Jyoti CNC Automation Ltd Management Discussions

ECONOMIC OUTLOOK:

Global Economy

In FY 2025-26 the global economy absorbed two large shocks and but kept growing. The first was dominated by tariff related policy, geopolitical tensions which have unsettled the global supply chains. Investment decisions across capital-intensive industries were deferred worldwide as businesses waited for clarity. Governments across the world were busy renegotiating trade agreement / arrangement with other countries, regions. The second shock arrived in late February 2026, when hostilities in the Middle East disrupted shipping through the Strait of Hormuz, a corridor carrying roughly a fifth of the worlds oil and liquefied natural gas.

Working against these headwinds was an exceptionally strong investment cycle in artificial intelligence and semiconductors, which lifted activity in economies positioned within the technology value chain and cushioned global output more than had been anticipated.

Indian Economy

India navigated the year better than most. The first half was defined by tariff-related uncertainty on the export front; the second by a series of domestic reforms that shifted the growth impulse decisively inward. The rationalisation of GST rates from September 2025, implementation of the long-pending labour codes, a lower personal income tax burden, benign inflation and the transmission of substantial policy rate cuts together sustained momentum even as external demand faltered. Inflation fell to multi-year lows for much of the year, allowing the Reserve Bank to complete a meaningful easing cycle before pausing as energy prices turned. The Union Budget presented in February 2026 reinforced the capital expenditure-led strategy, with a record allocation to infrastructure and defence and dedicated schemes for capital goods, semiconductors, rare earths and industrial cluster renewal.

The Indian Economy exhibited resilience in 2025 26, amidst several external headwinds, supported by strong private consumption, sustained investment and sound macroeconomic fundamentals. Going forward, Indias economic outlook remains positive, though the West Asia conflict and the attended risks of elevated energy prices, supply chain disruptions, financial market volatility, uncertainty surrounding global trade policies and weather-related disruptions could pose headwinds to growth and inflation in the short run.

Indias long-term growth outlook remains strong, supported by the government focus on Atmanirbhar Bharat, improving Indias standing as a manufacturing half of the year hub and continued investment in infrastructure, which is supporting expansion of domestic manufacturing capacities. On the global front as well, a better clarity around tariffs, along with free trade agreements with key economies such as the EU and the U.S. is expected to support export-oriented industries. Improved visibility on global trade should strengthen a demand across the international markets and create additional growth opportunities for companies like ours.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The machine tool industry is widely regarded as the "mother industry" of manufacturing, as it produces the metal-cutting and metal-forming equipment on which virtually every engineering and capital-goods sector ultimately depends. Within this industry, Computer Numerical Control (CNC) metal-cutting machines lathes, turning and turn-mill centres, vertical and horizontal machining centres, and multi-axis (including 5-axis) machines represent the largest and fastest-growing product category, driven by the demand for higher precision, productivity, repeatability and automation.

India is among the worldssignificantconsumers of machine tools, with domestic consumption estimated at approximately...

US$ 3.7 billion

in FY 2024–25 (Source: IMTMA).

However, a substantial portion of domestic demand continues to be met through imports, and machine tool imports rose sharply during 2025, underscoring both the strength of underlying demand and the structural opportunity for import substitution under Make in India and Aatmanirbhar Bharat.

The sectors fortunes are closely linked to the capital-expenditure cycles of its end-user industries and to the broader manufacturing economy. Indias sustained GDP growth, the Governments continued thrust on domestic manufacturing through Production Linked Incentive (PLI) schemes, infrastructure and defence capital outlays, and the Ministry of Heavy Industries "Enhancement of Competitiveness in the Capital Goods Sector" initiative have collectively supported demand creation across user segments.

Historically, the automotive and auto-component sector has been the single largest consumer of machine tools in India. During the year under review, the industry continued to witness a structural broadening of its demand base, with growing contributions from aerospace and defence, electronics manufacturing services (EMS), electric vehicles, railways, medical devices, general engineering, and dies and moulds. Alongside this diversification, customer requirements are shifting decisively towards higher-end, multi-axis and automation-enabled machines, and towards Industry 4.0-enabled digital manufacturing, in built process monitoring and data-driven productivity solutions.

Your Company operates in the high-precision, high-value segment of the metal-cutting CNC machine market, where it is among the leading domestic manufacturers with an estimated domestic market share of approximately 10 12%.

OPPORTUNITIES

• Import substitution and "Make in India": Indias continued dependence on imported machine tools, particularly in the high-precision and multi-axis categories,presents significantand durable opportunity for domestic manufacturers to expand share.

• Indigenisation: Sustained domestic and global defence procurement, offset obligations and the localisation of component manufacturing in premium end user industry like aerospace, are driving demand for high-specification machines, where the Company has built deep capability.

• Electronics, semiconductors and EMS: Government incentives for electronics and semiconductor manufacturing are creating a new and rapidly growing demand pool, complemented by the Companys own backward-integration initiatives into electronic components.

• Electric mobility: The transition to electric vehicles is generating demand for new component geometries and dedicated tooling.

• Premiumisation of the product mix: A growing share of demand for high-end machines (typically priced above 2 crores,) supports a richer, more margin-accretive revenue mix.

• Capacity expansion: Ongoing expansion of installed capacity in India, together with the doubling of capacity at the Huron facility in France, positions the Company to convert ordervisibility into deliveries.

• Global market access and services: The Huron platform provides access to European and other international markets, while Industry 4.0, automation and after-sales/service offerings open recurring-revenue opportunities. The new customer-support and technology hub at Tumakuru, Karnataka, further strengthens the Companys service reach.

THREATS

• Cyclicality: Demand is sensitive to the capital-expenditure cycles of customer industries and to broader macro-economic and interest-rate conditions.

• Competition and imports: The Company faces competition from established global manufacturers and from low-cost imports, which can exert pressure on pricing and market share.

• Geopolitical, trade and export-control risk: Cross-border supply of machines to strategic sectors is subject to evolving export-control and sanctions regimes and to geopolitical uncertainty that can affect order flows and supply chains.

• Foreign-exchange volatility: Euro-denominated operations through Huron and export ceivables expose the Company to currency movements.

• Supply-chain dependence: Reliance on certain imported critical components, such as CNC controllers and precision motion elements, exposes the business to supply-chain disruption and input-cost inflation.

• Technological change: Rapid advances in automation, digital manufacturing and machine technology require continuous investment to avoid obsolescence.

• Talent availability: Scaling operations depends on the availability and retention of skilled engineering and manufacturing talent.

SEGMENT-WISE / PRODUCT-WISE

PERFORMANCE:

In accordance with Ind AS 108 Operating Segments, the Company operates predominantly in a single reportable business segment, namely the manufacture and sale of CNC machines and related products, as its operations are subject to similar risks and returns and resources are allocated on an integrated basis. Performance is therefore discussed below by end-user industry and by product, which is the basis on which management reviews the business.

Performance by end-user industry

The Companys order book remained healthy and well diversified during the year. As at 31 March 2026, the consolidated order book stood at approximately 4,732 crores, providing forward revenue visibility of around 18 20 months. The broad composition of the order book by end-user industry was as follows:

Product Portfolio

The Company offers a comprehensive range of more than 200 product variants, including 5-axis CNC machines, CNC turning centres, CNC turn-mill centres, CNC vertical machining centres (VMCs) and CNC horizontal machining centres (HMCs). Its global installed base exceeds 1,35,000 machines across more than 60 countries, reflecting a deep and longstanding customer relationship base.

The product portfolio is broadly categorised, on the basis of price realisation, into Entry-Level, Mid-Level and High-End segments. Pricing is primarily a function of the accuracy, complexity and precision required in the end-use machining application, with the level of technological sophistication embedded in the machine being a further determinant.

Financial Performance

On a consolidated basis, the Company recorded revenue from operations of approximately 2,093 crores in FY 2025–26, as against approximately 1,819 crores in FY 2024–25, representing growth of about 15%, with profit after tax of approximately 336 crores. A detailed discussion of financial performance with reference to operational performance, and significantchanges of in key financial ratios, is provided in the relevant subsections of this Report.

Operations and overseas subsidiary

During the year, the Company progressed its capacity-expansion programme in India and, through its French subsidiary Huron Graffenstanden SAS, inaugurated expanded production facilities at Strasbourg (in November 2025), effectively doubling capacity there to better serve rising aerospace demand. International order wins including orders booked through Huron added further depth to the order book and reinforced the Companys global positioning.

OUTLOOK:

The Company enters FY 2026 27 with a healthy and well-diversified order book providing forward revenue visibility of approximately 18 20 months, which underpins a positive near-term growth outlook. The structural tailwinds supporting the Indian machine tool industry Make in India and import substitution, defence and aerospace indigenisation, incentives for electronics, semiconductor and EMS manufacturing, and the electric-mobility transition are expected to continue to drive demand across the Companys key end-user segments.

The order mix reflects the Companys deliberate tilt towards higher-valuework: significantproportion of the order book approximately 40% comprises high-end machines (typically priced above 2 crores,), supporting a margin-accretive revenue profile, while entry- and mid- level machines address the broader engineering market. Aerospace and defence continued to be the largest contributor to the order book during the year, supported by both domestic procurement and international orders.

To convert this demand into deliveries, the Company is scaling installed capacity in India and has expanded capacity at its Huron facility in France. The continued tilt of the order book towards high-value, multi-axis machines, together with indigenisation of critical components, is expected to support a favourable product mix and margin trajectory over the medium term, while strengthening the resilience of the supply chain.

At the same time, the Company remains watchful of external factors that could influence performance, including global macro-economic and geopolitical conditions, foreign-exchange movements, input-cost inflation, the pace of customer capital expenditure, and the timely execution of its expansion plans. Taking these factors together, management remains cautiously optimistic about the Companys prospects, subject to the Cautionary Statement set out in this Report.

RISKS AND CONCERNS:

The Company has a structured risk-management framework through which the Board and management identify, assess and monitor key risks and put in place appropriate mitigation measures. The principal risks and concerns relevant to the business are summarised below:

• Demand cyclicality: The business is exposed to the capital-expenditure cycles of its customer industries and to broader economic conditions. The Company mitigates this through a diversified end-user mix and a substantial order backlog that provides revenue visibility.

• Sector and customer concentration: An increasing share of revenue and order book is derived from aerospace and defence. While this segment is margin-accretive, the Company manages concentration risk by maintaining a presence across multiple end-user industries and geographies.

• Competition and pricing: Competition from global manufacturers and low-cost imports can pressure pricing and share. The Company seeks to differentiate through precision, product breadth, vertical integration and after-sales service.

• Foreign-exchangerisk: Euro-denominated operations through Huron and foreign-currency receivables and payables expose the Company to currency volatility, which it manages through its treasury and hedging policies.

• Geopolitical, trade and export-control risk: Supply of machines to strategic end-users is subject to evolving export-control and sanctions regimes and to geopolitical uncertainty. The Company maintains compliance processes to address applicable trade-control obligations.

• Supply-chain and input-cost risk: Dependence on certain imported critical components and on key raw materials (including castings and electronics) exposes the Company to disruption and cost inflation; indigenisation initiatives and vendor diversification are intended to reduce this exposure over time.

• Technology obsolescence: Rapid technological change requires continuous investment in research and development; the Company maintains a dedicated R&D function to keep its product range current.

• Human capital: The Companys growth depends on attracting and retaining skilled engineering and manufacturing talent, which it addresses through training, development and engagement initiatives.

• Working-capital intensity: High-value machines involve long execution cycles, which can result in elevated working-capital requirements; the Company manages this through advances, milestone-based billing, receivables management and working capital financial facilities from its bankers.

• Interest-rate and funding risk: Debt-funded capacity expansion exposes the Company to interest-rate movements and refinancing risk, managed through a balanced funding mix of internal accruals and debt.

• Overseas operations and subsidiary matters:

_ Through its material subsidiary Huron Graffenstanden SAS, France, the Company is exposed to overseas legal, regulatory and operating environments. A matter concerning the subsidiary has been disclosed to the Stock Exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and is being monitored by the Board and management. The Company will continue to make appropriate disclosures in accordance with applicable law.

• Regulatory and compliance risk: As a listed company with cross-border operations and remittances, the Company is subject to obligations under the Companies Act, 2013, SEBI Regulations, FEMA and applicable tax and other laws, compliance with which is overseen through its internal control and compliance framework.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Jyoti CNCs internal control system is designed to adapt to evolving operational needs and provides reasonable assurance on the accuracy of financial and operational reporting, legal compliances, asset protection, authorised transactions, and adherence to internal policies. The controls are appropriate to our Companys size and scale of operations.

Companys compliance function stretches from applicable statutes to the management practice subject to ISO standards. Company has compiled data of applicable statutes as well as compliances requirements thereunder. Compliance Function is monitored by the functional compliance heads/concerned personnel and is overseen by central compliance team. The company is in process of digitalising compliance functions and efforts have been made towards improving efficiency, proper reporting, creation of documents repository.

HUMAN RESOURCE MANAGEMENT:

As at March 31, 2026, the total workforce of the company increased to 4,122 individuals, including skilled, semi-skilled and unskilled members. The company is expanding its workforce in line with its growth and development, continuously upgrading skill, knowledge, competencies through comprehensive training and development programmes. Along with enhancing functional skills, training and development programmes extends to occupational health, safety, safe practices and other subjects / matters. Moreover, an in house maintenance department undertook preventive and call-based maintenance of machineries to always ensure safety of employees and efficiency in operation.

The Company is committed to the holistic development of its employees professional, personal and social through continuous training and development interventions. Its Employee Engagement initiatives further aim to enhance motivation, foster teamwork and strengthen the organisational culture, and several such events and programmes were conducted through the course of the year. The Industrial Relations of the company remained cordial during the year.

An In-house training facility not only train company employees but also young talents fresh to the industry. The young and trained talents not only serve the company but also contributes to the overall socioeconomic development of the region. By building a pipeline of industry-ready talent, we are ensuring long-term workforce sustainability.

Additionally, the company has tied up with regional colleges and technical institutes to strengthen our talent pool through structured training, internship and recruitment programmes.

FORWARD LOOKING STATEMENT:

This Management Discussion and Analysis Report contain forward looking statements that reflect our current expectations and projections in line with applicable securities laws, Actual results may differ materially from those expressed or implied due to various factors, including market demand and supply conditions, regulatory changes, fluctuations in exchange rates, changes in tax policies, weather patterns, natural disasters, and broader economic developments at the national and global levels.

STANDALONE FINANCIAL PERFORMANCE:

of For 2025-26, the Company recorded profit 391.25 Crores (previous year 310.06 Crores). The same is on account of the increase in revenue from operations. The jump in profit after tax contributed to the revenue from mixed models approach adopted by company.

Analysis of major items of financial statements is given below:

Income:

Our total income comprises (i) revenue from operations and (ii) other incomes.

(i) Revenue from Operation:

Revenue from operations is recognised over time, when the outcome of the contract can be estimated reliably by reference to the percentage of completion of the contract on the reporting date under input method. Revenue from operations comprises (i) sale of products which further comprises of sale of machinery and sale of machinery parts, (ii) sale of services such as income from annual maintenance contract, machine service, job work and installation and commissioning; and (ii) other operating income which primarily includes income from exports and other incentive schemes and others.

During the year, the revenue from operation of the Company increased by 20.68% primarily due to revenue from mixed models approach adopted by company.

(ii) Other Income:

Other income comprises (i) interest income; (ii) foreign (net of loss); (iii) gain on sale exchange fluctuation of investment; and (iv) Others. During the year, other income increased primarily due to favorable forex fluctuation and higher interest income.

Cost of Materials Consumed:

Cost of materials consumed consists of raw materials, inputs used for manufacturing components and includes the electronics and other components that we procure. During the year, the cost of material consumed was 48 % against 50.86% in the previous year. This is mainly because of the higher contribution in revenue from sales of high marginal products.

(Increase)/ decrease in inventories of finished goods and work-in-progress:

(Increase)/ decrease in inventories of finished goods and work-in-progress denotes increase/ decrease in inventories of finished goods and work in progress between opening and closing dates of a reporting period as adjusted for changes on account of foreign currency translation. Jyoti CNCs inventories at the yearend consist of raw materials, work in progress, finishedgoods and stores and spares. At the end fiscal year under review, the inventories were 1,025.68 Crores compared to 821.82 Crores at the end of previous fiscal year.

Employee Cost:

Employeebenefitexpenses primarily include salaries and wages, contribution to provident funds and other funds, and other employee benefit expenses. During the year under review, the employee cost increased primarily due to salary revisions, new hiring and its consequential impact on retirement provisions.

Depreciation and Amortisation:

Depreciation and amortisation expense was primarily including depreciation expenses on our tangible properties other than lands (under long term lease), amortisation expenses on lands (under long term lease) our right to use assets and intangibles assets. During the year under review, depreciation and amortisation expenses expense was 41.93 Crores which is 2.09 % of total income for the period.

Other Expenses:

Other expenses comprises: (i) consumption of stores and spares; (ii) job work charges; (iii) power and fuel expenses; (iv) transportation expense; (v) clearing, forwarding and agency expenses; (vi) repairs & maintenance expense; (vii) advertisement, marketing expenses and exhibition expenses; (viii) AMC expenses; (ix) Legal & Professional Charges; (xi) Office Expenses; (x) postage, stationary and telephone expenses; (xi) commission expense; (xii) travelling, conveyance and vehicle expenses; (xiii) expected credit loss; (xiv) warranty expense; (xv) corporate social responsibility expenses; (xvi) remuneration to auditor; and (xvii) miscellaneous expenses.

During the year under review, the increase / (Decrease) in expenses is due to operation of the Company.

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025
Manufacturing and Other Direct Expenses	110.45	80.51
Consumption of Stores and Spares	14.63	12.11
Job Work Charges	37.30	27.17
Power and Fuel Expenses	30.51	24.70
Transportation Expenses - Inward	15.12	9.64
Clearing, Forwarding and Agency Expenses - Import	2.33	1.89
Repairs & Maintenance - Machinery	10.56	5.00
Administrative and Selling Expenses	127.36	87.85
Advertisement, Marketing Expenses, and Exhibition Expense	19.37	13.46
AMC Expenses	3.22	3.04
Clearing and Forwarding Expenses - Exports	1.22	0.68
Donation	0.01	0.62
Transportation Expense - Outward	13.96	12.10
Legal and Professional Charges	8.58	10.83
Office	1.30	1.04
Postage, Stationery, and Telephone Expenses	1.52	1.42
Remuneration to Auditor
- Audit Fees	0.70	0.55
-Certification	-	0.10
Commission Expense	4.58	3.60
Travelling, Conveyance, and Vehicle Expenses	15.33	14.58
Corporate Social Responsibility Expenses	4.38	1.78
Expected Credit Loss	7.67	3.55
Warranty Expense	1.55	0.86
Miscellaneous Expense	43.97	19.64
Total:	237.81	168.36

Finance Cost: Finance costs include interest expenses on borrowings and bank & other financial charges. During the year under review, the finance cost was 53.47 crores indicates increase by 208.01% due to increased debts. During the year, the company has raised term loan to partially meet its expansion project as well as also availed both funds based and non-fund-based credit facilities towards working capital requirements.

Indebtedness:

As of March 31, 2026, our non-current borrowing was 322.25 Crores, and our current borrowing was 267.10 Crores. The increase in borrowing reflects fresh borrowing made by company for its expansion project as well as for working capital needs.

Earnings before Interest, Tax and Depreciation & Amortisation (EBITDA):

EBITDA was 615.02 crores in 2025 26 compared to EBITDA of 469.54 crores in 2024 25. While EBITDA was improved over the previous year due to high revenue and high margin due to model mix approach.

Income Tax Expense:

During the year under review, our total income tax was 131.74 Crores compared to 106.21 Crores in previous 2024-25. The increase in income tax expense was primarily due to an increase in profit operation of our Company.

Profit for the year:

The company earned profit (after tax) of 391.25 Crores in 2025-26 compared to 310.06 Crores in 2024-25.

Cash Flows:

Particulars	Amount
Cash Flow from operating activities	102.74
Net Cash flow from/ (used in) investing activities	(281.14)
Net Cash flow from/ (used in) financing activities	195.92
Net (decrease)/increase in cash and cash equivalents	17.52
Cash and cash equivalent at year end	22.73

(a) Cash Flow from operating activities:

Cash flow from operating activities was 102.74 Crores during the financial year ended on March 31, 2026. For the financial year 2025 - 26, net profit before tax was 522.99 Crores. The primary adjustment consisted of depreciation and amortisation expense 41.93 Crore and finance cost of 53.47 Crores. The operating profit before changes in operating assets and liabilities was 579.50 Crores. The primary adjustment consisted of changes in current and noncurrent liabilities of 110.60 Crores; current and noncurrent assets of (258.15) Crores; and change in inventory of (203.86) Crores.

(b) Cash flow from investing activities:

Net cash flow used in investing activities for the financial year ended on March 31, 2026 was (281.14) Crores, primarily due to acquisition of property, plant and equipment and intangible assets (including capital work in progress, intangible assets under development and capital advance) of (285.19) Crores; movement in bank deposit of 27.68 Crores; and Sale of Investment of (32.00) Crores.

(c)Cash flow from financing activities:

Net cash flow generated from financing activities for the financial year ended on March 31, 2026 was 195.92 Crores, primarily on account of increase in current and non-current borrowings of 322.03 Crores and 68.87, respectively, payment of and loan of (142.11) Crores given.

Changes in Key Financial Ratios:

Changes exceeding 25% in key financial ratio as compared to previous year, along with explanation, are given below:

Particulars	2025-26	2024-25	Change in %	Reason for Change
Debtor Turnover (days)	104	99	5
Inventory Turnover	1.08	1.27	9
Interest Coverage Ratio	10.55	25.50	(60)	due to increase in interest cost
Current Ratio	2.90	2.76	5
Debt Equity Ratio	0.25	0.10	140	due to increase in bor- rowing
EBITDA Margin	28.95	28.38	2
Net Profit Margin	20.07	19.20	5

Change in Return on Net Worth:

Our return on net worth for the financial year 2025-26 was 17.31 compared to 16.22 in the previous financial year 2024-25. This improvement was mainly due to higher earnings from our operations.

CONSOLIDATED FINANCIAL PERFORMANCE:

During 2025-26, the Company recorded profit after tax of 336.00 Crores (previous year 316.01 Crores). The same is on account of the increase in revenue from operations of the company and adjustment of revenue recognition in books of subsidiary.

Analysis of major items of financial statements is given below:

Income:

Our total income comprises (i) revenue from operations and (ii) other incomes.

(i) Revenue from Operation:

Revenue from operations includes revenue recognised over time and not adjusted till date. Recognition of Revenue is derived when the outcome of the contract can be estimated reliably by reference to the percentage of completion of the contract on the reporting date under input method. Revenue from operations comprises (i) sale of products which further comprises of sale of machinery and sale of machinery parts, (ii) sale of services such as income from annual maintenance contract, machine service, job work and installation and commissioning; and (ii) other operating income which primarily includes income from exports and other incentive schemes and others.

During the year, the revenue from operations of the Company of the company was 2,093.13 against 1,817.70 during previous financial year 2024 25. The same indicates growth of 15.15%. The company has strong performance during the financial year. The reversal of revenue recognition has lowered the revenue of subsidiary.

(ii) Other Income

Other income comprises (i) interest income; and (ii) foreign exchange fluctuation gain (net of loss).

Cost of Materials Consumed:

Cost of materials consumed consists of raw materials used for manufacturing components and includes the electronics and other components that we procure. During the year, the cost of material consumed was 44.90% against 47.80% in the previous year. This is mainly because of the model mix approach of the company. (Increase)/decrease in inventories of finished goods and work-in-progress: (Increase)/decrease in inventories of finished goods and work-in-progress denotes increase/decrease in inventories of finished goods and work in progress between opening and closing dates of a reporting period as adjusted for changes on account of foreign currency translation. The inventories of the Company at the year-end consist of raw materials, work in progress, finished goods and stores and spares. At the end of the fiscal review, the inventories were 1,165.97 Crores compared to 900.48 Crores at the end of previous fiscal year.

Employee Cost:

Employee benefit wages, contribution to provident funds and other funds, and other employee benefit expenses. During the year under review, the employee cost increased primarily due to salary revisions, new hiring and its consequential impact on retirement provisions.

Depreciation and Amortisation:

Depreciation and amortisation expense was primarily include depreciation expenses on tangible properties other than lands (on long-term lease), amortisation expenses on lands (on long-term lease), right to use assets and intangibles assets.

During the year under review, depreciation and amortisation expenses expense was 50.20 Crores which is 2.33% of total income for the period.

Other Expenses: under

Other expenses comprises: (i) consumption of stores and spares; (ii) job work charges; (iii) power and fuel expenses; (iv) transportation expense; (v) clearing, forwarding and agency expenses; (vi) repairs and maintenance expense; (vii) advertisement, marketing expenses and exhibition expensesprimarily includesalaries expenses; (viii) AMC expenses; (ix) Legal & Professional Charges; (x) Office Expenses; (xi) postage, stationery, and telephone expenses; (xii) commission expense; (xiii) travelling, conveyance & vehicle expenses; (xiv) expected credit loss; (xv) warranty expense; (xvi) corporate social responsibility expenses; (xvii) donation; (xviii) audit fees; and (xix) miscellaneous expenses.

During the year under review, the increase/(decrease) in expenses was driven by our operational activities.

Particulars	For the year ended March 31, 2026	For the year ended March 31, 2025
Manufacturing and Other Direct Expenses	135.77	94.72
Consumption of Stores and Spares	15.42	12.68
Job Work Charges	43.11	29.29
Power and Fuel Expenses	35.64	29.84
Transportation Expenses - Inward	27.55	14.83
Clearing, Forwarding and Agency Expenses - Import	2.33	1.89
Repairs & Maintenance - Machinery	11.72	6.19
Administrative and Selling Expenses	161.30	105.08
Advertisement, Marketing Expenses, and Exhibition Expense	23.17	15.37
AMC Expenses	3.22	3.04
Clearing and Forwarding Expenses - Exports	1.22	0.68
Donation	0.01	0.62
Transportation Expense - Outward	13.96	12.10
Legal and Professional Charges	8.73	10.95
Office Expenses	1.30	1.04
Postage, Stationery, and Telephone Expenses	2.07	1.91
Remuneration to Auditor	2.43	2.65
Commission Expense	12.96	6.44
Travelling, Conveyance and Vehicle Expenses	24.52	19.47
Corporate Social Responsibility Expenses#	4.38	1.78
Expected Credit Loss	7.67	3.55
Warranty Expense	1.55	0.86
Misc. Expense	54.11	24.63
Total:	297.07	199.80

Finance Cost:

Finance costs include interest expenses on borrowings and others and bank and other financial charges. During the year under review, the finance cost was 69. Crores, which increased due to fresh borrowing made during the financial year. During previous financial year 2024 25, it was 42.08 Crores. Fresh Borrowings were made to meet capital expenditure and working capital need.

Indebtedness:

As of March 31, 2026, the non-current borrowing was 410.23 Crores, and current borrowing was 439.48 Crores.

During the year under review, non-current borrowing increased due to availment of fresh borrowing by the company and subsidiaries.

Further, the increase in current borrowing reflects our decision to opt for fresh borrowings to meet our working capital needs of the company.

Earning before Interest, Tax and Depreciation & Amortisation (EBITDA):

EBITDA was 581.36 crores in 2025 26 compared to EBITDA of 498.94 crores in 2024 25. While EBITDA margin for the year was improved but increase in operating cost at subsidiary without revenue recognition had dragged the margin. Consolidated EBITDA rose 16.5% to 581.36 crores (previous year 498.94 crores. The difference arises at the subsidiary, which incurred its full operating cost base during the year while the revenue recognised was reversed.

Income Tax Expense:

During the year under review, total income tax was 131.19 Crores compared to 101.73 Crores in the previous fiscal. The increase in income tax was primarily due to higher profit before tax from our operations.

Profit for the Year:

We earned a profit (after tax) of 336.00 Crores in 2025-26 compared to 316.01 Crores in 2024-25.

Cash Flows:

Particulars	Amount
Cash Flow from operating activities	54.39
Net Cash flow from/ (used in) investing activities	(302.05)
Net Cash flow from/ (used in) financing activities	287.15
Net(decrease)/increase in cash and cash equivalents	39.49
Cash and cash equivalent at year end	52.87

(a) Cash Flow from operating activities:

Cash flow from operating activities was 54.39 Crores during the financial year ended on March 31, 2026. During the period, net profitbefore tax was 467.19 Crores. The primary adjustment consisted of depreciation and amortisation expense 50.20 crores; finance cost of 69.84 Crores; Interest and Commission income of (21.78) Crores; unrealised forex gain of (57.60) Crores; and expected credit loss of 7.67 Crores.

The operating profit before changes in operating assets and liabilities was 521.70 Crores. The primary adjustment consisted of changes in current and noncurrent liabilities of 148.85 Crores; current and noncurrent assets of (192.41) Crores; and change in inventory of (265.69) Crores.

(b) Cash flow from investing activities:

Net cash flow used in investing activities for the financial year ended on March 31, 2026, was (302.05) Crores, primarily due to acquisition of property, plant and equipment and intangible assets (including capital work in progress) of (323.22) Crores; movement in bank deposit of 27.68 Crores; interest and commission received of 8.37 Crores; and investment of (14.88) Crores.

(c) Cash flow from financing activities:

Net cash flow generated from financing activities for the financial year ended March 31, 2026, was 287.15 Crores, primarily due to an increase and non-current and current borrowings of 307.67 crores and 45.16 Crores, respectively, payment of finance costs amounting to (66.22) Crores, and loans given amounting to 3.56 Crores.

Changes in Key Financial Ratios:

Changes exceeding 25% in key financial ratio as compared to previous year, along with explanation is given herein below are given below:

Particulars	2025-26	2024-25	Change in %	Reason for Change
Debtor Turnover (days)	95	74	28	due to increase in debtor
Inventory Turnover	1.22	2.06	19
Interest Coverage Ratio	7.54	11.14	(32)	due to increase in interest cost
Current Ratio	2.26	2.15	5
Debt Equity Ratio	0.42	0.29	45	due to incease in debt
EBITDA Margin	25.17	27.00	(7)
Net Profit Margin	16.05	17.39	(7)

Change in Return on Net Worth:

Return on net worth for 2025-26 was 18.22 as compared to 20.72 in 2024-25. Change in return on net worth is due to profit earned by the company during the financial year 2025 26.

CONTINGENT LIABILITIES:

The following table set forth the principal components of our contingent liabilities as per Ind AS 37 - Contingent Liabilities to the extent not provided for, as at March 31, 2026:

( in crores)

Particulars	2025 - 26
Letter of Credit, Standby Letter of Credit, Letter of Comfort & Bank Guarantee
i. Outstanding Letter of Credits & Bank Guarantee	176.78
ii. Outstanding Standby Letter of Credit & Letter of Comfort	264.34
Claim Against the Company not Acknowledged as Debt
• Customer (Compensation claim)	1.34
• Customer (Amount paid under protest)	0.35
Disputed Excise Duty, Service Tax & Other Liabilities in respect of Pending
Litigations before Appellate Authority & Against which amount paid Under
Protest are as follows
• Disputed excise duty liabilities	2.27
• Disputed income tax liabilities	4.03
• Disputed TDS Liabilities	15.53
• Disputed CST liabilities	2.59
• Disputed VAT liabilities	0.23
• Amount paid under protest - Excise duty	2.13
• Amount paid under protest - CST	0.70
• Amount paid under protest - VAT	0.25
• Capital Commitments - Estimated amount of Capital Contracts Remaining to be executed & not provided as on Balance Sheet Date	55.75
(Net of Advance - Inclusive of GST)

For contingent liabilities and commitments, Shareholders are requested to refer the notes to the financial statements given in this annual report.

RELATED PARTY TRANSACTIONS:

During the year under review, we entered into various transactions with related parties in the ordinary course of business. These primarily included the sale of finished goods, purchase of raw materials, loans taken from the promoter and interest thereon, employee benefits expenses, loans and advances given, trade receivables, and directors sitting fees. The details of these transactions are provided in Note No. 36 to the standalone financial statements forming part of this Annual Report.

CHANGE IN ACCOUNTING POLICIES AND TREATMENT:

In preparing our financial statements, we have followed accounting policies and treatments that fully comply with the prescribed accounting standards, without any deviations during the year.

AUDITORS OBSERVATIONS:

The report on the auditor and notes on the financial statements referred to in the Auditors Report are self-explanatory and do not contain any remarks, qualifications, or remarks which require separate explanations thereto. Also, attention of Investors is drawn to the emphasis of matter given in the report of Auditor.