Indo-MIM Ltd Management Discussions

REPORT

ANNEXURE-3

• INTRODUCTION:

The Company was formed in 1996 and is the largest producer of Metal Injection Molded (MIM) Parts all over the World. At present, the Company is operating its MIM manufacturing operations from Bengaluru, Karnataka and Investment Casting manufacturing operations from Tirupati, Andhra Pradesh. The manufacturing operations of the company has just now commenced in the new plant of the company located at Chennai , Tamil Nadu.

The Companys wholly owned subsidiary M/s INDO-MIM INC is running a MIM manufacturing unit in San Antonio, Texas. USA. It also formed a step-down Associate Company in Mexico in which 49% of ownership is held by INDO-MIM INC to take care of post manufacturing secondary operations.

The company has acquired M/s TRIAX Industries LLC, USA during FY 21 which is involved in the business of manufacture of parts and components using casting and machining.

The company has also acquired M/s Conway Marsh Garrett Technologies Limited, UK in the month of June, 2023 which is involved in the business of manufacture of components using MIM technology.

The company recently acquired M/s Phoenix DeVentures II Inc, USA in the month of May, 2025 which is involved in the business of manufacture of medical components using MIM technology.

• AN OVERVIEW OF PERFORMANCE:

• The FY 25 was a year of decent growth for the company as the topline of the company grew up by 16% over FY 24.

• The PBT of the company went up in FY 25 by 29% over FY 24.

• Less than proportionate increase in the exp such as Employee costs, Admin expenses ensured that the PBT before exceptional items was up by 32% in FY 25 Vs FY 24.

• Post exceptional items the PBT was up by 29% in FY 25 Vs FY 24.

• Increased PBT also ensured a prorate increase in PAT.

• RESEARCH AND DEVELOPMENT:

The companys focus on R & D is focused on material development and process development with specific focus on process improvement, cost reduction, Supplier diversification, supplier substitutions, and absorption of new technologies.

• RISK MANAGEMENT:

This is an area in which the company has been taking conscious steps to mitigate the impact of risks. The company has identified the risks in the following areas and has put up a risk mitigation system commensurate with the risk:

• Credit Risk - The Company has put up a very effective credit control policy and the same is being implemented very rigorously. The receivables are reviewed twice in a month (once in each fortnight) and this has helped us identify accounts which would come under stress ahead of time. This helps us to initiate corrective action well before it is too late. Since we happen to be a sole supplier to our customers in most cases and since we have been working with our customers for years now, we have been able to impress upon the customers the importance of honoring the commitments from either side. Continued follow-up on regular basis ensures that the payments happen with minimal delay.

• Currency Risk - Very significant portion of our revenue comes from exports and hence managing the currency risk is a very important requirement of our business. All the raw materials, most capital goods and spares that we use are imported from outside the country and hence the company has a natural hedge for the export receivables in the form of import payables. Hence, the company uses plain forwards to cover up to about 50% of its net currency exposure based on the current market realities in the currency market. During FY 25 our coverage was less than 50% as we expected Rupee to depreciate further, and our expectation came true. Being a USD surplus company, we stand to gain when Rupee depreciates.

• Raw Material Price Risk - The Company imports all its Raw materials. There are two risks associated with the imported Raw Materials. The first is currency risk which is covered by the currency risk management and the next is the price risk. During the year under review the Raw Material price per Kilogram went up marginally. But we did not experience any major price shock on the Raw Material front.

• Natural Calamities Risk - The Company has insured the machinery, stock as well as the premises against the fire and other natural calamities. The Company has also covered the stock in transit by way marine insurance policy. The coverage is considered adequate considering the risk potential. It may be pertinent to note that the facilities of the company are not located in the identified natural calamity zone.

• Business continuity Risk - IT-The Company runs on its information technology systems. A failure or non-availability of the IT systems will significantly affect the performance of the Company and hence this is a major risk which the company has to cover. The company has put up a policy and practice of daily on-site back-up of all its data at a defined time of the day and the said back up information is stored in the premises of the company. While this practice will cover the data corruption risk it does not cover the risk associated with the systems not being accessible due to whatever reasons. The company has put up an offsite

back-up server which will ensure that the company can continue to use its information systems seamlessly even when the primary data storage of the company becomes unavailable due to any reason.

• The availability of the IT systems could also be affected due to hacking by outside unlawful players. While the company has put up sufficient security and fire wall to protect its systems, the company has also made a start in securing a cyber-risk insurance policy for the company which will take care of an unfortunate eventuality of a possible breach of the security systems of the company.

• Despite the decent IT security system in the company, there was a breach in the fire wall system of the company due to a ransomware attack in August 2025. While there was no loss of customer data, the company had to go through reconstruction of its systems as per the established security protocol in such attacks. The systems are back in full operation now .

• STRENGTHS, WEAKNESS, OPPORTUNITIES & THREATS:

• Strength: The strength of the Company is its speed - Speed in quote , Sample submission, Production and delivery . High Speed coupled with Superior Quality is a very big differentiator in the marketplace. We submit our quote against an RFQ even before a competitor would ask for a clarification on the drawings. This speed of delivery acts as a catalyst for the business growth and helps us maintain our leadership position in the industry. To help us achieve this we create capacity ahead of time and maintain sufficient spare capacity to address the surge orders if any from the customer.

• Weakness: The Companys business is mostly foreign currency denominated and hence, the companys financials are exposed to the currency risk. The company has a natural hedge in the form of Raw material imports and capital goods imports. The forex cover on the USD front in FY 25 was 55% of the receipts and on the Euro front was 82% of the receipts. During FY 26 the company is largely unhedged as we expect the Rupee to weaken during the year. Till now our expectations have come true.

• Opportunities: The stress of the Indian government to improve the manufacturing companies with an eye to create a manufacturing hub for the entire world provides an excellent growth opportunity for the company. We believe that the continued slow growth of the world economy would push many western customers to look for cost effective solutions from all over the world which provides an opportunity for the company to grow. The companys focus on being in the market at place where the customer wants has helped the company get into Investment casting, Machining and 3D printing. This approach of the company too will help it open new doors of market which are normally not available for an exclusive MIM manufacturer.

• Threat: The competition from other countries , players and technologies is the biggest threat for any company . The company continues its focus on productivity which will keep it ahead of its competition. The size of the company also gives the economies of scale to the company which the newer companies will find it difficult to match. This should help us meet the challenge from the present as well as the potential competition both within as well as outside the country effectively. The large push by USA towards localization and imposition of tariff on Indian made products imported into USA is a new emerging threat.

While India can be happy that most countries do suffer tariff still such steep tariff can alter the byer behavior in the long run. We are monitoring the situation closely and would take appropriate steps to minimize the negative impact of this tariff by a suitable combination of Domestic production in USA along with a production in India .

• HUMAN RESOURCES MANAGEMENT & DEVELOPMENT:

The company continues to recruit freshers and train them on the job as this is the only way in which a rapidly growing company in a relatively new technology can address its manpower needs. Further to keep the employees current and up to date on various aspects of the technology the company spends lot of resources in training the employees on continuous basis so that the employees of the company are able to deliver solutions which are way beyond any other competitor can do.

The company continues to enjoy a very moderate labor turnover over years including the year under review. We will continue to focus on this aspect of our business in years to come too as we feel this is the only way to sustain and improve the customer service.

For and on behalf of the Board of Directors
Krishna Chivukula	Krishna Chivukula Jr.
Chairman and	Whole time Director & CEO
Managing Director (DIN 01625119)	(DIN 02483835)
Date: 28-8-2025	Date: 28-8-2025
Place: Warsaw, Poland	Place: Florida, USA