Astral Ltd Management Discussions

GLOBAL ECONOMY

The global economy grew at a stable ….…% in ‚"‚ƒ amidst another year of complex geopolitical and trade environment. Advanced economies grew ˆ.†% with United States recording strong ‚.†% growth driven by resilient domestic demand and continued investments in AI and digital technologies. The euro area expanded by ".†%, reflecting weaker industrial activity and cautious consumer spending.

Emerging markets grew by „.…% supported by domestic consumption, infrastructure investments, and favourable demographic trends. India continued to be the fastest growing large economy. The World Economic Outlook projects the world economy to grow ….ˆ% in ‚"‚. However, the outlook reflects heightened uncertainty arising from trade tensions, evolving tariff regimes, and geopolitical developments, including the escalation of conflict in the Middle East, that has renewed concerns around energy prices, shipping routes and global inflation.

INDIAN ECONOMY

According to the National Statistical Institute, the Indian economy grew "."% in FY ‚, higher than the ".ˆ% growth registered last fiscal. Growth remained broad based despite an increasingly uncertain global environment, supported by strong domestic demand, sustained public expenditure spending, improving private investment activity and recovery in rural consumption. Economic activity was supported by robust performance across key sectors. Construction remained one of the strongest contributors to growth, supported by sustained infrastructure spending, housing activity and urban development projects. Manufacturing growth improved from †.% in FY ‚ƒ to .„% in FY ‚, reflecting improved capacity utilisation, domestic demand and ongoing investment in production capabilities. Agriculture, forestry and fishery „.% while financial, real estate and professional services expanded ".‚%, underlining the continued strength of Indias service economy. High frequency indicators continued to reflect underlying resilience of the economy. Gross GST collections increased †.…% to reach over Š ‚‚.‚" lakh crore.

The Reserve Bank of India predicts the Indian economy to grow by .% for FY‚". While global trade tensions, escalation of conflict in the middle East and likely El Nino impact on monsoon might create near term uncertainties, Indias structural growth drivers, including rapid urbanisation rising household incomes, infrastructure development, manufacturing expansion and increasing formalisation of the economy are expected to support sustained long-term growth.

INDIAN PLASTIC PIPES INDUSTRY

The Indian plastic pipe industry has evolved from being a supplier of basic plumbing and irrigation products into a critical enabler of the countrys water, sanitation, housing and infrastructure ecosystem. Plastic piping systems today play an integral role across potable water distribution, sewage management, irrigation, industrial applications, drainage and fire protection networks. The industry continues to benefit from increasing replacement of conventional materials such as galvanised iron, concrete and metal-based systems with advanced polymer solutions that offer superior durability, corrosion resistance, lower lifecycle costs and ease of installation. Simultaneously, rising quality standards, stricter BIS compliance requirements and increasing customer preference for branded products have accelerated the shift from unorganised to organized manufacturers. According to industry estimates the Indian plastic pipe market size reached …."† Million Tons in ‚"‚ƒ and is projected to reach ƒ.‚ Million Tons by ‚"…„, exhibiting a CAGR of .ƒ% during the forecast period ‚"‚-‚"…„. The industrys growth is increasingly being shaped by large scale investments in water infrastructure, urbanisation and housing development.

FY33 Performance and Trends

FY ‚ was characterised by strong underlying demand across housing, infrastructure, and water management applications, despite significant volatility in raw material markets during the year.

Demand was supported by continued execution of government programmes focused on water access, sanitation, and housing. As of June ‚"‚, over ˆƒ.† crore rural households had been provided tap-water connections under the Jal Jeevan Mission, compared to approximately ….‚ crore households at the launch of the programme in ‚"ˆ. The Union Budget FY‚ further reinforced this momentum with an allocation of Š",""" crore towards the Jal Jeevan Mission and Š"","""+ crore towards Pradhan Mantri Awas Yojana. The operating environment witnessed two distinct phases during the year. For much of FY ‚, industry participants operated in a low-price PVC environment following an extended period of global oversupply and weak feedstock pricing. However, during the latter part of the year, geopolitical tensions in the Middle East, supply chain disruptions and changes in the global trade flows led to sharp increase in PVC resin prices, triggering widespread channel restocking and improving realisations across the industry.

At the same time, organised manufacturers continued to gain market share as their stronger balance sheets, wider distribution reach and superior inventory management capabilities enabled them to navigate raw material volatility more effectively than smaller regional players.

Growth Drivers and Structural Tailwinds

The long-term structural outlook of the Indian plastic pipe industry continues to be supported by multiple structural growth drivers.

Water Infrastructure and Urbanisation

Indias growing focus on water security, wastewater management and urban infrastructure remains one of the largest demand catalyst for the industry. Government programmes such as the Jal Jeevan Mission, AMRUT ‚.", PM Awas Yojana, PM Krishi Sinchai Yojana continue to expand countrys water and sanitation infrastructure.

The Indian housing market is witnessing gradual shift towards premium and mid-premium residential developments. This trend is driving higher adoption of value-added products such as CPVC plumbing systems, acoustic drainage solutions, fire protection piping systems and advanced water management technologies.

India continues to depend on imports for a significant portion of its PVC and CPVC resin requirements. However, substantial investments in domestic resin manufacturing and backward integration projects are underway across the industry. These investments are expected to improve supply security, reduce import dependence and support long-term margin stability and will reduce working capital requirement.

INDIAN ADHESIVES AND SEALANTS INDUSTRY

The Indian adhesives and sealant industry serves as a facilitator across construction, consumer goods and industrial manufacturing landscapes. The industry covers applications such as woodworking, flexible packaging, footwear, tile grouts, epoxy systems, construction chemical products and specialised engineering bonding in automotive assembly and electronics.

According to the IMARC group, the domestic adhesive market stands at USD ‚.ƒƒ bn in ‚"‚ƒ and is expected to reach USD „.ƒˆ billion by ‚"…„.

FY33 Performance

The industry delivered a healthy growth during FY ‚, supported by strong demand from construction, infrastructure, packaging and manufacturing end markets. While volatility in crude oil linked raw materials and chemical intermediaries influenced input costs during the parts of the year, underlying demand remained strong across most segments.

Demand Drivers

Construction and infrastructure emerged as key growth drivers. Increased activity across housing, urban infrastructure, transportation networks and industrial projects supported demand for waterproofing solutions, tile adhesives, repair mortars, grouts and construction sealants. As construction quality continues to improve, the use of specialised construction chemicals is becoming increasingly mainstream across residential and commercial projects.

Packaging is expected to benefit from continued expansion of organised retail, e-commerce, quick commerce and flexible packaging. Demand for hot melt adhesives, pressure sensitive adhesives and laminating solution remains robust. Indias strong momentum in manufacturing including automotive, appliances, electronics and engineered products is creating incremental demand for industrial adhesives and specialised bonding solutions. The industry is gradually moving to specialised and technology driven formulations including water based adhesives, polyurethane systems, hybrid sealants and low-VOC products are gaining prominence due to evolving environmental standards and customer preferences. These categories typically offer higher performance characteristics and improved profitability relative to conventional products.

INDIAN PAINTS INDUSTRY

The Indian paints industry remains one of the fastest-growing segments within the countrys building materials and specialty chemicals landscape. The industry has steadily evolved beyond traditional decorative paints to include waterproofing solutions, protective coatings, and specialised surface technologies, supported by urbanisation, infrastructure development, and rising demand for premium products.

According to IBEF, the Indian paints and coatings industry was valued at approximately Š…,""" crore in ‚"‚ƒ and is projected to reach Šˆ.„ lakh crore by ‚"…". Decorative paints account for nearly three-fourths of industry demand, while industrial coatings cater to sectors such as automotive, infrastructure, engineering, and manufacturing.

FY33 Performance

FY‚ witnessed a gradual improvement in demand conditions, especially in the latter half of the year, following a relatively subdued first half. The operating environment remained highly competitive as both established players and new entrants intensified investments in channel expansion, dealer incentives and brand-building initiatives. While industry pricing power remained constrained despite stable demand and favourable input costs, Astral continued to outperform the broader industry through its strong brand equity, extensive distribution network, product innovation and execution capabilities. The Company delivered healthy growth, strengthened its market position and continued to gain market share across key categories despite the challenging competitive landscape.

Market conditions improved in the second half of the year, supported by housing completions, festive demand, and stronger rural consumption, driving volume growth in decorative paints, particularly across Tier II and Tier III markets. Continued premiumisation and expansion of organised distribution also supported demand recovery. However, lower realisations and downtrading within product categories weighed on revenue growth, with the decorative segment experiencing limited pricing power throughout the year.

Industrial coatings remained relatively resilient, supported by healthy demand from the automotive, infrastructure, engineering, and capital goods sectors. Sustained activity across manufacturing and public infrastructure projects enabled mid-single-digit growth in segments such as protective and powder coatings, despite the challenging pricing environment.

Growth Drivers

Indias construction sector grew by †.„% in FY ‚. The expanding housing stock remains one of the prime growth drivers for the paints industry. The infrastructure build up also generates demand for protective coatings, waterproofing systems and specialised industrial applications.

Consumer preferences for premium and differentiated products are expected to increase demand for emulsions, textured finishes, waterproof coatings and specialised surface solutions, growing market for higher value product categories.

As building standards evolve and awareness of preventive maintenance increases, demand for waterproofing systems and surface protection products is growing faster than traditional paint categories, expanding the industrys addressable market.

INDIAN SANITARYWARE AND BATHWARE INDUSTRY

The Indian sanitaryware and bathware industry has significantly evolved over the last decade, moving beyond basic utility products towards premium, design-led and water efficient solutions. Rising urbanisation, increasing homeownership, growing disposable incomes and changing consumer aspirations continue to support long-term demand. Market size: The India bath fittings market size is expected to increase from USD ˆˆ.„ billion in ‚"‚ƒ to USD ˆ‚.… billion in ‚"‚ and reach USD ˆ"." billion by ‚"…ˆ, growing at a CAGR of ".†% over ‚"‚-‚"…ˆ.

FY33 Performance

FY‚ marked a year of recovery for the industry after witnessing subdued demand for FY ‚ƒ. While retail demand remained relatively cautious during the first half of the year, demand from residential developments, commercial real estate and hospitality projects provided support to the industry volumes. Market conditions improved considerably during the second half as housing completions accelerated and demand from premium and mid premium residential projects emerged.

Government initiatives aimed at improving urban housing infrastructure, including the continued implementation of PMAY-U ‚.", supported the broader housing ecosystem and helped sustain demand across sanitaryware and bath fittings categories.

Growth Drivers

Along with rising urbanisation and subsequent increase in housing and premiumisation of lifestyle, water efficiency and sustainability awareness is another growth factor. This is leading to trends like adoption of water efficient products such as dual flush systems, low flow faucets, aerators and sensor-based fittings. Green building standards and sustainability initiatives are expected to further support demand for resource efficient bathroom solutions in the years ahead. Investments in hotels, hospitals, educational institutions, airports and commercial developments continue to create significant demand for sanitaryware and bath fittings. Growing infrastructure investments and urban development projects are expected to provide additional opportunities for organised industry participants.

ABOUT THE COMPANY

Established in ˆ, Astral Limited has evolved from a pioneering pipes and plumbing solutions company into one of Indias leading building materials enterprises. Over nearly three decades, the company has consistently expanded its product portfolio, manufacturing footprint and distribution reach, building a diversified platform that serves the evolving needs of residential, commercial, industrial and infrastructure markets. Today, Astral operates across nine high-growth business categories consisting of pipes and fittings, water tanks, bathware, specialised valves, infrastructure solutions, specialised fittings, adhesives and sealants, paints and construction chemicals. This diversified portfolio enables the company to offer comprehensive solutions across the building material value chain while reducing dependence on any one product category.

Astral operates ‚ˆ manufacturing units across India, the United Kingdom, and the United States, supported by a total production capacity of approximately ƒ,","† metric tonnes per annum. The company strengthened its production capabilities during the year through the commissioning of Kanpur facility and continued progress on its upcoming Khambhat manufacturing unit. Astrals market reach is enabled by a robust distribution network comprising over ‚." lakh dealers and more than …,"" distributors, ensuring product availability across urban and rural markets alike. The company also maintains a growing presence in export markets, supplying to over „" countries worldwide. Innovation remains central to Astrals growth philosophy. Over the years, the company has consistently expanded into adjacent categories through product development, strategic acquisitions and portfolio diversification. Recent initiatives include the launch of new plumbing and industrial piping solutions, expansion of the bathware portfolio, strengthening of adhesive business through entry into modern trade and DIY solutions along with continued scale up of Astral Paints and construction chemicals. Astrals strong brands, extensive distribution capabilities, manufacturing excellence and customer-centric approach have helped it build leadership positions across multiple categories. Supported by a workforce of more than ,ƒ"" employees, the Company continues to focus on sustainable growth, operational excellence and long-term value creation for all stakeholders.

KEY FINANCIAL RATIOS

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Astral has established a comprehensive internal control framework designed to ensure the orderly conduct of its business, safeguard its assets, and maintain the integrity of its financial reporting. These controls extend across all functions of the Company and are structured to promote operational efficiency, ensure reliable accounting and financial information, and support compliance with applicable legal and regulatory requirements.

The internal control environment is continually reviewed and enhanced to reflect evolving business requirements and industry standards. Internal audit processes are conducted independently and regularly, with oversight from the Internal Auditor, and findings are reviewed by the Audit Committee of the Board. The Committee monitors the implementation of recommendations and ensures that corrective actions are taken in a timely manner.

Independent statutory auditors have, as part of their audit procedures, confirmed the adequacy of internal financial controls over reporting. This structured and evolving system of internal controls reflects Astrals continued commitment to transparency, good governance, and the long-term confidence of all stakeholders.

HUMAN RESOURCES

Astral recognises that its people are central to its success and continues to invest in building a strong, capable, and engaged workforce. The Companys human resource strategy is focused on creating a work environment that encourages performance, growth, and professional development across all levels of the organisation.

As on March …ˆ, ‚"‚ Astrals workforce stood at over ƒ"" employees, including contract personnel, deployed across multiple locations and business verticals. This diverse and dedicated team continues to be a key driver of operational performance and innovation across the Companys businesses.

Astral places strong emphasis on employee learning and development, leadership building, and workforce well-being. Structured training programmes, skill enhancement initiatives, and performance-linked development pathways are integral to the HR approach. The Company also maintains robust HR policies that align with its core values and are designed to promote fairness, inclusivity, and professional growth. Going forward, Astral remains committed to strengthening its talent base and fostering a culture of accountability, collaboration, and continuous learning—recognising that sustained organisational success is built on the strength and commitment of its people.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forward-looking statements that reflect the Companys current expectations regarding future events, business performance, and financial results. These statements are based on certain assumptions and are subject to a range of known and unknown risks and uncertainties.

Words such as "will", "should", "aim", "believe", "anticipate", "intend", "estimate" and other similar expressions are intended to identify such forward-looking statements. Actual results may differ materially from those expressed or implied due to a variety of factors including changes in market conditions, regulatory developments, economic conditions, and business performance.

The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are advised not to place undue reliance on these statements and to refer to the Companys audited financial statements and disclosures for a more comprehensive understanding of the risks and opportunities that may affect performance.

Y. Excluding Revaluation Reserves, Miscellaneous Expenditure and Capital Work in Progress.

J. Excluding Goodwill, Brand, Distribution Network and Capital Work in Progress.

_. Excluding Revaluation Reserves, Goodwill, Brand and Capital Work in Progress.

. Cash profit considered for cash earning per share is Net Profit + Depreciation + Deferred tax + Exceptional item excluding foreign gain(loss). . Above data represents only continuing operations except details of non-controlling interest.