Agarwal Toughened Glass India Ltd Management Discussions

Pursuant to SEBI (LODR) Regulations, 2015, your Directors have the pleasure in presenting the Management Discussion and Analysis Report for the year ended on March 31, 2025.

INDUSTRY OVERVIEW AND DEVELOPMENTS

Global Context : The global flat glass market has been experiencing steady growth driven by rising demand in construction and automotive applications. In 2023, the flat glass market was valued at around USD 305?€“311 billion, and it is projected to grow at a CAGR of roughly 4?€“5% through 2030 . Notably, tempered (toughened) glass dominates a significant share of the flat glass market revenue, owing to its widespread use in building façades and automotive windows . Sustainability trends are also shaping global demand: there is increasing implementation of energy-saving building codes worldwide, which encourages the use of high-performance glass for better insulation and efficiency . Additionally, major investments in infrastructure in regions like the Middle East (e.g. Gulf countries) are expected to create huge demand for processed flat glass (for windows, facades, interiors) in the coming years as large-scale construction projects (airports, rail networks, commercial complexes) come to fruition . This international backdrop presents growth opportunities for glass manufacturers and exporters.

Indian Market : India is one of the fastest-growing markets for glass due to rapid urbanization, infrastructural development, and growth in end-user industries. The construction sector in India, which is the largest consumer of flat glass, is witnessing robust expansion, propelled by government-led initiatives and private sector development. Major metropolitan areas (Delhi, Mumbai, Kolkata, etc.) are seeing surging demand for architectural glass as modern high-rise buildings increasingly feature glass facades, windows and doors for aesthetic and energy-conservation reasons . The Smart Cities Mission and massive infrastructure projects like new airports, metro rail networks, and the modernization of railway stations are further boosting the need for value-added glass (e.g. tempered, laminated, insulated glass) in public infrastructure . Moreover, the rise in premium residential and commercial real estate (with trends like larger glass windows, façade glazing and daylight-friendly designs) has increased the glass-to-wall ratio in buildings, thereby driving higher glass consumption per project .

Other contributors to industry growth include the automotive sector and renewable energy. Indias automotive industry is rebounding and transitioning toward electric vehicles, which is expected to keep demand strong for automotive safety glass. Generally an overall rise in vehicle production (aided by supportive policies like tax cuts on EVs) also lifts demand for toughened glass used in vehicles . On the renewable front, the expansion of solar energy projects has spurred demand for solar glass; while the company does not produce solar panels, this trend reflects a broader strengthening of the glass manufacturing ecosystem. Overall, the Indian flat glass market is in a growth phase, with one report estimating a double-digit CAGR (around 12%) in domestic flat glass demand up to FY 2027-28 driven by these multiple factors .

COMPANY OVERVIEW

Your Company is engaged in the business of manufacturing of premium toughened glasses. We process various types of float glass to produce a diverse range of value-added toughened products, including laminated, frosted, tinted, reflective, clear, and double-glazed toughened glass. Our manufacturing processes ensure compliance with the quality standards established by the Bureau of Indian Standards (BIS), and our facilities are ISO 9001:2015 certified. Our toughened glass is used in a variety of demanding applications that require strength and safety, such as in residential and commercial building facades, hospitals, airports, shopping centres and other architectural elements. The Company primarily operates within India, serving segments such as office buildings, hotels, institutions, banks, insurance companies, shopping malls, diplomatic residences, and industrial facilities. Our products are utilized in both exterior and interior applications across the construction, automotive, and industrial sectors. Our business activities are supported by a skilled sales and marketing team with extensive industry experience, enabling us to efficiently process orders from both direct clients and industry partners. The Company remains committed to quality, safety, and customer satisfaction as it continues to meet the growing demand for high-quality toughened glass solutions across the country.

Besides this, the Company is also planning to expand its offset capacity by venturing into manufacturing of glass processing units and adding a new plant and machinery. With these capacity additions your company is well prepared to manage the high demand for sustainable packaging solutions that is expected to grow going forward.

While continuing to enhance the Companys capabilities to achieve growth, your Company is focusing on strengthening its facilities and making the best use of them.

FINANCIAL AND OPERATIONAL PERFORMANCE

FY25 marked a clear step-up in scale and profitability. Revenue from operations was ?‚?55.31 crore (FY24: ?‚?38.33 crore), taking total income to ?‚?58.30 crore (FY24: ?‚?40.50 crore). Operating leverage and a richer product mix sustained strong unit economics: EBITDA was ?‚?23.12 crore with an EBITDA margin of 39.65% (FY24: ?‚?15.89 crore; 39.22%). Profit after tax was ?‚?15.17 crore with a PAT margin of 26.02% (FY24: ?‚?8.59 crore; 21.45%). On a two- year view, total income rose from ?‚?40.60 crore in FY23 to ?‚?58.30 crore in FY25, reflecting a near-20% CAGR led by value-added categories and tighter execution.

The mix shift continued in FY25. Toughened glass contributed ?‚?24.59 crore, DGU (insulated units) ?‚?18.91 crore, and laminated glass ?‚?1.81 crore; the balance came from other product lines and services. The emphasis on high- spec applications and repeat institutional customers supported realizations and margin resilience through the year.

Costs scaled with growth but remained disciplined. Raw-material consumption was ?‚?27.73 crore (FY24: ?‚?17.96 crore), employee benefits ?‚?3.65 crore (FY24: ?‚?3.49 crore), and other expenses ?‚?3.81 crore (FY24: ?‚?3.17 crore). Despite higher throughput, EBITDA margin improved by 43 bps year-on-year. Finance costs eased to ?‚?2.66 crore (FY24: ?‚?2.72 crore) and depreciation was ?‚?1.96 crore (FY24: ?‚?1.56 crore), taking PBT to ?‚?18.50 crore (FY24:

?‚? 11.60 crore).

The balance sheet strengthened materially. Net worth increased to ?‚?94.23 crore (FY24: ?‚?16.42 crore) on equity accretion and retained earnings. Total assets were ?‚?132.37 crore with cash and bank balances of ?‚?33.87 crore at year-end. Cash flows reflect the growth and investment phase: cash from operations was ?‚?(18.12) crore, primarily due to working-capital build as volumes scaled; cash used in investing was ?‚?(12.73) crore; and cash from financing was ?‚?64.40 crore, reflecting the capital raised during FY25. The closing cash position provides headroom for capacity ramp-up and cycle-time improvements.

Operationally, the Company enters FY26 with an order book of ?‚?45 crore and a clear capex roadmap. A new tempering machine is being installed, and a third manufacturing unit with an investment of ?‚?24 crore is underway. Alongside the manufacturing upgrades, the Company plans to expand reach through 15 new marketing offices across India, improving proximity to project sites and shortening response times for key accounts.

OPPORTUNITIES AND THREATS

Opportunities: The outlook for the glass industry and Agarwal Glass in particular remains positive, with multiple growth drivers:

Construction & Infrastructure Boom: Indias ongoing infrastructure boom (airports modernization, bullet train projects, metro rail expansions) and the governments Smart Cities Mission are creating huge demand for architectural glass in stations, terminals, and urban developments. These projects emphasize modern designs with glass exteriors and interiors, providing a ready market for the Companys tempered and laminated glass products. The robust growth in housing and commercial real estate ?€“ especially premium high-rise projects in metro cities and tier-2 cities ?€“ is another major opportunity, as developers increasingly use glass facades and windows for aesthetics and energy efficiency. Industry reports estimate the demand for glass in Indian construction could grow at a CAGR of ~12% in the medium term , which Agarwal Glass can capitalize on through its established presence in this segment.

Value-Added Products & New Markets: There is rising awareness of safety and energy-saving glass (such as insulated double-glazed units, solar-control glass, etc.) in India. Customers are moving towards higher value-added glass products for better thermal performance and safety (for example, tempered glass with advanced coatings). Agarwal Glass, with its range of "Glasses for New Era" (as per its brand tagline), is well-positioned to offer these solutions. Additionally, the Company has opportunities to grow its export footprint. Neighboring emerging markets and the Middle East/North Africa region continue to invest in construction (e.g. mega-projects in the UAE, Saudi Arabia, Qatar), which presents export opportunities for processed glass . Agarwal Glass already adheres to international quality standards, and expanding export sales could diversify its revenue base.

Capacity Expansion and Technology: The infusion of IPO funds for new machinery will allow the Company to adopt newer glass processing technologies and increase its output. This enables Agarwal Glass to take on larger orders and improve product quality/consistency. By scaling up capacity, the Company can

achieve better economies of scale and shorten delivery times, which is an advantage in winning big contracts. There is also an opportunity to broaden the product portfolio (for instance, adding curved toughened glass or solar reflective glass capabilities) to meet evolving market needs.

THREATS AND CHALLENGES :

Despite the favourable trends, the Company faces certain risks and challenges that require careful management:

Competitive Pressure: The glass processing industry in India is quite competitive, with several established players (including local toughened glass manufacturers and subsidiaries of global glass companies). Competitors may engage in price cutting or rapid technology adoption. Agarwal Glass must continuously differentiate on quality, service, and innovation to maintain its margins. Additionally, cheap imports of processed glass or raw float glass (especially from regions like China or the Middle East) can put pressure on pricing in the domestic market.

Raw Material and Cost Volatility: The Companys operations depend heavily on the supply of raw float glass (which it further processes). Fluctuations in float glass prices or availability can impact Agarwals production costs and scheduling. Similarly, energy costs (electricity and fuel for furnaces) are a significant component of processing toughened glass; any sharp increase in power tariffs or fuel costs can squeeze margins if not passed on to customers. Inflation in other inputs (chemicals, films, packaging) and rising logistics costs are also ongoing challenges.

Cyclical Demand & Economic Factors: Demand for architectural glass is linked to the health of the real estate and construction sectors. These sectors can be cyclical. An economic slowdown, rise in interest rates, or any downturn in construction activity could reduce new project launches and thus glass orders. For example, if commercial real estate demand softens or infrastructure spending is delayed, the Companys order book might be affected. Furthermore, project execution delays (a common issue in construction) can lead to deferred glass deliveries and impact the timing of revenue recognition.

Regulatory and Compliance Risks: The Company must comply with various regulations (environmental norms for manufacturing, building code standards for safety glass, etc.). Stricter environmental regulations could increase compliance costs (for instance, requirements to cut emissions or recycle water in the plant). Theres also a need to continuously meet evolving building safety standards (such as fire safety norms that affect what kind of glass can be used) ?€“ failure to do so could risk market access.

Technology Obsolescence: Glass processing technology is advancing (e.g. new tempering techniques, automated cutting and handling systems, digital printing on glass). To stay competitive, Agarwal Glass needs to keep its technology updated. Delays in adoption of modern equipment or processes could be a threat as peers might gain an edge in efficiency or product offerings. The Company mitigates this by reinvesting in modern machinery (as evidenced by the current expansion plan) and training its technical team on the latest techniques.

SEGMENT-WISE & PRODUCT-WISE PERFORMANCE

The company operates in only single segment, hence segment reporting is not applicable. The Company is mainly engaged in the Trading of Glasses and other allied activities.

The Highlights of the Companys performance are as under:

The Total Revenue comprising of Revenue from its business and operations and Other Income for the financial year ended 31 st March, 2025 is Rs. 5530.62 Lakhs as against Rs. 3832.78 Lakhs in the previous financial year and the Company has earned a Net Profit of Rs. 1517.20 Lakhs as compared to previous years net profit of Rs. 859.08 Lakhs ; as reflected in its profits and Loss accounts.

The management of the Company is contemplating various business plans and also making strategies to develop the business of the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has established a robust internal control framework commensurate with the size and complexity of its operations. The Companys internal financial controls ensure that transactions are properly authorized, recorded, and reported, and that assets are safeguarded against significant misuse or loss. During the year, the effectiveness of internal controls was reviewed and enhanced in line with the expanded operations post-IPO.

The internal audit team, in coordination with the Audit Committee, regularly monitors adherence to set processes and policies. Any observations or weaknesses identified are addressed promptly. Management believes that adequate internal control systems are in place for all major operational areas, including procurement, production, inventory management, and finance, and that these systems are operating effectively to ensure compliance with applicable laws and regulations . In addition, the Company has implemented standard IT systems for accounting and inventory which provide checks and balances through system controls. Overall, the internal control environment remains sound and is continuously being improved as the business grows.

RISKS AND CONCERNS

Every Company is prone to internal and external risks, including risks around compliance, operational, strategic and many others. Many of these risks are inherent in the enterprise structure of any organization and may interfere with an organizations operations and objectives. Further as our Company is looking for the new Business opportunities the Following Risk associate for doing any business:

Market Risk

Reputation Risk

Competition Risk

Technological Risk

Changes in the policies of the Government of India or political instability may adversely affect economic conditions in India generally, which could impact our business and prospects.

New and changing regulatory compliance, corporate governance and public disclosure requirements add uncertainty to our compliance policies and increase our costs of compliance.

The board of directors also reviewed the key risks associated with the business of the Company, the procedures adopted to assess the risks, efficacy and mitigation measures.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The companys industrial relations remained cordial throughout the year. As of March 31, 2025, the companys payroll had an estimated 207 employees.

The Company regards its human capital as one of its most important assets. Various HR initiatives were undertaken during the year focusing on training and development, particularly in new machinery operation, quality control, and safety protocols. The Company has fostered a culture of safety and teamwork ?€“ regular safety drills and workshops were conducted to ensure a safe working environment in the factory. Employee welfare schemes (health check-ups, medical insurance, etc.) continued to be provided, which helped maintain high morale. Importantly, industrial relations remained cordial throughout the year.

There were no labor stoppages or disputes; management and employees (and their representative forums) worked in harmony to achieve the Companys goals. With the expansion of capacity, Agarwal Glass also generated new employment opportunities, hiring additional technicians and support staff for the upgraded plant. The Company remains committed to upskilling its employees and aligning HR policies with business needs, which in turn is expected to improve productivity and retention.

OUTLOOK

The overall outlook for FY 2025-26 is optimistic. Global economic growth is forecast to remain steady (around 3.1% in 2024 and rising slightly to 3.2% in 2025) and inflation pressures are expected to ease in many regions . Indias economy in particular is projected to grow at an impressive rate of roughly 7% in the next fiscal year , which bodes well for continued expansion in construction and industrial activity. This macroeconomic backdrop, combined with strong government infrastructure spending, suggests that demand for glass products will stay on an upward trajectory.

For ATGIL, the key growth drivers will be leveraging its new capacities and the healthy pipeline of construction projects in the market. The Company plans to deepen its presence in high-growth segments like commercial real estate projects, upscale residential developments, and specialty architectural installations (e.g. airports, shopping malls). Having strengthened its financial base through the IPO, Agarwal Toughened Glass India Limited is better positioned to bid for larger projects and also weather any short-term market volatility. The focus will remain on innovation and quality ?€“ providing customized, high-specification glass solutions (such as energy-efficient double- glazed units, high-strength safety glass, etc.) to meet evolving customer requirements.

Management is also exploring entering new regional markets within India and expanding export sales in neighbouring countries, which could add to growth in the coming year.

In terms of financial outlook, the Company expects to maintain healthy profitability. While revenue growth will depend on project timing and market conditions, the emphasis on higher-margin orders and efficient operations should support good margins. The recent reduction in debt (through IPO fund utilization) will likely lower interest costs, contributing positively to net earnings. Of course, the Company remains vigilant about potential challenges

?€“ it will monitor input cost trends and maintain flexibility in pricing. Barring unforeseen macro-economic disruptions, Agarwal Glass is confident of achieving growth in FY 2025-26, supported by a strong order book and favorable industry trends.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE.

Details of Significant Accounting Ratios are as follows:

Ratios	For the Year ended March 2025	For the Year ended March 2024	Variation (%)
(a) Current Ratio	3.76	1.36	176.47%
(b) Debt-Equity Ratio	0.36	1.78	(79.78%)
(c) Debt Service Coverage Ratio*	3.22	1.76	82.95%
(d) Return on Equity Ratio*	27.42%	70.85%	(61.30%)
(e) Inventory turnover ratio*	3.47	3.28	5.79%
(f) Trade Receivables turnover ratio*	1.91	4.11	(53.53%)
(g) Trade payables turnover ratio*	24.56	15.04	63.30%
(h) Net capital turnover ratio*	1.38	5.70	(75.79%)
(i) Net profit ratio	27.43%	21.21%	29.33%
(j) Return on Capital employed*	24.38%	34.82%	(29.98%)

*Reasons for Variation more than 25%:

Debt-Equity Ratio decreased because company increase profitability, improve inventory management and restructure debt compared to previous period.

Debt Service Coverage Ratio increased because increase in net operating income compared to the previous period.

Return on Equity Ratio increased because increase in net operating margin compared to the previous period.

Trade payables turnover ratio increased because company started taking the advantage of early payment discounts, cash discount and required to make quick payments because of market trends and futuristic approach compared to the previous period.

Net profit ratio increased because increase in net operating income compared to the previous period.

Return on Capital employed increased because increase in net operating margin compared to the previous period.

FOR AGARWAL TOUGHENED GLASS INDIA LIMITED

Formerly known as Agarwal Toughened Glass India Private Limited)

Sd/- Sd/-

ANITA AGARWAL MAHESH KUMAR AGARWAL MANAGING DIRECTOR DIRECTOR

(DIN: 09740258) (DIN: 02806108)