Pitti Engineering Ltd Management Discussions

Global Economy

The International Monetary Funds April 2025 World Economic Outlook reported that global GDP grew by 3.3% in 2024, surpassing expectations despite tight monetary conditions and ongoing geopolitical uncertainty. Advanced economies benefitted from resilient labour markets, a recovery in real wages, and sustained demand for services, while emerging and developing economies continued to drive global growth.

The year also saw a shift from crisis management to a phase of recovery and rebalancing. The United States stood out among advanced economies, with a projected 2.8% expansion fuelled by

strong consumer spending and business investment. However, the introduction of new U.S. tariffs during the period added a layer of uncertainty to the global trade environment, contributing to cautious sentiment in some markets.

India and China remained key contributors to global momentum, with growth estimates of 6.5% and 5.0% respectively. Meanwhile, a notable bright spot was the easing of inflationary pressures worldwide. Tighter monetary policy, lower energy prices, and stabilising food supplies all played a role in this improvement. Headline inflation in advanced economies was projected to decline from 4.6% in 2023 to 2.6% in 2024, while emerging markets experienced a moderation from 8.0% to 7.7%. Looking ahead, inflation in advanced economies was expected to stabilise around 2.5% in 2025, with emerging and developing economies seeing a further decrease to 5.5%. Nevertheless, the global policy environment is shifting towards balance, with measured policy easing expected as inflation continues to moderate. Central banks across key regions are pivoting towards accommodative policies, in helping improve credit availability and support investment sentiment over the medium term.

Global GDP Growth Projections

Region/Economy	2024 (%) P	2025 (%) P	2026 (%) E
World	3.3	2.8	3.0
Advanced Economies	1.8	1.4	1.5
USA	2.8	1.8	1.7
Euro Area	(0.2)	0.0	0.9
Japan	0.1	0.6	0.6
United Kingdom	1.1	1.1	1.4
Emerging & Developing Economies	4.3	3.7	3.9
China	5.0	4.0	4.0
India	6.5	6.2	6.3
Russia	4.1	1.5	0.9
Brazil	3.4	2.0	2.0
Sub-Saharan Africa	4.0	3.8	4.2
Middle East & Central Asia	2.4	3.0	3.5

(Source: https://www.imf.org/en/Publications/WEO/lssues/2025/04/22/world-economic-outlook-april-2025 )

Indian Economy

In 2024-25, Indias economy has not only demonstrated remarkable resilience but has also cemented its status as a dynamic global powerhouse by overtaking Japan to become the worlds fourth-largest economy by nominal GDP. The real GDP growth rate is expected to grow at 6.2 % for 2024-25 and increase slightly above by 6.3% for 2025-26. This growth signals the economys underlying strength, fuelled by a combination of strong industrial output, steady rural demand, and proactive government expenditure, navigating through the challenges posed by global trade disruptions and tariff tensions.

Indian Economy GDP Growth Rate (in %)

\u2022	\u2022	\u2022
2025-26 (E)	2024-25 (E)	2023-24
	\u2022
2022-23	2021-22	2020-21	E= Estimated

The inflation trajectory has been encouraging, with headline retail inflation easing to an average of 4.9 % in the first three quarters, down from 5.4 % in the previous fiscal year. Prudent monetary policy by the Reserve Bank of India and favourable supply-side improvements, are further helping maintain price stability without compromising growth momentum.

Agriculture sector is also expected to see a 3.5% growth in 2024-25, supported by favourable monsoon conditions, which have boosted demand for essential and discretionary goods alike. Indias manufacturing sector remains a cornerstone of the economic landscape. The governments strategic initiatives, such as Make in India and Production Linked Incentives (PLI), continue to invigorate domestic production capacities and technological advancement, driving self-reliance and competitiveness. The implementation of PLI schemes across 14 sectors, including electronics, pharmaceuticals, and automobiles has begun to show early signs of success, with approved investments of over 2.8 lakh crores in 2024-25.

Meanwhile, the electrical and renewable energy sectors are witnessing unprecedented growth, propelled by decisive policy incentives and surging domestic demand. Recognising their importance, the Union Budget 2025-26 introduced measures such as increased investment and turnover limits, enhanced credit access, and targeted support for first-time entrepreneurs, ensuring MSMEs remain at the forefront of Indias industrial growth.

The central governments infrastructure push continued to play a key role in supporting economic activity. Capital expenditure allocations in the Union Budget 2025-26 reached 11.21 lakh crores, or about 3.4% of GDP, reflecting the governments continued emphasis on infrastructure-led growth. Investment continues in roads, railways, green energy, and logistics, supporting both employment and productivity.

The transportation and railway networks are undergoing sweeping upgrades through sustained government investments, fostering improved connectivity, logistics efficiency, and regional integration. The broader industrial ecosystem, including emerging segments like data centres and technology-driven industries, continues to attract significant domestic and foreign investments, contributing meaningfully to job creation and economic diversification.

Outlook

Looking ahead, Indias economic outlook remains one of confident optimism and strategic resilience. This growth momentum is expected to be propelled by vibrant domestic consumption, especially within rural areas, alongside steady urban demand and continued expansion of infrastructure and industrial capabilities. Key sectors, including manufacturing, electricals, renewables, power, transportation, and railways, are well-positioned to benefit from supportive government policies and sustained capital investments. While global uncertainties such as trade tensions, geopolitical challenges, and financial market volatility remain pertinent, Indias solid macroeconomic fundamentals and forward-looking reforms provide a robust buffer. With a vigilant eye on evolving global and domestic challenges, India is strategically poised to sustain growth that is inclusive, resilient, and aligned with its longterm development ambitions.

(Sources: https://timesofindia.indiatimes.com/etimes/trending/india-becomes- worids-4th-iargest-economy-see-the-fuii-top-10-iist/photostory/121410188. cms?picid= 121410219 ; https://www.pib.gov.in/PressReieaseIframePage. aspx?PRID = 2098353 ; https://www.pib.gov.in/PressReieasePage. aspx?PRID=2086811 , https:/www. thehindubusinessiine. com/economy/agri-business/ indian-agricuiture-sector-gro wth-estimated-at-3-35-in-fy26-says-shivraj-singh- chouhan/articie69593513.ece)

Industry Overview

1. Rotating Electrical Equipment Industry

Motor Laminations

Motor laminations are foundational components in the construction of rotating electrical machines, primarily motors and generators. Laminations are integral to forming the stator and rotor cores and are widely used across electric motors, transformers, and alternators. They are formed by stacking thin layers of electrical-grade silicon steel, insulated from one another, to minimise eddy current losses during operation. These laminations enhance magnetic efficiency and improve energy utilisation in rotating machines.

The demand for motor laminations is directly tied to growth in segments such as electric vehicles, industrial automation, household appliances, renewable energy systems, and infrastructure development. With electrification accelerating globally, the relevance of motor laminations continues to grow across geographies and applications. This growth is backed by policy support, sustainability goals, and the push for higher efficiency equipment.

Key Component Assemblies

Die-Cast Rotors: Essential for induction motors, these rotors combine stacked laminations with embedded aluminium or copper conductors through die-casting. They help generate rotational torque via electromagnetic induction.

Machined Shafts and End Shields: These provide structural stability and accurate positioning of rotating assemblies. Shafts transfer torque, while end shields hold bearings and support enclosure integrity.

Stator-Rotor Assemblies: These are pre-stacked, aligned, and sometimes insulated lamination sets ready for direct integration. They help manufacturers reduce assembly time and ensure consistent build quality.

Complete Motor Frames and Casings: Made from cast or fabricated structures, these frames provide protection, thermal management, and mounting capability. They house and support all internal motor components.

Types of Motors

Permanent Magnet Synchronous Motors (PMSMs):

PMSMs use embedded permanent magnets and require high- efficiency laminations with precise magnetic properties. They are widely used in EVs, robotics, industrial drives, and HVAC compressors due to superior torque and energy efficiency.

Induction Motors: The most common motor type in industrial use, built with squirrel-cage or wound rotor configurations. These rely on high-quality laminations and are used in pumps, HVAC systems, conveyors, and appliances.

Brushless DC Motors (BLDCs): These electronically commutated motors are preferred for compact, high-efficiency operations. BLDCs are found in electric two-wheelers, fans, air conditioners, and power tools, where low core losses at high frequencies are crucial.

Other Motor Types: This category includes stepper, universal, switched reluctance, and hysteresis motors. These are applied in automation systems, medical devices, consumer electronics, and industrial instrumentation requiring precision control.

Key Industry Trends and Influencing Factors

Industrial Electrification and Energy Efficiency:

Conventional motors are increasingly being replaced with high- efficiency alternatives (IE3/IE4/IE5) due to a shift towards energy-efficient operations. Their popularity is due to the growing adoption of variable frequency drives (VFDs), and intelligent motor management systems. These are aimed at reducing lifecycle costs and enhancing operational visibility.

Renewable Energy Integration and Grid Modernisation:

The growing adoption of clean energy, particularly wind, solar, and hybrid storage solutions, is driving demand for large-scale generators, alternators and power conditioning systems. This shift is also reinforcing the need for highly efficient and reliable rotating equipment across utility-scale installations.

Growth in Transportation and Mobility Infrastructure:

The demand for specialised rotating electrical machinery is being driven by the electrification of railways, expansion of metro networks, and rising deployment of electric vehicle (EV) infrastructure. Applications span traction motors, auxiliary drives, HVAC systems, and power converters used across rolling stock, airports, ports, and logistics hubs.

Recovery in Oil & Gas and Process Industries: Improving capacity utilisation and capital investments in oil & gas, LNG, and downstream sectors are leading to increased deployment of compressors, turbines, and electric motor-driven systems for production, transportation, and processing facilities.

Technological Advancements in Motor Design:

Technological innovations such as the development of ultraefficient motor drives and the integration of IoT (Internet of Things) capabilities into motor systems are significant demand drivers. These advancements enable precise control and monitoring of motor operations, leading to better performance, reduced downtime, and low maintenance costs.

Local Manufacturing and Supply Chain Realignment: India is emerging as a competitive hub for engineering and production of rotating equipment aided by its skilled workforce and maturing supplier ecosystem. Manufacturers are increasingly turning towards localised production, vendor consolidation, and backward integration in response to global supply disruptions and policy alterations.

Government Support and Policy Enablers

The industry continues to benefit from strong regulatory and policy tailwinds:

Mandatory Energy Efficiency Regulations: Enforced IE3/ IE4 motor standards by agencies such as the Bureau of Energy Efficiency (BEE) are mandating the transition towards energy- efficient systems.

Infrastructure and Transport Initiatives: Programmes like PM Gati Shakti, railway electrification, and urban metro expansion are unlocking large-scale demand for traction and rotating equipment.

Renewable Energy Policies: Initiatives under the National Green Hydrogen Mission are accelerating investments in grid infrastructure and energy systems, which rely heavily on rotating equipment. These are aligned with the national targets such as Indias 500 GW non-fossil energy goal by 2030.

Incentives for Local Manufacturing: The Production Linked Incentive (PLI) schemes, and Make in India initiatives are fostering domestic manufacturing of motors, alternators, and electrical sub-assemblies, thereby strengthening the value chain.

Growth Outlook

India is emerging as a key manufacturing and sourcing hub. The domestic electrical machinery sector is seeing strong momentum on account of the Government of Indias focus on the Make in India initiative, Production- Linked Incentive (PLI) schemes, and infrastructure investments. The Indian motor lamination and rotating equipment component segment is also being driven by localised production of traction motors, wind turbine generators, EV motors, and irrigation pumps. Also, as global OEMs diversify their supply chains, India is gaining strategic importance in the global supply map. This is enabled by its competitive cost structure, engineering capabilities, and growing domestic demand.

2. Machined Components Industry

The global machined components industry is experiencing robust growth, driven by increasing demand for precision engineering across automotive, aerospace, medical, and industrial applications. This surge is supported by the rising adoption of advanced manufacturing technologies and the integration of Industry 4.0. It is further driven by the shift towards lightweight, high-performance components, especially in electric vehicles and next-generation aircraft. The Asia-Pacific region dominates the global market, with China, Japan, South Korea, and India emerging as key manufacturing hubs. Notably, the sector is witnessing increasing digitisation through the use of smart sensors, predictive maintenance systems, and digital twins. On the other hand, energy-efficient machining processes and hybrid additive-subtractive technologies are gaining traction due to increasing emphasis on the cause of sustainability.

The machined components industry in India stands as a vital pillar of the countrys manufacturing ecosystem, significantly contributing to industrial output, economic growth, and technological advancement. The market is growing steadily, driven by expanding manufacturing activity, localisation of supply chains, and rising demand for precision-engineered parts. Sectors such as automotive, aerospace, and industrial machinery are investing in technological upgrades. Concurrently, digital adoption and improved material capabilities are redefining production standards and supplier competitiveness across the value chain.

Key Growth Drivers and Industry Trends

In the fiscal year 2024-25, the machined components market is experiencing robust growth propelled by several converging factors:

Rising Demand for Precision and Quality: Increasing industrial sophistication is driving demand for highly precise, dimensionally accurate machined parts. Advanced manufacturing technologies and automation are enabling higher quality standards and tighter tolerances, essential for modern applications.

Infrastructure Expansion: Indias ongoing infrastructure boom encompassing the building and development of roads, ports, urban transit, and industrial corridors is a big growth driver. It is fuelling demand for machined components, the backbone of construction and heavy machinery industries.

Technological Advancements and Automation: The

industry is rapidly adopting automation, CNC machining, and Industry 4.0 practices, enhancing productivity, consistency, and reducing lead times.

Government Support: Initiatives like the Production Linked Incentive (PLI) scheme are incentivising domestic manufacturing, encouraging investments in advanced machinery, and promoting export competitiveness.

Sector-wise Demand Insights

Off-Highway Vehicles and Construction Equipment: The

off-highway vehicles and construction equipment segment continues to be a major source of demand for machined components, especially machined cast parts.

Growth in infrastructure projects, urban development, and material handling equipment at ports are also driving the surge in demand. The expansion of ports and logistics hubs, in particular, necessitates the supply of robust, durable machined components for cranes, loaders, and other heavy equipment.

Indian Railways and Transportation: India operates the fourth-largest railway network globally, and the sector is poised for significant expansion and modernisation. Modernisation of railway infrastructure is accelerating, with a historic 2.65 lakh crores budget allocation. This is reflected by over 98% electrification of the broad-gauge network in 2025 and plans for full electrification by 2026. Key drivers include:

0 Setting up of high-speed rail corridors 0 Expanding metro rail projects in major cities

0 Upgrading existing infrastructure for enhanced safety and efficiency

This growth translates into rising demand for machined components. These parts are critical for the durability, safety, and performance of rolling stock and railway infrastructure.

Industrial Machinery and General Engineering: The

industrial segment, covering pumps, general engineering, and industrial machinery, is benefitting from:

0 Strong focus on energy efficiency, especially in water and wastewater management

0 Rapid urbanisation necessitating expanded industrial infrastructure

0 Automation and modernisation of manufacturing processes

Machined components here include parts for pumps, valves, compressors, and various machinery, where precision and durability are non-negotiable. The shift towards smart manufacturing and Industry 4.0 integration is catalysing demand for complex, high-quality machined castings.

(Sources: Frost & Sullivan analysis and Industry Discussions https://www.imarcgroup.com/india-machine-components-market https://www.motorindiaonline.in/indian-auto-comp-industry-gro ws-11-3-to-rs-3-32- lakh-crore-39-6-billion-in-h1-fy-2425/)

Castings Market

The casting industry in India plays a critical role in supporting core manufacturing sectors such as automotive, industrial machinery, construction equipment, rail, and renewable energy. It comprises a large number of foundries, primarily MSMEs, with many meeting international quality standards. These foundries produce both raw and machined castings using materials like grey cast iron, ductile iron, and steel. As a key component supplier, the casting industry is integral to Indias manufacturing capabilities and global competitiveness.

Machined Casting Market

The machined casting market in India is witnessing steady growth, driven by increasing demand from key sectors such as ?– 

Key Growth Drivers

0 Infrastructure Expansion: Government investments in railways, defense, oil & gas, and urban transport are driving demand for machined castings.

0 Renewable Energy: Growth in wind energy and non-fossil fuel capacity is boosting the need for precision-machined components.

0 Policy Support: Initiatives like Make in India and Atmanirbhar Bharat are encouraging domestic manufacturing of quality castings.

0 Defense Sector: Planned increase in defense production is driving demand for machined components in military applications.

0 Industrial and Automotive Growth: Rising adoption of industrial automation and vehicle production are pushing demand for high-performance machined castings.

Company Overview

Pitti Engineering Limited specialises in the manufacturing of wide range of products such as electrical steel laminations, motor cores, sub-assemblies, die rotors and press tools. We specialise in delivering high-quality, precision-engineered components for rotating electrical equipment and precision- machined components. We cater to a diverse range of industries j including; appliances, cement, construction, data centres, DG sets, electric vehicle motors, freight rail, hydro generators, lift irrigation, medical equipment, mining, mass urban transport, oxygen plants, passenger rail, pumps, steel, sugar, thermal power, windmill generators, and wind energy.

Operationally, we have four strategically located facilities in Telangana and Maharashtra, designed for proximity to key customers and raw material sources. These state-of-the-art plants are equipped with advanced automation and technology, enabling high-volume, precision manufacturing. Following the completion of our recent capex cycle in 2025, we have significantly scaled our capacities, reaching 72,000 MT in sheet metal, 6,33,600 machine hours, and 14,400 MT in casting. We have consistently advanced our manufacturing processes ensuring operational excellence, innovation, and responsiveness to the evolving needs of our customers across industries.

Mergers & Acquisitions

During the year, we undertook significant strategic initiatives to expand our capabilities, diversify product portfolio, and drive longterm value creation. The merger with Pitti Castings Private Limited (PCPL) and Pitti Rail and Engineering Components Limited (PRECL) enabled seamless integration of casting operations, optimising capacity utilisation and strengthening backward integration for the machine components business. Additionally, we acquired 100% equity of Dakshin Foundry Private Limited in July 2024 at an equity value of 153.12 crores. Dakshin Foundry, a debt-free entity with marquee clients in the railway and metro sectors, brings high-value casting expertise and further enhances our technical capabilities in precision castings. Earlier in the year, the acquisition of Bagadia Chaitra Industries Private Limited (now Pitti Industries Private Limited) at an enterprise value of 124.92 crores added the pump segment to our offerings, while also contributing to volume stability and revenue diversification. These strategic transactions position us to capitalise on operating synergies, expand margins, and accelerate the transition towards a more value-added and engineering-led product mix.

With recent acquisitions and the expansion of our product portfolio and technical capabilities, we are progressing from volume-based basic products to high-end, value-added assembled products, setting the stage for strong business growth. Benefits are as follows:

0 Client stickiness 0 Dependable supplier 0 One-stop solution 0 Better financial profile 0 Addition of wallet share among customers 0 Addition of new customers and geographies

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Operational Highlights

FY 2024-25 marked a pivotal year in our operational journey, underscored by strategic capacity expansion, successful corporate actions, and progressive product innovation. With major capex initiatives nearing completion and new capacities coming online, we significantly strengthened our manufacturing footprint across sheet metal, machining, and casting operations. While we achieved volumes in certain categories, we also navigated short-term industry headwinds with agility.

Financial Performance (in crores)

Particular	2024-25	2023-24 Restated	Y-o-Y change
Revenue from operations
	1,524.55	1,244.16	22.54%
EBITDA	246.61	181.03	36.23%
PAT	106.83	89.70	19.10%

Key Ratios

Particular	2024-25	2023-24 Restated	Y-o-Y Change	Reason for variance more than 25%
Inventory Turnover (No. of times)	5.08	4.73	7.40%
Debtors Turnover (No. of times)	6.87	6.29	9.22%
Interest Coverage Ratio (in times)	3.88	4.46	(13.00%)
Current Ratio (in times)	1.17	1.29	(9.30%)
				The decrease in the Debt- to-Equity ratio is primarily attributable to the increase
Debt-to-Equity Ratio (in times)	0.85	1.36	(37.50%)	in equity, mainly resulting from the issuance of share capital through a Qualified Institutional Placement during the year.
Operating Profit Margin (%)	16.18	14.55	1.62%
Net Profit Margin (%)	7.01	7.21	(0.20%)
Return on Equity (%)	15.75	22.23	(6.48%)
Debt Service Coverage Ratio (in times)	2.41	1.99	21.11%
Trade Payables Turnover Ratio (in times)	5.27	4.73	11.42%

Outlook jj

Looking ahead, the Company ^ is well-positioned to capitalise on the enhanced capacity and integrated operations achieved during 2024-25. The consolidation - of newly acquired subsidiaries I ; and the ramp-up of recent capital * investments are expected to unlock operating leverage and strengthen j our ability to serve diverse end- user segments with greater speed, precision, and scale. Demand fi visibility across key sectors remains J encouraging, with recovery trends 1 in impacted segments likely to

I support a more balanced volume mix. Additionally, the foray into £ new-age applications, such

I as hydrogen electrolysers and revarnished laminations, reflects j our proactive approach to future- ready innovation and import substitution opportunities. With a sharpened focus on cost efficiency, margin improvement, and value- added offerings, we aim to sustain the growth trajectory and deepen our positioning as a preferred partner in precision-engineered -

Risk Management

At Pitti Engineering, risk management is a structured and proactive function, interwoven into decision-making and daily operations. The Companys Enterprise Risk Management (ERM) framework enables identification, assessment, and mitigation of risks that may adversely impact its business objectives, financial health, or long-term strategic plans.

This framework is built on three core pillars:

Commercial Risks

1. Growth Risk

Operating within a niche yet organically expanding segment, the Company is exposed to the possibility of investments outpacing near-term growth opportunities. A delay in capturing new-age, tech-driven opportunities, especially in emerging sectors like Electric Vehicles (EVs) or in geographies such as Europe, could constrain future momentum. To mitigate this, Pitti Engineering is actively securing talent, technology partnerships, and infrastructure, while remaining agile to evolving market trends.

2. Customer Concentration Risk

A concentrated client portfolio can pose risks if a key customer experiences disruption or shifts sourcing strategies. To counter this, the Company continues to invest in long-term client relationships while broadening its footprint across geographies and sectors. Forward and backward integration further strengthens its value proposition, enhancing client stickiness.

3. Competitive Risk

The engineered goods market is characterised by intense competition and pricing pressure. By building differentiated capabilities across the value chain and adopting an integration- led strategy, the Company has created a defensible position. Continuous innovation and customer intimacy serve as core differentiators.

Operational Risks

1. Geopolitical and Supply Chain Risk

Unpredictable global events such as geopolitical tensions in Eastern Europe and the Middle East, or trade policy shifts in the U.S. and China have introduced volatility across supply chains and demand cycles. The Company continues to stay informed about global developments and is taking measured steps to enhance supply chain reliability through improved planning and operational flexibility.

2. Talent and Workforce Risk

The availability of skilled machine operators and second-in-line leadership is essential for sustained execution. The Company addresses this by investing in reskilling programmes, leadership pipelines, and employee engagement aligned with its vision and growth aspirations.

3. Health and Safety Risk

Safety remains a non-negotiable priority. As the Company increases automation on the shop floor, it has simultaneously raised the bar on safety protocols. Comprehensive training on the use of PPE, safety inductions, and emergency response drills are conducted routinely.

Information and Cybersecurity Risk

The Companys digital transformation marked by automation, IoT integration, cloud-based systems, and SAP expansion has significantly enhanced productivity. However, it also introduces vulnerabilities related to data integrity, privacy breaches, and cyberattacks. To mitigate these, the Company has embedded cybersecurity protocols across operations and regularly updates its workforce on IT compliance and control measures.

Sectoral and Technological Risks

1. Technology Obsolescence

As a manufacturer of highly customised, engineered products, the risk of process or product obsolescence remains material. The Company addresses this through strategic capex in modern facilities and periodic upgrades of legacy plants. Global technology benchmarking and continuous improvement remain embedded in its operational DNA.

2. Economic Cyclicality

The capital goods sector is closely tied to macroeconomic and infrastructural investment cycles. Any slowdown in industrial momentum could impact demand. To hedge this risk, the Company is actively diversifying its revenue streams, including select non-capex-linked product lines.

Financial Risks

1. Commodity and Forex Volatility

Input costs and exchange rates have seen sharp fluctuations driven by global uncertainty. The Company leverages price pass-through mechanisms in contracts, long-term supplier relationships, and, where feasible, hedging instruments to manage exposure.

2. Liquidity and Working Capital Risk

Operating in a capital-intensive business with long production cycles requires robust capital planning. The Company maintains sufficient credit lines and access to financial markets, while following prudent working capital policies and cash flow discipline.

Sustainability and ESG Risks

1. ESG Compliance and Reputation Risk

The growing emphasis on sustainability from regulators, investors, and customers has raised the bar on disclosures and compliance. Any gaps in meeting expectations could impact stakeholder confidence. Pitti Engineering is committed to the 4Rs (Reduce, Reuse, Recycle, Recover), and is steadily rationalising energy and water usage. Investments in energy- efficient capital equipment continue, and ESG initiatives are increasingly integrated into core strategy.

2. Climate-related Transition Risks

Emerging regulations, particularly related to carbon emissions, are shaping global trade flows. The EUs upcoming Carbon Border Adjustment Mechanism (CBAM), effective January 2026, could impact exports. The Company is monitoring this development and exploring measures to address indirect carbon exposure originating from upstream steel and iron suppliers.

Strategic Continuity Amid Emerging Global Shifts

Pitti Engineering has strengthened its business continuity and crisis response frameworks to address a new generation of high-velocity risks, including geopolitical tensions, supply chain disruptions. With a proactive stance, the Company integrates scenario planning and agile cross-functional coordination to ensure uninterrupted operations. These efforts reflect a shift from reactive crisis management to strategic resilience enabling Pitti not only to navigate disruptions but also to adapt and thrive in a dynamic global environment.

Human Capital and Organisational

Culture

Our success lies in dedicated and skilled workforce. Recognising that human capital is a strategic differentiator in the engineering sector, we actively foster a workplace culture built on trust, empowerment, and purpose. With a strong focus on structured career growth, continuous learning, and employee well-being, we offer more than just employment but a platform for personal and professional transformation.

Our career progression is merit-driven and transparent, ensuring every individual is seen, supported, and set up for success. As of 31 st March 2025, our talent base stood at 2015 employees, each playing a critical role in fulfilling the organisational vision.

We take pride in nurturing a workplace where achievement is recognised, voices are heard, and innovation is encouraged. Open communication, collaborative engagement, and participatory decision-making drive day-to-day operations. Regular feedback loops and team-building initiatives reinforce a sense of belonging and shared purpose laying the foundation for a high-performance, future-ready workforce.

Internal Controls and Governance Architecture

We maintain a comprehensive, risk-responsive internal control framework, designed to ensure operational efficiency, safeguard assets, and uphold regulatory compliance in both letter and spirit. Aligned with the evolving complexities of its business model, our internal controls are benchmarked regularly against global best practices.

At the core of this framework is a robust Management Information System (MIS) that provides timely, accurate, and actionable insights across all critical functions. Functional and unit heads serve as the first layer of governance, while an independent internal auditor M/s. Laxminiwas & Co., Chartered Accountants provides an external lens, reinforcing objectivity and rigour.

The Audit Committee, acting as a strategic overseer, evaluates the effectiveness of control systems periodically and recommends course corrections or enhancements as needed. In addition, internal controls over financial reporting are validated by the Companys statutory auditors, offering an added layer of assurance to all stakeholders.

Forward-looking Statement

This Management Discussion and Analysis contains certain forward-looking statements that reflect the Companys current views, expectations, and strategic intentions. These statements based on projections, estimates, and assumptions are inherently subject to risks and uncertainties that are beyond our control. As such, actual results could differ materially from those anticipated.

We assume no obligation to publicly revise or update these statements in light of future developments. The risks presented herein are indicative and not exhaustive. Readers are advised to use their discretion when interpreting forward-looking elements and are encouraged to consider broader economic, geopolitical, and sectoral dynamics in their evaluation.