SM Auto Stamping Ltd Management Discussions

1. BUSINESS OVERVIEW:

The Company is engaged in the design and manufacturing of sheet metal components and subassemblies for automobile and engineering industries. The product portfolio primarily includes sheet metal pressed components used in clutches, brakes, engine mountings, chassis, shaft drive, and body trims. These components cater to passenger vehicles, commercial vehicles, and tractors. In addition, the Company also manufactures deep drawn components and supplies to the electrical equipment segment.

The Company operates manufacturing facilities located in Nashik, Maharashtra, equipped with modern press shop infrastructure and supported by strong engineering capabilities. We operate three state-of-the-art manufacturing units, spread across industrial plots totaling appx. 5000 square meters. The facilities are compliant with ISO 9001:2015 / IATF 16949:2016 standards, ensuring adherence to stringent quality requirements.

The Company also undertakes job work related to blanking, forming, and other sheet metal operations, thereby optimizing capacity utilization and operational efficiency.

The product portfolio is broadly classified into:

A. Components used in Automotive Power Train

1. Components for automotive clutches

2. Components for automotive propeller shaft drive

3. Components for automotive brake system

4. Components for automotive engine mountings

B. Components used in Automotive Body

1. Components for automotive body trims

2. High tonnage components

C. Components used in Automotive Chassis

D. Automotive Welded Assemblies

E. Deep Drawn Components

F. Components for Electrical Industries

2. BUSINESS OPPORTUNITIES & STRATEGY:

Strengths:

In-house tool manufacturing facility and Press Parts Manufacturing Capabilities:

The Company has robust in-house design & development and manufacturing capabilities, enabling effective control over quality, cost, and delivery. This supports faster development cycles, improved process control, and cost competitiveness.

Diversified Product Portfolio:

The Company offers a wide range of sheet metal components across automotive and electrical segments, allowing flexibility to cater to varied customer requirements. Alongside we have also developed Defense sector parts.

Experienced Leadership:

The promoters bring extensive industry experience, enabling strategic decision-making and operational excellence. Our Promoters, Mr. Suresh Gunwant Fegde and Mr. Mukund Narayan Kulkarni possess more than 41 years of experience in this field, which enables us to deliver quality products to our customers

Established Customer Relationships:

Long-standing relationships with key customers provide repeat business opportunities and enhance credibility in the market.

Business Strategy:

Improving Capacity Utilization:

The Company continues to focus on enhancing capacity utilization through better production planning, increased order execution, and optimization of available resources. The company has purchased out required machineries, equipment and utilize existing capacity with maximum capacity.

Operational Efficiency & Cost Optimization:

Focused initiatives have been undertaken to improve productivity, reduce process inefficiencies, and optimize costs through continuous improvement practices.

Strengthening Customer Engagement:

The Company aims to deepen relationships with existing customers while expanding its domestic customer base through consistent quality and timely delivery.

Focus on Quality and Compliance:

Maintaining stringent quality standards and certifications remains a key priority to ensure repeat business and customer confidence.

Presently, Our Company is certified from ISO 9001:2015/IATF 16949:2016 by TUV NORD & ZED Silver by Quality Council of India.

Opportunities:

- Growth in domestic automotive sector driven by infrastructure development and economic expansion

- Government initiatives supporting manufacturing and automotive demand

- Increasing demand for cost-effective and high-quality components

- Expansion of electrical and engineering segment requirements

- Opportunities in aftermarket and replacement markets

3. SEGMENT / PRODUCT WISE PERFORMANCE:

The Company operates in a single segment, i.e., automotive components and allied sheet metal products. During the year, the Company continued to strengthen its presence in automotive applications while also increasing its contribution in the Electrical, Defense and Engineering segment, thereby improving product diversification.

4. OUTLOOK:

The Indian automotive industry continues to show stable growth supported by infrastructure development, rising demand, and favorable government policies. The sector is also witnessing technological advancements and evolving customer requirements.

The Company remains optimistic about future growth, driven by:

- Strong domestic demand

- Focus on operational efficiency

- Improved customer engagement

- Expansion in adjacent segments

With its established capabilities and disciplined approach, the Company is well-positioned to capitalize on emerging opportunities.

5. RISK AND CONCERNS:

Supply Chain Risk:

Supply chain disruptions and dependency on key suppliers may impact production schedules. The Company has mitigated this risk by strengthening supplier relationships and improving procurement planning.

Raw Material Price Volatility:

Fluctuations in steel and alloy prices continue to impact cost structures. The Company manages this risk through rate contracts, cost control measures, and operational efficiencies.

Operational Risks:

Machine breakdowns, tool maintenance challenges, and manpower availability can impact productivity. The Company has focused on preventive maintenance and process improvements to minimize such risks.

Regulatory and Compliance Risk:

Changes in government policies and compliance requirements may affect operations. The Company ensures strict adherence to all statutory norms and remains proactive in adapting to regulatory changes.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control systems commensurate with the size and nature of its operations. These systems ensure safeguarding of assets, accuracy of financial records, and reliability of operational data.

Key features include:

- Well-defined financial and operational controls

- Regular internal audits and compliance checks

- Implementation of ERP systems for monitoring and control

- Periodic review of standard operating procedures

7. OVERVIEW AND ANALYSIS OF FINANCIAL CONDITIONS:

During the financial year 2025-26, the Company continued to focus on improving operational performance and cost efficiency.

The Company achieved revenue from operations of Rs 71,31,47,071 as compared to Rs 66,38,33,240 in the previous year.

Profitability was influenced by raw material price fluctuations and operational factors; however, continuous cost optimization and efficiency improvement initiatives supported overall performance. The management remains confident about maintaining financial stability through disciplined operations and strategic planning.

8. DEVELOPMENT ON HUMAN RESOURCE FRONT:

The Company recognizes human resources as a key driver of growth. Continuous efforts have been made toward skill development, performance improvement, and employee engagement.

Training programs have been conducted to enhance technical and operational capabilities of employees. The Company also focuses on creating a positive work environment that encourages productivity, teamwork, and innovation.

Employee engagement initiatives, recognition programs, and cultural activities continue to strengthen morale and organizational alignment.

9. INDUSTRIAL RELATIONS:

Industrial relations during the year remained cordial and harmonious. The Company continues to maintain strong relationships with employees, contractors, and business partners. Efforts are ongoing to develop reliable vendor and subcontractor networks aligned with the Companys quality and delivery expectations.

The Company continues to focus on strengthening its operational foundation, improving efficiencies, and maintaining strong customer relationships to ensure sustainable growth in the coming years.

1. KEY FINANCIAL RATIOS:

Sr. No Particulars of Ratio	31.03.2026 In %	31.03.2025 In %
1. Inventory Turnover	10.61	9.04
2. Debt Service Coverage Ratio	4.86	10.05
3. Current Ratio	1.41	1.23
4. Debt Equity Ratio	0.18	0.11
5. Net Profit Margin (%)	3.90%	4.14%

2. DETAILS PERTAINING TO NET-WORTH OF THE COMPANY:

Particulars	31.03.2026 (Rs )	31.03.2025 (Rs )	Explanation of change
Net-worth	23,14,89,384/-	20,36,84,029/-	Enhancement in the Net worth by Rs 2,78,05,355 due to accumulation of surplus carried to FY 2025-26 as well profit earning.

For and on behalf of Board of Directors of SM Auto Stamping Limited

Sd/-
Mr. Mukund Narayan Kulkarni
Chairperson and Managing Director
DIN: 00248797
Add: -Alkund Banglow, Krishna Colony Shivaji Nagar,Jail Road, Nashik Road Nashik 422101 MH IN

Date:05 th August 2026
Place: Nashik