Containe Technologies Ltd Management Discussions

• Overview:

Containe Technologies Limited (BSE: 543606) (Company) is a public company listed on BSE SME, incorporated on 16th 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. ek mota haathi

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:

In the face of high trade barriers and elevated uncertainty, global activity is now facing a major test from the outbreak of war in the Middle East. Hypothetically, if the conflict was to remain limited in its scope and duration, it is projected that global growth would slow to 3.1% in 2026 and 3.2% in 2027, slower than its recent pace of about 3.4% in 2024-25. Global headline inflation is projected to increase to 4.4% in 2026 before declining to 3.7% in 2027. This slowdown in growth and increase in inflation is expected to be largely predominant in emerging and developing economies. This stagnation in growth is also an indication of disruptions brought about by the conflict and partly offset by carryover from recent strong data and tariff rates.

The effect of ongoing conflicts and rising geopolitical tensions are expected to worsen even more than they already have, turning the situation into the largest energy crisis in modern times. Fostering adaptability, maintaining credible policy frameworks and reinforcing international cooperation have become essential to navigate the current shock while preparing for future disruptions in an increasingly uncertain global environment.

(Source: IMF WEO, Apr 2026)

• Global Auto Components Industry:

The global auto components industry witnessed steady growth during FY 2025-26, supported by improving vehicle production, normalization of supply chains, and easing semiconductor availability. The industry continued to undergo a significant transformation, driven by increasing electrification of vehicles, greater adoption of advanced driver assistance systems (ADAS), connected mobility solutions, and software-defined vehicles, resulting in higher demand for electronic components, sensors, telematics, and lightweight materials. While global vehicle production improved, growth remained uneven across regions due to evolving trade policies, geopolitical uncertainties, and varying consumer demand for electric vehicles. Automakers increasingly diversified their sourcing strategies under the "China+1" approach, creating new opportunities for component manufacturers in emerging markets, including India. The aftermarket segment remained resilient, supported by an ageing vehicle parc and rising demand for replacement parts, while the growing emphasis on sustainability encouraged the adoption of low-carbon manufacturing practices and recyclable materials across the automotive value chain. Additionally, the rapid expansion of connected mobility, fleet management, and logistics digitization continued to drive demand for GPS tracking devices, telematics solutions, and other intelligent automotive technologies, reinforcing the long-term growth prospects of the global auto components industry.

• Indian Economy:

The Indian economy demonstrated resilience during FY 2025-26, supported by robust domestic demand, sustained public capital expenditure, easing inflationary pressures, and a stable financial system. India continued to remain one of the fastest-growing major economies in the world, with real Gross Domestic Product (GDP) estimated to grow by approximately 6.5% during the year. Private consumption strengthened on the back of improving rural demand, healthy urban spending, and favorable labor market conditions, while government-led infrastructure development continued to stimulate investment activity across key sectors. Inflation moderated and largely remained within the Reserve Bank of Indias target range, enabling the RBI to adopt a more accommodative monetary stance through successive policy rate reductions during the year. Merchandise and services exports remained resilient despite global economic uncertainties, while strong foreign exchange reserves and a stable banking sector enhanced the economys resilience. Continued policy initiatives such as higher capital expenditure, tax relief measures, ease of doing business reforms, digitalisation, and the Production Linked Incentive (PLI) schemes further strengthened Indias manufacturing ecosystem and reinforced its position as a preferred global investment destination.

• Indian Auto Components Industry:

India has been the hub for rapid development and is one of the fastest growing economies in the World. Backed by rising incomes, higher infrastructure spending and supporting manufacturing incentives, Indias growth story has been nothing short of remarkable. The two-wheeler segment which is largely driven by the middle class has shown continued dominance, with sales reaching 19.6 million units in FY 2025. The auto component industry has become a vital segment of the economy, spanning large corporations to micro enterprises across manufacturing clusters nationwide. It accounted for 2.3% of Indias GDP in FY 2025 and provided direct employment to over 1.5 million people.

The Indian Auto component industry recorded a turnover of Rs. 6,73,557 crore (US$ 88.20 billion) in FY 2025, registering a CAGR of 10.22% between FY 2020 and FY 2025. The auto components industry is showing no signs of slowing down as it is projected that the sectors contribution to the countrys GDP will reach 5-7% by 2026.

• Government Initiatives for Automobile Industry:

The Government continued to strengthen Indias position as a global automotive manufacturing hub through the Production Linked Incentive (PLI) Scheme for

Automobile and Auto Components, which remained a key driver of investment during FY 2025-26. The scheme incentivized the manufacture of Advanced Automotive Technology (AAT) products, including electric vehicle (EV) components, hydrogen fuel cell technologies, safety systems, and high-value automotive electronics. By encouraging localisation, technological innovation, and enhanced manufacturing capabilities, the scheme supported the development of a globally competitive automotive supply chain while reducing dependence on imports. Coupled with the PLI Scheme for Advanced Chemistry Cell (ACC) Battery Storage, it also accelerated the creation of a domestic EV ecosystem by promoting indigenous battery manufacturing and strengthening Indias long-term energy security.

The Government further accelerated the transition towards sustainable mobility through the continued implementation of the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, which provided demand incentives for electric two-wheelers, three-wheelers, e-buses, e-trucks, and ambulances, while also supporting the expansion of public EV charging infrastructure. The scheme complemented the Governments broader objective of reducing vehicular emissions, improving energy efficiency, and enhancing EV penetration across both urban and rural markets. Simultaneously, continued implementation of the Vehicle Scrappage Policy encouraged the replacement of older, polluting vehicles with newer, safer, and fuel-efficient models, thereby stimulating fresh vehicle demand and increasing opportunities for automobile and component manufacturers.

The Governments continued emphasis on infrastructure development through the PM Gati Shakti National Master Plan and the National Logistics Policy significantly improved multimodal connectivity and logistics efficiency during the year. Large-scale investments in highways, freight corridors, ports, railways, and logistics parks facilitated faster movement of raw materials and finished goods, reduced logistics costs, and enhanced supply chain resilience for the automotive industry. These initiatives were particularly beneficial for auto component manufacturers with geographically diversified

operations and export-oriented businesses, while also supporting the growth of commercial vehicles and the broader logistics ecosystem.

In addition to manufacturing and infrastructure initiatives, the Government continued to strengthen the regulatory and business environment through measures aimed at enhancing vehicle safety, promoting domestic manufacturing, and encouraging consumer demand. The implementation of Bharat NCAP reinforced the focus on vehicle safety and quality standards, driving increased adoption of advanced safety technologies such as airbags, sensors, electronic control systems, and driver assistance features. Continued emphasis on the “Make in India” initiative, together with measures announced in the Union Budget to support consumption and manufacturing, further encouraged localisation, technological advancement, and capacity expansion. Collectively, these policy initiatives provided a conducive environment for sustainable growth, innovation, and enhanced global competitiveness of Indias automobile and auto components industry.

PLI-Auto Scheme- Ministry of Heavy Industries

PM E-DRIVE & PSM Schemes

• Performance of the Company

During the financial year 2025-26, the Company recorded a strong improvement in its overall financial performance as compared to the previous financial year 2024-25, as summarized below:

Particulars	FY 2025-26 (Rs. in Thousands)	FY 2024-25 (Rs. in Thousands)	% Change
Revenue from Operations	2,39,631.35	1,53,473.60	56.14%
Other Income	629.34	604.52	4.10%
Total Income	2,40,260.69	1,54,078.12	55.94%
Total Expenses	2,26,560.14	1,42,030.72	59.51%
Profit Before Finance Cost	21,033.09	19,179.99	9.66%
Finance Cost	7,332.54	7,132.59	2.80%
Profit Before Tax	13,700.55	12,047.40	13.72%
Less: Current Tax	5,728.87	3,956.29	44.81%
Deferred Tax Liability	(2,259.51)	(871.42)	159.31%
Profit After Tax	10,231.19	8,962.53	14.15%

The growth in Revenue from Operations was primarily driven by increased demand for the Companys Vehicle Location Tracking Devices, embedded SIM solutions, and related telematics offerings, along with expanding empanelment with OEMs and continued enlistment of VLTD across Indian states.

While topline growth of 56.14% significantly outpaced growth in profitability, this was on account of a corresponding increase in Total Expenses, in line with the scale-up of operations, higher input and manufacturing costs, and continued investment in manufacturing capability (including the newly installed SMT line) and technology upgradation. Finance costs remained relatively stable, indicating disciplined management of the Companys debt levels despite the scale of operations.

Overall, the financial year under review reflects a period of robust revenue growth, supported by steady, though comparatively moderate, improvement in profitability, as the Company continued to invest in capacity building and operational infrastructure to support its long-term growth strategy.

Further, the Company also made significant earnings in foreign exchange to the tune of Rs. 27.82 Lakhs, pursuant to an export order received from Rontom Automotive Limited, a company based in the United Kingdom. This reflects the Companys growing capability to cater to international clientele and marks a significant step in the Companys efforts towards expanding its global footprint in the vehicle telematics and tracking device industry.

State-Wise Performance:

Maharashtra	- Rs. 99,65,000/-
West Bengal	- Rs. 13,05,000/-
Telangana	- Rs. 6,29,88,000/-
Karnataka	- Rs. 1,75,56,000/-
Delhi	- Rs. 6,23,66,000/-
Madhya Pradesh	- Rs. 17,75,000/-
Uttar Pradesh	- Rs. 1,26,000/-
Andhra Pradesh	- Rs. 3,06,000/-
Gujarat	- Rs. 4,89,000/-
Haryana	- Rs. 5,46,98,000/-
Jammu & Kashmir	- Rs. 53,000/-
Kerala	- Rs. 1,75,27,000/-
Ladakh	- Rs. 11,40,000/-
Tamil Nadu	- Rs. 89,51,000/-

• 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 Trano Go 4G 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 volatility and uncertainty, but our strong Governance and business structure, with stakeholder interest at the core, makes us cognizant of these risks and uncertainties that our business faces. The Company on a periodic basis identifies these uncertainties and after assessing them, formulates short-term and long-term action plans to mitigate any risk 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 are 6 (Six).

• Key Financial Ratios:

Particulars	Current Year	Previous Year
Debtors / Turnover	1.40	1.39
Inventory/ Turnover	2.25	1.54
Interest Coverage Ratio	2.87	2.69
Debt / Equity Ratio	0.34	0.41
Operating Profit Margin (PBT)	0.16	0.14
Net Profit Margin (PAT)	0.04	0.06
Return on Net Worth	0.10	0.09

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.