Asian Granito India Ltd Management Discussions

Pursuant to Schedule V to the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis Report covering business performance and outlook (withi limits set by the CompanyRss competitive position) i given below:

AN ECONOMIC OVERVIEW

Global Economy

In 2024, the global economy charted a turbulent course, balancing moderated growth against a backdrop of escalating geopolitical risks, persistent inflation and shifting trade dynamics.

Global real GDP growth has stabilised at 3.3% in 2024, indicating a deceleration from previous years as downside risks have intensified. Policy shifts and increasing uncertainties, exacerbated by geopolitical fragmentation, have curtailed momentum, especially in advanced economies. The era of globalisation, formerly a fundamental aspect of economic order, has transitioned to a landscape characterised by geopolitical tensions.

Geopolitical Risks and Conflicts

Human conflicts such as the Russia-Ukraine war and the Israel-Hamas conflict have disrupted energy and food security, leading to price increases and contributing to inflation. The U.S.-China rivalry, characterised by strategic competition, has altered sourcing patterns and increased tariff risks, while governments in the Asia- Pacific region are prioritising securing critical minerals to enhance industrial resilience.

Cybersecurity Risks

Cyberattacks, as an emerging frontier of global conflict, have escalated in frequency and severity, exploiting the digitisation of critical infrastructure and heightening operational risks.

Persistent Inflation, Monetary Policy

Initially thought to be tamed in early 2024, inflation proved more stubborn than anticipated, lingering into year-end. Central banks face the delicate task of curbing inflation without stifling growth, a challenge compounded by volatile economic conditions. Global trade, reaching a record US$33 trillion in 2024, expanded by 3.7% (US$1.2

trillion), propelled by a 9% surge in services trade and a modest 2% rise in goods. Developing economies, led by East and South Asia, outpaced developed nations, with South-South trade growing 5%.

Manufacturing Performance

Manufacturing showed resilience, particularly in Asia and Oceania, where ChinaRss dynamic Q4 performance led global growth. However, North America and Europe saw production declines in Q3, grappling with trade war risks, volatile inflation and supply chain disruptions. Meanwhile, ESG performance gained prominence in 2024, with companies emphasising social metrics-diversity, equity, inclusion and labour practices-alongside environmental goals. The adoption of ESG due diligence and new regulatory frameworks reflects a growing consensus on its strategic importance.

Outlook

Looking to 2025 and beyond, the global economy faces a pivotal moment. Real GDP growth is projected to slow to 2.8% in 2025 before rebounding to 3.0% in 2026, reflecting persistent challenges from geopolitical tensions, trade disruptions and policy uncertainties. Inflation is becoming more growth-oriented with central banks navigating expansion policies that could ease borrowing costs and pressure currency valuations.

Though stable in early 2025, global trade risks fragmentation as protectionist measures and geoeconomic rivalries threaten to create isolated trade blocs. AsiaRss manufacturing sector, particularly in China and South Asia, will likely continue driving global output, though supply chain risks and trade wars loom. ESG priorities will increasingly shape corporate strategies, with regulatory and stakeholder demands emphasising sustainability and social responsibility.

The U.S. Economy

In 2024, the U.S. economy expanded by 2.8%, driven by increases in consumer spending, investment, government expenditure and exports. The Consumer Price Index (CPI) rose by 2.9% over the year, indicating moderate inflation.

The trade deficit widened by 17% to $918.4 billion, as imports increased by 6.6% and exports by 3.9%. The current account deficit also expanded by 25.2% to $1.13 trillion, reflecting a larger goods trade gap and a shift in primary income balance. 

The labour market remained robust, with the unemployment rate holding steady at 4.1% in December 2024.

Monetary Policy: The Federal Reserve maintained the federal funds rate at 4.25% to 4.50% through the

end of 2024, aiming to balance inflation control with economic growth.

Trade Policy: The U.S. imposed higher tariffs on certain Chinese imports in late 2024, leading to a surge in imports ahead of the tariff implementation and contributing to the record trade deficit.

Outlook

Looking ahead, the U.S. economy faces challenges from elevated inflation and trade tensions. The Federal Reserve continues to monitor economic indicators to guide monetary policy decisions. While consumer spending remains a key driver, potential headwinds include the impact of tariffs and global economic uncertainties.

The European Economy

In 2024, the Eurozone economy experienced modest growth, with real GDP expanding by 0.9% for the year. Quarterly growth rates were 0.4% in Q3 and 0.2% in Q4, indicating a gradual deceleration towards year-end.

Inflationary pressures eased over the year, with the annual inflation rate declining to 2.2% by April 2025, down from higher levels earlier in the year. This moderation was influenced by declining energy prices and subdued demand.

The labour market remained relatively stable, with the Eurozone unemployment rate at 6.3% in December 2024, a slight decrease from 6.5% in December 2023.

Trade performance improved, with the Eurozone recording a trade surplus of €15.5 billion in December 2024, reflecting a positive balance in goods trade.

Monetary Policy: The European Central Bank (ECB) implemented a series of interest rate cuts throughout

2024, reducing the deposit facility rate to 2.25% by December 2024, in response to slowing inflation and economic growth concerns.

Trade Policy: The Eurozone faced external challenges due to global trade tensions, including increased tariffs from the United States on certain EU exports. These developments introduced uncertainties in trade dynamics and potential inflationary pressures.

Outlook

Looking ahead, the Eurozone economy is projected to experience moderate growth, with the International Monetary Fund (IMF) forecasting a GDP expansion of approximately 1.5% for 2025. Inflation is expected to remain near the ECBRss target of 2%, while the labour market is anticipated to stay stable. However, risks persist from geopolitical tensions, potential energy price volatility and the impact of global trade policies.

The Middle East Economy

In 2024, the Middle East and North Africa (MENA) region experienced modest economic growth, with real GDP expanding by 1.9%, according to the World Bank. This growth was influenced by subdued global demand, geopolitical tensions and oil production cuts.

Inflationary pressures varied across the region. While some countries saw easing inflation due to declining global commodity prices, others faced persistent inflation driven by currency depreciations and fiscal pressures.

The labor market remained strained in several MENA countries, with unemployment rates remaining elevated, particularly among youth and women. Structural challenges and limited private sector job creation contributed to these labor market conditions.

Trade balances in the region were affected by fluctuating oil prices and volumes. Oil-exporting countries faced reduced revenues due to production cuts, while oilimporting nations contended with higher energy import bills, impacting their current account balances.

Monetary Policy: Central banks across the MENA region adopted varied monetary policy stances in response to domestic inflationary trends and economic conditions. Some countries maintained tight monetary policies to combat inflation, while others eased rates to support growth.

Fiscal Policy: Fiscal consolidation efforts were evident in several MENA countries, aiming to reduce budget deficits and public debt levels. However, social spending remained a priority to mitigate the impact of economic challenges on vulnerable populations.

Structural Reforms: Governments in the region continued to implement structural reforms to enhance economic diversification, improve the business environment and attract foreign investment. These reforms targeted sectors such as energy, tourism and technology.

Outlook

Looking ahead, the MENA regionRss economic growth is projected to accelerate to 2.6% in 2025, driven by anticipated increases in oil production and continued reform efforts. However, the outlook remains subject to risks, including geopolitical tensions, global economic uncertainties and potential volatility in oil markets. Policymakers will need to navigate these challenges while advancing structural reforms to foster sustainable and inclusive growth.

Indian Economy

In the face of global economic turbulence, the Indian economy in FY25 showcased remarkable resilience, underpinned by robust domestic demand, strategic policy interventions and a vibrant manufacturing sector.

IndiaRss Gross Domestic Product (GDP) growth for the fiscal year 2025 is forecasted to be 6.5%, underscoring the nationRss economic resilience in the face of global challenges. The third quarter experienced a rebound to 6.2%, an improvement from 5.6% in the second quarter, propelled by robust private consumption and government expenditures in sectors such as construction, trade and financial services.

Inflation Trends

Inflation has notably reduced, with Consumer Price Index (CPI) inflation decreasing to a seven-month low of 3.6% in February 2025, attributed to a significant decline in vegetable prices.

Core inflation edged up to 4.08%, signalling persistent price pressures, while imported inflation surged to 31.1%, fueled by rising costs of precious metals, oils and fats. Rural inflation outpaced urban trends, reflecting food price volatility.

Trade and External Sector

Trade dynamics presented a mixed picture. Exports grew marginally by 0.1% to US$395.6 billion from April 2024 to February 2025, with electronics, rice and ores performing strongly. However, in February, merchandise exports fell 10.9% year-on-year due to weak global demand and base effects. Imports rose 5.7% to US$656.7 billion, driven by gold, electronics and petroleum, but a 16.3% decline in February narrowed the trade deficit, aided by reduced oil and gold imports.

The current account deficit remained sustainable, cushioned by robust services exports and remittance inflows, with foreign exchange reserves at US$676.3 billion by April 2025, covering nearly 11 months of imports.

Currency and Capital Flows

The Indian rupee faced volatility, depreciating 2.4% in FY25, with a sharp 4% slide post-U.S. elections due to a stronger dollar and persistent foreign portfolio investor (FPI) outflows from equity markets. Yet, the rupeeRss performance was relatively stable compared to other global currencies and a late-year rally, supported by FPI debt inflows and a softening dollar, saw it recover 2.4% in a single month.

Manufacturing and Industrial Activity

Manufacturing maintained momentum, with the HSBC India Manufacturing PMI hitting a 10-month high of 58.2 in April 2025, driven by export orders and consumer goods demand. The Index of Industrial Production (IIP) grew 5.0% in January 2025, led by manufacturing and mining, though IIP growth in FY25 slowed to 4%, reflecting global trade challenges.

ESG Initiatives, Monetary and Fiscal Policy

ESG considerations gained prominence, with IndiaRss budget introducing tax incentives for net-zero targets and a Green Finance Framework to support sustainable infrastructure. These measures align with global trends to enhance sustainability credentials through responsible sourcing and community engagement.

Monetary policy adapted to evolving conditions, with the Reserve Bank of India (RBI) cutting the repo rate by 25 basis points to 6% in April 2025, following a 75-basis-point reduction earlier in the year.

Fiscal discipline faced scrutiny as the fiscal deficit remained a concern, though government spending on infrastructure sustained economic momentum, with toll collections and E-way bills posting double-digit growth. IndiaRss debt profile, while manageable, requires careful monitoring amid global volatility.

Taxation and Reforms

Tax reforms, including ESG-linked incentives, aim to bolster revenue while promoting sustainability. The trade deficit narrowed, supported by declining imports, but weak global demand poses ongoing risks. Corporate performance remained robust, with Q3FY25 revenue, EBITDA and PAT growth at 6.2%, 11% and 12%, respectively, reflecting strong domestic fundamentals.

Union Budget 2025 for Real Estate- Present and Future

The Union Budget 2025 adopts a continuity-driven approach aligned with IndiaRss long-term economic ambitions and while it refrains from introducing sweeping sector-specific reforms, it lays down multiple indirect yet strategic enablers for the real estate sector.

Contributing approximately 7% to IndiaRss GDP, real estate, spanning residential, commercial and rental segments, has been a key pillar of economic growth. The sector stands to benefit from several budgetary measures aimed at boosting consumption, infrastructure development and housing affordability.

One of the notable fiscal developments is tax rationalisation, including cuts in personal income tax rates. This is expected to enhance disposable incomes and positively influence home-buying decisions, particularly among younger demographics. In addition, raising the TDS threshold on rental income from C2.4 lakh to C6 lakh is a compliance relief and likely to incentivise greater participation in the rental housing market.

The government also renewed its support for affordable and mid-income housing, announcing a second round of the SWAMIH fund with a C15,000 crore outlay. This measure aims to address stalled projects, improve liquidity and revive buyer confidence-factors crucial for sustained growth in the residential segment.

Infrastructure remained a central theme, with a projected capital expenditure of C15.5 lakh crore for FY26. The proposed three-year PPP pipeline for infrastructure ministries, coupled with C1.5 lakh crore interest-free loans to states, is expected to stimulate regional development and unlock demand in Tier 2 and Tier 3 markets. The newly introduced C1 lakh crore Urban Challenge Fund will further empower municipalities to raise development capital, catalysing urban real estate growth.

From a commercial real estate perspective, the governmentRss focus on Global Capability Centres (GCCS), with a national framework to support expansion, is significant. India is projected to house over 2,100 GCCS by 2030, escalating demand for high-grade office space and enhancing IndiaRss profile as a business hub.

The hospitality and tourism-linked real estate sector also gained traction, with initiatives such as simplified e-visa processes, promotion of 50 tourist destinations and targeted support for homestays through MUDRA loans. These steps aim to deepen investor interest and broaden the sectorRss capital base.

While expectations around increased home loan deduction limits and affordable housing caps remained unmet, the Budget 2025 reinforces macroeconomic stability and supports sectoral growth through broader enablers. As India progresses towards its $7 trillion GDP target, real estate is poised to play an increasingly central role-driven by policy continuity, infrastructure augmentation and rising consumer confidence.

Source: https://kpmg.com/in/en/blogs/2025/02/five-ways-in-which-budget-2025- impacts-the-real-estate-sector.html

Outlook

Looking ahead to FY26 and beyond, IndiaRss economy is poised for steady growth, with real GDP projected at 6.5% in FY26, with quarterly estimates of 6.5% in Q1, 6.7% in Q2, 6.6% in Q3 and 6.3% in Q4, rising to 6.7% in FY27.

CPI inflation is expected to remain within the RBIRss 4% target band, projected at 4.0% for FY26, with quarterly figures of 3.6% in Q1, 3.9% in Q2, 3.8% in Q3 and 4.4% in Q4, supported by easing food prices and stable crude oil costs, though weather-related risks persist. The rupee is anticipated to trade between 85.5 - 87.5 against the dollar in FY26, bolstered by improved growth, lower inflation and stable external deficits, despite potential volatility from U.S. tariff policies.

Manufacturing is set to gain traction, driven by export orders and Production-Linked Incentive schemes, with the sectorRss GDP contribution expected to rise incrementally. The current account deficit will likely remain sustainable, supported by resilient services exports and remittances. ESG compliance will deepen, with fiscal incentives and regulatory frameworks driving sustainable practices.

However, global trade tensions, FPI outflows and fiscal pressures could challenge this trajectory.

Sources: (https://www.bankofbaroda.in/-/media/project/bob/countrywebsites/ india/economic-scenario/monthly/2025/bob-economics-inr-performance-02-14. pdf ) (https://www.pib.gov.in/PressReleasePage.aspx?PRID=2113316 ) (https:// www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2120509)(https://www.mdia- briefing.com/news/india-manufacturing-tracker-2024-25-33968.html/ ) (https:// www.ibef.org/news/india-s-manufacturing-pmi-hits-10-month-high-of-58-2-in- april-iip-rebounds ) (https://www.esgtimes.in/esg/policy/india-unveils-ambitious- green-energy-esg-initiatives-in-budget-2025/#:~:text=Financial%20Reforms%20 and%20ESG%20Compliance,%2C%20and%20public%2Dprivate%20partnerships. )

SECTORAL OVERVIEW

1) The Tile Industry

Global Tile Industry

In 2024, the global ceramic tile industry recovered steadily, driven by strong construction and rising urbanisation in developing economies. Demand was strong in the Asia- Pacific and Middle East, with India, Vietnam and Indonesia emerging as sourcing hubs due to competitive costs and improved quality. Innovations like digital printing and large-format designs gained acceptance, allowing manufacturers to meet evolving architectural preferences.

The sector encountered substantial challenges. Geopolitical disruptions, specifically the Red Sea crisis, pressured global logistics, elevated freight rates and prolonged lead times. Nations dependent on exports became increasingly susceptible due to volatile trade dynamics and rising protectionism, particularly in the United States and certain regions of Europe. Investigations into anti-dumping practices, alongside subdued construction demand in select Western markets, resulted in cautious purchasing behaviour. Nevertheless, despite these difficulties, the global industry benefited from comprehensive infrastructure initiatives and sustainable construction practices, laying the groundwork for future growth.

Indian Tile Industry

The Indian ceramic tile industry, with growing exports to key global markets, is critical in the global platform. It is a preferred sourcing destination for global buyers due to its cost advantage, improved manufacturing efficiencies and maturing design capabilities.

Impact of U.S. Tariff Escalation on the Indian Tile Industry

On April 10, 2025, the United States announced a landmark tariff escalation on imports from China, raising the effective duty on Chinese ceramic tile imports to 125%, comprising a base tariff of 105% and a 20% add-on related to concerns over fentanyl trade. This aggressive trade measure marks a dramatic shift in the competitive landscape of the U.S. ceramic tile market, where China previously held a significant 22% share.

By contrast, Indian ceramic tile exports to the U.S. now face a much lower 26% tariff, positioning India as a prime contender to capture the displaced Chinese market share, estimated at 64.3 million square meters, valued at approximately USD 483.1 million. Comparatively, other competing countries like Vietnam (46%), Taiwan (32%)

and South Korea (25%) face steeper tariffs than India, reinforcing IndiaRss competitive advantage.

While U.S. manufacturers may attempt to close the production gap (with a potential capacity increase of 24 million square meters), logistical and cost-related constraints are likely to limit domestic substitution in the near term. This presents a strategic window of opportunity for Indian exporters, especially those based in Morbi.

Immediate and medium-term response strategies recommended for Indian exporters include targeting former Chinese distributor networks, proactive tariff- based client communication, tiered pricing models and enhanced credit terms with ECGC coverage. Aligning product offerings to U.S. preferences—such as non- rectified 30x60 cm porcelain and R10 surface tiles—and investing in warehousing, shipping visibility and design R&D will be crucial to securing long-term market positioning.

Additionally, a concurrent anti-dumping and countervailing duty investigation initiated by the U.S. Department of Commerce in 2024 poses a separate, ongoing challenge. Preliminary findings issued in late

2024 indicated no dumping margins for Indian tiles and only modest countervailing duties (ranging from 3.05% to 3.15%). Final determinations are scheduled for April 17,

2025 and remain critical to future trade stability.

In conclusion, the current U.S. tariff environment creates an unprecedented export opportunity for Indian ceramic tile manufacturers. With decisive strategic alignment, Morbi-based exporters stand well-positioned to gain significant ground in the U.S. market—both in terms of volume and long-term distributor partnerships—while diversifying away from traditional reliance on price- sensitive segments. The sector also benefits from robust residential real estate activity, rapid urbanisation and government-backed infrastructure initiatives such as PMAY and Smart Cities Mission.

Performance in FY25

The fiscal year 2025 was marked by emerging challenges. While IndiaRss tile exports touched a record 590 million square meters in FY24, up 28% year-on-year, early indicators in FY25 suggest a slowdown.

A softening of demand in Europe and potential antidumping duties from the U.S. have introduced volatility into export order flows.

Dark patch

Tiles exports in 9MFY25 were weak owing to muted demand and elevated freight rates.

Domestic demand also remained tepid owing to the delayed completion of real estate projects. Moreover, heightened competition from the informal sector (which diverted its output to the domestic market) impacted demand and eroded business margins. Prominent national

branded players reported pressure on their financial performance owing to these headwinds. Additionally, some manufacturers in Morbi, the tile hub of India (cluttered with informal players), shut operations owing to unviable market trends.

The organised players sharpened their focus on cost optimisation to enhance their competitive edge. They also worked on other operational aspects such as automating mundane operations, adopting digital technologies and implementing green manufacturing practices to reinforce their long-term competitiveness.

Outlook

Looking ahead, the ceramic tiles industry—both globally and in India—is poised for continued growth, underpinned by structural demand drivers and increasing consumer inclination toward quality, design and sustainability.

Globally, the ceramic tiles market is projected to expand from US$130.96 billion in 2025 to US$176.86 billion by 2029, registering a CAGR of 78%. Growth is expected to be led by emerging markets in Asia-Pacific and Latin America, alongside rising renovation and remodelling activity in developed economies.

In India, the ceramic tile market is forecast to grow from US$10.45 billion in 2025 to US$19.71 billion by 2030, at a CAGR of 13.54%. Volume consumption is expected to reach 1,666.92 million square meters by 2033, as residential and commercial construction demand accelerates. The sector will also benefit from rising exports once trade- related uncertainties subside.

2) The Marble Industry

Global Marble Industry

In 2024, the global marble industry exhibited consistent growth, underpinned by sustained demand in the construction, interior design and landscaping sectors. The market was appraised at approximately US$68.50 billion in 2024, with tiles and slabs ranking as the foremost product categories. The Asia-Pacific region, particularly countries such as China and India, continued to be significant contributors to the production and consumption of marble. Nonetheless, the industry encountered environmental concerns pertaining to quarrying practices and the imperative for sustainable extraction methods. Furthermore, fluctuations in raw material costs and regulatory pressures in various nations required adjustments in operational strategies. Notwithstanding the challenges, the global market is expected to grow from US$71.31 billion in 2025 to US$98.34 billion by 2033, at a CAGR of 4.1%.

Indian Marble Industry

During the period of FY2025, the marble industry in India continued to experience a positive growth trajectory, fuelled by strong demand arising from both residential and commercial construction projects. As of 2024, the market was valued at approximately US$4.02 billion and is anticipated to attain a valuation of US$6.21 billion by the year 2030, reflecting a CAGR of 7.36%. IndiaRss abundant natural resources and skilled artisanship establish the nation as a significant participant in the global marble market. However, the industry faced several challenges, including stringent environmental regulations that adversely affected mining operations. Furthermore, competition posed by alternative materials and the necessity for technological advancements in processing presented obstacles to ongoing growth.

Sources: (https://www.globenewswire.com/news-release/2025/01/21/3012401/0/ en/Marble-Market-Size-to-Worth-USD-98-34-billion-by-2033-at-a-CAGR-of-4- 1-Straits-Research.html ) (https://www.techsciresearch.com/report/india-marble- market/4311.html )

3) The Quartz Industry

Global Quartz Industry

In 2024, the global quartz market demonstrated resilience, with a market size of US$7.38 billion and an anticipated CAGR of 5.00% from 2024 to 2031. The materialRss versatility found applications across electronics, construction and decorative sectors. However, the industry faced disruptions due to natural events; notably, Hurricane Helene in North Carolina halted production of ultra-pure quartz, essential for semiconductor manufacturing, highlighting the fragility of the supply chain.

Indian Quartz Industry

In FY2025, IndiaRss quartz industry experienced moderate growth, with a market share of US$203.72 million in 2024 and a projected CAGR of 8.8% between 2024 and 2031. Applications in construction and electronics fuelled the demand. However, competition from natural quartz and the need for cost-effective manufacturing processes affected the synthetic quartz segment.

Sources: (https://www.cognitivemarketresearch.com/quartz-market-report ) (https:// subs.ft.com/products ) (https://www.cognitivemarketresearch.com/regional-analysis/ asia-pacific-quartz-market-report ) (https://www.6wresearch.com/industry-report/ india-synthetic-quartz-market )

4) The Sanitaryware Sector

Global Sanitaryware Industry

In 2024, the global sanitaryware industry experienced steady growth driven by increasing urbanisation, rising hygiene awareness and demand for sustainable and water- efficient products. The market was valued at approximately US$36.68 billion in 2024, with Asia-Pacific and South America contributing significantly to this growth. However, the industry faced supply chain disruptions and fluctuating raw material costs. Additionally, the need for sustainable practices and compliance with environmental regulations necessitated investments in eco-friendly manufacturing

processes. Over the medium term, the global sanitaryware market is expected to expand from US$42.979 billion in 2025 to US$53.312 billion by 2030, growing at a CAGR of 4.40%.

Indian Sanitaryware Industry

During FY2025, IndiaRss sanitaryware industry maintained its growth trajectory, supported by government initiatives like Swachh Bharat Abhiyan and increasing urbanisation. The market was valued at US$812.17 million in 2023 and is projected to reach US$1,336.95 million by 2030, reflecting a CAGR of 7.38%.

Nevertheless, the industry contended with challenges including high raw material costs, intense competition from unorganised players and limited awareness of smart and sustainable solutions among consumers.

Sources: (https://www.precedenceresearch.com/ceramic-sanitary-ware-market ) (https://www.openpr.com/news/3962133/india-s-sanitary-ware-market-poised- for-robust-growth-amidst ) (https://www.techsciresearch.com/report/india- sanitary-ware-market/17359.html ) (https://www.knowledge-sourcing.com/report/ global-sanitary-ware-market ) (https://www.globenewswire.com/news-relea se/2025/01/30/3017784/28124/en/Global-53-3-Bn-Sanitary-Ware-Market-Forecasts- from-2025-to-2030-with-Asia-Pacific-Projected-to-Lead.html ) (https://www.linkedin. com/pulse/future-ceramic-sanitary-ware-market-trends-kjbvc )

Outlook for IndiaRss Real Estate Sector (FY26 and Beyond):

IndiaRss real estate sector is positioned for sustained expansion, driven by policy continuity and a strategic focus on infrastructure, urban development and housing finance. Key enablers include the expansion of the SWAMIH fund to revive delayed projects, capital expenditure allocations aimed at boosting regional growth and new urban incentive schemes encouraging municipal-level funding. The growing demand in Tier-2 and Tier-3 cities, coupled with increased interest from global companies, reinforces a strong medium- to long-term growth trajectory.

Source: https://timesofindia.indiatimes.com/business/india-business/five-ways-in- which-budget-2025-impacts-the-real-estate-sector/articleshow/118138199.cms

Outlook for IndiaRss Residential Real Estate Sector (FY26 and Beyond)

IndiaRss residential real estate market is anticipated to experience a moderation in price growth during FY26, primarily due to an increase in supply and a noticeable decline in the availability of affordable housing units. While the increase in housing supply may offer more options to buyers, the declining emphasis on affordable housing necessitates strategic interventions to ensure equitable growth across all income segments.

Price Trends and Supply Dynamics

After witnessing significant price surges in the previous fiscal years, the market is expected to stabilise. This deceleration is attributed to the normalisation of postpandemic pent-up demand and a surge in new project launches, which have increased the overall housing inventory. While this may lead to more balanced pricing, it also raises concerns about potential oversupply in certain segments.

Affordable Housing Segment

A significant concern is the declining supply of affordable housing units. Despite the overall increase in housing projects, the share of affordable homes has diminished. This trend poses challenges for middle- and lower-income groups seeking homeownership, as the market shifts focus towards mid-income and luxury segments.

Market Segmentation and Demand

The demand in the mid-income and luxury housing segments remains robust, driven by urbanization and the aspirations of the growing middle class. However, the imbalance created by the reduced focus on affordable housing could lead to long-term issues in housing accessibility and inclusivity.

Source: https://www.outlookmoney.com/real-estate/residential-property-prices- expected-to-moderate-in-fy26-amid-surge-in-supply-noticeable-decline-in-supply- of-affordable-units

Outlook for IndiaRss Commercial Real Estate Sector (FY26 and Beyond)

IndiaRss commercial real estate (CRE) sector is projected to grow by 5-6% year-on-year in FY26, reaching a total inventory of approximately 1,360 million square feet, according to India Ratings and Research (Ind-Ra).

Supply and Absorption Dynamics

New office supply is expected to decline to about 52 million square feet in FY26, down from an anticipated 106 million square feet in FY25. This reduction is attributed to a more balanced supply-demand scenario, with absorption likely to grow at a faster rate of 7-8% year-on-year in FY26, compared to 21% in FY25.

Mumbai Metropolitan Region (MMR) and Chennai are expected to lead the absorption rally, with projected growth rates of 60% and 22%, respectively. The underconstruction supply to absorption ratio improved to 4.96x in FY24 from 6.83x in FY23 and is expected to further drop

to a range of 4x-4.25x in FY25 and FY26, indicating a robust demand scenario. ([ETRealty.com][1])

Leasing Activity and Rental Trends

Leasing activity is anticipated to remain strong, with record leasing expected at around 60 million square feet in FY25 and 64 million square feet in FY26. This momentum is driven by increased demand from Global Capability Centers (GCCs), engineering, banking, financial services and insurance (BFSI) and co-working segments.

Despite the robust leasing activity, rental growth is expected to be moderate at 3-5% year-on-year in FY26, due to contracted growth rates and market-to-market negotiations. Property prices are projected to grow modestly at 2-3% year-on-year in FY26, compared to 3-7% in FY25, potentially leading to slight improvements in rental yields.

Outlook for IndiaRss Retail Real Estate Sector (FY26 and Beyond)

IndiaRss retail real estate sector demonstrated resilience in 2024 despite a sharp contraction in new supply. Retailers leased 8.1 million square feet across shopping malls and prominent high streets, underscoring sustained demand for quality retail locations. However, new retail space additions were limited to 1.7 million square feet across seven developments, representing a 73% year-over-year decline, which curtailed potential expansion for retailers seeking premium spaces.

Despite this supply-side constraint, the sector witnessed only a 6% dip in leasing activity compared to 2023, highlighting the strength of underlying demand, particularly from the fashion and apparel categories, which continued to lead retail leasing.

Domestic players were dominant in 2024, accounting for over 80% of total leasing, roughly 6.5 million square feet, while international brands maintained steady interest. A

notable trend was the growing presence of Direct-to- Consumer (D2C) brands, which leased approximately 0.6 million square feet, or 8% of total leasing volume, as part of their physical retail expansion strategy. These brands leveraged both malls and high streets equally, using physical presence to deepen consumer engagement and enhance brand visibility.

Looking ahead, the constrained supply of new retail space may pose challenges for expansion in the short term. However, the consistent leasing momentum signals robust demand fundamentals. Domestic and D2C brands are expected to remain major growth drivers, supported by rising consumption and strategic investments in omnichannel presence. The sectorRss growth trajectory will likely be shaped by how quickly new supply is added and how effectively developers respond to evolving retail formats and consumer expectations.

Growth Drivers

1. Continued Housing Push with Higher Budget Allocations

Budget 2025-26 has reinforced its focus on affordable housing by allocating C19,794 crore to PMAY-Urban and C3,500 crore to PMAY 2.0, marking increases of 45% and 133% respectively over the previous year. In parallel, the government has launched the next phase of PMAY-Gramin, aiming to construct 2 crore additional homes between FY 2024-29 with a total outlay of C3.06 lakh crore. These developments are expected to fuel sustained demand for tiles, sanitaryware and bath fittings.

2. Uplift in Urban Infrastructure Budget

The Ministry of Housing and Urban Affairs (MoHUA) received C96,777 crore in Budget 2025-26—a 52% jump over the revised estimate for FY 2024-25. Key allocations include C10,000 crore towards the new Urban Challenge Fund, along with increased support for AMRUT, Swachh Bharat Mission and PM e-Bus Sewa. This significantly boosts the ecosystem for tiles and sanitaryware through renewed public infrastructure and sanitation projects.

3. Untapped Potential in Per Capita Consumption

IndiaRss per capita tile consumption remains at approximately

0.6 square meters—far lower than the global average of 1.4 square meters and significantly below China (4.0) and Brazil (3.4). This wide gap underscores a substantial opportunity for long-term domestic demand growth, especially in semi-urban and rural markets.

4. Rise in Demand for Design-Focused and Hygiene-Driven Products

Consumer preferences are shifting toward value-added surface solutions, such as digitally printed tiles, germ- resistant finishes, 3D textures and engineered quartz. These products appeal to evolving aesthetic sensibilities while meeting heightened expectations around cleanliness and maintenance.

5. Policy and Trade Measures Supporting Domestic Industry

Government-imposed anti-dumping duties on imports of luxury vinyl and gypsum tiles from China and Taiwan are helping to create a level playing field for Indian manufacturers. In addition, initiatives like the MSE-CDP, CLCSS and NMCP, along with national campaigns such as RsMake in IndiaRs and RsVocal for Local,Rs continue to foster capacity-building and technology adoption across the sector.

6. Real Estate Expansion Across Urban and Tier M/III Cities

The growing demand for office, retail and hospitality infrastructure in Tier II and Tier III cities is expanding the addressable market for tiles and bathware. According to industry projections, India is expected to require approximately 2.7 billion sq. ft. of office space by CY 2034, indicating strong long-term visibility for surface solution providers.

The Company & Its Performance Company Overview

Since its inception, Asian Granito India Limited has redefined industry standards, emerging as one of IndiaRss largest ceramic companies within two decades.

Headquartered in Ahmedabad, Gujarat, the company operates 14 ultra-modern manufacturing facilities across Dalpur-Himmatnagar, Mehsana, Morbi, Dholka and Idar, with a daily installed capacity of 1,58,920 square meters, including 37,300 square meters through contract manufacturing.

Its product portfolio spans ceramic, polished vitrified, glazed vitrified and double-charged tiles, alongside engineered marble, quartz, sanitaryware, faucets and construction chemicals. With a distribution network encompassing over 14,000 touchpoints, 2,700 distributors, dealers and sub-dealers, 277 exclusive franchisee showrooms and 13 company-owned display centres, the company ensures nationwide and global reach.

Asian Granito India Limited exports to over 100 countries, with export revenue contributing significantly to its topline.

Strategic initiatives, such as incorporating subsidiaries in the USA, UK, Dubai, Thailand and Indonesia and a joint venture in Nepal through Nepovit Ceramic Pvt Ltd., underscore its global ambitions.

The companyRss focus on innovation, backed by technical collaborations with SACMI, Italy and a world-class Quality

Management System, has positioned it as a trusted name in luxury surfaces and bathware solutions.

Business Performance

In FY25, Asian Granito India Limited delivered a resilient performance despite global economic challenges and competitive pressures in the ceramic industry.

Consolidated sales reached C 1,558 crores, reflecting the companyRss ability to navigate a volatile market environment.

The tiles segment, encompassing ceramic, polished vitrified, glazed vitrified and double-charged tiles, recorded revenue of C1,308 crores, compared to C1,145 crores in FY24, supported by a prudently balanced presence in the domestic market and strategic exports. Export revenue stood at C291 crores, contributing 19% to total sales.

The marble and quartz business generated C191 crores, while the sanitaryware and bathware division contributed C59 crores, reflecting successful diversification efforts.

Production volumes across tiles, marble, quartz and bathware reached 44.73 million square meters and 0.18 million pieces, respectively, with capacity utilisation at 70% for tiles and 40% for marble and quartz.

The companyRss focus on high-margin, value-added products and operational efficiencies supported financial stability, though challenges such as raw material cost volatility and competitive pricing persisted.

Performance of the Tiles Business

Snapshot

• Manufacturing facilities: Dalpur-Himmatnagar, Mehsana, Morbi, Dholka and Idar

• Installed capacity: 1,58,920 sq. mtrs. daily (including 37,300 sq. mtrs. of contract manufacturing)

• Production volume in FY 2024-25: 43.92 mn sq. mtrs.

• Total Consolidated Sales in FY 2024-25: C 1,308 crores

• Capacity utilization: 70%

• Contribution of Tiles in total revenue: 84%

Business Overview

We manufacture tiles under four verticals, namely, ceramic, polished vitrified, glazed vitrified and double charged. The tile revenue (including own manufacturing, subsidiary and outsourcing) stood at C1,308 crores in FY 2024-25 compared to C1,145 crores in FY 2023-24. Exports revenue stood at C291 crores, contributing 19% to total sales.

Operational Strength

We offer a wide range of products available in various sizes, polishes and finishes. With a robust distribution network, substantial production capacity and technologically advanced manufacturing units, we have established a strong presence in the Indian ceramic tiles sector. We are committed to develop innovative and value-added products to meet the evolving requirements of our customers worldwide. Furthermore, in a strategic move, we have entered into a joint venture agreement with Nepalese stakeholders and incorporated a new company, Nepovit Ceramic Pvt Ltd. as a Joint Venture Company (JVC). This venture aims to establish a manufacturing unit for wall tiles in Nepal. Additionally, we expanded our operations by founding wholly owned subsidiaries in the USA, UK and Dubai. These expansions are expected to strengthen our operational footprint and market presence in these regions.

Retail Strength

We have a robust franchise network that includes 277 exclusive franchisee-owned and franchise-operated outlets, along with 13 Company-Owned display centres. Additionally, our RsAGL Export HouseRs, in Morbi, is dedicated to enhancing our export capabilities. We aim to expand our network to over 20,000+ touchpoints and 300+ exclusive brand showrooms.

Performance of the Marble and Quartz Business

Snapshot

• Manufacturing facilities: Dalpur

• Installed capacity: 2.02 mn P.A.

• Capacity utilization: 40%

• Production volume in FY 2024-25: 0.81 mn sq. mtr.

• Consolidated revenue in FY 2024-25: C191 crores

• Contribution to the total revenue FY 2024-25: 12%

Operational Strength

Leveraging over two decades of industry experience, we excel in delivering unique and innovative products driven by strong R&D capabilities and a deep understanding of consumer needs. Our product portfolio includes multicolour quartz with 99.9% silica content, surpassing the industry standard of 97% silica concentration. Additionally, our Quartz product range includes various products available in 20 mm and 30 mm thicknesses, which exceed the common 15 mm thickness available in the market. These unique and superior products enable us to garner high dividends from our satisfied clientele.

Performance of the Sanitaryware Business

Snapshot

• Bathware manufacturing capacity: 200 Pieces per day

• Production volume in FY 2024-25: 0.18 mn pieces

• Consolidated revenue in FY 2024-25: C59 crores

We ventured into bathware, which facilitated a strategic diversification of our product portfolio. Previously dependent on third-party vendors and contract

manufacturing, the establishment of a new sanitaryware plant has propelled another phase of growth for our company. AGL Bathware offers 300+ SKUs of faucets, showers and bathware accessories, complementing our previously launched sanitaryware and CP fittings range. Within this business segment, we offer comprehensive bathroom solutions. Our goal is to establish a robust presence in the domestic bathware market by leveraging our extensive distribution network and strong brand reputation. Additionally, we aim to establish a dedicated network of over 2,000+ touchpoints through more than 500 distributors for faucets and sanitaryware in the coming months. We aspire to become a leading player in the sanitaryware sector and anticipate a turnover of ~ C 400 crore from our Sanitaryware and Bathware division over the next five years.

Culture of Quality at AGL

At AGL, a steadfast commitment to robust quality forms the cornerstone of our operations, positioning us as reliable partners of quality and durability in both Indian and international markets. Upholding standards of quality, design and safety is not just a priority but a defining principle that permeates every facet of our business.

Our reputation for delivering good quality products stems from rigorous quality control processes and the use of effective tools to maintain and enhance these standards. By integrating technology and fostering a culture of innovation through robust development, we consistently develop good-quality products that meet the diverse needs of institutional and retail customers. This dedication ensures strict adherence to international quality standards, reinforcing our brand equity globally.

The culture of quality at AGL drives customer satisfaction, attracts new clientele and enables us to command a premium in the market. It fuels organizational growth and creates long-term value for shareholders, solidifying our position as a trusted leader in the industry.

Financial Performance

Asian Granito reported a stellar performance in FY25, which added further to its Silver Jubilee celebrations. The companyRss all-around improvement in business growth and profitability, despite an otherwise dismal external environment, showcases the relevance and resilience of its operating model and highlights the timely execution of its business strategies.

Financial Review

Particulars	FY2024-25	FY2023-24	Change YoY (%)
Revenue from Operations	1,558.52	1,530.59	1.79
EBITDA	75.72	50.98	32.67
EBITDA Margin	4.86%	3.33%	1.53
PBT	7.82	(14.93)	290.92
PAT	20.24	(20.07)	199.16
PAT Margin	1%	(1.33%)	2.33
EPS	2.03	(1.00)	149.26

Profit and Loss Account Analysis FY 2024-25

• Total Income: Revenue from operations stood at C1,558.52 crores in FY 2024-25 compared to C1,530.59 crores in FY 2023-24, reflecting a 1.79% year-on- year growth.

• EBITDA & EBITDA Margin: EBITDA increased to C75.72 crores in FY 2024-25, as against C50.98 crores in FY 2023-24, supported by improved operational efficiency and cost optimisation. The EBITDA Margin for FY 2024-25 stood at 4.86% compared to 3.33% in FY 2023-24.

• PBT: Profit before tax improved significantly to C7.82 crores in FY 2024-25, compared to C(14.93) crores in the previous year.

• PAT & PAT Margin: The Company recorded a net profit of C20.24 crores in FY 2024-25, compared to a loss of C(20.07) crores in FY 2023-24. The PAT Margin improved to 1% from (1.33%) in the previous year.

• EPS: Earnings per share stood at C2.03 per share in FY 2024-25, compared to C(1.00) per share in FY 202324.

Balance Sheet Analysis - FY 2024-25

• Consolidated Net Worth: Our consolidated net worth stood at C1377.97 crores as on 31 March, 2025, compared to C1,280 crores as on 31 March, 2024.

• Consolidated Loan Profile: Total long-term debt for FY 2024-25 stood at C272 crores compared to C235 crores in FY 2023-24.

Key financial ratios with details of significant changes

Particulars	FY 2024-25	FY 2023-24	Change (%)	Reason for Change
Inventory Turnover	8.58	7.53	13.99%
Interest Coverage Ratio	3.79	3.87	-1.95%
Debt-Equity Ratio	0.09	0.04	111.15%	Due to increase in borrowing during the year
Operating Profit Margin (%)	2.37%	5.38%	-55.87%	Due to decrease in profit during the year
Net Profit Margin (%)	2.13%	2.27%	-5.99%	Due to decrease in profit during the year
Return on Net Worth (%)	2.06%	2.37%	13.19%	Due to decrease in profit during the year

Internal Control and Its Adequacy

Asian Granito India Limited maintains a robust internal control framework tailored to the scale and complexity of its operations, ensuring operational efficiency, asset protection and regulatory compliance. The system encompasses well-documented processes for financial

and operational functions, safeguarding sensitive data, preventing fraud and ensuring accurate accounting. Regular audits by an independent internal audit team evaluate the adequacy and effectiveness of controls, reporting deviations to the Management and Audit

Committee for prompt corrective action. The integration of most branches with the Head Office via electronic systems enhances oversight and compliance.

The Company maintains a robust Internal Control System compliant with Section 134(5)(e) of the Companies Act, 2013, ensuring efficient business operations, adherence to policies, asset protection, fraud prevention and

detection, accurate accounting records and timely reliable reporting. Standard controls are regularly evaluated to enhance processes through updated guidelines and necessary SOP revisions. The and its internal audit charter, approved by the Audit Committee, ensures alignment with best practices, fostering reliable financial reporting and operational integrity.

Sustaining Leadership through Differentiation and Scale

Asian Granito is well-positioned to consolidate its leadership in IndiaRss fast-evolving surfaces and bathware industry. By fusing innovation with scale and design excellence with global outreach, AGL is laying the foundation for its next phase of growth. The companyRss forward-looking strategies —focused on product innovation, supply chain integration, market expansion and digital transformation—will help it capture untapped demand in both domestic and international markets, particularly in the premium and institutional segments.

With continued investment in technology, sustainability and global distribution, AGL is poised to become one of the reputed global players in luxury surfaces and sanitary solutions.

Human Resource

Asian Granito views human capital as the cornerstone of its organisational growth and long-term success. The Company attributes its achievements to a highly skilled, passionate and committed workforce. Through a comprehensive HR framework, Asian Granito ensures a workplace that fosters inclusivity, motivation and fairness.

Employee development is a strategic priority, with regular training and upskilling initiatives designed to keep teams aligned with evolving business needs. Its employeecentric policies contribute to enhanced productivity, satisfaction and retention. The CompanyRss open-door culture and commitment to transparent communication nurture strong bonds between management and staff, fostering a culture of respect and engagement.

Merit-driven recognition and performance-based rewards encourage a spirit of excellence and ambition. This people-first philosophy not only strengthens internal unity and loyalty but also positions Asian Granito as an attractive destination for emerging talent seeking a meaningful and growth-oriented career.

As of 31 March 2025, Asian Granito employs over 1,000+ professionals, each contributing to a dynamic ecosystem where personal and professional development go hand in hand.

Information Technology

We have integrated advanced automation throughout our production, market research, product development and distribution processes. This has led to a substantial increase in operational efficiency and productivity. By streamlining workflows and reducing redundancies, modern technology has also played a key role in lowering costs and improving employee performance.

Risk Management

The organisationRss comprehensive risk management framework proactively identifies, monitors and mitigates internal and external risks.

Competitive threats from the unorganised tile market are addressed through innovation, superior quality and cost- efficient processes, which are reinforced by robust research and development alongside a strong distribution network.

Product obsolescence is countered through continuous market research and the introduction of specialised, technologically advanced products. The safeguarding of brand reputation is achieved through customer-centric innovations and dealer engagement campaigns. Substitution risks are mitigated by adapting offerings to meet the evolving needs of consumers, while operational risks are managed through stringent internal controls and periodic audits.

Note

Except stated otherwise, all figures, percentages, analysis, views and opinions are on consolidated financial statements of Asian Granito India Limited and its wholly-owned subsidiaries (jointly referred as AGL or Company, hereinafter). Financial information presented in various sections of the Management Discussion and Analysis is classified under suitable heads, which may be different from the classification reported under the Consolidated Financial Statements. Some additional financial information is also included in this section, which may not be readily available from the Consolidated Financial Statements. Previous yearRss figures have been regrouped, wherever necessary, to make it comparable with the current year.

	For and on behalf of the Board of Directors
	Kamleshkumar B. Patel
Place: Ahmedabad	Chairman and Managing Director
Date: 29 May, 2025	DIN: 00229700