Galaxy Bearings Ltd Management Discussions

The following section outlines the Companys performance and provides an overview of its future business prospects. This outlook is based on an evaluation of the current economic environment and prevailing government policies. It is important to note that changes in future economic conditions or other external factors may impact this outlook.

The Managements perspective on the Companys performance and future direction is detailed below:

ECONOMIC OVERVIEW

GLOBAL ECONOMY:

During FY 2024-25, the global economy experienced a phase of moderated growth, marked by persistent geopolitical tensions, supply chain realignments, and inflationary pressures in key markets. Despite these challenges, industrial production and capital investment rebounded across major economies, supported by easing freight costs, technological advancement, and gradual normalization of raw material supply chains.

The global bearings market, valued at approximately USD 130 billion, continued its steady expansion, driven by strong demand from automotive, industrial machinery, aerospace, railways, and renewable energy sectors. The shift towards electrification of vehicles, automation in manufacturing, and energy- efficient industrial solutions further accelerated the adoption of advanced bearing technologies.

Asia-Pacific remained the largest and fastest-growing region, accounting for over 50% of global demand, with India, China, and Southeast Asia emerging as key manufacturing and export hubs. Developed markets in Europe and North America witnessed stable replacement demand, driven by modernization and maintenance of industrial assets.

Additionally, global OEMs have increasingly diversified their supply chains toward cost-competitive and quality-certified manufacturers in India, providing significant opportunities for Indian bearing producers. While fluctuations in steel prices, freight costs, and foreign exchange rates posed short-term challenges, the long-term growth outlook for the global bearings market remains positive, supported by technological innovation, sustainability initiatives, and resilient demand across core industrial segments.

INDIAN ECONOMY AND INDUSTRY OUTLOOK-BEARING SECTOR (F.Y.2024-25):

The Indian economy continued its strong growth trajectory in FY 2024-25, maintaining its position as one of the worlds fastest-growing major economies. Despite global challenges such as persistent inflationary pressures, geopolitical uncertainties, and volatility in commodity prices, India displayed remarkable macroeconomic stability. The growth momentum was underpinned by resilient domestic demand, robust government capital expenditure, and sustained policy reforms aimed at boosting industrial and manufacturing competitiveness.

Initiatives under "Make in India", "Atmanirbhar Bharat", and the Production Linked Incentive (PLI) schemes have accelerated manufacturing expansion and localization across key industrial sectors. Substantial government investments in infrastructure, railways, roads, renewable energy, and electric mobility continued to drive industrial output and created substantial demand for engineering components, including bearings. The steady progress in logistics efficiency, adoption of green technologies, and push for digital manufacturing have further strengthened Indias industrial backbone.

The Indian bearing industry forms a crucial component of the countrys engineering and automotive ecosystem, supplying to diverse sectors such as automobiles, railways, industrial machinery, steel, cement, power, agriculture, and renewable energy. The demand for bearings during FY 2024-25 witnessed steady growth supported by strong activity in the automotive sector?particularly in the passenger and commercial vehicle segments?and increasing investments in infrastructure and heavy engineering. The rapid shift toward electric vehicles (EVs), coupled with an emphasis on energy efficiency and low-friction solutions, is reshaping product innovation and material technology in the sector.

Domestic bearing manufacturers are increasingly focusing on value-added, precision-engineered products with enhanced performance, longer service life, and reduced maintenance requirements. This trend, combined with the growing preference for local sourcing and import substitution, has strengthened Indias self-reliance in high-quality bearing production. Furthermore, the global realignment of supply chains has created new export opportunities for Indian bearing manufacturers.

Galaxy Bearings Limited, with its strong legacy, advanced manufacturing infrastructure, and focus on quality excellence, is strategically positioned to benefit from these favorable industry dynamics. The Company continues to cater to diverse sectors through its wide product portfolio, including deep groove ball bearings, taper roller bearings, and other customized bearing solutions. Galaxys continuous emphasis on innovation, operational efficiency, and sustainable practices has enabled it to enhance its domestic presence while also expanding its footprint in international markets.

With increasing demand from the automotive, industrial, and renewable energy sectors, the outlook for the Indian bearing industry remains positive. The sector is expected to experience sustained growth driven by continued public infrastructure spending, increasing exports, technology integration, and evolving consumer preferences toward energy-efficient solutions. Galaxy Bearings Limited remains confident of leveraging these opportunities through its strong manufacturing capabilities, customer centric approach, and commitment to delivering precision and performance in every product.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Global Bearing Industry and Development:

During the financial year 2024-25, the global bearing industry demonstrated steady expansion, supported by improving industrial activity, rising infrastructure investments, and growing demand from key end-use sectors such as automotive, railways, aerospace, renewable energy, and heavy engineering. The ongoing global emphasis on energy efficiency, precision engineering, and sustainability continued to reshape product development and supply chains. Manufacturers worldwide focused on integrating smart technologies, such as sensor-based condition monitoring, predictive maintenance, and digital bearing management systems, in line with Industry 4.0 advancements.

Despite macroeconomic pressures, including volatile commodity prices, geopolitical challenges, and logistics constraints, the bearing industry remained resilient owing to diversification strategies and increased automation. The sector also saw greater adoption of eco-friendly materials, remanufacturing practices, and localized production models to reduce carbon footprints and ensure supply chain stability.

India continued to play a growing role in the global bearing value chain, emerging as a competitive manufacturing hub due to its strong engineering base, cost advantages, and expanding domestic market. Indian bearing manufacturers increasingly catered to global Original Equipment Manufacturers (OEMs) and replacement markets, supported by policy initiatives such as “Make in India” and the Production Linked Incentive (PLI) scheme for the automotive and engineering sectors. The export demand for Indian bearings, particularly from Europe and Asia-Pacific, strengthened during the year, reinforcing Indias position as an important sourcing and technology partner in the global bearing ecosystem.

Overall, the global bearing market is projected to grow at a CAGR of approximately 6-7% over the next few years, driven by technological innovation, industrial modernization, and sustained infrastructure development worldwide, with India positioned to benefit significantly from this global momentum.

Indian Bearing Industry and Development:

Indias bearings industry has witnessed steady growth over the past decade, driven by rapid industrialization, increasing infrastructure projects, and the expanding automotive sector. The market is estimated to grow at a CAGR of 6-8% over the next few years, supported by rising demand in construction, steel, cement, and mining industries. Government initiatives like Make in India and the Atmanirbhar Bharat (Self-Reliant India) campaign have also spurred domestic production, reducing dependency on imports and encouraging global companies to set up manufacturing units in the country.

The Indian bearings industry is characterized by a mix of global giants and homegrown manufacturers. Companies like SKF, Timken, Schaeffler, and NSK have a strong presence in India, alongside Indian players such as National Engineering Industries (NBC Bearings), Tata Bearings, and NRB Bearings. The industry is seeing increased investments in technology and R&D, with a focus on enhancing efficiency, reliability, and sustainability.

During F.Y. 2024-25, the Indian bearing industry registered steady growth, reflecting the resilience of the manufacturing and infrastructure sectors. The domestic bearing market is estimated to have reached around ^14,000-15,000 crore, growing at an annual rate of 7-9%, driven by strong demand from automotive, railway, and industrial segments. Growth in the automobile sector, particularly in electric and hybrid vehicles, along with revival in commercial vehicle production and expanding rail infrastructure, contributed significantly to bearing consumption.

The India industrial bearings market size reached USD 7.80 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 11.41 Billion by 2033, exhibiting a growth rate (CAGR) of 4.33% during 2025-2033.

India Industrial Bearings Market Trends:

The market is experiencing robust growth driven by the increasing demand for energy-efficient and high-performance bearings across key industrial sectors. The automotive industry, which accounts for approximately 50% of total bearing demand, continues to be a major growth driver with the production of passenger vehicles, two-wheelers, and commercial vehicles showing strong momentum. The shift towards electric vehicles (EVs) has further accelerated demand for specialized bearings that can operate under harsh environmental conditions and high-load applications.

Manufacturing digitization and Industry 4.0 adoption are reshaping market dynamics, with artificial intelligence and machine learning expected to reach 40% of total manufacturing spending by 2025. The industrial automation market is projected to grow at 14.26% annually, reaching USD 29.43 billion by 2029, creating substantial opportunities for precision-engineered bearings integrated with IoT-enabled machinery and automated systems.

Market Scope and Growth Factors:

The India industrial bearings market benefits from strong government support through manufacturing- friendly policies and infrastructure development initiatives. The consolidation trend in the industry, with top 5 players commanding approximately 60% of market revenue, indicates a mature market with established players focusing on innovation and technological advancement.

Key growth factors include expanding manufacturing activity across diverse sectors, ongoing infrastructure modernization projects, and the rising adoption of locally-manufactured, energy-efficient machinery. The material handling sector contributes around 30% of total demand, while emerging applications in aerospace and renewable energy sectors are creating new market opportunities.

The market is witnessing increased investments in R&D for developing hybrid bearings, self-lubricating solutions, and energy-efficient bearing technologies. These innovations are particularly crucial for meeting the stringent performance requirements of modern industrial applications and supporting Indias sustainability goals.

GOVERNMENT INITIATIVES

The bearing industry forms an integral part of Indias industrial value chain, serving as a critical enabler across automotive, railways, industrial machinery, power generation, and infrastructure sectors. Bearings play a vital role in improving operational efficiency, reducing energy loss, and enhancing the performance of mechanical systems. Over the years, India has progressed from being primarily an import-dependent market to an emerging global manufacturing hub for standard and specialized bearings. This transformation has been driven by advancements in production technology, increased localization, and growing participation of both domestic and international players. Recognizing the strategic importance of the bearing sector within the broader manufacturing ecosystem, the Government of India has implemented several policy initiatives to foster competitiveness, promote selfreliance, and strengthen the countrys position in global supply chains.

The Indian bearing industry continues to gain momentum from multiple policy measures and developmental programs introduced by the Government of India. Which Includes the Following:

CORE INDUSTRIAL INITIATIVES

Make in India: This flagship initiative aims to transform India into a global manufacturing hub by encouraging both domestic and foreign investment. It has led to enhanced production capabilities and greater local availability of raw materials for the bearing industry.

Atmanirbhar Bharat Abhiyan (Self-Reliant India): This push for self-reliance promotes the local production of components, including bearings, to reduce dependency on imports.

Production-Linked Incentive (PLI) Scheme: While there isnt a specific PLI scheme solely for bearings, the schemes for 14 key sectors, including automobiles, auto components, and electronics, indirectly boost the demand for locally manufactured bearings.

National Infrastructure Pipeline (NIP) & Gati Shakti Mission: Large-scale infrastructure projects in railways, construction, ports, and logistics have spurred demand for industrial bearings and heavy- duty applications. The focus on modernizing railways and metro systems directly boosts demand for high-precision bearings.

Automotive Mission Plan (AMP) 2026: A long-term roadmap to develop India as a global automotive hub. As automotive bearings constitute a major share of demand, this policy supports innovation, quality enhancement, and localization in the bearing segment.

Foreign Trade Policy (2023): Encourages exports by simplifying processes and providing benefits under schemes like Remission of Duties and Taxes on Exported Products (RoDTEP) and Export Promotion Capital Goods (EPCG).Supports bearing exporters through easier access to global markets and technology.

Technology Upgradation Fund & MSME Support: Several schemes under MSME Ministry and Department for Promotion of Industry and Internal Trade (DPIIT) provide financial aid for modernization, R&D, and automation in small and medium bearing manufacturing units.

Focus on Green Manufacturing and Energy Efficiency: The Governments emphasis on sustainable and energy-efficient technologies encourages the development of eco-friendly, low-friction, and recyclable bearings. Aligns with Indias Net Zero and sustainability commitments.

Ease of Doing Business: The government has simplified regulatory processes, rationalized legal provisions, and digitized government processes to create a more investment-friendly environment for the manufacturing sector, which benefits bearing manufacturers.

PM Gati Shakti National Master Plan: This initiative for integrated planning of multimodal infrastructure aims to reduce logistics costs, which supports the entire manufacturing ecosystem, including the transport of raw materials and finished bearings.

Quality Control and Standardization

Mandatory BIS Standards: The Ministry of Commerce and Industry has issued Quality Control Orders for bearings and their components, making compliance with specific Indian Standards (IS) mandatory for domestic sales. This aims to ensure high quality, improve safety, and protect against substandard imports. Exemptions are provided for R&D and export purposes.

Infrastructure and Sector-Specific Demand Drivers

Infrastructure Development: Government investments in robust transportation networks (highways, railways, ports), as well as sectors like construction, mining, and renewable energy, are significant drivers of demand for high-performance bearings.

National Capital Goods Policy: This policy aims to boost the capital goods sector by promoting technology acquisition, skill development, and the modernization of manufacturing units, which directly impacts the machinery and equipment used to produce bearings.

Support for MSMEs: Various schemes provide financial assistance, credit guarantees, and support for technology upgradation and cluster development to Micro, Small, and Medium Enterprises, many of which operate within the bearing supply chain.

OUR BUSINESS STRATEGY AND OUTLOOK

Galaxy Bearings Limited continues to pursue a growth-oriented strategy focused on innovation, quality enhancement, and market diversification. The Company aims to strengthen its domestic leadership position while expanding its global footprint through increased exports and partnerships with international OEMs and industrial clients. In alignment with national initiatives such as "Make in India" and "Atmanirbhar Bharat," the Company is emphasizing import substitution, product localization, and value engineering to enhance competitiveness and cost efficiency.

The strategic focus remains on technology upgradation, automation, and capacity expansion to meet the growing demand from automotive, railway, and industrial sectors. The Company is also investing in research and development (R&D) to develop next-generation bearings with improved durability, energy efficiency, and application-specific performance. Efforts are being directed toward enhancing the sustainability quotient through resource optimization, waste reduction, and adoption of environmentally responsible manufacturing practices.

Looking ahead, the Company expects steady demand growth supported by infrastructure development, the transition toward electric mobility, and rising industrial automation. Galaxy Bearings Limited intends to leverage these opportunities through operational excellence, product innovation, and customer-centric solutions. The management remains confident that its strategic initiatives, combined with prudent financial management and strong execution capabilities, will enable the Company to achieve sustainable and profitable growth in the coming years.

OPPORTUNITIES AND THREATS

The bearing industry operates within a dynamic business environment influenced by technological evolution, global market trends, and sectoral performance in automotive, railways, and industrial applications. During F.Y. 2024-25, the industry witnessed steady growth supported by strong domestic demand and infrastructure development. However, the operating landscape continues to present both promising opportunities and emerging challenges. Galaxy Bearings Limited remains committed to leveraging favourable policy support, technological innovation, and process excellence to strengthen its competitive edge while prudently addressing external risks.

The Bearing industry is expected to grow in the coming years, driven by the increasing demand for brass in a variety of applications. Some of the key opportunities for the brass industry, which are advantageous to the company, are as follows:

OPPORTUNITIES

Electric Vehicles (EVs) and E-Mobility: The shift towards EVs is a major opportunity, as these vehicles require specialized, high-performance bearings that can operate under higher speeds and loads with reduced friction to maximize energy efficiency and driving range.

Industrial Automation and Robotics: The expansion of smart factories, automation systems, and robotics across various sectors (manufacturing, mining, construction) increases the demand for high- precision, reliable, and often sensor-integrated bearings for smooth and accurate movements.

Renewable Energy Sector: The growth in wind turbines, solar panels, and other green energy initiatives creates a strong demand for large, durable, and reliable bearings capable of withstanding harsh environmental conditions.

Smart Bearings and Predictive Maintenance: The development and integration of sensors into bearings for real-time condition monitoring enable predictive maintenance, reduce downtime, and improve operational efficiency, creating a high-value market segment.

Infrastructure Development: Large-scale government-backed infrastructure projects (railways, highways, construction) in emerging economies drive substantial demand for heavy machinery and equipment that rely on robust bearing systems.

Advanced Materials and Customization: Opportunities exist in developing specialized bearings using advanced materials like ceramics, hybrids, and lightweight alloys that offer superior performance in extreme environments, corrosion resistance, and longer service life.

THREATS

Raw Material Price Volatility: The bearing industry relies heavily on raw materials, primarily high- grade steel. Fluctuations in the cost of these materials directly impact production costs and profit margins.

Intense Competition and Counterfeit Products: The market is highly competitive with many global and domestic players. The proliferation of low-quality, counterfeit, or used bearings poses a significant threat, undermining the reputation of genuine manufacturers and leading to potential equipment failure.

Supply Chain Disruptions: Global supply chains are vulnerable to geopolitical tensions, trade barriers, and logistics disruptions, which can lead to material shortages, production delays, and increased costs.

Technological Adoption Gap: While digitalization offers opportunities, not all manufacturers can keep pace with the rapid technological advancements (e.g., Industry 4.0, IoT integration), risking a loss of market share to more innovative competitors.

Economic Cycles: Demand for bearings is often tied to overall economic conditions and industrial output. Economic slowdowns or downturns in key sectors like the automotive industry can lead to significant demand fluctuations and revenue instability.

Environmental Regulations: Increasingly stringent environmental regulations regarding material usage and manufacturing processes can increase production costs, particularly for smaller companies that struggle to invest in sustainable practices.

The company has implemented several strategies to manage and mitigate the risks it encounters, such as broadening its customer base, transferring price fluctuations to clients, and investing significantly in research and development. These efforts have strengthened the companys ability to minimize risk exposure and enhance overall resilience.

By serving a diverse range of industries, the company reduces its vulnerability to sudden demand drops from any single customer or sector. Additionally, the practice of passing price changes onto customers helps safeguard profit margins. Continuous investment in research and development enables the company to innovate new products and technologies, maintaining a competitive edge in the market.

Looking ahead, the company remains dedicated to adopting new initiatives aimed at addressing risks and challenges while ensuring sustained success. These future efforts will focus on further expanding the customer base, advancing product and technology development, and boosting operational efficiency.

RISK AND CONCERNS

The bearing industry faces a variety of risks and concerns, broadly categorized into supply chain and economic challenges, operational and technical issues, and environmental/market pressures.

SUPPLY CHAIN AND ECONOMIC CHALLENGES

Raw Material Volatility: Bearings rely heavily on raw materials like steel and specialty alloys, whose prices fluctuate due to global supply and demand dynamics, geopolitical tensions, and trade restrictions.

Supply Chain Disruptions: Global events, natural disasters, and transportation bottlenecks can interrupt the supply of critical components, leading to manufacturing and delivery delays.

Cost Pressures: Manufacturers face ongoing challenges from rising energy, labor, and transportation costs, impacting profitability and requiring constant innovation to maintain cost efficiency.

Demand Volatility: Demand for bearings can vary significantly based on economic conditions and specific industry factors (e.g., automotive, wind energy), making accurate demand forecasting difficult and risking excess inventory or stockouts.

Intense Competition: The market is highly competitive, with both domestic and global players. Imports of high-precision bearings from major exporting countries put additional pressure on local manufacturers to focus on technological differentiation and cost-effectiveness.

OPERATIONAL AND TECHNICAL CONCERNS

Manufacturing Complexity: Producing high-precision bearings involves intricate processes that are susceptible to minor deviations and errors, which can result in costly defects and quality consistency challenges.

Counterfeit Products: The proliferation of low-quality counterfeit bearings poses a significant global challenge, leading to safety issues, performance failures, and damage to the reputation of established brands.

Bearing Failure Causes: A majority of bearing failures are linked to preventable operational issues such as improper lubrication (approx. 80% of breakdowns), contamination, incorrect mounting procedures, misalignment, and overloading.

Technological Gaps: To meet international standards, some manufacturers face technology gaps, particularly in developing indigenous machine tools for testing and ensuring consistently high quality and cleanliness of raw materials.

ENVIRONMENTAL AND MARKET PRESSURES

Sustainability Demands: Increasing environmental regulations and customer demand for sustainable practices are pushing manufacturers to adopt eco-friendly processes, use recyclable materials, and explore alternative lubricants.

Cybersecurity Risks: As the industry adopts more automation and data analytics (smart bearings), cyber threats to supply chain networks become a significant concern.

Labor Shortages: The industry, like many others, is affected by labor shortages, requiring strategies such as upskilling existing staff and integrating more automation.

Technological Advancements: While an opportunity, the rapid adoption of new technologies like smart bearings and additive manufacturing requires significant investment in implementation and employee training, posing financial and organizational challenges.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The company maintains a comprehensive internal financial control system tailored to its size and operations. This system ensures timely and accurate financial reporting, safeguards company assets, and ensures compliance with relevant laws and regulations. Regular reviews by internal auditors assess the effectiveness of these controls, with any recommended improvements promptly implemented. Additionally, the companys audit committee thoroughly reviews the internal audit reports to oversee and strengthen the control framework.

FINANCIAL PERFORMANCE AND REVIEW OF OPERATIONS

Particulars	March 31, 2025	March 31, 2024
Total Revenue	10674.65	13394.33
Total Expense	8505.07	10621.25
Profit / (Loss) before Interest and Depreciation	2169.58	2773.08
Less: Finance Cost	125.44	50.24
Profit/(Loss) Before Depreciation	2044.14	2722.84
Less: Depreciation and Amortization Expense	191.64	180.44
Profit /(Loss) Before Tax	1852.50	2542.40
Provision for taxation
Less: Current Tax	453.00	511.00
Less: Short / (Excess) Provision of Income Tax of earlier years	(3.81)	(0.60)
Less: Deferred Tax Liability / (Assets)	32.16	147.58
Net Profit / (Loss) After Tax	1371.15	1884.42
Add/(Less): Other Comprehensive income	(16.93)	(7.77)
Total Comprehensive Income for the period	1354.22	1876.64

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The company made key advancements in human resource development through focused training programs and skill enhancement initiatives. HR policies were refined to improve employee engagement and operational efficiency. Industrial relations remained stable and harmonious throughout the year, with no disruptions. The company continues to foster a positive work environment built on communication, safety, and performance.

As of March 31, 2025, the company had a total of 111 employees on its rolls, including factory workers. The company will continue to create opportunities and ensure that it recruits diverse candidates without compromising on merit.

CAUTIONARY STATEMENT

This report contains certain statements regarding the Companys objectives, projections, estimates, and expectations that may be considered “forward-looking statements” under applicable laws and regulations. These statements are based on assumptions and expectations of future events, which are subject to inherent risks and uncertainties. The Company does not guarantee the accuracy or realization of these assumptions and expectations. Actual results may differ materially from those expressed or implied due to various internal and external factors beyond the control of management. Accordingly, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of future developments, new information, or subsequent events.

For and on behalf of the Board of Directors Galaxy Bearings Limited	SD/-	SD/-
	Bharatkumar Ghodasara	Kartik Kumar Patel
Date: 27th October, 2025	Whole-time Director	Chairman & Independent Director
Place: Ahmedabad	DIN:00032054	DIN: 10118898