ASM Technologies Ltd Management Discussions

Overview

ASM Technologies Limited, together with its subsidiaries, leverages over three decades of engineering expertise in delivering Engineering Design-led Manufacturing (DLM). Over the years, the Company has strategically evolved from an engineering-led services organisation into an AI-powered Design-Led Manufacturing enterprise, integrating engineering expertise, manufacturing capabilities and advanced technologies to provide end-to-end solutions across the product lifecycle, from concept design to manufacturing and lifecycle support.

The Companys Design-Led Manufacturing model integrates product engineering, electronics, embedded systems, software and manufacturing capabilities, enabling customers to transition efficiently from design and development to scalable manufacturing. This integrated approach enhances customer value creation, improves operational efficiencies and supports long-term business sustainability.

ASM specialises in the design, engineering and manufacture of custom capital equipment and technology solutions serving high-growth and advanced industries including Semiconductor, Electronics, Solar, Engineering, Aerospace, Medical and other industrial sectors. The Company supports customers through comprehensive offerings spanning concept design, product engineering, system integration, prototyping, validation and manufacturing. These capabilities enable customers to reduce time-to-market, improve productivity and accelerate innovation.

During FY26, the Company continued to strengthen its Design-Led Manufacturing platform through investments in manufacturing capabilities, technology infrastructure and strategic initiatives. The Company expanded its manufacturing footprint by commissioning three new facilities, including two facilities in Bengaluru and one facility in Vietnam. These additions enhanced manufacturing capacity, operational flexibility and responsiveness to customer requirements across global markets. With seven manufacturing facilities currently in operation, ASM has strengthened its ability to support customers through an integrated global manufacturing network.

The Company also continued to progress its long-term infrastructure expansion plans through the proposed development of a new integrated manufacturing facility in Karnataka supported through land allotted by KIADB. In addition, approval received under the Electronics Component Manufacturing Scheme (ECMS) for the manufacture of high-precision capital equipment involving a proposed investment of I565 crore represents a significant milestone in strengthening the Companys participation in Indias electronics and semiconductor manufacturing ecosystem and supporting long-term manufacturing growth.

Artificial Intelligence( AI) continues to remain a strategic pillar of ASMs transformation journey. The Companys strategy is focused on two complementary areas: enabling Industrial AI transformation for customers and embedding AI-driven capabilities across ASMs Design-Led Manufacturing value chain and internal operations to evolve into an AI-native organisation.

At the core of this strategy is AI Assist, ASMs foundational intelligence layer, designed to enable engineers, operators and service teams to efficiently access and leverage enterprise knowledge through natural language interactions. Building on this foundation, the Company is developing Industrial AI capabilities including Vision AI, Predictive AI, Engineering AI and Conversational AI aimed at improving engineering productivity, product quality, operational efficiency, asset reliability and decision-making across manufacturing and engineering environments.

Further strengthening these capabilities, the Companys strategic investment in Myelin Foundry supports the development of scalable Industrial AI solutions by combining deep engineering expertise with advanced machine intelligence capabilities to address practical challenges across engineering, manufacturing and enterprise operations.

ASM Technologies Limited remains focused on strengthening its position as a differentiated AI-powered Design-Led Manufacturing partner and creating sustainable long-term value through investments in technology, infrastructure, manufacturing capabilities and innovation.

1. Industry Structure and Development

The global industrial landscape continues to evolve rapidly, driven by increasing adoption of digitalisation, automation, Artificial Intelligence and intelligent manufacturing practices. Industries are increasingly moving towards integrated ecosystems where engineering capabilities, advanced technologies and manufacturing expertise work together to improve efficiency, accelerate innovation and reduce time-to-market. Design-Led Manufacturing (DLM) is emerging as a key business model, enabling organisations to enhance product development and operational performance.

The Semiconductor, Electronics, Solar, Engineering, Aerospace and Medical industries continue to witness significant growth supported by technological advancements and increasing investments. The global semiconductor industry recorded annual sales of approximately USD 792 billion in 2025 and is expected to continue its growth trajectory driven by AI, high-performance computing and connected technologies. Increasing investments in renewable energy, advanced medical technologies, precision engineering and intelligent systems are creating opportunities for custom capital equipment and technology solutions. The growing adoption of Industrial AI, embedded technologies and automation across these sectors is expected to further drive demand for integrated engineering and manufacturing capabilities.

2. Opportunities and Threats

The adoption of Artificial Intelligence, Industrial Automation, intelligent manufacturing and digital transformation initiatives across industries presents significant growth opportunities for ASM Technologies. Growing investments in Semiconductor, Electronics, Solar, Aerospace, Medical and Engineering sectors, along with increasing demand for custom capital equipment and integrated Design-Led Manufacturing solutions, are expected to create new avenues for business growth. Government initiatives promoting electronics and semiconductor manufacturing, coupled with rising focus on localised manufacturing and supply chain diversification, further strengthen the opportunity landscape for the Company. ASMs integrated capabilities across engineering, manufacturing and Industrial AI position the Company to leverage these evolving market opportunities and strengthen its role as a strategic technology partner.

At the same time, the Company operates in a dynamic business environment that is exposed to various risks and challenges including rapid technological changes, talent availability, cybersecurity risks, supply chain disruptions, foreign exchange fluctuations and increasing competitive intensity. Further, geopolitical uncertainties and evolving regulatory requirements may impact market conditions and business operations. The Company continues to mitigate these risks through capability enhancement, technology investments, operational efficiencies, diversified customer and geographic presence, strong risk management practices and continuous focus on innovation.

3. Segment-wise or Product-wise Performance

The Companys performance continues to be driven by its focus on custom capital equipment and Design-Led Manufacturing solutions across Semiconductor, Electronics, Solar, Engineering, Aerospace, Medical and other advanced industries. The semiconductor and high-tech equipment segments continue to witness strong momentum supported by increasing investments in electronics manufacturing, embedded systems, automation and intelligent technologies, creating opportunities for integrated engineering and manufacturing solutions.

The Company also continues to strengthen its capabilities across advanced engineering and manufacturing segments through the integration of Industrial AI, embedded technologies and intelligent systems. Leveraging its expertise across engineering design, manufacturing and digital technologies, ASM Technologies remains well positioned to support customers with end-to-end solutions spanning concept development, product engineering, system integration and scalable manufacturing, thereby driving innovation, productivity and operational efficiency.

4. Outlook

India continues to strengthen its position as a preferred global destination for engineering, manufacturing and technology-led solutions, supported by a highly skilled talent pool, supportive government initiatives and increasing investments across strategic sectors. Growing focus on semiconductor development, electronics manufacturing, renewable energy, industrial automation and intelligent manufacturing is expected to create significant opportunities across the value chain. Increasing adoption of Artificial Intelligence, Industrial AI and connected technologies is further expected to accelerate demand for advanced engineering and manufacturing solutions.

ASM Technologies remains well positioned to capitalise on these emerging opportunities through its Design-Led Manufacturing capabilities, expertise in custom capital equipment and growing Industrial AI capabilities. The Company will continue to strengthen investments in technology, manufacturing infrastructure, strategic partnerships and innovation-led solutions while focusing on enhancing operational efficiencies and delivering sustainable long-term value for all stakeholders.

5. Risks and Concerns

The Company operates in a dynamic business environment and is exposed to various risks that may impact business performance and growth. Rapid technological advancements across Semiconductor, Electronics, Artificial Intelligence, automation and intelligent manufacturing require continuous investments in technology capabilities, innovation and talent development. Talent availability and retention of skilled professionals continue to remain important factors considering the evolving technology landscape and increasing demand for specialised skills.

Further, the Company is exposed to risks relating to cybersecurity, data privacy, supply chain disruptions, foreign exchange fluctuations, regulatory changes and geopolitical uncertainties. Increasing adoption of digital technologies and AI-driven solutions also requires strong governance frameworks to address concerns relating to data security, system reliability and ethical use of technology. The Company continues to focus on strengthening its risk management practices, enhancing operational resilience, investing in technology and maintaining robust internal controls to effectively mitigate potential risks and support sustainable business growth. a) Competition Risk

The industries in which the Company operates are highly competitive and characterised by rapid technological advancements and evolving customer requirements. The shift from traditional engineering models towards Artificial Intelligence, Industrial AI, automation, embedded technologies and intelligent manufacturing solutions requires continuous enhancement of capabilities and offerings. Sustaining competitiveness requires ongoing investments in technology, innovation and domain expertise.

The Company mitigates this risk by strengthening its Design-Led Manufacturing capabilities, investing in advanced technologies and enhancing customer engagement. Further, strategic partnerships, capability expansion initiatives and integrated engineering-to-manufacturing solutions enable ASM Technologies to deliver differentiated and value-added solutions, thereby strengthening its competitive position and supporting long-term growth. b) Financial Risk

The Company operates in a dynamic business environment that is influenced by changing economic conditions, technological disruptions and global market uncertainties. Increasing adoption of Artificial Intelligence, automation and evolving technology platforms continue to reshape industry dynamics and require continuous investments in capabilities and innovation. Further, fluctuations in foreign exchange rates, inflationary pressures and changing market conditions may impact business performance.

With a portion of the Companys revenues generated from international markets, foreign exchange volatility may have an impact on financial performance. The Company mitigates these risks through robust receivable management practices, disciplined cost management measures and appropriate foreign exchange risk management strategies. The Company has established policies and frameworks for monitoring and managing foreign exchange exposure and regularly evaluates market conditions to take suitable hedging decisions, wherever necessary. In addition, the Boards risk management framework periodically reviews key macroeconomic and financial risks and appropriate mitigation measures to ensure long-term business sustainability. c) New Technologies and Business Models

Rapid advancements in Artificial Intelligence, Industrial AI, automation, digital engineering and intelligent manufacturing are continuously transforming traditional business models and creating new opportunities across industries. The increasing adoption of connected systems, embedded technologies and smart manufacturing solutions is reshaping customer expectations and accelerating the demand for integrated engineering and manufacturing capabilities. ASM Technologies continues to strengthen its position through its Design-Led Manufacturing approach and integrated capabilities across software, electronics, mechanical and embedded systems. The Company focuses on innovation-led growth through investments in technology, Industrial AI capabilities, custom capital equipment and solution development. Continued investments in research, technology platforms and strategic initiatives have enhanced the Companys ability to deliver next-generation solutions, improve customer value creation and strengthen its long-term growth prospects. d) Geography Risk

The Company operates in a global business environment and is exposed to risks arising from geopolitical developments, trade restrictions, changing regulatory environments, economic slowdowns and market uncertainties across geographies. Such developments may impact customer spending patterns, supply chains and overall business sentiment.

The Company mitigates these risks through a diversified geographic presence with revenues spread across multiple markets and industries. Its strong offshore delivery and manufacturing model, flexible operational structure and diversified customer base help reduce dependency on any specific geography or sector. Further, continuous capability enhancement, disciplined financial management, strong customer relationships and robust information security practices support business resilience and enable the Company to effectively manage uncertainties while ensuring sustainable long-term growth.

6. Internal Control Systems and Their Adequacy

The Company has established an adequate and effective internal control framework commensurate with the nature, scale and complexity of its operations. The internal control systems are designed to ensure orderly and efficient conduct of business operations, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. The Company continuously reviews and strengthens its internal control processes to align with changing business requirements and evolving operating environments.

With increasing adoption of digital technologies, automation and Artificial Intelligence across business operations, the Company continues to enhance its control environment through technology-enabled processes, data-driven monitoring and improved risk assessment mechanisms. These initiatives support effective decision-making, strengthen operational efficiency and contribute towards maintaining a robust governance framework.

The Company has an independent internal audit function that periodically reviews and evaluates the adequacy and effectiveness of internal control systems and processes across functions. The internal audit process ensures that controls are designed and implemented effectively and remain adequate considering the size, complexity and nature of the Companys operations.

The Audit Committee of the Board, chaired by an Independent Director and comprising other Non-Executive Independent Directors, periodically reviews the adequacy and effectiveness of internal controls, audit observations and financial reporting processes. The Committee reviews quarterly, half-yearly and annual financial statements and monitors the implementation of corrective actions wherever necessary. Further details on the functioning of the Audit Committee form part of the Corporate Governance Report.

The management continuously reviews observations and recommendations made by Statutory Auditors, Internal Auditors and the Audit Committee and undertakes appropriate actions to strengthen internal controls and enhance overall governance practices across the organisation.

Financial Overview a) Share Capital

The Company has, at present, only one class of shares. The authorised share capital is 1,90,00,000 Equity shares of I10/- each, constituting to I190.00 million. There was increase in the issued, subscribed and paid up capital of I145.89 million during the year under review. Warrants allotted were converted to equity in previous year.

b) Shareholder Funds

The total shareholder funds was I3,221.92 million as of March 31, 2026 against I1,738.62 million as of the previous year end.

c) Fixed Assets

As of March 31, 2026, the gross block of assets stood at I1,184.03 million for the standalone and I1,376.79 million for the consolidated.

d) Net Worth

The return on Net worth (RONW) for the year ended March 31, 2026 was 24.49% for the standalone and 24.11% for the consolidated.

e) Earnings per share

The Earnings Per Share (EPS) for the year ended March 31, 2026 stood at I53.77 (Basic) and I53.77 (Diluted) on a standalone basis, and I51.06 (Basic) and I51.06 (Diluted) on a consolidated basis. f) Revenue

On the standalone front, ASM registered a total revenue of I 4,797.86 million for the year ended March 31, 2026. Domestic sales contributed I3,864.84 million, while export sales accounted for I933.02 million. The EBITDA stood at I969.94 million, representing 20.22% of total revenues, with a net profit after tax of I 639.91 million, representing 13.34% of total revenues. On a consolidated basis, the Company reported total revenues of I5,285.17 million for the year ended March31, 2026, with an

EBITDA of I1,021.96 million, representing 19.34% of total revenues and a net profit after tax of I607.61 million, representing 11.50% of total revenues.

g) Operating Profit (EBIDTA)

The EBITDA stood at I969.94 million, representing 20.22% of total revenues, with a net profit after tax of I639.91 million, representing 13.34% of total revenues. On a consolidated basis, an EBITDA of I1,021.96 million representing 19.34% of total revenues and a net profit after tax of I607.61 million representing 11.50% of total revenues.

h) Net Profit after Tax/Loss

Net profit after tax was I639.91 million on the standalone front and Profit of I607.91 million for the consolidated, for the year ended March 31, 2026

i) Developments in Human Resources/ Industrial Relations

The total employee strength of the company, as of March 31, 2026 was 2,343 as compared to 1,834 the previous year. At ASM, our employees are our most valuable asset. We are dedicated to fostering a supportive and dynamic work environment through innovative initiatives aimed at attracting, training, retaining, and motivating our team. Our endeavours are underpinned by a robust set of values and policies designed to ensure a healthy, happy, and prosperous workplace. We firmly believe that our people are the primary drivers of our success, making human resource development a core component of our mission.

In line with this belief, ASM has implemented a timely and cost-e_ective recruitment system to attract top-tier talent. Our compensation and benefits policies are aligned with the latest trends in the market, ensuring that we remain competitive and our employees feel valued. By continuously enhancing our work environment and focusing on employee well-being and professional growth, we fulfil not only the aspirations of our workforce but also drive the overall success and innovation of the company. j) Ratios:

Particulars	Standalone	Consolidated
Current Ratio	3.03	2.61
Debt Equity Ratio	0.36	0.42
Net Profit (%)	13.34%	11.50%
Inventory Turnover	2.90	2.82
Return On Equity	24.49%	24.11%
Net Capital Turnover Ratio	2.12	2.87

Details of the ratio forms part of financials