Containe Technologies Ltd Management Discussions

• Overview:

Containe Technologies Limited (BSE: 543606) (Company) is a public company listed on BSE SME, incorporated on 16^th September 2008 as a private company. The registered office of the Company is situated at H. No. 3-13-142/ 341P, 342, Gokul Nagar Marriguda, Mallapur, Secunderabad, Hyderabad-500076, Telangana, India.

The Company is an ISO 9001:2015 Certified company which indicates that its products and services meet expectations of Stakeholders. The Company is primarily engaged in the business of Manufacturing of Speed Limiting Devices, Vehicle Location Tracking Devices, Embedded SIM Cards & M2M Services.

The Speed Limiting Device is a Safety Product which is mandatory fitment for New Registration, fitness of all commercial vehicles of goods carriers, hazardous petroleum/chemical tankers, public transport, and school buses, as per GSR 290E of 15.04.2015. It is designed, developed, and manufactured according to the Automotive Industry Standard (AIS 018) "MOTOREYE & LIMITS" approved by ARAI and AIS 037 Standard, ensuring conformity of production audits for its excellent quality and proven durability.

Vehicle Location Tracking Devices Product has been tested as per Automotive Industry Standard AIS-140 & BIS 16833 Standard. This product is approved by ICAT TAC Certificate No: CK8073. This IRNSS VLTD (Vehicle Location Tracking Device) is designed with Quad band GSM / GPRS Module, equipped with GPS/IRNSS receiver to provide accurate navigation data, this can be remotely configured (OTA Configuration).

The Company has registered APN for PAN India "ctplm2m.in" and manufactures its owned Dual Profile e-SIMS in collaboration GSMA Approved Manufacturing facility and has MOU with service providers Like BSNL, Vodafone Idea and Airtel for e-SIM Profiles and has M2M service providers License from Department of Telecommunications.

• Global Economy:

The global economy is at a critical juncture. Following an unprecedented series of shocks in the preceding years, global growth was stable yet underwhelming through CY24. However, the landscape has changed as governments around the world reorder policy priorities. The United States announced a series of new tariff measures and countermeasures by its trading partners if implemented couldbring effective tariff rates to levels not seen in a century. The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity. Global growth is projected to fall from 3.3% in CY24 to 2.8% in CY25, before recovering to 3.0% in CY26. Nominal wage growth is showing signs of moderation, alongside indications of continuing normalization in labor markets. Although core goods price inflation has fallen back to or below trend, services price inflation is still running above pre–COVID-19 averages in many economies, most notably the United States and the euro area. Where inflation is proving stickier, central banks are moving more cautiously in the easing cycle while keeping a close eye on activity and labor market indicators as well as exchange rate movements. Global headline inflation is expected to decline to 4.3% in CY25 and to 3.6% in CY26. World trade growth is projected to take a hit to 1.7% for CY25 before rebounding to 2.5% in CY26. Oil prices are expected to be impacted by escalating trade tensions, compounded by weak fundamentals, with supply growth expected to likely outpace tepid global demand growth through CY25 and CY26 as OPEC+ start unwinding production cuts creating a global supply glut. Brent crude is expected to avg. at $67/barrel in CY25 from $79/barrel in CY24. Nonfuel commodity prices are expected to increase by 4.4% in CY25, on account of upward revisions to food and beverage prices, driven by bad weather affecting large producers.

In FY25, the global economy experienced moderated growth, influenced by persistent inflationary pressures, tight monetary policies in developed markets and geopolitical uncertainties. These factors contributed to cautious consumer spending and disrupted global trade flows. Amid trade uncertainties, global growth is expected to slow to 2.3% in 2025 from 2.7%in 2024.

The US economy has been resilient, driven by strong growth in the services sector, a robust labour market, and high realwages. Europe, including the UK, has faced softer growth due to the war in Ukraine, high energy prices, and slowdowns in manufacturing and services. Chinas growth was weaker than expected, with a slowdown in the real estate sector and industrial activity. The Asia-Pacific region is projected to be the fastest-growing.

(Source: IMF WEO, Apr 2025)

• Global Auto Components Industry:

In FY 2024-25, India remained the third-largest passenger vehicle market globally, with over 4.3 million units sold. However, growthslowed to about 2% from 8.2% the previous year. While at the start of the year, a high base and affordability issues in non-premium hatchbacks were expected to affect growth, the external factorssuch as the heatwave and national elections, led to lower showroom footfalls in the first quarter, further affecting thedem and. As demand weakened, inventory levels rose across the industry, leading to an increase in promotional spending. Although sales revived during the festive season, the recovery was largelydriven by these incentives.

• Indian Economy:

Indias GDP is expected to grow strongly at 6.5% for FY25 as per the second advance estimates released by the National Statistical Office (NSO). Manufacturing activity is showing signs of revival with business expectations remaining robust, while services sector activity continues to be resilient. Investment activity has gained traction andit is expected to improve further on the back of sustained higher capacity utilization, governments continued thrust on infrastructures pending, healthy balance sheets of banks and corporates, along with the easing of financial conditions.

"To summarize, headwinds from geo-political tensions, protectionist, trade policies, volatility in international commodity prices and financial market uncertainties, continue to pose downside risks to the outlook. Taking all these factors into consideration, real GDP growth for FY26 is projected at 6.5%."

• Indian Auto Components Industry:

The Indian auto components industry continued its growth trajectory in FY 2024–25, achieving a turnover of 6.73 lakh crore, reflecting a 9.6% year-on-year increase. This expansion was primarily driven by robust domestic Original Equipment Manufacturer (OEM) demand and steady growth in exports. Supplies to OEMs stood at 5.70 lakh crore, while the aftermarket grew to 99,948 crore. Exports rose to US$22.9 billion, and imports totaled US$22.4 billion, resulting in a trade surplus of US$453 million.

The industry benefited from strong passenger vehicle (PV) sales, with wholesales reaching 4.3 million units in FY25, led by the rising share of utility vehicles (UVs), which now contribute 65% of PV sales. The three-wheeler segment also posted record volumes, reflecting a broad-based recovery in mobility demand.

The Indian automotive industry is undergoing transformation driven by a confluence of factors. Evolving industry standards, changing consumer preferences, and a growing emphasis on sustainability are pushing advancements in all areas of the industry.

Indias auto component industry is an important sector driving macroeconomic growth and employment. The industry comprises players of all sizes, from large corporations to micro entities, spread across clusters throughout the country. The auto components industry accounted for a significant part of Indias GDP and provided direct employment to 1.5 million people. By 2026, the automobile component sector will contribute 5-7% of Indias GDP. The total Automotive electronics demand in India is projected to grow from US$ 10.6 billion in 2022 to US$ 70.3 – US$ 74.4 billion by 2032.

During the Financial Year (2023-24), the industry clocked a turnover of Rs. 6.14 lakh crore (US $74.1 billion), representing a growth of 9.8% on a year-on-year basis. The industry also posted a trade surplus of $300 million during the year, as exports grew 5.5% to Rs $21.2 billion while imports rose by 3% to $20.9 billion.

Over the next decade, embedded and connected location services will remain a core component of in-vehicle infotainment systems for carmakers. The Indian automotive industrys digital transformation presents exciting opportunities; the demand for location-based services is set to surge. By capitalizing on Indias strong R&D capabilities and embracing innovation, navigation companies can play a vital role in shaping the future of mobility in the country. India occupies a strong position in the global heavy vehicles market as it is the largest tractor producer, second-largest bus manufacturer, and third-largest heavy trucks manufacturer in the world.

• Government Initiatives for Automobile Industry:

The Government of India has introduced a series of strategic initiatives aimed at strengthening the automobile industry by enhancing manufacturing capabilities, promoting localization, advancing green mobility, and supporting the overall automotive ecosystem. During FY 2024–25, the Production-Linked Incentive (PLI) Scheme for Automobiles and Auto Components, with an outlay of 25,938 crore (FY23–FY27), remained a cornerstone policy. It is designed to promote domestic manufacturing of Advanced Automotive Technology (AAT) products, including electric and hydrogen fuel cell vehicles, electric vehicle components such as e-axles, motors, and battery systems, as well as innovative safety systems. This initiative has attracted significant investments in component manufacturing and contributed to improved localization levels.

The Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme, with a budget of 10,000 crore, continued to support the adoption of electric mobility and the development of charging infrastructure. Extended until March 2025, it has facilitated the deployment of over one million electric vehicles, particularly in the two-wheeler, three-wheeler, and public transport segments. Complementing this, the Vehicle Scrappage Policy was reinforced through incentives encouraging voluntary scrappage of end-of-life vehicles, thereby stimulating new vehicle demand, promoting environmentally safe disposal practices, and boosting the recycling and steel industries. Further, the government continued to emphasize green mobility and the development of an electric vehicle ecosystem by promoting investments in EV charging infrastructure, battery-swapping stations, and hydrogen fuel cell pilot projects. Proposed Goods and Services Tax (GST) reforms under discussion are expected to rationalize rates on vehicles and components, which could enhance affordability for small cars and essential parts once approved by the GST Council. In parallel, the rollout of the Bharat New Car Assessment Program (BNCAP) advanced Indias focus on vehicle safety standards through crash testing and star ratings for passenger vehicles manufactured and sold domestically.

These policy measures have collectively improved the ease of doing business, attracted both foreign and domestic investment, driven technology adoption in electric and alternative fuel mobility, and strengthened Indias export competitiveness by aligning with global quality and safety standards. With a clear roadmap toward sustainable and resilient automotive growth, the governments continued focus on green mobility, localization, and advanced technologies is expected to create a strong foundation for medium-term expansion, particularly in the electric and premium segments.

PLI-Auto Scheme-Ministry of Heavy Industries FAME II-Ministry of Heavy Industries PM E-DRIVE & PSM Schemes

• State-Wise Performance:

Maharashtra -	Rs. 97,52,044/-
West Bengal -	Rs. 80,53,517/-
Telangana -	Rs.5,83,53,123/-
Karnataka -	Rs. 87,33,850/-
Delhi -	Rs. 3,47,85,006/-
Madhya Pradesh -	Rs. 32,63,714/-
Andaman & Nicobar -	Rs. 4,37,000/-
Andhra Pradesh -	Rs. 2,86,436/-
Goa -	Rs. 20,000/-
Haryana -	Rs. 1,69,90,600 /-
Jammu & Kashmir -	Rs. 70,500/-
Kerala -	Rs.1971018/-
Odisha -	Rs.60,45,000/-
TamilNadu -	Rs.15,64,580/-

• Opportunities:

1. Expanding the business in different states thereby leading to creation of new customer base;

2. Growing demand for vehicle telematics and ITS Products;

3. Approval from the State Government of Karnataka, Maharashtra, West Bengal, Madhya Pradesh and NCT of Delhi to register Vehicle Location Tracker (VLT) Device for usage in the respective jurisdiction.

4. Approval from State Government of Nagaland and APSAC to supply and fitment of Vehicle Location Tracker (VLT) Device;

5. Approval from the Automotive Research Association of India (ARAI) for compliance with Automotive Industry Standard 140:2016,to commence the commercial production and sale of Vehicle Tracking Devices with Emergency Buttons under the TranoGo Model, in compliance with regulatory requirements.

• Threats:

1. Initial delays in implementation by State Governments, leading to demand and supply imbalance and price competition;

2. Rapid changes in technology may render existing systems or software outdated, requiring continuous investments;

3. Overhead expenses for providing performance Bank Guarantees may impact the Working Capital;

4. Extended payment cycles from clients or State Governments could strain liquidity and operational sustainability;

5. Initial overhead costs for software development and manpower resource maintenance;

6. Non-adherence or delays in meeting statutory quality and performance benchmarks may lead to penalties or reputational loss;

7. Ongoing expenses for product R&D, improvements/updates, and testing agencies.

• Outlook:

The rapidly globalizing world is creating newer opportunities for the transportation industry, especially while shifting towards electric, electronic and hybrid cars, which are deemed more efficient, safe and reliable modes of transportation.

Over the next decade, this will lead to newer verticals and opportunities for auto component manufacturers. To help them adjust to the shifting dynamics of the sector, the Indian government has already offered various production incentives.

Advancement in AIS140 Standard (Amendment -3 Draft Released) will be a new On Board Unit (OBU) Technology Development of GNSS Tolling for Electronic Toll Collection. It has been the next trend in Vehicle Telematics, where all the Commercial and private NHAI road users have to fit this device for free traffic flow in National Highways and pay by use of kilometers through NPCI, Fastag KYC and class of Vehicle. Company has the experience and capability to enter in this business and have a good market share.

Our existing product, AIS 140/BIS 16833 IRNSS VLTD (Vehicle Location Tracking Device), is part of the ITS standards set by the Ministry of Road Transport and Highways (MORTH). It is mandatory for all newly registered commercial vehicles, and existing vehicles on the road (in Use Vehicles) will require to pass their annual fitness checks. The market potential for VLTDs is approximately 25 million devices over the next five years.

• Risks And Concerns:

Risks are inevitable in every business and Company strongly believes that its success depends upon identification of potential risks in advance and the creation of appropriate mitigation strategies to bypass or minimize impact, to the extent possible.

With unprecedented changes in business environment, other Companies are operating in an environment of volatilityand uncertainty, but our strong Governance and businessstructure, with stakeholder interest at the core, makesus cognizant of these risks and uncertainties that ourbusiness faces. The Company on a periodic basis identifiesthese uncertainties and after assessing them, formulatesshort-term and long-term action plans to mitigate anyrisk which could materially impact the Companys long-term goals and Vision.

• Internal Control Systems and Safeguards:

All internal controls are well aligned with the evolving business needs, objectives, and overall strategic direction. The Company ensures integrity in conducting its business, safeguarding of its assets, timely preparation of reliable financial information, accuracy and completeness in maintaining accounting records.

• Human Resource Developments / Industrial Relations:

Human resources are the principal drivers of change and have always been one of the most valued stakeholders of the Company. The Company aims to develop the potential of every individual associated with the Company as a part of its business goal.

During the period under review, the total number of people employed by the Company are6 (Six).

• Key Financial Ratios:

Particulars	Current Year	Previous Year
Debtors / Turnover	1.39	2.08
Inventory/ Turnover	1.54	1.3
Interest Coverage Ratio	2.69	0.43
Debt / Equity Ratio	0.41	0.49
Operating Profit Margin (PBT)	0.14	0.14
Net Profit Margin (PAT)	0.06	0.11
Return on Net Worth	0.09	0.15

Cautionary Statement: The statement and views expressed by the management in the above said report are on the basis of best judgment but the actual results might differ from whatever stated in the report. The Company takes no responsibility for any consequence of decisions made based on such statements and holds no obligation to update these in future. Readers are cautioned not to place undue reliance on these forward-looking statements.