Rexnord Electronics & Controls Ltd Management Discussions

ECONOMIC OVERVIEW

The Indian economy maintained a strong and resilient growth trajectory during FY 2025-26, supported by robust domestic demand, strengthening investment activity, improving manufacturing performance and continued policy emphasis on infrastructure development and industrial competitiveness. As per the First Advance Estimates, India?s real GDP growth for FY 2025-26 was at 7.4%, compared with 6.5% in FY 2024-25. Manufacturing activity also strengthened significantly, with real manufacturing GVA estimated to grow by approximately 7.0% during FY 2025-26.

The key factors supporting India?s economic momentum during the year included:

• Strong domestic consumption, supported by improving economic activity and continued demand across consumer, industrial and infrastructure sectors.

• Improved manufacturing activity, aided by government initiatives promoting domestic manufacturing, supply-chain resilience, localisation and technological upgradation.

• Strengthening capital formation and infrastructure investment, with continued emphasis on transport, power, urban infrastructure, digital infrastructure and industrial capacity.

• Moderating inflationary pressures, which supported greater stability in household consumption and business planning.

• Increasing adoption of technology and digital infrastructure, contributing to productivity improvements and the modernisation of manufacturing and supply-chain operations.

The Government?s continued focus on infrastructure and domestic manufacturing has created a favourable environment for engineering and component manufacturers. The Economic Survey 2025-26 specifically highlights India?s ongoing industrial transformation, investment and infrastructure development, and the increasing integration of domestic manufacturing with global supply chains.

INDUSTRY OUTLOOK

The refrigeration, HVAC, ventilation and air-movement industry continued to benefit from structural growth drivers during FY 2025-26. Increasing demand for cooling and ventilation solutions is being supported by the expansion of commercial and industrial infrastructure, data centres, cold-chain facilities, food processing, pharmaceuticals, electronics manufacturing, modern retail and residential and commercial construction.

The increasing focus on energy efficiency and environmentally responsible cooling solutions is also creating demand for efficient motors, fans and customised air-movement solutions. OEMs are increasingly seeking components that provide improved energy efficiency, reliability, compact design, lower noise levels and consistent performance.

The continued growth of the cold-chain and food-processing ecosystem, together with increasing investments in refrigeration infrastructure, provides a favourable long-term demand environment for manufacturers of refrigeration and air- movement components.

TECHNOLOGY AND INDUSTRY 4.0

The adoption of Industry 4.0 practices continued to influence manufacturing across sectors during FY 2025-26. Businesses are increasingly adopting automation, digital monitoring, data-driven decision making and predictive maintenance to improve productivity, quality and equipment reliability.

During FY 2025-26, the Company further strengthened its automation capabilities through the installation and commissioning of automatic robotic assembly lines. These automated assembly systems have contributed to an improvement of approximately 30% in productivity, while also supporting greater process consistency, improved quality control and reduced dependency on manual operations. The initiative represents an important step towards enhancing manufacturing efficiency and strengthening the Company?s competitiveness.

The Company continues to evaluate opportunities for further automation and technology adoption across its manufacturing processes, with the objective of improving productivity, quality, operational efficiency and cost competitiveness.

ENERGY EFFICIENCY AND SUSTAINABILITY

Energy efficiency and environmental sustainability continued to gain importance during FY 2025-26. Customers and OEMs are increasingly evaluating the energy consumption, operating efficiency, reliability and environmental performance of components used in refrigeration and ventilation systems.

This trend presents an opportunity for Rexnord to strengthen its portfolio of energy-efficient, compact and low-noise motors and fans, while continuing to focus on resource optimisation and responsible manufacturing practices.

The Company?s ongoing emphasis on product improvement, manufacturing efficiency, reduction of process wastage and optimisation of material consumption is aligned with the broader transition towards more sustainable industrial manufacturing.

MANUFACTURING EXCELLENCE, AUTOMATION AND PRODUCTIVITY ENHANCEMENT

During FY 2025-26, the Company continued to invest in manufacturing automation, process optimisation and technology upgradation with the objective of enhancing productivity, improving quality, strengthening traceability and reducing manufacturing cycle times.

As part of these initiatives, the Company implemented the following key manufacturing improvements during the year:

• Fully Automated Assembly Line for AC Fans: A fully automated assembly line was commissioned for the Company?s 4-inch AC fan, resulting in an increase in production capacity of approximately 200% compared with the earlier manufacturing process.

• Semi-Automatic Assembly Line for BLDC Fans: A semi-automatic assembly line was introduced for 3-inch and 4-inch BLDC fans, resulting in an increase in production capacity of approximately 150%.

• Conveyorized Assembly Lines: Conveyorized assembly lines were introduced across other product categories, replacing the earlier batchprocessing method. This transition has resulted in an improvement in production productivity of approximately 30%, while facilitating smoother material flow and improved process control.

• Automated Testing and Traceability: The Company implemented automated testing equipment for AC fan Q motors, LAF motors and final assembly operations. The testing and assembly processes have also been integrated with BAR/QR code generation and traceability systems, enabling improved product identification, process traceability and quality monitoring.

These initiatives represent an important step in the Company?s ongoing transition towards lean, automated and digitally enabled manufacturing. The investments are expected to support higher production capacity, improved consistency and quality, enhanced traceability and greater operational efficiency, while enabling the Company to respond more effectively to increasing customer requirements.

The Company will continue to evaluate opportunities for further automation, process digitisation and manufacturing technology upgrades to improve productivity, quality and cost competitiveness.

SUPPLY CHAIN AND RAW MATERIAL ENVIRONMENT

Global supply chains continued to undergo structural changes during FY 202526, with businesses increasingly focusing on supplier diversification, localisation, inventory optimisation and greater supply-chain resilience.

Volatility in the prices and availability of key inputs, including copper, steel and other engineering materials, continues to require disciplined procurement and cost management. Rexnord remains focused on strengthening its sourcing strategies, developing alternate sources, improving inventory controls and enhancing supply-chain visibility.

The Company?s focus on agile manufacturing, supplier development, backward integration where commercially viable and effective inventory management is intended to improve operational resilience and reduce the impact of external supply-chain disruptions.

CONSUMER PREFERENCES AND DEMAND PATTERNS

During FY 2025-26, consumer preferences and demand patterns across the refrigeration, air-conditioning, ventilation and cooling segments continued to evolve. Customers are increasingly seeking products that offer energy efficiency, reliability, affordability, lower noise, compact design and longer operating life. At the OEM level, these changing preferences are translating into greater demand for technologically advanced, customised and cost-effective components.

The Company?s business is therefore influenced by both the growing demand for efficient cooling solutions and the changing requirements of OEM customers. While these trends present significant opportunities for Rexnord Electronics and Controls Limited, the industry also remains exposed to factors such as seasonality, raw material price volatility, competitive pressures, technological changes and fluctuations in consumer demand.

OPPORTUNITIES

1. Growing Demand for Energy-Efficient Cooling Solutions

Increasing consumer awareness of electricity consumption and the total cost of ownership is driving OEMs towards more energy-efficient refrigeration and cooling products. This creates opportunities for Rexnord to strengthen its portfolio of efficient motors and fans and develop products aligned with evolving energy-efficiency requirements.

2. Growth in Refrigeration, HVAC and Cold-Chain Infrastructure

Expansion of cold-chain logistics, food processing, pharmaceuticals, modern retail, commercial infrastructure and other temperature-sensitive industries is expected to support long-term demand for refrigeration and air-movement components.

3. Increasing Adoption of BLDC and Advanced Motor Technologies

The growing preference for energy-efficient appliances and equipment is creating opportunities for advanced motor technologies, including BLDC solutions. Rexnord?s capabilities in developing and manufacturing application-specific motors position the Company to participate in this evolving market.

4. Demand for Compact and Low-Noise Products

Modern appliances and cooling systems increasingly require components that provide high performance within compact dimensions and with lower operating noise. This creates opportunities for the Company to leverage its engineering and product-development capabilities to provide customised solutions to OEM customers.

5. Increasing Demand for Quality, Automation and Traceability

OEM customers are placing greater emphasis on consistent quality, process control and product traceability. The Company?s investments in automated assembly, automated testing and BAR/QR-code based traceability systems strengthen its ability to meet these requirements and provide greater confidence to customers.

6. Increasing Localisation and Supply-Chain Diversification

The continued focus on domestic manufacturing and supply-chain resilience provides opportunities for Indian component manufacturers to increase their participation in domestic and global supply chains. Rexnord can leverage its manufacturing capabilities and established customer relationships to pursue opportunities arising from increased localisation.

RISKS AND THREATS

1. Seasonality and Weather-Dependent Demand

Demand for air-conditioning, refrigeration and cooling products is influenced by seasonal weather patterns and temperature conditions. Unseasonal rainfall or a shorter summer season can affect OEM production schedules and consequently impact demand for cooling components.

2. Raw Material Price Volatility

The Company?s manufacturing costs remain sensitive to fluctuations in the prices of key raw materials, particularly copper, steel and other engineering materials. Significant or sudden increases in input costs may put pressure on margins, particularly where such increases cannot be immediately passed on to customers.

3. Competitive Pricing Pressure

The fan and motor industry remains competitive, with both domestic and international manufacturers competing on price, quality, technology, delivery and product customisation. Continued pricing pressure may impact margins and requires the Company to continuously improve productivity and cost efficiency.

4. Rapid Technological Changes

The increasing adoption of energy-efficient motor technologies and changing product specifications require continuous investment in product development, testing and manufacturing capabilities. Failure to keep pace with technological developments could affect the Company?s competitiveness.

5. Customer Concentration and OEM Demand Cycles

As an OEM-oriented component manufacturer, the Company?s demand is influenced by the production schedules, product launches and business cycles of its customers. Changes in OEM demand, inventory levels, model changes or delays in new product launches may result in fluctuations in order volumes.

6. Global Supply-Chain and Geopolitical Risks

International trade disruptions, geopolitical developments, freight cost fluctuations, currency movements and shortages of critical materials can affect the availability and cost of inputs and may create challenges for both domestic and export operations.

7. Regulatory and Energy-Efficiency Requirements

Increasing regulatory requirements relating to energy efficiency, environmental standards and product performance may require continuous investment in product redesign, testing and compliance. While these changes create opportunities for efficient products, they may also increase development and compliance costs.

FINANCIAL PERFORMANCE AND OUTLOOK

Rexnord Electronics and Controls Limited continued to demonstrate a resilient financial and operational performance during FY 2025-26. Against a dynamic economic and competitive environment, the Company achieved total revenue of 12247.70 lakhs during the year, reflecting the continued strength of its business operations, customer relationships and market presence.

The Company recorded EBITDA of 1877.30 lakhs during FY 2025-26. The EBITDA performance reflects the Company?s continued focus on operational efficiency, productivity enhancement, cost management and effective utilisation of manufacturing resources.

The Company?s long-term growth trajectory also remains encouraging, with compounded sales growth of 10% over the past three years. This sustained growth reflects the Company?s ability to respond to evolving market requirements, strengthen its customer base and capitalise on opportunities in the refrigeration, cooling and air-movement segments.

During FY 2025-26, the Company continued to strengthen its manufacturing infrastructure and invested in capacity and technology enhancement. Fixed assets stood at 6627.57 lakhs, reflecting the Company?s continued commitment towards manufacturing capabilities, automation, capacity creation and long-term business growth.

The investments made during the year in fully automated and semi-automated assembly lines, conveyorized production systems, automated testing equipment and BAR/QR-code based traceability systems are expected to contribute to higher productivity, improved quality, enhanced traceability and greater manufacturing efficiency. These initiatives are aligned with the Company?s strategy of building a more automated, scalable and technology- driven manufacturing platform.

The Company?s financial position continues to remain sound, supported by its asset base and prudent financial management. The management remains focused on maintaining an appropriate balance between growth investments, operational efficiency, working-capital management and financial discipline.

COMPETITIVE LANDSCAPE AND STRATEGIC PRIORITIES

The fans and motors industry continues to remain competitive, with manufacturers competing across multiple parameters including product quality, energy efficiency, pricing, delivery performance, customisation, reliability, technological capability and customer service. The market comprises established domestic manufacturers, specialised component suppliers and international players, as well as lower-cost suppliers competing in price-sensitive segments.

During FY 2025-26, customer expectations continued to evolve towards more energy-efficient, reliable, compact and application-specific solutions. The increasing adoption of BLDC and energy-saving technologies, together with growing demand for higher product consistency and traceability, is expected to further influence the competitive landscape.

In this environment, the Company believes that its competitive strength lies in its established experience in refrigeration and cooling applications, in-house manufacturing capabilities, product development expertise, customer relationships and ability to provide customised solutions. The Company?s high level of in-house manufacturing also provides greater control over quality, cost and supply continuity.

STRATEGIC PRIORITIES FOR FY 2026-27

1. Strengthening Market Position

The Company will continue to strengthen its position as a reliable supplier of fans and motors to OEMs in refrigeration, HVAC, appliances and related applications. Greater emphasis will be placed on strengthening existing customer relationships while developing new domestic and international customers.

2. Increasing Share of Energy-Efficient Products

The Company will continue to focus on the development and commercialisation of BLDC, EC and other energy-efficient fan and motor solutions. The shift towards energy-efficient appliances and equipment represents a significant long-term opportunity for the Company. Current policy and industry trends also indicate increasing scope for domestic manufacturing of efficient motors and related components.

3. Leveraging Automation for Cost Competitiveness

The investments made during FY 2025-26 in automated and semiautomated assembly lines provide the Company with a significant opportunity to improve productivity and competitiveness. The fully automated AC fan assembly line, semi-automatic BLDC fan assembly line and conveyorized assembly lines have substantially enhanced production capability. The Company intends to leverage these investments to improve cost efficiency, delivery performance, scalability and consistency of quality.

4. Product Development and Customisation

The Company will continue to invest in product development to meet the increasingly specific requirements of OEM customers. Focus areas will include energy efficiency, compact design, low noise, improved airflow, reliability, durability and application-specific engineering. The Company?s ability to develop customised products for refrigeration, cooling and ventilation applications will remain an important differentiator in an increasingly competitive market.

5. Improving Quality and Traceability

The Company?s investment in automated testing equipment and BAR/QR- code based traceability provides an opportunity to further strengthen quality assurance and process control. The Company will continue to enhance automated testing, process monitoring and traceability to ensure consistent product quality and provide greater visibility across the manufacturing process.

6. Expanding Domestic and Export Markets

The Company will continue to pursue opportunities in both domestic and international markets. Particular emphasis will be placed on markets where demand for refrigeration, HVAC, cold-chain and energy-efficient cooling solutions is expanding. The Company will seek to diversify its customer and geographic base while maintaining a disciplined approach towards pricing, credit exposure and working capital.

7. Supply-Chain and Cost Optimisation

In view of continuing volatility in key raw materials such as copper and steel, the Company will continue to focus on alternate sourcing, supplier development, inventory optimisation and cost engineering. The objective will be to protect margins while maintaining product quality and delivery commitments.

8. Building a Technology-Led Manufacturing Platform

The Company?s long-term strategy is to progressively develop a more automated, data-driven and scalable manufacturing platform. Further opportunities for automation, digital monitoring, process optimisation and predictive maintenance will be evaluated based on their potential to improve productivity, quality and return on investment.

COMPETITIVE STRATEGY

The Company?s competitive strategy for FY 2026-27 will therefore be centred on “Quality + Technology + Productivity + Customisation + Cost Competitiveness.”

Rather than competing solely on price, Rexnord intends to differentiate itself through a combination of engineering capability, manufacturing efficiency, consistent quality, responsive customer service and the ability to provide customised fan and motor solutions.

The Company believes that its investments in automation and manufacturing technology, together with its established market experience and product capabilities, provide a strong foundation to address competitive pressures and capture emerging opportunities in the refrigeration, HVAC and cooling markets.

Management remains focused on achieving sustainable growth while maintaining financial discipline, operational efficiency and long-term value creation for all stakeholders.

EXPORTS

Exports continued to remain an important component of the Company?s business during FY 2025-26. The Company recorded export sales of 1,185.42 Lakhs, compared with 1,558.20 Lakhs in FY 2024-25.

The moderation in export sales during the year was largely influenced by a challenging global business environment, including geopolitical uncertainties, subdued demand in certain international markets, trade and supply-chain disruptions, and cautious procurement by overseas customers. These factors resulted in longer decision-making cycles and some postponement or moderation of orders across certain markets.

Despite these external challenges, the Company continued to maintain its relationships with existing international customers and remained focused on providing quality products, competitive solutions and responsive customer service. The Company?s presence across markets in Europe, the Middle East and Asia provides a diversified base from which to pursue future export opportunities.

The Company remains cautiously optimistic about the outlook for exports. As global supply chains continue to evolve and international customers increasingly seek reliable, cost-effective and diversified sources of supply, opportunities exist for Indian manufacturers with established manufacturing capabilities and consistent quality standards.

During FY 2026-27, the Company intends to focus on deepening relationships with existing overseas customers, developing new markets, expanding its product offerings and increasing its engagement with international OEMs and distributors. The Company?s investments in automation, productivity enhancement, quality systems and traceability are expected to further strengthen its competitiveness in international markets.

Management will continue to closely monitor geopolitical developments, global demand conditions, freight costs, currency movements and trade policies while pursuing a prudent and sustainable approach to export growth.

The Company remains committed to gradually expanding its international footprint and believes that its manufacturing capabilities, product quality, customised solutions and long-standing customer relationships provide a sound foundation for renewed growth in exports in the coming years.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has established and maintained an effective system of internal financial and operational controls commensurate with the size, scale and nature of its business. The internal control framework is designed to provide reasonable assurance regarding the reliability of financial reporting, safeguarding of assets, operational efficiency, compliance with applicable laws and regulations, and prevention and detection of errors and irregularities.

The Company?s control environment is supported by clearly defined governance processes, delegation of authority, Standard Operating Procedures (SOPs), financial controls and operational systems across its manufacturing and corporate functions. The Company?s SAP ERP system provides an integrated platform for transaction processing, role-based access and authority controls, data integrity and monitoring of key business processes.

During FY 2025-26, the Company continued to strengthen its internal control environment through increased automation, system-based controls and improved process traceability. The introduction of automated assembly and testing systems, together with BAR/QR-code based product traceability, has enhanced process monitoring, quality control and accountability across key manufacturing operations.

The Company has an established Internal Audit function which periodically reviews the adequacy and effectiveness of internal controls across its manufacturing plants and Head Office. Internal audits cover key areas including finance and accounting, procurement, inventory management, production, sales, receivables, statutory compliance and operational processes. Significant observations, wherever identified, are communicated to the appropriate management personnel for corrective action and follow-up.

The Company?s internal control framework is reviewed periodically by the management with a view to identifying areas for improvement and strengthening controls in response to changes in business operations, technology and regulatory requirements.

Based on the internal reviews and audit processes undertaken during the year, the management believes that the Company?s internal financial controls and operational control systems are adequate, appropriate and operating effectively, commensurate with the Company?s size and complexity.

FINANCIAL PERFORMANCE

The Company delivered a resilient financial performance during FY 2025-26, supported by continued demand across its key product segments and an expanding product portfolio. The Company achieved total revenue of 12247.70 lakhs during the year, reflecting the underlying strength of its business, customer relationships and market position.

While revenue performance remained encouraging, profitability was impacted during the year by increased input costs, particularly in key raw materials, together with geopolitical uncertainties and volatility in the global business environment. These external factors placed pressure on margins despite the Company?s continued focus on operational efficiency and cost management.

The Company recorded EBITDA 1877.30 during FY 2025-26. The performance reflects the Company?s ability to maintain healthy operating profitability while navigating a challenging cost environment. Management remains focused on improving margins through productivity enhancement, automation, cost optimisation, improved capacity utilisation and better control over operating expenses.

The Company?s investments in manufacturing automation and process improvements during the year are expected to provide increasing benefits going forward. The introduction of automated and semi-automated assembly lines, conveyorized production systems and automated testing has significantly enhanced manufacturing productivity and is expected to support improved operating leverage as capacity utilisation increases.

The Company also continued to strengthen its product portfolio and market presence during the year, with expansion into large axial fans, domestic fans, duct fans, blowers and air-purification solutions. This diversification is expected to create additional revenue opportunities and reduce dependence on individual product segments over the medium term.

Despite the pressure on profitability during the year, the Company remains confident about its underlying business fundamentals and long-term growth prospects. Management believes that the benefits of increased automation, higher productivity, product diversification and continued operational improvements will support gradual margin improvement and stronger profitability as the benefits of these initiatives progressively materialise.

The Company will continue to maintain a prudent approach to financial management, with emphasis on working-capital discipline, cost control, efficient utilisation of capital and selective investment in growth opportunities. With a strengthened manufacturing platform and a growing product portfolio, the Company remains well positioned to pursue sustainable growth and create long-term value for its stakeholders.

OPERATIONAL ACHIEVEMENTS

During FY 2025-26, the Company continued to build upon the investments and operational initiatives undertaken in the previous year, with a clear focus on enhancing manufacturing capacity, improving productivity, strengthening operational efficiency and creating a scalable platform for future growth.

The manufacturing facility established through the Company?s investment in the previous year has progressively moved towards higher utilisation and improved production capability during FY 2025-26. The Company has continued to optimise the facility?s manufacturing processes and capacity, enabling increased production while maintaining focus on quality, consistency and delivery performance.

A significant focus during the year was on automation and process optimisation. The Company commissioned fully automated and semi-automated assembly lines, conveyorized production systems and automated testing equipment across key product categories. These initiatives have resulted in substantial improvements in manufacturing productivity and have enabled the Company to increase output while improving process consistency and reducing dependency on manual operations.

The Company also shifted its registered office at MIDC, Andheri, providing a more modern and integrated corporate environment to support its expanding operations and facilitate greater coordination across its manufacturing, commercial and support functions.

The combination of increased manufacturing capacity, automation, improved processes and strengthened infrastructure has enabled the Company to enhance its overall operating capability and respond more effectively to customer requirements. These investments also provide a strong foundation for further capacity utilisation and growth in the coming years.

Going forward, the Company will continue to focus on improving capacity utilisation, enhancing productivity, optimising manufacturing processes, strengthening quality systems and leveraging technology, with the objective of achieving sustainable growth while maintaining high standards of operational excellence and customer satisfaction.

PRODUCT INNOVATION AND EXCELLENCE

Rexnord Electronics and Controls Limited continued to strengthen its focus on product innovation and portfolio diversification during FY 2025-26, with the objective of addressing evolving customer requirements across industrial, commercial, refrigeration, HVAC and domestic applications.

Building on its established portfolio of AC axial fans, DC brushless fans and shaded-pole motors, the Company expanded its range of air-movement and motor solutions during the year. The Company?s product development initiatives included the introduction and expansion of Large Axial fans, Domestic exhaust fans, Duct fans, Blowers and Air-purification solutions, enabling the Company to address a wider range of airflow, ventilation, cooling and air-quality applications.

The expansion of the product portfolio represents an important step in the Company?s strategy to diversify its market presence and reduce dependence on individual product categories. The addition of products for domestic as well as specialised commercial and industrial applications provides opportunities to serve a broader customer base and participate in emerging segments of the air- movement and ventilation industry.

The Company continues to focus on developing products that offer energy efficiency, reliability, compact design, low-noise operation and application- specific performance. Product development is closely aligned with customer requirements, with emphasis on customisation, quality and cost competitiveness.

The Company?s expanding product portfolio, supported by its growing manufacturing capabilities and investments in automation and testing, is expected to strengthen its ability to provide comprehensive air-movement and motor solutions to OEMs and customers across domestic and international markets.

Going forward, the Company will continue to invest in product development, engineering capabilities and market-oriented innovation, with the objective of introducing solutions that address emerging requirements in refrigeration, HVAC, ventilation, air quality and domestic applications.

MARKET DYNAMICS AND OUTLOOK

The Company remains cautiously optimistic about the market outlook for FY 2026-27, supported by India?s continued economic growth, increasing industrial activity and the long-term expansion of the refrigeration, HVAC, ventilation, air- movement and cooling segments.

The Company?s strategy is focused on leveraging these opportunities through expanded manufacturing capacity, increased automation, product diversification and continued investment in technology and product development. The expansion of the Company?s product portfolio into large AC fans, domestic fans, duct fans, blowers and air-purification solutions provides access to a wider range of applications and customer segments.

The Company?s investments in automated and semi-automated assembly lines, automated testing and traceability systems have strengthened its manufacturing capabilities and are expected to improve productivity, quality, scalability and cost competitiveness. These capabilities will enable the Company to respond more effectively to evolving customer requirements and increasing demand for reliable and energy-efficient solutions.

In the international markets, the Company will continue to focus on strengthening existing customer relationships, developing new markets and expanding its presence across selected geographies. While global geopolitical uncertainties, commodity price volatility and fluctuations in international demand remain areas of consideration, the Company believes that the continued diversification of global supply chains presents opportunities for reliable and competitive Indian manufacturers.

Going forward, the Company will remain focused on profitable growth, operational excellence, product innovation, customer diversification and financial discipline. Management will continue to closely monitor market conditions and emerging opportunities while maintaining a prudent approach to investments and risk management.

With its strengthened manufacturing infrastructure, expanding product portfolio, improved automation and established customer relationships, the Company believes it is well positioned to pursue sustainable growth and create long-term value for its customers, employees, shareholders and other stakeholders.

CORPORATE SOCIAL RESPONSIBILITY

Rexnord Electronics and Controls Limited believes that supporting education is an important part of its commitment towards creating a positive and sustainable impact on society. During FY 2025-26, the Company continued its practice of making annual contributions to educational institutions, supporting their efforts towards providing quality education and creating better learning opportunities for students.

The Company?s CSR initiatives are focused on contributing to the development of the education ecosystem and supporting institutions that work towards the advancement of learning and student development. The Company believes that investment in education has a long-term multiplier effect by creating opportunities for individuals and contributing to the development of society as a whole.

The Company remains committed to continuing its support to educational institutions as part of its CSR initiatives and intends to maintain a consistent and meaningful contribution towards education in the years ahead. Through this continued engagement, Rexnord seeks to contribute towards inclusive access to education, student development and long-term social progress.

HUMAN RESOURCES

At Rexnord Electronics and Controls Limited, our employees remain at the heart of our organisation and are an integral part of the Company?s continued growth and success. The Company places strong emphasis on creating a supportive, stable and people-centric work environment where employees are encouraged to learn, develop and contribute to the organisation?s objectives.

During FY 2025-26, the Company continued to focus on regular training and skill development, covering technical, functional and behavioural areas. With the increasing adoption of automation and advanced manufacturing processes, continuous learning and upgrading of employee capabilities remain important priorities. Our strong in-house HR team works closely with employees and management to address their development, engagement and welfare needs.

Employee well-being is an important part of the Company?s workplace culture. Rexnord provides refreshments and meals to its employees, supporting their health, comfort and overall workplace experience. The Company also continues to place emphasis on a safe, respectful and positive working environment.

We believe that investing in our people creates a stronger and more capable organisation. Through continuous training, employee engagement and welfare initiatives, Rexnord remains committed to developing a motivated and skilled workforce capable of supporting the Company?s growth and future expansion.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS (STANDALONE):

Ratio	2025-26	2024-25
Debtors? Turnover ratio (times)	11.58	13.18
Inventory turnover (times)	1.91	2.06
Interest coverage ratio (times)	6.42	5.80
Current ratio (times)	2.17	2.17
Debt equity ratio (times)	0.22	0.38
Operating Profit Margin Ratio (%)	7.95%	8.92%
Net Profit Margin Ratio (%)	4.10%	4.67%

RETURN ON NET WORTH:

The return on net worth of the Company remained 5.20% for the year as against 6.16% in the previous year. The reduction in the return on worth are mainly on account of increase in material costs and effect of exceptional items.

CAUTIONARY STATEMENT:

Statement in the Management Discussion and Analysis describing the Company?s objectives, expectations, estimates or predictions may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement due to external factors. Important factors that could influence the Company?s operations include global and domestic supply and demand conditions affecting selling prices of finished goods, input availability and prices, changes in Government regulations, tax laws and economic developments within the country. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis, of any subsequent developments, events or information.