Ram Ratna Wires Ltd Management Discussions

<dhhead> MANAGEMENT DISCUSSION AND ANALYSIS</dhhead>

A) Economic Scenario

1. World Scenario:

The world economy is anticipated to maintain a steady growth trajectory, with projections indicating a 3.2 percent expansion through 2024 and 2025, mirroring 2023’s pace. Advanced economies are poised for a slight acceleration, with growth rates climbing from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025. In contrast, emerging markets and developing economies are expected to experience a modest slowdown, easing from 4.3 percent growth in 2023 to 4.2 percent in both subsequent years. Looking further ahead, global growth forecasts indicate a dip to 3.1 percent, marking a historic low. Inflation trends show a gradual decline, with global rates projected to decrease from 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025. Despite significant central bank interventions aimed at restoring price stability, the global economy has demonstrated remarkable resilience amid evolving economic landscapes.

2. Indian Scenario:

The Indian economy has exhibited remarkable resilience and robust macro-economic fundamentals despite global economic uncertainties. Prompted by strong growth in Q2 of FY 2023-24, RBI in its December, 2023 monetary policy has revised growth projections of India’s GDP from 6.5 percent to 7 percent and in line with same, India’s growth forecast has been revised upwards by the International Monetary Fund (IMF) to 6.3 percent for the fiscal year 2023-24, up from the previous projection of 6.1 percent. This upward revision underscores increasing global confidence in India’s economic capabilities amidst a stable global growth forecast of 3 percent for 2023. Looking ahead, India is poised to ascend to the rank of the third-largest economy by 2027 in terms of USD at market exchange rates, with its contribution to global growth expected to rise significantly over the next five years according to the IMF. Forecasts from international bodies such as the World Bank, IMF, OECD, and ADB further affirm positive growth prospects for India, projecting growth rates ranging from 6.1 percent to 6.7 percent for the fiscal year 2024-25.

3. Industry Structure:

Ram Ratna Wires Limited (hereinafter referred to as RRWL) stands out in South Asia’s winding wire industry as the second largest manufacturer by volume. The Company caters to a diverse range of industries such as automotive, defense & aerospace, electrical, electronics, home appliances, healthcare, lighting, telecommunications, and infrastructure. RRWL is recognized in India as the exclusive producer of enamelled copper wires, offering a comprehensive range from delicate 18-micron (0.018 mm) wires to robust 4.876 mm options, with various intermediate sizes. This reflects the company’s commitment to innovation and quality across different sectors.

In FY 23-24, RRWL achieved significant growth with a total production of 33,939 tonnes across various wire, strip, and related products. This marked a notable increase of 10.38% compared to the previous fiscal year. Enamelled copper wire accounted for approximately 70% of the total production, underscoring RRWL’s specialization in this core product. The remaining 30% included a diverse range of offerings such as enamelled copper strips, paper-covered copper wires and strips, submersible winding wires with varied insulation options, litzwires, bunched and braided wires, self-bonding wires, fiberglass-insulated wires and strips, as well as aluminium winding wires and strips. RRWL’s product portfolio encompasses Enamelled Copper Wire (ECW), Enamelled Copper Strips (ECS), Paper Insulated Copper Strips (PCS), Enamelled Aluminium Wire (EAW), Submersible Winding Wires (SWW), among others. This comprehensive range underscores RRWL’s dedication to meeting the needs of original equipment manufacturers (OEMs) with tailored winding solutions.

B) Development & Modernization:

1. Continuous Improvement and Customer Centric Approach:

RRWL has always been committed to continuous improvement in processes, product quality, and services. This commitment is bolstered by a highly interactive, customer-centric, and robust R&D team, which stands as a cornerstone of the company’s strength. Over the years, RRWL has introduced numerous innovative products, such as corona-resistant wires, setting a benchmark in the industry.

2 . R&D Initiatives in FY 23-24:

During the fiscal year 2023-2024, our R&D team focused on the up-gradation, standardization, and maintaining consistency in the quality of our products. A strict adherence to the specifications and standards has been a top priority, ensuring that our offerings meet and exceed customer expectations. The relentless efforts in research and development have resulted in enhanced product reliability and performance, further solidifying our market position.

3. Embracing Automation and Industry 4.0:

In alignment with modern industrial trends, RRWL has embraced automation, transforming our production facilities to meet Industry 4.0 standards. This transformation involves a series of strategic projects aimed at digitizing the existing manual controls of our machinery.

Key initiatives include:

Digitization of Machine Controls: Transitioning from manual to automated control systems through the integration of input/output data analysis, facilitating real-time monitoring and adjustments.

Time Data Analysis: Implementing advanced time data analysis to optimize production processes, reduce downtime, and enhance overall efficiency.

Desktop Control Panels: Providing the executive and management team with desktop control panels, offering a centralized platform for monitoring, control, and decision-making. This enhances the responsiveness and agility of our operations. The adoption of these cutting-edge technologies not only streamlines our production processes but also significantly enhances our ability to maintain high standards of quality and consistency. As we continue to evolve, our focus remains on leveraging technological advancements to drive innovation, improve customer satisfaction, and achieve sustainable growth

In conclusion, the ongoing development and modernization efforts at RRWL underscore our commitment to excellence and innovation. By staying at the forefront of technological advancements and maintaining a customer-centric approach, we are well-positioned to meet the challenges of the future and deliver superior value to our stakeholders.

C) Outlook:

1. Demand for Winding Wires & Strips in India: Industry Growth and Demand Drivers:

The Indian electrical and electronic industry has maintained strong growth momentum in 2023-2024. India, ranking as the world’s third-largest cable market, consumed 1,266 kt of insulated metallic wire and cable in 2023, accounting for nearly 6% of global consumption, trailing only China (42%) and the US (9%). The demand for insulated metallic wire and cable in India is projected to grow by 7.8% year-on-year in 2024, with a robust compound annual growth rate (CAGR) of 6.4% expected from 2023 to 2028. Despite global economic challenges, India’s economy remains resilient, having achieved a 7% GDP growth in 2023, and is anticipated to sustain a strong 6.1% growth in 2024, albeit slightly affected by election-related disruptions. This growth is primarily fueled by robust domestic demand and a thriving manufacturing sector.

Increased Production in Key Segments:

Transformers: India’s transformer market is poised for significant growth driven by escalating power demand, intensified manufacturing activities, electrification efforts, and the country’s ambitious transition to green energy, targeting 500 GW by 2030. This surge has sparked a resurgence in transmission and distribution capital expenditures, with the power transmission segment alone expected to see Rs 4.75 trillion in investments by 2027 according to the Central Electricity Authority’s draft National Electricity Plan (Volume II). As of March 2024, India’s alternating current (AC) transformation capacity reached 1,217.58 GVA across 220-765 kV levels, growing at a compound annual growth rate (CAGR) of 6.8% from 2018-19 to 2023-24. The high voltage direct current (HVDC) transformation capacity stands at 33,500 MW, predominantly at ? 800 kV (54%) and ? 500 kV (40%) levels, showing a CAGR of 8.3% over the same period. In the distribution segment, nearly 902 GVA of transformer capacity operates at the 33 kV level and below across 46 utilities, demonstrating a CAGR of 7.6% from 2017-18 to 2021-22, as reported by India Infrastructure Research.

Rotating Machines: The demand for rotating machines in India is surging due to the rise in industrial automation and the necessity for energy-efficient motors. Projections indicate that India’s electric motor market is set to grow at an impressive compound annual growth rate (CAGR) of 11% from 2023 to 2028, driven primarily by expanding industrialization. As new industries emerge and existing ones expand, there is a heightened requirement for motors that can minimize energy consumption and operational costs. Energy-efficient motors, known for their superior efficiency and reduced energy loss, are increasingly sought after across diverse sectors such as power, manufacturing, agriculture, construction, and transportation, promising substantial cost savings over their operational lifespans.

Meters: India’s government has set an ambitious goal of installing 250 million smart electricity meters by the end of 2025. To execute this implementation strategy, the government launched the Revamped Distribution Sector Scheme (RDSS). This scheme aims to provide financial support for regional utility service providers (USPs) for smart meter deployment and maintenance, as well as to expand domestic manufacturing capacity for producing smart meters within India.

However, by the end of 2023, India had achieved less than 3% of this goal, making it unlikely to be met before 2030. Despite this setback, India is on track to become the largest market for smart electricity meters by 2030, in terms of both annual shipments and revenue.

Export Achievements and Future Goals: The Indian electrical equipment industry is poised for substantial growth, with projections indicating it could reach $130 billion by 2030. This growth trajectory anticipates a doubling of industry size over the medium term, spanning the next seven years. Additionally, exports from the sector are forecasted to increase significantly, potentially expanding by 2.5 times by the year 2030. These projections underscore a robust outlook for the electrical equipment industry, driven by both domestic demand and enhanced global market participation. This target reflects the industry’s robust growth potential and the increasing global demand for Indian electrical equipment.

This goal is driven by several factors:

Global Demand: The global transition towards renewable energy and smart infrastructure is boosting the demand for Indian electrical equipment. Quality and Innovation: Indian manufacturers are increasingly recognized for their quality and innovative products, enhancing their competitiveness in international markets.

Government Support: Policies and incentives aimed at promoting exports, such as the Production-Linked Incentive (PLI) scheme, are providing a significant boost to the industry.

Asia Pacific to Lead Enameled Copper Wires Market Growth through 2030

The enameled copper wires market is poised for robust growth, driven by the rising demand for consumer electronics, such as smartphones, laptops, and household appliances. This surge in demand is fueled by increasing disposable incomes and changing lifestyles in emerging economies. Geographically, the Asia Pacific region is expected to dominate the market during the forecast period, thanks to rapid industrialization, urbanization, and infrastructural development in countries like China, India, and Japan. The presence of major electronic manufacturing companies in these regions further propels market growth. Overall, the market is projected to witness a CAGR of 8% from 2023 to 2030, with key growth drivers including the increasing demand for energy-efficient electrical equipment, expansion in the automotive sector, and the rising adoption of renewable energy sources.

Modernized infrastructure elevates power need Electricity Demand Dynamics

India’s electricity demand rose by 7% in 2023, driven by rapid economic growth and increased space cooling needs. This demand is expected to continue growing at an annual average rate of 6.5% between 2024 and 2026. By 2026, India’s electricity demand is projected to outpace China’s, boasting the world’s fastest growth rate.

Global Comparison and Emerging Economies

While China holds the largest volume of expected growth, India’s electricity demand over the next three years might nearly be equivalent to that of the United Kingdom. In contrast, developed economies have reported substantial reductions in manufacturing and industrial output, coupled with high inflation. About 85% of new electricity capacity is expected to come from emerging economies, particularly in South Asia, with China and India leading the way.

Green energy pledges fuel action and investments

India, the world’s third largest emitter of greenhouse gases, has committed to achieving "net-zero" emissions by 2070 despite its significant reliance on coal. The Ministry of New and Renewable Energy targets 500 GW of non-fossil-based electricity generation by 2030, following the Prime Minister’s COP26 announcement. In 2023, India added 13.5 GW of renewable energy capacity, corresponding to an investment of around

Rs 74,000 crores (US$ 8.90 billion).

The Central Electricity Authority estimates that India’s power requirement will grow to 817 GW by 2030, with most of the demand coming from the real estate and transport sectors. In the Interim Budget for 2024-2025, the fiscal allocation for solar power grid infrastructure development surged to Rs 8,500 Crore (US$ 1.02 billion), up from the previous year’s Rs 4,970 Crore (US$ 0.60 billion). Additionally,

Rs 17,490 crores (US$ 2.10 billion) were allocated for the Green Hydrogen Mission and the Strategic Interventions for Green Hydrogen Transition (SIGHT) Program.

India’s installed renewable energy capacity is expected to increase to about 170 GW by March 2025, up from 136.57 GW as of December 2023, according to research agency ICRA.

Hydroelectric Power and Energy Transitions

India has hydroelectric power projects with an aggregate capacity of 15 GW under construction, and the total hydro capacity is expected to increase from 42 GW to 67 GW by 2031-32, marking more than a 50% increase. The Indian Meteorological Department has predicted higher rainfall for the current financial year, and hydropower projects in the Himalayan region will benefit from increased snowmelt contribution due to rising temperatures.

The development of Pumped Storage Projects (PSPs) is crucial for providing greater inertia and balancing power to the grid, earning them the moniker "the Water Battery" for their role in modern clean energy systems. Currently, PSPs with an aggregate capacity of 2.7 GW are under construction, and an additional

50 GW is in various stages of development. It is projected that PSP capacity will increase from 4.7 GW to around 55 GW by 2031-32. The IMD’s prediction of a good monsoon in FY 2024-25 suggests a potential reversal of the previous year’s scarce rainfall trend, which could help replenish reservoir capacities.

EV Ecosystem to Boost Future Wire Demand

India’s push towards electric vehicles (EVs) is creating expansive opportunities in mobility, energy storage, and charging infrastructure. This includes EV franchising, OEM markets, battery infrastructure, solar charging stations, and battery swapping technology. The demand for wires and cables at charging stations is pivotal as EVs rely heavily on electricity for charging. This transition is driving increased demand across the wire and cable industry.

Government Policies and Regulations: Government policies and regulations play a pivotal role in shaping the EV landscape, focusing on emissions reduction, consumer incentives, and infrastructure development to accelerate the adoption and sustainability of EVs globally.

Expansion of Manufacturing and Charging Infrastructure: The 2024 Interim Budget presented by Finance Minister Nirmala Sitharaman outlined significant support for manufacturing and the development of charging infrastructure, aiming to create a robust environment for electric vehicles (Press Information Bureau).

Focus on Public Transportation: There is a push towards increasing the number of electric buses in public transport, supported by a payment security mechanism to encourage the deployment of e-buses (Press Information Bureau).

FAME II Scheme Enhancements: The government continues to support the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME India) Scheme, with substantial financial backing to promote the use of electric and hybrid vehicles (Invest India).

Production Linked Incentive (PLI) Schemes: Initiatives include PLI schemes for automotive and battery manufacturing to attract investments and boost local manufacturing of advanced automotive technologies and components (Invest India).

Reduction in GST and Other Fiscal Incentives: The government has reduced the Goods and Services Tax (GST) on EVs from 12% to 5% and proposed the exemption of registration fees for battery-operated vehicles to make them more affordable (E-Vehicle info). These initiatives aim to increase the adoption of EVs and support India’s goal of achieving net-zero emissions by 2070, reflecting a broader commitment to sustainable and eco-friendly transportation solutions.

This burgeoning market is set to significantly impact the wire and cable industry, necessitating specialized wires for power transmission, battery management, and electronic systems crucial for EV operations.

Rail and datacentre growth to boost cable demand

Indian Railways is poised to achieve complete electrification of its broad gauge network ahead of schedule, supported by a dedicated fund of Rs 6,500 crore allocated in the interim budget. This initiative positions Indian Railways as the largest green railway globally, aiming to significantly reduce carbon emissions by 2027-28. According to Energy Monitor and Indian Railways data, the railways are currently 95% electrified, surpassing electrification levels in the EU (56%), the UK (38%), and the US (1%). Switzerland stands at 99% electrification. This advancement is expected to boost demand for telecommunication and power cables. The combination of a thriving electrical and electronic industry, significant export achievements, rising domestic demand, and favorable economic conditions points to a promising future for the demand for winding wires and strips in India. RRWL is well-positioned to capitalize on these opportunities, leveraging its strong R&D capabilities and innovative product offerings to meet the increasing demands of both domestic and international markets in future years. The company’s strategic focus on quality, innovation, and customer satisfaction will be key drivers in maintaining its competitive edge and achieving sustainable growth.

2. RR Shramik Brand: Overview:

RR Shramik continues to uphold its reputation as a trusted brand, delivering innovative and customer-centric products, particularly in the domain of winding wires and strips. The brand’s commitment to quality and innovation has resulted in substantial growth across several product lines in the FY 2023-2024.

Key Product Achievements in FY 2023-2024: Bondable Wire:

Superior Technology: Bondable wire, known for its excellent adhesive properties and ease of use in coil applications, has become a preferred choice among customers.

Remarkable Sales Surge: The sales of bondable wire skyrocketed by 101%, showcasing its growing popularity and widespread application in various industries.

Litz/Braided/Bunched Wires:

Versatile Applications: These wires, valued for their flexibility and ability to reduce power loss in high-frequency applications, have seen increased usage in advanced electronic and electrical systems. RRWL have now developed the Litz wires with the additional covering (serving) of the Nylon, Polyester, and silk threads OR even the with the high temperature film wrappings like aramid fiber papers (Nomex) or Polyimide films (Kapton) which have a customer specific significant applications.

Significant Increase: Sales of Litz, braided, and bunched wires increased by 64% over the previous fiscal year, reflecting the expanding market for these high-performance wires.

MCB Coil:

Market Penetration: The MCB (Miniature Circuit Breaker) coil, essential for safety and efficiency in electrical systems, witnessed a phenomenal rise in demand.

Exponential Growth: The sales of MCB coils soared by 190%, underscoring a massive uptick in market penetration and the product’s critical role in modern electrical infrastructures.

Outlook for 2024-2025:

Continued Innovation and Product Development:

RR Shramik is steadfast in its commitment to driving innovation and expanding its product portfolio. The company focuses on developing high-quality, reliable, and efficient products tailored to meet the evolving needs of various industries.

Enhanced R&D Capabilities:

To stay at the forefront of technology and innovation, RR Shramikplanstostrengthenitsresearchanddevelopment capabilities further. This includes investments in cutting-edge technologies and fostering a culture of continuous improvement. The goal is to develop next-generation products that not only offer superior performance but also prioritize energy efficiency and sustainability.

Customer-Centric Approach:

Customer satisfaction remains a top priority for RR Shramik. The company aims not only to meet but to exceed customer expectations by closely engaging with clients to understand their specific requirements. This customer-centric approach ensures the delivery of tailored solutions that address unique challenges and opportunities across industries.

Market Expansion:

RR Shramik is poised to expand its market presence both domestically and internationally. Leveraging its strong brand reputation and innovative product offerings, the company seeks strategic partnerships and collaborations to enhance its market reach and drive growth in key sectors.

Sustainability Initiatives:

As part of its commitment to sustainability, RR Shramik focuses on developing environmentally friendly products and adopting green manufacturing practices. Initiatives aimed at reducing the company’s carbon footprint and enhancing energy efficiency are integrated into its production processes.

Projected Growth and Demand:

The demand for RR Shramik’s innovative products is expected to remain robust in 2024-2025. This growth is driven by several factors, including the increasing adoption of automation and smart technologies in industries, the expansion of renewable energy projects such as electric vehicles (EVs), wind, and solar power, and continued infrastructure development in emerging markets.

3. Quality First:

Quality Management Systems and Certifications:

RRWL remains steadfast in its commitment to maintaining and improving quality across its operations, supported by prestigious international quality management certifications:

ISO 9001:2015 - Quality Management System:

RRWL adheres to the ISO 9001:2015 standard, ensuring rigorous quality management practices across all processes. This certification underscores the company’s commitment to consistently meeting customer requirements and enhancing customer satisfaction through effective application of the system.

ISO 14001:2015 - Environmental Management System:

Environmental sustainability is a key focus area with adherence to the ISO 14001:2015 standard. RRWL integrates environmental considerations into its business operations, striving to minimize environmental impact and comply with applicable legal and regulatory requirements.

ISO 45001:2018 - Occupational Health and Safety Management System:

The ISO 45001:2018 certification reflects RRWL’s commitment to ensuring a safe and healthy work environment for its employees and stakeholders. By systematically managing occupational health and safety risks, the company aims to prevent work-related injuries and illnesses.

IATF 16949:2016 - Automotive Quality Management System:

As part of its dedication to automotive excellence, RRWL complies with the IATF 16949:2016 standard. This certification ensures robust quality management in automotive manufacturing processes, covering quality management, human resources, marketing, strategic planning, policy making, and purchasing.

Excellent Ratings and Customer Acquisition:

RRWL has consistently achieved excellent ratings in assessment audits conducted by multinational companies (MNCs). These ratings are prominently displayed on global websites, enhancing visibility and attracting global purchase inquiries. The company’s ability to maintain high standards has facilitated the acquisition of numerous reputed new customers, further solidifying its market presence and customer trust.

D) Opportunities and Threats for FY 2024-25:

1. Opportunities: a. India’s Economic Growth:

India remains one of the fastest-growing emerging major economies, with ambitious targets to achieve a GDP of USD 5 trillion economy. The performance of the electrical equipment industry in FY 24-25 indicates robust growth, driven by increased industrial and consumer spending.

This economic momentum presents several opportunities:

Increased Demand for Electrical Equipment: As India progresses towards a higher GDP and industrial output, there will be a parallel increase in demand for electrical and electronic equipment, including winding wires and strips. This growth is supported by infrastructure development, urbanization, and the expansion of renewable energy projects. India’s electrical equipment industry is forecasted to double in size over the next seven years reaching a market valuation of $130 billion by 2030.

Government Initiatives: The Government of India’s focus on infrastructure development, including power generation capacity expansion, and initiatives such as Make in India and Atmanirbhar Bharat, Swachh Bharat Abhiyan, Jal Jeevan Mission, and National Solar Mission provide a conducive environment for domestic manufacturing and investment in the electrical sector. The government aims to reduce environmental problems and create a sustainable future for future generations; thus, it supports conservation initiatives, climate-resilient infrastructure, and renewable energy. India is dedicated to upholding internationally acknowledged environmental standards and aims to achieve approximately fifty per cent of its installed electric power capacity from non-fossil fuel sources by 2030.

India’s electricity demand set to grow fastest among major economies, global demand: India is poised to witness the fastest growth in electricity demand among major economies over the next three years, according to the International Energy Agency’s (IEA) report, "Electricity 2024". The report forecasts a robust global surge in electricity demand, growing at an average rate of 3.4% from 2024 through 2026, largely driven by emerging economies. The IEA’s analysis indicates that about 85% of this growth is expected to come from regions outside advanced economies, with China, India, and Southeast Asian countries leading the demand surge. For India, the forecasted demand over the next three years is projected to be roughly equivalent to the current electricity consumption of the United Kingdom. This trend significantly boosts the demand for electrical equipment and components, thereby benefiting RRWL’s product offerings.

b. Technological Advancements and Innovation: Industry 4.0 Adoption: The adoption of Industry 4.0 technologies, including automation, IoT (Internet of Things), and AI (Artificial Intelligence), presents opportunities for efficiency gains and product innovation. RRWL’s focus on digitalization and smart manufacturing aligns well with these trends, enhancing competitiveness and operational efficiency.

Green Technologies: Increasing emphasis on sustainability and environmental conservation favors the demand for eco-friendly electrical solutions. RRWL’s ISO 14001:2015 certification underscores its commitment to environmental management, positioning it favorably in a market increasingly driven by green technology adoption.

c. Market Expansion and Global Reach: Export Opportunities: The international recognition of RRWL’s quality standards, reflected in certifications like ISO 9001:2015 and IATF 16949:2016, facilitates global market expansion. The company’s ability to attract reputed multinational customers enhances its visibility and competitiveness in international markets.

Emerging Market Potential: Beyond traditional markets, emerging economies present growth opportunities. RRWL’s proactive approach in diversifying its customer base and leveraging global supply chains enhances its resilience against regional economic fluctuations.

Accelerating Toward a Greener Horizon: The Promising Future of Electric Vehicles-The future outlook for electric vehicles (EVs) is indeed promising, driven by several key factors such as environmental consciousness, technological advancements, and supportive government policies. Consumers are increasingly drawn to EVs due to their lower operating costs and reduced environmental impact compared to traditional vehicles.

Governments worldwide are implementing stricter emissions regulations and offering incentives to promote EV adoption, further boosting their popularity. Battery technology continues to improve, providing EVs with longer ranges and faster charging times, which addresses one of the primary concerns of potential buyers.

Moreover, the expansion of EV infrastructure, including charging networks, is crucial in enhancing the convenience and practicality of EV ownership. As these trends continue and EVs become more affordable and accessible, coupled with growing awareness of environmental issues, the automotive industry is set for a significant transformation towards sustainable transportation solutions.

These developments present a substantial opportunity for growth for your company, aligning well with the evolving market trends towards electric mobility.

2. Threats:

a. Global Economic Uncertainty:

Energy Crisis and Geopolitical Tensions: Ongoing energy crises, geopolitical tensions (such as the Russia-Ukraine conflict), and associated supply chain disruptions impact global economic stability. These factors can lead to fluctuations in raw material prices, supply chain delays, and market volatility, which may affect Company’s production costs and profitability.

Currency Fluctuations: Strengthening of major international currencies against the Indian rupee can increase the cost of imported raw materials and consumables, impacting production costs and profitability margins.

b. Supply Chain Disruptions and Inflation:

Supply Chain Vulnerabilities: Continued disruptions in global supply chains, geopolitical tensions, pose operational challenges for RRWL. Delays in raw material procurement, logistics bottlenecks, and fluctuating availability of critical components can disrupt production schedules and customer deliveries.

Inflationary Pressures: Rising inflationary pressures, including wage increases and elevated prices of essential inputs like copper and other raw material costs, escalate production costs. RRWL’s ability to manage cost efficiency and mitigate inflationary impacts through strategic sourcing and operational optimization becomes critical.

c. Competitive Landscape and Pricing Pressures:

Intense Competition: The presence of other manufacturers in the winding wires and strips segment, both domestic and international, intensifies competition. Price competition and the ability to offer differentiated products and services become pivotal in maintaining market share and profitability. Price Volatility in Raw Materials: Fluctuations in global commodity prices, particularly copper and other raw materials used in manufacturing winding wires, can impact RRWL’s cost structure and profit margins. Effective hedging strategies and supplier relationships are essential to mitigate these risks.

Conclusion:

Navigating the opportunities and threats in FY 2024-25 requires RRWL to leverage its strengths in quality management, innovation, and market diversification. By capitalizing on India’s economic growth prospects, embracing technological advancements, and navigating global uncertainties with agility, RRWL can position itself as a resilient player in the competitive landscape of the electrical equipment industry.

E) Performance Review (2023-24):

Standalone Basis: Revenue from operations, including other income, stood at Rs 2,615 Crs. Lakhs in FY 2023-24, up from INR Rs 2,328 Crs. Lakhs in the previous year marking a substantial increase of 12.33%. Profit After Tax increased to Rs 50.40 Crs. in FY 2023-24 from Rs 42.91 Crs. in the previous year.

Consolidated Basis: Revenue from operations, including other income, increased to Rs 2,983 Crs. in FY 2023-24 from Rs 2,650 Crs. reflecting a 12.59% growth in the previous year. Profit After Tax also increased to

Rs 54.62 Crs. in FY 2023-24 from Rs 47 Crs. in the previous year.

Key Financial Ratio

	Standalone
Ratios
	FY 2023-24	FY 2022-23
Debtors Turnover Ratio	9.23	7.84
Inventory Turnover Ratio	15.85	18.02
Interest Coverage Ratio	2.10	2.29
Current Ratio	1.65	1.50
Debt Equity Ratio	0.27	0.63
Operating Profit Margin%	3.78%	3.56%
Net Profit Margin%	1.93%	1.84%
Return on Net Worth (RONW)	12.57%	14.11%

Explanation for variance in ratios by more than 25%: The total comprehensive income for the year has been increased by more than 50% mainly due to sale of equity shares held under fair value through OCI and thereby corresponding change in the shareholders’ fund and the reduction in the debt of the Company, therefore change in Debt Equity ratio by more than 25%.

F) Internal Control Systems and their Adequacy:

The robustness of RRWL’s internal financial controls reflects its commitment to ensuring transparency, compliance, and efficiency in operations. These controls are meticulously designed to align with the company’s scale, business nature, and operational complexity. They undergo regular monitoring and evaluation by the management, internal and Statutory Auditors, with continuous improvements implemented in response to evolving laws, regulations, and operational needs.

Key Features of Internal Control Systems: Comprehensive Monitoring:

Internal financial controls are subject to periodic monitoring by the company’s management. This systematic oversight ensures that controls remain effective and responsive to changing business dynamics and regulatory requirements.

Audit Oversight:

Internal and statutory auditors conduct thorough evaluations of the internal control framework. Their independent assessments provide valuable insights into control effectiveness and highlight areas for enhancement.

Audit Committee Review:

Audit findings and status reports, along with management actions and responses, are presented to the Audit

Committee for review. This collaborative approach ensures that audit recommendations are addressed promptly, and corrective actions are implemented as necessary.

Adaptability and Compliance:

The internal control systems are adaptable to accommodate amendments in laws and regulations. This proactive approach ensures ongoing compliance and mitigates regulatory risks effectively.

Continuous Improvement:

RRWL emphasizes a culture of continuous improvement in its internal controls. Feedback from audits, management reviews, and regulatory updates drives enhancements aimed at optimizing operational efficiency and minimizing risks.

G) Human Resources Development:

At RRWL, human resources are recognized as the cornerstone of organizational success. The company’s strategic approach to human resource development encompasses training, skills enhancement, and fostering a conducive work environment to unleash employees’ full potential.

Training Programs:

Skill Enhancement: RRWL conducts regular training programs designed to equip employees across all levels with new skills and knowledge. These initiatives are aligned with the company’s future-ready strategy, ensuring that employees remain adept in a rapidly evolving industry landscape.

Competence Building: The company’s investment in training is geared towards building competence and capability among its workforce. By empowering employees with the latest industry practices and technologies, RRWL fosters innovation and operational excellence.

Infrastructure and Employee Well-being:

Safe Working Conditions: RRWL prioritizes the provision of safe and healthy working conditions for its employees. The company invests in infrastructure and implements stringent safety protocols to ensure a secure workplace environment.

Industrial Relations: Maintaining harmonious industrial relations is a cornerstone of RRWL’s corporate ethos. The company is committed to nurturing healthy and cordial relationships across all organizational levels, fostering a collaborative and supportive workplace culture.

Employee Strength:

As of 31^st March 2024, RRWL employed 851 permanent employees, highlighting its role as a significant employer committed to fostering career growth and development opportunities within the organization.

Conclusion:

RRWL’s strong performance in FY 2023-2024 has set a solid foundation for continued success. The upcoming production commencement of the new manufacturing facility in Bhiwadi, Rajasthan expected by the current financial year i.e. 2024-25, will significantly enhance the Company’s production capacity and expand its geographical reach. Furthermore, the development of a state-of-the-art facility for manufacturing of motors including Brushless DC (BLDC) motors through its joint venture subsidiary, Epavo Electricals Private Limited, marks a pivotal diversification of its product portfolio. These strategic initiatives reflect RR Shramik’s unwavering commitment to innovation, operational excellence, and regional economic development through substantial employment opportunities. Concurrently, RRWL’s focus on strengthening internal financial controls and comprehensive human resource development highlights its dedication to regulatory compliance, employee well-being, and sustainable growth. By continuously refining its internal processes and investing in its workforce, RRWL reinforces its status as a responsible and forward-thinking corporate entity, well-positioned to thrive in the competitive global marketplace.

CAUTIONARY STATEMENT

Certain statements in this Report describing the Company’s objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable Securities Laws and Regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Company’s operations include global and Indian demand supply conditions, finished goods prices, availability and prices of raw materials, power, interest rates, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors. Your Company is not obliged to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent development, information or events or otherwise.

For and on behalf of the Board of

Ram Ratna Wires Limited

	Tribhuvanprasad Rameshwarlal Kabra
Place: Silvassa	Chairman
Date: 14th May, 2024	DIN: 00091375