TGV Sraac Ltd Management Discussions

(Pursuant to Regulation 34 (2) read with Schedule V, Part B (2) of SEBI (LODR) Regulations, 2015

Indias economy in 2026 is marked by strong growth, historically low inflation, and resilient sectoral performance, with GDP projected to expand around 7.4%. Despite global uncertainties, India has consolidated its position as one of the fastest-growing major economies, supported by agriculture, manufacturing, and service sectors. While, agriculture grew by 3.1% in FY26, supported by a favorable monsoon the allied activities like livestock and fisheries expanded by 5-6%, stabilizing rural demand. At the same time manufacturing momentum gained through industrial engagement, policy reforms, and investment pipelines. Service sector continued to lead expansion, especially IT, financial services, and logistics, reinforcing Indias role in global value chains. The Geopolitical Risks associated from Middle East tensions and oil transport disruptions pose challenges, prompting India to diversify energy sources and export destinations. The Govt. keen aptitude in finalising Free Trade Agreements (FTAs) and supply chain repositioning strengthen its trades to further levels. Also certain important policies Government is now adopting like National missions in semiconductors, green hydrogen, advanced electronics, and clean energy are laying foundations for new industrial ecosystems. The current Global Uncertainty from Ukraine and Gulf Wars is posing Trade policy shifts and geopolitical flux may affect exports and energy security. Indias economy in 2026 is resilient, fast-growing, and increasingly innovation-driven, with agriculture stabilizing rural demand, manufacturing gaining strength, and services anchoring global integration. The focus on next-generation industries and reforms positions India to consolidate its economic maturity while navigating global uncertainties.

Indias chemical industry is one of the countrys fastest-growing sectors, ranked sixth globally and third in Asia, with a market size projected to cross USD 300 billion by 2030. It plays a crucial role in supporting industries like agriculture, pharmaceuticals, textiles, construction, and electronics.

Especially the chlor-alkali industry in India valued at around USD 2.5 billion in 2025 and projected to reach USD 3.6 billion by 2034, driven by demand for chlorine, caustic soda, and soda ash across water treatment, PVC production, textiles, and alumina refining. Rising urbanization, infrastructure projects, and government initiatives like the Jal Jeevan Mission are major growth drivers.

The major products of the company are Caustic Soda, Caustic Potash, Chloromethanes and other allied products. The Indian Caustic Soda industry plays a significant part of countrys economy. Major areas of consumption of Caustic Soda are Aluminium, Inorganics, Textiles, Soaps and detergents, pharmaceuticals, paper etc., areas. Caustic Soda market is divided into Caustic Lye and Flakes. In India, lye market is leading. Caustic Soda industry in the country faces several challenges like global market dynamics, environmental regulations, Imports competition, waste management etc. Though the Indian Caustic Soda has embraced cleaner Membrane Cell Technology, still the country depends on import of this technology. The high tariff rates in the country is one of the main concern for Caustic Industry and power being the main cost of production is another concern.

Chlorine is a joint product which emerges along with Caustic Soda production. The chlorine market in India is experiencing significant growth with its increase in demand from water treatment, pharmaceuticals and from other chemicals manufacture. The main uses of chlorine includes disinfection of water, bleaching materials, production of plastics, usage in pharma industry, and dyes. Chlorine consumption/commercial disposal will have direct impact on caustic soda production.

Hydrochloric Acid is another product in Caustic Soda Industry and is used in steel pickling, water treatment, manufacture of polyethylene, chloride compounds etc. For the past few years chlorine and Hydrochloric Acid market is undergoing a stress in pricing.

Another key product being Potassium Hydroxide (Caustic Potash) is used in many industries like fertilisers, detergents, food and beverages and in manufacture of other chemicals like potassium carbonate, etc. Product is manufactured through electrolysis process using potassium chloride solution. The raw material (potassium chloride) is to be imported in India.

Another important product group of the company is Chloromethanes. It is an organic compound and finds application in refrigerants, automobiles, construction, personal care products, silicon polymers, coating, pharmaceuticals etc. Raw material, chlorine is available within the company as a joint product in Caustic Soda manufacture.

Fatty Acids and Castor Oil derivatives, of oil segment of the company are operated relatively at lower scales as these products are with thin margins.

The Power plant at Bellary continues to be under closure with expiry of power purchase agreement with Karnataka Electricity Authorities. Company is studying measures for disposal or otherwise of the unit.

The Company has achieved a Gross Turnover of Rs.2245.04 Cr against previous year (2024-25) Turnover of Rs.2026.47 Cr. Further, the company has produced 459484 MTs of Chemicals consisting of Caustic Soda, Potassium Hydroxide and Chloromethanes derivatives in current year (2025-26) against previous year production (2024-25) of 407894 MTs. The net profit before tax for current year stood at Rs. 178.48 Cr compared to that of Rs. 125.55 Cr for previous year.

In order to have better quality of Salt, the raw material for Caustic Soda production the company has resorted to procurement of same from Gujarat belt incurring increased transportation cost. All inputs used in manufacture are mainly sourced locally except Potassium Chloride the raw material for Caustic Potash.

Power being major ingredient of total cost the company is giving main thrust to cost reduction in power front. During the year the company has installed 20 MW (upto previous year 37.90 MW) Solar Power Plant adjacent to the Factory. Plans are in anvil for total increase of the capacity to 100 MW in stages. Considering the importance of solar green power in protecting environment and sustainability, the company has given more thrust in this area. For the year 2025-26 the company has generated aggregate solar power of 725.99 MWH (for previous year 2024-25 - 43541 MWH) and the same is used internally by the company. Your management is happy to inform that it will put relentless efforts towards solar power in future as it will be only the savior having multiple benefits.

Segment-wise performance together with discussion on financial performance with respect to operational performance has been dealt with in the Directors Report which should be treated as forming part of this Management Discussion and Analysis.

The Company maintained same Credit Rating of CARE A with the "Outlook" of Stable for long term bank facilities and CARE A with the "Outlook" of Stable for Short Term Bank facilities, awarded by M/s. CARE Rating Limited. Company is working in a direction to improve the rating further.

Details of Financial Ratio Increase/Decrease when compared to previous years (2025-26/2024-25). Overall variances in ratios is the result of better performance in main products of the company.

(*) Note : In general the financial performance of the Company for the year 2025-26 is by and large

compared to year 2024-25 is good for the reasons explained in Directors Report. Due to this factor, the financial Ratios for the year 2025-26 compared to its previous year are showing favourable variance.

The Company has established an appropriate system of internal control to ensure that there exists a proper control over all the transactions and that all its assets are properly safeguarded and not exposed to risk arising out of unauthorized use or disposal. Internal Audit is conducted at all for all the key areas of business. The Internal Control System is supplemented by a programme of Internal Audits to ensure that the assets are properly accounted for and the business operations are conducted in adherence as laid down in policies and procedures. The Internal Audit is oriented towards review of controls and operational improvements.

Relations with the employees remained cordial in general throughout the year. In order to optimise the contribution of the employees to the Companys business and operations, in-house training is given to the employees to induce contribution to productivity increase and development programmes for all levels of employees have been devised. Occupational Health Safety and Environmental Management are given utmost importance. As at 31^st March, 2026 the employee strength (on permanent rolls) of the Company was 1043.

Statement in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be ‘forward-looking statements within the meaning of applicable securities laws and regulations and such forward-looking statements involve risks and uncertainties. Actual results could differ materially from those expressed or implied important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the Countries in which the Company conducts business and other incidental factors. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new informations, future events, or otherwise. Readers are cautioned not to place undue reliance on these forward looking statements that speaks only as of their dates.