Gurunanak Agriculture India Ltd Management Discussions

For the Financial Year ended 31 March 2026 (FY2025-26)

Annexure - 6

Gurunanak Agriculture India Limited was incorporated in 2010 and manufactures a range of agricultural machinery ? paddy, groundnut, wheat, maize and multi-crop threshers, harvesters, reapers, rotavators and cultivators ? from its facility at Ahiwara, District Durg, Chhattisgarh. The Company operates on 4.08 hectares of land at Durg, comprising approximately 1.16 lakh sq. ft. of manufacturing space and 0.98 lakh sq. ft. of storage, with a further 2.25 lakh sq. ft. held expansion-ready.

The Company sells through a dealer network of 48 dealers spread across seven states ? Chhattisgarh, Odisha, Madhya Pradesh, Karnataka, Maharashtra, Punjab and Andhra Pradesh ? supplemented by co-branded partnerships and direct factory sales. Products are also exported to Bhutan, Nepal, Sri Lanka, Ghana, Nigeria, South Africa, Sudan and Uganda.

In September 2025 the Company completed its initial public offering of ?28.80 and got listed on the NSE Emerge platform.

The year was, however, one of two very distinct halves. The first half of FY2025-26 remained weak. Revenue from operations for H1FY26 was ?1,609.78 lakh against ?2,456.15 lakh in H1FY25, a decline of 34.5% year-on-year, and profit after tax was ?208.67 lakh against ?342.30 lakh, a decline of 39.0%. This weakness occurred against a farm-equipment market that was, at the same time, expanding strongly ? the Indian tractor industry recorded wholesale dispatches of 11,60,231 units in FY26, up 23.47% over FY25 and the first time volumes crossed one million in a fiscal year. Management therefore treats the H1 shortfall as a Company-specific and season-timing issue rather than a market issue, and Section 6 of this report sets out its causes and the corrective actions taken.

2.1 The agricultural backdrop in FY2025-26

The year under review was an exceptionally strong one for Indian agriculture. Foodgrain production for 2025-26 was estimated at a record 376.56 million tonnes, an increase of about 18.8 million tonnes over the previous year, with rice at 154.02 million tonnes, wheat at 120.66 million tonnes and maize at 55.09 million tonnes ? the highest levels recorded for each of these crops. A record harvest is the single most direct demand signal for the Companys product categories: more grain in the field means more harvesting, threshing and post-harvest hours to be mechanised.

The second decisive development of the year was fiscal. With effect from 22 September 2025, Goods and Services T ax on tractors, farm machinery and implements, and on harvesters and threshers, was reduced from 12% to 5%, while tyres and parts moved from 18% to 5%. For tractors this translated into a reduction of ?40,000 to ?60,000 per unit in ex-showroom prices. The reform also corrected a long-standing inverted duty structure that penalised domestic manufacturers of farm machinery, whose input taxes exceeded output taxes.

The combined effect was visible in industry volumes. FY26 tractor retail registrations reached 10,50,077 units against 8,82,825 units in FY25, supported by above-normal rainfall, an agriculture ministry allocation of ^ 1,40,5 61 crore and disbursement of approximately ?78,000 crore under PM-KISAN. Roughly 95% of tractors sold in India are bought on credit, so financing availability remains a swing factor for the wider equipment market.

2.2 Size and growth of the market the Company serves

Indias agricultural equipment market was estimated at INR 1.34 trillion in 2025 and is projected to reach INR 2.72 trillion by 2034, a CAGR of 7.95% over 2026-2034. Within that, tractors account for 38.7% of the market, while harvesters account for 14.6% and are the fastest-growing category at a CAGR of approximately 9.6% ? that is, harvesters are growing materially faster than the equipment market as a whole.

Narrowing to the Companys core segment, the India combine harvester market was valued at USD 275.4 million in 2025, is estimated at USD 290.94 million in 2026, and is forecast to reach USD 382.76 million by 2031, a CAGR of 5.64% over 2026- 2031.

India combine harvester market ? structure (2025)	Share / Growth	Reference
Self-propelled harvesters (share of type)	55.68%	S5
Wheel-drive units (share of drive mechanism)	60.10%	S5
Track-drive machines (forecast CAGR to 2031)	8.05%	S5
150-300 HP band (share by power rating)	47.12%	S5
Rice harvesting (share by crop)	45.08%	S5
Corn harvesting (forecast CAGR)	6.72%	S5
Market value 2025 ^ 2031	USD 275.4 mn ^ USD 382.76 mn	S5

Two structural facts in this table matter directly to Gurunanak Agriculture: rice is the single largest crop application at 45.08% of the market, and track- drive machines are the fastest-growing drive mechanism at 8.05% CAGR. The Companys TCH track-type harvesters are built for exactly this intersection ? paddy, in the eastern belt.

2.3 The mechanisation gap ? the real size of the opportunity

Indias overall farm mechanisation rate is approximately 47%, against 60% or more in comparable agricultural economies. The gap is not uniform: mechanisation is 69% in wheat, 50% in rice, 45% in maize, 41% in pulses, 38% in oilseeds, 35% in cotton and 33% in millets and sugarcane.

By operation, harvesting and threshing are 60-70% mechanised for wheat and rice ? but under 5% for all other crops.

Average farm power availability was 2.54 kW per hectare in 2019-20, against a national target of 4.0 kW per hectare by 2030.

The operational tractor population reached 7.5 million by 2019-20, while combine harvester numbers are placed at about 0.05 million units and power tillers at 0.50 million.

The share of farmers in the total workforce fell from 59.1% in 1991 to 54.6% in 2011 and 39.4% in 2021 ? mechanisation is no longer a productivity choice, it is a labour-substitution necessity.

The commercial reading of these numbers is straightforward. A combine harvester population of roughly 0.05 million against a tractor population of 7.5 million means the harvester is at a far earlier point on its adoption curve than the tractor. That is why harvesters are the fastest-growing equipment category in the country, and it is why the Company has chosen to concentrate its incremental capital on harvesters rather than on lower-value implement categories.

2.4 Policy and subsidy architecture

Demand for the Companys products is meaningfully subsidy-linked. Under the Sub-Mission on Agricultural Mechanization (SMAM), individual farmers receive financial assistance of 40% to 50% of machine cost depending on farmer category, while cooperative societies, farmer producer organisations and self-help groups establishing Custom Hiring Centres and Farm Machinery Banks receive up to 80% of project cost for projects costing up to ?30 lakh. Custom Hiring Centres established under the mechanisation programme number over 26,662.

Custom Hiring Centres matter disproportionately to harvester demand. A combine harvester is too expensive for a smallholder to own but entirely viable for a hiring centre operating across a village cluster, and the CHC operator ? who earns per acre harvested

? is far more sensitive to machine uptime and parts availability than an individual buyer would be. This is the customer for whom service quality, not sticker price, is the purchase criterion.

During the year the Companys harvesters and threshers were approved for subsidy eligibility on iKhedut, the Government of Gujarats single-window agricultural subsidy portal, through which Gujarat farmers apply for state and central subsidies. Inclusion on the approved-machinery list places the Companys products directly in front of a large registered farmer base and materially reduces the effective cost of ownership.

3.1 India exports tractors ? and imports machinery

The trade data for April 2024 to March 2025 describes an Indian farm machinery sector that is world-class in tractors and import- dependent almost everywhere else. India exported tractors worth ?9,31,768 lakh (1,06,488 units) in the year, against tractor imports of only ?4,842 lakh (3,100 units) ? a surplus of roughly 190 times. In the same year, however, India imported farm machinery worth ?3,09,321 lakh, post-harvest machinery worth ?2,19,570 lakh and farm machinery parts worth ?1,91,125 lakh, against farm machinery exports of only ^ 1,12,986 lakh and post-harvest machinery exports of ?56,270 lakh.

Category (April 2024 - March 2025)	Exports (? lakh)	Imports (? lakh)	Position
Tractors	9,31,768	4,842	Large surplus
Farm machinery	1,12,986	3,09,321	Deficit
Farm machinery parts	1,88,905	1,91,125	Near balance
Post-harvest machinery	56,270	2,19,570	Deficit
Post-harvest machinery parts	34,933	20,013	Surplus

Source: Indian Society of Agricultural Engineers, Analysis of Export and Import of Agricultural Machinery (2024-25).

The deficit in farm machinery and post-harvest machinery is precisely the space in which Gurunanak Agriculture operates.

Every rupee of that import bill is, in principle, addressable by a competent domestic manufacturer.

3.2 The Chinese export push

China is the worlds second-largest agricultural machinery producer, with annual manufacturing output valued at approximately USD 35 billion, and the worlds second-largest exporter of agricultural machinery at approximately USD 10.2 billion annually. China has also become the worlds largest combine harvester market in unit volume terms, which gives its manufacturers a domestic scale base that few competitors can match.

That scale is now being pushed outward aggressively. Chinas agricultural machinery exports rose 32.3% year-on-year to 67.4 billion yuan in 2025, with rice harvesters specifically named among the product categories driving the surge and emerging markets ? Southeast Asia, Africa, Latin America ? named as the priority destinations. Indias own recorded imports from China in the “other agricultural or poultry-keeping machinery” category stood at USD 55.07 million in calendar 2025.

Chinese machines compete in the Indian market chiefly on acquisition price. Their crawler and track-type paddy harvesters are positioned below comparable domestic and Japanese machines, and are frequently imported in knocked-down or semi-assembled form and badged locally. For a farmer or hiring-centre operator comparing quotations at the point of purchase, the imported machine will often look like the rational choice.

3.3 Where the imported proposition breaks: service, parts and uptime

The weakness of the imported proposition is not the machine. It is everything that has to happen after the machine is sold. Independent industry analysis of the Chinese manufacturers international expansion concluded that “establishing dense, country-level dealer networks remains the largest hurdle”, and identified parts availability, dealer proximity and uptime guarantees as the specific barriers standing between Chinese equipment and durable market share.

The Chinese industry itself does not dispute this. Reporting on the 2025 export surge quotes the industry associations own expectation that manufacturers must expand “with upgraded products and strengthened spare parts networks, training systems and after-sales services”, and quotes manufacturers describing the building of overseas service networks and the training of local technicians as work still in progress.

In Indian harvesting conditions this gap is not a minor inconvenience; it is decisive. The harvesting window for paddy in a given district is a matter of days, not months. A machine that is standing idle in the middle of that window because a part must be sourced from an overseas supplier has not merely inconvenienced its owner ? it has cost a custom-hiring operator an entire seasons earning capacity and cost the farmers in that cluster their crop timing. On a per-acre-harvested basis, an imported machine bought at a 10-15% discount that loses a week of the season is a materially worse economic outcome than a domestic machine that runs.

Managements conclusion is therefore that the Indian harvester market is not primarily a price contest. It is a service and uptime contest that is currently being fought with price as a proxy ? and that the structural advantage in a service contest sits with a manufacturer that builds the machine in India, holds the parts in India, and can put a trained technician in the field within the harvesting window.

3.4 The regulatory and localisation shift

Two policy movements are narrowing the imported machines advantage. First, the September 2025 GST reform cut the rate on harvesters and threshers from 12% to 5% and corrected the inverted duty structure that had disadvantaged domestic manufacturers on their input taxes ? a change that benefits an Indian manufacturer proportionately more than an importer, because the importers cost base sits largely outside the Indian GST chain.

Second, road-legal self-propelled machines must clear Regional Transport Office testing and obtain certification under the Central Motor Vehicles Rules. The Company has completed RTO testing of its tyre-type harvester and is awaiting the CMVR certification report, which is a time-intensive process. Certification of this kind is a barrier to entry that rewards manufacturers with an established Indian engineering and compliance capability, and it is not a barrier that can be cleared by an importer through pricing.

4.1 In-house manufacturing as the strategic core

The Companys strategic answer to the competitive picture set out above is deliberately narrow and deliberately hard to copy: build the complete harvester in India, in-house, and wrap it in a service capability that an importer structurally cannot replicate.

The Company manufactures its harvesters, threshers, reapers, rotavators and cultivators at its own facility at Ahiwara, District Durg ? 1.16 lakh sq. ft. of manufacturing space on a 4.08 hectare site, with 0.98 lakh sq. ft. of storage and 2.25 lakh sq. ft. held expansion-ready. In-house manufacture of the machine, rather than assembly of imported kits, delivers three things that assembly cannot: control of the bill of materials and therefore of cost; the engineering knowledge to modify the machine for Indian field conditions; and, most importantly, the ability to make a spare part rather than order one.

Following the IPO, the Company is establishing a new harvester manufacturing unit funded out of issue proceeds. Post-expansion targeted annual capacity is 300 harvesters, 4,000 threshers and 4,000 other farm machines.

4.2 Service as the product

Managements operating conviction is that in the harvester category the service network is not a support function attached to the product ? it is a component of the product, and the component on which repeat purchase and dealer loyalty actually turn. The Companys service approach is built on four elements:

Domestic parts availability. Because the machine is made in-house, critical wear and replacement parts are manufactured and stocked within India rather than sourced across a border and a customs queue.

Season-aligned readiness. Dispatches and service deployment follow Indias harvesting cycle, which progresses from east to west; the Company plans deliveries into Chhattisgarh and Odisha to follow the completion of the eastern-belt phase.

Dealer capability, not just dealer count. The network of 48 dealers across seven states is being deepened with trained service manpower rather than widened indiscriminately, on the view that an untrained dealer in a new state destroys more brand value in one season than it adds in sales.

Proximity to the paddy belt. Manufacturing in Chhattisgarh places the Company inside the eastern paddy belt it primarily serves, shortening both machine and part logistics in the weeks when they matter.

4.3 Product development ? the tyre-type harvester

The Company is preparing to introduce a tyre-type harvester, with launch targeted from October. Research and development along with product testing are in progress; testing at the Regional Transport Office has been completed, and the Company is awaiting the CMVR certification report. The commercial launch timeline remains subject to completion of this certification.

The addition of a wheeled variant alongside the existing track-type range is a direct response to market structure: wheel-drive units represent 60.10% of the Indian combine harvester market by drive mechanism, while track-drive machines, although the faster-growing sub-segment at 8.05% CAGR, remain the smaller base. A portfolio covering both drive types addresses field conditions and customer preferences that a single-format range cannot.

4.4 Market access and distribution

Gujarat: harvesters and threshers approved for subsidy eligibility on the iKhedut portal, opening a new addressable market with subsidy-backed pricing.

West Bengal: deliveries of TCH harvesters commenced to a newly appointed dealer, expanding the Companys presence in the eastern market; management is also confident of strong thresher deliveries in the state.

Chhattisgarh and Odisha: deliveries scheduled to follow the eastern-belt phase in line with the harvest cycle.

Near-term visibility: approximately 25 harvesters expected to be sold in the month of October, based on current visibility of dealer demand. These expectations reflect managements present assessment and are not guidance.

4.5 Exports

The Company exports to Bhutan, Nepal, Sri Lanka, Ghana, Nigeria, South Africa, Sudan and Uganda. These are markets in which Chinese manufacturers are also expanding aggressively ? Africa and Southeast Asia are explicitly named as priority destinations in the Chinese export push ? and in which the same service argument applies with even greater force, because parts logistics into an African or Himalayan market are harder still. Management regards exports as a long-term optionality on the Companys domestic service and manufacturing capability rather than as a near-term volume driver.

Opportunities	Threats
Harvesters are the fastest-growing farm equipment category in India at 9.6% CAGR, on a 14.6% share of a INR 1.34 trillion market.	Below-normal monsoon forecast for 2026 at 90% of LPA with an 84% probability of below-normal or deficient rainfall.
Combine harvester population of 0.05 million against 7.5 million tractors ? an early adoption curve.	Price-led competition from Chinese-origin crawler and track harvesters; Chinas farm machinery exports up 32.3% to ?67.4 billion in 2025.
	Indias existing farm machinery import bill of ?3,09,321 lakh and post- harvest machinery imports of ?2,19,570 lakh (FY25).
Harvesting mechanisation is under 5% outside wheat and rice.	Severe seasonality: revenue concentrated in the harvest window, as H1FY26 demonstrated.
GST on harvesters and threshers cut from 12% to 5%, and inverted duty corrected in favour of domestic manufacture.	Elongating collection cycle ? receivable turnover fell from 9.53x in FY24 to 6.87x in FY25.
SMAM subsidy of 40-50% for individuals and up to 80% for CHC projects up to ?30 lakh; 26,662+ Custom Hiring Centres.	CMVR certification timelines outside the Companys control, deferring the tyre-type harvester launch.
Record 2025-26 foodgrain output of 376.56 million tonnes lifting farmer cash flows.	Dependence on the continuation of subsidy schemes, and on rural credit 95% of tractors in India are bought on credit.
iKhedut approval opening the Gujarat market.

Monsoon and weather. The India Meteorological Departments updated long range forecast placed 2026 southwest monsoon rainfall at 90% of the Long Period Average with a model error of ?4%, with an 84% probability of below-normal or deficient rainfall and a 60% probability of deficient rainfall, and noted ENSO conditions transitioning towards El Nino. A weak monsoon compresses farmer cash flows and defers discretionary equipment purchase.

Seasonality and concentration. Revenue is concentrated in the harvesting window. H1FY26 revenue of ?1,609.78 lakh against H2FY25 revenue of ?1,929.50 lakh illustrates how sharply performance can vary between halves.

Import-led price competition. Chinese agricultural machinery exports grew 32.3% to ?67.4 billion in 2025 with emerging markets as the stated priority, against an existing Indian farm machinery import bill of ?3,09,321 lakh in FY25.

Receivables and channel credit. Receivable turnover declined from 9.53x (FY24) to 6.87x (FY25).

Regulatory and certification timelines. The tyre-type harvester launch remains subject to receipt of the CMVR certification report.

Subsidy dependence. Demand is materially linked to SMAM assistance of 40-50% for individual farmers and up to 80% for CHC projects, and to state portals such as iKhedut. Any change in scheme eligibility or budgetary allocation would affect off- take.

Financing availability. Approximately 95% of tractors sold in India are bought on credit; equipment demand is consequently sensitive to rural credit conditions and interest rates.

Input cost volatility. Cost of materials consumed represented 61.6% of H1FY26 revenue; steel and component price movements pass through quickly to gross margin.

The Company maintains internal control systems commensurate with the size, scale and complexity of its operations, covering authorisation of transactions, safeguarding of assets, prevention and detection of fraud and error, accuracy and completeness of accounting records, and timely preparation of reliable financial information. Following listing on the NSE Emerge platform in September 2025, the Company has strengthened its compliance and reporting framework to meet the requirements applicable to a listed entity. The internal control framework is reviewed periodically, and observations arising from internal audit are placed before the Audit Committee along with managements response and the status of remedial action.

Employee benefits expense was ?178.81 lakh in H1FY26 against ?252.51 lakh in H1FY25, and ?492.27 lakh in FY25 against ?492.40 lakh in FY24. The Companys manufacturing model depends on retained shop-floor engineering skill, and its service strategy depends on trained field technicians; both are treated as capability investments rather than as discretionary cost. Industrial relations during the year under review remained cordial.

The Company enters FY2026-27 with a stronger balance sheet, a listed currency, an expanding capacity base and two new routes to market ? Gujarat through iKhedut subsidy eligibility and West Bengal through a newly appointed dealer. Against that, the season ahead carries a genuine weather risk: the IMD has forecast 2026 monsoon rainfall at 90% of the Long Period Average with an 84% probability of below-normal or deficient rainfall and ENSO conditions transitioning towards El Nino.

Managements priorities for the year ahead are, in order: converting the new harvester capacity into dispatched volume rather than into inventory; completing CMVR certification and launching the tyre-type harvester; tightening the collection cycle; and deepening service capability in the dealer network so that the Company competes on uptime rather than on price. The structural case remains intact ? harvesters are the fastest-growing farm equipment category in India at approximately 9.6% CAGR, harvesting mechanisation outside wheat and rice remains below 5%, and the GST reduction from 12% to 5% has permanently improved the economics of buying an Indian-made harvester.

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include monsoon and weather conditions, crop output and prices, changes in government subsidy schemes and eligibility criteria, regulatory and certification timelines including CMVR approval, availability and cost of rural credit, dealer performance, input commodity prices, import competition, and general economic conditions in India and in the markets to which the Company exports. Expectations regarding future volumes referred to in this report reflect managements present assessment and do not constitute guidance. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Third-party market data reproduced in this report has been sourced from the publications listed in the “Sources and References” section; the Company has not independently verified such data and does not accept responsibility for its accuracy.

The business figures quoted in this report are drawn from the sources set out below. Company financial data is taken from the Companys own financial statements; all other data is taken from the published third-party and government sources listed.

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https://www.business-standard.com/content/press-releases-ani/gurunanak-agriculture-india-to-launch-inr-28-8-cr-ipo-on-nse-emerge- 125092200413_1.html

2. IMARC Group, “India Agricultural (Farm) Equipment Market: Size, Share and Forecast 2026-2034”. https://www.imarcgroup.com/farm-agricultural- equipments-industry-india

3. Mordor Intelligence, “India Combine Harvester Market ? Size, Share and Growth Trends (2026-2031)”. https://www.mordorintelligence.com/industry- reports/india-combine-harvester-market

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5. Press Information Bureau, Government of India, “GST Reforms 2025: Relief for Common Man, Boost for Business”, September 2025.

https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/sep/doc202594628401.pdf

6. Autocar Professional, “The Million-Unit Milestone: FY26 Redefines Indias Tractor Market”, April 2026. https://www.autocarpro.in/analysis/the-million- unit-milestone-fy26-redefines-indias-tractor-market-132056

7. Ministry of Agriculture and Farmers Welfare, Government of India ? foodgrain production estimates for 2025-26, announced 29 May 2026, as reported by Global Agriculture. https://www.global-agriculture.com/india-region/india-sets-new-food-grain-production-record-at-376-56-million-tonnes-in- 2025-26/

8. India Meteorological Department / Press Information Bureau, “Updated Long Range Forecast for the Southwest Monsoon Seasonal Rainfall during June-

September 2026”, 29 May 2026. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2266479

9. Indian Society of Agricultural Engineers, “Analysis of Export and Import of Agricultural Machinery (2024-25)”, Agricultural Engineering Today.

https://pub.isae.in/index.php/aet/article/view/3104

10. UN COMTRADE database, as compiled by Trading Economics ? “India Imports from China of Other Agricultural or Poultry-keeping Machinery”, calendar year 2025. https://tradingeconomics.com/india/imports/china/agricultural-poultry-equip-incubators

11. Xinhua, “Economic Watch: Chinas farm machinery manufacturers expand global reach amid exports surge”, 16 April 2026 (citing China customs data).

https://english.news.cn/20260416/a0dc5109f8584949af637e0bc122c296/c.html

12. Maquinac, “China Strengthens Position as a Global Agricultural Machinery Powerhouse”. https://maquinac.com/english/china-strengthens-position-as-a- global-agricultural-machinery-powerhouse/

13. AgInsights, “After Agritechnica 2025: How Chinese and Indian Manufacturers Redefined the Competitive Geometry of the Global Farm Machinery

Market”, 2025. https://www.aginsights.blog/after-agritechnica-2025-how-chinese-and-indian-manufacturers-redefined-the-competitive-geometry-of- the-global-farm-machinery-market/

14. Press Information Bureau / Ministry of Agriculture and Farmers Welfare, Government of India ? Sub-Mission on Agricultural Mechanization

(SMAM): pattern of assistance and Custom Hiring Centre norms. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2082790

15. Government of Gujarat, iKhedut Portal ? official agricultural subsidy portal. https://ikhedut.guiarat.gov.in

	FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
DATE: 07/09/2026	(HARJEET SINGH)	(JASPREET KAUR)
PLACE: DURG (C.G.)	MANAGING DIRECTOR	WHOLE-TIME DIRECTOR
	DIN- 02241438	DIN- 09615927