Bhagwati Autocast Ltd Management Discussions

(Pursuant to Regulation 34 of the SEBI (LODR) Regulation, 2015)

COMPANY PROFILE

BhagwatiAutocast Limited (BAL) is manufacturing of Cast Iron (CI) and Spheroidal Graphite Iron (SGI) castings.Their manufacturing facility is situated near Bavla, Ahmedabad. The Company is ISO 9001:2015 certified by Bureau Veritas.

OVERALL REVIEW

During the year under review, the Companyachieved a production of 14,953metric tons as compared to the previous year 13,939metric tons. The total revenue generated during this period is outlined as follows: (Rs. in lakhs)

	2024-25	2023-24
Sale of CI Castings	13376.82	12988.97
Sale of Patterns	39.97	97.71
Revenue from Operations	13416.79	13086.68
Other Operating Revenue	577.65	341.92
Other Income	58.77	20.89
Total Income	14053.21	13449.49

of the financial statements for the year 2024-25.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Given the companys product range caters to the tractor and automobile industries, it is crucial to consider the current trends shaping these sectors. The current scenario in the automobile sector is marked by significant technological advancements and shifts in consumer preferences. The industry is witnessing a robust transition towards electric vehicles (EVs), driven by increasing environmental concerns and stringent emissions regulations. This trend is accompanied by advancements in autonomous driving technologies and the integration of smart features, such as connected car systems and enhanced safety measures.

OUTLOOK, OPPORTUNITIES AND DEVELOPMENTS

The tractor industry is undergoing rapid transformation, driven by technological innovations, sustainability goals, and a rising global demand for efficient agricultural machinery. Our companys fortunes are closely linked to the growth of the tractor sector, which is heavily influenced by agricultural activity and farmers income, particularly through minimum support prices (MSP). As tractor demand rises, our customers are increasing their production, leading to full utilization of our capacity.

The demand for tractors is rising, particularly in developing countries where mechanized farming is expanding. This growth is driven by the need for higher productivity and efficiency in agriculture.The adoption of Internet of Things (IoT) and artificial intelligence (AI) in tractors is enhancing their functionality. Features such as real-time monitoring, predictive maintenance, and automated crop management are becoming more prevalent.Tractors are being designed with greater versatility to cater to various agricultural tasks. Customizable attachments and implements are allowing farmers to perform a wide range of activities with a single machine.

Overall improvements in economic fundamentals are expected to positively impact these sectors in the medium to long term. This optimistic outlook for the tractor industry is likely to boost demand for auto components, benefiting us as a component supplier.

THREATS, RISKS & CONCERNS

As a supplier of components to OE manufacturers in the tractor industry, your company is directly impacted by various factors affecting this sector. Several risk factors include Economic downturns or fluctuations can impact agricultural incomes and investment in machinery. Changes in commodity prices and rural economic conditions can influence farmers purchasing power and demand for tractors.Stricter environmental regulations and emission standards can impose additional compliance costs on manufacturers. Adapting to these regulations may require significant investment in new technologies and production processes. Rapid technological advancements can present risks if companies fail to keep pace. Investments in new technologies, such as electric or autonomous tractors, may pose financial risks if market adoption is slower than anticipated. The tractor industrys performance is closely tied to the agricultural sectors health. Factors such as crop yield fluctuations, climate change, and changes in agricultural policies can impact demand for tractors. These risk factors highlight the need for the tractor industry to remain adaptable and resilient in the face of changing economic, regulatory, and technological landscapes.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The company has implemented robust internal control procedures designed to safeguard its assets from unauthorized use or disposal and ensure transactions are recorded and reported with accuracy and timeliness. These policies and procedures aim to provide reasonable assurance regarding the integrity of financial reporting and operational efficiency. Regular reviews are conducted through internal audits and statutory audits to assess the effectiveness of these controls.

Additionally, the company has established comprehensive internal financial controls, which are periodically tested and reviewed. The Audit Committee of the Board regularly examines internal audit reports. Over the past year, these controls have been rigorously tested, and no material weaknesses in their operating effectiveness have been identified.

HUMAN RESOURCES

In the current market scenario, the company benefits from a highly committed and dedicated team. To enhance organizational efficiency and adapt to evolving market demands, numerous initiatives have been undertaken, including process improvements and various employee engagement programs. These efforts have significantly boosted productivity levels.

The company is also focused on developing leadership and technical capabilities to meet future talent requirements, ensuring readiness for industry changes and technological advancements. An environment that fosters continuous learning and informal communication is actively promoted within the organization. Throughout the year, industrial relations have remained cordial, supporting a collaborative and positive workplace atmosphere.

DETAILS OF SIGNIFICANT CHANGES IN THE KEY FINANCIAL RATIOS & RETURN ON NET WORTH

As per Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to Schedule III of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), details of significant changes i.e. change of 25% or more as compared to the immediately previous financial year in Key Financial Ratios and any changes in return on net worth of the Company including explanations therefore are given below:

Sr.No. Particulars	FY 2024-25	FY 2023-24	Change in %	Explanation
1 Debtor Turnover	5.06	5.23	(3.20)	Decline in Turnover, while Debtor level remained high by 5%.
2 Inventory Turnover	20.01	20.52	(2.49)	Low market while maintaing inventory level same resulted into Decline in ITR.
3 Interest Coverage Ratio	8.45	10.44	(19.02)	Due to No utilization of CC limits and repayment of Term loan lowered Interest cost
4 Current Ratio	1.52	1.88	(18.99)	Positive Liquidity due to faster collection as also getting buying cost advantage from reducing credit term with vendor and effective management of inventory resulted in increase in current ratio.
5 Debt Equity Ratio	0.24	0.21	16.95	Positive movement due to non-utilization of CC due to positive liquidity, repaying of unsecured loan including of term loan and increased profitability of the company
6 Operating Profit Margin (%)	7.29	8.15	(10.53)	Thought volume decline, saving in material resulted into slightly higher Operating Profit ratio.
7 Net Profit Margin (%)	4.59	5.30	(13.32)	Thought volume decline, saving in material resulted into slightly higher Net Profit ratio.
8 Return on Net Worth	13.29	17.21	(22.76)	Decline in Turnover by 13% leading to decline in PAT resulted into decrease in ROE Ratio.

CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis Report describing companys objectivesand expectations may constitute "forward looking statements" based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized by the Company. Actual results might differ materially from those either expressed orimplied.

By Order of the Board of Directors For, BHAGWATI AUTOCAST LIMITED

Place : Ahmedabad	Dr. Pravin N. Bhagwati
Date : 23/05/ 2025	Chairman
	DIN : 00096799