Avro India Ltd Management Discussions

Global Economic Overview

The global economy is facing substantial headwinds, emanating largely from an increase in trade tensions and heightened global policy uncertainty. Global headline inflation is expected to decline further, notwithstanding upward revisions in some countries. Risks to the outlook are tilted to the downside. Escalating trade tensions and elevated policy-induced uncertainty may further hinder growth. Shifting policies could lead to abrupt tightening of global financial conditions and capital outflows, particularly impacting emerging markets. Demographic shifts threaten fiscal sustainability, while the recent cost-of-living crisis may reignite social unrest. More limited international development assistance could push low-income countries deeper into debt, jeopardizing living standards. At this critical juncture, policies need to be calibrated to foster international cooperation while ensuring internal economic stability, thereby helping reduce global imbalances.

Outlook

After withstanding higher trade barriers and elevated uncertainty last year, global activity now faces a major test from the outbreak of war in the Middle East. Assuming that the conflict remains limited in duration and scope, global growth is projected to slow to 3.1 percent in 2026 and 3.2 percent in 2027. Global headline inflation is projected to rise modestly in 2026 before resuming its decline in 2027. Slowdown in growth and increase in inflation are expected to be particularly pronounced in emerging market and developing economies.

Downside risks dominate the outlook. A longer or broader conflict, worsening geopolitical fragmentation, a reassessment of expectations surrounding artificial-intelligence-driven productivity, or renewed trade tensions could significantly weaken growth and destabilize financial markets. Elevated public debt and eroding institutional credibility further heighten vulnerabilities. At the same time, activity could be lifted if productivity gains from AI materialize more rapidly or trade tensions ease on a sustained basis.

Indian Economic Overview

Real GDP is projected to grow by 6.3% during the 2026-27 fiscal year (FY] and by 6.4% inFY2027-28. Rising inflation is expected to weigh on private consumption, while investment slows amid higher oil and gas prices and gas rationing. Employment: growth and labour market participation are set to weaken. Inflation is projected to increase to 4.8% in FY2026-27, driven by higher food, energy and fertiliser costs, and currency depreciation. The current account: deficit is expected to widen, as higher energy import costs outweigh the impact of weaker domestic demand. More persistent energy rationing could lead to weaker growth. On the upside, energy support could cushion real incomes and consumption more than expected.

Fiscal policy is poised to turn expansionary in FY2026-27 to mitigate the impact of higher energy prices, notably through subsidies. Moving from price support to targeted transfers could reduce the fiscal cost of policy support. Following a period of easing, monetary policy is projected to tighten with a policy rate increase in early FY2026-27 to help keep inflation within the target band. Streamlining and harmonising regulations would reduce administrative burdens, boosting productivity and investment: Accelerating the rollout of renewable energy sources would strengthen energy security and reduce carbon emissions.

Global Plastic Furniture Market

The global plastic furniture market size was valued at USD 13.3 billion in 2023 and is projected to grow from USD 15.2 billion in 2026 to USD 18.3 billion by 2030, at a CAGR of 4.7% from 2024 to 2030. The Asia pacific held the largest share of 40.5% of the global market in 2023. Expansion in the market can be attributed to its affordability, durability, lightweight, low maintenance, eco-friendliness, and design versatility. The trend towards modular homes, particularly in nuclear families, and rapid urbanization have driven demand in residential settings, contributing to the markets growth.

Urbanization and rising disposable incomes are leading to increased demand for affordable and stylish furniture options, particularly in developing countries where urban populations are expanding rapidly. This trend is fuelled by the desire for modern and comfortable living spaces, which plastic furniture is well equipped to meet. Another significant factor driving the growth of the plastic furniture market is its durability and low maintenance requirements.

Source: https://www.grandviewresearch.com/industry-analysis/plastic-furniture-market

Indian Plastic Furniture Market

The Indian plastic furniture market is anticipated to grow at more than 7.13% CAGR from 2025 to 2030. The increasing middle class, expanding urban infrastructure, and growing demand from Tier-2 and Tier-3 cities, where cost-efficiency and durability are key purchasing criteria, are driving this growth. Plastic furniture is becoming popular in these areas because it is inexpensive, weatherproof, and requires little upkeep, which are all major benefits in rural and semi-urban environments. Leading domestic companies which are providing modern plastic furniture have pushed innovation in this area, providing product lines that satisfy both aesthetic and functional requirements. These companies have also extended their reach by targeting both urban and emerging markets via large distribution networks and e-commerce sites. The Bureau of Indian Standards BIS Certification is a key factor in fostering market confidence and growth since it guarantees that plastic furniture meets safety and quality standards.

Circular Economy Forecast

The circular economy market size has grown rapidly in recent years. It will grow from $ 517.79 billion in 2025 to $578.79 billion in 2026 at a compound annual growth rate (CAGR) of 11.6%. The growth in the historic period can be attributed to increasing waste generation levels, early recycling and reuse initiatives, rising regulatory pressure on waste reduction, growth of waste management infrastructure, increasing corporate sustainable commitments.

The circular economy market size is expected to see rapid growth in the next few years. It will grow to $888.22 billion in 2030 at a compound annual growth rate (CAGR) of 11.3%. The growth in the forecast period can be attributed to expansion of circular business models, rising investments in advanced recycling technologies, growing adoption of digital circular platforms, increasing focus on material traceability, strengthening extended producer responsibility regulations. Major trends in the forecast period include increasing adoption of closed-loop manufacturing models, rising focus on resource recovery and reuse, growing deployment of digital waste tracking platforms, expansion of product life extension strategies, enhanced emphasis on sustainable material design.

Global Recycled Plastic Market

The global recycled plastic market size was valued at USD 58.68 billion in 2025 and is predicted to increase from USD 63.83 billion in 2026 to approximately USD 136.14 billion by 2035, expanding at a CAGR of 8.78% from 2026 to 2035. The market growth is driven mainly by increasing environmental policies, growing consumer demand for sustainable products, and the adoption of circular economy concepts in different sectors. Also, increasing investments in recycling facilities and increased demand for environmentally friendly packaging are driving the growth of the recycled plastic sector.

India Waste Plastic Recycling Market

The India waste plastic recycling market reached a volume of 11.92 Million Tons in 2025 and is projected to reach 25.88 Million Tons by 2034, exhibiting aCAGR of 9.00% during 2026-2034. Accelerating Extended Producer Responsibility (EPR) enforcement, rising circular economy mandates, expanding pyrolysis and co-processing capacities, and surging end use demand across the packaging, construction, and automotive sectors are the primary forces shaping market growth. Pyrolysis leads the treatment segment at 26.0%, packaging commands 40.0% of the application segment, and North India accounts for 27.0% of regional share in 2025.

The market has moved from informally managed, open-dump-led plastic disposal toward increasingly organized, technology-enabled recycling across pyrolysis, co-processing, and mechanical processing formats. Stronger EPR regulations, urban solid waste management mandates, and rising end use demand are collectively reshaping the markets structural foundations.

Source: https://www.imarcgroup.com/india-waste-plastic-recycling-market

Opportunities

Rising urbanization and increasing migration towards urban and semi-urban regions continue to drive demand for affordable, durable and space-efficient furniture solutions.

Increasing penetration of organized retail, dealer networks and digital marketing platforms is enhancing market accessibility and strengthening consumer reach across India.

Growing consumer preference for aesthetically appealing, innovative, modular, and multifunctional furniture products is creating opportunities for value-added product offerings and product diversification.

The expanding e-commerce industry in India provides consumers with convenient access to a wide range of plastic furniture options, enhancing the markets reach and growth.

Threats

Volatility in crude oil and polymer prices may impact raw material procurement costs and operating margins as polymers constitute a major component of the Companys cost structure.

Regulatory changes relating to plastics usage, environmental compliance, and waste management norms may increase compliance requirements and operational costs.

Economic slowdowns, inflationary pressures, or moderation in consumer spending may impact demand for discretionary lifestyle and furniture products.

The surging competition stands as an inextricable adversary. The rising number of players contending for prominence amplifies the pressure to innovate and differentiate.

Company Overview

Avro India Limited has established itself as a prominent and trusted player in the Indian lifestyle furniture Industry driven by its unwavering commitment to quality, innovation, functionality, and customer-centricity. Incorporated in 1996 and established the manufacturing facilities in 2002 and headquartered at Ghaziabad, Uttar Pradesh, the Company has consistently evolved with changing consumer aspirations and market dynamics, emerging as a recognized brand in the premium plastic and lifestyle furniture segment.

The Company is engaged in the business of manufacturing of plastic furniture and recycling of plastic scrap. AVROs product portfolio is extensive, encompassing plastic chairs, tables, stools, plastic cabinets, shoe racks etc. The Company is providing an unprecedent three-year guarantee on selected products.

The Company has established a robust pan-India distribution network comprising dealers, distributors, fulfilment centres, and growing digital commerce channels, enabling deeper market penetration and wider customer reach. Strategic investments in digital marketing, regional campaigns, and consumer engagement initiatives continue to enhance brand visibility and strengthen the companys market presence across geographies.

Backed by decades of industry experience, strong manufacturing capabilities, an expanding product portfolio, and a customer-focused approach, Avro India remains well-positioned to capitalize on the growing opportunities in the Indian plastic furniture market. The Company continues to remain committed to operational excellence, sustainable growth and delivering innovative furniture solutions that combine comfort, functionality and modern design aesthetics.

Business Overview

The Turnover of the Company has increased from Rs. 78.32 crores in financial year 2024-25 to Rs. 90.99 crores in financial year 2025-26. The Company has achieved a turnover of Rs. 90.99 crores, where the offline sales were Rs. 86.16 Cr and online sales were Rs. 4.83 Cr.

Due to its high quality and reasonably priced products combined with 3 years guarantee in selected product ranges, the Company is among the most liked companies on platforms such as Amazon and Flipkart when compared to major names in terms of ratings and reviews. The Company sells its products through the Amazon fulfilled and Flipkart Assured programmes. The Company has established its presence on other portals such as GeM, Jiomart etc.

During the financial year 2025-26, the Company has incorporated M/s Avro Recycling Limited, Wholly-owned subsidiary for focusing exclusively on recycling of plastic scrap by subscribing its one lakh equity shares. Thereafter, the Company has made further investment of Rs. 39,76,21,872 (Thirty-Nine Crores Seventy-Six Lakhs Twenty-One Thousand and Eight Hundred Seventy-Two) in M/s Avro Recycling Limited. The Company has introduced advanced upcycling technology that converts mixed-colour polymers into high-quality feedstock.

During the financial year 2025-26, the Company has commissioned washing line (technology for recycling of plastic scrap) to increase the production of reprocessed granuels and improve the quality of production. During the financial year 2025-26, the Company has launched Operation Shuddhi to transform plastic waste into economic opportunity through recycling and circular economy. The Company has been recognized by Asia book of records and India Book of records for processing more than three lakh cement bags within twenty-four hours through flexible plastic washing plant onMarch 10, 2026.

The Company has onboarded few distributors in FY 2025-26. The Company has expanded its reach beyond North India territories and is trying to increase its reach in segment of plastic furniture by tapping distributors and dealers across the country. The Company is selling its products to institutional customers such as Lots and Metro.

During the financial year under review, the production capacity of plastic furniture of the Company has increased as it has purchased Injection Moulding Machine. The purchase of said machine will help the company in increasing production of plastic cabinets. Its ongoing investment in capacity, technology and distribution are aimed at reinforcing its market leadership and expanding its footprint pan-India.

The Company has a strong presence on various social media platforms such as facebook and youtube. The Company also organizes contest and campaigns on various occasions to promote its products through coupons.

Segment-wise Performance

The Companys operations are classified as belonging to a single or main business segment. Accordingly, disclosures under Ind AS-108 "Operating Segments" are not required to be made.

Growth Strategy and Outlook

The outlook for Avro India Limited remains positive, supported by favourable industry fundamentals, rising urbanization, increasing consumer aspirations, and growing demand for affordable, functional and lifestyle-oriented furniture solutions.

The Company continues to strengthen its pan-India distribution network through expansion of dealers, distributors and digital commerce channels.

The Company remains focused on launching innovative and value-added products, increasing market penetration across key regions, strengthening brand visibility and consumer engagement, enhancing operational efficiencies and expanding digital and e-commerce presence.

By collecting used plastics, AVRO is actively participating in the circular economy, turning discarded plastics into valuable material for creating new furniture products. The Companys unwavering commitment to innovation, operations excellence and sustainability are expected to drive its success in the years ahead.

FINANCIAL PERFORMANCE AND HIGHLIGHT

Particulars (Rs. Crore)	Standalone	YoY Change	Consolidated
	FY 26	FY 25		FY 26
Revenue from Operations	90.99	78.32	16.18%	94.64
Total Income	99.30	82.93	19.74%	103.68
EBITDA	11.38	9.65	17.93%	12.30
EBITDA Margin	12.51%	12.32%	19 bps	13.00%
PBT	5.45	4.02	35.57%	6.24
Net Profit	4.21	3.04	38.49%	4.60
Net Profit Margin	4.63%	3.88%	57bps	4.86%
Basic EPS (Rs.)	3.16	2.84	11.27%	0.35

The Companys revenue from operations on standalone basis has increased from Rs. 78.32 Cr in FY 2025 to Rs. 90.99 Cr in FY 2026. The EBITDA on standalone basis has increased from Rs. 9.65 Cr to Rs. 11.38 Cr in FY 2026 and is 17.93% higher than previous financial year. Net Sales Operations on standalone basis in FY 2026 have been 16.18% higher than FY 2025. PBT for FY 2026 on standalone basis is 35.57% more than FY 2025 at Rs. 5.45 Cr and Net Profit on standalone basis for FY 2026 is 38.49% more than FY 2025 at Rs. 4.21 Cr. The Companys revenue from operations on consolidated basis for the FY 2025-26 is Rs. 94.64 Cr, net profit on consolidated basis for FY 26 is Rs. 4.60 Cr and EBITDA on consolidated basis for the financial year 2025-26 is 12.30 Cr.

For FY 2025-26, offline sales contributed Rs. 86.16 Cr to the revenue which is approx. 94.69 % of the revenue, while Online sales has contributed Rs. 4.83 Cr to the revenue which is approx. 5.31 % of the revenue.

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to provide details of significant changes (i.e. change of 25% or more as compared to the immediate previous financial year) in key financial ratios, along with detailed explanations. The following are the list of important financial ratios:

Ratio	As at 31st March, 2026	As at 31st March, 2025	% variance	Reason for Variance
Current Ratio (in times)	1.98	3.33	(40.54)	Decrease in current ratio is mainly attributable to the reduction in current investments, cash and cash equivalents, and maturity of fixed deposits during the year.
Debt-Equity Ratio (in times)	0.20	0.23	(13.04)
Interest Coverage Ratio (in times)	4.64	3.59	29.25	Increase in ratio due to increase in EBIT.
Return on Equity (in %)	4.83	5.34	(9.55)
Inventory Turnover Ratio (in times)	4.77	6.05	(21.15)
Debtor Turnover Ratio (in times)	3.53	3.54	(0.28)
Trade Payable Turnover Ratio (in times)	6.29	7.65	(17.77)
Return on Net Worth (in %)	4.83	5.34	(9.55)
Net profit Ratio (in %)	4.62	3.88	19.07
Operating Profit Margin (in %)	7.64	7.10	7.61
Net Profit Margin (in %)	4.62	3.88	19.07

Risks and Concerns

The Company operates within a framework of environmental, taxation, labor, and manufacturing regulations. Any adverse regulatory changes or non-compliance may impact operations and profitability. The Company maintains strong compliance mechanisms and regularly monitors regulatory developments.

The Company remains exposed to fluctuations in crude oil and polymer prices, which significantly impact raw material procurement costs. During FY26, war-related geopolitical developments and supply disruptions led to substantial increases in crude oil prices, resulting in elevated polymer prices and margin pressures across the industry. The Company mitigates this risk through strategic sourcing, inventory planning, cost optimization initiatives, and pricing revisions wherever feasible.

Manufacturing operations involve operational and workplace safety risks. The Company remains committed to maintaining high safety standards through employee training programs, preventive maintenance, and continuous improvement initiatives.

The company remains resolute in its proactive and proficient handling of risks, as it acknowledges risk as an inherent facet of conducting business. Rigorous and regular evaluations of both internal and external risk factors underscore the companys commitment to vigilance. Thus, the company consistently monitors the external landscape for emergent threats and gauges their potential ramifications on overarching corporate objectives.

The companys robust approach encompasses the assessment and management of an array of risks that span the spectrum. AVROs commitment to proactive risk management is deeply ingrained in its operational ethos, ensuring a resilient and adaptable stance in the face of an ever-evolving business landscape.

Material Developments in Human Resources and Industrial Relations

The Company firmly believes that its empbyees are one of its most valuable assets and key contributors to bng-term success and sustainabb growth.

The Company has always remained an equal opportunity empbyer and has embedded these values in its empbyees. The Company provides a supportive and inclusive work environment where empbyees feel valued, motivated and empowered to contribute to the Companys vision. The Company prohibits child labour, forced labour and discrimination of any kind against empbyee or applicant based on gender identity, language, race, cobur, religion, caste, creed, sex, ethnicity, age, martial status etc.

The Company continues to focus on empbyee engagement and devebpment, skill enhancement and training initiatives, safe and inclusive workplace practices.

Throughout the review period, empbyee relations with the Company remained positive and highly cooperative across all organization bvels. The Companys badership has consistently prioritized open communication, mutual respect, and transparency, which have been instrumental in maintaining harmonious industrial relations and a collaborative workplace culture.

Internal Control Systems and Their Adequacy

The company has established adequate internal control systems commensurate with the nature, size and compbxity of its operations. These systems are designed to safeguard assets, ensure accuracy, prevent frauds and errors and facilitate timely preparation of reliabb financial information. Its worth noting that the company maintains a vigilant oversight of its corporate policies to ensure ongoing adherence. The Company is strengthening its Internal Control System every year as per the need of laws and transactions of the Company.

The internal control framework supports operational efficiency, effective risk management, regulatory compliance, and transparent financial reporting. Regular internal audits and management reviews are conducted to evaluate the effectiveness of internal controls and identify improvement opportunities.

The Audit Committee periodically reviews internal audit findings, compliance frameworks, and risk management practices to ensure continuous strengthening of internal control systems. This committee plays a crucial rob in facilitating communication between the Statutory Auditors, Internal Auditors, and the management. Its responsibilities span a wide array of matters, encompassing financial reporting, internal control assessment, and other pertinent areas.

Disclosure of accounting treatment in preparation of financial statements.

The Financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, [as amended from time to time] and other relevant provisions of the Act.

Cautionary Statement

The statements provided in the Management Discussions and Analysis section are grounded in presently accessible information and a series of suppositions encompassing the economy, variables influencing raw material costs, selling prices, shifts in consumer demand and preferences, pertinent laws and regulations, as well as additional economic and political aspects. Its important to note that the companys forthcoming performance projections and assumptions lack a guarantee of precision from the managements side. Consequently, readers are cautioned that the actual outcomes might deviate from what is articulated and inferred in the statements.