GHCL Ltd Management Discussions

On the positive side, inflation eased across most economies, supported by tighter monetary policies and improving supply- side conditions. However, services inflation remained firm due to strong wage growth. This allowed central banks in advanced economies to start reducing interest rates, although there is still uncertainty around how far and how fast they will go.

The United States economy remained strong, backed by stable consumption and job growth. Europe showed mixed performance as countries like Spain and France saw recovery driven by services, while manufacturing-heavy economies like Germany continued to struggle. In Asia, Chinas recovery slowed due to weak domestic demand and challenges in the real estate sector, while India stood out as one of the strongest performers, especially in manufacturing and services.

Sector-wise, the global services sector continued to expand, while manufacturing showed signs of weakness, particularly in Europe. Business sentiment in manufacturing remained cautious due to slower demand and higher input costs.

Trade policy uncertainty remains high, with more protectionist measures being adopted by major economies. This could impact investment flows and global trade if such trends continue.

Looking ahead, while commodity prices are expected to stay stable, risks from geopolitical tensions and climate-related events remain. As the global economy adjusts to new realities, businesses are focusing more on resilience, diversification, and long-term value creation.

At GHCL, we continue to monitor these developments closely. While global uncertainty remains, opportunities are emerging in areas like sustainable manufacturing, efficient supply chains, and expanding global consumption. Our strategy remains focused on operational excellence, customer delight, building agility, managing risks proactively, and creating value for all our stakeholders in a changing world.

Indian Economy Overview:

Indias economy remained on a steady growth path in FY 2024-25, demonstrating resilience amid global headwinds and geopolitical uncertainties. As per the first advance estimates released by the Ministry of Statistics & Programme Implementation (MoSPI), real GDP is projected to grow by 6.4 percent for the year, reaffirming Indias status as one of the fastest-growing major economies globally.

On the demand side, private consumption witnessed a strong rebound, especially in rural areas, aided by favourable monsoon conditions and an improved agricultural outlook. Private Final Consumption Expenditure (PFCE) is projected to grow by 7.3 percent, with its share in GDP (at current prices) rising to 61.8 percent, the highest level recorded since FY 2002-03.

On the supply side, Gross Value Added (GVA) is also estimated to grow by 6.4 percent, with agriculture, industry, and services all contributing to growth. The agriculture sector remains a bright spot, growing at 3.8 percent, backed by record Kharif food grain production, improved water reservoir levels, and a strong start to the Rabi season.

The industrial sector recorded a growth of 6.2 percent, led by infrastructure and construction activities. However, growth was uneven within sub-sectors. Construction and utilities performed strongly, while manufacturing faced challenges in the second quarter due to weak global demand, weather disruptions, and festival timing mismatches. Indias Manufacturing PMI remained in expansion, and outlook surveys by the RBI indicate improving order books and business sentiment in upcoming quarters.

The services sector continued to anchor Indias growth, expanding by 7.2 percent, driven by momentum in financial services, real estate, IT, travel, and logistics. Contact-intensive sectors such as hospitality and transport also gained traction, with hotel occupancy, air traffic, and cargo movement showing positive trends.

On the investment front, Gross Fixed Capital Formation (GFCF) grew at 6.4 percent. While the pace of capital formation moderated compared to last year, there are signs of revival. Government capital expenditure picked up in the second half of the year, and private sector investment showed early signs of improvement. The RBIs OBICUS¹ survey and data on order books of capital goods companies indicate growing capacity utilisation and a build-up in capital expenditure pipeline.

On the external front, exports grew by 5.6 percent in H1 FY25, while imports remained largely flat. In Q2, falling global commodity prices led to a contraction in imports, resulting in positive contribution of net exports to GDP.

Importantly, Indias growth has been supported by macroeconomic stability, with controlled inflation, a manageable fiscal position, and a stable balance of payments. These factors have contributed to building resilience in the domestic economy and bolstering investor confidence.

GLOBAL SODA ASH INDUSTRY DEMAND-SUPPLY SCENARIO

The total Global Soda Ash capacity in 2024 is estimated to be around 79 Million MT (MMT) in 2024 with an operating rate of around 91 percent. Global demand was reported at around 71.5 MMT in 2024 showing a growth of 8.3 percent over 66 MMT in 2023. Industrys major demand drivers are higher production of glass and detergents aligned to rising disposable income, increasing per capita consumption in various emerging economies and strong demand from the emerging ESG-driven applications which can enable exponential growth for soda ash such as solar glass, lithium carbonate, and flue gas treatment.

The world estimated 2024 distribution of soda ash by end use is as under:

Soda Ash is produced through natural and synthetic processes; but their production methods differ significantly, both are chemically identical. Natural soda ash is derived from trona ore and is limited to regions with suitable deposits and often needs to be transported to much longer distances to reach the customer. Synthetic soda ash, while more flexible in terms of production location, is more suitable for geographies where natural soda ash is not available. In the recent years, natural soda ash has gained market share, especially where trona resources are available. Soda Ash capacity can be classified as one-third natural and two-third synthetic manufacturing process. Soda ash production capacities are highly concentrated in China, United States, Turkey, and Western Europe. In 2024, largest exporter of Soda Ash were US and Turkey, while the largest importer were Brazil, Mexico in South America, and India, Indonesia and Thailand in Asia.

INDIAN SCENARIO

India is one of the fastest-growing economies in the world. It is expected to be the worlds third-largest consumer of soda ash. Historically, the India soda ash industry reported strong annual growth of around 5 percent on a long term basis. The projected growth till 2030 is around 6 percent, which is driven by increasing demand from ESG based applications of soda ash such as solar glass, flue gas treatment, and lithium carbonate batteries along with stable demand from traditional segments such as flat and container glass, soaps and detergents, and other chemical products. This is due to rising population, urbanisation, and higher disposable income, resulting in increased demand of industrial products, housing, transportation, consumer goods, processed foods, and beverages.

The Indian Soda Ash market constitutes of two varieties - Light and Dense grade, which are mostly used in detergent and chemical industries; and in the glass industry respectively. Almost all the major industry players are located in the state of Gujarat due to the closeness and ready availability of the main raw materials namely limestone and salt.

Indian soda ash demand saw a growth (estimated of 5 percent) in 2024-25. While demand from the Detergent & Chemical segments

are reported to be stable, The Flat Glass sector continues to be under pressure from low-priced imports from China & Vietnam, however growth was seemingly better. The Solar glass industry has shown better growth on account of imposition of antidumping duty. While we may see some improvement in demand going forward, the pricing situation may remain under pressure in the coming quarters on account of surge in supply from domestic industry.

GHCL SODA ASH BUSINESS

GHCLs Soda ash manufacturing facility is located at Sutrapada, Gujarat. GHCL is one of the Indias leading producers and has an annual production capacity of 1.2 Million MT per annum of Soda Ash (Anhydrous Sodium Carbonate) and 0.12 MMT per annum of Sodium Bicarbonate (Sodium Hydrogen Carbonate).

GHCL caters to almost 26 percent of the countrys annual domestic soda ash demand. We have embarked this remarkable journey from a market share of 17 percent in the FY 2005. GHCL shares highly successful client relationships and is the preferred supplier to all major soda ash consumers including the leading FMCG and glass producers in India.

GHCL has enjoyed competitive advantage due to the following factors;

• Efficiencies that come with scale, as the largest single site producer

• Oversight of professional management, that has experience of over 3 decades in the field

• Culture of innovation driving operational efficiency

• Driving excellence across the value chain - right from procurement and production to marketing, and distribution.

• Backward integration into key raw materials with strategic control over fuel

• Accent on operating excellence with best-in-class productivity and rates of utilization

• Customer centricity backed by high level of serviceability with On-Time-In-Full (OTIF) tracking

At GHCL, sustainability is embedded in our long-term strategy, shaping how we innovate, operate, and create value. Our commitment goes beyond compliance as we are actively driving the transition towards cleaner and more efficient manufacturing. We are continuously investing in cleaner technologies, reducing carbon emissions, and optimizing our processes to minimize environmental impact. Several initiatives have been implemented to enhance energy efficiency, air quality, and resource conservation. We are co-firing biomass in boilers and integrating renewable sources to drive sustainable manufacturing. We have deployed 40-tonne electric trucks for material transportation, marking a shift towards greener logistics. Additionally, electric cars, two-wheelers, and CNG buses are being introduced for daily transport within our plants. These initiatives are not just reducing our carbon footprint but also promoting a cleaner and healthier working environment. Our goal is to achieve a 30 percent reduction in Scope 1 and 2 emissions by 2030, and internal carbon pricing mechanisms are guiding us towards smarter, eco-friendly procurement and operational decisions.

We are working on various expansion initiatives to achieve substantial growth as well as to diversify the product basket. During the year, we have received the environmental clearance for our multi-phase, greenfield Soda Ash plant and further work is under progress. In addition, we are gaining significant momentum for our Vacuum Salt and Bromine projects, which are likely to be commissioned in FY 2025-26.

Our fundamental objective is to embrace long-term, sustainable business agenda based on simple business techniques. As an established player in the market, we understand the expectation of our key stakeholders. Over the years, we have been diligently observing, evaluating, and strengthening our sustainability targets.

OPPORTUNITY AND CONCERNS

Due to global geopolitical uncertainties and weak consumer sentiments in the western countries, global soda ash markets remain abundantly supplied. This creates surplus inventory of soda ash which often gets exported to various markets including the Asian markets. The Indian industry faces challenges from dumping of cheaper soda ash imports and this creating pressure on the domestic manufacturers. Further, recent drop in caustic soda price has resulted in silicate market shifting to caustic soda, which has adversely impacted the soda ash producers.

GHCL CONSUMER PRODUCTS BUSINESS

GHCLs consumer product business comprises of salt portfolio, which serves both the industrial and consumer markets. The business has salt harvesting works at Vedaranyam, Tamil Nadu and the refinery for edible salt manufacturing is at Chennai, Tamil Nadu. Industrial salt is known for its quality, and maintains strong demand from the regional caustic soda manufacturers. Edible salt is marketed under the trusted brands I FLO and SAPAN, and is aligned with evolving consumer preferences toward healthier dietary choices. GHCL CPD is taking utmost care and is meticulously working towards proving the end user the best quality and user experience.

The salt production has been adversely impacted by changing weather pattern resulting in unseasonal rainfall particularly during the salt harvesting season. However, in FY 2024-25, salt production witnessed resurgence compared to last few years. This was driven by proactive planning, operational efficiency, and favorable weather conditions during key periods of the harvesting cycle.

GHCL Consumer Products business remains committed to delivering high-quality products and ensuring a superior user experience. The strategic focus remains on enhancing brand presence, optimizing supply chains, and reinforcing quality standards to meet the dynamic needs of both industrial and retail consumers. Looking ahead, the salt business is poised for continued growth with a focus on innovation, sustainability, and operational excellence.

COMPANY PERFORMANCE - PERFORMANCE HIGHLIGHTS - CONTINUED OPERATIONS

DETAILS OF SIGNIFICANT CHANGES IN THE KEY FINANCIAL RATIOS & RETURN ON NET WORTH

As per the Schedule V to the Listing Regulations read with Regulation 34(3) of the Listing Regulations, details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios and any changes in Return on Net Worth of the Company including explanations therefor have been provided in note no. 45 (refer page no. 283 of Annual Report).

Internal Controls and Risk Management

GHCL Limited continues to operate with a strong and well- structured internal control system that supports all areas of its business. This framework remains consistent with the previous year, ensuring operational efficiency, safeguarding of assets, accurate and transparent financial reporting, and compliance with applicable laws and regulations.

To maintain the integrity of our processes, the Company has established detailed management information systems, robust corporate policies, and clearly defined roles and responsibilities across departments. Qualified and experienced personnel oversee our internal processes, helping to prevent any unauthorized use of assets or misstatement of transactions.

To further strengthen oversight, GHCL engages reputed independent internal audit firms to conduct regular audits across business locations. The Audit & Compliance Committee of the Board closely monitors these reports, reviews statutory compliances, and ensures timely corrective actions are taken wherever required. The committee meets periodically to review findings from internal auditors and discuss action taken reports with the management.

In line with global standards, our statutory audit continues to be conducted by a globally recognized Big 4 firm. Additionally, a compliance management tool is in place to help monitor and ensure timely adherence to all legal, financial, environmental, labour, and safety regulations.

Risk management is embedded into GHCLs culture and day-today operations. The Risk & Sustainability Committee, constituted as per Regulation 21 of the SEBI Listing Regulations, oversees our enterprise risk framework. Internal Audit and Risk Management functions work in tandem to identify, assess, and manage key risks—both financial and non-financial. Risks are monitored regularly and control measures are tailored based on their severity and likelihood.

GHCL adopts a proactive, de-risked approach to growth, ensuring that new investments are thoroughly assessed from a risk perspective. Our structured risk management system enables the Company to respond to emerging challenges while continuing to protect stakeholder value.

Further details on key business risks and mitigation strategies are provided in the "Risks and Opportunities" section of this report.

Human Capital Management

At GHCL, we take immense pride in our people. Our employees are not just a part of the business—they are central to our success. Their commitment, energy, and talent are the reason GHCL has been certified as a "Great Place to Work" for the eighth consecutive year, and now, for the first time, we have been recognized among the Top 50 Great Places to Work in Manufacturing—a significant milestone and a proud moment for the entire GHCL family.

We see our workforce as one of our five key stakeholder groups, and managing human capital has always been a core strength. This belief is reflected in the results of our HR Culture Audit by GPTW (Great Place to Work?), where we have continued our upward trajectory. For FY 2024-25, GHCLs overall GPTW Culture Audit score improved from 3.4 to 3.8, showing meaningful progress across all key pillars:

Over the last nine years, GHCLs average Culture Audit scores have steadily risen, reflecting our commitment to building a workplace where people feel valued and inspired.

At GHCL, our HR function plays a vital role in shaping a high- performance, caring, and collaborative culture. Human capital is managed in a structured way with focus on Talent Management, Capability Development, Employee Engagement, and Harmonious Industrial Relations. These pillars are the foundation of our inclusive and performance-driven environment.

We continue to review and refine our HR policies to align with our core values, business priorities, and benchmark standards. Our HR mission remains focused on creating a value-driven, high- performance learning culture in a digitally enabled environment, making GHCL an employer of choice.

As of March 31, 2025, GHCL employed 3447 individuals across all categories. For more insights into our people-first initiatives and employee development efforts, refer to the Human Capital section of this report.

CSR Initiatives

At GHCL Limited, we continue to believe that the true measure of our success lies not only in business performance but in the positive impact we create for the communities around us. From the very beginning, we have been committed to contributing to the holistic development of society—especially in the regions where we operate.

Over the past few years, our efforts have been more focused and purposeful. Weve continued to expand our CSR footprint across our operational geographies, with a clear goal of building stronger, more meaningful relationships with local communities. These efforts help us earn and uphold our "social license to operate," while ensuring that we remain aligned with the expectations and aspirations of the people we serve.

Our dedicated CSR initiatives are thoughtfully designed and systematically implemented in partnership with our NGO collaborators and the GHCL Foundation Trust. Together, we strive to create programs that are both impactful and sustainable.

For a deeper understanding of our ongoing work in community development, please refer to the Social & Relationship Capital section of this report.