Vishal Bearings Ltd Management Discussions

Pursuant to Regulation 34(3) and Para B of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the amendments thereof, details of the Management discussion and analysis are given below:

INTRODUCTION

The Vishal Company designs and manufactures a growing portfolio of engineered bearings products, and related services. With more than a century of knowledge and innovation, the Company continuously improves the reliability and efficiency of global machinery and equipment to move the world forward. Vishals Engineered Bearings segment features a broad range of product designs serving original equipment manufacturers (OEMs) and end-users worldwide. Vishal is an authority on tapered roller bearings and leverages its position by applying engineering know-how and technology across its entire bearing portfolio, which includes tapered, spherical and cylindrical roller bearings; plain bearings, metal-polymer bearings and rod end bearings; thrust and specialty ball bearings; and housed or mounted bearings. Vishal creates value by understanding customer needs and applying its know-how to serve a broad range of customers in attractive markets and industries across the globe. The Companys business strengths include its product technology, end-market diversity, geographic reach and after-market mix. Vishal collaborates with OEMs to improve equipment efficiency with its engineered products and captures subsequent equipment replacement cycles by selling largely through independent channels in the aftermarket.

GLOBAL ECONOMY

The global roller bearings market size was valued at USD 21.05 billion in 2018 and is projected to reach USD 32.45 billion by the end of 2032, exhibiting a CAGR of 2.9% during the forecast period. The growing usage of heavy machinery and equipment, mainly in manufacturing facilities and automotive industry, is supplementing the market trend. Adoption of high-performance industrial machinery and demand for customized machines for conducting complex operations and task specificity is driving the market growth. Generally, roller bearings are featured with antifriction components that reduce friction, high resistance, which leads to increase mobility, increase higher load capacity, and life span of machines. Furthermore, machine tools that are used across construction, mining, and agricultural sectors require high precision roller bearings to sustain heavy loads and reduce energy consumption. Therefore, the demand for large diameter roller bearings is projected to increase across these sectors. Similarly, the rise in investment projects in mining, infrastructure development, and the increasing number of offshore wind farms is closely linked to the growth of roller bearings market. The key manufacturing players are investing in their research and development activities and launching new advanced solutions to their existing product line to strengthen their market reach and maintain their position in the competitive market.

(Source: https://www.fortunebusinessinsights.com/industry-reports/roller-bearings-market-101249)

INDIAN ECONOMY

Over the past decade, India has transitioned from being the 10th largest economy globally to securing its position as the fourth-largest economy, with a GDP of US$ 4.19 trillion in the year 2025. This ascent represents a remarkable phase of metamorphic growth, reflecting the nations strong macroeconomic fundamentals and resilience in the face of global challenges, including the aftermath of the COVID-19 pandemic, geopolitical tensions, and commodity price volatility. Indias economy continued to demonstrate robust growth amidst global headwinds. With GDP expected to grow between 6.80% and 7.00% in FY 2024-25, the manufacturing sector remains a critical pillar of development.

ROLLER BEARING INDUSTRY

Roller Bearings are a type of rolling-element bearing that uses cylinders (rollers) to maintain the separation between the moving parts of the bearing (as opposed to using balls as the rolling element). The purpose of a roller bearing is to reduce rotational friction and support radial and axial loads. Compared to ball bearings, roller bearings can support heavy radial loads and limited axial loads (parallel to the shaft). Global core Roller Bearing manufacturers include SKF, Schaeffler etc. The top 5 companies hold a share of about 60%. Europe is the largest market, with a share about 24%, followed by China and North America with the share about 23% and 19%. The global Roller Bearing market is valued at US$ 19220 million in 2020. The market size will reach US$ 29630 million by the end of 2027, growing at a CAGR of 5.4% during 2021-2027. Bearings are antifriction components that help improve the mobility of components. Different types of bearings are manufactured depending on the task specificity, such as roller bearing, sensor bearings, plain bearings, ball bearings, and others. Roller bearings are equipped with cylindrical rollers with high radial load capacity. The increase in demand for roller bearings is directly related to the growth in production of high-performance industrial machinery. Increase in usage of heavy machinery in the construction industry and high demand for application specific bearings drive the market. Rise in investment projects in mining, infrastructure development, and transport infrastructure development fuel the growth of the market. Moreover, increase in number of offshore wind farms results in greater adoption of roller bearings. However, roller bearings incur high installation costs and complex maintenance operations are few factors that are expected to hamper the growth of the market. The global roller bearings market is segmented on the basis of product type, end-user industry, and geography. On the basis of product type, the market is classified into tapered, needle, spherical, cylindrical, and thrust. Based on the end-user industry, the market is divided into electrical, automotive, agriculture, construction, energy & power, and others (general engineering, aerospace). By geography, the market is analysed North America, Asia-Pacific, Europe, and LAMEA. The key players operating in the global roller bearings industry are NTN Corp., SKF AB, Brammer, NBI Bearings, RCB Bearing, Timken, Schaeffler AG, NSK Ltd., C&U Group, and JTEKT Corporation.

ENGINEERED BEARINGS

The Vishal Bearing portfolio features a broad range of engineered bearing products, including tapered, spherical and cylindrical roller bearings; pain bearings and rod end bearings; thrust and specialty ball bearings; and housed bearings. A bearing is a mechanical device that reduces friction between moving parts. The purpose of a bearing is to carry a load while allowing a machine shaft to rotate freely. The basic elements of the bearing generally include two rings, called races; a set of rolling elements that rotate around the bearing raceway; and a cage to separate and guide the rolling elements. Bearings come in a number of designs, featuring tapered, spherical, cylindrical or ball rolling elements. The various bearing designs accommodate radial and/or thrust loads differently, making certain bearing types better suited for specific applications. Selection and development of bearings for customer applications and demand for high reliability require sophisticated engineering and analytical techniques. High precision tolerance, proprietary internal geometries and quality materials provide Vishal bearings with high load-carrying capacity, excellent friction-reducing qualities and long service lives. The uses for bearings are diverse and can be found in transportation applications that include premium passenger cars and trucks, heavy trucks, helicopters, airplanes and trains.

MARKET SEGMENTATION

Manufacturing companies are emphasizing reducing the weight of the bearings in order to lessen vehicle emission and improve the efficiency of the vehicles. This significant move in the bearings industry is fueling the global roller bearings market share. The automobile industry is focusing on manufacturing light weight bearings, especially in modern cars and SUVs. Moreover, light weight bearings consist of high durability and stiffness. Integration of such bearings have widely been adopted in electric vehicles as high durability will lower the load on the engine and increase the life span of the vehicles further enlarging the market size. Within product type, the cylindrical roller bearings held the highest market share in 2018, due to an increase in demand for heavy machinery where high speed and loads are involved. Moreover, the cylindrical bearings are designed in order to lower stress generated during operations. These bearings are widely adopted in end use verticals mainly automotive and aerospace industry as the spare and consumables are attached to the important point of contact. Tapered roller bearings are anticipated to drive the market in the forecast period as they are specifically designed to handle radial and axial forces simultaneously. The major application of tapered bearings is integrated into medical equipment, defense equipment, etc. The adoption of spherical roller bearings is anticipated to be moderate in the forecast period owing to its ability to withstand shock loads, reliability, ease in mounting and erecting. Moreover, the application of spherical roller bearings is growing in the international market and exploring its reach to almost every industry vertical mainly automotive and aerospace sector.

(Source: https://www.fortunebusinessinsights.com/industry-reports/roller-bearings-market-101249)

INDUSTRY STRUCTURE AND DEVELOPMENT

The Company is in the Business of Ball and Roller Bearings which has applications in Automobiles, pumps, gear boxes, heavy earth moving equipments and industrial sectors. Predominantly the Company deals in Bearings required by the Automobile Industry and gear boxes. The growth of the Bearing Industry is primarily dependent on the growth of OEM and After-Sales Markets and can be more closely related with the Automotive and Industrial Sectors. Most of the demand for bearings in the Indian Market comes from the automobiles sector, whereas the requirement for Industrial Bearings is well spread out over different varieties of bearings. There is a wide range of different kinds of bearings and in different sizes with specific purposes depending on the end application of bearings. Whereas there are many Indian players in the production of different types of bearings, most of them are producing automobile bearings, while some are producing bearings which find use in the Industrial sector. Roller bearings have wide ranging applications and are critical to industrial progress. With the world s industrial nations planning to move their supply chain away from China, and

India likely to be one of the beneficiaries of such a move, it would continue to remain a fast-growing major economy in the world and is expected to be one of the top three global economic powers over the next decade. Market growth in the Indian mobility industry for both people and goods have a very large potential given the geographical spread and size of population- an aspirational young population spurs personal mobility while the need to establish strong supply chains between producers and markets drives growth for goods mobility. Also new vehicle models are being constantly introduced; there is expansion of the public transport systems, dedicated freight corridors for movement of farm produce.

Your Company s installed manufacturing capacity will enable it to continue offering a wide range of products to its customers once demand revives. Customer relationships and contact are the focus areas to reassure them that quality products delivered in a timely and cost-efficient manner will be our priority.

FUTURE OUTLOOK

India is rapidly emerging as a global hub for auto component design and manufacturing, driven by increased global OEM sourcing, rising indigenization, and supportive policy frameworks. Under the Self-Reliant India initiative, the industry is targeting a significant reduction in its INR 1 trillion (US$ 13.6 billion) import bill over the next few years, creating strong growth opportunities for both existing players and new entrants. Backed by a growing middle class and favorable demographics, market demand is expected to remain robust. Between April 2000 and December 2023, the sector attracted US$ 35.65 billion in FDI, reflecting investor confidence. The governments PLI Scheme, with an outlay of US$ 7.8 billion specifically for the auto and components sector, is expected to generate capex of over INR 74,850 crore in five years. Significant investment is also being made in R&D infrastructure, with both Indian and global manufacturers expanding capabilities in simulation, engineering, and digital innovation. Saturation in traditional markets has prompted component makers to explore untapped regions in East and Central India. Meanwhile, the continuation of FAME-II with an allocation of INR 1,500 crore and the rollout of the Bharat NCAP program are set to enhance vehicle safety standards and drive innovation in advanced components. By FY 2028, the auto industry aims to invest over US$ 7 billion to localize high-value components like EV motors and automatic transmissions, aligning with the global " China Plus One " strategy and reinforcing Indias role in the global automotive value chain.

The medium to long-term outlook remains positive OEM production is expected to grow with increasing mobility demand and infrastructure-led rural development.

Government incentives and localization policies will continue to support growth.

The Company plans to:

Diversify product applications into off-road and industrial segments.

Invest in R&D to support the transition towards lightweight, high-performance products.

OPPORTUNITIES AND THREATS

The long-term prospects for the Indian economy remain bright owing to the growth of internal consumption. Demand for personal vehicles will be driven by the aspirations of the rising middle class with improving purchasing power and disposable incomes. Rapid urbanization will drive the need for public transportation. As India addresses the twin challenges of inclusive growth and sustainability, even a normal monsoon, with improved availability of rural finance, will positively influence demand for motorcycles as well as agricultural tractors. The overall mobility sector is expected to benefit from continued growth in the longer term. The domestic bearing industry is facing the following threats: a) The menace of spurious bearings continues to adversely affect the industry. As per estimates roughly one in every four bearings sold in the replacement market is fake/ of inferior quality presenting a threat to unsuspecting users. The problem continues owing to the slow legal process, in spite of industry-wide efforts to thwart unscrupulous suppliers. b) With global demand weakening resulting in idle/ low utilization of installed capacities, the industry must work on enhancing operational efficiencies and flexing costs further with supply chain readiness to help counter these additional costs. c) Regulatory demands on emission levels, improved safety norms, higher expectations for improved reliability of the vehicles and the need for readiness to meet requirements for the new fuel efficient and environmentally friendly vehicles may result in need for investments in newer technology, research, and development. This could cause a higher burden of fixed costs. Of course, the industry and your Company have to continuously explore ways and take all measures to produce consistently high-quality products cost effectively to counter the threat of cheap imports.

FUTURE CHALLENGES

Adapting to fast-paced technological changes in the automotive sector.

Sustaining margins amidst rising input costs and competitive pricing pressure.

Managing capacity expansion and skilled workforce availability.

Ensuring compliance with evolving emission and environmental standards.

Sustained investment in R&D and technology for next-gen products.

Scaling up aluminium casting operations without compromising quality

RISKS & CONCERNS

The Audit Committee and Board of Directors of the Company regularly overview external and internal risks associated with the operations of the Company and carries out its impact assessment and effective implementation of the mitigation plans and risk reporting is conducted.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has proper and adequate Internal Audit System in place that promotes reliable financial reporting, safeguards assets, encourages adherence to fair management and ethical conduct. Additionally, the Company has proper and adequate internal control systems in place, which have been designed in a way that they not only prevent fraud and misuse of the Companys resources but also protect shareholders interest. Internal control systems comprise of policies and procedures which are designed to ensure reliability of financial reporting, compliance with policies, procedures, applicable laws and regulations. The Audit Committee of the Board of Directors, on regular intervals and in co-ordination with Internal and Statutory Auditors, reviews the adequacy of internal control systems within the Company.

Based upon the recommendations of the Audit Committee, an Annual Audit is prepared and is reviewed periodically by the top management and the Audit Committee. The internal audit focuses on compliances as well as on robustness of various business processes. Feedback on non-conformities along with recommendation for process improvements is directly provided to the top management of the Company. Compliance on audit findings and tracking of process improvements is regularly carried out.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

Since its inception, the Company has always regarded its employees as their greatest strength. It continues to focus on developing a superior workforce that aligns with both individual growth and organizational goals, ensuring high-quality service to customers and stakeholders. In line with technological advancement and operational efficiency, employees in manufacturing departments have been actively engaged in various projects aimed at reducing raw material wastage, minimizing setting times, maximizing automation, optimizing energy consumption, improving packaging safety, developing new products rapidly, and increasing yield to reduce costs.

FORWARD-LOOKING STATEMENTS

Certain statements in this report relating to objectives, projections, and expectations may constitute forward-looking statements as defined by applicable laws. Actual results may vary due to factors such as raw material availability and pricing, demand cycles, government regulations, economic conditions in India and other countries where the Company operates, and other unforeseen factors.

	For and on behalf of the Board of Directors
	VISHAL BEARINGS LIMITED
Date: 26.08.2025
Place: Shapar, Rajkot
	DILIP G. CHANGELA
	Chairman
	DIN: 00247302