Maxvolt Energy Industries Ltd Management Discussions

Economic Overview

The global economy is at a critical juncture. While signs of stabilisation emerging during the year, major policy shifts and tariff wars and geopolitical tensions reset the global trade system to test its resilience. The International Monetary Fund (IMF) estimated the world to have grown by 3.3% in 2024, maintaining the same pace as in 2023. Resilience, services trade, and critical minerals are some of the factors that contributed to this growth. Advanced economies witnessed a slight uptick, with growth expected to increase from 1.6% in 2023 to 1.8% in 2024, while the emerging and developing economies grew by 4.3% in 2024.

Looking ahead, intensifying downside risks dominate future outlook, amid escalating trade tensions. Shifting policies could lead to abrupt tightening of global financial conditions and capital outflows, particularly impacting emerging markets. Production and shipping disruptions in emerging markets and developing economies due to factors like conflicts, civil unrest, and weather-related events slowed growth prospects in regions such as the Middle East, Central Asia, and Sub-Saharan Africa. Stronger growth in emerging Asia will be fuelled by increasing demand for semiconductors and electronics, largely driven by investments in artificial intelligence. Lower inflation and monetary easing in several economies may provide a modest boost to global economic activity, with world GDP projected to grow by 2.8% in 2025 and 3.0% in 2026. Advanced economies are forecast to maintain steady growth of 1.4% in 2025, with a slight uptick to 1.5% in 2026, while the emerging and developing economies are seen growing by 3.7% in 2025 and 3.9% in 2026, marking a slight slowdown from 2023. To foster a positive external environment, strengthen macroeconomic stability, address structural barriers, tackle the impacts of climate change, and accelerate growth and development, coordinated policy action at both global and national levels will be crucial.

Indias economy grew by 6.5% in FY 2024-25, compared with 9.2% growth in its GDP in FY 2023- 24. Despite potential challenges from global uncertainties, India continued to experience consistent growth, with key domestic growth drivers being increased government spending, a recovering job market, robust service sector growth, a healthy agricultural sector, rising capital expenditure in infrastructure development, public infrastructure investments, and an uptick in household spending on real estate. The manufacturing sector and resilient services have seen growth and helped offset losses in the agriculture sector. These trends contributed to an improvement in urban unemployment rates in the year under review.

According to the World Banks India Development Update: Indias Trade Opportunities in a

Changing Global Context, Indias economy has been one of the fastest growing in the world, driven by stable consumption demand and steadily improving investment demand. The nation is set to dominate the global economic landscape, maintaining its status as the fastest-growing large economy for the next two fiscal years.

Looking ahead, India is expected to maintain positive momentum, with a forecasted growth rate of 6.7% in FY 2025-26. The countrys debt-to-GDP ratio is expected to decline from 83.9% in FY 2023- 24 to 82% by FY 2026-27. Amid challenging external conditions, Indias medium-term outlook remains positive as it continues to benefit from continued economic expansion particularly in services like agriculture, services and construction, increased employment opportunities and improved standard of living. At a time when global growth is expected to remain 2.7% in 2025-26, Indias remarkable performance underscores its resilience and growing significance in shaping the worlds economic trajectory.

The global lithium-ion battery market is expanding quickly as the world shifts to clean energy and electric mobility. In 2023, the market was worth about 54 billion dollars and is expected to cross 60 billion dollars in 2024. By 2025, it could reach around 76 billion dollars. Over the next decade, the market is projected to grow strongly, reaching between 200 and 400 billion dollars by 2030 and more than 440 billion dollars by the mid-2030s. Most of this growth will come from electric vehicles, while renewable energy storage, consumer electronics, and industrial uses will also contribute. Global battery capacity demand is set to rise from about 700 gigawatt-hours in 2022 to nearly 4,700 gigawatt-hours by 2030.

China is the clear leader, dominating production and control of raw materials. South Korea and Japan are strong players, known for advanced technologies and partnerships with automakers. The United States and Europe are investing heavily to build local industries and reduce reliance on imports. Together, these regions are shaping the future of the industry through investment, innovation, and supportive government policies

The Indian lithium-ion battery market is expected to grow significantly due to increasing demand for electric vehicles (EVs), renewable energy storage, and a sharp surge in the consumer electronics market. Influenced by these developments, major EV industry players are investing in battery manufacturing and recycling to strengthen Indias energy material reserves. The transition to electric vehicles powered by lithium-ion batteries is underway, and the India Energy Storage Alliance (IESA) is forecasting the market to reach $80 billion by 2030. Government initiatives like the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) programme and the Production-Linked Incentive (PLI) Scheme for Advanced Chemistry Cell battery storage are playing a crucial role in this futuristic change.

The government has introduced several initiatives to support the industrys growth. The Make in India Initiative is a cornerstone of the Indian governments efforts to promote domestic manufacturing, including the battery industry. This campaign aims to reduce reliance on imports by encouraging Indian manufacturers to produce high-quality batteries locally, thereby fostering self-reliance. A significant focus is placed on innovation, with an emphasis on research and development to create cost-effective and sustainable battery solutions that cater to both domestic and global markets.

Complementing this is the Production Linked Incentive (PLI) Scheme, a transformative policy for the cell manufacturing sector. Its primary objective is to establish a robust manufacturing base for advanced batteries, prioritizing technological advancements and enhancing market competitiveness. With a substantial budget allocation of 18,100 crore, the scheme offers financial incentives tied to production milestones, enabling manufacturers to achieve economies of scale and boosting overall industry growth.

The Battery Swapping Policy adds another layer of innovation by addressing cost and convenience challenges for EV users. This policy emphasizes the standardization and interoperability of battery swapping systems, creating a seamless experience for consumers while opening up new opportunities for manufacturers. By encouraging the production of swappable and efficient battery systems, it reduces the financial burden of battery ownership and promotes wider EV adoption.

Lastly, the governments Focus on EV Ecosystem is underscored by the FAME India Scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles). This initiative has played a pivotal role in accelerating the adoption of EVs in India by offering incentives that create consistent demand for high-quality batteries. Together, these initiatives highlight the governments comprehensive strategy to support and advance the Indian battery manufacturing industry, driving innovation, sustainability, and economic growth.

The growth and popularity of electric vehicles (EV) is putting a spotlight on Lithium-ion batteries. According to Bloomberg 2019 Electric Vehicle Outlook, EVs, including commercial and passenger, will dominate the demand of the Lithium-ion battery market in the next ten years. Lithium-ion batteries provide lightweight, efficient power for EVs and consumer electronics. Compared to nickel-metal hydride (NiMH) batteries, lithium-ion batteries have a 50 percent greater capacity in watt-hours per kilogram (w-h/kg).

A challenge with this growing market is the limited access to mineral resources key for manufacturing lithium-ion batteries. The key minerals making up the cathode material, including Lithium (Li), Manganese (Mn), Nickel (Ni), and Cobalt (Co), is in short supply. The situation is exacerbated due to the environmental impact in mining and refining these minerals, and the need to dispose the battery waste stockpile. Thus, developing recycling capabilities of used lithium-ion batteries becomes more critical.

The market has responded to these needs, and many are capturing the opportunities. More and more recycling companies are popping up around North America. Late last year, a Canadian firm began constructing a US $175 million plant in Rochester, N.Y. When completed, it will be the largest lithium-ion battery-recycling plant in North America. The plant will have an eventual capacity of 25 metric kilotons of input material, recovering 95 percent or more of the cobalt, nickel, lithium, and other valuable elements.

Enhancing the customer experience: Maxvolt Energy works closely with customers and dealers to understand their needs. By focusing on innovation, the company ensures its batteries and energy solutions remain the preferred choice in a competitive market.

Product strategy: The company is strengthening its product portfolio by focusing on high-demand models and reliable designs. This approach helps improve inventory management, profitability, and working capital efficiency.

Market presence: Maxvolt Energy is expanding its retail reach across Tier I, II, and III cities, increasing penetration in local markets while also targeting bigger corporate clients for long-term partnerships.

Digital transformation: The company is adopting digital tools across operations to improve efficiency. Employees are being trained to adapt to these changes so that Maxvolt Energy stays prepared for future growth. Sustainability focus: Maxvolt Energy is actively developing second-life applications for batteries and exploring reuse opportunities for new products. The company is also progressing toward obtaining approvals for battery recycling to build a complete circular ecosystem.

Expansion: Maxvolt Energy is increasing its retail presence to reach more customers while also building stronger partnerships with large corporate clients.

Distribution strength: The company is enhancing its dealer and distributor network across India and working with partners to strengthen supply chain and manufacturing capabilities. It is also adding new segments such as ESS batteries and inverters for energy storage solutions up to 1 MWh, and in EV segment creating a market for L4 and L5 auto rickshaws and loaders.

Brand building: Maxvolt Energy is investing in its brand to build stronger awareness and trust among customers, with the goal of expanding its presence both in India and globally.

Innovation: The company is committed to continuous improvement, focusing on advanced technologies, higher product quality, and new solutions that match changing market needs. Sustainability leadership: Maxvolt Energy is strongly focused on second-life battery applications and recycling initiatives, aiming to build a complete and sustainable energy ecosystem for the future.

(Amt. in lakhs)

Maxvolt understands the invaluable contribution of its Human Resources, acknowledging that its employees are the primary drivers of the organisations growth. The Company adopts a people- centric approach, investing significantly in employee training and wellness initiatives. It remains committed to strengthening its workforce, paralleling the robustness of its financial performance. It prioritises employee engagement and skill enhancement by regularly conducting in-house training and development programmes designed to boost competencies and the overall productivity.

The Companys HR policy fosters a culture of inclusion and diversity, promotes trust and transparency, and inculcates a sense of teamwork among the employees to build a future ready organisation. It also promotes equal opportunity and competitiveness to unleash the full potential of its employees and to enhance its long-term value. The Company is committed to maintaining a workplace free from harassment by ensuring that all its employees are treated with dignity and respect. In the fiscal year 2024-25, no cases were filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013. Industrial relations with employees remained cordial and cooperative. As of March 31, 2025, the Companys total employee strength stood at 120.

As part of its digital and IT transformation journey, the Company maintains its robust infrastructure to stay competitive, mitigate disruptions, and ensure compliance with internal mandates aimed at boosting enterprise efficiency. It leverages advanced IT systems, cutting-edge technology, and digital transformation initiatives to streamline business operations. Its integrated software system supports key functions such as Purchasing, Production, Inventory Management, Sales, and Accounting and caters to all Strategic Business Units (SBUs).

With a forward-thinking IT budget and roadmap, the Company focusses on cloud software, data aggregation, and emerging technologies like AI, Machine Learning, IoT, Blockchain, and Autonomous Databases. It also invests in cloud-based ERP, EPM, Procurement, and Treasury applications.

The Company continues to make significant investments in software solutions and systems, including Business Intelligence and Point of Sales to further strengthen its infrastructure capabilities. Further, it introduces mechanisms to implement necessary checks and controls to disseminate valuable insights and ensure accuracy of captured data.

The Maxvolt well understands its responsibility as a corporate citizen to positively impact the society and the environment in which it operates. Through responsible investment and sustainable business practices, it is not only committed to conducting business in an ethical and sustainable manner but also contributes towards the development of communities around through impactful initiatives and create a more sustainable future for all. The key areas it has identified for CSR projects are education, healthcare, disease prevention and treatment, safety, and the environment.

The Company employs a robust method for managing its internal control systems, tailored to the size and scope of its operations. This approach helps the Company protect its assets, identify and mitigate business risks, and ensures the preparation of accurate financial records while evaluating the reliability of financial controls and compliance with relevant laws and regulations.

The statutory and internal auditors of the Company conduct comprehensive audits across all departments, focussing on areas such as financial reporting, taxation, corporate finance, business recovery, and insolvency. The Audit Committee regularly reviews and assesses financial systems, management procedures, and internal controls to ensure smooth operations, minimize risks, and safeguard against fraud and misrepresentation. Both internal and statutory audits are carried out to ensure adherence to regulatory standards, and the management takes corrective actions as needed.

The Management Discussion and Analysis may include statements about the Companys goals, projections, estimates, and expectations, which qualify as "forward-looking statements" under applicable laws and regulations. Actual outcomes may differ significantly from these statements due to various risks and uncertainties, such as availability of material and costs, market demand fluctuations, competitive dynamics, regulatory and tax changes, economic conditions in India and global markets, exchange rate variations, and other external factors influencing the Companys business and financial performance. The Company disclaims any obligation to update, revise, or modify these forward-looking statements in light of future developments, new information, or unforeseen events.