Spectrum Electrical Industries Ltd Management Discussions

Global Economy Overview

The global economy continues to inch toward a slow recovery despite global volatility. According to the IMFs April 2025 forecast, global growth is expected to moderate to 2.8% in 2025, before inching up to 3.0% in 2026. These levels remain well below the pre-pandemic average of 3.8%, underscoring the lasting effects of geopolitical tensions, trade disruptions, and structural transitions across major economies.

Performance across leading economies varied across the globe. The United States posted a robust 2.8% growth in 2024, supported by resilient consumer spending; however, evolving trade flows and shifting consumption trends may weigh on its performance in 2025. The Eurozone showed early signs of revival, with GDP growth improving from 0.4% in 2023 to 1.0% by 2025, largely driven by services, despite manufacturing-heavy nations such as Germany continuing to face headwinds from supply chain volatility. By contrast, emerging markets sustained stronger momentum, averaging growth of 4.2%, propelled by domestic demand and digital innovation. India and China remainthekeygrowthengines,withIndiasrealGDPgrowth at 6.4% in FY25, supported by broad-based expansion in agriculture, services, and private consumption.

Looking ahead, advanced economies will need to navigate tighter financial conditions and evolving trade realignments, while emerging markets are poised to benefit from structural reforms and sustainability-led growth. Although risks persist, the trajectory points to cautious optimism, with significant industry shifts and policy-driven transformations expected to shape the next phase of global expansion.

Indian Economy Overview

The International Monetary Fund (IMF) has revised Indias growth outlook upward, projecting the economy to expand by 6.4% in both 2025 and 2026, compared to its earlier estimates of 6.2% for 2025 and 6.3% for 2026 released in the April 2025 World Economic Outlook. This revision reafirms Indias position as the worlds fastest-growing major economy, with momentum supported by a more benign external environment than previously anticipated.

For India, the IMF also provides estimates on a financial year basis, placing growth at 6.7% in FY25 and 6.4% in FY26, reflecting strong performance across agriculture, services, and private consumption.

On a global scale, the IMF has modestly lifted its forecast, expecting growth of 3.0% in 2025 and 3.1% in 2026. The upward adjustment is attributed to easing tari_ impacts, a weaker US dollar, and improved financial conditions. Among other major economies, China is projected to grow at 4.8% in 2025 and 4.2% in 2026, while the United States is expected to expand at 1.9% in 2025 and 2.0% in 2026.

. Industry Overview: a. Company Overview

Spectrum Electrical Industries Limited was originally incorporated on 12th August 2008 as Spectrum Polytech Private Limited. The name was later changed to Spectrum Electrical Industries Private Limited. On 20th June 2018, the Company was converted into a public limited entity and assumed its present name. The Companys shares were subsequently listed on the Emerge Platform of National Stock Exchange (NSE) on 1st October, 2018, marking a significant milestone in its growth journey.

Spectrum is engaged in the design and manufacturing of a wide range of electrical components, with applications across diverse sectors. Leveraging multi-technology expertise and a range of processes, including design, fabrication, moulding, powder coating, surface coating, and assembly, the Company delivers end-to-end solutions to its customers. While the primary focus is on electrical components, Spectrums capabilities also extend to industries such as automobile and irrigation.

The Company is ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 certified, reafirming its commitment to quality, safety, and sustainability. Spectrum has built a strong reputation as a one-stop solution provider for leading Indian and global manufacturers of electrical products. Its integrated model spans from concept and design to final delivery, supported by a robust in-house R&D setup and precision manufacturing expertise. We are BIS IS14772, IS60898, IS1293, IS3854 certified , demonstrating our strong commitment to quality, safety, and reliability of products. This certification highlighted our proactive to identifying and managing workplace risk and ensuring a Consumer Safety, Quality Assurance, Legal Requirement, Consumer Trust, Market Access of products in India. by adhering to the BIS IS 14772, IS60898, IS1293, IS3854 standard. A key differentiator is the high-precision Tool Room at the Jalgaon plant, equipped with advanced indigenous and imported machinery. This facility supports the design and development of electrical components, tools, moulds, and dies tailored to client requirements.

Spectrums manufacturing footprint extends across Jalgaon and Nashik (Maharashtra). These facilities specialize in surface coating services, sheet metal fabrication, electrical press components, tool and die manufacturing, plastic injection-moulded components, and assembly of metal junction boxes—delivering quality, scale, and reliability.

b. Migration from the SME Platform of NSE to the Main Board of NSE and BSE:

Our Company successfully migrated from the SME Segment of the National Stock Exchange of India Ltd. (NSE) to the Main Board of both NSE and BSE Ltd. during the year, marking a significant milestone in our growth journey. This transition has enhanced the Companys visibility, credibility, and access to a wider investor base. Further, in line with regulatory requirements and best corporate practices, the Company has adopted the Indian Accounting Standards (Ind AS) for the preparation of its financial statements, ensuring greater transparency, comparability, and alignment with global reporting standards.

c. Development –

Staying abreast of industry trends and global policy shifts toward sustainability, the Company has expanded its product portfolio with the launch of Electric Vehicle (EV) Chargers. This initiative aligns with our ethos of innovation and sustainability, while addressing emerging market opportunities.

The growing adoption of electric vehicles and the need for reliable charging infrastructure have created a strong demand for compatible, high-quality charging solutions. In response, we have developed EV chargers designed to support a wide range of vehicle models and charging standards, ensuring flexibility and ease of use. The decision to enter this segment was backed by extensive market research and a clear understanding of industry requirements. By introducing EV chargers, the Company aims to strengthen its market position, diversify revenue streams, and contribute to long-term profitability while supporting the global transition to clean mobility.

d. Outlook –

The electrical components sector plays a pivotal role in a rapidly evolving technological landscape. The industrys growth depends on robust supply chains that can ensure the timely availability of electrical and electronic devices to meet the rising demand of consumers and industries.

According to market analysis, the Electrical Components Market is projected to grow at a CAGR of 3.11% during 2021–2026, reaching a size of USD 1,383.94 billion by 2026. Electrical components of diverse types are indispensable across industries, performing critical functions such as controlling currents and voltages, while offering long-term operational benefits.

Several factors are driving this expansion. These include the increasing penetration of industrial IoT and digital twin technologies, as well as advancements in semiconductor technology. The proliferation of the Internet of Things (IoT) in homes, offices, factories, telecommunications, and consumer electronics is further boosting demand for electronic components. In parallel, the rising integration of automotive technologies into electronic devices is opening new growth avenues. Looking ahead, growing demand from Original Equipment Manufacturers (OEMs) is expected to provide significant opportunities for the electrical and electronic components market, reinforcing its critical role in supporting global industrial and consumer ecosystems..Opportunities: The Company operates in a sector that is witnessing strong growth prospects, driven by multiple industry and policy developments. Increasing demand from core industries, infrastructure projects, and consumer durables is expected to provide consistent business opportunities. Government initiatives such as Make in India, Production Linked Incentive (PLI) schemes, and large-scale investments in electrification, renewable energy, and smart city projects further strengthen the growth outlook. The rising adoption of electric vehicles and charging infrastructure, along with the transition towards renewable energy, has opened up new avenues for specialized components. Technological advancements in automation and IoT-driven applications are also creating demand for smart and efficient electrical solutions.

i. Increasing electrification:

Government efforts towards enhanced power availability are continually increasing electrification in semi-urban and rural areas, along with a stable electricity supply in urban areas. This has translated into better demand for electrical and consumer durable products in new and existing markets.

ii. Growing Demand from Core Industries:

Increasing industrialization, infrastructure development, and expansion in sectors such as automotive, power, renewable energy, consumer durables, and electronics are creating strong demand for electrical products.

iii. Electrification of Transportation:

The rapid adoption of electric vehicles (EVs), charging infrastructure, and related systems is opening a high-growth segment for specialized electrical components.

iv. Infrastructure expansion:

The governments strong focus on infrastructure expansion, including highway construction, railway modernisation, and airport additions, is expected to create demand for electrical goods.

v. Industry growth and scope for better market penetration:

The electricals and consumer durables categories are still underpenetrated and poised for strong growth, driven by increasing urbanization and rising personal disposable income. Furthermore, the Electrical, Automobile, and Irrigation

Components Sectors are underpenetrated in India compared to developed nations. The company will continue to drive growth and penetration in the coming years. vi. Product Portfolio:

Caters to the growing electrical component industry, with scope to offer products to other industries, including electrical, automotive, and irrigation. Further, an increase in infrastructure development in India is creating opportunities for the electrical components sector.

vii. Demand for electrical components and allied products is expected to grow in the coming years due to industrial development, besides installation and replacement demand from the consumer electrical sector.

2. Risk and Concern: i. Economic slowdown:

Slowdown in the Indian economy due to global developments could adversely impact growth in the short term.

ii. Cybersecurity and IT Risks:

As operations and supply chains become increasingly digitized, risks of data breaches, cyberattacks, or system disruptions pose potential threats to business continuity.

iii. Supply Chain:

In the case of manufacturing companies and their projects are typically time, cost, and quality sensitive, leaving little room for delays. Therefore, manufacturers cannot deliver on their promises because of a supply chain stall, risking losing out on thousands of crores in potential revenue and profit. For managing this type of risk and a continues supply of raw material, our company has established commercial relations with reputed suppliers.

iv. Prices of Raw material:

Due to volatile and unstable global markets have widespread implications for manufacturing organisations and unexpected fluctuations in raw material price levels, unforeseen obstacles are destabilising supply chains and making it difficult for manufacturers to meet customer needs. Accordingly, a change in the price of raw materials raises the cost of production. Our company manages this risk by entering into a supply agreement with the suppliers.

v. Exchange Rate Risk:

Changes in exchange rates impact both the cost of raw materials and production, especially if suppliers and customers are located in foreign countries. Currency fluctuations are increasingly volatile and difficult to predict.

vi. Government Policy:

Changes in the Government Policy could adversely affect economic conditions in India generally and our business in particular.

vii. Government Duties:

Taxes and other levies imposed by the Government of India or other State Governments, as well as other financial policies and regulations, may have a material adverse effect on our business, financial condition and results of operations.

viii. Power disruptions:

Any impact on power distribution and electricity delivery can impact the demand for electrical products. Availability of stable and quality power supply continues to be an important factor for the industrys growth prospects.

ix. Lockdowns & containments:

Market closures such as those experienced in the year under review will adversely impact the revenue-generation capability, growth and profitability of the business.

3. Segment-Wise Performance

The Company is engaged in the business of design and manufacturing of electrical, automobile, and irrigation component, which constitute a single business segment in terms of IND, AS 108 on Segment Reporting. Accordingly, there are no other business segments to be reported under IND AS 108.

4. Internal Control Systems and Their Adequacy

The Company maintains an adequate and effective Internal Control System, equivalent to its size and complexity. It believes that these systems provide, among other things, a reasonable assurance that transactions are executed with management authorization.

It also ensures that they are recorded in all material respects to permit the preparation of financial statements in conformity with established accounting principles, along with the assets of the Company being adequately safeguarded against significant misuse or loss. The Company promotes the highest ethical standards and ensures that the work culture in no way conflicts with business interests.

The internal audit team of the Company independently reviews the adequacy and effectiveness of the internal controls and strengthens the control measures, and shares its observations with the management for corrective action.

The Audit Committee of the Board periodically reviews the adequacy and effectiveness of these internal controls, based on reports submitted by the internal and statutory auditors. The management takes timely corrective measures wherever necessary to ensure that the control environment remains reliable and effective.

5. Financial Performance

The details of the financial performance are appearing in the financial statements attached to this Annual Report.

Key Financial Highlights

(Amount in Lakhs)

PARTICULARS	Standalone		Consolidated
	31.03.2025	31.03.2024	31.03.2025	31.03.2024
Revenue from Operation	39,709.09	32,226.27	40,223.71	32,808.52
Other Income	456.36	621.34	459.81	622.49
Total Revenue Income	40,165.45	32,847.61	40,683.52	33,431.02
Total Expenditure	36,650.78	30,196.08	37,096.83	30,745.37
Profit Before Tax	3,514.67	2,651.53	3,586.68	2,685.64
Profit After Tax	2,427.88	1,917.98	2,542.24	1,941.82

Your Company had selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year.

Key Financial Ratio:

Sr. No. Particulars	FY 2025	FY 2024	Change Between Current and Reporting Period in %
1 Current Ratio	1.09	1.33	-17.86
2 Debt-Equity Ratio	0.77	0.53	45.42
3 Debt Service Coverage Ratio	4.43	4.82	-8.11
4 Return on Equity Ratio	0.14	0.15	-10.13
5 Inventory turnover ratio	4.00	3.43	16.64
6 Trade Receivables turnover ratio	4.05	5.08	-20.55
7 Trade payables turnover ratio,	6.93	5.22	32.78
8 Net capital turnover ratio	23.60	7.92	197.83
9 Net profit ratio	0.06	0.06	2.73
10 Return on Capital Employed	0.13	0.14	-3.26

Financial Highlight

(Amount in Lakh)

Particulars	2020-21	2021-22	2022-23	2023-24	2024-25
Total Income	15,312.34	25,253.36	25,831.04	32,847.61	40,165.45
EBIDTA	2,045.96	2,626.63	2,803.12	4,451.40	5,690.51
PAT	590.56	765.13	842.07	1,945.56	2,427.86

6. Focus on Local Area and Beyond

Our Company continues to strengthen its foothold in the market through strong customer and supplier relationships, ensuring timely delivery and reliable service. Simultaneously, it is expanding its reach beyond the local area by engaging with new Original Equipment Manufacturers, thereby diversifying the customer base and driving sustainable growth. The Company continues to strengthen its operational presence in key regions of Maharashtra, with established facilities in Jalgaon and Nashik, and has further expanded the business in the Southern region through Bangalore.

7. Strengthen Relationships with Key Customers and Multiple Vendors

The Company continues to place strong emphasis on nurturing long-term and mutually beneficial relationships with the key customers. As a trusted supplier, the Company remains committed to providing quality, consistency, and timely delivery, which has enabled it to be regarded as a reliable partner in the industry. In order to continue delivering quality products to our key customers, our Company shall further strengthen its relationship with key vendors, i. e. subcontractors. Our Company is also working on a strategy to develop more and more vendors who can deliver products and services in line with the Companys philosophy and product offerings.

The focus on strengthening customer relationships, customer satisfaction, and diversifying vendor networks enables us to sustain our competitive edge, enhance value creation, and ensure long-term business continuity in a dynamic market environment. Human Resources The Company recognizes its employees as one of its most valuable assets and a critical driver of sustainable growth and competitiveness. In the electrical components manufacturing industry, where precision, safety, innovation, and adherence to quality standards are paramount, a skilled and motivated workforce plays a pivotal role. During the year under review, the Company continued to focus on strengthening its human resource capabilities through leadership training, skill upgradation, and employee engagement initiatives. Special emphasis was laid on skill upgradation, quality awareness, safety practices, and operational efficiency at all levels of the organization. The Company fosters a culture of performance, accountability, and continuous improvement. The HR function also ensured compliance with all statutory requirements relating to labor, health, and safety.

Employee welfare, workplace safety, and employee relations remained areas of continued focus. The Company has maintained cordial and harmonious industrial relations across all its units during the year. The management believes that open communication, teamwork, and collaborative practices are key to nurturing talent and ensuring the retention of skilled manpower.

The Company encourages a conducive work environment and aligns personal goals with the Companys growth vision for a win-win situation. The employees are given ample recognition to keep them motivated by way of conducting various recreational activities and reward and recognition programs.

8. Disclaimer Clause

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, and expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws, and other statutes, and incidental factors.

For and on behalf of the Board of Directors of

FOR SPECTRUM ELECTRICAL INDUSTRIES LIMITED

Sd/- Sd/-

 

DEEPAK CHAUDHARI BHARTI CHAUDHARI

CHAIRMAN & WHOLE TIME DIRECTOR

MANAGING DIRECTOR DIN: 02759526

DIN: 00538753

 

Date: 07/09/2025

Place: Jalgaon