PTL Enterprises Ltd Management Discussions

Global Economy

The global economy demonstrated resilience throughout Calendar Year (CY) 2024, despite persistent challenges from supply chain disruptions, geopolitical tensions, and inflationary pressures carried over from CY23. Additionally, the U.S. presidential election and the victory of former President Donald Trump in November 2024 added new economic and political uncertainties, which began influencing market forecasts.

Advanced Economies

According to the International Monetary Fund (IMF), advanced economies, including the United States, Euro Area, and Japan, experienced moderate growth. The IMF estimates growth in these economies at 1.8% in CY24, slightly up from 1.6% in CY23. The U.S. economy is projected to grow by 2.8% in 2024, a marginal decline compared to 2.9% in the previous year. Despite internal economic adjustments, energy concerns, and trade tensions, the Euro Area is expected to show growth of 0.8%, up from 0.4% in CY23.

Emerging Markets and Developing Economies

Emerging markets and developing economies are projected to grow at a steady 4.3% in C.Y.24, slightly down from 4.4% in C.Y.23. India remains a growth leader with 6.5% growth for C.Y.24, though significantly lower than the 8.5% growth in C.Y.23. China is expected to maintain a growth rate of 5%, a slight decline from 5.2% in C.Y.23.

Overall, global growth for C.Y.24 is estimated at 3.3%, aligning with the pace seen in C.Y.23.

India Market Overview

According to the second advance estimate by the Ministry of Statistics, Indias full-year GDP growth rate for F.Y. 20242025 is estimated to be 6.5%, down from 9.2% in F.Y. 2023-2024.

The robust performance of the services and agriculture sectors continues to fuel Indias GDP growth. While the manufacturing sector shows a slower growth rate of 4.3% for F.Y. 2024-2025, a decline from 12.3% in F.Y. 2023-2024, the construction sector remains strong, with an estimated growth of 8.6%. The agriculture sector also showed resilience, estimated to grow by 4.6% in F.Y. 2024-2025, up from 2.7% for F.Y. 2023-2024, following favourable monsoon conditions and increased output.

A significant factor contributing to this growth is the continued rise in private consumption. Private final consumption expenditure (PFCE) is expected to grow by 7.6% in F.Y. 2024-2025, up from 5.6% in F.Y. 2023-2024, reflecting strengthened consumer demand, particularly in the middle and upper-income demographics. With rising disposable incomes, this trend is expected to continue, further driving private expenditure growth.

Despite some challenges faced by the manufacturing sector, India has seen growth in sectors like technology, healthcare and automobiles, which has provided a buffer to the overall economic performance.

Auto Segment

Industry

Amid a year marked by both global and domestic challenges, the Indian automobile industry displayed resilience, continuing its growth trajectory despite moderate economic headwinds. According to the Society of Indian Automobile Manufacturers (SIAM), total vehicle sales across all categories reached a new record of 23.85 million units in F.Y. 20242025, representing a 7.3% increase from the previous fiscal year.

The Indian passenger vehicle (PV) segment exhibited small growth in F.Y. 2024-2025, with total sales reaching a record 4.3 million units, growing by 2% compared to the previous fiscal year. However, this growth rate was significantly lower from the 8.4% recorded in F.Y. 2023-2024. Promotional offers and discounts played a significant role in supporting demand throughout the fiscal year. In absolute volumes, though, automakers in India reported record sales in the PV segment for the third consecutive year, underscoring the continued strength of the market.

Another noteworthy trend is the rise of electric two-wheelers (EVs), which now account for over 6% of the total two-wheeler sales in India in F.Y 2025. This reflects the growing shift toward more sustainable and eco-friendly mobility solutions, especially with government incentives and increasing awareness of environmental concerns. The Indian three-wheeler segment achieved its highest-ever sales in F.Y. 2025, reaching 7.4 lakh units, with a growth of 6.7% compared to the previous year.

The commercial vehicle segment saw a slight de-growth of (-1.2%) in F.Y. 2025 compared to the previous year, although the last quarter showed a positive growth of 1.5%. While the overall truck segment faced a slight decline, demand for freight movement was met through a shift toward higher GVW (Gross Vehicle Weight) vehicles. The expanding highways and expressway networks have reduced logistics costs and improved regional connectivity, positively influencing the CV sector. Additionally, infrastructure development has boosted sales of buses for inter-city travel, while growing focus on mass mobility within cities has also contributed to the segments performance.

Tyre Segment

The tyre industry is a key player in the automotive sector, especially within the original equipment manufacturer (OEM) segment. Furthermore, the performance of the replacement segment is closely linked to the broader economic activities of the country.

According to data from the Automotive Tyre Manufacturers Association (ATMA), the industry witnessed a strong growth of 10% over a three-month period from April 2024 to June 2024. Notably, scooters and motorcycle tyre categories emerged as the frontrunners.

The other segments also saw good growth during the period as passenger car tyre category grew by 6% and commercial tyre category notched up 9% growth during the period.

SWOT ANALYSIS

Strengths

• Tyre manufacturing facility leased to Apollo Tyres Ltd.(“ATL”).

• Fixed income from lease rent of the Tyre unit.

• ATL has the advantage of a diversified market base across geographies and therefore, it is not completely dependent on the Indian market alone. Further, the Company is working towards establishing and growing operations in other large markets, including ASEAN and North America

• ATL is powered by well-established product brands in its key markets - Apollo and Vredestein.

Weaknesses

• No direct presence in the Tyre market.

• Dependence on ATL.

• Any impact on margins and revenue of ATL might force ATL to renegotiate the Lease Agreement.

Opportunities

• Diversification into other sector through new investments.

• Manufacturing process of ATL leading to technology upgradation.

Threats

• Economic downturn or slowdown in the key markets of ATL (India and Europe) can lead to decreased volumes and capacity utilisation by the leasee.

• Continuing high inflation and raw material cost escalation will add to pressure on margins of ATL.

• A weak Indian currency can result in pressure on margins of the ATL, since the ATL is a net importer.

Segment-wise performance

The truck-bus, cross-ply Tyres manufactured at the Companys plant leased to Apollo Tyres Ltd. - under the brand name Apollo are mostly sold/exported by Apollo Tyres Ltd.

Outlook

The economic outlook for CY25 remains uncertain, with US tariffs continuing to impact global trade flows. In addition, ongoing geopolitical tensions such as the Russia-Ukraine conflict, instability in the Middle East, and shifting global trade dynamics contribute to economic disruptions. Chinas firm stance on its economic and trade policies, including its continued resistance to concessions and trade negotiations with the West, has further exacerbated global trade uncertainties, impacting supply chains and international relations.

With such uncertainties, IMF in its April 2025 update has projected a decline in the global, advanced and Emerging markets and developing economies. It estimates the global economy to grow at 2.8% in CY25, a sharp decline from the 3.3% estimated for CY24. Advanced economies are expected drop to 1.4% as against 1.8% for CY24. Emerging markets and developing economies are projected to face a relative slowdown, with growth declining from 4.3% in CY24 to 3.7% in 2025.

Risk and Concerns from the point of view of the organization.

The Company has in place a robust risk management framework that identifies and evaluates business risks and opportunities. The Company recognizes that these risks need to be handled effectively and mitigated to protect the interest of the shareholders and stakeholders, to achieve business objectives and create sustainable value and growth. The Companys risk management processes focus on ensuring that these risks are identified promptly and a mitigation action plan is identified and monitored periodically to ensure that the risks are being addressed accordingly. The Companys risk management framework operates with the following objectives:

• Proactively identify and highlight risks to the right stakeholders.

• Facilitate discussions around risk prioritization and mitigation.

• Provide a framework to assess risk capacity and appetite; develop systems to warn when the appetite is getting breached.

• Demand-supply situation must remain in favour of the industry to enable it to undertake price increases.

• Demand in the tyre industry is dependent on economic growth and/or infrastructure development. Any slowdown in the economic growth across regions impacts the industry.

• Cyberattacks are on the rise, and ransomware and phishing scams are now a common occurrence. The cyberattack threat of unauthorized access and disruption of business operations continues to increase across the globe.

Internal Controls and Systems

The Company believes that Internal Control is one of the key pillars of governance, which provides freedom to the management within a framework of appropriate checks and balances. It has a robust internal control framework, which has been instituted considering the nature, size and risks in the business. The framework comprises, inter alia, a well- defined organization structure, roles and responsibilities, documented policies and procedures, financial delegation of authority, etc. Information Technology (IT) policies and processes also ensure that they mitigate the current business risks. These policies are complimented by a management information and monitoring system, which ensures compliance with internal processes, as well as with applicable laws and regulations.

The Companys internal control environment ensures efficient conduct of operations, security of assets, prevention and detection of frauds/errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information. The Company uses SAP - an Enterprise Resource Planning (ERP) software - as its core IT system. The systems and processes are continuously improved by adopting best-in-class processes and automation and implementing the latest IT tools. The operating management is not only responsible for revenue and profitability, but also for maintaining financial and commercial discipline. The Company has a well-established independent Internal Audit function that is responsible for providing assurance on compliance with operating systems, internal policies and legal requirements, as well as suggesting improvements to systems and process.

The Company has also identified and documented key internal financial controls for critical processes across all plants, warehouses and offices wherein financial transactions are undertaken. The financial controls are evaluated for operating effectiveness through managements ongoing monitoring and review process, and independently by Internal Audit.

The Internal Auditor Reports functionally to the Audit Committee and administratively to the Chairman of the Company.

Rs. in Lakhs

S. No. Particulars	Year Ended
	31.03.2025	31.03.2024
1. Revenue from operations	6,434.11	6434.99
2. Other income	675.66	556.60
Total	7,109.77	6991.59
3. Expenditure
a) Employee benefit expenses	281.22	273.69
b) Other expenses	321.64	572.87
Total	602.86	846.56
4. Operating Profit (EBITDA including other income)	6,506.91	6145.03
5. Finance cost	515.10	568.55
6. Depreciation and amortization expense	208.23	209.87
7. Profit Before Exceptional Item and Tax	5,783.58	5366.61
8. Exceptional items	-	-
9. Profit Before Tax	5,783.58	5366.61
10. Provision for tax
- Current tax	1,522.05	1436.88
- Deferred tax	(28.25)	(26.30)
- Income tax charge/(credit) for earlier years	660.27	1600.00
Total	2,154.07	3,010.58
11. Profit after tax	3,629.51	2,356.03

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company employees are the key drivers for its sustained growth and success. The Company nurtures and trains its employees to further enhance their management and leadership skills, while at the same time rewarding them for high performance; this is done to attract and retain the best talent within the Company. The industrial relations for the year under consideration, by and large, were cordial. The number of permanent employees on the rolls of the Company are 574.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGES OF 25% OR MORE AS COMPARED TO IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIO, ALONG WITH DETAILED EXPLANATIONS THEREOF:

Particulars	2024-25	2023-24	Explanation
Current ratio	0.11	0.19	Change is due to decrease in other receivables at year end.
Interest Coverage Ratio	35.16	23.13	Increase is due to reduction in finance cost in current year
Debt Equity Ratio	0.02	0.04	Decrease is due to reduction in borrowing in current year
Net Profit Margin	56.41	36.61	Change in due to increase in net profit during the year

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FY ALONG WITH DETAILED EXPLANATION THEREOF:

Particulars	2024-25	2023-24
Return on net worth	4.28%	3.05%