Benara Bearings & Pistons Ltd Management Discussions

ANNUAL OVERVIEW AND OUTLOOK ECONOMIC OUTLOOK

India is set to dominate the global economic landscape, maintaining its status as the fastest-growing large economy for the next two fiscal years. The January 2025 edition of the World Banks Global Economic Prospects (GEP) report projects Indias economy to grow at a steady rate of 6.7% in both FY26 and FY27, significantly outpacing global and regional peers. At a time when global growth is expected to remain at 2.7 per cent in 2025-26, this remarkable performance underscores Indias resilience and its growing significance in shaping the worlds economic trajectory.

The GEP report credits this extraordinary momentum to a thriving services sector and a revitalised manufacturing base, driven by transformative government initiatives. From modernising infrastructure to simplifying taxes, these measures are fuelling domestic growth and positioning India as a cornerstone of global economic stability. With its closest competitor, China, decelerating to 4 per cent growth next year, Indias rise is more than just a statistic. It is a powerful story of ambition, innovation, and unmatched potential.

Complementing the World Bank report, the latest update from the International Monetary Funds (IMF) World Economic Outlook (WEO) also reinforces Indias strong economic trajectory. The IMF forecasts Indias growth to remain robust at 6.5% for both 2025 and 2026, aligning with earlier projections from October. This consistent growth outlook reflects Indias stable economic fundamentals and its ability to maintain momentum despite global uncertainties. The continued strength of Indias economic performance, as projected by both the World Bank and IMF, underscores the countrys resilience and highlights the sustained strength of its economic fundamentals, making India a crucial player in the global economic landscape.

INDUSTRY OVERVIEW

This 2025-26 edition of ACEAs Pocket Guide offers a comprehensive overview of the automotive industry, with a new chapter dedicated to infrastructure, reflecting the growing importance of electric vehicle (EV) uptake. As competitiveness concerns rise and global trade shift, the guide provides timely insights into the current state of the play of the sector. Despite economic uncertainties, the automotive industry remains a leader in research and development, investing €85 billion in 2023 - €12 billion more than the previous year and twice as much as the next largest private sector investor. However, EU vehicle production declined in 2024, with car output falling to 11.5 million units and commercial vehicle production dropping nearly 10%, prompting challenges in maintaining Europes manufacturing appeal.

Sale trends show mixed signals: global car registrations rose by 2.7%, and EU market share edged up to 22%, yet the share of battery-electric cars shrank for the first time. Electric van and truck registrations stagnated, while electric buses sustained momentum. Although ACEA members offer around 290 electrically-chargeable models on the EU market today, a lack of essential enabling conditions such as stronger incentives and infrastructure is still stymying demand.

Figures for EU trade with the rest of the world reveal a decline in both value and volume. However, the EU maintained a €94 billion surplus, with the US and the UK still the top destinations. Meanwhile, road safety in the EU continues to improve, with fatalities down 1.3%, while environmental performance improved again, with CO2 emissions and water usage per vehicle both reducing by over 50% since 2005.

To navigate our rapidly evolving sector, this new edition of the Pocket Guide remains the go-to resource for policymakers and industry leaders alike.

OPPORTUNITIES & THREATS Opportunities

The present-day automotive industry is affected by innovative ideas and is ready to transform and evolve rapidly. Current automotive trends are encouraging automotive manufacturers to offer consumers much more than a metal box on four wheels. Whereas for the past 100 years, carmakers were largely focused on enhancing manufacturing to become more efficient at scale, the future is about redefining the role of the vehicle—now its rather a smartphone or computer on wheels.

New technology in the automotive industry opens up new opportunities. AI, additive manufacturing, the Internet of Things, and 5G have become sources of product innovation and manufacturing efficiency, which in turn has led to revolutionary changes in customer experience. Finally, automotive manufacturers are increasingly adopting PMO software to standardize the execution of complex projects with globally distributed teams and ensure compliance with industry standards.

Threats

The automotive industry in 2025-2026 is navigating a complex, high-stakes landscape defined by the transition to software-defined vehicles (SDVs), electrification, and intense competitive pressures. Key threats facing the industry include geopolitical tensions disrupting supply chains, high costs of technology development, and a surge in cybersecurity attacks.

Here is an overview of the key threats to the automotive industry for 2025-2026:

• Geopolitical and Regulatory Disruptions (2025-2026)

• Cybersecurity and Data Privacy Risks

• Supply Chain and Economic Headwinds

• Technological Transformation Challenges

• Market Demand and Inventory Pressures

By 2026, the market is expected to enter a "slowing but stable" phase, with total new-vehicle sales projected to drop by approximately 2.4% from 2025 levels, marking a shift toward a buyers market. Success will depend on navigating this "fragmented reality" through strategic collaboration, cost-effective EV production, and robust cybersecurity.

RISKS AND CONCERNS

Benara Bearings & Pistons Limited (BBPL) has exposures in the business of Automotive Industry. BBPL are exposed to specific risks that are particular to their respective businesses and the environments within which they operate, including market risk, competition risk, credit risk, liquidity and interest rate risk, human resource risk, operational risk, information security risks, regulatory risk and macro-economic risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them.

LIQUIDITY AND INTEREST RATE RISK

The Company is exposed to liquidity risk principally, because of lending and investment for periods which may differ from those of its funding sources. Management team actively manages asset liability positions in accordance with the overall guidelines laid down by various regulators. The Company may be impacted by volatility in interest rates in India which could cause its margins to decline and profitability to shrink. The success of the Companys business depends significantly on interest income from its operations. It is exposed to interest rate risk, both as a result of lending at fixed interest rates and for reset periods which may differ from those of its funding sources. Interest rates are highly sensitive to many factors beyond the Companys control, including the monetary policies of the RBI, deregulation of the financial sector in India, domestic and international economic and political conditions and, inflation. As a result, interest rates in India have historically experienced a relatively high degree of volatility.

The Company seeks to match its interest rate positions of assets and liabilities to minimize interest rate risk. However, there can be no assurance that significant interest rate movements will not have an adverse effect on its financial position.

HUMAN RESOURCE DEVELOPMENT

The Company recognizes that its success is deeply embedded in the success of its human capital. During 2024-25, the Company continued to strengthen its HR processes in line with its objective of creating an inspired workforce. The employee engagement initiatives included placing greater emphasis on learning and development, launching leadership development programme, introducing internal communication, providing opportunities to staff to seek inspirational roles through internal job postings, streamlining the Performance Management System, making the compensation structure more competitive and streamlining the performance-link rewards and incentives.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The provision of the Companies Act, 2013 relating to CSR Initiatives are not applicable to the Company.

COMPLIANCE

The Compliance function of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal guidelines. The Compliance Department of the Company continues to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the Companys Board of Directors and the Companys Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/internal guidelines on a periodic basis.

The Company has complied with all requirements of regulatory authorities except delay in complying with the provisions of SEBI LODR Regulations, 2015. Delay was mainly due to the difficult phase of COVID-19 pandemic wherein the normal life was disrupted and staffs were forced to perform their duties with limited resources. Details of probable noncompliance have been provided herein below -

• The Company has not complied with the requirements of Regulation 34 and has not filed Annual Reports for FY 2023-24 and FY 2024-25.

• The Company is in violation of Regulations 33 of SEBI LODR Regulations for non-filing of Unaudited Financial Results for HYE Sept 30, 2024.

• BSE has levied SOP Fines for late-filing of Audited Financial Results for HYE/YE Mach 31, 2025.

Mumbai, September 6, 2025	By order of the Board
	For Benara Bearings & Pistons Limited
	Sd/-
Registered Office :	Vivek Benara
A-3 &-4, Site B, Industrial Area Sikandrabad,	DIN:00204647
Agra, Uttar Pradesh - 282007	Managing Director