roto pumps ltd share price Management discussions


ECONOMIC OVERVIEW Global economy

The global economy is undergoing tough times due to ongoing geopolitical issues and global supply chain tailbacks. Other factors affecting the global economy are inflationary trends especially in US, which has ebbed in recent months of 2023 and recessionary trends in Europe. The global economy is estimated to grow by 3.5% during 2022 against projected growth of 3.2%. The advance economies are estimated to grow by 2.7% against projected growth of 2.5% while growth of emerging markets and developing countries is estimated at 4.0 % against projections of 3.6%. The global economy is projected to grow by 3% in 2023. Advanced economies are projected to grow at 1.5 % while emerging markets and developing economies are projected to grow at 4% in 2023. In 2024, emerging markets and developing countries are projected to grow at 4.1 % while advance countries growth is projected at 1.4% and global economy is protected to grow by 3.0%. Source: International Monetary Fund, July, 2023.

Indian economy

7.2%

Indias GDP growth in 2022-23

Notwithstanding the global gloomy outlook, Indias economic activity has been robust on the back of a conducive domestic policy environment and the Governments sustained focus on structural reforms. Owing to its strong macroeconomic fundamentals, the Indian economy is estimated to grow by 7.2% in FY 2022-23. Source: NSO, Provisional estimate of national income 2022-23

A combination of rising disposable income coupled with the easy availability of credit and stabilizing inflation trajectory will bode well for the domestic economys growth, however higher interest rates are a matter of concern. The Indian economy is expected to grow by 6.5% during 2023-24, as RBI press release dated 8th June, 2023.

INDUSTRY OVERVIEW Global Industry

The global industrial pumps market was valued at USD 69.85 billion in 2021 and is expected to grow at a CAGR of 6.3% during the forecast period upto 2030. Increasing investments in the oil & gas sector, technological advancements in pump manufacturing, and new product launches focusing on enhanced performance are expected to have a positive impact on the market.

Increasing investments in the exploration and production activities by the oil & gas companies across the globe are anticipated to boost the demand for pumps in the oil & gas industry. The rising number of infrastructure upgrades, in terms of changing or the installation of new pipelines, is expected to have a positive impact on the market.

The advancements in pump technology have resulted in enhanced basic process tasks, increasing the reliability of the pumps, and providing a long-term reduction in everyday operating processes. These advanced pumps are mostly used in industries, such as industrial wastewater, agriculture, power, and chemicals.

Manufacturers are also focusing on new product launches keeping in mind the dynamic requirement of the market. However, new energy efficiency standards that are to be incorporated may require redesigning of pumps by manufacturers, which may incur high costs and time, thereby restraining the market growth.

Product Type Insights

The centrifugal pump segment led the market in 2020 and accounted for 52% of the global revenue share. Centrifugal pumps are used for higher flows and hence, are extensively used in the chemical industry. These are preferred for low-pressure and high- capacity pumping applications of liquids with viscosities ranging between 0.1 and 200 cP.

The demand for positive displacement pumps is estimated to witness growth at the fastest CAGR of 3.4%, in terms of revenue, from 2020 to 2028 owing to their efficient working at lower speed and consistent flow rates. Moreover, the preference for positive displacement pumps in the oil & gas industry is likely to complement segment growth.

Manufacturers are using technology to their advantage by developing innovative pumping solutions. New products are equipped with precision control and efficiency using electronic sensors and other digital software. Moreover, the suitability of reciprocating pumps in pumping hazardous fluids is likely to boost the product demand.

Application Insights

The agriculture application led the market in 2020 with a revenue share of more than 25%. Technological advancements in the field of irrigation and farming, especially in emerging countries, coupled with the rising usage of pumps for several purposes in the agriculture segment, such as irrigation, dewatering of crops, reuse, are likely to boost the growth. The construction segment is also estimated to witness significant growth from 2020 to 2028. The rapid development of housing complexes and commercial buildings in prime cities would require proper systems for water availability, disposal of sewage, and treatment of wastewater. Moreover, heavy investments in public infrastructures, such as offices, hospitals, and housing societies, are expected to boost the demand for pumps in the construction industry.

The demand for pumps in water & wastewater applications is expected to grow at a CAGR of 3.6% from 2020 to 2028. The increasing requirement of pump stations in wastewater treatment plants, where gravity flow is not feasible, coupled with high flow rate deliverability and high transmission velocity is likely to augment the market growth. Increasing utilization of shale gas in the energy and manufacturing industries and growing shale gas exploration activities due to technological advancements, such as horizontal and hydraulic drilling, are anticipated to boost the product demand in the oil & gas sector. Furthermore, the penetration of petrochemical products in modern energy systems, such as wind turbine blades, solar panels, batteries, and Electric Vehicle (EV) parts, is expected to drive the market growth.

Regional Insights

The pumps market in the Asia Pacific region is expected to witness significant growth over the forecast period upto 2030 on account of the rapid industrialization in the developing economies of Asia Pacific and rising investments in manufacturing, commercial, and industrial projects have contributed to the overall growth of the regional market. Furthermore, increased product penetration in various end-use industries including agriculture and petrochemical is anticipated to complement market growth.

China is anticipated to be driven by the growing investments in chemical, petrochemical, and construction industries. In addition, several chemical and petrochemical multinational companies are expected to open new manufacturing plants in China owing to the favourable government policies. As more companies look into capacity expansion in China, the demand for pumps in the country is expected to grow.

Rising offshore exploration and production activities in Europe are anticipated to fuel demand for pumps, over the projected period. Stringent regulations intended to reduce residential water pollution are anticipated to have a significant influence on raising the demand for water treatment in the municipal and industrial sectors. It is anticipated that rising household use of municipal facilities for water and wastewater treatment will have a significant impact on the market. This scenario is anticipated to increase the consumption of centrifugal, rotary, and reciprocating pumps in the region over the forecast period

The growing construction sector, along with the imposition of stringent government regulations in Germany to restrict the discharge of untreated water into water reservoirs, is expected to drive the growth of water & wastewater treatment plants, thereby benefiting the pumps market during the forecast period.

Indian industry

16% of Indias pump manufacturing potential is export-oriented and is projected to expand further.

Positive displacement pumps market comprises of 5% to the total pump market. These pumps are widely used water and wastewater, chemical, oil and gas, and power generation. With the increase in the refining capacity, the demand for positive displacement pumps is likely to increase. Moreover, the technological development, which has rendered deep-water and ultra-deep-water exploration feasible and cost-effective, and is expected to increase oil production over the forecast period. It can provide an opportunity for market growth during the forecast period. Oil and gas sector is expected to witness significant growth in terms of industrial pump deployment mainly due to declining production from existing oil and gas fields combined with increasing investments in the midstream and downstream oil and gas sectors.

Competitive pricing and manufacturing capabilities are major factors boosting growth in the pump market in India. Top end- user industries in the India pump market include water and waste manufacturing, electricity generation, oil and gas, metals, and mining.

The introduction of intelligent pump systems with smart track and control fluid flow or pressure, responds to process adjustments, and which have failure tolerance features will reduce the total cost of ownership, creating lucrative opportunities for manufacturers in the market. The increased focus on after-sales services will enable vendors to maintain a long-term relationship with the customers in the India pump market. Indian firms are constantly searching for strategic alliances to reach global markets through technological collaborations and to also provide high-quality products in the Indian market.

FINANCIAL STATEMENTS

The financial statements of your Company have been prepared in compliance with the requirement of the Companies Act, 2013 and the applicable new Indian Accounting Standards (Ind-AS) notified by the Ministry of Corporate Affairs. There is no material departure from the prescribed accounting standards in adoption of the accounting standards. The Management of Roto accepts responsibility for the integrity and objectivity of these financial statements, as well as for various estimates, provisions and judgments used therein, which have been made on prudent and rational basis in order to reflect a true and fair view of the affairs of your Company.

Resources allocation:

Non-current assets

Non-current assets of your Company at 31st March, 2023 have been Rs.12,032.61 lakhs against Rs.8,656.61 lakhs as at 31st March, 2022. Composition of non-current assets has been as under-

Indias pump market size was valued at USD 2.2 billion in 2020 and is expected to reach USD 3.3 billion in 2026, growing at a compound annual growth rate (CAGR) of 7% during 2020-2026.

Property, plant and equipment

Property, plant and equipment of your Company as at 31st March, 2023 have been Rs.4,938.18 lakhs as against Rs.3,247.38 lakhs on 31st March, 2022, representing a net increase of 52.06%. The net increase in property plant and equipment has been mainly due to addition in plant & machinery.

Capital work-in-progress

Capital work-in-progress of your Company as at 31st March, 2023 has been Rs.2,073.40 lakhs as against Rs.732.14 lakhs on 31st March, 2022. This comprises of factory building under construction.

Right-of-use assets

Right-of-use assets of your Company as at 31st March, 2023 has been Rs.2,851.88 lakhs as against Rs.2,922.24 lakhs on 31st March 2022. The net decrease is due to amortization during the year.

Other intangible assets

Other intangible assets of your Company comprises of computer software, technical drawings, trademarks and patent. Other intangible assets of the Company as at 31st March, 2023 have been Rs.170.72 lakhs against Rs.35.56 lakhs at 31st March, 2022. The net increase has been on account of capitalization of SAP software.

Investment in subsidiaries

Investment in subsidiaries of your Company as at 31st March 2023 has been Rs.1,850.17 lakhs against Rs.1560.17 as on 31st March, 2022. The increase in investment has been on account of investment of Rs.290 lakhs in Roto Energy Systems Limited, a wholly owned subsidiary in India.

Deferred tax assets (net)

Deferred tax assets (net) of your Company as on 31st March 2023 have been Rs.98.26 lakhs against Rs.109.12 lakhs as at 31st March, 2022. The net decrease has been mainly due to higher addition of plant & machinery resulting in higher depreciation under the Companies Act due to higher depreciation rates as compared to depreciation rate under Income Tax.

Current assets

Total current assets of your Company as at 31st March, 2023 have been Rs.15,033.28 lakhs against Rs. 12,520.88 lakhs as at 31st March 2022. Composition of current assets as on 31st March, 2023 compared to 31st March 2022 is as under:

Inventories

Inventories of your Company as at 31st March 2023 have been Rs.3,880.86 lakhs against Rs.3,152.83 lakhs as at 31st March, 2022 representing an increase of 23.09%. The increase in inventory has been mainly to support the increased sales.

Financial assets

Financial assets comprise of trade receivables, cash & cash equivalents, other bank balances, loans and other financial assets. Financial assets of your Company as at 31st March 2023 have been Rs.8,474.79 lakhs against Rs.7,369.51 lakhs as at 31st March, 2022 representing an increase of 15%. The net increase in financial assets has been mainly on account of increase in trade receivables, cash & cash equivalents, and loans. Increase in trade receivable has been mainly due higher sales and cash & cash equivalents increased on account of higher term deposits and remittance in transit, while increase in loans has been on account of loan to wholly-owned subsidiary companies.

Other current assets

Other current assets of your Company as at 31st March 2023 have been Rs.2,677.63 lakhs against Rs.1,998.54 lakhs as at 31st March, 2022. The net increase in other current assets has been mainly due to higher deposit balances with GST authorities.

Resources:

Equity

Total equity of your Company as at 31st March, 2023 has been Rs.16,572.38 lakhs as compared to Rs.14,014.12 lakhs as at 31st March, 2022 representing a net increase of 18.25 %. Composition of equity as on 31st March, 2023 as compared to at 31st March, 2022 is as under:

Share capital

Share capital of your Company as at 31st March, 2023 were Rs.314.08 lakhs as compared to Rs.314.08 as at 31st March, 2022. There has been no change in share capital during the year.

Other equity

Other equity of your Company comprises of securities premium, general reserve and retained earnings, which has been Rs.16,258.30 lakhs as at 31st March, 2023 against Rs.13,700.04 lakhs as at 31st March, 2022. The increase in other equity has been on account of profit for the year retained after distribution of dividend.

Non-current liabilities

Non-current liabilities of your Company as at 31st March, 2023 were Rs.1,461.42 lakhs as compared to Rs.1,605.26 lakhs as at 31st March, 2022. Composition of non-current liabilities as on 31st March, 2023 as compared to at 31st March, 2022 is as under:

Provisions

Provisions comprises those for employee benefits. As at 31st March, 2023 it stood at Rs.83.86 lakhs against Rs.4.90 lakhs as at 31st March, 2022.

Current Liabilities

Current liabilities as at 31st March, 2023 were Rs.9,032.09 lakhs as compared to Rs.5,558.11 lakhs as at 31st March, 2022. The composition of current liabilities as at 31st March, 2023 compared to as at 31st March, 2022 is as under:

Financial liabilities

Financial liabilities of your Company comprises of short-term borrowings, trade payables and other financial liabilities and stood at Rs.5,769.28 lakhs as at 31st March, 2023 against Rs.2,925.02 lakhs as at 31st March, 2022. The net increase has been mainly due to increase in utilisation of working capital limits from banks and trade payables which has been due to increase in operations.

Other current liabilities

Other current liabilities of your Company comprises of creditors for capital goods, advances from customers, taxes payable and dividend payable have been Rs.2,095.77 lakhs as at 31st March, 2023 against Rs.1,479.82 lakhs as at 31st March, 2022. The net increase has been mainly due to higher advances received from customers.

Provisions

Provisions comprise of short-term provisions for employee benefits, warranty and other provisions and stood at Rs.127.88 lakhs as at 31st March, 2023 against Rs.151.02 lakhs as at 31st March, 2022.

Current tax liabilities

Financial liabilities

Financial liabilities of your Company comprises of long-term borrowings and lease liabilities, as at 31st March, 2023, the financial liabilities have been Rs.13,77.56 lakhs against Rs.1,600.36 lakhs as at 31st March, 2022. The increase in borrowings has been due to vehicle loans availed during the year. The decrease in lease liabilities has been on account of payment of lease liabilities during the year. Provisions have been increased due to provision for unfunded balance of gratuity and leave liability during the year.

Current tax liabilities (net) of your Company comprises of provisions for income tax, which stood at Rs.1,039.16 lakhs as at 31st March, 2023 against Rs.1,002.25 lakhs as at 31st March, 2022.

The management believes that your Companys liquidity and capital resources would be adequate to meet its expected working capital needs and other anticipated cash requirements.

FINANCIAL AND OPERATIONAL PERFORMANCE

The principal source of the Companys revenue is from the sale of pumps, spares and retrofit parts. Your Company has a rich heritage of designing and manufacturing superior products

and technologies. Your Company offers a comprehensive range of Progressive Cavity Pumps (PCP), Twin Screws Pumps and also added other PD pumps in its product portfolio, such as AODD and gear pumps. These products cater to a large spectrum of industries covering various industrial and municipal applications. Aligned with its vision, your Company is transforming into a fluid equipment solution provider.

Sale of pumps during the year has been Rs.9,219.29 lakhs as compared to Rs.7,282.35 lakhs during the previous year, while sale of spares has been Rs.9,675.35 lakhs as compared to Rs.7,730.95 lakhs during the previous year. Service income has been Rs.29.55 lakhs against Rs.16.95 lakhs during the previous year. Other operating revenue mainly comprises of sale of scrap materials has been Rs.140.91 lakhs against Rs.129.67 lakhs during the previous year.

During the financial year 2022-23, your Companys financial and operational performance as compared to the previous financial year 2021-22 has been as under:

Your Companys total income during the year 2022-23 has been Rs.19,492.53 lakhs as compared to Rs.15,578.03 lakhs during the year 2021-22, which represents an increase of 25.13%. Revenue from operations during the year has been Rs.19,065.60 lakhs as compared to Rs.15,159.91 lakhs during the previous year, exhibiting an increase of 25.76% over the prior year. Increase in revenue from operations has been on account of efficient utilization of THE Companys marketing infrastructure in domestic and international markets. Other income during the year has been Rs.426.93 lakhs as compared to Rs.418.12 lakhs during the previous year.

Your Company recorded a profit after tax of Rs. 3,027.69 lakhs during 2022-23, against Rs.2,624.67 lakhs in 2021-22. Profit after tax has been higher mainly due to increased revenue and better cost control.

Revenue from operations

Your Companys income from operations comprises of domestic sales and exports sales. Revenue from operations during the year has been Rs.19,065.60 lakhs as compared to Rs.15,159.91 lakhs during the prior year. Revenue from operations product-wise viz. Pumps, Spares and Service Income is as under:

Composition of domestic and export sales during the financial year 2022-23 as compared to the previous financial year 2021-22 is as under:

? Export sales ? Domestic Sales Domestic sales

Domestic sales during the year have been recorded at Rs.6,502.52 lakhs against Rs.5,115.65 lakhs, which represents an increase of 27.11%. Composition of domestic sales during the year as compared to the previous year is as under:

Revenue from sale of pumps during the year was Rs.3,660.34 lakhs against Rs.2,670.70 lakhs during the prior year. Sale of spares during the year has been Rs.2,679.25 lakhs, against Rs.2,307.03 lakhs during the prior year. Service income during the year has been Rs.22.02 lakhs against Rs.8.25 lakhs during the previous year. Other operating revenue mainly comprises of income from sales of scrap and wastage has been Rs.140.91 lakhs as compared to Rs.129.67 lakhs during the prior year.

Export sales Export sales by product

Exports sales during the year stood at Rs.12,563.08 lakhs, against Rs.10,044.27 lakhs during the previous year, which represents an increase of 25.08%. Composition of export sales during the year as compared to the previous year is as under:

Revenue from sale of pumps during the year was Rs.5,559.45 lakhs against Rs.4,611.65 lakhs during the previous year. Sales of spares during the year have been Rs.6,996.10 lakhs, vs. Rs.5,423.92 lakhs during the previous year. Service income during the year has been Rs.7.53 lakhs against Rs.8.70 lakhs during the previous year.

Export sales by centers

Your Company executes exports sales from three centers:

• Direct export from India

• Sales from warehouse and marketing offices in Australia

• Sales from the United Kingdom branch

Export sales from these centers during the year is as under:

Direct export

Direct export sales during the year stood at Rs.5,883.81 lakhs, against Rs.4,489.55 lakhs in the prior year which represents an increase of 31.06%.

Sales from Australia Branch

Sales from Australia have been Rs.3,151.73 lakhs, as compared to Rs.2,720.35 lakhs during the previous year, which has been higher by 15.82%.

Sales from UK Branch

Sales from United Kingdom have been Rs. 3520.02 lakhs against Rs. 2834.37 lakhs during the previous year, which has been higher by 24.19%.

KEY FINANCIAL RATIOS

Key financial ratios for the financial year 2022-23 as compared to the previous financial year have been as under. Clarifications on the changes are also given.

Particulars

2022-23

2021-22

Change in %

Clarification in change in is more that 25%

Debtors turnover (days)

90

92

2.22

Slight improvement

Inventory turnover (days)

68

93

-25.81

Higher sales during the year

Interest coverage ratio (times)

22

48

-54.16

Increased utilization of working capital facilities

Current ratio (times)

1.66

2.25

26.22

Increase in utilization of working capital facilities

Debt equity ratio (times)

0.23

0.10

130

Increase in utilization of Working Capital Limit and Term Loans taken during the year.

Operation profit margin (%)

27.13

27.93

-23.86

Slightly lower due to marginally higher material consumption

Net profit Margin (%)

15.77

16.91

-6.74

Reduced marginally due to higher expenses

Net worth - Rs. in Cr

165.72

140.14

18.25

Increased on account of retained profit during the year

Return on net worth (%)

19.80

18.30

8.19

Due to marginally lower profit

HEALTH, SAFETY AND ENVIRONMENT

20%

Companys energy requirements met from renewable sources

Your Company continues to comply with Occupational Health & Safety Management System ISO 14001:2004 and endeavors to improve on the culture of safe working environment. The Company has installed base of solar power of 400 KWp and further scaling upto 900 KWp. 20% energy requirement is met form solar power. Similarly, good health has been the foremost priority of the Company. Indoor and outdoor health checkup camps have been organized from time to time as a preventive healthcare measure. There have been no material incidents during the year under review. Your companys Manufacturing facilities are zero discharge.

OPPORTUNITIES AND THREATS Opportunities

During the year under review, there have been major mergers and acquisitions, in pump industry globally. This coupled with China+1 strategy is having significant changes in Global supply chain. Your Company has taken advantage arising from such changes and has increased its focus on key sectors such as waste water treatment, oil & gas, biogas and general industries.

On domestic front, with Indian economy continuing to grow fastest amongst major Global economies, there are several opportunities across the Board for the Company to leverage its performance. Your Company is stretegically placed and enjoys preferable choice of brand in its line of products.

Your Companys imitative in the field of oil & gas viz. downhole pumps and mud motors would provide opportunities under Atam Nirbhar Bahrat and also in Global Markets. The other initiative under renewal energy i.e. solar pumping system would provide tremendous business opportunities due to Governments focus on usage of alternate energy sources to mitigate climate changes coupled with the escalating Energy prices due geopolitical issues would lead to increased focus on renewal energy thereby increasing opportunities for Companys solar pumping project.

Threats

On global front, geopolitical issues and high inflationary trends such as high fuel prices, food shortages, are leading to lower spending resulting in lower economic activities pose threats in terms of demand reduction etc.. On domestic front, economic scenario seems to be conducive, which is attracting entry of major global players into the market and increased activities from local players which would result in increased completion.

RISK AND CONCERNS

Present geo-political and economic issues are major concerns. On geo-political front, war between Russia and Ukraine has disrupted Global supply chain system and Chinese aggression in South China Sea and Taiwan in recent times adding fuel to already critical geo

political issues. These are adversely affecting the global economic growth. On the economic front, inflationary trends in Europe and US are a matter of concern, however in recent months inflation in US reflected easing trends.

Currency fluctuation are worsening the fiscal deficit of net importing Countries like India. This also affects inflation adversely.

Your Company operates in all the major Countries, any adverse geo-political and economic development would adversely affect operations and performance of the Company. Global disruptions, emerging trade patterns and evolving environmental & sustainability policies, etc. could influence business decisions and market footprint. The aim is to protect and enable business to generate value.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an adequate system of internal controls implemented by the management towards achieving higher efficiency in all areas of operations. These controls have been designed to provide a reasonable assurance with regard to maintenance of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations and for ensuring reliability of financial reporting.

Your Company has adopted SAP software to strengthen its controls and processes which has been implemented in India Operations. It is under implementation at Overseas Establishment within the current financial year. This would allow integration of multiple locations on one platform and would bring tremendous synergy and improve overall efficiency of the organization significantly.

The Audit Committee of the Board of Directors regularly reviews the adequacy of internal controls and takes necessary corrective actions wherever required.

RESEARCH & DEVELOPMENT

Research & Development Centre of your Company had been recognized by the Department of Scientific & Industrial Research, Ministry of Science & Technology, Government of India. During the year, your company has incurred an amount of Rs. 233.72 lakhs towards revenue expenses which constitutes 1.23% of the revenue from operations of the Company. Previous year, it was Rs. 245.16 lakhs and Rs. 13.15 lakhs towards revenue expenses and capital expenses, respectively, totaling to Rs. 245.16 lakhs, which constituted 1.70% of the revenue from operation of the Company.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

We believe that in order to sustain growth under competitive conditions, the Human Capital of the Company should have high level of motivation and knowledge. The Company continues to focus and invest in human resources development to provide an open work culture and rewarding career opportunities to all its employees. During the year, your Companys HR division successfully recruited 32 people (replacements as well as new

joining) in response to various business needs. Manpower strength as on 31.03.2023 was 417.

The overall employee relations were peaceful and harmonious throughout the year. The Company continued to create conducive work environment with opportunities for growth and learning, by implementing robust and comprehensive HR policies.

FUTURE OUTLOOK

Your Company would continue to focus on to increase its market share to achieve significant growth in topline which would also result in better bottom-line. Your Company has a strong manufacturing and marketing infrastructure with presence in five continents besides strong Research & Development setup, experienced and motivated Manpower. Your company has been focusing on MENA region and has made steady progress. Your Company has setup a wholly owned subsidiary. This would enhance your Companys capabilities to service the MENA region market more effectively.

Time ahead look challenging as Geo-political issues in Eurasia, higher inflation especially on U.K., European Countries US are certain threats to Global economy, however Domestic economy appears to be positive. Your Companys majority of revenue is generated from exports, exchange rates fluctuations are a matter of concern.

Your Companys project of Downhole pumps for artificial lift and Mud Motors for drilling of wells in Oil & Gas industry are schedule to become operations by end of the third quarter of the current financial year. Other project of Solar pumping systems undertaken in a wholly owned subsidiary would also become operational during the current financial year. These ventures would lead towards your Companys vision to be among the first five global Positive Displacement Pump manufacturer.

With highly diversified market, both in terms of geographical reach and the customer base alongwith the enhanced focus to increase the market share coupled induction of new products viz. Downhole pumps and mud motors for oil & gas industry, your Company would withstand in turbulent times and improve its performance in terms of topline and bottom-line as well.

CAUTIONARY STATEMENT

Statements in the Management Discussion Analysis describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities law and regulations. Actual results may differ from those expressed in the statement. Important factors that could influence the Companys operations include changes in Government regulations, tax laws, economic development within and outside the Country and such other factors.

For and on behalf of the Board of Directors

Place: Noida

Harish Chandra Gupta

Date: 11.08.2023

Chairman & Managing Director

DIN: 00334405