Dolfin Rubbers Ltd Management Discussions

NAMASTE SHAREHOLDERS

The Management discussion and Analysis Report is a reflection of the current state of business of the company. It also deals with opportunities and challenges faced by Company and future outlook.

INDIA MARKET OVERVIEW

The India tyre market size attained a volume of 203.12 million Units in 2025. The rising demand for electric two-wheelers and fleet-integrated electric buses is compelling tyre manufacturers to develop low-resistance, high-durability tyres tailored to EV- specific torque and load dynamics. As a result, the market is expected to grow at a CAGR of 6.60% during the forecast period of 2026-2035 to reach a volume of 384.88 million Units by 2035.

The market dynamics is shaped by a wave of innovation and supportive government policies. As per industry reports, the Indian tyre exports recorded a turnover of over INR 23,073 crore in FY24, with a strong push from OEM and replacement demand. Government schemes like the Production Linked Incentive (PLI) for the auto sector and the National Electric Mobility Mission have invested major funds for tyre makers, especially those investing in smart manufacturing and EV-compatible tyres. The Ministry of Road Transport & Highways push to upgrade highways under the Bharatmala project is also increasing the demand for high-performance tyres.

Despite some challenges faced by the manufacturing sector, India has seen growth in sectors like technology, healthcare and automobiles, which has provided a buffer to the overall economic performance.

(source: https://www.expertmarketresearch.com/reports/india-tvre-market)

GLOBAL ECONOMY

Global growth is projected at 3.3 percent for 2026 and 3.2 percent for 2027, revised slightly up since the October 2025 World Economic Outlook. Technology investment, fiscal and monetary support, accommodative financial conditions, and private sector adaptability offset trade policy shifts.

Global inflation is expected to fall, but US inflation will return to target more gradually. Key downside risks are reevaluation of technology expectations and escalation of geopolitical tensions.

Policymakers should restore fiscal buffers, preserve price and financial stability, reduce uncertainty, and implement structural reforms.

The global economy has been surprisingly resilient, despite significant central bank interest rate hikes to restore price stability.

The following points highlights the scenario of global economy

• Global prospects and policies,

• Tracing the Effects of Monetary Policy through Housing Markets,

• Slowdown in Global Medium-Term Growth,

• Trading Places: Real Spillovers from G20 Emerging Markets.

(source : World Economic Outlook Update, January 2026: Global Economy: Steady amid Divergent Forces)

INDIAN ECONOMY

The Indian tire market size stands at USD 2.77 billion in 2025 and is forecast to reach USD 4.24 billion by 2030, expanding at an 8.91% CAGR over 2025-2030. Accelerating infrastructure spending, two-wheeler electrification, and radial-upgrade regulations push demand upward even as natural-rubber cost swings pressure margins. Replacement activity keeps volume stable while original-equipment orders rise alongside domestic vehicle production. Government anti-dumping duties and the BIS star-labeling framework reinforce the value proposition of locally manufactured, fuel-efficient products. Competitive differentiation is shifting from price to performance, particularly toward low-rolling-resistance, sensor-enabled, and EV-optimized designs that reduce fleet operating costs and align with tightening emission rules.

(Source: https://www.mordorintelligence.com/industry-reports/india-tire-market)

INDIAN AUTO COMPONENTS OVERVIEW

India has emerged as the fastest-growing economy in the world in recent years. Rising incomes, higher infrastructure spending, and supportive manufacturing incentives have together accelerated the automobile sector, making it a critical pillar of Indias growth story. The two-wheeler segment, driven largely by the expanding middle class, continues to dominate the market, with sales reaching 19.6 million units in FY25. This surge in demand has also encouraged the expansion of original equipment and auto component manufacturers, helping India build strong expertise in this space and enhancing global demand for Indian vehicles and components.

Indias automotive sector outlines an ambitious yet attainable vision by 2030. The automotive component production reaching US$145 billion, with exports tripling from US$20 billion to US$60 billion. This expansion would elevate Indias global automotive value chain share from 3% to 8%. Supporting this growth, the auto component industry has become a vital segment of the economy, spanning large corporations to micro enterprises across manufacturing clusters nationwide. It accounted for 2.3% of Indias GDP in FY25 and provided direct employment to over 1.5 million people.

A figure expected to rise as the sectors GDP contribution reaches 5-7% by 2026. Indias auto-component industry is poised to reach US$ 200 billion by 2030, supported by its cost competitiveness, skilled workforce, and growing domestic demand, according to a McKinsey report titled Shaping the future of Indias auto component industry.

The Indian auto component industry recorded a turnover of Rs. 6,73,557crore (US$ 88.20 billion) in FY25, registering a CAGR of 10.22% between Fy20 and FY25. The sector is projected to achieve exports worth Rs. 8,54,700 crore (US$ 100 billion) by 2030, underscoring its global competitiveness. In FY25, exports stood at Rs. 1,92,326 crore (US$ 22.9 billion). North America remained the largest export destination with a 32% share, recording 8.4% growth, while Europe, with a 29.5% share, registered a 2.1% decline. Asia accounted for 26% of exports and witnessed robust growth of 15.1%. The key components sold to OEMs are engine components (26%), body/chassis (14%), suspension & braking (15%), drive transmission & steering (13%), and electricals & electronics (11%). According to a McKinsey report, Indias auto component exports are projected to reach US$ 70100 billion by FY30, driven by rising demand for electric vehicle (EV) technologies and global supply chain diversification. Indian SMEs could capture US$ 20-30 billion of this opportunity by leveraging cost advantages and high-quality standards.

(Source: Auto Components. Growth of Automotive Components Industry in India IBEF)

OUTLOOK FOR THE FINANCIAL YEAR 2025-26

FY 2025-26 had been a landmark year for the Indian automobile industry, supported by a series of structural policy reforms that had strengthened demand fundamentals and significantly boosted consumer confidence. Therefore, the industry was optimistic and expecting growth to continue in all the vehicle categories in 2026-27, continuing strong domestic momentum from the latter half 2025-26.

Looking ahead, domestic demand and macroeconomic fundamentals remain robust as we step into FY 2026-27, which should aid steady growth for the industry. However, uncertainties arising from the West Asia conflict need to be closely monitored, as it may have impacts on production, commodity prices, fuel prices, freight rates and the overall economy.

(Source: Auto industry reports record sales in FY26)

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company is mainly engaged in the business of Manufacturing of Rubber Tyres and Tubes. So the Management considers as this is the only business segment of the Company.

The tyre market in India is gaining strong momentum, as rapid urbanization, rising vehicle ownership, and expanding road infrastructure continue to accelerate demand across segments. Supportive government policies, increasing adoption of radial and tubeless technologies, and growing replacement tyre requirements are reinforcing growth. Advancements in tyre engineering, the emergence of electric vehicle (EV)-specific tyre designs, and strengthening domestic manufacturing capabilities are bolstering the market share.

Tube and Tubeless Tyres Insights:

• Tube Tyres

• Tubeless Tyres

Tubeless tyres exhibit a clear dominance with a 79% share of the total Indian tyre industry in 2025.

Tubeless tyres dominate the India tyre market, owing to significant advantages in safety, fuel efficiency, and overall maintenance convenience over traditional tube-type alternatives. The widespread adoption across passenger cars and modern two-wheelers reflects growing consumer preference for products that offer reduced puncture risks, improved heat dissipation, and superior handling characteristics at higher speeds. Easy repairability and lower downtime during puncture incidents further Enhance their appeal among daily commuters.

The tubeless segment is further strengthened by ongoing regulatory developments and manufacturer emphasis on safety- enhanced tyre designs that align with global automotive standards. Lightweight construction characteristics enable improved fuel efficiency and extended mileage, making tubeless tyres the preferred specification for both economy and premium vehicle categories. OEMs are increasingly standardizing tubeless tyres across new vehicle models to meet evolving safety expectations. Additionally, advancements in rubber compounds and tread technology continue to improve durability and ride comfort, supporting sustained segment growth.

(Source: India Tyre Market Size, Competitors & Forecast to 2034)

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE. (ON STANDALONE BASIS):

OPERATIONAL PERFORMANCE

Particulars	2025-26	% to Total Income	2024-25	% to Total Income
Revenue	16975.44	99.45	14358.58	99.70
Other Income	42.51	0.25	42.51	0.29
Total Turnover	17070.66	100	14401.09	100

The net turnover of the Company has increased substantially to INR 14401.09 lakh in the year 2025-26 as against INR 14401.09 lakh in the year 2024-25(previous year).

FINANCIAL PERFORMANCE

The details of the financial performance of the company appear in the Balance Sheet, Profit & Loss Account and other financial statements forming part of this Annual report. For financial highlights please refer heading ‘FINANCIAL RESULTS of Boards Report.

Risk Management

Risk management is the process of identifying, assessing, and prioritizing risks, then deploying resources in a coordinated and cost-effective manner to reduce the probability and/or impact of uncertain occurrences, or to optimize the realization of opportunities. When there are competing demands on limited resources, risk management provides a mechanism for prioritizing. Risk management also aims to detect and manage dangers that could have a significant impact on the company or even bring it down. The risks are classified into strategic risks, operational risks, financial risks and external risks. The Companys pro active approach towards identifying risks and developing mitigation strategy has led to creation of a resilient business model. Its approach to the unforeseen challenges has strengthened its core over the past 28 years, making it stronger and better every day.

Opportunities and Threats

Opportunities remain immense as India is one of the highest growing economies at just below than $4trillion economy. With rise in demand in OE and replacement segment, new opportunities wait for the company.

Opportunities

• Highly efficient Human Resource - A Company needs a talented and proficient human asset to become bigger. Dolfin Rubbers Limited is honored with immense human force all through with great skills. They have put resources into getting assets, and the arrival they get is large.

• Good Organizational Culture - While it comes to cutting edge working framework and practical methodologies, your Company will consistently be on the top. From generally rehearsed administration framework to lean assembling subtleties, the Company has set models for the individual organizations.

• Holds an Excellent Brand Image - This is one of the most significant strategies of Dolfin Rubbers Limited. At whatever point individuals search for vehicles, they look for the brand name ‘ Dolfin Rubbers Limited, and that has kept them a long way in the replacement market.

• Diversified Portfolio -Your Company have an enormous number of variants and models of 2 and 3 Wheelers.Dolfin Rubbers Limited. has spread its wings to a wide range of vehicles in this market.

• Throughout India Supply Chain-They have outlets, branch organizations, fabricating production lines far and wide. The Indian sales network of Dolfin Rubbers Limited is extremely one of the best qualities of this organization.

• High Production Capability-Dolfin Rubbers Limited is giving genuine challenge to its peers on this point as they have a high generation limit of creating more than 5 Lakh tyres both tubeless and tube type and more than 50 Lakh tubes every year.

Threats:

• Competition: The organization faces strong competition from rival companies as well as from local players in each regional market in which they work.

• Price fluctuations: The cost of raw materials for tyres, including prices of synthetic rubber, carbon black, chemical solvents, etc., are all extremely unpredictable, posing immense challenges for tyre firms.

• Government Policies: Change in Government policies can adversely affect on the company.

• Competitors Pricing and Discount offers can be a major threat to the company.

• Cheaper Tyres in China: Imported Chinese tyre goods are cheaper and thus pose a tough market competition. Imports by the Chinese will adversely affect the profitability of Goodyear Tyres.

• Volatility in rubber production: Indian rubber production is volatile and generally lower than the demand produced, and therefore the price of rubber fluctuates in light of demand. It has an impact on the firms pricing policy.

Adequacy of Internal Control Systems

The Company havean adequate Internal Control Systems in process which ensures that all the transactions are satisfactorily recorded and reported and all assets are protected against loss from an unauthorized use or otherwise. The Internal control s ystem is adequate and commensurate with the nature of its business and size of its operations, though continues efforts are being made to strengthening the same. The management also reviews the internal control systems and procedures to ensure its application.

Material Development in terms of Human Resources

The Company always believes that its growth is closely linked with the growth and overall development of its employees and to create an environment where excellence is recognized and rewarded. The target is to place right people at right position and to enhance the efficiency, working speed, competency and time management skill of its employees. The Companys endeavour is to create an environment where people can use all of their capabilities in promoting the business of the Company. Number of on rolls people employed as on March 31, 2025 is 780. The industrial relation continued to remain cordial during the year.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

As per SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to provide details of significant changes (change of 25% or more as compared to immediately previous financial year) in key financial ratios. Accordingly, the Company has identified the following ratios as key financial ratios: -

Ratio	Unit	FY 2025-26	FY 2024-25	% Change
Current Ratio	Times	1.78	1.77	0.30
Debt Equity Ratio	Times	0.48	0.54	-10.79
Debt Service Coverage ratio	Times	8.01	7.55	6.10
Inventory Turnover Ratio	Times	5.80	6.35	-8.67
Trade Receivables Turnover Ratio	Times	10.04	8.62	16.46
Trade Payable Turnover Ratio	Times	25.61	26.63	16.64
Net Capital Turnover Ratio	Times	8.07	7.91	2.05
Return on Equity	%	15.32	16.62	-7.83
Net Profit Ratio	%	3.26	3.57	-8.59
Return on Capital Employed	%	19.13	21.97	-12.93

*Due to increase in debt.

Cautionary Statement

Statements made on Management Discussion & Analysis, describing the Companys expectations or predictions are "forwardlooking statements". These statements are based on certain assumptions and expectation of future events. The actual results may differ from those expected or predicted. Prime factors that may make a difference to the companys performance include market conditions, input cost, Government policies/regulations, economic conditions, and other incidental factors.