A. OUTLOOK
INTRODUCTION
Revathi Equipment Limited, a drill manufacturing company, was incorporated in 1977. Since its inception, Revathi Equipment Limited has consistently manufactured and supplied more than 2000 drills of different capacities. It delivers quality holes drilled safely and accurately at the lowest cost, delighting the mining giants in India and across the globe. Following the NCLT order dated 14th June 2023 approving the Composite Scheme of Arrangement, the drilling equipment business of Revathi Equipment Limited was demerged and transferred to a Company named Renaissance Corporate Consultants Limited (Resultant Company), which was subsequently renamed to Revathi Equipment India Limited (REIL). The shares of the REIL was listed on
BSE Limited and National Stock Exchange of India Limited with effect from 11th September 2024.
The Company is in the business of manufacturing and marketing Blast Hole Drills (Rotary and DTH, Diesel / Electric driven) for mining applications, Jackless Drills for Construction and Mining applications, Water Well Drills, Hydro-Fracturing Units and Exploratory Drills.
REILs drilling rigs are used extensively in mining operations of coal, cement, gold, construction, iron ore, copper, etc. by its diversified customer base. The Company offersdrilling equipment with various hole sizes and comprehensive Maintenance and Service support to the customers for all their drilling equipment. We provide high performing products and services that increase our customers productivity and safety, extend uptime and reduce costs and environmental impact REILs customers includes some of the worlds largest mining companies, Coal India Limited, Tata Steel, NMDC and Vedanta to name a few. REIL has also sold its drills to reputed mining companies in Australia, Brazil, Indonesia, Jordan, Morocco, South Africa, Serbia, Tunisia, the USA, and Zimbabwe. The Companys manufacturing plant is located at Pollachi Road, Malumachampatti P O., Coimbatore - 641 050, with an annual installed capacity to produce 60 drill machines. The companys major revenue is derived from the sale of drill machines and related spares. The Companys business runs in tandem with the coal and metal mining industries. Coal sector plays a crucial role in a country like India where energy security is a critical pillar for sustained economic growth and prosperity. The energy security of the country and its prosperity are integrally linked to efficient and effective use of its most abundant, affordable and dependent fuel, coal. In Indian proportion of economy, Coals significant demand is for power generation in the thermal power sector. The balance demand is through non- regulated sectors comprising steel, cement, captive power plants etc. It is envisaged that new demand from emerging sectors like electric vehicles and demand from the chemicals sector etc. would also add to the existing demand for coal. Today India is the 2nd largest producer of coal in the world. The all-India coal production during 2023-24 stood at 997.25 MT with a positive growth of
11.65%. Coal Mining equipment is therefore expected towitnesssignificantgrowth with increased demand for electricity generation.
Apart from Coal, the rise in demand for metals and minerals drives demand for surface drilling rigs. Minerals such as iron ore, copper, gold, silver, zinc, nickel, bauxite, and many more are in high demand owing to the rise in industrialisation driven by economic growth in many countries. Furthermore, copper, gold, and silver are extensively used in the electronics and electrical industry to manufacture transformers, wires, cables, smart devices, and other products.
All of the above mentioned factors are expected to fuel demand for mining equipment and the Company aimstomakesignificantgain from this increased demand.
INDUSTRY OUTLOOK - INDIAN ECONOMIC CONTEXT
In India, the mining sector is one of the core industries of the economy, and it has witnessedsignificantgrowth in the past few years.
Manufacturing and mining sectors recorded a higher relative growth performance last year. The mining policy has been introduced to increase revenue, production, employment, and operations in order to boost economic output. Government-led investment in infrastructure, rapid urbanisation, rising preference for personal mobility, growth in the capital goods sector, and the governments focus on making India ‘Atmanirbhar are expected to stimulate the demand for Cement, Steel, iron ores, and other metals in India. India produces nearly 95 minerals, including 4 fuel, 10 metallic, 23 non-metallic, 3 atomic, and 55 minor minerals (including building and other materials). In terms of production, India ranks 2nd in Steel (crude/liquid), 3rd in aluminium (primary) & Chromite; 4th in iron ore, lead (refined) & Zinc slabs; 5th in Bauxite, 7th in Manganese ore, 13th in copper (refined), 16th in apatite & rock phosphate and
17th in Magnesite.
India holds a strong foothold in the global mining sector against the backdrop of a fair advantage in production and conversion costs in steel and alumina. Indias strategic geographic location enables export opportunities to develop. It is estimated that the number of reporting mines in India is 1,245, of which mines for non-metallic minerals are 720, and mines for metallic minerals were estimated at 525. The Government initiatives have allowed/ encouraged numerous foreign companies to set up their facilities in India. The Social Security programs of the Government are expected to increase the purchasing power of an average Indian consumer, which would further drive demand and spur development, thus benefiting investors. Under its ‘Make in India initiative, the Government of India is trying to boost the contribution made by the manufacturing sector to take it to 25% of the GDP.
Indias mining equipment (ME) industry is poised for significant growth, with localisation levels expected to increase to 70-80 per cent in the next 5-7 years. Several factors are supporting the drive towards greater localisation. The Mining Equipment industry today has high import dependence, with approx. 50 per cent of its components (by value) being imported from the OEMs based out of China, Japan, South Korea, Germany, among others. The industry is also dependent on imports for certain key raw materials like specialty steel. As per the report of Indian Independent and Professional Investment Information and Credit Rating Agency (ICRA) this shift towards localization could help the industry save nearly USD 3 billion in foreign exchange annually and boost Indias cost competitiveness, enhancing its export potential. The ME industry, which is riding on the back of Indias infrastructure-led growth, has already grown at a compound annual growth rate (CAGR) of 12 per cent over the past decade (FY2015-FY2024), reaching 1.36 lakh unit sales in FY2024. The growth of the mining industry is driven inter alia by development in the automotive & transport industry, advancements in processing equipment and manufacturing technologies, and an increase in the usage of minerals in various industries such as building & construction and packaging. Furthermore, domestic demand for copper and aluminium is expected to be strong, backed by an improved industrial and infrastructure growth outlook. The Governments thrust on the energy and power sector, Smart Cities, ‘Housing for All program, harnessing renewable energy resources, electric vehicles, infrastructure development, Atmanirbhar Bharat Abhiyan, and Make in India spells good news for the Indian mining industry and for the mining equipment manufacturing industry. The India mining equipment market size reached USD 6.4 Billion in 2024. IMARC Group, a leading market research company expects the market to reach USD 11.34 Billion by 2033, exhibiting a growth rate (CAGR) of 6.05% during 2025-2033. The rising mineral production, infrastructure projects, government initiatives, demand for automation, and sustainability-focused technologies are the factors propelling the growth of the market. Increasing coal, iron ore, and bauxite extraction, along with foreign investments and digitalization, further boost equipment demand across surface and underground mining operations. The governments Production Linked Incentive (PLI) scheme for sectors such as specialty steel and auto component is encouraging domestic production. Additionally, the shift in global geopolitical dynamics, including the China+1 strategy adopted by original equipment manufacturers (OEMs), is prompting more investment in India. On a broader scale, the Indian government is taking steps to improve the ease of doing business and is focusing on building better infrastructure to attract investments, further strengthening the competitiveness of the domestic manufacturing industry. Rising mineral extraction activities and infrastructure development are driving the demand for technologically advanced machinery.
Automation, electrification, and digital monitoring solutions are becoming integral to mining operations, improvingefficiency
Growing investments in underground and open-pit mining are fueling the adoption of high-performance drilling rigs, loaders, and haulage systems. Sustainable practices, including emission-reducing equipment, are gaining prominence as the industry moves toward greener operations. Increasing exploration of rare earth elements and critical minerals is further contributing to higher equipment sales. The market is experiencing steady expansion, supported by industrialization, rising commodity demand, and government policies promoting resource extraction. Continuous innovation and regional manufacturing capabilities are playing a crucial role in meeting the evolving needs of the sector. Mining operations are increasingly prioritizing domestically manufactured machinery to dependency on imports. The shift aligns with government-led initiatives promoting local production, enhance fostering industrial self-reliance. Advanced drilling rigs and haulage solutions are being integrated into large-scale extraction sites, optimizing performance and sustainability. Equipment manufacturers are expanding production facilities within key regions to meet rising demand, ensuring faster deployment and streamlined maintenance support for large mining projects.
The spin-off impact of all these Government initiatives would be a surge in the demand for energies, minerals and other metal ores. As a result, the Company expects an uptick in drilling and mining operations in India. The equipment, including mine trucks and drilling rigs has been deployed across various mines in India. As India aims to increase its power generation capacity in the coming years, a significant portion of the increased capacity is expected to be coal-based, where Coal India Limited will play an important role. As one of the leading suppliers of drilling and mining equipments/ spares to Coal India Limited, the Company will benefit from the increase in production activity/capacity addition by Coal India Limited.
INDUSTRY OUTLOOK - GLOBAL ECONOMIC CONTEXT
The global mining equipment market is currently experiencing a period of significantgrowth and transformation. The market was valued at USD 156.19 Billion in 2024 and is projected to reach USD 232.60 Billion by 2033, growing at a CAGR of 4.30% during the forecast period. Ongoing digital mine innovation is expected to transform the key aspects of mining during the next few years. Increased investment and government support for digital mine innovation are expected to trigger the demand for mining equipment during the forecast period. Improvements and innovations in extraction technologies and equipment have improved ore grades, thus extending the life of older mines.
The surge in global demand for natural resources, driven by increasing industrialization and urbanization, is expanding the global mining industry and subsequently boosting prospects in the mining equipment market. Market players are ramping up production capabilities to meet the heightened demand for various equipment categories like crushers, mining drills, screening tools, and mineral processing equipment. The emphasis on vehicle electrification by automobile manufacturers is further propelling mining equipment demand. challenge toHowever, market significant growth is the elevated cost of mining equipment due to technological advancements, higher fuel prices, and modern machinery components.
Mining Equipment Manufacturers must constantly monitor global trends, anticipate needs, and deliver solutions that enhance and safety. This rapid evolution is re-shaping what defines success in the global sector. The mining industry is efficiency, fundamentally shaped by the rising global demand for minerals, as countries and industries pursue electrification, renewable energy, and technology-driven growth. In 2025, this demand is influencing manufacturers to innovate solutions for:
Lithium for electric vehicle (EV) batteries and storage systems
Cobalt and nickel for high-performance electronics and power infrastructure
Rare earth elements powering smartphones, wind turbines, and medical devices
Copper for energy transmission and renewable installations
These resources are the bedrock of global prosperity and clean energy transitions. Innovative machinery that enhances selective extraction, enables safer underground operations, and minimizes environmental impact is essential. Manufacturers are also tasked with developing flexible equipment that can adapt to diverse geological conditions and ensure efficiency no matter the location from arid lands to Arctic mines and deep-sea beds.
An increase in several infrastructure development initiatives worldwide, especially in emerging economies such as China, India, South Africa and Brazil are driving the demand for minerals such as iron ore, limestone, and copper. Moreover, the rise in urbanization and industrialization further generates a heightened need for metals like copper, lithium, and nickel, crucial for applications in electronics, electric vehicles, and renewable energy technologies, which in turn boosts the demand for mining equipment. The rising demand for essential metals and minerals is pronounced as the transition towards clean energy. A report from the International Energy Agency (IEA) suggests that to achieve global net-zero goals, there will be a sixfold increase in the demand for minerals and metals by 2040.
All of the above mentioned factors are expected to drive the market for the global mining equipment market. Asia Pacific held the highest market share in the global mining equipment market and is expected to keep its dominance in near future. Owing to the rise in urbanization and industrialization witnessed in emerging economies such as China and India there is an escalating demand for metals and minerals. This surge in demand is propelling the necessity for advanced and efficient mining equipment to extract resources cost. In addition, a growing emphasis on environmental sustainability prompted the embrace of eco-friendly effectively mining practices and equipment. The shift towards electric and hybrid vehicles within mining fleets, powered by renewable energy sources, aligns with the regions commitment to reducing carbon emissions and embracing cleaner energy solutions. Furthermore, collaborations and partnerships between mining companies and technology providers are cultivating innovation and expediting the adoption of advanced mining equipment in the Asia-Pacific region. Collectively, these trends signify a transformative phase in the mining equipment market, indicative of the convergence of technological innovation, sustainability priorities, and the escalating demand for resources in the dynamic Asia-Pacific mining landscape.
The Middle East region is expected to createsignificantopportunities for the mining equipment market due to its rich reserves of minerals and resources, particularly oil and gas. Mining equipment is used extensively in the GCC region for a variety of applications, which include exploration, drilling, material handling, excavation and earthmoving.
The Company has untapped opportunities in various global markets and the Company is focused on penetrating these markets by offering its affordable and quality products of the Company to the various customers in these markets,
B. INDUSTRY STRUCTURE AND DEVELOPMENTS:
Industry Structure
The mining equipment industry in India is highly fragmented, comprising the organised segment (consisting of large private firms that cater to small-, medium- and large-scale projects) and a host of stand-alone private contractors in the unorganised segment, which operate on a small scale. The mining equipment manufacturing industry can be categorised on the basis of type and application. The summary of the Industry Structure is provided below:
| Mining equipment based on type | Underground Mining |
| Surface Mining | |
| Metal Mining | |
| Mining equipment based on application | Mineral Mining |
| Coal Mining |
The mining industry can be categorised into on-shore and off-shore drilling. Onshore offshore rigs are used for drilling in the ocean. The On-Shore Drilling can be further categorised into the following 2 categories:
Surface mining and
Underground mining
As the name suggests, surface mining involves extracting resources from near the earths surface. This method is typically used for materials like coal, sand, gravel, and limestone. Different mining tools are used for different There are specific mining tools for soft rocks and specific tools for hard rocks, just as there are specific mining machines for surface mining techniques and specific tools for underground mining techniques. The Companys surface miners selectively mine varied rock deposits of limestone, coal, bauxite, gypsum, iron ore, etc. The companys eco-friendly surface miners have won users appreciation in India and overseas.
The surface mining equipment type segment led the market and accounted for a 38.9% share of the global revenue in 2023. During the forecast period, rising demand for iron ore, coal, diamonds, and chromium in emerging nations is anticipated to open new opportunities for surface mining equipment. As the use of this equipment spreads, it has enabled selected mining activities that involve the exploration of high-quality resources and the construction of dams and stable surfaces.
The mining industry is capital-intensive, and a continuous increase in demand for mineral/ore as per production targets requires high productivity and increased availability. Most mines are subjected to implementing checklists, changing work schedules, improving training, enhancing emergency response plans, and launching new safety programs. The mining sector requires significantamount of power to extract and protect resources, including various refining and extraction processes. The drop in average mineral grade has increased energy consumption and overall material production, driving demand for powerful mining equipment. The coal mining application led the market and accounted for a 37.8% share of the global revenue in 2023.
The Company primarily offers drilling equipment and tools for Surface mining. A significant portion of the worlds deposits of copper, gold and iron ore is found above ground in what is normally referred to as "open pits". For surface mining, the Company provide a complete range of rigs for blasthole drilling. Equipment requires spare parts, maintenance and consumables to achieve optimal performance. Our Company offer a wide range of aftermarket solutions, including circular services, midlife services, diesel-to-battery conversions and remanufacturing of components. The type of service for each customers varies, and the Company is offering is therefore tailor made, ranging from supplying spare parts to having service technicians on site, performing all maintenance for the customers. Most of the major players in these sectors, like Coal India Limited, NMDC Limited, Tata Steel Limited and a few cement manufacturers, are the Companys major customers. The Company expects capacity additions, increase in production and significant growth in operations of some of its major customers to meet the increased demand in the respective sectors, which could stimulate demand for drilling equipment and benefit the Company. Domestically the Company stands to gain huge benefits from the growth of
Indian mining sector.
Developments
Mining Equipment Manufacturers stand at a pivotal crossroads in 2025, as the mining industry is shaped by rising global demand for critical minerals, the growing urgency for sustainable practices, and the rapid transformation brought about by technological innovation. Their role is more critical than ever: delivering advanced, efficient machinery that enables the sector to extract resources from the earth responsibly while meeting the evolving needs of modern operations.
Mining equipment manufacturers are much more than suppliers of heavy machines or tools they are innovation leaders at the very heart of the sectors transformation. Their core role has expanded to designing, developing, and producing a comprehensive range of machinery and systems essential for extracting ores and minerals, as well as supporting the entire mining operations lifecycle from underground exploration to above-ground processing which includes developing:
Heavy excavators, specialized drills, and conveyor systems
Sophisticated underground machinery and remote-controlled trucks
Autonomous drones equipped with real-time sensors
Sustainable, energy-efficient electric and hybrid models
Advanced processing tools and digital solutions
As economies increasingly lean on resources like lithium (for batteries), cobalt, nickel, rare earth elements, and copper all vital to clean energy transitions and smart technology innovative mining equipment is in soaring demand worldwide.
Mining Equipment Manufacturers must constantly monitor global trends, anticipate needs, and deliversolutionsthatenhanceefficiency, sustainability, and safety. This rapid evolution is re-shaping what defines success in the global sector. Key policy developments such as the Mines and Mineral (Development and Regulation) Act, 2021, have resulted in rapid growth in the mining sector, thereby driving the demand for mining equipment. Meanwhile, emphasis on lean and sustainable mining practices to reduce the carbon footprint is expected to enable innovation and technology upgrades by equipment manufacturers. Further, deeper and larger-scale mining operations will require high-capacity equipment. Apart from this, private commercial mining will enhance competition and productivity by facilitating the use of the latest equipment with automation and improved technological features.
The mining equipment is expected towitnesssignificantgrowth in coal mining applications. The growth is attributed to its increased demand for electricity generation. Coal mining equipment has expanded its purposes and adoption as the excavation of coal has boomed. Meanwhile, there has been an apparent trend towards leasing and rental of mining equipment. Traditionally, the leasing segmentofthemarkethasbeensmall,butitisexpectedtogrowduetoflexibilityinfinancingand tax advantages. The "pay-as-you-use" model is picking up in India, as it minimises costly breakdowns and eliminates storage costs. Moreover, as projects grow in size and scale, large equipment is increasingly being used. This provides economies of scale and helps contain the cost of operations. However, smaller equipment is also often used because of the cost economicsandoperationalflexibility, with the growing preference for the outsourcing model.
Some of the emerging trends that impact mining equipment, which have been observed in recent years, include a shift towards sustainable mining and leasing equipment as a business model. Mining companies are moving towards net zero emissions and aligning mining practices with their environmental, social and corporate governance goals, thereby increasing the adoption of sustainable and energy-efficient mining practices and solutions.
Owing to constantly improving technology, mining for rare earth metals has recently gained traction. The current high levels of investment in new technology recommend that large metal mining operations focus on long-term value. In addition, newer methods of exploitation are emerging to maximise production cost-effectively.
The rise in innovation in digital mining is projected to revolutionise important parts of mining over the next few years. In addition to government backing for digital mine innovation, growing investments are expected to drive mining equipment demand. Improvements and advancements in extraction technology and equipment have led to higher ore grades, extending the life of existing mines. Advanced technologies, such as automation and remote operations, are becoming increasingly common in the drilling rig industry. This not only enhances safety and efficiency but also reduces operational costs.
The rapid evolution of mining machinery in 2025 demands new workforce development strategies. Mining equipment manufacturers invest significantly in operator training and safety protocols to keep pace with sophisticated automation and digital technologies such as:
Remote operation capabilities: Operators can safely control machines from central command stations, reducing risk of injury in hazardous mine zones.
Advanced monitoring: Real-time machine health and operator biometrics are tracked to ensure compliance with safety protocols and minimize workplace accidents.
Robust training programs: Simulation-based and augmented reality training equip the workforce with critical skills for managing high-tech mining equipment.
Emergency response systems: AI-enabled alerts and automated shutdowns rapidly address hazardous situations and protect workers.
Improving safety and upskilling staff are now inseparable from technological progress in the mining sector ensuring sustainable growth and industry well-being into the future.
The mining industry will develop into a climate-smart enterprise in the next few years. As a result, mining businesses have begun to look forward to using electricity instead of traditional fuels such as diesel. Artificial intelligence (AI) while increasing mine productivity and ensuring miners safety. Smart data and artificial intelligence have also been employed in the worldwide mining business. Technological advancements in this field are expected to drive market demand throughout the projection period. Environmental concerns and stringent regulations are radically reshaping the mining industry in 2025. Todays Mining Equipment Manufacturers are prioritizing sustainability in every stage of machinery development, from initial design to deployment. Mining Equipment Manufacturers are Leading Sustainability in 2025 by developing:
Energy-efficient models: Integrating the latest electric, hybrid, and battery-powered engines reduces dependence on diesel, lowering greenhouse gas emissions and operational costs for companies.
Advanced emission control: Technologies that monitor and minimize fuel consumption, resulting in measurable reductions in carbon footprints even in high-capacity machinery.
Precision mining: Selective extraction methods that target high-grade ore zones, minimizing land disruption and tailings waste.
Water conservation: Modern equipment leverages sensor-powered irrigation and closed-loop cooling, dramatically reducing industrial water use at mining sites.
Safe tailings management: Development of machines designed for environmentally secure handling and reprocessing of tailings, ensuring the responsible management of mining byproducts.
Reusable materials: Increasing use of recyclable and sustainable materials in equipment manufacture and maintenance.
With these measures, mining equipment manufacturers are rapidly becoming key drivers of sustainability meeting both global demand and environmental expectations and preparing the sector for stricter regulations ahead.
Adopting automated technology in the mining industry is expected to raise demand for new equipment, which is necessary for businesses to remain competitive. Advanced technology necessitates highly qualified labour and good network connectivity; therefore, demand for these automated solutions and equipment is projected to be stronger in developed economies. Further, the adoption of new-age technologies in the equipment market and the use of varying equipment sizes are other trends that have been observed. The ergonomics of the equipment have been improving to increase operators comfort and reduce fatigue. Equipment manufacturers, apart from making efficient, robust, and reliable machines, are also fitting equipment which allow operators to perform theirjobsmoreefficientlyand enhance productivity. Technological advancements to improve the health and safety environment for mine workers are also gaining traction. In 2025, the mining sector is rapidly transforming through the integration of cutting-edge technologies by Mining Equipment Manufacturers which includes automation, AI, IoT, and digital replicas are enabling more efficient operations, optimizing resource extraction, and reshaping the industrys future. Some of the major developments/ innovations in the mining equipments are:
Autonomous haul trucks & loaders: Self-driving machines now ply mine routes, operational 24/7, reducing downtime and enhancing safety in hazardous areas.
Drones equipped with advanced sensors: Real-time aerial mapping, topographic surveys, hazard detection, and infrastructure inspections become seamless and safer for operators.
Artificial intelligence (AI): AI algorithms are embedded into mining machinery to enable advanced predictive maintenance, resource optimization, and operational decision support. With AI-enabled systems, manufacturers deliver:
1 Predictive analytics for early detection of potential failures, enabling scheduled maintenance and lowering repair costs
1 Operational optimization through real-time monitoring and automated adjustment of drilling, excavation, and haulage parameters
1 Extending equipment life by reducing overuse and minimizing breakdowns via continuous monitoring
Digital twins: Manufacturers deploy virtual replicas of physical equipment to simulate and optimize mining operations before real-world implementation.
Benefits: Accurately plan projects, reduce environmental impact, and accelerate deployment of new equipment models.
IoT integration: Seamless data sharing between digital and physical infrastructure enables real-time diagnostics, performance tracking, and predictive insights. The Connected machinery sends operational data to cloud-based systems for continuous analysis and improvement. Smart sensors monitor machine health, track ore grades, and analyze safety risks, enabling data driven, agile decision-making by manufacturers and mining companies alike.
The fusion of automation, machine learning, IoT, and predictive algorithms is revolutionizing the sector, driving efficiency, safety, and sustainability like never before. The future of mining equipment manufacturers is fundamentally linked to their readiness for responsible resource extraction, minimized environmental footprints, and the ongoing adoption of advanced, sustainable technologies.
C. OPPORTUNITIES &THREATS –
The Companyhaseffectivelynavigated the opportunities and threats mentioned in this sectionandefficientlymonitored market trends, technological advancements, and regulatory changes. It has been striving to adapt to these dynamics and innovate continuously, likely to thrive in the evolving surface mining equipment market.
OPPORTUNITIES
The Drilling Equipment Market presents several opportunities for growth. One of the primary opportunities lies in the development of eco-friendly and energy-efficient equipment. As environmental regulations become stricter, there is an increasing demand for machines that consume less energy, produce fewer emissions, and minimize noise pollution. Manufacturers are investing in creating more sustainable machinery, which not only helps reduce the carbon footprint but also appeals to environmentally conscious construction companies. Additionally, the expanding construction and infrastructure projects in emerging economies present a significant opportunity for market growth.
1. Mineral and Metal Demand
Driven by urbanization, industrialization, and infrastructure development, there is a global need for minerals like coal, iron ore, copper, gold, and precious metals. The transition to renewable energy and electric vehicles further boosts demand for materials like lithium, rare earth elements, nickel, and cobalt. Mining operations are expanding to meet this demand, requiring efficient drilling equipment.
Rising global demand for copper, gold, iron ore, lithium, rare earths and other critical minerals (driven by infrastructure growth and the energy transition) is fueling new exploration and mine development. As surface deposits deplete, mining is going deeper and into harder rock, necessitating robust drilling solutions.
2. Expansion of Renewable Energy Infrastructure
The energy transition and infrastructure build-out are driving a surge in mining activity. Demand for battery and critical minerals (lithium, cobalt, copper, etc.) is rising rapidly – for example, global lithium demand grew ~30% in 2024 which in turn boosts the need for drilling equipment in mineral exploration and extraction. As global demand for renewable energy sources increases, mining companies are being tasked with sourcing minerals like lithium, cobalt, and copper. This presents an opportunity for mining equipment suppliers to develop specialized machinery for the extraction of these critical minerals, driving growth in the market for advanced mining equipment.
3. Coal mining/ production in India and Globally
The Companys business runs parallel to the coal and metal mining industries. The mining equipment is expected to witness significant growth in coal mining applications. The growth is attributed to its increased demand for electricity generation. Coal mining equipment has expanded its purposes and adoption as the excavation of coal has boomed. Coal remains the predominant indigenous energy source in the country. The energy security of the country and its prosperity are integrally linked to the efficientand effective use of this abundant, affordable and dependent fuel. The dependability on coal may be gauged by the fact that about 55% of Indias installed power capacity is coal-based. Coal India Limited, the Companys primary customer, produces around 83% of Indias overall coal production and meets nearly 40% of primary commercial energy requirements. As India aims to increase its power generation capacity in the coming years, a significant portion of the increased capacity is expected to be coal-based, where Coal India Limited will play a major role. As one of the leading suppliers of drilling and mining equipments/ spares to Coal India Limited, the Company will benefit from the increase in production activity/capacity addition by Coal India Limited.
4. Exploration Spending:
The need to discover and develop new mineral deposits drives demand for exploration drilling rigs and specialized equipment. Deep-hole drilling and precision exploration methods are becoming increasingly important. Governments and companies worldwide are increasing exploration budgets to secure resources. High commodity prices and strategic goals (e.g. securing battery metals) make drilling-heavy exploration projects more attractive. For instance, expansion of energy projects (geothermal, carbon capture) and infrastructure also require drilling (for foundations, tunnels), adding to equipment demand.
5. Energy Transition
The shift to clean energy creates new drilling needs (e.g. geothermal wells, hydrogen storage, EV battery minerals). Demand for cobalt, lithium and rare earths has surged, driving specialized drilling (deep core and reverse-circulation rigs) to find these deposits.
Governments in many countries now prioritize critical minerals, indirectly boosting drilling equipment demand.
6. Infrastructure and Utilities:
Large infrastructure projects (roads, pipelines, underground utilities) often require foundation drilling, creating additional demand for rock drills and pile drivers. Urban and industrial development, especially in emerging economies, increases need for foundation and anchor drilling.
7. Maintenance and Aftermarket Services:
The Company offers many types of service agreements and service products. They include component remanufacturing and mid-life upgrades, extending the life of existing components or machines supplied to existing customers. The Company offers cost-per-meter/ machine hour contracts, upgrades and conversion kits that add new features. Most of the Companys equipment is under some kind of service contract, and the Company sees good opportunities to grow this number. There is a growing market for maintenance services, spare parts, and equipment upgrades as mining operations look to extend the lifespan of their investments. An increased amount of connected equipment gives additional opportunities to support the service business in developing value for our customers. The service business provides a strong base as revenues from service are more stable than revenues from equipment sales.
8. Acquisitions and Investment
The Company has sufficient reserves and surplus available for expanding its business in domestic and export markets. It can also explore various markets outside India, diversify its business, undertake capacity additions, and engage in various other activities. The Company can also consider the vertical integration or horizontal integration of business if there is an opportunity. It also helps the Company to survive during the challenging times and also gives a headroom for recovery.
9. Innovation in Equipment Efficiency:
The ongoing innovation in energy-efficient mining equipment presents a major growth opportunity. With a focus on reducing fuel consumption and emissions, mining companies are increasingly investing in more sustainable machinery. Technologies like electric drills, autonomous trucks, and solar-powered equipment could reduce operating costs by up to 30% over the long term, making them an attractive option for mining operations looking to enhance productivity and sustainability. The mining equipment industry has been increasing the adoption of automation and remote-controlled equipment. This helps improve safety and efficiency, creating opportunities for advanced equipment providers. Further, there is growing interest in electric and hybrid mining equipment, which offer reduced emissions and lower operating costs.
10. Need for enhanced safety
The mining industry is undergoing a transformative evolution driven by novel intelligent technologies to eliminate fatalities within the next two decades. The integration of automation, robotic systems, artificial intelligence (AI), machine learning (ML), Internet of Things (IoT), drones, remote monitoring, and other intelligent systems is expected to significantly improve safety, efficiency, and sustainability.
Autonomous vehicles, equipped with sensors and navigation systems enable continuous operation in hazardous environments while reducing the risk of accidents and injuries. One of the primary objectives in mining is the potential to improve workplace safety and health by removing miners from harsh and hostile working environments, such as fly-in, fly-out remote areas. By minimizing human exposure to hazardous environments and repetitive and manual tasks, these technologies will mitigate the risk of accidents, and occupational safety and health challenges.
11. Emerging Markets:
Emerging economies in Africa, Asia, and South America are investing heavily in mining infrastructure, offering new markets for surface mining equipment. Many of these countries are rich in minerals and other resources which provides a great opportunity for mining and mining equipment manufacturing industry. Most of the Countries in the above markets are developing nations, and the Company has a great opportunity to penetrate these markets by offering affordable and quality products for mining operations. High-growth projects (copper in Africa, lithium in South America, infrastructure-led mining in Southeast Asia) are creating new export markets. For example, rising investment in African copper/cobalt/lithium projects is pulling the regional market to double-digit growth rates. Developing regions, particularly in Africa, Asia, and Latin America, are seeing a rise in infrastructure development and mining activity. As these regions develop, there is growing demand for mining equipment to support the extraction of resources for urbanization and industrialization projects. For example, the demand for mining equipment in Africa is expected to grow by over 20% in the next five years due to increased mineral extraction.
12. Digitalization and Data-Driven Mining
With the increase in the digital atmosphere, the boundaries between Countries have become irrelevant. The Company can support and assist its customers in various parts from a single location. Digital capabilities and interaction are essential to supporting customers and creating business opportunities. With the support of Digital Business, the Company can always be available to the customers whenever they need the Companys support. The digital transformation of the mining sector presents growth opportunities for companies that provide equipment and solutions focused on data analytics, automation, and IoT integration. By using data to optimize equipment performance, mining operations can significantly reduce inefficiencies. In fact, the integration of smart mining solutions is estimated to improve overall mining productivity by 15% to 20%.
13. Climate scenario analysis
Market shifts toward a low-carbon economy may impact the viability of certain sectors and products. The companys continuous worktoincreasetheenergyefficiency of its products helps mitigate these risks. This shift also represents an opportunity to continue developing more energy-efficient products and may create new businesses and business models. Government initiatives support a transition toward a low-carbon society, and the company can position itself to take advantage of the opportunities such a scenario brings.
14. Circular Economy and Recycling Initiatives
With increasing attention on sustainability, mining companies are looking to reduce waste and enhance recycling efforts. Opportunities exist for equipment manufacturers to innovate in machines that can efficiently recycle mining waste or process lower-grade ores.
For instance, processing technology that recovers valuable metals from waste materials can improve recovery rates by 10% to 15%, benefits offering both environmental and economic
15. Sustainability/ESG compliance:
Stricter environmental and social governance (ESG) standards create demand for greener drilling solutions. Manufacturers now offer electric- or hybrid-powered rigs and low-emission machines to help mines meet carbon and pollution targets. For instance, in many countries, new regulations are pushing for 80% of mines to adopt eco-friendly tech. Sustainable design (energy efficiency, recyclability) is a growing selling point.
16. Regulatory Support/ Government Incentives:
Government support for domestic mineral production and infrastructure development, like the "Make in India" initiative in India, promotes local manufacturing and investment in the mining sector. Government-led investment in infrastructure, rapid urbanisation, rising preference for personal mobility, growth in the capital goods sector and the governments focus on making India ‘Atmanirbhar are expected to stimulate Cement, Steel, iron ores and other metals requirements in India. Governments is offering incentives for adopting new technologies and for improving safety and environmental standards, benefiting equipment manufacturers who can meet these criteria. The Production Linked Incentive (PLI) scheme is a government policy designed to boost domestic manufacturing by providing financial incentives to companies based on their production levels. Reforms like the MMDR Amendment Act in India streamline mineral concession allocation and encourage private sector participation in exploration
THREATS
1. Economic Fluctuations:
The mining industry is highly sensitive to fluctuations in commodity prices. Mining companies may cut back on new equipment purchases and investments when prices drop. Further economic downturns or slowdowns can reduce demand for minerals and, consequently, for mining equipment. Fluctuations in the prices of metals and minerals directly impact mining operations profitability and investment decisions. When commodity prices are low, investment in mining projects, including new equipment purchases, tends to decline, leading to reduced demand for drilling equipment and potential revenue losses for manufacturers. Mining companies dependent on a single commodity are particularly vulnerable to price volatility, potentially impacting their ability to fund new projects and maintain existing operations.
2. Regulatory and Environmental Challenges:
Tightening global regulations (safety, emissions, land reclamation) impose higher compliance costs and can force equipment redesign. For example, new rules may mandate widespread adoption of eco-friendly technologies in mines. Constantly evolving standards (carbon limits, waste controls) threaten to raise manufacturing costs and complexity. Some of the potential regulatory and environmental challenges that may be faced by the Company are:
Stricter Environmental Regulations: Increased regulatory requirements related to environmental impact and safety can lead to higher costs for compliance and equipment modification.
Permits and Land Access Issues: Difficulties in obtaining mining permits or accessing new mining sites due to regulatory or land use restrictions can impact equipment demand.
Increasingly stringent environmental regulations regarding emissions, waste disposal, and mine reclamation can impact drilling operations and require investments in cleaner technologies, potentially increasing manufacturing and operational costs. Stricter regulations related to environmental impact assessments (EIA) and waste management, including tailings dams, can lead to delays in project approvals and increase compliance costs for both miners and equipment manufacturers. If any non-compliance with stringent environmental regulations, emissions, waste disposal laws canresult fines,penalties, and even legal action, affecting the profitability and reputation of manufacturers and their client.
3. Technological Disruptions:
Rapid technological innovation presents both opportunities and threats. New drilling technologies and equipment innovations may disrupt the market and render existing products less competitive. The pace of technological advancement means that equipment can quickly become outdated, making it challenging for manufacturers to keep up with innovations and maintain competitive advantages.
Increased automation, particularly in autonomous drilling equipment, creates opportunities but also necessitates significant investment in research and development and potentially alters market dynamics. The presence of numerous regional and specialized players prevents market domination by a few key players, leading to intense competition and pressure on manufacturers to innovate continuously.
4. Competitive Pressure:
The surface mining equipment market is highly competitive, with numerous players striving for market share. Established OEMs face aggressive competition from lower-cost producers, especially in China and other emerging markets. Chinese drill-rig manufacturers now combine cost-efficient production with rising quality and innovation. These local/low-cost rivals can undercut prices and capture market share in price-sensitive segments, putting pressure on traditional exporters. This can lead to price wars and pressure on profit margins.
5. Supply Chain Disruptions:
Global events (pandemics, trade tensions, logistic bottlenecks) can interrupt the flow of critical components and raw materials. Delays in key inputs (electronics, specialty metals) can halt production lines and postpone deliveries
Raw Material Shortages: Disruptions in the supply of raw materials or components for manufacturing mining equipment can lead to delays and increased costs.
Geopolitical Tensions: Trade disputes or geopolitical tensions can affect the supply chain, impacting the availability and cost of mining equipment.
The industry relies on a global supply chain, and events like geopolitical tensions, trade disputes, and natural disasters can cause delays in raw material deliveries and equipment availability. Labor shortages, port congestion, and high shipping costs contribute to supply chain challenges, leading to production constraints and increased manufacturing costs.
6. Safety and Health Concerns:
Ensuring the safety of mining operations is crucial, and equipment failures can lead to serious consequences, including accidents and regulatory penalties. Despite advancements in automation and safety features, mining operations continue to pose significant risks to workers, particularly in underground and surface mining environments. Hazards like rockfalls, equipment malfunctions, and exposure to toxic gases contribute to a high rate of accidents. Data from the International Labour Organization (ILO) suggests that mining has one of the highest accident rates among industries, with an average of 12 fatalities per 100,000 workers globally.
7. Skilled Labor Shortage
The mining industry faces a growing shortage of skilled workers capable of operating and maintaining complex, technologically advanced equipment. This shortage is exacerbated by an aging workforce and difficulty in attracting younger workers to the industry. It is projected that by 2030, up to 50% of the mining workforce in certain regions will retire,leaving significantgap in skilled labor. There is a global deficit of trained engineers and technicians for heavy manufacturing. The complexity of modern rigs (automation, robotics, digital systems) means the industry struggles to attract and retain the specialized talent needed for design, assembly and service. The mining industry, and consequently equipment manufacturing, faces a global shortage of skilled labor, particularly in maintenance and operation of complex machinery. This impacts maintenance practices, efficiency, and the ability to adopt and operate new technologies effectively.
8. Geopolitical Risks
Global conflicts and trade tensions can affect demand and supply dynamics for minerals and metals, potentially impacting drilling equipment demand and causing fluctuations in natural resource rents. Resource nationalism and political instability in certain regions can create uncertainty for mining operations and deter investments, potentially impacting the market for drilling equipment.
9. High Capital Investment and Investment Risks
Developing and manufacturing heavy drilling machinery requires enormous upfront investment and long development cycles. These high capital and R&D costs limit agility and deter smaller competitors. The mining sector is capital-intensive, requiring significant investments in expensive equipment, infrastructure, and other resources. Investment risks include inflation, exchange rate instability, swings in mineral and raw material markets, and government restrictions. The low-risk appetite within the mining industry can make it difficult for companies to secure the funding needed for new projects and advanced technologies, potentially impacting drilling equipment sales. Addressing these threats requires a multi-faceted approach involving proactive risk management, technological adaptation, engagement with stakeholders, and collaboration with mining companies to ensure long-term sustainability and growth in the drilling equipment manufacturing industry for mines
D. RISKS AND CONCERNS:
The Companys business is exposed to many internal and external risks, and it has consequently put in place robust systems and processes, along with appropriate review mechanisms to monitor, manage, and actively mitigate these risks. The amalgamation of many events, including the continued geopolitical tensions, inflationary headwinds on the back of commodity super cycles & ‘greenflation, and extended supply chain disruptions, pose significant downside risks to global economic prospects in the year ahead.
INTERNAL RISKS
1. Our business is working capital intensive. If we areunabletogeneratesufficientcash flows to make required debt payments or fund working capital requirements, this may adversely affectour results of operations.
Our business is working capital intensive, including capital requirements for bidding on the project till completion of the projects. working capital is required to finance the purchase of materials and other work on projects before clients Inmanycases,significant receive payments. Our working capital requirements may increase if, under certain contracts, payment terms do not include advance payments, or such contracts have payment schedules that shift payments toward the end of a project or otherwise increase our working capital burdens. In addition, our working capital requirements have increased in recent years because we have undertaken a growing number of projects within a similar timeframe and due to the general growth of our Companys business. We have also faced delays in receipt of our dues from clients; all of these factors may result or have resulted, in an increase in our working capital needs.
2. Our revenue depends to a large extent on a limited number of customers, and our revenue could decline if we lose a major customer.
We currentlyderive significantportion of our revenue from a limited number of corporate customers. The loss of a major customer or a substantial reduction in the services performed for a major customer could resultin significantreduction in our revenue. Our top
3 customers accounted for 35.63%, 52.1% & 43.31% of our total revenue from operations in FY2025, FY2024 and FY2023 respectively.
The volume of work we perform for specific customers may vary yearly as differentsystem integrator customers keep adding in programmers. Thus, any major customer for one year may not provide the same level of revenue in a subsequent year. Our large customers may terminate their work orders with us, with or without cause, at any time, and our other major customers may terminate their contracts with us at their discretion. If any one or more of our work orders or customer contracts are terminated, our revenue and profitability could be materially and adversely affected. If we were to lose one of our major customers or have a significantly lower volume of business from them, our revenue and profitability could be reduced. Existing customers may also engage in consolidation exercises that impact their arrangements with us and may cause us to lose our approved supplier status with major customers.
3. If we are unable to collect our dues and receivables from or invoice our unbilled services, our operations results and cash flows could be adversely affected.
Our business depends on our ability to successfully obtain payment from our customers for the amounts they owe us for work performed. Our debts were 25.15 cr, 33.97 cr and 35.75 cr in FY2025, FY2024 and FY2023 respectively. There is no guarantee that we will accurately assess the creditworthiness of our customers. Macroeconomic conditions, such as a potential credit crisis in the global financial system, could also result in financial difficulties for our customers, including limited access to the credit markets, insolvency or bankruptcy. Such conditions could cause customers to delay payment, request modifications of their payment terms, or default on their payment obligations to us, all of which could increase our receivables.
4. Any inability on our part to comply with prescribed specifications and standards of quality in connection with our products and/or manufacturing facility could adversely impact our business and operations.
Our business is required to comply with prescribed specifications and standards of quality as may be prescribed by the regulators as well as the customers. Further, there is a requirement for specific customisations based on the customers requirements. If we fail to adhere to the aforesaid requirements or changes thereto in a timely manner, or at all, operations and/or profitability could be adversely affected. Our inability to retain such accreditations and/or certifications, including industry standards, can also lead to adverse effects on our relationship or pre-qualified status with certain key customers.
5. We are subject to risks associated with product liability, warranty and recall due to defects in our products or related aftersales services, which could lead to adverse publicity and which may adversely affect our sales, business, results of operations and financial condition.
We are subject to strict quality standards imposed by our customers, which are applicable to our manufacturing processes. Failure by us or our component suppliers to achieve or maintain compliance with these requirements or quality standards may disrupt our abilitytosupplyproductssufficient to meet our customers demands. Our failure or our component suppliers failure to comply with applicable quality standards could also result in our products failing to perform as expected or our products being defective, which may result in bodily injury, property damage, or both or work accidents. The occurrence of any such events could expose us to warranty, product recall field action and product liability claims. These actions could require us to expend considerable resources to correct these problems and could materially and adversely affect the demand for our products. Defects in our products that arise from defective components or spare parts supplied to us may be covered under warranties provided by our suppliers. However, an unusual number or amount of warranty claims against a supplier could affect our relationship with that particular supplier. Repeated warranty claims may also result in a rise in our cost of obtaining insurance. Further, if a supplier fails to meet quality standards, they could expose us to the risk of product liability claims, the costs and expenses of which we may not be able to recover from our suppliers. Any defects in our products or after-sales services could also result in customer claims for damages. In defending such claims, we could incur substantial costs and receive adverse publicity. Management resources could be diverted away from our ordinary business towards defending such claims. As a result, our business, operations, and financial condition could be adversely affected.
6. Our continued success depends on our ability to offer quality products and launch new models on a timely basis and at competitive prices, which meet technological advances, satisfy changing customer demands and achieve market acceptance.
Any delays in the launch of new models and lower than anticipated market acceptance of new models may adversely affect our results of operation.
The quality, supply stability and timely delivery of our products at competitive prices are essential to customer satisfaction and retention. Unanticipated delays, cost overruns, failure to launch a new product, or failure to expand our capacity to meet customer requirements could materially and adversely impact our results of operations and financial condition. Given the nature of our products and the sector in which we operate, our customers have high and exacting standards for product quality. Launching new models ahead of or in competition with our competitors is necessary for us to operate successfully. The launch of a new model generally requires substantial capital investment and, generally high initial production costs. The capital investment in plant and machinery, in addition to product development costs, associated with the launch of a new model may result in higher levels of depreciation and amortisation and may have an adverse impact on the profitability of the Company, especially if the new model does not perform according to expectations in the market. Therefore, any delay in the introduction of new models or lower-than-expected market acceptance of our new models may adversely affect our results or operations.
In addition, the mining equipment industry is characterised by technological advances, evolving industry standards, changing customer preferences and the introduction of new products. Our future success will depend in part on our ability to develop and introduce new products that keep pace with changes in these standards and preferences, our ability to enhance our existing range of products, and our ability to achieve market acceptance. There can be no assurance that we will be successful in developing new products or incorporating evolving technologies into our products on a timely or cost-effective basis or at all, or if these products, services and solutions will be developed by us at our own research and development facilities, or that we will be successful in marketing and selling them and achieving market acceptance for such products.
7. Our manufacturing unit is located at single geography and our operations may be affected by various factors associated with the region where we operate.
We operate through our manufacturing unit located in Coimbatore, Tamil Nadu. This concentration of our manufacturing operation in Tamil Nadu subjects us to various risks, including but not limited to the following risks:
regional natural disasters;
vulnerability to change of policies, laws and regulations or the political and economic environment of Tamil Nadu; constraints on our ability to diversify across states;
Further, since our manufacturing operations are concentrated in Tamil Nadu, any political disruption, natural calamities, civil disruptions, opposition, and protests, particularly in locations where we operate, could adversely affect our business operations or strategy. There is no assurance that such disruption in business operations would not bring any hindrance to the functioning of our manufacturing units. Consequently, our business, results of operations, cash flows and financial condition may be heavily dependent on the performance of and the prevailing conditions in Tamil Nadu and end-user industry in geographically contiguous states.
8. Any incident relating to product safety may result in potential conflict with the customers.
The customers of the Company work in challenging conditions that pose safety risks. For this reason, the equipment must operate at maximum productivity in all conditions without compromising safety. The Company works closely with customers in regard to risk management, accident and incident reporting and change management to promote the right procedures among equipment operators and service technicians.
9. Any accident at our work facilities may adversely impact our reputation and business operations.
Our field service technicians work with heavy equipment and in harsh conditions. Exposed to injury risk while on the job or in traffic, they are trained to adhere to safety procedures regardless of their working environment. A higher risk awareness reduces human errors that otherwise can lead to injury or close-call events.
EXTERNAL RISKS FACTORS
10. Our business is affected by prevailing economic, political and other prevailing conditions in India and the markets we currently service.
Our operations and financial conditions depend significantly on prevailing economic conditions in India, and our operations are affected by factors influencing the Indian economy. Various factors may lead to a slowdown in India, which in turn may adversely impact our business, prospects, financial performance and operations. In the past, the Indian economy has been affected by global economic uncertainties, liquidity crises, domestic policies, the global political environment, volatility in interest rates, currency exchange rates, commodity and electricity prices, volatility in inflation rates, and various other factors. Accordingly, possible high rates of inflation in India could increase our employee costs and decrease our operating margins, which could have an adverse effect on our operations results. Any slowdown in the economy of the markets in which we operate may adverselyaffectourbusinessandfinancialperformance of our business and operation.
11. Changing laws, rules and regulations and legal uncertainties, including adverse application of tax laws and regulations, such as application of GST, may adversely affect our businessre sults of operations, cash flows and financial performance.
Changes in the operating environment, including changes in tax law, could impact the determination of our tax liabilities for any given tax year. Taxes and other levies imposed by the Government of India that affect our industry include income tax, goods and services tax and other taxes, duties or surcharges introduced from time to time. The tax scheme in India is extensive and subject to change from time to time. For instance, as of July 1, 2017, GST in India replaced taxes levied by central and state governments with a unified tax regime in respect of the supply of goods and services in India. Any adverse changes in any of the taxes levied by the Government of India may adversely affect our competitive position and profitability. We cannot assure you that the Government of India may not implement new regulations and policies that will require us to obtain approvals and licenses from the Government of India and other regulatory bodies or impose onerous requirements and conditions on our operations. Any such changes and the related uncertainties with respect to the applicability, interpretation and implementation of any amendment to, or change to governing laws, regulation or policy in the countries in which we operate may materially and adversely affect our business, results ofoperationsandfinancial condition. Any unfavourable changes to the laws and regulations applicable to us could also subject us to additional liabilities. As a result, any such changes or interpretations may adversely affect our business, financial condition and financial performance. Further, changes in capital gains tax or tax on capital markettransactionsorsaleofsharesmayaffectinvestorreturns.
12. As a manufacturing company, any shortfall in the supply of raw materials or an increase in our raw material costs or other input costs may reduce our margin and may also adversely affect the pricing and supply of our products, which may have an adverse effect on our business, results of operations and financial conditions.
Currently, we purchase our raw materials from the domestic market, and we import raw materials depending on the quality, price, availability, and other prevailing market conditions. Any increase in the prices of any of the raw materials mentioned above may have an adverse effect on our business and a consequent negative impact on our financial condition and results of operations. In addition, the volatility, length and nature of business cycles affecting the mining industry have become increasingly unpredictable, and the recurrence of another major downturn in the industry may have a material adverse impact on our business, results of operations, financial condition and prospects.
Our competitiveness, costs and profitability depend, in part, on our ability to source and maintain a stable and sufficient supply of raw materials at competitive prices. Raw materials are subject to price volatility caused by external factors beyond our control, such as climatic and environmental conditions, commodity price fluctuations, market demand, production and transportation costs, changes in fuel prices, which may significantly affect transportation costs, and changes in government policies including duties and taxes trade restrictions. If the price of raw materials increases and we are not able to increase the price of our products manufactured by us, then the margins for our products business will be reduced. Any material shortage or interruption in the domestic supply or deterioration in the quality of raw materials due to natural causes or other factors could result in increased costs that we may not be able to pass on to customers.
13. Natural disasters, fires, epidemics, pandemics, acts of war, terrorist attacks, civil unrest and other events could materially and adversely affect our business.
Natural disasters (such as typhoons, flooding and earthquakes), epidemics, pandemics such as COVID-19, acts of war, terrorist attacks and other force majeure events, many of which are beyond our control, may lead to economic instability, including in India or in other jurisdictions where we operate, which may in turn materially and adversely affect our business, financial condition and results of operations. Our operations may be adversely affected by fires, natural disasters, and/or severe weather, which can result our property or inventory, generally reduce our productivity, and may also require us to evacuate personnel and suspend operations.
Any terrorist attacks, civil unrest and other acts of violence or war may adversely affect the Indian securities markets. Such incidents could also create a greater perception that investment in Indian companies involves a higher degree of risk and could have an adverse effect on our business and the price of the Equity Shares.
14. Financial instability in other countries may cause increased volatility in Indian financial markets.
The Indian market and the Indian economy are influenced by economic and market conditions in other countries, including conditions in the United States, Europe and certain emerging economies in Asia. In recent years, financial in the world has adversely affected the Indian economy. Any worldwide financial instability may cause increased volatility in the Indian financial markets and, directly or indirectly, adversely affecthe Indian economy and financial sector us. t
The Company is now focusing on exports in order to expand its markets. The performance of the Company products in the foreign markets depends on various factors like climate, type of soil and so on. There is a possibility of the failure of the Companys products in such markets.
15. Shift towards Renewal sources of energy.
India is focusing on renewable sources to generate energy. It is planning to achieve 40% of its energy from non-fossil sources by 2030, which is currently 30%. India aims to achieve 500 GW of renewable energy capacity (including wind, solar, hydro, and bioenergy) by
2030 which is part of its commitment to source roughly 50% of electricity from non-fossil-fuel sources by that year. For the full fiscal year 2024–25 (up to March 2025), capacity hit 220.1 GW. The shift away from coal-based energy sources to renewable sources poses a threat to continued revenue streams from supplying drilling equipment to Coal India Limited for coal mining operations in the long term. In the meantime, the company is continuously evaluating other viable and sustainable avenues for diversification and growth.
16. Financial position of the customers of the Company.
We believe that heavy equipment and capital goods are generally purchased through third-party financing. The recent economic developments and increase in interest rates have led to a decline in the availability of consumer credit, increased consumer borrowing costs and increased default rates. Such factors may negatively affect global equipment sales, and the continuation or worsening of these difficulties may lead to adverse effects on our business, results of operations, cash flows and financial volatility in interest rates affects the ability and willingness of prospective purchasers to obtain financing for the purchase of our products manufactured by us. These factors may result in a decrease in our sales, which may adversely affect our business, profitability and operations.
E. RISK MANAGEMENT
The Company has implemented a comprehensive Risk Management frameworktoeffectivelyidentify, evaluate, and address various operational, strategic, and regulatory risks. This framework encompasses various company operations and key criteria, including strategic, reputational, operational, financial, and compliance or litigation risks. The ERM framework undergoes periodic reviews by
PwC, the Companys internal auditor, and a report detailing the mitigation status of risks is presented to the Audit Committee. This structured approach aligns with the Companys commitment to delivering sustainable value while ensuring a systematic and integrated methodology for managing risks. The framework includes regular risk assessments, which are embedded into the Companys annual Internal Audit programme. These assessments are reviewed periodically by the Audit Committee and the Internal Auditors to ensure ongoing oversight and timely intervention.
The Board is regularlyupdatedonsignificantrisks and the measures undertaken to mitigate or eliminate these risks wherever possible.
Risk evaluation and management are integral and continuous processes within the organisation.
F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
There is an efficient internal control system in operation in the Company, which is adequate and commensurate with the size and magnitude of operations. Internal Audit functions directly under the control of Audit Committee. The Company has an internal system in place for all the operational and transactional activities to identify problem areas and bring the same before the Board of Directors for corrective measures.
The Internal Control Systems have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information. All the department functions in the Company are aligned with the objectives of the internal control systems. Internal audits play a crucial role in corporate governance. The internal auditors reports are placed before the Audit Committee for discussion. The decisions arising from the discussion are properly addressed and tracked through "action taken reports".
The Audit Committee members have direct discussions with the internal auditors to ascertain the scope of the audit, the efficacyof the audit process and its effectiveness, and concerns, if any, arising out of the audit carried out.
The Companys Internal Controls addresses material risks in your Companys operations and financial reporting objectives. Such controls have been assessed during the year under review, taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internalnancial controls were observed.fi
G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
Our Company is in the business of manufacturing and marketing Blast Hole Drills (Rotary and DTH, Diesel / Electric driven) for mining applications, Jackless Drills for Construction and Mining applications, Water Well Drills, Hydro-Fracturing Units and Exploratory Drills. Our plant located at Pollachi Road, Malumachampatti PO, Coimbatore, Tamil Nadu, 641050. The production and capacity details for our drill machines are as mentioned below:
| Period ended/ Fiscal | Annual Installed Capacity (nos.) | Actual Production (nos.) | Capacity Utilization (%) |
| FY25 | 60 | 17 | 28% |
| FY24 | 60 | 22 | 49% |
| FY23 | 60 | 11 | 23% |
Certain key operational and financial metrics for the financialear ending 2025 and 2024 are set forth below: y
| FY2025 | FY2024 | ||||
| Particulars | Amount from operations | % of total revenue | Amount from operations | % of total revenue | % growth in FY25 compared to FY24 |
| Sale of Drills | 86.50 | 48.45% | 146.85 | 69.12% | -41.09% |
| Sale of Spares | 84.01 | 47.06% | 56.68 | 26.68% | 48.22% |
| Sale of Services | 6.76 | 3.79% | 7.53 | 3.54% | -10.19% |
| Other Operating Income | 1.25 | 0.70% | 1.41 | 0.66% | -11.06% |
| Total Revenue from | |||||
| 178.53 | 100.00% | 212.46 | 100.00% | -15.97% | |
| Operations | |||||
| EBITDA | 29.13 | 38.78 | -24.88% | ||
| PAT | 20.18 | 11.30% | 31.05 | 14.61% | -35.01% |
*PAT (%) is PAT expressed as a percentage of total income
Break up of major heads of Expenditures:
| Particulars | FY25 | FY24 | Absolute | Increase Percentage | % of total revenue from operations |
| Cost of materials consumed | 86.99 | 107.09 | -20.10 | -18.77% | 48.72% |
| Purchase of stock in trade | 12.18 | 14.01 | -1.83 | -13.04% | 6.82% |
| Changes in inventory | 2.00 | - 8.61 | 6.61 | -76.77% | -1.12% |
| Employee benefit expense | 25.43 | 30.45 | -5.02 | -16.50% | 14.24% |
| Finance costs | 10.06 | 5.53 | 4.53 | 81.80% | 5.63% |
Cash Flows:
| Particulars | 2025 | 2024 |
| Opening Cash & Cash equivalents | 13.30 | 7.55 |
| Net cash from operating activities | 27.87 | 44.15 |
| Net cash from investing activities | (36.05) | (30.83) |
| Net cash used in financing activities | (3.83) | (7.58) |
| Change in Cash and cash equivalents | (12.02) | 5.75 |
| Closing cash & cash equivalents | 1.29 | 13.30 |
As a result of the above operations, the financial performanceof the Company is as follows:
| Particulars | 2025 | 2024 |
| Total Revenue | 188.84 | 221.13 |
| Total Expenditure (including Finance Cost) | 161.09 | 180.41 |
| Finance Cost | 10.06 | 5.53 |
| Profit /(Loss) before tax for the period (before minority interest, in-case of consolidated) | 27.75 | 40.71 |
| Tax Expense | 7.57 | 9.66 |
| Minority/ Non-controlling Interest (in-case of consolidated) | 0.00 | 0.00 |
| Exceptional Item | 0.00 | 0.00 |
| Profit /(Loss) for the period (after tax, minority interest and Exceptional Item) | 20.18 | 31.05 |
| Reserves & Surplus | ||
| Capital Reserve | 0.01 | 0.01 |
| General Reserve | 46.00 | 46.00 |
| Retained earnings | 209.21 | 189.03 |
| Capital Reserve on business combination | (131.53) | (131.53) |
During the year under review, our Company has earned a revenue of Rs. 188.84 crores as against Rs. 221.13 crore in the previous year.
The income from the operation of the Company for the financial year 2025 stood at Rs 178.53 crore compared to Rs 212.46 crore in the previous financial year. The expenditure incurred during the year under review was Rs. 161.09 crore as against Rs. 180.41 crore in the previous year. The Companys Net profit during the year under review stood at Rs 20.18 crore as compared to Rs 31.05 crore in the previous year. The details of the growth achieved by the Company are as produced below:
Note: EBITDA has been calculated as the sum of profit before tax, finance costs, depreciation, and amortisation, excluding other income.
The exponential growth of the Company in the financial year 2023-2024 was attributed to the substantial increase in export has grown at 462% compared to the preceding year. However, the financial year 2024-2025 was characterized by many significant events like the ongoing Russia-Ukraine war, Israel-Palestine war, Houthi attacks on shipping, Panama Canal drought, U.S.–China trade escalation, Critical minerals export restrictions by China and so on which resulted in the disruption of the logistics and creation of supply chain issues and also resulted in spike in energy prices which led to higher operating costs and pressure on profit margins and also adversely impacted export business of the Company. The Company incurred additional expenses, and the business was also affected by the implementation of the Composite Scheme of Arrangement approved by the National Company Law Tribunal, Chennai
Bench, vide order dated 14th June 2023. However, it is gratifying to note that despite the challenging business, global and economic environment, the company was able to achieve and maintain good profit levels. Finance costs increased during the year due to higher export inventory holding and also due to the modernisation of the production facilities of the Company. The Company incurred additional expenses, and the business was also affected due to the transition/ transfer of
Scheme of Arrangement approved by the National Company Law Tribunal, Chennai Bench, vide order dated 14th June 2023 and also for listing of Companys shares in the stock exchanges. Despite the challenging business environment, the Company has remained profitable during the year under review.
H. SEGMENT-WISE POSITION OF BUSINESS AND ITS OPERATIONS.
Manufacturing of Drill Equipment is the only segment of the Company. The financial performance of the said segment is more detailed in the audited standalone financial statements of the Company. The revenue of the Company disaggregated based on the products/ services and from customers based geography.
PRODUCT/ SERVICES CATEGORY
The operating segments of the Company on the basis of Product/ Services Category are broadly classified into the following:
1. Drills
2. Spares (Including Traded spares)
3. Sale of services (i.e. after sale services)
The revenue from the sale of Drills was 86.50 crores in FY2025 compared 146.85 crores in FY2024 drop of 41% driven by lower volumes. Our revenues from sales of spare parts increased from 56.68 crores in the FY2024 to 84.01 crores in FY2025 thereby achieving a growth of 48% compared to the previous year. The following charts sets forth our revenue from Product/ Services Category and its growth rate compared to previous year:
GEOGRAPHICAL BREAKDOWN
In FY25, volume and percentage of revenues outside India have overall remain flat from FY24 levels. The Domestic sales of the Company for the FY2025 was 110.47 crores compared to 135.76 crores in the FY2024 a decline of 19% compared to previous year. The export sales of the Company during the FY2025 was 68.06 crores compared to 76.70 crores in the FY2024 a decline of 19% compared to previous year. The domestic sales were subdued due to prevailing economy challenges in the economy and global political instability, whereas Export sales were impacted by intensified global geopolitical tensions, conflicts,trade disputes, and alliances shifting in FY25.
The following chart sets forth our revenue from domestic sales vs exports:
I. KEY FINANCIAL RATIOS:
| S. No Description | 2025 | 2024 | Change | Reasons for change (25% or more) |
| 1. Debtors Turnover (in times) | 1.51 | 1.52 | -0.9% | Primarily due to lower sales volume |
| 2. Inventory Turnover (in times) | 0.61 | 0.78 | -21.5% | Due to reduction in turnover with 12% reduction in inventory |
| 3. Interest Coverage Ratio (in times) | 3.76 | 8.36 | -55% | Due to reduction in sales & rise in interest expenses |
| 4. Current ratio (in times) | 1.79 | 1.72 | 4.3% | |
| 5. Debt Equity ratio (in times) | 0.29 | 0.29 | 1.6% | |
| 6. Operating Profit Margin (%) | 21% | 22% | -2.7% | |
| 7. Net Profit Margin (%) | 11% | 15% | -22.7% | |
| 8. Return on Net Worth (%) | 16% | 29% | -46.2% | Primarily due to reduction in turnover |
J. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT:
Material Developments in Human Resources:
Employees are viewed as the foundation and considered as the Capital of the Companys success. The employees are the most important assets of the Company. The Company is committed to hiring and retaining the best talent and being among the industrys leading employers. The Company has also taken steps to retain its talent pool, enhance the skills of existing people and recruit the most suited talent to spearhead its growth initiatives. For this, the Company focuses on promoting a collaborative, transparent, and participative organizational culture, rewarding merit, and sustaining high performance. The human resource management of the Company focuses on allowing the employees to develop their skills, grow in their careers and navigate to the next level.
Employee safety and wellbeing remain a top priority at the Company and with initiatives like Free Medical Camps, Medical Checkups, Safety awareness programs designed to equip employees with essential skills to maintain a safe working environment. Safety continues to be a guiding principle in creating a secure workplace.
The Company employs women in various cadres within the Office/factory premises. The Company has in place the Sexual of Women at Workplace (Prevention, Prohibition and Redressal) policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress any complaint regarding sexual harassment. Your Company has zero tolerance on sexual harassment at the workplace.
In alignment with the principles of diversity, equity, and inclusion (DEI), the Company discloses below the gender composition of its workforce as on the 31st March 2025.
| Male Employees | Female Employees | Transgender Employees | Total |
| 208 | 14 | 0 | 222 |
This disclosure reinforces the Companys efforts to promote an inclusive workplace culture and equal opportunity for all individuals, regardless of gender. The Company has complied with the provisions of the Maternity Benefit Act, 1961, including all applicable amendments and rules framed thereunder. The Company is committed to ensuring a safe, inclusive, and supportive workplace for women employees. All eligible women employees are provided with maternity benefits as prescribed under the Maternity Benefit Act,
1961, including paid maternity leave, nursing breaks, and protection from dismissal during maternity leave. To foster a supportive environment for families, we have introduced initiatives such as womens travel safety policies and an extensive maternity support policy. In conformance with the regulatory norms, we also provide them with the maternity and paternity benefits.
The Company also ensures that no discrimination is made in recruitment or service conditions on the grounds of maternity. Necessary internal systems and HR policies are in place to uphold the spirit and letter of the legislation.
Human Resource Development is one of Companys important objectives for long-term economic growth. Human Resource Development is the integrated use of training and development, organisational development, and career development to improve individual group and organisational effectiveness.
The companys Human Resource Development climate plays a very important role in ensuring the competency, motivation, and development of our employees. It helps to provide learning relatedtotheorganisationsgoals.Itinfluencesmorale and the attitudes of the individual towards his / her work and work environment.
The Company is continuously providing training and development opportunities to its employees in all levels including management trainees. In addition, company also arranges external training programs.
Material Developments in Industrial Relations front:
Industrial Relations in our company continue to be highly cordial and harmonious. The participative way of functioning of management facilitates settling disputes / grievances amicably through discussions, which in turn has resulted in maintaining overall healthy ethos of relationships in the Company.
The Company is committed to maintaining healthy industrial relations which in turn helps in creating an atmosphere of industrial peace and harmony, which is necessary for better management, high productivity as well as growth of the Company.
CAUTIONARY NOTE
Certain statements in the "Management Discussions and Analysis" section may be forward-looking and are stated as required by law and regulations. Many factors, both external and internal, may affectthe actual results, which could be different from what the directors envisage in terms of performance and outlook.
| By Order of the Board | |
| For Revathi Equipment India Limited | |
| Abhishek Dalmia | |
| Date : 8th August 2025 | Chairman & Managing Director |
| Place: Coimbatore | DIN: 00011958 |
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