Nath Bio-Genes India Ltd Management Discussions

Global growth in calendar year 2026 has come under renewed pressure. The World Banks June 2026 Global Economic Prospects report projects global growth slowing to 2.5% in 2026, down from 2.9% in 2025, before recovering modestly to 2.8% in 2027 — still 0.4 percentage points below the 2010s average?. The escalation of the Middle East conflict, including the closure of the Strait of Hormuz, which disrupted roughly a fifth of global oil supply, has pushed global growth to its weakest pace since the pandemic; Brent crude is projected to average approximately USD 94 a barrel in 2026, about 36% above 2025 levels?. Global inflation is now expected to rise to about 4.0% in 2026, up from 3.3% in 2025, as energy and shipping-cost pressures feed through?.

Trade policy remains a further complication. While effective U.S. tariff rates have settled lower than initially announced, an additional 10-percentage-point tariff overhang is due to expire in late July 2026 unless extended by the U.S. Congress, leaving exporters with limited near-term clarity?. Developing economies as a group are expected to see growth slow to a post-pandemic low of 3.6% in 2026 (from 4.4% in 2025), although South Asia remains the fastest-growing region in the world even as its own growth decelerates from 7.0% in 2025 to 6.3% in 2026 amid these external headwinds?.

Should energy disruptions from the Middle East conflict intensify or spill over into broader financial stress, the World Bank cautions that global growth could fall as low as 1.3% in 2026, with inflation rising to 4.4% — underscoring how fragile the recovery remains?. Policy clarity on trade, an orderly de-escalation of the Middle East conflict, and careful monetary management will be essential to prevent a deeper slowdown?.

? World Bank, Global Economic Prospects, June 2026 (Press Release), "Middle East Conflict Sends Global Growth to Lowest Rate Since COVID-19."
? IMF, How the War in the Middle East Is Affecting Energy, Trade, and Finance (30 March 2026).
? IMF, War Darkens Global Economic Outlook and Reshapes Policy Priorities (14 April 2026).

Amid this uncertain global backdrop, India remains one of the few large economies still expanding briskly. Earlier in the year, the Reserve Bank of India (RBI) had projected FY26 real GDP growth at 7.6%, flagging global risks even as domestic momentum held firm?. The IMFs more recent assessment pegs Indias growth at 6.4% for both FY26 and FY27, citing fading cyclical tailwinds even as India retains its position as the worlds fastest-growing major economy?.

At its June 2026 review, the RBI held the repo rate at 5.25% in a neutral stance while projecting FY27 real GDP growth at 6.9%. On prices, the central banks inflation outlook has moved higher, with commentary pointing to a revised FY27 CPI forecast of around 5.1% (up from approximately 4.6% earlier), reflecting higher LPG, base-metal and rubber prices · a direct pass-through of the global energy shock arising from the Middle East conflict4.

The Union Budget 2026-27 pegged the fiscal deficit at 4.3% of GDP, down from the 4.4% revised estimate for FY26, with public capital expenditure raised to ?12.2 lakh crore (up 11.5% over the FY26 revised estimate) and the debt-to-GDP ratio expected to ease to 55.6%. Nominal GDP growth for FY27 is budgeted at 10%.

Growth, however, has not been even across sectors. In the third quarter of FY26, the primary sector (agriculture and mining) expanded a comparatively modest 1.7%, well behind industry (8.8%) and services (9.0%)7. Indias near-term outlook therefore remains constructive but not risk-free: sustained momentum in industry and services, a widening capex push, and a still-contained core inflation trend are being weighed against energy-price volatility, tariff uncertainty, and an unusually dry start to the 2026 monsoon.

? DD News, RBI Projects Indias GDP Growth at 7.6% for FY26, Flags Global Risks.
? DD News, IMF Revises Indias GDP Growth Upward to 6.4% for FY26 and FY27.
? Newsomair/DD News, RBI keeps repo rate unchanged; projects Indias real GDP growth for FY27 at 6.9%
4 ICFM India, RBI MPC 2026: Repo Rate Hold, Inflation Forecast Revised.
5 The Quint, Union Budget Sets Fiscal Deficit Target at 4.3 percent of GDP for 2026-27.
6 PIB, Highlights of Union Budget 2026-27.
7 Canara Bank Research, Indias Latest GDP: Growth Trends and Sectoral Insights (Q3 FY26 & Second FY26 Advance Estimates).

Agriculture continues to be the bedrock of Indias rural economy, contributing around 18% of Gross Value Added (GVA) and underpinning the livelihoods of a large share of the population?. FY 2025-26 has been a season of record physical output despite an uneven monsoon: first advance estimates placed kharif foodgrain production at a record 173.3 million tonnes, up 5.2% over the prior years first estimate, powered by record rice (124.5 million tonnes) and maize (28.3 million tonnes) output, even as kharif pulses production eased marginally to 7.41 million tonnes. On the rabi side, wheat output for 2025-26 has since been placed at a record 120.65 million tonnes in the governments third advance estimate (May 2026), 2.29% higher than the previous year and aided by government procurement of roughly 34 million tonnes against a raised target of 34.5 million tonnes — even as some private estimates put the actual crop meaningfully lower, at around 110.65 million tonnes, reflecting continuing debate over crop-estimation methodology?.

Even with record physical output, the value of that growth has been muted: the governments Second Advance Estimates place FY26 real agricultural GVA growth at 3.1% down from 4.6% in FY25, while nominal agricultural GVA growth has slowed sharply to just 0.8% (from 10.4% in FY25) as farm-gate prices softened · a reminder that record harvests do not automatically translate into record farm incomes4.

Policy support has continued to scale up in response. The Union Budget 2026-27 raised the outlay for the Department of Agriculture and Farmers Welfare to about ?1.30 lakh crore and for agriculture and farmers welfare overall to ?1,32,561 crore — a 4.14% increase — alongside ?1,70,944 crore for fertiliser subsidy, 63,500 crore for PM-KISAN, and a new 150 crore outlay for the AI-based Bharat-VISTAAR advisory platform integrated with AgriStack5. The government has also continued to raise minimum support prices, approving higher MSPs for 14 kharif crops for the 2026-27 marketing season, building on the up to 11.84% cotton MSP increase and similar hikes across oilseeds and pulses approved for 2025-26.

Looking ahead, the biggest swing factor for FY27 is weather. The India Meteorological Department has flagged a below-normal south-west monsoon for 2026 under the shadow of an emerging El Nino, with the season opening in June with a steep, roughly 40% all-India rainfall deficit7. Historically, such deficits weigh disproportionately on rainfed pulses, oilseeds and parts of the rice crop, while irrigated and shorter-duration crops are comparatively better insulated — a distinction that will matter for how the FY27 kharif season plays out for seed suppliers such as Nath Bio-Genes.

? PIB, Contribution of Agricultural Sector in GDP.
? PIB, Union Minister Shri Shivrai Singh Chouhan releases first advance estimates of Kharif crop production for 2025-26.
? Business Standard, Indias wheat production pegged at record in 2025-26 despite uneven weather (3rd advance estimate).
4 Business Standard, Fall in nominal GVA also drags down real agriculture growth in FY26.
5 PIB, "Union Budget 2026-27 historic and unprecedented": Shri Shivrai Singh Chouhan.
6 DD News, Cabinet approves higher MSP for 14 Kharif crops for 2026-27 marketing season.
7 Down To Earth, El Nino and Weak Monsoon Systems Drive Indias 40% June 2026 Rainfall Deficit.

Indias seed industry continues to expand off a strong policy tailwind. Independent market research pegs the domestic seed market at USD 3.82 billion in 2025, growing to about USD 4.03 billion in 2026 and an estimated USD 5.26 billion by 2031?, broadly consistent with industry commentary that places India among the worlds top five seed markets by value, with room for 12-14% annual growth over the medium term as seed replacement rates — still below 30% for several crops — continue to rise?. The Union Budget-anchored National Mission on High-Yielding Seeds, launched in 2024-25, has continued to gather pace: in January 2026 the government unveiled 184 new crop varieties across 25 field crops, including 60 rice, 50 maize and 13 oilseed varieties designed for climate adaptability and lower cultivation costs, taking the cumulative tally of varieties released under the mission past 100 since its launch?.

Regulation remains a live and unresolved question for the industry. The long-pending seed law, intended to strengthen seed traceability and quality registration while protecting farmer rights, remains in draft form as the Draft Seeds Bill 2025; farmer groups, including the Samyukta Kisan Morcha and the All India Kisan Sabha, have pressed for stronger farmer-compensation provisions in the event of seed failure, and the Bills passage timeline remains uncertain4. For an organised-sector player with strong quality-assurance systems such as Nath Bio-Genes, a well-calibrated seed law · once enacted · should reinforce the shift toward certified, traceable seed and work to the advantage of established brands.

? Mordor Intelligence, India Seed Market Size, Share, Trends 2031 Growth Report.
? IBEF, Indias Seed Reforms and Agricultural Productivity Growth in 2025-26.
? Krishijagran, National Mission on High-Yielding Seeds Launched to Enhance Crop Productivity, Climate Resilience and Farmers Income.
4 Mongabay India, Indias long search for a fair seed law remains unfinished (January 2026).

Cotton remains both an opportunity and a challenge for the Indian seed industry. The Cotton Corporation of India (CCI) procured 104.01 lakh bales under the MSP scheme in the 2025-26 marketing season, about 4% higher than 100.16 lakh bales in 2024-25, led by Telangana, Maharashtra and Gujarat, with cotton MSP itself raised by up to 11.84% for 2025-26 and a further increase approved for 2026-27?. These procurement and price interventions have supported farm-gate realisations even as the broader cotton economy continues to wrestle with a structural challenge: the unauthorised, unapproved spread of herbicide-tolerant Bt (HTBT) cotton seed, which industry bodies say now covers a meaningful and rising share of Indias cotton area, undermining certified-seed economics and regulatory discipline?. Nath BioGenes continues to engage with industry bodies and policymakers on enforcement, while emphasising farmer education on the risks of unapproved seed.

? Agronom.info, CCI MSP cotton procurement for 2025-26 rises about 4% to 104.01 lakh bales.
? Krishinews, The Controversy Surrounding HTBT Cotton Seeds in India.

Nath Bio-Genes (India) Limiteds core crop portfolio — spanning cotton, hybrid paddy, maize, vegetables, pearl millet, mustard, wheat, forage, grain sorghum and plant nutrition products — continued to demonstrate resilience and strategic depth through FY26. The cotton-paddy franchise deepened further, now contributing 58% of revenue (up from 52% in FY25), while maize emerged as the fastest-growing category in the portfolio, and the Companys first Uzbekistan revenues marked a new phase of international diversification. The Company operates at the confluence of Indias rising food and nutritional security imperatives, with a product suite and pipeline that spans the Companys key segments as summarised below:

In FY26, cotton sales volumes rose 22.35% YoY to 13.8 lakh packets, with value up 28%, as the production constraints that had limited supply over the previous two seasons eased; management has indicated FY27 volumes could improve further as production stabilises. Flagship hybrids Sanket and Jumbo remained the principal growth drivers, and the Company has indicated an active pipeline of next-generation hybrids intended to better its own recent launches. The unauthorised spread of HTBT cotton remains a monitored industry-wide risk (see Cotton Industry above).

Paddy volumes grew 25% YoY to 75,619 quintals with value up 37%, maintaining paddys position as a core, stable contributor to the topline.

Maize volumes surged 54% YoY to 9,639 quintals with value up 78%, taking maize past 10.72% of total revenue and making it the fastest-growing crop in the Companys portfolio; wheat and mustard together grew 10-15% in value, while bajra held its prior-year gains. Management has reiterated that the NCP strategy is intended to reduce dependence on any single crop, even though cotton and paddys own strong growth meant the NCP share of revenue grew only modestly in percentage terms this year.

Vegetable seed value declined by about 11% during the year; however, average realisation improved 6% from 1,178 to 1,244 per kg, reflecting a deliberate shift toward higher-value, premium products rather than volume-led growth.

The Plant Nutrition Segment declined 18% in FY26, mainly on account of Chinese export restrictions that disrupted input-supply dynamics for the category; management expects normalisation as supply-side pressures ease over the coming year.

FY26 marked the first year the Companys Uzbekistan joint venture (in which the Company holds a 90% equity interest) contributed to the consolidated topline, at approximately 15 crore, as the venture moved from field trials into commercial cotton-seed sales across multiple provinces. Uzbekistans cotton sector remains largely non-Bt, and the Company is working to introduce its hybrid technology into the market over time. The Companys research team sized the Uzbekistan cotton seed opportunity — the market for cotton planting seed itself, distinct from the far larger underlying cotton/commodity market — at roughly USD 100 million, and the broader regional seed market for cotton, cereals and other field crops across Central Asia at about USD 450 million, with this seed-market opportunity potentially approaching USD 1 billion over five to six years as regional governments open up to private and international seed companies. Management does not expect international operations to exceed 10-15% of consolidated revenue over the medium term, reflecting a deliberately conservative approach to a market still being established. The Company also continues to evaluate opportunities in the Philippines and in African markets as regulatory and geopolitical conditions evolve.

In FY26, Nath Bio-Genes recorded standalone total revenue of ?4,316 million (?431.6 crore), up 19% YoY. Gross profit rose 5% YoY to ?2,403 million, though the gross margin normalised to 56% from an elevated 63% in FY25, reflecting a richer, more diversified product and market mix. EBITDA for the year was ?525 million, a margin of 12%, while profit before tax (after exceptional items) grew 11% YoY to ?491 million. PAT stood at ?384 million with a 9% margin; the effective tax rate rose to 11% from an unusually low 5% in FY25, and management has guided to modest further normalisation of roughly 1.5 percentage points going forward. EPS improved to ?23.42, more than double the ?11.3 reported in FY22, taking the five-year track record to a 55% cumulative increase in revenue (from ?2,783 million in FY22) and an increase in EBITDA from ?373 million to ?525 million over the same period.

The balance sheet reflects a deliberate build-up in working capital ahead of the FY27 season: total assets grew to ?10,829 million, inventory rose to ?4,446 million and trade payables to ?1,305 million, while cash and bank balances stood at ?707 million. Finance costs increased to ?133 million from ?96 million in FY25 as the Company financed this inventory build, particularly in cotton, where management indicated production had finally stabilised after two years of constrained output, and where cottons multi-year shelf life supports a gradual, planned liquidation of the higher closing stock over the following two seasons. On a formula basis, operating cash flow was modestly negative during the year, a movement management attributes largely to reduced advance-booking liabilities and the planned inventory build rather than to weaker underlying demand, and one it considers manageable given the Companys cash and bank balances.

For FY27, management has guided to overall topline growth in the range of 15-20%, on a deliberately conservative basis, with cotton expected to grow around 20% and paddy 20-25%, and with EBITDA and net profit margins expected to hold steady with a slight upward bias. The Companys pipeline of new varieties spans cotton, paddy, maize, vegetables and the NCP segment, and management intends to continue investing in R&D, distribution and international expansion while keeping capital expenditure minimal, in line with its long-standing asset-light strategy of leasing processing infrastructure rather than owning it. Management has flagged that the emerging El Ni?o-linked monsoon deficit for 2026 (see Agricultural Industry above) could shift cropping patterns, delay sowing and cause regional demand swings, particularly for rainfed crops, but has expressed confidence that the Companys diversified crop and geographic mix — spanning long-, medium- and short-duration hybrids across multiple regions — will protect overall topline growth even if it weighs at the margin on profitability in an adverse year. Over the medium term, the Company continues to see international operations, led by Uzbekistan, contributing no more than 10-15% of consolidated revenue, and has expressed an aspiration — without a formal commitment — to cross ?500 crore of topline in the near future.

The Company continues to follow an asset-light infrastructure strategy, operating a modest base of owned processing units while leasing third-party capacity as required. It has built cumulative cold storage, warehousing and conditioning capacity of 25,000 metric tonnes. This approach reflects the highly seasonal nature of processing requirements — for instance, maize processing capacity is required for only about 15-20 days a year — making ownership of dedicated plants uneconomical compared with leasing available capacity across the country.

As of FY26, the Company operated 40 breeding stations across 325 acres dedicated to R&D, in collaboration with public research institutions including NRCPB, ICRISAT, CIMMYT and IRRI. This R&D base underpins the pipeline of next-generation cotton, paddy and maize hybrids referenced elsewhere in this report.

Seed production is spread across more than 30,000 acres, supported by a network of over 25,000 contracted growers, providing a scalable and climate-diversified production base.

The Company conducts more than 200,000 quality tests annually across its seed supply chain, including ELISA-based genetic purity testing and ISTA-compliant protocols.

Nath Bio-Genes distribution footprint spans 131 regions and more than 20,000 distributors across India, complemented by its expanding international presence in Uzbekistan and continuing evaluation of Southeast Asian and African markets.

? Mongabay India, Indias long search for a fair seed law remains unfinished.
? Krishinews, The Controversy Surrounding HTBT Cotton Seeds in India.
? Down To Earth, El Nino and Weak Monsoon Systems Drive Indias 40% June 2026 Rainfall Deficit.

As of FY26, the Companys team comprised 452 members, supported by ongoing training and collaboration with global research institutions.

The Company maintains internal audit and compliance systems overseen by its Audit Committee, positioning it to adapt to evolving regulatory, digital and ESG-related disclosure requirements.

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, expectations and estimates regarding future performance may be "forward-looking statements" within the meaning of applicable securities laws, and are based on information currently available to management. Actual results could differ materially from those expressed or implied due to a range of factors, including but not limited to monsoon and weather variability, input and commodity price movements, regulatory changes affecting seed technology and trade, currency fluctuations, and general economic and geopolitical conditions in India and in the Companys export markets.