Modison Ltd Management Discussions

Global Economic Outlook

The global economy in 2026 is expected to experience moderate but uneven growth amid rising geopolitical tensions, persistent inflationary pressures, and increasing uncertainty in financial and commodity markets. According to the April 2026 World Economic Outlook released by the International Monetary Fund (IMF), global economic growth is projected to slow to approximately 3.1% in 2026 from an estimated 3.4% in 2025. The IMF attributes this slowdown largely to the economic consequences of ongoing geopolitical conflicts, particularly in the Middle East, along with tighter financial conditions, weaker global trade growth, and subdued investor confidence. Despite these challenges, the global economy has continued to demonstrate resilience due to strong labour markets in several advanced economies, technological advancements, and the gradual normalization of global supply chains.

Inflation remains a major concern across both advanced and emerging economies. The IMF projects global inflation to remain elevated during 2026 before easing gradually in 2027. Rising energy prices, food costs, and supply disruptions linked to geopolitical tensions continue to exert pressure on consumer prices worldwide. Energy-importing and developing economies are especially vulnerable to inflationary shocks, as higher import costs and currency depreciation increase domestic price pressures. Central banks across major economies are therefore expected to maintain cautious monetary policies in order to balance inflation control with economic growth.

Among advanced economies, the United States is expected to maintain relatively stable growth supported by strong consumer spending, resilient labour markets, and continued investment in artificial intelligence and technology-driven sectors. Europe, however, is likely to experience weaker growth due to energy security concerns, slower manufacturing activity, and fiscal tightening measures. Japan is projected to record modest growth driven by domestic demand recovery and improving wage growth, although weaker global demand may limit expansion.

Emerging markets and developing economies are projected to face greater economic pressures in 2026 due to external vulnerabilities such as volatile commodity prices, capital outflows, exchange rate fluctuations, and rising borrowing costs. Nevertheless, India is expected to remain the fastest-growing major economy in the world, supported by strong domestic consumption, infrastructure investment, digital transformation, and expansion in the services sector. Chinas economy, while stabilizing in the short term through policy support and export activity, continues to face structural challenges including weakness in the real estate sector, demographic pressures, and subdued domestic demand.

Geopolitical risks remain the most significant threat to the global outlook. The IMF highlights that prolonged conflict in the Middle East could disrupt oil supplies, increase shipping and transportation costs, and trigger renewed inflationary pressures across global markets. Such developments may further weaken investor confidence and increase financial market volatility. In a severe scenario involving prolonged conflict and sustained energy shocks, global growth could slow substantially below current forecasts.

Fiscal and monetary policymakers across the world face increasingly difficult trade-offs between supporting economic growth, controlling inflation, and maintaining debt sustainability. Governments are also under pressure to increase defence and security spending, which may limit fiscal space for social and developmental investments. At the same time, the IMF notes that technological innovation, particularly the adoption of artificial intelligence, could provide important long-term support to productivity, investment, and global economic efficiency.

Overall, the global economic outlook for 2026 reflects a period of heightened uncertainty and slower growth, but not a global recession. While several economies continue to display resilience, the balance of risks remains tilted to the downside. The IMF emphasizes that stronger international cooperation, prudent macroeconomic policies, and sustained investment in technology and productivity-enhancing sectors will be essential to ensuring economic stability and sustainable growth in the coming years.

Source: International Monetary Fund-World Economic Outlook, April 2026

India Economic Outlook

According to the Economic Survey 2025 26 released by the Ministry of Finance, Government of India, the Indian economy continues to demonstrate strong resilience and stable growth despite global economic uncertainties, geopolitical tensions, and external financial challenges. The Survey projects India to remain among the fastest-growing major economies in the world, supported by strong domestic demand, robust infrastructure development, stable macroeconomic fundamentals, and sustained policy reforms. Real GDP growth for FY 2025 26 is estimated at 7.4%, while the economy is expected to maintain steady growth momentum in FY 2026 27.

The Economic Survey highlights that domestic consumption remains the primary driver of economic growth. Rising household spending, improving employment conditions, stable inflation, and increasing rural and urban demand have contributed significantly to economic expansion. Public capital expenditure by the government on infrastructure sectors such as roads, railways, ports, renewable energy, logistics, and urban development has further strengthened economic activity and crowding-in of private investment. Gross Fixed Capital Formation has remained strong, indicating continued confidence in Indias long-term growth prospects.

The Survey also notes that the services sector continues to be the largest contributor to the Indian economy. Strong growth in information technology services, financial services, tourism, real estate, telecommunications, and digital platforms has supported overall economic performance. Indias digital transformation, driven by expanding internet access, digital payment systems, and innovation-led startups, has enhanced productivity, improved financial inclusion, and created new economic opportunities across sectors.

Manufacturing activity has shown improvement due to policy initiatives such as the Production Linked Incentive (PLI) schemes and the "Make in India" programme. These initiatives have encouraged domestic manufacturing, increased investment in strategic sectors, and strengthened Indias integration into global supply chains. The Survey emphasizes the importance of industrial expansion in sectors such as electronics, automobiles, pharmaceuticals, renewable energy, and semiconductors to support long-term economic competitiveness.

On the external front, the Survey acknowledges challenges arising from weaker global demand, trade disruptions, and geopolitical uncertainties. Export-oriented industries may face short-term pressures due to slower growth in major global economies. However, Indias growing services exports, resilient remittance inflows, and efforts to diversify export markets are expected to support the external sector. Continued reforms in logistics, infrastructure, and ease of doing business are also expected to strengthen Indias position in global value chains.

The Economic Survey emphasizes that long-term economic growth will depend on sustained investments in human capital, education, healthcare, technology, clean energy, and employment generation. Challenges such as unemployment, income inequality, climate risks, and skill gaps require continued policy attention to ensure inclusive and sustainable development.

Overall, the Economic Survey 2025 26 presents a positive outlook for the Indian economy. Supported by strong domestic fundamentals, infrastructure investment, digital advancement, and policy reforms, India is expected to maintain stable economic growth while navigating global uncertainties and emerging economic challenges.

Source: Ministry of Finance, Government of India Economic Survey 2025 26

Global Electrical Equipment Industry

The global electrical equipment industry is expected to witness steady growth in 2026, driven by accelerating electrification, rising investments in renewable energy infrastructure, expansion of data centers, industrial automation, and increasing demand for energy-efficient technologies. Recent industry reports released during April and May 2026 indicate that the sector is entering a new phase of structural growth supported by rapid increases in global electricity consumption and modernization of power infrastructure. According to recent industry analysis, global electricity demand continues to grow strongly due to urbanization, industrialization, electric vehicle adoption, digital infrastructure expansion, and the increasing use of artificial intelligence technologies.

A major driver of the industry in 2026 is the growing global investment in transmission and distribution infrastructure. Utilities and governments across developed and emerging economies are investing heavily in grid modernization, renewable integration, and electrification projects. Demand for transformers, switchgear, cables, power management systems, and medium-voltage equipment has increased significantly due to rising power consumption and renewable energy integration requirements. Industry reports suggest that global OEM revenues in electrification hardware could exceed USD 1 trillion by 2035, reflecting strong long-term demand across power infrastructure and industrial applications.

The rapid expansion of artificial intelligence and data centers has emerged as another major growth catalyst for the electrical equipment industry. Growing digitalization and cloud computing infrastructure are significantly increasing electricity demand, particularly in North America, Europe, and Asia-Pacific. Data centers are expected to account for an increasing share of electricity consumption by the end of the decade, creating substantial opportunities for manufacturers of transformers, switchgear, backup power systems, cooling equipment, and energy management technologies.

The renewable energy transition is also reshaping the industry landscape. Governments and corporations continue to invest in solar, wind, battery storage, and EV charging infrastructure, driving demand for advanced electrical equipment and grid connectivity solutions. Electrification of transport systems and industrial processes is increasing the need for efficient and reliable power equipment. At the same time, rising adoption of smart grids, automation technologies, and energy-efficient building systems is creating new opportunities for electrical equipment manufacturers.

Supply chain constraints and rising raw material prices remain key challenges for the industry. Copper prices have remained elevated and volatile during 2026 due to strong demand from renewable energy projects, electric vehicles, data centers, and power infrastructure investments. Supply shortages, trade policy uncertainty, and project delays have also increased cost pressures across the sector. Industry participants continue to face challenges related to labor shortages, logistics bottlenecks, and long equipment delivery timelines.

The industry is also witnessing significant consolidation and strategic investments. In May 2026, ABB announced a USD 200 million investment to expand medium-voltage equipment manufacturing capacity in Europe to address growing electricity demand and grid infrastructure requirements. Similarly, Hubbell announced a USD 3 billion acquisition of NSI Industries to strengthen its electrical solutions portfolio in sectors such as data centers, industrial infrastructure, and utility equipment. These developments reflect strong confidence in the long-term growth potential of the electrical equipment market.

Regionally, Asia-Pacific is expected to remain the fastest-growing market due to rapid industrialization, infrastructure expansion, urbanization, and renewable energy investments in countries such as China and India. North America and Europe are expected to witness strong demand driven by energy transition initiatives, grid modernization programs, electrification policies, and expansion of AI-driven digital infrastructure. Emerging economies are also increasing investments in electrification and power infrastructure to support economic growth and energy access.

Overall, the global electrical equipment industry outlook for 2026 remains positive despite short-term challenges related to supply chains, commodity prices, and geopolitical uncertainties. Structural trends such as electrification, renewable energy adoption, digital transformation, industrial automation, and rising global electricity demand are expected to support sustained long-term growth for the industry.

Source : McKinsey Electrification Equipment Trends to Watch in 2026 International Energy Agency (IEA) Electricity 2026 Report

Indian Electrical Equipment Industry

According to the JP Morgan report released in April 2026, the Indian electrical equipment industry is entering a multi-year growth cycle driven by the countrys accelerating energy transition, rapid expansion of renewable energy capacity, and rising investments in transmission and distribution infrastructure. The report highlights that Indias ambitious clean energy targets and increasing electricity demand are creating strong long-term opportunities for manufacturers of power equipment, particularly in the high-voltage (HV) equipment segment. As India continues to modernize its power infrastructure and integrate renewable energy into the grid, demand for transformers, switchgear, transmission equipment, cables, and grid management systems is expected to increase significantly.

The report emphasizes that Indias renewable energy expansion is a key structural driver for the industry. The country plans to add nearly 470 GW of solar and wind energy capacity over the next decade, requiring substantial investments in transmission networks and grid connectivity infrastructure. Large-scale renewable energy projects and transmission systems typically involve long execution timelines of three to five years, providing strong revenue visibility and sustained order inflows for electrical equipment manufacturers. This is expected to support long-term growth for domestic original equipment manufacturers (OEMs) operating in the power equipment sector.

The industry is also benefiting from increasing government focus on infrastructure development, electrification, and manufacturing expansion. Rising urbanization, industrialization, electric vehicle adoption, and digital infrastructure growth are contributing to higher electricity demand across the country. Investments in smart grids, data centers, railways, metro projects, and industrial corridors are further supporting demand for advanced electrical equipment and power management solutions. The report notes that Indias power equipment sector is currently witnessing a "decadal upcycle" as transmission infrastructure development accelerates alongside renewable energy deployment.

In addition, policy initiatives such as "Make in India," Production Linked Incentive (PLI) schemes, and localization efforts are encouraging domestic manufacturing and reducing dependence on imports. Indian electrical equipment companies are increasingly strengthening their manufacturing capabilities and technological competitiveness to cater to both domestic and export markets. The report also highlights that growing investments in clean energy, electrification, and digital infrastructure are expected to create long-term opportunities across the value chain of the electrical equipment industry.

However, the report identifies certain challenges facing the industry, including volatility in raw material prices, supply chain disruptions, project execution delays, and global geopolitical uncertainties. Rising prices of metals such as copper and aluminum could affect profit margins for manufacturers. Despite these challenges, the overall outlook for the Indian electrical equipment industry remains positive due to strong structural demand drivers, policy support, and increasing capital expenditure in the power and infrastructure sectors.

Overall, the JP Morgan report concludes that the Indian electrical equipment industry is well-positioned for sustained long-term growth, supported by the countrys energy transition, expanding renewable energy capacity, infrastructure modernization, and rising electricity demand. These factors are expected to drive continued investment and strong growth opportunities for electrical equipment manufacturers over the coming years.

Source : JP Morgan Report Renewable Surge Fuels Multi-Year Boom to Indias Power Equipment Industry (April 2026)

Switchgear Market

According to the report titled "India Switchgear Market Size, Share, Trends and Forecast 2026 2034" published by IMARC Group, the Indian switchgear market is poised for sustained growth on account of increasing investments in power infrastructure, rising industrialization, rapid urban development, and the growing demand for uninterrupted and reliable electricity supply. The report indicates that the market was valued at approximately USD 11.33 billion in 2025 and is projected to reach around USD 18.95 billion by 2034, registering a CAGR of 5.88% during the forecast period.

The growth of the switchgear industry in India is being significantly supported by various Government initiatives and infrastructure development programs, including the Smart Cities Mission, Make in India initiative, rural electrification projects, metro rail expansion, renewable energy integration, and modernization of transmission and distribution networks. The increasing focus on strengthening grid stability and reducing transmission losses has further accelerated the deployment of technologically advanced switchgear systems across utilities and industrial applications.

The report further highlights those rising investments in renewable energy projects, particularly solar and wind energy, are creating substantial demand for medium-voltage and high-voltage switchgear solutions to support efficient grid integration and power evacuation infrastructure. In addition, the expansion of commercial real estate, data centres, manufacturing facilities, railways, airports, and urban infrastructure projects is expected to contribute significantly to the demand for low-voltage and smart switchgear systems.

Technological advancements are also playing a crucial role in shaping the industry landscape. Increasing adoption of digital switchgear, gas-insulated switchgear (GIS), smart monitoring systems, and automation-enabled electrical infrastructure is improving operational efficiency, safety standards, predictive maintenance capabilities, and energy management across industrial and utility sectors. The transition towards energy-efficient and environmentally sustainable systems is expected to further strengthen market growth over the coming years.

Furthermore, the presence of established domestic and international manufacturers, coupled with capacity expansion initiatives and localization of manufacturing operations, is expected to enhance the competitiveness of the Indian switchgear market. Rising emphasis on domestic manufacturing, supply chain optimization, and export opportunities is likely to support long-term industry growth and position India as a key manufacturing hub for electrical equipment and switchgear solutions.

Source : India Switchgear Market Size, Share, Trends and Forecast 2026 2034" published by IMARC Group

Electrical Contacts and Contacts Materials Market-Overview

According to the "Electrical Contacts and Contact Materials Market Size, Share, Growth and Industry Analysis" report published by Precision Reports in April 2026, the global electrical contacts and contact materials market is expected to grow from approximately USD 4.48 billion in 2026 to around USD 5.99 billion by 2035, registering a CAGR of 3.29% during the forecast period. The report highlights that the market is witnessing sustained growth due to increasing electrification, industrial automation, expansion of power infrastructure, and rising adoption of electric vehicles and smart electrical systems.

The report further states that electrical contacts and contact materials are critical components used in switches, relays, circuit breakers, contactors, and power distribution systems to ensure efficient electrical conductivity, operational reliability, and enhanced safety. The market currently supports more than 85% of global electrical switching systems, with over 12 billion contact units produced annually for industrial, automotive, and consumer applications.

Silver-based contact materials continue to dominate the market with approximately 62% share owing to their superior electrical conductivity, oxidation resistance, and durability in high-performance applications. Copper-based materials account for nearly 28% of the market and are witnessing increased adoption due to their cost efficiency, high thermal conductivity, and suitability for medium and high-voltage applications. The report also notes increasing development of advanced silver alloys and nano-coated contact materials to improve wear resistance, operational lifespan, and corrosion protection.

The growth of renewable energy projects, electric vehicle infrastructure, industrial automation, smart grids, and modern power transmission systems is expected to significantly drive demand for advanced contact materials. Precision Reports further highlights that electric vehicle integration alone has contributed to nearly 51% growth in demand for high-performance contact materials used in battery systems, charging infrastructure, and power control modules.

Regionally, Asia-Pacific remains the dominant market with approximately 42% share, supported by rapid industrialization, expanding manufacturing activities, infrastructure development, and increasing investments in electrical equipment and automation technologies across countries such as China, India, Japan, and South Korea. The report also indicates growing emphasis on sustainable manufacturing, recycling technologies, and environmentally friendly contact materials in line with evolving regulatory and energy-efficiency standards.

Key Growth Drivers Electrical Contacts and Contact Materials

1. Expansion of power infrastructure and electrification

The continuous expansion of power generation, transmission, and distribution networks globally is a major driver for the market. Rapid urbanization, rural electrification programs, and modernization of aging electrical grids are increasing the installation of switchgear, relays, circuit breakers, and control systems. Since electrical contacts are essential components in all switching devices, the demand for reliable and durable contact materials is increasing significantly.

2. Rising industrial automation

The growing adoption of Industry 4.0, robotics, and automated manufacturing systems is boosting demand for high-performance electrical switching components. Automated machinery requires frequent and reliable switching operations, which increases wear on electrical contacts. This is driving the need for advanced contact materials with superior arc resistance, durability, and longer operational life.

3. Growth of electric vehicles (EVs)

The rapid expansion of the EV industry is creating strong demand for electrical contacts used in battery management systems, power relays, charging stations, and power control units. EV applications require components that can handle high current loads, frequent switching cycles, and high thermal stress, thereby increasing the need for advanced silver-based and copper-based contact materials.

4. Renewable energy integration and smart grids

The global shift toward renewable energy sources such as solar and wind power is increasing the complexity of power grids. These systems require advanced switching and protection equipment to manage variable power generation and ensure grid stability. Electrical contacts play a crucial role in ensuring safe and efficient power flow in smart grids, substations, and renewable energy systems.

Industry Restraining Factors

1. Volatility in silver, copper, and tungsten prices

The industry is highly dependent on precious and base metals such as silver, copper, and tungsten, which are subject to frequent global price fluctuations. These commodities are influenced by factors such as geopolitical tensions, mining output constraints, demand-supply imbalances, and currency fluctuations. Such volatility directly impacts production costs, profit margins, and long-term pricing stability for manufacturers of electrical contact materials, making cost forecasting and contract pricing challenging.

2. Supply chain disruptions

The report highlights that the global supply chain for critical raw materials and processed alloys remains vulnerable to disruptions. Factors such as geopolitical conflicts, trade restrictions, logistics bottlenecks, and concentration of mining activities in limited geographies can lead to delays in procurement and inconsistent material availability. This affects production schedules, increases lead times, and may result in higher inventory holding costs for manufacturers.

3. Manufacturing complexity

Electrical contact materials require highly specialized manufacturing processes involving precision metallurgy, alloy formulation, coating technologies, and strict quality control standards. The need for high durability, arc resistance, and consistent conductivity increases production complexity. Additionally, customization requirements across applications such as switchgear, automotive systems, and industrial automation further add to operational challenges and increase production costs.

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: "Electrical Contacts and Contact Materials Market Size, Share, Growth and Industry Analysis" report published by Precision Reports in April 2026

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, Power Transmission, electrical infrastructure industries, Automotive, Railway, Aerospace, Marine, Defence, Engineering, pharmaceuticals 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

Key Metric	2025-2026	2024-2025	% Change
Revenue	71,600.15	49,349.54	45.09
EBITDA	11,529.46	4,738.35	143.32
Net Profit	7,255.32	2,468.02	193.97
EPS	22.36	7.61	193.82

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

Key Metric	2025-2026	2024-2025	Variance	Reason for change
				(i.e. more than 25%)
Trade Receivable Turnover Ratio	5.77	6.43	(10.26)	-
(In time)
Inventory Turnover Ratio	3.41	3.98	(14.32)	-
(In time)
Interest Coverage Ratio	12.13	6.76	79.44	Due to increase in
(In time)				borrowings
Current Ratio	1.81	2.32	(21.98)	-
(In time)
Debt to Equity Ratio	0.64	0.34	88.24	Due to increase in
(In time)				borrowings
EBITDA Margin	16.10	9.60	67.70	Due to increase in
(In %)				Profit Before Tax
Net Profit Ratio	10.13	5.00	102.60	Due to increase in
(In %)				Profit After Tax

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

Key Metric		2025-26	2024-25	% change	Reason for change
Return on Net Worth	(In %)	29.55	11.76	151.28	to increase in Profit After Tax

Liquidity

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

Metric	Value
Operating Cash Flow	(6,417.81)
Capital Expenditure	1,510.13
Debt-to-Equity Ratio (x)	0.64

Risk Management

Risk	Description	Mitigation Strategy at MODISON
Commodity Price Volatility	The Company relies significantly on precious and industrial metals such as silver, copper, and tungsten, whose prices are influenced by global geopolitical developments, economic conditions, and demand-supply dynamics. Significant fluctuations in metal prices may adversely impact material costs and profitability.	- Entering into long-term supply contracts and price-sharing arrangements with key customers. - Strategic inventory management to capitalize on favorable market conditions. - Selective use of hedging instruments to mitigate short-term price volatility.
Supply Chain Disruptions	Disruptions in global logistics networks or shortages of critical raw materials, particularly specialty metals and alloys, may affect production schedules and increase procurement costs.	- Development of local vendor networks and periodic supply chain risk assessments. - Adoption of a multi-sourcing strategy to reduce dependency on individual suppliers. - Maintenance of strategic inventory levels for critical raw materials to ensure uninterrupted operations.
Technological Obsolescence	Rapid technological advancements, evolving customer requirements, and changing industry standards may reduce the competitiveness of existing products and manufacturing processes.	- Continuous investment in Research & Development focused on material innovation, product performance, and design enhancement. - Regular modernization of manufacturing equipment, including CNC machines and precision forming tools. - Close collaboration with OEM customers to anticipate and address emerging technical requirements.
Customer Concentration Risk	A significant portion of the Companys revenue is derived from a limited number of OEM customers. Any reduction in business from key customers could have an adverse impact on revenue and profitability.	- Expanding the customer base across geographies and industry segments. - Strengthening customer relationships through product customization, quality excellence, and responsive service. - Increasing focus on export markets to diversify revenue streams and reduce dependence on domestic OEMs.
Regulatory and Environmental Compliance	Increasing regulatory requirements relating to environmental protection, waste management, effluent treatment, and the handling of metals may expose the Company to compliance, operational, and reputational risks.	- Implementation of ESG-focused policies and sustainability initiatives. - Regular engagement with regulatory authorities and industry bodies. - Conducting periodic internal and third- party environmental audits. - Proactive monitoring of regulatory developments and timely compliance measures.
Financial	Accurate and timely financial reporting is	- Implementation of robust internal
Risk Reporting Risk	Description critical for maintaining stakeholder confidence, ensuring regulatory compliance, and supporting informed business decision-making. Inadequate controls or reporting processes may affect the reliability of financial information.	Mitigation Strategy at MODISON financial controls and governance mechanisms.
		Continuous enhancement and upgradation of ERP systems to strengthen reporting accuracy and efficiency.
		Periodic audits, reviews, and validation by internal and statutory auditors.
		Natural hedging through matching foreign currency inflows and outflows.
Foreign Exchange	With increasing exports and imports of raw materials, the Company is exposed to foreign exchange risks, particularly relating to the USD and EUR, which may impact profitability and cash flows.	Use of forward contracts for significant foreign currency exposures.
Fluctuation		Regular monitoring and assessment of foreign exchange positions and associated risks.
		Structured talent development, training, and succession planning programs.
Workforce Management	The Companys success depends on its ability to attract, retain, and develop skilled technical and managerial personnel, particularly in specialized metallurgy and engineering disciplines.	Employee engagement, recognition, and performance-linked incentive initiatives.
		Focus on fostering a safe, inclusive, and growth-oriented work environment.
	Growing dependence on digital platforms,	Deployment of advanced cybersecurity solutions, firewalls, and intrusion detection systems.
Cybersecurity and IT Risks	ERP systems, and information technology infrastructure exposes the Company to cybersecurity threats, data breaches, and operational disruptions.	Regular data backup procedures and disaster recovery planning.
		Employee awareness programs on cybersecurity best practices. Periodic IT security audits and system vulnerability assessments.

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 2026 27 and beyond)

The global and Indian markets for electrical contacts and contact materials are expected to witness sustained growth, supported by ongoing electrification, expansion of power infrastructure, renewable energy integration, industrial automation, and increasing adoption of electric vehicles. In this backdrop, the Companys strategic outlook for FY 2026 27 and beyond remains focused on strengthening its positioning in high-growth application areas and enhancing long-term value creation.

The Company aims to capitalize on the increasing demand for reliable and high-performance electrical switching components used across switchgear, control equipment, automotive systems, and industrial applications. With continuous modernization of transmission and distribution networks and rising investments in smart grid technologies, the demand for advanced contact materials with superior conductivity, durability, and arc resistance is expected to remain robust.

In line with industry trends highlighted in recent market studies, including the Precision Reports (April 2026), the Company recognizes that while the sector offers significant growth opportunities, it is also subject to challenges such as volatility in key raw material prices (notably silver, copper, and tungsten), supply chain uncertainties, and increasing manufacturing complexity. Accordingly, the Company intends to focus on strengthening procurement strategies, improving operational efficiencies, and optimizing cost structures to mitigate such risks.

Technological advancement will remain a key strategic priority. The Company plans to enhance its capabilities in advanced alloy development, precision engineering, and high-performance contact materials to cater to evolving customer requirements, particularly in EV infrastructure, renewable energy systems, and industrial automation applications. Emphasis will also be placed on developing sustainable and energy-efficient product solutions aligned with global environmental standards. Further, the Company intends to deepen customer relationships, expand its presence in domestic and export markets, and leverage opportunities arising from Government initiatives such as Make in India, infrastructure development programs, and the transition towards cleaner and smarter energy systems.

Overall, the Company remains confident that the long-term structural growth drivers of the industry, combined with its strategic initiatives, will support sustainable growth and enhanced competitiveness in the coming years.

Conclusion

The electrical contacts and contact materials industry is expected to remain on a sustained growth trajectory, driven by structural demand from power infrastructure expansion, industrial automation, renewable energy integration, and the rapid growth of electric mobility. These long-term demand drivers are expected to create significant opportunities for advanced, high-performance, and durable contact material solutions.

At the same time, the industry continues to face certain challenges, including volatility in key raw material prices such as silver, copper, and tungsten, supply chain uncertainties, and increasing manufacturing complexity. However, these challenges are expected to be mitigated through improved procurement strategies, technological advancement, and operational efficiencies across the value chain.

Overall, the industry outlook remains positive, supported by strong macroeconomic and sectoral trends. With continued focus on innovation, quality enhancement, and customer-centric solutions, the Company is well positioned to capitalize on emerging opportunities and deliver sustainable growth in the medium to long term.

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.