Prime Industries Ltd Management Discussions

Your company in order to optimize the resources is undergoing a strategic transformation and has adopted new business lines through the strategic investments.

In this direction the Company has acquired a controlling stake in Linga Agri Trading and Machinery Private limited, marking our entry into the diversified portfolio which includes but not limited to Defense Fabrication, Waste Management Solutions, Food Processing Equipments, and Agriculture Equipments.

Company is seeing promising opportunities ahead, with this in mind, The Company is enthusiastic about the prospects in this segment.

Overview of Linga Agri Trading and Machinery,

Linga Agri Trading and Machinery Private limited, is a research-driven engineering company specializing in Defense Fabrication, Waste Management Solutions, Food Processing Equipments, and Agriculture Equipments.

Established in 2018, the company has built a strong reputation for cost-efficient, modular, and innovative machinery solutions, serving both government and private sector clients.

Business Performance FY 2024 25

Robust Order Book: Orders in hand worth 148.63 Cr, (*Of which 110 Cr will be executed in FY 2025 26.)

Revenue & Profitability Visibility: Company expects to maintain healthy PAT margins, supported by execution of high-value government and PSU contracts.

Solid Waste Management projects: 21.87 Cr to be executed in next 12 months. Agriculture & Food Processing: 29.92 Cr projects underway. Defence Fabrication: Work orders worth 32.76 Cr from BEML for mobile missile launchers.

(*Additional of 50 Cr worth of Defense Projects expected this year)

Strategic Importance to Prime Industries

With Prime holding majority control (51%), Linga forms a critical growth engine in the industrial and engineering vertical. This provides synergic opportunities in design, manufacturing scale-up, and government/PSU partnerships.

Industrial Outlook: Indian Economy

India is currently ranked as the 4th largest economy globally in 2025 as of July 2025, overtaking Japan to secure the 4th position among the worlds top 10 largest economies, with a nominal GDP of $4.19 trillion in 2025. Moreover, the IMF forecasts that by 2028, India will overtake Germany to become the 3rd largest economy worldwide.

As per IMF projections, Indias GDP grow is at 6.2% in 2024-25 and 2025-26. With an estimated real GDP of Rs. 187.95 lakh crore in 2024-25, against the real GDP of Rs. 176.51 in 2023-24 generated by a population of over 1 billion, India is among the highest population-based economies in the world. Indias nominal GDP has grown 105% in just a decade, which means that it has more than doubled from 2014 to 2025.

Overall, the Indian economys recent growth trajectory has been marked by notable achievements and challenges, as reflected in its various economic indicators.

Waste Management Solutions:

India generates around 62 million tons of waste annually, with plastic, electronic, and hazardous waste growing rapidly. The traditional linear economic model of take, make, and dispose is no longer sustainable. The increasing pressure on landfills, depletion of natural resources, and environmental damage from unchecked waste disposal require urgent action. The circular economy is not just an alternative; it is essential. It marks a fundamental shift in how we produce, consume, and manage materials.

India is shifting from waste management to harnessing the economic potential of recycling through waste to wealth initiative. (Source: https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2104349)

Food Processing Industry:

Indias food processing industry has undergone rapid transformation, driven by its vast agricultural base, rising domestic demand, and supportive government policies. India is poised to emerge as a global leader in the food processing sector, with an impressive growth trajectory. Agriculture sector forms the backbone of the Indias food processing industry, India being the largest producer of fruits, vegetables, millets, tea, and food grains as well as milk and livestock globally.

The Ministrys budget for 2024-25 increased by approximately 30.19% compared to the previous year.

(source: https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154063&ModuleId=3)

Agricultural Equipment:

The India Agricultural Machinery Market size is estimated at USD 18.15 billion in 2025 and is projected to reach USD 27.29 billion by 2030, at a CAGR of 8.5% during the forecast period.

(Source: https://www.mordorintelligence.com/industry-reports/india-agricultural-machinery-market.)

Defense Industry:

Indias defence sector has witnessed an extraordinary transformation over the last eleven years. What was once limited in scale and ambition has grown into a confident, self-reliant ecosystem. This shift has been shaped by firm political resolve and strategic thinking. Strategic policies have sparked new energy across the board, from production and procurement to exports and innovation.

The defence budget has seen a steady rise, growing from 2.53 lakh crore in 2013 14 to 6.81 lakh crore in 2025 26.

This sharp increase reflects Indias commitment to strengthening its military foundations.

The Ministry of Defence signed 193 contracts worth 2,09,050 crore in 2024 25 the highest ever in a single year. Of

these, 177 contracts were awarded to the domestic industry, amounting to 1,68,922 crore.

(Source: https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154617)

OPPORTUNITIES AND THREATS

FOOD PROCESSING:

OPPORTNITIES

- Rising urbanization and changing consumption patterns.

- Focus on health and organic products.

- Export potential and demand for Indian ethnic food

(Source: https://www.ibef.org/blogs/the-future-of-food-processing-in-india-growth-opportunities-and-challenges)

THREATS

- The lack of adequate infrastructure is one of the most pressing challenges for Indias food processing sector.

- Regulatory and quality compliance issues for exports.

- Need for skilled labor and better R&D for innovation.

(Source: https://www.ibef.org/blogs/the-future-of-food-processing-in-india-growth-opportunities-and-challenges)

WASTE MANAGEMENT INDUSTRY:

OPPORTUNITIES:

- The Indian waste management market is projected to grow considerably, with a CAGR of 6.50% between 2025

and 2034, driven by increasing waste generation and government initiatives.

- With a large amount of waste going unmanaged, theres a substantial opportunity to improve recycling rates and

recover valuable materials from waste streams, including e-waste.

THREATS:

- A major challenge is the lack of proper waste treatment and disposal facilities, leading to overflowing landfills and

environmental pollution.

- Low levels of public awareness about waste segregation and responsible disposal practices hinder effective waste

management.

DEFENSE INDUSTRY:

OPPORTUNITIES:

- The "Make in India" initiative, coupled with government support and reforms, is driving a surge in indigenous

defense production.

- Government initiatives are encouraging greater private sector and foreign investment in the sector.

THREATS:

- Despite the push for indigenization, India still relies on foreign suppliers for certain key components and

technologies.

- The defense sector is characterized by long product development and procurement cycles, which can affect

timelines and profitability.

Detail of segment wise performances is mentioned in the point no. 8A of Directors report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate system of internal controls commensuration with the size of its operation and business, to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, and to ensure that all the business transactions are authorized, recorded and reported correctly and adequately.

The Company has appointed Internal Auditors and the scope and authority of the Internal Audit (IA) function is already defined to the Auditors. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. Based on the report of internal audit and process the company undertakes corrective action in their respective areas and thereby strengthens the controls. Significant audit observations and corrective actions thereon, if any, are presented to the Audit Committee of the Board.

The Company works in a dynamic business environment and adopts the appropriate internal financial controls, to establish reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with the generally accepted accounting principles. It includes inducting and maintaining such business policies and procedures as may be required to successfully conduct the business of the company and maintain such records as to correctly record the business transaction, assets and liabilities of the company in such a way that they help in prevention & detection of frauds & errors and timely completion of the financial statements.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Continued emphasis has been placed on human resource engagement and holistic employee growth.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the Company for FY 2024-25 is described in the Directors Report under the heading ‘Financial Highlights.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS

Sr.	Ratios	Current year	Previous year	Variance
1	Current Ratio	2.74	1.67	64%
2	Debt-Equity Ratio	0.43	0.29	48%
3	Debt Service Coverage Ratio	2.90	6.83	-58%
4	Return on Equity Ratio,	3.87%	48.68%	-92%
5	Inventory turnover ratio	-	2.14	-100%
6	Trade Receivables turnover ratio	-	-	-
7	Trade payables turnover ratio	-	-	-
8	Net capital turnover ratio	0.00	0.08	-100%
9	Net profit ratio	43.19%	69.93%	-38.23%
10	Return on Capital employed,	0.08%	0.62%	-87.50%
11	Return on investment	0.00	1.17	-100%

DETAILS OF ACCOUNTING TREATMENT

The accounting treatment is as stated in the Financial Statements and Statutory Auditors Report for the year ended 31st March, 2025 which form part of this Annual Report.