Modison Ltd Management Discussions

Global Economic Outlook

In the near term, as per estimated forecast, global growth is projected to fall from an estimated 3.3 percent in 2024 to 2.8 percent in 2025, before recovering to 3 percent in 2026. This is lower than the projections in the January 2025 WEO Update, by 0.5 percentage point for 2025 and 0.3 percentage point for 2026, with downward revisions for nearly all countries. The downgrades are broad-based across countries and reflect in large part the direct effects of the new trade measures and their indirect effects through trade linkage spill overs, heightened uncertainty, and deteriorating sentiment.

For emerging market and developing economies, growth under the reference forecast is projected to drop to 3.7 percent in 2025 and 3.9 percent in 2026, following an estimated 4.3 percent in 2024. This is 0.5 and 0.4 percentage point lower, respectively, compared with the rate projected in the January 2025 WEO Update.

After a marked slowdown in 2024, growth in emerging and developing Asia is expected to decline further to 4.5 percent in 2025 and 4.6 percent in 2026. Emerging and developing Asia, particularly Association of Southeast Asian Nations (ASEAN) countries, has been among the most affected by the April tariffs. For India, the growth outlook is relatively more stable at 6.2 percent in 2025, supported by private consumption, particularly in rural areas, but this rate is 0.3 percentage point lower than that in the January 2025 WEO Update on account of higher levels of trade tensions and global uncertainty.

Source: International Monetary Fund Report for April 2025

India Economic Outlook

Indias third-quarter gross domestic product numbers for fiscal year 2024 to 2025 standing at 6.2% year-over-year growth coupled with the recent International Monetary Fund growth projection of 6.2% for the current fiscal (2025 to 2026) did spark concerns.

Besides, the apparent "slowdown" in fiscal 2024 to 2025 has partly been a consequence of election-driven uncertainty (with both India and the United States going to the polls), disruptions driven by more-than-anticipated rainfall till the third quarter, and volatility in global trade networks in the last two quarters. Not to mention, the growth over the year is being compared against a significantly elevated economic base driven by revised figures for the past year.

The forecast for India has been optimistic, compared to market consensus, and GDP data revisions in the past years reinforce confidence in the Indian economys inherent strength, which has surpassed optimistic projections in the past

Two opposing forces are set to define Indias economic trajectory in fiscal 2025 to 2026:

The potential positive impact of tax incentives: The Union Budgets tax stimulus could raise GDP at least by 0.6% to 0.7% this fiscal. Besides, lower inflation, range-bound global oil prices, lower borrowing rates, and more liquidity (due to the easier monetary policy), and a more certain global environment by the end of the year will help boost sentiment. All of these factors will considerably push domestic consumer spending and investments forward.

The potential negative impact of uncertainty in global trade networks: At the time of writing, India faces an ad valorem baseline tariff rate of 10% on its goods exports to the United States. Since this rate is applicable over and above the 2023 trade-weighted average most-favored nation (MFN) tariff rate of 2.2%, the effective trade-weighted average MFN tariff rate stands at 12.2%.

The remaining potential differential tariff rate imposed on India, of 16% (for a total reciprocal tariff rate of 26%, which varies across countries and is currently paused for three months), could take the effective trade-weighted average MFN tariff rate to 28.2% on Indias exports to the United States by the end of the fiscal year. This may potentially shave 0.1% to 0.3% off Indias growth.

Considering the net impact of these two factors on growth, the growth is forecasted between 6.5% and 6.7% in 2025 to 2026.

Source: India economic outlook, May 2025 by Deloitte

Global Electrical Equipment Industry

The global electrical equipment market size was valued at USD 1,513.22 billion in 2024. The market is projected to grow from USD1,660.20 billion in 2025 to USD 3,326.86 billion by 2032, exhibiting a CAGR of 10.4% during the forecast period.

Electrical equipment is an essential segment of the industrial sector that ingests almost 50% of plant energy, whether in the form of tool applications or large manufacturing facilities. Every pneumatic or advanced electrically driven piece of equipment requires an electric actuation motor for directional movements, which makes electrical equipment a more adopted product in the electrical industry.

With the growing emphasis on the industrial revolution and initiatives such as Industry 4.0, the usage of compressed air has increased significantly. Consumers demand for the equipment that offers more technological advancement such as Internet of Things (IoT), real-time monitoring, artificial intelligence, and cost savings. Expansion in industries such as manufacturing, IT, healthcare, and telecommunications increases the need for electrical machinery and equipment. Additionally, increased trade and globalization facilitate the exchange of electric equipment leading to wider market access and increased sales. Moreover, urbanization leads to increased demand for electrical appliances in residential, commercial, and industrial applications.

Electrical equipment plays a crucial role in industries, directly impacting productivity on production lines. However, the market faces constraints owing to high assembling costs. Additionally, the material used for electrical equipment manufacturing costs heavily for the capex of manufacturers as the sourcing of raw material and shipping charges rise post-pandemic, leading to a decrease in profit margins. Moreover, rising price competitiveness has led the global demand for electric equipment to a slow, steady path. Many manufacturers are seeking to minimize production to maintain profit margins, which has caused restraint on the market.

Based on type, the market is categorized into electrical lighting equipment, household appliances, power generation, transmission and control equipment, batteries, and wires and cables. Power generation is likely to hold the highest market share owing to government policies promoting sustainable power generation and emphasizing the importance of clean energy. These policies stimulate the market for electrical equipment. Further, many governments across multiple regions are trying to promote renewable energy, energy efficiency, and electrification of rural areas promoting healthy market growth for transmission and control equipment.

Additionally, rising consumer preferences for advance energy saving appliance has expanded the potential demand for household appliance in near term. Also, OEM emphasis on integrating IoT and AI has raised the demand for smart household appliance that can easily be command from anywhere and from any device. Furthermore, continuous innovation in equipment, such as smart meters, smart player grids, energy-efficient appliances, and automation systems, drives demand for electric equipment such as batteries, electrical lighting equipment, and household appliances. Manufactures are continuously and extensively engaged in making substantial investments to develop and manufacture efficient and durable products such as LED lights and other wire cables for efficient electricity transmission.

Global market is forecasted to grow at a CAGR of 10.4% owing to the increased population in urban tier 1 cities, which spurs commercial construction projects, proving vital for market growth. Infrastructure projects, such as smart cities, transportation networks, and renewable energy systems installation, boost the demand for electric equipment. Furthermore, expansion in industries such as manufacturing, IT, healthcare, and telecommunications is increasing the need for electrical machinery and equipment. Additionally, increased trade and globalization are facilitating the exchange of electric equipment, leading to wider market access and boosting sales.

Source : Electrical Equipment Market Size, Share Growth Report [2032] published by Fortune Business Insignt

Indian Electrical Equipment Industry

The India electrical equipment market size is forecast to increase by USD 95.31 billion, at a CAGR of 15.6% between 2024 and 2029.

The Electrical Equipment Market in India is experiencing significant growth, driven by the increasing number of residential and commercial building projects worldwide. This trend is fueled by urbanization and infrastructure development, particularly in emerging economies. Additionally, the growth in cross-border electricity trading is expanding market opportunities for electrical equipment manufacturers. However, regulatory hurdles impact adoption, as stringent safety and environmental regulations necessitate costly compliance. However, the market faces challenges, including the threat from cyberattacks in the power generation industry and the need for modernization of the electric power grid and electrical meters.

Companies must invest in robust cybersecurity measures to mitigate these risks and protect their market position. To capitalize on market opportunities and navigate challenges effectively, electrical equipment manufacturers must focus on innovation, regulatory compliance, and supply chain resilience. A significant challenge facing the market is the increasing threat from cyberattacks in the power generation industry. As the electrical grid becomes more digitized, the risk of cyberattacks targeting critical infrastructure increases. Batteries and accumulators are gaining popularity in India due to the increasing adoption of renewable energy sources and electric vehicles.

The electrical equipment market continues to evolve, driven by advancements in power electronics, fault protection, frequency control, and power factor correction. These technologies play a crucial role in renewable energy integration, smart grids, and electrical design in various sectors. Building management systems and data analytics facilitate energy efficiency and predictive maintenance, ensuring electrical infrastructures optimal performance. Compliance with code requirements, voltage regulation, and process control is essential for electrical safety, with arc flash and circuit breakers being key components. Energy storage and energy management systems are integral to power generation and infrastructure development, enabling demand response and electrical testing. Smart lighting, harmonic distortion, and distributed generation are shaping the electrical landscape, with LED lighting and solar energy leading the way.

The Electrical Equipment Market in India is growing rapidly, driven by advancements in medium-voltage equipment and efficient power solutions. The adoption of single-phase power systems is increasing, especially in residential and small commercial applications. Emerging technologies, including machine learning, are optimizing power management and predictive maintenance. Regular energy audits help industries enhance efficiency and reduce operational costs. Precise circuit analysis is crucial for maintaining safety and performance in electrical infrastructure. Transmission and distribution networks require continuous improvement, with a focus on voltage regulation and energy quality. Regulatory compliance and safety regulations are evolving to address the dynamic nature of the electrical equipment market. Wind energy and hydroelectric power are significant contributors to the market, driving innovation and growth. The ongoing integration of these technologies and applications underscores the markets continuous dynamism.

Source : Report on Electrical Equipment Market In India Industry Analysis Published by Technavio in May 2025.

Switchgear Market

The switchgear market encompasses a broad range of electrical equipment used to control, protect, and distribute electricity in various applications. Power investment projects and grid modernization initiatives have driven growth in the switchgear market. The increasing demand for efficient electricity supply and grid efficiency is a primary factor fueling this growth. The integration of advanced technologies, such as the IoT and energy management systems, is transforming the power infrastructure landscape.

The Switchgear Market in India is witnessing growth due to the increasing focus on energy efficiency and sustainable energy development. According to recent market analysis, the switchgear industry is expected to expand at a CAGR of 9% during the forecast period viz 2025-2029. This growth can be attributed to various factors such as the adoption of smart metering and energy management software in energy markets, the implementation of smart city projects, and the increasing demand for energy efficiency solutions. The Market growth for 2025-2029 is anticipated as USD 6.86 Billion.

The market for low voltage systems is witnessing robust growth due to the rising demand for energy-efficient technologies. Design software and analysis tools are being extensively used in the development of medium voltage switchgear and green technology-based switchgear. The Indian energy sector is undergoing a transformation with the integration of clean energy technologies such as solar, wind, and hydro energy. The governments push towards sustainable infrastructure and energy security is driving the adoption of micro grid technology, energy innovation, and energy efficiency audits in government buildings and sustainable transportation. Energy consulting services are also gaining popularity as businesses and organizations seek expert advice on energy saving and the implementation of green technologies such as solar panel installation and wind turbine maintenance. The switchgear market in India is poised for growth as the country continues to prioritize energy efficiency, sustainability, and energy security.

Source : Report on Switchgear Market Analysis Published by Technavio in March 2025.

Electrical Contacts and Contacts Materials Market Overview

The electrical contact materials industry plays a vital role in enabling reliable power transmission, distribution, and control across a broad spectrum of applications. These include low-, medium-, and high-voltage switchgear, circuit breakers, relays, contactors, and electrical control systems. Electrical contacts are essential components responsible for establishing, carrying, and interrupting electrical currents in these devices.

This industry forms a critical backbone for several core sectors such as power utilities, railways, electric vehicle infrastructure, industrial automation, renewable energy, and consumer electronics.

Indian Market Overview

In India, the electrical contact materials industry is experiencing robust growth, propelled by factors such as:

Rising demand for uninterrupted electricity supply.

Accelerated urbanization and industrialization.

Government initiatives such as Power for All, Make in India, and significant investments in smart grid and infrastructure development.

The electrification of railways and expansion of EV charging infrastructure.

These factors are boosting demand for advanced and durable electrical contact materials, especially in low- and medium-voltage segments where India is witnessing rapid domestic expansion.

Global Market Developments

Globally, the industry is being shaped by:

Increasing demand for digitized and compact electronics.

Growth in consumer electronics, particularly in emerging economies.

Rising adoption of automation in industries requiring high-performance switching components.

Technological advancements in material science, improving the durability and conductivity of contact materials.

Ongoing Research & Development efforts have led to innovations in contact materials, enhancing properties such as corrosion resistance, arc resistance, thermal conductivity, and mechanical wear resistance. These developments are expanding the scope of applications and opening new market opportunities.

Outlook

The future outlook for the electrical contacts industry remains positive, supported by:

Indias aggressive push for power infrastructure modernization.

Increasing penetration of electric vehicles and automation technologies.

Greater focus on energy efficiency and reliability in electrical systems.

Focus on renewable energy.

Electrical Contacts and Contacts Materials Market Segmentation

The market can be divided on the basis of type into the following segments:

Silver-based electrical contacts and copper-based electrical contacts.

The silver-based electrical segment dominate the market.

The Classification based on application into the following segment:

Low-voltage electrical contacts and medium and high voltage electrical contacts

The low-voltage electrical contacts and contacts materials (low-voltage products) segment dominate the market.

Driving / Growth Factors

The electrical contact materials industry is evolving in response to a range of technological, environmental, and performance-driven demands:

The miniaturization of electronic devices and the rise of high-performance systems are driving the need for materials that offer exceptional electrical conductivity, while withstanding higher current densities and elevated operating temperatures.

Growing environmental awareness and regulatory pressure are accelerating the development of sustainable and eco-friendly contact materials, aimed at reducing reliance on hazardous or toxic substances.

The renewable energy systems, and smart grid technologies is creating demand for advanced contact materials capable of handling higher power loads with improved efficiency and thermal stability.

Increasing focus on safety and reliability in electrical systems is pushing innovation in materials that are highly resistant to arcing, corrosion, and mechanical wear, ensuring longer service life and consistent performance under demanding conditions.

These evolving requirements are collectively driving sustained investment in research and development, fostering the creation of next-generation electrical contact materials that are not only efficient and durable but also environmentally responsible and future-ready.

Industry Challenges and Restraining Factors

Despite significant advancements, the development and widespread adoption of advanced electrical contacts and contact materials face several constraints:

Stringent environmental regulations aimed at reducing the use of hazardous substances (such as lead, cadmium, or certain plating chemicals) limit the range of permissible materials. This necessitates the identification and validation of alternative materials that meet both performance and compliance standards, often adding to development time and cost.

Economic constraints can hinder the adoption of high-performance materials. While advanced alloys and coatings may offer superior electrical and mechanical properties, their higher cost may not be economically viable for all applications, especially in cost-sensitive or high-volume segments.

Compatibility with existing systems presents another challenge. New materials must often integrate seamlessly with established manufacturing processes, component designs, and industry standards, which can slow down their adoption without widespread standardization.

The trend toward miniaturization of electronic components brings added complexity. Smaller devices require highly precise contact materials that can operate reliably within tight tolerances and under thermal and mechanical stress, posing manufacturing, assembly, and longevity challenges.

These restraining factors demand rigorous material testing, process validation, and design optimization to ensure that any new electrical contact solution meets the technical, regulatory, and commercial requirements across diverse applications.

Source: Report by Buiness Research Insight on Electrical Contacts and Contacts Materials Market

About us

MODISON was established in 1965 by Mr. Girdhari Lal Modi (G.L. Modi) as a trading enterprise focused on tool steels and the export of engineering goods and general merchandise. Recognizing opportunities in precious metals, the company ventured into silver refining in 1975, setting up its first manufacturing facility in Mumbai (then known as Bombay). Within a short span, MODISON emerged as a key exporter of refined silver to leading banks and dealers across Europe and the United States.

A landmark achievement in the companys early journey was its pivotal role in establishing the status of ‘999 Good Delivery Silver Bars in India, setting high-quality benchmarks for bullion trading in the domestic market.

Building on its metallurgical expertise, MODISON identified a significant opportunity in the electrical switchgear sector. In 1977, the company diversified into the manufacturing of electrical contacts and contact materials, introducing production lines for silver and silver alloy wires, plates, strips, and solid/bimetal contacts. This strategic expansion laid the foundation for MODISONs long-standing presence in the electrical contact manufacturing industry.

Today, MODISON is recognized as a leading manufacturer of electrical contact catering to low-, medium-, and high-voltage switchgear industries

The company serves a wide range of customers across power distribution /electrical infrastructure industries, Automotive, Railway, Aerospace, Marin, Defence, Engineering, pharamaceuticals etc. with a growing presence in international markets. The companys journey reflects a commitment to quality, innovation, and customer-centric growth over the decades.

Financial Performance

Financial Highlights

		(Amount in Lakhs except EPS)
Key Metric	2024-2025	2023-2024	% Change
Revenue	49349.54	40523.00	21.78
EBITDA	4738.35	3822.49	23.96
Net Profit	2468.02	2134.33	15.63
EPS	7.61	6.58	15.65

Financial Ratio and details of significant changes in the same with Explanation

Key Metric	2024-25	2023-24	Variance	Reason for change
				(i.e. more than 25%)
Trade Receivable Turnover Ratio (In time)	6.43	6.79	(5.30)	-
Inventory Turnover Ratio (In time)	3.98	4.26	(6.57)	-
Interest Coverage Ratio (In time)	6.96	11.30	(40.18)	Due to increase in borrowing
Current Ratio(In time)	2.32	2.74	(15.33)	-
Debt to Equity Ratio(In time)	0.34	0.16	112.50	Due to increase in borrowing
EBITDA Margin (In %)	9.60	9.43	1.80	-
Net Profit Ratio (In %)	5	5.26	(4.94)	-

Details of any change in return on Net Worth along with Explanation

Key Metric		2024-25	2023-24	% change	Reason for change
Return on Net Worth	(In %)	11.76	10.94	7.50	-

Liquidity

The company maintained a healthy liquidity profile during the financial year, supported by robust operational cash flows and prudent capital allocation

Operating Cash Flow: (1609.55)

Capital Expenditure: 1564.84

Debt-to-Equity Ratio: 0.34

Working capital management remained efficient, with improved receivables collection and reduced inventory holding period.

Risk Management

Risk	Description	Mitigation Strategy at MODISON
Commodity Price Volatility	We relies heavily on precious metals such as silver, copper, and tungsten, which are subject to global price volatility due to geopolitical, economic, and demand-supply factors.	Long-term supply contracts and price- sharing agreements with key customers.
		Strategic inventory planning to take advantage of favorable price movements.
	Fluctuations in metal prices can significantly impact material costs and margins.	Limited hedging through financial instruments to reduce short-term volatility exposure.
Supply chain disruptions	Global disruptions in logistics or raw material shortages especially for specialty metals and alloys, can delay production schedules and increase procurement costs.	Local vendor development and periodic supply chain risk assessments. Multi-sourcing strategy to avoid dependency on single vendors. Strategic buffer inventory for critical inputs to maintain uninterrupted production.
Technological obsolescence	Rapid changes in technology, customer preferences, and product performance standards could render existing processes or products less competitive.	Dedicated Research & Development initiatives focused on material innovation, contact performance, and design improvements. Continuous upgradation of machinery (e.g., CNCs, precision forming tools) to maintain process competitiveness. Close collaboration with OEM customers for early insight into evolving technical requirements.
Customer Concentration Risk	A significant portion of revenue is derived from a limited group of Original Equipment Manufacturing (OEM) customers. Loss or reduction of business from a key client may adversely affect revenue	Active customer diversification into new geographies and industry verticals Strengthening relationships through product customization, quality leadership, and service responsiveness.
		Expanding into export segments to reduce dependency on domestic OEMs.
Regulatory & environmental compliance	Increasing regulatory scrutiny around environmental standards (especially around electroplating, effluents, and metals) poses compliance and reputational risks.	Adoption of ESG policies Active engagement with regulatory bodies
		Regular internal and third-party audits of environmental practices.
		Close monitoring of evolving statutory requirements and proactive compliance efforts.
Financial Reporting	The accuracy of Financial Reporting plays a very pivotal role in business development which helps to creat trust and generate reputation accross all stakeholders.	Implemented robust internal control systems
		Upgradation of ERP system during the year
		Period audit and validation from Auditors
Foreign Exchange	With a growing share of exports and import of raw materials,	Natural hedging by matching foreign currency inflows with outflows.
Fluctuation	MODISON is exposed to currency risks, especially USD and EUR.	Use of forward contracts for significant foreign exchange exposures.
		Periodic review of forex positions and impact analysis.
Workforce Management	The companys performance is dependent on its ability to attract, retain, and develop technical and managerial talent, especially in niche metallurgy and engineering roles.	Strong HR processes for talent development, training, and succession planning.
		Incentive and recognition programs to improve retention.
Cybersecurity and IT Risks	Increasing reliance on digital systems and ERP platforms makes the company vulnerable to cybersecurity threats, data breaches, and system outages.	Deployment of enterprise-grade cybersecurity solutions, firewalls, and intrusion detection systems.
		Regular data backup and disaster recovery protocols.
		Employee awareness training and periodic IT audits.

MODISONs risk management practices are overseen by senior leadership and reviewed regularly by the Board and Audit Committee. Key risks are logged and tracked at regular interval, with assigned ownership, mitigation actions, and status updates.

Strategic Outlook (for financial year 2025–26 and Beyond)

MODISON remains committed to innovation, expansion, and sustainable growth. The key focus areas for the coming fiscal year include:

Development of new product for green energy equipment

Development of new processes for better energy efficiency

Focus on new customer development

Development of new export market

Development of Cost effective Materials

Conclusion

Financial Year 2024-25 marked another year of resilient performance and strategic progress for MODISON. With strong fundamentals, robust internal systems, and a forward-looking product strategy, the company is well-positioned to capitalize on emerging opportunities in India and abroad.

We thank our employees, customers, partners, and shareholders for their continued trust and support.

Cautionary Statement

The statements in this report on "Management Discussion and Analysis", describing the Companys objectives, estimations, expectations or projections, outlook etc., may constitute forward looking statements within the meaning of the applicable Rules, Laws and Regulations. Actual results may vary from such expectations, projections etc., whether express or implied. These statements are based on certain assumptions and expectations of future events over which the Company has no direct control.