Rama Phosphates Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

The global economy in FY 2025-26 operated against a backdrop of persistent geopolitical tensions, supply chain realignments, and moderated yet positive economic growth. The International Monetary Fund (IMF) projected global GDP growth of approximately 3.1%-3.2% for FY 2026, reflecting resilience despite ongoing uncertainties.

However, this stability was significantly challenged by the escalation of conflict in the Middle East, creating a major shock to global markets. The Strait of Hormuz, a critical transit route for nearly one-fourth of the worlds crude oil supplies, as well as substantial volumes of LNG, fertilizers, and industrial raw materials, remains highly vulnerable to disruptions. Any impediments to trade through this strategic corridor have the potential to trigger significant volatility across energy markets and global supply chains.

The intensification of geopolitical tensions has heightened the risk of supply disruptions, leading to concerns over elevated commodity prices, persistent inflationary pressures, and tighter global financial conditions. These developments continue to pose challenges to businesses and economies worldwide, necessitating greater focus on supply chain resilience, cost management, and risk mitigation strategies.

INDIAN ECONOMIC OVERVIEW

India continued to be one of the fastest-growing major economies globally, with GDP growth estimated at approximately 6.4%-6.6% during FY 2025-26. Despite global economic uncertainties and regional geopolitical challenges, India demonstrated remarkable resilience, supported by strong domestic demand, robust infrastructure investments, and favorable demographic trends.

As of April 2026, the International Monetary Fund (IMF) reaffirmed Indias position as a leading global growth engine, projecting economic growth of around 6.5% for the comingyears. Growth forecasts for FY 2026 remain in the range of 6.4% to 7.4%, underscoring the countrys sustained economic momentum and resilience.

According to a report published by the Press Information Bureau (PIB), Indias GDP has reached approximately USD 4.18 trillion, surpassing Japan to become the worlds fourth-largest economy. Furthermore, Indias GDP is projected to expand to approximately USD 7.3 trillion by 2030, reflecting its growing economic strength and increasing significance in the global economic landscape.

India remained one of the fastest-growing major economies, with GDP growth estimated at approximately 6.4-6.6% for FY2025-26.

FERTILIZER INDUSTRY OVERVIEW

The Indian fertilizer industry continued to play a pivotal role in supporting agricultural productivity and ensuring food security during FY 2025-26. The sector operated in a challenging global environment characterized by elevated raw material prices, particularly for sulphuric acid, phosphoric acid, and rock phosphate. Supply disruptions arising from geopolitical tensions in the Middle East, including constraints affecting Israeli phosphate producers, coupled with continued export restrictions from China, further tightened global availability and exerted upward pressure on input costs.

Recognizing the strategic importance of agriculture and food security, the Government of India accorded significant priority to the sector in the Union Budget 2025-26 through enhanced allocations and continued policy support. Key initiatives included:

• Total fertilizer subsidy allocation of approximately Rs.1.86 lakh crore for FY 2025-26, significantly higher than the initial budget estimate of Rs.1.57 lakh crore.

• Nutrient-Based Subsidy (NBS) allocation of Rs.60,000 crore, representing a substantial increase overthe previous fiscal year.

• Continuation of the special additional support package for DAP at Rs. 3,500 per metric tonne for Kharif 2025 and Rabi 2025-26, ensuring the retail MRP of DAP remained affordable for farmers.

• Cabinet approval of Rs. 37,952 crore for Rabi 2025-26 phosphatic and potassic (P&K) fertilizer subsidies, reflecting the impact of elevated global phosphorus and sulphur prices

• Continued support under the PM-KISAN scheme, with cumulative disbursements exceedingRs.3.75 lakh crore and approximately 9 crore farmers benefiting under the latest installment.

The operating environment remained broadly favourable, supported by policy continuity, balanced nutrient management initiatives, direct benefit transfer mechanisms, and sustained emphasis on soil health improvement. These measures continued to promote fertilizer consumption and support demand for phosphatic fertilizers across key agricultural regions.

Looking ahead, the Indian fertilizer industry remains focused on achieving greater self-sufficiency by 2032 through capacity expansion, enhanced resource security, and increased adoption of innovative nutrient solutions. Industry growth is expected to be driven by rising agricultural productivity requirements, expansion of specialty fertilizers, balanced nutrient application practices, and growing adoption of micro-irrigation technologies.

The Indian fertilizer market, estimated at approximately USD 45.9 billion in 2025, is projected to reach nearly USD 62.8 billion by 2030, representing a compound annual growth rate (CAGR) of around 6.3%. While long-term fundamentals remain strong, the industry continues to face near-term challenges arising from raw material price volatility, supply chain disruptions, and subsidy disbursement timelines. Nevertheless, sustained government support, increasing agricultural modernization, and a growing focus on nutrient efficiency are expected to underpin the sectors long-term growth trajectory.

The Indian agriculture sector remained resilient during FY 2025-26, supported by favourable policy measures and relatively stable climatic conditions.

SINGLE SUPER PHOSPHATE (SSP) INDUSTRY OVERVIEW

The SSP market in India continues to demonstrate strong growth potential, supported by increasing awareness of balanced nutrient application, widespread sulphur deficiencies in agricultural soils, and sustained government policy support.

The India SSP market, valued at USD 635.4 million in 2024, is projected to grow at a CAGR of 6.0% from 2025 to 2035, reaching approximately USD 1,206 million by 2035 (Transparency Market Research). A separate estimate projects 6.70% CAGR from 2025-2034 (Expert Market Research).

Several structural factors continue to support the long-term growth prospects of the SSP industry:

• Continued government support under the Nutrient-Based Subsidy (NBS) regime, ensuring affordability for farmers. The introduction of freight subsidy support for SSP from Kharif 2022 has further enhanced its competitiveness in key agricultural markets.

• The continuation of the freight subsidy will serve as a key catalyst to incentivize SSP consumption. This policy support will directly drive higher production capacity utilization across our manufacturing facilities while accelerating our strategic footprint expansion into deep interior and Pan-India markets.

• Increasing prevalence of sulphur-deficient soils across major agricultural states such as Maharashtra, Madhya Pradesh, and Rajasthan, where SSPs dual-nutrient composition of phosphorus and sulphur offers significant agronomic benefits.

• Cost competitiveness compared with Di- Ammonium Phosphate (DAP), making SSP an economical nutrient source for farmers while also supporting domestic manufacturing through the utilization of rock phosphate and sulphuric acid.

• Rising cultivation of nutrient-responsive crops such as oilseeds, pulses, sugarcane, cotton, and soybean, which are key consumption segments for SSP and align well with the Companys core operatinggeographies.

• Environmental and agronomic advantages arising from SSPs gradual nutrient-release characteristics and sulphur content, which contribute to improved soil health and balanced nutrient management practices.

• Expansion in the number of NBS-covered fertilizer grades, including fortified and value- added SSP variants, providing opportunities for product innovation and specialty fertilizer manufacturers.

The growing emphasis on balanced fertilization, soil health improvement, and nutrient-use efficiency is expected to support sustained demand for SSP over the medium to long term. With increasing focus on agricultural productivity and crop quality enhancement, SSP remains well-positioned as a cost-effective and agronomically beneficial fertilizer

solution for Indian farmers.

AGRICULTURAL ENVIRONMENT

Indias agricultural sector delivered another strong performance during FY 2025-26, creating a favorable demand environment for fertilizers and allied agricultural inputs. Supported by normal to above-normal monsoon conditions, improved reservoir levels, and sustained government support, agricultural output remained near record highs across several major crops.

Key production highlights during the year included:

• Kharif foodgrain production estimated at 1,741.44 lakh metric tonnes (LMT), representing an increase of approximately 2.8% over the previous year.

• Rabi foodgrain production estimated at 1,745.13 LMT, reflecting year-on-year growth of around 3.2%.

• Wheat production projected at a record 1,202.10 LMT, surpassing the previous years production of 1,179.45 LMT.

• Soybean production estimated at 151.32 LMT, registering robust growth of 15.8% compared to 130.62 LMT in the preceding year, creatinga particularly favourable environment for the Companys soya-related business segment.

• Kharif groundnut production estimated at 104.26 LMT, significantly higher than the previous years output of86.60 LMT.

• Monsoon performance during FY 2025-26 remained normal to above normal across most agricultural regions, supporting timely sowing operations and improving water availability for subsequent crop cycles. Adequate rainfall distribution and healthy reservoir storage levels strengthened the overall agricultural ecosystem and continued to be important drivers of fertilizer consumption across major crop categories.

Agriculture Gross Value Added (GVA) growth for FY 2025-26 was estimated in the range of 3.5% to 4.0%, while total foodgrain production was estimated at approximately 330-335 million tonnes. Gross cropped area remained stable at around 200 million hectares, reflecting sustained cultivation intensity and resilience within the farming sector. These trends provided a supportive backdrop for nutrient application and fertilizer demand across both staple and cash crops.

The cropping pattern also remained favorable for phosphoric fertilizers. Increased acreage under pulses, maize, soybean, and groundnut is expected to support demand for phosphoric nutrients, particularly Single Super Phosphate (SSP), which plays a vital role in improving phosphorus and Sulphur availability, enhancing crop productivity, and improving crop quality. The continued emphasis on balanced nutrient application and soil health management is expected to further strengthen longterm demand prospects for phosphoric fertilizers.

Overall, robust agricultural production, favorable weather conditions, expanding cultivation of nutrient-responsive crops, and supportive government policies continued to provide a strong foundation for growth in the fertilizer sector during FY 2025-26.

FERTILIZER SECTOR DYNAMICS

The Indian fertilizer sector continued to witness structural realignment during FY 2025-26, driven by the dual priorities of self-reliance and balanced nutrient application. Total fertilizer consumption was estimated at approximately 64-67 million tonnes, with phosphatic fertilizer consumption estimated at 26-28 million tonnes of P205, underlining the continued importance of phosphate-based nutrient solutions within the agricultural economy.

Over the year, rock phosphate prices remained stable due to higher supply availability from various international sources, while domestic supply was also higher compared to the previous year. While During the year, sulphur prices witnessed a sharp increase from Rs. 26,645/MT in April 2025 to Rs. 53,687/MT in March 2026, further rising to Rs. 87,900/MT in May 2026, primarily due to war- related disruptions and ongoing geopolitical conflicts.

Global sulphur prices have officially surged to their highest levels since the 2008 commodity supercycle. Prices have surged to historic highs as supply disruptions across the Middle East continue to tighten global availability, while buyers increasingly struggle to absorb elevated costs.

Within this landscape, demand patterns increasingly favoured fertilizers that deliver multi-nutrient benefits and improve cost efficiency for farmers. The industry review indicates that SSP consumption was estimated at approximately 6.5-7.5 million tonnes during FY 2025-26, while DAP consumption stood at about 11-12 million tonnes, reflecting a gradual and notable shift toward SSP on account of its cost advantage and Sulphur content.

It is estimated that there are about 140 million farmers in the country whilst 30-40% of the gross cropped area is cultivated by farmers who do not hold the land. In order to boost farm output we need judicious mix of nutrients. The ideal nutrients combination is 4 :2 :1 (NPK)and in view of skew in prevailing subsidy pattern, the farm consumption ratio is 10.9 : 4.4 : 4 which is cause of concern for reduced farm output. The available nutrient contents of various fertilizers are as below:

Nutrients (Nitrogen, Phosphorus and Potash) availability in fertilizers

Why SSP is emerging stronger

• It is an indigenous product manufactured in India, fully aligned with the Governments "Make in India" initiative and vision

• Provides both Phosphorus and Sulphur, improving soil health and crop productivity.

• Suitable for a wide variety of crops and soil conditions.

• Cost-effective fertilizer solution compared to other phosphaticfertilizers.

• Granulated and fortified grades improve handling, application and realization.

• Favorable market dynamics due to volatility in imported fertilizer prices.

SWOT ANALYSIS

Priorities for FY 2027-28

1. In line with the theme "Plant Biosecurity for Food Security" as promoted by FAO, optimise fertilizer production at all units.

2. Secure raw materials and freight visibility early forKharifand Rabi.

3. Increase share of granulated and fortified SSP to improve mix and resilience.

4. Prioritize integration, inventory discipline and digital distribution readiness.

Medium Term: (2029-31):

5. Full-fledged operation of Dhule plant so as to increase product availability for interior penetration

6. Strategic Entry into Complex P&K, NPK and DAP Fertilizer Manufacturing

7. To achieve key Leadership status in SSP fertilizer on Pan-India level

8. Expand the Fertilizers Product Portfolio by including P&K Fertilizers Imports on large scale

9. Igrowth strategy byacquiringSSPUnit

Long Term: (2032-35):

10. Explore more industrial chemical products to De-risk from products dependency

11. To achieve Rs. 2000 crore plus turnover company