UPL Ltd Management Discussions

Macro-economic overview

Measured global resilience

The global economy proved resilient in 2025, despite ongoing policy shifts and trade uncertainties, achieving a 3.4% expansion according to the International Monetary Fund

(IMF). The global inflation also moderated to 4.1%, providing major central banks with the baseline policy justification to initiate initial interest rate cuts.

This recovery trajectory faced immediate headwinds from the military conflict in West Asia at the end of February 2026.

The resulting closure of primary shipping lanes has triggered renewed supply chain vulnerabilities and upward pressure on international energy costs. Consequently, global growth is projected to decelerate slightly, while global headline inflation is forecasted to climb back to 4.4% before stabilising at 3.7% in 2027, a premium that sits structurally above pre-pandemic baselines. Accordingly, a higher-for-longer monetary stance is expected by central banks to keep borrowing cost tight. The resurgence of energy and commodity prices has caused

US inflation to return to target more gradually than other developed economies, such as Euro Area and Japan. Due to continued macroeconomic volatility, the growth trajectories were disparate across regions. According to IMF, North America has shown resilience and a growth rate of 1.9% for 2025 before accelerating to a forecast of 2.2% for 2026, whereas Europe posted a modest growth rate of 1.6% in 2025 and is projected to decelerate slightly to 1.3% in 2026 due to structural headwinds and high energy costs.

Emerging markets present a varied picture: China is forecasted to grow at 4.4% for 2026, supported by policy bank lending despite weak domestic demand. As per the World Bank Group, India remains the fastest-growing major economy, with momentum projected at 6.6% for 2026. Key risks to this outlook include the conflict in West Asia, with deeper geopolitical fragmentation and trade tensions.

Global GDP growth and inflation rate*

		GDP growth			Inflation rate
Particulars (in %)	2025	2026 (F)	2027 (F)	2025	2026 (F)	2027 (F)
World	3.4	3.1	3.2	4.1	4.4	3.7
North America	1.9	2.2	2.1	2.8	3.2	2.3
Europe	1.6	1.3	1.4	3.7	3.4	2.8
Middle East and Africa	3.2	1.1	4.8	12.3	11.8	9.1
Asia Pacific 4.9	4.4	4.2	2.7	3.7	3.3

Global food security

As the global population reaches ~8.3 billion in 2026 and continues towards a potential 10.3 billion by 2084, the strain on food systems is intensifying.# Global hunger levels have remained alarmingly high; an estimated 8.2% of the global population, faced hunger in 2024. Current projections indicate that over 600 million people worldwide could still be facing hunger in 2030, with Sub-Saharan Africa remaining a critical region of concern as it faces major tests from conflict and energy shocks.@

This growing insecurity is not just a rural issue. In recent years, while over one-third of adults in rural areas experienced moderate to severe food insecurity, the share in urban areas was approximately 25%, showing a narrowing gap. Additionally, cities face their own challenges, such as fast food proliferation, declining access to fresh produce, marginalisation of small-scale farmers and the erosion of natural ecosystems due to unchecked urban expansion. Together, these dynamics, compounded by a projected 11.8% average inflation rate in the combined

Global energy shocks and crop dynamic shifts

Energy commodity prices face a structurally higher cost floor, with overall energy indices expected to rise due to operational disruptions in West Asia. This volatile overhead has restricted the availability of vital oil and gas derivatives and critical chemical raw materials, while maritime shipping bottlenecks through the Strait of Hormuz continue to keep global food prices elevated.

Because synthetic nutrient synthesis is highly energy-intensive, the resulting fertiliser shortages regions of Middle East and Africa for 2026, underscore the urgent need for resilient, inclusive and sustainable food systems that can nourish both growing populations and future generations.^

have fundamentally reshaped on-farm economics.

Simultaneously, tariff adjustments, shifting trade partnerships and evolving China-US soybean trade dynamics introduce further macroeconomic volatility. As growers adapt by moving away from high-input cost regimes, upward pressure on manufacturing and logistics costs has sparked a notable price reversal and recovery at the ex-factory level for several active ingredients.

1. West Asia conflict and supply chain disruptions

The crisis in West Asia has introduced severe logistical and raw material constraints across the global chemical sector. Navigational gridlocks through the Strait of Hormuz, where globally traded nitrogen fertilisers normally transit, have triggered critical bottlenecks in procuring essential upstream intermediaries. These blockages forced major manufacturing hubs to heavily curtail or completely cease operations.

Simultaneously, severe container deficits have disrupted outbound shipping from East Asia due to prolonged transit delays within the conflict zone. During this period, geographically diversified companies carrying strategic safety stocks successfully protected customer delivery lines, temporarily passing input cost increases onto end-products.

Crucially, this disruption has established a higher baseline cost floor for raw chemical components. The average ex-factory spot prices for key products spiked sharply in March 2026, to reach their highest level since September 2023.

2. Tariffs and supply chain bifurcation

Evolving trade regimes have fundamentally re-routed global agrochemical channels, driving a structural diversification of input sourcing away from China to ensure supply security. In North America, a peak 55% tariff on Chinese formulations historically created a steep tax differential against Indian alternatives. Concurrently, retaliatory tariffs redirected Chinese soybean demand away from the US towards Brazil and Argentina, expanding South American broadacre acreage and boosting regional crop protection volumes. While the recent February 2026 adjustment restored a 25% tariff advantage for Indian imports, ongoing volatility in applied tariffs continues to accelerate this supply chain shift. Indian chemical operations are uniquely positioned to capture this demand and are expected to gain an even wider commercial tariff advantage on specific reciprocal-exempt technical-grade materials, provided final blending and formulation occur domestically within the US market.

Indian economy

Indias economy demonstrated exceptional resilience, achieving a growth rate of 7.7% in FY26. Private Final Consumption Expenditure (PFCE) reached a decade-high 61.5% of GDP, growing by 7% supported by robust domestic demand, income tax and GST reforms. Retail inflation remained well-contained at 3.5% as of April 2026, below the central banks 4% medium-term target despite global energy price volatility.*

The Reserve Bank of India (RBI) shifted its policy stance from accommodative to neutral after cumulative repo rate cuts throughout 2025 bringing the key lending rate down to 5.25% in December.#

Fiscal consolidation remains a priority, with the central government achieving a deficit of 4.8% in FY25 and targeting a further reduction to 4.4% for FY26. India continues to strengthen its position as a global supply chain alternative. In the chemicals sector, firms are leveraging a competitive cost base and domestic demand to build global-scale platforms, though continued investment in differentiated R&D and infrastructure remains critical for long-term dominance.

The El Ni?o factor: A polarised outlook for global agriculture

While El Nino weather pattern brings difficult conditions to farming hubs in SE Asia, India and North America, it drives strong harvest recovery across some parts of South America but with uneven impact - Argentina benefits from improved rainfall, while Brazil faces highly variable conditions. Historical evidence suggests El Ni?o years are generally less favourable for global agricultural output than neutral or La Ni?a years, with key staples such as maize, rice and wheat experiencing yield reductions across regions. Beyond direct yield impacts, this highlights the growing importance of crop protection and climate resilience technologies. Variable weather conditions contribute to elevated pest, weed and disease pressure in several markets, reinforcing demand for advanced crop protection solutions and resilient seed technologies aimed at helping growers manage increasingly volatile production environment. The increasing frequency and intensity of extreme weather events are expected to heighten the need for agricultural innovations that enhance crop resilience, protect yields and support global food security. Technologies that improve productivity while enabling sustainable use of resources will become increasingly critical to the long-term resilience of global food systems.

Enduring strength of Indias agricultural sector

India stands tall as a significant contributor to the global agricultural sector, with approximately 43% of its population relying on it as a primary source of livelihood in 2025.* The country maintains its global leadership with the worlds largest areas under wheat, rice and cotton cultivation, while remaining the top producer of milk, pulses and spices. The sector is well-poised for growth, steadily enhancing its footprint in global food trade, with agricultural exports now exceeding $50 billion annually. According to the Economic Survey 2025-26, the agriculture sector has displayed resilience, registering a growth rate of 4.6% in FY26. This momentum reflects the impact of sustained government efforts to boost productivity, encourage high-value horticulture, which now accounts for a third of agricultural GVA and enhance farmer incomes through digital marketplaces like e-NAM. Agriculture remains a cornerstone of inclusive and sustainable economic progress toward the vision of Viksit Bharat. For the upcoming Kharif season, crops such as paddy, pulses (tur and moong) and oilseeds (soybean and groundnut), provide an immediate volume pull for targeted crop protection inputs. However, this momentum may partially be countered by area contractions in maize and sugarcane due to shifting farmer choice and relative crop economics.

Industry overview

Focus area	Key industry dynamics
Market cycle Inventory and pricing	2025 nearly flat, steady volume recovery offset by lower prices and FX impact. Global channel destocking over and oversupply has cleared. Prices remain low, but stable for most AIs.
Sourcing dynamics	Chinas supply and technical pricing remain key factors. Global supply chain realignment for structural cost-effectiveness, supply security and geographic risk diversification.
Segment strategy	Dominated by post-patent volumes, prompting discovery-focused MNC majors to maintain participation in this segment.

Transition continues as volumes recover and prices stabilise

The global crop protection volumes are improving as channel de-stocking nears completion. However, pricing pressure persists, particularly in herbicides driven by subdued farm economics, intense competition and continued oversupply from China. Against this backdrop, innovation in formulation, strong grower relationships and integrated solutions offerings remain key differentiators. Companies with differentiated portfolios, biological solutions and premium seed genetics and traits will continue to demonstrate stronger pricing power.

Global pricing is set to reflect higher raw material costs, potentially increasing input prices for growers. This may lead to shifts between molecules driving commercial rebalancing across portfolios as growers optimise spending to preserve margins.

The grower market for agrochemicals globally was valued at ~$78 billion* (including biocontrols) in 2025, calculated at ex-manufacturer prices. The market continues its steady recovery with an initial projected baseline expansion in low-single digit, influenced by a price impact and a modest volume increase, demonstrating resilience as supply chains become increasingly synchronised with real-time on-farm consumption.

Importantly, the deflationary cycle for key generics appears to be moderating, supported by higher energy costs, raw-material inflation, tighter Chinese export economics and Chinas reintroduction of export VAT on select molecules.

However, manufacturers remain cautious: near-term outlook assumes minimal pricing recovery despite these early signs of stabilisation and profitability in the second half of 2026 is widely seen as dependent on successful price pass-through.

stabilise

A resilient volume base, moderating deflationary cycle and continued innovation and cost discipline point to gradual price normalisation through 2026, with the industry increasingly pivoting towards differentiated formulations, biologicals and specialty solutions. The principal swing factors remain the pace of price pass-through and the trajectory of energy and input costs tied to West Asia crisis, the interplay of which will determine the profitability for the year.

Among crop markets, canola / soybean, cereals and corn showed growth, boosted by positive crop weather conditions in Europe, increased area for soybean in Brazil and corn in the USA.

2025 Crop protection market split by crop*	2025 market share (% of total)	YoY change vs 2024 (%)
Fruit and vegetables	20.0	(2.0)
Soybean	17.7	2.4
Cereals	15.8	1.3
Corn	13.8	1.2
Rice	11.1	(4.1)
Cotton	5.2	(0.2)
Sugar crops	4.3	(3.3)
Canola / rapeseed	3.4	2.8
Sunflower	1.8	6.7
Other crops	6.9	2.5
Total	100.0	Flat

Among key regions, South America is set to lead global growth supported by improving market fundamentals. Similarly, the EMEA region anticipates robust growth, supported by favourable currency tailwinds and better pricing. Meanwhile, market realities remain tempered by challenging agri-economics in North America, where maize areas are projected to decline. Globally, adverse weather and geopolitical events remain critical factors.

Crucially, while El Ni?o climate shocks present stark region-specific challenges, their net impact on global agricultural output remains largely counterbalanced by simultaneous volume recoveries in other farming corridors. Supported by this geographical diversification, the global industry is successfully grounding its operations in an era of predictable, demand-driven inventory flows.

Structural price recovery: China transitions from volume to managed supply

The implementation of aggressive regulatory and fiscal reforms in China has established a price stabilisation signal for the global crop protection industry, bringing an end to three years of intense pricing-led margin compression driven by massive oversupply. This policy pivot is structurally raising the cost floor for Chinese exporters through a combination of strict anti-involution measures and the removal of export tax rebates on a broad range of chemical sets. This fiscal pressure is further reinforced by the January 2026 one product, one certificate registration regime, alongside strict 2026 2030 restrictions on greenfield petrochemical capacity permits as the country moves toward its post-2030 carbon peaking targets. Active ingredient prices are finding an overall reliable baseline that supports a gradual, long-awaited market value recovery through 2026.

Biologicals growing fast but remain a niche sector

The biologicals industry continued to demonstrate resilience in 2025 despite ongoing headwinds supported by improved weather conditions, expanded crop plantings in key markets and increasing government focus on food security, sustainability and input-use efficiency. Global biologicals growth is estimated to have accelerated to the mid-to-high single digits, with Brazil remaining a key growth engine, supported by expanding soybean and maize acreage, the implementation of the Bioinputs Law and policy measures promoting greater adoption of biological inputs. In Europe, regulatory reforms aimed at simplifying and accelerating biocontrol approvals are expected to improve market access, while the gradual loss of conventional chemistries continues to support biological adoption. India remains a structurally attractive growth market, driven by favourable crop production trends, sustainability initiatives and increasing adoption of precision agriculture, despite short-term regulatory transition challenges. In North America, elevated fertiliser costs are strengthening demand for biostimulants focused on nutrient-use efficiency, reinforcing the sectors role in improving farm productivity and sustainability.

Slowly entering mainstream; decadal play/opportunity

• Broadacre adoption: Driven by proven field efficacy and climate pressures are rapidly expanding beyond specialty horticulture into major broadacre row crops.

• Regulatory tailwinds: Market access is accelerating globally, led by Brazil and Europe, mainly as insecticides, exit the market, supporting an increasing pace of biological product introductions. At the same time, climate change is accelerating adoption of sustainable cultivation practices, further reinforcing shift towards biologicals and next-generation crop protection solutions.

• R&D frontiers: Key innovation areas include nitrogen-fixing microbials, pheromones, peptide actives, RNAi formulation and artificial intelligence led natural-product discovery, alongside an increasing focus on bionematicides, plant extracts and advanced seed treatments.

• Strategic growth: Long-term growth in conventional products will be eclipsed by strong gains in biologicals. At the same time, declining soil health in several regions and volatile chemical fertiliser prices are accelerating demand for nutrient-use efficiency solutions. Providers offering seamlessly integrated conventional and biological portfolios along with nutrient-use efficiency products are best

• M&A consolidation: Global majors aggressively acquiring biological companies to secure established assets and fast-track portfolio diversification.

POST-PATENT EXPANSION RUNWAY

The global crop protection market is undergoing a structural shift, with post-patent molecules share at 84% of total market value. New active ingredient development has become increasingly expensive, costing over ~$350 million, nearly double the mid-1990s levels, while development timelines have eased to about 11.4 years (2020-23) from a peak of ~12 years. The shift away from proprietary chemistries has been accelerated by a shrinking discovery pipeline among traditional R&D majors and rising innovator overheads, with complex registration processes for a single new molecule taking up to five years in markets.

This innovation lag has opened a strong growth runway for the post-patent ecosystem, especially with a major wave of molecules expected to roll off-patent between

2026-31. The transition creates a multibillion-dollar opportunity for cost competitive manufacturers to capture large volume channels across LATAM, Asia

Pacific and Africa.

Consequently, the target addressable market for post-patent, biological and integrated players is expected to grow a notch above the overall growth of the crop protection market over the next 5 years.

Herbicide : Dominant; Standout growth segment in 2025

Following contractions in 2023 and 2024 from the global destocking cycle, the segment is experiencing a sharp price reversal in 2026. While non-selective herbicide prices have remained low for last few years, the reversal in 2026 is supported by stabilising inventories, price recovery and localised volume gains in corn and soybean along with expanded Southern Hemisphere cultivation.* For MNC majors, growth in FY26 was volume-led and broad-based across regions, anchored by non-glyphosate herbicides and a wave of newer active ingredients such as s-metolachlor, metribuzin, glufosinate and bixlozone.

LONG-TERM OUTLOOK

In countries with widespread GM adoption, herbicide use is largely dictated by embedded tolerance traits, directly boosting demand for specific active ingredients within weed management strategies. Technological innovation continues to expand these systems, recently introducing ACCase inhibitor tolerance to crops like rice, while advanced PPO-inhibiting tolerance platforms also remain under active development. The accelerating rise of weed resistance is forcing a shift away from single-trait reliance, creating substantial market opportunities for both established alternative chemistries and new product entrants.

Insecticides : Dampened by low rice and cotton use in Asia-Pacific

Driven by a global rebound in pest pressure, the insecticide segment is forecast to grow low single digits in 2026, recovering from a challenging 2025. High channel stocks and low infestations dampened in 2025, but current severe outbreaks are rapidly pulling inventory through. Japan is a major strength, where demand for rice insecticides surged due to a dramatic spike in rice stink bug densities.* In South America, growth is bolstered by Brazils record soybean area expansion and intensive focus on leafhopper (corn) and brown stink bug (soybean), while Argentinian farmers are maintaining heavy spraying to combat the black soybean pod weevil, which risks yield losses up to 70%.

LONG-TERM OUTLOOK

The insecticide sector is expected to benefit as regulations phase out low-cost legacy chemistries like organophosphates and restrict neonicotinoids, shifting demand toward higher-value alternatives. Growth will be driven by recent innovations targeting sucking pests expanding into new crops and geographies, alongside rising adoption of targeted nematicides as regulatory pressure curtails traditional fumigants. Additionally, biological insecticides and nematicides are poised for robust growth, capitalising on expanding environmental preferences and supportive regulatory trends across the forecast horizon.

Fungicides: Mixed performance in 2025 due to lower disease pressure

In 2026, the global fungicide segment is projected to grow low-single digits, recovering from a challenging 2025. Driven by a price increase and normalising weather, this turnaround reverses previous cycles hit by pricing pressures, Argentine currency devaluations and Mexican droughts. In Europe, excellent soil moisture from favourable early 2026 winter crop cycles has boosted cereal fungicide demand over previous weather-disrupted years, though forecast hot, dry summer conditions keep outlook cautious. Meanwhile, South Americas recovery is highly weather-dependent; a return to normalised rainfall is expected to trigger strong volume demand to combat Asian rust across Brazils expanding soybean fields.

LONG-TERM OUTLOOK

The fungicides market is set to increase in value due to growing demand for innovative technologies and novel modes of action required to tackle rising crop resistance challenges. The sectors trajectory is also being reshaped by regulatory factors, specifically recent high-profile market withdrawals of affordable, multi-contact fungicides that historically provided broad-spectrum disease and resistance management. Their absence is opening clear commercial opportunities for advanced, targeted solutions to fill the resulting market gap. site

Crop protection across key markets

The global crop protection market is navigating a complex landscape of recovery and volatility in 2025 and 2026.

Following the significant destocking and pricing pressures of 2024, the current environment is bolstered by stabilising agrochemical prices and more synchronised inventory levels across the value chain. In 2025, the grower end-market for Europe showed growth, supported by biologicals uptake and favourable cropping, along with LATAM, while Asia Pacific declined.

For MNCs, NAM was positively led by branded herbicide volumes, biologicals and new active ingredients benefiting from completed channel destocking.

In North America, the agricultural sector remains under pressure from subdued commodity prices and high production costs and a weak farm economy with USDA forecasting continued pressure on US crop input spending. In Central and South America, market dynamics are heavily influenced by Brazils record soybean expansion and a notable recovery in Argentina, where favourable weather and a return to normal crop areas are supporting robust demand for herbicides and insecticides.* However, a weak farm economy in Brazil and high borrowing costs constrain farmer credit. Europes market, while still managing erratic weather and the withdrawal of older chemistries, is seeing a return to growth supported by stable pricing and the rollout of next-generation fungicides and selective herbicides. The Asia Pacific region, is driving adoption of novel modes of action to tackle resistant pest populations.

Global seeds market to return to growth in 2026

While the crop protection segment signals continued recovery in 2026, the global seed market continues to navigate complex headwinds driven by fluctuating farm fundamentals and a highly differentiated regional landscape. In APAC, maize, rapeseed, soybean and vegetables indicate growth, but rice oversupply remains a concern for value development. In Argentina, the countrys maize and sunflower sectors are expected to grow with

~24% and 33% larger areas, respectively. Conversely, the market remains tempered by challenging agri-economics in North America, where maize acreage is projected to fall in the current cycle.

On a regional level, North America is expected to fall while all other regions rebound. This represents a complete structural reversal from the previous cycle; the traded seed market had contracted by an estimated 2.1% to roughly $47.5 billion, dragged down severely by Central & South America and Europe (low-single digit decline), a period during which North America was the only region to experience low-single digit growth. The global traded seed market is projected to demonstrate resilience, with a long-term growth forecast averaging ~1% annually through 2030.*

North America

Regional recovery was driven by distributors clearing excess inventory and shifting to a highly predictable,

just-in-time purchasing model. Recent trade agreements with China are also expected to provide some relief to US growers, with commitments to purchase supporting demand sentiment. 2026 margins face pressure from a drop in crop receipts, global commodity surpluses and dry spells in the US plains.

While the West Asia conflict has disrupted fertiliser markets, most growers have already secured their fertiliser requirements, limiting the near-term impact. In addition, a moderate El Ni?o is expected through September 2026, strengthening into early 2027 and is likely to bring higher rainfall across southern parts of North America.

Evolving dynamics in crop protection strategies

The landscape of crop protection in FY26 is undergoing a structural transformation, with the global market projected to expand at a CAGR of ~2% over the next five years. In Brazil and Argentina, the rising adoption of insect-resistant crop varieties is structurally reducing reliance on traditional insecticides, though periodic outbreaks of resistant and secondary pests continue to support demand for targeted insecticide applications in both markets. The industry is also witnessing a shift toward precision and digital agriculture. The industry is increasingly adopting precision agriculture technologies, including AI-enabled targeted spraying and variable-rate application tools, which can significantly reduce input use and application waste. At the same time, value creation is increasingly shifting toward higher-performance proprietary active ingredients and advanced formulation technologies that deliver greater efficacy, mix compatibility and sustainability benefits, commanding higher margins. The complexities are compounded by strict regulatory mandates, such as the EUs permanent ban on neonicotinoid seed treatments, which in 2026 is leaving critical gaps in pest control and driving the search for high-value alternatives like spinosad or diamide-based programmes to safeguard crop yields.

Indias crop protection market

India, the worlds fourth-largest producer of crop protection chemicals, continues to play a pivotal role in global agriculture by strengthening its foreign exchange reserves as a net exporter. In FY26, Indias crop protection market (including exports) is valued at an impressive

695 billion, accounting for roughly 13% of the global industry.* As the global spotlight intensifies on sustainable food production, the importance of Indias crop protection sector is only growing. In the face of mounting pressure to produce more with fewer resources, Indian companies have not only helped farmers enhance crop yields and reduce losses but have also positioned the country as a major exporter in this critical industry. Their contribution is especially relevant as the world transitions towards regenerative farming practices aimed at preserving environmental health while boosting productivity.

However, emerging trends such as population growth, digital transformation and the rise of direct-to-farmer models, including sales through Farmer Producer Organisations (FPOs) and e-commerce platforms, are helping bridge this gap and redefine market dynamics. In

FY26, the domestic market is estimated to have contributed

46%, while exports lead the way with a commanding 54% share. The sector is gradually increasing the share of differentiated and premium offerings while generics continue to account for the majority of industry volumes. This domestic shift towards high-value portfolios occurs alongside complex local input stresses. Driven by West Asia supply anxieties, channel replenishment and pre-Kharif stocking supported demand ahead of the season, fuelled by high demand for affordable post-patent chemistries.

This buying surge is further complicated by severe international pricing pressure. While global urea prices softened, domestic non-urea nutrient costs escalated, forcing the Government of India to increase subsidy outlays to protect grower economics.

Seasonal realities: Volume rebounds and spray windows

In FY26, Indias crop protection sector witnessed a resurgence in demand after a decline in preceding years, spurred by satisfactory reservoir levels (at 127% of normal) that bolstered volume growth. Domestic revenues rose in FY26, supported by intensive rabi sowing and healthy reservoir storage, which are driving robust agricultural output. However, despite this encouraging recovery, a decline in agrochemical prices capped revenue gains. During Q2 FY26, the domestic market faced severe headwinds due to an intense monsoon washout. Abnormal, excessive rainfall led to widespread waterlogging across primary agricultural states, disrupting critical field spray windows, suppressing product application and causing high retail product returns.

Conversely, this excessive Q2 rainfall acted as a foundational driver for a powerful second-half recovery. The resulting high residual soil moisture and healthy reservoir storage paved the way for intensive Rabi sowing, driving robust winter agricultural output and restoring volume momentum. Despite this volume rebound, a global decline in post-patent agrochemical prices capped total revenue gains. The sector continues to rely on a broad portfolio, with combination products emerging as a notable trend, while novel active ingredients consistently command a market premium. In FY26, insecticides grew slightly (weak chilli/cotton/soybean/gram, offset by maize/ rice), herbicides saw robust growth (early monsoon, paddy/wheat acreage, labour shortages); fungicides grew modestly (overcast weather, higher infestation). In FY27, an anticipated El Ni?o in H2, coinciding with the Indian monsoon, points to lower and scattered rainfall, higher pest incidence and more preventive spraying.

Insecticides and herbicides are set for healthy growth, while fungicides benefit from improved application windows if the monsoons are not too impacted. In the medium-term, the domestic market is forecast to grow, bolstered by innovative chemistries and evolving pest management needs. For FY26, margins have remained healthy as players managed cost pressures effectively.

Overall, Indias crop protection industry is poised for stable growth and improved profitability in the long-term.

Indias insecticide-led market*

Indias domestic market is dominated by insecticides. In FY25, insecticides made up roughly 52% of the market, followed by herbicides and fungicides at around 23-25%. This reverse structure is driven by Indias labour-intensive smallholder farms and high pest pressures. However, as labour shortages grow and farming mechanises, herbicides have become the fastest-growing segment, rising 6-7% in FY26 compared to just 0-1% for insecticides.

While long-term targets remain robust, Kharif (MY27P) output is projected to dip 1–2%. This contraction is driven by an El Ni?o-linked below-normal monsoon (90% of LPA), causing regional rainfall variability and heat stress that heighten pest and disease risks during critical growth stages.

While legitimate cotton seed margins are squeezed by state price controls and non-cotton field crops are anchoring financial recovery, high-yielding hybrid maize and advanced paddy varieties are delivering superior commercial returns. This momentum is strongly reinforced by a 9% YoY spike in the weighted average field crop price index in early Q2 CY26, boosting growers purchasing power for premium seeds.

Improving fundamentals support long-term growth

Industry revenues grew modestly in FY26 as post-pandemic pricing fluctuations and channel destocking normalised. This transition was shaped by structural supply dynamics in China; while post-patent oversupply and intense pricing competition persisted, the impact was less acute than in FY25 due to tighter Chinese capacity approvals lifting the global cost floor. For Indian players, this environment resulted in fewer inventory write-offs, improved plant utilisation and a margin-supportive shift toward patented, high-value specialty formulations. Looking ahead, domestic growth in FY27 is projected to gain stronger momentum, driven by resilient sowing activity, firming crop commodity prices and evolving field realities. While weather frameworks point to a below-normal monsoon forecast influenced by developing

El Ni?o conditions, this regional rainfall variability is also expected to significantly expand geographic pest and weed ranges. This elevated pest pressure will heighten the operational necessity for early-season preventive spraying, accelerating volume consumption across core crop belts.

Sector expansion will be further amplified by an aggressive pipeline of novel active ingredient (AI) launches and advanced pre-mixed formulations commanding a market premium, setting a resilient directional baseline for long-term valuation growth.

India crop protection : forces shaping the next growth cycle Opportunities

• China Plus One strategy: As global supply chains diversify, India is becoming a key alternative sourcing and manufacturing hub supplier for the West. Exports are projected to grow, supported by new trade agreements and expanded production capacity.

• Global R&D alliances: Indian firms are collaborating with international majors to launch next-generation chemistry moving the domestic industry from basic post-patent solutions to specialised technical-grade manufacturing.

• Over $3 billion off-patent near term opportunity: Significant (38 actives) going off-patent over next five years, upto 2031. This allows Indian manufacturers to dominate the emerging post-patent markets, especially in Latin America and Africa.

• Climate-Driven innovation: Rising temperatures and erratic monsoons are accelerating pest life cycles and expanding their range. This creates a surge in demand for AI-powered digital scouting and targeted green-on-green spraying solutions.

• High-Value horticulture: Labour shortages and increasing focus on export-grade fruits and vegetables are supporting adoption of herbicides, biologicals and residue-compliant crop protection solutions.

• US tariffs and INR depreciation: Should help shore up exports for Indian manufacturers, esp. to US markets.

Challenges

• Regulatory Reform (Pesticides Management Bill, 2025): India has proposed a new Pesticides Management Bill to replace the Insecticides Act, 1968, introducing greater digitalisation, traceability and transparency in pesticide regulation, alongside stronger penalties for spurious and substandard products. The proposed framework also strengthens the governments ability to review and restrict pesticides based on evolving health, environmental and risk assessments.

• Chinas Export "Involution": Chinas massive production overcapacity persists. State-supported Chinese firms are selling at near-cost prices, effectively capping price recovery and margins for Indian exporters in global generic markets.

• Climate and monsoon volatility: Erratic shifts between El Ni?o and La Ni?a are disrupting traditional spray schedules. In 2026, below-normal monsoon forecasts alongside record-high reservoir levels have created extreme regional consumption gaps.

• Innovation lag and resistance: Industry bodies have flagged an innovation gap due to the lack of Regulatory Data Protection (RDP). This forces reliance on older chemistries, which accelerates pest resistance and makes it harder to meet strict EU residue norms.

Company overview

UPL is a leading global provider of sustainable agricultural products and solutions, serving growers in more than 140 countries with an annual revenue of $6 billion. The Company operates on an agile, pure-play platform model designed to drive innovation, capital discipline and food security across the entire agrifood value chain. Recognised globally for its environmental, social and governance leadership, UPL holds the top sustainability ranking in its sector, pioneering climate-smart initiatives like agricultural carbon credit programmes and biological footprint expansion on the world stage. The Companys operations are divided into four distinct business segments tailored to specific agricultural and chemical markets: UPL Corporation handles the international crop protection business, focusing on high-value differentiated and natural biological solutions; UPL

SAS drives the domestic crop protection and robust brand portfolios specifically for the Indian market; Advanta

Enterprises operates as a global seed powerhouse specialising in climate-resilient hybrids, newly scaling its reach through the strategic integration of DECCO post-harvest technologies; and SUPERFORM Chemistries serves as the groups highly competitive specialty chemical manufacturing arm, rapidly scaling contract manufacturing across pharmaceutical, mining and industrial sectors.

The connected field: Driving innovation at the intersection of seeds, biologicals and data

The future of agricultural crop science belongs to platforms that can seamlessly combine elite plant genetics, natural biological inputs and real-time digital field intelligence into a single, cohesive user experience. By linking our high-performing Advanta seed varieties with our Natural Plant Protection (NPP) portfolio and direct-to-grower digital tools like nurture.farm, we have unlocked an incredibly asset-light path to market leadership. This unified system acts through three distinct engines: Advanta channels significant investment of its top-line revenue into R&D to build climate-smart, non-GM hybrids that naturally withstand extreme heat and drought stress; our biological division deploys residue-free, eco-friendly inputs like Nuvita? to revitalise soil health; and our data applications provide precision advisory alerts that help growers defeat labour shortages and optimise field applications by successfully bridging the historic gap between seeds and crop chemistry, UPL delivers superior, climate-resilient crop yields for growers while fundamentally insulating our corporate margins and upgrading our premium product mix.

Financial review

UPL recorded a year of broad-based volume gains pushed profitability up significantly faster, which sharply expanded underlying operating margins. Crucially, the group translated these profits into healthy free cash flows, allowing them to aggressively pay down debt and lower overall balance sheet risk.

FY26 platform-wise revenue*,# (in crore)

FY26 was a year of resilient, broad-based platform growth, with isolated flatness in the India crop protection business driven purely by monsoon and input-price effects while profitability held firm.

UPL Limiteds consolidated revenue was at 51,839 crore, representing an 11% YoY growth trajectory that is led by a balanced, diversified earnings profile and effectively reducing overall exposure to individual market cycles regional disruptions. Across the platforms, global crop protection engine UPL

Corp reached 38,277 crore (+11% YoY), benefitting from volume-led expansion in core herbicides and fungicides across major markets despite ongoing macroeconomic uncertainties. Concurrently, global seeds platform Advanta contributed 6,837 crore (+23% YoY), maintaining its strong growth trajectory and sustaining its contribution margins, powered by massive field corn demand and the inherent strength of its technology portfolio and market positioning.

In regional operations, UPL SASs revenue stood flat at 3,212 crore, delivering a highly resilient performance that successfully preserved its revenue pool via high-margin focused brand launches and new product introductions to support profitability despite severe weather-related challenges during parts of the year. Simultaneously, SUPERFORM, our manufacturing and super specialty chemicals platform reported 10,298 crore (+1% YoY), continuing to evolve its business mix towards higher-value specialty segments; a strong 20% expansion in external Super Specialty Chemicals (SSC) sales safely offset the pass-through cost optimisation drop in its internal Active Ingredients (AI) segment. This rising contribution from specialty chemicals, advanced chemistries and downstream derivatives is strengthening the quality of earnings and is expected to become an increasingly important driver of growth and profitability over time.

FY26 region-wise revenue (in crore)

Geographically, performance was strong across all regions, led by volume expansion in Brazils fungicides and herbicides, with additional support from Argentinas herbicides and field corn segments. North America achieved strong growth driven by higher herbicide and fungicide volumes despite tariff-related uncertainties, while the European market was propelled by herbicide and fungicide applications alongside Natural Plant Protection (NPP) support and a favourable foreign exchange impact. Meanwhile, operations in India were driven primarily by the field corn seeds segment and the

Rest of the World (ROW) region recorded robust growth across Africa and Southeast Asia.

Strong FY26 delivery with PBT ~4x and Operational PATMI >2.5x vs LY

Particulars (in crore)	FY25	FY26	Change YoY
Revenue	46,637	51,839	11%
Contribution	18,173	21,338	17%
Contribution Margin (%)	39.0%	41.2%	220 bps
SG&A	10,049	11,750	17%
EBITDA	8,124	9,588	18%
EBITDA Margin (%)	17.4%	18.5%	110 bps
Other (income)	(135)	(166)	n.m.
Depreciation and amortisation expenses	2,750	3,244	18%
Net exchange difference	710	644	(9%)
Share of loss/ (profit) from associates and JVs	472	194	(59%)
Exceptional items expense/ (income)	408	(61)	n.m.
Netfinance	3,090	2,577	(17%)
PBT	830	3,157	281%
Taxation	9	937	n.m.
PAT	820	2,220	171%
Non-controlling interests	(77)	298	n.m.
PATMI	898	1,921	114%
Operational PATMI*	714	1,860	161%

FY26 marked a step-up in the quality of earnings, with EBITDA increasing 18% to 9,588 crore, supported by a 220-bps expansion in contribution margin to 41.2%. This operating improvement was complemented by tighter financial discipline below EBITDA, where key cost lines reduced by around 1,300 crore, or 28% YoY, helping PBT rise nearly 4x to 3,157 crore. Together, stronger margins, disciplined capital allocation and prudent financial management translated into a much sharper bottom-line performance, with operational PATMI improving to 2.5x of last year.

*FY25 had a reversal of provision for tax of 592 crore on account of favourable order from appellate authority; tax reversal gain for FY25 is not considered here.

Balance sheet

Particulars (in crore)	FY25	FY26	Change vs Mar25	Change vs Mar25 ($ million)
Uses of Capital
Fixed Capital#	41,935	45,891	3,955	(67)
Right-of-use assets	1,324	1,440	116	(3)
Working capital	6,764	8,119	1,355	65
Cash and Bank balance (incl. current investments)	9,856	6,720	(3,136)	(444)
Others	3,048	2,675	(373)	(75)
Total	62,927	64,844	1,917	(525)
Sources of Capital
Total Equity	29,214	34,696	5,481	241
Non-controlling interests (incl. perp bond)	8,614	6,573	(2,041)	(315)
Short-term debt	5,451	6,511	1,060	49
Long-term debt	18,263	15,535	(2,729)	(499)
Right of use lease liabilities	1,385	1,530	145	(1)
Total	62,927	64,844	1,917	(525)

UPL materially strengthened its financial position and enhanced its financial flexibility by reducing gross debt to by $850 million and net debt by $405 million by the end of FY26. Over the year, the group achieved a major deleveraging milestone by repaying approximately $500 million debt obligations (considering perpetual bonds as debt) and the full redemption of a $400 million perpetual bond using internal cash accruals. Crucially, these substantial balance sheet repayments were completed while seamlessly continuing to fund the groups ongoing operational and capital expenditure requirements. Moreover, the Company has re-financed its short-term liabilities of March 2026 payable to March 2029 with better commercial rates.

Net Working Capital (NWC) days rangebound versus LY, despite stretched base from LY

Over the last two years, UPL prioritised capital productivity by implementing tighter inventory management, stronger receivables collections and enhanced process discipline across the value chain. This rigorous focus allowed the Company to deliver double-digit revenue growth while keeping its working capital cycle exceptionally efficient at around 57 days, representing a marginal increase of only four days and remaining at among the strongest efficiency levels in the Companys history. In a highly seasonal industry prone to extended credit cycles, this continued focus on cash conversion has successfully built a far more efficient and resilient operating model.

Broad-based improvement in cash flow

Particulars (in crore)	FY24	FY25	FY26	Change vs. LY
EBITDA ? non-cash items*	3,609	6,907	8,959	2,051
Changes in working capital	(748)	3,093	(1,224)	(4,317)
Other non-current & current assets, liab. & FCTR	76	662	938	276
NetOperatingcash	2,937	10,662	8,672	(1,990)
Income tax paid	(1,143)	(983)	(571)	412
Capex	(1,955)	(1,254)	(2,352)	(1,098)
Investments	(593)	(871)	(156)	715
Free cash flow to firm (FCFF)	(754)	7,555	5,593	(1,962)
Net interest paid	(3,136)	(3,027)	(2,367)	660
Free cash flow to equity (FCFE)#	(3,890)	4,528	3,226	(1,302)
FCFE adjusted for "changes in working capital#	(3,142)	1,435	4,450	3,015

A key highlight this year is that every structural component of our cash flow has improved over the previous year.

EBITDA ? non-cash items rose by more than 2,000 crore, while interest costs, tax costs, and other balance sheet items such as non-current and current assets all reduced meaningfully. Across the Board, each element of the cash flow has delivered stronger than last year.

Given the seasonal nature of our business, cash flow is best assessed on a working capital-adjusted basis. The working capital cycle currently stands at around 57 days. Typically, the cycle lengthens through Q1 and Q2 as net debt builds, remains largely flat in Q3, and sees a significant release in Q4, when close to a billion dollars of cash flow is freed up each year. Viewed on this adjusted basis, the underlying cash generation of the business is robust.

Key financial ratios

Key financial ratios
Particulars	FY25	FY26
Current Ratio	1.7x	1.5x
Debtors Turnover Ratio	3.0x	3.0x
Earnings per Share (EPS)	H9.6	H22.3
EBITDA / Net Interest	2.6x	3.7x
Interest Coverage Ratio	1.6x	2.2x
Inventory Turnover Ratio	3.6x	3.5x
Debt / Equity Ratio	0.6x	0.5x

We delivered across all three pillars of our financial strategy, balancing our volume-driven revenue growth of 11% with structural deleveraging that improved our net debt-to-EBITDA ratio from 2.1x to 1.6x. Enhanced quality of earnings and operating leverage expanded our operational PATMI margin from 1.5% to 3.6%, lifting our profit before tax nearly fourfold and our operational PATMI by nearly 2.5x over the year. Driven by this improved capital productivity, cash conversion, and disciplined capital allocation, our Return on Equity nearly doubled from 3.2% to 6.1%.

Risk management

Risk management is a fundamental base of UPLs strategic planning and decision-making. The business takes a preventive stance in detecting, assessing and reducing risks that might obstruct the attainment of its targets. This method safeguards its holdings, maintains its standing, guarantees legal adherence and supports stakeholder belief. The Companys Enterprise Risk Management (ERM) structure is supported by explicitly assigned tasks, governing values, uniform equipment and extensive schooling. Synced with globally accepted protocols like ISO

31000 and COSO, the firms strong ERM process advances a climate of autonomy, prediction and uniformity in risk management. By integrating this structure throughout the entity, UPL is fully prepared to handle existing and future threats, while grabbing strategic possibilities to foster long-term wealth and stability.

Human resources

For UPL, people are vital to the Companys victory.

Acknowledging human talent as a main engine of lasting expansion, UPL builds a spirit based on creativity, partnership and constant education to lure, improve and keep superior experts through its world activities.

The Companys staff approach encourages variety and belonging while offering workers with strong possibilities for schooling and advancement. From executive cultivation and replacement charting to extensive health programmes, UPL assists its employees and contractors during every phase of their career. Interaction is also bolstered via frequent critique outlets, honest dialogue and significant appreciation schemes. By valuing home-job harmony, security and attractive prizes, UPL builds a vibrant and helpful atmosphere where people may flourish. Through steady spending in its staff and matching their progress with the Companys aims, UPL is growing a modern-capable workforce agile in steering enduring results.

Cautionary statement

The statements in the Management Discussion and Analysis section with regard to projections, estimates and expectations have been made as per the Companys expectations, anticipations and experience. The achievement of results is subject to risks, uncertainties and less-than-accurate assumptions. Market data and information are gathered from various published and unpublished reports. Their accuracy, reliability and completeness cannot be assured.