Kranti Industries Ltd Management Discussions

ECONOMIC SCENARIO

GLOBAL ECONOMIC OVERVIEW

The global economy in 2025 faces considerable challenges, marking one of its most difficult periods since the 2008 financial crisis. The International Monetary Fund (IMF), in its April 2025 World Economic Outlook, reports that the global economy slowing amid heightened trade tensions, policy uncertainty, and persistent inflationary pressures. The IMF projects global GDP growth at 2.8% in 2025 and 3.0% in 2026, both downward revisions from earlier forecasts. This deceleration is attributed primarily to the impact of recent widespread tariff hikes, especially by the United States, and the resulting uncertainty global trade systems. Inflation, while moderating from previous peaks, is expected to remain above central bank targets in many advanced economies. The IMF forecasts global inflation to decline gradually, but at a slower pace than previously anticipated, with headline inflation projected at 4.0% in 2025 and 3.3% in 2026. These dynamics underscore a challenging environment for policymakers, who must balance growth concerns with the need to anchor inflation expectations maintain financial stability

Outlook

Looking forward, the IMF cautions that risks to the global economic outlook remain tilted to the downside. Escalating trade barriers, continued policy unpredictability, and financial market vulnerabilities could further dampen growth and keep inflation elevated. The IMF warns that if downside risks materialize such as a further escalation in trade tensions or a sharp correction in financial markets global growth could fall below 2.0% in 2025, with a significant probability that inflation could exceed 5.0%. On the upside, improved labour force participation, productivity gains from technology adoption, and a de-escalation of trade disputes could support stronger growth and faster disinflation. Policymakers are advised to rebuild fiscal and monetary buffers, address structural weaknesses, and enhance international cooperation to navigate this period of heightened uncertainty!

Source:

1. https://www.efginternational.com/insights/2025/imf_a_critical_ juncture_amid_policy_shifts.html

2. https://www.reuters.com/business/imf-cuts-growth-forecasts-most-countries-wake-century-high-us-tariffs-2025-04-22/

3. https://www.lemonde.fr/en/economy/article/2025/04/22/imf-forecasts-global-slowdown-the-economy-is-entering-a-new-era-says-chief-economist_6740512_19.html

INDIAN ECONOMIC REVIEW AND OUTLOOK

India remains the fastest-growing major economy globally, with real GDP growth projected at 6.2% for 2025 and 6.3% for 2026. The IMF attributes this robust performance to strong domestic demand, ongoing structural reforms, and resilient services sector growth, particularly in information technology and digital services. Inflation has moderated significantly, with headline inflation expected to average 4.5% in 2025, comfortably within the Reserve Bank of Indias target range. The countries prudent monetary policy, improved agricultural output, and effective supply-side interventions have contributed to this price stability. Despite global trade uncertainties and external shocks, Indias macroeconomic fundamentals remain solid, supported by a healthy financial sector and sound fiscal management.

The IMF maintains a positive outlook for India, emphasizing several key strengths. Continued government investment in infrastructure, a rapidly expanding digital economy, and a favourable demographic profile are expected to sustain high growth rates. The IMF also notes that Indias ongoing reforms in labour, manufacturing, and financial markets will likely enhance productivity and attract further foreign investment. Inflation is projected to remain manageable, supported by stable food prices and effective policy measures. Furthermore, Indias growing role in global supply chains and its ability to attract multinational corporations seeking diversification make it a key player in the evolving global economic landscape. While challenges such as employment generation and rural development

Sectoral Overview

Agriculture: The agriculture sector remains a cornerstone of the Indian economy, benefiting from continued policy support and targeted budget allocations. The Union Budget 2025–26 introduced the ‘Prime Minister Dhan-Dhaanya Krishi Yojana covering 100 districts to boost productivity, crop diversification, post-harvest storage, and irrigation. A comprehensive ‘Rural Prosperity and Resilience programme will address underemployment through skilling, investment, and technology, with a focus on rural women and small farmers. The government also launched a six-year "Mission for Aatmanirbharta in Pulses" and increased Kisan Credit Card loan limits to Rs 5 lakh, strengthening financial security for farmers.

Manufacturing and MSMEs: Indias manufacturing sector is entering a transformative phase, supported by the National Manufacturing Mission and Production Linked Incentive (PLI) schemes. The 2025–26 budget expands credit access and financial flexibility for MSMEs, increases investment and turnover limits for MSME classification, and enhances credit guarantees. The government is also incentivizing domestic production of clean-tech products (solar PV modules, EV batteries, wind turbines) and providing duty exemptions for critical minerals and battery components. These measures aim to position India as a global manufacturing and innovation hub. Services: The services sector continues to be the primary driver of growth, led by IT, digital services, and financial technology. Rapid digitization, a vibrant startup ecosystem, and policy support for innovation have made India the worlds third most preferred destination for technology investments.

Infrastructure: Capital expenditure has been ramped up, with Rs 11.21 lakh crore allocated for infrastructure about 3.1% of GDP. Major initiatives include the PM Gati Shakti plan, National Infrastructure Pipeline, and a Rs 1 lakh crore Urban Challenge Fund to transform cities and improve water and sanitation infrastructure. The governments asset monetization plan (Rs 10 lakh crore for 2025–30) and expanded PPP project pipeline are expected to unlock further private investment.

Energy and Green Transition: Significant budgetary allocations support the National Manufacturing Mission for clean-tech, the National Green Hydrogen Mission, and solar rooftop installations. The government has set ambitious targets for nuclear and renewable energy, introduced tax exemptions for battery storage, and is modernizing the power grid to support industrial growth and sustainability.

Exports: Exports are expected to surpass US$800 billion in FY25, with a focus on integrating MSMEs into global supply chains and boosting competitiveness in electronics, textiles, automotive, and chemicals. The Export Promotion Mission and BharatTradeNet digital platform will streamline trade and documentation, improving ease of doing business and global market access.

While challenges remain such as rural distress, job creation, and global uncertainties but the governments reform agenda, targeted sectoral initiatives, and prudent fiscal management provide a strong foundation for sustained, inclusive growth.

Source:

1. https://www.imf.org/-/media/Files/Publications/WEO/2025/April/ English/text.ashx

2. https://www.reuters.com/world/india/indias-gdp-grows-74-jan-march-qtr-fastest-year-2025-05-30/?utm

3. https://www2.deloitte.com/us/en/insights/economy/asia-pacific/ india-economic-outlook.html

4. https://www.pib.gov.in/PressNoteDetails. aspx?NoteId=154660&ModuleId=3

5. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2098352

6. https://www.plantemoran.com/explore-our-thinking/ insight/2025/02/indias-union-budget-2025-2026-confirms-priorities-of-governments-term

7. https://www.india-briefing.com/news/indias-economic-outlook-2025-gdp-forecast-35580.html/ 8. https://kpmg.com/in/en/insights/2025/05/decoding-indian-economy.html

9. https://www.india-briefing.com/news/indias-union-budget-2025-26-highlights-reforms-to-drive-economic-growth-manufacturing-consumption-36011.html/

INDUSTRY STRUCTURE AND DEVELOPMENTS

GLOBAL AUTOMOTIVE INDUSTRY

OVERVIEW

The global automotive industry between in FY 24-25 witnessed a period of accelerated transformation, marked by the growing influence of electrification, tightening margins, and shifting consumer dynamics. Original Equipment Manufacturers (OEMs) faced significant profit pressure, with average EBIT margins dropping to 5.4% - a steep decline from their post-pandemic peak. In contrast, component suppliers showed relative resilience, maintaining average margins around 6%, though regional differences remain stark, with Europe and South Korea lagging behind China in supplier profitability. These financial shifts are compelling OEMs to focus on premium models, raise prices, and streamline operations, while suppliers are pursuing consolidation and cost-efficiency strategies to survive ongoing volatility.

The industry also experienced heightened disruption from new entrants and tech-first companies leveraging artificial intelligence, connectivity, and autonomous technologies. Vehicles are increasingly becoming software-defined products, prompting both legacy players and new startups to compete on digital capabilities. This shift triggered an aggressive talent acquisition trend toward software and systems engineers, further blurring the line between traditional automotive manufacturing and the tech sector. Automakers launched several high-profile electric vehicles during the year.

During FY 2024-25, global light vehicle sales are estimated at 89.5 million units, representing a 0.8% increase from the previous year. The financial value of the market is rising faster than unit sales, driven by higher vehicle prices, the integration of advanced technologies, and the premiumization trend. The market for autonomous vehicles is projected to reach $60.3 billion in 2025, while the connected car segment is expected to hit $121 billion, highlighting the growing economic significance of emerging automotive technologies.

The global vehicle sales (cars + light vehicles) reached

27.91 million units, a 3.6% increase year-on-year. China remained the largest market, accounting for 28% of global sales and growing 5.7% over the previous year. The United States ranked second with a 19% market share and a 3.3% sales increase. Japan experienced strong momentum, rising to third place with an 11.9% increase and a 5.6% share. India followed with a 5.5% share and 2.5% growth. Germany remained the largest European market, though it saw a slight decline in sales. These figures reflect the continued dominance of Asian markets and the resilience of North America, while some European markets faced headwinds.

From a customer standpoint, global electric vehicle (EV) sales exceeded 17 million units in 2024, accounting for nearly 20% of all new vehicle sales. This momentum continued into early 2025, with a 35% year-on-year growth in Q1 EV sales, reflecting stronger adoption across markets. However, consumer hesitancy remains a challenge, particularly in the U.S., where nearly 63% of potential buyers still express reluctance to switch to EVs due to concerns over pricing, range, and charging infrastructure.

This behavioral lag has triggered governments in the EU and UK to reconsider the pace of their zero-emission mandates, with the UK adjusting its 2025 ZEV target due to lower-than-expected consumer uptake.

In emerging markets, EV penetration remains low but is growing rapidly. Chinese automakers continued to dominate globally, accounting for over 60% of global EV production. Domestically, Chinas plug-in vehicle sales made up nearly 48% of total new car sales, driven by integrated supply chains, aggressive pricing, and policy support. Meanwhile, geopolitical shifts and trade barriers, including tariffs and supply chain risks, prompted many global automakers to diversify production bases to Vietnam, Mexico, and Eastern Europe.

Overall, the year was defined by the widening gap between innovation leaders and those struggling to adapt. Stakeholders across the value chain - including OEMs, suppliers, management teams, and policy makers—are being forced to rethink business models, realign investments, and focus on agility to succeed in this evolving landscape.

Outlook

Looking ahead, it is expected that global light vehicle sales to reach approximately 91.5 million units in 2025–26, up over 2% from FY 2024–25. Growth will be supported by government incentives, especially in China and other Asian markets, and a continued recovery in the US. However, risks such as trade tensions, regulatory changes, and economic volatility persist. The shift toward electrification is expected to accelerate, with electric vehicles projected to account for over 25% of global car sales in 2025. Source:

1. https://autokunbo.com/global-auto-industry-market-size-2025-country-by-country-forecast/

2. https://www.just-auto.com/industry-data/global-light-vehicle-sales-strong-in-march-2025-globaldata/

3. https://www.iea.org/news/more-than-1-in-4-cars-sold-worldwide-this-year-is-set-to-be-electric-as-ev-sales-continue-to-grow

4. https://www.jdpower.com/business/press-releases/jd-power-globaldata-forecast-march-2025

5. https://www.focus2move.com/global-auto-markets/

6. https://www.bain.com/insights/automotive-profitability-report-2025/

7. https://www.iea.org/reports/global-ev-outlook-2025

8. https://www.rolandberger.com/en/Insights/Publications/Global-Automotive-Supplier-Study-2025.html

9. https://www.mckinsey.com/industries/automotive-and-assembly/ our-insights/the-road-ahead-for-electric-vehicles

10. https://www.jdpower.com/business/press-releases/2025-us-electric-vehicle-consideration-study

11. https://newsroom.aaa.com/2024/12/most-americans-unlikely-to-consider-electric-vehicles-study/

12. https://www.theguardian.com/business/2025/apr/03/uk-government-ev-quota-changes-due-to-consumer-pushback

13. https://www.autonews.com/sales/us-ev-market-share-march-2025

14. https://www.reuters.com/business/autos-transportation/gm-equinox-ev-sales-performance-2025-04-12/

15. https://www.scmp.com/business/china-business/article/3256347/ china-ev-export-dominance-electric-cars-account-60-global-output-2024

INDIAN AUTOMOTIVE INDUSTRY

OVERVIEW

Indias automotive industry in FY 2024–25 demonstrated resilience and steady growth, supported by robust demand across most vehicle segments, ongoing government policy support, and a shift toward sustainable mobility. The sector benefited from improving rural demand, new model launches, and increased infrastructure investment, even as it navigated challenges like cost pressures and regulatory changes. The industrys transformation is marked by a growing focus on electric vehicles (EVs), advanced technologies, and export expansion, positioning India as a global automotive hub. According to the Society of Indian Automobile Manufacturers (SIAM), the Indian automobile industry achieved domestic sales growth of 7.3% in FY 2024–25, with the total market valued at approximately Rs 22 lakh crore. This growth was driven by strong demand for two-wheelers and utility vehicles, continued government infrastructure spending, and supportive macroeconomic conditions. Exports also surged by 19.2% during the year, reflecting Indias rising prominence in global automotive trade.

Total Vehicles Sold and Regional Insights

In FY 2024–25, total domestic vehicle sales reached record highs. Passenger vehicle sales hit an all-time high of 4.3 million units, up 2% year-on-year, with utility vehicles making up 65% of this segment. Two-wheeler sales surged by 9.1% to 19.6 million units, led by strong rural demand and new scooter launches. Three-wheeler sales rose 6.7% to 741,420 units, driven by last-mile mobility needs, while commercial vehicle sales saw a slight decline of 1.2% to 956,671 units. Electric vehicles (EVs) continued their upward trajectory, with EV penetration in two-wheelers exceeding 6% and total EV sales for Q4 FY 2024–25 reaching over 533,000 units, or 8.09% of total quarterly sales.

Regional Insights:

Utility Vehicles and Two-Wheelers: Both segments saw strong sales in urban and rural areas, with rural two-wheeler sales growing by 9.1% in FY 2024–25, driven by improved incomes and favorable monsoon prospects. Scooters and motorcycles were key contributors to this growth.

High-Speed Electric Two-Wheelers: Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh, and Madhya Pradesh led in high-speed electric two-wheeler sales, which increased by 35% in these states during FY 2024–25. This growth was supported by state-level EV incentives and expanding charging infrastructure.

E-Rickshaw Sales: Uttar Pradesh, Bihar, and Delhi dominated e-rickshaw sales, with the segment growing by 12% in FY 2024–25. Uttar Pradesh led in volume, followed by Bihar and Delhi, reflecting the importance of last-mile connectivity in these regions.

Electric Four-Wheelers: Maharashtra topped electric four-wheeler sales, which grew by 28% in FY 2024–25, driven by urban adoption and government subsidies.

Segment-wise Performance

The Indian automotive industrys performance in FY 2024–25 was characterized by strong momentum across most segments, with each category contributing uniquely to the sectors overall growth story.

Passenger vehicles continued their upward trajectory, posting their highest-ever sales in FY 2024–25. According to SIAM, sales reached 4.3 million units, a 2% increase over FY 2023–24s 4.21 million units. Within this segment, utility vehicles remained the primary growth driver, accounting for nearly two-thirds of all passenger vehicle sales. Maruti Suzuki, the market leader, reported a 2.7% rise in sales, while Mahindra & Mahindra and Toyota registered impressive growth of 19.9% and 27.8% respectively, reflecting the growing consumer preference for SUVs and feature-rich models.

The two-wheeler segment, the industrys largest by volume, saw a strong rebound. SIAM data shows domestic two-wheeler sales rose by 9.1%, from 17.2 million units in FY 2023–24 to 19.6 million units in FY 2024–25. This surge was driven by improved rural incomes, new model launches, and pent-up demand post-pandemic. Hero MotoCorp maintained its leadership, while scooters outpaced motorcycles in growth, especially in urban and semi-urban markets. Three-wheelers experienced a notable resurgence, with sales climbing 6.7% to 741,420 units in FY 2024–25, up from 695,000 units in the previous year. This growth was led by the rapid adoption of electric three-wheelers and the continued need for affordable last-mile connectivity in cities and towns.

The commercial vehicle segment saw a marginal decline of 1.2% in FY 2024–25, with sales totaling 956,671 units compared to 968,000 units in FY 2023–24. While demand for buses and heavy trucks remained stable supported by infrastructure development sales of light commercial vehicles softened amid changing freight patterns and evolving market dynamics. The EV segment was a clear standout, underscoring Indias accelerating shift toward green mobility. Total EV registrations in FY 2024–25 reached 1.97 million units, a 16.9% jump from 1.68 million units in FY 2023–24. Electric two-wheeler sales surged by 21% to 1.15 million units, while electric three-wheeler (L5 category) sales soared by 57% to 159,235 units. Electric passenger vehicle registrations crossed the 100,000 mark, growing by 18.2% year-on-year. This robust performance was driven by government incentives, expanding charging infrastructure, and heightened consumer awareness of sustainability.

These insights not only highlight the vibrancy and adaptability of Indias automotive sector but also point to a future shaped by regional strengths, evolving consumer preferences, and a decisive shift toward electrification and innovation.

Outlook

The outlook for Indias automotive industry remains positive. SIAM projects continued growth across all major segments, supported by stable macroeconomic conditions, proactive government policies, and infrastructure spending. The industry is expected to benefit from RBIs recent rate cuts, income tax reforms, and a forecasted normal monsoon, which should boost rural demand. Export momentum is likely to persist, especially for "Made in India" vehicles in Africa and Latin America. Indias automotive sector is rapidly adopting advanced technologies, including electric drivetrains, connected vehicle features, and AI-driven safety systems. The integration of Advanced Driver Assistance Systems (ADAS), over-the-air software updates, and smart infotainment is becoming mainstream in new vehicle launches. EVs are set to become more affordable and practical with advancements in battery technology, local manufacturing of components, and expanded charging infrastructure. The push for decarbonization will also accelerate the adoption of alternative fuels and sustainable materials. As a result, India is poised to emerge as a major player in the global transition to greener, smarter, and safer mobility. Source

1. https://www.siam.in

2. https://www.infomerics.com/admin/uploads/automobile-industry-apr25.pdf

3. https://www.motoring-trends.com/cover-story/indias-auto-industry-rides-the-momentum-record-highs-renewed-optimism-mark-fy-2024-25

4. https://economictimes.com/industry/auto/auto-news/auto-sales-hit-record-highs-for-third-year-despite-slowing-growth-siam-data-shows/articleshow/120311048.cms

5. https://evreporter.com/india-ev-sales-report-q4-fy-2024-25-excerpts/

6. https://www.indiatoday.in/auto/latest-auto-news/story/ auto-industry-sees-steady-growth-in-may-2025-siam-report-2741385-2025-06-16

7. https://theprint.in/economy/indias-passenger-vehicle-sales-hit-record-high-at-43-lakh-units-in-fy24-25-utility-vehicles-driver-of-growth-siam/2590216/

8. https://auto.hindustantimes.com/auto/news/indian-auto-sector-grows-with-record-pv-sales-in-fy25-while-evs-surged-by-17-check-details-41744696864914.html

9. https://www.steelorbis.com/steel-news/latest-news/ indian-passenger-car-sales-see-low-single-digit-growth-in-fy-2024-25-1385824.htm

10. https://www.convergence-now.com/mobility/india-crosses-one-million-ev-sales-milestone-in-fy-202425-119243/

11. https://fada.in/images/press-release/167f3463b1a212FADA%20 Releases%20FY%202025%20and%20March%202025%20 Vehicle%20Retail%20Data.pdf

12. https://economictimes.com/industry/auto/auto-news/indias-passenger-vehicle-sales-hit-record-high-at-43-lakh-units-in-fy25-utility-vehicles-driver-of-growth-siam/articleshow/120301623.cms

13. https://www.carandbike.com/news/twowheeler-sales-fy2425-hero-motocorp-leads-the-chart-honda-just-a-step-behind-3216600

14. https://www.motoring-trends.com/cover-story/indias-auto-industry-rides-the-momentum-record-highs-renewed-optimism-mark-fy-2024-25

15. https://www.publicnow.com/view/ DCEB4E1A9CE5577DCB2A641ABB4FD88969D0834C?1744782339

GLOBAL AUTO COMPONENTS INDUSTRY

OVERVIEW

The global auto components industry is undergoing a period of transformation and steady expansion, driven by rapid technological advancements, the electrification of vehicles, and the increasing complexity of automotive systems. Suppliers are adapting to the growing demand for electric, connected, and autonomous vehicles, as well as evolving consumer preferences for vehicle customization and sustainability. The industry is also benefiting from the expansion of the global vehicle parc and the aging of vehicles, which boosts demand for replacement parts and aftermarket services. As automakers and suppliers navigate supply chain challenges and regulatory shifts, they are investing in innovation and resilient manufacturing to maintain competitiveness in a dynamic market environment.

According to GlobeNewswire, the global auto parts and accessories market is projected to reach $2.4 trillion by 2030, growing at a compound annual growth rate (CAGR) of 2.8%. For 2025, the estimated market size is approximately $2 trillion, reflecting steady growth as automakers ramp up production and the aftermarket segment expands. China remains a key growth driver, forecasted to grow at an impressive 4.8% CAGR through the decade, while the driveline and powertrain segment alone is expected to reach $736.2 billion by 2030.

Demand Trends

The global auto components industry is witnessing robust demand trends,underpinnedbyseveral convergingfactors. Electrification is the most powerful catalyst: as electric vehicle (EV) adoption accelerates—driven by regulatory targets, consumer awareness, and falling battery costs—demand for specialized EV components such as batteries, power electronics, and lightweight materials is surging. For example, Bloomberg New Energy Finance projects EVs to account for 10% of all new car sales by 2025, with this share expected to rise sharply in the following decade. Another green shoot is the rise of advanced driver-assistance systems (ADAS) and autonomous driving technologies. The global ADAS sensor market alone is expected to reach $36.07 billion in 2025, growing at a CAGR of 8.1% as automakers integrate radar, LiDAR, and AI-driven systems to meet new safety regulations and consumer expectations. This trend is reinforced by regulatory mandates in the EU, US, and Asia, requiring features like automated emergency braking and lane-keeping assist in all new vehicles.

Sustainability and material innovation are also shaping demand. Automakers and suppliers are increasingly using recycled plastics, aluminum, magnesium alloys, and plant-based composites to reduce vehicle weight and emissions. The push for lighter, stronger, and more eco-friendly materials is driving new product development and reshaping supply chains.

The aftermarket segment is another area of strength, buoyed by the aging global vehicle fleet and the growing popularity of vehicle customization. As more vehicles stay on the road longer, demand for replacement parts, accessories, and performance upgrades continues to climb. Digital sales channels and e-commerce platforms are making it easier for consumers and repair shops to access a wide range of components, further fueling market growth.

Outlook

The outlook for the global auto components industry is positive and dynamic. Electrification will remain the primary growth driver, with EV-specific components, battery systems, and power electronics in high demand. Regulatory requirements for emissions, safety, and data connectivity will push suppliers to innovate and invest in advanced materials, sensor technologies, and software-defined components. The Asia Pacific region, led by China, will continue to dominate market expansion, supported by rising vehicle production, robust government incentives for EVs, and increasing demand for replacement parts. The integration of artificial intelligence, IoT, and 3D printing will further transform manufacturing processes and product offerings. For instance, 3D printing is enabling the production of complex, lightweight, and customizable parts at lower costs and faster turnaround times. The aftermarket will remain a key growth area, especially as the share of vehicles older than five years increases in mature markets like Europe and North America.

Despite these opportunities, the industry faces challenges such as rising raw material costs, supply chain vulnerabilities, and the need for continuous upskilling of the workforce to handle new technologies. Nonetheless, the sector is well-positioned to benefit from the global shift toward electric, connected, and autonomous vehicles. Source

1. https://www.globenewswire.com/news-release/2025/04/07/3056526/0/en/Auto-Parts-And-Accessories-Global-Industry-Business-Report-2025-Market-to-Reach-2-4-Trillion-by-2030-China-Forecasted-to-Grow-at-an-Impressive-4-8-CAGR.html

2. https://explodingtopics.com/blog/auto-industry-trends

3. https://www.futuremarketinsights.com/reports/adas-sensors-market

4. https://www.cati.ca/the-future-of-auto-parts-innovation/

5. https://dataintelo.com/report/auto-components-market

6. https://aminds.com/5-trends-will-shape-the-automotive-parts-manufacturing-in-2024/

INDIAN AUTO COMPONENTS INDUSTRY

OVERVIEW

Indias auto components industry has emerged as a global force, supporting the countrys automotive sector and contributing significantly to exports, employment, and GDP. In FY 2023–24, the industry achieved a record turnover of Rs 6.14 trillion (US$74.1 billion), growing by 9.8% year-on-year, and directly employs over 1.5 million people. The sector supplies a wide spectrum of products - engine parts, drive transmission, electronics, body and chassis, and more to both domestic vehicle manufacturers and international markets. Indias cost competitiveness, skilled workforce, and strong policy support have positioned it as a preferred global sourcing hub, with exports now accounting for 18% of total turnover and a trade surplus of US$300 million in FY24.

Current Industry Size

The Indian auto components industry is expected to cross US$80.1 billion in revenue in FY 2024–25, up from US$73.1 billion in FY 2023–24, reflecting a robust 9.8% annual growth rate. In the first half of FY 2024–25 alone, turnover reached Rs 3.32 trillion (US$39.6 billion), up 11.3% year-on-year. Supplies to OEMs in the domestic market grew by 11.2%, while exports rose 7% to US$11.1 billion, and imports increased 4% to US$11 billion, resulting in a trade surplus.

Exports have grown at a 10% CAGR since FY2020, with the US (27% share) and Europe (31%) as top destinations. Drive transmission, steering, and engine components account for over half of all exports and nearly half of imports. The aftermarket segment reached Rs 47,416 crore (US$5.7 billion) in H1 FY25, up 5% year-on-year, driven by the aging vehicle parc and increased e-commerce penetration. Indias auto components sector is witnessing strong demand, underpinned by several positive trends:

Robust Domestic Vehicle Sales: Growth in two-wheelers (up 10% in FY24), passenger vehicles (up 7%), and utility vehicles (13% growth in UVs in H1 FY25) has fueled component demand.

Electri_cation and Technology Shift: The share of EV components doubled to 6% of total production in FY24, with battery tech and powertrain systems now comprising 45% of EV manufacturing costs. EV sales grew 22% in H1 FY25; electric two-wheelers rose 26% while e-passenger vehicles saw a short-term dip.

Export Momentum: Exports hit US$21.2 billion in FY24, with a 10% CAGR since FY2020, reflecting Indias growing role in global supply chains.

Aftermarket Expansion: The aftermarket is projected to reach US$14 billion by 2028, driven by pre-owned vehicle sales, a growing vehicle parc (expected to surpass 340 million units by 2028), and rising demand for replacement parts and customization.

Localization and Value Addition: The industry is increasingly focused on localizing advanced components and reducing import dependence, especially in electronics and battery systems.

Regional Hubs: Northern and southern India remain key manufacturing and export hubs, supported by established OEM and supplier ecosystems.

Government Initiatives to Boost the Industry

The Indian government has launched several landmark initiatives to propel the auto components sector:

Production Linked Incentive (PLI) Scheme: With a budgetary outlay of Rs 25,938 crore (US$3.13 billion) for FY23–FY27, the PLI scheme incentivizes manufacturing of Advanced Automotive Technology (AAT) products, including EV and hydrogen components, with incentives of 8–18% for eligible products. As of December 2024, over Rs 25,000 crore in investments have been committed, with 85 approved applicants and 38,186 jobs generated.

FAME II and PM E-Drive:_The FAME II scheme (Rs 11,500 crore outlay) and PM E-Drive (Rs 10,900 crore) promote EV adoption, charging infrastructure, and technology platforms for clean mobility.

Make in India & Atmanirbhar Bharat: These flagship policies drive localization, reduce import dependence, and encourage FDI, especially in critical components like engines, transmissions, and batteries.

National Programme on ACC Battery Storage: With a budget of Rs 18,100 crore, this program supports domestic battery manufacturing, a key enabler for EV growth.

GST and Regulatory Support: Lower GST rates on EVs and policy changes to ease licensing and promote green mobility have further boosted the sector.

Outlook

The outlook for Indias auto components industry remains highly positive. Crisil projects 7–9% revenue growth in FY26, with exports expected to reach US$30 billion by 2026 and the industry turnover likely to surpass US$100 billion by the end of the decade. Growth will be led by: Continued expansion in two-wheelers, passenger vehicles, and utility vehicles.

Rapid electrification and the scaling up of domestic battery and electronics manufacturing.

Rising global demand for Indian components as global OEMs diversify supply chains and de-risk from China.

Aftermarket and replacement parts demand, especially as Indias vehicle fleet ages and formalization increases.

Ongoing investments in R&D, automation, and digitalization, with a focus on ADAS, lightweight materials, and green technologies.

Source

1. https://www.pib.gov.in/PressNoteDetails. aspx?NoteId=154025&ModuleId=3

2. https://acma.in/pdf/Ind%20Presentation%20FY24.pdf

3. https://www.india-briefing.com/news/record-turnover-for-indias-auto-component-industry-details-here-33885.html/

4. https://www.acma.in/uploads/docmanager/ ACMAEXIMReportFY24.pdf

5. https://www.rubixds.com

6. https://auto.economictimes.indiatimes.com/news/auto-components/indias-auto-parts-industry-poised-to-cross-80-bn-revenue-in-2024-25/115510161

7. https://www.globenewswire.com/news-relea se/2024/12/20/3000507/28124/en/India-Auto-Ancillary-Market-Report-2024-2029-India-s-Emerging-Position-as-an-Auto-Hub-and-De-risking-of-the-Supply-Chain-by-Global-OEMs-Driving-O-pportunities.html

8. https://telematicswire.net/acma-industry-performance-review-h1-fy25/

9. https://cfo.economictimes.indiatimes.com/news/indian-auto-components-industry-sees-11-3-growth-in-h1-fy25-report/116314947

10. https://electronicsera.in/indian-auto-component-industry-grows-11-3-percent-to-usd-39-6-bn-in-first-half-of-2024-25/

11. https://www.marketsandata.com/industry-reports/india-automotive-component-market

12. https://heavyindustries.gov.in/pli-scheme-automobile-and-auto-component-industry

13. https://economictimes.indiatimes.com/industry/auto/ auto-news/economic-survey-2024-pli-scheme-for-auto-sector-sees-investment-proposals-worth-rs-67690-crore/ articleshow/111921999.cms

14. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2115609

15. https://www.ndtvprofit.com/business/automakers-auto-component-firms-get-rs-26000-crore-pli-boost-from-government

16. https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2121826

17. https://emobilityplus.com/2025/04/01/driving-growth-how-make-in-india-is-transforming-the-auto-and-ev-industry/

18. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2121826

INDIAN TRACTOR INDUSTRY OVERVIEW

Indias tractor industry, among the largest globally, remains a cornerstone of the countrys rural economy and mechanization drive. The market size of the Indian tractor industry for FY 2024–25 is estimated at Rs 73,000 crore. This figure reflects the total value of tractors sold in India between April 2024 and March 2025, with nearly 8.8–9.4 lakh units sold during the year. The industry is projected to grow at a CAGR of 6.37%, reaching Rs 1,31,000 crore by 2033. Despite a slight contraction during the year, the sectors performance remains robust, especially considering the challenges posed by erratic monsoons, rural inflation, and credit constraints. The industrys resilience is further underscored by its ability to maintain high sales volumes and its pivotal role in supporting agricultural productivity, rural livelihoods, and the broader mechanization of Indian farming.

Growth Drivers

The Indian tractor markets long-term growth is propelled by several structural and policy factors. Foremost among these is the ongoing push for farm mechanization, which is critical for enhancing crop productivity, reducing labor dependency, and addressing the challenges of land fragmentation. Government initiatives such as capital subsidies, interest subvention schemes, and GST reductions on agricultural machinery have made tractors more accessible to small and marginal farmers. The steady increase in Minimum Support Prices (MSPs), healthy crop procurement, and improved rural credit availability have boosted farm incomes, enabling greater investment in mechanization. The sector also benefits from the rising adoption of precision agriculture, GPS-guided tractors, and telematics, which are improving efficiency and driving demand for technologically advanced models. Additionally, the emergence of rental and leasing models is making tractors accessible to farmers with limited capital, while the expansion of rural infrastructure and irrigation projects continues to support demand.

Challenges

Despite its strengths, the Indian tractor industry faces several persistent challenges. The most significant is the high dependence on monsoons and rainfall patterns, which directly influence rural sentiment and tractor purchases. Erratic weather, as seen in early FY25, can disrupt sowing cycles and dampen demand. Fragmentation of landholdings remains a structural issue, limiting the scale at which mechanization can be adopted and making it difficult for small farmers to afford new equipment. Access to finance is another hurdle, especially for marginal farmers who may lack collateral or credit history. The sector also contends with rising input costs, fluctuating fuel prices, and periodic supply chain disruptions. Environmental concerns are mounting as well, with conventional tractors contributing to soil compaction and emissions—prompting the need for sustainable alternatives like electric and hybrid tractors. Lastly, the industry faces intensifying competition, both from domestic players and international entrants, which can pressure margins and market share.

Outlook

Looking ahead, the Indian tractor industry is well-positioned for recovery and growth. With expectations of a normal monsoon in FY 2025–26, stable MSP policies, and continued government incentives for mechanization, industry analysts project a return to high single-digit growth in the coming year. The sector is also likely to benefit from the ongoing expansion of precision farming, increasing demand for compact and technologically equipped tractors, and the rising use of tractors for non-agricultural applications such as haulage and infrastructure projects. The industrys ambition to cross the 1 million annual sales mark will depend on sustained policy support, deeper credit penetration, and further mechanization in underpenetrated regions like eastern India. As manufacturers invest in R&D, digital platforms, and after-sales service, the sector is poised for long-term, sustainable growth.

Source

1. https://www.thehindubusinessline.com/companies/tractor-industry-kicks-off-fy26-on-positive-note-with-april-sales-growth/ article69567744.ece

2. https://www.imarcgroup.com/india-tractor-market

3. https://www.autocarpro.in/news/tractor-market-rebounds-in-2024-25-on-strong-rural-growth-125870

4. https://www.en.krishakjagat.org/mechanization-technology/ indias-tractor-market-eyes-the-1-million-mark-what-will-it-take/

5. https://www.tractorjunction.com/tractor-news/retail-tractor-sales-report-financial-year-2024-25/

6. https://www.mordorintelligence.com/industry-reports/asia-pacific-agricultural-tractor-machinery-market

7. https://mobilityforesights.com/product/farm-tractor-market-in-india

8. https://www.tractorjunction.com/tractor-news/tractor-sales-fall-in-2024-whats-next-for-the-industry-in-2025/

9. https://www.tractorjunction.com/tractor-news/indian-tractor-market-sees-9-12-growth-in-may-2025/

10. https://www.techsciresearch.com/report/india-tractor-market/2884.html

11. https://www.datainsightsmarket.com/reports/india-agricultural-tractor-market-842

12. https://mobilityforesights.com/product/tractor-market

. https://www.en.krishakjagat.org/mechanization-technology/ mahindra-swaraj-strengthen-grip-in-fy25-tractor-market-report/

14. https://www.en.krishakjagat.org/mechanization-technology/ indias-tractor-market-eyes-the-1-million-mark-what-will-it-take/

INDIAN TRACTOR MACHINERY & COMPONENTS INDUSTRY OVERVIEW

Indias tractor machinery and components industry remains a vital pillar for the countrys agricultural and rural development. According to the Tractor and Mechanization Association (TMA), domestic tractor sales in FY 2024–25 stood at 8,83,095 units, reflecting a marginal decline of 1% from 8,92,410 units in FY 2023–24. Despite this dip, the industry nearly matched its all-time sales peak, underscoring its resilience and the central role of mechanization in Indian agriculture. The sector is also supported by a robust components and ancillary industry, which supplies not only domestic OEMs but also a growing export market, with India emerging as a significant global source for tractor components and assemblies.

Growth Drivers

Favorable Monsoon and Crop Output:_ The IMDs forecast of above-normal rainfall (105% of the long period average) and a 7.9% YoY increase in kharif crop output in 2025 have improved farm incomes and rural sentiment, directly supporting tractor and machinery demand.

Government Support and Mechanization Schemes: Initiatives like the Sub-Mission on Agricultural Mechanization (SMAM), subsidies for crop residue management, and Custom Hiring Centres (CHCs) are making advanced machinery accessible to small and marginal farmers. The governments focus on doubling farmers income and increasing mechanization penetration, especially in eastern and northeastern India, is expanding the addressable market.

Financing and Credit Availability: The widespread availability of affordable credit through the Kisan Credit Card (KCC) scheme and partnerships between manufacturers and financial institutions have made tractor purchases more accessible, especially for first-time buyers.

Technological Advancements: There is rising adoption of 4WD and mini tractors, which are better suited to small landholdings and challenging terrains. Manufacturers are increasingly integrating GPS, telematics, and precision farming tools into tractor models, driving demand for advanced components and electronics.

Export Growth: Indias tractor and component exports have remained robust, supported by cost competitiveness and quality improvements. The US and Europe remain the largest destinations, and the export share is expected to rise further as global OEMs diversify their sourcing.

Challenges

Monsoon Dependency and Weather Volatility: The sector remains highly sensitive to rainfall patterns, as seeninthe7%dropinsalesinFY2023–24duetoaweak monsoon and reduced kharif crop production. Erratic weather and climate change continue to pose risks to rural incomes and machinery demand.

Fragmented Landholdings:_The prevalence of small and fragmented farms limits the economic viability of large machinery and restricts market expansion for higher HP tractors and advanced implements.

Credit and A_ordability Barriers: While financing options have improved, many small and marginal farmers still face challenges in accessing credit or affording modern machinery without subsidies or shared usage models.

Regulatory and Emission Norms:_ The upcoming TREM V emission standards (effective April 2026) may lead to pre-buying in FY 2025–26 but could also increase costs and require significant component upgrades, posing challenges for manufacturers and suppliers.

Aftermarket and Service Gaps: Ensuring reliable after-sales support, timely spare parts availability, and skilled service networks remains a challenge, especially in remote and underpenetrated regions.

Outlook

Looking ahead, the Indian tractor machinery and components industry is poised for moderate but sustainable growth. The continued expansion of mechanization, government incentives, and the rising adoption of compact and technologically advanced tractors will drive demand for both machinery and components. Export prospects remain strong as global OEMs diversify supply chains and Indias reputation for quality and cost-competitiveness grows. However, the industry must navigate challenges related to input costs, regulatory changes, and the need for deeper rural penetration and service support to sustain its growth trajectory.

Source

1. https://www.thehansindia.com/business/indias-auto-parts-sector-to-clock-9-pc-growth-in-2025-26-report-973000

2. https://cfo.economictimes.indiatimes.com/news/indias-auto-parts-sector-to-clock-9-pc-growth-in-2025-26-report/121311547

3. https://www.mordorintelligence.com/industry-reports/india-agricultural-tractor-machinery-market

4. https://www.renub.com/india-agricultural-tractor-market-p.php

5. https://economictimes.indiatimes.com/industry/auto/lcv-hcv/ tractor-sales-in-india-likely-to-see-4-7-growth-in-fy26-icra/ articleshow/121929864.cms

6. https://auto.economictimes.indiatimes.com/news/automotive/ tractor-sales-in-india-likely-to-see-4-7-growth-in-fy26-icra/121943753

7. https://www.datainsightsmarket.com/reports/india-agricultural-tractor-market-842

BUSINESS AND FINANCIAL OVERVIEW

Kranti Industries Ltd., established in 1981, has evolved into a trusted manufacturer of precision-machined components serving the automotive and engineering sectors. With decades of expertise, the Company has developed deep capabilities in producing critical parts such as transmission housings, axles, chassis elements, and engine assemblies. Its diversified customer base spans across tractors, construction equipment, commercial vehicles, industrial machinery, and electric mobility applications.

Operating from its advanced manufacturing facilities in Pune, Kranti Industries leverages CNC machining, multi-axis capabilities, vertical turret lathes, and automated inspection systems to ensure consistent product quality, process efficiency, and design precision. The Companys infrastructure is further supported by certified quality systems, environmental standards, and health and safety protocols, reflecting its commitment to responsible and reliable manufacturing practices.

Over the years, Kranti has built long-standing relationships with reputed domestic and international OEMs and Tier-I suppliers. Its ability to co-develop, adapt to evolving customer specifications, and deliver precision parts with a high degree of customisation has positioned it as a value-adding partner in global supply chains.

FY 2024–25 marked a period of operational strengthening for Kranti Industries, with strategic progress in areas such as quality certifications, process automation, and export market expansion. The integration of advanced manufacturing practices, combined with a sharp focus on sustainability and innovation, continues to enhance the Companys competitiveness and readiness for emerging industry trends such as electrification and intelligent mobility.

Looking ahead, Kranti Industries remains focused on scaling its capabilities, diversifying its end-user markets, and aligning with the evolving expectations of the precision engineering sector both in India and globally.

The financial statements of the company were compiled adhering to the Indian Accounting Standards (also known as ‘Ind AS), as per the notification from the Ministry of Corporate Affairs following Section 133 of the Companies Act 2013 (‘Act), along with the Companies (Indian Accounting Standards) Rules 2015 as they have been updated, and other relevant clauses within the Act.

Its brief financial performance for 2024-25 is given below: (Amount in Rs. Lakhs)

Particulars___________	For Year ended March 31, 2025	For Year ended March 31, 2024
Revenue from Operation	7221.19	8333.14
EBITDA	846.92	1057.44
Depreciation and Finance Cost	625.51	614.83
Profit Before Tax	-113.57	139
Tax Expenses	-38.18	27.96
Net Profit	-75.39	111.04

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios, alongwith detailed explanations thereof including:

Ratios	2024-25	2023-24	% Change and Reason
Debtors Turnover Ratio	604%	762%	26%
Inventory Turnover Ratio	291%	423%	46%
Debt Service Coverage Ratio (Times)	1.28	1.59	24%
Current Ratio	109%	114%	4%
Debt Equity Ratio	87%	98%	13%
Gross Profit Margin (%)	41.00%	39.30%	2.76%
Net Profit Ratio (%)	-1.04%	1.33%	-228%
Return on Capital Employed (%)	0.03	0.07	144%

RISK MANAGEMENT

The Company has a comprehensive risk management framework designed to identify, evaluate, and mitigate risks that could impact the companys operations and objectives. Key elements of their risk management strategy include:

1. Proactive Risk Identification: The Company continuously monitors potential risks that could affect their business. This includes economic, environmental, regulatory, operational, and market risks.

2. Sustainability and Compliance: The Company places significant emphasis on sustainability and environmental compliance. The operations are audited regularly to ensure adherence to environmental norm and are certified by various international organisations, underscoring their commitment to health, safety and environmental management.

3. Diversification: By diversifying the operations and markets, the Company mitigates risks associated with dependency on a single market or product. This strategy helps them to balance their portfolio and enhances resilience against regional or sector-specific downturns.

4. Corporate Governance: The Company adheres to robust corporate governance practices, including a well-defined Code of Conduct for the Board and senior management, insider trading regulations, and regular compliance reporting. These practices ensure transparency and accountability in their operations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys internal audit system has been continuously monitored and updated to ensure that assets are safeguarded, established regulations are complied with and pending issues are addressed promptly. The audit committee reviews reports presented by the internal auditors on a routine basis. The committee makes note of the audit observations and takes corrective actions wherever necessary. It maintains constant dialogue with statutory and internal auditors to ensure that internal control systems are operating effectively. Based on its evaluation (as provided under Section 177 of the Companies Act, 2013 and Clause 18 of SEBI Listing Regulations), the Audit Committee has concluded that as on 31st March, 2025, the Internal Financial Controls were adequate and operating effectively. M/s A.D.V. & Associates, the Statutory Auditors of the Company audited the financial statements included in this Annual Report and issued a report on the internal controls over financial reporting (as defined in Section 143 of the Companies Act, 2013).

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company believes that its dedicated and motivated employees are its greatest asset. The Company till now has offered competitive compensations, healthy work environment and the employee performances are recognized through a planned reward and recognition programme. The Company intends to develop a workplace where every employee can recognize and attain his or her true power. The Company motivates individuals to undertake voluntary projects apart from their scope of work that help them to learn and nurture creative thinking. The Company employed [] employees on group level and [] employees on standalone basis as on 31st March, 2025.

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. Forward–looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments.