Precision Wires India Ltd Management Discussions

a) Industry Structure & Development:

The company produces winding wires made of copper used in the manufacture of both rotating and static electrical equipment. There are numerous players in the industry, including many in SSI / MSME sectors and intense competition prevails. However, due to the quality of our products and o l ng-standing relationships with customers, we continue to remain the industry leader and the preferred choice for demanding customers. The company primarily caters to the OEM sector. I nd ia has been investing substantial amounts in n i frastructure projects, including transportation systems, power, r a ilways, electronics, auto, refrigeration, and air-conditioning sectors, etc. nd I ia has a youthful population with a large percentage in the working-age group. Improved overall connectivity will enhance development and spur economic growth in semi-urban and rural areas. Emphasis on higher education, health, safety, and quality are now high priorities among consumers.

Consequently, in the long term, demand for electrical equipments-auto electricals, appliances, air conditioning, refrigeration, and the automotive sector has increased. Rising incomes, increasing urbanization, and growth in financial, infrastructural, power, and other sectors may stimulate demand in the foreseeable future. The company will focus on prudent and timely capacity enhancements, modernization, quality, and process-upgradation in the coming years.

I nd ia will continue to invest substantially in in frastructure such as roads, power generation, transmission and distribution and digital economy which will improve overall connectivity and spur development of semi urban and rural areas. Health and Safety are now high priorities in the minds of the consumer.

I n the long term, demand for Electrical Equipments, Appliances, Air Conditioning, Refrigeration and Automotive Sector will improve steadily due to these trends. Our products are used primarily by all these sectors including Power and Infrastructure, which needs continuous long-term investment. Electrical Industry in India is well developed and Export prospects will improve as western economy may seek to import more from our Country. Due to enhanced energy efficiency norms for electrical equipments, faster adoption of electric/hybrid vehicle technology in the automotive sector, old vehicle scrapping policy of the government and specific incentives given by the government for "Make in India" schemes, the long-term prospects are bright.

During FY 2025-26, the overall global situation is likely to remain highly volatile due to impact of Ukraine/Middle East wars, sharp decline in India-Pakistan relations, US-China tension, reset in US-EU ties, adverse impact of US tariffs on Indian and global economy and consequently more uncertainty which could result in lower global demand. Raw Material prices and exchange rates are also likely to remain volatile and prone to sudden fluctuations. Supply Chains will be re-configured globally and will be stretched. The trend towards increasing globalization has hit a major roadblock all around the world due to various geo-political factors. The World may move closer to stagflation. This may be likely to affect global demand. RBI may have limited room to cut interest rates due to all these uncertainties. Due to the above factors the Macro Economic situation will remain challenging in India and Globally. nd I ia is currently trying to mitigate some of these risks and enhanced trade by entering into separate negotiations with U.S.A., EU, UK and various other countries for entering into bilateral Free Trade Agreements (FTAs).

The longer-term picture for India and our Industry remains bright.

Domestic demand of Copper is at present higher than production. Imports may increase. At the end of the year under review, international and domestic copper prices, our primary input, have increased. They are expected to remain volatile during the FY 2025-26 and prone to sudden fluctuations. As a matter of policy and to mitigate market risks, our company typically engages in back-to-back transactions for copper purchases to fulfill sales orders for finished goods.

During the year under review, Bureau of Indian Standards (BIS) introduced Quality Control Orders (QCOs) on basic raw materials of our Industry such as Copper Wire Rods and Copper Cathodes which adds an additional element of complexity to our Supply Chain.

However, thanks to our low debt gearing ratio, good liquidity position, and extensive industry experience, we are optimistic about our long-term performan ce , b arring an y u nforeseen developments. n I the longer term, the global themes of Energy Efficiency and reduction of Carbon emissions will play in favour of our industry. Electric and Hybrid Vehicle development is at a very early stage in India but is expected to pick up significantly during this decade - initially mainly in two and three wheelers and thereafter also four wheelers. The Government thrust on Energy Efficient Electrical Equipments, Renewable Energy capacity expan sion,

Infrastructure investment would drive growth of Indian Economy and our Industry. Rising Incomes, n i creasing urbanization and growth in financial and Digital Sector will spur demand for Industrial, Real Estate, Consumer Durables, and Automotive Sectors. Our Company will focus on prudent and timely capacity enhancements and modernization, Quality and Process up-gradation, Consolidation, Rationalization of Costs and De-risking of all our processes and operations.

The Companys core activity is production and sale of only one product i.e. Winding Wires made of copper. Volumes during FY 2024-25 were higher, the PBDIT and PAT were also higher.

The outlook of the Indian economy for the current year may be slightly challenging due to Geopolitical factors, inflation, lower demand, possible disruptions in global supply chains, US tariffs and uncertain global economic environment, may effect the demand in the Indian economy and slow down exports.

Long term outlook for India and our Industry continues to be bright.

Please refer foregoing paragraphs

Commensurate with the size of your Company and nature of its business, your Company has adequate in ternal control procedures and regular Internal Audit systems. This has been confirmed by the Auditors in their report to the members.

During the last 10 years, your Company has paid an average dividend of about 80% (last ten years). Other Equity (Excluding revaluation) went up to 55837 (48857). We continue to follow system of reasonably prudent safeguards against the high volatility in the rates of raw material and exchange risk.

h) Material Developments in Human Resources / Industrial Relations including number of people employed: nd I ustrial Relations during the year were generally satisfactory.

Statements in this Management Discussion and Analysis describing the company objectives, estimates and expectations may be Forward Looking statements within the meaning of applicable laws and regulations. Actual performance may differ substantially or materially from those expressed or implied.