Sharda Cropchem Ltd Management Discussions

Global Economy

The global economy entered 2026 in a transitionary phase, moving from the resilience-driven recovery of 2025 towards a more cautious and recalibrated growth environment. Despite elevated trade barriers, tighter financial conditions, and geopolitical uncertainty, global growth remained relatively stable through 2025, supported by easing inflation and gradual stabilisation of supply chains. Businesses also accelerated the shift towards localised and strategically secure supply networks to strengthen resilience.

However, the outlook moderated entering 2026 as renewed geopolitical tensions, particularly in the Middle East, intensified pressure on global trade and commodity markets. According to the IMFs April 2026 World Economic Outlook, global GDP growth is projected at 3.1% in 2026, reflecting the impact of higher commodity prices, disrupted shipping routes, and cautious business sentiment.

While advanced economies continue to demonstrate moderate resilience, emerging market and developing economies remain more vulnerable to currency volatility, elevated import costs, and tightening financial conditions.

Geopolitical uncertainty has also become a key driver of market dynamics. Volatility in energy and commodity markets has increased input and logistics costs across industries, creating renewed inflationary pressures after the disinflation progress achieved in 2025. In response, central banks continue to maintain cautious monetary policy stances, while businesses adopt a more selective approach towards investments, prioritising regions with stronger macroeconomic stability, energy security, and policy support.

Recovery in industrial demand continues to be moderated by volatile feedstock prices, elevated transportation costs, and supply chain uncertainty. At the same time, sectors such as agriculture remain structurally supported by stable food demand and increasing focus on food security, despite rising fertiliser and input costs. Across industries, companies are increasingly prioritising supply chain diversification, operational agility, and cost optimisation to navigate ongoing volatility and protect margins.

Despite near-term challenges, long-term growth fundamentals remain supported by technological advancement, including AI-led productivity gains, and continued supply chain diversification aimed at building more resilient global trade networks.

[Source: International Monetary Funds World Economic Outlook (IMF WEO), April 2026]

Real GDP Growth [in %]

Indian Economy

India further reinforced its position as the worlds fastest-growing major economy in 2025-26, supported by resilient domestic demand, sustained investments, and improving industrial activity. Real GDP grew by 7.4% in 2025-26, while growth for 2026-27 is projected in the range of 6.8%-7.2%, reflecting strong medium-term economic momentum despite global uncertainties. Rural consumption, manufacturing expansion, and sustained growth in services continued to support broad-based economic activity.

Sectoral performance underscores this balanced expansion. Agriculture and allied activities continue to play a crucial stabilising role, with the sector estimated to grow by 3.1% in 2025-26 and agricultural GVA expanding by 3.6% in 2025-26.

Over the past five years, real growth in this space has averaged a strong 4.4%, structurally driven by a pivot toward high-value livestock, fisheries, and horticulture. On the supply side, momentum is visibly building in the industrial sector, projected to grow at 6.2% in 2025-26. Manufacturing has emerged as a standout engine, with GVA growth accelerating to 7.72% in 2025-26, heavily fuelled by technology, electronics, and mobility-linked segments. Meanwhile, services remain the dominant anchor of the economy, surging by an estimated 9.1 % and f accounting for a historic 56.4% of GVA in 2025-26, driven by modern, tradable, and f-ih digitally delivered activities.

[Source: Economic Survey 2025-26]

Macroeconomic stability has improved dramatically alongside this growth. Headline CPI inflation averaged a historic low during 2025-26, driven by food and fuel disinflation, which significantly boosted real purchasing power.

The external sector remains highly resilient, with total exports achieving an all-time record in the preceding fiscal year and sustaining a robust performance in the first half of the current fiscal year despite global trade frictions. Financial buffers are exceptionally strong, with foreign exchange reserves hitting a formidable US$ 701.4 Bn in 2025-26, sufficient to cover roughly 11 months of imports. Labour markets similarly reflect strengthening conditions, with total employment reaching 56.2 Cr. in 2025-26, improving female labour force participation, and the unemployment rate easing to 4.8% in 2025-26.

[Source: Economic Survey 2025-26]

This sustained growth is underpinned by prudent fiscal management and a highly supportive monetary environment. The government continues to anchor stability through credible fiscal consolidation, aiming to contain the fiscal deficit below 4.5% of GDP, alongside a sustained push in effective capital expenditure, which has structurally risen to around 4% of GDP. Complementing this fiscal discipline, monetary conditions have turned growth-supportive, with cumulative repo rate cuts bringing the policy rate down to 5.25%. Supported by a remarkably clean and stable banking system featuring multi-decadal low non-performing assets, Indias policy framework is firmly oriented toward durable, inclusive, and investment-led economic expansion. [Source: Economic Survey 2025-26]

Industry Overview

Global Crop Protection Market

Every harvest carries a quiet threat. Pests, weeds, and diseases do not announce themselves; they compound silently, and by the time damage is visible, yield is already lost. Crop protection exists to interrupt that process. It is not an enhancement to modern agriculture; it is a precondition for it. The global crop protection chemicals market stands at US$ 109.67 Bn in 2026 and is projected to reach US$ 137.49 Bn by 2031, a 4.62% CAGR over five years.

South America leads the market, accounting for 41.85% of global share in 2025. Large-scale row crop systems and high chemical intensity underpin this dominance. In Brazil, near-universal GM soybean adoption drove glyphosate and dicamba demand to record levels. Asia-Pacific represents the next growth engine. Farm consolidation, higher input penetration and export-oriented agriculture are expanding demand.

In the US, glyphosate-resistant Palmer amaranth has spread across 27 states, pushing growers towards multi-mode herbicide programmes and increasing demand for new actives. Precision agriculture, now used on 35% of large North American farms, is reshaping application practices, favouring higher- concentration formulations even as overall volumes stabilise. Structural constraints remain. EU pesticide restrictions and tighter Maximum Residue Limits are limiting synthetic chemistries. Biological products are gaining share in high-value crops. At the same time, supply volatility in China continues to create pricing uncertainty across active ingredient categories.

[Source: https://www.mordorintelligence. com/industry-reports/global- crop-protection-chemicals- pesticides-market-industry]

Global Crop Protection Market Category-wise

Herbicides

The global herbicides market is valued at US$ 47.31 Bn in 2026 and projected to reach US$ 60.09 Bn by 2031, reflecting a 4.90% CAGR. This expansion is underpinned by mounting weed resistance challenges, rising food demand, and rapid adoption of precision agriculture technologies.

South America commands the largest regional share at 42.15%, anchored by Brazils 720,000 metric tons of annual herbicide consumption. This dominance reflects widespread adoption of herbicide-tolerant soybean and corn varieties under large-scale zero-tillage systems, where pre-emergent herbicide use is structurally embedded in farm operations. Asia-Pacific is the fastest-growing region at a 5.85% CAGR, driven by farm consolidation in China, mechanisation subsidies in India, and rising demand for rice weed management across Southeast Asia. Soil treatment leads application modes with a 48.05% share, growing at 5.22% CAGR, sustained by no-till farmings reliance on pre-emergent chemistries and micro-encapsulation technologies that reduce drift.

Grains and cereals represent the largest crop-type segment at 43.72%, also the fastest growing at 5.09%

CAGR, supported by stacked-trait seed adoption and double-cropping in high feed-demand markets.

Key growth drivers include population growth toward 9.7 Bn by 2050, drone-based application reducing chemical volumes by 10-20%, and over 500 resistant weed biotypes compelling more intensive herbicide programmes. Low-drift nano-formulation mandates and expanding no-till acreage provide further momentum. On the restraint side, stricter residue regulations and tightening registration requirements create compliance pressure. Raw material price volatility compresses margins, while gradual shifts towards organic farming and climate-driven variability in weed emergence introduce demand uncertainty, tempering growth without reversing the markets broader upward trajectory.

[Source: https://www.mordorintelligence. com/industry-reports/global- herbicides-market-industry]

Insecticides

The global insecticides market is projected to be valued at US$ 14.08 Bn in 2026 and to reach US$ 19.06 Bn by 2034, advancing at a 3.86% CAGR. Population growth toward 9.1 Bn, pest-driven yield losses of 20-40%, and climate-induced pest migration are emerging as key demand drivers, reinforcing the need for food security and accelerating the adoption of digital tools across modern farming systems, which is expected to sustain sectoral growth.

Drone-based application and AI-powered IPM systems are improving targeting precision while managing resistance risks. Restraints include tightening regulatory frameworks, particularly EU restrictions on key active ingredients, alongside growing consumer preference for residue-free produce and organic alternatives.

[Source: https://www.fortunebusinessinsights.com/ insecticides-market-114328]

Fungicides

The global fungicides market is projected to be valued at US$ 20.08 Bn in 2026 and to reach US$ 25.67 Bn by 2034, advancing at a 3.12% CAGR. Growth is underpinned by intensifying fungal disease pressure, climate-driven outbreak cycles, and the critical need to safeguard yields across staple and high-value crops worldwide.

Fungal pathogens are responsible for 20-30% of global crop losses annually, creating persistent and non-negotiable demand for effective disease control. Warmer, wetter growing conditions linked to climate change are expanding outbreak frequency and geographic reach, further intensifying market need.

Advances in targeted formulations and adjuvant technologies are improving efficacy while reducing application volumes. Biological options are gaining commercial ground amid the broader sustainability transition. On the restraint side, tightening residue regulations and mandatory resistance management frameworks are increasing compliance complexity and constraining the use of several established active ingredients.

[Source: Fungicides Market Size, Share Forecast Report (2026-2034)]

Bio-based

The global bio-based crop protection market is projected to be valued at US$ 7.27 Bn in 2026 and to reach US$ 11.53 Bn by 2030, registering a 12.2% CAGR. This expansion reflects a fundamental shift in agricultural philosophy, as growers, regulators, and consumers increasingly favour natural and sustainable alternatives to synthetic chemistries.

The momentum is driven by pesticide residue concerns, microbial agent adoption, and synthetic pesticide bans across key markets. Organic farming remains a powerful structural catalyst.

IFOAM (International Federation of Organic Agriculture Movements) reported 99 Mn hectares under organic management globally in 2023, generating €136 Bn in sales, creating a vast and growing addressable base for bio-based crop protection solutions that align with certified production requirements.

Demand for residue-free produce, the global organic farming boom, and increasing R&D investment in biocontrol are the primary growth engines. Climate-resilient farming imperatives are further accelerating adoption of biologicals as growers seek inputs compatible with regenerative and low-input systems.

However, the sector faces meaningful headwinds, including high development costs, lengthy and complex regulatory approval pathways, and efficacy sensitivity to environmental conditions. Continued advances in formulation technology are progressively mitigating these limitations, supporting the markets long-term growth outlook.

[Source: https://www. the business research company .com /Error. aspx?aspxerrorpath=/report/biological- crop-protection-global-market-report%20.]

Regional Crop Protection Market Analysis

Europe

Europes crop protection market remained relatively stable in 2025, supported by favourable weather conditions across several regions, new active ingredient launches, and continued demand for premium crop protection solutions. The market was valued at approximately US$ 13,632 Mn, with innovation-led growth driven by herbicides such as bixlozone and cinmethylin, alongside fungicides including mefentrifluconazole and fenpicoxamid.

While dryness across parts of Eastern and Southern Europe impacted yields for crops such as maize, sunflower, and soybean, overall market conditions benefited from stable pricing and ongoing technology adoption. Looking ahead to 2026, normalised weather patterns and continued product innovation are expected to support market activity, although regulatory restriction: on certain active ingredients may moderate growth potential. Growers are also increasingly prioritising export-compliant chemistry to align with evolving residue requirements in international markets.

North America

North Americas crop protection market demonstrated steady improvement in 2025, reaching a valuation of US$ 11,846 Mn, supported by improved product availability, balanced channel inventories, and resilient crop planting activity. The market benefited from a shift towards a more disciplined and just-in-time purchasing behaviour across the distribution channel. Although higher agrochemical and fertiliser costs continued to pressure grower economics, improving supply conditions and favourable weather expectations support a constructive outlook for 2026. Increased insect pressure is expected to support insecticide demand, while herbicide programmes across maize and soybean crops continue to drive product adoption.

Asia-Pacific

Asia-Pacific emerged as the strongest-performing crop protection market in 2025, growing 1.9% to reach US$ 19,328 Mn, supported by improved weather conditions, recovery from prior-year pricing weakness, and strong agricultural activity across India, China, and Australia. India recorded expansion in kharif acreage, aided by above-normal monsoon rainfall, while China continued to strengthen its position as a major global pesticide producer. The region also witnessed strong momentum in innovation, with several new active ingredients and differentiated crop protection technologies launched across rice, cereals, and specialty crops.

Looking ahead, favourable weather expectations, stabilising market conditions, and a robust innovation pipeline are expected to sustain growth momentum through 2026, although commodity- linked pricing volatility, including glyphosate pricing trends, will remain an important factor to monitor.

Middle East and Africa

The Middle East and Africa crop protection market recorded moderate growth in 2025, reaching approximately US$ 2,517 Mn, supported by improving agricultural productivity, export-oriented farming practices, and gradual adoption of higher-value crop protection products. The region continued to align more closely with international regulatory standards, particularly European residue and compliance requirements, encouraging the transition toward newer-generation chemistries.

In South Africa, improved crop yields supported agricultural output despite relatively stable planted acreage. While dry weather conditions and competitive pricing from generic products remained key market considerations, improving pricing stability and growing focus on premium, compliant crop protection solutions are expected to support market development in 2026, particularly across export-focused agricultural segments.

Outlook

Global crop protection is positioned for steady gains in 2026, underpinned by stabilising input prices, a robust pipeline of new active ingredients, and evolving export market dynamics. Asia-Pacific and North America are expected to remain key growth drivers, supported by favourable agricultural activity and technology adoption, while Europe and the Middle East and Africa continue to navigate evolving regulatory transitions. Across regions, increasing focus on productivity enhancement, export compliance, and sustainable farming practices is expected to support long-term demand for differentiated crop protection solutions.

[Source: https://www.agribusinessglobal. com/agrochemicals/crop-protection-market- development-expectations-for-2026/]

Company Overview

Sharda Cropchem Limited (also referred to as Sharda Cropchem, Sharda, The Company or We) is a fast-expanding global agrochemicals firm. We have firmly established ourselves in the generic crop protection industry. Our competitive edge stems from being IP-driven, supported by an extensive and continuously growing collection of dossiers and intellectual property rights (IPRs). These resources provide a strong foundation for long-term, sustainable growth.

These resources enable us to participate actively across diverse formulations and generic active ingredients, particularly in mature markets such as Europe, North America, and Latin America.

We function with an asset- light business model, allowing us to concentrate on our core strengths, including identifying scalable molecules and pursuing registration opportunities across geographies with minimal capital investment. At present, we hold 3,011 registrations globally, with 1,004 applications in the pipeline at different stages of approval. Our worldwide presence covers more than 80 countries, backed by a strong commercial infrastructure of 525+ third-party distributors and a committed sales force of over 500+ professionals. Additionally, our enduring partnerships with reliable manufacturers and formulators help us deliver premium crop protection solutions at competitive prices.

We have effectively adopted a factory-to-farmer approach, positioning ourselves as a comprehensive crop care solution provider. This model improves service delivery and allows us to quickly respond to shifting customer demands and market conditions. As the need for quality crop protection expands, this approach ensures we remain flexible and relevant in every region we serve. Our capacity to scale, adapt, and innovate has cemented our reputation as a trusted brand in global markets. We continue strengthening our supply chain, deepening domain expertise, and expanding our registration pipeline to enter newer markets strategically, while consolidating our presence in existing ones.

Business Segments

Sharda Cropchem operates through two distinct yet complementary business segments, including:

Agrochemicals

Non-Agrochemicals

This enables the Company to serve a wide range of sectors with targeted, high-quality solutions.

Agrochemicals

At Sharda, we are committed to enhancing agricultural productivity through the marketing and distribution of generic active ingredients and formulations. These span key segments like fungicides, herbicides, and insecticides.

We source these either as ready formulations or by procuring active ingredients and collaborating with third-party partners to develop customised crop protection solutions.

Beyond core agricultural products, Sharda also serves the turf, specialty markets, and the biocide segment, providing disinfectants and targeted pest control solutions. This integrated model, supported by strong sourcing and marketing capabilities, enables the Company to address evolving global crop care needs efficiently.

Non-Agrochemicals

Our non-agrochemicals segment broadens our portfolio beyond agriculture. It encompasses the supply of belts, conveyor belts, dyes, dye intermediates, and general chemicals, addressing diverse industrial requirements.

This reinforces our foothold in non-agricultural markets, providing strength and additional growth opportunities beyond the agrochemical sector.

Financial Overview

Key Financial Highlights as per the Consolidated Financial Statements

Workplace Inclusion and People Empowerment

At Sharda, people are central to everything we do. We regard our employees, customers, and shareholders as the pillars of our continued success. Supported by the deep industry knowledge of our Promoters and Management Team, we continue to strengthen our presence in existing markets, while venturing into new geographies. We are dedicated to building an inclusive, respectful, and growth-focused workplace. This year, we made meaningful progress in our diversity agenda, with women representing over 56% of our total workforce. In addition, we actively motivate our teams to embrace inclusion and equality, creating an environment where every individual can thrive and contribute with confidence.

As of 31 March, 2026, our total employee strength stood at 213, reflecting our steady and focused approach to talent expansion.

Investing in people remains a top priority for us. We continue to attract skilled professionals and critical talent across functions through fair hiring and competitive pay. At the same time, our focus on continuous learning is embedded across the organisation. In line with this commitment, we offer regular upskilling, training, and development opportunities to help our employees stay agile in a fast-evolving business environment. By embedding diversity, meritocracy, and empowerment into our culture, we aim to build a workplace that inspires excellence, nurtures potential, and ensures long-term value creation for all stakeholders.

Risk Management

	Risk Description	Risk Mitigation Strategy
Regulatory Risk	Operating in a heavily regulated industry, Sharda Cropchem faces exposure to non-compliance leading to penalties or reputational harm.	Deploying a robust compliance management system
		Retaining a dedicated legal and regulatory team across key regions to remain current on regulatory developments and ensure adherence
Biodiversity and Environmental Risk	The application of agrochemicals poses threats to human health and the surrounding environment.	Enforcing stringent biosafety protocols
		Complying with environmental regulations
		Investing in R&D for sustainable products
		Conducting periodic training for employees, distributors, and farmers
Climate Risk	Climate variability may disrupt agricultural cycles and overall business outcomes.	Broadening the product portfolio and geographic presence
		Investing in climate-resilient solutions
		Promoting sustainable agricultural practices to adapt to shifting climates
Geopolitical and Supply Chain Risk	Geopolitical tensions, trade restrictions, sanctions, shipping disruptions, and volatility in global commodity and energy markets may impact sourcing, logistics, pricing, and market access.	Diversifying sourcing and supplier networks across regions
		Strengthening inventory and supply chain planning Expanding geographic market presence to reduce concentration risk
		Continuously monitoring geopolitical developments and trade policies
Risk of Delay in Product Registrations	Delays in product registrations may impede timely market entry.	Submitting multiple registrations across regions to maintain regulatory readiness and reduce delays in product launches.
Downward Pricing Pressure Due to Oversupply and Geopolitical Risks Wo	Oversupply or geopolitical disruptions may erode pricing power.	Concentrating on operational efficiency and cost control
		Providing differentiated, value-added products to counter pricing pressures
Customer Credit Risk JBL	Payment defaults or credit concerns among customers present risks to cash flows.	Conducting thorough customer due diligence
		Performing ongoing credit assessments
		Securing comprehensive global credit insurance coverage to safeguard against credit risks
Currency Risk &	Currency fluctuations in cross-border transactions can impact financial performance.	Employing natural hedging by aligning US$ and € inflows with outflows
		Utilising forward contracts to minimise currency fluctuation risks

Internal Control Systems and Their Adequacy

We have established a robust internal control framework to ensure financial integrity, operational efficiency, legal compliance, and asset protection. A reputed external agency reviews these controls at regular intervals, offering an independent assessment of their adequacy and effectiveness.

Our internal controls prevent unauthorised use or disposal of assets, ensure accurate accounting records, and validate transaction authenticity. We also maintain a proactive compliance system that flags potential violations early, enabling prompt corrective action.

The Audit Committee and the Board of Directors oversee these internal control systems.

They review its effectiveness at regular intervals to ensure alignment with corporate policies and strategic objectives. The internal audit function, supported by renowned professionals, plays a pivotal role in embedding a culture of risk awareness across all business units and corporate functions. Furthermore, the internal audit team facilitates the implementation of a structured Enterprise Risk Management (ERM) framework. This includes formal reporting and monitoring mechanisms, periodic updates to risk registers, and integration of risk management into the broader business planning cycle. These efforts collectively reinforce governance, enhance strategic agility, and support sustainable value creation for stakeholders.