Paushak Ltd Management Discussions

The Companys management provides its own perspective on the operating and financial performance of the Company during financial year 2024-25 and an outlook of the business performance in the coming years as follows:

In 2024-25, global GDP expanded by 3.2%, while India, one of the worlds fastest-growing economies achieved a robust growth rate of 6.3%. A key driver of this momentum was the manufacturing sector, particularly chemicals. The "China Plus One" strategy remained central to global supply chain diversification, as companies sought dependable partners capable of delivering sustainable and seamless solutions. India has emerged as a pivotal hub in this transition, attracting significant global interest, underpinned by trust, strong infrastructure, and progressive environmental & industrial policies.

While global chemical demand rebounded, an oversupply, especially from China-exerted downward pressure on prices, compressing margins. Despite this, our strong foothold in the Indian market supported volume growth, with the domestic pharmaceutical sector expanding by 8.4% in 2024 25. However, the agrochemical segment faced headwinds due to global price erosion, even as demand sentiment remained positive. Through strategic product portfolio management, we enhanced capacity utilization, although margins continued to be impacted by the oversupply environment.

In response to these dynamics, product innovation has become imperative. Global innovators are increasingly seeking to de-risk their supply chains by partnering with reliable and sustainable suppliers.

To match the current dynamic requirements of the chemical sector while ensuring sustainability of our plant operations,

Paushak has been making strategic investments in world-scale manufacturing facilities. This new facility has been designed with modernization in mind and serves as a replacement for our legacy plants while introducing enhanced streams for key derivatives. We are also introducing a new R&D complex, enabling us to provide innovative solutions to our partners across the world. Our previous FY22 investment in phosgene and key downstream intermediates is being efficiently utilized, and our ongoing projects are on track for commissioning in FY26. These initiatives position us to play a pivotal role in the global specialty chemicals landscape.

Complementing our infrastructure expansion, we have revitalized the Paushak brand to better reflect our focus on customer engagement, agility, and innovation. Our new logo, website, and communication materials align with the ethos of the Alembic Group.

Through our new initiatives of modernisation, innovation and sustainability, Paushak is well-positioned to meet the evolving needs of global markets. These investments will enhance our footprint in specialty chemicals and enable us to build enduring partnerships.

In FY26, the chemical industry is expected to continue its recovery, adapting to evolving market dynamics while balancing near-term agility with long-term strategic goals. At Paushak, we are well-positioned to lead this transition, supported by our upcoming multipurpose plant and advanced R&D centre.

We aim to strengthen our presence in the Global chemicals market, expand our derivatives portfolio, and deliver differentiated solutions to customers worldwide. Our focus will remain on enhancing modernisation, increasing operational efficiency, deepening customer engagement, accelerating product innovation, and upholding the highest standards of safety and sustainability.

The gross total income of the Company is Rs. 22,519 Lacs for the year under review as compared to Rs. 22,675 Lacs for the previous year. The Company registered a net profit of Rs. 4,938 Lacs for the year under review as compared to net profit of Rs. 5,435 Lacs for the previous year.

Kindly refer to the ratios disclosed under note no. 33(W) to the financial statements.

The Company believes that Internal Control is a necessary concomitant of the principle of Governance. It remains committed to ensure an effective Internal Control environment that provides assurance to the Board of Directors, Audit Committee and the management while ensuring reliability of financial and operational reporting and legal and regulatory compliance.

Interrelated control systems, covering all financial and operating functions, assure fulfilment of these objectives. The Company uses Enterprise Resource Planning (ERP) supported by in-built controls that ensures reliable and timely financial reporting.

As we expand our downstream portfolio and replace legacy assets with advanced technologies, we have reinforced our core leadership teams and remain deeply committed to investing in our people. We believe that building a high-performing team is essential to our long-term success. Thats why we continue to prioritize strategic hiring and capability development, ensuring we have the right talent in place to drive sustainable growth.

On behalf of the Board of Directors,