Polylink Polymers (India) Ltd Management Discussions

The information required in compliance of Regulation 34 (2) (e) read with Schedule V (B) of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 and forming a part of the Director Report for the Year ended 31 st March 2025 had given separately in annexure/s.

OVERVIEW OF THE ECONOMY AND INDUSTRIAL STRUCTURE AND DEVELOPMENTS

ECONOMIC OVERVIEW

GLOBAL ECONOMY

The global economy stands at a critical juncture, shaped by significant policy shifts, particularly those initiated by the United States. In April, the US announced near-universal tariffs, intensifying trade tensions and leading to heightened policy uncertainty across the world. These tariffs are viewed as both a negative supply shock and an external demand shock. At the same time, rising uncertainty and tighter financial conditions are contributing to a global negative demand shock.

The global economy in 2024?€“2025 continues to navigate significant turbulence. The Russia-Ukraine war persists, driving volatility in energy and grain markets, with European gas prices in early 2024 still 25% higher than pre-war levels despite declining from 2022 peaks. Global inflation has eased?€”from 6.8% in 2023 to 5.2% in 2024 (IMF)?€”but remains above target in many regions, prompting tight monetary policy. The U.S. Federal Reserve has kept interest rates at 5.25%?€“5.50% since mid-2023, slowing consumer demand and business investment. Meanwhile, U.S.-China trade tensions escalated, with tariffs on Chinese EVs increased from 25% to 100% in 2024, contributing to a 7% YoY decline in bilateral trade. Chinas GDP growth also slowed to 4.5% in 2024 from 5.2% in 2023 , impacted by a weak property sector and high youth unemployment.

Despite global headwinds, there are emerging signs of recovery and transformation. The IMF projects global GDP growth of 3.1% in 2025 , slightly down from 3.2% in 2024 , but supported by improving inflation dynamics and central banks signaling potential rate cuts. Supply chain realignments are benefiting economies like India and Mexico, which saw export growth of 8?€“10% YoY in 2024. Investment in renewable energy hit a record $1.8 trillion in 2024 , up from $1.6 trillion in 2023 , driven by the global green transition. With inflation softening and technological innovation expanding, especially in AI and clean energy, the outlook for 2025 suggests cautious optimism, provided geopolitical risks are managed and structural reforms continue in key economies.

INDIAN ECONOMY

India remains one of the fastest-growing major economies in the world, showing strong resilience amid global headwinds. GDP growth stood at 7.6% in FY 2023?€“24 , to a projected 6.8% in FY 2024?€“25 , and expected to stabilize between 6.5% and 6.8% by FY 2025?€“26 , driven by robust domestic demand, strong services sector performance, and government-led infrastructure spending. The IMF projects 6.8% growth in FY 2024?€“25 , supported by continued expansion in digital services, manufacturing (under Make in India), and energy transition projects. Inflation has gradually eased from 5.4% in 2023?€“24 to a forecasted 5.0% this year , with further moderation to around 4.8% by 2025?€“26 , creating an environment conducive to potential monetary easing as the RBI considers lowering policy rates from the current 6.50% to between 6.00% and 6.25% . Indias trade performance has remained resilient amid global volatility; merchandise exports grew from approximately $450 billion in 2023?€“24 to a projected $470 billion in 2024?€“25 , and are xpected to reach $500 billion by 2025?€“26. Similarly, service exports expanded from about $340 billion to $365 billion , with a further rise anticipated to $390 billion . Imports have shown a moderate increase from  $710 billion to $720 billion and could reach around $740 billion by FY 2025?€“26, reflecting growing domestic demand and capital investment.

Foreign direct investment inflows have strengthened, rising from roughly $80 billion in FY 2023?€“24 to an expected over $85 billion this year , with projections exceeding $90 billion by FY 2025?€“26 , underscoring Indias increasing integration into global supply chains and its attractiveness as an investment destination. Indias green energy sector is advancing rapidly, with renewable energy capacity expanding from 180 GW in 2023?€“24 to a forecasted 230 GW in 2024?€“25 , and an expected 280 GW by FY 2025?€“26 , aligning with the countrys commitment to achieving 500 GW by 2030. The electric vehicle market has demonstrated strong momentum, growing 42% in 2023?€“24 , and although growth is expected to moderate to 35% and then 30% in the next two years, it remains a key driver of sustainable industrial transformation. Meanwhile, Indias digital and AI initiatives continue to accelerate, supported by government funding and private sector innovation, positioning the country as a leading hub for emerging technologies.

Indias trade performance remained stable amid global volatility. Merchandise exports stood at $450 billion in FY 2023?€“24 , up slightly from $447 billion in FY 2022?€“23 , led by electronics, pharmaceuticals, and engineering goods. Service exports reached a record $340 billion , up 13% YoY , driven by strong demand in IT and financial services. Imports eased to $710 billion , down from $714 billion , as energy prices normalized. Indias growing role in global supply chains?€”especially as an alternative to China?€”is reflected in rising FDI inflows (~$80 billion in FY 2023?€“24) and strategic trade partnerships with the U.S., EU, and Southeast Asia.

Green and digital initiatives are central to Indias economic model. Renewable energy capacity reached 180 GW in 2024 , with a target of 500 GW by 2030 . Indias EV market grew by 42% YoY , and the Green Hydrogen Mission is targeting 5 million metric tonnes by 2030. On the digital front, platforms like UPI, ONDC, and Aadhaar are revolutionizing access and efficiency. Indias AI market , supported by the ?‚?10,300 crore IndiaAI Mission , is projected to grow to $17 billion by 2027 , enhancing productivity in sectors like healthcare, logistics, and public services.

Despite ongoing geopolitical tensions such as the Russia-Ukraine war, U.S. tariff policies, and Chinas economic slowdown, India has maintained macroeconomic stability and solid growth prospects. Strategic partnerships with global economies, neutral foreign policy stances, and targeted reforms have helped mitigate external shocks. Digital platforms like UPI and ONDC are transforming commerce and finance, while AI adoption across sectors such as healthcare and manufacturing is boosting productivity and competitiveness. These combined factors position India well to navigate future global uncertainties, sustain steady economic growth, and strengthen its role as a global economic leader in the medium term.

OVERVIEW OF PLASTIC INDUSTRY

Between 1990 and 2021, plastic consumption in India increased 23-fold to roughly 21 million tons. This rapid increase saw per capita plastic consumption rise from just one kilogram per inhabitant to 15 kilograms. India accounts for approximately six percent of global plastics use, making it the third- largest consumer of this material behind China and the United States. Factors such as economic growth and population growth are expected to drive plastics use in the coming decades, with projections showing plastics consumption in India could rise to more than 160 million metric tons by 2060. This would see the countrys share of global plastic consumption more than double compared to current levels. Source https://www.statista.com/topics/6902/plastic-industry-in-india/#topicOverview

Polymers are used to produce products across a broad spectrum of other industries that cover almost every domain of life, such as household items, automobiles, packaging, electrical and electronics, among many. Source https://www.statista.com/topics/6902/plastic-industry-in-india/#topicOverview

The plastic market in India is set to grow at a CAGR of 8.49% from US$ 45.7 billion in 2019 to reach US$ 73.4 billion by 2025, driven by increasing demand for consumer goods and packaging materials coupled with government initiatives towards the promotion of sanitation and hygiene practices. Source https://www.statista.com/topics/6902/plastic-industry-in-india/#topicOverview

Reliance Industries is Indias largest manufacturer of polymers, with the multinational conglomerate accounting for almost 50 percent of the countrys polyolefin production capacity as of 2022. Reliance Industries had the largest production capacity for various polymers in India at that time, including polypropylene (PP) and polyethylene terephthalate (PET). Some of Indias leading plastic PET bottle, jar, and container companies include TPL Plastech and Hi-tech Corporation, the latter of which is a leading manufacturer of rigid plastic packaging in the country, and had a market cap of almost four billion Indian Rupees as of November 2022. Other major plastic product manufacturers in India include Supreme Industries and Nikamal.

India Plastics Market was worth US$ 43.68 Bn in 2023 and total revenue is expected to grow at a rate of 6.6% CAGR from 2024 to 2030, reaching almost US $ 68.33 Bn in 2030. Source India Plastics Market: Industry Analysis and Forecast (2024-2030) (maximizemarketresearch.com)

Indian plastics industry also delivers plastic materials to many other industry such as automotive, consumer packaging, & electronics. Over the past few decades, the demand for Plastic has developed by 8 percent yearly. A similar development rate is anticipated to continue during the forecast period. The progress rate of the plastics industry in India is among the top in the world, with plastics consumption rising at 16 percent per year. Considering a rising middle class with low per capita consumption of plastics. This high progress rate is expected to continue, as the per capita consumption of plastics will certainly increase. Although Indias plastics industry has been hit by the nations general economic emergency over the past 2 years, with the weakening rupee, underlying economic movement rests strong as the use of plastic is increasing in more & more segments, opening new markets & substituting traditional materials. Source India Plastics Market: Industry Analysis and Forecast (2024-2030) (maximizemarketresearch.com)

OPPERTUNITY AND THREATS OPPORTUNITY

The polymeric compound industry is poised for significant growth driven by increasing demand from key end-use sectors like construction, automotive (especially light weighting for EVs), packaging, and electronics, alongside a burgeoning market for specialized high-performance and smart polymers. Furthermore, technological advancements in sustainable and bio-based polymers present a clear pathway to market differentiation and compliance with evolving environmental standards, while expansion into rapidly industrializing regions such as Asia Pacific offers substantial untapped market potential.

THREATS

The industry faces considerable headwinds, primarily from volatile raw material prices (linked to petrochemicals) which can directly impact profitability. Strict and evolving environmental regulations concerning plastic waste, emissions, and chemical usage necessitate continuous investment and innovation, while intense market competition often leads to price pressures. Additionally, the global nature of supply chains exposes companies to disruptions from geopolitical events and natural disasters, creating uncertainty in material availability and logistics.

The Raw Material prices majorly Depends upon uncertainties like Ukraine- Russia War, Exchange Rate and Petroleum Prices which frequently fluctuate the probability. Further the higher ocean fright is key reason to explore the Export market.

SEGMENT-WISE PERFORMANCE OUTLOOK

During the Year under review, your Company was operating only in one segment.

The global plastic market is projected to grow from USD 768.9 billion in 2025 to USD 1,138.9 billion by 2035, expanding at a CAGR of 4%. This steady growth is driven by the unmatched versatility, cost- effectiveness, and wide-ranging applicability of plastics across numerous industries including packaging, automotive, construction, electronics, and healthcare. Source https://www.futuremarketinsights.com/reports/plastic-market

It has also been an opportunity to reflect on the significant progress already realized over more than a decade of multilateral discussions on addressing the tax challenges arising from digitalization and globalization of the economy. Advances in global tax co-operation have included the minimum standards agreed in the initial BEPS project: reforming harmful tax practices, reducing treaty abuse, improving dispute resolution, and increasing tax transparency through the exchange of country-by- country reporting on the largest multinationals, where we remain committed to ensuring that all countries can benefit. Importantly, the Global Minimum Tax agreed under Pillar Two is in the process of coming into force in countries worldwide and will raise significant revenues of up to USD 192 billion per year for both developed and developing countries. With the significance of these achievements in mind, the OECD will continue to support the Members of the Inclusive Framework toward a successful conclusion of their necessary work. (Source ?€“ OECD)

The Global economic uncertainty remains elevated; China facing deflation, real estate problems, and FDI declines, EU growth stagnates, and US high-interest environment beginning to impact households and companies. Consumers remain upbeat as retail sales in main economies have experienced steady growth, despite elevated prices and interest rate environment. Indias Interim Union Budget (delivered February 1, 2024) presented GDP growth projections of 7.3% for 2023 ?€“24.1 Capital expenditure outlay for the next year is being increased by 11.1%; fiscal deficit is estimated at 5.1% of GDP; 2014?€“23 marked a golden era for FDI investments with treaties being negotiated to sustain growth (Source ?€“ Mckinsey Global Economics Intelligence executive summary, Feb 2024)

On the external front, risks to the current account balance stem from multiple sources. While commodity prices have retreated from record highs, they are still above pre-conflict levels. Strong domestic demand amidst high commodity prices will raise Indias total import bill and contribute to unfavorable developments in the current account balance. These may be exacerbated by plateauing export growth on account of slackening global demand. Should the current account deficit widen further, the currency may come under depreciation pressure, Entrenched inflation may prolong the tightening cycle, and therefore, borrowing costs may stay higher for longer. In such a scenario, global economy may be characterized by low growth in FY25.

However, the scenario of subdued global growth presents two silver linings ?€“ oil prices will stay low, and Indias CAD will be better than currently projected. The overall external situation will remain manageable. Further, the world is trying to de-dollarize the international market amid a global economic slowdown and Indian Rupee is now going global as 18 countries have agreed to trade in Rupee, which will reduce the trade related transaction costs, boost trade and reduce Indias trade deficit

RISK IDENTIFICATION, RISK MITIGATION AND INTERNAL CONTROLS

The Company is manufacturing various Compound of Power Cable, Telephone Cable, Engineering Plastics and Master batches. Its presence in these segments exposes it to various risks which are explained below:

a) RISK OF COMPETITION AND PRICE PRESSURE

The risk of competition from existing players as well as from new entrants remains high. However, the Companys strength in the market place, coupled with its continuous thrust on improving quality of its products and offering newer products in the Master Batch segment. The Company supplies Various Compound both on National and International Market. Both Market has their own nuances in terms of customer expectations, competition and pricing. However, the company is well focused on increasing its share in all segments through sound marketing strategy and a balanced approach.

b) RISK OF FOREX RATE FLUCTUATION AND POLITICAL RISK

Foreign Currency rate are always fluctuating due to changes in various types of market scenario. The adverse growth of Currency may affect the earning of the Company as the Revenue of the Company is coming mostly from Export Market.

To minimize these types of Risks the company has taken various types of Forex facilities like Packing credit, Forward Contract, ECGC policies depend upon the transection and Risk included etc.

Further the Company exports its products mostly in South African countries where Government policies impact a significant influence of their market and the company keeps to close watch on any change occurred.

c) RISK OF FLUCTUATIONS IN PRICES OF KEY INPUTS

Prices of the key ingredients used in the products manufactured and marketed by the Company remain volatile due to several market factors, including changes in government policies and fluctuations in the foreign exchange rates and the Speculators. However, the Company keeps a close watch on the prices, wherever feasible, to minimize the risk of fluctuations in the input prices.

d) RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

The Company has established a well-defined process of risk management, wherein the identification, analysis and assessment of the various risks, measuring of the probable impact of such risks, formulation of risk mitigation strategy and implementation of the same takes place in a structured manner. Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. Necessary internal control systems are also put in place by the Company on various activities across the board to ensure that business operations are directed towards attaining the stated organizational objectives with optimum utilization of the resources. Apart from these internal control procedures, a well- defined and established system of internal audit is in operation to independently review and strengthen these control measures, which is carried out by a reputed firm of Chartered Accountants. The Audit Committee of the Company regularly reviews the reports of the internal auditors and recommends actions for further improvement of the internal controls.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has internal control procedures commensurate with the Companys size and nature of business. Your Company has an in-house team that carries out internal audits and ensures that all transactions are appropriately authorized, recorded and reported. Exercises for safeguarding assets and protection against unauthorized use are undertaken from time to time. There are well-established policies and procedures in place across your company. The objective of these procedures is to ensure the efficient use and protection of your Companys resources, accuracy in financial reporting and due compliance of statutes and Company procedures. The Internal Audit reports, the progress in implementation of recommendations and actions taken contained in such reports and the adequacy of internal control systems are reviewed by the Audit Committee of the Board in its periodical meetings. The same are also examined by the Statutory Auditors in course of their Audit procedures.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

(Rs. Lakhs)

Particulars	Financial Year 2024-25	Financial Year 2023-24
Revenue from operation	9123.33	7466.74
Other income	27.71	24.30
Total Revenue	9,151.04	7491.04
Expenses
Inventory	6933.90	5717.60
Employee benefit expense	421.54	336.92
Finance Charges	36.58	22.16
Provision for Depreciation	101.34	95.33
Other Expenses	1360.27	1087.64
Total Expenses	8853.63	7259.65
Profit before tax	297.41	231.39
(-) Tax	84.21	58.21
Net Profit after tax	213.20	173.18
(-)Other Comprehensive Income	(4.32)	(0.58)
Total Comprehensive Income	208.88	172.60
Closing Balance of Retained Earnings	1,884.75	1675.87

The Companys financial performance during the year under review demonstrates robust growth. The total revenue for the financial year ended March 31, 2025, stood at Rs. 9,151.04 Lakhs, marking a significant increase of 22.16% compared to Rs. 7,491.04 Lakhs reported for the preceding financial year ended March 31, 2024. Furthermore, the Net Profit after Tax for the financial year ended March 31, 2025, was recorded at Rs. 213.20 Lakhs, as against Rs. 173.18 Lakhs for the financial year ended March 31, 2024. This represents a commendable increase of 23.11%. The retained earnings of the Company also exhibited a healthy growth, increasing to Rs. 1,884.75 Lakhs as on March 31, 2025, from Rs. 1,675.87 Lakhs as on March 31, 2024, registering an increase of 12.46%.

INDUSTRIAL RELATIONS AND HUMAN RESOURCE DEVELOPMENT

The Company is adamant that the secret to sustaining an organizations growth is a workforce that is competent, disciplined, motivated, trained, and skilled. The Company occasionally plans and offers the necessary training to its personnel. Systems for periodic evaluation and reward are in place. Throughout the year, there have been positive and supportive working relationships at the Plant as well as between employer and employee at the Head office in Ahmedabad.

The company adheres to the principle of "Right Person for Right Job" and makes the necessary efforts in this direction. There were 45 permanent employees working for the company as of March 31, 2025.

Employee relations during the year under review were peaceful. The contribution and co-operation received from employees/workers across all levels was excellent and the same has been appreciated & supported by the management through its continuous & systematic training programs.

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 THEREFOF

Ratios	NUMERATOR/ DENOMINATOR	31 st March, 2025	31 st March, 2024	Variation	Remarks
Current Ratio	Current Assets / Current Liabilities	2.61	3.01	- 13.29%	NA
Debt Equity Ratio	Total Debt / Shareholders Equity	0.08	0.06	33.33%	Refer Note A
Debt Service Coverage Ratio	Earnings Available for Debt Service / Debt Service	6.42	5.14	24.90%	NA
Return on Equity Ratio	Net Profit After Taxes / Average Shareholders Equity	7.39	6.43	14.93%	NA
Inventory Turnover Ratio	Sales / Average Inventory	10.11	9.64	4.88%	NA
Trade Receivables Turnover Ratio	Net Credit Sales / Average Accounts Receivable	6.94	7.99	- 13.14%	NA
Trade Payables Turnover Ratio	Net Credit Purchase / Average Trade Payables	15.24	18.39	- 17.13%	NA
Net Capital Turnover Ratio	Net Sales / Working Capital	6.85	5.78	18.51%	NA
Net Profit Ratio	Net Profit / Net Sales	2.34	2.32	0.86%	NA
Return on Capital Employed	Earning Before Interest and Taxes / Capital Employed	10.00	8.39	19.19%	NA
Return on Investment	Income Generated from Investment / Time Weighted Average Investment	NA	NA	NA	NA

Note-A: Due to higher short term Borrowings availed during the year to meet working capital requirements.

DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the companies (Indian Accounting Standards) (Amendment) Rules,2016 and notified under Section 133 of the Companies Act, 2013 ("the Act") and other relevant provisions of the Act and other accounting principles generally accepted in India.

CAUTIONARY STATEMENT

Statement in this report on Management Discussion and Analysis describing the companys objectives, projections, estimates, exceptions or predictions may be forward looking statement and are based on certain assumptions and exception of future events. Actual result could however differ materially from those express or implied. Important factors that could make a difference to the Companys operation including global and domestic demand-supply condition, finished goods process, raw material cost and availability, changes in government regulations and tax structure, economic development within India and the Countries with which the Company has Business Contracts and other factors such as litigation and industrial relations.

The Company assumes no responsibility in respect of forward-looking statement herein which may undergo changes in future on the basis of subsequent developments, information and events.

DISCLAIMER

All the data used in the initial sections of the report has been taken from publicly resources and discrepancies if any, are incidental and unintentional.

Place : Ahmedabad Date : 08 th August, 2025
For, Polylink Polymers (India) Limited By Order of the Board of Directors
Ravi Prakash Goyal Whole Time Director (DIN: 00040570)
Uma Shankar Bhartia Director (DIN: 00063091)