Ucal Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1. COMPANY OVERVIEW

UCAL LIMITED is one of Indias leading auto component manufacturers, with deep expertise in Fuel Management and Emission Control Systems. Established in 1985, the Company is a preferred supplier to leading OEMs and global Auto Majors, delivering high-quality carburettors, fuel management systems, emission control products, pumps, valves, and precision-machined components for critical automotive and non-automotive applications.

The Company offers a broad portfolio of mechatronic components and systems aligned with global regulatory standards and key industry trends such as zero emissions, electrification, lightweighting, advanced composites, integrated electronics, and flex- fuel technologies. As sustainability reshapes global mobility, with electric vehicles and alternative energy solutions gaining momentum, UCAL is strengthening its presence in the evolving EV ecosystem.

As part of its future-ready strategy, UCAL is building a resilient and resurgent organisation by enlarging its range of innovation-led products and its ambit of operations into new and emerging applications in both the automotive and non-automotive segments across new geographies and high-potential markets

2. ECONOMIC OVERVIEW - GLOBAL

The global economy in 2025-26 continued to operate under an environment of heightened uncertainty, buffeted by continuous geopolitical tensions, fractured trade relationships, and uneven policy directions across major economies. The ongoing conflicts in Eastern Europe and the Middle East, coupled with periodic supply chain disruptions and volatility in energy markets, weighed down on global growth. Rising protectionist measures and the weaponization of tariffs further deepened economic fragmentation, affecting cross-border investment and trade flows.

According to the IMF estimates published in the World Economic Outlook-July 2026, global growth is estimated to remain below historical averages at around 3.0% in FY 2025-26. While advanced economies are expected to grow at a muted pace of approximately 1.4%-1.5%, dragged down by tight monetary conditions and weaker consumption, emerging markets and developing economies driven by resilient region-specific domestic demand are estimated to expand at around 3.6%-3.8%, with India and China leading the growth at 6.4% and 4.6% respectively.

Looking ahead to 2027, IMF indicates that global growth could stabilise in a narrow range of 2.9%-

3.1 %, depending on the de-escalation of geopolitical tensions, easing of inflationary pressures and normalization of trade and monetary policies.

3. ECONOMIC OVERVIEW - INDIA

Indias economy in FY 2025-26 continued to demonstrate resilience amid a challenging global environment beset with geopolitical uncertainty, volatile commodity prices, and subdued external demand. According to assessments by the Reserve Bank of India and the IMF World Economic Outlook, India remains one of the fastest-growing major economies, supported by robust domestic consumption, sustained government capital expenditure, and steady growth in the services sector.

As per RBI Report 2025-26 India maintained its position as one of the fastest-growing major economies, with real GDP growth estimated at 7.3% in 2025-26, revised upward from an initial projection of 6.5%.

The growth momentum in 2025-26 was driven by broad-based expansion across key sectors, including manufacturing, construction, and digital-led services, while external trade continued to faces headwinds from supply chain realignments and muted global demand. Growth was supported by positive tax policies, a strong revival in rural demand, and a gradual recovery in urban consumption.

Looking ahead to 2027, Indias growth trajectory is expected to remain strong and stable, with the IMF projecting growth in the range of 6.5%-6.8%, supported by structural reforms, productivity gains, and continued infrastructure build-out. Stabilisation of the economy, digital adoption, and manufacturing diversification under the "China+1" strategy are the upside gains. Elowever geopolitical fragmentation, climate-related disruptions, and potential weakening in consumer demand pose downside risks. Overall, India is expected to retain its position as a key engine of global growth, driven by strong domestic fundamentals and continuity in supportive Government policies.

4. INDUSTRY OVERVIEW

Global Outlook

The global automotive industry in FY 2025-26 operated in a complex environment marked by uneven demand patterns, ongoing geopolitical tensions, and continued supply chain realignments. While production normalised in most regions, growth remained moderate as OEMs navigated cost pressures, evolving emission regulations, and the acceleration toward electrification. Adoption of electric vehicles continued to expand, led by China, Europe, and select parts of North America, albeit the pace of growth showed signs of moderation due to pricing pressure, subsidy rationalisation, battery range and infrastructure constraints. Overall, the industry remained in a phase of transition, balancing internal combustion engine (ICE) rationalization with longterm electrification strategies and software-defined vehicle development.

Global Electric Vehicle (EV) Market

The global electric vehicle market maintained strong momentum during FY 2025-26, supported by favourable government policies, expanding charging infrastructure and continuous advancements in battery technology. While adoption remained strongest in China and Europe, emerging markets, including India, witnessed increasing electrification across two- wheelers, passenger vehicles and commercial mobility segments, although infrastructure and affordability continue to influence the pace of transition.

Going forward, electrification is expected to remain one of the primary drivers of automotive innovation. At the same time, hybrid vehicles are likely to play an important transitional role, creating a diversified mobility landscape. This evolution presents significant opportunities for suppliers with expertise in electronics, intelligent control systems, thermal management and precision engineering across multiple propulsion technologies.

Looking ahead to 2027 and beyond, the global auto industry is expected to enter a more decisive phase of transformation, with electrification, software integration, and alternative energy platforms becoming central to product strategies. Competition is likely to intensify as new technology players reshape value chains and traditional OEMs accelerate platform consolidation.

India Outlook

In contrast, the Indian automotive industry, demonstrated strong momentum in FY 2025-26, supported by resilient domestic demand, improved rural consumption, and sustained infrastructure growth. According to SIAM (Society of Indian Automobile Manufacturers) the year ended on a high note, with vehicles across categories together posting their highest ever sales in a Financial Year, after seven years. The strong contributors to this growth have attributed to the positive sentiments created through GST 2.0 reforms and multiple Repo Rate cuts announced by RBI during the year. Passenger vehicles and two-wheelers recorded steady growth, while commercial vehicles benefited from logistics expansion and construction activity. Export performance remained strong, aided by Indias growing role in global supply chains. The industry also saw increased penetration of advanced technologies, including emission-compliant systems, lightweight components, and early-stage electrification across segments, supported by both policy push and OEM investments.

In India, the outlook remains structurally positive, supported by rising incomes, policy incentives, and the "China+1" manufacturing shift. The sector is expected to see deeper electrification in two-and three-wheelers, gradual rationalization in passenger vehicles, and stronger integration into global automotive supply networks, positioning India as both a demand and manufacturing growth hub.

However, risks remain from global geopolitical volatility, commodity price fluctuations, and external demand uncertainties. Despite these challenges, India is expected to remain one of the fastest-growing automotive markets globally, supported by resilient consumption and policy continuity.

Budget 2026-27 - Key Allocations and Policy Impetus for the Auto Industry.

The Union Budget 2026-27 reinforced the Governments focus on manufacturing-led growth, infrastructure expansion, and clean mobility transition, providing a supportive policy environment for the automotive sector. Increased capital expenditure allocation towards highways, logistics corridors, and urban mobility infrastructure is expected to strengthen demand for commercial vehicles and passenger mobility solutions. Continued emphasis on the PM Gati Shakti framework and multimodal connectivity is likely to enhance logistics efficiency and boost fleet utilization across the CV segment.

The Budget also placed strong emphasis on green mobility and advanced manufacturing, indirectly supporting the automotive value chain through incentives for electrification, battery ecosystem development, and domestic value addition under the Make in India initiative. Industry feedback highlighted that policy stability, coupled with sustained infrastructure push and income tax relief measures, is expected to reinforce consumer confidence and support demand momentum across vehicle segments.

India Electric Vehicle (EV) Market

Indias Electric Vehicle (EV) market continued its strong growth trajectory during FY 2025-26, supported by favourable government policies, expanding charging infrastructure, improving battery technologies and increasing consumer acceptance. Indias electric car market is set for rapid growth, with projections from IMARC Group estimating a compound annual growth rate (CAGR) of 47.8% from 2025 to 2033, reaching USD 50,455.76 Million by 2033. During the year, EV registrations grew across all major vehicle segments, led by electric two-wheelers and three- wheelers, while passenger electric vehicles recorded strong momentum with nearly an increase of 80% in registration compared to the relatively low base of the previous years, from a relatively low base. The transition towards cleaner mobility is being driven by rising environmental awareness, lower operating costs and sustained investments by both domestic and global automotive manufacturers.

The Government of India continues to play a pivotal role in accelerating EV adoption through a comprehensive policy framework. Key initiatives, including the FAME programme, the Production Linked Incentive (PLI) schemes for the automobile sector and Advanced Chemistry Cell (ACC) batteries, lower GST on EVs, support for domestic battery manufacturing, charging infrastructure expansion and incentives for critical mineral processing, are strengthening the countrys EV ecosystem while promoting localisation and technological self- reliance. With a long-term objective of increasing EV penetration across vehicle categories, India is emerging as one of the worlds fastest-growing EV markets, creating significant opportunities across electronics, powertrain components, thermal management systems, precision engineering and intelligent mobility solutions.

The Central Governments ambitious PM E-Drive programme has been rolled out with a long-term objective of increasing EV penetration across vehicle categories in the country.

PM E-DRIVE-Key Highlights

• Central Outlay: Rs.10,900 crore allocated to support electric two-wheelers, three-wheelers, and public transport buses.

• Charging Infrastructure: Rs.2,000 crore specifically dedicated to expanding public EV charging stations nationwide.

• Tax Advantage: EVs attract a low 5% GST rate compared to 18%+ for internal combustion engine vehicles

Delhi EV Policy 2024-2030: Indias Most

Aggressive State Roadmap

Delhis draft EV Policy (Rs.40,000 Cr.) is the most ambitious state-level EV Pan in India, key elements of which include:

• 100% electric registration for three-wheelers by January 2027

• 100% electric registration for two-wheelers by April 2028

• Scrappage incentives: Up to Rs.1,00,000 for scrapping older BSIV vehicles when purchasing an electric car

• OEM mandate: Every EV Dealer must establish at least one public charging station

• Road Tax: 100% waiver for electric cars priced up to Rs 30 Lakh until March 2030

Delhi EV Policy 2.0 (Active July 2026 - March 2030)

• Pure EV Focus: Provides purchase subsidies and 100% road tax/registration waivers (up to Rs.30 lakh ex-showroom for cars), while completely excluding hybrid vehicles from financial benefits.

• Mandatory Cutoffs: Stops new registrations for fossil-fuel passenger/goods three-wheelers starting January 1, 2027, and petrol/CNG two- wheelers starting April 1,2028.

• Fleet Goals: Aimsfor30% total fleet electrification in the capital by 2030 alongside thousands of new public charging points.

• With 67% of Delhis registered vehicles being two wheelers, the 2028 mandate will affect the majority of the citys vehicle owners and every delivery rider working in the capital. The impact of transitioning this huge rider group to EV has made ICCT to mark it as a template other high- pollution cities should consider.

• While Budget 2024-25 exempted duties in 25 critical minerals, including lithium, cobalt, and nickel. Budget 2025-26 has further removed duties on 35 battery assembly components and 28 critical parts- serving as an impetus to reduce the cost of domestic battery production, thereby helping to reduce retail EV prices over the next two to three years.

With a long-term objective of increasing EV penetration across vehicle categories, India is emerging as one of the worlds fastest-growing EV markets, creating significant opportunities across electronics, powertrain components, thermal management systems, precision engineering and intelligent mobility solutions.

At UCAL we are focused on the development of a comprehensive range of systems and components to address the rapidly evolving E-mobility space.

India Auto Industry Performance FY 2025-26 (SIAM & FADA Insights)

The Indian automobile industry delivered a landmark performance in FY2025-26, recording highest-ever sales across all vehicle categories after seven years of cyclical recovery, supported by improved affordability, favourable financing conditions, and strong policy tailwinds including GST rationalization and repo rate reductions by the Reserve Bank of India.

According to SIAM (Society of Indian Automobile Manufacturers), total domestic sales across PV, CV, 2W, and 3W segments posted double-digit growth in

FY2025-26, with all segments reaching record levels:

• Passenger Vehicles: 46.43 lakh units (+7.9% YoY)

• Commercial Vehicles: 10.80 lakh units (+12.6% YoY)

• Three Wheelers: 8.36 lakh units (+12.8% YoY)

• Two Wheelers: 2.17 crore units (+10.7% YoY)

Data from FADA (Federation of Automobile Dealers Association) confirmed that overall vehicle retail sales rose by 13.3% in FY2025-26, touching a historic high of nearly 2.97 crore units, reflecting strong end-user demand and improved channel liquidity.

Export Market Performance

Indias automotive exports remained a key growth driver in FY2025-26, supported by competitive manufacturing costs, improving product quality, and expanding global acceptance of Indian OEMs.

• Passenger Vehicle exports: 9.05 lakh units (+17.5%)

• Two-wheeler exports: 51.8 lakh units (+23.4%)

• Three-Wheeler exports: 4.61 Lakh units (+50.1 %)

• Commercial Vehicle exports: 0.95 lakh units (+17.4%)

Key export markets included Africa, Latin America, Middle East, and neighbouring South Asian countries, with strong traction across small cars, utility vehicles, and entry-level two-wheelers.

5. SWOT ANALYSIS STRENGTHS

• UCAL brand name

• Operational Excellence.

• R&D Facilities certified by Government of India.

• Technology in carburettor (mechanical and electronic) fuel injection systems. Intake throttle Valve, HC Doser Oil pumps, ETV and EGR.

• Capabilities (both technology & infrastructure) to develop products for meeting emission norms.

• Electronic design, development and manufacturing capability.

• Facilities in pressure die castings, plastic and rubber molding.

• Capability in frugal engineering.

• Well-trained and disciplined workforce.

• Good work culture.

• Preferred supplier of OEMs

• Flexible in Product development and Supply chain to meet the customer demand

WEAKNESSES	• Low IT penetration.
	• Slow growth in export business.
m	• Limited products for the EV Segment
	• Fligh employee cost
OPPORTUNITIES	• Entry into the EV segment with new products.
	• Penetrate Export market with existing products.
	• Entry into new markets like South America, Africa and ASEAN.
	• Entry into Commercial and Tractor segments and electric mobility vehicles.
	• No or few new developments of Engine platform in IC engines
	• Competitive pressure on pricing policies.
	• Rising input cost.
	• Relentless pressure to reduce prices by OEMs thereby affecting profit margin.
	• Increased emphasis on electric mobility vehicle

6. OUTLOOK 2027 AND BEYOND

The Indian automotive sector is expected to sustain its growth momentum, driven by strong domestic fundamentals, rising income levels, infrastructure expansion, and continued policy support.

Key structural themes shaping the outlook include:

• Accelerated electrification across 2W and PV segments

• Expansion of domestic manufacturing under China+1 strategy

• Growth in logistics-led CV demand

• Increasing export integration into global supply chains

• Gradual shift towards software-defined and connected vehicles

• Shift towards Green Fuels - Ethanol/CNG/Alternate Fuels/Flybrids

As India advances towards a cleaner, more sustainable transportation future, policy, innovation, and industry collaboration are becoming the cornerstones of multi-pronged mobility ecosystem.

Indias Ethanol Blending programme of blending 20% ethanol with petrol has been fast tracked to FY 2026 from the earlier target of 2030, the outcome of careful planning and steady execution, towards a green mobility ecosystem. The Ethanol Blended Petrol (EBP) Programme is one of Indias key energy initiatives. It aims at improving energy security, supporting farmers, and reducing environmental impact through greater use of domestically produced renewable fuel.

According to industry experts, the Ethanol Blended Petrol Programme has strengthened Indias energy security, reduced crude oil imports, lowered emissions, and increased farmers incomes. E20 is a safe, cleaner, and thoroughly tested fuel, backed by scientific evaluation, phased implementation, and collaboration across industry and research institutions. It represents a major step towards an Atmanirbhar, sustainable, and energy secure India.

The Government of India is supporting the use of CNG vehicles to reduce pollution, decrease fuel imports, and promote cleaner transportation. Towards this, new government policies for CNG vehicles have been framed to make CNG a practical and affordable option for millions of vehicle owners through expanding infrastructure, putting in place environmental regulations and supporting cleaner fuels.

Demand for CNG vehicles in India is projected to be on an upward trend, due to the benefits of lower fuel costs, less pollution and greater fuel accessibility

Indias hydrogen mobility policy under the National Green Flydrogen Mission focuses on deploying heavy- duty fuel cell vehicles, building refuelling stations, and funding strategic pilot projects. The government has allocated Rs.410.77 croreto launch 12 green hydrogen mobility pilot projects, deploying 70 hydrogen -powered vehicles, including development of 16 hydrogen refuelling stations across 21 routes.

UCAL- Providing Global Mobility Solutions

Transforming from a leading manufacturer of automotive components to a provider of global mobility systems

UCAL is enlarging its range of products and the ambit of its operations to address emerging trends in both the auto and non-automotive segments. We share below a few of the product lines where the Company has consolidated its position both in the domestic and global markets.

Global Internal Combustion Engine (ICE) Market

The global Internal Combustion Engine (ICE) market in FY 2025-26 continued to evolve amid the automotive industrys transition towards electrified mobility. While regulatory pressures and increasing investments in battery electric and hybrid vehicles moderated ICE demand in developed economies, conventional powertrains remained the dominant choice across emerging markets, supported by affordability, established fuel infrastructure and extensive service ecosystems. Consequently, industry priorities shifted from capacity expansion to enhancing fuel efficiency, reducing emissions and integrating hybrid technologies, reinforcing the relevance of advanced engine management, precision components and emission control systems.

Looking ahead, ICE platforms are expected to remain an essential part of the global mobility ecosystem through the medium term, particularly in hybrid vehicles, commercial transportation, off- highway equipment and emerging markets where electrification will progress at a measured pace. Continued advancements in high-efficiency engines, alternative fuel compatibility and hybrid architectures are expected to sustain demand for innovative, precision-engineered components and intelligent control systems. This evolving dual-powertrain landscape presents significant opportunities for companies such as UCAL, whose diversified portfolio, strong engineering capabilities and growing expertise in mechatronics, electronics and intelligent mobility solutions position it to support both the optimisation of conventional powertrains and the transition towards next-generation mobility technologies.

Global Fuel Management Systems (FMS) Market

The global automotive fuel management systems market continued to evolve during FY 2025-26, driven by increasingly stringent emission regulations, rising fuel efficiency standards and the growing adoption of electronically controlled powertrains. While electrification continued to gather momentum, internal combustion and hybrid vehicles remained the dominant contributors to global vehicle production, sustaining demand for advanced fuel management technologies that optimise combustion efficiency, reduce emissions and enhance engine performance.

Beyond 2027, the FMS market is expected to transition from a pure ICE-dependent growth trajectory to a hybrid-driven and efficiency-focused ecosystem, where demand is sustained by commercial vehicles, hybrid powertrains, off-highway applications, and developing markets. Looking ahead, the market is expected to benefit from continued investments in cleaner and more efficient powertrain technologies. The increasing integration of electronics, sensors and software with mechanical systems is accelerating the transition towards intelligent fuel management solutions, creating opportunities for manufacturers with strong capabilities in precision engineering, mechatronicsand integrated powertrain technologies.

Global Fuel Injection Systems Market

The global fuel injection systems market recorded steady growth during FY 2025-26 as OEMs increasingly replaced conventional fuel delivery technologies with electronically controlled injection systems to meet tighter emission norms and improve fuel economy. Demand remained robust across gasoline direct injection (GDI), port fuel injection (PFI) and hybrid powertrains, particularly in emerging markets where internal combustion engines continue to account for the majority of vehicle production.

The market outlook remains favourable as fuel injection systems continue to play a critical role in improving combustion efficiency and enabling compliance with evolving global emission standards. Future growth is expected to be supported by hybrid vehicle adoption, alternative fuel compatibility and the integration of intelligent electronic controls, reinforcing demand for high-precision components and advanced engine management technologies.

Two-Wheeler Segment - Key Growth Driver

The two-wheeler segment remains one of the most significant contributors to fuel injection system demand globally. The transition from carburettor- based systems to electronic fuel injection (EFI) in motorcycles and scooters-driven by stringent emission norms such as BS-VI /Euro 5 equivalents - continues to underpin strong replacement and upgrade demand. This is primarily led by large-volume markets in Asia (notably India, ASEAN, and China), Africa, and Latin America, where two-wheelers remain a primary mode of mobility. Increasing penetration of fuel-efficient, connected, and emission-compliant engines is accelerating EFI adoption across both commuter and premium motorcycle segments. Growth will increasingly be shaped by alternative fuels (ethanol blending, biofuels), hybrid integration, and smart engine management systems, ensuring continued relevance of fuel injection technologies in the evolving mobility ecosystem.

A market leader in Fuel Management and Fuel Injection Systems, UCAL has a significant edge and continues to partner with major OEMs and Auto manufacturers providing customized solutions in the segment

7. PRODUCT WISE PERFORMANCE

a. Carburettors

The global carburettor market in FY 202S-26 continues to operate in a structurally stable and regionally relevant niche segment, as the automotive industry steadily transitions toward electronic fuel injection (EFI) systems and electrified powertrains. Carburettors have been largely phased out in developed markets due to stringent emission norms such as Euro 6/7 equivalents and BS-VI standards, which necessitate higher precision fuel delivery and lower emissions compliance than conventional carburettor technology can provide.

Flowever, the market continues to retain relevance in cost-sensitive and legacy vehicle segments, particularly in select parts of Asia, Africa, and Latin America. Demand is primarily supported by small- engine applications, entry-level two-wheelers in certain developing markets, replacement and aftermarket requirements, and off-highway or small industrial engines where cost efficiency outweighs advanced emission compliance requirements.

Beyond 2027, the global carburettor market is expected to continue its long-term growth contraction, with demand increasingly concentrated in legacy fleets, aftermarket replacement, and select low-cost applications in developing economies. As EFI penetration deepens globally, carburettors are expected to remain relevant only in highly price- sensitive micro-markets and niche non-automotive applications.

Despite this decline, the aftermarket segment is expected to provide a stable, revenue base, particularly in regions with slower regulatory transitions and extended vehicle operating cycles. The overall market structure is expected to shift from OEM-led demand to replacement-driven consumption, with limited but sustained niche demand.

Within this evolving landscape, UCAL continues to maintain a select but strategically important presence in carburettor technologies, leveraging its long-standing engineering expertise and deep OEM relationships. The Companys carburettor portfolio, built on decades of domain knowledge, continues to serve specific applications in domestic and select export markets where ICE platforms continue to remain operational. UCALs focus is on serving residual demand efficiently, supporting aftermarket requirements, and optimising product value within niche segments.

As one of the major carburetor manufacturers globally, UCAL has a proven track record of developing small engine carburetors for key OEMs. The Companys Mechanical Carburetors find wide application in Motorcycles, Power Sports, Snowmobiles and in Universal Gasoline Engines both in the Automotive and Non-Automotive segments.

b. Throttle Body and Fuel Rail Assembly

The market for throttle bodies and fuel rail assemblies remained resilient during FY 2025-26, supported by sustained production of internal combustion and hybrid vehicles across global markets. While electronic throttle control continued to gain wider acceptance in premium and technologically advanced vehicle platforms, mechanical throttle bodies retained relevance across entry-level vehicles, two-wheelers, small engines and several emerging markets. Fuel rail assemblies continued to witness stable demand as OEMs focused on achieving higher fuel delivery precision, improved engine performance and enhanced emission compliance.

The market is expected to evolve alongside the gradual transition towards electronically controlled powertrains. Demand for precision-manufactured throttle body and fuel rail assemblies is likely to remain supported by hybrid applications, aftermarket requirements and cost-sensitive markets, creating opportunities for suppliers with strong manufacturing capabilities, value engineering expertise and diversified product portfolios.

UCAL is a major manufacturer of both Mechanical and Electronic Throttle Body and Fuel Rail Assemblies for Auto OEMs and the Aftermarket in FI systems.

and for the CNG and Hydrogen applications in commercial vehicles. During the year Throttle Body and Fuel Rail Assemblies proved a major contributor to sales revenue.

c. Automotive Pumps & Valves

The global automotive pumps and valves market recorded steady growth during FY 2025-26, driven by increasingly stringent emission norms, higher engine efficiency requirements and rising demand for thermal and fluid management solutions. While conventional ICE applications continued to account for the largest share, electrified powertrains also accelerated demand for specialised pumps and valves supporting battery cooling, thermal management and energy optimisation.

Looking ahead, the market is expected to benefit from the coexistence of ICE, hybrid and electric vehicles, each requiring increasingly sophisticated fluid management systems. Continuous innovation in lightweight materials, electronic actuation and precision engineering is expected to create sustained opportunities for technology-driven manufacturers capable of serving multiple propulsion platforms.

Beyond 2027, the global market for automotive pumps, valves, and throttle valves is expected to transition into a technology-driven, hybrid-supported growth phase, rather than a volume-led expansion cycle. While traditional mechanical variants are expected to witness gradual decline in mature markets, electronically controlled and integrated systems are projected to drive sustained value growth

UCALs wide range of environment-aligned Automotive Oil Pumps, Vacuum Pumps and E-Coolant Pumps are an important product segment addressing both Fuel-based and Electric Vehicle applications.

d. Variable Valve Timing (VVT)

The Variable Valve Timing (WT) market continued to expand during FY 2025-26 as OEMs increasingly adopted advanced engine technologies to meet stringent fuel efficiency and emission standards. VVT systems have become a key enabler for improving engine performance while reducing fuel consumption and emissions, making them integral to modern gasoline and hybrid powertrains.

The market outlook remains favourable as hybrid vehicle production accelerates globally and regulatory standards continue to tighten. Future growth is expected to be driven by electronically controlled valve technologies, intelligent engine management systems and greater integration with hybrid architectures, reinforcing demand for precision- engineered components and advanced mechatronic solutions.

Leveraging its R&D capabilities, UCAL has expanded its presence in this high technology space with Automotive Throttle Valves and WT products for both the domestic and global market for the OEM and Aftermarket segments.

e. Electronic Control Units (ECUs)

The global Electronic Control Unit (ECU) market continued to expand during FY 2025-26, reflecting the feature-intensive and increasing electronic content of modern vehicles and the industrys transition towards connected, intelligent and software-defined mobility. ECUs have become central to managing engine performance, emissions, safety, body electronics and vehicle connectivity, with demand rising across both conventional and electrified powertrains.

Looking ahead, the ECU market is expected to witness sustained growth, driven by the proliferation of advanced driver assistance systems (ADAS), connected vehicle technologies, electrification and software integration. Increasing consolidation of vehicle architectures into domain and zonal controllers will further enhance the importance of high-performance electronic control systems.

Growing demand for feature-intensive vehicles and the focus of OEMs to provide advanced software features are the drivers for the growth of the automotive electronic control units (ECUs) market. In addition, the rising demand for safety systems in vehicles and the increasing need to reduce fuel consumption and pollutant emissions are further attributed to drive market growth. (Grandview Research).

These trends present significant opportunities for UCAL with expertise in embedded electronics, software integration, intelligent control systems and mechatronic product development. The Company is expanding its geographical footprint in the ECU market with custom designed for OEMs, OES and the Export Aftermarket segment to address the evolving requirements of next-generation mobility

f. Automotive Electronics

The automotive electronics industry witnessed robust growth during FY 2025-26, underpinned by increasing vehicle electrification, software-defined architectures and rising consumer demand for connected, safe and intelligent mobility. Electronics content per vehicle continued to increase across both conventional and electric vehicles, supported by advances in powertrain control, body electronics, safety systems and vehicle connectivity.

Automotive electronics now extend across powertrain control, safety systems, ADAS, infotainment, connectivity, battery management, body electronics, and vehicle diagnostics, making electronics the central nervous system of modern vehicles. The growing integration of semiconductors, sensors, control units, and embedded software has significantly increased electronic content per vehicle across all segments

The long-term outlook remains highly positive as digitalisation reshapes the automotive value chain. Growing adoption of intelligent control systems, embedded software, sensors and electronic actuators is expected to significantly expand market opportunities, favouring suppliers with strong capabilities in electronics, software integration and mechatronic product development. The overall market is projected to grow at a CAGR of approximately 8% to 10%, driven by higher electronic intensity per vehicle and the proliferation of software-defined vehicle architectures.

UCALs state-o-the-art Electronics manufacturing facility, with a dedicated R&D is accelerating the development of a wide array of Automotive Electronic products to address the growing demand in the segment.

g. Global Automotive Emission Control Systems Market

The global automotive emission control systems market in FY 2025-26 continues to remain a structurally important and regulation-driven segment of the automotive components industry. Despite the gradual shift toward electrification, emission control technologies remain critical for internal combustion engine (ICE) and hybrid vehicles, particularly as global regulators tighten permissible limits on NOx, C0₂, particulate matter, and hydrocarbon emissions.

During the year, market demand has been sustained by the continued production of ICE vehicles in emerging economies, the expansion of hybrid powertrains globally, and the ongoing need for after- treatment and exhaust management systems across both passenger and commercial vehicle segments.

Key technologies such as catalytic converters, diesel particulate filters (DPFs), selective catalytic reduction (SCR) systems, exhaust gas recirculation (EGR) units and evaporative emission control systems continue to witness steady adoption.

The market potential for emission control systems is large and growing at an exponential rate. The global automotive emission control systems market is projected to experience significant growth in the coming years, driven by increasing environmental regulations and the need to reduce pollution. IMARC Group estimates the market to reach USD 40.57 billion by 2033, exhibiting a CAGR of 6.11 % during 2025-2033.

In the long term, emission control systems will evolve from conventional mechanical after-treatment components to highly integrated, electronically controlled, and sensor-driven systems, closely linked with ECU platforms and powertrain control architectures. This evolution will ensure continued relevance of the segment even as global mobility transitions toward electrification.

At UCAL, emission control systems form an integral part of our product portfolio. During the year, the Company added to its portfolio of new emission control products for OEM projects aligned to the dynamically changing regulatory standards of the Automotive industry.

h. Die Casting & Precision Machining

The global die casting and precision machining industry experienced steady growth during FY 2025- 26, supported by increasing demand for lightweight, high-strength and precision-engineered components across automotive and industrial applications. OEMs continued to focus on reducing vehicle weight, improving manufacturing efficiency and enhancing component integration, driving investments in advanced aluminium casting, CNC machining and automated production technologies.

The long-term outlook remains positive as demand expands across conventional, hybrid and electric vehicle platforms. Lightweight structural components, battery housings, transmission systems, e-axles and precision powertrain components are expected to remain key growth segments. Manufacturers with integrated casting, machining, automation and value engineering capabilities will be well positioned to capitalise on evolving customer requirements.

UCALs backward-integration capabilities in casting and precision machining facilities across its Plants in India lend it a competitive edge to design and manufactures High Pressure Die Casting and Precision Machined Products for mission-critical applications both for domestic and global OEMs.

In alignment to its Repositioning and New Product Development Strategies for export growth, the Company enlarged its presence in the rapidly growing casting and machining segment, recording a significant rise in sales revenue during the year

8. BUSINESS REVIEW

a. Manufacturing

UCALs manufacturing network, strategically located across India, combines advanced automation, precision engineering and digitally enabled production systems to serve leading global OEMs and automotive customers. During the year, in line with its growth strategy, UCAL expanded manufacturing capabilities through the successful commissioning of new production lines for Mechanical Throttle Bodies, Crankcase and E-Purge Systems across its Bawal and Maraimalai Nagar facilities. The Bawal plant achieved successful production ramp-up of twowheeler and three-wheeler crankcase lines, including zero-defect manufacturing performance for the three-wheeler programme, while automated throttle body lines were established to support global OEM requirements. The Company further strengthened its smart manufacturing capabilities with robotization, deploying Al-based calibration verification and memory lock systems with end-to-end traceability and data recording, enhancing process reliability, quality assurance and customer compliance.

These initiatives reinforce UCALs commitment to building future-ready manufacturing capabilities that support product diversification, localisation and longterm sustainable growth.

b. Marketing

UCAL expanded its portfolio of value-led, innovative products to address emerging market segments and new geographies. Keeping pace with the rapidly changing technologies driving the automotive landscape, UCALs new range of products include Mechanical Throttle Body and Electronic Throttle Body Assemblies, Electronic Fuel Injection Systems (EFI) parts, Fuel Rail Assemblies, Oil, Vacuum & Coolant Pumps for Passenger Cars, E-Purge for two-wheelers, Crankcase for 2&3-wheelers, Engine or Electronic Control Unit (ECU) for 2W application. Intake Throttle Valve, HC Doser for different diesel applications in commercial vehicles, Smart Intake Throttle Valve and Water Outlets among others. The portfolio also includes the array of automotive electronic products for multi-applications in addition to the Casting & Machined products for the global auto and non-auto sectors.

Despite the challenging business environment and the de-phasing of the legacy e-Carb and EASV products, overall sales posted an upward growth trajectory with an increase of 19% over the previous year. Sales in new products increased by a significant 150% with Mechanical Throttle Body Assembly, Crank Case and Oil Pumps for 4 wheelers proving major contributors. While the Aftermarket delivered a 32% increase in growth, the OES (Spares) and OE segment registered a growth of 21 % and 19% during the year. A strong order pipeline in new products augurs well for FY 2026-27.

During the year UCAL added four large OEM and Global Manufacturerstoits customer roster, in addition to expanding channel footprint both in the domestic and overseas markets, with strategic distributor and OES supplier partnerships. Participation in major global Auto Expos and Tech Shows with leading OEMs helped showcase the Companys technology and development capabilities while establishing brand presence and visibility.

India is accelerating the transition to green mobility and green energy with supportive government programmes such as the PM e-Drive Scheme and PM e-Bus Sewa Scheme, in addition to the impetus for electronics and battery manufacturing outlined in the budget for FY 2026-27. To leverage the potential in this rapidly growing EV transport ecosystem in the country, UCAL has expanded its product portfolio with a slew of new, value-led, and differentiated products in FY 2025-26.

c. Quality

UCAL continued its transformational journey towards resilience and resurgence by a focused thrust on stringent quality controls, customer- centricity, zero-defect products, safety and sustainability. This was reflected in the various awards received by the Company from key OEMs and both domestic and global auto manufacturers during the year;

Key Customer Awards

• Achieved Platinum Award in Quality and Delivery Performance consistently for 12 consecutive months from a leading Auto Manufacturer, demonstrating sustained excellence in customer satisfaction, operational efficiency, and delivery reliability.

• Maintained 100% Supplier Performance Rating from a leading 2-wheeler Major, continuously for one year, ensuring compliance with stringent quality, delivery, and service requirements.

• Successfully sustained Zero PPM Quality Performance for a leading global 4-wheeler manufacturer throughout the year, reflecting robust quality control systems and defect prevention processes.

• Received the Best Supplier Performance Award from the Spares Division of a leading 2-Wheeler manufacturer in recognition of outstanding quality, delivery performance, and customer support.

• During the year, the Company also successfully completed supplier assessment audits by four leading global automotive OEMs, reaffirming the robustness of its manufacturing systems, quality processes and operational excellence.

d. Technology

UCALs six decades of industry experience and technology leadership, coupled with state-of-the-art manufacturing facilities and best-in-class NABL and DRDO accredited R&D center driving innovation, provides the Company a competitive edge in offering customer value and consolidating its position as a preferred vendor to OEMs and Global Auto manufacturers.

The R&D focus during the year was centred around the development of innovation-led, value engineered products and solutions for mission-critical, and sustainability-driven applications in emerging segments in the Auto and Non-Auto space.

In the Automotive segment, the strategy was to keep pace with the rapidly changing technologies and global regulatory standards dictating the mobility segment such as electrification, hybridization, engine downsizing (Gasoline Direct Injection with Turbo charge), fuel efficiency, zero emission, lightweighting and the increasing use of in-vehicle electronics.

During the year, new products and export sales recorded significant volume growth, contributing meaningfully to overall revenue. Product development initiatives were focused on expanding the portfolio across two-wheelers, passenger vehicles, electric vehicles, domestic and export aftermarket, and deemed export segments.

Key developments during the year included Mechanical Throttle Body Assemblies for two-wheeler.scooter application, Electric Purge Valves for entry level motorcycles, Carburetors for export- oriented two and three wheelers, passenger and commercial vehicle segment. Fuel Rail assemblies for passenger cars, Water Outlet assemblies catering to the export aftermarket. Intake throttle valve for the HCV segment among others.

The Companys Electronics Division with a dedicated R&D wing comprising a team of specialists and domain experts, continued to deepen its capabilities in the design, development and manufacturing of cutting-edge electronic products for the EV segment. Some key products established during the year include DC-DC Converters for three-wheeler electric vehicles. Hybrid and LED Flashers for the three-wheeler EV segment, and Flasher for Bus and Truck applications. A long range of products are in various stages of manufacturing and market launch for FY 2026-27.

The Company also further consolidated its leadership in precision die casting and machining by strengthening its Built-to-Print product portfolio. Major project wins included Crankcase components for three-wheeler applications

e. Global Footprint

In line with its global strategy of expansion and growth in new segments, UCAL enlarged its customer bandwidth and channel presence in the global market with a significant growth in deemed export sales during the year.

The Company enhanced its brand visibility and reputation for quality products across new geographies comprising large OEMs and Auto manufacturers, in addition to Large Distributors and Marquee Merchant Customers for the Aftermarket in the US, ASEAN, Latin American and South African countries.

A trusted vendor and a leading supplier of high-quality automotive systems and components to OEMs and Auto Manufacturers in the country, the Companys deemed exports business gained momentum forming an integral part of vehicles sold in more than 100 countries worldwide.

9. FINANCIAL AND OPERATIONAL PERFORMANCE

a. Financial Performance

During the year, your Companys total standalone revenue was Rs.64,664.34 Lakhs as against Rs.58,279.83 Lakhs in FY 2024-25 representing an increase of

10.95% over that of the previous year due to increase in customer and market demand.

The Consolidated revenue of the Company has also witnessed an increase from Rs.80,229.47 Lakhs in FY 2024-25 to Rs.83,782.06 Lakhs in FY 2025-26 registering a growth of 4.43%.

The PBDIT has declined from Rs.7,495.87 Lakhs (FY 2024-2025) to Rs.5,866.56 Lakhs (FY 2025-2026) on account of the fact that in FY 2024-25 the profit on sale of land had resulted in higher PBDIT and in the currentyearFy2025-26therewassurge in raw material cost and production overhead. . The Company has recorded a Loss After Tax (PAT) of Rs.9,676.68 Lakhs mainly on account of recognizing the impact of the dilution of the controlling interest in the subsidiary to the extent of Rs.10,368.27 lakhs and recognition of statutory financial impact of the implementation of new labour code amounting to T239.08 lakhs as an Exceptional Item. The Consolidated net loss during the year was Rs.3,332.32 Lakhs in comparison with previous year which stood at Rs.1,628.00 Lakhs.

The Finance Cost has decreased from Rs.2253.61 Lakhs in FY 2024-25 to Rs.2,113.39 Lakhs in FY 2025-26 mainly on account of repayment of certain borrowings made by the Company during the year.

The Depreciation stood at Rs.2,344.12 Lakhs for the year ended 31^st March, 2026 under study when compared to Rs.2,227.28 Lakhs in the previous year 2024-25.

The Company has recorded Profit Before Tax (PBT) for the Financial Year 2025-26 at Rs.1,409.04 Lakhs before effecting exceptional item as against Rs.3,014.98 Lakhs, in the previous year.

During the year ended 31^st March 2026, the Company has made addition to the fixed assets to the tune of Rs.3,358.88 lakhs including net assets capitalized from WIP and Capital Advances.

The Company has followed the guidelines of accounting standards laid down by the Institute of Chartered Accountants of India (ICAI) in preparation of its financial statements.

b. Sales Performance

Enlarging customer bandwidth with innovative cutting-edge products and value-added engineering, deepening channel density and brand visibility, expanding geographical footprint and foraying into new and emerging segments, were some of the go-

to-market strategies deployed during the year to grow the business. While the deemed exports segment witnessed significant demand, direct exports faced headwinds from tariff wars and geopolitical tensions. The Aftermarket however contributed to significant arowth across the OEM and Snares seaments.

		(Rs. In Lakhs)
Product	FY 2025-26	FY 2024-25
IBIj Carburettors & ^ Parts	60,315.87	51,560.88
Jmf ecu	3,870.24	6,151.12
Scrap /Other kH Operating income	478.24	567.83
Total	64,664.34	58,279.83

10. RISK AND CONCERNS

Risk management in a company is a structured and continuous process aimed at identifying, assessing, and mitigating potential risks that could impact business objectives, financial performance, operational continuity, and reputation. It encompasses a wide range of risk categories, including strategic, operational, financial, regulatory, cyber, and environmental risks. An effective risk management framework enables timely decision-making through robust internal controls, regular risk assessments, and defined escalation mechanisms. It also integrates risk awareness into the organisations culture, ensuring accountability at all levels. By proactively addressing uncertainties and building resilience against disruptions, risk management strengthens business sustainability, protects stakeholder value, and suports long-term strategic growth in an increasingly volatile and complex global environment.

The Company has devised a suitable framework to identify and evaluate risks. Periodic assessments are carried out to identify risks and brief the management on the risks in advance to enable the Company to control the risk through a properly defined plan. The risks are classified as financial risks, operational risks, market risks and statutory compliance risks. The risks are evaluated based on previous experience, probability of occurrence, probability of non-deletion and its impact on business and are taken into account while preparing the annual business plan for the year. Insurable risks are covered by insurance policies to protect the Company interests. The Board is also periodically informed of the risks and the actions taken to manage them. The Company manages its risks by incurring prudent capital expenditure, by ensuring that customers underwrite the capacities created specifically for their requirements, by determining the prices of its products on a scientific basis based on detailed studies, by prudent financial management, by localization to protect itself from exchange risks, constant R&D efforts and by spreading its markets and manufacturing facilities geographically. The committee assists the management in assessing the market risks, competitors risks, product obsolescence risk and devises strategies to overcome the same.

11. HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS

At UCAL, people are considered the Companys greatest asset. In line with this, the Companys HR vision is driven by the philosophy -

To build a future-ready, high-performing workforce at UCAL through continuous learning, innovation, and a culture of safety and collaboration.

Further to the vision, UCALs Human Resources (HR) department is driven by the guidelines:

• To help employees realize their potential - to develop, grow and achieve their purpose

• To build the right culture and capabilities

• To make the Company a great place to work for passionate, innovative people who wish to make a difference

The Company firmly believes that fostering a positive employee experience and a high degree of engagement is critical to motivate and develop employees to reach their highest potential. Towards this, the Human Resources function focuses on enhancing employee capabilities through structured training, skill development, leadership grooming, performance management, and continuous learning initiatives.

UCALs people management policies are aimed at aligning individual growth with organisational objectives, thereby improving productivity, innovation, and employee engagement. In an evolving business environment marked by rapid technological change and increasing competitiveness, people development plays a critical role in building a future- ready workforce equipped with both technical and behavioural competencies, in addition to emotional well-being.

During the year, the Company continued to build its leadership pipeline by training high potential employees under structured leadership programme for greater future responsibilities. To build a strong and capable people asset, curated learning and development workshops, skill - building and training programmes, were conducted across the Company fostering a culture of knowledge enhancement and continuous growth.

Health and well-being of employees was given the highest priority. Employee Mind Wellness programmes with individualized counselling sessions were conducted to improve decision clarity under pressure, build emotionally intelligent leadership, reduce team burnout, and create a healthy work culture.

The transformational journey initiated by the Company in FY 2022-23 has ushered in a sea change of employee engagement and a collaborative team culture, amplifying efficiencies through innovation, creativity, and increased productivity. While the laser focus on Kaizen continued to foster a culture of collaboration, employee engagement and continuous improvement, multi-level review and communication meetings anchored by the senior management team members across locations and departments promoted a greater sense of transparency, accountability and goal-alignment.

To broad-base communication initiatives, the on-line Company Newsletter was revamped from a Quarterly to a Monthly Bulletin, transforming into a robust interactive platform for employee engagement and interaction across locations.

UCAL upholds an inclusive, positive workplace environment, free from harassment of any nature. In line with this, the Company has institutionalized an Internal Complaints Committee (ICC) at all locations across India to consider and address sexual harassment complaints in accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There were no incidents of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

At UCAL IR (Industrial Relations), focuses on maintaining harmonious employer-employee relationships through effective communication, fair labour practices, statutory compliance, and constructive engagement with employee representatives. A stable industrial relations environment minimises disruptions, fosters mutual trust, and ensures smooth operational continuity. Open dialogue, grievance redressal mechanisms, and participative management practices, together, with strong HRD and IR systems create a balanced ecosystem that supports organisational stability, enhances employee satisfaction, and contributes to sustained business performance.

The Company continues to maintain its record of good industrial relations without any interruption in work and has carried out restructuring process at different plants to ensure operating flexibility and competitiveness among the workforce to deliver maximum productivity at all plants.

Total Number of employees as on 31^st March 2026 is 630

12. HEALTH, SAFETY AND ENVIRONMENT

At UCAL the health and safety of employees are always accorded the highest priority. The Company is certified for the highest standards in environmental and occupational health and safety management systems. Annual medical check-ups and health care programmes for employees ensure prevention and detection of ailments for early remediation.

UCALs safety policy is driven by a strict protocol comprising an adherence to stringent safety rules and regulations. Preventive measures to ensure workplace safety include awareness programmes, mock drills, training on life saving skills, and communication meetings for employees emphasizing the importance of adhering to safe working practices.

13. SUSTAINABILITY

Sustainability remains integral to UCALs long-term growth strategy, with a strong focus on responsible manufacturing, environmental stewardship and resource efficiency.

In line with its sustainability-centred business model, UCAL is focused on the best practices in environment care such as adherence to stringent pollution norms across its factories, prevention of resource depletion through water conservation and circular process systems, developing a green belt, waste management and the adoption of renewable energy for its operations.

The Companys manufacturing facilities are certified for ISO 14001 Environment System and ISO 45001:2018 Environment Health & Safety Standards with periodic assessments to ensure compliance. In line with its mandate to reduce its environmental footprint, the Company continued to optimize operational efficiencies, reduce cost, and eliminate wastage, while adhering to the highest emission and zero discharge standards. Enhancing renewable energy usage with energy efficient processes and circular practices in resource management formed a vital part of a leaner, greener model of operations.

During FY 2025-26 UCAL achieved a significant reduction of approximately 31% in its carbon footprint across all its locations, exceeding the annual target of 12%.

UCAL also successfully completed the ISO 14064-3 third-party verification for greenhouse gas emissions, including the consolidation of data for Scope 1 and Scope 2 emissions. A comprehensive Materiality Assessment Survey was conducted across all plants and based on stakeholder feedback and survey results, five material topics were identified as key focus areas - Safe Workplace, Waste Management, Energy Management, Supply Chain Sustainability, Information Security.

During the year, the Company further strengthened its ESG governance framework through the constitution of the UCAL Sustainability Board comprising members from the Senior Leadership Team together with an ESG Management Team for each of the Environmental, Social and Governance pillars. A comprehensive Materiality Assessment Survey was also conducted across all plants and a structured framework of key ESG Policies was approved for implementation.

14. INTERNAL CONTROL SYSTEM

The Company has an efficient internal control system commensurate with its size and nature of business to safeguard the assets of the Company and to ensure effective utilisation of resources. These controls ensure that transactions are completed on time and in an accurate manner and by following proper procedures and systems. The Company has external teams carrying out audit to strengthen the internal audit and risk management functions. The internal auditors cover a wide area of operations and this is being continuously reviewed by the Audit Committee. Internal audit is conducted on a quarterly basis by a team of internal auditors and the reports together with the action taken reports are reviewed by the Audit Committee periodically. The Board and Audit Committee ensure that the internal financial control system operates effectively and they regularly review the effectiveness of internal control system in order to ensure due and proper implementation and due compliance with applicable laws, accounting standards and regulatory norms. A system of management controls is also in place to ensure higher levels of efficiency and to keep the organization competitive. All the critical functions of the Company i.e.. Sourcing and Procurement, Manufacturing, Costing, Finance, Dispatch and Sales are handled through Oracle fusion system which is well-integrated. Checks and controls have been built into the system to handle the transactions. Existing internal controls provide adequate assurance to the management for all the transactions covering operations, inventory, fixed assets, financial records and compliance to statutory requirements. The systems and controls are reviewed periodically to ensure their effectiveness.

15. OUTLOOK

Continuing in its path of resilience and resurgence, UCAL has drawn a strategic roadmap aligned to a clearly defined upward - trajectory of growth and global expansion. Leveraging on its strength as a manufacturer of repute of a wide range of automotive components and global mobility systems, the Company will continue to expand its ambit of operations in emerging segments in a dynamically evolving automotive and non-automotive landscape worldwide.

The Companys engineering and domain expertise, multi-plant operations, wide portfolio of products and strong sectoral credentials serve as a strong competitive advantage and provide the headroom to achieve its chartered growth plans.

16. SIGNIFICANT CHANGES IN KEY FINANCIAL RATIO

S. No	Ratio	UOM	Formula	31-03-2026	31-03-2025	% Variance	Reason for variance
1.	Current ratio	Times	Current Assets/Current Liabilities	0.93	0.84	9.85	-
2.	Debt- Equity Ratio	Times	Total Debt/ Shareholders Equity	0.65	0.53	22.60	-
3.	Debt Service coverage Ratio	%	Earnings available for Debt Services/Debt Services	(51.13%)	50.72%	(101.85)	?k
4.	Return on Equity (ROE)	%	Net profit after tax/Shareholders Equity	(29.56%)	6.20%	(35.76)	?k
5.	Inventory Turnover Ratio	Times	Cost of Goods Sold/Average inventory	6.44	6.62	(2.76)	-
6.	Trade Receivable Turnover Ratio	Times	Net Credit sales/Average Accounts receivable	6.55	6.69	(2.02)	-
7.	Trade Payable Turnover Ratio	Times	Net Credit Purchases/ Average Accounts Payable	3.89	4.06	(4.38)	-
8.	Net Profit Ratio	%	Net Profit/Net Sales	(14.87%)	1.15%	(16.02)	-
9.	Return on Capital Employed	%	Earnings before interest and taxes/Capital Employed	(18.79%)	11.74%	(30.53)	?k
10.	Net capital turnover ratio	Times	Net sales/Working capital	37.16	15.07	146.60	#
11.	Return on investment	%	[MV (cl) - MV (op)]/MV (op)*	(171.36%)	0.66%	(172.02)	?k

* The decline in the ratios compared to the previous year is primarily on account of exceptional items aggregating to Rs.10,607.35 Lakhs recognized during the year (Refer Note no : 29)

"The Net Capital Turnover Ratio has been presented in absolute terms to accurately depict the effective utilization and increase in net working capital.

17. CAUTIONARY STATEMENT

Certain Statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates and others may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections and so on whether express or implied. Several factors could make a significant difference to the Companys operations. These include climatic conditions and macroeconomic conditions affecting demand and supply, government regulations and taxation, natural calamities and so on, over which the Company does not have any direct control.