Talbros Engineering Ltd Management Discussions

Your directors have pleasure in presenting the management discussion and analysis report for the year ended 31st March, 2025.

(A) GLOBAL ECONOMY

In 2024, the Global Economy exhibited resilience in the face of several macroeconomics challenges. Growth held steady at 3.3.% despite the geopolitical disruption, such as tensions in the Middle East and the ongoing Russia-Ukraine conflict. The global economy recovered from the after-effects the Russia-Ukraine war, and a global energy crisis.

The outlook for the global economy has remained cautiously optimistic, with steady growth anticipated in the coming period as markets adapt and businesses embrace innovation and enhance flexibility. The countries around the world are expected to focus on medium-term fiscal consolidation and promote multilateral cooperation over the coming period. Such a strategy would aid in overcoming the current challenges and build a strong foundation for sustained economic growth and development.

(B) INDIAN ECONOMY

India sustained its growth momentum and retained its position among the fastest growing economies. The countrys enhanced physical infrastructure, digital and payment technologies advancements, improved ease of doing business, higher labour force participation, and better quality of fiscal spending have all contributed to Indias impressive growth potential during FY 202425. According to the National Statistics Organisations (NSO) second advance estimates, real GDP growth is 6.5% in FY 2024-25. This growth was driven by supportive policies of the Government of India, stable domestic demand, continued infrastructure investments and an uptick in both urban and rural consumption.

The outlook for the Indian Economy remains cautious yet optimistic. The country is expected to maintain its growth. India currently ranks among the worlds top five economies and is on track to become the third largest economy by FY 28.

(C) INDUSTRY STRUCTURE AND DEVELOPMENT

Talbros Engineering is engaged in manufacturing Rear Axle Shafts for leading automobile companies in India and foreign markets. The Indian automobile industry is one of the largest and fast growing sectors in the world. The Automobile sector significantly contributes to the nations economy and employment generation. Despite of various challenges, such as soaring crude oil prices, supply chain disruptions, the Indian Automobile Market is currently the fourth largest auto market globally and, on its track, to secure the third position by 2026. As per the press release issued by the Society of Indian Automobile Manufacturers (SIAM), the industry clocks a growth of around 7.3% in FY 2024-25 in domestic sales and exports rose by 19.2%, reflecting strong global demand. On the other side of Industry, the Passenger Vehicles, two wheelers and three wheelers industry registered a good growth momentum of 2%, 9.1% and 6.7% respectively in FY 2024-25; whereas the Indian Commercial Vehicle industry experienced de-growth of (-) 1.2% in FY 2024-25 compared to previous year; whereas export of commercial vehicles posted a good growth of 23% in FY 2024-25 as compared to previous year. As per Tractor and Mechanization Association (TMA) sales report suggest that tractor sales have dropped by 1.5% in 2024. The Automotive Mission Plan 2016-26 is a mutual initiative by Government of India and the Indian automotive industry to lay down the roadmap of the development of the industry. Going towards the Russia Ukraine war, it leads to increase metal cost viz a viz increasing production cost for automobile manufacturers.

(D) OPPORTUNITIES AND THREATS

All segments of the automobile industry are expected to continue with the growth momentum in FY 2025-26, building on the robust performance of the recent years due to stable macroeconomics conditions, proactive government policies, and infrastructure spending by the Government.

The Company is ready to cater the needs by upgrading its manufacturing facilities located at Faridabad and Hathin in Haryana. The Company has ordered numerous upgraded machines for its plants located in Faridabad. The Company is continuously striving on better and automated technology adoption for effective and efficient working and to walk out of the competition queue. The Company is working proactively with customers to diversify its existing product portfolio and enter into new market segments. The Company has successfully developed and started supplies of torsion bars, spindles, front axles, and camshafts.

Besides opportunities, the Company also faces threats which includes change in preference of customers from fuel to electric cars due to continuous increase in fuel prices and heavy traffic on roads. The competition is rising day by day and installation of excess capacity can escalate the risk of a price war in the event of an economic downturn.

(E) SEGMENT-WISE OR PRODUCT WISE PERFORMANCE

The Companys performance is primarily based on one product i.e. Rear Axle Shafts. The company continues to undertake steps for improvement and growth.

F) OUTLOOK

The Company does not foresee any major threats to its growth and market share in the coming years. The infrastructure need of the company has also been completed by investing in a new production site. The company does not foresee any technological obsolescence for its products as our product is primarily drive train.

(G) RISKS AND CONCERNS

The Company has its step wise risk management system which includes identification of risk at different levels including internal and external business risks. The risks so identified have been properly assessed and analysed at each level. After that, the corrective and preventive measures are taken by the Company to overcome the identified risks. The management review the risks every half year.

(H) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal control procedures commensurate with the size and structure of the Company. The company has also engaged the services of independent Chartered Accountant to carry out the internal audit and to identify the proper and adequate internal control system and sufficient measures are taken to update the internal control system. The implementation of SAP has resulted in better management and system development. The system also ensures that all transactions are appropriately authorised, recorded and reported.

(I) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Your Company has achieved a sales turnover of Rs. 44,609 Lakhs in this financial year ended on 31st March, 2025 as against Rs. 41,003 Lakhs in the previous financial year. Net profit after tax for this year stands at Rs. 2,020 Lakhs as against Rs. 1,789 Lakhs in previous year. Exports turnover (F.O.B. Value) for the year ended on 31st March, 2025 is Rs. 7,284 Lakhs as compared to Rs. 5,622 Lakhs in the previous financial year.

(J) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

As on March 31, 2025, the Company had 238 number of permanent employees at its manufacturing plants and administrative office located at Faridabad and Hathin.

The company considers the employee values and ensures proper encouragement both morally and financially to motivate them. The relationship between the management and employees is remarkable. Regular trainings and workshops have been conducted to motivate the employees for better understanding of upgraded technologies.

(K) KEY FINANCIAL RATIOS

S. No.	Ratios	31st March, 2025	31st March, 2024	Change in %
1	Debtors Turnover	6.84	7.20	-4.96%
2	Inventory Turnover	6.84	6.06	12.88%
3	Interest Coverage Ratio	4.23	4.49	-5.79%
4	Current Ratio	3.34	3.29	1.44%
5	Debt Equity Ratio	0.46	0.50	-8.67%
6	Operating Profit Margin (%)	11.16%	10.50%	6.28%
7	Net Profit Margin (%)	6.09%	5.87%	3.77%

There has been improvement in Debtors Turnover ratio on account of faster recovery of receivables.

(L) RETURN ON NET WORTH

The return on net worth for the current year ended on March 31, 2025 is 14.74% as compared to 15.68% during the fiscal year ended on March 31,2024.

For and on behalf of the Board
Sd/-	Sd/-
Vijay Kumar Sharma	Ankush Jindal
Executive Director	Executive Director
DIN:06394784	DIN: 03634690
R/o H. No. 309, Sector 3,	R/o H. No. 37, Sector 55
Faridabad, Haryana	Faridabad, Haryana
Place: Faridabad
Date: 07th August, 2025