Presstonic Engineering Ltd Management Discussions

[As required under Schedule V(B) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015]

Presstonic Engineering Limited ( Presstonic or the Company ) manufactures products and sub-assemblies for metro rail rolling stock, railway signalling and allied infrastructure applications and also undertakes infrastructure engineering, general fabrication, stainless-steel and other engineering products. The Company supplies to domestic and global original equipment manufacturers and seeks to combine precision fabrication, product development, quality assurance and timely delivery.

During FY 2025 26, the Company operated in an expanding production environment. Its manufacturing presence includes the facility at Srigandhadakavalu, Sunkadakatte, Bengaluru, and additional premises taken on lease in the Peenya industrial area to support production requirements. The financial statements also reflect additions to plant and equipment and capitalisation of product-related models, designs and prototypes during the year.

This Management Discussion and Analysis ( MD&A ) should be read with the audited financial statements, notes thereon, Board s Report and other disclosures forming part of the Annual Report. The financial statements are prepared under Indian Generally Accepted Accounting Principles, comprising the Accounting Standards prescribed under section 133 of the Companies Act, 2013 read with the applicable rules, and not under Ind AS.

Industry structure and developments.

The Company operates within the rail and metro engineering supply chain, where project authorities and rolling-stock/signalling original equipment manufacturers engage specialised vendors for fabricated components, assemblies and application-specific products. Demand is influenced by public infrastructure expenditure, project awards, localisation programmes, the pace of coach and corridor commissioning, customer qualification cycles and adherence to technical and safety standards.

India s metro and regional rapid-transit ecosystem continued to expand during the period under review. Government information published in March 2026 reported that the operational metro/RRTS network had grown to approximately 1,095 km across 26 cities by 2025, making India the world s third-largest operational metro network. It also reported annual budgetary support of approximately Rs.29,550 crores for metro infrastructure in FY 2025 26. This continuing build-out, together with railway rolling-stock modernisation and localisation, supports a broader domestic vendor ecosystem for components, signalling products and engineering services.

The industry remains project-driven. Vendor approvals, prototype development, testing and customer acceptance can lengthen the conversion of enquiries into revenue. Production volumes may also vary with OEM delivery schedules. At the same time, domestic manufacturing capabilities, localisation and the growing installed base create opportunities for repeat orders, replacement demand and development of adjacent engineering products.

Opportunities and Threats. Opportunities

Continued expansion of metro, RRTS and railway rolling-stock programmes and theresulting demand for components and sub-assemblies.

Localisation and Make in India initiatives, which may increase sourcing from qualified domestic engineering vendors.

Product development and prototyping capabilities that allow the Company to provide customer-specific, solution-oriented products.

Diversification beyond metro products into infrastructure engineering, general fabrication, stainless-steel and export-oriented engineering products.

Export opportunities: export sales increased to Rs.441.63 lakhs in FY 2025 26, representing about 10.90% of revenue from operations.

Additional capacity, plant additions and investments in designs/prototypes that may support a broader product portfolio and execution of orders on hand.

Opportunities and Threats (cont d) Threats

Competitive pricing pressure from organised and unorganised engineering vendors, including suppliers with larger resources or broader product portfolios.

Dependence on project schedules and customer/OEM approvals, which can cause uneven order conversion, dispatches and working-capital cycles.

Volatility in steel and other input prices, availability of specialised materials and the ability to pass cost increases to customers.

Quality, certification and delivery risks inherent in safety-sensitive rail and metro applications.

Customer concentration, delayed collections and the need to carry inventory for orders on hand.

Foreign exchange movements and logistics risks in relation to exports and imported inputs, where applicable.

Availability and retention of skilled technical

(a) Segment wise or product-wise performance.

FY 2025 26 was the first year in which the financial statements presented the following business-segment information. Accordingly, comparable segment figures for FY 2024 25 were not furnished. Segment revenue is directly attributable to the relevant segment. Since disaggregated cost data is not separately maintained, allocable costs were apportioned in proportion to segment revenue. Segment assets and liabilities were not separately identified because they are used interchangeably.

Business segment	Revenue (Rs. lakhs)	Share of revenue	Segment result (Rs. lakhs)
Metro Rail Components	1,936.68	47.82%	845.26
Infrastructure Engineering Products	855.11	21.11%	373.21
General Fabrication Stainless Steel	859.85	21.23%	375.28
Others	398.61	9.84%	173.98
Total	4,050.26	100.00%	1,767.73

Risk area	Nature of risk	Mitigation approach
Order and customer risk	Project deferrals, changes in OEM schedules, customer concentration and delayed conversion of orders into revenue.	Customer engagement, order monitoring, diversification across products/segments and disciplined production planning.
Working capital and liquidity	Inventory for orders, receivable cycles and advances for growth may absorb cash. FY 2025 26 operating cash outflow was Rs.644.78 lakh.	Working-capital monitoring, collection follow- up, banking lines and deployment of rights- issue proceeds for approved objects.
Raw materials and supply chain	Price volatility, shortages, quality variations and logistics disruption may affect cost and delivery.	Vendor development, procurement planning, quality checks and negotiated commercial terms, where feasible.

Risk area	Nature of risk	Mitigation approach
Execution and quality	Failure to meet technical specifications, testing standards or delivery milestones may lead to rejection, rework or reputational impact.	Documented processes, inspection/testing, customer approvals and production/quality oversight.
Interest rate and leverage	Borrowing costs and refinancing conditions may affect profitability and cash flows.	Capital infusion, debt monitoring and an improved debt-equity ratio of 0.31 as at 31st March 2026 .
Foreign exchange	Export receipts and foreign-currency transactions may be affected by currency movements.	Monitoring of exposures and commercial/treasury measures based on the nature and materiality of exposure.

Domestic sales were Rs.3,608.63 lakhs and export sales were Rs.441.63 lakhs during FY 2025 26. The diversified revenue mix indicates that metro rail components remained the largest business segment, while infrastructure engineering and general fabrication together contributed more than 42% of revenue.

Outlook

The medium-term industry outlook remains supported by the continued development of metro and rail infrastructure, localisation of supply chains and demand for engineered components. The Company intends to strengthen its position with existing OEM customers, expand its product offering, pursue domestic and export opportunities and improve utilisation of its manufacturing and product-development capabilities.

The Company raised Rs.2,636.76 lakhs through a rights issue during FY 2025 26. The proceeds were applied towards repayment/prepayment of borrowings, working-capital requirements, general corporate purposes and issue expenses in accordance with the revised objects. The improved capital structure provides a stronger base for working-capital support and execution of growth plans. However, actual performance will depend on order inflows, customer schedules, input costs, project execution, collections and general economic and industry conditions.

Risks and concerns.

The Company s risk-management framework seeks to identify and monitor strategic, operational, financial, compliance and market risks. The principal risks and management responses include:

Internal control systems and their adequacy.

The Company has established internal control systems commensurate with the nature and scale of its operations. The controls are designed to support orderly and efficient conduct of business, safeguarding of assets, prevention and detection of fraud and error, accuracy and completeness of accounting records, timely financial reporting and compliance with applicable laws and internal policies.

The internal-control programme covers major operational and financial areas, including identified risk areas. During the year, the internal-auditor changed from M/s Vishnu Chaitanya & Co. to M/s Paramkusum and Associates, Chartered Accountants, with the latter appointed from the second quarter of FY 2025 26. Significant findings and corrective actions are reviewed by management and placed before the Audit Committee. Based on the reviews carried out during the year, the management considers the internal financial controls adequate and operating effectively for the nature and scale of the Company s operations. The systems are subject to continuing review and strengthening in line with business growth.

Discussion on financial performance with respect to operational performance.

The Company recorded substantial growth in FY 2025 26. Revenue from operations increased by 92.53% to Rs.4,050.26 lakhs. Profit after tax increased by 200.62% to Rs.259.74 lakhs, reflecting operating scale, improved receivable turnover and a stable finance-cost base. The financial performance is summarised below:

Particulars	FY2025 26 (Rs. lakhs)	FY2024 25 (Rs. lakhs)	Change
Revenue from operations	4,050.26	2,103.74	92.53%
Other income	30.05	40.33	(25.49%)
Total income	4,080.31	2,144.07	90.31%
Total expenses	3,763.67	2,055.20	83.13%
Earnings before interest and tax (EBIT)	550.53	325.71	69.02%
Profit before tax	316.64	88.87	256.30%
Profit after tax	259.74	86.40	200.62%
Basic and diluted EPS (Rs.)	3.17	1.12	183.04%

Cost of materials consumed increased to Rs.2,044.27 lakhs, broadly reflecting the higher production and sales scale. Employee-benefit expense increased by 13.25% to Rs.311.30 lakhs, while finance costs marginally reduced by 1.25% to Rs.233.89 lakhs. Depreciation and amortisation rose to Rs.194.97 lakhs following capacity and intangible-asset additions. Other expenses increased to Rs.1,052.28 lakhs in line with the expanded level of operations.

Trade receivables reduced from Rs.1,652.71 lakhs to Rs.982.43 lakhs despite higher revenue, resulting in improved receivables turnover. Inventories increased from Rs.1,320.05 lakhs to Rs.1,490.75 lakhs to support orders and production. Cash and bank balances increased to Rs.863.41 lakhs following financing activities, including the rights issue. Net cash used in operating activities was Rs.644.78 lakhs, primarily reflecting increases in loans and advances and inventory, partly offset by improved receivable collections.

Material developments in Human Resources / Industrial Relations front, including number of people employed.

The Company recognises that engineering, production, quality, project management and commercial capabilities are central to sustainable growth. During the year, employees were provided functional and role-based learning opportunities, including external training where appropriate. Management continued regular engagement with employees to support a cooperative work environment, productivity, safety and adherence to quality requirements. Industrial relations remained cordial during the year.

As at 31st March 2026 , the Company employed 194 persons, comprising 44 employees on the rolls of which 39 male employees and 5 Female employees contract personnel.

Details of significant changes in key financial ratios:

The ratios below are based on the audited financial statements. A change of 25% or more compared with the immediately preceding financial year is treated as significant for the purpose of Schedule V.

Ratio	2025 26	2024 25	Change	Significant change and reason
Debtors / Trade Receivables Turnover	3.07	1.81	70.08%	Yes, the ratio improved because revenue increased substantially while closing trade receivables reduced by Rs.670.28 lakhs, reflecting stronger collections and the timing of sales/ realisation.
Inventory Turnover	2.88	1.71	68.32%	Yes, Revenue and material throughput increased faster than average inventory. Inventory increased in absolute terms to support production against orders on hand
Interest Coverage Ratio	2.35	1.38	71.16%	Yes, EBIT increased by 69.02%, while finance costs remained broadly stable, improving the Companys ability to service interest.

Ratio	2025 26	2024 25	Change	Significant change and reason
Current Ratio	4.04	1.97	104.40%	Yes, Current assets increased following the rights issue and growth in cash/bank balances and short-term loans and advances, while the increase in current liabilities was comparatively lower.
Debt-Equity Ratio	0.31	0.62	(49.58%)	Yes, Shareholders \u2019 funds increased substantially following the Rs.2,636.76 lakhs rights issue, while short-term borrowings reduced, resulting in lower leverage.
Operating Profit Margin	13.59%	15.48%	(12.21%)	No
Net Profit Margin	6.41%	4.11%	56.15%	Yes, Higher operating scale and improved profitability, together with broadly stable finance costs, increased PAT as a percentage of revenue from operations.

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof

Particulars	FY2025 26	FY2024 25	Change
Return on Net Worth / Return on Equity	6.53%	3.42%	90.96%

Return on Net Worth improved primarily because profit after tax increased from Rs.86.40 lakhs to Rs.259.74 lakh. The increase in profit outweighed the increase in average shareholders equity arising from the rights issue during the year. The ratio is calculated as profit after tax divided by average shareholders equity, consistent with Note 46 to the audited financial statements.

Disclosure of Accounting Treatment:

The financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles, comprising the Accounting Standards prescribed under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and other applicable provisions of the Act. The accounting policies have been consistently applied. No accounting treatment different from that prescribed in the applicable Accounting Standards has been followed in the preparation of the financial statements for FY 2025 26. Accordingly, no alternative accounting treatment requiring management explanation under Schedule V is reported.

For & on behalf of the Board

PRESSTONIC ENGINEERING LIMITED

SD/-	SD/-
Herga Poornachandra Kedilaya	Yermal Giridhar Rao
Managing Director	Joint Managing Director & CFO
DIN: 09120129	Din: 09120130