Amic Forging Ltd Management Discussions

The forging sector is considered one of the backbones of the manufacturing industry. The forging process produces components with high strength, durability, reliability and fatigue resistance and is therefore widely used for critical and safety-sensitive applications. Forged components are an important input for several key sectors supporting Indias economic growth, including automobiles, general engineering, agriculture, aerospace, defence, power, construction and mining equipment, railways and other industrial applications.

The Indian forging industry is characterised by a combination of large organised manufacturers and a large number of small and medium-sized enterprises. Forging capacities are spread across major industrial and automotive clusters in the country, with significant presence in the Western region comprising Maharashtra and Gujarat, the Northern region comprising Punjab, Haryana and Delhi, the Southern region comprising Tamil Nadu, Karnataka and Andhra Pradesh, and the Eastern region comprising Jharkhand and West Bengal. The organised sector has a significant presence in closed-die and precision forging, while smaller and unorganised players continue to have a substantial presence in open-die and conventional forging applications.

During FY 2025-26, the Indian forging industry continued to witness healthy demand, supported by growth in the automotive sector, infrastructure and capital expenditure, defence manufacturing, aerospace, railways, construction equipment and general engineering.

The industry is also witnessing increasing diversification beyond conventional automotive applications. Aerospace, defence, railways, agriculture, construction equipment, power and industrial machinery are emerging as important growth segments. In particular, the continued expansion of domestic defence manufacturing and increasing emphasis on indigenisation are creating opportunities for Indian manufacturers of high-strength, precision-engineered and safety-critical forged components.

Despite the favourable long-term outlook, the forging industry continues to face challenges including volatility in steel and other raw-material prices, energy costs, global economic uncertainty, geopolitical developments, supply-chain disruptions, increasing competitive intensity and the need for continuous technological investment. The availability, training and retention of skilled manpower also remain important considerations as manufacturing processes become increasingly automated and technology-intensive.

Overall, the Indian forging industry remained well positioned for long-term growth during FY 202526. Strong automotive demand, increasing defence and aerospace opportunities, infrastructure development, localisation, technological advancement and export opportunities are expected to support the continued development of the sector. Companies with strong manufacturing capabilities, technological expertise, quality systems, backward integration, skilled manpower and diversified customer portfolios are expected to be better positioned to capitalise on the emerging opportunities in the forging industry.

OPPORTUNITIES AND THREATS Opportunity

The forging industry offers significant growth opportunities due to its critical role in a wide range of sectors, including automotive, aerospace, defence, construction and mining equipment, agriculture, power, railways and general engineering. The increasing demand for high-strength, lightweight, precision-engineered and safety-critical components is expected to support the long-term growth of the industry.

The growing focus on localisation and supply-chain resilience presents a significant opportunity for domestic forging manufacturers. As customers increasingly seek reliable local suppliers and reduce their dependence on imports, Indian forging companies have the opportunity to expand their customer base, develop new products and participate more actively in domestic as well as global supply chains.

The aerospace and defence sectors offer attractive long-term growth opportunities, supported by increasing demand for high-quality and precision-engineered components. Growing emphasis on domestic manufacturing and indigenisation is expected to create opportunities for forging companies with strong technical capabilities, quality systems and the ability to meet stringent industry standards.

The industry also has considerable opportunities in railways, renewable energy, power, construction equipment, agriculture and general engineering. Expansion into these sectors can help forging companies diversify their customer base and reduce dependence on any single industry.

There is also growing scope for capacity expansion, backward integration and value-added manufacturing. Investment in modern machinery, advanced tooling, machining and heat- treatment facilities can enable companies to manufacture more complex and high-value components, improve cost competitiveness and strengthen control over the manufacturing process.

Investing in innovation, technology, capacity expansion, skilled manpower and product development, while maintaining a strong focus on quality and operational efficiency, will enable forging companies to capitalise on emerging opportunities. Companies that are able to adapt to changing market requirements, diversify their product portfolio and strengthen their manufacturing capabilities are expected to be well positioned for sustainable growth in the years ahead.

Threats, Risk and Concern

- Raw Material: Volatility in steel and other input prices may impact margins.

- Energy: Rising power and fuel costs may increase manufacturing costs.

- Market Demand: Fluctuations in automotive and industrial demand may affect volumes.

- Competition: Pricing pressure and increasing domestic and global competition may affect profitability.

- Geopolitical & Trade Risks: Tariffs, geopolitical tensions and supply-chain disruptions may impact exports and costs.

- Technology: Continuous investment in automation, modernisation and new product development is required.

- Quality & Compliance: Increasing customer, environmental and regulatory requirements may increase operating costs.

- Skilled Manpower: Availability of skilled technical manpower remains a key concern.

- Mitigation: The Company continues to focus on cost optimisation, product diversification, operational efficiency and prudent risk management.

FUTURE OUTLOOK

The forging industry is expected to maintain a positive long-term growth trajectory during FY 2026-27 and beyond, supported by increasing demand for high-strength, lightweight, precision-engineered components across the automotive, aerospace, defense, railway, energy, and industrial sectors. The industry is also expected to undergo significant transformation driven by technological advancement, automation, digitalisation, energy efficiency, and sustainability.

Aerospace and defense are expected to remain important growth areas, driven by increasing aircraft production, defence modernisation, indigenisation initiatives, and rising demand for critical high-performance components. Similarly, infrastructure development, renewable energy, railways, construction equipment, and other engineering industries are expected to provide additional avenues for growth.

Outlook for AMIC Forging

AMIC Forging aims to leverage its manufacturing capabilities, customer relationships, technical expertise, and market opportunities to achieve sustained and profitable growth. The Company intends to focus on expanding its presence in high-growth segments such as automotive, aerospace, defense, railways, and industrial engineering, while continuously improving product quality and customer service.

Continued investments in backward integration, manufacturing capacity, modern equipment, automation, and process optimisation are expected to enhance operational efficiency, improve cost competitiveness, and strengthen supply-chain resilience.

Sustainability is expected to become increasingly important across the forging value chain. AMIC Forging will continue to evaluate opportunities for improving energy efficiency, reducing material wastage, and lowering the environmental impact of its manufacturing operations. These initiatives are expected to support both regulatory compliance and the evolving sustainability requirements of global customers.

The availability and retention of skilled manpower will remain a key priority as the forging industry becomes increasingly technology-driven. The Company will continue to focus on employee training, technical skill development, safety, and capability building to create a workforce equipped to manage advanced manufacturing processes and evolving customer requirements.

The industry, however, may continue to face challenges arising from fluctuations in raw- material prices, energy costs, global economic conditions, geopolitical uncertainties, supply- chain disruptions, technological changes, and increasing competitive intensity. AMIC Forging will continue to adopt appropriate risk-management measures, strengthen operational resilience, diversify its customer and product portfolio, and maintain financial and cost discipline to address these challenges effectively.

Overall, the outlook for the forging industry remains encouraging over the medium to long term. With increasing demand for precision, lightweight, high-strength, and safety-critical components, coupled with technological advancement and opportunities arising from localisation and new industrial applications, the industry is well positioned for transformation and sustainable growth. AMIC Forging intends to strengthen its capabilities, expand capacity selectively, and pursue emerging market opportunities to create long-term value for its customers and stakeholders.

SEGMENT WISE PERFORMANCE

The Company (AMIC) does not have multiple segments. Hence, comments on segments wise performance are not required.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The details have been provided in Boards Report.

RATIO ANALYSIS

Following are ratios for the current financial year and their comparison with preceding financial year along with explanations:

Sl Ratio No	2026	2025	% Changes	Explanation if the change is more than 25%
1 Debtor Turnover	3.53	4.29	-17.74%	NA
2 Inventory Turnover	6.47	14.79	-56.27%	Due to Increase in average inventory holding during the year. due to a reduction in EBIT and/or an increase in finance costs
3 Interest Coverage Ratio	83.73	118.58	-29.39
4 Current Ratio	2.29	2.64	-13%	NA
5 Debt Equity Ratio	0.03	NA	0.03%	NA
6 Operating Profit Margin (%)	20.28	37.78	-46.32%	Due to decrease in EBIT
7 Net Profit Margin (%)	19.94	29.31	-31.97%	Due to decrease in profit after tax
8 Return on Net Worth (%)	16.79	35.48	-52.68%	Due to decrease of profit after tax

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company remains committed to maintain, high standards of internal control designed to provide adequate assurance on the efficiency of operations and security of its assets. The adequate and effectiveness of the internal control across various activities, as well as compliance with laid - down system and policies are comprehensively and frequently monitoring by your companies management at all levels of organization.

HUMAN RESOURCE

We firmly believe that our employees are pivotal to our success and growth. Our human resources strategy is designed to attract, retain, and nurture the best talent, ensuring that each individual contributes effectively to our business objectives. Our workforce includes Experienced Professionals, Skilled Workers, Semi-Skilled and Unskilled Workers.

CAUTIONARY STATEMENT

The statements in the report of the Board of Directors and the Managements Discussion and Analysis Report describing the Companys projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable Securities Laws and Regulations. Actual results could differ materially from those expressed or implied since the Companys operations are dependent on many external and internal factors beyond the control of the Company. The Company assumes no responsibility to publicly modify or revise any forward looking statements on the basis of any future events or new information. Actual results may differ from those mentioned in the report.

On behalf of the Board of Directors
For AMIC Forging Limited

	Girdhari Lal Chamaria	Anshul Chamaria
	Managing Director	Whole TimeDirector
	DIN:00513552	DIN:06586643
Date: 31st August, 2026
Place: Kolkata