Dolfin Rubbers Ltd Management Discussions

NAMASTE SHAREHOLDERS

The Management discussion and Analysis Report is a reflection of the current state of business of the company. It also deals with opportunities and challenges faced by Company and future outlook.

ECONOMIC AND INDUSTRY OVERVIEW

India is the third-biggest automobile market in the world, the biggest producer of tractors, three-wheelers, and passenger cars, and the second-biggest producer of two-wheelers. In 2024, India produced 5.8 million automobiles in total, which also increased the market share of tyres in India. As the average age of vehicles on Indian roads increases, there is a growing demand for replacement tyres. This has been driven by the increasing awareness of the importance of tyre maintenance and safety.

The demand for tyres is driven by the robust growth of the automotive industry. As the Indian population continues to grow, there is an increasing demand for personal transportation solutions, which has led to a rise in the number of cars, trucks, and motorcycles on the roads. The growing disposable incomes, along with the increasing youth population, are significantly contributing to the growth of the automobile sector, propelling the India tyre market value.

The Indian government is increasingly focusing on manufacturing products locally, supported by various schemes and initiatives. Government schemes such as Atmanirbhar Bharat Abhiyan- Self Reliant India, support the manufacturing of automobiles in the country and aim to make the country a manufacturing hub. This is creating a favourable environment for market expansion in the country. By 2030, the Indian government pledged to have 30% of new car sales in the country be electric.

Furthermore, Indias EV finance sector is expected to grow to USD 50 billion by 2030, as per NITI Aayog and the Rocky Mountain Institute (RMI). According to industry reports, the EV market in India would increase at a CAGR of 36% until 2026. Along with companies exploring the rural markets, greater demand for logistics and passenger transportation has collectively aided the India tyre market growth. Source: https://www.expertmarketresearch.com/reports/india-tyre-market.

(source: https://www.expertmarketresearch.com/reports/india-tyre-market)

GLOBAL ECONOMY

The global recovery is steady but slow and differs by region. .

The baseline forecast is for the world economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2024. A slight acceleration for advanced economies where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2025 and 1.8 percent in 2026 will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025. The forecast for global growth five years from now at 3.1 percent is at its lowest in decades. Global inflation is forecast to decline steadily, from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. Core inflation is generally projected to decline more gradually.

The global economy has been surprisingly resilient, despite significant central bank interest rate hikes to restore price stability. The following points highlights the scenario of global economy ? Global prospects and policies, ? Tracing the Effects of Monetary Policy through Housing Markets, ? Slowdown in Global Medium-Term Growth, ? Trading Places: Real Spillovers from G20 Emerging Markets.

(source :https://www.imf.org/en/Publications/WEO/Issues/2024/04/16/world-economic-outlook-april-2024)

INDIAN ECONOMY

Tyre is one of the most important parts of an automotive. Tyres help the weight of the vehicle absorb stock from the road surface and change or maintain a direction. The steps of growing production by the government and the favourable government sechemes are discussing the market growth. Indian government schemes such as Atmanirbhar Bharat Abhiyan-self Reliant India gives an economic and large amount of INR Rs. 51000 crores to encourage manufacturing of the automotive in India, again fuelling the tyre industry. Beside this, the make in India programme will attract investment in the manufacturing industry and spur higher industrial activity. Tyre industry in India is reached to be worth more than USD 9 billion in financial year 2019 across 40 plus tyre players and 60 plus tyre producing units and employs 2 million employee directly and more than 1 million indirect employments though dealers, retreader etc. 10 Major players in the tyre industry in India hold 90-95% of the total market. Truck & Bus, passenger cars and two wheelers, top 3 and 4 players hold 70 to 80% market share. Top players are MRF, Apollo tyres and JK tyres in both domestic and international markets jointly 60 to 65% of the total market. The separately market share of players in each segment is quite close and no tyre player has a dominant position and pricing power. Hence, total competitive intensity is moderate. The World Bank on April 2 raised its GDP growth projection for India by 20 basis points to 6.6 percent in FY25. The global agencys projection for FY25 is significantly moderate compared to the estimate of a real GDP growth of 7.5 percent in the current financial year. However, it expects growth to pick up in subsequent years as a decade of robust public investment starts yielding dividends. In its second advance estimate of GDP for 2023-24, Indias statistics ministry pegged the current years growth rate at 7.6 percent, 30 basis points higher than its first advance estimate of 7.3 percent. The expected slowdown in growth between 2023-24 to 2024-25 mainly reflects a deceleration in investment from its elevated pace in the previous year. However, growth in services and industry is expected to remain robust, the latter aided by strong construction and real estate activity.

INDIAN AUTO COMPONENTS OVERVIEW

The Auto Components industry in India is expected to grow to $200 Bn by 2026.

India is set to manufacture 5 Lakh EV three wheelers, at least 55,000 EV four wheelers and 7000 EV buses by 2024.

Indias automotive industry is undergoing considerable change. Two-wheelers have traditionally been the most dominant form of transportation in the country and still are, but a fast-emerging middle class has made passenger vehicles more popular and with this rise, emphasis is being placed on the automotive aftermarket as well to service the needs of these vehicles. Following the Automotive Mission Plan 2026 that aims to place India amongst the top three global auto giants, the auto components sector expects to reach USD 80 billion in exports by 2026, with 23.9% annual growth.

Robust Demand	Export Opportunities	Policy Support	Competitive Advantage
*Growing working population and expanding middle class are expected to remain key demand drivers.	*India is emerging as a global hub for auto component sourcing and the industry exports over 25% of its production annually.	*100% FDI is allowed under the automatic route for two components sector.	*A Cost effective manufacturing base keeps costs lower by by 10-25% relative to operations in Europe and Latin America.
*India is witnessing robust demand for auto components amid ongoing shift in global supplying chain.	*Auto component exports are expected to grow and reach US$ 30 Billion in FY26.	*Production linked Incentive (PLI) Schemes on automobile and auto components are expected to b ring a capex of Rs. 74,850 Crore (US$ 9.58 Billion) in the next five	*India is the second d largest steel producer globally, thus has a cost advantage.
*With plans to reduce auto components import dependence, domestic players are expected to witness a demand surge.	*By FY28, The Indian auto industry aims to invest Rs. 58,000 Crore (US$7 Billion) to boost localization of advanced components like electric motors and automatic transmissions, reducing imports and leveraging ‘ China plus one trend	years. *The Bharat New Car Assessment Program (BNCAP) will not only strengthen the value chain of the auto component sector, but it will also drive the manufacturing of cutting edge components, encourage innovation and foster global excellence.	*India is emerging as a global auto component sourcing hub due to its proximity to key automotive markets such as ASEAN, Europe, Japan, and Korea.

INDUSTRY STRUCTURE

The modern automotive industry is massive, complex, and in a continual state of flux. The successful manufacturing of an automobile today from drawing board to salesroom floor depends equally upon the expertise of many different professions. There are numerous employment opportunities for those who really want to work in the automotive industry, whether it is in a business, technical, scientific, creative, financial, sales, mechanical, or assembly position. The automotive industry relies on the coordination of four distinct operations: styling, where designers create new automobile looks and features in line with market surveys and that are acceptable to production engineers; engineering, where the intricacies of design are laid out, from engine requirements to electronics, all under price and quality guidelines; manufacturing, where parts are made and the automobile is assembled according to engineering specifications; and sales, where the final product is marketed and sold. Indian tyre market is clearly skewed towards the replacement segment which contributes ~70% of total revenues. Whereas in volume (tonnage) terms the replacement segment contributes ~60% indicating realizations in the after-market are clearly higher than OEMs (Original Equipment Manufacturer) market. Based On Products Truck & Bus (T&B), Passenger Vehicle (PV), 2/3-Wheeler, Off-Highway Tyres (OHT) & Others

T&B tyres in India generates the major revenue i.e. 55% of total revenue whereas globally its the PCR (Passenger Car Radials) contribute the largest portion of the revenue. This is mainly because of very low penetration of passenger vehicles in India below 20 per 1,000 people whereas in China the number is ~69 per 1,000 people and 786 per 1,000 people in US. In terms of volume (tonnage) T&B contributes around ~50% of the total volume.

The demand from OEMs is widely spread across the segment where T&B contributed ~35% and PVs & 2/3 Wheelers contributed ~25% & ~22% respectively. In term of the replacement segment the demand was more skewed towards the T&B tyres which contributed ~61% and PVs & 2/3 Wheelers contributed ~14% & ~9% respectively.

OUTLOOK FOR THE FINANCIAL YEAR 2024-25

The automotive industry outlook study involved analysing the recent developments, trends and the performance of the players as well as the overall automobile industry in 2024 along with the projections for 2024. The analysis was based on the sales volume of the vehicles across passenger and commercial segment around the world. The regions covered in the report are North America, Europe, Asia Pacific and Rest of the World. The automotive industry overview includes study of automotive market performance in 2024, key developments achieved in 2024, trends that are likely to impact the market in 2024, major growth segments and opportunities for 2024, automotive vehicle sales in 2025 and track & analyse competitive developments such as deals (partnerships, joint ventures, mergers & acquisitions, collaborations and product developments) alongside other activities carried out by key industry participants. The automotive outlook 2025 is based on analysis of the major milestones achieved in the automotive industry across passenger vehicles and commercial vehicles and other critical aspects that took place in 2024. Whereas, the study also focusses on the rising demand for electric vehicles, advancements in autonomous, 5G connectivity, smart & automated manufacturing, shared mobility and online sales of vehicles in automotive industry shaping the future market.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company is mainly engaged in the business of Manufacturing of Rubber Tyres and Tubes. So the Management considers as this is the only business segment of the Company. The global tire market is becoming increasingly complex but promises significant potential for growth. Tire manufacturers need end-to-end solutions they can use to optimize the availability of their plants, reduce their overall operating costs, and improve their time-to-market. They can do this by taking advantage of all the benefits of digitalization and new business models.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE. (ON STANDALONE BASIS):

OPERATIONAL PERFORMANCE

(INR. in lakh)

Particulars	2024-25	% to Total Income	2023-24	% to Total Income
Revenue	14358.58	99.70	12594.26	99.63
Other Income	42.51	0.29	46.69	0.36
Total Turnover	14401.09	100	12640.95	100

The net turnover of the Company has increased substantially to INR 14401.09 lakh in the year 2024-25 as against INR 12640.95 lakh in the year 2023-24(previous year).

FINANCIAL PERFORMANCE

The details of the financial performance of the company appear in the Balance Sheet, Profit & Loss Account and other financial statements forming part of this Annual report. For financial highlights please refer heading ‘FINANCIAL RESULTS of Boards

Report.

Risk Management

Risk management is the process of identifying, assessing, and prioritizing risks, then deploying resources in a coordinated and cost-effective manner to reduce the probability and/or impact of uncertain occurrences, or to optimise the realisation of opportunities. When there are competing demands on limited resources, risk management provides a mechanism for prioritising. Risk management also aims to detect and manage dangers that could have a significant impact on the company or even bring it down. The risks are classified into strategic risks, operational risks, financial risks and external risks. The Companys proactive approach towards identifying risks and developing mitigation strategy has led to creation of a resilient business model. Its approach to the unforeseen challenges has strengthened its core over the past 28 years, making it stronger and better every day.

Opportunities and Threats

Opportunities remain immense as India is one of the highest growing economy at just below than $4trillion economy. With rise in demand in OE and replacement segment, new opportunities awaits for the company.

Opportunities

? Highly efficient Human Resource A Company needs a talented and proficient human asset to become bigger. Dolfin Rubbers Limited is honored with immense human force all through with great skills. They have put resources into getting assets, and the arrival they get is large.

? Good Organizational Culture While it comes to cutting edge working framework and practical methodologies, your Company will consistently be on the top. From generally rehearsed administration framework to lean assembling subtleties, the Company has set models for the individual organizations.

? Holds an Excellent Brand Image This is one of the most significant strategies of Dolfin Rubbers Limited. At whatever point individuals search for vehicles, they look for the brand name ‘Dolfin Rubbers Limited, and that has kept them a long way in the replacement market.

? Diversified Portfolio Your Company have an enormous number of variants and models of 2 and 3 Wheelers.Dolfin Rubbers Limited. has spread its wings to a wide range of vehicles in this market.

? Throughout India Supply Chain They have outlets, branch organizations, fabricating production lines far and wide. The Indian sales network of Dolfin Rubbers Limited is extremely one of the best quality of this organization.

? High Production Capability Dolfin Rubbers Limited is giving genuine challenge to its peers on this point as they have a high generation limit of creating more than 5 Lakh tyres both tubeless and tube type and more than 50 Lakh tubes every year.

Threats:

? Competition: The organization faces strong competition from rival companies as well as from local players in each regional market in which they work.

? Price fluctuations: The cost of raw materials for tyres, including prices of synthetic rubber, carbon black, chemical solvents, etc., are all extremely unpredictable, posing immense challenges for tyre firms. ? Government Policies: Change in Government policies can adverse effect on the company. ? Competitors Pricing and Discount offers can be a major threat to the company. ? Cheaper Tyres in China: Imported Chinese tyre goods are cheaper and thus pose a tough market competition. Imports by the Chinese will adversely affect the profitability of Goodyear Tyres. ? Volatility in rubber production: Indian rubber production is volatile and generally lower than the demand produced, and therefore the price of rubber fluctuates in light of demand. It has an impact on the firms pricing policy.

Adequacy of Internal Control Systems

The Company havean adequate Internal Control Systems in process which ensures that all the transactions are satisfactorily recorded and reported and all assets are protected against loss from an unauthorized use or otherwise. The Internal control system is adequate and commensurate with the nature of its business and size of its operations, though continues efforts are being made to strengthening the same. The management also reviews the internal control systems and procedures to ensure its application.

Material Development in terms of Human Resources

The Company always believes that its growth is closely linked with the growth and overall development of its employees and to create an environment where excellence is recognized and rewarded. The target is to place right people at right position and to enhance the efficiency, working speed, competency and time management skill of its employees. The Companys endeavour is to create an environment where people can use all of their capabilities in promoting the business of the Company. Number of on rolls people employed as on March 31, 2025 is 780. The industrial relation continued to remain cordial during the year.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

As per SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to provide details of significant changes (change of 25% or more as compared to immediately previous financial year) in key financial ratios. Accordingly, the Company has identified the following ratios as key financial ratios:-

Ratio	Unit	FY 2024-25	FY 2023-24	% Change
Current Ratio	Times	1.77	1.82	-2.45
Debt Equity Ratio	Times	0.54	0.52	3.48
Debt Service Coverage ratio	Times	7.55	5.85	29.20
Inventory Turnover Ratio	Times	6.35	6.95	-8.61
Trade Receivables Turnover Ratio	Times	8.62	8.19	5.28
Trade Payable Turnover Ratio	Times	26.63	15.54	16.64
Net Capital Turnover Ratio	Times	7.91	8.08	-2.09
Return on Equity	%	16.62	17.93	-7.29
Net Profit Ratio	%	3.57	3.77	-5.29
Return on Capital Employed	%	21.97	23.28	-5.63

*Due to increase in debt.

Cautionary Statement

Statements made on Management Discussion & Analysis, describing the Companys expectations or predictions are "forward-looking statements". These statements are based on certain assumptions and expectation of future events. The actual results may differ from those expected or predicted. Prime factors that may make a difference to the companys performance include market conditions, input cost, Government policies/regulations, economic conditions, and other incidental factors.

	For and on behalf of the Board
	Dolfin Rubbers Limited
	Kawaljit Singh
	Chairman & Managing Director
Date: 23rd August, 2025
Place: Ludhiana