Master Components Ltd Management Discussions

Annexure-III:

A. INDUSTRY STRUCTURE AND DEVELOPMENTS:

The plastic manufacturing industry, particularly focused on engineering components, assemblies, and sub-assemblies, plays a critical role across a broad spectrum of end-use sectors. These include electrical, healthcare & childcare, industrial, automotive and increasingly, infrastructure applications such as precast systems.

The industry structure is influenced by several key elements:

Industry Structure for the segments look like:

1. Regulations and Sustainability:

Environmental considerations and evolving regulatory frameworks continue to shape the industrys operational priorities. Manufacturers are responding through initiatives that emphasize material efficiency, waste reduction, circular economy practices, and reduced environmental impact throughout the product lifecycle.

2. End-User Industries:

Plastic engineering components and sub-assemblies serve essential functions in various industries.

• In the electrical sector, they are widely used in enclosures, switchgear, and insulation components.

• In the automotive and industrial sectors, they support interior, exterior, mechanical, and equipment functions due to their strength-to-weight ratio, thermal resistance, and design flexibility.

• The healthcare and childcare segments are gaining momentum as a growth area, driven by rising demand for durable, high-precision plastic components.

• The precast infrastructure segment presents emerging application opportunities for specialized plastic components in construction-related processes.

3. Raw Materials Providers:

Key raw materials include a range of thermoplastic and thermoset polymers. The supply chain is composed of both large-scale polymer producers and niche suppliers specializing in custom formulations. The availability, pricing, and performance characteristics of these materials significantly influence production planning and product development.

4. Technology and Innovation:

Advancements in materials science, injection moulding, thermoset and compression moulding, as well as automation, have expanded design capabilities and improved production efficiency. These developments are enabling manufacturers to deliver complex geometries, tighter tolerances, and high-volume outputs while maintaining cost-effectiveness and quality standards

Recent Developments in the industry:

1. Technological Advancements:

The plastic engineering components industry has witnessed significant technological progress in recent years. Innovations in materials science, such as the use of advanced thermoplastics and thermoset composites, have enhanced performance, durability, and recyclability.

Additionally, advancements in moulding techniques, particularly injection moulding, thermoset moulding, and compression moulding, have enabled greater precision, reduced cycle times, and improved manufacturing efficiency. Automation and Industry 4.0 integration are also streamlining production, improving quality control, and optimizing resource utilization.

2. Quality Standards and Certification:

Compliance with global quality and safety standards remains a critical factor for industry players, especially those serving sectors like electrical, automotive, and industrial manufacturing. Certifications such as ISO 9001, IATF16949, and adherence to robust Environmental, Health, and Safety (EHS) frameworks are increasingly seen as prerequisites for gaining customer trust, accessing global markets, and ensuring regulatory compliance.

B. OPPORTUNITIES AND THREATS:

The plastic components industry is experiencing consistent growth, fueled by evolving end-user demands and innovations in materials and manufacturing. Master Components Limited (MCL) is well-positioned to harness several emerging opportunities:

1. Growing Demand Across Industries:

There is increasing demand for plastic components, assemblies, and sub-assemblies across sectors such as electrical, automotive, electronics, industrial, healthcare, and consumer goods. The advantages of plastics: lightweight design, cost-effectiveness, and design adaptability, continue to make them the preferred material.

In line with this trend, MCL has begun exploring new applications and customer segments across diverse industries, expanding its market footprint and strengthening its ability to serve cross- sectoral needs.

2. Global Market Expansion:

The globalization of supply chains and rising demand for high-precision plastic parts in international markets present significant growth avenues.

MCL currently serves as a supplier to several global companies and OEMs, underscoring its capability to meet stringent international quality and compliance requirements. Ongoing investments in automation, digitization, and lean processes further support its readiness for scale and integration into global supply ecosystems.

3. Customization and Personalization:

As customer preferences evolve, the ability to deliver customized, application-specific solutions is gaining strategic importance.

MCLs design and manufacturing flexibility is reflected in its collaboration with sister concern Master Nidavellir Aeromed Pvt. Ltd. to scale the Cradlewise Smart Crib, a next-generation baby monitor and sleep solution. By contributing to its production, MCL has demonstrated the capacity to support niche, high-innovation projects.

4. Technological Advancements & Sustainability Initiatives:

Continuous technological upgrades are pivotal in driving quality, efficiency, and sustainability. In FY 2024-25, MCL commissioned Japanese Shibaura injection moulding machines, along with 7 robotic arms, significantly enhancing process safety, product accuracy, and production efficiency, especially for high-volume lines. These robotic systems assist with safe retrieval, gate cutting, and precise placement of components, streamlining one of the Companys most critical manufacturing processes.

To drive long-term operational excellence, MCL established a dedicated Lean Management & Digitalization Department under the leadership of Mr. Akshay Kulkarni, focusing on structured efficiency improvements and gradual implementation of digital systems across functions. Key initiatives include:

• Initiation of ERP implementation for improved process integration and data visibility

• First-phase implementation of the 5S methodology to enhance workplace organization and discipline

• Extensive rollout of the Kanban system to improve inventory control and production flow

Simultaneously, the Company has made deliberate strides in strengthening its internal culture, communications, and stakeholder alignment through the establishment of a dedicated Corporate Affairs & Employee Engagement Department, headed by Ms. Tanvi Joshi. This department has taken a pivotal role in shaping the Companys brand positioning, internal engagement, and external visibility. Key initiatives include:

• A complete revamp of the corporate website to align branding with business strategy and enhance digital communication

• Integration of branding and social media marketing to build awareness and reinforce the Companys industry presence

• Organization of POSH (Prevention of Sexual Harassment) workshops, cultural events, and employee engagement programs in collaboration with HR to foster a respectful and cohesive workplace

While the plastic components industry continues to present expansive growth avenues, it is equally shaped by evolving external challenges. These threats require manufacturers to remain agile, compliant, and innovative in order to sustain long-term competitiveness and customer trust.

Regulatory and Environmental Pressures:

The plastics industry continues to face growing regulatory scrutiny and environmental expectations. Stricter frameworks, such as bans on specific plastic types, extended producer responsibility (EPR) policies, and mandatory recycling quotas are increasing compliance complexity. Moreover, heightened consumer awareness of plastic pollution is accelerating the push toward sustainable materials and circular economy practices. Companies must proactively invest in greener technologies, raw material alternatives, and transparent reporting systems to remain viable and future-ready.

Competitive Pressure:

The sector is intensely competitive, marked by the presence of large multinational corporations, regional manufacturers, and agile niche players. Continuous innovation in design, technology, and material science has raised the bar for quality and customization. Price wars, shorter product life cycles, and global sourcing dynamics further compress margins. Additionally, strategic alliances, consolidations, and supply chain optimizations by competitors can pose risks to market share and customer retention.

C. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

Master Components Limited operates in a single reportable business segment: the manufacturing of plastic engineering components, assemblies, and sub-assemblies. Within this focused domain, the Company caters to a wide spectrum of industries, including electrical, automotive, industrial, healthcare, and childcare. The product portfolio encompasses both thermoset and thermoplastic moulded components, along with precision-engineered assemblies and sub-assemblies tailored to client-specific requirements.

In FY 2024-25, the Company sustained stable performance across its key product categories. Notable highlights include:

• Electrical Components (Thermoset and Thermoplastic): Continued to form a substantial portion of the product mix, driven by sustained demand from long-standing OEM clients.

• Automotive & Industrial Components: Demonstrated steady traction, with emphasis on delivering precision and consistency for safety-critical applications.

• Sub-assemblies: Gained momentum with global clients seeking scalable, cost-efficient production solutions, particularly for high-volume projects.

• Healthcare & Childcare Products: Collaborated on innovative products such as the Cradlewise Smart Crib, reinforcing the Companys technical and operational capability to support emerging, high-potential categories.

D. OUTLOOK

As global trends increasingly prioritise lightweight materials, cost-effectiveness, and design flexibility, the Company is well-positioned to capitalise on these opportunities while maintaining a responsible, sustainability-driven growth trajectory.

Master Components Ltd. remains optimistic about its future prospects and is strategically aligned to navigate the evolving business landscape. While challenges such as regulatory changes, raw material volatility, and heightened competition persist, the Company is confident in its ability to address these through operational discipline, continuous innovation, and a proactive approach to compliance and risk management.

Looking ahead, the Companys focus will remain on:

• Exploring newer domestic and international markets to broaden its customer base and industry reach;

• Strengthening ESG readiness, with ongoing initiatives aimed at embedding sustainability across operations;

• Enhancing internal systems and processes through the rollout of Lean Management practices, ERP integration, and digital initiatives for improved efficiency and scalability;

• Investing in people, machinery, and technology to expand production capacity and elevate product quality;

• Reinforcing its culture and employee experience through collaborative initiatives led by the Corporate Affairs & Employee Engagement and HR departments.

With a clear roadmap for sustainable and inclusive growth, Master Components Ltd. is committed to building long-term value for all stakeholders.

E. RISK AND CONCERNS

Like all businesses, Master Components Ltd. operates in an environment where both internal and external factors may pose potential risks to business continuity, growth, and profitability. The Company continuously monitors these challenges and adopts proactive measures to mitigate their impact, with oversight from the Board and senior management.

Key risks and concerns include:

1. Raw Material Volatility

The Companys operations are heavily dependent on the timely availability and cost stability of raw materials. Disruptions in the supply chain or sudden price fluctuations can adversely impact production schedules, cost structures, and margins.

Mitigation: MCL has built long-standing commercial relationships with reliable suppliers and continuously explores alternative sourcing strategies to ensure consistency and flexibility. In many cases, customers also provide compensation for raw material price increases, partially insulating the Company from margin pressures.2. Maintaining Quality Standards

As the Company expands its footprint across global markets and diversifies its customer base, maintaining consistent quality remains a critical priority.

Mitigation: Stringent quality control systems are embedded across production stages, and all customized projects undergo validation and sample approvals to meet client expectations.

3. Regulatory and Environmental Compliance

Given the increasing scrutiny around plastic use, environmental impact, and regulatory restrictions, non-compliance can expose the Company to penalties and reputational risks. Mitigation: MCL conducts regular cross-functional reviews to stay aligned with evolving environmental and safety norms. Sustainability has also become a core consideration in material choices and process design.

4. Competitive Pressure

The plastic components industry is highly competitive, with constant pressure on pricing, innovation, and client retention.

Mitigation: The Company continues to strengthen its competitive edge through lean manufacturing, client-specific customisation, consistent on-time delivery, and a focus on longterm quality partnerships.

5. Availability of Skilled Manpower

The manufacturing sector is witnessing increasing challenges in sourcing skilled and semi-skilled labour, especially in specialized processes.

Mitigation: MCL is working on strengthening internal training, cross-skilling initiatives, and maintaining a positive workplace culture to attract and retain talent.

6. Rising Energy Costs

Power tariff increases directly affect operational expenses, particularly for energy-intensive processes.

Mitigation: To manage cost impacts and advance its sustainability goals, the Company has installed a 215 kW solar power system at its facility and is actively exploring additional capacity through alternative energy solutions and efficiency measures.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems covering all its business operations. Through our compliance function, we monitor adherence to regulatory requirements laid down by the Securities and Exchange Board of India (SEBI). The adequacy and effectiveness of these systems and policies are comprehensively and frequently reviewed by the Companys management at all levels.

The Audit Committee of the Board of Directors periodically assesses audit procedures and internal controls to ensure alignment with organizational requirements, growth prospects, and an evolving business environment. It also reviews internal audit findings and ensures timely implementation of corrective measures. The Committee is responsible for overseeing the risk management framework, while departmental heads ensure effective implementation within their areas.

Some of the significant features of our internal control systems include:

• Financial and commercial functions structured to provide adequate support and control across operations.

• Adoption of a Risk Management Policy.

• An established Internal Audit system conducted independently.

• Regular review of standard operating procedures and internal guidelines.

• Active rollout of Lean Management practices to streamline operations and improve efficiency.

• Support from the Corporate Affairs & Employee Engagement department in internal communication and policy reinforcement.

• Our teams stay abreast of evolving regulatory requirements, which are communicated to relevant functions along with recommended action plans to ensure effective compliance.

G. OVERVIEW AND ANALYSIS OF FINANCIAL CONDITIONS

The Management believes that it has been apt in making estimates and judgments relating to the Financial Statements and confirms that these Financial Statements are a true and fair representation of the Companys Operations for the period under review.

Following are the comparative table of financial performance of the company:

The Company recorded a substantial increase in operational revenue and net profit in FY 2024 - 25, showcasing robust growth momentum.

i Yearly Financial Performance

(Rs. in Lakhs)

Metric	FY 2023-24	FY 2024-25	YoY Growth
Revenue from Operations	2,529.04	4,281.07	69% t
Total Expenses	2,202.63	3,732.40	69% t
Profit After Tax (PAT)	267.56	649.30 (with Extra ordinary items)	143%T

H2 outperformed HI across all metrics, reflecting operational efficiency, higher order execution, and seasonally stronger business.

Half-Yearly Financial Performance

(Rs. in Lakhs)

Metric	HI FY 2024-25	H2 FY 2024-25	Growth (H2 over HI)
Revenue from Operations	1,808.85	2,472.22	37% T
Total Expenses	1,584.94	2,147.46	35% t
Profit After Tax (PAT)	167.40	481.90 (with extraordinary items)	188% t

During FY 2024-25, Master Components Ltd. delivered a resilient financial performance, with a 69% increase in revenue and a 143% surge in profit after tax, which stood at ?649.30 lakhs (inclusive of extraordinary items in H2). The Company benefitted from better plant utilization, streamlined operations, and steady demand from sectors like electrical and automotive.

The second half of the year, in particular, reflected strong momentum, showcasing a 37% rise in revenue and a 188% increase in PAT over HI. This performance was backed by optimized production cycles, new market traction, and sharper execution discipline.

Note: PAT for H2 (?481.90 lakhs) includes extraordinary items.

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

We at Master Components Limited consider Human Resource as a very crucial part of progress. We understand that without their efforts and contribution the fruit of our success would not be such sweet. This strong force is the reason that the business has sailed successfully through all the high and low waves of the industrial changes throughout the period.

In recent time company has incorporated more skilled minds in the power packed team to neutralize the work load and achieve more. We have been training the beginners according to their positions in the pyramid and have been offering them many opportunities to take initiatives. Attracting new talent with the drive, training and upgrading existing skill sets and getting all to move in a unified direction will definitely be a task in the company. By creating a conducive environment for career growth, Company is trying to achieve the maximum utilization of employees skills in the most possible way. The company also believes in recognizing and rewarding employees to boost their morale and enable to achieve their maximum potential.

Further on the front of Industrial Relations, Master Components Limited is one of the renowned organization for maintaining the customer relationships for a long stretch of time. We are focused on keeping the good terms with values suppliers of the company along with the contractors.

Company has also been on constant lookout for suppliers who can deliver the material in our timelines and matching with our quality standards. Higher management is also constantly exploring new opportunities for furtherance of the business.

I. KEY FINANCIAL RATIOS

Sr. No	Particulars of Ratio	31.03.2025 (In %)	31.03.2024 (In %)	Explanation for change in Ratios
I	Inventory Turnover	9.77	10.21	Combined effect of increase in turnover and inventory.
II	Interest Coverage Ratio	50.88	64.91	Increasing profits is improving the financial health of the Company has led to improved interest coverage ratio.
III	Current Ratio	1.52	5.31	Combined effect of increase in current asset and decrease in current liabilities.
IV	Debt Equity Ratio	0.14	0.01	Combined effect of reduction in debt in and increase in equity.
V	Operating Profit Margin (%)	15.31	14	Combined effect of Increase in sales and Decrease in operating expenses
VI	Net Profit Margin (%)	15.31	10.58	Due to increase in Profit during the year

J. DETAILS PERTAINING TO NETWORTH OF THE COMPANY

Particulars	As on 31/03/2025 Amt. in Lakhs	As on 31/03/2024 Amt. in Lakhs	Explanation for change in Net- worth
Amount of Net worth	2949.08	2299.79	Due to increase in profits

SAFE HARBOUR

This report describing our activities, projections and expectations for the future, may contain certain forward looking statements within the meaning of applicable laws and regulations. The actual results of business may differ materially from those expressed or implied due to various risk factors and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company assumes no responsibility to publicly amend, modify or revise forward-looking statements, on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include

determination of tariff and such other charges and levies by the regulatory authority, changes in government regulations, tax laws, economic developments within the country and such other factors globally.

The financial statement are prepared under historical cost convention, on accrual basis of accounting, and in accordance with the provisions of the Companies Act, 2013 (the "Act") and comply with the Accounting Standards notified under Section 133 of the Act. The management of Master Components Limited has used estimates and judgements relating to the financial statement on a prudent and reasonable basis, in order that the financial statement reflects in a true and fair manner, the profit for the year.

For and on behalf of Board of Directors of,
MASTER COMPONENTS LIMITED
Formerly known as Master Components Private Limited
Sd/-	Sd/-
Mr. Mudduraj Chandrashekhar Kulkarni	Mr. Shrikant Hanamant Joshi
(Managing Director, DIN: 01190978)	(Whole Time Director & CFO, DIN: 01190986)
Address: Flat No.03, Suraj Enclave,	Address: 04, Indraprastha, B Wing,
Near Abb Circle, Mahatma Nagar	Behind Housefull, Mahatma Nagar
Nashik 422007 Maharashtra India.	Nashik 422007, Maharashtra, India.
Date: 10/07/2025.
Place: Nashik