Kemistar Corporation Ltd Management Discussions

ECONOMIC REVIEW

Global Economy

The global economy expanded by 3.4% in CY2025, compared to 3.3% in CY2024. This growth is supported by resilient private consumption, continued investments in technology and digital infrastructure and improving capital expenditure across select sectors. On the other hand, the year saw considerable headwinds in the form of escalating trade and tariff-related conflicts among major economies of the world.

Nevertheless, the global economy continued to gain gradual momentum, aided by front-loaded trade activity, particularly in manufacturing and logistics, alongside sustained investments in artificial intelligence, semiconductors and energy transition projects across North America and parts of Asia. Global trade activity remained supported by technology-related exports and resilient demand for digital infrastructure, while increasing regional trade integration and supply chain diversification partially offset trade-related uncertainties.

Private consumption remained relatively stable across major economies, supported by easing labour market pressures and improving income levels, although elevated borrowing costs continued to adversely impact discretionary spending in certain regions. Governments and Central Banks across major economies continued to support economic activity through targeted fiscal measures, infrastructure spending and calibrated monetary easing. Meanwhile, headline inflation rose to 4.1% in CY2025, reflecting persistent supply-side pressures and geopolitical disruptions, although inflationary trends moderated compared to peak levels seen in prior years.

The global environment continues to grapple with risks emanating from geopolitical developments. In particular, tensions in West Asia have increased risks to critical energy supply routes, including through the Strait of Hormuz, contributing to uncertainty in global energy markets. This has contributed to volatility in oil prices, with a consequential impact on fuel costs, logistics and industrial output across economies.

Outlook

Risks to growth remain tilted to the downside, stemming primarily from potential escalations in trade tensions and a deterioration in financial sentiment. Global growth is expected to moderate at 3.1% in CY 2026 then marginally improving to 3.2% in CY 2027. Over the longer term, this reflects the impact of easing inventory cycles, trade-related pressures and softer consumption trends across major economies. Global headline inflation is projected to touch 4.4% in CY 2026 before easing to 3.7% in CY 2027, with upward adjustments made to forecasts for both years2. The uptick in projections is due to the rapidly changing geopolitical developments that particularly impact energy markets and supply chains, resulting in temporary cost pressures and supply-side disruptions.

Going forward, supportive policy measures, diversification of trade partnerships and continued investment in emerging technologies are expected to support economic activity. In addition, improving digital infrastructure, greater private sector participation in investment and ongoing efforts to enhance energy security are expected to contribute to medium-term growth prospects.

Policymakers will also need to balance inflation management with growth objectives while maintaining fiscal sustainability amid evolving global uncertainties. At the same time, improved trade integration, structural reforms and stronger investment-led expansion across emerging markets will play a crucial role in the long run.

In addition to these structural growth drivers, sustainability-led investments are increasingly shaping long-term economic priorities across regions.

Indian Economy

Despite global headwinds, India continued its strong economic momentum in FY 2026, supported by stable macroeconomic fundamentals, sustained policy support and broad-based positive performance of both the manufacturing sector and the services sector. The countrys GDP growth is estimated at 7.7% up from 7.1% in FY 2025, with GDP per capita reaching USD 3,0003. Resilient rural consumption, robust industrial and agricultural output, along with PLI programmes and continued investment in public infrastructure and services have underpinned this growth.

Headline inflation remained controlled, as reflected in the latest CPI data of 3.40% on the revised 2024 base, which made the RBI to maintain the repo rate at 5.25%, following a series of cuts in FY 2026 aimed at boosting growth. The rate was reduced by a cumulative 125 basis points through the year to support economic expansion while keeping inflation within target and support real income growth and consumption across both urban and rural markets.

Further, government-led initiatives in infrastructure, including airport modernisation, regional connectivity and tourism development, continue to strengthen the broader mobility ecosystem.

Recent developments, including the India-EU Free Trade Agreement and ongoing trade discussions with the US are strengthening Indias inclusion into global value chains. These initiatives are expected to promote exports, facilitate technology transfer and support long-term growth. In parallel, India has responded prudently by diversifying its crude import sources and strengthening alternative supply channels to safeguard its energy security and national interests.

Outlook

Supported by strong government capital spending and a notable increase in private consumption, India is projected to remain one of the fastest-growing major economies, with real GDP growth for FY 2026-27 expected in the range of 6.6%5. The inflation outlook remains moderate, supported by favourable supply-side conditions, GST rationalisation, structural reforms, updated and new free trade agreements as well as strategic initiatives to boost the business environment.

Despite global trade and geopolitical uncertainties, the RBI retains flexibility to maintain a supportive monetary stance as inflation remains manageable on the revised base. In an increasingly fragmented global financial environment, Indias strong regulatory framework, institutional resilience and growing reliance on domestic financial channels provide stability. Fiscal consolidation has progressed alongside sustained capital expenditure and the financial system remains well-capitalised, supporting credit expansion and financial inclusion.

Industry Overview

The chemical and recycling company industry is experiencing significant growth, driven by the increasing demand for sustainable material solutions and the need to manage plastic waste efficiently. The global chemical recycling market is projected to grow from USD 1129.21 million in 2025 to USD 18599.63 million by 2034, with a CAGR of 36.52% during the forecast period. This growth is supported by advancements in conversion technologies and corporate sustainability commitments. The United States plays a pivotal role in this market due to its strong industrial capacity and regulatory focus on sustainability. In India, the chemical recycling market is also on the rise, with a market size valued at USD 0.89 billion in 2025 and estimated to grow from USD 0.97 billion in 2026 to reach USD 1.45 billion by 2031, at a CAGR of 8.44%. This growth is influenced by tighter Extended Producer Responsibility (EPR) mandates and rising demand for recycled content from various industries. The industry is evolving rapidly as sustainability imperatives reshape material production and waste management strategies. One of the most significant trends is the increasing focus on plastic-to-plastic recycling, where waste plastics are chemically converted into virgin-quality polymers. Another key trend is the integration of chemical recycling facilities with petrochemical plants, enabling the seamless upgrading of recycled feedstocks into fuels, monomers, and polymers.

The Indian recycling market is expected to grow rapidly post-2026 due to regulatory pressure and rising plastic waste volumes. The market potential is immense, with projections of 450 million tonnes of waste by 2045. Initiatives like the Swachh Bharat Mission and EPR are creating a tailwind for any waste recycling company in India that can provide end-to-end processing and documented compliance.

COMPANY OVERVIEW

The Company operates across Colors, Intermediates, Agro Chemicals and Specialty Chemicals, with business networks extending across international markets, including African countries, Turkey, the United States, Mexico, Bangladesh and Colombia.

K.P. International Private Limited is a wholly owned subsidiary of Kemistar Corporation Limited. The Company operates across diversified business areas including dyes and chemicals, intermediates, inorganic chemicals, agro chemicals and recycling. Its manufacturing presence in India includes facilities located at Dahej and Ahmedabad and has been established since 2000.

During the year, the Company continued to develop its recycling initiatives, including Solar Panel Recycling, E-Waste Recycling and Metal Recycling.

[Image: Photographs of industrial equipment — Air Pollution Control Device, machinery units, and related recycling equipment]

KP International Private Limited, with its established presence in the chemical industry, operates across the manufacture, import, export and trading of chemicals, dyes, pigments, pesticides, intermediates and specialty chemicals. The Company also has capabilities in renewable-sector chemicals and serves both domestic and international markets. Its manufacturing facility at GIDC Dahej, District Bharuch, Gujarat, supports its participation in the growing chemical value chain.

K.P. International Private Limited operates an e-waste management and recycling facility at Dahej, Gujarat. The business is focused on responsible handling, segregation, refurbishment, dismantling, recycling and reuse of electronic and electrical waste, with the objective of reducing the environmental impact associated with discarded equipment.

The Company aims to convert discarded electronic waste into socially and industrially useful secondary raw materials, including metals, plastics and glass, through cost-efficient and environmentally responsible processes suited to Indian conditions.

The increasing use of electronic devices is driving a corresponding rise in e-waste generation, making responsible management and recycling increasingly important. The Companys recycling capabilities are designed to support efficient disposal, recovery and recycling of discarded electronic items while maintaining appropriate environmental and operational standards.

The Companys service portfolio includes e-waste recycling and metal-recovery solutions, supported by a dedicated facility and skilled personnel. The focus remains on recovering reusable resources while ensuring that recycling activities are conducted in an environmentally responsible manner.

E-Waste Recycling Market Potential

Indian e-waste recycling market size: USD 1.66 billion in 2023, as stated in the source material. Estimated Indian market size: USD 5.2 billion by 2032, as stated in the source material. Estimated CAGR: approximately 13-14% during 2024-2032. Global e-waste recycling market size: USD 57.8 billion in 2022, as stated in the source material. Estimated global market size: USD 245 billion by 2032, as stated in the source material. Estimated global CAGR: approximately 15-17% during 2023-2032. EPR requirements are expected to increase formal recycling and recovery of e-waste.

Asset Management Certificates and compliance documentation Data Destruction Extended Producer Responsibility (EPR) support Logistics and safe transportation support, where applicable WEEE Recycling E-Waste Recycling PC Refurbishment for Rural Areas and NGOs On-site Hard Disk Shredding / Scraping Data Wiping

SOLAR RECYCLING PLANT

[Image: Solar panel recycling plant equipment]

The Company is developing its solar-panel recycling capabilities to participate in the growing circular-economy opportunity created by increasing solar installations, technology changes and the future retirement of photovoltaic modules. Solar-panel recycling can facilitate recovery of materials such as aluminium, glass, silicon and other components, while reducing the volume of end-of-life modules entering waste streams.

Solar Panel Recycling Potential

Estimated global solar-panel recycling market size: USD 360 million in 2023, with the source material projecting growth to approximately USD 1.7 billion by 2028. Estimated CAGR for 2023-2028: 38.8%, as stated in the source material. Changing solar technologies are expected to generate increasing volumes of end-of-life panels. Potential recovered materials include aluminium, EVA and silicon-cell waste.

[Image: Metal recycling — motors and equipment]

The Companys metal-recycling initiatives are aligned with the increasing demand for resource recovery, secondary raw materials and circular-economy solutions. Metal recycling can reduce dependence on primary resources, conserve energy and support more sustainable industrial supply chains.

Li-ion Battery Recycling Opportunity

Global Li-ion battery recycling market size in 2022: approximately USD 6-9 billion. Estimated global market size by 2031: approximately USD 25-35 billion. Estimated CAGR during 2024-2031: approximately 18-20%. Global recycling capacity is projected in the source material to increase from approximately 5 GWh in 2022 to 130 GWh by 2030. Indian Li-ion battery recycling market is projected in the source material to reach approximately USD 1 billion by 2030 from approximately USD 0.1 billion in 2022. Government support, including potential PLI-related incentives, may provide additional momentum to the recycling ecosystem. EPR requirements are expected to support formal recycling of battery waste.

FINANCIAL PERFORMANCE

Revenue of the Company is from 1891.50 Lakhs to 2702.25 Lakhs. Profit After Tax is from 60.11 Lakhs to 55.81 Lakhs during the year. (In Lakhs)

	Year to date (2025-26)	Year to date (2024-25)	YoY %
Revenue	2702.25	1891.50	42.86
EBITDA	127.95	131.31	(2.56)
PAT	55.81	60.11	(7.15)
EPS	0.52	0.56	(7.14)

The company has already started e-waste recycling, metal recycling and solar panel recycling along with chemical business since financial year 2025-2026 followed by 2026-2027 in continuation your company has progressed significant for Q1-2026-2027 and the performance are stated as below.

QUARTERLY PERFORMANCE (Q1-2026-2027)

[Image: Quarterly Performance Trend Consolidated (Rs. in Lakhs) — Bar charts showing Revenue from Operations, EBITDA, PAT for Q1 2026-27 vs Q1 2025-26]

Particulars	Quarter ended on 30.06.26	Quarter ended on 30.06.25	% YoY
Revenue	1001.91	285.35	251
EBITDA	80.96	26.80	202
PAT	25.14	11.16	125

Key Financial Ratios

The Key financial ratios for Standalone financials are as per the below table:

Particulars	FY 2025-26	FY 2024-25
Debtors Turnover Ratio	76.11	4.15
Inventory Turnover Ratio	29.15	50.43
Interest Coverage Ratio (with Interest)	9.53	6.55
Interest Coverage Ratio	0.37	0.54
Current Ratio	9.54	14.43
Debt Equity Ratio	0.03	0.02
Net Profit Margin (%)	4.53	3.73
Return on Capital Employed (%)	0.01	0.01

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

Net worth of the company as on 31.03.2026 was Rs. 1580.48 lacs whereas on 31.03.2025 figure was Rs. 1573.86 lacs, Change in net worth is due to increase in profitability of the Company in comparison to previous year.

Risks and Opportunities

Key Business Risks

Higher energy costs, including increases in coal and fuel prices, remain a significant risk to business performance. Other risks include pricing pressure arising from capacity additions, elevated inflation, recessionary conditions in global and domestic markets, demand slowdowns, currency movements and changes in export or import conditions.

Excessive rainfall can result in dilution of brine and affect captive solar-salt availability, increasing the requirement to procure salt and thereby raising production costs. Changes in monsoon patterns may also influence agrochemical demand. Carbon-emissions taxation and related regulatory requirements may increase production costs and require further investment in mitigation measures.

Risk Mitigation

The Company continues to focus on cost optimisation, including management of variable costs such as fuel, raw-material security and continuous improvement programmes. Measures include diversification of energy sources, improving sourcing flexibility, optimising the fuel mix, increasing the use of alternative energy sources, adopting appropriate contracting strategies and using commodity hedging or advance price-fixing mechanisms where considered appropriate.

The Company also continues to focus on execution of expansion projects, compliance with increasingly stringent environmental requirements, packaging improvements and enhancement of safety performance. At the corporate level, the Company is developing a broader carbon-abatement strategy to address emerging climate-related cost and regulatory risks.

Business Opportunities

Improved ease of doing business and customer partnerships focused on innovation and sustainability provide opportunities for stronger customer engagement. The Company intends to continue increasing the contribution of value-added products and strengthening sustainable supply-chain practices, including bulk-material initiatives where appropriate.

Digitalisation of manufacturing facilities and simplification of processes for customers and internal stakeholders are expected to remain important priorities. Plant and supply-chain automation initiatives, together with customer relationship management systems, are being implemented to improve efficiency, visibility and service quality.

Opportunities in Lead Recycling

Growing demand for batteries, electric vehicles and energy-storage systems is expected to support the long-term growth of the lead-recycling market. Lead can be recycled repeatedly without a material loss of quality, supporting increased use of secondary lead as an alternative to primary production.

Recycling lead from used batteries improves resource utilisation, reduces greenhouse-gas emissions and conserves natural resources. It also reduces the quantity of toxic waste requiring treatment and lowers dependence on newly mined lead materials.

Opportunities in E-Waste

Recycling and recovery: Efficient recycling processes can recover valuable materials from e-waste, reducing dependence on virgin raw materials and lowering environmental impact. Extended Producer Responsibility: EPR encourages producers to take responsibility for products across their lifecycle and promotes sustainable design and responsible end-of-life management. Circular economy: Reuse, refurbishment and recycling can extend product life, minimise waste and maximise resource efficiency. Material innovation: Research into environmentally preferable materials and electronic components can help reduce the environmental impact of future e-waste.

Challenges in Lead Recycling

Labour availability and supply-chain constraints can affect smaller recycling operators and may increase operating complexity. At the same time, rapid growth in the global metal-recycling industry is accompanied by greater competition and a growing need for digitalisation and process optimisation.

Challenges in E-Waste Management

Only a limited proportion of global electronic waste is formally managed and recycled, while e-waste remains one of the fastest-growing waste streams. Rapid technological change and shorter product life cycles are contributing to increasing volumes of discarded electronic equipment. Although the E-Waste (Management) Rules were introduced in India, implementation and enforcement challenges continue to affect the sector. A significant portion of e-waste is still handled by informal operators, where health, safety and environmental standards may be inconsistent. Formal recycling infrastructure also needs to expand to keep pace with the countrys increasing e-waste generation.

Challenges and Barriers to Solar Panel Recycling

Diverse materials: Solar panels contain aluminium, steel, glass, silicon and other materials that require different recovery and recycling techniques. Hazardous components: Certain solar-panel products may contain substances such as lead and cadmium; improper handling can create health and environmental risks. Lack of awareness: Limited awareness among businesses and consumers can slow adoption of solar-panel recycling and reduce the availability of end-of-life modules. Technological limitations: Efficient separation and recovery of glass, aluminium, silicon and other components can require specialised equipment, technology and technical expertise.

HUMAN RESOURCE DEVELOPMENT

Employees remain among the Companys most valuable resources. The Company seeks to maintain a balanced, safe and performance-oriented work environment in which operational discipline and employee development progress together. Quality, efficiency and customer satisfaction remain key priorities across the organisation.

The Company continues to recognise the importance of employee capability, teamwork and consistent execution in supporting sustainable business performance.

INTERNAL CONTROL SYSTEM:

Your Company remains committed to improve the effectiveness of internal control systems for business processes with regard to its operations, financial reporting and compliance with applicable laws and regulations. Your Company has adequate internal controls in place designed and developed to:

a) Safeguard its assets from unauthorised use or losses
b) Conduct its business operations efficiently in line with companys policies
c) Maintain accuracy, completeness & reliability of the Financial and accounting records
d) Compliance on laws and regulations
e) Detect and prevent any fraud the frauds in the accounting & reporting system The Company monitors the efficacy and functioning of its internal financial controls through periodic internal audits and multiple authority levels for expenditures and budgetary controls.

Cautionary Statement

Certain statements contained in the Management Discussion and Analysis may be statements of the Companys beliefs, plans and expectations about the future and other forward-looking statements that are based on managements current expectations or beliefs as well as a number of assumptions about the Companys operations and factors beyond the Companys control or third party sources and involve known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Forward-looking statements contained in the Management Discussion and Analysis regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. There is no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Annual Report.

Place: Ahmedabad Date: 24th August, 2026

For and on behalf of the Company

Registered Office: 604, Manas Complex, Jodhpur Cross Road, Satellite, Ahmedabad-380015

Sd/- Ketankumar Patel Managing Director (DIN: 01157786)

Sd/- Hrishikesh Rakholia Director (DIN: 08699877)