Tirupati Tyres Ltd Management Discussions

Annexure-II

Industry Overview

The Indian Tyres Industry is an integral part of the Auto Sector. The Indian tyre manufacturing industry, a pivotal player in the automotive ecosystem, has witnessed exponential growth over the years. With an extensive network of manufacturers catering to diverse market segments, the industry contributes significantly to the nations economy. There is a rise in the demand for tyres due to the growing production of automobiles. The tyre industry in India has the potential to become a global leader in Indian manufacturing and also across the globe. The industry exemplifies the Make in India initiative, having achieved self-reliance. India is among the leading tyre manufacturers globally.

Apart from conventional radial and bias tyres, the industry offers advanced smart, noise reduction, puncture-proof and electric vehicle versions. It is also expanding presence in the premium and luxury tyre segments, which are dominated by imports. Demand for tyres in the domestic market is expected to remain robust going ahead as the automobile industry continues to scale new highs amid a positive economic environment. The Indian tyre industry has been witnessing a rise in the demand for production of tyres for export and domestic sales. Additionally, a large and growing population of vehicles will continue to support tyre demand in the replacement market.

According to ICRA Limited (Credit rating Agency) the domestic tyre sale volumes are expected to see a moderate growth of 4-6 per cent this fiscal after witnessing an estimated pace of 6-8 per cent in the previous financial year. This growth in the last fiscal was driven by factors such as elevated base and subdued growth in the commercial vehicle (CV) segment. However, ICRA Limited anticipates domestic demand from original equipment manufacturers (OEMs) in certain consumer segments like PV (passenger vehicle) and two-wheeler as well as for replacement to remain healthy, supporting overall tyre volume expansion in FY 2024-25.While revenues are likely to expand by 5-7 per cent this fiscal, high natural rubber prices and increasing crude prices are likely to moderate the tyre industrys margins by 200-300 basis points (bps) in FY 2024-25 and it expects the replacement market, which contributes to over two-thirds of the industry volumes, to remain stable, aided by healthy demand across the segments.

(All amounts in Lakhs)

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013. Further, the financial performance during the year under reference has been improved in terms of sales. Even though there has been a increase in the turnover, during financial year ended on 31st March, 2025, the

Company has reported Standalone profit before Depreciation & Tax of Rs. 133.18 Lakhs.

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018, the Company is required to provide details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor. However, there were no significant changes which needs to be reported in the current year as compared to the previous year.

Revival in economic activity: With the economic growth, demand revival in likely to sustain in consumer durables, particularly in automobiles and it would have a positive impact on the tyre sector. Besides emphasis on infrastructure in terms of development of Roads will also increase demand for tyres.

Improvement in Automobile Industry prospect: Growing economy leads to improving Automobile Industry prospect which further leads to Increasing Original Equipment Manufacturer ("OEM") demand that in turn leads to subsequent rise in replacement demand. With continued emphasis being placed by the Central Government on development of infrastructure, particularly roads, agricultural and manufacturing sectors, the Indian economy and the automobile sector/ tyre industry are poised for an impressive growth.

Access to global sources for raw materials: with the access to global sources for raw materials, Indian tyre industry can stabilize price fluctuation in raw materials and control their margins. Furthermore, Indian tyre companies can also follow and maintain global quality standards and international process and system certifications, which will help them during export.

Like any other Company, your Company is also exposed to various threats like introduction of other transport facilities, cheaper imports of tyres, expectation of rise in natural rubber prices, competition, retention of employees, labour issues, increase in raw material prices and its timely availability, etc.

Risk is an integral and unavoidable component of business. In todays challenging and competitive environment, mitigating risks is imperative. Common risks include changing regulations, competition, business risk, technology obsolescence, investments and retention of talent. Business risk, inter alia, further includes financial risk, social risk, political risk, environmental risk and legal risk. For managing risks more efficiently, the Company has undertaken a detailed risk management exercise and has identified key risks that can have a critical impact on the Companys performance. The Company has in place a robust risk management framework that identifies and evaluates business risks and opportunities.

Our teams are integral to our business. We have embraced a culture of excellence and meritocracy to nurture our people. We believe in selecting the right talent, training them and instilling in them the spirit of passion towards their respective works. We focus on developing the most superior workforce so that the organization and individual employees can accomplish their work goals in service to customers. We aim also at achieving advance flexibility, innovation, competitive advantage and improved business performance. Furthermore, the company places paramount importance on fostering open, transparent communication channels with employees.

Employing a robust on boarding model, the company effectively integrates newly acquired associates into its cultural fabric, fostering a sense of belonging and alignment with organizational values.

The global economy continues to face uncertain macroeconomic conditions, including the ongoing effects of inflation, which have led to higher interest rates and lower consumer confidence. Vehicle manufacturing is expected in the next five years to cater to the growing domestic and export markets. The tyre industry is poised for positive growth in the short to medium term. The industry is hoping to normalize production and recover sales after the harshest year in recent history. It is expected that by 2025, the industry will have to find ways of compensating for falling margins and rising investment.

TIRUPATI TYRES LIMITED strives to innovate and leverage cutting-edge digital technologies to provide its clients with best-in-class goods and services. TIRUPATI TYRES LIMITED is dedicated to delivering safer and smarter goods through customer-focused research and development.

TIRUPATI TYRES has a well-placed internal control system commensurate with our operations size, scale, and complexity. We have a well-defined organisational structure and management procedures to ensure all internal financial controls are adequate and operating effectively. We have built-in policies and procedures to safeguard our assets, maintain proper accounting records, and provide financial information. The internal control and risk management systems are systematically structured and applied per the corporate governance code of our organisation.

This report contains outlook & forward-looking statements based on information sourced from public domain reports by government bodies, industry associations, and others. These statements are subject to various risks and uncertainties, including economic conditions, changes in government policies, reliance on certain business sectors, and other variables. The outcomes or results may significantly vary from those projected in these forward-looking statements. Considering this report alongside the financial statements and related notes provided herein is essential. The company reserves the right to revise these statements without prior notice.