Ganga Bath Fittings Ltd Management Discussions

GLOBAL ECONOMIC REVIEW

Overview: Global economic growth declined marginally from 3.3% in 2023 to an estimated 3.2% in 2024. This was marked by a slowdown in global manufacturing, particularly in Europe and parts of Asia coupled with supply chain disruption and weak consumer sentiment. In contrast, the services sector performed more creditably. The growth in advanced economies remained steady at 1.7% from 2023 to 2024 as the emerging cum developing economies witnessed a growth decline at 4.2% in 2024 (4.4% in 2023).

On the positive side, global inflation was expected to decline from 6.1% in 2023 to 4.5% in 2024 (projected at 3.5% and 3.2% in 2025 and 2026 respectively). This decline was attributed to the declining impact of erstwhile economic shocks, and labour supply improvements. The monetary policies announced by governments the world over helped keep inflation in check as well.

The end of the calendar year was marked by the return of Donald Trump as the new US President. The new US government threatened to impose tariffs on countries exporting to the US unless those countries lowered tariffs for the US to export to their countries. This enhanced global trade and markets uncertainty and emerged as the largest singular uncertainty in 2025.

Outlook: The global economy has entered a period of uncertainty following the imposition of tariffs of products imported into the USA and some countries announcing reciprocal tariffs on US exports to their countries. This is likely to stagger global economic growth, the full outcome of which cannot be currently estimated. This risk is supplemented by risks related to conflicts, geopolitical tensions, trade restrictions and climate risks.

Overall, while growth and trade are set to soften in 2025-26, coordinated multilateral efforts and targeted structural reforms, particularly in supply chain diversification, digital infrastructure and sustainable energy, will be essential to navigate escalating trade barriers, preserve financial stability and lay the groundwork for a more inclusive global recovery.

India sustained robust growth of 6.5%, the fastest among major economies, powered by strong domestic consumption and a resilient services sector. Inflation remained close to the Reserve Bank of Indias 4% target band. Retail inflation fell to a five-year low of 3.34% in March 2025, allowing the RBI to adopt a growth-supportive monetary stance with consecutive repo rate cuts to 6.00%.

Despite global headwinds, including elevated geopolitical tensions and supply chain disruptions, Indias solid macro fundamentals and above-normal monsoon forecasts supported resilience in agriculture and rural demand. However, consumer sentiment remained muted due to elevated inflation concerns and lingering job market anxieties. This cautious consumer mood had a notable impact on certain consumer-facing segments.

A booming services industry, contributing over 55% of GDP, remained a consistent engine of growth alongside emerging manufacturing clusters fostered by the Make in India initiative. Financial inclusion expanded markedly through digital payment networks and a growing fintech ecosystem, while infrastructure investments, ranging from roads and railways under the National Infrastructure Pipeline to urban renewal via Smart Cities projects, have boosted productivity and employment.

The sanitaryware market size was estimated at USD 57.28 billion in 2025 (projected to reach USD 79.93 billion by 2030, at a CAGR of 6.89% during the period between 2025 and 2030).

The sanitaryware industry is experiencing a significant transformation driven by rapid urbanization and changing consumer preferences. Global urbanization indicates marked regional variations, with North America leading at 82%, followed by Latin America at 79%, while Asia stands at 52%, creating diverse opportunities. The industry is witnessing a shift towards sustainable development, with manufacturers increasingly focusing on water- efficient bathroom products and eco-friendly manufacturing processes.

The increasing income levels of consumers in developing countries are driving a significant rise in demand for highquality sanitaryware products. Between 2020 and 2030, there is expected to be an annual increase of 112 million consumers and $2.4 trillion in spending, reflecting a rise in purchasing power per individual. This trend presents a significant opportunity for the sanitaryware industry, as both the growing consumer base and their enhanced purchasing capacity create a favourable environment for the demand for premium, innovative products. The global sanitaryware market is expected to be driven by growth factors a rising demand for real estate, booming tourism sector, urbanisation, increasing income levels and enhanced living standards among others. (Source: Mordor Intelligence, GII Global information, Brookings).

The Indian sanitaryware sector is estimated to reach a market size of $948.5 million by 2025, growing at a CAGR of 7.9% from 2024 to 2029.

The rise in disposable income and shifting lifestyles boosted the demand in Indian sanitaryware industry. Consumers are investing in premium, eco-friendly products, with a focus on water conservation and space-saving designs. The increasing focus on sanitation and hygiene has enhanced demand for lifestyle products such as private spas, saunas and larger showers. There are mostly two types of companies that manufacture sanitaryware in India. One of them is organized companies whereas the other one is unorganised companies. Organized companies address premium market segments on the other hand unorganised companies primarily serve the masses. Around 60% of the market is ruled by organized companies whereas the unorganized industry contributes to less than 40% of the market. India is emerging as one of the popular manufacturing hubs for this industry owing to lower labour costs and availability of raw materials. This has led many MNCs to set up their manufacturing facilities in India.

With 600 million Indians,? 40% of the population expected to live in urban areas by 2030, India is experiencing one of the fastest urbanization rates globally. India is experiencing a profound shift towards urban living, with millions of people moving to cities and towns in search of better opportunities. This urbanization has spurred the construction of residential and commercial properties, leading to increased demand for modern and aesthetically pleasing sanitaryware products. The Indian real estate sector is projected to reach a market size of US$ 1 trillion by 2030, up from US$ 200 billion in 2021, and is expected to contribute 13% to the countrys GDP by 2025. This booming sector, which includes both residential and commercial construction, has been a key driver of the sanitaryware market. Developers and builders are increasingly focused on incorporating high-quality bathroom fittings to attract potential buyers and tenants, further fuelling demand for premium sanitaryware products.

Rising disposable incomes: Indias per capita disposable income rose from US$ 2.11 thousand in 2019 to US$ 2.54 thousand in 2023 and is projected to reach US$ 4.34 thousand by 2029. Consumers prioritize design, aesthetics, and functionality when selecting bathroom fixtures. This trend is driving the demand for modern, designer ceramic sanitaryware products such as water-saving toilets, elegant washbasins and innovative shower panels.

High population growth: As of February 2025, Indias population stood at 145,918.84 lakhs, up from 145,093.58 lakhs in 2024. With the global population continuing to rise, there is an increasing demand for new housing units, schools, hospitals, and other public facilities, which in turn drives the need for sanitaryware products such as toilets, sinks, and bathtubs. This growth is especially noticeable in urban areas housing 37.1% of the population, where the influx of people is leading to a greater focus on modernizing and upgrading existing infrastructure. As a result, the demand for innovative, high-quality sanitaryware products is rising to meet the needs of rapidly expanding urban populations.

Growing technological advancements: In recent years, technological advancements have introduced smart features, such as sensor-activated faucets and self-cleaning toilets, which enhance user convenience and hygiene. These advancements improve functionality and efficiency of sanitaryware products and offer a modern, hightech aesthetic that attracts a broader consumer base. As technology continues to evolve, it propels the development of more sophisticated and sustainable sanitaryware solutions, fostering marketgrowth.

Growing demand for green and sustainable products: Rising consumer awareness about the environmental impact of products has driven demand for eco-friendly sanitaryware. Consumers are increasingly opting for sanitaryware products made from sustainable materials with low water consumption. This shift has prompted the development of innovative and environmentally conscious products within the industry.

Growing demand for wellness: In 2023, the Indian spa market generated $1,691.2 million in revenue. India accounted for 5.5% of the Asia-Pacific spa market. With wellness becoming a central focus in home design, consumers are increasingly looking to transform their bathrooms into personal spa retreats. This is expected to boost the demand for high-end, stylish sanitaryware products such as designer bathtubs, wellness-focused shower systems and hydrotherapy solutions that offer a luxurious and relaxing experience.

Economic risk: A slowdown in economic growth could impact the Companys cash flows and profitability.

Mitigation: India is projected to remain the worlds fastestgrowing economy, with a steady growth rate of 6.7% in FY26 and FY27, significantly outpacing the global growth rate of 2.7% in 2025-26.

Regulatory risk: Stricter environmental regulations may require substantial investments in new technologies or limit operational capacity.

Mitigation: The Companys strong compliance framework, strategic investments, and employee training initiatives have led to a reduced carbon footprint and reinforced its reputation as a responsible corporate entity.

Competition risk: Intensifying market competition could impact the Companys market position.

Mitigation: Increased investments in brand development, marketing, distribution, and digital transformation have enhanced the Companys market responsiveness and competitive edge.

Fraud risk: Weak internal controls could expose the Company to fraudulent activities. Mitigation: The Company has implemented stringent checks and controls, including a centralized payment system, dual authorization, and enhanced financial oversight, to prevent fraud and malpractices.

Inflation risk: Rising inflation that cannot be fully passed on to consumers could impact profitability.

Mitigation: The Company will continue to optimize economies of scale, cost management, and logistics efficiencies to maintain its competitive position.

The company places paramount importance on establishing and maintaining a robust system of internal controls, designed to safeguard its assets, ensure accuracy and reliability in financial reporting, and promote operational efficiency. Given the complexities inherent in the financial services industry, especially in the domains of broking, commodity trading, and margin lending, these controls are critical to mitigating risks and complying with the stringent regulatory framework.

The internal control framework is structured around comprehensive policies and procedures that cover all key operational areas including trade execution, client onboarding, margin financing, settlements, risk management, and compliance monitoring. These controls are periodically reviewed and updated to keep pace with regulatory changes, emerging risks, and evolving business needs.

The company has implemented automated systems and software applications that facilitate real-time monitoring of transactions, margin requirements, and exposure limits, thereby enabling swift identification of anomalies and prompt corrective actions. These technological solutions are complemented by well-defined authorization protocols, segregation of duties, and physical safeguards, which collectively enhance the integrity and security of the companys operations.

An independent internal audit function plays a vital role in periodically assessing the effectiveness of internal controls. The internal audit team conducts regular audits across various departments and functions, evaluates compliance with internal policies and regulatory requirements, and recommends improvements wherever necessary. Audit findings are reviewed by the Audit Committee of the Board, which oversees the implementation of corrective measures and ensures accountability at all levels.

In addition, the company invests significantly in training and capacity building to ensure that employees at all levels are aware of internal control policies and best practices. Continuous education and awareness programs are conducted to foster a culture of compliance and risk awareness, which is essential in a rapidly changing regulatory and business environment.

Overall, the internal control systems in place are deemed adequate and effective for the companys current scale and complexity of operations. The management remains committed to continuously strengthening these controls to enhance operational resilience, protect stakeholder interests, and uphold the highest standards of governance and transparency.

The company acknowledges that its greatest asset is its people. During the financial year 2024-25, the company continued to focus on building a skilled, motivated, and agile workforce capable of meeting the evolving demands of the industry. Efforts were made to foster a collaborative and inclusive work environment that encourages innovation, accountability, and professional growth. Regular training programs, workshops, and certification courses were organized to enhance employees technical expertise, regulatory awareness, and soft skills, enabling them to stay ahead in a highly regulated and technology- driven environment.

Talent acquisition remained aligned with the companys strategic objectives, focusing on bringing in specialists with expertise in risk management, compliance, technology, and client relationship management. The company also prioritizes internal talent development, promoting meritocracy and providing clear career progression pathways to nurture leadership from within.

Employee engagement initiatives were undertaken to strengthen organizational culture, enhance job satisfaction, and promote well-being. Transparent communication, recognition programs, and feedback mechanisms have been institutionalized to create an environment where employees feel valued and motivated to contribute their best.

The management expresses its sincere appreciation for the dedication and professionalism demonstrated by all employees, whose collective efforts underpin the companys success and growth.

Statements in this Report, describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be different from those expressed or implied since the Companys operations are affected by many external and internal factors, which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.