Oriental Rail Infrastructure Ltd Management Discussions

1. ECONOMIC REVIEW

1.1 GLOBAL

The global economy in FY 2024 25 showed signs of moderate recovery, despite geopolitical uncertainties, fluctuating commodity prices, and high-interest rate regimes in developed markets. The IMF estimates global

GDP growth at around 3.1%, driven primarily by emerging markets and Asia-Pacific economies. Supply began stabilizing, and inflationary pressures gradually eased in the second half of the year.

However, challenges remain:

Ongoing geopolitical tensions, particularly in Eastern Europe and the Middle East

Volatility in raw material and energy prices

Disruption in maritime logistics and trade flows

These global factors continue to impact industrial production and capital goods sectors worldwide, including heavy engineering and transportation infrastructure.

1.2 INDIAN ECONOMY

India remained one of the worlds fastest-growing major economies, with a GDP growth rate of approximately 6.8% in FY 2024 25 (as per provisional government estimates).

The governments sustained capital expenditure, particularly in infrastructure, railways, and logistics, has boosted demand across allied industries.

Key indicators:

Inflation was largely under control, with the RBI maintaining a calibrated stance on interest rates

Industrial production and PMI indices showed steady growth

Railways received record budgetary allocations, exceeding 2.5 lakh crore

Private investment in logistics, warehousing, and freight corridors gained momentum

The Indian Railways ongoing modernization and electrification programs, the expansion of Vande Bharat and Dedicated Freight Corridors, and the focus on Make in India have created a fertile ground for rail equipment manufacturers.

1.3 OUTLOOK FOR FY 2025–26

The Company remains optimistic about the medium- to long-term prospects:

Strong order pipeline from Indian Railways

chains New product development aligned with high-speed and smart train requirements

Focus on export diversification and private sector collaborations

Strengthening ESG practices for long-term sustainability

With a clear vision, robust execution capability, and a responsible growth model, ORIL is well-positioned to contribute to Indias rail transformation and deliver value to all stakeholders.

As the rail industry continues to move toward automation and data-driven decision-making, Oriental Foundry Private Limited (OFPL) - Wholly Owned Subsidiary is proactively positioning itself at the forefront of this transformation. A key development in this direction is our recently signed five-year strategic partnership with HUM

Industrial Technology, Inc., a U.S.-based leader in rail monitoring solutions.

Through this collaboration, OFPL will deploy Smart Wagon Monitoring Systems (SWMS) on its wagons, enabling real-time operational analytics, predictive maintenance, and improved fleet visibility. The integration of advanced sensor technology and remote diagnostics not only supports Indian Railways modernization efforts but also enhances OFPLs ability to offer intelligent, connected rolling stock for global markets.

This partnership is expected to significantly strengthen our competitive position in both domestic and international freight wagon segments while creating new revenue opportunities through digital services and smart asset management solutions.

Sectoral Developments Favoring ORIL-

Indian Railways introduced new tenders for freight wagons, passenger coaches, and high-speed components

Public-Private Partnership (PPP) initiatives in rail terminals and rolling stock leasing increased

Focus on lightweight, energy-efficient, fire-retardant materials in coach interiors grew

FDI liberalization continued to attract global OEMs and collaborators into Indias rail sector

Export opportunities rose as neighboring and African nations sought Indian rolling stock In this macroeconomic context, Oriental Rail Infrastructure Limited has continued to align its business strategy with national priorities and global standards, ensuring sustainable and inclusive growth.

RAILWAY INDUSTRY

Indian Railways – Backbone of Infrastructure Development

Indian Railways (IR), the fourth-largest rail network in the world by size, continues to play a crucial role in the economic, industrial, and social development of the country. It is not only a primary mode of transport for passengers and freight but also a significant and infrastructure builder.

Key Statistics (FY 2024–25 Estimates):

~8.5 billion passengers transported annually

Over 1.5 billion tonnes of freight carried

Network spans 68,000+ km, with ongoing electrification and modernization

100% FDI allowed under the automatic route in key rail infrastructure areas

Indian Railways received a record budgetary allocation of over 2.5 lakh crore The sector is undergoing a massive transformation, driven by:

Investments in high-speed rail corridors like the

Mumbai-Ahmedabad bullet train

Expansion of the Vande Bharat program (semi- high-speed EMU trains)

Development of Dedicated Freight Corridors

.

(DFCs) to boost cargo capacity

Upgradation of coach interiors, Leather (Rexene) safety systems, and passenger amenities

Wagon and Coach Manufacturing: Rising Demand

The growing emphasis on efficient logistics, last-mile connectivity, and green freight is fueling demand for:

Specialized wagons (e.g., container flats, cement carriers, steel coil wagons)

Modern passenger coaches with modular seating, low weight, and smart amenities

The private sector is increasingly involved through:

Wagon investment schemes

Rail terminals under PPP

Private train operations (under new policy models)

The Vande Bharat project and station redevelopment programs are also triggering large-scale requirements for seating systems, coach interior components, and lightweight materials—a segment where companies like ORIL are strategically positioned.

INDUSTRY STRUCTURE & DEVELOPMENTS

Oriental Rail Infrastructure Limited (Formerly known as Oriental Veneer Products limited) (‘ORIL), a 34-year-old organization, is one of the few companies in India that is engaged in the manufacturing and supply of several diversifiedrailway products/items for Indian Railways and other related industries. ORIL has played a significant role in infrastructure development of Indian Railways employer by investing in the modernization of manufacturing of several diversifiedrailway products/items and generate more revenue. Over the years, ORIL has developed a very strong relationship with the railways. In fact, the Company is a Preferred Part I Vendor to the Indian Railways. All the products developed by ORIL for Indian Railways are approved by the Research Designs Standards Organisation

(RDSO) which is the sole vendor approving body for the Railways. The products are also RITES certified, which is the sole inspecting authority for ensuring quality and clearance of all products supplied to Indian Railways. Being the trusted supplier of the Indian Railways, we are supporting with our cutting-edge, technology-driven products through modernization efforts. Our world-class research and design facility, and collaborations with leading technology providers aid us in creating a niche for ourselves in providing safe and reliable products.

The Company manufactures several products consumed not just by the Indian Railways but many other industries as well such as Seat & Berth, Densified Thermal Bonded Block (DTBB), Compreg Board & Allied Products, ORVIN, Recorn, Coated Upholstery Fabric, Furniture & Parts, floor PlywoodandPhenolicResin&Hardener,Rubber

The Company has modernized Artificial plant and it will expand the capacity of production from

24 Lac meter to 48 Lac meter per annum. It will upgrade the existing products which will help the Company to capture the consumer market, automobile sector and export globally.

The Company is focused in invest in a new manufacturing facility and on expanding production capacities at existing plants.

ORIL are also focused on developing new products and innovating and upgrading its products.

With advanced Technology, and with great research, we are also focused to expand the production of Silicon Foam Blocks which is used as a cushioning material for manufacturing Seat and Berths specialized for Railway coaches.

ORIL & its subsidiary OFPL has emerged as a Total Rail Solution provider, equipped with the latest products & technologies.

STRATEGIC INITIATIVES AND RECENT DEVELOPMENTS

Oriental Rail Infrastructure Limited (ORIL) and its subsidiary, Oriental Foundry Private Limited (OFPL), have taken major strides in alignment with Indian Railways modernization roadmap and global technology integration. Some of the key initiatives undertaken in FY

2024 25 include:

Formal entry into the prestigious "Vande Bharat" segment: ORIL has secured its first

42.89 crore from Rail Coach Factory (RCF), Kapurthala, for the supply of seating systems and interiorsforVandeBharattrainsets,furtherreinforcing its presence in the high-speed rail segment.

Launch of the UNI Wagon Russia initiative and commencement of the Specialized Wagon project, expanding the companys capabilities in high-utility freight solutions and unlocking export potential in Eastern Europe and beyond.

Technology-forward transformation through the introduction of Smart Wagon Monitoring Systems (SWMS) in collaboration with HUM Industrial Technology Inc., USA. These systems leverage real-time sensor data for predictive maintenance, fleet optimization, and remote diagnostics ushering in a new era of connected freight operations.

The RDSO and Indian Railways have formally approved the installation of this advanced monitoring technology, validating ORILs in novation leadership in the Indian railway ecosystem. The technology is now compliant with Indian Railway operational protocols and is expected to accelerate digital adoption in wagon performance management.

A major modernization ts, enabling: flee of the foundry facility is currently underway to enhance production scale and quality. This strategic move is aimed at supporting the increasing demand for advanced wagons and components, particularly for upcoming rail infrastructure and electrification projects.

These strategic initiatives are aimed at strengthening ORILs competitive positioning in both domestic and global railway markets, enhancing product value, and expanding digital rail infrastructure capabilities.

SUBSIDIARY

Oriental Foundry Private Limited (OFPL)

The Wholly owned Subsidiary of the Company i.e. OFPL is into manufacturing of bogies, couplers and Wagons.

OFPL has acquired approximately 27 acres of industrial land at Lakadiya, Gujarat and has set up second plant to assist your Company in expanding its footprint in the new segments of Heavy Engineering of Rolling Stock i.e. Wagon used by Indian Railways and many other Industries. OFPL has set up two new manufacturing plants: Bogie

Spring plant in Kutch, Gujrat and Bogie and Coupler manufacturing plant in Chopadava. Company has further expanded a manufacturing capacity for Wagons at its Plant at Lakadiya, Gujrat. New Bogie Spring plant manufactures spring for a Bogie and its yearly capacity is 2,80,800 Nos. order Our new Bogie and Coupler plant will result in double the worth capacity of manufacturing "Bogie" and "Coupler" and will cater the demand of Indian Railways.

The Capacity of Wagon plant enhanced the existing capacity of production of up to "2,400 Wagons" per year. This capacity expansion provided significant to our Foundry section which helps to curb the gap of short supply of Wagons to Indian Railways.

Revenue of OFPL in FY 2024-25 is 45,822.84 Lakhs and Net Profit is 1,892.70 respectively.

During the year, OFPL, a Wholly Owned Subsidiary of the

Company has received RDSO approval for enhancement of its manufacturing capacity of Wagons up to 2400

Wagons per year.

During the year, Oriental Foundry Private Limited (OFPL) entered into a five-year strategic partnership with Hum Industrial Technology, Inc., a leading U.S.-based provider of real-time rail monitoring systems.

This collaboration marks a significant digital transformation of wagon operations in the Indian and international rail freight ecosystem.

Under this agreement, OFPL will deploy

Smart Wagon Monitoring Systems (SWMS) across select

Real-time tracking of wagon performance and location.

Predictive maintenance analytics through vibration, temperature, and pressure sensors.

Enhanced operational safety and downtime reduction through continuous remote diagnostics.

Seamless integration with Indian Railways freight operation systems.

This initiative aligns with OFPLs long-term vision to become a pioneer in smart rolling stock solutions and reinforces our commitment to delivering technologically advanced, efficient, and future-ready rail infrastructure components.

The partnership is expected to open new opportunities in the IoT-enabled rolling stock market and strengthen OFPLs position in offering high-performance, digitally intelligent wagons to domestic and export markets.

PRODUCT-WISE PERFORMANCE:

The company manufactures several products consumed not just by the Indian Railways but many other industries as well such as Seat & Berth, Recorn, Compreg Board & Articles thereof, Furniture & Parts, Coated

Upholstery Fabric, Plywood, Phenolic Resin & Hardner, Silicon Foam, etc.

Railway Seat & Berth

The turnover from Seat & Berth for the FY25 stands at 113.91 crores (the figure excludes GST).

Our Company has a great opportunity to get an orders from

Indian Railways as Government is focused on Developing Indian Railways.

The Indian railway system is one of the largest in the world, with a total route length of over 68,000 km and around

14,000 trains running daily, carrying millions of passengers and freight across the country. The railway network is operated by the Indian Railways, a government-owned enterprise that is one of the largest employers in the country. This represents a significant completion from the previous year, nearly doubling the amount of track constructed. The increased investment in infrastructure development during this period likely contributed to this accomplishment.

Upcoming new coaches in future will increase the requirement of Seat & Berth which will double the supply.

ORIL enjoy over 30% market share in seats & berths.

Other Products

The turnover from Recorn, Compreg Board & Articles thereof, Furniture & Parts, Coated Upholstery Fabric,

Plywood, Phenolic Resin & Hardner, Silicon Foam, etc. is

~37.79 crores (the figure excludes GST).

Product-wise performance Detail of Products sold (Net)	Products-wise revenue for the FY 2024-25
	( in lakhs)
Seat & Berth	11,391.12
Recron	135.21
Compreg Board & Articles thereof	180.34
Furniture & Parts	59.61
Coated Upholstery Fabric	1,952.41
Plywood	272.29
Phenolic Resin & Hardner	765.34
PU Foam	285.73
Sales Others	127.72
Total	15,169.31

Note: The figure

RESEARCH AND DEVELOPMENT

The Company recognizes Research and Development as a critical driver of innovation, quality improvement, and cost optimization. Our R&D efforts are focused on product innovation, material optimization, and advanced manufacturing techniques to cater to evolving customer needs in the railway rolling stock industry.

Objectives of R&D:

To enhance passenger comfort and safety through ergonomic design of seats and berths.

To develop lightweight and durable materials for wagons and interiors.

To comply with and exceed the latest Indian Railways and international safety standards.

To improve product lifecycle through modular designs and ease of maintenance.

To reduce manufacturing costs through process innovations and material substitutions. increase in track

OPPORTUNITIES

Oriental Rail Infrastructure Limited is well-placed to capitalize on:

Increased government spending on wagons, coaches, and Vande Bharat trainsets

Private sector participation in rail freight and coach leasing

Growth in metro rail and regional rapid transit systems (RRTS)

Export of wagons and interiors to Africa, Middle East, and Southeast Asia

New technological applications through partnerships

(e.g., Hum Industrial for smart wagons)

Strong demand from Indian Railways under

"Make in India"

High growth in private freight operators and logistics hubs

Urban rail and metro projects driving need for lightweight, ergonomic seating

Governments push for sustainable and smart railways

Export potential for coach components to Africa, Middle East, and Southeast Asia

Strategic Strengths:

Decades of experience in rail engineering

Vertically integrated manufacturing capabilities

Long-standing relationships with government clients

Flexibility to cater to both standard and customized rolling stock needs

EMERGING THREATS

1. Intensifying Competition from Global Players

With Indias 100% FDI policy in railways, global

OEMs may enter the domestic market directly or via JVs, intensifying competition in wagon and coach manufacturing.

Response: ORIL focuses on localization, cost competitiveness, and customer relationships to maintain an edge.

2. Supply Chain Disruptions

Global shipping delays, shortages of imported components, or geopolitical risks (e.g., raw materials from China, Europe) could hamper production cycles.

Response: Dual sourcing, inventory planning, and local vendor development programs are being scaled.

3. Labour Availability and Skill Shortages

Shortage of skilled welders, machinists, and quality inspectors may affect productivity as volumes grow.

Response: In-house training centers and technical partnerships with ITIs have been initiated.

4. Delay in Metro/High-Speed Rail Rollouts

Execution delays in large government infrastructure projects (e.g., Vande Bharat extensions, DFCs) can affect projected order inflows.

Response: Diversifying customer base and ramping up private sector freight solutions.

5. Cybersecurity and Data Privacy Risks

As digital tools, ERP systems, and remote diagnostics expand, the threat of cyberattacks grows.

Response: Cyber risk assessments, firewall upgrades, and employee training are underway.

By actively identifying these threats and integrating proactive mitigation plans, ORIL strives to protect business continuity, stakeholder value, and long-term sustainability.

RISK AND CONCERNS

While Oriental Rail Infrastructure Limited (ORIL) continues to operate from a position of strength, certain external risks and emerging threats could potentially impact future performance. The Company remains vigilant and has instituted frameworks to monitor and mitigate these proactively.

Raw Material Price Volatility	Steel and aluminium prices can fluctuate sharply, impacting margins	Long-term sourcing contracts, vendor diversification, price hedging
Project Execution Delays	Risk of delayed delivery due to supply chain, approvals, or labor constraints	Agile project management, buffer scheduling, cross-trained workforce
Regulatory and Policy Changes	Changes in railway procurement norms, ESG rules, or taxation policies	Dedicated regulatory affairs team, compliance framework
Overdependence on Government Orders	Excessive reliance on Indian Railways tenders	Diversification through private freight, exports, and metro projects

INTERNAL CONTROL SYSTEMS

ORIL has robust internal controls in place, ensuring:

Accurate financial reporting

Compliance with applicable laws and standards

Risk management and fraud prevention

Regular internal audits and Board-level oversight These systems are periodically reviewed and enhanced by the Audit Committee and senior management.

FINANCIAL PERFORMANCE

Standalone

The Companys Standalone revenue from operations for FY 2024-25 was 15,813.27 Lakhs, compared to

17,381.59 Lakhs in the previous year. The Companys profit before exceptional items and tax on a standalone basis was 1,440.85 Lakhs during the year compared to 1,618.09 Lakhs in the previous year. The Company earned a net profit of 1,028.89 Lakhs during the year compared to 1,201.05 Lakhs in the previous year.

Consolidated

The Companys consolidated revenue from operations for FY 2024 - 25 was 60,819.38 Lakhs compared to 52,893.22 Lakhs in the previous year. The Companys profit before exceptional items and tax on a consolidated basis was before exceptional items and tax on a consolidated basis was 4,440.17 Lakhs during the year compared to 3,941.59 Lakhs in the previous year. The Company earned a net profit items and tax on a consolidated basis was 2,921.59 Lakhs during the year compared to 3,000.87 Lakhs in the previous year.

KEY FINANCIAL RATIOS

Indicators	Standalone		Consolidated
	FY 2024-25	FY 2023-24	FY 2024-25	FY 2023-24
Current Ratio	1.87	3.74	1.88	2.07
Debt-Equity Ratio	0.19	0.21	0.81	1.02
Debt Service Coverage	1.94	1.03	1.79	1.47
Ratio
Return on Equity (ROE)	0.04	0.07	0.08	0.10
Trade Receivables	2.46	3.32	0.98	4.68
Turnover Ratio
Trade Payables	4.10	4.99	3.50	3.66
Turnover Ratio
Inventory Ratio	5.44	6.63	0.64	0.68
Net Capital Turnover	1.95	0.92	2.35	2.05
Ratio
Net Profit Ratio	0.07	0.07	0.05	0.06
Return on Capital	0.06	0.07	0.10	0.10
Employed (ROCE)

HUMAN RELATIONS

Focus on workforce development through technical training and upskilling

Strong industrial relations across all units

Safety audits, regular drills, and zero-tolerance safety policy implemented

Employee welfare programs and performance recognition initiatives The company had a total headcount of 188 as of

March 31, 2025.

INVESTOR RELATIONS

At Oriental Rail Infrastructure Limited, we recognize that transparent, timely, and effective communication with our investors and stakeholders is fundamental to building trust and sustaining long-term partnerships. Our Investor

Relations (IR) function is dedicated to fostering open dialogue, providing accurate information, and responding proactively to investor needs.

Key Objectives of Our Investor Relations:

To maintain transparent disclosure of financial and operational performance in accordance with regulatory guidelines (SEBI, Stock Exchanges).

To provide insights into company strategy, industry trends, and growth prospects to aid investor decision-making.

before exceptional To facilitate effective two-way communication between management, shareholders and potential investors.

To build and maintain investor through consistent and ethical corporate governance practices.

Engagement Channels

Annual General Meetings (AGM): Comprehensive presentations and detailed disclosures to shareholders.

Investor Presentations

Digital Platforms

Maintaining a dedicated Investor Relations section on our corporate website (www.orientalrail.com/), providing financial reports, regulatory and contact details. Directors, shareholding pattern, quarterly reports, financial results, annual reports, press releases, details of unpaid/unclaimed dividends and various policies.

Commitment to Governance and Compliance

Strict adherence to SEBI (LODR) regulations and timely disclosure of material events.

Robust internal controls and audit processes ensuring accuracy and reliability of reported information.

CAUTIONARY STATEMENT

Statements in this Management Discussion and

Analysis Report describing the Companys objectives, projections, estimates, expectations, or predictions may be "forward-looking statements" within the meaning of applicable laws and regulations. These statements are based on certain assumptions and expectations of future events.

Actual results may differ materially from those expressed or implied in such forward-looking statements due to a variety of factors, including but not limited to:

Changes in government policies and regulations relating to the railway sector.

Fluctuations in raw material prices, especially metals and composites.

Technological obsolescence or delays in adoption of advanced manufacturing techniques.

Economic slowdown or shifts in infrastructure investment by Indian Railways or global clients.

Currency fluctuations and interest rate volatility.

Labour disruptions, supply chain constraints, or unforeseen operational challenges.

The Company assumes no responsibility to publicly amend, modify, or revise any forward-looking statements on the basis of subsequent developments, information, or events. Readers are advised to exercise their own judgment before making any investment decisions.