Gala Precision Engineering Ltd Management Discussions

Global Economic Overview Growth Outlook

The global economy is projected to experience a slowdown in growth over the coming years. According to the Organisation for Economic Co-operation and Development (OECD), global GDP growth is expected to decelerate from 3.3% in 2024 to 2.9% in both 2025 and 2026. This marks the weakest growth period since the COVID-19 pandemic.

The International Monetary Fund (IMF) offers a slightly more optimistic forecast, projecting global growth at 3.3% for both 2025 and 2026. However, the World Banks projections align more closely with the OECD, estimating a steady growth rate of 2.7% for 2025 and 2026.

Regional Highlights

United States: The OECD forecasts a significant slowdown in U.S. economic growth, projecting a decline from 2.8% in 2024 to 1.6% in 2025 and further to 1.5% in 2026. This deceleration is attributed to the adverse effects of increased trade tariffs and policy uncertainty.

China: Growth in China is expected to moderate, with the OECD projecting a decrease from 5% in 2024 to

4.7% in 2025 and 4.3% in 2026, reflecting structural challenges and reduced external demand.

Eurozone: The Eurozones growth is anticipated to remain subdued, with projections of 1% in 2025 and

1.2% in 2026, influenced by ongoing trade tensions and sluggish investment.

India: India continues to be one of the fastest-growing major economies globally. According to the National

Statistical Office (NSO) and Reserve Bank of India

(RBI):

The Indian economy recorded an estimated GDP growth rate of 6.5% for FY 2024-25, maintaining strong momentum driven by robust domestic consumption, increased infrastructure spending, and private investment revival (NSO Provisional Estimates, May 2025).

The IMF also aligns with this outlook, forecasting Indias growth to stabilize around 6.4% annually from

FY 2025-26 through FY 2029-30 (IMF World Economic Outlook, April 2025).

Key Economic Indicators

Indicator	FY 2023-24	FY 2024-25 (Est.)
GDP Growth Rate (%)	7.6%	6.5%
Consumer Price Inflation (CPI, avg.)	5.5%	3.1% (Apr. 2025)
Gross Capital Formation (% of GDP)	33.2%	34.1%
GST Collections ( crore)	17.6 lakh	19.2 lakh
Manufacturing PMI (Average)	55.7	56.4

(Sources: RBI Monetary Policy Statement, April 2025; Ministry of Finance Economic Survey 2024-25)

Inflation Trends

Inflationarypressuresareexpectedtopersistglobally.TheOECDprojectsinflationin its member countries to reach 4.2% in 2025, up from previous estimates, before easing to 3.2% in 2026. This persistence is attributed to factors such as elevated trade costs and supply chain disruptions.

Key Risks

Trade Tensions: The resurgence of protectionist policies, notably the U.S.s increased tariffs, has introduced significant uncertainty, dampening investment and disrupting global supply chains.

Policy Uncertainty: Unpredictable policy shifts, especially concerning trade and fiscal measures, are undermining business confidence and investment decisions.

Financial Market Vulnerabilities: High equity valuations and potential corrections pose risks to financial stability, particularly if economic growth continues to weaken.

Growth Performance

Infrastructure and Investment Trends

Infrastructure spending remains a pivotal growth driver, led by significant investments in roads, railways, renewable energy, and urban development projects. The governments flagship initiatives, such as Bharatmala, Sagarmala,

Smart Cities Mission, and dedicated freight corridors, continue to gain traction, bolstering industrial growth and employment.

Foreign Direct Investment (FDI) inflows increased to approximately US$ 88 billion in FY 2024-25, driven by reforms enhancing ease of doing business, attractive PLI schemes, and Indias strategic positioning as a global manufacturing hub, particularly under the ‘Make in India initiative.

Manufacturing Sector

The manufacturing sector contributed approximately 17.8% to Indias Gross Value Added (GVA) in FY 2024-25, reflectingmoderate growth from 17.3% The production-linked incentive (PLI) scheme continues inthepreviousfiscal. to drive investments, particularly in electronics, automotive components, pharmaceuticals, and renewable energy equipment.

The Index of Industrial Production (IIP) rose by around 5.2% in FY 2024-25, reflecting robust growth across manufacturing and electricity sectors, although the pace moderated from the sharp post-pandemic recovery witnessed earlier.

Trade and External Sector

Indias merchandise exports crossed US$ 470 billion in FY 2024-25, driven by increased demand in pharmaceuticals, engineering goods, electronics, and renewable energy components. The country is steadily progressing towards its ambitious target of US$ 2 trillion in total exports by 2030, split equally between merchandise and services.

The governments Foreign Trade Policy (FTP 2023) emphasizes digitization, simplified processes, and strategic market diversification, reducing dependency on traditional markets and enhancing competitiveness in global trade.

Per Capita Income Growth

Indias per capita income is projected to rise significantly from approximately US$ 2,800 in FY 2024-25 to US$ 3,900 by FY 2028-29, marking an estimated compound annual growth rate (CAGR) of 7%. This growth trajectory underscores Indias gradual transformation towards becoming a middle-income economy, driven by robust domestic consumption and increasing global trade integration.

Challenges and Risks

Despite robust economic performance, India continues to navigate several challenges:

Geopolitical uncertainties: Persistent global tensions, trade conflicts,and protectionism could disrupt supply chains and export markets.

Energy security and inflation management : While inflation has moderated, external shocks, particularly in global energy markets, could pose risks.

Employment creation: Sustainable employment generation remains crucial for inclusive growth, requiring continued focus on skill development and labor market reforms.

Outlook

Indias medium-term economic outlook remains robust, underpinned by sustained government investment in infrastructure, improving business climate, and demographic advantages. Continued structural reforms, stable monetary and fiscal policies, and strategic global positioning as an alternative manufacturing hub (the "China Plus One" strategy) will likely sustain Indias strong economic growth trajectory over the coming years.

Renewable Energy Introduction

The global renewable energy sector continues its robust expansion, driven by national targets, climate commitments, and accelerated decarbonization goals. Wind, solar, and hydroelectric projects remain central to this transition, with supply chains increasingly adapting to meet the demands of utility-scale deployments, emerging technologies, and integrated infrastructure planning. As countries move toward their 2030 energy milestones, renewable energy is becoming a mainstream pillar of power generation, reshaping upstream and downstream industrial ecosystems.

Outlook (CY 2024–2029)

Global renewable electricity generation is projected to grow by nearly 90% by 2030, reaching over 17,000 TWh, as per the International Energy Agency (IEA).

Annual global capacity additions are expected to stay above 500 GW from 2024 through 2029, following a record high of 560 GW in 2024.

India remains a high-potential market with a 500 GW non-fossil fuel capacity target by 2030, ranking third globally in new wind and solar installations. Continued transmission grid enhancements are enabling consistent project tendering and execution.

Offshore and floating wind projects are accelerating, with hardware spending on foundations alone growing at a

CAGR of over 12%, driven by deeper water sites and increased demand for reliable, long-lifecycle components.

Emerging Trends

1. Commercialization of Floating Wind: As floating wind technology matures, larger turbine designs and higher-capacity installations are emerging. This is influencing infrastructure requirements and supply chain complexity.

2. Hybrid Renewable-Storage Integration: The rise of hybrid plants combining solar, wind, and battery storage is reshaping grid infrastructure. Such configurations demand enhanced reliability, modularity, and serviceability in component design.

3. O&M Optimization: A growing shift toward the "clamp-once" maintenance philosophy is evident. Operators are prioritizing system-level reliability and minimizing tower-top interventions—creating a greater push toward passive locking, anti-vibration, and low-maintenance solutions.

Electrical Power Equipment Introduction

The electrical power equipment sector is undergoing a pivotal transformation as utilities worldwide accelerate efforts to modernize and digitize ageing grid infrastructure. A convergence of factors—including decarbonization targets, distributed energy integration, and rising electrification demand is driving capital investment into transformers, switchgear, and associated grid hardware. This shift signals the onset of a global replacement and expansion super-cycle, underpinned by resilience, automation, and real-time monitoring capabilities.

Outlook (CY 2024–2029)

The global transformer market is projected to grow from USD 57.3 billion in 2023 to USD 82.9 billion by 2029, reflecting a CAGR of 6.4% (Source: Globenewswire).

The broader electrical equipment market is set to surpass USD 2.3 trillion by 2029, expanding at a CAGR of approximately 6%, driven by smart grid rollouts and electrification of infrastructure and mobility systems (Source: The

Business Research Company).

In India, the Revamped Distribution Sector Scheme (RDSS) has earmarked over INR 3 trillion (approx. USD 36 billion) through 2026 to reduce transmission and distribution losses—leading to a surge in switchyard modernization and the deployment of digital substations.

Emerging Trends

1. Smart Grid-Ready Equipment: The adoption of digital and smart transformers with integrated sensor networks is on the rise. These assets support predictive maintenance through online condition monitoring and demand high precision and reliability in mechanical interfaces.

2. Compact Solid-State Switchgear: Innovations in arc-flash-safe switchgear are favouring compact and thermally stable assemblies that optimize space while improving operational safety—especially for medium-voltage urban substations.

3. Climate-Resilient Infrastructure: As climate change impacts grid stability, utilities are specifying hardware capable of withstanding high thermal cycling and wildfire-prone conditions. This is driving increased emphasis on vibration isolation, contact stability, and secure fastening in extreme environments

Commercial Vehicles (Including EVs) Introduction

The global commercial vehicle landscape is undergoing rapid transformation, catalyzed by the twin megatrends of freight decarbonization and the explosive growth of e-commerce logistics. Electrification of trucks, vans, and buses is now central to OEM strategies and policy frameworks across major economies. In parallel, fleet operators are adopting digital fleet management and modular platform architectures to enable serviceability, weight reduction, and emission compliance.

These shifts are redefining component specifications and lifecycle expectations across the value chain.

Outlook (CY 2024–2029)

The global commercial electric vehicle (EV) market is projected to grow from USD 210 billion in 2024 to approximately USD 560 billion by 2029, registering a robust CAGR of 28% (Source: The Business Research Company).

Traditional internal combustion engine (ICE) commercial vehicle output is expected to grow at a steady ~5% CAGR, while the rise of "truck-as-a-service" retrofit platforms is expanding the market for modular parts, driving increased demand for mechanical and structural components.

In India, the forthcoming FAME-III scheme is expected to support the deployment of 70,000 electric buses and 300,000 electric light commercial vehicles (e-LCVs) by 2029—positioning India as a leading market for commercial EV platforms and associated component systems.

Emerging Trends

1. Battery-Swapping Logistics Models: Commercial fleets are increasingly adopting battery-swapping architectures to minimize downtime. This shift necessitates components that can endure high-frequency torque cycles and repeated disassembly, reinforcing demand for high-integrity, maintenance-friendly mechanical connections.

2. Lightweight Composite Chassis: As vehicle OEMs move toward composite and aluminium-intensive chassis for last-mile delivery vehicles and urban buses, there is a growing requirement for fatigue-resistant, load-bearing components that can function under dynamic stress and thermal expansion.

3. Vehicle-to-Grid (V2G) Ecosystems: The emergence of bi-directional charging infrastructure is driving innovation in power electronics. Components integrated into these systems must exhibit high electrical and mechanical reliability while withstanding road-induced vibrations and thermal cycling.

Railways Introduction

The global railway sector is undergoing a historic capital reinvestment cycle, with an emphasis on high-speed passenger corridors, urban metro expansions, and resilient freight infrastructure. As rail operators modernize fleets and upgrade infrastructure, there is a growing focus on efficiency, electrification, and automation. This transformation is prompting increased adoption of standardized, maintenance-reducing, and vibration-resistant components across track systems and rolling stock.

Outlook (CY 2024–2029)

Across G20 economies, cumulative railway capital expenditure is projected to exceed USD 2 trillion by 2029, with over 55% directed toward signalling systems and rolling-stock modernization (Source: railmarketresearch. com).

In India, the FY 2024 25 railway budget allocation reached a record 2.4 lakh crore (approx. USD 29 billion). The country remains on track to achieve by 2027 100% network electrification , leading to a sharp uptick in demand for new catenary systems, anchor bolts, and precision fasteners for OHE (Overhead Equipment).

Urban mobility remains a priority, with metro rail projects being implemented or expanded across more than 25 cities in India, supported by central and state funding mechanisms.

Emerging Trends

1. Urban Metro and Light-Rail Expansion: Rapid urbanization across Asia, Latin America, and Africa is driving metro rail construction. These projects emphasize reduced lifecycle costs, favouring robust and maintenance-free fastening technologies for slab track and elevated systems.

2. Electrified and Hybrid Freight Locomotives : The integration of battery-assisted and hybrid-electric drivetrains in freight applications is growing. These systems require compact and vibration-dampening mechanical interfaces to protect sensitive energy modules and onboard electronics.

3. Predictive and Condition-Based Maintenance: Rail operators are shifting from fixed-interval servicing to real-time monitoring and predictive maintenance. This change is promoting the adoption of components that conform to global

DIN and ISO standards, ensuring long-term reliability and interoperability across fleets andtrack . systems

Off-Highway Equipment

Introduction

The off-highway equipment sector including construction machinery, mining vehicles, and material-handling systems is witnessing a dynamic transition driven by infrastructure investments, equipment electrification, and automation. As OEMs respond to rising expectations for safety, uptime, and energy efficiency, the engineering demands on mechanical sub-systems are intensifying. Equipment platforms are evolving to support greater payloads, ruggedness, and smart connectivity—reshaping component design and lifecycle performance benchmarks.

Outlook (CY 2024–2029)

Global construction equipment deliveries are expected to rebound steadily through 2029, with North America projected to grow at a 6 7% CAGR, supported by public infrastructure programs, commercial construction, and urban development projects.

Electrification of excavators, wheel loaders, and telehandlers is moving beyond pilot stages, with several OEMs initiating limited-series production runs. This trend is accelerating the adoption of lightweight, high-reliability mechanical systems that can complement emerging electric and hybrid powertrains.

Digitalisation, fleet tracking, and preventive maintenance contracts are becoming central to fleet operations especially in mining and port handling—placing new emphasis on uptime, serviceability, and modularity.

Emerging Trends

1. Autonomous and Semi-Autonomous Vehicles: Haul trucks and loaders with autonomous navigation systems require actuator subsystems that can withstand thousands of operating cycles without degradation—particularly in steering and braking systems.

2. Next-Generation Hydraulic Architectures: Hybrid-hydraulic systems are being developed to reduce parasitic losses and improve energy transmission offering thermal and vibrational stability.

3. Connected Fleet Maintenance Models: Telematics-driven maintenance contracts are pushing OEMs to adopt fastening and structural components that meet zero-retorque and no-service targets, aligning with predictive maintenance goals and remote diagnostics.

Agricultural Equipment Introduction

The agricultural equipment sector is evolving rapidly as mechanisation deepens across emerging markets and advanced technologies reshape modern farming. Precision agriculture, government-led subsidy programs, and sustainability imperatives are driving demand for more durable, efficient,and adaptive and sprayers are increasingly engineered for higher productivity, lower environmental impact, and compatibility with digital farm management systems.

Outlook (CY 2024–2029)

The global agricultural machinery market is projected to grow from USD 159.7 billion in 2025 to approximately

USD 207.8 billion by 2030, reflecting a 5.4% CAGR, driven by food security initiatives, labour shortages, and yield optimization technologies.

In India, farm modernisation is being accelerated through schemes like PM-PRANAM, aimed at reducing chemical input use while promoting mechanised precision farming. This is expected to support a mid-to-high single-digit CAGR in demand for durable mechanical assemblies in tractors and secondary implements.

The emergence of electrified compact tractors and autonomous field equipment is opening new avenues for innovation in design, maintenance, and energy efficiency especially in orchard, vineyard, and greenhouse applications.

Emerging Trends

1. Precision-Farming Attachments: As tool carriers evolve to support precision-planting, fertilisation, and spraying, there is growing integration of modular tool-change systems that require robust mechanical interfaces, enabling quick swaps and enhanced field productivity.

2. Biofuel-Compatible Powertrains: With a gradual shift toward biofuel and dual-fuel engines, manufacturers are reengineering core assemblies to meet higher thermal thresholds and chemical compatibility, necessitating more resilient sealing and fastening solutions.

3. Autonomous & Robotic Farming Platforms: Next-generation agricultural robots—used for tasks like weeding, sowing, and spraying—demand compact mechanical sub-systems capable of withstanding vibration, moisture, and continuous field exposure without failure.

Heavy Machinery Introduction

The heavy machinery sector continues to serve as a cornerstone of infrastructure development, industrial production, and resource extraction. As economies push forward with urbanisation, transportation megaprojects, and industrial automation, the demand for high-capacity, durable, and technologically advanced machinery is accelerating. Equipment such as cranes, tunnel boring machines (TBMs), port handling systems, and heavy-duty presses are becoming more complex—necessitating components that can endure extreme loads, high-frequency operations, and harsh environmental conditions.

Outlook (CY 2024–2029)

The global heavy construction equipment market is forecast to reach over USD 315 billion by 2029, growing at a CAGR of ~5.7%, driven by ongoing infrastructure spending, renewable energy installations, and industrial capital expansion (Source: Fortune Business Insights, MarketWatch).

Growth is particularly strong in Asia-Pacific and the Middle East, where government-backed infrastructure pipelines include smart cities, ports, and transit systems. Simultaneously, developed markets like North America and the EU are modernising legacy industrial facilities—creating sustained demand for reliable heavy equipment.

Emerging applications in underground metro systems, high-speed rail corridors, and offshore energy platforms are pushing the performance boundaries of structural and hydraulic sub-systems.

Emerging Trends

1. Smart & Sensor-Enabled Machinery: Predictive maintenance and real-time diagnostics are becoming standard in heavy-duty machinery. Components must not only perform under high stress but also interface seamlessly with condition-monitoring systems.

2. Electrification & Hybrid Powertrains: Driven by sustainability targets, OEMs are beginning to introduce battery-electric and hybrid-drive systems in cranes, loaders, and compact heavy machines requiring lighter, energy-efficient mechanical systems without compromising durability.

3. High-Cycle Urban Applications: Machines used in tunneling, high-rise construction, and metro projects are exposed to intense operational cycles and confined environments. This demands compact, fatigue-resistant assemblies that can sustain performance in vibration-rich and dusty operating conditions.

Industry Trends and Market Outlook (CY2024–CY2029) Overview

The global industrial landscape is entering a period of recalibration and reinvention. Post-pandemic recovery, geopolitical realignments, and climate commitments are reshaping global supply chains, capital investments, and technology adoption patterns. For precision engineering and component manufacturing, these shifts translate into higher performance expectations, tighter compliance mandates, and accelerating demand across critical sectors—including renewables, mobility, railways, heavy machinery, and industrial infrastructure.

Key Global Trends

1. Reindustrialisation and Supply Chain Localisation

Countries are bolstering domestic manufacturing capabilities to mitigate geopolitical risk and reduce dependency on globalized supply chains. This is fuelling capital investment in machine tools, infrastructure, and component localization—particularly in G20 nations and strategic sectors like energy, transportation, and defence.

2. Electrification and Low-Carbon Technologies

The shift toward electric vehicles, renewable power systems, and smart grids is reshaping component design.

Mechanical systems are being re-engineered to be lighter, more compact, and energy-efficient while meeting rigorous standards for performance, safety, and recyclability.

3. Smart Manufacturing and Predictive Maintenance

The rise of Industry 4.0 has driven the adoption of sensors, data analytics, and digital twins across equipment platforms. Components are expected to deliver not only mechanical performance but also seamless integration with condition-monitoring and predictive-maintenance systems.

4. Lifecycle Cost Optimization and Serviceability

OEMs and operators are increasingly prioritizing lifecycle cost reduction over capital cost. Components that offer maintenance-free service intervals, reliability under extreme conditions, and high interchangeability are seeing greater specification preference.

India Market Snapshot

India remains a critical growth engine, with focused national programs such as Make in India, PM Gati Shakti, FAME-III, and National Green Hydrogen Mission unlocking domestic demand across energy, mobility, infrastructure, and industrial ecosystems. Key manufacturing clusters across Maharashtra, Tamil Nadu, Gujarat, and Karnataka are witnessing elevated capex in components, tooling, and automation—favouring Tier-1 and Tier-2 precision suppliers.

Emerging Demand Trends in Precision Components, Tooling and Automation (CY2024–CY2029)

The demand landscape for high-performance mechanical components, tooling and automation is undergoing a structural transformation across renewable energy, industrial and mobility sectors. These shifts are creating significant tailwinds for Tier-1 and Tier-2 precision suppliers who possess the capabilities to deliver complex, certified, and lifecycle-tested engineering solutions. As OEMs increasingly concentrate their procurement on quality-accredited vendors with advanced testing, digital traceability and sustainability credentials, precision engineering companies stand at the forefront of a multiyear growth cycle.

Renewable Energy Sector

Global and domestic investments in renewable energy are accelerating to meet decarbonization targets. Indias installed renewable energy base, including large hydro, is expected to rise from approximately 201 GW in September 2024 to over

250 GW by March 2026, reflecting a compound annual growth rate (CAGR) of 13 14% (Source: MNRE, CEEW). The Government of India is targeting an investment of 6.4 lakh crore over the next five years to achieve its 500 GW non-fossil capacity goal by 2030 (Source: MNRE, Budget 2024–25). This growth is creating increased demand for turbine nacelles, tower flanges components that rely heavily on corrosion-resistant fasteners, long-lifecycle springs and structural assemblies.

Additionally, with 50 GW of energy storage capacity required by 2030 (Source: CEA, NITI Aayog), the integration of battery and pumped hydro solutions in hybrid renewable projects is gaining momentum. These applications necessitate vibration-resistant and fatigue-proof mechanical systems. As maintenance-free operational models become the industry standard, precision components such as wedge-lock washers and disc springs—especially those compliant with IEC 61400—are gaining prominence in turbine and substation assemblies. These trends are expected to drive a CAGR of 12–14% in precision mechanical component revenue through CY2029.

Industrial and Automation Capital Goods

The capital goods sector is witnessing continued momentum driven by smart factory deployments, energy transition-led CAPEX and productivity-linked incentive (PLI) schemes. Capital goods revenues are projected to grow at 13–15% year-on-year in FY25 and FY26, supported by a robust order book of 1.41 trillion as of Q1 FY25 (Source: CRISIL, company filings BHEL, Siemens, ABB). Precision components for power equipment, switchgear, material-handling systems and industrial automation must now endure thermal cycling, mechanical shock and high-dust environments, prompting OEMs to prioritize climate-resilient, digitally compatible components.

A notable portion of industrial demand is also driven by deferred mining and construction equipment CAPEX, expected to rebound with an 8 10% revenue uptick in FY26 (Source: ICEMA, ICRA). Tooling and mechatronics suppliers are witnessing increased specification of predictive-maintenance-ready hardware, with precision-engineered parts compatible with sensor-based diagnostics. Overall, this segment is poised to grow at a CAGR of 10–12% through CY2029.

Mobility and E-Mobility Components

The shift toward electrified and autonomous mobility is reshaping vehicle architecture and driving high-value component demand. Indias auto component industry is forecasted to grow 8 10% CAGR over the next five years, underpinned by increased localization and cumulative capex plans of 25,000 30,000 crore in FY26 alone (Source: ACMA, CRISIL Auto

Outlook). As EV penetration increases—25% of two-wheelers and 15% of passenger vehicles by 2030 (Source: NITI Aayog, Vahan Analytics)—demand for fatigue-resistant fasteners, modular chassis assemblies and vibration-dampening springs is rising across fleets, public transport and last-mile logistics platforms.

Battery enclosures, V2G-compatible power systems and compact, lightweight chassis are now standard in EV platforms, prompting Tier-2 vendors to scale CNC tooling, robotic welding and coated product offerings. Maintenance-free and modular spring assemblies are increasingly specified in fleet RFQs, presenting consistent revenue precision component manufacturers.

Growth Projections for Precision Suppliers (CY2024 CY2029)

Renewable Energy Components: 12–14% CAGR

Industrial Capital Goods & Automation: 10–12% CAGR

Mobility & EV-linked Components: 8–10% CAGR

Note: All CAGR estimates are triangulated from CRISIL, ICRA, ACMA, MNRE, NITI Aayog, CEA, and ICEMA reports dated Q1 FY2025.

Risk–Opportunity Analysis (CY2024–CY2029)

As Gala Precision Engineering Ltd. navigates a dynamic global environment, the interplay between macroeconomic volatility, technological transformation, and sustainability mandates presents both strategic risks and growth opportunities. The following analysis outlines key enterprise-level risks and corresponding opportunities relevant to our business segments, with a forward-looking lens through CY2029.

1. Supply Chain Volatility

Risk: Prolonged geopolitical tensions, trade restrictions, and raw material price fluctuations could disrupt sourcing of specialty steels and input materials, impacting lead times and margins. Opportunity: Strengthening supplier diversification and backward integration including long-term

Tier-1 mills across India, Europe, and Korea—can enhance delivery reliability and cost competitiveness. Investing in nearshoring and regional warehousing also builds resilience.

2. Regulatory & Compliance Risk

Risk : Increasing global focus on carbon emissions (e.g., CBAM in the EU), ESG disclosures, and DIN/ISO conformity may expose non-compliant supply chains to access barriers and reputationalrisk. Opportunity: Galas proactive approach to sustainability—including CBAM readiness, RE100-aligned sourcing, and DIN-compliant manufacturing—positions us as a preferred supplier to global OEMs with high ESG thresholds.

3. Talent & Skills Gap

Risk As precision engineering becomes increasingly digitized and globalized, attracting and retaining skilled technical and managerial talent may become a bottleneck for innovation and scale. Opportunity :Strategic workforce development through partnerships with technical institutes, internal talent incubation, and cross-functional leadership grooming ensures long-term capability building. Our Women in Fasteners initiative and ESG/CSR alignment also enhance employer branding.

4. Product Quality & Warranty Risk

Risk: Failure to meet application-critical quality parameters—especially in railway braking systems, EV battery enclosures, and offshore wind towers could lead to warranty claims or delisting.

Opportunity: Galas multi-stage quality assurance protocols, client-audited validation cycles, and investments in automated inspection lines reinforce our reputation for zero-defect manufacturing and long lifecycle performance.

5. Capex Allocation and ROI Risk

Risk Inefficient allocation of expansion capital (e.g., underutilized capacity or delayed customer onboarding) could dilute ROI and affect financial sustainability. Opportunity: Capex planning is closely tied to demand forecasts, customer commitments, and segment-specific tailwinds. Our Chennai greenfield facility and Wada capacity enhancement are structured to serve demand in fasteners, disc springs, and Gallock washers.

Company Overview:

Gala Precision Engineering Ltd. stands as a beacon in the realm of precision component manufacturing, boasting over three decades of expertise in delivering high-quality Disc & Strip Springs (DSS), Coil & Spiral Springs (CSS) and Special Fastening Solutions (SFS). Serving a diverse clientele of over 175 customers across more than 25 countries, the company has cemented its position as a trusted partner to OEMs, Tier-1 suppliers and channel partners in sectors such as Renewable Energy, Industrial and Mobility

In alignment with its vision to enhance production capabilities and serve the southern markets more effectively, Gala is establishing a new manufacturing facility in Vallam-Vadagal, SIPCOT Industrial Park, Sriperumbudur, near Chennai, Tamil Nadu. This state-of-the-art plant is designed to produce high-tensile fasteners, including studs, hex bolts and nuts

Financial Performance:

The Financial performance of the Company for the year under review as compared to the previous financial year are summarized below for your consideration:

(Amount in Millions)

	Standalone		Consolidated
Particulars	2024-25	2023-24	2024-25	2023-24
Revenue from operations (Net)	2,378.35	1,999.11	2,378.35	2,025.46
Other income	43.70	22.90	43.70	18.32
Total revenue	2,422.05	2,022.01	2,422.05	2,043.78
Total expenses	2,089.91	1,733.98	2,088.23	1,767.90
Profit before exceptional items and tax	332.14	288.03	333.82	275.88
Add: Exceptional items	-	-37.78	-2.56	-23.09
Profit before tax	332.14	250.25	331.26	252.79
Les: Tax expenses
(a) Current tax	62.00	54.09	62.00	54.09
(b) Deferred tax charge	-3.65	-28.42	-3.65	-28.42
(c) Current tax adjustments of earlier years	4.75	7.19	4.75	7.19
Total tax expense	63.10	32.86	63.10	32.86
Non-controlling interest	-	-	-0.26	-3.40
Profit after taxes	269.04	217.40	268.42	223.33

Key Financial Ratios:

Particular	March 31st 2025	March 31st 2024
Current Ratio	3.95	1.69
Debt Equity Ratio	0.09	0.53
Debt Service Coverage Ratio	2.58	3.79
Return on Equity %	15.02%	26.20%
Inventory Turnover Ratio	3.66	3.12
Trade Receivable Turnover Ratio	4.04	5.27
Trade Payable Turnover Ratio	7.01	7.74
Net Capital turnover ratio	1.49	4.34
Net Profit %	11.29%	11.03%
Return on Capital employed %	14.48%	24.60%

Human Resources:

The Company acknowledges its employees as its most valuable asset and undertakes several initiatives to promote their overall well-being. GPELs human resource strategy focuses on fostering a holistic work environment by investing in comprehensive training programs, facilitating professional growth and ensuring a culture of safety and inclusiveness. GPELs ability to deliver customized engineering solutions and manage operational complexity is deeply linked to its talent pool. The Company remains focused on attracting and retaining skilled professionals across domains such as engineering, manufacturing, marketing, finance and operations. GPEL recognizes that the competitive landscape for such talent is intense and retention costs may impact profitability.

The Company remains committed to maintaining a safe and compliant workplace. No industrial disputes were reported during the year, and robust safety protocols were continually enforced. GPELs HR practices aim to balance business growth with employee development, ensuring an agile, skilled and motivated workforce to meet future challenges.

Cautionary Statement

Cautionary Statement Some of the statements in this management discussion and analysis describing the Companys objectives, projections, estimates and expectations may be ‘forwardlooking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Key factors that can affect the Companys operations include changes in political and economic environment in India and abroad, tax laws, import duties, litigation, and labour relations

Sources:

1. International Monetary Fund – World Economic Outlook projections

2. Reserve Bank of India & MOSPI Indian GDP, inflation and IIP trends

3. World Bank & IMF – Global trade and investment outlook

4. Press Information Bureau – IMF forecasts for India and global economy

5. Verified Market Research Global spring market report

6. Industry Reports (Data String, GrandView) – Global disc springs and fasteners market analysis

7. Rupeezy Industry Overview – Market size and CAGR for DSS, WLW, CSS in India and globally

8. International Energy Agency – Renewables 2024 report (global capacity and milestones)

9. Association of Equipment Manufacturers / Industry News – Construction equipment and railway capex trends