Ashish Polyplast Ltd Management Discussions

Annexure -C

A INDIAS PLASTIC PIPE INDUSTRY

The Indian plastic pipes and fittings sector sustained its structural demand in FY 2025-26, heavily driven by persistent downstream expansion across rural agricultural irrigation networks and private urban plumbing sectors. However, the broader industry experienced significant pricing volatility during the fiscal year. A substantial cooling down and price relaxation of Polyvinyl Chloride (PVC) raw material resin led to an industry-wide reduction in absolute transaction values and sales realizations. While this raw material correction supported long-term affordability for farmers and real estate developers, it placed sharp, short-term deflationary pressures on absolute top-line turnover figures for localized manufacturing units.

Operating within this tight pricing landscape, the Company strategically leveraged its core product portfolio of agricultural irrigation and domestic plumbing PVC pipes. For FY 2025-26, the Company recorded a total revenue turnover of 1,502 lakhs, representing a 6.21% contraction compared to the previous fiscal year. This variance does not indicate a loss in baseline volume demand, but rather mirrors the direct impact of deflationary PVC market pricing and intense regional competition from well-capitalized, organized brands. By refusing to chase low-margin, high-risk credit sales, the Company deliberately prioritized cash-flow safety and preserved its local dealer networks. Entering the next fiscal cycle, the Company remains structurally agile and well-positioned to capitalize on localized micro-irrigation demand and Tier-2 housing infrastructure.

B INDUSTRY STRUCTURE AND DEVELOPMENTS:

Market Composition and Segmentation

India has been predominantly a Unplasticized Polyvinyl Chloride (UPVC) market, with this dominance stemming from UPVCs superior rigidity, higher pressure tolerance compared to other plastics, and cost-effectiveness. The organized players are expected to gain market share due to the benefits of branding and operational scale, even as competitive intensity remains high across the sector.

The industrys end-user segments are primarily driven by:

- Irrigation sector - accounting for the largest chunk of demand, supported by various Central and State schemes to increase irrigated area and improve water use efficiency - water supply and plumbing applications - Industrial applications including hose pipes and braided pipes - Replacement demand from aging infrastructure

Raw Material Supply Chain Evolution

Significant investments are being made to reduce import dependence for PVC resin, the key raw material. Large-scale domestic PVC manufacturing plants are being commissioned, which is expected to ease the current heavy reliance on imports and provide better supply chain security.

C OPPORTUNITIES AND THREATS: • Key Growth Opportunities

1 Infrastructure Development Push

Government initiatives such as the Jal Jeevan Mission (extended until 2028 with enhanced outlay of Rs. 670 billion), increased allocation to PMAY-Urban by 54% to Rs. 233 billion for FY2026, and PM Awas Yojana Urban 2.0 with central assistance of Rs. 2,200 billion over the next 5 years are creating substantial demand drivers.

2 Demographic Dividend

Rising middle class, increasing per capita incomes, rapid urbanization, and the shift toward nuclear families are supporting the construction industrys expected CAGR of ~10% over FY2024-28.

3 Agricultural Modernization:

Government focus on micro-irrigation schemes and water use efficiency is driving demand in the irrigation segment, which represents the largest end-use application

4 Low Penetration Advantage:

Indias significantly lower per capita plastic consumption (13 kg/person/year) compared to developed economies provides substantial room for market expansion.

D INDUSTRY THREATS AND CHALLENGES

1 Raw Material Price Volatility:

The industry faces significant exposure to PVC price fluctuations, which directly impact margins. Sharp price increases limit demand due to restricted pass-through capabilities, while rapid price declines lead to inventory losses and dealer destocking, affecting volumes.

2 Import Dependence:

Heavy reliance on imported PVC resin exposes the industry to global supply chain disruptions, currency fluctuations, and geopolitical risks.

3 Policy and Regulatory Risks:

The imposition of anti-dumping duties on PVC imports from major producing countries in October 2024 could impact raw material costs and availability

4 Market Cyclicality:

The industry experienced moderated growth in 9M FY2025 due to sluggish government capital expenditure during the General Elections period, highlighting vulnerability to policy cycles

E OPERATIONAL RISKS

1 Quality and Compliance Requirements

The implementation of stringent BIS (Bureau of Indian Standards) certification requirements under the Poly Vinyl Chloride (PVC) Homopolymers Quality Control Order 2024 necessitates continuous compliance with evolving quality standards.

2 Environmental Regulations

The Plastic Waste Management (Amendment) Rules 2024 introduce stricter Extended Producer Responsibility (EPR) requirements, mandating companies to achieve recycling targets increasing from 30% in 2024-25 to 80% by 2027-28 for rigid plastics.

3 Technology and Innovation Pressure

Increasing demand for sustainable and recyclable products requires continuous investment in research and development to meet evolving market expectations

4 Working Capital Management

Volatile raw material prices create challenges in inventory management and working capital optimization. Extended payment cycles in government and institutional segments pose cash flow management challenges.

5 Regulatory Changes

Evolving environmental norms, quality standards, and trade policies could impact operational flexibility and cost structures.

F MITIGATION STRATEGIES

To address these risks, industry participants are focusing on:

1 Diversifying supplier base and developing long-term raw material contracts

2 Investing in backward integration for key raw materials

3 Enhancing product portfolio toward value-added and specialized applications

4 Strengthening brand positioning and distribution networks

5 Implementing robust quality management systems to meet BIS requirements

6 Developing sustainable and recyclable product lines to address environmental concerns

G INTERNAL CONTROL SYSTEMS:

The Company has built adequate systems of internal controls towards achieving efficiency and effectiveness in operation, optimum utilization of resources, and effective monitoring thereof as well as compliance with all applicable laws. The internal control mechanism comprises of well-defined organization structure, documented policy guidelines, pre-determined authority levels and processes commensurate with the level of responsibility.

H FINANCIAL PERFORMANCE:

The highlight of financial performance is discussed in the Directors Report. The Audit Committee also reviews the financial performance of the Company from time to time.

I HUMAN RESOURCES MANAGEMENT:

The Companys ongoing objective is to create an inspirational work climate where talented employees engage in creating sustained value for the stakeholders. The Company has developed an environment of harmonious and cordial relations with its employees

J CAUTION STATEMENT:

Statements in this Management Discussion and Analysis Report describing the Companys objectives, estimates etc. may be "forward-looking statements" within the applicable laws and regulations. Actual results may vary from those expressed or implied; several factors that may affect Companys operations include Dependency on telecommunication and information technology system, Government policy and several other factors. The Company takes no responsibility for any consequences of the decisions made, based on such statement and holds no obligation to update these in future

K DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIO

			Standalone
Sr No.	particular	Basis	As at 31st March, 2026	As at 31st March, 2025	% Variance	Reasons
1	Debt-Equity Ratio	times	0.22	0.03	-537.69%	Increase in outstanding borrowing is resulted into variation in the ratio.
2	Return on Equity Ratio	%	1.74%	3.58%	-51.43%	Decrease in Net profit has resulted in deteriorate in the ratio.
3	Net Profit Ratio	%	0.78%	1.47%	-46.82%	Decrease in Net profit has resulted in deteriorate in the ratio.
4	Return on Capital Employed	%	2.58%	5.33%	-51.65%	Decrease in Earning has resulted in deteriorate in the ratio.
5	Return on Investment.	%	0.00%	4.72%	-100.00%	Due to unfavourable equity market, there is less return for the year.

By Order of the Board For Ashish Polyplast Limited

Ashish D. Panchal Kantaben D Panchal Chairman & Managing Director Director Ahmedabad, 14th May, 2026 Din : 00598209 Din : 00598256