Foseco India Ltd Management Discussions

6https://ifexindia. com/

The Companys legacy, built over six decades since its founding in 1958, is defined by its relentless focus on innovation and R&D. This commitment underpins the Companys operations, driving advancements that have transformed foundry processes. By leveraging cutting-edge technologies, including proprietary product formulations and computer simulations, Foseco India consistently reduces casting defects, optimises resource utilisation, and enhances product quality. Innovation is not an ancillary function but the lifeblood of the Company, enabling it to partner with foundries to improve critical processes like moulding and casting while championing sustainability and safety. Through continuous R&D and collaborative partnerships, Foseco India shapes the future of the foundry industry.

These water-based and solvent-based coatings for ferrous castings have delivered 24% reduction in actual coating costs delivered ecofriendly packing solution, and extended shelf life, saving valuable time and resources.

Airless Spray Coating systems enhances coating performance to deliver excellent Casting surface finish, also improves the productivity by reducing coating application time by 50%.

After successful testing of ROTOCLENE technology, we introduced ROTOCLENE to two new foundries. This innovative method employs advanced rotary stirring equipment to create a precise curtain of argon bubbles within molten steel, effectively capturing impurities and enhancing metal purification. It also helps with temperature homogenization enabling pouring temperature reduction. ROTOCLENE ensures superior-quality castings with reduced defects and significantly lower re-work costs and time, making them indispensable for high safety-critical, relatively large steel castings like wheel hubs for mining trucks, high-strength, low-alloy steel critical components, and critical valves and pumps.

Foseco India is optimistic about Indias growth story in the coming years. While the Indian economy and the foundry industry will continue to grow, the Companys objective remains to outpace the market. It plans to drive growth by focusing on key accounts, the indirect channel, and innovation.

The plan is to continue working closely with the OEMs and Key Accounts to develop new and more complex castings, improve processes, reduce overall costs, and help achieve sustainability goals. The Company sees increasing aspirations of Indian foundries to compete globally and develop export markets. It plans to be a partner in their journey by bringing in its local and global experience, process and application expertise, and innovative products.

The Company will continue to expand its coverage mostly through strengthening of the distribution network in under-penetrated geographies. It will continue to build its indirect channel capabilities to align with its direct channel capabilities. Its business model, through either direct or indirect channels, will remain around solutions partnering and value selling. Therefore, Foseco India views its Distributors as partners who share its values and passion for serving the foundry industry and work collaboratively with it to help foundries achieve their goals.

The Company will continue to innovate locally and globally, thereby enabling foundries to make better castings. It plans to increase its R&D efforts to innovate locally and provide customised solutions to its customers. It will also introduce its global innovations in India at a faster pace so that eligible foundries can benefit from them. The Company will strengthen the connection between global and local teams so that it can feed ideas and projects into the global R&D pipeline while keeping the local market in mind.

In 2025, our company has maintained its growth trajectory, demonstrating strong performance through enhanced revenue generation, improved profitability metrics, and effective management of trade working capital. Despite continuing challenges in the raw material landscape and occasional price volatility, Foseco India successfully strengthened its market position by providing innovative solutions to help customers overcome these challenges. Our value-driven approach enabled us to effectively manage cost pressures while maintaining competitive pricing. Additionally, our strategic focus on working capital management has yielded positive results, particularly in optimizing trade receivables cycles.

Foseco India continues to lead the industry in technological advancement, with significant developments in both ferrous and non-ferrous foundry solutions. Our commitment to sustainable development remains paramount, with our R&D efforts focused on creating environmentally conscious products. In response to evolving environmental regulations and increasingly demanding OEM specifications, we have proactively developed compliant solutions for our customers. Our comprehensive product and service portfolio not only drives operational efficiencies and cost optimization but also enables our customers to achieve their growth objectives. We have further strengthened our distribution network, expanding our reach to serve a broader spectrum of foundries. Our strategic initiative to cater to smaller foundries has been particularly successful, with specialized products and solutions designed to meet their specific needs.

To support our expanding customer base, we have implemented strategic organizational enhancements, including talent acquisition, process optimization, and capability building. We continue to invest in personnel development, operational excellence, and global knowledge sharing. These investments position us strongly to capitalize on emerging opportunities and drive sustained growth.

Our strategic priorities continue to focus on deepening market penetration and strengthening our competitive position in the foundry sector, while maintaining a sharp focus on profitability and working capital efficiency.

We remain committed to elevating our safety standards and maintaining superior product quality, reflecting our unwavering dedication to employee welfare and customer satisfaction. Our investments in sustainability initiatives and technological advancement position us well to meet evolving market demands while contributing to a more sustainable future for the industry.

As we entered into 2026, we are focused on implementing innovative strategies to drive sustainable growth while reinforcing our leadership position across all segments and regions within the foundry industry. Our strategic initiatives for 2026 will emphasize volume growth, sustainable manufacturing practices, and enhanced technical service capabilities to meet evolving market demands.

We remain committed to elevating our safety standards and maintaining superior product quality, reflecting our unwavering dedication to employee welfare and customer satisfaction. Our investments in sustainability initiatives and technological advancement position us well to meet evolving market demands while contributing to a more sustainable future for the industry. The Company anticipates significant opportunities in 2026 through the expansion of our product portfolio, strengthening our technical service infrastructure for the utmost satisfaction of our customers.

Table 1: Abridged Profit and Loss Account

Table 2: Key Financial Ratios

Your Company delivered a robust financial performance during the year, recording revenue growth of 15.1% over the previous year. This growth was driven by strong demand, strategic pricing initiatives, volume growth, and continued market expansion. Disciplined working capital management and effective cost control measures contributed meaningfully to profitability while supporting a sound liquidity position. Optimized working capital enabled the generation of healthy operational cash flows of Rs. 9,162.36 lakh. Supported by a strong balance sheet, efficient capital management, and a continued focus on cost discipline and volume led growth, the Company is well-positioned to sustain its growth trajectory. Leveraging innovation and emerging market opportunities, it remains committed to delivering long-term value creation.

The Company has followed the Indian Accounting Standards (Ind- AS) for drawing-up its accounts as prescribed by the Institute of Chartered Accountants of India, in the preparation of financial statements. There are no audit qualifications in the Companys financial statements for the year under review.

The Company strives to achieve the highest standards of HSE practices, having adopted an Integrated (Quality, Health, Safety and Environment) Management System (IMS) accredited to ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018. The Company

has well established HSE standards and monitoring process for each of its operations. Every employee is required to conduct safety audits and suggest safety improvement opportunities. These improvement opportunities are reviewed by HSE team members and wherever feasible these are implemented in the safety culture journey. It also runs continuous improvement programs for employees health and environment. To increase HSE awareness amongst employees, the Company regularly conducts internal competition and participates in competitions organised by trade bodies. The Company has launched sustainability drive with the defined targets to reduce its environmental footprint in terms of CO₂, Energy, Waste and Water. The Company has invested in own generation of green energy source by solar power project in Pune with the capacity of 565 kWP. The Company has implemented specific measures to reduce its CO₂ emissions & neutralised its Scope-2 emissions with green energy contracts.

The Company is acknowledged in the market for its consistent product quality and technical expertise. The consistent quality products adds value in the customer processes. The Company is committed to support customers with reliable products, which it strives to deliver through best-in-class quality management in its production sites. Its quality systems define the commitments and responsibilities which apply to all aspects of the business. To demonstrate this, the Company has an established process to address Customer complaints which ensures participation from cross-functional experts and thus, committed to ensure customer satisfaction. The 8D PPS (Practical Problem Solving) methodology enhances the problem-solving capability of team members which is recognized in the form of regional contest and Awards.

Foseco India has state of the art manufacturing facilities in Pune and Puducherry. It serves Indian markets and supports other countries through inter-company sales. It also imports products from its group manufacturing locations in other parts of the world. Foseco India has end-to-end responsibility of the entire supply chain process - from purchase to manufacturing process, quality to despatch. This workflow ensures that the team is responsible for safety, quality, production, cost and product delivery. The Company is progressively using operational excellence tools to standardise its processes and activities and ensure efficient systems to delight customers. With the Lean philosophy, focusing on people participation and engagement through initiatives like Kaizen Factory, the Company is becoming more flexible to take new challenges in customer satisfaction. This creates a healthy competition with rewards & recognition, enhancing the culture of continuous improvement. These initiatives are very well backed by innovative engineering practices and solutions. Foseco India has constantly carried out improvement initiatives to maintain and upgrade its manufacturing facilities through revenue expense and capex.

At Foseco India, our people remain our most enduring competitive advantage. In 2025, the Human Resources function focused on four interconnected priorities: fostering collaboration, sustaining a highly engaged workforce, strengthening our talent base, and building a future-ready pipeline - all in service of taking the organisation to the next level.

The strength of our culture was reaffirmed in 2025 through our participation in the I-Engage survey, where Foseco Indias Foundry Business achieved an exceptional engagement score of 91 out of 100 - setting a benchmark within the Vesuvius Foundry Business globally. This score is a testament to the collaborative spirit that defines how our people work - across functions, geographies, and hierarchies. By prioritising consistent communication, responsive HR practices, and employee wellbeing, we have built a workplace where people feel genuinely valued. This was further recognised through our re-certification as a "Great Place to Work" in 2025.

We made targeted and meaningful talent additions during the year, bringing in experienced professionals across critical roles in field HR, Sales and key support functions. These additions have meaningfully enriched our experience pool, complementing our existing capabilities and reinforcing our position as the market leader in the Indian foundry sector. The rich experience that the newly added Talent brings on to the table gives outside in perspective to run our business in more efficient manner focusing on digitalization.

Listening to our people has always guided our approach. The I-Engage survey clearly signalled a strong appetite for holding career dialogues and learning avenues for growth - and we responded with intent. In 2025, we delivered technical programmes that helped employees sharpen their capabilities, deepened domain expertise, and fostered a forward-thinking mindset across the organisation. This effort runs through 2026 and will have a specific employee growth focus here.

A laser focus on pipeline building remains central to our longterm ambition. Our Graduate Engineering Programme, in its 5^th year will have specific focus for key roles and through on the job training, making this pool ready for transitioning into high- potential engineers from campus into impactful roles within the business. Complementing this, internal job postings and employee referral programmes ensured that 45% of open positions were filled through internal promotions and referrals - a reflection of the depth and quality of talent we are cultivating from within.

As we look ahead, our people strategy remains firmly anchored in collaboration, continuous learning, and building the talent foundation that will carry Foseco India into its next chapter of growth.

The Companys CSR activities are primarily focussed on the disadvantaged, vulnerable and marginalised segments of society in the areas of education, healthcare, social causes and environment. CSR projects are undertaken with the aim of uplifting the social lives of the people living in the rural areas, providing education to the deprived and skill building.

To lay greater focus on CSR, the Company has roped in the services of a renowned Non-Governmental Organisation (NGOs) who specialises in identifying socially beneficial projects for the Company. Towards that end, the Company has done commendable work in the vicinity of its plant in Pune.

During the year, the Company had completed the basic infrastructure facilities in a residential school near the Companys plant, as a result of which the students are greatly benefitted. The school provides free education and boarding at its premises to children of migrant workers and labourers residing nearby. As a result of these initiatives, the school is drawing more children to take admission in the school. In another nearby village which is deprived of basic necessities and infrastructure, the Company has built modern amenities and infrastructure for them. The village has a school which was provided with a classroom, a library and other necessities.

The continued association with Jehangir Hospital for detecting juvenile diabetes in young boys and girls and supporting their families by distributing medicine and diabetics kits for the treatment of diabetes has given the children access to better treatment and medicine from the hospital.

The Companys IT systems are very robust and are running seamlessly to lend support to people working from anywhere. The IT processes of the Company are accredited to ISO 9001:2015.

The Company adopts a rigorous system of Internal Control and Risk Management to ensure all assets are safeguarded and protected against loss from unauthorised use or disposition and that transactions are authorised, recorded, and reported quickly. In addition, the Company has a well-structured system of risk assessment and risk reporting.

The Companys internal controls are supplemented by an extensive programme of internal audits, review by management and documented policies, guidelines and procedures. The internal controls are designed to ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets. During the year, due care has been exercised by the Company with respect to all the requirements of the Company Law and Listing Regulations.

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results might differ materially from those expressed or implied. Important developments that could affect the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in government regulations, tax laws, and other factors such as litigation and industrial relations.