Integra Engineering India Ltd Management Discussions

Your Directors have pleasure in presenting the Management Discussion and Analysis Report for the year ended on 31^st March 2025.

forward looking statement

This report contains forward-looking statements based on certain assumptions and expectations of future events. The Company, therefore, cannot guarantee that these assumptions and expectations are accurate or will be realized, The Companys actual results, performance or achievements can thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.

overview

Integra Engineering India Ltd. ("IEIL" or "the Company") is a leading supplier of railway and rolling stock components, serving both domestic and international Original Equipment Manufacturers (OEMs). With proven expertise in the design and manufacturing of sheet metal, wiring, and electromechanical solutions, IEIL delivers reliable engineering services tailored to the rail industry.

The Companys portfolio includes components for locomotive propulsion systems and interior parts for metro and semi-highspeed trains. IEIL also provides several RDSO-approved products, including metal-to-metal relays, metal-to-carbon relays, and LED signals for Indian Railways.Committed to excellence and quality, IEIL holds key certifications such as EN 15085 CL-1, DIN 6701, RDSO, IP 65 & IP 55, CE marking, and management system standards including ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018.

IEIL is a publicly listed entity on the BSE and operates with strict adherence to regulatory and compliance frameworks.

The Company is a trusted partner to prominent OEMs including Alstom, Siemens Mobility, Medha Servo, CAF Power & Automation, CG Power, BHEL, Hind Rectifier, and Sepsa Medha, supporting projects across both domestic and export markets.

railway industry trend

The rail industry, a vital pillar of the global travel economy, is undergoing a period of dynamic transformation. With rail travel projected to grow year over year, the sector must evolve to meet the demands of a modern world and rising passenger expectations. Key trends shaping this evolution include sustainability, digitization, enhanced safety, improved customer experience, and stronger global connectivity. These shifts are redefining how rail operators and manufacturers innovate, invest, and collaborate for the future.

- Sustainable rail travel: reducing carbon footprint

- Digital advancements: optimizing operations and passenger experience

- Safety first: emphasizing risk mitigation

- Elevated customer experience: enhancing passenger comfort

- Global collaboration: strengthening rail connections

- The future of rail: sustainability, digitalization, and safety

Source: https://www.moment.tech/news/rail-industry-trends- 2023-2030

• Railway Rolling Stock Market Outlook: 2024-2034

The global railway rolling stock market is poised for significant growth, projected to expand from USD 3.87 billion in 2024 to USD 6.43 billion by 2034, registering a moderate CAGR of 5.20% over the forecast period. This upward trajectory is largely fueled by infrastructure investments and the growing adoption of advanced digital solutions across the railway sector.

Railway Rolling Stock Market: Consumption Trends & Demand Analysis:

• Infrastructure Modernization: Increased investments in railway infrastructure are driving market growth through the modernization of locomotives, implementation of robust braking systems, and enhancements in passenger comfort.

• High-Capacity Demand: The deployment of rolling stock capable of handling heavy loads is rising among both public and private players, further strengthening transport infrastructure and efficiency.

• Fleet Expansion & Upgrades: Market expansion is underpinned by the procurement of new locomotives, coaches, and wagons, along with infrastructure upgrades such as track modernization and the introduction of next- generation signaling systems.

• Maintenance & Optimization: The rising operational costs in railway transport necessitate real-time, condition-based maintenance practices-boosting demand for smart rolling stock solutions among OEMs, operators, and suppliers.

Key Trends Reshaping the Market:

• Urban Mobility Solutions: The increasing adoption of metro and subway trains is significantly driving the demand for modern rolling stock across urban transit systems.

• Automation & Autonomy: The emergence of autonomous trains is reshaping operational frameworks and pushing the market toward advanced driverless solutions.

• Tourism-Driven Demand: Growth in the tours and travel sector is contributing to the demand for luxury and longdistance rolling stock, particularly in scenic and heritage rail routes.

Source: https://www.futuremarketinsights.com/reports/railway-rolling-stock-market

• Locomotive Industry trend

The global locomotive market was valued at USD 23.90 billion in 2024 and is projected to grow at a CAGR of 9.7% from 2025 to 2030. This growth is primarily fueled by increasing investments in rail network infrastructure from both public and private sectors. Urbanization and population growth are further intensifying the need for enhanced metropolitan transit systems, thereby boosting demand for advanced rail networks. Additionally, numerous government initiatives aimed at modernizing railway infrastructure and deploying high-speed, next-generation locomotives are expected to further propel market expansion over the forecast period.

Source: https://www.grandviewresearch.com/industry-analysis/locomotive-market-report

Indian Railways Achieves Record Locomotive Production in FY 2024-25

Indian Railways locomotive manufacturing units have achieved a historic milestone by producing 1,681 locomotives across various categories in the financial year 2024-25—an increase of 209 locomotives or 19% compared to the 1,472 locomotives manufactured in FY 2023-24. This achievement marks the highest- ever annual locomotive production in India, underscoring the significant progress made in enhancing the nations railway infrastructure and capacity.

The sustained rise in locomotive production is a direct outcome of strategic decisions under the "Make in India" initiative. From 2004 to 2014, India produced a total of 4,695 locomotives, averaging 470 per year. In stark contrast, the period from 2014 to 2024 witnessed the production of 9,168 locomotives, nearly doubling the average annual output to approximately 917 locomotives.

Production Distribution (FY 2024-25):

- Chittaranjan Locomotive Works (CLW): 700 locomotives

- Banaras Locomotive Works (BLW): 477 locomotives

- Patiala Locomotive Works (PLW): 304 locomotives

- Madhepura Electric Locomotive Pvt. Ltd. (MELPL): 100 locomotives

- Marhowrah Locomotive Pvt. Ltd. (MLPL): 100 locomotives

This landmark performance reflects the collective commitment of Indian Railways manufacturing units to self-reliance, technological advancement, and capacity expansion to meet rising domestic and global demands.

Source: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2117830#:~:text=^,Make%20in%20India^,%20Drives%20Growth.Doubling%20Annual%20Average%20to%20917&text=India%20has%20emerged%20as%20a¦the%20financial%20year%202024%2D25.

• Expanding Metro / Semi High speed / High speed train in India

High-Speed Rail: Powering Economic and Sustainable Growth

The introduction of a high-speed rail system promises to act as a powerful catalyst for national development. By enhancing connectivity between key economic hubs, it will boost productivity, reduce travel time, and stimulate regional economies. Furthermore, high-speed rail plays a vital role in addressing urban congestion, bridging regional economic disparities, and advancing climate and energy goals. As a modern, efficient, and sustainable mode of transport, it positions the country on the fast track to inclusive and environmentally responsible growth.

Source: https://www.hindustantimes.com/genesis/highspeed-rail-driving-economic-growth-and-sustainability-in-india-101746593 803612.html

Vande Bharat Express Expansion Plan

India is set to dramatically scale up its Vande Bharat Express network, reinforcing efforts to modernize the nations railway system. The expansion aims to significantly improve intercity connectivity, reduce travel times, and promote balanced regional development.

As part of this initiative, Indian Railways will not only continue deploying the popular chair car variants, but will also introduce nine Vande Bharat Sleeper trains by December 2025. These 16-coach trains are tailored for long-distance overnight travel, offering superior comfort and modern passenger amenities.

In a broader push toward transformation, Indian Railways plans to manufacture 200 new Vande Bharat trains—comprising both chair car and sleeper configurations—over the next two to three years. This is a key component of the countrys comprehensive rail modernization agenda.

The rollout of these new services marks a major leap forward in Indias transportation infrastructure, supporting economic growth, reducing regional disparities, and enhancing passenger experience across urban and semi-urban corridors.

Source: https://vandebharatexpress.co.in/upcoming-vande-bharat- express-train/

Metro Projects in India: Driving Urban Transformation

Indias Metro rail projects have witnessed remarkable progress, fundamentally reshaping the landscape of urban transportation. These projects are designed to ease traffic congestion, reduce pollution, and enhance intra-city connectivity, providing a sustainable solution to the growing challenges of urban mobility.

With major initiatives underway in cities such as Delhi, Mumbai, Bengaluru, and Chennai, Indias metro network continues to expand at an accelerated pace. The development process involves comprehensive planning, strategic funding mechanisms, and the integration of advanced technologies, ensuring efficient implementation and long-term viability.

Metro systems offer commuters a fast, reliable, and eco-friendly mode of transport, enabling seamless movement across increasingly crowded urban environments. As Indian cities continue to grow in size and complexity, the expansion of metro infrastructure remains a key pillar of the nations urban development strategy, aligning with broader goals of sustainability, inclusivity, and modernization.

Source: https://metrorailtoday.com/page/metro-rail-projects-in-india

• A highlight of the budget is the proposed introduction of 200 new Vande Bharat trains, 100 Amrit Bharat trains, and 50 Namo Bharat rapid rail services over the next two to three years—signaling a significant upgrade in passenger experience and speed.

• Additionally, to enhance affordability and accessibility, especially for budget-conscious travelers, 17,500 non-air- conditioned coaches will be added across the network..

• Announcement in Union Budget 2025:

Finance Minister Nirmala Sitharaman has allocated Rs.2.52 lakh crore for capital expenditure for Indian Railways, marking the second consecutive year at this funding level. This sustained investment underscores the governments commitment to modernizing railway infrastructure, with a strong focus on safety, electrification, and service expansion.

Source: Metro Rail Today / February 2025 / Issue 47 / Vol. IV

key highlights:

• In FY 2025-26, the construction of new railway lines is set to accelerate with an allocation of Rs.32,235.24 crore, while Rs.4,550 crore has been earmarked for gauge conversion. Rolling stock expenditure is capped at Rs.57,693 crore for the same period.

source : https://timesofindiaindiatimes.com/life-style/travel /news/union-budget-2025-26-200-new-vande-bharat-trains- and-more/articleshow/117886728.cms

key developments during the year:

The Company has continued to strengthen its presence in the railway sector, both in domestic and international markets. The Company successfully delivered key components for major global projects, including contributions to CAFs operations in Australia and the AKT project. Domestically, Integra played a vital role in Alstoms Delhi Metro Rail Corporation (DMRC) project and participated in multiple other metro rail initiatives across India.

In addition, the Company fulfilled orders for a variety of locomotive, metro, and semi-high-speed rail projects, reinforcing its reputation as a reliable partner and further enhancing its competitive position in the rail manufacturing industry.

During the year, the Company achieved significant operational milestones. It delivered over 3,475 fabricated enclosures for electric locomotives, supported multiple export-oriented metro projects, and supplied interior components for more than 202 metro train cars. Additionally, Integra Engineering India actively contributed to the electrification and modernization of the Indian railway network, further solidifying its role in advancing the nations rail infrastructure.

To enhance operational efficiency and expand production capacity, Integra Engineering India made strategic investments in new machinery and equipment. The construction of a new 70,000 sq. ft. production facility was completed in November 2024, significantly boosting the Companys manufacturing capabilities.

Additionally, a new corporate building designed to accommodate approximately 80 office employees was completed in January 2025.

In 2024-25, the Company experienced a notable increase in inquiries from multiple OEMs for both domestic and export railway projects, reflecting the Companys growing reputation and capabilities in the sector. A key milestone during the year was the signing of a Global Supplier Agreement with Alstom, securing a long-term, worldwide partnership. This agreement positions the Company to participate more extensively in Alstoms global supply chain and reinforces its strategic role in the international railway ecosystem.

The Company made substantial progress in its sustainability initiatives over the past year, highlighted by the installation of a 550 kW photovoltaic solar system to reduce its carbon footprint. The Companys commitment to sustainable practices was recognized with the EcoVadis Silver Medal for 2024-25, a testament to its efforts in environmental responsibility and corporate governance. These accolades reflect the Companys ongoing dedication to decarbonization, operational excellence, and sustainable growth.

Further emphasizing its culture of continuous improvement and innovation, Integra also received the Gold Award at the QCFI External Kaizen Competition.

opportunity & threats

The Company takes pride in being a preferred supplier to several reputed OEMs in the rolling stock sector. With the governments continued emphasis on infrastructure development, particularly in transport, the Company remains focused on leveraging emerging opportunities by offering its products and services to both existing and new customers. This aligns with its vision to become the preferred partner in the transport sector.

Ongoing and previously implemented measures have enhanced the Companys competitiveness, enabling a broader portfolio of offerings. The strategic focus remains on driving profitable growth through innovative product and service development, along with operational excellence.

More than 90% of the Companys total revenue is derived from contract manufacturing as an OEM supplier. As a result, business performance is closely tied to customer demand, and any fluctuation in customer requirements may impact overall performance.

Given the labour-intensive nature of the Companys product portfolio, manpower availability plays a critical role in ensuring timely delivery and consistent quality. To mitigate this risk and enhance efficiency, the Company is actively pursuing automation and semi-automation solutions where feasible, aiming to reduce dependency on manual labour while maintaining product quality.

outlook

Given the current business environment and emerging opportunities, the Companys outlook for the coming years is highly promising. Integra Engineering India is targeting continued growth, with a particular focus on addressing increasing demand in the rolling stock segment and expanding participation in metro rail projects.

The Company remains committed to consolidating its position in the rolling stock sector by supplying a wide range of fabricated components and RDSO-approved products to Indian Railways. In parallel, efforts are underway to broaden the product portfolio and actively explore opportunities in export markets.

Looking ahead, the Company plans to make further investments in advanced machinery and manufacturing process automation. Strengthening the ERP and monitoring systems also remains a priority to support operational efficiency and facilitate the anticipated growth trajectory.

The Company Strives for excellence in quality and holds various certifications as below:

• Process standards Certificates

- EN 15085 CL-1 - Welding Process for Railway - TUV Nord

- DIN 6701 CL 3 - Adhesive Bonding - TBBCert (Germany)

The Company has been qualified as welder as per American Welding Society (AWS). This is the prerequisite of our export customers in the USA.

• Product approval and certificates

- RDSO - For Metal to Metal relays, Metal to Carbon relays, LED Signal, Fuse Automatic Changeover System (FACS)

- IP 65 & 55 - Standard Enclosure designed by Integra

- CE Marking - Standard Enclosure designed by Integra

• Management standards of quality, environment and safety

- ISO 9001:2015 - Quality Standard - TUV Nord

- ISO 14001:2015 - Environmental Management - TUV Nord

- ISO 45001:2018 - Health and Safety Management - TUV Nord

material developments in human resources / industrial relations:

With a total workforce of over 900 employees—including staff, permanent employees, and contract workers—the primary objective of the Human Resources function is employee development. The Company firmly believes that its human capital is the most valuable asset in driving business success and profitability.

To support this, the Company has fostered a culture of continuous learning and development across all levels. New employees undergo an induction training program, conducted by departmental heads, which provides a comprehensive overview of the Companys operations, processes, strategic direction, and growth objectives.

Regular training sessions—both in-house and external—are organized for employees at all levels. Additionally, the Company has established a dedicated Welding Training Center to develop skilled welders and provide ongoing upskilling opportunities for the existing workforce.

The Company also places strong emphasis on employee motivation and engagement. Various initiatives are conducted periodically, including festival and birthday celebrations, sports events, and internal competitions, to foster a positive and collaborative work environment.

risks & concerns

We set out below risk that is most material to our business and performance according to current market situation. We explain mitigation strategies which help us to manage this:

Risk	Mitigation Strategy
Dependency on Rolling stock market: A sudden drop in demand of public transport solution can significantly impact the turnover and profitability of the company.	We are focusing on domestic and well as export markets to be able to accommodate shifts in regional demand. Furthermore, the machinery of the company is not segment specific and can be used for contract manufacturing for other industries as well.
Raw Material Price Volatility: Volatility in prices of raw materials can impact margins.	We have raw material (sheet metal) price variance clause with most of our customers. The mechanism of price variance clause and terms of price revision is transparent and easy to execute.
Manpower availability: Production planning and schedules vary with labour fluctuation which impacts on time delivery of the projects.	We are reasonably managing the mix of permanent labour and manpower.
	We are hiring the manpower from ITI and giving welding training. We have established a welding training center. We are continuously inspiring all our employees to take training on various matters and improving their skills.

internal control systems and their adequacy:

The Company has adequate internal control systems over the financial reporting ensuring the accuracy of the accounting systems and related financial reporting. The internal control system adheres to local statutory requirements for orderly and efficient conduct of business. The efficacy of the internal checks and control system are validated by internal as well as statutory auditors. The Audit Committee reviews the adequacy and effectiveness of the internal control system, significant audit observations and monitors the sustainability of remedial measures.

discussion on financial performance with respect to operational performance:

The Company has achieved a turnover of Rs. 16,586 lakhs for the financial year 2024-25 against the turnover of Rs. 14,682 lakhs for the previous financial year 2023-24. Further, the Company attained profit after tax of Rs. 1,849 lakhs in the F.Y. 2024-25 compared to Rs. 1,452 lakhs for the previous financial year 2023-24.

details of significant changes in key financial ratios:

Sr. No List of Ratios	Standalone		Consolidated		% of Variance	Explanation (If change in more than 25%)
	2024-25	2023-24	2024-25	2023-24
1 Operating Profit Margin Ratio (%)	17.28%	15.13%	17.28%	15.13%	14.23%
2 Net Profit Margin Ratio (%)	11.15%	9.89%	11.15%	9.89%	12.71%
3 Return on Net worth (%)	21.48%	20.89%	21.48%	20.89%	2.82%
4 Interest Coverage Ratio	12.65	18.66	12.65	18.66	-32.21%	Due to increase in debt levels for expansion
5 Debt Equity Ratio	0.41	0.32	0.41	0.32	26.18%	Due to increase in debt levels for expansion
6 Current Ratio	1.68	1.72	1.68	1.72	- 2.13%
7 Debtors Turnover Ratio	3.71	3.84	3.71	3.84	-3.43%
8 Inventory Turnover Ratio	4.64	4.86	4.64	4.86	-4.38%