Nath Industries Ltd Management Discussions

1. INDUSTRY OVERVIEW A. PAPER INDUSTRY

The global pulp and paper market size stood at USD 356 billion in 2024 and is projected to reach USD 362.41 billion in 2025, growing further to USD 1267.8 billion by 2033 at an estimated CAGR of 1.8%.

The Asian region dominates the pulp and paper market share. Asia Pacific is the leading region for the growth of paper-based products, with China being the largest manufacturer and consumer globally. The increasing adoption of pulp and paper products, coupled with improving lifestyles and stronger economic growth, will drive significant market opportunities. As demand for sustainable and eco-friendly alternatives rises, the regions growing industrial sector will further support the expansion of the paper-based product market, positioning it as a key player during the review period.

India ranks as the 15th largest paper producer globally, contributing 5 per cent to the worlds paper market1. The industrys growth is driven by rising demand for corrugated and household paper products. As the fastest-growing paper market worldwide, India is poised for significant expansion, aligning with the countrys economic growth. Paper serves multiple purposes, including carrying, wrapping, protecting, packaging, and functioning as a container. To meet increasing demand, India needs to add around 1 million tonne per annum (TPA) of integrated pulp, paper, and paperboard production capacity beyond the current levels.

The paper industry in India is highly clustered even though it demonstrates resilience, with revenues reaching ? 80,000 crores in FY24 at an annual growth of about 8.2 per cent per annum. The four main segments of the industry—printing and writing paper, newsprint, packaging paper and board, and specialty paper—serve diverse markets both domestically and internationally. The industry is distributed into small, medium, and large paper factories and mills, with over 900 mills scattered across the nation, with a majority of these mills existing in the plateau region of the country. The geographical spread of the industry, as well as the market, is mainly responsible for the regional balance of production and consumption.

Indian population is around 15% of world population but consumes only 5% of the total paper produced in the world. Indias growing FMCG sector and high spending in education coupled with growth in organised retail and demand for better quality paper as well as more health consciousness of people, etc., are triggering factors of growth prospects of Indian Paper Industry. The industry provides direct employment to 0.5 million persons, and indirectly to around 1.5 million.

Demand for specialty paper is expected to increase driven by strong demand for tissue paper. Over fiscal 2023 to fiscal 2025, this segment grew at robust 11-13% CAGR to 1.9-2.3 million tonne by fiscal 2027 from 1.3-1.5 million tonne in fiscal 2022. The main varieties of specialty paper are tissue, decor, thermal, fine printing, cigarette, and business card paper. Rise in urbanisation, emphasis on hygiene through increased government thrust (via initiatives such as Swatch Bharat), and steady rise in healthcare and hospitality demand will lead to rise in demand for tissue paper consumption. Moreover, rise in the number of cashless transaction (ATM, debit/credit card purchase, etc.) and increased billing (owing to rise in share of organised retailing) will boost demand for thermal paper.

While India Paper Industry growth is predicted to 5.5% -6.5% CAGR by Research and Markets during 2025-2030 and more particularly the Laminates Industrys growth in India during next five years is estimated to an excited rate of 10%-12% CAGR.

The fastest growth of 13.3 percent per annum is being exhibited by the tissue segment, aided by increased awareness about health and hygiene, a characteristic of a growing economy. Tissue is followed by cupstock growing at 10.5 percent. However, both tissue and cupstock have relatively smaller market size together accounting for about 4 percent share in total domestic consumption.

Increasing demand for Laminates and tissue paper and packaging is expected to increase due to the growth of e-commerce as well as the other B2B and B2 C platforms .

B. CHEMICAL INDUSTRY

Sulphuric acid, a highly reactive acid, is completely miscible in water. It is one of the extensively produced and consumed commercial chemicals globally. Sulphuric acid is the largest volume commodity chemical produced in the world. Sulphuric acid is an odourless, colourless liquid, which is extensively utilized in the phosphate fertilizer industry.

The global sulpuric acid market was valued at USD 23.2 billion in 2024 and is estimated to grow at a CAGR of over 11.2% from 2025 to 2034. Major contributors of demand for the global sulphuric acid industry include key applications across multiple end-use sectors, among which majorly include the chemical industry, metals processing industry, as well as fertilizers.

The India Sulphuric Acid Market size was valued at 16.94 Million Tonnes in 2023 and the total India Sulphuric Acid revenue is expected to grow at a CAGR of 6.2% from 2024 to 2030, reaching nearly 25.82 Million Tonnes by 2030. The India sulphuric acid market is set to grow with increasing use in fertilizer and industrial chemical processing, bolstered by government initiatives to collaborate with global manufacturing firms.

The sulphuric acid business is a highly significant industry in numerous industrial applications, particularly fertilizers, metallurgy, and chemicals. It is a highly reactive and highly versatile industrial acid possessing highly powerful oxidizing properties. Growth in the market has one of the main causes in the increasing demand for fertilizers, and more specifically phosphate fertilizers, since sulphuric acid is a major ingredient in their manufacture. Besides, applications in petrochemical processing, chemical manufacturing, and wastewater treatment aid in the development of the market. The market is also burdened with high interest due to its use in the manufacture of batteries, particularly electric vehicle batteries.

Asia is the globes largest market for sulphuric acid, while India and China are its largest consumers. High-speed industrialization, urbanization, and agriculture growth are the drivers of demand in the region. Sulphuric acid depends heavily on the fertilizer industry to produce phosphate fertilizers because agriculture is a strongly contributing industry in nations such as India. Furthermore, Chinese manufacturing dominance needs sulphuric acid to process metal, chemicals, and batteries. The development of electric vehicles in Asia is similarly boosting demand in lead-acid battery manufacturing for sulphuric acid. Expansion in wastewater management and environmental issues is also triggering market growth. Environmental concerns surrounding acid emissions and handling, on the other hand, are setting governments to place stricter regulations and forcing companies to adopt cleaner manufacturing technologies. Despite disruption, increasing Asia-Pacific industrial and agricultural activity will continue to drive sulphuric acid consumption to be the key regional market over the next two to three years.

Based on application, the sulphuric acid market is segmented as fertilizers, chemical manufacturing, metal processing, petroleum refining, textile industry, automotive, pulp & paper, and others. Fertilizers held a dominant market share of around 55% in 2024 and is expected to grow at a lucrative pace till 2034. The global market is driven by fertilizers owing to rising global demand for agricultural production. Chemical production matches sulphuric acids versatility and plays an important part in many chemical reactions. Its necessary in metal mining to get such metals as copper and zinc out of the ground. Moreover, Sulphuric Acid is an important chemical used during petroleum refining, helping to create gasoline and other crucial fuels, shining light on its importance and necessity within this industry.

Indian economy is basically an agrarian economy and even now nearly 68% of the workforce directly or indirectly depends on agriculture. The rise in demand for phosphate fertilizers is driving the India sulphuric acid market. The growing application of sulphuric acid in the processing of fertilizers and other industrial chemicals, coupled with rising initiatives by the Government of India to collaborate with global manufacturing firms, is further expected to drive India sulphuric acid market during the forecast period.

In terms of consumption, the fertilizer segment consumed around 60% of manufactured sulphuric acid. Further, sulphuric acid is widely consumed in the synthesis of specialty chemicals such as nitric acid, hydrofluoric acid, dyes, pigments, and titanium dioxide. Therefore, demand for sulphuric acid from the chemical synthesis segment is projected to rise at a considerable pace during the forecast period. Sulphuric acid is used to manufacture rayon. Sulphuric acid serves as an electrolyte in lead-acid storage batteries. Sulphuric acid is used in the pulp and paper industry, often for use in chlorine dioxide generation. Sulphuric acid is used in many other chemical processes and various wastewater and pH control applications.

2. Opportunities and Threats

PAPER INDUSTRY

OPPORTUNITIES:-

THERMAL PAPER

The India thermal paper market size reached USD 184.50 Million in 2024. Looking forward, the market is expected to reach USD 328.68 Million by 2033, exhibiting a growth rate (CAGR) of 6.10% during 2025-2033. The market is driven by increasing digital transactions, widespread adoption of point-of-sale (POS), increasing e-commerce growth, expanding retail and logistics sectors, rising healthcare applications, and ongoing innovations in eco-friendly alternatives. The Indian thermal paper market is experiencing substantial growth, driven by increasing digital transactions, the expansion of retail and e-commerce sectors, and the rising adoption of point-of- sale (POS) systems. This growth is further fuelled by the healthcare and logistics industries, which also rely on thermal paper for various applications

SUSTAINABILITY AND ECO-FRIENDLY SOLUTIONS

A factor in the pulp and paper market growth is the growing demand for sustainable and ecofriendly packaging solutions. Paper is uniquely placed to offer an environmentally sustainable alternative as it is biodegradable, recyclable and is produced from sources which are renewable and sustainable. Paper can be recycled up to 6-7 times, making it one of the most recycled products in the world. The increasing consumer awareness of environmental enterprises has driven the demand for eco-friendly and sustainable packaging results. Pulp and paper products, being biodegradable and recyclable, have become favored choices in packaging diligence, particularly for food and e-commerce operations. Major companies are espousing paper- grounded packaging to meet nonsupervisory norms and consumer prospects. Inventions similar as lightweight and durable paper packaging have further enhanced the markets appeal, boosting the adoption of paper over plastic alternatives. This trend is anticipated to play a vital part in driving the growth of the pulp and paper market during the forecast period. Paper-based alternatives are increasingly gaining popularity due to their minimal environmental impact.

DEMAND FOR BETTER PACKING

The demand for better quality packaging of FMCG products, textiles and pharmaceuticals, coupled with a booming e-commerce, rising healthcare spends, over-the-counter medicines and increasing preference for packaged ready-to-eat foods is leading to a rising demand for packaging paper and paperboard.

EXPANDING E-COMMERCE

The expanding e-commerce sector is another key aspect of the pulp and paper market. The rapid growth of thee-commerce assiduity has significantly increased the demand for packaging materials, with paper and cardboard being primary choices. The rise in online shopping requires robust yet lightweight packaging solutions, encouraging manufacturers to invest in advanced pulp and paper products. Corrugated boxes and paper- based void fillers are considerably used for shipping purposes, icing product safety and sustainability. Supporting its expansion and fostering invention in packaging technologies as e-commerce continues to flourish encyclopaedically, particularly in developing regions, the pulp and paper market benefits from harmonious demand.

CUSTOMISATION AND PERSONALISATION

With the rise of digital printing, brands are increasingly offering personalised packaging to enhance consumer engagement. This trend is transforming packaging from a functional necessity into a powerful marketing tool.

CHALLENGES TOWARDS PAPER INDUSTRY IN INDIA INCREASING IMPORTS

The increasing import of paper (excluding newsprint) is likely to hinder domestic production, as the industry faces intense competition from imports, especially from ASEAN countries and China. Free trade agreements (FTAs) and import concessions have disadvantaged the domestic paper sector. The surge in imports appears to be causing an oversupply, which may limit production. India grants several concessions on paper imports and has previously signed FTAs ith ASEAN and South Korea, allowing these countries to export paper to India without any import duty. In 2024, India imported approximately 25 per cent of its wood pulp requirements from countries like Brazil and Indonesia. India provides import tariff concessions to China and other countries under the Asia Pacific Trade Agreement (APTA). It offers a 30 per cent margin of preference. Imports of paper and paperboard from China significantly jumped by 44 per cent during the first half of the ongoing fiscal year.

LACK OF INFRASTRUCTURE FOR WASTE COLLECTION

In India, wastepaper collection primarily relies on an informal network of ragpickers, small scrap dealers, and local aggregators who manually gather, sort, and supply used paper for recycling. This decentralized and unorganized system leads to inefficiencies in wastepaper recovery, with India achieving a paper recycling rate of around 30-35 per cent, significantly lower than developed countries, where rates exceed 60-70 per cent. The lack of a structured collection mechanism results in substantial paper waste being either incinerated or disposed of in landfills, limiting the availability of high-quality recovered fibre for the domestic paper industry. Additionally, the absence of standardized segregation at the source further contaminates the collected wastepaper, reducing its usability in high-quality paper production. The heavy reliance on manual collection also exposes the paper industry to supply chain disruptions and inconsistent raw material availability, making it dependent on expensive imports.

ENVIRONMENTAL REGULATIOS AND RESOURCE SCARCITY

One of the significant challenges in the pulp and paper market is navigating strict environmental regulations and addressing resource failure. Governments worldwide have assessed strict guidelines on deforestation, carbon emigrations, and water consumption, which impact product processes. The assiduity heavily relies on wood and water, both of which are getting increasingly scarce due to climate change and over-extraction. Compliance with environmental norms frequently demands expensive technological upgrades, adding functional charges. Also, the growing mindfulness of ecological issues has led consumers to demand sustainable alternatives, increasing pressure on traditional paper manufacturers to borrow eco-friendly practices while maintaining profitability.

CHEMICAL INDUSTRY

OPPORTUNITIES:

SHIFTING SUPPLY CHAINS - CHINA + 1 STRATGEY

After decades as the largest chemical manufacturer in the world, China is currently dealing with several serious issues like rising labour costs, strict environmental laws, and geopolitical trade tensions. Because of this, most of the industry players are starting to adopt the China+1 strategy,_which diversifies supply chains to reduce heavy dependency on a single country. This presents an opportunity for India to become a more popular destination for major global chemical players.

AGRARIAN ECONOMY

Indian economy is basically an agrarian economy and even now nearly 68% of the workforce directly or indirectly depends on agriculture. The rise in demand for phosphate fertilizers is driving the India sulphuric acid market.

GROWTH IN FERTILIZER PRODUCTION

The farm sector is a major off-taker of Sulphuric Acid, particularly for the manufacture of phosphate fertilizers. With India prioritizing food security and yield improvement, fertilizer production is expanding. Initiatives such as PM-Kisan and soil health schemes promote the use of fertilizers, increasing demand. Government subsidy initiatives and initiatives for soil health are propelling higher consumption of sulphur fertilizers. The growth is backed by establishing new fertilizer units as well as increasing capacities in existing plants. Adding Sulphuric Acid production to the fertilizer production increases efficiency and economy, enabling a continuous supply. This segment will remain the leader in demand, vindicating Sulphuric Acid‘s important position in facilitating national agricultural output.

INCREASING DEMAND FROM BATTERY INDUSTRY

Increased demand for battery manufacturing sulphuric acid comes mainly due to increasing demand for electric vehicles and renewable energy storage devices. Sulphuric acid used as an electrolyte in lead-acid batteries extensively used as an energy storage vehicle, industrial, and standby power system has been the largest driver of demand for demand growth during recent years. With more production of EVs, hybrid vehicles, and solar and wind energy systems, there is a greater demand for effective battery storage, hence the demand for sulphuric acid. Lead-acid batteries are also used in telecommunication and power backup systems, hence its applications. Battery recycling is also becoming more effective as well, with greater recovery and re-use of sulphuric acid, hence becoming more eco-friendly. Besides, technology related to batteries is also improving to enhance efficiency and durability of the battery and thereby increase the usage of sulphuric acid in energy storage products as well. With the trend of going renewable, the global market for sulphuric acid will also improve in the field of the battery industry.

GROWTH IN URBAN WATER TREATMENT APPLICATIONS

Sulphuric acid is finding new uses in urban waste treatment and sludge processing. Private companies and municipal corporations are making use of acid hydrolysis for enhancing the dewatering of sludge and lowering levels of biohazard. The practice is increasingly common in high-density urban areas like Delhi and Bengaluru. It creates a new channel of demand for acid while at the same time staying aligned to Swachh Bharat and smart city missions, prompting suppliers to broaden services and modify distribution logistics accordingly.

PLI SCHEMES

A PLI Scheme allocating a massive ?18,000 crore to boost domestic chemical and pharmaceutical manufacturing, out of which ?6,940 crores were reserved for developing the 41 critical KSMs (Key Starting Materials) and APIs (Active Pharmaceutical Ingredients) targeted at reducing import dependence. This is indirectly expected to attract more than ?50,000 crore in investments and create 20,000 jobs.

PCPIRs

The PCPIRs are special economic zones (SEZs) designed to facilitate petroleum and petrochemical production. The government aims to harness the benefits of shared infrastructure and support services to accelerate investment and industrial/manufacturing development in PCPIRs. Under the new PCPIR Policy, the government estimates investments to reach ?10 lakh

crore by 2025. Dedicated chemical hubs like the Petroleum, Chemicals, and Petrochemical Investment Regions (PCPIRs) in the states of Gujarat, Andhra Pradesh, Odisha, and Tamil Nadu are leading large-scale manufacturing with shared infrastructure and logistical benefits. This PCPIR policy is expected to create 33.83 lakh job opportunities, 80% of exports over the next two decades.

HIGE FDI INVESTMENTS IN CHEMICALS

Between April 2000 and March 2024, FDI inflows to the chemicals sector (excluding fertilisers) totalled $22.146 billion. Moreover, the industry is projected to receive further investments amounting to ?8 lakh crore by 2025.

SKILL INDIA AND PM KAUSHA VIKAS YOJANA

Through these schemes, the government is actively preparing the incoming young workforce with all the necessary technical skills needed for chemical manufacturing. These programs aim to train over 10 million individuals annually over the coming years, addressing the skill gap in the chemical and pharmaceutical sectors.

These strategic opportunities in fertilizers, chemicals, mining, textiles, and water treatment are transforming Sulphuric Acid ‘s market position in India. Industrialization, government support, and infrastructure growth are driving consumption growth over the long term. Integrated applications are enhancing market robustness while optimizing operating efficiency. With the growth of these industries, Sulphuric Acid will experience diversified, stable, and high-volume demand, cementing India as a key market and manufacturing destination.

CHALLENGES TOWARDS SULPHURIC ACID INDUSTRY

TIGHT ENVIRONMENT REGULATIONS

Tight environmental regulations on emissions and treatment are the largest concern of the sulphuric acid business. Sulphuric acid production releases sulphur dioxide, a gigantic pollutant and the cause of acid rain. Governments across the globe have enacted strict regulations to cap emissions, making production costly for manufacturers to meet. Apart from that, safe handling and transportation of sulphuric acid require specialized equipment, which makes it costly to run. These regulatory problems may deter markets to expand, particularly in the very highly regulated markets.

UNSTABLE RAW MATERIAL PRICES

The sulphuric acid business has volatile prices of raw materials, i.e., oil and elemental sulphur. Being an oil refinery by-product, sulphuric acid price directly impacts production cost and sulphuric acid availability. Causes of volatility include world economic trends, political unrest, and disruptions in the supply chain. Demand-based price fluctuation due to the industry also influences price movement. To counter these threats, firms are concentrating on alternative production processes as well as sulphur recovery technology. Fluctuating raw material prices continue to be the largest challenge for the sulphuric acid industry, however.

3. Internal Control Systems and their adequacy

The Company has an adequate system of internal controls in place. It has documented policies and procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations and protecting assets from unauthorised use or losses, compliances with regulations. The Company has continued its efforts to align all its processes and controls with global best practices.

The internal control systems are regularly monitored, reviewed for their effectiveness and corrective actions are taken for its efficiency and effectiveness by the audit committee. It underlines the Companys commitment towards strong governance and operational integrity.

4. Financial performance with respect to operational performance

The Company achieved EBIDTA of Rs. 34.67 Crores on total income of Rs. 432.55 Crores as against the EBIDTA of Rs. 16.92 Crores achieved on total income of Rs. 325.22 Crores in previous year. The EBIDTA for the current year was improved to 8.02% from 5.20% achieved in the previous year. Profit after tax recorded for the year is Rs 9.74 Crores as against Rs 0.49 Crores recorded in the previous year.

5. Development in human resources/industrial relations front

The Company believes in engaging human resources as they are the key differentiator for the success of the Company. Keeping the employees engaged and committed can go a long way in attainment of objectives and ensuring sustained business performance. In line with this, the Company has initiated several interventions that will enhance the engagement of the employees. Being a people centric organisation, the Company recognises the significance of building next generation leadership by developing internal talent to meet the organisational objectives. Through this, the human resources function continues to align its strategic interventions and processes, while simultaneously addressing the needs of multiple stakeholders and maintaining a competitive employee cost. The Company continues to have cordial and harmonious industrial relations across all the manufacturing units

	For and on behalf of the Board,
	Akash Kagliwal
Place: Mumbai	Managing Director
Date: 12.08.2025	(DIN:01691724 )