MANAGEMENT DISCUSSION AND ANALYSIS REPORT
COMPANY REVIEW
Operational Overview
Jainex Aamcol Limited is a prominent manufacturer of gear hobs, special cutting tools, inspection tools, and precision accessories. With its flagship "Aamcol" brand, the Company is recognized for delivering precision-engineered products that cater to the diverse requirements of the engineering and manufacturing industries.
The Company serves a diverse customer base across various industries, including automobile manufacturers, industrial and special gearbox manufacturers, machine tool manufacturers, and other engineering sectors. Its comprehensive product portfolio comprises a wide range of gear hobs for applications such as spur and helical gears, chain sprockets, timing pulleys, worm gears, cutters, as well as inspection tools and precision accessories.
With a strong focus on quality, innovation, and precision engineering, the Company manufactures products that meet international standards. By offering world-class products, the Company not only contributes to import substitution and conserves valuable foreign exchange for the country but also strengthens Indias export potential through the supply of its products to international markets.
The objective of this Management Discussion and Analysis Report is to provide the Managements perspective on the Companys business environment, industry outlook, strategy, operational and financial performance, human resources and industrial relations, key risks and opportunities, and the adequacy of internal control systems during the Financial Year 2025-26. This report should be read in conjunction with the Companys Financial Statements, the accompanying notes thereto, and other information forming part of this Annual Report.
During the year under review, the Company continued to focus on enhancing operational efficiency, improving product quality, and strengthening customer relationships. With sustained emphasis on employee training and development, process automation, and continuous product innovation, the Company further reinforced its competitive position and remained committed to delivering high- quality, precision-engineered solutions to its customers.
The Company, under the guidance of its Board of Directors and management, has substantially completed its Expansion Project. The project is expected to strengthen the Companys manufacturing capabilities and enhance its operational efficiency by:
* Increasing the installed capacity of the existing product portfolio;
* Enabling the production of new products, including Shaper Cutters, Master Gears and Skiving Cutters;
*
Improving the quality of Big Module Hobs and Worm Wheel Hobs; and*
Enhancing overall production efficiency.During the year under review, the civil construction for the project was completed, and all the machinery required for the expansion was installed. Trial production has been successfully carried out, and commercial production of certain products has commenced. The remaining product lines are expected to commence commercial production in a phased manner, based on production schedules and market requirements.
The Board believes that the successful implementation of the Expansion Project will significantly enhance the Companys production capacity, improve product quality, broaden its product portfolio and strengthen its competitive position in the market.
Productivity Enhancement
The Company implemented a range of productivity enhancement initiatives, including retrofitting, reconditioning, automation, improved utilization of high-speed cutting tools, and cycle time optimization.
Safety Measures
Being a safety conscious organization, the Company imbibes safety across various functions of the entire plant operation. In order to protect the health of workforce at the shop floor level, it curtails the use of hazardous material inside the plant premises.
ECONOMIC OVERVIEW Global Economy
The global gear manufacturing industry continues to grow steadily, supported by rising demand from the automotive, industrial machinery, aerospace, renewable energy, mining, and robotics sectors. The increasing adoption of automation, precision engineering, electric vehicles (EVs), and advanced manufacturing technologies is driving the demand for high-performance gears and precision gearcutting tools.
According to industry estimates, the global gear manufacturing market was valued at approximately USD 88.8 billion in 2025 and is projected to reach USD 139.8 billion by 2034, registering a Compound Annual Growth Rate (CAGR) of around 5.0% during the forecast period. Growth is primarily driven by increasing industrial automation, expanding automotive production, investments in renewable energy, and the rising demand for high-precision mechanical components.
Similarly, the industrial gearbox market, a key end-user segment for precision gears and gear-cutting tools, was estimated at USD 31.9 billion in 2025 and is expected to reach USD 45.5 billion by 2033, growing at a CAGR of 4.8%. Asia-Pacific continues to dominate the market, accounting for over 40% of global demand, supported by strong manufacturing activity in countries such as China, India, Japan, and South Korea.
These favourable industry trends are expected to create sustained demand for precision gear hobs, special cutting tools, inspection tools, and precision accessories. Manufacturers with advanced engineering capabilities, stringent quality standards, and a strong export presence are well positioned to capitalize on the growing opportunities in the global market.
Indian Economy
Indias gear industry plays a vital role in supporting key sectors such as automobiles, industrial machinery, railways, defence, renewable energy, mining, and capital goods. The industry has witnessed steady growth, driven by increasing domestic manufacturing, higher investments in infrastructure, rapid industrial automation, and the Governments focus on strengthening local manufacturing through initiatives such as Make in India and the Production Linked Incentive (PLI) schemes.
India is among the worlds largest automobile manufacturing hubs, which continues to be the primary demand driver for gears and gear-cutting tools. According to industry estimates, the Indian gear market was valued at approximately USD 1.82.0 billion in 2025 and is expected to grow at a Compound Annual Growth Rate (CAGR) of 7-9% over the next five years. The growth is supported by increasing production of passenger vehicles, commercial vehicles, electric vehicles (EVs), industrial equipment, and rising exports of engineering goods.
The demand for precision gear hobs, special cutting tools, inspection tools, and precision accessories is also expected to increase as manufacturers adopt advanced machining technologies, automation, and higher quality standards. With its growing manufacturing capabilities, skilled workforce, and expanding export footprint, India is well positioned to emerge as a global hub for precision
engineering and gear manufacturing, creating significant opportunities for companies operating in the gear tooling and cutting tools industry.
INDUSTRY OVERVIEW
Domestic Auto-Components Industry
The Indian auto-components industry continued to demonstrate resilience and sustained growth during FY 2025-26, driven by robust domestic demand, increasing localisation, rising exports, and continuous investments in technology and capacity expansion. The industry remains a critical contributor to Indias manufacturing sector, supplying components to passenger vehicles, commercial vehicles, two- wheelers, tractors, electric vehicles (EVs), and industrial machinery.
The growth momentum continued into FY 2025-26, with the industry reporting a turnover of Rs. 3.56 lakh crore during the first half (April-September 2025), representing a 6.8% year-on-year growth. This performance was supported by steady domestic demand, a strong aftermarket, increased OEM supplies, and continued investments in localisation, automation, and technology upgradation. Exports during the period grew by 9.3% to USD 12.1 billion, highlighting the sectors resilience despite global economic and geopolitical challenges.
Government initiatives such as Make in India, the Production Linked Incentive (PLI) Scheme for the automobile and auto-components sector, and the continued focus on electric mobility and advanced manufacturing are expected to further strengthen the industrys long-term growth prospects. These developments are expected to drive sustained demand for precision gear hobs, special cutting tools, inspection tools, and precision accessories, creating significant opportunities for companies operating in the precision engineering and gear tooling industry.
Key Growth Drivers
The long-term growth prospects of the precision tooling and gear manufacturing industry continue to remain favourable, supported by strong macroeconomic fundamentals, increasing industrial investments, and rapid technological advancements. The key growth drivers for the industry are as follows:
Growth in the Automotive Sector: Rising production of passenger vehicles, commercial vehicles, electric vehicles (EVs), and two-wheelers continues to drive demand for precision gears and gear-cutting tools.
Industrial Automation: Increasing adoption of automation, CNC machining, robotics, and Industry 4.0 technologies is accelerating the demand for high-precision cutting tools, inspection tools, and precision accessories.
Government Initiatives: Programmes such as Make in India, Production Linked Incentive (PLI) Schemes, PM Gati Shakti, and increased infrastructure spending are encouraging domestic manufacturing and capacity expansion.
Expansion of Capital Goods and Engineering Industries: Growing investments in industrial machinery, railways, defence, aerospace, renewable energy, and heavy engineering are creating sustained demand for precision tooling solutions.
Import Substitution and Localization: Indian manufacturers are increasingly replacing imported tooling solutions with domestically manufactured products, creating significant opportunities for companies offering world-class quality and cost-effective solutions.
Export Opportunities: Rising global acceptance of Indian engineering products, coupled with supply chain diversification and the "China+1" strategy adopted by multinational companies, is opening new export markets for precision tooling manufacturers.
Technological Advancements: Continuous innovation in gear manufacturing processes, high-speed machining, advanced tool coatings, and precision inspection technologies is driving demand for technologically advanced gear hobs and cutting tools.
Focus on Quality and Productivity: Manufacturers across industries are increasingly investing in high-performance tooling solutions to improve operational efficiency, reduce production costs, and achieve superior product quality, thereby supporting long-term demand for precision-engineered tools.
Exports, Trade & Outlook
Indias engineering exports continued to demonstrate resilience during FY 202526 despite global geopolitical uncertainties, inflationary pressures, and supply chain disruptions. Supported by improved manufacturing capabilities, competitive production costs, and adherence to international quality standards, Indian engineering products continued to strengthen their presence in key export markets, including the United States, Europe, the Middle East, and Southeast Asia.
The demand for precision gear hobs, special cutting tools, inspection tools, and precision accessories is expected to remain robust, supported by growth in the automotive, industrial machinery, aerospace, defence, renewable energy, and capital goods sectors. Increasing investments in automation, precision engineering, and advanced manufacturing technologies are also expected to drive sustained demand for high-performance tooling solutions.
Looking ahead, the industry outlook remains positive. With a strong emphasis on innovation, quality, technology upgradation, and export competitiveness, the Company is well positioned to leverage emerging opportunities in both domestic and international markets. The Company will continue to focus on expanding its product portfolio, strengthening customer relationships, enhancing operational efficiencies, and increasing its presence in global markets to drive sustainable longterm growth.
Current Planning & Transition to AMP 2047
In mid 2025, India initiated the formulation of the Automotive Mission Plan 2047 (AMP 2047) to succeed the ongoing AMP 2016-26 framework (also referred to as AMP 2026). While the formal roadmap through FY 2024-25 is still part of the concluding AMP 2016-26 mandate, AMP 2047 planning is already underway via seven expert-led sub-committees targeting milestones for 2030, 2037, and 2047. This shift represents a strategic pivot aligned with the national vision of "Viksit Bharat @2047", aiming to elevate India to a global automotive power through innovation, sustainability, and export-led growth.
Strategic Focus & Policy Recommendations
The precision tooling and gear manufacturing industry is undergoing rapid transformation, driven by technological advancements, automation, digital manufacturing, and evolving customer requirements. To capitalize on these opportunities and strengthen Indias position as a global manufacturing hub, continued focus on strategic initiatives and policy support is essential.
The Companys strategic priorities remain focused on enhancing manufacturing capabilities through technology upgradation, process automation, product innovation, and continuous quality improvement. Investments in advanced manufacturing technologies, research and development, workforce skill enhancement, and digitalization will enable the Company to improve productivity, operational efficiency, and customer satisfaction.
Going forward, the Company will continue to focus on expanding its product portfolio, strengthening its domestic and international customer base, improving operational excellence, and delivering high-quality, precision-engineered products. With a strong emphasis on innovation, sustainability, and customer-centric solutions, the Company is well positioned to capitalize on the long-term growth opportunities in the precision engineering and gear tooling industry.
Opportunities, Threat and Mitigation Strategies:
Being a manufacturer of components for end-user industries, the Company is prone to market vagaries with rapid technological development and unique economic cycles. In addition, the regulatory and macroeconomic environments have a direct impact on the business. The Company has been quick to respond to any market challenges, thus making smart come backs. The Company has in place a robust mechanism to preempt merging risks and take meaningful corrective actions in a timely manner. Some of the key risks that may emerge are enlisted below, with the corresponding mitigation measures that can be adopted by the Company.
Opportunities
The Company operates in a sector that offers significant long-term growth potential, supported by favourable macroeconomic conditions, increasing industrialization, and technological advancements. The key opportunities available to the Company include:
*
Growing demand for precision gear hobs, special cutting tools, inspection tools, and precision accessories from the automotive, industrial machinery, aerospace, defence, railways, renewable energy, and capital goods sectors.* Rising adoption of automation, CNC machining, robotics, and Industry 4.0 technologies, driving the need for high-precision tooling solutions.
* Government initiatives such as Make in India, the Production Linked Incentive (PLI) Scheme, and increased infrastructure investments, which are expected to boost domestic manufacturing and engineering activities.
*
Expanding export opportunities arising from global supply chain diversification, the "China+1" strategy, and the increasing acceptance of Indian engineering products in international markets.*
Greater emphasis on import substitution, creating opportunities for domestic manufacturers to replace imported precision tooling with high-quality, indigenously manufactured products.* Increasing investments in electric vehicles (EVs), renewable energy, and advanced manufacturing, resulting in sustained demand for precision-engineered components and tooling solutions.
*
Continuous technological advancements in gear manufacturing, tool coatings, and precision machining, enabling the Company to develop innovative, value- added products and strengthen its competitive position.The Company remains committed to leveraging these opportunities through continuous investment in technology, product development, quality enhancement, operational excellence, and customer-centric solutions, thereby driving sustainable growth and creating long-term value for all stakeholders.
Threats
The Company operates in a competitive and dynamic business environment and is exposed to various internal and external risks that could impact its business performance. The key threats include:
*
Intense competition from domestic and international manufacturers, leading to pricing pressures and margin constraints.*
Volatility in the prices and availability of key raw materials, particularly highspeed steel (HSS), carbide, alloy steel, and other specialty metals, which may impact production costs and profitability.*
Fluctuations in foreign exchange rates affecting the cost of imported raw materials and the competitiveness of exports.*
Global economic uncertainties, geopolitical tensions, trade restrictions, and supply chain disruptions that may adversely affect customer demand and export markets.*
Rapid technological advancements requiring continuous investment in modern machinery, product development, automation, and research and development to remain competitive.*
Dependence on the performance of end-user industries such as automobiles, industrial machinery, capital goods, aerospace, and defence, where any slowdown may impact demand for the Companys products.*
Shortage of skilled manpower and increasing labour costs, which may affect productivity and operational efficiency.* Changes in government policies, taxation, environmental regulations, import- export policies, and compliance requirements that may influence business operations and costs.
The Company continuously monitors these risks and adopts appropriate mitigation strategies through operational excellence, technological upgradation, cost optimization, product diversification, prudent financial management, and a strong focus on quality and customer satisfaction to ensure sustainable business growth.
Mitigation Strategies
The Company has established appropriate risk management practices to identify, assess, monitor, and mitigate risks that may impact its business operations and financial performance. The key mitigation strategies adopted by the Company are as follows:
Technology Upgradation: Continuous investment in advanced manufacturing technologies, CNC machinery, automation, and process improvements to enhance productivity, quality, and operational efficiency.
Product Diversification: Expanding the product portfolio and developing value-added precision tooling solutions to cater to diverse industries and reduce dependence on any single product segment or customer.
Quality Assurance: Maintaining stringent quality control systems and adherence to international quality standards to ensure superior product performance, customer satisfaction, and long-term business relationships.
Supply Chain Management: Strengthening procurement processes, maintaining strategic inventory levels, and developing a diversified supplier base to minimize disruptions in the supply of critical raw materials.
Cost Optimization: Implementing continuous cost-control initiatives, improving manufacturing efficiencies, reducing wastage, and optimizing resource utilization to protect operating margins.
Customer Diversification: Expanding the domestic and international customer base across multiple industries and geographies to reduce concentration risk and enhance business stability.
Research & Development and Innovation: Focusing on continuous product development, innovation, and technology enhancement to meet evolving customer requirements and remain competitive in the global market.
Human Resource Development: Investing in employee training, skill development, and workplace safety to build a competent workforce and improve operational effectiveness.
Strong Internal Controls: Maintaining a robust internal control framework, periodic internal audits, and effective compliance monitoring to safeguard assets, ensure regulatory compliance, and support sound corporate governance.
Through these measures, the Company strives to effectively manage business risks, strengthen operational resilience, and create sustainable long-term value for its stakeholders.
Segment wise or Product-wise Performance
The Companys segment-wise performance for the financial year 2025-26 is as under:
| (Amt. in Lakhs) | ||
Sl. No. |
Segment |
Performance |
1. |
Gear Hobs |
1786.43 |
2. |
Milling Cutters |
480.85 |
3. |
Spline Gauges |
179.01 |
Internal Control Systems and their Adequacy
The Company, being a listed entity, has established a sound internal control framework in compliance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. These controls are designed to provide reasonable assurance regarding the accuracy and reliability of financial reporting, timely compliance with applicable laws and regulations, and the effective management of operations. The internal control environment includes well-documented policies, clearly defined authority levels, segregation of duties, and automated systems that support key processes.
The Company has well-defined policies and standard operating procedures covering all key business functions, including procurement, production, inventory management, sales, finance, human resources, and statutory compliance. Appropriate checks and balances, delegation of authority, and approval mechanisms have been implemented to ensure transparency and accountability in business operations.
The Internal Auditor conducts periodic audits based on a risk-based audit plan approved by the Audit Committee. The audit findings, observations, and recommendations are regularly reviewed by the Audit Committee and the management, and necessary corrective and preventive actions are implemented in a timely manner. The Audit Committee also monitors the effectiveness of the internal control systems and the adequacy of the risk management framework.
Based on the reviews conducted during the year, the management is of the opinion that the Companys internal control systems are adequate and operating effectively. No material weaknesses in the design or operation of internal controls were observed that could have a significant impact on the Companys financial reporting or business operations during the Financial Year 2025-26.
Discussion on Financial Performance with Respect to Operational Performance
During the financial year 2025-26 under review, there was increase in the turnover of the Company as compared with the previous year i.e. from Rs. 2378.73 Lakhs to Rs. 2671.16 Lakhs.The Company has reported Net Profit of Rs. 139.15 Lakhs against Net Profit of Rs. 34.49 Lakhs in the previous year.
Support Systems
The Company has established robust support systems that are commensurate with the nature and scale of its operations to ensure smooth and efficient business functioning. It continuously invests in modern manufacturing technologies, quality control processes, information technology infrastructure, and employee training to enhance operational efficiency and product quality. Well-defined procurement, inventory management, and customer support systems enable timely execution of orders and strengthen customer relationships. The Company also emphasizes continuous skill development of its workforce, effective supply chain management, and strong governance practices to support sustainable growth, improve productivity, and maintain its competitive position in the precision engineering and gear tooling industry.
Cautionary Statement
Statements made in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations, or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, government policies and regulations, taxation, market demand, raw material prices, foreign exchange fluctuations, competitive pressures, technological developments, geopolitical events, and other risks beyond the Companys control. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are advised to exercise due caution while relying on such forward-looking statements.
By and on behalf of the Board of Directors |
||
For Jainex Aamcol Limited |
||
Place: Aurangabad |
Kunal Bafna |
Prashant Wadile |
Date: 28/07/2026 |
Whole-time Director |
Whole-time Director |
DIN:00902536 |
DIN: 08010243 |
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