Gujarat Intrux Ltd Management Discussions

AN OVERVIEW:

Gujarat Intrux Limited is a trusted manufacturer delivering high-quality castings in stainless steel, alloy steel, and non-alloy steel categories. Serving primarily 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.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

As per the IBEF Data and reports India is the worlds second-largest producer of crude steel, with an output of 143.6 MT of crude steel and finished steel production of 138.5 MT in FY24.

IBEF report suggests The annual production of steel is anticipated to exceed 300 million tons by 2030-31. By 2030-31, crude steel production is projected to reach 255 million tons at 85% capacity utilization achieving 230 million tons of finished steel production, assuming a 10% yield loss or a 90% conversion ratio for the conversion of raw steel to finished steel. With net exports of 24 million tons, consumption is expected to reach 206 million tons by the years 2030-2031. As a result, it is anticipated that per-person steel consumption will grow to 160 kg.

As per the forecast by Indian rating agency CRISIL, Indias steel demand is projected to grow by 8-9% in 2025, significantly outpacing the growth rates of other countries. This optimistic outlook reflects a strong trajectory for the Indian steel industry, driven by multiple demand-side factors.

Indias steel industry has emerged as a driver of the countrys economic growth, driven by increasing demand from various sectors, including construction, automotive, and infrastructure development. With a robust production capacity and favorable government policies, the industry is poised for significant growth in the coming years.

The Indian Government continues to introduce strategic initiatives and policy reforms in the steel sector, ensuring sustained momentum, global competitiveness, and long-term sectorial growth such as : to reduce imports, enhance domestic manufacturing, and improve energy efficiency, with applications open until January 2025.,In February 2024, the government has implemented various measures to promote self reliance in the industry. The Union Ministry of Steel launched PLI Scheme 1.1 on January 6, 2025, with a Rs. 6,322 crore (US$ 733.40 million) outlay to boost specialty steel production and attract investments. Covering five key product categories, the scheme eases norms reliance in the steel industry.

The steel industry has emerged as a major focus area given the dependence of a diverse range of sectors on its output as India works to become a manufacturing powerhouse through policy initiatives like Make in India. With the industry accounting for about 2% of the nations GDP, India ranks as the worlds second-largest producer of steel and is poised to overtake China as the worlds second-largest consumer of steel. Both the industry and the nations export manufacturing capacity have the potential to help India regain its favourable steel trade balance.

GLOBAL ECONOMIC OUTLOOK:

In the fiscal year 2024-25, the global economy experienced a notable slowdown amid rising trade tensions, policy uncertainty, and geopolitical instability. According to the World Bank, global GDP growth declined to 2.3%, down from earlier projections of 2.7%, reflecting weaker demand in advanced economies and slower trade flows. The IMF also revised its global growth estimate for 2025 to 2.8%, citing significant disruptions due to new tariffs and protectionist measures particularly from major economies like the U.S. and China.

Regional performance was uneven: India remained a standout with an estimated 6.3% growth, while Chinas economy slowed to 4.5%, burdened by property sector stress. The U.S. economy decelerated sharply to 1.4%, and Europe barely managed 0.7% growth due to ongoing energy and policy challenges. Looking ahead, the forecast for 2025-26 shows cautious optimism. The IMF projects global growth to stabilize at 3.3%, while the World Bank expects a marginal rise to 2.4%, supported by easing inflation and expected monetary policy adjustments. However, key downside risks remain including persistent geopolitical conflicts, tightening global financial conditions, and the lingering effects of global trade fragmentation.

Global headline inflation is expected to decline at a pace that is slightly slower than what was expected in January, reaching 4.3% in 2025 and 3.6% in 2026, with notable upward revisions for advanced economies and slight downward revisions for emerging market and developing economies in 2025.

(Source: IMF, WEO)

INDIAN ECONOMIC OVERVIEW:

Indias economy continues to grow at a steady and confident pace, standing out as the fastest growing major economy in the world. Gross Domestic Product (GDP) is a measure of size and health of the economy. It is the total value of all the goods and services produced within a country. In 2024-25, real GDP growth was estimated at 6.5 per cent. The Reserve Bank of India expects the same rate to continue in 2025-26. This performance comes at a time when the global economy faces uncertainty, making Indias steady momentum all the more significant.

Supported by strong domestic demand, easing inflation, robust capital markets and rising exports, the broader economic picture is one of resilience and balance. Key indicators such as record foreign exchange reserves, a manageable current account deficit, and increasing foreign investment reflect growing global trust in Indias long-term prospects. Together, these trends show an economy that is not only expanding but doing so with strength across sectors.

Several sectors demonstrated strong performance, contributing significantly to Indias economic growth:

• Construction: The construction sector showcased robust growth, expanding by 9.4% in FY 2024-25. This is a significant improvement, with the sector returning to double-digit growth in the fourth quarter (January-March 2025) at 10.8%. The positive trend in this sector likely reflects strong government investment in infrastructure and a revival in the real estate market.

• Public administration and defence: This sector registered an 8.9% growth rate, highlighting sustained government spending.

• Financial, real estate and professional services: This sector also experienced healthy growth at 7.2%, indicating strength in Indias service economy.

• Agriculture: A rebound in the agricultural sector, with a growth rate of 4.4% in FY 2024-25, played a crucial role in supporting the economy, especially rural demand. Favorable climatic conditions, including a good monsoon season, contributed to a higher foodgrain output. Kharif foodgrain production in 2024 exceeded both the previous years figures and the average output.

DEMAND-SIDE FACTORS:

• Private Consumption: Private Final Consumption Expenditure (PFCE) increased by 7.2%, indicating robust domestic demand. This rise in consumption was driven in part by a recovery in rural demand.

• Investment Activity: Gross Fixed Capital Formation (GFCF) grew by 7.1%, showcasing positive trends in investment across both the public and private sectors. However, the growth rate in FY 2024-25 was lower than the 8.8% registered in FY 2023-24.

INFLATION AND MACROECONOMIC STABILITY:

• Inflation: Inflation remained relatively controlled during FY 2024-25. Retail inflation, measured by the Consumer Price Index (CPI), fell to 4.6%, the lowest since FY 2018-19. In June 2025, inflation further declined to 2.10%, the lowest year- on-year inflation after January 2019. This drop was mainly driven by easing food prices, supported by a favorable monsoon and robust crop production.

• Macroeconomic Stability: Prudent fiscal and monetary policies were implemented to maintain macroeconomic stability. The Reserve Bank of India (RBI) even cut the repo rate by 25 basis points in February 2025 to support growth. The current account deficit (CAD) remained within sustainable levels, supported by strong service exports and remittance inflows. Indias foreign exchange reserves were robust, covering over 11 months of imports. External debt also remained moderate, at 19.1% of GDP.

(Source: National Statistics Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) Provisional Estimates 2024-2025 dated 30th May 2025)

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Financial Performance is highlighted as under:

Particulars	2024-2025	2023-2024	% wise Up/Down
Production(in MT)	1502.92	1492.20	0.72 % Up
Export Sales (Rs. In Lakhs)	2505.34	2091.73	19.77 % Up
Domestic Sales (Rs. In Lakhs)	3755.48	3402.23	10.38 % Up
Total Sales (Rs. In Lakhs)	6260.81	5493.96	13.96 % Up
Other Income (Rs. In Lakhs)	161.04	146.41	9.99 % Up
Earnings Per Share	30.78	21.42	43.70 % Up
Dividend %	250%	170%	47.06 % Up

In the financial year 2024-25, Gujarat Intrux Ltd demonstrated a strong operational and financial performance compared to the previous year. Production volumes witnessed a growth of 0.71%, indicating operational stability. A significant improvement was seen in revenue streams, with Export Sales rising by 19.77% and Domestic Sales increasing by 10.38%, leading to an overall Total Sales growth of 13.96%.

The company also strengthened its other income segment, which grew by 9.99%,. Most notably, profitability indicators improved substantially: Earnings per Share (EPS) jumped by 43.70%, and the Dividend payout increased from 17% to 25%, marking a 47.06% rise, showcasing the managements confidence and commitment to rewarding shareholders.

Overall, Gujarat Intrux Ltd has shown robust growth and improved profitability in FY 2024-25, building a strong foundation for future performance.

The Companys operational functions are well designed and having almost all facilities in house i.e. Two induction furnace, Moulding Unit, Sand-Reclamation Plant, Shot Blasting Unit, Heat Treatment, MPI, PMI, UT, RT, SPECTRO, IGCT, FARO and fully equipped Machine Shop having CNC, VMC, VTL and HMC etc..

FINANCIAL RATIOS:

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

RATIO	UNITS	FY 2024-2025	FY 2023-2024	CHANGE IN %	REASON FOR CHANGE
Return on Equity Ratio	%	0.16	0.12	33.49%	Due to an increase in net profit and more efficient utilization of shareholders equity.
Inventory Turnover Ratio	%	5.50	4.03	36.50%	Improved Inventory management and faster stock movement due to higher export and domestic sales.
Net Profit Ratio	%	0.16	0.13	25.78%	Result of better cost control and improved margins, leading to higher profitability
Return on Capital Employed	%	0.21	0.16	28.74%	Indicates more efficient use of capital and enhanced profitability across operations.

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

CHANGE IN RETURN ON NET WORTH

The return on Net worth for the financial year 2024-25 has increased from 215.84%% to 308.36% as compare to preceding financial year as profit of the Company has increased.

DISCLOSURE OF ACCOUNTING TREATMENT

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

SEGMENT/PRODUCT WISE PERFORMANCE.

The company has only one segment i.e. Sand Casting unit only. The Company has total sales of RS. 6260.81 Lacs in compare to previous year of Rs. 5493.96 Lacs. (viz. represents 13.96% YOY growth).

Industry wise revenue contribution:

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

Geographic revenue contribution:

Domestic sales = 59.98% , Export Sales= 40.02%

FUTURE OUTLOOK:

Future outlook of Industry

According to WSA (World Steel Association) estimates on overall global production, the global steel industry witnessed diverse trends across key producing countries in Dec 24. Indias crude steel production saw a significant increase in December 2024, rising by 9.5% compared to December 2023 and by 9.7% compared to November 2024. For the year 2024, Indias production reached 149.6 million tons, marking a 6.3% growth over 2023.

On the global stage, India is the second-largest producer of crude steel and the second largest consumer of finished steel in 2024, according to provisional rankings from world steel. It is projected to retain its position as the second-largest consumer of finished steel in 2025, as per world steels Short Range Outlook. Given this backdrop, Budget 2025 introduces key measures focusing on Agriculture, MSMEs, Investment, and Exports as the four pillars of economic growth. These initiatives are expected to significantly benefit the domestic steel industry through multiple channels.

The Indian steel industry is expected to experience healthy growth in 2025-26, 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, with projections of an 8-9% increase in steel consumption. This growth is fueled by infrastructure development and investments in various steel-consuming sectors.

Key Predictions for the Indian Steel Industry in 2025-26:

Strong Demand Growth:

Indias steel demand is predicted to grow by 8-9% in 2025, significantly outpacing the global average.

Infrastructure Boost:

Continued investment in infrastructure projects will be a major catalyst for steel demand.

Capacity Expansion:

The industry is actively expanding its production capacity, with new units expected to come online and existing ones restarting expansion projects.

Government Policies:

Government initiatives, such as the National Steel Policy and potential safeguard duties on imports, could further support the domestic industry.

Future outlook of the company:

Looking ahead, the Company has been able to add new customers during the year and has also trial orders for new product patterns. With the support of these valued customers, who are expected to remain associated with the Company in the future as well, the business is witnessing steady growth.

The overall outlook remains promising, with strong prospects for continued progress and development in the years to come.

POTENTIAL CHALLENGES:

Global Economic Uncertainty:

While Indias growth is expected to be strong, global economic fluctuations could still pose some challenges.

Competition:

The industry may face competition from imports, although safeguard duties could help alleviate this.

Overall, the Indian steel industry is poised for a period of growth and expansion in 2025-26, driven by strong domestic demand and government support.

The growth in the Indian steel sector has been driven by the domestic availability of raw materials such as iron ore and cost- effective labour. Consequently, the steel sector has been a major contributor to Indias manufacturing output.

The management of the Company remains aligned with the emerging trends and long-term prospects of the metal industry and is committed to sustaining its position as a reliable manufacturer of high-quality steel and alloy steel castings. By continuously adopting innovative and advanced technologies, the Company strives to enhance product excellence and create lasting value for all stakeholders. Alongside this, the Company has reinforced its focus on safety by strengthening internal policies and maintaining operational stability. With improving market conditions, the Company is optimistic about continued growth and enhanced performance in the coming years.

(Source: IBEF, Ministry of steel, GOI, WSA, ET etc)

OPPORTUNITIES AND THREATS :

The Company continues to focus on manufacturing high-quality castings primarily used in the valve sector, where steady demand and technical consistency are essential. Efforts are ongoing to widen the customer network and improve responsiveness to market needs. The internal machining facility is fully functional, which has strengthened our capability to reducing delivery time lines and improving service reliability.

At the industry level, casting operations remain resource-heavy, both in terms of capital investment and skilled labour requirements. Demand visibility remains a challenge due to uneven order flows, making planning and inventory control more complex. Further, supply chain pressures, including increased transportation costs and shipment delays, continue to impact delivery cycles. The energy-intensive nature of operations adds to input cost pressures, especially with fluctuating power tariffs and fuel rates. In this environment, the Company remains focused on optimising costs, ensuring quality, and enhancing delivery performance.

RISK FACTORS:

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.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has instituted a well-defined internal control system that is commensurate with the scale and nature of its operations. These controls are designed to ensure the orderly and efficient conduct of business, including safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. The internal control framework is regularly reviewed and strengthened by the management to enhance its effectiveness. The adequacy and operating effectiveness of these internal controls are periodically evaluated through internal reviews and audits conducted by the Internal and Statutory Auditors. Significant audit findings, if any, along with action taken reports, are placed before the Audit Committee for its review and necessary directions.

LEGAL COMPLIANCE TOOL

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.

QUALITY OF PRODUCTS

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.

Certifications

01 ISO 9001:2015	Approved by TUV Nord
02 ISO 14001:2015	Approved by TUV Nord
03 ISO 45001:2018	Approved by TUV Nord
04 PED	Approved by TUV Nord
05 AD2000-WO	Approved by TUV Nord
06 Lloyds	Approved by Lloyds Marine Division
07 DNV-GL	Approved by DNV-GL
08 NORSOK	Approved by TUV Nord
09 IBR WELL KNOWN	Approved by Central Boiler Board
10 ABS	Approved by ABS foundry Facility & Process Approval

HUMAN RESOURCE AND DEVELOPMENT

Employees are one of the core strengths of the Company, and their growth and contribution play a key role in overall performance. The HR department ensures that every new employee goes through a proper induction training, where they are introduced to the Companys work culture, safety practices, and operational processes. Regular on-the-job training is also conducted to help employees improve their practical skills while working. In addition, the Company organizes various seminars, technical sessions, and soft skill workshops to ensure continuous learning and professional growth. Safety remains a top priority, and dedicated in-house and onsite training programs are conducted to keep all employees updated on safety standards and precautions.

The Company has also taken a group insurance policy for employees, reinforcing its commitment to their welfare and security. The HR team remains focused on maintaining a supportive and productive work environment and has successfully built a culture where performance and improvement are encouraged. Throughout the year, industrial relations remained smooth, respectful, and cooperative, helping maintain a stable and motivated workforce.

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 239 employees as on 31st March, 2025. The average age of 79.50% of employees was between 18-45 years as on 31st March, 2025. The company has professionals comprising the following competencies: Metallurgy, Mechanical, finance, sales, operations, quality assurance, procurement and others.

CORPORATE SOCIAL RESPONSIBILITY

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/2024/08/CSR-POLICY.pdf

EXPORTS:

Despite varying global market conditions, the Company has consistently maintained its focus on exports and continued to build its presence in international markets. In the year under review, the Company achieved a 19.77% growth in export sales over the previous year. Export revenue accounted for 40.02% of the total turnover in FY 2024-25, with supplies made to six countries: Germany, Israel, USA, UK, Spain, and Finland.

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.

CAUTIONARY STATEMENT:

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.

	For and on behalf of the Board of
Place :Shapar (Dist. Rajkot)	Gujarat Intrux Limited
	Ramankumar D. Sabhaya
	(Chairman)
	DIN- 00569058