Dhanlaxmi Cotex Ltd Management Discussions

ANNUAL OVERVIEW, OUTLOOK:

Your Directors are pleased to present the Management Discussion and Analysis Report for the year ended 31st March, 2025.

India will need to deal with global political challenges, control rising prices at home, and encourage businesses to spend more money as the worldRs.s fastest-growing large economy looks for more good growth in 2025, moving past the weak September quarter. Economists at the Reserve Bank of India (RBI) say that quick-moving data for the third quarter of 2024-25 shows the economy is getting better, supported by strong festival spending and steady growth in rural demand.

The Union Finance Minister Nirmala Sitharaman called the recent slowdown only a "temporary pause." IndiaRs.s economic growth fell to a seven-quarter low of 5.4 percent in July-September after growing at a healthy 7-8 percent earlier. For the full year 2024-25, real GDP growth is expected to be 6.6 percent, and 6.9 percent for the first quarter of 2025-26. In the following year, the RBI expects growth in the June quarter to be 7.3 percent.

Looking ahead, steady growth in real wages should continue to help consumers; though spending may add less to overall growth since the boost from past savings and loans has mostly faded. Sectors that depend on interest rates still face pressure but have started to steady as rates have peaked. How much they improve will depend on whether long-term rates come down next year. Housing investment dropped in the second and third quarters as builders lost confidence due to high long-term borrowing costs, which may stay high even if the U.S. Federal Reserve cuts short-term rates. The manufacturing sector, facing weak global demand, also saw low job creation and fewer new orders. But possible rate cuts could revive these sectors and add to GDP growth. Even with high borrowing costs, business spending stayed strong thanks to healthy company finances and government support through laws like the CHIPS Act and Inflation Reduction Act. Tech firms, in particular, boosted their spending because of competition in artificial intelligence, and lower rates could help similar growth in other industries.

The return of Donald Trump as President and the Republican control of Congress could bring big policy changes and create uncertainty for the economy. While the exact timing and details are not yet known, tax cuts, higher tariffs, lower immigration, and fewer business rules are expected. One major risk is TrumpRs.s plan for trade. He has suggested a 10 percent tariff on all imports and a 60 percent tariff on goods from China, which could be used as a tool in trade talks. If carried out, these tariffs could push up inflation, lower demand, and lead to higher interest rates and a stronger U.S. dollar.

WORLD ECONOMY AND STOCK MARKET PERFORMANCE: FINANCIAL YEAR 2024-2025:

The financial year 2024-2025 was characterized by a global economy facing significant headwinds, primarily stemming from elevated trade tensions, geopolitical conflicts, and persistent policy uncertainty. Despite these challenges, there were pockets of resilience and notable divergences in performance across different regions and asset classes.

OVERVIEW OF THE GLOBAL ECONOMY:

• Slowing Growth: Global economic growth was projected to slow in 2025, a downgrade from previous forecasts. Major international bodies like the World Bank and the IMF had revised their growth outlooks downward. This slowdown was particularly pronounced in regions heavily reliant on global trade, such as East Asia and Europe.

• Persistent Inflation and Monetary Policy Divergence: While global inflation showed signs of easing, progress was uneven. Tariffs in some economies acted as a supply shock, fueling inflationary pressures, while in others, they had a negative demand impact. Central banksRs. monetary policies began to diverge. The US Federal Reserve was expected to be cautious with rate cuts due to inflation risks, while the European Central Bank (ECB) was anticipated to ease more decisively. The Bank of Japan (BoJ) continued its slow normalization of policy.

• Trade and Geopolitical Tensions: The rise in trade barriers and heightened policy uncertainty were central themes. New tariffs and trade restrictions particularly initiated by the US, disrupted global supply chains and contributed to a cooling of industrial activity. This environment also put downward pressure on foreign direct investment (FDI).

• Fiscal Policy Constraints: Governments in many economies were constrained by high debt levels and rising interest costs. While some countries tightened their fiscal policy, others increased spending to counter weak growth or social unrest.

• American Exceptionalism" and Divergent Regional Performance: The US economy showed a degree of resilience, with slower but still-positive growth, driven by strong corporate earnings, consumer spending, and a robust labor market. This contrasted with downward revisions for growth in other major economies. The Eurozone experienced modest growth, supported by recovering bank lending and fiscal stimulus in some countries like Germany. The UK economy had a strong start to the year but was expected to soften.

• IndiaRs.s Performance: India stood out as a bright spot, becoming the worldRs.s fourth-largest economy. It was the fastest- growing major economy, with real GDP growth of 6.5% for the fiscal year. This growth was driven by resilient domestic demand, a digitally-skilled workforce, and expanding trade. IndiaRs.s capital markets also demonstrated resilience, supported by strong domestic investor participation that offset foreign outflows.

Stock Market Performance:

Global stock markets delivered solid gains in 2024-2025, despite the challenging economic backdrop. A key theme was the ability of markets to rally even in the face of concerning headlines and policy uncertainty.

• Overall Gains and Resilience: Global developed market equities reached new all-time highs. Markets demonstrated a "V- shaped" recovery from a sharp sell-off in early 2025, which was sparked by new tariffs. Investor confidence returned, and the rally was helped by the prospect of interest rate cuts from some central banks.

• Diverging Regional Performance:

Europe: European stock markets were among the best performers, leading the global charge. Powerful rallies in Germany and Spain, along with surging demand for defense stocks, contributed to this outperformance. Investors began shifting allocations away from the highly valued US market to Europe, where valuations were more attractive.

Asia-Pacific: Markets in the Asia-Pacific region, excluding Japan, also benefited from a growing belief in the waning of "American Exceptionalism" and a weakening US dollar. ChinaRs.s market showed resilience, emerging from the tariff war less scathed than expected. However, performance was a mixed bag, with IndiaRs.s market seeing a weaker start to the year due to high valuations, and ThailandRs.s market hitting a five-year low.

• Sector and Asset Class Performance:

- Technology and Growth Stocks: The US technology sector, particularly the "Magnificent Seven" companies, continued to report strong earnings and revenue growth, which lifted overall growth stocks.

- Small vs. Large Caps: Small-cap stocks performed well, benefiting from an improving growth outlook.

- Mid-Cap Underperformance (India): In India, there was a notable trend of actively managed mid-cap funds underperforming their benchmark indices.

The financial year 2024-2025 was a tale of two halves for IndiaRs.s benchmark indices, the BSE Sensex and the NSE Nifty 50, which delivered positive but volatile returns. The first half of the fiscal year saw a robust bull run, as a stable political environment following the third-consecutive election victory of the Narendra Modi-led government fueled investor confidence. Both the Sensex and Nifty 50 soared to new record highs, with a powerful rally driven by optimism about economic reforms. However, this bullish momentum hit a wall in the second half of the year. Markets came under significant pressure due to expensive valuations, relentless selling by Foreign Institutional Investors (FIIs) who reallocated funds to other, cheaper Asian markets like China, and a series of disappointing corporate earnings. Despite this correction and heightened volatility, both the Nifty 50 and Sensex managed to close the fiscal year in positive territory, with the Nifty 50 gaining approximately 5.34% and the Sensex advancing by 5.10%. The resilience was largely supported by strong domestic institutional and retail investor participation, which helped cushion the impact of foreign outflows.

• Valuations and Investor Sentiment: Market valuations, particularly for global equities, were extended, with price-to- earnings multiples higher than their long-term averages. This suggested that investors were pricing in a "Goldilocks" scenario of accelerating growth and moderate inflation. However, this left little room for disappointment and underscored the potential for continued volatility.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

A. Global Economy:

The global economy navigated a period of persistent uncertainty and moderating growth in the financial year 2024-25, with a more subdued and divergent outlook projected for 2025-26. Key themes across both periods included the lingering effects of high inflation, a new phase of monetary policy, and the significant impact of rising trade tensions and geopolitical conflicts.

Financial Year 2024-25: A Period of Tenuous Stabilization:

The fiscal year 2024-25 was characterized by a stabilization phase, as global economic growth moderated from the previous yearRs.s momentum. Global GDP growth was estimated to be around 3.2%, a slight slowdown from earlier forecasts. This trend was driven by a complex mix of factors:

Divergent Economic Performance: The United States remained a standout, with solid but slowing growth, fueled by strong consumer spending and a resilient labor market. In contrast, the Eurozone experienced weaker growth, with major economies like Germany and France facing pressures from high energy prices and reduced external demand. ChinaRs.s growth continued to moderate, weighed down by a prolonged property sector correction and subdued domestic demand.

Inflation and Monetary Policy: While global inflation showed signs of easing from multi-decade highs, progress was uneven. Services inflation remained persistent in many advanced economies, complicating the policy decisions of central banks. The European Central Bank (ECB) initiated a series of rate cuts, while the U.S. Federal Reserve (Fed) remained more cautious, creating a notable divergence in monetary policy.

Trade and Geopolitical Headwinds: A sharp rise in trade barriers and heightened policy uncertainty emerged as a major downside risk. New tariffs and trade restrictions disrupted global supply chains, weighing on investment and industrial activity. Geopolitical tensions, particularly in Eastern Europe and the Middle East, added to the uncertainty, keeping commodity prices volatile.

Financial Year 2025-26: A Slowdown Amid Persistent Risks:

The outlook for financial year 2025-26 is marked by a further deceleration in global growth, with the IMF projecting a rate of around 3.0%. The key factors shaping this period include:

Further Deceleration and Divergence: Global growth is expected to weaken further, with a significant slowdown concentrated in major economies. The U.S. economy is projected to see its growth rate decline to around 1.6%, as the effects of policy uncertainty and trade barriers become more pronounced. Similarly, growth in the Eurozone and China is expected to moderate.

Fiscal and Financial Constraints: Fiscal policy is becoming increasingly constrained by high debt levels and rising interest costs across many nations. While some governments are increasing spending to counter weak growth, others are tightening their fiscal positions. This environment, coupled with elevated real long-term yields, is expected to weigh on investment.

Inflationary Pressures and Policy Response: Global inflation is forecast to continue its decline, but at a more gradual pace. However, the risk of a re-acceleration in inflation remains, particularly in economies that have imposed new tariffs, which act as a supply shock. This uncertainty is expected to keep central banks on a "data-dependent" and cautious path, with a greater degree of policy divergence as different regions grapple with their specific economic challenges.

Impact of Global Trade: The forecast for 2025-26 assumes that global trade will continue to be a significant drag on growth. The rise of protectionist measures and the risk of retaliatory actions pose a substantial threat to cross-border investment and supply chains. This environment underscores the need for greater multilateral cooperation to foster a more predictable and transparent global trade system.

Impact on Indian and Global Stock Markets:

Despite the economic headwinds, global developed market equities, particularly in the U.S., delivered solid gains. The S&P 500 continued to be supported by strong corporate earnings from the technology sector. European markets also rallied, as investors sought more attractive valuations.

The Indian stock market was one of the best-performing markets globally in FY 2024-25. It outperformed its emerging market peers, supported by strong macroeconomic fundamentals. However, the market saw heightened volatility. While the Nifty 50 showed a positive return for the fiscal year, it experienced significant swings due to sustained outflows of foreign portfolio investment (FPIs) as foreign investors sought higher yields in the US. This was largely offset by strong domestic institutional and retail investor participation, which provided a crucial stabilizing force

The global stock market outlook for FY 2025-26 is mixed and volatile. The global equity rally is expected to lose momentum as a slowdown in economic growth, coupled with the drag from trade protectionism, weighs on corporate earnings. US stocks are likely to face headwinds from the squeeze on profit margins and a potential hit to consumer purchasing power from the new tariffs. Geopolitical risks are expected to keep market sentiment fragile, with potential for sharp corrections.

For the Indian stock market, the outlook is cautiously optimistic but with short-term risks. While the economy remains one of the worldRs.s fastest-growing, the US tariffs on Indian exports are a significant headwind that could impact specific sectors. The market is expected to be choppy in the short term, with an overhang of tariff-related news. However, the long-term outlook remains positive due to strong domestic demand, easing inflation (reaching an eight-year low of 1.55% in July 2025), and supportive government reforms. Domestic investors are expected to continue compensating for FPI outflows, providing a buffer against global shocks and ensuring a more resilient performance compared to many of its global peers

B. Indian Economy:

IndiaRs.s economy carried forward the momentum it built in F.Y. 2023-24 into F.Y. 2024-25 despite continued global and external challenges. The focus on maintaining macroeconomic stability ensured these challenges had minimal impact. As a result, IndiaRs.s real GDP grew by 6.5% in FY25, following a year of over 7% growth, driven by robust domestic consumption and steadily improving investment demand. On the supply side, gross value added (GVA) at constant (2011-12) prices grew by 6.4% in FY25, with growth remaining broad-based across all major sectors. Net taxes at constant prices also grew by 13.57%, aided by reasonably strong tax growth at both the central and state levels and the governmentRs.s continued push for fiscal prudence. This led to a healthy fiscal position, with the government successfully meeting its fiscal deficit target.

As for India, it remains a bright spot, and we remain optimistic about its long-term growth prospects. However, Indian equity indices did not record double-digit returns in FY 2024-25, unlike the previous year. Your CompanyRs.s portfolio, which is a mix of listed equities, has demonstrated resilience. Thus, even in a year of moderate market returns and heightened volatility, your CompanyRs.s Total Equity per Share has increased.

Despite heightened geopolitical risks, evolving monetary policies, and volatile commodity prices, Indian capital markets have been one of the best performing among emerging markets in F.Y. 2024-25, reflecting IndiaRs.s bright economic stature. Capital markets are becoming prominent in IndiaRs.s growth story, with an expanding share in capital formation and the investment

landscape on the back of technology, innovation, and digitization. The following sections present the significant trends in primary markets, secondary markets, and institutional investment in India.

INVESTMENT AND TRADING DIVISION (SECURITIES) AND INDUSTRY OVERVIEW:

The Management Discussion and Analysis have been included in consonance with the Code of Corporate Governance as approved by The Securities and Exchange Board of India (SEBI). Investors are cautioned that these discussions contain certain forward looking statements that involve risk and uncertainties including those risks which are inherent in the CompanyRs.s growth and strategy. The company undertakes no obligation to publicly update or revise any of the opinions or forward looking statements expressed in this report consequent to new information or developments, events or otherwise.

The management of the company is presenting herein the overview, opportunities and threats, initiatives by the Company and overall strategy of the company and its outlook for the future. This outlook is based on managementRs.s own assessment and it may vary due to future economic and other future developments in the country. The operational performance and future outlook of the business has been reviewed by the management based on current resources and future development of the Company.

Your Company is primarily engaged in dealing in securities and investments. As per the Survey report tabled by the Union Minister for Finance & Corporate Affairs Nirmala Sitharaman in Parliament. The Survey observes that IndiaRs.s capital markets had a good year despite global macroeconomic uncertainty, unprecedented inflation, monetary policy tightening, volatile markets, etc.

In nominal terms, 2024-25 was a year of moderate returns for the BSE Sensex. The index closed 3,300 points higher on March 31, 2025, from a year ago. In percentage terms, the Sensex moved higher by 4.5% in 2024-25. This was in a period of heightened market volatility and significant FPI (Foreign Portfolio Investor) outflows, especially in the second half of the fiscal year. Despite these domestic and global challenges, which included the continued impact of geopolitical events and a slower-than-expected global economic growth, the Indian market was a standout performer. Even among major emerging and developed market economies, IndiaRs.s stock market outperformed its peers during 2024-25, reflecting the countryRs.s strong macroeconomic fundamentals and robust domestic investor participation

Amid a sustained domestic economic expansion and a resilient investment climate, the primary markets remained exceptionally robust during FY25, facilitating record-breaking capital formation of Rs.14.99 lakh crore. This was a significant increase of 62.50% from the Rs.9.23 lakh crore raised in the previous year. Of the total amount mobilized in FY25, 74.2% was raised through debt issuances, with private placements dominating the market. Fund mobilization through all three modes saw strong growth compared to the previous year: equity fundraising surged by 92%, debt issuances by 16.6%, and hybrid instruments by 4.4%.

The number of initial public offerings (IPOs) in the main board increased by 1.6 times to 325 in FY25, from 200 in FY24, while the total amount raised grew by 150% (from Rs.1.62 lakh crore in FY24 to Rs.4.05 lakh crore in FY25). This massive increase was driven by blockbuster listings like Ola Electric, raising Rs.15,000 crore, and ZomatoRs.s follow-on public offering (FPO), which raised Rs.7,500 crore. The SME platforms at the exchanges witnessed heightened activities during FY25, as the number of IPOs increased by 13% (from 272 in FY24 to 307 in FY25), while the corresponding fund raised rose by 63% over the previous year (from Rs.6,095 crore in FY24 to Rs.9,961 crore in FY25).

As per a report by EY, Indian exchanges were global leaders in IPO listings, with IndiaRs.s share consistently rising to 30% in 2024 from 17% in 2023. Reflecting the buoyant market conditions, Qualified Institutional Placements (QIPs) emerged as a critical equity fundraising mechanism, with mobilization more than doubling to Rs.2.2 lakh crore during FY25 from Rs.1.1 lakh crore in the previous year. Resources rose through rights issues also grew significantly; reaching Rs.16,167 crore in FY25 compared to Rs.15,110 crore in FY24.

According to statistics from the Futures Industry Association (FIA), a derivatives trade association, the National Stock Exchange of India Ltd. (NSE) has maintained its position as the worldRs.s largest derivatives exchange in 2024 by the number of contract s traded, a position it has held for the sixth consecutive year. The NSE was also ranked as the third largest exchange worldwide in cash equities by the number of trades, as per statistics from the World Federation of Exchanges (WFE) for CY2024.

IndiaRs.s economic performance has contributed to a growing high-net-worth individual (HNWI) population. According to the Knight Frank Global Wealth Report 2025, IndiaRs.s HNWI population (those with assets of $10 million or more) was estimated at 85,698 in 2024 and is projected to rise to 93,753 by 2028. In a different report, the Capgemini World Wealth Report 2025 indicated that IndiaRs.s total number of millionaires (those with investable assets of $1 million or more) rose to 378,810 in 2024, marking a significant increase and reflecting the countryRs.s rapid wealth creation.

The Company has sufficient working capital to meet financial requirements with tight control over expenditure; the Company will be able to serve its debt and other financing arrangement.

OPPORTUNITIES & THREATS:

OPPORTUNITIES:

Increase in IPOs:

The number of initial public offerings (IPOs) in the Main Board increased by 1.6 times to 325 in FY25, from 200 in FY24, while the total amount raised grew by 150% (from Rs.1.62 lakh crore in FY24 to Rs.4.05 lakh crore in FY25). This massive increase was driven by blockbuster listings like Ola Electric, raising Rs.15,000 crore, and ZomatoRs.s follow-on public offering (FPO), which raised Rs.7,500 crore. The SME platforms at the exchanges witnessed heightened activities during FY25, as the number of IPOs increased by 13% (from 272 in FY24 to 307 in FY25), while the corresponding fund raised rose by 63% over the previous year (from Rs.6,095 crore in FY24 to Rs.9,961 crore in FY25).

During the financial year 2024-25, the Indian stock market delivered positive returns but saw a moderation in growth compared to the previous year. IndiaRs.s Nifty 50 index gained 5.34% in FY25, a significant change from the 26.8% gain in FY24. This performance was influenced by a volatile second half, marked by high valuations and heavy selling by foreign institutional investors. Nevertheless, IndiaRs.s market capitalization continued its remarkable surge, reaching $6.2 trillion and solidifying its position as the fourth largest globally. The market capitalization-to-GDP ratio also saw a substantial increase, reflecting the deepening of the countryRs.s equity markets.

Initial Public Offerings (IPOs) are proving to be a great way for companies to raise capital. The year 2025 has been a landmark year for the IPO market, with several companies expected to go public and create a positive impact on the stock market. In the first half of 2025, 108 IPOs raised a total of $4.6 billion, including major listings like Hyundai Motor India. Investors are seeing promising returns from IPOs of companies with strong growth potential, and the robust pipeline of upcoming issues, including Ola Electric and LG Electronics India, signals continued buoyancy in the primary markets.

Greater Foreign Investments:

In FY 2024-25, IndiaRs.s foreign investment landscape showed a mixed but overall positive picture, with strong growth in FDI but continued volatility in FPI. The primary story was IndiaRs.s rising appeal as a manufacturing hub, which drove a significant increase in long-term investment.

FDI inflows into India saw a notable increase in FY 2024-25, signaling continued global confidence in the countryRs.s economic stability and long-term growth prospects. Total FDI inflows (including equity, reinvested earnings, and other capital) amounted to a provisional $81.04 billion. This represents a substantial increase of 14% from the $71.28 billion received in the previous fiscal year.

The growth in FY25 was particularly driven by a surge in manufacturing FDI, which grew by 18% to reach $19.04 billion. The services sector remained the top recipient of FDI equity inflows, capturing a 19% share of the total, followed by computer software and hardware. The top source countries for FDI were Singapore, Mauritius, and the United States.

Foreign investments play a crucial role in the Indian stock marketRs.s growth, and 2026 is expected to see a surge in foreign investments. The governmentRs.s focus on ease of doing business, a stable political environment, and promising economic growth are likely to attract foreign investors to the Indian stock market. While the predictions seem positive, investors must remember that the stock market is volatile and unpredictable. ItRs.s essential to have a diversified portfolio and invest in stocks that have a strong growth potential. Investors should also keep an eye on global economic conditions and the government policies that impact the stock market.

Bullish Market Outlook:

Most experts predict a bullish market outlook for the Indian stock market in 2024. Positive economic growth and government policies are expected to drive up stock prices. Additionally, the low-interest rates and ample liquidity are expected to attract investors toward equities. The return on foreign investments is also expected to further fuel the marketRs.s growth.

The Growth of Emerging Sectors:

The Indian economy is evolving, and several emerging sectors like e-commerce, healthcare, and technology are gaining momentum. The increasing adoption of digital technologies and e-commerce platforms is expected to drive growth in these sectors, and investors are likely to see promising returns in these areas.

Boost in Infrastructure Development:

The governmentRs.s focus on infrastructure development is expected to create a positive impact on the stock market. The initiatives like the National Infrastructure Pipeline and the Atmanirbhar Bharat Abhiyan are expected to create opportunities for companies in the infrastructure and construction sectors. This, in turn, is expected to drive up the stock prices of these companies.

Robust Domestic Growth:

IndiaRs.s strong economic fundamentals, including a young demographic, rising disposable income, and increasing urbanization, serve as powerful long-term drivers. A growing middle class fuels consumption, which directly boosts corporate earnings and provides a stable base for market liquidity.

Financialization of Savings:

The ongoing shift of domestic savings from traditional assets like gold and real estate into financial instruments like equities and mutual funds is a massive tailwind. The surge in retail investor participation and the growth of systematic investment plans (SIPs) provide a steady and resilient capital flow, reducing the marketRs.s dependence on foreign investors.

Government Reforms and Infrastructure Push:

The governmentRs.s continued focus on structural reforms, such as the Production Linked Incentive (PLI) schemes and the push for infrastructure development, is creating new investment opportunities. Public sector capital expenditure is expected to crowd in private investment, stimulating growth in key sectors like manufacturing, construction, and logistics.

Digital Transformation:

The rapid pace of digitization is expanding market access. Technology platforms have made it easier for retail investors to participate from any part of the country, while financial technology (FinTech) innovations are creating a more inclusive and efficient ecosystem for capital formation and trading.

THREATS:

Global Geopolitical Tensions:

Heightened geopolitical conflicts, particularly the ongoing trade wars and military conflicts, pose a significant external threat. They can lead to supply chain disruptions, increase commodity price volatility, and trigger capital outflows from emerging markets like India, especially if risk aversion rises globally.

Monetary Policy Divergence:

The divergent monetary policies of major central banks, especially the U.S. Federal Reserve, pose a risk. If the Fed maintains high interest rates for longer than expected, it can lead to a stronger U.S. dollar, prompting foreign portfolio investors (FPIs) to pull money out of Indian equities in search of higher yields in the U.S.

High Market Valuations:

While a strong economy justifies high valuations, the Indian market has been trading at a premium compared to its historical averages and emerging market peers. This elevated valuation leaves the market vulnerable to sharp corrections in the event of any negative news, be it domestic policy changes or global economic shocks.

Regulatory and Fiscal Uncertainty:

While the governmentRs.s reforms are a positive, any sudden changes in fiscal policy or capital market regulations could introduce uncertainty. For instance, a change in tax policy or the introduction of new trading rules could impact investor sentiment and trading volumes, creating a short-term headwind for the market.

The significant increase in retail investors in the stock market calls for careful consideration:

This is crucial because the possibility of overconfidence leading to speculation and the expectation of even greater returns, which might not align with the real market conditions, is a serious concern. For a developing economy such as India, the financial sector needs to support the banking sector and fill the gap in capital required for the economyRs.s growth. Therefore, the financial sector should expand at a pace that is in lockstep with economic growth. In particular, India can ill-afford the economyRs.s over financialisation at its current development stage.

The increased retail participation in financial markets and familiarity with financial products are beginning to grow in line with IndiaRs.s emergence as the worldRs.s fifth-largest economy. Therefore, firms operating in banking, insurance, and capital markets must keep the interests of the consumers in mind and improve their service quality through fair selling, disclosure, transparency, reliability, and responsiveness. Their internal appraisal and incentive systems must be in alignment with these considerations. It is in their interest and in the interest of the nation that they optimise their commercial goals over the long run.

RISKS AND CONCERNS:

The Company is now concentrating on investment and trading in Securities. Competition in the market continues to have an impact on the CompanyRs.s operational performance and also exerts pressure on the margins. The Company has exposures in stock market. DCL are exposed to specific risks that are particular to their respective businesses and the environments within which they operate, including market risk, high volatility risk, credit risk, liquidity and interest rate risk, human resource risk, operational risk, information security risks, regulatory risk and macro-economic risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them.

Market Risk: The Company has quoted investments which are exposed to fluctuations in stock prices. GCM continuously monitors market exposure in equity and, in appropriate cases, also uses various derivative instruments as a hedging mechanism to limit volatility.

Liquidity And Interest Rate Risk: The Company is exposed to liquidity risk principally, because of lending and investment for periods which may differ from those of its funding sources. Management team actively manages asset liability positions in accordance with the overall guidelines laid down by various regulators. The Company may be impacted by volatility in interest rates in India which could cause its margins to decline and profitability to shrink. The success of the CompanyRs.s business depends significantly on interest income from its operations. It is exposed to interest rate risk, both as a result of lending at fixed interest rates and for reset periods which may differ from those of its funding sources. Interest rates are highly sensitive to many factors beyond the CompanyRs.s control, including the monetary policies of the RBI, deregulation of the financial sector in India, domestic and international economic and political conditions and, inflation. As a result, interest rates in India have historically experienced a relatively high degree of volatility.

The Company seeks to match its interest rate positions of assets and liabilities to minimize interest rate risk. However, there can be no assurance that significant interest rate movements will not have an adverse effect on its financial position.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The standalone total revenues of the Company were Rs.2066.09 lakhs for the financial year under review as against previous year

Rs.2871.82 lakhs registering decline of 28.05%. However the Standalone Profit after Tax was Rs.579.47lakhs for the financial year under review as against previous year Rs.288.54 lakhs which was almost at 2.01 times higher than previous year and PAT including Comprehensive Income was at Rs.174.71 lakhs as compared to Rs.1524.80 lakhs which was almost at 7.73 times lesser than previous year.

Particulars	Standalone Figures (Rs. in Lacs)
	2024-25	2023-24
Revenue from Operations	1421.40	2641.07
Revenue from other Income	644.69	230.75
Total Revenue	2066.09	2871.82
Profit/ Loss after Tax	579.47	288.54
Other comprehensive income	(404.76)	1236.26
Total comprehensive income for the period	174.71	1524.80

The Company is mainly engaged into business of trading in securities. The revenue from Operations includes revenue of Rs.1094.82 lacs generated from sale of shares and Rs.355.42 lacs from sale of fabrics (previous year Rs.2451.99 and Rs.158.36 lacs respectively) aggregating the total revenue of Rs.2066.08 (previous year Rs.2871.82 lacs).

We are debt free and have no interest expense. In the current financial year, it has been observed that the Return on Net Worth (RoNW) has increased from 1.97 times as compared to previous year. RoNW is a profitability indicator that measures the returns generated by a company on its shareholdersRs. equity.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The CompanyRs.s operating and business control procedures have been framed in order that they ensure efficient use of resources and comply with the procedures and regulatory requirements. The company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.

HUMAN RESOURCE DEVELOPMENT:

The Company believes that the human resources are vital resource in giving the company a competitive edge in the current business environment. The companyRs.s philosophy is to provide congenial work environment, performance oriented work culture, knowledge acquisition/ dissemination, creativity and responsibility. As in the past, the company enjoyed cordial relations with the employees at all levels.

The Company continues to accord the highest priority to health and safety of its employees and communities it operates in. The Company has been fully committed to comply with all applicable laws and regulations and maintains the highest standard of Occupational Health and Safety and ensures safer plants. We believe in good health of our employees.

Further, to prevent the spread of pandemic Covid-19, the Company has taken all precautionary measures required, such as social distancing, use of masks and sanitizers etc., at all its plant and construction sites as well as at office locations. Your Company is in full compliance of all Government directives issued in this behalf.

SUBSIDIARY COMPANY:

As there are no subsidiaries of the Company, Investment made in Subsidiaries is NIL.

SEGMENT-WISE PERFORMANCE:

The Company operates in single reported segment with main business of Finance and Share Trading activity.

PERFORMANCE OF THE BOARD AND COMMITTEES:

During the year under review, the performance of the Board & Committees and Individual Director(s) based on the below parameters was satisfactory:

(a) Most of the Directors attended the Board meeting;

(b) The remunerations paid to executive Directors are strictly as per the company and industry policy.

(c) The Independent Directors only received sitting fees.

(d) The Independent Directors contributed a lot in the Board and committee deliberation and business and operation of the company and subsidiaries based on their experience and knowledge and Independent views.

(e) Risk Management Policy was implemented at all critical levels and monitored by the Internal Audit team who places report with the Board and Audit committee.

KEY FINANCIAL RATIOS:

In accordance with the amended SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company is required to give details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial

year) in key financial ratios, along with detailed explanations thereof: The Company has identified following ratios as key financial ratios:

Ratio Analysis	Numerator	Denominator	F.Y. 2024-25	F.Y. 2023-24	Variance	Remark
Current Ratio	Current Assets	Current Liabilities	27.69	63.88	57%	The difference in the ratios is more than 25% between the two Financial years; the reason behind such a huge difference is decrease in Current Investment and Inventories during Financial year.
Debt Equity Ratio	Total Liabilities	ShareholderRs.s Equity	0.000	0.002	22%	-
Debt Service Coverage Ratio	Net Operating Income	Debt Service	19,158	4063.60	371%	The difference in the ratios is more than 25% between the two Financial years; the reason behind such a huge difference is due to Increase in profits during Financial year.
Return on Equity Ratio	Profit for the period	Avg. ShareholdersRs. Equity	0.08	0.05	68%	The difference in the ratios is more than 25% between the two Financial years; the reason behind such a huge difference is Increase in profit during Financial year.
Inventory Turnover Ratio	Cost of Goods sold	Average Inventory	0.80	1.00	20%	-
Trade Receivables Turnover Ratio	Net Credit Sales	Average Trade Receivables	24.29	40.57	-40%	The difference in the ratios is more than 25% between the two Financial years; the reason behind such a huge difference is Decrease in trade receivable during Financial year.
Trade Payables Turnover Ratio	Total Purchases	Average Trade Payables	10.07	21.29	-53%	The difference in the ratios is more than 25% between the two Financial years; the reason behind such a huge difference is Decrease in trade payables during Financial year.
Net Capital Turnover Ratio	Net Sales	Average Working Capital	0.39	0.51	23%	The difference in the ratios is more than 25% between the two Financial years; the reason behind such a huge difference is Decrease in sales during Financial year.
Net Profit Ratio	Net Profit	Net Sales	0.41	0.11	273%	The difference in the ratios is more than 25% between the two Financial years; the reason behind such a huge difference is Increase in profit during Financial year.
Return on Capital employed	EBIT	Capital Employed	0.10	0.05	102%	The difference in the ratios is more than 25% between the two Financial years; the reason behind such a huge difference is Increase in profit during Financial year.
Return on Investment	Return/Profit / Earnings	Investment	0.08	0.06	43%	The difference in the ratios is more than 25% between the two Financial years; the reason behind such a huge difference is Increase in profit during Financial year.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

The provision of the Companies Act, 2013 relating to CSR Initiatives are not applicable to the Company during F.Y. 2024-25.

COMPLIANCE:

The Compliance function of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal guidelines. The Company continues to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the CompanyRs.s Board of Directors and the CompanyRs.s Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/internal guidelines on a periodic basis.

CAUTIONARY STATEMENT:

Statements in this Management Discussion & Analysis describing the CompanyRs.s objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the CompanyRs.s operations include economic developments in the country and improvement in the state of capital markets, changes in the Government regulations, tax laws and other status and other incidental factors.

	By Order of the Board of Directors
Registered Office:
Dhanlaxmi Cotex Limited	Sd/-	Sd/-
CIN:L51100MH1987PLC042280	Mahesh S. Jhawar	Rahul M. Jhawar
285, Princess Street, 2nd Floor,	(Managing Director)	(Director)
Chaturbhuj Jivandas House, Mumbai - 400 002	DIN: 00002908	DIN: 07590581
H Email: dcotex1q87@gmail.com Website: www.dcl.net.in	Place: Mumbai	Place: Mumbai
SContact No. : 022-49764268 022-49764223 / 21 /22	Date: 13/08/2025	Date: 13/08/2025