Eimco Elecon (India) Ltd Management Discussions

ANNEXURE - ‘C TO BOARDS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENT

COAL / METAL INDUSTRY

With the fifth-largest coal reserves and as the second-largest consumer, coal remains crucial, contributing 55% to the national energy mix and fuelling over 74% of total power generation. Despite the increasing thrust on development of renewable energy sources, coal will continue to remain the bedrock for Indias energy matrix for the time being, given its domestic availability as an efficient fuel. Coal is likely to the short-to remain a significant medium term, especially in sectors such as power generation, steel and cement, where alternative energy sources are not yet fully viable. India has one of the lowest per capita electricity demand and is poised to experience more energy demand growth than any other country over the next decade. It is envisaged that new segments such as power demand from use of electric vehicles and demand for coal from the chemicals sector etc. would also add to the existing demand. As per assessment under Vision 2047, coal is likely to be the major contributor for energy security of the nation. Though demand growth may slow down in coming years, the absolute demand will not be less than the present as base load requirement will continue to be met from coal.

Indias coal production has grown 5% in FY25 to reach 1047 million tonnes (mt) compared with 997.83 mt in FY24. Production crossing the billion tonne mark was largely backed by a 28.18% growth from captive miners which produced 197.60 mt in FY25 compared with 154.16 mt in FY24. Coal India, which produced a total of 781.08 mt in FY25, also has ambitious plans to scale up production from underground mines. Indias coal imports witnessed a sharp decline of 7.9% totalling 243.63 million tonnes (MT), down from 264.5 MT in the same period the previous fiscal

Commercial coal mining for sale of coal was launched for the first time in India on the 18th June 2020 to increase production of domestic coal and make India Atmanirbhar in Coal sector. Within a short span of 4.5 years, 10 rounds of auctions have been conducted successfully auctioning 113 coal mines having Peak Rated Capacity of ~257.60 MT. Commercial coal mining is a big boost for coal sector.

Our equipment demand largely depends on the underground (UG) coal mining production. UG coal is superior in quality compared with Opencast (OC) and reduces the import burden for higher grades of coal. Further, UG mining is minimally invasive on land, detours land acquisition, avoiding its degradation, environmentally clean, and is society friendly. India has huge untapped potential for UG mining, with extractable reserves beyond 300 m depth. Around 70% of the countrys coal reserves are amenable to UG mining, which delivers several advantages. Inspite-of these advantages, the contribution of UG mines to total Coal production is currently less than 4 %. So far, the primary reason for slow-pedalling UG mining was loss-incurring production due to conservative and manual operations, which lead to low productivity. However, now the technology upgradation to blast free technology has opened new avenues.

To accelerate the growth/ Operationalisation of underground coal mining, recently in April 2025, the Ministry of Coal has introduced a robust package of incentives. The policy reforms include two significant financial incentives to enhance the economic viability of underground mining ventures. These forward-leaning reforms mark a strategic shift toward cleaner and more sustainable coal extraction practices. They are poised to unlock the vast untapped potential of underground mining in India, fostering innovation, reducing carbon emissions, and contributing meaningfully to the nations energy security and Atmanirbhar Bharat objectives.

OPPORTUNITIES AND THREATS

In the underground mining sector, the coming days will witness increase in demand for equipment catering to blast-free technology in underground coal mines and bigger size loaders and low profile dump trucks in the metal mines namely Zinc, Copper and Uranium etc.

There has been the spectacular rise of the mine development operator (MDO) mode of mining. Subcontracting of mine operations has been a major feature of the coal industry for more than two decades now. It has also brought considerable financial and operational efficiencies to Coal The Underground mining equipment market is expected to be dominated by the manufacturers, who are having one stop solutions for all the customer needs. We have in Eimco Elecon, a major stake of products serving coal segment underground mining equipments and we have adopted with agility the new technological changes and are ready with full bouquet of blast free Continuous Miner technology.year.

Consistent high metal prices and more participation of the private players in mining has boosted the growth of the underground mining equipment in the hard rock sector also.

The biggest threat still persists is "With huge mineral deposits the mining sector still suffers largely from legacy issues, exploration of minerals resources not up to the level it should be, land acquisition issues, environment issues, safety, latest technology adoption and modernisation and emphasis to move towards cleaner energy." "Resources depletion and operational challenges still remain to be addressed through innovation and sustainable practices."

PRODUCT AND PERFORMANCE

Intermediate technology continues to be the backbone of UG Coal mining production with around 65 percent of the total UG Coal production being met by Side Dump Loaders (SDL) and Load Haul Dumpers (LHD). We are a leading player in this segment.

Our indigenously developed Continuous Miner package is being delivered to customers now and performance need to be established in the coming days at mines.

Our bigger size LHD of 7 Tone and 10 Tone capacities have been established successfully for Metal mines. We are also growing rapidly our product lines in this segment.

FUTURE SCENARIO

Battery operated vehicles for both coal and Non Coal UG mines offers many operational advantages in underground mines and we expect increase in demand. The productivity and safety boosting solutions like the passenger carriers and the utility vehicles will also see increased demand. Presently, we are working on to launch suitable products soon to meet the demands in India.

We also foresee that customers will expect equipment with more automation and digitalization which enhances overall mining efficiency, safety and minimizes environmental impact.

Eimco Elecon is gearing up to take these challenges.

The outlook for the mining equipment industry is very positive for next decade with India posing for big dream Viksit Bharat 2047.

RISK AND CONCERNS

The main risk and concern of the Company remains that it continues to depend more on growth of Coal mining sector in India particularly UG Coal mining. The competition in the UG mining equipment sector also may increase in the coming days. The market is expected to move towards more advanced technology products which are being dominated by globally established players, and our Company is gearing up its capabilities.

CONSTRUCTION EQUIPMENT INDUSTRY

The India Construction Equipment Market is witnessing remarkable growth, driven by the increasing demand for heavy construction equipment across various sectors such as infrastructure, construction, port development, oil & gas, and manufacturing. This market growth is supported by government initiatives aimed at enhancing infrastructure development. The trend towards urbanization and the need for improved transport infrastructure are also significant factors contributing to the markets expansion.

However, Indias construction equipment industry witnessed 3% a compared to the double-digit growth of previous year, due to election-related restrictions on new projects despite optimism for future growth.

At Eimco Elecon our major focus area is to expand product portfolio, enhance presence in different geography, collaborate for future technology, development of Sustainable and green equipment.

OPPORTUNITIES & THREATS

The construction equipment industry in India is poised for significant growth due to infrastructure development, urbanization, and technological advancements.

Eimco Elecon, known for its mining and construction equipment, stands to benefit from Indias massiveinfrastructureinitiatives, growth between FY 2025-2030,

Urbanisation and Industrial Growth, Ports, Metros, Underground road network for Metro cities. These projects require advanced and reliable construction machinery, providing Eimco Elecon with a strong demand for its equipment, especially in sectors like road construction, metro rail, urban development, tunnelling, and Port development.

Increased collaboration between the government and private sector will further fuel demand for construction machinery in various infrastructure projects, including roads, railways, and ports. There is a rising focus on green construction, with many projects focusing on energy efficiency, sustainability, and minimal environmental impact. Construction equipment with low emissions, fuel efficiency, and high productivity can capitalize on this trend. At Eimco Elecon we are actively working on development of sustainable and green equipment for the industry.

Indias position as a manufacturing hub for construction equipment opens opportunities for exports, particularly to emerging economies in Africa, Southeast Asia, and the Middle East.

We have potential to further expand our product offerings by developing specialized equipment for niche markets, such as advanced piling rigs, tunnelling machines, and foundation equipment. This would meet the growing demand for specific equipment for high-end infrastructure projects like deep foundations and underground construction.

However Indian construction equipment manufactures has to navigate the challenges offered by Chinese construction equipment manufacturers offering of similar equipment at very competitive prices, the challenge of Skilled manpower shortage is also affecting advance product development along with cost pressures, supply chain issues, and regulatory hurdles to fully capitalize on these opportunities.

PRODUCT AND PERFORMANCE

We have made significant strides in the development of new products, including the manufacturing of Piling Rigs under the Make in India initiative, in technical collaboration with CZM from the USA. These rigs outperform competitors in the market, offering enhanced features such as a high torque-to-weight ratio for exceptional productivity with minimal fuel consumption.

Additionally, they include an anti-shock valve for smooth hard rock cutting, providing extra protection to hydraulic components during spin-off, ensuring longer hydraulic component life. The cost-effective, replaceable rotary internal locks and a unique

Kelly bar made from special Hardox further set us apart from competitors.

Moreover, we are currently in the process of developing new products, including additional models for our Piling Rigs, tailored to meet specificmarket demands of small and large pilling machines for various applications. Additionally, we are advancing the development of Diaphragm Wall Machines, further expanding our product portfolio to offer innovative solutions to our customers.

FUTURE SCENARIO

The Indian construction equipment (CE) industry is expected driven towitness significant by government-led infrastructure projects, advancements in technology, and increasing demand for sustainable solutions.

The Indian construction equipment market is projected to grow at a CAGR of 6-8% during this period. Major demand will come from road construction, railways, metro projects, mining, and real estate development. The governments National

Infrastructure Pipeline (NIP) worth 143 trillion will ensure a steady demand for construction machinery.

Government is focusing on increased localization under make in India push to reduce dependence on imported components and machines making major global players planning to set up production / JV units in India to cater to domestic and export markets.

The future of construction equipment in India (FY 2025-2030) is promising. Companies like Eimco Elecon investing in sustainable, smart, and localized production should have advantage.

INTERNAL CONTROL SYSTEM

The Companys internal control systems are adequate, considering size and nature of operation of the Company, to meet regulatory /statutory requirements.

DEVELOPMENTS ON HUMAN RESOURCE/ INDUSTRIAL RELATIONS FRONT

The Company attaches utmost priority to human resource development with focus on regular upgradation of the knowledge and skills of all employees and equipping them with the necessary expertise to meet the challenges of change and growth successfully. The company continuously monitors its manpower requirement to ensure that it has adequate human skills commensurate with its needs. Industrial relations of the Company continue to be cordial. As on 31st March, 2025, there were 123 permanent employees on role of the Company.

KEY FINANCIAL RATIOS

Pursuant to Schedule V(B) to the Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015, the Key Financial Ratios along with detailed explanations are as follows:

No.	Ratio	2024-25	2023-24
i.	Debtors Turnover	3.02	3.07
ii.	Inventory Turnover Ratio	1.07	1.41
iii.	Interest Coverage Ratio	841.64	153.14
iv.	Current Ratio	4.63	3.45
v.	Debt Equity Ratio	0.00030	0.00106
vi.	Operating Margin	22.60%	17.00%
vii.	Net Profit Margin	18.47%	16.43%
viii.	Return on Net Worth	11.96%	10.00%

The Annual Report has details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios as applicable, along with detailed explanations thereof is also part of this Annual Report.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFOR-MANCE AND OUTLOOK

Revenue from Operations & Other Income for the year ended 31st March, 2025 were 26,479.81 Lakhs as compared to 24,592.47 Lakhs on 31st March, 2024. The net profit stood at 4,890.68 Lakhs (previous year 4,041.16 Lakhs).

CAUTIONARY STATEMENT

Statements in this report on describing the Companys objectives, expectations or predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could, however, differ materially from those expressed or implied.

The Company assumes no responsibility in respect of forward-looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.

For and on behalf of the Board of Directors,

Mukulnarayan Dwivedi	Prayasvin B. Patel
Executive Director	Executive Director
DIN : 08442155	DIN : 00037394
Place : Vallabh Vidyanagar
Date : 23th April, 2025