Raw Material Inflation & Pricing • Raw material inflation accelerated due to geopolitical tensions in West Asia • Natural rubber, logistics, and energy costs increased sharply • Q1FY27 raw material costs expected to rise by mid-to-high teens sequentially Price Hikes • India: 6–8% price increase • Europe: ~2% price increase • Management indicated further hikes may be needed to protect margins Capacity & Capex • Plants operating at around 90% utilization across India and Europe • FY27 capex planned at ₹3,500 Cr • Around 80% focused on growth and capacity expansion • India to receive nearly ₹3,000 Cr investments Tax & Balance Sheet • Shifting to concessional tax regime from FY27 • Effective tax rate expected to decline from 34% to 25% • Balance sheet improving through lower leverage and profitability gains Outlook Management remains positive on Indian demand despite commodity cost pressures. Key focus areas: • Capacity expansion • Premium product growth • Margin protection through pricing • Operational efficiency through AI and restructuring Learning Outcome In manufacturing businesses, raw material inflation can pressure margins, making pricing power and operational efficiency critical for profitability.

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