Pee Cee Cosma Sope Ltd Management Discussions

1. Industry Structure and Developments

The Indian soap and detergent industry is one of the largest in the world, driven by rising population, increasing disposable incomes, growing awareness of hygiene, and expanding rural demand. The market is broadly segmented into:

• Personal Care (Bath & Toilet Soaps)

• Fabric Care (Detergent Powders, Cakes, and Liquids)

• Household Cleaning Products

The sector has witnessed significant shifts towards premiumization, eco-friendly products, herbal/ ayurvedic offerings, and liquid detergents. Government initiatives promoting Swachh Bharat Abhiyan and hygiene awareness continue to support industry growth.

Global volatility in crude oil (a key raw material for surfactants), palm oil prices, and packaging costs have impacted margins. Companies are increasingly focusing on automation, sustainable packaging, digital distribution channels, and D2C models.

2. Opportunities and Threats Opportunities

• Expanding rural penetration supported by government schemes and rising disposable income.

• Growth in e-commerce and direct-to-consumer platforms.

• Increasing demand for eco-friendly, herbal, and antibacterial products.

• Export potential in developing economies in Asia and Africa.

Threats

• Intense competition from MNCs and regional brands leading to price wars.

• Fluctuations in raw material prices (palm oil, LAB, soda ash, fragrances, packaging).

• Changes in consumer preference towards natural/organic products.

• Regulatory challenges relating to environmental and quality compliance.

3. Segment-Wise or Product-Wise Performance

The Company operates primarily in two business segments:

1. Laundry Soap - Contributed 27.41% of total revenue in FY 2024-25. The premium soap and liquid body wash categories recorded higher growth, supported by increasing urban demand.

2. Detergent Powders and Cakes - Contributed 72.59% of total revenue. The Companys flagship detergent brand maintained strong rural and semiurban presence, though margin pressure continued due to higher raw material costs.

4. Financial Performance with respect to Operational Performance

(Amount in Lakhs)

Particular	Standalone
	Current Yr. 31.03.2025	Previous Yr. 31.03.2024
Net Revenue from Operation	14059.23	13364.31
Other Income	173.99	60.34
Total Income	14233.22	13424.65
Total Expenditure	12942.61	12019.19
Profit before tax	1290.61	1405.46
Provision for tax	329.68	361.09
Profit after tax	960.93	1044.37
Dividend on Equity Shares (excluding tax on distributed profits)	79.39	132.31
Transfer to General Reserve	-
Paid-up Share Capital	264.63	264.63
Reserves and Surplus (excluding revaluation reserve)	4592.46	3763.84

Growth was primarily driven by premium products and expansion in rural markets, while margin pressure was witnessed due to higher input costs. Strategic cost optimization and supply chain efficiency initiatives partially offset inflationary pressures.

5. Outlook

The outlook for FY 2025-26 remains positive, supported by strong demand in both rural and urban markets. The Company aims to:

• Strengthen its premium product portfolio.

• Focus on sustainability through biodegradable detergents and recyclable packaging.

• Enhance digital and e-commerce presence.

I • Expand exports to emerging markets.

• Invest in R&D for innovative formulations and cost-effective manufacturing.

6. Risks and Concerns

Key risks faced by the Company include:

• Raw Material Price Volatility - Dependency on imported palm oil and crude-based inputs.

• Competition Risk - Aggressive pricing by domestic and multinational players.

• Regulatory Risk - Compliance with environmental and chemical usage regulations.

• Operational Risk - Supply chain disruptions and dependency on third-party distributors.

• Consumer Preference Risk - Shift towards herbal and organic alternatives.

The Company has instituted a robust risk management

framework to monitor, evaluate, and mitigate these

risks.

7. Internal Control Systems and Their Adequacy

The Company has a well-defined internal control framework, commensurate with the size and nature of its business. Controls are regularly reviewed by the Internal Audit team and monitored by the Audit Committee of the Board. The system ensures accuracy of financial reporting, safeguarding of assets, compliance with statutory requirements, and operational efficiency.

8. Human Resources and Industrial Relations The Company regards its employees as its most valuable asset. As on March 31, 2025, the Company employed 314 permanent employees across manufacturing, sales, and corporate functions.

HR initiatives during the year included:

• Regular training programs on safety, hygiene, and skill upgradation.

• Performance-driven appraisal and incentive mechanisms.

• Employee engagement and welfare programs.

The industrial relations climate remained cordial and harmonious throughout the year.

9. Key Financial Ratios

In accordance with SEBI (LODR) requirements, key financial ratios are given below:

Particular	FY 2024-25	FY 2023-24	Change %	Remarks
Debtors Turnover	71.63:1	63.98:1	7.66	Due to increase in debtors
Inventory Turnover	2.26:1	2.32:1	-2.59	Due to increase in sales
Interest Coverage Ratio	60.06:1	47.89:1	25.41	Due to decrease in loan liablities
Current Ratio	3.29:1	2.72:1	20.96	Due to increase in internal accrual funds due to decrease in utilisation of bank cash credit limit
Debt-Equity Ratio	0.03:1	0.04:1	-0.25
Operating Profit Margin (%)	5.60:1	7.36:1	-23.98	Due to increase in cost of raw materials
Net Profit Margin (%)	6.75%	7.78%	-13.22	Due to increase in cost of raw materials
Return on Net Worth (%)	19.78%	25.92%	-23.69	Due to increase in cost of raw materials

10. Cautionary Statement

Statements in this report describing the Companys objectives, projections, estimates, and expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied due to various risks, uncertainties, and economic conditions.