Restile Ceramics Ltd Management Discussions

MACROECONOMIC OVERVIEW Global Economy

The global ceramic tiles market size grew to USD 130.96 billion in 2025 the global ceramic tiles market witnessed a healthy growth in the historical period. Aided by the escalating demand for modern and aesthetically pleasing interiors, combined with the durability and versatility of ceramic tiles, the market is expected to grow at a CAGR of 7.5% compound annual growth rate. The countries covered in the ceramic tiles market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK and USA. The markets growth is fueled by the strong development of construction and infrastructure industries in emerging economies such as India, China, Brazil, and South Asian countries, with various types of tiles catering to diverse construction needs across key regions worldwide.

Technological advancements in the ceramic industry have also been instrumental in shaping the ceramic tiles market outlook. Digital printing technology, for instance, has revolutionised tile designs, allowing for the replication of intricate patterns and even the look of natural stones and woods on ceramic tiles. This gives designers and homeowners greater flexibility and choice.

Domestic Market

Though the present demand condition for ceramic tiles in the domestic market is subdued, tile manufacturers are not unduly disturbed by that as they strongly believe that the long term India story is still intact. Indian Ceramic tiles production and exports grew at a healthy pace in last three years, even when global production declined. The Indian largest ceramic cluster, Morbi (Gujarat), continued to grow and is now the second largest ceramic cluster globally, having over 800 production units, of which many are export-oriented.

Technological advancements in ceramic tile manufacturing and the availability of abundant raw materials have further contributed to market growth. Leading players in the global ceramic tiles market, including Porcelanosa Group, Kajaria Ceramics Limited, Atlas Concorde S.P.A., Ceramic Industries Group, Ceramica Carmelo Fior, Cersanit Group, China Ceramics Co., Ltd., Crossville Inc., and Dynasty Ceramic Public Company Limited, engage in strong competition, emphasizing product innovation, quality, and market presence.

India occupies the second position in the global tile industry. While the residential sector is the primary consumer of tiles (in terms of application), demand from the commercial sector (including high-footfall infrastructure) is growing at a healthy clip owing to sustained investments by the government and private players.

ABOUT RESTILE CERAMICS LIMITED

BUSINESS OVERVIEW

Restile Ceramics Limited ("RCL") was originally incorporated as Restile Ceramics Private Limited on 26^th May, 1986. Restile is known in the market for the last 3 decades for its unpolished smooth tiles and Industrial Vitrified Tiles.

FINANCIAL PERFORMANCE

Particulars	2024-25	2023-24
Revenue from Operations	143	93.88
Other Income	-	19.13
Total Income	143	113.01
Total Expenditure	238.83	204.11
Profit/(Loss) before Tax	(95.83)	(91.10)
Less: Tax Expense
Current Tax	-	0.17
Prior Period	0.23	-
Net Profit/(Loss) after Tax	(96.06)	(91.27)
Earnings Per Share- Basic & Diluted	(0.10)	(0.09)

During the year under review, your Companys total revenue from operations increased to Rs. 143 Lakhs as compared to Rs. 93.88 Lakhs in the previous financial year. The Net loss changed to Rs. 96.06 Lakhs as against Rs. 91.27 lakhs in the previous financial year.

Key Financial Ratios (Standalone) for the Financial Year ended March 31, 2025 are provided here below:

Key Ratios	Financial Year 2024-	Financial Year 2023-	Variance (%)
	25	24
Debtors Turnover	13.76	5.87	134%
Inventory Turnover	1.89	1.12	69%
Interest Coverage Ratio	-	-	0%
Current Ratio	3.83	8.80	-56%
Debt Equity Ratio	(1.20)	1.27	-195%
Operating Profit Margin	(40)	(77)	-48%
Net Profit Margin	(67)	(97)	-31%
Return on Net Worth	0.03	0.03	1%

Remarks for Change in Ratios having more than 25% variance: The variance is due to higher Inventory Turnover, Operations and Other losses.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company operates exclusively in the segment of unpolished smooth tiles and industrial vitrified tiles. For the financial year 2024-25, revenue from operations totaled Rs. 143 Lakhs, which has increased compared to the previous year. Additionally, the net loss for the year has increased to Rs. 96.06 Lakhs.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

• The Company believes that strong internal control system and processes play a critical role in the health of the Company. The Company is having an internal control system including suitable monitoring procedures commensurate with its size of operations;

• The Companys well-defined organizational structure, documented policy guidelines, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal policies and applicable laws and regulations as well as protection of resources;

• The internal control system is supplemented by extensive internal audits, regular reviews by the management and standard policies and guidelines which ensure reliability of financial and all other records;

• The Companys Internal Auditor performed regular reviews of business processes to assess the effectiveness of internal controls. Internal Audits were carried out to review the adequacy of the internal control systems, compliance with policies and procedures. The Internal Audit reports are periodically reviewed by the Audit Committee.

• Our Internal Auditor, M/s. R K Doshi & Co LLP, Chartered Accountants, has certified that the Company maintains an adequate system of internal financial controls, evaluates and assesses its adequacy and effectiveness in a satisfactory manner which takes care of requirements under the Companies Act, 2013.

OPPORTUNITIES, THREATS AND CHALLENGES

Opportunities:

• Introduction of vitrified and porcelain tiles ("tiles of the future") in the Indian market - internationally these are already major sellers - these categories account for approximately 10-12% for all organized sales in the Indian ceramic tiles industry.

• A spate of recent expansions by many players makes the industry look very promising in the future.

• Rising demand for tiles as it is widely used today as it can keep temperature reduced.

• Rising disposable incomes of the growing middle class and 40 million units of housing shortage hold out a great potential.

• Government initiative of Housings for all will sustain demand in IT/ITES & Retail sector.

Threats and Challenges:

• Since the vitrified market enjoys consistent growth and assured returns, companies in the organized and unorganized sector are expected to come up with latest technology, which may result in pressure on the realizations. However, the uniqueness of the products will help us in garnering the Project and Industrial sector which help in overcoming the competition.

• Changing market trends on faster basis.

• Economic recession in business cycles affecting income and business.

• Substitutes of ceramics like terracotta tiles and PVC floorings which are capturing the markets in some areas.

• Overall quality standards are not up to the international level.

RISKS AND CONCERNS

Risk is an integral part of the business and almost every business decision requires the management to balance risk and reward. The ability to manage risks across geographies, products, asset classes, customer segments and functional departments is of paramount importance for the hindrance free growth of every organization.

In the business world, the different types of risks have come to mean an impediment towards the achievement of an organizations objectives. Your Company is exposed to specific risks that are particular to its business and the environment in which it operates. Due to rapid changes in the technologies, business dimensions and complexities, regulatory changes and environmental concerns, new and various types of risks have emerged. So, in the era of fast changing global economy, multiplicity of legal compliances, cross border business transactions and to ensure the survival, viability and sustainability of business, the management of various types of risks have gained utmost importance.

The Company specific risks remain large which is same as enumerated last year. The Company is consuming LPG which is a petroleum product for firing the tiles. The prices of petroleum products depend upon international market and subject to volatility. Some of the competitors who have the facilities of natural gas, tax incentives etc. are dominating the market. There may be a threat from some of the larger capacity players, who have varied range of products, effects and colors to dominate market presence.

QUALITY CULTURE

Our constant efforts to offer superior quality, technologically driven and innovative products enable us to develop and nourish deep customer relationships. With unwavering focus on innovation, brand equity, technology adoption, quality adherence to international standards and investment in R&D, we relentlessly strive to improve the loyalty of both institutional and retail customers. This enable us to gain large scale acceptance in both Indian and overseas markets.

Our investment and focus in R&D have enabled us to give us an edge over competition. In addition, it also helps us to expand customer base and command a premium in the market. We strive to leverage our R&D investments to increase profit and build long-term shareholder value.

FUTURE OUTLOOK

The key priorities as we step into F.Y. 2026 will mainly revolve around gaining market access, expanding the network and network monetization, as we continue to look out for M&A opportunities. All these factors will help us in achieving our targets. The Ceramic Tiles market is expected to register fluctuating growth trends in the long term, while inflation and supply chain concerns are expected to continue in 2025.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The management had adopted/followed strategic plans. The management will make new strategies and plans for the increased production and profitability of the Company in the near future.

HUMAN RESOURCES

We believe that human capital plays a crucial role in business growth. Our talented and dedicated employee base has enabled us to achieve our strategic goals. Our HR policies are employee-friendly, nurturing a safe, conducive and productive work environment. This not only enables sustainable business growth but also ensures high productivity, employee satisfaction and motivation, and superior retention ratio. As on March 31, 2025, your Company had a total head count of 10 employees. The Directors wish to place on record their appreciation and acknowledgment for the efforts and dedication and contributions made by employees at all levels during the year under review.

Your Company has adopted people practices that enable us to attract and retain talent in an increasingly competitive market and to foster a work culture that is always committed to providing the best opportunities to employees to realize their potential. We are committed as an equal opportunity employer and follow non-discrimination in all our practices. All employees, from a new joiner to a tenured one, are provided tailored learning opportunities as per their role, level, and specific focus area.

CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations may constitute Forward Looking Statements within the meaning of applicable laws and regulations. Our Company undertakes no obligation or liability to update or revise any forward-looking statements publicly, whether as a result of new information, future events or otherwise actual results, performance or achievements could differ materially from those either expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements and read in conjunction with financial statements included herein.

The Company assumes no responsibility in respect of forward-looking statements that may be revised or modified in future on the basis of subsequent developments, information or events. The financial statements are prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

The management of the Company has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements reflect a true and fair manner, the state of affairs and profit / loss for the year. The narrative on our financial condition and result of operations should be read together with the notes to the financial statements included in the annual report. Important factors that could make a difference to the Companys operations include changes in Government regulations and tax regime, economic developments within India and abroad, financial markets etc.