Ador Welding Ltd Management Discussions

For over 74 years, the Company has provided end-to- end welding and cutting products and solutions across India and global markets, with a focus on delivering superior customer experience. The Company aims to build a sustainable organization that supports the welding community, creates employment, and generates stakeholder value, while addressing some of the challenges in this reports "Risk Factors" section.

The welding industry remains integral to Indias manufacturing ecosystem, supporting sectors such as infrastructure, engineering, automotive, railways, defence, shipbuilding, energy and construction. With manufacturing contributing —16—17% to GDP in FY26, the industry benefited from strong infrastructure spending, private investments, and domestic demand.

Despite global challenges like geopolitical tensions and supply chain disruptions, India maintained strong growth momentum. Demand remained robust for welding consumables, equipment, and automation solutions.

There is a clear shift toward advanced, technology-driven solutions such as robotic welding, digital power sources, mechanized systems, and laser applications. Investments in infrastructure, EVs, renewable energy, and smart manufacturing are expected to sustain long-term growth. Organized players with strong technical capabilities and nationwide reach are well positioned to benefit.

The industry is projected to grow at over 6% CAGR up to the year 2028, driven by infrastructure development, urbanization, and manufacturing growth.

• Rising demand for high-performance, technology- driven welding solutions

• Growth in automation, robotics, and smart manufacturing

• Expansion of aftermarket services (repairs, maintenance, spares)

• Government policies supporting domestic manufacturing and BIS compliance

• Skilled workforce availability

• Raw material price volatility (steel, ferro alloys, copper and energy costs)

• Intense competition from domestic and global players

• Supply chain disruptions and geopolitical risks

• Continuous need for technological investment

Indias GDP growth for FY27 is expected at —6.87%, supported by infrastructure spending, domestic consumption, and policy reforms. Government initiatives such as PLI schemes, National Infrastructure Pipeline, and PM Gati Shakti will continue to drive growth.

However, risks remain from geopolitical tensions, inflation, fiscal constraints, currency volatility, and climate-related disruptions. While growth is expected to remain stable, the environment will require cautious and agile management.

• Revenue increased by —2% to INR 1,13,545 lakhs (FY25: INR 1,11,683 lakhs)

• Welding segment revenue: INR 1,07,874 lakhs (growth YoY)

• Flare & process equipment: INR 5,671 lakhs (decline YoY)

• Profitability improved due to operational efficiencies and better product mix

• Other income: INR 1,964 lakhs (includes forex gains, interest, incentives)

• One-time reversal of INR 1,412 lakhs from earlier provisions (litigation settlement)

• Working capital cycle: 93 days (FY25: 89 days)

• Company remains net debt-free

• Net Worth increased to INR 56,387 lakhs (FY25: INR 51,570 lakhs)

• Strong cash flows supported higher treasury investments

The Company maintains robust internal controls aligned with the Companies Act, 2013, covering all key processes such as revenue, procurement, inventory, and financial reporting.

• Risk-based internal audit system overseen by the Audit Committee

• ERP-driven systems ensure data integrity and realtime monitoring

• Strong compliance framework with regular reviews and corrective actions

• Digitized processes have improved operational efficiency and supply chain management

HR initiatives in FY26 focused on building a high-performance, future-ready workforce.

• Strengthened performance management and employee engagement

• Continued investment in technical, behavioural, and leadership training

• Focus on employee wellbeing and inclusive culture

• Enhanced talent acquisition through campus and lateral hiring

• Increased digitization of HR processes

Employee strength: 839 as of 31st March 2026

The information and opinion expressed in this section of the Annual Report may contain certain forward looking statements, which the Management believes are true to the best of its knowledge, at the time of its preparation. The Company and the Management shall not be held liable for any loss, which may arise, as a result of any action taken on the basis of the information contained herein.