Indo Amines Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

GLOBAL ECONOMIC REVIEW

The global economy in FY 2024-25 recorded moderate growth amid persistent geopolitical tensions, inflationary pressures, and uneven sectoral performance. According to IMF estimates, global GDP expanded by 3.2%, with advanced economies showing relative resilience while emerging markets delivered mixed outcomes.

The United States grew by 2.8%, supported by strong consumer spending and a robust labour market, though momentum slowed toward the year-end. The Euro Area registered modest growth of 1.0%, led by services, while manufacturing-heavy economies such as Germany and Austria remained under pressure. Chinas expansion softened as weak consumption, subdued investment, and real estate challenges weighed on activity, while Japan slowed due to supply-side disruptions and weak external demand.

Global inflation eased significantly from 2022 peaks, reflecting tighter monetary policies and improved supply chains, though services inflation stayed elevated due to wage growth. Trade activity remained constrained by disruptions in key shipping routes and rising protectionism, while commodity markets—especially energy and food—remained volatile. Overall, FY 2024-25 was a year of cautious stabilization, with output recovering but still trailing pre-pandemic trends.

Looking ahead to FY 2025-26, global GDP growth is projected to ease slightly to 3.0%, reflecting structural headwinds and policy uncertainty. The U.S. is forecast to decelerate to 1.9% growth, and the Euro Area to remain near 1.0%, as consumption and exports moderate. China is projected to expand by 4.8%, though property sector fragility and demographic pressures persist, while Japan is likely to remain subdued due to aging demographics and weak investment.

Inflation is expected to decline further, bringing headline rates closer to central bank targets in many regions and enabling gradual monetary easing. Flowever, global trade growth will likely remain below historical averages amid tariff frictions and supply chain realignments. Fiscal expansion in select economies may provide support, but high debt and tighter financing conditions limit fiscal space. Risks remain tilted to the downside, particularly from geopolitical instability, climate-related disruptions, and fragmented trade policies. Nonetheless, FY 2025-26 presents opportunities for recalibration, with resilience, innovation, and inclusive growth likely to distinguish outperforming economies.

INDIAN ECONOMIC REVIEW

India emerged as the fastest-growing major economy in FY 2024-25, recording 6.5% real GDP growth despite a fragile global environment. Strong domestic demand, rising private investment, high public infrastructure spending, and robust services and manufacturing activity drove this momentum.

Inflation eased sharply, with CPI falling to 2.82% in May 2025—the lowest since 2019—supported by stable food prices and favorable supply conditions. On the external front, total exports reached a record USD 824.9 billion, comprising USD 387.5 billion in services and USD 374.1 billion in merchandise. This reflected rising competitiveness in high-value manufacturing and digital services.

Foreign Direct Investment inflows rose to USD 81.04 billion, while foreign exchange reserves climbed to USD 697.9 billion, covering over 11 months of imports and bolstering external resilience. The current account deficit was contained at 0.6% of GDP. Domestically, capital markets remained buoyant, with record IPO activity and strong retail investor participation, underscoring investor confidence.

Looking ahead to FY 2025-26, the Reserve Bank of India projects GDP growth to remain steady at 6.5%, broadly aligned with UN and industry forecasts. Inflation is expected to stay within the RBIs 4% medium-term target, with food prices stable and global commodity risks contained. Strong domestic consumption, sustained public investment, and expanding private sector capacity are likely to preserve momentum. With solid macroeconomic fundamentals and supportive policies, India is well-positioned to consolidate its growth leadership and strengthen its role as a key global growth driver.

GLOBAL CHEMICAL INDUSTRY

The global chemical industry in FY 2024-25 posted modest growth, with market value reaching USD 6.18 trillion and projected to rise to USD 6.32 trillion by early FY 2025, reflecting a subdued CAGR of 2.3%. Performance was shaped by post-pandemic adjustments, inflationary pressures, and uneven regional demand.

Advanced economies, especially in Europe and North America, stagnated due to weak industrial activity, high energy costs, and cautious consumer spending. China, accounting for nearly half of global output, slowed to 6.8% growth amid overcapacity and weaker exports. Emerging Asia, led by India at 4.5%, showed moderate expansion.

Sectorally, Specialty chemicals outperformed, supported by electronics, automotive, and personal care, while bulk and petrochemicals faced margin compression from volatile feedstock costs and supply chain issues. Sustainability and digitalization remained central, with rising investment in green chemistry, bio-based materials, and Al-enabled process optimization.

For FY 2025-26, growth is expected to improve to around 3.0%, driven by gradual industrial recovery and sustainable technology integration. Chinas output is forecast to expand by 4.2%, while the U.S. may grow 1.5% on the back of food processing and consumer care demand. Europe could contract slightly, constrained by energy disadvantages and weak construction, whereas Japan may stabilize with support from automotive and electronics. Latin America and South Asia are expected to post moderate gains, with India and Brazil attracting investments in Specialty and agrochemicals.

Strategic priorities include portfolio rationalization, regional diversification, and disciplined capital allocation. Sustainability will remain a defining growth lever as regulatory mandates and consumer preferences accelerate the transition to circular and low-carbon models.

INDIAN CHEMICAL REVIEW

Indias chemical sector delivered strong growth in FY 2024-25, with valuation rising to USD 250 billion and projected to reach USD 300 billion by early FY 2025. Contributing nearly 7% to GDP, India remained the worlds sixth-largest chemical producer.

Specialty chemicals spearheaded the expansion with 11-12% CAGR, led by pharmaceuticals, agrochemicals, electronics, and personal care. Exports of chemicals and allied products reached USD 108.6 billion, aided by China+1 supply chain diversification and global demand for Indian formulations. However, elevated feedstock costs, logistics inefficiencies, and competition from low- cost Chinese imports squeezed margins.

Policy support was visible through higher budget allocations, PCPIR infrastructure investments, and targeted incentives for MSMEs and R&D. Challenges persisted around fragmented clusters, regulatory delays, and low R&D intensity, but import substitution and capacity expansion provided resilience.

Sustainability and innovation gained traction, with investments in bio-based feedstocks, waste-to- chemicals, and digital process automation. The governments push toward green chemistry and circular economy initiatives—such as EPR norms and carbon capture incentives—created new opportunities. Collaborations with global majors further positioned India as a preferred innovation hub.

Looking to FY 2025-26, the industry is poised for accelerated growth, with Specialty chemicals expected to surpass USD 64 billion and Indias global share rising to 6% by FY 2026. Agrochemicals and construction-linked chemicals will benefit from rural spending, infrastructure rollout, and favourable monsoons. The Union Budgets Rs.1.61 lakh crore allocation to the Ministry of Chemicals & Fertilizers and Rs.20,000 crore for private R&D signal strong backing.

Persistent challenges include feedstock dependency, inverted duty structures, and skill shortages, but reforms in trade and capacity-building could unlock greater value creation. Indias ambition of a USD 1 trillion chemical economy by 2040 remains credible, provided execution and innovation stay on track.

INDUSTRY STRUCTURE AND DEVELOPMENT

The company is a global manufacturers and suppliers of Fine & Specialty chemicals. The Company is one of the leading players in the industry which has a balanced portfolio of technical along with backward integration for some products. Availability of technically trained manpower, seasonal domestic demand and production capacities for generics built to cater to overseas markets are the other reasons for strong exports. The Company is a leading manufacturer of Specialty Chemicals with diversified end uses into Agrochemicals, Pharmaceuticals, High Performance Polymers, Paints, Pigments, Printing Inks, Rubber Chemicals, Additives, Surfactants, Dyes, Flavors & Fragrances, Home & Personal Care applications, etc.

The Company makes continuous efforts to explore and innovate new products & processes in all segments. This diversified end-user base helps the Company to reduce its risk from downturn in any individual business segment and to capitalize on the growth opportunities in each of the end-user segments. The Company had upgraded its various manufacturing units into Zero Liquid Discharge Units (ZLD) and has put in place various processes to control/limit generation of effluents and improve the treatment of the same. As part of the Risk Management policy, the relevant parameters for all manufacturing sites are analyzed to minimize risk associated with protection of environment, safety of operations and health of people at work and monitored regularly with reference to statutory regulations and guidelines defined by the Company.

The Company fulfils its legal requirements concerning emission, wastewater and waste disposal. Improving workplace safety continued to be top priority at all manufacturing sites.

For more details, please refer to our website www.indoaminesltd.com

No	Particulars	F.Y34-25	F.Y33-24	Change	% Change
1	Revenue from operations (net)	105,657.51	92,497.70	13,159.81	1433%
2	EBIDTA	11,845.83	9,448.99	2,396.84	2537%
3	Profit before Tax	8,185.79	5,951.76	2,234.02	3734%
4	Profit after tax	6,138.72	4,448.05	1390.67	38.01%
5	Net worth	31,520.85	25,735.62	5,78533	22.48%
6	Debt	28,015.14	21,200.03	6315.11	32.15%
7	Trade Receivables	27,596.49	22,236.27	536032	24.11%
8	Inventory	11,918.91	9,91136	230734	2035%
9	Debt Equity Ratio	0.89	032	036	7.84%
10	Current Ratio	1.28	1.3	(0.02)	-1.50%
11	Receivables Turnover Ratio	3.83	4.16	(033)	-7.96%
12	Inventory Turnover Ratio	9.68	8.68	1	1132%
13	EBIDTA Margin (%)	11.21%	10.22%	0.01	9.75%
14	PBT Margin (%)	7.75%	6.43%	0.01	20.41%
15	PAT Margin (%)	5.81%	4.81%	0.01	20.82%
16	Interest Coverage Ratio	5.91	4.73	1.18	24.95%
17	Net Profit Margin	0.06	0.05	0.01	20.00%

FINE & Specialty CHEMICAL INDUSTRY

The global fine and Specialty chemical industry recorded steady expansion in FY 2024-25 despite headwinds, with Specialty chemicals valued at USD 641.5 billion. Demand was strong in high-value segments including automotive coatings, electronics, agrochemicals, and personal care. Fine chemicals, worth USD 210.7 billion, benefited from sustained pharmaceutical and biotech momentum.

Profitability was uneven: Europe and North America faced margin pressures from energy inflation and regulatory costs, while Asia-Pacific, especially China and Southeast Asia, retained production advantages. Industry players pursued consolidation, portfolio optimization, and greater investment in sustainability—ranging from bio-based materials to carbon capture—and digitalization through Al-driven process control.

Indias fine and Specialty chemicals outperformed global peers, with the sector valued at USD 62.8 billion, accounting for 22% of national chemical output. Growth was fuelled by domestic demand, export substitution, and global shifts toward Indian sourcing in agrochemicals, dyes, pharma intermediates, and construction chemicals. Government support via PCPIRs, budgetary allocations, and proposed PLI schemes bolstered competitiveness. Exports grew at double-digit rates despite global tariff pressures.

Looking forward, the global industry is projected to grow at a 5.2-6.4% CAGR in FY 2025-26, led by pharmaceuticals, electronics, and green chemistry. Rising demand for high-purity inputs for semiconductors, EV batteries, and Al-driven applications will reinforce expansion. Indias sector is forecast to grow 11-12%, surpassing USD 64 billion, underpinned by new capacity, policy support, and international credibility.

Agrochemical diversification, increased API output, and eco-friendly formulations will be key drivers, alongside investments in digital infrastructure, skills, and trade agreements. With its cost advantage, policy momentum, and growing innovation ecosystem, India is on track to establish itself as a leading global hub for fine and Specialty chemicals over the next decade.

OPPORTUNITIES

Indo Amines Limited is well-positioned to leverage Indias status as the fastest-growing major economy, with GDP projected to expand at 6.5% in FY 2025-26. Strong domestic demand, infrastructure investments, and expanding manufacturing activity create a supportive environment for the companys growth. Globally, the Specialty and fine chemical sector is set to expand at 5-6% CAGR, led by high-value applications in pharmaceuticals, agrochemicals, electronics, and green chemistry. With its diversified product portfolio and expertise in amines, IAL is strategically placed to capture this rising demand.

The ongoing China+1 supply chain diversification further enhances export prospects, as global customers seek reliable sourcing alternatives outside China. India has emerged as a preferred hub for Specialty and fine chemicals, and lALs growing global presence positions it well to benefit from this structural shift. In addition, strong domestic demand from pharmaceuticals and agrochemicals —sectors where lALs intermediates have wide applications—will remain a key growth engine.

Innovation and sustainability are becoming central themes in the chemical industry, and lALs focus on process optimization, green chemistry, and R&D investments offers significant potential to move up the value chain. Moreover, government initiatives such as PCPIR development, budgetary support for the chemical sector, proposed PLI schemes, and incentives for R&D provide a policy tailwind. These measures are expected to enhance competitiveness, attract global collaborations, and support long-term expansion.

THREATS

Despite these opportunities, Indo Amines Limited faces several challenges. Volatility in crude oil prices and petrochemical-based raw materials can significantly impact production costs and profit margins. Global economic conditions also remain uncertain, with growth projected to ease to around 3.0% in FY 2025-26 and structural weaknesses in Europe likely to keep industrial demand subdued. This could weigh on export momentum in certain product categories.

Supply chain disruptions remain a critical risk, as geopolitical tensions, shipping route bottlenecks, and protectionist trade measures continue to cause volatility in global logistics. Competition from large-scale Chinese producers and other low-cost manufacturing hubs also presents a challenge, particularly in terms of pricing pressure in export markets.

Environmental and regulatory pressures are intensifying, both globally and domestically. Stricter norms on emissions, effluents, and waste management may increase compliance costs and necessitate additional capital expenditure. Furthermore, the industry is undergoing rapid technological transformation, with greater reliance on automation, digitalization, and advanced manufacturing techniques. A shortage of skilled manpower or delays in adopting new technologies could limit lALs ability to capture high-value opportunities and sustain its competitive edge.

INTERNAL CONTROL SYSTEMS

The Company has comprehensive internal control systems commensurate with the nature, size, and complexity of its operations. These systems provide reasonable assurance regarding the effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. The controls are a blend of modern and traditional processes, which are periodically tested and upgraded for both design and operational effectiveness by the Management and audited by the Statutory Auditors.

The Company also has a dedicated in-house Internal Audit department comprising professionals from finance, data analytics, and engineering disciplines, supported by reputed audit firms specializing in internal audits and assurance. An annual internal audit plan, reviewed and approved by the Audit Committee at the beginning of each financial year, ensures adequate coverage. Significant audit observations, action plans, and progress reports are periodically reviewed by the Management and on a quarterly basis by the Audit Committee. These measures collectively help identify areas requiring strengthening, embed best practices, and enhance governance across the Company and its subsidiaries, joint ventures, and associates.

RESEARCH AND DEVELOPMENT (R&D)

Over the years, the Company has consistently invested in research and innovation, establishing a DSIR-approved in-house R&D unit. The R&D team, comprising experienced scientists, focuses on product innovation, process improvements, quality enhancement, safety, and environmental protection. This capability has enabled the launch of several new products while ensuring better production efficiencies. Going forward, the Company remains committed to investing in technology development aimed at expanding its product portfolio, improving cost competitiveness, and reducing its climate footprint.

HUMAN RESOURCES

Employees are regarded as the most valuable assets of the Company. Human Resource initiatives emphasize empowerment, open communication, productivity improvement, and employee wellbeing. Safety, wellness, and career growth remain priorities, supported by structured training and recognition programs. Employees are encouraged to take ownership in business operations and strategy execution, with recognition and rewards aligned to contributions toward performance goals.

As on March 31, 2025, the Company had 599 employees on its rolls as compared to 557 employees as of March 31, 2024. The Board acknowledges the sincere and dedicated efforts of all employees and expresses gratitude for their commitment.

SAFETY, HEALTH & ENVIRONMENT (SHE)

Safety is integral to all business operations. At each site, designated personnel ensure compliance with safety standards, while periodic seminars and internal/external audits are conducted to identify risks and implement improvements. All safety equipment is maintained in operational condition, and no major accidents were reported during the year.

Environmental sustainability is also central to operations. With a vision to become climate neutral by 2050, the Company has implemented initiatives such as zero-discharge plants, water risk assessments, renewable energy adoption, and energy efficiency projects. Key measures include:

• Use of agro-mass briquettes to generate ~95% of steam requirements.

• VFD installation for pumps and blowers.

• Efficiency improvements in cooling systems.

• Use of transparent roof sheets, solar tubes, and turbo ventilators for energy savings.

• Transition to LPG from furnace oil for cleaner energy.

Emissions, effluents, and waste across all sites remain within prescribed limits of the State Pollution Control Boards.

POLLUTION CONTROL MEASURES

Indo Amines Limited remains deeply committed to environmental stewardship and sustainable operations. The Company has embedded sustainability into its core business practices, with a vision of achieving climate neutrality by 2050. To this end, ambitious environmental targets have been set, supported by measurable milestones and periodic reviews. All operating sites undergo regular assessments of environmental aspects and impacts, with robust control measures implemented to mitigate potential risks. Compliance with State Pollution Control Board norms is stringently monitored, ensuring operations remain well within prescribed emission, effluent, and waste management standards.

The Company has placed special emphasis on sustainable water management, conducting annual water risk assessments to identify sites in high-water-stress regions and implementing site-specific mitigation measures. Additionally, several initiatives in clean technology, renewable energy, and energy efficiency have been rolled out across facilities. These include the use of agro-mass briquettes for over 95% of steam requirements, installation of Variable Frequency Drives (VFDs) on pumps and blowers, optimization of cooling water systems, and deployment of natural lighting solutions such as transparent roof sheets and solar tubes. The Company has also adopted energy- efficient equipment, turbo ventilators for heat extraction, and transitioned from furnace oil to LPG to reduce emissions. Collectively, these measures are driving significant improvements in resource efficiency while reinforcing Indo Amines commitment to sustainability and environmental protection.

RISKS & CONCERNS

Business inherently involves risk, and Indo Amines Limited adopts a structured and proactive approach to identifying, assessing, and mitigating risks that may impact its operations and growth. The Company believes in taking calculated risks with a focus on long-term value creation, while leveraging strong governance, compliance frameworks, and operational resilience to minimize potential disruptions. The Audit Committee and senior management periodically review the risk landscape to ensure timely response and alignment with strategic objectives.

1) Environmental & Climate Risks:

Climate change, stricter environmental regulations, and increasing stakeholder expectations around sustainability pose significant challenges. Risks include effluent discharge, hazardous waste management, emissions, and resource scarcity, all of which can directly affect operations and compliance.

Mitigation: Indo Amines has consistently invested in eco-friendly technologies, including Zero Liquid Discharge facilities, renewable energy adoption, and biomass-based fuel usage. Continuous monitoring, adherence to State Pollution Control Board norms, and sustainability-focused initiatives ensure that operations remain compliant while advancing towards the Companys long-term goal of climate neutrality by 2050.

2) Regulatory & Policy Risks:

The chemical sector is highly regulated, with frequent changes in government policies, trade frameworks, and compliance standards. New regulations, such as stricter environmental norms, product safety standards, or changes in taxation, can impact decision-making and cost structures.

Mitigation: The Company maintains strict compliance with national and global standards and conducts periodic audits to ensure adherence. A structured corporate insurance program and regular risk assessments provide additional safeguards. Employee training on anti-trust, competition law, and compliance further strengthens governance.

3) Supply Chain & Raw Material Risks:

Dependence on petrochemical-based raw materials exposes the Company to price volatility and supply disruptions caused by geopolitical tensions, freight constraints, or natural disasters.

Mitigation: Indo Amines mitigates these risks through diversified sourcing strategies, strong supplier relationships, and ongoing efforts to improve backward integration. Digital solutions and process optimization also help enhance supply chain visibility and reduce dependence on single markets.

4) Financial & Market Risks:

The Company operates in a globally competitive market where fluctuations in foreign exchange, interest rates, commodity prices, and credit availability can impact profitability. Market competition from low-cost producers further adds to margin pressures.

Mitigation: A robust financial risk management framework, including hedging strategies, liquidity management, and prudent capital allocation, is in place. The Companys diversified product portfolio, presence across multiple geographies, and longstanding customer relationships also provide resilience.

5) Operational & Technology Risks:

Any disruption in critical manufacturing processes, IT systems, or plant safety protocols could impact operations. Cybersecurity threats and technological obsolescence also remain key risks.

Mitigation: The Company has invested in modern manufacturing technologies, safety systems, and IT infrastructure with centralized monitoring, data backup, and disaster recovery systems. Employee safety and training remain top priorities, reinforced by regular audits and compliance checks.

CORPORATE SOCIAL RESPONSIBILITIES

The Corporate Social Responsibility Committee was constituted as per Section 135 of the Companies Act, 2013 ("the Act") read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The average profit of the Company for last three years is Rs. 4830.82 Lakhs. Prescribed CSR expenditure is Rs 96.65 Lakhs. Details of CSR spent during the financial year 2024-25 are as per Annexure V enclosed. The Corporate Social Responsibility (CSR) policy of the Company has been posted on website of the Company.

OUTLOOK

The Company has established a leading position in domestic market and a presence in international market with a reputation for reliable service and quality products. For the financial year 2024-25, the overall growth scenario is expected to remain robust, although significant challenges persist in the global market. Our focus will continue sustainable growth by taking measures for increasing our market share of existing products and introducing new products. Increased competition from global and domestic players, are putting pressure on sales prices. With the growing demand for Companys products, the capacity of sites in Maharashtra is being enhanced. During the financial year 2024-25, we expect our investments in various other projects which will in turn add to both, top-line and bottom-line. We will continue with our efforts for improving our bottom-line by expanding our product-range, while re-looking at business strategies and models, wherever necessary. We will continue our efforts for improving efficiencies and margins.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the objectives, projections, estimates and expectations of the Company, its direct and indirect subsidiaries and its associates, may beforward looking statementswithin the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand/supply, price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.