GOCL Corporation Ltd Management Discussions

Economic Overview

Indian Economy

The economy of India achieved a GDP growth rate of 6.5% in FY 2025.Despite facing challenges from global economic disruptions and ongoing geopolitical tensions in Europe and the Middle East. This performance was supported by targeted government initiatives. An allocation of ?11.21 lakh crore in the Union Budget focused on infrastructure and rural connectivity.¹ A strategic capital infusion helped limit the fiscal deficit to 4.4% of Gross Domestic Product (GDP), creating space to boost demand and economic activity.²

The manufacturing sector continued to play an important role in Indias growth trajectory. The sectors share in the overall economy expanded marginally from 17.2% to 17.3%. Manufacturing exports reached a record USD 824.9 billion in FY 2024-25, demonstrating a growth of 6.01% from the previous year, thus highlighting the sectors rising global competitiveness and its key role in driving Indias economic momentum.³

This expansion was boosted by a decrease in inflation from 5.4% in FY 2024 to 4.7% in FY 2025, which improved consumer confidence and stimulated consumption in both urban and rural areas.⁴

Outlook

India has emerged as the fourth largest economy globally and is projected to sustain its growth momentum with an estimated GDP growth rate of 6.5% in FY 2026. This progress is expected to be driven by the recent income tax reforms, under which salaried individuals, who are earning up to INR 12.75 lakh annually, are now exempted from paying income tax. Aligned with the governments efforts, the Reserve Bank of India (RBI) is also encouraging economic activity through expansionary monetary policies. RBI has implemented successive 50 basis point repo rate cuts to 5.50 % to stimulate consumption and enhance liquidity.⁵ The government is also carefully approaching the global tariff dynamics to safeguard the countrys economic interests.

Despite external headwinds, India is likely to maintain its upward growth trajectory, supported by the resilient domestic demand, easing inflationary pressures and a supportive macroeconomic environment.

*Projected

Source: MoSPI Second Advances Estimates

Industry Overview

Indias Mining Industry

The mining industry in India increased from USD 2.26 trillion in 2024 to USD 2.4 trillion in 2025 with a Compound Annual Growth Rate (CAGR) of 6.2%.⁶ The major minerals recorded their highest-ever production, iron ore production stood at an all-time high of 289 million metric tons (MMT), up 4.3% from 277 MMT in FY 2023-24 and production of manganese ore increased by 11.8% to 3.8 MMT. Bauxite and lead concentrate also registered increases, with bauxite production rising to 24.7 MMT and lead concentrate to 393 thousand tones. The non-ferrous division witnessed primary aluminium production rise to 4.2 million tonnes and refined copper production rose by 12.6% to 573,000 tonnes.

Also, India is also among the global leaders in iron ore, bauxite, manganese, aluminium and zinc production and is making significant headway in the extraction of critical and strategic minerals like lithium, cobalt, and rare earth elements, crucial for energy transitions worldwide. The governments policy push, including the launch of the National Critical Mineral Mission and new offshore mineral block auctions, has further underpinned sectoral growth and diversification.

Looking ahead, Indias mining industry is poised for continued expansion, driven by sustained infrastructure investments, rising demand for steel and energy, and policy reforms aimed at boosting domestic mineral production. The sector is expected to benefit from the integration of advanced technologies such as AI and automation improving operational efficiency and sustainability. With the governments focus on critical minerals and green technologies, India is set to strengthen its position in the global mineral supply chain. The industrys growth trajectory is likely to be shaped by ongoing regulatory reforms, increased private sector participation, and international collaborations, positioning it as a key enabler of the countrys economic and industrial ambitions.

India is the 2^nd largest Aluminium producer

India is the 4th largest iron ore producer in the world

Coal Mining⁷

Indias coal mining sector demonstrated robust growth in FY 2024-25, with total coal production hitting an all-time high of 1,047.57 million Tonnes (MT), up by 4.99% from 997.83 MT the previous year. This growth was propelled by the efforts of the public sector enterprises, private players and a workforce of nearly 5,00,000 miners working across more than 350 operational mines. A key highlight was the 28.11% surge in output from commercial and captive mines, which produced 197.50 MT in the year under review, compared to 154.16 MT in FY 2023-24.

Coal dispatches kept pace with the production, rising to 190.42 MT from captive and commercial mines, a 33.36% increase Year-on-Year (YoY). Coal continues to be the core of the energy landscape in India, meeting 55% of total energy needs and powering over 74% of electricity generation. The Ministry of Coals push for innovation, sustainability and operational efficiency has improved domestic coal supply and curbed import reliance. It also aligned the sector with Indias green growth agenda, a major step towards the Viksit Bharat 2047 vision.

India is the worlds second-largest consumer of coal and has the fifth-largest reserves.

Indias Infrastructure Sector⁸

Indias infrastructure sector maintained its strong trend in FY 2024-2025, led by continuous government spending and a solid project pipeline under the National Infrastructure Pipeline (NIP) and Gati Shakti program. The sector saw high momentum in transportation, energy, and urban development, with emphasis on upgraded logistics, growth in renewable energy capacity, and connectivity. Public-private partnerships (PPP) and policy reforms also enhanced growth, facilitating quicker execution of projects and the attraction of domestic and foreign capital.

Substantial gains were registered in the infrastructure and transport space, with Bharatmala Pariyojana leading the development of major economic corridors and expressways, and MoRTH recording a record 12,349 km of national highway development. At the same time, the infrastructure and energy solutions space saw consistent growth, powered by increasing demand from road construction, mining, and road-building activities. Industry participants emphasized innovation, safety, and sustainability to address changing regulations and customer requirements, providing niche solutions like industrial explosives, energy systems, and project management services.

Indias infrastructure sector is upbeat, driven by sustained policy support and an increasing focus on green and digital infrastructure. Those with a portfolio diversified across core and allied sectors, with a strong presence in both, are best placed to leverage future opportunities. Also, the infrastructure sector is set to remain a foundation of growth, employment generation, and socio-economic transformation in FY 20242025 and beyond.

Capital Expenditure as % of GDP

Source: Press information Bureau Roads and Highways

The Indian roads and highways sector recorded significant growth in FY 2024-2025 with the support of high government commitment and a rise in budget outlays. This is evidence of the governments emphasis on infrastructure as a growth driver and regional connectivity. It has dramatically enhanced connectivity, lowered the travel time and increased economic activity throughout the nation.

Key projects like the Bharatmala Pariyojana and the NHDP remained top priorities, with a special focus on expressways, economic corridors and border roads. The government also focused on the implementation of new construction technologies and digital surveillance systems to improve efficiency and transparency. The development of the sector has not just enhanced connectivity among key cities and industrial centres but also helped in generating employment and developing regions, adding strength to its central position in Indias infrastructure dynamics for FY 2024-2025.

India is the second largest road network in the world

Indias National Highway Growth

Source: Press Information Bureau Indias Real Estate Sector⁹

Indias real estate sector stands as a vital pillar for the economy, ranking second after agriculture in terms of employment generation and making a substantial contribution to the countrys GDP. In FY 2024, The sector recorded impressive growth in the year under review, reaching a market valuation of USD 482 billion. This momentum was fuelled by rapid urbanisation, higher disposable incomes and supportive government policies that drove the demand across residential, commercial, industrial and logistics segments. Large-scale infrastructure projects such as metro network expansions and the development of industrial corridors enhances connectivity and unlocks new areas for real estate development.

India Real Estate Market Forecast Size, By Property, 2024-2033 (USD Billion)

Industry Structure and Developments

Industrial explosives play a critical role in mining and infrastructure sectors. Major consumers include Coal and iron ore mining industries, along with other metal mining operations. In the infrastructure domain, explosives are essential for blasting activities associated with road construction, tunnel excavation, and similar large projects. Effective blasting operations require a combination of bulk and packaged explosives, along with and initiating devices such as detonators, detonating fuse and boosters.

Opportunities and Threats

India, as the fastest-growing major economy, continues to drive demand for explosives through key sectors such as power, housing, roadways, railways, and defence. These infrastructure and strategic sectors are expected to remain strong consumers, supporting the explosives market.

However, the industry has faced several challenges over time. The entry of numerous smaller and unorganized players has intensified competition, while the dominance of large buyers has put downward pressure on profit margins, making the operating environment increasingly difficult for established companies.

India EMS-ODM Market Segment Insights¹⁰

The India EMS-ODM Market Industry is valued at approximately $ 80.96 billion in 2024 with the projection to reach $ 186.5 billion by 2035. This growth was due to increasing demand for electronic manufacturing services and original design manufacturing. This segment is immensely crucial as it supports businesses in reducing operational costs, enhancing efficiency and accelerating the product development lifecycle. The EMS segment primarily focuses on providing electronic manufacturing solutions, enabling companies to outsource production processes and focus more on core activities such as Research and Development, marketing and distribution. This facilitates more resource allocation and contributes to faster time-to-market for products, which is essential in todays competitive landscape.

Meanwhile, the ODM segment plays a critical role in product design and development, catering to various industries, including consumer electronics, automotive and telecommunications. This segment typically collaborates closely with clients to create tailored products that meet specific market needs, thereby offering significant added value. The ODM service providers benefit from their established design capabilities and expertise, along with existing production infrastructure, which can result in reduced lead times and lower production costs. In the Indian context, government initiatives such as Make in India have spurred growth in the EMS and ODM sectors by promoting indigenous manufacturing and attracting foreign investments.

India EMS_ODM Market (In Billion)

Sources: Market research Future

Opportunities in EMS business

The Electronics Manufacturing Services (EMS) industry in India presents significant growth opportunities, driven by strong government support through initiatives such as Make in India, the Production Linked Incentive (PLI) scheme and increasing emphasis on domestic value addition. With rising labour costs and geopolitical shifts pushing global companies to diversify their manufacturing bases, India is emerging as a preferred destination due to its skilled workforce, improving infrastructure and policy support. Additionally, the growing demand for consumer electronics, smartphones, IoT devices and automotive electronics is fuelling the need for localized manufacturing and robust EMS providers.

Indias transition towards becoming a global electronics manufacturing hub is further supported by increasing digital

adoption and expanding exports of electronic components and finished products. With global companies establishing partnerships with Indian EMS players and setting up local manufacturing plants, there is a tremendous scope for scaling operations, improving supply chain efficiency and innovating in product design and assembly. This not only creates export potential but also generates employment, attracts foreign investment and enhances the countrys technological capabilities in the long run.

Company Overview

GOCL Corporation Limited (GOCL), formerly known as the Indian Detonators Limited, is a part of the Hinduja Group and has played a key role in the Groups growth since its establishment in 1961. Previously operating under the name Gulf Oil Corporation Limited, GOCL has evolved into a diversified enterprise with product offerings ranging from explosives, detonators, mining chemicals to real estate. The Company has strengthened its foothold in the commercial explosives market with the support of its subsidiary. The Company operates manufacturing facilities in multiple regions across India and exports explosives and initiating devices to international markets, including the Middle East, Southeast Asia and North America.

Over the period, the explosives industry has been experiencing intense competition with entry of smaller / unorganized players. Coupled with a situation of dominance of buyers, the industry margins have been coming down. In this background, the Company is disinvesting its wholly owned material subsidiary engaged mainly in the bulk and cartridge explosives, as also the Energetics operations at Kukatpally, Hyderabad.

Financial and Operational Performance*

Particulars	Standalone		Consolidated
	FY 2024-25	FY 2023-24	FY 2024-25	FY 2023-24
Total income	36,609.17	19,159.83	1,03,012.59	94,903.20
Profit before tax	21,874.57	5,589.39	21,733.14	6,406.53
Profit after Tax	16,673.52	4,121.58	15,721.25	4,825.29
EPS (In Rs.)	33.63	8.32	31.71	9.73

* includes discontinued operations

As mentioned in the Boards Report, the Company has exited the Energetics business and is in the process of exiting Explosives business. The current focus of the Company is on the high potential EMS business.

Segment-wise performance

The Company operated primarily in the Explosives & Energetics and Realty segments. However, in view of challenges such as intense competition, low scalability a buyer-concentrated market structure , the Company has strategically decided

to phase out its Explosives and Energetics divisions. This transition has significantly influenced the performance of the Company and its wholly owned material subsidiary.

The Electronics Manufacturing Service (EMS) division, which was originally launched to support the in-house production of electronic chips for electronic detonators, has begun to evolve into an independent business segment. Although it was initially integrated within the Energetics segment, EMS is gradually positioning itself as a standalone vertical, with growing operational significance. The financial performance of these segments has been mentioned in the Board Report.

Outlook and plans have been mentioned in the Boards Report.

Details of significant changes in Key Financial Ratios

The changes in the consolidated key financial ratios of the Company are represented in a tabular format. This includes significant changes in the ratio of 25% or more than that for the current year and the previous year. In addition to the quantitative figures, the explanation for better understanding.

Sr. , Key Financial ratios No.	FY 2024-25	FY 2023-24	Variance (%)
1 Debtor turnover	12.10	9.94	21.65%
2 Inventory Turnover ratio	9.73	4.07	139.05%
3 Interest coverage ratio	2.95	1.44	105.47%
4 Current Ratio	8.20	7.05	16.30%
5 Debt equity ratio	0.71	0.84	18.30%
6 Net profit margin % [variance in bps]	15.26	5.08	10.18
7 Operating profit margin % [ variance in bps]	(13.65)	(3.96)	(9.69)
8 Return on Net worth% [variance in bps]	10.50	3.41	7.09

The reason for change in ratios by more than 25% is mainly due to decrease in inventory, increase in Other Income and repayment of borrowings during the year.

Risks and Concerns

The Company has a well-established risk management system that supports the identification of risks and the implementation of mitigation strategies affecting its operations. The Risk Management Committee, consisting of senior executives, regularly reviews and oversees the risk management processes.

Risk	Risk Concerns	Mitigation Strategy / Remarks
Economic & Environmental Risks	Environmental risks arise from the potential negative impact of the Companys operations on air, water, and land. Non-compliance with environmental regulations can lead to penalties, reputational damage, and operational disruptions. Such risks can hinder overall efficiency and increase long-term costs.	The Company has exited the hazardous industries, namely explosives and energetics. The EMS operations do not pose any environmental or operational risks.
Environmental Risks	The Companys operations may negatively impact the environment, hindering their progress.
Operational Risk	Licensing delays pose a risk to the Companys growth and operational efficiency, especially when launching new products. Timely approvals are critical to avoid disruptions in market entry.
Market Risk/ Dynamics	The Company may face intense competition from domestic and international players.	The EMS business is trying to develop niche products for supply to targeted customers adding its Value as ODM service provider.
Financial Risk	The Company faces currency, interest rate, and credit risks due to global operations and customer exposure, managed through financial controls and credit checks.	Currency risks are managed through hedging strategies by the Company. A credit risk policy is in place with financial condition evaluations and customer-specific credit limits. Working capital is actively monitored by the Finance Department of the Company to maintain liquidity.
	Liquidity risk arises from high working capital needs and Litigation risk including tax-related matters.
Legal and Statutory	Prolonged or unexpected litigation, including tax and regulatory disputes, can adversely impact the Companys performance and reputation. Such legal proceedings may result in financial penalties, operational disruptions, and management distraction.	An in-house legal team of the Company reviews major contracts, supported by independent legal counsel. Pre-contract vetting and engagement with reputed legal professionals help to manage litigation effectively.
IT Risks	Integration of technology in the Companys operations increases exposure to cybersecurity threats and IT failures.	A robust IT policy includes regular data backups, secure intra and inter-office networks, virus protection and firewalls. Regular awareness programmes are conducted by the Company to educate staff on IT and cybersecurity practices.

Human Resources

Employees are the cornerstone of the Companys success. GOCLs HR policies and guiding principles have been instrumental in nurturing a strong organizational culture rooted in professionalism, integrity, and mutual respect. The Company remains firmly committed to promoting diversity, equity, and inclusion core values that are deeply embedded in its ethos.

In support of an inclusive and safe workplace, the Company has implemented a robust Prevention of Sexual Harassment (POSH) policy. Furthermore, the Whistle Blower Policy continues to serve as a vital mechanism for ensuring transparency and accountability. It is regularly reviewed and overseen by the Audit Committee, reinforcing GOCLs commitment to the highest standards of ethical conduct and governance

During the year, the Company underwent a significant phase of transformation, resulting in organizational restructuring and substantial workforce churn. This transition was primarily driven by the closure of operations at the Hyderabad plant.

GOCL approached this change with sensitivity, responsibility, and transparency. The Company ensured that all impacted employees and workmen were treated with fairness and respect. A structured and well-communicated settlement process was implemented, reflecting our commitment to employee welfare even during difficult transitions.

By upholding high standards of fairness, the Company maintained trust and stability while navigating this important phase of transformation.

106

Number of Employees

Internal control systems and their adequacy

The Company recognises that internal control is necessary for effective governance and believes in striking a balance between independence and accountability. The Company has robust internal and financial controls tailored to its activities size, scope and complexity. Continuous evaluation ensures adequate, effective and efficient financial and operational risk management procedures. The Companys internal and financial control systems include robust procedures for operations management, financial reporting, compliance with policies

and regulations, asset protection and resource optimisation. The Company engages outside experts to assesses its systems regularly to ensure they are in line with its growing operations. The Companys internal and financial control system is supported by SAP-ERP, Risk Management procedures, Corporate Policies, Standard Operating Procedures and ISO certifications (QMS and OHSAS). These aspects work together to properly implement quality and control systems. The Internal Audit Department supports management by providing objective reviews of operational areas, including subsidiaries. Independent assurance helps the Audit Committee and Board of Directors assess the effectiveness of risk management, financial and operational controls and corporate governance systems. The Internal Audit function reports directly to the Audit Committee. The Audit Committee oversees the Companys internal control systems. They examine critical findings and provide strategic recommendations. The Audit Committee and the Companys Statutory Auditors meet regularly to discuss the sufficiency and efficiency of internal control systems. Each year, an approved Internal Audit Plan is prepared based on the risk profile of the business activities and operations. This plan is used as a guidance for the Internal Audit function. Process owners develop Action Taken Reports in response to internal audit findings to strengthen Company processes, comply with regulations and improve controls. The Audit Committee receives periodic reports and recommendations from the Statutory Auditors. This collaborative approach helps accomplish critical activities. During the year, the Audit Committee met 4 (four) times to deliberate and review the internal audit reports, including action reports on important observations. The team examined agreed-upon measures and discussed Internal Financial Control (IFC), Internal Audit, Financial and Statutory Audit and related reports. These meetings facilitated the timely and successful implementation of identified activities.

Cautionary Statement

The Management Discussion and Analysis section includes information about the Companys objectives, plans, estimates and expectations, which may be considered "forward-looking statements" under securities regulations. Actual results may differ materially from those indicated or implied in these statements. Economic conditions, domestic and international market prices, competitive pressures, government regulations, tax laws and other statutory requirements can all impact the Companys outcomes.