Grauer & Weil (India) Ltd Management Discussions

Disclaimer

Statements in the Management Discussion and Analysis that describe the Companys objectives, expectations, estimates or predictions may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in such statements. The Company accepts no responsibility to publicly update, modify or revise any forward-looking statements in light of any subsequent developments, events or information.

The global economic growth over the past few years has been supported by relevant fiscal and monetary policies adopted by various economies. Despite the impact of geopolitical tensions and elevated inflation levels, the global economy grew by 3.3% in CY 2024. Emerging Markets and Developing Economies (EMDEs) recorded stronger growth in CY 2024 compared to Advanced Economies.1 Among the EMDEs, the Indian economy showed resilience and maintained healthy growth in FY 2025. As one of the fastest-growing nations and the fifth-largest economy in the world, Indias GDP expanded by 6.5% in FY 2025.2 This growth was driven by strong performance across key sectors, particularly construction and financial services. Private spending remained robust throughout the year, reflecting sustained demand and strong consumer confidence. Strategic and timely measures introduced by the Indian government also played a significant role in supporting this growth journey. In FY 2025, capital expenditure reached 74.7% of its revised estimates for FY 2024-25.3 Over the years, India has also made strong progress in enhancing its public infrastructure. Schemes such as the Production- Linked Incentives (PLI) programme contributed to the growth of manufacturing across 14 sectors, including automobiles and auto components. The inflow of Foreign Direct Investment (FDI) rose by 12.4% during the reporting year compared to the previous fiscal year. The manufacturing sector continued to be the leading recipient of FDI in FY 2025.

Looking ahead, the global economic outlook is expected to remain steady, supported by a decline in global inflation. A lower inflation environment is likely to support higher economic activity across countries. The outlook for the Indian economy remains optimistic, with an estimated GDP growth of 6.5% in FY 2026.4 This growth is expected to be driven by higher consumption, aided by easing inflation, tax measures introduced in the Union Budget 2025 and the liquidity support extended by the Reserve Bank of India (RBI). Indias strong growth journey is also expected to position India as the third-largest economy by FY 2028. The Viksit Bharat@2047 vision aims to see India as a developed nation by 2047. To achieve this goal, there is a continued need to strengthen the manufacturing sector and invest consistently in advanced technologies, including artificial intelligence, robotics, and biotechnology.

*Projected

Source: IMF World Economic Outlook. April 2025

1https://www.imf.org/en/Publications/WEO/Issues/2025/01/17/world-economic-outlook-update-april-2025 2https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/0BULT19032025F9CCA0AB1F7294130A950E2FD5448B5FC.PDF 3https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/0BULT19032025F9CCA0AB1F7294130A950E2FD5448B5FC.PDF

4https://www.crisil.com/content/crisilcom/en/home/newsroom/press-releases/2025/03/resilient-india-to-grow-6-point-5-percent-in-fiscal-2026-despite-challenges.html 5https://pib.gov.in/PressReleasePage.aspx?PRID=2090875

Grauer & Weil (India) Limited (Growel) Established in 1957, Grauer & Weil (India) Limited (Growel), is the only Company in India and among the few globally to offer complete corrosion protection solutions for all types of substrates across various industry segments. The Companys strong focus on greentechnologiesandbackwardintegrationhasdriven innovations that align with the specific requirements of the customers. Driven by its aspiration to be among the top, Growel continues to strengthen its people and its values. This approach has led to the diversification of its businesses and supported a long-standing journey of value creation for a broad spectrum of stakeholders. Also, as a responsible corporate organization, the Company is involved in developing sustainable green practices within its operations and contributes to the development of local communities through a range of CSR initiatives.

The Financial year 2024-25 was a reasonably good year for the company despite intervening challenges. For the first time in its history, your company achieved its highest ever Total Income, reaching Rs. 1,173.61 crore, coming close to the Rs. 1,200 crore mark on the backdrop of strong sales reported by Surface finishing Business. This stellar performance was largely fueled by the good performance of Surface finishing segment.

The Engineering business however faced some headwind with slowing down of the order pipeline, particularly in the second half of the year leading whilst mall revenues declined by approximately 6.8% leading to Rs. 33.8 cr.

An overview of the performance of different business segments of the Company is as under:

1. Surface Finishing Segment:

Surface Finishing Segment continues to be a significant part of overall business operations of the company. The segment accounts for approximately 84% of total revenues whilst contributing nearly 93% to segmental results. In the current year your company recorded a turnover of Rs. 989.51 cr.

A. Chemicals: Your Companys performed well in this year both in value and volume terms despite various risk confounding the economy. Fortunately, metal prices were relatively stable and hence, inflationary challenges were limited. Our end-use industry continued to flourish leading to value growth belying the underlying volume growths.

B. Paints: The Company lost some growth rate in the Paints sub-segment due to intensifying competition from several companies who have recently made forays into this sector. Nevertheless, your company, being in a niche segment of a very large market afforded some protection from volume attrition and continues to grow year-on-year basis.

C. Lubricants: The Lubricants sub-segment too had a splendid year with a significant volume and value growth, the latter being Rs. 26.9 cr. The year is fortuitous as we also got breakthroughs with customers who we have been trying to acquire/ convert for a number of years.

2. Engineering Segment : This division supplies customized turnkey plants and their components for surface finishing, waste-water and effluent treatment and other engineering solutions. The Net revenue witnessed a decline by 24.8% due to postponement of deliveries by several of our customers and lack of materialisation of some orders. Your company achieved a sale of Rs. 107.1 crores which was a decline from the previous years numbers of Rs. 142.3 crores. We hope to recover some of this lost growth in the current year.

3. Mall Segment: Companys Mall at Kandivali was having a normal year of performance with expected turnover to remain in the realm of the previous year. However, Pursuant to an order dated 5th March 2025 issued by the Maharashtra Pollution Control Board (MPCB) under the provisions of the Water (Prevention & Control of Pollution) Act, 1974 and the Air (Prevention & Control of Pollution) Act, 1981, the operations of Growels 101 Mall were directed to be closed. This order was upheld by the Honble Bombay High Court on 19th March 2025, following which mall operations were suspended. The Company has since filed a Special Leave Petition before the Honble Supreme Court challenging the closure order, which is currently pending final adjudication.

Despite the temporary suspension of mall operations, the Companys other business segments continue to function without disruption

Kindly share the financial performance of the Company in FY 2025

In its core Surface Finishing segment, the Company operates in a highly competitive environment, contending with both domestic and international players. Despite this, it maintains a strong position thanks to its leadership in chemical and engineering products within the domestic market, its ability to deliver high-quality solutions at competitive prices, swift customer responsiveness, and continuous innovation in Paints and Lubricants. These strengths are supported by a wide-reaching distribution network, robust R&D capabilities—including a DSIR-recognized, state-of-the-art facility—strong technical services, and strategic procurement advantages.

The Company maintains close engagement with customers and regularly introduces new products and processes, often developed in collaboration with technology partners. With expected global economic growth, the Company sees promising opportunities in export markets. Management remains optimistic about the future, underpinned by these core strengths.

In the surface treatment domain, emerging opportunities from sectors such as defense, functional electronics, anodizing, renewables, and aviation are expected to significantly contribute to the Companys future growth. The Company is well-equipped with sufficient capacity to meet the evolving demands of these expanding industries.

In the Paints segment, the governments focus on infrastructure and rural development through economic stimulus measures, along with the addition of new customer and product segments in the previous year, presents further growth opportunities.

The Mall of the Company is currently closed and will remain so until we have judicial clearance to operate the same.

Indias manufacturing landscape is undergoing a quiet transformationdespitethecacophonyofcounterclaims. Backed by policy support and shifting global dynamics, the country is positioning itself as a serious contender in high-value industrial production. Government schemes such as the Production-Linked Incentive (PLI) programs—covering sectors from semiconductors to automotive components—are beginning to show early results. In FY24, Indias manufacturing sector grew by 9.9%, outpacing overall GDP growth and marking a significant post-pandemic recovery. Infrastructure improvements, a young workforce, and improving logistics connectivity are further strengthening Indias appeal as a manufacturing destination.

Among the fastest-growing sectors are renewables and electronics. India added over 24 GW of renewable energy capacity in FY24, as per official documents, with solar leading the charge. This rapid buildout is fueling demand for performance coatings that improve weather resistance, reduce reflectivity losses, and extend component life. Meanwhile, Indias electronics production is estimated to have exceeded Rs. 8.0 lakh crore (~$90 billion) in FY24, driven by increased assembly of smartphones, wearables, medical devices, defence equipment, etc. These products require high-precision surface treatments and protective coatings, creating new demand for advanced materials and finishing technologies that meet global quality standards.

Metal finishing and industrial coatings, traditionally seen as peripheral, are now central to Indias push for quality-driven manufacturing. Applications are widening—from zinc-aluminum flake coatings for windmill bolts to electroless nickel plating in EV components. Domestic players are investing in automation, REACH-compliant chemistries, and R&D capabilities to cater to this shift. As India moves from volume to value, reliable surface engineering will become a critical differentiator—quietly shaping the countrys ambitions to be not just a factory to the world, but a trusted source of high-performance industrial products. We are attempting to suitably position ourselves along this frontier and we remain very positive of our outlook in the years to come.

The workforce of the Company plays an essential role in supporting its growth journey. With a total strength of 964 individuals, the Company focuses on attracting and retaining a team of skilled and motivated professionals. All employees are ensured a safe and positive working environment. In addition, the Companys learning and development initiatives enable the workforce to enhance their skills and stay relevant in a constantly evolving landscape.

As the operations of the Company are exposed to various risks that may affect its performance, risk management policy was established in accordance with Clause 49 of the Listing Agreement. This policy is aimed at identifying and assessing different risks and implementing appropriate mitigation strategies to minimise any adverse impact on the Companys operations. Additionally, the risk management policy is reviewed and overseen by the Risk Management Committee.

Managing Director – Chairman of the Committee

Director - Operations

Independent Director

Chief Operating Officer

The Company has in place adequate internal control systems and a risk management framework that are well-suited to the size and nature of its business. An independent firm of Chartered Accountants conducts regular internal audits. These control systems and frameworks are reviewed by the Top Management and the Audit Committee of the Board, with necessary follow-up actions taken wherever required.