Sadhana Nitro Chem Ltd Management Discussions

The Indian chemical industry continues to strengthen its position as an important global manufacturing and sourcing base, supported by supply-chain diversification, domestic manufacturing growth and established technical capabilities.

Sadhana Nitro Chem Limited ("SNCL" or "the Company") has over five decades of experience in manufacturing chemical intermediates, heavy organic chemicals and performance chemicals. Its products cater to diverse industries, including pharmaceuticals, agrochemicals, paper, thermal dyes, light stabilisers, aerospace, dyes and hair dyes.

The industry continues to face challenges from global economic uncertainty, geopolitical developments, volatile raw- material and energy costs, foreign exchange movements and aggressive overseas pricing.

Indias emergence as an alternative global sourcing destination and the increasing focus on domestic manufacturing and import substitution provide opportunities for established chemical manufacturers. The Companys manufacturing capabilities, product quality and customer relationships position it to participate in these opportunities.

At the same time, aggressive pricing and dumping by overseas manufacturers, particularly from China, continue to exert pressure on prices and margins. Global trade uncertainties, geopolitical tensions, exchange-rate volatility and higher input costs remain key industry challenges.

For the financial year ended March 31,2026, the Company recorded revenue from operations of Rs.4,886 lakh, compared with Rs. 13,599 lakh in the previous financial year.

Performance during the year was impacted by lower export offtake in key markets due to geopolitical developments, changing global trade conditions and tariffs imposed by the United States, which affected delivery schedules, margins and cash flows.

During the year, proceeds from the Rights Issue were utilised towards repayment of borrowings and supporting working capital and general corporate requirements, strengthening the Companys financial position. The Current Ratio improved from 1.41 to 1.82 and the Debt-Equity Ratio improved from 0.83 to 0.24.

The Company continues to focus on improving capacity utilisation, optimising its product mix, controlling costs and achieving greater efficiencies in energy and raw-material consumption.

The medium- to long-term outlook for the Indian chemical industry remains supported by domestic demand, import- substitution opportunities and diversification of global supply chains.

The Companys diversified product portfolio, manufacturing experience and established customer relationships provide a foundation for future growth. Management remains focused on improving utilisation, cost efficiency and customer engagement.

The near-term environment, however, remains affected by geopolitical uncertainty, changing trade conditions, aggressive overseas pricing and volatile input costs. Subject to improvement in market conditions, the Company expects its operational and cost-efficiency initiatives to support improved performance.

The Companys principal risks include geopolitical and war-related disruptions, volatility in raw-material and energy prices, availability of key inputs, foreign exchange movements and aggressive import pricing, particularly from China.

Aggressive import pricing, particularly from China, may continue to affect selling prices and margins. Other risks include changes in global trade policies, geopolitical developments, regulatory requirements and execution risks associated with operational initiatives.

The Company remains focused on process optimisation, cost management, regulatory compliance and continuous improvement in safety and environmental performance.

The prevailing geopolitical environment and ongoing armed conflicts across various regions pose risks to global trade, energy prices and supply chains. Any escalation may lead to disruption of shipping routes, higher freight and insurance costs, volatility in crude oil and energy prices, constraints on availability of raw materials and delays in exports and customer deliveries. Sanctions, trade restrictions and currency volatility may further impact international business and margins. The Company continues to monitor these developments and align its procurement, production and logistics planning to mitigate potential disruptions.

The Company continues to evaluate appropriate digitalisation, automation and process-improvement initiatives to enhance productivity, supply-chain visibility and operational efficiency.

Energy efficiency, optimisation of raw-material consumption and adoption of commercially viable sustainable practices remain important areas of focus.

The company has implemented a robust internal control system that is commensurate with the size and nature of its business. The design and documentation of the Policy on Internal Financial Control have been finalized and implemented, with periodic reviews and modifications to ensure continued effectiveness. The internal audit function is carried out by an independent firm of Chartered Accountants. Quarterly audit reports, including significant observations and corrective actions, are presented to the Chairman of the Audit Committee, ensuring strong governance and risk management practices.

The companys revenue from operations was Rs. 4886 Lakhs for the year ended March 31,2026, compared to Rs. 13599 Lakhs in the previous year. The net profit margin has been at 3.91% of turnover in the previous year and (215.44%) this year.

Human Resource programs and initiatives in SNCL are aligned to meet the business needs. Your company believes in investing in people to develop and expand their capability. The Company has been able to create a favorable work environment that motivates performance, customer focus and innovation. SNCLs strategies are based, inter alia, on processes of continuous learning and improvement.

Statements in this Management Discussion and Analysis relating to the Companys objectives, expectations or projections may constitute forward-looking statements. Actual results may differ materially due to changes in economic conditions, demand and supply, input prices, foreign exchange rates, regulations, trade conditions, competitive pressures, geopolitical developments and other factors beyond the Companys control.

For and On Behalf of the Board of Directors

Place: Mumbai

Date: 07^th August, 2026.