Shigan Quantum Technologies Ltd Management Discussions

INDUSTRY GROWTH PATH

In recent years, India has made substantial strides toward becoming a leading global automotive market, driven by rising incomes, growing demand for personal mobility, and supportive government policies. According to National Institution for Transforming India ( NITI Aayog). The automotive industry currently contributes around 7.1% to Indias GDP and accounts for 49% of manufacturing-GDP. As the third-largest automobile market in the world, India ranks as the fourth-largest car manufacturer and the seventh-largest commercial vehicle manufacturer globally.

According to Invest India (A Unit of Department for Promotion of Industry and Internal Trade), the Indian automotive sector, including both passenger and commercial vehicles, is projected to reach ?24 trillion (US$300 billion) by 2026. In addition, the auto components manufacturing sector is expected to grow significantly, according to IBEF (India Brand Equity Foundation-Initiative of the Department of Commerce, Government of India) echoes these figures and adds that the sector is expected to reach USD 30 billion exports by FY 26, while total industry value is projected to grow to USD 200 billion by FY 26 .

EV sales in India surged by approximately 49% in 2023 , reaching 1.52 million units , By FY2028, EV penetration in car sales is expected to exceed 7% , supported by infrastructure expansion and production-linked incentives (PLI). NITI Aayog aims for 30% EV share in overall vehicle sales by 2030 , aligning with industry-wide strategic targets.

According to the Society of Indian Automobile Manufacturers (SIAM), Indias automotive industry—including passenger vehicles, commercial vehicles, three-wheelers, two-wheelers, and quadricycles—produced a total of 31,034,174 units in FY 2024-25, compared to the previous year FY 2023-24. This reflects a substantial growth of approximately 9.3% year-on-year.

*Source SIAM The above chart depicts Indias passenger & commercial Market Trends *Source SIAM The above chart depicts Indias passenger & commercial Market Trends RISING LOCALIZATION AND ADOPTION OF CNG/LNG VEHICLES IN INDIA

The sale of natural gas vehicles (CNG and LNG) in India hit 787,724 units in FY 2025 , surpassing diesel car sales (736,508 units) for the first time. This reflects a 35% year-on-year growth in CNG vehicle sales compared to FY 2024. According to a report by CRISIL Intelligence , cumulative CNG vehicle sales in FY 2025 are expected to reach 1.1 million units , increasing the total fleet in India to around 7.5 million. This marks approximately a three-fold increase since FY 2016 (when fleet was 2.6 million), representing a CAGR of ~12% This surge reflects strong consumer demand for cleaner, cost-effective fuel options and increasing government support for natural gas mobility.

OEMs are playing a critical role in this growth through aggressive localization of CNG/LNG components—such as fuel systems, injectors, storage tanks, and ECUs—to reduce costs, improve availability, and support the Make in India initiative. Several automakers are expanding their CNG model portfolios, including in the SUV and MPV segments, to meet evolving market preferences.

In February 2024, NITI Aayog and the Embassy of the Netherlands jointly released a report titled LNG as a Transportation Fuel in Medium and Heavy Commercial Vehicles . The report addresses barriers to LNG adoption and provides a strategic roadmap for its integration—aligned with Indias broader targets like achieving 15% gas share in primary energy and the Net Zero by 2070 goal. This engagement aims to promote coordinated policy development in critical areas such as energy access, sustainability, and enhancement of energy infrastructure.

One key outcome of this partnership is the report titled LNG as a Transportation Fuel in the Medium & Heavy Commercial Vehicle Segment, which continues to strongly advocate for the adoption of LNG to reduce CO2 emissions and support Indias national goal of increasing the share of natural gas in the energy mix to approximately 15% by 2030 .

*The above chart depicts Indias current LNG Market and projected LNGs HDVs ACCELERATING INFRASTRUCTURE IN INDIA FOR CNG/LNG STATIONS

As of December 2024, the City Gas Distribution (CGD) infrastructure included 7,259 CNG stations nationwide, with total PNG (piped natural gas) connections and CNG outlets reaching approximately 1.36 crore connections. By mid-2024 , around 7,000 CNG stations were operational in India. The government has set an ambitious goal to increase the number of CNG filling stations to 18,336 by 2032 , with interim targets including 17,500 by 2030 .

Based on the current analysis, LNG and CNG are expected to coexist in the medium and heavy-duty transport sector

over the next decade. CNG is emerging as a strong alternative to diesel, particularly in urban and semi-urban areas, owing to its lower emissions, cost-effectiveness, and the widespread availability of CNG refuelling infrastructure through the expanding City Gas Distribution (CGD) networks .

HARNESSING HYDROGEN: A KEY DRIVER FOR INDIAS GREEN ENERGY GOALS

The Society of Indian Automobile Manufacturers (SIAM), the apex national body representing major vehicle and engine manufacturers in India, continues to view the hydrogen economy as a vital component for energy security and domestic technological advancement. Key SIAM members, such as Ashok Leyland, Tata Motors, and Mahindra & Mahindra, have accelerated their efforts in developing hydrogen fuel cell systems and vehicles.

These initiatives now include advanced hydrogen-powered internal combustion engines and a growing portfolio of fuel cell electric vehicles (FCEVs), with several pilot projects and limited commercial launches underway. There is also significant progress in the indigenization of fuel cell stacks and associated technologies, supported by government incentives and public-private partnerships aimed at building a robust hydrogen ecosystem in India.

SIAM actively collaborates with policymakers and research institutions to promote hydrogen infrastructure development, positioning India as a future hub for hydrogen mobility and clean energy solutions.

The Union Cabinet has sanctioned initial outlay of ^ 19,744 crore for the National Green Hydrogen Mission which includes, ^ 17,490 crore for the Strategic Interventions for Green Hydrogen Transition (SIGHT) program, ^ 1,466 crore designated for pilot projects, ^ 400 crore for research and development (R&D), ^ 388 crore for other mission components.

OUR COMPANY

At Shigan Quantum Technologies (SQT), we are at the forefront of Enabling Sustainable and Secure Mobility Solutions , fuelled by our commitment to value engineering and innovation.

Weve been pioneering alternate fuel solutions , leveraging over two decades of rich experience across automotive, locomotive, marine, power generation, farm, and off-highway sectors. Our core teams competence, honed over three decades, enables us to design and manufacture cutting-edge green fuel components with precision and reliability. Committed to sustainability, we focus on delivering competitive, innovative products and technologies. From green fuel components to electronic manufacturing and automotive fire protection systems, we drive towards an Atma- Nirbhar Bharat (self-reliant India), localizing global technologies through our state-of-the-art manufacturing unit.

Our passion for sustainable mobility fuels our innovation, leading the charge in hydrogen, in Internal Combustion Engine (ICE) powered vehicles. SQT stands as the first company in India to indigenize BS-IV & BS-VI + OBD-II CNG fuel systems and is looking forward to develop technologies which will meet EURO 7 emission targets.

Fire Detection and Suppression System (FDSS) , serving automotive OE customers with excellence and dedication Shigan is a pioneer in fire protection technology; we are committed to providing Automotive OEMs, Bodybuilders and Railways with cutting-edge solutions to safeguard lives and assets. Our Fire Protection Systems (FPS) and Fire Detection and Suppression Systems (FDSS) are designed to address the unique challenges faced by the automotive industry, ensuring unparalleled safety, mitigate financial loss and bring peace of mind.

Fire Protection System (FPS) Buses and coaches are the lifeline of public transportation, transporting passengers daily. However, the threat of fire incidents poses a significant risk to both lives and property. Our FPS is engineered to swiftly detect and mitigate, fire hazards through our water mist systems, minimizing the potential for injury to commuter and damage to assets.

At our company we are riding the EV wave in India, we specialize in manufacturing a comprehensive lineup of top- tier EV components, catering to high-potential EV Bus market emanating out of PM E- drive push.

Beyond mobility, SQT delivers a host of Electronic Design and Manufacturing Services (EMS) , across diverse applications. At Shigan, we provide world-class Electronics Manufacturing Services (EMS) tailored to meet several unique business needs. Our state-of-the-art manufacturing facility is equipped with Fuji SMT lines, 3D Automated Optical Inspection (AOI), X-ray testing, and an X-ray counter machine for precise component verification and defect detection. With a strong focus on end-to-end traceability, we guarantee complete visibility and control over the manufacturing process.

Harnessing Hydrogen for a Cleaner, Greener Future Shigan Quantum Technologies Limited is working to develop hydrogen fuel system components which includes Gas injectors, Filter and Engine control unit etc. These engineering development activities will also include the calibration, optimization and meeting the engine performance by achieving Zero CO2 emissions. These innovations aim to make hydrogen a practical, safe, and scalable energy source for mobility, power generation and industrial sectors.