Organic Recycling Systems Ltd Management Discussions

GLOBAL ECONOMY OVERVIEW

The year 2026 has begun against a backdrop of heightened global uncertainty, driven by ongoing geopolitical tensions and financial market pressures. Developments across key regions, coupled with elevated debt levels and a prolonged high-interest rate environment, continue to weigh on global economic stability.

At the macro level, policy uncertainties in major economies, particularly the United States, along with the risk of renewed trade tensions, have added complexity to the global outlook. Increasing competition and weakening multilateral cooperation have further contributed to a more fragile and unpredictable environment. Additionally, rising social and political tensions in certain regions, especially in parts of Europe, reflect underlying economic and societal challenges. These pressures, alongside lingering health concerns and the growing impact of climate change, underscore the need for greater resilience and strategic adaptability across economies and industries.

The global economy continues to witness uneven growth across regions. In the United States, growth is expected to remain steady at around 2.2%, supported by resilient consumer spending, despite a rise in corporate bankruptcies. The eurozone is projected to grow modestly at about 1%, with Germanys recovery providing some support, while France continues to face fiscal pressures, resulting in a relatively subdued growth outlook of ~0.9%.

Global economic growth

Central Europe has shown stronger momentum, led by Poland with an estimated growth of 3.8%. In Asia, Chinas growth is expected to moderate to around 4.4%, potentially weighing on regional dynamics, while Southeast Asia presents a mixed picture across markets. In contrast, India remains one of the fastest-growing major economies, with growth projected at approximately 6.1%, driven by robust domestic demand, ongoing structural reforms, and proactive policy support.

OUTLOOK

After a year of elevated trade barriers and uncertainty, the global economy now faces renewed pressure from the Middle East conflict. If contained, growth is projected to ease to 3.1% in 2026, with a slight recovery to 3.2% in 2027, while inflation may rise briefly before declining again. Emerging and developing economies are expected to feel the impact more sharply. The outlook remains skewed to the downside. Prolonged conflict, rising geopolitical tensions, weaker-than-expected AI productivity gains, or renewed trade frictions could further slow growth and disrupt markets. High public debt and weakening institutional credibility add to the risks, though easing trade tensions or stronger AI-led gains could provide some support. In this uncertain environment, resilience will depend on adaptive strategies, credible policies, and stronger global cooperation. While higher defence spending may boost short-term activity, it risks fuelling inflation, straining fiscal balances, and crowding out social investments.

INDIAN ECONOMY OVERVIEW

Indias economy is expected to maintain a strong growth trajectory, with real GDP projected to expand by 7.6% in FY26, according to estimates by the Ministry of Statistics and Programme Implementation (MoSPI). This outlook underscores the countrys robust macroeconomic fundamentals despite prevailing global uncertainties. Nominal GDP, which incorporates price movements including inflation, is estimated to grow by 8.6% during the year, reflecting a balanced expansion in both economic output and price levels.

The growth momentum has been supported by consistent quarterly performance, with real GDP growth of 8.4% recorded in Q2 and 7.8% in Q3 (October–December), indicating resilience across key sectors of the economy. In recent years, India has sustained stable growth levels, with real GDP growth of 7.2% in FY2023–24 and 7.1% in FY2024–25. During the same period, nominal GDP growth stood at 11.0% and 9.7%, respectively.

The manufacturing sector continues to play a pivotal role in driving economic expansion, registering double-digit growth, and reinforcing Indias position as a key industrial hub. This momentum has been further supported by steady contributions from the secondary and tertiary sectors, reflecting the broad-based nature of the countrys economic growth.

Domestic demand continued to underpin Indias economic growth in FY26. According to the First Advance Estimates, the share of Final Private Consumption Expenditure (PFCE) in GDP increased to 61.5% during the year. The sustained strength in consumption reflects a supportive macroeconomic environment characterised by relatively low inflation, stable employment conditions, and improving real purchasing power. Rural consumption remained resilient, supported by strong agricultural performance, while urban consumption gradually improved, aided by the rationalisation of direct and indirect taxes. Together, these factors indicate that consumption-led growth remains broad-based across the economy.

61.5%

The share of Final Private Consumption Expenditure (PFCE) in GDP is expected to increase to 61.5% in FY26.

In addition to consumption, investment activity continued to play a significant role in driving economic expansion during FY26. Gross Fixed Capital Formation (GFCF) is estimated to account for approximately 30.0% of GDP. Investment momentum strengthened during the first half of the fiscal year, with GFCF growing by 7.6%, surpassing the pace recorded in the corresponding period of the previous year and remaining above the pre-pandemic average growth rate of 7.1%.

30%

Gross Fixed Capital Formation (GFCF) is estimated to account for approximately 30.0% of GDP.

The agriculture and allied sectors are estimated to grow by 3.1% in FY26. Agricultural performance during the first half of the fiscal year was supported by a favourable monsoon, leading to agricultural GVA growth of 3.6%, higher than the 2.7% growth recorded during the same period in FY25, though still below the long-term average of 4.5%. Allied activities, particularly livestock and fisheries, have demonstrated relatively stable growth in the range of 5–6%. With the increasing share of allied activities in agricultural GVA, overall agricultural growth is increasingly shaped by the interplay between the relatively volatile crop segment and the more stable expansion in allied sectors.

3.1 %

The agriculture and allied sectors are estimated to grow by 3.1% in FY26.

The industrial sector showed steady improvement in FY26, with manufacturing growing 8.4% in H1, surpassing the full-year estimate of 7.0%. Construction remained resilient, supported by strong public capex and infrastructure momentum. Manufacturings share in GDP held steady at 17–18%, with GVO at ~38%, comparable to services. Overall industrial growth is projected at 6.2% in FY26 (vs. 5.9% in FY25), with Q3 indicators such as PMI, IIP, and e-way bills reflecting strengthening demand. Construction indicators, including steel and cement consumption, also recorded stable growth. The outlook remains positive, supported by GST rationalisation and favourable demand conditions.

On the supply side, services continue to drive growth, with GVA expanding 9.3% in H1 FY26 and an estimated 9.1% for the full year. Growth was broad-based across segments, with most sub-sectors exceeding 9%, except trade, hospitality, and related services, which remain slightly below pre-pandemic levels.

OUTLOOK

Indias economic outlook remains resilient, supported by strong macroeconomic fundamentals and broad-based demand. Real GDP and GVA are projected to grow by 7.4% and 7.3% respectively in FY26, driven by robust agricultural performance and improving urban consumption. Indias medium-term growth remains stable, with FY27 growth expected in the range of 6.8%–7.2%. Inflation has moderated significantly, with average headline inflation at 1.7% during April–December 2025, among the lowest levels recorded. The RBI has revised its FY26 inflation forecast to 2.0%, supported by favourable agricultural output, while IMF estimates remain moderate for FY26 and FY27. Looking ahead, inflation is expected to remain benign, providing a stable macroeconomic environment conducive to sustained economic growth and investment.

INDIAN MSME SECTOR

The Micro, Small and Medium Enterprises (MSME) sector forms the backbone of Indias economic landscape, comprising a diverse spectrum of businesses that di ffer in scale, technology, and innovation. These enterprises are vital drivers of economic progress, contributing meaningfully to GDP, exports, employment generation, and balanced regional development. With the ability to produce over 6,000 products, MSMEs play a crucial role in meeting the countrys demand for mass consumption goods. Given its strategic significance, the sector holds immense potential to power sustained economic growth, provided it is supported by a conducive policy framework and focused developmental initiatives.

31.1 %

Indian MSME sectors contribution to Indian GDP

35.40%

Indian MSME sectors contribution to Indias total manufacturing output

48.58%

Indian MSME sectors contribution to Indias total exports

32.82 CRORE

Number of people employed by the Indian MSME sector

7.47 crore

Number of registered enterprises in the Indian MSME sector

BUDGETARY OUTLAY FOR THE INDIAN MSME SECTOR

The MSME sector continues to serve as a cornerstone of Indias economic architecture, driving structural transformation through decentralised industrialisation and broad-based growth. Contributing 31.1% to GDP and 35.4% to total manufacturing output, underscoring its pivotal role in strengthening domestic production capabilities. Beyond its economic contribution, MSMEs play a critical role in reducing regional disparities by anchoring local economies and fostering self-reliance. The sector also remains a key employment generator, providing livelihoods to over 32.82 crore individuals and acting as a vital instrument for socio-economic inclusion by empowering first-generation entrepreneurs and underserved communities.

MSMEs are increasingly emerging as engines of global competitiveness and innovation. Their integration into global value chains has significantly strengthened Indias export performance, with the sector contributing 48.55% to merchandise exports in FY25. This momentum is supported by targeted policy initiatives, including export promotion schemes and enhanced access to collateral-free credit. Simultaneously, the rapid adoption of digital public infrastructure, such as ONDC, OCEN, and the Account Aggregator framework—is enabling greater formalisation, improved market access, and efficient credit delivery. MSMEs are also playing a growing role in advancing Indias sustainability and innovation agenda, adopting green technologies and contributing to strategic sectors like defence and deep-tech manufacturing. With continued policy support and technological integration, the sector is well-positioned to drive inclusive, sustainable, and innovation-led growth aligned with Indias long-term economic vision.

KEY BUDGET TAKEAWAYS FOR THE INDIAN MSME SECTOR

The Union Budget 2026–27 places MSMEs at the centre of Indias growth strategy, adopting a structured three-pillar approach focused on equity, liquidity, and capability building. A landmark initiative is the introduction of a Rs.10,000 crore SME Growth Fund, aimed at nurturing high-potential enterprises into globally competitive champion MSMEs by providing long-term growth capital.

To further strengthen access to risk capital, the government has proposed an additional allocation to the Self-Reliant India Fund, ensuring continued equity support for micro and small enterprises. Alongside this, enhanced liquidity measures, particularly through the mandatory integration of the Trade Receivables Discounting System (TReDS) for public sector procurement, are expected to improve cash flows and address delayed payment challenges.

The Budget also emphasises ease of doing business and compliance simplification, with institutional support mechanisms such as Corporate Mitras to assist MSMEs, especially in Tier II and III markets. In a significant boost to exports, the removal of the Rs.10 lakhs cap on courier exports is set to expand global market access for small businesses, artisans, and startups.

Overall, the Budget signals a strategic shift from incremental support to building scale, competitiveness, and global integration, positioning MSMEs as key drivers of manufacturing growth, exports, and employment in Indias long-term economic vision.

Indias waste management industry

The global environmental landscape is undergoing significant stress, with India experiencing its impact alongside sustained economic expansion. Rapid urbanisation, rising consumption, and industrial growth have intensified pressure on natural resources and public health systems. Indias share of global greenhouse gas emissions has reached approximately 7.8%, while e-waste generation has increased sharply by 147% over the past seven years. These trends highlight a critical shift, waste management is no longer a localised municipal issue, but a national sustainability priority requiring immediate and coordinated action.

In this context, effective waste management remains a key structural challenge for India. Despite regulatory interventions such as the Solid Waste Management Rules, 2016 (recently notified rules on April , 2026 as SWM 2026 rules), and initiatives like the Swachh Bharat Mission, the scale and complexity of the issue continue to grow. The country currently generates about 62–72 million tonnes of municipal solid waste annually, with projections indicating a rise to 125–165 million tonnes by 2030–31, driven by urbanisation, economic development, and evolving consumption patterns.

On a per capita basis, urban waste generation ranges between 400 to 700 grams per day, translating into a cumulative daily output exceeding 150,000 tonnes. However, waste management practices remain uneven across regions, reflecting disparities in infrastructure, governance, and socio-economic conditions. This unevenness underscores the need for scalable, standardised and technology-driven solutions to address the countrys growing waste management challenge.

The Indian solid waste management (SWM) market continued to witness steady growth, reaching an estimated size of USD 13.0 billion in 2025. The sector is projected to expand to approximately USD 21.9 billion by 2034, registering a CAGR of around 6.0% during 2026 2034, reflecting the increasing emphasis on sustainable waste management practices.

INDIAS GROWING WASTE MARKET _MARKET BY WASTE SIZE, IN USD BILLION_

Growth in the sector is being driven by a combination of regulatory push and technological advancement. Government-led initiatives and stricter compliance frameworks are promoting scientific waste disposal and more efficient collection. At the same time, growing adoption of waste-to-energy technologies, along with the emergence of public-private partnerships, is driving innovation and enabling the conversion of waste into usable energy. These structural drivers are expected to support long-term growth and strengthen Indias overall sustainable waste-management ecosystem.

Technological advancements in waste management are reshaping operational efficiencies across the sector, with the rise of circular economy practices encouraging sustainable waste disposal and resource recovery methods, and increasing use of AI and IoT in waste management gaining momentum. In September 2025, SUEZ launched a new digital platform designed to optimise waste collection routes and improve operational efficiency, reflecting a broader trend toward digital transformation within the industry.

KEY TRENDS SHAPING THE INDIAN WASTE MANAGEMENT INDUSTRY

Accelerating waste-to-energy adoption : India is expanding its waste-to-energy infrastructure to reduce landfill dependency and support renewable energy goals. Policy support and state initiatives are driving the development of waste-to-electricity and bio-methanation facilities. Notably, Indore commissioned Indias first PPP-based green waste

POLICY & REGULATORY FRAMEWORK

The Solid Waste Management Rules, 2026, effective 1 April 2026, supersede the 2016 rules, mandating four-stream waste segregation and higher Refuse Derived Fuel substitution at industrial facilities (5% to 15% over six years), with stricter landfill norms enforced through Polluter Pays compensation fees.

Indias regulatory landscape for waste management and circular economy practices continues to evolve, with stricter compliance requirements across the value chain. The Plastic Waste Management Amendment Rules, 2024, along with the National Circular Economy Framework, 2025, mandate higher recycling targets for brand owners, thereby increasing accountability and operational obligations.

Additionally, the E-Waste Management Rules, 2022, prescribe phased collection and recovery targets, including a 60% e-waste collection mandate for FY26, rising to 80% by FY28, along with a 70% recovery target for lithium-ion batteries. Non-compliance carries significant financial implications, with environmental compensation penalties ranging from Rs.5,000 to Rs.20,000 per tonne.

Regulatory enforcement has also intensified, as reflected in the National Green Tribunals imposition of penalties amounting to Rs.1,000 crore on multiple states in 2024 for non-compliance with waste management norms. The directive mandates stricter adherence to waste segregation protocols and the establishment of processing infrastructure in cities with populations exceeding one million.

Collectively, these developments underscore a shift towards a more stringent and enforcement-driven regulatory regime, necessitating proactive compliance, infrastructure readiness, and sustainable operational practices across the industryprocessing plant in March 2025, highlighting the growing shift towards waste-to-resource solutions.

Strengthening EPR frameworks : The Extended Producer Responsibility (EPR) regime has been strengthened, increasing accountability across electronics, plastics, batteries, and packaging. Under the E-Waste Management Rules, 2022, recycling targets have been raised to 70% by FY26–27. Regulatory reforms, including standardised certificate pricing and expanded scope, are expected to enhance compliance and formalise waste management practices.

Digitalisation of waste management : Digital technologies such as IoT-enabled systems, GPS tracking, and AI-based monitoring are improving efficiency and compliance in waste management. New platforms launched in 2025 are enabling better route optimisation and operational control, aligning with the Smart Cities Mission and accelerating the shift towards data-driven waste management systems.

INDIAN COMPRESSED BIOGAS INDUSTRY

Indias Compressed Biogas (CBG) industry is steadily transitioning from a policy-led initiative to a commercially viable segment, emerging as a key pillar in the countrys clean energy ecosystem. Supported by strong regulatory backing and increasing focus on energy security, CBG is gaining traction as a sustainable alternative to fossil fuels. Produced through the anaerobic digestion of organic feedstock, including agricultural residues, municipal solid waste, cattle dung, press mud, and sewage sludge, CBG is chemically equivalent to conventional Compressed Natural Gas (CNG), enabling seamless integration into existing gas distribution infrastructure across transport, industrial, and domestic applications.

CBG is generated through the anaerobic digestion of biodegradable waste, offering a renewable and resource-efficient energy solution. By converting organic waste into usable fuel, it supports the principles of a circular economy while addressing critical challenges related to waste management and environmental sustainability. In addition to energy generation, the process helps mitigate methane emissions from untreated waste, thereby contributing to lower greenhouse gas emissions. This dual benefit positions CBG as a viable solution to both urban waste management concerns and the broader transition towards cleaner energy sources.

INDIAS GROWING CBG PRODUCTION AND BLENDING OBLIGATIONS

The Indian CBG market is witnessing strong momentum, emerging as one of the fastest-growing segments within the clean energy landscape. Valued at approximately USD 319 million in 2025, the market is projected to expand significantly to around USD 2,419 million by 2032, reflecting an impressive CAGR of about 33.56%.

This robust growth trajectory is supported by a favourable policy environment, increasing integration with existing energy infrastructure, and rising investor confidence in the sectors long-term commercial viability. Together, these factors are positioning CBG as a key pillar in Indias transition towards sustainable and alternative energy solutions.

Indias Compressed Biogas (CBG) sector continues to gain meaningful traction, supported by strong policy intent and improving infrastructure readiness. Under the SATAT initiative, over 130 CBG plants had been commissioned by November 2025, with a growing pipeline of projects backed by more than 1,000 Letters of Intent issued. The introduction of mandatory CBG blending in FY26 marks a significant step forward, reinforcing long-term demand visibility for the sector.

CBG is now being integrated into the broader energy ecosystem, with availability across multiple geographical areas through the CGD network and an expanding presence at retail outlets. Pricing reforms have further strengthened the commercial framework, with CBG prices revised to 85% of the average CNG retail price, providing improved realisation visibility for producers. Additionally, investments by major oil marketing companies signal increasing confidence in the scalability and commercial viability of the sector.

Further, the sector is witnessing diversification in both feedstock sources and end-use applications. Municipal solid waste (MSW) remains the dominant feedstock, accounting for nearly 44% of the market, supported by consistent urban waste generation and policy backing. At the same time, cattle dung, agricultural residues, and sewage waste present significant untapped potential, with Indias overall feedstock availability estimated at approximately 62 million metric tonnes annually.

On the demand side, vehicle fuel continues to be the primary application, accounting for nearly half of the market, driven by CBGs compatibility with existing CNG infrastructure. A notable development has been the emergence of multi-feedstock digestion models, which enhance plant efficiency and economic viability. These models not only ensure a more stable supply of raw materials but also enable additional revenue streams through the production of bio-fertilisers, strengthening overall project economics.

POLICY SUPPORT

The policy ecosystem supporting the Compressed Biogas (CBG) sector continues to strengthen, creating a stable and enabling environment for long-term growth. The Governments SATAT (Sustainable Alternative Towards Affordable Transportation) initiative, launched in October 2018, remains a cornerstone of this framework. By encouraging entrepreneurs to establish CBG plants and offering assured offtake through Oil Marketing Companies (OMCs) at predetermined prices, the scheme provides strong visibility on demand and revenue realisation. Its long-term vision, to develop 5,000 CBG plants with an annual production capacity of 15 million metric tonnes, has the potential to significantly reduce dependence on fossil fuels while mitigating methane emissions and advancing Indias clean energy transition.

A key policy milestone in FY26 has been the operationalisation of the Compressed Biogas Blending Obligation (CBO), marking a structural shift in the sector. The phased mandate for blending CBG with CNG (transport) and PNG (domestic) segments, starting at 1% in FY26 and scaling up to 5% by FY29, creates a sustained and expanding demand base. This regulatory clarity materially improves project viability and reduces demand-side uncertainty for developers.

Further strengthening the ecosystem, the Union Budget 2026–27 introduced a full exemption of central excise duty on the biogas component in blended CNG, addressing the earlier issue of double taxation. This measure enhances the economic attractiveness of CBG for City Gas Distribution (CGD) players and is expected to accelerate adoption.

Complementing these initiatives, the Government has substantially scaled up its support for the sector through GOBARdhan (the National Circular Bioenergy Scheme), approved by the Union Cabinet in August 2026 with an outlay of Rs.23,731 crore over FY27– FY36. The scheme brings SATAT, BAM and DPI under one unified umbrella, and introduces a a stable, government-backed administered CBG price of Rs.2,110 per MMBtu, with the scheme designed to provide a minimum ten-year revenue visibility horizon for producers, a capital support of up to Rs.2 crore per tonne/day of capacity, and an 85% credit guarantee cover for MSME projects collectively strengthening the ancillary revenue streams and long-term bankability of CBG projects, including the marketing support for organic fertiliser by-products such as FOM, Liquid FOM and PROM now delivered as part of the unified Gobardhan framework.

Additionally, the sector recently witnessed growing investor interest, with projected investments expected to exceed USD 600 million in the near term. Regulatory clarity, targeted incentives, and government-led initiatives aimed at accelerating adoption underpin this momentum. Financial support mechanisms such as capital subsidies and assistance for biomass aggregation infrastructure are improving project viability, particularly by addressing supply chain challenges.

Separately, while the compliance obligations under Indias Carbon Credit Trading Scheme (CCTS) currently apply only to nine hard-to-abate industrial sectors, compressed biogas has been notified as an approved methodology under the CCTS voluntary offset mechanism, enabling eligible CBG projects commissioned from 1 January 2025 onward to register and earn tradeable Carbon Credit Certificates. Together, these avenues add an incremental, carbon-linked revenue layer to the sectors core gas-sales.

KEY CHALLENGES

Despite strong structural tailwinds, the sector continues to face certain operational and economic challenges.

Pricing remains a key concern, with current realisations linked to CNG benchmarks, which some stakeholders believe may not fully reflect the environmental and strategic value of CBG.

Feedstock availability and quality also remain inconsistent, impacted by fragmented supply chains, seasonal variations, and logistical constraints.

These factors can affect plant utilisation levels and operational efficiency. Additionally, the capital-intensive nature of CBG projects, coupled with long gestation periods, continues to challenge private investment, particularly without streamlined processes and timely incentive disbursements.

OUTLOOK

The Indian CBG sector has witnessed some pivotal moments in FY26. With the implementation of blending mandates, continued policy support, and increasing participation from both public and private stakeholders, the sector is gradually transitioning towards a more stable and scalable growth phase. As infrastructure deepens and commercial adoption accelerates, CBG is poised to play a critical role in Indias transition towards a cleaner, circular, and energy-secure economy. For companies operating across the value chain, from feedstock aggregation to gas distribution, the coming decade offers a significant, compounding opportunity for sustainable growth.

INDIAN CHEMICALS INDUSTRY

The Indian chemicals sector is a core component of the countrys manufacturing economy, supplying most major downstream industries including agriculture, pharmaceuticals, textiles, automotive, construction, electronics, and consumer goods. India is the third-largest chemical producer in Asia and ranks ninth worldwide in chemical exports, with the industry making up about 7% of the GDP. It offers a wide range of products, such as bulk chemicals, speciality chemicals, agrochemicals, petrochemicals, polymers, dyes and pigments, and fertilisers.

India holds several strategic advantages in the global chemicals value chain. Its proximity to the Middle East—the worlds main source of petrochemical feedstock, facilitates economies of scale. Additionally, India benefits from low manufacturing costs, a skilled workforce, and abundant natural resources, giving it a competitive edge. The industry also maintains strong positions in specific global niches; for example, India accounts for around 16% of worldwide dye and dye intermediate production, exporting to over 90 countries. The sector operates under a liberalized policy framework that allows 100% FDI through the automatic route (except for certain hazardous chemicals), attracting a total of US$ 23.9 billion in FDI from April 2000 to December 2025.

The Indian chemicals and petrochemicals market stood at approximately Rs.26 trillion in FY25, with independent estimates placing the industrys value at US$ 322.6 billion in 2025, projected to reach US$ 447.4 billion by 2034 at a CAGR of 8.3%.

INDIAN CHEMICALS MARKET SIZE _IN USD BILLION_

Trade data underscores both the sectors global integration and its structural import dependence. During FY26 (April–February), exports of organic chemicals reached US$ 6,891 million and inorganic chemicals US$ 2,203 million, while imports of organic and inorganic chemicals stood at US$ 13,896 million and US$ 6,791 million, respectively. Agrochemical exports during the same period totalled US$ 3,567 million, with dye exports at US$ 1,992 million. In the speciality chemicals category, import dependence ranges from 55% to 80% across agrochemical intermediates, performance polymers, electronic chemicals and speciality dyes, representing one of the most commercially actionable demand-supply gaps in Indian industry today.

OUTLOOK FOR R&D AND TECHNOLOGY IN THE CBG/BIOGAS SECTOR

Looking ahead, R&D priorities in Indias CBG and biogas sector are expected to shift from process optimisation toward expanding the addressable feedstock base and tightening environmental performance measurement. Near-term innovation is likely to remain focused on refining existing commercial systems improved mixed-feedstock and co-digestion designs, better waste collection and pretreatment methods, and reduced methane leakage through improved plant design and maintenance practices, as the sector scales to meet the 5% CBG blending mandate targeted for FY29. Over the medium to longer term, the more significant technology shift is expected to come from advances in converting lignocellulosic feedstocks such as crop residues and agricultural waste into usable biofuels, a category where Indias theoretical potential (estimated at over ten times current utilisation) remains largely untapped due to processing-technology constraints. Parallel development of carbon-intensity measurement and greenhouse gas performance-tracking systems is also expected to gain importance, as such frameworks increasingly underpin access to policy support, carbon markets, and demonstrable emissions-reduction credentials. While early-stage versions of these technologies remain relatively costly, industry expects they will become progressively cost-competitive through economies of scale and accumulated operating experience, positioning R&D and engineering capability as an increasingly important determinant of competitiveness across the sector.

KEY GROWTH DRIVERS

Policy support and self-reliance initiatives : Policy reforms and incentive schemes such as the Remission of Duties and Taxes on Exported Products (RoDTEP) and the Production-Linked Incentive (PLI) scheme, alongside infrastructure initiatives such as Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs) and Plastic Parks, are contributing significantly to the industrys growth. The PLI scheme for speciality chemicals offers financial incentives based on incremental sales, encouraging domestic manufacturing of high-value products, while dedicated chemical parks in Gujarat (Dahej, Ankleshwar), Maharashtra (Taloja) and Andhra Pradesh (Visakhapatnam) are being upgraded with shared infrastructure including steam networks, waste treatment facilities and logistics hubs.

Global supply-chain diversification : With global companies seeking to de-risk supply chains dependent on China, the Indian chemical sector has a significant growth opportunity. Strategic investors from Japan, Korea and Thailand are increasingly showing interest in Indian companies as they diversify supply chains away from China.

Rising domestic consumption : Favourable demographics, urbanisation and rising per capita consumption across end-use industries continue to drive demand. Indias per capita petrochemical consumption remains significantly lower than developed nations, presenting ample opportunities for demand growth and investment.

Shift towards value-added products : The industry is clearly shifting away from pure commodity dependence toward value-added and application-specific products, with specialty chemicals expected to significantly outperform commodity segments.

OUTLOOK

The Indian chemicals industry is projected to maintain a strong long-term growth trajectory. Demand for chemicals and petrochemicals in India is anticipated to nearly triple, reaching US$ 1 trillion by 2040. Industry forecasts suggest an annual growth rate of 11–12% from 2021 to 27 and 7–10% from 2027 to 40, which would elevate India s share of the global market. Additionally, the sector could create approximately 10 million jobs by 2040, driven by increased investments, rising domestic demand, export prospects, and expanding manufacturing capacity. The growth is expected to be driven primarily by specialty and performance chemicals, supported by import substitution in intermediates, ongoing policy support, and Indias strengthening role as a reliable alternative in global supply chains.

COMPANY OVERVIEW

Established in 2008, Organic Recycling Systems Limited is a leading player in Indias waste management and resource recovery sector, focused on delivering sustainable and technology-driven solutions for municipal, industrial, and agricultural waste streams. With a strong emphasis on circular economy principles, the Company converts organic waste into valuable outputs such as compost, biogas, and renewable energy, contributing to both environmental sustainability and resource efficiency.

Over the years, the Company has built robust capabilities across the waste value chain, from segregation and processing to resource recovery, supported by advanced technologies and integrated infrastructure. Its portfolio includes decentralised and large-scale waste processing facilities, tailored to meet the evolving requirements of urban local bodies, industrial clients, and institutional stakeholders. The Companys core capabilities span across solid waste management, waste segregation, window composting,

THE INDIAN GREEN CHEMICALS OPPORTUNITY

Sustainability is reshaping the global chemicals value chain, and India is emerging as one of its fastest-growing green chemistry markets. The global green chemicals market was estimated at US$ 120.5 billion in 2025 and is projected to reach US$ 270.1 billion by 2033, growing at a CAGR of 10.7%, with Asia Pacific commanding the largest regional share at 30.8%. Within this, India is the fastest-growing major market globally with a projected CAGR of 9.2%, ahead of Chinas 8.9%, driven by sustainable manufacturing programmes and renewable chemistry infrastructure development.

Indias green chemicals market is expected to grow at a CAGR of over 10% and exceed US$ 15 billion by 2027, with speciality chemicals manufacturers focusing on green solvents, biodegradable surfactants, and bio-based polymers. Bio-based colourants, additives, and functional agents are finding increasing application across packaging, textiles, agriculture, and coatings, reflecting a broader market shift toward low-impact materials.

Policy support is a key enabler. India has rolled out production incentives of Rs.30–35 per kg for green hydrogen, with twelve companies selected to set up 410,000 tonnes of production capacity. The countrys renewable energy transition, with 46.3% of installed capacity from renewable sources in 2024 and a target of 500 GW by 2030, provides a cleaner, more sustainable feedstock base for green chemical manufacturing, positioning India as a rising hub for green chemical innovation.

in-vessel composting, and waste and biomass valorisation, with expertise across a wide range of feedstocks including segregated organic waste, agricultural residue, paddy straw, Napier grass, and municipal solid waste, enabling the development of advanced anaerobic digestion systems, biogas plants, bio-methanation plants, and Compressed Biogas (CBG) plants.

Driven by increasing regulatory focus on waste segregation, scientific disposal, and renewable energy generation, Organic Recycling Systems Limited continues to strengthen its presence across key geographies in India. The Company remains committed to enhancing operational efficiency, scaling its processing capacities, and expanding its project portfolio, while delivering measurable environmental impact and long-term value for stakeholders.

ORSLS SWOT ANALYSIS

STRENGTHS	WEAKNESSES
Organic Recycling Systems Limited benefits from a strong foundation of proprietary technology and innovation-led capabilities, enabling efficient and sustainable waste-to- energy solutions. Its integrated, end-to-end execution model, spanning design, EPC, and operations, ensures better control over project delivery and long-term performance.	The Company operates in a capital-intensive sector, with project execution often requiring significant upfront investment and long gestation periods. Revenue visibility remains partly linked to project cycles, which can introduce variability in short-term financial performance.
The Company\u2019s deep operational experience across diverse waste streams, coupled with its multi-feedstock processing capability, enhances plant reliability and mitigates input- related risks. In addition, its growing network of strategic partnerships and strong alignment with national clean energy policies position it favourably within India\u2019s evolving bio-energy landscape.	Further, dependence on timely regulatory approvals, land acquisition, and feedstock availability can impact project timelines. As the business scales, maintaining consistent execution quality across multiple geographies and projects remains a key operational challenge.

OPPORTUNITIES	THREATS
India\u2019s increasing focus on sustainable waste management, energy security, and biofuel adoption presents a significant long-term opportunity for the Company. Government initiatives such as SATAT, GOBARdhan, and compressed biogas blending mandates are expected to drive demand for waste-to-energy infrastructure.	The sector remains exposed to regulatory and policy uncertainties, including delays in approvals and evolving compliance requirements. Feedstock variability, pricing pressures, and logistical challenges can impact plant efficiency and project economics.
The Company is also well-positioned to benefit from rising interest in circular economy solutions, carbon capture technologies, and decentralised waste processing. Expansion into new geographies, strategic collaborations, and participation in equity-based project models offer additional avenues for growth and recurring revenue generation.	Increasing competition from both domestic and global players, along with rapid technological advancements, may intensify pricing and execution pressures. Additionally, macroeconomic factors such as inflation, interest rates, and supply chain disruptions could influence project costs and timelines.

CORE STRENGTHS

Proprietary technology portfolio : ORSLs strength lies in its in-house, innovation-led technology platforms that enable efficient and sustainable waste-to-energy solutions. Its proprietary systems, including advanced anaerobic bio-methanation and biomass carbonisation technologies, are designed to maximise resource recovery while minimising environmental impact. This strong intellectual property base creates a durable competitive advantage that is difficult to replicate.

Integrated end-to-end execution capability: The Company delivers comprehensive, single-window solutions across the project lifecycle—from concept and feasibility to EPC execution and operations. With a focus on long-term operability and scalability, ORSL integrates advanced technologies, automation, and future-ready fuel adaptability, enabling it to serve diverse client needs efficiently and reliably.

Deep operational expertise : Backed by over a decade of experience in waste management and valorisation, ORSL brings strong domain expertise across municipal, industrial, and agricultural waste streams. This on-the-ground experience translates into better risk assessment, faster project execution, and higher plant reliability.

Multi-feedstock processing capability : ORSLs ability to process a wide range of feedstocks, including municipal solid waste, agricultural residue, and industrial by-products, ensures operational continuity and flexibility. This reduces dependence on a single input source, addressing a key risk in the waste-to-energy sector.

Strong R&D and innovation ecosystem: The Companys research-driven approach is supported by collaborations with leading institutions and a dedicated innovation centre. Ongoing efforts in areas such as carbon capture and utilisation are opening new value streams, while its accredited R&D capabilities further strengthen its technology leadership.

Expanding strategic partnerships : ORSL continues to strengthen its ecosystem through partnerships with leading energy and technology players. These alliances enhance market access, improve project viability, and expand technological capabilities without significant capital investment.

Robust order book and execution momentum : The Company has secured multiple large-scale projects across states, reflecting strong market traction and execution capability. Its ability to convert strategic relationships into repeat business supports sustained revenue visibility and growth.

Sustainable financial performance : ORSL has delivered robust financial growth, supported by scaling operations and improving operating leverage. A strengthening balance sheet provides the flexibility to pursue both EPC and equity participation models, enhancing long-term value creation.

Strong policy alignment: ORSLs business model is closely aligned with Indias clean energy and biofuel initiatives. As regulatory support and demand for sustainable energy solutions increase, the Company is well-positioned to capitalise on emerging opportunities in the circular energy ecosystem.

FINANCIAL REVIEW

ORSL has developed a diversified service offering, backed by strong process expertise to deliver end-to-end solutions. In the last couple of years, the Company emphasised on being more agile, while it remained committed to its long-term sustainable growth strategies.

P&L analysis (Consolidated basis)

Particulars	FY26 (Rs. in crore)	FY25 (Rs. in crore)	Growth (change in %)
Revenue from operations	105.08	48.39	117.14%
Interest cost	0.49	0.41	17.67%
EBITDA	30.89	21.13	46.15%
PBT	26.47	16.83	57.28%
PAT	25.08	15.62	60.56%
EPS (in Rs.) \u2013 Diluted	24.12	18.59	29.75%

In FY26, revenue from operations, including other income, stood at Rs.105.68 crore, EBITDA stood at Rs.30.89 crore, and PAT stood at Rs.25.08 crore, after growing by 117.14%, 46.15% and 60.56% respectively, compared to the previous year. The year marked a decisive step-up in execution scale, with the second half alone contributing Rs.74.50 crore of revenue from operations, up from Rs.30.82 crore in H2FY25.

P&L analysis (Standalone basis)

Particulars	FY26 (Rs. in crore)	FY25 (Rs. in crore)	Growth (change in %)
Revenue from operations	43.76	27.38	59.85%
Interest cost	0.28	0.21	35.51%
EBITDA	6.94	5.98	16.11%
PBT	5.29	4.53	16.68%
PAT	4.02	3.32	21.21%
EPS (in Rs.) \u2013 Diluted	3.87	3.95	(2.07)%

In FY26, revenue from operations, including other income, stood at Rs.43.76 crore, EBITDA stood at Rs.6.94 crore, and PAT stood at Rs.4.02 crore, after growing by 59.85%, 16.11% and 21.21% respectively, compared to the previous year.

Analysis of Balance Sheet (Standalone basis)

Particulars	FY26 (Rs in crores)	FY25 (Rs. in crores)	Growth (change in %)
Total equity	172.49	194.65	(11.39%)
Long-term borrowings	33.02	29.90	10.46%
Short-term borrowings	2.09	0.08	2,485.40%
Total non-current assets	187.42	179.61	4.35%
Trade receivables	33.69	30.31	11.14%
Cash and cash equivalents	2.00	25.37	(92.14%)
Property, Plant and Equipment	0.54	0.68	(20.59%)
Intangible assets under development	4.98	3.62	37.57%

As on 31st March, 2026, the Companys Equity Share Capital stood at Rs.8.66 crore, unchanged from Rs.8.66 crore as on 31st March, 2025. Total shareholders funds stood at Rs.172.49 crore vis-à-vis Rs.194.65 crore a year earlier, a decrease of 11.39%, largely reflecting the redemption of preference shares during the year, the premium on which — Rs.25.25 crore — was adjusted against the securities premium account, partly offset by the profit of Rs.4.02 crore earned during the year.

Total long-term borrowings of ORSL as on 31st March, 2026 stood at Rs.33.02 crore vis-à-vis Rs.29.90 crore as on 31st March, 2025, an increase of 10.46%, reflecting funds drawn to support working capital and project development. Short-term borrowings stood at Rs.2.09 crore against Rs.0.08 crore in the previous year, drawn to meet near-term working capital requirements. Finance cost for the year stood at Rs.0.28 crore, up from Rs.0.21 crore in FY25. Interest coverage remained comfortable at 19.96 times, against 23.02 times in FY25, the moderation reflecting the higher interest burden during the year.

Property, plant and equipment as on 31st March, 2026 stood at Rs.0.54 crore, down from Rs.0.68 crore as on 31st March, 2025, reflecting depreciation charged during the year. Investment during FY26 was directed principally at technology and at strengthening the Companys long-term investment base: intangible assets under development rose to Rs.4.98 crore from Rs.3.62 crore, while non-current investments increased to Rs.110.59 crore from Rs.95.47 crore, following an investment of Rs.15.11 crore in the partnership firm Industrial Associates. This was partly offset by a reduction in loans to related parties, which stood at Rs.62.85 crore against Rs.70.22 crore.

Trade receivables as on 31st March, 2026 stood at Rs.33.69 crore vis-à-vis Rs.30.31 crore as on 31st March, 2025, up 11.14%, in line with a larger execution base. Cash and cash equivalents stood at Rs.2.00 crore against Rs.25.37 crore a year earlier, down 92.14%, principally on account of the Rs.25.25 crore deployed towards redemption of preference shares during the year.

Analysis of Balance Sheet (Consolidated basis)

Particulars	FY26 (Rs. in crores)	FY25 (Rs. in crores)	Growth (change in %)
Total equity	122.98	124.08	(0.89%)
Long-term borrowings	42.07	35.19	19.55%
Short-term borrowings	2.90	0.75	284.35%
Total non-current assets	112.06	90.40	23.96%
Trade receivables	69.70	50.62	37.67%
Property, Plant and Equipment	46.39	50.67	(8.44%)
Other Intangible assets	17.98	9.02	99.33%

As on 31st March, 2026, the Companys Equity Share Capital stood at Rs.8.66 crore compared to Rs.8.66 crore as on 31st March, 2025. Total shareholders funds stood at Rs.122.98 crore vis-à-vis Rs.124.08 crore a year earlier.

Total long-term borrowings of ORSL as on 31st March, 2026 stood at Rs.42.07 crore vis-à-vis Rs.35.19 crore as on 31st March, 2025, an increase of 19.55%, reflecting funds drawn to support capacity creation and project development. Finance cost for the year stood at Rs.0.49 crore, up from Rs.0.41 crore in FY25. Notwithstanding the higher borrowing, interest coverage strengthened to 54.01 times from 41.12 times, as operating profit expanded well ahead of the incremental interest burden.

Property, plant and equipment as on 31st March, 2026 stood at Rs.46.39 crore, down from Rs.50.67 crore as on 31st March, 2025, reflecting depreciation charged during the year. Investment in Other intangible assets increased to Rs.17.98 crore as on 31st March 2026 from Rs.9.02 crore as on 31st March 2025.

Details of significant chages (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios: Key financial ratios (Standalone basis)

Ratios	FY26	FY25	% Change	Comments
Trade Receivables Turnover	1.37	1.12	22.63%	NA
Inventory Turnover Ratio	12.88	528.69	(97.56%)	The ratio reduced by 97.56% due to increase in closing inventory compared to previous year
Interest Coverage Ratio	19.96	23.02	(13.29%)	NA
Current Ratio	2.11	4.81	(56.07%)	The ratio declined primarily due to amount payable to Industrial Associates arising from Company\u2019s acquistion of stake in Industrial Associates
Debt-Equity Ratio	0.20	0.15	32.17%	The ratio increased due to additional borrowing taken by the company during the year to meet its expanded working working capital requirements and repayment of redeemable preference share capital
Operating Profit Margin (%)	15.9%	21.8%	(27.36%)	Margins moderated on account of a higher proportion of stock-in-trade purchases during the expansion phase, which carry a lower margin profile than core execution work.
Net Profit Ratio	9%	12%	(24.17%)	NA
Return on Equity Ratio	0.02%	0.02%	14.86%	NA

Note: Ratios are computed on Standalone figures. Turnover ratios use average balances; interest coverage is EBIT over finance cost; debt-equity includes long-term and short-term borrowings.

RISK MANAGEMENT

Operating at the intersection of clean energy, waste valorisation, and infrastructure development, Organic Recycling Systems Limited (ORSL) is exposed to a dynamic risk environment. At ORSL, we recognise that effective risk management is integral to sustaining growth, safeguarding stakeholder value, and navigating an evolving industrial landscape. The Company has established a structured risk management framework that enables the timely identification, assessment, and mitigation of key business risks, supported by continuous monitoring and internal controls.

Risk type	Risk definition	Mitigation
Policy & regulatory risk	The waste-to-energy and biofuel sector is closely linked to government policies, incentives and regulatory frameworks. Any changes in subsidy structures, blending mandates or project approvals could impact project viability and timelines.	ORSL\u2019s business model is aligned with long-term national priorities such as SATAT, GOBARdhan and clean energy transition. The Company maintains active engagement with regulatory bodies and diversifies its project portfolio to reduce dependence on any single policy framework.
Execution & project risk	Delays in project execution due to land acquisition, approvals, logistics or contractor dependencies may impact revenue recognition and cost structures.	The Company leverages its integrated EPC capabilities, experienced project management teams and standardised processes to ensure timely execution. Strong vendor networks and phased project planning further mitigate execution risks.
Feedstock availability & quality risk	Availability and consistency of feedstock (municipal waste, agricultural residue, etc.) remain critical for plant operations. Variability in supply can impact plant efficiency and output.	ORSL\u2019s multi-feedstock processing capability reduces dependence on a single source. Long-term agreements with municipalities and suppliers, along with decentralised sourcing strategies, ensure operational continuity.
Technology & performance risk	Underperformance of waste-to-energy technologies or the inability to scale efficiently may affect plant output, profitability, and client confidence.	The Company\u2019s proprietary technologies, continuous R&D investments and pilot testing frameworks ensure performance reliability. Ongoing monitoring and process optimisation further enhance operational efficiency.
Financial & capital risk	Large-scale infrastructure projects require significant capital investment. Any constraints in funding or cost overruns may impact financial performance.	ORSL maintains a disciplined capital allocation strategy and a balanced mix of EPC and asset-light models. Strategic partnerships and equity participation structures enable efficient capital deployment and risk sharing.
Market & pricing risk	Fluctuations in energy prices, carbon credit markets, and offtake agreements may impact revenue realisation.	The Company diversifies its revenue streams across EPC, operations, bioenergy sales and emerging value-added products. Long-term offtake agreements and policy-backed pricing mechanisms provide stability.
Supply chain risk	Disruptions in the supply chain for equipment, raw materials, or logistics may delay project timelines and increase costs.	ORSL has built a strong and diversified supplier network, with a focus on localisation and long-term vendor relationships to ensure supply continuity and cost efficiency.
Environmental & social risk	Non-compliance with environmental norms or community-related challenges could impact project approvals and operations.	The Company adheres to stringent environmental standards and actively engages with local communities. Its solutions inherently contribute to sustainability, supporting waste reduction and cleaner energy generation.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

At ORSL, robust internal control systems are in place to ensure financial integrity and regulatory compliance, aligned with the Companys evolving scale and operational complexity. These controls encompass a wide range of policies, procedures, and statutory requirements, forming a strong foundation for sustainable growth.

The framework is designed to continuously evaluate and manage risks across all aspects of the business, including geopolitical and raw material price fluctuations risks, partner, and stakeholder interests, as well as commercial and financial exposures. Comprehensive management reporting systems further support the oversight of strategy, performance, operations, risk, funding, and governance. Internal auditors conduct detailed, year-round audits across all locations and departments, with their findings reported to a dedicated Committee for timely review and action.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

In todays fast-evolving and competitive business environment, ORSL firmly believes that its people are its greatest asset. Acknowledging that employees form the backbone of the organisations success, ORSL has adopted a holistic approach to workforce development. By integrating industry the best practices and standard operating procedures across departments, the company ensures operational consistency, enhances team efficiency, and drives collective performance.

But ORSLs commitment goes beyond process. With a strong focus on future-readiness, the company continuously invests in skill development through structured learning and training programs. These initiatives are designed not just to upskill employees but to cultivate a mindset of curiosity, adaptability, and continuous growth. As of March 31, 2026, the company had 200+ employees on its payroll.

CAUTIONARY STATEMENT

The statements made in this report describing the Companys objectives, estimations, expectations, projections, outlooks, constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results may differ from such expectations and projections, whether express or implied. The statements are based on certain assumptions and future events over which the Company has no direct control. The Company assumes no responsibility to publicly amend, modify and revise any of the statements based on any subsequent developments, information or events.