Shri Ram Switchgears Ltd Management Discussions

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT FINANCIAL YEAR 2025-26 A GLANCE

MACRO-ECONOMIC SCENARIO

Global and Indian economy

Economic Overview

During FY 2025-26, the global economy witnessed moderate growth amid continuing geopolitical uncertainties, evolving trade dynamics, inflationary pressures in certain regions and changing monetary policy environments. Although global economic activity remained uneven across countries, resilient domestic demand and improving supply chains supported economic stability in several emerging markets.

India continued to be one of the fastest-growing major economies, supported by strong domestic consumption, sustained public capital expenditure, increasing private investments and a stable financial sector. Growth was further aided by robust GST collections, expanding digital payments, healthy credit growth and improving manufacturing and services activity.

The Government of Indias continued emphasis on infrastructure development, manufacturing, renewable energy, logistics modernization and digital transformation is expected to enhance the countrys long-term growth potential. Various policy initiatives aimed at improving ease of doing business and strengthening industrial competitiveness continue to create a favourable business environment.

Inflation remained broadly under control during the year owing to prudent monetary policy and moderation in commodity prices. Indias strong macro-economic fundamentals, healthy banking sector and improving corporate balance sheets continue to support medium and long-term economic growth.

Going forward, despite global uncertainties, the Indian economy is expected to maintain a positive growth trajectory, driven by increasing investments, infrastructure expansion, technological advancement and rising domestic demand.

Economic Background and Financial Background

Power infrastructure continues to play a pivotal role in Indias economic development by supporting industrial growth, urbanization and increasing electrification. The Governments continued investments in power generation, transmission and distribution, along with the rapid expansion of renewable energy capacity, are expected to create significant opportunities for manufacturers and solution providers operating in the electrical equipment sector.

The Company is engaged in the engineering and manufacturing of electrical equipment and provides a diversified portfolio comprising transformers (EHV, Power, Distribution and Special Application) up to 5 MVA - 132 kV class, Oil Type Compact Sub-Stations and a wide range of HT and LT Switchgear products, including Distribution Boards, Control & Relay Panels, Feeder Pillars, ACB Boxes, MCB and MCCB Panels, Junction Boxes and AC/DC Boards.

The Company also undertakes Engineering, Procurement and Construction (EPC) projects in the power transmission and distribution sector by providing end-to-end solutions covering engineering, design, procurement, installation, testing and commissioning of substations and transmission systems.

Following the approval of the Resolution Plan by the Honble National Company Law Tribunal (NCLT), the Company is focused on implementing the approved plan and exploring opportunities for operational revival and sustainable long-term growth. The Company continues to evaluate strategic business opportunities to strengthen its market position and improve operational performance.

The Company enjoys long-standing relationships with its customers, suppliers, financial institutions and other stakeholders, built on transparency, integrity and quality of service. These relationships continue to provide a strong foundation for future business opportunities.

The Company remains focused on strengthening its operations, improving operational efficiencies and capitalizing on opportunities emerging from the growth of the Indian power sector. With continued emphasis on infrastructure development and modernization of the power sector, the management remains cautiously optimistic about the Companys long-term prospects.

The Company continues to explore new business opportunities and expand its market presence through product diversification and participation in emerging infrastructure projects.

Some of the key opportunities include:

• Increased investments in power transmission and distribution infrastructure across the country.

• Expansion of renewable energy projects and Green Energy Corridor initiatives, resulting in higher demand for transformers and switchgear equipment.

• Government initiatives promoting domestic manufacturing under the "Make in India" and "Atmanirbhar Bharat" programmes.

• Growing investments in industrial, commercial and urban infrastructure requiring reliable electrical equipment and EPC solutions.

• Revival of infrastructure and power sector spending by both public and private sector entities.

The electrical equipment industry continues to be highly competitive, with participation from both organised and unorganised players. Competition is based on product quality, technology, pricing, timely execution, after-sales support and customer relationships.

The Company also faces competition from imported electrical equipment, particularly low-cost products, which may impact pricing and market share in certain product segments.

In addition, fluctuations in raw material prices, delays in project execution, changes in government policies, working capital constraints and overall economic conditions may impact business performance. The management continues to monitor these risks and adopts appropriate mitigation measures wherever feasible.

Internal Control System and Adequacy

The Company has established internal control systems commensurate with the size, nature and complexity of its business operations. These systems are designed to safeguard assets, ensure compliance with applicable laws and regulations, maintain proper accounting records and ensure the reliability of financial reporting.

The internal control framework is supported by documented policies and operating procedures, periodic management reviews and appropriate internal checks. The management continuously reviews and strengthens these systems in line with evolving business requirements and regulatory expectations.

REVIEW OF OPERATIONAL AND FINANCIAL PERFORMANCE

1. Sources of funds/ Application of funds

(a) Share Capital

At present, the Company has only one class of shares - equity shares of par value of Rs. 10/- each. The Companys authorized share capital is Rs. 1200 Lakh, divided into 120 Lakh equity shares of Rs. 10/-each. The issued, subscribed and paid up capital stood at Rs. 1001.05 Lakh as on March 31, 2026.

(b) Security Premium Reserve

The balance in securities premium reserve account as on March 31, 2026 amounted to Rs. 240.30 Lakhs.

(c) Profit and Loss Account

The balance in the Profit and Loss account as at March 31, 2026 is Rs. -10,343.08 thousands as compared to Rs. -6,575.18 thousands during the previous year.

2. Deferred Tax Assets/Liabilities

The balance in deferred tax assets to Rs. 62.38 thousands as on March 31, 2026 as compared to Rs. 47.38 Thousands during the previous year. We assess the likelihood that our deferred tax assets will be recovered from future taxable income. Deferred Liabilities were reported to be Nil.

3. Trade Receivables

The figure of Trade Receivables was reported at Rs. 11,088.36 as on March 31, 2026 which was Rs. 16,619.97 Thousand as on March 31, 2025.

4. Cash & Cash Equivalents

The figure of Cash & Cash Equivalents was reported at Rs. 3,594.36 Thousand as on March 31, 2025 which was Rs. 4567.50 Thousand in the previous year.

5. Income from Operations

Income from operations reported a figure of Rs. 19,284.67 Thousand as on March 31, 2026 as compared to Rs. 21,090.86 Thousand in the previous year ended March 31, 2025.

6. Total Income

Total income increased from Rs. 20,539.85 Thousands Lakhs as on March 31, 2026 to Rs. 38,482.92 Thousand as on March 31, 2025.

7. Other Income

Income from other sources during the current year ended March 31, 2026 was Rs. 1,255.18 Thousand as compared to Rs. 17,392.06 Thousand in the previous Financial Year ended March 31, 2025.

8. Earning Per Share

Earnings per share for the Financial Year 2025-26 is Rs. (1.03)/- in comparison to figure reported for Financial year 2024-2025 i.e. Rs. (0.66)/-

Human resources

The Company continues to recognize its employees as one of its most valuable assets. It remains committed to maintaining a healthy work environment, fostering teamwork and promoting a culture of professionalism, integrity and continuous learning.

Industrial relations remained cordial throughout the year. The Company continues to emphasize employee development through performance evaluation, skill enhancement and effective human resource practices to improve overall organizational performance.

Details of changes in Key Financial Ratios

Following is the comparative chart of all the significant financial ratios of the company

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations. These statements are based on certain assumptions and expectations of future events and are subject to various risks, uncertainties and other factors, including changes in economic conditions, government policies, market demand, industry developments and other factors beyond the Companys control.

Actual results may differ materially from those expressed or implied in such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forwardlooking statements to reflect subsequent events or circumstances. Readers are advised to review this report in conjunction with the Companys audited financial statements and the notes forming part thereof.