Murudeshwar Ceramics Ltd Management Discussions

Forming part of the Boards Report Economic Overview

Global GDP growth is expected to moderate from 3.2% in 2024 to 3.1% in 2025 and 3.0% in 2026, with higher trade barriers in several economies and increased policy uncertainty weighing on investment and household spending. Annual real GDP growth in the United States is projected to slow from its very strong recent pace, to 2.2% in 2025 and 1.6% in 2026. Euro area real GDP growth is projected to be 1.0% in 2025 and 1.2% in 2026, as heightened uncertainty keeps growth subdued. Growth in China is projected to slow from 4.8% this year to 4.4% in 2026 (Sources OECD Economic Outlook, Interim Report March 2025). Indias economy continues to demonstrate strong momentum and is projected to remain one of the fastest-growing major economies in 2025 and 2026. The Indian economy is also expected to grow at a rate of 6.20% in 2025 and 6.30% in 2026 respectively. The Indian economy is become the fourth-largest in the world, surpassing Japan in the year 2025. Despite global economic headwinds, Indias growth trajectory remains robust, driven by strong domestic demand, sustained public infrastructure investment, and a resil-ient services sector. However, external risks persist due to weaker global trade, tighter financial condi-tions, geopolitical uncertainties and trade tariff escalation.

About Industry Structure and Development

The industry manufactures various types of tiles for residential, commercial, and industrial applications like Ceramic Tiles, Vitrified Tiles, Porcelain Tiles, Glazed & Polished Tiles, Natural Stone Tiles etc. These tiles are applied as floor tiles, wall tiles, and others such as ceiling and roofing tiles etc. Technological advancement has emerged as a crucial differentiator in the Indian ceramic industry, with manufacturers investing heavily in state-of-the-art production facilities. The real estate sectors transfor-mation has substantially influencedthe ceramic tiles market, with the implementation of the Real Estate Regulatory Authority (RERA) fostering increased transparency and process orientation. The consumer preferences in the ceramic tiles market have evolved significantly, leading to innovative product developments and expanded offerings.

The Indian Tiles Market size was valued at USD 5.86 Billion in 2024. The Indian tiles industry is one of the largest in the world and has witnessed significant growth in recent years. India is the second-largest producer of ceramic tiles after China and is also a major exporter. The Indian tiles industry is poised for strong growth due to increasing urbanization, rising incomes, and government support. Despite challenges like competition and cost pressures, advancements in design and sustainability will keep the industry ex-panding in the coming years.

Outlook:

The Global Ceramic Tiles Market size was valued at USD 213.56 billion in 2024 and is projected to reach from USD 228.94 billion in 2025 to USD 399.28 billion by 2030, growing at a CAGR of 7.2% during the forecast period of 2025-2030. The Indian Tiles Market size was valued at USD 5.86 Billion in 2024 and the total Indian Tiles revenue is expected to grow at a CAGR of 9.49% from 2025 to 2030, reaching nearly USD 12.10 Billion in coming projected years.

The Indian ceramic tiles industry has experienced significant shifts in The implementation of anti-dumping duties by Gulf Cooperation Council (GCC) countries, which imposed a substantial 41% duty on Indian ceramic tile imports, has prompted manufactur-ers to diversify their export destinations. The industry has demonstrated remarkable resilience by develop-ing alternative markets and strengthening domestic capabilities, resulting in enhanced production infra-structure and quality standards to meet international requirements.

Opportunities and Threats:

The entry of retail establishments, including hypermarkets, supermarkets, and specialized shops increases the availability of numerous types of tiles, hence boosting the growth potential of this sector. The increasing investments in the infrastructure sector are expected to drive the growth of the tiles market. Govern-ments of different countries are investing in developing and upgrading infrastructure, including residential, commercial, and public properties like Airports, Railway Stations, Metro Rails etc. The developments have increased the demand for tiles - a vital construction material. The surge in infrastructure development has increased the need for high quality tiles, boosting the growth of the tiles market.

The fluctuation and increased natural gas price are the major because of supply chain constraints in different regions, geopolitical tensions, war sit-uations, trade tariff as initiated by USA, and the implementation of strict environmental regulations. Such scenarios lead to higher production costs. It is difficult for manufacturers to keep prices stable. Additionally, the increasing prices can squeeze profit margins, making it harder for firms to invest in new technologies and research.

Segment–Wise or Product-Wise Performance:

The financial performance and operational performance have been more fully described in the Boards Report. Shareholders may refer to the same in the Directors report and financial statements for further reference.

Segment	Sale of Products	Sale of Service
2024-25	13,810.46	6,430.70
2023-24	12,193.48	6,409.54

The sale of products has increased by 13.26% at Rs. 13,81.46 lakhs in compared to Rs. 12,193.48 lakhs of the previous year.

Sale of services has marginally increased by 0.33% at Rs. 6,430.70 lakhs in compare to Rs. 6409.54 Lakhs of the previous year.

Significant change in production plan:

The Company changes its production plan in accordance with the customers demand following with the market trends. The Companys vitrified tile product basket comprises various categories, including polished, glazed, double charged and full-body tiles. These tiles are mainly available in large format sizes, as per market tastes. Your CompanyemphasizestheGlazedVitrifiedTile (GVT) product, and in this direction, during the year under review, has produced high value GVT, PGVT Vitrified tiles in sizes at Sira plant and Wall tiles at Karaikal. As given below in the table.

Sizes	2024-25		2023-24
	Sq. Mtr.	% to total	Sq. Mtr.	% to total
30 x 30 cm	--	--	16	--
60 x 60 cm	12,76,028	28.12	11,91,614	30.13
60 x 120 cm	20,53,174	45.25	14,18,416	35.87
80 x 160 cm	64,103	1.41	6,907	0.18
Wall Tiles	11,44,116	25.22	13,37,727	33.82
T O T A L	45,37,421	100.00	39,54,680	100.00

Risks and concerns:

Risks are events or conditions that may occur, and whose occurrence, if it does take place, has a harmful or negative impact on the achievement of the organizations business objectives. The exposure to the consequences of uncertainty constitutes a risk. The industry is facing the risk such as high-cost raw material, stringent environmental laws, shortage of skilled labour, high competition, demand sluggish, high cost of distribution and other expenses. Further, the production of tiles is an extremely energy-intensive operation, electricity, gas, and transportation costs are the primary expense-related factors affecting the business. Consistency in power and fuel availability at reasonable costs is crucial for the growth of the ceramic tile sector. Unpredictable and unstable marketplaces have enormously negative outcomes, which are closely monitored by manufacturing groups. In addition, there is greater volatility in the pricing of unprocessed materials used to manufacture ceramic tiles.

Discussion on financial performance with respect to operational performance:

The financial performance and operational performance have been more fully described in the Boards Report. Shareholders may refer to the same in the Boards Report for further reference.

Total revenue from operation was Rs.20,286.37 lakhs for the year ended March 31, 2025 as against Rs. 18,630.83 lakhs for the corresponding previous period, an increased by 8.87% by Rs. 1655.54 lakhs. The earning before exceptional items and tax was Rs. 1194.95 lakhs for the year ended March 31, 2025 as against Rs. 1148.90 lakhs for the corresponding previous period.

Particulars	Financial year 2024-25		Financial year 2023-24
	Standalone	Consolidated	>Standalone	Consolidated
Total Income	20776.90	20776.90	19075.22	19075.22
Total Expenditure	19581.96	19581.96	17926.31	17926.31
Profit /(loss) before Tax Expense	1194.95	1194.95	1148.90	1148.90
Profit /(loss) after Tax Expense	992.44	992.44	512.76	512.76
Other comprehensive income	(23.72)	(23.72)	(26.69)	(26.69)
Total Comprehensive Income	968.73	968.73	486.07	486.07
Profit or (loss) from Associate	-	(8.49)	-	11.01
Total Comprehensive income	968.73	960.24	486.07	497.08
Earing Per share: Basis	1.60	1.59	0.84	0.86
: Diluted	1.60	1.59	0.80	0.82

Internal control systems and adequacy:

The Company has a proper and adequate system of internal controls in terms of Section 134(5)(e) of the Companies Act, 2013 and commensurate with its size, scale, and complexity of operations. These controls ensure transactions are authorized, recorded and reported correctly and assets are safeguarded and pro-tected against loss from unauthorized use or disposition.

The Company has established an effective internal control structure to enhance organizational performance and contribute to accomplishing its objectives. There are appropriate controls regarding policies and procedures, risk assessment, and ethics, which the Audit Committee periodically reviews and monitors the performance of the internal audits. This is conducted periodically through audit plans, findings, and through follow up.

Material development in human resources/ industrial relations:

The Company is committed to develop and nurture its employees talents by providing numerous opportunities to enhance their skills through continuous learning and development programs, which are closely monitored and analysed by the Human Resources

Team.

Further, the Company is committed to respect the talents, skills and capabilities of our people serving every day in our organization. Human Resource Department of your organisation has taken various initiatives for professional and personal development including health and safety and standard working environment for its employees during the year. The Company employed 309 employees across all locations as of March 31, 2025.

Details of significant changes in key financial ratios:

During the year under review, the followings are significant changes (i.e., changes of 25% or more as compared to the immediate previous financial year) in key financial ratios have been occurred. Please Financial Statements may be referred for more details.

Ratio	FY 2024-25	FY 2023-24	Variance in %	Remarks
Current Ratio	1.34	1.38	(11.36)	NA
Debt Equity Ratio	0.11	0.11	-	NA
Debt Service	1.43	1.32	8.33
				NA
Coverage Ratio
Return on Equity	0.03	0.01	(200.00)	There is an increase in profitability for the current year.
Inventory Turnover	1.81	1.59	13.84
				NA
Ratio
Trade receivables turnover ratio	7.12	11.33	(37.16)	The receivable is increase for the year.
Trade Payables turnover ratio	3.91	4.01	(2.49)	NA
Net capital turnover ratio	1.87	4.10	(54.39)	NA
Net Profit Ratio0.05	0.03	(66.67)	Increase in profitability
Return on Capital Employed	0.06	0.05	(20.00)	NA
Return on Investment	5.48	-0.59	-	NA

Details of any change in return on net worth as compared to the immediately previous financial year along with a detailed explanation thereof:

There are no major changes in return on Net Worth as compared to the immediately previous financial year except carry forward profit or losses. However, return on net worth was impacted due to higher profitability.

Disclosure of accounting treatment:

Your Company has been adopted "IndAS" since April 01, 2017. There are no changes in accounting treatments for the financial year ended March 31, 2025. The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS), the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by SEBI.

Cautionary statement:

Statements in this Management Discussion and Analysis Report contain "forward looking statements" including, but without limitation, statements relating opportunities, threats, outlook, forecasts etc. in any form and manner, made in this section or any other sections of this Annual Report are purely based on certain assumptions and expectation of future event, actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting domestic demand supply conditions, finished goods prices, changes in Government Regulations and Tax regime, etc.

	By order of the Board	By order of the Board
	For Murudeshwar Ceramics Limited	For Murudeshwar Ceramics Limited
	Sd/-	Sd/-
	Satish Rama Shetty	Naveen Rama Shetty
Place: Bengaluru	Chairman & Managing Director	Director
Dated: 29.05.2025	DIN: 00037526	DIN: 00058779
Registered Office:	Corporate Office:
Murudeshwar Ceramics Limited	Murudeshwar Ceramics Limited
CIN: L26914KA1983PLC005401	CIN: L26914KA1983PLC005401
Murudeshwar Bhavan, No. 604/B, Gokul Road,	Naveen Complex, 7th Floor, No. 14, M. G. Road,
Hubballi 580 030, Karnataka.	Bengaluru 560 001, Karnataka.
PH.: 0836 2331615 18,	PH.: 080 42897000,
E-mail: Investor@naveentile.com	E-Mail: cosec@naveentile.com