Tamboli Industries Ltd Management Discussions

Management Discussion And Analysis

Global Economy Overview

The global economy in 2025 stands at a delicate crossroads, shaped by subdued growth, persistent inflation, and mounting uncertainty. After several years of overlapping shocks — ranging from the pandemic to geopolitical tensions and supply chain disruptions — recent stabilization has proven fragile.

Growth projections for 2025 have been revised downward by leading organisations like the IMF, with global output expected to expand by just 2.8%, a rate notably below the long-term historical average.

This slowdown is driven by a combination of factors.

The rise in trade barriers has reached levels not seen in a century, while governments in many advanced and emerging economies are rapidly reordering policy priorities. Such shifts have contributed to an environment of heightened uncertainty and increased volatility in financial markets. Escalating trade tensions, policy unpredictability, and the risk of further deterioration in international cooperation are weighing heavily on both short and medium-term growth prospects.

Inflation remains a central concern in the global outlook. Headline inflation is projected to decline to 4.5% in 2025, but the pace of disinflation is slower than previously anticipated. Advanced economies are expected to approach their inflation targets more rapidly, while emerging markets and developing economies continue to face stubborn price pressures. Renewed inflationary risks could disrupt the anticipated easing of monetary policy, with implications for fiscal positions and financial stability across regions.

Growth trajectories among major economies are increasingly divergent. The United States is expected to grow by only 1.8% in 2025, reflecting the impact of policy uncertainty and ongoing trade frictions. Chinas growth forecast has also been revised downward to 4.0%, as domestic demand softens and structural challenges persist. In contrast, India stands out as the fastest-growing major economy, with output projected to rise by 6.2%, buoyed by robust private consumption and resilient macroeconomic fundamentals.

Beyond cyclical factors, structural challenges are shaping the medium-term outlook. The rapidly aging population, particularly in advanced economies and some emerging markets, is shifting the demographic landscape from a source of growth to a potential drag. While improvements in health and longevity offer some mitigation, the transition from a demographic dividend to a demographic drag is expected to weigh on potential output and public finances.

The global policy environment remains marked by divergence and unpredictability. Governments are recalibrating their priorities, often scaling back international cooperation in favour of domestic considerations. This trend raises the risk of further fragmentation in the global economy, with potential consequences for trade, investment, and financial flows.

In summary, the world economy in 2025 is characterized by modest growth, persistent inflationary pressures, and heightened risks stemming from policy uncertainty and geopolitical tensions. While some economies, such as India, continue to outperform, the overall landscape is defined by caution and complexity, with both cyclical and structural forces shaping the path ahead.

Source: IMF World Economic Outlook 2025

Indian Economy Overview

Indias economic outlook for 2025 remains among the strongest globally, with the country projected to retain its position as the worlds fastest-growing major economy. According to the IMF & Government of India, Indias real GDP growth is expected to outpace both global and regional peers. This robust performance comes despite a complex international environment marked by heightened trade tensions, policy uncertainty, and a general slowdown in global economic activity.

The IMFs projection of 6.2% growth for 2025 is echoed by the Government of Indias own Economic Survey 2O25, which estimates real GDP growth at 6.4% for FY25. The consistency between international and domestic forecasts reflects the resilience of Indias macroeconomic fundamentals. The resilience is attributed to strong private consumption, particularly in rural areas, and a relatively low dependence on exports, which has helped buffer the economy from global shocks and the impact of new trade barriers.

Inflation dynamics have been favourable. Headline Consumer Price Index (CPI) inflation fell to 3.34% in March 2025, the lowest level since August 2019, driven by a sharp decline in food inflation and supported by prudent monetary policy from the Reserve Bank of India (RBI). The RBI has projected CPI inflation for FY2025- 26 at 4%, with quarterly forecasts ranging from 3.6% to 4.4%, and recently revised its inflation estimate for 2025-26 down to 3.7%. This moderation in inflation has provided the central bank with room to support growth while maintaining price stability, a balance highlighted in recent policy communications.

Sectoral performance has been broad-based. The Economic Survey 2025 notes that agriculture continues to operate above trend levels, the industrial sector has rebounded strongly post-pandemic, and the service sector has stabilized at pre-pandemic growth rates.

The service sectors contribution to gross value added has risen in FY25, reflecting ongoing transformation in the structure of the Indian economy. Meanwhile, government capital expenditure on infrastructure has surged, further supporting growth and job creation.

Job creation has kept pace with economic expansion. Between 2017-18 and 2021-22, India generated more than 80 million new employment opportunities, averaging over 20 million jobs annually. This employment growth has been instrumental in supporting domestic demand and social stability.

Foreign direct investment (FDI) and exports have also shown resilience. FDI increased by 18% YOY in FY25, reaching $55.6 billion, while overall exports (merchandise and services) grew 6% in the first nine months of FY25. The banking sector remains stable, with gross nonperforming assets (NPAs) dropping to a record low of 2.6% as of September 2024, and the insurance market expanding steadily.

In conclusion, Indias economic outlook for 2025 is characterized by strong growth, moderating inflation, robust domestic demand, and ongoing structural transformation. The countrys ability to sustain high growth in a challenging global environment reinforces its role as a key driver of global economic activity, and positioning the nation for continued progress in the years ahead.

Global Investment Casting Industry Overview

Executive Summary and Market Size

The global investment casting market entered 2025 with mixed momentum, registering total sales of $17.2 billion in 2024. Growth was primarily driven by high value-added applications in North America, Europe, and China, which together accounted for the vast majority of industry revenue. However, the market is characterized by divergent performance — both by application and geography — with high value-added segments flourishing while general industry and regional laggards constraining overall industry momentum.

Key Segments and Applications

High Value-Added Sectors

The high value-added segment — comprising aerospace, defence, and industrial gas turbines (IGTs) — dominated the market, generating $11.24 billion in 2024 (about 65% of total global sales). North America led with $6.16 billion, followed by Europe at $3.36 billion and China at $1.15 billion. These regions together represented 94% of global high value-added casting revenue. Demand in these sectors is closely tied to the recovery in aircraft production and sustained global military investment, particularly in the U.S. and NATO- aligned countries. Industrial gas turbine castings also saw moderate growth, with long-term prospects buoyed by the rise of AI-driven data centres and the need for efficient, dispatchable energy sources. However, risks persist, including supply chain bottlenecks for aircraft OEMs and uneven defence spending across Europe.

Automotive Castings

The automotive investment casting sector remained stable, with global sales of $1.70 billion in 2024. Europe led this segment with $468 million, followed by China ($410 million) and North America ($330 million), collectively accounting for 71% of global automotive casting sales. Demand remains robust for components such as turbo wheels, rocker arms, drivetrain hardware, among others. The ongoing transition to electric vehicles (EVs) and platform consolidation are reshaping casting requirements, with light-weighting initiatives reducing demand for some traditional parts but creating new opportunities for EV-related thermal and structural castings. In Europe, emissions targets are accelerating the shift toward electrification, while in China, domestic EV leaders are increasingly bringing casting production inhouse, pressuring smaller suppliers. North American OEMs are balancing internal combustion and electric vehicle production in response to evolving policies and tariffs.

General Industry Castings

General industry applications generated $4.27 billion globally in 2024, remaining steady YOY. China led with $2.02 billion, followed by North America ($850 million) and India ($450 million), together accounting for 76% of global general industry casting sales. This sector covers a wide range of products, including orthopaedic implants, oil and gas components, medical devices, transportation, pumps, valves, and non-aerospace military hardware. While North America saw moderate growth in oil & gas and medical implants, Chinas broader industrial slowdown dampened demand. India, in contrast, showed strong momentum due to domestic manufacturing and defence programs.

Regional Market Leaders and Dynamics

• North America: Led the global market with $7.34 billion in total casting sales (43% of the global market), with 84% of sales from high value-added applications such as aerospace, defence, and industrial gas turbines.

• Europe: Accounted for $4.21 billion, with a strong emphasis on high-value sectors.

• China: Recorded $3.58 billion, with 56% of sales from general industry castings, including medical, oil & gas, and non-aerospace military components.

North America, Europe and China drove nearly all net global growth in the industry. Elsewhere in Asia, including Japan, India, Taiwan, and South Korea, growth was modest and focused on niche sectors. The broader Asia-Pacific region, especially China and India, is expected to be a long-term growth engine due to accelerating industrialization, expanding domestic manufacturing, and increased investment in defence and energy infrastructure.

Recent Technological Advancements

The investment casting industry has experienced a wave of technological progress in recent years, fundamentally transforming production methods and capabilities of the sector:

O Artificial Intelligence (AI) Applications

AI-driven solutions are now widely adopted to streamline casting operations. By leveraging machine learning, manufacturers can predict potential defects, optimize process parameters, and enhance quality assurance, all while driving down production costs.

• Additive Manufacturing Integration

The fusion of 3D printing with traditional investment casting is reshaping the sector. This synergy enables rapid prototyping, the fabrication of highly intricate geometries, and significant reductions in lead times, offering manufacturers unprecedented design flexibility.

• Innovative Materials Development

Ongoing advancements in alloy and material science are broadening the scope of investment casting. New high-performance materials are unlocking opportunities in demanding industries such as aerospace and energy.

• Automation and Robotics

The adoption of automation and robotics throughout the casting workflow is leading to greater process consistency, lower manpower costs, and improved overall efficiency. Automated systems are now handling tasks ranging from pattern assembly to quality inspection.

• Advanced Simulation and Modelling

State-of-the-art computer modelling tools are being employed to fine-tune mould designs and casting parameters before physical production begins. These simulations minimize costly trial-and-error iterations, resulting in optimized yields and reduced waste.

Why Choose TCL for Precision Casting?

• Unmatched Technology & Engineering

TCL seamlessly blends over 50 years of engineering expertise with the latest technology adoption, ensuring precise casting solutions that deliver on every clients vision.

• Sustainability at the Core

Our casting processes are defined by sustainable & best industry practices with a commitment to minimal environmental impact, reduced GHG emissions, and ensuring compliance with CBAM standards.

• Reliable Consistency

Clients benefit from a legacy of dependable supply chain management and logistics, ensuring every order meets the highest standards — on time, every time. TCLs facilities are in proximity to major ports & airports.

• Assured Quality Certification

TCLs products undergo stringent certifications from recognized bodies, guaranteeing unmatched quality and compliance across all stages of production.

• Ethical Business Standards

We invest in long-term client relationships, operating with unwavering integrity and prioritizing your interests above short-term gains.

• End-to-End Engineering Support

Our team collaborates from concept to completion, combining engineering knowhow and robust data resources to ensure smooth, error-free project delivery.

• Dedicated Synergy-Driven Teams

TCLs customer-dedicated teams use a single-window communication approach, providing personalized service and exceeding partnership expectations.

• World-Class Manufacturing Arsenal

We leverage advanced robotic shelling, CNC, and VMC technologies for superior casting precision — all controlled with state-of-the-art CMM systems.

Industry Trends and Outlook

The investment casting industry is bifurcating: high- value sectors such as aerospace, defence, and IGTs are driving growth, while general industry applications are stagnating. Precision castings are increasingly important, especially in sectors requiring specialized components with tight tolerances. Leading producers are adopting digital transformation strategies, including advanced automation, 3D printing for pattern making, and digital quality control systems, to maintain competitiveness and meet the demands of high-performance applications.

Regional dynamics will continue to shape the industrys future. North America, Europe, and China remain dominant, but face rising competition and shifting supply chain dynamics. The Asia-Pacific region, particularly China and India, is poised for renewed growth as industrialization and infrastructure investment accelerate.

The investment casting industry in 2025 is defined by its concentration in high value-added applications and a geographic focus on North America, Europe, and China. While overall growth is healthy, it is increasingly concentrated in precision and high-performance sectors. The industry faces challenges from supply chain disruptions, shifting regional policies, and evolving automotive requirements, but also benefits from digital innovation and the global push for advanced manufacturing capabilities.

Source: INCAST Magazine - The Investment Casting Institute

Company Overview

Tamboli Industries Limited is the holding Company of Tamboli Castings Limited - a specialist in investment casting technology (Feinguss), delivering fully machined precision components for Pneumatic & Automation, Pumps, Valves & Turbo Parts, General Engineering, Automobile and Aerospace applications.

Manufacturing is the core business segment of the Company and contributes to 94% to the Total Income of the Company.

Simplification of Corporate Structure: Amalgamation of Step- Down Subsidiaries into Subsidiary

The Boards of Directors of Tamboli Profiles Private Limited and Tamboli Metalates Private Limited (both wholly-owned subsidiaries of Tamboli Castings Limited and step-down subsidiaries of Tamboli Industries Limited), as well as Tamboli Castings Limited (a wholly- owned subsidiary of Tamboli Industries Limited), at their respective meetings held on December 14, 2024, have considered and approved a Scheme of Amalgamation.

Under this scheme, Tamboli Profiles Private Limited and Tamboli Metaltech Private Limited (the "Transferor Companies") will be amalgamated with and into Tamboli Castings Limited (the "Transferee Company") on a going concern basis.

This amalgamation is aimed at simplifying the overall corporate structure of the group, thereby enabling greater operational efficiency and cost optimization.

Furthermore, we have received approval from the Regional Director, North Western Region, Ministry of Corporate Affairs (MCA), for the proposed scheme of amalgamation. This development was also communicated to the stock exchange on March 24, 2025.

ISRO Invited Tamboli Castings to Participate in IAC 2024

Wholly-Owned Subsidiary, Tamboli Castings was honoured to receive an invitation from the Indian Space Research Organisation (ISRO) to participate in the prestigious 75^th International Astronautical Congress (IAC), held from October 14-18, 2024, in Milan, Italy.

As one of only 20 Indian companies selected, Tamboli Castings was the sole representative from Indias casting and machining sector. ISRO led the delegation of Indian companies at this global congress.

Participation in IAC 2024 provided Tamboli Castings with a valuable platform to showcase its indigenous expertise in investment casting for the aerospace industry. ISROs invitation speaks volumes about Tamboli Castings capabilities and reputation within the sector. The Company remains committed to expanding its presence and contributing to advancements in the aerospace sector.

Tamboli Castings Receives CII National Best Practices Award

Wholly-Owned Subsidiary, Tamboli Castings has been recognized with the esteemed CII National Best Practices Award at the CII Smart Manufacturing Platform event, held in Delhi on May 29, 2025. This accolade underscores Tamboli Castings strong foundation, industry leadership, and strategic vision for leveraging digital innovation to drive future growth under the Industry 4.0 framework.

The award celebrates organizations that excel in adopting advanced technologies and innovative solutions to promote smart manufacturing. Tamboli Castings commitment to this vision is evident in its comprehensive implementation of Industry 4.0 best practices, including the integration of advanced robotics, state-of-the-art machinery, SCADA-enabled systems, and real-time data analytics. These initiatives have fostered a safer and more efficient workplace through automation, significantly enhancing operational excellence by optimizing production efficiency, reducing downtime, and achieving higher levels of precision.

In addition, TCLs robust sustainability initiatives — including smart energy management, waste reduction using IoT sensors, and environmentally conscious processes — demonstrate the Companys dedication to minimizing its carbon footprint and aligning growth with long-term sustainability goals. This recognition by CII reaffirms Tamboli Castings position as an industry leader in smart manufacturing and sustainable innovation.

Competitive Advantages

Tamboli Industries competitive edge is rooted in a distinctive combination of long-standing industry experience in investment casting and continuous innovation within the organisation. With ~5 decades of leadership experience, our management team brings exceptional expertise and insight to every aspect of operations, ensuring the highest standards of execution & quality in each project.

Our strategic focus on high-value, precision components has consistently delivered strong operational performance, particularly in terms of product realization and profitability margins. Embracing a global perspective, we embody the "Make in India, Make for the World" philosophy, establishing ourselves as a key player in international markets, deriving a significant 85% of our revenue from exports. Our reputation as a preferred supplier is reinforced by internationally recognized quality certifications, efficient production, and a proven track record of supply chain reliability.

Environmental stewardship is equally integral to our operations. We have implemented comprehensive sustainability strategies aimed at achieving carbon neutrality and optimizing resource utilization. An evidence to this commitment is the captive solar power plant which caters to a significant amount of our internal energy requirement, transitioning our energy needs to renewable sources.

Financially, Tamboli Industries continues to maintain robust health, characterized by a strong balance sheet, healthy liquidity, and consistent cash flows, enabling it to make sustained investments in its business development & expansion initiatives.

Our technical expertise spans a broad spectrum of materials, including various grades of steel, aluminium, and other non-ferrous alloys. We offer an extensive portfolio of castings, with individual components ranging from 10 grams to 80 kilograms, catering to a diverse array of industries and applications.

This powerful combination of deep industry knowledge, advanced manufacturing capabilities, global reach, environmental responsibility, financial stability, and technical versatility positions Tamboli Industries as a leader at the forefront of the investment casting industry.

Performance Review & Outlook

Tamboli Industries has exhibited notable resilience amid a challenging global economic environment, particularly within its principal export market, Europe.

Over the past two years, the Company has navigated a series of macroeconomic headwinds, including sluggish industrial production in Europe, ongoing geopolitical tensions, disruptions across supply chains, and most recently uncertainties arising from recent U.S. tariff policies. Despite these obstacles, Tamboli Industries has remained steadfast in its dedication to customer- centricity and operational excellence.

For the financial year, the Company reported a total income of ?70.3 crore, reflecting an 8% year-on-year decline compared to ?76.3 crore in FY24. Despite the dip in revenue, Tamboli Industries managed to safeguard its profitability, with EBITDA increasing by 5% — from ?15.2 crore in FY24 to ?15.9 crore in FY25. This improvement resulted in EBITDA margins increasing from 20% to 23%. The primary factor affecting overall financial performance was the pronounced slowdown in economic activity across Europe, a trend that is also persisting into the current fiscal year. Nevertheless, the Companys underlying strengths remain robust, providing a solid foundation for future growth.

In response to these market dynamics, Tamboli Industries has recalibrated its growth strategies and is witnessing meaningful progress across several strategic initiatives:

• Customer Project Advancements: Several customer projects are moving forward, with many transitioning to the pre-commercial supply phase and others reaching full commercial supply. The financial benefits from these initiatives are largely expected to materialize in the coming periods.

• Railways and Locomotive Sector: The

Company has strengthened its position as a key supply chain partner to a major global OEM in the railway and locomotive sector, now boasting a comprehensive portfolio of approved components for future commercial supplies. Tier-1 supplies have also commenced for the Amrit Bharat Express train project for Indian Railways, with certain parts in the prototype stage and others already being supplied in bulk. Although the shift from prototyping to commercial-scale production has been slower than initially projected, most customer approvals have been secured, and further scaling is anticipated as customers ramp up their operations.

• Opportunities in the MENA Region: The Middle East and North Africa (MENA) region continues to present attractive prospects, as industry players accelerate carbon reduction efforts and invest

in sustainable energy generation facilities. This has driven healthy growth in the Companys pumps and valves components segment, which will benefit from sticky demand and improving business visibility moving forward.

• Automotive Segment Recovery: Within the automotive sector, the Company has resumed supplies to a major global client in India for ongoing projects while also serving global elite clients abroad, marking a positive step toward reestablishing its presence in this important market segment.

• Domestic Market Expansion: To partly counter export-related challenges, Tamboli is strengthening its focus on the Indian market by actively pursuing new customer partnerships and enhancing its visibility at local trade exhibitions.

Overall, while near-term challenges persist, Tamboli Industries proactive approach and strategic initiatives will position it well for long-term growth and value creation.

FY25 Financial Highlights

Some of the key financial metrics for the year ended March 31^st 2025 are graphically displayed below:

Financial Ratios

Ratios	FY24	FY25	% Change	Reason for variance, if more than 25%
Current Ratio (in times)	27.00	12.92	(52.13)	Decrease in current assets
Debt-Equity Ratio (in times)	-	-	-	Not applicable
Debt Service Coverage Ratio (in times)	-	-	-	Not applicable
Return on Equity Ratio (%)	8.43	8.64	2.50
Inventory Turnover Ratio (No. of days)	-	-	-	Not applicable
Trade Receivables Turnover Ratio (No. of days)	-	-	-	Not applicable
Trade Payables Turnover Ratio (No. of days)	18.48	16.64	(9.96)
Net Capital Turnover Ratio (in times)	0.04	0.10	183.99	Decrease in current assets
Net Profit Ratio (%)	50.96	53.87	5.70
Return on Capital Employed (%)	9.61	9.54	(0.74)
Return on Investments	43.83	43.83	-

Ongoing Commitment to Sustainability

Tamboli Industries continues to advance its sustainability agenda, highlighted by the successful commissioning of a 1 MW solar power plant in the last financial year.

This facility not only supports the Companys backward integration through captive power consumption but also represents a significant milestone in its journey toward environmental responsibility. Additional initiatives include the adoption of smart energy management systems, waste reduction through IoT-enabled sensors, and the implementation of eco-conscious manufacturing processes — all underscoring the Companys commitment to minimizing its carbon footprint and integrating sustainability into its long-term business strategy.

By prioritizing renewable energy, energy efficiency, and environmentally conscious production methods, Tamboli Industries is aligning its operations with national & International sustainability objectives and supporting the transition to green energy. These efforts further solidify Tambolis reputation as a progressive leader in sustainable manufacturing, as evidenced by the recent CII National Best Practices Award, recognising the Companys efforts in this domain.

Internal Control Systems and Their Effectiveness

The Company has a system of Internal Control which is reviewed by the Management. The Management evaluates the functioning and quality of the internal controls and provides assurance through periodical reporting. The Management reviews the Internal Audit Reports and the adequacy of internal control on a regular basis which is also minimizing any possible risk in the operations of the Company.

Human Resources

Tamboli Industries firmly believes that its employees are its greatest asset, essential for sustaining business operations and driving future growth. To attract and retain high-calibre talent, the Company has launched a range of initiatives aimed at strengthening its employer brand and attracting good talent. These efforts span from comprehensive employee benefits to advanced training and development programs tailored for middle and senior management.

One such example is, all 400+ employees at the Companys facility receive complimentary lunch meals, reflecting a strong commitment to employee welfare. Additionally, middle and senior managers benefit from specialized learning and development programs, including managerial training led by professional business coaches. Through these strategic initiatives, Tamboli Industries strives to foster a work environment that not only attracts top talent but also supports their professional development and long-term engagement with the Companys mission.

Cautionary Statement

This Management Discussion and Analysis contains statements regarding the Companys objectives, projections, estimates, and expectations that may be considered "forward-looking statements" under applicable securities laws and regulations. Actual outcomes may differ materially from those anticipated due to various factors. Key influences include, but are not limited to, economic conditions affecting demand and pricing in both domestic and international markets, changes in government regulations, tax laws, and other relevant statutes, as well as unforeseen incidental factors.