Meghmani Organics Ltd Management Discussions

An Economic Overview

Global Economy

The global economy entered 2026 with moderate but resilient momentum, supported by continued investment in technology and AI-related infrastructure, resilient labour markets, and gradually easing tariff pressure compared to 2025. According to the OECD, global GDP growth is expected to hold around 2.9% in 2026, similar to last years pace, before edging up slightly to 3.0% in 2027

This broadly stable trajectory has nevertheless been challenged by an escalation of conflict in the Middle East, which triggered a sharp spike in energy prices and added fresh uncertainty to an otherwise stable outlook. This has pushed up inflation expectations globally, with G20 inflation now projected at around 4.0% in 2026, meaningfully higher than earlier forecasts, before easing back to around 2.7-3.0% in 2027 as energy prices are expected to normalise.

Employment conditions have broadly held up so far, but the OECD has cautioned that prolonged energy disruptions or weaker-than-expected AI-driven productivity gains could eventually weigh on investment and jobs, especially in energy-intensive industries.

On trade front, while the overall direction has been toward lower tariffs compared to the sharper increases seen in 2025, effective US tariff rates remain well above pre-2025 levels, and several major economies (including India, China, and Brazil) have seen the most significant reductions. Central banks across major economies continue to balance the need to contain inflation with the objective of supporting economic growth amid persistent energy price volatility and ongoing global trade uncertainties.

Outlook:

In a scenario where energy supply disruptions ease during 2026, global growth is expected to stay close to current projections (around 2.82.9% in 2026, improving modestly in 2027). If disruptions persist into 2027 that would present a materially weaker outcome, with much slower growth, more persistent inflation and elevated recession risks in vulnerable economies.

The OECD has emphasised that any policy support measures for households and businesses should be targeted and temporary, while preserving incentives for energy conservation and supply adjustment.

On the positive side, continued strength in AI-related investment and a gradual reduction in trade barriers remain key supports that could help cushion the impact if the geopolitical situation stabilises.

Indian Economy

India retained its position as the worlds fastest-growing major economy in FY26, demonstrating resilience despite a challenging global environment characterised by persistent geopolitical tensions, evolving trade dynamics and uneven economic growth across regions. According to the Governments advance estimates, the economy expanded by 7.4% during the year, supported by robust domestic demand, sustained government capital expenditure and resilient manufacturing activity. Strong private consumption, infrastructure- led investments and healthy industrial output continued to underpin economic momentum, reinforcing the countrys macroeconomic stability.

Inflation remained well within the Reserve Bank of Indias target range throughout the year, creating favourable conditions for a calibrated easing of monetary policy. Moderating consumer price inflation enabled the Reserve Bank of India to lower policy interest rates while maintaining vigilance over food price volatility and underlying inflationary pressures. Strong GST collections, improving industrial production and stable urban and rural consumption reflected sustained economic activity, although enhancing employment quality and increasing labour force participation remain important structural priorities.

Indias external sector experienced heightened uncertainty during the year amid evolving global trade policies and tariff-related developments. Export- oriented industries experienced short-term pressure from policy and tariff changes in key markets. However, the subsequent resolution of trade negotiations and the easing of tariff barriers improved the outlook for exporters, supporting greater certainty for businesses and reinforcing confidence in Indias external trade prospects.

Outlook:

Indias medium-term growth outlook remains favourable, supported by resilient domestic demand, a stable inflation environment, accommodative monetary policy and the Governments continued emphasis on infrastructure development and structural reforms.

Ongoing investments in manufacturing, digitalisation and logistics are expected to further strengthen the countrys growth trajectory. While external risks including global trade developments, geopolitical uncertainties and potential inflationary pressures continue to warrant close monitoring, Indias strong macroeconomic fundamentals, expanding domestic market and improving investment climate position the economy to sustain healthy growth over the coming years.

THE AGROCHEMICAL INDUSTRY

Global Agrochemical Industry

The global agrochemical industry entered 2026 on a trajectory of steady, structurally-anchored expansion, with market valuations estimated between USD 250-300 billion depending on scope, and consensus forecasts pointing to a CAGR in the 4.5-5.5% range through the early 2030s.

This resilience is underpinned by an intensifying demographic imperative: the Food and Agriculture Organisation projects that global food production must rise by nearly 50% by 2050 to meet population growth and shifting dietary patterns, while annual crop losses attributable to pests, diseases, and abiotic stress already exceed 40% globally, translating into economic losses upward of USD 220 billion.

Fertilisers continue to command the dominant share of industry revenue, at roughly 47-77% depending on methodology, given their indispensable role in sustaining yields across cereal and grain systems, while crop protection chemicals and biological alternatives constitute the industrys higher-growth, higher-margin frontier.

Regionally, Asia-Pacific retains its position as the largest and fastest-scaling market, commanding over half of global revenue share, propelled by intensive cultivation practices, expanding arable utilisation, and rising farm mechanisation across China, India, and Southeast Asia. North America and Europe, by contrast, are witnessing more moderate, regulation-tempered growth, as stringent environmental frameworks including the European Unions near-zero-emission ambitions for ammonia-based fertiliser production recalibrate the competitive landscape in favour of low-residue, sustainability-compliant formulations.

Indian Agrochemical Industry

Indias agrochemical industry has consolidated its position as a strategically important and globally competitive manufacturing base, with market size estimated in the range of USD 9-9.6 billion in FY26, projected to expand at a CAGR of approximately 5.5-7.5?/o to reach USD 13-13.25 billion by 2031.

India has retained its standing as the worlds fourth-largest agrochemical producer and among the top three global exporters, with export realisations reaching approximately USD 3.3-5.5 billion annually, shipped to over 140-150 countries across Europe, Southeast Asia, and West Africa. This export orientation is structurally reinforced by Indias cost-competitive manufacturing base and its strategic focus on off-patent, generic active ingredients, a segment that constitutes nearly three-quarters of globally traded molecules.

Fertilisers continue to anchor domestic consumption, accounting for over half of market value, sustained by government procurement price floors and subsidy architecture that insulate farmer demand from commodity price volatility. Crop protection chemicals, while smaller in absolute base, represent the industrys fastest-growing vertical, with herbicides in particular gaining share as rural labour shortages accelerate mechanised weed management.

By product type, fertilizers captured 54.60/ of the India agrochemicals market share in 2025, while pesticides are on track to expand at a 10.12/ CAGR through 2031.

By application, grains and cereals accounted for 46.75/ of the India agrochemicals market size in 2025, whereas fruits and vegetables are projected to accelerate at an 8.78/ CAGR to 2031.

Source: https://www.mordorintelligence.com/industry-reports/india-agrochemicals-market

The industrys principal structural vulnerability lies in its raw-material dependence, with intermediates and selected technical-grade active ingredients sourced particularly from China. This dependency exposes domestic manufacturers to currency volatility, supply disruption, and margin compression from competitively priced Chinese imports. Nonetheless, government designation of agrochemicals as a priority sector for global manufacturing leadership, coupled with expanding backward- integration initiatives in clusters such as Gujarats Dahej, is progressively strengthening Indias self-reliance and long-term export competitiveness.

THE PIGMENT INDUSTRY

Global Pigment Industry

The global pigment industry is estimated at approximately USD 34-46 billion in 2026, with consensus forecasts projecting a CAGR in the range of 4.2-6.0% through the early 2030s. Inorganic pigments, led by titanium dioxide and iron-oxide compounds, continue to command the dominant share of global volume, on account of their superior opacity, weathering resistance, and cost-effectiveness in large-scale applications such as architectural coatings.

Future Outlook:

The global pigment industry is expected to sustain moderate, structurally-anchored growth through the early 2030s, with total market value forecast to approach USD 4252 billion by 2031-2032. Growth will increasingly be driven by specialty and high-performance pigments including

Organic pigments, though smaller in absolute base, are advancing at a comparatively faster clip, propelled by regulatory-driven substitution away from heavy-metal-based colourants and rising demand for vibrant, nontoxic formulations across packaging, plastics, and consumer goods.

The industry is observing bifurcated transition as mature markets like North America and Europe are rationalising legacy titanium dioxide capacity amid anti-dumping duties, tightening nanomaterial regulation, and raw- infrared-reflective, thermochromic, and effect pigments rather than by commodity-grade volume expansion, as mature markets prioritise premiumisation and emerging markets scale baseline infrastructure-linked demand. material cost volatility, while migrating toward higher-value specialty and effect pigments.

Asia-Paciflc, by contrast, retains its position as the largest and fastest-growing regional market, commanding over 45% of global revenue, underpinned by sustained infrastructure expansion, rising automotive production, and an expanding manufacturing base across China, India, and Southeast Asia.

Continued regulatory tightening is expected to further compress the addressable market for legacy heavy- metal pigments, creating durable tailwinds for organic and bio-based substitutes, while Asia-Paciflc is set to retain its position as the primary engine of incremental global demand.

Indian Pigment Industry

Indias pigment industry is estimated at approximately USD 2.75-3.2 billion in FY26, with forecasts pointing to a CAGR in the range of 6.9-8.5% through 2031-2034, reaching an estimated USD 5.9-7.5 billion over the forecast horizon. Growth is anchored primarily in the paints and coatings sector, which constitutes the largest end-use application, supported by robust residential construction activity, an expanding automotive manufacturing base, and continued urban infrastructure development.

Organic pigments dominate domestic production, accounting for over half of total output, reflecting both regulatory preference for non-toxic colourants and rising demand from export- oriented industries.

The industry benefits from a structurally favourable manufacturing base, with Gujarat serving as the principal production hub, housing the majority of the countrys dye and pigment intermediate capacity. Indias position as a cost-competitive manufacturing alternative has been further reinforced by the diversification of global buyers away from Chinese suppliers, coupled with targeted anti-dumping duties imposed on Chinese-origin pigments to protect domestic manufacturers. The countrys cost-competitive process chemistry base and the diversification of global sourcing strategies create opportunities for Indian manufacturers that can deliver consistent quality, regulatory compliance and reliable supply.

Future Outlook:

Indias pigment industry is well positioned to sustain aboveglobal-average growth through the early 2030s, supported by robust infrastructure, a maturing domestic automotive sector, and structurally rising export competitiveness. As global buyers continue to diversify sourcing away from China, Indian manufacturers are likely to capture a disproportionate share of incremental international demand, provided continued investment in sustainable, REACH-compliant production capabilities.

The sectors growth trajectory will increasingly hinge on its ability to scale specialty and high-performance pigment capabilities, reducing dependence on commodity-grade segments and strengthening margin resilience against import competition and raw-material volatility. While the outlook is positive, the industry faces environmental regulations, raw material price volatility and global competition.

COMPANY OVERVIEW

Incorporated In 1986, Meghmani Organics Limited Is a diversified chemicals company with four decades of experience in manufacturing and supplying high-quality products to domestic and International markets. The Company operates across three business verticals: Crop Protection, Crop Nutrition, and Pigments — serving a broad spectrum of agricultural and industrial applications, supported by an integrated manufacturing network comprising strategically located production facilities.

The Companys extensive manufacturing capabilities are complemented by a robust global distribution network spanning more than 75 countries and a wide domestic reach through an established distributor base across India. With over

890 product registrations supporting its Crop Protection business, the Company serves a diverse customer base across multiple geographies while maintaining a strong focus on regulatory compliance, product stewardship and customer-centric innovation.

Sustainability, operational efficiency and responsible manufacturing remain integral to the Companys long-term growth strategy. Its Crop Protection business has been accredited with the Responsible Care?, reflecting its commitment to environmental protection, process safety and responsible operations. The Company also achieved a significant milestone by being elevated from the EcoVadis Committed Badge to the EcoVadis Silver Medal, reflecting our continued progress in environmental stewardship, responsible sourcing, ethical business practices, and sustainable operations. Leveraging its integrated business model, manufacturing expertise and expanding global footprint, the Company continues to strengthen its position as a trusted partner to customers while pursuing sustainable and profitable growth.

Business Overview And Performance

The Companys diversified business portfolio spans crop protection, crop nutrition and pigments, enabling it to address the evolving requirements of the agricultural and industrial sectors. Through continuous innovation and process excellence, it delivers solutions that enhance productivity, quality and long-term customer value.

Crop Protection

An established name in the crop protection sector, the Company offers a comprehensive product portfolio including insecticides, herbicides, and intermediates, used in diverse sectors such as crop protection, veterinary health, household pest control, and public health initiatives.

PRODUCT RANGE:

Insecticides
• Acetamiprid	• Fipronil
• Alphacypermethrin	• Flonicamid
• Bifenthrin	• Flubendiamide
• Betacyfluthrin	• Lambdacyhalothrin
• Cyfluthrin	• Permethrin
• Cypermethrin	• Profenofos
• Deltamethrin	• Pymetrozine
• Dinotefuran	• Pyriproxyfen
• Ethiprole	• Spiromesifen

Herbicides

• 2,4 D Add, Amine, Esters

• Triclopyr

Intermediates

• Cypermethric Acid Chloride

• Larnbdacyhalothric Acid (TFP Acid)

• Pyrazole

• High Cis/Trans CMAC

• Meta Phenoxy Benzaldehyde

• Spiromesifen Acid

Crop Nutrition

Meghmani Crop Nutrition Limited (MCNL), a wholly owned subsidiary of Meghmani Organics Limited, is focused on delivering advanced crop nutrition solutions that support sustainable agriculture and improved farm productivity. The Company has entered into a strategic technology collaboration with the Indian Farmers Fertiliser Cooperative Limited (IFFCO) to manufacture Nano Urea using

IFFCOs proprietary nano technology, enabling the introduction of next- generation nutrient solutions that enhance nutrient-use efficiency.

In addition to Nano Urea, MCNL has strengthened its product portfolio with the introduction of several offerings across biofertilizers, biostimulants and micronutrients. Designed to address the diverse nutritional requirements of crops at different growth stages, these solutions provide farmers with a comprehensive crop nutrition portfolio while promoting balanced plant health and improved agricultural outcomes.

Pigment

The Company is among the leading manufacturers of phthalocyanine pigments, serving customers across the global with an 8% global market share. With three strategically located manufacturing facilities and an international distribution presence, the Company has built a strong global footprint. The Companys range of copper phthalocyanine-based blue and green pigments caters to diverse applications across the printing inks, paints, coatings and plastics sectors.

Kilburn Chemicals Limited (KCL),

a wholly owned subsidiary of the Company, operates primarily in the manufacture of Titanium Dioxide (TO2), a widely used white pigment prized for its brightness and UV-absorbing qualities. It is applied across paints & coatings, plastics, paper, ceramic, rubber, and textile.

The pigment is inert, thermally stable, non-flammable, and non-toxic, and is manufactured mainly in its Rutile and Anatase forms, using ilmenite ore (largely derived from beach sand mineral deposits) and sulphuric acid as key raw materials. The Companys foray into Ti02 is aligned its broader strategic vision of scaling up its pigment business over the long term.

Financial Performance

The Companys financial performance during the year under review reflects the combined impact of its business segments, operating efficiencies, and the prevailing market environment. During FY 25-26, the Company recorded steady improvement across key financial parameters, EBITDA, and profitability metrics showing meaningful year-on-year growth, driven by improved product mix and better cost management.

The following table summarises the key financial highlights for the year, along with a comparative analysis against the preceding fiscal year.

RATIO	31st MARCH 2026	31st MARCH 2025	% CHANGE	REASON FOR VARIANCE ABOVE 25% YEAR ON YEAR
Debt-Equity Ratio	0.30	0.35	-14.14%	No major variance
Debt Service Coverage Ratio	0.47	0.36	28.34%	There is an increase in Debt service coverage ratio due to increase in profitability.
Return on Equity Ratio	7.39%	4.16%	77.83%	There is a increase in return on equity ratio on account of increase in Net profit for the year.
Inventory Turnover Ratio	3.95	3.86	2.12%	No major variance
Trade Receivables Turnover Ratio	3.55	4.17	-15.00%	No major variance
Trade Payables Turnover Ratio	2.62	2.87	-8.61%	No major variance
Net Capital Turnover Ratio	15.77	14.93	5.65%	No major variance
Return on Capital Employed	8.48%	5.19%	63.59%	There is an increase in return on capital employed on account of increase in Net profit for the year.
Return on Investment	1.17%	1.21%	-2.93%	No major variance

 

PARTICULARS	FY 2025-26 (W in Crore)	FY 2024-25 (W in Crore)	YoY (in %)
Net Sales	2,091.8	2,003.9	4%
EBITDA	228.7	180.3	27%
PBT	161.6	84.9	90%
PAT	125.3	66.4	89%

Internal Control Systems

The Company maintains an adequate system of internal controls designed to safeguard assets, ensure compliance with applicable laws and regulations, maintain financial discipline, and support operational efficiency. Internal control mechanisms are periodically reviewed and strengthened to align with the evolving scale and complexity of operations. The Company also undertakes regular audits and management reviews to ensure adherence to established policies and procedures.

Particular attention is given to controls over financial reporting, ensuring the accuracy, completeness and reliability of financial data. These controls play a critical role in the Companys overall governance and compliance mechanisms.

Risk Management And Mitigation

The Company follows prudent risk identification, assessment, and mitigation frameworks as an inherent part of its operations. Given the inherent cyclicality and regulatory complexity of the Crop Protection, Crop Nutrition and pigment industries, the Company has identified the following key risks and corresponding mitigation strategies to safeguard operational continuity and financial stability.

Risk Category	Description	Potential Impact	Mitigation Strategy
Supply Chain Disruption	Reliance on internationally sourced raw materials creating supply chain vulnerability and currency-linked cost volatility	Production delays, inventory shortfalls, inability to meet seasonal (Kharif/ Rabi) or customer delivery timelines	Diversifying supplier base across geographies; backward integration into critical intermediates and feedstocks
Price Volatility	Fluctuations driven by global commodity cycles and currency movements	Margin compression, unpredictable cost of production, and difficulty sustaining stable pricing to farmers/customers	Portfolio migration towards differentiated formulations and value-added offerings; efficiency-led cost optimisation
Environmental Regulations	Tightening global and domestic norms on pesticide residues, effluent discharge, hazardous waste, and chemical safety (REACH, TSCA, state-level toxicity bans, pollution control board requirements)	Higher compliance costs, risk of production disruption, penalties, or loss of market access, particularly in regulated export markets	Continuous investment in effluent treatment and waste management; proactive certification and compliance; adoption of cleaner, low-residue production technologies; regular environmental audits
Competition	Intense competition from low- cost Chinese producers in both generic agrochemicals and commodity-grade pigments, alongside global players with larger scale and R&D budgets	Pricing pressure, margin erosion, and potential loss of share in price-sensitive crop protection, crop nutrition, and pigment segments	Differentiation through specialty/high-value products; strengthening long-term customer and distributor relationships; targeted R&D investment; disciplined cost management
Financial Credibility & Liquidity Risk	Working capital intensity from seasonal demand cycles and extended receivables	Strain on cash fiows, higher finance costs, and reduced financial flexibility for growth investments	Prudent working capital management and receivables monitoring; maintaining adequate credit lines and liquidity buffers; disciplined capital allocation; strengthening balance sheet through deleveraging and diversified funding sources

Human Capital

The Companys people remain central to its ability to deliver sustainable growth and create enduring value.

The Company continues to invest in talent development, technical training, leadership capability enhancement, and workplace safety. The Companys execution excellence is supported by a highly skilled workforce possessing

Forward-Looking Statement

Certain statements in this Management Discussion and Analysis describing the Companys objectives, projections, expectations, estimates, and predictions may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various risks and uncertainties. A number of assumptions regarding the Companys operations, external factors, and third-party sources are considered. deep domain expertise across engineering, project management, construction, commissioning, operations, and maintenance activities. Continuous learning and capability enhancement remain key priorities as the Company expands into newer technologies and higher- voltage infrastructure segments.

Both known and unknown risks and uncertainties are included, which could result in actual results that are materially different from those anticipated by the relevant forwardlooking statements.

It is pertinent to note that any forward-looking comments in the Management Discussion and Analysis about previous patterns or actions do not imply that they will persist in the future. Any forwardlooking statements made, whether

As of March 31, 2026, MOLs workforce stands at 1,154 permanent employees, reflecting its success in building a resilient and future-ready team. in response to new information, anticipated events, or otherwise, are not subject to correction or revision.

It is not advisable to overly depend on forward-looking statements, as they are only indicative as of the Annual Reports publication date.

The Company undertakes no obligation to publicly update or revise any forward-looking statements based on subsequent developments or events.