Milestone Global Ltd Management Discussions

The Management of Milestone Global Limited is pleased to present the following Management Discussion and Analysis Report which contains a brief write-up on the industry structure, opportunities and concerns, performance of the Company with respect to the operations other information.

This chapter on Management Discussion and Analysis forms a part of the compliance report on Corporate Governance.

Indian Economy and Industry Overview

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

In 2025, the Indian economy is projected to remain one of the fastest-growing major economies, with a GDP growth rate of 6.2% to 6.3%. India is anticipated to be the fourth-largest economy globally, surpassing Japan. This growth is supported by robust private consumption, particularly in rural areas, and government spending.

Indias GDP growth of 6.2% till Q3 FY2025 may raise eyebrows, especially when compared to the sharp 9.2% and 7.6% growth seen in the past two years. But look a little closer, and you will find this is not a sign of slowdown. It is probably a reset before a rebound. Temporary headwinds like election-led policy caution, and irregular rainfall in the first half, and global trade uncertainties since September 2024 muted momentum in the first three quarters of FY2025. The shadow of a high base is making this years growth look smaller than it truly is. But high-frequency indicators such as GST collections, auto sales, and FMCG growth are bouncing back, pointing to a strong domestic engine still humming underneath.

If a US India bilateral trade agreement comes through, it could flip trade headwinds into tailwinds, opening up market access and energising exports. But if global volatility persists, we may see a drag of -0.1% to -0.3%.

A scrutiny of IMF data indicated that Indias GDP growth rate in 2026 and 2027 would be, notwithstanding the individual size of the larger economies, higher than that of the U.S., China, Japan and United Kingdom, among others.

Granite Industry- Structure and Developments

Granite is being preferred over other stones due to its resistance to wear and tear as well as weathering which makes granite everlasting stone. India has one of the best granite deposits in the world having vast varieties comprising over 200 shades. India accounts for over 20% of the world resources in granite.

Splendid black and multi-colour varieties of granite are available in the states of Karnataka, Andhra Pradesh, Tamil Nadu and Uttar Pradesh. Granite deposits are also widespread over provinces of Rajasthan, Bihar, West Bengal and Gujarat.

India continues to be one of the leading countries in the production and export of granite and other stones. India has vast resources of granite with about 125 varieties of different colors and textures such as black, grey, pink, multi colored etc. These varieties are used to produce monuments, building slabs, titles, surface plates etc. About 125 varieties of granites have been identified for processing as products for exports. The deposits are widely spread over the entire country. However, popular varieties are mainly found in South India.

By general consensus, India and Brazil have been blessed by nature with the widest variety of the most beautiful granites. Yet, when it comes to processing facilities, their development has been way below the potential. The volatile nature of the Brazilian economy with lot of uncertainty over the last decade, has discouraged investment. The market share of China in the international trade in granite has been steadily increasing in recent years. Only China remains a threat to other countries in the manufacture and export of granite.

India is the worlds second-largest producer of granite, accounting for about one-fifth of the worlds total production. Granite is widely used in construction and building material industry as a decorative stone and flooring material due to its durability and aesthetic appeal. It also has uses in sculptures, monuments, kitchen countertops, vanity tops, bathroom fixtures etc. The growth of Indias real estate sector has been driving the demand for granite since last few years as it accounts for a major share of new construction projects and remodeling activities across residential and commercial sectors. Additionally, increasing consumer preference towards premium stones like marble & quartz over granite have further increased its demand among builders & consumers alike leading to positive outlook for India Granite Market during forecast period (2025-2031).

The Indian granite industry is facing increasing competition from other countries, such as China and Vietnam. These countries have lower labor costs and are able to produce granite products at a lower price. However, the Indian granite industry is still able to compete effectively due to its high-quality products and strong brand reputation.

The India Granite Market is projected to witness mixed growth rate patterns during 2025 to 2029. Starting at 14.72% in 2025, the market peaks at 15.27% in 2027, and settles at 13.88% by 2029.

Granites unparalleled aesthetic appeal and durable physical qualities are fueling the materials steady expansion in the global market. Granites market position has also been strengthened by improvements in availability and quality brought about by developments in quarrying and processing technology. Growing demand from the real estate and construction industries, especially as a result of fast infrastructure development and urbanization, is a major factor propelling the world-wide granite market. It is perfect for both indoor and outdoor applications because of its inherent strength and weather resistance.

Problems Related to Granite Mining Industry

? PRODUCTIVITY

The main problem of Granite Mining Industry in India is the low productivity and high wastage. The granite mining industry in India is far behind in terms of productivity compared to countries like Italy, Brazil, Spain, Norway, South Africa etc. The low productivity is mainly due to conventional methods of mining adopted at present.

? MODERNIZATION

The main obstacle for modernizing the quarry is high capital investments in modern mining equipment. Quarries are always under threat of closure due to license and environment issues, making it difficult for them to have long term vision. Investment in mining equipment can take several years to recover, stability and guarantee of continuity of operations is required to make these investments

? LABOUR MANAGEMENT

The low productivity per worker and less man-hour utilization is another problem for the granite quarrying in India. The lack of exposure to modern quarrying and training for the Indian workers is a major reason for the low productivity of the workers. It is high time that Government and the industry should work together to establish a Training Institute to educate and train the work force, which will help the mining industry to a great extent.

? LEASING POLICY

The Government should announce a long-term mining policy and stop frequent changes of leasing policies as adopted by various state Governments. Granite mining is a high-risk area where there is no guarantee on return on investment. The mining of a natural product requires a long period of time to develop the land and infrastructure and high investment for economical operations. Hence the leases of quarry lands should be on long-term basis of minimum of 30 years as in other countries where it is normally ranging from 30 to 90 years. It is impossible for anyone to invest in machines and modernize the quarry in the absence of long time leasing.

? EXPLORING NEW AREAS

As per the geological survey, India has a vast area of abundant granite deposits of various colours that are still to be explored. The government should encourage entrepreneurs to explore the new areas on recommendations as stated above. Every effort should be taken by both the government and the granite industry to improve the countrys share in the world market by exploring new areas.

The government should also guarantee free trading without imposing any restrictions on exports of blocks.

? SIMPLIFICATION OF PROCEDURES

The procedures of lease agreements, permits for movement of blocks, payments of royalty etc., must be simplified. Most of the times the dispatches are held up due to delay in getting the permits and particularly during holidays, strike etc. Since highly valuable goods are presently allowed on self-removal scheme, the granite blocks can also be allowed under the same scheme in place of the present permit system.

Problems Related To Granite Processing Industries

? INFRASTRUCTURE DEVELOPMENT

The existing infrastructure to meet the needs of the stone sector in India is extremely poor and inadequate for the growing demand. The infrastructure facilities like road, rails, electricity services, water sources need to be improved.

The movement of either the blocks from the quarries or the containers from the factories to the ports is always cumbersome. Quarry access roads are still not developed which restricts the sizes and the movements of the blocks. Even the highways are not sufficient for easy movement of trucks.

The infrastructure is the backbone for any industry to operate economically and compete in the world market. Unless proper facilities are created for smooth traffic and movement of materials, further development will not be possible

? AVAILABILITY OF BLOCKS

The major problem highlighted by the processing industries is the non-availability of best quality blocks for the processing. The first quality blocks, which are free from defects and larger in size, are always given preference for exports. Hence the local processing factories have to depend on smaller size blocks, which resulted in high processing wastage, higher production cost and thereby, high selling price. This is one of the reasons for the less competitiveness of finished products in the world market. It must be the aim for both government and the industry to expand the processing capacity of the country to get more value addition.

? MODERNIZATION AND UPGRADATION OF PROCESSING TECHNOLOGY

The consistent modernization of the factory and upgrading of the processing technology by installing new machines will improve the productivity and reduce production cost.

The major threat areas include:

1. Container shortage and global shipping crisis

2. Non-Availability of best quality blocks for processing.

3. Frequent power disruptions and high dependency on diesel affecting the production and the cost of raw materials and finished goods.

4. Lack of proper infrastructure.

5. Lack of skilled labor.

6. The granite industry is a major source of environmental pollution. The mining and processing of granite can lead to air and water pollution, and the disposal of granite waste can also cause environmental damage.

Prospects For The Granite Industry

In North America and Europe consistent quality control, and prompt deliveries to the buyers are very important to procure more orders and stay in business, new products with new design should be developed by constant up gradation of existing technology to sustain growth.

The following factors are motivating the growth of granite industry

1. Introduction of Stones for new applications and utilities etc.

2. Spurt in demand for Indian Granites Worldwide.

3. Increased domestic demand.

Technologies advances and market competition has changed the basis feature of the industry the margins it works with. While granite has an image of a luxury product, in the production side, the processing industry has changed from being a low volume high margin one to a low margin high volume business.

? The future for the granite industry for both blocks and finished products is encouraging. India can improve its export performance as the processing capacity is very low, with less than 8% of gangsaws installed in the world. The increase in export of blocks and finished products during the last year is an indication of the encouraging signs of market improvement. In spite of so many problems, the demand for granite products is increasing everywhere with consistent growth rate of consumption.

? India, which is blessed with various types of unique colours and large deposits of granite, is certain to get its due share in the ever-growing world market. Many countries are worried about the strong entrance of China in the market but the fact is that China landed up importing more rough blocks and finished products due to high domestic demand.

? The worldwide improvement of transportation system with more and more bulk vessels will also help many countries to import more thereby boosting our exports.

Internal Control Systems and Their Adequacy

The Company has adequate system of internal control relating to the purchase of raw materials, Stores, Consumables and Packing Materials, and for the sale of goods commensurate with the size of the Company and the nature of business.

The system of internal control of the Company is adequate keeping in mind the size and complexity of your Companys business. Systems are regularly reviewed to ensure effectiveness.

The Audit Committee of the Company meets periodically to review and recommend quarterly, half yearly and annual financial statements of the Company.

Discussion On Financial Performance with Respect to Operational Performance

The Turnover achieved by the Company for the year ended 31.03.2025 is Rs 1220.32 Lakhs as compared to the Previous Year turnover of Rs 1510.09 Lakhs. The decrease in turnover is 19.19% over the previous year.

The Company earned a profit before tax of Rs. 38.71 lakhs as compared to the previous years profit before tax of Rs.87.96 lakhs. The profit before tax has decreased by 55.99% over the previous year. The net profit after tax is Rs. 28.28 lakhs as compared to the previous years profit after tax of Rs. 65.13. The net profit for the year decreased by 56.58%.

The profitability of the Company has decreased considerably over the previous year. The reason for this decrease in profitability is the decrease in the turnover by approximately 20%. The Company endeavors to maintain a sustainable cut off vis a vis its turnover in every financial year. However, during the financial year under review, the turnover suffered a hit as one of our biggest customers sold off its business. Also, new customers are not keen on buying in such volumes to keep up the turnover threshold intact. We are trying to explore the Europe and UK markets to cover up for this and planning to sell directly through our subsidiary in the US. We are trying to sell more in the coming years and hoping that the turnover will come back to its original pace in the next 2 to 3 years.

The Company is otherwise doing good in Europe and UK markets and we are hopeful to keep up this pace and do even much better in the coming years.

Human Resources / Industrial Relations

The overall relation with employees has been cordial. The management has been striving to maintain the harmonious relations and has always looked after its human resources well.

Cautionary Statement

Statement in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable securities laws and regulations.

As forward-looking statements are based on certain assumptions and expectations of future events over which the Company exercises no control, the Company cannot guarantee their accuracy nor can it warrant that the same will be realized by the Company. Actual results could differ materially from those expressed or implied, significant factors that could make a difference to, the Companys operations include domestic and international economic conditions affecting demand, supply and price conditions in the industry the Company into, changes in government regulations, tax regimes and other statutes.

Details of Significant Changes in Key Financial

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, 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.

The Company has identified the following ratio(s) as key financial ratio(s):