Cranex Ltd Management Discussions

- INDUSTRY STRUCTURE AND DEVELOPMENTS

• GLOBAL ECONOMY OVERVIEW

The global economy in FY 2025-26 is showing signs of a cautious recovery, supported by lower inflation, stable job markets, and gradual improvement in financial conditions. However, ongoing challenges such as geopolitical tensions and global financial uncertainties continue to weigh on growth. According to the International Monetary Fund (IMF), global GDP is expected to grow by 2.8% in 2025, with a slight increase to 3.0% in 2026, down from 3.1% in 2024. This moderate pace reflects the impact of high interest rates, shifting supply chains, and climate-related disruptions. Emerging markets are expected to lead global growth, with a projected expansion of 4.2% in 2025, well above the 1.7% growth forecast for advanced economies. India continues to stand out with strong domestic demand, solid economic fundamentals, and rising infrastructure spending.

Inflation is gradually declining, with global inflation expected to ease to 4.5% in 2025 from 5.9% in 2024. This decline is mainly due to tighter monetary policies and more stable commodity prices, especially in developed countries. However, some developing economies may still face inflation risks because of currency fluctuations and regional tensions. In the US and Eurozone, growth is likely to remain subdued, between 1.5% and 2%, as high interest rates continue to limit both investment and consumer spending.

While the overall outlook has improved, key risks remain. Uncertainty around US trade tariffs and ongoing geopolitical conflicts could continue to disrupt global trade, particularly in manufacturing, technology, and commodity sectors. These challenges, along with currency volatility and shifting investment patterns, may slow down the pace of recovery. Additionally, climate-related events and the restructuring of global supply chains are affecting production costs and investment decisions in several regions.

While the global economy is gradually recovering, the outlook for FY 2025-26 remains cautiously optimistic. Strength in labour markets, easing inflation, and robust growth in emerging markets offer positive signals. However, continued global uncertainties, particularly around trade and geopolitics, highlight the need for businesses to remain flexible and focused on risk management.

• INDIAN ECONOMY OVERVIEW

Indias economic performance in 2024 firmly reinforced its position as the fastest-growing major economy in the world, despite a challenging global backdrop. The countrys strong growth was supported by robust domestic demand, higher public investment, easing inflation, and continued implementation of structural reforms. Even with global trade tensions and supply chain disruptions, India maintained macroeconomic stability and progressed on key reform agendas, particularly in labour regulations, digital governance, and clean energy transitions.

Looking ahead, India remains one of the most resilient and high-performing economies in 2025. The International Monetary Fund (IMF) has projected GDP growth at 6.2% for the year. Growth is being driven primarily by strong domestic consumption, rising urban incomes, and a recovery in private sector investments. Rural demand continues to be steady, supported by favourable agricultural output and government support measures aimed at improving rural welfare.

Inflation is expected to stay within the Reserve Bank of Indias (RBI) target range of 4-6%, with the Monetary Policy Committee forecasting inflation to moderate to around 4% in FY 2025-26. This decline is attributed to stabilising food prices and effective monetary policy. The government remains committed to fiscal consolidation, with the FY 2024-25 fiscal deficit reported at 4.8% of GDP and a further reduction targeted at 4.4% in the current year. Importantly, this fiscal strategy continues to support high levels of capital expenditure, especially in infrastructure and welfare, without compromising financial discipline.

Indias economic outlook for FY 2026 remains strong, with growth underpinned by domestic resilience, reform momentum, and a growing role in global supply chains, positioning the country as a key contributor to global economic growth.

Sources:

https://www.oecd.org/en/topics/economic-outlook.html

https://www.pib.gov.in/PressReleasePage.aspx?PRID=2123826

https://www.imf.org/en/Countries/IND

https://www.reuters.com/world/india/indian-governments-fv25-fiscal-deficit-line-with-proiection-2025-05-30/ https://www.pib.gov.in/PressReleasePage.aspx?PRID=2131716

0 INDIAN CRANE MARKET

The Indian crane market in 2025 is experiencing steady growth, underpinned by the countrys ongoing infrastructure development, rapid urbanization, and expansion in sectors such as construction, mining, logistics, and manufacturing. The market size has reached a value of USD 3.6 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 4.4% during 2025-2033, ultimately reaching USD 5.4 billion by 2033. This expansion is driven by large-scale government initiatives like the Bharatmala Project and Smart Cities Mission, which continue to fuel demand for cranes across a variety of applications.

Mobile cranes dominate the market, accounting for the largest share, followed by fixed, marine, and port cranes. The construction sector remains the primary end-user, contributing to approximately 70-75% of total demand, with the remainder coming from mining, industrial, and logistics applications. The market is also witnessing a notable shift toward technologically advanced cranes, including electric, hybrid, and autonomous models, as sustainability, efficiency, and safety become increasingly important for project execution. The autonomous crane segment, in particular, is poised for rapid growth, with a projected CAGR of 7.2% through 2035, driven by investments in automation, AI-powered load management, and remote operation capabilities.

Despite the positive outlook, the industry continues to face challenges such as fluctuating raw material prices and the potential shortage of skilled labour. The competitive landscape remains intense, with both global and domestic manufacturers focusing on product innovation, strengthening after-sales service, and forming strategic partnerships to gain market share. Demand is expected to remain strong in metropolitan areas and industrial hubs, driven by the concentration of infrastructure development and industrial activity in these regions.

Overall, the Indian crane markets long-term prospects remain optimistic, reflecting the nations sustained focus on infrastructure-led growth, technological advancement, and industrial expansion.

Sources: https://www.marketresearch.com/Expert-Market-Research-v4220/India-Crane-Forecast-41222998/ https://www.imarcgroup.com/india-crane-market https://www.6wresearch.com/industry-report/india-crane- market-2020-2026

OPPORTUNITIES

Indias Union Budget 2025-26 and the countrys long-term infrastructure and industrial vision present a strong growth environment for the company as a leading manufacturer of cranes and construction equipment. The record capital expenditure outlay of f 11.21 lakh crore in FY26 underscores the governments commitment to infrastructure-driven development. Significant investments across highways, expressways, metro projects, smart cities, and urban transit systems are expected to fuel demand for construction machinery such as earthmoving equipment and cranes. Continued momentum under national programs like the National Infrastructure Pipeline, Bharatmala Pariyojana, and Smart Cities Mission is likely to support sustained demand for modern and efficient construction equipment across sectors.

Indias manufacturing sector is poised to reach a market size of $1.4 trillion by 2025, driven by the Production Linked Incentive schemes and an upswing in industrial capital expenditure. This trend supports rising demand for heavy machinery, industrial cranes, and material handling systems across factories, industrial units, and logistics hubs. Growth in capital goods and auto component industries, aided by policy support and duty exemptions, further enhances prospects for construction and material handling equipment.

0 THREATS

• A slowdown in the Indian economy, triggered by adverse macroeconomic or global factors such as trade barriers, tariff war, freight crises and geopolitical tensions, could negatively impact infrastructure and manufacturing sectors, thereby affecting the Companys growth prospects;

• Inefficient construction project management, including inadequate planning, scheduling, or resource allocation, may result in project delays, cost overruns, and legal or financial complications. Shortages of skilled workforce and delays in land acquisition or environmental clearances can further exacerbate these risks;

• Volatility in raw material prices, particularly steel and other key inputs, can lead to margin pressures. Sharp increases in input costs may raise the cost of goods sold and adversely affect profitability;

• Environmental issues and strict laws may hinder the strong growth of the Company;

• Intensifying competition from both established international players and agile domestic companies, including those offering advanced electric or autonomous equipment, may lead to pricing pressures and erosion of market share;

0 RISKS AND CONCERN

The impact of the key risks, which are potentially significant are listed below has been identified through a formal process by the management. Your Company recognizes that every business has its inherent risks and the Company has been taking proactive approach to identify and mitigate them on a continuous basis. Some of the risks that are potentially significant in nature and need constant monitoring are listed below:

• Supply chain disruptions and commodity price fluctuations: Our ability to supply components, in time, to our manufacturing operations is of paramount importance in achieving production schedules and meeting consumer demand. Commodity price fluctuations, being a major part of overall costs, might impact the cost competitiveness and overall profitability, the volatile nature of the regulatory landscape (Tariffs) could also result in significant direct and indirect impacts to suppliers and disruption to logistics that increase production costs and lead times.

Mitigation: Maintaining continuous focus on cost optimisation initiatives to lower fixed costs and enhance variable cost efficiency. Exploring alternative suppliers and emphasising localisation efforts. Implementing thorough financial due diligence for all new suppliers. Improving power security and infrastructure consistently. Deploying a management team that ensures sustainable low-cost production, operational excellence, and reliable access to essential raw materials.

• People capability and capacity: To deliver strategic and operational plans an organisation needs a workforce with core and critical skills in both current and emerging areas and a culture underpinned by a safe, secure and inclusive environment that enables people to do their best work every day. The safety, wellbeing and engagement of our employees is paramount and needs to be maintained in the face of a challenging external environment.

Mitigation: An essential part of our strategy is to cultivate an agile and capable organisation and culture through changes in our work methods and introducing a new business purpose and supporting behaviours. We remain dedicated to fostering an environment that drives exceptional business performance.

• Fluctuations in commodity prices: Prices and demand for the products may remain volatile/uncertain and could be influenced by economic conditions, natural disasters, weather, pandemics, political instability, and so on. Volatility in commodity prices and demand may adversely affect our earnings and cash flow.

Mitigation: Continue to work on mitigating the inflationary impact through ‘Commodity Risk Management, cost re- engineering and value engineering activities and Leverage whenever there is a fall in prices of commodities and achieve material cost reduction.

• Brand positioning, innovation and rapid technology change: Staying competitive in the dynamic construction equipment market is increasingly challenging due to intensified competition from existing OEMs and new disruptive entrants. Technology in the industry is also evolving rapidly, particularly with respect to autonomy, connectivity and electrification. Our ability to succeed in the future relies on staying abreast of evolving automotive trends, meeting changing customer demands through timely innovation and maintaining product competitiveness and quality.

Mitigation: Our brands continue support our position in the market with smart product interventions and timely refreshes with stylish designs, safety and technology features, our brand perception has increased over the years. The Company has been investing in R&D and it is upgrading its products continuously.

• Regulatory Risk: The business may be impacted due to non-compliance or delay in compliance with regulatory approvals or altered legislations may also have an adverse impact on the Company.

Mitigation: We are dedicated to adhering to the laws and regulations in all countries where we conduct business. Our specialist teams diligently monitor legal and regulatory developments, establish detailed standards, and ensure awareness and compliance with these standards.

0 FINANCIAL PERFORMANCE REVIEW

Financial statements have been prepared in accordance with Ind AS as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified Section 133 of the Companies Act, 2013 (“the Act”) and other relevant provisions of the Act.

The key highlights of financial performance of standalone business are as under:

• Total revenue from operations decreased to Rs. 5153.76 Lakhs as against Rs. 6211.41 Lakhs in the previous year a decrease of 20.53%.

• Earnings before Interest, Depreciation, Amortization, Exceptional Items & Tax for the current year is Rs. 285.58 Lakhs against Rs. 248.29 Lakhs in the previous year- an increase of 15.01%.

• Profit before Tax (PBT) and Profit after Tax (PAT) for the current year are Rs. 251.54 Lakhs and Rs. 194.62 Lakhs respectively against Rs. 216.83 Lakhs and Rs. 151.88 Lakhs in the previous year - increase of 16.01% and 28.14% respectively.

• Earnings per share is Rs. 3.21 for the year under review.

0 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has in place adequate internal control system and procedures commensurate with its size and nature of operations. Internal control systems comprising of policies and procedures are designed to ensure sound management of your Companys operations, provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorization of transactions, safeguarding the assets of the Company and prevent misuse/ losses and legal compliances.

The Company has instituted robust internal control systems and best in-class processes commensurate with its size and scale of operations. These comprise:

• Well-formulated policies and procedures that facilitate effective business operations with governance across all major activities.

• The Company conducts audits based on stringent standards to review the design effectiveness of internal control systems and procedures to manage risks, ensure monitoring control, comply with relevant policies and procedures, and recommend improvement measures.

• The Audit Committee of the Board of Directors regularly reviews the adequacy and effectiveness of internal audit systems. It monitors the implementation of internal audit recommendations.

• Timely and accurate financial reporting in accordance with applicable accounting standards;

• Optimum utilization and safety of assets;

• Compliance with applicable laws, regulations, listing applications and management policies; and

• An effective management information system and reviews of other systems.

0 MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Company strives to nurture the individual capabilities of its workforce to achieve the organisational goal of blending growth and achievement, ensuring everyone thrives while contributing to the Companys collective success. The Company has adopted guiding pillars to build a resilient, adaptive, and inclusive workplace where every team member is valued and uplifted.

• The Company focuses on taking various initiatives to make its workplace more engaging, collaborative, and fulfilling.

• The Company aims to empower its employees with userfriendly tools and ensure a digitally integrated and agile infrastructure.

• The Company is committed to an open-door policy and effective communication channels to maintain positive industrial relations. The Company addresses employee concerns through regular forums and committees, initiating dialogue and fostering a transparent and collaborative workplace.

• The Company has created a comprehensive diversity, equity, and inclusion policy to equal rights and respect for all individuals, regardless of gender, ethnicity, race, religion, marital status, or disability. ACE catalyses innovation, creativity, and collaboration by embracing varied perspectives. A diverse and inclusive workplace is a source of strength and essential for achieving the Companys business objectives.

The Number of permanent employees on the rolls of the Company as on March 31,2025 is 139.

0 DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

The Company has identified the key financial ratio as described in note no. 31 of the standalone financial statement that is the part of Annual Report.

0 RISK MANAGEMENT AND GOVERNANCE

Risk is an intergral and unavoidable component of business and your company is committed to managing risk in a proactive manner. Though risks cannot be completely eliminated; an effective risk management plan ensures that risks are reduced, avoided, retained or shared.

The company recognizes that effective risk management is crucial to its continued profitability and long-term sustainability of its business. Given the challenging and dynamic environment of your Companys operations, strategies for mitigating the inherent risks in accomplishing the ambitious plans for your Company is imperative. The Key business risks identified by your Company are given in Risk and Concern section of this report.

The risk horizon considered includes long term strategic risks, short to medium risks as well as single events. The risks are analyzed considering likelihood and impact as a basis of determining their management. The Company is committed to adopt good corporate governance, which promotes the long-term interests of all stakeholders, creates self-accountability across its management and helps built trust in the Company.

0 DISCLAIMER

Certain statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors.