Sealmatic India Ltd Management Discussions

Introduction

Mechanical seals and systems are critical components that prevent the leakage of liquids and gases in rotating equipment by sealing the interface between the rotating shaft and stationary housing. Over the years, mechanical sealing technology has evolved significantly, encompassing balanced and unbalanced seals, pusher and non-pusher seals, cartridge seals, metal bellows seals, split seals, gas lubricated seals and numerous application-specific sealing solutions.

The Company has established itself as a trusted and innovative player in the mechanical seals industry, consistently addressing the evolving needs of customers across diverse industrial sectors. Through its customer-centric philosophy, continuous innovation and strong manufacturing capabilities, the Company has built a reputation for delivering reliable and high-performance sealing solutions.

The Company designs and manufactures mechanical seals and associated products catering to industries such as oil & gas, refinery, petrochemical, chemical, pharmaceutical, power generation, marine, pulp & paper, mining, water and wastewater, among others process industries. With an extensive portfolio of engineered sealing solutions and a presence in over 63+ countries, the Company is recognized globally for its commitment to quality, operational excellence and technological advancement. Its broad range of products includes API 682 mechanical seals, engineered seals, cartridge seals, split seals, metal bellows seals, gas lubricated seals and numerous custom-designed sealing systems tailored to demanding operating conditions.

(a) INDUSTRY STRUCTURE AND DEVELOPMENT General

The global economy during FY 2025-26 continued to witness mixed growth trends amid inflationary pressures, changing monetary policies and ongoing geopolitical uncertainties. Nevertheless, industrial activity remained resilient across major economies, supported by investments in infrastructure, energy transition, manufacturing expansion and strategic supply chain diversification.

India continues to be one of the fastest-growing major economies, driven by robust domestic demand, increasing capital expenditure, government-led infrastructure initiatives and favourable industrial policies. Continued investments in sectors such as oil & gas, power, chemicals, water infrastructure, steel and manufacturing are expected to create significant opportunities for engineering and industrial equipment manufacturers.

The Government emphasis on "Make in India", Production Linked Incentive (PLI) schemes and investments in transportation, energy and urban infrastructure are expected to strengthen the manufacturing ecosystem and stimulate long-term industrial growth.

Mechanical seal industry

The mechanical seals industry continues to demonstrate steady growth, supported by increasing investments in process industries, expanding manufacturing capacities and rising demand for reliable and energy-efficient rotating equipment.

Mechanical seals play a vital role in enhancing equipment reliability, reducing fugitive emissions and minimizing maintenance costs. Increasing emphasis on environmental compliance, process safety and operational efficiency is accelerating the replacement of conventional packing systems with advanced mechanical sealing solutions.

The global mechanical seals market is expected to maintain a healthy growth trajectory over the coming years, driven by strong demand from oil & gas, petrochemical, chemical, power generation, mining, water treatment and pharmaceutical sectors. According to various industry surveys, the global mechanical seals market is projected to grow by approximately USD 1.5 billion with a CAGR of 5.35 % by 2027, whereas the global mechanical seals market stands at USD 4.5 billion as of date, hence; supported by aftermarket demand, technological innovations and growing industrialization in emerging economies.

India, in particular, is emerging as a strategic manufacturing hub and one of the most promising markets for mechanical seals. Investments in refineries, petrochemical complexes, green hydrogen projects, fertilizers, desalination plants and water infrastructure are expected to fuel sustained demand for sealing technologies. Furthermore, modernization and expansion of existing industrial facilities are expected to create substantial opportunities for both OEM and aftermarket businesses.

Technological advancements such as metal bellow seals, gas lubricated seals, intelligent sealing systems, advanced face materials and environmentally friendly sealing technologies are reshaping the industry and enabling manufacturers to deliver higher reliability, improved safety and longer equipment life cycles.

(b) Opportunities & Threats

The outlook for the mechanical seals industry remains positive, supported by increasing industrial investments, expansion of manufacturing facilities and growing awareness regarding equipment reliability and environmental compliance.

The aftermarket segment continues to be a major growth driver, as mechanical seals are essential wear components requiring periodic replacement throughout the operating life of pumps, compressors, mixers, agitators and host of other rotary application. As industries focus on minimizing downtime and improving asset performance, demand for high-quality mechanical seals and engineered sealing solutions is expected to increase.

However, the industry also faces certain challenges. Volatility in raw material prices, including stainless steel, special alloys, silicon carbide and tungsten carbide, may impact manufacturing costs and profitability. The global supply chain disruptions and fluctuating freight costs remain factors that require careful management. Further, the geopolitical environment remains uncertain. The conflicts in parts of West Asia and Russo- Ukraine, disruptions in shipping routes, rising energy prices and changing trade policies have created volatility across global markets. These have affected commodity prices, logistics costs and project execution timelines in certain regions. Nevertheless, the diversified industrial base and broad geographical presence of the Company provide resilience against regional economic and geopolitical disruptions.

The Company continues to strengthen its operational capabilities, diversify markets, optimize procurement strategies and invest in technology and capacity expansion to effectively address these challenges and capitalize on emerging opportunities.

(c) Segment-wise or product-wise performance

During the financial year under review, the Company continued to strengthen its position in the mechanical seals industry by offering a comprehensive range of mechanical sealing solutions across multiple industrial sectors and geographies.

The Companys product portfolio comprises API 682 mechanical seals and supply systems, cartridge seals, split seals, metal bellows seals, gas lubricated seals, slurry seals and engineered sealing systems. The Company serves customers across oil & gas, refinery, petrochemical, chemical, pharmaceutical, power,

fertiliser, marine, mining, pulp & paper, water and other process industries.

The Company maintained a balanced mix of domestic and export business, supported by its expanding international presence and strong customer relationships. Its focus on innovation, quality and customer service continues to be a key differentiator in an increasingly competitive marketplace.

(d) Outlook

The long-term outlook for the mechanical seals industry remains encouraging. Global industrial growth, increasing investments in energy, infrastructure and manufacturing, along with rising environmental regulations, are expected to drive sustained demand for advanced mechanical sealing solutions. The global transition towards cleaner energy, green hydrogen, carbon capture footprint, water treatment and sustainable manufacturing is expected to create new opportunities for specialized sealing technologies.

Indias strong economic fundamentals, expanding industrial base and continued focus on infrastructure development position the country as an important growth engine for the mechanical seals industry. Significant investments in refineries, petrochemicals, fertilizers, renewable energy and process industries are expected to support long-term market expansion.

While geopolitical tensions, may continue to create short-term uncertainties in global trade and supply chains, the overall industry outlook remains positive. Companies with strong technological capabilities, diversified markets and agile supply chains are expected to be better positioned to capitalize on future growth opportunities.

The Company remains optimistic about its growth prospects and will continue to focus on innovation, customer satisfaction, operational excellence and expansion into strategic global markets.

(e) Risks & Concerns

The Companys business is exposed to various risks, including fluctuations in raw material prices, foreign exchange volatility, increasing competition, supply chain disruptions and changing geopolitical and regulatory environments.

Global inflationary trends, interest rate movements and geopolitical tensions, particularly in West Asia and Eastern Europe, may impact commodity prices, logistics costs and investment sentiment across certain sectors. Any prolonged slowdown in industrial investments or delays in capital expenditure projects may affect demand in specific market segments, and may hurt the demand for mechanical seals.

The Company continuously monitors these risks and has implemented robust risk management practices and strengthening customer relationships. These initiatives enable the Company to enhance resilience and maintain sustainable growth in a dynamic business environment.

(f) Internal Control Systems and their adequacy

Internal Control Systems are in place:

To safeguard the Companys assets from loss or damage.

To keep constant check on cost structure.

To provide adequate financial and accounting controls and implement accounting standards.

The system is improved and modified continuously to meet with changes in business condition,statutory and accounting requirements.

( g ) Financial Performance with respect to operational performance

The following statements cover the financial performance review.

a) Distribution of income

(Rs. In Lakhs)

Sr No. Particulars	Year ended 31 st March 2026		Year ended 31 st March 2025
	Rs.	%	Rs.	%
Cost of Raw materials 1 consumed	4354.28	41.11	3,934.61	38.31
Employee Benefit 2 Expenses	1,945.92	18.37	1,701.73	16.57
3 Other Expenses	2,457.29	23.20	2,151.30	20.94
4 Finance Cost	48.58	0.46	38.55	0.38
5 Depreciation	381.57	3.60	318.58	3.10
6 Tax
Current	385.69	3.64	503.09	4.9
Deferred	(9.63)	(0.09)	32.2	0.31
7 Retained earnings	10,32.06	9.74	1,591.22	15.49
Total	10,595.76	100	10,271.27	100

(b) Financial position at a glance

(Rs. In Lakhs)

	Year ended 31 st March 2026	Year ended 31 st March 2025
ASSETS OWNED
Non- Current Assets
Property, Plant and Equipment 1 (including Capital Work in Progress)	2,987.87	2,865.36
2 Intangible Assets	32.56	61.35
3 Investments	150.50	0.00
4 Other non-current assets (net)	330.61	413.49
Current assets (Net) (excluding borrowings)	7,936.34	7,327.49
TOTAL	11,437.88	10,667.69
FINANCED BY
1 Borrowings	237.58	399.89
2 Net worth *	11,200.30	10,267.79
TOTAL	11,437.88	10,667.69
* Represented by
Equity Share Capital	1086.00	905.00
Reserves & Surplus	10114.30	9,362.79
TOTAL	11,200.30	10,267.79

Income earned
1 Revenue from operations	10,306.78	10,096.96
2 Other Income	288.99	174.31
TOTAL	10,595.77	10,271.27
Materials consumed	4,354.28	3,934.60
Employee Benefit Expenses	1,945.92	1,701.73
Other Expenses	2,457.29	2,151.30
Finance Cost	48.58	38.55
Depreciation & amortization expenses	381.57	318.58
Taxation	376.06	535.29
TOTAL	9,563.71	8,680.05
Retained Income	1,032.06	1,591.22

(c) Financial Summary

(Rs. In Lakhs)

	31.03.2026	31.03.2025	31.03.2024	31.03.2023	31.03.2022
Liabilities
Equity Share Capital	1,086.00	905.00	905.00	905.00	20.00
Reserves & surpluses	10,114.30	9,362.79	7,871.12	6,958.18	2,988.70
Non - Current Liabilities	237.58	399.89	265.68	343.98	61.63
Current Liabilities	2,816.98	2,083.22	2,003.11	1,513.24	866.49
TOTAL	14,254.86	12,750.9	11,044.91	9,747.40	3,936.82
Assets
Non Current - Assets	3,020.43	2,926.71	2,417.04	1,526.54	870.36
Non - Current Investments	481.11	413.49	540.36	86.72	49.62
Current Assets	10,753.32	9,410.70	8,087.51	8,134.14	3,016.84
Total	14,254.86	12,750.90	11,044.91	9,747.40	3,936.82
Total Revenue	10,595.77	10,271.27	7,324.99	5,961.47	4,263.38
Profit before Depreciation and Finance Cost	1,838.28	2,483.63	1,594.45	1,624.81	1,218.25
Finance Cost	48.58	3 8 .55	33.33	23.69	9.14
Depreciation	381.57	3 1 8 .58	207.38	120.83	85.43
Profit before Tax	1,408.12	2,126.51	1,353.74	1,480.29	1,123.68
Tax	376.06	535.29	368.25	382.18	288.30
Profit after Tax	1,032.06	1,591.22	985.49	1,098.11	835.38
Retained earnings	1,032.06	1,591.22	985.49	1,098.11	835.38

Selected Indicators

Earnings per share (Note 1)	9.50	17.58	10.89	14.93	11.60	322.59
Debt Equity Ratio	0.08	0.05	0.04	0.06	0.03	0.11
Book Value per	103.13	113.46	96.97	87.18	1,504.35	1,086.67
share (Note 1)
Fixed Assets	3.56	3.78	2.23	3.83	4.87	4.96
Turnover
EBIDTA	1838.28	2483.63	1594.45	1,624.81	1218.25	1033.66

Note 1: The Paid-up capital was increased during the year FY 2022-23.

Hence there is a variation in values as on 31.03.2022 compared to the earlier years.

( h ) Material developments in HR/IR including number of employees

Year 2025-26 has proven to be a year of resilience seffing multiple records, pivotal moments and achievements. By keeping the SILs core sustainability principles like Environmental protection, Social commitments and Governance Culture (ESG) at center of operations we have attained new heights in business. We have adapted appropriate employee engagement and Health and Safety measures. We have also implemented measures like restructuring of departments, investment in expansion of plants & infrastructure, employee friendly policies, Diversity & Inclusion, Employee Engagement activities, Communication Meetings with all employees, state of art offices and enhanced Health & Safety. By refocusing our business around core strengths we have become significantly more profitable, better balanced and more cost-efficient. With the execution of our HR strategy, we have been able to support our employees through the challenging conditions and embarked the high quadrant in the employee engagement survey. This execution of strategy includes continued efforts to raise awareness and facilitating open dialogues through several initiatives. We steered our efforts on Skill and Knowledge enhancement, Process Improvisation, Retention of Employees, Leadership Development, Performance Management and Employee Engagement.

We could maintain the attrition rate below industry standards due to pleasant work environment, prioritization of growth of employees, offering competitive compensation and benefits, Development of Infrastructure, Communication Mechanisms, Succession Planning and Reward and Recognition. Healthy and co- operative employee relations at all plants ensured support to the business growth As a result of these collaborative and collective efforts, we are well-equipped to deliver sustainable growth and have established us as a strong brand in the market.

The Company had 335 employees ( 321 Male and 14 Female) on its roll as on 31 st March, 2026.

( I ) Key Financial Ratios

Ratios	Year ended 31 st March 2026	Year ended 31 st March 2025
1. Debtors Turnover (days)	87.38	74.92
2. Inventory Turnover (days)	196.10	163.75
3. Interest Coverage Ratio (%) Note 1	29.99	41.62
4. Current Ratio	3.82	4.04
5. Debt Equity Ratio	0.08	0.05
6. Operating Profit to Sales (%)	13.66	19.06
7. Net Profit to Sales (%)	10.01	13.88

Note:

1. During the year under review, the payment towards interest was Rs. 48.58 lakhs as against Rs38.55 lakhs during the year 2025-26 , (increase by about 26.01%). Whereas the profit before tax Decreased by Rs. 718.39 from Rs. 2126.51 lakhs as on 31 st March, 2025 to Rs.1408.12 lakhs as on 31 st March, 2026. (Decrease 33.78%).

2. The levels of Inventory, Receivables increased due to bunching of the orders during the months of February and March, 2026.

( j ) Changes in Return on Net Worth

The Return on Net worth as on 31 st March, 2026 was 13.12 % whereas the same was 20.16% as on 31 st March, 2025. The Decrease to the tune of 7.04 % in the Return on Net worth.

Disclosure of Accounting Treatment

The financial statements are prepared as per the Accounting Standards applicable to the Company.

Disclosures with respect to demat suspense account/unclaimed suspense account

No shares are in the demat suspense account or unclaimed suspense account as on 31.03.2026

CAUTION

This document contains statements about expected future events and financials of the SIL, which are forwardlooking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements may not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to in the Management Discussion and Analysis Section of this Annual Report.

On behalf of the Board of Directors
Sd/-	Sd/-
Umar A K Balwa	Hanif S. Chaudhari
Managing Director	Whole Time Director
DIN :- 00142258	DIN :- 02817594
Date :- 22.05.2026
Place: Mumbai