Felix Industries Ltd Management Discussions

Economic overview

Global economy

After enduring an extended phase of exceptional disruptions, the global economy exhibited early signs of stabilisation during much of 2024. Inflation, which had surged to multi-decade highs, began to ease gradually, labour markets showed signs of normalisation, and global growth edged closer to potential, averaging around 3%. However, by the end of the year, this tentative recovery began to lose steam. Real GDP growth fell short of expectations, and high-frequency indicators pointed toward a deceleration. Although global trade volumes remained relatively resilient, this was largely driven by anticipatory export-import activity, particularly between China and the United States, in advance of expected tariff hikes. At the same time, progress on disinflation plateaued, with core inflation ticking up again in several economies, especially in goods and services.

The fragility of this recovery has been further exacerbated by major policy realignments, most notably the rise in US-led trade tariffs and retaliatory measures from key partners. These developments have injected renewed uncertainty into global trade and financial systems. Markets responded with heightened volatility; equity markets declined, bond yields surged, and confidence among consumers, businesses, and investors deteriorated. On the domestic front, many nations are grappling with widening income disparities, persistent fiscal imbalances, and intensifying cost-of-living pressures, driven in part by stagnant median incomes and rising housing costs. Against this backdrop, the global economys resilience is once again being tested, with growth becoming increasingly uneven across regions and socioeconomic groups.

Looking ahead, global growth is expected to slow further, declining from an estimated 3.3% in 2024 to 2.8% in 2025, before staging a modest recovery to 3% in 2026. This broad-based downgrade reflects the cumulative impact of evolving trade policies, which are disrupting cross-border flows, amplifying uncertainty, and suppressing business sentiment in most major economies. While selective fiscal support, particularly in the Eurozone and China, may provide some cushion against the slowdown, the broader outlook remains clouded by escalating trade tensions.

The sharp rise in tariff-related disputes, especially between the United States and its trading partners, has introduced unprecedented policy unpredictability, hindering any clear consensus on the future direction of global economic momentum. The possibility of worsening geopolitical tensions only adds to the complexity. Consequently, the global outlook is increasingly contingent on how these dynamics unfold, with a wide range of potential growth scenarios likely to define the pace and distribution of recovery in the years ahead.

Source: IMF - World Economic Outlook - April 2025

Indian economy

Indias economy demonstrated remarkable resilience and sustained momentum in FY25, registering a robust growth performance that aligned closely with its decade-long trend. The expansion was broad-based, underpinned by healthy contributions from all key sectors. Agriculture benefited from improved crop yields, supporting steady rural recovery. The industrial sector saw a strong uptick led by construction and mining activity, while the services sector surged ahead on the back of increased traction in transport, communication, and financial services.

Inflationary pressures remained largely contained despite global commodity price volatility, with price levels averaging within the targeted range. Macro-financial indicators continued to strengthen - non-performing assets in the banking sector dropped to multi-year lows, while the current account deficit remained well managed, highlighting macroeconomic stability and prudent policymaking.

On the external front, merchandise exports showed solid improvement, complemented by robust growth in services exports, particularly in technology and knowledge-driven sectors, reinforcing Indias global competitiveness. Foreign direct investment flows remained steady, reflecting enduring investor confidence in Indias long-term growth narrative and policy direction. Domestically, high-frequency indicators, ranging from GST collections and energy consumption to credit off take, confirmed the economys expanding momentum. Additionally, infrastructure build out accelerated, tax buoyancy improved, and rural demand showed clear signs of revival, collectively contributing to a well-balanced and inclusive recovery.

Looking ahead, Indias GDP is projected to grow in the range of 6.5% to 7.0% in FY26, with strong support from domestic demand, rural resilience, and enhanced capital formation. Structural reforms aimed at strengthening digital infrastructure, logistics efficiency, and public service delivery are expected to further improve productivity and job creation. The governments continued emphasis on capital expenditure and a gradual pick-up in private sector investment are likely to generate a multiplier effect across income and employment levels.

That said, the macroeconomic environment remains sensitive to external risks. Geopolitical tensions, energy price volatility, and evolving trade dynamics pose potential headwinds. However, Indias diversified growth drivers, sound foreign exchange buffers, improved fiscal headroom, and institutional reforms provide a strong foundation to absorb global shocks. With continued focus on fiscal prudence, ease of doing business, and economic formalisation, India is well-positioned to retain its status as the fastest-growing major economy, advancing confidently from resilience to global relevance.

Source: The Economic Survey 2024-25 by Department of Economic Affairs

Industry overview

Global water and wastewater treatment industry

The global water and wastewater treatment industry is witnessing sustained momentum, driven by mounting environmental pressures, regulatory imperatives, and the rising need for sustainable water resource management. Valued at over US$ 323 billion in 2023, the market is poised for significant growth, projected to exceed US$ 617 billion by 2032, reflecting a strong compound annual growth rate. North America currently leads the sector, with the United States anticipated to contribute significantly to global demand through investments in water reuse, membrane filtration, and intelligent water management systems.

Water and wastewater treatment has become essential to meet the rising demand for clean water across municipal, agricultural, and industrial sectors. With more than 40% of the worlds population living in water-stressed regions and only about 1% of the Earths water being freshwater, countries increasingly rely on advanced treatment methods, including desalination, to convert seawater into potable sources.

As industries modernise and cities expand, the demand for smart and efficient treatment technologies has grown in tandem. Today, advanced systems are being developed to comply with stringent environmental standards while ensuring operational efficiency. These technologies enable precision monitoring, predictive maintenance, and cost optimisation, resulting in enhanced service quality and reduced environmental footprint.

Manufacturers and solution providers continue to invest in R&D to develop next-generation technologies. These innovations not only enhance treatment efficiency but also enable the production of high-quality sludge that can be repurposed for energy generation or agricultural use, contributing to circular economy goals.

This wave of technological advancement is fostering healthy competition and accelerating the adoption of smart, sustainable water treatment solutions worldwide. Governments across the globe are playing a pivotal role by enforcing stricter effluent discharge regulations.

Regulatory frameworks such as the U.S. EPA guidelines and the European Union Water Framework Directive are compelling industries and municipalities to adopt advanced treatment technologies to meet high-quality discharge standards.

Also, rapid urbanisation and population growth are placing immense stress on existing water infrastructure. Urban centres are generating large volumes of wastewater, outpacing the capacity of ageing municipal systems. Inadequate sanitation in many developing economies is further aggravating pollution levels. In response, governments and municipalities are ramping up investment in the expansion and modernisation of wastewater treatment facilities, underlining the sectors critical importance in safeguarding water security and public health.

Source: https://www.fortunebusinessinsights. com/water-and-wastewater-treatment-market-102632

Indian wastewater treatment industry

Indias wastewater treatment market was valued at US$ 9.64 billion in 2024 and is projected to nearly double by 2033, reaching US$ 18.63 billion. This growth, at a projected CAGR of 7.60% during 2025-2033, reflects a confluence of structural and environmental factors. Rapid urbanisation, expanding industrial activity, and intensifying water scarcity are key demand drivers for wastewater treatment solutions across the country. In addition, rising environmental consciousness, increasingly stringent regulatory frameworks, and the urgent need for sustainable water resource management are prompting greater adoption of advanced treatment technologies. Government-backed policies, ongoing population growth, and the expanding footprint of industry continue to foster innovation and investment in this vital sector, positioning India as a major growth market for modern wastewater treatment infrastructure.

A key catalyst for this momentum is the growing adoption of advanced treatment technologies. Conventional processes such as chemical and biological treatments are increasingly being enhanced with modern methods like membrane filtration, reverse osmosis (RO), and advanced oxidation processes (AOP). These technologies deliver superior efficiency in removing contaminants, making treated wastewater safe for reuse across sectors such as textiles, pharmaceuticals, agriculture, and manufacturing. As freshwater scarcity intensifies, especially in drought-prone regions, the demand for treated water is expected to rise significantly.

Recent data from the Central Pollution Control Board (CPCB) highlights the urgency of this shift: as of December 2022, only 28% of the sewage generated in Indian cities was being effectively treated. This underscores both the gap and the opportunity in building robust, decentralised wastewater infrastructure.

Technology is playing a transformative role in bridging this gap. Intelligent water treatment systems, enabled by IoT and real-time monitoring, are improving operational visibility and process optimisation. These smart systems not only help industries comply with environmental norms but also enhance cost-efficiency and reliability, critical enablers for broader adoption of sustainable practices.

Equally important is the growing emphasis on wastewater recycling and reuse. With rising water stress, industries, municipalities, and agriculture are increasingly relying on recycled water for non-potable purposes such as irrigation, landscaping, and cooling. Many urban centres are investing in decentralised treatment plants, while water-intensive industries are transitioning to closed-loop systems that reduce reliance on freshwater. Government-backed initiatives, particularly AMRUT and AMRUT 2.0, are reinforcing this shift by mandating minimum wastewater recycling targets for cities and incentivising new treatment infrastructure.

Source: https://www.imarcgroup.com/ india-wastewater-treatment-market

Indian solid waste management industry

The Indian solid waste management market was valued at US$12.21 billion in 2024, and is projected to grow steadily at a compound annual growth rate of 6.18 per cent between 2025 and 2033, reaching approximately US$21.86 billion by 2033. This robust growth trajectory reflects both the scale of the challenge and the expanding scope for technologically advanced, sustainable solutions.

Rapid urbanisation, intensifying waste volumes and escalating regulatory imperatives, most notably through the Swachh Bharat Mission and forthcoming amendments to the Solid Waste Management Rules, are serving as powerful growth catalysts for the sector. In this evolving landscape, our engineering-centric approach positions Felix Industries to drive value through innovation and compliance.

We remain committed to leveraging our technical expertise in waste-to-energy systems, material recovery facilities, and circular economy integrations. Our capacity to deploy scalable, efficient waste treatment infrastructure aligns closely with emerging investor interest in ESG-compliant and resilient urban engineering solutions.

Strategically, we view these market dynamics not merely as external tailwinds but as opportunities to deploy differentiated, high-impact technologies. Our focus on modular, replicable designs enables rapid deployment across municipal and industrial settings, while our operational excellence ensures cost-effective delivery and strong alignment with policy priorities

Source: https://www.imarcgroup.com/ india-solid-waste-management-market

Indian hydrocarbon recycling industry

We observe that Indias used-oil recycling ecosystem remains highly fragmented and largely informal, despite its significant potential to diminish crude oil dependence, reduce energy consumption, and lower greenhouse-gas emissions. This structural fragmentation introduces environmental risks and results in substantial losses of recoverable value across the supply chain.

From FY25, the Governments Extended Producer Responsibility (EPR) framework has instituted a mandatory recycling quota of 5 per cent for net used oil, escalating to 50 per cent by FY31. The requisite EPR certificates are projected to increase from approximately 0.08-0.09 million metric tonnes to nearly 0.85-1.00 million metric tonnes by FY31. This phased regulatory acceleration offers both the impetus and policy tailwinds necessary to formalise the sector and significantly scale hydrocarbon recycling infrastructure.

Within this evolving regulatory context, our commitment to engineering excellence positions us favourably. We see clear opportunity to deploy advanced re-refining technologies and to establish robust, traceable collection and processing networks. Our objective is to elevate waste-oil treatment from a largely informal system to a structured, technology-driven value chain, aligning with investor expectations for ESG performance and circular economy credentials.

Operationally, we intend to leverage modular, scalable systems capable of efficient throughput, quality control and compliance. By aligning with emerging regulatory standards and delivering re-refined base oil of assured quality, we anticipate tapping into a new growth vector within Indias broader recycling and hydrocarbon recovery market.

Source: https://energy.economictimes. indiatimes.com/news/oil-and-gas/indias-used-oil-recycling-sector-faces-structural-gaps-report-recommends-phased-targets-regulatory-reforms/119512496

Strengths

Integrated circular solutions & proprietary innovation

Felixs core strength lies in its end-to-end circular framework, covering water treatment, waste management, and hydrocarbon recovery, all reinforced by our Zero-Waste Philosophy. Products such as RoSoft, Aiwasun, advanced ZLD systems, and smart monitoring platforms enable us to transform wastes into valuable outputs. With over 100+ completed projects, we demonstrate credible leadership in deploying high-impact solutions that turn environmental liabilities into sustainable assets.

Operational scalability & execution expertise

Our extensive manufacturing presence in India and Oman, combined with flexible delivery frameworks (EPC, BOOT, BOT, DBO, O&M, PPP & equipment supply), ensures rapid, localised, and regulatory-compliant execution. This operational agility has enabled us to secure large cross-sector contracts, while structured acquisition-based growth has accelerated our entry into international markets.

Robust ESG credentials & multi-industry reach

ESG is not peripheral, it is core to our strategy. Beyond compliance, our solutions actively promote circularity and resource efficiency. We serve diverse industries, from pharmaceuticals and steel to oil & gas and commercial infrastructure, enhancing our strategic appeal to ESG-conscious investors and regulatory stakeholders.

Highly skilled and specialised workforce

At the heart of Felix Industries success lies a team of seasoned professionals whose expertise spans environmental engineering, geology, process technology, and advanced waste treatment systems. This diverse pool of talent equips us with the technical depth, problem-solving agility, and cross-disciplinary knowledge required to execute complex restoration and remediation projects with precision and efficiency.

2

Weaknesses

Complexities in large-scale project execution

Managing high-value, multi-phase assignments, often across diverse geographies, introduces exposure to cost overruns, working capital volatility, and execution delays. Moreover, projects are rarely standardised. Each initiative demands a customised approach, shaped by unique site conditions, regulatory requirements, and unforeseen technical or environmental challenges.

High capital intensity

Environmental restoration and advanced waste management demand a combination of highly specialised equipment, premium-grade materials, and skilled labour, each carrying a substantial cost burden. These investments, while essential for maintaining technological leadership and delivering high-performance solutions, can exert short-term pressure on margins and cash flows, and high ongoing operational expenses.

Tech dependency in emerging domains

High-potential emerging sectors rely heavily on sophisticated, cutting-edge technologies. They also demand a constant supply of strong R&D capabilities, and well-established maintenance and support systems to ensure seamless operation. Any disruption in the supply chain for critical components, proprietary equipment, or digital infrastructure could delay project delivery or impair system performance.

Intensifying market competition and brand positioning

The environmental engineering and sustainability solutions sector is witnessing heightened competition, with numerous domestic and global players competing for high-value EPC, BOOT, and technology-driven contracts. While Felix Industries has built a solid reputation through its proven expertise in water, wastewater, solid waste, and hydrocarbon management, the competitive landscape demands constant differentiation, not only in technical capability but also in visibility and brand perception.

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Opportunities

Expanding high-growth markets

The global water and wastewater treatment industry is on a strong upward trajectory, projected to grow at a CAGR of around 7-8% through 2032, while the Indian market is poised to nearly double over the same period. This expansion is fuelled by structural megatrends such as rapid urbanisation, intensifying climate-related water stress, rising industrial demand, and increasingly stringent environmental regulations. These forces are creating unprecedented opportunities for solution providers.

Supportive policy tailwinds

In India, landmark government initiatives, such as the Jal Jeevan Mission, Swachh Bharat Mission, AMRUT 2.0, and national wastewater reuse mandates; are injecting substantial public investment and accelerating private participation in the sector. Internationally, growing ESG-linked investment flows and policy frameworks promoting circular economy principles are further amplifying demand for advanced, scalable, and energy-efficient solutions.

Growing environmental consciousness

Public awareness around environmental conservation, pollution control, and sustainable practices is rising at an unprecedented pace. This societal shift is translating into stronger regulatory frameworks, higher adoption rates of eco-friendly technologies, and greater willingness to invest in sustainable infrastructure. This expands our addressable market.

Technological advancements and scaling opportunities

Breakthroughs in environmental monitoring, data analytics, and remediation technologies are redefining operational efficiency, cost optimisation, and performance transparency across the water and waste management value chain. Smart water platforms, IoT-enabled real-time monitoring, and AI-driven predictive analytics are enabling utilities and industries to transition from reactive maintenance to proactive optimisation, improving asset longevity, reducing downtime, efficiency gains, and maximising RoI.

4

Threats

Macro-economic volatility and geopolitical uncertainty

Global trade tensions, fluctuating energy prices, rising interest rates, economic downturns, and volatile currency movements inject unpredictability into funding for environmental infrastructure and large-scale project execution, particularly for cross-border EPC and BOOT contracts. Geopolitical flashpoints and shifting alliances can trigger delays in supply chains, restrict the flow of capital, and heighten risk premiums.

Intensifying regulatory demands and competitive pressures

The environmental engineering sector faces stricter pollution norms, effluent discharge limits, ESG mandates, and compliance requirements, driving continual investment in technology, process and certification upgrade. Intensifying competition from large global and state-backed players with deep capital and networks further pressures margins and delivery timelines.

Climate extremes and technological vulnerabilities

With infrastructure assets spread across varied geographies, exposure to climate-related disruptions, such as floods, droughts, cyclones, and heat waves, is rising. Such events can delay project timelines, damage assets, and increase remediation costs. Also, the adoption of advanced IoT, automation, and smart systems introduces cyber vulnerabilities that can compromise operational continuity.

Reputation management and stakeholder trust

In a sector where environmental credibility is paramount, even isolated incidents, such as project underperformance, safety lapses, or environmental non-compliance, can significantly damage public perception and client trust. Such reputational risks can influence regulatory approvals, investor sentiment, and the ability to secure future contracts.

Summary

Felix Industries is strategically positioned to harness its strengths in innovation, operational excellence, and integrated environmental solutions to capture significant growth in the expanding global water and waste wastewater as well as solid waste management markets. While challenges such as project complexity, competitive intensity, and macroeconomic volatility persist, we are equipped to navigate them through robust governance, technology-led agility, and diversified business models. With a global addressable market exceeding USD 600 billion and strong momentum in sustainability-driven demand, we remain committed to creating enduring value for shareholders, advancing community well-being, and contributing meaningfully to a regenerative, circular economy.

Company overview

Felix Industries Limited is a leading environmental engineering company committed to delivering end-to-end solutions across the water, wastewater, solid waste, and hydrocarbon management spectrum. Established with a vision to drive sustainable industrial transformation, we operate at the intersection of circular economy principles and technological innovation. Our comprehensive service portfolio spans Effluent and Sewage Treatment Plants, Zero Liquid Discharge systems, Solid Waste, and Hydrocarbon Re-refining. With operations in India and Oman, state-of-the-art manufacturing facilities, and a growing portfolio of over 100+ completed projects, we serve clients across diverse industries including textiles, pharmaceuticals, oil & gas, food processing, and infrastructure.

At Felix, we are guided by a Zero-Waste Philosophy and driven by a mission to reclaim resources, reduce environmental impact, and restore ecological balance. We operate through a multi-model execution framework, including EPC, BOOT, BOT, O&M, and PPP, enabling tailored, scalable solutions for complex environmental challenges. Our in-house innovation in products like RoSoft and Aiwasun, coupled with our expertise in brine concentration, sludge recovery, and smart monitoring systems, positions us as a trusted partner for industries and municipalities alike. As we continue to expand our global footprint and invest in future-ready infrastructure, Felix remains firmly focused on delivering purpose-driven growth and long-term stakeholder value.

Financial highlights

On consolidated basis, Felix Industries Limited reported a strong financial performance in FY25, highlighted by robust operational execution and growing demand across its core verticals. Revenue from operations increased to C3,682.2 lakh, compared to C3,390.5 lakh in FY24, reflecting steady project inflows and timely execution. Total revenue, including other income, rose significantly from C3,578.7 lakh in the previous year to C4,234.5 lakh in FY25, driven by a sharp rise in other income to C552.3 lakh. Operating profitability improved notably, with EBITDA nearly doubling to C1,378.8 lakh from C752.0 lakh in FY24, reflecting better cost management, capacity utilisation, and project efficiencies

Profit Before Tax (PBT) for the year stood at C1,199.5 lakh, up from C656.6 lakh in FY24, while Profit After Tax (PAT) grew to C911.3 lakh compared to C501.0 lakh in the previous year, marking a significant year-on-year improvement. Earnings per share (EPS) rose from C5.77 in FY24 to C6.87 in FY25, indicating enhanced value creation for shareholders. The Company maintained a disciplined cost structure, with total expenses marginally increasing to C2,855.6 lakh from C2,826.7 lakh, despite business expansion. Overall, the FY25 reflect a year of operational excellence and financial consolidation, strengthening Felixs readiness for its next phase of sustainable and strategic growth.

Risks and risk-mitigation

Felix Industries operates in an evolving regulatory and environmental landscape, where risks are inherent to the nature of our operations and markets. One of the key concerns lies in the tightening of environmental compliance norms and evolving policies both in India and international geographies. While these regulations create long-term opportunities for growth, they can also pose short-term operational and financial risks if project timelines are affected or if compliance costs escalate unexpectedly. Additionally, project-based revenue models, especially in EPC and PPP formats, may expose the Company to execution delays, cost overruns, and working capital pressures. The Company also faces potential risks related to geopolitical developments, fluctuations in energy and input costs, and currency volatility, particularly in our growing overseas operations.

Technology disruption, climate unpredictability, and dependence on government-driven infrastructure spending are also material areas of concern. While we continue to invest in R&D and diversify our offerings, the pace of innovation in smart environmental technologies and the potential entry of global players could intensify competitive pressures. Also, water availability and waste generation trends are closely linked to macroeconomic cycles, industrial activity, and urban growth, making our business somewhat sensitive to broader economic volatility. To mitigate these risks, we maintain a diversified business model, implement stringent risk management practices, and closely monitor policy shifts to remain agile and compliant. Strengthening internal systems, digitalisation, and deepening client relationships remain central to our strategy for navigating risks while continuing to deliver long-term value.

Material developments in Human Resources

At Felix Industries, we believe that our people are the driving force behind our results for purpose-led growth and engineering excellence. During FY25, we focused on strengthening our human capital by aligning talent development with our expanding business needs across water, waste, hydrocarbon, and clean energy verticals. As we scaled our operations domestically and internationally, including full-scale commissioning of our Oman subsidiary, we invested in recruiting skilled professionals in engineering, project execution, research, and field operations. Emphasis was placed on building cross-functional capabilities, especially in emerging domains such as smart water technologies, green hydrogen, and sustainability consulting.

We also undertook structured training and upskilling initiatives to enhance technical proficiency, safety awareness, and process optimisation. Our HR framework continued to evolve with the integration of performance-driven culture, transparent appraisal systems, and stronger employee engagement practices. Diversity, inclusion, and well-being remained core priorities, with specific focus on fostering a collaborative and innovation-led work environment. As we move forward, we remain committed to nurturing talent, building future-ready leadership, and aligning workforce strategies with our long-term vision of delivering sustainable environmental solutions globally.

As of March 31^st, 2025, we have 226 permanent employees at Felix and its subsidiaries.

Internal control

systems and their adequacy

Felix Industries has implemented a robust and comprehensive internal control system designed to safeguard assets, ensure operational efficiency, and support compliance with applicable laws, regulations, and internal policies.ear. These systems are embedded across our operational and financial processes and are regularly reviewed and updated to address evolving business needs and risk exposures. Our internal controls cover all critical functions, including project execution, procurement, finance, inventory, compliance, and governance, ensuring transparency and accountability at every level of the organisation.

The adequacy and effectiveness of the internal control framework are periodically assessed by the Audit Committee and the Board through internal audits conducted by independent professionals. During FY25, the Company further strengthened its internal audit mechanisms to support its expanding operations across geographies and verticals. Specific attention was given to improving risk identification, statutory compliance, and cost controls within project execution cycles. No material weaknesses or significant control failures were reported during the year. Felix remains committed to maintaining strong internal governance and control systems to support sustainable growth and stakeholder trust in an increasingly complex business environment.

Key financial ratios

Particulars	FY25	FY24	% Change
Current Ratio (times) (a)	2.86	8.45	(66.14%)
Debt-Equity Ratio (times) (b)	0.41	0.21	(94.54%)
Debt Service Coverage Ratio (times) (c)	0.89	1.92	(53.65%)
Return on Equity Ratio (%)	9.85%	9.29%	6.06%
Inventory Turnover Ratio (times) (d)	1.74	2.89	(39.79%)
Trade Receivables Turnover Ratio (times) (e)	2.10	3.00	(29.85%)
Trade Payables Turnover Ratio (times) (f)	4.17	7.77	(46.34%)
Net Capital Turnover Ratio (times) (g)	0.66	0.91	(28.03%)
Net Profit Ratio (%) (h) 24.50% 13.02%			88.16%
Return on Capital Employed (%)	9.49%	8.04%	18.09%
Return on Investments (%)	9.85%	9.29%	6.06%

(a) On Account of substantial realization from Fixed Deposits held margin, working capital limits availed during the year, increase in outstanding balance of sundry creditors goods, expenses and capital goods as well as increase in advances received from customers pending supply or provision of services during the current financial year compared to the precedingfinancial (b) Resulted from increase in current liabilities, short-term and long-term borrowings during the current financial year.

(c) Though profit margins improved during the current financial year the increase in short-term and long-term borrowings has decreasing effect on the debt service ratio. (d) Resulting from Higher Average Inventory holding during the current financial compared to the preceding financial year on account (e) On Account of higher average trade receivable outstanding balance for the current financial yearcomparedtotheprecedingfinancial (f) On Account of higher average trade payable outstanding balance vis-a-vis purchases made ear. y inthecurrentfinancialyearcomparedtotheprecedingfinancial (g) Resulting from higher deployment of funds in short term loans and advances and other current assets vis-a-vis improvement in operational activities during the current year compared to the preceding year having reducing effect on net capital turnover ratio. (h) Availability of funds, better resources management, innovations in operational activities, execution of margin-oriented projects and further built-up on operational efficiencies resulted into improvement in turnover and cost management having positive impact on net profitability.

Disclaimer

The Management Discussion and Analysis (MDA) section may contain certain forward-looking statements, which reflect the Companys current views, assumptions, and expectations with respect to future events and financial performance. These statements are based on information available at the time of preparation of this report and are subject to risks, uncertainties, and changes in external conditions that may cause actual results to differ materially from those expressed or implied. Factors such as economic developments, regulatory changes, market conditions, technological shifts, and other unforeseeable events may affect the Companys operations and performance.

The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are advised not to place undue reliance on these statements and to exercise their own judgment in assessing the risks and opportunities associated with the Company. This MDA should be read in conjunction with the audited financial statements and the notes thereto, which form an integral part of this Annual Report.