Divyashakti Ltd Management Discussions

The Management of Divyashakti Limited is pleased to present the Management Discussion and Analysis Report for the financial year. This report provides a clear and comprehensive overview of the Companys business operations, industry structure, key opportunities and challenges, and overall performance. It also highlights significant developments, strategic initiatives, associated risks, and the future outlook, offering stakeholders valuable insights into the Companys direction and market positioning.

Economic Overview

Global Economy 2025

The Global economy in 2025 has been charactered by a series of complex challenges and opportunities. According to the latest reports from the International Monetary Fund (IMF) and the World Bank, global growth is projected to remain steady at 3.3% in 2025 and 3.3% in 2026.

While the US economy displayed resilience, Europe and several developing regions faced downgrades due to escalating geopolitical tensions, commodity market disruptions, and heightened concerns over a potential full-scale trade war, particularly in the wake of a political leadership change in the US that tempered expectations of a soft landing. Amid this challenging global backdrop, Emerging Asia emerged as a bright spot, demonstrating relative economic strength. Meanwhile, easing inflationary pressures prompted several countries, including the US, to shift their monetary policy stance. In light of the subdued growth outlook, many advanced economies-initiated interest rate cuts in an effort to support economic activity.

Indian economy

India remains the fastest-growing major economy in the world, though growth is expected to taper in FY2025, albeit from a higher base in the previous year. According to the National Statistical Office (NSO), based on its First Advance Estimates, Indias real GDP grew by 6.40%, down from 9.20% in the year-earlier period.

Nominal GDP for FY25 is estimated at Rs. 33.10 lakh crore (US$ 3.8 trillion) with growth rate of 9.9%, compared to Rs. 30.12 lakh crore (US$ 3.5 trillion) in FY24. Strong domestic demand for consumption and investment, along with the Governments continued emphasis on capital expenditure, are seen as among the key driver of the GDP in the second half of FY25. In FY25, Indias exports stood at Rs. 37.31 lakh crore (US$ 433.56 billion), with Engineering Goods (26.88%), Petroleum Products (13.86%) and electronic goods (8.89%) being the top three exported commodity. Rising employment and increasing private consumption, supported by rising consumer sentiment, will support GDP growth in the coming months.

Indias GDP growth trend (%)

According to the January 2025 edition of the World Banks Global Economic Prospects (GEP) report, Indias economy is expected to grow steadily at 6.7% in both FY2026 and FY2027.

FY2022	FY2023	FY2024	FY2025	FY2026E
9.10%	7.0%	8.20%	6.40%	6.70%

Industry overview and outlook Global Granite Industry and Key Trends

The global granite market was valued to reach a market size of USD 19.97 Billion in 2024. The industry is expected to grow at a CAGR of 2.30% during the forecast period of2025-2034. The growing demand for natural stone in the construction and interior design sectors is a key driver of the granite market. Granites durability, aesthetic appeal, and versatility in applications such as countertops, flooring, and facades drive its popularity, thus aiding the market growth to attain a valuation of USD 25.07 Billion by 2034.

Quartz

Engineered Stone Market in 2025 is evaluated at USD 7.20 billion. The global market size was more than USD 12.22 billion in 2033 and is anticipated to grow at a CAGR of around 5.44%, reaching USD 12.22 billion revenue by 2033. Asia pacific is expected to bring in USD 3.67 billion by 2033, driven by increasing use of engineered stone in interior

The primary reason behind the growth of the engineered stone market is the increasing demand for engineered stone across the world.

As we look ahead, we anticipate subdued granite sales in FY 2025, driven by ongoing challenges in the U.S. housing market. Nevertheless, we remain optimistic about the performance of our engineered stone segment, with encouraging prospects for both revenue growth and improved profitability.

MANAGEMENT DISCUSSIONS & ANALYSIS REPORT

Industry Overview - Granite Sector

Granite continues to be one of the most valued and durable natural stones in the construction and infrastructure domain. Traditionally used in monumental structures such as temples, palaces, and fortifications, granite has maintained its prominence owing to its intrinsic properties?mirror-like polishability, high compressive strength, and visual appeal. With advancements in cutting and finishing technologies, the demand for granite has accelerated across both domestic and international markets.

The global granite market is broadly segmented into four key sectors:

• Natural Stone Processing Industry

• Building and Construction Industry

• Funerary Industry

• Consumer & Interior Design Markets

This classification is driven by a diverse range of end-use applications, from premium countertops to large architectural facades, monuments, and decorative tiles.

Economic and Market Outlook

The Company has identified the United States and several other geographies as key international markets for its export-focused growth strategy. Over recent financial years, the Company has experienced a sustained growth trajectory in its overseas business, strengthening its foothold as a reliable exporter of high-quality granite and engineered stone products. The management remains optimistic about further enhancing market share and improving export realizations in the coming years.

Business Overview

Divyashakti Limited operates out of Hyderabad, Telangana, with its manufacturing and export activities centered around a single business vertical:

• Polished Granite Slabs & Tiles

• Engineering Stone - Quartz Slabs

The Company exports to multiple countries and continues to consolidate its position in premium international markets through product quality, operational efficiency, and customer-centric service.

Financial and Operational Highlights - FY 2024-25

Particulars	FY 2024-25	FY 2023-24
Net Sales Revenue	Rs. 6,387 Lakhs	Rs. 6,977 Lakhs
Gross Profit (PBT before exceptional items)	Rs. 338.97 Lakhs	Rs. 322.68 Lakhs
Net Profit After Tax (PAT)	Rs. 254.06 Lakhs	Rs. 231.65 Lakhs
Basic & Diluted Earnings Per Share (EPS)	Rs. 2.47	Rs. 2.26

Profitability Overview

Despite a decline in revenue by 8.45%, the Company achieved a growth of 4.80% in Profit Before Tax, amounting to Rs. 338.97 Lakhs as against Rs. 322.68 Lakhs in the preceding year. The increase in profitability was primarily driven by internal cost optimization measures and efficient operational management.

The Net Profit After Tax for the financial year stood at Rs. 254.06 Lakhs, up from Rs. 231.65 Lakhs in FY 2023-24, representing an increase of 9.66%. The Earnings Per Share (EPS) correspondingly increased to Rs. 2.47 from Rs. 2.26, indicating improved returns to shareholders.

Opportunities and Threats

The Company operates in a dynamic and globally competitive environment. As globalization deepens and customer expectations evolve, managing operational and financial risks becomes increasingly crucial. The management continuously monitors emerging risks and opportunities through structured assessments. The key industry threats and challenges currently identified include:

• Raw Material Sourcing Constraints:

The availability of high-quality granite blocks remains a major industry-wide challenge. Sourcing limitations, due to regulatory or environmental factors, are expected to persist and may impact production schedules and cost structures.

• Concentration Risk in Export Market:

While the Company has established a global footprint, a substantial portion of its revenue continues to be derived from the United States. Any geopolitical, economic, or regulatory disruption in that market could materially affect export volumes and profitability.

• Credit Risk from Geographically Dispersed Customers:

Despite conducting credit assessments at the time of order acceptance, the risk of delayed or defaulted payments from international customers persists, particularly in volatile markets.

• Foreign Exchange Volatility:

The Companys performance is exposed to foreign currency fluctuations, especially given its export-oriented model. Sudden shifts in currency valuation due to macroeconomic or geopolitical developments could adversely impact margins and reported earnings.

Risk Management

The Company has a structured risk management framework in place to proactively identify, evaluate, and mitigate various business and operational risks. These include:

• Market and Competition Risk

• Regulatory and Compliance Risk

• Foreign Exchange Risk

• Asset and Operational Risk

• Natural Calamities and Environmental Risks

The risk monitoring mechanisms are periodically reviewed by the senior management and internal auditors to ensure adequacy and responsiveness.

Internal Control Systems and Their Adequacy

The Company maintains a robust and adequate internal control system commensurate with the size and nature of its operations. These internal controls are designed to:

• Ensure reliability of financial reporting

• Safeguard Company assets

• Promote operational efficiency

• Ensure compliance with applicable statutory and regulatory requirements

Internal audits are conducted periodically, and reports are reviewed by the Audit Committee. Any control deficiencies identified are promptly addressed through corrective measures.

Human Resources and Industrial Relations

The Company recognizes that its human capital is a strategic asset in sustaining business performance and driving innovation. Key HR initiatives include:

• Skill development and training programs

• Merit-based appraisal systems

• Employee welfare and engagement initiatives

The industrial relations climate during the year remained cordial and constructive, enabling productivity and alignment with organizational goals. The Company remains committed to nurturing talent and fostering a culture of performance, collaboration, and integrity.

For and on behalf of the Board	Sd/-	Sd/-
	(N.HARI HARA PRASAD)	(M.R.K.PRASAD)
Place: Hyderabad	Managing Director	Director
Date: 29.05.2025	DIN: 00354715	DIN: 01781225