Sirca Paints India Ltd Management Discussions

REPORT ON INDIAN ECONOMY

Current Performance (FY 2024-25)

The Indian economy continued its strong growth trajectory in FY 2024-25, marked by robust domestic consumption, supportive government policies, and increasing investments across infrastructure and housing. In this context, the paints and coatings sector has benefitted from heightened activity in construction and home improvement. Consistent GDP growth and moderating inflation provided a favorable macroeconomic environment for the industry.

GDP Growth: India maintained one of the highest GDP growth rates among major economies, underpinning domestic demand in paint and coatings markets.

Inflation: Inflation pressures remained moderate due to supply-side interventions and easing commodity prices.

Fiscal Environment: The governments sustained focus on capex and fiscal discipline continued to support capital-intensive sectors such as infrastructure, housing, and thus coatings.

Capital Expenditure: Ongoing government spending on major infrastructure has directly stimulated demand for coatings in residential and commercial projects.

Tax and Regulatory Support: Continued streamlining of business regulations, incentivizing Make in India and affordable housing projects, bolstered the demand for paints.

FDI & Ease of Doing Business: India remains a top FDI destination in Asia, supporting technology transfers and better market practices.

Sustainable Growth: Enhanced focus on eco-friendly and low-VOC (volatile organic compound) products in response to increasing consumer and regulatory shifts.

Product Innovation: Expanding premium, customized, and technologically-advanced wood coatings and decorative paints.

Wider Reach: Investments in branding and distribution have extended Sircas footprint in both metros and Tier-N/NI cities.

Digital Initiatives: Further integration of digital tools and direct-to-customer channels to improve customer experience and efficiency.

Market Environment: The Indian paints industry recorded double-digit growth, supported by rising urbanization, home improvement trends, and government thrust on affordable housing.

Premium Segment Growth: Premium products (decorative, wood coatings) outpaced the overall market due to rising consumer preferences and increasing disposable incomes.

Innovation and Sustainability: Eco-friendly, low-VOC, and nanotechnology-enhanced coatings gaining traction due to changing regulations and environmental awareness.

Total Revenue: Rs. 374 crore in FY 2024-25, representing a healthy year- on-year growth of about 20% from Rs. 311.72 crore in FY24.

EBITDA: The company reported an EBITDA of roughly Rs. 69 crore for the full year, with operating margins close to 19%.

Profit After Tax (PAT): Net profit after tax for the year was about Rs. 49 crore

Earnings Per Share (EPS): The EPS for FY 2024-25 stood at approximately Rs. 8.96, indicating steady profitability and shareholder value.

Continued government focus on housing and infrastructure is expected to drive sustained demand for decorative and wood finishes. Rising discretionary spending among Indian consumers supports growth in premium paints and coatings.

Export opportunities emerging with rising reputation for Indian manufacturing quality.

Raw material price volatility and currency fluctuations may impact input costs.

Increased competition in the premium wood coating segment requires continuous innovation and brand differentiation.

Sirca Paints is well positioned to consolidate its leadership in the premium coatings market, leveraging product innovation, geographic expansion, and operational excellence. With a strong macroeconomic backdrop and rising consumer sophistication, the company targets .above-industry.-average growth. Strategic investments in sustainability, product R&D, and digital transformation will enhance resilience and unlock further value in FY26.

Sirca has implemented robust internal controls and compliance systems in line with regulatory requirements, with a focus on process automation and risk management. The organization supports talent development through ongoing training and a performance-driven culture, resulting in high employee engagement.

This analysis contains forward-looking statements based on current expectations. Actual results may materially differ due to changes in external conditions, global economic volatility, input cost movements, or changes in government regulatory and tax policy.