IMP Powers Ltd Management Discussions

Management Discussion and Analysis Report

Industry Structure and Developments

The power transformer industry in India at the heart of the countrys electrification and energy transition programs and plays a critical role in power transmission infrastructure, serving utilities, industrial customers, and infrastructure projects. The segment is influenced by government funding, DISCOM reform, renewable integration, and infrastructure development.

FY 2024-25 saw continued government focus on renewable energy, grid modernization, and electrification of rural and urban areas under schemes like Revamped Distribution Sector Scheme (RDSS), which boosted demand for high-efficiency and high-capacity transformers. However, the industry faced pressure from raw material price volatility (especially CRGO steel and copper), global supply chain disruptions, and increased competition from unorganized players.

In FY 2024-25:

• Grid modernization and green energy corridors continued under RDSS and GEC-II.

• Investments in the entire transmission system increased due to bulk power transfers both from RE & Non-RE sources, besides the strengthening work in the Inter & Intra-state Transmission Network.

• Digitalization of substations and smart monitoring systems gained traction.

• Global push for carbon neutrality created demand for eco-efficient, low-loss, and smart transformers.

IMP Powers is strategically positioned to leverage this momentum with proven capabilities and new investments.

Opportunities and Threats

• Opportunities:

• Grid Expansion in India & Abroad

• Extensive In-house demand for Transformers

• Green Energy Growth: High demand for transformers in solar, wind, and hybrid projects. We are expecting the Commissioning of our Foil Winding Machine by August 2025 enabling production of Inverter Duty Transformers (IDTs).

• Huge Manufacturing Range: Ability to manufacture up to 315 MVA/400 kV class units positions IMP among a select group of Indian manufacturers.

• Tender Participation Strategy: In Q4 FY-25 and Q1 of FY-26, IMP Powers participated in potential national and international transformer opportunities aggregating ~30,000 MVA. As of March 2025, the Company has secured firm orders worth ~1,100 MVA.

• Considering a 5% conversion ratio from these tenders we expect an order book of ~3,000 MVA in FY 2025-26.

• The same is also considering that major R&M of Manufacturing Setup is underway along with a rehaul of our Testing Setup which leaves only 6 months for reasonable scale production.

Threats:

• Price Volatility for Raw Materials

• Fluctuating Currency due to Geopolitical Challenges

• Lack of Non-fund Working Capital Limits with Banks

• Supply Shortages

• Delayed flow of funds

• Rising compliance complexity for BIS, BEE, and international testing norms.

Segment-wise or Product-wise Performance

IMP Powers operates in the design, manufacture, and servicing of a wide spectrum of power transformers up to 315 MVA/400 kV class.

Segment-wise Revenue FY 2024-25:

• Power Transformers:

• Flagship category for bulk transmission applications.

• Only existing repair jobs could get repaired as lack of final NCLT order limited our ability to participate in fresh opportunities. We got the Sale Certificate on 21^st August,2024 which only gave control of physical assets of the company.

• Repair & Retrofit Business:

• This has been the bread earner in the time when fresh orders could not be secured because of NCLT and lack of bank limits. We did jobs for DD/DNH and NEA (thorough L&T).

Outlook

The growth outlook for power transformers in India and strategic export markets is bullish, backed by:

• Government spending on T&D infrastructure expected to exceed Rs.4.5 lakh crore over the next five years.

• Renewable integration requiring IDTs, step-up transformers, and balancing infrastructure.

• Urban expansion and data center boom requiring compact, reliable high-load transformer systems.

• Export Potential in Bangladesh, Sri Lanka, Middle East, and African countries due to cost-efficiency and Make in India credentials.

With ~30,000 MVA of tenders participated in, a sustained 5% success rate may yield over 3,000 MVA of confirmed orders in FY 2025-26, giving strong visibility for future growth. We are parallelly continuing to bid for more opportunities to create a good base for FY-27.

Risks and Concerns

RISKS	EXPLANATION
Price Risk	Raw material costs are volatile and globally linked.
Execution Risk	Stringent delivery schedules can impact quality and timelines.
Client Credit Risk	We are focusing on Private Clients to cover credit risk but any surprise at the starting phase may pose huge sustainability challenge.
Supply Chain Risk	Import dependency for CRGO and insulation materials.
Ongoing R&M	Critical plant assets are undergoing Repair and Maintenance to ensure their healthiness as full fledged operations begin. Delay in their completion poses a risk of delays.
Test Setup being Revamped	Test Setup at the plant is being revamped to meet current technical requirements of our clients. Some Testing Equipments are long lead and their delayed delivery pose a risk of delay in our deliverables.
Manpower	Getting the right manpower (inhouse & contractual) in an industry thats growing at an unprecedented rate is a major concern.
ERP implementation	We plan to implement SAP to manage the entire procurement and production cycle, but challenge remains till it becomes fully live.

Internal Control Systems and Their Adequacy

The Companys internal control system ensures real-time tracking, audits, cyber security, and compliance:

• Real-time tracking of production, cost, and inventory through ERP.

• Project-based budgeting and variance reporting.

• Cyber-secured document management and digital signatures for traceability.

• Independent internal audit function monitored by the Audit Committee.

• Compliance audits covering BIS, statutory filings, and GST.

No material weaknesses were identified during internal and statutory audits in FY 2024-25.

Discussion on Financial Performance with Respect to Operational Performance

Metric	FY 2024-25	FY 2023-24	Change	Commentary
Total Income	Rs. 13.26 Cr	Rs. 2.29 Cr	Rs. 10.97 Cr	Major Interest Income
EBITDA	Rs.3.87 Cr	Rs. -14.21 Cr	Rs. 18.08 Cr	Int. Income
Capacity Utilization	NIL	NIL	N.A
PAT	Rs.-2.12 Cr	Rs. -20.18 Cr	Rs. 18.06 Cr	Non operational income

Human Resources and Industrial Relations

• Workforce Strength: 46 employees as on March 31,2025

• Launched Technical Upskilling Program across design, testing, and field services.

• Recruitments aligned with power transformer, solar and export segment expansion.

• Health & Safety trainings initiated.

• Maintained industrial harmony with zero disputes or strikes.

Initiatives planned for FY-26: Upskilling, recruitment aligned to growth areas, HSE program

Key Financial Ratios

Sr. Ratio No.	31st March 2025	31st March 2024	% variance	Reason of variance
i Debtor Turnover	0.04	0.04	-0.81%	The company was under liquidation during the previous financial year and underwent the Sale as a Corporate Debtor, which was concluded during the current financial year.
ii Inventory turnover	0.03	0.20	-85.50%	Following the management has taken over. However, full-fledged business operations are yet to commence.
iii Interest Coverage Ratio	-7.67	-96.62	-92.10%	Company Status is changed from Liquidation to Active by ROC in current year.
iv Current ratio	0.34	0.21	62.9%
v Debt-Equity ratio	-1.17	-1.18	-1.6%	Due to taking over as a going concern entity under liquidation, there was no operation, and hence there is a huge variation.
vi Operating Margin Ratio %	-67.87%	-435.81%	84.44%
vii Net Profit Margin%	-15.7%	-893.6%	-98%	However in Current Financial, there is a Interest income being non operating income which is improving ratios as compared to last year.
Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.	#	#
	# Negative hence not applicable

Ratios calculated based on Standalone basis.