H.M. Electro Mech Ltd Management Discussions

Industry Structure and Developments:

The infrastructure sector, specifically water, wastewater, and electrification, continues to see high demand driven by rapid urbanization and government initiatives. Because pumping stations and water infrastructure account for substantial portions of energy costs, theindustry is increasingly focused on integrating smart energy management and automated systems to drive efficiency

Companies within the infrastructure industry serve All Type of Project Work of Pumping Machineries for Water and Waste Water, Electrification Project of Central and State Government, Corporations, Diesel Generating Sets Projects With Government, Nationalised Bank and Industries, Instrumentation Work, Civil Work Etc.

Our company is engaged in the field of turnkey projects of supply ,installation, testing and commissioning of pumping machineries along with comprehensive operation and maintenance.

Over the years we have diversified in the field of electrification projects with Indian railways, Nationalized Banks and Municipal Corporations. Recently we have started EPC (Engineering, Procurement and Construction) field projects which involves laying cross country pipe line and civil work related to water supply projects including construction of water treatment plant (WTP), Civil Work for Pump Houses, Diesel Generating Sets, PanelRoom, Instrumentation, PLC-SCADA.

The Company has capacity to withstand in the market and face the stiff competition prevailing in the Infrastructure business market.

Opportunities and Threats:

Opportunities:

The Company is optimistic about its growth prospect us in the future.The Company has been concentrating on building brand image in the market.

Threats: The sector remains vulnerable to bureaucratic delays, delayed regulatory approvals, and fragmented governance frameworks which can affect project cash flows.Additionally, milestone-based payments require rigorous working capital managemets

The Company is facing stiff competition from various companies in domestic market.However, Company is well positioned to leverage the opportunities to manage the challenges that have arisen in domestic market.

Outlook:

The company has achieved a great reputation in this field within a short span of time with its strong & effective management and in time project execution. It under scores our commitment to delivering high quality, impactful projects that meets diverse needs and drive progress.

Our Promoters are the guiding force behind the success of our company. We believe the stability of our management team and the industry experience brought on by our individual Promoters will enable us to continue to take advantage of future market opportunities and expand into newer markets.

Risk and Concerns:

Management continues to employ a proactive approach to mitigate industry risks by diversifying its client base across both state/national government bodies and private industries. Emphasis is placed on robust supply-chain tracking, stringent safety standards during electrification, and regular preventive maintenance contracts toensure stable cash inflows.

Company is facing competition from various small-scale manufacturers and administrative costs are also increasing day by day. But Company is equipped to meet sthe challenges by better marketing tactics and effective management of cost andexpenses.

Internal Control Systems and their adequacy:

The Company has a robust and adequate system of internal controls commensurate with the size, scale, and complexity of its operations. The internal controls are designed to ensurethat all assets are safeguarded and protected against loss from unauthorized use ordisposition, and that transactions are authorized, recorded, and reported correctly.

The company has well-defined documented policy guidelines, an authority matrix, and strict Standard Operating Procedures tailored for EPC, civil construction, and electrification projects. The Audit Committee regularly reviews the internal audit reports and monitors the implementation of corrective actions, risk management, and compliance with regulatory guidelines and government

Discussion on financial performance with respect to operational performance:

With the consistent performance and dedication, the Company has achieved incremental growth in profit as well as shareholders wealth during Financial Year2025-26.Not only,the Company was able to continue the momentum of earning profit but has shown outstanding performance by reaching the hike in profits of Rs. 974.93 Lakhs as compared to Rs. 835.07Lakhs in the previous financial year, showcasing increase in Net Profit by 16.74% as compared to previous year.

The company has recorded total revenue from Operations of Rs.13,221.01 Lakhs for Financial Year2025-26 as against Rs. 12,166.69 Lakhs for Financial Year 2024-25,Showcasing increase in total revenue by 8.67%as compared to previous year.

Material Developments in Human Resources/Industrial Relations:

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The industry is Technical industry, considering this aspect we continue to build our team with high quality talent. The Company is putting thrust on providing training both in-house and outside.The key personnel are technically qualified and fully trained to runsites.

The Company believes that people are the backbone to the company. The Company has merit bases culture and provides a conducive workplace for all. Occupational health and safety of both the permanent and contractual workforce is ensured at all times.

Industrial relations are good and harmonious.The Company recognizes the importance and contribution of human resources for its continued growth and development. The Company maintains cordial & harmonious relation with its employees.

Company is incompliance with statutory compliances like Provident Fund, ESIC, Professional tax, Annual Return, Labour Welfare Fund.

Details of Key Financial Ratios are given below:

Ratios	2025-26	2024-25	Change
Debtors Turnover	2.50	3.53	-28.99 %
Inventory Turnover	5.39	5.86	-7.99%
Interest Service Coverage Ratio	3.25	2.82	15.08%
Current Ratio	2.15	2.47	-12.84%
Debt Equity Ratio	0.20	0.12	69.40%
Operating Profit Margin %	18.34%	22.43%	-18.24%
Net Profit Margin %	7.37%	6.86%	7.44%
Return on Net Worth %	0.13 %	0.13%	1.62%

 

Place:Ahmedabad	BY ORDER OF THE BOARD
Date: 03.09.2026	FOR H.M.ELECTRO MECH LIMITED.
	SD/-
REGISTERED OFFICE	Dipak Padmakant Pandya
305, Ashram Avenue,	Chairman and Managing director
B/H. Kochrab Ashram, Paldi. Ahmedabad,	(DIN:02188199)
Gujarat,India,380006