Samrat Forgings Ltd Management Discussions

Your directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2025.

INDUSTRY STRUCTURE AND DEVELOPMENT

India, the worlds fourth-largest economy, has emerged as the fastest-growing major economy and is on track to become the worlds third-largest economy. World has started to look upon India as a major strategic business alliance which is now resulting in robust business opportunities for Indian Companies. Ongoing conflicts between Russia & Ukraine, Israel & Iran and USA tariff threats to China etc. has majorly tilted the scale in favor of India for the World. Government initiatives such as Make in India, production-linked incentive schemes are expected to boost manufacturing and accelerate economic growth.

The domestic Industry posted a solid growth in FY 2024-25 and company has achieved its highest ever Sales and profit revenue.

OPPORTUNITIES AND THREATS

Stable government at the center, its Industry positive policies specially for farming community and its Make in India thrust offer great opportunity for business growth. Indian industry has made its mark in international market as dependable, quality conscious and cost-effective supplier. With isolation of China & Russia, India has emerged to be a force to reckon with thus offering growth opportunity.

With the installation of 66KV grid station, sustainability initiatives and further capacity enhancement steps this year, the Company has started to value add more by saving energy cost. The company has increased its presence in export market by achieving all time high export revenue in FY 202425.

The Company continues to explore new business opportunities in niche segments with special focus on exports. Necessary initiatives and steps towards value engineering, cost reductions, products up gradation continue to be the main focus for the Company this year too. The reduction and stability in prices of steel is also an added advantage.

Flowever, inadequate availability of manpower remains the major concern for the company.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

The Company operates in single segment i.e. manufacturing of closed die steel forgings and machined components and all its operational performance reported in the financial statements and other reports forming part of the Annual Report are from this single segment only. The Company manufactures and supply wide range of components to its customers in automotive and nonautomotive industries; thus, the evaluation of product wide performance is much complicated and not feasible to be reported and the performance of the company can be recognized as a whole as there is no separate segment for reporting.

OUTLOOK

World order has changed greatly with Russian-Ukraine continuing war, Israel-lran conflict, USA tariff threat to China with scale tilting majorly in favor of India as a strategic business partner for the world. The Indian industry is expected to make the best use of this opportunity and sustain its growth momentum in the current FY 2025-26 also.

Despite the challenges such as manpower, rising input costs etc. Tractor industry where of your company has major supplies and new businesses coming from non-tractor segments, overseas customers like Railways and construction equipment manufacturers and focus on exports, it is expected that the Company would be able to make its business grow in coming years.

The company is also in process of adding major OEM customer after its successful installation of 6000 ton forging press. This will be a major growth step towards high revenue in the coming years. Company is also planning further expansion in forging and machining capacity in anticipation of high- volume business growth from its new customers.

RISKS AND CONCERNS

Commodity risks, characterized by fluctuations in demand and supply, and price movements pose significant risk in manufacturing industries. In the Forging industry, Alloy steel, being the primary raw material for manufacturing is susceptible to risks arising from fluctuations in global steel price movement. The impact of such risks creates challenges in maintaining competitive advantage in price and strained working capital requirements of the company.

Further, risk due to war between countries like Russia and Ukraine, Israel and Iran pose logistical issues with rising freight costs thus impacting cost competiveness.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

All departments of the Company are adequately staffed with professionally qualified and experienced personnel. There are established internal control systems and procedures in place commensurate to the size and nature of business of the Company, which ensure efficient use and protection of business resources and compliance with the policies, procedures and statutes. The financial information is compiled periodically and reviewed by the management time to time. The reporting and monitoring system is elaborate and the same is reviewed by the management on regular basis. The internal control is supplemented by programs of internal audits, review by the management and documented policies, guidelines and procedures. The focus of these reviews is to identify the weaknesses and the areas of improvement, compliance with defined policies and processes, safeguarding the tangible and intangible assets and compliance with applicable statutes.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Continuing with positive momentum of previous financial year, the company started FY 2024-25 with robust sales. Continuing its upward trend Company achieved its highest ever sales figures in FY 2024-25.

In the above backdrop, the Company achieved highest ever turnover of Rs. 191 Crores during the financial year ended 31st March, 2025 against turnover of Rs. 162 during previous financial year 31st March, 2024. With continued focus on cost front, the Company has earned profit before tax of 6.97 crore against the previous years profit before tax of 4.29 crore; profit after tax (before other comprehensive income) of Rs. 5.10 crore (previous year: Rs. 2.97 crore) translated into Earning Per Share of Rs. 10.20 (previous year: Rs. 5.95). Total comprehensive income (net of tax) for the year stood at Rs. 5.26 crore as against Rs. 3.08 crore of previous year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company believes that its human assets are the most valuable assets, which convert planning into execution and generate results. Hence, the Company always endeavor and attentive on having qualified and talented employees in all divisions. The management always keeps its focus to evaluate the performance of all employees and necessary steps are taken to strengthen the areas that need improvements. More experienced technical manpower is being taken at the senior level to streamline the whole business process and adequate facilities and opportunities are also being provided to the technical and professional staff to update themselves with the latest technologies and different other activities. The company continued to maintain good relationship with workers and staff during the last year.

As on March 31, 2025 the company had 818 permanent workers & employees.

KEY FINANCIAL RATIOS

Particulars	Financial Year 2024-25	Financial Year 2023-24	Change as compared to previous Financial Year	Reason for changes of 25% or more
Debtors T urnover Ratio	8.47	7.29	16.28%	NA
Inventory Turnover Ratio	2.91	2.86	1.89%	NA
Interest Coverage Ratio	1.99	1.71	16.37%	NA
Current Ratio	1.12	1.18	-4.88%	NA
Debt Equity Ratio	2.35	2.41	-2.50%	NA
Operating Profit Margin%	11.57	9.79	18.18%	NA
Net Profit Margin%	2.67	1.84	45.38	Due to increase in profit after tax

RETURN ON NET WORTH

Return on net worth for FY 2024-25 (13.84%) has increased in comparison of previous FY 202324 (9.42%) by 46.96% due to increase in profit after tax.

CAUTIONARY STATEMENT

This report may contain statements particularly which relate to Management Discussion and Analysis describing Companys objectives, projections, estimates and expectations etc., which the Company believes are or may be considered to be “forward looking statements” within the meaning of applicable laws and regulations. The actual results might differ materially from those expressed or implied. The Company assumes no responsibility in respect of forward looking statements which may be amended or modified in the future on the basis of subsequent developments, information or events.

	For and on behalf of the Board
Regd. Office:
Village & P.O. Ghollu Majra, Tehsil Derabassi,
Distt. Mohali, Punjab - 140506
Email: info@samratforgings.com
CIN: L28910PB1981PLC056444	Rakesh M Kumar	Ritu Joshi
Date: 30.07.2025	Managing Director	Director
Place: Derabassi	DIN:00066497)	(DIN: 01598873)