Megatherm Induction Ltd Management Discussions

Global economy overview

The year 2026 has commenced amid a climate of heightened global uncertainty, shaped by a convergence of geopolitical, financial, and macroeconomic challenges. Recent developments across regions such as Latin America, Iran, and Greenland have underscored the persistence of geopolitical tensions, while financial markets continue to navigate pressures arising from elevated debt levels and stretched asset valuations in a prolonged high-interest rate environment.

At the macroeconomic level, policy uncertainties in major economies, particularly the United States, alongside the potential for renewed trade disputes, have added further complexity to the global economic landscape. Intensifying international competition and weakening multilateral cooperation have also contributed to an increasingly fragile global outlook.

In addition, several regions are witnessing rising social and political tensions, driven by deep-seated economic and societal concerns among segments of the population, particularly in parts of Europe. These challenges are compounded by ongoing global health concerns and the accelerating risks associated with climate change, reinforcing the need for resilience and strategic adaptability across economies and industries.

The global economic environment continues to reflect uneven growth patterns across major regions. In the United States, economic activity is expected to expand by approximately 2.2%, supported by resilient consumer spending, despite a notable increase in corporate bankruptcies during the second half of 2025. In the eurozone, growth is projected to remain modest at around 1%, driven largely by Germany s economic rebound supported by a significant investment stimulus. France, however, continues to face fiscal pressures, with its public deficit remaining above 5% of GDP, resulting in a comparatively moderate growth outlook of about 0.9%.

Central Europe has demonstrated relatively stronger economic momentum, with Poland leading the region with an estimated growth rate of 3.8%. In Asia, China s economic expansion is expected to moderate to approximately 4.4%, which may exert some pressure on regional growth dynamics. Southeast Asia continues to exhibit mixed economic performance across markets. In contrast, India has reaffirmed its position as one of the fastest-growing major economies globally, supported by strong domestic demand, structural reforms, and proactive public policy measures, with growth projected at around 6.1%.

Global commodities market overview

Global commodity markets entered 2026 exhibiting significant divergence in price performance across sectors. Unlike previous years, when broad macroeconomic factors largely influenced commodity prices, market movements are increasingly being shaped by sector-specific fundamentals. Current market outlook suggests a clear divergence in trends, with metals expected to demonstrate relatively stronger performance, while energy and agricultural commodities are likely to experience softer price trends on average.

This divergence reflects structural differences in dynamics and demand drivers across commodity segments. Metal markets are being supported by sustained investments in energy transition technologies, rapid advancements in artificial intelligence infrastructure, and relatively constrained supply growth.

In contrast, energy and agricultural commodities remain more sensitive to near-term supply-demand balances and cyclical consumption patterns.

Furthermore, as global economic growth moderates and energy intensity gradually declines, these sectoral differences are commodity price movements are increasingly being driven by sector-specific factors rather than by a uniform macroeconomic cycle, resulting in a more differentiated and complex commodity market environment.

Commodity Price Movement (from January 2025 to January 2026)

The global metals market in 2026 is expected to deliver a mixed yet resilient performance. Precious metals, led by gold, are likely to remain strong amid geopolitical uncertainty and continued central bank buying, while battery metals may see a gradual recovery supported by

EV demand, albeit constrained by existing oversupply.

Base metals such as copper, aluminium, and tin are expected to stay firm, driven by infrastructure, digitalisation, and energy transition investments, alongside tightening supply conditions. In contrast, ferrous metals may face softer demand, particularly to weakness in China s property sector, though policy support could stabilise steel prices.

Copper is set to benefit significantly from electrification, renewable energy, and AI-led infrastructure demand, with supply deficits potentially pushing prices higher.

IN RECENT YEARS, INDIA HAS SUSTAINED STABLE GROWTH LEVELS, WITH REAL GDP GROWTH OF 7.2% IN FY2023 24 AND 7.1% IN FY2024 25. DURING THE SAME PERIOD, NOMINAL GDP GROWTH STOOD AT 11.0% AND 9.7%, RESPECTIVELY.

Aluminium prices have also strengthened, supported by supply disruptions, low inventories, and robust demand across construction, transport, and energy sectors, indicating a firm near-term outlook.

Outlook

After a year of elevated trade barriers and uncertainty, the global economy now faces renewed pressure from the Middle East conflict. If contained, growth is projected to ease to 3.1% in 2026, with a slight recovery to 3.2% in 2027, while inflation may rise briefly before declining again. Emerging and developing economies are expected to feel the impact more sharply. The outlook remains skewed to the downside. Prolonged conflict, rising geopolitical tensions, weaker-than-expected AI productivity gains, or renewed trade frictions could further slow growth and disrupt markets. High public debt and weakening institutional credibility add to the risks, though easing trade tensions or stronger AI-led gains could provide some support. In this uncertain environment, resilience will depend on adaptive strategies, credible policies, and stronger global cooperation. While higher defence spending may boost short-term activity, it risks fuelling inflation, straining fiscal balances, and crowding out social investments.

Indian economy overview

India s economy is expected to maintain a strong growth trajectory, with real GDP projected to expand by 7.6% in FY26, according to estimates by the Ministry of Statistics and Programme Implementation (MoSPI). This outlook underscores the countrys robust macroeconomic fundamentals despite prevailing global uncertainties.

Nominal GDP, which incorporates price movements including inflation, is estimated to grow by 8.6% during the year, reflecting a balanced expansion in both economic output and price levels.

The growth momentum has been supported by consistent quarterly performance, with real GDP growth of 8.4% recorded in Q2 and 7.8% in Q3 (October December), indicating resilience across key sectors of the economy.

In recent years, India has sustained stable growth levels, with real GDP growth of 7.2% in FY2023 24 and 7.1% in FY2024 25. During the same period, nominal GDP growth stood at 11.0% and 9.7%, respectively.

The manufacturing sector continues to play a pivotal role in driving economic expansion, registering double-digit growth, and reinforcing India s position as a key industrial hub. This momentum has been further supported by steady contributions from the secondary and tertiary sectors, reflecting the broad-based nature of the country s economic growth.

India Retains Strong Growth Momentum, Expected to Grow By 6.8 - 7.2% In FY27

Domestic demand continued to underpin Indias economic growth in FY26. According to the First Advance Estimates, the share of Final Private Consumption Expenditure (PFCE) in GDP increased to 61.5% during the year. The sustained strength in consumption reflects a supportive macroeconomic environment characterised by relatively low inflation, stable employment conditions, and improving real purchasing power. Rural consumption remained resilient, supported by strong agricultural performance, while urban consumption gradually improved, aided by the rationalisation of direct and indirect taxes. Together, these factors indicate that consumption-led growth remains broad-based across the economy.61.5%

The share of Final Private Consumption Expenditure (PFCE) in GDP is expected to increase to 61.5% in FY26.

In addition to consumption, investment activity continued to play a significant role in driving economic expansion during FY26. Gross Fixed Capital Formation (GFCF) is estimated to account for approximately 30.0% of GDP. Investment momentum strengthened during the first half of the fiscal year, with GFCF growing by 7.6%, surpassing the pace recorded in the corresponding period of the previous year and remaining above the pre-pandemic average growth rate of 7.1%.

30%

Gross Fixed Capital Formation (GFCF) is estimated to account for approximately 30.0% of GDP.

The agriculture and allied sectors are estimated to grow by 3.1% in FY26. Agricultural performance during the first half of the fiscal year was supported by a favourable monsoon, leading to agricultural GVA growth of 3.6%, higher than the 2.7% growth recorded during the same period in FY25, though still below the long-term average of 4.5%. Allied activities, particularly livestock and fisheries, have demonstrated relatively stable growth in the range of 5 6%. With the increasing share of allied activities in agricultural GVA, overall agricultural growth is increasingly shaped by the interplay between the relatively volatile crop segment and the more stable expansion in allied sectors.

3.1%

The agriculture and allied sectors are estimated to grow by 3.1% in FY26. The industrial sector showed steady improvement in FY26, with manufacturing growing 8.4% in H1, surpassing the full-year estimate of 7.0%. Construction remained resilient, supported by strong public capex and infrastructure momentum. Manufacturing s share in GDP held steady at 17–18%, with GVO at ~38%, comparable to services. Overall industrial growth is projected at 6.2% in FY26 (vs. 5.9% in FY25), with Q3 indicators such as PMI, IIP, and e-way bills reflecting strengthening demand.

Construction indicators, including steel and cement consumption, also recorded stable growth. The outlook remains positive, supported by GST rationalisation and favourable demand conditions.

On the supply side, services continue to drive growth, with GVA expanding 9.3% in H1 FY26 and an estimated 9.1% for the full year. Growth was broad-based across segments, with most sub-sectors exceeding 9%, except trade, hospitality, and related services, which remain slightly below pre-pandemic levels.

Outlook

India s economic outlook remains resilient, supported by strong macroeconomic fundamentals and broad-based demand. Real GDP and GVA are projected to grow by 7.4% and 7.3% respectively in FY26, driven by robust agricultural performance and improving urban consumption. India s medium-term growth remains stable, with FY27 growth expected in the range of 6.8% 7.2%. Inflation has moderated significantly, with average headline inflation at 1.7% during April December 2025, among the lowest levels recorded. The RBI has revised its FY26 inflation forecast to 2.0%, supported by favourable agricultural output, while IMF estimates remain moderate for FY26 and FY27. Looking ahead, inflation is expected to remain benign, providing a stable macroeconomic environment conducive to sustained economic growth and investment.

Indian MSME sector

The Micro, Small and Medium Enterprises (MSME) sector forms the backbone of India s economic landscape, comprising a diverse spectrum of businesses that differ in scale, technology, and innovation. These enterprises are vital drivers of economic progress, contributing meaningfully to GDP, exports, employment generation, and balanced regional development. With the ability to produce over 6,000 products, MSMEs play a crucial role in meeting the countrys demand for mass consumption goods. Given its strategic significance, the sector holds immense potential to power sustained economic growth, provided it is supported by a conducive policy framework and focused developmental initiatives.

31.1%

Indian MSME sectors contribution to Indian GDP

35.40%

Indian MSME sectors contribution to Indias total manufacturing output

~48.58%

Indian MSME sector s contribution to India s total exports

~32.82 crore

Number of people employed by the Indian MSME sector

~7.47 crore

Number of registered enterprises in the Indian MSME sector

The MSME sector continues to serve as a cornerstone of Indias economic architecture, driving structural transformation through decentralised industrialisation and broad-based growth. Contributing 31.1% to GDP and 35.4% to total manufacturing output, underscoring its pivotal role in strengthening domestic production capabilities. Beyond its economic contribution, MSMEs play a critical role in reducing regional disparities by anchoring local economies and fostering self-reliance. The sector also remains a key employment generator, providing livelihoods to over 32.82 crore individuals and acting as a vital instrument for socio-economic inclusion by empowering first-generation entrepreneurs and underserved communities.

MSMEs are increasingly emerging as engines of global competitiveness and innovation. Their integration into global value chains has significantly strengthened India s export performance, with the sector contributing 48.55% to merchandise exports in FY25. This momentum is supported by targeted policy initiatives, including export promotion schemes and enhanced access to collateral-free credit. Simultaneously, the rapid adoption of digital public infrastructure, such as ONDC, OCEN, and the Account Aggregator framework is enabling greater formalisation, improved market access, and efficient credit delivery. MSMEs are also playing a growing role in advancing Indias sustainability and innovation agenda, adopting green technologies and contributing to strategic sectors like defence and deep-tech manufacturing. With continued policy support and technological integration, the sector is well-positioned to drive inclusive, sustainable, and innovation-led growth aligned with Indias long-term economic vision.

Key Budget takeaways for the Indian MSME Sector

The Union Budget 2026–27 places MSMEs at the centre of Indias growth strategy, adopting a structured three-pillar approach focused on equity, liquidity, and capability building. A landmark initiative is the introduction of a 10,000 crore SME Growth Fund, aimed at nurturing high-potential enterprises into globally competitive champion MSMEs by providing long-term growth capital.

To further strengthen access to risk capital, the government has proposed an additional allocation to the Self-Reliant India Fund, ensuring continued equity support for micro and small enterprises. Alongside this, enhanced liquidity measures, particularly through the mandatory integration of the Trade Receivables Discounting System (TReDS) for public sector procurement, are expected to improve cash flows and address delayed payment challenges.

The Budget also emphasises ease of doing business and compliance simplification, with institutional support mechanisms such as Corporate Mitras to assist MSMEs, especially in Tier II and III markets. In a significant boost to exports, the removal of the 10 lakh cap on courier exports is set to expand global market access for small businesses, artisans, and startups.

Overall, the Budget signals a strategic shift from incremental support to building scale, competitiveness, and global integration, positioning MSMEs as key drivers of manufacturing growth, exports, and employment in India s long-term economic vision.

Global steel industry overview

Steel is the foundational material of the modern economy, underpinning construction, infrastructure, automotive manufacturing, energy infrastructure, and industrial machinery. The industry is currently undergoing two simultaneous transitions: a volume-driven expansion led by emerging market demand, and a technology-driven shift toward green steelmaking through electric arc furnaces (EAFs), hydrogen-based reduction, and energy-efficient induction-based heating systems.

The global steel market was valued at approximately USD 1.89 trillion in 2025 and is projected to reach USD 2.73 trillion by 2035, growing at a CAGR of approximately 5.3%. Global crude steel production reached 144.5 million tonnes in December 2024 alone a 5.6% increase year-on-year reflecting strong underlying demand. Asia Pacific dominates with a 65% market share, with India expected to register the highest CAGR through 2030 as it targets domestic steel production of 300 million tonnes by 2030.

Key growth drivers

Growing infrastructure investment and urbanisation in emerging economies, particularly in South and Southeast

Asia, are the primary volume drivers. The accelerating transition to Electric Arc Furnaces (EAFs) and induction-based melting technologies, driven by decarbonisation mandates, rising carbon costs, and energy efficiency imperatives, is reshaping capital expenditure patterns within the industry, increasing demand for advanced induction heating and melting equipment. The construction segment, commanding 38.5% of end-use demand, alongside the automotive and renewable energy sectors, provides a broad and diversified demand base for steel and, by extension, for steel processing technologies.

Outlook

The global steel industry is expected to sustain steady growth, driven by infrastructure-led demand in developing economies and a structural shift toward energy-efficient, low-emission production technologies.

The EAF and induction melting segments are positioned for above-average growth as steel producers increasingly invest in clean production pathways to meet net-zero commitments and regulatory requirements.

Indian steel industry

The Indian steel industry delivered a resilient performance in FY 2025–26, reinforcing its position as the worlds second-largest steel producer, even as it navigated global uncertainties and pricing pressures. Supported by strong domestic demand and sustained infrastructure activity, the sector recorded healthy growth in production, consumption, and exports. Crude steel production reached approximately 168 million tonnes in FY26, marking a robust 10.5% increase over ~152 million tonnes in FY25. Capacity utilisation levels among leading producers remained stable, reflecting the industry s ability to scale efficiently.

Indian steel industry production and consumption

This growth was largely driven by capacity additions rather than a corresponding rise in demand, leading to a widening gap between production and domestic consumption. As a result, despite higher volumes, the industry experienced continued pressure on realisations and margins.

India s steel trade balance showed marked improvement in FY26. Finished steel exports rose by nearly 29% y-o-y, reaching 8.24 million tonnes, while imports fell by 22.8% y-o-y to 7.8 million tonnes. This shift brought India closer to becoming a net exporter of finished steel, supported by government safeguard duties and narrowing price gaps with global markets. The export momentum was particularly strong in long products, while imports of specialized grades continued to meet domestic shortfalls. This trade performance underscores

India s growing competitiveness in global steel markets, though sustaining this trend will depend on demand stability abroad.

Despite higher production and stronger exports, the industry faced pricing pressures. The India Steel Composite Index fell by 2.2%, reflecting weak pricing power, particularly in flat steel products impacted by global oversupply. Long products demonstrated relative resilience, supported by infrastructure-led demand. Overall, profitability remained under strain as excess capacity and subdued demand growth limited margins.

Raw material availability posed challenges during the year. Iron ore production grew by 6.2%, but lagged behind steel output growth, increasing reliance on imports. Coking coal remained heavily import-dependent, with domestic production showing a marginal decline. On the other hand, scrap availability improved, supporting electric arc furnace operations and signalling a gradual transition toward circular steelmaking practices. This shift enhances sustainability but does not offset the structural vulnerability arising from coking coal dependence.

Key growth drivers

India s infrastructure push: Sustained government spending on roads, railways, and urban infrastructure continues to anchor steel demand, creating a strong foundation for long-term consumption growth.

Transportation and logistics expansion: Investments across the transportation sector, spanning highways, ports, and airports, are set to drive a meaningful uptick in steel demand. Strengthened logistics infrastructure will not only improve distribution efficiency but also reduce transportation costs, enabling steel producers to access new markets and expand their reach more effectively.

Urban India on the rise: Accelerated urbanisation and robust real estate activity across residential and commercial segments, are driving consistent demand across the construction value chain.

Powering industrial growth: Expanding manufacturing activity, supported by Indias push for self-reliance, is fuelling steel consumption across sectors such as automotive, engineering, and capital goods.

Rising domestic demand: Strong and steady domestic consumption remains the primary growth engine, reflecting broad-based economic momentum and sectoral resilience.

Expanding global footprint: Rising exports and improved trade positioning are strengthening demand, as Indian steel gains traction across key global markets.

Increasing capacity expansion: Ongoing investments by industry leaders such as Steel Authority of India Limited, Tata Steel, and JSW Steel underscore strong confidence in future demand, with capacity expected to scale significantly by 2030.

Policy support as a growth enabler: Government-led initiatives focused on infrastructure, manufacturing, and economic development continue to create a conducive ecosystem for sustained steel demand.

Outlook

Looking ahead, the Indian steel industry s prospects are shaped by both opportunities and risks. On the positive side, government-backed infrastructure projects and tariff reductions are expected to drive demand. However, the rapid pace of capacity expansion risks outstripping consumption, potentially limiting profitability. Global headwinds, such as weak demand, geopolitical tensions, and rising energy costs, add further uncertainty. To ensure long-term sustainability, the industry must focus on aligning capacity with demand, reducing raw material import dependence, and embracing sustainable production practices. While the outlook remains cautiously optimistic, profitability recovery will depend on demand growth rather than supply-driven expansion.

For Megatherm Induction Limited (MIL), this expansion directly translates into higher demand for induction furnaces and allied equipment. As steelmakers invest in new capacity and modernisation, MILs technology-driven solutions are positioned to capture market share by enabling energy-efficient, cost-effective, and sustainable steelmaking. The industrys gradual transition toward electric arc furnaces and scrap-based steelmaking aligns perfectly with MILs expertise, as induction furnaces are central to circular steelmaking practices.

Moreover, Indias push for green steel and reduced dependence on coking coal creates opportunities for MIL to supply low-emission induction technologies, strengthening its role as a partner in sustainable steel production. The companys ability to deliver customised solutions for both large integrated producers and MSME steel units enhances its relevance across the value chain.

Global foundry industry

The foundry industry encompasses the production of metal castings, iron, steel, aluminium, and other alloys, used across automotive, aerospace, construction, defence, and industrial machinery applications. It is a critical intermediary in the global manufacturing value chain, converting raw metals into precision-engineered components. The industry is undergoing rapid modernisation, with growing adoption of Industry 4.0 technologies, automated casting systems, and energy-efficient induction melting furnaces replacing traditional cupola and reverberatory furnaces.

The global foundry market was valued at approximately USD 184 billion in 2025 and is projected to reach USD 225 billion by 2030, growing at a CAGR of approximately 4.3%.

On a broader count including semiconductor foundries, the market reaches USD 306 billion in 2025, projected to touch USD 429 billion by 2032 at a CAGR of 5%. The foundry equipment market specifically was valued at USD 4.17 billion in 2024 and is projected to reach USD 5.68 billion by 2034. Asia Pacific, led by China and India, holds the largest regional share, accounting for over 45% of global foundry output.

Key growth drivers

The electrification of the automotive sector is a particularly significant driver, generating strong demand for precision aluminium die-cast components used in EV powertrains and lightweight vehicle structures. Rising infrastructure investment across emerging economies is fuelling demand for cast iron and steel components in construction machinery and utilities. The ongoing transition from traditional melting technologies to energy-efficient induction melting systems, driven by energy costs, emission norms, and quality requirements, represents a direct and growing opportunity for manufacturers of induction furnace equipment. Increasing automation, stringent quality standards, and the adoption of smart foundry practices are further accelerating equipment modernisation across the sector.

Outlook

The global foundry industry is set for sustained growth, underpinned by automotive electrification, infrastructure expansion, and the broad trend toward modern, energy-efficient manufacturing processes. The shift from conventional melting to induction-based technologies is expected to accelerate, creating durable demand for advanced foundry equipment and associated power systems.

Indian foundry industry

The Indian foundry market is on a strong growth trajectory, projected to expand from USD 26.28 billion in 2025 to USD 28.72 billion in 2026, and further to USD 46.72 billion by 2031, reflecting a robust CAGR of 10.22% between 2026 and 2031. The Indian foundry industry, the world s second largest after China, continues to play a pivotal role in advancing the nations manufacturing ambitions and supporting the vision of Aatmanirbhar

Bharat. With an annual production of 15.86 million metric tonnes in 2024–25 and an estimated valuation of US$22 billion, the sector serves as a critical backbone for key industries such as automotive, agriculture, railways, aerospace, power, and industrial machinery.

Comprising nearly 5,000 units, of which about 90% are MSMEs, and providing employment to over 2 million people, the industry is also a strong contributor to Indias export economy, with exports reaching US$4.31 billion.

This momentum is being driven by a combination of policy support and structural shifts within the industry. Import-substitution measures, the localisation push in electric vehicles (EVs), and increased public infrastructure spending have collectively steered the market away from short-term contracting towards long-term partnerships that prioritise quality, consistency, and lower carbon intensity. Aluminium high-pressure die-casting (HPDC) capacities are operating near peak levels, supported by domestic EV production crossing the one-million mark in FY2026. At the same time, the Vehicle Scrappage Policy is improving access to cost-effective scrap, reducing melt costs by 12 18%.

Additionally, safeguard duties on Chinese iron castings have redirected demand towards domestic manufacturers, shortening lead times and strengthening local supply chains. Emerging incentives for green hydrogen adoption are also encouraging early transitions from coke-based furnaces to cleaner alternatives. Together, these factors are enabling leading players to sustain pricing power, even amid ongoing volatility in scrap and energy costs.

The Indian foundry industry in 2026 is supported by several government initiatives and policies aimed at modernising production, enhancing sustainability, and boosting domestic manufacturing through the Make in India campaign. The government is actively facilitating the sectors transition toward becoming a global high-tech casting hub.

Key policy support

Production-linked incentive (PLI) schemes: Massive outlays, including 31.2 billion for automotive and specialty steel, are driving demand for precision castings. The PLI for Specialty Steel encourages the domestic production of high-grade steel essential for the aerospace and automotive sectors.

Import substitution: A 40% safeguard duty on Chinese iron castings has significantly redirected orders to domestic foundries.

Raw material relief: Basic Customs Duty (BCD) exemptions on raw materials for aircraft parts and maintenance (MRO) help lower costs for the aerospace casting segment.

Technological shift

Indian foundry industry

The Indian foundry and casting sector is undergoing a significant technological shift, driven by the adoption of automation, simulation tools, and advanced robotics. The integration of computer-aided design (CAD) and computer-aided manufacturing (CAM) systems is streamlining operations, improving precision, minimising defects, and enhancing overall efficiency. At the same time, the use of 3D printing for pattern and mould development is accelerating product development cycles and enabling greater design flexibility.

Further advancements in melting and moulding technologies are not only boosting productivity but also reducing material wastage. Together, these innovations are elevating product quality, shortening production timelines, and strengthening the industrys competitiveness in both domestic and global markets. As the shift towards smart manufacturing and Industry 4.0 gathers pace, Indian foundries are increasingly leveraging data analytics and predictive maintenance to optimise processes, reduce downtime, and drive sustained operational excellence.

Scrap Incentives: The duty exemption on ferrous scrap has been extended to 31 March 2026 to ensure the availability of low-cost raw materials.

MSME support: A dedicated 10,000 crore SME Growth Fund and a 2,000 crore top-up to the Self-Reliant India

Fund aim to help smaller foundries upgrade equipment and scale production.

National Green Hydrogen Mission: Subsidies are being provided to help foundries convert coke-fired cupolas to low-carbon furnaces or green hydrogen-ready systems.

Decarbonisation scheme: A proposed 5,000 crore scheme aims to incentivize emissions reduction, with up to 80% of funds earmarked for secondary steel players and foundries.

Circular economy: The steel scrap recycling policy aims to increase scrap usage to the global average of 31%, helping foundries reduce dependence on coking coal and lower emissions.

Waste-to-wealth: Collaborative projects are enabling the reuse of foundry sand in road construction to address environmental management challenges.

Defence and Aerospace: Policies focusing on Aatmanirbhar Bharat have increased domestic procurement for defence, creating a robust order book for forging and casting units.

Infrastructure spend: The 2026-27 Union Budget increased capital expenditure to 12.2 lakh crore, creating a continuous demand for fabricated metal components and fasteners in railways and roads.

Outlook

The Indian foundry industry is approaching a pivotal transformation, with 2027 set to redefine it from a traditional smoke and iron sector into a technology-driven, sustainability-focused powerhouse. Supported by strong growth, the industry is shifting towards high-value non-ferrous alloys and AI-enabled precision components to meet rising domestic value-addition demands in sectors like EVs and aerospace. However, tightening global regulations such as the EUs CBAM are intensifying pressure on MSMEs to adopt cleaner, future-ready technologies like green hydrogen-compatible furnaces. As a result, the sector is steadily evolving into a digitally integrated and environmentally responsible ecosystem, balancing domestic infrastructure needs with global sustainability expectations.

THE STEEL SCRAP RECYCLING POLICY AIMS TO INCREASE SCRAP USAGE TO THE GLOBAL AVERAGE OF 31%, HELPING FOUNDRIES REDUCE DEPENDENCE ON COKING COAL AND LOWER EMISSIONS.

The recent transformations in the Indian foundry industry creates a fertile ground for MIL. Foundries increasingly require precision melting, energy efficiency, and reduced carbon intensity, areas where MILs induction furnaces and advanced melting technologies provide a competitive edge. The Vehicle Scrappage Policy and rising EV production are boosting scrap availability, lowering melt costs, and accelerating the shift toward induction-based melting solutions.

Government incentives under the PLI scheme for specialty steel, MSME support funds, and the National Green Hydrogen Mission further strengthen demand for modern induction systems. MILs ability to deliver customised, scalable, and sustainable furnace solutions positions it as a key enabler of the foundry sectors transition from traditional coke-cupolas to future-ready, hydrogen-compatible induction furnaces.

Strategic positioning for MIL

Alignment with sustainability: MILs induction technologies directly support Indias decarbonisation goals in steel and foundry sectors.

MSME integration: With MSMEs forming the backbone of the foundry industry, MILs scalable solutions are well-suited to empower smaller units.

Export potential: As India strengthens its global steel and foundry footprint, MIL can leverage its technology to expand internationally.

Policy tailwinds: Budgetary allocations, safeguard duties, and green hydrogen subsidies create a supportive ecosystem for MILs growth.

Global automobile industry

The global automobile industry is one of the largest manufacturing sectors in the world, encompassing the design, production, and sale of passenger vehicles, commercial vehicles, and two-wheelers. The industry is undergoing its most significant structural transformation in a century, driven by the accelerating transition to electric vehicles (EVs), connected and autonomous vehicle technologies, and software-defined mobility platforms These shifts are reshaping supply chains, manufacturing processes, and the equipment requirements of automotive component producers, many of whom rely on induction heating, hardening, and forging systems for precision part manufacturing.

The global automotive market was valued at USD 2.75 trillion in 2025 and is projected to reach USD 3.26 trillion by 2030, growing at a CAGR of approximately 3.5%. On a broader vehicle economy basis, the market is expected to reach USD 8,508 billion by 2035. Asia Pacific dominates with a 53% market share in 2024 and is the fastest-growing region at a CAGR of 3.85% through 2030. Global vehicle production is projected to rise from 88 million units in 2024 to 104 million units by 2030, with non-ICE vehicles growing at a CAGR of 18.9% over the same period.

Key growth drivers

The rapid global adoption of EVs is the defining growth catalyst, driving unprecedented investment in new manufacturing capacity for motors, battery components, and lightweight structural parts, all of which require precision thermal processing via induction heating and hardening systems. Rising urbanisation in emerging markets, especially in India and Southeast Asia, is generating structural volume growth across both passenger and commercial vehicle segments. Tightening emissions regulations across major economies are accelerating fleet electrification and component innovation, while government incentives and EV infrastructure investments are supporting global demand expansion.

Outlook

The global automotive industry is set for sustained growth, supported by a strong long-term structural tailwind from EV adoption and mobility electrification. The shift towards electric drivetrains and precision-manufactured components is reinforcing demand for advanced induction-based thermal processing equipment across the automotive supply chain. India and China are expected to lead volume growth, while the

US and Europe are driving premium and technology-led market expansion.

Indian automobile industry

India s automotive industry today reflects a powerful convergence of innovation, scale, and sustainability. As one of the world s largest automobile markets, it has moved well beyond its identity as a manufacturing base to emerge as a hub of technological progress and global competitiveness. Backed by evolving consumer aspirations, supportive policy frameworks, and a decisive . shift towards electric mobility, the sector in 2026 is steering confidently into a new era, defined by smarter, connected, and cleaner mobility solutions.

By the end of 2025, Indias automobile industry has evolved into a formidable economic engine, valued at around USD 130 140 billion. India s automobile sector continues to gather strong momentum, reflecting both scale and sustained investor confidence. The market is projected to grow from USD 137 billion in 2025 to USD 147.6 billion in 2026, and further expand to USD 213.7 billion by 2031, registering a healthy CAGR of 7.69% over the period.

Commodity Price Movement (from January 2025 to January 2026)

FY26 proved to be a watershed year for Indian

- automobiles industry. The industry scripted a landmark chapter, with every major vehicle category, passenger vehicles, commercial vehicles, three-wheelers, and two-wheelers, recording their highest-ever annual sales in a single financial year, for the first time in seven years. Total sales reached approximately 2.83 crore units, growing around 10.4% over the prior year.

Passenger vehicle sales rose by 8% to 4.64 million units, while commercial vehicles saw a sharper increase of 12.6%, reaching 1.08 million units. Three-wheelers grew by 12.8% to 0.84 million units, and two-wheelers continued to dominate the market, expanding by 10.7% to 21.71 million units.

Two-wheelers remained the backbone of the industry, accounting for 77.87% of the total market, followed by passenger vehicles at 15.60%. Within the passenger vehicle segment, demand was largely driven by small and mid-sized cars, reflecting evolving consumer preferences and affordability trends.

Today, India stands as the worlds largest producer of two-wheelers, the third-largest manufacturer of heavy trucks, and the fourth-largest car manufacturer globally. This robust growth trajectory is further reinforced by cumulative foreign direct investment inflows of nearly USD 35.4 billion into the sector between April 2000 and

September 2023, underscoring its long-term potential and global competitiveness. Further, it contributes nearly 7% to the national GDP and supports over 37 million jobs, both directly and indirectly. The country now stands as the world s third-largest automobile market, having overtaken Japan in 2023, behind China and the United States.

The industry spans a diverse landscape, encompassing two-wheelers, passenger vehicles, commercial fleets, as well as emerging electric and hybrid mobility solutions. With annual sales exceeding 25 million vehicles, the domestic market continues to demonstrate strong momentum, fuelled by rapid urbanisation, expanding infrastructure, and the aspirations of a young, dynamic population.

Indias automobile export

Indias position as a global automotive manufacturing and export hub strengthened significantly, with total vehicle exports rising 24% to 6.65 million units. This growth was broad-based across segments. Passenger vehicle exports climbed 17.5% to 9.05 lakh units, while two-wheeler exports reached a record 51.8 lakh units, reflecting a 23.4% increase. Three-wheeler exports witnessed the sharpest surge, jumping 50.1% to 4.61 lakh units, and commercial vehicle exports also posted a healthy 17.4% growth to 0.95 lakh units. Together, these trends underscore Indias expanding global footprint and growing competitiveness in the automotive sector.

Key growth drivers

Rising incomes and demographic advantage: Indias favourable demographics, with nearly 65% of the population below the age of 35, continue to support long-term demand fundamentals. Rising disposable incomes are expanding the consumer base, particularly in Tier-2 and Tier-3 markets, driving higher first-time vehicle ownership and upgrade cycles.

Urbanisation and demand diversification: Ongoing urbanisation and migration are creating dual demand streams across urban and rural markets. The growth of suburban employment hubs is increasing reliance on personal mobility, supporting demand for two-wheelers and entry-level passenger vehicles.

Government push for electric mobility: Policy support remains a key enabler, with the FAME-II scheme allocating 11,500 crore (~USD 1.3 billion) to promote electric mobility across segments. Additional state-level incentives and the proposed FAME-III framework are expected to further accelerate EV adoption by improving the total cost of ownership. Indias electric two-wheeler market crossed 1.18 million registrations between January and November 2025, reflecting steady EV adoption.

Infrastructure expansion driving accessibility: Enhanced road connectivity, with over 1,59,000 habitations linked through rural road development, is improving market access and reducing transit times. This is expanding dealer reach, strengthening rural demand, and improving supply chain efficiencies for manufacturers.

Emergence of new ownership models: Subscription-based and leasing models are gaining traction, particularly among urban, digitally native consumers. These models reduce upfront ownership costs while offering bundled services, enabling OEMs to unlock recurring revenue streams and improve customer lifecycle value.

Outlook

The Indian automotive industry is poised for sustained long-term growth, supported by strong macroeconomic fundamentals, arising middle class, and deepening mobility penetration across urban and semi-urban markets. The sector is undergoing profound structural transformation, driven by premiumization, green mobility, and regulatory modernization, with consumer preferences shifting decisively toward SUVs, advanced safety features, and feature-rich vehicles. The electric vehicle transition remains the defining theme: India has committed over 42,000 crore toward EV incentives, infrastructure, and localisation, targeting 30% of new vehicle sales to be electric by 2030, reinforced by CAFE 3 norms effective April 2027. India is simultaneously strengthening its position as a global export hub for EVs and auto components, backed by significant OEM investment commitments Key risks include supply chain consolidation, rare earth dependencies, geopolitical uncertainty, and the pace of charging infrastructure rollout, factors management will continue to monitor closely.

Global defence industry

The global defence equipment industry encompasses the development, production, and procurement of military hardware and systems including combat vehicles, weapons platforms, armoured vehicles, naval systems, and advanced electronics. The industry is experiencing its strongest growth cycle in decades, driven by elevated geopolitical tensions across multiple regions, accelerating military modernisation programmes, and rising national security investments by governments worldwide. The production of specialised military-grade alloys, armour components, and high-performance metal parts, all of which require precision induction melting and heat treatment, is a key segment of the broader defence manufacturing ecosystem.

The global defence market was valued at USD 506.9 billion in 2025, growing at a robust CAGR of 7.1%, and is projected to reach USD 682.1 billion by 2029. Total global military expenditure stood at approximately USD 2,688.7 billion in 2025, growing at 4.9% from 2024, with the United States alone spending USD 997 billion. The defence equipment segment specifically is projected to grow from USD 588.5 billion in 2026 to USD 830.5 billion by 2034 at a CAGR of 4.4%. Asia Pacific is the fastest-growing regional market at a CAGR of 4.8%, driven by significant defence budget expansion in India, China, and Japan.

Key growth drivers

Escalating geopolitical tensions, across Eastern Europe, the South China Sea, and the Middle East, are driving sustained and broad-based increases in defence budgets globally. Military modernisation programmes across NATO and Indo-Pacific nations are generating strong procurement pipelines for advanced land, air, and naval systems. The growing emphasis on indigenous defence manufacturing, exemplified by Indias Make in

India Defence initiative, is creating domestic demand for precision metallurgical processing and specialised alloy production capabilities. Increasing investment in autonomous systems, hypersonic technologies, and next-generation armoured platforms is further supporting demand for advanced defence manufacturing infrastructure.

Outlook

The global defence equipment market is expected . to maintain strong growth momentum through the decade, supported by sustained government spending and broadening geopolitical imperatives. Asia Pacific, led by Indias rising defence indigenisation ambitions and expanding domestic manufacturing programmes, presents a particularly compelling long-term growth market for suppliers of precision defence manufacturing technologies and equipment.

Indian defence industry

Indias defence manufacturing industry has emerged as a critical driver of economic growth, supported by rising demand as the country accelerates military modernisation amid evolving security challenges. Historically dependent on imports, India often faced constraints around strategic autonomy and timely access to critical equipment.

Today, the sector is undergoing a decisive transformation, with indigenous capabilities, private sector participation and policy support converging to reshape the landscape. The launch of Atmanirbhar Bharat in 2020 marked a turning point, accelerating self-reliance through higher modernisation spending, import restrictions on over 400 items, streamlined approvals and the development of dedicated defence corridors.

As a result, India is transitioning from one of the worlds largest defence importers to an emerging exporter and self-reliant producer, with 2025 marking a significant milestone in establishing its position as a credible global defence manufacturing hub.

The Ministry of Defence was allocated a total budget of 6.81 lakh crore for FY26, reflecting a 9.5% increase from FY25, with 1.80 lakh crore earmarked for capital expenditure, including the procurement of new weapons, aircraft, warships, and military equipment. Looking into FY27, the defence budget is pegged at 7.84 lakh crore, approximately 15% of the Union Budget and around 2% of GDP, with capital spending rising to about 28% of overall defence expenditure, signalling higher modernisation intensity.

Annual defence production reached a record 1,50,590 crore in FY25, up 18% over FY24 and a staggering 90% increase since FY20. A robust defence industrial base comprising 16 Defence Public Sector Undertakings (DPSUs), over 430 licensed companies, and approximately 16,000 MSMEs is underpinning indigenous production capabilities, with the private sector contributing 21% to total defence production.

Indias defence exports touched an all-time high of 38,424 crore in FY26, a sharp 62.66% jump over the previous financial year, with India now exporting defence equipment to over 100 countries including the

United States, France, and Armenia. DPSUs recorded an exceptional surge of 151% in exports, rising from 8,389 crore in FY25 to 21,071 crore in FY26, while private sector exports grew 14% to 17,353 crore, highlighting their growing role in niche manufacturing and global supply chain integration.

The Defence Ministry has set a target of 70% self-reliance in weaponry by 2027. Expenditure on defence procurement from domestic vendors has increased from 61% in FY17 to approximately 75% in FY25, driven by five successive Positive Indigenisation Lists and the SRIJAN online portal for indigenisation. Policy continuity under the Defence Acquisition Procedure 2020, with its priority for Buy Indian-IDDM categories, has steered major procurements toward indigenous platforms, with a majority of contract value in FY25 awarded to Indian industry.

Indias private defence sector is poised for sustained growth, with revenues expected to rise 16% 18% in FY26, building on a strong 20% CAGR between FY22 and FY25, supported by favourable government policies, increased private investment in R&D and capex, and accelerating indigenisation. According to Goldman Sachs, private defence companies are likely to deliver ~32% annual EPS growth between FY25 and FY28, driven by expanding exports and localisation. The continued momentum in defence corridors across Uttar Pradesh and Tamil Nadu is further strengthening manufacturing ecosystems, aligning with India s target of 3 lakh crore defence production by 2029. Over the long term, the domestic defence market is projected to reach 10 lakh crore (USD 122 billion), with rapid advancements in indigenous technologies, such as drones, counter-UAS systems, electronic warfare, autonomous platforms, and precision munitions, positioning India as an emerging global hub for defence manufacturing and exports.

Key budget highlights for Indian defence sector (2026-27)

The Union Budget FY 2026–27 reinforces the Governments strong commitment to national security, modernisation and self-reliance, with the Ministry of Defence receiving a record allocation of 7.85 lakh crore, marking a 15.19% increase over the previous year and accounting for 14.67% of total government expenditure. A significant focus has been placed on modernisation, with capital outlay exceeding 2.19 lakh crore, including 1.85 lakh crore for capital acquisition, aimed at strengthening capabilities across next-generation platforms such as fighter aircraft, naval assets, drones and advanced weapon systems.

The Budget continues to drive Aatmanirbhar Bharat in defence manufacturing, with 1.39 lakh crore earmarked for domestic procurement and nearly 75% of capital acquisition reserved for Indian industry, providing a strong growth impetus to private sector players.

In parallel, the Government has strengthened the innovation ecosystem, increasing allocation to DRDO to 29,100 crore while expanding industry participation in defence R&D, thereby accelerating indigenous technology development and collaboration.

Infrastructure and connectivity have also received a boost, with higher allocations to the Border Roads Organisation (Rs.7,394 crore) and investments in defence communication networks, enhancing operational preparedness.

Additionally, the Budget underscores a continued commitment to veterans welfare, with 12,100 crore allocated to the Ex-Servicemen Contributory Health Scheme (up 45.49%) and 1.71 lakh crore for defence pensions, ensuring social security alongside strategic capability building.

Outlook

Indias defence manufacturing sector is entering a high-growth phase, supported by rising defence spending, strong indigenisation policies, and a clear export roadmap. Defence expenditure is projected to increase from USD 92.9 billion in 2026 to USD 125.2 billion by 2030, with nearly 75% of the modernisation budget earmarked for domestic procurement. The government aims to achieve 3 lakh crore in annual defence production and 50,000 crore in exports by 2029.

Growth is expected to be further driven by innovation, strategic global partnerships, and increasing private sector participation alongside DPSUs. Initiatives such as Operation Sindoor have reinforced the credibility of indigenous defence capabilities, boosting global confidence and export momentum. While the long-outlook remains strong, key risks such as procurement delays, supply chain constraints, and technology dependencies may impact execution timelines.

Indian railway sector

With a more than 162-years history, the Indian Railways is one of Indias most critical national assets, operating over 19,000 trains across 7,112 stations. It is the second-largest railway network in Asia and the fourth-largest globally. Serving as the backbone of connectivity, it drives economic activity, enables citizen mobility, and supports trade through a robust logistics network. Organised into 17 zones and 68 divisions, it ensures efficient operations at scale. With a workforce of over 1.3 million, Indian Railways is also one of the countrys largest employers, playing a vital role in nation-building.

In FY26, Indian Railways delivered a year of robust and balanced progress, marked by notable achievements across freight and passenger operations, infrastructure expansion, safety enhancements, and digital innovation, while steadily advancing self-reliance in technology and manufacturing. Together, these milestones reinforce its pivotal role in powering economic growth, strengthening connectivity, and enabling seamless mobility across the nation.

Railways capital expenditure for FY26 was targeted at 3,02,000 crore, supported by gross budgetary support of 2,52,000 crore. Indian Railways utilised 80.54% of its allocated budgetary support as of December 2025, with a 6.54% increase in GBS utilisation compared to the same period in the prior year, with expenditure primarily focused on safety measures, capacity enhancement, infrastructure modernisation, and passenger amenities. Separately, 100 railway projects involving new lines, doubling, multitracking, and other works were sanctioned in FY26, a 56% increase, with a total investment commitment of 1.53 lakh crore covering more than 6,000 kilometres of railway network.

As of April 1, 2025, Indian Railways has approved an ambitious pipeline of 431 infrastructure projects spanning new lines, gauge conversions, and track doubling. Together, these projects cover nearly 36,000 km and represent a planned investment of 6.75 lakh crore (US$ 78.41 billion). Of this, over 12,700 km has already been commissioned already, with an expenditure of around 2.91 lakh crore (US$ 33.65 billion), reflecting steady progress in strengthening the nation s rail network.

Indian Railways continued its steady growth trajectory in FY 2025 26, carrying 741 crore passengers, up 3.54% from 716 crore in the previous year. Passenger revenues also rose to approximately 80,000 crore, reflecting a 5.96% increase over 75,500 crore in FY 2024 25.

This consistent rise underscores sustained demand for rail travel, supported by improved service delivery and stronger revenue realisation.

On the freight side, Indian Railways achieved a record haul of 1,670 million tonnes (MT), registering a 3.25% year-on-year growth. The number of wagons handled increased by 4.56%, from 2.79 crore to 2.92 crore. This upward momentum highlights the growing preference for rail as a reliable and cost-effective logistics backbone, particularly for bulk transportation.

Freight revenues remained resilient at 1,77,754 crore in FY 2025 26, marking a 1.44% increase over the previous year. Iron ore continued to lead as the highest revenue-generating commodity, followed by cement, pig iron and finished steel, fertilisers, food grains, and mineral oil. The diversified commodity mix reflects the Railways critical role in supporting core industries and driving economic activity across the country.

Digital transformation remained a core focus area, with the launch of the RailOne App in July 2025 offering passengers a unified platform for ticket booking, train enquiries, and grievance redressal, while over 3.04 crore suspicious user accounts were removed to promote fair and transparent access to railway services. Indian Railways is also deploying advanced AI and machine learning devices to enhance safety and operational efficiency through smart monitoring systems.

Outlook

Looking ahead, Indian Railways is set to significantly scale its transformation journey, with a planned investment of 16.7 lakh crore (US$ 193.98 billion) by 2031. This includes modernising 1,309 stations, expanding dedicated freight corridors, advancing high-speed rail projects, and accelerating electrification, collectively aimed at enhancing efficiency, improving connectivity, and reducing logistics costs across the country.

Global power industry

The global power generation industry is at the centre of the worlds most consequential industrial transition, the shift from fossil fuel-based electricity generation to renewable and clean energy sources. The sector encompasses conventional generation (coal, gas, nuclear) alongside rapidly expanding renewable capacity (solar, wind, hydro, geothermal) and the associated grid infrastructure, storage systems, and power electronics required to manage an increasingly complex and distributed energy landscape. For manufacturers of induction-based power systems and heating equipment, the power sectors ongoing infrastructure build-out represents a significant and growing end market.

The global power generation market was valued at approximately USD 1.57 trillion in 2024 and is projected to reach USD 3.25 trillion by 2034, growing at a CAGR of 7.5%. Within this, the renewable energy segment has emerged as the industrys primary growth engine: the global renewable energy market was valued at USD 1,602 billion in 2025 and is projected to reach USD 4,861 billion by 2033 at a CAGR of 14.7%. Asia Pacific holds the largest regional share at approximately 42%, driven by massive renewable capacity additions in China, India, and Southeast Asia. India alone is targeting 500 GW of renewable energy capacity by 2030.

Key Growth Drivers

The structural global transition toward clean energy, supported by net-zero commitments, carbon pricing mechanisms, and rapidly declining renewable technology costs, is driving unprecedented investment in new generation capacity, grid modernisation, and energy storage infrastructure. Rising electricity demand from industrial expansion, urbanisation, EV charging networks, and data centre proliferation is creating durable long-term demand for new power generation and distribution infrastructure. Government policy frameworks, including Indias National Electricity Plan, the US Inflation Reduction Act, and the EUs REPowerEU programme, are accelerating capital deployment across the sector. The growing adoption of smart grid technologies and energy storage systems is further expanding the infrastructure investment cycle.

Outlook

The global power industry is entering a prolonged and high-investment growth phase, underpinned by the dual imperative of meeting rising electricity demand and decarbonising the energy system. Asia Pacific will remain the epicentre of capacity additions, with India expected to be among the worlds fastest-growing power markets through 2035. The sectors scale of infrastructure investment presents a sustained and expanding opportunity for manufacturers of power conversion systems, induction heating equipment, and associated power electronics.

Indian power industry

Electricity remains one of the most critical yet often unseen pillars of modern life, powering homes, industries, agriculture, healthcare, and digital infrastructure.

For a country of Indias scale and diversity, ensuring reliable, affordable, and universal access to electricity is both a complex technical undertaking and a significant governance achievement. Over the past decade, the Indian power sector has undergone a structural transformation, evolving into a system defined by improved capacity adequacy, enhanced reliability, and stronger institutional frameworks.

As of January 2026, Indias total installed power generation capacity stands at approximately 520 GW, reflecting sustained investments across both conventional and renewable sources. Thermal power continues to hold a significant share, with coal-based capacity accounting for around 43% of the total mix.

However, the energy landscape is steadily diversifying, with renewable energy sources, solar, wind, small hydro, and bio-energy, contributing nearly 40% of the installed capacity. Large hydropower accounts for about 10%, while gas, nuclear, lignite, and diesel together form the balance, underscoring a gradual shift toward a more balanced and sustainable energy mix.

Capacity addition has remained robust, with 52.5 GW of new generation capacity added during FY2025–26 (up to January 2026), marking the highest-ever annual addition. Notably, renewable energy accounted for a dominant share of this expansion, led by solar and wind installations. This growth, representing an increase of over 11% in total capacity, positions India to effectively meet rising electricity demand driven by economic growth, urbanisation, and improving living standards.

India s declining energy deficit

Parallel to generation expansion, significant investments have been made in strengthening the transmission and distribution infrastructure. India s national grid, now one of the largest synchronous grids globally, has surpassed 5 lakh circuit kilometres of transmission lines, with transformation capacity reaching 1,407 GVA. These enhancements have improved grid stability, reduced transmission bottlenecks, and enabled the seamless integration of renewable energy into the power system.

520.51 GW

Indias total installed power generation capacity

5,00,000 ckm

India s National transmission network

1,407 GVA

Indias total transformation capacity

The sector has also witnessed notable improvements in operational efficiency and financial health. Power shortages have declined sharply from 4.2% in FY2014 to just 0.03% by December 2025, reflecting enhanced supply adequacy and better demand management. Electrification initiatives have extended connectivity to over 18,000 villages and nearly 2.86 crore households, significantly improving access in rural and semi-urban regions. Additionally, reforms in the distribution segment have led to a reduction in outstanding dues and a return to profitability for DISCOMs, supported by improved billing efficiency and the ongoing rollout of smart metering.

India s ability to meet a peak power demand of 242.49 GW during FY2025–26 underscores the growing resilience of the sector. Reliable electricity supply has reduced dependence on alternative energy sources such as diesel, contributing to cost efficiencies and improved environmental outcomes.

Overall, the Indian power sector today stands on a strong foundation of scale, reliability, and sustainability. With continued policy support, infrastructure investments, and technological advancements, the sector is well-positioned to support the countrys long-term economic growth while advancing its clean energy and energy security objectives.

Company overview

Megatherm Induction Limited is a leading engineering company specialising in the design, manufacturing and servicing of advanced induction heating and melting solutions. With a strong foundation in metallurgical engineering and power electronics, the Company caters to a wide spectrum of industries including steel, foundry, forging and heat treatment, delivering efficient and technology-driven thermal processing systems.

The Company designs, engineers, supplies, erects, and commissions turnkey steel melt shop solutions, along with comprehensive after-sales services including maintenance and spare parts, catering to a diverse base of end-use industries. Its product portfolio encompasses induction melting furnaces, induction heating equipment, transformers, ladle refining furnaces, continuous casting machines, and fume extraction systems, serving the full upstream and downstream requirements of steel melt shops.

The Company serves steel producers, auto ancillaries, ordnance factories, railways, and ductile iron pipe manufacturers, with over 3,000 installations across more than 52 countries spanning South America, Africa, Asia, and Europe. Its manufacturing facility at Kharagpur,

West Bengal, is ISO 9001:2015 certified and carries an annual capacity of approximately 300 furnaces and transformers, supporting both domestic demand and a growing international export footprint.

The Company differentiates itself through continuous in-house R&D and product innovation, with several firsts to its credit in induction heating and hardening applications, reflecting its stated commitment to keeping customers future-ready and technically ahead of the competition.

Our SWOT analysis Strengths

Strong domain expertise in induction heating and metallurgical engineering Integrated capabilities across design, manufacturing and commissioning

Energy-efficient, sustainable solutions aligned with industry needs

Diversified presence across steel, foundry and forging sectors Established customer relationships with robust service support

Proven track record in executing complex, large-scale projects

Weaknesses

High dependence on capital-intensive industries like steel and metals

Exposure to cyclical demand impacting order inflows Limited brand visibility compared to larger global competitors

Working capital intensity due to project-based business model

Opportunities

Growing demand for energy-efficient and sustainable industrial solutions

Expansion of the domestic steel and infrastructure sectors

Rising focus on Make in India and import substitution Increasing export opportunities in emerging and developing markets Adoption of automation and Industry 4.0 in manufacturing processes

Threats

Intense competition from global and domestic players

Volatility in raw material prices affecting project costs

Regulatory and environmental compliance pressures

Delays in customer capex cycles impacting order execution

Technological disruptions requiring continuous upgradation

Financial review

MIL has developed a diverse product portfolio along with service offerings, with solid process expertise to provide complete solutions. In the last couple of years, the Company emphasised being more agile while remaining committed to its long-term sustainable growth strategies.

In FY26, revenue from operations, including other income, stood at 352.83 crores, EBITDA stood at 39.81 crores and PAT stood at 23.68 crores growing by 9.00%, 2.29% and 11.15% respectively, compared to the previous year.

Revenue contribution from the domestic market stood at 90.23% while 9.77% came in from exports. Domestic revenues for FY26 stood at 312.42 crores, compared to 288.12 crores in FY25. Revenue contribution from exports stood at 33.81 crores in FY26, up by 4.39% compared to 32.39 crores in the previous financial year. Steady revival in economic activity, combined with cost excellence initiatives undertaken by the Company, helped increase market share in both domestic and internal markets

P&L analysis

Particulars	FY26 (Rs. in crore)	FY25 (Rs. in crore)	Growth (change in %)
Revenue from operations	351.13	322.01	9.04%
Cost of materials consumed	251.55	233.27	7.84%
Employee Benefits Expense	21.70	17.61	23.23%
Interest Income	1.70	1.70
Interest cost	3.85	6.01	-35.94%
EBITDA	39.81	38.92	2.29%
PBT	30.60	28.95	5.70%
PAT	23.68	21.31	11.12%
EPS (in )	12.57	11.31	11.14%

Key financial ratios

S No. Ratio	Ratio as on 31 March 2026	Ratio as on 31 March 2025	Variation
(a) Current Ratio	1.41	1.44	-2.63%
(b) Debt-Equity Ratio	0.30	0.23	29.86%
(c) Debt Service Coverage Ratio (DSCR)	3.31	3.41	-2.87%
(d) Return on Equity Ratio	14.32	15.04	-4.77%
(e) Inventory Turnover Ratio	2.25	2.61	-13.85%
(f) Trade Receivables Turnover Ratio	9.47	9.48	-0.20%
(g) Trade Payables Turnover Ratio	6.13	5.82	5.20%
(h) Net Capital Turnover Ratio	5.35	5.59	-4.23%
R (i) Net Profit	0.07	0.07	2.89%
(j) Return on Capital Employed	13.92%	17.64%	-21.07%
(k) Return on Investment	14.32%	15.04%	-4.77%

Analysis of Balance Sheet

Particulars	FY26 (Rs. in crore)	FY25 (Rs. in crore)	Growth (change in %)
Total equity	18.84	18.84	0%
Long-term borrowings	0.09	3.25	-97.23%
Short-term borrowings	49.35	29.37	68.03%
Total non-current assets	103.94	91.75	13.29%
Trade receivables	37.55	35.39	6.10%
Cash and cash equivalents	55.29	25.63	115.72%
Land	4.49	4.54	-1.10%

As on March 31 st March, 2026, the Companys Equity

Capital stood at 18.84 crores compared to 18.84 crores as of 31 st March, 2025.

Total long-term borrowings of MIL as of 31 st March, 2026 stood at 0.09 crore vis-a-vis 3.25 crore as on 31 st March, 2025. We reduced finance costs by 35.89% during the year from 6.01 crore in FY25 to 3.85 crore in FY26 through rationalisation of external exposures.

Our tangible assets as of 31 st March, 2026 stood at 84.58 crore vis-a-vis 76.00 crore as on 31 st March, 2025, an increase of 11.29%.

Cash and cash equivalents as of 31 st March, 2026 stood at 55.29 crore vis-a-vis 25.63 crore as on 31 st March, 2025, an increase of 115.67%.

Risk management

Megatherm Induction Limited recognises that effective risk management is integral to sustaining growth, safeguarding stakeholder value, and navigating an evolving industrial landscape. The Company has established a structured risk management framework that enables the timely identification, assessment, and mitigation of key business risks, supported by continuous monitoring and internal controls.

Cyclical industry risk

The Company s performance is closely linked to capital expenditure cycles in core sectors such as steel and metals.

To mitigate this, Megatherm focuses on diversifying its end-user industries and expanding into new geographies, thereby reducing dependence on any single sector.

Raw material price volatility

Fluctuations in the prices of critical inputs can impact project costs and margins. The Company addresses this through strategic sourcing, vendor diversification, and appropriate contract structuring, including price variation clauses where feasible.

Technology obsolescence risk

Rapid advancements in industrial technologies necessitate continuous innovation. Megatherm mitigates this risk through sustained investments in R&D, product upgradation and adoption of advanced engineering and digital solutions.

Execution and project risk

Given the customised and project-based nature of operations, delays in execution can affect profitability and customer satisfaction. The Company employs robust project management practices, detailed planning, and close client coordination to ensure timely delivery.

Regulatory and compliance risk

Stringent environmental and safety regulations require strict adherence. The Company maintains strong compliance systems and regularly updates its processes to align with evolving regulatory standards.

Working capital risk

The business model involves significant working capital requirements due to long project cycles. This is managed through disciplined financial planning, efficient receivables management, and strong banking relationships.

Market competition risk

Intense competition from domestic and global players can impact market share. The Company continues to differentiate itself through quality, customised solutions, competitive pricing, and reliable after-sales support.

Through this proactive and structured approach,

Megatherm Induction Limited remains well-positioned to mitigate risks while capitalising on emerging opportunities, ensuring resilient and sustainable growth.

Internal control systems and their adequacy

At MIL, robust internal control systems are in place to ensure financial integrity and regulatory compliance, aligned with the Companys evolving scale and operational complexity. These controls encompass a wide range of policies, procedures, and statutory requirements, forming a strong foundation for sustainable growth.

The framework is designed to continuously evaluate and manage risks across all aspects of the business, including geopolitical and raw material price fluctuations risks, partner, and stakeholder interests, as well as commercial and financial exposures. Comprehensive management reporting systems further support the oversight of strategy, performance, operations, risk, funding, and governance. Internal auditors conduct detailed, year-round audits across all locations and departments, with their findings reported to a dedicated Committee for timely review and action.

Human resource and Industrial relations

In todays fast-evolving and competitive business environment, MIL firmly believes that its people are its greatest asset. Acknowledging that employees form the backbone of the organisation s success, MIL has adopted a holistic approach to workforce development.

By integrating industry the best practices and standard operating procedures across departments, the company ensures operational consistency, enhances team efficiency, and drives collective performance.

But MIL s commitment goes beyond process. With a strong focus on future-readiness, the company continuously invests in skill development through structured learning and training programs. These initiatives are designed not just to upskill employees but to cultivate a mindset of curiosity, adaptability, and continuous growth. As of March 31, 2026, the company had 374 employees on its payroll.

Cautionary statement

The statements made in this report describing the

Company s objectives, estimations, expectations, projections, outlooks, constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results may differ from such expectations, projections, among others, whether express or implied. The statements are based on certain assumptions and future events over which the

Company has no direct control. The Company assumes no responsibility to publicly amend, modify and revise any of the statements based on any subsequent developments, information or events.