Aimtron Electronics Ltd Management Discussions

Economic Overview

Global Economy

The global economy remained resilient during the year, supported by steady financial conditions and continued investment in technology and infrastructure. Global GDP growth is projected at 3.1% in 2026 and 3.2% in CY 2027, broadly in line with the growth of 3.4% in CY 2025. Stable global growth is supporting demand across electronics, telecom, industrial automation and automotive segments, which are key end-markets for the EMS and ESDM industry. Growth remained uneven across regions, with advanced economies witnessing moderate expansion, while emerging markets continued to drive incremental demand.

Global inflation is projected to be 4.4% in 2026 and 3.7% in 2027. Lower inflation is expected to support input cost stability, particularly for electronic components and raw materials. However, interest rates remain elevated across major economies, keeping financing costs high and impacting customer capex cycles, especially in export-driven segments.

The United States economy demonstrated structural strength despite navigating a highly complex and unpredictable environment. Economic growth was sustained by fiscal policy measures and the delayed positive effects of interest rate reductions implemented by the Federal Reserve. On the international stage, reciprocal tariffs from the US quickly cooled global financial markets. Nevertheless, most international trade partners adjusted rapidly to open re-negotiations, allowing global markets to stabilise by the middle of the year.

Trade conditions remain complex. While some tariff measures have been eased, the overall tariff environment remains complex, with the US effective tariff rate at around 18.5%, compared with about 3.5% for the rest of the world. These levels continue to influence global sourcing decisions. As a result, supply chains are gradually shifting rather than fully normalising, with increasing adoption of diversification strategies such as China+1, thereby creating opportunities for EMS/ESDM manufacturers in India.

Global geopolitical tensions, particularly in West Asia, continue to affect energy markets. Disruptions around key transit routes such as the Strait of Hormuz, which carries close to 20% of global oil supply, have led to volatility in crude oil prices. Brent crude has moved from around USD 70 per barrel to levels of USD 80-100 per barrel during periods of escalation, reflecting supply concerns and market uncertainty. Higher crude oil prices directly impact the EMS/ESDM industry through increased logistics, freight and energy costs. They also raise input costs across the supply chain. IMF estimates indicate that a 10% increase in oil prices can raise global inflation by ~40 basis points and reduce global output by 0.1-0.2%, which can reduce demand across key end-user industries such as telecom, automotive and industrials.

Outlook

The global economy is expected to maintain stable growth of around 3.1%-3.2% over the near term, supported by continued investment in technology and digital infrastructure.

Global inflation is projected to ease further to 3.7% by 2027, which should help stabilise input costs and support consumption. This environment is expected to sustain demand across key end-user segments for the EMS and ESDM industry, including telecom, automotive and industrial electronics. Ongoing supply chain diversification, along with relatively high tariff levels such as the ~18.5% US effective tariff rate, is also likely to support manufacturing shifts towards alternative locations such as India.

However, energy prices are foreseen to remain sensitive to geopolitical developments, which may continue to influence logistics and input costs. Overall, the outlook remains stable, with steady growth and structural shifts in global manufacturing supporting medium-term opportunities, while cost-related pressures remain manageable.

Indian Economy

Indias economy has remained on a strong footing during FY2025-26, with growth largely driven by domestic demand. Real GDP is estimated to expand by approximately 7.7% in FY2026 (up from 7.1% in FY2025), indicating sustained momentum. The expansion was broad-based, with industry (including manufacturing and construction) improving (industry GVA projected +6.2% vs 5.9% last year), while services continued to lead and agriculture remained stable. Inflation remained well contained during FY 2025-26. Headline CPI inflation stayed below the 4% target, with core inflation at around 3.7% and core inflation excluding precious metals at around 2.1%, indicating stable underlying price trends. In this context, the Reserve Bank of India maintained a supportive monetary stance. The policy repo rate was reduced by 100 basis points during the year to 5.25%, while liquidity conditions ensured adequate credit availability.

On the fiscal side, public investment remained a key driver. Effective capital spending stayed at about 4% of GDP in FY2025, supporting infrastructure and connectivity. In the Union Budget 2026-27, capital expenditure was increased to ?12.2 lakh crore (around 4.0% of GDP), while the fiscal deficit is planned at around 4.3% of GDP for FY2027. The industrial sector showed improved momentum. Manufacturing activity strengthened (GVA growth of roughly 7-9% in Q1- Q2 FY2026), supported by initiatives such as Production- Linked Incentive (PLI) schemes. Electronics manufacturing continued to expand, with production rising nearly 6-fold over the past decade, supporting Indias position as a global electronics producer. Core sectors such as steel, cement and capital goods also recorded steady growth, supported by infrastructure activity. On the external front, Indias position remained comfortable. Exports reached about US$825 billion in FY2025, led by services exports of around $387.5 billion. Foreign exchange reserves remained strong at about $701 billion in early 2026. Remittance inflows of around $135 billion further supported external stability.

^Total exports reached $825 billion, with services exports contributing $387.5 billion, supporting external balance.^

^Forex reserves stood at $701 billion in early 2026, supported by steady capital inflows and remittances of $135 billion.^

Overall, the macroeconomic environment remained stable, with broad-based growth, low inflation and sustained policy support.

Outlook

Looking ahead, growth is expected to sustain a steady pace. Real GDP growth is projected at around 6.6% in FY2027, in line with the economys underlying strength. Domestic demand is likely to remain stable, supported by public investment and improving private sector capex, while consumption may benefit from steady income levels. Inflation is expected to increase modestly but remain within a manageable range. It is projected to remain within the target level of 4%, with a tolerance of 2%. Policy support for manufacturing and exports is expected to continue, with focus on infrastructure and sectors such as electronics, telecom, aerospace and defence. On the external side, continued strength in services exports and capital inflows is expected to support stability.

Overall, the near-term outlook remains positive, with growth supported by consumption, investment and government spending. Global demand conditions and commodity prices will warrant close monitoring even as stable macroeconomic fundamentals provide support.

Industry

Global Electronics System Design and Manufacturing (ESDM) Industry

Global demand for electronics remained strong in 2025, supported by growth in data-centre infrastructure and AI- related hardware. Industry reports indicate that electronic design revenues have increased approximately by 8-9% year-on-year in late 2025, reflecting sustained investment in advanced semiconductor and system designs.

Electronic design activity remained strong througRs. 2025, supported by continued development of high-performance computing, AI accelerators and advanced semiconductor architectures. Growth in design activity reflects sustained investment in next-generation electronics used in cloud infrastructure, telecommunications and intelligent devices.

Demand for industrial electronic equipment also improved during the year, supported by higher capital expenditure on manufacturing and increasing defence spending across multiple regions. These developments indicate continued global demand for advanced electronic systems and components.

Indian ESDM Industry

In India, strong consumer demand and policy support are driving rapid ESDM growth. Industry data project Indias ESDM market to reach about US$220 billion by FY2025 (roughly a 16% CAGR from 2019). The government has set ambitious targets (e.g. US$300B in manufacturing and US$120B in exports by FY26) and in FY25 electronics exports climbed to US$38.56 billion (up 20.4% YoY). These gains coincide with India becoming the worlds second-largest mobile-phone manufacturing hub (witRs. 300+ plants in FY25).

To support expansion, the Government of India has rolled out incentives like production-linked schemes (PLI worth ?22,900 crore announced in early 2025). As a result, Indias total electronics market has grown about 21% year-on- year over the past five years, reaching roughly ?16.5 lakh crore by FY25. The smartphone segment alone has accounted for around 62% of ESDM output in FY25. Other areas including industrial, IT hardware and automotive electronics are also expanding, bolstered by domestic manufacturing initiatives and global firms investing in India.

Government initiatives including the ?22,919 crore component scheme and investments exceeding f1.15 lakh crore are supporting domestic manufacturing.^

USA ESDM Industry

North America (especially the US) remains a key ESDM market. In mid-2025 the region witnessed an estimated 12% growth in electronic design spending, reflecting a robust demand for chips and software. U.S. companies continue to lead globally in semiconductor R&D and design. Additionally, new federal incentives (the CHIPS Act and related programs) are funding local chip fabs and assembly plants. Globally, there is a surge in semiconductor sales: Deloitte projects total chip revenue to reach US$975 billion in 2026- The sudden growth of the semiconductors and electronics industries support the continued strengthening of U.S. design and manufacturing, driven by stable defence and industrial demand.

Design-led EMS and Integrated Solutions Overview

The ESDM industry is transitioning from traditional contract manufacturing to design-led and integrated solutions. The capabilities include box-build assembly, where complete products are delivered with electronics, enclosures and wiring. There is also an increasing focus on in-house capabilities such as injection moulding and export-oriented manufacturing, along with expansion into system integration and mechatronics. Recent developments such as acquisition- led expansion are enabling access to new markets and strengthening global presence.

f~ Box-Build as a Key Capability

Demand is shifting toward complete product delivery, including enclosure, wiring and final assembly, reducing dependence on multivendor supply chains.

Entry into System Integration via Mechatronics

Early movement into mechatronics supports expansion into higher-value and integrated manufacturing solutions.

Outlook

The shift towards design-led manufacturing and integrated solutions is expected to continue. Companies with capabilities across design, manufacturing and system integration are likely to be better positioned as demand moves towards complete product solutions.

Electronic Manufacturing Services (EMS) Industry Global Electronic Manufacturing Services

The global Electronics Manufacturing Services (EMS) industry operates as an outsourcing model for electronics production across sectors such as telecom, automotive, industrial systems and healthcare. EMS providers undertake assembly, testing, supply chain management, and design and system integration functions as product complexity and time-to-market requirements increase. The global EMS market is estimated at around USD 593-648 billion in 2025 and is estimated to reach USD 946 billion and USD 1.19 trillion over the medium term, indicating steady growth driven by increasing electronics intensity across industries and higher outsourcing by Original Equipment Manufacturers (OEMs). The Asia-Pacific continues to account for the largest share of global EMS manufacturing, driven by component ecosystems, supply chain depth and scale advantages.

The broader electronics manufacturing ecosystem is also expanding, with demand being backed by telecom infrastructure, automotive electronics and industrial automation. There is a visible shift in the EMS value chain, with an increase in contribution from engineering services, prototyping and system-level manufacturing, compared to traditional assembly-led operations. This expansion is also driven by shorter product cycles and higher integration requirements across electronic products.

Outlook

Global EMS demand is likely to remain linked to electronics intensity across telecom infrastructure, automotive systems and industrial automation. Growth is expected to be supported by increasing outsourcing of complex assemblies and expansion of integrated manufacturing capabilities across regions. However, geopolitical uncertainty will impact the demand in the global EMS sector over the short and medium term.

Indian Electronic Manufacturing Services

Indias EMS industry has had a robust expansion at a rate higher than global markets, supported by production scale-up, policy measures and export growth. The Indian EMS market is estimated at USD 65 billion in 2025 and is projected to grow to USD 75.7 billion in 2026, with long-term projections of USD 197.8 billion by 2032, indicating sustained high growth. Production indicators during FY2025-26 show

significant scale-up in domestic manufacturing. Electronics

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production has increased to approximately ?12 lakh crore in FY2024-25, while electronics exports have grown to around ?3.3 lakh crore, indicating increasing integration with global supply chains. Mobile phone production has reached approximately ?5.45 lakh crore, positioning India among the largest global manufacturing bases for mobile devices.

^The Indian EMS market reached $65 billion in 2025 and $75.7 billion in 2026, supported by outsourcing and export demand.^

^Electronics production reached f12 lakh crore, with exports at ?3.3 lakh crore. Mobile manufacturing contributed ?5.45 lakh crore. ^

Policy support has played a key role in industry expansion. The Production Linked Incentive (PLI) scheme and Electronics Components Manufacturing Scheme, with an outlay of ?22,919 crore are focused on the localisation of components and sub-assemblies, improving domestic value addition and reducing import dependence . Investment commitments under these initiatives exceeded ?1.15 lakh crore, with an estimated production of over ?10.34 lakh crore over the next six years. Recent approvals under component manufacturing initiatives include investments of over USD 626 million across multiple projects, targeting production of electronic sub-assemblies, Printed Circuit Boards and modules, with an expected output of over ?65,000 crore. These developments indicate a gradual shift in industry structure from assembly-led manufacturing to system-level integration and component ecosystem development.

Outlook

Indias EMS industrys growth is expected to remain above global averages, bolstered by export demand, localisation of supply chains and expansion of component manufacturing. Growth is expected to be led by telecom infrastructure, industrial electronics and automotive applications.

Sectoral Analysis

Telecom

Overview

The telecom segment remains a core vertical within the EMS ecosystem, accounting for more than 10% of the global ESDM market by end-user segmentation. Growth in the segment is achieved by expansion of communication infrastructure, including base stations, routers and optical systems, all of which require high-frequency and high-density electronic assemblies. The transition to 5G has significantly increased semiconductor intensity, with advanced communication systems relying on RF chips, processors and network semiconductors. Globally, the semiconductor industry is projected to reach approximately USD 697 billion in 2025, growing at ~11% year-on-year, underpinned by demand from telecom, data centres and AI-driven applications. This increasing usage of semiconductor contents is adding to the complexity in EMS operations, shifting demand toward precision manufacturing and integrated solutions.

Outlook

The telecom segment is expected to maintain steady growth, backed by continued investments in 5G densification, fibre expansion and increasing enterprise data consumption. Semiconductor demand in telecom infrastructure is likely to rise further with the deployment of advanced technologies such as edge computing and AI-enabled networks. From an EMS perspective, value migration is predicted towards design-led manufacturing, RF integration and system-level (box-build) solutions as complexity driven by semiconductors increases. Players capable of handling high-density PCB assembly, thermal management and testing are awaiting to gain a higher value share.

Overview

The global consumer Internet of Things (loT) market is experiencing robust expansion, with its valuation rising from USD 301.38 billion in 2025 to an estimated USD 333.83 billion in 2026. This dynamic sector fundamentally reshapes daily digital lifestyles by interconnecting physical and digital assets, including smartphones, smart home appliances, and fitness tracking wearables. Hardware remains the dominant component segment, commanding over 37% of market revenue due to the widespread integration of microcontrollers and sensors into everyday devices.

The global robotics technology market is demonstrating rapid expansion, valued at USD 108.43 billion in 2025 and projected to reach USD 124.37 billion in 2026. This industry fundamentally alters operational efficiency across multiple sectors by automating repetitive, precise, and complex tasks. Hardware represents the dominant component segment, securing a massive 72% of the market share due to the intensive production of essential robotic structures, components, and machinery. Structurally, traditional industrial robots continue to lead the sector, capturing 52% of the overall market volume, with the manufacturing segment serving as the primary application driver at 68% of total revenue.Outlook

The future of the consumer IoT market points toward sustained long-term acceleration, with global market size projected to reach approximately USD 830.24 billion by 2035, progressing at a compound annual growth rate (CAGR) of 10.66%. A primary catalyst for this forward momentum is the global rollout of 5G networks, which drastically improves connectivity speed, lowers latency, and enhances the execution of interconnected gadgets across smart cities and automated vehicles.

Looking the robotics technology market points toward sustained long-term acceleration, with the global market size projected to hit approximately USD 416.26 billion by 2035, progressing at a compound annual growth rate (CAGR) of 14.40%. A primary catalyst for this growth is the rapid evolution of Industry 4.0 initiatives alongside rising demand for collaborative robots (cobots) designed to safely assist human workers. Automotive Electronics

Overview

The emergence of the automotive segment as a major growth driver for EMS is supported by increasing electronics content per vehicle. Modern vehicles, particularly electric vehicles, contain between 1,000 and 3,000 semiconductor chips, covering applications such as power electronics, sensors, infotainment and control systems. Concurrently, automotive semiconductors are also expected to grow at an approximate rate of 8-9% CAGR, driven by electrification and advanced driver systems. This has increased demand for high-reliability electronics manufacturing and system integration capabilities.

f~ Rising Electronics Complexity

EVs and telecom systems are increasing semiconductor usage. Electric vehicles require 1,000-3,000 chips per unit.

Outlook

The expected rapid growth of the automotive electronics segment is bolstered by EV adoption and increasing digitalisation of vehicles. Increasing semiconductor content per vehicle is believed to drive demand for embedded systems and system-level manufacturing. EMS players with capabilities in high-reliability assembly, power electronics and semiconductor integration are expected to benefit from increasing complexity and higher value addition.

Overview

Industrial electronics represents a stable and steadily growing segment, supported by automation and infrastructure development. The segment is expected to grow at ~6.5% CAGR between FY23 and FY26. Heavy reliance on semiconductors by industrial systems, including sensors, power devices and microcontrollers, for automation, control systems and monitoring applications. Increasing adoption of Industry 4.0 technologies is further driving semiconductor demand in industrial applications, particularly in smart manufacturing and digital control systems.

Outlook

The segment of industrial electronics is expected to maintain consistent growth, aided by automation, infrastructure investments and digital transformation. Increasing use of semiconductor-driven technologies such as IoT, AI and realtime monitoring is expected to raise electronics intensity across industrial applications. EMS players are expected to benefit from opportunities in customised system integration, embedded electronics and semiconductor-enabled solutions.

Aerospace and Defence

Overview

The aerospace and defence segment is characterised by high-reliability, low-volume manufacturing with stringent compliance requirements. The segment includes applications such as avionics, radar systems and communication equipment, all of which rely heavily on specialised semiconductors for processing, sensing and communication. EMS providers are increasingly taking part in this segment, driven by diversification into high- value verticals and long-term contracts. The segment also benefits from higher margins, with EMS players able to provide cost advantages of ~10—15% to OEMs through specialised manufacturing.

Outlook

The steady growth of the aerospace and defence segment is supported by localisation initiatives and increasing defence spending. Rising semiconductor content in defence systems, particularly in communication, surveillance and electronic warfare technologies, is expected to drive demand for advanced manufacturing. EMS players benefitting the most are those with design capabilities, semiconductor integration expertise and compliance certifications and they are expected to benefit from long-term contracts and stable revenue visibility.

(0) Medical Electronics

Overview

The medical electronics segment is witnessing steady growth, aided by increasing demand for healthcare devices and diagnostic equipment. The segment relies on high- precision semiconductor components for sensors, imaging chips and processing units used in diagnostic and monitoring systems. Industry reports indicate that medical electronics is expected to grow faster than the broader ESDM market due to increasing adoption of advanced technologies such as AI-driven diagnostics and telemedicine.

Outlook

The medical electronics segment is likely to grow steadily, supported by rising healthcare demand and localisation of device manufacturing. Increasing usage of semiconductor content in medical devices is expected to drive demand for precision manufacturing and testing. EMS players with capabilities in high-precision assembly, semiconductor handling and compliance standards are expected to benefit from specialised demand and higher-margin opportunities.

Overview

The railway segment is emerging as a steady demand contributor within EMS, supported by infrastructure modernisation and increasing electronics integration. Applications include signalling systems, train control systems, communication equipment and passenger information systems. Mobility, including railways and metro systems, is identified as a key growth opportunity vertical within the ESDM sector. Semiconductor content is increasing in railway systems through adoption of automation, digital signalling and safety technologies, which require sensors, control chips and communication modules.

Outlook

The railway segment is expected to grow steadily, supported by continued investments in infrastructure, electrification and safety systems. Increasing deployment of semiconductor- driven technologies such as automated signalling and real-time monitoring is expected to drive higher electronics content per project. EMS players with capabilities in industrial-grade electronics, system integration and box- build solutions are expected to benefit from stable demand and long project cycles.

^ Indian Electronic Manufacturing Services

Indias Electronics Manufacturing Services (EMS) sector is witnessing strong growth, driven by increasing domestic demand, expanding export opportunities and continued policy support. The market is estimated at USD 65 billion in 2025 and is projected to grow to USD 197.8 billion by 2032, reflecting a CAGR of 17.5% . This growth is supported by rising consumption across consumer electronics, automotive, telecom and industrial segments, along with increasing outsourcing by original equipment manufacturers.

The industry is undergoing a structural shift from traditional assembly-led manufacturing towards higher value-added activities such as product design, system integration and box-build assembly. This shift is linked to increasing product complexity and higher semiconductor content across end-use industries, particularly in telecom infrastructure, automotive electronics and industrial systems.

As semiconductor integration increases, EMS players are required to handle high-density PCB assemblies, advanced packaging and system-level manufacturing, enabling higher value capture within the supply chain.

Government initiatives have played a key role in accelerating industry growth. The approval of the ?22,919 crore Electronics Components Manufacturing Scheme in 2025 and additional incentives for PCBs, sub-assemblies and passive components are aimed at strengthening domestic manufacturing capabilities and reducing import dependence . These initiatives are also encouraging investments in component manufacturing, including printed circuit boards, semiconductor packaging and electronic modules, which are critical to improving domestic value addition.

At the same time, global supply chain realignment under the China+1 strategy is driving multinational companies to diversify manufacturing bases, positioning India as an alternative production hub. The expansion of assembly, testing, marking and packaging (ATMP) facilities and investments in semiconductor-linked manufacturing are further strengthening the ecosystem. Industry reports indicate that advanced packaging technologies and system- in-package solutions are becoming increasingly relevant as semiconductor usage expands across applications.

While the sector continues to face challenges such as dependence on imported semiconductor components and evolving supply chain requirements, the overall outlook remains stable. Competitive labour costs, a growing skilled workforce and ongoing infrastructure development are supporting industry expansion. As the domestic component ecosystem matures and value addition increases, Indias EMS sector is expected to play a larger role in global electronics manufacturing, particularly in design-led and system-level manufacturing capabilities.

Outlook

Indias EMS industry is entering a phase where growth is increasingly driven by capability depth, sector alignment and integration strength, rather than low-cost manufacturing alone. Strong domestic demand, export growth and policy support are expected to sustain industry expansion over the medium term. At the same time, the ability to offer design-led solutions, box-build capabilities and multi-sector expertise is expected to define competitive positioning. In this context, Aimtrons strategy of expanding into design, system integration and high-growth sectors, supported by capacity expansion and acquisitions, aligns with the evolving structure of the Indian EMS industry and positions the Company to capture higher-value opportunities.

Key Trends Shaping the Indian EMS Industry Shift Toward Design-Led Manufacturing in India

Indias EMS industry is moving beyond cost-driven assembly toward design-led and engineering-integrated manufacturing, driven by increasing product complexity and OEM outsourcing of design functions. The Indian EMS market is estimated at USD 65 billion in 2025 and is expected to reach USD 197.8 billion by 2032, growing at ~17.5% CAGR, indicating rapid scaling of capabilities beyond basic manufacturing . Alongside this growth, OEMs in India are increasingly outsourcing design, prototyping and validation, reflecting a shift toward deeper collaboration with EMS providers. This structural shift is aligned with Aimtrons positioning toward design and engineering-led solutions, where value creation is linked to early-stage involvement in product development rather than only execution.

System Integration and Box-Build as Core Differentiators

The Indian EMS ecosystem is witnessing a transition from PCB assembly to complete system-level manufacturing, including box-build, wiring, enclosure assembly and final product testing. This shift is being driven by OEM demand for single-vendor integrated solutions, which reduce supply chain complexity and improve delivery timelines. Industry trends indicate that EMS providers in India are expanding

service offerings to include end-to-end manufacturing, including final product assembly and testing, particularly in industrial and telecom applications. For the Company, this aligns with the increasing focus on box-build capabilities and system integration, enabling participation in higher-value segments rather than only component-level manufacturing.

Export-Led Growth and Global Supply Chain Integration

Indias EMS growth is increasingly export-driven, supported by global supply chain diversification and the China+1 strategy. Electronics production in India is expected to reach ~?27.7 lakh crore by FY2028, with exports projected to grow at ~43.9% CAGR, indicating strong global demand for India- based manufacturing . Additionally, India currently accounts only for a relatively small share of global EMS output, indicating significant headroom for expansion.

This shift is enabling Indian EMS companies to integrate into global supply chains, particularly in sectors such as telecom, automotive and industrial electronics. Aimtrons focus on exports and global partnerships aligns with this structural opportunity.

Sector-Led Growth Driven by High-Complexity Applications

The current phase of EMS growth in India is increasingly driven by sector-specific demand, particularly from telecom, automotive, industrial, aerospace & defence and railways. Growth in these sectors is supported by increasing electronics penetration, infrastructure development and rising demand for advanced systems. Industry reports indicate that EMS demand in India is expanding across applications such as telecom equipment, automotive electronics, IoT devices and industrial automation systems, reflecting diversification beyond consumer electronics.

These sectors require high-reliability and complex system integration, making them more aligned with EMS players. This trend is directly aligned with Aimtrons focus on telecom, defence and railways, where demand is driven by long-term projects and higher technical requirements.

Rapid Scale-Up of Domestic Electronics Ecosystem

Indias electronics ecosystem is expanding rapidly, supported by domestic demand, policy incentives and increasing localisation. The overall electronics market in India is expected to reach USD 300 billion by 2025-26, indicating strong demand for electronic products and manufacturing capabilities. Concurrently, EMS output is projected to grow significantly, with industry estimates indicating expansion from USD 33 billion in 2024 to USD 155 billion by 2030, reflecting a CAGR of around 30%. This expansion is driving demand for PCB assembly, sub-assemblies and system-level

manufacturing, creating opportunities for EMS providers to scale operations and improve value addition.

Increasing Integration of Advanced Manufacturing Technologies

Indian EMS companies are increasingly adopting AI, IoT and automation technologies to improve manufacturing efficiency and quality. Industry trends highlight growing adoption of advanced technologies such as 5G, IoT and AI- enabled systems, which are increasing the complexity of electronic products and driving demand for specialised EMS capabilities. These technologies are also enabling real-time monitoring, predictive maintenance and improved production planning within manufacturing facilities. This transition supports the move toward digitally enabled manufacturing and process optimisation, particularly in high-density PCB assembly and system-level integration.

US Electronic Manufacturing Services

The continuous expansion of the US Electronics Manufacturing Services (EMS) is supported by rising demand for high-performance electronics across sectors such as cloud infrastructure, aerospace & defence, healthcare devices and automotive systems. The U.S. EMS market is estimated at ~USD 108-110 billion in 2026, growing steadily at a CAGR of nearly 5.9%, driven by increasing localisation and advanced manufacturing investments. North America remains a key contributor to global EMS demand, supported by strong technology adoption and high- value manufacturing capabilities.

A major driver of growth in the U.S. EMS ecosystem is the increasing demand for high-complexity electronic systems, particularly in areas such as AI computing infrastructure, electric vehicles and advanced industrial equipment. OEMs are increasingly outsourcing manufacturing of complex

assemblies, including control systems, computing modules and high-reliability electronics, to specialised EMS providers capable of precision manufacturing and system integration. This has led to a growing emphasis on engineering-led services, where EMS providers are involved in prototyping, testing and product lifecycle support in addition to manufacturing.

To meet evolving industry requirements, US-based EMS companies are investing in automation, robotics and digitally integrated production systems, enabling higher efficiency and improved process control.

The industry is increasingly characterised by low-volume, high-mix production, particularly in sectors such as aerospace, medical devices and industrial electronics. At the same time, policy-driven initiatives and supply chain considerations are encouraging greater localisation of manufacturing, particularly in critical technology areas.

This is resulting in a hybrid model where high-value manufacturing is retained domestically, while cost-sensitive production continues to be globally distributed.

Global Printed Circuit Board Assembly Market

The global Printed Circuit Board Assembly (PCBA) market continues to grow steadily, supported by increasing electronics demand across sectors such as consumer electronics, automotive, telecom and industrial applications. The market is estimated at approximately USD 99-104 billion in 2025 and is expected to reach over USD 160 billion by 2035, reflecting a CAGR of around 5%-5.5%.

Growth in the PCBA market is closely linked to increasing electronics penetration and rising complexity of electronic systems. The market is characterised by increasing adoption of advanced technologies such as Surface Mount Technology (SMT), multilayer PCBs and High-Density Interconnect (HDI), which enable miniaturisation and improved performance of electronic devices.

Demand is increasingly shifting toward complex PCB architectures due to higher functionality requirements across applications. The demand for PCB assemblies is being driven by high-growth applications such as telecom infrastructure, automotive electronics, industrial automation and healthcare devices. Increasing use of advanced electronics in these sectors is leading to higher component density and complexity, driving demand for precision assembly and advanced manufacturing capabilities.

Outlook

The global PCBA market is expected to maintain steady growth, supported by increasing demand for electronics and continued advancements in PCB technologies. Growth is expected to be driven by applications requiring high-speed and high-frequency performance, including telecom networks, electric vehicles and industrial automation systems.

Increasing adoption of automation and digital manufacturing technologies is expected to improve efficiency and product quality. At the same time, supply chain diversification and regional manufacturing strategies are expected to influence production distribution, with the Asia-Pacific continuing to dominate while other regions are expanding capacity to reduce supply chain risks.

Indian Printed Circuit Board Assembly Market

The Indian Printed Circuit Board (PCB) and PCBA markets are witnessing strong growth, driven by an increase in domestic electronics manufacturing and policy-driven localisation. The Indian PCB market is currently estimated at around USD 5 billion, with demand expected to grow at approximately 20% annually. This indicates strong momentum across sectors.

Demand for PCBs in India is driven by sectors such as consumer electronics, telecom, automotive and industrial applications. The expansion of mobile manufacturing, increasing adoption of connected devices and growth in automotive electronics are key contributors to this demand. At the same time, increasing electronics content per device is leading to higher PCB consumption across applications.

Despite this growth, a large portion of PCB demand in India continues to be met through imports, particularly for high- end and advanced PCBs. Industry estimates indicate that imports account for nearly 88% of PCB demand, highlighting the need for domestic capability development. However, increasing investments in local manufacturing and policy support are expected to gradually reduce this dependence.

The market is also witnessing a shift toward advanced PCB technologies such as multilayer and flexible PCBs, which are expected to grow at 27%-30% CAGR, driven by demand for compact and high-performance electronic devices [6]. This transition is increasing the complexity of PCB manufacturing and driving the need for advanced production capabilities.

Outlook

The Indian PCBA market is expected to grow at a faster pace compared to global markets, bolstered by increasing electronics production, export opportunities and localisation initiatives. Growth is expected to be driven by sectors such as automotive, telecom and industrial electronics, where electronics content is increasing significantly. Advancements in PCB technologies and increasing focus on high-complexity boards are expected to create opportunities for higher value addition within the domestic ecosystem.

Continued policy support and investments in manufacturing infrastructure are expected to strengthen Indias position in the global electronics supply chain.

Opportunities

Value Migration Towards Integrated Solutions

The EMS industry in India is witnessing a shift where value is moving from standalone assembly toward integrated offerings such as design support, system integration and box-build manufacturing. OEMs are increasingly preferring partners that can handle the full product lifecycle, reducing coordination across multiple vendors. This creates opportunities for companies that have expanded capabilities across design, manufacturing and final product integration, enabling higher value capture within the supply chain.

Export-Led Order Visibility and Global Integration

Indias EMS sector is increasingly benefiting from export- driven demand, supported by a global supply chain diversification and outsourcing trends. Industry estimates indicate that exports could account for over 30-35% of total electronics production in the medium term, providing stable order pipelines for domestic manufacturers. Companies with international exposure and multi-geography linkages are better positioned to benefit from this shift.

Sector-Specific Demand in High-Reliability Applications

Growth is increasingly concentrated in sectors such as aerospace & defence, telecom infrastructure, railways and industrial electronics, where product complexity and reliability requirements are higher. These segments require long-term project execution, certification standards and engineering capabilities, creating entry barriers and enabling better margin profiles. This aligns with Aimtrons focus on telecom partnerships, defence electronics and railway applications, where demand visibility is relatively stable.

Localisation of Components and Sub-Assemblies

Indias continued dependence on imported components is creating opportunities for domestic manufacturing of PCBs, sub-assemblies and electronic modules. Government initiatives aimed at building a component ecosystem are expected to increase domestic value addition and reduce import dependence over time. This transition is expected to improve cost competitiveness and strengthen the overall EMS value chain.

Challenges

Fragmented Component Ecosystem and Import Dependence

Despite growth in assembly capabilities, India continues to rely heavily on imports for high-value components and advanced PCBs. This dependence exposes manufacturers to supply disruptions, currency volatility and cost fluctuations. Industry data indicates that a significant portion of electronics demand is still met through imports, highlighting gaps in domestic component manufacturing.

Execution Complexity in Multi-Process Manufacturing

As EMS companies move toward integrated and multiprocess manufacturing, operational complexity increases. Managing multiple processes such as PCB assembly, mechanical integration and final system testing within a single platform requires investment in advanced machinery, a skilled workforce and quality systems. This increases execution risk, particularly for companies transitioning from assembly-led models.

Long Gestation Cycles in High-Value Sectors

While sectors such as aerospace, defence and railways offer higher-value opportunities, they also involve long approval cycles, strict compliance requirements and extended project timelines. These impacts working capital cycles and delay revenue realisation, requiring strong balance sheet support and execution capabilities.

Global Competition and Cost Pressures

Indian EMS players face increasing competition from established global manufacturing hubs, particularly in Southeast Asia and China, which continue to offer scale advantages and mature supply chains. In addition, as global EMS players expand operations in India, competitive intensity is increasing across both pricing and capabilities.

Business Segments

Electronic Systems Design and Manufacturing Services

The Indian electronics system design and manufacturing (ESDM) sector is one of the fastest-growing sectors in the economy and is witnessing a strong expansion in the country. . This demand growth is driven by an expanding middle-class population, rising disposable incomes, and declining electronics prices. As a result, India has emerged as one of the largest consumer electronics markets in the Asia-Pacific region and a hub for electronic chip design and embedded software. Indian manufacturers are attracting the attention of multinational corporations due to shifting global landscapes in electronics design and manufacturing capabilities, as well as cost structures. Companies from all over the world are striving to develop local capacities in India, not only to serve the domestic market but also to cater to international markets. India witnessed a substantial spike in demand for electronic products in the last few years; this is mainly attributed to Indias position as the second-largest mobile phone manufacturer worldwide and a surge in the internet penetration rate. The smartphone segment has emerged as the backbone of Indias ESDM industry. Looking ahead, the industry is expected to expand at a CAGR of 2025% over the next five years.

Key growth drivers

1. Global supply chain diversification: Global OEMs are aggressively de-risking their supply chains by moving manufacturing away from China. India has emerged as a premier alternative due to its cost-competitive labour, improving logistical networks, and large Englishspeaking talent pool.

2. Government Support and PLI Schemes: The central and state governments are driving rapid growth by offering incentives on incremental sales of manufactured goods. Initiatives like the Electronics Component Manufacturing Scheme, Semiconductor Mission, and Electronics Manufacturing Clusters (EMC 2.0) are deepening domestic value-chain capabilities.

3. Infrastructure and Localisation: The Indian

governments focus on heavy infrastructure spending (e.g., roads, railways, and logistics) has dramatically reduced shipping times and supply chain friction, making localized production more economically viable.

Printed Circuit Board Assembly (PCBA)

The global Printed Circuit Board Assembly (PCBA) market represents the operational backbone of modern electronics manufacturing, serving as the essential process where electronic components are soldered and integrated onto bare PCBs to create functional devices. The market is experiencing robust growth, driven by massive demand across multiple sectors, including consumer electronics, automotive technology, telecommunications, and healthcare. Key architectural trends shaping the industry include intense

miniaturization, higher circuit density, and the rising adoption of multi-layer and flexible PCBs to accommodate compact, high-performance applications like wearable medical

biosensors and smart-factory industrial IoT infrastructure.

Key growth drivers

1. AI & High-Performance Computing: The explosive demand for artificial intelligence and cloud computing infrastructure requires massive buildouts of hyperscale data centers. This translates to an urgent need for complex, high-speed, and multi-layered PCBs.

2. Automotive Electrification (EVs) & Autonomous

Driving: Modern vehicles are increasingly defined by software. The pivot toward Electric Vehicles (EVs) and autonomous systems necessitates highly sophisticated PCBs to manage battery systems, sensors, advanced driver-assistance systems (ADAS), and complex infotainment.

3. Telecom Upgrades (5G & 6G): Telecommunications

infrastructure requires heavy-duty RF/microwave and high-frequency PCBs. The ongoing deployment of

next-generation networks fuels demand for precision microvia technology and Any-layer High-Density

Interconnect (HDI) boards.

4. IoT & Smart Devices: The proliferation of Internet of Things (IoT) devices in smart homes, industrial automation, and wearable technology requires compact, lightweight, and incredibly efficient circuit boards.

Company Overview

Aimtron Electronics Limited is an Electronics System Design and Manufacturing (ESDM) company engaged in providing end-to-end solutions across product design, engineering and manufacturing. Established in 2011, the Company operates across India and the United States, supporting global OEMs through the complete product lifecycle from concept and design to manufacturing, system integration and sustained production. The Companys offerings include printed circuit board (PCB) design and assembly, embedded systems and electromechanical box-build solutions, catering to sectors such as telecom, aerospace & defence, industrial electronics and medical applications. Over time, Aimtron has expanded its capabilities from standalone manufacturing to integrated solutions, combining design expertise with advanced manufacturing processes. This transition reflects a broader shift toward higher value-added services, where the Company participates across multiple stages of the product lifecycle.

During the year, the Company continued to strengthen its positioning as a design-led and system integration-focused EMS provider, with increased emphasis on box-build products and multi-process manufacturing capabilities. The expansion of in-house capabilities, including areas such as injection moulding and export-oriented operations, supports

greater control over quality, timelines and value addition. In parallel, the Company has aligned its growth strategy toward high-reliability sectors such as telecom, aerospace & defence and railways, where demand is driven by system complexity and long-term project visibility.

A key development during the year was the acquisition of a U.S.-based ESDM and ODM company, Aimtron International Controls (AIC), aimed at strengthening the Companys global footprint and enhancing access to international markets. The acquired business is estimated to generate approximately USD 17 million in revenue, providing additional scale and diversification to the Companys operations. This acquisition supports Aimtrons strategy of expanding its presence in high-value markets while improving its ability to offer integrated solutions across geographies.

^The acquisition of a U.S.-based ESDM company, Aimtron International Controls, adds $17 million in revenue and expands access to international markets. ^

Through these developments, the Company is transitioning from a traditional EMS player toward a more integrated and design-oriented solutions provider, with a focus on expanding capabilities, strengthening global linkages and participating in higher-value segments of the electronics manufacturing ecosystem.

Aimtron Mechatronics

Aimtron Mechatronics operates as a premier, wholly owned subsidiary of Aimtron Electronics, strategically established

to scale box build assembly, electromechanical engineering, and system-level integration capabilities. Operating from an upcoming three-acre next-generation greenfield manufacturing campus in Vadodara, Gujarat, the division is custom-built to deliver fully integrated, end-to-end electronic product solutions that support increasing demand from global original equipment manufacturers.

The company seamlessly merges mechanical engineering, electronics, control systems, and embedded software to support complex systems where electronic intelligence and mechanical elements work together harmoniously.

The extensive operational portfolio includes comprehensive protective treatments for printed circuit boards, utilizing automated conformal coating, parylene coating, potting, and precision ultrasonic welding to ensure maximum durability. Backing this infrastructure is a robust mechanical capability suite featuring full-scale metal fabrication, tool manufacturing, laser cutting, CNC bending, casting, and precision stamping. The firm also maintains a sophisticated plastic and rubber division capable of precision injection molding, insert molding, over-molding, and rapid prototyping services like stereolithography and selective laser sintering. Additionally, the company designs and manufactures an array of thermal management systems, including specialized heat exchangers, refrigeration components, and complete HVAC installations.

By working closely within the integrated manufacturing ecosystem of the group, the business effectively reduces supply chain complexity and speeds up time-to-market. This unified approach allows clients to transition smoothly from bare printed circuit board assemblies into fully functional, tested, and retail-ready mechatronic products.

Continuous Investment in Advanced Technology Capabilities

The Company operates in high-technology and precision-driven sectors, necessitating sustained investments in R&D, automation, advanced manufacturing infrastructure and evolving engineering capabilities.

Supply Chain Dependence for Critical Electronic Components

Dependence on select suppliers for critical electronic components and semiconductor inputs may expose the Company to procurement disruptions, lead-time challenges and input cost volatility.

Cyclical Exposure Across Key End-Use Industries

The Companys presence across sectors such as automotive, industrial automation, aerospace and defence may subject business performance to sectoral demand fluctuations and broader economic cycles.

Rising Demand Across High-Growth Electronics Segments

Increasing adoption of electronics across EVs, aerospace & defence, meditech, IoT, robotics and industrial automation presents significant long-term growth opportunities for the Company.

Supportive Government Policies and Localisation Initiatives

Government-led initiatives such as Make in India and the growing focus on domestic electronics manufacturing are expected to create opportunities for capacity expansion and localisation-driven growth.

Expansion into Emerging and High-Potential Industry Verticals

The Company has opportunities to further diversify into emerging sectors and high- value applications driven by rising demand for advanced electronics and integrated engineering solutions.

Geopolitical and Global Supply Chain Uncertainties

Evolving geopolitical tensions and global trade disruptions may impact supply-chain stability, sourcing efficiency and overall business continuity across international operations.

Semiconductor and Critical Raw Material Shortages

Global shortages and price volatility of semiconductors and other critical electronic components may affect procurement timelines, production schedules and cost structures.

Rising Cybersecurity and Intellectual Property Risks

Increasing integration of embedded systems, IoT and connected technologies may expose the Company to heightened cybersecurity threats and intellectual property protection risks.

The Global Margin Squeeze

EMS providers operate on historically tight margins. Because raw components make up the vast majority of product costs, a 10% to 25% tariff on semiconductors, PCBs, or passive components can severely erode or completely eliminate profitability if the provider cannot pass the cost to the brand (OEM).

Performance in FY 2026 Industry wise performance

Particulars	FY 2025-26		FY 2024-25
	Amount	% of Revenue	Amount	% of Revenue
Aerospace / Defence	30.74	0.12%	843.62	5.33%
Automobiles	-	-	970.18	6.13%
BMS / Automotive	1729.45	6.73%	1.04	0.01%
Gaming	1335.07	5.19%	1180.71	7.46%
Industrial Sector	5983.74	23.27%	6796.41	42.93%
Drones and UAV	559.21	2.17%	377.74	2.39%
IoT / Robotics	3358.56	13.06%	3040.82	19.21%
Medical & Health care	1880.86	7.31%	1566.44	9.89%
Power	4752.12	18.48%	871.52	5.51%
Oil & Gas	333.76	1.30%	182.17	1.15%
Others	-	-	0.07	0.00%
Telecom / Network Security	5723.90	22.26%
Railway	26.00	0.10%
Total	25713.41	100%	15830.73	100%

Financial Performance

Particulars	FY 2025-26	FY 2024-2025
Revenue from Operation	3,011.59	1,591.8
Total Expenditure	2,353.9	1,252.1
COGS	2,136.3	1,161.1
Employee Benefit Expenses	120.0	49.2
Other Expenses	97.7	41.8
EBITDA	657.7	339.8
EBITDA Margin (%)	21.8	21.3
Other Income	23.6	29.2
Depreciation	65.4	46.4
EBIT	615.9	322.6
Interest	6.8	2.4
Profit Before Tax	609.1	320.2
Tax	149.4	63.9
Profit After Tax	459.7	256.3
Net Profit Margin (%)	15.3	16.1

Human Resource

During the year under review, the Company continued to strengthen its human resource capabilities in line with its expanding global operations and transition towards higher- value, design-led ESDM solutions under its Aimtron 2.0 journey. The Company focused on building a technically skilled and future-ready workforce across engineering, manufacturing, quality, testing, and program management functions to support growing opportunities in AI/IoT, aerospace & defence, medical electronics, industrial automation, data center power electronics, and other mission- critical applications. Significant emphasis was placed on capability development, technical upskilling, leadership building, and cross-functional collaboration, particularly to support ODM, box-build, and complex electronics programs. Following the integration of ICS/AIC operations in the United States, the Company also focused on strengthening global workforce alignment, structured HR processes, performance management systems, and employee engagement initiatives to build a scalable, agile, and disciplined organisation aligned with its long-term growth strategy.

Details of significant changes in financial ratio

Reported in financial statements as per applicable accounting standards.

Disclosure of Accounting Treatment

The financial statements for the year ended 31^st March, 2026 have been prepared as prescribed in accounting standards and there is no change in treatment of the said accounting standards. Therefore, no explanation by the management is required for the same.

Internal Control Systems and their Adequacy

The Company has strengthened its internal control and audit aspects by appointing outside agency for internal audit of certain important aspects of operations, apart from usual transactional verifications. There are adequate checks and controls to ensure compliance of various statutes.

Cautionary statement

The Management Discussion and Analysis (MDA) section often includes statements about future prospects. These statements, which address both known and unknown risks and uncertainties, can lead to significant differences between actual outcomes and the predictions made. The reports estimates rely on the Companys assumptions, which consider the most recent internal and external data. However, keep in mind that the underlying factors behind these assumptions can change over time, potentially affecting the estimates. Its essential to recognize that forward-looking statements apply only to the date they are made and reflect the Companys current intentions, beliefs, or assumptions. The Company is not obligated to revise or update these statements based on new information or future events