Tirupati Forge Ltd Management Discussions

FY25 Financial Performance of Tirupati Forge Ltd

In FY25, Tirupati Forge Ltd delivered a resilient performance despite facing a complex operating environment marked by external headwinds and internal adjustments.

Revenue growth remained muted, impacted by a confluence of factors including declining steel prices, persistent uncertainty surrounding U.S. tariffs, and subdued demand in the automotive sector, however the companys improved product mix and operational efficiencies helped cushion the impact. Ongoing uncertainty around U.S. tariffs also continued to weigh on export volumes.

Profitability remained stable, though it was impacted by drop in sales of high- margin products, particularly high-value fittings. Additionally, margins on flanges and pipe fittings exported by the company were compressed due to a reduction in unit prices, despite a 41% increase in volume. Similarly, while the volume of scrap sales rose by 51 %, a 13% decrease in sale price impacted overall contribution.

Cost-side pressures also played a role. The company consumed opening raw material inventories procured at higher prices in the previous year, impacting gross margins in the current year. Profitability was impacted by an increase in depreciation expenses stemming from the recent capital investments aimed at scaling capacity and improving manufacturing capabilities. An increase in interest cost on working capital loans and lease liabilities due to machine purchases under finance lease arrangements, further weighed on net profitability.

Despite these pressures, the company maintained healthy EBITDA margins, reflecting disciplined cost management and an increasing contribution from value-added product segments.

Nonetheless, Tirupati Forge maintained focus on operational efficiency and strategic investments. Overall, FY25 was a year of consolidation, with the company laying a strong foundation for long-term sustainable growth through product diversification, capacity enhancements, and entry into higher-potential markets.

The Company engages in the manufacture of forging components for Renewables, Automotive, Aerospace, Mining, Engineering and Agriculture sectors in the industrials vertical etc. The Industrial segment is expected to witness mega opportunities, in the renewable energy space driven by the global urgency to combat climate change.

Tirupati Forge Limited FY2024-25

Tirupati Forge Limited (TFL), a known player in precision forging, is in the midst of a strategic transformation aimed at ensuring long-term resilience and growth amid global economic uncertainties and shifting geopolitical dynamics. The Company has recognized the need to diversify beyond traditional forging to reduce reliance on export markets, especially given ongoing tariff-related disruptions in key geographies.

Accordingly, TFL has embarked on two significant verticals:

• A foray into defence manufacturing, a sector aligned with national priorities and supported by robust domestic and global demand.

• Investment in renewable energy infrastructure, enhancing cost competitiveness and sustainability.

These initiatives position TFL for strong, sustainable, and capital-efficient growth.

1. Defence Manufacturing: Strategic Entry into a High-Growth Sector

1.1 Project Overview

TFL is setting up a state-of-the-art facility dedicated to the manufacturing of 155mm High-Explosive (HE) and High-Explosive Base Bleed (HE-BB) shell bodies, key components of modern artillery systems. These shells are integral to long-range firepower solutions used in howitzers and field artillery systems, such as Indias Dhanush and the U.S. M777.

1.2 Investment and Financial Metrics

Tirupati Forge Limited is making a capital investment of Rs.670 million towards the establishment of its defence manufacturing facility. This substantial commitment reflects the Companys long-term confidence in the defence sectors potential and its strategic importance. The project is expected to deliver a high asset turnover ratio of approximately four times, showcasing strong capital efficiency.

In terms of profitability, the defence vertical is projected to achieve EBITDA margins upwards of 25%, which is a significant improvement over TFLs current average margin of 14.4%. This expansion in margins will be driven by value- added production, greater pricing power, and scale efficiencies. To support this expansion, TFL has already secured external funding. These funds will be strategically deployed to build infrastructure, acquire advanced machinery, and ensure regulatory compliance.

1.3 Facility Specifications

The upcoming defence manufacturing facility will be designed as a modern, high-capacity plant tailored for the production of 155mm shell bodies. At full scale, the facility is planned to manufacture 125,000 shell bodies annually, translating to approximately 10,000 metric tonnes of production per year. The design has been conceptualized with scalability in mind, enabling the Company to increase its production capacity to 150,000 shells per year in the future based on demand dynamics and customer acquisition.

The plant will incorporate cutting-edge infrastructure, including advanced CNC machining lines to ensure dimensional precision, heat treatment systems to meet stringent ballistic strength requirements, and in-house metallurgical testing laboratories for consistent quality control. Importantly, the facility will adhere to international military manufacturing standards, including NATOs Standardization Agreements (STANAGs), ensuring eligibility for both domestic and export defence contracts.

The integrated setup will provide Tirupati Forge with the capabilities needed to meet the exacting specifications of military customers, while also enabling rapid production ramp-ups. These investments are central to TFLs ambition of becoming a key supplier to Indias Ministry of Defence and global OEMs in the artillery systems space.

1.4 Regulatory Compliance

To begin commercial production of defence-grade artillery components, Tirupati Forge Limited has initiated the process of obtaining licenses from Ministry of Home Affairs (MHA) and the Ministry of Defence (MoD).

The facility is targeting initial trial production runs by March 2026. These trial runs will be crucial for validating production systems, calibrating machinery, and ensuring that output meets the stringent technical and ballistic standards expected by defence procurement agencies. Following the successful completion of trials, commercial-scale production is expected to commence by the end of the second quarter of FY26. This timeline has been developed to align with both regulatory processes and procurement cycles of key customers in India and abroad.

1.5 Target Markets

Tirupati Forges defence manufacturing initiative is strategically positioned to serve both domestic and international markets. On the domestic front, the Company is targeting long-term supply relationships with the Indian Armed Forces, the Ministry of Defence, and key public sector undertakings such as

the Ordnance Factory Board (OFB) and Bharat Dynamics Limited (BDL). These organizations are at the forefront of Indias defence modernization efforts and represent a reliable demand base for high-quality ammunition components.

Internationally, the Company aims to leverage the rising demand for artillery systems across Southeast Asia, the Middle East, and parts of Africa—regions that are investing heavily in defence modernization and capability enhancement. With Indias Defence Offset Policy and recent policy changes allowing 100% FDI in defence manufacturing under the automatic route , Tirupati Forge is also well-placed to attract global OEM partnerships and cross-border opportunities. Additionally, the possibility of engaging in Government-to-Government (G2G) agreements offers further avenues for sustainable export growth.

2. Solar Initiative

As part of its commitment to environmental sustainability and operational efficiency, Tirupati Forge Limited (TFL) has made a strategic investment in a 4.8 MW solar power project—an important milestone in its transition towards green energy. Commissioned on May 16, 2025, the solar plant is now fully operational and supplying clean, renewable power for captive use across TFLs manufacturing units.

The installation is expected to generate approximately 8.5 million units of electricity annually. This is projected to deliver annual cost savings of Rs.25 million in its current configuration. Once the upcoming defence manufacturing facility is integrated into the solar power grid, the Company anticipates an additional Rs.25 million in savings, bringing total annual savings to Rs.50 million. Given that energy is a key cost driver in the forging industry, this initiative will have a direct, material impact on TFLs operating margins and bottom-line profitability.

Spanning 18 acres, the solar project has been developed using cutting-edge technologies including Top Cone Technology, framed dual glass bifacial modules, and TP-TSAT (Tilted Single Axis Tracker MMS) systems. These features are engineered to optimize solar exposure, improve energy yield, and ensure the systems long-term durability and performance.

2.1 Financial and Strategic Advantages

1. Cost Efficiency:

The Company currently incurs an electricity cost of Rs.10.50 per unit. The solar plant is expected to reduce this to approximately Rs.3.50 per unit—translating to a net saving of Rs.7 per unit, thereby significantly improving the Companys cost structure and profit margins.

2. Surplus Energy and Revenue Generation:

With an estimated annual generation capacity of 85 lakh units, well above the Companys current consumption of 6 lakh units, the surplus electricity can be sold to the grid. This opens up an opportunity to generate additional annual revenue of up to Rs.5 crore.

3. Government Incentives and Tax Efficiency:

The project qualifies for government subsidies, interest benefits on project financing, and accelerated depreciation under Indian tax laws. These incentives enhance the projects financial viability and strengthen TFLs cash flows and overall profitability.

The solar initiative is expected to deliver significant strategic benefits to Tirupati Forge Limited. In its current phase, the project is already generating direct annual savings of Rs.25 million by reducing reliance on high-cost grid electricity. Upon integration with the upcoming defence manufacturing facility, this figure is projected to double, resulting in total annual savings of Rs.50 million. This reduction in power expenditure is particularly impactful given the high electricity tariffs in Gujarat, where energy constitutes a substantial portion of manufacturing costs. Additionally, the project enhances TFLs sustainability credentials by contributing meaningfully to carbon footprint reduction, aligning with national renewable energy goals and international ESG expectations. The initiative has been executed and is being managed by a highly capable team of engineers, under the guidance of an experienced and forward-looking management team, further ensuring that the financial and operational objectives of the project are met effectively and efficiently.

Beyond the financial upside, this initiative aligns with TFLs broader environmental, social, and governance (ESG) strategy. By replacing conventional power with clean energy, the Company is significantly reducing its carbon footprint and reinforcing its position as a sustainability-focused

manufacturer. This approach also appeals to ESG-conscious investors and global customers, enhancing the Companys competitiveness in both domestic and international markets.

Strategic Vision and Long-Term Growth Outlook

Tirupati Forge Limited is undergoing a fundamental transformation from a precision forging company to a diversified manufacturing enterprise with strong roots in defence and sustainability. This strategic evolution is a proactive response to the headwinds impacting global trade, including shitting geopolitical dynamics and tariff regimes that have challenged export-reliant industries like forging.

The Companys reorientation toward the defence sector is based on a clear assessment of long-term market potential, strong policy support, and Indias urgent need to enhance its domestic manufacturing capabilities in critical sectors. TFLs new defence manufacturing facility, once fully operational, will position the Company as a key indigenous supplier of advanced artillery components, thereby aligning with the Indian governments vision of selfreliance under the "Make in India" and "Atmanirbhar Bharat" initiatives.

This strategic pivot is backed by external funding and is being executed by a team of highly trained engineers and experienced management professionals. TFL is investing not only in physical infrastructure but also in technology, regulatory readiness, and customer acquisition strategies— ensuring that its entry into defence manufacturing is comprehensive and future-proof.

Furthermore, the integration of renewable energy through the solar project enhances the Companys long-term sustainability profile. As global supply chains and procurement frameworks increasingly favour green and selfreliant suppliers, TFLs dual focus on defence and energy efficiency places it at the intersection of two high-growth, policy-supported sectors.

Looking ahead, the Company envisions itself as a multi-sector manufacturing leader that leverages its core competencies in metallurgy, precision engineering, and quality control to tap into defence, clean energy, and industrial supply chains, both in India and globally.

Conclusion

Tirupati Forge Limiteds ongoing transformation marks a decisive inflection point in its corporate journey. With Rs.670 allocated for a cutting-edge defence manufacturing facility and a 4.8 MW solar power plant already commissioned, the Company is making bold moves to future-proof its operations and unlock new value streams.

Its foray into the production of 155mm artillery shell bodies is timely and strategically significant, positioning TFL as a high-potential player in the global defence supply chain. This expansion, supported by robust capital efficiency, high expected EBITDA margins, and long-term policy tailwinds, is expected to not only de-risk the business model but also drive sustainable, high-margin growth.

Simultaneously, TFLs investment in solar infrastructure underscores its commitment to environmental stewardship and cost efficiency. The dual impact of cost savings and reduced emissions supports both profitability and ESG alignment.

Through calculated diversification, regulatory preparedness, and technological adoption, Tirupati Forge Limited is well-positioned to become a resilient, forward-looking enterprise with a strategic footprint in Indias defence industrial base and beyond.

Risk Factors and Mitigation

While the Company is optimistic about its strategic direction, it acknowledges the following key risks:

Regulatory Risks:

Obtaining licenses under the Arms Act involves coordination with multiple government agencies and can be time-consuming. Any delays in securing these licenses could postpone commercial production timelines. TFL has retained specialized legal and regulatory consultants to streamline the application process and ensure early compliance.

Execution Risks:

The successful commissioning of the new defence facility and integration of advanced CNC lines depend on timely procurement, construction, and operational readiness. To mitigate this, the Company has created a dedicated project management office (PMO) to monitor all implementation milestones.

Market Risks:

The defence sector is subject to geopolitical fluctuations, procurement policy changes, and long decision-making cycles. To mitigate this, TFL is targeting both government contracts and global OEM partnerships under Indias Defence Offset Policy, ensuring demand diversification.

Financial Risks:

While external funding has been secured, cost escalations or unforeseen capex may impact margins. Sustained investments in capacity expansion, technology upgrades, and R&D are essential for the Companys long-term growth. In a high-risk global environment marked by geopolitical tensions, inflationary pressures, and supply chain uncertainties timely access to affordable capital is crucial. The Company has maintained a healthy liquidity position through prudent capital allocation and efficient working capital management. It also continues to emphasize cost control, particularly in fixed overheads, to ensure financial flexibility.

Industry Risk:

A global economic downturn or region-specific disruptions may negatively impact market demand and the Companys revenue streams. To mitigate this, Tirupati Forge Limited has strategically diversified its business across multiple industries including Automotive, Defense, Oil & Gas, Mining, Construction, Power, Aerospace, and E-mobility. Additionally, the Company has expanded its geographic footprint, operating in five countries, thereby reducing dependence on any single market. This broad industry and geographic diversification minimizes exposure to localized economic shocks. The Company continues to explore new markets and customer segments to further strengthen its risk profile.

Foreign Exchange Risk:

Given the Companys significant exposure to international markets through exports, fluctuations in foreign exchange rates pose a risk to profitability. To safeguard against this, the Company employs hedging strategies and enters into various foreign exchange contracts, thereby reducing the impact of adverse currency movements on its financial performance.

Raw Material Supply Constraint Risk:

Availability and cost of key raw materials such as steel, aluminum, and energy are critical to uninterrupted production and profitability. Tirupati Forge ensures a steady and cost-effective supply of steel—its most essential raw material—by partnering with multiple vendors. This multi-supplier approach mitigates the risk of supply chain disruption and ensures competitive pricing.

Technology Risk:

The forging and automotive industries are undergoing rapid technological transformation. Failure to adopt new technologies could compromise the Companys competitive edge. Tirupati Forge is proactively investing in automation and advanced technologies to enhance operational efficiency.

reduce costs, and stay ahead of industry trends. These investments position the Company to meet evolving customer requirements and remain future- ready.

Loss of Talent Risk:

Attracting, developing, and retaining skilled talent is vital to the Companys sustained success. High attrition or loss of key personnel could disrupt operations. Tirupati Forge has implemented progressive HR policies that promote employee well-being, engagement, and performance. The Company fosters a positive work culture and offers growth opportunities across all levels. These initiatives have resulted in a stable workforce with low attrition. Additionally, the Company actively recruits new talent and rewards high performance.

Anti-Dumping / Countervailing Duty (AD/CVD) Risk:

Tirupati Forge exports Carbon Steel Forged Flanges to the United States under the Importer of Record model. Any future imposition or increase in AD/CVD duties may lead to higher landed costs, impacting margins. To mitigate this, the Company aims to maintain healthy profit margins in the flange business, ensuring it can absorb such potential duties without incurring losses.

Global Forging Industry Outlook

The global forging industry is poised for a steady rebound and transformation in 2025 and the years ahead, driven by strong demand from key end-use sectors such as automotive, aerospace, defence, construction, oil & gas, and renewable energy. Following disruptions during the pandemic and subsequent supply chain recalibrations, the industry is now benefitting from global re-industrialization, increasing infrastructure investments, and localization of supply chains.

Market Size and Growth Trajectory

According to industry reports and market analysts, the global forging market was valued at approximately USD 83-85 billion in 2023 and is projected to grow at a CAGR of 4.5% to 5.5% over the next five years. By 2030, the market is expected to exceed USD 120 billion, fueled by both volume growth and value-added innovation.

Key contributors to growth include:

• Automotive sector recovery, especially with renewed momentum in electric vehicle (EV) production and lightweighting initiatives.

• Defense and aerospace investments, particularly in the US, Europe, India, and China.

• Energy infrastructure, including renewable energy projects which demand precision-forged components for wind turbines, solar infrastructure, and transmission systems.

• Emerging markets industrialization, including rising infrastructure and manufacturing capex in Asia-Pacific, Latin America, and parts of Africa.

Technological Advancements and Innovation

The forging industry is undergoing significant modernization:

• Automation and robotics are being increasingly integrated into forging processes to reduce labor costs, improve precision, and boost throughput.

• Closed-die and precision forging techniques are gaining prominence, especially for aerospace and high-performance automotive components.

• The adoption of smart forging technologies—incorporating loT sensors, Al-based predictive maintenance, and digital twins—is improving operational efficiency and reducing downtimes.

• Green forging is on the rise, with manufacturers investing in electric induction furnaces, low-emission processes, and renewable energy for captive use to align with ESG norms and carbon neutrality goals.

Key Regional Trends

• China remains the largest forging producer globally, driven by its dominance in automotive and heavy machinery sectors. However, rising labor and compliance costs are pushing companies to adopt more automated and sustainable practices.

• India is emerging as a major global forging hub, supported by strong domestic demand, skilled labor, government incentives (e.g., PLI schemes), and a rapidly modernizing manufacturing ecosystem.

• Europe is seeing increased consolidation and technological upgrades, especially in Germany and Italy, where firms are focusing on high- performance forgings and forging-as-a-service models.

• North America continues to invest in reshoring and defence-sector- driven forging applications, with emphasis on quality, traceability, and cybersecurity in industrial manufacturing.

Challenges

Despite growth potential, the industry faces several headwinds:

• Volatile raw material prices, particularly alloy steel, aluminium, and specialty metals.

• Energy costs, especially in high-power-cost regions, continue to affect margins.

• Labor shortages in developed markets, particularly for skilled metallurgists and forge technicians.

• Stringent environmental regulations, especially in Europe and North America, requiring investments in cleaner technologies and waste heat recovery.

Outlook

Overall, the global forging industry in 2025 is on a path of cautious optimism, balancing volume recovery, value-chain upgradation, and green transition. Companies that invest in technological modernization, product specialization, and sustainable practices are expected to outperform peers and gain greater traction among global OEMs and Tier-1 customers.

Global Economic Overview (2023-2025)

The global economy in 2023-24 operated within a challenging yet evolving landscape shaped by a confluence of persistent risks and emerging opportunities. Geopolitical tensions, particularly the prolonged Russia- Ukraine conflict, alongside high inflation, elevated commodity prices, and weakening household purchasing power, posed significant obstacles to sustained growth. Global supply chains remained under pressure due to rising geopolitical fragmentation and increasing trade restrictions, further dampening productivity and trade efficiency.

Despite these headwinds, the global economy began to exhibit signs of resilience toward the latter part of the year. Supply chain constraints gradually eased, and a broad-based decline in inflation signaled the early stages of macroeconomic stabilization. Central banks, particularly in advanced economies like the United States and the Eurozone, responded with aggressive monetary tightening to rein in inflation. While these measures tempered short-term growth, they contributed to restoring long-term price stability. In contrast, emerging markets and developing economies (EMDEs) demonstrated relatively stronger performance, supported by sound

macroeconomic management, ongoing infrastructure investments, and steady employment gains.

According to the International Monetary Funds (IMF) World Economic Outlook (April 2025), advanced economies saw a decline in real GDP growth from 2.6% in 2022 to 1.6% in 2023, whereas EMDEs experienced a slight improvement from 4.1% to 4.3% during the same period. Looking ahead, global economic growth is projected to remain steady at 3.2% annually in both 2024 and 2025. This includes a gradual recovery in advanced economies, where growth is expected to inch up to 1.7% in 2024 and 1.8% in 2025. Conversely, EMDEs are anticipated to experience a marginal slowdown, with growth moderating to 4.2% across both years, largely due to tighter global financial conditions and subdued external demand.

On the inflation front, the IMF projects that global headline inflation, which averaged 6.8% in 2023, will decline to 5.9% in 2024 and further to 4.5% by the end of 2025. While disinflation is expected across all regions, advanced economies are likely to experience a quicker reduction due to more agile policy responses and stabilizing commodity markets.

Overall, while the global recovery remains uneven and modest, the outlook for 2024 and beyond reflects cautious optimism. Improved financial conditions, collaborative policy frameworks, and a gradual return to macroeconomic stability are expected to support a more balanced and sustainable growth trajectory across both advanced and developing economies.

Source - IMF Worl Economic Outlook April 2025

Indias Economic Performance and Outlook (FY2023-24)

Indias economy demonstrated exceptional resilience and strong momentum throughout FY2023-24, outperforming all major global economies. According to the International Monetary Fund (IMF), Indias GDP growth for the year is estimated between 7.6% and 7.8%—a notable upward revision from its earlier projection of 6.7%. This robust performance elevated the Indian economy to an estimated size of USD 3.5 trillion, further solidifying its position as the fifth-largest economy globally.

The sharp uptick in growth was supported by sound macroeconomic fundamentals, improved balance sheets across financial institutions, a moderating inflation trajectory, and a strengthening external sector. These factors collectively contributed to Indias economic and financial ecosystem remaining resilient amidst global uncertainty.

The industrial and manufacturing sectors, in particular, witnessed significant gains, as global corporations actively diversified their supply chains and turned to India as a strategic production hub. The Governments continued emphasis on high-impact capital expenditure, especially in infrastructure, alongside progressive structural reforms, further bolstered investor confidence. Strong GST collections, rising automobile sales, healthy consumer sentiment, and double-digit growth in bank credit underscored the strength of domestic demand.

The IMF also acknowledged Indias strides in digital public infrastructure and financial formalization, citing these as crucial growth enablers over the medium term. Moreover, Indias G20 presidency in 2023 showcased its growing geopolitical influence and its ability to drive global consensus on key development and cooperation issues.

On the inflation front, India recorded a retail inflation rate of 3.16% in April 2025—its lowest level since July 2019—primarily due to declining food and vegetable prices. In response, the Reserve Bank of Indias Monetary Policy Committee {MFC} retained the policy repo rate at 6.5%, balancing its progrowth stance with the goal of maintaining inflation within the 4% ?2% target band. The central bank reiterated its commitment to an accommodative policy outlook, supported by continued disinflationary trends and macroeconomic stability.

Despite external trade challenges—particularly disruptions in the Red Sea shipping route—Indias merchandise exports declined only modestly, falling by 2.4% year-on-year. Exports to the United States dipped by 1%, while shipments to Europe recorded a marginal increase of 1.47%. Nevertheless, the country posted record-breaking total merchandise and services exports of USD 820.93 billion in FY2023-24, a 5.5% increase over the previous year, reflecting resilience in export performance.

Looking ahead, the IMF projects Indias GDP growth at 6.2% for FY2024-25 and 6.3% for FY2025-26, maintaining its status as the fastest-growing major

economy. The RBI offers an even more optimistic outlook, estimating FY2024- 25 growth at 7.0%, fueled by strong domestic consumption, stable monetary policy, and continued government-led capital investment. Assuming sustained reform momentum and a supportive global environment, India is well-positioned to emerge as the worlds third-largest economy in the near future.

Sources: IMF World Economic Outlook (April 2025); Reserve Bank of India (RBI); Ministry of Statistics and Programme Implementation (MoSPI), Government of India.

Internal Control Systems

Tirupati Forge Limited (TFL) has established a robust internal control framework, including comprehensive internal financial controls, to ensure that business operations are conducted efficiently, accurately, and securely. These controls are designed to provide reasonable assurance regarding the integrity of financial reporting, safeguarding of assets, and adherence to internal policies and applicable regulations.

The Company follows a structured internal audit process covering all critical business functions. These audits assess the adequacy and effectiveness of internal controls and are conducted by an independent Internal Auditor. Audit findings are reviewed periodically by the Management and the Audit Committee, which oversees the continuous strengthening and alignment of the control mechanisms with evolving business needs.

The internal control systems also aim to prevent unauthorized use or disposal of assets, ensure the accuracy and completeness of accounting records, and enable timely preparation of reliable financial information. Regular reviews, process enhancements, and the implementation of accounting standards ensure that internal controls remain effective and relevant in a dynamic business environment.

E. Human Resources

At Tirupati Forge, our people are the foundation of our success. We are committed to attracting and retaining top talent, fostering a culture of learning and development, maintaining a high-performance work environment, and ensuring the health, safety, and well-being of every employee. Our focus on strong industrial relations, employee welfare, and inclusivity is integral to our long-term growth strategy.

Employee Health, Safety, and Welfare

Employee safety remains a top priority. We have embedded a culture of safety where every individual is responsible for maintaining workplace safety. A dedicated safety team actively implements awareness initiatives, conducts training programs, and ensures compliance with safety protocols.

Key Initiatives:

1. Safe Workplace Environment

TFL enforced a strict ‘no visitor policy during sensitive periods to protect employees and maintain hygiene standards. Visitor access was allowed only under exceptional circumstances and with full safety precautions. Employee transport and shop floor areas were regularly disinfected to uphold cleanliness and hygiene standards.

2. Supportive Work Culture

Tirupati Forge has always nurtured a culture akin to an extended family. During challenging times, this culture proved invaluable, offering emotional and practical support to employees, reinforcing our deep- rooted ethos of solidarity and care.

3. Learning and Development

Continuous learning is a strategic priority. The Company has expanded its training initiatives, including leadership development and technical upskilling. These programs are designed to strengthen capabilities, encourage innovation, and prepare our workforce tor future growth opportunities.

4. Diversity and Inclusion

We recognize that a diverse workforce brings valuable perspectives, enriching our organizations decision-making and innovation capacity. Efforts are ongoing to enhance diversity and foster an inclusive work environment where differences are respected and collaboration is encouraged.

5. Transparent Communication

Open and honest communication is essential to building trust and alignment. TFL maintains clear communication channels at all organizational levels, ensuring employees are informed, heard, and engaged in key developments. This transparency cultivates a culture of trust and shared purpose.

F. FINANCIAL REVIEW:

• Analysis of Standalone Profit and Loss Statement:

	F.Y. 2024-25	F.Y. 2023-24
1. Revenue from Operations	11498.30	11,000.15
2. Other Income	131.34	92.44
3. Total Revenue	11629.64	11,092.59
4. Cost of Materials Consumed	6,148 28	6,530.81
5. Purchase of traded goods	71661	749.65
6. (Increase) in inventories of finished goods, work-inprogress and scrap	(241.38)	(462.95)
7. Employees Benefit Expenses	632.49	483.98
8. Finance Costs	164.53	131.24
9. Depreciation and Amortization Expenses	437.01	345.47
10, Other Expenses	2,720.31	2,420.90
11. Total Expenses	10,577.85	10,199.10
12. Profit Before Tax	1051.79	893.49
Tax Expenses
Current Tax	268.03	222.97
Deferred Tax	(1.78)	6.31
13. Total Tax Expenses	266.25	229.28
14. NET PROFIT FOR THE YEAR	785.54	664.21
15. Other Comprehensive Income	-	-
16. Total Comprehensive Income for the Year attributable to equity holders	785.54	664.21
Earnings Per Share	0.74	0.67

• Product Wise Performance:

NAME OF PRODUCTS	F. Y. 2024-25 (Revenue)	F. Y. 2023-24 (Revenue)
Forged Articles	159,890,932/-	18,32,81,765/-
Flanges for Pipe Fittings	584,836,595/-	45,71,48,050/-
High Valued Fittings	25,001,170/-	8,97,55,318/-
Gear & Gearing	64,899,367/-	12,73,80,344/-
Agriculture Parts	1,111,634/-	28,15,983/-
Other Parts & Accessories	105,699,285/-	3,81,70,789/-
Railway or Tramway Parts	105,699,285/-	23,43,176/-

G. STRENGTHS. OPPORTUNITIES AND THREATS ANALYSIS:

¦ * Quality of products H

* Products are used by I automobile industry, refineries, oil pipelines,

I * Experienced Promoters

I Threats

* A faster shift to new mobility transport wil have a meaningful impact on our business.

•Several new companies are entering the market, and existing rivals in adjocent product categories are dlso increasing their offerings.

•Volatility in raw material price - Mild Steel, Alloy Steel Carbon Steel Stainless Steel, etc

Opportunities:

- Undertaking Government Contracts,

- The government has developed numerous programs to help manufacturers, sun as the Production Linked Incentive (PLI) Scheme, which is a cornerstone of the governments endeovoru to achieve an Atmanirbhar Bharot,

• Domestic producers are given a preference in the defence sector which will provide new opportunities to the industry

In accordance with SEBI (Listing Obligations and Disclosure requirements 2018) (Amendment) Regulations 2018, the Company is required to give details of significant changes (Change of 25% or more as compared to the immediately previous financial year) in key sector specific financial ratios.

2024-25			2023-24
Sr. Ratio Name No.	Ratio	Sr. No.	Ratio Name	Ratio	% Change
1 Debtors Turnover	6.88	1	Debtors Turnover	6.78	1.55%
2 Inventory Turnover	4.03	2	Inventory Turnover	4.74	-14.97%
3 Interest Coverage Ratio	8.8	3	Interest Coverage Ratio	8.98	-1.35%
4 Current Ratio	3.99	4	Current Ratio	2.22	79.33%
5 Debt Equity Ratio	0.24	5	Debt Equity Ratio	0.26	-7.03%
6 Operating Profit Margin	10.51%	6	Operating Profit Margin	16.23%	13.24%
7 Net Profit Margin	6.83%	7	Net Profit Margin	6.04%	13.14%
8 Return on Net worth	10.01%	8	Return on Net worth	15.42%	-35.09%

Explanation:

-Operating Profit Margin and Net Profit Margin decreased as per the following reasons:

• Increase in operating profit margin is due to decrease in material consumption cost and change in product mix of other machine part & accessories and high value fittings.

-Current Ratio Increase as per following reasons:

• Significant increase in ratio is on account of unutilized amount from shares & convertible warrant issued on preferential basis lying in special account for the issue and temporary fixed deposits with IOB Bank for Rs. 3243.62 Lakhs, advance paid to suppliers for capital goods and materials, unutilized GST ITC availed on account of expansion carried by the company as compared to previous year.

Return on Net worth decreased as per the following reasons:

• Decrease in Ratio is due to increase in shareholders equity on account of Issue of Equity Shares on Prefrencial Basis & Money Received against Issue of Warrants during the year and not account of decrease in profit margins.