Aeron Composites Ltd Management Discussions

For the Financial Year Ended March 31, 2025

1. Global Economic Outlook

The global economy in FY25-26 continued to face headwinds from high interest rates, in ationary pressures, and geopolitical uncertainties. According to the IMFs April 2025 World Economic Outlook, global GDP growth is projected at 3.2% in 2025, largely stable compared to 2024. Advanced economies are slowing, growing at ~1.6%, while emerging markets remain the primary driver of global growth at ~4.2%.

Material-intensive industries such as infrastructure, renewable energy, and mobility are expected to see sustained capital expenditure. A major trend is the rising demand for composites lightweight, durable, and sustainable materials that replace conventional metals. Within this, Fiber Reinforced Polymers (FRP) are positioned as strategic enablers for energy transition and resilient infrastructure.

2. Indian Economic Outlook

Indias macroeconomic performance remained strong through FY 2024 25, with real GDP growth for the year reaching 6.5%. The growth was led by robust domestic consumption, continued traction in public capital expenditure, and a healthy performance in both manufacturing and services. The Reserve Bank of India (RBI) has projected real GDP to grow at 6.5% in FY 2025 26, with quarterly growth ranging between 6.3% and 6.7%, indicating sustained momentum across sectors.

In ation remained well-anchored during the year, with the Consumer Price Index (CPI) averaging 4.2%. By Q4 FY25, CPI in ation had eased to 3.2%, its lowest since 2019, largely due to disin ation in food items and base effects. The RBI forecasts in ation to average 3.7% in FY 2025 26, allowing the central bank room to continue its calibrated monetary easing. During the year, the RBI reduced the policy repo rate by a cumulative 100 basis points, bringing it down to 5.50% as of June 2025. The Cash Reserve Ratio (CRR) was also cut by 100 basis points in phased tranches, injecting over 2.5 lakh crore into the banking system.

Key policy and structural drivers strengthening Indias composites demand include:

National Infrastructure Pipeline ( 111 lakh crore) and PM Gati Shakti, creating large-scale material requirements.

PLI schemes in renewables, EVs, and advanced materials. Expansion of urban infrastructure (smart cities, metro networks, water treatment plants).

Increasing awareness and adoption of sustainable construction materials like FRP.

Together, these factors provide a strong domestic demand base for Aerons FRP portfolio.

Source: RBI Financial Stability Report June 2025; RBI Monetary Policy Statement April and June 2025; IMF World Economic Outlook April 2024; CS Conversations June 2025; HSBC AM India Monetary Policy Update, June 2025; Reuters (June 2025)

3. Industry Overview

3.1 Indian Manufacturing Sector

Indias manufacturing sector contributes ~17% to GDP and is targeted to reach 25% by 2030 under the Make in India and PLI framework.

According to IBEF (2024), the sector attracted USD 9.3 billion FDI in ows in FY24, with core industries like construction materials, automotive, electrical equipment, and infrastructure seeing strong momentum

Source: India Manufacturing Sector: Indias economic ascent - Can manufacturing power the next leap?, ETManufacturing, Press Release:Press Information Bureau,

3 .2 Global FRP Industry

The global Fiber Reinforced Polymer (FRP) industry was valued at USD 92.8 133 billion in 2024 and is projected to reach USD 150 249 billion by 2030 32, growing at 6.5 8.4% CAGR. FRP materials are increasingly replacing steel, aluminium, and timber due to corrosion resistance, light weight, long life, and sustainability. Major adoption sectors include construction, oil & gas, renewable energy, aerospace, water treatment, and mobility.

Source: Fiber Reinforced Polymer Composites Market Report, 2030, Fiber Reinforced Polymer [FRP] Composites Market Size, 2032

3.3 Global GFRP Industry

Within FRP, Glass Fiber Reinforced Polymer (GFRP) is the dominant sub-segment due to its cost e ciency and versatility.

The global GFRP rebar market was estimated at USD 550 million in 2023 and is projected to grow to USD 1.3 billion by 2032, re ecting a CAGR of nearly 10% Asia-Paci c leads demand, driven by large infrastructure investments.

Use cases: bridges, metro systems, tunnels, highways, and coastal structures where steel rebar corrodes quickly.

Source: Gfrp Rebar Material Market Report Global Forecast From 2025 To 2033

3.4 Indian FRP/GFRP Industry

The Indian FRP market is valued at USD 1.8 billion (2024) and is projected to grow to USD 2.8 billion by 2030 at a 7.8% CAGR.

Per capita consumption is only 0.55 kg, compared to 7 11 kg in developed economies, offering 14 21x growth headroom.

The Indian GFRP rebar market alone is currently worth 300 500 crore and is projected to grow at 17.3% CAGR till 2030. Adoption is increasing in coastal infra, metro tunnels, highways, and water treatment plants, with successful use cases like the Bandra-Worli Sea Link and Mumbai Coastal Road. Importantly, the Honble Minister for Road Transport and Highways, Shri Nitin Gadkari, has been a strong advocate for the use of GFRP rebars in national road and highway construction, further reinforcing the relevance and timeliness of our entry into this segment.

4. Company Overview

4.1 Background

Founded in 2011, AERON COMPOSITE LIMITED (ACL) is one of Indias leading FRP/GRP product manufacturers. Aeron specializes in glass bre based composites, offering solutions from design & prototyping to manufacturing, installation, and after-sales service.

The company is recognized as a Star Export House and exports to 39 countries, serving 800+ global customers across telecom, oil & gas, utilities, renewable energy, and infrastructure.

Source: RHP

4.2 Transition to Fully Owned Factory

FY25 marked a milestone as Aeron is in the process of shifting from rental facilities to a fully, company-owned factory at Mehsana, Gujarat.

Built over 51,671 sq. mtrs., the plant houses state-of-the-art pultrusion, moulding, and winding lines. Installed capacity: 18,845 MT, scaling to 22,000 MT by October 2025.

Bene ts: reduced rental overheads, higher e ciency, and capacity to scale new business lines (GFRP Rebar, CFRP products).

4. 3 Deployment of solar

A 1,200 KW rooftop solar plant installation, reinforcing Aerons focus on solar energy to cut electricity costs, advance sustainability, and lower carbon footprint.

4.4 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, roo ng, customized products.

Machining/Fabrication precision-cut pro les for modular assembly

Manufacturing Process for FRP Pultruded Products

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

Heres a detailed explanation of the Pultrusion process:

Manufacturing Process for FRP Moulded Gratings:

Molded gratings are made through a process involving the combination of continuous glass bers and resin in an open mold. Typically, this process starts with the placement of continuous glass bers (usually in the form of roving) into a mold. The bers 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 lled, 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.

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 bers pass through a UV curing chamber where they are exposed to UV light, causing rapid curing of the resin and solidi cation of the composite material. This method is often used for producing FRP rods used as central strength members in Optic bre cables.

4.5 Competitive Strengths

Diverse portfolio: 11+ 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 speci c needs and applications.

FRP DECK

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.

FRP LADDER

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

FRP POLES

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 FENCING

FRP fencing provides a strong, durable, and maintenance-free solution for perimeter security in various environments. These fences are designed to withstand harsh conditions while providing a pleasing appearance.

FRP Fencing does not have a resale value hence it is a suitable material for public fencing area where metal fencing is prone to theft due to resale value. FRP Fencing being electrically nonconductive offer safety for transformer and substation.

FRP MOULDED GRATINGS

FRP Gratings are widely used for ooring, walkways, and 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 bidirectional strength and high chemical resistance. By choosing t he appropriate type of FRP grating for a speci c 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 fiber cables, providing essential support and protection to the delicate optical fibers within. Their lightweight, non-magnetic, and corrosion- resistant properties ensure minimal impact on cable weight and electromagnetic interference. These characteristics make FRP rods essential for maintaining the structural integrity and performance of optic fiber networks.

AERON GIGABARR

Fibre Reinforced Plastic/ Glass Fibre Reinforced Plastic is a composite material made of a polymer matrix reinforced with bres. The bres 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 bres 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.

GRP Rebar Vs TMT Rebar

PROPERTIES	Grade 500	GFRP	COMPARISON
Tensile strength Mpa	500 min	800-1 100	Stronger
Weight/Meter 8mm	0.395 kg	0.099 kg	Lighter
Bar Length	12 meter	upto 100 meters	Better improvement
Cost	Higher	Lower	Cost effective
Life Spend	50 years	(+) 80 years	More durable
Corrosion resistance	No	Yes	More durable
Electric conductivity	Yes	No	NO accidents risk
Thermal conductivity	Yes	No	Does not dissipate heat
Concrete covering	35mm - 45rnm	20mm	Lower concrete volume
Shear Strength	120	170	Higher
Bond strength MPa/N/rnm2	10	7.6	Lower
Compression MPa/N/mm2	500	450	Lower
Modulus of Elasticity [Gpal)	160-200	65	Lower
Elongation (%)	12% (min.)	4% (max.)	Lower
Density (ton/m3)	7.8	1.9	Lower
EMI/RFI Transparency	NO	Yes	Transparent To EMI/RFI
Linear expansion coe cient. a* 10-6/C 0	13-15	9-12	Lower
Installation. Handling & Transport Cost	High	Low	Cost Effective
Enviromental Impact	High	Low	45% Less Co emission 2

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 bene tted 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 ve lines by FY26, integrated within existing infrastructure, ensuring cost e ciency and minimal additional capex.

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

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

Strategic Signi cance

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 1. Scaling GFRP Rebar

Target: 5 production lines by Fy26.

USP: positions Aeron in high-growth construction market. Advantage: complements existing pultrusion setup ? economies of scale.

Growth: ~20% CAGR market in India.

2. Entry into Carbon Fiber Reinforced Polymers (CFRP)

Starting with CFRP Core Rod, Plank for windmill blades and automotive parts.

Global CFRP market: USD 17 billion (2024), projected to grow at 10 11% CAGR.

USPs of CFRP:

- 5x strength-to-weight ratio of steel.

- High fatigue resistance ? ideal for wind energy & EV parts. - Commands premium margins vs GFRP.

Strategic intent: CFRP positions Aeron in high-value, global export markets.

3. Export Market Expansion

Target: Growth in existing export market and discover new geography.

USP: recognized as Star Export House.

4. Technology & R&D Advancement

DSIR-approved lab?new product development in composites.

5 . Sustainability & Circular Economy

Setup Captive Solar Power Plant to reduce CO2 footprint.

6. Owned Facility Leverage

Mehsana plant to be optimized to >70% utilization by Fy27. USP: reduces costs, improves margins, supports product diversi cation.

7. Key Financials & Performance (Fy25)

Revenue	: 215.3 Cr
EBITDA	: 17.9 Cr (8.3% margin)
PAT	: 13.3 Cr
ROE	: 19.6% ROCE: 16.5%
3Y CAGR	: Revenue 25.7%, PAT 54.6%
Balance Sheet	: Net cash positive; mixed of debt and
	equity

8. Risk Management

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

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

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

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

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

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

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

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

9. Human Resources

People are central to Aerons growth. As of FY25, the Company.

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 & Governance

The Company has implemented robust internal nancial controls aligned with statutory requirements. The Audit Committee oversees compliance, risk management, and process e ciency.

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. De ned 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 ndings to re ne 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 con dential 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 nding