Yasho Industries Ltd Management Discussions

ECONOMY OVERVIEW GLOBAL ECONOMY

The global economy is steadily adapting to a world thats constantly shifting - shaped by geopolitical tensions, rapid technological progress and changing expectations from consumers and policymakers alike. In 2024, global growth eased to 3.3%, compared to 3.5% the year before, as uncertainty continued to affect business confidence and overall pace. In 2024, ongoing conflicts - ranging from the

Russia-Ukraine war and unrest in the Middle East, to border tensions between India and Pakistan - disrupted global supply chains, pushed up energy prices and kept inflation stubbornly high. Energy demand rose by 2.2%, surpassing the decades average due to extreme weather, though it still lagged behind economic output. At the same time, shifting supply chains, new trade barriers and evolving sanctions created roadblocks for global commerce, prompting businesses and investors to rethink their long-term strategies.

In the face of these challenges, policymakers responded with a mix of tools to stabilise their economies and support recovery. Central banks like the U.S. Federal Reserve and the European Central Bank kept interest rates high for much of the year to bring inflation under control, before cautiously pivoting as inflationary pressures began to ease. On the ground, governments ramped up infrastructure spending and rolled out targeted relief like energy subsidies to support demand and help families manage rising costs. However, growth remained uneven with advanced economies saw modest gains of around 1.8%, led by the U.S., while emerging and developing economies grew more strongly at 4.3%, powered by resilient consumption and reform-led growth.

Outlook

The global economy is on track for a steady recovery, with growth expected to reach 2.8% in 2025 and edge up to 3.0% by 2026. While advanced economies are likely to grow at a slower pace - around 1.4% in 2025 and 1.5% in 2026 - this reflects a period of stability, supported by consistent consumer spending and a careful unwinding of tight monetary policies. In contrast, emerging and developing economies are set to grow faster, with projections of 3.7% and 3.9% over the next two years. This stronger momentum is being fuelled by younger populations, rising demand focus on self-reliance through local manufacturing and trade diversification. Countries across South and Southeast Asia are especially well-positioned to lead this next phase of global growth, thanks to their dynamic markets and reform-driven outlook. Looking ahead, with inflation expected to ease to 4.3% in 2025 and 3.6% in 2026, interest rate cuts are likely in many parts of the world, although the pace will vary. The U.S. may bring rates down to around 4% by the end of 2025, the European Central Bank could cut by about 100 basis points and Japan may gradually lift rates toward a more neutral 1.5%. Trade continues to face challenges from rising protectionism and retaliatory tariffs, particularly after recent U.S. actions. However, there are still reasons to be optimistic. With smart policymaking, cross-border collaboration and continued innovation, the global economy is well-placed to navigate headwinds and move toward a more inclusive and sustainable future.

INDIAN ECONOMY

The Indian economy continues to stand out globally, owing to its strong domestic demand, ongoing reforms and stable macroeconomic foundations. While growth moderated to 6.5% in FY 2024-25 from 9.2% the previous year, as reported by the Ministry of Statistics and Programme Implementation (MOSPI), India still remained one of the fastest-growing major economies. This slowdown was shaped by a mix of global and local challenges - ranging from high food inflation and a widening trade deficit to softer urban consumption, slower private investments and limited job creation. Despite that, the economy held steady, supported by increased government spending on infrastructure, a gradual revival in rural demand and consistent performance in key sectors. Together, these factors underscored Indias growing capacity to navigate global headwinds while staying focussed on long-term development goals.

Indias economy continued to progress despite the pressure, supported by strategic government spending and strong performance across sectors. Spending on transport, renewable energy and affordable housing helped maintain growth momentum and protect against external shocks. Robust GST collections reflected steady consumption and improving tax compliance, while the ongoing digital transformation and a thriving startup ecosystem brought innovation and agility to the forefront. Inflation, however, remained a concern, largely influenced by volatile global commodity prices and supply chain disruptions. CPI inflation averaged 4.6% in FY 2024-25, a slight improvement from 5.4% the year before. To address this, the Reserve Bank of India gradually reduced interest rates by 100 basis points across three policy meetings starting February 2025, bringing the repo rate down to 5.5% by June. This measured approach aimed to support liquidity, ease inflationary pressures and reinforce the ongoing recovery without compromising financial stability.

Outlook

Indias economy is expected to grow steadily at around 6.5% in FY 2025-26, holding its ground although global uncertainties continue to linger. As the global trade environment shifts, with changing tariffs and policies, some export-focussed sectors may face challenges. However, this evolving landscape is also opening up new opportunities for domestic industries to grow stronger and become more self-reliant. The governments continued push for inclusive and long-term development - through investments in infrastructure, clean energy and digital transformation - is expected to further lift productivity and attract investment. With a robust foundation, clear policy direction and a focus on building for the future, India is well placed to keep moving forward and maintain its position among the fastest-growing major economies.

INDUSTRY OVERVIEW

Global Chemical Industry

The global chemical industry, deeply intertwined with everyday life and critical to sectors ranging from agriculture to automotive, faced a challenging landscape in 2024. Companies across the globe contended with a mix of headwinds - weak industrial activity, economic uncertainty, labour disruptions and ongoing supply chain issues. Geopolitical tensions further complicated matters, with the prolonged Russia-Ukraine conflict, escalating U.S.-China trade tariffs and newly imposed U.S. import duties disrupting international trade flows. Meanwhile, excess capacity in China led to a supply glut, pushing prices down and intensifying competition. In response, chemical manufacturers moved quickly - driving innovation, expanding geographically and supporting resilience to navigate growing global uncertainties.

The global economic slowdown significantly impacted chemical demand, particularly in the industrial sector, which drives over 80% of consumption. Still, the industry remained resilient, with global production rising by 3.1% in 2025, slightly below the 3.5% growth in 2024. Asia-Pacific led the expansion at 4.8%, supported by gains in the Former Soviet Union (3.4%) and Africa-Middle East (2.4%). Europe began recovering with 1.9% growth, while Latin America saw a 0.8% decline. North America posted marginal growth at 0.2%, buoyed by key industrial hubs. Agricultural chemicals led product growth, followed by strong performance in specialty, inorganics and niche segments, while basic chemicals and synthetics saw gradual improvement.

Global Chemicals Production (% year-over-year)

By Country/ Region	FY 2022-23	FY 2023-24e	FY 2024-25f
World Chemical Output	1.0	3.5	3.1
North America	-0.5	0.2	2.0
Latin America	-0.5	-0.8	1.0
Europe	-8.1	1.9	1.4
Former Soviet Union (FSU)	5.3	3.4	2.8
Africa & Middle East	3.6	2.4	4.2
Asia/Pacific	4.3	4.8	3.7

Source: American Chemistry Council e = estimate f = forecast

The global chemical industry is set to carry its growth into 2025 and is expected to rise by 2.3% - reaching USD 6,324 billion, up from USD 6,182 billion in 2024. As inventory levels even out and demand strengthens across a wide mix of products, the industry looks poised to stay on a steady recovery path.

Encouragingly, this growth is expected to be more evenly spread, with 16 out of 20 key end-use sectors likely to expand. The Asia-Pacific region is expected to remain the engine of global growth, while Europe and North America are projected to see continued, though moderate, improvements. Latin America is showing signs of returning to positive territory and the Africa-Middle East region is on track to pick up pace. With global economic conditions gradually stabilising, the outlook for the chemical industry in 2025 points toward a broader and more sustained recovery.

Source: https://www.americanchemistry.com/chemistry-in-america/news-trends/blog-post/2024/chemical-production-steady-amid-weak-recovery-in-key-end-use-markets

https://www.marketsandmarkets.com/Market-Reports/global-chemical-industry-outlook-89294716.html

https://www2.deloitte.com/us/en/insights/industry/oil-and-gas/chemical-industry-outlook.html

INDIAN CHEMICAL INDUSTRY

Indias chemical industry is building strong momentum, with the market projected to grow from USD 220 billion in 2024 to nearly USD 300 billion by 2025. As the worlds sixth-largest chemical producer and the third-largest in Asia, India exports to over 175 countries, with chemicals contributing 15% to total exports as of October 2024. In FY 2024-25, chemical production rose steadily from 10.9 million tonnes in FY 2023-24 to 11.7 million tonnes, reflecting consistent expansion, while petrochemical output saw a slight decline from 22.1 million tonnes to 21.9 million tonnes. Despite this minor dip, total chemical production increased from 33.0 million tonnes in FY 2023-24 to 33.6 million tonnes in FY 2024-25, indicating a modest yet slight 2% year-on-year growth, largely driven by the chemicals segment.

Even with its strong global presence in the chemical industry, India continues to depend heavily on imports to meet nearly 45% of its petrochemical needs, pointing to a clear opportunity to strengthen domestic production. According to CHEMEXILs January 2025 report, the country exported chemicals worth USD 17.47 billion between April 2024 and January 2025, translating to 8.45 million metric tonnes (MMT). This represents a healthy year-on-year growth of 4.2% in value and 10.5% in volume. However, during the same period, chemical imports rose even higher, reaching USD 24.49 billion and 25.41 MMT, with increases of 6.7% in value and 7% in volume. These figures reflect Indias continued position as a net importer and underscore the importance of building greater self-reliance in the sector.

Indias chemical industry stands as a vital pillar of the national economy, contributing nearly 6% to the GDP and providing livelihoods to over 5 million people. To meet the growing demand, investments worth approximately USD 45 billion are already underway, with an additional USD 100 billion likely required in the coming years. As the population expands and the middle class continues to grow, demand for chemicals is rising steadily - driven by higher consumption and a shift toward cleaner, more sustainable sources of energy. By 2028, the countrys chemical production capacity is projected to increase from 257 to 310 million metric tonnes per annum (MMTPA). With supportive government policies, evolving global supply chains, a heightened focus on sustainability and the growth of specialised industrial clusters, India is well-positioned to emerge as a global hub for chemical manufacturing. Looking ahead, the sector holds the potential to reach a market size of USD 1 trillion by 2040.

Source: https://pib.gov.in/PressReleasePage.aspx?PRID=2066135#:~:text=The%20market%20size%20of%20the,during%20India%20Chem%202024%20today.

https://pib.gov.in/PressReleasePage.aspx?PRID=2034617

https://chemicals.gov.in/monthly-reports

https://chemexcil.in/uploads/files/EXPORT-IMPORT_STATEMNET_JANUARY_2025.pdf

GLOBAL SPECIALTY CHEMICAL INDUSTRY

The global specialty chemicals industry - known for its high- performance, value-added products used across sectors like electronics, automotive, agriculture and healthcare - plays a crucial role in modern industrial ecosystems. In 2023, the industry faced a 1.6% decline in market value, reflecting broader economic pressures. However, signs of recovery began to emerge in 2024, with volumes expected to grow steadily in the years ahead. Despite challenges across the wider chemical landscape, specialty chemicals have shown remarkable resilience, maintaining a stable growth trajectory. Persistently weak demand in certain markets during 2024, driven by global headwinds and destocking trends, slowed growth for several companies, including in India. Still, over the five-year period from January 2020 to January 2025 - including the difficult year of 2024 - the specialty chemicals segment outpaced the broader chemical industry in terms of value creation.

Looking forward, the specialty chemicals sector is expected to see a compound annual growth rate (CAGR) of 3.0% in volume between 2024 and 2029. The segment is set to play a pivotal role in driving the future of the global chemical industry, including mergers and acquisitions. At the same time, rising demand for sustainable, environmentally conscious solutions is reshaping the industry. The specialty chemicals market is projected to grow from USD 769.75 billion in 2024 to USD 803.61 billion in 2025 representing a Y-o-Y increase of 4.4%, driven by supply chain optimisation, sustainability efforts and rising demand for customised solutions. Looking ahead, the market is expected to reach USD 1,001.79 billion by 2029, growing at a CAGR of 5.7%, supported by smart manufacturing, eco-friendly innovations and rising demand in sectors like automotive, water treatment and personal care. Sustainable specialty chemicals alone are expected to grow by nearly 70% by 2028, reaching a market size of USD 570 billion with an 11% CAGR.

The chart illustrates a steady increase in market size from USD 769.75 billion in 2024 to USD 803.61 billion in 2025, reaching USD 1,001.79 billion by 2029, indicating sustained growth over the forecast period.

Sources: https://www.thebusinessresearchcompany.com/report/ speciality-chemicals-global-market-report#:~:text=What%20 Is%20The%20Specialty%20Chemicals,and%20tailored%20 solutions%2C%20industry%20diversification.

https://www.deloitte.com/us/en/insights/topics/economy/global-economic-outlook-2025.html

https://www.spglobal.com/_assets/documents/ratings/research/101606393.pdf

https://www.accenture.com/ae-en/insights/chemicals/future-demand-opportunities-chemicals-capture-growth

INDIAN SPECIALTY CHEMICAL INDUSTRY

Indian specialty chemicals industry faced a challenging year in 2024, with subdued demand, rising pressure from low-cost Chinese imports and weaker export performance. The influx of cheaper products from China drove prices down, putting pressure on margins across several segments. On the domestic front, the agrochemical sector was particularly affected, as erratic rainfall and high inventory levels led to cautious buying and widespread de-stocking across the supply chain. Globally,sluggish demand further slowed export recovery, adding to the industrys near-term stress.

Despite these headwinds, the long-term growth story remains intact. Valued at around USD 64.5 billion in 2024, the Indian specialty chemicals market is expected to grow to USD 92.6 billion by 2033, registering a compound annual growth rate (CAGR) of 3.8%. This growth will be supported by rising demand across key end-use industries, ongoing innovation and greater adoption of AI in research and development. Expansion in domestic manufacturing capacity will also help strengthen the sector. Meanwhile, advancements like 3D printing are paving the way for more efficient, tailored production of catalysts and packaging solutions.

Meanwhile, although many companies have emerged from the de-stocking phase, pricing pressures continue to linger due to softer-than-anticipated demand in China. As a result, suppliers are actively seeking new markets both within Asia and globally. In this environment, the China+1 strategy offers a valuable opportunity for Indian specialty chemical manufacturers, as global customers look to diversify their sourcing and reduce over-reliance on a single country.

Source: https://www.imarcgroup.com/india-specialty-chemicals-market

OPPORTUNITIES AND CHALLENGES

Opportunities

• Expanding Production Capabilities: The Indian chemical industry is well-positioned to gain from rising household consumption, increased infrastructure spending and growing disposable incomes - all of which are fuelling robust demand across key end-use sectors. This creates an encouraging landscape for building world- class manufacturing capacities, especially in high-growth segments like food and nutrition, plastics and inorganic chemicals.

• Growth of Downstream Industries: One of the primary growth catalysts for the chemical industry is the rapid development of end-use sectors like aerospace, automotive, electronics, construction and healthcare. The aerospace sector, in particular, is driving demand for high-performance materials, where specialty chemicals play a critical role in enhancing durability, thermal stability and safety. Niche segments such as personal care, pharmaceuticals, agrochemicals and electronics are also contributing significantly to industry growth, spurred by rising demand for high-value, customised formulations and performance-boosting ingredients that ensure sustained, long-term consumption.

Moreover, the growing focus on energy transition materials - such as battery chemicals and lightweight composites - continues to reinforce industry prospects, alongside stable growth in automotive and construction. Notably, around 16 of the 20 major end-use industries are projected to expand, indicating broad-based recovery and improving economic momentum.

• Advancements in R&D and Process Engineering in India: Product innovation is gaining momentum as companies ramp up investments in research and development to create high-performance, sustainable and value-added chemical solutions. These efforts are focussed on enhancing process efficiency, lowering carbon emissions and meeting the evolving demands of customers across various industries. Traditionally, India faced a considerable gap in the technical expertise required for the complex manufacturing processes involved in specialty chemicals. However, recent years have witnessed notable progress in R&D capabilities and process engineering knowledge. This transformation is positioning India as a hub of innovation in the specialty chemicals space, where technical know-how remains essential due to the sectors inherent complexity.

• Rapid Expansion of the EV Market to Propel Growth in Battery Chemicals Manufacturing: The rapid growth of the electric vehicle (EV) market is driving heightened demand for battery chemicals like lithium, nickel, cobalt and graphite. Backed by government incentives and expanding investments in domestic cell manufacturing, India is steadily building a resilient battery ecosystem. This transition offers a major growth opportunity for chemical producers to support the evolving EV value chain and help reduce reliance on imports.

• Strengthening Global Market Footprint: Indian chemical companies have laid a robust groundwork for broader global expansion. By establishing application centres, warehouses and sales offices in key international markets, the companies are enhancing customer engagement and gain greater control over the global value chain.

• Engaging in Targeted and Programmatic Mergers & Acquisitions: There is significant opportunity to move beyond primarily domestic acquisitions toward a more strategic and programmatic M&A approach. As international companies undergo restructuring due to margin pressures, Indian firms can seize the moment to acquire advanced technologies, niche capabilities and R&D platforms that support their global growth aspirations.

Challenges

• Reliance on Imported Raw Materials: Indias dependence on imported raw materials makes the chemical industry vulnerable to global price fluctuations and supply chain disruptions, potentially affecting production costs and delivery schedules.

• Rising Global Competition: The growing presence of new entrants, particularly from regions like China and the Middle East, is intensifying competition in the specialty chemicals sector. This could result in pricing pressures and a potential decline in market share for Indian companies.

• Tightening Environmental and Regulatory

Requirements: Complying with international environmental standards and regulations is increasingly important, but it can pose real challenges - especially for small and medium-sized businesses. The costs of meeting these requirements can be substantial, often stretching limited resources and making it harder for these companies to stay competitive while trying to do the right thing for the planet.

• Infrastructure and Logistics Constraints: Insufficient infrastructure - such as limited port connectivity and inconsistent power supply - can disrupt smooth production and distribution processes, ultimately impacting the industrys efficiency and global competitiveness.

• Geopolitical Uncertainty and Trade Disruptions:

Global geopolitical tensions can disrupt trade flows and supply chains, potentially slowing export momentum and impacting the earnings of Indian specialty chemical companies.

Source: https://www.imarcgroup.com/india-specialty-chemicals- market

GOVERNMENT INITIATIVES

The government has introduced specific measures to support the long-term growth of the Indian chemical industry.

Union Budget for FY 2025-26: Highlights

The Union Budget announced a range of policy measures likely to impact the chemical industry both directly and indirectly:

• Personal Income Tax Reforms: Reduced personal tax rates and exemptions up to 12 Lakhs are expected to increase disposable income, stimulating consumer spending and indirectly benefiting sectors like housing, construction and the chemical industry.

• Removal of TCS on Sale of Goods: The elimination of Tax Collected at Source (TCS) on goods sales will simplify compliance and improve working capital availability, thereby boosting operational efficiency throughout the chemical manufacturing value chain.

• Customs Duty Reductions on Key Chemicals: The

Basic Customs Duty (BCD) on chemicals like Aminophylline and Trimethoprim has been reduced from 10% to 7.5%. This reduction is anticipated to lower production costs, enhance competitiveness and stimulate investment and innovation in the sector.

• Phosphoric Acid Imports: Starting May 01, 2025, the Basic Customs Duty on phosphoric acid imports has been reduced from 20% to 7.5%, standardising rates across all countries - including the U.S., which earlier faced a 10% duty. This uniform rate streamlines the import process, enhances cost efficiency for domestic manufacturers and promotes a more competitive market landscape.

• Production-Linked Incentive (PLI): The government approved a Production-Linked Incentive (PLI) Scheme on May 12, 2021, with a total allocation of 18,100 Crore over five years, aimed at developing a competitive domestic capacity of 50 Gigawatt-hour (GWh) for Advanced Chemistry Cell (ACC) battery manufacturing. Complementing this initiative, the National Critical Mineral Mission (NCMM) was launched in January 2025 for a seven-year duration, with a budget of 16,300 Crore. The mission is expected to mobilise 18,000 Crore from the public sector and other stakeholders, focussing on establishing a secure and sustainable supply chain for critical minerals through exploration, mining, processing and recycling.

• Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs): These specialised zones are established to attract large-scale investments in the petrochemical sector. Featuring integrated infrastructure and shared services, PCPIRs target mobilising 10 Lakh Crore in investments by 2025. By serving as hubs for manufacturing and research, they strengthen the industrys capacity to meet rising demand and boost global competitiveness.

• Chemical Promotion Development Scheme (CPDS):

This programme facilitates research, surveys, workshops and seminars aimed at addressing industry challenges and nurturing growth. It promotes greater collaboration among the government, industry, academia and research institutions, driving innovation and ensuring the sector remains responsive to evolving market demands.

Collectively, these initiatives are designed to boost production capacity, promote sustainable practices and strengthen Indias position in the global chemical market. By cultivating innovation, reducing dependence on imports and enhancing industry collaboration, the budgetary measures are poised to drive economic growth through increased job creation, higher exports and the expansion of allied sectors.

Source: https://pib.gov.in/PressNoteDetails. aspx?NoteId=153454&ModuleId=3&reg=3&lang=1

https://aiaiindia.com/chemicals

https://www.indianchemicalnews.com/policy/budget-2025-impact-on-the-indian-chemical-sector-by-aashish-kasad-senior-partner-ey-india-and-national-leader-chemicals-and-agri-sector-and-pari-shah-director-ey-india-25235

https://www.indiabudget.gov.in/doc/bh1.pdf

https://chemexcil.in/circulars/viewcirculars/6361/475fa486497f44dbcffdd163b5c87008.html

https://pib.gov.in/PressReleasePage.aspx?PRID=2107825

COMPANY OVERVIEW

Yasho Industries (hereafter referred to as "Your Company" or "Yasho"), founded in 1985 by Mr. Vinod Jhaveri, is a leading player in the specialty and fine chemicals sector. Yasho began manufacturing operations in 1993 and has since evolved into one of Indias foremost chemical manufacturers. Your Company caters to customers in over 50 countries, including the USA, Europe, Asia and the Middle East, with exports contributing over 65% of its revenue in FY 2024-25. Yasho expanded its footprint by enhancing capabilities at existing facilities and commissioning a new greenfield project at Pakhajan, Dahej. Your Company also established a wholly-owned subsidiary in the United States to strengthen its regional presence. Yasho is guided by strong leadership and supported by advanced Research and Development (R&D) centres and world-class manufacturing infrastructure. Your Company is committed to innovation, sustainability and quality across its operations. Yasho operates across two major category - Consumer and Industrial - offering a diversified portfolio of 142 products. Your Companys offerings cover five key verticals: Food Antioxidants, Aroma Chemicals, Rubber Chemicals, Lubricant Additives and Specialty Chemicals.

Product Category

The company operates through two main product category:

• Consumer division

• Industrial division

In FY 2024-25, Industrial Chemicals accounted for 83% of the business, while Consumer Chemicals contributed 17%. Our diverse portfolio enables us to cater to a global customer base across the USA, Europe, Asia and the Middle East, with exports contributing approximately 65% to the total revenue in FY 2024-25.

MANUFACTURING FACILITIES

Your Company has three manufacturing units located in Gujarat Industrial Development Corporation (GIDC), Vapi and Gujarat. Your Company has a total manufacturing capability of 32,500 MT per annum, comprising 12,500 MT at its Vapi facilities and 20,000 MT at its newly commissioned Pakhajan unit. Your Company successfully completed the Pakhajan project as per schedule and commissioned it on April 09, 2024. Your Company is certified under ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018, assessed and certified by Bureau Veritas Certification Holding SAS - UK Branch, confirming compliance with management standards for chemical manufacturing. Your Company has registered specific products under the REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) Regulation, fulfilling the obligation to submit registration to the European Chemicals Agency for substances manufactured or imported in quantities of one tonne or more per year. Your Company exports its products to European countries and has completed the required REACH registrations for those products. Yasho has received multiple certifications that confirm its products meet National and International Standards, including HALAL Certification, STAR KOSHER Certification, National Sanitation Foundation (NSF) Certification, Feed Additives and Premixtures Quality System (FAMIQS) Certification, Food Safety System Certification (FSSC) Certification, Arbeitsgemeinschaft Qualitatsmanagement (AGQM) Certification, Roundtable on Sustainable Palm Oil (RSPO) Certification and Food Safety and Standards Authority of India (FSSAI) Certification.

RESEARCH & DEVELOPMENT (R&D) FACILITY

Yasho Industries places strong emphasis on Research & Development and Quality Control, which together form a core pillar of your Companys operational strength. Yasho continues to advance sustainable practices through consistent investment in cutting-edge technologies and scientific capabilities through dedicated R&D efforts. Your Company recognises innovation as a key driver of long-term progress, with strategic direction actively shaped by the promoters to align R&D efforts with evolving business needs.

Your Companys in-house testing facility features a state-of- the-art laboratory equipped with advanced instrumentation such as Atomic Absorption Spectrophotometer (AAS), Carbon, Hydrogen, Nitrogen and Sulfur (CHNS) Analyser, Differential Scanning Calorimeter (DSC), Fourier Transform Infrared Spectrophotometer (FTIR), Gas Chromatography (GC), High-Performance Liquid Chromatography (HPLC) and Refractometer and Ultraviolet (UV) Spectrophotometer. Yasho ensures that these tools enable rigorous quality control, supporting the highest standards of precision and excellence across all products.

Yasho has recently modernised its R&D infrastructure and cultivated a strong culture of innovation and continuous learning. Your Company is supported by a dedicated team of over 30 chemists who are driving several high-potential projects. Yasho remains confident that these initiatives will play a pivotal role in shaping future growth and strengthening its competitive advantage.

Yasho places the highest importance on quality in every aspect of its operations. Your Company has rigorous quality control measures in place to ensure that all products meet industry standards and exceed customer expectations. Yasho is backed by a team of experts with deep industry knowledge and experience, enabling the delivery of best-in-class technical support and guidance. Your Companys commitment to quality and service has helped build a strong customer base and long- lasting relationships.

PERFORMANCE REVIEW

Key Financials

Particulars	FY 2024-25	FY 2023-24	Y-o-Y
Revenue from Operations	66,850	59,356	13%
Other Income	875	741	18%
Total Revenue	67,725	60,097	13%
Total Material Consumed	39,006	38,011	3%
EBITDA	11,829	10,721	10%
Profit Before Tax (PBT)	902	7,672	(88%)
Profit After Tax (PAT)	611	5,794	(89%)

Variance analysis

Yasho reported a revenue of 66,850 million in FY 2024-25, compared to 59,356 million in FY 2023-24, reflecting a year- on-year (Y-o-Y) growth of 13%. This growth was primarily driven by higher capacity utilisation and improved demand across key segments. Yashos EBITDA also improved, reaching 11,829 million in FY 2024-25, up from 10,721 million in FY 2023-24 - marking a 10% Y-o-Y increase, supported by better operating leverage and product mix optimisation.

However, Yashos PAT declined sharply by 89% Y-o-Y to 611 million in FY 2024-25 from 5,794 million in FY 2023-24. This decline was primarily due to a significant rise in depreciation and interest costs. Yasho incurred depreciation of 5,006 million in FY 2024-25, compared to 1,562 million in FY 202324, owing to substantial capital investments in infrastructure and capacity expansion. Additionally, higher interest expenses further impacted profitability. As a result, both PBT and PAT witnessed a sharp decline despite growth in topline and operating performance.

Category-Wise Revenue Breakup

Your Company generated 83% of its revenue from the Industrial Chemicals segment in FY 2024-25, while Consumer Chemicals contributed 17%. Your Company witnessed a modest shift in contribution, reflecting increased traction in the Consumer Chemicals segment. Yasho continues to strengthen its consumer-facing portfolio in response to evolving market trends and demand dynamics.

Geography-wise Revenue Breakup

Yasho derived 65% of its revenue from international markets in FY 2024-25, with the remaining 35% coming from domestic sales. Your Company had a slightly different mix in FY 2023-24, with international revenue at 63% and domestic at 37%. Yashos growing international presence highlights its ability to cater to global demand and strengthen its footprint across key export geographies. Your Company remains focussed on expanding its global reach while continuing to serve the domestic market with agility and responsiveness.

Details of significant changes in key financial ratios

Key Ratios	FY 2024-25	FY 2023-24	Reason If changes are more than 25%
Debtors Turnover	4.94	5.10	-
Inventory Turnover	3.64	4.86	Inventory levels have risen since the new plant is commissioned, the same is expected to be normalised in FY 2025-26.
Interest Coverage Ratio	1.14	6.19	There is a decrease in the ratio due to lower earnings and project capitalisation during the year.
Current Ratio	1.38	1.06	The Company has optimised the Working Capital use.
Debt Equity Ratio	1.39	1.96	There is a decrease in the ratio due to ploughed back majority of the funds generated and company has raised equity with premium.
Operating Profit Margin (%)	16.12%	16.64%	-
Net Profit Margin (%)	0.90%	9.59%	There is a decrease in the ratio due to lower earnings and project capitalisation during the year.
Return on Net Worth (%)	1.43%	19.66%	There is a decrease in the ratio due to lower earnings, project capitalisation, ploughed back majority of the funds generated and company has raised equity with premium.

FUTURE OUTLOOK

Yasho observes that the global economic environment remains uncertain, with evolving geopolitical tensions and shifting policy landscapes impacting the chemical industry. Your Company expects these uncertainties to result in significant price volatility across both raw materials and finished goods, leading to a highly dynamic market environment in 2025. Yasho sees India emerging as a strategic partner of choice, supported by favourable policy measures that are strengthening the countrys role in the global supply chain. Your Company is witnessing rising global interest in partnering with India, creating a range of new opportunities across key markets.

Yasho is well-positioned to capitalise on this evolving landscape and remains optimistic about its revenue growth in FY 202526. Your Company expects this momentum to be supported by enhanced capacity utilisation, improved logistics and a sharper focus on high-margin, value-added products. FY 202425 was a transformative year for Yasho, during which it made significant investments in infrastructure, global reach and advanced technologies to lay the groundwork for long-term sustainable growth. Your Company will continue to prioritise operational efficiency, innovation, product mix optimisation and cost control - initiatives that are fully aligned with its strategic goal of delivering superior stakeholder value. Yasho remains committed to creating long-term growth through prudent financial management and focussed execution.

RISK MANAGEMENT

Risk Category	Risk	Mitigation
Business Risk	Business risks pertain to the potential for the Company to incur losses arising from uncertainties such as shifting consumer preferences, labour disruptions, increased competition, regulatory changes, technological advancements rendering processes or products obsolete and other related challenges.	The Company takes a proactive approach to identifying and assessing business risks by analysing the likelihood of potential events and their impact on operations, workforce and financial performance. Key risks are pinpointed, and appropriate mitigation strategies or alternative measures are formulated to manage potential adverse effects. Furthermore, the Company undertakes thorough evaluations of both anticipated and unexpected project costs to ensure adherence to budgetary constraints.
R&D Risks	Research and Development (R&D) is crucial for achieving sustainable growth in the specialty chemicals sector. To stay ahead of the competition, the Company must prioritise innovation and maintain a strong focus on R&D efforts.	Yasho addresses R&D-related risks through a well-defined innovation strategy that emphasises both technical and commercial viability. Every project is carefully assessed for feasibility and market fit, with active collaboration from customers, academic institutions and industry experts to align development with real-world needs. The company also ensures robust regulatory compliance, strong intellectual property safeguards and operational excellence - collectively reinforcing its R&D capabilities and driving long-term, innovation-led growth.
Foreign Currency Risk	The Company is vulnerable to foreign exchange rate fluctuations, as currency volatility can influence revenues, operating costs and overall financial performance, potentially impacting profitability.	To mitigate this risk, the Company closely monitors exchange rate trends and implements suitable hedging strategies. It uses forward contracts and other financial instruments to limit the impact of currency fluctuations. Furthermore, by maintaining a balanced portfolio of exports and imports, the Company reduces reliance on any single currency, supporting overall financial stability.
Raw Material Price Risk	Manufacturing companies frequently encounter challenges arising from raw material shortages and price volatility, which can disrupt production and affect profitability.	Yasho is actively working on diversifying its supply chain across. Today, we have an alternate in USA, Europe and Japan to China for every raw material we are importing from them. Further, we are also working with local manufacturers to produce the material in their facility in India and support the Make in India initiative.
Financial Risk	Yasho is exposed to financial risks such as foreign exchange volatility, interest rate fluctuations and liquidity constraints, all of which can influence its cost structure, cash flow management and overall financial stability.	To mitigate financial risks, Yasho adopts comprehensive hedging strategies, implements proactive liquidity management practices and conducts periodic financial stress testing and reviews to ensure resilience under varying market conditions.

HUMAN RESOURCES

Yasho recognises that a committed and talented workforce is a key driver of sustainable performance and long-term growth. Your Company considers its people to be one of its most critical assets, contributing significantly to its competitive advantage. Yasho remains dedicated to attracting, recruiting and retaining the most relevant and skilled talent from the industry. Your Company focusses on nurturing, developing, motivating and empowering its employees to enhance their skills and overall performance.

Yasho consistently strives to promote a strong culture of business ethics and social responsibility among its employees. Your Company maintained harmonious and cooperative relations with its workforce across all levels during the year. Yasho had a total of 821 permanent employees as of March 31, 2025.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has established adequate internal control procedures that are commensurate with its size and the nature of its business. Your Company has implemented clearly defined policies, guidelines and procedures that form the foundation of its internal control systems. Your Company ensures that the adequacy of these internal control systems covers all critical business processes and financial reporting mechanisms. Your Company conducts regular evaluations of these systems through both management reviews and assessments carried out by internal auditors.

Yasho ensures that internal audits are conducted at regular intervals to identify potential weaknesses and recommend improvements for enhanced operational efficiency. Yasho reviews the observations and suggestions made by the internal auditors to strengthen internal controls. Your Company places these findings before the Audit Committee, which evaluates them thoroughly to ensure timely and appropriate corrective actions are implemented.

CAUTIONARY STATEMENT

The Management Discussion and Analysis section of the Company may include forward-looking statements relating to its goals, plans and projections. However, it is important to understand that actual outcomes may differ materially from those expressed or implied. This variation may result from several influencing factors, including intense market competition, economic conditions affecting demand, supply and pricing in both domestic and international markets. Additionally, changes in government policies, tax regulations, statutory requirements and other incidental elements may have a significant impact on the Companys performance and operations.