Kinetic Engineering Ltd Management Discussions

Global economic review

Overview: Global economic growth declined marginally from 3.3% in 2023 to an estimated 3.2% in 2024. This was marked by a slowdown in global manufacturing, particularly in Europe and parts of Asia coupled with supply chain disruption and weak consumer sentiment. In contrast, the services sector performed more creditably.

The growth in advanced economies remained steady at 1.7% from 2023 to 2024 as the emerging cum developing economies witnessed a growth decline at 4.2% in 2024 (4.4% in 2023).

On the positive side, global inflation was expected to decline from 6.1% in 2023 to 4.5% in 2024 (projected at 3.5% and 3.2% in 2025 and 2026 respectively). This decline was attributed to the declining impact of erstwhile economic shocks, and labour supply improvements. The monetary policies announced by governments the world over helped keep inflation in check as well.

The end of the calendar year was marked by the return of Donald Trump as the new US President. The new US government threatened to impose tariffs on countries exporting to the US unless those countries lowered tariffs for the US to export to their countries. This enhanced global trade and markets uncertainty and emerged as the largest singular uncertainty in 2025.

Regional growth (%)	2024	2023
World output	3.2	3.3
Advanced economies	1.7	1.7
Emerging and developing economies	4.2	4.4

(Source: IMF, KPMG, Press Information Bureau, BBC, India Today)

Performance of the major economies, 2024

United States: Reported GDP growth of 2.8% in 2024 compared to 2.9% in 2023.

China: GDP growth was 5.0% in 2024 compared to 5.2% in 2023.

United Kingdom: GDP growth was 0.8% in 2024 compared to 0.4% in 2023.

Japan: GDP growth was 0.1% in 2024 compared with 1.9% in 2023.

Germany: GDP contracted by 0.2% in 2024 compared to a 0.3% decline in 2023.

(Source: CNBC, China Briefing, ons.aov.uk. Trading Economics, Reuters)

Outlook: The global economy has entered a period of uncertainty following the imposition of tariffs of products imported into the USA and some countries announcing reciprocal tariffs on US exports to their countries. This is likely to stagger global economic growth, the full outcome of which cannot be currently estimated. This risk is supplemented by risks related to conflicts, geopolitical tensions, trade restrictions and climate risks. In view of this, World Bank projected global economic growth at 2.7 per cent for 2025 and 2026, factoring the various economic uncertainties.

(Source: IMF, United Nations)

Indian economic review Overview

The Indian economy grew at 6.5% in FY 2024-25, compared to a revised 9.2% in FY 2023-24. This represented a four-year low due to a moderate slowdown within the Indian economy (marked by slower manufacturing growth and a decline in net investments). Despite the slowdown, India retained its position as the worlds fifth-largest economy.

Indias nominal GDP (at current prices) was H330.68 trillion in FY 2024-25 (H301.23 trillion in FY 2023-24). The nominal GDP per capita increased from H2,15,936 in FY 2023-24 to H2,35,108 in FY 2024-25, reflecting the impact of an economic expansion.

The Indian rupee weakened 2.12% against the US dollar in FY 2024-25, closing at H85.47 on the last trading day of FY25. In March 2025, the rupee recorded the highest monthly appreciation since November 2018, rising 2.39% (arising out a weakening US dollar).

Inflationary pressures eased, with CPI inflation averaging 4.63% in FY 2024-25, driven by moderating food inflation and stable global commodity prices. Retail inflation at 4.6% in FY 2024-25, was the lowest since the pandemic, catalysing savings creation.

Indias foreign exchange reserves stood at a high of $676 billion as of April 4, 2025. This was the fourth consecutive year when rating upgrades outpaced downgrades on account of strong domestic growth, rural consumption, increased infrastructure investments and low corporate leverage (annualized rating upgrade rate 14.5% exceeded the decade-long average of 11%; downgrade rate was 5.3%, lower than the 10-year average of 6.5%).

Gross foreign direct investment (FDI) into India rose 13.6% to $81 billion during the last financial year, the fastest pace of expansion since 2019-20. The increase in the year was despite a contraction during the fourth quarter of 2024-25 when inflows on a gross basis declined 6% to $17.9 billion due to the uncertainty caused by Donald Trumps election and his assertions around getting investments back into the US.

Growth of the Indian economy

	FY22	FY23	FY24	FY25
Real GDP growth (%)	8.7	7.2	9.2	6.5

E: Estimated

(Source: MoSPI, Financial Express)

Growth of the Indian economy quarter by quarter, FY 2024-25

	Q1 FY25	Q2 FY25	Q3 FY25	Q4 FY25
Real GDP growth (%)	6.5	5.6	6.2	7.4

E: Estimated

(Source: The Hindu, National Statistics Office)

The banking sector continued its improvement, with gross non-performing assets (NPA) for scheduled commercial banks (SCBs) declining to 2.6% as of September 2024, down from 2.7% in March 2024. The capital-to-risk-weighted assets ratio for SCBs stood at 16.7% as of September 2024, reflecting a strong capital position.

Indias exports of goods and services reached $824.9 billion in FY 2024-25, up from $778 billion in the previous fiscal year. The Red Sea crisis impacted shipping costs, affecting price-sensitive exports. Merchandise exports grew 6% YoY, reaching $374.1 billion.

Indias net GST collections increased 8.6%, totalling H19.56 lakh crore in FY 2024-25. Gross GST collections in FY 2024-25 stood at H22.08 lakh crore, a 9.4% increase YoY.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in FY 2024-25. The industrial sector grew by 6.5%, supported by growth in construction activities, electricity, gas, water supply and other utility services.

Indias services sector grew at 8.9% in FY25 (9.0% in FY24), driven by public administration, defence and other services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in FY25, compared to 8.6% in FY24. Meanwhile, the construction sector expanded at 9.4% in FY25, slowing from 10.4% in the previous year.

Manufacturing activity was subdued in FY25, with growth at 4.5%, which was lower than 12.3% in FY24. Moreover, due to lower public spending in the early part of the year, government final consumption expenditure (GFCE) is anticipated to have slowed to 3.8% in FY25, compared to 8.1% in FY24.

The agriculture sector grew at 4.6% in 2024-25 (1.4% in 2023-24). Trade, hotel, transport, communication and services related to broadcasting segment were estimated to grow at 6.4% in 2024- 25 (6.3% in 2023-24).

From a demand perspective, the private final consumption expenditure (PFCE) exhibited robust growth, achieving 7.2% in FY 2024-25, surpassing the previous financial years rate of 5.6%.

The Nifty 50 and SENSEX recorded their weakest annual performances in FY 25 in two years, rising 5.3% and 7.5% during the year under review respectively. Gold rose 37.7% to a peak of $3,070 per ounce, the highest increase since FY 2007-08, indicating global uncertainties.

Total assets managed by the mutual fund (MF) industry jumped 23% or H12.3 lakh crore in fiscal 2025 to settle at H65.7 lakh crore. At close of FY25, the total number of folios had jumped to nearly 23.5 crore, an all-time peak. During last fiscal, average monthly systematic investment plan (SIP) contribution jumped 45% to H24,113 crore.

Foreign portfolio investments (FPIs) in India experienced high volatility throughout 2024, with total inflows into capital markets reaching approximately $20 billion by year- end. However, there was significant selling pressure in the last quarter, influenced by new tariffs announced by the new US government on most countries (including India).

Outlook

India is expected to remain the fastest-growing major economy. Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tariff levies on India and other countries. The following are some key growth catalysts for India in FY26.

Tariff-based competitiveness: India identified at least 10 sectors such as apparel and clothing accessories, chemicals, plastics and rubber where the US high tariffs give New Delhi a competitive advantage in the American market over other suppliers. While India faced a 10% tariff after the US suspended the 26% additional duties for 90 days, the levy remained at 145% on China, the biggest exporter to the US. Chinas share of apparel imports into the US was 25%, compared with Indias 3.8%, a large opportunity to address differential (Source: Niti Aayog).

Union Budget FY 2025-26: The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasizing agriculture, MSMEs, investment, and exports as the four primary growth engines. With a fiscal deficit target of 4.4% of GDP, the government reinforced fiscal prudence while allocating H11.21 lakh crore for capital expenditure (3.1% of GDP) to drive infrastructure development. The February 2025 Budget marked a shift in approach, with the government proposing substantial personal tax cuts. Effective April 1, 2025, individuals earning up to H12 lakh annually will be fully exempt from income tax. Economists estimate that the resulting H1 lakh crore in tax savings could boost consumption by H3-3.5 lakh crore, potentially increasing the nominal private final consumption Expenditure (PFCE) by 1.5-2% of its current H200 lakh crore.

Free trade agreement: In a post-Balance Sheet development, India and the United Kingdom announced a free trade agreement to boost strategic and economic ties. This could lead to a significant increase in the export competitiveness of Indian shipments in the UK across the textiles, toys, leather, marine products, footwear, and gems & jewellery sectors. About 99% of Indian exports to UK will enjoy zero- duty access tariff cuts; India will cut tariffs on 90% of tariff lines and 85% could become fully duty-free within 10 years.

Pay Commission impact: The 8^th Pay Commissions awards could lead to a significant salary revision for nearly ten million central government employees. Historically, Pay Commissions have granted substantial pay hikes along with generous arrears. For instance, the 7^th Pay Commission more than tripled its monthly salaries, raising the range from H7,000 to H90,000 to H18,000 to H12.5 lakh, triggering a widespread ripple effect.

Monsoons: The India Meteorological Department predicted an above normal monsoon in 2025. This augurs well for the countrys farm sector and a moderated food inflation outlook.

Easing inflation: Indias consumer price index-based retail inflation in March 2025 eased to 3.34 per cent, the lowest since August 2019, raising hopes of further repo rate cuts by the Reserve Bank of India.

Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of FY 2025-26. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26.

Lifting credit restrictions: In November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to

9-13% between September 2023 and 2024. However, under its new leadership, the RBI has prioritized restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks, and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Global automotive industry overview

The global automotive industry stands as a cornerstone of economic development, technological innovation, and large-scale employment across the world. It encompasses a vast and complex ecosystem of manufacturers, suppliers, distributors, and service providers, spanning both traditional internal combustion engine vehicles and the rapidly advancing electric mobility segment. As markets evolve, the industry is navigating a transformative phase shaped by changing consumer preferences, stringent regulatory standards, and the accelerated adoption of digital and sustainable technologies. This dynamic environment presents both opportunities for innovation and challenges that demand resilience, agility, and long-term strategic vision.

The global automotive industry is undergoing a fundamental transformation, driven by a convergence of technological, regulatory, and consumer-led forces. In an environment shaped by emerging markets, accelerated innovation, evolving safety norms, and shifting mobility expectations, the sector is redefining its value proposition. Digitalization and disruptive business models are steadily replacing traditional frameworks, while four core advancements are mobility, autonomous driving, electric vehicles, and connected technologies are collectively reshaping the industrys future. These forces are not isolated; rather, they are increasingly viewed as interdependent, each amplifying the others impact. Against this backdrop of change, the global automotive market stood at USD 4,359.98 billion in 2024 and is estimated to grow to USD 6,678.28 billion by 2032, reflecting a CAGR of 5.66% over the forecast period.

Growth drivers

Electrification and clean mobility: The global push for sustainable transportation is accelerating the adoption of electric vehicles. Supportive government policies, technological advancements in battery systems, and expanding charging networks are enabling a structural shift toward low-emission mobility.

Digital and connected technologies: Integration of connected features such as real-time navigation, telematics, and over-the-air updates is transforming the in-vehicle experience. These innovations are not only enhancing safety and convenience but also opening up new revenue models for automakers.

Autonomous and Advanced Driving Systems (ADAS):

Progress in autonomous driving and ADAS is reshaping the way vehicles are designed, operated, and perceived. Though full autonomy is still emerging, partial automation is gaining widespread acceptance, driving both R&D investment and regulatory focus.

Mobility-as-a-Service (MaaS): Changing urban lifestyles and the rise of shared transportation models are encouraging a shift from vehicle ownership to flexible, on-demand mobility solutions. This trend is prompting traditional automakers to expand into service-based ecosystems.

Emerging market demand: Sustained economic growth, rising income levels, and improving infrastructure in emerging markets are fueling demand for personal and commercial vehicles. These regions are expected to contribute significantly to volume-led growth over the coming decade.

(Source: Globenewswire)

Global electric vehicle industry overview

The electric vehicle segment has emerged as a defining force in the global automotive landscape, reflecting a broader shift toward sustainable and low-emission mobility solutions. Driven by regulatory mandates, environmental concerns, and technological breakthroughs, EVs are no longer a niche offering but a mainstream priority for both established manufacturers and new-age entrants. Innovations in battery efficiency, powertrain design, and charging infrastructure are enhancing performance and reducing ownership costs, while consumer awareness around climate impact continues to build momentum. As countries and companies align their decarbonisation goals, the EV market is positioned to play a central role in the future of transportation.

The global electric vehicle industry is undergoing rapid transformation, evolving from a niche segment into a central pillar of the future mobility ecosystem. Backed by strong policy support, rising environmental consciousness, and continuous technological innovation, EVs are gaining traction across both developed and emerging markets. Advances in battery technology, coupled with falling production costs and expanding charging infrastructure, are making electric mobility increasingly accessible and competitive. As governments and industries worldwide commit to carbon neutrality and clean energy transitions, the global EV industry is poised for sustained, long-term growth, redefining the trajectory of the automotive sector.

The global electric vehicle market is witnessing robust momentum, driven by rising environmental concerns, the pressing need to curb greenhouse gas emissions, and increasing public preference for sustainable mobility solutions. With a well-established manufacturing base and supportive policy frameworks, the Asia Pacific region continues to lead, accounting for over 46.5% of the global market share in 2024. Valued at USD 755 billion in 2024, the market is projected to grow significantly, reaching USD 4,360 billion by 2033 at a CAGR of 21.5% between 2025 and 2033.

Key drivers

Rising environmental concerns and emission reduction goals: Heightened awareness of climate change and urban air pollution is driving demand for cleaner mobility solutions. Electric vehicles are seen as a strategic response, particularly as traditional vehicles remain major contributors to emissions. According to the World Meteorological Organization, atmospheric CO₂ levels have risen by 11.4% over the last two decades, underscoring the urgency for zero-emission alternatives.

Advancements in battery technology and EV range:

Breakthroughs in battery chemistry and design are improving energy density, reducing charging time, and lowering costs. These developments are addressing range anxiety and enhancing performance, making EVs more viable for everyday use and long-distance travel.

Strong government policy support and incentives:

Governments continue to incentivize EV adoption through purchase subsidies, tax exemptions, registration waivers, and funding for manufacturing and infrastructure. Emission mandates and carbon reduction goals are compelling automakers to accelerate the shift toward electric mobility.

Charging infrastructure expansion and efficiency enhancements: The rapid development of public and private charging networks·across urban, semi-urban, and highway corridors·is supporting widespread EV adoption. Advances in battery management systems and onboard charging technologies are further optimizing charging times and energy consumption.

Component-level innovation and segmented market evolution: Innovation across EV components·particularly battery cells, packs, onboard chargers, and fuel stacks·is enhancing reliability and driving cost-efficiency. Increased R&D in battery systems and emerging interest in hydrogen fuel cell technologies are broadening the scope of clean mobility, especially for commercial and long-range applications

(Source: IMARC)

Global auto parts manufacturing industry overview

The auto parts industry forms the backbone of the global automotive value chain, supplying critical components that enable the design, performance, safety, and efficiency of vehicles across segments. From traditional internal combustion engine parts to high-performance electronics and systems tailored for electric and hybrid vehicles, the industry continues to evolve in line with technological advancements and regulatory shifts. As automakers expand their focus on innovation, sustainability, and localization, the role of agile, quality-driven auto component manufacturers has become increasingly vital. This dynamic sector is also being shaped by trends such as electrification, automation, and digital integration, prompting strategic investments in R&D, supply chain resilience, and smart manufacturing capabilities.

The global auto parts manufacturing industry serves as a critical pillar of the automotive sector, supporting vehicle production through a vast network of component suppliers, system integrators, and specialized manufacturers. Spanning powertrain systems, chassis components, electronics, interiors, and increasingly, electric mobility solutions, the industry is undergoing a structural shift aligned with broader trends in electrification, automation, and digitalization. As original equipment manufacturers (OEMs) diversify product lines and tighten quality, cost, and sustainability benchmarks, component manufacturers are investing in advanced technologies, smart manufacturing, and resilient global supply chains. With evolving consumer expectations and stringent regulatory requirements, the industry continues to adapt, playing a decisive role in shaping the future of mobility across global markets.

The global auto parts manufacturing industry continues to demonstrate steady growth, supported by sustained demand for automobiles across both developed and emerging markets. Government initiatives aimed at promoting industrial expansion and sustainable mobility, along with increasing investments in advanced vehicle technologies, are contributing to the sectors upward trajectory. At the same time, evolving consumer expectations around comfort, connectivity, and convenience are prompting automakers to incorporate more sophisticated components and systems, driving demand across the parts manufacturing value chain. The global auto parts manufacturing market reached USD 2,250.5 billion in 2024 and is projected to grow to approximately USD 2,761.1 billion by 2033, reflecting a CAGR of 2.3 percent during the forecast period from 2025 to 2033.

Key drivers

Technological innovations in manufacturing processes:

Advanced technologies like additive manufacturing and robotics are streamlining auto parts production, enabling lightweight, high-precision components while reducing waste and improving efficiency. Robotics has enhanced consistency and flexibility, supporting faster adaptation to changing production needs.

Expansion of the global automotive industry: Rising urbanization, increasing disposable incomes, and growing demand for personal mobility·especially in emerging markets·are boosting vehicle sales, thereby driving demand for diverse and technologically advanced auto parts.

Rising adoption of Electric Vehicles (EVs): The global transition to electric mobility is reshaping component demand, with a focus on battery packs, electric motors, power electronics, and thermal systems. This shift is prompting greater R&D investment and expanding opportunities in supporting infrastructure.

Demand from the automotive aftermarket: As vehicles age, the need for replacement parts·brakes, filters, suspension, and consumables·continues to rise. The aftermarket offers stable growth potential, further bolstered by digital retail and e-commerce platforms.

Stringent emission and safety regulations: Tighter global regulations on emissions and safety are pushing manufacturers to adopt lighter materials, enhance fuel efficiency, and develop advanced safety and driver-assistance systems, accelerating innovation in sustainable components.

(Source: IMARC)

Indian automotive industry overview

The Indian automotive industry stands as a cornerstone of the countrys manufacturing sector, playing a vital role in driving economic growth, employment, and technological advancement. As one of the largest automotive markets globally, India offers a dynamic landscape spanning passenger vehicles, two-wheelers, commercial vehicles, and electric mobility. The sector is supported by a robust domestic demand base, increasing urbanization, rising income levels, and proactive policy frameworks aimed at promoting innovation, sustainability, and localization. With growing investments in electric vehicles, green technologies, and smart infrastructure, the Indian automotive industry is entering a transformative phase·positioning itself as a globally competitive and future-ready ecosystem.

The Indian automotive industry is cementing its role as a key contributor to the countrys industrial and economic progress, supported by a growing middle class, regulatory push, and rapid advancements in vehicle technologies. Government initiatives have fostered a strong manufacturing ecosystem, attracting both domestic and foreign investment. The market, valued at USD 118.92 billion in 2024, is projected to grow from USD 129.39 billion in 2025 to USD 276.46 billion by 2034, at a CAGR of 8.80 percent. Passenger vehicle sales reached a record 4.3 million units in FY 2024-25, up 2 percent from the previous year, with Utility Vehicles accounting for 65 percent of this volume. Exports rose 14.6 percent to 0.77 million units, while the overall auto sector recorded 7.3 percent domestic growth. Two-wheeler demand rebounded, and electric vehicles saw wider adoption, reinforcing Indias growing stature in the global automotive landscape.

Growth drivers

Rising domestic demand and economic contribution:

Indias growing middle class, urban expansion, and higher disposable incomes are driving strong demand across vehicle segments. The automotive sector contributes approximately 7.1% to the national GDP and nearly 49% of manufacturing GDP, highlighting its pivotal role in economic development. This sustained demand is encouraging capacity expansions and attracting significant investments.

Government policy support and sectoral reforms: Initiatives like Make in India and the vehicle scrappage policy are bolstering domestic manufacturing and promoting cleaner, fuel-efficient vehicles. The scrappage policy, in particular, aims to phase out older vehicles, reduce emissions, and increase the share of BS6-compliant models on Indian roads.

Policy-led EV ecosystem development: Schemes such as FAME I & II and the National Electric Mobility Mission Plan are accelerating EV adoption through incentives, phased customs duties, and tax benefits. These policies support local EV manufacturing and strengthen Indias position in the global electric mobility landscape.

Robust investment pipeline and infrastructure expansion:

An estimated USD 8-10 billion in domestic and foreign investment is projected for the sector. Automakers are expanding capacity, building EV infrastructure, and adopting advanced technologies, positioning India as a globally competitive and sustainable automotive manufacturing hub.

Indian electric vehicle industry overview

Indias electric vehicle industry is fast emerging as a cornerstone of the countrys sustainable mobility goals. Backed by strong policy support, rising fuel prices, and growing environmental awareness, the sector is gaining traction across both personal and commercial segments. Initiatives such as FAME II, the National Electric Mobility Mission Plan, and supportive state-level policies have laid the groundwork for investment in local manufacturing, battery innovation, and charging infrastructure.

The national commitment to net-zero emissions by 2070 is accelerating the shift toward clean transport, reinforced by incentives for manufacturers and consumers. Shared mobility platforms integrating electric fleets, along with steady improvements in battery technology and cost competitiveness, are further driving demand. As charging infrastructure expands across urban and semi-urban regions, EV adoption is becoming increasingly viable.

Rapid urbanization, rising disposable incomes, and advances in vehicle design and digital integration are enhancing EV appeal across segments. South India leads this transition, holding over 38.6% of the market share in 2024. The Indian EV market, valued at USD 2,360.97 million in 2024, is projected to reach USD 1,64,420.39 million by 2033, growing at a CAGR of 57.23% during 2025-2033.

Indian auto components industry overview

Indias auto components manufacturing industry is a vital pillar of the nations automotive sector, supporting its growth, global competitiveness, and export performance. With a strong domestic base, skilled workforce, and increasing integration into global supply chains, the industry spans a broad range of products·from engine parts and suspension systems to EV components and advanced electronics.

Driven by government policies and rising demand for electric and connected vehicles, the sector is advancing through localization, innovation, and sustainability. Lightweight materials like aluminum and composites are being adopted to improve fuel efficiency and meet emission norms, while the transition to electric mobility is creating demand for specialized components. Suppliers are focusing on modular and scalable designs to serve diverse platforms. The aftermarket segment is expanding due to rising vehicle ownership and longevity. Meanwhile, technologies like 3D printing and IoT integration are enhancing customization and operational efficiency, strengthening Indias position in the global automotive value chain.

Indias automotive components market is expanding steadily, supported by strong growth in vehicle production, evolving consumer expectations, and rapid technological advancements. Rising output across passenger and commercial vehicle segments continues to drive demand for a diverse range of components. Simultaneously, the transition toward electric and hybrid vehicles is prompting innovation in energy-efficient and emission-reducing systems. Growing consumer preference for advanced safety and infotainment features is fueling the development of high-value, technologically complex parts. Automation and digitization in manufacturing are further enhancing productivity, quality, and cost efficiency. The market was valued at USD 82.7 billion in 2025 and is projected to reach USD 136.0 billion by 2031, registering a CAGR of 10.5% during the forecast period.

Key drivers

Growth in vehicle production: Rising consumer demand, supported by higher disposable incomes and growing vehicle ownership, is prompting automakers to increase production and diversify model portfolios. This is expanding the demand base for a wide range of components. Government-sanctioned expansion of EV infrastructure- over 2,877 charging stations across states and 1,576 on highways-is also driving demand for components like charging connectors.

Shift towards Electric Vehicles (EVs): The rapid shift to EVs is transforming component requirements, creating strong demand for battery systems, electric motors, and high- voltage connectors. Policy support, growing infrastructure, and consumer acceptance are enabling component manufacturers to invest in next-gen, EV-focused solutions.

Stringent safety and emission regulations: Tighter regulations are accelerating the integration of advanced safety and emission control systems, including ABS, airbags, and stability controls. This is pushing suppliers to invest in R&D to deliver compliant, high-performance components.

Rising demand for advanced features: Growing preference for connected, smart, and tech-enabled vehicles is increasing demand for sensors, processors, and driver-assistance modules. This trend is opening new avenues for innovation and partnerships within the auto components industry.

(Source: Tech Sci Research)

Government initiatives

Production Linked Incentive (PLI) scheme for auto components: Offers financial incentives for manufacturers investing in advanced automotive technologies, including EV parts, safety systems, and precision components, encouraging localization and capacity expansion.

FAME II scheme (faster adoption and manufacturing of hybrid and electric vehicles): Promotes adoption of electric vehicles by supporting manufacturers and consumers through subsidies and incentives, indirectly driving demand for EV-compatible components.

Electric mobility promotion scheme (EMPS) 2024: A fund- limited initiative aimed at accelerating the adoption of electric two-wheelers and three-wheelers, creating downstream opportunities for component suppliers.

Make in India and Atmanirbhar Bharat Abhiyan: Encourages domestic manufacturing and reduces import dependency, offering policy support, capital incentives, and infrastructure assistance to automotive and engineering firms.

Skill India mission: Enhances availability of skilled technical workforce through vocational training and certification, helping manufacturers maintain productivity and adapt to advanced technologies.

State-level industrial policies: Various states offer industry- specific incentives such as subsidized land, tax benefits, and power tariff concessions, supporting the establishment and scaling of manufacturing facilities.

Opportunities

¦ Rising demand for electric vehicles presents significant opportunities to diversify into EV drivetrain components and lightweight precision parts.

¦ Increasing vehicle production and aging fleet in India and abroad boost demand for both OEM-supplied and aftermarket components.

¦ Opportunities to expand footprint in global markets through cost-competitive, quality-assured components catering to two- and three-wheeler platforms.

¦ Supportive policies like PLI schemes for auto components and EV manufacturing provide avenues for capacity expansion and technology investment.

¦ Advancements in manufacturing, such as CNC, robotics, and Industry 4.0 tools, enable productivity gains and entry into higher-value product segments.

Threats

¦ Fluctuating costs of steel, aluminum, and other inputs may compress margins and affect cost planning.

¦ Heavy dependence on a few key clients increases vulnerability to order variability and pricing pressures.

¦ While EVs are rising, slow adoption in rural and smaller commercial markets may delay benefits from electrification strategies.

¦ Rapid shifts in drivetrain technologies may outpace legacy product relevance, requiring faster product development cycles.

¦ Rising labour costs and skilled manpower shortages in industrial regions may impact production efficiency and delivery timelines.

Outlook

The company remains optimistic about its growth prospects, driven by a supportive policy environment and steady recovery in the automotive sector. Government initiatives such as the PLI scheme, FAME II, and EMPS 2024 are expected to boost demand for advanced and EV-compatible components. With ongoing investments in localisation, precision engineering, and product diversification, the company is well-placed to capitalise on emerging opportunities. While raw material cost volatility and regulatory shifts remain challenges, its focus on efficiency, innovation, and operational flexibility positions it for stable and sustainable growth.

Company overview

Kinetic Engineering Limited is a pioneering name in Indias automotive industry with a legacy spanning several decades in the manufacturing of precision-engineered components. The company began its journey as a prominent two-wheeler manufacturer and has since evolved into a focused engineering enterprise catering to the automotive components sector. Its core capabilities lie in the production of transmission assemblies, engine and chassis components, and various drive train parts for two-wheelers, three- wheelers, and commercial vehicles. Leveraging its robust in-house engineering, tooling, and machining expertise, the company serves leading OEMs in India and select international markets. With a renewed focus on supporting the electric mobility transition, Kinetic Engineering Limited continues to modernize its operations, diversify its product offerings, and strengthen its position as a reliable and innovation-driven manufacturing partner.

Financial analysis FY 2024-25 Balance Sheet

¦ Borrowings for FY 2024-25 stood at ?6,035 lakhs compared to ?3,330 lakhs during FY 2023-24.

¦ Total non-current assets for FY 2024-25 stood at ?10,179 lakhs compared to ?8,126 lakhs in FY 2023-24.

¦ Net worth stood at ?11,736 lakhs as on March 31, 2025 compared to ?6,425 lakhs as on March 31, 2024, an increase of 83%.

¦ Total assets increased by 34% to ?23,664 lakhs as on March 31, 2025 from ?17,594 lakhs as on March 31, 2024.

¦ Inventories increased by 6% to ?5,409 lakhs as on March 31, 2025 from ?5,102 lakhs as on March 31, 2024.

Profit & loss statement

¦ Revenues increased by 1.53% from ?15,221 lakhs in FY 2023-24 to ?15,454 lakhs in FY 2024-25.

¦ EBITDA increased by 4.48% from ?1,705 lakhs in FY 2023-24 to ?1,782 lakhs in FY 2024-25.

¦ Profit after tax increased by 20.97% from ?515 lakhs in FY 2023-24 to ?623 lakhs in FY 2024-25.

¦ Depreciation and amortization stood at ?669 lakhs in FY 2024-25 compared to ?645 lakhs in FY 2023-24

Working capital management

Current assets as on March 31, 2025 stood at ?13,486 lakhs compared to ?9,469 lakhs as on March 31, 2024. Current ratio as on March 31, 2025 stood at 1.83 compared to 1.26 as on March 31, 2024. Inventories increased from ?5,102 lakhs as on March 31, 2024 compared to ?5,409 lakhs as on March 31, 2025. Current liabilities stood at ?7,380 lakhs as on March 31, 2025 compared to ?7,535 lakhs as on March 31, 2024. Cash and bank balances stood at ?3,726 lakhs as on March 31, 2025 compared to ?922 lakhs as on March 31, 2024.

Key ratios

Particulars	FY 2024-25	FY 2023-24
EBITDA/Turnover	0.13	0.12
EBITDA/Net interest	3.63	3.13
Debt-equity ratio	0.19	0.37
Return on equity (%)	6.86 %	11.07 %
Book value per share (?)	50.13	28.99
Earnings per share (?)	2.89	2.35

Risk management

Risk: Raw material price volatility

Mitigation: Maintain multiple supplier relationships, explore long-term contracts, and implement cost engineering to reduce material dependence. Monitor market trends to make informed procurement decisions.

Risk: Customer concentration risk

Mitigation: Diversify customer base across automotive OEMs, aftermarket segments, and export markets. Strengthen product offerings to attract new clients and reduce dependency on a few key customers.

Risk: Technology obsolescence

Mitigation: Invest in R&D focused on EV-compatible components and lightweight assemblies. Continuously upgrade manufacturing capabilities to align with evolving vehicle technologies and industry trends.

Risk: Regulatory compliance

Mitigation: Establish a dedicated compliance team to monitor legal and policy changes. Conduct regular internal audits and ensure timely certification renewals (ISO/TS standards) to remain aligned with evolving regulations.

Risk: Supply chain disruptions

Mitigation: Maintain buffer stocks for critical materials and components. Engage with multiple suppliers, develop localized sourcing options, and invest in supply chain visibility systems for risk forecasting.

Risk: Cyclical demand in the automotive sector

Mitigation: Expand product portfolio to cater to EV and industrial segments. Focus on exports to balance domestic fluctuations and adopt a lean cost structure to maintain operational flexibility during downcycles.

Risk: Working capital pressure

Mitigation: Strengthen receivables follow-up, implement inventory optimization, and improve cash flow management. Maintain adequate credit lines to manage liquidity efficiently during demand variability.

Risk: Manpower and skill gaps

Mitigation: Conduct regular training programs and invest in upskilling for automation and precision engineering. Collaborate with vocational institutions to ensure a pipeline of technically skilled workers.

Risk: Foreign exchange risk

Mitigation: Use hedging instruments judiciously. Aim for natural hedging by balancing imports and exports. Adjust pricing structures to factor in currency fluctuations for longterm contracts.

Risk: Reputation and ESG compliance

Mitigation: Strengthen ESG practices by adopting energy- efficient operations, enhancing workplace safety, and improving governance transparency. Align sustainability reporting with evolving stakeholder expectations.

Human resource management

The company fosters a performance-oriented work culture built on customer focus, innovation, and an unwavering commitment to quality. Consistent investment in employee training and upskilling initiatives ensures alignment with evolving industry needs while driving operational efficiency.

Emphasis is placed on attracting and retaining high- caliber talent through structured growth opportunities, transparent evaluation systems, and employee-friendly policies. Engagement is further strengthened through recognition programs, wellness initiatives, and activities that promote work-life balance. As on 31 March 2025, the total workforce stood at []. Industrial relations remained smooth and constructive across all locations throughout the year, reflecting a stable and collaborative workforce environment.

Internal control systems and their adequacy

The internal control systems are designed to ensure orderly and efficient conduct of operations, safeguard of assets, accuracy and completeness of accounting records, and timely preparation of reliable financial information. These controls are aligned with the size and nature of operations and are periodically reviewed for adequacy and effectiveness. Robust processes are in place for risk assessment, compliance monitoring, and internal audits, supported by a comprehensive ERP system that enhances transparency and operational oversight. Regular reviews by the audit committee and management help identify process improvements and ensure that controls remain responsive to evolving business needs and regulatory requirements.

Cautionary statement

This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be forward-looking statements within the meaning of applicable securities laws and regulations.

	On behalf of the Board of Directors
	For Kinetic Engineering Limited
	S/d
	Arun Hastimal Firodia
Date: 4th August, 2025	Chairman
Place: Pune	(DIN: 00057324)