Ravi Leela Granites Ltd Management Discussions

[Pursuant to Regulation 34 read with Para B of Schedule V of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015]

The Management at Ravileela Granites Limited (Ravileela/ The Company) is pleased to present the Management Discussion and Analysis Report which provides an insight of the Company’s business, Industry structure, developments, outlook, opportunities, concern areas and performance of the Company with respect to the operations and other relevant information. This Report forms part of the compliance report on Corporate Governance.

Business of the Company

Ravileela Granites was founded in 1990 with a simple idea that the world deserved nothing less than the best Granites that is available in the mines around the states of Telangana and Andhra Pradesh and over the period, Company has gained recognition for its dedication to producing top-tier granite products. The Company’s unwavering focus on quality control and adherence to international standards have set it apart in a competitive market. Its commitment to quality has resulted in a loyal customer base. Ravileela has grown significantly in terms of quality, volume, diversity, and constantly striving for the best. Its cutting-edge plant, located on Prakasam District, Andhra Pradesh, is capable of handling massive volumes.

Ravileela Granites has consistently invested in cutting-edge technology and machinery to improve processing efficiency and enhance product offerings.

Company has consistently been supplying customers to the European market establishing a strong presence in Central and Eastern Europe. This strategic move has solidified its position as a global player.

A. Economic Overview

• Global Economy:

The global economy has depicted resilience, with steady growth and a notable slowdown in inflation, despite facing significant challenges. This resilience has been evident amidst supply-chain disruptions post pandemic, an energy and food crisis due to the Russia-Ukraine war, and a surge in inflation, followed by coordinated tightening of monetary policies.

Global growth, estimated at 3.2 percent in 2023, is projected to continue at the same pace in 2024 and 2025. The forecast for 2024 is revised up by

0.1 percentage point from January 2024 and by 0.3 percentage point from October 2023. The pace of expansion is low by historical standards, owing to both near-term factors, such as still-high borrowing costs and withdrawal of fiscal support, and longer-term effects from the COVID-19 pandemic and Russia’s invasion of Ukraine; weak growth in productivity; and increasing geo economic fragmentation.

Global headline inflation is expected to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. The latest forecast for global growth five years from now is at 3.1% which is its lowest in decades.

(Source: World Economic Outlook – April 2024)

• Indian Economy and Outlook

Growth in India is projected to remain strong at 6.8 percent in 2024 and 6.5 percent in 2025, with the robustness reflecting continuing strength in

B. Global Granite Industry Outlook:

Granite is one of the oldest and most sought-after stone in world. It is a hard stone, which is utilized to make sculptures, memorials, and gravestones. It has also been widely employed as flooring tiles and dimension stones. In modern architecture, granite slabs and tiles are used to make countertops, bar tops, fireplaces, staircases, murals, and paving stones. They are also used as building stones for bridges, memorials, monuments, and buildings. A form of granite, known as azurite granite, is primarily employed as a gemstone and also for construction purposes.

Its resilience against harsh climates makes it a preferred choice in both commercial and residential projects. With India emerging as one of the leading manufacturers and exporters of granite, boasting an industry worth approximately Rs. 25,000 crores, the spotlight on its granite exports is undeniable.

The global granite industry is a significant segment of the natural stone market, with numerous small to medium-sized players and a few dominant companies operating on a global scale. India, Brazil, and China are the leading producers and exporters of granite, with India holding a significant share of the market due to its vast reserves and high-quality stone varieties.

In recent years, the industry has seen developments in quarrying and processing technologies, leading to improved efficiency and product quality. The adoption of automated machinery and advanced cutting techniques has allowed producers to meet the growing demand for precision and consistency in stone products. Additionally, sustainability has become a critical focus, with increasing emphasis on environmentally responsible quarrying and processing practices.

The Global Granite Market size was valued at USD 17.38 Million in 2022 and is expected to surpass USD 27.88 Million by 2031, expanding at a CAGR of 5.39% during the forecast period, 2023 – 2031.

• Indian Granite Industry

India Granite market currently, in 2023, has witnessed a Herfindahl-Hirschman Index (HHI) of 1889, which has increased slightly as compared to the HHI of 1797 in 2017. India is the world’s second-largest producer of granite, accounting for about one-fifth of the world’s total production.

The growth of India’s real estate sector has been driving the demand for granite since last few years as it accounts for a major share of new construction projects and remodeling activities across residential and commercial sectors. Additionally, increasing consumer preference towards premium stones like marble & quartz over granite have further increased its demand among builders & consumers alike leading to positive outlook for India Granite Market during forecast period (2020-2026).

India not only stands as a significant producer and exporter of natural stones but also dominates the global granite export market.

In 2023–24, Indian granite exports from India totaled 55.9K, with 1,283 Indian exporters catering to 3,245 buyers worldwide. Based on export data, India predominantly exports its granite to China, Japan, and France, cementing its status as the world’s leading exporter of Indian granite.

(Source: World Economic Outlook – April 2024)

(Source:https://www.eximpedia.app/blog/the-rising-global-demand-for-indian-granite-exports)

(Source:https://medium.com/@eximpedia/exploring-new-markets-indian-granite-export-opportunities-in-2024-356ecef01372)

(Source:India Granite Market (2024-2030) : Trends, Outlook & Forecast (6wresearch.com)

(Source:https://growthmarketreports.com/report/granite-market-global-industry-analysis

• About the Company:

Ravileela Granites Limited is one of the well known granite exporter from India. The Company has been in granite exports business for more than 30 years. It exports to multiple countries across the world and has a plant located in Prakasam District, Andhra Pradesh.

Company has built a wide product portfolio of stones over the years. It processes granite blocks into slabs and cut-to-size tiles for large construction projects. It has installed capacity of 250000 square meters for granite slabs in Prakasam Plant.

Business Practices:

• Quality Control and Assurance: The Company has implemented rigorous quality checks at every stage of production which ensures compliance with industry standards and specifications and regularly assesses product quality, addressing any deviations promptly.

• Sustainable Sourcing and Environmental Responsibility: The Company sources raw materials sustainably, considering environmental impact and has invested in eco-friendly technologies and waste management. Additionally it promotes responsible quarrying practices.

• Market Research and Diversification: The Company continuously analyzes market trends and customer preferences and explores new product lines to diversify offerings. It easily adapts to changing market demands and explore export opportunities.

• Management Philosophy

Ravileela’s management philosophy revolves around three core principles:

• Quality Assurance: Prioritize delivering high-quality granite products. Ensure rigorous quality control processes at every stage of production, from sourcing raw materials to final delivery. Consistently meet or exceed customer expectations to build trust and reputation.

• Sustainability: As a granite manufacturer, embrace sustainable practices. Minimize environmental impact by optimizing resource usage, recycling waste, and exploring eco-friendly alternatives. Show commitment to responsible business practices.

• Customer-Centric Approach: Place customers at the core of your business. Understand their needs, preferences, and pain points. Strive to exceed their expectations by delivering personalized solutions and exceptional service.

• Future Outlook

As Ravileela Granites enters into its fourth decade in the industry, it remains poised for accelerated growth, supported by strong global demand. Furthermore, manufacturers are prioritizing quality and the adoption of cutting-edge technologies to meet the demands of export markets. However, challenges arise from persistent inflation in several countries, and elevated freight costs. Additionally, escalating geopolitical tensions have the potential to disrupt the supply chain in the future and may adversely impact exports.

Ravileela Granites journey as a premium processor of granite for three decades exemplifies its commitment to quality, sustainability, and customer satisfaction. It stands as a testament to the companys enduring legacy in the Indian granite industry.

Performance during the year:

During the financial year ended on 31st March 2024, the Companys total income increased by 6%, from Rs. 2,960.76 lakhs in the previous financial year to Rs. 3,147.30 lakhs. The total net loss incurred by the Company has decreased by 63.54%, from Rs. 164.61 Lakhs in the previous financial year to Rs. 60.04 lakhs.

FY 2024 did not start on a good note for the company, but the Company remained enthusiastic. Further, the Company had to face challenges due to increase in freight charges. The performance of the company was further impacted due to shortage of shipping containers. Non-availability of empty containers disrupted the supply chain across the world and impacted global trade over extended period of time.

Company generated more than 99% of its revenue in FY 2023 from exports. The Company currently exports to multiple countries. This helps in diversification of risks and any adverse currency movement in one country will have a lower impact on company’s business.

Opportunities include the following:

• Growing Demand in Emerging Markets: The rapid urbanization and infrastructure development in emerging economies, particularly in Asia and Africa, present substantial growth opportunities for granite producers.

• Expansion in Renovation and Remodeling Sectors: In developed markets like the US and Europe, there is a growing trend toward home renovation and remodeling, which drives demand for granite countertops, flooring, and decorative applications.

• Sustainability: With increasing global awareness of environmental impact, there is a rising demand for ethically sourced and sustainable granite products, providing an opportunity for companies that can meet these standards.

Some of the threats are as follows:

• Competition from Alternative Materials: Engineered stones, such as quartz, and other synthetic materials are gaining popularity due to their consistency, availability in a range of colors, and lower maintenance, posing a threat to natural granite.

• Economic and Political Uncertainties: Fluctuations in global economic conditions, along with geopolitical tensions and trade restrictions, can significantly impact demand and profitability, especially for export-dependent producers.

• Environmental Regulations: Stricter environmental regulations and the need for compliance with international standards can increase operational costs and require substantial investment in sustainable practices.

Risks and Concerns:

Risks are an inherent part of business which cannot be avoided but its robust identification and management can overcome its effects.

The Company has in place a designated Risk Management policy which is designed to overcome adverse industry fluctuations to successfully flourish the business at a reputable pace. The Company provides updates on risk management to the Audit Committee of the Board of Directors of the Company on a regular basis.

The following are the inherent risks associated with the business of the Company:

• Market Volatility: The granite industry is susceptible to fluctuations in demand due to economic downturns, particularly in key export markets.

• Supply Chain Disruptions: The industry’s reliance on global supply chains makes it vulnerable to disruptions caused by geopolitical events, natural disasters, or pandemics.

• Environmental Impact: The environmental impact of quarrying and processing poses a risk, especially with increasing global scrutiny and regulatory pressures. Failure to adopt sustainable practices can lead to reputational damage and financial penalties.

• Currency Fluctuations: As a major exporter, the Indian granite industry is exposed to risks from currency fluctuations, which can affect profitability

• Competitive landscape: There exists a lot of competition in the granites industry and to ensure survival in this competitive market, the Company developed strategies to maintain market share in the market.

• The scarcity of skilled manpower is a common challenge in the manufacturing sector: Company recognizes the importance of a skilled workforce for efficient production and quality control. The company invests in training, talent development, and retention strategies to address this constraint.

Segment Wise Performance:

As the Company is dealing in only one product, the same is not applicable.

Internal Control systems & adequacy:

To manage the risks associated with the granite industry, robust internal control systems are essential. These controls include strict compliance with environmental regulations, regular audits of quarrying and processing operations, and continuous monitoring of market trends and customer preferences. Adequate financial controls ensure that the company remains profitable and can withstand market fluctuations.

Discussion on Financial Performance with Respect to Operational Performance:

The financial performance of companies in the granite industry is closely tied to their operational efficiency and market positioning. Companies that have invested in modern technologies and sustainable practices tend to perform better financially due to higher product quality, lower operational costs, and increased market demand for sustainable products. Moreover, maintaining a diverse product portfolio and exploring new markets can mitigate risks and contribute to stable revenue growth.

Outlook:

The outlook for the granite industry remains positive, with expected steady growth driven by ongoing urbanization, infrastructure development, and a robust remodeling market in developed economies. However, the industry must navigate challenges related to competition from alternative materials and the need for sustainable practices. Advancements in technology and a focus on innovation will be crucial for maintaining competitiveness and meeting evolving consumer preferences.

Significant changes in the Key financial ratios, Net worth and other parameters:

Ratios
Particulars	2023-24	202-24
Key Profitability Ratios
Operation Profit Margin
Net Profit Ratio	-0.02	-0.06
PAT / Networth (ROE)	-0.04	-0.10
Key capital structure ratios
Net Debt / Equity	3.40	3.35
Current Ratio	1.14	1.38
Debt service Coverage Ratio	0.29	0.21
Debtors Turnover Ratio	3.05	3.55
Stock Turnover Ratio	5.63	3.36

Information Technology

All aspects of Company’s business, including production, market research, product development and distribution network, are highly automated for higher operational efficiency, boost productivity, and optimize costs. It uses technically advanced programs to eliminate redundancies, and improve operational efficiencies and productivity. By automating routine tasks, employees can focus on value-added activities and by harnessing technology; we aim to remain competitive, efficient, and customer-centric in an ever-evolving industry.

Quality Culture

Our unwavering commitment to delivering superior quality, technologically advanced, and innovative products has allowed us to cultivate strong and lasting relationships with our customers. By prioritizing innovation, building brand equity, embracing cutting-edge technology, adhering to international quality standards, and investing in research and development, we continuously enhance customer loyalty. As a result, our products have gained widespread acceptance not only in the Indian market but also internationally.

Human Resources

We firmly believe that human capital is a cornerstone of business growth. Our skilled and dedicated workforce has been instrumental in our sustained success and expansion. Our human resources policies prioritize employee well-being, fostering a safe, conducive, and productive work environment. This approach not only drives sustainable business growth but also enhances employee satisfaction and motivation.

Our commitment to employee satisfaction goes hand in hand with our business sustainability. We believe that investing in our employees ultimately pays dividends in terms of long-term growth and customer loyalty.

Cautionary Statement:

Statements made in the Management Discussion and Analysis section describe the Company’s objectives, projections, expectations and estimations, which may be forward-looking in nature. These statements are made within the meaning of applicable securities laws and regulations. Past performance of the Company is not necessarily indicative of its future results, and actual results could differ materially from those expressed and implied. Important factors that could make a difference to the Company’s operations include, among others, economic conditions affecting demand/supply and price conditions, variation in prices of raw materials, changes in Government regulations, tax regimes, and economic developments and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements based on any subsequent development, information or events.

	For and on behalf of the Board of
	Ravileela Granites Limited
	Sd/-	Sd/-
	Parvatha Samantha Reddy	Parvat Srivinas Reddy
	Whole-time Director and CFO	Director
	DIN: 00141961	DIN:00359139
	Add: H. No. 7-1-214/12	Add: H-No-7-1-214/12
	Ameerpet Begumpet,	Ameerpet, Begumpet,
	Secunderabad-500016,	Secunderabad-500016
Place: Hyderabad
	Telangana, India	Telangana, India
Date: 14th August 2024