Euro Panel Products Ltd Management Discussions

ECONOMIC OVERVIEW Global Economy

The global economy demonstrated resilience during the calendar year 2025 despite persistent geopolitical conflicts, trade policy uncertainties, supply chain realignments and fluctuations in commodity prices. Moderating inflation across several advanced economies, gradual easing of monetary policies and stable consumer demand supported global economic activity. While geopolitical developments and economic volatility continued to influence business sentiment, investments in infrastructure, manufacturing and sustainable technologies provided a positive impetus to long-term growth.

Indian Economy

India continued to remain one of the fastest-growing major economies during FY 2025-26, supported by strong domestic demand, increased public capital expenditure, robust infrastructure development and sustained growth in the manufacturing sector. Government initiatives such as Make in India, PM Gati Shakti, Smart Cities Mission, Housing for All and increased investments in logistics and industrial infrastructure have continued to create significant opportunities for the building materials industry.

The growing emphasis on urbanisation, commercial real estate, affordable housing and sustainable construction is expected to further drive demand for premium fapade solutions and aluminium composite panels.

INDUSTRY OVERVIEW

The Indian building materials industry continued its positive growth trajectory during FY 2025-26, driven by increasing urbanisation, rising disposable incomes, expansion of commercial and residential construction and significant investments in infrastructure development.

The Aluminium Composite Panel (ACP) industry continues to witness increasing acceptance owing to its superior aesthetics, durability, lightweight characteristics, fire-retardant variants and ease of installation. Growing awareness regarding sustainable construction materials and technologically advanced fapade systems is expected to further strengthen industry demand.

With increasing preference for quality-certified products and premium architectural solutions, organised manufacturers possessing strong brands, advanced manufacturing facilities and extensive distribution networks are expected to benefit considerably.

BUSINESS OUTLOOK

The long-term outlook for the Company remains positive.

Indias infrastructure development, industrial expansion, commercial real estate growth and increasing demand for modern architectural fapade solutions are expected to create sustained opportunities for the Company over the coming years.

The Company remains committed to strengthening its market leadership through continuous product innovation, manufacturing excellence, operational efficiency and customer-centric solutions.

During the year under review, the Company further strengthened its long-term growth strategy through strategic expansion initiatives.

As part of its international expansion plans, the Company incorporated its Wholly Owned Subsidiary, Euro Panel Products Trading W.L.L., in the State of Qatar on August 28, 2025, to strengthen its presence in the Middle East and explore new business opportunities across international markets.

Further, the Company diversified into allied building material products through the incorporation of Euro Sealant Private Limited on April 28, 2026. The subsidiary has been established to manufacture and market sealants and other complementary construction products, thereby broadening the Companys product portfolio.

Subsequent to the close of the financial year, the Company incorporated Eurobond Dimensions Private Limited on July 15, 2026 to undertake the business of Manufacturing, Processing, Fabricating, Assembling, Altering, Converting, Designing of Aluminium Composite Panels (ACP), Aluminium Sheets, Coils and Allied Metal Products. The incorporation of this subsidiary is expected to strengthen the Companys manufacturing capabilities, support capacity expansion and enhance its long-term growth prospects.

These strategic initiatives reflect the Companys commitment to expanding its domestic and international presence, diversifying its business portfolio and creating sustainable long-term value for all stakeholders.

The Company also continues to strengthen its distribution network across India to improve market penetration and customer service while focusing on operational efficiencies and value-added products.

In the short to medium term, the Company expects:

Sustainable revenue growth supported by increasing market demand.

Expansion of domestic and international business operations.

Improved operating margins through better efficiency.

Higher contribution from value-added and premium products.

Continued investment in technology and manufacturing capabilities.

Effective working capital management and disciplined capital allocation.

COMPANY PERFORMANCE

FY 2025-26 was another year of strong operational and financial performance for the Company.

Revenue from Operations increased to 50,320.24 Lakhs as against 42,318.55 Lakhs in the previous financial year, registering healthy growth driven by increased market demand, expansion of the dealer network and improved product mix.

Profit After Tax in FY 2025-26 increased significantly to 2,656.45 Lakhs as compared to 1,843.07 Lakhs in FY 202425, representing a substantial improvement in profitability. The increase was primarily attributable to higher sales volumes, better operational efficiencies, improved capacity utilisation, prudent cost management and enhanced manufacturing productivity.

The Company continued to strengthen its manufacturing infrastructure through technology-driven investments while maintaining financial discipline and a healthy balance sheet. The successful migration of the Companys equity shares to the Main Boards of the National Stock Exchange of India Limited and BSE Limited during the year further strengthened its corporate profile and enhanced shareholder value.

OPPORTUNITIES & STRENGTHS

Eurobond has established itself as one of Indias most trusted Aluminium Composite Panel brands over the last two decades. The Companys strong market position is supported by continuous innovation, superior product quality and customer-centric business practices.

Key strengths include:

Strong and established EUROBOND brand with over two decades of market presence.

Comprehensive portfolio of Aluminium Composite Panels available in diverse colours, finishes, textures and specifications.

Advanced manufacturing facilities supported by backward integration.

Continuous investment in technology and product innovation.

Pan-India distribution network comprising dealers, distributors and depots.

Growing international business presence.

Experienced management team and skilled workforce.

Strong financial position.

Long-standing relationships with architects, consultants, contractors and channel partners.

These strengths position the Company favourably to capitalize on future growth opportunities arising from increasing demand in the construction and infrastructure sectors.

THREATS

The Company operates in a highly competitive industry characterized by:

Intense competition from organised and unorganised manufacturers.

Volatility in aluminium and polymer raw material prices.

Changes in government policies and trade regulations.

Rising logistics and transportation costs.

Pricing pressures within the building materials industry.

The Company continues to mitigate these risks through strategic sourcing, continuous product innovation, operational excellence, cost optimisation and strengthening customer relationships.

ENVIRONMENT, HEALTH & SAFETY

The Company remains committed to conducting its business in an environmentally responsible and sustainable manner while ensuring the health, safety and well-being of its employees and stakeholders.

Its manufacturing facilities continue to focus on responsible manufacturing practices through efficient utilisation of natural resources, waste reduction, recycling initiatives and energy conservation measures.

The Company also promotes a strong safety culture by implementing robust safety practices, conducting regular training programmes, safety audits and ensuring compliance with applicable environmental and occupational health regulations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate system of internal financial controls commensurate with the size, nature and complexity of its business operations.

The internal control framework is designed to ensure:

Protection and safeguarding of assets.

Reliability and accuracy of financial reporting.

Compliance with applicable laws and regulations.

Operational effectiveness and efficiency.

Prevention and detection of frauds and irregularities.

Independent Internal Auditors conduct periodic audits and submit their observations to the Audit Committee. The Audit Committee regularly reviews the effectiveness of internal controls and monitors the implementation of corrective measures wherever required.

RISK MANAGEMENT

The Company has a well-defined enterprise risk management framework to identify, evaluate, monitor and mitigate business risks.

The Board of Directors periodically reviews strategic, operational, financial, regulatory, cyber security, supply chain and market risks through appropriate governance mechanisms. Risk mitigation plans are regularly reviewed to ensure business continuity and sustainable long-term growth.

HUMAN RESOURCES

The Company firmly believes that its employees are its most valuable asset and the foundation of its long-term success.

Eurobond continues to nurture a culture of innovation, collaboration, integrity and continuous learning. The Company invests in employee development through regular training programmes, leadership development initiatives, performance management systems and employee engagement activities.

The Company remains committed to providing a safe, inclusive and growth-oriented work environment that encourages professional excellence and personal development.

As on March 31, 2026, the Company had a 628 dedicated workforce across its manufacturing facilities, corporate office and sales network, whose commitment continues to drive the Companys sustained growth and success.

DISCLOSURE ON ACCOUNTING TREATMENT

The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 read with the relevant Rules framed thereunder and other accounting principles generally accepted in India.

No accounting treatment different from that prescribed under the applicable Accounting Standards has been adopted in the preparation of the financial statements.

FINANCIAL REVIEW

During FY 2025-26, the Company delivered strong financial performance with significant improvement in revenue, profitability and operational efficiency.

The Companys financial position continues to remain strong with healthy liquidity, prudent leverage levels and efficient working capital management, providing a solid platform for future expansion.

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, INCLUDING

Ratio	FY 25 - 26	FY 24 - 25	Change(%)	Reason
Interest-Coverage Ratio	1.95	1.68	16.02%
Debt -Equity	1.01	0.87	15.55%
Net Profit Margin (%)	5.32	4.33	22.89%
Return on Net Worth	16.77	13.78	21.71%
Operating Profit Margin (%)	9.15	8.30	10.32%
Debtors Turnover	9.83	9.86	(0.30%)
Total Debts to Total Assets Ratio	0.42	0.37	11.09%
Long Term Debts to Working Capital	0.26	0.27	(2.27%)
Inventory Turnover ratio	2.03	1.98	2.50%

CAUTIONARY STATEMENT

Statements contained in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed or implied due to various factors including changes in economic conditions, government policies, industry demand, raw material prices, foreign exchange fluctuations, competitive pressures, technological developments and other risks beyond the Companys control.

The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements based on subsequent developments, information or events.