Triton Valves Ltd Management Discussions

(a) Global: Given the uncertainties from regional conflicts and the unilateral decision of the US to impose tariffs, the outlook for the current calendar year and the next have been lowered from the last outlook report by the International Monetary Fund ("IMF"). The Company consistently incorporates guidance issued by IMF in the formulation of its strategic and operational frameworks. IMF expects global economy to grow at 3.1 percent during calendar year 2025 and at 3 percent in calendar year 2026, reflecting a slightly downward trend compared to estimations provided one year ago. Inflation is likely reduce further in CY 2025 to 4.5% from 5.9% for the previous year. News from China are not encouraging, and seemingly their economy has got slightly reduced.

The next few years, the World Output will grow on the back of a faster growth of the Emerging Markets/Developing Economies. While the US is seeking to increase tariffs on its imports (exports from other countries), its consumers will be in a disadvantageous situation, ranging from having to pay more for the goods or to be content with fewer choices.

(b) India: The Indian economy will be retaining the crown of the fastest growing economy. Though the absolute size

of Chinese economy is significantly bigger than the Indian economy, the growth rate and the increasing gap between the two countries provides a comfort and a challenge: comfort that the economic policies put in place the government and the demographic dividend are helping demand creation and challenge that the time to take the country to the next level is now. Time is of the essence and ease with which the Indian mindset is adapting technology in business, monetary transactions, and operations is on the perfect spot.

Private consumption remains stable, backed by fiscal discipline and services trade surplus/healthy remittance growth. The country has taken note of the likely headwinds from geopolitical and trade uncertainties and possible commodity price shocks. Interest rate rationalization across the board, impacts the profitability of the industry in a positive way. The recently concluded IndoUS comprehensive treaty will be in the positive domain. The recent changes to the US Tariffs on the Indiamanufactured goods will not impact much, since the bulk of her exports to the US is in pharma.

Your Company operates its business in three distinct verticals, namely:

Your Company is a Tier 1 and Tier 2 supplier of tyre valves and related components to the automotive industry. Tube type valves are supplied primarily to the tyre and inner tube industry which in turn supplies tyres and tubes to the automotive industry as well as the replacement market.

Your Company also supplies tubeless valves directly to the manufacturers of vehicles of all descriptions from two wheelers and passenger cars to heavy commercial vehicles.

The size of the tyre valve industry in India is estimated to be INR 500 crores in the organized segment of the market. The major technology change that is sweeping the industry is the change from tube type tyres to tubeless tyres and in the passenger vehicle segment from tubeless tyres to tyres fitted with Tyre Pressure Monitoring Systems (TPMS). This change is raising the entry barrier further and is also expanding the market c. size. The changed geopolitical scenario in the world is also opening up new opportunities for exports with global supply chains looking at India as a longterm partner in their efforts at developing a China plus one strategy for supplies.

Your Company is extremely well positioned to benefit from both the technology shift as well as the China plus one strategy being deployed by global buyers.

Your Company is a leading supplier of raw material in the form of extruded and drawn rods, coils, wires and tubes to a diverse range of industries, including automotive, industrial, oil & gas, defense, writing instruments, climate control, refrigeration, watch components etc. Brass is a thermal and electrical material and is also typically used in applications where corrosion is a concern.

The global brass extrusion industry is estimated to be valued at INR 3,00,000 crores while the extruded and drawn brass products industry in India is estimated to be approximately INR 30,000 crores. The brass industry is primarily located in Gujarat and to some extent in the region around Delhi. The brass extrusion industry recycles copper and zinc scrap apart from using virgin inputs in the form of pure copper cathodes and pure zinc ingots.

The brass industry in India is seeing growth on account of the increased need for brass products as a result of the increased need for airconditioning and cooling not just for human comfort but also for industrial applications such as data centers and internet and Alrelated infrastructure. The use of brass is also increasing with

increased need for electrical appliances and Electric Vehicles (EVs)

Your Company operates a stateoftheart brass mill in Mysuru in the South of India through its whollyowned subsidiary Tritonvalves Futuretech Pvt. Ltd. With quick access to the industrial areas around Bengaluru, Chennai, Hyderabad etc., the Company is well positioned to serve the market with high quality products at competitive rates. The mill also serves as a captive source of brass bars and coils for the group.

Your company is a critical supplier of valves and components to the airconditioner manufacturing industry (AC industry). The AC industry in India is estimated to be worth INR 27,500 crores, expected to grow at a rate of 10 12 percent during FY 26 over FY 25. This growth is on the back of a 25 percent sales growth in FY 25 over FY 24. The AC component industry is estimated to be worth INR 16,500 crores, while the market for valves and related components is estimated to be INR 1,000 crores. The industry is served by over 20 different brands with more expected to enter the market over the next few years. Since only 7 percent of Indian households are estimated to own an airconditioner in India and with the residential ownership expected to grow 9x by the midcentury, almost all the major brands are adding new manufacturing capacities and are localizing their supplychains.

This presents a unique opportunity to the component manufacturers while strengthening the "Make in India" footprint for the industry. It will be proper to mention here that your Company through its whollyowned subsidiary Tritonvalves Climatech, is at the cuttingedge technology and manufacturing competence insofar as HVAC valves is concerned. All products being designed and manufactured by your Company is an import substitute, expected to address supply chain challenges for the OE manufacturers.

The AC industry is expected to grow at a CAGR of 12 15% over the next decade as a result of the increased demand for ACs in India as well as overseas. Your Company is extremely well positioned to benefit from this growth on account of its superior technology and vertical integration.

The Triton Valves Group has assumed the role of a leader in the respective business space in increasing the size of business by product innovation and by adhering to highest level of quality, in a way, translating its capacity and competence into profitability by driving the Top line growth while ensuring flawless execution.

The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013, read with the Indian Accounting Standards (IndAS). The management of Triton Valves Limited accepts the integrity and objectivity of these financial statements as well as the various estimates and judgments used therein. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements are reflected in a true and fair manner and also reasonably present the Companys state of affairs and profit for the year.

(INR In Crores)

(INR in Crores)

For the financial year ended March 31, 2025, the Company recorded consolidated revenue from operations of INR 488.37 crores, marking a 14% increase over the previous year (FY 202324: INR 428.32 crores). On a standalone basis, revenue grew to INR 381.40 crores, up 11 % from INR 343.25 crores in FY 202324.

The consistent growth in both consolidated and standalone revenue reflects improved market demand, strong execution capabilities, and expansion in customer base across key segments.

Other income on a consolidated basis stood at INR 1.14 crores (FY 202324: INR 0.57 crores). On a standalone basis, other income rose to INR 9.29 crores compared to INR 8.37 crores in the previous year, primarily due to increased returns on financial investments and nonoperating income.

Total income increased to INR489.51 crores on a consolidated basis and INR 390.68 crores on a standalone basis in FY 202425, reflecting overall business momentum.

Profit Before Tax (PBT) improved significantly, reaching INR 7.72 crores (consolidated) compared to INR 5.24 crores in FY 202324. On a standalone basis, PBT stood at INR 8.75 crores (FY 202324: INR 9.39 crores) due to reduction in contributuion and EBITDA margin.

Profit After Tax (PAT) on a consolidated level was INR 5.12 crores, up from INR 2.81 crores in FY 202324. On a standalone basis, PAT was INR 6.60 crores, slightly lower than INR 6.92 crores in the previous year, primarily due to reduction in contribution and EBITDA margin.

Total Comprehensive Income for FY 202425 improved to INR 5.15 crores (consolidated) and INR 6.60 crores (standalone),

as compared to INR 2.17 crores and INR 6.27 crores, respectively, in FY 202324. This reflects steady recovery and improved operational performance.

Consolidated net block stood at INR 86.51 crores as of March 31, 2025, slightly higher than the previous year.

Standalone net block increased to INR 40.76 crores from INR 39.15 crores, indicating continued investment in fixed assets to support future growth.

Net worth on a consolidated basis improved to INR 109.22 crores from INR 102.89 crores in FY 202324, backed by consistent profitability.

On a standalone basis, net worth increased to I NR 127.71 crores from INR 119.93 crores, reflecting strong internal accruals and retained earnings and also the infusion of Equity capital.

The Company has shown significant financial recovery and growth in FY 202425, building on operational improvements, revenue growth, and prudent cost management. Strengthened EBITDA margins and improved net worth position the Company well for continued performance in the coming years.

Continued focus on innovation, capacity expansion, and market penetration is expected to drive further topline growth and margin improvements.

Looking ahead, your companys forecast recognizes the opportunity to grow its revenues profitably and to create a base for shaping the next five years. Your Company has identified three growth levers in the form of a) Tubeless valves. Tyre Pressure Monitoring System Valves (TPMS), Electric Vehicle components, b) Service Valves for room Air Conditioners (AC), c) New alloys of brass, all of which are expected to generate higher margins.

To support these above growth levers, the Company successfully raised INR 31 crores via preferential allotment during the year. This capital infusion is earmarked for targeted capital expenditures, technological upgradation, and expansion into select overseas markets. These investments are expected to begin contributing to revenues and profitability starting from FY 202526, in line with the Companys strategic forecasts and costbenefit analysis.

While the external environment continues to pose challenges including persistent geopolitical tensions, inflationary pressures, and global supply chain disruptionsthe Company remains cautiously optimistic. Proactive supply chain risk management, diversification across enduser industries, and a disciplined approach to financial planning continue to be key elements of its strategic defense and growth posture.

The Company is confident that its integrated approachcombining innovation, capital efficiency, and global market responsivenesswill enable it to unlock longterm shareholder value and secure a stronger competitive position in the years ahead.

Make in India brings in a lot of tailwind for local manufacturing in India which will benefit the group

Government incentives for employment and MSME and TReDS facility for MSME vendors will spur economic growth in India

• Higher Government spending on infrastructure should be growth positive for the related sectors

• Production Linked Incentives and Free Trade Agreements will be a boost to manufacturing in the long run

• The political situation in the Middle East, Europe and South Asia could impact the global economic recovery

• The high inflation would have a negative impact on consumption

• The monetary policy for holding onto Reference Rates will impact availability of money & cost

• Central Banks the world over are fighting inflation through interest rate hikes and other monetary measures which might curb growth and international trade. This could be a dampener for Exports

• The upheaval in the commodity market and the pressure on emerging market currencies could impact the landed cost of the raw material

Overall, the outlook for the tyre industry is neutral or slightly negative due to the shift to tubeless of rings and on the tubeless segment is expected to grow, the electric vehicle

segment of the automotive industry is expected to grow faster in India for FY 202324.

Triton has in place a robust risk management framework that identifies and evaluates business risks and opportunities. The Company recognizes that these risks need to be managed effectively and mitigated to protect the interest of the shareholders and stakeholders, to achieve its business objectives, and to create sustainable value and growth.

The Companys risk management processes focus on ensuring prompt identification of these risks and identification of a mitigation action plan which is monitored periodically to address risks accordingly.

The list of key risks and opportunities identified by the Management are as follows:

Volatility in the prices of essential raw materials such as rubber, steel, brass can impact production costs and profitability

• Both natural rubber and crude prices are controlled by the external environment and are, therefore, beyond the reasonable control of the management

Consumer Preferences: Shifts in consumer preferences, such as increased demand for electric vehicles or sustainable products, necessitate continuous adaptation and innovation

Geopolitical Risks: Political instability, conflicts, or trade disputes in key markets can disrupt operations and affect global supply chains

As the industry increasingly adopts digital technologies the cyberattack threat of unauthorized access and disruption of business operations continues to increase across the globe

• Retaining skilled personnel may become increasingly difficult in India with the increasing demand for talent

• Since the manufacturing process of the Company is laborintensive, it requires a lot of skilled as well as unskilled workers. Maintaining a huge workforce is a big challenge. In order to mitigate the said risk, the Company follows good HR practices to promote the welfare and safety of its workmen and maintain a cordial working environment

The Company is committed to managing these risks effectively and mitigating their impact on the business.

The Companys risk management framework is constantly evolving to ensure that it is wellpositioned to respond to the changing business environment.

As required by SEBI (LODR) (Amendments) Regulations, 2018, the Company is required to furnish the details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations for the changes.

Return on Equity has increased in line with the profitability of the group.

At the heart of our companys governance lies the belief that Internal Control is a fundamental pillar, empowering managementwhilemaintainingessentialchecksand balances. We have established a robust internal control framework tailored to the unique nature, size, and risks of our business. This framework encompasses a welldefined organizational structure, clearly defined roles and responsibilities, documented policies and procedures, and a delegated authority for financial decisionmaking. To complement these policies, we have implemented a comprehensive management information and monitoring system, ensuring adherence to internal processes and compliance with relevant laws and regulations.

Our internal control environment enables efficient operations, safeguards our assets, detects and prevents frauds and errors, ensures the accuracy and completeness of

accounting records, and enables the timely preparation of reliable financial information. As a core IT system, we use an advanced Enterprise Resource Planning (ERP) software. We continuously strive for excellence by adopting industryleading processes to enhance our systems and procedures. Our management not only focuses on revenue and profitability but also upholds financial and commercial discipline.

To ensure the effectiveness of our internal control systems, we have implemented comprehensive internal audits and regular checks. Our Audit Committee, led by an Independent Director, diligently reviews the adequacy and performance of our control systems. We maintain proper and adequate systems of internal controls, fostering a culture of accountability and compliance within our organization.

Our people are the cornerstone of our success. We are committed to fostering a highperformance culture that attracts, develops, and retains top talent. By investing in our employees growth and wellbeing, we empower them to reach their full potential and contribute significantly to the companys objectives.

Our strong and collaborative enterprises with employees have been instrumental in driving our business forward. We believe in open communication and mutual respect as the foundation for a productive workplace.

We prioritize a holistic approach to employee wellbeing, offering programs and initiatives to support our employees physical, mental, and emotional health. Additionally, Triton is steadfastinitscommitmenttofosteringadiverse and inclusive workplace where everyone feels valued and respected.

The Human Resources function at Triton Valves Limited has witnessed significant growth, reflecting our commitment to people development. Our focus on talent acquisition, development, and retention has been instrumental in building a highperforming workforce. The establishment of our Experiential Training Center will provide opportunities for our employees to acquire new skills and capabilities. To further enhance our talent development efforts, we are launched Total Employee Involvement Programs.

As part of our commitment to the community, we have initiated an early childhood education program support in a nearby locality. This Corporate Social Responsibility (CSR) initiative reflects our belief in nurturing the future generation and contributing to the overall development of the community.

By creating a positive and supportive work environment, we aim to build a highperforming and engaged workforce capable of meeting the challenges and opportunities of

the future. Our journey at Triton is marked by a steadfast commitment to our people. We will continue to invest in their growth, prioritize their wellbeing, and cultivate a workplace that values diversity and inclusion. Together, we will build a stronger, more resilient Triton.

Statements in the Management Discussion and Analysis describing the Companys objectives, expectations or forecast may be forwardlooking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic supply and demand conditions affecting the selling prices of finished goods, input availability and prices, changes

in government regulations, tax laws, economic developments within the country, and other factors such as litigation and industrial relations.

Place: Bengaluru S.K. Welling

Date: 13th August 2025 Chairman

DIN: 00050943

Triton Valves Limited

Sunrise Chambers, 22, Ulsoor Road

Bengaluru 550 042

CIN:L25119KA1975PLC002857