Ahlada Engineers Ltd Management Discussions

Pursuant to Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the directors wish to report as follows:

Overview

The objective of this report is to convey the managements perspective on the external environment and engineering industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities, and internal control systems and their adequacy in the Company during the Financial Year 2024-25. This should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Report. The Companys financial statements have been prepared in accordance with applicable Accounting Standards complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (‘SEBI) from time to time.

Global growth is slowing due to a substantial rise in trade barriers and the pervasive effects of an uncertain global policy environment. Growth is expected to weaken to 2.3 percent in 2025, with deceleration in most economies relative to last year. This would mark the slowest rate of global growth since 2008, aside from outright global recessions. In 2026-27, atepid recovery is expected, leaving global output materially below January projections. Progress by emerging market and developing economies (EMDEs) in closing per capita income gaps with advanced economies and reducing extreme poverty is anticipated to remain insufficient. The outlook largely hinges on the evolution of trade policy globally. Growth could turn out to be lower if trade restrictions escalate or if policy uncertainty persists, which could also result in a build-up of financial stress. Other downside risks include weaker-than-expected growth in major economies with adverse global spillovers, worsening conflicts, and extreme weather events. On the upside, uncertainty and trade barriers could diminish if major economies reach lasting agreements that address trade tensions. The ongoing global headwinds underscore the need for determined multilateral policy efforts to foster a more predictable and transparent environment for resolving trade tensions, some of which stem from macroeconomic imbalances. Global policy efforts are also needed to confront the deteriorating circumstances of vulnerable EMDEs amid prevalent conflict and debt distress, while addressing longstanding challenges, including the effects of climate change. National policy makers need to contain risks related to inflation as well as strengthen their fiscal positions by raising additional domestic revenues and reprioritizing spending. To facilitate job creation and boost long-term growth prospects in EMDEs, reforms are essential to enhance institutional quality, stimulate private investment growth, develop human capital, and improve labor market functioning. (Source : IMF-World Bank)

Indias economy continues to grow at a steady and confident pace, standing out as the fastest growing major economy in the world. Gross Domestic Product (GDP) is a measure of size and health of the economy. It is the total value of all the goods and services produced within a country. In 2024 25, real GDP growth was estimated at 6.5 per cent. The Reserve Bank of India expects the same rate to continue in 2025 26. This performance comes at a time when the global economy faces uncertainty, making Indias steady momentum all the more significant.

Supported by strong domestic demand, easing inflation, robust capital markets and rising exports, the broader economic picture is one of resilience and balance. Key indicators such as record foreign exchange reserves, a manageable current account deficit, and increasing foreign investment reflect growing global trust in Indias long-term prospects. Together, these trends show an economy that is not only expanding but doing so with strength across sectors.

Indias growth story continues to draw global attention, backed by strong fundamentals and consistent performance. Real GDP, which measures the economys output after removing the effects of inflation, expanded by 6.5 per cent in 2024 25. The Reserve Bank of India expects this pace to continue into 2025 26. Other projections echo this optimism, with the United Nations forecasting growth of 6.3 per cent this year and 6.4 per cent next year, while the Confederation of Indian Industry places its estimate slightly higher at 6.40 to 6.70 per cent.

Indias total exports touched a new high of USD 824.9 billion in 2024 25, growing by 6.01 per cent from USD 778.1 billion in 2023 24. This marks a sharp rise from USD 466.22 billion in 2013 14, underlining a decade of sustained export momentum.

Indias economic performance over the past year reflects not just growth, but a deeper sense of stability and direction. With real GDP rising at 6.5 per cent and inflation easing to its lowest in years, the country has shown that it can balance expansion with price stability. At the same time, strong participation in capital markets, record levels of exports, and healthy foreign exchange reserves point to growing confidence both at home and abroad. Key sectors such as manufacturing, services, and infrastructure are pushing ahead, supported by steady investment and policy focus. External risks remain, but Indias fundamentals are sound. As the global economy continues to face challenges, Indias consistent performance offers reassurance that it is well placed to lead from the front and keep building a stronger, more inclusive future. (Source : Press Information Bureau , Government of India)

India remains a bright spot in the global steel Doors industry and the steel Doors demand in the country with the rise in population and urbanization, the construction sector in India is rising at a significant pace, which eventually drives the growth of the India doors market. Indias population is expected to grow to a significant number of 1.52 billion by 2036. Moreover, the country is expected to witness a 70% of increase in urban areas. About 39% of the population is estimated to live in urban areas by 2036, a significant increase from 31% in 2011. Moreover, the real estate industry has witnessed rapid growth in the last few decades and is expected to exhibit moderate growth in the future. The real estate sector, which includes housing, retail, hospitality, and commercial, is the second largest employment generator in India. According to the India Brand Equity Foundation (IBEF), the demand for residential properties has surged in the last few years, it estimates that India is among the top 10 price-appreciating housing markets internationally.

The expected Compound Annual Growth Rate (CAGR) for the Residential Doors Market during the forecasted period is projected to be around 5% to 6%. This growth is primarily driven by innovative products and technologies, such as smart doors and energy-efficient solutions. The increasing focus on home security and sustainability is also contributing to the growth of the market.

Trends such as the rise of smart homes and the increasing popularity of modern design aesthetics are also expected to drive growth in the Residential Doors Market. By aligning with these trends and adopting innovative strategies, companies in the market can unlock new opportunities and achieve sustainable growth in the coming years.

Our Company is in the business of manufacturing steel doors, steel windows (steel-frame), Green Chalk Boards, Dual Desks and Purified Drinking Water System and we cater to customers across various segments and industries. We currently have our facilities spread across 2 manufacturing units in addition to one assembling unit and stock yard, with an area admeasuring 27,153 square yards on the outskirts of Hyderabad.

Established in 2005, we started commercial operations in February 2006 with manufacturing of clean room equipment and furniture. Further in the year 2008, we started manufacturing steel doors which catered to the then existing customers of clean room equipment and furniture. Gradually we started expanding the customer base for our products manufactured to healthcare, entertainment and real estate vertical as well.

We have been gradually expanding our manufacturing facilities and have over the past decade, expanded the facilities to its current form and capacity. Presently, we have an installed capacity to manufacture 30,000 doors per month. The facilities to manufacture clean room equipment and furniture and windows is inter-operable, and hence, capacities for the same cannot be conclusively determined.

With nearly two decade of experience in making steel doors and windows, we have developed in-house expertise in the process of manufacturing our product range, i.e. steel doors, windows and clean room equipment, and our in-house research team contributes in fine-tuning our products, its look and finish to suit the requirements of our customers, which in turn has carved a niche for our Companys products. Our in-house research and design team also constantly update the product designs as per client requirements and also make changes to improve efficiency.

Our Company manufactures and supplies steel doors and windows to other infra developers industrial customers (other than Tata Steel Limited and the products manufactured and supplied to TSL) as well.

Government Policy Support: The governments policy initiatives, including tax incentives, ease of doing business reforms, and sector-specific schemes, create a conducive environment for growth in the construction sector. The support for infrastructure financing, land acquisition reforms, and streamlined regulatory processes further enhance the sectors attractiveness for domestic and international investors.

Indias urbanisation levels are estimated to improve to 50 per cent in 2047 from 34 per cent as of 2018. These transformed demographics will require development of a host of infrastructure facilities, thus increasing the demand for increase in coverage and quality of service delivery across the entire infrastructure spectrum. This includes residential and commercial real estate, public transport, water supply, sanitation, and waste management systems. The focus on building smart cities equipped with advanced digital infrastructure and sustainable solutions offers new avenues for growth and innovation in urban construction projects.

Pradhan Mantri Awas Yojana (Urban) Mission launched on 25th June 2015 which intends to provide housing for all in urban areas by year 2024. The Mission provides Central Assistance to the implementing agencies through States/Union Territories (UTs) and Central Nodal Agencies (CNAs) for providing houses to all eligible families/ beneficiaries against the validated demand for houses for about 1.12 cr.

In May 2020, The Honorable Prime Minister, Shri. Narendra Modi launched the Self-reliant India (Atmanirbhar Bharat Abhiyan) mission to promote Indian goods in the global supply chain markets and help the country achieve self-reliance. The mission was announced amid the pandemic when the government allocated funds worth Rs. 20 lakh crore (US$ 268.74 billion), which amounts to 10% of Indias GDP, as a stimulus package to help recover the economy by promoting incentives for domestic production. It encompasses themes such as ‘Local for Global: Make in India for the World and ‘Vocal for Local.

Make in India is a major national programme of the Government of India designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure in the country. The primary objective of this initiative is to attract investments from across the globe and strengthen Indias manufacturing sector. It is being led by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India.

This unprecedented push in infrastructure is expected to spawn associated industries, create jobs, and stimulate the economy. Specific focus areas are the expansion of public digital infrastructure, clean and renewable energy projects, and establishing resilient urban infrastructure. This ambitious undertaking seeks to enhance Indias global competitiveness and improve the quality of life across its vast populace.

The Company operates in Single Segment and is one of the largest manufacturers of Steel Doors and Windows. Our design, development and manufacturing process of Steel Doors and windows have proven its capacity to meet the dynamic requirements of customers giving a competitive advantage over other Steel Doors and Windows manufacturers.

Our high-quality Steel doors and windows provide a reliable and efficient solution for safety, fire and pest resistant. Based on the good operational performance our products are well accepted in Indian market.

During the year , the performance of Steel Doors and windows segment has witnessed a declined growthdue to numerous challenges including Government Policies,Raw Material Price Volatility, Supply Chain Disruptions, entry of new players, and variation in margins etc.. During the financial year 2024-245 the Company was able to record a net turnover of Rs 131.99Crores against 259.51Croresin the previous year 2023-2024 registering a decrease of 49.14%.

Future Outlook and Strategic Priorities

The Company remains confident in its ability to capitalize on emerging opportunities and navigate future challenges with agility, all while aligning with shareholders expectations for sustainable growth and profitability. To this end, our key focus areas include:

Debt Reduction: Actively reducing debt to achieve significant savings in interest costs.

Value Addition: Increasing the value added per product to enhance profitability.

EBITDA Sustenance: Maintaining robust EBITDA levels to ensure financial stability.

Potential increase of Dealer and Distributor Network.

We are committed to delivering high-quality products and anticipate securing increased orders in the coming years. By adopting global trends in the steel doors and windows industry such as eco friendly practices, efficient and safe manufacturing, and innovative designs we are well positioned to strengthen our market presence.

We are optimistic about securing further high-value contracts for the supply of dual desks and purified drinking water systems apart from our regular business. Tata Steel Limited continues to purchase our products under a "Buy & Sell" model on mutually agreed terms.

We have established a network of distributors and dealers across Andhra Pradesh, Telangana, Kerala, Karnataka, Maharashtra, and Tamil Nadu for the supply of steel doors and windows. Our brand is being promoted through various channels, including print, electronic, and social media. We are also in the process of appointing distributors and dealers in the northern states to expand our reach.

Furthermore, we plan to collaborate with other state governments and reputable private institutions across India to supply similar products, thereby broadening our network and increasing revenue and profitability.

Throughout the year, the company has focused on operational and marketing excellence to mitigate adverse business conditions. Our aspiration is to become the most valuable and respected company in the country. To achieve this, we are taking steps to ensure that we are structurally, financially, and culturally prepared for the future. Our priorities for the medium term include:

Innovation and Technology Upgrades: Continuous innovation in our manufacturing processes, technological upgrades, and cost improvements are central to our operations. Our technical teams strive to minimize waste and maximize resource utilization whether raw materials, energy, or facilities to drive process improvements and cost reductions.

Quality and Competitiveness: We leverage the latest technology and machinery to produce high-quality, competitive products, and we regularly update our equipment to meet market standards.

e. Risks , Concerns and Threats

The Company encounters various risks, concerns, and threats, and we have implemented potential solutions:

The Steel Doors and Windows face intense price competition. Due to Global slow down, the purchase power of the people has drastically come down which potentially deterring buyers and slowing market adoption. The Company is putting continuous efforts in research and development and is building local ecosystem of suppliers who has a competitive price offering at the same time the procurement of goods is efficient, qualitative and safe, it is also adopting good industry practices and process to optimize manufacturing processes and scale production also to achieve cost reduction over time.

Intensified competition from both domestic and international players may impact market share and exert downward pressure on prices. The Company differentiates itself through innovation, quality, and customer-centric solutions. Continual upgrades to product features, enhanced after-sales support, and fostering strong customer relationships mitigate competitive pressures and uphold market leadership.

The Company has established robust internal control systems and procedures that are commensurate with the size and nature of our business. As our requirements evolve, we continue to strengthen our internal audit department. The Company has also implemented comprehensive corporate governance practices, with our Audit Committee regularly reviewing and monitoring these systems.

These procedures are designed to ensure that:

All assets and resources are acquired economically, used efficiently, and adequately protected;

Significant financial, managerial, and operational information is accurate, reliable, and provided in a timely manner; and

All internal policies and statutory guidelines are strictly followed.

The Audit Committee continuously monitors the effectiveness of internal controls and reviews reports submitted by the internal audit department. The management promptly addresses the observations made by the Audit Committee, ensuring the Companys governance standards are consistently upheld.

Net revenues decreased to131.99Crores from259.51Croresin the previous year registering a decrease of 49.14%. Profits before Depreciation and Interest had decreased by 71.10% to 579.70 lakhs as from 2005.78 lakhs in the previous year. After providing for depreciation and taxation, the net profit of the Company for the year under review was at 370.56 lakhs as against 1,364.87 lakhs in the previous year recording a decrease of

72.85%and decrease in their operational performance due to due to numerous challenges including Government Policies, Raw Material Price Volatility, Supply Chain Disruptions, entry of new players, and variation in margins etc..

i. Material Developments in Human Resource/Industry Relations front, including number of people employed:

The Company believes that people are the backbone to the company. The Company has meritocratic culture and provides a conducive workplace for all. Occupational health and safety of both the permanent and contractual workforce is ensured at all times. The company focuses on the learning and professional development of its employees. Multiple on-the-job, classroom and other forms of trainings, learning opportunities and structured programmes are offered to our people, in order to help build world class competencies, regularly reskill and upskill and provide an environment of continuous improvement.Industrial relations are good and harmonious. The Company recognizes the importance and contribution of human resources for its continued growth and development. As on 31stMarch, 2025, the Company has a total strength of 146 permanent employees.

Your Company gives priority to comply all of the statutory requirements in time and the management regularly discusses the same with all of the departmental heads. The Company Secretary, as compliance officer, timely ensures compliance of the provisions of the Companies Act, 2013, SEBI Regulations and provisions of Listing Agreements. Compliance Certificates are obtained from various units of the Company and the Board is informed of the same at every Board Meeting.

Statements in the Management Discussion and Analysis describing the Companys estimates and expectations may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results/performance could differ materially from those expressed or implied.