Vinyas Innovative Technologies Ltd Management Discussions

Global Economy

Overview

Global economic growth has remained fairly moderate. The global economy grew by 3.3 per cent in 2023. The International Monetary Fund (IMF) has projected growth of 3.2 per cent and 3.3 per cent for 2024 and 2025, respectively. Over the next five years, global growth is expected to average around 3.2 per cent, which is modest by historical standards. While the global headline inflation is expected to decline, it is likely to be more in the advanced economies than in emerging markets and developing economies. The risks to medium term growth prospects still abound and tilt the baseline scenario to the downside amid elevated levels of policy uncertainty.

Despite higher interest rates, advanced economies (AEs) witnessed stable growth in the first half of 2024. This was on account of moderating inflation and sustained employment and consumption. However, the growth outlook differs between the United States (US) and the Euro Area. Growth in the US is expected to remain strong at 2.8 per cent in 2024 and may decline slightly in 2025, reflecting a moderation in consumption and exports.

The global composite Purchasing Managers Index (PMI) has stayed in the expansion zone for the fourteenth month in a row (as of December 2024). The services sector continues to show strength while manufacturing PMI indicated contraction.

In 2024, the global manufacturing PMI started strong, moving into expansion for the first time since mid-2023 and remained so through the first half of the year. By July 2024, weaker conditions pushed the PMI back into contraction. Following four months of gradual declines, the global manufacturing sector stabilised in November with an index value of 50.0, indicating no overall change in operating conditions.

On the global services front, the global Services PMI Business Activity Index rose to a four-month high of 53.8 in December. This signals expansion for the twenty-third consecutive month.

Inflation Declined globally due to monetary tightening but remained high in services, driven by wage growth.

Geopolitical uncertainties continue to pose risks to the global economic outlook: Geopolitical risks remain elevated due to ongoing conflicts, which pose significant risks to the global economic outlook. These risks can influence growth, inflation, financial markets, and supply chains. An intensification of the evolving conflicts in the Middle East, or the Russia-Ukraine conflict, could lead to market repricing of sovereign risk in the affected regions and disrupt global energy markets. However, any damage to energy infrastructure could tighten supply, adding uncertainty to the global economic outlook. Tensions in the Middle East have disrupted trade through one of the critical shipping routes - the Suez Canal. These disruptions have led to higher freight rates along major shipping routes, which in turn impact global trade activity. Heightened risks are also evidenced by other indices, such as the Geopolitical Economic Policy Uncertainty index, which remains elevated due to global concerns about economic policies. Similarly, the World Trade Uncertainty Index has risen, driven by trade tensions and policy shifts in major economies. Trade policy uncertainty has increased sharply in recent months, though it has not yet reached the levels seen in 2018-19. The stock of import-restrictive measures within G20 economies continues to grow, now affecting 12.7 per cent of G20 imports?more than three times the coverage of such measures in 2015. If uncertainty persists and trade-restrictive measures continue to rise, they could increase costs and prices, deter investment, hinder innovation, and ultimately reduce global economic growth. In light of these developments, Medium-Term Outlook elaborates on the global factors and the importance of strengthening the levers of domestic growth.

Despite this market reassessment, global financial conditions have eased this year, reflecting solid risk appetite following last years progress on disinflation and diminished concerns about the possibility of a sharp slowdown in global growth. In particular, global equity markets have made sizable gains.

Overview

A steady growth trajectory shapes the global economic outlook. Though regional patterns vary. The near-term global growth is expected to be a shade lower than the trend level. The services sector continues to drive global expansion, with notable resilience in India. Meanwhile, manufacturing is struggling in Europe, where structural weaknesses persist. Trade outlook also remains clouded in the next year.

Inflationary pressures have been easing globally, though risks of synchronised price pressures linger due to potential geopolitical disruptions. However, the pace of rate cuts varies across regions depending on the growth imperatives and the pace of disinflation, creating potential divergences in economic recovery.

Global growth is slowing due to a substantial rise in trade barriers and the pervasive effects of an uncertain global policy environment. Growth is expected to weaken in 2025, with deceleration in most economies relative to last year. In 2026-27, a tepid recovery is expected, leaving global output materially below January projections. The outlook largely hinges on the evolution of trade policy globally. Growth could turn out to be lower if trade restrictions escalate or if policy uncertainty persists, which could also result in a build-up of financial stress.

On the upside, uncertainty and trade barriers could diminish if major economies reach lasting agreements that address trade tensions. The ongoing global headwinds underscore the need for determined multilateral policy efforts to foster a more predictable and transparent environment for resolving trade tensions, some of which stem from macroeconomic imbalances. Global policy efforts are also needed to confront the deteriorating circumstances of vulnerable EMDEs amid prevalent conflict and debt distress, while addressing long-standing challenges.

Going forward, while divergent paths of monetary policies across countries could generate significant fluctuations in exchange rates and capital flows, emerging protectionism can fragment global trade flows. Therefore, rebuilding of fiscal buffers by countries is seen as a pre-requisite to be able to respond to unforeseen adverse events.

The global economy today is at an inflection point. The forces that once drove economic convergence and lifted billions out of poverty are now in retreat. But this moment offers a chance to reset the agenda?with renewed global cooperation, restored fiscal responsibility, and a relentless focus on creating jobs. With decisive action, governments across the world can still regain the momentum of poverty reduction?and deliver rising living standards for the next generation.

Indian Economy

Overview

Domestic economy remains steady amidst global uncertainties. As per the first advance estimates released the real and nominal gross domestic product (GDP) growth rates pegged at 6.4 per cent and 9.7 per cent, respectively, in FY 2024- 25. From the angle of aggregate demand in the economy, private final consumption expenditure at constant prices is estimated to grow by 7.3 per cent, driven by a rebound in rural demand. The real growth of gross fixed capital formation is estimated at 6.4 per cent in FY 2024-25. From the aggregate supply angle, real Gross Value Added (GVA) is estimated to grow by 6.4 per cent.

In FY 2024-25, Continued global uncertainty has affected the manufacturing exports. However, growth in the services sector is projected at 7.2 per cent.

Inflationary pressures have moderated in FY 2024-25 with the retail inflation easing to 4.9%(up to December), compared to 5.4% in FY 2023-24. This decline was driven by benign core inflation trends. Core services inflation has declined by 0.9% between FY24 and FY25 (up to December). Indias CPI inflation is anticipated to ease to 4.7-4.8% for FY25, driven by declining food inflation and stable global commodity prices. Assuming a normal monsoon and no further external or policy shocks, the RBI projects headline inflation to be 4.2% in FY26. Commodity prices are expected to decrease by 5.1% in 2025 and 1.7% in 2026.

A higher increase in overall imports than exports raised the trade deficit from US$ 69.7 billion over April-December 2023 to US$ 79.5 billion in the same period of 2024-25.

Indias services sector exports grew by 11.6% in the first nine months of FY25, with net services receipts increasing from Rs. 10,40,426 crore (US$ 120.1 billion) in the same period of FY24 to Rs. 11,37,452 crore (US$ 131.3 billion) in FY25.

Indias current account deficit (CAD) moderated to 1.2 per cent of GDP in Q2 of FY 2024- 25 against 1.3 per cent of GDP in Q2 of FY 2023-24.

Foreign Direct Investment (FDI) flows recorded a revival in FY 2024-25. While the gross FDI inflows increased from USD 42.1 billion (in April-October of FY 2023-24) to USD 48.6 billion (in the same period of FY 2024-25), net FDI inflows are pegged at USD 14.5 billion in April-October of the current FY.

ECBs net inflows rose to Rs. 79,700 crore (US$ 9.2 billion) from April to October 2025, up from Rs. 24,256 crore (US$ 2.8 billion) in the same period last year.

Indias foreign exchange reserves are estimated at USD 640.3 billion at the end of December 2024. It is sufficient to cover about 90 per cent of the countrys external debt. The import cover - a crucial indicator of external sector stability - is 11 months as of November 2024. Further, the ratio of short-term debt to foreign exchange reserves decreased from 20.3 per cent at the end of June 2024 to 18.9 per cent at the end of September 2024.

Total resource mobilisation from primary markets (equity and debt) stands at Rs 11.1 lakh crore during April-December 2024, recording a growth 5 per cent over FY 2023-24.

Despite various challenges, India continues to register the fastest growth in manufacturing PMI. Manufacturing firms reported improved demand conditions in Q3 FY25 and expect further improvements in Q4 FY25 and Q1 FY26. further improvements in Q4 FY25 and Q1 FY26.

Outlook

Indias growth outlook remains stable, supported by strong domestic consumption and investment trends. India is projected to become a US$ 5 trillion economy by FY28, growing to US$ 6.307 trillion by FY30 with a nominal annual growth rate of 10.2% from FY25 to FY30. Indias nominal GDP is expected to grow at around 10.7% annually.

Defence Market Overview

The global defence industry continues to witness sustained growth, driven by heightened geopolitical tensions, rapid technological advancements, and the need for modernisation of armed forces. As per industry estimates, the global defence electronics market was valued at approximately USD 175-178 billion in 2024 and is projected to grow at a CAGR of around 5-6% over the next decade. Growth is being fuelled by increased adoption of C4ISR systems, advanced radar and electronic warfare capabilities, unmanned aerial and ground platforms, and space-based defence assets.

India remains the third-largest defence spender globally, with an annual allocation exceeding USD 80 billion. The Governments Defence Production and Export Promotion Policy (DPEPP) targets a domestic defence manufacturing turnover of approximately USD 25 billion by 2025, including USD 5 billion in exports. A key driver of this growth is the policy emphasis on indigenisation, with a progressively expanding “Positive Indigenisation List” restricting imports of certain platforms, subsystems, and components, thereby creating demand for locally manufactured solutions.

The domestic market for defence electronics ? including avionics, mission computers, electronic warfare systems, radar subsystems, and electro-optical/infrared payloads ? is expanding at a faster pace than the broader defence sector. This is supported by increased capital procurement from

Indian manufacturers, public-private partnerships, and joint ventures with global Original Equipment Manufacturers (OEMs) aimed at technology transfer and local production. The ongoing modernisation of the armed forces, combined with the Governments push for Atmanirbhar Bharat, is expected to sustain long-term demand in this segment.

Opportunities in this sector are particularly strong in high- value, technology-intensive areas such as advanced printed circuit board assemblies (PCBAs) for defence-grade systems, integration of complex avionics and sensor suites, and precision manufacturing for aerospace platforms. Additionally, the rising global demand for niche, high-reliability electronic subsystems presents an export growth avenue for Indian companies with the requisite certifications and capabilities.

However, the sector also faces challenges including long procurement cycles, stringent qualification and certification requirements, dependency on imported high-end components, and volatility in global supply chains for semiconductors and other critical materials. Companies with proven capabilities in managing technology lifecycles, maintaining high quality standards, and developing resilient supply chains are well- positioned to benefit from the favourable market dynamics.

Indian Medical Devices Market Overview

The Indian medical devices industry is emerging as one of the fastest-growing segments within the healthcare sector, supported by rising healthcare expenditure, expanding hospital infrastructure, and increasing adoption of advanced diagnostic and therapeutic technologies. Industry estimates place the current market size at approximately USD 18-20 billion in FY 2024-25, with projections ranging between USD 30-50 billion by 2030, depending on the growth trajectory. This implies a medium- to high-growth outlook with an estimated CAGR of 6-16% over the next five years, driven by both domestic demand and export opportunities.

The segment benefits from strong policy support through the Production Linked Incentive (PLI) Scheme for Medical Devices, with an outlay of Rs.3,420 crore to boost domestic manufacturing across high-value categories such as imaging equipment, diagnostic devices, and life-support systems. In addition, the establishment of dedicated medical device parks ? including Andhra Pradesh MedTech Zone (AMTZ) and Hyderabad Medical Devices Park ? is strengthening the manufacturing ecosystem by providing shared infrastructure, R&D facilities, and testing capabilities.

Increasing penetration of healthcare services in Tier II and Tier III cities, and the growing need for point-of-care and home healthcare devices. Segments such as cardiology, neurology, critical care, and diagnostic imaging account for a significant share of the market, while wearable and connected devices are gaining traction in the post-pandemic healthcare landscape.

Despite the opportunities, the industry continues to face structural challenges, including high import dependency for certain advanced components, complex regulatory compliance requirements under the Central Drugs Standard Control Organisation (CDSCO), and supply chain vulnerabilities for specialised electronic parts. Companies with integrated design-to-delivery capabilities, quality certifications such as ISO 13485, and experience in manufacturing high-reliability medical electronics are better positioned to capitalise on the sectors growth potential.

Growth Drivers

Defence & Aerospace

The Indian defence and aerospace sector is experiencing sustained momentum, supported by strong policy frameworks, rising capital expenditure, and increasing domestic manufacturing capabilities. Key growth drivers include:

Government Policy Push

• Implementation of Aatmanirbhar Bharat and Make in India initiatives with explicit targets to enhance indigenous defence production and reduce import dependency.

• Introduction of Positive Indigenisation Lists restricting imports of specific defence items and creating assured demand for domestic manufacturers.

• Defence Production and Export Promotion Policy (DPEPP) 2020 aiming to achieve a turnover of USD 25 billion, including USD 5 billion in exports, by 2025.

Technological Modernisation

• Increased adoption of advanced electronics, avionics, surveillance, and communication systems in defence platforms.

• Growing requirement for high-reliability electronics assemblies in next-generation systems such as unmanned aerial vehicles (UAVs), missile guidance, and secure communication.

Rising Defence Capital Expenditure

• Union Budget allocations for defence capital outlay have been consistently increasing, with ~68% earmarked for domestic procurement in recent years.

• Large-scale procurement programs for fighter aircraft, transport helicopters, UAVs, missiles, radars, and electronic warfare systems.

Aerospace Growth & Civil-Military Convergence

• Rising investments in commercial aerospace and MRO (Maintenance, Repair, Overhaul) facilities.

• Cross-over technologies between defence and civil aviation driving demand for avionics, sensors, and composite structures.

Export Opportunities

• Expanding footprint in friendly foreign nations, driven by competitive manufacturing costs and improved quality benchmarks.

• Government-supported export facilitation measures, including faster licensing and export credit.

Strategic Partnerships & FDI

• Liberalised FDI policy in defence (up to 74% under the automatic route) encouraging global OEMs to set up manufacturing bases in India.

• Joint ventures and technology-transfer agreements strengthening the domestic manufacturing ecosystem.

Medical Devices

The Indian medical devices industry is one of the fastest- growing segments of the healthcare ecosystem, projected to expand from an estimated USD 11 billion in 2024 to USD 50 billion by 2030. This growth is underpinned by a robust policy environment, infrastructure development, rising domestic demand, technology integration, and export momentum.

Policy Support & Incentives

• National Medical Devices Policy, 2023 provides a strategic framework for sector growth, aiming for self-reliance, regulatory harmonisation, and global competitiveness.

• Production-Linked Incentive (PLI) Scheme for Medical Devices (Rs.3,420 crore outlay) promotes local manufacturing of high-end products such as MRI, CT scanners, and linear accelerators, with multiple green field projects already operational.

Infrastructure & Manufacturing Clusters

• Dedicated medical device parks in states like Himachal Pradesh, Tamil Nadu, Uttar Pradesh, and Andhra Pradesh provide common facilities, testing labs, and cost-effective manufacturing environments.

• The Andhra Pradesh MedTech Zone (AMTZ) in

Visakhapatnam is emerging as Asias largest medtech manufacturing hub, fostering industry-academia collaboration and technology localisation.

Rising Domestic Demand

• Growth in hospital infrastructure, health insurance penetration, and per-capita healthcare spending is driving device consumption.

• Increasing awareness and adoption of preventive healthcare is spurring sales of wearable and portable devices.

Technology Integration

• Integration of telemedicine and remote monitoring solutions is expanding access to healthcare in rural and semi-urban areas.

• Growth in indigenous R&D is enabling cost-effective, globally competitive product development.

Risk Management

Macroeconomic Risk

Geopolitical tensions in certain parts of the world could result in macroeconomic instability

: The company diversified its customer portfolios by increasing exposure to local and non-risk markets

Technology Risk

Lack of advancement in technologies, could lead to redundancy affecting production efficiency. Also, the technology used in the product could become outdated.

Mitigation: The company engages in early discussions with customers on the possibility of products/solutions becoming obsolete and supporting the customer in the development of advanced product solutions. The company is consistently upgrading the production machineries as well as the skills of relevant employees to absorb the new technologies

Market Risk

Existing and emerging competitors may increase market competition, leading to customer-driven price pressure.

Mitigation: The company focuses on growing business volume from repeat customers by offering multiple value propositions, maintaining timely delivery and quality, and providing design-led manufacturing solutions with a high focus on quality to stay ahead of the competition.

Operational Risk

Compliance with stringent quality standards required by customers from different countries.

Mitigation: The company continuously upgrades the quality standards of both personnel and machinery, along with testing and validation capabilities.Strengthen relationships with key supply chain partners and implement robust internal and external audit processes to drive continuous improvement and excellence.

Talent risk

The risk of losing talent across various functions.

Mitigation: The company implements effective measures for talent identification, development, recognition, and compensation corrections to retain key talent within the organization.

Financial Risk

Ensuring liquidity and access to capital for operational needs and growth initiatives, and managing risks related to foreign currency volatility.

Mitigation: The company maintains a robust internal system for timely receivables collection. Strengthen financial results and bank relationships to secure necessary funds for growth. Ensure contract terms with customer advances are in the same currency, explore the use of Vostro accounts with foreign customers, and engage in forward contracts aligned with the hedging policy.

Cybersecurity risk

Protecting IT systems and data from potential cybersecurity breaches.

Mitigation: The company conducts regular audits with external experts to ensure continuous improvement in security processes. Implement advanced measures such as firewalls and antivirus software, and provide regular employee training to enhance cybersecurity awareness.

Balance Sheet

• Borrowings for 2024-25 stood at Rs. 1026.99 million compared to Rs. 966.95 million during 2023-24.

• Total non-current assets for 2024-25 stood at Rs. 440.78 million compared to Rs. 561.93 million in 2023-24.

• Net worth stood at Rs.1469.50 million as on 31 March, 2025 compared to Rs. 1,281.89 million as on 31 March, 2024, an increase of 14.63%.

• Total assets increased by 7.18% to Rs. 3,302.88 million as on 31 March, 2025 from Rs. 3,081.71 million as on 31 March, 2024.

• Inventories reduced by 31.50% to Rs. 764.16 million as on 31 March, 2025 from Rs. 1,115.63 million as on 31 March, 2024.

Profit & Loss Statement

• Revenues increased 25.04% from Rs. 3,171.98 million in 2023-24 to Rs. 3,966.36 million in 2024-25.

• EBITDA increased 24.48% from Rs. 328.10 million in 2023-24 to Rs. 408.44 million in 2024-25.

• Profit after tax increased 26.56% from Rs. 153.47 million in 2023-24 to Rs. 194.23 million in 2024-25.

• Depreciation and amortisation stood at Rs. 56.64 million in 2024-25 compared to Rs. 22.79 million in 2023-24.

Working Capital Management

• Current assets as on 31 March, 2025 stood at Rs. 2,862.11 million compared to Rs. 2,519.78 million as on 31 March, 2024.

• Current ratio as on 31 March, 2025 stood at 1.67 compared to 1.52 as on 31 March, 2024.

• Inventories reduced to Rs. 764.16 million as on 31 March, 2025 from Rs. 1,115.63 million as on 31 March, 2024.

• Current liabilities stood at Rs. 1,710.65 million as on 31 March, 2025 compared to Rs. 1,662.43 million as on 31 March, 2024.

• Cash and bank balances stood at Rs. 118.10 million as on 31 March, 2025 compared to Rs. 125.99 million as on 31 March, 2024.

Key Ratios

Particulars	2024-25	2023-24
EBITDA/Turnover (%)	10.30	10.34
EBITDA/Net interest (%)	9.76	10.76
Debt-equity ratio	0.70	0.75
Return on capital employed (%)	0.14	0.18
Book value per share (Rs.)	116.77	101.86
Earnings per share (Rs.)	15.43	16.47