Autoline Industries Ltd Management Discussions

GLOBAL ECONOMY

The global economy navigated a complex operating environment during 2025, shaped by trade restrictions, policy uncertainty and persistent geopolitical tensions. Conflicts in the Middle East and the Russia-Ukraine region continued to influence supply chains, energy markets and investor sentiment, while tariff changes and geo-economic fragmentation altered established trade and investment flows.

Despite these headwinds, global activity remained resilient, supported by relatively stable labour markets, fiscal support in several economies and sustained technology-led investment. Supply-chain diversification and greater emphasis on energy security also helped cushion external shocks. Global growth was estimated at 3.4% in 2025, compared with 3.3% in 2024.

Advanced economies expanded by 1.9% during 2025, while emerging market and developing economies (EMDEs) grew by 4.4%, supported by domestic consumption, manufacturing and services activity, and infrastructure investment. Global headline inflation moderated to 4.1%, although the disinflation path remained uneven across economies.

OUTLOOK

The global outlook remains highly sensitive to geopolitical developments, energy-market disruptions, trade-policy shifts and financial conditions. The IMFs April 2026 World Economic Outlook projected global growth of 3.1% in 2026 and 3.2% in 2027, with advanced economies growing more moderately than emerging and developing markets.

For businesses, the environment continues to reward resilience, supply-chain flexibility, localisation and disciplined capital allocation. Policy support and technology investment may provide growth opportunities, while commodity volatility, trade fragmentation and geopolitical risks require agile operating models and diversified sourcing strategies.

[Source: IMF World Economic Outlook April 2026]

Global Resilience Value Proposition: The shift towards resilient, localised and technology-enabled supply chains strengthens the relevance of responsive manufacturing partners. Autolines integrated engineering, tooling and manufacturing capabilities provide a platform to support OEM localisation, programme agility and supply continuity.

INDIAN ECONOMY

The Indian economy remained one of the fastest-growing major economies in FY 2025-26, supported by resilient domestic demand, infrastructure-led investment and policy reforms. According to MoSPIs Provisional Estimates, real GDP grew by 7.7%, while real Gross Value Added (GVA) increased by 7.9% to 294.91 lakh crore, reflecting broad-based activity across manufacturing, services and construction.

Indias economic scale, expanding infrastructure and policy focus on domestic manufacturing continue to strengthen its position in global value chains. Initiatives such as GST, Production Linked Incentive (PLI) schemes and Make in India support formalisation, localisation and investment, while digital public infrastructure is improving financial inclusion, transaction efficiency and business connectivity.

At the same time, Indias dependence on imported crude oil and selected industrial inputs creates exposure to energy-price volatility and global logistics disruptions. Diversified sourcing, increasing domestic manufacturing capability and deeper integration with alternative markets are therefore becoming increasingly important for industrial resilience.

Government-led infrastructure investment and manufacturing incentives continue to create a supportive ecosystem for industrial growth. The PLI framework has attracted significant investment across strategic sectors, reinforcing the broader objectives of Atmanirbhar Bharat, localisation and globally competitive manufacturing.

Inflation moderated through much of FY 2025-26, creating room for monetary easing. In its June 2026 policy review, the Reserve Bank of India maintained the policy repo rate at 5.25% and projected real GDP growth of 6.6% for FY 2026-27, while highlighting continuing risks from energy prices, commodities and geopolitical developments.

INDIAS GDP GROWTH

OUTLOOK

Indias growth outlook remains underpinned by consumption, investment and infrastructure creation. The RBIs June 2026 assessment projected real GDP growth of 6.6% for FY 2026-27, while structural reforms, digitalisation and physical infrastructure continue to strengthen the economys medium- and long-term productive capacity.

Although global trade uncertainty, geopolitical tensions and financial-market volatility remain relevant risks, Indias large domestic market and investment cycle provide meaningful buffers. Manufacturing localisation, PLI-linked investments and improving rural demand can support broader industrial activity and export competitiveness.

The Union Budget FY 2026-27 reinforced infrastructure-led growth through public capital expenditure of approximately 12.2 lakh crore. Continued investment in transport, power, logistics and urban infrastructure is expected to support productivity, industrial demand and the Governments broader Viksit Bharat agenda.

Indias digital ecosystem is also becoming a structural growth enabler. The continued expansion of digital payments and public digital infrastructure is supporting formalisation, financial inclusion, data-led service delivery and greater efficiency across the economy.

(Source: Government of India; Reserve Bank of India; Union Budget 2026-27)

India Growth Value Proposition: Indias infrastructure-led growth, localisation agenda and manufacturing incentives create a favourable backdrop for customer-backed capacity creation. Autolines multi-location manufacturing footprint, engineering depth, tooling capability and automation readiness position the Company to participate in new platforms and localisation opportunities.

INDUSTRIAL OVERVIEW

Automobile and Auto Component Industry

The Indian automobile industry maintained strong momentum during FY 2025-26, supported by consumer demand, infrastructure activity, financing conditions and continued product innovation. As a major contributor to manufacturing, employment, exports and technology adoption, the sector remains an important driver of Indias industrial economy.

FY 2025-26 marked a strong year for the industry. According to the Society of Indian Automobile Manufacturers (SIAM), total production across passenger vehicles, commercial vehicles, three-wheelers, two-wheelers and quadricycles reached 3,47,08,984 units. Industry performance was supported by broad-based demand and a favourable operating environment across key vehicle categories.

Passenger vehicle sales reached a record 46.43 lakh units, growing 7.9% year-on-year, supported by sustained demand for utility vehicles, premiumisation and new technology-led offerings.

Commercial vehicle sales reached approximately 10.80 lakh units, supported by infrastructure, logistics and industrial activity. Two-wheeler sales rose to approximately 2.17 crore units, while three-wheelers also recorded strong demand, reflecting continued momentum in personal mobility, rural markets and last-mile transportation.

AUTOMOBILE DOMESTIC SALES TREND

(Units in Lakh)

Category	2022-23	2023-24	2024-25	2025-26
Passenger Vehicles	38,90,114	42,18,750	43,01,848	46,43,439
Commercial Vehicles	9,62,468	9,68,770	9,58,679	10,79,871

India further strengthened its position as an automotive manufacturing and export hub, with automobile exports reaching approximately 6.65 million units in FY 2025-26. The performance reflects improving product acceptance, competitive manufacturing capabilities and deeper integration with markets across Africa, Latin America, the Middle East and neighbouring regions.

Electric mobility continued to expand, supported by policy incentives, charging infrastructure, localisation initiatives and growing consumer acceptance. Two-wheelers and three-wheelers remained important adoption segments, while electric passenger vehicles also gained traction.

The transition is creating opportunities for localisation, lightweighting, new materials, electronics integration and redesigned component architectures.

The Union Budget 2026-27 maintained a strong focus on infrastructure and manufacturing, with public capital expenditure of approximately Rs. 12.2 lakh crore. This investment environment is expected to support mobility, logistics and industrial activity while strengthening demand for advanced manufacturing capabilities.

Policy measures for electric mobility continue to emphasise domestic manufacturing, battery ecosystems, critical minerals and supply-chain resilience. These initiatives are expected to support localisation and progressively deepen Indias EV manufacturing value chain.

The sector nevertheless remains exposed to commodity-price movements, technology transitions, regulatory changes, supply-chain disruptions and global trade uncertainty. Continued investment in localisation, automation, engineering capability and operational flexibility will be central to sustaining competitiveness.

(Source: SIAM; Government of India)

Automotive Value Proposition: Growth is increasingly linked to new-platform launches, localisation, higher value-add per vehicle and manufacturing agility. Autolines capabilities across stamping, structural assemblies, pedal systems, tooling, engineering and robotic welding create multiple participation points across passenger, commercial and emerging-mobility programmes.

AUTO COMPONENT INDUSTRY

Indias auto component industry remains a critical part of the automotive ecosystem, supported by vehicle production, localisation and increasing integration with global supply chains. The industry entered FY 2025-26 from a strong base: ACMA reported FY 2024-25 turnover of approximately US$80.2 billion, with continued growth in supplies to OEMs, exports and the aftermarket.

Exports remain an important growth avenue as global customers diversify sourcing and evaluate India for engineering-intensive, cost-competitive manufacturing. This creates opportunities for suppliers that can combine quality systems, programme execution, scale, engineering support and supply-chain reliability.

The industrys medium-term opportunity is being shaped by electrification, premiumisation, smartification, safety requirements and supportive manufacturing policies. These trends are changing vehicle architectures and increasing the need for lightweight structures, precision components, electronics integration and flexible manufacturing.

Technology adoption is also increasing the value embedded in components. Greater use of automation, connectivity, advanced safety systems and digital engineering is raising the importance of design capability, traceability, process control and rapid industrialisation across the supplier ecosystem.

The long-term outlook remains constructive, supported by vehicle demand, localisation, export potential and technology transition. At the same time, raw-material volatility, programme concentration, changing propulsion technologies and global trade disruptions require disciplined investment and agile capacity planning.

(Source: ACMA; industry reports)

OUTLOOK

The Indian automobile industry is expected to retain a favourable medium-term growth trajectory, supported by rising incomes, infrastructure development, replacement demand and continued policy support. Growth is likely to remain differentiated across segments, making portfolio balance and programme diversity increasingly important for component suppliers.

Indias large domestic market, established manufacturing base and export capability continue to strengthen its role in the global automotive value chain. According to IMARC estimates, the Indian automobile market could reach approximately US$278.5 billion by 2034, reflecting sustained long-term expansion.

Electric mobility is expected to gather further momentum alongside hybridisation, connected technologies and advanced safety features. These shifts are increasing engineering intensity and component value while creating new opportunities for suppliers that can adapt manufacturing processes and product portfolios.

While commodity volatility, regulation and global economic conditions may influence the pace of growth, continued investment in manufacturing technology, localisation and product development should strengthen the industrys competitiveness and resilience.

(Source: IMARC)

Industry Value Proposition: Electrification, premiumisation and higher engineering content are increasing demand for precision, complex assemblies and flexible automation. Autoline can leverage its integrated engineering, tooling and manufacturing capabilities to deepen content participation, shorten industrialisation cycles and support customers across evolving vehicle platforms.

GOVERNMENT INITIATIVES

The Government continues to support automotive competitiveness through policies focused on advanced manufacturing, localisation, electric mobility, infrastructure and supply-chain development.

Production Linked Incentive (PLI) Scheme for Automobile and Auto Components

The Production Linked Incentive (PLI) Scheme for Automobile and Auto Components, with an approved outlay of Rs. 25,938 crore, is designed to promote Advanced Automotive Technology products and deepen localisation. Its focus on zero-emission and advanced-technology platforms is intended to strengthen domestic capabilities and integrate Indian manufacturers more deeply into global supply chains.

Pm E-Drive Scheme

The PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, with an outlay of Rs. 10,900 crore, supports electric mobility through demand incentives, charging infrastructure, public transport electrification and testing-agency upgrades. The programme is intended to accelerate adoption while strengthening the domestic EV ecosystem.

Electric Vehicle Manufacturing and Ecosystem Development

The Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI), together with measures supporting battery manufacturing, critical minerals and charging infrastructure, seeks to attract investment and strengthen Indias position in the global electric-mobility value chain.

Budgetary Support and Policy Measures

The Union Budget 2026-27 continued to support advanced manufacturing and localisation through sectoral allocations, infrastructure investment and customs-duty measures for selected capital goods, battery inputs and critical materials. These measures can improve the economics of domestic manufacturing and support technology-led capacity creation.

(Source: Ministry of Heavy Industries; Union Budget 2026-27)

COMPANY OVERVIEW

Autoline Industries Limited (Autoline or the Company) is an integrated engineering and manufacturing company serving the automotive component industry and selected adjacent sectors. Its capabilities span sheet-metal components, sub-assemblies, structural assemblies and tubular products for passenger vehicles, sport utility vehicles (SUVs), commercial vehicles and other mobility applications, complemented by select non-automotive opportunities.

The Companys core business divisions

• Concept, Style, Design, Analysis & Engineering Services: Automotive engineering services for product design, development and validation.

• Tool Room

Press tool design, formability analysis

Press tool manufacturing, jigs & fixtures o Tools try-outs

• Medium and Large Stamped Mechanical Assemblies:

Complete Floor and Door

Assemblies, Sub Assemblies

Load Bodies and Cross Beams

Exhaust Systems

Tubular Assemblies and Sheet Metal Stampings

• Mechanical Assemblies

Pedal Control System

Parking Brake

Door Hinges, Jack Assemblies

Cab Stay and Cab Tilt

INTEGRATED CAPABILITIES ACROSS THE VALUE CHAIN

Concept, Style, Design, Analysis & Engineering

Product design • Development

Medium &

Large Stamped Mechanical Assemblies

Floor & door assemblies

• Load bodies

• Cross beams

• Exhaust

• Tubular &

sheet-metal stampings

Total Room Press-tool design

• Formability

• Tool manufacturing

• Jigs & fixtures

• Try-outs

Mechanical

Assemblies

Pedal systems

• Parking brakes

• Door hinges

• Jack assemblies

• Cab stay & cab tilt

The Companys product portfolio spans pedal control systems, parking brakes, hinges, jack assemblies, cab stay and cab tilt mechanisms, exhaust systems, load bodies, tubular assemblies, fabrications and sheet-metal stampings. Its manufacturing capability ranges from precision parts to complex, higher-weight assemblies, enabling participation across diverse vehicle and industrial applications.

Autolines integrated model combines product design, engineering, tooling, fabrication, stamping, welding and assembly. Supported by in-house design capabilities and a dedicated tool room, the Company can support product engineering, re-engineering, sheet-metal design, reverse engineering, tooling development and prototyping-creating a more connected path from concept to industrialisation.

The Company operates manufacturing facilities across key automotive hubs in Maharashtra, Karnataka, Uttarakhand and Gujarat. Its geographic presence, manufacturing infrastructure and quality systems support proximity to customers, programme responsiveness and execution across multiple vehicle segments.

Autoline serves a diversified portfolio of domestic and global OEM customers, including Tata Motors, Ashok Leyland, Mahindra, Renault-Nissan, Daimler India, Cummins, Volkswagen, Hyundai Construction Equipment and SANY. Long-standing customer relationships, engineering depth and a broad product portfolio support the Companys positioning as an integrated manufacturing partner.

Integrated Business Value Proposition: Autolines design-to-production model-combining engineering, tool-room capability, stamping, welding and assembly— supports faster industrialisation, localisation, coordinated quality control and deeper lifecycle engagement with OEM customers.

OPERATIONAL PERFORMANCE

FY 2025-26 represented a step-up in scale, manufacturing capability and customer-programme execution for Autoline Industries Limited. The Company delivered its highest-ever annual revenue while continuing to invest in capacity, automation, engineering capability and future-ready operating systems.

Strengthening Manufacturing Scale and Production Infrastructure

During FY 2025-26, the Company continued to strengthen manufacturing scale across its pan-India footprint, supported by integrated design, engineering, tooling and programme-management capabilities.

A key milestone was the continued ramp-up of the Sanand manufacturing facility, which supports passenger-vehicle programmes and future capacity requirements. Robotic press operations, welding automation and Industry 4.0-oriented initiatives are progressively strengthening production precision, traceability, scalability and real-time operational visibility.

Expanding Product Portfolio and Deepening Customer Engagement

Autoline continued to broaden its participation across passenger vehicles, SUVs, commercial vehicles, tractors, two-wheelers and emerging mobility applications, while leveraging common engineering and manufacturing capabilities across product categories.

The Company manufactures more than 3,000 components and assemblies across heavy sheet-metal parts, body-inwhite structures, exhaust systems, pedal systems, hinges, load bodies, tubular structures and structural modules. Integrated engineering support-including BIW design, reverse engineering, virtual validation and prototyping-helps improve manufacturability and shorten development-to- production cycles.

Customer-Led Growth Across Core Automotive Programs

Growth during the year was supported by stronger execution across strategic customer programmes. Passenger vehicles emerged as an important growth driver, supported by increased programme participation and production ramp-up with key OEM customers.

Business with Mahindra also expanded, supporting customer diversification and participation across evolving platforms, while commercial-vehicle programmes continued to provide a stable base. Tooling revenues, product mix and higher volumes further supported performance. The Company also continued to evaluate capability-adjacent opportunities in electric mobility, solar, construction equipment, power generation and railways.

Technology, Engineering and Digital Transformation

Technology and engineering remained central to operational execution. The Companys in-house tool rooms, product-development capabilities and design centres support engineering, BIW design, reverse engineering, prototyping and customer-specific industrialisation requirements.

Autoline continued to progress its SAP/ERP transformation roadmap, including movement towards SAP S/4HANA-enabled processes. The objective is to improve process integration, data visibility, analytics and control across manufacturing, supply chain, finance and governance workflows.

Digital Value Proposition The convergence of ERP integration, Industry 4.0, robotic automation and data-led operating reviews is creating a scalable digital backbone for traceability, faster decisions, productivity improvement and stronger process controls.

BUILDING FUTURE GROWTH PLATFORMS THROUGH SUBSIDIARIES AND NEW MOBILITY

The Company continued to develop adjacent growth platforms through its subsidiaries. Autoline Design Software Limited supports design-led engineering solutions and high-value technical capabilities. The Board-approved amalgamation with Autoline Industries Limited, subject to applicable approvals, is intended to simplify the structure and create closer integration between engineering, technology and manufacturing.

The electric-mobility business continued to build capabilities across the electric two-wheeler ecosystem, including product, battery-related and distribution initiatives. The focus remains on developing scalable opportunities aligned with market readiness, customer acceptance and disciplined capital deployment.

EXPANSION ACROSS EV AND PREMIUM MOBILITY PLATFORMS

The Company continued to deepen relationships with existing OEM customers while expanding participation across premium, electric-mobility and new-platform opportunities. This broader programme pipeline supports diversification of customer, product and technology exposure, subject to customer schedules and execution milestones.

EXPORT DEVELOPMENT

Autoline continued to evaluate opportunities to increase the share of value-added and export-oriented business, including potential participation in Europe and the Middle East. The strategic objective is to build a more balanced portfolio anchored in engineered products, manufacturing capability and commercially disciplined market expansion.

STRATEGIC INITIATIVES

During the year, the Board approved the Scheme of Amalgamation of Autoline Design Software Limited with Autoline Industries Limited, subject to requisite regulatory and statutory approvals. The proposed integration is expected to simplify the corporate structure and strengthen alignment between engineering, technology and manufacturing capabilities.

ALIGNMENT WITH GLOBAL STANDARDS AND PRACTICES

Commitment to Sustainability and Innovation

The Company continues to integrate sustainability and innovation into its operating priorities, recognising their growing relevance to customer expectations, resource efficiency, risk management and long-term value creation. The approach is centred on responsible growth, operational efficiency and progressive alignment with evolving global standards.

The sustainability roadmap is anchored around four priorities: Governance and Disclosure, Environmental Responsibility, Social Responsibility and Diversity.

Governance and Disclosure: The Company continues to strengthen sustainability governance through structured reporting and disclosure. Following publication of its third Business Responsibility and Sustainability Report (BRSR), efforts are being directed towards improving the quality, comparability and maturity of sustainability information and progressively aligning disclosures with recognised frameworks.

Environmental Responsibility: The Company focuses on reducing the environmental intensity of operations through energy efficiency, resource optimisation, waste management and process improvement.

• Energy Optimisation: The Company continues to improve energy efficiency through process discipline, manufacturing technology and increased evaluation of renewable-energy solutions, including solar-based initiatives across facilities.

• Waste Reduction and Resource Management:

The Company is strengthening segregation, cross-location coordination and resource-efficiency practices to reduce waste, improve recovery and support responsible material management.

• Digital Monitoring and Performance Tracking: Sustainability measurement is being progressively strengthened through digital monitoring and ERP-linked data processes, with the objective of improving visibility, traceability and management oversight.

SOCIAL RESPONSIBILITY AND DIVERSITY

Alongside environmental priorities, the Company remains focused on inclusion, skill development and employee well-being. Initiatives to increase participation of women and persons with disabilities (PwDs), together with CSR programmes and community engagement, support the Companys broader social-value agenda.

Sustainability Value Proposition: Energy efficiency, renewable power, resource discipline, inclusion and stronger sustainability measurement can improve cost resilience, support OEM ESG expectations and strengthen participation in responsible supply chains.

CAPITAL RAISED FOR STRATEGIC GROWTH

To support long-term growth, strengthen the capital base and provide financial flexibility for future business requirements, the Company undertook strategic capital-mobilisation initiatives during FY 2025-26 through the conversion and issuance of share warrants to the promoter group.

Conversion of Share Warrants into Equity Shares: On June 27, 2025, the Company allotted 22,00,000 equity shares upon conversion of warrants at an issue price of Rs. 102.50 per equity share. The promoters paid the balance 75% consideration of Rs. 16.91 crore in accordance with the terms of the issue.

Issue of Convertible Share Warrants: On February 5, 2026, the Company allotted 32,65,000 convertible share warrants to the promoter group at an issue price of Rs. 75 per warrant. The promoters paid 25% of the issue price, amounting to Rs. 6.12 crore, with the balance payable within the stipulated period upon exercise of the warrants, subject to the terms of issue and applicable law.

CONSOLIDATED FINANCIAL OVERVIEW

Particulars	FY 2025-26	FY 2024-25	YoY Change
Revenue (Rs. In Cr)	824.05	658.55	25.13%
Operating Expense (Rs. In Cr)	745.35	590.08	26.31%
PBT (Rs. In Cr)	44.71	19.13	133.72%
PAT (Rs. In Cr)	38.50	18.11	112.59%
EBITDA Margin	9.55%	10.40%	-85 bps

FINANCIAL PERFORMANCE REVIEW

FY 2025-26 marked the Companys highest-ever annual revenue performance. Revenue increased by 25.13% to Rs. 824.05 crore from Rs. 658.55 crore in FY 2024-25, supported by higher volumes, passenger-vehicle programme growth, customer ramp-ups, improved capacity utilisation and a stronger product mix. The increase in business scale reflects the Companys transition from recovery-led execution towards a more structured growth phase.

On a standalone basis, EBITDA increased to Rs. 84.00 crore from Rs. 72.61 crore in the previous year, while Profit After Tax increased to Rs. 38.66 crore from Rs. 19.04 crore. The improvement was supported by higher operating scale, programme growth and capacity utilisation. Basic and diluted earnings per share stood at Rs. 8.62, reflecting the improvement in profitability.

Financial Value Proposition: FY 2025-26 demonstrates a clear step-up in business scale and earnings. The next phase of value creation is centred on improving margin quality, cash conversion, return on capital employed and disciplined deployment of growth capital.

Year-on-year movements exceeding 25% primarily reflect the higher scale of operations and the resulting increase in operating costs, while the stronger increase in PBT and PAT reflects improved absolute earnings. Detailed explanations should be read together with the audited financial statements and relevant notes.

KEY FINANCIAL RATIOS

For detailed ratio analysis, please refer to the relevant notes forming part of the Standalone and Consolidated Financial Statements.

STRATEGIC OUTLOOK

Sustaining Growth through Customer Expansion

Autolines growth strategy for FY27 and beyond is anchored in deeper participation with existing OEMs, selective customer diversification and increased content across new vehicle platforms. Growth will remain customer-backed and execution-led, with emphasis on programme ramp-up, manufacturing readiness and commercially sustainable business expansion.

Capacity Expansion

The Company will continue to improve capacity utilisation while selectively augmenting press, welding and related manufacturing infrastructure to support confirmed and emerging programme requirements. Capacity creation will remain governed by customer visibility, execution readiness, capital discipline and expected returns.

Efficiency through Automation

Automation and digital manufacturing remain central to productivity improvement. Investments in robotic automation, process optimisation, traceability and integrated systems are intended to improve quality consistency, throughput, operating leverage and decision speed.

Diversified Growth

The Company has progressed from a recovery orientation towards disciplined scale-up. Alongside its core automotive business, Autoline will selectively develop capability-adjacent non-automotive opportunities, including solar structures, formwork and industrial applications. Expansion will remain commercially disciplined, capacity-adjacent and subject to customer conversion, execution readiness and return thresholds.

Margin Quality

The strategic emphasis is increasingly shifting from revenue growth alone to profitable and cash-accretive growth. Priorities include improving business mix, material productivity, contribution margins, plant-level cost discipline and customer/programme profitability.

Capital Discipline

Cash generation and balance-sheet discipline remain central priorities. Management will continue to focus on receivables, inventory optimisation, tooling recovery, disciplined capital allocation and reduction of financial-cost intensity, with the objective of supporting growth without compromising financial resilience.

Creating Sustainable Value

Autoline remains focused on building a scalable, future-ready enterprise through customer partnerships, manufacturing excellence, technology adoption, governance and disciplined execution. The objective is to translate growth opportunities across automotive and adjacent segments into sustainable value for shareholders and stakeholders.

Investor Value Proposition: The strategic agenda combines customer-backed growth, capacity readiness, automation, portfolio diversification and capital discipline-aimed at converting higher scale into stronger profitability, cash generation and returns over the medium term.

RISK MANAGEMENT

The Company follows a structured risk-management framework designed to identify, assess, monitor and mitigate material risks across operations, finance, technology, people, sustainability and compliance. The framework supports early escalation, defined ownership and management oversight, enabling risk considerations to be integrated into business planning and decision-making.

Risks Identified	Rationale for identifying the risk	In case of risk, the approach to adapt or mitigate	Financial implications of the risk (indicate positive or negative implications)
Energy Management & Transition	Energy is a significant operating input across the Companys manufacturing footprint. Price volatility, grid constraints or supply interruptions may affect cost competitiveness and operational continuity.	Improve energy efficiency, monitor consumption, evaluate renewable and solar solutions, strengthen preventive maintenance and progressively diversify energy sources where commercially viable.	Mixed: Effective energy management can improve cost resilience; adverse price or supply movements may negatively affect operating costs.
Employee Health and Safety	Manufacturing operations involve shop-floor, equipment and process-related risks. Any serious safety incident may affect employee well-being, productivity, continuity and reputation.	Maintain preventive EHS controls, statutory compliance, safety training, mock drills, health surveillance, PPE discipline, emergency preparedness and structured incident review.	Negative if unmanaged: Safety incidents can affect people, productivity, compliance costs and reputation.

Risks Identified	Rationale for identifying the risk	In case of risk, the approach to adapt or mitigate	Financial implications of the risk (indicate positive or negative implications)
Product Life Cycle Management	Changing customer requirements, model cycles and technology transitions can affect product demand, utilisation and returns on programme-specific investment.	Use structured programme governance, customer-linked validation, investment gates, engineering reviews, flexible capacity and disciplined product-development processes.	Negative if unmanaged: Lower programme volumes or acceptance may affect asset utilisation and investment returns.
Supply Chain Sustainability and Reporting	Supplier non-compliance, capacity constraints, quality issues or disruptions can affect production continuity, customer delivery and responsible-sourcing expectations.	Strengthen supplier onboarding, quality and compliance assessment, periodic monitoring, alternate sourcing, escalation mechanisms and supply-risk visibility.	Negative if unmanaged: Supplier disruption can affect delivery, cost, quality and customer confidence.
Data Privacy	Increasing digitalisation and handling of customer, employee and business information create exposure to unauthorised access, cyber incidents and data loss.	Maintain layered cybersecurity controls, access governance, backups, monitoring, vulnerability assessments, employee awareness and incident-response mechanisms.	Negative if unmanaged: Cyber or data incidents may cause operational disruption, financial loss, regulatory exposure and reputational impact.
Human Rights and Labour Practices	Manufacturing and extended supply chains require continued attention to labour standards, workplace practices, inclusion and responsible sourcing.	Maintain compliance with applicable labour laws, workplace-safety requirements and policies against forced labour, child labour and discrimination; progressively strengthen supplier expectations and monitoring.	Negative if unmanaged: Non-compliance may lead to regulatory, operational and reputational consequences.

ENVIRONMENT, OCCUPATIONAL HEALTH, AND SAFETY (EHS)

The Company follows a Safety First philosophy and remains committed to protecting the health, safety and well-being of employees and contract workforce across its operations. Its Environment, Health and Safety (EHS) framework combines preventive controls, training, awareness, compliance and continuous improvement to embed safe working practices into day-to-day operations.

Preventive measures include fire-safety training, mock drills, accident-prevention programmes, emergency preparedness, personal protective equipment protocols and access to paramedical and emergency support at manufacturing locations. The EHS approach emphasises proactive identification and mitigation of workplace hazards to reduce incidents, protect people and support operational continuity.

Dedicated safety leadership, Safety Week initiatives and focused training in First Aid, Behaviour-Based Safety, 5S and workplace safety reinforce a prevention-oriented culture. The Company is also strengthening ESG preparedness and responsible-business practices in progressive alignment with the National Guidelines on Responsible Business Conduct.

QUALITY

The Company continues to strengthen a culture of quality at source, preventive control and continuous improvement. Quality systems are supported by process discipline, automation, workstation-level checks, poka-yoke mechanisms, preventive maintenance and structured monitoring of critical parameters. The objective is to improve consistency, reduce defects and strengthen customer confidence.

The Companys quality-management framework is anchored by IATF 16949 and other applicable management-system and customer-specific requirements. Employee capability building, supplier-quality monitoring, preventive maintenance and technology upgrades support continuous improvement in product quality, process reliability, efficiency and customer satisfaction.

INTERNAL CONTROL SYSTEMS

The Company has established an internal-control framework commensurate with the scale and complexity of its operations. Policies, processes and internal financial controls are supported by independent internal audits, with observations and corrective actions periodically reviewed by management and the Audit Committee to strengthen accountability and timely closure.

Annual operating and capital budgets, management reviews, ERP-enabled processes and periodic technology upgrades support financial discipline, resource optimisation and accurate reporting. The control environment continues to evolve through greater digitisation, stronger audit trails, maker-checker controls and data-backed review mechanisms.

Governance Value Proposition: ERP-enabled controls, independent internal audit and Audit Committee oversight strengthen evidence-based governance, data reliability and disciplined risk management as the business scales.

HUMAN RESOURCES

The Company regards its people as a critical enabler of sustainable growth. Its human-resources philosophy focuses on building an engaged, capable and future-ready workforce through skill development, leadership capability, employee well-being, inclusion and a performance-oriented culture.

During the year, people initiatives focused on employee engagement, workplace experience, capability building and stronger alignment between individual performance and organisational priorities.

The employee journey is supported by structured onboarding, pre-employment health assessments, induction and continuous learning. These interventions are designed to improve role readiness, technical competence, functional capability and integration into the organisation.

Leadership development remained an important priority, supported through targeted programmes for senior management and functional teams. Financial-literacy initiatives for non-finance employees also helped strengthen commercial awareness and decision-making capability across the organisation.

Technical and behavioural learning programmes were delivered through internal and external subject-matter experts. Cross-functional knowledge sharing and internal capability building continued to support collaboration, standardisation and continuous improvement.

The Gurukul training facility is being strengthened as a platform for induction, workforce readiness and continuous upskilling. The objective is to improve deployment readiness of new employees and contract workforce while providing structured development opportunities for existing employees.

The structured Performance Management System (PMS), supported by KRAs and Balanced Scorecards, reinforces accountability and alignment with organisational priorities. Employee-recognition, benefits, welfare and support programmes complement the performance agenda.

Employee well-being remains integral to the people strategy. Health check-ups, engagement initiatives, sports, cultural activities and employee-support programmes contribute to a more connected and supportive workplace.

The Human Asset Division (HAD) maintains structured employee-engagement forums to strengthen communication, transparency, responsiveness and inclusion across the organisation.

Going forward, the Company will continue to strengthen internal training capability, customised learning interventions, leadership development and objective performance management to support a high-accountability, growth-oriented culture.

Industrial relations across manufacturing locations remained cordial during the year. As at March 31,2026, the Companys employee strength stood at 1,050.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forward-looking statements based on current expectations and assumptions. Actual results may differ materially due to economic conditions, customer schedules, commodity prices, geopolitical developments, regulatory changes, financing conditions, technology transitions and other risks. The Company undertakes no obligation to update or revise such statements except as required under applicable law.