Euro Asia Exports Ltd Management Discussions

Overview

Management discussion and analysis of financial condition and results of operations include forward looking statements based on certain assumptions and expectations of future events. The Company cannot assure that these assumptions and expectations are accurate. Although the management has considered future risks as part of the discussions, future uncertainties are not limited to the management perceptions.

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and Generally Accepted Indian Accounting policy in the year. The Management of the Company accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates and judgements used therein. The estimates and judgements relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present the Companys state of affairs and profits for the year.

The following discussion may include forward looking statements, which may involve risks and uncertainties, including but not limited to the risks inherent to Companys growth strategy, dependency on certain clients, dependency on availability of qualified technical personnel and other factors discussed in this report.

The global drone industry exhibits a complex, multitiered structure comprising hardware manufacturing, software and autonomy, and service delivery, spanning both commercial and military sectors. In manufacturing, Chinese firms most notably DJI continue to dominate, accounting for 70 80% of drone exports and holding the majority share in the consumer market. Yet, a shift is underway: regions like India, are becoming significant hubs for defensefocused drone production, buoyed by initiatives such as the ProductionLinked Incentive (PLI) scheme and a drone import ban.

On the technology front, innovation is accelerating through integration of AI, autonomy (e.g., BVLOS), edge processing, 5G, and advanced payloads like thermal cameras, LiDAR, and multispectral sensors. The sector has seen proliferation in startups and R&D, with thousands of companies worldwide, notable funding rounds averaging USD 27 million, and tens of thousands of patents filed underscoring the industrys dynamic and innovationdriven nature.

Growing Thermal Drone Demand: Leveraging thermal imaging for nighttime surveillance, search & rescue, border security, and industrial inspections is a highgrowth area.

Diverse Commercial Applications: Drones in construction, agriculture, mining, telecom, public safety, and entertainment offer broad opportunity.

Autonomy & AI Integration: Autonomous drones powered by AI/ML are transforming surveillance, delivery, logistics, and inspections.

Expanding Drone Cybersecurity: With cyber threats on the rise (e.g., GPS spoofing, hacking), theres growing demand for secure systems and encrypted communication, especially for defense applications.

Government Support & Events: Indias Amaravati Summit demonstrates proactive policy support, training initiatives, and investment goals.

Regulatory Hurdles: Stricter drone regulations, BVLOS controls, remote ID, and airspace coordination demand continuous compliance.

High Initial Costs: Thermal drone systems are expensive; high development costs and battery/data processing limitations may deter buyers.

Talent Shortages: The drone industry faces a shortage of skilled professionals in development, operations, and cybersecurity.

Regulatory complexity, high costs, cybersecurity vulnerabilities, talent gap, strong competitors, technical constraints, privacy concerns.

The Company continues to monitor these risks closely and has implemented appropriate mitigation strategies, including project risk assessments, diversified client portfolios, robust compliance frameworks, and investment in innovation and human capital development.

The Company anticipates steady growth in as thermalimaging and nightvision drone ventures is exceptionally promising. Continued government initiatives, technological advancements, and urbanization are expected to create strong opportunities. While challenges such as competition and regulatory changes persist, the Company is wellprepared to capitalize on emerging trends through innovation, operational efficiency, and strategic focus, aiming for sustained longterm growth.