Ameya Precision Engineers Ltd Management Discussions

The Management Discussion and Analysis (MD&A) outlines the Companys operational performance, market developments, challenges, and long-term strategy. It highlights our roadmap to becoming a market-driven provider of diverse engineering solutions. Despite global uncertainties and market competition, we remain confident in expanding our domestic and international footprint through strategic execution, innovation, and a strong customer focus.

INTRODUCTION

This section of the Annual Report contains forward-looking statements based on managements current expectations, estimates, and projections. These statements involve risks and uncertainties and are subject to change due to various external and internal factors. Actual results may differ materially from those expressed or implied herein. The MD&A should be read in conjunction with the Companys financial statements and accompanying notes.

a. Industry Structure and Developments

Ameya Precision Engineers Limited operates in the high-precision capital goods and engineering components industry. The Company specializes in manufacturing critical, high-tolerance components such as valve stems, shafts, precision trim parts, hard-facing overlays, and custom subassemblies primarily catering to global and domestic pump and valve manufacturers, oil & gas, water management, and power generation sectors.

The global precision engineering market is undergoing significant structural shifts:

?€? Global Supply Chain Realignment ("China+1") : Global buyers are diversifying their supply chains away from China, boosting demand for reliable Indian component suppliers.

?€? Higher Metallurgical & Technical Demands: End-user industries increasingly require specialized, highly durable, and corrosion-resistant components built to handle extreme operating pressures.

?€? Sustained Global Capital Expenditure Cycle: Growing global investments in energy, infrastructure, and water treatment are driving consistent order inflows for industrial pumps and valves.

b. Opportunities and Threats Opportunities

1. Expanding Global Footprint: As a designated One-Star Export House serving tier-1 clients across North America, Europe, and Asia-Pacific, the Company is positioned to capture additional market share through long-term client relationships.

2. High-Value Addition & Specialized Overlays: Rising demand for high-margin hard-facing overlays (wear and corrosion-resistant coatings) offers room for margin expansion.

3. Advanced Capability Integration: Modernization of manufacturing infrastructure enables execution of higher-complexity customer designs and sub-assemblies.

4. New sectors: defence and nuclear Threats

1. Raw Material Price Volatility: Fluctuations in international prices of specialized alloy steel, stainless steel, and hard-facing materials can exert pressure on operating margins if input cost

increases cannot be immediately passed on.

2. Global Macroeconomic Slowdown: Softening energy or industrial capital expenditure in key export destinations could slow down order intake.

3. Logistics & Lead Times: Ongoing disruptions in global freight routes can lead to extended transit timelines and higher freight costs.

4. Geopolitics: Ongoing conflict in middle east, strait of Hormuz which is disturbing supply chain worldwide.

c. Segment-wise or Product-wise Performance

During the year, the Company recorded a total turnover of 40.23 crore, with the Valve segment emerging as the largest revenue driver at 27.47 crore, representing a dominant share of the overall business. The Pump segment contributed 11.02 crore, reaffirming its position as the second-largest contributor to the Companys portfolio. The Defence segment generated 61.77 lakhs, while Others accounted for 1.05 crore, reflecting niche but strategic market opportunities. This revenue composition highlights the Companys strong market leadership in the Valve segment, supported by steady performance in Pumps and a growing footprint in specialized sectors such as Defence. The balanced diversification across sectors positions the Company to leverage cross-segment synergies and tap into emerging demand in both core and allied markets.

ZED Certification:

The Company is proud to share that it has been awarded the "ZED Certification" by the Ministry of Micro, Small and Medium Enterprises under the MSME Sustainable (ZED) Certification Scheme. This recognition reflects the Companys commitment towards quality, environmental responsibility, and sustainable business practices. The certification underscores our continuous efforts to enhance operational efficiency, reduce environmental impact, and adopt best-in-class manufacturing and management standards in line with national sustainability objectives.

d. Outlook

In the coming year, the Company will focus on driving sustainable top-line growth by increasing value addition, expanding into new markets, and integrating advanced capabilities. Key strategic priorities include:

1. Customer Acquisition

Objective: Expand the Companys customer base by leveraging its reputation as a trusted supplier of precision engineering components.

Strategy:

?€? Demonstrate Proven Expertise: Market the Companys strong track record through case studies, testimonials, and performance metrics to build credibility with potential clients.

?€? Targeted Outreach: Participate in trade shows, industry forums, and execute focused marketing campaigns to identify and engage new customers.

?€? Sales Team Enhancement: Strengthen the business development function through expanded sales and marketing teams, tailored value propositions, and industry-specific outreach.

2. Strengthening Customer Relationships

Objective: Deepen relationships with existing clients to uncover new growth opportunities and enhance customer loyalty.

Strategy:

Engagement Programs: Regular account reviews, personalized communication, and feedback mechanisms to anticipate customer needs.

Value-Added Solutions: Offer tailored products or services that directly address client challenges, enhancing satisfaction and retention.

3. Leveraging Developed Capabilities

Objective: Maximize the potential of technological advancements and process upgrades.

Strategy:

New Market Penetration: Identify and target untapped sectors or geographies where the Companys expertise can provide competitive advantage.

Enhanced Product Offering: Continuously refine offerings to align with evolving customer expectations, including cost-efficiency and quality improvements.

Strategic Collaborations: Pursue partnerships or joint ventures that amplify the impact of developed capabilities and open new business avenues.

4. Focus on Research and Development (R&D)

Objective: Innovate and diversify offerings to remain competitive and meet emerging market demands.

Strategy:

Technology Integration: Invest in emerging technologies aligned with industry trends, including automation and digital solutions.

R&D Focus: Strengthen R&D efforts to explore new product lines and advanced manufacturing techniques.

Skill Development: Train employees to effectively implement and operate new technologies and innovations.

e. Risks and Concerns

Factors that could significantly influence the Companys operations include, but are not limited to, economic and political developments in India and other countries, including geopolitical tensions such as the Russia-Ukraine conflict and the ongoing instability in the Middle East. These situations may affect the Companys finances, customer order bookings, and overall global demand environment.

In addition, foreign exchange rate fluctuations continue to impact product pricing and competitiveness in international markets. Extended lead times due to global supply chain disruptions

also pose challenges in timely delivery and execution. Other risks include interest rate volatility, changes in government policies and regulations, amendments to tax laws, and other incidental or unforeseen factors.

f. Internal Control Systems and Their Adequacy

The Company maintains an adequate internal control framework commensurate with its scale and operational complexity:

?€? Quality Assurance & Compliance: Comprehensive in-house inspection systems monitor raw materials, in-process machining, and finished goods to ensure strict compliance with customer specifications and ISO 9001:2015 quality norms.

?€? Financial Controls: Structured operational controls, clear authorization matrices, and computerized accounting systems safeguard assets against unauthorized use or disposition.

?€? Periodic Audits: Regular statutory and internal checks ensure accurate financial reporting and strict adherence to applicable legal and regulatory standards.

?€? Infrastructure and Quality Standards: Backed by state-of-the-art machinery, modern tooling, and an experienced technical team, Ameya Precision Engineers Limited delivers high-precision products with operational efficiency. Our infrastructure is continuously modernized to keep pace with global technological trends. To serve our international customer base, we enforce stringent quality controls and international compliance across all manufacturing processes. Our ISO 9001:2015 certification reflects our commitment to excellence, continuous improvement, and the highest standards of customer satisfaction.

g. Discussion on Financial Performance with Respect to Operational Performance

The Companys operational efficiency and continuous focus on high-value products have translated into consistent financial performance:

?€? Top-line Growth: Operating revenue has steadily grown, driven by sustained execution of export and domestic order volumes.

?€? Operating Margins & Profitability: EBITDA and net profit margins have shown expansion, supported by improved capacity utilization, cost control, and a favourable product mix featuring higher-value alloy overlays.

?€? Balance Sheet Stability & Debt Profile: The Company maintains a conservative capital structure with minimal long-term debt and low interest expenses, ensuring strong coverage ratios and financial stability.

?€? Working Capital Management: Active monitoring of working capital cycles and inventory turnover helps mitigate liquidity risks associated with export delivery schedules.

h. Material Developments in Human Resources / Industrial Relations Front

The Company considers its human capital as a core asset for driving technological excellence and precision manufacturing.

?€? Headcount: The Company employs about 127 employees across its corporate, engineering, quality control, and shop-floor operations.

?€? Skill Enhancement & Safety: Regular training programs are conducted to upgrade technical skills in precision machining, metallurgical testing, safety procedures, and quality standards.

?€? Industrial Relations: Industrial relations across the manufacturing units remained cordial and collaborative throughout the year.

OVERALL IMPACT

By implementing the above strategies, the Company aims not only to grow its top line but also to enhance profitability and operational efficiency. The synergistic effect of acquiring new customers, deepening client relationships, optimizing capabilities, and embracing innovation will lead to a more dynamic, resilient, and competitive business model.

APPRECIATION AND ACKNOWLEDGEMENTS

Our journey has always been shaped by the trust and challenges presented by our valued customers, who continue to motivate us to innovate and maintain the highest standards in precision engineering. We thank them for their continued partnership.

We also extend our heartfelt appreciation to our dedicated team, whose belief in our vision and efforts to build the right organizational culture have been instrumental in driving transformation and growth. Special thanks are due to the Board of Directors for their consistent support, strategic insights, and valuable suggestions that have helped strengthen governance and management practices.

The Board remains confident in the future prospects of Ameya Precision Engineers Limited. With a clear focus on expanding our customer base and enhancing production capacity, we are well- positioned to scale new heights in the years ahead.

Cautionary Statement

Statements made in the Management Discussion and Analysis and elsewhere in this Annual Report describing the Companys objectives, projections, estimates, expectations, or predictions may be considered forward-looking statements. These statements are based on certain assumptions and expectations of future events and are subject to various known and unknown risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied in such statements.

Factors that could significantly influence the Companys operations include, but are not limited to, economic and political developments in India and other countries, including geopolitical tensions such as the Russia-Ukraine conflict and the ongoing instability in the Middle East. These situations may affect the Companys finances, customer order bookings, and overall global demand environment.

In addition, foreign exchange rate fluctuations continue to impact product pricing and competitiveness in international markets. Extended lead times due to global supply chain disruptions also pose challenges in timely delivery and execution. Other risks include interest rate volatility, changes in government policies and regulations, amendments to tax laws, and other incidental or unforeseen factors.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

By Order of the Board of Directors Ameya Precision Engineers Limited

Sd/-	Sd/-	Sd/-
Bipin Shirish Pande	Shirish Madhukar Pande	Chaitanya M. Date
Managing Director	Director and CFO	Company Secretary
DIN:06442748	DIN: 01855632	F14103
Date: 18.08.2026
Place: Pune