Nath Bio-Genes (India) Ltd Management Discussions

Global Economy:

The global economy is navigating a phase of heightened uncertainty, with growth projections softening and macroeconomic pressures intensifying. The World Bank, in its June 2025 update, has revised its global GDP growth forecast for 2025 to 2.3%, significantly lower than its earlier estimate of 2.7%1. This since the 2008 financial crisis, excluding pandemic adjustment -related contractions. Notably, the deceleration-based, withis broad over 60% of emerging economies projected to register slower-than-expected growth, indicating a widespread economic slowdown1.

easing from prior highs, remain persistent. The World Bank estimates global inflation at approximately 2.9%, with core inflation in the U.S. (PCE) hovering around 2.6%, suggesting that underlying price pressures continue to weigh on policy decisions1. In response, the U.S. Federal Reserve has maintained a cautious stance, holding interest rates steady while citing slowing GDP growth (around 1.4%), rising job losses, and inflationrisks. The Fed has signalled potential rate cuts later in 2025, contingent on further signs of easing inflation2.

Trade dynamics have emerged tariff standoff between the as renewed source of strain. A brewing U.S. and China has resulted in a sharp escalation of trade barriers, with average tariff rates rising from ~2.5% pre-2017 to over 15% currently3. This protectionist environment has curtailed global trade flows and dampened investor sentiment. According to the World Bank, resolving key trade disputes such as halving existing tariff rates could add an estimated 20 basis points to global GDP growth over the 2025 26 period3, , underscoring the economic potential of policy realignment.

Geopolitical instability, particularly in the Middle East, continues to exert pressure on global markets. Heightened tensions between Israel and Iran have led to increased volatility in energy prices, with Brent crude prices rising 18% since June 10, currently trading around $80 per barrel. Analysts suggest a potential spike to $100 130 should disruptions to oil supply chains materialize, which could further complicate the inflation trajectory and energy affordability across regions2.

The near-term global outlook remains fragile and uneven. While recession risks are currently conditions, rising geopolitical risks, and elevated trade contained,persistent barriers continue to cloud the trajectory for global growth. The projected rebound for 2026 remains modest, with the World Bank forecasting continued 2.3% growth if current dynamics persist1. Policy clarity on trade, measured monetary easing, and geopolitical de-escalation will be crucial for supporting macroeconomic stability and enabling a more sustainable recovery.

Sources

1 World Bank Global Economic Prospects, June 2025 Press Release 2 Reuters Middle East Tensions and Oil Market Risks 3 World Bank Global Economic Prospects Overview

World Bank Full Report PDF Global Economic Prospects, June 2025

India continues to stand out as the worlds fastest-growing major economy, supported by resilient domestic demand, prudent macroeconomic management, and a focused push on capital expenditure and structural reforms. The International Monetary Fund (IMF), in its April 2025 update, projects Indias GDP to grow at 6.2% in 2025 and 6.3% in 2026, reinforcing its leadership among large economies1.

The World Bank, in its January 2025 Global Economic Prospects, echoes this optimism, forecasting a steady growth rate of 6.7% for FY26 and FY27, placing India well ahead of its global peers2. On the Bank of India (RBI) estimates domestic real GDP growth at 6.5% for FY2025 26, with quarterly growth expected to range between 6.3% and 6.7%, citing a balanced risk outlook3.

As per the Ministry of Finances Macro-Economic Framework Statement, FY2024 25 witnessed real GDP growth of 6.4%, while nominal GDP growth reached 9.7%. The government expects nominal growth to improve to 10.1% in FY26, underpinned by improved revenue collections, stable inflation, and continued public investment .

Inflation has remained under control, allowing monetary policy flexibility. The Harmonised Index of Consumer Prices (HICP) for April May 2025 stood at approximately 3.2%, well within the RBIs comfort band of 4% ?2%. CPI inflation is projected at 3.7% forFY2025 26, though risks from global supply-side disruptions remain .

India continues to exhibit fiscal prudence while scaling up capital spending. In the FY2025 26 Budget, capital expenditure is pegged at 11.21 lakh crore, accounting for 3.1% of GDP. Simultaneously, the fiscal deficit target is narrowed to 4.4% of GDP, and the public debt-to-GDP ratio is expected to fall to 56.1%, reflecting a consolidated path to fiscal sustainability .

Even amidst global challenges, Indias outlook remains favourable. The World Bank, in its June 2025 Global Economic Prospects, maintains a GDP growth forecast of 6.3% for FY2025 26, while also as global tra cautioning against de disruptions and commodity price volatility .

Indias near- to medium-term outlook remains robust. With GDP growth forecast in the 6.3 6.7% range through FY26 27, the economy is expected to continue outpacing global peers. A combination strong macroeconomic fundamentals, a contained inflationary environment, and the governments commitment to infrastructure and fiscal reform supports this momentum. However, continued vigilance is essential, as global risks including energy price shocks, trade tensions, and geopolitical instability could test the countrys external resilience. Ensuring broad-based growth, sustaining investor confidence, and pushing forward structural reforms will be key to unlocking Indias full growth potential.

1 IMFIndiaGrowth

2 World Bank Global Economic Prospects Jan 2025 (India section) via PIB

3 RBI GDP Outlook FY2025 26 PIB Press Note

Macro-Economic Framework Statement Ministry of Finance (2025 26 Budget) via PIB

Retail Inflation, Capex, and Fiscal Deficit Highlights PIB Budget Release

World Bank Global Economic Prospects June 2025 (India highlights) via PIB

Indias agricultural sector is undergoing a fundamental transformation, driven by a combination of policy momentum, public investment, and strategic crop realignments. As a cornerstone of the (GVA) a economy nd supporting over 40% of the population the sector plays a pivotal role in Indias food security, rural employment, and macroeconomic stability. Since 2013, agricultural budget allocations have increased five-fold, underscoring the governments long-term commitment to the sector1. The FY 2025 26 Union Budget continued this trend by raising total outlays for agriculture and allied sectors to 1.71 lakh crore a 15% increase over the previous year marking the biggest jump in six years2.

To reduce import dependency and strengthen domestic supply chains, the government launched two flagship initiatives in FY 2025 26. First, a six-year pulses programme aims to guarantee minimum support price (MSP) procurement for crops like pigeon peas and red lentils, addressing a 5,000 crore import bill3. Second, renewed focus on cotton through enhanced R&D, input subsidies, and support infrastructure including is intended to restore Indias competitiveness as a net exporter . These initiatives are a part of broader structural reforms that aim to align the cropping pattern with nutritional needs, water efficiency, and market demand.

In parallel, climate-smart agriculture has taken centre stage. A World Bank-supported programme is practices using AI, remote sensing, weather data, and satellite mapping to helpingIndiascaleadaptive enhance productivity while conserving natural resources . Recognizing the importance of stable input costs and farmer income, the government has also expanded its food and fertilizer subsidy commitments by 8% to 4.1 lakh crore for FY 2025 26 ensuring support for over 80 crore people through PDS and input affordability . Together, these measures are laying the groundwork for a more resilient and future-ready agricultural ecosystem.

On the production front, the 2024 25 Kharif season saw record foodgrain output of 1,663.9 lakh metric tonnes (LMT), with rice contributing 1,206.8 LMT, maize 248.1 LMT, and pulses 137.5 LMT. Oilseeds also performed strongly, with groundnut output at an all-time high of 104.3 LMT . States like Uttar Pradesh are leveraging World Bank-backed projects such as UP AGREES ( 4,000 crore) to expand cultivation of maize and oilseeds while improving irrigation through farm ponds . Similarly, the Rabi season delivered solid gains, with foodgrain output reaching 1,645.3 LMT, including a record 1,154.3 LMT of wheat . These achievements were reinforced by MSPs that ensured farmers earned a minimum 50% return over production costs1 .

The crop economics is also shifting. Maize has become increasingly attractive to farmers due to its high returns (~ 2,500/quintal), lower water needs, and government-backed MSP of 2,225/quintal for 2024 25. In Uttar Pradesh, the state aims to double maize production by 202711. This reflects a broader trend of rebalancing crop portfolios toward high-value, climate-resilient varieties such as pulses, millets, and oilseeds. These changes are further supported by digital tools, farmer collectives, and post-harvest value chain infrastructure.

Looking ahead, Indias agricultural growth trajectory appears promising. According to McKinsey, the Agri-GDP could rise from USD 580 billion in 2024 to USD 1 trillion in a base case and up to USD 1.4 trillion in an aggressive case by 2035. This transformation will be powered by 15 40% yield gains through better seeds, precision inputs, technology adoption,nd processing infrastructure12. With sustained policy support, institutional capital, and digital innovation, Indias agriculture - is well positioned to evolve from a subsistence-based safety net into a market-linked growth engine one that supports income growth, export potential, and climate adaptation at scale.

1 Reuters Budget Growth Since 2013

2 Reuters FY26 Budget Push

3 Reuters Pulses Programme

Reuters Cotton Enhancement

World Bank Climate-Smart Agriculture

Reuters Subsidy Expansion

PIB Kharif Output

Business Standard UP AGREES Project

PIB Rabi Output

1 The Hindu MSP Assurance

11 TOI Maize Cultivation Trends

12 McKinsey Value Creation in Indian Agriculture

Indias seed industry in FY25 is at a pivotal juncture, driven by significant policy push, public R&D output, and strategic infrastructure support. Already among the top five global seed markets by value and volume, India is also the second-largest producer of agricultural seeds in Asia after China. With a vast agro-climatic diversity and one of the highest cropped areas globally, India plays a crucial role in supplying seeds not only for domestic use but also for growing export markets in Asia, Africa, and Latin America. The Union Budget 2024 25 marked a landmark move with the launch of the National Mission on High-Yielding Seeds, aimed at developing and distributing over 100 new seed varietiestailored to regional and climatic needs. This mission intends to strengthen the seed ecosystem through targeted funding for public and private research institutions, and by building robust linkages between seed producers and farmer groups a critical step towards enhancing yield potential and resilience in agriculture1.

To complement varietal improvement, the government has implemented notable MSP (Minimum Support Price) increases for both Kharif and Rabi crops in FY25, particularly in oilseeds and pulses, which are key targets for seed modernization. For instance, groundnut MSP was raised by 527/quintal, and mustard by 300/quintal, alongside hikes in crops like bajra, ragi, masur, and gram. These measures not only improve farm profitability but also act as an incentive for farmers to adopt higher-quality seed varieties2 3.

Supporting this transformationis the Sub -Mission on Seeds and Planting Material (SMSP), which has made significant progress over the past decade. The program has enabled the creation of over 6.85 lakh seed villages and facilitated the production of 1,649 lakh quintals of quality seed across cereals, pulses, and oilseeds. This momentum continues in FY25, under the new seed mission, to scale up seed replacement rates and improve access in underserved regions .

On the R&D front, the Indian Council of Agricultural Research (ICAR) released 109 new seed varieties in FY24, directly supporting the seed pipeline for the 2024 25 cropping seasons. These include high-yielding, disease-resistant, andacross major crops such as rice, wheat, climate-resilient varieties maize, pulses, and horticulture, strengthening adaptability across Indias diverse agro-climatic zones .

To reduce dependence on edible oil imports, the government is actively promoting oilseed expansion through seed-based interventions. These includesupport-yielding ation in rice fallow areas, combin cultiv varieties, and ed with financial and input incentives. This is expected to significantly enhance the demand for certified seeds in crops like mustard, soybean .

In line with Indias leadership in millet cultivation, the government has scaled up investment in coarse grain seed systems. Under the ICAR millet initiative, 25 seed hubs have been established to distribute certifiedseed varieties and related crops. These hubs also provide ofbajra,ragi,jowar, training, trials, and research support to improve millet productivity and resilience .

Further, the government is bolstering the seed supply chain under the Agriculture Infrastructure Fund (AIF). As of FY25, over 52,738 crore has been sanctioned across 87,500+ projects, with many focused on seed storage, processing units, and cold chain logistics. This enhances seed quality preservation and broadens availability across regions .

With strong government commitment across policy, pricing, research, and infrastructure, the Indian seed industry is poised for an accelerated growth trajectory in FY25. Indias position as a global seed hub is being reinforced by investments in varietal innovation, climate resilience, and modern storage infrastructure. Rising seed replacement rates, increasing export potential, and deeper private-public sector collaboration are likely to drive Indias transition from a seed self-sufficient nation to a seed innovation and supply powerhouse for emerging markets.

1 National Mission on High-Yielding Seeds 2 MSP Kharif FY25 3 MSP Rabi FY25

SMSP & Seed Village Program

ICAR 109 Seed Varieties Released

Oilseed Promotion and Seed Policy

Millet Seed Hubs & R&D

Agriculture Infrastructure Fund

Indias cotton sector, a cornerstone of the rural economy and the textile industry, is undergoing a strategic transformation to address longstanding productivity gaps while strengthening its global position. India continues to lead the world in cotton acreage, accounting for the largest area under cultivation and nearly 24% of global cotton production1. Despite this scale, India ranks only 36th globally in terms of yield per hectare, which has drawn attention improve output efficiency2.

Recognizing this, the Government of India has launched a major intervention: a five-year Cotton Productivity Enhancement Mission, with a budgetary allocation of 5,272 crore3. The mission targets yield improvement, especially for Extra Long Staple (ELS) varieties, by promoting High-Density Planting Systems (HDPS), improved mechanization, integrated pest management, and deployment of compact Bt-cotton hybrids . These agronomic upgrades aim to bring Indias average levels while ensuring better returns for farmers.

To enhance Indias image in global cotton trade, the government has also rolled out the Kasturi Cotton Bharat initiative, which serves as a premium branding campaign for Indian cotton. Through this, the government is ensuring standardized ginning, contamination control, and QR-code based traceability to elevate Indias cotton quality to international benchmarks . This brand identity differentiate Indian cotton in global markets and increase export competitiveness.

At the grassroots level, the governments procurement operationshave been robust. In FY2024 25 (up to December), the Cotton Corporation of India (CCI) procured 42 lakh bales valued at 16,215 crore, directly benefiting over 7.75 lakh farmers . The procurement process has been digitized and made transparent through Aadhaar authentication, SMS-based updates, and NACH-based direct bank transfers, ensuring fair price realization at the farmer level.

Additionally, the Cotton Advisory Board (CAB) and the Committee on Cotton Production and Consumption (COCPC) have indicated that the domestic cotton supply is stable, with no major concerns on availability for the textile sector ^, . This balance ensures that Indias textile value chain spanning spinning, weaving, and garments can plan production without facing raw material bottlenecks.

Overall, Indias cotton sector is now backed by a multi-pronged policy framework spanning productivity enhancement, quality assurance, farmer support, and global market positioning. These initiatives are expected to not only raise farmer incomes and reduce yield gaps but also to position India as a globally trusted source of high-quality cotton, catering to both domestic and export markets.

1 Indias cotton acreage and global share

2 Low productivity and need for yield improvement

3 Budget allocation for Cotton Productivity Mission

Mission rollout and strategy

Kasturi Cotton Bharat branding initiative QR-code traceability system and branding

CCI procurement update FY25 CAB review on cotton supply COCPC sector roadmap

Company Overview in FY25, Nath Bio-Genes core crop portfolio comprising cotton, hybrid paddy, maize, vegetables, and select field crops continued to demonstrate resilience and strategic depth amid industry challenges. While cotton faced sectoral headwinds, it remained a key revenue contributor supported by robust hybrid adoption. Paddy maintained a stable share driven by hybrid dominance, while maize and vegetable segments posted impressive growth of 47% and 60% in value, respectively. -Cotton, Non-Paddy (NCP) segment now accounts for nearly half of The companys Non the revenue, reinforcing Nath Bio-Genes successful diversification strategy and its ability to adapt to evolving agronomic and market demands.

Nath Bio-Genes (India) Limited operates at the confluence of rising food and nutritional security imperatives in India, playing a critical role in enabling the nations transition to sustainable, high-yield agriculture. With over two decades of experience, the company has developed a robust ecosystem encompassing R&D, farmer engagement, and seed innovation. Its offerings, particularly in cotton, have shown strong performance in ICAR trials, aligning well with the governments push for climate-resilient and productivity-enhancing agriculture under various national missions.

Cotton Segment India remains the worlds largest producer of cotton, and Nath Bio-Genes has strategically positioned itself within this crucial agri-sector. In FY25, the cotton segment witnessed headwinds due to Kharif 2024 uncertainty and market disruptions caused by illegal HTBT seed distribution. Consequently, cottons revenue contribution declined from 31% to 27% YoY. Despite this, the company maintained ~16.06 lakh packet sales, aided by hybrid offerings like Sanket and Jumbo and continued farmer awareness campaigns.

The cotton industry continues to face structural challenges, notably the unauthorized proliferation of herbicide-tolerant BT (HTBT) cotton, which has not been approved by regulatory authorities. Farmers are attracted to HTBT due to reduced weeding costs and convenience, but the unregulated spread of these seeds poses serious risks, including environmental contamination, loss of trait purity, and erosion of trust in certified seed systems. Nath Bio-Genes has actively collaborated with industry bodies and policymakers to address the issue, reinforcing the importance of regulatory enforcement and legitimate BT cotton adoption. Additionally, the company has emphasized education implications of illegal seeds, supporting efforts to restore market discipline.

Product Pipeline and Innovation Nath Bio-Genes is currently developing next-generation cotton hybrids designed for higher yields, enhanced pest resistance (particularly against pink bollworm and sucking pests), and adaptability across varied agro-climatic zones. Key traits include medium-to-large boll size, wider adaptability, ease of harvesting, and yield superiority. These innovations are expected to strengthen the companys leadership in the cotton segment over the coming years, especially as policy shifts begin to favour robust quality control and certified

Paddy Segment Paddy continued to be a resilient revenue pillar in FY25, maintaining its 25% contribution to the topline. The companys strategic focus on hybrid paddy was evident in stable demand, with improved margins led by value-rich offerings such as Dhoom, Dhadak, and Dhadak Gold. Loknath, Gor With akhnath, and Tehelka still performing strongly, Nath Bio-Genes targeted R&D on early maturity and disease resistance remains well-aligned with national productivity and climate resilience goals.

Vegetables The vegetable segment emerged as a significant growth driver in FY25. The company achieved a 60% increase in value and a 76% rise in volume, led by deeper market penetration and multiple new product launches in tomato, okra, bitter gourd, and cucumber. This strong performance underscores the companys ability to capture shifting consumption patterns and -margin, high-nutrition crops. The vegetable portfolio now contributes approximately 7% to overall revenue and is expected to grow further with continued innovation.

Plant Nutrient Supplement the Plant Nutrient Supplement segment witnessed encouraging traction in FY25, particularly led bythe companys flagship product, Win-Chi-Win. While specific growth figures were not disclosed in the latest annual update, management highlighted steady demand across agriculture, horticulture, and vegetable categories. The addition of new soil conditioners also enhanced the segments relevance in integrated nutrient management. With government focus on improving soil health and farmer productivity, the segment remains strategically positioned for long-term growth.

Others The Others segment, which includes maize, mustard, bajra, jowar, and wheat, saw strong operational gains. In FY25, maize posted a robust 47% YoY growth, while wheat increased 24%. The NCP (Non-Cotton, Non-Paddy) portfolio venue, reflectingincreasedthe companys diversification focus. Despite a modest 4. central to the demonstratesproductpremiumization. This companys de-risked and margin-accretive growth strategy.

Financial Overview in FY25, Nath Bio-Genes recorded total revenue of 3,623 million, marking a 9% YoY growth. Gross profit rose 15% YoY to 2,289 million, with the gross margin expanding to 63%. EBITDA stood at 523 million (?4% YoY), though the EBITDA margin moderated slightly to 14% from 15% last year. PAT (excluding extraordinary items) grew 13% YoY to 416 million, with a PAT margin of 11%. Notably, profits from core business operations improved reflecting operational by 13.3%, efficiency al headwinds in cotton. With healthy operating cash flows, despite stable finance extern costs, and tight receivable control, the company exited FY25 with a resilient financial profile.

Company Outlook Looking forward, Nath Bio-Genes is sharpening its focus on high-margin and high-growth segments particularly vegetables, maize, and hybrid paddy while maintaining strength in its cotton leadership through innovation and advocacy. FY26 will emphasize scaling its R&D capabilities, leveraging success in international markets like Uzbekistan, while expand international sales. With robust fundamentals, sustained strategically diversified portfolio, the company is well-positioned to capitalize on rising global and domestic demand for resilient seed solutions.

Infrastructure Operating three modern processing units and leasing third-party infrastructure, Nath flexibility. Seed processing capabilities Bio-Genes minimizes capex while maintaining operational across multiple states enhance geographic resilience. Rigorous quality assurance protocols, including ELISA-based geneticpurity tests and ISTA -compliant testing, ensure seed viability and safety a cornerstone in Indias seed quality regulation framework.

Research and Development With 40 breeding stations, 325 acres dedicated to R&D, and collaborations with NRCPB, ICRISAT, CIMMYT, and IRRI, the company contributes significantly to Indias agricultural innovation agenda. Its investments in trait-specific germplasm and biotic/abiotic stress-resilient and. hybridssupportnationalprioritiesonclimateadaptation

Seed Production With seed production across more than30,000 acres and support from over 25,000 growers, Nath Bio-Genes has built a scalable, climate-resilient supply base. The companys production model aligns with the governments goal of strengthening domestic seed production to reduce reliance on imports.

Elaborate Seed Processing Facilities Modern equipment and stringent quality protocols ensure top-certific and traceability standards. The companys tier seed output, supporting Indias quality andviability across regions. decentralizedpresenceenablesfasterdistribution

Stringent Quality Assurance Nath Bio-Genes conducts over 200,000 quality tests annually across the seed supply chain. These efforts align with Indias evolving regulatory focus on seed traceability, germination standards, and genetic purity enforcement.

With a distribution footprint across131 regions and 20,000+ distributors, Nathexpansion Bio-Genes is positioned to deliver resilient supply chains. International into Asia, Africa and Middle East aligns with Indias ambition to be a global seed supplier.

Unpredictable Weather plays a key role in The Company attempts to minimize the effects of Weather the these natural calamities by taking proactive and grains, pulses, vegetables, quick action by creating seeds that can be cultivated etc. Any adverse climatic in situations, conditions can negatively impact the production and maintenance of crops and fields.

Cotton There are multiple risks The company has a diversified product profile and Business associated with the cotton focuses on ‘All season products. The company business such as the seeks to increase segment growth in the vegetable increased proliferation of and plant nutrient markets. illegal seeds which are herbicide tolerant in cotton-growing states to meet the customized product based demand.

Human Resources The companys 451-member team is supported by ongoing training, collaborations with global institutions, and structured HR policies. This reflects Indias -skilling and capacity building in the rural sector.

Internal Control Systems Robust audit systems, regulatory compliance, and operational integrity safeguard Nath Bio-Genes in a sector increasingly subject to digital, ESG, and biosafety norms. The companys audit committee ensures readiness for future regulatory shifts.

Cautionary Statement Statements in the Management Discussion and Analysis describing the Companys objectives, projections, expectations and estimates regarding future "forward-looking statements" and are based on the currently available information. The management believes these to be true to the best of its knowledge at the time of preparation However, these statements are subject to certain future events and uncertainties, which could cause actualresultsto rially from those, which may be indicated in such statements.