Axtel Industries Ltd Management Discussions

This section shall include discussion on the following matters within the limits set by the listed entitys competitive position:

a) Industry Structure and Developments:

Axtel Industries Ltd. is engaged in manufacturing custom-designed food processing plants and machinery, tailored to the specific requirements of its clients. The company is a leading supplier of high-quality process engineering equipment and turnkey systems to the food and related industries, delivering solutions that meet the highest standards of quality, design and performance. Axtel manufactures a wide range of process plants and equipment, supporting diverse applications across the industry. The companys growth is closely linked with the steady expansion of the food processing sector. A brief profile and outlook of this industry is given below.

• Indian Food and Food Processing Industry

Indias food and food processing industry continues to register steady growth, driven by rising incomes, changing lifestyles, and a growing preference for packaged and processed foods. With one of the worlds largest populations and a young demographic profile, India offers strong domestic demand and ample opportunities for value addition in food processing.

Multinational corporations and large Indian companies are expanding their operations and investments in this sector, encouraged by supportive government policies and increasing consumer awareness of quality and hygiene standards. Modernisation of processing facilities and the adoption of advanced machinery are key focus areas for both established players and new entrants. India is also strengthening its position as a major exporter of processed foods, particularly in segments like spices, ready-to-eat products, and health foods. This rising export demand further fuels the need for reliable, high-quality process equipment. The combination of population advantage, higher disposable incomes, export opportunities and the growing presence of organised players ensures a positive outlook for the industry and sustained demand for modern food processing solutions.

• Global Food and Food Processing Industry

Globally, the food and food processing industry is witnessing steady growth, supported by rising population, changing consumption patterns, and increased focus on food safety and quality. The demand for modern, efficient and hygienic food processing equipment is on the rise as producers strive to meet evolving consumer expectations and stringent regulatory standards.

Current geo-political dynamics are also creating opportunities for India. Ongoing global uncertainties and shifting relations between major economies like the USA, Russia and China are prompting companies to diversify supply chains and explore alternative sourcing bases. India, with its skilled workforce, cost advantages and established engineering capabilities, stands to benefit as multinational companies seek reliable partners outside Europe and the USA to optimise costs and capital investments while staying competitive.

Axtel is well positioned to support global food companies and large local players as they expand capacity, upgrade technology and shift sourcing to trusted partners in Asia. The company remains committed to delivering world-class process solutions that help its clients maintain efficiency, quality and competitiveness in a dynamic global market.

• Developments:

Create new markets quickly through products based on technology

Enhance growth by reaching new customers, deepening the customer experience and allowing them to dynamically mange pricing Increase profitability by altering operating cost structures through greater process automation Adopt business models that increase asset efficiency and long-term competitiveness

b) Opportunities and Threats:

Opportunities: New elements involving new ways with understanding clients and exploring new markets and business models shall open new opportunities for us to build strategic relationship with clients. Our reliability and efficiency of the equipment and effective service are key factors for success in this highly competitive industry.

Threats: The Company has developed and implemented a risk management framework that includes identification of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company and by adopting various factors such as risk identification, impact assessment, risk evaluation, risk reporting, risk disclosures, risk mitigation and reporting.

c) Segment-wise or product-wise performance:

The Company has only one segment of manufacturing food processing instruments / equipments.

d) Outlook:

The outlook for business is positive as the company continue to remain focused on risk management and mitigation. Total turnover during the year 2024-25 was Rs. 17,855.87 lacs compared to Rs. 22,333.30 lacs of previous year 2023-24 which shows decrease of Rs. 4477.43 lacs (20.05%). There is profit of Rs. 1,802.52 lacs (after tax) during the year 2024-25 compared to profit of Rs. 3,213.34 lacs (after tax) during the year 2023-24

e) Risks and concerns:

Commodity Price Risk: Risk of price fluctuation on basic raw materials like steel, components, power as well as finished goods used in the process of manufacturing.

Uncertain global economic environment – slow growth in global economy: Impact on demand and realization of exports of food processing plant and machinery.

Interest Rate Risk: Any increase in interest rate can affect the finance cost

Foreign Exchange Risk: Any volatility in the currency market can impact the overall profitability

Human Resources Risk: Your Companys ability to deliver value is dependent on its ability to attract, retain and nurture talent. Attrition and non-availability of the required talent resource can affect the overall performance of the Company Competition Risk: Every company is always exposed to competition risk from European Countries. The increase in competition can create pressure on margins, market share etc Compliance Risk: Increasing regulatory Requirements: Any default can attract penal provisions Industrial Safety, Employee Health and Safety Risk: The engineering industry is exposed to accidents and injury risk due to human negligence.

f) Internal Control Systems and their adequacy:

The Company has strengthened its internal control and audit aspects by appointing outside agency for internal audit of certain important aspects of operations, apart from usual transactional verifications. There are adequate checks and controls to ensure compliance of various statutes.

g) Discussion on Financial performance with respect to operational performance:

Total turnover during the year 2024-25 was Rs. 17,855.87 lacs compared to Rs. 22,333.30 lacs of previous year 2023-24 which shows decrease of Rs. 4477.43 lacs (20.05%). There is profit of Rs. 1,802.52 lacs (after tax) during the year 2024-25 compared to profit of Rs. 3,213.34 lacs (after tax) during the year 2023-24.

h) Material developments in Human Resources / Industrial Relations front, including number of people employed:

The Company considers its employees as its valuable assets. The Company focuses on building an organization through induction and development of talent to meet current and future needs. Various HR initiatives have been taken to align HR policies of the Company with the growth projections of the company.

During the year under review, the Company continued to have cordial and harmonious relations with its employees and total number of employees on payroll are 228.

i) Details of significant changes in financial ratio:

Details of significant changes as compared to the immediately previous financial year in key financial ratios, along with detailed explanations therefor, including:

Particulars	F.Y. 2024-25	F.Y. 2023-24
(i) Debtors Turnover	4.34	4.01
(ii) Inventory Turnover	1.96	2.21
(iii) Interest Coverage Ratio	0.00	0.00
(iv) Current Ratio	2.51	2.06
(v) Debt Equity Ratio	0.53	0.73
(vi) Net Profit Margin (%)	10.09	14.39

j) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

Particulars	F.Y. 2024-25	F.Y. 2023-24
Return on Net Worth	0.15	0.29

Disclosure of Accounting Treatment:

The financial statements for the year ended 31^st March, 2025 have been prepared as prescribed in accounting standards and there is no change in treatment of the said accounting standards. Therefore, no explanation by the management is required for the same.

By Order of the Board of Directors

Date: 16.07.2025	Ajay Naishad Desai	Ajay Nalin Parikh
Registered office:	Executive Director	Executive Director
Vadodara-Halol Highway,	DIN: 00452821	DIN: 00453711
Baska, Panchmahal-389350, Gujarat