Ashima Ltd Management Discussions

Economic Overview and Outlook Global Economy

In 2024–25, the global economy continued to show resilience amid mixed conditions. Growth remained uneven, with some regions advancing steadily while others facing slowdowns. Trade tensions, geopolitical risks, and supply chain challenges persist, sustaining inflationary pressures in several sectors. Central banks are carefully adjusting policies to balance growth support with inflation control. Meanwhile, climate action and technological progress are reshaping industries, creating both obstacles and new opportunities for investment and employment.

Indian Economy

India remains one of the fastest-growing major economies, supported by strong domestic demand, government infrastructure initiatives, and expanding private sector activity. The manufacturing sector is gaining momentum, aided by policy incentives and rising foreign investments. Inflation pressures have eased somewhat, helped by stable commodity prices and improved supply chains, though vigilance is necessary amid global uncertainties. Continued focus on digitalization, renewable energy and financial inclusion strengthens Indias growth outlook. However, external risks such as geopolitical tensions and commodity price volatility require coordinated efforts to ensure sustainable and inclusive development.

Companys Performance

The operational performance of the company has declined during the year on account of lower revenue of Real Estate Division and profitability of Investment Division being affected by a somewhat bearish and volatile trend in the stock market. The bottomline was also affected significantly upon closure of the cotton textile operations of the Company during the year, including non-recurring items relating to it.

Segment-wise Analysis and Review

The Company closed its cotton textile operations during the year, so its performance is presented as "discontinued operations" as per requirements of IND AS 105. Performance analysis for Real Estate and Investment segments during the year is presented as follows:

Real Estate Division:

The Division has two ongoing projects: "Swan Lake", a plotted development project and "The Sovereign", a luxurious high-rise residential apartment project. There is consistent progress in construction and development work for the projects. The Division booked revenue of J 526 lacs during the year.

Investment Division:

Performance of the Division was affected due to significant decline in the stock market during the year. The Division has reported lower profit of J 389 lacs compared to J 1041 lacs in the previous year. The division has outperformed the benchmark indices in terms of XIRR over time. The XIRR for the investments of the Company since inception was at 27% compared to XIRR of various benchmark indices ranging from 11% to 13%.

The investment portfolio of the Company was moved to its wholly owned subsidiary, Ashima Capital Management Limited ("ACML"), in February 2025 upon ACML having got PMS licence from SEBI. The performance of the portfolio is being reported on continuing basis after the transition, since ACML is also managed by Mr. Krishnachintan Parikh, Executive Director of the Company, who has been managing Investment Division of the Company since its inception. He is the Principal Officer of ACML as per SEBI regulations.

The Company, and now ACML, follow the philosophy of value investment, with investments being made in equity shares with a long-term perspective. As per accounting norms, periodic performance is reported based on market value of shares held at the end of the period.

FINANCIAL RESULTS AND OUTLOOK:

Financial performance:

The profitability of the Company for the year was adversely affected by various factors, resulting in a loss of Rs. 1,888 lacs compared to profit of J 9,641 lacs during the preceding year. The amount of reported profitability is after considering lower positive impact of J 1,486 lacs on account of deferred tax asset for the year under review, which was much higher at J 3,500 lacs in the previous year due to first time recognition thereof.

Operational profitability declined due to lower revenue of Real Estate business and adverse impact of bearish and volatile stock markets on profitability of Investment Division.

The bottomline was also affected significantly upon closure of the cotton textile operations of the Company during the year, including non-recurring items relating to it.

Significant changes in financial ratios and explanations thereon are appearing at note no. 47 to the Financial Statements.

Outlook:

The Company is optimistic about its future business prospects.

Its Real Estate business is expected to do well in the years to come, as the Company sees huge opportunities in various market segments in Ahmedabad. The city has shown consistent growth of real estate sector over last many years and the trend is likely to continue.

The Investment division has a sound performance record since inception, which is expected to continue, considering two major aspects: our time-tested strategy of value investing and a promising long term future of India as one of the fastest growing economies of the world, offering attractive investment opportunities.

Opportunities:

The Company sees good growth opportunities for its Real Estate business, considering overall market scenario and its strength in capitalizing on these opportunities. As regards its Investment Division, with the right strategy in place, there is tremendous scope for spotting investing opportunities that can offer above market returns over time.

Threats:

There are no major threats to the Real Estate business, especially in the region and sectors that the Company operates in, though demand could be impacted due to higher property costs, as costs of land and construction keep rising.

Risks and Concerns:

The management of the company has a robust system of risk management in place, which efficiently identifies risks and helps the management take effective steps in a timely manner to mitigate the risks.

Internal control systems and their adequacy:

The Company has in place sound internal control systems commensurate with the size and nature of its business activities, ensuring that the interests of the Company are adequately safeguarded. The Board of Directors and Audit Committee are responsible for ensuring that the internal control systems laid down by the Company is appropriate and is operating effectively by reviewing at regular intervals. Internal control systems are in line with compliance requirements.

Human Resources and Industrial Relations:

Human resources form the core foundation of organizational success. The Company remains committed to nurturing this vital asset by maintaining secure and conducive workplace conditions. This ensures the attraction, development, and retention of right talent essential for driving sustainable corporate growth. As of March 31, 2025, the Company had 63 permanent employees on its roll. The Company closed its cotton textiles operations during the year, leading to the departure of employees associated with this activity. The transition was executed through an orderly process.

Cautionary Statement:

Statements of Management Discussion and Analysis Report hereinabove contain certain forward-looking objectives, based on various assumptions on the Companys present and future business strategies and the environment in which we operate. Actual results may differ substantially or materially from those expressed or implied due to risks and uncertainties. The operations of the Company could be influenced by various factors such as domestic and global demand and supply conditions affecting sales volumes and selling prices of finished goods, input availability and cost, new regulations and Government policies, Tax Laws within the country and other factors like litigation and industrial relations of the Company.

	For and on behalf of the Board
	Chintan N. Parikh
Date: May 24, 2025	Chairman & Managing Director
Place: Ahmedabad	(DIN: 00155225)