ASK Automotive Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENT

Global Economy Overview

In CY 2024, the global economy exhibited resilience in the face of several macroeconomic challenges. Growth held steady at 3.3%, despite the geopolitical tensions in Europe and the Middle East, supply chain disruptions, rising trade tensions and heightened policy uncertainty in major global economies such as China and the US.1 The Euro area presented a subdued growth of 0.9% as it grappled with stagnation and low consumption. Conversely, the US economy demonstrated steady growth of 2.8% with strong consumption and sustained employment.

Inflationary pressures eased considerably during the year, with global headline inflation easing from 6.6% in CY2023 to 5.7% in CY 2024.2 As inflation eased, major central banks began to adopt a more accommodative stance - reducing interest rates for loans and adopting other measures to boost liquidity and spur private investment.

Despite persistent macro uncertainties, the outlook remains cautiously positive. The global economy is projected to post a growth rate of 2.8% for CY 2025 and 3.0% for CY 2026. Global inflation is expected to decrease further to 4.3% in CY 2025. This will create space for more accommodative monetary policies across several economies.

Trade tensions are expected to play a crucial role in the evolving economic landscape. Evolving trade policies may trigger retaliatory tariff and trade disputes, causing inflation to persist. Recent tariff implementation by the US may create significant challenges for businesses dependent on international supply chains. It may potentially disrupt the movement of goods, increase costs and increase tensions between major trading partners. Businesses will need to prioritise adaptability by strengthening regional trade partnerships. Building resilient supply chains will be crucial to mitigate risks. Emerging markets are expected to remain key contributors to global expansion, supported by favourable demographics, rising domestic demand and manufacturing capabilities. The Global trade reset may present opportunities to economies that show agility and flexibility through trade agreements. These economies may gain advantage from trade diversion.

India sustained its growth momentum and retained its position among the fastest growing economies. The estimated GDP growth is 6.5% in FY 2025.4 This growth was driven by supportive policies of the Government of India, stable domestic demand, continued infrastructure investments and an uptick in both urban and rural consumption. Stable macroeconomic policies, good monsoon and robust credit demand contributed to the broad-based growth across sectors. Despite supply-side pressures and global commodity volatility, Inflation remained broadly within the Reserve Bank of Indias (RBI) target range. This was supported by proactive monetary policies. The RBI maintained a calibrated policy stance, managing inflation and supporting economic growth. Headline inflation eased to 3.3%, primarily due to a moderation in food inflation.5 Industrial activity regained momentum towards the end of FY 2025 after a sluggish first half.

The outlook for Indias economy remains cautious yet optimistic. The country is expected to maintain its growth. India currently ranks among the worlds top five economies and is on track to become the third-largest economy by FY 2028 with a projected GDP of $5 trillion.6 With sound macroeconomic fundamentals and a reform-oriented policy framework, India is well-positioned to navigate global challenges and continue its upward growth trajectory. Rapid industrialisation, driven by initiatives such as ‘Atmanirbhar Bharat and ‘Make in India and incentives through the Production Linked Scheme (PLI) has contributed to increased Foreign Direct Investment in India. In addition, schemes such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) are expected to support the Automotive industry. Enhanced industrial activity and resilient domestic demand are expected to be drivers of the growth. The RBI has under taken this substantiel rat cut which would boost theover all economy and coansumption benifiting the automobile sector.7 The tax-relief measures implemented in the Union Budget 2025-26 are expected to further strengthen consumption and investment. However, the recent reciprocal tariffs by the US government on Indian imports can dent the growth trajectory of India by impacting the export volume of the country. India is closely monitoring the global tariff landscape and is formulating a calibrated response. The regional instabilities also pose the risk of reduced economic activity. The uncertain economic landscape can slow down the pace of investments in short term, while maintaining the long term attractiveness. With the persistent uncertainties, Indias strategic collaboration with the economies will provide a robust foundation for sustained economic growth. Geopolitical events in the developed and developing economies can impact the stability and growth.

Despite persistent global uncertainties, Indias strategic collaboration with the economies to improve bilateral trade will provide a robust foundation for sustained economic growth.

The global automotive industry is undergoing a shift. This shift can be attributed to the change in consumer preference, advancements in technology and stringent environmental regulations. In addition, evolving consumer-expectations are further magnifying the shift. Emerging players with strong value propositions are posing threats to the dominance of the established players. Despite the short-term moderation in growth, the importance and necessity of transitioning to zero emission remains evident. Software integration presents a whole new niche for growth, pushing manufacturers to reimagine how vehicles are designed, built and driven. This is directing manufacturers to innovate and premiumise products to offer a valuable experience to the customers.

Manufacturers and suppliers continue to face operational challenges in their strive to reduce manufacturing costs and complexity. Recognising these challenges, companies are increasingly moving towards a new era of ‘co-opetition. This shift is aimed at optimising limited resources and sharing risks as maintaining competitive momentum alone proves difficult. Moreover, global factors like trade tensions, tariffs, evolving regulations and labour disputes are prompting manufacturers to reassess their global supply chain strategies8. Despite these hurdles, global car sales witnessed a 2.5% rise in CY 2024 and reached 74.6 million units*. This indicates a gradual easing of supply chain constraints, though market performance differed across regions.

The global two-wheeler market is witnessing a heightened demand and is valued at USD 706 billion in CY 2025. This demand is primarily fuelled by rising need of mobility and increasing traffic congestion. The market is projected to grow to $777.2 billion by CY 2029, at a CAGR of 2.43% during the forecast period of 2025-2029. Despite challenges like supply chain disruptions, the market is envisioned to exhibit rapid recovery. This can be attributed to the increasing penetration of electric scooters and motorcycles and the growing inclination of consumers towards two wheelers for daily commutes and short distance travel.

The demand of two-wheelers differs across regions around the globe. The Asia-Pacific region drives the 2-wheeler market. For this region, two wheelers present a cost-effective option amid the mounting traffic jams of rapidly expanding cities. In Europe, demand for electric vehicles is on rise owing to their convenience. In the North-American market, motorcycles and scooters remain popular choices for recreational riding and touring purposes. Government regulations will play a crucial role in expediting the adoption of two-wheeler vehicles in Latin America. The rise of e-commerce, courier services and last-mile delivery businesses has elevated the demand of two-wheelers as an efficient mode of transportation in the Middle East and Africa.13

The Indian Automotive industry is one of the largest in the world. The industry significantly contributes to the nations economy. It accounts for approximately 7% of Indias GDP and provides direct and indirect employment to millions. Sustaining its growth momentum, the industry exhibited a substantial 7.3% growth in domestic sales. Exports also saw an increase of 19.2%14. Indias automotive industry is the second largest manufacturer of two-wheelers, the largest manufacturer of three-wheelers and third largest manufacturer of passenger cars in the world.15

Despite a turbulent geo-political landscape and supply chain disruptions, the number of automobiles produced by the industry has experienced steady growth. Though the pre-pandemic numbers are yet to be achieved.

The Two Wheeler Market in India has been expanding significantly due to a combination of socio-economic factors. With the increasing urbanization and population density, the demand for affordable and personal transportation has grown. Furthermore, this is further fuelled by the growing disposable income of the middle-class population. The Indian Two Wheeler Market is estimated at $315.9 billion in 2025 and is expected to reach $347.4 billion by 2029, growing at a CAGR of 2.40%.17 The total sales of two-wheelers in FY 2025 was 19.6 million units, showing 9.1% growth from previous year.18 Growth is led by scooter segment due to improved rural and semi-urban connectivity and availability of newer models with enhanced features.

Indias electric vehicle market maintained strong growth momentum in FY 2025, with total EV registrations reaching 1.97 million units, reflecting a 16.9% increase from 1.68 million units in FY 2024. Registrations of electric passenger vehicles crossed the 1 lakh mark by registering a growth of 18.2% over the previous fiscal. The electric two-wheeler segment witnessed robust demand with registrations rising by 21.2% to 11.5 lakh units. Electric three-wheelers also saw steady growth with registrations increasing by 10.5% to nearly 7 lakh units during the year. This continued uptrend highlights the growing adoption of EVs supported by favourable policies, increasing consumer awareness and improved charging infrastructure.19

The Indian Government has launched several schemes to encourage the growth of electric vehicles. In order to establish a charging infrastructure and develop an EV manufacturing ecosystem in India, the Government has launched the ‘PM E-DRIVE scheme with a budget of $1.30 billion (Rs.10,900 crore), effective from October 1, 2024, to March 31, 2026.20 The Electric Mobility Promotion Scheme 2024 aims to support 3,72,215 EVs including e-2W (3,33,387) and e-3W (38,828 including 13,590 rickshaws and e-carts and 25,238 e-3W).21

This scheme was introduced to accelerate the adoption of electric two-wheeler (e-2W) and electric three-wheeler (e-3W - including registered e-rickshaws and e-carts). The scheme further aims to provide momentum to green mobility and the development of Electric Vehicle (EV) manufacturing ecosystem in the country.

Aluminium has emerged as a critical material in the automotive sector. This emergence was driven by the industrys inclination towards weight reduction, fuel efficiency and lower emissions. With increasing EV adoption, aluminium consumption in the automotive segment is set to rise sharply.

The intrinsic properties of Aluminium make it a preferred choice for the automotive industry. Its low density helps in reducing weight and enhances fuel efficiency. Moreover, it enhances the performance, provides flexibility in design and contributes towards the safety enhancements in the vehicles. Aluminium is a cost-effective choice as it requires less maintenance. Further, the metal is highly durable which increases the life-span of the products. Aluminium as a resource is highly recyclable with low carbon footprint. This provides manufacturers with massive energy savings.

The Companys strong presence in the Aluminium Lightweighting and Precision Solutions (ALPS) segment makes it a suitable candidate for capitalising on the megatrend. Apart from the ICE 2-wheeler market, the Company is strategically positioning itself by manufacturing EV components. Going forward, the Company aims to enhance its growth in the field through consistent investment and upgradation in technology.

Further strengthening its position in the EV sector.

Leveraging export opportunities to the European Union (EU) and North America (NA).

Offering diversified products in both Passenger and Commercial vehicle segments.

Expanding the independent Aftermarket Channel network.

Developing innovative systems and solutions with a strong pipeline of products.

Highly competitive sector, potentially leading to margin pressures.

Economic uncertainty due to ongoing geopolitical conflicts.

ASK Automotive stands as Indias leading manufacturer of two-wheeler Advanced Braking Systems. The Company has showcased engineering excellence for over three decades. The Company commands approximately 50% of the Indian two-wheeler Advanced Braking Systems market, including brake shoes, disc brake pads and brake panel assemblies.

The Company holds a prominent position as a manufacturer of Aluminium Lightweighting Precision Solutions for automotive and non-automotive industries. It has the integrated capabilities of die-casting, critical machining, paint finishing and critical assembly. These enable the Company to supply powertrain-agnostic products to automobile Original Equipment Manufacturers (OEMs). Further, the Company is increasing its focus on the electric vehicle sector.

In the Safety Control Cable segment, by adopting best-in-class technologies and constant upgrades, the Company has been able to establish a network of 400+ dealers in India. The Company has achieved a growth rate of over 14% in the OEM and aftermarket. The Company offers a range of control cables, such as front and rear brake cables, throttle cables and speedometer cables. In addition, it offers seat lock, fuel lid, temperature controller and choke cables through its joint venture company. These products cater to the 2Ws OEMs.

The Company has 18 strategically located state-of-the-art manufacturing facilities in close proximity to the OEMs. This helps in ensuring timely delivery, offering better economies of scale to customers and gaining logistical advantage. The Company ensures that the manufacturing facilities are accredited on quality and safety with world-class certifications like IATF 16949:2016, ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and OHSAS 18001:2007.

The Companys joint venture with AISIN Japan has provided it with an opportunity to tap the growing aftermarket of Passenger Car segment. The Company can leverage the AISINs expertise in the design, development and manufacturing of a comprehensive range of high-quality automotive components and systems.

The Company has over 480 engineers. The R&D and Designing team with 70 dedicated engineers form the backbone of its product development. The Company is backed by advanced capabilities and a 7900+ strong team of dynamic individuals who are committed to present the best-in-class solutions to customers.

The Company is well-positioned to grow in the EV, Commercial Vehicle and Passenger Vehicle sectors both domestically and internationally. This strategic positioning can be attributed to its established market leadership in 2W braking systems, proactive EV component development and strategic global partnerships. Currently, the Company is exporting to 12 countries under ASK and to 42 countries through its joint venture company ASK Fras-Le Friction Private Limited. The Company is focused on enhancing its geographical presence through exports.

The Company is actively working towards the expansion of its production facilities. The Company recently started commercial production at the 18th manufacturing facility of the group at Karnataka.

The Companys philosophy to engage in new collaborations and partnerships has enabled it to build strong relationships with OEM customers. Some of these collaborations span over three decades. The Company has five world-class technical collaborations and two joint ventures with leading global players in the passenger vehicle and commercial vehicle segment respectively. The recent technical collaboration comes with Kyushu Yanagawa Seiki, Co., Ltd., Japan, a leading motorcycle wheel supplier and expert in aluminium die casted technology. This collaboration will help the Company to capitalise on the demand of aluminium lightweighting precising solutions in two-wheeler segment.A strategic partnership with Taiwans LIOHO Machine Works Ltd will help the Company to expand its product lines into new markets such as the High-Pressure Die-Casted Two-Wheeler Alloy Wheels sector.

Despite some short-term challenges the automotive industry is expected to witness strong long-term growth driven by technological advancements, demographic shifts and increasing vehicle accessibility. With expanding product segments, higher manufacturing capacities, growing scale of operations, improved cost efficiencies and continuous innovation, ASK Automotive sees multiple growth opportunities both in domestic and international markets including deeper penetration into the independent aftermarket.

As India advances on its path toward becoming a developed economy the Company is well positioned to leverage national initiatives such as ‘Make in India, ‘Atmanirbhar Bharat and ‘Make for the World. The automobile sector is expected to play a key role in Indias economic and industrial growth and the Company aspires to be at the forefront of this transformation.

ASK Automotive remains committed to its growth roadmap with focus on sustaining revenue and profitability growth momentum, improving operating margins, enhancing return ratios and progressively reducing leverage through disciplined financial management.

The Company places significant emphasis on its ESG efforts with the CARE Framework. It has achieved considerable progress in setting up solar plant facilities to increase efficiency and reduce energy costs. A solar power plant of 9.9MWp, with an investment of Rs.48 Crore in Sirsa, Haryana dedicated for captive consumption began its trial production in January 2025. A Zero landfill status for hazardous waste and reuse of 56% of treated water highlights the Companys continuous strive towards responsible resource management. The mega manufacturing facility at Karoli is gaining traction. This will help the Company achieve improved economies of scale, operational efficiency and growth.

The Companys philanthropic arm the AHSAAS Trust, established by Mr. Kuldip Singh Rathee and his wife and Director Mrs. Vijay Rathee, remains committed to its social responsibility. It reflects its dedication to encourage socio-economic growth by directing resources towards meaningful social change. In FY 2025 the Company has spent Rs.4.13 Crore in CSR activities focusing on Green Initiatives, Education, Skill Development and Awareness, Rural Development and Welfare, Nurturing Sports Talent, Womens Safety and Health Initiatives.

For more details, refer to the page number 24-31

Key highlights of the Companys performance on a consolidated basis are provided below-

(Rs. in Crore)

During FY 2025, the Company witnessed steady revenue growth across its three segments. The Company has retained its market leadership in the Advanced Braking System business with 16% growth in the fiscal year. The revenue of the Aluminium Light Weighting Precision Solutions segment grew by 28%, while the Safety Control Cable segment achieved a growth of 14% in FY 2025.

The Company maintains a strong risk management framework, including assessment, mitigation, monitoring and reporting, tailored to its size and operational complexity.

To ensure financial discipline and foster accountability, the Company employs an established SAP HANA system. The system ensures internal controls through access controls, approval matrix and audit trail of all transactions.

For Internal Finance Control, the Company undergoes numerous internal audits and control systems to ensure that all transactions are authorized, recorded and reported according to policies, procedures, accounting standards and defined workflows. An independent internal audit function, enhanced by a comprehensive audit program and periodic reviews by the management and the Audit Committee, is a key component of this framework.

The design, implementation and operational effectiveness of these internal control systems are regularly tested. This ensures that the Company has a strong risk management framework that supports effective risk management and reporting.

To identify the risks associated with its business, the Company has established a dedicated Risk Management Committee to oversee the implementation and effectiveness of its risk mitigation strategies and plans.

Human resource developments remain a key area of focus for the Company. The Company ensures that consistent training opportunities are provided to its workforce to maintain its alignment with the latest technological advancements and global standards. By the virtue of employee engagement activities, the Company also maintains sincere relations with its talent pool. At present, the Company has a workforce of over 7900 as on March 31, 2025.

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. By nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. Important factors that could make a difference to the Companys operations include economic conditions affecting demand, supply and price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations, tax laws and other statutes and other incidental factors. Readers are cautioned not to place undue reliance on forward-looking statements as several factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements.