Shivalik Rasayan Ltd Management Discussions

A. Indian Agrochemical Industry

Agrochemicals play a pivotal role in driving agricultural productivity and ensuring food security for Indias population of 140 Crores people. The governments adherence to fast-tracking agrochemical projects indicates a positive trajectory for the industry, with export revenues projected to reach $10 bn in the coming years. The future of Indias agrochemical industry looks promising, with revenues estimated to grow significantly driven by favourable government initiatives, increased exports, and stable domestic as well as global demand.

The Agrochemical Industry in India Market size is estimated to reach USD 12.70 bn by 2030, at a CAGR of 7.10% during the forecast period. Strong domestic manufacturing capacity, expanding export pipelines, and policy incentives that favor sustainable inputs are propelling this momentum. India remains the fourth- largest global producer. Nonetheless, raw-material dependence on China and a patchwork of state-level toxicity bans continue to inject cost volatility and compliance complexity into the India agrochemicals market.

Opportunities in Indian Market

The rising populations as well as rising urban and rural incomes, along with export demands, are driving the growth of agriculture sector.

• Indian players have penetrated well in the exports space of many agrochemicals. Further, due to changing global scenario and strategies, various global multinational companies (MNCs) are looking for various destinations other than China for future growth opportunities in these segments, which augurs well for India as it can penetrate deeper and catch up with China on a global level.

• With the increasing infrastructure of contract synthesis in India, more foreign players with patented products are expected to manufacture active molecules. As a result, the valuation for CSM or patented businesses is relatively higher, resulting in higher growth potential of custom synthesis and manufacturing services in the contract synthesis sector.

• Three out of every four active ingredients sold globally are no longer under patent, opening a technology corridor for cost-competitive Indian

producers. With 60% of sector revenue already export-linked, firms located in Gujarats Dahej and Maharashtras Tarapur clusters are scaling backward integration to secure intermediaries and cut freight costs. Overall, the driver reinforces the long-term growth arc of the Indian agrochemicals market by widening its global addressable base and incentivizing technology upgrades.

Challenges in Indian Market

Indian agrochemical industry struggled with challenges such as the limited availability of certain raw materials and the absence of mega-production facilities for a long. However, these challenges are addressed by strategic interventions such as capacity building for backward integration, R&D investments to enhance process efficiencies and reduce costs, and fostering a conducive regulatory environment to encourage innovation and sustainability.

The Indian agrochemical industry has made significant strides in establishing state-of-the-art manufacturing facilities to meet both domestic and global demands. Renowned worldwide for its production efficiencies, product efficacy, quality, and competitive pricing, the industry continues to thrive.

To encourage innovation and technological advancements, the government provides support for R&D activities in chemicals and agrochemicals. This includes funding programs, collaboration opportunities with research institutions, and incentives for developing new products and processes. These government initiatives collectively aim to promote growth, innovation, and sustainability in the agrochemicals and specialty chemicals industries

B. API (ACTIVE PHARMACEUTICAL INGREDIENTS) INDUSTRY

The Indian API market is a significant segment for India as well as for global pharmaceutical industry, marked by robust API usage, manufacturing, and exports. API trends indicate a growing emphasis on quality and compliance, with stricter regulations and increased focus on security and stability. Pharmaceutical exports have surged, driven by investment opportunities, making India a preferred destination for API sourcing. Domestic API sales are buoyed by a large and growing pharmaceutical workforce, advanced infrastructure, and a streamlined supply chain. API licensing,

innovation, and research are key drivers of growth, with companies investing in technology and development to meet evolving market demands.

Growth Opportunities & Challenges

The India API market size is forecast to increase by USD 11.18 bn, at a CAGR of 7.4% by 2029.

• The market is experiencing significant growth, driven by an increasing number of drug master files (DMF) submitted to regulatory authorities. This trend reflects the paradigm shift towards contract manufacturing organizations (CMOs) and the outsourcing of API production to countries like India, where cost-effective manufacturing solutions are available.

• The potential for growth is substantial, as the demand for affordable APIs continues to rise, particularly in emerging markets. Companies seek to capitalize this opportunity and start investing in state-of-the-art manufacturing facilities and adhere to stringent regulatory requirements to remain competitive.

• API pricing remains competitive, with manufacturers adopting innovative synthesis methods to reduce costs and maintain profitability. The API industry continues to face challenges, including regulatory hurdles, supply chain disruptions, and increasing competition. Despite these challenges, the future looks bright for the Indian API market, with ample opportunities for growth and expansion.

Business Overview

The Company is continuously expanding its presence in both the Agrochemicals and APIs markets. With a dedicated team and a clear vision the Company was able to achieve Rs. 150/- Crores turnover during the year and also entered in the export business to UAE, Poland and China. The management is confident that Shivalik is well positioned to capitalize on emerging opportunities and deliver sustained value to the shareholders.

SRLs revenue from operations for 2024-25 was Rs. 14,922.59 Lakhs, compared to 9,367.63 Lakhs during 2023-24, reflecting an increase of 59.29% from the previous year. Profit after tax was Rs. 1,386.68 Lakhs during the year, compared to Rs. 863.58 Lakhs in the previous year. During the year the Company also exports its APIs to UAE, Poland and China which meagre contributes the total revenue.

a. API- During the year under review the United States Food and Drug Administration (US FDA) approved the API Facility at Dahej Unit-I and released the Establishment Inspection Report (EIR). Further, the Company has received registration for CEP to EDQM for Pemetrexed Disodium Heptahydrate (PMD) API and for Ambroxol API approval is awaited. Also during the year the Company exports Busulfan, Chlonidine and Palbocicilib API to UAE, Poland and China respectively.

The Company has entered into an agreement with a US company to manufacture API exclusively for it. The Company is quite optimistic, as these are new molecules and would support Companys revenue in coming years.

b. Agrochemicals- Commercial Production at new Agro & Specialty Chemical plant at Dahej-II is started during the year and the Company has achieved a turnover of Rs. 52.97 Crores from this plant.

Further, the plant has produced Dimethoate Tech, Phenyl Glyoxylate and Pymetrozine during the year. Products like Kresoxim Methyl, Novaluron and Chlorantraniliprole (CTPR) will be taken up during current year.

Human Resources

The Company maintains a strong focus on building a positive and engaging workplace through:

• Inclusive and Respectful Work Culture

• Competitive Compensation and Benefits

• Continuous Growth and Development Opportunities

• Enriched Roles and Responsibilities

• Focused Development of Critical Talent with Clear

• Career Paths

• Strong Onboarding Experience.

Throughout the year, employees were provided with numerous opportunities to participate in various training programs, either virtually or in person. The online integrated training platform enabled employees to choose functional or behavioral programs according to their individual preferences, with unlimited access.

As of March 31, 2025, the Companys total number of payroll employees was 275.

Internal Control System

We at SRL believe that internal control is a prerequisite for governance and that we should exercise business plans within a framework of checks and balances. Our Company has a well-established internal control framework to continuously assess the adequacy, effectiveness, and efficiency of financial and operational controls. The management is committed to ensuring an

effective internal control environment, commensurate with the size and complexity of the business, which assures compliance with internal policies, applicable laws, regulations and protection of resources and assets.