Shining Tools Ltd Management Discussions

FORWARD-LOOKING STATEMENTS

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including raw material availability and pricing, cyclical demand patterns, regulatory changes, economic developments in India and abroad, and other operational risks and uncertainties.

GLOBAL ECONOMIC OVERVIEW

The global economy in FY 2025-26 displayed signs of gradual but uneven recovery. Persistent geopolitical tensions in Eastern Europe and the Middle East, along with disruptions in critical maritime trade routes, kept global inflationary pressures elevated despite a decline in energy prices during parts of the year.

Advanced economies witnessed moderated inflation but maintained “higher-for-longer” interest rate policies, resulting in cautious industrial expansion. Emerging markets, driven by infrastructure and manufacturing, continued to be the primary contributors to global growth.

International trade experienced intermittent disruptions because of freight rerouting, container shortages, and volatility in steel and alloy prices. However, sectors including green technologies, digital infrastructure, defence, automotive, and renewable energy continued to attract investments, offering optimism for sustained medium-term recovery.

INDIAN ECONOMIC OVERVIEW

India remained one of the fastest-growing major economies with an estimated GDP growth of 6.6% to 6.8% for FY 2025-26. Growth was supported by rising private consumption, strong credit expansion, and sustained capital expenditure in railways, defence, transportation, and renewable energy.

The Governments focus on “Make in India,” PLI schemes, logistics modernization, and manufacturing competitiveness significantly boosted the domestic industrial ecosystem. Despite periodic fluctuations in imported input costs and shipping charges driven by global tensions, India maintained stable macroeconomic fundamentals.

Indicators such as GST collections, manufacturing PMI, foreign direct investment inflows, and improved business sentiment further reinforced Indias growth trajectory.

INDUSTRY OVERVIEW

The Indian market is known for being one of the most price-competitive in the world when it comes to cutting tools. This market produces a broad spectrum of tools, including saw blades, taps, reamers, hobs, chasers, broaches, rolling dies, drills, end mills, cutters, burrs, gear cutting tools, tool bits, tips, or inserts, and many more. These tools are crucial for the removal of material from metallic work pieces, ensuring precision and efficiency in manufacturing processes.

The cutting tools market was valued at USD 77.24 billion in 2019 and is projected to reach USD 101.48 billion by 2027, growing at a CAGR of 4.2% during the forecast period. The increasing demand for metal cutting equipment from various industries, including aerospace, defense, automotive, and industrial machinery, is a significant driver of this growth.

Since, carbide cutting tools excel at precision machining, it is fast gaining prominence and is expected to continue to lead the pack of cutting and machining solutions, rising at a considerable rate during the forecast period, between 2024 and 2031, globally. The global carbide cutting tools market has risen steadily since 2023, and with the rising adoption of strategies by major players, the market is expected to rise over the projected horizon.

COMPANY OVERVIEW

Shining Tools Limited ("STL" or "the Company"), operating under the brand name TIXNA, is engaged in the design, manufacture and supply of high-performance solid carbide cutting tools, including end mills, drills and reamers, with a strong focus on customized tooling solutions. A significant portion of the Companys revenue is derived from customized tools developed for specific customer applications. The Company also provides regrinding, resharpening and coating services, thereby supporting customers in enhancing tool life, productivity and cost efficiency.

The Company operates an integrated, state-of-the-art manufacturing facility equipped with advanced design and quality-control systems. It serves a diversified customer base across Aerospace, Defence, Space, Medical, Automotive, Power & Energy, Mould & Die, Casting & Foundry and General Engineering industries. The Companys emphasis on quality, customized solutions, technical support and timely delivery enables it to maintain long-term relationships with its customers and strengthen its position in the Indian cutting-tool market.

Key competitive strengths include:

• Strong manufacturing capabilities for solid carbide cutting tools and precision tooling solutions

• Diverse product portfolio comprising end mills, drills, reamers, thread mills, ball nose tools and customised cutting tools

• Capability to develop customised tools based on specific customer requirements and machining applications

• Reconditioning, regrinding and re-sharpening services, enabling customers to extend tool life and optimise tooling costs

BUSINESS REVIEW AND OPERATIONAL PERFORMANCE

During FY 2025-26, the Company continued to strengthen operational capabilities, enhance manufacturing efficiency, and expand market outreach. Key operational achievements included:

• Enhancement of CNC-based manufacturing capabilities to improve precision, productivity and production throughput

• Expansion of customised tooling capabilities to cater to application-specific requirements across various engineering and manufacturing industries

• Improvement in production planning and inventory management to support higher levels of capacity utilisation and timely delivery

• Strengthening of quality-control and inspection processes to ensure consistency, dimensional accuracy and performance of precision cutting tools

• Expansion of reconditioning and re-sharpening services to provide customers with cost-effective solutions for extending tool life

• Continued investment in plant and machinery to increase manufacturing capacity and support the Companys growth plans

SWOT ANALYSIS Strengths

1. Diverse product portfolio catering to various industry needs.

2. Established and reliable networking channels.

3. Quick Response due to strategic location.

4. Customised tooling solutions and reconditioning services

5. Repertoire of Design and technical specification of the tools.

6. Experienced Team of Designing.

7. No client concentration.

Weaknesses

1. Existing capacity utilization at 90% plus.

2. Requirement of high working capital.

3. Absence of Global Presence.

Opportunities

1. Technological Advancements by way of Adoption of Computer Numerical Control manufacturing method.

2. Scalability: Government of Indias thrust on programs like “Make In India”, “PLI (Production Linked Incentive), etc and globally a “China Plus One Strategy” can result in increase in manufacturing activity.

3. Inorganic growth by way of collaboration or tie-ups for new technology, new geography, etcAddition of high-end and complex customised tools.

4. Enter into new geographies.

Threats

1. Unorganized market selling finished Chinese products at less price.

2. Economic Fluctuations- Slowdowns in construction industry could reduce demand for tools.

3. Rising Raw Material Costs due to Price volatility.

4. Government Policy on Import of carbide.

OPERATIONAL AND FINANCIAL PERFORMANCE

The Company has performed commendably during the year 2025-2026. The Companys total Revenue was Rs 187,040,635 that represents an increase of 26.64% over Rs. 147,689,766 in the previous year. The total comprehensive income after tax is Rs. 38,903,104 in the current year represents an increase of 116.69 % against Rs. 17,953,570 in the previous year. This growth was supported by robust demand, cost optimization, and consistent execution by teams across functions. The Companys continued focus on innovation and value engineering has helped sustain the competitiveness.

Sr.	Particulars	FY 2025-26	FY 2024-25	% Change	Reason For Variations
1	Current Ratio ( in times)	2.62	1.66	57.28%	The increase in the current ratio during the year was largely due to the receipt of proceeds from the new equity share issuance.
2	Return on Equity Ratio (%)	22.99%	28.75%	-20.06%	Not Applicable
3	Inventory Turnover Ratio (in times)	1.90	1.79	5.86%	Not Applicable
4	Trade Receivables Turnover Ratio ( in times)	3.09	3.94	-21.55%	Not Applicable
5	Trade Payables Turnover Ratio (in times)	7.19	4.12	74.50%	The increase in the Trade Payables Turnover Ratio during the year is attributable to the issue of equity shares, part of the proceeds of which were deployed toward working capital requirements, enabling faster vendor settlements.
6	Net Capital Turnover Ratios (in times)	2.00	7.91	-74.77%	The Net Capital Turnover Ratio decreased during the year, primarily due to an
					increased Net Working Capital base following the receipt of IPO proceeds, resulting in a lower ratio.
7	Net Profit Ratio ( %)	21.26%	12.19%	74.45%	The increase in the Net Profit Ratio during the year is primarily attributable to the issue of shares, which expanded liquid funds, and improved overall net profitability.
8	Return on Capital employed(%)	16.85%	23.92%	-29.57%	Return on Capital Employed increased following the issue of equity shares, which boosted operating profits and optimized capital deployment during the_year.
9	Return on Investments (%)	0.00%	0.00%	NA	NA

RESEARCH AND DEVELOPMENT

Shining Tools Limited continues to focus on research and development to enhance product quality, performance, durability, and manufacturing efficiency. The Companys R&D initiatives are aimed at developing and improving precision cutting tools and related products to meet the evolving requirements of customers across various industrial applications.

Key focus areas include:

• Development and improvement of high-performance cutting tools with enhanced precision and durability

• Optimisation of material grades, tool geometry, coatings, and heat treatment processes

• Continuous product refinement based on customer requirements and market feedback

The Company believes that continued investment in technology, product development, and process innovation will strengthen its competitive position.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Shining Tools Limited has established an internal control framework commensurate with the size, nature, and complexity of its operations. The Company continues to strengthen its internal processes to safeguard its assets, ensure accuracy and reliability of financial and operational information, and promote compliance with applicable laws and regulations.

Key features include:

• Clearly defined standard operating procedures and approval mechanisms

• Appropriate segregation of duties across key functions

• Defined authority levels and financial controls

• ERP and system-based controls for operational and financial processes

• Periodic review of operational, financial, and statutory compliance matters

ENVIRONMENT, HEALTH & SAFETY (EHS)

Shining Tools Limited recognises that responsible manufacturing requires due consideration to environmental sustainability, occupational health, and workplace safety. The Company remains committed to maintaining a safe and healthy working environment while complying with applicable environmental and regulatory requirements.

Key EHS initiatives included:

• Promoting the use of appropriate personal protective equipment (PPE) and safe working practices

• Regular safety awareness programmes and training for employees

• Preventive maintenance of machinery and safety-related equipment

• Measures aimed at improving energy efficiency across manufacturing operations

• Effective management and reduction of manufacturing waste

HUMAN RESOURCES

Human resources continue to be an important contributor to the Companys operational efficiency and long- term growth. Shining Tools Limited recognises that a skilled, motivated, and safety-conscious workforce is essential for maintaining product quality, manufacturing efficiency, and customer satisfaction.

Key HR initiatives during FY 2025-26 included:

• Technical and skill development programmes for employees, particularly those engaged in manufacturing and quality functions

• On-the-job training and knowledge-sharing initiatives

STATUTORY COMPLIANCE

The Company has complied with all applicable provisions of the Companies Act, labour laws, environmental regulations, and other statutory requirements. Periodic reviews ensure timely adherence to evolving regulatory frameworks.

CONCLUSION

FY 2025-26 was a year of strong financial and operational performance for Shining Tools Limited. The Company recorded significant growth in both revenue and profitability, reflecting continued demand for its products, improved operational efficiency, and focused execution of its business strategy.

Revenue increased from ^14.77 crore in FY 2024-25 to ^18.70 crore in FY 2025-26, representing a growth of approximately 26.64%. Profit increased from ^1.80 crore to ^3.89 crore during the same period, representing a substantial increase of approximately 116.69%.

The Company continued to focus on improving manufacturing efficiency, product quality, process optimisation, customer responsiveness, and strengthening its product portfolio. Its emphasis on precision, reliability, innovation, and customer satisfaction remains central to its strategy for sustainable growth.

Going forward, Shining Tools Limited intends to leverage opportunities arising from increasing industrialisation, growth in manufacturing activity, technological advancement, and the continued emphasis on domestic manufacturing and localisation. The Company will continue to focus on strengthening its manufacturing capabilities, enhancing product quality, developing new and improved products, expanding its market presence, and improving operational efficiencies.

The management remains cautiously optimistic about the Companys prospects and is committed to sustainable growth, prudent financial management, operational excellence, and long-term value creation for all stakeholders.

DATE: 08/09/2026
PLACE: RAJKOT
FOR SHINING TOOLS LIMITED
Sd/-	Sd/-
KAMALBHAI LALJIBHAI GHONIA	VIPULBHAI LALJIBHAI GHONIA
WHOLE-TIME DIRECTOR	MANAGING DIRECTOR AND CHAIRMAN
DIN:06511096	DIN: 06511100