Madhya Bharat Agro Products Ltd Management Discussions

Global Economy¹

In CY 2024, the global economy demonstrated resilience, despite navigating macro headwinds such as geopolitical conflicts, steep inflation for a large part of the year, re-alignment of supply chains and shifting trade patterns. Global output grew by 3.3% during the year, exhibiting sustained recovery and stability after a few uncertain years. This growth was primarily driven by Emerging Market and Developing Economies (EMDEs), expanding by 4.3% due to robust domestic demand, improved exports and a steady growth in services and manufacturing. Simultaneously, advanced economies grew at a gradual pace at 1.8%. Global economy was therefore, supported by robust job markets, steady household expenditure and prudent policy measures, thereby, propelling long-term growth. Moreover, global inflation registered improvement in CY 2024 , with headline inflation at 5.7%, a decline from the past two years. Improved supply chains, decreased commodity prices and tighter monetary policies eased inflationary pressures in many countries. However, the momentum of disinflation slackened in the second half of the year, with a few countries witnessing a marginal hike in prices. Towards the end of CY 2024, global trade patterns shifted due to the introduction of US tariffs. Consequently, a few countries front-loaded their exports to the US to avoid higher duties thereafter. This early response to the upcoming trade measures may have impacted growth and inflation trends in the terminal point of the year, with temporary shifts in global demand and prices.

The global fertiliser industry remained steady and proactive during CY 2024. Robust demand was driven by moderate weather and effective farm policies in major regions. Despite varying costs of energy and raw materials throughout the year, supply chains performed at a measured pace. This allowed for timely delivery of fertilisers, thereby, enhancing food production and supporting farmers and rural communities worldwide.

Outlook

The global economy is predicted to sustain progress, with a moderate pace in CY 2025 and a gradual recovery in CY 2026. Global output is projected to grow by 2.8% in CY 2025 and improve marginally by 3% in CY 2026. Over the next five years, growth will potentially reach an estimated 3.2%. Advanced economies are forecast to grow by 1.4% in CY 2025 and 1.5% in CY 2026, while EMDEs are expected to expand by 3.7% and 3.9%, respectively. While uncertain trade tensions are escalating, the global economy maintains resilience, supported by robust domestic activity in most regions.

Global inflation is projected to ease further, reaching 4.3% in CY 2025 and declining to 3.6% in CY 2026, propelled by stable commodity prices and easing supply chain operations. Advanced economies will potentially register inflation reaching the target levels, while in emerging markets, it is expected to moderate. The global fertiliser industry is projected to remain steady, driven by heightened demand from the agriculture sector and logistics. Moreover, these positive developments ensure timely delivery of fertilisers, thereby, contributing to stable food production worldwide.

Indian Economy²

Indias economy recorded a growth of 6.5% in FY 25, supported by strong domestic demand, improved agricultural output, a significant amount of monsoon with a sustained expansion in the services and manufacturing sectors. Augmented government expenditure on infrastructure and the stable financial stance of banks and corporates further strengthened overall growth. Key contributors included a 7.6% hike in private consumption, 6.1% growth in capital investments and a 7.5% growth in the services sector. High-frequency indicators suggest steady momentum in E-way bill generation that escalated by 19.4%, GST collections that grew by 9.9% and toll collections that hiked by 11.9%. Additionally, the construction and core industries, such as steel and cement, registered double-digit growth, further demonstrating the economys robust performance.

On the inflation front, India witnessed its third consecutive year of improvement, with retail inflation at 4.6% in FY 25. This was primarily due to effective monetary policies by the Reserve Bank of India (RBI) and targeted government measures such as food stock releases, import duty reductions, stock limits and food subsidies. Food inflation declined, with the food index at 2.69% during the year. Moreover, the Government of India exhibited robust support for agriculture, allocating 1.22 lakh crore to the Department of Agriculture and Farmers Welfare (DA&FW). Flagship schemes such as PM-KISAN and higher MSPs bolstered farmers economic growth and propelled input purchases of fertilisers. The sharper focus on enhancing farm productivity and rural incomes, provide an opportunity for sustained growth in the fertiliser sector and overall rural economy.

Outlook

India has emerged as the worlds fourth-largest economy, with per capita income doubling since 2014, a testament to its sustained economic progress. Despite global headwinds, the way forward remains optimistic, due to enhanced domestic and foreign investments, robust manufacturing growth and improvement in trade and financial services. Real GDP growth is projected at 6.5% in FY26, with a marginal hike to 6.7% in FY27, predicting a moderate monsoon and minimal major global disruptions. Growth is expected to be broad-based, with agriculture, manufacturing and services sectors exhibiting positive trends. On the inflation front, the Consumer Price Index (CPI) is expected to sustain stability at approximately 4.0% in FY26, aided by easing crude oil prices, balanced supply-demand dynamics and supportive policy measures. Despite ongoing global uncertainties such as geopolitical tensions and supply chain challenges, Indias strong macro-economic fundamentals and proactive policy interventions provide a solid base for sustained economic progress.

Industrial Overview

Global Fertiliser and Chemicals Industry³

In CY 2024, the global fertiliser market was valued at USD 182.3 billion, demonstrating steady growth. This is primarily due to the rising demand of food for keeping pace with the population and the augmenting incomes. Farmers are utilising more fertilisers to enhance crop yields, thereby, making better use of limited land. Governments further, bolster growth by offering subsidies, formulating affordable fertilisers for farmers. In CY 2024, countries globally, invested over USD 50 billion on fertiliser subsidies, with India with an expenditure of approximately USD 13 billion.

A predominant part of the market in CY 2024 was led by chemical fertilisers, constituting a 66.6% of the total. These are extensively used for yielding swift results of well-grown crops. Dry fertilisers being the most used form, comprising a 81.8% share, for their convenience of storage, transportation and application on large farms. Grains and cereals, were the top crops, to use fertilisers, constituting 45.8% of the market, due to being food staples in most countries. Asia Pacific emerged as the largest regional market, with more than 52.5% share, led by big farming nations such as China and India. This region benefits from large farming areas, supportive government policies and innovative farming methods.

Global Fertiliser Market (USD Billions)

Global Forecast Market

Indian Fertiliser and Chemical Industry⁴

In FY 25, the Indian government increased the final budget for fertilisers to INR 1,91,836.29 crore, from the earlier estimate of INR 1,68,130.81 crore. This surge was supported by additional approvals in the Parliament. The budget is allocated based on the quantity of fertiliser the country expects to use, along with fluctuating natural gas prices and international fertiliser prices. The government continues to substantially invest in subsidies, for improving farm prosperity, especially under the Nutrient Based Subsidy (NBS) scheme, wherein the final allocation for FY25 augmented to INR 54,310 crore from the initial INR 45,000 crore. Moreover, the government approved a special package for DAP fertiliser, for companies to navigate challenges in global supply. This package provides an additional INR 3,500 per metric ton of DAP sold, with the regular NBS subsidy. This keeps DAP prices stable and affordable for farmers. For urea, the price has remained unchanged since 2018 at INR 242 per 45 kg bag with the government providing subsidies, ensuring affordable rates for farmers.

To timely delivery of fertilisers, the government works closely with states before each cropping season to plan supply. Fertiliser movement is tracked via the integrated Fertiliser Monitoring System (iFMS) and weekly video calls with state officials that offer swift solutions. India further imports fertilisers to meet demand, while the Department of Fertilisers (DoF) is responsible for international deals and companies, thereby, ensuring a steady supply of raw materials and manufactured fertilisers. This coordinated effort strengthens the affordability and accessibility of fertilisers, nationwide.

Outlook⁵

With a budget allocation of 1.91 lakh crore⁶, the Indian fertiliser industry is predicted for robust growth. A key target being self-sufficiency by 2032, particularly in urea production by FY 26, that is driven by heightened local manufacturing and widespread usage of nano urea. Consequently, the number of nano liquid urea plants will surge from 9 to 13 by FY 25, with an expected output of 44 crore bottles. The government, further prioritises expanding the market for organic and bio-fertilisers, reviving old fertiliser plants in Gorakhpur, Talcher and Barauni, thereby, reinforcing local production to decrease import dependence. Ongoing investment in research and innovation improved fertilisers, promoting efficient farming. Simultaneously, the risks of fluctuating climate and demand for sustainable farming are driving efforts to build long-term resilience. Supportive schemes such as Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and the extension of irrigation programmes are predicted to bolster farmer incomes and utility of fertilisers in the forthcoming years.

Speciality Nutrients⁷

The Indian speciality nutrient market, with its steady growth, is expected to reach USD 1.77 billion by 2030, from USD 1.27 billion in FY 25, at a rate of 6.8% annually from 2025 to 2030. These fertilisers yield improved crops with nutrients provided more effectively via soil application, spray on leaves (foliar) and combined irrigation water (fertigation). The most popular categories being liquid fertilisers, water-soluble fertilisers, controlled-release and slow-release fertilisers. Fertigation remains as a widely suited method, with field crops such as rice, wheat and sugarcane as primary users of these fertilisers. New-age technology, enhanced farming practices and government support, further propels market growth. More farmers utilise precise methods to apply fertilisers, for decreased wastage and heightened crop yield. Moreover, many areas are now equipped with improved irrigation systems, enabling convenient usage of fertigation. A rising demand for eco-friendly fertilisers is witnessed, due to concerns regarding soil health and water pollution by regular fertilisers. Moreover, with the horticulture sector expanding, farmers use speciality fertilisers for high-quality yields.

The companies form partnerships with agri-tech firms and research groups, thereby, prioritising innovation, making nano-fertilisers and providing digital advice to farmers. In the future, the market will potentially sustain growth with sharper focus on sustainable farming, improved products and strengthened farmer connections.

Company Overview

Madhya Bharat Agro Products Limited (MBAPL), established in 1997, specialises in the manufacturing of Phosphatic fertilisers, offering high-quality chemicals to farmers at affordable rates. Managed by the Ostwal Group of Industries since 2004, it has emerged from being a private Company initially, then transformed into a public one. The Company is ISO 9001:2015 certified, indicating its adherence to standards of international quality. MBAPL commenced by producing Single Super Phosphate (SSP) and gradually, added more products such as Sulphuric Acid, Phosphoric Acid and Diammonium Phosphate (DAP)/Nitrogen, Phosphorus, Potassium (NPK) fertilisers. The Company formulated Beneficiated Rock Phosphate (BRP) at its plant in the Village Sorai (Sagar). The Company is a self-sustainable unit, by leveraging new-age technology to prioritise the delivery of top-grade fertilisers and quality agro-products that meet customer needs.

MBAPL formulates diverse fertilisers and chemicals, with its production volume including: SSP/GSSP (240,000 MT), Sulphuric Acid (165000 MT installed), Phosphoric Acid (69000 MT installed), NPK/DAP (240000 MT) and Beneficiated Rock Phosphate (189000 Crushing capacity of BRP). In CY 24-25 PAP capacity enhance by 19500 MTPA.

The Company further introduced a range of Fortified SSP Fertilisers. MBAPL, therefore, owns two manufacturing units in Sagar, Madhya Pradesh, located in Rajoua and Village Sorai (Banda Tehsil). The Company prioritises quality and safety and as a testament to this, its testing lab is accredited under ISO/ IEC 17025:2017, along with an NABL accreditation indicating its permission to test the quality of fertilisers such as DAP and NPK. Third manufacturing unit is coming up at Dhule (Maharshtra)

Madhya Bharat Agro Products Ltd Diverse Offerings

DAP/NPK Fertilisers

MBAPL offers BHARAT DAP, a balanced fertiliser containing 18% nitrogen and 46% phosphorus, extensively used in conventional agriculture for promoting root development and strong vegetative growth. Alongside, BHARAT NPK (20:20:0:13) provides an effective combination of nitrogen, phosphorus and sulphur in the form of uniform, light brown granules which have good shelf life. This formulation enhances crop development during the time of sowing and top dressing.

Single Super Phosphate (SSP) Fertilisers

The Company produces various SSP-based fertilisers. Annadata ZIBO is a zincated and boronated SSP that supplies phosphorus, sulphur, calcium, zinc and boron in a composite form. It enhances photosynthesis, flowering and helps crops develop resistance to pests and diseases. Annadata BOSS, a boronated SSP, improves crop growth and fruiting by providing boron and phosphorus. Annadata Sulphozinc is enriched with zinc and supports similar benefits, including better fruit production. MBAPL also offers plain Annadata SSP, which is rich in phosphorus and contributes to overall plant growth. The recommended application ratio for the SSP fertilisers is three bags per acre combined with 30 kg of urea for optimal results.

Secondary Nutrients

MBAPL also addresses secondary nutrient deficiencies. Sulphur Bentonite (90% Sulphur) is a slow-release fertiliser that improves oil content in oilseeds, enhances root crop quality and aids in storage through consistent sulphur supply. Annadata Casma enhances soil fertility by providing calcium, magnesium and sulphur, facilitating balanced plant nutrition in all soil types.

Supplements and Organic Products

MBAPL caters to organic and supplemental nutrition needs. Annadata Prom is a natural fertiliser that enhances soil structure and nutrient utilisation. It is suitable for all crops and recommended at the ratio of 100 kg per acre. Annadata Potash, an organic potassium supplement with 14.5% potash, strengthens plant vigor and yield. Annadata Miracle is a specialised root supplement that enhances nutrient absorption, root mass and stress resistance. It is available in granular and powder forms for drip irrigation or soil application.

Operational Performance

In FY 25, MBAPL registered strong growth across its operations. The Company recorded a 11.63 % increase in total production volume as compared to the previous year. The NPK/DAP segment witnessed robust performance with sales escalating to 22% in the last year. The Company continues to reinforce its position in the fertiliser market through consistent volume growth and improved market reach.

MBAPL delivered 1,83,028 tons of SSP in FY 25, recording a 12% increase from FY 24. Additionally, the sale of 1,56,346 tons of NPK/DAP fertilisers resulted in a 22% rise compared to the previous year. These values demonstrate the Companys success in augmenting sales despite market fluctuations. The Company harnessed its production capacities in products like SSP, DAP/NPK, Sulphuric Acid and Phosphoric Acid through the expansion of manufacturing capabilities.

The Companys operations are supported by strong backward integration, in-house production of key raw materials like Sulphuric Acid, Phosphoric Acid and Beneficiated Rock Phosphate (BRP). In FY 25, MBAPL expanded its Phosphoric Acid plant in Sagar by increasing its capacity to 69,000 tons while upgrading its Sulphuric Acid production capacity to 165,000 tons. These align with the Companys long-term expansion strategy to reinforce its presence in the chemical sector through product diversification and extending its reach beyond Madhya Pradesh by establishing a new plant in Maharashtra by 2026. The Company also introduced three new fortified SSP products to widen its product offerings and serve diverse crops and soil requirements.

Capacity Utilisation

In FY 25, MBAPL operated most of its plants at stable capacity levels. The SSP plant utilised 73% of its annual capacity of 240,000 tons. The DAP/NPK complex, having a yearly capacity of 240,000 tons, recorded 64% usage. Moreover, the Companys BRP crushing unit harnessed 55% of its 189,000-ton capacity during the year. These values highlight the Companys efficient production level across major segments, while prioritising product diversification and expanding market presence.

MBAPLs Sulphuric Acid plant operated at maximum annual capacity throughout FY 25 which had been augmented to 165,000 tons prior to the commencement of the year. The Phosphoric Acid plant registered a lower utilisation at 39%, due to the completion of substantial expansion in March 2025, increasing production capacity from 49,500 tons to 69,000 tons. The Company expects to achieve better utilisation of this expanded capacity by the middle of FY 26.

Key Financial Ratios

Sr. No Particulars of Ratio	31.03.202 5	31.03.20 24	change in Ratios %	Explanation for change in Ratios
1 Debtors Turnover	5.52	3.84	43.75%	Increased due to timely realization of debtors.
2 Inventory Turnover	4.64	3.15	47.30%	Increased because of bettermanagement of inventory.
3 Interest Coverage Ratio	4.37	2.99	46.15%	Increased due to Higher profits
4 Current Ratio	1.45	1.38	5.07%	Increased due to better management of assets, Retention of profits & Sanction of New Term Loan.
5 Debt Equity Ratio	0.79	0.83	(4.82)	Due to retention of profits.
6 Operating Profit Margin (%)	11.59%	9.61%	20.60%	Increased due to increase in subsidy
7 Net Profit Margin (%)	5.43%	3.04%	78.62%	Increased due to higher profit compared to previous year

DETAILS PERTAINING TO RETURN ON NET-WORTH OF THE COMPANY

Sr. No Particulars of Ratio	31.03.202 5	31.03.20 24	change in Ratios %	Explanation for change in Return on Net Worth
1 Return on Net Worth (%)	14.23%	7.08%	100.99%	Increased due to higher profit compared to previous year, Main reason of higher profit is increasing subsidy.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

Based on the management approach as defined in Ind AS 108 - Operating Segments, the MD and CFO evaluate the company's performance and allocates resources based on an analysis of various performance indicators of business segment/s in which the company operates. The Company is primarily engaged in the business of Fertilizer manufacturing but other products are backward integration supporting fertilizer division, therefore, we have started showing in house consumption of all products. Hence, disclosure of segment-wise information is not required and accordingly not provided.

Human Resource

MBAPL acknowledges its people as one of its most valuable strengths. The Company depends on a skilled and future-ready workforce to support its operations, sales and future growth trajectory. It prioritises hard work, knowledge and dedication of its employees as key drivers of the Companys long-term success. As of early 2025, OGI as a group has recorded to have a robust workforce of more than 170 marketing professionals promoting its products and reaching farmers across different regions. The substantial increase in the value from approximately 150 employees in the previous year, reinforces the Companys expanding market presence. Through regular employee benefit provisions, the Company demonstrates its sustained commitment to its people.

The Company has allocated a part of its CSR budget on employee benefit activities, such as welfare programs and community support. MBAPL understands the role of a motivated and capable workforce in driving market expansion and product diversification. Through talent retention and attraction, the Company is committed to long-term success.

Quality Management

MBAPL prioritises operational quality across all its production processes. All of its manufacturing units are certified with ISO

9001:2015, ensuring that the Company adheres to strong quality management practices. Additionally, the Companys laboratories are NABL accredited (ISO/IEC 17025:2017), aligning with international standards for testing and calibration. These certifications reinforce the Companys efforts to maintain accuracy, safety and consistency in its production.

Each plant is equipped with a NABL-accredited lab for meticulous product monitoring. MBAPL has been recognised through official approvals for efficient handling of raw materials and finished products such as SSP, BRP, Phosphoric Acid, Sulphuric Acid and others hazardous substances. The Company is committed to deliver quality fertilisers, thereby, enabling farmers improve crop yields and soil health. Additionally, the Company conducts awareness camps in villages to promote education among farmers on proper usage, facilitating greater product effectiveness and reliability in the field.

Risk Management

Risk	Description	Mitigation strategy
Policy Changes Risk	Dynamic changes in government rules or market policies may adversely affect sales and pricing.	The Company closely monitors government rules, increases local production to support import substitution and benefits from higher subsidies offered by current policies.
Rising Raw Material Cost	Volatility in raw materials such as sulphur raise overall costs due to unprecedented hikes.	The Company relies on long-term supply deals, utilises backward integration to regulate costs and benefits from higher government subsidies to manage price escalation.
Financial Risk	Borrowing money for expansion increases financial pressure and debt obligations.	The Company operates with reasonable loans, funds and equity to fund its projects. It has secured loan arrangements while ensuring an improved debt-to-equity ratio.
Operational Risk	The seasonal nature of fertiliser demand results in declined sales during some periods.	The Company is expanding its operations to new areas such as Maharashtra to balance seasonal sales. It has recorded growth in off-season quarters, demonstrating efficient management.
Technology Risk	New technology in fertilisers or production can impact current operational efficiency.	The Company consistently improves its production methods by harnessing advanced technology and exploring opportunities in the specialty chemicals sector.

Internal Control System

Madhya Bharat Agro Products Ltd has a strong internal control system in place to help its operations run smoothly and efficiently. These controls are made to protect the Companys assets, keep financial records accurate and make sure all laws and Company rules are followed. Regular checks and audits are done to find and fix any problems in the system. The management is always working to make these controls better so that the business stays transparent, responsible and trustworthy. This also helps the Company work more efficiently and protects the interests of its stakeholders.

Cautionary Statement

The Management Discussion and Analysis (MDA) section talks about what the Company plans to do in the future and what it expects to happen. These plans may involve some risks or changes that could affect the actual results. The Company makes these statements based on the information and ideas it has now, both from inside and outside the Company. But these ideas can change over time, which might also change the results. It is important to know that these statements are only true at the time they are made. The Company does not have to update them later, even if new things happen.