India Cements Capital Ltd Management Discussions

OVERVIEW OF THE ECONOMY

The global economy in 2025 is navigating a complex landscape marked by cautious optimism, persistent uncertainty, and transformative shifts. According to the latest projections from the International Monetary Fund (IMF) and other leading institutions, global GDP growth is expected to reach 3.0%, signaling modest recovery amid geopolitical tensions, inflationary pressures, and evolving trade dynamics. Global inflation is expected to ease to 4.2% in 2025 and further to 3.6% in 2026. However, inflation in advanced economies, particularly the U.S., may remain above central bank targets, complicating interest rate decisions and financial stability.

INDIAN ECONOMIC OUTLOOK

Indias economy is projected to grow steadily in FY 2025-26, with the Reserve Bank of India retaining its GDP growth forecast at 6.5%, supported by robust rural demand, strong government capital expenditure, and a buoyant services sector. The Union Budget 2025-26 emphasizes inclusive development through four engines·agriculture, MSMEs, investment, and exports·with major allocations for infrastructure, education, and healthcare. Private consumption and fixed investment remain key growth drivers, while inflation is expected to stay moderate at around 3.1%, creating room for monetary easing. Despite global uncertainties and trade tensions, India is well-positioned to maintain its lead among fast-growing economies, thanks to resilient capital markets, a digitally skilled workforce, and expanding trade partnerships.

INDUSTRY OVERVIEW GLOBAL TRAVEL INDUSTRY

The global travel industry in 2025 is poised for strong growth, with annual expansion rates projected between 6-9%, driven by rising international demand, digital innovation, and a renewed focus on sustainability. Travelers are increasingly seeking eco-friendly options, personalized experiences, and off-the-beaten-path destinations, reflecting a shift toward meaningful and responsible tourism. Business travel spending is expected to hit a record $1.57 trillion, despite economic headwinds like trade tensions and policy uncertainty. AI is transforming the sector·from predictive maintenance and customer service to personalized trip planning and dynamic pricing models. Major hubs like the U.S., India, and the U.K. continue to lead in travel innovation, supported by robust investment and a thriving startup ecosystem. As consumer preferences evolve and technology reshapes experiences, the travel industry remains a resilient, high-growth sector in a world of muted global expansion.

INDIAN TRAVEL INDUSTRY

Indias travel industry is entering a transformative phase in FY 2025-26, with both domestic and outbound tourism expected to surge. The government has allocated 2,541 crores to boost tourism infrastructure, skill development, and travel facilitation, aiming to make India a globally competitive tourism hub. Key initiatives include upgrading the top 50 tourist destinations, streamlining e-visa processes, and offering MUDRA loans for homestays to promote community-driven tourism. Outbound travel is also booming, with over 15 million Indians expected to travel overseas, marking a 12% increase from pre-pandemic levels. Tier II and III cities are emerging as major contributors to international travel, while business travel continues to grow, accounting for 26% of outbound trips. With rising demand for personalized, high-value experiences and improved connectivity, Indias travel sector is set to be a major driver of economic growth and cultural exchange.

COMPANY BUSINESS

Your Company is a designated Authorized Dealer (Category-II) from Reserve Bank of India, for money changing which includes buying and selling of Foreign Exchange in retail as well as wholesale to individuals and corporate clients and various permissible outward remittance activities such as remittance for overseas education, medical treatment abroad and for other permissible purposes. Your Company is also one of the Agents of overseas money transfer entities for international inbound money transfer business.

In money changing, the Company provides an array of products and services including buying and selling of foreign currency notes and outward telegraphic remittances, including outbound remittances towards student fees, tour remittances etc. and also extends to forex prepaid cards.

The Companys strength is its service, its brand image and number of allied products being made available to its valuable customers.

OPPORTUNITIES AND THREATS

The Company foresees that the Companys forex business would continue to grow Intune with global economy and growth of travel and tourism sector.

Your company has exposure in foreign exchange and any wide fluctuations in foreign exchange rates have adverse effect on the performance of the company. Further the increase in competition, low entry barriers and change in government policies may affect the operations of the company.

OPERATING AND FINANCIAL PERFORMANCE REVIEW OF PERFORMANCE FORXCHANGE

The turnover and income for the year ended 31st March, 2025 are Rs.29764.17 lakhs and Rs.387.22 lakhs respectively as against Rs.37158.85 lakhs and Rs.453.12 lakhs during the corresponding previous year. The division has earned other operating income of Rs.68.35 lakhs as against Rs.114.15 lakhs during the corresponding previous year. The Company has also earned other income of Rs.20.66 lakhs as against Rs.18.72 lakhs during the corresponding previous year. The reason for decline in volume and profit is primarily due to normalisation of post covid surge, further reduction in other operating income is on account of not carrying Tours & Travels business.

Midas Forex, the forex advisory division of the Company has earned a gross income of Rs.6.52 lakhs during the year ended 31st March, 2025 as against Rs. 6.84 lakhs of the corresponding previous year.

RISK MANAGEMENT

INTERNAL CONTROL SYSTEM

The Company has already put in place an elaborate Internal Control and Internal Audit systems. The system ensures adequate periodical checks and balances are exercised. Continuous monitoring by the Internal Audit team of these checks and balances ensures compliance of the regulatory framework of RBI & FIU. The Audit team is suitably guided and updated by the Audit Committee in its functions.

The Company has put in place a strict credit policy for extending credit to its corporate customers. The same is continuously monitored and reviewed periodically to ensure funds at Companys disposal are being judiciously utilised and efficiently managed vis-a-vis the business requirements.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The Company being part of the Banking and Financial Services sector, human resources has always been the main pillar for all the activities of the Company. Companys focus have been to improve the staffs contribution towards the various services offered thereby ensuring customer satisfaction. To achieve this objective Company has ensured that all its employees receive continuous update on the Companys policies as well as the regulatory framework.

CHANGES IN KEY FINANCIAL RATIOS

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities Laws and Regulations. Actual results may differ materially from those expressed in the statement. As in any other business the performance of the Company is totally dependent on the market conditions of demand and supply, the volatility in exchange rate, the Government policy & regulations, the economy of the country and other factors.