Ahimsa Industries Ltd Management Discussions

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AHIMSA INDUSTRIES LIMITED AHMEDABAD ECONOMIC REVIEW

The Global economy is anticipated to continue navigating a period of transition, marked by steady growth despite facing certain challenges. According to the OECDs Economic Outlook, global GDP growth is projected to slightly moderate, with growth rates of 3.1% in 2025, supported by improving economic conditions across several key regions. While this is a slight slowdown from previous years, it reflects a stable recovery trajectory after the global disruptions of earlier years. (oecd.org)

Inflation rates are also expected to gradually ease, moving from 3.8% in 2025 to 3.2% in 2026 across G20 economies. This reflects improving supply chains and stabilization in commodity prices, which will provide some relief to both consumers and businesses globally. The global economy is likely to experience steady growth, driven by innovation, digital transformation and a more resilient services sector.

In the United States, there are positive signals from various sectors, especially in technology and services, despite some uncertainties around trade policies. Analysts remain cautiously optimistic, with expectations that innovation-driven growth will continue to mitigate the effects of short-term challenges.

Indias economy remains one of the strongest and most resilient globally, showcasing impressive growth despite global uncertainties. The International Monetary Fund (IMF) has projected Indias GDP to grow at 6.8% in FY25, reinforcing its position as a key driver of global growth.

This robust growth is supported by continued demand in the services and manufacturing sectors, as well as strategic Government initiatives focused on improving infrastructure and streamlining policies.

In alignment with this outlook, the United Nations World Economic Situation and Prospects Report forecasts Indias economy to expand by 6.6% in 2025, with strong momentum in both domestic and export-driven industries. This growth will be further supported by Government reforms, especially in the manufacturing sector, which is benefiting from initiatives designed to enhance ease of doing business and boost exports. While some programs, such as the Production-Linked Incentive (PLI) scheme, are evolving to maximize their impact, Indias growth trajectory remains positive. The PLI initiative continues to attract investment in key sectors, with further refinements to ensure long-term competitiveness.

Indian plastic and beverages market is highly competitive. Your company had focused on quality product to sustain its business and performed satisfactory on Indian market.

"AHIMSA INDUSTRIES LTD." with its constant Endeavour for innovation will continue to introduce many new and innovative products both for domestic as well as International markets and thereby will fulfill its commitment to the society as a whole by offering premium quality products at the most affordable prices. The Indian PET (Polyethylene Terephthalate) industry faces both competition and threats, primarily stemming from waste management concerns, fluctuating raw material prices, and competition from alternative materials. These factors impact the industrys stability and require strategic responses like enhanced recycling initiatives and exploration of bio-based alternatives.

The PET industry is undergoing rapid transformation driven by advancements in manufacturing technologies, packaging design innovations, and increasing adoption of sustainable materials. While PET continues to be a preferred polymer for multiple applications, it is facing competitive pressures from bio-based alternatives, evolving recycling technologies, and changing regulatory requirements. Considering these factors, the Company is actively evaluating new business opportunities in the pharmaceutical sector as part of its strategic realignment, with a view to diversify revenue streams and leverage its existing operational capabilities in a growing and resilient market.

The Company has dealing is single segment i.e. in pet performs. Indian plastic & beverage market is highly competitive. But our company has always put great emphasis to sustain satisfactory performance by focusing on quality product to its customers and by performing reasonably well on export front.

RECENT TREND AND FUTURE OUTLOOK

In recent years Indian economy under the new government has gathered strong momentum. The company is optimistic about the recovery of Indian economy and the capital market. The country has to grow economically to with stand any international pressures from foreign countries. The way to economic growth begins with capital market development. The capital market industry in other words is backbone to economic growth in country.

Since its foundation, the production of PET packaging in the form of preforms and bottles has been the core business of Ahimsa. The preforms are blown into bottles by Ahimsa or by the customer, and then filled with water, soft drinks, edible oils, ketchup, milk, fruit juices, etc.

The Company is committed to managing risks effectively to ensure long-term value creation. Our approach to risk management includes a thorough and ongoing review of business risks, the implementation of mitigating controls, and a structured reporting mechanism.

The risk management framework is periodically evaluated by the Board and the Risk Management Committee to ensure its continued effectiveness. In line with the Companies Act 2013 and SEBI Regulations, the Board has delegated the responsibility of reviewing the Companys risk management system to the Risk Management Committee.

Apart from the typical risks associated with business operations, manufacturing, and commercial activities, the key risks and areas of concern identified by the Company are outlined as follows:

• PET production relies heavily on crude oil derivatives such as purified terephthalic acid (PTA) and monoethylene glycol (MEG).

• Fluctuations in global crude oil prices and supply disruptions can directly impact production costs.

• Rapid advancements in packaging and material science, including adoption of bio-based plastics, glass, aluminum, or paper-based alternatives, may reduce demand for PET.

• Companies that fail to upgrade manufacturing processes risk becoming less competitive.

• Growing consumer and regulatory pressure to reduce single-use plastics is pushing for higher recycling content and reduced PET usage.

• Stricter environmental laws regarding plastic waste disposal and extended producer responsibility (EPR) could increase compliance costs.

• Inadequate collection and recycling infrastructure in certain regions limits recycled PET (rPET) supply, affecting the ability to meet sustainability targets.

• Competition for high-quality rPET can increase input costs.

• PET demand is closely linked to industries like beverages, food packaging, textiles, and industrial applications.

• Any slowdown in these sectors can directly impact sales volumes.

• Tariffs, import restrictions, or trade disputes can disrupt raw material sourcing and finished product exports.

• Dependence on specific countries for feedstock or machinery can create vulnerabilities.

The company has implemented proper system for safeguarding the operations/business of the company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements. The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information.

The company gets internal audit and verification done at regular intervals. The requirement of having internal auditor compulsory by statue in case of listed and other classes of companies as prescribed shall further strengthen the internal control measures of company.

Your Company has undertaken employees development initiatives, which have very positive impact on the morale and team spirit of the employees. The company has continued to give special attention to human resources and overall development.

Certain statements in the reports of the Board of Directors and Managements discussions and analysis may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied since Companys operations are influence by many external and internal factors beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any of these statements on the basis of any subsequent developments, information or events.