Sprayking Ltd Management Discussions

Sprayking Limited has rapidly emerged as a leading force in the brass parts manufacturing industry, specializing in a comprehensive range of products, including Brass Fittings, Brass Forging Equipment, Brass Transformer Parts, and a variety of Custom Brass Components. As the first listed company in the SME segment of the Bombay Stock Exchange (BSE) to manufacture 100% brass parts, Sprayking Limited takes immense pride in this pioneering achievement.

Established in the early 1980s, Sprayking Limited has carved out a significant niche in the brass manufacturing sector, thanks to its relentless focus on quality, innovation, and customer satisfaction. The company operates a modern, eco-friendly, and safety-focused infrastructure, providing a world-class workplace for its employees. By investing in state-of-the-art technology, best-in-class resources, and an unwavering commitment to precision, Sprayking Limited is well-positioned to pursue its vision of ranking among the top five brass parts manufacturers in India. This vision is driven by the company‘s superior technical expertise, commitment to sustainability, and emphasis on delivering high-quality products to global markets.

With a truly global presence, Sprayking Limited serves an esteemed clientele across the United States, Europe, Australia,

Canada, South Africa, the UAE, and India. The company‘s extensive product offerings, combined with its robust technical knowledge and cutting-edge infrastructure, enable it to leverage decades of experience and expertise. This positions Sprayking Limited to capitalize on opportunities in international markets, consistently delivering products that meet the highest standards of quality and customization.

A landmark moment in the company‘s history occurred in 2016, when it transitioned from a Private Limited entity to a Public

Limited company. This structural change marked a significant milestone in the brass industry, setting new benchmarks for excellence and corporate governance. The shift reinforced Sprayking Limited‘s commitment to transparency, accountability, and long-term growth, paving the way for its continued expansion and influence in the brass manufacturing sector.

Headquartered in Jamnagar, famously known as the Brass City of India, Sprayking Limited is strategically located in the heart of India‘s brass industry. This location, combined with the company‘s advanced manufacturing capabilities and a strong focus on sustainability, positions Sprayking Limited as a leader in the industry, both in terms of production capacity and environmental responsibility.

As a Public Shareholding Company, Sprayking Limited stands apart as the only listed entity in the SME segment of the BSE that deals exclusively with 100% brass as its processing material. This unique position allows the company to set new standards for product quality, customer service, and corporate growth, ensuring the simultaneous progress of all those associated with it whether directly or indirectly.

With its strong foundation, global reach, and commitment to excellence, Sprayking Limited is poised to lead the brass manufacturing industry into the future, continuously setting new benchmarks and driving innovation on a global scale.

GLOBAL ECONOMIC OUTLOOK

After a challenging period of significant disruption, the global economy has rebounded strongly, supported by widespread vaccination and ongoing fiscal and monetary policies.

Agricultural Equipment Demand: There has been a notable increase in the demand for agricultural equipment, driven by rising commodity prices and favorable farm conditions. This trend is expected to continue as the sector remains robust and evolving.

Sustainability and Technological Advances: The industry is making progress in developing sustainable technologies aimed at reducing the carbon footprint of agriculture. Innovations in technology, including intelligent machines and autonomous vehicles, are expected to enhance efficiency and reduce environmental impact. However, adapting traditional agricultural management processes to incorporate new technologies is necessary for realizing these advancements fully.

Inflation Concerns: Political tensions and supply-demand imbalances have led to increased commodity prices and inflation in many countries. This persistent inflation is a significant concern for global economies and poses challenges to growth prospects.

Future Trends: The demand for agricultural equipment is projected to continue its growth, supported by long-term market fundamentals. Technological advancements and mechanization will play crucial roles in meeting the future needs of global agriculture.

INDUSTRY STRUCTURE AND DEVELOPMENTS

India brass bars market is projected to grow at a healthy CAGR during the forecast period of 2021 -2027. Brass bar has wide applications in various sectors such as automotive, electrical & electronics, industrial machinery and hardware, and others. The increasing demand for automobiles across India is li kely to boost the production of automobile components which in turn will drive the growth of brass bars market over the forecast period. Furthermore, growing trends towards sustainable energy sources are expected to create opportunities for manufacturers of brass components used in renewable energy generation technologies such as wind turbines and solar systems. Additionally, rising investments by government towards infrastructure development projects have also contributed towards increasing demand for brass products including rods and bars from construction sector thus driving the growth of India‘s brass bars market through 2027.

The global brass market is expected to grow significantly over the coming years. Key players in the market are actively developing strategies and forming collaborations to address competition. Reports provide a detailed view of the market by examining revenue, pricing, and production trends from leading manufacturers. These insights help in understanding the market dynamics and the presence of different players in the industry. Additionally, the reports offer an overview of successful marketing strategies, contributions, and recent developments of major companies, along with a review of their historical and current performance. Various analytical methods are employed to deliver a comprehensive understanding of the brass market.

DRIVERS OF THE MARKET:

The major drivers contributing to rising demand for India brass bars include increased use in manufacturing processes due to its excellent machinability property; its resistance against corrosion; good electrical conductivity; thermal stability & strength; high temperature oxidation properties; superior wear resistance leading low maintenance costs over time and availability at affordable prices compared with other alloys that contain copper or zinc like stainless steel or bronze respectively. Increasing trend towards electric vehicles also fuel up the requirement of electric equipment parts made up from materials having superior properti es such as that provided by brasses which further drives their usage into automotive industry thereby influencing overall growth rate positively during forthcoming years ahead till 2027 end.

CHALLENGES OF THE MARKET:

The primary challenge faced by players involved into India‘s brass rod/bar segment is price fluctuation associated with raw material inputs required while manufacturing them due to their dependence on imports from international markets which makes it difficult for companies operating within th is sector maintain consistent prices throughout different economic cycles affecting their profitability margins significantly if left unchecked or unadjusted accordingly as per changes occurring at global front regularly so as sustain positive cash flows g oing forward.

TRENDS OF THE MARKET:

Brass bar manufacturers today are increasingly investing resources toward developing advanced processing techniques involving laser cutting operations primarily targeted toward reducing wastage levels along with achiev ing precision engineering requirements demanded by clients looking forward buying finished products meeting exact specifications desired without any compromise on quality standards established earlier necessitating improved operational capabilities while keeping costs under control simultaneously thus allowing business organizations maximize returns achieved out every hour spent working upon same projects ranging between short term & long term both when needed depending upon need arising currently prevailin g situation encountered currently witnessed mostly.

OPPORTUNITIES AND THREATS IN THE BRASS MANUFACTURING INDUSTRY

Sprayking Limited operates in a vibrant and expanding brass manufacturing industry, where opportunities for global growth, sustainability initiatives, and technological advancements are substantial. As a pioneering listed company on the Bombay Stock Exchange with a robust global presence, the company is well-positioned to leverage both domestic and international market developments. However, to sustain its competitive advantage, it must address challenges such as fluctuating raw material prices and intense market competition, all while continuously driving innovation.

OPPORTUNITIES

1. Global Market Expansion: The brass manufacturing industry has significant potential for global growth. The increasing demand for high-quality brass components in developed regions like the United States, Europe, and Australia, as well as emerging markets in Asia, Africa, and Latin America, presents a substantial opportunity. Companies that have established export capabilities can leverage new partnerships and distribution channels to capture a larger share of these markets.

21^st ANNUAL REPORT

2. Technological Advancements in Manufacturing: Advances in Industry 4.0 technologies, such as automation, robotics, and smart manufacturing, offer brass manufacturers the chance to enhance efficiency, reduce costs, and increase production precision. The adoption of these technologies allows manufacturers to meet the rising demand for customized and high-quality products while remaining competitive on a global scale.

3. Focus on Sustainability and Eco-Friendly Practices: With stricter global environmental regulations, there is a growing demand for eco-friendly production methods. Manufacturers investing in sustainable practices, such as energy-efficient processes and recyclable materials, are well-positioned to attract environmentally conscious clients and comply with international standards, especially in regions with stringent environmental requirements.

4. Rising Demand in Key Sectors: The demand for brass components is expanding across various industries including automotive, electrical, plumbing, and renewable energy. The automotive sector requires durable brass fittings, while the renewable energy sector uses brass in solar and wind energy systems. The ongoing global infrastructure boom further drives the need for brass products, creating growth opportunities.

5. Government Support for Domestic Manufacturing: Initiatives like "Make in India" and other government subsidies and incentives for domestic manufacturing can boost the brass manufacturing sector. These policies help companies expand their operations, improve capabilities, and increase market share by offering tax breaks, subsidies, and export benefits.

6. Niche Markets and Customization: There is a growing trend towards specialized, custom-made brass components in industries such as aerospace, defense, electronics, and healthcare. Companies offering precision engineering and custom solutions can serve niche markets that require tailored brass products, addressing specific technical needs and enhancing their market position.

7. Strategic Alliances and Partnerships: Forming alliances or joint ventures with global distributors or manufacturing firms can help expand product ranges, improve technical capabilities, and enter new geographical markets. These strategic partnerships provide access to new technologies, resources, and reduced operational risks.

8. Agricultural Machinery Market Growth: In India, government commitment towards rural development through agro-mechanization and subsidies on agricultural equipment can stimulate the agricultural machinery market. This shift towards mechanized farming, driven by labor shortages and the need for increased productivity, presents additional opportunities for manufacturers in the agricultural sector.

THREATS

1. Intense Competition from Global and Local Players: The brass manufacturing industry faces intense competition from both domestic and international players, particularly from countries like China and Southeast Asia, where manufacturing costs are lower. This competitive pressure necessitates continuous innovation and competitive pricing while maintaining high quality.

2. Fluctuations in Raw Material Prices: Brass is an alloy of copper and zinc, both of which are subject to global price fluctuations. Changes in supply and demand, geopolitical tensions, and commodity market dynamics can lead to sharp increases in the cost of these raw materials, impacting profitability and potentially necessitating higher product prices.

3. Stringent Environmental Regulations: The increasing imposition of environmental regulations requires manufacturers to invest in compliance measures related to waste management, pollution control, and carbon emission reductions. These regulations can lead to higher operational costs and pose a risk of fines or penalties for non-compliance.

4. Economic Slowdowns and Global Instability: Economic downturns, geopolitical instability, and global supply chain disruptions can negatively affect demand for brass components. Events such as recessions, trade tensions, and pandemics can disrupt operations and impact international trade, particularly for companies heavily reliant on global markets.

5. Supply Chain Disruptions: Disruptions in the supply chain for raw materials, such as copper and zinc, can result from factors like natural disasters, political unrest, or logistical issues. These disruptions can lead to production delays, increased costs, and challenges in meeting customer demand, especially for companies dependent on imported materials.

6. Technological Obsolescence: As new technologies and materials emerge, there is a risk of technological obsolescence for companies that fail to keep up with advancements. Competitors who invest in cutting-edge technology may gain a significant edge in terms of efficiency, product quality, and cost reduction.

7. Currency Exchange Rate Volatility: Fluctuations in foreign exchange rates can affect profit margins for companies engaged in international trade. An appreciation of the local currency against major currencies like the US dollar or Euro can make products more expensive and reduce competitiveness in foreign markets.

8. Evolving Customer Demands and Market Trends: The increasing demand for customized, high-precision products with shorter lead times requires manufacturers to continually invest in research, development, and technology. Companies that cannot meet evolving customer expectations may lose business to more agile and innovative competitors.

9. Challenges in Agricultural Machinery Market: Despite the growth potential, the agricultural machinery market in India faces challenges such as the limited farm size, which restricts the use of heavy equipment, and poor aftersales service. Additionally, traditional farming tools still dominate in many areas, deterring the growth of the agricultural machinery sector.

In summary, the brass manufacturing industry offers numerous opportunities for growth through global expansion, technological advancements, and sustainability. However, manufacturers must navigate significant threats including competition, raw material price volatility, regulatory pressures, and evolving market trends to maintain their competitive edge and achieve long-term success.

SEGMENT WISE OR PRODUCT-WISE PERFORMANCE.

The Company is engaged in the business of brass parts manufacturing industry, specializing in a comprehensive range of products, including Brass Fittings, Brass Forging Equipment, Brass Transformer Parts, and a variety of Custom Brass Components, accordingly this is the only single reportable segment.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

The company recognizes and values the commitment, competence, and dedication of its employees across all areas of business. It is dedicated to nurturing, developing, and retaining top talent by investing in employee growth, including technical skills, domain expertise, and leadership capabilities. To maintain its leadership position, the company continually adapts its Human Resource (HR) strategy to address evolving employee needs.

The company is proactive in ensuring employee safety, having implemented regular safety audits, provided machine safety training, and mandated the use of protective equipment.

As of March 31, 2025, the company employed a total of seven individuals, including factory workers. The company remains committed to creating opportunities and ensuring the recruitment of diverse candidates while upholding principles of meritocracy.

RISKS AND CONCERN

Risk is an integral part of the business and we aim at delivering superior shareholder value by achieving an appropriate balance between risks and returns is subject to continuously evolving legislative and regulatory environment due to increasing globalization, integration of world markets, newer and more complex products & transactions and an increasingly stringent regulatory framework.

Our senior management identifies and monitors the risks on an ongoing basis and evolves processes/systems to monitor and control the same to contain the risks to minimum levels. Periodic monitoring by our officials helps in identifying risks in early stage. If required, a risk event update report is periodically placed before the Board of Directors of the Company.

Regulatory framework, focused on maintaining controls on domestic businesses but even inadvertently creating more favorable regulatory environment for global entities operating in India is a matter of concern. We actively participate in dialogue in industry bodies and with regulators to point these out and to recommend appropriate changes.

ADEQUACY OF INTERNAL CONTROLS

The company maintains a robust system of internal controls designed to ensure the safeguarding of assets and protection against unauthorized use or loss. This system also guarantees that all transactions are properly authorized, recorded, and reported accurately.

To support this, independent internal auditors conduct comprehensive audits that cover a wide range of operational aspects. These audits ensure compliance with established standards and provide an additional layer of oversight, helping to uphold the integrity and effectiveness of the companys internal control system.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The company has established comprehensive Internal Control Systems and Procedures covering the procurement of stores, raw materials, components, plant and machinery, equipment, and the sale of goods and other assets. These systems are designed to ensure effective management and oversight in these critical areas.

Roles and responsibilities are clearly defined for all managerial positions, and operating parameters are rigorously monitored and controlled. The companys accounting and internal control systems are designed to provide reasonable assurance that assets are protected from unauthorized use or loss. Additionally, these systems ensure that financial records are accurate and reliable for preparing financial statements and maintaining accountability for assets. This framework supports both operational efficiency and financial integrity.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

(AMOUNTS IN LAKHS)

PARTICULARS	Standalone Basis (Year Ended)		Consolidated Basis (Year Ended)
	31.03.2025	31.03.2024	31.03.2025	31.03.2024
I. Net Sales/Income from Operations	6195.21	3113.79	12776.75	10166.44
II. Other Income	90.57	30.27	349.30	37.12
III. Total Revenue (I+II)	6285.78	3144.06	13126.05	10203.57
	5823.56	437.48	11762.35	1573.09
IV. Earnings Before Interest, Taxes,
Depreciation and Amortization
Expense
V. Finance Cost	74.79	36.97	219.74	135.83
	105.67	44.88	180.98	194.37
VI. Depreciation and Amortization
Expense
VII. Profit Before Tax (IV-V-VI)	281.76	355.63	962.98	1242.89
VIII. Tax Expense:
i. Current Tax Expense	80.98	72.56	194.60	332.06
ii. Deferred	(19.69)	14.00	40.69	19.23
IX. Profit After Tax (VII-VIII)	220.47	269.07	727.69	891.60

REVIEW OF BUSINESS OPERATION

Standalone:

The Total Income of the Company stood at Rs. 6285.78 Lakhs for the year ended March 31, 2025 as against Rs 3144.06 Lakhs in the previous year. The Company made a Net Profit of Rs. 220.47 Lakhs for the year ended March 31, 2025 as compared to the Net Profit of Rs. 269.07 Lakhs in the previous year registering decrease of 17.87%

Consolidated:

The Consolidated Total Income is Rs. 13126.05 Lakhs for the financial year ended March 31, 2025 as against Rs. 10203.57

Lakhs during the previous financial year. Consolidated Net Profit is Rs. 727.16 Lakhs for the year ended March 31, 2025 as compared to the Net Profit of Rs. 891.60 Lakhs in the previous year, registering decrease of 18.38%.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Ratio	Numerator	Denominator	March 31, 2025	March 31, 2024	change in ratio	Reason for variance
Current Ratio Debt	Current Assets	Current Liabilities Shareholder‘	2.17	1.85	49%	Lower due to Bonus issue proceeds used For machinery/ material advances and repayment of short term debt. Due to Rise from Bonus issue
Equity Ratio Debt	Total Debt	s Equity	0.72	0.25	193%	proceeds and retained profits.
Service Coverage	EBITDA	Total Borrowings	0.19	0.65	(67%)	Due to Increase from additional debt for expansion and working capital.
Ratio Return on Equity Ratio Inventory	Profit for the year	Shareholder‘ s Equity Average	0.07	0.10	(24%)	Due to Fall from dividend payout and reserve adjustments. Higher year-end stock due to demand anticipation and
Turnover Ratio Trade	Sales	Inventory	6.12	2.36	47%	raw material purchase.
Receivable turnover	Net Sales	Closing Trade Receivables	9.12	2.46	(17%)	Drop from improved collections despite higher sales.
ratio Trade payables turnover ratio	Total Purchases + Manufacturin g Exp.	Closing Trade Payables	21.01	2.32	700%	Lower from advance supplier payments and reduced credit use.
Net capital turnover ratio	Sales	Working capital (CA- CL)	3.42	1.60	1183%	Due to Growth from Bonus issue inflow and reduced liabilities.
Net profit ratio	Net Profit	Sales	0.04	0.09	(59%)	Due to decline from production disruptions and weaker demand.
Return on Capital employed	Earnings before interest and tax	Capital Employed	0.12	0.14	(15%)	Slight drop from debt repayment despite equity growth.
Return on investment	Net Profit	Cost of Investment	0.36	0.44	(19%)	Lower from sale of non-core investments and revaluation loss.

CAUTIONARY NOTE/ DISCLAIMER

Statements in this Report, describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be

21 ANNUAL REPORT different from those expressed or implied since the Companys operations are affected by many external and internal factors, which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future based on subsequent developments, information or events.