Metroglobal Ltd Management Discussions

Economic and industry overview

Economic environment

The global economy grew moderately by 3.3% in 2024, reflecting relative stability amid persistent constraints. In 2025, rising geopolitical tensions and economic pressures have led to significant policy shifts, including the U.S. imposing new tariffs that triggered widespread retaliatory measures.

These near-universal tariffs, implemented by April 2025, have heightened risks to global GDP, casting uncertainty over the growth outlook and amplifying economic volatility.

This environment of instability has weakened the reliability of traditional forecasting models, with global headline inflation now expected to ease more gradually projected at 4.3% in 2025 and 3.6% in 2026. Despite these challenges, many economies have demonstrated adaptability, emphasizing the importance of proactive reforms, strong institutions, and coordinated policies. Moving forward, international collaboration will be essential to restore momentum, promote fair trade, resolve debt issues, and achieve sustainable, inclusive growth.

India Rs s economy is projected to grow by 6.5% in FY 2024-25, demonstrating resilience amid global volatility. This growth is supported by strong domestic fundamentals, ongoing structural reforms, digital transformation, and infrastructure development. While manufacturing growth is expected to moderate to

6.2%, agriculture and services sectors remain robust, bolstered by private consumption and macroeconomic stability. India Rs s external sector remains resilient, with a 6.0% rise in exports during April-December 2024 and a growing leadership role in global services trade. Coordinated macroeconomic policies, including inflation management and fiscal prudence, have helped sustain economic momentum. Looking ahead to FY 2025-26, India faces external risks such as geopolitical tensions and commodity price volatility, but the outlook remains balanced. Key domestic priorities include sustaining private investment, boosting consumer confidence, and accelerating wage growth. Government initiatives on skilling and digital literacy align with the rising influence of AI, positioning India Rs s young workforce for future opportunities. Continued structural reforms and regulatory improvements will be critical to enhancing competitiveness, strengthening resilience, and sustaining long-term economic growth.

Chemicals

India Rs s chemicals industry has showcased remarkable resilience despite facing global uncertainties such as demand fluctuations and supply chain disruptions. This resilience is underpinned by the country Rs s strong macroeconomic fundamentals, an abundant and skilled talent pool, and a competitive manufacturing ecosystem.

Together, these strengths position India as a rising force in the global chemicals market, with significant potential to enhance its footprint.

India Rs s domestic consumption is projected to grow at a compound annual growth rate of 9 to 10% until 2040. This growth is driven by factors including rising disposable incomes, a favourable demographic dividend, increasing global preference for ecofriendly alternatives, and a growing diversification of global chemical supply chains. It is anticipated that by 2040, the Indian chemicals market will reach a valuation between $850 billion and $1 trillion, constituting 10 to 12% of the global chemicals market.

To sustain and accelerate growth, Indian chemical companies are focusing on several strategic priorities. Expanding domestic manufacturing capacity is essential to meet growing internal demand and reduce reliance on imports. Companies are also actively pursuing global expansion through strategic partnerships and investments that provide access to new markets and advanced technologies. Targeted mergers and acquisitions help diversify product portfolios and scale operations to compete effectively on the global stage.

On the policy front, the Production Linked Incentives (PLI) scheme is a positive step, as it encourages the industry to invest rapidly and commence commercial operations.

To further cement India Rs s position as a global manufacturing hub for chemicals, additional incentives will be vital. By fostering growth and development through supportive policies, the government can facilitate adoption of new technologies, innovative processes, and advanced manufacturing practices that enhance efficiency, reduce costs, and bolster overall competitiveness.

Sustainability is becoming a core focus for the industry, with firms accelerating initiatives to align with international environmental standards and reduce carbon footprints. Efficient capital expenditure planning is critical for ensuring timely and cost-effective project execution, enabling companies to remain agile amid evolving market conditions. Furthermore, digital transformation is driving innovation and operational efficiency, as companies leverage advanced technologies to optimize production processes, enhance supply chain management, and improve customer engagement.

By addressing these priorities with concerted effort and strategic vision, India Rs s chemicals sector aims to solidify its position as a global leader. This journey will require collaboration between industry stakeholders, government support, and sustained investments in technology and sustainability. With these combined efforts, India is poised to unlock new growth avenues and contribute significantly to the global chemicals landscape.

(Source: McKinsey & Company)

Textile

India Rs s textile sector is a central pillar of the national economy, standing as the second-largest global producer of man-made fibres and the third-largest exporter of textiles and apparel. Its contribution extends across multiple dimensions, accounting for a notable share of the country Rs s GDP, industrial output, and total exports.

This sector is also a major source of employment, especially for women and rural communities, and commands a strong presence in the international market with a 4% share in global textile and apparel trade. Future growth prospects remain robust, with the industry expected to expand by 8 to 9% in CY25, provided that key input prices remain stable and currency conditions are supportive.

A unique strength of the Indian textile industry lies in its ability to blend traditional craftsmanship with modern manufacturing excellence. This balance appeals to global investors who are increasingly drawn to businesses that combine heritage with innovation.

The industry is undergoing a marked transformation, as sustainability and eco-friendly practices become integral to both investment decisions and consumer preferences. Demand for organic cotton, recycled materials, and environmentally responsible dyes continues to grow, supported

by the sector Rs s proactive adoption of sustainable manufacturing processes.

Technical textiles represent a rising force within the industry, driven by increasing requirements for advanced, high-performance materials and reinforced by government policies such as the Production Linked Incentive scheme. The growing popularity of sportswear and functional apparel is further boosting this segment, while India Rs s expanding young population and rising disposable incomes ensure a resilient domestic demand base. These trends help the sector sustain momentum even amid external market uncertainties.

The Union Budget 2025-26 also focuses on strengthening the textile sector through cotton productivity initiatives, duty restructuring on fabric, and supporting domestic manufacturing. This targeted policy support is expected to further enhance the sector Rs s competitiveness and capacity for growth.

Government support has played a vital role in shaping a favourable environment for the industry. Initiatives like Make in India and the Production Linked Incentive scheme, coupled with dedicated skill development and rural cluster programs, are empowering the workforce and fostering competitiveness. Incentives for value-added segments, such as technical textiles and man-made fibres, are attracting investments, stimulating exports, and supporting India Rs s move toward greater selfreliance. Recognizing the potential of technical textiles, the government has laid out comprehensive guidelines to strengthen educational infrastructure and develop a skilled talent pool for this segment.

The ongoing integration of automation, robotics, and digital technologies is further transforming the sector. Artificial intelligence is streamlining design, optimizing supply chains, and enabling personalized marketing, making the industry more agile and customer-focused. Continuous research and development, with a focus on new materials, sustainability, and innovative applications, is ensuring that Indian textiles remain future- ready and globally competitive. As a result, the sector is well positioned to deliver long-term growth, value, and leadership in the global textile landscape.

Source: EMIS Insights Industry Report

Real estate

India Rs s real estate sector has shown remarkable resilience and sustained growth potential, driven by a dynamic interplay of market forces and enabling government policies. Looking ahead, the sector is on track to become a trillion-dollar industry by 2030, underpinned by rising investments and a strong focus on innovation.

Affordable housing initiatives have been instrumental in broadening access to quality homes, fueling the expansion of the residential market and reaching a wider demographic.

In the commercial space, the growing demand for flexible office models is redefining the market, providing greater adaptability to evolving business and consumer needs. Cities like Mumbai, Pune, Hyderabad, and NCR remain at the forefront, serving as economic and cultural powerhouses that drive demand across both residential and commercial segments.

The ongoing integration of technology and sustainability is further reshaping the sector Rs s trajectory. The adoption of smart home technologies, digital platforms, and data-driven decisionmaking is becoming increasingly prevalent in new developments. Simultaneously, sustainability considerations are influencing building design and construction practices, with a heightened focus on energy efficiency and environmental stewardship. This convergence of digital innovation and responsible development signals a progressive future for Indian real estate ?€” one that aligns more closely with global

benchmarks and sets the stage for continuous evolution.

By 2047, India Rs s real estate sector is projected to reach a value of US$ 5.8 trillion, accounting for 15.5% of the country Rs s GDP, up from its current contribution of 73%.

Source: Knight Frank - https:// kpmg.com/in/en/insights/2024/02/ navigating-the-dynamics-of-real- estate-in-india.html

Currently, our projects are being executed through the SPV route at the following locations, are under various stages of implementation:

Metals

Ferrous

Despite this momentum, the sector faces persistent challenges such as the need to manage carbon emissions and secure a sustainable supply chain. Steel demand in India is expected to grow by 9-10% in FY 2024-25, driven primarily by investments in infrastructure, construction, and real estate.

Leading companies in the Indian steel industry are investing heavily in advanced technologies to boost operational efficiency and reduce environmental footprint. Policy measures, such as the National Steel Policy and the Make in India initiative, have provided further impetus to the sector Rs s expansion. A surge in urban consumption and heightened spending on infrastructure projects are projected to sustain robust growth in steel demand. This, in turn, is likely to generate increased demand for capital goods, automobiles, and related industries across the broader manufacturing ecosystem.

Non-ferrous

India Rs s non-ferrous metals sector is witnessing notable expansion, supported by strong domestic demand, progressive government policies, and an increased focus on sustainability. Metals such as aluminium, copper, zinc, lead, and nickel are critical for a range of industries, including construction, automotive, electronics, and renewable energy. The sector Rs s growth is underpinned by large- scale infrastructure projects, rapid urbanization, and the country Rs s drive towards electric mobility and renewable power. Government initiatives, including Production Linked Incentive schemes and the Make in India campaign, are aimed at boosting domestic manufacturing and reducing reliance on imports. Recent developments, such as the commissioning of new copper smelters, are expected to further enhance India Rs s self-sufficiency in key non-ferrous metals.

Sustainability is becoming increasingly important within the sector, with major producers turning to renewable energy and adopting circular economy practices. Policy measures now require new non-ferrous metal products to include a certain proportion of recycled content in the coming years, promoting resource efficiency and environmental responsibility. Despite the sector Rs s positive outlook, challenges remain, including dependence on imported raw materials, environmental considerations, and the need for advanced recycling and processing technologies. Addressing these issues will be crucial to sustaining growth and maintaining global competitiveness. With supportive policy frameworks, technological upgrades, and a growing emphasis on responsible production, India Rs s non-ferrous metals industry is well positioned to play a pivotal role in the nation Rs s industrial and economic progress.

Precious

Precious metals have long been regarded as a safe haven for investors, particularly during times of economic and geopolitical uncertainty. In India, gold, silver, and platinum continue to play a vital role not only in tradition and culture but also in portfolio diversification and industrial innovation. The performance of these metals is shaped by a combination of global events, investor sentiment, and evolving industrial uses.

In FY 2024-25, gold and silver delivered strong returns, outperforming many other asset classes. This rally was largely driven by heightened geopolitical tensions, sustained central bank buying, persistent inflation concerns, and increased interest in exchange-traded funds (ETFs). Gold, in particular, benefited from its safe-haven appeal,

drawing significant inflows into gold ETFs and nearly doubling their assets under management over the year. Silver Rs s performance was underpinned by its dual identity as both a precious and an industrial metal, with continued industrial demand especially from sectors like solar energy and electronics-contributing to its price momentum.

Looking ahead, the outlook for gold and silver remains positive. Analysts expect ongoing global economic uncertainties and the possibility of interest rate cuts to keep investor interest high in both metals. Silver Rs s industrial demand is projected to rise further, supporting its price, though its volatility is likely to be greater than gold due to its broader use in industrial applications.

Platinum, while not as widely discussed as gold and silver, is increasingly drawing attention for its applications in the automotive sector and its growing recognition as an investment asset.

Its unique physical and industrial properties position it as a key metal to watch as the precious metals market continues to evolve.

Overall, the precious metals sector appears poised for continued strength in FY26, supported by a mix of macroeconomic drivers and resilient demand across investment and industrial segments.

Human capital

At the core of the Company Rs s philosophy is a deep respect for its people, recognizing them as the true catalysts behind every milestone and success. It is their talent, commitment, and relentless drive that have powerec the Company Rs s progress and shaped its journey so far. But the Company Rs s commitment extends well beyond simple recognition. It strives to create an environment where every individual can flourish personally and professionally. Continuous learning is not just encouraged but embedded in the culture, inspiring employees to refine their abilities and broaden their horizons. The Company knows that empowering its people enables

them to deliver their best, which in turn elevates the Company Rs s ability to deliver on its promises. By prioritizing employee well-being and satisfaction, the Company champions a healthy work-life balance, complemented by

meaningful incentives, rewards, and abundant opportunities for growth and self-development.

Risk management

The Company recognizes that in a world marked by constant change and market volatility, a comprehensive approach to risk management is essential. To navigate these complexities, it has built a strong Enterprise Risk Management (ERM) framework designed to anticipate, identify, and address potential risks across all levels of the organization. This proactive architecture not only safeguards the Company against uncertainties but also empowers it to respond swiftly and effectively, ensuring continued stability and resilience in a dynamic business environment.

Outlook

The global trade outlook presents a mix of challenges and opportunities, with persistent geopolitical tensions and protectionist measures introducing uncertainty and fragmenting supply chains.

Signs of resilience are emerging across key markets, as the formation of new trade blocs and evolving policies prompt businesses and countries to adapt by exploring alternative partnerships and diversifying

trade routes. While regions like Asia are benefiting from strong domestic demand and a strategic reconfiguration of supply chains, established economies in Europe and North America are navigating a phase of adjustment and moderate growth. Amid these headwinds, ongoing innovation, digitalization, and an intensified focus on sustainability continue to offer promising avenues for growth. In this shifting global landscape, effective cooperation and

policy alignment will be essential to harness opportunities and maintain stability in international trade.

Against this backdrop, India Rs s economic outlook remains broadly positive. The country continues to establish itself as one of the fastest- growing major economies, buoyed by ongoing reforms, a robust investment climate, and government support for infrastructure, digitalization, and manufacturing. A favorable inflation

and monetary policy environment have strengthened overall sentiment, supporting both consumption and investment. However, India is not immune to global trade headwinds and faces its own set of challenges, including uneven rural demand and sector-specific slowdowns, particularly in technology and real estate. The critical structural task of generating quality employment to harness its demographic advantage also remains.

Overall, India Rs s outlook is defined by optimism and resilience, but achieving broad-based, long-term growth will require continued reforms, prudent policy actions, and a consistent focus on job creation and skill development, ensuring that the country remains on a path of inclusive and sustained progress even as the global environment evolves.

Internal control systems and adequacy

The Company has a strong internal control systems and best-in-class processes in place, commensurate with its size and scale of operations. There is a well-established Management Audit comprising of professionally qualified accountants. They implement extensive audit throughout the year across all functions and areas. After carrying out the audit, they submit reports to the Management and Auditors. Committee about the compliances with internal control, and efficiency and effectiveness of operations and key processes risks. Some key features of the Company Rs s internal control system are:

Adequate documentation of policies and guidelines

O Internal Audit processes

© Strong compliance management system

© Internal Audit executed in accordance with auditing standards to review design effectiveness of internal control systems and procedures to manage risks, monitoring control, compliance with

© relevant policies and procedures and recommend improvement in processes and procedures.

Financial and Operational Performance Consolidated Financial Results

In FY 2024-25, the Company Rs s consolidated total income for the year was increased to Rs 25,368.51 Lakhs from Rs 24,604.52 Lakhs in the previous FY 2023-24 by registering growth of 3.11%. The consolidated profit before tax for the current fiscal was Rs 1,156.32 Lakhs as compared to Rs 2,130.09 Lakhs in the previous FY 2023-24. The consolidated profit after tax for the year was Rs 945.34 Lakhs decreased from Rs 1,628.48 Lakhs in FY 2023-24.

Standalone Financial Results

In FY 2024-25, the Company Rs s standalone total income for the year was Rs 25,366.36 Lakhs as compared to Rs 24,592.44 Lakhs in FY 2023-24 by registering growth of 3.15%. The standalone profit before tax for the current fiscal was Rs 1,147.31 Lakhs as compared to Rs 2,090.05 Lakhs in the previous FY 2023-24. The standalone profit after tax for the year was stood at Rs 936.31 Lakhs, down from Rs 1,588.65 Lakhs in FY 2023-24.

Key Financial Ratios

S , r . Particulars No.	FY 202425		FY 202324		Change (%)		Reason for Variance
1 Current Ratio	34.49		5.38		541.68		The Current Ratio improved during the year, mainly driven by a reduction in current liabilities, which was largely attributable to a decrease in working capital borrowings from the bank.
2 Debt Equity Ratio	0.01		0.08		(88.24)		The Debt-Equity Ratio indicates the extent to which the Company \u2019 s assets are financed by debt compared to shareholders \u2019 equity. The decline in this ratio is primarily due to the reduction in working capital borrowings from the bank.
3 Debt Service Coverage Ratio	33.85		5.06		568.52		The Debt-Service Coverage Ratio (DSCR) reflects the Company \u2019 s ability to generate sufficient cash flows to meet its debt obligations. The rise in earnings during the year has strengthened the Company \u2019 s liquidity position, enhancing its capacity to service debt on time.
4 Return on Equity		6.68%		4.34%		53.79		Return on Equity (ROE) indicates the Company \u2019 s efficiency in generating profits from shareholders \u2019 funds. The improvement in ROE during the year is driven by higher returns, primarily resulting from increased gains on the sale of fixed assets.
5 Inventory Turnover Ratio		18.55		15.17		22.30		Enhanced due to more efficient inventory utilization -lower average inventory alongside marginally higher cost of goods sold.
6 Trade receivable Turnover Ratio		23,153.48		81.10		28,448.05		The Trade Receivables Turnover Ratio evaluates the efficiency with which the Company recovers outstanding dues from customers. An increase in the ratio indicates enhanced collection performance compared to the previous year.
7 Trade payable Turnover Ratio		883.61		396.38		122.92		The Trade Payables Turnover Ratio reflects the Company \u2019 s effectiveness in managing and settling its obligations to suppliers. The rise in the ratio indicates improved efficiency in creditor payments compared to the previous year.
8 Net capital Turnover Ratio		1.35		1.24		8.62		Slight improvement driven by reduced average working capital, pointing to more effective use of capital in revenue generation.
9 Net Profit Ratio		11.1%		6.94%		58.77		The Net Profit Ratio indicates the portion of revenue that remains as profit after accounting for all expenses, including interest and taxes. The increase in this ratio is primarily due to higher operational revenue and gains from the sale of fixed assets compared to the previous year.
10 Return on Capital Employed		7.21%		5.22%		38.15		This ratio reflects the Company \u2019 s efficiency in generating profits from its capital employed. The improvement in the ratio is attributed to higher trading profits and a reduction in working capital borrowings from the bank.
11 Return on Investment		4.55%		7.46%		(38.98)		Return on Investment (ROI) is a key profitability indicator used to evaluate the efficiency of an investment. The decline in the ratio is primarily due to an increase in the investment base compared to the previous year.
12 Operating Profit Ratio		12.13%		9.41%		28.82%		The Operating Profit Ratio measures the profitability derived from a Company \u2019 s core operational activities. An increase in this ratio reflects improved operational efficiency in generating profits from routine business functions.

*Note: Profit used in calculating the profitability ratios is adjusted for exceptional item due to its unusual and non-recurring nature.

Cautionary statements

Statements in this Report, those which relate to the Management Discussion and Analysis, describing the Company Rs s objectives, projections, estimates and expectations, may constitute Rs forward-looking statements Rs within the meaning of applicable laws and regulations. The Company Rs s actual

results and achievements may differ from those expressed or implied. Several factors that could significantly impact the Company Rs s operations include economic conditions affecting demand, supply and price conditions in the domestic and overseas markets, changes in the Government

regulations, tax laws & other statutes and other such incidental factors, over which the Company does not have any direct control. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.