Nova Agritech Ltd Management Discussions

1. Economic Review

Global Economy

Despite facing recessionary threats, geopolitical uncertainties, trade disruptions, and inflationary pressures, global growth in 2024 remained subdued, with world GDP estimated at 3.3%. This growth was uneven and largely driven by the robust performance of the US economy. Central banks in developed economies, led by the US, implemented strategic rate cuts as inflation began to ease, though their approach remains cautious.

Amid political and economic uncertainties, including elections in major democracies, the global economy showed resilience. However, significant risks persist:

• Intensifying geopolitical tensions

• Persistent inflation

• Potential financial market volatility

At the same time, transitions in green energy and digitalisation offer opportunities for innovation and sustainable growth. Coordinated global efforts will be critical to navigating these challenges and supporting development.

The International Monetary Fund (April 2025) has revised global growth projections for 2025 downward to 2.8%, from the earlier forecast of 3.3%. This slowdown is mainly driven by the impact of new trade measures, rising uncertainty, and weakening business and consumer sentiment.

Indias economy continued to show resilience amid global uncertainty, supported by strong domestic consumption and sustained government spending. Inflation has moderated, and liquidity conditions have stabilised, reflecting effective policy measures. However, risks remain from foreign portfolio outflows and a weakening rupee. For the full fiscal year 2025, the economy grew by 6.5% indicating steady economic momentum.

Indias macroeconomic fundamentals remain strong, underpinned by healthy corporate and financial sector balance sheets. To sustain and accelerate long-term growth·especially as globalisation slows·India must leverage its demographic dividend through structural reforms and deregulation, laying the foundation for a more competitive, dynamic economy.

The Reserve Bank of India (RBI) forecasts GDP growth at 6.5% for FY25, supported by:

• Rising agricultural and industrial output

• Resilient rural demand

• Strong private investments

• Improving consumer sentiment

Despite geopolitical and trade uncertainties, Indias growth momentum is expected to remain firm. The economic outlook remains favourable, underpinned by strong fundamentals, a young and growing workforce, increasing formalisation of the economy, and targeted policy initiatives. Medium-term prospects are expected to be further bolstered by accelerated infrastructure development, higher public capital expenditure, and productivity-enhancing structural reforms.

The agriculture sector remains the backbone of Indias livelihood economy. As one of the worlds top producers of agricultural and food commodities, Indias agri-sector plays a vital role in both domestic sustenance and global supply chains. Along with its allied sectors, agriculture is the largest source of employment in the country, engaging approximately 55% of the population and contributing around 16% to the national GDP.

The agriculture sector continued its strong momentum in FY25, recording an impressive 5.4% growth in the January-March quarter·significantly higher than the 0.9% growth during the same period last year. This robust performance is expected to lift the full-year Gross Value Added (GVA) in agriculture and allied activities to 4.6%, up from 2.7% in FY24. A key driver of this growth was the favourable monsoon, which contributed to healthy kharif and rabi harvests, boosting overall agricultural output.

Today, the sector is witnessing a significant transformation driven by technological innovation and digital adoption. Government initiatives aimed at improving farmer welfare·such as enhanced access to credit, insurance, and support services·are driving inclusive growth and creating a more resilient and future-ready agri-ecosystem.

• Focus on food security & inflation control -

Continued emphasis on ensuring food availability while managing domestic food inflation.

• Technological advancements driving growth

- Precision farming, IoT, AI, and automation are accelerating agricultural transformation, with the digital agriculture market projected to grow at a CAGR of ~9.17% (2025-2030).

• Emerging market leadership - Countries like India and Brazil are leading agri-innovation with strong government support and rapid adoption of modern practices.

• Shift towards high-value & organic crops - Farmers are increasingly diversifying into high-value, organic, and exotic crops to tap into export potential and cater to evolving consumer demand.

• Digital empowerment of farmers - AgriTech platforms are offering tools for weather forecasting, pest prediction, and precision input usage, enabling data-driven decisions.

• Sustainable farming practices on the rise -

Techniques like regenerative agriculture, organic farming, water conservation, and use of biofertilisers are helping mitigate environmental impact and enhance soil health.

• Rural digital connectivity as a catalyst - Greater digital penetration is expanding access to digital payments, crop insurance, and agri-credit in rural areas.

• Changing consumption patterns - Urbanisation and a growing female workforce are driving demand for processed and frozen foods, influencing crop selection and supply chains.

• Supportive policy environment - Government subsidies covering ~50% of sustainability initiatives are encouraging adoption of eco-friendly practices and agri-biotech solutions.

Indias agricultural exports surged 6.47% in FY 2024-25, reaching $51.91 billion, as reported by the Union Ministry of Commerce. Notably, the dairy sector witnessed a 54% increase in export value, highlighting Indias emerging strength in global value-added dairy products. While overall merchandise exports remained relatively flat at $437 billion, agriculture and allied sectors have proven resilient, with strong international demand for dairy, organic produce, and coffee.

According to Rubix Data Sciences, Indias agrochemical market is estimated at USD 11.2 billion in FY2025, registering 8.7% year-on-year growth despite global disruptions. The export slump in FY2024 was largely attributed to inventory destocking, intense pricing pressure from China, and subdued demand in key global markets. However, with improving global agricultural activity and stabilising supply chains, a moderate recovery is expected in FY2025, buoyed by Indias cost-efficient manufacturing capabilities.

A standout trend seen is the surge in herbicide exports, which clocked a 20% CAGR between FY2020 and FY2025. Their share of Indias total agrochemical exports rose from 31% to 37%, underscoring rising global demand-driven by high agricultural labour costs·and Indias strength in delivering affordable, high-quality crop protection products.

There has been a geographic shift in herbicide demand, with Japan surpassing Brazil as the second-largest export destination. Meanwhile, the US and Brazil remain dominant markets for Indian insecticides and fungicides. While exports declined by 22% in FY2024, the sector is projected to reach USD 14.5 billion by FY2028, growing at a CAGR of 9%.

The outlook for Indias agriculture and rural economy remains upbeat, supported by favourable developments such as a robust rabi wheat harvest, increased summer sowing activity, and the forecast of an above-average southwest monsoon. Rising rural consumption, a revival in informal sector momentum, and easing inflation are expected to create a conducive environment for agricultural growth. As the sector grapples with the complex challenges of food security, climate change, and sustainable development, the path forward will depend on the thoughtful integration of innovation, technology, and policy support-anchored in ecological responsibility. Coordinated actions across governments, farming communities, academia, and industry will be essential to building long-term resilience.

Reinforcing this optimism, India has set an ambitious foodgrain production target of 354.64 million tonnes for 2025-26. This record-setting goal is underpinned by expectations of favourable monsoon conditions and supported by targeted efforts to strengthen kharif crop performance, ensure fertilizer availability, and drive pan-India campaigns promoting modern, productivity-enhancing farming practices.

Nova AgriTech Limited is a leading manufacturer of agricultural inputs, with a strong focus on soil health management, crop nutrition, and crop protection. The company is driven by a commitment to technology-led innovation and ecological responsibility. With a robust R&D foundation, NATL develops sustainable and nutritionally balanced products that meet the evolving needs of farmers while upholding high environmental standards.

With a diversified product portfolio backed by 770 registrations across soil enhancers, crop nutrients, biopesticides, and crop protection solutions, NATL continues to support Indian agricultures shift toward productivity, sustainability, and self-reliance.

• Atmanirbhar Bharat in Fertilizers: The national push for self-reliance in fertilizer production is fostering domestic manufacturing opportunities.

• India as a Global Agrochemical Hub: Cost competitiveness, strong technical capabilities, and global supply chain diversification make India an increasingly attractive market for agrochemicals.

• Rising Demand for Sustainable Produce: Growing consumer awareness around eco-friendly food production is driving adoption of biological agri-inputs.

• AgriTech Adoption: Technological advancements in agriculture, including robotics and drones·areas where NATL is actively investing·open doors for innovative product applications and delivery.

• Supportive Government Policies: Central and State initiatives providing income support to farmers are enhancing their purchasing capacity, boosting demand for agri-inputs.

• Digital Rural Expansion: Improved digital infrastructure in rural India enables wider farmer outreach and supports e-commerce-led agri-input distribution.

• Comprehensive Product Portfolio: NATL offers an integrated, branded suite covering soil health, crop nutrition, biostimulants, biopesticides, IPM, and crop protection.

• Extensive Distribution Network: A wide-reaching dealer network ensures deep market penetration across regions.

• Farmer-Centric Initiatives: Through Nova Kisan

Seva Kendras, the company enhances direct engagement and farmer support.

• Innovation-Led Development: Continuous investment in R&D drives advanced product development and modern marketing strategies.

• Sustainability Commitment: Strong focus on ecologically sound, nutritionally rich products to support sustainable farming.

• Experienced Leadership: A seasoned management team and visionary promoters drive strategic growth.

• State-of-the-Art R&D Facility: Well-equipped to support innovation in both product formulations and application technologies.

Global geopolitical tensions, such as the Russia-Ukraine conflict, pose risks to international trade stability. Resulting sanctions, tariffs, and supply chain disruptions can lead to price volatility and reduced availability of key raw materials and finished goods, potentially impacting margins and operational efficiency.

( in Lakhs)

At Nova AgriTech, our people are the cornerstone of every initiative we undertake. Guided by an employee-centric philosophy, we continually adapt our HR policies to foster a positive, inclusive, and growth-oriented workplace.

We are committed to creating an environment that values diversity, equity, and inclusion, where every individual feels respected, heard, and empowered. By building diverse teams and encouraging open dialogue, we ensure that employee voices play a central role in shaping our future.

Our Human Resources team oversees the full spectrum of people functions·talent acquisition, onboarding, training, performance management, employee engagement, and compliance with labour regulations. HR also plays a vital role in supporting managers and employees, ensuring alignment with our organisational values and goals.

We prioritise a healthy work-life balance, offering a congenial work environment with facilities such as free transportation, nutritious meals through our in-house canteen, and regular cultural celebrations to encourage relaxation and team bonding.

Our focus on continuous learning is reflected in various training and upskilling programmes, which promote professional development and inclusive growth. We are also consistently upgrading our HR systems and practices to embed a strong value system and behavioural framework aligned with our strategic vision.

As of March 31,2025, Nova AgriTech Limited has 87 employees, each contributing to our shared mission of transforming agriculture through innovation and sustainability.

Considering how volatility in the operating environment can have an unprecedented impact on global business, our Company is adopting a more proactive risk management and mitigation framework. The Risk Management Committee assists the Board in overseeing various risks, including reviewing and analysing risk exposures related to our Company. The Risk Management Committee regularly reviews risk management measures and thereafter by the Board. Periodic diligence is performed and recommendations for corrective actions and process changes are thereafter implemented.

Economy Risk: Our business is dependent on the Indian economy. Any adverse development or slowdown in Indian economy may have an adverse impact on our business, results of operations and financial condition.

Weather Risk: The current geographic concentration of our operations creates exposure to local economies, regional downturns and severe weather or other catastrophic occurrence.

Competition Risk: Competition from domestic and international players can impact the Companys business and market share if it fails to provide high-quality, high-performing products, maintain supply reliability, and launch innovative solutions.

Employee Risk: The Agri-Input Industry requires skilled talent, and employees play a crucial role in maintaining relationships with the dealer network. The inability to attract or retain the right talent can impact operations and lead to business loss.

We have established an adequate internal control mechanism to safeguard all our assets and ensure operational excellence. The mechanism also meticulously records all transaction details and ensures regulatory compliance. We have multiple policy frameworks to ensure adequate controls on business processes. Further, Risk and Control dashboards have been defined and are periodically updated for all important operational processes. At periodic intervals, the management team and statutory auditors ensure that the defined controls are operative. We have a dedicated team of internal auditors to conduct an internal audit. Every year, this team defines the audit agenda for the year, which is implemented after approval from the Audit Committee. Reputed audit firms also ensure that all transactions are correctly authorised and reported following the relevant regulatory framework. The reports are reviewed by the Audit Committee of the Board. Wherever necessary, internal control systems are strengthened, and corrective actions are initiated.

Certain statements in the Management Discussion and Analysis describing the Companys objectives, and predictions may be ‘forward-looking statements within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the Companys business as well as its ability to implement the strategy. The Company does not undertake to update these statements.