Kiri Industries Ltd Management Discussions

ECONOMIC OVERVIEW

GLOBAL ECONOMY

The global economy in 2024 found itself navigating a complex and shifting terrain, marked by moderated growth, lingering inflation, and rising geopolitical and trade-related uncertainties. As the aftershocks of pandemic-era disruptions faded, new forces emerged-protectionist trade policies, reconfigured global supply chains, and elevated interest rates-that redefined the contours of global economic momentum.

According to the International Monetary Fund (IMF), global GDP expanded by 3.3% in 2024, a modest yet resilient performance, albeit lower than historical averages. However, the outlook into 2025 appears more constrained, with global growth projected to decelerate, largely due to slowing demand in major economies, persistent trade tensions, and the gradual withdrawal of monetary support.

On the inflation front, the global economy experienced a welcome cooling in price pressures. Headline inflation moderated, down from the peaks of 2022–2023. Yet, inflation levels remained above central bank targets in many economies, particularly in services and housing-related segments. The OECD and Council on Foreign Relations tracked median global inflation falling to 3.1% by mid-2024. This gradual disinflation allowed some central banks to slow the pace of rate hikes, though many retained a cautious stance to avoid premature loosening.

Trade, once the lifeblood of global growth, remained subdued in 2024 amid growing protectionism and uncertainty. The World Trade Organisation (WTO) reported global merchandise trade volume growth of just 2.7%, with pronounced regional asymmetries. Asia, especially Southeast Asia, saw export growth rebounding, while Europe and Africa registered mixed results. The rise of "tari_ diplomacy"-driven primarily by the United States imposition of broad-based tariffs-fuelled concern across capital markets and prompted calls from the IMF for structural, rather than punitive, policy responses. These shifts underscored the weakening of multilateral trade frameworks and the emergence of fragmented economic blocs focused on resilience over efficiency. Geopolitical developments have played an increasingly central role in shaping economic outcomes. Conflicts in Eastern Europe, persistent tensions in the Taiwan Strait, and new alignments in the Middle East have disrupted supply chains and created volatility in energy and commodity markets.

(https://www.imf.org/en/Publications/WEO#:~:text=Global%20 growth%20is%20projected%20to,at%20its%20lowest%20in%20 decades.)

INDIAN ECONOMY

The Indian economy in Financial Year 2025 (FY2025) continued its ascent, solidifying its position as the worlds fastest-growing major economy. While a cautious global environment, marked by geopolitical tensions and trade protectionism, presented challenges, Indias robust domestic fundamentals and strategic policy interventions provided a strong shield. The narrative of FY2025 is one of sustained momentum, driven by a powerful synergy of capital expenditure, a resilient services sector, and a concerted push for digital and physical infrastructure. Indias economy navigated FY2024–25 with resilience and strategic balance, recording a real GDP growth of 6.5%, according to provisional estimates from the National Statistical Office (NSO). Although this marks a moderation from the previous years number, it remains among the highest growth rates for major economies globally. The year was marked by global headwinds, including geopolitical disruptions, but Indias economic fundamentals remained strong, supported by domestic consumption, infrastructure investment, and a rebound in services and construction.

The services sector remained the powerhouse of the Indian economy. Its growth was fuelled by robust activity in financial services, real estate, and professional services The industrial sector also demonstrated resilience, with the manufacturing and construction segments showing strong expansion, buoyed by government initiatives and public investments. The agriculture sector rebounded strongly, supported by favourable weather conditions and a boost in rural consumption.

Infiation remained within the Reserve Bank of Indias target range throughout the year. Headline CPI inflation averaged 4.6% in FY2024–25, down from 5.4% the previous year. Food inflation was volatile at times, but core inflation remained subdued. In response, the RBI held the policy repo rate at 6.5% for most of the year, before delivering a consecutive three cuts till June 2025, bringing down the rate to 5.5%, signalling a shift to a more favourable monetary stance. This pivot was driven by improved inflation dynamics and a more balanced growth outlook.

On the fiscal front, the government continued to exhibit prudence while supporting growth. The fiscal deficit was contained at 4.8% of GDP, improving from 5.8% in FY2023–24. This was achieved through a combination of strong tax collections, asset monetisation, and disciplined expenditure management. Capital expenditure experienced double-digit growth, particularly in transportation, energy, and digital infrastructure, underscoring the governments commitment to long-term capacity building.

Indias export landscape saw a subtle but significant shift. While merchandise exports remained stable, services exports more than doubled over the last decade, reaching new highs in fiscal year 2025. This underscores Indias growing prowess as a global hub for professional and business services, driven by a highly skilled workforce.

Looking ahead, the Indian economy is well-positioned for continued growth. The governments strategic reforms, including initiatives to promote manufacturing and the focus on a "Viksit Bharat" by 2047, provide a clear roadmap. However, the path forward is not without risks, primarily stemming from global uncertainties and the need to address structural issues, such as urban consumer demand and private investment in certain sectors. Nevertheless, with its strong domestic demand, a young demographic profile, and a resilient macroeconomic framework, Indias journey towards becoming a global economic powerhouse remains firmly on track.

INDUSTRY OVERVIEW

GLOBAL CHEMICAL INDUSTRY

The global chemical industry in 2024 navigated a landscape marked by cautious optimism, shaped by a combination of macroeconomic uncertainty, evolving energy dynamics, and shifting demand patterns across key end-user sectors. While the sector witnessed a gradual recovery from the post-pandemic volatility and energy price shocks of recent years, growth remained uneven across regions and product segments.

According to BASFs global outlook, global chemical production (excluding pharmaceuticals) is estimated to have grown by approximately 3.9% in 2024, following a subdued performance in 2023. The rebound was supported by moderate demand recovery in construction, automotive, packaging, and electronics, alongside increased activity in emerging markets, including India, Southeast Asia, and parts of Latin America. However, developed economies like the EU and parts of North America continued to face pressure due to higher interest rates, regulatory tightening, and sluggish industrial output.

Energy transition trends, particularly in Europe, continued to alter feedstock economics and competitiveness. While Asia-particularly China-remained the global hub for chemical manufacturing, oversupply in basic chemicals and petrochemicals led to margin compression across several categories. Specialty chemicals and performance materials, however, experienced relatively stronger demand due to their applications in renewable energy, electronics, healthcare, and sustainable packaging. Sustainability, circularity, and digitalisation emerged as defining themes for the industry, with leading chemical manufacturers intensifying efforts towards decarbonisation, green chemistry innovation, and value chain transparency. Regulatory frameworks, such as the EUs Green Deal and the US Infiation Reduction Act, further accelerated investment in clean technologies and low-emission manufacturing practices.

Chemical production (excluding pharmaceuticals)
Real change compared with previous year	2024	2023
World	3.9%	1.4%
European Union	1.6%	-8.2%
USA	0.0%	-0.2%
China	6.8%	7.4%
Emerging markets of Asia excluding China	2.4%	-2.5%
Japan	-2.9%	-6.6%
South America	1.7%	-5.7%

Our own estimate of the growth rate, based on offcial statistics from China for the overall market and individual products.

INDIAN CHEMICAL INDUSTRY

Indias chemical industry, encompassing over 80,000 commercial products, is one of the most diversified sectors globally. It spans across bulk chemicals, specialty chemicals, agrochemicals, petrochemicals, polymers, and fertilisers. As the 6th largest chemical producer in the world and 3rd in Asia, the sector contributes approximately 7% to the nations GDP. Currently valued at around US$220 Bn, the Indian chemical industry is projected to reach US$300 Bn by 2030 and an impressive US$1 trillion by 2040, underscoring its long-term growth potential.

The Indian chemical industry faced significant challenges in FY 2024-25, including weak global demand, supply chain disruptions, stringent environmental regulations, raw material price volatility, and intense competition. Subdued export markets, particularly in Europe and North America, coupled with global overcapacity, pressured pricing. Geopolitical tensions and logistical bottlenecks, like Red Sea delays, disrupted raw material supplies. Tightening regulations demanded costly compliance and sustainable practices. Volatile input prices strained margins, while competition from global and domestic players intensi_ed. The industry countered with cost optimisation, innovation in specialty chemicals, domestic sourcing, and green technologies to maintain resilience and competitiveness.

Despite prevailing global uncertainties, the Indian chemical sector continues to offer robust opportunities, particularly in specialty chemicals, import substitution, and export growth under the China+1 strategy adopted by global supply chains. India holds a competitive position in global trade, ranking 14th in exports and 8th in imports of chemicals (excluding pharmaceuticals). The demand for chemicals and petrochemicals in India is anticipated to nearly triple by 2040, reaching US$1 trillion. To catalyse this growth, the Department of Chemicals & Petrochemicals is working on a Production

Linked Incentive (PLI) scheme for the sector. It plans to revise the guidelines for Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs).

Union Budget 2025 has introduced several policy initiatives that are expected to provide direct and indirect support to the chemical industry:

• Agriculture-linked initiatives such as the Prime Minister Dhan-Dhaanya Krishi Yojana, which focuses on agricultural productivity, crop diversification, irrigation development, and the establishment of new urea plants, will drive demand for fertilisers and agrochemicals.

• Asset Monetisation Plan 2.0, targeting C 10 lakh crore between FY25 and FY30, may include key public sector undertakings in the chemical sector. This initiative could attract private investment, promote public-private partnerships, modernise operations, and enhance innovation and competitiveness across the sector.

• The National Manufacturing Mission will advance the ‘‘Make in India initiative, providing a strong push to the chemical industry, which plays a foundational role across all manufacturing sectors.

• Government plans to develop ecosystems for solar PV cells, EV components, electrolysers, wind turbines, and grid-scale energy storage solutions are likely to benefit chemical manufacturers, especially those involved in advanced materials and battery chemicals.

• Initiatives such as the National Action Plan for Toys will support the specialty chemicals segment. At the same time, a proposed 3-year pipeline of PPP infrastructure projects is expected to stimulate demand for construction and performance chemicals.

Together, these initiatives reinforce Indias strategic intent to position its chemical industry as a global hub for manufacturing and innovation in the coming decades.

GLOBAL DYES INDUSTRY

The global dyes and pigments industry continued to evolve in 2024, driven by growing demand from key end-use sectors, including textiles, leather, paper, paints and coatings, and plastics. The market was valued at approximately US$39 Bn in 2024 and is projected to reach US$52.0 Bn by 2033, exhibiting a compound annual growth rate (CAGR) of 3.26% during 2025-2033, supported by rising consumption in emerging economies and an increased focus on sustainable and high-performance dyeing solutions.

The Asia-Pacific region remained the largest and fastest-growing, led by India, China, Bangladesh, and Vietnam, which collectively contribute a significant share of the global textile processing market. The regions cost advantages, skilled labour, and robust downstream industries further solidi_ed its position as the hub for dye manufacturing and consumption.

A key trend shaping the industry was the growing emphasis on eco-friendly and biodegradable dyes, driven by stringent environmental regulations in Europe and North America. Major players have responded with R&D investments in low-VOC and waterless dyeing technologies to meet both compliance and consumer expectations for sustainability.

Meanwhile, the industry witnessed price volatility in raw materials such as benzene and naphthalene derivatives, primarily due to supply chain disruptions, geopolitical tensions, and evolving trade dynamics. This impacted the cost structure and margins, compelling manufacturers to optimise operations and adopt backwards integration strategies.

On the technological front, digital textile printing continued to gain momentum, pushing demand for specialised dyes and pigments suited for inkjet and sublimation processes. This niche, although still emerging, is expected to make a meaningful contribution to industry revenues over the next decade.

INDIAN DYES INDUSTRY

The Indian dyes industry is a significant component of the broader chemicals sector. India continued to reinforce its position as a global manufacturing hub for dyes and dye intermediates, buoyed by robust demand from the textile, leather, paper, and printing industries. As one of the worlds largest producers and exporters of dyes, India accounts for approximately 16–18% of global production, with significant export footprints across Asia, Europe, and Latin America.

However, in FY 2024-25, the Indian dyes industry faced stringent environmental regulations, raw material price volatility, intense global competition, and supply chain disruptions. Tight wastewater norms increased compliance costs, prompting the adoption of eco-friendly technology. Volatile petrochemical input prices strained margins, prompting localised sourcing. Competition from China and Southeast Asia challenged exports, countered by high-quality, sustainable dyes. Geopolitical tensions and Red Sea shipping delays disrupted raw material imports, infiating costs. Companies invested in domestic supply chains and inventory management to ensure continuity, leveraging government initiatives like "Make in India" to enhance competitiveness in the textile-driven dyes market. The Indian dyes and pigments market was valued at US$1.28 Bn in 2024, according to IMARC Group. Looking ahead, the market is projected to reach US$1.70 Bn by 2033, registering a Compound Annual Growth Rate (CAGR) of 3.26% during the forecast period from 2025 to 2033.

This growth is driven by increasing domestic consumption, export growth, and the gradual shift of global buyers from China to India due to cost and compliance considerations. Government initiatives, such as PLI schemes, support for textile parks, and Make in India, have further strengthened the industrys manufacturing ecosystem and global competitiveness. Textiles remained the largest end-user, with Indias growing prominence in global apparel exports fuelling upstream demand for reactive, disperse, acid, and vat dyes. Additionally, the expansion of industries like paints, plastics, and digital printing contributed to a wider application base.

A key structural transformation in FY 2025 was the growing regulatory push for eco-friendly, low-impact dyes in response to environmental concerns and global compliance norms, such as REACH and ZDHC. This encouraged manufacturers to invest in green chemistry, e_uent treatment systems, and research and development for sustainable formulations. Many Indian players also began aligning with global Environmental, Social and Governance (ESG) frameworks to retain and expand their export markets.

However, the industry faced intermittent headwinds, including volatile raw material prices, rising freight costs, and stringent pollution control norms, particularly in Gujarat, the largest dye-producing region. These challenges tested operational resilience and prompted many mid-sized and large players to adopt backwards integration, waste recovery, and energy-e_cient practices.

GLOBAL SPECIALTY CHEMICALS INDUSTRY

As a vital component of numerous downstream industries, specialty chemicals continue to play a crucial role in enabling innovation, enhancing product performance, and addressing critical societal needs, particularly in areas such as sustainability, digitalisation, and advanced materials.

While some regions experienced a gradual economic recovery, the industry continued to contend with the lingering effects of global inflation, geopolitical uncertainties, and fluctuating energy prices. These factors influenced demand patterns, raw material costs, and supply chain stability. However, resilience was demonstrated by sectors that catered to essential goods and those that benefited from strategic government investments.

Regionally, the Asia-Pacific remained the dominant market, accounting for over 40% of the global share, led by the economies of China, India, and Southeast Asia.

The region benefited from expanding industrial activity, supportive government policies, and increasing domestic consumption. North America and Europe, although mature markets, continued to evolve through R&D investments, the adoption of green chemistry, and digital integration in production processes.

Sustainability remained a core theme in 2024, with growing regulatory pressures and customer expectations accelerating the development of bio-based chemicals, low-VOC formulations, and circular economy solutions. Specialty chemical companies are increasingly focused on decarbonising operations, improving supply chain traceability, and aligning with ESG frameworks.

The global specialty chemicals industry experienced moderate growth in 2024, driven by strong demand across various end-user sectors, including automotive, construction, electronics, personal care, and agriculture. As of 2024, the industry is estimated to be valued at over US$978,973.1 Mn and is projected to reach US$1,312,777.3 Mn by 2030, growing at a CAGR of 5% from 2025 to 2030.

INDIAN SPECIALTY CHEMICALS INDUSTRY

The Indian specialty chemical industry remains a dynamic and high-growth sector, playing a pivotal role in the nations manufacturing landscape. Characterised by its diverse product portfolio and applications across various end-user industries, specialty chemicals are crucial enablers for sectors such as agriculture, automotive, construction, personal care, textiles, electronics, and pharmaceuticals.

In FY 2024-25, the Indian specialty chemical sector faced weak global demand, raw material price volatility, stringent environmental regulations, and intense competition. Subdued export markets, particularly in Europe and North America, coupled with Chinese dumping, pressured margins. Volatile input costs disrupted cost planning, while strict regulations demanded costly compliance. Competition from low-cost global players challenged market share. Supply chain disruptions, including delays in Red Sea shipping, have driven up costs. Companies countered with cost optimisation, sustainable practices, local sourcing, and innovation in high-demand segments like electronics and pharmaceuticals to maintain competitiveness.

FY2025 also witnessed increased emphasis on green chemistry, low-carbon manufacturing, and value-added exports. Indian specialty chemical manufacturers are increasingly adopting sustainable practices and integrating digital technologies to enhance operational efficiency, ensure regulatory compliance, and facilitate customised product development. Key segments, including agrochemicals, APIs, dyes & pigments, polymer additives, and personal care ingredients, experienced notable growth during the year.

Several factors are likely to contribute to the industrys growth in the near future:

• Strong Domestic Demand: Rapid urbanisation, rising disposable incomes, and increasing consumption across various sectors (e.g., personal care, home care, food processing, and construction) are fueling demand for specialty chemicals.

• The "China Plus One" Strategy: Global supply chain realignment continues to benefit Indian manufacturers, as international companies seek to diversify their sourcing away from China. Indias strong chemical engineering talent pool, cost-e_ectiveness, and established infrastructure make it an attractive alternative to China.

• Government Initiatives: Programs such as "Make in India," Production Linked Incentive (PLI) schemes, and infrastructure development projects are providing significant impetus to the manufacturing sector, thereby indirectly boosting demand for specialty chemicals.

• Increasing R&D and Innovation: Indian companies are investing more in research and development to create new products, enhance processes, and improve sustainability, resulting in higher value creation and a competitive advantage. The focus on green chemistry and bio-based chemicals is gaining traction.

• Export Opportunities: Indian specialty chemical manufacturers are expanding their global footprint, leveraging competitive pricing and quality to cater to international markets, particularly in developed economies.

• Diversification of End-Use Industries: The industrys broad application base provides resilience, as growth in one sector can offset slowdowns in another. Emerging sectors, such as electric vehicles (EVs) and advanced materials, also present new avenues for specialty chemical applications.

GLOBAL TEXTILE INDUSTRY

The global textile industry in 2024 exhibited steady recovery and transformation, marked by structural shifts, technological innovation, and evolving consumer preferences. Valued at US$ 1,976.84 Bn in 2024 and predicted to increase from US$ 2,123.72 Bn in 2025 to approximately US$ 4,016.50 Bn by 2034, expanding at a CAGR of 7.35% from 2025 to 2034, the industry continued to navigate a dynamic landscape shaped by macroeconomic challenges, sustainability imperatives, and shifting global trade patterns.

Post-pandemic stabilisation, combined with rising demand for both natural and synthetic _bres across fashion, home textiles, and technical textile applications, contributed to moderate growth. Key textile-producing nations, such as China, India, Bangladesh, and Vietnam, remained central to global supply chains, although companies increasingly explored nearshoring strategies to mitigate geopolitical and logistical risks. The U.S. and EU markets continued to drive demand for premium and sustainable textile products, prompting brands to prioritise traceability, eco-friendly materials, and circularity.

Technological advancements in digital printing, smart textiles, and AI-led manufacturing processes helped companies improve efficiency and responsiveness to market trends. At the same time, the industry saw increased regulatory scrutiny and consumer activism around environmental and labour practices. As a result, ESG compliance and transparent sourcing practices gained prominence across the value chain.

Despite inflationary pressures, energy price volatility, and geopolitical uncertainties, including ongoing disruptions in the Red Sea and shifts in trade alliances, major global players remained resilient by optimising supply chains and investing in innovation and automation.

INDIAN TEXTILE INDUSTRY

The Indian textile industry in FY2025 continued its trajectory as a vital pillar of the nations economy, demonstrating resilience and strategic growth. Driven by robust government support, a focus on technological advancements, and growing global demand, the sector is poised for significant expansion. At the same time, global economic uncertainties and fluctuations in raw material prices present challenges, targeted policy interventions and a robust domestic market are expected to mitigate these risks. Emphasis on sustainability, technical textiles, and boosting the MSME sector are key themes shaping the industrys performance in fiscal year 2025.

However, the industry faced several challenges in the 2024-25 financial year. Rising input costs, particularly for raw materials such as cotton and synthetic _bres, squeezed profit margins. Intense global competition, especially from countries with lower production costs, pressured export markets. Supply chain disruptions and logistical ine_ciencies further hindered smooth operations. Environmental regulations and the push for sustainable practices demanded costly technological upgrades.

Fluctuating consumer demand, influenced by economic uncertainty, adds unpredictability. Labour shortages and skill gaps in advanced manufacturing techniques slow productivity. Additionally, geopolitical tensions and shifts in trade policy create market volatility. Overcoming these hurdles requires innovation, adaptability, and strategic investments to maintain competitiveness and drive growth.

Market Dynamics and Growth:

• Significant Economic Contributor: The textile and apparel industry remained a major contributor to Indias GDP (approx. 2.3%), industrial production (13%), and exports (12%). It provided direct employment to over 45 Mn people and indirectly supports over 100 Mn livelihoods.

• Steady Export Growth: Indias textile & apparel exports grew by 6.32% in FY2025, led by a 10.03% rise in apparel, driven by industry resilience, new trade deals, and demand from the CIS, South Asia, and a positive US economy. Buyer shifts away from China and Bangladesh also helps. Home textile exports increased 10% in nine months. The India-UK FTA signed in May 2025 aims to boost exports with duty-free access.

• Domestic Demand and Market Size: A consistent recovery in domestic demand, coupled with a gradual recovery in exports, is a key driver. The Indian textile market is projected to reach US$350 Bn by 2030, representing a significant increase from its current value of US$174 Bn.

• Focus on Value-Added Products: There is a growing emphasis on high-value textile products, including technical textiles, which are seeing increased domestic production due to policy support.

Key Drivers and Opportunities:

• Government Initiatives and Policy Support: The Union Budget 2025-26 demonstrated a strong commitment to the textile sector, with a 19% increase in allocation to the Ministry of Textiles.

• Technological Upgradation and Innovation: The industry is actively embracing automation, Artificial Intelligence (AI), the Internet of Things (IoT), and advanced analytics to modernise production processes, improve efficiency, and enhance quality. The Amended Technology Upgradation Fund Scheme (ATUFS) continues to support modernisation and efficiency in textile machinery.

• "China Plus One" Strategy: International buyers diversifying their supply chains away from China present a significant opportunity for Indian textile manufacturers.

• Resilient Domestic Consumption: Consistent consumer spending within India, particularly in the home textile segment, provides a stable demand base.

• Sustainable Practices: A growing global and domestic emphasis on sustainability is driving the adoption of eco-friendly practices, the use of organic and recycled materials, and a reduction in water and energy consumption. This aligns with the governments establishment of an ESG Task Force.

FINANCIAL PERFORMANCE

STANDALONE FINANCIAL PERFORMANCE:

Total Revenue: For FY 2024–25, the Company reported revenue from operations of C 655.6 Crore, marking a 3.5% year-on-year increase over FY 2023–24. This growth was primarily driven by higher sales volumes, reflecting steady market demand and improved operational throughput, while average selling prices remained largely stable across product categories.

Total Expenditure: Total expenses for FY 2024–25 were C760.30 Crore, a modest 0.4% reduction over the previous year, underscoring disciplined cost control and enhanced operational efficiency.

Finance Cost: The finance cost for FY2024-25 was C16.5 Crore. This represents a significant reduction of 26.7% from the finance cost reported in FY2023-24.

Net Profit / Loss: The Company posted a profit after tax of C4.4 Crore for FY 2024–25, marking a significant turnaround from a net loss of C93.6 Crore in FY 2023–24. This recovery was supported by other income of C 105.3 Crore, primarily comprising a C 94.0 Crore dividend from the Joint Venture, Lonsen Kiri Chemical Industries Limited.

Non-Current Liabilities: For FY 2024–25, the Companys non-current liabilities increased sharply to C 147.8 Crore from C 31.6 Crore in the previous fiscal year. The predominant component was inter-corporate borrowings amounting to C139.1 Crore. This notable rise was primarily attributable to a strategic refinancing decision, wherein the Company utilised proceeds from long-term inter-corporate borrowings to repay existing current borrowings. This shift in the borrowing structure resulted in a reduction in short-term debt obligations while strengthening the long-term funding base, thereby improving the Companys liquidity profile and maturity structure of liabilities.

Current Liabilities: For FY 2024–25, current liabilities stood at C 241.1 Crore, significantly lower than C525.3 Crore in FY 2023–24, reflecting a substantial reduction in short-term obligations. This decrease was largely due to funds infused by the promoters in the form of equity to support the Companys working capital needs, enabling the repayment of a significant portion of trade payables. The reduction strengthened the Companys liquidity position and reduced reliance on short-term financing. Non-Current Assets: For FY 2024–25, non-current assets totalled C 793.0 Crore, up from C 739.1 Crore in FY 2023–24. The increase was driven by the Companys ongoing capital expenditure programme, undertaken in line with its strategic product development and operational efficiency plans.

Current Assets: Current assets for FY 2024–25 were C316.2 Crore, compared to C 214.9 Crore in the previous fiscal year. The composition included inventories of C153.4 Crore, trade receivables of C 95.4 Crore, and financial investments of C21.0 Crore. The year-on-year increase reflects higher inventory levels in anticipation of sustained demand, along with growth in receivables aligned with the Companys expanded sales volume.

CONSOLIDATED FINANCIAL PERFORMANCE:

Total Revenue: For FY 2024–25, revenue from operations stood at C 740.0 Crore, a 4.4% year-on-year increase as compared to the previous fiscal year. This resilient performance was supported by stable demand conditions and enhanced operational throughput across key business segments.

Total Expenditure: Total expenses for FY 2024–25 were C 965.59 Crore, up 15.5% from the previous year. Operational expenses remained largely fiat, reflecting the Companys strong focus on cost control and operational discipline despite growth in revenue.

Finance Cost: The finance cost rose sharply to C127.1 Crore in FY 2024–25 from C 22.7 Crore in FY 2023–24. This increase was primarily attributable to a new credit facility availed by the Singapore-based subsidiary during the year.

Net Profit / Loss: The Company reported a consolidated net loss after tax (before share of profit of Associates) of C 108.4 Crore for FY 2024–25, largely driven by the higher finance costs of the Singapore-based subsidiary. Other income increased to C114.9 Crore, mainly comprising dividend income of C 94.0 Crore received from the Joint Venture, Lonsen Kiri Chemical Industries Limited. Additionally, the share of profit from associates and joint ventures rose significantly to C373.2 Crore, compared to C 257.5 Crore in FY 2023–24.

Non-Current Liabilities: For FY 2024–25, non-current liabilities stood at C 1235.1 Crore, which included C 1114.3 Crore in borrowings alone. The increase was driven primarily by fresh borrowings in the Singapore-based subsidiary and inter-corporate borrowings in the parent Company.

Current Liabilities: Current liabilities declined substantially to C243.5 Crore in FY 2024–25 from C550.0 Crore in FY 2023–24. This reduction was largely the result of equity infusion by the promoters to meet working capital needs, enabling the repayment of the majority of trade payables.

Non-Current Assets: Non-current assets increased significantly to C 4039.7 Crore in FY 2024–25 from C 3128.6 Crore in the previous year. The growth was mainly attributable to the creation of project assets in Indo Asia Copper Limited, alongside an increase in the carrying value of investments stemming from a higher share of profit from associates and joint ventures.

Current Assets: As of FY 2024–25, consolidated current assets stood at C 685.5 Crore, up from C 236.7 Crore in FY 2023–24. The portfolio included investments of C 344.7 Crore, inventories of C153.5 Crore, and trade receivables of C 108.7 Crore. The year-on-year increase was primarily due to fresh investments made by Indo Asia Copper Limited.

DETAILS OF KEY FINANCIAL RATIOS:

In compliance with the listing regulations requirements, the key financial ratios were examined, and the ratios with significant changes of 25% or more compared to the immediately preceding financial year are provided below, along with an explanation for any changes.

Key Financial Ratios	FY 2024-25	FY 2023-24	Reason for Significant Change, if any
Debtors Turnover Ratio (times)	7.90	9.29	Due to increase in Trade Receivables as compare to previous year, this ratio is declined.
Inventory Turnover Ratio (times)	3.14	4.41	Due to increase in average inventory as compare to turnover achieved, this ratio is declined.
Interest Coverage Ratio (times)	1.00	-3.18	Interest Coverage Ratio improved on account of net profit earned during the year.
Current Ratio (times)	1.31	0.41	Current Ratio improved on account of payment of Trade Payables.
Debt Equity Ratio (times)	0.21	0.31	Debt Equity Ratio improved on account of infusion of new equity share capital during the year.
Operating Profit Margin	-14.01%	-17.07%	Due to increase in turnover leading higher absorption of fixed cost and decrease in operation cost, this ratio is improved.
Net Profit Margin	0.59%	-14.87%	Due to Net profit after tax earned during the year as compare to Net loss incurred during previous financial year, this ratio is improved.
			Due to the higher dividend income earned during the year as compare to previous year, this ratio is improved.
Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof	0.53%	-23.71%	Due to Net profit after tax earned during the year as compare to Net loss incurred during previous financial year, this ratio is improved.
			Due to the higher dividend income earned during the year as compare to previous year, this ratio is improved.

INTERNAL CONTROL SYSTEMS

The Company has established robust and effective internal control systems that ensure the efficient utilisation and protection of resources, as well as adherence to internal policies, financial reporting standards, and statutory requirements. These controls are well-aligned with the Companys scale and the nature of its operations. Comprehensive mechanisms are in place to safeguard the Companys interests, including regular reviews of audit controls and adjustments to the Audit Committees scope when required.

Internal audits, conducted by external auditor are in line with established auditing standards, assess the design and effectiveness of internal controls and risk management procedures. These audits also evaluate the operation of monitoring mechanisms, ensure compliance with relevant policies, and recommend process enhancements where necessary. The Audit Committee periodically assesses the adequacy and performance of the internal audit framework, closely monitoring the implementation of audit recommendations, particularly those aimed at enhancing risk management systems and policies. The internal control systems are continually updated and refined to adapt to evolving business needs.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES

The principles of relevance, continuity, and equity guide the Companys human resource development strategy. It consistently invests in human capital and talent management, implementing targeted initiatives to engage employees, especially the younger workforce, while aligning individual goals with the Companys broader objectives. The HR function is committed to integrating strategic initiatives and day-to-day operations with a future-oriented approach, aiming to create long-term value for both the Company and its stakeholders. This commitment plays a vital role in enhancing overall business performance.

Throughout the year, the Company has maintained strong employee relations and placed a strong emphasis on training and skill development to equip its workforce with the tools necessary to succeed in a rapidly evolving professional environment.

MANAGEMENT OUTLOOK

The past few years have been particularly challenging for both the chemical industry and the Company, marked by subdued demand for dyes and chemicals, volatile raw material prices, elevated energy costs, significant legal expenses related to the Singapore case, and high inflation, particularly in the USA and EU regions. Despite these headwinds, the Company leveraged its deep industry experience to effectively manage and mitigate these pressures, thereby limiting their impact on financial performance.

The Company is steadily enhancing its quarterly performance by optimising its product mix, implementing stringent cost controls, and driving improvements in operational efficiency. Recognising the ample capacity within the chemical sector, the Company is also pursuing strategic diversification by exploring opportunities in the copper and fertiliser segments through its subsidiary entities.

RISKS AND CONCERNS

The Company has established a comprehensive risk management framework that is thoughtfully tailored to the specific needs of its diverse business portfolio. This framework is carefully designed, taking into account various factors such as the scale, nature of inherent risks, and the regulatory environment relevant to each business segment or operational unit. In light of ongoing global and domestic uncertainties, the Company places increased emphasis on monitoring external developments that may influence its operations. Vigilance remains a fundamental principle of its risk management culture.

The Board actively oversees a structured risk management process, supported by strong internal controls, to protect strategic goals and minimise exposure to potential disruptions. This holistic approach not only strengthens corporate resilience but also reinforces the integral role of risk management within the Companys overall philosophy and strategic direction. To further strengthen this system, a dedicated Risk Management Committee has been formed, responsible for continuously monitoring, reporting, and addressing the various risks, the Company may face.

CAUTIONARY STATEMENT

Certain statements made in this Report relating to the Companys outlook, estimates, predictions, etc., may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ from such estimates, whether expressed or implied. Several factors that could impact the Companys operations include climatic conditions and economic conditions affecting demand and supply, changes in government regulations and tax regimes, natural calamities, and other external factors, over which the Company has no direct control.