Admach Systems Ltd Management Discussions

Economic Review

Global Economy

The global economy faced a challenging operating environment during QY 2025 as ongoing conflicts in the Middle East, rising trade tensions and policy uncertainties weighed on economic activity. The renewed imposition of tariffs, supply chain disruptions and heightened geopolitical risks affected global trade and investment flows, while financial markets experienced periodic volatility. Despite these headwinds, easing inflation across several major economies, resilient labour markets and supportive fiscal measures helped sustain economic momentum. According to the International Monetary Fund (IMF), global GDP growth is projected to moderate from 3.4% in CY 2025 to 3.1% in CY 2026, before improving marginally to 3.2% in CY 2027.

Economic performance remained uneven across regions. Advanced economies continued to witness modest growth amid softer consumer demand and subdued investment, while Emerging Market and Developing Economies (EMDEs) remained the principal drivers of global expansion, supported by stronger domestic demand and public investment. At the same time, businesses continued to diversify supply chains, strengthen regional trade partnerships and invest in digitalisation and productivity-enhancing technologies to improve resilience. While geopolitical developments, elevated sovereign debt and commodity price volatility continue to pose downside risks, these structural shifts are expected to support global economic activity over the medium term.

(Source: World Economic Outlook by IMF, April 2026)

Outlook

The global economic outlook remains balanced, supported by easing price pressures, improving financial conditions and continued investment in technology and infrastructure. However, the pace of growth is expected to remain moderate as economies navigate evolving trade policies, geopolitical developments and fiscal challenges. Going forward, sustained structural reforms, resilient supply chains and prudent macroeconomic policies will remain important to strengthening global growth and maintaining economic stability.

Indian Economy

Indias economy demonstrated resilience during FY 2025-26, navigating a challenging global environment characterised by geopolitical tensions, evolving trade dynamics, and persistent market uncertainties. Supported by strong domestic fundamentals, sustained public investments, and improving industrial activity, the economy is estimated to have grown by 7.7% during the year. Agricultural activity remained broadly stable despite weather-related disruptions during the kharif season, with favourable rabi conditions and higher horticulture production supporting rural incomes and economic stability. Industrial activity gathered pace, with the sector estimated to expand by 6.2%, up from 5.9% in FY 2024-25, reflecting the impact of continued infrastructure creation, policy support, and improving business confidence.

(Source: https://www.pib.gov.in/PressReleasePage.aspxRsPRID=2269286®=48&lang= 2 ; h ttps://www.pib.gov.in/PressReleasePage.aspxRsPRID=2220800&lang=2®=3)

The Government continued to reinforce Indias manufacturing ecosystem through sustained policy interventions and capital investments. The Production Linked Incentive (PLI) Scheme, spanning 14 sectors, has attracted cumulative investments exceeding ? 216 lakh crore as of April 2026, supporting capacity creation, technology adoption, and domestic manufacturing. Complementing these efforts, the Union Budget FY 2026-27 earmarked ? 12.2 lakh crore, equivalent to 3.4% of GDP, towards capital expenditure, with continued emphasis on infrastructure development, logistics, MSMEs, semiconductor manufacturing, and ease of doing business. These initiatives, coupled with Indias improving innovation ecosystem, evidenced by its rise to 38th in the Global Innovation Index 2025 from 66th in 2019 are strengthening the countrys industrial competitiveness and reinforcing its position as an increasingly attractive global manufacturing destination.

(Source: https://www.pib.gov.in/PressReleasePage.aspxRsPRID=2246085®=3&lang=2; https://www.pib.gov.in/PressReleasePage.aspxRsPRID=2221455®=48&lang= 2 ; https://www.pib.gov.in/PressReleasePage.aspxRsPRD=2219992®=48&lang=2)

Outlook

Indias economic outlook remains constructive, supported by sustained infrastructure investments, a favourable policy environment, and continued emphasis on strengthening domestic manufacturing capabilities. Ongoing investments in industrial infrastructure, logistics, technology, and innovation, together with measures to enhance ease of doing business and deepen global trade integration, are expected to support long-term economic expansion. While global geopolitical and trade-related uncertainties may continue to influence the external environment, Indias expanding manufacturing base, improving competitiveness, and strong investment pipeline position the economy to sustain its growth momentum and create new opportunities across sectors.

Indian Engineering Industry Overview

Indias engineering sector remains one of the countrys most significant industrial pillars, underpinning the growth of infrastructure, manufacturing, construction, automobiles, energy, and capital goods industries. Accounting for nearly 27% of Indias factories and 63% of total foreign collaborations, the sector plays a pivotal role in driving industrial development and technological advancement. Supported by cost-competitive manufacturing, a skilled engineering workforce, and increasing adoption of advanced technologies, the industry continues to strengthen its position as a preferred global manufacturing and engineering destination.

The sector has also emerged as the largest contributor to Indias merchandise exports, accounting for nearly 28% of the countrys total merchandise exports. Engineering exports have witnessed sustained momentum, increasing from USD 109.3 billion in FY 2023-24 to USD 116.67 billion in FY 2024-25, and reaching a record USD 122.43 billion in FY 2025-26, reflecting the resilience and growing global competitiveness of Indian manufacturers despite geopolitical uncertainties and supply chain disruptions. Indian engineering products have established a strong presence across key international markets, including North America, the European Union, the Middle East, and other advanced economies, supported by their quality, reliability, and adherence to global standards.

Government initiatives continue to strengthen the sectors long-term growth prospects. Production Linked Incentive (PLI) schemes, the National Single Window System (NSWS), Quality Control Orders (QCOs), the Market Access Initiative (MAI), the Brand India Engineering campaign, and the One District One Product (ODOP) programme are enhancing manufacturing competitiveness and export capabilities. In addition, Free Trade Agreements with the United Kingdom, the UAE, Australia, EFTA countries, and the proposed agreement with the European Union are expanding market access for Indian engineering products. Complementing these efforts, the ? 25,060 crore Export Promotion Mission (2025-31), digital trade platforms, and continued policy support for MSME exporters are expected to further strengthen Indias position as a globally competitive engineering and manufacturing hub.

Source: https://www.pib.gov.in/PressReleasePage.aspxRsPRID=2270269®=48&lang= 2

Indian Machinery & Equipment Market Overview

Indias machinery and equipment industry has emerged as a key pillar of the countrys industrial and manufacturing ecosystem, contributing approximately 8% of manufacturing value addition and 1.5% to the national GDP. The sector continues to strengthen its position as one of the worlds most attractive manufacturing destinations, supported by robust domestic and global demand, sustained infrastructure investments, expanding industrial capacity, and a favourable policy environment. Amid global geopolitical uncertainties, supply chain realignments, and moderating industrial activity across several advanced economies, India has remained resilient, driven by rising capital expenditure, rapid industrialization, and increasing investments across infrastructure, construction, automotive, mining, energy, defence, and advanced manufacturing.

Indias manufacturing ecosystem is undergoing a structural transformation, supported by the Governments record capital expenditure allocation of ? 12.2 lakh crore for FY 2026-27. The heavy construction equipment market, valued at USD 15.37 billion in 2025, is projected to reach USD 29.50 billion by 2034, while the heavy machinery components market is expected to grow from USD 5.3 billion to USD 91 billion during the same period, reflecting sustained long-term demand for industrial equipment.

India is also evolving from a cost-competitive manufacturing base into a strategic global manufacturing hub, supported by its large domestic market, skilled workforce, and improving ease of doing business. The Governments policy allowing 100% Foreign Direct Investment (FDI) under the automatic route across most manufacturing segments has further enhanced the countrys attractiveness for global manufacturers. At the same time, Free Trade Agreements (FTAs) with countries such as the United Kingdom, Australia, the United Arab Emirates, and EFTA nations, along with the proposed India-European Union FTA, are expected to improve market access, reduce trade barriers, strengthen global supply chain integration, and enhance the international competitiveness of Indian machinery and engineering products. Supported by favourable government policies, expanding manufacturing investments, increasing export opportunities, and the global shift towards diversified supply chains, Indias machinery and equipment industry remains well positioned for sustained long-term growth.

Source: https://themanchiningworld.com/indias-machinery-equipment-sector-demonstrates-strong-resilience-amid-global-uncertainty/

Special Purpose Machinery Market

The global special purpose machinery (SPM) market is witnessing steady growth, driven by the increasing adoption of automation, precision manufacturing, and customised production solutions across industries. The market is estimated to be valued at USD 19.4 billion in 2026 and is projected to reach USD 30.3 billion by 2033, expanding at a CAGR of 6.6% during the forecast period. Rising investments in industrial automation, growing demand for high-precision manufacturing, and the need to improve productivity, product quality, and operational efficiency are accelerating the adoption of special purpose machines. As manufacturers increasingly transition towards smart factories and automated production lines, SPMs continue to play a critical role in enabling high-speed, application-specific manufacturing across diverse industrial sectors.

Applications

Aerospace & Defence: The sector relies on specialised machinery for manufacturing mission-critical components that demand exceptional precision, repeatability, and adherence to strict regulatory and quality requirements.

Automotive: SPMs are extensively used for manufacturing engine components, transmission systems, chassis, and other precision automotive parts, supporting high-volume production with stringent quality standards.

Shipbuilding, Construction & Mining: Heavy-duty SPMs facilitate cutting, welding, material handling, and component processing for large-scale industrial and infrastructure projects.

Original Equipment Manufacturers (OEMs): Special purpose machines enable OEMs to achieve high-volume, precision manufacturing of components and assemblies while improving production efficiency, consistency, and quality.

Machine Shops: Independent and in-house machine shops utilise SPMs for customised machining, fabrication, repair work, and specialised component manufacturing across multiple industries.

Machine Tools & Industrial Manufacturing: Special purpose machines support the production of machine tools, industrial equipment, and precision-engineered components essential for broader manufacturing operations.

Electrical & Electronics: Increasing electronics manufacturing is driving demand for specialised equipment used in producing circuit boards, electrical assemblies, wiring systems, and electronic enclosures.

Market Trends

Accelerating Factory Automation: Manufacturers are increasingly adopting Industry 4.0 technologies, automation, and smart manufacturing solutions to improve productivity, precision, and operational efficiency, driving demand for advanced special purpose machinery.

Integration of AI and IIoT: The incorporation of artificial intelligence (AI), machine learning (ML), and Industrial Internet of Things (IIoT) technologies is enabling predictive maintenance, real-time monitoring, remote diagnostics, and data-driven production optimisation.

Growing Defence and Aerospace Investments: Rising geopolitical uncertainties and increasing global defence spending are accelerating investments in defence manufacturing, aerospace production, and indigenous capability development. This is driving demand for highly specialised, precision-engineered machinery and inspection systems used in the manufacturing of mission-critical components.

Expansion of Aerospace Manufacturing: Growing commercial aircraft demand, increasing aircraft fleet expansion, and localisation of aerospace supply chains are creating opportunities for specialised machinery capable of meeting stringent quality, precision, and regulatory standards.

Shift Towards Modular and Flexible Manufacturing: Manufacturers are increasingly adopting modular machine designs that offer greater flexibility, faster reconfiguration, and scalability to accommodate evolving production requirements.

Focus on Sustainable Manufacturing: Environmental regulations and sustainability objectives are encouraging the development of energy-efficient, resource-optimised, and environmentally responsible machinery with lower operating costs and reduced emissions.

Industrial Expansion Across Emerging Economies: Rapid industrialisation, infrastructure development, and increasing investments across automotive, electronics, steel, defence, and advanced manufacturing sectors in emerging markets continue to create significant long-term growth opportunities for special purpose machinery.

(Source: https://www.persistencermarketresearch.com/market- r esearch/special-purpose-machines-market-asp)

Company Overview

Established in 2008, Admach Systems Limited is a technology-driven engineering solutions company engaged in the design, development, manufacture, export, and installation of customised Special Purpose Machinery (SPMs) and advanced industrial systems for the Indian and global engineering industry. The Company develops application-specific solutions tailored to the unique requirements of customers, enhancing manufacturing efficiency, precision, automation, and productivity across diverse industries, including defence, nuclear & atomic energy, aerospace, mining, steel, automobile, food processing, tooling, and advanced engineering.

Its diversified portfolio comprises special purpose machines, automation systems, assembly machines, packaging machines, product design, and robotic material handling systems. Supported by strong in-house research, design, and engineering capabilities, the Company focuses on delivering innovative high-quality, reliable, and application-specific solutions while maintaining stringent quality standards across its operations. The Company also manages the sourcing of essential materials and components through its supply chain network and provides comprehensive after-sales maintenance, repair, and technical services for machines manufactured and supplied by it across domestic and international markets. As of 31 March 2026, more than 13 customers had been associated with the Company for over 15 years, while it served more than 34 customers during the year, reflecting enduring customer relationships and its ability to deliver customised engineering solutions across markets.

Strengths

? Diversified presence across high-value, mission-critical industries.

? Strong expertise in customised Special Purpose Machinery and automation solutions.

? Advanced engineering capabilities in NDT, X-ray, and precision inspection systems.

? Long-standing customer relationships supported by proven execution capabilities.

? Growing in-house manufacturing through backward integration.

Weaknesses

? Dependence on industrial capital expenditure cycles.

? Longer execution timelines for customised engineering projects.

? Working capital-intensive business model.

Opportunities

? Rising investments in defence, aerospace, and nuclear sectors.

? China-plus-one strategy driving global manufacturing diversification.

? Government initiatives supporting domestic manufacturing and exports.

? Expanding international footprint through exports and technology partnerships.

Threats

? Volatility in raw material and component prices.

? Delays in project execution and customer approvals.

? Global economic and geopolitical uncertainties affecting capital spending.

Financial Overview

( ? in Lakhs)

Particulars	FY 2025-26	FY 2024-25	Growth %
Revenue	6,890.99	5,335.82	29.14%
EBITDA	1,369.35	1,063.83	28.72%
Profit after tax (PAT)	1,001.28	630.25	58.87%

The Company delivered a strong financial performance during FY 2025-26, with revenue increasing by 29.14% to ? 6,890.99 lakh from ? 5,335.82 lakh in FY 2024-25, supported by healthy execution across its diversified project portfolio. EBITDA grew by 28.72% to ? 1,369.35 lakh from ? 1,063.83 lakh, with the EBITDA margin remaining broadly stable at 19.87% compared with 19.94% in the previous year. Profitability strengthened significantly, with PAT rising by 58.87% to ? 1,001.28 lakh from ? 630.25 lakh, resulting in an improvement in PAT margin from 11.81% to 14.53%. The stronger bottom-line growth reflects improved operating leverage and overall financial performance during the year.

Segmental Overview

Geographical Revenue Breakup (%)

Segment	FY24	FY25	FY26
Domestic	99.94	87.39	92.38
International	0.06	12.61	7.16

Human Resource

As a provider of specialised engineering solutions, the Company recognises that technical expertise and execution capabilities are key differentiators. It remains focused on attracting, developing, and retaining a competent workforce capable of supporting innovation, precision manufacturing, and complex project execution. The Company promotes a collaborative work culture that encourages knowledge sharing, continuous skill enhancement, and accountability, while maintaining a strong focus on employee well-being and workplace safety. As on 31 March 2026, the Company employed [ ] people across its operations.

Risk Management

The Company follows a structured risk management framework to identify, assess, monitor, and mitigate risks that may impact its business objectives and long-term growth. The framework encompasses strategic, operational, financial, regulatory, and project execution risks, enabling timely identification of emerging challenges and implementation of appropriate mitigation measures. Through continuous monitoring, prudent decision-making, and a focus on operational resilience, the Company seeks to safeguard stakeholder interests while capitalising on growth opportunities in an evolving business environment.

Internal Controls

The Company has established an adequate system of internal financial controls and internal control processes commensurate with the nature, scale, and complexity of its operations. These controls are designed to ensure the safeguarding of assets, accuracy and reliability of financial reporting, compliance with applicable laws and regulations, and the efficient conduct of business operations. The effectiveness of the internal control framework is periodically reviewed through internal audits and management oversight, with corrective actions implemented wherever necessary to further strengthen governance and operational efficiency.

Cautionary Statement

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations, or forecasts may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events and are subject to various risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied. Important factors that may influence the Companys operations include changes in economic conditions, government policies, industry dynamics, market demand, input costs, competitive pressures, technological developments, and other factors beyond the Companys control. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.