IVP Ltd Management Discussions

Global Economy

The global economy in 2026 continues to show resilience amid persistent uncertainty. According to the International Monetary Fund (IMF), global GDP growth is projected at approximately 3.0% to 3.1% in 2026, broadly in line with 2025 levels but below the historical average, reflecting a period of moderate expansion.

Inflationary pressures, although easing gradually, remain a key concern. Global headline inflation is expected to decline from around 4.1% in 2025 to about 3.8% in 2026, supported by tighter monetary policy and improving supply conditions. Intermittent geopolitical disruptions, particularly in energy markets, continue to add volatility to input costs across industrial value chains.

Global trade and investment activity remain influenced by tariff dynamics, geopolitical developments and the realignment of supply chains. Technology-led investment, particularly in digital infrastructure and automation, is supporting growth, while trade fragmentation continues to weigh on cross-border flows.

Against this backdrop, industrial sectors worldwide continue to operate in a mixed environment marked by moderate demand, pricing pressures and volatility in raw material and energy costs. Businesses are placing greater emphasis on operational efciency, supply chain resilience and value-added offerings to sustain margins and competitiveness.

Overall, the global economic outlook remains stable, with steady though uneven growth. Resilience is supported by easing inflation continued and investment activity, but the outlook remains subject to downside risks from geopolitical developments, evolving trade dynamics and potential disruptions in energy markets, which may add to input cost pressures and uncertainty across industries.

Indian Economy

India continues to be one of the fastest-growing major economies in the world, supported by strong macroeconomic fundamentals and resilience amid ongoing global uncertainty.

The IMF projects Indias GDP growth at around 6.4% in FY26 and on a similar trajectory in FY27, well ahead of global averages and reinforcing the countrys position as a key driver of global growth. Economic momentum has been led by robust domestic consumption, sustained public infrastructure spending and a resilient services sector, supported by continued policy measures and structural reform. Government initiatives such as the Production Linked Incentive (PLI) schemes, Make in India and infrastructure-led capital expenditure continue to strengthen the manufacturing ecosystem, improve competitiveness and attract both domestic and foreign investment. From an industry perspective, the domestic environment offers structural tailwinds, including rising urbanization, increasing disposable incomes and expanding end-use industries such as infrastructure, automotive, footwear, packaging and consumer goods. Global supply chain realignment and the China+1 strategy are also enhancing Indias appeal as a manufacturing and sourcing hub, supporting long-term demand across industrial value chains. Certain headwinds persist. Ongoing geopolitical tensions, particularly in West Asia, have introduced volatility into global energy markets and affected crude oil and feedstock prices, creating intermittent pressure on input costs, logistics and inflation expectations. India has managed inflation relatively well compared with global peers, yet energy-linked cost fluctuations and supply chain disruptions remain key risks for industrial sectors and may affect cost structures and margins.

Macroeconomic stability remains a core strength, with moderate inflation, healthy foreign exchange reserves and a stable financial system providing a buffer against external shocks. The Reserve Bank of

India continues to maintain a calibrated policy stance that balances inflation control with growth support, ensuring liquidity and financial stability in the system. Looking ahead, Indias economic outlook remains favourable, supported by continued policy impetus, infrastructure development, rising consumption and industrial expansion. External uncertainty and energy price volatility may create near-term challenges, but the structural growth story remains intact. These factors position India as a critical global growth engine, offering significant opportunities across industrial sectors aligned with long-term consumption and manufacturing trends.

Company Overview

IVP Limited, established in 1929, has evolved from its origins in the foundry chemicals sector to become a leading player in Indias industrial chemicals landscape. Initially part of the Tata Group and now under the Allana Group, the Company has built a record of innovation and diversi cation. A landmark development was the 1965 collaboration with Ashland

Inc., which made IVP the first Indian company to manufacture foundry chemicals and positioned it at the forefront of solutions for both ferrous and non-ferrous foundries.

The Companys portfolio expanded further in 2018 with the introduction of polyurethane (PU) chemicals, serving fast-growing end-use markets such as footwear and flexible packaging. Over the years, IVP has strengthened its presence beyond its legacy foundry chemicals business, emerging as a leading provider of PU solutions for the footwear market and establishing a growing footprint in adhesive applications.

Today, the Company operates state-of-the-art manufacturing facilities at Tarapur and Bengaluru, with a combined annual capacity of approximately 50,000 metric tonnes, serving a diverse range of industries including foundry, footwear, composites, insulation and packaging.

This evolution reflects the Companys focused approach to diversi cation, reducing dependence on any single segment and building a more resilient and sustainable business model. By participating across multiple end-use industries, IVP is better placed to capture growth opportunities and manage cyclical risk, while creating synergies across product lines through shared capabilities and customer relationships.

The diversi ed portfolio enhances stability and provides a competitive advantage within individual segments, enabling the Company to capitalise on sector-specific tailwinds and deliver integrated solutions to customers. As a result, IVP today stands as a well-diversi ed chemical manufacturer with a balanced presence across traditional and emerging growth segments, rather than a business defined by any single product category.

Supported by a diversi ed product portfolio, strong manufacturing capabilities and a commitment to operational excellence, IVP is well-positioned to deliver high-performance solutions aligned with evolving customer requirements, respond to changing market conditions and capitalise on emerging opportunities across multiple end-use sectors. This integrated approach reinforces the Companys ability to deliver sustainable growth while maintaining resilience in a fast-evolving business environment.

Industry Structure and Developments

Foundry Chemicals

The foundry industry continues to face a challenging environment given its cyclical dependence on the automotive, infrastructure and engineering sectors, with a significant share of the industry comprising MSMEs that remain more vulnerable to demand and cost fluctuations. Demand trends remain uneven, and commoditisation in standard products continues to pressure margins. Rising competition from low-cost players further intensi es pricing pressure, particularly for smaller and unorganised units. Volatility in raw material and energy costs affects pro tability and limits pricing flexibility, while increasingly stringent environmental regulation is driving the need for higher investment in sustainable and compliant technologies, an added challenge for MSME players with limited capital.

Against this backdrop, IVP maintains a strong and established position in the foundry chemicals market, backed by a legacy of more than six decades and deep-rooted relationships with leading foundries across the country. The Companys strength lies in its ability to offer reliable, high-quality products supported by strong technical service and application expertise, helping customers improve casting quality, productivity and process consistency.

Footwear Chemicals

(Polyurethane Systems)

Indias PU systems market for footwear continues to record steady growth, driven by rising urbanisation, increasing incomes and shifting consumer preferences towards comfort and durability. The market is benefiting from strong demand in the sports, casual and athleisure categories, where PU offers clear advantages in weight and performance. The industry structure remains fragmented, with MSMEs dominating the mass and semi-organised segments, leading to high price sensitivity and cost-driven decision-making. Organised players are driving premiumisation and the wider adoption of high-performance, standardised PU systems. Demand fundamentals remain strong, though the sector faces near-term challenges from raw material volatility, supply chain disruptions and margin pressure. The medium to long-term outlook remains positive, supported by the formalisation of the footwear industry, growing penetration of branded products and increasing preference for quality, sustainable materials. As the broader industry continues to face raw material price volatility, supply chain disruptions and cost pressure in the mass market, IVP remains focused on moving up the value chain, reducing exposure to commoditised products and improving margin resilience. Through its emphasis on innovation and customer-centric product offerings, IVP is well-placed to capitalise on emerging opportunities in the footwear segment while reinforcing its standing as a trusted, leading PU solutions provider in the Indian market.

Adhesives for Flexible Packaging

The flexible packaging adhesives continues to see steady growth, supported by rising demand from the food, FMCG, pharmaceuticals and e-commerce sectors. Increasing preference for packaged and convenience products remains a key demand driver. The industry is evolving with a stronger focus on product safety, performance and regulatory compliance, particularly in critical applications. Polyurethane-based adhesives remain the preferred choice given their bond strength, versatility and reliability across substrates, and this shift towards high-performance solutions is expected to sustain long-term growth and drive wider adoption of advanced adhesive technologies. IVP is well-positioned in this evolving landscape, with a strong portfolio of polyurethane-based adhesive systems tailored to the performance and regulatory requirements of the flexible packaging industry.

The Companys focus on consistent product quality, application support and customer-specific solutions enables it to serve diverse converter requirements while aligning with evolving industry standards on safety, ef ciency and sustainability.

Together with its focused approach, this continues to drive growth in the adhesives portfolio.

Financial Performance

During FY26, the Company maintained its strategic focus on pro table and sustainable growth, reflected in a strong improvement across key financial metrics. Gross revenue from operations increased to 59,455 Lakhs, compared with 53,885 Lakhs in the previous financial year, representing healthy growth driven by improved operational ef ciency and stronger market demand.

Earnings before interest, depreciation and tax (EBITDA) stood at 3,852 Lakhs, a significant increase from 2,878 Lakhs in the preceding year. The improvement reflects the Companys continued emphasis on cost optimisation and operational leverage.

Pro t before tax (PBT) rose to 2,514 Lakhs from stronger 1,526Lakhsinthepreviousyear,reflecting operating performance. Pro t after tax (PAT) increased to 1,868 Lakhs, compared with 1,131 Lakhs in the prior year, demonstrating the Companys ability to translate operational gains into bottom-line growth.

Strategies for the Future

The Companys strategic priorities for FY27 and beyond include:

Expansion into value-added products to improve margins.

Strengthening its presence in high-growth markets such as flexible packaging and advanced PU systems.

Enhancing capacity utilization and operational ef ciency.

Continued focus on import substitution and localisation.

Leveraging digital transformation through SAP S/4HANA to enable real-time analytics, improved planning and operational agility.

Opportunities, Threats, Risks and Concerns

Opportunities

- Strong domestic demand across the footwear, packaging and industrial sectors.

Export potential in neighbouring countries for adhesive products.

- Scope to further increase domestic market share.

Threats

- Intensifying competition from domestic and international players.

- Raw material price volatility and supply disruptions.

- Technological changes affecting product demand.

Risks

- Geopolitical uncertainty affecting commodity prices and supply chains.

- Regulatory risk relating to environmental and safety compliance.

Foreign exchange fluctuations.

- Operational risk, including plant disruptions.

Concerns

- Continued margin pressure in commodity markets.

- Need for continuous innovation and product differentiation.

- Increasing focus on sustainability and compliance requirements.

Internal Financial Control Systems

The Company maintains a robust internal control system designed to ensure accurate financial reporting, operational ef ciency and regulatory compliance. A comprehensive, risk-based internal audit framework, carried out in partnership with the external audit rm M/s. Aneja Associates,

Chartered Accountants, provides regular evaluation of internal control processes across operational, financial and compliance domains. During the year, the effectiveness of internal financial controls, including those embedded within SAP, was assessed by the external audit rm. Based on their recommendations for continuous improvement, the Company further strengthened its control environment by optimising SAP functionalities.

Key Financial Ratios as on March 31, 2026

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to give details of significant changes, of 25% or more compared with the previous financial year, in key sector-specific financial ratios. The Company has identified the following as key financial ratios.

Particulars	FY26	FY25
Debtors Turnover (days)	113	120
Inventory Turnover (days)	61	67
Current Ratio (x)	1.47	1.32
Interest Coverage Ratio (x) *	4.41	2.96
Debt-Equity Ratio (x) **	0.42	0.75
Operating Pro t Margin (%) *	5.47	4.28
Net Pro t Margin (%) *	3.14	2.10

* In the current financial year, the Company achieved an increase in revenues and pro tability compared with the previous financial year.

** In the current financial year, the Company generated positive cash flows from in operating activities, whichledto areduction borrowing.

Research and Development

Research and development remains integral to the Companys strategic agenda, underpinning its pursuit of sustainable growth in line with evolving market dynamics. The dedicated R&D team focuses on delivering efficient, customer-centric solutions through continuous product innovation and process optimisation. Cost-ef ciency initiatives, including targeted import substitution, are actively pursued to enhance competitiveness. The development of new product grades remains a priority, enabling IVP to maintain its market edge and broaden its portfolio to address changing customer requirements.

Human Resources

IVP is committed to fostering a high-performing, motivated workforce. During FY26, the Company maintained its emphasis on employee development through engagement initiatives in order to support morale and a positive organizational culture. Core

HR strategies continued to focus on talent retention, succession planning and performance-driven reward systems. As at March 31, 2026, IVP had a total of 202 permanent staff. Industrial relations remained harmonious throughout the year.

Health, Safety and Environment

IVP remains committed to providing a safe and sustainable working environment. The Companys facilities at Tarapur and Bengaluru continue to operate under an Integrated Management System

(IMS) certified for ISO 9001:2015 (Quality), ISO 14001:2015

(Environment) and ISO 45001:2018 (Occupational

Health and Safety). All three certi cations were successfully maintained following surveillance audits by an external certi cation agency during FY26.

The year saw further advances in process automation and digital safety monitoring, which reduced manual intervention and improved incident tracking. Regular safety audits, mock drills and refresher training reinforced the Companys culture of zero harm. In line with its sustainability objectives, IVP continued to focus on reducing effluent discharge, lowering energy consumption and promoting water reuse. The Company remains fully compliant with all applicable safety and environmental regulations and is committed to the ongoing improvement of its EHS performance.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be regarded as forward-looking statements within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied. Key factors that could influence the Companys operations include economic conditions affecting demand and supply, price trends in domestic and international markets, and changes in government regulations, tax laws and other statutory provisions.