Rapicut Carbides Ltd Management Discussions

TUNGSTEN CARBIDE INDUSTRY STRUCTURE, PERFORMANCE, DEVELOPMENT, OVERVIEW AND OUTLOOK

The tungsten carbide industry continues to be a cornerstone for critical sectors across the world. With its exceptional

hardness, toughness, and resistance to wear, tungsten carbide plays a vital role in diverse applications. The industry structure revolves around the mining of tungsten ore, production of tungsten powder, blending with binders such as cobalt or

nickel, and further processing into cemented carbides used in cutting tools, dies, inserts, and wear parts.

Globally and domestically, tungsten carbide is widely consumed in sectors such as:

• Metal, Mining & Construction-drill bits, cutting tools, wear parts for harsh environments and hard Rocks.

• Oil & Gas, Energy & Power - drilling equipment, drilling, Valve applications wear-resistant parts for turbines and pipelines.

• Automotive & Railway- precision tools, engine components, and wear parts.

• Defence & Aerospace- specialized components requiring strength, hardness, and resistance to heat.

• Agriculture, Food & Feed-wear-resistant parts in harvesting and processing equipment.

• Chemical & Pharmaceutical-corrosion-resistant tools and dies.

• Electric, Electronics & Medical- precision parts for electronics manufacturing and surgical tools.

• Paper, Printing, Plastic & Glass-carbide knives, dies, and wear parts.

The global tungsten carbide market is witnessing steady expansion. With the increasing use of high-performance tools across industries, the demand is expected to increase over the coming decade. This growth is fueled by industrialization in emerging markets, infrastructure development, technological innovation, and recycling initiatives that make tungsten carbide

more cost-effective and sustainable.

INDUSTRY DEVELOPMENTS AND RAPICUT INITIATIVES

The year under review was financially challenging for the tungsten carbide industry, and Rapicut Carbides Limited was not insulated from these pressures. The Company reported a loss for the financial year, driven mainly by volatility in raw

material prices, higher production costs, and subdued demand in selected sectors.

At the same time, the Company took several proactive steps to strengthen its foundation for future growth:

• Product Development: Company developed several new products ie new tungsten carbide dies, wire drawing nibs, and specialized wear parts, catering to wire, fastener, and industrial engineering sectors.

• Capacity Building: Investments in new high-capacity press machines for manufacturing large TC rings and pallets, and a cylindrical grinding machine to enhance production precision and efficiency.

• Market Presence: Active participation in major industry exhibitions such as: o Fastener Exhibition 2024

o Wire & Tube Exhibition at Bombay Exhibition Centre

o IMTEX 2025 (Bengaluru)

o Energy Expo 2025

And Visit to JIMTOF 2024 (Tokyo, Japan) for international exposure.

These initiatives not only reinforced Rapicuts visibility in the market but also showcased its commitment to aligning with global technological advancements.

OUTLOOK AND OPPORTUNITIES

Although FY 2024-25 resulted in a financial loss, the long-term demand for tungsten carbide remains intact and continues to expand across industries. For Rapicut, opportunities exist in:

• Mining & Construction-supporting Indias infrastructure growth and global mineral exploration.

• Oil & Gas, Energy & Power-supplying wear-resistant components for drilling and energy systems.

• Automotive & Railway- providing tooling solutions for conventional automotive and railway engineering.

• Defence & Aerospace - participating in Indias growing defense manufacturing and aerospace components market.

• Diversified Sectors - expanding into agriculture, food processing, chemicals, pharmaceuticals, electronics, paper, and glass industries where tungsten carbide finds growing applications.

• Exports & Global Partnerships - strengthening long-standing supplier and customer relationships across international markets, including more than 30 years of established partnerships in China.

• Technology & Recycling - leveraging powder metallurgy and tungsten recycling to improve sustainability and cost competitiveness.

THREATS, RISKS AND CONCERNS

The Company recognizes the following challenges:

• Raw Material Price Volatility-fluctuations in tungsten and cobalt prices continue to impact costs.

• Supply Chain Dependence - global concentration of tungsten mining in limited regions exposes the industry to geopolitical risks.

• High Production Costs- rising energy and input costs affect margins.

• Regulatory Compliance- increasing environmental and workplace safety standards require strict adherence.

• Competition & Pricing Pressure- both domestic and international markets remain highly competitive.

• Machining Limitations-tungsten carbides brittleness poses challenges in complex shaping and machining.

Rapicut mitigates these risks through long-term supplier relations, operational efficiency measures, modern machinery, and

continuous focus on quality and customer trust.

OVERALL OUTLOOK

The year under review was financially difficult, but strategically important for Rapicut Carbides Limited. The Company has:

• Expanded its product portfolio to cater to more sectors.

• Enhanced its production capabilities with new machinery.

• Strengthened its market visibility through participation and visiting exhibitions in India and abroad.

• Reinforced its commitment to innovation, sustainability, and global partnerships.

While short-term performance has been impacted by external market conditions, the medium- to long-term outlook remains positive. With continued investments in technology, products, and markets, Rapicut is confident of improving performance and delivering sustainable value to its shareholders.

Sr. No. Particulars of Products Manufactured	12 months ended 31-03-2025	12 months ended 31-03-2024
1. Metal Cutting	5,95,464 Nos.	4,94,826 Nos.
2. Mining	1,87,464 Nos.	3,04,592 Nos.
3. Wear Parts	89,723 Nos.	98,958 Nos.
4. Intermediates	37,772 Kgs.	90,605 Kgs.
5. TC Tool Room Products	63,133 Nos.	22,178 Nos.
6. Scrap	3,130.5 Nos.	-

 

Number of Employees at the beginning of the year	101
Number of Employees recruited during the year	20
Number of Employees resigned during the year	24
Number of Employees retired/expired during the year	4
Number of Employees at the end of the year	93

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS AS ON THE END OF FINANCIAL YEAR 2024-25

The key financial ratios during FY 2024-25 vis a vis FY 2023-24 are as below:

Sr
Key Financial Ratios	FY 2024-25	FY 2023-24
No.
1 Current Ratio (in times)	2.36	2.67
2 Debt Equity Ratio (in times)	0.34	0.06
3 Debt Service Coverage ratio (in times)	(1.18)	3.25
4 Return on Equity ratio (%)	(11.21)	2.26
5 Inventory Turnover ratio (no. of days)	160.42	268.22
6 Trade Receivable Turnover Ratio	5.53	6.30
7 Trade Payable Turnover Ratio	5.06	6.55
8 Net Capital Turnover Ratio (in times)	2.77	3.38
9 Net Profit ratio (%)	(0.06)	0.01
10 Return on Capital Employed (%)	(0.06)	0,048
11 Return on Investment(%)	0.02	0.05
12 Interest Coverage Ratio	NA	NA

Explanation on Significant changes in the above Ratios: -

1 Current Ratio No Explanation.

2 Debt Equity Ratio Higher bank borrowings lead to higher Debt Equity Ratio.

3 Debt Service Coverage Ratio Increase in loss in financial year 2024-25 lead to adverse Debt Service Coverage ratio.

4 Return on Equity Ratio% Increase in loss in financial year 2024-25 lead to adverse Return on Equity ratio.

5 Inventory Turnover Ratio The change is mainly due to reduction in lower material consumption.

6 Trade Receivable Turnover Ratio No Explanation.

7 Trade Payable Turnover Ratio Higher average credit period lead to better ratio.

8 Net Capital Turnover Ratio No Explanation.

9 Net Profit Ratio% Increase in loss in financial year 2024-25 lead to adverse ratio.

10 Return on Capital Employed% Increase in loss in financial year 2024-25 lead to adverse ratio.

11 Return on Investment% Increase in loss in financial year 2024-25 lead to adverse ratio.

CAUTIONARY STATEMENT

Statements made in this Management Discussion and Analysis describing the Companys objectives, projections, estimates

and expectations are "forward looking" within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or imp I ied.

The Management is confident that your Company with its Quality products and Brand Equity and enduring relations with its

customers and commitment of its staff, will achieve growth in times to come.

Date: August 07, 2025 Place: Ankleshwar

For and on behalf of the Board of Directors Abhishek V. Gami Chairman and Managing Director DIN: 07570948