Innovators Facade Systems Ltd Management Discussions

Indias economy in FY 2024-25 experienced a transition from the exceptional rebound of the prior year to a phase of stabilized, steady expansion with a GDP growth rate of 6.5%. This growth was sustained by strong domestic consumption, a reliable agricultural performance, and dynamic activity in the services sector. Construction and infrastructure developments provided tangible momentum, while manufacturing and exports regained moderate traction amid improvement in global trade conditions. Inflation remained within a comfortable range, allowing the central bank to ease monetary policy - a signal of confidence in the underlying resilience of the economy. Public and private investment flowed into key areas such as infrastructure, housing, and digital initiatives, underscoring a balanced and enduring growth trajectory built on internal drivers rather than external stimuli.

The governments long-term vision aims to make India a $5 trillion economy with a focus on Infrastructure development, Digital transformation, Innovation and R&D. This aims to promote economic growth, improve ease of doing business, and increase foreign investment, aligning with the governments long-term vision for a robust and inclusive economy.

The global facade market is expected to reach USD 315.11 billion by 2029, growing at a CAGR of 5% during the forecast period. North America is the fastest-growing market, while the Asia-Pacific region holds the largest market share. India is part of the Asia-Pacific region, which is experiencing significant growth in construction projects, with a focus on external wall beautification and energy efficiency. Rapid urbanization in India is driving demand for facade installations. India, along with Japan, is actively adopting facade greening techniques to reach sustainability targets. The green office concept is promoting facade greening technology in India.

The Indian facade market is projected to reach around USD 5.58 billion by 2033. This growth projection is supported by the increasing demand for modern and sustainable building solutions. The compound annual growth rate (CAGR) is estimated to be 6.9% between 2025 to 2033. This significant projected growth rate reflects the rising investments in infrastructure and real estate, alongside technological advancements in building materials and design

Rapid urbanization in India is a major driver, with cities expanding and new urban canters being developed. This leads to a higher demand for residential, commercial, and industrial buildings, which in turn fuels the facade market. Large-scale infrastructure projects, including airports, metro systems, and smart cities, are increasing the need for advanced facade solutions.

There is a growing emphasis on sustainable construction practices. Facades play a crucial role in improving a buildings energy efficiency by providing insulation, reducing heat gain, and allowing for natural light. Government incentives for green buildings, such as tax benefits and faster project approvals, encourage the adoption of energy-efficient facades. This aligns with Indias broader goals of reducing carbon emissions and promoting sustainable development.

The architecture and construction industries are also carrying out major R & D operations to develop sustainable and eco-friendly fapades which absorb solar energy, creating a new source of energy generation in residential and commercial buildings. These eco-friendly fapades are expected to drive the fapade market in the coming years as they are seeing increased demand from prospective consumers.

The facade market is experiencing a notable shift influenced by technological advancements and sustainability trends. Pricing dynamics are being reshaped by innovations in materials, such as high-performance glass and energy- efficient cladding solutions. These materials, while initially more expensive, offer long-term cost savings through energy efficiency and reduced maintenance, appealing to environmentally conscious consumers and developers. The market is also witnessing increased demand in urban areas where energy regulations are stringent, driving the adoption of sustainable facade solutions. Innovations in materials, technologies, and design will play a crucial role in meeting these demands, while regulatory support and market incentives will further accelerate adoption.

Innovators Fapade Systems Limited is a distinguished leader in the facade industry, specializing in the comprehensive design, engineering, fabrication, and installation of different types facade systems. With over 25 years of operational excellence, the company has solidified its reputation as a pioneer known for delivering innovative and technically demanding facade solutions across diverse projects. The companys projects serve as benchmarks of excellence, integrating advanced materials and design principles to enhance building aesthetics and performance.

A. Revenue from Operations During FY 2024-25, the Company has recorded total revenue of T 22,13735 lakhs from its fagade business as compared to revenue of T 21,510.91 lakhs in previous financial year.

B. EBITDA EBITDA (Standalone) for the current financial year has increased to T 3,556.35 lakhs from T 3,193.49 lakhs in previous financial year. EBITDA as a % of Revenue has shown a growth from 14.85% to 16.06%. Consolidated EBITDA in current financial year has increased to T 3,579.58 lakhs from T 3,204.57 lakhs in previous financial year.

C. Net Margin / Profit After Tax Profit after Tax (Standalone) has increased to T 1,577.91 lakhs in FY 2024-25 as compared to T 1,516.58 lakhs in previous financial year. Net Margin Ratio (Net profit after tax to turnover) in FY 2024-25 is 7.13% against 7.05% in FY 2023-24. Consolidated Profit after Tax in current financial year has increased to T 1,601.14 lakhs from T 1,526.44 lakhs in previous financial year.

D. Debtors Turnover Debtors to Turnover Ratio in FY 2024-25 is 4.05 times against 5.84 times in FY 202324.

E. Return on Net Worth Return on Net Worth in FY 202425 is 11.04 % against 11.93 % in FY 2023-24

As a part of continuous expansion and upgradation plan of the management, the Company has spent T 648.01 lakhs towards capital expenditure during the current financial year.

During the year the Company has procured various Plant & Machineries and equipment to facilitate the increased production requirements and to cater future demands.

The Company is mainly engaged in the business of "design, engineering, fabrication, supply and installation of facade systems". The overall performance of the Company is sum

of all the project under execution. Each Project is executed as a Work Contract over a period of project duration. All projects varies in terms of their nature, period, and their profitability. Hence, as such there are no separate segment-wise or product-wise performance.

The exercise for evaluating the potential risks for the organization is closely monitored by the Management. All the identified risks have been classified with respect to their seriousness and probabilities of such risks getting materialized have also been ascertained. In formulating corporate strategies, these risks are duly considered and counter measures are adopted.

Fagade industry is capital intensive industry in nature with gestation period that varies from project to project. Due to high dependency of the industry on the real estate sector, there are certain inherent risks in both the internal as well as external environment. Company monitors the external environment & manages the internal environment to mitigate the risks.

System of Internal Controls adopted by management team ensures that all the assets are safeguarded from the loss, damage or disposition. Also, the Audit Committee monitors financial statement to ensure that the transactions are adequately authorized and recorded, and that they are reported correctly.

Management Team available especially for the Companys designing, production and installation activities is highly skilled and experienced, that at every stage from availability of quality of raw materials till the outcome of production, they provide their expertise to such an extent that the Companys products have achieved their due importance in the market and consistently maintained superior quality.

Your company gives utmost importance to Human Resource. It considers Human Resource as Human Capital and believes in development of Human Resource. Over the years, your company has developed an environment, which fosters excellence in performance by empowering its people, who are always on continuous improvement path with an ultimate aim to add value to their intellectual and knowledge resources. The key focus is to attract, retain and develop talent as a resource through rewards mechanism, performance evaluation and harmonious & constructive working climate. As on March 31, 2025 the Company had 329 permanent employees on the payroll.

Statements in this report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement because of many factors like economic condition, availability of labour, price conditions, domestic and international market, changes in Government policies, tax regime, etc. The Company assumes no responsibility to publicly amend, modify or revise any statement on basis of any development, information and event.