Shanti Inorganics Ltd Management Discussions

OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with our restated financial information for two months ended May 31, 2026, and for the financial years ended March 31, 2026, March 31, 2025, and March 31, 2024. Our Restated Financial Statements have been derived from our audited financial statements and restated in accordance with the SEBI ICDR Regulations and the ICAI Guidance Note. Our financial statements are prepared in accordance with Indian GAAP, including the schedules, annexures and notes thereto and the reports thereon, included in the section titled "Restated Financial Information" on page 232 of this Red Herring Prospectus. Unless otherwise stated, the financial information used in this section is derived from the restated financial statements of our Company.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in the sections titled "Risk Factors" and "Forward-Looking Statements" on pages 24 and 22 respectively, of this Red Herring Prospectus.

These financial statements have been prepared in accordance with Indian GAAP. Indian GAAP differs in certain significant respects from U.S. GAAP, IFRS and Ind AS. We have neither attempted to quantify the impact of IFRS or U.S. GAAP on the financial data included in this Red Herring Prospectus nor do we provide a reconciliation of our financial statements to those under U.S. GAAP or IFRS or Ind AS. Accordingly, the degree to which the Indian GAAP financial statements included in this Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with the Companies Act, Indian GAAP and the SEBI ICDR Regulations. Any reliance on the financial disclosure in this Red Herring Prospectus, by persons not familiar with Indian Accounting Practices, should accordingly be limited.

References to the "Company", "we", "us" and "our" in this chapter refer to Shanti Inorganics Limited (formerly known as Shanti Inorgo Chem (Guj) Private Limited and Shanti Inorgo Chem (Guj) Limited), as applicable in the relevant fiscal period, unless otherwise stated.

OVERVIEW OF OUR BUSINESS

We are engaged in the business of manufacturing and supply of sulphur based inorganic chemicals. We hold one of the largest domestic production capacities for bisulphites with capacity of 18,800 MTPA (Source: CareEdge Report). Our product portfolio consists of ammonium bisulphite solution, sodium bisulphite powder or solution, sodium meta bisulphite and sodium sulphite powder/anhydrous, which are primarily used as preservatives, reducing agents, oxygen scavengers and process intermediates across multiple industries such as food and beverages, chemicals, oil drilling, pharmaceuticals, ceramics, agrochemicals, water treatment, petrochemicals, cosmetics, paints, polymers, boilers and mining. In the inorganic chemical industry, products are categorized into multiple purity levels based on their applications, including, food grade and technical grade.

For further details, please see "Our Business" on page 173 of this Red Herring Prospectus.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section entitled "Risk Factors" on page 24 of this Red Herring Prospectus. The following are certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations:

Disruption in supply of raw materials and cost of raw materials

Increasing competition in the chemical industry.

Dependence on our end customers.

Ability to maintain cordial relationships with our customers and suppliers

Companys ability to successfully implement its growth expansion plan

Optimum capacity utilisation of the installed capacity

Changes in the Government regulations, tax regime, laws and the other regulations that apply to the industry.

Geopolitical and global trade conditions

Fluctuation in foreign currency rates

SIGNIFICANT ACCOUNTING POLICIES

The accounting policies have been applied consistently to the periods presented in the Restated Financial Statements. For details of our significant accounting policies, please refer section titled "Restated Financial Information" on page 232 of this Red Herring Prospectus.

RESULTS OF OUR OPERATIONS

The following discussion on results of operations should be read in conjunction with the Restated Financial Statements of Company for the two months ended May 31, 2026 and for financial years ended March 31, 2026, March 31, 2025, and March 31, 2024:

Particulars	Two months ended May 31, 2026		Financial Year 2026		Financial Year 2025		Financial Year 2024
	Amount	% of Total Income	Amount	% of Total Income	Amount	% of Total Income	Amount	% of Total Income
Revenue from Operations	1,598.27	99.28%	7,122.02	97.65%	5,710.57	97.68%	4,486.72	99.57%
Other income	11.52	0.72%	171.37	2.35%	135.41	2.32%	19.38	0.43%
Total income	1,609.79	100.00%	7,293.39	100.00%	5,845.98	100.00%	4,506.10	100.00%
Cost of materials consumed	940.54	58.43%	2,829.36	38.79%	2,382.90	40.76%	2,040.82	45.29%
Purchase of stock-in- trade	-	-	704.15	9.65%	-	-	34.70	0.77%
Changes in inventories of finished goods and work-in-progress	(158.27)	(9.83)%	(209.66)	(2.87)	(91.72)	(1.57)%	4.63	0.10%
Employee benefits expenses	69.41	4.31%	342.71	4.70%	248.40	4.25%	165.00	3.66%
Manufacturing expenses	135.78	8.43%	580.37	7.96%	469.16	8.03%	222.79	4.94%
Finance costs	28.80	1.79%	137.06	1.88%	184.49	3.16%	142.40	3.16%
Depreciation and amortization expenses	47.85	2.97%	191.21	2.62%	79.46	1.36%	63.47	1.41%
Administrative selling & other Expenses	208.64	12.96%	1,335.37	18.31%	1,495.98	25.59%	1,146.29	25.44%
Total Expenses	1,272.75	79.06%	5,910.57	81.04%	4,768.67	81.57%	3,820.10	84.78%
Profit /(Loss) before tax	337.04	20.94%	1,382.82	18.96%	1,077.31	18.43%	686.00	15.22%
Tax expense:
- Current Tax	79.25	4.92%	289.20	3.97%	237.31	4.06%	180.34	4.00%
- Deferred Tax	7.83	0.49%	71.62	0.98%	40.64	0.70%	(5.88)	(0.13)%
- Tax Adjustment of previous year	-	-	-	-	-	-	-	-
Net Tax expenses	87.08	5.41%	360.82	4.95%	277.95	4.75%	174.46	3.87%
Profit/(Loss) after tax	249.96	15.53%	1,022.00	14.01%	799.36	13.67%	511.54	11.35%

PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS ACCOUNT

Total Income

Our total income for the two months period ended May 31,2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024, amounted to 1,609.79 lakhs, 7,293.39 lakhs, 5,845.98 lakhs and 4,506.10 lakhs respectively. Our revenue comprises of:

Revenue from operations

Our revenue from operations comprises of revenue from sale of products such as ammonium bisulphite, sodium bisulphite, sodium metabisulphite, sodium sulphite and other operating income. Our revenue from operations amounted to 1,598.27 lakhs, 7,122.02 lakhs, 5,710.57 lakhs and 4,486.72 lakhs accounted for 99.28%, 97.65%, 97.68% and 99.57% of our total income for the two months period ended May 31,2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024, respectively.

Other income

Other income primarily comprises of income from foreign exchange gain, profit on sale of investments, profit on sale of property, plant & equipment (PPE), commission received, interest on fixed deposits and other interest income. Other income amounted to 11.52 lakhs, 171.37 lakhs, 135.41 lakhs and 19.38 lakhs accounted for 0.72%, 2.35%, 2.32 % and 0.43% of our total income for the two months period ended May 31, 2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024 respectively.

Expenses

Our total expenses for the two months period ended May 31, 2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024, amounted to 1,272.75 lakhs, 5,910.57 lakhs, 4,768.67 lakhs and 3,820.10 lakhs respectively. Our expenses primarily consist of the following:

Cost of materials consumed

Cost of materials consumed amounted to 940.54 lakhs, 2,829.36 lakhs 2,382.90 lakhs and 2,040.82 lakhs for the two months period ended May 31, 2026, and for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024 accounted for 58.43%, 38.79%,40.76% and 45.29% of the total income, respectively.

Purchase of stock-in-trade

Purchase of stock-in-trade amounted to Nil, 704.15 lakhs, NIL and 34.70 lakhs for the two months period ended May 31, 2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31,2024 accounted for Nil, 9.65%, NIL and 0.77% of the total income, respectively.

Changes in inventories of finished goods and work-in-process

Change in inventories of finished goods and work-in-process amounted to (158.27) lakhs, (209.66) lakhs, (91.72) lakhs and 4.63 lakhs for the two months period ended May 31, 2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31, 2024 accounted for (9.83)%, (2.87) %, (1.57) % and 0.10%, of the total income, respectively.

Employee benefits expense

Employee benefits expenses primarily comprise of salaries, wages & labour charges, employer contribution to provident fund & ESIC, ex-gratia bonus, gratuity expense, staff welfare and security expenses. Employee benefits expenses for amounted to 69.41 lakhs, 342.71 lakhs, 248.40 lakhs and 165.00 lakhs for the two months period ended May 31, 2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31,2024 accounted for 4.31%,4.70%, 4.25% and 3.66% of our total income, respectively.

Manufacturing expenses

Manufacturing expenses consists of stores and spares consumption, power, fuel & gas expense, repair maintenance and freight inward, custom duty expenses and other manufacturing expenses. Manufacturing expenses amounted to 135.78 lakhs, 580.37 lakhs, 469.16 lakhs and 222.79 lakhs for the two months period ended May 31, 2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31,2024 respectively accounted for 8.43%,7.96%,8.03% and 4.94% of our total income, respectively.

Financial costs

Finance costs consist of interest on working capital, term loan, bank processing charges, interest on TDS, interest on income tax and interest on GST. Finance cost amounted to 28.80 lakhs, 137.06 lakhs, 184.49 lakhs and 142.40 lakhs for the two months period ended May 31, 2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31,2024, respectively accounted for 1.79%,1.88%, 3.16% and 3.16% of our total income, respectively.

Depreciation and amortization expenses

Depreciation and amortization expense amounted to 47.85 lakhs, 191.21 lakhs, 79.46 lakhs and 63.47 lakhs for the two months period ended May 31, 2026 and for the financial years ended March 31, 2026, March 31, 2025, and March 31,2024, respectively accounted for 2.97%, 2.62%,1.36% and 1.41% of our total income, respectively.

Administrative, selling & other expenses

Administrative, selling & other expenses primarily consists of packing material consumed & packing expense, export freight, clearing forwarding & other expense, sales commission, advertisement & sales promotion, travelling, office & admin expenses, rent, rates & taxes, legal & professional expense, stationary & printing expense, postage & telephone, insurance expense, CSR expenditure and sitting fees of independent directors.

Administrative, selling & other expenses amounted to 208.64 lakhs, 1,335.37 lakhs, 1,495.98 lakhs and 1,146.29 lakhs for the two months period ended May 31, 2026 and for the financial years ended March 31, 2026, March 31, 2025 and March 31,2024, respectively accounted for 12.96%,18.31%, 25.59% and 25.44% of our total income, respectively.

Financial Year 2026 compared to Financial Year 2025

Total Income

Our total income increased by 24.76% from 5,845.98 lakhs in financial year ended March 31, 2025, to 7,293.39 lakhs in financial year ended March 31, 2026, primarily due to reasons discussed below:

Revenue from operations

Our revenue from operations increased by 24.72% from 5,710.57 lakhs in financial year ended March 31, 2025, to 7,122.02 lakhs in financial year ended March 31, 2026, primarily due to increase in sales quantity of products to ~23,135.77 Metric ton per annum (MTPA) from ~18,815.00 MTPA in Fiscal 2025. Sales quantity increased by 35.83% led to higher revenue from operations during the financial year ended March 31, 2026, as compared to the financial year ended March 31, 2025. Freight recovered on sales increased to 24.03 lakhs in the financial year ended March 31, 2026 from 16.20 lakhs the financial year ended March 31, 2025.

Other Income

Other income increased by 26.56% from 135.41 lakhs in financial year ended March 31, 2025, to 171.37 lakhs in financial year ended March 31,2026 primarily due to following reasons:

a) Foreign exchange gain:

The increase in foreign exchange gain from 46.48 lakhs to 98.50 lakhs in financial year ended March 31, 2026, as compared to financial year ended March 31, 2025.

b) Sales commission:

The increase in sales commission from 55.98 lakhs to 67.12 lakhs in financial year ended March 31, 2026, as compared to financial year ended March 31, 2025.

c) Profit on sale of PPE:

The increase in profit on sale of PPE from Nil to 3.49 lakhs in financial year ended March 31, 2026 as compared to financial year ended March 31, 2025.

Expenses

Total expenses increased by 23.95% from 4,768.67 lakhs in financial year ended March 31, 2025, to 5,910.57 lakhs in financial year ended March 31,2026 primarily due to reasons as discussed below:

Cost of materials consumed

Cost of materials consumed increased by 18.74% from 2,382.90 lakhs in financial year ended March 31, 2025, to 2,829.36 lakhs in financial year ended March 31, 2026, primarily due to an increase in raw material consumption of caustic lye, in line with increase in sales of products as well as an increase in average price per kg of sulphur dioxide-(SO2), caustic soda flakes, anhydrous ammonia and caustic lye. The following table represents changes in quantity, average price per kg and total cost of our primary raw materials:

Raw Material	Fiscal 2025 Purchase			Fiscal 2026 Purchase			y-o-y change in Qty. % [(D/A- 1*100)]	y-o-y change in total cost % [(E/B- 1*100)]	y-o-y change in avg. price per kg % [(F/C- 1*100)]
	Qty. (Kg) (A)	Amount ( In lakh) (B)	Avg. price/ Kg (C)	Qty. (Kg) (D)	Amount ( In lakh) (E)	Avg. price/ Kg (F)
Anhydrous ammonia	11,27,451	597.21	52.97	10,07,632	545.42	54.13	(10.63)%	(8.67)%	2.19%
Caustic lye	5,40,913	209.05	38.65	9,58,831	376.76	39.29	77.26%	80.22%	1.66%
Caustic soda flakes	6,09,750	242.73	39.81	1,20,000	53.85	44.88	(80.32)%	(77.81)%	12.72%
Soda ash	18,42,260	531.41	28.85	17,49,850	444.16	25.38	(5.02)%	(16.42)%	(12.02)%
Sulphur dioxide- SO2	73,40,400	789.25	10.75	57,55,500	1,322.27	22.97	(21.59)%	67.53%	113.71%

Purchase of stock-in-trade

Purchase of stock-in-trade increase by 100% from NIL in financial year ended March 31, 2025 to 704.15 lakhs in financial year ended March 31, 2026.

Changes in inventories of finished goods and work-in-progress

Changes in inventories of finished goods and work-in-progress decreased by 117.94 lakhs from (91.72) lakhs in financial year ended March 31, 2025, to (209.66) lakhs in financial year ended March 31, 2026, primarily due to increase in closing inventories of finished goods.

Employee benefits expenses

Employee benefits expenses increased by 37.97% from 248.40 lakhs in financial year ended March 31, 2025, to 342.71 lakhs in financial year ended March 31, 2026, primarily due to an increase in operations at phase I plant of our Bavla Unit during financial year ended March 31, 2026 which led to increased employee benefit expenses proportionately.

Manufacturing expenses

Manufacturing expenses increased by 23.70% from 469.16 lakhs in financial year ended March 31, 2025, to 580.37 lakhs in financial year ended March 31, 2026, primarily due to an increase in power & fuel expense from 130.15 lakhs to 201.13 lakhs and an increase in other manufacturing expenses increased to 130.66 lakhs in financial year ended March 31, 2026 from 70.04 lakhs in financial year ended March 31, 2025, primarily due to an increase in production at phase I of Bavla Unit. Further, repair & maintenance of plant & machineries and stores & spares consumed increased from 11.99 lakhs to 15.50 lakhs and from 19.10 lakhs to 19.43 lakhs, respectively.

Financial Costs

Finance costs decreased by 25.71% from 184.49 lakhs in the financial year ended March 31, 2025, to 137.06 lakhs in the financial year ended March 31,2026, primarily due to decrease in utilisation of working capital and repayment of unsecured business loans from banks and NBFCs during the financial year ended March 31, 2026.

Interest on working capital and term loans decreased to 97.04 lakhs in financial year ended March 31, 2026, from 113.20 lakhs in financial year ended March 31, 2025. Further, interest on business loans decreased to 19.15 lakhs in financial year ended March 31, 2026 from 34.05 lakhs in financial year ended March 31, 2025.

Depreciation and amortization expenses

Depreciation and amortization expenses increased by 140.64% from 79.46 lakhs in financial year ended March 31, 2025, to 191.21 lakhs in financial year ended March 31, 2026, primarily due to addition in plant & machinery, factory building, electrification, furniture & fixtures, other assets of 471.88 lakhs in financial year ended March 31,2026, which led to increase in depreciation during financial year ended March 31,2026 as compared to financial year ended March 31,2025.

Administrative, selling & other expenses

Administrative, selling & other expenses decreased by (10.74) % from 1,495.98 lakhs in financial year ended March 31, 2025, to 1,335.37 lakhs in financial year ended March 31, 2026, primarily due to decrease in export freight, clearing forwarding & other expense from 996.21 lakhs to 779.89 lakhs, rent, rates and taxes from 23.24 lakhs to 18.84 lakhs during the financial year ended March 31,2026 as compared to the financial year March 31,2025.

Profit after tax

The profit after tax increased from 799.36 lakhs in financial year ended March 31, 2025, to 1,022.00 lakhs for financial year ended March 31, 2026, primarily on account of an increase in, revenue from operations to 7,122.02 lakhs from 5,710.57 lakhs, other income to 171.37 lakhs from 135.41 lakhs during the financial year ended March 31, 2026 as compared to the financial year March 31, 2025. Further, administrative, selling & expenses decreased from 1,495.98 lakhs in the financial year ended March 31, 2025 to 1,335.37 lakhs in financial year ended March 31, 2026 and finance cost decreased from 184.49 lakhs in the financial year ended March 31,2025 to 137.06 lakhs in financial year ended March 31, 2026. This led to increase in profitability in financial year ended March 31, 2026 compared to financial year 31, 2025, supported by phase I of Bavla Unit being operational for 12 months during the year.

Key drivers for increase in PAT and PAT margins in FY2025 and FY2026:

The PAT margin of the Company increased from 13.67% of total income in FY25 to 14.01% of total income in FY26, primarily due to the following reasons:

1. Reduction in cost of materials consumed as a percentage of total income and improvement in average selling price:

The cost of materials consumed as a percentage of total income decreased from 40.76% in FY2025 to 38.79% in FY2026. Further, the average selling price of finished products increased by 0.53 per kg, i.e. 1.77%, from 29.96 per kg in FY2025 to 30.49 per kg in FY2026. The improvement in average selling price along with the lower material cost as a percentage of total income led to improvement in profitability during FY2025-26.

2. Increase in revenue from operations, other income and decrease in administrative, selling & expenses and finance cost

Profit after tax increased from 799.36 lakhs in FY2025 to 1,022.00 lakhs in FY2026, representing an increase of 27.85%. The increase in PAT was primarily attributable to the increase in revenue from operations from 5,710.57 lakhs in FY2025 to 7,122.02 lakhs in FY2026, representing an increase of 24.72%, increase in other income from 135.41 lakhs to 171.37 lakhs, representing an increase of 26.56%. Further, administrative, selling & expenses decreased from 1,495.98 lakhs in FY2025 to 1,335.37 lakhs in FY2026, representing decrease of 10.74% and finance costs decreased from 184.49 lakhs in FY2025 to 137.06 lakhs in FY2026, representing decrease of 25.71% primarily due to decrease in utilisation of working capital and repayment of unsecured business loans from banks and NBFCs during the FY 2026.

Accordingly, PAT margin of the Company improved from 13.67% in FY2025 to 14.01% in FY2026.

Financial Year 2025 compared to Financial Year 2024

Total Income

Our total income increased by 29.73% from 4,506.10 lakhs in financial year ended March 31, 2024, to 5,845.98 lakhs in financial year ended March 31, 2025, primarily due to reasons discussed below:

Revenue from operations

Our revenue from operations increased by 27.28% from 4,486.72 lakhs in financial year ended March 31, 2024, to 5,710.57 lakhs in financial year ended March 31, 2025, primarily due to increase in sales quantity of products to ~18,815.00 MTPA from ~15,916.80 MT in FY 2023-24. Average selling price for the same increased from 27.98 per kg in FY 2023-24 to 29.96 per kg which led to increase in overall revenue from operations. Sales quantity increased by 18.21% and average sales price per kg increased by 7.06% led to higher revenue from operations during the financial year ended March 31, 2025 as compared to the financial year ended March 31, 2024. Export benefits increased to 57.53 lakhs in the financial year ended March 31, 2025 from 30.63 lakhs the financial year ended March 31, 2024.

Other Income

Other Income increased by 116.03 lakhs from 19.38 lakhs in financial year ended March 31, 2024, to 135.41 lakhs in financial year ended March 31,2025 primarily due to following reasons:

d) Foreign exchange gain:

The increase in foreign exchange gain from 14.68 lakhs to 46.48 lakhs in financial year ended March 31, 2025 as compared to financial year ended March 31, 2024.

e) Sales commission:

The increase in sales commission from Nil to 55.98 lakhs in financial year ended March 31, 2025 as compared to financial year ended March 31, 2024.

f) Profit on sale of investments:

The increase in profit on sale of investments from Nil to 31.68 lakhs in financial year ended March 31, 2025 as compared to financial year ended March 31, 2024.

Expenses

Total expenses increased by 24.83% from 3,820.10 lakhs in financial year ended March 31, 2024, to 4,768.67 lakhs in financial year ended March 31,2025 primarily due to reasons as discussed below:

Cost of materials consumed

Cost of materials consumed increased by 16.76% from 2,040.82 lakhs in financial year ended March 31, 2024, to 2,382.90 lakhs in financial year ended March 31, 2025, primarily due to increase in raw material consumption in line with increase in sales of products and an increase in average price per kg of caustic lye, caustic soda flakes and sulphur dioxide-(SO2). The following table represents changes in quantity, average price per kg and total cost of our primary raw materials:

Raw Material	Fiscal 2024 Purchase			Fiscal 2025 Purchase			y-o-y change in Qty. % [(D/A- 1*100)]	y-o-y change in total cost % [(E/B- 1*100)]	y-o-y change in avg. price per kg % [(F/C- 1*100)]
	Qty. (Kg) (A)	Amount ( In lakh) (B)	Avg. price/ Kg (C)	Qty. (Kg) (D)	Amount ( In lakh) (E)	Avg. price/ Kg (F)
Anhydrous Ammonia	7,91,440	427.26	53.98	11,27,451	597.21	52.97	42.46%	39.78%	(1.87) %
Caustic Lye	1,18,715	39.07	32.91	5,40,913	209.05	38.65	355.64%	435.07%	17.44%
Caustic Soda Flakes	20,01,300	784.03	39.18	6,09,750	242.73	39.81	(69.53) %	(69.04) %	1.61%
Soda ash	3,77,800	130.53	34.55	18,42,260	531.41	28.85	387.63%	307.12%	(16.50)%
Sulphur Dioxide- So2	59,23,450	570.58	9.63	73,40,400	789.25	10.75	23.92%	38.32%	11.63%

Purchase of stock-in-trade

Purchase of stock-in-trade decrease by 100% from 34.70 lakhs in financial year ended March 31, 2024 to Nil in financial year ended March 31, 2025.

Changes in inventories of finished goods and work-in-progress

Changes in inventories of finished goods and work-in-progress decreased by 96.35 lakhs from 4.63 lakhs in financial year ended March 31, 2024, to (91.72) lakhs in financial year ended March 31, 2025, primarily due to increase in closing inventories of finished goods.

Employee benefits expenses

Employee benefits expenses increased by 50.55% from 165.00 lakhs in financial year ended March 31, 2024, to 248.40 lakhs in financial Year ended March 31, 2025, primarily due to commencement of new plant of phase one at Bavla Unit in financial year ended March 31, 2025, which led to increased employee benefit expenses proportionately.

Manufacturing expenses

Manufacturing expenses increased by 110.58% from 222.79 lakhs in financial year ended March 31, 2024, to 469.16 lakhs in financial year ended March 31, 2025, primarily due to increase in power & fuel expense from 59.99 lakhs to 130.15 lakhs and stores & spares consumed from 14.88 lakhs to 19.10 lakhs during financial year ended March 31, 2025 as compared to financial year ended March 31, 2024 due to increase in production. Further, freight inward, custom duty and other manufacturing expenses increased to 297.50 lakhs in during financial year ended March 31, 2025 from 130.82 lakhs in financial year ended March 31, 2024, primarily due to commencement of production at phase one of Bavla Unit.

Financial Costs

Finance costs increased by 29.56% from 142.40 lakhs in the financial year ended March 31, 2024, to 184.49 lakhs in the financial year ended March 31,2025, primarily due to increase in working capital and long-term borrowings during the financial year ended March 31, 2025. Interest on working capital and term loan increased to 113.20 lakhs in financial year ended March 31, 2025 from 66.82 lakhs in financial year ended March 31, 2024. Further, interest on business loans increased to 34.05 lakhs in financial year ended March 31, 2025 from 4.34 lakhs in the financial year ended March 31, 2024.

Depreciation and amortization expenses

Depreciation and amortization expenses increased by 25.19 % from 63.47 lakhs in financial year ended March 31, 2024, to 79.46 lakhs in financial year ended March 31, 2025, primarily due to addition in plant & machinery, factory building, electrification, furniture & fixtures, other assets of 2,985.05 lakhs and addition in intangible assets of 20.25 lakhs in financial year ended March 31,2025, which led to increase in depreciation during financial year ended March 31,2025 as compared to financial year ended March 31,2024.

Administrative, selling & other expenses

Administrative, selling & other expenses increased by 30.51% from 1,146.29 lakhs in financial year ended March 31, 2024, to 1,495.98 lakhs in financial year ended March 31, 2025, primarily due to increase in, packing material consumed & packing expense from 311.99 lakhs to 399.03 lakhs, export freight, clearing forwarding & other expense from 681.64 lakhs to 996.21 lakhs, office & admin expense from 7.12 lakhs to 12.87 lakhs, postage & telephone from 1.25 lakhs to 1.47 lakhs, auditors remuneration from 1.05 lakhs to 1.75 lakhs and insurance expense from 3.20 lakhs to 3.82 lakhs during the financial year ended March 31,2025 as compared to the financial year March 31,2024.

Profit after tax

The profit after tax increased from 511.54 lakhs in financial year ended March 31, 2024, to 799.36 lakhs for financial year ended March 31,2025, primarily on account of increase in, revenue from operations to 5,710.57 lakhs from 4,486.72 lakhs, other income to 135.41 lakhs from 19.38 lakhs during the financial year ended March 31,2025 as compared to financial year March 31,2024. Further, with higher production and a reduction in cost of goods sold as a percentage of sales, the Company benefited from economies of scale. This led to improved profitability in financial year ended March 31, 2025 compared to financial year 31, 2024, supported by the commencement of phase one operations at the Bavla Unit and increased output from the existing facility.

Key drivers for increase in PAT and PAT margins in FY2024 and FY2025:

The PAT margin of the Company increased from 11.35% of total income in FY24 to 13.67% of total income in FY25, primarily due to the following reasons:

1. Reduction in cost of materials consumed and improvement in average sales price:

The cost of materials consumed as a percentage of total income decreased from 45.29% in FY2024 to 40.76%. Further, average selling price of products increased by 1.98 per kg i.e. 7.06% from 27.98 per kg in FY2024 to 29.96 per kg in FY2025. However, average purchase price of raw materials decreased by 0.31 per kg i.e., 2.40% from 12.82 per kg in FY2024 to 12.51 per kg in FY2025.

2. Increase in utilisation of installed capacity:

The Company utilised 98.03% of its installed capacity in FY2025 as compared to 96.38% in FY2024. Due to increase in utilization of installed capacity, the Company derived economies of scale which led to increase in profitability.

3. Increase in sales of higher-margin products:

The sales of ammonium bisulphite increased from 1,956.99 lakhs in FY24 to 3,134.42 lakhs in FY25. Its average selling price increased by 2.73 per kg i.e., 8.37% from 32.57 per kg in FY2024 to 35.30 per kg in FY2025, while the average purchase price of raw material for ammonium bisulphite i.e., anhydrous ammonia decreased by 1.88% from 53.98 per kg in FY2024 to 52.97 per kg in FY25.

Profit after tax increased from 511.54 lakhs in FY24 to 799.36 lakhs in FY25, was primarily on account of increase in revenue from operations from 4,486.72 lakhs to 5,710.57 lakhs, increase in other income from 19.38 lakhs to 135.41 lakhs and benefits from economies of scale.

SELECTED RESTATED STATEMENT OF ASSETS AND LIABILITIES

The table below sets forth the principal components of our total assets, equity and liabilities as at the periods indicated in the table below:

Particulars	As at May 31,2026	At at March 31,2026	As at March 31,2025	As at March 31,2024
Total Shareholders funds	5,073.86	4,823.90	2,559.72	1,760.36
Total Non-Current Liabilities	2,202.18	2,299.92	1,280.94	1,377.65
Total Current Liabilities	3,796.87	2,579.76	2,763.32	2,130.65
Total Equity and Liabilities	11,072.91	9,703.58	6,603.98	5,268.66
Total Non-current Assets	7,681.16	6,502.56	4,476.27	2,915.80
Total Current Assets	3,391.74	3,201.02	2,127.71	2,352.86
Total Assets	11,072.91	9,703.58	6,603.98	5,268.66

Our shareholders fund increased from 1,760.36 lakhs as at March 31, 2024, to 2,559.72 lakhs as at March 31, 2025, to 4,823.90 lakhs as at March 31, 2026 and further increased to 5,073.86 lakhs as at May 31, 2026. Increase in Fiscal 2025 was primarily on account of profit after tax of 799.36 lakhs for the financial year ended March 31, 2025. Increase in Fiscal 2026 was primarily on account of proceeds from private placement of 1,104.16 lakhs and profit after tax of 1,022.00 lakhs for the financial year ended March 31, 2026 which is offset by bonus shares issued of 954.00 lakhs. Increase as on May 31, 2026 was primarily on account of profit after tax of 249.96 lakhs for the two months period ended May 31, 2026.

Our total non-current liabilities decreased to 1,280.94 lakhs as at March 31, 2025 from 1,377.65 lakhs as at March 31, 2024, which was primarily on account of decrease in long term borrowings from 1,299.24 lakhs to 1,150.78 lakhs. However, the deferred tax liabilities increased from 31.01 lakhs to 71.65 lakhs, long term provisions increased from 14.62 to 25.73 lakhs and other long-term liabilities remained unchanged at 32.78 lakhs. Our total non-current liabilities increased to 2,299.92 lakhs as at March 31, 2026, primarily on account of increase in long term borrowings from 1,150.78 to 2,093.09 lakhs, increase in deferred tax liabilities from 71.65 lakhs to 143.27 lakhs, long term provisions increased from 25.73 lakhs to 30.78 lakhs and other long-term liabilities remained unchanged at 32.78 lakhs. Our total non-current liabilities decreased to 2,202.18 lakhs as at May 31, 2026, primarily on account of decrease in long term borrowings from 2,093.09 lakhs to 1,987.48 lakhs.

Our total current liabilities increased from 2,130.65 lakhs as at March 31, 2024, to 2,763.32 lakhs as on March 31, 2025. The short term borrowings increased from 1,134.80 lakhs as at March 31, 2024 to 1,387.25 lakhs as on March 31, 2025, trade payables increased from 707.43 lakhs as on March 31, 2024 to 1,046.51 lakhs as on March 31, 2025, other current liabilities decreased from 89.59 lakhs as on March 31, 2024 to 62.76 lakhs as on March 31, 2025, and short term provisions increased from 198.83 lakhs as on March 31, 2024 to 266.80 lakhs as on March 31, 2025. Our total current liabilities decreased to 2,579.76 lakhs as at March 31,2026. The short term borrowings decreased from 1,387.25 lakhs as at March 31, 2025 to 974.31 lakhs as on March 31, 2026, trade payables increased from 1,046.51 lakhs as on March 31, 2025 to 1,233.53 lakhs as on March 31, 2026, other current liabilities increased from 62.76 lakhs as on March 31, 2025 to 64.25 lakhs as on March 31, 2026 and short term provisions increased from 266.80 lakhs as on March 31, 2025 to 307.67 lakhs as on March 31, 2026. Our total current liabilities increased to 3,796.87 lakhs as at May 31, 2026. The short term borrowings increased from 974.31 lakhs as at March 31, 2026 to 1,497.42 lakhs as on May 31, 2026, trade payables decreased from 1,233.53 lakhs as on March 31, 2026 to 1,205.15 lakhs as on May 31, 2026, other current liabilities increased from 64.25 lakhs as on March 31, 2026 to 713.16 lakhs as on May 31, 2026 and short term provisions increased from 307.67 lakhs as on March 31, 2026 to 381.14 lakhs as on May 31, 2026.

Our total non-current assets increased from 2,915.80 lakhs as at March 31, 2024 to 4,476.27 lakhs as at March 31, 2025, further increased to 6,502.56 lakhs as at March 31, 2026 and to 7,681.16 as at May 31 ,2026. Increase in non-current assets was primarily on account of increase in property, plant & equipment from 706.26 lakhs as at March 31, 2024 to 3,712.33 lakhs as at March 31, 2025 which further increased to 3,996.53 lakhs as at March 31, 2026 and decreased to 3,967.26 lakhs as at May 31,2026, non-current investments decreased from 63.96 lakhs as at March 31, 2024 to 61.17 lakhs as at March 31, 2025 and remained constant up to May 31,2026, long term loans and advances decreased from 274.37 lakhs as at March 31, 2024 to 136.18 lakhs as at March 31, 2025, which increased to 1,252.72 lakhs as at March 31, 2026 and further to 1,313.12 lakhs as at May 31,2026, other non-current assets decreased from 25.67 lakhs as at March 31, 2024 to 22.45 lakhs as at March 31, 2025 increased to 25.45 lakhs as at March 31, 2026 and then remained constant as at May 31, 2026.

Our total current assets decreased from 2,352.86 lakhs as at March 31, 2024 to 2,127.71 lakhs as at March 31, 2025, primarily on account of decrease in cash & cash equivalents from 149.25 lakhs as at March 31, 2024 to 11.26 lakhs as at March 31, 2025. Thereafter, our total current assets increased from 2,127.71 lakhs as at March 31, 2025 to 3,201.02 lakhs as at March 31, 2026 and further to 3,391.74 lakhs as at May 31,2026. The increase was primarily on account of inventories increased from 62.29 lakhs as at March 31, 2024 to 233.99 lakhs as at March 31, 2025, which further increased to 586.84 lakhs as at March 31,2026 and 634.22 lakhs as at May 31, 2026, trade receivables increased from 1,188.70 lakhs as at March 31, 2024 to 1,567.93 lakhs as at March 31, 2025, which further increased to 1,974.91 lakhs as at March 31,2026 and 1,991.20 lakhs as at May 31, 2026. The short-term loans and advances decreased from 952.62 lakhs as at March 31, 2024 to 314.53 lakhs as at March 31, 2025, which increased to 594.44 lakhs as at March 31,2026 and subsequently decreased to 559.80 lakhs as at May 31,2026.

Cash flows

The following table sets forth our cash flows for the period indicated:

Particulars	two months period ended May 31, 2026	Fiscal 2026	Fiscal 2025	Fiscal 2024
Net cash flow from/ (used in) operating activities	999.46	609.57	1,553.49	347.37
Net cash flow from/ (used in) investing activities	(1,226.46)	(2,210.47)	(1,610.96)	(1,933.12)
Net cash flow from/ (used in) financing activities	388.70	1,634.47	(80.52)	1,729.14
Net increase/decrease) in cash and cash equivalents	161.70	33.57	(137.99)	143.39
Cash and cash equivalents at the beginning of the year	44.83	11.26	149.25	5.86
Cash and cash equivalents at the end of the year	206.53	44.83	11.26	149.25

Operating Activities

Two months period ended May 31, 2026

Our net cash generated from operating activities was 999.46 lakhs for the two months period ended May 31, 2026. Our operating profit before changes in working capital changes was 413.72 lakhs which was primarily adjusted against increase in trade receivable, inventories and other current liabilities by 16.28 lakhs, 47.40 lakhs and 648.95 lakhs, respectively and decrease in trade payables, short-term provision and short-term loan and advances by 28.38 lakhs, 5.78 lakhs and 114.76 lakhs, respectively.

Financial Year 2025-26

Our net cash generated from operating activities was 609.57 lakhs for the financial year ended March 31, 2026. Our operating profit before changes in working capital changes was 1,720.12 lakhs which was primarily adjusted against increase in trade receivables, short term loan and advances, inventories, other noncurrent assets and short-term provision, by 406.97 lakhs, 179.81 lakhs, 352.83 lakhs, 2.99 lakhs and 10.62 lakhs, respectively and decrease in trade payables, other current liabilities and long-term provisions by 187.03 lakhs, 1.43 lakhs and 7.99 lakhs, respectively.

Financial Year 2024-25

Our net cash generated from operating activities was 1,553.49 lakhs for the financial year ended March 31, 2025. Our operating profit before changes in working capital changes was 1,323.40 lakhs which was primarily adjusted against increase in trade receivables, inventories, other current liabilities, short-term provision, trade payables by 379.24 lakhs, 171.69 lakhs, 26.79 lakhs, 3.17 lakhs and 339.07 lakhs, respectively and decrease in short-term loans and advances, other non-current assets and long-term provisions by 659.83 lakhs, 3.21 lakhs and 3.23 lakhs, respectively.

Financial Year 2023-24

Our net cash generated from operating activities was 347.37 lakhs for the financial year ended March 31, 2024. Our operating profit before changes in working capital changes was 894.13 lakhs which was primarily adjusted against increase in trade receivables, inventories, short-term loans and advances, other non-current assets and short-term provisions by 109.92 lakhs, 5.37 lakhs, 422.15 lakhs, 14.06 lakhs, and 0.69 lakhs, respectively and decrease in trade payables, other current liabilities and long term provisions by 32.95 lakhs, 105.90 lakhs and, 0.69 lakhs, respectively.

Investing Activities

Two months period ended May 31, 2026

Our net cash used in investing activities was 1,226.46 lakhs for the two months period ended May 31, 2026. It was on the account of purchase of property, plant and equipment amounting to 1,166.06 lakhs and increase in long term loans and advances amounting to 60.40 lakhs.

Financial Year 2025-26

Our net cash used in investing activities was 2,210.47 lakhs for the financial year ended on March 31, 2026. It was on the account of purchase of property, plant and equipment amounting to 1,098.61, increase in long term loans and advances amounting to 1,116.53 lakhs which was offset by proceeds from sale of property, plant & equipment amounted to 4.15 lakhs, interest income of 0.51 lakhs and dividend income of 0.01 lakhs.

Financial Year 2024-25

Our net cash used in investing activities was 1,610.96 lakhs for the financial year ended on March 31, 2025. It was on the account of purchase of property, plant and equipment amounting to 1,784.14 lakhs which was offset by proceeds from sale of investments amounted to 34.48 lakhs, interest income of 0.46 lakhs, dividend income of 0.06 lakhs and reduction in long term loans and advances amounted to 138.18 lakhs.

Financial Year 2023-24

Our net cash used in investing activities was 1,933.12 lakhs for the financial year ended on March 31, 2024. It was on the account of purchase of property, plant and equipment amounting to 1,910.58 lakhs, increase in long term loans and advances amounting to 17.42 lakhs and repayment of long-term liabilities amounting to 6.00 lakhs which was offset by interest income and dividend income of 0.82 lakhs and 0.06 lakhs, respectively.

Financing Activities

Two months period ended May 31, 2026

Net cash flow from financing activities for the two months period ended May 31, 2026 was 388.70 lakhs which was on account of proceeds from short-term borrowing of 523.09 lakhs, which was offset by repayment of long-term borrowings amounted to 98.17 lakhs, repayment of borrowings from directors and relatives amounted to 7.42 lakhs and interest paid amounted to 28.80 lakhs.

Financial Year 2025-26

Net cash flow from financing activities for the financial year ended March 31,2025 was 1,634.47 lakhs which was on account of proceeds from long-term borrowing of 961.85 lakhs, proceeds from private placement of 1,242.18 lakhs which was offset by repayment of short-term borrowings amounted to 412.93 lakhs and repayment of borrowings from directors and relatives amounted to 19.57 lakhs and interest paid amounted to 137.06 lakhs.

Financial Year 2024-25

Net cash used in financing activities for the financial year ended March 31,2025 was 80.52 lakhs which was on account of repayment of long-term borrowings of 69.59 lakhs, repayment of borrowings from directors and relatives amounting to 78.89 lakhs and incurred an interest/finance cost of 184.49 lakhs which was offset by proceeds from short term borrowings amounted to 252.45 lakhs.

Financial Year 2023-24

Net cash generated from financing activities for the financial year ended March 31,2024 was 1,729.14 lakhs which was on account of proceeds from long term borrowing, proceeds from short term borrowing, proceeds of borrowings from directors & relatives, amounting to 1,076.68 lakhs, 678.20 lakhs and 116.66 lakhs, respectively. The amount of interest paid during the year amounted to 142.40 lakhs.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rates. In the normal course of business, we are exposed to certain market risks including interest risks.

Interest rate risk

Interest rate risk results from changes in prevailing market interest rates, which can cause a change in the fair value of fixed-rate instruments and changes in the interest payments of the variable-rate instruments. Our operations are funded to a certain extent by borrowings. Our current loan facilities carry interest at variable rates as well as fixed rates. We mitigate risk by structuring our borrowings to achieve a reasonable, competitive cost of funding. There can be no assurance that we will be able to do so on commercially reasonable terms, that our counterparties will perform their obligations, or that these agreements, if entered into, will protect us adequately against interest rate risks.

Liquidity risk

Adequate and timely cash availability for our operations is the liquidity risk associated with our operations. Our Companys objective is to all time maintain optimum levels of liquidity to meet its cash and collateral requirements. We employee prudent liquidity risk management practices which inter-alia means maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities.

Credit Risk

We are exposed to the risk that our counterparties may not comply with their obligations under a financial instrument or customer contract, leading to a financial loss. We are exposed to credit risk from our operating activities, primarily from trade receivables.

We consider our customers to be creditworthy counterparties, which limits the credit risk, however, there can be no assurance that our counterparties may not default on their obligations, which may adversely affect our business and financial condition.

Material Frauds

There is no material frauds committed against our Company for the two months period ended May 31, 2026 and in the last three financials year.

Unusual or Infrequent Events or Transactions

Except as described elsewhere in this Red Herring Prospectus, there have been no events or transactions to our knowledge which may be described as "unusual" or "infrequent".

Significant economic/regulatory changes

Government policies governing the sector in which we operate as well as the overall growth of the Indian economy has a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations.

There are no significant economic changes that materially affected our Companys operations or are likely to affect income except as mentioned in the section titled "Risk Factors" on page 24 of this Red Herring Prospectus.

Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations

Other than as described in the section titled "Risk Factors" and chapter titled "Managements Discussion and Analysis of Financial Position and Results of Operations" on pages 24 and 288, respectively, of this Red Herring Prospectus, to our knowledge there are no known trends or uncertainties that have or are expected to have a material adverse impact on our income from continuing operations.

Future changes in the relationship between costs and revenues

Other than as described in the section titled "Risk Factors" and chapter titled "Managements Discussion and Analysis of Financial Position and Results of Operations" on pages 24 and 288 respectively, and elsewhere in this Red Herring Prospectus, there are no known factors to our knowledge which would have a material adverse impact on the relationship between costs and income of our Company. Our Companys future costs and revenues will be determined by demand/supply situation, government policies and other economic factors.

New products or Business segments

Except as disclosed in this Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new products/ services or business segment.

Seasonality of Business

Except as mentioned in this chapter, our business is not subject to seasonal variations.

Significant Dependence on a Single or Few Suppliers or Customers

For the two months period ended May 31, 2026 and Fiscal 2026, Fiscal 2025 and Fiscal 2024, our top five customers accounted for 45.02%, 41.87%,47.38% and 45.65%, respectively, and our largest customer accounted for 11.23%, 13.55%, 15.10% and 11.33% of our revenue from operations, respectively.

Related Party Transactions

We enter into various transactions with related parties in the ordinary course of business. For further information relating to our related party transactions see "Restated Financial Information" on page 232.

Material Developments subsequent to May 31, 2026

Except as disclosed below, no circumstances have arisen since May 31, 2026, the date of the last financial statements as disclosed in this Red Herring Prospectus which materially or adversely affect or are likely to affect our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months:

(a) The Authorised share capital of the Company was increased from 1,700.00 Lakhs to 2,000.00 Lakhs vide Extraordinary General Meeting dated July 25, 2026.