Hindcon Chemicals Ltd Management Discussions

Global economic review

Overview: Global economic growth declined marginally from 3.3% in 2023 to an estimated 3.2% in 2024. This was marked by a slowdown in global manufacturing, particularly in Europe and parts of Asia coupled with supply chain disruption and weak consumer sentiment. In contrast, the services sector performed more creditably.

The growth in advanced economies remained steady at 1.7% from 2023 to 2024 as the emerging cum developing economies witnessed a growth decline at 4.2% in 2024 (4.4% in 2023).

On the positive side, global inflation was expected to decline from 6.1% in 2023 to 4.5% in 2024 (projected at 3.5% and 3.2% in 2025 and 2026 respectively). This decline was attributed to the declining impact of erstwhile economic shocks, and labour supply improvements. The monetary policies announced by governments the world over helped keep inflation in check as well.

The end of the calendar year was marked by the return of Donald Trump as the new US President. The new US government threatened to impose tariffs on countries exporting to the US unless those countries lowered tariffs for the US to export to their countries. This enhanced global trade and markets uncertainty and emerged as the largest singular uncertainty in 2025.

Regional growth (%)	2024	2023
World output	3.2	3.3
Advanced economies	1.7	1.7
Emerging and developing economies	4.2	4.4

(Source: IMF, KPMG, Press Information Bureau, BBC, India Today)

Performance of the major economies, 2024

United States: Reported GDP growth of 2.8% in 2024 compared to 2.9% in 2023.

China: GDP growth was 5.0% in 2024 compared to 5.2% in 2023.

United Kingdom: GDP growth was 0.8% in 2024 compared to 0.4% in 2023.

Japan: GDP growth was 0.1% in 2024 compared with 1.9% in 2023.

Germany: GDP contracted by 0.2% in 2024 compared to a 0.3% decline in 2023.

(Source: CNBC, China Briefing, ons.gov.uk. Trading Economics, Reuters)

Outlook: The global economy has entered a period of uncertainty following the imposition of tariffs of products imported into the USA and some countries announcing reciprocal tariffs on US exports to their countries. This is likely to stagger global economic growth, the full outcome of which cannot be currently estimated. This risk is supplemented by risks related to conflicts, geopolitical tensions, trade restrictions and climate risks. In view of this, World Bank projected global economic growth at 2.7 per cent for 2025 and 2026, factoring the various economic uncertainties.

(Source: IMF, United Nations)

Indian economic review Overview

The Indian economy grew at 6.5% in FY 2024-25, compared to a revised 9.2% in FY 2023-24. This represented a four-year low due to a moderate slowdown within the Indian economy (marked by slower manufacturing growth and a decline in net investments). Despite the slowdown, India retained its position as the worlds fifth- largest economy.

Indias nominal GDP (at current prices) was H330.68 trillion in FY 2024-25 (H301.23 trillion in FY 2023-24). The nominal GDP per capita increased from H2,15,936 in FY 2023-24 to H2,35,108 in FY 2024-25, reflecting the impact of an economic expansion.

The Indian rupee weakened 2.12% against the US dollar in FY 2024-25, closing at H85.47 on the last trading day of FY25. In March 2025, the rupee recorded the highest monthly appreciation since November 2018, rising 2.39% (arising out a weakening US dollar).

Inflationary pressures eased, with CPI inflation averaging 4.63% in FY 2024-25, driven by moderating food inflation and stable global commodity prices. Retail inflation at 4.6% in FY 2024-25, was the lowest since the pandemic, catalyzing savings creation.

Indias foreign exchange reserves stood at a high of $676 billion as of April 4, 2025. This was the fourth consecutive year when rating upgrades outpaced downgrades on account of strong domestic growth, rural consumption, increased infrastructure investments and low corporate leverage (annualized rating upgrade rate 14.5% exceeded the decade-long average of 11%; downgrade rate was 5.3%, lower than the 10-year average of 6.5%).

Gross foreign direct investment (FDI) into India rose 13.6% to $81 billion during the last financial year, the fastest pace of expansion since 2019-20. The increase in the year was despite a contraction during the fourth quarter of 2024-25 when inflows on a gross basis declined 6% to $17.9 billion due to the uncertainty caused by Donald Trumps election and his assertions around getting investments back into the US.

Growth of the Indian economy

	FY22	FY23	FY24	FY25
Real GDP growth (%)	8.7	7.2	9.2	6.5

E: Estimated

(Source: MoSPI, Financial Express)

Growth of the Indian economy quarter by quarter, FY 2024-25

Real GDP growth (%)	6.5	5.6	6.2	7.4

E: Estimated

(Source: The Hindu, National Statistics Office)

The banking sector continued its improvement, with gross nonperforming assets (NPA) for scheduled commercial banks (SCBs) declining to 2.6% as of September 2024, down from 2.7% in March 2024. The capital-to-risk-weighted assets ratio for SCBs stood at 16.7% as of September 2024, reflecting a strong capital position.

Indias exports of goods and services reached $824.9 billion in FY 2024-25, up from $778 billion in the previous fiscal year. The Red Sea crisis impacted shipping costs, affecting price-sensitive exports. Merchandise exports grew 6% YoY, reaching $374.1 billion.

Indias net GST collections increased 8.6%, totaling H19.56 lakh crore in FY 2024-25. Gross GST collections in FY 2024-25 stood at H22.08 lakh crore, a 9.4% increase YoY.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in FY 2024-25. The industrial sector grew by 6.5%, supported by growth in construction activities, electricity, gas, water supply and other utility services.

Indias services sector grew at 8.9% in FY25 (9.0% in FY24), driven by public administration, defence and other services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in FY25, compared to 8.6% in FY24. Meanwhile, the construction sector expanded at 9.4% in FY25, slowing from 10.4% in the previous year.

Manufacturing activity was subdued in FY25, with growth at 4.5%, which was lower than 12.3% in FY24. Moreover, due to lower public spending in the early part of the year, government final consumption expenditure (GFCE) is anticipated to have slowed to 3.8% in FY25, compared to 8.1% in FY24.

The agriculture sector grew at 4.6% in 2024-25 (1.4% in 2023-24). Trade, hotel, transport, communication and services related to broadcasting segment were estimated to grow at 6.4% in 2024- 25 (6.3% in 2023-24).

From a demand perspective, the private final consumption expenditure (PFCE) exhibited robust growth, achieving 7.2% in FY 2024-25, surpassing the previous financial years rate of 5.6%.

The Nifty 50 and SENSEX recorded their weakest annual performances in FY 25 in two years, rising 5.3% and 7.5% during the year under review respectively. Gold rose 37.7% to a peak of $3,070 per ounce, the highest increase since FY 2007-08, indicating global uncertainties.

Total assets managed by the mutual fund (MF) industry jumped 23% or H12.3 lakh crore in fiscal 2025 to settle at H65.7 lakh crore. At close of FY25, the total number of folios had jumped to nearly 23.5 crore, an all-time peak. During last fiscal, average monthly systematic investment plan (SIP) contribution jumped 45% to H24,113 crore.

Foreign portfolio investments (FPIs) in India experienced high volatility throughout 2024, with total inflows into capital markets reaching approximately $20 billion by year-end. However, there was significant selling pressure in the last quarter, influenced by new tariffs announced by the new US government on most countries (including India).

Outlook

India is expected to remain the fastest-growing major economy. Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tariff levies on India and other countries. The following are some key growth catalysts for India in FY26.

Tariff-based competitiveness: India identified at least 10 sectors such as apparel and clothing accessories, chemicals, plastics and rubber where the US high tariffs give New Delhi a competitive advantage in the American market over other suppliers. While India faced a 10% tariff after the US suspended the 26% additional duties for 90 days, the levy remained at 145% on China, the biggest exporter to the US. Chinas share of apparel imports into the US was 25%, compared with Indias 3.8%, a large opportunity to address differential (Source: Niti Aayog).

Union Budget FY 2024-25: The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasizing agriculture, MSMEs, investment, and exports as the four primary growth engines. With a fiscal deficit target of 4.4% of GDP, the government reinforced fiscal prudence while allocating H11.21 lakh crore for capital expenditure (3.1% of GDP) to drive infrastructure development. The February 2025 Budget marked a shift in approach, with the government proposing substantial personal tax cuts. Effective April 1, 2025, individuals earning up to H12 lakh annually will be fully exempt from income tax. Economists estimate that the resulting H1 lakh crore in tax savings could boost consumption by H3-3.5 lakh crore, potentially increasing the nominal private final consumption Expenditure (PFCE) by 1.5-2% of its current H200 lakh crore.

Free trade agreement: In a post-Balance Sheet development, India and the United Kingdom announced a free trade agreement to boost strategic and economic ties. This could lead to a significant increase in the export competitiveness of Indian shipments in the UK across the textiles, toys, leather, marine products, footwear, and gems & jewellery sectors. About 99% of Indian exports to UK will enjoy zero-duty access tariff cuts; India will cut tariffs on 90% of tariff lines and 85% could become fully duty-free within 10 years.

Pay Commission impact: The 8 th Pay Commissions awards could lead to a significant salary revision for nearly ten million central government employees. Historically, Pay Commissions have granted substantial pay hikes along with generous arrears. For instance, the 7 th Pay Commission more than tripled its monthly salaries, raising the range from H7,000 to H90,000 to H18,000 to H12.5 lakh, triggering a widespread ripple effect.

Monsoons: The India Meteorological Department predicted an above normal monsoon in 2025. This augurs well for the countrys farm sector and a moderated food inflation outlook.

Easing inflation: Indias consumer price index-based retail inflation in March 2025 eased to 3.34 per cent, the lowest since August 2019, raising hopes of further repo rate cuts by the Reserve Bank of India.

Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of FY 2025-26. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26.

Lifting credit restrictions: In November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to 9-13% between September 2023 and 2024. However, under its new leadership, the RBI has prioritized restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks, and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Global construction chemical overview

Construction chemicals are specialized additives used with cement, concrete, and other building materials to enhance the durability and performance of structures. These chemicals improve properties such as compressive strength, workability, and endurance, enabling modern buildings to meet complex engineering demands. Additives help modify characteristics like water reduction, air entrainment, permeability, and setting time, while hardeners prevent water and dust infiltration. Their use ensures better moisture retention, stronger bonding, improved crack resistance, and reduced mortar drying time, ultimately optimizing material efficiency and overall performance.

The residential construction sector is witnessing remarkable expansion, fuelled by rapid urbanization and rising housing needs in developing economies. These demographic changes and urbanization trends are transforming the construction chemicals industry, spurring innovation in products tailored for residential applications, particularly in building construction chemicals.

The Asia-Pacific region holds the largest share of the global construction chemicals market, fuelled by rapid urbanization, robust infrastructure development, and expanding industrial activity across key countries. Government initiatives supporting sustainable construction and rising foreign direct investments further drive market growth. Major economies such as China, India, Japan, and South Korea are experiencing strong demand for construction chemicals across residential, commercial, and infrastructure segments. The market is distinguished by well-established local manufacturing, coupled with a wide-reaching distribution network that serves both developed and emerging economies.

These chemicals, ranging from admixtures and sealants to waterproofing agents and hardeners are designed to improve key properties like workability, setting time, permeability, and compressive strength. Their application results in better moisture retention, stronger bonding, improved crack resistance, and faster drying of mortar, all of which contribute to higher material efficiency and superior structural performance. The construction chemicals market size is estimated at USD 96.27 billion in 2025 and is expected to reach USD 130.52 billion by 2030, growing at a CAGR of 6.28% during the forecast period.

Indian construction chemicals overview

The Indian construction chemicals market has seen significant growth, fuelled by government initiatives, large-scale infrastructure projects, rapid urbanization, and rising residential and commercial construction activity. The increasing focus on smart homes, sustainable building practices, and advanced construction technologies is further driving demand. With major developments such as smart cities, highways, metro rail networks, and real estate expansion, Indias need for innovative and high-performance construction solutions continues to rise.

The residential sector stands as a pivotal contributor to Indias construction chemicals market, driven by the nations status as the worlds most populous country and its rapid urbanization. Projections indicate that by 2030, over 40% of Indias population will reside in urban areas, necessitating approximately 25 million additional affordable housing units.

The market is driven by infrastructure projects, Make in India initiatives, and urbanization, particularly in North and South India. Key products include concrete admixtures, waterproofing chemicals, and adhesives & sealants. Challenges include lack of skilled labour and outdated construction techniques. Government investments and mega projects continue to fuel demand.

These chemicals are essential for enhancing the strength, durability, and environmental performance of modern structures. The market reached USD 4.33 billion in 2024 and is expected to grow from USD 4.48 billion in 2025 to around USD 6.19 billion by 2034, registering a CAGR of 3.63% over the forecast period.

Growth drivers

The construction chemicals market had excellent growth prospects driven by several key factors:

Technological advancements: Technological advancements in construction chemicals, such as the development of high- performance admixtures, advanced waterproofing compounds, and next-generation coatings are playing a key role in driving market growth. These innovations offer enhanced strength, durability, and resistance to environmental factors, helping structures withstand harsh conditions while reducing maintenance needs. They also support faster construction timelines, greater material efficiency, and improved sustainability, making them increasingly essential in modern building and infrastructure projects.

Rapid urbanization and infrastructure development: The demand for construction chemicals in India is rising steadily, driven by major infrastructure initiatives such as smart cities, highways, railways, and affordable housing projects. The government has made substantial investments to support these developments, including H28,602 crore (US$3.41 billion) for building 100 smart cities, H2,87,333 crore (US$34.62 billion) for constructing 200,000 km of national highways by 2025, and H2.65 lakh crore (US$31.93 billion) for railway infrastructure in FY 2025-26. Under the Pradhan Mantri Awaas Yojana-Gramin (PMAY-G), H2.5 lakh crore (US$34 billion) has been allocated for 2 crore affordable homes by 2028-29. These large-scale projects are set to fuel growth in the construction chemicals market, supporting the countrys rapid urbanization and infrastructure transformation.

Government initiatives: Government schemes and policies are key drivers of growth in the construction chemicals market. Affordable housing programs like the Indira Awaas Yojana and large-scale infrastructure initiatives are boosting demand across the sector. At the same time, policies such as the National Chemical Policy, the Chemical Sector Skill Development Council, and Make in India are promoting sustainable development, safety, and environmental compliance while encouraging research and innovation. These measures aim to strengthen the chemical industrys global competitiveness, enhance workforce skills to meet international standards, and attract greater foreign direct investment (FDI).

Booming construction industry: Indias construction industry is witnessing robust growth, with a projected compound annual growth rate (CAGR) of around 6% between 2025 and 2030. This expansion is closely linked to the countrys increasing emphasis on sustainability. According to the Indian Green Building Council (IGBC), more than 15,800 green building projects, covering over 13.56 billion square feet, have been registered across India. This rising adoption of green construction practices is fuelling demand for eco-friendly construction chemicals, which are expected to form an increasingly significant share of the market by 2030.

Rising disposable incomes: Rising disposable incomes in India are contributing to greater construction activity and increasing demand for high-performance construction chemicals. As household incomes continue to grow, the appetite for quality infrastructure and housing is rising. Complementing this trend, government construction spending has reached H11.11 trillion (USD 132.9 billion) in FY 2024-25, further boosting the sectors growth prospects.

Reduction of GST: A key proposal aims to reduce the GST on high- tax building materials like cement, wallpaper, varnish, and paints, which are currently taxed at 28%. Cost is a crucial factor impacting both the construction industry and end consumers, making tax reductions essential for fostering growth. Lowering GST on these materials would make construction projects more affordable, benefiting developers and ultimately reducing costs for consumers.

(Source: Aditya Birla Capital, Invest India, Business Standard, Press Information Bureau, Economic Times, The Hindu, Mordor Intelligence)

The India commercial real estate market

A key trend shaping the Indian commercial real estate market is the growing emphasis on technology and innovation. Developers are increasingly integrating smart technologies such as energy- efficient sensors, advanced security systems, and high-speed communication infrastructure into commercial buildings to meet the rising demand for smart spaces from both domestic and global firms. Another notable trend is the rise of mixed-use developments, where office spaces are combined with retail, residential, and recreational facilities. This integrated approach fosters vibrant, selfsustaining ecosystems and supports a better work-life balance, helping companies attract and retain top talent.

Customers in the Indian commercial real estate market are increasingly seeking modern, well-designed office spaces equipped with a wide range of amenities. There is a strong focus on sustainability and energy efficiency, alongside the need for excellent connectivity and proximity to key transportation hubs. Additionally, demand for flexible office solutions and co-working spaces is on the rise, driven by the growth of the gig economy and the expanding startup ecosystem in the country.

Indias commercial real estate market is witnessing substantial growth, driven by strong economic expansion, rising foreign investments, and a resurgence in business activity following the pandemic. As a prominent player in the Asia-Pacific region, India is seeing a sharp increase in demand for office spaces across major urban centres. This growth is further supported by the rising preference for modern, well-connected workspaces and the evolution of work dynamics. Reflecting its vast potential, the market is projected to reach a value of US $6.56 trillion by 2025 and continue its upward trajectory with a CAGR of 2.47% between 2025 and 2029, ultimately reaching US $7.23 trillion by 2029.

(Source: Statista)

Indian real estate housing sector

The residential real estate market is segmented by property size into categories: less than 50 sq. m, 51 to 80 sq. m, 81 to 110 sq. m, 111 to 200 sq. m, and more than 200 sq. m. Among these, the 81 to 110 sq. m segment dominates due to its widespread appeal. This size range provides a balance between ample living space and affordability, making it particularly attractive to firsttime homebuyers and families. Its versatility caters to diverse lifestyle needs, accommodating both single individuals and larger households. Developers favor this segment for its efficiency in land utilization, enabling the construction of housing projects that appeal to a broad demographic. The growing demand for 81 to 110 sq. m residences highlights the markets preference for practical and adaptable living spaces.

Indias residential real estate market showcased strength despite prevailing challenges, with home sales reaching approximately H5.68 lakh crore, marking a 16% year-on-year growth in value compared to the previous year. Sales volume saw a marginal decline of 2%, with around 4.60 lakh units sold, down from 4.77 lakh units in FY23. New project launches dropped by 7% to about 4.13 lakh units in 2024, largely due to delays in approvals during the election period. The surge in residential prices across major cities also played a role in tempering overall sales momentum.

Indias top nine cities witnessed a substantial 33% rise in home deliveries, reaching 4,06,889 units. This surge was largely driven by the completion of housing projects launched in 2018 and 2019, which had faced delays due to the pandemic. Government initiatives like the SWAMIH Fund also played a crucial role in accelerating project completion. While eight of the nine cities recorded delivery growth ranging from 22% to 88%, with Kolkata leading at 88% and Mumbai growing the least at 22%, Delhi-NCR was the only region to experience a decline, with an 8% drop. Western India (Mumbai, Navi Mumbai, Thane, Pune) dominated the completions, contributing 55% of the total, followed by Southern India (Bengaluru, Chennai, Hyderabad) with a 30% share, and Kolkata with 4%. Delhi-NCRs share fell to 11% in FY25 from 16% in the previous year.

(Source: Straits Research, Anarock, Economic Times)

Government initiatives

Government initiatives: It had marked significant progress where under Pradhan Mantri Awas Yojana Urban, 1.18 crore houses have been sanctioned, 1.14 crore grounded, and over 89 lakh completed. Pradhan Mantri Awas Yojana Urban 2.0, launched in September 2024, approved 6 lakh new houses. The SWAMIH Fund delivered 50,000 homes, with 40,000 more expected in 2025. A new H15,000 crore SWAMIH Fund 2.0 aims to support another 1 lakh homes in stalled projects.

Real Estate Regulation and Development Act (RERA) 2016:

RERA is aimed at enhancing transparency, accountability, and efficiency in the real estate sector. It requires developers to register their projects before advertising or selling, ensuring timely delivery and protecting buyers interests.

FDI in Real Estate: The Indian government had opened up avenues for Foreign Direct Investment (FDI) in real estate, particularly in commercial and affordable housing projects. Institutional investments inflows into Indian real estate touched $6.5 billion in 2024, marking a substantial 22% increase from the previous years $ 5.4 billion, marking an annual high for both domestic and foreign investments since 2020.

GST on Real Estate: The introduction of Goods and Services Tax (GST) had simplified tax structures, although the real estate sector had seen varying rates, with affordable housing attracting a lower tax rate. The government continues to review GST rates to ensure it does not overly burden homebuyers.

Smart Cities Mission: The Smart Cities Mission aims to transform 100 cities across India through advanced infrastructure, efficient urban planning, and sustainable development. It emphasizes the integration of technology to enhance public services and improve urban living conditions, including real estate. By the end of FY 2024-25, more than 93% of the 8,000+ planned projects has been completed, with nearly 99.44% of the total H48,000 crore budget already disbursed by the Government of India. The initiative continues to focus on integrating technology, sustainable development, and efficient urban planning to enhance public services and real estate infrastructure across 100 targeted cities.

National Urban Housing Fund (NUHF): The National Urban Housing Fund, launched under the Pradhan Mantri Awas Yojana, is designed to offer financial support for the development of affordable housing in urban areas. It facilitates the construction of homes for economically weaker sections, including low-income families and migrant populations.

(Source: Times of India, Business Standard, Press Information Bureau)

SWOT analysis Strengths

Large market: India had attained the status of being the sixth- largest chemical producer, and third largest in Asia, contributing 7% to Indias GDP The sector is currently valued at US$ 220 billion and is expected to reach US$ 300 billion by 2030.

Technical advancement: AI and machine learning are transforming the chemical industry by analyzing large datasets to optimize processes, predict outcomes, and accelerate R&D through chemical reaction simulations—reducing time to market. IoT devices provide real-time data from sensors and equipment, enabling remote monitoring, early detection of inefficiencies, and data-driven decisions that enhance productivity and safety.

Government support: Programs like Make in India and Aatmanirbhar Bharat Abhiyan have significantly strengthened Indias chemical industry by promoting domestic manufacturing, reducing import dependence, and attracting investments. These initiatives support the development of self-reliant supply chains and indigenous production of key chemicals. The government also plans to roll out a production-linked incentive (PLI) scheme offering 10-20% output incentives for the agrochemical sector, aiming to boost cluster development and build a robust end-to-end manufacturing ecosystem, with projections indicating substantial growth in exports and value addition over the next few years.

Weaknesses

International policies: Escalating global trade tensions and tighter environmental compliance norms have created uncertainties. Global trade tensions and stricter environmental norms are impacting Indias chemical industry. The U.S.-China trade war has pushed producers to target non-U.S. markets, increasing competition and pressuring margins.

Unorganised market: The pandemic, preceded by demonetisation and the introduction of GST, had led to setbacks for small and marginal players, resulting in the consolidation of large players in the market.

R&D investment: The Indian research and development sector is underfunded due to high costs. Domestic manufacturers struggle to afford the cost of bringing new chemical products to the market, hindering growth.

Opportunities

Lucrative segment: The Indian chemical sector is set for rapid growth, with speciality chemicals expected to be the most lucrative segment. India attracts investment as companies diversify away from China. The chemical industry revenue had grown at an average rate of 15% in the last five years.

Increasing demand: As the world strives to decrease GHG emissions and meet sustainability goals, expected the increase of demand for a range of new chemical products.

Government initiatives: The government had set up a 2034 vision to propel the growth of the chemicals and petrochemicals sector. Several initiatives have been taken to promote the growth of the specialty chemicals industry, including tax incentives, subsidies, and simplified regulations.

Innovation and collaboration: Collaboration and innovation can help Indian companies stay competitive in the global market by enhancing their product offerings. Public-private partnerships and collaborations between industry players can spur innovation and research.

Threats

Availability of raw materials: The availability and price of raw materials significantly impact the profitability and competitiveness of the Indian specialty chemicals industry. The industrys reliance on imports makes it vulnerable to global price fluctuations and supply disruptions.

Environmental regulations: The industry is subject to stringent environmental regulations that can increase the cost of compliance and limit its operational expansion ability.

Infrastructure limitations: The Indian chemical industry faces significant infrastructure limitations, including limited access to electricity, water, and transportation, impacting production efficiency, supply chain management, and business costs.

Cost competitiveness: The Indian chemical industry faces stiff competition from other low-cost producers, particularly China. This competition pressures the industry to reduce costs and increase efficiency, posing a significant challenge.

(Source: Mint, IBEF, Press Information Bureau, Global Chemical News, Wright Research)

Risk management

Economic risks: Domestic economic challenges such as inflation, liquidity issues, sluggish industrial growth, currency depreciation, political instability, and rising commodity prices pose considerable threats to overall performance.

Mitigation: Hindcon addresses these issues through backward integration strategies aimed at securing supply chains, stabilizing costs, and reducing external dependencies. These measures help the company maintain operational efficiency under economic pressure.

Demand risk: Growth in the infrastructure sector drives demand for construction chemicals; however, any slowdown or disruption in this sector could impact product demand.

Mitigation: The company counters this risk by investing in innovation and developing versatile products with applications across multiple industries, thereby reducing reliance on any one sector.

Competition risk: Intensifying market competition could result in narrower profit margins.

Mitigation: Hindcon is expanding its geographic reach and acquiring new B2B clients while fostering long-term relationships, which currently contribute to over 93% of its revenue. The company also diversifies its product offerings to meet evolving customer needs.

Quality risk: Compromised product quality could damage both revenue and reputation.

Mitigation: The company ensures consistent product quality through rigorous compliance with evolving regulations. Its ISO 9001:2015 certification highlight its adherence to high-quality standards and robust management systems.

Environmental risk: Non-compliance with environmental norms, especially regarding eco-friendly products, could present significant challenges.

Mitigation: As a member of the Indian Green Building Council, Hindcon remains committed to sustainable practices by prioritizing the development of environmentally responsible products that meet strict ecological standards.

Portfolio risk: Heavy dependence on sodium silicate poses a threat to overall operations and profitability if demand declines.

Mitigation: Hindcon manages this risk with a well-diversified product portfolio that includes concrete and mortar admixtures, flooring solutions, waterproofing coatings, and adhesives, reducing reliance on any single product category.

Financial review

Revenues: Revenues during the year under review were 58.55 cr. as compared to 63.42 cr. during FY2023-24.

Profit after tax: The Company registered a profit after tax of 3.96 cr. during FY 2024-25 compared to 6.38 cr. during FY2023-24, which was 37.93% lower than the previous financial year.

Internal control systems and their adequacy

Our organizations internal control and risk management framework is aligned with the principles and guidelines set forth in our corporate governance code. It is seamlessly integrated into the overall structure of both the Company and the Group, with coordinated contributions from personnel across various levels and functions. The Board of Directors provides strategic direction and oversight, offering guidance to the Executive Directors and management while supporting key committees. The Control and Risk Committee, in collaboration with the head of the audit department, operates under the supervision of the Statutory Auditors appointed by the Board.

Human resources

Hindcon credits its sustained success to the strength of its dedicated and motivated workforce. The company ensures a positive and engaging work environment by offering competitive compensation packages and recognizing employee contributions through a comprehensive rewards and recognition framework. It actively fosters a culture of continuous learning and development, encouraging employees to participate in voluntary and crossfunctional projects that broaden their skill sets and enhance career growth. Hindcon also emphasizes inclusivity, collaboration, and open communication, which together help build a cohesive and high-performing team. As of March 31, 2025, the company employed a total of 124 individuals across its operations.

Cautionary statement

The statements made in this section reflect the Companys objectives, projections, expectations, and estimates, which may be considered forward-looking statements under applicable securities laws and regulations. These forward-looking statements are based on certain assumptions and expectations regarding future events. However, the Company cannot guarantee the accuracy or realization of these assumptions and expectations. Actual outcomes may differ significantly from those expressed or implied in these statements due to external factors beyond the Companys control. The Company assumes no obligation to publicly update, amend, or revise any forward-looking statements in light of new developments.