Gujarat Intrux Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Gujarat Intrux Limited is a trusted manufacturer delivering high-quality castings in stainless steel, alloy steel, and non-alloy steel categories. Serving primarily in the valve industry, the company operates from a well-equipped manufacturing unit, supported by modern and state of the art infrastructure, sophisticated machinery, to ensure uninterrupted production.

A robust system of internal controls governs the companys financial and operational processes. These systems are carefully designed to uphold accuracy in accounting, protect physical and intellectual assets, enhance productivity, and ensure reliable decision-making data. Oversight by an Audit Committee-composed of Independent Directors-further reinforces financial discipline and compliance with statutory norms and accounting standards.

The company strongly believes in nurturing talent and building future-ready leadership. With a focus on workforce engagement, skill enhancement, and strategic talent management, Gujarat Intrux continues to strengthen its human capital, enabling it to navigate business challenges with confidence and agility.

Financial Performance is highlighted as under:

During the 2025-26 fiscal year, Gujarat Intrux Limited demonstrated operational resilience by countering an 18.15% drop in export sales (falling to ^2,050.66 lakhs) with a robust 21.12% surge in domestic sales to reach ^4,548.59 lakhs. Supported by a modest 1.78% increase in production volumes to 1,529.74 MT, this strong domestic expansion successfully offset the international decline to push total sales up by 5.41% to ^6,599.25 lakhs. However, rising costs created slight efficiency strains, resulting in a marginal 2.96% compression in Earnings per Share (EPS) to ^29.87. Despite this minor dip in profitability, the company maintained payout consistency, holding its total dividend payout unchanged at 250%.

The significant changes in the financial ratios of the company, which are more than 25% compare to the previous year are summarised below:

Further, details pertaining to other financial ratios also mentioned in this annual report. Please refer audited financial statements Note no. 26 (17).

The return on Net worth for the financial year 2025-26 has Decreased from 308.36%% to 304.78% as compare to preceding financial year due to higher payment of dividend in FY 25-26.

The financial statements of the company are prepared as per the prescribed accounting standards and no other treatment or practices are being followed.

The company has only one segment i.e. Sand Casting unit only. The Company has total sales of RS. 6599.25 Lacs in compare to previous year of Rs. 6260.82 Lacs. (viz. represents 5.41% YOY growth).

The company has generated major of its revenue from valve industries.

Domestic sales = 68.93%, Export Sales= 31.07%

The growth of the steel industries remarkable and overall all steel segments demand increased. The Steel Castings industries growing in India and requirements of pumps, valves and other engineering castings parts growing. Future of casting industries is bright.

The Indian steel industry is expected to experience healthy growth in 2026-27, driven by strong domestic demand and government initiatives. While global steel demand is predicted to increase modestly, India is anticipated to be a key driver of this growth.

Gujarat Intrux Limited is well-positioned for the upcoming fiscal period, supported by robust fundamental metrics and a virtually debt-free balance sheet, as evidenced by steady year-on-year revenue expansion and resilient net profit margins in its latest full-year results. The company successfully leverages Indias infrastructure-led industrial boom while simultaneously capitalizing on international trade flows, maintaining a balanced operational portfolio that satisfies stringent domestic demands and competitive export markets for its specialized, high-specification pump and valve castings. By blending this dual-market reach with a technical capability to process a vast array of unique alloy varieties, the company effectively de-risks its revenue streams, optimizes its capacity utilization, and insulates its corporate margins from regional macroeconomic cyclicality.

Gujarat Intrux Limited leverages a strong foothold in the high-demand valve sector by consistently manufacturing top-tier castings and expanding its international client base. By utilizing a fully functional internal machining facility, the company has successfully optimized its service reliability and shortened delivery timelines to better respond to market needs. However, the broader foundry industry faces intense external challenges, particularly from escalating geopolitical conflicts and global trade fragmentation that inflate ocean freight rates and trigger shipment delays. These transport pressures complicate inventory control and disrupt normal delivery cycles, while volatile fuel rates and fluctuating power tariffs continuously strain margins in this energy-intensive sector. Despite these unpredictable order flows and heavy capital requirements, the companys focus on cost optimization and quality allows it to absorb macroeconomic shocks without disrupting production.

The Company operates in a sector that is inherently exposed to multiple business and operational risks due to the nature of sand casting and metal processing. One of the primary concerns remains the volatility in demand from both domestic and export clients, which is closely linked to the global economic climate, industrial activity, and sector-specific investment cycles. Unpredictable shifts in order volumes make capacity planning and inventory control difficult, impacting working capital efficiency. The Company continues to face pressure from rising input costs, especially in key consumables like zircon sand, chromite sand, resins, and fluxes, which are heavily influenced by mining policies, import dependencies, and environmental regulations. Any disruption or restriction in the availability of these raw materials due to policy changes or global shortages could significantly hamper production schedules.

Energy remains a critical cost component, and frequent fluctuations in natural gas prices and electricity tariffs add pressure on margins, particularly for energy-intensive foundry operations. Additionally, fluctuations in foreign exchange rates and metal price affect procurement costs and pricing strategies.

Labour-related challenges also persist, including the migration of skilled manpower, difficulty in recruiting and retaining trained workers, and the time and resources required to bring new recruits to optimal productivity levels. Rising wage structures and regulatory compliance on labour welfare further increase operational overheads. Moreover, logistics and freight costs remain volatile, and delays in movement of goods due to transport bottlenecks or supply chain disruptions can directly impact delivery timelines.Prices of Natural resources such as Natural Gas and carbon dioxide (CO2) are some other risk factors which affect the business of the company.

Gujarat Intrux Limited has instituted a well-defined and comprehensive internal financial control system that is strictly commensurate with the scale, complexity, and nature of its foundry and casting operations. These structured mechanisms are engineered to provide reasonable assurance regarding the orderly and efficient conduct of business. This includes the stringent safeguarding of corporate assets, the prevention and swift detection of fraud and operational errors, absolute accuracy and completeness of accounting records, and the timely compilation of reliable financial disclosures in compliance with Section 134(5)(e) of the Indian Companies Act, 2013.

To support its manufacturing environment, the company integrates specialized material tracking and inventory ledger frameworks directly into its financial accounting workflows to mitigate resource discrepancies and maintain operational consistency. The management continuously reviews, updates, and strengthens the overarching internal control architecture to eliminate gaps and adapt to evolving regulatory or market shifts.

The structural adequacy and operating effectiveness of these frameworks are validated via systematic periodic audits executed by independent Internal and Statutory Auditors. Any significant audit observations, material variations, or action- taken reports are directly forwarded to the Audit Committee for thorough evaluation and necessary administrative guidance, ensuring robust corporate governance across all corporate tiers.

In order to ensure transparency and full compliance of the applicable laws, Company has developed a comprehensive tool which covers the entire gamut of compliances applicable to the companys business. The same has been made operational during the year under review. This tool will enable the company to track and ensure compliance to the regulations in the prescribed time frame. At the same time, it also provides opportunity to develop an efficient plan for go to market strategy for its projects.

The Gujarat Intrux Limited is known for quality excellence. Entire companys manufacturing process takes extreme care for providing quality. Your Company has achieved benchmark in providing quality casting. The Company has only motto of providing quality casting. The Company has separate and dedicated team to assure desired quality and we are maintaining it.

At Gujarat Intrux Limited, our workforce stands as a cornerstone of corporate excellence, where individual professional development directly fuels our collective operational success. To seamlessly integrate talent into our manufacturing ecosystem, the Human Resources department executes a rigorous induction framework. This program effectively aligns new recruits with the companys core values, workplace culture, shop-floor operational workflows, and strict industrial safety protocols.

Continuous workforce development is sustained through structured, on-the-job technical training designed to enhance practical competencies. This is further augmented by a curriculum of advanced technical seminars, specialized learning sessions, and soft-skill development workshops aimed at fostering continuous career progression.

Occupational health and physical safety remain non-negotiable operational priorities. The company regularly administers targeted in-house and onsite training programs to ensure all personnel are well-versed in the latest industrial safety standards and preventative safety measures. Demonstrating a tangible commitment to employee welfare and long-term security, the company maintains a comprehensive personal insurance policy for its staff. By balancing robust welfare initiatives with accountability, the HR team has successfully cultivated a high-performance culture rooted in continuous operational improvement. Driven by mutual respect and open communication, industrial relations remained entirely harmonious, cooperative, and stable throughout the year, sustaining a highly motivated organizational climate.

The Company located at National Highway Rajkot-Gondal and due to its location, the company gets skilled manpower at minimal cost. The companys total manpower comprised 237 employees as on 31st March, 2026. The average age of 80.17% of employees was between 18-45 years as on 31st March, 2026. The company has professionals comprising the following competencies: Metallurgy, Mechanical, finance, sales, operations, quality assurance, procurement and others.

Your Company is committed to fulfilling its Corporate Social Responsibility (CSR) obligations in accordance with the provisions of the Companies Act, 2013 and applicable rules. CSR is treated as an essential part of ethical business conduct, with a focus on contributing to the betterment of society within the prescribed framework. During the year under review, the Company made its statutory CSR contribution, with specific focus on the healthcare and education sectors.

The CSR Committee of the Board is responsible for overseeing the planning and implementation of the Companys CSR activities. The Committee periodically reviews the CSR Policy, identifies appropriate projects, and monitors their execution to ensure alignment with regulatory requirements and the Companys social values. The Company has complied with all statutory requirements related to CSR during the year, and details of the activities undertaken are disclosed in the Annual Report as per the prescribed format. The Companys CSR Policy is available on its official website at https://guiaratintrux.com/wp-content/uploads/2025/08/CSR-Policv.pdf

Despite highly volatile macroeconomic conditions across international borders, Gujarat Intrux Limited continues to drive a dedicated foreign trade strategy to expand its presence across precision engineering networks. In the financial year under review, where export revenue accounted for 31.07% of its total sales, backed by consistent component supplies delivered across six core international markets: Germany, Israel, the USA, the UK, Spain, and Finland. However, demonstrating the cyclical headwinds typical of global trade, the companys current-year exports registered a decrease of 18.15%. This contraction reflects broader geopolitical bottlenecks and rising supply chain costs that have restricted global shipping logistics. Moving forward, the company remains structurally focused on leveraging its established international customer relationships and cost-optimization frameworks to counter these temporary volume pressures and restore long-term export momentum.

A dedicated marketing team supports the Companys global business by maintaining strong customer relationships based on trust, ethical practices, and timely execution. The Company also participates regularly in international exhibitions, helping it connect with new customers and explore emerging markets. The steady rise in exports is a result of consistent performance, product reliability, and the Companys growing reputation among overseas clients.

The Management Discussion and Analysis contains forward-looking statements that reflect the Companys current views, expectations, and assumptions with respect to future performance, business strategies, and the economic environment. These statements are based on certain assumptions and are subject to risks, uncertainties, and various factors that may cause actual results to differ materially from those expressed or implied herein. Such factors include, but are not limited to, changes in domestic and global economic conditions, demand-supply dynamics, price fluctuations, changes in government policies and regulations, tax structures, and other economic, political, and environmental developments.