Pondy Oxides & Chemicals Ltd Management Discussions

ECONOMY REVIEW GLOBAL ECONOMIC OVERVIEW

During CY 2025, the global economy maintained a stable growth path, expanding by 3.4%, supported by resilient consumer demand, improving industrial activity and continued investments across manufacturing and technology-intensive industries. Despite persistent external challenges and evolving macroeconomic conditions, economic activity across major regions remained relatively steady.¹

At the same time, the operating environment became increasingly complex due to intensifying geopolitical developments and a gradual shift in global trade policies towards strategic and national security priorities. Growth in advanced economies moderated to 1.9%, while Emerging Market and Developing Economies (EMDEs) recorded stronger growth of 4.4%. International trade flows continued to face pressure from supply chain realignment and ongoing trade frictions, while regional conflicts contributed to volatility in commodity and energy

markets. Elevated energy prices and disruptions across supply networks further added to inflationary pressures and increased operating costs globally.²

Consequently, the global economy entered a phase marked by heightened uncertainty, persistent inflationary concerns and supply-side constraints, even as domestic demand and technology-led investments continued to support overall economic activity.³

OUTLOOK

The global economy has moderated amid persistent geopolitical tensions and evolving trade dynamics, with growth expected to remain stable, albeit below historical averages. Global GDP growth is projected at 3.1% in CY 2026 and 3.2% in CY 2027, reflecting the combined impact of supply-side constraints, cautious investment activity and evolving financial conditions. Global inflation is expected to remain elevated at 4.4% in CY 2026 before easing to 3.7% in CY 2027, indicating continued near-term inflationary pressures across major economies.

INDIAN ECONOMY

India continued to demonstrate strong economic resilience during FY 2025-26, driven by stable macroeconomic fundamentals, healthy domestic consumption and sustained investment activity. Real GDP growth stood at 7.7%, reflecting continued economic momentum despite geopolitical uncertainties and evolving global trade conditions.⁴ Infrastructure development, manufacturing expansion and public capital expenditure remained key pillars of growth during the year, with significant investments directed towards transport, logistics, energy and industrial infrastructure. These developments continued to strengthen industrial productivity, supply-chain integration and long-term manufacturing competitiveness across sectors.

Indias manufacturing and recycling ecosystem also witnessed steady progress during the year, supported by increasing focus on resource efficiency, circular economy practices and domestic value addition. Rising demand from automotive, electrical equipment, renewable energy, batteries and engineering industries continued to support growth across the non-ferrous metals and recycling value chain. In addition, increasing policy emphasis on organised recycling, sustainable manufacturing and supply-chain resilience continued to strengthen the outlook for secondary metals, resource recovery and environmentally responsible industrial operations. Regulatory initiatives relating to EPR frameworks, battery waste management and non-ferrous scrap recycling are also supporting greater formalisation and technological advancement across the recycling ecosystem.⁵

OUTLOOK

The Indian economy is expected to maintain a steady growth trajectory in FY 2026-27, with real GDP projected at around 6.6% despite prevailing global uncertainties.⁶ Domestic demand is expected to remain the primary growth driver, driven by stable consumption trends and continued infrastructure-led capital expenditure. Manufacturing expansion, ongoing digital transformation and strengthening of supply chains are likely to support continued investment activity and improve productivity across sectors. Inflation is expected to remain moderate, at approximately 4.5% to 4.6%, aided by stable food prices, easing supply-side pressures and continued policy support.⁷

The long-term outlook remains favourable for the recycling and secondary metals industry, supported by increasing emphasis on circular economy practices, resource security and environmentally responsible waste management systems. Implementation of EPR regulations across batteries, e-waste, plastics and non-ferrous scrap metals is expected to improve recycling efficiencies, strengthen organised collection networks and encourage investments in advanced recycling infrastructure and resource recovery technologies. Furthermore, increasing focus on domestic processing capabilities, sustainable manufacturing ecosystems and efficient utilisation of secondary

INDUSTRY STRUCTURE, DEVELOPMENT AND ITS OUTLOOK

GLOBAL SCRAP METAL RECYCLING MARKET⁸

The global scrap metal recycling market witnessed steady growth during the year, driven by rising industrial demand for sustainable raw materials, tightening environmental regulations and increasing focus on circular economy practices across major economies. The market was valued at approximately USD 436 billion in CY 2025 and is projected to exceed USD 722 billion by CY 2035, indicating strong long-term growth potential. Increasing adoption of recycled metals across automotive, construction, infrastructure, consumer goods and electrical applications continued to support market expansion, as industries focused on reducing carbon emissions, improving resource efficiency and lowering dependence on virgin metal extraction.

Asia-Pacific remained the largest regional market, led by strong manufacturing activity in China and India, while North America is expected to emerge as one of the fastest-growing regions over the coming years.

The non-ferrous scrap segment, particularly aluminium, copper and lead recycling, continued to gain strategic importance owing to its growing relevance in energy transition, electric vehicles, renewable infrastructure and sustainable industrial production. Volatility in primary metal prices, tightening global emission norms and rising investments in advanced recycling technologies further supported market growth during the year. Governments and industries across the world are increasingly prioritising

recycling ecosystems to strengthen raw material security and reduce environmental impact, leading to higher investments in collection, sorting and metal recovery infrastructure.

At the same time, advancements in automated separation technologies, digital traceability systems and high-efficiency processing solutions are improving recovery yields and operational efficiencies across the value chain. The increasing focus on decarbonisation and resource sustainability is expected to continue supporting long-term demand for recycled

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INDIAN SCRAP METAL RECYCLING MARKET⁹

Driven by increasing industrial activity, infrastructure expansion and rising focus on sustainable resource utilisation, Indias scrap metal recycling industry continued to witness steady growth during the year, alongside increasing policy focus on resource efficiency and circular economy practices. The Indian nonferrous scrap recycling market was valued at approximately USD 25.3 million in FY 2025 and is projected to reach nearly USD 30.7 million by FY 2034, reflecting stable long-term growth prospects. Demand for recycled non-ferrous metals such as aluminium, copper, lead and zinc continued to remain healthy across end-use sectors, including automotive, electrical equipment, construction, renewable energy and consumer durables.

The industry also benefited from growing awareness around sustainable metal sourcing, lower energy consumption associated with recycled metals and efforts to reduce dependence on imported raw materials.

The market environment during the year was further aided by the gradual formalisation of the recycling ecosystem, improvements in collection infrastructure and increasing investments in organised processing facilities. Regulatory initiatives promoting environmentally responsible waste management, coupled with rising emphasis on decarbonisation and efficient utilisation of secondary metals, continued to drive structural growth across the recycling value chain.

In addition, increasing domestic manufacturing activity, supported by government-led initiatives such as Make in India, continued to strengthen long-term demand visibility for recycled non-ferrous metals. Advancements in metal recovery, sorting and processing are also improving operational efficiencies and recovery rates, thereby enhancing the competitiveness of recycled metals within the broader industrial supply chain.

GLOBAL LEAD MARKET

Global lead demand continued to witness steady growth, driven largely by sustained consumption from the automotive batteries, industrial backup power systems, telecommunications, and energy storage applications. Worldwide demand for refined lead metal is projected to increase by 1.1% to approximately 13.72 million tonnes, alongside stable replacement demand for lead- acid batteries and improving industrial activity across several developing economies.

Demand trends remained particularly strong in the United States, where refined lead consumption increased significantly due to higher imports and stronger replacement battery demand. Europe recorded moderate growth across industrial and automotive applications. Emerging economies such as India, Brazil, Mexico, and the Republic of Korea also reported improving consumption trends, aided by infrastructure development, rising mobility demand, and expansion in energy storage requirements.

On the supply side, global lead production continued to remain well supported by both primary mining and secondary recycling activities. World lead mine production is expected to increase by 1.2% to nearly 4.60 million tonnes, led by higher output from Australia, China, India, Ireland, and Portugal. At the refined metal level, global production is projected to increase by 1.3% to around 13.83 million tonnes, alongside additional secondary lead capacities commissioned across major producing regions.

Higher recycling activity and stable smelting operations helped maintain balanced market conditions during the year, although operational disruptions and environmental compliance measures in certain regions continued to create intermittent supply-side pressures. Lead prices remained relatively firm, aided by steady procurement from battery manufacturers, improving industrial demand, and disciplined inventory management across global markets.

OUTLOOK

Going forward, the global lead market is expected to remain aligned with stable long-term demand fundamentals, particularly from lead-acid batteries used across automotive, industrial, and renewable energy storage applications. Rising electrification, expansion in backup power infrastructure, and continued dependence on conventional battery technologies across developing economies are likely to keep demand steady over the medium term.

At the same time, the industry is witnessing increasing focus on environmentally compliant recycling practices, secondary lead recovery, and operational efficiency improvements. These developments are expected to support balanced supply conditions and relatively stable pricing trends in the coming years.

INDIAN LEAD MARKET REVIEW¹¹

Demand for lead in India remained healthy during the year, supported by sustained consumption across automotive batteries, industrial power backup systems, telecom infrastructure and emerging energy storage applications. Rising generation of used lead-acid batteries across automotive, industrial and telecom sectors also continued to support growth in the domestic battery recycling industry.

Lead continued to remain an important raw material within the domestic energy storage ecosystem, with recycled lead accounting for a significant share of the countrys lead consumption. Growing environmental awareness, stricter regulatory oversight on battery disposal and increasing emphasis on sustainable metal recovery continued to support the organised recycling ecosystem during the year. The market also benefited from rising investments in collection

infrastructure, improvements in recycling practices and gradual formalisation across the value chain.

The long-term outlook for the Indian lead recycling industry remains positive, supported by sustained demand from automotive replacement batteries, renewable energy storage systems, telecom infrastructure and industrial power backup applications. Growth in electric mobility and increasing deployment of energy storage solutions are expected to further strengthen demand visibility for recycled lead over the medium term.

In addition, government initiatives promoting responsible battery waste management and circular economy practices are expected to encourage higher recycling rates and improved recovery efficiencies across the industry. Advancements in recycling technologies, alongside increasing focus on environmentally compliant operations, are likely to support capacity expansion and operational improvements within the organised sector. The industry is also expected to benefit from rising awareness around resource conservation and reduced dependence on primary lead imports, reinforcing the strategic importance of recycled lead within Indias broader metals and energy ecosystem.

Growth in Indias battery recycling market is supported by rising battery consumption across automotive and industrial applications, strengthening regulatory oversight and increasing focus on sustainable resource recovery. The sector continues to address challenges associated with collection infrastructure, technological adoption and formalisation of recycling channels.

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END USE OF LEAD ACID BATTERY

Lead recycling plays an important role in the global circular economy, with demand largely driven by the battery manufacturing industry. The automotive sector continued to remain the largest end-use segment for recycled lead, supported by steady replacement demand for lead-acid batteries across passenger vehicles, commercial vehicles, and industrial transportation applications. Rising adoption of energy storage systems, uninterrupted power supply solutions, and telecom infrastructure also contributed to higher utilisation of recycled lead in battery production.

Growing regulatory focus on sustainable metal recovery and responsible waste management further accelerated investments in organised battery collection and recycling infrastructure across key markets.

Industrial applications such as backup power systems, renewable energy storage, cable sheathing, radiation shielding, and speciality alloys also continued to support stable consumption of recycled lead. Developing economies witnessed increasing consumption due to infrastructure expansion, rising electrification, and growth in the automotive parc.

At the same time, advancements in secondary smelting technologies and stricter environmental compliance standards encouraged higher recovery efficiency and improved product quality across recycled lead applications. These developments continue to strengthen the long-term outlook for the global lead recycling industry.

ORGANISED VS UNORGANISED MARKET OF LEAD RECYCLING IN INDIA

The lead recycling industry in India continues to remain divided between a highly regulated, organised sector and a large, fragmented, informal market. The organised sector consists of authorised recycling facilities equipped with advanced smelting and refining technologies that focus on resource efficiency, safe operations, and environmental compliance. These facilities operate under stringent state pollution control regulations,

ensuring proper handling of toxic emissions and hazardous waste generated during the recycling process.

The organised recycling ecosystem has also gained momentum through statutory interventions, such as Extended Producer Responsibility (EPR) regulations and standardised tax frameworks like the Goods and Services Tax (GST), which incentivise corporate operations and better material traceability across the value chain.

While a portion of lead scrap collection continues to be routed through informal channels, the industry is increasingly witnessing a shift towards organised recycling infrastructure. Growing regulatory oversight and stricter environmental compliance requirements are supporting the migration of volumes towards authorised recyclers. The continued expansion of organised, technology-driven recycling facilities is expected to enhance resource recovery efficiencies, strengthen environmental compliance, and support long-term secondary lead availability for domestic industries.

COPPER MARKET

GLOBAL COPPER MARKET OVERVIEW

The global copper market is undergoing a significant structural shift, with copper emerging as a critical component in the clean energy transition. In addition to its traditional use in industrial manufacturing and construction, copper demand is increasingly driven by global net-zero mandates, expansion of electric vehicle (EV) ecosystems, grid modernisation, and infrastructure development for artificial intelligence data centres. Global refined copper demand is projected to reach approximately 33 million tonnes by 2035 and could surpass 50 million tonnes annually by 2050 under accelerated decarbonisation scenarios.

At the same time, the industry continues to face growing supply- side pressures. Primary mining operations are witnessing declining ore grades, rising operational costs, and geopolitical risks in key producing regions like Chile and Peru, resulting in a persistent structural deficit in raw copper concentrates.

To address this widening supply gap, the industry is increasingly shifting towards secondary copper production and advanced recycling technologies. Recycling copper scrap requires up to 85% lower energy compared to primary ore processing, making secondary copper production both economically attractive and important from a sustainability perspective. However, the secondary copper market faces distinct headwinds.

Global smelting capacity remains highly concentrated, with China accounting for over 44% of global processing capabilities, exposing supply chains to export restrictions and regional imbalances. In addition, tightening raw ore supply has driven Treatment and Refining Charges (TC/RCs) to historically low levels, placing pressure on margins for primary smelters. In this environment, recycling facilities with integrated efficient secondary scrap collection networks and advanced refining capabilities are better positioned to capitalise on the growing value opportunity in recycled copper.

GLOBAL COPPER RECYCLING MARKET¹²

The global recycled copper market continued to witness robust growth, supported by rising demand for sustainable raw materials across key industrial sectors. The market is estimated to be valued at approximately US$ 51.9 billion in 2026 and is projected to reach nearly US$ 105.1 billion by 2033, registering a CAGR of 10.6% during the forecast period.

Growing emphasis on resource efficiency, circular economy initiatives, and reduction in carbon emissions has accelerated the adoption of recycled copper across industries such as electrical equipment, construction, automotive, power infrastructure, and consumer electronics. Demand growth remained strongly linked to rapid expansion in renewable energy installations, electric vehicle manufacturing, transmission infrastructure upgrades, and urbanisation across developing economies.

Recycled copper continued to gain preference due to its ability to retain nearly all of its original properties while consuming substantially lower energy compared to primary copper production. Governments and environmental agencies across major economies also strengthened regulations promoting metal recycling and sustainable sourcing, further supporting investments in organised scrap collection, processing, and refining infrastructure.

OUTLOOK

The global recycled copper market is expected to maintain strong growth momentum in the coming years, supported by accelerating electrification trends and increasing investments in clean energy technologies. Expansion of electric mobility, smart grid infrastructure, renewable power generation, and energy- efficient infrastructure development is likely to continue to drive long-term demand for recycled copper.

At the same time, ongoing advancements in recycling technologies and increasing emphasis on sustainable supply chains and responsible resource utilisation are expected to further strengthen the outlook for the global copper recycling industry. Growing focus on reducing carbon emissions and improving material efficiency across industries is also likely to support wider adoption of recycled copper across key industrial applications.

INDIAN COPPER RECYCLING MARKET

The Indian copper recycling market continued to grow steadily during the year, supported by rising domestic demand for sustainable and cost-efficient copper products across the electrical, construction, automotive, and electronics sectors. Increasing urbanisation, infrastructure development, expansion in renewable energy projects, and growth in electric vehicle manufacturing significantly contributed to higher consumption of recycled copper in the country. Growing awareness around resource conservation and reduced carbon emissions also encouraged industries to adopt recycled copper as an alternative to primary metal production.

India continued to emerge as an important market for copper scrap processing and secondary copper production, supported by increasing scrap availability from end-of-life electrical equipment, industrial machinery, consumer appliances, and construction activities. Government initiatives promoting circular economy practices, waste management, and domestic manufacturing further supported investments in organised recycling infrastructure and refining capabilities.

At the same time, improvements in collection efficiency, segregation technologies, and processing methods enhanced the quality and wider utilisation of recycled copper across industrial applications.

OUTLOOK

The Indian copper recycling market is expected to maintain strong growth momentum, driven by continued investments in power transmission infrastructure, renewable energy installations, electric mobility, and smart city development projects. Increasing focus on sustainable manufacturing practices, along with growing dependence on secondary copper to bridge domestic supply gaps, is expected to create long-term growth opportunities in the industry.

PLASTICS MARKET

GLOBAL ENGINEERING PLASTICS MARKET¹³

The global engineering plastics market continued to witness steady growth, driven by increasing demand for lightweight, durable, and high-performance materials across automotive, electrical and electronics, industrial equipment, packaging and consumer goods sectors. Engineering plastics such as polycarbonate, Nylon, ABS, Polybutylene Terephthalate, and polyacetal continued to gain wider acceptance due to their superior mechanical strength, heat resistance, chemical stability, and design flexibility compared to conventional materials.

The automotive industry remained one of the key demand drivers, with manufacturers increasingly using engineering plastics to reduce vehicle weight, improve fuel efficiency, and support electric vehicle development. Growth in electrical and electronics manufacturing, rapid industrialisation, and rising investments in infrastructure and renewable energy applications also continued to support market expansion globally.

Asia-Pacific remained the largest market for engineering plastics, led by strong manufacturing activity in China, India, Japan, and Southeast Asia. Technological advancements in polymer formulations, increasing focus on sustainable and recyclable plastic materials, and growing adoption of engineering plastics in advanced industrial applications also contributed to long-term market development.

GLOBAL RECYCLED ENGINEERING PLASTIC MARKET¹⁴

As industries increasingly shift towards sustainable manufacturing and circular resource utilisation, the global recycled engineering plastics market continued to gain significant momentum across multiple end-use sectors. Rising preference for environmentally responsible materials, coupled with growing efforts to reduce

dependence on virgin polymers, supported increasing adoption of recycled engineering plastics across automotive, electrical and electronics, construction, packaging and consumer goods industries. The global recycled plastics market was valued at over US$ 50 billion in recent years and is projected to grow at a healthy CAGR over the coming decade, driven by stringent environmental regulations and growing adoption of recycled materials by manufacturers seeking to reduce carbon emissions and dependence on virgin polymers.

Recycled engineering plastics such as polycarbonate, Nylon, ABS, PET, and polypropylene gained wider acceptance due to improvements in recycling technologies, material quality, and processing efficiency. The automotive and electronics sectors remained major demand contributors, supported by increasing utilisation of lightweight and sustainable materials in electric vehicles, appliances, electronic components, and industrial applications. Asia-Pacific continued to dominate the market owing to strong manufacturing activity, increasing urbanisation, and rising investments in recycling infrastructure across China, India, Japan, and Southeast Asia.

OUTLOOK

The recycled engineering plastics market is expected to maintain positive long-term growth momentum, driven by tightening global sustainability regulations, increasing consumer awareness, and the expansion of green manufacturing initiatives across industries. Advancements in sorting, chemical recycling, and material recovery technologies are likely to improve product quality and broaden application areas, while rising investments in electric mobility, renewable energy, and sustainable packaging solutions are expected to further strengthen market demand over the medium to long term.

GROWTH DRIVERS

Growth Drivers	Description
Rising Demand for Sustainable Raw Materials	Industries across automotive, infrastructure, electronics, and manufacturing are increasingly adopting recycled metals to reduce carbon emissions and dependence on virgin mining. Sustainability commitments and ESG targets are accelerating recycled metal consumption globally.
Rapid Urbanisation and Industrialisation	Growing infrastructure development, industrial activity, and urban expansion are generating higher volumes of scrap metal and increasing demand for recycled materials. Emerging economies are becoming major contributors to the recycling industry growth.
Government Regulations and Circular Economy Policies	Governments worldwide are implementing stricter environmental regulations, Extended Producer Responsibility (EPR) norms, and waste management policies to encourage organised recycling. These initiatives are supporting long-term structural growth in the recycling sector.
Expansion of Electric Vehicles and Renewable Energy	Electric mobility, renewable energy systems, and power transmission infrastructure require large quantities of recycled copper, aluminium, and lead. This transition is significantly strengthening demand for recycled metals globally.
Energy Efficiency Benefits of Recycling	Recycling metals consumes substantially lower energy compared to primary metal extraction and refining. Lower energy consumption improves environmental sustainability and enhances economic viability for manufacturers.
Technological Advancements in Recycling	Automation, AI-enabled sorting systems, and advanced refining technologies are improving metal recovery rates, product quality, and operational efficiency. These advancements are expanding the commercial viability of recycling operations.

OPPORTUNITIES

Opportunities	Description
Lithium-Ion Battery and E-Waste Recycling	Rising consumption of electric vehicles and electronic devices is generating significant volumes of battery waste and electronic scrap. This creates large opportunities for specialised recycling and metal recovery operations.
Growth in Emerging Economies	Developing countries are witnessing rising industrial activity, infrastructure investments, and organised waste management initiatives. Expanding recycling infrastructure in these markets offers substantial growth potential.
Increasing Corporate ESG Commitments	Global manufacturers are increasingly integrating recycled materials into supply chains to achieve sustainability and carbon reduction targets. This is creating long-term demand visibility for recycling industries.
Renewable Energy Infrastructure Expansion	Growth in solar, wind, energy storage, and smart grid projects is increasing demand for recycled metals such as copper and aluminium. Recycling industries are expected to benefit from rising clean energy investments.
Advancements in Secondary Metal Processing	Improvements in refining technologies and recovery systems are enabling recyclers to produce higher-quality value-added products suitable for advanced industrial applications.
Organised Scrap Collection Ecosystem	Formalisation of scrap collection and segregation systems is improving raw material availability and operational efficiency for organised recyclers. Increasing digitisation and traceability are also supporting sector development.

CHALLENGES

Challenges	Description
Commodity Price Volatility	Fluctuations in global metal prices impact inventory valuation, procurement costs, and profitability across recycling operations. Commodity cycles remain a major operational risk for the industry.
Raw Material Availability Constraints	Inconsistent scrap collection systems and dependence on imported scrap in some regions may affect raw material supply stability. Supply shortages can disrupt recycling operations and impact margins.
Environmental Compliance Costs	Recycling facilities must comply with stringent regulations related to emissions, waste disposal, and worker safety. Compliance requires continuous investments in pollution control systems and sustainable technologies.
Competition from the Informal Sector	In many countries, unorganised recyclers operate with lower compliance costs, creating pricing pressure for organised players. Informal operations may also affect raw material sourcing and market discipline.
Supply Chain and Logistics Disruptions	Global trade disruptions, shipping delays, geopolitical tensions, and logistics bottlenecks can affect scrap procurement and product deliveries. Recycling industries remain sensitive to international supply chain volatility.

COMPANY OVERVIEW

Pondy Oxides and Chemicals Limited is one of Indias leading recycling companies engaged in manufacturing value-added products across lead, copper, aluminium and plastics through sustainable recycling operations. WitRs. 3 decades of industry experience, the Company has established a diversified recycling platform supported by technologically advanced manufacturing facilities strategically located in Tamil Nadu and Andhra Pradesh, with proximity to key ports. Its products cater to a wide range of domestic and international customers across automotive, battery, electrical, industrial and engineering sectors.

Over the years, the Company has developed a strong global procurement and customer network with a growing presence across international markets. Its diversified product portfolio includes pure lead, lead alloys, copper products, aluminium alloys and engineering plastic granules, with increasing focus on customised and value- added offerings. Backed by strong operational performance, capacity expansion initiatives, ESG-focused practices and its Target 2030 roadmap, the Company continues to strengthen its position in the recycling industry through technological upgradation, operational efficiency, forward integration and diversification into emerging recycling segments such as lithium-ion.

Lead

The Lead segment remains the core business vertical of the CompanyW focused on recycling lead scrap into pure lead, lead alloys and specialised value-added products catering primarily to battery OEMs and industrial applications. The Company has established strong manufacturing and sourcing capabilities

Copper

The Copper segment is engaged in recycling copper scrap into value-added copper products catering to wire manufacturing and other industrial applications. The segment is supported by efficient processing capabilities, strong import sourcing arrangements and growing customer demand across domestic and export markets

Plastics

The Plastics segment focuses on the recycling and manufacturing of industrial and engineering plastic granules used across automotive, electronics, appliances, furniture and battery industries. The Company offers a diversified portfolio of recycled plastic products with emphasis on quality, sustainability and customised solutions.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Performance Metrics	2025-26	2024-25	Change %
Revenue from Operations	2,938.7	2,028.27	44.88
Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA)	217.21	107.55	101.96
Depreciation and Amortisation Expense	20.94	11.18	87.30
Earnings Before Interest and Tax (EBIT)	196.27	96.37	103.66
Finance Costs (Interest)	9.86	11.64	-15.29
Earnings after Tax (EAT)	138.73	65.06	113.23
Shareholders fund	799.85	597.51	33.86
Earnings per Share (EPS)	46.27	23.63	95.81
Recommended Dividend	15.26	10.68	42.88
Property, Plant and Equipment	200.32	118.93	68.44
Capital Work in progress	2.57	74.66	-96.56

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATION INCLUDING:

Key Financial Ratios	2025-26	2024-25	Change %
Debtors turnover (in times)	15.08	17.79	-15.23
Inventory Turnover (in times)	11.44	11.21	2.05
Interest Coverage Ratio (in times)	22.03	9.24	139.39
Current Ratio (in times)	3.65	3.62	0.83
Debt Equity Ratio (in times)	0.00	0.01	100.00
Gross Profit Margin (%)	11.46	10.31	11.15
Net Profit Margin (%)	4.72	3.21	47.04
Return on Capital Employed (in times)	0.25	0.16	56.25

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NO. OF PEOPLE EMPLOYED:

The Company places strong emphasis on employee well-being, talent development and organisational growth. It remains focused on building a collaborative and performance-driven work culture supported by continuous learning, diversity and inclusion, and employee engagement initiatives. The Company also emphasises lean manpower management, continuous talent exploration, and strengthening functional capabilities across its operations.

Learning and leadership development remain key focus areas during the year, supported through training initiatives and structured workforce development programmes across various functions. The Company also continued to strengthen employee engagement through well-being programmes, cross-functional collaboration, and initiatives aimed at enhancing workplace efficiency and operational excellence. These efforts have helped build a motivated, skilled, and future-ready workforce aligned with the Companys long-term growth strategy and sustainability objectives.

As of March 31, 2026, POCL had 492 permanent employees on its payroll.

OPPORTUNITIES

Opportunities	Description
Rising Demand for Recycled Metals	Increasing focus on sustainability, circular economy practices, and environmental regulations is driving higher demand for recycled lead, copper, plastics, and other non-ferrous metals across domestic and international markets.
Capacity Expansion	The Companys ongoing expansion across lead and copper recycling capacities is expected to support higher production volumes, operational scale, and long-term revenue growth.
Supportive Regulatory Environment	Strengthening implementation of BWMR and EPR frameworks is improving organised scrap collection, increasing traceability, and enhancing domestic scrap availability for organised recyclers.
Growth in Value-Added Products	Increasing contribution from value-added and customised products provides opportunities for better margins, stronger customer relationships, and enhanced profitability.
Diversification into Emerging Segments	Expansion into lithium-ion battery recycling, forward integration initiatives provides long-term growth opportunities and business diversification.
Strong Export Potential	The Companys global procurement and export network, along with improving international demand and favourable trade opportunities, supports expansion across overseas markets.

CHALLENGES

Challenges	Description
Commodity Price Volatility	Fluctuations in lead, copper and other metal prices may impact procurement costs, inventory valuation and operating margins.
Global Economic Uncertainty	Slowdowns in global industrial activity, inflationary pressures, and geopolitical developments may impact demand and pricing across key end-user industries.
Raw Material Availability	Ensuring consistent availability and efficient sourcing of quality scrap materials remains critical for sustaining production growth and operational efficiency.
Regulatory and Compliance Requirements	Increasing environmental, safety, and compliance standards require continuous investments in technology, sustainability practices and operational upgrades.

RISKS AND CONCERNS

The Company operates in an industry exposed to volatility in metal prices, foreign exchange fluctuations, global economic conditions, changing demand patterns and supply chain disruptions. The Company also remains exposed to risks arising from fluctuations in commodity prices and currency movements, particularly relating to the US Dollar, which may impact raw material procurement costs and export realisations.

In addition, rapid changes in global metal markets and evolving regulatory requirements may affect operating margins and business performance. To mitigate these risks, the Company has implemented a comprehensive risk management framework focused on prudent sourcing strategies, operational efficiencies, liquidity management, hedging mechanisms including forward contracts and continuous monitoring of commodity and foreign exchange exposures.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

POCL has implemented comprehensive internal financial control systems, well-suited to the Companys size and operational scope. These systems are intended to foster confidence in key operational areas. They ensure accurate recording and reporting of financial and operational data, compliance with relevant accounting standards and regulations, and protection of assets from unauthorised use. They also support proper amortisation of transactions and strict adherence to corporate policies. Furthermore, POCL has set up a clear framework for delegating authority and establishing defined limits for capital and revenue expenditure approval.

The Audit Committee regularly engages with the Management team to evaluate the effectiveness of these internal financial control systems. The Committee also seeks insights from both internal and external auditors to assess the efficiency of these systems. The objective is to ensure the proper functioning of

these controls. The Audit Committee affirms that the internal financial control systems are both sufficient and effective. Additionally, the Company provides consistent updates to the Board of Directors about the progress and findings. However, POCL acknowledges the inherent limitations of any control framework and conducts periodic audits and reviews to ensure these systems are regularly strengthened to remain effective.

CAUTIONARY STATEMENT

Statements in this Annual Report describing our objective, projections, estimates and expectations may be "forwardlooking statements" within the meaning of applicable laws, Rules, Regulations, etc. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/ supply and price conditions in the domestic and overseas markets, in which we operate, in addition to changes in government regulations, tax laws and other statutes and incidental factors.