Integrated Thermoplastics Ltd Management Discussions

Industry Structure and Developments

The Indian plastic and polymer industry has been evolving rapidly, supported by growth in end- user industries such as packaging, automotive, infrastructure, construction, agriculture, and consumer durables. Thermoplastics, owing to their versatility, recyclability, and cost-effectiveness, continue to dominate the market.

The year under review witnessed mixed trends. While demand from packaging and FMCG remained steady, infrastructure and automotive-related consumption was subdued due to inflationary pressures and global slowdown concerns. The volatility in crude oil prices, which directly impacts polymer prices, created challenges in raw material sourcing and inventory management.

At the same time, increasing global emphasis on sustainable and eco-friendly materials is reshaping the thermoplastics sector. Regulatory initiatives, both domestic and international, are nudging the industry towards adoption of biodegradable and recyclable alternatives. Companies in this space are now required to balance compliance with cost competitiveness, which calls for innovation and operational agility.

Opportunities and Threats:

OPPORTUNITIES:

Growing demand: Expanding applications of thermoplastics in packaging, medical devices, automotive components, and construction sectors.

• Government focus on manufacturing: Initiatives such as “Make in India” and production-linked incentive (PLI) schemes are expected to stimulate demand.

• Export potential: Scope for supplying value-added products to emerging global markets.

• Sustainability shift: Development of eco-friendly thermoplastic alternatives can open new business avenues.

THREATS:

Raw material volatility: Prices of polymers are closely linked to crude oil, leading to unpredictable input costs.

• Intense competition: Both organized players and small-scale manufacturers exert pressure on margins.

• Environmental regulations: Compliance with bans and restrictions on single-use plastics may affect product mix.

• Liquidity stress: Rising working capital requirements due to delayed receivables may strain cash flows.

Segment-Wise and Product-Wise Performance :

The Company operates primarily in a single segment - manufacturing and trading of thermoplastics and allied products. Revenue from operations improved significantly to ^6.50 crore during FY 2024-25, as compared to ^3.63 crore in Fy 2023-24, reflecting increased customer orders and better demand realization.

However, the cost of materials consumed, employee expenses, finance charges, and other operating costs weighed heavily on margins. As a result, despite higher revenue, the Company continued to incur net losses.

Financial Performance vis-a-vis Operational Performance :

• Revenue from Operations: ^6.50 crore in FY 2025 vs. ^3.63 crore in FY 2024 (growth of 79%).

• Total Income: ^6.55 crore in FY 2025 vs. ^3.68 crore in FY 2024.

• Total Expenses: ^12.47 crore in FY 2025 vs. ^13.55 crore in FY 2024.

• Loss Before Tax: ^5.92 crore in FY 2025 vs. ^9.87 crore in FY 2024.

• Loss After Tax: ^6.06 crore in FY 2025 vs. ^10.03 crore in FY 2024.

• Net Worth: Negative ^58.66 crore in FY 2025 vs. Negative ^52.60 crore in FY 2024.

The improvement in revenues and reduction in losses indicate early signs of stabilization. However, the continuing negative net worth highlights the need for strategic financial restructuring, cost control, and operational efficiencies.

Outlook :

The outlook for the thermoplastics industry remains positive in the medium to long term, given its extensive applications and demand drivers across sectors. For the Company, the near-term challenges lie in managing liquidity, optimizing costs, and regaining profitability. The management is focused on:

1. Strengthening the customer base through targeted marketing and relationship management.

2. Exploring opportunities in new product lines and value-added thermoplastic solutions.

3. Improving cost efficiency through better procurement and process optimization.

4. Evaluating restructuring measures to improve the financial position of the Company.

If executed effectively, these initiatives will position the Company to leverage the anticipated demand growth in the industry.

Risks and Concerns

1. Financial Risk: Negative net worth and high borrowings may impact long-term sustainability.

2. Operational Risk: Dependence on a limited product segment exposes the Company to market fluctuations.

3. Market Risk: Demand variability in user industries could impact volumes.

4. Regulatory Risk: Stringent environmental norms on plastics may necessitate significant product redesign.

5. Credit Risk: High receivable balances may expose the Company to liquidity crunch.

Internal Control Systems and Their Adequacy

The Company has established adequate internal control systems commensurate with its size and operations. The Management believes in conducting periodic reviews to ensure compliance with internal policies, statutory requirements, and risk management procedures. These controls are designed to safeguard assets, ensure accurate financial reporting, and enhance operational efficiency.

The Audit Committee of the Board regularly monitors the adequacy and effectiveness of internal controls and provides guidance for strengthening them further.

Human Resources and Industrial Relations

The Company regards human capital as its most valuable asset. A culture of teamwork, transparency, and continuous improvement is fostered across the organization. Efforts are made to provide skill development, training, and career growth opportunities.

During FY 2024-25, the industrial relations environment remained cordial. The Company had 95 permanent employees on its rolls as of March 31, 2025, and continues to focus on enhancing employee productivity and engagement.

Key Financial Ratios (Standalone):

Particulars	FY 2024-25	FY 2023-24	Change (%)	Remarks
Debtors Turnover	3.12	1.54	T 102%	Improvement due to higher sales
Inventory Turnover	3.22	1.72	T 87%	Efficient inventory management
Interest Coverage Ratio	Negative	Negative	-	Continued losses
Current Ratio	0.19	0.16	T 18%	Still below ideal 1.0
Debt-Equity Ratio	Negative	Negative	-	Negative net worth
Operating Profit Margin (%)	(90.3%)	(267.8%)	T	Losses reduced, but margins negative
Net Profit Margin (%)	(92.5%)	(272.4%)	T	Improved but still negative
Return on Net Worth (%)	Negative	Negative	-	Due to negative net worth

Conclusion and Way Forward:

During FY 2024-25, the Company demonstrated a meaningful improvement in its operating performance, with revenues nearly doubling and net losses narrowing compared to the previous year. This reflects progress in demand generation, operational execution, and early signs of stabilization despite ongoing challenges of negative net worth, high borrowings, and margin pressures.

The industry outlook remains supportive in the medium to long term, driven by expanding applications of thermoplastics, regulatory push for sustainable alternatives, and government- led manufacturing initiatives. However, risks from raw material price volatility, tightening environmental regulations, and liquidity stress continue to weigh on near-term performance.

Management is committed to pursuing a dual strategy of strengthening revenues through product diversification and market expansion, while simultaneously driving cost optimization and exploring restructuring opportunities. With disciplined execution and proactive risk management, the Company aims to gradually restore financial health and position itself to capture the long-term growth potential of the Indian plastic and polymer industry.