Paradeep Phosphates Ltd Management Discussions

Economic Review

Global Economy¹

In CY2024, the global economy maintained a growth rate of 3.2%, demonstrating its adaptive capacity to unpredictable circumstances such as geopolitical conflicts, fluctuating trade relations and shifting monetary policies. While advanced economies experienced modest growth at 1.7%, emerging markets and developing economies (EMDEs) witnessed a much stronger performance, expanding at 4.2%. One of the more significant trends of the year was the continued decrease in global headline inflation, declining from 6.7% in CY2023 to 5.8% in CY2024. This decline, however, varies widely across regions. Advanced economies are making significant progress toward meeting their target inflation rates while emerging markets continue to grapple with high inflation due to currency depreciation and persistent supply chain disruptions.

GDP Growth Projections

As inflationary pressures eased, major central banks began to move away from tight monetary policies and adopting a more cautious approach with gradual interest rate cuts. This shift is expected to boost greater liquidity and encouraging private sector investments.

However, the global trade environment remains volatile, with recent tariff implementations by US, including a baseline 10% duty on all imports from April 5, 2025 and additional ‘reciprocal tariffs targeting trade surplus nations like China, the EU and Japan presenting significant obstacles for businesses reliant on international supply chains. These changes have disrupted the flow of goods, raising costs and intensifying tensions between major trade partners. The world trade organization has revised down its global trade growth forecast for 2025, with economists warning of recessionary risks in the worlds largest economies as a result of these ongoing tariff escalations and policy uncertainties.

Outlook

While uncertainties persist and the global economy faces ongoing challenges, the outlook for the years ahead remains cautiously optimistic. Projections for CY2025 and CY2026 suggest stable growth at 3.3% each year. This will be supported by resilient consumer demand and strategic policy adjustments. Inflationary pressures are expected to ease further, with global headline inflation declining to 4.2% in CY2025. As price pressures diminish, central banks will continue their transition toward more accommodative monetary policies.

Trade tensions are likely to remain a significant factor in the economic landscape, as nations adjust to ongoing policy shifts and potential tariff adjustments, particularly in response to U.S. measures. For businesses, adaptability and strategic foresight will be essential. Companies are expected to prioritise regional trade partnerships and more resilient supply chains to mitigate the risks posed by trade disruptions. Emerging markets, with their growing customer base and manufacturing capabilities are likely to become more influential. With adaptable policies and technological advancement, the global economy is well-equipped to navigate challenges and capitalise on emerging opportunities.

Global Disruptions and Their Impact

Geopolitical and Trade Disruptions

The ongoing Russia-Ukraine conflict, has continued to disrupt global agricultural supply chains for key commodities such as grains, fertilizers and sunflower oil. In 2024, Ukraines agricultural output declined by an estimated 35%, which is affecting global grain availability and fertiliser trade flows. Sanctions on Russia have further impacted global energy and commodity markets that leading to elevated input costs and volatility.

These disruptions along with the recent tariff measures by the US have increased freight costs, caused longer lead times and forced many companies to seek alternative sourcing channels.

Environmental Challenges

Rise in extreme weather events including prolonged droughts, floods and heatwaves was observed in 2024 across major agricultural regions. Low water levels in the Panama Canal and disruptions in the Red Sea significantly delayed grain and fertiliser shipments.

Increasing Food Security Risk

The cascading effects of climate and geopolitical instability have amplified the threat to global food security. Rising input costs and yield uncertainties have made food affordability a central concern.

Indian Economy

The Indian economy emerged as one of the fastest-growing major economies globally, with GDP growth estimated at 6.5% in FY2025. Despite the challenges posed by geopolitical instability in regions like Europe and the Middle East, Indias economy demonstrated significant resilience. Rural demand showed improvement, supported by record Kharif harvest and favourable weather conditions. While the manufacturing sector faced pressures from rising input costs, weak external demand and seasonal fluctuations, private consumption remained stable with consistent domestic spending helping sustain economic activity.

Inflation remained broadly within the Reserve Bank of Indias (RBI) target range, aided by effective monetary policies, even amid global commodity price fluctuations and supply-side pressures. The RBI maintained a calibrated approach, ensuring that inflation management did not hinder overall economic growth. Headline inflation eased to 3.6%, primarily due to a decrease in food price inflation.

India remains on track for consistent, inclusive economic growth, with real GDP expected to expand steadily, supported by high-capacity utilisation and sustained public investment in infrastructure. Government capex, especially in sectors such as transport, digital infrastructure and agriculture, continued to stimulate economic activity. The government is expected to meet its fiscal deficit target of 4.4% for FY26 through aggressive disinvestment initiatives and the monetisation of assets.³

Outlook

The outlook for Indias economy is promising, driven by prospects of healthy Rabi harvest, sustained manufacturing profitability and resilience. Government initiatives such as Make in India, Atmanirbhar Bharat and green industrialisation are expected to generate substantial employment and investment opportunities across sectors. A revival in private capital expenditure (CapEx), coupled with improving business sentiments, suggests a positive shift in economic activity. India is attentively observing the global tariff environment and developing a measured response.

While global uncertainties such as geopolitical tensions and volatility in financial markets fluctuations persist, Indias proactive policy measures are providing a solid foundation for growth. The Reserve Bank of India reduced the repo rate by 100 basis points to 5.5% including the 50 bps rate cut in June, 2025, which is expected to increase liquidity in the economy. This marks back-to-back rate cuts as the RBI shifts to an accommodative stance in response to easing inflation and global uncertainties. These measures have injected additional liquidity into the financial system, eased borrowing costs and are expected to further support credit availability and economic growth. The change in personal income tax rate in the Central Government budget for the financial year 2025-26 is expected to spur the economic growth further.

Efforts to diversify export markets, enhance domestic production capacities and implement structural reforms are strengthening the countrys position within global supply chains. Taking a view on the long-term outlook, the Indian economy is well positioned for sustained growth, aligned with the Governments vision of achieving Viksit Bharat by 2047 - a developed nation driven by inclusive prosperity, innovation and productivity-led growth.

Industry Overview

Agriculture and Crop Production Industry

Global

Global agriculture and crop production remained resilient through CY2024-25, effectively adapting to challenges arising from climate fluctuations, disrupted supply chains, evolving trade dynamics and shifting consumer preferences. Following a sharp downturn caused by extreme weather conditions and high input costs, agricultural production began to stabilise in CY2024. Structural transformation within global food systems continues to be driven by the dual imperatives of increasing productivity and ensuring sustainability.

Global crop output is projected to grow at an average annual rate of 1.1% over the next decade, with productivity improvements accounting for more than 80% of these gains. According to estimates, global cereal production for the 2024-25 cycle has been revised to 2,853 million tonnes, supported by improved wheat and rice yields in certain regions. The primary factors behind this growth include the rising global population, a rising middle-class with a growing appetite for diverse and nutritious diets in emerging economies.

South and Southeast Asia are expected to contribute significantly to global agricultural growth, although concerns around land degradation, water scarcity and over-reliance of inputs present risks to long-term sustainability. Sub-Saharan Africa is likely to witness the most rapid growth in crop production, supported by improvements in yield and better access to modern farming technologies and inputs. However, climate-linked disruptions and geopolitical tensions remain significant concerns. The tail-end of El Ni?o and the onset of La Ni?a have led to erratic weather patterns, causing uneven rainfall across regions.⁵ Moreover, ongoing conflicts in the Black Sea and the Middle East have strained global grain trade, affecting logistics and supply chains.

Nevertheless, targeted policy interventions, improved inventory management and a reduction in fertiliser prices have helped stabilise supply chains and mitigate some of these disruptions.

While risks persist, long-term fundamentals remain strong for the global agriculture sector. With strategic investments in agri-tech, climate adaptation and inclusive value chains, the industry is positioned to address future food security challenges while promoting sustainable and resilient crop production systems.

India

Indias agriculture sector remains the backbone of Indias economy, accounting for approximately 18.2% of GDP and providing employment to over 42% of the workforce of the nation as of 2024. The country remains one of the worlds leading producers of cereals. In FY 2025, the sector contributed significantly to food security, rural livelihoods and macroeconomic stability.

Growth in the agriculture and allied sectors accelerated in FY25 after recovering from relatively muted performance observed in previous quarters. Favourable monsoons, rising rural demand, consistent policy support and sustained investments in irrigation, mechanisation and rural infrastructure supported this positive shift.⁶ According to advance estimates, agriculture crop production estimated total foodgrains production at 3539.53 lakh million tonnes in 2024-25, a 6.5% increase over the previous year due to increases in both kharif and rabi production. This increase was supported by improved sowing practices across major crop belts and rising adoption of precision farming and quality inputs.⁷ Reservoir levels are robust, standing at 47% of total capacity, which is above both the previous years figures and the decadal average.⁸

Acknowledging the importance of agriculture in driving Indias economic growth, the Union Budget 2025-26 identified the sector as the first engine of Indias growth. To boost farm productivity and enhance rural incomes, the government introduced several targeted initiatives. The Prime Minister Dhan-Dhaanya Krishi Yojanawasintroducedtoelevate100low-productivityagricultural districts through irrigation facilities, post-harvest infrastructure, access to credit and crop diversification. In pulses, where India remains a major importer, a new Mission for Aatmanirbharta was announced, focused on increasing domestic production of tur, urad and masoor through price assurance and procurement support for registered farmers.

In response to climate variability and rising input costs, policy emphasis has shifted towards sustainability and optimising resource use. The government is adopting initiatives that promote organic farming, micro-irrigation and the use of alternate fertilisers, while also leveraging digital technologies for better weather forecasting and soil health management. These efforts are being scaled up under the National Mission on Sustainable Agriculture and the Digital Agriculture Mission. Looking ahead, Indias agriculture sector is expected to benefit from evolving dietary preferences, rising rural consumption and the formalisation of agricultural value chains.

Growth Drivers

Favourable Government Policies

The governments flagship PM-KISAN scheme continues to provide crucial support for farmers, having allocated over RS. 3.46 lakh crore to more than 11 crore beneficiaries since its launch in 2018. Seven new agricultural schemes announced in September 2024, collectively valued at RS. 13,966 crore, are set for full implementation in 2025.⁹

Record Foodgrain Production

India is expected to achieve new heights in foodgrain production in 2025, with kharif foodgrain production estimated to hit a record 164.7 million tonnes for the 2024-25 crop year, which concludes in June 2025.¹⁰ The winter crop season is also progressing steadily, with wheat planting already covering 29.31 million hectares by mid-December 2024.

Technological Adoption

The sector is witnessing increased technological adoption, with drones and AI-driven tools gaining traction. These technologies offer immense potential to enhance productivity and efficiency across the agricultural value chain.

Export Growth

Indias agricultural exports are set to surpass $60 billion by 2025, driven by a growing global demand for organic and specialty products. The Agricultural Export Policy, launched with a vision to double exports by 2030, is facilitating investments in logistics and cold storage.

Infrastructure Development

Indias growth strategy is centred around infrastructure development, with increasing emphasis on rural areas. Continuous investments in essential infrastructure, including roads, electricity and digital connectivity are transforming many agricultural areas as well as lowering transportation and storage costs while improving market access.

Fertiliser industry

Global¹¹

The global fertiliser industry experienced a strong recovery during 2024-25, following a period of contraction in the previous two years. Demand for essential nutrients- nitrogen, phosphate and potash is expected to reacRs. 205 million tonnes in 2025. This reflects the combined effect of easing global prices and strong policy support in key agricultural regions. However, the global fertilizer industry is experiencing significant disruption due to a wave of new and proposed tariffs among major trading economies. The United States has implemented a 25% tariff on fertilizer imports from Canada and Mexico and increased tariffs to 20% on Chinese goods which is impacting the cost and availability of key nutrients such as potash. The European Union has also announced escalating import duties on Russian and Belarusian fertilizers including urea, DAP, MAP and NPK, starting from July 2025, which is further tightening global supply and driving up prices.

Simultaneously, Chinas ongoing restrictions on fertilizer exports have limited global availability of DAP, MAP and urea, leading to heightened price volatility and supply uncertainty. These tariff actions combined with existing geopolitical and logistical challenges, are reshaping global trade flows, increasing input costs for farmers and manufacturers and creating persistent uncertainty in fertilizer markets.

Global Fertilizer Consumption

(Million ton)

Nitrogen continues to be the dominant fertiliser nutrient, with global consumption projected to reacRs. 116 million tonnes. Countries like India, China, Indonesia and Russia continued to drive growth, supported by government policies, subsidies and price regulations. Potash demand is also on the rise, with estimates suggesting a total of 41 million tonnes due to solid growth across Asia. Meanwhile, phosphate use is gradually recovering, although it has not yet reached previous peaks as pricing pressure continues to weigh on demand in parts of Latin America.

On the supply side, global capacity and production has been steadily increasing. Ammonia production is forecast to grow to 189.8 million tonnes, while urea output is expected to touch an all-time high of 199.7 million tonnes. West Asia, China and Iran have emerged as leading contributors to this surge. Additionally, green ammonia projects with around 1.3 million tonnes of nitrogen equivalent are expected to become operational by the end of 2025, showing an early shift towards decarbonization in fertiliser manufacturing.

In the phosphate segment, phosphoric acid production is projected to rise to 88.4 million tonnes, led by Morocco and China. Meanwhile, the output of MAP and DAP is expected to recover to 66.8 million tonnes, rebounding from earlier supply disruptions. In the potash segment, global production is anticipated to reacRs. 73.5 million tonnes, supported by capacity expansions in Russia, Laos and Canada.

Although nitrogen and potash prices have declined, the affordability of fertilisers remains uneven across different regions. Phosphate fertilisers, in particular, have become less accessible in regions like Latin America, where elevated input costs and weaker crop prices have reduced demand in countries like Brazil and Argentina. In contrast, government programmes in India and Indonesia have stabilised fertiliser prices with regulated prices and strong subsidy cover, shielding local

Regional Overview

Asia	Asia continues to dominate global fertiliser consumption, contributing over 40% of the projected growth between FY2023 and FY2025. In South Asia, India has seen robust nitrogen and phosphate fertiliser use, supported by favourable government procurement policies.
	Meanwhile, in East and Southeast Asia, especially in palm oil-growing regions like Indonesia and Malaysia, the demand for potash is on the rise.
Eastern Europe and Central Asia (EECA)	Fertiliser use in EECA is recovering following disruptions caused by geopolitical tensions. As the regions stabilise, fertiliser use is returning to pre-crisis levels, with Russia scaling up both domestic use and exports, particularly in the nitrogen and potash segments.
Africa	Fertiliser demand in Sub-Saharan Africa is increasing. This is due to countries Ethiopia embracing more efficient formulations such as DAP, supported by policy reform and international investment. Despite ongoing challenges related to infrastructure and pricing challenges, the overall outlook remains positive due to continued growth in application rates.
Latin America	Consumption trends in Latin America have been varied. In countries such as Brazil and Argentina, the high cost of phosphate fertilisers, especially MAP, has led to a decrease in usage. On the other hand, demand for potash has remained more stable, aided by falling prices and wider availability.
North America and Western Europe	Usage levels in these established markets remain relatively steady, with little overall growth. However, there is a visible shift towards more efficient products and sustainability-focused inputs. This change is being driven by stricter environmental regulations and increasing pressure to meet climate goals.

India

The fertiliser industry is integral in Indias agricultural sector and food security goals. As one of the largest global consumers and producers of fertilisers, Indias robust domestic manufacturing capacity continues to support agricultural productivity. In FY 2025, the sector remained resilient, bolstered by consistent government support, steady demand and initiatives aimed at reducing reliance on imports. While global fertiliser prices experienced some moderation, Indias fertiliser market has been shaped by evolving international supply dynamics, shifting consumption trends and adjustments to government subsidy policies.

Indias domestic fertiliser production capacity has been expanding, particularly for urea. The country aims to achieve self-sufficiency in urea production by 2025-26 through increased local production of nano urea. Government support through fertilizer subsidies remains a critical enabler of fertilizer affordability for farmers. The Union Budget 2025-26 allocated

3.71 lakh crore for food and fertiliser subsidies to ensure access to affordable agricultural inputs.¹² The budget also announced the establishment of a new urea plant at Namrup, Assam, with an annual capacity of 1.27 Lakh MT, which shows the push towards reducing dependence on imports and promoting domestic urea production capacity.¹³

Production, Import and Sales during 2024-25¹⁸

Indias fertilizer supply chain remained robust and resilient in FY 2024-25, supported by consistent domestic production, easing global input costs and strong government support. The availability of fertilisers continued to meet the demands of the agricultural sector, even as sourcing strategies and price fluctuations evolved.

From April 2024 to March2025, domestic fertilizer production presented varied performance across different segments. Urea production reached 30.64 million tonnes, declining by 2.4% compared to the previous year, while DAP production dropped by 12.2%, totalling to 3.77 million tonnes. However, production of NP/NPK complex fertiliser output increased by 18.7% to 11.33 million tonnes, while SSP production rose by 18.3% to 5.24 million tonnes. These trends indicate a shift towards more balanced nutrient formulations.

India made considerable progress towards reducing its dependence on fertiliser imports. Urea imports decreased by 19.8% to 5.65 million tonnes, while DAP imports fell by 17.9% to 4.57 million tonnes. However, MOP imports increased by 23.4% and reached 3.54 million tonnes.

Urea sales increased by 8.4% to 38.77 million tonnes, while NP/ NPK sales surged by 28.4% to 14.21 million tonnes, driven by improved affordability and better access. The higher offtake was supported by strong reservoir levels and expanded Rabi crop acreage. MOP sales also saw an increase of 33.9% to 2.20 million tonnes. However, DAP sales declined by 14.2% to 9.28 million tonnes, largely due to import constraints and elevated prices in the market.

Production, Import and Sale of Major Fertilizers in April-March2024-25

Fertilisers	Production	Import	Sale*
Urea	30,640.8	5,647.0	38,774.4
DAP	3,769.3	4,569.0	9,281.5
MOP	-	3,541.0	2,202.3**
NP/NPKs (Other	11,331.5	2,272.0	14,214.2
than DAP)
SSP	5,243.9	-	928.5

*= DBT Sale (Indigenous + imported)

**= For direct application. Excludes supply to NPK complex fertiliser units

In 2025, Indias total fertiliser consumption is expected to see a modest rise, building on improved monsoons and higher reservoir levels. The expansion of Rabi crops acreage like wheat and gram, combined with strong government procurement schemes in major states, contributed to sustained nutrient demand.

The fertiliser industry in India is undergoing a significant transformation with the integration of innovative technologies such as nano fertilisers and bio fertilisers. India has emerged as a global leader in nano agricultural inputs, including nano fertilizers and micronutrients, promoting environmental sustainability without compromising on crop yields. The governments Paramparagat Krishi Vikas Yojana (PKVY) is accelerating the adoption of organic farming methods. By offering financial support for organic inputs, the scheme is creating opportunities in the organic and bio-fertiliser segments.

Company Overview

Paradeep Phosphates Limited (PPL) is Indias second-largest private-sector phosphatic fertiliser manufacturer. The Company operates two strategically located facilities in Paradeep (Odisha) and Zuarinagar (Goa), with a total installed capacity of 3.0 MMTPA. These plants benefit from robust backward integration capabilities and are situated near ports that streamline raw material logistics. The Paradeep unit specialises in phosphatic fertilisers such as DAP and multiple NPK formulations, while the Goa unit offers a broader range of products, including NPK variants and a 0.4 MMTPA urea capacity.

The Company has strengthened its market position through strategic sourcing partnerships and robust backward integration, including its in-house phosphoric acid and ammonia production. This enables the Company to maintain cost effectiveness while minimising exposure to global price volatility. The Company continues to widen its product portfolio, introducing innovative solutions like Nano Urea, Nano DAP and Triple Super Phosphate (TSP). These innovations align with the governments emphasis on enhancing nutrient use efficiency and promoting sustainable farming practices.

95,000+

Distribution network

Its flagship brands, Jai Kisaan and Navratna, are trusted by over 9.5 million farmers. This confidence is backed by a strong distribution network of 95,000+ retailers across 16 Indian states. The proposed merger of Mangalore Chemicals & Fertilizers will further enhance PPLs market presence, creating opportunities for product synergies. This move will enable the Company to leverage economies of scale and solidify its leadership in the non-urea fertiliser space.

Opportunities

Favourable Policy Push for Non-Urea Fertilizers

The governments emphasis on balanced nutrient use and the increased allocation under the Nutrient-Based Subsidy (NBS) scheme is expected to drive higher adoption of phosphatic and complex fertilisers, areas in which the Company has a strong presence.

Expanding Portfolio of Nutrient-Efficient Products

The Companys foray into new-generation offerings like Nano Urea, Nano DAP and Triple Super Phosphate (TSP) aligns with the national agenda on sustainable agriculture and nutrient use efficiency, creating long-term growth potential.

Backward Integration Ensuring Cost and Supply Stability

In-house production of key intermediates, such as phosphoric acid, sulfuric acid and ammonia protects from global supply shocks and enhances cost competitiveness.

Robust Distribution Network and Strong Brand Equity

The extensive distribution footprint across 16 Indian states, along with strong farmer recall of the ‘Jai Kisaan and ‘Navratna brands, positions the Company to capture incremental market share in both core and emerging regions.

Strategic Capacity Expansion Initiatives

Ongoing debottlenecking and brownfield expansions at Paradeep and Goa are expected to boost capacity utilisation and improve operating leverage in the near term.

Merger-led Synergies and Regional Diversification

The amalgamation with Mangalore Chemicals & Fertilizers is expected to unlock scale benefits, strengthen access to South Indian markets and enhance operational efficiencies across procurement, production and sales.

Threats

Exposure to Raw Material Price Volatility

The continued reliance on imported inputs such as rock phosphate, phosphoric acid, sulfur, sulfuric acid and ammonia exposes the Company to fluctuations in global prices and foreign exchange movements.

Seasonal and Climatic Dependencies

Fertiliser demand is largely influenced by the monsoons. Erratic rainfall or delayed sowing seasons can affect offtake and channel inventory.

Regulatory and Policy Risks

The industry remains sensitive to fluctuations in subsidy allocation, disbursement timelines and price controls, which can impact working capital and profitability.

Management Discussion and Analysis (Contd.)

Operational Highlights

Operational Efficiency

The Company continued to optimise operations across both Paradeep and Goa units, supported by its backward integration in phosphoric acid and sulphuric acid. The ongoing sulphuric acid capacity expansion in Paradeep from 1.39 MMTPA to 2.00 MMTPA remains on track and is expected to support enhanced intermediate production in the coming year. The Company also began MOP bagging and dispatch operations at the Paradeep unit for the first time and executed critical shutdown and restart activities efficiently to improve uptime and reliability

Strategic Investment

A landmark achievement during the year was the signing of a

4,000 crore MoU with the Government of Odisha. This investment will be deployed over five years towards expanding phosphatic fertiliser manufacturing capacity, developing infrastructure including port/jetty facilities, integrating renewable energy and generating direct and indirect employment. The initiative aligns with the Companys vision of self-sufficiency in fertiliser production and regional economic development.

Product Innovation

PPL has continued to drive product innovation by launching Indias first biogenic nano fertilizers under Jai Kisaan Navratna Nano Shakti series, which includes Nano Urea, Nano DAP and TSP 46% P. These products are designed to improve nutrient use efficiency, reduce leaching, and deliver better agronomic results. The nano products boast over 90% nutrient use efficiency compared to 30-35% in conventional fertilisers and have undergone extensive trials across over 4,000 farmer fields.

Jai Kisaan Navratna TSP 46% P is a high-phosphorus fertilizer designed for basal application across various crops including legumes, pulses, oilseeds and vegetables. WitRs. 46% phosphorus content and high water solubility, this product enables precise nutrient management, reduces overuse of nitrogen and offers a cost-effective alternative to DAP, to support balanced fertilization and reduce subsidy burdens.

Performance Highlights

Particulars	FY 2024-25	FY 2023-24
Production (MT)	2,635,409	2,304,970
Sales Volume (MT)	3,033,966	2,527,591
Revenue from Operations	13,820.21	11,575.12
( Crores)
PBT ( Crores)	753.14	140.17
PAT ( Crores)	552.51	99.24
DAP	670	734
N-20	1,021	712
Other fertilizers	944	859
Total Fertilizers	2635	2305

Consolidated Financial Performance

This section provides an overview of the consolidated financial performance for the fiscal year ending 31^st March, 2025. The financial statements of PPL and its joint ventures comply with Indian Accounting Standards (Ind AS), as mandated by Section 133 of the Companies Act, 2013. The accompanying notes to the consolidated financial statements outline the significant accounting policies that have been followed in the preparation of these results.

Revenue

(In crore)	FY 2024-25	FY 2023-24	% Change
Operating Revenue	13,820.21	11,575.12	19.40
Other Income	111.40	68.84	61.82
Total Revenue	13,931.61	11,643.95	19.65

Revenue From Manufactured Products and Trade Products

(In crore)	FY 2024-25	FY 2023-24	% Change
Manufactured	11,961.30	10,316.68	15.94
Products
Traded Products	1,858.91	1,258.44	47.72
Operating Revenue	13,820.21	11,575.12	19.40

Cost of Materials

(In crore)	FY 2024-25	FY 2023-24	% Change
Cost of Material Consumed	8,660.41	7,609.04	13.82
Purchase of Stock in Trade	1,655.25	1,055.09	56.88
Changes in Inventories	(82.65)	334.32	(124.72)
Total Materials	10,233.01	8,998.45	13.72
Operating Revenue	13,820.21	11,575.12	19.40
Cost of Materials/ Operating Revenue	74.04%	77.74%	(4.75)

Employee Benefits

(In crore)	FY 2024-25	FY 2023-24	% Change
Employee Benefits	249.1	229.79	8.40
% of Total Revenue	1.80%	1.99%	(9.21)

Finance Costs

(In crore)	FY 2024-25	FY 2023-24	% Change
Finance Costs	362.29	366.03	(1.02)
% of Revenue	2.62%	3.16%	(17.10)

Depreciation and Amortisation

(In crore)	FY 2024-25	FY 2023-24	% Change
Depreciation and	251.81	210.67	19.53
Amortisation
% of Revenue	1.82%	1.82%	0.11

Other Expenses

(In crore)	FY 2024-25	FY 2023-24	% Change
Other Expenses	2082.26	1,698.86	22.57
% of Revenue	15.07%	14.68%	2.66

Income Tax

(In crore)	FY 2024-25	FY 2023-24	% Change
Income tax	200.63	40.93	390.18
Profit Before Tax	753.14	140.17	437.30
Tax as % of Profit Before Tax	26.64%	29.20%	(8.77)

Key Financial Ratios

Ratio	Numerator	Denominator	FY 2024-25	FY 2023-24	% Change
Current Ratio (In Times)	Total Current Assets	Total Current Liabilities	1.14	1.10	4%
Debt-Equity Ratio (In Times)	Total Borrowings	Total Equity	1.06	1.12	(5%)
Debt Service Coverage Ratio (In Times)	Earning for Debt Service = Profit for the Year + Interest Expenses + Depreciation and Amortisation Expenses + Other Non-Cash Adjustments	Debt Service = Interest + Principal Repayments	1.83	0.93	96%
Return on Equity Ratio (In %)	Profit for the Year	Average Total Equity	14.46%	2.81%	415%
Inventory Turnover Ratio (In	Revenue from	Average Inventory	6.71	5.68	18%
Times)	Operations
Trade Receivables Turnover	Revenue from	Average Trade Receivables	5.13	3.54	45%
Ratio (In Times)	Operations
Trade Payables Turnover Ratio (In Times)	Purchase of Raw Materials and Traded Goods	Average Trade Payables	6.05	5.06	20%
Net Capital Turnover Ratio (In Times)	Revenue from Operations	Average Working Capital (i.e. Total Current Assets Less Total Current Liabilities)	19.33	20.02	(3%)
Net Profit Ratio (In %)	Profit for the Year	Revenue from Operations	4.00%	0.86%	365%
Return on Capital Employed (In %)	Profit Before Tax and Finance Costs	Capital Employed = Tangible Net Worth + Total Debt + Deferred Tax Liabilities	12.98%	6.57%	98%

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous Financial Year) in key financial ratios:

Debt Service Coverage Ratio	Net Profit Ratio
The % change is primarily on account of higher profits earned during the year.	The % change is primarily on account of higher profits earned during the year.
Return on Equity Ratio	Return on Capital Employed
The % change is primarily on account of higher profits earned during the year.	The % change is primarily on account of higher profits earned during the year.

Trade Receivables Turnover Ratio

The % change is primarily on account of increase in turnover during the year and better trade debtor collection.

Risk Management

The Company operates in a complex and evolving regulatory landscape and is exposed to various internal and external risks that could influence its operations, financial performance and future growth. PPL has a structured risk management framework to identify, monitor and address potential risks. This framework also ensures that the Company can respond swiftly to emerging threats and continue to operate efficiently.

Risk	Risk Description	Risk Causes	Risk Mitigation
Raw Material Price Volatility	The Company is highly sensitive to fluctuations in the prices of critical raw materials such as rock phosphate, ammonia, phosphoric acid, sulfur and natural gas. As these commodities are influenced by global market dynamics, their price volatility can significantly affect production costs and profit margins.	Global geopolitical tensions, particularly in key supplier regions, have escalated in 2024-25	PPL leverages its strategic relationship with OCP Morocco (a part of the promoter group) to secure a reliable supply of raw materials with certain cost advantages
		Ongoing conflicts in the Middle East, a strengthening dollar and persistent supply chain disruptions are creating uncertainty in international fertiliser markets. Furthermore, climate- related disruptions to mining operations in major p h o s p h a t e - p ro d u c i n g areas have contributed to supply constraints.	The Company is planning to improvise its backward integration capabilities by expanding its phosphoric acid capacity from 0.5 MMTPA to 0.7 MMTPA, thereby reducing reliance on imported intermediates
			Long-term supply agreements with key vendors, coupled with effective inventory management, help mitigate short-term price volatility.
Regulatory and Subsidy Risks	A substantial portion of the Companys product portfolio falls under the government subsidy regime, thus, any unfavourable changes in subsidy policies can directly affect pricing, demand patterns and overall profitability.	Evolving government regulations regarding subsidy levels, potential mandates for green hydrogen in fertiliser plants and adjustments to nutrient-based subsidy frameworks, present ongoing challenges. Budget constraints at the government level may lead to delays in subsidy disbursements or adjustments to subsidy rates.	The Company actively engages with regulatory authorities and industry associations to stay ahead of policy changes and contribute to policy discussions.
	Navigating the complex regulatory environment requires constant vigilance to stay aligned with evolving policies.		PPL is diversifying its product portfolio by incorporating specialty and non-subsidised products, reducing its reliance on subsidy- driven segments.
			The Companys expansion into nano fertilisers represent a strategic move towards products that may benefit from different regulatory treatments.
Market Competition	The fertiliser industry in India is witnessing intensifying competition from both domestic and international players, creating pressure on market share, pricing strategies and customer retention.	Capacity expansions by existing competitors, the introduction of innovative products and a rise in finished fertilisers have heightened competitive pressures.	The merger between PPL and MCFL is expected to significantly expand market presence and production capacity.
		Also, consolidation within the industry is leading to the emergence of competitors with enhanced economies of scale.	This strategic consolidation will enable PPL to enter into new markets, particularly in the southern region, while driving cost synergies.
			The Company continues to strengthen its brand presence through targeted marketing efforts and dealer engagement programmes.
Supply Chain Disruptions	Disruptions in global and domestic supply chains can affect the timely availability of raw materials and the distribution of finished products, potentially causing production delays and market shortages.	Ongoing geopolitical conflicts, port congestion, natural disasters and fluctuating freight and energy costs have made fertiliser supply chains particularly vulnerable in 2024-25.	PPL is enhancing its backward integration capabilities, with sulphuric acid augmentation on track for completion by early FY26. This vertical integration strategy reduces dependence on external suppliers and strengthens supply chain resilience.
		The Red Sea shipping crisis, along with intermittent restrictions at key ports, has further complicated international logistics.	Maintaining the optimum level of inventories to cushion against the short term disruption.
			Broadening its supplier base across diverse geographies to reduce dependence on any single source.
			The Company has diversified its port usage for imports and implemented advanced logistics planning systems to optimise transportation routes and methods.
Foreign Exchange Fluctuations	The Company is significantly exposed to foreign exchange fluctuation due to its substantial import of raw materials and export operations, which can impact co sts and revenue outcomes.	Globaleconomicuncertainties, changing monetary policies in major economies and ongoing geopolitical tensions have contributed to heightened volatility in currency markets. As a result, the Indian Rupee has experienced notable fluctuations against major currencies in 2024-25.	PPL implements comprehensive hedging strategies based on detailed exposure analysis and market conditions. The Company maintains a balanced approach to managing foreign currency risks through forward contracts and other financial instruments.
			With growing backward integration, PPL reduces reliance on imported raw materials, thereby mitigating its forex exposure over time.
Working Capital Management	The fertilizer business is capital- intensive, requiring efficient management of inventory, receivables and payables to ensure liquidity and maintain operational efficiency.	The seasonal fluctuations in agricultural demand, delays in subsidy disbursement and inventory management challenges contribute to working capital pressures. Additionally, market volatility may require higher buffer inventories, further intensifying the strain on working capital.	PPL has implemented advanced inventory management systems and optimised credit policies to improve working capital efficiency.
			The Company also maintains strong banking relationships, ensuring access to working capital facilities at favourable terms.
Climate Change Impact	Extreme weather events and changing climate patterns can disrupt agricultural productivity and influence fertiliser demand, leading to fluctuations in seasonal sales and overall market dynamics.	Global warming, changing precipitation patterns and the rising frequency of extreme weather events have created uncertainty in agricultural planning and production. Unseasonal rains and prolonged droughts in key agricultural regions have impacted cropping patterns.	PPL is diversifying its product portfolio to include climate- resilient solutions suitable for various agricultural conditions.
			The Company has embarked on its ESG journey with objectives to drive revenue while minimising costs through efficient resource utilisation.
			Also, the Company is strengthening its market intelligence capabilities to better respond to regional demand shifts from climate variations.

Human Resource

The Company continues to strengthen its position as a people-first organization, guided by the values of sustainability, customer first, agility and integrity.

Talent Management and Leadership Development

Companys structured talent management framework aims to identify, nurture and retain top talent across all levels. Through competency mapping, leadership pipelines and individualized development plans, the Company is building a high-performance workforce capable of adapting to evolving business needs. Succession planning in the Company is supported by workforce analytics, leadership assessment centres and mentorship programs, which ensure continuity in leadership and business sustainability.

Learning and Capability Building

Learning and development are central to the Companys capability-building agenda. A wide range of programs have been introduced to build technical expertise, leadership capabilities, and digital fluency.

SAKSHAM, a frontline skill development program, covered 395 employees and focused on technical upskilling, safety protocols and behavioural training to enhance responsiveness and operational excellence.

In collaboration with IIM Mumbai and IIM Lucknow, PPL initiated transformative capability-building programs for asset and customer facing teams. These programs covered Industry 4.0 technologies such as Artificial Intelligence, Machine Learning, Blockchain and Included Modules on Finance, HR, Supply Chain, ESG and Lean practices.

The Nayi Disha 4.0 experiential learning platform was launched for the sales and distribution teams to strengthen team collaboration and cross-functional synergy.

The Company also launched Elevate, a LinkedIn-powered digital learning solution that offers access to over 16,000 global courses to promote self-paced continuous learning.

Employee Engagement and Culture

The Company promotes a culture of engagement and empowerment through its PPL Cares framework, which is built around seven principles- celebrate, communicate, bond, recognize, grow, nurture and empower. This framework promotes connection, recognition and personal growth across all levels of the organization.

This years key engagement initiatives included a workshop on the balanced scorecard for senior leaders and the Annual Josh Meet 2024 for regional managers. These initiatives focused on strengthening alignment with PPLs strategic objectives and promoting cross-functional collaboration.

Diversity and Inclusion

PPL promotes an inclusive and equitable culture where individuals from diverse backgrounds are empowered to contribute and thrive. The Companys diversity programs focus on equal opportunities, skill enhancement and building a culture of collaboration, empathy and mutual respect. This approach not only enhances organizational innovation and resilience but also makes PPL an employer of choice.

Digital HR Transformation

To improve employee experience and operational efficiency, PPL has embraced HR digitization through automated payroll, employee self-service portals, cloud-based learning platforms, digital onboarding and training processes. These digital tools enable seamless access to HR services and support agile decision-making.

1,457

Total employees as of March31, 2025

Internal Control

PPL has a robust internal control system crucial to its success. This system ensures effective oversight of operations, safeguards assets and maintains regulatory compliance. The annual internal audit process reviews key business areas with inputs from internal auditors, the Audit Committee and the Board, who collectively work to enhance internal controls.

Cautionary Statement

CertainstatementsintheMDAsectionregardingfutureprospects may be forward-looking and involve risks and uncertainties that could lead to actual results differing materially. These statements are based on current assumptions and available information, which may change over time. As such, they reflect only the Companys intentions, beliefs, or expectations as of their date and are subject to change. The Company assumes no obligation to update these forward-looking statements in light of new information or future events.