Pacific Industries Ltd Management Discussions

The Management of Pacific Industries Limited is pleased to present the Management Discussion and Analysis Report for the financial year ended March 31, 2025. This report provides an overview of the Companys business environment, industry structure, economic developments, opportunities, challenges, and future outlook. It forms an integral part of our corporate governance disclosures.

GLOBAL ECONOMY 2024

During CY 2025, the global economy maintained a stable growth trajectory, expanding by 3.4% supported by resilient consumer demand, sustained expansion in the services sector and continued investments across technology- intensive industries. Economic activity remained relatively steady across major regions despite persistent external headwinds and evolving global macroeconomic conditions.

The operating environment, however, became increasingly complex amid intensifying geopolitical developments and a gradual shift in global trade policies towards strategic and national security priorities. Expansion in advanced economies moderated to 1.9%, while Emerging Market and Developing Economies (EMDEs) recorded stronger growth of 4.4%. International trade flows continued to be affected by supply chain realignment and ongoing trade frictions, while regional conflicts contributed to volatility in commodity and energy markets. Elevated energy prices and disruptions across supply networks intensified inflationary pressures and increased operating costs globally.

As a result, the global economy entered a period marked by heightened uncertainty, persistent inflationary concerns and supply- side constraints, even as technology- driven investments and domestic demand continued to support overall economic activity.

INDIAN ECONOMY AND OUTLOOK

India continued to demonstrate strong economic resilience during FY 2025- 26, supported by robust macroeconomic fundamentals and sustained domestic demand. Real GDP growth stood at 7.7% compared to 7.1% in FY 2024- 25, reflecting strengthening economic momentum despite global uncertainties. Growth was primarily supported by private final consumption expenditure and improving investment activity, while revisions in national accounts methodology and greater use of high- frequency indicators enabled a more comprehensive assessment of economic performance.

Infrastructure development and manufacturing expansion remained central to Indias long- term growth strategy. As of March 2026, more than 1,900 central sector infrastructure projects, involving investments exceeding 41 lakh crore, were under various stages of implementation. A significant proportion of these projects is concentrated in transport, logistics, energy and communication sectors, with the objective of improving connectivity, industrial efficiency and supply chain integration. The Government also continued to strengthen manufacturing competitiveness through increased focus on strategic and frontier industries, capital goods, advanced manufacturing ecosystems and critical minerals development. These initiatives are expected to support domestic industrial capabilities, enhance supply chain resilience and reinforce Indias position in global manufacturing value chains.

Indias industrial and manufacturing sector continued to witness steady expansion, supported by policy- led initiatives, improving production activity and resilient export performance. Merchandise exports increased by 2.52% year- on- year to USD 184.13 billion during April- August 2025, while the Index of Industrial Production (IIP) recorded growth of 3.5% in July 2025, led by 5.4% increase in the manufacturing sector. Government initiatives such as the Production Linked Incentive (PLI) scheme, PM MITRA and the National Manufacturing Mission continued to strengthen Indias manufacturing ecosystem, capacity creation and industrial competitiveness.

OUTLOOK

The global economic has moderated amid persistent geopolitical tensions and evolving trade dynamics, with growth expected to remain stable, albeit below historical averages. Global GDP growth is projected at 3.1% in CY 2026 and 3.2% in CY 2027, reflecting the combined impact of supply- side constraints, cautious investment activity and evolving financial conditions. Global inflation is expected to remain elevated at 4.4% in CY 2026 before moderating to 3.7% in CY 2027, indicating the persistence of near- term inflationary pressures across major economies.

The outlook continues to face downside risks arising from prolonged geopolitical conflicts, trade fragmentation and volatility in energy and commodity markets, which may disrupt global supply chains and economic activity. Under adverse conditions, global growth could moderate further to nearly 2.5%, accompanied by higher inflationary pressures, while severe disruptions could weaken growth closer to 2%. Overall, the global economy is expected to sustain moderate growth amid elevated uncertainty, persistent inflationary concerns and ongoing geopolitical challenges.

GLOBAL GRANITE STONE INDUSTRY

Granite is a naturally occurring igneous rock composed primarily of quartz, feldspar and mica, recognised for its granular texture, durability and aesthetic characteristics. Owing to its strength, resistance to weathering and availability in varied colours and patterns, granite is extensively used in countertops, flooring, wall cladding and monument construction. Its combination of structural durability with visual appeal has positioned granite as a preferred material across residential and commercial applications, particularly in projects requiring long- lasting and premium surface finishes.

The global granite market was estimated at approximately USD 4.20 billion in CY 2025 and is projected to reach USD 7.73 billion by CY 2036, reflecting a CAGR of 5.7% during the forecast period. Asia Pacific continues to dominate the global market, accounting for over 50% of total demand, while granite slabs represent the largest product category and countertops remain a key application segment.

Growth in the global granite industry is being supported by rising urbanisation, expansion in residential housing and increasing commercial and infrastructure development, particularly across emerging economies. Demand for natural, durable and aesthetically appealing surface materials continues to increase across interior design, renovation and premium construction projects. In addition, advancements in quarrying and stone- processing technologies are improving product quality, operational efficiency and production capabilities. Large- scale infrastructure developments such as airports, metro systems and hospitality projects are also contributing to sustained industry growth.

INDIAN GRANITE STONE INDUSTRY

India is one of the leading producers and exporters of granite globally, supported by extensive geological reserves and a diverse range of high- quality stone varieties. The country possesses extensive deposits across multiple states, offering a wide spectrum of colours and textures that cater to varied architectural and construction requirements. Indian granite is widely utilised across applications such as flooring, cladding, countertops and monuments, serving both domestic and international markets. The industry benefits from a strong base of skilled labour, established quarrying practices and a well- developed processing ecosystem.

The Indian crude granite market has remained relatively stable over the long term, with a CAGR of 3.3% in value terms over the past five years. Imports stood at approximately USD 12.17 million in 2024, marginally lower than USD 12.63 million in 2023, reflecting a decline of 3.64%. During January- September 2025, imports declined further to USD 6.3 million from USD 8.47 million in the corresponding period of the previous year, registering a contraction of 25.62%.

The industry continues to operate within a competitive and regulated environment, characterised by strong domestic production and relatively limited reliance on imports. While long- term demand fundamentals remain stable, recent trends indicate short- term moderation arising from lower import demand and evolving supply dynamics. High import tariffs and strong domestic competition remain key structural factors influencing the market, while shifting trade patterns and the emergence of new suppliers are reshaping sourcing strategies. Overall, the sector continues to be supported by domestic demand, established operational capabilities and Indias strategic position within the global natural stone market.

INDIAN QUARTZ INDUSTRY

Quartz is a naturally occurring mineral composed primarily of silicon dioxide, recognised for its strength, durability and resistance to heat and corrosion. It is extensively used across the construction sector, engineered surfaces and a range of advanced industrial applications. Quartz also serves as a critical raw material in the production of silicon used in semiconductors, solar panels and other high- tech products. High- purity quartz holds strategic importance within the global technology ecosystem due to its application in the manufacture of silicon wafers and specialised components used in electronics and renewable energy systems.

The global quartz market size was valued at USD 8.4 billion in 2025 and is projected to reach USD 12.7 billion by 2034, exhibiting a CAGR of 4.72% during 2026- 2034. The market is driven by rising demand in the construction sector, increasing adoption of quartz in automotive components and expanding applications across electronics and advanced manufacturing industries. Asia- Pacific region accounted for the largest market, contributing more than 45% of total demand. The region continues to remain a significant growth hub for the industry, propelled by the regions rapid urbanisation and industrialisation, especially in countries such as China and India. These developments have led to increased demand for construction materials, where quartz is preferred for its durability and aesthetic appeal. Growth in both residential and commercial infrastructure projects is further supporting demand for of quartz surfaces and tiles.

GLOBALQUARTZINDUSTRY

The global quartz market is primarily segmented by product type into quartz surfaces and tiles, high- purity quartz, quartz glass, quartz crystal, quartz sand and other variants. Quartz surfaces and tiles constitute a significant segment due to their extensive application in construction and interior design, particularly in countertops, flooring and wall cladding. Their durability, low maintenance requirements and resistance to stains and scratches continue to support widespread adoption in residential and commercial application. High- purity quartz represents a critical segment, especially within advanced industries such as electronics and semiconductors, where it is utilised in the production of silicon wafers, crucibles and other high performance components.

Quartz glass, also referred to as fused silica, forms an important segment owing to its high thermal stability, chemical inertness and excellent optical transmission, making it suitable for laboratory equipment, optical devices, and industrial applications. Quartz crystal is extensively used in electronic devices, jewellery and specialised technological applications due to its piezoelectric properties. Quartz sand, commonly referred to as silica sand, is widely utilised in construction materials, glass manufacturing and water filtration systems due to its abundance and chemical stability. Collectively, these segments demonstrate the diverse industry applicability of quartz across construction, manufacturing, electronics, telecommunications and advanced technology sectors.

COUNTERTOPMARKETOVERVIEW

The global countertop market has been witnessing steady growth, supported by sustained demand from both residential and commercial sectors. The market size was valued at approximately USD 157.74 billion in 2025 and is projected to reach USD 267.38 billion by 2033, expanding at a CAGR of 6.8% during the forecast period. This growth is closely linked to long- term trends such as rapid urbanisation, expansion in housing development and increasing commercial construction activities. Additionally, evolving consumer preferences towards modern interior design and driving the demand for aesthetically appealing and functionally efficient countertop materials.

From a material perspective, granite continues to account for a significant share of the global countertop market due to its durability and widespread acceptance. However, engineered quartz is emerging as the fastest- growing segment, driven by its superior performance characteristics, design flexibility and low maintenance requirements. Demand for quartz surfaces is particularly evident in kitchen and bathroom applications, where consumers prefer materials that combine visual appeal with functionality. This shift reflects a broader trend towards high- quality, durable and easy- to- maintain materials across both residential and commercial end- use segments.

Regionally, Asia- Pacific dominates the global countertop market, driven by rapid urbanisation, population growth and rising construction activity in countries such as China and India. North America and Europe also represent significant markets, supported by strong demand for home renovation, remodelling and premium interior solutions. Across regions, the market continues to benefit from rising investments in residential and commercial infrastructure, along with a growing preference for visually appealing and long lasting materials. Overall, the global countertop industry is expected to maintain steady growth, supported by continued construction activity and evolving interior design preferences.

INDIANCOUNTERTOPMINDUSTRY

Indias countertop market generated a revenue of approximately USD 11.86 billion in 2024 and is expected to reach around USD 25.07 billion by 2033, registering a CAGR of 8.7% during 2025- 2033. Granite remained the largest revenuegenerating material segment in 2024, while engineered quartz is projected to be the fastest- growing segment during the forecast period. India accounted for nearly 8.0% of the global countertops market revenue in 2024 and is expected to remain as one of the fastest- growing markets within the Asia- Pacific region

Growth in the Indian countertop industry is being driven by rising residential and commercial construction activity, increasing urbanisation and growing adoption of modular kitchens and modern interior solutions. Demand for durable, low- maintenance and aesthetically appealing surface materials continues to rise, supporting the increasing adoption of both traditional materials such as granite and advanced engineered surfaces such as quartz. Improving housing demand, infrastructure development and evolving consumer preferences towards premium interior finishes continue to support long- term market growth.

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Financial Result:-

	Standalone (F.Y.)
Particulars	2025-26	2024-25
Revenue from Operations and Other Income	15799.37	25,099.70
Less: Operating Cost	14286.29	22826.69
Operating Profit/PBDIT	1513.08	2273.01
Less: Interest & Finance Charges	399.01	631.67
Less: Depreciation & Amortization Expenses	965.12	1003.38
Profit Before Tax and Exceptional Items	148.95	637.96
Add: Exceptional items	-	-
Profit Before Tax	148.95	637.96
Less: Provision for Tax	-47.06	112.50
Less: Prior Period Adjustment	-	-
Profit After Tax	196.01	525.46
Total Other Comprehensive income	(12.74)	7.62
Total Comprehensive Income for the year	183.27	557.43

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a sound internal control system, which ensures that (a) its financial reports are reliable, (b) its operations are effective and efficient, and (c) its activities comply with applicable laws and regulations. The internal control systems are further supplemented by internal audit carried out by an independent Chartered Accountant and periodical review by the Management. The Internal Audit process is designed to review the adequacy of internal control checks in the system and covers all the significant areas of the Companys operations.

The Audit Committee of the Board of Directors reviews the adequacy and effectiveness of the internal control systems and tracks the implementation of corrective actions. Significant audit observations and corrective actions taken by the Management are presented to the Audit Committee. To maintain its objectivity and independence, the Internal Audit reports are submitted to the Chairman of the Audit Committee. Audit Committee plays a key role in providing assurance to the Board of Directors.

CSR ACTIVITIES

Your Company believes that as a responsible corporate citizen, it must address the needs of underprivileged and committed to serving them. The Company is keen to fulfill its social responsibility by being actively involved in a variety of public services projects. We encourage collaboration with various NGOs to support in CSR activities at group level.

HUMAN RESOURCES

The Company believes in making the optimum utilization of all the available resources, to achieve this, human power is highly important and thus the Company time over has been taking newer and effective initiatives for improving the human resource strength and creating a conducive and healthy work atmosphere.

The Company consider its Human Resource as the most valuable resource which has to be nurtured well and equipped to meet the challenges posed by the dynamics of business developments. The Company continuously provide training to its employees both in-house as well as through reputed Institutes. The staffs are highly motivated due to good work culture, training, remuneration packages and the values, which the Company maintains. The Board of Directors would like to record their appreciation of the efficient and loyal service rendered by the Companys employees.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE.

The Company achieved Revenues from Operations and Other Income (gross) of 15799.37 Lakhs during the financial year ended 31st March, 2026. The profit after tax 183.27 Lakhs during the year. The Management is confident of rebound in the economy and expect growth coming back in the ensuing years.

CAUTIONARY STATEMENT

Statement in this Managements Discussion and Analysis detailing the Companys objectives, projections, estimates, estimates, expectations or predictions are forward- looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand- supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations.

	By Order of the
	Pacific Industries Limited
	J.P. Agarwal
Place: Udaipur	Chairman & Managing Director
Date: August 26, 2026	DIN: 00386183