Dhabriya Polywood Ltd Management Discussions

Economy Overview Global

The International Monetary Fund (IMF) stated that despite withstanding higher trade barriers and elevated uncertainty last year, global economic activity now faces a major test due to 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.

Growth in advanced economies is likely to stabilise at around 1.8%. The US is expected to moderate to 2.3% as fiscal stimulus declines and consumer savings normalise. Meanwhile, the Euro Area continues a fragile and uneven recovery at 0.9%. This is constrained by high energy transition costs and structural labour shortages. Emerging Market and Developing Economies (EMDEs) remain key drivers of global demand. However, they face rising vulnerability to external shocks and volatile capital flows. Chinas growth is projected to hold at 4.5%. This reflects its ongoing shift from property-led growth to high-tech manufacturing, green energy, and domestic consumption.

End of Fiscal 2026 saw significant supply-side disruptions in energy markets from the Middle East conflict, leading to spike in energy prices. Brent crude prices rose from $70/bbl towards $100/bbl, posing fresh stagflationary risks for the global economy.

Outlook

Given the challenge of forming stable, real-time assumptions for projections, the IMF World Economic Outlook report adopted a reference forecast instead of a conventional baseline, assuming the war remains contained in duration, intensity, and reach, with disruptions easing by mid-2026, in line with commodity futures as of March 10, 2026.

Under this reference view, global growth is projected at 3.1 percent in 2026 and 3.2 percent in 2027. Global inflation is expected to rise to 4.4 percent in 2026 before easing to 3.7 percent in 2027.

(Source: OECD Interim Economic Outlook, IMF, World Economic Forum)

India

The Indian economy is estimated to grow at 7.6% in FY 2025-26, up from 7.1% in FY 2024-25, as RBI rate cuts along with cuts in personal tax and GST led to recovery in consumption demand. Inflation remained benign through much of FY26, with full-year CPI estimated at an exceptionally low 2.1%. This created room for 125 basis points of cumulative rate cuts, supporting consumption and investment.

However, macro stability was accompanied by currency volatility. The Indian rupee depreciated sharply by 9.88% during FY26 — its steepest fall since FY12 — touching Rs.95 against the US dollar. This reflected global capital flows, a strong dollar environment, and geopolitical uncertainties.

Outlook

The year under review underscores a defining divergence: a world grappling with uncertainty, and an India navigating it with confidence. In a global environment marked by fragmentation and caution, India stands out as a rare convergence of stability, scale and structural opportunity. India is expected to retain its position as the fastest-growing major economy.

Growth will be shaped by a combination of strong domestic demand and resilient private consumption, supported by low inflation and GST rationalisation, alongside stable export performance with improved access to key markets. This momentum is further reinforced by sustained policy support, ongoing economic reforms, and a favourable demographic advantage.

While risks persist, particularly from elevated energy prices, subsidy pressures on government spending, and uncertainty in global demand, Indias macroeconomic fundamentals remain strong. Over the medium term, sustained consumption, gradual investment recovery, and expanding global trade linkages are expected to reinforce Indias position as a key driver of global economic growth. (Source: Upstox, Economic Times, India Today, 5paisa, Livemint, The Logical India)

Indian construction and building materials industry

Construction materials form the foundation of every structure, shaping its strength, efficiency, appearance, and environmental footprint. From ancient times, natural options like stone and wood have been prized for their durability, resilience, and aesthetic appeal, with varieties such as granite, limestone, and marble symbolizing permanence and grandeur. The advent of manufactured materials like concrete, steel, and glass transformed modern building practices, offering affordability, versatility, and enhanced structural capacity, especially through innovations like reinforced concrete that combine compressive and tensile strength. Ultimately, the choice of materials extends beyond functionality and design, influencing sustainability through factors such as energy used in extraction and production, transportation demands, recyclability, and long-term performance, making material selection a critical decision in todays environmentally conscious construction landscape.

The construction materials market is experiencing significant transformation, driven by supply chain disruptions, evolving regulatory frameworks, and advances in material innovation that are reshaping sourcing strategies and investment priorities. For industry leaders, aligning business strategies with these shifting procurement drivers and performance expectations has become essential in navigating this dynamic environment. Valued at USD 1.39 trillion in 2025, the market expanded to USD 1.46 trillion in 2026 and is expected to sustain growth at a CAGR of 5.19%, ultimately reaching USD 1.99 trillion by 2032.

Growing emphasis on energy-efficient and eco-friendly construction is fueling demand for materials that enhance sustainability and minimize carbon emissions. The global construction materials market plays a crucial role in supporting rising infrastructure needs and expanding building activity worldwide. Key growth drivers include large-scale investments, rapid urbanization, and increasing population pressures, while the sector continues to face hurdles such as volatile raw material costs and stringent environmental regulations.

In 2025, U.S. tariff measures created significant cost and supply pressures on metals, specialty glass, and polymers. Companies responded by diversifying suppliers, shifting toward domestic and nearshore sourcing, and bolstering inventory strategies. Procurement schedules and material choices were adjusted, with some projects substituting inputs to avoid tariff exposure. These changes also led to renegotiated contracts, tighter cost controls, and added customs compliance requirements. As a result, strategic planning now emphasizes supplier redundancy, scenario modelling, and resilient partnership structures to manage trade volatility.

The India building materials market size reached USD 44.4 billion in 2025 and is expected to grow to USD 64.5 billion by 2034, reflecting a CAGR of 4.24% during 2026-2034. Growth is fueled by rapid urbanization, expanding infrastructure, and rising construction activity, while increasing demand for sustainable, energy-efficient materials and technological advancements further shape the markets trajectory. Key segments driving this expansion include cement, steel, glass, and eco-friendly alternatives.

(Source: Research and Market, IMARC Group, Mordor Intelligence)

Outlook

The construction materials sector is on a strong growth path, propelled by large-scale housing and infrastructure initiatives and the increasing integration of technology and automation to streamline operations and logistics. Market consolidation is reshaping the competitive landscape, with dominant players expanding through acquisitions to secure stronger positions. Sustainability has become a central theme, driving demand for ecoconscious materials that reduce environmental impact. Yet, the industry continues to grapple with challenges such as price pressures from unorganized competitors, inconsistent standards, volatile input costs, and supply chain disruptions that threaten profitability. A shortage of skilled labour further complicates installation and technical support needs. Although government-led projects are expected to sustain demand, environmental issues ranging from dust and noise to ecological damage from resource extraction pose significant obstacles. Added to this are high transportation expenses, restrictive zoning regulations, and limitations on natural resource use, all of which intensify supply chain constraints and make market expansion increasingly complex.

(Source: Fortune Business Insights)

Indian Plastic/PVC Industry

Polyvinyl chloride (PVC) is a synthetic thermoplastic polymer made from vinyl chloride monomers, valued for its durability, corrosion resistance, lightweight nature, and long service life. the PVC market has experienced significant growth, driven by demand from construction, automotive, and packaging industries. The expansion of the construction sector, particularly in infrastructure projects, has notably increased PVC consumption.

PVC wall panels are also used for both aesthetic and functional purposes, while PVC roofing membranes are valued for their waterproof and energy-efficient qualities, making them suitable for various building types. Consumers are increasingly informed about the environmental impacts of various materials, including PVC, which drives demand for products perceived as sustainable and eco-friendly. A significant number of consumers are willing to pay a premium for sustainable products, indicating a commitment to their values, which encourages manufacturers to develop eco-friendly PVC options.

In the construction sector, there is a noticeable trend towards sustainable materials, including PVC, that comply with green building standards and certifications. The rising demand for sustainable packaging is prompting manufacturers to innovate PVC solutions that minimize environmental impact. Manufacturers are focused on creating PVC products that are both sustainable and aesthetically pleasing, meeting consumer preferences while emphasizing durability to reduce the need for frequent replacements. This trend not only benefits businesses but also supports broader environmental sustainability initiatives.

UPVC Windows and Doors

The uPVC doors and windows market in India has experienced remarkable expansion in recent years. The India uPVC Doors & Windows market is driven by several key factors. Firstly, rapid urbanization and increased construction activities boost demand for durable and energy-efficient building materials. Secondly, the rising awareness about environmental sustainability promotes the adoption of UPVC due to its recyclable nature and superior thermal insulation properties.

The uPVC doors and windows market in India is the rapid urbanization and an increase in construction activities across the country. As more people move to cities in search of better economic opportunities, there is a rising demand for housing and infrastructure development. This urban growth translates into an increased need for both residential and commercial buildings, driving the demand for building materials, including uPVC doors and windows.

The growing emphasis on aesthetics and durability in the construction industry is also fueling the demand for uPVC doors and windows in India. As consumer preferences evolve, there is a shift towards materials that not only offer functionality but also enhance the overall look and feel of a property. uPVC doors and windows meet this demand by combining aesthetic appeal with exceptional performance.

These products are available in a wide variety of designs, colors, and finishes, allowing property owners to choose options that align with their interior and exterior design preferences. The materials smooth finish, along with the ability to incorporate different textures, allows for greater customization and style. Whether in contemporary apartments or traditional homes, uPVC doors and windows provide a sleek, modern look that complements a wide range of design themes.

In addition to aesthetics, uPVC is known for its impressive durability. Unlike wood, uPVC is resistant to rotting, warping, and corrosion, ensuring that it maintains its appearance and functionality over time, even in harsh weather conditions. This low-maintenance material requires minimal upkeep compared to wooden windows and doors, which often need regular painting or sealing to prevent damage. The long lifespan and robust nature of uPVC make it an attractive option for homeowners and builders seeking long-term value.

As the Indian middle class continues to grow and more people are investing in home renovations and new constructions, the demand for aesthetically pleasing, durable, and low-maintenance materials such as uPVC is expected to rise significantly. This trend is contributing to the steady growth of the uPVC doors and windows market in the country.

Your Company is perfectly poised to play a major role in this upward trend with a wide range of premium quality customizable uPVC windows & doors backed by impeccable end-to-end solutions across the country. Our world-class manufacturing infrastructure has helped us making as one of the most trusted & preferred uPVC windows and doors suppliers delivering complete end- to-end solutions with maximum efficiency. All our high- quality uPVC window and door systems are built to meet the highest European quality standards and deliver unmatched performance over a long period of time with minimal maintenance.

As the Indian market looks to make the switch to the superior benefits of uPVC windows and doors, we are excited to be at the forefront of this trend and deliver exceptional products to more and more delighted customers across the country.

Company Overview

DHABRIYA POLYWOOD LTD. is one of the most reputed names in the manufacturing of uPVC and PVC products for a wide range of building interior & exterior applications. The company was incorporated in the year 1992 with the brand name POLYWOOD with PVC profile products. With continuous growth and innovation, the company extended its product range within the brands: uPVC Windows, uPVC Doors, System Aluminum Windows & Doors, PVC Doors, PVC Wall Panel, PVC Fencing, PVC Furniture, SPC Flooring, PVC foam board.

Late Prof. S.S. Dhabriya, who was an environmentalist, and a remote sensing expert had contributed a lot towards saving nature. His motto of life was to save trees. He has been the inspiration for all of us to work towards the betterment of the human race by saving natural resources. His values have been the motto of our lives and we have reached so far following his footprints.

Your Company started its operations in the year 1995 with production of U/R-PVC (Unplastisized/Rigid Poly Vinyl Chloride) Profiles under the brand name Polywood. Over the years, we have gradually expanded our product base to include the PVC (Poly Vinyl Chloride) Section with various designs to suit the complete fabrication requirement of Doors, Windows, Partitions, False Ceilings, Wall Paneling, Pelmet, Kitchen Cabinets & other interior applications. In the last 25 years, Polywood has been an undeniable part of the Save Trees campaign by bringing in the minds of people the use of PVC Profiles which, was only confined to European Countries earlier. The Company has also taken the credit of launching for the first time in India some exquisite products like PVC Fluted Panels, PVC Folding Doors, PVC Designer Doors, PVC Fencing, Wood Plastic Composite Panels.

Outlook

Polywood is a prestigious name in the industry sector has withstood its vision for quality products, ethical and transparent business practices and strong focus on human aspect. Founded in 1992, the company maintains its leadership position in the market with its extensive array of building materials and innovative solutions. Company is dedicated to delivering sustainable, high quality, and future-ready products to its customers. It has a diversified product portfolio of eco-friendly products that are designed to meet constantly evolving customer requirements.

The Company has demonstrated expertise in comprehensive building materials and solutions. Production and marketing of products, that are sustainable, future-ready, innovative and has a high quality, has helped the company achieve market leadership. The Company fosters a wide reach with an extensive sales and distribution network, stretching across India. This can be owed to its strong focus on customer-centricity.

The past two years have shown that that we operate in a world which is not always predictable. The various measures taken by industry in general have helped consolidate this sector. Further, the fiscal measures provided by the government have also helped the building material industry substantially. Consequently, your Company is very positive on robust growth of this sector in the coming financial year.

Financial Overview

Analysis of the profit and loss statement

Revenues: Revenue from operations reported

13.50% growth from Rs.13025.50 lakhs in 2024-25 to Rs.14784.48 lakhs in 2025-26. Other income of the Company accounted for 0.76% share of the Companys revenues, reflecting the Companys dependence on its core business operations.

Expenses: Total Raw Material Expenses of the Company increased by 4.05% from Rs.6586.86 lakhs in 2024-25 to Rs.6853.31 lakhs in 2025-26 due to higher production.

Gross Profit of the Company increased by 23.18% from Rs.6438.64 to Rs.7931.17 from previous year, while the Gross Profit margin increased by 4.22% from 49.43% to 53.65% from the previous year.

Employee expenses accounting for 16.69% of the Companys revenues and increased by 13.82% from Rs.2167.86 lakhs in 2024-25 to Rs.2467.50 lakhs in 202526.

Profit & Loss: Profit before taxes reported 82.77% growth from Rs.1025.10 lakhs to Rs.1873.56 lakhs in 2025-26. Net Profit for the year reported 85.71% growth from Rs.764.99 lakhs to Rs.1420.67 lakhs in 202526.

Finance costs of the Company decreased by 6.58% from Rs.460.18 lakhs in 2024-25 to Rs.429.89 lakhs in 2025-26 following the repayment of liabilities and negotiation of better terms with bankers.

Analysis of the Balance Sheet

The capital employed by the Company increased by 32.60% from Rs.8208.09 lakhs as on 31st March 2025 to Rs.10884.28 lakhs as on 31st March 2026.

The net worth of the Company increased by 24.50% from Rs.5563.41 lakhs as on 31st March 2025 to Rs.6926.52 lakhs as on 31st March 2026 owing to increase in reserves and surpluses. The Companys equity share capital, comprising 10824245 equity shares of Rs.10 each, remained unchanged during the year under review.

Applications of funds

Fixed assets (gross) of the Company increased by 19.35% from Rs.8043.02 lakhs as on 31st March 2025 to Rs.9599.62 lakhs as on 31st March 2026 owing to expansion.

Working capital management

Current assets of the Company increased from Rs.7131.50 lakhs as on 31st March 2025 to Rs.8786.27 lakhs as on 31st March 2026.

Inventories including raw materials, work in-progress and finished goods among others increased by 27.74% from Rs.4052.44 lakhs as on 31st March 2025 to Rs.5176.62 lakhs as on 31st March 2026.

Trade receivables increased by 6.11% from Rs.2189.34 lakhs as on 31st March 2025 to Rs.2323.20 lakhs as on 31st March 2026.

Cash and bank balances of the Company increased by 20.39% from Rs.253.18 lakhs as on 31st March 2025 to Rs.304.80 lakhs as on 31st March 2026.

Margins

The EBIDTA margin of the Company Increased by 414 basis points from 14.83% in 2024-25 to 18.97% in 2025-26 while the net profit margin of the company increased by 370 basis points.

Particulars	2025-26	2024-25
Debt-equity ratio (in times)	1.12	0.87
Return on equity (%)	22.75	14.70
Inventory Turnover (in times)	3.20	3.53

Particulars	2025-26	2024-25
Debt Service Coverage Ratio	2.98	1.93
Current Ratio (in times)	1.59	1.42
EBITDA Margin (%)	18.97	14.83
Net Profit Margin (%)	9.61	5.87

i. Debt-equity ratio (in times): The increase in the Debt- Equity Ratio is mainly due to an increase in borrowings during the year.

ii. Return on Equity (%): Increase is on account of growth in revenue and profit.

iii. Debt Service Coverage Ratio (in times): Improvement in ration is mainly due to, increase in profitability in current year as compared to previous year.

iv. Current ratio (in times): Improvement in Current ratio is mainly due to the reduction in the trade payables as at the year end.

v. EBIDTA Margin (%): Increase in EBIDTA Margin is due to, increase in sales and profitability in current year as compared to previous year.

vi. Net Profit ratio (%): Improvement in net profit ration is mainly due to, increase in sales and profitability in current year as compared to previous year.

Market Presence

Your Companys market presence covers all the major cities of India. Your Company is having three manufacturing facilities (i.e. two at Jaipur { Rajasthan } , and one at Bangalore { Karnataka } ), through which whole India is being catered. Company is having strong market hold throughout the India except couple of states for which also Company has made detailed marketing plans to strengthen its presence there also in the next one to two years.

Opportunities & Threats Opportunities

Development of company activities in management, marketing, quality, research and branding Trained / skilled manpower at competitive wage level Modernized manufacturing units.

Changing consumer behavior Increasing awareness to protect the environment & green building revolution

Threats

Unfavorable foreign exchange rate fluctuations.

Government bans

Volatile raw material pricing

Increased Competition from Local & Big Players

Internal Control System and their Adequacy

The Company has adequate internal control system, commensurate with the size of its operations. Adequate records and documents are maintained as required by laws. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations. The Audit Committee gives valuable suggestions from time to time for improvement of the companys business processes, systems and internal controls. All efforts are being made to make the internal control systems more effective.

Human Resources/Industrial Relations

Your Company considers its human resource a vital asset. The Company prioritizes the professional as well as personal development of each employee, encouraging them to remain motivated and achieve organizational objectives. Company aims to create a conducive working environment, upholding the values of diversity, openness and transparent communications across organizational hierarchies.

The company strongly believes that its Human Resources are one of its most valuable resources and it is the quality and dynamism of its human resources that enables it to make a significant contribution to enhance stakeholders value. Company places employee engagement, development and retention of talent as one of its key priorities, to enable achievement of organizational goals. The Company continuously provides Technical, Behaviour and Leadership trainings to employees, so that they become competent enough to advance in their careers. The Company has 589 male & 22 female Employees on the rolls of Company as on March 31, 2026 The company maintains a good work culture, ethics, values and attractive remuneration to keep its staff highly motivated. The Company creates employee engagement program at regular intervals that makes learning activities fun by indulging in various programmes like festive celebrations, health care activities, cultural nights with family events, etc. to create an overall healthy work environment.

Your Company believes that human resource is its most valuable resource, and it is the quality and dynamism of human resources that enables it to make a significant contribution to enhance stakeholders value.

Cautionary Statement

The statements in the management discussion and analysis section describing the Companys objectives, projections, estimates and prediction may be considered as forward-looking statements. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market positioning, expenditures and financial results are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Companys actual results, performance or achievement may thus differ materially from those projected in such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent developments, information or event.