Ambica Agarbathies Aroma & Industries Ltd Management Discussions

ANNEXURE - I

1. INDUSTRY STRUCTURE AND DEVELOPMENTS:

Ambica Agarbathies Aroma & Industries Limited, manufactures and sells incense sticks in India. Operate hotels in Chennai and Vishakapatnam, It also involves in the film production and distribution activities; the company was founded in 1946 and is based in Eluru West Godavari district of Andhra Pradesh, India.

2. OPPORTUNITIES AND THREATS:

AS PER SEGMENT WISE

Agarbathies Division

India is one of the largest Agarbathi (incense sticks) producing country, which could capture both domestic and foreign market. Agarbathies are used by all communities in India, Sri Lanka, Burma and by Indians residing abroad. The percentile domestic sale of incense/ Agarbathies in South-India estimated as 35 percent, West-India accounted for 30 percent, North-India for 18 percent & East-India for 17 percent respectively. Significantly, about two-thirds of domestic consumption of agarbatti takes place in rural areas(61.23%). The demand for Agarbathies is increasing day by day for both in domestic and export markets due to the availability of improved quality and varieties of incense sticks. As on today about 90 foreign countries are using our Agarbathies. Agarbathies industry is one of the labour intensive cottage types of traditional industries in India.

Hotel Divisions

Our company operates in the hospitality sector, managing a portfolio of hotels across key urban and leisure destinations. We cater to business travelers, tourists, and event clientele through a mix of luxury, mid-scale, and budget properties. Our brand is built on service excellence, guest experience, and operational efficiency Hotel and hospitality industries are the biggest employment generators in the country. Towards helping its growth, the government should confer infrastructure status to the hotel industries, several taxation issues also need to be rationalized the demand for travel and tourism in The tourism sector is expected to be the second largest employer in the world where India is expected to be place third position in the world.

3. SEGMENT WISE /PRODUCT WISE:

We have three segments which are continuingly operating through this industry which are as follows

1. AGARBATHIES DIVISION

2. HOTEL DIVISION

Detailed info regarding those segments which are stated above, are given below

1. AGARBATHIES DIVISION

The Company is manufacturing varieties of incense sticks, which counts more than 80% of the revenue in overall turnover of the Company, some of the majors products are

Durbar Bathi

We offer Durbar Bathi in various fragrances to suit the different demands of the clients. We are well reckoned as one of the prominent Incense Sticks Manufacturers and Suppliers based in India. Our Durbar Bathi is comprised of natural base materials keeping in mind the national and international quality standards.

Amrutham (Herbal Bathies)

We offer Amrutham (Herbal Bathies) in various fragrances to suit the different demands of the clients. We are well reckoned as one of the prominent Incense Sticks Manufacturers and Suppliers based in India. Our Amrutham (Herbal Bathies) are comprised of natural base materials keeping in mind the national and international quality standards.

Athjisaya Dhoop

We offer Athjisaya Dhoop in various fragrances to suit the different demands of the clients. We are well reckoned as one of the prominent Incense Sticks Manufacturers and Suppliers based in India. Our Athjisaya Dhoop is comprised of natural base materials keeping in mind the national and international quality standards.

2. HOTEL DIVISION

The performance of the Hotel division of the Company is not satisfactory in this fiscal as compared to the last fiscals, as the economy of the country is witnessing downtrend and more tourist and visitors are expected in this fiscal wherein we are expecting good business in coming years, the major impact o the business is due to the ongoing pandemic situation of COVID -19 in the country .

3. INDUSTRY OUT LOOK AGARBATHIES DIVISION

The burning of incense in religious and social functions has been practiced in India since early times. Dhup an aromatic powder or paste is burnt in Indian homes as a fragrant fumigant and is reputed to possess insecticidal and antiseptic properties. Agarbathies also known, as Udubattis similar to joss sticks are a development of Dhup. Agarbathies are obtainable in different colors and with different perfumes. The burning time; of an agarbatti varies from 15 minutes to 3 hours according to quality and size. Agarbatti is also obtainable in other forms such as dashang (stickly paste or powder) deep (cones and Dhup, tablets etc.).

HOTEL DIVISION

The Indian hospitality industry continues to demonstrate resilience and growth, supported by strong domestic demand, a revival in international travel, and evolving consumer preferences. FY 2024 25 is expected to be a year of consolidation and strategic expansion for hotel operators across segments.

Continued momentum in domestic leisure travel, spiritual tourism, and tier-II city exploration is driving room demand across mid-scale and upscale categories and foreign tourist arrivals are expected to approach pre-pandemic levels, aided by improved air connectivity and global economic recovery. The Meetings, Incentives, Conferences, and Exhibitions (MICE) segment, along with destination weddings, remains a key contributor to revenue and occupancy.

4. RISKS AND CONCERNS:

Indians have well understood the importance of staying one step ahead of developments in the world economic environment. The industry is now preparing itself to take share of opportunities expected to arise out of the market freed from quota restrictions and other trade barriers. Industry operators are increasingly moving towards modernization and expansion as encouraged by the so-designated film production and distribution activities wind power generation; hotels, construction activities by Government.

The Risks and concerns related to hotel division are Cost pressure, talent availability, alternative accommodation through online route like OYO, Airbnb etc.

5. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These systems are designed to ensure that all the assets of the Company are safeguarded and protected against any loss and that all transactions are properly authorized recorded and reported.

6. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

When it comes to Segment wise performance of the Company the Turnover of the Agarbathies Division was Rs. 9658.97 Lakhs as Compared to Rs. 9005.14 Lakhs, the Turnover of hotel division was Rs. 3232.21 Lakhs as compared to Rs. 1314.49 Lakhs.

7. HUMAN RESOURCES/ INDUSTRIAL RELATIONS:

The Company recognise that people play a critical role in achieving its goals. As of 31st March 2025, we were proud to have a dynamic team of talented and experienced professionals who deliver a comprehensive range of services across our operations.

Throughout the year, our strategic focus was on building robust platforms and implementing scalable processes designed to support the Companys ambitious growth trajectory. These initiatives were aimed not only at enhancing operational efficiency but also at laying a strong foundation for sustainable expansion.

As a rapidly growing organization, we offer a wealth of opportunities for our employees to contribute meaningfully and advance their careers. This environment of continuous learning and development fosters high levels of motivation and engagement across the workforce.

We take great pride in our ability to attract top-tier talent and retain skilled professionals at all levels of the organization. Our commitment to nurturing a culture of excellence, innovation, and inclusivity ensures that our people remain inspired and empowered to drive the Company forward.

	For and on behalf of the Board
	AMBICA AGARBATHIES AROMA & INDUSTRIES LIMITED
	Sd/-	Sd/-
	AMBICA KRISHNA	AMBICA RAMACHANDRA RAO
Place: Eluru	Chairman and Managing Director	Wholetime Director
Date : 02.09.2025	DIN: 00391898	DIN: 01678538