Birla Precision Technologies Ltd Management Discussions

ECONOMIC OVERVIEW Global Economy

In 2024, the global economy grew moderately at 3.3%, marking a period of relative stability despite subdued momentum. As 2025 unfolds, the global environment is shifting significantly, driven by countries reordering their policy priorities amid rising geopolitical tensions and economic challenges.

The US has introduced a series of new tariff measures, prompting swift and forceful responses from major trading partners. This culminated in the implementation of near-universal tariffs on April 2, 2025. Consequently, effective tariff rates have soared to levels unseen in over a century, delivering a sharp and damaging blow to global growth.

GDP Growth Projections (in %)

The speed and unpredictability of these policy changes have worsened the situation, sharply increased economic uncertainty and made the near-term outlook more volatile. This growing instability has also weakened the reliability of traditional forecasting models, making past assumptions an unreliable base for future projections.

Against this backdrop, global headline inflation is expected to ease more slowly than earlier forecasts. It is now projected to ease to 4.3% in 2025 and further to 3.6% in 2026. The revision reflects higher inflation estimates across advanced economies, partially offset by marginal downward adjustments in emerging markets and developing economies.

	2024	2025	2026
Global Economy	3.3	2.8	3.0
Advanced Economies	1.8	1.4	1.5
Emerging Markets and Developing Economies	4.3	3.7	3.9

(Source: World Economic Outlook, April 2025)

The US: Growth in 2025 is now forecasted at 1.8%, down from earlier estimates, due to tighter monetary policy and ongoing trade disruptions. Inflation is expected near 3%, with tariffs contributing roughly one percentage point. Consumer spending is slowing, and manufacturers face higher input costs amid global supply-chain strains.

China: Growth for 2025 has been revised down to 4.0%, driven by weaker external demand, debt-reduction measures, and a move toward consumer-led expansion. Inflation is expected to remain low and may even turn negative, highlighting risks in demand and potential credit stress in the property sector. Euro Area: The eurozone remains weighed down by weak consumption and exports, with GDP growth revised to 0.8% in 2025. Political instability in some regions and persistent energy insecurity continue to undermine investor confidence, especially in Germany and France.

Emerging Markets and Developing Economies (EMDEs):

Growth across emerging markets and developing economies is showing signs of moderation, with the impact particularly pronounced in Mexico, South Africa, and Argentina. High debt levels and depreciating currencies in these markets are intensifying inflationary pressures and constraining policy flexibility. Meanwhile, many developing nations are facing tighter financing conditions and declining investor interest, further deepening economic vulnerabilities.

Concerns continue to grow over increasing financial system fragility, particularly in emerging markets and among non-bank financial institutions (NBFIs). Turbulence across equity markets, inflated asset valuations, and persistent corporate debt burdens are clouding the financial outlook. Central banks face a delicate balancing act as they attempt to manage inflation without triggering financial instability.

Emerging market economies are particularly vulnerable in the current environment. Higher sovereign debt servicing costs, capital outflows from widening interest rate differentials, and weakening currencies are compounding inflationary pressures and vulnerabilities. Collectively, these factors raise the likelihood of abrupt investment halts and potential debt distress. Without timely multilateral support and the activation of structured debt resolution frameworks, financial stress in these economies could intensify further.

Outlook

Although the global economy faces challenges, this period presents a unique opportunity to increase endurance and chart a more sustainable path forward. The adaptability shown by many economies under strain demonstrates that recovery is possible with the right mix of coordinated policies and proactive reform.

By fostering a stable and transparent trade environment, enabling timely debt resolution, and correcting structural imbalances, countries can support a more balanced and inclusive global recovery. Moreover, clear monetary policy, strategic use of macroprudential tools, and credible fiscal planning will help restore financial stability and ensure long-term growth.

International cooperation remains critical to navigating the future. Through aligned strategies, decisive leadership, and a shared commitment to progress, the global economy can regain momentum, rebuild buffers, and create new opportunities for prosperity across regions.

(Source: https://www.imf.org/en/Publications/WEO/Issues/ 2025/04/22/world-economic-outlook-april-2025)

Indian Economy

Indias economy is the fifth largest in the world by nominal

GDP, and the third largest by purchasing power parity

(PPP). Indias economic trajectory remains promising, with an estimated growth rate of 6.5% for FY 2024-25 despiteamong which manufacturing is targeting to contribute 25% to the GDP by 2030. This projection highlights the nations enduring strength, even as global uncertainties persist. Strong domestic fundamentals and decisive policy actions fuel this momentum, while structural reforms, technological breakthroughs, and large-scale infrastructure projects add further thrust. The agricultural and service sectors continue to anchor economic strength, underpinned by stable private consumption and macroeconomic equilibrium. Targeted governmental measures further ensure the sustainability of this growth, while steady consumption and improved labour market conditions strengthen the outlook.

GDP Growth Trajectory

Fiscal Year	Growth Rate (in %)
FY 2024-25 (Projected)	6.5
FY 2023-24	8.2
FY 2022-23	7.0
FY 2021-22	8.7
FY 2020-21	(6.6)

The industrial sector remains a key pillar of growth, anticipated to expand by 6.2% in FY 2024-25, led by strong performances in construction and utilities. However, this marks a moderation from the previous years impressive 9.5% manufacturing growth, reflecting a confluence of external and domestic factors. The slowdown is largely attributed to subdued global demand, which weakened manufacturing exports, and aggressive trade policies by major partners. An above-average monsoon, while favourable for agriculture, disrupted operations in mining, construction, and certain manufacturing segments, leading to temporary slowdowns. The timing of major festivals, which varied between September and October across consecutive years, also contributed to fluctuations in production cycles and growth rates.

Despite these challenges, the manufacturing sector continues to exhibit strong momentum. The Manufacturing PMI registered 57.1 in February 2025, a slight dip from 57.7 in January, but still indicative of solid expansion. Strong domestic and international demand, rising hiring, and improving supply chains continue to drive growth, even as inflationary pressures persist. Investor sentiment towards manufacturing stocks also remains optimistic, reflected in the Nifty India Manufacturing

Index, which rose by 0.32% in January 2025, closing at 13,416.90 points. Improved corporate earnings, rising foreign investment, and technological advancements helped manufacturers sustain profitability costs, particularly in consumer goods, chemicals, and pharmaceuticals.

(Source: https://tradingeconomics.com/india manufacturing-pmi#:~:text=Growth%20Remains%20Strong-,The%20 HSBC%20India%20Manufacturing%20PMI%20fell%20to%20 57.1%20in%20February,reported%20higher%20outlays%20 on%20food.)

Outlook

As India prepares for FY 2025-26, the nations economic prospects remain cautiously measured in the face of ongoing geopolitical uncertainties, trade disruptions, and the potential for commodity price fluctuations. Domestically, sustaining GDP growth will depend on driving private sector investment, strengthening consumer confidence, accelerating corporate wage growth. Rural demand is expected to rise as agriculture recovers, food inflation stabilises, and macroeconomic conditions remain favourable. To enhance medium-term economic endurance, India must focus on boosting its global competitiveness through structural reforms and deregulation at the grassroots level. Furthermore, building a more business-friendly environment will remain vital to mitigating external vulnerabilities and ensuring long-term economic viability.

(Source: https://www.indiabudget.gov.in/economicsurvey/ doc/echapter.pdf)

INDUSTRY OVERVIEW

Global Auto Components Industry

The global auto components industry is growing steadily, fuelled by technological advancements, increasing electrification, and shifting consumer preferences. In 2025, the industry is estimated to be standing at approximately US$ 1,899 Billion. Projections suggest it could reach around US$ 2,781.6 Billion by 2033, recording a compound annual growth rate (CAGR) of about 4.9% between 2025 and 2033.

The positive growth curve highlights the sectors critical role in supporting innovation and transformation within the broader automotive ecosystem. Key trends influencing the sector include the rapid integration of advanced materials and smart design, a growing focus on electrification, automation, and connectivity, and heightened regulatory and sustainability requirements.

Regionally, the Asia-Pacific market leads the global market, contributing 42.7% of total revenue in 2025, driven by major economies like China, India, and Japan. Europe follows with a 24.1% share, led by Germany, the UK, and France. North

America, dominated by the US, accounts for an 18% share. These regions continue to shape global demand, investment, and innovation across the automotive component value chain.

As the global automotive industry undergoes unprecedented transformation, the future will be definedby rapid technological innovation, a decisive shift toward sustainability, and the need for operational agility. Electrification, the rise of software-defined vehicles, and advancements in autonomous driving are fundamentally reshaping vehicle design, manufacturing, and consumer experience. Connectivity and digitalisation are turning cars into intelligent, integrated parts of broader mobility ecosystems. At the same time, evolving consumer expectations and stricter regulations are fast-tracking the move towards cleaner, more efficient vehicles.

(Sources: https://www.cognitivemarketresearch.com/ automotive-components-market-report https://www.360iresearch.com/library/intelligence/ automotive-parts)

Indian Auto Components Industry growth,The Indian automobile industry is set for significant with the market forecast to rise from US$ 137.06 Billion in 2025 to US$ 203.25 Billion by 2030, registering a CAGR of 8.2%. Although recovery remains challenging in areas like domestic two-wheeler (2W) sales, the overall auto components sector is steadily regaining momentum. This revival is propelled by growth in component exports and expanding vehicle parc, which also supports a thriving aftermarket segment.

At present, the Indian auto components industry holds a 3.5% share of the global market and contributes around 25% to the countrys manufacturing GDP.

Between CY 2019 and CY 2024, the sector attracted estimated foreign currency inflows of approximately US$ 88 Billion, with a trade surplus of US$ 300 Million recorded in CY 2024. Looking to the future, the domestic market is expected to remain a key growth driver, but exports are poised to become the primary engine of expansion. The industry is projected to grow nearly threefold, reaching a value of US$ 200 Billion by CY 2030, clocking in an impressive 16% CAGR.

Over the same period, domestic OEM and aftermarket sales are anticipated to record a CAGR of 6%, while exports are expected to experience a remarkable surge, with a projected 30% CAGR. By CY 2030, component exports are set to emerge as the dominant segment, with export revenues likely to hit US$ 100 Billion, surpassing OEM sales, which are expected to reach US$ 89 Billion.

India has set an ambitious target of reaching US$ 100 Billion in auto component exports, aiming to become a global hub for both traditional and emerging components.

With exports currently at US$ 21 Billion, there is a clear opportunity to increase this by US$ 40 60 Billion. The key to achieving this lies in focusing on 11 vital product categories: engines, gears, rubber parts, brakes, axles, suspension systems, body parts, electrical and electronic components, transmission systems, exhaust systems, and cooling systems. Additionally, targeting markets like the US and Europe will prove essential, as India already holds a cost advantage, offering 25·30% lower landed costs than China for components like fasteners, wheels, and gears. To fully capitalise on this opportunity, India must enhance R&D capabilities, strengthen engineering infrastructure, and streamline product development processes to reduce lead times. A robust integration of the global supply chain will also be crucial, with strategic investments in warehousing and on-site support in key regions. Moreover, improving quality standards through automation, process optimisation, and the adoption of global best practices will play a pivotal role.

Indias ambitious target of reaching US$ 100 Billion in auto component exports by 2030 is being supported by a comprehensive government strategy. This multi-faceted approach aligns manufacturing, technology, and sustainability efforts, fostering the development of a globally competitive ecosystem.

PLIs for Automobile and Auto Components form the core of this strategy. With an outlay of INR 25,938 Cr., the scheme incentivises domestic production of Advanced Automotive Technology (AAT) products, including zero-emission vehicles like Battery EVs and Hydrogen Fuel Cell Vehicles. This fosters deep localisation, strengthens supply chain development, and prepares Indian manufacturers to serve evolving global markets by supporting technology-led innovation and export readiness.

Complementing the PLI scheme are targeted programmes like FAME India Phase II and the PM E-Drive Scheme. With a budget of INR 11,500 Cr., FAME II accelerates electric vehicle adoption and charging infrastructure development.

The PM E-Drive Scheme, backed by INR 10,900 Cr., focuses on large-scale EV procurement to boost domestic demand and scale manufacturing capabilities. These initiatives directly support the localisation and export of critical EV components, including batteries, electric motors, and advanced electronics, enabling Indianfirmsto tap into the rapidly expanding global market for green mobility solutions.

Broader frameworks like Make in India and Atmanirbhar Bharat strengthen this export-driven ambition. They promote domestic manufacturing of critical components, encourage FDI, and integrate MSMEs and start-ups into global value chains. Infrastructure upgrades under the National Automotive Testing and R&D Infrastructure Project (NATRIP) further enhance supply chain efficiency. Furthermore, improvements in logistics, ports, and warehousing boost Indias global competitiveness.

These coordinated initiatives do not operate in silos. They align strategically to transform India into a global hub for advanced, sustainable, and high-value auto components.

By synchronising incentives, demand creation, localisation, and infrastructure development, the government is laying the foundation for India to achieve its US$ 100 Billion export target and secure a key role in the global automotive value chain.

Together, these efforts have attracted significant from OEMs and component manufacturers. They fuel innovation, facilitate localisation, and enhance Indias role in the global automotive ecosystem. Furthermore, sustained policy support is strengthening the foundations for the industrys rapid expansion.

(Source: https://www.acma.in/uploads/publication/64-annual-session/ACMA_Fostering_self_reliance_Report_v3_ Print.pdf h t t p s : / / w e b - a s s e t s . b c g . c o m / 9 3 / 0 a / ef9ee48740e79bd86aa00e37d2dc/revving-up-exports-the-next-phase-of-export-growth-for-the-auto-component-industry-2.pdf https://www.india-briefing.com/news/indias-auto-component-manufacturing-success-and-its-vision-for-ev-adoption-29651.html/) https://pib.gov.in/PressReleasePage.aspx/pib.gov.in/ Pressreleaseshare.aspx?PRID=2121826)

Defence and Aerospace Industry

The global aerospace market was valued at US$ 373.61 Billion in 2024 and is projected to grow to US$ 791.78 Billion by 2034, reflecting a CAGR of 7.8% over 2024-34. North America accounted for roughly 46% of global revenue in 2023, followed by Asia-Pacific-ledby China and India-which is expected to post the fastest expansion. Key drivers include rising air travel demand, advances in sustainable aviation technologies, and growing defence and space exploration investments.

The Indian defence market reached US$ 17.30 Billion in 2024 and is forecast to expand to US$ 29.80 Billion by 2033 at a CAGR of 5.6% during 2025·2033. The Ministry of Defence (MoD) has set a target of achieving a US$ 25 Billion turnover in aerospace and defence manufacturing by 2025.

Increased government spending on modernising armed forces, ‘Make in India initiative, and strategic partnerships with global defence firms underpin this growth. India targeting a turnover of US$ 25 Billion in aerospace and defence manufacturing by 2025, including US$ 5 Billion in exports. To support this goal, defence production facilities are undergoing capacity augmentation, and the government has launched two Defence Industrial Corridors in Uttar Pradesh and Tamil Nadu. The Innovations for Defence Excellence (IDEX) programme has been allocated US$ 68 Million to fund startups developing next-generation defence technologies.

In civil aviation, India ranks among the fastest-growing markets globally and is on track to become the worlds largest aviation sector by 2047. Jefferies projects the industry will expand at a 13% CAGR from FY 2023 to FY 2030, unlocking a domestic defence market opportunity of US$ 100 120 Billion. As of 2021, India recorded the worlds third-largest defence expenditure and aims to export US$ 15 Billion worth of equipment by 2026. The country boasts approximately 194 defence technology startups driving innovation. Additionally, revisions to the Maintenance, Repair, and Overhaul (MRO) policy have enhanced the ease of doing business in this critical support segment.

(Source: https://www.precedenceresearch.com/aerospace-market https://www.imarcgroup.com/india-defense-market)

Electronics Industry

The global consumer electronics market was valued at US$ 1,214.11 Billion in 2024 and is projected to reach US$ 1,782.60 Billion by 2030, growing at a CAGR of 6.6% from 2025 to 2030. This expansion is driven by rising disposable incomes, rapid technological advancements (AI, IoT, 5G), and increased consumer demand for smart, connected devices. Key segments include smartphones, wearables, smart home appliances, and gaming hardware.

Indias consumer electronics market generated US$ 84,085.3 Million in revenue in 2024 and is expected to reach US$ 143,077.6 Million by 2030, at a CAGR of 9.3% during 2025·2030. Growth is underpinned by government production-linked incentives, rising internet penetration, expanding e-commerce, and ‘Make in India initiatives.

Smartphones led the market in 2024, while e-readers are the fastest-growing segment.

In addition, Indias Production-Linked Incentive (PLI) scheme for electronic components, approved on March 28, 2025, allocates US$ 2.7 Billion over six years to boost domestic production of PCBs, camera modules, batteries, displays, and other critical parts. This initiative aims to reduce import dependence, attract US$ 8.2 Billion in investment, and create over 91,600 direct jobs. Early results mirror the 2020 mobile

PLI, which drove mobile exports from US$ 2.6 Billion (FY 2020-21)toUS$14.2Billion(FY2023-24),a78%CAGR. region are fuelling demand, supported by rapid The global Electronic Manufacturing Services (EMS) market was valued at US$ 609.8 Billion in 2024 and is projected to reach US$ 1,033.2 Billion by 2032, expanding at 6.9% CAGR from 2025 2032. Asia-Pacific led with a 44.1% share in 2024, driven by demand in consumer electronics, automotive, healthcare, and telecom sectors. EMS providers·Hon Hai, Wistron, Jabil, Flex, and Compal·are expanding capacity and investing in generative AI for design and production. These developments enhance Indias position in global electronics value chains, strengthen supply-chain resilience, and support the Companys expansion into high-precision electronic components.

(Sources: https://www.grandviewresearch.com/industry-analysis/personal-consumer-electronics-market https://law.asia/india-pli-scheme-electronics/ https://www.grandviewresearch.com/horizon/outlook/ consumer-electronics-market/india https://www.fortunebusinessinsights.com/electronic-manufacturing-services-ems-market-105519)

Railway Industry

The global railroad market was estimated at US$ 314.84 Billion in 2024 and is projected to reach US$ 436.35 Billion by 2030, growing at a CAGR of 5.5% from 2025 to 2030. Investment in new rail lines, network expansions, and technology upgrades·such as digital signalling and high-speed corridors·are the primary growth drivers.

The India railroad market generated US$ 28.7 Billion in revenue in 2024 and is expected to reach US$ 51.2 Billion by 2033, at a CAGR of 6.3% during 2025-33. Government initiatives such as the National Rail Plan 2030, dedicated freight corridors, and large-scale electrification projects underpin this expansion. Passenger rail remains the largest segment, while freight rail is witnessing rapid growth due to rising e-commerce and supply-chain demands.

(Sources: https://www.grandviewresearch.com/industry-analysis/railroads-market https://www.imarcgroup.com/india-railroad-market)

Global Cutting Tools Industry

The global cutting tool market is set for steady growth, rising from US$ 37,745.37 Million in 2024 to US$ 48,052.96 Million by 2031, at a CAGR of 3.5%. This growth is fuelled by advancements in automation, digital manufacturing, and rising demand for high-precision, customised tooling solutions. The adoption of advanced materials like carbide, polycrystalline diamond (PCD), and cubic boron nitride (CBN) is increasing tool efficiencyand durability. Key industries such as automotive, aerospace, and electronics especially in the Asia-Pacific industrialisation and expanding manufacturing activities. Emerging trends include the integration of AI and IoT in machining processes, the rise of sustainable tooling solutions, and a shift towards lightweight materials to improve performance and energy efficiency. Significant investments in research and development by industry leaders are also accelerating technological innovation, further propelling market expansion.

APAC dominated the Cutting Tool Market with a 51% share in 2024, driven by rapid industrialisation, infrastructure investments, and manufacturing expansion in China, India, and Japan. The segment is anticipated to expand further at a CAGR of 4.0%, supported by rising demand for affordable tools. Moreover, strong automotive industry growth in China, Japan, India, and South Korea continues to drive demand for advanced cutting tools, improving manufacturing and assembly processes.

(Source: https://www.industryarc.com/Report/16304/cutting-tools-market.html)

Indian Cutting Tools Industry

Indias cutting tools market was valued at US$ 2960 Million in 2024 and is projected to reach US$ 5240 Million by 2033, growing at a CAGR of 6.08% during 2025-33. The markets growth is primarily driven by the rising demand for customised cutting tools tailored to improve efficiency, precision, and performance in handling complex materials. Additionally, government-led initiatives and ongoing infrastructure development are bolstering domestic manufacturing capabilities, attracting investments, and accelerating the adoption of advanced, high-quality cutting solutions across industries. The escalating demand for tailored cutting tools in India is propelled by the need for specialised solutions to enhance efficiency, precision, and address material challenges.

Government initiatives and infrastructure development further support the market growth by boosting local manufacturing, attracting investments, and driving the need for advanced, high-quality tools.

The government of India is actively fostering a strong industrial ecosystem, which in turn is fuelling the demand for high-quality cutting tools. In FY 2023-24, plans are underway to establish 12 industrial parks, aimed at attracting investments totalling INR 1.50 Lakh Cr., focusing on strategic sectors like food processing, textiles, and electric vehicles. These parks will not only boost production but also generate employment. Alongside this, continued investment in infrastructure development, including transportation systems, upgrading the rail network with high-speed, lightweight carries, promotion of 3C segment under Make in India and creating industrial hubs has further accelerated manufacturing activities, creating a strong base for the increased adoption of advanced machinery and precision equipment.

As Indias industrial ecosystem evolves, there is a growing need for specialised cutting tools tailored to specific materials, machining processes, and production requirements. Manufacturers are increasingly seeking tools that offer higher efficiency, improved durability, and greater precision, while addressing challenges such as tool wear, material waste, and tight tolerances. This customisation is crucial particularly for sectors like automotive, aerospace, and electronics, where complex component designs require advanced tooling solutions. The rise in such sector-specific demands underscores the strategic importance of cutting tools in supporting Indias broader goals of industrial growth and technological progress.

(Source: https://www.imarcgroup.com/india-cutting-tools-market)

COMPANY OVERVIEW

Birla Precision Technologies Limited (also referred to as ‘BPTL or ‘The Company) is a pioneering name in Indias Tool Manufacturing industry, with a legacy that spans over eight decades. A proud member of the renowned Birla Group, the Company is led by Mr. Vedant Birla, a seventh-generation member of the distinguished Birla family. The Company operates in three key segments: Cutting Tools, Tool Holders, and Automotive Precision Components, providing high-performance solutions across diverse industrial applications.

In the Cutting Tools segment, BPTL operates through its division Indian Tools Manufacturer (ITM), a pioneer in HSS Cutting Tools and its subsidiary, Birla Durotool Private Limited. This division markets trusted brands such as IT-Dagger, Panther (with tagline), Ninja, Forgeline Drills, Duromaster Drills, Carbomach, offering a comprehensive range of cutting tool solutions. The Tool Holders Division, established in 1986, is a strategic venture, dedicated to manufacturing precision tool holders, collets, work-holding solutions, and production boosters under BPT brand.

The Precision Components Division focuses on high precision built to print machined products for the Automotive, Hydraulics/Industrial sectors. Through its commitment to quality, innovation, and global partnerships, the Company continues to strengthen its leadership in Indias tool manufacturing industry.

SWOT Analysis Strengths

BPT is the market leader in the cutting tools industry, holding a significant share of the HSS drills market.

• Established a strong presence across a wide range of customer segments, catering to varied industrial needs.

• Successfully ventured into Carbide cutting tool portfolio to complement HSS portfolio for comprehensive round tool offerings.

Backed by over eight decades of experience, the

Company enjoys a well-established and respected brand identity.

• Committed to delivering high-quality products with innovative design, distinguishing the Company in the industry.

• Strengthened credibility and market reach through long-standing associations and collaborations with global players.

• Guided by a skilled leadership team and proven marketing strategies.

• Supported organisational development and talent management through a competent and experienced HR team.

• One-stop solution provider across all segments of high-speed drill applications from conventional to end user applications.

Weaknesses

• The current distribution network may require optimisation to improve reach and service delivery particularly to grow Durotool business range of hardware products and high-performance tools.

• Existing marketing efforts need to be revitalised to strengthen brand visibility and customer engagement.

• Manufacturing setup requires capacity and technology augmentation,necessitatinginvestmentinmodernisation and automation.

• Continued reliance on manual processes may challenge profitability.

• Current setup will restrict the Company from going global in application portfolio.

Opportunities

• Growth in Indian manufacturing sector.

• The global shift from dependency on Chinese manufacturing opens avenues for alternate sourcing and local production.

• Emerging technologies and investing in R&D can enhance product offerings and competitiveness.

• The standard product portfolio has strong potential for penetration into markets like the US, which represents a major consumable market for BPTLs product offerings.

Threats

• Established players with scalable operations exerting competitive pressure on market share and pricing.

• Suppliers from casting and forging sectors entering tool manufacturing, intensifying industry rivalry.

• Traders sourcing low-cost products from China and branding them locally, increasing pricing pressure and market dilution.

• Regional preferences for local suppliers, limiting penetration in certain markets and affecting sales growth.

• Increase in competitive pressure from international players in the global marketplace.

• APT prices and increased cost will create threat to emerging Carbide Tools portfolio.

FINANCIAL OVERVIEW Standalone

The Sales and Other Income of the Company for the Financial Year 2024-25 amounted to INR 20,951.04 Lakhs, compared to INR 22,778.26 Lakhs the year before. Profit After Tax (PAT) stood at INR 542.97 Lakhs, compared to INR 1,066.14 Lakhs in the previous year.

Consolidated

The Companys sales and other income for the financial year 2024-25 reached INR 21,601.04 Lakhs, compared to INR 22,755.82 Lakhs the previous year. PAT stood at INR 585.14 Lakhs, compared to INR 943.30 Lakhs in the previous year. The financial statements of the Company have been prepared according to the Indian Accounting Standards (Ind AS), in compliance with the provisions of the Companies Act, 2013 and the regulatory guidelines prescribed by the Securities and Exchange Board of India (SEBI).

	INR in Lakhs except for per-Share Data
Particulars	Standalone		Consolidated
	FY 2024-25	FY 2023-24	FY 2024-25	FY 2023-24
Revenue from Operations	20718.00	22,577.18	21356.59	22,553.69
EBITDA	2102.76	2,797.79	2075.31	2,677.87
PAT	542.97	1,066.14	585.14	943.30
EPS	0.82	1.62	0.89	1.43

Key Ratios

The key financial ratios for FY 2024-25, along with a comparison to FY 2023-24, are provided in the financial statement for the period ending March 31, 2025.

Particulars	Consolidated		Standalone
	March 31, 2025	March 31, 2024	March 31, 2025	March 31, 2024
Debt-to-Equity Ratio (in Times)	0.36	0.29	0.35	0.29
Interest Service Coverage Ratio (in Times)	2.48	5.79	2.39	6.16
Current Ratio (in Times)	1.68	1.68	1.70	1.70
Current Liability Ratio (in Times)	0.41	0.41	0.39	0.96
Total Debts to Total Assets (in Times)	0.20	0.16	0.20	0.16
Debtors Turnover (in Times)	4.67	5.39	4.08	5.17
Inventory Turnover (in Times)	1.84	1.60	1.89	1.68
Debt Service Coverage Ratio	2.35	4.78	2.00	5.08
Long-Term Debt to Working Capital Ratio	0.11	0.04	0.11	0.04
Operating Margin (%)	5.48	8.10	5.41	8.63
Net Profit Margin (%)	2.71	4.15	2.59	4.68

During FY 2024-25, the Company witnessed a sales decline of approximately 8%, primarily on account of operational disruptions and transitional challenges faced during the migration of its ERP system to SAP. During the year, the Company also availed a term loan of INR 6.15 Cr. from JSB to meet its Capex requirements. In addition, repayment commenced for the BGECL loan, with an installment of INR 18.75 Lakhs during the year. The Cost of Goods Sold (COGS) as a percentage of revenue increased by 5%, primarily due to changes in inventory and consumption patterns. This led to a suppression in EBIT margins.

As a result, there was a decline in key financial ratios, including the Interest Service Coverage Ratio, Debt Service Coverage Ratio, Operating Margin Ratio, and Net Profit Margin. Further, the Return on Net Worth (on a consolidated basis) declined to 4% in FY 2025 as compared to 6% in FY 2024. This decrease is directly attributable to the aforementioned factors.

Risk Management

Effective risk management is crucial for sustaining operations, protecting stakeholder interests, and ensuring lasting success. At Birla Precision Technologies Limited (BPTL), it is integral to the strategic decision-making process. The Board of Directors has established a dedicated Risk Management Committee to oversee this function, demonstrating the Companys proactive approach to identifying, assessing, and mitigating risks that may affect performance, reputation, or growth.

Risk Category	Potential Impact	Mitigation Measures
Market Risk	Dependence on automotive, aerospace, and industrial sectors exposes the Company to industry-specific downturns and market volatility.	• Diversifying the customer base across industries and regions like Railways, EV bus body building, DIY segment. • Conducting ongoing market research to anticipate trends and adjust business strategies accordingly.
Technology & Innovation Risk	Rapid advancements in cutting tools and precision components require continuous innovation to remain competitive.	• Investing in R&D. • Upgrading technologies. • Accelerating product development to align with emerging industry demands.
Operational Risk	Challenges such as manufacturing complexity, supply chain disruptions, and quality control issues may affect delivery timelines and cost efficiency	• Adopting lean manufacturing and operational best practices. • Strengthening and diversifying the supplier network to reduce dependency and ensure continuity.
Regulatory & Compliance Risk	Non-compliance with evolving regulatory frameworks could lead to increased operational costs, penalties, or reputational damage.	• Monitoring regulatory changes periodically. • Implementing training programmes and compliance systems to uphold adherence across all business functions.
Financial Risk	Exposure to foreign exchange fluctuations, liquidity constraints, and market volatility may affect financial stability and profitability.	• Deploying risk management tools, maintaining sufficient liquidity buffers and conducting regular financial health assessments.
Talent & Human Resource Risk	Skill gaps, talent retention challenges, and deficiencies can hinder long- successionplanning term growth and operational continuity.	• Focusing on talent acquisition and employee development initiatives. • Implementing structured succession planning and leadership development programs.
Competitive Risk	Growing competition from domestic and global players intensifies the need for innovation, cost control, and superior customer service.	• Differentiating through product innovation, quality excellence, and service reliability. • Conducting continuous competitor benchmarking and dynamic marketing strategies.

Human Resources

BPTL places employee welfare and professional development at the heart of its organisational philosophy. It is dedicated to creating a supportive, inclusive, and growth-oriented work environment that empowers its workforce. By prioritising qualitative growth, the Company continuously nurtures a workplace culture that promotes open dialogue, collaboration, and continuous learning.

To strengthen internal bonds and boost morale, the Company regularly hosts employee engagement initiatives such as interactive sessions and feedback forums. In line with its commitment to talent development, BPTL developed a Competency Framework, carried out the Competency Assessment of identified employees across all levels, organises structured training programmes like UNNATI for Supervisors (Front Line Managers), PRAGATI for Field Sales Engineers; and SAKSHAM for Workers, delivered by both internal mentors and external experts to enhance technical expertise, leadership skills, and overall domain knowledge. To understand the views of the subordinates and to get a fair and transparent feedback, the Company carried out Managers Upward Feedback for all Managers. The Survey Feedback was shared with all the Managers and, in turn, the Managers prepared the action plan for areas of improvement and shared with their respective team/subordinates. “Saanidhya” Companys monthly newsletter, is a formal communication platform wherein the Company is sharing management vision, mission and core values. New developments across various functions and achievements are shared. Product & Business success stories are celebrated. Employee health and well-being is promoted through various activities like meditation and yoga, capturing exciting moments of the organisation and spreading the message, reaching out to employees and families to create a communication and engagement platform.

The Company also upholds the highest standards of integrity and transparency in all its dealings. No member of the Senior Management has been involved in any financial or commercial activity that could potentially conflict with the Companys overarching objectives. This reinforces BPTLs commitment to ethical governance and responsible leadership. There were 638 permanent employees on the rolls of the Company during FY 2024-25.

Corporate Social Responsibility and Sustainable Development

The Company remains committed to making a meaningful impact through its Corporate Social Responsibility (CSR) and Sustainable Development initiatives. During the financial year 2024·25, the Company incurred a total CSR expenditure of INR 34,00,000, exceeding its statutory obligation of INR 33,50,541.04 under Section 135 of the Companies Act, 2013. In line with its CSR vision, the Company actively supported various impactful initiatives, particularly in the areas of sports development, healthcare, and associated welfare activities. Further details of these initiatives are presented in the CSR Report, which forms an integral part of this Annual Report.

Internal Control Systems and Their Adequacy

The Company has been constantly upgrading its systems to minimise inefficiency and create a streamlined internal structure. In these efforts, the Company has migrated its ERP to SAP.

This improvement helps the Company organise and increase its productivity and overall efficiency.

Cautionary Statement

Statements in this Annual Report, particularly those that relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations, may constitute ‘forward-looking statements within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ.