Kabra Extrusion Technik Ltd Management Discussions

I. Global Economy Overview

After a series of unprecedented events in recent years, global economic growth remained steady but subdued through 2024 and was expected to follow a similar pattern in 2025. According to World Economic Outlook Report - April 2025, the global growth is forecasted to decline from an estimated 3.3 percent in 2024 to 2.8 percent in 2025, before edging up to 3 percent in 2026. These downward revisions are widespread across countries and are largely driven by the direct impact of new trade policies, as well as their indirect consequences—such as disruptions through trade linkages, rising uncertainty, and weakened market sentiment.

Monetary Policy must stay proactive in addressing these multiple headwinds. With tariffs and supply chain disruptions in play, some countries may face sharper trade-offs between curbing inflation and supporting economic output. Additionally, inflation expectations could become less stable, especially with a fresh inflation shock occurring so soon after the previous one.

In advanced economies, growth under the baseline forecast is expected to decline from an estimated 1.8 percent in 2024 to 1.4 percent in 2025, with a slight uptick to 1.5 percent in 2026. This downward adjustment reflects increased policy uncertainty, rising trade tensions, and weaker-than-expected demand, particularly due to slower consumption growth. Tariffs are also anticipated to dampen growth in 2026, which is projected at 1.7 percent amid modest private spending.

For emerging market and developing economies, growth is forecast to slow to 3.7 percent in 2025 and 3.9 percent in 2026, down from an estimated 4.3 percent in 2024.

The impact of newly implemented tariffs on inflation will vary across countries, depending on several factors. These include whether the tariffs are seen as short-term or long-lasting, how much firms adjust their profit margins to absorb higher import costs, and whether the imports are priced in U.S. dollars or local currency. The consequences will also differ from country to country. For those imposing tariffs, the measures act as a supply shock, reducing efficiency and raising production costs. Meanwhile, countries targeted by tariffs face a decline in export demand, resulting in a negative demand shock that puts downward pressure on prices. In both scenarios, increased trade uncertainty introduces an additional demand shock, as businesses and consumers delay investments and spending. This effect can be intensified by tighter financial conditions and greater volatility in exchange rates.

II. INDIAN ECONOMY OVERVIEW

Amid rising global trade tensions and ongoing geopolitical instability, the Indian economy has shown strong resilience and impressive growth. According to the Second Advance Estimates from the National Statistical Office (NSO), Indias GDP is projected to grow by 6.5% in the fiscal year 2025-26.

According to the Reserve Bank of India (RBI) Policy update, the economic activity is expected to remain strong in 202526, driven by private consumption and increased fixed capital formation. Investment is likely to rise due to higher capacity utilization, improved corporate balance sheets, and government capital expenditure. While trade policy uncertainty may hinder export prospects, recent free trade agreements, particularly with the UK, are expected to boost trade. Agriculture is poised for growth, supported by a favourable monsoon forecast. The services sector is also anticipated to continue its momentum. However, ongoing geopolitical tensions and global trade and weather uncertainties present risks to growth. In 2025, the Reserve Bank of India (RBI) reduced the repo rate to 6.00% and projected GDP growth at 6.7% for the fiscal year 2025-26, indicating a positive economic outlook supported by recent fiscal measures and stable inflation. The RBI anticipates inflation will decrease to 4.2% for FY26, aligning with its target of 4%. The Monetary Policy Committee noted that easing food inflation pressures will contribute to this overall decline.

India is set to maintain its position as the worlds fastest-growing major economy over the next two fiscal years. The World Banks Global Economic Prospects report forecasts a steady growth rate of 6.7% for both FY26 and FY27, significantly outpacing both global and regional peers.

The International Monetary Funds World Economic Outlook (WEO) echoes this optimism, projecting Indias economy to expand by 6.5% in both 2025 and 2026—aligning with its previous estimates from October. This consistent outlook highlights Indias strong economic fundamentals and its ability to withstand global volatility.

To support long-term growth and elevate its global economic standing, the Indian government has introduced a number of strategic initiatives. Programs such as the PM Gati Shakti National Master Plan for infrastructure, Startup India, and the Production Linked Incentive (PLI) Scheme are transforming key sectors like manufacturing, the digital economy, and financial services. These efforts reflect the Countrys commitment to building a self-reliant, resilient, and globally competitive economy.

Crisils India Outlook also predicts a stable growth rate of 6.5% for FY26, supported by factors such as declining food inflation, tax incentives from the Union Budget 2025-2026, and lower interest rates, which are expected to enhance consumer spending. However, potential risks remain due to external factors, including the ongoing U.S. driven tariff conflicts.

Since the landmark economic reforms of 1991, India has experienced consistent improvement in its growth trajectory each decade. The country bounced back strongly from the COVID-19 downturn, averaging 8.2% annual growth between FY22 and FY25, and emerged as the worlds fourth-largest economy by surpassing Japan with a GDP of approximately USD 4.19 trillion in 2025. While growth is now returning to pre-pandemic levels as the impact of fiscal stimulus and base effects diminish, high-frequency indicators such as the Purchasing Managers Index (PMI) suggest India continues to outperform other major economies.

III. INDUSTRY OVERVIEW

1. Plastic Extrusion Machines Overview

The global plastic extrusion machine market was valued at USD 6.9 billion in 2024 and is expected to grow by 3.9% year-over-year during the period 2025-30, reaching USD 10 billion by the end of 2030. Looking ahead, demand is projected to rise steadily, reaching USD 12 billion by 2035, with a compound annual growth rate (CAGR) of 4.7% over the forecast period from 2030 to 2035.

The market is experiencing gradual expansion due to growing demand across various industries, including packaging, automotive, and construction. In response, manufacturers are broadening their product offerings to meet the rising need for high-quality plastic products.

Trends in the Plastic Extrusion Machine Market: The primary driver of market growth is the increasing demand for extruded plastic products across a variety of end-use industries, such as consumer goods, packaging, automotive, and construction. Additionally, there is a noticeable shift toward automation in plastic manufacturing, aimed at boosting efficiency and productivity, which is fueling the adoption of plastic extrusion machines. Rising awareness of the advantages of plastic extrusion—particularly for producing precise, fixed cross-section components—is also contributing to greater market demand. Furthermore, the integration of advanced technologies, including artificial intelligence (AI), into extrusion systems is further propelling market growth.

SOURCE: Plastic Extrusion Machines Market Size & Share 2024-2032 (imarcgroup.com), Plastic Extrusion Machine Market Size, Demand, Trends - 2032 (futuremarketinsights.com)

Flexible Packaging (Blown Film)

Flexible packaging incorporates a range of materials, including polymers, paper, films, aluminum foil, cellulose, bioplastics, and laminated films. The choice of material depends on specific packaging requirements such as barrier performance, sealing capability, durability, print quality, cost-efficiency, and environmental impact.

Plastics remain the most widely used material in the industry due to their low cost, strength, resistance to moisture, versatility, effective barrier properties, and user-friendly nature.

In 2024, the global flexible packaging market was valued at USD 290. billion and is projected to grow at a compound annual growth rate (CAGR) of 4.8% between 2025 and 2030. The rising use of flexible packaging in the medical and pharmaceutical industries is a key factor driving this growth. These packaging solutions offer several benefits, including versatility in container types, reduced raw material usage, ease of disposal, and lightweight design—all of which are expected to contribute to their increasing demand throughout the forecast period.

Polymer Pipe Industry

There has been a notable shift from metal to polymer pipes across various industries, particularly in plumbing and piping applications within the construction sector. CPVC pipes are gaining popularity for both hot and cold water plumbing, and their usage has seen robust growth.

Globally, the plastic pipes market, valued at USD 56.5 billion in 2023 and is expected to grow by CAGR of 6.8% during 2024-30 period.

India ranks among the largest consumers of CPVC pipes and fittings. The government has launched ambitious initiatives like “Har Ghar Jal Yojna” and “Jal Jeevan Mission” to ensure tap water access for every rural household. A key milestone is the Jal Jeevan Mission (JJM), which aims to provide tap water to all rural homes by 2027.

As the demand for clean water increases in both residential and commercial projects, the need for plumbing pipes and fittings is expected to grow significantly. This surge in demand is driving the expansion of the PVC pipes and fittings market. Valued at approximately Rs 450 billion in 2024, the sector is projected to exceed Rs500 billion by FY2025, growing at a CAGR of 10.8%.

Union Budget 2025-26: Key Announcements for Plastics Extrusion Machine Manufacturers

• Support to Infrastructure

The Government has earmarked INR 1.5 lakh crore and will offer 50-year interest free loans to states for capital expenditure and incentives for reforms.

• Jal Jeevan Mission

The extension of Jal Jeevan Mission till 2028 is positive for the domestic pipe manufacturing industry.

• Urban Challenge Fund

The governments establishment of INR 1 lakh crore Urban Challenge Fund demonstrates its commitment to sustainable urban development through initiatives like Cities as Growth Hubs and improved water and sanitation. This effort aims to enhance urban resilience and support the vision of Viksit Bharat.

2. Electric Vehicle and Allied Industries:

Indias electric vehicle (EV) sector is undergoing a transformative phase, driven by a combination of policy support, environmental consciousness, and technological progress. Government initiatives, particularly the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, have been pivotal in encouraging EV adoption across the country. These efforts are reshaping Indias transportation landscape by promoting cleaner, more sustainable mobility solutions and fostering innovation in automotive technologies.

The Indian government has laid out ambitious targets for EV penetration by 2030, aiming for 30% of private car sales, 70% of commercial vehicles, 40% of buses, and a staggering 80% of two-wheelers and three-wheelers to be electric. This vision translates to around 80 million EVs on Indian roads by the end of the decade. These targets are supported by a strong emphasis on indigenous manufacturing under the Make in India initiative, which aims to achieve complete domestic production of EVs and reduce dependency on imports.

The growth projections for the Indian EV market are equally impressive. According to a report by Fortune Business Insights, the Indian EV market is expected to soar from USD 23.38 billion in 2024 to USD 117.78 billion by 2032, reflecting a compound annual growth rate (CAGR) of 22.4%. This exponential growth is fueled not only by favorable government policies but also by increasing consumer awareness, improving EV infrastructure, and the entry of major domestic and international players into the market.

Mirroring the rise of EVs globally, the Indian EV battery market is also witnessing substantial growth. It is projected to grow from USD 2.22 billion in 2023 to USD 13.89 billion by 2033. The increasing demand for efficient and sustainable battery technologies is driving investment in battery manufacturing and innovation. As India pushes toward its electrification goals, the development of a robust battery supply chain will be crucial to ensuring the long-term success and scalability of its EV ecosystem.

EV Sales Comparison

Category	FY24	FY25	YoY Change
E-2 Wheelers	9,48,518	11,49,422	21.2%
E-3 Wheelers	6,32,806	6,99,063	10.5%
E-4 Wheelers	91,506	107,645	17.6%
E-CV	8,494	8,844	4.1%
Grand Total	16,81,324	19,64,975	16.9%

SOURCE: FADA

The EV sales in India neared the 2 million annual sales mark for the first time in FY25. The EV sales grew by 16.9% YoY to 19,64,974 units in FY25 fueled by government initiatives and new launches. The E-2 Wheelers surpassed the 1 million mark for the first time, growing by 21.2% YoY to 11,49,422 units in FY25. However, the E-2 Wheelers share in total EV sales grew by 208 bps YoY to 58.5% in FY25. The E-3 Wheelers sales surged by 10.5% YoY to 6,99,063 units in FY25. The E-3 Wheelers share in total EV sales contracted by 206 bps YoY to 35.6% in FY25. The E-4 Wheelers sales grew by 17.6% YoY to 1,07,645 units in FY25. The E-4 Wheelers share in total EV sales stood flat at 5.4% in FY25. E-CV sales grew by 4.1% YoY to 8,844 units in FY25. E-Buses share in total EV sales stood 0.5% in FY25.

Government Initiatives: Key Announcements for EV Industry

Strengthened Government Commitment and Tax Incentives: The Indian government has reiterated its goal of achieving 30% electric mobility by 2030. In line with this mission, the Union Budget announced customs duty exemptions on imported capital goods and machinery used for manufacturing lithium-ion batteries, which are essential components of electric vehicles (EVs).

Proposal to Replace Diesel Buses: The government is planning to replace 800,000 diesel-powered buses, which make up over one-third of all buses on Indian roads, with electric alternatives within seven years. This transition, potentially under a new PM E-Drive Scheme framework, aims to cut emissions and encourage significant investment in EV infrastructure.

National Critical Mineral Mission: The government announced exemption of basic custom duty on cobalt powder and waste, the scrap of lithium-ion battery, lead, zinc and 12 more critical minerals. It will prompt MSMEs to take a leap of faith into battery manufacturing. The government has allocated Rs490 crore towards National Critical Mineral Mission in the Union Budget 2025-26.

Production-linked incentive (PLI) Scheme for National Programme on Advanced Chemistry Cell (ACC) Battery Storage: In order to aster Adoption and Manufacturing of Electric Vehicles in India boost local manufacturing, the Production- linked incentive (PLI) Scheme for National Programme on Advanced Chemistry Cell (ACC) Battery Storage has been increased from Rs15.4 crore to Rs155.8 crore as per Union Budget 2025-26.

Launch of PM E-DRIVE Scheme: The Ministry of Heavy Industries has introduced the PM E-DRIVE Scheme, backed by Rs10,900 crore (US$ 1.28 billion). This initiative aims to strengthen Indias electric vehicle ecosystem, promote e-mobility, and reduce the nations reliance on fossil fuels.

IV. Company Overview

Kabra Extrusiontechnik Limited (KET), a leading player in Indias plastic extrusion sector, is a part of the prestigious Kolsite Group. With over six decades of industry experience, a track record of more than 15,000 successful installations, and a global footprint spanning over 100 countries, KET holds a dominant position in the extrusion marketplace. KET is committed to continuously innovating and delivering superior solutions to plastic processors worldwide. Leveraging cutting-edge research and development along with diverse process enhancements, Kabra Extrusiontechnik has established high standards in the plastics extrusion field.

Geon (erstwhile Battrixx), a Battery division of KET, focuses on creating and manufacturing sustainable energy systems and technologies critical for Indias progression towards green energy storage and e-Mobility. Operating from its high-tech facilities in Chakan, Pune, the brand asserts its excellence through its pioneering offering - sophisticated lithium-ion battery packs and modules designed for electric vehicles.

A. Key Strengths

1. Strong Parentage: KET is a part of Kolsite group which enjoys a legacy of 60 years. Kolsite group has 8 state-of-art manufacturing plants across the nation. It has annual turnover of ~INR 1,500 crores led by ~2,000 skilled professionals.

2. Competitive Market Position: KETs competitive positioning lies in its understanding of the indigenous markets with strong client relationship, coupled with continuous efforts towards enhancing its technological expertise.

KET enjoys market leadership status in the extrusion market with ~40% market share in its product category as on FY25. The Company has a strong brand loyalty and wide customer base in the 100+ export markets.

3. Technical Collaboration: KET believes in continuous innovation with strong technology partnership.

Company	Purpose
Battenfeld-Cincinnati	Technical tie-up with Battenfeld-Cincinnati since 1983 for pipe and profile machinery
Extron Mecanor	JV with Extron Mecanor, Finland in October 2016 to provide an integrated approach to pipe producers by offering pipe socketing and belling solutions

4. R&D Focussed Approach: KET has one of the largest R & D team in the Plastics Machinery Industry with qualified engineers working in different areas of processing, manufacturing, application development, design, controls and automation. KET has added new range of Pipe and Film plants and other new products.

5. Diversification into Battery Management System (BMS): Geon, KETs Battery Division offers advanced lithium-ion battery packs with smart BMS both for electric vehicles and other energy storage applications. In FY22, KET fully acquired Varos Technology, a Pune-based company specializing in the development of comprehensive battery management systems. These systems utilize cloud-powered AI analytics to forecast battery lifespan and track their performance.

6. Geon Technical Edge: End to end inhouse Design, validation-Testing & Manufacturing of Truck, Bus, Passenger Car, LCV, 3W, 2W, ESS, Home Inverter, C&I, Golf cart, etc Batteries as per Customer Expectation.

7. Staying ahead of the Curve: Geon culture to constantly innovate and the ability to partner with global innovators is helping the Company to stay ahead of the curve. Geon innovation remains relevant making their product market ready, thereby providing differentiation to our esteemed consumers. Geon commitment towards constant innovation and thrust for end-customer delight makes us the preferred supply of choice from EV OEMs. GEON supplying batteries and having strong business relationship with different advanced chemistry cell suppliers, BESS Container suppliers, BMS (Battery management system), Design consultants. At the same time having reach to advanced & Future technologies available in these field.

B. Financial Performance Snapshot

Particulars (in Rs Cr)		F24		F25		Change (in %)
Revenue		608		477		(21.5%)
Gross Profit		184		186		1.2%
Gross Profit margin %		30.3%		38.9%		868 bps
EBITDA		61		52		(14.5%)
Particulars (in Rs Cr)	F24		F25		Change (in %)
EBITDA margin %	10.0%		10.9%		90 bps
EBIT	52		45		(14.2%)
PAT	32		34		6.9%
PAT margin %	5.2%		7.2%		190 bps

KETs revenues stood at Rs 477 crores in FY25. The revenue mix of Extrusion Business: Battery Division stood at 74:26 in FY25 as against 57:43 in FY24. The Companys EBITDA stood at Rs 52 crores. EBITDA margin stood at 10.9% in FY25. KETs PAT stood at Rs 32 crores. PAT margin stood at 6.8% during FY25.

C. Key Financial Ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and the Company is required to give details of significant changes (change of 25% or more) as compared to the immediately previous financial year) in key sector-specific financial ratios.

Particulars	% Change	Reasons for Variation
Debtors Turnover	(13.90%)
Inventory Turnover	(33.60)	Due to Increase in Inventory and lower sale
Interest Coverage Ratio	0.28%
Current Ratio	(14.50%)
Debt Equity Ratio	42.30%	Due to increase in Borrowings towards working capital
Operating Profit Margin	9.00%
Net Profit Margin	36.30%	On a/c of exceptional item
Return on Capital Employed	(7.10%)

D. Business Outlook

Extrusion Division: Kabra Extrusiontechnik has adeptly responded to market changes and raw material fluctuations, achieving notable success in high-output, low-thickness multilayer and barrier film segments over the past year. This progress, driven by internal R&D and strategic partnerships, includes a focus on bio-compostable films in collaboration with select customers. Looking ahead, Kabra plans to enhance its film plants for greater outputs and widths, targeting specific high-demand applications, which will necessitate significant R&D investments. As a trusted industry leader, Kabra is committed to delivering innovative solutions that meet diverse market needs, including energy efficiency and compatibility with recyclable materials. With ongoing investments in manufacturing and talent, the company is well- positioned to capitalize on anticipated growth in the pipe industry.

Geon Division: Geon, the Battery Division of KET focused on advanced lithium-ion battery packs and modules for electric vehicles, is gaining traction from EV OEMs. Geon has already forayed into E-3 Wheelers and Battery swapping in FY25 and is actively pursuing new industry segments, including E-Low Commercial Vehicles, E-4 Wheelers etc. in the upcoming fiscal year. With the increasing confidence of consumer on Electric vehicles, overall industry numbers are growing.

In parallel, the development of Battery Energy Storage Systems (BESS) is gaining momentum as a crucial component in the transition to renewable energy. BESS technology enables the efficient storage and management of energy generated from renewable sources, such as solar and wind, ensuring a stable and reliable power supply. As the demand for sustainable energy solutions grows, Geons investments in BESS are expected to increase, driving innovation and enhancing grid resilience while supporting the integration of electric vehicles into the energy ecosystem. Geon aspires to be a key player in the BESS arena in the coming years.

E. Risks and Challenges

The operational dynamics of the Company are subject to fluctuations driven by numerous factors including the risk of technology becoming outdated, unforeseen events like the Covid-19 pandemic, geopolitical matters, trade wars, market volatility, intensifying competition, import pressures, and challenges from the unorganized sector, all of which could potentially impact the Companys future business performance and profit margins. To address this, the Company has implemented a risk identification and mitigation strategy. This entails the pinpointing of major risks by business units and functional areas, with the intention of deploying a variety of countermeasures over time to effectively manage these risks on an ongoing basis.

The Company is prepared to offer technological solutions to emerging challenges, such as processing reusable, recyclable, or compostable plastics, as well as non-toxic, Lead-Free stabilizers by enhancing the current infrastructure of its client base. Furthermore, the business has broadened its focus into the Energy Storage Systems (ESS) sector, aiming to diversify beyond reliance on a single market segment. Capitalizing on its capacity to embrace and apply novel technologies, the Company plans to produce cutting-edge Lithium-ion Battery Packs that come with integrated Battery Management Systems (BMS), marketed under the “GEON” brand. This initiative is poised to contribute to Indias shift towards sustainable energy storage solutions and the electrification of transportation.

V. Internal Control System and Their Adequacy

The Companys internal audit system is geared towards ensuring adequate internal controls commensurate with the size complexity and needs of the business, with the objective of efficient conduct of operations through adherence to the Companys policies, identifying areas of improvement, evaluating the reliability of financial statements, ensuring compliance with applicable laws and regulations and safeguarding of assets from unauthorized use. The Company has appointed two firms of Chartered Accountants as Internal Auditors in compliance of Section 138 of the Companies Act, 2013 to conduct internal audit of functions and activities of its two distinct divisions. They report on quarterly basis to the Company on their findings. The Report is reviewed by the Audit Committee Members and Statutory Auditors.

VI. Human Capital

The Company continues to maintain cordial and peaceful industrial relations facilitating smooth manufacturing activities. The programmes aiming at leadership development and upgradation with advancing technology on all fronts were conducted during the year. Our human capital strength stood at 619 including Workers, Staff and Executives as on 31st March 2025.

Cautionary Statement

Actual performance may differ from projections made, as the Companys operations are subject to various economic conditions, government regulations, natural calamities and other incidental factors over which the Company may not have any direct / indirect control.

For and on behalf of the Board of Directors

Place : Mumbai	S. V. Kabra
Date: May 16, 2025	Executive Chairman
	(DIN: 00015415)