Asi Industries Ltd Management Discussions

GLOBAL ECONOMY

Amidst the prevailing trade tensions and policy uncertainty pose significant risk to global trade and economic activity. Global economic landscape, challenges such as a subdued manufacturing environment, faltering trade flows and persistent inflation concerns shows a complex picture for the future ahead. Heightened geopolitical tensions and conflict escalations could disrupt global trade and commodity markets . However, amidst these challenges, certain sectors, notably services, demonstrate resilience.

The global economy in 2025 is projected to experience a widespread growth slowdown, with forecasts ranging from 2.3% to 3.3%. Several factors contribute to this, including increased trade barriers, policy uncertainty, and slower growth in major economies. While a global recession is not expected, the projected growth is significantly lower than pre-pandemic levels and previous forecasts.

INDIAN ECONOMY

India continues to be one of the fastest-growing major economies globally, supported by its favourable demographic profile, strong domestic consumption, ongoing structural reforms, and a sustained drive towards digital transformation. Key contributors to this growth include healthy GST collections, expanding infrastructure, manufacturing sectors, and rapid technological adoption across industries. The governments emphasis on improving the ease of doing business and nurturing a vibrant startup ecosystem has further bolstered economic momentum.

In Fiscal Year 2025 (FY25), the Indian economy is projected to grow from 6.3% to 6.5%. Indias economic outlook for 2025 and 2026 remains one of the brightest among major global economies, as highlighted by the IMF. Despite global uncertainties and downward revisions in growth forecasts for other large economies, India is set to maintain its leadership in global economic growth. Supported by strong fundamentals and strategic government initiatives, the country is well-positioned to navigate the challenges ahead. With reforms in infrastructure, innovation and financial inclusion, India continues to enhance its role as a key driver of global economic activity. While some institutions like the World Bank have slightly lowered their initial projections, India is still expected to outpace other large economies.

In FY25, the Indian infrastructure industry is characterized by robust government investment, significant private sector participation and a focus on key areas like roads, railways, and ports. The 2025 Union Budget allocated a substantial amount to infrastructure, reflecting the governments commitment to driving economic growth through infrastructure development.

FINANCIAL AND OPERATIONAL PERFORMANCE

During the year under review, company recorded sales of Rs. 15476.56 Lakhs (PY Rs. 14469.23 Lakhs). Thus, there is increase in revenue of the company owing to which company has recorded a net profit of Rs. 2544.92 Lakhs during the year under the review as compared to net profit of Rs. 2511.06 Lakhs of previous year.

OUTLOOK

Strong domestic demand, driven by private consumption and government spending, is expected to support Indias economic growth. Increased infrastructure spending and investments in key sectors can stimulate growth and improve productivity. Ongoing reforms in areas like taxation, digitalization, and manufacturing can help India maintain its growth momentum.

STONE INDUSTRY OVERVIEW

Global Stone Industry

The global stone industry, particularly the natural stone market, is experiencing steady growth driven by increasing demand from the construction sector.

The global natural stone market size was estimated at USD 13.00 billion in 2024 and is projected to grow at a CAGR of 5.8% from 2025 to 2030. The increasing demand for aesthetically appealing and durable building materials in residential and commercial construction is proliferating the market. The growth in the historic period can be attributed to increased construction industry, urbanization, increased infrastructure development, landscaping projects, historical restoration.

The stones market size is expected to see strong growth in the next few years. The growth in the forecast period can be attributed to smart cities initiatives, energy efficiency in quarrying, rise of prefabricated construction, cultural and religious projects, circular economy practices. Major trends in the forecast period include digital transformation in stone industry, sustainable quarrying and processing, innovations in stone finishes, smart stone applications and online stone marketspaces.

Indian Stone Industry

India is one of the worlds leading producers of kota stone. The stone business, worth Rs.25,000 crore, has massive reserves of 4 trillion cubic metres. In addition, India has over 100 varieties of stone, which come in a variety of colours and textures.

Opportunity And Threat

Navigating accurate business performance forecasting is increasingly complex due to factors such as economic downturns, shifts in consumer behavior, heightened competition, and procurement challenges. These headwinds are expected to persist for some time. However, large-scale investments from institutional investors, global corrective monetary measures, and increased spending on remodeling and renovation projects are anticipated to serve as potential revenue boosters. To address these challenges, our strategic approach includes procuring raw materials from quarries in Rajasthan at competitive prices. Our goal is to enhance our presence in both global and domestic markets by consistently introducing innovative and value-added products, investing in extensive marketing efforts, and aligning with the evolving demands and aspirations of our customers. The management is committed to the process of assessment, adaptation, and innovation, recognizing that staying competitive and resilient in a dynamic environment is crucial for sustained growth and success.

The market is experiencing robust growth due to a consistent increase in the residential construction sector worldwide and rising individual spending on home improvements. Furthermore, there has been an increase in bank mortgage refinances and loans, resulting in more credit being accessible for the construction of new houses and renovation of existing residences, which is driving up demand for natural stones. In addition, the recent availability of lower interest rates for housing loans may further boost the demand for new home purchases thereby increasing the demand for the companys products. Additionally, we are optimizing production volumes and implementing cost management initiatives which are anticipated to serve as potential revenue boosters.

Due to cost effective and long lasting nature of kota stone and government thrust for spending on infrastructure projects , company expects better demand for natural stones in coming years.

Economic downturns, shifts in consumer behavior, heightened competition, and several other challenges due to international conflicts and disputes may pose significant threats to the organized natural stone sector in the coming years. Management of the Company has been putting its best effort to reduce the cost of manufacturing and development of new products.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

During the year 2024-25, Company was engaged only in mining and processing of Natural Stones, hence requirement of segmental reporting is not applicable.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

1. Movement in Current Ratio is mainly due to decrease in current investment which has invested in long terms Financial Instruments

2. Movement in Inventory Turnover Ratio is due to reduction in inventory on account of sale of stock/reduction in store inventory.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THERETO:

As disclosed in the notes to financial statements.

DEVELOPMENT IN HUMAN RESOURCE / INDUSTRIAL RELATIONS (INCLUDING NUMBER OF PERSONS EMPLOYED)

The Company recognizes its human capital as a critical asset. The Company continues to invest in employee development and welfare to ensure a skilled and motivated team.

Number of persons employed: 460 employees as on 31st March 2025.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company maintains robust internal control systems commensurate with the nature of its business and the size and complexity of its operations. Its a constant assessment and revision based on the new/updated standard operating procedures helps it remain up to date. These systems are designed to ensure the accuracy and completeness of accounting records and the timely preparation of reliable financial information.

The internal and operational audit is entrusted to M/s. L.B.Jha & Co., a firm of Chartered Accountants. The major focus of the internal audit is to review and analyse the controls and business processes along with benchmarking controls with the best methodologies in the industry. The Audit Committee of the Board of Directors actively reviews the adequacy and efficiency of the internal control systems and makes suggestions to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism. The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised for their well-researched internal audit findings and the corrective actions taken or suggested by them. Significant audit observations and corrective actions taken and suggested by the management are presented to the Audit Committee of the Board. The Internal Audit function reports to the Chairman of the Company and Audit Committee in order to maintain its independence and objectivity.

RISKS AND CONCERNS

Open cast mines in India face several risk factors, primarily related to safety and environmental impact. These include issues like dust and noise pollution, potential for accidents due to heavy machinery and blasting, and health hazards.

The mining industry has always been risky, with worker safety concerns representing only a portion of the challenges. "Increasingly stringent regulations on quarrying, aimed at mitigating land degradation, are leading to reduced availability of raw materials. Additionally, geopolitical tensions and trade barriers also pose significant risks."

Risk is inherent to a business and may have a varying degree of impact on the achievement of strategic objectives as well as the operations of the business.

Risk Management is performing a series of activities designed to minimise this impact. Based on a comprehensive understanding of business objectives and strategies, and the external and internal environment impacting these objectives, potential risks that could threaten the fulfilment of corporate objectives are identified and are dealt with accordingly.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis Report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic supply and demand conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.