Readymix Construction Machinery Ltd Management Discussions

ECONOMIC SCENARIO

GLOBAL ECONOMIC OVERVIEW

The global economy in 2025 faces considerable challenges, marking one of its most difficult periods since the 2008 financial crisis. The International Monetary Fund (IMF), in its April 2025 World Economic Outlook, reports that the global economy is slowing amid heightened trade tensions, policy uncertainty, and persistent inflationary pressures. The IMF projects global GDP growth at 2.8% in 2025 and 3.0% in 2026, both downward revisions from earlier forecasts. This deceleration is attributed primarily to the impact of recent widespread tariff hikes, especially by the United States, and the resulting uncertainty in global trade systems. Inflation, while moderating from previous peaks, is expected to remain above central bank targets in many advanced economies. The IMF forecasts global inflation to decline gradually, but at a slower pace than previously anticipated, with headline inflation projected at 4.0% in 2025 and 3.3% in 2026. These dynamics underscore a challenging environment for policymakers, who must balance growth concerns with the need to anchor inflation expectations and maintain financial stability.

Outlook

Looking forward, the IMF cautions that risks to the global economic outlook remain tilted to the downside. Escalating trade barriers, continued policy unpredictability, and financial market vulnerabilities could further dampen growth and keep inflation elevated. The IMF

warns that if downside risks materialize such as a further escalation in trade tensions or a sharp correction in financial markets global growth could fall below 2.0% in 2025, with a significant probability that inflation could exceed 5.0%. On the upside, improved labour force participation, productivity gains from technology adoption, and a de-escalation of trade disputes could support stronger growth and faster disinflation. Policymakers are advised to rebuild fiscal and monetary buffers, address structural weaknesses, and enhance international cooperation to navigate this period of heightened uncertainty.

Source:

1.https://www.efginternational.com/ insights/2025/imf_a_critical_ juncture_ amid_policy_shifts.html

2. https://www.reuters.com/business/imf-cuts-growth-forecastsmost-countries-wake-century-high-us-tariffs-2025-04-22/.

3.https://www.lemonde.fr/en/economy/ article/2025/04/22/imfforecasts-global-slowdown-the-economy-is-entering-a-new-erasays-chief-economist_6740512_19.html.

INDIAN ECONOMIC REVIEW AND OUTLOOK

India remains the fastest-growing major economy globally, with real GDP growth projected at 6.2% for 2025 and 6.3% for 2026. The IMF attributes this robust performance to strong domestic demand, ongoing structural reforms, and resilient services sector growth, particularly in information technology and digital services. Inflation has moderated significantly, with headline inflation expected to average 4.5% in 2025, comfortably within the Reserve Bank of Indias target range. The countries prudent monetary policy, improved agricultural output, and effective supplyside interventions have contributed to this price stability. Despite global trade uncertainties and external shocks, Indias macroeconomic fundamentals remain solid, supported by a healthy financial sector and sound fiscal management.

The IMF maintains a positive outlook for India, emphasizing several key strengths. Continued government investment in infrastructure, a rapidly expanding digital economy, and a favourable demographic profile are expected to sustain high growth rates. The IMF also notes that Indias ongoing reforms in labour, manufacturing, and financial markets will likely enhance productivity and attract further foreign investment. Inflation is projected to remain manageable, supported by stable food prices and effective policy measures. Furthermore, Indias growing role in global supply chains and its ability to attract multinational corporations seeking diversification make it a key player in the evolving global economic landscape. While challenges such as employment generation and rural development persist, the IMF underscores Indias resilience and strong medium-term growth prospects.

Sectoral Overview

Agriculture: The agriculture sector remains a cornerstone of the Indian economy, benefiting from continued policy support and targeted budget allocations. The Union Budget 2025 26 introduced the ‘Prime Minister Dhan- Dhaanya Krishi Yojana covering 100 districts to boost productivity, crop diversification, post-harvest storage, and irrigation. A comprehensive ‘Rural Prosperity and Resilience programme will address underemployment through skilling, investment, and technology, with a focus on rural women and small farmers. The government also launched a six-year "Mission for Aatmanirbharta in Pulses" and increased Kisan Credit Card loan limits to 5 lakh, strengthening financial security for farmers.

Manufacturing and MSMEs: Indias manufacturing sector is entering a transformative phase, supported by the National Manufacturing Mission and Production Linked Incentive (PLI) schemes. The 2025 26 budget expands credit access and financial flexibility for MSMEs, increases investment and turnover limits for MSME classification, and enhances credit guarantees. The government is also incentivizing domestic production of clean-tech products (solar PV modules, EV batteries, wind turbines) and providing duty exemptions for critical minerals and battery components. These measures aim to position India as a global manufacturing and innovation hub. Services: The services sector continues to be the primary driver of growth, led by IT, digital services, and financial technology. Rapid digitization, a vibrant startup ecosystem, and policy support for innovation have made India the worlds third most preferred destination for technology investments.

Infrastructure: Capital expenditure has been ramped up, with 11.21 lakh crore allocated for infrastructure about 3.1% of GDP. Major initiatives include the PM Gati Shakti plan, National Infrastructure Pipeline, and a 1 lakh crore Urban Challenge Fund to transform cities and improve water and sanitation infrastructure. The governments asset monetization plan (10 lakh crore for 2025 30) and expanded PPP project pipeline are expected to unlock further private investment.

Energy and Green Transition: Significant budgetary allocations support the National Manufacturing Mission for clean-tech, the National Green Hydrogen Mission, and solar rooftop installations. The government has set ambitious targets for nuclear and renewable energy, introduced tax exemptions for battery storage, and is modernizing the power grid to support industrial growth and sustainability. Exports: Exports are expected to surpass US$800 billion in FY25, with a focus on integrating MSMEs into global supply chains and boosting competitiveness in electronics, textiles, automotive, and chemicals. The Export Promotion Mission and Bharat Trade Net digital platform will streamline trade and documentation, improving ease of doing business and global market access. While challenges remain such as rural distress, job creation, and global uncertainties but the governments reform agenda, targeted sectoral initiatives, and prudent fiscal management provide a strong foundation for sustained, inclusive growth.

Source:

1. https://www.imf.org/-/media/Files/ Publications/WEO/2025/April/ English/ text.ashx 2. https://www.reuters.com/world/india/ indias-gdp-grows-74-janmarch-qtr-fastest-year-2025-05-30/?utm 3. https://www2.deloitte.com/us/en/ insights/economy/asia-pacific/india-economic-outlook.html 4. https://www.pib.gov.in/PressNoteDetails. aspx?NoteId=154660&ModuleId=3 5. h t t p s : / / w w w . p i b . g o v . i n / PressReleasePage.aspx?PRID=2098352 6. https://www.plantemoran.com/ explore-our-thinking/insight/2025/02/ indias-union-budget-2025-2026-confirmspriorities-of-governments-term 7. https://www.india-briefing.com/news/ indias-economic-outlook-2025-gdp-forecast-35580.html/ 8. h t t p s : / / k p m g . c o m / i n / e n / insights/2025/05/decoding-indianeconomy.html 9. https://www.india-briefing.com/news/ indias-union-budget-2025-26-highlights-reforms-to-

MANUFACTURING SECTOR IN INDIA

Manufacturing is emerging as an integral pillar in the countrys economic growth, thanks to the performance of key sectors like automotive, engineering, chemicals, pharmaceuticals, and consumer durables. The Indian manufacturing industry generated 16-17% of Indias GDP pre-pandemic and is projected to be one of the fastest growing sectors. The machine tool industry was literally the nuts and bolts of the manufacturing industry in India. Today, technology has stimulated innovation with digital transformation a key aspect in gaining an edge in this highly competitive market. Technology has today encouraged creativity, with digital transformation being a critical element in gaining an advantage in this increasingly competitive industry. The Indian manufacturing sector is steadily moving toward more automated and process-driven manufacturing, which is projected to improve efficiency and enhance productivity.

India has the capacity to export goods worth US$ 1 trillion by 2030 and is on the road to becoming a major global manufacturing hub. With 17% of the nations GDP and over 27.3 million workers, the manufacturing sector plays a significant role in the Indian economy. Through the implementation of different programmes and policies, the Indian government hopes to have 25% of the economys output come from manufacturing by 2026.

India now has the physical and digital infrastructure to raise the share of the manufacturing sector in the economy and make a realistic bid to be an important player in global supply chains. A globally competitive manufacturing sector is Indias greatest potential to drive economic growth and job creation this decade. Due to factors like power growth, long-term employment prospects, and skill routes for millions of people, India has a significant potential to engage in international markets. Several factors contribute to their potential. First off, these value chains are well positioned to benefit from Indias advantages in terms of raw materials, industrial expertise, and entrepreneurship. Second, they can take advantage of four market opportunities: expanding exports, localising imports, internal demand, and contract manufacturing. With digital transformation being a crucial component in achieving an advantage in this fiercely competitive industry, technology has today sparked creativity. Manufacturing sector in India is gradually shifting to a more automated and process driven manufacturing which is expected to increase the efficiency and boost production of the manufacturing industry.

India is gradually progressing on the road to Industry 4.0 through the Government of Indias initiatives like the National Manufacturing Policy which aims to increase the share of manufacturing in GDP to 25 percent by 2025 and the PLI scheme for manufacturing which was launched in 2022 to develop the core manufacturing sector at par with global manufacturing standards.

India is planning to offer incentives of up to Rs. 18,000 crores (US$ 2.2 billion) to spur local manufacturing in six new sectors including chemicals, shipping containers, and inputs for vaccines. Indias mobile phone manufacturing industry anticipates creating 150,000 to 250,000 direct and indirect jobs within the next 12-16 months, driven by government incentives, and increased global demand. Major players like Apple and its contract manufacturers, along with Dixon Technologies, are expanding their workforce to meet growing.

The manufacturing sector of India has the potential to reach Rs. 87,57,000 crores (US$ 1 trillion) by FY26.

Source: https://www.ibef.org/industry/ manufacturing-sector-india.

Indias construction equipment industry

Indias construction equipment (CE) industry saw a modest 3% growth in FY 2024-25, reaching 140,191 units sold, driven by a significant 10% surge in exports that compensated for a more subdued domestic market. This performance was impacted by the general elections, which caused a slowdown in project awards during the first half of the fiscal year. Additionally, the implementation of CEV Stage V emission norms in January 2025 also influenced sales, particularly pre-buying activity ahead of its implementation. Despite these challenges, Q3 FY25 showed strong quarter-on-quarter growth, and the industry holds an optimistic outlook for the coming quarters due to continued government infrastructure spending and the introduction of new technologies. On a quarter-on-quarter basis, total sales for Q1 FY25 were 29% lower than the 40,965 units sold in Q4 FY24. Of the 28,902 units sold in Q1 FY25, 26,020 were in the domestic market, while 2,882 units were exported. In detail, earthmoving equipment accounted for 19,858 units sold, followed by material handling equipment at 3,760 units, concrete equipment at 3,199 units, road construction equipment at 1,457 units, and material processing equipment at 628 units. Month-on-month sales in June 2024 reached 9,363 units, reflecting a 2% decrease from May 2024 but a 5% increase compared to June 2023.

Source:

1. https://www.i-cema.in/wp-content/ uploads/2025/04/Newsletter-9-Final-for-upload-spread.pdf.

2. https://www.ibef.org/news/construction-equipment-sales-rise-5-to-28-902-units-in-q1-fy25-icema.

In FY23, the market size of Indias cement industry reached 3.96 billion tonnes and is expected to touch 5.99 billion tonnes by 2032, exhibiting a CAGR of 4.7% during 2024-32. As India has a high quantity and quality of limestone deposits throughout the country, the cement industry promises huge potential for growth. India has a total of 210 large cement plants, of which 77 are in Andhra Pradesh, Rajasthan, and Tamil Nadu. Nearly 32% of Indias cement production capacity is based in South India, 20% in North India, 13% in Central, 15% in West India, and the remaining 20% is based in East India. Indias cement production reached 374.55 million tonnes in FY23, a growth rate of 6.83% YoY. In December 2024, cement volumes touched crore (US$ 685.12 million) in FY25, while the imports were Rs. 1,543 crore (US$ 181.23 million) for the same period.

37.2 million metric tonnes, marking a 4% rise compared to last year. In FY25 (April to December), total volumes reached 319 million tonnes, up 3% year-on-year.

The Indian cement industry projects an 8% increase in sales by CY25, fuelled by government infrastructure investments, although it faces challenges such as reduced sales realization in CY24.

Indias cement consumption stood at 445 metric million tonnes (MMT) in FY24 and is expected to rise to 670 Metric million tonnes (MMT) by 2030, driven by robust infrastructure and housing demand.

Indias export of panel cement, clinkers, and asbestos cement products stood at Rs. 5,845

The Indian cement industry is proceeding with expansion plans and capacity additions, despite dampened demand expected to persist through the first half of FY25. Cement giants foresee a modest 6-7% volume growth this fiscal year, even though the period has begun with a pricing downturn.

According to ICRA, cement demand is expected to stay strong, with volumes likely to grow by 4 5% to around 445-450 million tonnes in FY25, and by 6 7% to 475 480 million tonnes in FY26.

The eastern states of India are likely to be the newer and untapped markets for cement companies and could contribute to their bottom line in future. In the next 10 years, India could become the main exporter of clinker and grey cement to the Middle East, Africa, and other developing nations of the world. Cement plants near the ports, for instance, the plants in Gujarat and Visakhapatnam, will have an added advantage for export and will logistically be well-armed to face stiff competition from cement plants in the interior of the country. Indias cement production capacity is expected to reach 550 MT by 2025. A number of foreign players are also expected to enter the cement sector owing to the profit margins and steady demand.

Cement consumption is expected to reach 450.78 million tonnes by the end of FY27. Source: https://www.ibef.org/industry/ cement-india.

BUSINESS AND FINANCIAL OVERVIEW Our Company was originally incorporated as a private limited Company under the name "Readymix Construction Machinery Private Limited" on January 24, 2012 under the provisions of the Companies Act, 1956 with the Registrar of Companies, Maharashtra, Pune ("RoC"), bearing CIN: U29248PN2012PTC142045. Thereafter on July 31, 2012, our Company took over the business of partnership firm, M/s Readymix Construction Machinery.

Subsequently, our Company was converted into a public limited company, pursuant to a special resolution passed by our Shareholders at the Extra Ordinary General Meeting held on June 21, 2024 and consequently, the name of our Company was changed from ‘Readymix Construction Machinery Private Limited to ‘Readymix Construction Machinery Limited and a fresh certificate of incorporation consequent upon conversion to public company was issued by the Registrar of Companies, Central Processing Centre on August 02, 2024. Our Companys Corporate Identity Number is L29248PN2012PLC142045. Readymix (‘RMX) is an engineering-led company, offering engineering solutions for design, development, fabrication and installation of various plant & machineries along with related equipments like Dry Mix Mortar Plant, Support equipment for Readymix Concrete Plant, High capacity Silos, Artificial Sand Plants (Crusher), Wall Putty Plants, Other Customized Projects etc., catering to industrial requirements of various industries like cement, concrete, crushing, construction and building materials etc. We also provide complete end-to-end turnkey solutions from conceptualization, development, fabrication, assembling, testing, logistic support, final erection and installation of various plant & machineries along with related equipments at customers site and other incidental and allied activities related therewith along with after sales services which includes repair & maintenance services.

Further, Readymix also provide Annual Maintenance Service to our customers to close any possible wear and tear, providing updates and upgrades for plant operational software along with scheduled inspection & maintenance visits. Additionally, we provide Business Consultancy Services which includes innovative design, engineering, technology, and operational challenges. From initial concept to final fabrication and commissioning, our solutions help reduce capital costs, improve efficiency, enhance plant performance, and increase automation. We also offer online support for equipment installation at customer sites and Recipe Consultancy Services to evaluate ingredient feasibility and optimize recipes.

The Company had initiated the activity of Research & Development in the Financial Year 2022-23. The aim was to develop the components of the machines in house in replacement of the ones being bought from outside suppliers. The Management had envisaged that this would substantially add to the Margins of the Company and would also leave them with more scope for customization. Owing to the same, in the span of two years, the Company could develop more than 35 products in house and the same has resulted in substantial savings in its costs. This has substantially impacted the Gross Margins of the Company.

RMX currently operate through registered office situated at Office No. 401, 3rd and 4th Floor, Plot No. 209, Survey No. 96/2B, Right Bhusari Colony, Paud Road, Kothrud, Pune-411038, Maharashtra, India and fabrication unit situated at

Plant I: Plot No. A-44/1/A-52 & A- 53, Rajmata Jijau Mahila Industrial Pre. Co-op Soc. Ltd, Chakan Industrial Area (MIDC), Phase-II, Vasuli, Chakan, Pune-410501, Maharashtra, India, admeasuring 10,764 Sq. Ft. Plant II: Gat No. 1541 & 1542, Sonawanewasti, Chikhali,Taluka: Haveli, Dist: Pune: 411062, Maharashtra, India RMX are backed by a designing team of 120 employees as on March 31, 2025. Design & Development is a key element of our ability to offer customized products to our customers and is a critical aspect of product development which is integral to our process optimization to fulfil the demand of customers across diverse industries. Our team uses Siemens Solid Edge Software and ARES standard Auto CAD Software for design and development. Our customers are spread across various parts of India and we have also exported our products to Nepal. We have sold various plant & machineries to over 200 customers across various industries in last three financial years.

Its brief financial performance for 2024-25 is given below:

(Rs. in Lakhs)

	For the Year ended
Particular	March 31, 2025	March 31, 2024	March 31, 2023
Revenue from Operations	7,327.58	6,979.36	5,499.51
EBITDA	1,463.71	1,380.69	502.413
Depreciation and Finance	232.15	150.02	119.94
Cost
Profit Before Tax	1,254.22	1,232.29	382.65
Tax Expenses	320.31	303.81	91.95
Profit After tax (PAT)	933.91	928.48	290.7

Details of significant changes (i.e. change of 25% or more -our financial year) in Key Financial Ratios, along with detailed explanations thereof including:

Particular	March 31, 2025	March 31, 2024	Change in %	Remarks
Current Ratio	3.59	1.79	100%	The ratio has improved because the Com- pany has utilized majority of the funds raised through the IPO in funding its working capital
Debt - Equity Ratio	0.06	0.42	86%	The ratio has improved because the Compa- ny has utilized Part of the IPO proceeds for repayment of its Debts and thus the Debt Equity Ratio has substantially come down during the year
Debt Service	6.74	6.46	4%	-
Coverage Ratio
Return on Equity Ratio	0.23	0.65	-64%	The Ratio has impacted as the pro??ts during the year has not substantially changed, how- ever owing to the IPO during the year, the Average equity has substantially gone up.
Inventory Turnover Ratio	5.16	5.32	3%	-
Trade Receivables Turnover Ratio	2.2	4.48	-51%	The ratio has been impacted as the average trade receivables have substantially gone up as Majority of the Sales was achieved by the Company in the last quarter.
Trade Payables Turnover Ratio	4.66	5.39	13%	-
Net Capital Turnover Ratio	1.28	4.66	-73%	The ratio has impacted as the turnover during the year has not substantially changed, however owing to the IPO, net working capital has substantially gone up.
Net ProfitRatio	0.13	0.13	-4%	-
Return on Capital Employed	0.23	0.52	-56%	The Ratio has impacted as the EBIDTA during the year has not substantially changed, however owing to the IPO during the year, the Capital employed has substantially gone up.
Return on Investment	0.14	0.35	-59%	The Ratio has impacted as the Profitt after tax during the year has not substantially changed, however owing to the IPO during the year, the Capital employed has substantially gone up.

SWOT ANANLYSIS:

Globally, India has become one of the key potential markets for construction equipment. Further, it is estimated that by 2025, Indias construction market will emerge as the third largest in the world, which would exhibit huge demand for construction equipment in the coming years. Therefore, the construction equipment companies in India have all the reasons to smile. However, their way to success is not easy and there lay many strengths, weaknesses, opportunities and threats on their way.

Strength

• The high construction and infrastructural growth, technological developments and their adaptations and rapid urbanisation is fuelling the growth of construction equipment industry and the companies in the segment.

• The demand for construction equipment is also growing owing to increasing government spending on infrastructure developments including residential and non- residential projects. This is also helping the construction equipment companies to scale up their businesses.

• Growing industrialization, commercial hubs and expansion of roads, flyovers, metros, airports, railways and highways across the country is also spurring the market for construction equipment and propelling the growth of construction equipment companies in India.

Weakness

• Construction equipment manufactured in India are still not comparable to the ones manufactured by international players on the grounds of advanced technology used and new features. Hence, there is a long way to go for the Indian construction equipment manufacturers.

• The construction equipment companies in India are not well-equipped to cope up with the heavy demand for construction equipment in the country.

• Many construction equipment companies in India do not have a strong brand presence in the country as well as in the world.

Opportunities

• The end-users are demanding world-class technology for better fuel e? ciency, higher productivity and pro??tability, thus, construction equipment manufacturers in India can come up with innovative solutions to meet customer expectations.

• Demand for construction equipment is likely to rise as a result of growth in traditional end-user industries, including construction and mining. Thus, the construction equipment manufacturers in India can tap these markets.

• Growing urbanisation is also set to positively impact the growth of construction equipment industry, thus promoting the growth of construction equipment companies in India.

• Government of Indias Make in India campaign, 100 ‘Smart Cities project and ‘Housing for All scheme covered in over 300 cities would also provide the necessary boost to the demand for construction equipment in the years to come.

• In future, collaborating with other equipment companies could also be the key to success. Alliance across industry due to the entry of more diverse and technology-driven products into the marketplace could help. Further, major agreements, contracts, joint ventures and partnerships between the construction equipment companies in India can aid the manufacturers to create a large customer and partner base and introduce new products in the market.

Threats

• Many new construction equipment players have emerged in the country and many more will hit the ground in the coming years. Thus, the construction equipment companies in India will have to face stiff competition.

• While construction equipment manufactures in India will continue to put in the market increasingly sophisticated machines in greater numbers, the industry might have to face an increasing shortage of trained manpower to operate and service these machines, thus impacting sales.

RISK AND CONCERN:

The Company is responsible for handling risks, which forms a part of good corporate governance. As part of our group values, adequate risk management ensures that risks are identi??ed early and mitigation process is de??ned.

Various types of risks that can be categorized into external risks and internal risks impact the Company.

External Risks:

• Industrial risks like change in government regulations or their implementation could disrupt our operations, unethical marketing, dishonest advertising, questionable pricing practices, inaccurate claims with regards to safety and e? cacy of the product, Political instability, Natural calamities, Terrorist attacks, civil unrests etc.

Internal Risks:

• The Company can improve operational performance and create long-term value for shareholders on the back of superior consumer innovation as well as persistent focus on pro??table growth and cost e? ciency. The internal departments of the Company proactively monitor and manage the operational risks at various levels.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys internal audit system has been continuously monitored and updated to ensure that assets are safeguarded, established regulations are complied with and pending issues are addressed promptly. The audit committee reviews reports presented on a routine basis. The committee makes note of the observations and takes corrective actions wherever necessary. It maintains constant dialogue to ensure that internal control systems are operating effectively.

HUMAN RESOURCE MANAGEMENT:

To build a talent pool, it becomes necessary for the human resources function to partner with the various business segments so as to create a work ecosystem that shall have on board, the right talent and therefore nurture them to deliver superior performances. As an organization committed towards motivating its employees, the Company believes in recognizing and rewarding its employees for their extra-ordinary contributions through quarterly and annual rewards programs. It also recognizes employees who have contributed to the organization. RMX focused on building a high performance culture with a growth mindset. Developing and strengthening capabilities of all employees has remained on ongoing priority.

CAUTIONARY STATEMENT:

Statements in this report describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable laws and regulations. The actual results may differ materially from those expressed in this statement because of many factors like economic condition, availability of labour, price conditions, domestic and international market, changes in Government policies, tax regime, etc.