This Report on Management Discussion and Analysis forms part of the Boards report for the financial year ended 31st March 2026
GLOBAL & INDIAN BUSINESS ENVIRONMENT
Global economic growth moderated during the year 2025 amid elevated geopolitical tension, persistent trade related friction, and tight financial conditions. At the start of 2025, global growth had been estimated at around 2.8%, reflecting concerns over tariff escalation and policy uncertainty; however, economic activity proved more resilient than anticipated, and global GDP growth ultimately realised at 3.4%, supported by strong services demand and front-loaded investment.
Looking ahead, global growth is projected to ease to around 3.1% in 2026, weighed down by the impact of the West-Asia conflict, trade fragmentation, and heightened uncertainty. While near-term risks remain elevated, productivity gains from accelerating adoption of artificial intelligence and increased technology investments could support medium-term growth. Inflationary pressures, remain above historical averages. Global headline inflation is expected to rise modestly in 2026 before moderating in 2027.
Against this backdrop, India continues to display resilience. The Indian economy grew by approximately 7.7% in FY 2025-26. GDP growth is projected at 6.5%-6.9% in FY 2026-27 and FY 2027-28, supported by domestic demand, infrastructure investment, and structural reform progress. While consumption remains strong at the moment aided by lower GST rates, RBI rate cuts, controlled food inflation and healthy agricultural trends, there are headwinds and risks arising from the ongoing West-Asia conflict, and the widely predicted super El Nino phenomenon. Despite the current ceasefire in West Asia, a resumption of
prolonged conflict could lead to higher fuel costs, and a weaker Indian Rupee, and thereby increase inflation and weigh on consumption.
BUSINESS SEGMENTS OVERVIEW
The businesses of the Company grew steadily in a challenging economic environment. A business wise overview and performance is detailed below:
Abrasives
Business Overview
The Abrasives Business operates in the field of surface engineering, offering precision, functional, and durable surface solutions through the manufacture and distribution of rigid and flexible abrasives and adjacent products. Its portfolio comprises Bonded Abrasives, Coated Abrasives, Super Abrasives, Metal Working Fluids, and allied surface finishing solutions.
FY 2025-26 was a year of disciplined execution that laid a solid foundation for the Businesss long-term aspirations. During the year, the Business sharpened its market focus through targeted go-to-market (GTM) initiatives, strengthened customer and channel engagement, and enhanced execution capabilities across the Industrial, Precision, and Retail segments to support scalable and sustainable growth. The Business also commenced commercial production at its Thin Wheels facility at Hosur, using the production lines acquired from DRONCO GmbH, Germany. This highly automated plant will become the Businesss Centre of Excellence for thin wheels, and has been certified by the Organisation for the Safety of Abrasives (oSa).
Financial Performance
( Rs. Million)
| Particulars | Standalone | Consolidated | ||||
| 2025-26 | 2024-25 | Change (%) | 2025-26 | 2024-25 | Change (%) | |
| Revenue | 12,696 | 11,954 | 6 | 22,706 | 21,594 | 5 |
| Segment results (PBIT) | 1,945 | 1,929 | 1 | 966 | 1,514 | -36 |
| Capital employed | 5,981 | 5,326 | 12 | 15,849 | 15,216 | 4 |
| Share to total revenue of CUMI (%) (without eliminations) | 42 | 43 | 44 | 45 | ||
| Share to segment results (PBIT) of CUMI (%) | 37 | 45 | 24 | 28 | ||
Performance Overview
The first half of the year remained challenging due to aggressive import-led competition, elevated channel inventory levels, and liquidity constraints across distribution channels. These challenges were further compounded by pressure on the Exports segment arising from U.S. tariffs.
However, the demand environment improved gradually during the second half of the year, particularly following the GST rate
rationalization, enabling the Business to deliver 6.2% growth for the full year. Performance was supported by several go-to- market initiatives, including channel expansion and sustenance programmes across both established and relatively new markets, secondary sales activation programmes, and multiple new product launches. New products contributed approximately 16.5% of total Abrasives revenue, strengthening the Businesss competitiveness.
Exports recorded positive performance across select markets and product segments. The South East Asian region delivered
strong growth over the previous year, driven by robust demand for products serving the Automotive and Aerospace segments.
Despite these gains, overall exports declined by 4.2% year-on-year as the Company discontinued exports to Russia in view of the prevailing sanctions, and as sales to the U.S. markets were impacted by the reciprocal tariffs.
Manufacturing capacity was strengthened through investments in finishing, conversion, and niche technologies including Hot Press and Internal Grinding. In March 2026, the Greenfield Thin Wheels project at Hosur, commenced commercial production. The Business continued to focus on manufacturing excellence and unit cost optimisation through cross-functional collaboration, delivering encouraging results.
The segment wise performance of Abrasives is detailed below: Industrial Segment
The Industrial segment strengthened its position in core markets by expanding its presence across Class A and B cities, and key industrial clusters, increasing its reach in demand-dense regions. Dealer productivity increased through structured, dealer-led growth and sustenance programmes, while the customer base expanded through deeper engagement with strategic accounts, thereby enhancing share of wallet. Downstream penetration also improved through systematic activation of sub-dealers, strengthening the businesss presence across critical and high-potential locations.
Precision Segment
The Precision segment accelerated its transition to a Key Account Management (KAM)-led operating model, strengthening engagement with direct accounts, as well as dealer- managed accounts. A proactive customer acquisition approach helped on-board new customers and reduce concentration risk. Solution-led selling was strengthened through product introductions for MSMEs, closer collaboration with grinding machine OEMs, and targeted import-substitution initiatives in niche application segments.
Retail Segment
The Retail segment strengthened distribution coverage and frontline productivity through new dealer onboarding, improved territory coverage, and stronger operating discipline. Visibility and control across the channel improved significantly through the digital enablement of secondary sales, providing greater transparency, enhanced analytics, and stronger decision-making capabilities. In addition, structured, state-wise market share improvement programs were launched in underpenetrated regions, delivering encouraging early traction and establishing a strong foundation for future growth.
Overall, the year witnessed meaningful progress in execution discipline, channel strength, and customer engagement. Investments in capability building, digital infrastructure, and structured market programs have positioned the Abrasives business to improve consistency in performance, and sustain its competitive advantage.
Strategic Focus
Execution in the Abrasives business was guided by clear priorities: winning in chosen markets, deepening customer engagement, strengthening distribution as a competitive moat, and building execution excellence. These priorities translated into sharper market segmentation, structured go-to-market models, and stronger operating discipline across the business.
The Abrasives business continues to strengthen its distribution network while focusing on innovative and cost-competitive product development. Expansion into under-penetrated domestic markets, development of new products and strategic sourcing of complementary product portfolios remain key priorities in addressing competition from imports.
Competitive Positioning and Industry Dynamics
The Company continues to be a major player in the Indian Abrasives Industry, serving a diverse set of end-user industries including Automotive, Construction, Bearings, Woodworking, Heavy engineering, Foundry, and Forgings.
The global Abrasives market, estimated at USD 48.2 billion in 2025, is expected to grow at a CAGR of 5.0% to reach USD 64.6 billion by 2031. The Indian Abrasive Industry is estimated at USD 1.1 billion in 2025 and is expected to grow at ~ 8-9% to reach USD 1.8 billion by 2031. The Indian Abrasives Industry continued to expand steadily, supported by growth in the industrial and infrastructure sectors.
Opportunities & Threats
Opportunities
• Technological shifts towards high-performance and super abrasives, coupled with increasing emphasis on eco-friendly and recyclable products, are reshaping competitive differentiation.
• Sustainability-related investments are becoming critical to meeting regulatory requirements and evolving customer expectations.
Threats
• Pricing pressure from low-cost imports.
• Entry of players from adjacent product segment impacting market pricing.
• Intensifying competition in technology-led products.
• Volatility in raw material prices, particularly aluminium oxide, silicon carbide and chemicals.
• Availability of flexible labour, reinforcing the need for automation and labour-mix optimisation.
Business Outlook
Industrial activity softened temporarily towards the end of FY 2025-26, but structural growth drivers such as manufacturing localisation, infrastructure build-out, EV adoption, and precision engineering remain strong.
The Automotive sector is expected to normalise in FY 2026-27, while demand from construction and infrastructure sectors is likely to remain strong, supported by public sector capex and consumer demand. Continued focus on expanding railway infrastructure, strengthening indigenous defence manufacturing, and accelerating the adoption of high-precision and automated production processes is expected to drive demand for high-performance abrasives, as manufacturers prioritise efficient and consistent grinding and finishing solutions to meet tight tolerance requirements, improve productivity, and maintain repeatable quality.
Recent Free Trade Agreement (FTA) signed by the Indian Government strengthen opportunities in export-oriented manufacturing, however, the ongoing uncertainty around U.S. tariff policies remain a key risk that could potentially impact export competitiveness and demand visibility.
The conflict in West Asia towards the end of the year caused some disruption in March 2026, with cost pressures emerging in subsequent periods due to rising input, fuel, and packaging costs. At the same time, demand for locally manufactured abrasives is expected to strengthen due to import-related supply uncertainties.
Ceramics Segment (Including Industrial Ceramics and Refractories)
Industrial Ceramics
Business Overview
The Industrial Ceramics business manufactures advanced ceramics and high-performance materials for demanding and mission-critical applications. With over 30+ unique formulations, its products deliver exceptional performance in wear resistance, electrical insulation, corrosion resistance, and personnel and vehicle protection. The business serves a broad range of industries including Mining and Mineral processing, Power and Energy systems, Mobility (electric vehicles and ICE vehicles), Semiconductors and Electronics, Aerospace and Defence. The business is built on a strong foundation of technology, advanced manufacturing, design, and application engineering.
The business has a strong global presence, with exports contributing about 75% of the overall revenues. Its operations are supported by manufacturing facilities in India, and a service and distribution network spanning key focus markets, including the USA, Australia, Europe and other parts of the world. The business has three broad product segments, namely wear protection, precision engineered ceramics, and metallized ceramics.
The Wear Ceramics and services business address critical wear applications across Mining and Mineral Processing, Steel, Power, Cement and, General bulk material handling. During the year, the business continued to innovate through a solutions-led approach through onsite wear audits and design-based differentiation, enabling customers to improve equipment performance, and extend asset life. Despite a challenging operating environment marked by project deferments and delays in maintenance activities, the business remained focused on innovation and customer support across Australia, India, and the USA.
The precision engineered ceramics business serves demanding applications across Solid Oxide Fuel Cells, hydrogen electrolysers, mobility and other advanced industrial sectors. A strong focus on product development and continuous process innovation enabled the division to introduce new products in collaboration with leading global customers across the U.S., Japan and India.
The Metallized Cylinders business is a global major, and a strategic supplier to global OEMs in the field of power distribution and vacuum electronics. With the objective of becoming a leader in metallized alumina cylinders for vacuum interrupters, the business continues to expand its capabilities and capacities.
During the year, the business established dedicated facilities for the manufacture of advanced ceramic components for semiconductor wafer fabrication equipment, as well as advanced ceramics for personnel and vehicle armour protection in the defence sector. Work is also underway to build capabilities in advanced electronic components, through partnerships with leading global technology companies. In addition, the business is expanding into AMB/DBC (Active Metal Brazed, Direct Bonded Copper) substrates and brazed assemblies for power electronics. These initiatives are closely aligned with its aspiration of becoming a leading global player in advanced ceramics.
Financial Performance
( Rs. Million)
| Particulars | Standalone | Consolidated | ||||
| 2025-26 | 2024-25 | Change (%) | 2025-26 | 2024-25 | Change (%) | |
| Revenue | 10,001 | 9,387 | 7 | 12,680 | 11,601 | 9 |
| Segment results (PBIT) | 2,145 | 2,331 | -8 | 2,562 | 2,865 | -11 |
| Capital employed | 6,168 | 5,319 | 16 | 9,336 | 8,061 | 16 |
| Share to total revenue of CUMI (%) (without eliminations) | 33 | 34 | 25 | 24 | ||
| Share to segment results (PBIT) of CUMI (%) | 41 | 55 | 63 | 53 | ||
The business delivered stable growth in FY 2025-26 despite significant global headwinds and market volatility. While project execution and regular maintenance activities were deferred across core end-user industries, the year also witnessed the emergence of significant opportunities in high-growth sectors such as Artificial Intelligence (AI) data centres.
Consequently, segments serving sustainable power generation, through platforms like Solid Oxide Fuel Cells, and power distribution recorded strong growth during the year. In particular, the Engineered Ceramics business for Solid Oxide Fuel Cells witnessed significant growth, while Metallized Cylinders for Vacuum Interrupters continued to deliver steady growth. The Wear Ceramics business, however, was impacted by the deferment of projects and a slowdown in maintenance activity across the Mining and Mineral processing, and Thermal power industries. On the Exports side, the Wear Ceramics business was also impacted by uncertainties around U.S. tariffs.
Strategic Focus
As a part of the Companys long-term aspirations, the business has articulated a clear roadmap to becoming a leading global player in advanced ceramics. This roadmap focuses on strengthening its core segments, while building a strong presence in high-growth, emerging segments such as Semiconductors, Electronics, Aerospace and Defence. To support its strategic direction in core segments, the business plans to significantly expand its metallized cylinder capacity, and to enhance its production facilities to meet the growing demand for SOFCs. In the emerging segments, the business deployed significant capital expenditure and resources during FY 2025-26 to establish dedicated facilities for Semiconductor Wafer Fabrication components and Aerospace Defence applications. Importantly, leading global OEMs were onboarded as key customers, and anchor customers across the emerging programmes, with product qualifications successfully completed for serial supply. In the electronics segment, significant progress was made in finalising a technology partnership, with the partner expected to be onboarded from FY 2026-27 onwards.
Competitive Positioning and Industry Dynamics
The competitive position of the business continued to vary across product segments against the backdrop of subdued performance and customer caution in select core end-markets. In the Indian and Australian markets, wear-led applications such as mining and metals, and thermal power witnessed soft demand, with the deferment of projects and maintenance activities, and intensifying price-based competition in Wear Ceramics, particularly from low-cost imports and regional fabricators. In Metallized Cylinders, competitive intensity remained moderate and was primarily governed by installed capacity, stringent qualification requirements and high levels of OEM lock-in. Accordingly, the small business focused on incremental capacity expansion, yield improvement, and deepening its share with existing OEMs.
In Engineered Ceramics, the competitive intensity remained moderate to high, with differentiation increasingly determined by process maturity, field reliability and proven scale-up capability. In the emerging segments of Semiconductors, Aerospace and Defence, and Electronics, competitive intensity remained high, characterised by leading global ceramic manufactures with deep intellectual property portfolios and long qualification histories. During the year, the Business remained focused on a capability- first approach, partnership-led development and phased customer-led market entry.
Opportunities and Threats
Opportunities:
• Power Transmission & Distribution: Growth supported by grid modernisation and sustainability initiatives, including renewable energy integration and the phased replacement of Sulphur Hexaflouride-based equipment.
• SOFC: Accelerated demand driven by AI data centres and the broader hydrogen transition.
• Semiconductors: Upcycle in wafer fabrication equipment driven by advanced packaging and AI-led fab expansion.
• Electronics: Growth led by EV power modules, healthcare and defence applications.
• Defence: Sustained tailwinds from higher defence spending and localisation initiatives.
Threats:
• Global disruptions and market fragmentation arising from trade tensions, tariffs, and geopolitical conflicts.
• Continued price-led competition in Wear Ceramics from low-cost imports and regional fabricators.
• Capacity constraints in Metallized Cylinders, necessitating continuous yield improvement and capacity expansion.
¦ Long qualification cycles in emerging segments such as - Semiconductors, Electronics and Defence.
Business Outlook
The outlook for the Industrial Ceramics business remains stable and positive, supported by selective growth tailwinds in Power, Clean energy, Electronics, and Semiconductor-related applications, even as certain core wear-led end-markets continue their gradual recovery.
Demand drivers in Power T&D are expected to remain favourable, supported by grid modernisation initiatives and the ongoing transition away from SF6-based solutions.
In Engineered Ceramics, the SOFC ecosystem is witnessing accelerated adoption, driven by rising power requirements for AI data centres and the broader energy transition, creating a significant opportunity to scale platform-led solutions with customers.
In parallel, electronics applications are expected to expand on the back of increasing adoption of EV power modules and growing demand from Healthcare, Aerospace and Defence applications. The Semiconductor value chain is also poised for growth, supported by advanced packaging requirements and AI-led fab investments, with the conversion of opportunities contingent on product qualification milestones and customer programme timelines.
Competitive intensity is expected to remain elevated across select verticals, particularly in wear applications.
Accordingly, the business intends to prioritise disciplined execution of capacity expansion and yield improvement initiatives, capability build-out in emerging verticals, and a structural cost reset and solution-led mix improvement in Wear Ceramics to enhance competitiveness and protect margins.
Refractories and Composites
Business Overview
The Companys Super Refractories business offers a comprehensive portfolio of thermal protection, corrosion protection, and composite material solutions for critical industrial applications, underpinned by over six decades of engineering expertise and application know-how.
The Businesss thermal protection portfolio comprises specialised fired and monolithic refractories engineered to perform reliably under severe thermal, mechanical, and process conditions. These solutions serve a broad range of industries, including Iron & Steel, Non-ferrous metals, Cement, Glass, Carbon black, Fertilisers, Chemicals, Energy, and allied process industries, where performance consistency, and lifecycle reliability are critical.
The Businesss corrosion protection portfolio address chemically aggressive and structurally demanding environments across industries such as fertilisers, non-ferrous metals, chemicals, steel, recycling, and metal recovery. The portfolio comprises chemical-resistant linings, masonry systems, protective coatings, and Fiber Reinforced Polymer (FRP) process equipment, designed to safeguard assets, enhance operational reliability, and extend equipment life in highly corrosive operating environments.
The composites portfolio spans structural and advanced composites, supporting demanding applications in renewable Energy, Mobility, Aerospace and Defence, and specialised industrial segments. The business delivers precision-engineered fibre-reinforced components and carbon-fibre-based structural solutions, combining advanced materials, manufacturing expertise, and application engineering capabilities to address complex customer requirements.
Performance Overview
The Super Refractories business delivered a resilient and balanced performance in FY 2025-26 despite uneven market conditions characterized by uncertainty in investment cycles, project delays, and geopolitical disruptions. While refractories business was
impacted by these factors, the corrosion protection business emerged as a principal growth driver, supported by robust order pipeline and strong project execution.
Operationally, the business remained focused on managing execution peaks, maintaining customer engagement, and ensuring high service levels across critical applications. As deferred investments began to materialise during the latter part of the year, the business further strengthened its execution capabilities across complex domestic and international projects, reinforcing its execution credentials and expanding its portfolio of customer references.
Performance in the Refractories business was selective and application-driven, reflecting customers prioritisation of critical assets and high-value applications over broad-based volume growth. Growth during the year was supported by exports of fired refractories, with significant contributions from project orders in the Glass, Carbon black, and Iron & Steel industries. The business also recorded healthy demand from glass applications, particularly for high-purity and engineered products, as well as from chemical processing applications operating under demanding thermal and service conditions. Furnace and heat treatment applications benefited from refurbishment and maintenance activities, while energy and power applications were supported by lifecycle-based maintenance demand. In addition, the business strengthened its market reach through its network of dealers and associates. Performance across the remaining refractory portfolio was mixed, reflecting the timing of customer investments and varying levels of competitive intensity across end-markets.
Corrosion Protection was the principal growth driver during the year, supported by sustained demand across a diverse set of industrial applications. Growth was led by the Fertilisers and Chemicals sectors, where activity remained strong in highly corrosive process environments, and by the non-ferrous industries, reflecting deeper penetration into equipment protection and asset life extension applications. Petrochemical applications also scaled up during the year, expanding the addressable market, while defence-related requirements reinforced the strategic relevance of the businesss advanced and structural composites portfolio.
Strategic Focus
The strategy of the Super Refractories business, in line with the long-term aspirations of the Company, lays a clear emphasis on value-accretive and sustainable growth. The strategic focus is on deepening the shift from volume-led to solution-led engagement through the following priorities:
• Increasing the share of engineered fired products in the Glass, Ceramics, and Chemical processing industries, where performance consistency, reliability, and lifecycle value outweigh price-based competition;
• Strengthening and expanding the monolithic refractories portfolio in the Iron & Steel and Cement industries through
customised solutions, service-led engagement, and longterm supply arrangements that enhance customer retention and campaign performance;
• Expanding the corrosion protection business through deeper participation in the fertilisers, chemicals, and non-ferrous industries, while broadening its domestic and global market presence; and
• Selectively scaling the structural and advanced composites portfolio through programme-led opportunities, while maintaining disciplined capital allocation and a strong focus on risk-adjusted returns.
This strategy is underpinned by strong manufacturing discipline, deep application engineering capabilities, and a growing base of international reference projects, providing a clear and credible pathway toward the businesses long-term aspirations.
Competitive Positioning and Industry Dynamics
The Indian Super refractories market continues to face intense competition, particularly in standard products used in the iron & steel and cement industries, exerting sustained pressure on pricing. At the same time, customers in sectors such as Glass, Chemicals, Fertilisers, Energy, and allied industries are increasingly prioritising performance, reliability, and long-term value, especially for critical and high-severity applications.
Within this operating context, the Super Refractories business of the Company is positioned as a capability-led, solutions-oriented player, differentiated from commodity suppliers. The business leverages strong material science expertise, deep process understanding, and application engineering capability to deliver customised fired refractories, specialised monolithics, advanced corrosion protection systems, and high-performance composite solutions tailored to demanding operating environments. These application-led solutions enable customers to achieve consistent performance, extended equipment life, and reliable operations.
Supported by ongoing innovation, a growing international footprint, and a deliberate shift toward solution-based customer engagement, the Super Refractories business is well positioned to grow profitably and remain resilient across competitive and cyclical market conditions, while sustaining a differentiated value proposition built on expertise, execution, and long-term customer partnerships.
Opportunities and Threats Opportunities
• Greater focus on niche products - Increasing demand for specialised, high-performance refractory products where quality, reliability, technical expertise and application support are key differentiators.
• Solutions-led approach - Transitioning from one-time product sales to customised solutions, long-term supply contracts, and value-added service offerings, strengthening customer relationships and retention.
• Deeper customer engagement - Increasing share of business with existing customers through integrated offerings spanning design, supply, installation, and maintenance.
• Stable volume growth - Selective expansion through repeat business and planned customer investments, supported by consistent execution and delivery reliability.
• Future growth platforms - Scaling advanced and structural composites as focused, high-value growth platforms while protecting the core business.
• Broader market presence - Expanding export markets, increasing import substitution, and developing application-specific solutions across industries.
• Cost and supply resilience - Enhancing sourcing flexibility, material design, and process efficiency to mitigate raw material price volatility and strengthen supply chain resilience.
Threats
• Price-driven competition from low-cost domestic and overseas suppliers in standard refractory products.
• High competition in monolithic refractories due to low barriers to entry, leading to aggressive pricing and margin pressure.
• Project-based margin pressure arising from competitive intensity in corrosion protection projects.
• Execution-intensive composite markets characterised by high efficiency requirements, tight delivery timelines, and long qualification cycles.
• Geopolitical and trade risks impacting exports and supply chains through uncertainties, tariffs, and trade restrictions.
Business Outlook
Demand for the businesss refractories, corrosion protection, and composites portfolio is driven by sustained expansion across core industries and is increasingly shaped by value-led-growth, performance, and lifecycle efficiency. Iron & steel remains the largest end market, supported by infrastructure development, manufacturing growth, and Indias aspiration to expand steelmaking capacity to 300 million tonnes.
While volumes continue to matter, customer preferences are steadily shifting toward engineered, high-purity, application-specific refractory solutions that deliver longer campaign life, improved reliability, and lower total cost of ownership. This transition is reinforced by emerging low-carbon ironmaking routes, such as, gas-based Direct Reduced Iron (DRI), Electric Arc Furnace (EAF) steelmaking, and hydrogen-enabled processes, which create incremental opportunities for advanced, high-purity refractories tailored to new operating environments and cleaner process flows.
Beyond Steel, sectors such as Cement and Glass, which are expected to grow at ~7%-8%, and ~5% -7% respectively, provide a broad and resilient demand base, supported by infrastructure growth and periodic rebuild cycles. While Cement remains cost-sensitive, customers are increasingly adopting performance-oriented monolithic and fired refractory products that enhance kiln life and reduce downtime.
Non-ferrous metals, particularly aluminium and copper, are projected to grow at ~7-10%, driven by electrification, renewable energy, and electric mobility, creating opportunities for high-performance refractories and corrosion protection systems across smelting and downstream processes. In parallel, expanding refining, petrochemical, and fertiliser industries continue to support demand for anti-corrosive linings and FRP composite solutions. The circular economy, including recovery of non-ferrous and battery materials, is further intensifying demand for chemical-resistant linings and composites to protect assets and enable efficient recycling.
Together, these trends reinforce the Companys positioning as a solution-led provider of high-performance, sustainable materials, aligned to customers evolving needs for reliability, efficiency, and long-term asset protection.
Electrominerals Segment
Business Overview
The Electrominerals business (EMD) specialises in the production and distribution of high-performance grains and powders, and caters to the requirements of Abrasives, Refractories, Polishing, Auto- component, Car detailing, Electronics, Friction, Composites, Wooden laminates and Semiconductor industries. With a comprehensive portfolio spanning bauxite, fused aluminas, silicon carbide, fine powders, zirconia and ceramic grains, the business has established a strong market position in India and built a significant presence in global markets.
The global demand for industrial minerals is driven by a shift toward high-purity materials and sustainable supply chains. As global manufacturers seek to diversify away from traditional
sourcing hubs, Indias position as a reliable, quality-focused source of supply has strengthened. The global fused minerals demand is experiencing steady growth driven by expanding industrial applications in manufacturing.
The business maintains a leading position in domestic markets and a strong competitive position in global markets through its diverse portfolio and specialised processing capabilities. Its competitive advantage is rooted in its ability to meet stringent international standards including REACH compliance, adapting quickly to changing trade regulations, and accelerating product qualification enabling market share gain in high-entry-barrier markets such as Europe.
EMD is successfully transforming from a bulk mineral producer into a technology-first materials solutions provider. This transition is underpinned by an integrated innovation ecosystem, leveraging partnerships with Maker Village and the Digital University of Kerala to bridge the gap between mines and market and accelerate product development. Sustainability has also emerged as a key differentiator, with the introduction of low-carbon minerals as a distinct product category in FY 2025 -26. By optimising its fusion process at Cochin, the Business is able to offer minerals with a certified lower carbon footprint. In addition, the business is increasingly focused on delivering high-purity, application-engineered materials rather than conventional chemistry-based products, enabling customers to enhance the performance and service life of their end products.
During the year, the business undertook capital expenditure to enhance the capacity of a 2.0 MVA furnace to a 4.5 MVA furnace, and to add tunnel and rotary kilns to expand its treatment facilities. In addition, work commenced on a 110 KV substation to support future fusion capacities. Investments were also made towards establishing pilot facilities for high-purity silicon carbide (HpSiC). During the year, the business achieved 5N purity in HpSiC, and identified the technology route towards achieving 6N purity HpSiC. The business entered into a technology partnership with CSIR-CGCRI for the development of ceramic powders for SOFCs and SOECs. The business also entered into a technology partnership for the development of nitrides.
Financial Performance ( Rs. Million)
| Particular | Standalone | Consolidated | ||||
| 2025-26 | 2024-25 | Change (%) | 2025-26 | 2024-25 | Change (%) | |
| Revenue | 9,060 | 8,155 | 11 | 16,318 | 15,736 | 4 |
| Segment results (PBIT) | 821 | 626 | 31 | 909 | 1,774 | -49 |
| Capital employed | 4,089 | 3,472 | 18 | 11,458 | 9,847 | 16 |
| Share to total revenue of CUMI (%) (without eliminations) | 30 | 29 | 32 | 33 | ||
| Share to segment results (PBIT) of CUMI (%) | 16 | 15 | 23 | 33 | ||
During the year, the business delivered a resilient performance achieving a healthy balance between volume growth and value realisation. Sales demonstrated consistent quarter-on-quarter and year-on-year growth. Through its agility in responding to market trends, the business was able to increase its share of Exports to over 30%.
Despite global supply chain volatility and competitive pressures from low-cost imports, the division successfully pivoted towards high-value speciality grains and optimised its product mix to sustain margins.
Strategic Focus
EMD has set ambitious expansions plans over the next few years. Major expansions include addition of capacity in fused alumina business primarily in expanding capability in treated products. It also aims to expand the Zirconia portfolio with capability additions in furnacing and grain processing. The business will add significant process capability in its Thermal Spray portfolio with end-to-end process revamp and addition of exclusive integrated furnacing and an automated grain processing facility. The Company has also made significant progress in capacity expansion for HpSiC 5N purity and advanced nitrides manufacturing. These are expected to be completed in FY 2026-27.
Competitive Positioning and Industry Dynamics
The Electrominerals industry is experiencing increased competitive intensity, particularly in India, with the emergence of several local manufacturers driven by robust demand from Refractory and Abrasives segments, which continue to be the primary end-use applications for electrominerals. This growth in domestic manufacturing capacity has intensified competition on pricing and availability. At the same time, customers are placing higher emphasis on quality consistency, process reliability, and assured supply, especially for critical applications, leading to a gradual shift towards capability-led suppliers.
Within this competitive landscape, EMD is well positioned through its integrated manufacturing footprint, strong process know-how, and long-standing customer relationships across key end-user industries. A key competitive advantage is the Companys secure access to energy, including investments in renewable energy projects, which supports cost stability, operational reliability, and sustainability objectives. Strengthened with continuous investments in technology and R&D, the business holds a competitive edge and is able to sustain competitive performance in a dynamic market environment.
Opportunities & Threats
Opportunities
• Integrated manufacturing process with end-to-end process capability.
• Growing Demand from clean energy and electrification.
• Import substitution and localisation in India.
• Expansion of downstream end use industries such as steel, refractories, chemicals etc.
Threats
• Regulatory Shifts: Changes in international trade duties and carbon emission norms require constant monitoring. The strategy is to stay ahead of compliance requirements to turn potential barriers into competitive advantages.
• Supply Chain Volatility: Fluctuations in energy costs and raw material availability are managed through strategic sourcing and continuous improvements in energy-efficient manufacturing processes.
Business outlook
The industry outlook remains positive, supported by increased infrastructure spending and the global transition toward greener manufacturing technologies. The business expects to benefit from tightening environmental regulations and rising demand for high-performance materials across the Energy, Aerospace, and other advanced manufacturing sectors. To support this opportunity, the business is undertaking strategic capacity expansion in treated grain facilities, which is expected to ease the capacity constraints in the Zirconia and Treated Alumina portfolios. With the new treatment facilities scheduled to commence commercial production over FY 2026-27, the business will be well positioned to meet the anticipated growth in demand. The business also expects to sustain its export momentum by leveraging evolving global supply chains and expanding its presence in international markets. Product approvals and growing acceptance among global customers are expected to further support export growth. At the same time, the business remains focused on strengthening operational resilience through cost optimisation, greater sourcing flexibility, and the effective use of local manufacturing capabilities and global sourcing to mitigate the impact of energy costs, raw material volatility, and logistics disruptions.
FINANCIAL PERFORMANCE AND ANALYSIS OF THE COMPANY
During the year under review, the Standalone revenues increased by 9% to 30,244 million from 27,837 million in the previous year. On a standalone basis, the Abrasives grew at 6% to 12,696 million from 11,954 million in the previous year, the Ceramics segment grew at 7% to 10,001 million from 9,387 million in the previous year and the Electrominerals segment grew at 11% to 9,060 million from 8,155 million in the previous year.
During the year under review, the consolidated revenues stood at 51,494 million which grew by 7% from 48,335 million in the previous year driven by the Ceramics segment followed by Abrasives and Electrominerals. On a consolidated basis, the Electrominerals segment grew at 4% to 16,318 million from 15,735 million in the previous year, the Ceramics segment grew at 9% to 12,680 million from 11,601 million in the previous year and Abrasives at 5% to 22,706 million from 21,594 million in the previous year.
An overview of the Companys financial position - on a standalone and consolidated basis is given below:
( Rs. Million)
| Financial position | Standalone | Consolidated | ||||
| 1 | 31.03.2026 | 31.03.2025 | %Change | 31.03.2026 | 31.03.2025 | %Change |
| Net Fixed assets (including goodwill and Right of use asset) | 8,216 | 6,646 | 24% | 20,471 | 18,344 | 12% |
| Investments - Non current | 10,993 | 10,996 | 0% | 1,988 | 2,014 | -1% |
Other assets: |
||||||
| - Inventories | 4,669 | 4,421 | 6% | 11,172 | 10,550 | 6% |
| - Trade receivables | 5,448 | 4,519 | 21% | 8,908 | 7,662 | 16% |
| - Cash and cash equivalents | 2,029 | 858 | 136% | 6,979 | 3,779 | 85% |
| - Other assets | 1,371 | 1,224 | 12% | 3,387 | 4,084 | -17% |
Total assets |
32,726 | 28,664 | 14% | 52,905 | 46,433 | 14% |
| Liabilities (Other than loans) | 3,630 | 3,081 | 18% | 9,772 | 8,472 | 15% |
Net assets |
29,096 | 25,583 | 14% | ALIGN=RIGHT>43,133 | 37,961 | 14% |
Sources of funding: |
||||||
| Total equity attributable to owner | 29,096 | 25,583 | 14% | 38,998 | 35,286 | 11% |
| Non - Controlling interest | - | - | - | 1,085 | 1,472 | -26% |
Loan outstanding: |
||||||
| - Long term borrowings | - | - | - | 258 | 249 | 4% |
| Payable within one year | - | - | ||||
| - Short term borrowings | - | - | 2,792 | 954 | 193% | |
| - Lease liabilities | - | - | - | - | - | |
Total loans |
- | - | - | 3,050 | 1,203 | 154% |
| 29,096 | 25,583 | 14% | 43,133 | 37,961 | 14% | |
Loans (net of cash and cash equivalents) |
(2,029) | (858) | 136% | (3,929) | (2,576) | 52% |
The Companys cash flow is healthy. The following table summarises the Companys standalone and consolidated cash flows for the current and previous year:
( Rs. Million)
| Cash flow | Standalone | Consolidated | ||
| 2025-26 | 2024-25 | 2025-26 | 2024-25 | |
| Cash flow from Operations | 4,140 | 3,031 | 5,386 | 5,020 |
| Taxes paid | (1,125) | (1,127) | (1,713) | (1,978) |
Cash flow from operating activities |
3,015 | 1,904 | 3,673 | 3,042 |
| Capital Expenditure (Net of disposal) | (2,317) | (1,835) | (3,074) | (2,768) |
| Cash flow from other investing activities | 1,214 | (228) | 904 | (1,058) |
Cash flow from investing activities |
(1,103) | (2,063) | (2,170) | (3,826) |
Cash flow from financing activities |
(741) | (709) | 1192 | (1,099) |
| Net increase/(Decrease) in Cash & Cash equivalents | 1,171 | (868) | 2,695 | (1,883) |
Net Cash and Cash equivalents at the beginning of the year |
858 | 1,726 | 3,779 | 5,549 |
| Effect of exchange rate changes on the balances of cash and cash equivalents held in foreign currencies | - | - | 505 | 113 |
Cash and Cash equivalents at the end of the year |
2,029 | 858 | 6,979 | 3,779 |
MANUFACTURING CENTRE OF EXCELLENCE (MCOE) - IMEX LED PROGRESS
The Company continues to strengthen its manufacturing competitiveness through the Integrated Manufacturing Excellence (IMEx) framework. IMEx provides a common operating backbone across businesses, integrating people capability, process
discipline, technology adoption and targeted capital investments to deliver sustained improvements in quality, delivery reliability and cost competitiveness.
During the year, manufacturing initiatives focused on stabilising core operations, enhancing equipment reliability, improving
process flow and selectively expanding capacity, aligned to long term business requirements.
IMEx in execution: key highlights
Reimagining the Operator and Process Discipline
Shopfloor execution was strengthened through improved standard operating procedures, Jishu Hozen practices and visual management systems, enhancing safety, quality ownership and early abnormality detection. Select automation, error proofing mechanisms and inspection support systems were implemented to reduce manual variation while retaining process ownership.
Turbocharging Plant Performance through Process and Capacity Augmentation
Across businesses, capital investments were undertaken to improve throughput, consistency, energy efficiency and infrastructure robustness:
• In Electrominerals, furnace capacity expansion, treated alumina facilities (rotary and tunnel routes) and a 110 kV substation upgrade have been initiated and are currently underway. These investments are expected to strengthen melting capability, improve product consistency and enhance power reliability.
• In Abrasives, capacity and process investments in thin wheels and key manufacturing areas, including curing and pressing, improved throughput and process stability.
• In Industrial Ceramics, investments spanning Semiconductor, Defence, Electronics and Automotive applications enhanced precision capability, product range and layout flow, supported by advanced cutting and processing equipment.
• In Super Refractories, automation in batching, tamping, material storage (Automated Storage and Retrieval Systems) and composite processing improved consistency, handling efficiency and space utilisation.
These investments were complemented by focused loss reduction, maintenance strengthening and energy optimisation initiatives.
Empowered Teams and Capability Building
Cross-functional teams were deployed for commissioning, stabilisation and ramp-up of new assets. Capability was strengthened through the Manufacturing Excellence Academy, combining Lean, technical and problem-solving skills, ensuring effective absorption of new technologies and processes.
Lean and QRM as Core Enablers
Lean principles remained the primary execution engine, supported by Quick Response Manufacturing (QRM) practices in select areas. Value stream analysis, loss monitoring and standard work updates enabled improved flow, reduced variability and enhanced responsiveness.
Digital and Infrastructure for Sustained Performance
Digital initiatives, including advanced inspection systems, equipment monitoring solutions and integrated production planning tools, enhanced visibility and data-driven decision making. Infrastructure upgrades ensured readiness for future scale while maintaining operational resilience.
Outcomes and Outlook
Manufacturing performance was tracked through structured governance covering key parameters such as equipment effectiveness, delivery performance, quality, yield, lead time and cost. The year saw improvements in yield, lead times in select value streams, energy efficiency and successful commissioning of key capacity and automation projects, alongside safety and quality recognitions.
Going forward, MCOE will focus on strengthening quality systems, deepening Lean adoption, scaling digital enablement and progressing IMEx maturity assessments to sustain and build upon these gains.
SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS AND ENTERPRISE VALUE ADDITION Key Financial Ratios on a standalone basis
Parameter |
2025-26 | 2024-25 | Favourable/ (Adverse) in % |
| R O C E (%) | 18.1 | 16.7 | 8.2 |
| Debt Equity (times) | - | - | - |
| PBT (%) to Sales | 17.4 | 15.3 | 13.6 |
| Asset turnover (times) | 1.54 | 1.68 | (8.3) |
| Receivable turnover (days) | 60 | 54 | 10.4 |
| Inventory turnover (days) | 55 | 53 | 3.7 |
| Interest Coverage Ratio (times) | 3,241 | 2,548 | 27.2 |
| Current Ratio (times) | 3.8 | 3.6 | 4.7 |
| Operating Profit Margin (%) | 12.8 | 13.9 | (8) |
| Net Profit Margin (%) | 13.8 | 11.6 | 18.7 |
| Return on Net Worth (%) | 15.2 | 13.2 | 15.4 |
During the year under review, the Company had an improvement in key ratios such as Return on Capital Employed (ROCE), Profit Before Tax (PBT) to Sales ratio, Net Profit Margin, Return on Net Worth and Interest coverage ratio, primarily driven by enhanced overall profitability.
Other key ratios, including Asset Turnover, Receivables Turnover, Inventory Turnover, and the Current Ratio, also recorded a
marginal increase, attributable to a proportionately higher growth in the underlying asset base compared to sales.
However, the Operating Profit Margin experienced a marginal decline due to a slight reduction in operating-level profitability.
Enterprise Value Addition on a standalone basis
The Company has been able to continuously add value, the summary of which is given below:
( Rs. Million)
| Particulars | 2025-26 | 2024-25 | 2023-24 | 2022-23 | 2021-22 |
Generation of Gross Value added (excludes exceptional items(net)) |
9391 | 7985 | 7963 | 7201 | 6275 |
Breakup on Application of Value added |
- | - | - | - | - |
| Payment to Employees and Directors | 3196 | 2925 | 2606 | 2389 | 2169 |
| Payment to Shareholders (on payment basis) | 762 | 761 | 665 | 665 | 569 |
| Payment to Government | 1098 | 1063 | 1123 | 1050 | 899 |
| Payment to Lender | - | - | - | - | - |
| Towards replacement and expansion | 4335 | 3236 | 3569 | 3097 | 2638 |
| 9391 | 7985 | 7963 | 7201 | 6275 |
Notes:
1. Gross value added is Revenue Less Expenditure (excluding depreciation + expenditure on employee & directors service + long term interest).
2. Payment to Government is Current tax + Dividend distribution tax.
3. Towards replacement and expansion is Retained earnings + Depreciation + Deferred tax.
OUTLOOK AND FUTURE STRATEGY Global outlook
The global economic outlook for 2026 remains fragile, shaped by a mix of supportive factors and emerging risks. Growth is projected at around 3.1%, slightly lower than recent years, as the positive momentum from technology investments, accommodative financial conditions, and policy support is partly offset by rising geopolitical tensions, particularly the conflict in the West-Asia. This conflict has introduced uncertainty through its impact on commodity prices, inflation expectations, and financial markets, leading to a modest upward revision in global inflation to about 4.4% in 2026. While the baseline assumes that disruptions will ease by mid-2026, risks remain tilted to the downside, especially if the conflict intensifies or persists, which could further slow growth and increase inflation. At the same time, opportunities from Al-driven productivity gains and easing trade tensions could provide some upside, but overall, the global economy is expected to grow at a slower and more uncertain pace compared to historical trends.
Amidst this environment of heightened global volatility and rising cost pressures, the Reserve Bank of India has projected Indias real GDP growth for FY 27 at 6.9%. Growth is expected to be supported by resilient domestic demand, the interim trade agreement with the United States and the resulting favourable tariff environment, as well as progress on the Free Trade Agreement with the European Union.
The growth trajectory is further underpinned by continued emphasis on infrastructure and public capital expenditure, with a focus on strategic areas such as high-speed rail projects, development of rare earth corridors, Semiconductor Mission 2.0, and carbon capture initiatives.
Following the outbreak of the Iran conflict, fuel prices have increased, with some supply constraints on the PNG side. Furnaces across divisions have the flexibility to operate on dual nozzle systems, using liquid fuels or gas interchangeably. Price increases have been observed across commodities and packaging materials, particularly in petroleum derivatives, including acrylics, latex, resins, packaging plastics, polymers, and formaldehyde. Alumina prices have remained relatively soft through the first half of the year; however, the return of aluminum capacities could influence alumina pricing going forward.
For businesses dependent on imported speciality alumina, a structured indigenisation program is underway, supporting the development and qualification of domestic alternatives for critical grain requirements.
On the logistics front, freight and insurance have moved upward, and in certain cases, shipping timelines have extended. Input cost inflation is expected to be passed through to the market in a phased manner to balance demand conditions while maintaining market competitiveness. On the currency front, the Indian Rupee has depreciated sharply to hit record lows, thus impacting the cost of all imported materials. Input cost increase will be pushed
to the markets in a phased manner, to manage demand and market share. Despite the increase in input costs, the availability of raw materials remains stable, supported by the long-standing relationships of the Company with key suppliers.
Long-term aspiration
During FY 2023-24, the Company articulated its long-term vision, Aspirations 2030, to drive sustainable value creation by becoming a global, innovation-led, digital-first organisation and an employer of choice, alongside consistent financial growth. The strategy is anchored on seven pillars covering organisation, growth, innovation, manufacturing excellence, sales and marketing, and cross-enterprise enablers, supported by a robust governance and performance review framework. Across businesses, initiatives are underway to strengthen go-to-market execution, enhance manufacturing and cost competitiveness, scale exports, expand value-added and future-ready portfolios, and enter high-potential sectors such as Electronics and Semiconductors, enabled by digital transformation and Industry 4.0 practices. These efforts are complemented by a strong focus on ESG, safety, and cultural transformation through BEFASt behaviours, as well as comprehensive people and leadership development initiatives, positioning the Company to deliver on its long-term aspirations in a disciplined and sustainable manner.
RISKS, CONCERNS AND MITIGATION MEASURES
Enterprise risk management
The Company has a robust Enterprise Risk Management process to identify, evaluate and mitigate risks impacting business including those which may threaten the existence of the Company. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance the Companys competitive advantage. This also defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risk trends, exposure, and potential impact analysis at a Company level as also separately for the business segments.
The Company also has developed a structured risk management policy encompassing the risk management objectives, principles, process, responsibility for implementation, maintenance of risk registers, review of risk movements, risk reporting framework etc. The Risk Management Committee continues to review the risks and mitigation plan as per the adopted Charter and Risk Management Policy. The Enterprise Risk Management (ERM) framework is completely automated.
During the year under review, the risk management policy and framework was reviewed with the involvement of external expertise. It was updated to align with the recent developments in external environment including increasing geo-political risks and the consequent business challenges faced. This covered the Risk governance including governance structure and Risk assessment scales. The Risk registers relating to Businesses and functions
were updated as per current risk environment. The risks were assessed and scaled on pre-determined parameters for impact, likelihood and velocity. Mitigation measures were implemented, reducing the risks to a lower (residual) level.
Cybersecurity framework
The Cyber security framework is aligned with the overall digital strategy and roadmap; and has been identified for transformation as part of long term aspiration of the Company. Cybersecurity is embedded within the ERM framework. The Company has adopted a risk-based cybersecurity approach aligned with globally recognised frameworks such as National Institute of Standards and Technology (NIST) Cybersecurity Framework and International Organisation for Standardisation ISO 27001. This IT security framework is commensurate with size and operations of the Company. Its implementation is in progress and will extended to global entities in a phased manner. The Company is partnering with external expertise to assist in deployment of this framework for both IT and OT capabilities. Cybersecurity insurance is in place to offset financial risks.
Key initiatives undertaken during the year under review:
• Enterprise application security (ERP, MES, CRM);
• IT-OT Integrated Security, Threat Detection & Security Operations Centre (SOC) Maturity;
• Vulnerability Management & VAPT (Vulnerability Assessment and Penetration Testing);
• Data Protection & DPDP Compliance measures; and
• Cyber Awareness & Culture building.
The Company remains committed to building a resilient and secure digital ecosystem to support its growth ambitions while safeguarding critical assets, operations, and stakeholder trust.
Forex and commodity risks and hedging
The Company deals with multiple currencies and is thus exposed to exchange risk on account of adverse currency movements. Foreign Exchange risk in imports and exports is mitigated by adopting a country-based forex policy, periodic monitoring and use of hedging instruments. Efforts are being taken to manage both exports and imports to ensure that there is a natural hedging mechanism at a Company level.
The Companys input materials are not commoditised and do not warrant any specific hedging to be undertaken. With respect to output materials, adverse impact of changes in commodity prices on user industries could impact the sales which are mitigated by the development of alternate products, establishing a new range of applications etc. The other mitigation measures for dealing with increase in fuel costs, non-availability of raw materials etc., have been dealt with separately in this Report.
Mitigation Measures
Indias economic growth faces challenges with downside risks to its outlook for the coming year.
Higher energy costs and supply disruptions from the Middle East conflict pose risks. The war has driven up prices across a wide range of raw materials, increasing the likelihood of higher inflation.
Other critical risks include a potential monsoon deficit affecting the rural economy, heightened global geopolitical tensions and slowing external demand. High import tariffs, particularly from the US pose a risk to exports and external demand. Additionally, a slowdown in the Chinese economy could further impact global trade dynamics.
With this background, the Company is well aware and is taking appropriate steps through scenario planning for business continuity and resilient growth while tapping potential new business opportunities. Risk management forms an integral part of the Companys business plan and long term aspirations.
The Company operates across various technology platforms and product verticals built over the years. Relative advantages and disadvantages of such technologies are studied and advances are tracked. Any new technology may impact the performance of the Company in the long run. The Company seeks to address these technology gaps through continuous benchmarking of the existing manufacturing processes with developments in the industry and in this connection has made arrangements with technical research institutions and technology consultants. The Company is driving manufacturing transformation through a structured operational Integrated Manufacturing Excellence (IMEx) program.
The requirements of power for the Company are largely driven by the requirements of EMD. The requirement for electricity is managed by purchase from respective State Electricity Boards, sourcing through open access arrangements and own generation through solar power plants. Utilisation of power remains one of the key factors which can impact profitability either favourably or adversely based on the changes in the power cost. Pending the extension of the tenure for the hydroelectric project in Kerala and the closure of the gas based electricity business in SEDCO, the Company continues to look for opportunities to add to its captive power generation including green initiatives such as Solar power. In this direction, the Electrominerals business has commissioned a 1.8 MW ground mounted solar power system at its plant in Edappally. Additionally, the business has entered into a power purchase agreement to procure solar power supply of up to 11 MW. Parallel efforts are underway across businesses to increase the share of cleaner energy sources by exploring similar power purchase arrangements with third party providers in India. The requirement of fuel is driven by the high-temperature processes in the Abrasives and Ceramics businesses and any increase in the cost of fuel impacts profitability. Hence, the Company has put in place plans and implemented energy conservation measures to improve its competitiveness. Annexure E of the Directors Report provides a detailed information on the energy conservation measures undertaken by the Company.
The Company uses various raw materials such as Bauxite, Alumina, Calcined Alumina, Zirconia sand, Quartz and Graphite which have high price volatility. This is addressed through annual contracts to cover volatility due to price fluctuations and also mitigated through programs to identify alternative sources. The price volatility is also addressed by moving towards index based pricing. The severe price discrimination in the markets caused by players in geographies outside India is impacting the business and there is a need for suitable policy interventions to protect the local manufacturers. The changes in geo-political situation affects the sources of supply and plant capacity utilisation. This risk is being mitigated by reducing dependency of legacy products and by accelerating product development for new and emerging applications. This risk is also addressed by developing those speciality products through existing domestic players.
The high dependency on a few large customers leading to concentration risk, with loss of one or more customers could lead to substantial drop in revenues. To address this, derisking strategies have been formulated as part of long-term strategy by identification of multiple pathways for growth including new/ emerging applications thus reducing dependency on one or two segments/customers. The Company has a system of continuous monitoring of pricing trends, including imports, to proactively manage risk related to competition and potential dumping practices. The Company engages with experts to upgrade product portfolio and developing new products with a focus on consistent performance.
As a risk mitigation measure to address cyber security threats, the Company does quarterly penetration assessment testing for all internal and internet-facing applications. The security threat awareness is periodically published to create awareness among employees and stakeholders for handling the risk proactively. The security process is included as an important step in the IT policy of the Company. There is a considerable amount of work undertaken on scoping of information specific to the role defined to prevent any data or information leak, through continuous monitoring on the business-critical IT assets. As a part of cyber security initiatives, data security and protection against the risk of phishing and malware attacks were given priority. Endpoint protection solutions, including antivirus and security software, are deployed across Company systems to prevent unauthorised intrusions and enhance threat detection. Awareness mailers were disseminated across to mitigate risk of such attacks, and a requisite infrastructure upgrade to support remote working conditions in a secured manner was initiated.
The priority for the Company continues to be the safety and health of all its employees and other stakeholders with minimal disruption to operations. Behaviour-based safety processes have been introduced to enable core teams (operations, maintenance) to observe and intervene in the event of unsafe behaviours. This system fosters a strong safety culture, reduces injuries, and
empowers employees to take ownership of their own safety and that of their colleagues.
The risks across operations, human resources, IT, supply-chain etc., which were identified earlier and which could potentially impact in the event of an emerging variant or any subsequent pandemic, and the mitigation plans continue to be on the risk radar of the Company.
INTERNAL CONTROL SYSTEMS & FRAMEWORK Internal Control Framework
The Company has established a robust Internal Control Framework designed to provide reasonable assurance regarding the achievement of operational efficiency, reliability of financial reporting, compliance with applicable laws and regulations, and safeguarding of assets.
The internal control framework is aligned with globally accepted principles and comprises the following key constituents:
• Control Environment: Integrity, ethical values, defined organisational structure, clear assignment of authority and responsibility, and oversight by the Board and Audit Committee.
• Risk Assessment: Periodic identification and assessment of financial, operational, compliance and strategic risks, and determination of appropriate mitigation controls.
• Control Activities: Clearly defined policies, standard operating procedures, approval mechanisms, segregation of duties, preventive and detective controls.
• Information and Communication: Timely generation, capture and communication of relevant information to enable effective decision-making and control monitoring.
• Monitoring Activities: Continuous monitoring through management reviews, internal audits, and corrective action tracking.
Internal Control Systems
The Company maintains adequate and effective internal control systems that are commensurate with the nature of its businesses, the scale of operations, geographical spread, and organisational complexity. The control systems are designed to support diverse operations across manufacturing, trading, and service activities.
The internal controls ensure the following:
- Efficient and orderly conduct of business
- Accuracy and completeness of accounting records
- Timely preparation of reliable financial information
- Compliance with internal policies and statutory requirements
- Protection of Company assets and resources
The key components of Internal Financial Control (IFC) followed by the Company are as follows:
- Entity Level Controls (ELC)
- Process Level Controls (PLC)
- Transaction-Level Controls
- General IT Controls
The IFC is dynamic and is periodically reviewed and strengthened in response to changes in business processes, regulatory requirements, and emerging risks.
Testing of Internal Controls for Effectiveness
The effectiveness of internal controls is evaluated on an ongoing basis through multiple layers of review, including:
- Management self-assessments and periodic control reviews
- Risk-based internal audits conducted as per an annual audit
plan approved by the Audit Committee
- Testing of key internal financial controls with reference to the Financial Statements by an External Audit Firm
- Statutory Auditor review and reporting under the applicable provisions of the Companies Act, 2013
Any control gaps or improvement areas identified during testing are documented, and time-bound corrective actions are implemented and monitored to closure.
Role of Internal Audit and Audit Committee
The Internal Audit function of the Company:
- Conducts audits based on a risk-based internal audit plan, approved by the Audit Committee of the Board
- Reviews adherence to internal controls, policies, procedures and regulatory requirements
- Evaluates adequacy and operating effectiveness of internal controls
The Audit findings, observations and recommendations are periodically presented to the Audit Committee of the Board of Directors of the Company.
The Audit Committee oversees and provides guidance on the adequacy and effectiveness of the internal control environment and risk mitigation framework.
Adherence to Observations and Continuous Improvement
Management is responsible for ensuring that audit observations and guidance provided by the Internal Auditors, Audit Committee and Board are:
- Appropriately addressed through corrective and preventive actions
- Implemented within agreed timelines
- Periodically reviewed for effectiveness
The status of implementation is tracked and reported to the Audit Committee until full resolution.
The internal control framework is continuously updated and strengthened based on audit learnings, management feedback and evolving risk scenarios.
HUMAN CAPITAL
Human capital remained central to delivering the Companys Aspirations 2030 agenda, with focused HR interventions aligned to business performance and operational priorities. The Companys HR approach can be summarised in the acronym "FACED to Perform", consisting of Focus on the Factory, Acquisition of Talent, Rewarding Career Paths, Enhanced Employee Experience, and Development of Talent to build a High-Performance Organisation. FY 2025-26 carried this work forward, with sharper alignment to business priorities and long-term strategy.
Focus on factories and operational effectiveness
Industrial Engineering [IE] Study
As part of the Factory Focus strategic pillar, Industrial Engineering (IE) study was completed at certain plants to enhance operational efficiency and productivity. The study focused on analysing existing processes and workforce deployment to determine the optimal manpower mix aligned with current and future operational requirements.
Building IR capability of Factory Managers
Industrial training sessions were conducted for shopfloor line managers and plant HR heads across manufacturing locations. These programs built capability in workforce management and improved understanding of compliance requirements.
Smart Talent Acquisition
The Company continued its focus on hiring fresh talent from campus and grooming them for higher responsibilities. This year, hiring from premier institutes was emphasised for Post Graduate Engineering Trainee roles.
A structured Campus Connect programme was implemented with ceramic engineering institutions, supported by an annual engagement calendar. Initiatives included case study competitions, industrial visits, webinars, knowledge sessions, and guest lectures.
The Companys flagship year-long development journey, Your Own Learning Opportunities (YOLO), continued to equip Trainee Engineers with strong technical fundamentals, hands-on exposure to manufacturing systems, problem-solving capabilities, and a deeper understanding of the business.
Rewarding Career Paths
Organisation Effectiveness Study was carried out across three of the four business units to build robust organisation structures aligned to future growth aspirations, while ensuring optimal spans of control and enhanced career growth opportunities for role holders.
During the year, the Company partnered with a leading HR consulting firm to conduct a comprehensive benefits benchmarking exercise aimed at further evolving the Companys total benefits and reward framework. The findings from the study will be used to make future amendments to employee policies.
The Company also introduced the "Own the Future ESOPS" (Employee Stock Option Scheme) for middle and top management employees, reinforcing a culture of ownership while recognising contributions towards achieving the Companys Aspirations 2030 goals.
Improved employee Experience Employee Health & Well-being
Employee health and well-being remained an integral part of the Companys human capital approach and social sustainability agenda. The CUMI Vital framework provided a structured and holistic programme covering physical, mental, financial, and social well-being across locations.
During the year, key initiatives such as the 12-Week Fitness Journey and 21-Day Mind Reset Challenge drove strong engagement across locations, helping employees build sustainable health habits, improve fitness awareness and enhance mental resilience. Annual health check-ups further enabled early identification of risk factors and informed interventions.
Employees and their families also benefit from access to 24/7 professional mental health support (Employee Assistance Program), reinforcing a culture of care and psychological safety.
On the social well-being front, the CUMI Champions League (CCL) created a vibrant platform for collaboration and inclusion, with widespread participation across sports and locations.
Talent Development
As part of its long-term people capability strategy, the Company established the foundation for the CUMI Management Development Centre (MDC). The MDC is designed following an academy-based model, with the primary focus on nurturing leadership, promoting functional excellence, and instilling high-performance behaviours.
The MDC comprises of three distinct academies: the Manufacturing Academy, the Sales Academy, and the Leadership Academy; each academy tailored to address specific developmental needs-strengthening manufacturing skills, elevating sales capabilities, and cultivating leadership qualities respectively.
Manufacturing Leadership Program
The Manufacturing Leadership Programme was launched under the Manufacturing Academy with a focus on improving shopfloor leadership, operational effectiveness, and continuous improvement aligned with the IMEx framework.
Sales Excellence Academy
Under the Sales Excellence Academy, Key Account Managers were trained and certified in Value Selling to improve sales effectiveness and customer engagement. A structured programme for dealership staff on the "Art of Selling" improved capability in both counter and field sales.
The Salesforce Innovation Centre visit was aimed to enable the successful implementation of Salesforce platform for the Company, provide sales and marketing leaders with hands-on exposure to Salesforces latest innovations, best practices, and strategic approaches.
Emerging Leaders Program (ELP)
During the year, the Company successfully concluded the Emerging Leaders Program (ELP), an intensive 11-month leadership development initiative delivered in partnership with Shiv Nadar University Chennai (MBA program). Five high-impact projects were recognised for their innovation and business relevance. Graduation certificates were awarded to participants, acknowledging their development into becoming strategic, purpose-driven leaders.
In recognition of its innovative design and execution, the Emerging Leaders Program was presented at the 34th National Awards for Innovative Training Practices organised by the Indian Society for Training & Development (ISTD). The initiative earned the Company the distinction of "Promising Innovator" in the Private Organisations (Manufacturing) category, reinforcing the Companys commitment to building strong internal leadership capability.
Self-Development Program
Under the CUMI Self-Development Policy, the Company partnered with BITS Pilani to sponsor higher education programmes for employees. Over the last five years, several employees completed B.Tech, M.Tech, and MBA programmes from this premier institute.
High Performance Teams
The goal cascade process was completed in a timely manner across all Business Units, enabling stronger alignment between organisational priorities and individual objectives. The Company has a robust Annual Performance Management System (PMS) focused on driving alignment, transparency, and continuous feedback across the organisation.
During the year, leadership-led communication initiatives, including CHRO briefing sessions, employee Open Houses, targeted feedback training programmes, and focused communication campaigns, helped drive greater awareness and
engagement with the PMS. These initiatives contributed to an improvement in employee satisfaction with the PMS, with scores increasing from 77% to 81% during the year.
Focused efforts were undertaken during the year to further embed shared leadership behaviours across the Company through the BEFASt framework - Bold and timely decision-making, Embracing change with a solutions-driven mindset, Fairness to all stakeholders, Accountability in decisionmaking and execution, and Standing Up for each other. The initiative covered 90% of management staff across business units. Change management workshops were conducted across Business Units in India to align leadership mindsets and behaviours with organisational priorities.
Communication that Connects, Engages, and Inspires
Over the last year, Communication at the Company has evolved from information dissemination to purposeful, employee-centric storytelling that builds connection and pride.
Leadership communication was strengthened through HalfYearly Communication Meets led by MD, creating alignment, transparency, and open dialogue across the Company. CUMI Samachar continues to provide regular updates on business performance and organisational priorities.
On LinkedIn, a people-and-culture led narrative helped grow our follower base reinforcing the Companys employer brand and external visibility. Communication played a key role in culture change initiatives, supporting the rollout of BEFASt. Messages were designed to be simple, visual, and inclusive, ensuring relevance across corporate and shopfloor audiences. From manufacturing excellence to well-being, learning, and sports, stories are now told through those who live them every day.
The total staff on rolls of the Company (including Joint Ventures and Subsidiaries) as at 31st March 2026 was 5,921 with 4,022 employees in India (previous year 6,260 with 4,004 employees in India).
Employee Health & Safety Philosophy
The Company is committed to being an eco-friendly organisation by safeguarding the environment and ensuring occupational health and safety of its employees and other interested parties. It makes efforts to create, maintain and continuously improve the health and safety working conditions.
The Companys vision is to achieve a workplace with "ZERO HARM". The Company is committed to strengthening the safety culture and continuously enhancing its systems, leadership and performance to be recognised as a best-in-class organisation for safety excellence.
EHS Excellence Framework
The Companys Health & Safety Excellence is anchored in the vision of Zero Harm. The framework is built on two core pillars -
Safe Behaviour and Safe Conditions - ensuring a balanced focus on people, leadership and systems. It provides a structured and consistent approach to managing health and safety across all locations, strengthening safety culture, risk control and performance improvement. The framework is guided by the Spirit of the Murugappa Groups Five Lights - Integrity, Responsibility, Passion, Respect and Quality - embedding safety as a fundamental way of working at the Company.
Safety Governance and Leadership
The Environment, Health & Safety (EHS) function of the Company was formally constituted in April 2024, as a dedicated corporate function with a clear mandate to inculcate a safety culture across all business units. Business Unit Heads have been made fully accountable for their divisions safety performance. At a Group level, policies and standards are regularly reviewed and refreshed whilst Corporate EHS assessments are made against the policies and standards with the close involvement of the Business Units.
Behaviour Based Safety (BBS) Programme
The BBS programme is the cornerstone of the Companys safety culture transformation which bridges the gap between line management and workers in observable, everyday safety behaviours. In order to enhance behavioural safety, Line organisation teams have been trained and coached to regularly carry out behaviour observations in the shop floor. They observe and appreciate safe behaviour and intervene in the event of unsafe behaviour. The senior management conducts regular reviews of the BBS performance. Safety performance remains the highest priority on the agenda at management meetings. A majority of senior managers have a portion of their variable compensation tied to the achievement of safety performance targets.
Occupational Health and Work Environment
The Company has developed and implemented a variety of programmes to ensure that it provides the employees a
healthy and safe work place. These include the monitoring occupational health hazards such as noise, dust levels and volatile organic compounds. Occupational health and personal safety management is blended at all the plants of the Company.
Safety Management
The Company has achieved significant milestones in its high-impact safety programs, successfully completing Phase 1 and 2 of the 360 Degree Machine Guarding Programme, while formalising daily safety-checking routines. Looking ahead to FY 27, Phase 3 will further strengthen the program. Parallelly, the Fall Hazard Protection initiative of the Company continues to target the reduction of height-related risks through engineered solutions; having secured roof access and skylights in early phases, the Phase 3 strategy of the Company now prioritises the implementation of robust safety infrastructure for ladders and platforms across all premises.
Process Safety
During the previous financial year, the Company completed a structured Process Risk Assessment of all process equipment and identified critical concerns that can lead to process safety failures. During the year under review, all critical concerns identified have been completed in Phase 1 and focus is on Phase 2 where lower risk concerns are being addressed. Priority actions included installation of pressure switches, venting systems, interlocking of safety devices and provision of gas detectors.
| On behalf of the Board | |
| Chennai | M M Murugappan |
| May 14, 2026 | Chairman |
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