Pritika Engineering Components Ltd Management Discussions

Forward looking statement

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events.

The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company assumes no responsibility to publicly amend, modify or revise forward looking statements, on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include changes in government regulations, tax laws, economic developments within the country and such other factors globally.

The financial statements are prepared as per the IND AS guidelines and comply with the Accounting Standards notified under Section 211(3C) of the Act read with the Companies (Accounting Standards) Rules, 2015. The management of Pritika Engineering Components Limited has used estimates and judgments relating to the financial statements on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner, the state of affairs and profit for the year.

The following discussions on our financial condition and result of operations should be read together with our audited consolidated financial statements and the notes to these statements included in the annual report. Unless otherwise specified or the context otherwise requires, all references herein to “we”, “us”, “our”, “the Company”, “Pritika” are to Pritika Engineering Components Ltd.

ECONOMIC OVERVIEW

Global Economy Outlook

Trumps hints at unilateral tariff

In a recent media interaction, President Trump confirmed that he has begun sending formal letters to numerous countries outlining the new tariff rates they will face unless new trade agreements are finalized with the U.S. by the extended deadline. While he acknowledged a potential for further deadline adjustments, Trump indicated that such moves would likely be unnecessary. Instead, he emphasized that recipients will have the clear choice to accept these proposed terms or face higher duties?reaffirming his administrations uncompromising timeline and message.

This latest round of “reciprocal” tariff warnings follows his earlier “Liberation Day” tariff announcement in April, and extends across more than 20 countries, signaling an aggressive push to pressure trading partners into negotiating bilateral deals before new tariffs take effect.

US-China reaches an agreement on trade deal

President Donald Trump announced that the US and China had reached a provisional trade deal, following two days of negotiations in London. The framework, which needs official sign-off from Trump and Chinese President Xi Jinping, addresses tariffs as well as student visas and critical minerals, two other sticking points in US-China relations. The US would impose a total of 55% tariffs on Chinese goods, under the tentative agreement, down from the 145% rate imposed in April. Full details havent been released, but the framework reportedly also entails rolling back export limits on American technologies like airplane parts and allowing Chinese students to continue studying at American universities. In exchange, China would keep the 10% tariffs on US goods agreed to in Geneva last month. China would also reportedly ease export restrictions on magnets and rare earth minerals, which are essential components for advanced technologies and whose market China dominates.

China continues to report deflationary pressures

CPI inflation in China continued to trend in the deflationary zone with a reading of -0.7% while the sequential gain of 0.1% MoM was significantly lower than market expectation of 0.2% MoM. Core inflation, excluding food and energy prices, however, rose 0.6% in May ? highest since January this year. The price war in the auto industry is also reflecting in the inflation print, on which the government had to intervene to halt the trade war in the auto industry. From a demand perspective, it is clear that the recent stimulus measures in the form of Interest rate cuts and lower reserve requirement have not yielded results or may be it will reflect once it is transmitted fully after a lag.

US Budget Deficit moderates

US budget deficit hit USD 316Bn in May, down 9% from a year ago, as customs receipts rose to a record USD 23Bn under new US tariffs. Gross customs receipts increase last month from USD 6Bn in May-24 as Trumps tariffs on goods from nearly all trading partners began showing up in significant volumes in port-of-entry collections. Fiscal year-to-date customs receipts were up nearly 60% to USD 86Bn. The customs duties helped improve receipts for May to USD 371Bn, which were up 15%, or USD 48Bn from May-24. Outlays last month reached USD 687Bn, or USD 16Bn. Interest on the public debt, which has been steadily growing as one of the governments largest expense items, fell by USD 11Bn, or 10% YoY, in May to USD 92Bn, after a decline of USD 1Bn in April.

Federal court allows reciprocal tariffs

Federal appeals court allowed President Donald Trumps reciprocal tariffs on imports to remain in effect while it reviews a lower court ruling that blocked the tariffs on grounds that Trump overstepped his authority. Trump has said that the tariffs imposed in February on Canada, China and Mexico were to fight illegal fentanyl trafficking at U.S. borders, denied by the three countries, and that the across-the-board tariffs on all U.S. trading partners imposed in April were a response to the U.S. trade deficit. The states and small businesses had argued the tariffs were not a legal or appropriate way to address those matters, and the small businesses argued that the decades-long U.S. practice of buying more goods than it exports does not qualify as an emergency that would trigger IEEPA.

Israel-Iran Conflict: Implications for Indias Economy and Markets

The Middle East is once again a tinderbox, with the escalating Israel-Iran conflict threatening to spiral into a broader global crisis. Unlike the recent Indo-Pak hostilities, which remained contained, this clash carries the potential to draw in multiple nations, disrupting global trade and energy markets. For India, which is heavily reliant on energy imports, the stakes are high. While India has reiterated its neutral stance, the ripple effects of a prolonged conflict could significantly impact its energy security, inflation, current account balance, INR exchange rate, fiscal stability, and overall economic growth prospects.

This global flashpoint could have local consequences

The Israel-Iran conflict differs starkly from localized India and Pakistan military engagements. With China and Pakistan openly backing Iran, and Russia potentially supplying critical defense equipment should the U.S. directly support Israel, the geopolitical fault lines are deepening.

However, the immediate concern for India lies in its energy security. The Middle East accounts for a significant portion of Indias oil and gas imports. A protracted conflict could disrupt supply chains, spike global oil prices, and inflate Indias oil import bill. This would exert upward pressure on inflation, widen the current account deficit, and weaken the INR, potentially forcing the government to stretch its fiscal resources to stabilize the economy. While India is unlikely to be directly or indirectly involved in the conflict, the economic fallout could still be substantial if the situation escalates.

Uncertainty prevails

Despite these risks, theres reason to believe the conflict may not spiral out of control. Cooler heads may prevail, leading to a ceasefire to avert a wider war. If this scenario unfolds, the impact on Indias economy and markets is likely to remain limited. Indian enterprises with economic interests in both Iran and Israel?spanning sectors like technology, agriculture, and energy?may face temporary disruptions, but the broader market impact could be contained.

However, should the conflict intensify and Western forces enter the fray, the consequences could be far-reaching. Disruptions in global trade routes, particularly through the Strait of Hormuz, could choke energy supplies, sending shockwaves through Indias economy. Such a scenario would test Indias policy framework, with missteps potentially jeopardizing long-term energy security, FDI inflows, and employment opportunities in the Middle East, where millions of Indian expatriate work.

The road ahead

As the Israel-Iran conflict unfolds, India finds itself in a delicate position. While direct involvement is unlikely, the economic and geopolitical ramifications demand close watch. For now, the hope is that diplomacy prevails and a broader conflict is averted, minimizing disruptions. However, investors and policymakers alike must remain cautious, prioritizing stability over speculative risk-taking. In these uncertain times, watching from the fringes may be the wisest strategy.

Indian Economy Outlook

Indias economic performance in FY25 has demonstrated resilience amid global uncertainties, with real GDP growth estimated between 6.3% and 6.5%. This steady growth trajectory is underpinned by robust domestic demand, strategic public investments, and a rebound in key sectors.

Deloittes May 2025 outlook projects Indias GDP growth in the range of 6.3% to 6.5% for FY25, with expectations of 6.5% to 6.7% for FY26. This optimistic forecast is attributed to tax incentives boosting consumer spending and strong domestic demand. However, potential headwinds include global trade uncertainties and the impact of international tariff regimes.

EYs assessment aligns with this outlook, projecting Indias real GDP growth at 6.4% for FY25 and 6.5% for FY26. The firm emphasizes the importance of well-calibrated fiscal strategies that support human capital development while maintaining fiscal prudence to enhance long-term growth prospects.

On the supply side, the agriculture sector is projected to grow by 3.8%, bolstered by favorable monsoon conditions and enhanced productivity in horticulture, livestock, and fisheries. The industrial sector is expected to expand by 6.2%, supported by growth in construction activities and utilities. The services sector continues to be a significant contributor, maintaining its upward trajectory.

Inflationary pressures have moderated, with retail headline inflation softening to 4.9% during April-December 2024. The Reserve Bank of India anticipates aligning consumer price inflation with the target of around 4% in FY26. Fiscal indicators remain robust, evidenced by an 8.2% growth in capital expenditure between July and November 2024. Additionally, gross FDI inflows increased by 17.9% year-on-year, reaching USD 55.6 billion in the first eight months of FY25. Foreign exchange reserves stood at USD 640.3 billion as of December 2024, sufficient to cover 10.9 months of imports and approximately 90% of external debt.

Looking ahead, Indias economic prospects remain favorable, supported by structural reforms, infrastructure development, and a focus on self-reliance. The governments commitment to enhancing the manufacturing sector and fostering innovation positions the country for sustained growth, with aspirations to ascend to the position of the worlds third-largest economy in the coming years.

Source - https://-www2.deloitte.com/us/en/insights/economy/asia-pacific/india-economic-outlook.html https: / / www. p ib. gov. in / PressReleasePase. aspxRs.PRID =2113316 https://www.ey.com/en in/services/tax/india-economic-pulse

Indian Auto-Components Industry

The automotive components industry experienced a 11% YoY growth, reaching Rs. 3.32 lakh crore (US$ 38.4 billion) in the first half of FY25.

India has become the fastest-growing economy in the world in recent years. This fast growth, coupled with rising incomes, a boost in infrastructure spending and increased manufacturing incentives, has accelerated the automobile industry. The two-wheeler segment dominated the automobile industry because of the Indian middle class, with automobile sales standing at 23.85 million units in FY24.

Significant demand for automobiles also led to the emergence of more original equipment and auto components manufacturers. As a result, India developed expertise in automobiles and auto components, which helped boost international demand for Indian automobiles and auto components. Hence, the Indian automobile industry has a considerable impact on the auto component industry.

In 2024, India produced 100,000 electric cars and 900,000 electric two-wheelers. However, Internal Combustion Engine (ICE) vehicles still dominate with 20 million two-wheelers and 5 million cars produced.

Indias auto component industry is an important sector driving macroeconomic growth and employment. The industry comprises players of all sizes, from large corporations to micro entities, spread across clusters throughout the country. The auto components industry accounted for 2.3% of Indias GDP and provided direct employment to more than 1.5 million people. By 2026, the automobile component sector will contribute 5-7% of Indias GDP. The Automotive Mission Plan (2016-26) projects to provide direct incremental employment to 3.2 million by 2026.

Robust growth

Export growth

The industry is a leader in exports and provides jobs to over 3.7 crore people. In FY24, the export value of auto components/parts was estimated at US$ 21.2 billion. North America, which accounts for 33% of total exports, increased by 5%, while Europe and Asia, which account for 32% and 24% of total exports, increased by 12% and growth for Asia remained flat, respectively. The key export items included drive transmission and steering, engine components, body/chassis, suspension and braking etc.

Domestic and exports markets hold huge potential

Market potential balanced across product types

Indian Agricultural Tractor Market

The Indian agricultural tractor market is a large and growing sector, driven by the countrys predominantly agrarian economy and increasing mechanization of farming practices. The market is expected to reach a value of USD 15.3 billion by 2034, with a compound annual growth rate (CAGR) of 7.0%. Key factors contributing to this growth include government initiatives to boost agricultural productivity, rising rural incomes, and the increasing use of tractors for nonagricultural purposes like construction and transport.

The market is dominated by Indian OEMs like Mahindra & Mahindra Limited, TAFE, International Tractors Ltd (Sonalika), and Escorts Limited. International players like Deere & Company and CNH also have a notable presence. Government initiatives, including subsidies and support for farm mechanization, contribute to market growth.

The industry is witnessing a remarkable technological revolution, particularly in the realm of sustainable and smart farming solutions. In January 2024, Tractors and Farm Equipment Limited (TAFE) marked a significant milestone by introducing electric tractors equipped with auto-steer and advanced farm management systems. This innovation reflects the industrys commitment to environmental sustainability and technological advancement. Similarly, in February 2024, Sonalika Tractors launched a new range of 10 advanced heavy-duty tractors under the "Tiger" series, featuring cutting- edge technologies like CRDS and HDM+ engines, demonstrating the industrys focus on innovation and efficiency.

The industry is experiencing significant capital investments in manufacturing infrastructure, reflecting confidence in the markets growth potential. Major manufacturers are expanding their production facilities to meet the growing demand and incorporate advanced manufacturing technologies. In March 2024, Sonalika Tractors invested in two new plants in Hoshiarpur, Punjab, including a tractor assembly facility and a high-pressure foundry plant. Similarly, Escorts Kubota Ltd announced plans to invest approximately Rs 4,500 crore in a new manufacturing plant in Rajasthan, aiming to double their domestic tractor production capacity to 3.4 lakh units annually. These investments underscore the industrys commitment to enhancing production capabilities and maintaining technological leadership in the global market.

Source:https: //www.mordorintellieence.com/industry-reports/ india-aericultural-tractor-machinery-market

Segment Analysis: Engine Power

30-50 HP Segment in India Agricultural Tractors Market

The 30-50 HP segment dominates the India Agricultural Tractors market, commanding approximately 86% market share in 2024, while also being the fastest-growing segment with a projected growth rate of around 7% during 20242029. This segments prominence can be attributed to its optimal balance of power and cost-effectiveness for Indian farming conditions. With the average size of household ownership decreasing and farm holdings seeing a downward trend, these compact tractors prove viable and efficient for small farm holdings while being key to increasing productivity. The segments growth is further supported by continuous product innovations from major manufacturers. For instance, in November 2022, VST Tillers Tractors Ltd and Zetor Tractors launched new tractor models with 40 & 50 HP engine capacities, addressing the specific needs of Indian farmers. The low cost of these tractors compared to higher horsepower variants, coupled with their fuel efficiency and versatility in handling various agricultural tasks, makes them particularly attractive to small and marginal farmers who constitute the majority of Indias farming community.

Remaining Segments in Engine Power Segmentation

The other segments in the market include Under 30 HP, 51-80 HP, and Above 80 HP tractors, each serving specific agricultural needs. The Under 30 HP segment caters to small-scale farming operations and specialized applications like horticulture and gardening, offering compact and manoeuvrable solutions for smaller land holdings. The 51-80 HP segment serves medium to large-scale farming operations, providing enhanced power for heavy-duty agricultural tasks and specialized farming applications. The Above 80 HP segment, while representing a smaller portion of the market, plays a crucial role in large-scale commercial farming operations and specialized agricultural applications requiring significant power output. These segments complement each other by addressing diverse farming requirements across different land holding sizes and agricultural applications throughout India.

Segment Analysis: Drive Type

Two Wheel Drive Segment in India Agricultural Tractors Market

The Two Wheel Drive segment dominates the India Agricultural Tractors market, holding approximately 86% market share in 2024. These tractors are predominantly used in dry farming conditions where fields are not excessively muddy, sloped, or wet, making them ideal for operations like sowing seeds, spraying fertilizers and pesticides, and topping pastures. Two-wheel drive tractors have gained significant popularity among small and marginal farmers due to their cost-effectiveness, affordability, and improved manoeuvrability. These tractors are particularly efficient in fuel consumption, typically using between 2 to 5 Liters per hour depending on engine size and working conditions. Major manufacturers like Sonalika, Mahindra and Mahindra, John Deere, Swaraj, and Eicher have strengthened their market position by offering innovative two-wheel drive tractors that cater specifically to the Indian agricultural landscape. The segments dominance is further reinforced by these tractors ability to handle basic farming activities effectively while maintaining lower operational costs compared to their four-wheel counterparts.

Four Wheel Drive Segment in India Agricultural Tractors Market

The Four-Wheel Drive segment is emerging as the fastest-growing category in the India Agricultural Tractors market, projected to grow at approximately 7% CAGR from 2024 to 2029. These tractors are specifically engineered for challenging terrains and demonstrate superior performance in harsh, wet, and muddy farmland conditions. The segments growth is driven by their versatility in performing multiple agricultural tasks beyond basic farming activities, including crop protection, loading, and construction work, thereby reducing the need for additional equipment purchases. Four-wheel drive tractors are particularly valued for their ability to efficiently operate several heavy-duty implements like cultivators and loaders, contributing to increased overall productivity while maintaining quality standards. Major manufacturers are actively investing in research and development to enhance these tractors capabilities, as evidenced by John Deeres launch of the 5045 D PowerPro 4WD in 2023, which specifically addresses the needs of Indian farmers by improving agricultural efficiency and reducing labor requirements.

Segment Analysis: Application

Row Crop Tractor Segment in India Agricultural Tractors Market

The Row Crop Tractor segment dominates the India Agricultural Tractors Market, holding approximately 34% market share in 2024. These agricultural tractor machineries are specifically tailored to grow crops that meet all agricultural demands, such as plowing, harrowing, levelling, pulling seed drills, weed control, and running various machines like water pumps and belt pulley threshers. The segments prominence is driven by the increasing unavailability of farm laborers and growing mechanization of agriculture. Row-crop tractors are provided with replaceable driving wheels of different tread widths and have high ground clearance to prevent crop damage. The increasing demand for power, precision, handling, and efficiency has shaped the development of the row crop tractor segment in India. Major players in the market are investing heavily in R&D work to develop innovative equipment and maintain a strong market foothold, with several new models being introduced featuring advanced technologies like integrated car-like headlamps, compact packaging with underhood mufflers, stylish SMC bonnets, and digital clusters. Additionally, the segment is projected to grow at the fastest rate of approximately 7% during 2024-2029, driven by these tractors versatility as allrounders and their effectiveness as substitutes for manual labor.

Remaining Segments in Application Segmentation

The other segments in the India Agricultural Tractors market include Orchard Tractors and Other Applications. Orchard tractors are specifically designed for creating and maintaining lawns, gardens, fruit crops, vines, and specialized agricultural operations. These utility tractors are light and compact, with a small turning radius drive that provides better traction for operation across terrains. The Other Applications segment encompasses utility tractors, which are general- purpose machines used for various agricultural operations, including small- and medium-sized farms and specialty agricultural industries such as dairy and livestock. These tractors are designed for tasks such as plowing and driving other types of equipment through their drives, offering features like compact design, user-friendly interfaces, and limited space requirements. Both segments contribute significantly to the markets diversity by catering to specific agricultural needs and operational requirements across different farming applications.

Source:https://1www.mordorintellieence.com/industry-reports/india-aericultural-tractor-machinerv-market Tractor Industry Statistics

CONSOLIDATED FINANCIAL OVERVIEW -

The consolidated performance of the Company for the financial year ended March 31, 2025, is as follows:

Total revenue from operations at Rs. 117.66 crore for the year ended March 31, 2025, as against Rs. 87.55 crore for the corresponding previous period, an increase of 34.39%.

The EBIDTA (earnings before interest, depreciation and tax, excluding other income) was Rs. 18.27 crore for the year ended March 31, 2025, as against Rs. 11.44 crore for the corresponding previous period, an increase of 59.70%.

The Net Profit (including other comprehensive income) was Rs. 5.75 crore for the year ended March 31, 2025, as against Rs. 3.32 crore for the corresponding previous period, a rise of 73.19%.

EPS was at Rs. 2.18.

RESOURCES AND LIQUIDITY

As on March 31, 2025, the consolidated net worth stood at Rs. 45.49 crore and the consolidated debt was at Rs. 71.15 crore.

The net debt to equity ratio of the Company stood at 1.20 as on March 31, 2025.

The Company is dealing in single segment i.e. manufacturing of Auto Components/parts.

DEVELOPMENTS IN BUSINESSES DURING THE YEAR:

Pritika Group proudly marked a major milestone this year as it celebrated its 50th Golden Jubilee, underscoring decades of excellence and growth in the engineering components sector. As part of its ongoing expansion strategy, Pritika Engineering Components Ltd. acquired additional land in Hoshiarpur to enhance its production capabilities. Strengthening its relationship with a leading multinational tractor manufacturer, the Company secured a long-term order that reinforces its position as a trusted OEM partner. The Group also commenced commercial production of several key components, including hydraulic lift housings, axle housings, intermediate housings, and housing beam centers, further diversifying its product portfolio and solidifying its presence in the high-value tractor components market.

RISKS AND CONCERNS

The company encounters various risks, both internal and external, as it conducts its daily operations and works towards its long-term goals. A comprehensive policy is developed, and dedicated risk workshops are conducted for each business vertical and key support functions. These workshops focus on identifying, assessing, analyzing, and either accepting or mitigating risks to a level deemed acceptable within the organizations risk appetite. The risk policy undergoes periodic reviews to ensure its effectiveness and relevance.

The Company faces the following Risks and Concerns:

Economy and Market Risk

The Companys expansion is closely tied to the cyclical nature of the agricultural and automotive sectors. The fluctuations in the Indian commercial vehicle and tractor industries directly influence the demand for associated components. Given the significant impact of the automotive sector on economic growth, any downturn in the overall economy would have repercussions on the commercial vehicle industry.

Credit Risk

Pritika has established a credit policy to handle its credit exposure, including procedures for credit limit requests and approvals. Before bidding on projects, the company conducts thorough research on clients financial health and project potential. It diligently follows up with clients to ensure payments are made according to schedule. The company has optimized its processes to create a targeted and proactive receivables management system, ensuring collections are received on time.

Interest Rate Risk

The company has effectively handled its debt-equity ratio by employing a combination of loans and internal cash flows. It has also efficiently managed its working capital to maximize cost optimization in terms of overall interest expenses.

Contractual Risk

Pritika adheres to a rigorous procedure for assessing the legal risks associated with contracts and determining its legal obligations according to relevant contract laws. It meticulously evaluates worst-case scenarios and, as a strategic measure with input from advisors, incorporates stringent terms to limit liabilities to the fullest extent feasible.

Competition Risk

As is typical across industries, growth prospects bring about increased competition. We encounter competition at various levels, including from domestic and multinational firms. Pritika has established distinct advantages in project execution, quality, and timely delivery, making it resilient against competitive pressures. Additionally, the company maintains a competitive edge through ongoing investments in technology and employee development. Our robust and enduring client base, consisting of both large and mid-sized enterprises, contributes to a healthy order backlog and shields the company from this risk. We also mitigate this risk through our focus on infrastructure quality, customercentric approach, and innovative solutions tailored to customer needs, supported by competitive pricing and an assertive marketing strategy. Our disciplined project management practices, along with prudent financial and human resource management and cost control measures, further strengthen our resilience against competitive challenges. Therefore, we anticipate minimal impact from this risk.

Input Cost Risk

Changes in raw material prices, power costs, and other input expenses could impact our profitability and cost efficiency. These risks, particularly those related to raw material pricing and power availability, are potentially significant and require vigilant monitoring.

KEY FINANCIAL RATIOS

There was no significant change i.e. 25% or more in the key financial ratios except in the following:

Particulars	Year ended 31.03.2025	Year ended 31.03.2024	Change
Debtors Turnover Ratio (In times)	9.29	7.13	30.33%

Reason: Debtors Turnover ratio has increased due to increase in turnover.

Details of any change in Return on Net Worth as compared to the immediately previous financial year:

Particulars	Year ended 31.03.2025	Year ended 31.03.2024	Change
Return on Net Worth (In %age)	12.84	10.93	17.51%

Explanation: Increase in return on net worth is due to increase in net profit.

OPPORTUNITIES

• Rising Agricultural Sector Growth

• Supportive Government Policies for Agriculture

• Expanding Commercial Vehicle Market

• Favorable Export Conditions

• Utilization of Tractors Beyond Agriculture

• Investment Opportunities and Increased FDI

THREATS

• Competitive pressure from both local and global competitors

• Economic volatility and regulatory shifts affecting market demand and profitability

• Technological progress potentially rendering current products outdated

• Vulnerability of the agricultural sector to adverse weather conditions and monsoons

• Fluctuating labor and raw material expenses posing risks

• Challenges in attracting and retaining skilled workforce

• Potential slowdown across the agricultural industry

INTERNAL CONTROL SYSTEMS AND ADEQUACY

For the purposes of effective internal financial control, Pritika has adopted various policies and procedures to ensure orderly and efficient conduct of its business, including adherence to companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information.

There has not been any significant change in such control systems. The control systems are reviewed by the management regularly. The same are also reviewed by the Statutory Auditors and Internal Auditors from time to time. Additionally, the Company has adopted various policies and procedures to safeguard its interest. These policies and procedures are reviewed from time to time. A proper reporting mechanism has been implemented in the organization for reporting any deviation from the policies and procedures. Compliance audit is conducted from time to time by external agencies on various areas of operations.

HUMAN RESOURCES

Pritika has Human Relations and Industrial Relations policies in force. These are reviewed and updated regularly in line with the Companys strategic plans. The human relations team continually conducts training programs for talent development. The Company aims to develop the potential of every individual associated with it as a part of its business goal. Pritika leverages a mix of experienced as well as young talent to drive growth.

The company values its human resources as the principal drivers of change. The Company focuses on providing individual development and growth in a work culture that encourages team work and high performance.

As on March 31, 2025, the Company had a workforce of 481 (permanent and contractual).

OUTLOOK

The outlook for Pritika Engineering Components Limited remains robust and forward-looking, driven by a confluence of macroeconomic trends, sector-specific tailwinds, and the Companys strategic initiatives. As a specialized manufacturer of precision machined components catering primarily to the tractor and commercial vehicle segments, PECL is well-positioned to capitalize on the rising demand from both domestic and global OEMs.

Indias tractor and heavy commercial vehicle industries are expected to maintain a strong growth trajectory, backed by increased rural mechanization, infrastructure development, and government support. Industry reports project the Indian tractor market to grow at a CAGR of 6%-7%, and the commercial vehicle sector to see double-digit expansion over the medium term. This provides a fertile ground for PECL to deepen its engagement with existing customers and expand into new accounts and geographies.

Internally, the Company has taken decisive steps to scale operations and boost efficiency. The acquisition of 87,000 sq. ft. of industrial land in Hoshiarpur marks a major expansion milestone that will enhance production capacity. Additionally, the adoption of advanced technology and shift toward higher-weight, higher-margin products is expected to further strengthen profitability.

Key developments such as highest-ever monthly dispatch volume during the year, commercialization of new high-value components, and secured a significant multi-year order from a leading multinational tractor manufacturer, reinforce the Companys competitive position and revenue visibility over the next 3-5 years.

Looking ahead, PECL is also laying the groundwork to enter new verticals such as railways, Defence, and electric hybrid tractors, aligning with national priorities and opening up new revenue streams. Approvals from bodies like RDSO (Railway Design & Standards Organization) are being pursued to gain entry into the railway components space.

On the financial front, the Company remains committed to prudent capital allocation, operational discipline, and enhancing shareholder value. The proposed fund-raise and capacity expansion are strategically aligned to support longterm growth, improve debt ratios, and build a scalable business model.

In conclusion, with a strong order book, increasing product value-addition, and focus on emerging sectors, PECL is poised to deliver sustainable growth and profitability in the coming years.

For and on behalf of the Board of Directors	Sd/-
	Harpreet Singh Nibber
Date: 11.08.2025	Chairman & Managing Director
Place: Mohali	DIN: 00239042