Multibase India Ltd Management Discussions

The global economy remained resilient during FY 2025-26 despite geopolitical uncertainties, evolving trade dynamics, and inflationary pressures. India continued to be among the fastest-growing major economies, supported by strong domestic demand, infrastructure spending, policy reforms, and growing manufacturing activity. The IMF projects Indias GDP growth at around 6.5%, reinforcing the countrys position as a key driver of global economic growth.

The Governments continued focus on manufacturing, infrastructure development, and initiatives such as Make in India and Production Linked Incentive (PLI) schemes is creating a favorable environment for industrial growth. Increasing adoption of advanced technologies, sustainability initiatives, and supply chain localization is further supporting demand across industrial sectors.

The specialty chemicals and performance materials industry continue to benefit from growing demand from Indian automotive (worlds 4^th largest producer), electronics, consumer goods, and industrial applications. Trends such as vehicle electrification (EV), lightweighting, enhanced safety requirements, and demand for high-performance materials are driving the need for innovative polymer and silicone-based solutions.

Multibase India Limited (MBIL) continues to strengthen its position in Silicone Masterbatches (SiMB) for scratch resistance and surface modification, Thermoplastic elastomers (TPEs)/TPO for automotive airbag safety systems and Silicone Vulcanized Elastomers (TPSiV) that delivered soft-touch and premium feel for use in mobile phones and consumer electronics. The Companys products enhance performance, durability, aesthetics, and processing efficiency across diverse applications. Supported by technological expertise, innovation, and customer-focused solutions, the Company remains well positioned to capitalize on emerging opportunities while navigating challenges arising from raw material volatility, global market uncertainties, and increasing competition.

Looking ahead, the Company remains optimistic about longterm growth prospects driven by expanding manufacturing activity, increasing demand for specialty materials, and the growing adoption of value-added and sustainable solutions across key end-use industries.

The Company operates across the Automotive, Consumer & Industrial, and Thermoplastic Additives segments, with its customer base largely concentrated in India.

During the year under review, the Company reported gross revenue from operations of INR 6,657.04 Lacs, as against INR 7,074.87 Lacs in FY 2024-25. Profit before tax stood at INR 1393.80 Lacs and profit after tax at INR 1,042.75 Lacs, compared with INR 1,969.39 Lacs and INR 1,465.49 Lacs, respectively, in the previous financial year.

Revenue from operations decreased by 5.91% compared with the previous year, primarily due to lower sales of Silicone Masterbatch products and a shift in the customer base.

During the year under review, the Company successfully commenced production of its second traded product at the plant under the traded product localisation project. This initiative marks an important step in strengthening local manufacturing capability and reducing dependence on traded products. However, the benefit of localisation did not translate into margin improvement during the year, as a sudden increase in raw material costs led to a reduction in gross margin to 35.80%, compared with 37.90% in the previous year.

The Companys Interest income from fixed deposits stood at INR 274.46 Lacs during the year, compared with INR 499.80 Lacs in the previous year. The reduction was mainly due to lower fixed deposit balances during the year, following the significant dividend payout made in the previous financial year.

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector-specific financial ratios.

The Company has identified the following ratios as key financial ratios:

None of the key financial ratios disclosed above has witnessed a variation of 25% or more compared to the previous financial year. Accordingly, no additional explanation is required in terms of SEBI (LODR) Regulations.

Leveraging expansion of MBIL local manufacturing capabilities at the Daman facility for new business acquisition from automotive OEMs for MultiflexTM airbag safety & MultibaseTM SiMB grades application.

Locally manufactured MultibaseTM SiMB grades further being penetrated into Industrial customers from Wire & Cable, BOPP and packaging segment for superior product output.

With expansion of global consumer Electronics goods manufacturing in India, opportunity to expand Silicone Vulcanized Elastomers (TPSiV) product line with them.

Continued dependence on imported specialty raw materials, owing to limited local availability, can result in higher logistics costs, import duties, and supply chain disruptions.

Volatility in crude oil-linked raw material prices and fluctuations in foreign exchange (FOREX) rates may impact input costs and margins.

Geopolitical uncertainties, evolving trade regulations, and supply chain disruptions may affect global demand patterns and procurement efficiencies.

Increasing competition from domestic and international specialty material suppliers may exert pressure on pricing and market share.

The Industrial relations with workmen during the year were cordial. The Directors place on record their appreciation for the sincere and efficient services rendered by the executives, staff and workmen of the Company and are confident that they will continue to contribute to the Companys prosperity and growth.

The Company has put in place an adequate system of internal control measures in all risk areas, implemented by the management, towards achieving efficiency in operations, optimum utilization of resources and effective monitoring thereof and compliance with applicable laws.

The directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.

These measures are in the form of procedures/ processes set by the management covering all critical and important areas. These controls are periodically updated and are subject to review by internal auditors. Internal audit function has been outsourced to independent firm of Chartered Accountants who submit quarterly reports to the Board. The Audit Committee reviews the report of the Internal Auditors and recommends steps to be taken to improve internal controls if any.

This section of the Annual Report has been included in adherence to the spirit enunciated in the Code of Corporate Governance approved by the Securities and Exchange Board of India. Shareholders and Readers are cautioned that in the case of data and information external to the Company, though the same are based on sources believed to be reliable, no representation is made on its accuracy or comprehensiveness.

Further, utmost care has been taken to ensure that the opinion expressed therein contain its perceptions on most of the important trends having a material impact on the Companys operations.

The opinions expressed by the management may contain certain forward-looking statements based on current assumptions and expectations. Actual results may differ materially due to various factors including economic conditions, government policies, regulatory developments, market conditions, customer demand, competition, foreign exchange fluctuations, raw materials and input cost movements, supply chain disruptions, and other risks and uncertainties. The Company undertakes no obligation to publicly update or revise any forward-looking statements contained in this report, whether as a result of new information, future events, or otherwise, except as required under applicable law.