NACL Industries Ltd Management Discussions

Global Economic Landscape:

The global economy in FY 2024-25 continued its gradual postpandemic recovery but witnessed a phase of pronounced moderation, with growth projections ranging between 2.3% and 3.2%. This marks a clear deceleration from the pre-pandemic average of 3.8% (2000-2019) and approaches levels typically associated with recessionary conditions. According to the IMFs World Economic Outlook updates, global GDP is estimated to expand by 3.1% in 2024 and 3.2% in 2025, reflecting persistent inflationary pressures, tighter financial conditions, and ongoing geopolitical frictions.

Advanced economies recorded subdued growth, constrained by weak manufacturing output, elevated price pressures, and geopolitical uncertainties. The United States is projected to grow by 2.1% in 2024 and 1.9% in 2025, supported by strong labour markets and resilient consumption. The Euro area, after posting modest growth of 0.9% in 2024, is anticipated to improve to 1.7% in 2025 aided by easing inflation and recovering household demand. Emerging market and developing economies exhibited a mixed trajectory. Chinas outlook for 2025 was revised upward to 4.8%, supported by stronger-than-expected first-half performance and a significant reduction in US-China tariffs. India continued to stand out as a global growth leader, projected to achieve a robust 6.5% in 2025, driven by resilient domestic consumption, structural reforms, and rapid digital adoption.

Globally, inflation is projected to ease from 6.8% in 2023 to 5.8% in 2024 and further to 4.4% in 2025, reflecting the unwinding of supply chain disruptions and tighter monetary policy. However, services inflation and tariff pass-through effects remain elevated in several economies. Financial markets remained volatile during the year, shaped by monetary policy divergence, geopolitical developments, and uneven recovery in trade flows following earlier front-loading of shipments ahead of tariff hikes.

Commodity markets, particularly in the agricultural sector, saw crop prices begin to stabilize by mid-2025 after sharp volatility in preceding years. Nonetheless, they remain vulnerable to climate shocks, geopolitical instability, and policy interventions, underscoring the fragility of global supply chains. Simultaneously, rapid technological advances in artificial intelligence, automation, and digitalization are reshaping industrial productivity worldwide, creating opportunities for innovation while also posing challenges for workforce reskilling, regulatory alignment, and cybersecurity resilience.

The recovery path remains fragile, with risks tilted to the downside owing to protracted geopolitical tensions, restrictive monetary policies, and subdued productivity growth. Policymakers and businesses must therefore prioritize resilience, structural reforms, and strategic agility to sustain growth momentum and navigate uncertainties.

Key Global Indicators:

Indicator	2023 (Actual)	2024 (Forecast)	2025 (Forecast)
Global GDP Growth	3.0%	3.1%	3.2%
Advanced Economies GDP Growth	1.6%	1.7%	1.8%
Emerging & Developing Economies GDP Growth	4.3%	4.2%	4.2%
Euro Area GDP Growth	0.5 - 0.7%	0.9%	1.7%
Global Inflation	6.8%	5.8%	4.4%

Global GDP Growth Projections (2024-2026):

Year	Global (%)	United States (%)	Eurozone (%)	China (%)	India (%)
2024	3.2	2.1	1.3	4.5	6.3
2025	3.0	1.9	0.9	4.8	6.5
2026	3.1	2.0	1.2	4.2	6.0

Sources: International Monetary Fund (World Economic Outlook Update - Jan 2024, Apr 2025, Jul 2025), World Bank - Global Economic Prospects (Jan 2024), United Nations, OECD, Reuters (IMF growth and inflation outlook coverage, Jan 2024).

Indian Economic Landscape:

Indias economy continued to demonstrate strong resilience and above-global-average growth through FY 2024-25, consolidating its position as the worlds fifth-largest economy. Real GDP growth stood at 8.2% in FY 2023-24, supported by buoyant domestic consumption, robust capital expenditure, and healthy momentum in both manufacturing (+9.9%) and services activity. Advance estimates from the Ministry of Statistics indicate a moderation in growth to 6.4% in FY 2024-25, with nominal GDP projected to expand by 9.7%, reaching an estimated Rs324.1 lakh crore in output. This trajectory is broadly consistent with the Reserve Bank of India (RBI) and professional forecasts, which place Indias real GDP growth in the 6.5-7.0% range. The IMFs April 2025 World Economic Outlook projects growth at 6.8% for FY 2024-25 and 6.5% in FY 2025-26, underscoring Indias continued role as a key driver of global economic momentum.

Inflationary pressures eased during the year. CPI inflation declined from 6.7% in FY 2023-24 to 5.4% in FY 2024-25, supported by moderating food and fuel prices. The RBI maintained the policy repo rate at 6.5% with a neutral stance, balancing growth and inflation objectives amid a still-evolving global environment. Indias external sector remained stable. The trade deficit narrowed, and the current account deficit (CAD) stood at ~0.7% of GDP in FY 2023-24 before easing further to ~0.6% in FY 2024-25, aided by robust services exports and sustained remittance inflows. This improvement helped strengthen Indias external resilience despite persistent global trade headwinds.

On the fiscal front, the Union Budget under the Amrit Kaal vision emphasized inclusive and sustainable development through the Saptarishi framework, prioritizing investments in social infrastructure, agricultural modernization, digital public goods, and startups. Despite continued high infrastructure spending, the fiscal deficit moderated to 5.63% of GDP in FY 2023-24, slightly better than the 5.8% target, reflecting prudent fiscal management.

Overall, Indias macroeconomic performance in FY 2024-25 highlights a stable and resilient trajectory, underpinned by domestic demand, strong external balances, and sustained fiscal support. These dynamics create a favourable environment for industries, including the crop protection sector, to navigate uncertainties and align growth ambitions with the countrys structural transformation.

Key Global Indicators:

Indicator	FY 2023-24	FY 2024-25 (Est.)
Real GDP Growth	8.2%	6.4%
Nominal GDP Growth	9.6%	9.7%
Nominal GDP lakh crore)	295.6	324.1
CPI Inflation	6.7%	5.4%
Current Account Deficit	0.7% of GDP	0.6% of GDP
Repo Rate	6.5%	6.5% (steady)
Projected Real GDP Growth (RBI)	-	7.0%
Projected Real GDP Growth (IMF - WEO)	-	6.8% (FY 2024-25), 6.5% (FY 2025-26)

Sources: Ministry of Finance, Press Information Bureau (PIB), Ministry of Statistics & Programme Implementation (MoSPI), Reserve Bank of India (Monetary Policy Report, April 2025), International Monetary Fund - World Economic Outlook (April 2025), EY Economy Watch (April 2025), Reuters.

Global Agriculture Landscape:

The global agriculture sector continued strong momentum in FY 2024-25, expanding from USD 14.36 trillion in 2024 to USD

15.5 trillion in 2025, reflecting a CAGR of 7.9%. This growth was driven by rising global food demand, shaped by population growth projected to reach 10 billion by 2050, changing dietary preferences toward healthier and diverse foods, and the growing adoption of sustainable farming practices. The sector is expected to reach USD 20.63 trillion by 2029 at a CAGR of 7.4%, supported by technological innovation, precision agriculture, and digital integration.

Global crop production reached record highs during the year. Cereal output stood at nearly 2.9 billion tonnes, a 2-3% increase from recent years, with India recording a historic wheat output of 114 million tonnes. Maize and rice production rose to 1.26 billion tonnes and over 555 million tonnes, respectively, led by Brazil, India, and other major producers. Soybean and sugarcane production also increased, reflecting improved yields, expanded acreage, and favourable climatic conditions despite challenges such as climate variability, rising input costs, and geopolitical tensions.

Yet, food security remains a critical global challenge. Over 9% of the worlds population was undernourished between 2019 and 2023, and the number of chronically undernourished is projected to exceed 582 million by 2030, largely in Africa. Food insecurity also affects urban populations, where reduced access to fresh produce, growing dependence on processed foods, and marginalization of smallholder farmers exacerbate vulnerabilities. These dynamics underscore the urgency of developing resilient, inclusive, and sustainable food systems.

Technological transformation is reshaping agriculture worldwide. Precision farming, agricultural drones, Al-driven tools, robotics, and digital farm management platforms are revolutionizing productivity and sustainability. For instance, Chinas XAG launched the P100 Pro drone in 2023, with a 50 kg payload capacity for autonomous seeding, fertilization, and spraying-demonstrating the scale of AgriTech adoption. Global investments in agricultural technology surpassed USD 60 billion in 2023, with a focus on climate-smart and sustainability-linked solutions.

Key Market & Technology Dynamics:

• Precision Farming - Valued at USD 9.7 billion in 2023, projected to reach USD 21.9 billion by 2031, growing at a CAGR of ~14%.

• Precision Agriculture Software - Expected to expand from USD 1.7 billion in 2024 to USD 3.1 billion by 2029, with a CAGR of ~12.5%.

• Agriculture 4.0 - Estimated at USD 67.2 billion in 2023, likely to grow to USD 74.2 billion in 2024 and further at ~11-11.6% CAGR through 2030.

• AgriTech Investments - Sustained inflows exceeding USD 60 billion, with strong focus on climate-smart and sustainable technologies.

• Farm Adoption - Over 60% of global farms expected to be using AgriTech solutions by 2024, reflecting strong acceleration in digital adoption.

Key Trends & Insights:

• Technology-Led Growth: loT, AI, drones, and digital systems are increasingly embedded into farming, enabling productivity gains and resource optimization.

• Climate-Driven Pressures: Extreme weather events continue to disrupt productivity, with significant impacts on wheat, corn, soy, rice, and cotton markets.

• Regenerative Farming: Practices such as cover cropping, organic matter enrichment, and reduced tillage are gaining traction, supported by policies in the EU, India, and other regions.

• Regional Divergence: Asia-Pacific remains the largest agricultural market, followed by North America, though technology adoption and productivity improvements remain uneven across geographies.

• Sustainability Imperative: Increasing alignment of global sourcing and supply chains with regenerative and carbon- resilient practices is reshaping sector strategies.

Strategic Implications:

• Scalability & Investment: The rapid scaling of AgriTech requires sustained investments across hardware, software, and services.

• Climate Resilience: Building climate adaptation and regenerative practices into agricultural systems is essential for long-term productivity.

• Policy & Regional Gaps: Technology adoption remains uneven; targeted support is critical for bridging productivity divides.

• Business Alignment: Companies must align sourcing, supplier partnerships, and innovation strategies with sustainable, carbon-resilient practices.

The global agriculture sector is undergoing a fundamental transformation, balancing rising food demand, sustainability imperatives, and technological disruption. With markets for Agriculture 4.0 and precision tools expanding rapidly and investments flowing into climate-smart solutions, the sector is better positioned to meet future challenges—though risks remain unevenly distributed.

Sources: The Business Research Company - Global Agriculture Market Report 2025; OECD-FAO Agricultural Outlook2024-2027; International Food Information Council - Food and Health Survey 2022; IMF World Economic Outlook 2025; XAG Company Release (July 2023); Markets and Markets; PR Newswire; SNS Insider; Farmount ?; Reuters; World Bank; FAO; Economic Times.

Indian Agriculture Landscape:

Agriculture remains a cornerstone of Indias economy, contributing approximately 16% to GDP and supporting nearly 46% of the population. In FY 2024-25, the sector demonstrated strong resilience with 4.6% annual growth, accelerating to 5.4% in Q4, aided by a favourable monsoon, record foodgrain production, and sustained policy support. Foodgrain output reached an all-time high of 353.95 million tonnes, led by rice (+8.2%) and wheat (+1.3%), while oilseeds and maize also posted significant gains. Allied sectors such as fisheries and livestock emerged as major growth drivers, recording CAGRs of 13.67% and 12.99%, respectively, underscoring their rising role in rural incomes and nutrition security. Over the past five years, agriculture and allied activities have grown at an average of 4.2-5%, though FY 2023-24 saw a slowdown with GVA growth dipping to a seven-year low of 1.4% due to uneven monsoon patterns, rural income pressures, and elevated inflation.

The Government of India reinforced its focus on farm sector resilience, price assurance, and modernization through several measures. The Union Budget for FY 2024-25 raised allocation for agriculture and allied sectors to Rs1.75 lakh crore, the largest increase in six years (+15%), with emphasis on natural farming, digital agriculture, and irrigation expansion. Minimum Support Prices (MSP) were raised sharply—59% for arhar, 77% for bajra, 89% for masur, and 98% for rapeseed—to ensure farmer profitability and incentivize production. PM-KISAN continued to extend direct income support to over 11 crore farmers, strengthening rural household consumption. Major flagship schemes included the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) for expanding irrigation coverage, the Digital Agriculture Mission with a funding outlay of Rs2,817 crore driving initiatives such as AgriStack, soil mapping, and decision-support systems, and the Soil Health Card Scheme under which more than 53 lakh cards were issued in FY 202425. In addition, e-NAM integrated 1.78 crore farmers and 1,410 mandis, facilitating agri-trade worth approximately Rs4 lakh crore. The Natural Farming Mission was allocated Rs2,481 crore to promote climate-resilient practices, while the newly launched Dhan-Dhaanya Krishi Yojana earmarked Rs24,000 crore annually to 100 districts for sustainable and inclusive development.

Despite headwinds, Indias robust production supported a 9% increase in agricultural exports in FY 2023-24, led by demand from the Middle East, Southeast Asia, and Africa. However, food inflation remains a persistent policy challenge, with rural inflation peaking at 5.7% in June 2023 and food inflation surging to 9%, largely driven by supply-chain inefficiencies and commodity price volatility. On the structural side, AgriTech adoption accelerated significantly, with over 35% growth in mobile-based farming platforms during 2023, enhancing yield optimization and farmer decision-making. Digital penetration through platforms such as e-NAM and Soil Health Cards is fostering a unified agri-market and more scientific input usage, while the policy thrust on micro-irrigation, precision farming, and climate-smart agriculture is steadily strengthening the sectors long-term sustainability.

Given the short-term challenges such as fragmented landholdings, climate variability, and post-harvest losses persist, Indias agriculture sector is structurally strengthening through higher public investment, digital adoption, and climate-smart policies. With record foodgrain production, rising allied sector contribution, and strong export momentum, the sector is well-positioned to drive rural transformation, enhance farmer incomes, and contribute meaningfully to Indias long-term growth trajectory. For NACL Industries, aligning strategies with government priorities in irrigation, agri-services, supply chains, and sustainable inputs offers significant scope for value creation.

Sources: Business Standard - Agriculture Grows 4.6% in FY25; Firstpost - Economic Survey 2025 Highlights; Reuters - FY26 Agriculture Budget Hike; PIB - Foodgrain Output & PM-KISAN Coverage; Farmonaut - Indian Agriculture Sector Overview 2025; Jagran Josh - Sector-wise Economic Survey Analysis; Krishi Ujala - Agriculture Budget and Policy Reforms; NDTV / PIB - Union Budget Allocations & Schemes; Down To Earth - GVA Growth & Inflation Trends; Customs Data - Agri-export Performance

Global Agrochemical Market Overview:

Global Agrochemicals Sector - Snapshot:

Herbicides are the dominant category, fungicides are showing the highest growth momentum, and insecticides continue to expand on the back of pest evolution and climate variability. Technological adoption, including precision agriculture, drone-based spraying, AI- powered diagnostics, and digital farming platforms, is reinforcing demand for efficient and tailored agrochemical usage across regions.

The market is undergoing a structural transition as biologicals, ecofriendly formulations, and sustainable chemistries gain traction, supported by regulatory reforms, consumer preference for organic produce, and environmental imperatives. Developed markets like North America and Europe are at the forefront of adopting biopesticides, precision application, and carbon-efficient solutions. At the same time, Asia-Pacific dominates global demand with over one-third of the market share, led by China, India, and Japan, while Latin America continues to expand rapidly through agricultural intensification.

Despite the optimistic outlook, the industry faces regulatory hurdles, pest resistance, and ecological concerns around synthetic pesticide use. Product approval delays and stringent compliance regimes are pushing companies to diversify toward bio-based and integrated pest management solutions. To address these challenges, leading players are investing in biologicals, digital farming, and carbon- efficient R&D pipelines, while pursuing strategic mergers and acquisitions to strengthen portfolios.

Looking ahead, the global agrochemical sector stands at a pivotal transition point-balancing the scale and reliability of traditional inputs with innovation in sustainable, high-tech, and environmentally conscious solutions. With the UN projecting the global population to reach 9.7 billion by 2050, necessitating a 70% increase in food production, agrochemicals will remain central to global food security.

NACL Industries is well-positioned to benefit from this evolution, leveraging R&D, regulatory alignment, and emerging-market opportunities to expand its footprint in a transforming global landscape.

Sources: Grand View Research - Global agrochemicals market size & outlook (2023 base, 2030 projections, CAGR 5.3%); Global Market Insights Inc., MENAFN - Crop protection chemicals fundamentals (USD 91.4 B in 2023, CAGR 4.2%); SNS Insider - Alternate crop protection outlook (USD 64.6 B ^ USD 102.3 B, CAGR 5.3%); MARC Group, CropLife, GlobeNewswire - Sustainable chemistry & regional trends; Mordor Intelligence; The Business Research Company; GII Research; Research and Markets; Coherent Market Insights; Precedence Research; Straits Research; Technavio; AgroPages; Kline Group; Cognitive Market Research

Indian Crop Protection Overview:

The Indian crop protection sector demonstrated strong resilience in FY 2024, with the market valued at ~USD 8.1 billion, growing at ~9 % CAGAR between FY 21-24. Domestic market contributes to ~49% and Export market contributes ~51% of total ~ USD 8.1 billion market size. This performance stands out against a 22% export volume dip in FY 2024, caused by global inventory destocking, subdued international demand, and aggressive pricing from China. India remains a pivotal global player-ranking among the top four crop protection chemica producers and emerging as the second- largest exporter worldwide. The country benefits from its cost- competitive manufacturing base, strong formulation capabilities, and expanding agricultural technology adoption.

The domestic market is expected to expand to USD 11.3 billion by FY 2027-28, implying a CAGR of ~9%. Growth will be driven by expanding domestic consumption, rising adoption of precision farming, drone spraying, biotechnology, and the increasing penetration of bio-based and sustainable crop protection chemicals. Crop protection chemicals usage in India remains significantly below global averages-~0.27-0.6 kg per hectare, compared with the Asian average of 3.6 kg/ha and the global average of 2.4 kg/ ha-highlighting vast untapped potential for yield optimization.

Indias exports have grown at a ~9% CAGR between FY 2021-24. Herbicides lead this momentum, expanding at a 20-23% CAGR and increasing their share of total exports from 31% to 37%. Key destinations include the United States, Brazil, Japan, Vietnam, and Indonesia, which collectively account for a majority of outbound volumes. Although exports fell sharply in FY 2024 due to global corrections, the long-term trajectory remains positive as supply chains stabilize and international demand revives. Rising labor costs in overseas markets are also creating tailwinds for Indias herbicide exports.

The sector is supported by proactive policy measures such as Make in India, Production-Linked Incentives (PLI), and Atmanirbhar Bharat, which encourage domestic production, backward integration, and innovation. Industry-academia collaborations are driving new molecule registrations and smart farming technologies, while digitization and e-commerce platforms are enhancing access to inputs for small and medium farmers. Furthermore, Indias emphasis on digital agriculture, carbon-efficient R&D, and bio-based formulations positions the industry at the forefront of sustainable transformation.

Despite strong fundamentals, challenges persist. These include Regulatory complexity and long approval timelines for new products; Raw material price volatility and logistics bottlenecks and Intense competition from low-cost Chinese imports. Indian manufacturers are responding with cost efficiencies, product diversification, and export market realignment to sustain competitiveness.

Indian Agrochemicals Sector - Snapshot:

FY 2025 represents a pivotal year for Indias agrochemical sector—balancing short-term export headwinds with long-term structural strengths in cost competitiveness, herbicide leadership, and domestic demand growth. With sustained policy support, innovation in formulations, and recovery in global demand, India is well-positioned to expand its footprint as both a domestic growth engine and a global agrochemical hub in the coming decade.

Given the outlook, NACL Industries is poised to harness emerging opportunities while navigating persistent headwinds in the agriinput landscape. In FY 2025, the domestic retail business was impacted by erratic monsoons, uneven rainfall, and constrained cropping patterns, with prolonged dry spells and late-season swings tempering demand. The Company reinforced its farmercentric approach through wider channel outreach and customized solutions. Exports too faced pressures from global oversupply, pricing challenges, and inventory imbalances, which weighed on performance. Nonetheless, NACLs diversified presence and long-standing institutional relationships lent resilience in key international markets. Looking ahead, the Company remains committed to innovation-led growth, stronger farmer engagement, and resilient operations to address evolving domestic and global needs in crop protection.

Sources: Rubix Data Sciences (ANI report): market size USD 11.2 B (FY2024-25), forecast USD 14.5 B by FY2027-28 (~9% CAGR); AgroPages, Claight, Expert Market Research: India as top 4 producer; export growth trends; herbicide momentum; Wikipedia (Economy of India): exports doubling to USD 5.4 B; global rank in exports; Times of India, Global Agriculture, NewKerala.com: export dip, herbicide CAGR, policy drivers ; Technavio, Mordor Intelligence, ICRA Limited, India Briefing: domestic demand and structural insights

Product Sector Performance:

Herbicide:

While the global herbicides market is expected to grow at a CAGR of ~5.1%, the Indian herbicides market is projected to expand at a faster pace of around ~8.1% CAGR. Rising food security concerns, declining arable land, and modern farming practices such as conservation tillage are driving adoption. Asia Pacific, led by India and China, remains a key growth hub supported by economic expansion, mechanization, and higher disposable incomes. Cereals and grains dominate demand, with rice and wheat as leading crops. Synthetic herbicides account for more than 90% of sales, though bioherbicides are gaining ground amid growing sustainability concerns. Advances in precision spraying, drone applications, and slow-release formulations are shaping market evolution, even as challenges like resistant weeds and environmental concerns push R&D toward next-generation bioherbicides.

For NACL Industries, FY 2025 saw the launch of two key herbicide products—Dash for paddy and Carpet for wheat. However, erratic rainfall delayed sowing of kharif crops, narrowing weed-control windows and softening demand. Revenues from the herbicide segment moderated slightly compared to the previous year, though continued product innovation and a focus on critical crop segments remain central to sustaining growth.

Fungicides:

While the global fungicides market is expected to grow at a CAGR of ~8.1%, the Indian fungicide market is projected to expand at a faster pace of around ~ 11% CAGR. Growth is driven by rising incidences of fungal diseases and climate variability, with Asia Pacific contributing the largest share due to extensive cultivation of cereals, fruits, and vegetables. Seed treatment and foliar applications lead usage, while systemic, contact, and biological fungicides play complementary roles.

In India, cereals account for over 30% of fungicide demand, followed by oilseeds (\~25%). The countrys warm, humid climate makes crops highly vulnerable to fungal diseases like blast, blight, and mildew, strengthening the role of fungicides in agricultural productivity.

NACL Industries fungicide portfolio delivered resilient performance in FY 2025, supported by flagship brands such as Oscar, Index, and Sivic. Although revenue was marginally lower year-on-year, the Company continued to deepen farmer engagement and provide technical support to enhance product efficacy. With innovation and strong brand equity, NACL remains well positioned in Indias competitive fungicide market.

Insecticides:

While the global insecticides market is expected to grow at a CAGR of ~5.4%, the Indian insecticides market is projected to expand at a faster pace of around ~8.1% The global insecticide market faced headwinds in FY 2025 due to unfavorable weather and lower acreage in key crops such as cotton and chilli. Despite these pressures, insecticides remain the largest Crop Protection segment in India, accounting for over 45% of the domestic market.

During the year, reduced cotton planting and weak chilli prices curtailed demand. However, opportunities are emerging in fruits and vegetables, where farmers are increasingly adopting advanced pest management solutions to enhance yields and quality.

NACL Industries recorded stable performance in its insecticide segment, supported by the launch of Speed and Pyrakill targeting fruits, vegetables, and other high-value crops. Despite sluggish market conditions, the Company strengthened its competitive position through innovation, farmer outreach, and tailored solutions.

Plant Growth Regulators (PGRs) / Bio-stimulants:

The global PGR market is projected to grow at ~10-12%CAGR and India PGR market is expected to grow at ~15% CAGR. Rising adoption of sustainable practices, demand for improved crop quality, and innovations in bio-based formulations are key drivers. In India, the PGR market growth is led by fruits, vegetables, cereals, and oilseeds, with government initiatives promoting sustainable inputs and residue-free farming.

For NACL Industries, FY 2025 was marked by continued emphasis on innovation-led growth in this segment. Flagship brands such as Atonik and Gallant remain central to the portfolio, backed by regulatory approvals and farmer confidence. While revenues moderated during the year, NACL strengthened R\&D capacities and promoted next-generation PGRs and bio-stimulants aimed at mitigating abiotic stresses like heat and drought.

With increasing demand for sustainable agriculture and consumer preference for high-quality produce, NACLs focus on integrated PGR and bio-stimulant solutions positions it strongly for long-term leadership.

Segment-wise Snapshot:

Segment	Global Outlook (CAGR)	India Outlook (CAGR)
Crop Protection	5-6% CAGR	9% CAGR
Herbicides	5.8% CAGR	8.1% CAGR
		NACL Introduced Dash and Carpet
Fungicides	8.3% CAGR	11% CAGR
		NACL brands; resilient performance despite headwinds
Insecticides	5.4% CAGR	8.1% CAGR
		NACL Launched Speed and Purakill
PGRs	10-12% CAGR	15% CAGR

Sources: Technavio; PR Newswire; Research and Markets; Future Market Insights; GlobeNewswire / Exactitude Consultancy; CARE Ratings / Industry Research; Kotak Securities; Equitymaster; Economic Times; Money control; Mordor Intelligence.

Strengths, Opportunities, and Outlook:

1) Industry Strengths & Core Positioning: India ranks as the worlds fourth-largest agrochemical producer and the second-largest exporter. In FY 2024, Crop protection segment exports touched USD 4.1 billion, marking a healthy CAGR of ~9% FY21-24. Despite a sharp 22% export correction in FY 2023-24, triggered by global inventory overhangs and aggressive price competition from China, Indian manufacturers demonstrated resilience by leveraging cost competitiveness, product diversification, and agility in market adaptation.

2) Domestic Usage - Significant Growth Potential: Crop protection chemical consumption in India remains low at ~0.3 kg per hectare, compared with the global average of 2.4 kg and 3.6 kg in Asia, underscoring vast growth potential. Domestic demand is set to rise with increasing mechanization, technology adoption, and productivity-focused farming practices. The Indian Crop Protection Segment is estimated to grow at 9% CAGR.

3) Key Opportunities & Growth Drivers: The sector is entering a pivotal growth phase, propelled by multiple drivers:

a) Patent expiries of key molecules (Cyantraniliprole, Sulfoxaflor) between 2026-2028, creating strong opportunities for generics and boosting Indias global competitiveness;

b) Technological advancements in biopesticides, advanced formulations, precision agriculture, and backward integration, reshaping the product landscape;

c) Policy support through Make in India, PLI schemes, and favourable regulatory frameworks enhancing domestic production and export competitiveness.

4) Outlook for FY 2025-30 - Growth & Strategic Imperatives:

The agrochemical sector is expected to sustain a 6-9% CAGR over the next 3 to 5 years, driven by export recovery, global inventory normalization, and stronger domestic adoption. A structural shift toward sustainability and innovation is altering the product mix, with greater emphasis on:

a) Bio-based solutions and integrated pest management;

b) Digital agriculture platforms and drone-assisted spraying;

c) Innovation-led R&D on new molecules;

d) Resilient supply chains and agile business models.

Indian Companies are well-positioned to capitalize on patent expiries, cost advantages, and domestic growth potential, while aligning with government incentives to scale sustainably.

Sources: Rubix Data Sciences; Economic Times; Global Agriculture; India Briefing; Mordor Intelligence.

Challenges, Threats, Risks, and Concerns:

1) Global Headwinds: The Indian agrochemical sector continues to face considerable global pressures, including inventory destocking, international price competition, and currency fluctuations. These external dynamics have weighed heavily on export performance, compressing revenues and margins. Uncertainty in the global geopolitical environment and volatility in commodity markets further complicate stability, underscoring the need for nimble and adaptive strategies by Indian exporters.

2) Regulatory Complexity: Indias evolving regulatory landscape presents persistent challenges. Lengthy approval timelines for new molecules, coupled with escalating compliance costs, slow down product introductions and hamper innovation. Additionally, tightening environmental and safety norms demand sustained investment in R&D to meet both domestic and international benchmarks, raising entry barriers and operational challenges for industry participants.

3) Climate Volatility: Shifting weather patterns and climate change have disrupted traditional pest and disease cycles, creating erratic demand for crop protection inputs. Droughts, untimely rainfall, and extreme temperatures impact sowing schedules and crop health, complicating pest management and heightening risks of inventory mismatches and crop losses. This unpredictability adds a layer of uncertainty for both farmers and manufacturers.

4) Competitive Pressures and Working Capital Constraints:

Cheaper imports and the proliferation of generic products continue to intensify pricing pressure and compress margins for Indian agrochemical companies. Staying competitive requires sustained innovation and stringent cost control. At the same time, the sector struggles with extended working capital cycles — high inventory buildup and delayed receivables, particularly from government-linked distribution channels — constraining liquidity and financial flexibility.

FY 2024-25 marks a pivotal phase for Indias agrochemical industry. Despite near-term export challenges and a demanding operating environment, the sectors underlying strengths — cost- efficient manufacturing, a vast underpenetrated domestic market, supportive policy measures, and opportunities from upcoming patent expirations — position it for sustainable, innovation-led growth. Strategic emphasis on R&D, regulatory alignment, supply chain resilience, and digital adoption will be critical to navigating risks and securing long-term value creation.

Sources: Rubix Data Sciences; Syovi Research; India Briefing; Mordor Intelligence; IMARC Group.

Financial Performance:

During the year 2024-25, the Revenue from operations Rs. 1,25,189 Lakhs reflects decreased by 30% over the previous year. The EBDITA loss and Cash Loss stood at Rs. 5,698 Lakhs and Rs. 5,378 Lakhs respectively compared to EBDITA positive Rs 1,632 Lakhs and Cash loss Rs 2,861 Lakhs. The financial performance of Company in 202425 was as under:

Particulars	2024-25	2023-24	2022-23
Revenue from Operations	125,189	1,78,084	2,11,600
EBITDA margin	-5%	1%	10%
Profit before depreciation, tax (as % of revenue from operations)	-6%	-2%	8%
Return on Capital Employed	-7%	0%	15%
Return on Net Worth	-15%	-9%	19%
Earnings per share (FV Rs1 each)	-3.66	-2.36	5.18
Book Value per share	23	26	29

Significant Changes in Financial Ratios:

The details of significant changes in the key financial ratios as compared to the immediately previous financial year, along with detailed explanations, are reported here under:

Ratios	2024-25	2023-24	Change	Reason for change
Current Ratio	1.09	1.17	-6%	Increase in losses of the Company during the year is on account lower production leading to lower revenues.
Debt Equity Ratio	0.61	1.23	-51%
Net Profit Ratio	-6%	-3%	121%
Return on Capital Employed	-7%	0%	3784%
Debt Service Coverage Ratio	0.29	0.36	-20%
Return on Equity Ratio #	-15%	-9%	74%
Debtors Turnover	2.07	2.26	-8%
Inventory Turnover	4.26	4.36	-2%
Interest Coverage Ratio	0.77	0.81	-5%
Operating Profit Margin (%)	-11%	-4%	168%

# Reduction in profitability of the Company during the year is on account lower global demand and falling prices leading to lower revenues and lower realisable value of inventories.

Outlook and Strategic Path Forward:

The agrochemical industry is set for steady expansion, supported by rising global food demand, shrinking arable land, and the urgent need for higher agricultural productivity. The outlook remains strong, as companies increasingly embrace bio-based and sustainable crop protection solutions, digital farming tools, and advanced formulations that improve efficiency while reducing environmental impact. Strategically, the path forward lies in enhancing R&D capabilities, deepening collaborations with agri-tech startups, and aligning portfolios with evolving regulatory frameworks that prioritize sustainability and climate resilience. For India, leveraging cost competitiveness, expanding exports, and strengthening the domestic value chain will be critical steps in positioning its agrochemical sector as a global innovation and growth hub.

Human Resources:

As of March 31, 2025, NACL Industries employed 1,347 people and maintained a culture of strong industrial harmony. The Company places high emphasis on employee development, offering extensive training programs and capability-building initiatives designed to strengthen both individual and team performance. By fostering continuous learning and professional growth, NACL ensures a motivated, skilled, and future-ready workforce.

Corporate Social Responsibility:

At NACL, community well-being is an integral part of our growth journey. In FY 2024-25, we allocated a CSR budget of Rs116 Lakhs, focusing on impactful initiatives that directly enhance the quality of life in our neighbouring communities at Srikakulam and Ethakota. Our efforts included the steady supply of clean RO-purified drinking water and domestic water to nearby villages, infrastructure support for community development, and programs that strengthen education through Vidya Volunteers, scholarships for meritorious students, and assistance to local institutions. We also extended support to initiatives like Mytri Police, thereby contributing to safer communities, and continued to provide medical assistance to residents in and around Srikakulam. Through continuous engagement with local authorities and residents, NACLs CSR interventions remain deeply rooted in inclusivity, sustainability, and long-term social impact.

QEHS (Quality, Environment, Health and Safety):

1) Quality: Quality remains integral to NACLs identity and operations. Supported by process-driven management systems, the Company upholds the highest international benchmarks across all stages of production. In FY 2024-25, technical plants, formulation facilities, and R&D centres strengthened their quality frameworks through advanced laboratories staffed by expert professionals. This commitment was recognized through NABL accreditations for the Srikakulam Technical Plant, Ethakota Formulation Plant, Dahej Plant, and the R&D Centre at Shadnagar, along with recognition from the Quality Forum

of India. These honours reaffirm the Companys commitment to excellence, compliance, and innovation, positioning NACL as a trusted global provider of safe, reliable, and high-quality agrochemical solutions.

2) Environment: Environmental responsibility is embedded across design, execution, and process management, reinforcing NACLs leadership in sustainable operations. Risks are proactively managed through robust methodologies such as HAZOP, EA&I, and HARA, ensuring the highest standards of environmental safety. The Company operates a pioneering Zero Liquid Discharge (ZLD) system with Distributed Control System (DCS) integration, enabling 100% wastewater recovery and reuse—a benchmark in the Indian agrochemical industry. Commitment to emission control is supported by multi-stage scrubbers, advanced monitoring tools including online pH and VOC meters, CEMS, and CAAQMS. Safety and resilience are further strengthened through secondary containment, bunding, dyke wall protection, and automated alarm systems integrated with the DCS. Stormwater management through conductivity-based reuse and in-house validation ensures water stewardship. Guided by the 5R philosophy—Refuse, Reduce, Reuse, Recycle, and Recover—the Company continues to minimize waste, eliminate HTDS effluent in one product, reduce effluent load by up to 75% in others, and recover high-value salts for reuse and commercial sale, thereby driving both ecological sustainability and business value.

3) Health: Employee health and well-being are central to the EHS framework. Occupational Health Centres operating round- the-clock across sites provide immediate care, emergency response, and preventive consultation. Comprehensive medical check-ups, health surveillance, and early risk identification, particularly for chemical exposures, are complemented by wellness programs on fitness, mental health, ergonomics, and chronic disease prevention. Initiatives such as vaccination drives, yoga sessions, and health awareness campaigns foster a culture of holistic well-being. Alignment with ISO 45001:2018 standards further strengthened workplace safety, resilience, and employee engagement, positioning well-being as a cornerstone of organizational sustainability.

4) Safety: Safety is ingrained as a core organizational value. Facilities are equipped with state-of-the-art fire detection and prevention systems, structured Permit-to-Work mechanisms, and comprehensive emergency preparedness plans to ensure continuous protection. Employee engagement is driven through initiatives such as Suraksha Sammelan, Suraksha Yojana, and the Safety Monthly Star program, fostering a culture of shared responsibility. Integration of Process Safety Management (PSM) with ICCs Responsible Care principles, along with advancement of Behaviour-Based Safety (BBS), has established a robust safety ecosystem that safeguards people, strengthens operational integrity, and reinforces stakeholder trust.

Internal Control Systems and their Adequacy:

NACL has established a comprehensive and resilient internal control framework designed to safeguard assets, ensure regulatory compliance, and enable swift resolution of operational issues. The system is continuously monitored, strengthened, and adapted to evolving business needs and regulatory changes. Oversight is reinforced through rigorous reviews by the Audit Committee, which ensures that audit observations are addressed with timely corrective actions. Regular and transparent engagement with both internal and statutory auditors further enhance the efficiency, reliability, and integrity of our control environment, reflecting our commitment to strong governance and operational excellence.

Cautionary Statement:

In this Annual Report, we have disclosed forward-looking information to help investors understand our prospects and make informed investment decisions. This Report, along with other written and oral communications made by us periodically, contains forward-looking statements that reflect anticipated results based on managements plans and assumptions. Wherever possible, we have identified such statements using words such as "anticipates", "estimates", "expects", "projects", "intends", "plans", "believes", and words of similar substance in discussions of future performance. While we believe these assumptions are prudent, there is no assurance that the forward-looking statements will be realized. The achievement of results is inherently subject to risks, uncertainties, and potential inaccuracies in assumptions. Should known or unknown risks or uncertainties arise, or should underlying assumptions prove inaccurate, actual results may differ materially from those anticipated, estimated, or projected. Readers are therefore advised to bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether because of new information, future developments, or otherwise.

Place: Hyderabad		For and on behalf of the Board
Date: August 07, 2025
	K Lakshmi Raju	G Veera Bhadram
	Chairperson	Whole Time Director
	(DIN: 00545776)	(DIN: 00114611)