Rasandik Engineering Industries India Ltd Management Discussions

FINANCIAL YEAR 2025-2026

Overview of Industry and Economic Environment

Rasandik Engineering Industries India Limited ("the Company") is a BSE-listed small-cap entity with an approximate market capitalization of Rs. 35 Crores as on 31 March 2026. The Company operates primarily in the sheet metal fabrication segment and has, in recent years, expanded into the electric mobility space through manufacturing of electric three-wheelers.

During FY 2025-26, the Indian economy remained resilient, supported by infrastructure development, stable domestic demand, and policy support for manufacturing and clean mobility. The automotive sector witnessed moderate growth, while the electric vehicle (EV) segment—particularly three- wheelers—continued to grow at a faster pace driven by cost efficiency and increasing adoption in last-mile connectivity.

Government initiatives promoting localization, electrification, and domestic manufacturing have further strengthened the industry outlook. The EV ecosystem is gradually transitioning from policy-driven growth to a more market-led expansion phase.

The Indian automotive industry continued to demonstrate resilience during FY 2025-26, supported by strong domestic demand, government-led infrastructure development, and policy thrust on localization and electrification. As per industry insights from Automotive Component Manufacturers Association of India (ACMA), the auto component sector witnessed moderate growth driven by OEM demand, export opportunities, and increased localization initiatives. Similarly, data from Society of Indian Automobile Manufacturers (SIAM) indicated steady growth in passenger and commercial vehicle segments, while the electric vehicle (EV) segment, particularly in two-wheelers and three-wheelers, continued to expand at a faster pace.

Within this macroeconomic and industry context, the Companys core sheet metal fabrication business remained stable, albeit subject to fluctuations in raw material prices, especially steel. The Company maintained its focus on operational efficiency, cost optimization, and maintaining relationships with OEM customers. However, competitive

pressures, margin constraints continue to remain key challenges in this segment.

The Companys strategic entry into the electric threewheeler segment in recent past aligns with the Government of Indias push towards sustainable mobility, supported by initiatives such as FAME and various state EV policies. The electric three-wheeler market has emerged as a high- growth segment due to lower operating costs, rising fuel prices, and increasing adoption in last-mile connectivity. The Company has made gradual progress in establishing its presence in this segment, though it continues to operate in a highly competitive environment with both organized and unorganized players.

Charging infrastructure has seen notable expansion during FY 2025-26, with increased participation from both public and private players. The governments continued focus on battery swapping policies, urban charging networks, and highway electrification is gradually addressing range anxiety concerns.

Further, Indias long-term vision—guided by policy think tanks such as NITI Aayog—continues to target significant EV penetration by 2030, with a strong emphasis on electrification of shared and last-mile mobility.

Overall, Indias EV ecosystem is transitioning from a policy- driven phase to a market-driven growth phase, particularly in the electric three-wheeler segment.

From an opportunities standpoint, the transition towards electric mobility, increasing localization requirements, and the "Make in India" initiative provide a favorable longterm outlook for both the Companys business segments. The Company is well-positioned to leverage its fabrication capabilities and engineering expertise to cater to evolving OEM requirements, including EV components. Additionally, export opportunities and diversification into new product lines may offer incremental growth avenues.

On the risk front, the Company faces challenges including volatility in raw material prices, supply chain disruptions, intense competition, regulatory changes in the EV sector, and dependency on limited customers. The relatively small

scale of operations also impacts bargaining power and margins. Furthermore, technological advancements and the need for continuous investment in product development and quality enhancement remain critical for sustaining competitiveness.

Localisation and Supply Chain Developments

The Indian automotive sector is witnessing accelerated localization, driven by government incentives and global supply chain realignment. OEMs and component manufacturers are increasingly investing in domestic production capabilities, including electronics, battery systems, and precision components.

This shift presents a significant opportunity for companies like Rasandik to leverage their expertise in sheet metal fabrication and engineering solutions. Localization efforts are also enhancing cost competitiveness and reducing exposure to global supply disruptions.

Opportunities and Growth Drivers

The electric three-wheeler segment continues to be one of the fastest-growing categories in Indias EV market, driven by:

i) Lower operating costs compared to ICE vehicles (up to 70-80% savings)

ii) Rising fuel prices

iii) Strong demand in last-mile connectivity and e-commerce logistics

iv) Increasing urbanization and shared mobility requirements

Technological advancements such as improved battery efficiency, longer driving range, and better vehicle design are further accelerating adoption.

The gradual shift from low-speed to high-speed electric three-wheelers, especially in cargo and logistics applications, presents a significant growth opportunity.

Additionally, the EV financing ecosystem is expanding rapidly, making vehicle ownership more accessible. Industry estimates suggest that EV financing could reach substantial scale by 2030, supporting long-term demand growth.

Business Outlook

The Company continues to focus on strengthening its core sheet metal business while expanding its presence in the electric mobility segment.

Under its SAMRAT brand, Rasandik has developed a diversified portfolio of electric three-wheelers in the L5 category, catering to:

- Passenger mobility (Driver+3 and Driver+6 configurations)

- Commercial logistics (Load carriers and delivery vans)

- Specialized applications such as waste management

The Company remains committed to delivering products that emphasize quality, reliability, economy, and sustainability. With zero-emission vehicles and increasing acceptance of EVs, Rasandik is well-positioned to benefit from the growing demand for clean mobility solutions.

The Company is also exploring opportunities to expand its market presence, including potential export opportunities and deeper penetration into domestic markets.

Threats

The Company faces several external challenges, including:

- Regulatory Changes: Increasing environmental and compliance requirements may lead to higher costs.

- Raw Material Volatility: Fluctuations in steel and other input prices continue to impact margins.

- Competitive Intensity: The EV segment, particularly three-wheelers, is becoming increasingly competitive with new entrants.

- Short Product Lifecycles: Rapid technological changes require continuous product upgrades and innovation.

Risks and Concerns

Key risks impacting the Company include:

- Technological Risk: Rapid evolution in EV technology may require ongoing capital investment.

- Policy Risk: Changes in government incentives or EV policies could impact demand.

- Supply Chain Risk: Disruptions in sourcing components or logistics could affect production.

- Market Risk: Demand fluctuations and pricing pressures in both EV and fabrication segments.

The Company continues to monitor these risks and adopt mitigation strategies through operational efficiencies and strategic planning.

Product Analysis and Review

The Companys product portfolio includes:

Electric Vehicles (EVs)

The EV segment is a key growth driver, with products under the SAMRAT brand catering to passenger and commercial applications. The focus remains on providing cost-effective, zero-emission mobility solutions.

Sheet Metal Components

The Company continues to supply high-quality sheet metal components to automotive and industrial customers, maintaining strong capabilities in precision manufacturing.

Dies & Tools

Rasandik offers specialized tooling solutions that support efficient and high-volume production processes.

Tailor Welded Blanks (TWB)

TWB products enhance structural strength and reduce material usage, contributing to lightweight and efficient vehicle design.

Internal control systems:

The Company continues to focus on strengthening its internal control systems, ensuring compliance with applicable laws and regulations, and improving operational efficiencies. Efforts are being made to optimize working capital, reduce costs, and enhance productivity through better process management.

Operating Results and Financial Performance

FY 2025-26 was a year of consolidation and strategic transition for the Company. Performance during the year was supported by prudent financial management, a focus on operational stability, and strategic initiatives in E-Auto business, reduction in bank borrowings leading to lower finance costs, and continued emphasis on cost optimization, quality improvement, and operational efficiency.

The Company adopted a cautious approach towards liquidity management and business sustainability while pursuing opportunities in the emerging electric mobility segment. Despite short-term challenges, the Company remains optimistic about its long-term growth prospects, supported by favourable industry trends, policy support for electric vehicles, and its ongoing efforts to strengthen the business. The management remains committed to enhancing shareholder value through sustainable growth, operational excellence, and disciplined financial management.

Industrial Relations and Human Resources

The Company continues to maintain cordial and harmonious industrial relations across all its manufacturing units, fostering a safe, inclusive, and productive work environment.

Employees are the Companys most valuable resource. The Company remains committed to attracting, developing, engaging, and retaining talent through fair employment practices, continuous learning opportunities, employee wellbeing initiatives, and a culture of performance and growth.

Cautionary Statement

The Management Discussion and Analysis (MD&A) contains forward-looking statements based on the Companys current expectations, assumptions, and projections regarding future business and economic conditions. Such statements involve risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied.

Forward-looking statements are identified by words such as "anticipate," "believe," "expect," "intend," "plan," "may," "will," and similar expressions. These statements are not guarantees of future performance and are subject to various risks and uncertainties.

The Company assumes no obligation to update or revise any forward-looking statements, except as required by applicable law. Readers are advised not to place undue reliance on such statements, which speak only as of the date of this report.