Autoline Industries Ltd Management Discussions

GLOBAL ECONOMY

During 2024, the global economy demonstrated stability despite various economic, international relations, and governmental challenges. Data from the World Economic Outlook (IMF) report indicated a consistent global Gross Domestic Product (GDP) growth rate of 3.3%. Economic expansion rates varied significantly across regions. Growth in developed nations experienced a decline, whereas developing economies, particularly those in Asia, generally maintained steady growth.

The global economic environment in 2024 and 2025 has been shaped by continued geopolitical instability, including persistent regional conflicts and trade tensions, that have disrupted supply chains, investment, and energy markets. The IMFs July 2025 World Economic Outlook notes that heightened policy and tariff uncertainty remains a significant downside risk, with recent front-loading of trade flows and anticipation of tighter trade restrictions impacting business sentiment and global demand. Meanwhile, inflation rates and consumer spending patterns reflect lingering volatility;

many regions are experiencing softer consumption, driven by tighter financial conditions and caution in discretionary spending. The interplay of these factors is expected to continue to challenge growth prospects, trade volumes, and investor confidence in the coming year.

Global inflation showed clear signs of improvement in 2024, with the headline rate confirmed at 5.6% for the year, markedly lower than the 6.8% recorded in 2023. For 2025, inflation is projected to ease further to 4.2%, with expectations for a continued decline to 3.6% in 2026.

In response to prevailing economic conditions, leading central banks implemented notable interest rate reductions to stimulate economic activity. December 2024 saw the most significant coordinated series of interest rate cuts among G10 central banks since the pandemic, with total reductions for the year amounting to 825 basis points. This period marked a substantial easing of monetary policy not observed since 2009.

(Source: World Economic Outlook, IMF, Reuters)

OUTLOOK

The global economy is expected to maintain a steady expansion, with projected growth of 2.8% in 2025 and 3.0% in 2026, supported by resilient performances in several advanced and emerging markets. In contrast, growth in the United States is forecast to slow to 1.8% in 2025 and 1.7% in 2026, reflecting anticipated labour market adjustments and a moderation in consumer expenditure. This outlook incorporates risks such as higher tariffs, persistent policy uncertainty, and subdued consumer demand, which are weighing on the US economy when compared to previous years.

While the general trend indicates a deceleration in global price increases, certain regions continue to experience stagnant conditions due to persistently high inflation levels. Global inflation is projected to decline to 4.3% in 2025 and further to 3.6% in 2026. Developed economies are anticipated to achieve their respective inflation targets more rapidly than other regions. Monetary policies are expected to diverge across different geographies, reflecting the varied economic circumstances prevalent in each.

(Source: World Economic Outlook, IMF)

INDIAN ECONOMY

Indias economy demonstrated a consistent pattern of expansion and stability throughout FY 2024-25, confirming its position as a major global economy showing strong growth. According to the Second Advanced Estimate (SAE) from the National Statistical Office (NSO), the real Gross Domestic Product (GDP) was 6.5% in FY 2024-25. This follows the significant growth rate of 9.2% reported in the First Revised Estimates for the preceding financial year. This sustained upward trend highlights the nations solid economic foundation, effective government policies, a dynamic services sector, and considerable domestic spending, all contributing to a favourable view of Indias potential for long-term economic progress.

Indias economic stature continues its upward climb, with the nation now holding the position of the worlds fifth-largest economy by nominal Gross Domestic Product (GDP) and the third-largest when assessed by purchasing power parity (PPP). Ambitious national targets have been set to achieve a $5 trillion economy by FY 2027-28 and a $30 trillion economy by 2047. These aims are to be accomplished through substantial infrastructure investments, ongoing governmental reforms, and the widespread adoption of technological advancements. Reflecting this commitment, the capital investment budget for the upcoming financial year (2025-26) has increased to ?11.21 lakh crores, representing 3.1% of GDP.

Integral to this accelerated growth trajectory and increasing economic self-sufficiency have been significant governmental reforms and considerable capital allocated towards both physical and digital infrastructure. Government initiatives such as Make in India and the Production-Linked Incentive (PLI) scheme have also played a crucial role.

OUTLOOK

Indias economy is expected to grow at a rate of 6.2% in FY 2025-26. Projections indicate that by 2030, India will likely become the worlds third-largest economy, driven by investment in infrastructure, greater private sector capital expenditure, and the expansion of financial services. Ongoing reforms are anticipated to support this long-term economic advancement.

Several factors underpin this positive outlook, including Indias favourable demographics, increasing capital investment, proactive government schemes, and strong consumer demand. Improved spending in rural areas, helped by moderating inflation, further reinforces this growth trajectory. The governments focus on capital expenditure, prudent fiscal management, and measures to boost business and consumer confidence are creating a supportive environment for both investment and consumption.

Programmes such as Make in India 2.0, reforms to improve the ease of doing business, and the Production-Linked Incentive (PLI) scheme continue to strengthen Indias infrastructure, manufacturing, and exports, enhancing its role in global supply chains. With inflation expected to achieve target levels by the end of 2025, a more accommodative monetary policy is anticipated. Infrastructure development and supportive government measures remain key to promoting capital formation. Recent industry reports confirm that rural demand is rebounding, with rural consumption growth now outpacing that in urban centres, driven by easing inflation, better agricultural output, rising disposable incomes, and improved digital and physical connectivity. This renewed

momentum in rural spending has become a powerful engine for private consumption and overall economic growth.

The Union Budget 2025-26 presents a growth-oriented financial strategy that addresses immediate and long-term economic needs. By increasing disposable income, prioritising infrastructure, and promoting domestic manufacturing, the budget aims to foster sustained economic growth while ensuring fiscal responsibility.

A key feature is the increased income tax exemption limit of ?12.75 lakh per annum, which will enhance disposable income for middle-class households, stimulating consumer spending. Significant investments in infrastructure, including roads and railways, will improve connectivity and create jobs. Additionally, the budget strengthens the Production Linked Incentive (PLI) scheme for sectors like electronics and textiles, while supporting the "Make in India" initiative to establish India as a global manufacturing hub. The transformation of India Post into a catalyst for the rural economy will further enhance logistics and financial inclusion.

(Source: Press Information Bureau, World Economic Outlook, IMF)

INDUSTRIAL OVERVIEW

Automobile and Auto Component Industry

The Indian automobile industry is a cornerstone of the countrys manufacturing sector and a significant

India - Automotive Sales volume, 2025

contributor to the economy. As of FY 2024-25, the industry witnessed a remarkable recovery, with overall vehicle sales reaching approximately 4.5 million units, marking a growth of 12% compared to FY 2023-24. This growth trajectory was driven by a resurgence in consumer demand, a trend towards premiumisation, favourable government policies, and advancements in technology.

In FY 2024-25, Indias automobile industry demonstrated remarkable resilience and growth, solidifying its position as the worlds third-largest automotive market. The overall market size of the Indian automobile industry reached approximately $137.06 billion, reflecting the sectors strong performance. The sectors expansion was driven by evolving consumer preferences, policy support, and significant investments in infrastructure and technology.

(Source: Mordor Intelligence)

The industry witnessed a total production of 30.61 million vehicles, encompassing passenger vehicles, commercial vehicles, three-wheelers, two-wheelers, and quadricycles, marking an 11.3% increase from the previous years 27.5 million units. This surge was primarily attributed to heightened demand across various segments, reflecting positive consumer sentiment and economic recovery.

The electric vehicle market in India, though still emerging, demonstrated promising growth. EVs accounted for approximately 2.5% of the 4.3 million cars sold in 2024, representing a 20% increase in EV sales compared to the previous year. This growth outpaced the overall car market expansion of 5%, signalling increasing consumer acceptance and interest in electric mobility solutions. The governments push towards electric mobility, through initiatives such as the FAME India Scheme, played a crucial role in promoting EV adoption.

Automakers responded proactively to this trend, with plans to introduce nearly a dozen new EV models in 2025. These upcoming models are expected to feature longer driving ranges and faster charging times, addressing two critical factors influencing consumer adoption of EVs.

Automobile Domestic Sales Trend

Category	2021-22	2022-23	2023-24	2024-25
Passenger Vehicles	30,69,523	38,90,114	42,18,746	43,01,848
Commercial Vehicles	7,16,566	9,62,468	9,67,878	9,56,671

In the past five years, motorcycles have maintained their leading position in the Indian market, although they have lost some ground to scooters. Two-wheeler sales demonstrated robust momentum in FY 2024-25, registering 19.6 million units, a 9.1% increase over FY 2023-24, driven by improved rural demand, with the scooter segment leading this growth. Notably, the penetration of electric vehicles within the overall two-wheeler market surpassed 6% in FY 2024-25.

The penetration of electric vehicles (EVs) in the motorcycle segment has been minimal, primarily due to a lack of available options. With announcements of EV launches, the segment is expected to grow gradually.

The Indian governments commitment to sustainable mobility was evident in the Union Budget 2025-26, which introduced several measures to support the automotive sector. Key among these was the proposed elimination of basic customs duty on 35 capital goods required for EV battery manufacturing, aiming to lower production costs and boost domestic manufacturing, thus making electric vehicles more affordable.

The budget also emphasised continued support for the Production-Linked Incentive (PLI) scheme to further boost domestic EV production, reduce import reliance, and promote self-reliance. Increased budget allocations were also designated for expanding EV charging infrastructure across highways and urban areas, addressing range anxiety and supporting broader EV adoption.

Despite the positive growth, the automobile industry faced challenges in FY 2024-25, including supply chain disruptions, especially in semiconductor availability, which impacted production schedules. Additionally, fluctuating raw material prices and regulatory changes posed hurdles for manufacturers. However, the sector demonstrated

resilience through strategic partnerships and investments in local manufacturing capabilities.

Auto Component Industry

Indias auto component industry serves as a crucial driver of macroeconomic growth and employment. It contributes 2.3% to Indias GDP and directly employs over 1.5 million people. Projections indicate this sector will account for 5-7% of Indias GDP by 2026. The Automotive Mission Plan (2016-26) forecasts direct incremental employment for 3.2 million individuals by the same year, contributing to the industrys overall support of over 37 million jobs.

The industry comprises diverse players, ranging from large corporations to micro entities, spread across various national clusters. It is broadly categorised into organised and unorganised sectors. While the unorganised sector typically handles low-value items for the aftermarket, the organised sector serves OEMs with high-value precision instruments. The industrys turnover reached ?6.14 lakh crore ($74.1 billion) in FY 2023-24, representing a 9.8% revenue growth compared to FY 2022-23. Domestic OEM supplies contributed approximately 54% to this turnover, growing by 8.9% to ?5.18 lakh crore ($62.4 billion). The domestic aftermarket also saw a 10.0% growth, reaching ?9.38 lakh crore ($11.3 billion) in FY2023-24.

The auto component industry stands as a leader in exports. In FY 2023-24, export value was estimated at $21.2 billion. North America accounted for 33% of total exports, increasing by 5%. Europe contributed 32%, with a 12% increase. Asia represented 24%, showing flat growth. Key export items included drive transmission and steering, engine components, body and chassis parts, and suspension and braking systems. This market share has expanded significantly, driven by rising domestic demand

from a growing middle class and increasing global exports. The demand for Indian auto components has encouraged the entry of several Indian and international players into the sector. Over FY 2016 - FY 2024, the industry registered a CAGR of 8.63%, reaching $74.1 billion by the end of FY 2024.

(Source: IBEF)

Outlook

The Indian automobile industry is projected to continue its growth trajectory, with total vehicle sales expected to exceed 5 million units, with several key factors influencing its trajectory. The passenger vehicle segment is expected to maintain its upward trend, driven by sustained consumer interest in SUVs and the introduction of new models catering to this demand. Automakers are likely to focus on innovation and feature enhancements to attract a broader customer base.

The commercial vehicle sector is anticipated to experience a rebound, supported by increased infrastructure investments and economic activities. Government initiatives aimed at boosting infrastructure development are expected to stimulate demand for commercial vehicles, particularly in the construction and logistics sectors.

The electric vehicle market is poised for exponential growth, with projections indicating sales could reach 3 lakh units by FY 2025-26. As manufacturers ramp up production and expand their EV offerings, along with continued government support, the transition towards sustainable mobility is expected to gain significant traction. This surge will be driven by new model launches, improved charging infrastructure, and supportive government policies.

(Source: Siam, Reuters, Reuters, Zee Business, The Times of India, Reuters)

Government Initiatives

The Government of India actively promotes foreign investment in the automotive sector, permitting 100% Foreign Direct Investment (FDI) under the automatic route. This liberalised policy framework, alongside strategic initiatives, is designed to bolster domestic manufacturing, accelerate electric vehicle (EV) adoption, and develop a robust automotive ecosystem. Recent key initiatives include:

• PM E-DRIVE Scheme: The Government of India continues to push for rapid electric vehicle adoption and industry growth. The PM E-DRIVE Scheme, effective from October 2024 to March 2026 with a budget of ?10,900 crore ($1.3 billion), is designed to boost EV uptake, expand charging infrastructure, and promote self-reliant domestic manufacturing. This initiative

supports multiple EV segments, including commercial vehicles and e-buses, and encourages local production. Indias EV market is expected to grow substantially, with annual electric vehicle registrations increasing by over 25% in 2024, and targets set for supporting nearly 2.9 million EVs, including e-buses, trucks, ambulances, and public charging stations, by 2028. These measures are intended to position India as a key global player in the clean mobility sector.

• Electric Mobility Promotion Scheme (EMPS) 2024: Implemented for a four-month period from 1st April 2024 to 31st July 2024, with a total outlay of ?500 crore. This fund-limited scheme, approved by the Ministry of Heavy Industries, targets the acceleration of EV adoption by supporting the procurement of 372,215 electric vehicles, primarily comprising e-2 wheelers (333,387 units) and e-3 wheelers (38,828 units, including rickshaws, e-carts, and L5 category vehicles). This scheme aims to maintain momentum in EV sales following the conclusion of previous subsidies.

• Production Linked Incentive (PLI) Scheme for Automobile and Auto Components: In January 2024, the Ministry of Heavy Industries extended the tenure of this critical scheme by one year. The incentive will now be applicable for a total of five consecutive financial years, extending benefits until 31st March 2028. This extension aims to further boost domestic manufacturing of Advanced Automotive Technology (AAT) products, encourage deep localisation, and attract investments across the automotive value chain, particularly for electric and hydrogen fuel-cell components.

• New EV Incentive Scheme & Budgetary Allocation:

The Ministry of Heavy Industries (MHI) has indicated plans to introduce a new scheme to incentivise electric vehicle purchases and enhance charging infrastructure, aligning with the interim budgets emphasis on eco-friendly transportation. A significant allocation of $321.5 million (?2,671.33 crore) for FY 2024-25 is designated for utilisation in this regard. This new scheme is expected to further promote green mobility and strengthen the EV ecosystem in the country.

(Source: IBEF)

COMPANY OVERVIEW

Autoline Industries Limited (referred to as Autoline or the Company) is a well-established and integrated Indian engineering company, deeply embedded in the automotive ancillary sector. Since its inception as Autoline Pressings in January 1995 and subsequent incorporation as Autoline

Autoline Industries Limited

Stampings Private Ltd. on December 16, 1996, which eventually evolved into the current publicly listed entity, the Company has consistently grown to become a leading manufacturer and supplier of critical auto components.

The Companys core business revolves around the precision manufacturing of sheet metal components, sub-assemblies,

and complex assemblies. Its robust operational footprint spans over ten state-of-the-art manufacturing facilities strategically located across key industrial hubs in India, including Pune, Dharwad, Uttarakhand, Karnataka, Tamil Nadu, and Gujarat. These facilities are characterised by extensive automation, strict adherence to safety protocols, and rigorous quality monitoring.

Concept, Style, Design, Analysis & Engineering Services

Automotive engineering services for product design, development and validation

Medium and Large Stamped Assemblies

Complete Floor and Door Assemblies, Sub Assemblies Load Bodies and Cross Beams Exhaust Systems Tubular Assemblies and Sheet Metal Stampings

The Companys key business divisions are listed

Tool Room Press tool design, formability analysis Press tool manufacturing, jigs & fixture Tools tryouts

Mechanical Assemblies

Pedal Control System Parking Brake

Door Hinges, Jack Assemblies Cab Stay and Cab Tilt

Autoline Industries Limited boasts a diverse and comprehensive product portfolio, catering to a wide spectrum of the automotive industry. This includes small mechanical assemblies such as foot control modules, parking brakes, door hinges, and cab stay and tilt mechanisms, with in-house developed designs and advanced proprietary technologies involving complex manufacturing processes. Autoline Industries Limited also has product portfolios which involve more complex in-house developed designs, technological advancements and processes like exhaust systems, load bodies, tubular structures, fabrications, and skin panels. The Companys capability ranges from producing parts weighing as little as 1 gram to complete assemblies weighing up to 400 kilograms, serving various vehicle segments including passenger cars, sports utility vehicles (SUVs), commercial vehicles, two-wheelers, three-wheelers, and tractors. Beyond automotive, the Company also addresses specific requirements in non-automotive segments and hospital equipment.

A significant strength of the Company lies in its advanced design and engineering capabilities. Equipped with in-house state of the art design centres in Pune, along with a dedicated commercial tool room, Autoline Industries Limited provides comprehensive services encompassing

product engineering, re-engineering, sheet metal-BIW design, reverse engineering, and the development of jigs and fixtures. This integrated "Art to Part" approach enables rapid prototyping and efficient transition from concept to mass production.

The Company maintains a strong market position as a key vendor to a prestigious clientele of global Original Equipment Manufacturers (OEMs). Its client roster includes industry leaders such as Tata Motors, Volkswagen, Ford, General Motors, Renault-Nissan, Daimler India, Cummins, Ashok Leyland, Mahindra, Fiat, and Tata Hitachi. This extensive client base underscores the Companys reliability and its ability to meet diverse international manufacturing standards.

OPERATIONAL PERFORMANCE

During FY 2024-25, the Company has implemented several key initiatives as outlined below :

Autoline Industries Set to Launch Advanced Manufacturing Facility in Chakan, Pune

In a strategic move that aims to redefine standards in automotive manufacturing, the Company is poised to unveil its cutting-edge facility in Chakan, Pune. Designed around

the principles of Industry 4.0, the new plant will integrate advanced automation, real-time data analytics, and smart manufacturing systems to significantly boost production efficiency and quality.

This ambitious initiative underscores the Companys commitment to innovation and excellence, positioning the company at the forefront of the Indian automotive sector. The Chakan facility not only enhances manufacturing capabilities but also reinforces Autolines vision to lead with technology-driven solutions that meet evolving customer and market demands.

Company Unveils Advanced Robotic Press Line at Chakan Facility

In a significant leap towards manufacturing excellence, the Company has installed a state-of-the-art robotic press line at its Chakan facility, featuring press capacities ranging from 1000T to 500T having robotic automation. Designed to address a wide spectrum of manufacturing requirements, the line boasts large bed sizes of 3700 mm x 2000 mm, reinforcing the companys focus on scalability, flexibility, and precision engineering.

This high-tech addition, backed by a capital investment of ?60 Crores, is more than just an infrastructure upgrade ? it is a clear testament to Autolines unwavering commitment to technological innovation and future-ready production systems.

The new press line is housed in a purpose-built 60,000 sq. ft. facility within the existing Chakan plant. Operations commenced in manual mode in April 2025, with full automation set to be achieved by September 2025. This swift execution reflects the companys agility and preparedness to seize evolving market opportunities.

Driving Revenue Growth through Strategic Expansion

The companys newly developed Chakan facility is poised to become a key revenue driver, with projected earnings of ?250 Crores over the next three years. This projection underscores the companys strategic foresight and confidence in leveraging advanced manufacturing capabilities to fuel sustainable growth.

The Company is long recognised for its innovative automotive solutions, and will lead this growth trajectory by capitalising on existing relationships and forging new collaborations with industry leaders. With strong engagement from OEM giants such as Tata Motors, Mahindra, Hyundai, and Volkswagen, the facility opens doors to an expanded client base and long-term partnerships.

This development has strengthened the Companys position as a preferred supplier in the Indian automotive ecosystem and reflects its commitment to integrating technology and business growth for scalability and resilience in a dynamic market landscape. As a result, Autoline Industries has attracted new customers and improved production line efficiency and quality, with recent investments and automation leading to a 30% increase in efficiency for new and existing passenger vehicle models and robust growth in orders from leading OEMs.

CAPITAL EXPENDITURE AND INVESTMENTS

Robotic Weld Line Commissioned for Tata LPT New-Gen Facelift Program

In line with its proactive approach to customer alignment and production scalability, the Company has initiated a robotic weld line to support the upcoming Tata LPT new-generation facelift vehicle, which is set to replace the current model.

This enhancement anticipates significant volume growth and includes:

Dedicated robotic weld lines for four major assemblies

Increased production consistency and output quality

Significant reduction in manual intervention and manpower costs

The move reinforces Autolines commitment to automation-led manufacturing, ensuring the capability to meet OEM expectations on quality, cost, and delivery. This project also strengthens the companys strategic role in Tata Motors next-generation commercial vehicle programs by October 2025.

Enhanced Weld Shop Capabilities Strengthen Manufacturing Backbone

Complementing the expansion of its tandem press line, the Company has made significant strides in upgrading its weld shop capabilities, particularly at its Sanand plant. Over the past year, the company has implemented advanced welding technologies that have dramatically improved production throughput and operational efficiency.

As part of this strategic upgrade, the Sanand facility now features:

25 Spot Welding Robots

6 MIG Welding Robots

19 Spot Welding Cells

Completed within the last 12 months, this expansion underscores the Companys proactive investment in automation and capacity building, aligning with the growing demands of its OEM partners.

The enhanced weld shop lays a strong foundation for increased output, enabling the company to meet rising customer demand while maintaining high standards of quality and consistency. This move reaffirms Autolines commitment to operational excellence and future-ready manufacturing.

Advanced Robotic Welding Expansion for Sierra Program

As part of the upcoming Sierra business ramp-up, the Company is set to implement the next level of robotic welding automation at its Sanand facility. This expansion further strengthens the companys position as a technologically advanced manufacturing partner for high-performance vehicle programs.

The new automation infrastructure will include:

20 Spot Welding Robots 2 MIG Welding Robots 10 Advanced Welding Cells

These additions are designed to meet the complex assembly requirements of the Sierra platform, ensuring precision, repeatability, and high-volume output while maintaining world-class quality standards.

The integration of these robotic systems reflects the Companys continued investment in smart manufacturing capabilities, reinforcing its ability to support electric and IC vehicle platforms at scale, and its strategic alignment with OEM partners next-generation mobility goals.

Implementation and Upgradation of SAP HANA in FY 2025-26

As part of its digital transformation roadmap, the Company has initiated the implementation of SAP S/4HANA with effect from June 1,2025. This upgrade represents a significant leap in enterprise resource planning (ERP), aimed at streamlining operations, enhancing data visibility, and enabling real-time decision-making across business functions.

The move to SAP S/4HANA will:

Replace legacy ERP systems with a centralised, integrated platform and improve data consistency and transparency across departments

Enable faster reporting, predictive analytics, and process automation

Strengthen supply chain management, finance, and production planning

The upgrade is aligned with the Companys broader Industry 4.0 initiatives and reflects its commitment to leveraging technology for agility, scalability, and operational excellence.

This strategic investment is expected to drive efficiency, compliance, and better alignment with OEM partners, while supporting the companys continued growth and diversification.

Embracing Industry 4.0 Principles for Future-Ready Manufacturing

At the heart of the Companys new Chakan facility lies a steadfast commitment to the transformative principles of Industry 4.0?the seamless integration of digital technologies with traditional manufacturing.

By adopting advanced solutions such as robotics, AI-driven automation, and real-time data analytics, the Company is setting new benchmarks in operational excellence. These technologies enable the company to:

Minimise production lead times and optimise resource utilisation

Consistently enhance product quality

This forward-thinking, holistic approach not only drives manufacturing efficiency but also ensures that the Company remains at the forefront of technological innovation in the rapidly evolving automotive industry. As a result, the company is well-positioned to meet the dynamic needs of global OEMs and shape the future of mobility manufacturing in India.

Sustainable Energy Initiative: 6.5 MW Open Access Solar Installation

As part of its ongoing commitment to sustainability and cost-efficient operations, the Company is installing a 6.5 MW open access solar power system. This strategic move is aimed at significantly reducing the Companys carbon footprint while ensuring long-term energy cost savings.

The solar installation will cater to approximately 80% of the energy requirements of the Pune plant.

This initiative is aligned with the Companys ESG goals and reflects its proactive approach towards renewable energy adoption.

It is expected to deliver substantial reductions in conventional energy usage and emissions, reinforcing the Companys position as a responsible and forward-thinking company in becoming a manufacturing leader.

Alignment with global standards and practices Commitment to Sustainability and Innovation

The Company is dedicated to strengthening its position as a responsible and future-ready organisation by embedding sustainability and innovation at the core of its operations. This commitment is reflected in our proactive approach to environmental stewardship, resource efficiency, and social responsibility, all aligned with global standards.

Our strategy is centred on three key pillars:

Governance and Reporting: We have formalised our sustainability efforts by completing our second-year Business Responsibility and Sustainability Report (BRSR). Our reporting framework is now being aligned with the Global Reporting Initiative (GRI) standards, ensuring that our sustainability disclosures are transparent and adhere to international best practices.

Environmental Stewardship: We are actively focused on reducing our environmental footprint. Our key initiatives include for the current Financial Year and stepping towards Global reporting compliance standards :

o Energy Efficiency: We are minimising

energy consumption by adopting advanced manufacturing technologies and implementing solar initiatives to reduce energy requirements across our facilities.

o Waste Management: We are focusing on cross-site waste management, segregation, and reduction of waste sent to landfills.

o Monitoring and Traceability:

To ensure accountability and measure our progress, we are implementing a dedicated platform and integrating it with SAP HANA to provide continued, real-time monitoring of our sustainability initiatives.

Social Responsibility and Diversity: Beyond our environmental commitments, we are focused on creating a more inclusive and equitable workplace. Our diversity and inclusion efforts, which commenced last year and are now being scaled up, include skill training and a clear focus on integrating women and people with disabilities (PwDs) into our workforce. Additionally, our ongoing commitment to CSR implementation continues to expand its positive impact on our communities.

Capital Raised for Strategic Growth

To support its ongoing expansion, the Company has raised:

? 43.18 Crores through Compulsorily Convertible Debentures (CCDs) (now converted into equity shares) from new investors

? 22.50 Crores through share warrants (now converted into equity shares) from the promoter group

These funds are strategically allocated to expand capacity in order to meet increasing demand from key OEMs such as Mahindra, Fiat, Hyundai, and Autoline Industries Limiteds own product lines.

The expansion project is completed in Q4 FY 2024-25, with production commencement in Q1 FY 2025-26, further strengthening the Companys ability to serve both domestic and international markets with agility and scale.

FINANCIAL OVERVIEW

Particulars	FY 2024-25	FY 2023-24	YoY Change
Revenue	65692.71	65074.40	0.95%
Operating Expense	58789.35	59550.21	1.27%
PBT	1986.00	1942.30	2%
PAT	1904.48	1878.56	(2.7%)
EBIDTA Margin	10.30%	8.04%	227BPS

FINANCIAL PERFORMANCE REVIEW

In FY 2024-25, the Company delivered a stable performance. The Company has witnessed a surge in demand for passenger vehicles in the IC, EV, and CNG segments, while the CV segment recorded a marginal slowdown. Revenues moderated in FY 2024-25 due to raw material price reduction. However, continued focus on cost reduction and debt reduction plans has helped in improving margins.

On a standalone basis, the Earnings before interest, depreciation, exceptional items and income tax (EBIDTA) during FY 2024-25 stood at ? 6,767 Lakhs compared to ? 5,232 Lakhs in the last year. PAT after exceptional items stood at ? 1,904 Lakhs compared to ? 1,879 Lakhs the previous year. As a result of overall marginal volume growth, improved product mix, improved productivity, and cost-efficiencies along with automation, EBITDA margins and PAT margins have improved. The Basic and Diluted Earnings per Share stood at ? 4.75 and ? 4.51, respectively, registering an increase of 0.22%.

[Placeholder for rationale for the line items with 25%> YoY change]

Key Financial Ratios

For ratio analysis on a standalone basis please refer note no. 51 of standalone financial statement and for consolidated basis please refer note no. 53 of consolidated financial statement.

STRATEGICAL OUTLOOK

1. Business Growth & Diversification

The Company has developed deep strategic partnerships with Tata Motors, Mahindra, Ashok Leyland, and Hyundai while targeting new business with MG, Maruti, and emerging EV OEMs. The Company has expanded high-margin product lines, including EV components, lightweight chassis solutions, and precision assemblies. The Company has to explore international opportunities in component supply for Tier-1 and OEMs in Africa, ASEAN, and the EU under "Make in India".

2. Operational Efficiency & Cost Leadership

The Company is driving cost reduction through real-time CTC dashboards, line balancing, and process standardisation. It focuses on improving plant efficiency with better planning, maintenance discipline, and de-bottlenecking of rework zones. The initiatives, such as implementing zero-leakage controls, mandatory issuance protocols, and daily FG/ WIP/RM monitoring across plants, will help to achieve inventory management.

3. Digital & Technological Transformation

The Companys digital transformation drives operational efficiency, transparency, and sustainability. By investing in key technology pillars, the Company has created a fully integrated ecosystem that optimises its manufacturing processes.

• Integrated Production and Reporting: Full integration across all core SAP HANA modules (FI, CO, MM, SD, PP) creates a seamless, real-time data flow. This integration provides real-time dashboards and audit trails, ensuring operational transparency and enabling precise monitoring of sustainability initiatives.

Smart Manufacturing: The Company has

implemented smart manufacturing cells, including predictive maintenance and automated quality checks, to boost throughput and significantly reduce rejection rates.

Proactive Operations with AI/ML: The Company deploys AI-driven models for real-time pricing, dynamic scheduling, and proactive vendor management, allowing for smarter, faster decisions across the value chain.

4. Financial Strategy & Capital Discipline

The Company is focusing on debt reduction and has a target of near-zero debt by further optimising working capital and completing the use of internal accruals and subsidiary funds. The credit ratings of the Company have improved at least by 7 notches since the last couple of financial years, which has strengthened balance sheet health to improve credit standing and reduce financing costs. For Capex planning, the Company has calibrated investments in critical automation and customer-specific tooling with strong ROI monitoring.

5. Governance, Compliance & Risk Management

The Company has strengthened its internal control system by continuing to enforce Maker-Checker- Reviewer mechanisms for all commercial decisions. The Company has a robust compliance structure, including statutory and ESG compliance. It has timely adherence to SEBI, GST, MSME, and CSR obligations; it integrates ESG practices into supplier code and plant operations. The Company has Audit preparedness, and it proactively addresses GSTR mismatches, statutory dues, and implements SAP-based reconciliation tools.

6. People & Capability Building

The Company invests in capability building for Plant Heads, Quality Leaders, and Digital Champions, which boosts the leadership development within the organisation. The Company drives an accountability culture where "no initiative means redundancy" is embedded at all levels. It deploys Deploy right people at the right roles; reduces excess manpower in rework, inspection, and contractual layers.

7. Future Readiness

I n its endeavour to participate in the EV ecosystem, the Company has Scale readiness for EV platform components with dedicated lines, quality certifications, and R&D alignment. The Company ensures quarterly performance reviews and transformation updates at the EC and Board levels.

RISK MANAGEMENT

To safeguard business operations, the company

employs a comprehensive risk management framework.

This framework monitors and addresses both internal and external risks, proactively identifying new threats while mitigating existing ones. Key business risks and their mitigation measures are detailed below:

Risks Identified	Rationale for identifying the risk.	In case of risk, approach to adapt or mitigate	Financial implications of the risk (indicate positive or negative implications)
Energy Management & Transition	Autoline has 6 plants across the country, with one additional plant starting operations from the current financial year. Energy being a major cost item, escalation in energy prices is a risk. The cost of electricity and energy breakdown poses risks for the Company. We are actively seeking ways to become more energy efficient, keeping this expansion in mind.	We are working on proposals to de-risk our energy costs through investments in Solar power projects. The power from these will reduce our overall energy costs. This initiative aims to mitigate the environmental impact and ensure a more sustainable and reliable energy solution.	Positive: Adopting clean energy instead of the grid to an extent will help reduce our Expenses towards power.
Employee Health and Safety	It becomes critical, due to the nature of work on our shop floor, that employees and workers are safeguarded from injuries at all times.	We plan to adopt a strict approach, with zero tolerance towards safety breaches. To train the employees, we have introduced Gurukul in our premises, wherein they undergo regular safety training. To ensure the health and well-being of employees, Autoline has also implemented annual check-ups and counselling sessions. In compliance with the Factories Act, a doctor is provided at the factory, and group health insurance is also covered.	Negative: Impact on the brand name and morale of the employees and workers.
Product Life Cycle Management	The Company is adding new product lines to cater to specific customer needs. Unless the products developed are in line with customer requirements, there is a risk of non-acceptance.	We plan to commence development of products only after thorough R&D.	Negative: Intensive initial investment in developing a product.
Supply chain sustainability and reporting	There is a risk of vendors not complying with relevant laws and regulations applicable to them.	We have a robust quality control mechanism and vendor onboarding in place, in which we seek to include the vendors compliance as well.	Negative: Enabling smooth operations of the Company.

 

Risks Identified	Rationale for identifying the risk.	In case of risk, approach to adapt or mitigate	Financial implications of the risk (indicate positive or negative implications)
Data Privacy	Robust data privacy policies and procedures demonstrate good governance. Our data privacy policies reflect our transparency, accountability, and ethical conduct. However, the Company is handling sensitive information of our customers, mishandling of which poses a risk.	At Autoline, there are mechanisms in place to minimise data breaches. Our comprehensive IT security framework incorporates strong firewalls, restricted access mechanisms, and other safeguards to protect against data breaches.	Negative: The financial consequences of data breaches at operational or financial levels can be substantial. Having optimum checks in place helps us avoid that cost.
Human Rights and	The automotive parts	We seek to:	Negative: Human
Labour Practices	industry has operations which inherently involve potential risks to Human Rights. Identifying and assessing human rights risks throughout the supply chain is crucial.	Ensure compliance with labour laws, including wages, working hours, and safety conditions Implement measures to prevent and address forced labour and child labour across the supply chain Creating inclusive workplaces free from discrimination	rights violations can severely damage a Companys credibility and lead to financial penalties. In extreme cases, these violations can result in significant business losses.

ENVIRONMENT, OCCUPATIONAL HEALTH, AND SAFETY (EHS)

The Company upholds "Safety First" as a paramount principle, demonstrating an unwavering commitment to safeguarding the health, safety, and security of its workforce across all operational facets. A robust and well-defined Environment, Health, and Safety (EHS) framework is deeply integrated into every level of the organisation, fostering a pervasive culture of strict adherence to safety standards, from the production floor to executive leadership. To ensure the continuous enhancement of employee capabilities, the Company regularly implements training and awareness programs. These initiatives are designed to elevate skill sets, impart the latest industry knowledge, and enable employees to execute their responsibilities with both dedication and the highest safety protocols.

At its manufacturing facilities, the Company consistently meets and exceeds the highest safety standards, a commitment reflected in its stellar industry track record for maintaining exceptionally safe operating conditions. Proactive safety measures include routine fire-fighting, safety, and mock drill training sessions for all operators and staff. Furthermore, comprehensive training on accident prevention, emergency response procedures, and robust emergency planning is provided, with a strong emphasis on the correct application of protective clothing and equipment.

To address specific health and safety concerns prevalent in its industry, the Company ensures the continuous presence of paramedical staff and essential emergency medical equipment on-site. The EHS management approach systematically identifies and mitigates potential workplace risks through organised activities and meticulous procedure implementation, thereby significantly reducing accidents and minimising exposure to hazardous chemicals and conditions, culminating in a safer operational environment. A dedicated safety officer plays a pivotal role in cultivating a safety-oriented workplace through ongoing promotion of safety awareness.

The Company annually observes Safety Week, reaffirming its profound dedication to maintaining an exemplary safe workplace. Throughout the fiscal year, various focused training sessions were conducted by skilled and seasoned professionals. Key topics covered included First Aid, Behaviour-Based Safety, 5S principles, and comprehensive Workplace Safety. In addition to formal training, regular mock drills and safety-focused competitions were organised, encompassing all facets of well-being, including general health and specific workplace safety scenarios.

While the preparation of an Environmental, Social, and Governance (ESG) Report is not currently mandated for the Company, a proactive ESG preparedness audit has

been initiated to comprehensively assess its current standing. This strategic step underscores the Companys forward-looking intent to integrate ESG principles into its core operations in the upcoming years.

QUALITY

The Company nurtures a dynamic culture of continuous improvement, dedicated to upholding its strong reputation as a top-tier supplier. It achieves this through a relentless focus on elevating and maintaining rigorous quality control across all operations. The Companys manufacturing facilities leverage extensive automation where beneficial, strictly follow safety protocols, and meticulously monitor quality benchmarks. The Company is always enhancing its quality system to align with global standards, guaranteeing it meets every customer quality requirement and delivers perceived quality right at the workstation, thanks to integrating "poka-yoke" methods to proactively prevent any issues.

The Company has proudly earned the IATF 16949 QMS certification, developed by the International Automotive Task Force (IATF) members. Beyond that, it holds various other quality accolades, including certifications in TQM and additional QMS frameworks. Its comprehensive portfolio of quality system certifications spans TS16949, OHSAS 18001, ISO 14001, Formal Q (Volkswagen), QSB (General Motors), MONOZUKURI & ASES (Renault-Nissan), and Formal Q (Ford).

Furthermore, the Company implements a range of additional quality control measures. These include boosting quality awareness, providing training, and ensuring the full involvement of all shop floor team members to hit its quality targets. It also conducts regular preventive maintenance on its dies and other machinery, crucial for producing high-quality parts. The companys commitment extends to regularly reviewing supplier quality performance and maintaining clear escalation procedures. Finally, it consistently invests in technological upgrades to ensure product quality remains consistent, and it continuously strives to improve product variety, quality, and efficiency, all with the ultimate goal of boosting client satisfaction.

INTERNAL CONTROL SYSTEMS

The Company has established a comprehensive internal control system, tailored to the size and nature of its business. It has well-defined policies and procedures, covering the design, implementation, and maintenance of robust internal financial controls. External auditors conduct internal audits across all facets of the business based on audit programs established by the Audit Committee. The Audit Committee quarterly reviews and addresses audit reports in the presence of auditors.

The Company prioritises optimal utilisation of resources and ensures accurate financial reporting, maintaining strict compliance with laws and regulations. The Board annually prepares and approves detailed annual and capital budgets for all of its functions, monitored closely by the committee. Furthermore, by leveraging modern ERP systems and ongoing upgrades, the Company strengthens operational efficiency and ensures cost-effectiveness across its operational controls.

HUMAN RESOURCES

The Company regards its employees as the fundamental bedrock of its success and long-term business sustainability. Its human resource management is a dynamic and ongoing process, consistently integrating diverse methodologies to achieve optimal performance and unlock the full potential of its workforce. During the fiscal year under review, the Company implemented several strategic initiatives specifically designed to enhance employee morale, ensure their welfare, and cultivate a highly conducive work environment.

The Company ensures a comprehensive onboarding experience for new employees, beginning with pre-joining health check-ups and the provision of essential joining kits. This is immediately followed by support for continuous training aimed at enhancing their skills and capabilities. To foster exemplary leadership, the Company organises targeted seminars and training programs for its Senior Management team, led by both internal and external professionals. Recognising the broad importance of financial acumen, an exclusive "Finance for Non-finance" training session was hosted, delivered by highly qualified and experienced professionals, to raise awareness of this essential aspect of daily life.

Beyond this, the Company facilitates a wide array of training sessions encompassing both technical and behavioural aspects, conducted by expert trainers. It actively promotes internal skill-sharing sessions, where personnel impart training in their respective fields, fostering invaluable knowledge exchange, information dissemination, and personal development among employees. Currently, the Company is revitalising and redesigning its Gurukul training facility. This revamped facility will play a crucial role in preparing new hires and contract workers before their deployment in manufacturing facilities, while also serving to enhance the skills of existing employees.

Concurrently, the Company has implemented a robust Performance Management System (PMS), aiming to cultivate a performance-oriented culture across the entire organisation. To maximise employee potential and welfare, the Company has established a comprehensive suite of HR

policies, including: Reward & Recognition, Advance Salary, PMS, Star Award, Attendance, Employee Health Benefit Scheme, Accident Policy, and the Death Benevolent Fund. Beyond the self-funded Medi-claim program, known as the Autoline Employees Health Benefit Scheme, The Company actively sponsors and organises various programs such as annual health check-ups, birthday celebrations, sports events, and cultural gatherings, further contributing to employee well-being and engagement.

Representatives from the Human Asset Division (HAD) actively engage with employees through diverse forums and committees, fostering transparency within the workplace culture. Looking forward, the Company is strategically cultivating a pool of internal trainers who will deliver tailored training programs aimed at continuously enhancing employee skill sets. Additionally, the Company has introduced Balanced Scorecards/KRAs to closely monitor individual employee performance, thereby fostering a culture of performance-driven excellence throughout the organisation.

As of March 31,2025, the Companys average total employee strength stood at 923.

CAUTIONARY STATEMENT

The narrative within this Management Discussion and Analysis includes forward-looking statements relating to, among other things, the execution of strategic plans, future business developments, and economic performance. While these statements reflect the Companys assessment and expectations for the future direction of its business, numerous risks, uncertainties, and other unforeseen factors could cause actual outcomes to differ significantly from these expectations. These factors include, but are not limited to, general market, macroeconomic, governmental, and regulatory trends, fluctuations in currency exchange and interest rates, competitive pressures, technological advancements, changes in the financial standing of third parties engaged with the Company, legislative changes, and other significant factors that could influence the Companys business and financial results. AIL undertakes no obligation to publicly update any forward-looking statements to reflect future or likely events or circumstances.