International Combustion (India) Ltd Management Discussions

The Management Discussion & Analysis Report for the Financial Year ended 31st March, 2025 as required under Regulation 34 of the Securities & Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, read with Schedule V to the said Regulations, is presented below:

1. Industry Structure & Developments

The revenue from operations during the year under review was Rs. 292.98 crores as against Rs. 296.78 crores during the previous year, resulting in a profit before tax from operations of Rs. 13.54 crores during the year under review as against Rs. 32.07 crores during the previous year.

During the year under review, there was a slowdown in the engineering industry and particularly in the steel and mining sectors and many of the projects in which the Company actively participated, were deferred. This affected the growth of the Company during the year under review.

There were also challenges of unreliable supply chain and increase in the input cost of raw material and components during the year under review, thereby adversely affecting the operating costs.

2. Strength & Opportunities

For the products manufactured by Heavy Engineering Division & Gear Box and Geared Motor Division, your Company is recognised as a technology leader. The Company, however, is consistently upgrading its technology for the products of these divisions.

The manufacture of various building material products such as Dry Mortars with advanced technology under licence agreement from CAPA, Spain, have received excellent market response and acceptance, though the Division is yet to break-even. The requirement of such high end products are expected to grow further in the coming years.

3. Threats

One has to recognise that a big part of the operations of the Company is supply of capital machinery to various projects in the core sector industries such as steel plants, mining industry, etc. Unfortunately, the time lag between finalisation of order, supply of the machinery and commissioning of the same is substantial and the unstable and rising input costs always poses a big challenge before the Company.

4. Risks & Concerns

The Risk Management Plan adopted and updated by the Board specifies periodic identification of risks likely to affect the business adversely, rating the risks, their importance, risk identification procedures and implementation of risk mitigation plans. The executive management is continuously monitoring the identification of the risks in various business areas & is also developing various mitigation strategies & plans in these areas to reduce the adverse effects of such risks.

The presence in India of players with low cost products has intensified the competition in the large domestic market consequently shrinking the margin for the Companys products.

Managing the Companys funds and liquidity is also a key factor. Therefore, collection of sale proceeds promptly from the customers is also considered as an area where risk is involved.

5. Outlook

The Company currently operates in three strategic business segments/ divisions, namely, Heavy Engineering, Geared Motors and Building Material. A new business vertical of Industrial Gear Box (within the Geared Motors segment) is being introduced in the current financial year. This is a large business vertical with demand across various industry areas and has a strong growth potential.

Future outlook for these segments are given below Heavy Engineering Division

The heavy engineering division, which manufactures industrial machinery for various core sector industries including steel, mining and mineral beneficiation, has seen a slowdown during the year under review. However, these sectors are currently showing trend of progressive reversal and the Company, therefore, expects a reasonable growth in this business segment in the current year.

Geared Motor & Gear Box Division

The products of this division, which manufactures geared motors, under licence from Bauer, Germany, are mostly required for OEM market and core sector industries such as steel, mining, power and also various other sectors such as material handling. For the current year, the Company expects a reasonable growth in this business segment.

The Company is pleased to inform that, keeping the future growth in view and in line with the “MAKE IN INDIA” initiative, the Company has entered into a new business area of Industrial Gear Boxes, which has been registered under the brand name of “IC TORQUE DRIVE”.

The market response to this product has been positive and highly encouraging and the Company expects to deliver the first units by the middle of the current financial year. This product is expected to be a major contributor to the business of the Company in the future.

Building Material Division

The technology offered by CAPA, Spain for the building material products has been recognized by the market to be of the highest standard. Though the demand for these products is high and growing at a fast pace, for the year under review, there has not been any growth of the business of this division, which was primarily on account of inadequate market reach.

CAPA is actively supporting development of the business of these products. The marketing infrastructure is also being expanded to increase the market reach. The Company expects substantial growth in this business segment in the current and future years.

6. Internal Control Systems and their Adequacy

The Company has an established Internal Financial Control System commensurate with its size and nature of operations to ensure that all assets are safeguarded and the system has been designed in order to ensure orderly and efficient conduct of its businesses, the accuracy and completeness of its accounting records and timely preparation of reliable accounting and financial information.

The system also ensures compliance with applicable statutory / corporate policies, viz. the Code of Conduct of the Company, Vigil Mechanism (Whistle-Blower Policy), the Related Party Transactions Policy and the Risk Management Plan and other corporate policies.

The Internal Control Systems are routinely tested by the Management, the Statutory Auditors and the Internal Auditors, who submit their Reports on half-yearly basis to the Management and the Audit Committee. The Audit Committee reviews the reports of the Internal Auditors and addresses significant issues raised by both the Internal Auditors and the Statutory Auditors.

The Committee also follows up on the implementation of the corrective actions suggested by the Auditors in order to ensure the adequacy of the Internal Control Systems.

7. Financial /Operational Performance

(Rs. in lakh)

Particulars	2024-2025	2023-2024
Revenue from Operations	29298	29678
Profit/(Loss) Before Tax & Extra-Ordinary Items	1354	3207
Extra-Ordinary Items	281	-
Profit/(Loss) Before Tax but after Extra-Ordinary Items	1635	3207
Profit/(Loss) after Tax	1495	1995
Net Cash Flow from Operations	1235	584
Profit/ (Loss) Before Tax to Sale (%)	4.62	10.81
Basic EPS (Rs.)	62.54	83.48

8. Segment-wise Performance

(Rs. in lakh)

Particulars	2024-2025	2023-2024
Segment revenue (Sales & Other Operating Income)
a) Mineral & Material processing & Handling Equipment	19714	19733
b) Geared Motor and Gear Box	7584	8127
c) Building Material	2516	2546
Net Sales/Income & Inter-Divisional Transfer	29814	30406
Less: Inter-Segment Transfer	516	727
Net Sales/Income from Operations	29298	29678
Segment Result (Profit before Tax & Interest)
a) Mineral & Material processing & Handling Equipment	5320	5820
b) Geared Motor and Gear Box	(70)	381
c) Building Material	(255)	(51)
Total	4994	6150
Less : Finance Cost	500	311
Other Unallocable Expenditure, net of unallocable Income	3141	2633
Total Profit/(Loss) before Tax from Operations	1354	3207

9. Details of Key Financial Ratios & Return on the Net Worth

Details of Key Financial Ratios, alongwith detailed explanations for significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) and Return on Net Worth, alongwith detailed explanations for any changes in the same as compared to the immediately previous financial year are given below :-

Sl. No.	Particulars	Current FY ended March 31, 2025	Previous FY ended March 31, 2024	% Change between Current FY & Previous FY
1	Debtors Turnover Ratio	4.14	5.16	(19.77) %
2	Inventory Turnover Ratio	4.25	4.75	(10.53) %
3	Interest Coverage Ratio	3.71	11.33	(67.26) %
4	Current Ratio	1.87	1.73	8.09 %
5	Debt Equity Ratio	0.24	0.26	(7.69) %
6	Operating Profit Margin (%)	5.83 %	11.23 %	(48.09) %
7	Net Profit Margin (%)	5.08 %	6.68 %	(23.95) %
8	Return on Net Worth (%)	11.76 %	17.98 %	(34.59) %

Notes: 1. The above ratios are based on the financial statements of the Company.

2. Previous years figures have been rearranged wherever necessary.

3. Interest Coverage Ratio declined substantially during the Financial Year 2024-25 due to the higher interest costs and lower Earnings before Interest & Taxes during the said Financial Year.

4. Due to the higher operating costs without growth in sales during the year under review, the operating profit margin during the said year showed significant decline.

5. Due to the higher operating costs without growth in sales during the year under review, the net profit margin during the said year showed decline.

6. Due to the higher operating costs without growth in sales during the year under review, the return on net worth during the said year showed significant decline.

10. Human Resources/Industrial Relations

The various Human Resources development programmes undertaken by the Company for all its Divisions and operational areas would lead to development, optimization and efficient engagement of the human resources.

Industrial Relations for the year under review at all units of the Company remained cordial.

The number of personnel employed by the Company across all its units and offices was 562 as on 31st March, 2025.

11. Cautionary Statement

Certain statements in this reports relating to Companys objectives, outlooks, projections, expectations etc. may be “forward looking statements” within the meaning of the applicable laws and regulations. Although the Company believes that the expectations reflected in such “forward looking statements” are reasonable, the Company does not and cannot guarantee the accuracy of various assumptions underlying such expectations. Accordingly, actual results or performance could differ materially from such expectations, projections etc., whether expressed or modified, due to changes in global economy and business conditions, changes in political environment, changes in Government regulations, tax laws, external economic condition affecting demand and supply, price conditions in the market in which the Company operates, natural phenomena such as flood and earthquake, customers strategies etc. over which the Company does not have any control. The Company does not assume any responsibility/ obligation in respect of such forward-looking statement which may undergo changes in future on the basis of subsequent developments or events.

	For & on behalf of the Board
Place: Kolkata	S. Bagaria
Date: 26th May, 2025	Chairman