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 long-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.

India has been investing substantial amounts in infrastructure projects, including transportation systems, power, railways, electronics, auto, refrigeration, and air-conditioning sectors, etc.

India 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, Medium and long term, demand for electrical equipments-auto electricals, appliances, air conditioning, refrigeration, and the automotive sector will increase. 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.

India will continue to invest substantially in infrastructure 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.

In 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 2026-27, the overall Global situation is likely to remain highly volatile and unpredictable due to impact of Ukraine war and Iran crisis, US- China tension, reset in US-EU ties, adverse impact of US tariffs on Indian and global economy, sharp devaluation of Indian Currency v/s USD, much higher oil prices and consequently higher inflation, more uncertainty, supply chain disruptions etc, which could result in lower global and local demand. The RBI could be compelled at some point of time to increase domestic interest rates to control inflation and mitigate exchange outflows.

Our primary raw material i.e. Copper availability during FY 2025-26 was tight globally due to which prices have sharply risen during the year and are likely to remain at elevated levels during FY 2026- 27 and would be prone to sudden fluctuations. This will put pressure on our overall finance cost. 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.

Supply Chains will continue getting re-configured globally due to the geo-political situation.

The trend towards increasing globalization has hit a major roadblock all around the world due to various geo-political factors. The World is moving closer to stagflation. Global interest rates are likely to go up due to higher inflation. This is likely to affect global and local demand. RBI may have no choice but to increase interest rates under these circumstances. Due to the above factor, Macro Economic situation will remain challenging in India and Globally. Domestic demand of Copper may slow down due to the above situation. The Monsoon will play a big role in the overall performance of the Indian Economy during FY 2026-27.

India is currently trying to mitigate some of these risks by diversifying its trading relationships with various countries by entering into bilateral Trade Agreements and also by promoting "MAKE IN INDIA"

The longer-term picture for India and our Industry remains bright. Thanks to our low debt gearing ratio, good liquidity position, and extensive industry experience, we are optimistic about our long-term performance, barring any unforeseen developments.

In the medium to longer term, the global themes of Energy self Sufficiency, 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 accelerate significantly during this decade due high energy prices.

The Government thrust on Energy Efficient Electrical Equipments, Energy infrastructure and capacity expansion, Infrastructure investment would drive long term growth of Indian Economy and our Industry. Rising Incomes, increasing urbanization and growth in financial and Digital Sector will spur demand for Power 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.

Keeping in mind the long-term strategic benefits of Recycling/Refining of Copper Waste and Scrap and Un-Refined copper, the Company is in the Process of implementing a Copper Recycling / Refining Project, which will commence operation during FY 2026-27. The Copper Cathodes from the above- mentioned recycling/refining project will be internally used for the manufacturing of Copper Wire Rods, which is our primary raw material used for the manufacture of Winding Wires made of Copper.

The Companys core activity is production and sale of only one product i.e. Winding Wires made of copper. Volumes during FY 2025-26 were higher, the PBDIT and PAT were also higher.

The outlook of the Indian economy for the current year will be challenging due to Geo-political factors, higher inflation, subdued demand, possible disruptions in global supply chains, high energy prices, uncertain global economic environment. This is likely to affect the demand and increase the costs.

Medium to 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 internal 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 85.85% (last ten years). We continue to follow system of reasonably prudent safeguards against the high volatility in the rates of raw material and exchange risk.

Industrial 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.

Chairman and Managing Director

DIN:00003624

Mumbai, 23rd May, 2026