IP Rings Ltd Management Discussions

GLOBAL The global economy has been shaken by several ECONOMY being the United States decision to impose tariffs disruptions over the past year. The most notable one outbreak of war in the Middle East. While these trade on goods imported from its trading partners and supply chains, and increased costs for businesses and measures have unsettled global markets, disrupted geopoliticalconsumers alike, a widespread conflict, worsening fragmentation, a reassessment of productivityintelligence, or a renewed flare-up of trade tensions expectations resulting from artificial financialcould significantly weaken growth and destabilize markets. In retaliation, many countries intensifying tensions and weakening international introduced their own tariffs and trade restrictions, slowed, financial markets have become more volatile, trade flows. As a result, global economic growth has have grown. The war is the latest culmination in a and concerns over the future of global trade cooperation relations and raising geopolitical tensions markedly series of events that have been reshaping international across all region in recent years. support,However, Technology investment, fiscal and monetary accommodative financial conditions, and The economic activity has shown notable resilience in private sector adaptability offset trade policy shifts. the short term. and 3.2 percent for 2027, revised slightly up since the Global growth is projected at 3.3 percent for 2026 October 2025 World Economic Outlook. The global automotive industry is moving through THE GLOBAL AUTO INDUSTRY While innovation across the value chain continues to one of the most transformative periods in its history. consumer whose expectations around value, access, accelerate, the industrys center of gravity remains the are not only seeking reliable transportation, but also and experience are rapidly evolving. Consumers today sustainability,demanding greater personalization, digital connectivity, and convenience throughout the ownership journey.

Electrification, connected technologies, autonomous This shift is reshaping the competitive landscape. marketed, and serviced. At the same time, economic redefining how vehicles are designed, manufactured, pressurespurchasing andbehavior,changingencouraginglifestyles areconsumersinfluencing to experiences. prioritize affordability, flexibility, and seamless digital significantly since 2020, increasing by approximately New vehicle prices across the US and Europe have risen higher raw material costs, and persistent supply chain 15 25% because of inflation, semiconductor shortages, disruptions. elevated interest rates, tighter credit conditions, and Against a backdrop of constrained household incomes, mature automotive markets is expected to remain broader macroeconomic uncertainty, demand in the US and Europe are projected to stagnate through under pressure. As a result, vehicle sales volumes in may limit long-term growth in these regions. 2030, reflecting a structural affordability ceiling that INDIAN Despite ongoing uncertainty in the global economy, ECONOMY as highlighted by the First Advance Estimates (FAE) India continues to maintain a strong growth trajectory, Programme Implementation (MoSPI). The estimates for FY26 released by the Ministry of Statistics and Value Added (GVA) growth at 7.3 per cent, exceeding project real GDP growth at 7.4 per cent and Gross estimates presented in the Economic Survey 2024 25.earlier forecasts by various agencies as well as the worlds fastest-growing major economy for the fourth This performance reinforces Indias position as the consecutive year.

THE The automobile Industry in India is considered one INDIAN AUTO INDUSTRY revenue. It is also one of the most important drivers of of the most important economic sectors in terms of participation in global value chains. One of the reasons the economic growth of India and also one with high strong government support which has helped it carve a behind the growth of the automobile industry is the unique path among the manufacturing sectors in India.

manufacturing practices. The sectors environmental player in driving the shift toward more sustainable impact, including emissions from production and end-of-life vehicle disposal, has prompted significant circular economy models. efforts to reduce carbon footprints and embrace demand of a lower and middle-income group of the Automobile production in India uniquely caters to the amongpopulation which makes the sector stand out in India the other automobile-producing countries. jobs and as many as 26.5 million more in the value The auto industry directly supports over 4.2 million contributionchain during the year 2025. As of 2025, the estimated of automotive industry in India is USD 240 billion. cent in H1 FY26 to reach 3.56 lakh crore (USD 41.2 The Indian auto component industry grew by 6.8 per Electric vehicles accounted for 4.6 percent of total billion), compared with the same period last year. towards new-age mobility. supplies to OEMs, underscoring the steady transition REVIEW The financial year 2025-26 was a better year for the OF BUSINESS OPERATIONS against total sales of Rs. 303 Crores during the previous Company with sales hovering around Rs. 337 Crores as financial year. business resilience through proactive risk mitigation, The Company remains focused on strengthening disciplined capital allocation. operational excellence, technology adoption, and Companys product portfolio. While continuing to A key strategic priority is the diversification of the combustion engine (ICE) components, the Company strengthen its leadership in traditional internal includingis steadily expanding into adjacent product categories, chassis and other precision-engineered participate in a broader range of vehicle platforms, components. This approach enables the Company to create sustainable long-term growth opportunities. The reduce dependence on any single product segment, and to build a balanced global business. The strategic Company is also pursuing geographic diversification mix across the domestic market, Europe, the United objective is to establish a well-diversified revenue States, and the Rest of the World (ROW). This balanced the Companys ability to respond to evolving customer stability, reduce market-specific risks, and improve requirements across geographies. is expanding into high-value precision engineering As part of its long-term growth strategy, the Company aerospace.sectors beyond the automotive industry, including This diversification leverages the engineering expertise, and process excellence, while Companys manufacturing capabilities, quality systems, driven growth. opening new avenues for sustainable and technology-added manufacturing by expanding its presence in The Company is also increasing its focus on value-strategic shift enhances customer value, strengthens sub-assemblies across both its business divisions. This improves realization, and creates opportunities for integration with customer manufacturing processes, deeper and longer-term business partnerships. Operationalcornerstone of the Companys strategy. Investments in efficiency continues to remain a engineering, tooling, quality enhancement, energy digital manufacturing, process automation, advanced are being undertaken to improve competitiveness and efficiency, and productivity improvement initiatives strengthen its engineering capabilities to support new operational performance. The Company continues to response to customer requirements. product development, process innovation, and faster to support both near-term competitiveness and long- The Companys capital expenditure strategy is designed in a balanced manner, with approximately equal term growth. Capital investments are being deployed growth-oriented capacity expansion. This disciplined emphasis on efficiency improvement initiatives and of manufacturing capabilities while creating capacity investment approach ensures continuous enhancement for future business opportunities. toLooking ahead, the Company remains committed building a diversified, technology-driven, and management, continuous operational improvement, globally competitive business. Through prudent risk products, geographies, and market segments, the strategic investments, and expansion into new growth and create long-term value for all stakeholders. Company is well positioned to deliver sustainable

OPPORTUNITIES AND THREATS

India is currently placed as one of the top seven global OPPORTUNITIES: the Indian auto component market has recorded a auto component suppliers. Over the past five years, of the global auto component market share, with a strong CAGR of about 10 percent. India holds 4 percent industry is also a contributor to economic growth and market size of about $75 billion. The auto component employment. percent of Indias manufacturing GDP and 2.7 percent In 2024, the industry accounted for approximately 25 skilled and semi-skilled workers. Based on these of its total GDP. The industry supports nearly 5 million industry is likely to reach a market size of $200 billion competitive advantages, the Indian auto component and increasing exports to mature markets. by 2030, further helped by strong domestic demand demand from both domestic and export customers. To The Company is witnessing a significant surge in hascapitalize on these growth opportunities, the Company made substantial investments in technology Rings Divisions. It also expects to achieve higher upgradation and capacity expansion for its OCF and product development (NPD) initiatives and expanding volumes from existing products by leveraging new its presence in the aerospace industry.

Thecapabilities for manufacturing forging dies, enhancing Company has established in-house tooling on external sources. In addition, it has entered into operational efficiency and reducing dependency is expected to contribute significantly to energy cost agreements for the procurement of solar power, which initiatives aimed at reducing scrap generation and savings. The Company has also implemented various positive impact on operational efficiency and overall improving productivity, which are expected to have a profit margins. technologies to meet customer demand and is also The Company is continuously working on evolving its Parameters (ESG) parameters focused on by the mindful of the Environmental, Societal and Governance resources with scientific and engineering background government. Dedicated and talented pool of human capabilities. augurs well for the company as it enhances the research

The automotive components industry continues to THREATS: import tariffs, geopolitical uncertainties, supply chain face several challenges arising from fluctuating U.S. is also experiencing pressure from rising input costs, disruptions, and volatile global demand. The industry order volumes. margin compression, and fluctuations in customer fluctuations and inflationary pressures, as these factors The Company remains vigilant in monitoring currency overall business performance. In the Rings Division, could significantly influence customer demand and is expected to impact demand for components used in the ongoing transition towards Electric Vehicles (EVs) To sustain its competitive position and capitalize on traditional Internal Combustion Engine (ICE) vehicles. toemerging opportunities, the Company will continue invest in research and development, product innovation, and technology enhancement.

SEGMENT WISE /PRODUCT WISE

Your company operates in a single segment that is PERFORMANCE Piston Rings, Forgings, Crank Pin and Tooling. On the automotive, but the company has 4 products namely followed by Piston rings 20%, Crank pin 8% and finally performance, Forgings contribute to 70% of the sale and export sales. All the products are supplied either tooling with 2%. The Forgings sales includes both local to the OEM. Your company supplies to all types of to the OEM directly or to Tier-1 who in turn supply Heavy commercial vehicles and to a Niche and high end vehicles ranging from two wheelers to Medium and vehicles.

The automotive industry is entering a period of OUTLOOK: and autonomous technologies to changing consumer unprecedented transformation. From electrification must be prepared to adapt. Our automotive industry preferences and global economic pressures, businesses forecastsaccurate market intelligence available, empowering provide the most comprehensive and and capitalize on emerging opportunities in a rapidly organizations to anticipate trends, mitigate risks, evolving market. standards are set to be key drivers of the automotive Declining EV costs and tighter CO and fuel efficiency markets transition toward electrification.

OurRISKriskANDmanagementCONCERNS: procedures consider both externalmitigation andstrategies.internal Riskthreatsidentification,to devise analysis, effective by the Management. mitigation and monitoring are undertaken periodically disruptions, increasing energy prices, shortages of The Key risks confronting the industry are supply chain Your company is actively working on entering new skilled labour, growing expectations of the customers. risk and supply quality products to its customers.markets and diversifying its business to mitigate the working with its suppliers and customers to reduce On raw material prices, your company is actively the impact.

INTERNAL Your companyFINANCIAL CONTROL SYSTEM: has a strong and well-ingrained internalplan is developed in consultation with the operating controls framework. The internal audit critical risks that matter and is aligned to the business management / Statutory Auditors with focus on every quarter and reviews the key internal / statutory objectives of the Company. The Audit Committee meets from internal audit reviews. The Audit and Assurance audit findings and the management actions emanating and efficacy of internal controls the risks involved function reassures the Board about the adequacy and helps in anticipating/mitigating emerging and evolving risks.

FINANCIAL PERFORMANCE

HUMAN Our Company continues to focus on the development of its human resources to improve its performance. As on March RESOURCES AND INDUSTRIAL RELATIONS to provide a conducive work environment that empowers people to excel. The human resource team implemented 31,2026 the company currently has approximately 1300 employees including contract labour. The Company strives and talent retention. The Company prioritizes safety, health and overall wellbeing of all employees including the several programs such as Training, Learning and Development, employee engagement, performance management contract workforce.

EXPLANATIONS

Your Directors hereby present the compliance report on Corporate Governance.