National Peroxide Ltd Management Discussions

01 Economic Review

Global

The global economy navigated another year of uncertainty in FY2026, balancing easing inflationary pressures with persistent geopolitical tensions, trade realignments, and fluctuating commodity markets. While economic activity remained broadly stable, growth trajectories varied across regions, reflecting differences in monetary policy, consumer sentiment, and industrial activity.

Consumer spending continued to support economic growth across many markets, although purchasing behaviour increasingly reflected and selective premiumisation. Businesses across industries also contended with volatility in commodity prices, freight rates, energy costs, and currencies, necessitating greater operational agility and supply chain resilience.

GDP Growth Rate

	2025	2026 (Projections)	2027 (Projections)
World	3.4%	3.1%	3.2%
Advanced Economies	1.9%	1.8%	1.7%
United States	2.1%	2.3%	2.1%
Euro Area	1.4%	1.1%	1.2%
Emerging Markets and Developing Economies	4.4%	3.9%	4.2%
Emerging and Developing Asia	5.5%	4.9%	4.8%
China	5.0%	4.4%	4.0%
India	7.6%	6.5%	6.5%
Source: World Economic Outlook by IMF, April 2026

Outlook

The global outlook remains cautiously positive, supported by moderating inflation and resilient economic activity across several major markets. However, growth is expected to remain below long-term averages as geopolitical tensions, trade uncertainties, fiscal pressures, and climate-related disruptions continue to weigh on the economic environment.

According to the IMFs World Economic Outlook (April 2026), global GDP growth is projected at 3.1% in 2026 and 3.2% in 2027. While emerging markets are expected to remain key contributors to global growth, they may also face heightened exposure to external shocks, commodity price fluctuations, and evolving trade dynamics. In this environment, adaptability, operational resilience, and strategic execution will remain critical for businesses navigating an increasingly complex global landscape.

India

India continued to be the worlds fastest-growing major economy in FY2025–26, with nominal GDP estimated at approximately US$ 4.2 trillion. Despite an evolving global environment characterized by uneven growth, elevated geopolitical uncertainties, trade disruptions, and commodity price volatility, the Indian economy demonstrated remarkable resilience, supported by strong domestic demand, policy continuity, and sustained public investment.

As per Ministry of Statistics and Programme Implementation

(MoSPI) Indias GDP grew by 7.7% in FY2025 26 driven by robust government capital expenditure, resilient private consumption, and steady performance across the manufacturing and services sectors. Inflation remained broadly within the Reserve Bank of Indias target range, supported by moderating food prices and prudent monetary management.

The countrys macroeconomic fundamentals remained strong. Foreign exchange reserves increased to US$ 697.1 billion as of April 2026, providing a comfortable external liquidity buffer and enhancing resilience against global uncertainties. Fiscal consolidation efforts remained on track, while tax collections and public finances continued to demonstrate stability.

02 Industry Review

2.1 Indian Chemical Industry

Indias chemical industry has emerged as one of the fastest-growing chemical markets globally, establishing itself as the worlds sixth-largest chemical producer and the third-largest in Asia. The sector contributes nearly 7% to the countrys GDP and supports employment for approximately

2 million people, both directly and indirectly, in India. While global trade uncertainties, geopolitical disruptions, tariff-related challenges, and excess capacities have increased volatility across the industry, Indias structural growth drivers continue to support a positive long-term outlook. The domestic chemical market, currently valued at approximately USD 155 165 billion, is projected to reach USD 230 255 billion by 2030, growing at a CAGR of 8 9%. Growth is expected to be driven by rising domestic consumption, expanding industrial activity, increasing export opportunities, and demand from emerging sectors such as electric vehicles, renewable energy, electronics, and semiconductors.

Key Growth Drivers

Rising Consumer Demand

Growing disposable incomes and the expansion of Indias consuming class are expected to drive demand across consumer-centric industries, supporting chemical consumption.

Global Supply Chain Diversification

As companies diversify supply chains and reduce dependence on concentrated sourcing markets, India is well-positioned to strengthen its manufacturing and export capabilities.

Strong Industrial Demand

Continued growth in sectors such as automobiles, construction, pharmaceuticals, electronics, textiles, and consumer goods is expected to drive sustained demand for chemicals.

Government Support

Policy initiatives, infrastructure investments, and budgetary allocations towards the chemicals and allied sectors continue to strengthen the industrys growth prospects.

Shift Towards Sustainable Chemistry

Increasing adoption of green chemistry principles, circular economy practices, and cleaner production technologies is creating opportunities for sustainable and specialty chemical manufacturers.

Outlook

While challenges related to global trade dynamics, geopolitical uncertainties, feedstock price volatility, and competitive pressures are expected to persist, the long-term outlook for the Indian chemical industry remains favourable. Indias growing domestic market, expanding manufacturing ecosystem, and increasing integration into global supply chains position the sector for sustained growth. Going forward, success will be driven by innovation, operational excellence, sustainability-led initiatives, disciplined capital allocation, and the ability to develop differentiated, value-added products.

2.2 Hydrogen Peroxide Industry

Global

The global hydrogen peroxide market continues to witness steady growth, driven by increasing demand for environmentally friendly and high-performance oxidizing agents across a broad range of industries. According to Grandview Research, the market was valued at approximately USD 1.6 billion in 2025 and is projected to reach USD 2.6 billion by 2033, growing at a CAGR of 6.6% during the forecast period.

Hydrogen peroxide is increasingly preferred due to its effectiveness, versatility, and environmentally sustainable profile, as it decomposes into water and oxygen without leaving harmful residues. Demand remains strong across traditional end-use sectors such as paper & pulp, chemicals, mining, and textiles, while emerging applications in water treatment, healthcare, food processing, electronics, and renewable energy continue to create new growth opportunities.

Key Growth Drivers

Growing Demand from Paper & Pulp Industry

Increasing use of hydrogen peroxide as a chlorine-free bleaching agent supports sustainable paper production and recycling activities.

Expansion of Water Treatment Applications

Rising concerns around water scarcity, pollution, and environmental compliance are driving demand for hydrogen peroxide in wastewater treatment and advanced oxidation processes.

Growth in Electronics and Semiconductor Manufacturing

Increasing demand for high-purity hydrogen peroxide in semiconductor fabrication, electronics manufacturing, and solar applications is creating attractive growth opportunities.

Rising Healthcare and Food Safety Requirements

Growing use in sterilization, disinfection, and hygiene-related applications is supporting demand across healthcare and food processing sectors.

Industrial and Mining Applications

Continued usage in chemical processing, mining operations, and environmental remediation contributes to stable long-term demand.

Regional Trends

Asia Pacific remains the largest and fastest-growing market, supported by strong manufacturing activity, infrastructure development, and significant paper production capacity. Europe continues to drive innovation through sustainability-focused regulations and green manufacturing practices, while North and South America are witnessing increased investments in localized production and supply chain optimization.

India

The Indian hydrogen peroxide market continues to demonstrate steady growth, supported by increasing adoption across a wide range of industrial and environmental applications. According to IMARC, the market was valued at approximately USD 198.9 million in 2025 and is projected to reach USD 301.3 million by 2034, growing at a CAGR of 4.6% during 2026–2034.

Growth is being driven by rising demand from key end-use sectors such as paper & pulp, food processing, water treatment, healthcare, and specialty chemicals. Hydrogen peroxide is increasingly preferred as an environmentally friendly bleaching, disinfecting, and oxidizing agent due to its ability to decompose into water and oxygen without generating harmful residues.

2.3 Peracetic Acid Industry

The global peracetic acid market is witnessing robust growth, driven by increasing demand for high-performance disinfection and sterilization solutions across healthcare, food processing, water treatment, and industrial applications. According to Grandview Research, the market was valued at approximately USD 1.2 billion in 2025 and is projected to reach USD 2.3 billion by 2033, growing at a CAGR of 8.3% during 2026 2033.

Peracetic acid has emerged as a preferred disinfectant due to its broad-spectrum antimicrobial effectiveness, rapid action, and environmentally friendly decomposition into non-toxic by-products. Growing emphasis on hygiene, food safety, infection control, and environmental sustainability is accelerating its adoption as an alternative to traditional chlorine-based chemicals.

Key Growth Drivers

Rising Demand for Disinfection Solutions

Increasing focus on hygiene, infection prevention, and food safety is driving adoption across healthcare, food & beverage, and water treatment sectors.

Growing Healthcare Applications

Stringent sanitation protocols, expanding healthcare infrastructure, and rising surgical procedures are supporting demand for sterilization and disinfection products.

Expansion of Food Processing Industry

Increasing processed food production and beverage manufacturing are driving demand for equipment sanitation and surface disinfection solutions.

Water Treatment Opportunities

Growing investments in wastewater treatment infrastructure and the shift towards chlorine-free treatment technologies are creating significant growth opportunities.

Sustainability-Led Adoption

Rising regulatory pressure to reduce harmful chemical residues is encouraging the use of environmentally friendly disinfection chemistries such as peracetic acid.

Emerging Opportunities

Growing demand from pharmaceutical manufacturing, agriculture,industrialcleaning,andsanitationapplications. Increasing adoption in emerging economies supported by industrialization, urbanization, and rising hygiene standards.

Technological advancements in stabilized formulations, automated dosing systems, and high-concentration grades, improving efficiency and expanding application scope.

Regional Trends

Europe remains the largest market, accounting for over one-third of global demand, supported by stringent environmental regulations and high hygiene standards. Meanwhile, North America and Asia-witness growing adoption driven by expanding healthcare, food processing, and water treatment industries.

Outlook

The outlook for the peracetic acid industry remains highly positive, supported by growing awareness of hygiene and food safety, stricter environmental regulations, and increasing preference for sustainable disinfection technologies. As industries continue to prioritize effective, residue-free, and environmentally responsible sanitation solutions, peracetic acid is expected to continue to play an increasingly important role across both traditional and emerging applications.

2.4 Compressed Hydrogen Gas

The growing adoption of hydrogen as a clean energy carrier is driving demand for safe, efficient, and scalable storage solutions across industries. High-pressure gas cylinders and liquid cryogenic tanks remain the preferred storage technologies due to their proven safety, reliability, and operational efficiency. With increasing applications across transportation, industrial processes, and power generation, hydrogen is emerging as a critical enabler of global decarbonization efforts.

The global hydrogen energy storage market was valued at USD 21.6 billion in 2025 and is projected to reach USD 33.9 billion by 2034, growing at a 5.0% CAGR. Asia Pacific accounted for 37.58% of the global market in 2025, driven by investments in clean energy and hydrogen infrastructure.

In India, demand for compressed hydrogen gas is rising, supported by policy initiatives, industrial decarbonisation and the countrys green hydrogen ambitions.

03 Company Overview

Established in 1954, National Peroxide Limited (NPL) is a pioneer in Indias peroxygen chemicals industry and the countrys largest manufacturer of Hydrogen Peroxide. Part of the Wadia Group, the Company operates an integrated manufacturing facility at Kalyan, Maharashtra, with an installed Hydrogen Peroxide capacity of 150,000 MTPA

(50% w/w basis).

NPL serves a diverse customer base across domestic and international markets, catering to industries such as paper, textiles, chemicals, pharmaceuticals, water treatment, and electronics. Alongside Hydrogen Peroxide, the Company manufactures Compressed Hydrogen Gas and Peracetic Acid, supporting a wide range of industrial applications.

Backed by decades of manufacturing expertise, advanced technology, and a strong focus on safety, quality, and sustainability, NPL continues to strengthen its market leadership while delivering reliable and innovative chemical solutions. Through continuous investments in technology, operational excellence, and human capital, the Company remains committed to creating long-term value for customers and stakeholders.

Key Business Strengths

Market Leadership

Indias largest manufacturer of Hydrogen Peroxide with an installed capacity of 150,000 MTPA (50% w/w basis).

Sustainable Chemistry

Hydrogen peroxide manufacturing process designed for high atom efficiency and minimal environmental impact, with water as the primary decomposition by-product. Supports greener industrial operations by reducing hazardous waste generation and promoting sustainable chemical production.

Integrated Manufacturing Infrastructure

State-of-the-art integrated production facility at Kalyan,

Maharashtra, enabling efficient operations and consistent product quality.

Advanced Manufacturing Technology

Utilises globally proven Auto-Oxidation technology, ensuring superior product quality, process safety, and operational efficiency.

Diverse End-Use Applications

Serves a broad range of industries across domestic and export markets through a diversified

Legacy of Trust and Reliability

Over seven decades of industry experience, supported by the strong governance and values of the Wadia Group.

04 Financial Review

During FY 2025-26, the Company delivered stable revenue growth and a improvement in profitability, supported by better operating performance and cost efficiencies. Revenue increased by 1.48%, while EBITDA and PAT improved compared with the previous year.

Key Financial Ratios

As per provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the key financial ratios are given below:

Ratio	As of March 31 , 2026	As of March 31 , 2025	Variance	Explanation in case of variance is more than 25%
Debtors Turnover	8.88%	7.98%	11.20%
Current Ratio	2.77	3.30	-15.96%
Debt-Equity Ratio	0.01	0.02	-50.88%	Decrease on account of repayment of borrowings.
Debt Service Coverage Ratio	5.23	3.88	34.55%	Increase due to increase in profit during the year
Return on Equity Ratio	0.02	-0.01	-360.05%	Increase due to increase in
Inventory Turnover Ratio	3.96	4.47	-11.31%
Net Capital Turnover Ratio	3.26	3.41	-4.19%
Net Profit Ratio	2.01%	-0.78%	-356.72%	Increase is primarily on account of the increase in the Net Profit during the year.
Return on Capital Employed	2.20%	-0.10%	-2220.31%	Increase is primarily on account of the increase in the earning before interest and tax during the year.
Return on Investment	4.66%	6.76%	-30.96%	Decrease is primarily on account of the decrease in the
Operating Profit Margin 10.43% 6.87% 51.88% Increase is primarily on account of the increase in the Profit (%)				Income generated from mutual funds during the year. during the year.
Interest Coverage ratio	6.95	-0.25	-2916.27%	Increase is primarily on account of the increase in the Profit during the year.
Return on Net Worth	1.65%	-0.63%	-360.05%	Increase is networth on account of the Profit during the year.

05 Material Development in Human Resources

Our people are integral to National Peroxide Limiteds continued growth and long-term value creation. During the year, we strengthened our human capital through focused learning and development initiatives aimed at enhancing technical expertise, leadership capabilities and functional competencies. With a strong emphasis on operational excellence, process safety and continuous improvement, employees participated in structured training programmes designed to build future-ready capabilities. We also remained committed to fostering an inclusive, collaborative and performance-driven workplace supported by transparent communication, employee recognition and equal opportunity practices.

The Company continued to enhance employee experience through progressive digitalisation of HR processes while advancing initiatives focused on health, safety and well-being. Regular safety training, emergency preparedness programmes, health check-ups and wellness initiatives reinforced our commitment to creating a safe and supportive work environment. As an organisation, we remain committed to nurturing a culture that empowers our people, encourages innovation and enables them to realise their full potential while contributing to the Companys sustainable growth. As on March 31, 2026, the Companys employee strength stood at 124, compared to 128 as on

March 31, 2025.

06 Risks and Opportunities

National Peroxide Limited is well-positioned to the growing demand for sustainable chemical solutions across industries such as paper & pulp, pharmaceuticals, electronics, food processing, and water treatment. Increasing adoption of Peracetic Acid, rising demand for high-purity Hydrogen Peroxide, and investments in green hydrogen and clean energy infrastructure present attractive long-term growth opportunities.

Key Opportunities

Growing demand for environmentally sustainable chemicals Expanding applications in electronics, solar, and semiconductor industries

Increasing adoption of Peracetic Acid for disinfection and sterilization from Rising investments in green hydrogen and clean energy

Key Risks

Volatility in raw material and energy prices Competitive pressures from domestic and global manufacturers Demand fluctuations across end-user industries

Supply chain and logistics disruptions

NPL continues to address these risks through operational excellence, technology-led processes, robust safety practices, and prudent risk management.

07 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 M/s PKF Sridhar and Santhanam LLP, the Internal Auditor for FY 2025-26, based on guidelines from the Audit Committee and management. Key control activities include segregation of duties, proper authorization of transactions, maintenance of 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.