Triton Valves Ltd Management Discussions

"CHARAIVETI CHARAIVETI — KEEP MOVING, KEEP PROGRESSING

Taking a leaf out of the illustrious heritage of India, that is Bharat, our Company has been on the move, ever progressing, ever biased for action.

" " reflects Triton Valves Limiteds approach to growth: continuously adapting, innovating, and moving forward. FY 2025-26 was a year of progress amidst a changing and challenging global and domestic environment. The year in review was not just about the uncertainties arising out of commodity, supply chain continuity, foreign exchange, but was about the extent of fluctuation. The world that was working on globalisation, suddenly practised localisation; the world that predicted VUCA as the new normal, started talking about BANI.

Instead of gaining clarity on the emerging global situation, your

Company accepted the new normal and moved forward; be it for securing the supply chain or for funding the operations or for going ahead with its planned capital expenditure, it achieved success. We continue to embark on our path-breaking journey to convert new business possibilities into opportunities for moving forward. As the countrys manufacturing ecosystem gets deeper and broader, our Company is all set to realise its full potential, be it on producing & selling higher-value products, sustainable value creation, or in forging business partnering with its customers and vendors. With these words, we turn to the Economic Overview.

ECONOMY OVERVIEW

(a) Global: The global economic environment during FY

2025-26 continued to be influenced by geopolitical developments, changes in trade policies, supply-chain realignments, commodity-price movements and divergent monetary policies across major economies. Despite these challenges, global economic activity remained relatively resilient, supported by technology investment, improving financial conditions and adaptability of businesses.

(b) The International Monetary Fund ("IMF"), in its April 2026 World Economic Outlook Report, projected global growth at 3.1% for calendar year 2026 and 3.2% for 2027. The outlook remains subject to risks arising from geopolitical tensions, trade fragmentation, commodity-price volatility and disruptions to global supply chains. For India, the IMF projects real GDP growth of 6.5% for 2026 and 2027, reflecting continued domestic economic resilience despite a challenging global environment.

The IMF has highlighted the contribution of the strong preceding-year out-turn and improving trade conditions, while also recognising the adverse impact of geopolitical developments and external uncertainties.

(c) India: The Indian economy continued to demonstrate resilience during FY 2025-26. According to the First

Advance Estimates referred to in the Economic Survey

2025-26, real GDP growth for FY 2025-26 was estimated at 7.4%, supported substantially by domestic demand, private consumption and capital formation. Manufacturing activity also strengthened, while services continued to be an important contributor to economic growth.

The Economic Survey 2025-26 projects real GDP growth in the range of 6.8% to 7.2% for FY 2026-27. The Survey also notes the strength of household, corporate and banking-sector balance sheets, continuing public investment, resilient consumption and improving private investment intentions as supportive factors for the domestic economy. At the same time, global trade uncertainty, tariff developments, capital-flow volatility and slower growth in certain trading partners remain areas requiring monitoring.

The inflation environment remained relatively benign during FY 2025-26. The Economic Survey noted that inflation had moderated significantly, while the outlook for FY 2026-27 remains broadly within the policy framework, although currency movements and global commodity prices could result in imported inflation.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Your Company operates its business in three distinct verticals, as follows: forays a. Automotive tyre and tube valves, tubeless valves, Electric Vehicle-related components, TPMS valves, valve cores, and accessories; apart from the Tyre & Tube and

Vehicle OE manufacturers, this segment has a huge potential on the B2B2C aftermarket and export markets;

b. Metals brass rods, coils, wires and development of specialised alloys and other value-added metal products; and

c. Climate Control components for residential air-conditioning, commercial air-conditioning and refrigeration applications.

This being the overall summary, the details are as under:

a. Automotive

The Indian automotive industry is witnessing a systemic transformation, driven by technological advancements, evolving consumer preferences, Indian consumers were driving vehicles with tyre & tube variant. All the pneumatic valves were selling to the Tyre industry. Around FY 2009, a few vehicles were running without the tubes and the valves were directly sold to the Vehicle OE. In less than 16 years, Electric Vehicles made an entry and with the tubeless vehicles started experimenting with valves with tyre pressure monitoring system, the customer profile for the Automotive Segment has evolved with the addition of new accounts like Ather, Bosch, Aumovio. Your Company believes that the transition from tube-type tyres to tubeless tyres to tubeless and Electric Vehicle presents a sustaining opportunity to grow revenues and profitably.

b. Metals

Continuing with the journey for acquiring new customer accounts and new value-added alloys of copper over the last two years, the Metals Segment, organised under Tritonvalves Future Tech Private Limited strengthened its product portfolio by adding hollow-tubes amongst others; market with it made significant a view to mitigating the foreign exchange risks to some extent, besides prepare a solid base for dramatic growth over the next 12-18 months. Demand for copper and copper-alloy products has grown over the years, and India, a net imported of copper/copper-alloys, is experiencing a huge home-grown demand. The Metals Segment is actively partnering with a few importers of such copper alloys for achieving a lower import bill for the economy.

During FY 2025-26, the metals business continued to face the impact of volatility in copper and other commodity prices; not only did the benchmark LME-Cu and LME-Zn rise during the year, it came in concert with the volatile and upwardly mobile USD/INR. The economy witnessed the twin impact of the increase during the year and emerging ME situation added to uncertainty of the transit time. The Metals Segment witnessed a sharp increase in brass prices resulted in some customers reducing or postponing purchases temporarily, affecting the ordering cycle and working-capital requirements.

At the Group level, the management put together an action plan to increase inter-company purchase in order to fill-in the optimal Plant capacity, whilst paving the way for increased price realisation from external vendors. At the same time, with the commissioning of the second Casting Line from February 2026, the Segment has access to additional throughput and to increase its foray into value-added products including high-tensile brass and other higher-margin alloys for applications in sectors such as hydraulics and automotive. Some products had already been tested, validated and the Segment has received initial orders.

The Companys metals strategy is therefore moving beyond volume growth towards a product pyramid comprising:

• high-volume standard brass products;

• specialised and higher-value-added alloys;

• customer-specific material solutions; and

• products that provide better margins and strengthen customer relationships

c. Climate Control

Your company is a critical supplier of valves and components to the air-conditioner manufacturing industry (HVAC industry). The Indian air-conditioning, refrigeration and climate-control industry is expected to benefit over the medium to long term from rising household incomes, urbanisation, increasing penetration of air-conditioning, replacement demand, commercial infrastructure development and rising cooling requirements.

Your Company had identified the climate-control component market as an emerging opportunity, particularly given the relatively limited domestic manufacturing ecosystem for specialised valve components and the increasing global emphasis on localisation and supply-chain diversification.

FY 2025-26, however, remained challenging for the climate-control vertical. management attributed the weak performance partly to unfavorable weather conditions and a shorter summer season, while also noting that the second quarter is seasonally weak for the air-conditioning industry and competitive pressure from low-priced imports and the resultant difficulty in scaling domestic production despite the Company having secured technical approvals from several leading air-conditioning and refrigeration companies.

Your Company continues to develop service valves, charging valves, ball valves and other components for residential, commercial air-conditioning and refrigeration applications. The business is also pursuing further product development in the HVAC component ecosystem.

The long-term opportunity remains attractive, particularly if domestic manufacturing and localisation of critical components increase. However, the pace of growth will depend on market demand, competitive pricing, import conditions, customer adoption and the Companys ability to achieve adequate capacity utilisation.

In order to bring-in manufacturing and tax synergies at the Group level, and in line with the approval of the Bengaluru Bench of the NCLT, the Climate Controls

Segment organised under Tritonvalves Climatech

Private Limited was effectively amalgamated with Triton Valves Segment, effective from June 27, 2026 (Effective

Date of the Amalgamation); from theby driving the TopEffective date, the operations of Triton Valves Limited will have two segments, one for Automotive and the other for Climate

Control. Your Company will take credit of tax hitherto not availed by Tritonvalves Climatech Private Limited in due course.

The following table highlights the industry size for the various product segments and the potential for further growth of Triton Valves group:

INR Crores, Net external revenue	Triton Sales Revenue FY2025-26	India Industry Size FY2025-26 (estimate)
Automotive Segment	322	750
Metals Segment	241	50,000
Climate Control Segment	15	1,000
Triton Group Consol	578	51,750

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 growth while ensuring flawless execution.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

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 prudentandreasonablebasis, financialstatements are reflected in a orderthatthe true and fair manner and also reasonably present the Companys state of affairs and profit for the year.

Performance highlights- Statement of Profit and Loss INR lakhs

Particulars	Standalone financials			Consolidated financials
	FY 2025-26	FY 2024-25	Variance	FY 2025-26	FY 2024-25	Variance
Revenue from Operations	43,427.05	38,139.65	5,287.40	57,841.80	48,836.93	9,004.87
Gross Contribution	11,376.39	9,532.43	1,843.96	15,243.69	13,064.04	2,179.65
Operating Profit	2,252.70	1,507.32	745.38	4,021.10	3,113.75	907.35
Other Income	821.74	928.79	(107.05)	52.44	113.99	(61.55)
EBITDA	3,074.44	2,436.11	638.33	4,073.54	3,227.74	845.80
Profit before tax - normal	1,394.00	875.78	518.22	1,521.82	772.71	749.11
Exceptional - Labour code impact	142.56	-	142.56	151.78	-	151.78
Reported PBT	1,251.44	875.78	375.66	1,370.04	772.71	597.33
Income Tax	313.68	216.28	97.40	398.58	260.81	137.77
Profit after Tax	937.76	659.50	278.26	971.46	511.90	459.56

Performance highlights- Balance Sheet

Particulars	Standalone financials			Consolidated financialsb>
	FY 2025-26	FY 2024-25	Variance	FY 2025-26	FY 2024-25	Variance
Net Worth	14,644.86	12,770.93	1,873.93	12,830.89	10,921.69	1,909.20
Other funding, net	89.59	88.02		133.64	133.60
Funded Capital	23,603.56	21,573.43	2,030.13	26,194.79	24,282.19	1,912.60
Invested Capital	23,603.55	21,573.50	2,030.05	26,194.75	24,282.20	1,912.55
ROCE	9.5%	7.8%	169 bps	10.9%	8.4%	256 bps

Summary and Outlook

The Company consolidated and improved upon the

Fresh solidification reflected in the previous year financials. equity to the extent of INR 10.44 crores were infused by the share-warrant holders; with this amount, the Company received the entire INR 41.82 crores of fresh equity money, committed by the investors identifiedthrough a preferential issue route of the SEBI-ICDR regulations. In conformity with the commitment made towards the utilisation of the said equity issuance, the funds were utilised.

Between FY 25 and FY 26, capital expenditure of INR 21.40 crores were incurred in Triton Valves Limited. At the Group Consolidated Financial level, the capital expenditure was INR 29.03 crores for the same period. When fully commissioned for commercial operations, these assets would bring in gains from automation and sales through new business, such as TPMS. The trend in investing for future replacing assets will continue for the next 18-24 months.

Revenue, at the Standalone level, grew by 13.9% and at the Group level by 18.4%. The Group EBITDA was INR 40.74 crores (7.0% margin). PAT improved from INR 5.12 crores to INR 9.71 crores (margin of 1.7%). This trend is likely to continue for future, with additional contributions coming in from the EV sub-segment for the Automotive Segment and the value-added brass rods/ coils for the Metals Segment.

OUTLOOK FOR THE NEXT 5 YEARS

Looking ahead, your companys forecast recognises 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.

While the external environment continues to pose challenges-including persistent geopolitical tensions, inflationary pressures, and global supply chain disruptions - the Company remains cautiously optimistic. Proactive supply chain risk management, diversification across end-user industries, and a disciplined approach to financial planning continue to be key elements of a sustainable and improving growth.

The Company is confident that its integrated approach-combining innovation, capital efficiency, and global market responsiveness - will enable it to unlock long-term shareholder value and secure a stronger competitive position in the years ahead.

OPPORTUNITIES AND THREATS Opportunities:

• Make in India and GST systemic corrections bring 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 continue to 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

Threats:

All major economies are looking local rather than global, which will disrupt imports-exports at the global level

• The upheaval in the commodity market and the sustained pressure on INR will pressure the Country, since the landed cost of the raw material will increase

• 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

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 2026-27.

RISKS AND CONCERNS

Triton has in place a 90-day plan to review the emerging risks and opportunities, which will be implemented on an ongoing basis to grant robustness to risk management framework that identifies and evaluates business risks and opportunities. The Company recognises 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:

Raw material price volatility:

Volatility in the availability and 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.

Cyber-attacks:

• As the industry increasingly adopts digital technologies the cyber-attack threat of unauthorized access and disruption of business operations continues to increase across the globe.

Manpower and labour:

• Retaining skilled personnel may become increasingly difficult in India with theincreasing demand for talent; the impact of the Labour Codes as applied at the local level, is expected to add to the existing wage bill at the Group level.

Since the manufacturing process of the Company is labour-intensive, 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 well-positioned to respond to the changing business environment. but also

KEY RATIOS:

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.

The Company has identified the following ratios as key financial ratios:

Particular	2025-26		2024-25
Current Ratio (times)	1.20	6.1%	1.13
Debt-equity ratio (percentage)	1.03	17.6%	1.21
Interest coverage ratio (times)	3.05	18.6%	2.57
Inventory Turnover ratio (times)	3.50	(0.7%)	3.52
margin Operating Profit (percentage)	7.0%	43 bps	6.6%
Net Profit margin (percentage)	2.4%	79 bps	1.6%
Return on Equity (percentage)	7.6%	288 bps	4.7%

On an overall basis, all the ratios parameters have improved. Return on Equity has increased in line with the profitability of the group.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

At the heart of our companys governance lies the belief that Internal Control is a fundamental pillar, empowering management while maintaining essential checks and balances. We have established a robust internal control framework tailored to the unique nature, size, and risks of our business. This framework encompasses a well-defined organizational structure, clearly defined roles and documented policies and procedures, and a delegated authority for financial decision-making. 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 industry-leading processes to enhance our systems and procedures. We are focusing on revenue and profitability financial and commercial discipline. A few additional Risk Control Matrices have been identified for incorporation from FY 27.

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.

HUMAN RESOURCES

Our people are the cornerstone of our success. We are committed to fostering a high-performance culture that attracts, develops, and retains top talent. By investing in our employees growth and well-being, we empower them to reach their full potential and contribute significantly to the companys objectives. In keeping with the spirit of the Labour Codes, a one-time benefit spend was recognised in our Financials cover the past-service experience of all eligible employees which is being reviewed for all future accounting periods.

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 well-being, offering programs and initiatives to support our employees physical, mental, and emotional health. Even at the Factory level, alternate Saturdays have been declared as a work from home/ lean official work for all salaried staff, on a rotational basis. Additionally, Triton is steadfast in its commitment to fostering a diverse and inclusive workplace where everyone feels valued and respected.

The Human Resources function at Triton Valves Limited has witnessed significant growth, reflecting our to people development. Our focus on talent acquisition, development, and retention has been instrumental in building a high-performing 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 high-performing 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 well-being, and cultivate a workplace that values diversity toand inclusion. Together, we will build a stronger, more resilient Triton.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Companys objectives, expectations or forecast may be forward-looking 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	For and on behalf of the Board of Directors
Date: August 13, 2026	Triton Valves Limited
Regd. Office:	Aditya M. Gokarn
Triton Valves Limited	Chairman and Managing Director
Sunrise Chambers, 22, Ulsoor Road	DIN: 00185458
Bengaluru 560 042
CIN: L25119KA1975PLC002867