Hindoostan Mills Ltd Management Discussions

A. BUSINESS SEGMENT - ENGINEERING:

Industry Structure and Development

The global economic environment has been uncertain, shaped by geopolitical tensions, trade disruptions, divergent growth and inflation outcomes across major economies.

ECK (Engineering Division of the Company) is one of the few integrated players in its field. The calender machine & roll segment is part of the broader machinery / capital goods industry, which supplies production equipment to manufacturing sectors. Calender Rolls are high precision components. Its end users are textile mills, paper and packaging plants, plastic film manufacturers and sheet metal industry. It requires material and expertise, precision machining and balancing technology. Opportunities of Calender Machine and Calender Roll depend upon growth of textiles, paper, packaging and technical textiles

The present geopolitical situation has led to demand and supply chain disruption worldwide. This has affected the Companys sales to Bangladesh and other countries. These factors have negatively affected performance of the Company.

ECK stands out as an integrated, technology-backed Engineering Company with strong positioning in rolls and growing presence in machines. It is one of the most established players in India for calender rolls.

Innovation remains a cornerstone of our operational philosophy. By harnessing deep technical expertise and cross-functional collaboration, the business has been able to deliver customized, high-impact solutions across diverse applications.

The Company continues its efforts to diversify in value added segments such as technical textiles and packaging industries with a focus on growing the sales of calender machines in both domestic as well as international markets.

Due to niche nature of the Companys products, it is challenging to grow revenue at a fast pace while still maintaining good profit margins. The Company is trying to grow the higher value Calender machine business to battle this challenge.

The Company has found it challenging to recruit suitable talent for its engineering business. We hope to add some key members in this current financial year.

Currently the Company is in a transition phase towards becoming a focused Engineering Company. The overall business outlook for the Engineering segment remains cautiously optimistic. As global and domestic demand continues to show signs of steady recovery, our focus remains on enhancing the share of value-added products in our portfolio.

Strategic investments in R&D, quality systems, and supply chain optimization are expected to further improve product quality and customer satisfaction. These efforts will collectively contribute to reinforcing our brand equity and expanding our market share in FY 2026-2027 and beyond.

Performance, Risks and concerns, Internal control systems and their adequacy and industrial relations are mentioned in the Directors Report.

Key ratios are mentioned inAnnexure A to Notes to financial statements, page No.114.