Automobile Corporation Of Goa Ltd Management Discussions

• Gross FDI inflows remained substantial, with the services sector leading at 19.1% share in H1 FY2025.

Prices and Inflation

• Headline inflation averaged below 5% in 2024, within RBI?s target range.

• Food inflation saw spikes due to weather disruptions, but core inflation softened.

• Administrative measures like stock limits and buffer stocks were used to control food price volatility.

Investment and Infrastructure

• Infrastructure investment continued to rise, with significant progress in railways, aviation, ports, and urban infrastructure.

• Power sector: Increase in non-fossil fuel capacity; digital connectivity expanded rapidly.

• Jal Jeevan Mission: Households with piped water supply rose from 3.2 crore (2019) to 15.3 crore (Nov 2024).

• Urban development: 1.18 crore houses sanctioned under PMAY-Urban; metro rail systems expanded to 23 cities.

Industry and Services

• Industry: Cement and steel production grew, supporting infrastructure and construction.

• Services: Continued as the main growth driver, especially IT, finance, and public administration.

Agriculture and Food Management

• Agriculture: Maintained steady growth, aided by favorable monsoons and record Kharif production.

• Food management: Government interventions ensured food security and price stability.

Social Sector and Employment

• Financial inclusion: RBI?s Financial Inclusion Index improved from 53.9 (Mar 2021) to 64.2 (Mar 2024).

• Employment: Job creation improved in both rural and urban areas, with focus on skill development and empowerment.

Climate, Environment, and Medium-Term Outlook

• Renewable energy and climate adaptation efforts gained momentum.

• Deregulation and ease of doing business reforms were emphasized to unleash domestic growth drivers.

Indias economic trajectory remains optimistic, anchored by strong domestic demand, a growing industrial and services base, and progressive policy initiatives. With continued structural reforms, targeted investments, and a focus on inclusive growth, India is well on course to become a leading global economic powerhouse in the coming decade.

Automotive Industry Snapshot

Automobile Production Trends

Category	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25
Passenger Vehicles	34,24,564	30,62,280	36,50,698	45,87,116	49,01,840	50,61,164
Commercial Vehicles	7,56,725	6,24,939	8,05,527	10,35,626	10.67,504	10,32,645
Three Wheelers	11,32,982	6,14,613	7,58,669	8,55,696	9,96,159	10,50,020
Two Wheelers	2,10,32,927	1,83,49,941	1,78,21,111	1,94,59,009	2,14,68,527	2,38,83,857
Quadricycles	6,095	3,836	4,061	2,897	5,006	6,488
Grand Total	2,63,53,293	2,26,55,609	2,30,40,066	2,59,40,344	2,84,39,036	3,10,34,174

Automobile Domestic Sales Trends

Category	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25
Passenger Vehicles	27,73,519	27,11,457	30,69,523	38,90,114	42 18,750	43,01,848
Commercial Vehicles	7,17,593	5,68,559	7,16,566	9,62,468	9,68,770	9,56,671
Three Wheelers	6,37,065	2,19,446	2,61,385	4,88,768	6,94,801	7,41,420
Two Wheelers	1,74,16,432	1,51,20,783	1,35,70,008	1,58,62,771	1,79,74,365	1,96,07,332
Quadricycles	942	-12	124	725	725	120
Grand Total	2,15,45,551	1,86,20,233	1,76,17,606	2,12,04,846	2,38,57,411	2,56,07,391

Automobile Exports Trends

Category	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25
Passenger Vehicles	6,62,118	4,04,397	5,77,875	6,62,891	6,72,105	7,70,364
Commercial Vehicles	60,379	50,334	92,297	78,645	65,818	80,986
Three Wheelers	5,01,651	3,93,001	4,99,730	3,65,549	2,99,977	3,06,914
Two Wheelers	35,19,405	32,82,786	44,43,131	36,52,122	34,58,416	41,98,403
Quadricycles	5,185	3,529	4,326	2,280	4,178	6,422
Grand Total	47,48,738	41,34,047	56,17,359	47,61,487	45,00,494	53,63,089

COMPANY PERFORMANCE

Your Company?s Sales (with other income) for the financial year 2024-25 was Rs 67,562 lakhs as against Rs. 59,765 lakhs (net of taxes) in the preceding financial year. The Company?s Profit before tax during the financial year 2024- 2025 was at Rs.6,250 lakhs (before other comprehensive loss) as against profit of Rs.5,107 lakhs in the preceding financial year. Net profit after tax stood at Rs. 4,697 lakhs as compared to a profit of Rs. 3,742 lakhs in the preceding financial year. During FY 2024-25, your Company sold 7265 buses.

The commercial vehicle segment specially buses is poised for positive growth, driven by increased government investment in public transportation and electrification initiatives. Growth will be further supported by enabling policies such as the vehicle Scrappage policy, Production Linked Incentive (PLI) scheme, and a strong focus on infrastructure development to reduce logistics costs, along with EV-focused measures like FAME and the Payment Security Guarantee.

Segment Overview

The bus segment has maintained its dominance in contributing to your Company?s revenue and profit. Proportion of bus division?s revenue in the total revenue of the company clocked 90% during the year under review. Large portion of our workforce is operating in the bus segment at Goa. Revenue from Bus segment has grown sharply as compared to last year mainly due to increase in demand for the commercial vehicle passenger segment.

1. Segment Review and Developments

A. BUS SEGMENT

Revenue from product sales in Bus Segment increased by 15.81% at Rs. 59,197 lakhs (excluding taxes and other income) in FY 2024-25, as compared Rs. 51,115 lakhs in the preceding financial year. In FY 2024-25, 7265 buses were sold as compared to 6511 buses in preceding financial year which was an increase of 754 buses. Of the total 7,265 buses sold during the financial year 2024–25, 2,038 units were exported.

B. PRESSING SEGMENT

Sheet metal business follows the cyclicity of OEM?s business for which your Company is a key supplier. The segment is necessarily capital intensive and capacity utilization drives the profitability in this segment. Revenue from product sales (excluding taxes and other income) from this segment has decreased from Rs 7,306 lakhs (excluding taxes and other income in FY 2023-24), to Rs 6,876 lakhs in the given financial year because of reduction in raw material prices and corresponding reduction in selling price.

2. Technology Initiatives

Your Company is concentrating on building product and technical capabilities by enhancing its design processes using modern methodologies. We continuously benchmark our products against competitors offerings, ensuring we provide the best value proposition to our customers.

3. Entry into New segment

Your Company is making efforts to penetrate into bus body manufacturing of electric buses which would be the future technology in passenger mobility. Your Company focussing on higher tonnage buses to enhance price realisation per bus bodies.

4. Awards, Certification & Recognition

Your Company is accredited with IATF 16949 QMS Certification for its Goa, Jejuri and Dharwad Plants.

5. Risks, Opportunities and Threats

Risks and Concerns

Your company is undertaking a phased infrastructure upgrade aligned with projected future demand, ensuring scalability and operational efficiency. In addition, strategic investments are planned in key areas such as digitisation and sustainability. These initiatives aim to enhance process capabilities, drive operational excellence, and support long-term goals, including the transition towards net zero emissions.

Opportunities

With government?s increased focus on development of infrastructure including highways and Electric mobility, there would be an opportunity for growth in commercial vehicles and mass transportation solutions.

Your company is actively enhancing its product portfolio to align with evolving market needs by expanding into the school, staff and electric vehicle (EV) segments. This includes the introduction of new, contemporary designs aimed at offering a more diversified and modern product range.

Threats

The Company continues to encounter similar challenges this year. The growing presence of multinational players in the electric vehicle space, coupled with increasing collaborations between local bus body builders and foreign partners, poses competitive pressure on domestic OEMs—particularly in the rapidly emerging electric bus segment.

Furthermore, the disparity in GST rates between fully built vehicles and separately supplied bus bodies remains a barrier to the growth of OEM-supplied bus bodies.

In response, the Company is pursuing a strategy of product diversification to enhance value addition and boost sales. This approach is aimed at achieving economies of scale, thereby improving the allocation of fixed costs and strengthening overall competitiveness.

6. Internal Control System

The Company has adequate internal control systems in place and also has reasonable assurance on authorizing, recording and reporting transactions of its operations in all material respects and on providing protection and safeguard against misuse or loss of assets of the Company. The Company has in place, well documented procedures covering financial and operational functions commensurate with the size and complexities of the organisation. Some of the salient features of the internal control system in place are: -I. Following statutory and applicable Accounting Standards and Policies. II. Preparation of annual budget for operation functions and monitoring the same with actual performance at regular intervals. III. All assets are properly recorded and procedures have been put in place to safeguard against any loss or unauthorized use or disposal. IV. Internal audit department carries out periodic audit at all locations and functions. V. The observations arising out of internal audit are periodically reviewed at the Audit Committee meetings along with follow up action.

VI. Periodic presentations are made to the Audit Committee on various operational and financial risks faced by the company and action plans to mitigate the same. VII. Company has implemented system of Internal Financials Controls over Financial Reporting (ICoFR) and formed a three-member team for continuous assessment. VIII. Statutory Auditors of Company have conducted Test of Design (TOD) and Test of Effectiveness (TOE) under the purview of Internal Financial Controls over Financial Reporting (ICoFR) and found the same operating effectively.

7. Financial and Operational Performance

Company?s Total Revenue including Other Income (Excluding taxes) stood at Rs. 67,562 lakhs, as against Rs. 59,765 lakhs in the previous year. Correspondingly, profit before tax (after OCI) is Rs 6,299 lakhs as compared to profit of Rs. 4,980 lakhs. Earnings per equity share is Rs. 76.54 as compared to Rs. 63.02 in the last financial year.

Financial and Operational Performance:

	Percentage of Sales
Particulars	Year ended 31st March
Total Income (excluding taxes & including Other Income)	2025	2024
Expenditure:
Material (Including change in stock)	68.70%	68.17%
Employee cost	7.26%	8.05%
Manufacturing Expenses	14.09%	14.39%
Total Expenditure	90.05%	90.61%
Profit before Interest, Depreciation, Tax and OCI	9.95%	9.39%
Depreciation	0.68%	0.83%
Finance Cost	0.01%	0.01%
Profit before tax before OCI	9.26%	8.55%
Provision for Tax (net) before OCI	-2.35%	-2.12%
Other Comprehensive Loss (net of taxes)	0.05%	-0.16%
Profit After Tax after OCI	6.96%	6.27%

8. Human Resources

The Company?s innovative human resource management strategies supported its business growth in a challenging environment. The focus has been to create an environment where performance is rewarded, individuals are respected and employees get opportunities to realise their potential. The employee cost reduced to 7.26% of total revenue (net of taxes) notwithstanding mainly due to increase in sales value. The strength of permanent employees reduced to 433 as on 31st March, 2025 against 452 on 31st March, 2024. Industrial Relations with staff and workmen across the Plants at Goa, Jejuri and Dharwad continue to be cordial.

9. Financial Ratios

The Key Financial ratios of the company are given below with explanation in case of significant changes:

	2024-25	2023-24
Sr. No Type of Ratio	Ratio	Ratio	% Change	Reason for variance
(a) Current ratio	2.01	2.21	-9%
(b) Debt-equity ratio	0.34	0.28	19%
(c) Debt service/Interest service coverage ratio	744.40	661.43	13%
(d) Return on equity ratio	0.20	0.19	6%
(e) Net profit ratio	0.07	0.07	7%
(f) Inventory turnover ratio	12.56	11.72	7%
(g) Trade receivables (Debtors) turnover ratio	6.26	7.24	-14%	No significant change as per the guidance given by Institute of Chartered Accountant of India.
(h) Trade payables turnover ratio	5.90	7.00	-16%
(i) Net capital turnover ratio	3.31	3.42	-3%
(j) Return on capital employed / Return on net-worth	18.52%	18.23%	2%
(k) Return on investment	7.36%	7.26%	1%

Cautionary Statement

Statements in this Management Discussion and Analysis and Directors? messages describing the Company?s objectives, expectations and predictions may be ‘forward-looking statements? within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company?s operations include raw material availability and prices, demand and pricing by the Company?s major customers, changes in the Government regulations, Tax regimes, economic developments and other incSA idental factors.