Inox India Ltd Management Discussions

Management Discussion & Analysis

Global Outlook

The global economy is navigating a delicate and uncertain phase. This can largely be attributed to the escalating concerns over the rising tariff uncertainty. The recent increase in US tariffs, coupled with growing policy uncertainty, has introduced significant risks to global inflation and dampened both business confidence and investor sentiment. Following a remarkably resilient CY 2024 characterised by stability across developed and emerging markets and robust private consumption, CY 2025 has commenced on a more cautious footing. This shift in tone is largely attributable to apprehensions surrounding the trade and economic policies of the Trump administration, which have raised widespread concerns about their long-term implications for global economic momentum and the overall investment climate.

The increasingly volatile geopolitical environment has prompted several multilateral institutions to revise their global growth projections downward. The Organisation for Economic Cooperation and Development (OECD)¹ has lowered its forecast for global GDP growth in CY 2025 to 3.1%, down from its earlier estimate of 3.3%. For CY 2026, the OECD currently projects growth at 3.0%, compared to its previous forecast of 3.3%. Similarly, Fitch Ratings² has reduced its global growth outlook for CY 2025 from 2.6% to 2.3%, citing heightened macroeconomic uncertainty and the adverse impact of rising trade tensions.

In addition to the implications for global growth, the evolving US trade posture is expected to exert pressure on the domestic economy as well. Several global research institutions have flagged increasing risks of a recession in the US³. This is driven by the possibility of retaliatory measures from trading partners, deteriorating business sentiment and escalating trade frictions that could significantly disrupt global financial markets. As the situation progresses, policymakers and businesses alike are bracing for a period of heightened volatility and economic recalibration.

Indian Economy

Indias economic trajectory continues to outpace that of most emerging markets, positioning it as a global outlier amid a broader slowdown. For the second consecutive year, the country is on track to be the fastest-growing major economy in the world. This is supported by its resilient domestic consumption and sustained infrastructure investments. Its relatively low exposure to US trade tariffs and the adoption of China + 1 policy by major global businesses further shields it from external vulnerabilities. This provides the economy greater stability in the face of global disruptions.

S&P Global⁴ forecasts Indias GDP to grow at 6.5% in FY26, buoyed by strong services-led exports, particularly to the US. Export between the nations is expected to sustain its strength, despite the prospect of reciprocal tariffs. On the monetary front, S&P Global anticipates the Reserve Bank of India (RBI) may ease interest rates by a further 75 to 100 basis points in the current cycle. Easing food inflation and declining crude oil prices are expected to help bring headline inflation closer to the RBIs 4% target by March 2026, thereby, creating room for policy support.

Morgan Stanley⁵ , in a recent report, reinforces Indias strong relative position within Asia, despite ongoing global trade tensions. While such tensions are expected to weigh on regional growth, Indias limited reliance on goods exports—as a share of GDP—reduces its vulnerability to trade-related shocks. The report also highlights the critical role of government policy in encouraging domestic demand. With targeted fiscal and policy measures in place, a revival in consumption and investment is expected. Overall, the economy is foreseen to sustain its strong growth momentum over the medium term.

Cryogenics

Cryogenics is the branch of science focused on the generation and impact of extremely low temperatures. The term originates from the Greek kryos (‘frost) and genic (‘to produce). Although it could broadly apply to any temperature below waters freezing point (0?C), the term was first coined in 1894 to describe the pursuit of far colder conditions. Today, cryogenics is generally defined as the study of temperatures below approximately -150?C.

Cryogenics has a wide range of practical uses. In industry and medicine, cryogenic liquids like oxygen, nitrogen and argon are frequently employed. In addition, cryogenics plays a crucial role in the rapid freezing of certain food products and the preservation of vital biological materials, including livestock semen, as well as human blood, tissues and embryos.

Industrial gases are indispensable for manufacturing in diverse sectors, such as energy, chemicals and electronics. Nitrogen, oxygen and natural gas dominate cryogenic equipment demand, alongside others like hydrogen, argon and helium. For large scale storage and distribution of permanent gases as above, liquefaction at Cryogenic temperatures is essential. Cryogenic temperature is integral to the process as permanent gases cannot be liquefied through mere compression.

Air Separation Units (ASUs) are key to producing these gases on large scale. They cool air to extremely low temperatures, liquefying and then separating the gases through distillation based on their different condensation points, yielding high-purity cryogenic liquids (below -150?C).

The energy industry heavily utilises cryogenics for Liquefied Natural Gas (LNG) production. The process involves cooling natural gas to an estimated -162?C for efficient transport and storage. Hydrogen, another energy-related cryogenic gas, can be derived from fossil fuels or renewable sources. However, for large scale distribution, liquefaction at extremely low temperature of -253? C is required. Another recently proposed and tested cryogenic application is Liquid Air Energy Storage (LAES). This technology allows for large-scale long-duration storage of renewable energy in the power grid.

Cryogenic Equipment Industry

Cryogenic equipment facilitates the storage, transportation and handling of liquefied gases at extremely low temperatures. Key components of distribution equipment include:

Tanks: Designed for the storage and transport of cryogenic liquids

Valves: Used to regulate the flow of cryogenic fluids and ensure system safety

Vaporizers: Utilised to convert cryogenic liquids into their gaseous state

Pumps: Utilised for transferring and circulating cryogenic liquids

The global market for cryogenic equipment, valued at $11.9 billion in 2023, is poised for notable growth. Experts forecast a strong Compound Annual Growth Rate (CAGR) of 6.9% between 2023 and 2028. This growth is envisioned to augment the market to an estimated $16.6 billion⁶ . This upward trajectory can largely be attributed to the ascending preference of Liquefied Natural Gas (LNG) and hydrogen as sustainable energy alternatives, coupled with the rising consumption of industrial gases within vital sectors, such as metallurgy, oil and gas and power generation. Moreover, expedited industrialisation in developing Asia-Pacific nations is foreseen to generate greater demand for industrial gases in areas, such as electronics and aerospace, thereby further boosting the cryogenic equipment market.

Currently, the Asia-Pacific region commands the largest market for cryogenic equipment. This can be attributed to the regions expedited transition towards sustainable energy sources. Demand is expected to be driven by China and Japan, followed by India. Europe constitutes the second-largest market. The European market is bolstered by a robust healthcare sector and the regions growing commitment to clean energy initiatives.

Market Size by type of cryogenic equipment

The storage segment comprises cryogenic tanks, dewars and pressure vessels. Historically, this segment has accounted for an estimated 55% of the cryogenic equipment market. Among the offerings, tanks serve as the primary component. The demand for tanks is foreseen to witness a rise owing to the heightened utilisation of cryogenic gases. In addition, the indispensability of tanks at both production and end-use sites is expected to further this demand.

Figure 3 Global demand for cryogenic storage equipment (USD Mln); Source - Markets and Markets, CRISIL M&A

The handling system segment represents 16% of the cryogenic equipment market. These systems enable the controlled transfer of cryogenic fluids across applications and typically comprise valves, regulators and gauges. They operate in conjunction with storage and distribution systems to ensure safe and precise fluid handling.

Figure 4 Global demand for cryogenic handling equipment (USD Mln); Source - Markets and Markets, CRISIL M&A

A share of 13% in the cryogenic equipment market was held by the supply system segment. It encompasses components, such as pumps, pipes, hoses and flanges. These components are designed to transport, return, or feed cryogenic fluids to their point of use. These systems are engineered to ensure stable pressure, accurate flow rates and maintenance of fluid purity across applications.

Figure 5 Global demand for cryogenic supply equipment (USD Mln); Source - Markets and Markets, CRISIL M&A

Sectors driving growth in India

The cryogenics industry in India is positioned for notable expansion across various end-user sectors. Heres a detailed outlook on how the mentioned sectors will drive this growth:

AUTOMOBILE

The growing scarcity of Compressed Natural Gas (CNG) and the need for cleaner alternatives to diesel are driving the adoption of Liquefied Natural Gas (LNG) in heavy-duty vehicles and logistics.

LNG offers lower emissions (30% less carbon, 90% less NOx and particulate matter and zero sulphur compared to diesel) and a 20-30% reduction in fuel costs.

The Government is supporting this shift by allowing the retrofitting of diesel vehicles with LNG. Further, the Government is permitting private players to set up LNG fuel stations and is classifying dual-fuel vehicles.

NITI Aayog estimates a need for around 800 LNG stations by 2030 to support a projected 50,000 LNG trucks⁷.

Despite being in its infancy when compared to CNG, the higher energy density of LNG makes it suitable for long-haul transportation and heavy payloads. This is set to augment the demand for cryogenic storage and transportation solutions.

FERTILIZER INDUSTRY

The fertiliser industry relies heavily on natural gas as a feedstock for producing hydrogen. In addition, hydrogen plays a vital role in ammonia production (a key component of urea, DAP and other fertilisers).

The heightened emphasis on the adoption of sustainable ‘green hydrogen produced from renewable sources to decarbonise ammonia production will contribute to the overall demand. The current process utilises ‘grey hydrogen derived from natural gas, emitting CO2.

OILFIELD EQUIPMENT & SERVICES INDUSTRY

This sector utilises a variety of industrial gases. These include nitrogen, oxygen and argon. These gases are primarily employed in chemical synthesis processes, Enhanced Oil Recovery (EOR) techniques and other oilfield services.

Cryogenic technologies are essential for producing, storing and transporting these gases in their liquid form. The liquid form offers higher density and allows for more efficient handling and transportation, especially to remote oilfield locations.

CONSUMER DURABLES & ELECTRONIC INDUSTRY

The burgeoning semiconductor industry in India, driven by government initiatives and increasing demand for electronics, will indirectly boost the cryogenics sector.

The manufacturing of semiconductors require ultra-high purity gases like nitrogen, argon, helium and oxygen for various processes, such as etching, deposition and cooling.

Further, advanced semiconductor research and development utilises cryogenic temperatures, particularly in areas such as quantum computing interfaces and cryogenic electronics.

CONSUMER FOODS INDUSTRY

Liquid nitrogen is witnessing a heightened utilisation in rapid freezing (cryogenic freezing or Individual Quick Freezing - IQF) of food products like fruits, vegetables, meat and seafood.

Liquid nitrogen is also used for Modified Atmosphere Packaging (MAP), which extends shelf life by removing oxygen and preventing spoilage.

The demand for high-quality, processed and packaged foods will continue to augment the utilisation of liquid nitrogen and associated cryogenic equipment.

PHARMA, HOSPITALS & HEALTHCARE DELIVERY

Cryogenics are extensively employed in the pharmaceutical industry. Various applications include the cryopreservation of drugs, blood cells, stem cells and biological samples.

In hospitals and healthcare, cryosurgery (cryotherapy) uses extreme cold (liquid nitrogen or argon gas) to destroy abnormal tissues like tumours and warts.

MRI systems rely heavily on cryogens (typically helium) to cool the superconducting magnets.

The growth of biomedical research, biobanking, vaccine development and advanced surgical techniques will help drive the demand for cryogenic equipment and services in this sector.

PAPER

Industrial gases such as oxygen and nitrogen are utilised in various production processes, including delignification, chemical recovery, inerting and wastewater treatment.

Additionally, multilayer cryogenic super insulation paper is used for insulating cryogenic storage and transportation vessels used in various industries, including potentially for chemicals used in paper production.

METAL

Cryogenic treatment (sub-zero processing using liquid nitrogen) is employed to enhance the metallurgical and mechanical properties of tool steels and other metal components.

Industries relying on high-performance metal tools and components, such as manufacturing and aerospace, will continue to drive the adoption of cryogenic treatment services.

Opportunities in cryogenic equipment market / Growth Drivers

The Indian cryogenic tank market is experiencing significant growth. The heightened demand for industrial and medical gases and the governments push for a cleaner energy transition are key contributors of this growth. The expedited industrialisation spanning sectors such as, metal production, chemical manufacturing and food preservation necessitates a substantial supply of cryogenic gases, such as Liquid Oxygen (LOX), Liquid Nitrogen (LIN) and Liquid Carbon Dioxide (LCO2). In addition, the expanding healthcare sector, amplified by population growth, urbanisation and the lessons learned from the COVID-19 pandemic, has created a critical need for efficient transportation of medical gases, particularly liquid oxygen. This dual demand from the industrial and medical sectors forms a major pillar supporting the growth of the cryogenic tanker market in India.⁸

Further, the Indian governments emphasis on a cleaner energy future is acting as a crucial catalyst for the cryogenic tanker market. Policies promoting the use of natural gas and other cleaner alternatives are leading to substantial investments in

LNG infrastructure, including terminals, pipelines and storage/ distribution facilities. LNG is considered a vital bridge fuel in Indias energy mix and its increasing adoption for power generation and as a transportation fuel directly fuels the demand for cryogenic tankers for safe and efficient transport from import terminals to end-users as well as end use storage infrastructure. The governments target to increase natural gas consumption to 15% of the energy mix by 2030 underscores this commitment and its impact on the cryogenic logistics sector.

The promotion of LNG as a transportation fuel, through incentives for natural gas vehicles (NGVs) in logistics, public transport and freight, further amplifies the need for cryogenic tankers and refuelling stations. Looking ahead, Indias ambitious goal of achieving net-zero emissions by 2070 is paving the way for the adoption of alternative fuels like hydrogen, which also requires cryogenic transportation. This long-term vision ensures that cryogenic tankers and cryogenic infrastructure will remain integral to Indias evolving energy landscape. The projected CAGR of 6.5%⁹ for LNG demand from 2023 to 2030 clearly indicates the robust growth trajectory of the cryogenic tanker market in India.

Summarizing the key drivers:

Surging Industrial and Medical Gas Demand: Rapid industrialisation and an expanding healthcare sector are notably increasing the need for cryogenic gases like LOX, LIN and LCO2, driving demand for transportation via cryogenic tankers.

Government Initiatives for Clean Energy: Policies promoting natural gas and LNG as part of a cleaner energy transition are fuelling investments in LNG infrastructure and consequently boosting the demand for cryogenic tankers, fuelling stations and vehicle mounted fuel tanks.

Growing LNG Adoption in Transportation: Government incentives for Natural Gas Vehicles (NGVs) across various sectors are increasing the demand for cryogenic tankers, fuelling stations and vehicle mounted fuel tanks, to ensure a reliable supply of LNG.

Expansion of LNG Infrastructure: Heavy investments in LNG terminals, pipelines and storage facilities to meet the rising natural gas consumption target directly contribute to the increased deployment of cryogenic tankers.

Future Potential of Alternative Fuels: Indias commitment to net-zero emissions by 2070 and the potential adoption of hydrogen as a fuel source will further bolster the long-term demand for cryogenic tanks and tankers.

Company Overview

Backed by an experience spanning over three decades, INOXCVA stands tall as a leading global manufacturer of both customised and standard cryogenic equipment and tanks. The Company delivers comprehensive, end-to-end solutions encompassing design, engineering, manufacturing and installation. INOXCVA caters to a wide spectrum of industries, including industrial gases, liquified natural gas (LNG), the burgeoning green hydrogen sector, energy, steel, medical and healthcare and more. Notably, INOXCVA is a significant exporter of cryogenic tanks from India. In FY25, the Company served over 500 customers worldwide, operating across four distinct divisions.

INOXCVA addresses diverse customer needs across its divisions within its operational regions

Industrial Gas: The Industrial Gas division of INOXCVA manufactures and installs a wide array of customised and standard cryogenic tanks and systems. These products are primarily utilised for storing, transporting and distributing industrial gases, such as green hydrogen, oxygen, nitrogen, argon, CO2 and hydrogen. The Company offers 1 litre portable units, 1,000,000-litre stationary tanks and transport tanks up to 60,000 litres. The product line further encompasses microbulk units, vaporisers, Cryo Bio tanks and regasification equipment. In addition, the Company offers after-sales support.

LNG: INOXCVA specialises in standard and engineered equipment for LNG storage, distribution and transportation. The Company offers small-scale LNG infrastructure for industrial, marine and automotive sectors. The offerings include static tanks (up to one million liters), transport trailers, satellite stations, marine fuel tanks and LNG/LCNG refuelling stations. In addition, it provides vehicle LNG fuel tanks, regasification systems and comprehensive LNG infrastructure supported by operation and maintenance services. INOXCVA is leading the way in mini-LNG terminals. The Company is transforming LNG distribution in areas with limited infrastructure, such as island nations and remote industrial zones. Following the success of projects in Scotland and Antigua, the Company has secured a third major contract in the Bahamas. This terminal—the largest ever built by INOXCVA—will feature 10 vacuum-insulated tanks with a total capacity of 15,000 cubic meters. The terminal will serve as a regional hub for power and energy distribution. These projects showcase INOXCVAs strength in delivering modular, scalable solutions that advance the clean energy transition.

Cryo Scientific: INOXCVAs Cryo Scientific Division (CSD) operates at the forefront of space exploration and advanced fundamental research. The division delivers highly specialised solutions across Research & Development, cryogenic applications and turnkey projects. With decades of experience, CSD has established a deep expertise in cryogenic engineering by consistently designing and implementing complex storage systems with precision and reliability.

The division focuses on customised cryogenic storage and distribution systems for space research, fuel-filling systems for launch pads, space simulation chambers, vacuum-jacketed piping and MRI cryostats. Notably, INOXCVA is among the few Indian companies contributing to the prestigious International Thermonuclear Experimental Reactor (ITER) project—a global nuclear fusion research and engineering initiative. CSDs comprehensive portfolio spans fundamental atomic research, quantum computing, satellite and launch infrastructure, cryogenic propulsion systems, superconductivity and fusion technologies and MRI cryostats. In addition, the division provides advanced liquid hydrogen and helium system.

Beverage KEGs: INOXCVA is one of the largest manufacturers of stainless-steel container solutions, offering a comprehensive range of products known for their superior hygiene, safety and durability. The Companys core strength lies in its ability to design, engineer, manufacture and supply aseptic container systems that meet the highest global standards.

Backed by over three decades of expertise in stainless steel fabrication and welding, the Company has built a deep understanding of delivering high-quality aseptic container solutions. Leveraging this experience, INOXCVA expanded into the beverage keg manufacturing segment in FY25.

In collaboration with the Supermonte Group, Italy, we now supply premium stainless steel returnable beverage kegs from our distribution facilities in Italy and India. Driven by a commitment to sustainability and quality, we prioritize a dependable production process to ensure consistent supply of durable, eco-friendly kegs for the beverage industry.

Consolidated Financial and Operational Performance:

Financial Overview:

			( Rs. in Crores)
Particulars	FY25	FY24	Change YoY (%)
Total Income Incl.	1,354	1,165	16.2%
Exceptional Income
EBITDA	330	279	18.3%
EBITDA Margin	24.4%	24%	0.4%
PBT Incl. Other	297	255	16.2%
Comprehensive Income
PAT	224	194	15.4%
PAT Margin	16.5%	16.7%	(0.2%)
EPS	24.90	21.59	15.3%

a) Total Income Incl. Exceptional Income:

In FY25, the Company recorded highest ever total income of Rs. 1354 Cr.

b) EBITDA & EBITDA Margin:

In FY25, the EBITDA increased by 18.3% to Rs. 330 Cr in comparison to Rs. 279 Cr in FY24. The EBITDA Margin for FY25 is 24.4% as compared to 24.0% in the FY24.

C) PBT Incl. Other Comprehensive Income:

In FY25, the PBT increased by 16.2% to Rs. 297 Cr in comparison to Rs. 255 Cr in FY24.

d) PAT & PAT Margin:

In FY25, the PAT increased by 15.4% to Rs. 224 Cr in comparison to Rs. 194 Cr in FY24. The PAT Margin for FY25 is 16.5% as compared to 16.7% in the FY24.

e) EPS:

IN FY25, the Company recorded earnings per share of Rs. 24.90 per share as compared to Rs. 21.59 per share in FY24.

Operational Overview:

In FY25, Order Inflow was at Rs. 1533 up by 28.5% YoY.

In FY25, the Order Backlog was at Rs.1356 Cr with 47% orders from Industrial Gas, 36% orders from LNG and balance 17% orders from Cryo Scientific Division.

In FY25, export order comprised of 64% of the Order Backlog.

Key financial ratios, along with detailed explanations thereof:

				( Rs. in Crores)
Particulars	FY25	FY24	Change (%)	Reason for Change
Debtors Turnover	6.14	7.16	(14.2%)	There is increase in Trade Receivable from March 24 due to few sales on higher credit terms
Inventory Turnover	2.82	2.68	5.3%
Interest Coverage Times	35.98	46.46	(22.6%)	Finance cost is higher due to higher fund utilization due to Savli plant expansion for Cryo Tanks
Current Ratio - Times	1.68	1.72	(2.5%)
Debt-Equity Ratio	0.04	0.01	3.0%
EBITDA Margin (%)	24.4%	24.0%	0.40%
Net Profit Margin (%)	16.5%	16.7%	(0.2%)	Tax expenses is higher due to removal of Indexation benefit on LTCG of Rs 2.4 Cr by Indias Budget 24 and Company have big investment in Mutual Funds
Return on Net Worth (%)	25.9%	30.2%	(4.3%)

Notes:

a). Above ratios were based on the Consolidated Financial Statements of the Company

b). Definitions of the ratios:

1. Debtors turnover: Revenue from operations by Average trade receivable for the year

2. Inventory turnover: Revenue from operations by Average inventory for the year

3. Interest coverage ratio: Total EBIT by finance cost for the year

4. Current ratio: All types of Financial and Non-Financial Current assets by all types of Financial and Non-Financial current liabilities

5. Debt equity ratio: Current and Non-current Borrowing by total equity at the end of the year

6. EBITDA margin: EBIDTA by Total Income for the year

7. Net profit margin: Profit for the year by Total income for the year

8. Return on net worth: Profit for the year by Total Equity

Strengths, Weakness, Opportunities and Threat:

Strengths (Internal Positive Factors)

INOXCVA is worlds leading provider of customised cryogenic equipment and one of the leading cryogenic tank manufacturers in the world

The Companys varied portfolio includes specialised cryogenic equipment engineered to global quality standards.

The Company has a varied global clientele base, spanning diverse industry sectors.

The Companys state-of-the-art workshops are equipped with required facilities for construction of cryogenic equipment.

With facilities present at Kandla Special Economic Zone, the Company can augment its exports effectively.

The Company has established advanced systems for cryogenic equipment fabrication.

With subsidiaries, service centres and marketing offices in Europe and Brazil, the Company can afford to serve a global clientele base.

Due to the continuous backward and forward integration, the Company provides a sale of around 10% of the revenue to the group companies.

The Company can boast of a professional and skilled team of promoters, senior management and leadership team.

The Company has shown healthy financial performance to support growth.

Weaknesses (Internal Negative Factors)

The requisite to manufacture cryogenic tanks of varied sizes and pressure ratings do not provide adequate volume for mass production benefits.

Due to exorbitant transportation costs for large tanks, the Company focuses on regional areas.

Major competitors focus on large-scale production as they have limited product range and have manufacturing facilities in the United States, European Union, China and India.

The dominance of a few multinational companies in the gas industry limits the consumer base. The companies can further exploit their purchasing power to drive the commercial terms to extremely competitive levels.

Opportunities (External Positive Factors)

The current paradigm shift towards clean energy presents the Company with opportunities on LNG and hydrogen space. The Company should capitalise on these emerging opportunities.

With heightened awareness of sustainability and cleaner fuel, the demand of LNG is expected to witness a rise.

The distribution of LNG on land presents a lucrative opportunity for increased cryogenic equipment supply.

The Company can offer site-built storage tanks as a new product line for international markets. This will enable the Company to further diversify its clientele.

Leveraging partnerships and future investments can facilitate the development of the international business.

Developing non-cryo related engineered products required for defence/automotive and nuclear projects.

With a surge in demand for standard cryogenic and non-cryogenic equipment, the Company can expand into international markets.

The Company can augment growth through strategic acquisitions and alliances.

Threats (External Negative Factors)

Non-ozone depleting refrigerants require disposable cylinders, however, there is a possibility of CFC regulations altering the market for disposable cylinders.

Given the limited consumer base, strained relationship with even one client could lead to significant business loss.

Cryogenic distribution equipment are highly durable and can be utilised for a long time. Most industrial gas companies re-locate their old equipment from time to time, deferring the requirement of new equipment. This leads to periods of muted demand, especially when the industry faces challenges.

For FY25, the companys export revenue is around 53%. Any imposition of antidumping duties or other duties by importing countries could affect this revenue.

The future demand for cryogenic equipment will be affected by LNG and Hydrogen prices and Government policies, notably affecting the Companys business in future.

Conclusion

INOX India Ltd commands a strong market position in cryogenic solutions. This position is bolstered by innovation and the global demand of LNG and industrial gases. However, high capital intensity, competition and economic risks pose threats. The Company can leverage clean energy trends, healthcare demand and global expansion to sustain growth, provided it manages supply chain and regulatory risks effectively.

References:

https://www.iea.org/reports/global-hydrogen-review-2023 https://www.iea.org/reports/net-zero-by-2050 https://about.bnef.com/energy-transition-investment/ https://mnre.gov.in/en/national-green-hydrogen-mission/ https://dcfmodeling.com/products/inoxindians-swot-analysis

https://dcfmodeling.com/products/inoxindians-porters-five-forces-analysis

Risk & Concerns:

Critical Manufacturing Infrastructure: The Companys business operations are fundamentally dependent on the consistent and efficient performance of its four principal manufacturing facilities. These facilities are subject to inherent risks associated with complex industrial processes. Unforeseen events, such as equipment breakdowns, system failures, or industrial accidents have the potential to significantly interrupt business continuity. This can lead to disruptions in production schedules, elevated operational expenditures, reduced sales volumes and a diminished capacity to meet evolving customer demands in a timely manner.

Concentration of Key Clientele: : A notable portion of the Companys revenue stream is concentrated within a limited number of major clients. Specifically, the Companys largest single consumer and its top ten customers collectively contributed approximately 13% and 47% of the total revenue from operations for FY25. This concentration exposes the Company to potential adverse effects should any of these key customers decide to cancel, significantly delay, or substantially reduce their order volumes. This could negatively impact the Companys business stability, operational effectiveness and overall financial condition.

Sensitivity to Input Cost Fluctuations: : The Companys profitability is susceptible to volatility in the prices of essential raw materials, components and energy resources. Increase in the cost of these key inputs have the potential to directly affect the Companys product pricing strategies and the stability of its supply chain. Consequently, significant upward pressure on input costs could necessitate price adjustments, potentially impacting market competitiveness. In addition, it may lead to supply constraints, thereby, adversely affecting the Companys business performance and financial results.

Order Book as a Forward Indicator with Limitations: : Although the Companys order book provides a snapshot of contracted future business, it should not be interpreted as a definitive forecast of future revenues or profitability. The contracts included within the order book are subject to various factors beyond the Companys direct control. These include the possibility of adjustments to scope or timelines, outright cancellations, or temporary suspensions initiated by customers due to their own evolving business needs or market conditions. Therefore, the order books predictive capability regarding future financial outcomes is inherently limited.

Dependence on Technological Infrastructure and Cybersecurity: The Companys manufacturing processes and overall business operations rely heavily on sophisticated technological infrastructure and interconnected digital systems. This reliance exposes the Company to potential risks associated with system failures, cybersecurity breaches, data loss, or disruptions to critical software and hardware. Any such incident could severely impact production efficiency, compromise sensitive information, damage the Companys reputation and lead to significant financial losses.

Regulatory and Compliance Landscape: The Companys operations are subject to a complex and evolving landscape of environmental regulations, safety standards and other industry-specific compliance requirements. Changes in these regulations or the Companys failure to adhere to them could result in elevated compliance costs, potential penalties, production limitations and reputational damage. Overall, these factors could negatively impact the Companys business operations and financial performance.

Risk Management :

Risk management plays a critical role within the operational framework of INOX India Limited. The Company embraces a comprehensive and proactive approach towards identifying, accessing and mitigating potential risks across all facets of its business operation. The Company conducts routine assessments to pinpoint vulnerabilities and devises risk mitigation strategies accordingly. The Company vigilantly monitors market fluctuations, industry trends, regulatory changes and financial exposures to proactively address potential challenges. Additionally, INOX India Limited strategically maintains a diversified investment portfolio to effectively reduce the impact of market volatility. By prioritising risk management, the Company effectively protects its assets, ensures financial stability and nurtures a resilient organisational culture. Overall, the risk management framework ensures the reliable delivery of services amid the ever evolving cryogenic engineering sector.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

The Company continues to uphold its belief that its workforce is its greatest asset. The Company believes that its workforce is central to driving its sustainable growth, operational excellence and innovation. Building on the strong foundation of the previous fiscals, FY 2024-25 witnessed the implementation of several forward-looking HR initiatives. These initiatives focused on strengthening talent acquisition, enhancing leadership and establishment of a culture of sustained learning and inclusive engagement.

During the year, the Company expanded its talent base by increasing the employee strength by around 150 Nos across diverse functions, significantly boosting organisational capabilities. Further, the Company bolstered its leadership team with the successful appointment of key roles, which included the Chief Technology Officer, Chief Information Officer, General Manager

– Projects and General Manager – Engineering. This marks a

decisive step towards building a more futuristic and innovation-driven organisation.

Aligned with its core philosophy that human potential is limitless, the Company continued to invest in structured learning and development programmes. A flagship initiative, ‘Nirmaan: Creating Tomorrows Excellence, was launched to provide focused training to Graduate Engineer Trainees (GETs) and Postgraduate Engineer Trainees/Management Trainees (PGETs/PGMTs). The programme is designed to enhance both technical expertise and behavioural competencies through curated workshops and development modules. Additionally, in a step towards promoting skill-based inclusivity, five female welders are currently undergoing specialised training at Skill Development and Excellence Centre under our CSR initiative, reinforcing our commitment to diversity and workforce empowerment.

The Company continued to prioritise building a vibrant and inclusive work culture through a wide range of employee engagement and capability-building programmes across all key locations—Baroda, Kalol, Kandla and Savli. Activities included the celebration of organisational milestones, national festivals, wellness drives and team-building events. Over the year, employees received extensive training in technical, safety, behavioural and soft skills, with a strong focus on leadership development, digital literacy (including tools such as MS Excel and ChatGPT) and innovation.

Health and well-being remained a strategic priority, with programmes targeting physical, mental and preventive care. In addition, the Company conducted awareness sessions on gender inclusivity and emotional intelligence, especially for mid and senior-level managers—ensuring a respectful, resilient and future-ready workforce.

Overall, these integrated initiatives reflect the Companys resolute commitment to empowering its people, nurturing talent and aligning human capital with its long-term strategic objectives.

Culture and Safety at INOXCVA

INOXCVA: Embedding a Culture of Safety and Operational Excellence

The core approach of INOXCVA is guided by a consistent and strong commitment to ‘Safety First. This principle transcends a mere priority; it is a foundational element of the organisational culture, guiding the Companys delivery of world-class cryogenic solutions to its global clientele. INOXCVA is resolute in its belief that all injuries, illnesses and incidents are preventable. The Company proactively cultivates a zero-harm environment across all facets of its worldwide operations, ensuring the safety of its employees and all relevant stakeholders.

The Companys dedication extends beyond ensuring safety to encompass the consistent provision of superior quality cryogenic solutions and associated services. The Company places heightened emphasis on environmental stewardship and the holistic well-being of every individual involved in its value chain. To realise these critical objectives, INOXCVA has implemented a robust and internationally certified Integrated Management System (IMS), conforming to the stringent requirements of ISO 9001:2015

(Quality Management Systems), ISO 14001:2015 (Environmental Management Systems) and ISO 45001:2018 (Occupational Health and Safety Management Systems).

The efficacy of its IMS is maintained to the highest standard through the execution of strict internal and external audits. This ensures continuous adherence to the highest industry benchmarks and regulatory mandates. INOXCVA strategically allocates the necessary resources and employs clearly defined process flowcharts to support the effective implementation, ongoing development and sustained maintenance of its QHSE Management System. Recognising that a proactive safety culture necessitates comprehensive understanding, the Company provides thorough awareness training to all personnel, both directly employed and contracted. The Companys commitment to proactive risk mitigation is embedded within its operational framework. This helps in driving a culture of continuous improvement across the organisation. All new personnel undergo comprehensive induction programmes, which includes specific technical and safety training relevant to their roles.

Investing in the professional development and competency enhancement of its workforce is a strategic priority for the Company. Beyond foundational safety inductions, it delivers targeted safety training programmes addressing task-specific risks associated with activities such as welding, cutting, grinding, working at height and material handling. To ensure regulatory compliance and cultivate a state of preparedness, INOXCVA conducts practical fire safety and first-aid training initiatives. Recognising the criticality of effective emergency response, routine emergency preparedness training exercises are implemented. Comprehensive protocols are in place for mitigating potential emergency scenarios, incorporating proactive risk management strategies. Routine mock drills are conducted to validate the Companys emergency preparedness. A structured process is followed for capturing and disseminating lessons learned to continuously refine the protocols. Further, INOXCVA has established well-defined procedures to ensure appropriate and timely responses to any accidental or unforeseen incidents.

The implementation of sophisticated online legal compliance tools that provide real-time transparency across all office and manufacturing locations highlights the Companys commitment towards legal and regulatory compliance. The Companys IMS manual is meticulously aligned with its operational processes and all pertinent regulatory frameworks. To further cultivate a strong culture of awareness and engagement, INOXCVA actively commemorates National Safety Week and Environment Day. The Company encourages active participation from both its employees and external stakeholders. The Company maintains a formal system for recognising and appropriately rewarding exemplary performance and contributions from its workforce.

In summary, INOXCVA operates under a deeply ingrained philosophy that prioritises safety, quality and environmental responsibility as integral components of its business strategy. The Company is firmly committed to delivering exceptional cryogenic solutions while ensuring the health, safety and well-being of its workforce and minimising its environmental impact across all its global operations.

Investor Relations and Engagement:

Investor Relations (IR) is vital for navigating todays complex business environment and effectively managing investor expectations. A companys IR efforts aim to cultivate confidence, establish meaningful connections and garner the trust of key stakeholders—including shareholders, investors and analysts. This is achieved through transparent and accurate information disclosure, clear explanations and open two-way communication.

To consistently meet these goals, the Company regularly communicates essential information. This ensures that stakeholders have a clear and comprehensive understanding of its performance, strategy and prospects. This includes timely and accurate financial reporting, transparent communication of key business developments and insightful explanations of strategic decisions. Furthermore, the Company implements a range of investor relations initiatives designed to encourage engagement and build trust. These activities may include investor presentations, earnings calls, participation in investor conferences, one-on-one meetings and the maintenance of a dedicated investor relations website. By actively engaging with the investor community through these channels, the Company aims to cultivate a deeper understanding of its value proposition. Further, this helps the Company to address investor concerns effectively and ultimately strengthen investor confidence, thereby maximising the long-term benefits and value derived from its comprehensive IR program.

Internal Control Systems:

INOX India Limited has instituted a robust internal control system designed to ensure:

Key Features:

1. Structured Policies & Procedures:

Clearly documented Standard Operating Procedures (SOPs) across departments.

Regular updates in line with evolving business needs and regulatory requirements

The company also has defined delegation of power with authority limits for approving revenue and capex expenditures including approval of non-routine and abnormal items.

2. Risk Management Framework:

Periodic risk assessments conducted to identify and mitigate key business and operational risks

Risk registers and mitigation strategies implemented at functional and enterprise levels

3. Internal Audit Mechanism:

An independent Internal Audit team reports directly to the Audit Committee on quarterly basis

Audits conducted in accordance with a risk-based annual audit plan approved by the Audit Committee

Focus areas include procurement, Inventory, Sales

& Marketing, Production, project execution, quality control, finance and compliance

4. IT-Enabled Controls:

Use of ERP systems to ensure process automation and control

Access control, data integrity and security measures are in place to prevent misuse or fraud

5. Audit Committee Oversight:

Regular review of audit findings, control deficiencies and management responses by the Board-level Audit Committee

Recommendations are implemented with tracking mechanisms to ensure timely closure of audit points

6. Compliance Management:

Centralized compliance monitoring for all applicable statutory and regulatory laws Periodic internal and external compliance checks and certifications

7. Continuous Improvement:

Feedback from internal audits and reviews used to strengthen controls and plug gaps

Emphasis on training employees to foster a culture of integrity and compliance

External & internal auditor also performs independent testing of Internal Finance Controls over financial reporting which is line with regulatory reporting requirements.

Adequacy and effectiveness of Internal Control Systems:

INOX India Limited has instituted a well-defined internal control framework commensurate with the size, scale and complexity of its operations. The system of internal controls is designed to provide reasonable assurance regarding the reliability of financial reporting, compliance with applicable laws and regulations and the effectiveness and efficiency of operations.

The internal control structure comprises clearly defined policies, standard operating procedures and a structured delegation of authority. These controls ensure that transactions are authorized, recorded and reported accurately and that assets are safeguarded against loss or unauthorized use.

An independent Internal Audit function operates under the supervision of the Audit Committee of the Board. The Internal Audit team conducts regular audits based on a risk-based audit plan approved by the Audit Committee. The findings and observations from the audits are shared with senior management and are periodically reviewed by the Audit Committee to ensure timely corrective actions.

The Company has also deployed ERP systems across key business processes to bring in process standardization and system-driven controls. This digital backbone strengthens the effectiveness of monitoring and ensures better data integrity, operational efficiency and control over the Companys resources.

Additionally, INOX India maintains a robust compliance management mechanism to ensure adherence to all applicable statutory and regulatory requirements. The Board, through the

Audit Committee, monitors the effectiveness of the internal control systems and ensures that the risk management processes are integrated with business objectives.

Based on the review of the internal controls conducted during the year, the management is of the opinion that the Companys internal control system is adequate and operating effectively.

References: https://economictimes.indiatimes.com/inox-india-ltd/ directorsreport/companyid-7484.cms?utm

https://inoxcva.com/pdf/Policies%20%26%20Code%20of%20 Conduct/Risk%20Management%20Policy.pdf?utm

https://inoxcva.com/pdf/InoxCVA%20IT%20Policy%20 2024-v2.pdf?

https://inoxcva.com/docs/policies/3.Code%20of%20Practices%20 and%20Procedures%20for%20fair%20disclosure%20of%20 UPSI.pdf?utm

Cautionary Statement

This document contains statements about expected future events, financial and operating results of INOXCVA Limited, which may be forward-looking. By their nature, forward-looking statements require your Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the actual results may differ from the forward-looking statements mentioned in the Annual Report. Readers are cautioned not to place undue reliance on forward-looking statements.