Artemis Electricals & Projects Ltd Management Discussions

<dhheadMANAGEMENT DISCUSSION & ANALYSIS Global Economic Overview</dhhead

The global economy navigated a challenging yet resilient landscape during FY 2024-25. Several macroeconomic headwinds persisted, including geopolitical tensions, elevated interest rates in advanced economies, and ongoing supply chain realignments. Nevertheless, global growth held steady, supported by strong labour markets, easing inflation, and robust investment activity in both public infrastructure and private sectors.

According to the International Monetary Fund (IMF), global GDP growth was estimated at 3.2% in FY 2024, unchanged from the previous year.

Labor market conditions remained tight in advanced economies, contributing to sustained household spending and supporting service sector expansion. Meanwhile, the realignment of global supply chains, driven by geopolitical fragmentation and strategic diversification, created new opportunities for emerging markets to integrate into global manufacturing and export networks.

Looking forward, global growth is expected to remain moderate but stable, with structural reforms, technological innovation, and green investments playing a central role in shaping the post-pandemic recovery and long-term sustainability.

Outlook

The global economic outlook remains cautiously positive. Growth is likely to be driven by strong labor markets, increasing household incomes, a rebound in manufacturing, and continued fiscal support. Emerging Markets and Developing Economies (EMDEs) are projected to grow at 4.2% in FY 2024. Global headline inflation is expected to decline from 6.8% in 2023 to 5.9% in 2024, and further to 4.5% by 2025.

Indian Economy

India continued to demonstrate strong economic resilience in FY 2024-25, maintaining its position as one of the worlds fastest-growing major economies. According to the National Statistical Office (NSO), GDP growth stood at 8.2%, driven by robust domestic demand, infrastructure-led capital expenditure, and improved supply-side conditions.

Supportive government policies, a sound financial system, and rising private investment contributed to sustained economic momentum. Despite global headwinds, Indias growth was underpinned by strong macroeconomic fundamentals and continued structural reforms.

Outlook

India is on track to become the third-largest economy in the world in the near future. This growth will be driven by higher capital investments, ongoing infrastructure development, advancements in green and sustainable energy, and innovation in financial inclusion. The Reserve Bank of India (RBI) is expected to maintain its focus on price stability and medium-term debt sustainability, thereby supporting a robust credit environment and enhancing the long-term resilience of the financial sector.

Overview of Electrical Project and Lighting Industry

India, despite being the second-most populous country, ranks only fifth in global electricity consumption, indicating significant untapped demand. With growing electrification, urbanization, and infrastructure development, the consumer lighting industry in India has witnessed rapid growth.

The lighting sector is seeing a shift towards smart and sustainable solutions. By 2025, the outdoor LED lighting market alone is expected to reach $39 billion, propelled by smart city initiatives and regulatory pushes for energy efficiency. Key trends include:

IoT-enabled smart lighting

Modular LED designs

UV disinfection, therapeutic lighting, and quantum dot tech

Personalized, eco-friendly, and biophilic design approache

However, the sector remains dynamic and highly competitive. Intense pricing pressures, rapid technological advancements, and the need for constant innovation pose ongoing challenges. Companies will need to focus on quality, energy efficiency, and cost competitiveness to sustain growth and market share.

Company Overview

Artemis Electricals and Projects Limited, originally incorporated as Artemis Electricals Private Limited on October 26, 2009, under the Companies Act, 1956, has evolved into a significant player in the electrical and projects domain. The companys name was first changed to Artemis Electricals Limited in July 2015, and further rebranded as Artemis Electricals and Projects Limited in June 2022, to better reflect its expanded business focus.

The company is promoted by Mr. Pravin Kumar Agarwal and Yashvikram Infrastructure Private Limited. Mr. Agarwal brings over a decade of operational experience and strategic leadership within the company. His earlier business engagements in engineering and allied industries have laid a strong foundation for the companys growth in the electrical and project sectors.

Business Performance and Strategy

During FY 2024-25, the company continued to focus on enhancing its capabilities in the electrical contracting and project execution domains. Emphasis was placed on strengthening vendor relationships, optimizing project management, and expanding our presence in high-potential markets.

We maintained a customer-centric approach, focusing on timely delivery, quality assurance, and customized solutions. Our project portfolio reflects a healthy mix of government, infrastructure, and private sector engagements.

Opportunities and Risk along with its Mitigation

Competition Risk:

The lighting and electrical industry is witnessing rapid growth, supported by favorable government policies and rising demand. However, the sectors low entry barriers have led to increased competition, with numerous new players entering the market, intensifying pricing and market share pressures.

Mitigation Strategy

To address this risk, the Company will maintain a strong focus on innovation and technological advancement, continuously developing products with cutting-edge features. Leveraging its state-of-the-art, automated manufacturing facility, the Company aims to ensure consistent quality, enhance operational efficiency, and manage production costs effectively. This strategic approach will enable competitive pricing, strengthen market positioning, and potentially offer a first-mover advantage in introducing advanced solutions.

Product Risk:

The lighting industry is highly dynamic and technology-driven, with rapid changes in consumer preferences, design trends, and regulatory standards (especially related to energy efficiency and safety). There is a risk that products may become technologically obsolete or fail to meet evolving customer expectations and compliance requirements. Additionally, any lapse in quality or performance may adversely affect brand reputation and customer trust. Mitigation Strategy

To mitigate this risk, the Company emphasizes continuous product innovation, market research, and adherence to evolving quality and safety standards. Regular upgrades to product design and functionality, ensure that offerings remain competitive and compliant. Furthermore, proactive customer feedback mechanisms help the Company respond quickly to market shifts and enhance product relevance and reliability.

Operational Risk:

The Company operates in a cost-sensitive industry where maintaining high operational efficiency is crucial. A sudden spike in raw material costs can significantly impact profit margins. Additionally, there is an inherent risk that efforts to control costs could lead to compromises in product quality, which may adversely affect customer satisfaction and brand reputation.

Mitigation Strategy

The Company is equipped with a highly efficient manufacturing infrastructure that enables it to maintain some of the most optimized production costs in the industry. A dedicated internal team closely monitors raw material price trends and implements proactive measures such as optimal inventory management, quarterly pricing reviews, and long-term vendor partnerships. These strategies help cushion the impact of price fluctuations in the short and medium term. The Company remains firmly committed to its zero-compromise policy on quality, ensuring that operational cost control never comes at the expense of product excellence.

Regulatory Risk

Changes in government policies, regulations, or their interpretation and enforcement could potentially disrupt the Companys operations and adversely impact its business performance. Non-compliance with applicable laws may result in increased costs, operational delays, or penalties.

Mitigation Strategy

The Company proactively monitors developments in economic and industry-specific regulations to stay ahead of potential changes. Given the governments continued support for green energy initiatives, the Company does not anticipate major regulatory barriers and related sustainable solutions. Nevertheless, it remains committed to robust and timely regulatory compliance, ensuring smooth and uninterrupted operations while aligning with all applicable legal frameworks.

Geographical Risk

Unfavourable region-specific or country-specific events—such as political instability, natural disasters, or economic downturns—may disrupt the Companys ability to operate in affected areas for extended periods.

Mitigation Strategy

The Company maintains a well-diversified revenue base across multiple regions in India, reducing over-dependence on any single geography. A significant portion of the Companys business is derived from project-based work, which further spreads operational exposure. Additionally, the Company is actively building its own brand presence through a growing network of stockists, distributors, and retailers. To further mitigate geographic concentration risk, the Company is also exploring export opportunities, which will help reduce reliance on the domestic market alone and enhance business stability.

Financial and Operational Performance on Consolidated Basis

Sr. No.	Ratio	As at 31-Mar- 2025	As at 31-Mar- 2024	% Change	Reason for Change
(i)	Current Ratio	1.49	1.95	-23.44%	Due to decrease in current assets
(ii)	Debt-Equity Ratio	0.03	0.16	-81.55%	Due to decrease in Debt
(iii)	Debt Service Coverage Ratio	9.97	3.53	182.12%	Due to increase in profits
(iv)	Inventory Turnover Ratio	0.00	0.00	0.00%
(v)	Trade Receivables Turnover Ratio	1.94	1.00	92.87%	Due to increase in turnover
(vi)	Trade Payables Turnover Ratio	2.17	1.73	25.76%	Due to increase in turnover
(vii)	Net Capital Turnover Ratio	4.36	1.50	190.07%	Due to decrease in current assets
(viii)	Return on Equity	0.09	0.05	77.04%	Due to increase in profits
(ix)	Net Profit Ratio	0.10	0.09	10.83%	Due to increase in profits
(x)	Return on Capital Employed	0.12	0.08	52.97%	Due to increase in profits
(xi)	Return on Investment (ROI)	N/A	N/A	N/A	The Company does not have any significant financial investments during the reporting periods.

Cash Flow Statement:

Particulars	2024-25 (In Lakhs)	2023-24 (In Lakhs)
Net Cash Used in Operating Activities (A)	4,119.24	2,123.78
Net Cash Used in Investing Activities (B)	(2,973.41)	(454.78)
Net Cash Generated from Financing Activities (C)	(1,016.84)	(1,666.22)
Cash & Cash Equivalents (D=A+B+C)	128.99	2.78
Cash and Cash Equivalents at the beginning (E)	5.93	3.16
Cash and Cash Equivalents at the end (F=D+E)	134.92	5.93

Future Outlook

We remain confident that our commitment to high-quality products and consistent quality assurance continues to earn us the trust and appreciation of our clients. This strong customer confidence has been a key driver of the sustained growth in demand for our offerings.

Export Business Expansion

The Company plans to broaden its product portfolio and invest in extensive research and development in the Lithium-Ion battery segment to tap into growing global demand and strengthen its presence in international markets.

Capital Expenditure Plans

As part of Phase I, the Company has initiated plans to set up a state-of-the-art manufacturing facility dedicated to the production of Lithium-Ion batteries and related products, laying the foundation for future growth and innovation.

Disclosure of Accounting Treatment:

Where in the preparation of financial statements, a treatment different from that prescribed in an Accounting Standard has been followed, the fact shall be disclosed in the financial statements, together with the managements explanation as to why it believes such alternative treatment is more representative of the true and fair view of the underlying business transaction- Not Applicable

Material development in human resources /industrial relations front including number of people employed

Y our Company endeavours to create a work environment which is collaborative and learning and growth oriented to enable employees to perform at their full potential. Your Company believes that a motivated and empowered employee base is the key to our operations and business strategy, and has developed a large pool of skilled and experienced personnel. Your Company maintain a collaborative, inclusive, non-discriminative and safe work culture, and provide equal opportunities to all employees. It believes that such an enabling environment is essential for us to deliver value for our customers, shareholders and communities. The Company also takes various measures to keep its employees motivated and committed to their work by providing them a healthy work environment.

The Industrial Relations at the Factory have remained cordial.

As on March 31, 2025, the Company had 23 employees. It includes Whole-Time Directors.

Discussion on financial performance with respect to operational performance

This has been explained in the Boards Report

Internal Control Systems and their adequacy

The Companys internal controls are commensurate with the nature of its business, the size and complexity of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or disposition, executing transactions with proper authorization and ensuring compliance with corporate policies. The system ensures appropriate information flow to facilitate effective monitoring. The internal audit system also ensures formation and implementation of corporate policies for financial, reporting, accounting and information security.

The Internal Financial Control of the company is analyzed and audited for the compliances and accordingly the report under Section 143 of the Companies Act, 2013 is prepared and the report on internal control over financial reporting as issued by the statutory auditors of the Company for the year ended March 31, 2025.

The Companys internal auditors review business processes and controls. The audit committee reviews reports presented by the internal auditors on a periodic basis. The committee makes note of the audit observations and takes corrective actions, if necessary. It maintains a constant dialogue with the statutory and internal auditors to ensure effective operations of the internal control systems. The Audit Committee of the Board then discusses significant findings and corrective measures initiated. The Audit Committee of the Board of Directors periodically reviews the adequacy and effectiveness of internal control systems and suggests improvement for strengthening these systems.

Details of any change in return on net worth as compared to the immediately previous financial year along with a detailed explanation thereof

The return on net worth of your Company for the FY 2024-25 is 8.85% as against 5.17% in the previous financial year, the said increase is due to increase in Profit.

Segment-wise or Product-wise Performance

The Company conducts its business in only one Geographical Segment, viz., India.

Cautionary Statement

Statements in this report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement because of many factors like economic condition, availability of labor, price conditions, domestic and international market, changes in Government policies, tax regime, etc. The Company assumes no responsibility to publicly amend, modify or revise any statement on basis of any development, information and event.