Rex Pipes & Cables Industries Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian pipes, fittings, electrical cables and related infrastructure products industry continues to play an important role in the development of the countrys agriculture, water-management, housing, construction, industrial and power infrastructure. Increasing urbanisation, expansion of irrigation facilities, development of water-supply and sanitation infrastructure, electrification, renewable-energy projects and continued investment in roads, buildings and other infrastructure are expected to support long-term demand for pipes, cables and allied products.

The Indian plastic-pipe industry is supported by increasing substitution of traditional materials with PVC and HDPE products because of their comparatively lighter weight, corrosion resistance, durability, ease of installation and cost efficiency. Demand is generated from both organised infrastructure projects and the retail/dealer network serving agricultural and domestic applications.

Electrical cables and wires are similarly linked to construction activity, industrial expansion, electrification, replacement demand and infrastructure development. The Companys presence across pipes, cables, fittings and related products provides it with exposure to multiple end-use segments.

The Company operates in the manufacture and trading of PVC pipes, HDPE pipes, wires and cables, fittings and related accessories under the "REX" brand. Its products serve agriculture, power, construction, engineering, domestic and infrastructure applications. The Companys manufacturing facilities are situated in the Sikar, Rajasthan region. The Company has also diversified into bus-body fabrication under the "Rex Coaches" brand. Publicly available Company information describes its product portfolio as including PVC pipes, HDPE pipes, electrical cables, copper wire, fittings, sprinkler systems and bus-body products.

2. ECONOMIC AND BUSINESS ENVIRONMENT

The financial year 2025-26 was characterised by continued domestic economic activity alongside significant global economic and geopolitical uncertainty. While Indias domestic infrastructure and consumption-oriented sectors continued to provide opportunities for manufacturers, businesses were required to manage volatility in commodity prices, logistics costs, interest rates, exchange rates and international trade.

For a manufacturer of pipes and cables, the prices and availability of key raw materials such as PVC- related inputs, polymers, copper and other petroleum-linked materials have a direct bearing on operating margins. Changes in crude oil prices can affect polymer prices, transportation costs and overall manufacturing economics.

The Company continued to focus on operational efficiency, product quality, customer relationships and prudent cost management to respond to these external developments.

3. GEOPOLITICAL ENVIRONMENT DURING FY 2025-26

FY 2025-26 witnessed an elevated level of geopolitical uncertainty. The continuing Russia-Ukraine conflict, the Israel-Gaza conflict and tensions across the wider Middle East contributed to uncertainty in global energy markets, trade routes and commodity prices. During 2025, there was also a short but significant military escalation between India and Pakistan in May 2025, adding to regional geopolitical uncertainty. Globally, 2025 was marked by continued conflicts in Gaza, Ukraine and Sudan and heightened geopolitical risks.

During 2026, tensions involving the United States, Israel and Iran escalated further. The conflict created significant uncertainty around crude oil supplies and maritime transportation, particularly through the Strait of Hormuz. India, being one of the worlds largest crude-oil importers, remained exposed to movements in international crude prices, shipping costs and supply-chain disruptions.

The geopolitical developments had the potential to affect the Companys business through:

• volatility in crude oil and polymer prices;

• fluctuations in copper prices;

• higher freight and transportation costs;

• longer lead times and disruptions in international supply chains;

• pressure on working capital requirements;

• exchange-rate volatility; and

• changes in overall business and investment sentiment.

Indias merchandise trade and logistics environment also came under pressure in 2026 as higher crude prices and freight rates increased import costs amid Middle East tensions.

The Company closely monitored these developments and continued to focus on maintaining adequate inventory planning, managing procurement costs, improving operational efficiency and maintaining customer relationships. Given the Companys primarily domestic manufacturing and market orientation, the direct impact of overseas conflicts is dependent principally on the extent to which such developments influence raw-material prices, freight costs, domestic demand and overall economic conditions.

4. BUSINESS OVERVIEW

Rex Pipes and Cables Industries Limited is engaged in the manufacturing and trading of a diversified range of PVC pipes, HDPE pipes, electrical wires and cables, fittings and related accessories under the "REX" brand. The Companys products cater to agriculture, domestic, construction, power, engineering and infrastructure applications.

The Companys product portfolio provides exposure to several growing areas of the Indian economy, particularly:

• agricultural irrigation and water management;

• potable-water and distribution infrastructure;

• drainage and sewerage;

• electrical infrastructure;

• residential and commercial construction;

• industrial applications;

• government and semi-government projects; and

• transportation and automobile-related applications through bus-body fabrication.

The Companys manufacturing facilities are located in and around Palsana/Sikar, Rajasthan and the registered/head office at F-69A, RIICO Industrial Area, Sikar.

The Company has built its business around the "REX" brand and continues to focus on product quality, manufacturing capabilities, technological upgradation and customer service.

5. FINANCIAL PERFORMANCE

The financial performance of the Company for FY 2025-26, compared with FY 2024-25, is summarised below:

Particulars	For the FY 2025-26	For the FY 2024-25
Revenue from Operations	12051.02	13834.25
Other Income	216.59	41.78
Total Income	12267.61	13876.04
Profit before Depreciation, Financial Expenses and Taxation	1058.68	1161.39
Depreciation & Amortization	131.20	155.37
Financial Expenses	272.45	292.73
Profit before Taxation	656.69	713.29
Less: Provision for Taxation (current & deferred)	190.22	199.07
Profit after Taxation	466.82	514.22

The Company recorded revenue from operations of ^12,051.02 lakhs during FY 2025-26 as against ^13,834.25 lakhs during FY 2024-25. Revenue from operations consequently declined by approximately 12.89%.

Despite the decline in revenue, the Company remained profitable and reported Profit After Tax of ^464.82 lakhs for FY 2025-26 compared with ^514.22 lakhs in the previous financial year. The reduction in PAT was approximately 9.61%, which was lower than the decline in revenue, reflecting the Companys continued focus on cost management and operational efficiency.

Other income increased from ^41.78 lakhs in FY 2024-25 to ^216.59 lakhs in FY 2025-26. Consequently, total income stood at ^12,267.61 lakhs during FY 2025-26.

Profit Before Tax stood at ^656.69 lakhs compared with ^713.29 lakhs in the previous year. Financial expenses declined from ^292.73 lakhs to ^272.45 lakhs, while depreciation declined from ^155.37 lakhs to ^131.20 lakhs.

6. OPERATIONAL PERFORMANCE

During FY 2025-26, the Company continued its operations across its principal product categories comprising pipes, cables, wires, fittings and allied products.

The Companys PVC and HDPE pipe portfolio addresses applications including agriculture, irrigation, water supply, drainage, sewerage and industrial requirements. Its electrical products cater to power, domestic, construction and engineering applications. The Company also continues to develop its bus- body and fabrication activities.

The diversified product portfolio enables the Company to participate in different market segments and reduces dependence on any single end-use industry. The Company remains focused on maintaining product quality, improving manufacturing efficiencies and strengthening its market presence.

7. SEGMENT-WISE BUSINESS OUTLOOK Pipes and Water Products

The long-term outlook for PVC and HDPE pipes remains positive, supported by demand from irrigation, drinking-water supply, sanitation, drainage, agriculture and infrastructure projects.

Government expenditure on water infrastructure, rural development, irrigation and urban infrastructure is expected to provide continuing opportunities for organised pipe manufacturers.

Electrical Wires and Cables

Demand for electrical wires and cables is closely linked to construction, electrification, infrastructure development, industrial activity and replacement demand. Continued expansion of electricity distribution infrastructure and residential and commercial construction provides a favourable medium-to-long-term environment.

Agriculture and Irrigation

Agriculture remains an important market for the Companys pipes, cables and irrigation-related products. Increasing emphasis on efficient water utilisation, micro-irrigation and modern irrigation infrastructure can create additional demand for HDPE pipes, PVC pipes, sprinklers and related products.

Bus Body and Fabrication

The Companys bus-body fabrication activity provides diversification beyond its traditional pipes and cables business. Demand for buses and commercial transportation infrastructure may provide opportunities as public transportation and institutional mobility requirements expand.

8. OPPORTUNITIES

The Company believes that the following factors may provide opportunities for future growth:

a) Expansion of Indias water and sanitation infrastructure.

b) Increasing government and private-sector expenditure on infrastructure.

c) Growth in irrigation and water-management projects.

d) Increasing urbanisation and residential construction.

e) Expansion of electrical and power infrastructure.

f) Replacement of conventional piping systems with PVC and HDPE products.

g) Increasing demand for durable and corrosion-resistant piping solutions.

h) Expansion of dealer and distributor networks.

i) Increased focus on domestic manufacturing and the "Make in India" ecosystem.

j) Cross-selling opportunities across pipes, cables, fittings and allied products.

k) Expansion of the Companys bus-body fabrication activities.

l) Increasing preference for organised manufacturers offering quality-certified products.

The Companys broad product portfolio and established "REX" brand position it to participate in these opportunities. The Companys prospectus describes its strategy as involving continued technological upgradation, modernisation of manufacturing facilities and focus on quality and customer service.

9. THREATS, RISKS AND CONCERNS

The principal risks and uncertainties affecting the Companys business include:

Raw Material Price Volatility

PVC, polymer and copper prices can be volatile and may materially affect the Companys manufacturing costs. Sharp increases in raw-material prices may not always be immediately recoverable from customers.

Geopolitical Risk

International conflicts and geopolitical tensions may result in fluctuations in crude oil, polymer and metal prices, shipping costs and availability of imported materials. The continuing Russia-Ukraine conflict and Middle East tensions illustrate the potential for geopolitical developments to affect global commodity and logistics markets.

Competition

The pipes and cables industry is competitive, with organised and unorganised players operating across various price and product segments. The Company may face pressure on selling prices, margins and market share.

Interest Rate and Financing Risk

Changes in interest rates and availability of working-capital finance may affect finance costs and profitability.

Working Capital Risk

Manufacturing operations require adequate working capital for procurement of raw materials, inventory and receivables. Commodity-price volatility can increase working-capital requirements.

Regulatory and Environmental Risk

Changes in product standards, environmental regulations, plastic-related regulations and government policies may require investments in technology, compliance and manufacturing processes.

Demand Risk

A slowdown in construction, infrastructure, agriculture or industrial activity may adversely affect demand for the Companys products.

Supply Chain Risk

Disruptions in transportation, logistics, availability of raw materials and geopolitical events may affect production schedules and delivery timelines.

10. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains internal control systems commensurate with the size, scale and complexity of its operations. The internal control framework is intended to safeguard assets, prevent and detect errors and irregularities, ensure accuracy and completeness of accounting records and support timely preparation of reliable financial information.

The Companys internal control systems include appropriate controls over procurement, inventory, production, sales, receivables, payments and financial reporting.

The Audit Committee and the Board periodically review the adequacy and effectiveness of internal financial controls and the Companys risk-management framework.

11. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human resources continue to be an important component of the Companys operational performance. The Company recognises that skilled and committed employees are essential for maintaining product quality, operational efficiency, customer service and sustainable growth.

The Company continues to focus on maintaining a safe and productive working environment, employee development and compliance with applicable labour and employment requirements.

Industrial relations during the year remained conducive to the Companys operations.

12. TECHNOLOGY, QUALITY AND MANUFACTURING

The Company continues to focus on technology upgradation and modern manufacturing practices to improve product quality, productivity and operational efficiency.

The Companys product portfolio includes PVC and HDPE pipes manufactured for different applications and electrical products designed to meet relevant quality and industry requirements. The Companys publicly available information states that its manufacturing operations use modern infrastructure and that the Company focuses on continuous technological upgradation and quality standards.

Going forward, the Company intends to continue improving manufacturing processes, product quality and operational efficiencies in line with changing customer requirements.

13. FINANCIAL AND LIQUIDITY MANAGEMENT

The Company continues to maintain focus on prudent financial management and efficient utilisation of working capital. The reduction in financial expenses during FY 2025-26 compared with FY 2024-25 reflects the Companys continued attention to financing costs.

The Company will continue to balance working-capital requirements with the need to maintain sufficient liquidity for uninterrupted operations and future business opportunities.

14. OUTLOOK

The medium-to-long-term outlook for the Companys core businesses remains positive, supported by Indias infrastructure-development requirements, water-management initiatives, agricultural demand, urbanisation, housing and construction activity and expansion of electrical infrastructure.

At the same time, the Company remains mindful of short-term uncertainties arising from commodity- price movements, geopolitical developments, freight costs, competition and overall economic conditions.

The Company intends to focus on:

• strengthening its existing product portfolio;

• improving manufacturing efficiency;

• enhancing product quality;

• strengthening distribution and dealer relationships;

• expanding market reach;

• prudent working-capital management;

• controlling operating and financing costs;

• leveraging opportunities in water and infrastructure development; and

• Selectively expanding higher-value and complementary product categories.

The Companys diversified product portfolio across water, agriculture, electrical and infrastructure applications provides a reasonable platform for sustainable growth.

15. CAUTIONARY STATEMENT

This Management Discussion and Analysis contains statements concerning the Companys future business prospects, plans, expectations and strategies, which may constitute forward-looking statements. Such statements are subject to various risks and uncertainties, including changes in economic conditions, government policies, commodity prices, interest rates, competition, technological developments, geopolitical developments, supply-chain disruptions and other factors that may cause actual results to differ materially from those expressed or implied.

The Company assumes no responsibility for publicly updating or revising any forward-looking statements based on subsequent events, information or developments, except as may be required under applicable laws and regulations.

The discussion above should be read together with the Companys audited financial statements and related notes for the financial year ended March 31^st, 2026.