Conviction to rise higher and stronger.

Dear Shareholders,

On completion of another year, I am pleased to connect with you, reflecting on our performance in the year gone by and what the future holds. The fiscal year 2024-25 was marked by a unique convergence of headwinds and hope. You would be delighted that your Company stayed the course to deliver a healthy, profitable growth, while continuing to build an organisation that is sharply focused on sustainable value creation for years to come. We have also been mindful to ensure a growth that is purposeful. One that drives prosperity among Communities, creates value for all stakeholders, and is planet conscious.

India: an anchor of stability and growth

The world around is changing, with prolonged geopolitical tensions. These sentiments were reflected in increasing trade barriers and uneven economic recovery. While the US and certain emerging economies witnessed healthy growth, those in Europe and the Far East witnessed a slowdown. The global economy, though, demonstrated resilience, reporting a 3.3% GDP growth supported by easing inflation.

Amidst the global turmoil, the world’s focus shifted to India for building supply chain resilience. In addition to this, India has one of the largest domestic markets with a favourable demographic. The nation is currently in the development stage, with large-scale capex being deployed in infrastructure creation, digitalisation and domestic manufacturing. These factors set the stage for India’s ascent as a global economic powerhouse. In FY 2024-25, the nation registered a GDP growth of 6.5%, and with strong fundamentals, is expected to sustain this momentum.

Industry revival and consolidation

Amidst the global trade upheaval, this year brought good news for the dyes and pigments industry. Demand revival among major consumption industries like textiles, plastic and coating, with easing inflation and softening input prices, led to volume gains and margin improvements. The textile industry witnessed steady demand, with the channel partners restocking inventory amid softening cotton and crude oil prices. The industry also witnessed an improvement in exports of ready-made garments.

As for Precipitated Silica, the industry continues to witness sustained strong demand, with its wide-ranging applications across tyre, rubber, agrochemicals, food and other industries. The automotive industry is a major consumer, and its boom continues to propel the demand for precipitated silica. Its ability to deliver strong performance and address sustainability aspects will continue to ensure its long-term relevance and value in the long term.

Repositioned for growth in the upturn

Cycles are a part of any industry. Companies that demonstrate not just financial strength, but strategic foresight and a purpose-driven approach are the ones who can lead the next wave of growth. That is the company that we have been building over the last three decades.

I can say with conviction that we have built an enduring organisation that is diverse and integrated, nimble and agile. One that has a strong portfolio and long-term customer relations. One that can maximise gains in good times and minimise margin erosion during the downside.

This happened not by chance, but through conscious, proactive efforts. Even as we had a strong business in international markets, we pushed beyond and built a domestic market. Even as we had two market-leading products in our portfolio, we saw a future in Precipitated Silica and invested in it. The business not only gave diversification, but has gradually emerged as an important long-term growth engine with approvals from leading Indian and international tyre and non-tyre players.

Our investments in better technologies are unlocking new efficiencies in manufacturing and operational excellence. We further initiated cost reduction program for major overhead, which helped overcome margin pressures while also strengthening our position to face any price cut.

The bottom line is that Aksharchem is today resilient, and we are here to stay in the long run. We endured unprecedented challenges over the last two years and yet maintained our balance sheet integrity. And as soon as the markets revived, we could make the most of the opportunity, repositioning ourselves for sustainable growth.

Sustainability Commitment

Beyond business, we have chosen to be an environmentally friendly chemicals company. Our ambition is not to have a garden in the factory; rather, to have a factory in the garden. And our actions validate this.

We have invested in zero liquid discharge, ensuring we provide the best quality products while keeping in mind the sustainability of the planet. We have installed a rooftop solar at our factory premises, and are progressing to install solar power plants across various locations to minimise carbon footprints and emissions. We have also consciously integrated cleaner alternatives in production and optimised processes to reduce waste and emissions, aspiring for a circular economy.

Furthermore, we have embedded ESG considerations into decision making, supply chain management, and product development. We are striving to imbibe safe and environmentally accountable behaviour in every employee and vendor. Our intent is clear: Aksharchem will be a company that is committed towards safety of people, planet and the society at large.

A vision for the future

The long-term fundamentals of the segments in which we operate remain strong, and we are well positioned to play a larger role in the evolving global supply chain. Our company is today sustainable, scalable and resilient, but the job is half done. It’s time to harness our strong base and pursue the next frontier of growth.

My heartfelt appreciation to all our stakeholders who are helping us shape this journey. We look forward to your continued support and confidence in us, so that we can create enduring value for generations to come.

Warm regards,

Paru M. Jaykrishna

Chairperson