Ultracab (India) Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS </dhhead>

1. Economic overview and outlook

The past year has been shaped by heightened global uncertainties, geopolitical tensions, and fluctuating commodity prices, contributing to an evolving global trade landscape. A series of announcements surrounding trade tariffs added further complexity to the environment. Amidst these challenges, India demonstrated remarkable resilience, driven by steady GDP growth. The nation continues to maintain a robust economic foundation, characterized by strong fundamentals, a youthful demographic, and an increasingly prominent role as a global services hub, as well as an emerging manufacturing center.

However, inflation remained a concern, exerting pressure on disposable incomes and affecting consumer spending patterns. In response, various measures, including income tax relief and cuts in monetary policy rates, were introduced to stimulate consumer sentiment and support liquidity. The agricultural sector also had a strong performance, contributing positively to rural markets.

At Ultracab (India) Limited ("Ultracab" or "the Company"), a manufacturer of wires and cables, we continue to leverage our strong in-house manufacturing capabilities, robust R&D infrastructure, and extensive distribution network to drive innovation and product quality. As a key player in the electrical sector, Ultracab is committed to enhancing energy efficiency, integrating smart solutions, and maintaining a steady growth trajectory while delivering long-term value to both consumers and businesses.

2. INDUSTRY STRUCTURE AND DEVELOPMENTS

We are engaged in the business of Manufacturing Wires & Cables in India. Our Company was incorporated in the year 2007 and is engaged in the manufacture and export of wires and cables in India. We are using advanced technology and machineries for manufacturing quality products. We started our business with PVC cables and wires in India which are now supplied across different networks worldwide. Our quality products are sold not only in India but also in countries like UK, UAE, Africa, Singapore etc. Our manufacturing facility is situated at Shapar (Rajkot, Gujarat) India. Our facility involves modern technology, tools, high-tech machines which spin out the quality standard of cables.

We have a well-equipped research and development unit that helps us immensely to offer innovative products to our clients. R & D is always a boon for staying ahead of others in this extremely competitive environment and our cables and wires have always assisted in the growth of a substantial segment of Indian industry. Our manufacturing facility, spread over 11483.19 sq m area and has 100 per cent in house facility from wire drawing machine until testing on finished products. Our Company has purchased additional Machinery to enhance the production capacities of power and control cables twice.

3. OPPORTUNITIES AND THREATS

Our Company has adequate production capacity to meet an increase in demand. We have more than 1300 products in cable segments, and we are continued to do so. We are approved by various Government authorities to supply them regularly to meets their requirements. We are also approved vendor of various Large Public and Private sector Industries. Increasing overseas demand, Infrastructure development, transmission needs, Growth in sectors other than power like, Mechanical cables, Auto cables, Special cables and Power cables. The company has vast opportunities to expand its product base and also to extend its operations across globe including untapped countries.

Government’s focus on Infrastructure developments such as roads, railways, ports, housing, smart cities is expected to create demand for electrical Wires and Cables. Slowdown in the infrastructure activities may impact the near to mid-term growth prospects for Industrial and Infra segments.

The world market is evaluating Indian companies as an alternative to other Asian countries. Having a wide product range and state of the art manufacturing facilities, gives an opportunity to capture the export market especially the developing countries in Africa and South East Asia. Global economic slowdown led due to pandemic or other factors might reduce the growth opportunity.

4. FINANCIAL PERFORMANCE

Ultracab has demonstrated a strong performance for the fiscal year 2025, with significant growth across key financial metrics. The Companys focus on operational efficiency, strategic investments, and market expansion has led to a marked improvement in revenue and profitability.

Revenue from Operations: The revenue from operations for FY 2025 stood at Rs. 23,943.38 Lakhs, compared to Rs. 12,405.56 Lakhs in FY 2024, registering a robust growth of 93%.

EBITDA: Earnings before interest, depreciation, tax, and amortization (EBITDA) for FY 2025 were Rs. 1944.25 Lakhs, as compared to Rs. 1,307.67 Lakhs in FY 2024, reflecting an increase of 48.68 % over the previous year.

Profit Before Tax (PBT): The profit before tax for FY 2025 was Rs. 1,371.35 Lakhs, an improvement from Rs. 843.45 Lakhs in FY 2024, showcasing a growth of 62.59 %.

Net Profit Margin (PAT): Profit after tax (PAT) for FY 2025 stood at Rs. 972.15 Lakhs, a significant increase of 62.61 % compared to Rs. 597.83 Lakhs in FY 2024.

This performance reflects the Companys consistent growth trajectory, enhanced operational efficiencies, and a favorable market environment.

5. RISK & CONCERNS

Our performance in the year is testimony of the strength of our risk management system that helped us sail through the turmoil successfully. The Company has a Risk Management Manual in place that defines the policies, strategies to decide on the risk taking ability of the organization. Company acknowledges risks, not limited to operational, financial or compliance that could affect the future performance and market positioning of your Company. The Company constantly reviews its exposure to various types of risk, whether it be regulatory, operational, environmental, financial.

The Company’s well-established process of risk management includes identification of design gaps, analysis and assessment of various risks, formulation of risk mitigation strategies and implementation of the same to minimize the impact of such risks on the operations. The process ensures that new risks, which might arise, or the impact of existing risks which might have increased, are identified and a strategy is put in place for mitigating such risks.

Company embraces a risk management portfolio for forecasting and mitigating the impact of internal and external risk factors. The internal risks which are mainly associated with the operations of the Company and the external risks which are linked with the economic and market volatilities are stated below:

Internal Risks:

Policy Risk: Company integrates the risk control measures into the organization’s overall governance by periodically assessing the risks of the policies for internal operations and the statutory issues. Based on the risk assessment, the policies are amended from time to time.

Employee Turnover Risk: Company retains a team of qualified and experienced personnel where the attrition rate is lower than the industry average. The loss of key personnel to competition is a risk where your Company’s technical information would be acquired by the competitors. Company is motivating and rewarding employees to retain talent. Your Company also maintains a policy to acquire talent as a succession plan to support the Company’s growth strategy.

Working Capital Risk: Company caters to the infrastructural and industrial segments, which largely depends on the economy. Therefore, any setback in the economy directly impinges on the demand emerging from the infrastructural and industrial segments. The risk of economic downturn could lead to fund scarcity and delayed realization of receivables which in turn would affect the working capital requirements of Company. Company gives priority to the customers who have sound financial locus standing.

Company closely monitors the working capital requirements by constant follow up on receivables and maintaining lean and symmetric inventories.

Operational Risk: It related to people, processes, systems and external factors have a potential risk on your Company’s performance. To reduce such risk, your Company has a risk-review policy in all areas of operations.

Technology Risk: Company is agile on the technology frontier by constantly reviewing new technology in terms of product and process to avoid obsolescence. The Company has a background of constantly upgrading the technology to maintain its position at par with international players and remain ahead of its peers in the home-turf.

Product Development Risk: Company has been consistently developing new and higher range products. The products have to be validated by type testing and long-term accelerated ageing test from a recognized independent testing laboratory. As these tests have significant cost involvement, any failure in the product development results to financial and opportunity loss. The R&D and in-house testing laboratories of Company have equipped with comprehensive testing facilities which can verify and assess the quality of the product during the process and final stage prior to conducting the certification tests at an independent laboratory.

External Risks:

Competition Risk: The nature of competitive risk is distinct for each product group. The risk involves entry barriers which are gradually being made more stringent by the customers to screen out several players. It is imperative for Company to acquire performance record credentials from the user on supply and installation to qualify as an eligible bidder. It is also necessary to repeat test and revalidate test reports for specific type & design of the product. Company has to keep at par with the development and innovation introduced by the multinational companies to avoid the risk of obsolescence. Company is addressing to the quality conscious customers to retain its market share.

Market Demand Risk: Company is dependent on the infrastructural sector, industries and original equipment manufacturers. The Government policies have a direct bearing on the demand from the various market segments. Company has a broad base clientele, wide product range and flexible manufacturing set-up, therefore, it can somewhat offset the cyclical or depressed demand of affected segment with the other segments. From time-to-time, the Company makes changes in its product-mix to suit the order and demand pattern.

Customer Risk: To mitigate these risks, your Company maintains constant touch with its clientele to understand and deliver products and services aligned to its changing priorities. Your Company maintains strong business relationship with large customers by providing technical guidance and information, support on urgent and crisis requirements to remain virtually in dispensable to the client. Your Company has built a reputation as a preferred supplier with most of its customers by creating a quality trust in a bid to protect itself from competition and entry of new players.

Raw Material Price Risk: The prices of international commodities e.g., copper, aluminum and polymers, which are the key raw material components, are subject to considerable price volatility. Since the market prices of cables are generally on firm price basis, the seesawing prices of these commodities can severely impact the cost of the product where the consequential risk must be borne by Company. Company gives priority to customers who allow price variation on input raw materials.

6. INTERNAL CONTROL SYSTEMS

The Companys internal control systems are commensurate with the nature of its business and the size and complexities of its operations. These systems are designed to ensure that all assets of the Company are safeguarded and protected against any loss and that all transactions are properly authorized, recorded and reported. The Company has an adequate system of internal control in place, which assures of:

Authorization, recording, analyzing and reporting of transactions.

Recording and adequate safeguarding of assets.

Upkeep of accounting records and trustworthiness of financial information.

Corporate policies for financial reporting, accounting, information security, investment appraisal and corporate governance.

Audit Committee of the Board which monitors and reviews all risks and control issues and financial matters.

Computerized and integrated financial and accounting functions, information feedback system of process parameters and backtracking from finished products to raw material stage.

Routine evaluation of all financial operating and information technology system.

Laying down risk assessment and minimization procedures and regular review of the same.

7. Human Resources and Employee Well-being

At Ultracab, we recognize that our employees are the cornerstone of our success, driving innovation, operational excellence, and market leadership in the wires and cables industry. Our human resource (HR) strategy is centered around progressive, employee-centric policies that aim to cultivate a skilled, diverse, and engaged workforce. We strive to create a workplace that promotes professionalism, inclusivity, and continuous learning, empowering our people to thrive in a dynamic global market. This approach aligns their growth with the Company’s long-term vision.

To build a future-ready workforce, Ultracab invests significantly in talent development through structured training programs designed to enhance technical proficiency, leadership skills, and behavioral competencies. We promote a culture of recognition and meritocracy, celebrating outstanding contributions through rewards and providing ample career advancement opportunities.

As of March 31, 2025, the Companys permanent employee strength stood at 110.

We are deeply committed to safeguarding the well-being and safety of our workforce, ensuring that employees can perform at their best in a secure and supportive environment. Key initiatives include:

Safe Working Conditions: Ultracab invests in modern infrastructure and enforces strict safety protocols to maintain a safe and healthy work environment for all employees.

Industrial Relations: We prioritize harmonious industrial relations, fostering constructive and cordial relationships across all levels of the organization.

Ultracab remains dedicated to nurturing a motivated, skilled, and safe workforce to drive sustained growth and success.

8. KEY FINANCIAL RATIOS

Ratio	FY 2024-25	FY 2023-24	Change	Explanation for change in the ratio by more than
				25% as compared previous year	to the
Debtors Turnover Ratio	5.68	7.04	19.32 %	Not applicable
Inventory Turnover	2.56	1.47	-74.73	Not applicable
Ratio			%
Interest in Coverage	3.02	3.27	7.65 %	Not applicable
Ratio
Current Ratio	2.35	2.86	17.68 %	Not applicable
Debt Equity Ratio	0.39	1.34	70.86 %	Due to repayment of Non-
				Current Borrowings
Operating Profit	3.04	2.01	-	Not applicable
Margin%			51.20%
Net Profit Margin	0.04	0.05	15.75 %	Not applicable
Return on capital	0.15	0.09	-68.31	Not applicable
employed %			%
Return on Net Worth	0.11	0.16	29.26 %	Due to funds	Inflow
				Through Right Issue and
				Low Margin on Big Orders

9. CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Company’s objectives, projections, estimates, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the

Company’s operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.