CEAT Ltd Management Discussions

Global Economic Outlook

The global economy recorded moderate growth during FY 2025–26 amid geopolitical uncertainties, supply chain realignments and evolving trade dynamics. While inflation moderated across key economies, policy uncertainty and trade restrictions continued to influence growth. Global GDP is expected to remain stable at approximately 3.3%, supported by emerging market demand and gradual recovery in global trade. Developed economies experienced relatively slower growth under tight monetary conditions, while emerging markets remained key contributors despite uneven recovery and currency volatility.

Geopolitical developments and external environment

Geopolitical developments continued to disrupt trade flows, increase energy costs and create supply chain volatility. Constraints in key shipping routes, higher insurance costs and capacity limitations continue leading to elevated logistics costs, particularly affecting trade through the Middle East. Currency markets remained volatile, with strengthening of the US Dollar and depreciation pressures on emerging market currencies, including the Indian Rupee.

These movements impacted import costs, export competitiveness and overall demand conditions in certain markets. The combined effect of higher landed costs and currency volatility led to cautious procurement behaviour in select international markets.

Indian Economic Overview

India demonstrated strong macroeconomic resilience during the year, supported by infrastructure investments, manufacturing growth and robust domestic demand. GDP growth for FY 2026-27 is estimated in the range of 6–7%, reinforcing Indias position among the fastest-growing major economies.

Automobile Industry Overview

During the last year, global automobile industry benefited from improved semiconductor availability, steady consumer demand and continued investments in electrification and advanced mobility solutions. In India, the industry witnessed steady growth driven by rural recovery, GST rationalisation, infrastructure development and sustained preference for personal mobility. Passenger vehicle demand remained stable with continued growth in utility vehicles, while the two-wheeler segment recorded recovery supported by rural demand and improved financing availability.

Tyre Industry Overview

The tyre industry recorded strong growth during FY 2025–26, with overall volumes expanding in double digits, supported by robust performance across both replacement and OEM segments. Demand momentum strengthened in the second half following GST rationalisation, leading to stimulated consumption across key categories. The replacement segment remained the primary growth driver, led by higher vehicle utilisation, and sustained traction in the two-wheeler segment. OEM demand also remained healthy, with strong growth in utility vehicle segments. Export markets witnessed a mixed trend, with strong growth in regions such as Europe and the United States, partly offset by disruptions in the Middle East due to geopolitical tensions. Overall, the industry demonstrated resilience during the year, supported by favourable domestic demand conditions and steady global market participation.

Raw Material Trends

Raw material prices, particularly natural rubber, remained volatile due to supply constraints and logistical disruptions. The industry is progressively adopting sustainable alternatives such as recovered carbon black and rice husk silica. Increased use of recycled and sustainable materials is expected to enhance resilience against price and supply volatility.

Business Review

The Company operated in a dynamic environment during FY 2025–26, characterised by input cost volatility and geopolitical uncertainties. The demand environment on the other hand remained healthy. Led by strong execution, the Company witnessed a landmark year and crossed the Rs. 15,000 Crore revenue milestone with revenue growing 19%. The growth was strong across all segments. Replacement grew by 10.80%, OEM by 23% and Export 18.49%. The raw material prices moderated in the second half of the year. Driven further by operating efficiencies, the Companys consolidated net profit increased by 48% over FY2024-25. Strategic focus remained on strengthening market position, improving product mix and enhancing operational efficiency.

The Companys strategy is anchored on the following:

a) Replacement Market

The replacement segment remained the largest contributor to revenue and profitability. The Company strengthened its position through distribution expansion, enhanced dealer engagement and increased adoption of digital platforms, improving network efficiency and customer reach.

b) Premiumisation

Premiumisation remained a key focus, with expansion of high-performance tyre offerings across product categories. Continuous product innovation enhanced durability, safety and performance, supporting improved value realisation.

c) International Business

The Company strengthened its presence across Europe, Middle East, Latin America and Southeast Asia. Growth was supported by strong product acceptance, improved supply chain capabilities and increasing OEM approvals, contributing to revenue diversification and brand recognition.

d) Geopolitical Risk Mitigation

In response to evolving geopolitical risks and trade realignments, the Company continues to enhance supply chain resilience through sourcing diversification, localisation strategies and expanded geographic presence.

e) Integration of CAMSO business

Integration of the CAMSO business progressed during the year, strengthening the Companys capabilities in off-highway tyres and tracks. This enhances access to specialised markets and expands the global product portfolio.

f) Capacity Expansion

Capacity expansion initiatives across manufacturing facilities are progressing to support demand growth across passenger, two-wheeler and commercial vehicle segments. Investments in advanced technologies and automation are improving productivity and product quality.

g) Operational Efficiency

The Company implemented multiple initiatives to optimise costs and improve margins, including:

• Raw material optimisation

• Energy efficiency measures

• Procurement efficiencies

• Digital transformation initiatives

These measures are expected to support sustainable margin improvement.

Technology and R&D

The Company continues to invest in R&D with a focus on innovation, sustainability and digital technologies. Expansion into international markets, adoption of advanced testing capabilities and use of digital tools, including Generative AI, are strengthening product quality and performance.

Risk Management

The Company has a robust risk management framework based on SWOT analysis as summarised below:

Risk Management Approach

The risk management framework is overseen by the risk management committee, which monitors the effectiveness of controls and ensures alignment with the Companys risk appetite and strategic objectives. The Company follows a proactive and structured approach to identify, evaluate and manage risks, strengthening resilience and supporting sustainable value creation as briefly explained below:

With an S&P Global ESG Score of 69, CEAT ranks among the top 4% of the global auto components industry.

Risk and Mitigation Plan:

Key Risks	Mitigation
Margin impact due to raw material price volatility and competitive pricing pressures	The Company mitigates margin risk through supplier diversification and strengthened OEM partnerships. Cost optimisation initiatives across procurement, manufacturing and distribution improve efficiency and reduce wastage. The focus is on premiumisation, price discipline, product innovation and expansion of distribution and after-sales capabilities which can support margin resilience.
Cyber Security Risk	Cyber risks are managed through periodic assessments and implementation of preventive and detective controls. External experts support system security, complemented by a robust Data Recovery Plan to ensure business continuity.
ESG Risk	ESG risks are governed through a dedicated ESG Council that oversees the identification, assessment, mitigation, and monitoring of environmental, social, and governance risks. This includes climate, energy, emissions, water and waste management, human rights, health and safety, diversity and inclusion, ethics, compliance, and data security, supported by robust policies, defined accountability, and regular oversight.
Geopolitical Disruption	The Company mitigates geopolitical risks through supply chain agility, balance sheet monitoring and expansion into diversified geographies, OEMs and product segments.
Economic Slowdown impacting growth	Mitigation measures include disciplined working capital and capex management, maintaining optimal leverage, improving cash flows and enhancing operational flexibility.
M&A Risk – CAMSO business Integration	A structured integration framework, supported by dedicated teams and governance oversight, ensures alignment across operations. Measures include supply chain harmonisation, global sourcing, cultural integration and phased systems integration to enable seamless execution and value realisation.

Occupational Health and Safety

The Company maintains a strong safety culture supported by ISO 45001-certified systems, structured training programmes and regular audits. The focus remains on achieving a zero-incident workplace. Employee well-being is supported through comprehensive health programmes, workplace monitoring and medical facilities across all manufacturing locations as elaborated in this Integrated Annual Report.

Environment and Sustainability

The Company is committed to achieving net-zero emissions by 2050 through energy efficiency, clean energy adoption and sustainable manufacturing practices. Climate-related risks are managed through a structured ESG governance framework.

People

The Company continues to strengthen workforce capabilities through structured learning initiatives, diversity programmes and digital HR interventions. Focus areas include leadership development, inclusion and use of technology to enhance employee experience. Further details are provided in the Human Capital forming part of this Integrated Annual report besides BRSR.

Internal Control Systems and Adequacy

The Company has established robust internal control systems designed to ensure operational efficiency, asset protection, regulatory compliance and accurate financial reporting.

The internal control framework follows a three-line defence model comprising:

• Management Controls – operational controls implemented across functions

• Oversight Mechanisms – periodic reviews by management committees

• Independent Assurance – internal audits and oversight by the Board and Audit Committee.

This layered approach ensures strong governance and effective risk management across the organisation.

Discussion on Financial Performance and Key Financial Ratios

In accordance with SEBI Listing Regulations, key financial ratios and material variances are discussed in the financial performance section of this Annual Report.

Cautionary Statement

This document contains certain information and statements which are forward-looking in nature, inter-alia, regarding Companys objectives, plans, estimates and expectations, etc. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. Therefore, the actual results may differ significantly due to factors such as economic conditions, industry demand and supply, input price changes, government regulations, tax laws, litigations and industrial relations. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to, inter-alia in the Managements Discussion and Analysis Report herein.

Discussion on Financial Performance

The standalone financial statements, the analysis whereof is presented hereunder and in the following pages pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, have been prepared in accordance with the requirements of the Companies Act, 2013 and applicable Ind AS issued by the Institute of Chartered Accountants of India. The Management of CEAT Limited accepts the integrity and objectivity of these financial statements as well as various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements are reflected in a true and fair manner and also reasonably presents the Companys state of affairs and profit for the year. nancial instruments of

Balance Sheet

Property, plant and equipment, capital work-in-progress, intangible assets, intangible assets under development and right-of-use assets (Net Block) (Note 3, 4 and 5) (Rs. in Lakhs)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Property, plant and equipment	684,303	656,792	27,511	4%
Capital work-in-progress	58,862	50,661	8,201	16%
Intangible assets	32,876	10,410	22,466	216%
Intangible assets under development	3,994	3,087	907	29%
Right-of-use asset	33,476	28,783	4,693	16%
Total	813,511	749,733	63,778	9%

Property, plant and equipment has increased due to the following reasons:

During the year ended March 31, 2026, the Company recorded total capitalisation of approximately Rs. 78,100 Lakhs across its manufacturing facilities. The Chennai plant contributed the highest capitalisation of approximately Rs. 38,900 Lakhs, followed by the Halol plant at approximately Rs. 18,500 Lakhs, the Ambernath plant at approximately Rs. 10,900 Lakhs and the Nagpur plant at approximately Rs. 3,900 Lakhs. The gross additions to the asset base were partially offset by a depreciation charge of approximately Rs. 50,300 Lakhs recognised over the twelvemonth period ended March 31, 2026. Capital work-in-progress mainly includes the project capital expenditure incurred at Halol, Nagpur, Ambernath and Chennai plants. During the year ended March 31, 2026, the Company recorded total capitalisation of intangible assets aggregating to approximately Rs. 27,200 Lakhs. The CAMSO business Intellectual Property (IP) constituted the most significant addition at approximately Rs. 23,600 Lakhs, representing the predominant share of total intangible capitalisation during the year. This was followed by software capitalisation of approximately Rs. 910 Lakhs at the Nagpur plant, approximately Rs. 500 Lakhs at the Chennai plant and approximately Rs. 200 Lakhs pertaining to other projects. The gross additions to the intangible asset base were partially offset by an amortisation charge of approximately Rs. 4,750 Lakhs recognised over the twelve-month period ended March 31, 2026. Intangible under development mainly comprises new product and software development, majorly at Halol, Chennai, Ambernath and Nagpur plant. Right-of-use assets are arising out of outsourcing arrangements which consists of Land, Buildings and Plant machinery used for production of goods and generation of power under such arrangements.

Investments (Note 6)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Non-current investments
Investments in subsidiaries and associates	42,875	13,334	29,541	222%
Other non-current investments	6,394	3,165	3,230	102%
Total	49,269	16,499	32,770	199%

The increase in investments over the previous year is principally on account of additional investments made by the Company in its subsidiaries and associates during the year. The most significant investment was in CEAT OHT Lanka Private Limited amounting to Rs. 27,398 Lakhs (equivalent to USD 31 million), followed by investments in Clean Max Como of Rs. 1,957 Lakhs, equity shares of TNM of Rs. 1,401 Lakhs, Clean Max Emerald of Rs. 1,275 Lakhs, CEAT PT Tyres Indonesia of Rs. 714 Lakhs, CEAT International UK Limited of Rs. 19 Lakhs and CEAT Brazil Holding Ltda of Rs. 9 Lakhs.

Other financial assets (Note 7 and 14)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Othernon-current	2,996	871	2,125	244%
Other current financial assets	26,318	11,123	15,195	137%
Total	29,314	11,994	17,320	144%

Other non-current financial assets have increased due to increase in security deposit.

Other current financial assets recorded a net increase over the previous year, principally on account of a rise fiscal inderivative incentives receivable from the Governments of Maharashtra and Tamil Nadu of Rs. 3,835 Lakhs, interest receivable of Rs. 3,644 Lakhs and receivables from related parties of Rs. 814 Lakhs. The aforesaid increases were partially offset by a reduction in advances receivable in cash amounting to Rs. 162 Lakhs as compared to March 31, 2025.

Other non-financial assets (Note 8 and 15)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Other non-current non-financial assets	20,021	4,235	15,786	373%
Other current non-financial assets	34,707	14,740	19,967	135%
Total	54,728	18,975	35,753	188%

Increase in non-current non-financial asset is mainly due to increase in capital advance.

Other current non-financial assets primarily comprise advances to with government authorities. The increase during the year is principally attributable to a rise in advances and balances with government authorities, coupled with higher prepaid expenses as compared to the previous year.

Inventories (Note 9)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Raw Materials	74,796	50,610	24,186	48%
Work-In-Progress	10,082	12,416	(2,334)	(19%)
Finished Goods (including stock-in-trade)	74,725	73,263	1,462	2%
Stores and Spares	6,397	4,636	1,761	38%
Total	166,000	140,925	25,075	18%

Raw material inventory when compared as a measure of the cost of material consumed is equivalent to 25 days as at March 31, 2026 against 20 days as at March 31, 2025 mainly due to increase in production for the year ended March 31, 2026.

The finished goods inventory (including traded goods stock) as a measure of the goods sold is stated at 29 days as at March 31, 2026 against 30 days as at March 31, 2025.

Trade Receivables (Note 10)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Trade receivables	175,965	165,233	10,732	6%

Trade receivables as at March 31, 2026 stood at 42 days of sales outstanding, remaining largely in line with the position recorded as at March 31, 2025, reflecting consistency

Cash and cash equivalents (Note 11)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Cash and cash equivalents	3,090	3,947	(857)	(22%)

Decrease is on account of higher utilisation as at March 31, 2026 as compared to March 31, 2025.

Loans (Note 13) (Rs. in Lakhs)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Loans to subsidiary	75,868	-	75,868	100%

As at March 31, 2026, the Company has an outstanding loan of Rs. 75,868 Lakhs to CEAT OHT Lanka (Private) Limited, a wholly owned subsidiary.

Balance Sheet

Borrowings (Note 19 and 23) (Rs. in Lakhs)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Non-current borrowings	150,367	92,352	58,015	63%
Current borrowings	148,833	100,477	48,356	48%
Total	299,200	192,829	106,371	55%

The increase in borrowings during the year is primarily on account of higher long-term and short-term borrowings availed to fund business expansion and meet working capital requirements of the Company.

Lease Liability (Note 4) (Rs. in Lakhs)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Non-current lease liabilities	15,742	13,491	2,251	17%
Current lease liabilities	10,164	7,310	2,854	39%
Total	25,906	20,801	5,105	25%

Lease liabilities are arising out of outsourcing arrangements of Companys products which consists of Land, Buildings and Plant machinery used for production and distribution of goods and generation of power under such arrangements. Increase was mainly on account of creation of new lease liabilities of Rs. 15,174 Lakhs and interest accretion of Rs. 1,985 Lakhs offset by payment of lease liabilities of Rs. 12,054 Lakhs during the year.

Other financial liabilities (Note 20 and 25) (Rs. in Lakhs)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Other non-current financial liabilities	1,869	1,973	(104)	(5%)
Other current financial liabilities	98,954	95,877	3,077	3%
Total	100,823	97,850	2,973	3%

Other non-current financial liabilities has marginally decreased due to decrease in capital creditors by Rs. 104 Lakhs. Other current financial liabilities recorded a net increase over the previous year. The increase was principally attributable to a rise in deposits received from Dealers amounting to Rs. 5,415 Lakhs, interest accrued but not due of Rs. 1,241 Lakhs and employee-related liabilities of Rs. 316 Lakhs as compared to March 31, 2025. The aforesaid increase was partially offset by a decline in derivative financial instruments of Rs. 3,347 Lakhs, payables to capital vendors of Rs. 628 Lakhs and unpaid dividends of Rs. 54 Lakhs during the year.

Provisions (Note 21)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Non current provisions	8,682	9,179	(497)	-5%
Current provisions	16,292	13,830	2,462	18%
Total	24,974	23,009	1,965	9%

Provisions recorded a net increase over the previous year, principally on account of a higher provision for sales- related obligations amounting to Rs. 1,335 Lakhs, an increase in provision for gratuity of Rs. 376 Lakhs and an incremental provision for indirect tax and labour matters of Rs. 274 Lakhs as compared to March 31, 2025.

Trade Payables (Note 24) (Rs. in Lakhs)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Trade payables	334,555	273,868	60,687	22%

The trade payable days outstanding increased to 98 days as at March 31, 2026 from 90 days as at March 31, 2025, representing a year-on-year increase of 8 days. This movement reflects the Companys evolving payment cycle in line with its procurement patterns and vendor payment terms during the year.

Other current liabilities (Note 26) (Rs. in Lakhs)

Particulars	As at March 31, 2026	As at March 31, 2025	Change	Change %
Other current liabilities	12,302	20,675	(8,373)	(40%)

The decrease in other current liabilities is primarily on account of a reduction in liabilities towards Goods and Services Tax (GST) and Extended Producer Responsibility (EPR) by Rs. 10,128 Lakhs, partially offset by an increase in advances received from customers of Rs. 3,796 Lakhs as compared to March 31, 2025.

Profit and Loss

The following table sets forth the breakup of the Companys expenses as part of the Revenue from operations (net)

Particulars	2025-26	% of Revenue from operations	2024-25	% of Revenue from operations
Revenue from operations	1,521,486	100.00%	1,317,165	100.00%
Cost of material consumed	919,712	60.45%	831,883	63.16%
Purchase of stock-in-trade	1,394	0.09%	900	0.07%
Changes in inventories of finished goods, work-in-progress and stock-in-trade	872	0%	(13,380)	-1%
Gross Margin	599,508	39.40%	497,762	37.79%
Employee benefit expense	96,909	6.37%	84,653	6.43%
Other expenses	298,362	19.61%	264,493	20.08%
EBITDA	204,237	13.42%	148,616	11.28%
Other income	13,150	0.86%	3,335	0.25%
Finance costs	35,947	2.36%	27,720	2.10%
Depreciation and amortisation expenses	65,438	4.30%	56,226	4.27%
Exceptional items	7,073	0.46%	2,961	0.22%
Profit before tax	108,929	7.16%	65,044	4.94%
Tax expense	27,657	1.82%	16,834	1.28%
Profit for theyear	81,272	5.34%	48,210	3.66%

 

Particulars	2025-26	% of Revenue from operations	2024-25	% of Revenue from operations
Other comprehensive income for the year, net of tax	12,479	0.82%	(2,608)	-0.20%
Total comprehensive income for the year	93,751	6.16%	45,602	3.46%

As compared to previous year:

- Revenue from operations has increased by 16%, largely driven by volume growth.

- Gross margin has increased by 1.61% (in absolute terms) on account of better recovery rate.

- EBITDA has increased by 214 bps (in percentage terms), primarily on account of increase in revenue.

Revenue from operations (Note 27)

Particulars	2025-26	2024-25	Change	Change %
Sale of goods
Automotive Tyres	1,419,493	1,218,187	201,306	17%
Tubes and others	79,782	77,676	2,106	3%
Royalty income	877	693	184	27%
Other revenues	1,490	893	597	67%
Total revenue from contracts with customers	1,501,642	1,297,449	204,193	16%
Sale of scrap	6,921	7,273	(352)	(5%)
Government grants	12,923	12,443	480	4%
Revenue from operations	1,521,486	1,317,165	204,321	16%

Sale of goods in value has increased mainly due to increase in volume.

Other Income (Note 28)

Particulars	2025-26	2024-25	Change	Change %
Other Income	13,150	3,335	9,815	294%

Other income has mainly increased due to interest income of Rs. 3,599 Lakhs on loan given to subsidiary and Foreign exchange fluctuation (net) of Rs. 5,673 Lakhs as compared to March 31, 2025.

Cost of material consumed / finished goods consumed analysis (Note 29 and 30)

Particulars	2025-26	2024-25	Change	Change %
Cost material consumed	919,712	831,883	87,829	11%
Purchase of stock-in-trade	1,394	900	494	55%
Changes in inventories of finished goods, stock-in-trade and work-in-progress	872	(13,380)	14,252	(107%)
Total	921,978	819,403	102,575	13%

The increase is on account of higher production activity undertaken during the year, which necessitated greater procurement of raw materials, thereby increasing inventory and input cost levels. Additionally, raw material prices witnessed an upward movement compared to those prevailing as of March 31, 2025, further contributing to the overall increase in costs.

The movement in inventory changes during the year was predominantly driven by a substantial rise in raw material holdings, including stocks in transit. Raw material inventory grew from Rs. 50,610 Lakhs as at March 31, 2025 to Rs. 74,796 Lakhs as at March 31, 2026, an increase of Rs. 24,186 Lakhs, reflecting higher procurement levels in line with increased production activity and prevailing raw material prices.

Employee benefit expense (Note 31)

Particulars	2025-26	2024-25	Change	Change %
Employee benefit expense	96,909	84,653	12,256	14%

Employee benefit expenses recorded an increase over the previous year, primarily on account of annual salary revisions effected during the year and a rise in employee costs commensurate with the higher levels of production activity undertaken during the period.

Finance Costs (Note 32) (Rs. in Lakhs)

Particulars	2025-26	2024-25	Change	Change %
Finance cost	35,947	27,720	8,227	30%

Finance costs recorded an increase over the previous year, largely on account of higher interest payments consequent to a rise in overall borrowings during the year. Additionally, incremental Dealer Deposits contributed further to the increase in interest outflows, collectively resulting in higher finance costs for the period.

Depreciation and amortisation expense (Note 33) (Rs. in Lakhs)

Particulars	2025-26	2024-25	Change	Change %
Depreciation on property, plant and equipment	50,188	43,580	6,608	15%
Amortisation of intangible assets	4,752	3,075	1,677	55%
Depreciation on right-of-use assets	10,498	9,571	927	10%
Total	65,438	56,226	9,212	16%

The charge on account of depreciation on Property, Plant and Equipment and Right-of-Use assets, along with amortisation of Intangible assets, recorded an increase over the previous year. This increase is principally attributable to substantial capital expenditures carried out across all manufacturing plants during the year, which expanded the depreciable asset base and consequently resulted in higher depreciation and amortisation charges for the period.

Other Expenses (Note 34)

Particulars	2025-26	2024-25	Change	Change %
Conversion Charges	44,509	36,472	8,037	22%
Stores and Spares Consumed	11,623	10,744	879	8%
Freight and Delivery Charges	57,863	49,179	8,684	18%
Repairs - Machinery	12,734	10,880	1,854	17%
Travelling and Conveyance	6,997	6,440	557	9%
Advertisement and Sales Promotion	31,239	27,862	3,377	12%
Expenses
Professional and Consultancy Charges	4,377	7,535	(3,158)	(42%)
Training and Conference Expenses	3,371	2,601	770	30%
CSR Expenses	1,272	863	409	47%
Sales related obligations	18,736	19,317	(581)	(3%)
Bank Charges	781	460	321	70%
EPR	4,102	3,083	1,019	33%

The increase in other expenses during the year was broad-based and reflective of the Companys growing scale of operations. Variable cost components such as conversion charges, freight, travelling, training and sales-related obligations moved in tandem with the rise in overall activity levels. Simultaneously, the Company stepped up its marketing investments, with advertisement and sales promotion expenses increasing significantly on the back of high-impact campaigns including IPL, WPL and several other brand-led initiatives aimed at strengthening market presence and driving consumer engagement.

Exceptional Items (Note 35)

Particulars	2025-26	2024-25	Change	Change %
Exceptional Items	7,073	2,961	4,112	139%

The increase in exceptional items during the year is attributable to the recognition of past service cost arising from the implementation of the new labour code.

Tax expenses (Note 22) (Rs. in Lakhs)

Particulars	2025-26	2024-25	Change	Change %
Tax expenses	27,657	16,834	10,823	64%

Effective income tax rate for the year 2025-26 is 25.39% as compared to 2024-25 is 25.88%. Tax expenses were higher in 2025-26 due to higher profits.

Cash Flows* (Rs. in Lakhs)

Particulars	2025-26	2024-25	Change	Change %
Net cash flow generated from operating activities	183,989	108,298	75,691	70%

Net cash generated from operating activities recorded an increase compared to the previous year. This improvement was principally attributable to a rise in cash operating profit before working capital changes by Rs. 52,423 Lakhs, coupled with an absorption of working capital amounting to Rs. 23,269 Lakhs.

Particulars	2025-26	2024-25	Change	Change %
Net cash (used in) investing activities	(231,796)	(93,549)	(138,247)	148%

The net cash outflow from investing activities increased primarily on account of higher capital expenditures (inclusive of CAMSO business IP, net) of Rs. 36,863 Lakhs, equity infusion of Rs. 31,844 Lakhs, and loans disbursed to a subsidiary totaling Rs. 70,154 Lakhs.

Particulars	2025-26	2024-25	Change	Change %
Net cash flows (used in) / generated from financing activities	46,950	(14,022)	60,972	(435%)

The higher cash inflow from financing activities is largely attributable to net proceeds from long-term and short-term borrowings of Rs. 65,953 Lakhs. This was partially set off by a loan of Rs. 3,943 Lakhs granted to the ESOP trust towards the purchase of treasury shares.

* For details, refer cash flow statement

Ratio Analysis

Particulars	2025-26	2024-25	Reasons
Debtors turnover ratio	8.79	8.85	The decrease is mainly on account of relatively higher increase in revenue vis-a-vis debtors balances.
Inventory turnover ratio	7.96	10.37	Inventory turnover has decreased in the current year as compared to the previous year mainly on account of increase in consumption.
Interest coverage ratio	5.17	4.90	Interest coverage ratio has increased as compared to the previous year, mainly on account of increase in earnings before interest and tax.
Current ratio	0.65	0.65	Similar to previous year.
Debt equity ratio	0.59	0.45	Increase is mainly due to increase in long-term and short-term borrowings, as compared to the previous year.
Operating profit margin (%)	13.42	11.28	Increase in operating profit margin is mainly on account of increase in gross margins.
Net profit margin (%)	5.34	3.66	Net profit margin has increased in current year as compared to the previous year due to higher gross margins.
Return on net worth (%)	16.04	11.25	Return on net worth has increased due to higher post tax earnings.
Price earning ratio	17.25	24.17	Earnings per share stood at Rs. 201 for the year ended March 31, 2026 registering an increase by 69% as compared to year ended March 31, 2025. Closing share price was higher by 20% as compared to previous year.
Return on capital employed (%)	21.46	16.48	Return on capital employed has increased due to increase in earnings before interest and tax.