Batliboi Ltd Management Discussions

Company Overview:

Batliboi, incorporated in 1941, has established itself as a leader among engineering companies. The companys enduring success is built on strong beliefs and values, which have supported its growth over the years.

Batliboi has driven technological innovation in its various fields of activity, including manufacturing, engineering, contracting, and marketing. The company operates manufacturing plants in Surat, India, and Peterborough, Canada, where it produces advanced machinery. This machinery is either developed in-house or in collaboration with leading engineering companies worldwide.

The company has undertaken major turnkey projects both in India and internationally, reflecting its capability as engineers and contractors. With a strong focus on customer service, Batliboi operates through various Business Groups at the corporate level. These groups are supported by a dedicated team of engineers who provide comprehensive pre-sales and post-sales service through a network of multiple offices across the country.

Batlibois operations encompass Machine Tools, Air Engineering and Textile Machinery. During the year the Company had received the approval from Honble National Company Law Tribunal (NCLT) vide its order dated March 24, 2025 for Merger of Batliboi Environmental Engineering Limited (BEEL) with and into Batliboi Limited. Therefore BEEL would now become the Environmental Engineering Group of Batliboi Limited which comprises of Air Pollution Control Equipment, Industrial Fans and Green Hydrogen Project. The company is committed to investing in, diversifying, and expanding its operations in both volume and quality, contributing to the engineering of a strong and prosperous India. The Management of Batliboi Limited presents the analysis of performance of your Company for the year ended 2024-2025 and its outlook for the future. This outlook is based on assessment of the current business environment and the expectations, estimates and projections of the Directors and Management of the Company. It may vary due to future economic and political development, both in the Indian and international economies and due to other factors beyond control.

A. PERFORMANCE AND OUTLOOK

Batliboi Textile Engineering Group

Business Structure

The Textile Engineering Group comprises of Air Engineering and Textile Machinery.

Air Engineering Group

Air Engineering Group is a leading manufacturer of complete Auto control type Humidification plant equipment, Waste collection equipment along with Automatic controls for Textile Spinning, Weaving and Knitting plants. Its activities have now diversified to provide air control requirements for food, pharmaceuticals and general industry.

Industry structure and developments

The Textile Industry is going through a challenging phase. There is lack of major expansion plans. Weaving & Knitting Sectors are expected to perform better with new investments. Due to unfavourable global situation, the Yarn/Fabric and apparel demand in export market has reduced. It is expected Q-2-25-26 onwards will bring in a more stable business environment as it seems that the overall global sentiments are likely to improve with stability in the tariff issues globally and stability in Bangladesh as well as the Russian-Ukraine situation.

To foster growth we are also now active in other markets in Africa, Uzbekistan and other Asian countries.

Our diversification to explore other markets for their air control requirements especially in the food, pharmaceutical & general engineering industry is expected to bear fruit in 25/26.

Opportunities:

We expect the textile industry to do much better with introduction of the new textile Incentive policies and reduction in electricity tariff rates.

We expect the situation in Bangladesh to improve, in addition our focus on the export markets in Vietnam, Indo-nesia, Egypt and Uzbekistan. Our diversification as explained above in other sectors also should add in growth. All this augurs well for business in FY 2025-2026

Threats, Risk & Concern:

Uncertainty in geo political situation and local demand could result in subdued activity

Outlook

With healthy order backlog and the opportunity available the Company is optimistic for FY 2025-2026.

Internal Control System and their Adequacy

The group has adequate internal controls in place.

Textile Machinery Group

The textile machinery group of BTMG caters to the spinning, knitting, and processing machinery requirements of the textile industry. Despite facing high volatility in overall demand and raw material prices during the review period, we have successfully retained our overall market share inspite of reduction in business volume. This was achieved through strategic expansions of our product portfolio in processing segment and extending our geographical reach through key representations.

Opportunities:

Anticipated investments in Dyeing, Printing and Automation products, Open End Spinning and Knits present lucrative prospects, both in the domestic and international markets.

There is a growing emphasis on high-productivity automated sustainable technologies, providing avenues for innovation and market expansion.

The realignment of the global supply chain offers emerging opportunities for strategic partnerships and market penetration.

Looking at the business opportunity in Effluent Treatment Plant (ETP) and Zero Liquid Discharge (ZLD) in the textile industry, we have formed a new subsidiary company to cater to this business segment.

Threats, Risks, and Concerns:

Potential slowdown in global business due to geopolitical tensions, trade wars may lead to deferral of investment decisions and impact market stability.

Outlook:

Despite the potential threats and uncertainties, we maintain a cautiously optimistic outlook. Barring any unforeseen circumstances such as geopolitical tensions, we anticipate continued growth and resilience in the textile machinery sector.

2. Batliboi Machine Tool Group (BMTG)

Business Structure

The Machine Tool Group is engaged in manufacturing, selling/trading, and servicing of various types of metal forming and metal cutting machine tools.

Manufacturing: Batliboi manufactures CNC machines viz. Turning Centers, Vertical Machining Center, Vertical Turning Lathes and Double Column Machining Centers and conventional radial drilling machines.

Trading: The Company is also engaged in sales and service as an agency house representing various overseas reputed companies from Czech Republic, Belgium, Italy, Germany, South Korea, China and Taiwan as well local manufacturers of Metal Cutting and Metal Forming machine tools.

Machine Tool Trading (MTT) Industry structure and developments

Demand for Heavy Machine Tools came down. The competition has also increased as players have become more aggressive in Pricing. However, an upward trend of demand was observed during last few months.

Opportunities

In sectors like fabrication and Wind-Mills, new entrants have opened up opportunities. The Opportunities have increased for specialized equipment like Isostatic Presses. The improvement in demand for heavy-duty machines was observed.

With increase spending by government and private sectors in infrastructure expansion, strategic and general manufacturing sectors, we are optimistic that demand improves in FY 2025-2026.

Threats, Risks and concerns

Delay in decision making due to government policies as well as in the strategic sectors may affect finalization of orders.

Outlook

We are cautiously optimistic for improved demand for heavy metal cutting and forming machine tools as a result because of the improvement in economy and the large spending on infrastructure and strategic sectors by the government and the private sector.

Internal Control system and their adequacy

The group has adequate internal controls in place.

Machine Tool Manufacturing (MTU & Foundry)

Batliboi manufactures CNC machines viz. Turning Centers, Vertical Machining Centers, Vertical Turning Lathes and Double Column Machining Centers and conventional radial drilling machines.

Developments and Performance

This group was able to improve market share with improvement in quality and introduction of more new models of CNC machines.

For FY 24-25 almost all investments have been completed in the foundry and machine shop. By end of Q1 FY 25-26 all machineries will be commissioned and we expect the production to gradually start increasing from Q2 onwards.

Opportunities,

The Indian economy is projected to grow at @ 6.5% in FY 25-26 which augurs well for the manufacturing sector. The machine tool business will reflect this growth and the industry is expected to grow at CAGR @ 8% to 10% p.a. Demand will be driven by auto and auto component, aerospace, strategic sectors and agriculture. With the additions of new models, upgrading existing models to meet competition, and substantial capital expenditure incurred in foundry and machine shop, we are confident of improving our performance for FY 25-26 by growing faster than the industry average.

Threats, Risks and concerns

Delay in decision making due to government policies as well as financing available for MSME sector may have an impact on capital expenditure spending. Any adverse geo political situation that may arise may have bearing on the sentiments which may affect capex plans of customers.

Internal Control system and their adequacy

The group has adequate internal controls in place.

Batliboi Environmental Engineering Group (EEG)

Business Structure

The Environmental Engineering Group (EEG) comprises of Air Pollution Control Equipment, Industrial Fans and Projects for Green Hydrogen.

EEG is a one of the leading solution provider in domain of Air pollution control/ Product recovery, Industrial Fans for Steel, Power, Oil & Gas, Sugar and Cement Industry. EEG has in-house capabilities of providing 100% Make in India solutions for the industry spectrum as mentioned above.

Industry structure and developments

Steel Industry:

Indias domestic demand continues to expand by 9-10% as per ICRA which augurs well for the demand for our products and services.

Power Industry:

With increasing demand in electricity the power sector is expected to grow in conventional, non- conventional and renewable sectors. This will also require product and services which we offer.

Cement Industry

This sector is expected to revive slowly throughout the 2025 to 2027 and we are now focusing on this sector.

Overall Economic Outlook:

Growth in Indian market is mainly driven through Infrastructure development and Consumption. The robustness of this growth is going to boost overall sentiments in the market.

Opportunities and threats Opportunities:

EEG is expecting to ride upon the increase in production of crude iron initiative and expects new increase in new project announcement in the current financial year. EEG is actively working with Utility Boiler and Captive Power Plant Boiler manufacturers and expects this business to give consistent growth in business.

EEG has also started increasing its visibility in Cement market and systematic efforts will ensure getting visibility and improved acceptance in the Cement industry too.

Threats Risk & Concern:

The market has become very competitive and maintaining margin has become a challenge. EEG is consciously working on keeping our margins intact through design improvement, alternative vendor development and leveraging bulk buying etc.

Outlook

With a healthy order backlog and good enquiries in hand EEG is optimistic for consistent business growth.

Internal Control System and their Adequacy

The group has adequate internal controls in place.

Quickmill Inc. Canada

Business Structure;

This 100% subsidiary of the company is headquartered in Peterborough, Canada and is engaged in the manufacture and sale of large size Gantry Drilling & Milling machines. It caters to the global market for the Energy, Structural Steel, Aviation, large equipment manufacturing and Job shop manufacturing sectors.

Development & Performance

Profitability FY 2024-2025 improved considerably over the previous year. Increased sales in new markets and new product development helped in achieving this growth.

Opportunities, threats & Outlook

Quickmill expects to continue to improve its performance in FY 2025-2026 over last years results based on the improved demand in North America including the strategic sectors and diversification into the newer markets eg. Middle East, Egypt, Mexico.

Threats

The threats could be the disruption in demand due to the global inconsistent tariff policies.

Internal Control system and their adequacy

There is adequate internal controls system in place.

B. HUMAN RESOURCES / INDUSTRIAL RELATIONS

The total number of permanent employees in the Company was 478 as on 31^st March, 2025. The number of employees as on 31^st March 2025 includes the number of employees of Batliboi Environmental Engineering Limited (BEEL) which is now merged into Batliboi Limited vide Honble National Company Law Tribunal Order dated 24^th March, 2025.

The Company has in place Health, Safety and Environment policy for its manufacturing operations. The same is reviewed by the Board from time to time and appropriate actions are taken as directed.

Sr. No. Summary of Training Program (2024-2025)

1 Conduction Nidhi Apke Nikat Program

2 CPR (Cardiopulmonary resuscitation) Training

3 First Aid Training

4 Employees Deposit Linked Incentive Scheme

5 NIDHI AAPKE NIKAT (NAN-2.0) Camp

6 First Aid Training/HIV/AIDS Awareness

7 First Aid Training/No Tobacco Day

8 Health Talk on " Cancer Awareness" by Apollo

9 Fanuc System Training

10 Eye Check Up Camp