Danlaw Technologies India Ltd Management Discussions

Overview

The financial statements have been prepared in compliance with accounting standards IND AS. Our Management accepts full responsibility for the integrity of these financial statements.

Market Scenario and Trends

The Indian Automotive industry is fastest growing market and remains a key contributor to Indias manufacturing sector. This growth is supported by rising domestic demand, increasing localization, favorable government policies, expanding exports and rapid digital transformation across vehicle platforms. Automotive industry is undergoing a fundamental transformation driven by Electrification, Connectivity, Software-Defined vehicles (SDV), Autonomous technologies, Artificial intelligence and safety regulations.

Our company continues to invest in its manufacturing business unit to support capacity expansion in response to surging demand—particularly in vehicle electrification and connected infrastructure. Danlaws Goa facility is scaling up its assembly and logistics capabilities to help meet both domestic and global market requirements, while positioning our company for long-term competitiveness.

Aligned with the "Make in India" vision, we are also deepening our engineering and R&D efforts across automotive, consumer, and medical electronics domains. Our focus on the development of innovative electronic systems for electric vehicles, smart consumer products, and medical devices allows us to address a diverse range of OEM and Tier-1 requirements—from two-wheelers and buses to personal health monitoring systems and loT-enabled devices.

Our Company is actively involved with the ITS India Forum, where we have been actively focused on the development and implementation of connected vehicle technologies for Intelligent Transportation Systems (ITS) in India. As a member of ITS India Forum, Danlaw Technologies focuses on the ongoing design, development and manufacturing of connected transportation hardware, software and IT solutions aimed at enhancing safety, efficiency, cost-effectiveness and sustainability of transportation systems in India.

Our company awarded with "Innovation in Vehicle Safety" award at Build India Infra Awards 2026 for the work of "V2X-Based green Corridor Project" and our Chairman Mr Raju S Dandu had the privilege of receiving the award from Mr Nitin Gadkari, Honble Minister for Road Transport & Highways, making an important milestone in Danlaaws connected mobility journey.

Our company remains deeply committed to supporting Indias goal of becoming a global electronics manufacturing and design hub. Through this strategic alignment, we aim to continue building our companys leadership position across the rapidly advancing EV, consumer, and medical electronics landscapes.

Opportunities

Our company remains focused on its efforts to identify and engage in critical market opportunities that are driven by market and government initiatives for vehicle electrification and safety critical infrastructure and applications. Ourteam remains committed to proactive planning and investment in meetingthe ever- increasing demand for engineering and manufacturing of electronics. These efforts are aimed at meeting the expanding needs of mobility and road user safety, to maximize our companys growth and competitiveness both domestically and globally.

Electric vehciles or Electric Mobility:

India continues its transition toward Electric Mobility across Two wheelers, Three wheelers, Passenger vehicles, Commercial Vehicles, Bus transportation. Key technology focus areas include Battery Management Systems, Battery Analytics, Battery Swapping, Charing infrastructure, Thermal Management,... Government initiatives such as PM E-Drive, Battery manufacturing incentives, Localization programs, and State EV policies continue to support ecosystem development.

Our company working on enabling Battery Swapping technology - tracking batteries, transmitting information used for Battery Analytics, key technologies used at swapping stations.

V2x and Intelligent Transportation Systems:

India is actively investing in Smart Cities, Intelligent Transport Systems (ITS), Connected Corridors, Emergency Vehicle Priority Systems, Smart Traffic Management systems.

Vehicle-to-Everything (V2x) communication is emerging as an important technology for road safety, congestion reduction, and Connected Mobility, supported by recent spectrum policy changes.

our company is Platinum member of ITS India Forum, Indias premier industry body promoting Intelligent Transport Systems. As part of this, technical experts participates in Technology forums, Round table discussions across India, promoting Danlaw & V2x Technology.

Increasing Vehicle Electronics Content:

Modern vehicles contain significantly higher electronic content that previous generations. Growth areas include more Electronic Control Units (ECUs), Domain Controllers, Sensors, Radars, Camera systems, Al processors, High speed Communication networks.

our company working on Connected Gateway Control module with Cybersecurity that acts as the secure central interface of a modern vehicle. It bridges different communication networks, routes data between functional domains, and acts as an onboard firewall protecting critical systems from external hacks.

Artificial intelligence Transforming Mobility:

Al is increasingly being integrated into Automotive products. Applications include Predivtive Diagnostics, Predictive maintenance, Driver Monitoring, Fleet Analytics, Autonomous functions, Generative Al in engineering. Al is expected to become a core differentiator across future vehicle platforms.

our company working on developing Smart Mobile application to use with automotive diagnsotics tool, that will be used by dealers for their vehicle service operations. Different applications to perform vehicle health check, Read diagnostics codes, Live Data monitoring, Software updates.

Telematics:

Our company is dedicated to leveraging its extensive experience in telematics to implement cutting-edge connected vehicle solutions that encompass hardware, firmware, and cloud-based IT systems. These systems enable the real-time transmission of crucial vehicle data, position information, and onboard

sensor data. By capturing and transmitting this data, we provide actionable insights that can be used to monitor and improve vehicle usage, driver behavior, and evaluate road conditions.

The real-time data we collect and transmit from our Telematics Control Units (TCUs) and connected vehicle products, have and continue to provide significant benefits for driver safety and the protection of vulnerable road users. Our systems have been developed to generate instant alerts related to potential hazards, such as sudden changes in road conditions, nearby pedestrians, or erratic driving behavior. By providing drivers with these timely warnings, we help prevent accidents before they occur, contributing to safer roads for everyone. Moreover, the data on driver behavior, such as braking patterns, acceleration habits, and adherence to speed limits, allows for targeted interventions to promote safer driving practices, which is particularly valuable for fleet management and insurance purposes.

In addition to improving safety, our telematics solutions enable better vehicle care and maintenance. Through the continuous monitoring of critical vehicle diagnostic information-such as engine health, fuel efficiency, battery status, and tire pressure—our systems can predict when maintenance is needed, reducing the likelihood of unexpected breakdowns. This proactive approach not only extends the life of the vehicle but also optimizes its performance, ensuring that it operates at peak efficiency. For commercial fleets, this translates into reduced downtime and lower maintenance costs, while for individual vehicle owners, it offers peace of mind and a better overall ownership experience.

Our solutions are versatile and applicable to a wide range of Original Equipment Manufacturers (OEMs) across various vehicle categories, including commercial vehicles, two-wheelers, electric vehicles (EVs), and internal combustion engine (ICE) vehicles. By integrating our connected vehicle technology, OEMs can enhance the safety, reliability, and efficiency of their vehicles, delivering greater value to their customers. Whether its improving the safety features of a passenger car, optimizing the fuel efficiency of a commercial truck, or extending the range of an electric scooter, our telematics solutions provide the data and insights needed to drive continuous improvement across the transportation landscape in India.

As the Indian automotive industry evolves, our company remains at the forefront of innovation, helping to shape a future where connected vehicles are the norm. By enabling real-time data capture, analysis, and monitoring, we are driving advancements in vehicle safety, reliability, and efficiency. Our commitment to delivering state-of-the-art telematics solutions positions us as a key partner for OEMs looking to enhance their offerings and meet the growing demands of a connected world. As we continue to expand our capabilities and partnerships, we are confident that our technology will play a pivotal role in making Indias roads safer, its vehicles more efficient, and its transportation system more sustainable.

Electronics Manufacturing

Indias electronics manufacturing services industry is growing at a rapid rate. This growth is driven by increasing interest in outsourcing in India by OEMs, coupled with expanding government incentives. According to a recent analysis published by Ernst & Young3, "Why Indias electronics manufacturing services (EMS) sector is growing," the shift from "plain vanilla contract manufacturing to ODM" is driven by the evolving needs of OEMs and Tier-1 suppliers for product innovation, as well as de-risking geopolitical uncertainties associated with far-east contract manufacturing. Other factors such as the rising cost of manufacturing in China, trade disputes, and the Indian governments efforts to attract foreign investment in the electronics sector are leaning in favour on the Indian EMS sector.

Danlaw sees this growth as a significant opportunity, allowing our company to enable OEMs and Tier-1 suppliers with expanded capabilities to bring products to market swiftly and efficiently through its GOA manufacturing facilities.

Threats, Risks and Concerns

The global automotive industry is navigating one of the most volatile and transformative periods in its history. Electrification, regulatory realignment, and geopolitical uncertainty are simultaneously driving innovation and exposing companies to structural and operational risk. Given the macroeconomic and geopolitical risks affecting the automotive industry, our companys leadership is working to build and execute a strategy that is focused on managing Danlaws exposure, while continuing to capitalize on emerging global opportunities.

With this stated, please find some of the challenges that we are actively focused on:

1. Geopolitical Risk & Trade Fragmentation

2. Regulatory Divergence

3. Currency Volatility (USD-INR, EUR-INR)

4. Tariff & Trade Barriers

5. Consumer Demand Shifts

6. Operational and Supply Chain Risks

• Semiconductor supply remains unpredictable, despite easing in 2024. Advanced node components (e.g., for ADAS and infotainment) remain constrained.

• Battery cell availability and pricing volatility (particularly for LFP, NMC chemistries) remain high risk areas due to global lithium sourcing challenges.

• Logistics disruptions—e.g., Red Sea tensions, port congestion, air freight cost spikes—can delay program launches or increase unplanned costs.

The following represent some of the critical initiatives that our companys leadership team is actively pursuing:

1. Diversify Strategic Partnerships

o Expand collaborations in India, ASEAN, and Eastern Europe to reduce reliance on China and U.S. sourcing pipelines.

2. Increase Investment in Regional Manufacturing

o Prioritize investments in India and North America, where policy incentives and market growth support domestic electronics and EV production.

3. Mitigate Financial Risk

o Establish stronger treasury controls around hedging, insurance, and working capital optimization to weather FX and interest rate exposure.

4. Embed Agility in Product Development

o Adopt a global product architecture strategy that allows for modular compliance and reduced lead times across variant platforms.

5. Strengthen Scenario Planning

o Conduct quarterly stress-testing for key risks (FX, tariffs, logistics) and develop actionable mitigation playbooks.

Conclusion:

The next 18-24 months are expected to be marked by continued volatility but high opportunity for companies that can adapt quickly, localize effectively, and innovate consistently. Danlaw considers itself to be a growth-focused supplier, and thus our leadership views this environment not just as a risk—but as a moment to build long-term strategic differentiation. By managing these financial risks effectively,

we expect to maintain profitability and continue to invest in the development of innovative solutions that meet the needs of our OEM customers in both domestically and abroad.

Performance and Business Outlook

Danlaw Technologies India Limited (DTIL) continues to strengthen its position as a premier provider of automotive electronics design, development, and manufacturing solutions. With a focused strategy built on innovation, strategic collaboration, and scalable manufacturing, the company is well-positioned to capitalize on the rapid transformation of the global mobility and electronics manufacturing ecosystem.

The long-term outlook for the Indian automotive sector remains positive, supported by rising Incomes, Urbanization, Digital adoption, Infrastructure investments, and Government initiatives promoting localization, sustainability, and road safety. The industry is expected to evolve toward Software-defined, Connected, Electrified, and Intelligent Mobility, creating sustained demand for advanced Engineering services, Embeeded Software, Cybersecurity, Connected Vehicle technologies, and Al-driven Mobility solutioins.

Danlaw focused on advanced technology development, these structural shifts provide significant opportunities to strengthen partnerships with OEMs and Tier-1 suppliers while expanding capabilities in Connected Mobility, V2x, Telematics, Software-Defined Vehicles, and next generation automotive electronics.

Performance Highlights

Over the past year, DTIL has demonstrated resilient growth, driven by:

• Robust R&D Investment: The company continues to channel significant resources into advanced R&D for EV systems, Vehicle telematics for domestic & exports, Tracking product for battery Swapping units, V2x based safety systems, ADAS, Clusters, Connected Gateway Control Module, Smart Mobile diagnostic applications and connected vehicle platforms. With strong in-house engineering capabilities, DTIL is delivering next-generation solutions that meet the evolving demands of both domestic and global OEMs.

• Expansion of Manufacturing Operations: The Goa-based manufacturing facility has expanded its capacity in response to increased demand for localized production. The facility supports PCB assembly, sub-system integration, and logistics for a growing range of automotive, industrial and medical electronic products.

• Customer Base Growth: DTIL has secured key program wins with leading OEMs and Tier-1 suppliers in India, the US, and Europe, reflecting strong customer confidence in its quality and technical expertise.

Strategic Focus Areas

1. R&D-Driven Innovation

o DTIL is investing in smart mobility, electrification, and functional safety technologies.

o Emphasis on in-vehicle networking, vehicle-to-everything (V2X), and cybersecurity

ensures alignment with future mobility standards.

o The companys R&D teams are actively working on IP development for advanced connectivity, video telematics, proprietary ECU platforms and battery management systems (BMS).

2. Strategic Partnerships

o DTIL is forging strategic alliances with semiconductor providers, system integrators, and automotive OEMs to co-develop advanced electronics modules.

o Collaboration with academic and industry research institutes continues to enable early- stage exploration of Al and ML applications in advanced dashcam technology, vehicle diagnostics and predictive maintenance.

3. Make in India & Localization Strategy

o Strong alignment with Indias PLI schemes and the Make in India initiative is fueling domestic growth.

o DTIL is scaling up local sourcing and expanding partnerships with India based electronics vendors to enhance supply chain resilience and cost efficiency.

Business Outlook (2026 and beyond)

Looking ahead, DTIL is optimistic about continued growth opportunities in the following areas:

• Electric Vehicle Ecosystem: As EV adoption accelerates globally, the demand for locally designed and manufactured electronics—such as inverters, BMS, and motor controllers—will continue to rise. DTIL is strategically positioned to capture a significant share of this market.

• Telematics and Connectivity Solutions: With increasing demand for fleet management, usage- based insurance, and connected infotainment, DTILs telematics platforms and OTA (over-the-air) update systems are gaining traction with both the commercial and passenger vehicle markets.

• Global Market Expansion: DTIL is actively exploring opportunities in North America, Europe and Southeast Asia to expand its footprint, supported by its scalable product platforms and growing reputation as a reliable Tier-1 electronics partner.

• Diversification into Adjacent Verticals: Leveraging its core capabilities, DTIL plans to extend its design and development services into medical and consumer electronics, with a focus on sensor- rich and embedded systems applications.

Conclusion:

Danlaw Technologies India Limited is strategically positioned for sustainable growth in the rapidly evolving automotive electronics sector. By leveraging its strong R&D foundation, expanding its manufacturing capabilities, and fostering strategic partnerships, DTIL is set to play a pivotal role in shaping the future of smart and electric mobility—both in India and around the world.