Archidply Industries Ltd Management Discussions

Global Economy

Fueled by an AI boom and robust technology investments, the global economy weathered shifting trade policies and policy uncertainty in 2025 to achieve 3.4% GDP growth. Meanwhile, global headline inflation stabilized at a steady 4.1%.

Growth was a tale of two regions: advanced economies expanded by a modest 1.9%—with U.S. growth hitting 2.1% thanks to strong tech outlays—while emerging markets surged ahead at 4.4%, powered by Indias impressive 7.6% growth and Chinas 5.0%.

Global inflation continued its multi-year downward trend in 2025, declining to an estimated 4.1% from 5.8% in 2024.

Outlook

Due to the complexities of establishing conventional baseline assumptions in real time, the IMF World Economic Outlook report adopted a "reference forecast" framework. This model assumes that ongoing geopolitical conflicts remain contained in duration, intensity, and geographic reach, with supply disruptions easing by mid-2026, consistent with March 10, 2026, commodity futures data.

Under this reference framework:

• Global Growth: Projected at 3.1% in 2026 and 3.2% in 2027.

• Global Inflation: Expected to tick upward to 4.4% in 2026 before moderating to 3.7% in 2027.

Indian Economy

The Indian economy navigates a complex global landscape marked by robust domestic consumption and historic trade alignments, tempered by external headwinds such as energy price shocks and geopolitical tensions. As one of the worlds fastest-growing major economies, India demonstrates structural resilience while balancing growth and inflation dynamics.

The Indian economy demonstrated robust momentum, with real GDP growing by 7.7% in FY 2025-26, up from 7.1% in FY 2024-25. This expansion—driven by resilient domestic consumption and sustained investment growth—reaffirms Indias standing as the fastest-growing major economy globally.

In absolute terms, Indias Real GDP at constant prices is estimated at ?323.12 lakh crore for FY 2025-26, compared with ?299.89 lakh crore in FY 2024-25.

Indias macroeconomic momentum remained exceptionally strong, characterized by a healthy balance between industrial revival and services-led expansion:

• Gross Value Added (GVA) Growth: Real GVA—which measures economic output excluding taxes and subsidies—registered a robust growth of 7.9% in FY 2025-26, accelerating from 7.3% in FY 2024-25. In nominal terms, GVA expanded by 9.1% to reach ^314.87 lakh crore, up from ^288.54 lakh crore in the previous fiscal year.

• Services Sector Dominance: The tertiary (services) sector continued to serve as the primary engine of economic momentum, expanding by 9.0% in FY 2025-26 and increasing its share in nominal GVA to 54.3% (compared to 52.8% in FY 2024-25). Growth was broad-based across segments:

o Trade, Hotels, Transport, Communication, and Broadcasting: Recorded a stellar expansion of 10.1%. o Financial, Real Estate, IT, and Professional Services: Grew by a robust 9.9%. o Public Administration and Other Services: Advanced by a steady 5.8%.

• Secondary Sector Acceleration: The secondary sector grew by 9.1% in FY 2025-26, picking up pace from 8.0% in the previous year. This performance was underpinned by vibrant manufacturing activity alongside strong construction growth of 7.1%.

This powerful combination of services-led scale and manufacturing acceleration is actively shaping a more balanced, diversified, and resilient economic structure for the nation.

Indias robust economic momentum and industrial expansion in FY 2025-26 were propelled by several key structural and cyclical catalysts:

• Sustained Public and Private Infrastructure Outlays: Continued government capital expenditure (cap-ex) on large- scale infrastructure projects—including highways, railways, urban transit, and logistics networks—served as a primary macroeconomic multiplier, crowding in private investments and boosting the construction sector.

• Real Estate and Housing Boom: A multi-year upcycle in residential and commercial real estate, supported by rising urbanization, aspirational housing demand, and government affordable housing schemes, drove strong downstream demand across core industrial and building material sectors (such as steel, cement, and wood panels).

• Manufacturing Acceleration & "Make in India": Policy initiatives, production-linked incentive (PLI) schemes, and the global diversification of supply chains ("China+1" strategy) accelerated domestic manufacturing capacity, turning India into a competitive global hub for engineering goods, chemicals, and decorative materials.

• Services Sector Vigor: The tertiary sector continued to anchor economic output, driven by double-digit growth in trade, hotels, transport, IT, and financial services, which in turn elevated urban disposable incomes and corporate office space absorption.

• Benign Inflation and Monetary Support: Favorable agricultural output, stable monsoons, and well-managed food supplies kept headline inflation soft and within the RBIs tolerance band. This preserved consumer purchasing power and provided the central bank with the flexibility to maintain a growth-supportive monetary stance.

Outlook

The year under review underscores a defining divergence: a world grappling with uncertainty, and an India navigating it with confidence. Indias macroeconomic landscape is projected to remain robust, retaining its position as a leading global growth engine despite ongoing international uncertainties and trade realignments.

• GDP Growth Projections: The Reserve Bank of India (RBI) estimates real GDP growth for FY 2026-27 at 6.7% to 6.9% (with international agencies such as the IMF projecting around 6.4%). While moderating slightly from the high base of 7.7% recorded in FY 2025-26, this growth rate remains among the highest globally.

• Consumption and Services Momentum: Private final consumption expenditure, supported by stable rural demand, normal monsoons, and steady urban discretionary spending, will continue to serve as the core domestic engine. The services sector is expected to maintain its leadership role in economic output and employment.

• Investment and Infrastructure Push: Continued government capital outlays on infrastructure projects, coupled with a steady uptick in private sector investments due to high capacity utilization levels, will provide strong tailwinds for manufacturing, construction, and engineered wood-panel industries.

• Macro Risks & Downside Factors: Key risks to the outlook include potential volatility in global crude oil prices, supply chain bottlenecks arising from geopolitical tensions in West Asia, and weather-related agricultural uncertainties.

(Source: RBI, IMF, MoSPI & India Today)

Indias Furniture Industry: Sector Overview & Market Dynamics

Indias furniture sector is advancing on a robust growth trajectory, expanding from USD 29.27 billion in 2025 to USD 31.51 billion in 2026, and projected to reach USD 45.52 billion by 2031 at a compound annual growth rate (CAGR) of 7.63% (2026-2031).

This expansion is propelled by structural housing programs, MSME formalization incentives, and rising urban household formation, broadening the addressable market base for mid-range and premium engineered products.

1. Regulatory Evolution and Institutional Procurement

A pivotal structural milestone arrived in February 2026 with the enforcement of the Furniture Quality Control Order (QCO). This regulatory shift is reshaping compliance, quality benchmarks, and after-sales standards across the industry:

• Compliance and Standardization: The QCO elevates manufacturing benchmarks, curbing substandard imports while encouraging unorganized regional producers to adopt certified processes.

• Institutional & Public Procurement: Expanding participation through platforms such as the Government e-Marketplace (GeM) and dedicated MSME sourcing mandates has increased project-based ordering, embedding rigorous documentation, safety compliance, and lifecycle costing into commercial contracts.

2. Consumer Behavior and Work Culture Transformation

Consumer preferences are undergoing rapid transformation, driven by structural shifts in employment and environmental awareness:

• Hybrid Work Models: The persistence of hybrid and remote work, alongside the growing gig economy, has established home-office solutions as an enduring necessity. This has catalyzed strong demand for functional, space-optimized furniture, including ergonomic seating, acoustic partitions, compact storage units, and height-adjustable desks.

• Sustainability Imperative: Millennial and Gen Z demographics are increasingly favoring brands that prioritize environmental responsibility. The rising demand for eco-friendly materials, low-emission binders, and certified sustainable timber presents a strong value proposition for forward-thinking manufacturers.

3. Demographic Tailwinds and Urban Expansion

Favorable demographic indicators provide a resilient foundation for long-term demand:

• Urbanization Momentum: Indias urban population share is on track to exceed 40% by 2030 (up from 34.5% in 2021), accelerating housing construction and furnishing cycles in emerging urban clusters.

• Migration Dynamics: Data from the Periodic Labour Force Survey (PLFS) indicates that 18.9% of internal migrants relocate from rural to urban areas, driving a continuous stream of new household formations and domestic interior demand.

(Sources: Mordor Intelligence & Research & Markets, DPIIT, BIS, MoSPI/PLFS & GeM)

Indian Plywood Market

Industry Structure, Developments, and Outlook: Indian Plywood Market

1. Market Overview and Valuation

The Indian plywood and wood panel industry has demonstrated resilient growth, underpinned by structural shifts in real estate development and consumer preferences. During the period between FY 2017-18 and FY 2023-24, the market expanded at a compound annual growth rate (CAGR) of approximately 6%, reaching an estimated valuation of ?300 billion in FY 2023-24.

Looking ahead, long-term fundamentals remain strong. The domestic market is projected to scale up to nearly ?391.9 billion by 2034. On a global scale, the Indian market generated revenues of USD 7 billion in 2025 and is anticipated to reach USD 10 billion by 2033, reflecting sustained demand and expanding macroeconomic potential.

2. Key Growth Drivers and Market Dynamics

The industrys expansion is propelled by several macroeconomic and demographic catalysts:

• Urbanization and Real Estate Activity: Rapid urbanization, coupled with expanding residential and commercial construction across metros, tier-2, and secondary cities, continues to widen the consumption baseline.

• Affordable Housing Initiatives: Government-backed affordable housing and urban development programs are actively driving construction activity and expanding market reach.

• Changing Consumer Preferences: A growing middle class—backed by improved access to financial credit—is increasing its discretionary spending on quality interiors, modular furniture, and sophisticated home decor solutions. Homeowners and interior designers increasingly prioritize premium plywood for its durability, aesthetic versatility, and superior finishing.

3. Transition to the Organized Sector

The market is witnessing a distinct and accelerating shift from unorganised operators to established, organized players. Consumers and trade partners increasingly prioritize brand reliability, stringent quality assurance, and warranty-backed products. Organized sector participants are successfully consolidating their market share through:

• Rigorous quality standardization and brand-building initiatives.

• The expansion of robust distribution networks across urban and semi-urban centers.

• Strategic investments in organized furniture manufacturing and modular interior ecosystems.

4. Regulatory Milestones and Compliance

A major regulatory milestone was achieved with the introduction of mandatory Quality Control Orders (QCOs) by the Government of India. These regulations mandate that plywood, Medium Density Fiber (MDF) boards, and allied wooden products strictly adhere to defined national standards.

This regulatory intervention is designed to strengthen domestic manufacturing capabilities, curb the influx of sub-standard imports, and systematically elevate consumer expectations regarding product compliance, safety warranties, and after-sales service.

5. Future Outlook

Supported by favorable demographic profiles, sustained urban migration, and robust construction pipelines, the Indian plywood sector is well-positioned for steady, long-term expansion. The industry is rapidly evolving into a mature, compliance-driven market defined by uncompromising quality standards, formal brand trust, and enhanced value creation for stakeholders.

(Source: IMARC, Grand View Research)

Industry Structure, Developments, and Outlook: Indian Medium Density Fibreboard (MDF) Sector

1. Market Size and Valuation

The Indian Medium Density Fibreboard (MDF) sector is experiencing robust structural expansion, underpinned by a decisive pivot toward engineered wood solutions. The Indian MDF market reached an estimated valuation of ?119 billion in 2025 and is projected to expand to ?127 billion by 2034, reflecting a compound annual growth rate (CAGR) of 7.24% over the 2026-2034 forecast period.

2. Capacity Dynamics and Demand-Supply Balance

The industry is entering a dynamic phase of capacity enhancement and operational optimization:

• Capacity Expansion: Installed production capacity has scaled upward from 4.5 million CBM in FY 2024 to 5.1 million CBM in FY 2025-26.

• Demand Trajectory: Domestic demand is projected to surge from 2.7 million CBM in FY 2023-24 to 3.7 million CBM in FY 2025-26, driven by rising furniture consumption, organized housing, commercial interiors, and the ongoing substitution of traditional plywood with engineered panels.

• Utilization Efficiency: As demand progressively matches fresh capacity additions, capacity utilization is expected to improve significantly from 51% in FY 2023-24 to 72% in FY 2025-26, signaling a healthier demand-supply balance and stronger operational absorption across the sector.

3. Key Growth Drivers and Industry Trends

The expansion of the MDF sector is propelled by several macro-level catalysts:

• Rising Demand from Interiors & Furniture: Accelerated urbanisation and the rapid proliferation of modular furniture companies and organized interior infrastructure are driving market penetration.

• Technological Innovations: Advanced manufacturing technologies have dramatically improved product quality, mechanical durability, and moisture resistance while optimizing overall production efficiency.

• Eco-Friendly Substitution: Increasing consumer and institutional preference for eco-friendly, sustainable alternatives to natural wood and conventional plywood continues to broaden the application landscape for MDF.

• Regulatory Standardization: Government-led initiatives promoting strict quality standards and domestic manufacturing are boosting production quality and expanding organized market opportunities.

4. Market Structure and Competitive Landscape

The Indian MDF industry exhibits a relatively consolidated structure, which supports high operational standards:

• Market Concentration: The top players account for nearly 70% of total installed capacity, reinforcing a strong strategic focus on quality standardization, scale economies, and superior operational efficiency.

• Consolidation: The growth of organized interior infrastructure and branded modular furniture players continues to drive professionalization across the value chain.

(Source: Mordor Intelligence, Axis Report, IMARC)

Indian Laminate Market

Industry Structure, Developments, and Outlook: Indian Laminates Market

1. Market Overview and Valuation

The Indian decorative laminates and surfacing solutions market is experiencing steady expansion, driven by the rapid formalization of the interior infrastructure and building materials sector. Valued at approximately USD 2.3 billion, the market is projected to scale up to nearly USD 3.2 billion by 2034, exhibiting a stable compound annual growth rate (CAGR) of roughly 3.76% over the forecast period. This growth is underpinned by rising disposable incomes, shifting consumer aesthetics, and an accelerating transition toward standardized, high-performance engineered surfaces.

2. Key Growth Drivers and Market Dynamics

The industrys steady upward trajectory is propelled by several structural catalysts:

• Real Estate and Urban Expansion: Aggressive residential and commercial construction across metros, tier-2, and secondary cities is expanding the core consumption baseline for surface materials.

• Rise of Modular and RTA Furniture: Shrinking apartment footprints and a lifestyle shift toward modular, ready-to-assemble (RTA) furniture are driving high-volume off-take of decorative laminates for furniture, cabinetry, and flooring.

• Application Diversification: While furniture applications continue to command the major share of demand, wall paneling and exterior architectural cladding are posting some of the fastest growth rates as commercial, hospitality, and healthcare sectors adopt quick-install decorative solutions.

3. Technological Innovation and Product Differentiation

Manufacturers are increasingly leveraging technology and value-added innovations to capture premium market segments:

• Aesthetic Advancement: High-fidelity digital printing and synchronized "zero-finish" or super-matte textures allow laminates to accurately replicate natural wood, stone, and bespoke artistic patterns, replacing traditional veneers and imported materials.

• Functional Performance: Growing awareness of hygiene and safety has accelerated the adoption of specialized laminates featuring antimicrobial, anti-fingerprint, and fire-retardant properties, particularly for healthcare, retail, and premium residential spaces.

4. Sustainability and Regulatory Compliance

Environmental compliance and green building standards are reshaping manufacturing priorities across the domestic landscape:

• Eco-Friendly Formulations: Driven by stricter environmental norms and green building frameworks (such as IGBC and LEED certifications), producers are increasingly shifting toward low-emission, ultra-low formaldehyde (E0 grade) resins, waterborne coatings, and recycled content.

• Market Advantage: While compliance involves formulation adjustments, it enables organized players to command product premiums and secure institutional contracts in large-scale commercial and public sector developments.

5. Competitive Landscape and Organized Consolidation

The Indian laminates industry is witnessing a decisive structural shift from fragmented, unorganized local operators to established, organized manufacturers:

• Consolidation and Scale: Organized sector leaders continue to expand their market share by leveraging robust distribution channels, automated high-speed press lines, and pan-India dealer networks.

• Export Competitiveness: Proximity to major export hubs—supported by manufacturing clusters in states like Gujarat and Maharashtra—has strengthened Indias position as a preferred global sourcing hub under broader international supply chain diversification strategies.

6. Future Outlook

Supported by favorable demographics, ongoing urban housing development, and continuous product premiumization, the Indian laminates sector is well-positioned for long-term sustainable growth. The industry is transitioning into a mature market defined by design innovation, rigorous environmental compliance, and high standards of brand reliability.

<p >(Sources: Global RiskCommunity, IMARC & Mordor Intelligence)

Opportunities

Indias robust economic performance, with a GDP growth rate of 7% in 2024 following an 8.2% growth in 2023, strengthens the fundamentals for the entire wood panel industry. The broader plywood and laminates market alone is projected to grow from USD

6.1 billion in 2024 to USD 9.13 billion by 2030, at a Compound Annual Growth Rate (CAGR) of 6.8%.

https://www.openpr.com/news/4040753/india-s-plywood-market-records-6-71-growth-in-fy24-as

https://www.techsciresearch.com/report/india-plywood-and-laminates-market/21515.html

Key Opportunities Across Plywood, Laminates, and MDF:

1. Policy and Government Support: Affordable Housing and the Pradhan Mantri Awas Yojana (PMAY)

1.1 Fiscal Commitments and Budgetary Outlays

The Indian governments continued emphasis on affordable housing is structurally underscored by consistent fiscal backing through the Pradhan Mantri Awas Yojana (PMAY) framework. Allocations across various scheme phases have demonstrated high-priority capital commitment to expand residential access across both urban and rural geographies:

• Multi-Year Funding Trajectory: Budgetary support has adapted dynamically to economic cycles, recording ?40,260 crores in FY 2020-21, scaling up to ?90,020 crores in FY 2021-22, and registering ?73,615 crores (FY 2022-23), ?43,454 crores (FY 2023-24), ?47,596 crores (FY 2024-25), and ?78,126 crores (FY 2025-26).

• Union Budget Focus: Allocations in the Union Budget for FY 2026-27 maintain this momentum, securing the foundation for continuous execution under both rural and urban housing mandates.

1.2 Progress and Scale under PMAY-Urban

The urban component of the program (PMAY-Urban) has made steady, measurable headway in reshaping cityscapes and addressing housing deficits:

• Sanction Milestones: As of November 24, 2025, a cumulative total of 122.06 lakh houses had been officially sanctioned, highlighting the unprecedented scale and execution velocity of the initiative.

• Inclusive Urbanization: The structured progression across successive phases of PMAY-Urban continues to drive formal construction activity, accelerate infrastructure development in secondary cities, and broaden homeownership access for lower- and middle-income segments.

1.3 Macroeconomic Implications for the Building Materials Sector

The sustained expansion of PMAY acts as a primary catalyst for the broader building materials and home interiors ecosystem. By catalysing mass residential construction, affordable housing schemes directly drive long-term consumption volumes for structural wood panels (plywood and MDF), decorative surfaces (laminates), and modular infrastructure.

2. Progress and Scale under PMAY-Urban:

The urban component of the program (PMAY-Urban) has made steady, measurable headway in reshaping cityscapes and addressing housing deficits:

1.1 Sanction Milestones: As of November 24, 2025, a cumulative total of 122.06 lakh houses had been officially sanctioned, highlighting the unprecedented scale and execution velocity of the initiative.

1.2 Inclusive Urbanization: The structured progression across successive phases of PMAY-Urban continues to drive formal construction activity, accelerate infrastructure development in secondary cities, and broaden homeownership access for lower- and middle-income segments.

3. Macroeconomic Implications for the Building Materials Sector

The sustained expansion of PMAY acts as a primary catalyst for the broader building materials and home interiors ecosystem. By catalysing mass residential construction, affordable housing schemes directly drive long-term consumption volumes for structural wood panels (plywood and MDF), decorative surfaces (laminates), and modular infrastructure.

4. Rising Disposable Incomes and Evolving Consumer Preferences: An expanding middle-class population, expected to reach 715 million by FY2031, is driving a growing appetite for premium and environmentally conscious wood solutions. Consumers are increasingly opting for higher-quality interior finishes, modular furniture, and customized designs, moving away from lower-quality options. This fuels demand for premium-grade plywood, decorative plywood (identified as the fastest-growing segment in plywood and laminates), and advanced wood finishes.

https://www.openpr.com/news/4040753/india-s-plvwood-market-records-6-71-growth-in-fv24-as

https://plvwood.rovaletouche.com/blogs/plvwood-industrv-in-india

https://www.techsciresearch.com/report/india-plywood-and-laminates-market/21515.html

5. Prefabricated and Modular Construction: The increasing adoption of prefabricated and modular construction methods, valued for their efficiency, cost-effectiveness, and reduced construction time, drives demand for versatile and lightweight materials like plywood and laminates.

Challenges:

Rising raw material costs, particularly timber, along with fluctuations in energy prices and variable import and customs duties on fixture products, may suppress margins and hinder industry growth. Additionally, the global economic slowdown and high inflation are impacting consumer sentiment, potentially leading to reduced household spending on non-essential items and affecting both the export market and overall industry growth.

The furniture market is in a state of constant evolution due to rapidly changing consumer preferences. This dynamic environment requires the industry to continuously adapt and innovate in order to meet the ever-evolving demands of customers.

The industry operates within a dynamic policy landscape where shifts in government regulations, trade policies, and compliance frameworks have the potential to reshape the market environment. These regulatory developments directly influence the Companys operational workflows, manufacturing standards, and long-term strategic roadmap.

The manufacturing sector is subject to rapid technological advancements and automation breakthroughs that can gradually render legacy production processes less efficient. To maintain its competitive edge, the company remains dedicated to proactive adaptation—continuously investing in state-of-the-art machinery, process modernization, and digital integration to optimize operational efficiency, elevate product quality, and future-proof its manufacturing infrastructure.

Outlook

The Companys outlook remains same as stated earlier, that is to enhance the capacity utilization of the existing installed capacity across various product lines. Your company looks to increase the capacity utilization thus improve the bottom line.

The Company operates manufacturing facilities in Rudrapur & Sitarganj at Udham Singh Nagar district (Uttarakhand). The facility in Sitarganj newly setup MDF plant. The Company places a strong emphasis on innovation and sustainability, proudly producing Archidply Plywood, Laminate & MDF using 100% renewable agroforestry wood.

Standalone Financial Performance

Particulars	2026	2025
Revenue from Operations	50,774.59	46,428.17
EBITDA	2,873.97	2,335.14
Profit before tax	1,414.83	1,060.99
Tax	340.90	273.13
Profit after tax	1073.94	787.86

Segment Reporting

	Plywood & Allied Products	Laminate & Allied Products	Medium Density Fibre Board	TOTAL
Particulars	As at 31.03.2026	As at 31.03.2025	As at 31.03.2026	As at 31.03.2025	As at 31.03.2026	As at 31.03.2025	As at 31.03.2026	As at 31.03.2025
External Sales	34,660.62	31,708.31	14,570.66	13,226.33	1,528.59	1,473.42	50,759.86	46,408.06
Other Sales	-	-	-	-
Royalty Income	14.51	15.47	-	-	-	-	14.51	15.47
Other Operating Income							0.23	4.64
Total Revenue	34,675.12	31,723.78	14,570.66	13,226.33	1,528.59	1,473.42	50,774.59	46,428.17
RESULTS
Segment Results	4,657.62	4,185.02	3,371.42	2,905.59	17.41	77.32	8,046.45	7,167.93
Interest							878.20	809.66
Other Unallocable Income							85.93	127.55
Other Unallocable Expenditure							5,839.33	5,424.84
Provision for Taxation							340.90	273.13
Net Profit after tax							1,073.94	787.86
OTHER INFORMATION
Assets
Segment Assets	12,288.67	11,837.12	5,959.92	5,849.71	521.32	525.42	18,769.90	18,212.26
Unallocable Assets							10,696.29	9,186.57
Total Assets :							29,466.19	27,398.82
Liabilities
Segment Liablities	5,371.59	4,921.80	2,258.12	2,053.01	236.90	228.71	7,866.61	7,203.51
Unallocable Liablities							20,026.18	20,189.42
Total Liabilities :							27,892.79	27,392.93
Capital Expenditure during the year.	1.89	23.41	18.73	54.44	-	-	20.63	77.85
Capital Expenditure during the year Unallocable							137.12	331.77
Depreciation and Amortization	63.83	68.63	151.64	166.77	-	-	215.47	235.41
Depreciation and Amortization (Unallocable)							226.59	229.08

Key Financial Ratios

Particulars	31.03.2026	31.03.2025	Deviation	Reason
a) Debt Service Coverage Ratio	6.85	170.14	-95.97%	Due to New Term loan taken and repayments made during the year
b) Interest Service Coverage Ratio	2.77	2.31	19.86%	-
c) Debt Equity Ratio	0.66	0.69	-4.57%	-
d) Current Ratio	1.20	1.11	8.24%	-
e) Total Debts to Total Assets	0.29	0.30	-3.28%	-
f) Creditors Turnover Ratio	7.02	7.31	-3.98%
g) Debtors Turnover Ratio	4.67	4.60	1.50%	-
h) Inventory Turnover Ratio	12.68	11.85	6.99%	-
i) Operating Margin(%)	4.65%	3.80%	22.43%	-
j) Net Profit Margin(%)	2.12%	1.70%	24.64%	-
k) Return on Equity Ratio	8.61%	6.82%	26.28%	Increase in Profit
l) Return on Capital Employed	11.26%	9.26%	21.55%	-

Risks and Concerns

At the core of the companys risk-mitigating initiatives, there is a comprehensive and integrated risk management framework, which comprises stringent norms and regulations along with a prudent control mechanism. The risk management approach conforms to the companys strategic direction, which is in line with shareholders desired total returns, the companys credit ratings and its desired risk appetite.

Slowdown in Demand, Market Dynamics, Competition risk, Resources availability, customer attrition risk, unpredictable economy, volatile business environment, credit risk and cheaper product availability are the various identifiable risks along with uncontrollable external factors. However, your company can respond and cautiously manage these risks by resorting to a conservative business policy and diligent business practices.

Internal Control Systems and their adequacy

The guidelines are set by the Board of Directors who are responsible for the internal control system. They verify its adequacy, effectiveness and application thereafter. The Companys internal control system is designed to ensure management efficiency, measurability and verifiability, reliability of accounting and management information, compliance with all applicable laws and regulations, and the protection of the Companys assets. This is to timely identify and manage the Companys operational, compliance-related, economic and financial risks.

The Companys internal control systems play an important role and acts as a supplement to the external control systems. Your company has appointed an internal auditor to streamline the system and has adequate internal control systems to maintain accuracy in accounting and financial transactions and comply with rules and regulations.

The internal control systems of the Company are monitored and evaluated by internal auditor and their finding & observations are reviewed by the Audit Committee.

Human Capital

The Companys Industrial relations at all the levels remained cordial throughout the year. The Company periodically conducts skill enhancement training for its human capital.

Cautionary Note

Important factors such as economic developments within the country, demand and supply conditions of the industry, input prices, changes in Government regulations, tax laws and other factors such as litigation and industrial relations, influence the Companys operations. This may lead to the Companys projections and approximate estimates to dispose them as "forward looking statements".

Though, these qualitative aspects are usually set in the framework meaning of applicable securities laws and regulations. The actual results may sometimes materially differ from those expressed or implied.

The Company remains committed to responding to changing consumer sentiments within the dynamic retail landscape.