Remsons Industries Ltd Management Discussions

Global economy

The global economy continued to demonstrate resilience during FY2025-26 despite geopolitical uncertainties, evolving trade policies, elevated borrowing costs and continued volatility in commodity prices. Global economic activity remained supported by improving inflation trends, technological advancement, resilient consumer demand and continued investments in infrastructure&supply-chain diversification.

Inflationary pressures moderated in several major economies during the year, allowing central banks to gradually move towards a more accommodative monetary policy stance. However, geopolitical tensions, changes in trade policies, supply-chain disruptions and fluctuations in energy and commodity prices continued to pose challenges to global economic stability.

Emerging markets and developing economies remained important contributors to global economic growth, supported by domestic consumption, infrastructure investments and increasing participation in global manufacturing and supply chains.

Outlook

The global economic outlook remains cautiously positive. Growth is expected to be supported by easing inflation, improving financial conditions, technological investments and continued infrastructure development. However, geopolitical developments, trade restrictions, currency volatility, commodity price movements and changes in monetary policies may continue to influence global economic activity.

For automotive and auto-component manufacturers, global supply-chain diversification and increasing localisation requirements are expected to create opportunities for Indian manufacturers, while simultaneously increasing the need for technological capability, quality, cost competitiveness and supply-chain resilience.

Indias economy

India continued to remain one of the fastest- growing major economies during FY 2025-26. Economic activity was supported by resilient domestic consumption, infrastructure spending, manufacturing activity, improving rural demand and continued investments in digital and physical infrastructure.

Government initiatives aimed at strengthening domestic manufacturing, infrastructure development, employment generation and investment continued to support economic activity. The moderation in inflation and improving consumer confidence also supported demand across various sectors.

Indias growing manufacturing capabilities, expanding infrastructure, large domestic market and increasing integration with global supply chains continue to strengthen its position as an attractive destination for investment and manufacturing.

Outlook

The outlook for the Indian economy remains positive, supported by strong domestic demand, infrastructure development, manufacturing growth, increasing formalisation ofthe economy and continued policysupport.

The automotive and auto-component industries are expected to benefit from increasing vehicle penetration, replacement demand, premiumisation, electrification, localisation and Indias growing role in global automotive supply chains.

Global Automobile Industry

The global automobile industry continues to undergo significant structural transformation driven by electrification, connected mobility, advanced safety technologies, automation and changing consumer preferences.

Electric and hybrid vehicles continue to gain acceptance across major markets, while Original Equipment Manufacturers ("OEMs") are increasing investments in battery technologies, vehicle electronics, connected vehicles, Advanced Driver-Assistance Systems ("ADAS") and software-defined vehicle technologies.

The industry is also witnessing increasing focus on localisation, supply-chain diversification and cost optimisation. These developments are creating opportunities for component manufacturers with strong engineering capabilities, manufacturing expertise and the ability to support new-generation mobility platforms.

Indian Automobile Industry

The Indian automobile industry continued its growth trajectory during FY 2025-26. Domestic demand remained supported by improving consumer sentiment, infrastructure development, rural demand, financing availability and replacement demand.

Passenger vehicles continued to witness strong demand, particularly in the Utility Vehicle segment, while two-wheelers benefited from improving rural demand and consumer confidence. Three-wheelers also continued to grow, supported by urban mobility requirements and increasing adoption of alternative powertrains.

The commercial vehicle segment continued to benefit from infrastructure development, logistics activity and demand for transportation and mobility solutions.

The industry also witnessed increasing adoption of electric vehicles across two-wheelers, three- wheelers and passenger vehicles. The transition towards electric mobility is expected to create new opportunities for automotive component manufacturers, particularly in areas such as vehicle electronics, sensors, control systems, lightweight components, battery-related systemsand other EV-agnostic products.

Indian Auto Components Industry

The Indian auto-component industry continues to be an important part of the countrys manufacturing ecosystem and is closely linked to the growth of domestic automobile production as well asexports.

Indian component manufacturers are increasingly focusing on quality, localisation, cost competitiveness, technological advancement and product development to meet the evolving requirements of global OEMs. The transition towards electric, connected and software-enabled vehicles is creating opportunities for component manufacturers to diversify their product portfolios. At the same time, increasing regulatory requirements and technological changes require continuous investments in research and development, automation, testing and manufacturing capabilities.

Indias engineering talent, competitive manufacturing costs, growing domestic market and increasing participation in global supply chains provide a strong foundation for further development of the auto-component sector.

Performance of the auto industry during 2025-2026 Production sales trend

Category	2021-22	2022-23	2023-24	2024-25	2025-26
Passenger vehicles	36,50,698	45,87,116	49,01,840	50,61,164	55,39,115
Commercial Vehicles	8,05,527	10,35,626	10.67,504	10,34,947	11,70,150
Three Wheelers	7,58,669	8,55,696	9,96,159	10,50,020	13,00,805
Two Wheelers	1,78,21,111	1,94,59,009	2,14,68,527	2,38,83,857	2,66,91,916
Quadricycles	4,061	2,897	5,006	6,488	6,998
Grand Total	2,30,40,066	2,59,40,344	2,84,39,036	3,10,36,476	3,47,08,984

Domestic sales

Category	2021-22	2022-23	2023-24	2024-25	2025-26
Passenger vehicles	30,69,523	38,90,114	4218,750	43,01,848	46,43,439
Commercial Vehicles	7,16,566	9,62,468	9,68,770	9,56,671	10,79,871
Three Wheelers	2,61,385	4,88,768	6,94,801	7,41,420	8,36,231
Two Wheelers	1,35,70,008	1,58,62,771	1,79,74,365	1,96,07,332	2,17,05,974
Quadricycles	124	725	725	120	4
Grand Total	1,76,17,606	2,12,04,846	2,38,57,411	2,56,07,391	2,82,65,519

Export sales

Category	2021-22	2022-23	2023-24	2024-25	2025-26
Passenger Vehicles	5,77,875	6,62,891	6,72,105	7,70,364	9,05,200
Commercial Vehicles	92,297	78,645	65,818	80,751	94,793
Three Wheelers	4,99,730	3,65,549	2,99,977	3,06,914	4,60,567
Two Wheelers	44,43,131	36,52,122	34,58,416	41,98,403	51,80,429
Quadricycles	4,326	2,280	4,178	6,422	6,696
Grand Total	56,17,359	47,61,487	45,00,494	53,62,884	66,47,685

Government initiatives

The Government of India continued to undertake various initiatives to strengthen the automotive and auto-component ecosystem, including:

Production Linked Incentive (PLI) Scheme

The PLI scheme for the automotive and autocomponent sector is intended to strengthen domestic manufacturing capabilities, encourage investments in advanced automotive technologies and improve Indias competitiveness in the global automotive supply chain.

PM E-DRIVE Scheme

The PM E-DRIVE initiative is aimed at accelerating the adoption of electric mobility and supporting the development of the EV ecosystem, including electric two-wheelers, three-wheelers, passenger vehicles and associated charging and testing infrastructure.

Make in India and Atmanirbhar Bharat

The Governments continued focus on domestic manufacturing and localisation is encouraging automotive companies to increase local sourcing and manufacturing of critical automotive components.

Export Promotion Initiatives

Various export promotion initiatives continue to support Indian manufacturers in accessing international markets, participating in global supply chains and increasing the export of automotive components.

These initiatives are expected to provide opportunities for Indian automotive component manufacturers to expand their domestic and international presence.

Expansion of Electric Vehicle Ecosystem

The rapid adoption of electric vehicles is creating opportunities across the automotive value chain. The Companys EV-agnostic product portfolio provides opportunities to participate in the evolving mobility ecosystem without being restricted to a single powertrain technology.

Global Supply Chain Diversification

Global OEMs are increasingly diversifying their supply chains to improve resilience and reduce concentration risk. Indias engineering capabilities, cost competitiveness and manufacturing ecosystem provide opportunities for Indian component manufacturers to increase their share in global supply chains.

Strong Domestic Demand

Indias large domestic automobile market, increasing vehicle penetration, replacement demand, infrastructure development and premiumisation provide a strong long-term growth opportunity for automotive component manufacturers.

Product and Segment Diversification

The Companys presence across control cables, automotive components and emerging mobility applications provides opportunities for product diversification and expansion into higher-value product segments.

The Companys strategic initiatives, including its investment in new businesses and technologies, are intended to broaden its product portfolio and strengthen its position across the automotive valuechain.

Export Growth

Increasing acceptance of Indian automotive components in international markets provides opportunities for the Company to expand its export business and strengthen its global customer base.

Aftermarket Opportunity

The growing vehicle population in India is expected to support long-term demand in the aftermarket. Increasing formalisation and digitalisation ofthe aftermarket ecosystem may further improve opportunities for organised component manufacturers.

Geopolitical and Trade Uncertainties

Geopolitical developments, trade restrictions, tariffs and changes in international trade policies may affect global demand, supply chains and the Companys export business.

Input Cost Volatility

Fluctuations in the prices of steel, aluminium, polymers, energy and other raw materials may impactmanufacturing costsand margins.

Technology Disruption and Capital Intensity

The transition towards connected vehicles, EVs, ADAS and other advanced automotive technologies requires continuous investment in research and development, automation and manufacturing capabilities.

Changing Emission and Safety Regulations

Increasing emission, safety and vehicle performance requirements require automotive component manufacturers to continuously upgrade their products, processes and testing capabilities.

Foreign Exchange Risk

The Companys international operations and export activities expose it to foreign currency fluctuations. Effective treasury and risk- management practices are therefore important to mitigate the impact of exchange-rate volatility.

Competition

The automotive component industry remains highly competitive, with domestic and international players competing on quality, technology, cost, delivery and customer service.

Outlook

The outlook for Remsons Industries Limited remains positive, supported by the growth ofthe Indian automobile industry, increasing vehicle production, electrification, product diversification and opportunities in domestic and international markets.

The Companys focus on expanding its product portfolio, strengthening manufacturing capabilities, developing new customer relationships and increasing its presence in emerging automotive segments is expected to supportsustainable long-term growth.

The Companys acquisition and investment initiatives are also expected to provide opportunities for diversification and participation in new product categories.

The Company remains focused on improving operational efficiency, optimising its product mix, strengthening its balance sheetand maintaining prudentfinancial discipline.

Company Overview

Remsons Industries Limited isoneof Indiasestablished manufacturers of control cablesand automotive components. The Company caters to a diverse range of vehicle segments, including two-wheelers, three- wheelers, passenger vehicles, commercial vehicles, off-highway vehicles and other mobility applications. The Company operates through manufacturing facilities in India and overseas and serves a broad customer base comprising Original Equipment Manufacturers ("OEMs"), dealers and customers in international markets.

The Companys product portfolio and engineering capabilities enable it to provide customised and precision-engineered solutions to customers across various automotive applications.

The Company continues to focus on product development, manufacturing excellence, customer engagement, exports and strategic expansion. Its EV-agnostic product portfolio positions it to participate in the changing mobility ecosystem while maintaining relevance across conventional and emerging vehicle platforms.

The Companys strategy continues to focus on product diversification, technological advancement, operational efficiency, global expansion and development of higher-value automotive products.

250+Total Dealers, 20+ Export countries, 7+ State of Arts manufacturing facilities.

Discussion on financial performance with respect to operational performance Financial highlights with respect to operational performance

Particulars	Standalone		Consolidated
	2025-26	2024-25	2025-26	2024-25
Total revenue	33,631.90	28,198.04	47,394.75	37,985.69
EBITDA	3,355.13	2,805.84	5,478.28	4,062.92
Profit before tax	1,595.09	1,501.43	2,769.24	2,244.80
Profit after tax	1,180.92	1,107.84	1,805.05	1,436.84
EPS	3.39	3.18	5.18	4.12

 

Particulars	Standalone			Consolidated
	2025-26	2024-25	% Change	2025-26	2024-25	% Change
DebtorsTurnover	6.51	6.23	4.49	6.17	5.60	10.24
InventoryTurnover	7.42	6.84	8.48	6.12	6.08	0.71
Interest Coverage Ratio	3.34	4.08	-18.14	4.26	4.51	-5.54
Current Ratio	1.32	1.33	-0.75	1.31	1.48	-11.31
Debt equity ratio	0.61	0.58	5.17	0.63	0.63	-0.33
Operating profit margin %	6.87	7.15	-3.92	7.72	7.66	0.78
Net profit margin %	3.56	3.98	-10.55	3.85	3.82	1.05

Reason for change ifany

1: Interest Coverage Ratio improved due to decrease in Finance Cost & increase in operating Margin.

2: Debt Equity Ratio increase due to addition of Term loan ofl5Cr.

Details of any change in Return on Net Worth as compared to the immediately previous fi nancial year along with a detailed explanation thereof

The Return on Net Worth for the financial year 2025-26 is 10.15 %, down byl85 basis points from 12.00% in the financial year 2024-25, due to increase in average equity base as compared to the previousfinancialyear.

Risks and Concerns

The Company operates in an environment influenced by various internal and external factors that may affect its growth, profitability and financial performance.

Key risks include geopolitical uncertainties, changes in trade policies, fluctuations in raw material prices, inflationary pressures, foreign exchange volatility, changes in customer demand and the cyclical nature of the automotive industry.

The Companys dependence on OEM production schedules also exposes it to changes in vehicle demand and production volumes. Increasing technological requirements, electrification, connected mobility and evolving safety and emission regulations require continuous investments in product developmentand manufacturing capabilities.

The Companys strategy of expanding into new products, geographies and businesses also creates integration, execution and regulatory risks.

The Company has a well-defined risk management framework covering risk identification, assessment, monitoring and mitigation. The risks are periodically reviewed by the management and the Board, and appropriate mitigation measures are undertaken.This approach is consistent with the risk-management framework described in the earlier report.

Material developments in human resources

Human resources continue to remain an important element of the Companys growth strategy. The Company remains focused on developing a skilled, capable and engaged workforce through employee development, training, leadershipdevelopmentand capabilitybuilding initiatives.

During FY 2025-26, the Company continued to focus on strengthening technical, managerial and operational capabilities to support its growth in automotive, advanced mobility and emerging product segments.

The Company believes that employee engagement, continuous learning, leadership development and a strong organisational culture are critical to sustaining long-term competitiveness.

243 Total Employee strength

4yearsin a rowGPTWcertified

Internal control systems and their adequacy

The Company has established adequate internal control systems commensurate with the nature, size and complexity of its business operations.

The internal control framework includes policies and procedures designed to ensure reliability of financial reporting, compliance with applicable laws and regulations, safeguarding of assets, operational efficiencyand appropriate utilisation of resources.

The internal audit function periodically reviews operational and financial controls across various locations of the Company. The observations of the Internal Auditors are placed before the Audit Committee and appropriate corrective measures are undertaken by the management wherever required.

The Audit Committee periodically evaluates the adequacy and effectiveness of the internal control systems and monitors the implementation of corrective actions

Cautionary statement

Certain statements in this Management Discussion and Analysis Report may constitute forward-looking statements within the meaning of applicable laws and regulations. Such statements are based on certain assumptions, expectations and projections concerning future events and financial performance.

Actual results may differ materially from those expressed or implied in such forward-looking statements due to various factors, including changes in economic conditions, automotive industry demand, government policies, regulatory requirements, raw material prices, foreign exchange movements, competition,technological developments,geopolitical conditionsand other risksand uncertainties.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of future events or otherwise.