La Opala RG 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.

Regional growth (%)	2024	2023
World output	3.2	3.3
Advanced economies	1.7	1.7
Emerging and developing economies	4.2	4.4
(Source: IMF, KPMG, Press Information Bureau, BBC, India Today)

Performance of the major economies, 2024

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. In view of this, World Bank projected global economic growth at 2.7% for 2025 and 2026, factoring the various economic uncertainties. (Source: IMF, United Nations)

Indian economic review

Overview

The Indian economy grew at 6.5% in 2024-25, compared to a revised 9.2% in 2023-24. This represented a four-year low due to a moderate slowdown within the Indian economy (marked by slower manufacturing growth and a decline in net investments). Despite the slowdown, India retained its position as the worlds fifth-largest economy.

Indias nominal GDP (at current prices) was H330.68 Trillion in 2024-25 (H301.23 Trillion in 2023-24). The nominal GDP per capita increased from H2,15,936 in 2023-24 to H2,35,108 in 2024-25, reflecting the impact of an economic expansion.

The Indian rupee weakened 2.12% against the US dollar in 2024-25, closing at H85.47 on the last trading day of 2024-25. In March 2025, the rupee recorded the highest monthly appreciation since November 2018, rising 2.39% (arising out a weakening US dollar). Inflationary pressures eased, with CPI inflation averaging 4.63% in 2024-25, driven by moderating food inflation and stable global commodity prices. Retail inflation at 4.6% in 2024-25, was the lowest since the pandemic, catalysing savings creation.

Indias foreign exchange reserves stood at a high of USD 676 Billion as of April 4, 2025. This was the fourth consecutive year when rating upgrades outpaced downgrades on account of strong domestic growth, rural consumption, increased infrastructure investments and low corporate leverage (annualised rating upgrade rate 14.5% exceeded the decade-long average of 11%; downgrade rate was 5.3%, lower than the 10-year average of 6.5%).

Gross foreign direct investment (FDI) into India rose 13.6% to USD 81 Billion during the last financial year, the fastest pace of expansion since 2019-20. The increase in the year was despite a contraction during the fourth quarter of 2024-25 when inflows on a gross basis declined 6% to USD 17.9 Billion due to the uncertainty caused by Donald Trumps election and his assertions around getting investments back into the US.

Growth of the Indian economy

	FY22	FY23	FY24	FY25
Real GDP growth (%)	8.7	7.2	9.2	6.5

(Source: MoSPI, Financial Express)

Growth of the Indian economy quarter by quarter, 2024-25

	Q1 FY25	Q2 FY25	Q3 FY25	Q4 FY25
Real GDP growth (%)	6.5	5.6	6.2	7.4

(Source: The Hindu, National Statistics Office)

The banking sector continued its improvement, with gross non-performing assets (NPA) for scheduled commercial banks (SCBs) declining to 2.6% as of September 2024, down from 2.7% in March 2024. The capital-to-risk-weighted assets ratio for SCBs stood at 16.7% as of September 2024, reflecting a strong capital position.

Indias exports of goods and services reached USD 824.9 Billion in 2024-25, up from USD 778 Billion in the previous fiscal year. The Red Sea crisis impacted shipping costs, affecting price-sensitive exports. Merchandise exports grew 6% YoY, reaching USD 374.1 Billion.

Indias net GST collections increased 8.6%, totalling H19.56 Lakh Crore in 2024-25. Gross GST collections in 2024-25 stood at H22.08 Lakh Crore, a 9.4% increase YoY.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in 2024-25. The industrial sector grew by 6.5%, supported by growth in construction activities, electricity, gas, water supply and other utility services.

Indias services sector grew at 8.9% in 2024-25 (9.0% in 2023-24), driven by public administration, defence and other services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in 2024-25, compared to 8.6% in 2023-24. Meanwhile, the construction sector expanded at 9.4% in 2024-25, slowing from 10.4% in the previous year.

Manufacturing activity was subdued in 2024-25, with growth at 4.5%, which was lower than 12.3% in 2023-24. Moreover, due to lower public spending in the early part of the year, government final consumption expenditure (GFCE) is anticipated to have slowed to 3.8% in 2024-25, compared to 8.1% in 2023-24.

The agriculture sector grew at 4.6% in 2024-25 (1.4% in 2023-24). Trade, hotel, transport, communication and services related to broadcasting segment were estimated to grow at 6.4% in 2024- 25 (6.3% in 2023-24). From a demand perspective, the private final consumption expenditure (PFCE) exhibited robust growth, achieving 7.2% in 2024-25, surpassing the previous financial years rate of 5.6%. The Nifty 50 and SENSEX recorded their weakest annual performances in 2024-25 in two years, rising 5.3% and 7.5% during the year under review respectively. Gold rose 37.7% to a peak of USD 3,070 per ounce, the highest increase since 2007-08, indicating global uncertainties.

Total assets managed by the mutual fund (MF) industry jumped 23% or H12.3 Lakh Crore in fiscal 2025 to settle at H65.7 Lakh Crore. At close of 2024-25, the total number of folios had jumped to nearly 23.5 Crore, an all-time peak. During last fiscal, average monthly systematic investment plan (SIP) contribution jumped 45% to H24,113 Crore.

Foreign portfolio investments (FPIs) in India experienced high volatility throughout 2024, with total inflows into capital markets reaching approximately USD 20 Billion by year-end. However, there was significant selling pressure in the last quarter, influenced by new tariffs announced by the new US government on most countries (including India).

Outlook

India is expected to remain the fastest-growing major economy. Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tariff levies on India and other countries. The following are some key growth catalysts for India in 2025-26.

Tari_-based competitiveness: India identified at least 10 sectors such as apparel and clothing accessories, chemicals, plastics and rubber where the US high tariffs give New Delhi a competitive advantage in the American market over other suppliers. While India faced a 10% tariff after the US suspended the 26% additional duties for 90 days, the levy remained at 145% on China, the biggest exporter to the US. Chinas share of apparel imports into the US was 25%, compared with Indias 3.8%, a large opportunity to address differential (Source: Niti Aayog).

Union Budget 2024-25: The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasising agriculture, MSMEs, investment, and exports as the four primary growth engines. With a fiscal deficit target of 4.4% of GDP, the government reinforced fiscal prudence while allocating H11.21 Lakh Crore for capital expenditure (3.1% of GDP) to drive infrastructure development. The February 2025 Budget marked a shift in approach, with the government proposing substantial personal tax cuts. Effective April 1, 2025, individuals earning up to H12 Lakh annually will be fully exempt from income tax. Economists estimate that the resulting H1 Lakh Crore in tax savings could boost consumption by H3-3.5 Lakh Crore, potentially increasing the nominal private final consumption Expenditure (PFCE) by 1.5-2% of its current H200 Lakh Crore.

Free trade agreement: In a post-Balance Sheet development, India and the United Kingdom announced a free trade agreement to boost strategic and economic ties. This could lead to a significant increase in the export competitiveness of Indian shipments in the UK across the textiles, toys, leather, marine products, footwear, and gems & jewellery sectors. About 99% of Indian exports to UK will enjoy zero-duty access tariff cuts; India will cut tariffs on 90% of tariff lines and 85% could become fully duty-free within 10 years.

Pay Commission impact: The 8^th Pay Commissions awards could lead to a significant salary revision for nearly ten Million central government employees. Historically, Pay Commissions have granted substantial pay hikes along with generous arrears. For instance, the 7^th Pay Commission more than tripled its monthly salaries, raising the range from H7,000 to H90,000 to H18,000 to H12.5 Lakh, triggering a widespread ripple effect.

Monsoons: The India Meteorological Department predicted an ‘above normal monsoon in 2025. This augurs well for the countrys farm sector and a moderated food inflation outlook. Easing inflation: Indias consumer price index-based retail inflation in March 2025 eased to 3.34%, the lowest since August 2019, raising hopes of further repo rate cuts by the Reserve Bank of India.

Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of 2025-26. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26.

Lifting credit restrictions: In November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to 9-13% between September 2023 and 2024. However, under its new leadership, the RBI has prioritised restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks, and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Global tableware market overview

The global tableware market is projected to reach USD 51,718.8 Million in 2025, rising from USD 49,303 Million in 2024. Over the forecast period from 2025 to 2035, the market is expected to grow at a compound annual growth rate (CAGR) of 4.9%, ultimately reaching a value of USD 83,445.7 Million by 2035.

Economic growth in developing countries and the creation of attractive kitchen tableware in various regions are driving market growth.

The tableware segment dominated the global industry, accounting for a revenue share of 54.7% in 2023.

Primary factors driving growth in this segment include rising urbanisation, changing lifestyles, urban home settings with a greater number of utilities in lesser space, and the availability of well-designed dining setups. Key brands operating in the kitchenware industry have been offering diverse portfolios of tableware products, such as dinnerware, flatware, and stemware. Varieties like cutlery, glassware, dessert plates, porcelain, stoneware, bone china, melamine, platters, earthenware, gray boats, and serveware have generated greater demand in residential and commercial applications. The cookware segment is expected to experience the fastest CAGR of 7.4% from 2024 to 2030, ultimately leading to a rise in demand for tableware.

Demand for vintage glass drinkware and dinnerware has increased as peoples dining habits have become more sophisticated. The growth of the tableware market is being driven by growing investment in the hotel and catering industries in developing countries like India. The proliferation of e-commerce has also aided the expansion of the global kitchen tableware market share.

(Source: Grand View Research, Linked-in)

Indian tableware market overview

The India tableware market is estimated to grow at a CAGR of 4.8% from 2024 to 2029, with an estimated increase of USD 376.9 Million. Factors driving this growth include rising household numbers, expansion in the hospitality sector and the advantages of opal glass tableware. Tableware plays a crucial role in enhancing the visual appeal and sensory experience of every dish and beverage. From elegant glassware to distinctive serving platters, the tactile quality of tableware adds sophistication to any dining occasion, creating a harmonious blend of taste and aesthetics. It also influences the ambience of the dining space, setting the stage for the meal ahead.

Over recent years, the function of the dining room in India has evolved beyond a mere space for eating meals and tableware has played a crucial role in this transformation, lending grace and elegance to the dining settings. The demand for tableware in India has witnessed significant changes, with products now serving dual purposes as both serve ware and lifestyle items. Looking forward, the market for branded tableware is expanding due to its aesthetic appeal, affordability and microwave-friendly features. The Indian tableware market is a vibrant and rapidly growing industry, reflecting the countrys rich cultural diversity and evolving consumer preferences. With a history that dates back to ancient times, tableware in India has always been an integral part of daily life, with traditional items like brass and copper utensils being widely used. In recent years, the market has seen a significant shift towards modern materials and designs, driven by rising disposable incomes and a growing middle class. Consumers are increasingly opting for high-quality, stylish tableware that enhances their dining experiences, with a particular emphasis on eco-friendly and sustainable products. The market is segmented into various product types, including metal ware, ceramicware, glassware, plastic, and fiberware, each catering to different consumer needs and preferences. The hospitality sector is a major driver of growth, with hotels, restaurants, and cafes seeking durable and aesthetically pleasing tableware to serve their customers. The rise of e-commerce platforms has also played a crucial role, providing consumers with convenient access to a wide range of products from the comfort of their homes. Key players in the market include both local artisans and international brands, offering a diverse range of products that blend tradition with modernity. Overall, the Indian tableware market is characterised by its dynamic growth, driven by changing consumer preferences, economic development, and a commitment to sustainability. The opalware market, though fragmented, is experiencing steady growth and is regarded superior to other materials. The growing cultural diversity and variety of lifestyles in India have made this market one of the most dynamic in the country. However, the changing consumer preferences specific to opalware, unlike other segments, indicate that there are no dominant branded products, contributing to the markets fragmented nature.

(Source: Technavio, Times of India, Daedal Research, Bonafide)

Growth drivers for the tableware sector

Urbanisation: By 2030, an estimated 600 Million people will live in Indian cities, driving higher disposable incomes and a shift towards modern lifestyles, resulting in increased spending on quality tableware.

Robust GDP growth: Indias GDP growth rate is expected to reach 9% by 2026, providing consumers with higher spending power and driving growth in the dining segment.

Rising younger population: Indias youth population is estimated to reach 450 Million by 2026, making up 30% of the total population. This growing demographic tends to dine out frequently and prefers stylish tableware, driving market growth.

Consumer exposure: Increased exposure to global dining trends through media and travel influences consumer preferences, driving demand for diverse and aesthetically pleasing tableware.

Food service sector expansion: The food services sector is expected to grow at a CAGR of 9.5% from 2025 to 2030, directly impacting demand for tableware in restaurants, cafes, and hotels.

E-commerce growth: Online retail platforms make a wider variety of tableware accessible to consumers, contributing to market expansion and expected to reach USD 200 Billion by 2027.

Hospitality industry boom: The hotel industry is anticipated to contribute USD 2.5 Trillion to Indias GDP by 2050. Expansion of the hospitality sector increases demand for high-quality and durable tableware.

(Source: Un.org, IMF, Euromonitor, IBEF, IHCL)

Opportunities

Growing demand for domestic products: Reduction in imports leads to increased dependence on domestic products, driving demand.

Market expansion: Growing market size and potential for further expansion.

Diversification of product offerings: Opportunities to expand into new and diverse product categories.

Competitive pricing: Presence of an attractive price-value proposition to attract price-conscious customers.

E-commerce growth: Increasing dependence of consumers on e-retail, providing opportunities for online sales and expansion.

Threats

Increasing competition: Rise in the number of organised sector participants in the market.

Decreased consumer spending: Reduced expenditure on non-essential items, impacting demand.

Budget constraints: Reduction in budgetary spending on luxury goods by individuals and institutions.

Export challenges: Decline in exports due to container shortages and rising freight costs.

Company overview

La Opala RG Limited remains a key player in the Indian opalware segment, holding a significant industry share. The opalware market is growing rapidly, gaining popularity among consumers and driving increased demand across various categories. With two production facilities in Sitarganj (Uttarakhand) and one in Madhupur (Jharkhand), La Opala has established a robust distribution network and enjoys strong brand recall. The Companys export excellence has been recognised with top awards from EPCH (Export Promotion Council for Handicrafts) and CAPEXIL (Chemical and Allied Export Promotion Council).

Financial review

Analysis of the Profit and Loss Statement

Revenues: Revenues from operations during 2024-25 stood at H331.86 Crore compared to H365.13 Crore in 2022-23. Other Income of the Company in 2024-25 was H47.73 Crore against H43.90 Crore in 2023-24, which was a 14.38% share of the Companys revenues and manifesting the Companys reliance on its core business operations Expenses: The total expense of the Company decreased by 3.93% from H257.27 Crore in 2023-24 to H247.16 Crore in 2024-25.

Analysis of the Balance Sheet sources of funds

The net worth of the Company declined by 3.19% from H851.52 Crore as of March 31, 2024 to H824.37 Crore as of March 31, 2025. During the year under review, the Companys equity share capital stood at 11.10 Crore equity shares of H2 each.

Working capital management

Current Assets of the Company increased by 1.56% from H604.98 Crore as of March 31, 2024 to H614.45 Crore as of March 31, 2025. The Current and Quick Ratios of the

Company stood at 18.79 and 16.63, respectively in 2024-25 as against 20.27 and 16.91, respectively in 2023-24.

Margins

The Company registered an EBITDA margin of 33.41% during 2024-25 as compared to 37.50% during 2023-24.

Key financial ratios

Financial ratios	2024-25	2023-24	% Change
Debtors Turnover Ratio	12.18	11.94	2
Inventory Turnover Ratio	4.64	5.34	-13.11
Interest Coverage Ratio	20.56	21.01	-2.14
Current Ratio	18.79	20.27	-7.30
Debt-Equity Ratio	0.01	0.01	-
Operating Profit Margin (%)	25.52	29.54	-13.61
Net Profit Margin (%)	29.80	35.22	-15.39
Return on Net Worth (%)	11.72	15	-21.86

Risk management

Economy risk: An economic slowdown may hamper the Companys performance. Mitigation: The Indian economy posted a strong recovery, with real GDP growing by 6.5% in 2024-25, strengthening consumer sentiment and creating a supportive market environment. While the Companys profit after tax declined to H96.59 Crore from H127.72 Crore in 2023-24, it continued to maintain financial stability and pursue growth opportunities amidst evolving market dynamics.

Geography risk: Global demand and exports could face obstacles due to an economic slowdown.

Mitigation: The Company is expanding its presence in international markets, with its products currently featured in 40 countries.

Liquidity risk: Operational smoothness might be affected due to a shortage of cash.

Mitigation: The Company has adequate cash in its reserves, valued at H510.90 Crore as of March 31, 2025.

Safety risk: Accidents, health risks and injuries are common occurrences in the opalware industry.

Mitigation: The Company has implemented essential safety standards across its manufacturing facilities and established a protocol for identifying training needs.

Competition risk: The increasing number of players in the industry could potentially affect the Companys profitability.

Mitigation: To maintain a competitive edge, La Opala focuses on unique designs, advanced technology, competitive pricing, strong distributor and retailer relationships, and sector-specific expertise.

Human resources

La Opala prioritises enhancing the potential and overall wellbeing of its employees, both at the corporate office and in manufacturing facilities. It emphasises building a dealer distributor network supported by fair business practices. The Company offers an engaging workplace environment, attractive growth opportunities and fair compensation. With one of the highest employee retention rates in the industry, La Opala promotes leadership within the organisation, enhancing future prospects. As of March 31, 2025, the total number of employees in the Company was 777.

Internal control systems and their adequacy

La Opalas internal control system is a comprehensive framework designed to identify, measure, manage, and monitor primary risks. This system ensures the

Company operates in a sound and fair manner, aligned with its pre-established objectives and both short-term and long-term operational goals. The framework emphasises fairness, transparency, and accountability, enabling effective management of the business.

Cautionary statement

The Management Discussion and Analysis section contains forward-looking statements regarding the Companys objectives, projections, estimates, and predictions. These statements, which include expectations about growth strategy, product development, market positioning, expenditures, and financial results, are based on certain assumptions and expectations about future events. However, the Company cannot guarantee the accuracy or realisation of these assumptions and expectations. Furthermore, the Company disclaims any responsibility to publicly update, modify, or revise any forward-looking statement in light of new developments, information, or events