Krishna Ventures Ltd Management Discussions

Global Economic Overview

After enduring a prolonged and unprecedented series of shocks, the global economy appeared to have stabilized, with steady yet underwhelming growth rates. However, the landscape has changed as governments around the world reorder policy priorities and uncertainties have climbed to new highs. Forecasts for global growth have been revised markedly down compared with the January 2025 World Economic Outlook (WEO) Update, reflecting effective tariff rates at levels not seen in a century and a highly unpredictable environment. Global headline inflation is expected to decline at a slightly slower pace than what was expected in January.

Intensifying downside risks dominate the outlook, amid escalating trade tensions and financial market adjustments. Divergent and swiftly changing policy positions or deteriorating sentiment could lead to even tighter global financial conditions. Ratcheting up a trade war and heightened trade policy uncertainty may further hinder both short-term and long-term growth prospects. Scaling back international cooperation could jeopardize progress toward a more resilient global economy.

At this critical juncture, countries should work constructively to promote a stable and predictable trade environment and to facilitate international cooperation, while addressing policy gaps and structural imbalances at home. This will help secure both internal and external economic stability.

The IMF revised global growth down to 2.8% for 2025, and projected 3.0% growth for 2026. The worlds largest economy, the US, is projected to grow by just 1.8%, significantly lower than last years expectations due to policy uncertainty and trade tensions. Inflation rates are expected to decline but at a slower pace than anticipated, and downside risks remain, particularly from trade tensions and volatile financial markets. Global economies are experiencing rapid aging, driven by declining fertility rates and rising life expectancy.

Indian Economy Overview

While Indias growth forecast has been slightly revised down from 6.5% to 6.2% for 2025, it remains the fastest-growing major economy among its global counterparts. The IMF projects Indias nominal gross domestic product (GDP) to reach USD 4.187 trillion in 2025, surpassing Japans estimated USD 4.186 trillion. Despite this slight downtrend, India continues to outperform most global and regional competitors, including China, which is projected to grow at a slower rate. Chinas Gross Domestic Product (GDP) growth forecast for 2025 has been downgraded to 4.0% from 4.6%, making Indias growth trajectory stand out. A key driver of Indias growth is private consumption, particularly in rural areas, which is expected to remain strong, even amid global economic uncertainty.

The Private Consumption is a significant driver, especially in rural areas, ensuring steady domestic demand despite global economic challenges.

o Indias private consumption has nearly doubled to Rs. 1.83 lakh crore in 2024, growing at a 7.2% Compound Annual Growth Rate (CAGR), surpassing the US, China, and Germany.

o The country is on track to become the worlds third-largest consumer market by 2026, with the middle class expanding rapidly.

o By 2030, the number of individuals earning over Rs. 8.73 lakh annually is expected to nearly triple.

o Indias per capita income is projected to exceed Rs. 3.49 lakh by 2030, driving consumption growth.

Indias robust fiscal management, with a lower debt-to-GDP ratio of 56.8% in FY25 compared to its competitors like the US, which has a debt-to-GDP ratio of 124.0%, along with structural reforms, helps maintain stability. Investment in infrastructure and digitalization boosts productivity and job creation, enhancing long-term growth prospects. Indias digital economy has become a significant contributor to its economic growth, accounting for 11.74% of GDP in 2022-23. Initiatives like the Pradhan Mantri Jan Dhan Yojana for financial inclusion, and Make in India along with Production-Linked Incentive schemes to boost manufacturing have strengthened Indias economic dynamism.

Moreover, the growing adoption of digital technologies, including Artificial Intelligence and renewable energy solutions, supports higher productivity and resilience in economic activities. Indian startups are likely to create 50 million new jobs and add USD 1 trillion to the economy by 2029-30 (FY30). Indias technology sector is witnessing rapid growth and is projected to reach USD 300-350 billion over the next five years. External Demand and Trade Diversification: Indias increased integration into global value chains and trade agreements provides growth opportunities and buffers against global volatility. Indias share in global services exports has doubled from 1.9% in 2005 to 4.3% in 2023.

Outside of Asia, the developing world is becoming a development-free zone," said Indermit Gill, the World Bank Groups Chief Economist and Senior Vice President for Development Economics. “It has been advertising itself for more than a decade. Growth in developing economies has ratcheted down for three decades from 6 percent annually in the 2000s to 5 percent in the 2010s to less than 4 percent in the 2020s. That tracks the trajectory of growth in global trade, which has fallen from an average of 5 percent in the 2000s to about 4.5 percent in the 2010s to less than 3 percent in the 2020s. Investment growth has also slowed, but debt has climbed to record levels.” Growth is expected to slow in nearly 60 percent of all developing economies this year, averaging 3.8 percent in 2025 before edging up to an average of 3.9 percent over 2026 and 2027. That is more than a percentage point lower than the average of the 2010s. Low-income countries are expected to grow 5.3 percent this year a downgrade of 0.4 percentage point from the forecast at the start of 2025. Tariff increases and tight labor markets are also exerting upward pressure on global inflation, which, at a projected average of 2.9 percent in 2025, remains above pre-pandemic levels.

Finally, to accelerate economic growth, countries will need to improve business climates and promote productive employment by equipping workers with the necessary skills and creating the conditions for labor markets to efficiently match workers and firms. Global collaboration will be crucial in supporting the most vulnerable developing economies, including through multilateral interventions, concessional financing , and, for countries embroiled in active conflicts, emergency relief and support.

Industry Structure and Development

The HVAC (Heating, Ventilation, and Air Conditioning) and Refrigerants industry is experiencing significant growth, driven by factors like urbanization, rising disposable incomes, and the need for energy-efficient solutions. This growth is coupled with a shift towards sustainable refrigerants and smart technologies, impacting both the manufacturing and distribution aspects of the industry.

The Heating, Ventilation, and Air Conditioning (HVAC) sector in India is witnessing significant growth driven by various factors, such as rapid urbanization, increasing disposable income, and changing climatic conditions. Various government initiatives, like ‘Make in India Atmanirbhar Bharat, Production Linked Incentive (PLI) schemes, financial incentives, and the commitment to become carbon neutral by 2070 are some of the prime contributors to an energy-efficient HVAC market growth.

Projected to reach a market size of $30 billion by 2030, and growing at a CAGR of 15.8%, the Indian subcontinent has become a fertile ground for local and international HVAC manufacturers. In India, the demand for HVAC systems has been steadily rising, propelled by the expansion of infrastructure, urbanization, and rising awareness regarding indoor air quality and energy efficiency.

The opportunities in this sector make it attractive for local and international companies.

Market Expansion: The expanding middle-class population and increasing urbanization present vast opportunities for market expansion, especially in Tier II and Tier III cities. Technology Adoption: With advancements in HVAC technology such as variable refrigerant flow (VRF) systems, smart controls, and IoT integration, there is a significant opportunity to enhance energy efficiency, comfort, and operational efficiency. Green Building Initiatives: The growing focus on sustainability and green building certifications, such as Leadership in Energy and Environmental Design (LEED), and Green Rating for Integrated Habitat Assessment (GRIHA) create opportunities for the adoption of energy-efficient HVAC systems and solutions. Aftermarket Services: The demand for aftermarket services, such as maintenance, retrofitting, and upgrades is expected to rise, presenting opportunities for HVAC service providers and contractors. Despite the promising growth prospects, the HVAC sector in India faces challenges, including: High Initial Costs: The high initial costs associated with HVAC systems often deter price-sensitive consumers, particularly in the residential segment. Lack of Skilled Manpower: The shortage of skilled technicians and HVAC professionals in India can affect the installation, maintenance, and servicing of HVAC systems. Regulatory Compliance: Meeting energy efficiency standards and regulations imposed by the government, such as the Bureau of Energy Efficiency (BEE) guidelines, can be challenging for HVAC manufacturers. Consumer Awareness and Education: Many consumers may not be aware of the benefits of energy-efficient HVAC systems, which can slow the adoption of greener technologies.

The Indian HVAC Market

The Indian HVAC (Heating, Ventilation, and Air Conditioning) market is experiencing significant growth, with projections indicating a market value of USD 27.12 billion by 2030, growing from USD 11.93 billion in 2024. This growth is fuelled by rising temperatures, increased urbanization, and the expansion of commercial and residential sectors.

Market Size: The market is estimated to have reached USD 11.93 billion in 2024. Growth Rate: The market is projected to grow at a CAGR of 14.67% between 2024 and 2030.

Key Drivers: o Rising Temperatures and Climate Change: Increasing temperatures, especially during summer, are driving the demand for cooling solutions. o Urbanization: The expansion of cities and the construction of new buildings in urban areas are creating a greater need for HVAC systems. o Government Initiatives: Government support for energy-efficient technologies and infrastructure development are also contributing to market growth. o Increasing Disposable Income: Rising income levels are enabling more people to afford and adopt HVAC systems. o Growing Commercial and Residential Sectors: Expansion of commercial spaces (like offices, shopping malls, etc.) and residential buildings are boosting the demand for HVAC. o Future Outlook: The market is expected to continue its upward trajectory, driven by the factors mentioned above, with projections reaching USD 27.12 billion by 2030.

INVESTMENTS/DEVELOPMENTS Train HVAC Market Trends

This section covers the major market trends shaping the Train HVAC Market according to our research experts:

Increasing Demand for Rapid Transit

In order to meet the growing transportation needs across the world, several governments are expanding their rapid transit networks within the countries to make public transportation more feasible for the population. The governments of major countries are investing heavily in developing urban rail transit. The focus is on developing high-speed trains for passenger travel.

Modern services on rapid transit systems are provided on designated lines between stations, typically using electric multiple units on rail tracks. The stations typically have high platforms, requiring custom-made trains to minimize gaps between trains and platforms. They are typically integrated with other public transport modes and often operated by the same public transport authorities.

Some of the major countries with rapid transit systems are China, South Korea, Japan, Mexico, and the United States.

China has the most rapid transit systems in the world, with 31 systems covering over 4,500 kilometers of track. It was in charge of the majority of the worlds rapid transit expansion initiatives during the last decade. The Shanghai Metro is the worlds longest single-operator rapid transit system (in terms of route length).

In February 2022, the Indian government announced 400 new-generation Vande Bharat trains with better energy efficiency and passenger riding experience will be developed and manufactured during 2022-2025.

Similarly, in February 2022, South Korea announced goals to cut 30% of carbon emissions from railway travel by replacing all diesel passenger locomotives with a new bullet train by 2029. Also, South Korea plans to be carbon neutral by 2050.

Also, in July 2021, Amtrak announced a new agreement with infrastructure provider Siemens Mobility to build and execute a fresh new fleet of 83 trains that will travel across the northeastern United States in a significant modernization.

Asia-Pacific Will Exhibit the Highest Growth Rate

The Asia-Pacific region is dominating the train HVAC market, owing to countries with huge populations, such as China and India. China, with its expansion of railway infrastructure, and India, with its many urban transit and railway corridors, are pushing the demand for market growth.

Over the past decade, China experienced large-scale and rapid urban rail transit developments. Urban rail transit in China has been developing a networked structure, intellectualized equipment, diversified systems, and innovative technology in recent years. The trend is shifting toward the adoption of large-capacity subways in the central areas of super cities and megacities, with the adoption of a medium-capacity monorail, inner-city rapid rail transit, and magnetic suspension trains between central urban areas and remote towns.

In December 2021, Chinas National Development and Reform Commission (NRDC) approved the construction of a new 350 km/h high-speed line, a 160 km/h mainline, and three metro lines in Wuxi, with an overall investment totaling CNY 248.5billion (USD 38.55 billion). In January 2021, the Bombardier Sifang (Qingdao) Transportation (BST) joint venture secured a contract from China State Railway Group (CHINA RAILWAY) to deliver 16 new Chinese standard high-speed CR400AF cars. The value of the contract is approximately USD 46 million.

The Indian government is launching a number of projects to modernize its old railway infrastructure and improve service quality. The Railway Ministry said that it intends to invest INR 5,000,000 crore (USD 660 billion) in railway upgrades by 2023. Upgrades include complete electrification of railways, upgrading existing lines with more facilities and faster speeds, expanding new lines, upgrading railway stations, introducing and eventually developing a large high-speed train network connecting major cities across India, and developing various dedicated freight corridors to reduce cargo costs within the country.

Global players, such as Alstom, Bombardier, and Hyundai Rotem, have already set up manufacturing plants in India. CRCC also entered an MoU with the Government of Maharashtra for setting up a manufacturing facility in the Multimodal International Cargo Hub and Airport at Nagpur (MIHAN).

Segment wise or product wise performance:

Your company operates in business of Manufactures, assemblers, dealers, merchant, importers and agents for the purchase, sale and hiring of all kinds of air conditioners, air conditioning and Refrigeration, machinery, Refrigerants, Liquids and Gases, ice Cream Freezers, Quick Freezing cabinets and like deodorisers, Refrigerated trucks, Vans, Wagons Etc, Heaters, Heating appliances, Coolers, Diffusers, compressors, Condensers, Fans of all types, pumps, Motors, Thermostats, Sprayers, Cold Storages or ice cream plants, appliances, tools, machinery apparatuses, devises, instruments, chemicals and all types of machinery, equipments, appliances and instruments of all kinds, sizes, types and their parts accessories of all descriptions.

Risks and Concerns:

1. Environmental liabilities.

2. Infrastructure.

3. Stricter lending requirements and credit crunch.

4. Ever - changing nature of the industry.

5. The real estate investment market is still in its infant stage.

6. Regulatory risks.

7. Property market risks.

8. Pricing uncertainties/ Commodity price fluctuations

9. Economy and market fluctuations.

10. Global trade uncertainties 11. Power disruptions

Company Performance and Outlook

Krishna Ventures Limited deals in Manufactures, assemblers, dealers, merchant, importers and agents for the purchase, sale and hiring of all kinds of air conditioners, air conditioning and Refrigeration, machinery, Refrigerants, Liquids and Gases, ice Cream Freezers, Quick Freezing cabinets and like deodorisers, Refrigerated trucks, Vans, Wagons Etc, Heaters, Heating appliances, Coolers, Diffusers, compressors, Condensers, Fans of all types, pumps, Motors, Thermostats, Sprayers, Cold Storages or ice cream plants, appliances, tools, machinery apparatuses, devises, instruments, chemicals and all types of machinery, equipments, appliances and instruments of all kinds, sizes, types and their parts accessories of all descriptions. The Indian electronics manufacturing industry is projected to reach US$ 520 billion by 2025. The demand for electronic products is expected to rise to US$ 400 billion by 2025 from US$ 33 billion in FY20. Electronics market has witnessed a growth in demand with market size increasing from US$ 145 billion in FY16 to US$ 215 billion in FY19 the market witnessed a growth of 14% CAGR from 2016-19. Electronics system market is expected to witness 2.3x demand of its current size (FY19) to reach US$ 160 billion by FY25.

Internal Control Systems and their adequacy

The company has developed an Internal Control System and procedures to ensure efficient conduct of business and security of its assets. The auditors review the effectiveness and adequacy of the internal control system by reviewing, analysing and testing controls and make recommendations to the management to improve controls wherever necessary.

Particulars	March 31, 2025	March 31, 2024
Revenue from operations	172.59	219.35
Other Income	44.09	6.72

 

Total Revenue	216.68	226.07
Earnings before interest, taxes depreciation and amortization	-72.72	-30.88
Earnings before interest and taxes	-87.35	-47.11
Profit before Taxation	-87.35	-47.11
- Current Tax	0.00	0.00
- Deferred Tax	0.20	0.15
Net Profit/ (Loss) For the Year	-87.55	-46.96

Revenue from Operation: The Revenue dropped from Rs. 219.35 Lakhs in the financial year 2023-2024 to Rs. 172.59 lakhs in the financial year 2024-2025. The growth in revenue can be attributed to the change in market scenario, opening up of the economy and trade resumptions.

Operational Performance

EBITDA: The Company incurred loss of Rs. 72.72 Lakh in the financial year 2024-25 as compare to the previous financial year 2023-24 in which the loss was Rs. 30.88 Lakh.

PAT: Net Loss of the Company in the financial year 2024-25 is Rs. 87.55 Lakhs as compare to the previous financial year 2023-24 in which the Net loss was Rs. 46.96 Lakh.

Other Income: Other income for the financial year 2024-2025 increased by Rs. 44.09 lakhs as compared to Rs. 6.72 lakh in the previous year due to exchange fluctuations gains & other non-operating income.

Debt and Finance cost: Financial cost against debt is approached to Rs. 15.85 lakh as compare to Rs. 0.30 Lakh previous year.

Particulars	Units	2025	2024
Profitability Ratios
EBITDA Margin	%	-32.95%	-13.94%
EBIT Margin	%	-41.43%	-21.34%
Net Profit Margin	%	-50.62%	-21.54%
Growth Ratios
		Rs. 1,058.93 (in	Rs. 1,161.65 (in
Net worth	%
		lacs)	lacs)

 

Return Ratios
Return on Equity	%	-7.94%	-4.10%
Return on Capital Employed	%	-6.75%	-4.09%
Return on Assets	%	-3.45%	-2.96%
Leverage Ratios
Debt to Equity	Times	1.38 Times	0
Debt to EBITDA	Times	-25.07 Times	0
Interest Coverage	Times	-4.51 Times	0
Debt to Assets	Times	0.57 Times	0
Efficiency Ratios
Asset Turnover	Times	0.07 Times	0.14 Times
Receivable Turnover	Times	3.15 Times	0.83 Times
Receivable Days	Days	115.98 Days	52.08 Times

Growth Ratios: The Net worth has decreased to Rs. 1,058.93 (in lacs) for the financial year 2024-25 from -4Rs. 1,145.65 (in lacs) for the financial year 2023-24.

(Rs. In Lakhs)

Particulars	2025	2024
Net Cash Generated from Operating Activities(A)	132.03	12.16
Net Cash used in Investing Activities (B)	-116.13	-221.31
Net Cash Generated from Financing Activities (C)	-15.85	-7.66
Net increase/decrease in cash (D=A+B+C)	0.04	-216.81
Cash and Cash Equivalents at the beginning (E)	31.30	248.11
Cash and Cash Equivalents at the end (F=D+E)	31.34	31.30

Liquidity: Cash balances increased to Rs. 31.34 Lakhs in the financial year 2024-25 as compared to Rs. 31.30 Lakhs in the previous year.

Material developments in Management

There has been no material developments in management of the company.

Material developments in Human Resources / Industrial Relations front, including number of people employed

Your company is currently engaged in the development of a performance system that incorporates system-of-care principles and scope for continuous professional development.

CAUTIONARY STATEMENT

The Board of Directors have reviewed the Management Discussion and Analysis prepared by the Management. Statement in this report of the Companys objective, projections, estimates, exceptions, and predictions are forward looking statements subject to the applicable laws and regulations. The statements may be subjected to certain risks and uncertainties. Companys operations are affected by many external and internal factors which are beyond the control of the management. Thus the actual situation may differ from those expressed or implied. The Company assumes no responsibility in respect of forward looking statements that may be amended or modified in future on the basis of subsequent developments, information or events.

ACKNOWLEDGEMENT

Your directors take this opportunity to place on record their appreciation to all employees for their hard work, spirited efforts, dedication and loyalty to the Company.