Holmarc Opto-Mechatronics Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The world market for Scientific Research Equipment is growing with the advancement and integration of AI, automation and digitalization. The present Global Market size is USD51.68 billion. It is expected to grow to USD94.5 billion by 2034, a CAGR of 6.7%.

The market can be categorized into Laboratory Analytical Instruments (LAIC), Measuring and Monitoring Devices (MMD), Scientific Research Institutions and Others.

The Indian market for scientific research equipment is witnessing steady growth, driven by increasing researchanddevelopment(R&D)activities in the pharmaceutical, biotechnology, healthcare and aca -demic sectors. The growing demand for high-resolution scientific imaging solutions, high-throughput screening systems and single-cell analysis platforms for drug discovery is further expanding the market. In addition, advancements in AI-assisted imaging and OCR-enabled scanning solutions are fostering technological innovation and enhancing market opportunities. The Indian market for high-resolution scientific imaging is estimated at USD 325 million in 2026 and is projected to reach USD 610 million by 2032, growing at a compound annual growth rate (CAGR) of 9.3%.

The laboratory equipment market is being driven by the growing focus on research and development (R&D), continuous technological advancements and the increasing prevalence of chronic diseases. Governments and privateorganisationsaremakingsignificantinvestmentsinscientific research, drug discovery, vaccine development and advanced healthcare solutions, thereby increasing the demand for high-precision laboratory instruments used in sample analysis, molecular diagnostics and quality control. In India, the demand for laboratory instruments is further supported by various Government initiatives, including the ProductionLinkedIncentive(PLI)Schemeforpharmaceuticals and medical devices, the Make in India programme, the National Mission on Quantum Technologies & Applications, the Atmanirbhar Bharat initiative, the National Medical Devices Policy, 2023, and the establishment of over 2,100 Global Capability Centres (GCCs). These initiatives, coupled with increasing investments in R&D, are expected to drive sustained growth in the Indian laboratory equipment market. pharmaceutic and is increasingly emerging as a Indiahasevolvedbeyondgeneric hub for advanced drug discovery, biologics and vaccine development. As of early 2026, significant investments in emerging areas such as Cell and Gene Therapy (CGT) and Antibody-Drug Conjugates (ADCs) are driving demand for sophisticated laboratory and analytical instruments. Globally, more than 300,000 research laboratories utilise advanced laboratory equipment, including spectrometers, centrifuges, incubators, chromatography systems and microscopes. Further, with over 20,000 drug candidates currently under development worldwide, the demand for high-precision analytical instruments, testing systems and quality control equipment is expected to witness sustained growth.

Advancements in spectroscopy continue to drive innovation across scientific research and industri -al applications. Emerging technologies such asTerahertz (THz) spectroscopy, two-dimensional (2D) spectroscopy, Surface-Enhanced Raman Scattering (SERS) and Coherent Anti-Stokes Raman Scattering (CARS) are enabling highly sensitive molecular detection, real-time chemical imaging and advanced material characterization. Further, the increasing adoption extending the application of spectroscopy beyond-ysis, enhancing accessibility, efficiency and operational are expected to supportcontinued pharmaceuticals, environmental sci growthandinnovationacross -ence, materials engineering and other research-intensive sectors.

The analytical instruments market is expected to witness significant growth, driven by increasing sci - advancements and greater adoption of au entificresearchanddevelopmentactivities, -tomation. Innovationsinmicrotechnology,artificial intelligence (AI) and sustainable analytical practic -es are transforming the field of chemical analysis by improving accuracy, efficiency and productivity. Emerging technologies such as Lab-on-a-Chip (LOC) systemsarerevolutionisinganalytical testing by significantly reducing sample and reagent consumption while enabling faster analysis through minia -turised platforms with shorter diffusion distances. These advancements are expanding applications in point-of-care diagnostics, on-site environmental monitoring and field-basedanalysis, thereby creating new opportunities for growth across research, healthcare, environmental and industrial sectors.

2. SWOT ANALYSIS

STRENGTHS a. Introduction of hyperspectralimagingapplications in the defence, agri -culture and industrial sectors. b. Expansion into the private sector, particularly the pharmaceutical industry. c. Availability of a highly talented and experienced workforce. d. Continuous investment in research and development to drive innovation and product development.

WEAKNESS a. High capital investment and maintenance costs associated with advanced technologies. b. Shortage of skilled professionals to operate and maintain sophisticated systems. c. Complex and evolving regulatory and compliance requirements. d. Delayed adoption and integration of Artificial Intelligence (AI) technologies.

a. Growing numberofContractResearchOrganizations(CROs) in India, creating increased demand for scientific research equipment. research and industrial applications. b.Risingadoption of UV c. Increasingdemandforspectroscopysystemsacrosspharmaceutical, biotechnology and research sectors. d. Technological advancements and increasing investments in research and development driving demand for analytical instruments. e. Strategic focus on self-reliance and enhanced industry collaboration by DRDO, creating opportuni -equipment ties f. Increasing demand for solid breadboards, honeycomb breadboards, workstations and optical tables for research and laboratory infrastructure.

a. Geopolitical tensions, including conflicts in the Middle East, affecting global trade and supply chains. b. Imposition of tariffs and other trade restrictions impacting procurement and exports. manufoperations and c.Irregularpowersupplyaffecting d. Workforce-related challenges, including changing attitudes e. Increasing competition from low-cost products imported from China. and supply chain challenges. f.

3. PRODUCT WISE PERFORMANCE

The following table sets out the revenue generated from the Companys key product categories over the past five financial years:

The chart below presents the turnover trends of the Companys key growth-oriented product categories over the past five financial years:

4. OUTLOOK

The Company anticipates strong growth in the coming years, supported by the Government of Indias increased focus on research and development (R&D) under the "Viksit Bharat 2047" vision. The Company continues to expand its product portfolio by introducing innovative instruments such as the Hy -perspectral NIR Camera, Industrial Scale Needle-less Electrospinning Unit, and Doctor Blade Thin Film Applicator, in line with its strategy ofcontinuousproduct development. To enhance business growth and expand its market presence, the Company actively abroad. During the financial year 2025 26, the Company participated in 11 national exhibitions across India and ARABLAB.

During the year, the Company successfully manufactured and supplied a Digital Inverted Microscope to Bharat BiotechInternationalLimited,oneofIndiasleadingpharmaceutical companies. The Com -pany has an established dealer network comprising 71 dealers in India and 23 dealers overseas. Sales through the dealer network continue to improve, and the Company expects further growth in the com -ing years. The Company also received an order from ITER-India for the supply of a Vacuum Compatible X-ray Crystal Assembly, marking an important milestone in strengthening its association with the ITER programme.

5. RISK AND CONCERNS

The Company is exposed to various business risks, including rising operational costs, shortage of skilled talent and evolving regulatory and compliance requirements. The presence of unorganised local manufacturers offering low-cost products intensifies price competition and poses quality-related challenges in the market. In the academic segment, procurement decisions are often driven by affordability rather than advanced features, which may limit the adoption of high-end scientific instruments. In addition, the imposition of higher tariffs by the United States and the continuing geopolitical conflicts in the Middle East have adversely impacted the Companys export business by affecting international trade, logistics and supply chains.

6. INTERNAL CONTROL SYSTEMS

The Company has a robust internal control framework aligned with its scale of operations. Key features include:

Periodic internal audits and compliance reviews Regular reporting to the Audit Committee Segregation of duties across functions

As part of its continuous efforts to strengthen the internal control framework and enhance operational efficiency, the Company has engaged an independent Chartered Accountant to review the adequacy and effectiveness of internal control systems across various functional areas and recommend appro -priate improvements, wherever required. The Company is implementing the recommendations in a phased manner and remains committed to continuously reviewing and strengthening its internal con -trol mechanisms in line with evolving business and regulatory requirements.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE.

The Company delivered a commendable performance during the financial year 2025 26. Revenue increased by 13.12% to 4,266.07 lakhs from 3,771.22 lakhs in the previous year. Profit after tax in-creased to 408.19 lakhs as against 373.51 lakhs in the previous financial year. The Company recordedsignif -icant growth in the production and sale of Physics Laboratory Equipment (18.92%) and Bread-boards, Tabletops and Rails (28.62%). During the year, the Company entered into 11 Non-Disclosure Agreements (NDAs), including one with Merck Life KGaA, Germany for the development of an analyt-ical instrument and another with Vital Biosciences Inc., Canada for the development of an automated dispensing unit.

• Exported a Motorized Digital Inverted Microscope to Sweden.

• Supplied a Rheo-Optics Set-up to the Indian

• Supplied an Optical Microscope Segment System to IIT Guwahati.

• Supplied an Inverted Metallurgical Microscope to Amal Jyothi College of Engineering. b. Indigenous Product Innovation

• Successfully designed and developed an Industrial Scale Needle-less Electrospinning Unit in collaboration with SASTRA Deemed to be University, with support from the Ministry of Heavy Industries, Government of India.

Expanded capabilities OPTOFab, offering end-to-end solutions covering design, fabrication, alignment, testing and performance evaluation of high-precision optical components, opto-mechani -cal systems and custom optical assemblies.

Achieved significant growth in exports to France, Spain, Kenya, the UAE, Israel and China. Despite a moderate decline in exports to the United States due to higher tariffs, the Company expanded its export footprint to new markets, including Mexico, the Netherlands, South Africa, Slovakia and

Sweden. e.Tender

During the year, the Company participated in 5,860 tenders and enquiries floated by various organi-sationsacrossIndiaandsubmitted bids. The Company secured 1,974 orders, achieving a success rate of 33.69%.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED.

People at Holmarc remain the cornerstone of the Companys success and a key driver of its sustained growth. The Company is committed to fostering an inclusive, collaborative and performance-oriented work environment where employees are encouraged to contribute, innovate and grow professionally. Building a future-ready workforce continues to be a strategic priority. Through continuous learning, skill enhancement, leadership developmentandcareergrowthopportunities,the Company is strengthen -o meet ingemployeecapabilities evolving business requirements.

As on 31st March, 2026, the Company had a total workforce of 359 employees, including 60 trainees. edconstitut Women 32.3% of the permanent workforce, reflecting the Companys commitment to promoting diversity and inclusion across theorganization.

9. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR

The Financial Ratios are as follows:

The Return on Net Worth witnessed a marginal decrease of 3.87% as compared to the previous financial year, primarily due to a higher growth in the Companys net worth relative to the increase in Profit after Tax during the year. The increase in net worth reflects the Companys strengthened financial position.