Cranex Ltd Management Discussions

• INDUSTRY STRUCTURES AND DEVELOPMENTS

The potential growth of demand of the equipment manufactured by us (cranes, construction and material handling equipments) is tremendous. The demand is linked with growth of infrastructure, Railways, Highways, Power sector and indirectly with the growth of Indian economy. It requires expertise, in terms of technology, design and providing customer satisfaction. Its potential and market is huge; however only companies who would be able to provide good quality products at most competitive price will survive. The Companys CRANEX brand has emerged as brand for reliability and has been able to win the customer loyalty in all these years. CRANEX LIMITED will continue its successful stint in the industry, through providing good quality products at most reasonable prices and complete customer satisfaction by its strong manufacturing, distribution and service network.

• OPPORTUNITIES

The Governments thrust on infrastructure growth, specially Railways and Power Sectors have raised very good growth opportunities for your Company as these sectors have remained our core focus in the past several years. However, fluctuations in commodity prices have posed serious challenges for sustained future profit growth. To maintain such growth, your Company is taking necessary steps such as expanding its production capacity and focusing on Sectors and industries where we have a strong base. Your Company is also working on various cost-optimisation measures including efficient production process, digitalisation drive across the organization, etc., to eliminate redundancies. Your Company continues to focus on reliable and sustainable quality products so as to be ahead of competition.

Cranex continues to focus on various strategies and initiatives to overcome challenges. These include consolidation of new generation cranes in the targeted market segments. Cranex maintained its market position and is well positioned to achieve growth in terms of volumes and market share through better service levels and by providing the best of technology at an affordable price. We believe that our proactive steps in providing best solutions to our customers and implementation of our strategies have prepared us for growth.

• THREATS

? Economic downturn or slowdown can lead to decreased volumes and capacity utilization.

? Continued threat of material price volatility due to slowdown in supply and demand chain translating into pressure on margins during a rapid increase in raw material prices.

? Weakness in Indian Currency resulting in pressure on margins, especially for imported components and equipment.

? Any change in the government policy or its budgetary allocation to the infrastructure sector will have a major impact on Companys business.

? Change in the tax structure of, GST, Income tax, FEMA, RBI and their tax rates etc.

? Increasing competition from National and International players.

? Unforeseen business losses

? Geo-political environment impacting business with China.

• RISK & CONCERNS

The Companys ability to foresee and manage business risks is crucial in achieving favourable results. The Company operates in an environment which is affected by various risks some of which are identifiable and Controllable some others are unexpected and cannot be controlled. Under these conditions, proper identification and management of risks is very important in determining the ability of the organization to sustain and create value for its stakeholders. The impact of the key risks which are listed below has been identified through a formal process by the management. However, the Company has been taking appropriate measures to mitigate these risks on a continuous basis. Some of the risks that are potentially significant in nature and need careful monitoring are listed hereunder:

• CONTINUED ECONOMIC GROWTH -

Demand of our equipment / machines is dependent on economic growth and / or infrastructure development. Any slowdown in the economic growth affects our growth.

• MARKET RISK-

The Indian economy is slowly recovering from the COVID Pandemic impact hence infrastructure spends will take time to kick in. Consequently, demand for your Companys products is picking up. However, due to stiff competition from other players securing orders with decent margins is a challenging task, which your Company is trying its best to do.

• FOREIGN CURRENCY RISK-

Due to Govt. continuous assertion on import of Chinese goods the Exchange rate fluctuations have an adverse impact on the Company. Further the current Geo-political environment and new Government policies are making it very difficult to continue the Elevator & Escalator business in its present form. Your Company is making efforts to reinvent its resources to indigenize spare parts required for maintenance.

• CYCLICAL NATURE OF THE INDUSTRY-

The Companys growth is linked to those of the crane Industry, which is cyclical in nature. The demand for crane has a significant impact on the demand and prices of the products manufactured by the Company. A fall in the demand and / or prices would adversely impact the financial performance of the Company.

• CAUTIONARY STATEMENT

Statements made in this report describing the Companys objectives, projections, estimates and expectations may be "forwardlooking statements" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Companys 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.

		By Order of the Board of Directors For Cranex Limited
	Sd/-	Sd/-
	Chaitanya Agrawal	Piyush Agrawal
	Whole Time Director & CFO	Managing Director
Date: 26-08-2023 Place: New Delhi	DIN: 05108809	DIN:01761004