Windsor Machines Ltd Management Discussions

The global economy has demonstrated resilience in a volatile environment. The economic recovery has remained strong, with inflationary pressures easing from record highs in FY 2022-23. The International Monetary Fund (IMF) forecasts a 3.2% global economy expansion in 2024, following similar growth in 2023. This is impressive given the severe economic shocks both advanced and emerging economies have faced over the past 36 months, including disruptions in global supply chains, food and energy crises, cost of living stresses, and significant monetary tightening by major central banks. Despite these challenges, economic activity avoided recession and is set to grow steadily over the next five years.

As inflationary pressures subside, central banks are expected to ease their policy stance, lowering borrowing costs across markets. This could further improve financial conditions and redirect capital flows to emerging markets. However, the recovery will depend on geopolitical factors, which remain highly volatile.

(Source: IMF World Economic Outlook, April 2024)

Machines that WIN Your Trust

BLOWN FILM

Technological excellence is the driving force of the plastics industry. Your Company has extensively invested in an infrastructure that can yield consistent output at larger scale. We have always been exploring possibilities that redefine the plastics industry.

The idea isnt to replace humans through machines but create an ecosystem where human intelligence blends with technological excellence with machines that are reliable, consistent, and a cut above the rest. To sum it up, machines that win your trust.

PIPE EXTRUSION

SPEEDTHAT ADVANCES IMAGINATION

STRENGTH THAT DEFIES BOUNDARIES

STYLE THAT SETS NEW TRENDS

FUTURE IS FANTASTIC

WINDSOR MAKES IT POSSIBLE

INJECTION MOULDING

Industry Structure & Development

Given the enormous potential of the Indian market, local businesses are encouraged to develop their technical skills, meet high-quality standards, and expand their capabilities across various sectors within the growing plastics industry.

Phenomenal advancements in the petrochemical industry and progress in the plastic machinery sector have significantly propelled the plastic processing industry. This has enabled plastic processors to increase their capacity to serve both domestic and international markets. The Indian plastic processing industry comprises approximately 30,000 units utilising injection moulding, blow moulding, extrusion, and calendaring to create a wide range of products. Plastic materials are becoming increasingly crucial across various industries, with per capita consumption rising rapidly. Traditional materials are quickly replaced by plastic technology, processing equipment, expertise, and cost-effective manufacturing. The industrys ability to serve international markets stems from the skills developed in various areas and inherent capabilities. Over the past few decades, the Indian plastics industry has become one of the nations most significant sectors with a substantial base.

Plastic consumption in India shows significant regional variation, with Western India accounting for 47%, Northern India 23%, and Southern India 21%. The end-use sectors, such as automotive, packaging (including bulk packaging), plastic applications, and electronic appliances, primarily consume plastics in Northern India, especially in Uttar Pradesh and Delhi-NCR. However, other regions like Rajasthan, Punjab, Haryana, Uttarakhand, J&K, and Himachal Pradesh are expected to grow in plastic processing due to increased feedstock supply and a greater focus on manufacturing.

Plasticulture can significantly reduce costs, resulting in improved crop quality and yield. Plasticulture offers advantages in water conservation, water use efficiency, and fertiliser efficiency. Each application can reduce water usage by 30% to 100%. In agricultural ponds lined with plastic film, water seepage loss can be reduced to zero, providing significant benefits. Effective fertiliser usage can also lower expenses, benefiting farmers further.

The plastics industry comprises about 50,000 micro, small, and medium-sized enterprises (MSMEs). These enterprises contribute 3.5 lakh crore (US$ 42.89 billion) to Indias economy and employ over 50,000 people. India recycles plastic at a rate of 60%, higher than many developed nations. Government initiatives like "Make in India," "Skill India," "Swachh Bharat," and "Digital India" are boosting plastic production. By 2027, the plastics industry is expected to generate 10 lakh crore (US$ 122.54 billion) in annual revenue, with two lakh tonnes of exports.

Injection Moulding Machinery

The plastic injection moulding machines market is experiencing a significant boom. The surge in demand for these machines, coupled with rapid technological innovation, is driving substantial growth in the industry. Companies are increasingly finding new applications for injection moulded plastics, particularly in the automotive sector, where lighter components replace metal parts to enhance fuel efficiency. A notable trend is the rise of multi-material injection moulding machines, which can inject multiple materials into a single mould. This capability simplifies the production of parts with diverse properties or superior designs, streamlining the injection process.

Artificial intelligence (AI) and robotics are set to revolutionise manufacturing across all industries, including plastic moulds. AI is expected to optimise mould designs, predict maintenance needs, and adjust processes to produce high-quality, durable parts. Robotics will further enhance this transformation by automating the manufacturing process from start to finish, facilitating mass production and improving quality control. The plastic components used in these robots also offer benefits such as cost-effectiveness and reduced weight.

The plastic injection moulding industry is rapidly expanding, driven by the automotive industrys demand for lighter and more affordable materials. The shift towards plastic parts is motivated by the need for better fuel efficiency, lower emissions, and improved vehicle performance. For instance, car interiors benefit from plastic injection moulding, allowing automakers to create complex, visually appealing designs. Automotive manufacturers use carbon fibre-reinforced plastic (CFRP) in electric vehicles to reduce weight and enhance performance. The ongoing priority for lightweight materials in the automotive industry ensures continued growth opportunities for the injection moulding sector.

Pipe Extrusion Industry

The India PVC Pipes Market is a crucial component of the countrys construction and infrastructure industry, providing essential piping solutions for various applications such as water supply, irrigation, sewage systems, plumbing, and industrial processes. PVC (Polyvinyl Chloride) pipes are preferred for their versatility, cost-effectiveness, and durability. With rapid urbanisation, population growth, and infrastructure development initiatives, the demand for PVC pipes in India is expected to grow, driven by construction projects, urban infrastructure upgrades, and government investments in water management and sanitation.

The India PVC Pipes Market is pivotal in the countrys construction, infrastructure, and industrial sectors. It offers vital piping solutions for diverse applications such as water supply, sanitation, irrigation, plumbing, and industrial processes. Rapid urbanisation, infrastructure development, and government initiatives drive market demand, creating significant growth opportunities for industry participants and stakeholders.

To navigate market dynamics and capitalise on emerging trends, PVC pipe manufacturers must embrace sustainability, innovation, and market expansion strategies. Industry players can maintain market competitiveness, achieve business growth, and contribute to Indias infrastructure development and economic progress by focusing on customer needs, product quality, and environmental stewardship.

Blown Film Extrusion Industry

The growing demand for polymeric laminates is a significant driver of the multilayer blown films market. Polymeric laminates are prized for their superior barrier qualities, durability, and adaptability, making them ideal for various packaging applications in the food and beverage, pharmaceutical, and consumer products sectors.

As consumer preferences shift towards more convenient and eco-friendly packaging options, there is an increasing need for packaging solutions that can extend shelf life, prevent contamination, and reduce food waste. Multilayer blown films address these needs by combining multiple polymer resins to offer specific performance characteristics such as barrier properties and tear resistance.

Advancements in film extrusion technology have enabled the production of thinner, lighter multilayer, cost-effective, and environmentally friendly films. The trend towards polymeric laminated materials is expected to drive growth in the multilayer blown films market as companies seek innovative packaging solutions to meet evolving consumer preferences and regulatory requirements.

With the expansion of global trade and distribution networks, there is a heightened focus on ensuring product integrity and protection throughout the supply chain. This increases the demand for multilayer blown films as a reliable and cost-effective packaging solution for the food, beverage, pharmaceutical, and other packaged goods industries.

For example, modified atmosphere packaging (MAP) is designed to control the gases surrounding a product. MAP can extend shelf life by reducing the amount of oxygen around fresh produce.

Global - Economic Environment

The global plastic injection moulding machines market is experiencing rapid growth, with the Asia Pacific region leading the charge. This region accounts for over 43% of the worlds revenue from plastic injection moulding machines and continues to expand. Several factors contribute to this success: the rapidly growing manufacturing sector, the influx of foreign firms, and the increasing demand for plastic products across various industries. Asia Pacific plays a significant role in the Worlds growth with its injection moulding machine market. The automotive, electronics, and packaging sectors have been key drivers of this demand.

All countries in Asia Pacific are witnessing significant market developments. Indias market is projected to grow at a CAGR of 6.5% from 2024 to 2032, driven by increased reliance on plastic components in automobiles, healthcare products, and consumer goods. Japan, known for its innovation, has been at the forefront of developing advanced injection moulding solutions.

Europe and North America also hold substantial shares in the plastic injection moulding machines market. While smaller than their Asian counterpart, these regions remain significant players. Europes commitment to sustainability and circular economy principles has led to adopting energy-efficient electric machinery, reducing carbon emissions. Strict waste management regulations in Europe have spurred the development of bio-based polymers that biodegrade instead of accumulating in landfills.

In North America, particularly in the US, the demand for lightweight plastics drives the market. Companies seek high-performance materials that do not add excessive weight to products such as automobiles and healthcare devices. The US boasts advanced manufacturing capabilities, although many firms have outsourced production to reduce costs. However, a growing trend has seen companies bringing operations back to the US to mitigate risks and enhance productivity.

Indian Economic Review

Due to the enormous potential of the Indian market, local businesses have been encouraged to develop their technical skills, meet high-quality requirements, and expand their capabilities across a wide range of sectors within the growing plastics industry.

Phenomenal advancements in the petrochemical industry and progress in the plastic machinery sector have significantly propelled the plastic processing industry. This progress has enabled plastic processors to increase their capacity to serve both domestic and international markets. The Indian plastic processing industry comprises approximately 30,000 units utilising injection moulding, blow moulding, extrusion, and calendaring to produce a wide range of products. The importance of plastic materials across various industries is rising rapidly, and per capita consumption is increasing swiftly. Traditional materials are being quickly replaced by plastic technology, processing equipment, expertise, and cost-effective manufacturing. The ability to serve international markets results from the skills developed in many areas of this industry combined with inherent abilities. Over the past few decades, the Indian plastics industry has advanced significantly, becoming one of the nations most important sectors with a considerable base.

Plastic consumption in India shows significant regional variation, with Western India accounting for 47%, Northern India for 23%, and Southern India for 21%. The end-use sectors such as automotive, packaging (including bulk packaging), plastics applications, and electronic appliances account for most of the consumption in Northern India, predominantly in Uttar Pradesh and Delhi-NCR. However, other regions, including Rajasthan, Punjab, Haryana, Uttarakhand, J&K, and Himachal Pradesh, are anticipated to see growth in plastic processing due to increasing feedstock supply and a greater focus on the manufacturing sector.

Plastic materials, almost unknown until the 1920s, are now found in almost every facet of contemporary life, from computer microchips to grocery bags. Plastic encompasses a set of materials, not just one, allowing widespread utilisation. There are a wide variety of plastic material types, and many of them, like polyethene, PVC, and acrylic, possess efficient and adaptable qualities.

Opportunities and Threats

Plastic is ubiquitous daily, from alarm clocks and toothpaste tubes to PPE kits during the pandemic. However, the plastic manufacturing industry faces significant challenges: Sustainable Production: Meeting the growing demand for plastic products requires large manufacturing units and extensive manpower. Maintaining quality and adhering to government regulations while keeping up with demand is a significant challenge.

Quality Control: Rapid production can lead to quality issues and increased wastage. Ensuring precision and reducing human errors require constant efforts and possibly automated quality checks.

Environmental Impact: Plastic waste poses a severe environmental threat, with millions of tons ending up in oceans annually. Only a small percentage of plastic is recycled, and production processes contribute to the greenhouse effect.

Health Hazards: The pandemic increased the demand for plastic products and posed health risks to workers.

Balancing production needs with safety protocols is challenging.

Innovation and Competition: The high demand for plastic products has led to increased competition. To stand out, manufacturers must innovate and meet rising hygiene standards, especially post-pandemic.

Resource and Distribution Issues: The pandemic disrupted travel and supply chains, causing sourcing raw materials and labour difficulties. Market price fluctuations further complicate production.

Skilled Labour Shortage: Operating advanced technology requires skilled labour, often in short supply, hindering the adoption of new manufacturing processes.

Automation Costs: While automation can enhance efficiency, its initial costs and the fear of job loss deter small enterprises from adopting it.

Volatile Raw Material Prices: Market instability affects raw material costs, impacting overall production expenses.

Despite these challenges, the plastic industry remains resilient, with plans for expansion and job creation, contributing to economic recovery and growth.

The Way Ahead

Plastic materials constantly evolve, with researchers and manufacturers developing new formulations and types of plastics with enhanced properties and capabilities. New plastic materials are engineered to have specific characteristics, such as increased strength, heat resistance, durability, or biodegradability. Manufacturers often need updated or specialised plastic processing machinery to process these specialised materials effectively. Advanced plastic materials require machinery with higher precision and tighter process control to ensure the correct temperature, pressure, and extrusion rates. This precision is essential to achieve the desired properties in the finished plastic products.

3D printing and additive manufacturing technologies have introduced new possibilities in the development of plastic products. Specific types of processing machinery are designed for these additive manufacturing processes. In summary, advancements in plastic materials will drive innovation and enhance diversity in the types of plastics available in various industries. Plastic processing machine manufacturers must keep abreast of the latest developments in plastic materials to design and produce machinery that efficiently processes these evolving materials. This ensures that manufacturers can meet the demands of industries seeking improved performance, sustainability, and versatility in plastic products, thereby contributing to the growth of the plastic processing machinery market.

Product-wise Performance

( in Lacs)

	Gross sales
Product	2023-2024	2022-2023
Extrusion Machinery	15,056.85	15,240.73
Injection Moulding Machine	18,656.86	19,460.43
TOTAL	33,713.71	34,701.16

Segment Information for the year ended March 31, 2024

( in Lacs)

Particular	2023-2024	2022-2023
Total Segment Revenue	34,225.23	35,290.92
Total Segment Results	1,618.45	3,326.10
Net Profit/(Loss) Before Taxation	551.81	2,320.85
Net Profit/(Loss) After Taxation	342.09	1,684.13
Other Comprehensive Income//(Expenditure)	(37.08)	(46.24)
Total Comprehensive Income	305.01	1,637.89
Total Assets	55,102.94	53,354.08
Total Liabilities	25,505.10	23,411.93
Total Capital Employed	29,597.86	29,942.15
Total Capital Expenditure	2,684.07	567.57
Total Depreciation	1,495.15	1,326.58

Outlook

India exports plastic products to more than 65 countries worldwide. The top importing regions for consumer and houseware products are Africa, the Middle East, and Southeast Asia. The Minister for Commerce and Industry, Mr. Piyush Goyal, recently encouraged the industry to adopt international standards to expand its global footprint. Additionally, India has signed free-trade agreements with the UAE and Australia, creating new opportunities for the plastics industry.

Risks and Concerns

Risk management forms the cornerstone of our Companys operational strategy. We firmly believe that effectively navigating risks is crucial for optimising returns and fostering sustainable growth.

Our approach to managing business risks is thorough and forward-thinking. We regularly review and assess potential risks that could impact our operations. With a robust framework for implementing controls and reporting mechanisms, we swiftly address identified risks to minimise their impact.

We diligently assess our business environment for threats. We then proactively mitigate these risks and implement appropriate measures to counteract their potential adverse effects.

By prioritising risk management and taking proactive steps to tackle challenges, we strive to safeguard our Companys interests and bolster its resilience amidst uncertainties. This proactive stance allows us to pursue growth opportunities confidently, ensuring the continued well-being of our business and stakeholders.

Management Risks

Changes in key managerial and senior administrative positions can significantly impact organisational operations. Decision-making and information flow may be disrupted, potentially affecting day-to-day functions.

Nevertheless, our senior management team boasts extensive experience and expertise in their respective domains. This depth of knowledge enables the company to navigate transitions smoothly, ensuring ongoing operational efficiency.

Our senior leaders wealth of experience empowers them to make informed, strategic decisions that drive the organizations growth and success. Their competence and leadership are crucial in upholding stability and continuity, fostering a conducive environment for the organisations advancement even amidst periods of change.

Currency Value and Interest Rate Fluctuations

The Company takes a proactive stance in managing its exposure to foreign exchange risk. To mitigate the impact of currency fluctuations, it implements effective strategies. Similarly, the Company actively monitors and manages its exposure to interest rate fluctuations by employing appropriate strategies, such as maintaining a balanced mix of loan types and maturities.

By actively managing both foreign exchange and interest rate risks, the Company aims to enhance financial stability and minimise vulnerabilities to market fluctuations. This proactive approach safeguards the Companys financial position, strengthening its resilience and ability to navigate challenging economic conditions effectively.

Operational Risks

Operational risks are a crucial concern for our business. They involve several key areas, such as balancing supply and demand, securing and retaining essential talent, and addressing IT and machine technology advancements. To mitigate these risks, we have implemented various strategies and measures.

Despite these precautions, we recognise that our systems and networks are still susceptible to sophisticated and persistent cyber threats. The fast-paced technological and cybersecurity changes continually challenge our efforts to protect our operations.

We are dedicated to continually improving our risk management approaches and investing in advanced technology upgrades. We actively work to enhance our defences against potential threats, ensuring business continuity and safeguarding sensitive information.

Our commitment to vigilance and proactive measures aims to reduce the impact of operational risks, protect our resources, and maintain a secure and stable environment. This dedication supports our stakeholders well-being and our organisations sustained success.

Legal, Regulatory and Compliance Risks

The organisation acknowledges non-compliance risks with state, local, and international laws. It has implemented comprehensive statutory compliance measures to mitigate financial and reputational risks. These measures monitor and ensure adherence to all applicable regulations and required actions. By prioritising compliance, the organisation demonstrates its commitment to ethical practices, fosters stakeholder trust, and promotes sustainable growth.

Information and Cyber Security Risks

The organisation prioritises a secure, resilient, and reliable technology environment to protect its systems and datas confidentiality, integrity, and availability. To address risks associated with the growing number of devices, measures are in place to identify and disable inactive devices, minimising vulnerabilities. Effective security controls are implemented to detect, prevent, and remediate threats. The organisation is committed to continuous improvement, adopting new processes and leveraging the latest technology solutions to enhance the effectiveness of its security measures.

Finance Risks

The organisation encounters several risks, including taxation, foreign currency, and credit risks inherent in its regular business operations. To mitigate these risks, the organisation implements appropriate measures, such as periodic reviews and rigorous follow-up procedures to ensure timely collection of dues. By taking proactive steps to address these risks, the organisation aims to maintain financial stability and minimise potential adverse impacts on its operations and financial performance.

Strategic Risks

The Company faces strategic risks typical of emerging businesses and those related to capital expenditure for capacity expansion. However, it has established well-defined processes and procedures to manage these risks effectively. By maintaining a strong focus on core activities and making informed investments in capacity expansions, the Company strives to mitigate potential risks and ensure prudent growth and success in its business endeavours.

Customer Focus

At Windsor Machines, our customers are paramount, guiding everything we do. We prioritise delivering impeccable quality and exceptional service, continually innovating and setting new standards to exceed customer expectations. Through ongoing technological advancements and knowledge enhancement, we strengthen our ability to deliver stringent quality checks, well-defined processes, and future-ready infrastructure. Our dedication to excellence motivates us to consistently provide the highest-quality products and services, ensuring customer satisfaction and fostering long-term loyalty.

Internal Control Systems and their Adequacy

With SAPs successful stabilisation, the company remains dedicated to strengthening its internal controls. These controls are essential for safeguarding assets, detecting and preventing fraud and errors, ensuring complete and accurate accounting records, and timely preparing reliable financial and compliance information.

The company has effectively implemented various Standard Operating Procedures (SOPs) and an Authority Matrix, which are regularly monitored and updated daily. This has significantly reinforced the organisations control and regulatory mechanisms, ensuring adherence to compliance standards and promoting overall operational efficiency. The company reaffirms its commitment to transparency, accountability, and financial integrity by prioritising internal controls.

Environment & Community

Your company has consistently shown a deep commitment to environmental stewardship, striving to conserve nature in every way possible. We prioritise responsible material sourcing and ensure proper waste disposal.

We aim to minimise waste generation and reduce pollution by integrating various initiatives into our daily operations. We are dedicated to creating a cleaner and greener future through sustainable practices and environmentally friendly measures. Environmental preservation is a fundamental value for us, and we are committed to positively impacting our surroundings and the planet as a whole.

Financial Performance with respect to Operational Performance

For the year ended March 31, 2024, the companys Sales and other income amounted to 342.56 Crores, from 353.11 Crores in the previous year.

The company consistently implements cost control and cost reduction programs as part of its policies to manage expenses effectively.

The company achieved a profit after tax of 3.42 Crores.

342.56 CRORES

Sales and other income amounted

The company achieved a profit after tax of 3.42 CRORES

Developments in Human resources/Industrial Relations front, including number of people Windsors most valuable asset is its employees, and the companys human resource strategy revolves around the philosophy of "Believing in People." Extensive efforts have been made in talent management, succession planning, robust performance management, and comprehensive learning and training programs. The objective is to continually develop inspiring, strong, and credible leadership within the organisation.

Windsor acknowledges the critical role of human capital in sustaining its competitive edge and fosters a culture that nurtures knowledge, entrepreneurship, and innovation. The company actively champions workforce diversity and invests in targeted initiatives to support employees career progression.

Encouraging continuous learning opportunities leads to higher employee engagement, increased productivity, reduced turnover, and a more positive workplace culture. Across its operations in India, Windsor maintains favourable labour relations, striving to create open, supportive work environments and promote participative decision-making.

Throughout the year, the manufacturing facilities at Vatva, Chhatral, and Italy have operated seamlessly, maintaining harmonious industrial relations. Windsor employs 541 individuals as of year-end and is committed to ongoing initiatives that upskill and enhance its human resources. Windsor is dedicated to investing in its people to ensure a motivated, high-performing workforce that drives the companys success.

Corporate Social Responsibility

Key Financial Ratios

As per the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018, the Company is obligated to disclose significant changes (i.e., changes of 25% or more compared to the immediately preceding financial year) in key financial ratios, accompanied by comprehensive explanations for such variations. The key financial ratios are outlined as follows:

Particular	Consolidated	Consolidated	Change	Reason
	2023-24	2022-23	in %	for change
Debtor Turnover	0.08	0.13	-0.05%	NA
Inventory Turnover	0.31	0.23	0.08%	NA
Interest Coverage Ratio	0.63	2.03	-1.40%	NA
Current Ratio	0.78	0.83	-0.05%	NA
Debt Equity Ratio	0.13	0.12	-	NA
Operating Profit Margin (%)	7.19	9.56%	-0.02%	NA
Net Profit Margin (%)	-2.20%	1.24%	-0.03%	NA
Return on net worth (%)	-2.56%	0.87%	-0.03%	NA

Cautionary Statement

This report will include "Forward-Looking Statements," such as statements about implementing strategic plans and other statements about Windsor Machines Limiteds potential business developments and financial results. Although these Forward-Looking Statements reflect the Companys current evaluation and potential expectations for the development of the Companys business, a variety of risks, uncertainties, and other unknown factors could cause actual developments and outcomes to vary materially from those expected. General market, macroeconomic, governmental, and regulatory patterns, changes in currency exchange and interest rates, competitive pressures, technical advances, changes in the financial conditions of third parties doing business with the Company, regulatory developments, and other main factors that may influence the Companys business and financial results. Windsor Machines Limited disclaims any duty to update or amend any forward-looking statements to represent events or circumstances that might occur in the future.