National Plastic Technologies Ltd Management Discussions

The Management Discussion and Analysis Report sets out developments in the business environment and the Companys performance. The analysis supplements the Boards Report, which forms part of this Annual Report.

Economy Overview

The Indian Economy has grown by 6.50% in fy 2024-25 which is one of the strongest growth compared to other major economies. Also, India is enjoying very stable macro-economic conditions which enables us to grow at very healthy rates over the next few years. Various sectors of the economy have also registered a healthy growth last year as a result of increased GDP growth.

Plastics Industry Scenario and Development

The Indian plastic industry is expected to grow from USD 49.50 billion in 2025 to USD 67.82 billion by 2030, at a CAGR of more than 6.50% p.a. The plastic industry in India is one of the most important industries in the countrys economy. Per capita plastic consumption in India is around 15 kgs and India is the 3rd largest consumer of Plastics in the World. The sector has become one of the prominent Industry in the nations economy, containing over 30,000 companies & employing more than 4 Mn people. India is also one of the worlds best exporters of plastics products. The country produces & exports a range of raw materials, laminates, electronic equipment, medical ware, & consumer goods.

Indian plastics industry also delivers plastic materials to many other industries such as automotive, consumer durables, packaging, & electronics. Over the past few decades, the demand for Plastic has increased by over 8 percent yearly. Asimilar growth rate is anticipated to continue for the foreseeable future, as the per capita consumption of plastics will certainly increase due to the use of plastic in more & more segments, opening new markets & substituting traditional materials. Meanwhile, major investments are also estimated in the Indian plastics industry during the forecast period, owing to its rapidly expanding market size. The plastic industry in India is one of the fastest rising segments which is estimated to rise further owing to increasing demand for inexpensive packaging.

The Indian Auto Component Industry

The auto component industry is expected to grow to $ 200 billion by 2026. With a 20.1 % contribution to the manufacturing GDP, the automotive sector is a top driver of macroeconomic growth and technological development in the country. India has become the fastest-growing economy in the world in recent years. This fast growth, coupled with rising incomes, a boost in infrastructure spending and increased manufacturing incentives, has accelerated the automobile industry. The two-wheeler segment dominated the automobile industry because of the Indian middle class. Significant demand for automobiles also led to the emergence of more original equipment and auto components manufacturers. As a result, India developed expertise in automobiles and auto components, which helped boost international demand for Indian automobiles and auto components. Hence, the Indian automobile industry has a considerable impact on the auto component industry. Indias auto component industry is an important sector driving macroeconomic growth and employment. The industry comprises players of all sizes, from large corporations to micro entities, spread across clusters throughout the country. The auto components industry accounted for 2.3% of Indias GDP and provided direct employment to more than 1.5 million people. The industry is a leader in exports and provides jobs to over 3.7 crore people.

The Indian Consumer Durable Industry

The consumer durable industry in India is one of the major growth industries. India is the fifth-largest consumer durables market The demand for a wide range of consumer durable goods is growing as a result of the ongoing increase in disposable income and technological innovation in India. This in turn is fueling fierce competition among the various consumer durable brands that are available across the country. India is viewed by multinational organizations as one of the primary markets from which future growth Is likely to originate. With robust growth, India aims to achieve electronics manufacturing worth US$ 300 billion and electronics exports of US$ 120 billion within the next few years.

The consumer durables industry is poised to thrive by staying premium and sustainable. Industry leaders and experts emphasise that premium, feature-led products, incorporating cutting-edge technology and sustainability, will be the key growth drivers. Consumers are increasingly drawn to products that are manufactured locally, aligning with the Make in India initiative. Brands are responding to this demand in a competitive industry, working towards delivering products that not only meet but exceed customer expectations.

Company Overview & State of Affairs

During the year 2024-25, the Company has posted a good revenue and profit growth despite several challenges like competition, volatility in commodity prices, high interest rates, global uncertainty, etc. The Company expects growth to continue over the next few years. Usage of plastic products in Automotive and Consumer Durable industries is rising due to its advantages in designing, cost reduction, and weight reduction. Further, the Industry itself is growing at a good pace thus creating opportunities for the Company. The Company is predominantly into manufacture of products for Automotive and Consumer Durable industries and is already a major supplier of plastic products to the above mentioned industries. Also, the rising adoption of EVs presents a great opportunity for the Company to increase its volume and provide value added products to the EV manufacturers especially, the two wheeler manufacturers. The Company has already started supplies for EVs to two wheeler manufacturers and expects to grow in this segment over the next few years. The Company is well positioned to capitalize on the opportunities over the next few years and is constantly in discussion with OEMs and other Tier-1 players so as to add new customers.

PESTLE ANALYSIS:

Political Factors:

The countrys political environment, both at the Central & States level, is relatively stable, and hence, unlikely to have a negative impact on the prospects of the Company.

The Company is not involved in, and not dependent on any Political influence for the Companys vision. Moreover, the Company adheres to highest levels of compliance in all areas, hence, it will not affect the companys prospects in the context of political factors.

Economic Factors:

Central & respective state governments, through various Macro Economic policies in the country have transformed the nations Economy. Over the last few years, the Government has rolled out policies and initiatives such as Atmanirbhar Bharat, Digital India, Aadhaar, UPI, Direct Benefit Transfer to all citizens of India, etc. These are some examples of policies that have, and will, continue to tremendously increase economic growth of the country, which will consequently lead to a consumption-based economy, with sustainable domestic demand. Additionally, Companys plants are strategically located to ensure easy access to various modes of Transportation.

Social Factors:

The Countrys average age is about 28 Years. Various Corporate and Government policies are focused on education and skill development in the country. This is a highly positive indication that India will prosper at the Global stage and cater to the worlds requirements.

The Company maintains a Zero Discrimination policy with respect to Age, Caste, Gender, Religion or Physical Disability. Employment is based purely on an individuals Capability.

Technological Factors:

The Company has built strong capability internally, through its internal team to upgrade Machines and Technologies.

We are continuously adopting new technologies, based on the customer requirements like, hot foiling, ultrasonic welding, Blow molding, Robot Welding etc.

Legal Factors:

All our Plants are fully compliant with Statutory and Regulatory requirements. There are no major pending / open litigations against the company.

Environmental Factors:

All of the Companys plants are located in highly Industrialized areas. Hence, the overall Eco System and working environment is conducive, with the added advantage of better manpower availability.

The Company has been sourcing Wind & Solar power for its energy requirements and is also investing in Solar power plants. The Company is also focused on reducing energy consumption through installation of power saving devices.

SWOT ANALYSIS

STRENGTHS	WEAKNESSES
? 70+ Years of Excellence In Plastic Molding as a group.	• Speed of Technology Upgradation
	• Relatively Lesser aggression towards growth in the past
Strategically Located Customer Focused Plants
	• Work environment, (5S Implementation)
• Investments Ahead of the Curve
	• Lack of in-house tool manufacturing facilities
• Success In Sustaining Relationships Spanning Decades
• Strong Credibility and Trust Built Over Decades
OPPORTUNITIES	THREATS
R&D Centre	• Increase in operation costs
• Painting	• Fluctuation in Commodity Prices
• Exports	• Retention of Trained and Skilled manpower
• GovernmentTenders Current Market Share Increased Adoption of plastics in EV • Automation	• Increasing Competition

Business Outlook

Current low per capita consumption level of plastic products as compared to developed countries suggests that India offers a huge opportunity over long term. Company has ample opportunities to grow by producing more products to meet the demand and achieve growth.

Discussion on financial performance, Internal control systems and their adequacy, risks and concerns and developments in Human resources/ Industrial Relations are given elsewhere and forms part of the Directors Report.

Key Financial Ratios:

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor,

Particulars of Ratio	F.Y. 2024-25	F.Y. 2023-24	Change in %	Reason (if more than 25% change)
Debtors Turnover Ratio	6.30 times	6.24 times	1%	Not Applicable
Inventory Turnover Ratio	7.35 times	6.87 times	7%	Not Applicable
Interest Coverage Ratio	3.13 times	3.20 times	-2%	Not Applicable
Current Ratio	1.04 times	0.99 times	5%	Not Applicable
Debt Equity Ratio	1.16 times	1.35 times	-15%	Not Applicable
Operating Profit Margin %	8.14%	8.51%	-4%	Not Applicable
Net Profit Margin %	2.91 %	3.13%	-7%	Not Applicable

Details of any change in Return on Net Worth as compared to the immediately previous financial year.

Particulars	F.Y. 2024-25	F.Y. 2023-24
NetWorth
Share Capital (A)	607.83	607.83
Reserve & Surplus (B)	4530.43	3700.57
Net Worth (A+B)	5138.26	3536.70
Profit after Tax	902.72	841.65
Return on Net Worth	17.57%	23.81%

Note: Due to high base and reduced margin, the Return on networth has decreased. Cautionary Statement

Statement made herein describing the Companys expectations or projections are "Forward looking statements". The actual results may differ materially from those expected or forecast depending on market conditions, input costs, economic development, Government policies and other external factors.