Insecticides India Ltd Management Discussions

GLOBAL ECONOMY OVERVIEW

The global economy began the year on a relatively stable note,
although growth trends varied across regions amid evolving
geopolitical developments, trade policy shifts, and structural
economic challenges. While the year began on a relatively
stable footing, the escalation of conflict in the Middle East
introduced fresh uncertainty, disrupting energy markets,
increasing commodity price volatility, and creating pressure on
global supply chains

The global economy continues to witness uneven growth across
regions. The United States is expected to grow by around 2.2%,
supported by resilient consumption and rising AI adoption, while
the eurozone is projected to expand modestly at nearly 1%,
aided by Germanys investment-led recovery. France continues
to face fiscal pressures, limiting growth to about 0.9%.

In Asia, Chinas growth is projected to moderate to 4.4%,
potentially weighing on regional momentum, while Southeast
Asia presents mixed trends. Amid this backdrop, India continues
to stand out as one of the worlds fastest-growing major
economies, driven by strong domestic demand, structural
reforms, and proactive policy support.

Looking ahead, global GDP growth is projected to remain
broadly stable at 2.9% in 2026, improving marginally to 3.0%
in 2027, supported by technology-led investments, easing trade
tensions, and gradual moderation in inflation. Nevertheless,
geopolitical uncertainties, energy price volatility, and evolving
trade dynamics continue to present risks to the global economic
outlook.

INDIAN ECONOMY OVERVIEW

India reaffirmed its position as the worlds fastest-growing
major economy during FY26, with real GDP growth estimated
to grown by more than 7.6%, supported by resilient domestic
consumption, sustained investment activity, and stable
macroeconomic fundamentals

Domestic demand remained the cornerstone of economic
expansion. Rural consumption strengthened on the back of
favourable agricultural performance and higher farm incomes,
while urban demand improved progressively, supported by

moderating inflation, stable employment conditions, and tax
rationalisation measures that enhanced disposable incomes.
Investment activity also remained robust, with Gross Fixed Capital
Formation estimated at nearly 30% of GDP. Capital expenditure
continued to be driven by government infrastructure spending,
private sector investments, and expanding manufacturing
capacity

The agriculture and allied sectors are estimated to grow by
3.1% in FY26, supported by a favourable monsoon, healthy
crop production and sustained growth in livestock and fisheries.
The industrial sector maintained healthy momentum, with
manufacturing and construction benefiting from strong
domestic demand, public capital expenditure, and infrastructure
development, resulting in estimated growth of approximately
6.2%.

The services sector continued to be the largest contributor
to Indias Gross Value Added (GVA), recording broad-based
expansion across financial services, trade, transport, hospitality,
and digital services, thereby reinforcing the countrys economic
resilience.

Indias medium-term outlook remains favourable, underpinned
by sound macroeconomic fundamentals, continued policy
reforms, strong domestic demand, and rising public and private
investments. According to the Economic Survey 2025-26,
Indias real GDP is projected to grow between 6.8% and 7.2%
in FY27, with long-term growth potential estimated at around
7%, positioning the country among the fastest-growing large
economies globally.

OVERVIEW OF INDIAN AGRICULTURE INDUSTRY

Agriculture continues to be a cornerstone of the Indian
economy, contributing nearly one-fifth of the countrys gross
value added, employing over 46% of the workforce and
supporting the livelihoods of more than half of the population.
The sector remains critical to rural prosperity, food security, and
overall economic resilience.

Over the past few years, Indian agriculture has demonstrated
remarkable resilience, supported by favourable monsoons,
improved farming practices, greater mechanisation, adoption
of modern crop protection technologies, and sustained
government initiatives aimed at enhancing farm productivity. As
a result, agricultural output has continued to strengthen across
major crop categories.

According to the Third Advance Estimates for 2025-26, India
is expected to achieve a record foodgrain production of 376.6
million tonnes, reflecting healthy growth over the previous year.
Production of key crops, including rice, wheat, maize, oilseeds
and sugarcane, is also estimated to reach record or near-record
levels, supported by favourable weather conditions, improved
seed varieties and better agronomic practices.

The rice production at 154.024 million tonnes, compared to
150.184 million tonnes in 2024-25, registering an increase of
3.84 million tonnes. Wheat production is estimated at 120.657
million tonnes, which is 2.712 million tonnes higher than
last years 117.945 million tonnes. Production of Shree Anna
is estimated at 17.584 million tonnes. Maize production has
reached a record 55.093 million tonnes, which is 11.684 million
tonnes higher than last years production of 43.409 million
tonnes.

The Government of India continues to strengthen the sector
through higher investments in agricultural infrastructure,
climate-resilient farming, digital extension services and farmer
outreach programmes. Initiatives such as the Viksit Krishi
Sankalp Abhiyan, coupled with advances in agricultural research
and technology dissemination, are expected to improve farm
productivity, enhance sustainability and accelerate the adoption
of scientific farming practices.

Looking ahead, rising farm mechanisation, increasing
awareness of crop protection solutions, growing emphasis on
productivity enhancement and supportive policy measures are
expected to create long-term growth opportunities for the
Indian agrochemical industry.

Key focus points of the Union Budget 2026-2027

The Union Budget FY26-27 underscores the Governments
continued commitment to strengthening Indias agricultural
ecosystem, with an allocation of 1.30 lakh crore towards the
Department of Agriculture & Farmers Welfare.

According to the Third Advance
Estimates for 2025-26, India is
expected to achieve a record
foodgrain production of 376.6
million tonnes, reflecting healthy
growth over the previous
year. Production of key crops,
including rice, wheat, maize,
oilseeds and sugarcane, is also
estimated to reach record or
near-record levels, supported by
favourable weather conditions,
improved seed varieties and
better agronomic practices.

This is supported by 1.71 lakh crore in fertiliser subsidies to
ensure input affordability, along with 9,967 crore allocated to
agricultural research and education to drive productivity and
technology adoption. Additionally, 19,200 crore has been
earmarked for rural livelihoods under DAY-NRLM, promoting
women-led enterprises and income diversification, alongside
targeted support for pulses, high-value crops, and allied sectors.

Further, key initiatives include 10,000 crore under the SME

Growth Fund and 2,000 crore under the Self-Reliant India Fund
to strengthen MSME-led agri value chains, development of 500
reservoirs to boost fisheries and water infrastructure, and credit
support for livestock and dairy. Investments in horticulture,
plantation crops, digital agriculture, AI-led platforms, and rural
logistics, including waterways and women-led market access
models, are expected to enhance supply chain efficiency,
improve farmer realisations, and drive sustainable, technology-
led, export-oriented growth.

Key growth drivers for the Indian agriculture sector

Technology-led transformation: Adoption of AI-driven decision- support systems such as Bharath- VISTAAR is enhancing farm efficiency across crop planning, forecasting, and nutrient management, driving productivity gains.	Shift to high-value crops: Increasing focus on high-value crops, including coconut, sandalwood, cocoa, and nuts, is enabling better price realisation and improving farmer
Improved infrastructure & logistics: Investments in cold chains, warehousing, and supply chain logistics are reducing post-harvest losses and strengthening farm-to- market linkages.	incomes through crop diversification. Emergence of smart farming: Rapid adoption of AI, IoT, satellite imaging, and blockchain technologies , is accelerating the transition towards data-driven, precision agriculture.
Expansion of allied sectors: Livestock, poultry, and fisheries are witnessing strong growth, supporting income diversification and enhancing rural economic resilience.	Policy support & market access: Continued policy impetus, including higher MSP and expanded digital ? trading through e-NAM, is improving price discovery and widening market access for over 1.8 crore farmers.

OUTLOOK

The Indian agriculture sector entered 2026 at a structural
inflection point, transitioning from a volume-led model to
one driven by value creation, digital integration and export
competitiveness. Growth momentum remains supported by
increased government spending, enhanced credit access and
expanding digital infrastructure, enabling more efficient and
data-driven farming practices. Policy measures such as the
increase in the Kisan Credit Card limit to 5 lakh and the PM
Dhan-Dhaanya Krishi Yojana, targeting 100 low-productivity
districts with irrigation, precision farming and risk mitigation
support, are further strengthening sector fundamentals. The
fruits and vegetables segment continues to be a key growth
driver, projected to expand at a CAGR of 7.42% through 2031,
supported by changing consumption patterns and export
opportunities.

However, structural challenges including climate variability
including monsoon, impact of Al Nino, water scarcity, fragmented
landholdings and inadequate cold-chain infrastructure persist.
Despite these headwinds, the sectors ongoing transition
towards technology-enabled, resource-efficient systems,
supported by rising private investment and FDI inflows, is
expected to drive sustained productivity improvements and
enhance global competitiveness over the long term.

Overview of the Indian agrochemical industry

Indias agrochemical industry continues to emerge as one of
the most attractive segments within the agriculture value chain,
supported by rising food demand, improving farm productivity,
and increasing adoption of modern crop protection solutions.
The industry is estimated at approximately USD 10 billion in
FY26 and is expected to exceed USD 13 billion by 2031, growing
at a CAGR of around 6%.

India has established itself as a global manufacturing hub,
ranking as the fourth-largest producer and third-largest
exporter of agrochemicals, supplying crop protection products
to over 150 countries. Despite this strong manufacturing base,
domestic agrochemical consumption remains significantly
below the global average, indicating substantial headroom
for future growth as awareness, mechanisation and scientific
farming practices continue to improve.

The industry is also witnessing a structural transformation.
Exports contribute nearly half of the sectors revenue, while the
domestic market continues to expand, supported by favourable
agricultural output, higher farmer awareness and increasing
adoption of premium crop protection products. Within the
product portfolio, insecticides remain the largest segment,
while herbicides continue to record the fastest growth, driven
by rising farm labour shortages and increasing mechanisation.

Demand remains concentrated across major crops such as rice,
cotton, wheat, soybean, fruits and vegetables, with leading
agricultural states accounting for the majority of domestic
consumption. As farming practices become increasingly
technology-driven and productivity-focused, the demand
for innovative, sustainable and value-added crop protection
solutions is expected to strengthen further.

Key growth drivers for the Indian agrochemicals sector

I. Increasing demand for food production: Growing
population, changing dietary patterns and shrinking arable
land continue to drive the need for higher agricultural
productivity and efficient crop protection.

II. Technological advancements: Technology is reshaping
Indian agriculture through precision farming, improved
irrigation, and data-driven practices that enhance
productivity and resource efficiency. Supported by
government initiatives and rising agri-tech investments,
the sector is steadily transitioning towards smarter, more
sustainable farming models.

III. Shift towards sustainable solutions: Demand for bio-
pesticides, bio-stimulants and environmentally responsible
crop protection products is accelerating, supported by
favourable regulations and increasing farmer awareness.

IV. Growing collaborations to drive growth: Strategic
partnerships, technology licensing and product innovation
are expanding access to differentiated chemistries, enabling
companies to strengthen product portfolios and enhance
competitiveness.

V. Government support: Continued policy focus on
agricultural productivity, irrigation, rural infrastructure and
farmer education is creating a favourable ecosystem for
long-term industry growth.

Major challenges for the Indian agrochemical
industry

Environmental Sustainability

Rising environmental concerns and increasing emphasis
on sustainable agriculture are encouraging responsible
agrochemical usage and accelerating the transition
towards safer, eco-friendly crop protection solutions.
This requires continuous investment in research, product
stewardship and regulatory compliance.

Regulatory Compliance

The industry operates under a stringent regulatory
framework, with lengthy product registration and
approval timelines that can delay commercialisation of
new molecules and increase compliance costs.

Company overview

Insecticides (India) Limited (IIL) is among Indias leading
agrochemical companies, engaged in the research,
manufacturing, and marketing of a comprehensive range of
crop protection and nutrition solutions. Headquartered in
New Delhi, the Company has, over the past twenty five years,
established a strong pan-India presence, earning the trust of
millions of farmers through consistent innovation, product
excellence, and an unwavering commitment to enhancing
agricultural productivity and farmers prosperity.

IIL offers a diversified portfolio spanning the entire crop
protection spectrum-including Insecticides, Herbicides,

Fungicides, Biologicals, and Plant Growth Regulators (PGRs),
with more than 130+ formulations and 20+ technical products
catering to key crops such as paddy, cotton, maize, chilli,
sugarcane, wheat, soybean, vegetables, and pulses. Its iconic
Tractor Brand, with a legacy of over four decades, remains
one of the most trusted and widely recognised brands in Indian
agriculture, reflecting the Companys enduring relationship with
farming community. Complementing this legacy is IILs growing
portfolio of Maharatna and Focused Maharatna products,
underscoring its strategic emphasis on technology-led,
differentiated, and premium crop solutions.

The Company operates eight state-of-the-art manufacturing
facilities located at Chopanki and Sotanala (upcoming unit)
(Rajasthan), Samba and Udhampur (Jammu & Kashmir), and
Dahej (Gujarat), providing a strong manufacturing backbone
with integrated capabilities across technicals and formulations. Its
innovation engine is powered by a dedicated team of over 100+

scientists, driving research across new technicals, advanced
formulations, process development, and global regulatory data
generation. The Joint Venture R&D Centre with OAT Agrio Co.,
Ltd. Japan further strengthens IILs capabilities in developing
proprietary technologies and next-generation crop protection
solutions. Today, the Company exports to over 22 countries,
while actively pursuing registrations across the United States,
Europe, Japan, and South America to accelerate its international
expansion.

With a revenue of 2,144.14 crore in FY2026 and a well-defined
strategy centred on premiumization, backward integration,
and market expansion, IIL is well positioned to consistently
outperform industry growth. Anchored by strong brands, robust
manufacturing capabilities, a deep distribution network, and
strategic global partnerships, the Company remains committed
to creating long-term value while advancing the future of Indian
agriculture and building a globally competitive agrochemical
enterprise.

Business Strengths and Growth Opportunities
An Iconic Brand Built on Farmer Trust

For over 40 years, the Tractor Brand has stood as one of the
most trusted names in Indian agriculture. Guided by the ethos
of Desh ki Shaan, Kissan ki Pehchan, the brand represents
reliability, consistent product performance, and enduring farmer
confidence. Decades of trust have transformed Tractor Brand
into a powerful intangible asset that continues to differentiate
IIL in an increasingly competitive marketplace.

i Comprehenisve Product Portfolio with a Premiumisation
i Focus

IIL offers one of the industrys broadest portfolios, comprising
of 130+ formulations and 20+ technicals, across insecticides,
herbicides, fungicides, biologicals, and PGRs. The portfolio addresses the full spectrum of crop protection requirements
across major crops and geographies while progressively shifting
towards high-value, technology-driven and differentiated
products. The growing contribution of Maharatna and Focused
Maharatna products reflects the Companys strategic focus on

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premiumisation and value creation.

Innovation-Led Research and Development

Innovation remains at the core of IILs long-term growth

^ strategy. Supported by four dedicated R&D centres, a team

^ of over 100+ scientists, GLP-certified laboratories, NABL-
accredited quality facilities, the Company possesses one of
^l the strongest research platforms in the domestic agrochemical
industry. Its Joint Venture R&D Centre with OAT Agrio Co. Ltd.,
Japan, further enhances capabilities in developing proprietary
technologies and next-generation crop protection solutions,
positioning IIL beyond conventional generic chemistry.

! Global Collaborations

IILs collaborations with Nissan Chemical Corporation (Japan),

Corteva Agriscience, Momentive (USA) and its Joint Venture

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with OAT Agrio Co. Ltd. (Japan), provide access to innovative
and patented crop protection technologies. Successful
launches demonstrate the Companys ability to combine
i global innovation with its strong domestic market presence,
creating differentiated offerings that deliver superior value to
] Indian farmers while strengthening its competitive advantage.

Integrated Manufacturing & Backward Integration

The Companys manufacturing network across Chopanki,
Samba, Udhampur, Dahej and Sotanala (upcoming), provides
operational flexibility, production scalability and supply chain
I resilience. Continued investments in backward integration
have expanded in-house manufacturing of key technicals,
reducing import dependence, improving cost efficiencies,
enhancing quality control and strengthening margin resilience.

Extensive Distribution Network and Deep Farmer
Connect

IILs nationwide distribution platform is supported by an
experienced field force of an extensive channel partner

network, and over 26000+ farmer meetings and 145000+
farmers visits in FY26 alone underpin one of the most intensive
farmer engagement programmes in the industry, ensuring that
IILs products and agronomic advice reach the last mile with
consistency and credibility. This deep rural connect continues
to be one of IILs most significant competitive differentiators.

Digital - Enabled Commercial Excellence

Digital transformation is enhancing productivity across
the Companys value chain. IIL 360 enables real-time sales
planning, inventory visibility and field execution, while IIL
Pariwar strengthens distributor engagement through greater
transparency and responsiveness. IIL GrowSmart, a multilingual
digital learning platform, equips field teams with continuous
product and agronomy training. Together, these initiatives are
building a connected, data-driven commercial ecosystem that
enhances decision-making, improves execution and deepens
farmer engagement.

Strong Financial Foundation

Consistent financial discipline and prudent capital allocation
continue to underpin IILs growth strategy. With revenue
of 2,144.14 crore in FY26, the Company remains well
positioned to invest in innovation, manufacturing expansion,
backward integration and market development while creating
sustainable long-term value for all stakeholders.

Financial review

IIL has developed a diverse product portfolio, with process
expertise to provide complete crop solutions. In the last couple
of years, the Company emphasized on being more agile, while
it remained committed to its long-term sustainable growth
strategies.

	Domestic revenue (as % of total revenue)	Exports revenue (as % of total revenue)
FY26	94.97%	5.03%
FY25	94.82%	5.18%

 

Key financial ratios
Ratios	FY26	FY25	% Change	Reason for change
Trade Receivables Turnover	4.90	5.87	16.52%	-
Inventory Turnover Ratio	1.80	1.62	11.11%	-
Interest Coverage Ratio	12.02	29.3	-58.98%	Increase in borrowing led to decline in the ratio
Current Ratio	1.96	1.83	7.10%	-
Debt-Equity Ratio	0.12	0.1	20.00%	-
Operating Profit Margin (%)	10.33	10.93	-5.49%	-
Net Profit Ratio	6.33	6.98	-9.31%	-
Return on Net worth	11.19	12.92	-13.39%
Return on Capital Employed	14.44	16.55	-12.75%
Analysis of P&L
Particulars	FY26 ( in cro	re)	FY25 ( in crore)	Growth (change in %)
Revenue from operations		2144.14	2002.27	7.09%
COGS		1482.30	1366.36	8.49%
Employee Benefits Expense		159.85	137.16	16.54%
Interest cost		16.51	6.72	145.68%
EBITDA		221.59	218.83	1.26%
PBT		181.98	190.28	-4.37%
PAT		135.82	139.77	-2.82%
EPS (in )		46.68	47.61	-1.95%
Analysis of Balance Sheet
Particulars	FY26 ( in cro	res) (	FY25 in crores)	Growth (change in %)
Total equity		1214.00	1081.79	12.22%
Long-term borrowings		17.98	23.47	-23.38%
Short-term borrowings		120.92	75.52	60.13%
Total non-current assets		553.07	475.91	16.21%
Trade receivables		489.50	385.68	26.92%
Cash and cash equivalents		87.13	55.38	57.32%
Land & Building		136.29	114.23	19.31%

As on March 31st March, 2026, the Companys Equity Capital
stood at 29.09 crores same as of previous year i.e 31st March
2025.

- Total borrowings of IIL as of 31st March, 2026 stood at
138.91 crore vis-a-vis 98.99 crore as on 31st March,
2025.

Risk management

Agrochemicals is an industry where risk is not the exception, it
is the operating environment. At IIL, we have built a structured
risk management framework that does not merely catalogue
risks, but actively works to anticipate, monitor, and mitigate
them, ensuring that our growth momentum is not hostage to
variables beyond our control.

Agri-demand and monsoon variability

Agricultural input demand in India is inextricably linked to
monsoon behaviour, crop prices, and farmer sentiment, all of
which are inherently unpredictable. Our crop protection business
in particular faced headwinds in FY26 from erratic rainfall
patterns and a subdued spraying season in certain geographies.
We address this structural reality through deliberate portfolio
diversification across Insecticides, Herbicides, Fungicides,
Biologicals, and PGRs, covering multiple crops and seasons, so
that no single weather event or crop cycle can materially derail
our overall performance. A balanced mix of products covering
different crops helps IIL cushion against seasonal demand swings.

Raw material and supply chain risks

Global agrochemical supply chains, particularly those with
import dependencies from China, remain susceptible to price

volatility, logistics disruptions, and geopolitical developments.
We are systematically reducing this exposure through backward
integration at the technical manufacturing level, with in-house
production of key technicals. Our newly commissioned Dahej
plant adds further manufacturing depth and flexibility to our
supply chain architecture.

Regulatory and compliance risk

Product approvals, label extensions, and environmental
compliance are non-negotiable requirements in our industry,
and the bar is rising both in India and in our export markets.
We manage this through continuous investment in R&D, a
team of 100+ scientists working across formulation and data
package development, and our Joint Venture R&D Centre with
OAT Agrio Co. Ltd., Japan. Our pipeline of 182+ registrations
across 22+ countries reflects a compliance first approach to
market expansion.

Competitive intensity and pricing pressure

The domestic agrochemical market is competitive, and pricing
pressure, particularly in commodity generic formulations, is a
persistent reality. Our strategic response is premiumisation: we
are actively shifting our revenue mix towards our Maharatna
and Focused Maharatna product portfolios, patented, high-
performance brands that command stronger margins and
deeper farmer loyalty. With 5 new product launches in FY26
and a growing roster of Focused Maharatna products, our
portfolio is progressively less exposed to commodity-grade
pricing dynamics.

Export and geopolitical risk

As we expand our presence across 22+ countries, we are
inevitably exposed to regulatory timelines, bilateral trade
policies, and market-specific compliance requirements that
vary across jurisdictions. We manage this through phased
market entry, working with established in-country partners,
and maintaining a rigorous registration pipeline that diversifies
our export revenue across geographies, ensuring no single
market or regulatory development can disproportionately
impact our export business.

Taken together, our risk management approach is anchored in
four pillars, diversification, backward integration, innovation,
and financial discipline. These are not defensive postures;
they are the structural enablers that allow us to grow with
confidence in an industry that demands both agility and
resilience.

HHHHH

Internal control systems and their adequacy

At IIL, robust internal control systems are in place to ensure
financial integrity and regulatory compliance, aligned with the
Companys evolving scale and operational complexity. These
controls encompass a wide range of policies, procedures,
and statutory requirements, forming a strong foundation for
sustainable growth.

The framework is designed to continuously evaluate and
manage risks across all aspects of the business, including
scientific and R&D-related risks, partner, and stakeholder
interests, as well as commercial and financial exposures.
Comprehensive management reporting systems further
support the oversight of strategy, performance, operations, risk,
funding, and governance. Internal auditors conduct detailed,
year-round audits across all locations and departments, with
their findings reported to a dedicated Committee for timely
review and action.

Human resource and industrial relations

At IIL, people remain at the heart of the Companys growth
and long-term success. Guided by a culture of innovation,
collaboration, and continuous learning, the Company continues
to invest in attracting, developing, and retaining talent across
its operations.

IILs people practices are built around inclusivity, capability
development, and employee well-being. Through leadership
development, succession planning, learning initiatives, and
employee engagement programmes, the Company fosters
an environment where individuals can grow and contribute
meaningfully. A strong focus on workplace safety, open
communication, work-life balance, and competitive rewards
further strengthens a supportive and high-performing culture.

By aligning employee growth with organisational priorities, IIL is
building a future-ready workforce equipped to drive sustained
business excellence. As of March 31, 2026, the Company had
1,749 dedicated employees on its payroll.

Cautionary statement

The statements made in this report describing the Companys
objectives, estimations, expectations, projections, outlooks,
constitute forward-looking statements within the meaning of
applicable securities laws and regulations. Actual results may
differ from such expectations, projections, among others,
whether express or implied. The statements are based on certain
assumptions and future events over which the Company has
no direct control. The Company assumes no responsibility to
publicly amend, modify and revise any of the statements based
on any subsequent developments, information or events.