Baroda Extrusion Ltd Management Discussions

Market Scenario

Indian Scenario: The Indian economy has exhibited remarkable resilience and robust macro-economic fundamentals despite global economic uncertainties. Prompted by strong growth in Q3 of FY 2024-25, This upward revision underscores increasing global confidence in Indias economic capabilities amidst a stable global growth forecast of 3 percent for 2024. Looking ahead, India is poised to ascend to the rank of thse third-largest economy by 2027 in terms of USD at market exchange rates, with its contribution to global growth expected to rise significantly over the next five years according to the IMF. Forecasts from international bodies such as the World Bank, IMF, OECD, and ADB further affirm positive growth prospects for India, projecting growth rates ranging from 6.1 percent to 6.7 percent for the fiscal year 2024-25.

Industry Structure: Baroda Extrusion Limited is the first Copper extrusion plant in India having excellent infrastructure and facilities in house. caters to a diverse range of industries such as automotive, defence & aerospace, electrical, electronics, home appliances, healthcare, lighting, telecommunications, and infrastructure. BEL is fully equipped with modern machineries which includes 900 mt. extrusion press, induction furnace of 1 M.T / Hr.25 nos. of heavy / medium / light draw benches and bright annealing furnace for copper coil. The Installed capacity of the plant is 3600 MT per annum. This reflects the companys commitment to innovation and quality across different sectors.

In FY 24-25, BEL achieved significant growth with a total production of 1714 tonnes across various wire, strip, and related products. This marked a notable increase of 7.93% compared to the previous fiscal year. Enamelled copper pipe/tube accounted for approximately 70% of the total production, underscoring BELs specialization in this core product. The remaining 30% included a diverse range of offerings such as enamelled copper strips, paper-covered copper wires and strips, submersible winding wires with varied insulation options, litzwires, bunched and braided wires, self-bonding wires, fiberglass-insulated wires and strips, as well as aluminium winding wires and strips.

BELs product portfolio encompasses Enamelled Copper Wire (ECW), Copper Rods, Copper Bus Bar/ Flats, Copper Tubes, Copper coils, Copper Sections and Profiles, Copper Billets and Mother Tubes and other copper products. This comprehensive range underscores BELs dedication to meeting the needs of original equipment manufacturers (OEMs) with tailored winding solutions.

Development & Modernization

Segment wise Performance: As there is no particular operational activity segment wise performance is not applicable.

Continuous Improvement and Customer Satisfaction: BEL has always been committed to continuous improvement in processes, product quality, and services. This commitment is bolstered by a highly interactive, customer-centric, and robust R&D team, which stands as a cornerstone of the companys strength. Over the years, BEL has introduced numerous innovative products, such as corona-resistant wires, setting a benchmark in the industry.

R&D Initiatives:

During the fiscal year 2024-25, our R&D team focused on the up-gradation, standardization, and maintaining consistency in the quality of our products. A strict adherence to the specifications and standards has been a top priority, ensuring that our offerings meet and exceed customer expectations. The relentless efforts in research and development have resulted in enhanced product reliability and performance, further solidifying our market position.

Embracing Automation:

In alignment with modern industrial trends, BEL has embraced automation, transforming our production facilities to meet Industry 4.0 standards. This transformation involves a series of strategic projects aimed at digitizing the existing manual controls of our machinery.

Key initiatives include: Digitization of Machine Controls: Transitioning from manual to automated control systems through the integration of input/output data analysis, facilitating real-time monitoring and adjustments.

Time Data Analysis: Implementing advanced time data analysis to optimize production processes, reduce downtime, and enhance overall efficiency.

Future Strategys / Outlook:

The Board of Directors has not identified any material impact on the operations and financials of the company as at March 31, 2025. Considering that the Company deals with Specialty Copper Products, there has been minimal disruption with respect to operations including production and distribution activities.

The Company has not experienced any difficulties with respect to market demand, collections or liquidity. The Company will continue to closely monitor any material changes to future economic conditions.

For the year 2025-26, the Companys focus will continue on the enameled copper wires market is poised for robust growth, driven by the rising demand for consumer electronics, such as smartphones, laptops, and household appliances. This surge in demand is fueled by increasing disposable incomes and changing lifestyles in emerging economies. Geographically, the Asia Pacific region is expected to dominate the market during the forecast period, thanks to rapid industrialization, urbanization, and infrastructural development in countries like China, India, and Nairobi. The presence of major electronic manufacturing companies in these regions further propels market growth. Overall, the market is projected to witness a CAGR of 8% from 2023 to 2030, with key growth drivers including the increasing demand for energy-efficient electrical equipment, expansion in the automotive sector, and the rising adoption of renewable energy sources.

Subsidiaries:

Your Company has no subsidiary Companies.

Market Expansion:

BEL is poised to expand its market presence both domestically and internationally. Leveraging its strong brand reputation and innovative product offerings, the company seeks strategic partnerships and collaborations to enhance its market reach and drive growth in key sectors.

Sustainability Initiatives:

As part of its commitment to sustainability, BEL focuses on developing environmentally friendly products and adopting green manufacturing practices. Initiatives aimed at reducing the companys carbon footprint and enhancing energy efficiency are integrated into its production processes.

Projected Growth and Demand:

The demand for BEL innovative products is expected to remain robust in 2024-2025. This growth is driven by several factors, including the increasing adoption of automation and smart technologies in industries, the expansion of renewable energy projects such as electric vehicles (EVs), and solar power and continued infrastructure development in emerging markets .

Opportunities & Treats:

Opportunities: India remains one of the fastest-growing emerging major economies, with ambitious targets to achieve a GDP of USD 5 trillion economy. The performance of the electrical equipment industry in FY 25-26 indicates robust growth, driven by increased industrial and consumer spending.

Increased Demand for Electrical Equipment: As India progresses towards a higher GDP and industrial output, there will be a parallel increase in demand for electrical and electronic equipment, including winding wires and strips. This growth is supported by infrastructure development, urbanization, and the expansion of renewable energy projects. Indias electrical equipment industry is forecasted to double in size over the 5 years.

Moreover, the expansion of EV infrastructure, including charging networks, is crucial in enhancing the convenience and practicality of EV ownership. As these trends continue and EVs become more affordable and accessible, coupled with growing awareness of environmental issues, the automotive industry is set for a significant transformation towards sustainable transportation solutions.

These developments present a substantial opportunity for growth for your company, aligning well with the evolving market trends towards electric mobility.

Treats: Energy Crisis and Geopolitical Tensions: Ongoing energy crises, geopolitical tensions (such as the Russia-Ukraine conflict), and associated supply chain disruptions impact global economic stability. These factors can lead to fluctuations in raw material prices, supply chain delays, and market volatility, which may affect Companys production costs and profitability.

Currency Fluctuations: Strengthening of major international currencies against the Indian rupee can increase the cost of imported raw materials and consumables, impacting production costs and profitability margins.

Inflationary Pressures: Rising inflationary pressures, including wage increases and elevated prices of essential inputs like copper and other raw material costs, escalate production costs. BELs ability to manage cost efficiency and mitigate inflationary impacts through strategic sourcing and operational optimization becomes critical.

Navigating the opportunities and threats in FY 2025-26 requires BEL to leverage its strengths in quality management, innovation, and market diversification. By capitalizing on Indias economic growth prospects, embracing technological advancements, and navigating global uncertainties with agility, BEL can position itself as a resilient player in the competitive landscape of the electrical equipment industry.

Internal Controls Systems:

The robustness of BELs internal financial controls reflects its commitment to ensuring transparency, compliance, and efficiency in operations. These controls are meticulously designed to align with the companys scale, business nature, and operational complexity. They undergo regular monitoring and evaluation by the management, internal and Statutory Auditors, with continuous improvements implemented in response to evolving laws, regulations, and operational needs.

Companys control systems are time tested, documented and recognized under ISO Certification. On the financial side, periodic audits by Internal Auditors and External Auditors provide a means whereby identification of areas of improvement and corrective measures taken whenever applicable.

Financial Review:

Revenue from operations, including other income, stood at Rs. 159.19 Crs. in FY 2024-25, up from Rs. 127.80 Crs. in the previous year marking a substantial increase of 24.56%. Profit After Tax increased to Rs. 19.72 Crs. in FY 2023-24 from Rs. ?€“ 1.11 Crs. in the previous year.

Key Financial Ratio

Ratios	2024- 25	2023- 24
Inventory Turnover Ratio	15.38	15.66
Debt Equity Ratio	- 1.07	- 1.51
Current Ratio	0.87	1.88
Trade Receivable Turnover	30.56	37.43
Operating Profit Margin%	13.70	- 1.34
Net Profit Ratio	12.39	- 0.86
Return on Net Worth	- 100.09	2.79

The total comprehensive income for the year has been increased by more than 25% mainly due to sale of equity shares held under fair value through OCI and thereby corresponding change in the shareholders fund and the reduction in the debt of the Company.

Maternity Benefit Act, 1961

The Maternity Benefit Act, 1961 is a social welfare legislation in India that regulates the employment of women during the period of childbirth and provides maternity benefits (such as paid leave, nursing breaks, etc.). Its objective is to safeguard the dignity of motherhood and protect the employment of women during maternity.

?Ÿ“Œ Applicability :

Applicable to every establishment (including factories, mines, plantations, shops, and establishments) employing 10 or more employees.

Listed companies, being public limited companies, usually employ more than 10 employees; hence, the Act applies automatically.

Eligibility for Women Employees

A woman must have worked in the company for at least 80 days in the 12 months immediately preceding her expected date of delivery.

Benefits under the Act Maternity Leave:

26 weeks of paid leave (for first two children). 12 weeks for the third child onwards.

12 weeks for adopting/commissioning mothers (from the date the child is handed over).

-Work-from-Home: After maternity leave, if the nature of work permits, a woman may request work-from-home on mutually agreed terms with the employer.

-Facility: Every company employing 50 or more employees must provide crèche facilities and allow women 4 visits per day (including rest intervals).

-Medical Bonus: If no pre-natal confinement or post-natal care is provided free of charge by the employer, then a medical bonus of ?‚?3,500 (subject to government notifications) must be paid.

-Nursing Breaks: Two nursing breaks until the child attains 15 months of age.

Prohibitions

-No dismissal or discharge of a woman during maternity leave.

-Employer cannot change conditions of service to her disadvantage during this period.

Compliance for Listed Companies

-Must ensure policies are framed in line with the Act.

-Disclose maternity-related benefits under SEBI (LODR) Regulations, 2015 in relation to HR policies and sustainability reporting (where applicable).

-Listed companies with ESG/Sustainability reporting obligations need to specifically highlight employee welfare measures, including maternity benefits.

Penalties for Non- Compliance

Imprisonment up to 3 months and/or fine up to ?‚?5,000 for employer. For continuing offense, an additional fine of ?‚?250 per day.

Human Resources Development:

At BEL, human resources are recognized as the cornerstone of organizational success. The companys strategic approach to human resource development encompasses training, skills enhancement, and fostering a conducive work environment to unleash employees full potential.

Training Programs:

Skill Enhancement: BEL conducts regular training programs designed to equip employees across all levels with new skills and knowledge. These initiatives are aligned with the companys future-ready strategy, ensuring that employees remain adept in a rapidly evolving industry landscape.

Competence Building: The companys investment in training is geared towards building competence and capability among its workforce. By empowering employees with the latest industry practices and technologies, BEL fosters innovation and operational excellence.

Employee Well- being:

Safe Working Conditions: BEL prioritizes the provision of safe and healthy working conditions for its employees. The company invests in infrastructure and implements stringent safety protocols to ensure a secure workplace environment.

Industrial Relations: Maintaining harmonious industrial relations is a cornerstone of BELs corporate ethos. The company is committed to nurturing healthy and cordial relationships across all organizational levels, fostering a collaborative and supportive workplace culture.

Employee Strength:

As of 31st March 2025, BEL employed 73 permanent employees, highlighting its role as a significant employer committed to fostering career growth and development opportunities within the organization.

Risk Management:

Your Company has no specific risks other than normal business problems which are explained above.

Cautionary Statement:

Certain statements in this Report describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable Securities Laws and Regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand supply conditions, finished goods prices, availability and prices of raw materials, power, interest rates, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors. Your Company is not obliged to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events or otherwise.