GHCL Ltd Management Discussions

DISCLAIMER:

Readers are cautioned that this Management Discussion and Analysis contains forward-looking statements that involve risks and uncertainties. When used in this discussion, the words "anticipate", "believe", "estimate", "intend", "will", and "expected" and other similar expressions as they relate to the Company or its business are intended to identify such forward looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements and risks and opportunities could differ materially from those expressed or implied in such forward-looking statements. The important factors that would make a difference to the Companys operations include economic conditions affecting demand supply and price conditions in the domestic and overseas markets, raw material prices, changes in the Governmental regulations, labour negotiations, tax laws and other statutes, economic development within India and the countries within which the Company conducts business and incidental factors. The Company undertakes no obligation to publicly amend, modify or revise any forward-looking statements on the basis, of any subsequent developments, information or events. This report is prepared on the basis of public information available on website / report / articles etc. of various institutions. The following discussion and analysis should be read in conjunction with the Companys financial statements included herein and the notes thereto.

MANAGEMENT DISCUSSION AND ANALYSIS

The management of GHCL Limited has reviewed the Companys performance and key business developments for the financial year ended March 31, 2026, and shared its perspective on the road ahead. The outlook reflects the current economic environment and business landscape, though future developments—both domestic and global—across economic, social, and political fronts may influence actual outcomes.

REVIEW OF ECONOMY

Global Economic Overview:

The global economy continued its path of tenuous resilience amid a landscape of divergent growth and persistent geopolitical uncertainty. While the initial shocks of high inflation have largely been absorbed, global real GDP growth is projected to moderate from 3.2% in 2025 to 3.1% in 2026 (as per IMF World Economic Outlook). This small slowdown from 2025 is under the assumption of a limited-scale conflict in the Middle East.

Central bank policies in advanced economies have begun to pivot toward easing as inflation falls, though U.S. inflation remains slightly above target, creating a complex environment for global capital flows.

Energy costs and supply chain stability remain critical focal points. Sustained conflicts in the Middle East have amplified geopolitical risks, intermittently pushing energy prices higher and straining traditional trade routes. In response, the global industrial sector is shifting toward "resilience through diversification," with a heightened focus on regionalizing supply chains and mitigating exposure to volatile logistics costs. Despite these headwinds, the transition to a low-carbon economy continues to provide a structural tailwind for inorganic chemicals, particularly through the surging demand for solar glass and lithium-based energy storage systems.

Indian Economy Overview:

India stands as a beacon of stability, reaffirming its position as the fastest-growing major economy globally. As per First Advance Estimates (FAE) released by the National Statistics Office (NSO), for FY 2025-26, Indias Real GDP is estimated to reach H201.90 lakh crore, reflecting a robust growth of 7.4%. This momentum is underpinned by a massive infrastructure push (Capex), with government capital expenditure utilization rising significantly to boost gross fixed capital formation.

The "Make in India" initiative has matured into a powerful catalyst for the chemical sector. As per Economic Survey 2025-26, Manufacturing Gross Value Addition (GVA) grew by a staggering 9.13% in Q2 FY 2025-26, supported by targeted Performance Linked Incentive (PLI) schemes and a strategic shift toward medium and high-technology production. For GHCL, this translates into a strengthening domestic market as downstream industries, ranging from solar panel manufacturing to automotive and construction and to localize their supply chains. The intersection of these macro factors has created a unique "push-pull" dynamic for the inorganic chemicals industry.

(1) Infrastructure & Urbanization: Indias construction growth directly fuels demand for Flat Glass, a primary consumer of dense soda ash.

(2) Energy Transition: Global and domestic pushes for renewables have made Solar Glass the fastest-growing end-use segment for soda ash, helping offset softness in traditional sectors.

(3) Supply Chain Resilience: Volatile Ocean freights due to

West Asian tensions have made domestic sourcing more attractive, allowing established Indian players like GHCL to leverage their proximity to customers and localized raw material security.

GLOBAL SODA ASH INDUSTRY

DEMAND-SUPPLY SCENARIO

Global soda ash capacity is projected to reach approximately 81 million metric tons in 2025, with plants operating at around 90% utilization. Global demand grew to around 72.5 million metric tons, reflecting a year-on-year growth of 1.4% from 71.5 million metric tons in 2024. China witnessed demand growth of 1.2% as growth moderated in 2025 following strong expansion in 2023 and 2024, which was primarily driven by solar glass and electric vehicle production.

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 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 2025, the largest exporters of Soda Ash were US, Turkey, China and Bulgaria while largest importer were Mexico and Brazil in South America, and India, Indonesia and Thailand in Asia.

The conflict involving Iran, Israel, and the USA is expected to influence overall demand, supply and pricing dynamics in the coming quarters. This conflict has resulted in increased energy and raw material prices, impacting operational costs worldwide. At the same time, concerns about higher shipping and transport costs are increasing as conflict could hamper traditional trade routes and cause delays. As a result of which, there could be adverse impact in the international trade of soda ash.

China

China is the largest producer and consumer of soda ash globally, with an annual capacity of approximately 40.5 million metric tons, which is almost half of the global soda ash capacity. China has strengthened its soda ash production capacity with the commissioning of the Berun Phase-I natural soda ash facility in Inner Mongolia in early 2024 with a capacity of 5.0 million metric tons. This is likely to be followed by commissioning of Phase-II in 2026, adding an additional 2.8 million metric tons of capacity. Chinas soda ash production reached approximately 39.8 million metric tons in 2025, marking a year-on-year growth of 3.1%.

Chinas domestic consumption increased by 1.1% to reach 37.6 million metric tons, driven mainly by growth in the electric vehicle and detergent sectors. However, overall demand moderated compared with the strong expansion of the previous two years. In 2025, demand from the solar glass and flat glass sectors fell by about 8.7% and 2.5% respectively, while detergent consumption rose by 3.1% and EV production rose by 26.4%. The housing market continued to show signs of weakness. Exports surged by 80% to 2.19 million metric tons, as producers sought international markets to offset softer domestic demand.

US

The United States has installed soda ash capacity of about 14.0 million metric tons in 2025, with average operating rates of 81%. During the fourth quarter of 2025, Solvay completed a soda ash expansion at its Green River, Wyoming facility; however, this capacity has not yet been brought into operation. Searles Valley Minerals (SVM) shut down its 1.4 MMT soda ash plant in California in the first quarter of 2026. Total production during the year reached 11.3 million metric tons, representing 3% decrease year-on-year. Domestic Consumption was 4.45 MMT, a 2% year-on-year increase. Export volumes declined by 8%, with South America accounting for 34% and Southeast Asia accounting for 28% as the key destinations. In contrast, shipments to the Asia-Pacific region particularly China, Malaysia, and Vietnam fell by 26%.

Growing applications of soda ash in the glass industry represent one of the major growth drivers. Besides this, due to the implementation of stringent regulations by the government regarding industrial water, soda ash is utilized in wastewater treatment to improve the alkalinity of lakes and control the pH of water. Countries in South America have significant reserves of lithium, which has potential with growing demand for lithium carbonate in recent years due to the growing demand for electric vehicles, solar energy, and consumer electronics globally. This has, in turn, led to a growing demand for soda ash, which is used as a raw material in the production of lithium carbonate.

EU

The European soda ash market remained subdued in 2025, impacted by elevated natural gas prices, carbon surcharges, and weaker demand from the container glass and detergent sectors. Average operating rates in Western Europe stood at approximately 87%. Regional production declined by 3%, while domestic demand slipped slightly, easing between 0.5% to 1%. In Russia and the CIS region, production volumes remained significantly low due to geopolitical situation.

Within Europe, Turkey is strengthening its position due to availability of natural soda ash and access to cheaper energy, which is exerting pressure on the synthetic soda ash producers in rest of the Europe. This has resulted in closure of a soda ash plant with capacity of 0.4 MMT at Lostock, UK in January 2025, followed by the shutdown of a 0.6 million MT per annum facility in Poland in July 2025.

Outlook:

Going forward, it is expected that Soda Ash markets will grow at around 2.25%-2.50% until 2031. Every year, the end-user industry will require an additional 2 MMT of soda ash per annum. This growth is expected to be driven by increasing demand from environment-linked sectors, such as Solar Glass, Lithium Carbonate, and Sodium Bicarbonate. The United States remains the worlds largest exporter of Soda Ash, followed by Turkey and China. However, China maintains its position as the worlds leading producer.

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. The Indian Soda Ash market constitutes of two varieties – Light and Dense grade. Soda ash is mainly used in detergent, chemical and glass industry among others. Almost all the major industry players are in the state of Gujarat due to the closeness and ready availability of the main raw materials, namely limestone and salt and access to ports.

Total installed capacity stood at 4.85 million MT, with production estimated at 3.92 million MT. Domestic soda ash production increased by about 3% in FY 2024–25, supported by capacity expansions and stronger demand. Currently, imports account for nearly 20% of countrys soda ash demand. Imports fell by 6% to 0.91 million metric tons, compared with 0.96 million metric tons previously. Exports recorded a decline of 35%, from 0.30 million metric tons to 0.19 million metric tons, as producers focused on meeting the growing domestic market.

Historically, the domestic soda ash industry has recorded long-term annual growth of approximately 5%. Looking ahead, demand is forecast to grow at 6-7% annually through 2031, driven by ESG-linked applications such as solar glass and flue gas treatment, alongside stable demand from traditional segments including flat and container glass, soaps and detergents, and other chemical products. This trajectory is supported by demographic and structural factors such as rising population, rapid urbanization, increasing disposable incomes, and rising rural spending resulting in increased demand across industrial products, housing, transportation, consumer goods, processed foods, and beverages.

Geopolitical developments, particularly the conflict between US and Iran in the Western Asia region, could adversely impact the import volumes owing to elevated sea freight costs, thereby boosting domestic sales in the short run. Conflict hampers some traditional trade routes and/or cause shipping delays. On the other hand, the conflict has increased the raw material and energy costs and compress margins, while dampening demand in certain markets. As a result, the industrys profitability is anticipated to remain under pressure unless global demand strengthens materially.

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 on this remarkable journey from a 17 percent market share in 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

Resultantly the Company has placed higher on cost and margin leadership consistently, where every cost and price parameter impacts performance. We drive business forwards through innovation. There are several instances of interventions at the manufacturing and process level that have shown benefits including, energy efficient sodium bicarbonate plant, chiller integration, enhanced tower efficiency.

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 30% reduction in Scope 1 and Scope 2 emission intensity by FY2029-30 against FY2021-22 baseline and also 30% reduction in Scope 3 emission intensity by FY2029-30 against FY2021-22 baseline. Further, 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. Our new product diversification projects, Vacuum Salt and Bromine projects, and nearing completion and will be commissioned soon in FY 2026-27.

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 expectations of our key stakeholders. Over the years, we have been diligently observing, evaluating, and strengthening our sustainability targets.

OPPORTUNITY AND CONCERNS

The soda ash industry is expected to witness a steady growth trajectory over the coming years, supported by stable demand from traditional end-use sectors such as detergents, container glass and chemicals, along with increasing consumption from emerging applications. Rising demand from solar glass and the evolving electric vehicle ecosystem is creating new opportunities, including the use of soda ash in battery manufacturing and lithium extraction processes at a global level.

In India, demand is likely to be further supported by upcoming solar glass capacity additions and favourable government initiatives, including production-linked incentives and anti-dumping measures on imports. Rapid urbanization is expected to drive higher consumption of construction materials and detergents, while expanding water treatment and food processing infrastructure will continue to diversify demand beyond conventional segments. Domestic manufacturers are also well positioned to capitalize on planned capacity expansions and the opportunity to substitute imports, given that a notable portion of domestic demand is still met through overseas supply.

Global soda ash markets continue to remain well supplied due to ongoing geopolitical uncertainties and subdued consumer sentiment in Western economies. This has resulted in surplus inventories, which are increasingly being exported to other regions, including Asian markets. Consequently, the Indian industry is facing intensified competition from the influx of lower priced imports, putting pressure on domestic manufacturers.

Additionally, recent geopolitical tensions involving the United States and Iran may lead to volatility in freight and input costs, thereby impacting margins. The prevailing global supply demand imbalance, along with rising energy and environmental compliance costs, particularly for producers dependent on energy intensive processes, continues to challenge the sectors ability to sustain profitability.

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. GHCL Consumer Products business remains committed to delivering high-quality products catering to regional user demand. The strategic focus remains on enhancing the presence, optimizing supply chains, and reinforcing quality standards to meet the dynamic needs of both industrial and retail consumers.

COMPANY PERFORMANCE HIGHLIGHTS

Revenue for the financial year ended 31^st March 2026 is H 3144 Crore as against H 3273 Crore for the previous Financial Year ended 31^st March 2025.

Profit before financial expenses and depreciation for the financial year ended 31^st March 2026 is H 769 Crore as compared to H 965 Crore for the previous Financial Year ended 31^st March 2025.

PBT (Profit Before Tax) for the financial year ended 31^st March, 2026 is at H 649 Crore against H 838 Crore for the previous Financial Year ended 31^st March 2025.

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 to the financial statements.

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

GHCL Limited positions human capital as the primary architect of sustainable value creation and a strategic enabler of operational excellence. Aligned with the Business Responsibility and Sustainability Reporting (BRSR) framework and the "GHCL 2.0 – Excellence through Innovation" vision, the Company has transitioned from traditional personnel management to a strategic, digitally enabled human capital ecosystem. This progressive, people-centric approach is focused on building an inclusive, future-ready workforce aligned with global sustainability frameworks and industry benchmarks. For the tenth consecutive year, GHCLs commitment to a high-trust, high-performance culture has been validated by its Great Place to Work? Certification, further distinguished by a ranking among the Top 50 Great Places to Work in Manufacturing.

Strategic Human Capital Philosophy

GHCLshumancapitalframeworkisdrivenbyfourcorepillarsTalent Management, Capability Development, Employee Engagement, and Harmonious Industrial Relations ensuring a balanced focus on performance, people well-being, and organisational resilience. The Company continues to embed a values-driven, digitally enabled, and learning-oriented culture, reinforcing its position as an employer of choice, as reflected in its sustained "Great Place to Work" recognition and consistent improvement with our Culture Audit? score ascending to 3.8/5.0. This evolution reflects a profound strengthening of the psychological contract between the organization and its employees across five critical dimensions. Sustaining a culture where leadership effectiveness is measured by integrity and open communication and Institutionalizing core values that harmonize business objectives with ethical responsibility, ensuring GHCL remains a purpose-led entity and Values-Driven Conduct.

Workforce Composition & Diversity

GHCL remains committed to enhancing workforce diversity, with a structured roadmap to improve gender representation from the current level of 3.64% women participation. The organisation has defined short-, medium-, and long-term diversity targets, supported by inclusive hiring practices, leadership opportunities for women, and family-friendly policies such as maternity benefits, flexible work arrangements, and childcare support. Focused on identifying Critical Positions (top 15%) and establishing a rigorous Succession Planning Framework to mitigate leadership risks, prioritizing internal talent for 25-30% of leadership roles, fostering a culture of growth and multi-generational career progression.

Talent Development & Capability Building

A strong emphasis is placed on building a future ready workforce through structured learning interventions and capability enhancement initiatives: Shopfloor Skill Development: Targeted training programs and skill assessment initiatives for workmen, with structured modules and scalability roadmap, Early Talent Pipeline: Institutionalised internship (~60 interns annually) and apprenticeship(~65apprentices)programs,includingparticipation in national schemes, to strengthen talent supply, Leadership & Mentorship: Formal coaching and mentoring frameworks for GET/MT/DET employees, fostering accelerated development and cross-functional exposure and Knowledge Management (KSS): A structured Knowledge Sharing System that ensures institutional wisdom is digitized and accessible, promoting a continuous learning culture.

Employee Engagement & Well-being

GHCL promotes a holistic employee experience through Following the model of comprehensive care, GHCLs 6 Pillars of Well-being address the employee as a whole individual with implements the Structured Engagement Calendar covering physical, mental, social, and cultural dimensions, Robust Feedback Mechanisms including GPTW and internal surveys, enabling data-driven HR interventions, Recreational & Community Platforms such as Officers Club initiatives to strengthen belongingness, Comprehensive Health & Wellness Programs encompassing preventive healthcare, counselling support, and financial well-being. Our strategic partnership with Loop Health provides 24x7 digital access to primary care and mental health therapy and T Women Connect program targeted initiatives to enhance gender diversity, providing a supportive ecosystem for women to thrive in manufacturing roles.

Performance, Rewards & Recognition:

The Company has institutionalised a multi-tiered Rewards & Recognition framework, including, Digital recognition platform (GEMS), Production-linked incentive schemes, Long-service and performance excellence awards. These initiatives reinforce a high-performance culture while enhancing employee motivation and retention.

Governance, Ethics & Social Accountability

GHCL has initiated the SA8000 Social Accountability certification journey, demonstrating its commitment to ethical labour practices, human rights, and workplace standards. This includes gap assessments, expert consultations, and employee awareness programs to strengthen governance frameworks.

Industrial Relations & Statutory Excellence,

GHCL maintains a benchmark of Harmonious Industrial Relations, characterized by zero man-day losses due to labor unrest, 100% adherence to evolving Labour Codes, monitored through real-time digital dashboards with the partnering to Deloitte.

GHCLs Human Capital strategy is not merely a support function but a strategic differentiator. By integrating HR Digitalization with a People-First Compassion, we are building a resilient, future-proof organization that delivers long-term value to all stakeholders while championing the United Nations Sustainable Development Goals (SDGs). Going forward, GHCL will continue to strengthen its human capital ecosystem by focusing on Enhancing diversity and inclusion outcomes, scaling digital and future skills capabilities, strengthening leadership pipelines, Deepening employee engagement through data-driven insights, Aligning human capital strategies with ESG and Sustainable Development Goals (SDGs). Through these initiatives, GHCL reaffirms its commitment to nurturing a resilient, inclusive, and high-performing workforce that drives sustainable value creation for all stakeholders.

As of March 31, 2026, GHCL employed 3439 individuals across all categories. For more insights into our people-first initiatives and employee development efforts, refer to the ‘Human Capital section on pages 84 to 103 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 on pages 104 to 114 of this report.