Bhavik Enterprises Ltd Management Discussions

The Management of Bhavik Enterprises Limited is pleased to present the Management Discussion and Analysis Report for the Financial Year ended March 31, 2026.

GLOBAL ECONOMIC OVERVIEW

During FY 2025-26, the global economy continued to face challenges arising from geopolitical conflicts, trade uncertainties, inflationary pressures and supply chain disruptions. The ongoing Russia-Ukraine war continued to impact global energy markets, commodity prices and trade flows, while the escalating tensions and military conflicts in the Middle East, particularly involving Israel, Iran, the United States and other regional stakeholders, created uncertainty in crude oil markets and international shipping routes.

Further, heightened concerns regarding the security and uninterrupted functioning of the Strait of Hormuz, a strategically significant maritime route for global crude oil and liquefied natural gas supplies, added to volatility in international energy markets. Any disruption, restriction or perceived risk relating to the Strait of Hormuz has the potential to affect crude oil availability, increase freight and insurance costs, and adversely impact global trade flows.

These geopolitical developments resulted in periodic volatility in crude oil prices, increases in sea- route freight, insurance and logistics costs, and disruptions in key maritime trade corridors, including the Red Sea region and the Strait of Hormuz. Such developments had a direct impact on industries dependent upon petrochemical products and global supply chains, including the polymer industry.

Despite these challenges, global economic activity remained resilient, supported by improving consumer demand, investments in infrastructure and technological advancements. However, businesses across the world continued to operate in an environment characterized by heightened uncertainty, fluctuating commodity prices, foreign exchange volatility and evolving trade dynamics.

The polymer and petrochemical sectors remained sensitive to changes in crude oil prices and feedstock availability, which influenced product pricing and margins throughout the year. Nevertheless, long-term demand for polymer products continued to be supported by growth in packaging, infrastructure, healthcare, automotive and consumer goods sectors across both developed and emerging economies.

INDIAN ECONOMIC OVERVIEW

Despite global geopolitical uncertainties arising from the Russia-Ukraine conflict and tensions in the Middle East, the Indian economy demonstrated remarkable resilience during FY 2025-26. Strong domestic demand, government-led infrastructure spending, expansion in manufacturing activities and robust consumption supported economic growth during the year.

The geopolitical conflicts led to volatility in global crude oil prices, disruptions in shipping routes and fluctuations in commodity prices. However, Indias diversified sourcing capabilities, prudent fiscal management and strong domestic market helped mitigate the adverse impact of such global developments. The Governments continued emphasis on infrastructure development, manufacturing growth, logistics improvement and ease of doing business further strengthened economic activity.

India continued to benefit from initiatives such as Make in India, Production Linked Incentive (PLI) Schemes, National Infrastructure Pipeline and increased capital expenditure by both the Government and private sector. The countrys favourable demographic profile, growing middle class and expanding industrial base continue to support long-term economic growth.

While global geopolitical developments and commodity price volatility remain key external risks, Indias strong macroeconomic fundamentals position it favourably for sustained growth in the coming years.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The polymer industry forms a critical component of the manufacturing value chain and caters to a wide range of industries including packaging, agriculture, infrastructure, automotive, healthcare, consumer durables and industrial applications.

Polyethylene (PE) and Polypropylene (PP) continue to be among the most widely used polymers due to their versatility, cost-effectiveness and broad industrial applications. Growing consumption of plastic products, infrastructure expansion, increasing agricultural activities and rising demand from the packaging industry have supported the growth of the polymer sector.

The industry, however, remains exposed to fluctuations in crude oil prices, foreign exchange movements, regulatory changes relating to environmental sustainability and global supply-demand imbalances. Despite these challenges, long-term demand prospects remain favourable due to continued industrialization and economic growth.

COMPANY OVERVIEW

Bhavik Enterprises Limited is engaged interalia in the business of trading and distribution of polymer products, primarily Polyethylene (PE) and Polypropylene (PP). The Company follows a “Stock & Sale” business model, wherein materials are imported, stored at its warehouses and depots, and subsequently supplied to customers based on their requirements.

The Company has been an authorised distributor of Borouge Pte Ltd, a leading multinational petrochemical company, since 2001 for the ISC region and has consistently remained among its leading distributors for over two decades. It also has a longstanding business relationship with Lyondell Basell, from whom it has been regularly importing polymer products for over 15 years.

The Company offers a diversified range of PE products, including LLDPE, LDPE, HDPE and LLDPE, and PP products, including Homopolymer, Impact Copolymer and Random Copolymer. These products are supplied to manufacturers across packaging, infrastructure, agriculture and consumer goods sectors for applications such as pipes, films, woven sacks, nonwoven fabrics, crates, containers and houseware products.

The Company follows a customer-centric business model and has established relationships with reputed suppliers and customers. Its diversified product portfolio and efficient supply chain management enable it to cater to varying customer requirements while maintaining operational efficiency.

During the year under review, the Company successfully strengthened its market position and enhanced its operational scale. The listing of the Companys Equity Shares on the SME Platform of BSE marked a significant milestone in its growth journey and enhanced its visibility, credibility and access to capital markets.

FINANCIAL PERFORMANCE REVIEW

1. Revenue from Operations

Revenue from Operations increased from ^52,726.71 Lakhs in FY 2024-25 to ^62,843.79 Lakhs in FY 2025-26, registering a growth of approximately 19.19%.

The growth was primarily driven by higher business volumes, increased customer demand and improved market penetration.

2. Profit Before Tax

Profit Before Tax increased significantly from ^766.87 Lakhs in FY 2024-25 to ^1,844.11 Lakhs in FY 2025-26, reflecting improved operational efficiencies and business performance.

3. Profit After T ax

Profit After Tax increased from ^567.05 Lakhs in FY 2024-25 to ^1,356.41 Lakhs in FY 2025-26, representing a substantial growth over the previous year.

4. Net Worth

The Companys Net Worth increased from ^9,771.74 Lakhs as at March 31st, 2025 to ^16,574.38 Lakhs as at March 31st, 2026. The increase was attributable to the profits earned during the year and proceeds raised through the Initial Public Offer.

OPPORTUNITIES

The Company continues to identify and capitalize on emerging opportunities, including:

• Growing demand for polymer products across multiple industries.

• Increasing industrial and manufacturing activities in India.

• Expanding customer base across domestic markets.

• Enhanced market visibility and credibility following the Companys listing on BSE SME.

• Opportunities to strengthen market share through strategic business expansion.

• Growing demand from packaging, agriculture and infrastructure sectors.

THREATS, RISKS AND CONCERNS

The Companys business is exposed to certain risks that may impact its performance, including:

• Volatility in crude oil and polymer prices.

• Foreign exchange fluctuations affecting procurement costs.

• Regulatory changes impacting the polymer industry.

The Company continuously reviews its risk management framework and undertakes appropriate mitigation measures to address these risks effectively.

SEGMENT-WISE PERFORMANCE

The Company is primarily engaged in a single segment, namely trading of polymers and allied products. Accordingly, segment-wise reporting is not applicable.

OUTLOOK

Indias long-term economic fundamentals remain strong and are expected to support sustained growth across manufacturing and industrial sectors. Demand for polymer products is expected to remain healthy owing to growth in infrastructure, packaging, agriculture and consumer industries. The Company intends to leverage its established business relationships, operational expertise and enhanced capital base to further strengthen its market position. Management remains optimistic about the future growth prospects of the Company and expects continued improvement in operational and financial performance.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established adequate internal control systems commensurate with the size, nature and complexity of its operations. The internal control framework is designed to ensure:

• Protection and safeguarding of assets;

• Accuracy and reliability of accounting records;

• Compliance with applicable laws and regulations;

• Efficient utilization of resources; and

• Prevention and detection of frauds and errors.

The Audit Committee periodically reviews the adequacy and effectiveness of the internal control systems and monitors corrective actions wherever necessary.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company firmly believes that its employees are its most valuable asset and key contributors to its success. The Company continues to focus on creating a positive work environment, enhancing employee capabilities and fostering a culture of professionalism and accountability.

Industrial relations remained cordial and harmonious throughout the year. The Company continues to invest in employee development and skill enhancement initiatives to support its future growth objectives.

KEY FINANCIAL RATIOS

The Company regularly monitors key financial and operational parameters to evaluate business performance and financial health. The significant improvement in revenue, profitability and net worth during FY 2025-26 reflects the Companys strong operational performance and efficient business execution.

CAUTIONARY STATEMENT

Statements made in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors including economic conditions, government policies, market developments, competition, taxation and other factors beyond the control of the Company. The Company undertakes no obligation to publicly update or revise any forward-looking statements.