Sunita Tools Ltd Management Discussions

Sunita Tools Limited has been in the Engineering and Mould base Industry for more than three and half decades providing one of its kind customized solutions to various industries with a vision to fulfill tomorrows requirements today. We manufacture Ground Plates, Mould Bases and Precision CNC Machining. Our products are a pre-requisite and act as food to the Manufacturing industries be it Automotive, Pharmaceutical, Electronics, Consumer Goods and most of the Manufacturing Sectors. Our products are mould base and machining parts which are industrial capital goods which undergoes stringent quality tests to meet industry standards before they are delivered to our clients. Our ability to produce customized quality products, compatible products, guidance throughout the design and manufacturing process, after sale technical support provides us significant competitive advantages. Our commitment to compatibility makes our products & services a flexible and versatile choice compared to others. We endeavor to promptly address any concerns of our business associates through significant senior management engagement.

Our strength lies in our ability to deliver customized, high-quality products, offer expert guidance throughout the design and manufacturing process, and provide comprehensive after-sales technical support. This commitment to compatibility and customer satisfaction sets us apart, making our products and services a flexible and dependable choice. We are dedicated to promptly addressing any concerns raised by our business associates through direct engagement with senior management.

Our venture into the defence sector is nearing commencement, with our manufacturing facility in Faridabad poised to produce Empty Artillery Shells of 155mm M107 design and other calibres, including 120mm. We have made significant progress in setting up our manufacturing facility, having already acquired the necessary plant and machinery for our first manufacturing line. With machine trials and trial production slated to begin soon, we are on track to commence full-scale production. Furthermore, we have secured several Letters of Intent (LOIs) that are expected to be converted into orders once production commences, providing a strong foundation for our growth in this sector.

In a strategic initiative to strengthen and diversify our presence in the Indian engineering, aerospace, and defence market, Sunita Tools Limited Defence and Aerospace Vertical is embarking on manufacturing empty artillery shells. This marks the beginning of our journey, with plans to further explore the production of filled shells. Additionally, we have initiated research and development efforts to manufacture CCF fuses and PGK fuses, which are expected to revolutionize the usage patterns of these weapons. With these developments in place, we are poised for forward integration of our product offerings, particularly empty artillery shells, which will significantly transform our business landscape and position us as a major player in the defence sector.

We are strategically positioned to form partnerships with prominent defense and aerospace industry leaders, fostering collaborative innovation, knowledge sharing, and adherence to best practices. This expansion is anticipated to boost production capabilities, generate new employment opportunities, and drive regional economic growth. By leveraging our subsidiary for manufacturing operations, we are implementing a structured approach to ensure operational continuity and optimize efficiency, ultimately positioning Sunita Tools for long-term success.

Sunita Tools Limited Mould base, Defence and Aerospace Vertical has started to spread its wings across the globe, We have entered into marketing and business development tie up with agents in Saudi Arabia, Bahrain, Kuwait, UAE, USA and NATO countries to develop and explore these markets for our products and acquire new customers and orders.

Sunita Tools are expected to produce high-precision Mould bases and Engineering components across varied industries including aerospace, electronics, Brown goods, Household and automotive due to which market demand is expected to showcase a robust growth over the forecast period. As product design is becoming highly complex, the demand for high-quality products manufactured and supplied within stipulated time rapidly further increases generating strong demand with cutting edge technology such as CNC machines. High-precision and large size machine tools enabled efficient production, enhanced quality products, and reduced material wastage.

Industrial automation and investment in smart and integrated tools are being done in order to achieve greater speed and higher efficiency for several applications such as cutting, boring and drilling. Such factors are showing prominent impact on the demand. CNC machines are modern data-driven tools that offer efficient and precision materials processing across several industries such as automotive and metal fabrication. CNC machines provide enhanced production capacity and high-precision parts along with enhanced personnel safety resulting in the largest revenue share in the market.

The global economy registered a decline in growth from 3.2% in 2024 to an estimated 3.1% in 2023. Asia is expected to contribute significantly to global growth in 2024-25, despite the weaker-than-expected recovery in China, sustained weakness in USA, rising energy costs in Europe, weak global consumer sentiment due to the Ukraine-Russia war, and the Red Sea crisis resulting in increased logistics costs. A tightening monetary policy translated into increased policy rates and interest rates for new loans.

Growth in advanced economies is estimated to decline from 1.5 percent in 2023 to 1.4 percent in 2024 and theres no clear indication of further decline in 2025 as policy tightening takes effect. Emerging markets and developing countries are projected to maintain a 4.0% growth rate, contributing to global economic stability and progress. Global inflation is projected to decline steadily from 6.9 percent in 2023 to 5.8 percent in 2024 on account of a tighter monetary policy coupled with relatively lower international commodity prices. Core inflation is expected to decrease gradually, as inflation is not expected to return to its target until 2025 in most cases. The US Federal Reserve approved a much-anticipated interest rate hike that raising the benchmark borrowing costs to their highest in over 22 years.

The overall macro environment for India has been much better than many or most of the developed and the developing economies. There have been setbacks like continuation of regional conflicts with some parts of the world, and its consequent impacts on the respective currencies, interest rates, access to those markets and commodity prices which may have created some negative influences. However, as it seems today, the inherent strength of India economy coupled with the incentivization and promotion of industry by the Government has been a solid positive and the driver of the Indian economy and we expect the approach and the trend to continue.

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??The need for superior quality products in market. ??Global Market Expansion: Exploring new markets, partnerships, and export opportunities. ??Constant upgradation of the technology enables us to emerge as a leader in this fast-paced environment. ??Consolidation/acquisitions/restructuring opens out opportunities for the business. ??Creating connected data-driven factories for real-time monitoring and optimization. ??Implementing advanced quality control methods, such as AI-powered inspection and predictive analytics.

??Enhanced competition from both local and global players and the rise of disruptive business models in manufacturing industry and the emergence of new technology, the company runs the risk of obsolescence. ??A dependence on technology and third-party platforms exposes us to threats posed on the internet such as virus attacks leading to execution failures and disclosure of client information. ??Adapting to evolving industry standards, laws, and regulations. ??Risks of theft, counterfeiting, and unauthorized use of proprietary technologies. ??Intensifying competition from low-cost countries and emerging markets. ??Rapid technological advancements can render existing equipment and processes outdated.

Tooling, Moulds, Dies, Mouldbases, Jigs Fixtures is the "Astra & Shastra" (weapon) in the endeavour for India to become a formidable player in the field of global manufacturing.

This Toolings, Moulds, Mouldbases etc US$ 2.50 billion Industry supports the US$ 90 billion capital goods Industry of India which is the back bone of the manufacturing side of our US$ 3 trillion Indian Economy. India is posing as a creditable global alternative as manufacturing hub in its quest to breach US$ 5 billion GDP mark. To do this, tooling Industry would need to nearly double in 5 years.

Defence Market of the World is ever increasing, and Made in India for the World products are being promoted by the Indian Government, This market is supposedly over 500 billion on its own, As of today the empty artillery shells demand across the world is of over 30 million pieces and with manufacturing capacity across the globe of around 1.5 million only there is a huge demand to be catered to These same shells if supplied filled with explosives they again are a massive market and with artillery shells becoming into the most dependable ammunition for any military of the world and with mordern fuses like CCF and PGK these become very precision weapons and also open up a new market for shell manufacturers, Accordingly opening huge markets for company like ours.

The Company, like any other enterprise, is exposed to business risk which can be internal risks as well as external risks. Any unexpected changes in regulatory framework pertaining to fiscal benefits and other related issues can affect our operations and profitability. The key factor in determining a Companys capacity to the Company to take risks and manage them effectively and efficiently. However, the Company is well aware of the above risks and as part of business strategy has put in a mechanism to ensure that they are mitigated with timely action.

The Company has an elaborate Risk Management Framework, which is designed to enable risks to be identified, assessed and mitigated appropriately. The Board of Directors of the Company has entrusted to oversee implementation/ monitoring of Risk Management Plan and Policy; and continually obtaining reasonable assurance from management that all known and emerging risks have been identified and mitigated or managed. In the opinion of the Board of Directors, none of these risks affect and/or threaten the existence of the Company.

The Company has an Internal Control System, commensurate with the size, scale and complexity of operations. The comprehensive system enables efficient operations, optimal resource utilization, safeguard of assets and compliance with applicable laws and regulations. These control measures strengthen the Company and protect it from loss or unauthorized use of assets by way of adequate checks and balances. The Company authorizes records and reports all transactions.

The scope and authority of the Internal Audit function is well defined, and an independent firm of Chartered Accountants serves as the internal auditor to execute the internal audit function. The management and audit committee of the Board observe and then recommend corrective measures, based on such audits to improve operations.

The Total Income of the Company stood at 3014.83 lakhs for the year ended March 31, 2025 as against 2628.00 lakhs in the previous year. The Company made a net profit of 509.12 lakhs for the year ended March 31, 2025 as compared to the net profit of 484.99 lakhs in the previous year.

The Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Companys vision. Your Company appreciates the spirit of its dedicated employees.

*As of the time we print this Annual Report the company is total LONG TERM DEBT FREE Company.

This document contains statements about expected future events, financial and operating results of the businesses, which are forward-looking. By their nature, forward-looking statements require the businesses to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirely by the assumptions, qualifications and risk factors referred to in the managements discussion and analysis of Sunita Tools Limiteds Annual Report, FY2024-25