National Peroxide Ltd Management Discussions

Economic Scenario

Indias economy continued to show strong momentum despite global uncertainty, registering a 7.4% year-on-year growth in the March 2025 quarter exceeding expectations. For the full fiscal year 2025, the economy grew by 6.5%, in line with the governments projection. This performance was supported by robust domestic drivers, including strong consumption across both rural and urban areas, increased investment in infrastructure–particularly public capital expenditure–and ongoing policy reforms that boosted business confidence and economic resilience. Despite external challenges such as global trade disruptions and elevated interest rates in advanced economies, inflation moderated, and domestic demand remained firm, reinforcing Indias status as one of the fastest-growing major economies.

Looking ahead, the International Monetary Fund (IMF) projects Indias GDP growth at 6.2% in 2025 and 6.3% in 2026. This outlook is driven by solid agricultural and industrial activity, resilient rural demand, and improving consumer confidence. While global risks including trade barriers, supply chain disruptions, and geopolitical tensions–continue to pose challenges, Indias ability to navigate global shifts and capitalise on domestic strengths will be key to maintaining stable and sustainable economic growth.

Indian Chemical Industry

The chemical sector is a fundamental pillar within the Indian economic framework, playing a pivotal role in contributing to the countrys financial stability and growth. India ranks as the sixth-largest producer of chemicals globally and the third-largest in Asia, thereby positioning the country as a key contributor to the international value chain.

India is emerging as a pivotal manufacturing hub, with the potential to benefit from the China strategy, leveraging its low manufacturing wages and policy reforms aimed at stimulating manufacturing, despite challenges such as higher logistics cost.

The Indian chemical industry was valued at $254.3 billion in FY23 and $278.1 billion in FY24. It is projected to grow at a CAGR of 7.2% from FY19 to FY30, reaching $383 billion by FY30. This expansion is driven by rising demand across end-user sectors, particularly for specialty chemicals and petrochemicals (CPC). Looking further ahead, demand for CPC in India is expected to nearly triple to $1 trillion by 2040.

Indias appeal as a global manufacturing hub is underpinned by low production costs, a large and cost-effective labour force, and an abundant pool of technically skilled professionals. This enables companies to maintain operational efficiency while scaling production for both domestic and international markets.

India has significantly strengthened its IPR regime in recent years, offering enhanced protection and enforcement of patents and trademarks. This has positioned the country as a trusted partner for global chemical and pharmaceutical innovators seeking to collaborate on R&D and technology transfer with confidence.

Indias capabilities in niche specialty chemical segments such as flavours and efficientfragrances, agrochemicals, nutraceuticals, and personal care ingredients have gained international acceptance. Over 50% of the production in these segments is exported, underscoring Indias rising global relevance and reliability as a supply partner.

There is a growing shift toward personalised, eco-conscious, and health-oriented products. Consumers are increasingly prioritising natural, non-toxic, and sustainable options in areas like personal care, home cleaning, and food additives. This trend is driving demand for green packaging, bio-based surfactants, and plant-derived ingredients—offering high-margin growth opportunities for Indian manufacturers.

Indias per capita chemical consumption remains significantly below the global average, but is rising rapidly due to urbanisation, industrialisation, and income growth. This presents vast headroom for expansion, particularly in performance chemicals, specialty materials, and advanced intermediates.

The integration of digital tools such as real-time data analytics, IoT-based monitoring, AI-driven forecasting, and automated process control–is revolutionising chemical manufacturing. These technologies are enhancing operational efficiency, enabling predictive maintenance, and optimising supply chain responsiveness, making Indian firms more globally competitive.

Sustainability is no longer optional its a strategic imperative. Indian chemical companies are increasingly investing in green chemistry, circular economy models, and low-carbon production methods. R&D efforts are focusedonbiodegradableformulations,energy-processes, and resource recycling, aligning with global ESG expectations and regulatory trends.

Indias chemical sector is set for strong growth, supported by rising per capita consumption, supply chain diversification away from China, and favourable government policies. Evolving consumer preferences for eco-friendly and health-focused products are driving demand for sustainable and bio-based chemicals, creating high-margin opportunities.

Digital transformation is enhancing efficiency and competitiveness through AI, IoT, and advanced analytics. At the same time, sustainability has become a core priority, with Indian companies investing in green chemistry and circular economy practices to meet global

ESG standards.

The Company aligns with these trends, positioning the business to tap into expanding domestic demand and growing global opportunities.

Hydrogen Peroxide Industry

Hydrogen peroxide (H O ), a clear, slightly viscous liquid that decomposes into water and oxygen, is known for its antimicrobial and oxidative properties. It plays a crucial role in disinfection, biosynthetic reactions, and microbial control in water systems and cooling towers, making it valuable across diverse industries. The hydrogen peroxide industry is a significant market for chemical production, with applications spanning various sectors including pulp and paper, textiles, electronics, and water treatment. Driven by factors like increased demand from these end-use industries and a growing focus on sustainable solutions, the industry is projected to experience continued growth.

Hydrogen peroxide is a key bleaching agent, enhancing brightness and reducing harmful by products.

Used as a bleaching agent for natural cellulose-based fibers cotton and linen.

A potent oxidizing agent for removing contaminants and disinfecting.

Used in cleaning, etching, and other manufacturing processes.

Used in food processing, aseptic packaging, and other applications.

According to Research and Markets, the hydrogen peroxide market is witnessing robust growth. Valued at $3.45 billion in 2024, it is projected to reach $3.67 billion in 2025, growing at a CAGR of 6.2%, driven by demand from the pulp and paper, wastewater treatment, textiles, consumer products, and healthcare sectors.

Looking ahead, the market is expected to grow at an even faster pace, reaching $5.05 billion by 2029 at a CAGR of 8.3%. Growth will be fuelled by increasing environmental concerns, rising adoption in water treatment, eco-friendly bleaching, expanding healthcare use, and innovations in production. Key trends include sustainable manufacturing, growth in food and beverage applications, and advanced packaging and storage solutions.

According to a recent report by IMARC Group, the Indian hydrogen peroxide market reached $189.4 million in 2024 and is projected to grow to $299.9 million by 2033, at a CAGR of 4.98%.

• Rising demand from the F&B industry for disinfection and sanitation.

• Widespread use in the pulp and paper sector as a bleaching agent.

• Government regulations promoting eco-friendly, emission-free solutions.

• Growing applications in water treatment and pollution control.

• Increased usage in sanitizers and hygiene products post- COVID-19.

Peracetic Acid Industry

Peracetic acid is widely used as a disinfectant and sanitizer across various industries, including food processing, medical facilities, and wastewater treatment.

Its effectiveness against a broad range of microorganisms, combined with its biodegradable nature, makes it a popular choice for sanitization and sterilization applications.

According to Business Research Company, the global peracetic acid market was valued at $1.13 billion in 2024 and is expected to reach $1.83 billion by 2029, growing at a CAGR of 10.1%. This growth is fuelled by increasing demand from end-use industries, especially in Asia Pacific, along with regulatory approvals and enhanced product performance in Europe and the US. Widely recognised for its strong disinfectant and eco-friendly properties, peracetic acid is gaining traction across healthcare, food processing, water treatment, and pulp & paper sectors. The availability of various product grades and the rise in sustainable sanitation needs continue to drive market expansion.

Company Overview

National Peroxide Limited (NPL) is a publicly listed company on BSE Limited, Mumbai. A pioneer in peroxygen chemicals in India, NPL is the countrys largest manufacturer of

Hydrogen Peroxide, boasting an impressive installed capacity of 150,000 MTPA (on 50% w/w basis). Its fully integrated manufacturing facility is strategically located in Kalyan, Maharashtra. NPL is proud to be certified with the Responsible Care Logo by the Indian Chemical Council, affirming its commitment to safe and sustainable chemical manufacturing.

As part of the Wadia Group, known for its forward-thinking approach and commitment to innovation, National Peroxide

Limited is Indias largest manufacturer of Hydrogen Peroxide with a capacity of 1,50,000 MTPA (on a 50% w/w basis), located in Kalyan, Maharashtra. The Company also produces Compressed Hydrogen Gas and Peracetic Acid for diverse industrial applications. The recent expansion in hydrogen peroxide exports to over 30 countries has strengthened National Peroxide Limiteds global presence and enhanced its reputation both domestically and internationally. Supported by investments in technology and a skilled workforce, the Company focuses on operational efficiency and maintaining high standards of product quality and customer service to sustain its growth trajectory in the chemical manufacturing industry. The equity shares of National Peroxide Limited (formerly known as NPL Chemicals Limited) were listed and admitted to trading on BSE Ltd. effective from July 04, 2024. This milestone marks a significant step forward in the Companys journey towards broader market participation and shareholder engagement.

The financial performance in FY 2024 25 reflects challenging year with contraction in both top-line and bottom-line metrics. The company experienced a notable decline in revenue, due to market headwinds, reduced demand, and rapid expansion by domestic players setting up new H O plants leading to oversupply, putting downward pressure on prices and profitability. We recorded revenue of 29136.11 Lakhs with an EBITDA of 1969.67 Lakhs and a margin of 6.76%. Our Profit after Tax (PAT) stood negative at (224.64) Lakhs, with a negative PAT margin of (0.77%). This calls for a deeper review of sales channels, customer retention, revenue recovery strategies, cost control and margin improvement and competitive positioning. We remain confident in our ability to capitalise on emerging opportunities and drive long-term value.

Internal Control

The Companys internal control system is designed to provide reasonable assurance on the effectiveness and efficiency of operations, accuracy of financial reporting, and compliance with applicable laws and regulations.

An annual audit plan is prepared by the Internal Auditor based on guidelines from the Audit Committee and management. Key control activities include segregation of duties, proper authorization of transactions, maintenance ofa adequate records, physical safeguards for assets, and independent performance checks. The Company regularly assesses risks, monitors implementation, and updates controls as needed.

The Internal Auditor reports directly to the Audit Committee and attends all its meetings. Audit reports include detailed findings, risk ratings, and recommended corrective actions. The internal financial control systems are well-aligned with the Companys nature, scale, and operations.

Cautionary Statement

This report contains statements that are “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives and other statements relating to Companys future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, several risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macroeconomic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance.

Company undertakes no obligation to publicly revise any forward-looking statements to reflect future/likely events or circumstances.