Resgen Ltd Management Discussions

For the Financial Year ended 31st March, 2026

1. Industry Structure, Developments and Outlook

The Indian waste-to-energy and recycling sector continues to evolve as one of the fastest-growing components of the broader sustainability economy. With over 3.5 million tonnes of plastic waste generated annually, of which a significant portion remains non-recyclable, the pressure on industry and policymakers to provide scalable solutions has intensified. The regulatory environment has been strengthened by amendments to the Plastic Waste Management Rules, including the enforcement of Extended Producer Responsibility (EPR), which has compelled producers and brand owners to take responsibility for the lifecycle of their products. Simultaneously, regulations surrounding end-of-life tyre management have created demand for organized, industrial-scale recycling facilities that can process and recover energy, carbon black, and other by-products from waste tyres.

Globally, the conversation on sustainability has shifted from mere compliance to proactive transformation. Multinational corporations and local enterprises alike are aligning with environmental, social, and governance (ESG) frameworks to maintain competitiveness, secure investments, and future-proof their operations. In India, the Swachh Bharat Mission, the National Bio-Energy Mission, and the countrys Net Zero 2070 commitment provide strong policy-level support for enterprises that integrate circular economy models into their businesses. These trends have positioned ResGen not only as a participant but as a leader in an industry that is increasingly central to Indias growth story.

2. Company Overview and Business Segment

ResGen Limited is a sustainability-driven enterprise that transforms non-recyclable plastic and end-of-life tyres into renewable fuels and high-value industrial substitutes. The Companys core philosophy is built around redefining waste, reimagining resources, and regenerating value. By converting waste into products such as PlasEco, pyrolysis oil, recovered carbon black, and recycled steel, Resgen provides industries with cost-effective, cleaner, and more sustainable alternatives to fossil fuel-based resources.

The business model integrates environmental stewardship with financial viability. Waste is procured from multiple sources, processed using advanced pyrolysis and recycling technologies, and converted into marketable green products. This creates a closed-loop system that benefits industry clients, supports national sustainability missions, and generates long-term financial returns. The Company also derives competitive advantage from its diversified revenue streams, which include the sale of fuels, recovered materials, and EPR compliance services, The governance framework of a listed entity further strengthens the Companys credibility and positions it well to attract institutional investors and long-term stakeholders.

3. Financial Performance

(Rs. in Lakhs)

*EBITDA = Profit Before Tax + Finance Cost + Depreciation & Amortisation.

Total Income grew by 11.6% year-on-year, aided by a sharp increase in Other Income and continued growth in Revenue from Operations. Profit After Tax grew by 10.0%, broadly in line with the growth in the top line, and the Net Profit Margin held steady at 12.34%.

4. Financial Position

(Amount in Lakhs)

The Companys balance sheet strengthened materially during the year. Long-term borrowings were fully repaid, reducing total borrowings from Rs.465.36/- lakhs to Rs. 143.80/- lakhs (interest-free loans from Directors), and Shareholders Funds grew by 15.2% to Rs.6,636.03/- lakhs, driven by internal accruals. The Company also made its first associate investment of Rs.374.94/- lakhs in Harekrishna Rubber Industries Private Limited during the year. Working capital remained healthy, with Trade Receivables growing broadly in line with revenue and Cash & Bank Balances improving to Rs.219.39/- lakhs.

5. Key Financial Ratios

Pursuant to Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations, 2015, an explanation is provided below for ratios that have changed by 25% or more over the previous financial year.

- Current Ratio improved by 55.7%, driven by an increase in current assets (higher inventory, trade receivables and cash) alongside a reduction in current liabilities (lower other current liabilities and borrowings).

- Debt-Equity Ratio declined by 52.0% following the full repayment of long-term borrowings during the year and a corresponding increase in Shareholders Funds.

- Trade Payables Turnover Ratio increased by 49.1% mainly on account of a reduction in outstanding trade payables at the year-end.

- Return on Investment (based on market value of the equity share) moved from +10.86% to -37.41%, reflecting the decline in the Companys traded share price during the year (from Rs. 80.00 to Rs. 50.07) rather than a change in the Companys underlying operating performance.

6. Opportunities and Threats

Opportunities

- Strong regulatory push in India and globally toward extended producer responsibility (EPR) and reduction of single-use plastic, driving demand for chemical recycling capacity.

- Government-approved diesel co-blending guidelines for pyrolysis oil, creating a structured, regulated demand channel.

- Newly scaled processed-scrap trading business, providing an additional, less capital-intensive revenue stream.

- A virtually debt-free balance sheet provides headroom to fund capacity expansion, product diversification or further associate/strategic investments.

- Ongoing R&D toward virgin polymer and petrochemical feedstock recovery from Pyrolysis Oil, which could open higher-value product lines over time.

Threats

- Volatility in crude-oil linked pricing, which directly affects realisations on Pyrolysis Oil.

- Increasing competition from new entrants in pyrolysis and chemical recycling, and from mechanical recycling alternatives.

- Regulatory or policy changes affecting waste-plastic sourcing, environmental compliance costs, or co-blending mandates.

7. Risks and Concerns

- Environmental Regulations: Stricter enforcement or changes in environmental law could increase compliance costs or require new capital investment.

- Permitting and Licensing: Delays in obtaining or renewing operating permits could disrupt operations or planned expansion.

- Product Price Volatility: Realisations on Pyrolysis Oil are linked to crude and fuel-oil price movements, which can compress margins, as witnessed during the current year.

- Revenue Mix Concentration: A growing share of revenue from lower-margin scrap trading could impact overall margins if not balanced with core manufacturing growth.

- Reliance on Patented Technology: The Companys competitive position depends significantly on its patented catalytic pyrolysis process.

- Associate Investment Risk: Returns from the Companys new investment in Harekrishna Rubber Industries Private Limited will depend on that entitys performance, over which the Company has limited control.

- Health, Safety and Environment: Handling of plastic waste and hydrocarbon products carries inherent risks of spillage, fire or accidents, which are managed through standard operating procedures and safety protocols.

8. Internal Control Systems and their Adequacy

The Company has an internal control system commensurate with its size and the nature of its business, covering financial reporting, procurement, inventory management and statutory compliance. These controls are supplemented by an independent Internal Auditor and reviewed periodically by the Audit Committee of the Board, and the Statutory Auditors have not reported any material weakness in internal financial controls for the year under review.

9. Human Resources

The Company continues to maintain cordial industrial relations. Employee Benefits Expense increased to Rs. 99.23 lakhs from Rs. 54.33 lakhs during the year, reflecting the Companys continued investment in its manufacturing and support teams as operations scaled up.

10. Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied, depending on economic conditions, government policies, raw material and product price movements, and other incidental factors. The Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.