Technichem Organics Ltd Management Discussions

The Management of Technichem Organics Limited presents the Management Discussion and Analysis Report for the financial year ended 31^st March 2025. This report gives an overview of the Companys performance, key business developments, and outlook for the future.

INDUSTRY OVERVIEW:

Technichem Organics Limited operates in the specialty chemicals sector, primarily serving pharmaceutical, agrochemical, and performance chemical industries.

Indias chemical industry continues to grow steadily due to strong domestic demand, export opportunities, and government support under initiatives like "Make in India" and PLI schemes. India is projected to become a USD 300 billion chemical market by 2025.

The global trend of diversifying away from China also offers significant growth potential for Indian companies like Technichem Organics Limited.

SEGMENT- WISE PERFORMANCE:

Company is mainly engaged in the business of manufacturing of a wide range of chemicals, Pyrazoles, Pyrazolones, Speciality Chemicals, Pigment & Dye Intermediates and Air Oxidation Chemistry that serves multiple industries, including pharmaceuticals, agriculture, coatings, pigments, dyes and others. This wide array of end uses highlights the extensive and versatile nature of our product offerings.

The Company is operating in only one segment. The production / turnover / performance of the Company have been disclosed in the Directors Report.

THREATS:

The Company operates in a challenging environment that presents several potential threats. One of the major concerns is the volatility in raw material prices and fluctuations in foreign exchange rates, which can significantly impact production costs and profit margins. Additionally, the industry is subject to stringent environmental regulations and compliance norms, which may require ongoing investment in pollution control and safety infrastructure. Furthermore, Technichem Organics faces intense competition from both domestic and international players, which could affect market share and pricing strategies. Addressing these threats proactively is essential for sustaining long-term growth.

EXPLORATION:

The Company is activelyexploring new product verticals, strategic collaborations, and opportunities formarket expansions. These initiatives are focused on building a resilient, diversified, and future-ready business model.

STRENGTHS:

The promoters and management team of the Company possess strong technical knowledge and experience in the chemical industry. Their leadership has helped the Company navigate challenges. Their continued commitment and industry expertise are expected to play a key role in driving growth and profitability in the years ahead.

OPPORTUNITIES AND OUTLOOK:

The Company sees strong opportunities arising from increasing demand for specialty chemicals in both domestic and international markets. The expansion of manufacturing capabilities and introduction of new product lines will further strengthen its position. In addition, long-standing relationships with customers and plans for strategic backward integration offer further growth potential.

The Company has made an Initial Public Offer (IPO) during the period under review which will support the Companys future working capital requirements, reduce debt obligations, and fund capacity expansion initiatives. With a robust order book and increasing interest from global clients, the Company is expected to strengthen its market position. The outlook for FY 2025–26 remains positive, and Technichem is well-positioned to capitalise on the growing global demand for reliable and sustainable chemical suppliers.

RISKS AND CONCERNS:

The specialty chemical sector inherently involves several operational and financial risks. These include price fluctuations in raw materials, the need to comply with strict safety and environmental norms, and exposure to foreign exchange risks due to export activities.

The Company actively manages these risks through strategies such as entering into long-term procurement contracts and investing in pollution control infrastructure to ensure compliance and business continuity.

FINANCIAL AND OPERATIONAL PERFORMANCE:

The Company will envisage its growth in future because of continuous hard core efforts put by your Companys management to achieve the pace of development, towards which your Company marches. However much requires doing than what has been done due to huge brought forward losses.

Despite the short-term setback, Technichem Organics has invested in capacity enhancements and infrastructure improvements, which are expected to yield returns in the following fiscal year.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has focused onreduction of fixed expenses and has also reduced direct variables cost. It has concentrated on value added products and optimize on available cash flow. The management is ensuring an effective internal control system to safeguard the assets of the company; Efforts for continued improvement of internal control system are being consistently.

The Company has established effective internal control systems for operational efficiency, accuracy of financial reporting, and compliance with applicable laws. The system is regularly reviewed and strengthened to align with best practices. An internal audit function independently evaluates the adequacy of controls and reports to the Audit Committee.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

Technichem Organics considers its human capital as its core strength. The Company places strong emphasis on employee training, safety, and development. Industrial relations have remained cordial throughout the year. Industrial relations have remained cordial and stable throughout the year under review.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT INCLUDING NUMBER OF PEOPLE EMPLOYED:

Technichem promotes a work culture that encourages teamwork and continuous on-the-job learning. The Company is committed to enhancing the skills and capabilities of its employees through training programs and personal development initiatives. Cordial and harmonious relation with employees continued to prevail throughout the year under review.

KEYFINANCIAL RATIOS:

Key Ratios	FY 2024-25	FY 2023-24	Change %	Explanation, if required
Current ratio	2.24	1.09	105.50	Due to increase in current assets
Debt-equity ratio	0.13	0.61	78.69	Due to decrease of long-term
				borrowing
Debt service coverage ratio	1.70	1.61	5.59	Not Applicable
Return on equity ratio	0.09	0.23	60.87	Due to decrease of profit during
				the year
Inventory turnover ratio	5.36	7.10	24.51	Not Applicable
Trade receivables turnover ratio	4.66	5.11	8.81	Not Applicable
Trade payables turnover ratio	8.78	2.39	267.36	Due to decrease of creditors and
				increase of purchase
Net capital turnover ratio	2.81	29.30	90.41	Due to increasing of current
				assets and decrease of current
				liabilities
Net profit ratio	0.07	0.09	22.22	Not Applicable
Return on capital employed	0.13	0.27	51.85	Due to decrease of profit during
				the year
Return on investment	0.06	0.09	33.33	Due to decrease of profit during
				the year

CAUTIONARY STATEMENT:

Statement in this Management Discussion and Analysis Report, describing the Companys objectives, estimates and expectations may constitute ‘Forward Looking Statements within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.

		By Order of the Board of Directors
		For Technichem Organics Limited
	Bharat J. Pandya	Anilkumar Pandya
Place: Ahmedabad	Chairman & Managing Director	Wholetime Director
Date : 22nd July, 2025	(DIN: 00921775)	(DIN:00921815)