Ultra Wiring Connectivity Systems Ltd Management Discussions

GLOBAL ECONOMIC REVIEW

The automotive industry has continued to experience significant innovation and technological advancement in the electric vehicle (EV) sector during FY 2024 25. Key developments include the expansion of EV charging infrastructure, improvements in battery technology resulting in extended driving ranges, and reductions in the overall cost of electric vehicles. These advancements have enhanced the value proposition of EVs, positioning them as a viable and increasingly attractive alternative to internal combustion engine (ICE) vehicles.

As a result, there has been a marked shift in consumer preference towards EVs and other alternative fuel vehicles, which is expected to drive robust growth in the automotive ancillarys products market throughout the forecast period. This growth trajectory is supported by increased investment in supporting technologies and a favourable regulatory environment promoting sustainable mobility solutions.

However, despite these advancements, range limitations of battery-operated vehicles remain a key challenge impacting consumer adoption. Range anxiety, especially in regions with underdeveloped charging networks, continues to be a concern that the industry must address through further technological innovation and infrastructure investment.

The global automotive industry is expected to see moderate growth in 2025, with global light vehicle sales projected to reach 85.1 million units, a 1.3% increase from 2024. While internal combustion engine (ICE) vehicles will still hold the majority share, the Hybrid Electric Vehicle (HEV) segment is anticipated to grow by 20-25%. The industry is also experiencing a shift towards electric vehicles (EVs), with projections indicating they could account for over 20 million sales by 2025

The Indian automobile component industry is expected to experience moderate growth in 2024-25, with domestic demand from OEMs and replacement markets projected to grow by 7-9% and 5-7% respectively, according to industry experts. The industry is also benefiting from increased exports, particularly in the replacement segment, driven by factors like the rising average age of vehicles and the growing global market for used vehicles.

The domestic OEM market is a major driver of growth, with an estimated 7-9% increase projected for 2024-25. This growth is fuelled by premiumization of components and higher value addition.

Replacement Demand:

The replacement market is also expected to grow by 5-7% in 2024-25, driven by factors like a larger vehicle parc, the increasing average age of vehicles, and a rise in used car purchases.

Exports:

Exports of auto components are expected to continue growing, with opportunities for Indian players in metal castings and forgings due to plant closures in the EU.

Government Support:

The Indian government is actively supporting the auto component industry through various initiatives like the Production Linked Incentive (PLI) scheme and the Electric Mobility Promotion Scheme.

Challenges:

The industry faces challenges such as potential import tariffs on auto component exports, which could impact the export segment. Additionally, the industry needs to manage rising costs and ensure competitiveness in the global market.

Focus on EVs:

The growing adoption of electric vehicles (EVs) in India is creating new opportunities for auto component manufacturers, with a focus on developing components for EV powertrains, batteries, and related systems.

Technology Advancements:

The industry is also seeing increased adoption of advanced technologies like telematics, connected car solutions, and autonomous driving features, which is driving demand for new types of components.

Ultra Wiring Connectivity Systems Limited (UWCSL) is one of the fast-growing automotive parts manufacturing companies, and supply highly engineered, high-quality, complex, and tailored components for Indian mobility OEMs for both automotive and home-appliances segments.

It was incorporated in 1991 as a sole proprietorship firm and today have gained the status of a listed Company in the name of Ultra Wiring Connectivity System Limited. The Headquartered/ Register office in Faridabad, UWCSL is a leading supplier for the fast-growing global EV market.

The Company has a diversified revenue base across geographies, products, vehicle segments, and customers. An innovation-driven Company, UWCS develop, produce, manufacture and deliver electrical and automotive equipment and components like Couplers, Bulb Holders, Blade Fuse and Wiper-Blades for OEMs and Tier 1 manufacturers from more than 3 decades and aspires to become one of the most respected and valuable auto ancillary technology companies.

Currently the Company owns 3 Manufacturing Plants, where - Unit 1 & Unit 2 are situated near Delhi in the HSIDC Industrial Area, Faridabad and Unit 3 in ‘Industrial Model Town Faridabad. The

Company also owns a warehouse in Pune to cater the Western markets in India. The Manufacturing Plants are equipped with 40 Fully Automatic, All-Electric and PLC- Controlled Injection Molding Machines, most of them are imported from Japan and Taiwan. Our plant is supported by a well-equipped in-house Tool-Room, where precision moulds and dies are manufactured as per Japanese Standard JASO D 616-2011 & ISO 8092.

The market has shown consistent progress in recent years. The expansion of the auto industry largely driven by infrastructure development and GDP growth is expected to gain further momentum due to a range of policy initiatives introduced by the government.

For FY 2025-26, growth is projected to 12 15% with the Companys strategic initiatives such as product diversification and expansion of its customer base. Additionally, increased supplies to new platforms, driven by global OEMs vendor diversification, greater value addition through enhanced outsourcing by global Tier-I suppliers and OEMs, along with rising aftermarket demand in international markets (due to vehicle aging and rising used vehicle sales), are favourable developments for Indian auto component manufacturers.

Over the medium to long term, the auto component sector is likely to benefit from emerging opportunities in electric vehicles (EVs), emphasis on indigenization, and evolving regulatory frameworks. These factors, supported by higher content per vehicle, are anticipated to support steady industry growth.

Domestic OEMs contribute over 50% of the industrys total sales. However, demand is expected to ease in FY 2025-26, particularly in the passenger and commercial vehicle segments.

The Board remains optimistic about the coming year, expecting robust demand in the Passenger EV and Medium & Heavy Commercial Vehicle segments. The management is actively advancing product development and customer acquisition strategies under the Boards strategic guidance.

Despite ongoing geopolitical uncertainties across the global market, the Indian auto component industry has demonstrated strong resilience. OEM demand remained robust during the year, The shift toward

"green mobility" is expected to boost volumes in the EV segment.

Government focus on infrastructure development and continued GDP growth is anticipated to drive increased demand for both passenger and commercial vehicles. Key growth enablers for the auto sector include favourable conditions such as Indias expanding economy, rising middle-class income, infrastructure investments, and strong replacement demand. Additionally, the transition to BS-VI compliant vehicles and vehicles adhering to revised axle-load norms provides further momentum.

During the previous year, the Company has started manufacturing of Soft Wiper Blades for high-end cars. During the year under review, the Company has increased its manufacturing capacity for Soft Wiper Blades. The company has also increased its manufacturing capacity for its other products in Auto and White-goods segment. Our company will continue to focus on EV businesses in coming years.

A significant portion of the Companys revenue is derived from Tata Motors Limited, Samvardhana

Motherson and Lumax group. While efforts are underway to increase business volumes and product offerings to these customers, the Company is also prioritizing customer diversification by targeting other automotive OEMs through new product development and business acquisition initiatives.

The Companys primary raw material plastic and CRC face upward prices during the year. Although customers typically adjust for price fluctuations, there is constant pressure to reduce process and operating costs. Rising minimum wages also contributed to increased costs during the year. To overcome these challenges, the Company is undertaking initiatives to produce multi-cavity moulds to improve productivity.

The Company has implemented a comprehensive framework of internal financial controls and compliance systems. These are subject to periodic audits by internal auditors and a reputed accounting and auditing firm. Regular reviews by the Audit Committee affirm that the internal control mechanisms were effective and adequate throughout FY2024 25.

The Company considers its human capital as its most valuable asset, it significantly influences organizational growth, profitability, and shareholder value. During the year, the Company made consistent efforts to improve HR policies and processes to drive performance. The Companys vision and mission aim to derive a value-driven culture and promote behavioural competencies essential for achieving both short- and long-term goals.

This Management Discussion and Analysis contains progressive statements within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including economic conditions affecting supply and demand dynamics, changes in government regulations, tax laws, and other relevant factors beyond the Companys control.

ULTRA WIRING CONNECTIVITY SYSTEM LIMITED

Place: Faridabad Date: August 25, 2025