Aeron Composites Ltd Management Discussions

Global Economic Outlook

The global economy has moved through a distinctly different phase. The IMFs July 2026 World Economic Outlook Update projects world output to grow 3.0% in 2026 and 3.4% in 2027, broadly unchanged on a cumulative basis from the April 2026. Growth this year reflects two crosscurrents: an energy-price and confidence shock from the conflict in the Middle East, weighing on energy-importing and vulnerable economies, set against an unusually strong, AI-driven technology investment cycle lifting economies integrated into that value chain. Global headline inflation is now projected to rise from 4.1% in 2025 to 4.7% in 2026, before easing to 3.9% in 2027, and global trade growth is expected to slow to about 3.5% in 2026 from 5% in 2025. Advanced economies are seen growing 1.7% in 2026 - the United States near 2.12.3%, the euro area a more modest 1.2% - while emerging Asias technology-integrated economies continue to benefit from AI-linked semiconductor and digital-infrastructure demand.

About the Geopolitical disruptions

Disruptions to oil and petrochemical flows through the Strait of Hormuz following the outbreak of the Iran war have tightened global chemicals supply and lifted prices of plastics and polymer, used in everything from auto parts to toys, to roughly four-year highs. About $20 billion to $25 billion worth of petrochemical products pass through the Strait annually, underscoring the fact that continued disruptions to this flow would push producers to pass the higher costs on to consumers.

The escalation in geopolitical tensions triggered a sharp increase in energy and petrochemical feedstock costs. Crude oil prices rose from around US$69/bbl before the escalation to approximately US$113/bbl, with some quarter-end benchmarks reaching nearly US$118/bbl. This surge had a direct cascading impact on the cost of key petrochemical feedstocks, including naphtha, propane/LPG, benzene and propylene.

This supply shock translated into a sharp increase in polymer prices, with European polyethylene spot prices estimated to have risen by 70-80% between February and April 2026, highlighting the severity and speed of the cost escalation. Analysts said the Straits closure could disrupt nearly 1.2 million barrels per day of global naphtha export flows, further tightening feedstock availability for the production of petrochemicals. The war has sent Asias naphtha refining margin above $400 a ton over Brent crude from about $108 a ton before the conflict started, according to LSEG data.

For materials intensive industry, the practical read-through is unchanged in direction even if the drivers have shifted: infrastructure, energy transition and mobility capex continue to be the structural pillars of demand for lightweight, corrosion-resistant, sustainable materials, and Fiber Reinforced Polymers remain strategically positioned as an enabler of that transition. FRP composites, particularly those reinforced with glass fiber and carbon fiber, are gaining traction as they enable weight reduction without compromising structural integrity, thereby supporting efficiency and performance goals.

Source: IMF, World Economic Outlook Update, July 2026 (imf.org), Reuters.

2. Indian Economic Outlook

India remains the worlds fastest-growing major economy for a fourth consecutive year. FY 2025-26, delivered real GDP growth estimated at 7.6%, up from 7.1% in FY25, on the strength of manufacturing, services, consumption and investment. Growth was not linear through the year: Q1 FY26 GDP surprised at a five-quarter high of 7.8%, and Q2 FY26 accelerated further to 8.2%, well above the RBIs own projections for those quarters, before Q3 FY26 moderated to 7.8% amid a slower agriculture and non-manufacturing print. The Economic Survey 2025-26 projects FY27 real GDP growth at 6.8-7.2%, with Indias potential growth estimated at around 7%, and the RBIs Monetary Policy Committee, at its August 2026 review, raised its own FY27 growth forecast to 6.7%.

On prices and rates: headline CPI inflation, having stayed below the RBIs 4% target for sixteen consecutive months, rose back above target to 4.4% in June 2026, though Q1 FY27 inflation averaged a more benign 3.9%. The RBI now expects inflation to rise further and peak near 5.9% in Q3 FY27, driven by food and fuel, before moderating; its FY27 CPI forecast stands at 5.0%. Consistent with this, the RBIs Monetary Policy Committee held the repo rate unchanged at 5.25% at its August 2026 meeting (3-5 August 2026) - the fourth consecutive hold following the last cut, from 5.5% to 5.25%, in December 2025 - retaining a neutral stance . This compares with the 5.5% repo rate and cumulative 100 bps of FY25 easing referenced in last years report.

The structural demand remain firmly in place and in scale, extended by the Union Budget 2026-27, the Economic Survey 2025-26, and the latest reported progress under PM Gati Shakti:

• PM Gati Shakti National Master Plan: now integrates infrastructure planning across 58 ministries/departments using more than 3,291 data layers. As of 11 August 2026, its Network Planning Group had evaluated 396 infrastructure projects worth approximately ?18.66 lakh crore, of which 256 stood sanctioned and 198 were under implementation; separately, the PRAGATI review platform has tracked over ?85 lakh crore of projects and resolved 2,958 implementation issues.

• Union Budget 2026-27 capex step-up: the Centres capital expenditure was raised to ?12.2 lakh crore (3.1% of GDP, up from ?11.2 lakh crore in FY26 BE), with effective capex including capex support to states/UTs at ?17.1 lakh crore, or 4.4% of GDP, the highest in a decade. Within this, the Ministry of Road Transport & Highways allocation rose roughly 8% to ?3.09-3.10 lakh crore for FY27, and NHAIs allocation rose 10% to ?1.87 lakh crore, alongside a stated policy of reducing NHAIs own debt.

• Physical network growth: the national highway network has grown to 1,46,572 km as of March 2026 (from 91,287 km in 2014), including 45,516 km of four-lane-or-wider highway and 22,590 km completed under Bharatmala; I ndias metro network has expanded to over 1,155 km across 26 cities (from 248 km across 5 cities in 2014), carrying daily ridership above 1.15 crore passengers both direct proxies for structural-profile, handrail, cable-tray and (increasingly) GFRP rebar demand.

• Urban infrastructure / Smart Cities: the Smart Cities Mission formally closed on 31 March 2025, but continued completing sanctioned work through FY26 - 7,790 of its tendered projects, worth ?1,56,257 crore, stood completed as of March 2026; successor urban programmes, including PM Awas Yojana (Urban) 2.0, continue to sustain urban- infrastructure capex.

Source: Economic Survey 2025-26 / PIB (pib.gov.in); Business Standard, NSO first advance/quarterly GDP estimates (business-standard.com); RBI MPC Resolution, August 2026 (rbi.org.in, via India Infoline / IndiaBonds / JM Financial coverage); BusinessToday, 27 Feb 2026; PIB, Union Budget 2026-27 Highlights (1 Feb 2026); ANI/Tribune India, 11 Feb 2026 (effective capex); Angel One / ETV Bharat / PRS Legislative Research/Foxmandal, Union Budget 2026-27MoRTH & NHAI allocations; IBEF, Indias infrastructure push, 14 Aug 2026.

3. Industry Overview

3.1 Global FRP/Composites Industry

Independent market estimates continue to place the global FRP/fiber- reinforced-polymer composites market on a steady growth path, though as is typical for this industry different research houses use different scope definitions, so figures vary meaningfully by source. Recent 2026 estimates range from approximately USD 83-114 billion in 2026, growing at a CAGR of roughly 5.2-7.6% to reach an estimated USD 107-220 billion by the early 2030s, depending on the study. Asia-Pacific continues to hold the largest regional share (~45-46% in 2025-26) and is also expected to register the fastest regional growth.

Fiber-Reinforced Polymer (FRP)

Composites Market Market Size in USD Billion

3.2 Global GFRP Rebar Industry

Estimates for the global GFRP rebar market in the mid-2020s range from approximately USD 0.5-1.5 billion, projected to reach roughly USD 1.7-3.2 billion by the early-to-mid 2030s, at CAGRs quoted between 8% and 12.1% depending on scope and forecast horizon. Asia-Pacific - led by India, China, Japan and South Korea is consistently flagged as the fastest-growing region, and coastal, bridge, tunnel and marine infrastructure remain the core applications

3.3 Indian FRP/GFRP Rebar Industry

The India-specific FRP rebar market is still small in absolute terms but is growing at the fastest rate within our portfolio. Industry research pegs the India FRP rebar market at roughly USD 20 million in 2024, projected to grow at a CAGR of approximately 17.3% through 2030 where the market was sized in rupee terms at ?300-500 crore. Demand continues to be underwritten by NHAIs expressway pipeline and the FY27 Budgets road/highway allocation of ?3.09-3.10 lakh crore to MoRTH (up from ?2.76 lakh crore in the FY26 Budget), plus coastal and marine infrastructure projects. As before, Union Minister for Road Transport and Highways Shri Nitin Gadkari remains a vocal advocate for GFRP rebar adoption in national highway construction, and successful reference projects such as the Bandra-Worli Sea Link, the Mumbai Coastal Road and Gujarat water-treatment installations continue to build the case for wider adoption.

3.4 Emerging Segment: Carbon Fiber Reinforced Polymer (CFRP)

The global carbon-fiber/CFRP opportunity remains large and fast-growing, though quoted figures again vary by scope - narrower CFRP-only market estimates put the 2026 market at roughly USD 12 billion, growing to ~USD 21 billion by 2032 (CAGR ~9.3%), while broader studies covering carbon fiber plus CFRP together size the market at roughly USD 37 billion in 2026, growing to ~USD 79 billion by 2032 at a CAGR of over 13%. Both scopes point the same direction: rising adoption in wind-energy, automotive and renewable-energy applications.

Source: Mordor Intelligence (Jan 2026); Fortune Business Insights; MarketResearch.com/VPA Research (Feb 2026); Persistence Market Research; Verified Market Reports; Spherical Insights; MarketsandMarkets (GFRP Rebar); 6Wresearch/ResearchAndMarkets (India FRP Rebar); Entrepreneur India (May 2026); Jivial Composites (2026); ResearchAndMarkets (CFRP, various).

4. Company Overview and FY 2025-26 Performance

4.1 Background of the company AERON COMPOSITE LIMITED remains, as described in our founding narrative, one of Indias leading FRP/GRP product manufacturers, founded in 2011, offering design, prototyping, manufacturing, installation and after-sales support across an 13+ product portfolio.

Our export recognition has advanced from Star Export House to Two Star Export House status, and exports contributed 52% of FY26 revenue, against sales into 39+ countries and 800+ customers .

4.3 Manufacturing Processes

Aeron uses diverse manufacturing technologies to deliver world-class FRP products:

® Pultrusion: continuous production of beams, handrails, ladders

® Moulding: Moulded gratings,

® FRP Rod: FRP Rod for Fiber Optic Cable

® FRP Rebar: FRP Rebar for Construction

® Hand Lay-up: Canopies, roofing, customized products.

® Machining/Fabrication: precision-cut profiles for modular assembly

4.2 T ransition to Fully Owned Factory

• The single biggest operational milestone: our new, fully owned 51,671 sq. mtr. manufacturing facility at Mehsana, Gujarat - described last year as in the process of transitioning is now fully operational

• The installed capacity ramped to its full 23,415 MT. This closes out the capacity-expansion story we opened last year and shifts the Companys focus toward utilisation and margin capture from FY27 onward.

Benefits: reduced rental overheads, higher efficiency, lower wastage, and capacity to scale new business lines (GFRP Rebar, CFRP products)

Manufacturing Process for FRP Pultruded Products

Pultrusion is a manufacturing process used to produce continuous lengths of fiber-reinforced polymer (FRP) profiles with constant cross-sections. The process involves pulling fiber reinforcements, such as glass fibers or carbon fibers, through a resin bath, where they are thoroughly impregnated with a liquid resin. The impregnated fibers then pass through a shaping die, where they are formed into the desired profile shape. Finally, the profile is pulled through a heated die or curing chamber, where the resin is cured (polymerized), resulting in a solid, composite profile with excellent strength- to-weight ratio and corrosion resistance.

Heres a detailed explanation of the Pultrusion process:

Purchase, preparation & feeding of Raw Material	Fibre Placement	Resin Mixing
Final Inspection & Quality Control	Pulling	Heating

Finishing	Packaging & Shipping

Manufacturing Process for FRP Moulded Gratings:

Molded gratings are made through a process involving the combination of continuous glass fibers and resin in an open mold. Typically, this process starts with the placement of continuous glass fibers (usually in the form of roving) into a mold. The fibers are then impregnated with a liquid resin, often polyester or vinyl ester, using either a vacuum infusion or hand lay-up method. Once the mold is filled, the resin is cured through heat and/or chemical catalysts to solidify the composite material. After curing, the molded gratings are demolded/ejected and trimmed to the desired dimensions.

Purchase of Raw Material -1	1 Resin Mixing Molding Process	- Layering & Curing ,
		1
Packaging & Shipping	Quality Check	Demolding & Finishing

Manufacturing Process for FRP Rods

This is a variation of the Pultrusion process where UV (ultraviolet) curing is employed to cure the resin rather than traditional heat curing. In this process, UV-sensitive resins are used, which polymerize when exposed to ultraviolet light. The impregnated fibers pass through a UV curing chamber where they are exposed to UV light, causing rapid curing of the resin and solidification of the composite material. This method is often used for producing FRP rods used as central strength members in Optic fibre cables.

Raw Material Selection	Resin Mixing	Impregnation
		1
Quality Control	Cutting & Rewinding	Curing

i

Packaging and Shipping

Source: RHP

4.4 Competitive Strengths

® Diverse portfolio: 13+ FRP product lines plus GFRP Rebar.

® Integrated operations: design—prototyping— manufacturing — installation.

® Innovation focus: DSIR-approved R&D unit

® Export leadership: Presence in 39 countries.

® World class Infrastructure manufacturing facility

Source: RHP & Investor PPT

5. Product Portfolio & Segment Overview

FRP/GRP STRUCTURAL PROFILES

These are the components used in a variety of industrial and commercial applications. These profiles are available in diverse shapes including I-beams, channels, angles, and square sections.

They are engineered to replace traditional materials like steel and Aluminium due to various properties like Corrosion resistant, light weight, high strength to weight ratio and Durability.

FRP/GRP CABLE TRAY

FRP/GRP cable trays are used for supporting and routing electrical cables in industrial, commercial, and public infrastructure projects. These trays offer a durable, and corrosion-resistant solution for cable management, ensuring the protection and organization of electrical cables.

FRP/GRP cable trays come in two main types: ladder type cable trays and perforated type cable trays, each designed to meet specific needs and applications.

FRPDECK

FRP decks are suitable for pedestrian walkways, bridges, platforms, and other structural applications where strength and longevity are crucial. These decks are made from Fiber Reinforced Polymer(FRP), providing an alternative to traditional decking materials such as wood, steel, and concrete.

FRP decks are durable, lightweight, and corrosion-resistant platforms used in a variety of industrial, commercial, and public infrastructure applications.

FRP HANDRAILS

Fiber Reinforced Polymer (FRP) handrails are a type of railing system made from composite materials such as fiberglass reinforced plastic.

These are designed for safety and support in industrial, commercial, and public infrastructure applications. These handrails offer a durable, and corrosionresistant solution.

FRPLADDER

FRP ladders are used in industrial and commercial settings, providing a safe, durable, and corrosion-resistant climbing solution. These ladders are designed to replace traditional materials due to features like slip resistant, corrosion resistant etc.

We Offer wide range of Ladders such as Manhole Ladder,

Platform Ladder, Step Ladder, Safety Cage Ladder. FRP Ladders are required for doing electrical cable/equipment installation due to nonconductive and light weight properties of FRP £

FRPPOLES

FRP poles are used for lighting, utility, and communication applications, providing a lightweight and durable alternative to traditional materials.

These poles are designed to withstand harsh environmental conditions while maintaining structural integrity being corrosion resistant, lightweight, durable and non-conductive

FRP CROSS ARM

FRP cross arms are integral components of electrical transmission and distribution networks, providing support for power lines and other equipment. These cross arms are made from FRP materials, ensuring they can withstand the demanding conditions of electrical infrastructure like light weight, high strength, Non-conductive etc.

FRP MOULDED GRATINGS

FRP Gratings are widely used for flooring, walkways, anc platforms in industrial and commercial settings. These gratings provide a safe, durable, and corrosion-resistant alternative to traditional metal gratings.

These gratings are typically used in applications requiring bi directional strength and high chemical resistance. By choosing ¦ he appropriate type of FRP grating for a specific application, one can ensure optimal performance, safety, and durability, making these gratings a smart investment for any project.

FRP ROD FOR OPTIC FIBRE CABLE

FRP Rods are designed as strength members in optic fibe cables, providing essential support and protection to the delicate optical fibers within. Their lightweight, non-magnetic and corrosion- resistant properties ensure minimal impact or cable weight and electromagnetic interference. These characteristics make FRP rods essential for maintaining the structural integrity and performance of optic fiber networks.

FRP SOLAR MODULE STRUCTURE

SOLAR ROOFTOP SOLUTIONS

Comprehensive rooftop mounting systems designed for flat and slanted roofs, offering shallow, elevated and nonpenetrative installation options. Lightweight, durable structures are engineered for high wind loads while minimizing roof impact and installation effort.

SOLAR GROUND MOUNTED SOLUTIONS

Engineered ground-mounting systems offering single-post, dual-post and seasonal-tilt solutions for diverse terrains and project requirements. Optimized designs provide strength, durability, easy installation and improved energy performance.

AERON GIGABAR®

Fibre Reinforced Plastic/ Glass Fibre Reinforced Plastic is a composite material made of a polymer matrix reinforced with fibres. The fibres are usually Fibreglass, Carbon, or Aramid, while the polymer is usually an Epoxy, Vinylester Thermosetting Plastic for rebar applications .

What is GFRP Rebar?

GFRP Rebar is a reinforcing rod for concrete made from continuous glass fibres embedded in a polymer resin. Unlike conventional steel rebar, GFRP is rust-proof, lightweight, nonconductive, and highly durable. It addresses the critical challenge of steel corrosion in concrete infrastructure, which leads to costly repairs and shorter lifespans.

Glass Fiber Reinforced Polymer (GFRP) Rebar

During FY25, Aeron Composite Limited forayed into the GFRP Rebar business, marking a significant diversification beyond its established FRP portfolio.

What is GFRP Rebar?

GFRP Rebar is a reinforcing rod for concrete made from continuous glass fibres embedded in a polymer resin. Unlike conventional steel rebar, GFRP is rust-proof, lightweight, non-conductive, and highly durable. It addresses the critical challenge of steel corrosion in concrete infrastructure, which leads to costly repairs and shorter lifespans.

Advantages Over Steel Rebar:

• Corrosion Resistance - unaffected by moisture, salts, and chemicals.

• Lightweight - 4x lighter than steel, easier to transport and install.

• High Strength - twice the tensile strength of steel.

• Safety - Non-magnetic and non-conductive, safer in electrical environments.

• Sustainability - 45% lower CO2 emissions during production and longer structure life reduces lifecycle footprint.

Applications

GFRP Rebar is particularly suited for roads, bridges, highways, tunnels, coastal infrastructure, chemical plants, and water treatment facilities - areas where steel is prone to rapid corrosion. Notable projects in India such as the Bandra-Worli Sea Link, Mumbai Coastal Road, and Gujarat water treatment plants have already benefitted from GFRP adoption.

Aerons Capabilities and Expansion Plan for FRP Rebar

® Commercial sales began in March 2025, with initial supplies already delivered.

© Current setup includes two dedicated production lines

at the Mehsana facility.

© Planned expansion to five lines by FY26, integrated within existing infrastructure, ensuring cost efficiency and minimal additional capex.

© The product complies with IS 18255:2023 standards for rebar in concrete reinforcement, establishing Aeron as one of the few certified players in India.

© By leveraging its strong balance sheet and net cash position, Aeron is scaling rebar as a core vertical alongside structural profiles, gratings, and cable systems.

Strategic Significance

GFRP Rebar positions Aeron in the fast-growing construction materials space, expanding its customer base from Chemical, Water Treatment, telecom, utilities, and oil & gas to large infrastructure developers and government EPCs. This product line is expected to emerge as a key growth driver and enhance margins due to its advanced technology and limited competition.

6. Strategic Priorities - Status Update

we are accelerating the FRP Rebar Revolution, expanding rebar manufacturing capacity from 2 to 5 lines by FY27 and rebar bending capacity from 4 to 8 lines by H1 FY27, positioning us to capture the growing adoption of corrosion- resistant composite reinforcement. With the major capacity expansion cycle largely behind us, our focus is on driving capacity utilisation beyond 60-65% through automation, process optimisation and scale efficiencies, with the objective of strengthening margins while participating in the projected 10-14% global composites industry growth. We are continuously expanding into new product categories and leveraging our DSIR-approved R&D laboratory for new composite solutions; and establishing a captive solar power plant to improve energy efficiency and reduce our carbon footprint.

7. Key Financials - Fy26

Metric	FY 2025-26
Revenue	f221.8 crore
EBITDA	f18.8 crore (8.5% margin)
PAT	f8.7 crore
ROE	8.3%
ROCE	11.5%
Installed capacity (Mehsana)	23,415 MT \u2014 fully ramped
Export contribution to revenue	52%
Revenue CAGR (5Y)	23%
PAT CAGR (5Y)	25%

The decline in PAT and return ratios, which reflects a combination of geopolitical headwinds and the step-up in our fixed-asset base and gearing. While geopolitical disruptions have impacted raw material costs and operating conditions, the increased asset base and investments are also ahead of the revenue and margin benefits expected from greater scale, the GFRP Rebar ramp-up and the eventual entry into CFRP We therefore view FY26 as a transition and investment phase, rather than a change in the underlying growth thesis, with our focus firmly on improving utilisation, margins and returns as these investments mature.

8. Risk Management

Aeron Composite Limited has a structured risk management framework to identify, monitor, and mitigate potential business challenges.

1. Raw Material Volatility: Can be mitigated through multi-supplier sourcing, long-term contracts, and R&D on alternate resins.

2. Technology Obsolescence: FRP technology evolves rapidly. Mitigation: DSIR-approved R&D, investments in automation & product development and CFRP expansion.

3. Competition: Entry of global players may intensify pricing pressures. Mitigation: diversified portfolio, strong export base, and focus on niche segments like GFRP Rebar.

4. Infrastructure Cyclicality: FRP demand tied to infra capex cycles. Mitigation: diversification across telecom, oil & gas, exports, and CFRP.

5. Quality & Compliance: Non-compliance with global/Indian standards may affect credibility. Mitigation: ISO-certified processes, in-house testing labs, and adherence to global benchmarks.

6. Forex & Export Risk: Exposure from sales in 39 countries. Mitigation: natural hedging, forward contracts, and geographic diversification.

7. Human Capital & Safety: Skilled workforce essential for composite manufacturing. Mitigation: continuous training, EHS standards, and retention policies.

9. Human Resources

• Skilled Workforce: Employees trained in multiple FRP processes — pultrusion, moulding and fabrication.

• R&D Talent: DSIR-approved in-house lab with dedicated engineers working on new resins, and product development.

• Culture & Retention: Focus on performance-linked incentives, career growth, and a safe work environment.

• Future Readiness: HR strategy aligned with Aerons expansion into CFRP and high-value exports, ensuring a pipeline of specialized talent.

10. Internal Controls and Governance

1. Segregation of Duties

• Ensure no single individual controls all aspects of a transaction.

• Divide responsibilities across initiation, approval, execution, and review stages to reduce fraud and error risks.

2. Standardized Operating Procedures (SOPs)

• Document clear, repeatable processes for all critical operations.

• Align SOPs with regulatory requirements and internal policies.

3. Periodic Financial Reconciliations

• Reconcile accounts regularly to detect discrepancies early.

• Automate reconciliation through ERP systems where feasible.

4. Defined Key Controls and Risk Mapping

• Identify and document key controls linked to material risks.

• Use a risk-control matrix to track ownership, frequency, and effectiveness.

5. Regular Internal Audits

• Conduct independent reviews to assess control effectiveness.

• Use audit findings to refine processes and close control gaps.

6. Integrated Assurance Across Three Lines of Defence

• Coordinate efforts between operational teams, risk/compliance, and internal audit.

• Use dashboards to visualize control effectiveness across functions.

7. Technology-Enabled Controls

• Leverage ERP systems for automated checks, access controls, and audit trails.

8. Tone from the Top

• Senior leadership must champion ethical conduct and control discipline.

• Embed governance values into performance reviews and training.

9. Whistle-blower and Ethics Programs

• Maintain confidential reporting channels for misconduct.

• Promote awareness of ethical standards and anti-corruption policies.

10. Continuous Monitoring and Improvement

• Use KPIs and control dashboards to monitor performance.

• Update controls in response to regulatory changes, business expansion, or audit finding