Narmada Gelatines Ltd Management Discussions

1. Economy Overview

The Global gelatine market size was valued USD 3.40 billion in 2025 and Is projected to grow from USD 3.60 billion In 2026 to USD 6.58 billion by 2034, registering a CARG of 7.83% over the period.

India continued to remain one of the fastest growing major economics during the period under review, supported by strong macroeconomic fundamentals, robust domestic demand, fiscal discipline, increasing Industrial activities. Prolonged geopolitical instability. Including the middle-east conflict, may continue to impact global trade flows and overall market sentiments.

The Indian gelatine market is expected to register a CARG of around 7.5% over the next few years,

Consumers are becoming more aware of the health benefits of gelatin usage. Gelatin, being a rich source of collagen. Is recognised for boosting joint health, skin elasticity, and hair strength, driving Its demand in the Nutraceutlcals and pharmaceutical sectors.

Gelatin Is a natural product which Is made of hydrolytic degradation of protein from collagen and Its distinctive structure of amino acids gives It several benefits. It is in the form of tablets, granules or powders and has high protein content,

4. Increasing application of Gelatine- Gelatine finds widespread use In various sectors:

• Food and Beverage: Gelatine is considered a key ingredient in food and beverages such as confectionery (gummy candies, marshmallows, jellies), dairy products (yogurt, cream cheese, ice cream), desserts and other fuctlonal food due to Its gelling, thickening, and stabilizing properties.

• Pharmaceuticals: gelatin Is used to manufacture hard and soft capsules, for coating tablets, and In syrups. It also has many biomedical applications. It Is used in the manufacturing of scaffolds for healing wounds.

• Cosmetics: It is used In cosmetics and personal care products for Its film-forming and as a binding agent in makeup products,

• Photography: Although digital photography has largely replaced film, gelatine remains critical in archival photographic materials, and fine art photography,

• Nutraceuticals and dietary Supplements: Used in protein-rich supplements for joint and bone health.

The countrys drugs and pharmaceuticals exports increased by approximately 2% year-on-year during FY 2025-26. Indias pharmaceutical industry is the 3"¹ largest by volume, producing more than 60,000 generic drugs across 60+ therapeutic categories.

During FY 2025-26, the Government continued implementation of various Production-Linked Incentive (PU) schemes aimed at promoting domestic manufacturing of key pharmaceutical Ingredients and generic medicines,

The rise of plant-based gelatin substitutes, fueled by rising demand for vegetarian and vegan goods. Is one of the primary market barriers. Traditional gelatin made from animal sources is affected due to this trend, as consumers look for alternatives that take sustainability and ethics into account. Furthermore, cultural and religious prohibitions are impeding market growth.

Due to the reduction In global Gelatin price, the price of Raw Material globally reduced significantly during the second half of fhe year. This opportunity Is being utilized to import/purchase raw material. which will help import raw material at Competitive price and put less pressure In domestic raw material supplies.

The Company is engaged in only one segment, namely, manufacture and sale of gelatine and related products like ossein and di-calcium phosphate (DCP) and as such there are no reportable segments as per Ind AS-108 Operating Segments."

The Companys Internal Financial Control framework Is commensurate with the size and the nature of Its operations. These have been designed to provide reasonable assurance about recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of Corporate Policies.

The Company has laid down procedures and policies to guide the operations of the business, The Company has a well-defined delegation of power with authority limits to approve revenue as well as expenditure, Functional heads are responsible to ensure compliance with the policies and procedures laid down by the board of directors.

The Company has appointed M/s P.B. Singh 8t Associates, Chartered Accountants to oversee and carry out internal audit of Its activities. The audit is based on an Internal audit plan, which is reviewed each year in consultation with the statutory auditors and approved by the audit committee. The efficacy of the internal checks and control systems are validated by internal auditors. The audit is based on a focused and risk based internal audit plan, which is reviewed and approved each year by the Audit Committee of the Company,

The Audit Committee reviews reports submitted by internal auditors on quarterly basis. Suggestions to improve any process are considered by the management and the Audit Committee follows up on corrective actions taken by the management, The Audit Committee also meets the Company s statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the Board of Directors informed of its major observations periodically,

M/s. Lodha & Co LLP., the Statutory Auditors of the Company audited the financial statements included In this Annual Report and have issued a report on the internal controls over financial reporting (as defined in Section 143 of the Companies Act, 2013).

Based on Its evaluation (as provided under Section 177 of the Companies Act, 2013 and Clause 18 of SEBI Listing Regulations), the Audit Committee has concluded that as of 3T^J March 2026, the Internal Financial Controls were adequate and operating effectively,

The Company s human resources agenda continues to remain focused on the development of Its employees, building capabilities In the organization and progressive employee relations policies. The Company addressed training and development needs of Its workforce In technical and behavioural areas by deploying Internal and external faculty.

Human capital is at the heart of our companys success. It can be attributed through our diversified and competent workforce, capable leadership and empowering culture and efficient operational excellence.

We aim to provide a safe, dynamic, and trustworthy environment for all our employees. Our people policies are designed to create a future ready workforce, while empowering them and creating an enriching employee experience.

Our efforts were also In conjunction with various aspects like Employee health and safety, Training and skill development.

We do not make employee decisions or discriminate against individuals based on personal characteristics like race, color, age, gender, religion, nationality, marital status, sexual orientation, etc. We base our employment relationship on the principle of equal opportunity and fair treatment and strive to create an environment that fosters the same. There were no Incidents of discrimination in fiscal 2025-26,

We always led emphasis on employee well-being may it be mentally, physically, emotionally or socially.

Industrial relations remained cordial throughout the year. Your Directors place on record their sincere appreciation of the significant contributions made and the continued support extended by all employees at all levels to the Companys operations during the year.

During the financial year under review, the Revenue from operations is Rs. 215,41 crores higher than the previous year by 14,02%,Sales volume of gelatine and DCP Increased by 16.17% and 11,35 % respectively. Average selling price of gelatine decreased by 5.20% but DCP Increased by 17.17% as compared to last year,

The contribution of Gelatine sales to the turnover was 70.77%, whereas that of the DCP sales turnover was 29,15% during the year under review,

Material consumed In fiscal 2025-26 increased by 1.29%, which Is due to Lower cost of Raw material, power and fuel cost reduce by 4.98 % due to decrease in the coal prices and consumption, Employee cost stood at 9.26% (8.56% previous year) of revenue from operations. Other expenses were 8.94% of the revenue from operations during the year under review.

Profit before exceptional items and taxes stood at Rs. 38.19 Crores, higher than previous year by 67.58%, Growth led by better yield and lower consumption of power and fuel,

Diluted -earnings per share stood at 47.CI as compared to 22 oe - 202.1-25

In accordance with the Listing Regulations, the Company Is required to disclose significant changes In key financial ratios, During the financial year under review, the details of significant changes in the key financial ratios, along with explanations thereof, have been disclosed in the Notes forming part of the Financial Statements,

Certain statements made in the Management Discussion and Analysis Report relating to the Company?s objectives, projections, outlook, expectations, estimates and others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations whether expressed or implied. Several factors could make significant difference to the Companys operations. These include raw material availability, import and exports of raw material and finished goods, economic conditions, affecting demand and supply, government regulations, changes in taxation, natural calamities, on which the Company does not have any direct control.