficient working capital management

The above steps resulted in an improvement in sales turnover as well as profit margins over the previous year.

OUTLOOK FOR THE YEAR 2025-26

Unpredictability and Volatility have been the order of the day for the past few years. This continues with the geopolitical developments and the US Tariff situation and its fallout. In this situation, there will always be an element of uncertainty in any outlook that is sought to be presented.

We have entered this financial year with a demand revival seen for Agrochemical Intermediates. Forecasts predict a good monsoon in this year which should augur well for the demand for our Agrochemical Intermediates.

For certain specialty chemicals manufactured by the company, the company expects to see continued price competition.

The company continues to see a good demand for one of the biocides produced by it. The company has undertaken a capacity expansion to meet the increased customer demand which is targeted to come onstream in the second half of this financial year.

The company continues to see good demand for the polymer input manufactured by it.

Overall the Company maintains a position of cautious optimism for the financial year 2025 - 26.

OPPORTUNITIES

Even though the chemicals sector has faced headwinds in the past couple of years, we believe in the long-term story of the Indian chemical sector. Our strategic approach is grounded in this belief. We will continue to work on our strategic plan and growth opportunities and strategies for materializing the same.

The company will continue to consolidate its position as a preferred supplier for the Agrochemical Intermediates manufactured by it.

The company is pursuing growth opportunities in the specialty chemicals area. Apart from expanding volumes in the current set of products, the company is working on adding new products with similar chemistries as well as adding complementary products for the application segments currently served by it.

As mentioned in the outlook section, the company sees a good demand for one of the biocides manufactured by it and has undertaken a capacity expansion in this area. Apart from this, the company is working on developing a range of biocides using chemistries in which the Company has certain strengths. In keeping with the manufacturing philosophy of the Company, the approach here is to backward integrate into the actives as well.

In Pharma, the company will continue to be a niche operator manufacturing APIs and Intermediates in a fully backward integrated manner.

Here the company will look out for opportunities which fit in with this philosophy in chemistries / processes where the company has strengths.

In the last financial year 2024 - 25, the company could secure a longterm supply contract for a specialty chemical involving chemistries and processes where the company had inherent strengths. The company will continue to work on such opportunities.

The company is also working on development of products involving new chemistries. Developing capabilities in these chemistries will give it the strength to pursue future growth opportunities.

While continuing to consolidate in the existing business and work on new opportunities, the company continues to focus on Health and Safety, Environment and Sustainability.

In the previous Financial Year, the company had entered into an agreement for long term supply of Solar Power. From June, 2024 to March, 2025, around 48% of our total electricity consumption was from renewable sources.

RISKS AND CONCERN

There is no production of certain key raw materials required by the Company in India and the Company has to depend on imported sources. Also, the production and supply of some of these raw materials is concentrated in a few geographical areas. The company mitigates this risk by working closely with the suppliers and also ensuring supplier base diversification.

Some of the products manufactured by the company / end products for materials supplied by the Company are under regulatory pressure. The company supports efforts of industry associations and forums in science and data-based efforts to assess and come out with ways to arrive at the correct assessment of the risks and to mitigate the risks associated with these products. We have seen successes with this approach.

In the short term, the uncertain situation can cause a sudden shift in demand or supply chain dynamics. Geopolitical disturbances have become the order of the day. The Company mitigates this risk by being agile, quickly responding to the changes and focusing on efficient cash and working capital management

Supply Chain / logistics disruption is a key risk which has assumed importance post the outbreak of the Covid 19 pandemic.

The Geopolitical disturbances and other uncertainties in the environment serve to amplify this risk. In order to mitigate this risk, we are agile to changes in the situation. We work closely with key supply chain partners to be aware of the emerging trends and take proactive actions.

ENVIRONMENT & BIOTECH DIVISION

Industry Structure and Development

India generates approximately 160,000 tons of municipal solid waste per day, of which around 95% is collected and 50% is scientifically processed. The country has significantly expanded its waste processing infrastructure, including 250 MW of installed Waste-to-Energy (WTE) capacity and major initiatives in bio-methanation.

The C&D waste and MRF sectors are undergoing major changes driven by new regulations and operational reforms. Indias Ministry of Environment, Forest and Climate Change (MoEFCC) introduced the Construction and Demolition Waste Management Rules, 2025, aiming to supersede the 2016 rules.

The MRF sector has expanded since the 2021 withdrawal of the MDA scheme. Under SBM 2.0 and the EPR framework, cities must set up decentralized MRFs with traceability systems, supported by private investment, automation, and integration of informal workers.

OPPORTUNITIES AND THREATS

Based on our success story in Maldives, focus is on Export Business from the South Asian countries and small Island countries. Maldives project for OWC machines has extended to four additional islands, underscoring our growing international footprint. Maldives project is commissioned on 10 islands, which is funded by the World Bank and due to successful commissioning of project, it gives us an opportunity to extend the business with world bank funded countries. Similarly, the Govt. of India is working on the project "Dakshin" which emphasises on supporting Island countries in south Asia and Africa.

To address evolving regulatory requirements and pricing competitiveness in domestic market, we introduced an economical, high-efficiency model tailored for decentralized waste management.

The OWC economical model helps to compete with low priced OWC machine manufactures.

Similarly, Plans are underway to launch the MS-based higher version of economical model in the upcoming fiscal year, to cater the Bulk waste generators (BWGs), which gives us wider scope for future business.

SEGMENT PERFORMANCE AND OUTLOOK

During the year under review, Decentralized Waste Management segment achieved a notable milestone in the export domain. We successfully secured a second export tender from the Government of Maldives, funded by the World Bank, generated revenue of Rs.3.88 Crores.

Composting of organic waste faces challenges such as slow public participation, poor source segregation, high operational costs and poor revenue generation, no market for compost, regulatory hurdles, land and space constraints and end-product quality certification (FCO standards in India), hence we decided not to participate in Community Projects, and hence our focus in current financial year is towards export and nongovernment domestic opportunities.

Operating an MRF plant involves real challenges-mixed waste input, high costs, market fluctuations, and compliance issues. These affect efficiency and viability across the sector. Guided by our corporate values of integrity, responsibility, and continuous improvement, we are addressing these issues to enhance performance and assess the path toward profitability or a principled exit.

Construction & Demolition (C&D) waste processing plant at Rajkot was commissioned and became operational in April 2024, producing recycled aggregates and paver blocks.

Major challenges in C&D waste plant includes poor quality of input material, limited demand for aggregates and value-added products, no tipping fees, weak enforcement resulting in low project viability. We are working with organizations in this sector to manufacture and sell the existing products and create meaningful joint venture for better quality of products and sales.

RISK AND CONCERNS

Despite multiple awareness initiatives and regulatory mandates, source level waste segregation, both at the household and institutional levels continues to be inadequate. This significantly impairs the efficiency of downstream processing and leads to the contamination of recyclable and compostable waste streams.

Indias waste management ecosystem remains largely dependent on the informal sector, which operates outside formal regulatory structures and lacks access to social security, safety standards, and institutional support. While the country has enacted progressive rules for the management of solid waste, the implementation of these regulations remains inconsistent across states and municipalities, resulting in a disconnect between policy frameworks and actual outcomes.

In South Asia and Africa, unregulated dumping and open burning are widespread, leading to severe environmental pollution. Limited municipal funding and weak implementation of Public Private Partnership (PPP) models further constrain the development of essential waste management infrastructure.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has put in place adequate internal financial controls with reference to the financial statements, some of which are outlined below:

? Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules,

2006 that continue to apply under Section 133 and other applicable provisions of the companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors.

? The policies to ensure uniform accounting treatment are prescribed to the subsidiaries of your Company. The accounts of the subsidiary companies are audited and certified by their respective Auditors for consolidation.

? The Company has proper and adequate system of internal audit and control which ensures that all the assets are safeguarded against loss from unauthorized use and that all transactions are authorized, recorded and reported correctly.

? The Company continuously improves upon the existing practices for each of its major functional areas with a view to strengthen the internal control systems.

? The Company has assigned internal audit function to an independent 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 internal audit are reported and reviewed by the Audit Committee. The management ensures implementation of the suggestions made by the internal auditors and reviews them periodically.

FINANCIAL PERFORMANCE AND ANALYSIS

During the year under review, the net revenue from operations increased by 18% from Rs. 826.14 Crores in FY 2023-24 to Rs 978.07 Crores, largely due to improvement of overall demand situation in the chemical segment and better price realizations compared to previous year. Companys profit before tax increased by 449% from Rs. 20.19 Crores in FY 2023-24 to Rs. 110.91 Crores, due to revival of overall demand in chemical segment, higher price realizations in key products and rationalization of key input material costs. Consequently, net profit after tax for the year increased by 453% from Rs. 15.11 Crores to Rs. 83.50 Crores.

The revenue from operations of the Chemicals Division for the year 2024 - 25 was Rs. 968.76 crores (Rs. 811.98 crores for FY 2023 - 24) and that of the Environment and Biotech Division was Rs. 9.31 crores ( Rs 14.16 crores for FY 2023- 24).

The Reserves excluding revaluation reserves as on 31.03.2025 are at Rs. 1170.91 Crores.

KEY FINANCIAL RATIOS

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to give details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof:

The Company has identified following ratios as key financial ratios:

Sr. No.	Particulars	FY 2024-25	FY 2023-24	% Change
1	Current Ratio	3.14	2.56	22.56
2	Debt-to-Equity Ratio (%)	1.04%	0.17%	530.05
3	Return on Equity (%)	7.41%	1.46%	407.21
4	Inventory Turnover Ratio (in times)	9.76	6.95	40.52
5	Trade Receivable Turnover Ratio (in times)	4.88	4.84	0.83
6	Net Profit (%)	8.54%	1.83%	366.85
7	Interest Coverage Ratio (times)	47.82	11.98	299.25
8	Operating Profit Margin (%)	11.58%	2.67 %	334.23

Note for these ratios where percentage change is in excess of 25%:

? Movement in current ratio is mainly due to increase in current assets during the year ? Movement in debt equity ratio is mainly due to increase in debt during the year ? Movement in % of return on equity and net profit (%) is due to increase in profit during the year ? Movement in inventory turnover ratio is on account of increase in revenue during the year ? Movement in interest coverage ratio is due to increase in profit earned during the year ? Movement in operating profit margin is due to increase in profit earned during the year.

HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATIONS

Excel HR remains committed to fostering a positive and productive work environment where employees are empowered to perform at their best, maintain well-being, and experience happiness at work.

During FY 2024-25, our primary focus was on building organizational capabilities to support the next phase of growth. This was achieved through strategic hiring-placing the right talent in the right roles at the right time-and adapting to an aggressive hiring strategy. We also emphasized the development of leaders who inspire, empower, and model the right behaviors. Particular attention was given to the hiring, retention, and development of a diverse talent pool.

We continued to prioritize holistic growth and development opportunities for our people. As part of our talent development initiatives, the Master the Mind Monkey: Experience your Excellence workshop by Dr. Anand Patkar was conducted across multiple batches. The "Leaders of Tomorrow" programme concluded in August 2023, and as a continued effort, we are investing in our future leaders through focused coaching and mentoring to prepare them as future- ready successors.

Organizational goals and key themes were cascaded clearly from the top, with specific deliverables outlined and agreed upon by each function, business unit, and site. This approach fostered a strong sense of ownership among business and functional leaders, facilitating the establishment of meaningful KRAs for the year. A weekly management review mechanism, Bloom, has been implemented to closely monitor the progress of departmental KRAs, with active involvement from the senior leadership team.

All three company sites operated smoothly, supported by our employee-friendly policies and a proactive industrial relations strategy.

As of March 31, 2025, the employee strength stood at 1,112.

CAUTIONARY STATEMENT

Statements in this report on Management Discussion and Analysis relating to the Companys objectives, projections, estimates, expectations or prediction may be forward looking within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events. Actual results might differ materially from those expressed or implied depending upon factors such as climatic conditions, global and domestic demand-supply conditions, raw materials cost, availability and prices of finished goods, foreign exchange market movements, changes in Government regulations, tax structure, economic and political developments within India and the countries where the Company conducts its business and other factors such as litigation and industrial relations. The Company assumes no responsibility in respect of forward-looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.