Remsons Industries Ltd Management Discussions

Economic overview

Global economy¹

In Calendar Year (CY) 2024, the global economy maintained moderate yet steady growth, expanding by approximately 3.3% despite ongoing geopolitical tensions, evolving trade dynamics and shifts in monetary policy. In response to these persistent challenges, governments worldwide have adjusted their economic approaches, placing greater focus on technological advancement, reinforcing supply chain resilience and promoting economic diversification to support long-term sustainability.

Inflationary pressures eased notably in CY 2024. Global inflation declined from 6.6% in CY 2023 to 5.7% in CY 2024, largely due to the effectiveness of monetary tightening and increased stability in energy markets. This moderation in inflation helped restore price stability, supported economic recovery and enabled central banks to consider a gradual normalisation of policy rates. The improvement in inflation dynamics was particularly important in maintaining consumer and investor confidence amid a complex global environment.

Emerging Markets and Developing Economies (EMDEs) were the primary drivers of global growth, expanding by 4.3% and significantly outpacing the 1.8% growth seen in advanced economies. Their robust performance was fuelled by strong domestic demand, increased foreign investment and reduced dependence on external trade partners. These regions benefited from proactive policy measures aimed at enhancing economic resilience, positioning them as key contributors to the worlds economic momentum.

Outlook

Global economic growth is expected to remain moderate, with projections of 2.8% in CY 2025 and 3.0% in CY 2026 with easing inflation and continued monetary policy support by central banks. Emerging markets are anticipated to grow steadily at 3.7% in CY 2025, while advanced economies are likely to see a slower recovery, with growth forecasted at 1.4%.

Inflation is expected to decline further to 4.3% in CY 2025 and 3.6% in CY 2026, potentially boosting consumer spending.² Although rising tariffs may affect global trade, the overall economic system is anticipated to showcase resilience. Structural advancements such as technological progress, productivity gains and improved infrastructure are expected to support long-term, sustainable growth.

Global Real GDP Growth Projection (%)

Indias economy

India continued to rank among the worlds fastest-growing major economies, achieving a 6.5% GDP growth rate in the Financial Year (FY) 2025, despite facing global economic headwinds and geopolitical tensions. This performance was largely driven by targeted government initiatives aimed at boosting economic activity, particularly through infrastructure development. In the Union Budget, the Government of India allocated Rs.11.21 lakh crore with a focus on enhancing rural connectivity, which contributed significantly to economic momentum. Despite this large capital outlay, India successfully managed to contain its fiscal deficit at 4.4% of GDP, creating space for increased public spending and demand stimulation.³

In addition to government measures, the decline in inflation played a crucial role in supporting economic growth. Inflation decreased from 5.4% in FY 2024 to 4.7% in FY 2025, helping restore consumer confidence. This moderation in inflation fuelled household purchasing power, leading to a surge in consumption in both urban and rural areas. The increased demand across various sectors further accelerated Indias economic recovery.

Outlook

The Indian economy is expected to sustain a strong growth rate of 6.5% in FY 2026, driven by a number of key factors. One significant factor is the Government of Indias income tax reform, where salaried employees earning up to Rs.12.75 lakh are exempt from income tax, effectively increasing disposable income and stimulating customer spending.⁴ Moreover, continued public investment in infrastructure, combined with robust expansion in manufacturing, trade and financial services, should improve industrial activity and increase productivity. The governments emphasis on capital spending, initiatives to boost rural consumption and development of both digital infrastructure and physical infrastructure is likely to further fuel economic growth.

Moreover, as supply chains stabilise and input costs moderate, industries related to essential services and everyday consumption are positioned to benefit from increased demand while improving operational efficiency. The Reserve Bank of Indias recent 25 basis points reduction in the repo rate is expected to improve liquidity, enhance credit access and positively influence market sentiment, further supporting economic growth

GDP growth trend in India (%)

Industry overview

Global automobile Industry

The global automotive market is experiencing significant transformation, fuelled by rapid technological advancements, changing consumer preferences and the evolving regulatory landscape. Some of the major trends driving the market are increasing adoption of electric and hybrid vehicles, innovation in long-range batteries and the emergence of autonomous driving technology. Original Equipment Manufacturers (OEMs) are actively expanding their hybrid models and increasingly utilising digital platforms to streamline online car sales and gain customer engagement. The rising emphasis on sustainability and connectivity is further driving innovation across the industry.

The Asia-Pacific region continues to be the leading region for car manufacturing and sales, with China being the worlds biggest market for both car production and consumption. The region is underpinned by a strong supply chain, especially in the manufacturing of Electric Vehicle (EV) batteries, reinforcing the regions leadership in the global drive towards electrification. Additionally, increase in demand for premium and luxury vehicles, particularly in developing economies, is encouraging OEMs to offer more premium features and services. With continued investments in infrastructure and technology, the global automotive industry is poised for sustained evolution and growth over the next few years.

Indian automobile industry⁵

Indias automotive sector continued its growth momentum, recording a 7.3% increase in domestic sales and a 19.2% hike in exports. This growth was fuelled by robust customer demand, substantial infrastructure spending and government policies advocating sustainable mobility. Passenger Vehicles (PVs) hit a record of 4.3 million units in sales, with Utility Vehicles (UVs) being the primary growth drivers. The two-wheeler segment expanded by 9.1%, due to increasing rural demand and consumer confidence. Three-wheelers also achieved their highest ever sales led by urban mobility requirement and easier access to financing.

Despite a slight decline of 1.2% in commercial vehicle sales, the segment benefitted from widening roads and rising demand for mass mobility solutions. Export performance was notable across all segments, particularly for PVs and two-wheelers, reflecting Indias growing competitiveness in overseas markets. Electric Vehicle (EV) adoption accelerated as well, with overall registrations rising by 16.9% year-on-year, supported by new government initiatives.

The Indian automotive industry is balanced to sustain its growth momentum in FY 2025. Stable macroeconomic conditions, ongoing infrastructure development and proactive government measures-including income tax reforms, are expected to boost consumer confidence and vehicle financing accessibility. A forecasted normal monsoon may further stimulate rural demand, especially for two-wheelers and entry-level vehicles. Continued focus on export markets and the Government of Indias commitment to promoting sustainable mobility through new EV policies and incentives will further support industry expansion.

Indian auto components industry

The Indian automotive components sector is a key pillar of the nations manufacturing base, catering to domestic vehicle market and international supply chains. The sector produces a large variety of products such as engine components, transmission units, electronics, catering to Original Equipment Manufacturers (OEMs) and the aftermarket segment. Its development is closely linked to the growth of the motor vehicle industry, supported by expanding consumer demand, mounting vehicle exports and rapid technological advancements.

The sector has shown resilience in the face of setbacks like global supply chain disruptions and changing regulatory norms. Indias auto component makers are emphasising on innovation, quality enhancement and cost competitiveness to cater to the changing demands of domestic as well as overseas customers. The industry has also invested in research and development, especially in electric mobility and smart automotive technologies.

Being the worlds fourth-largest automobile manufacturer, Indias auto industry is strongly linked with multiple key sectors, from steel and electronics to IT and logistics and sustains millions of jobs throughout the country. With its strong manufacturing base, Indias contribution to the worlds auto component trade is relatively small, particularly in high-value domains, reflecting immense unrealised potential. The Government of India has initiated a number of strategic programmes-like Make in India, Atmanirbhar Bharat, the FAME India Scheme and Production Linked Incentive (PLI) schemes-to encourage indigenous manufacturing, stimulate innovation and speed up the adoption of electric vehicles.

Performance of the auto industry during 2024-2025

Production sales trend⁶

Category	2020-2021	2021-22	2022-23	2023-24	2024-25
Passenger vehicles	30,62,280	36,50,698	45,87,116	49,01,840	50,61,164
Commercial Vehicles	6,24,939	8,05,527	10,35,626	10.67,504	10,32,645
Three Wheelers	6,14,613	7,58,669	8,55,696	9,96,159	10,50,020
Two Wheelers	1,83,49,941	1,78,21,111	1,94,59,009	2,14,68,527	2,38,83,857
Quadricycles	3,836	4,061	2,897	5,006	6,488
Grand Total	2,26,55,609	2,30,40,066	2,59,40,344	2,84,39,036	3,10,34,174

Domestic sales⁷

Category	2020-2021	2021-22	2022-23	2023-24	2024-25
Passenger vehicles	27,11,457	30,69,523	38,90,114	42 18,750	43,01,848
Commercial Vehicles	5,68,559	7,16,566	9,62,468	9,68,770	9,56,671
Three Wheelers	2,19,446	2,61,385	4,88,768	6,94,801	7,41,420
Two Wheelers	1,51,20,783	1,35,70,008	1,58,62,771	1,79,74,365	1,96,07,332
Quadricycles	-12	124	725	725	120
Grand Total	1,86,20,233	1,76,17,606	2,12,04,846	2,38,57,411	2,56,07,391

Export sales⁸

In FY 2024-25, passenger vehicle exports grew from 672,105 units to 770,364 units. Similarly, commercial vehicle exports increased from 65,816 units to 80,986 units, while three-wheeler exports rose from 299,977 units to 306,914 units. Additionally, two-wheeler exports saw an upward trend, growing from 3,458,416 units to 4,198,403 units.

7,70,364

Passenger vehicle exports in 2024-25

80,986

Commercial vehicles exports in 2024-25

3,06,914

Three-wheelers exports in 2024-25

41,98,403

Two-wheeler exports in 2024-25

Government initiatives

Production Linked Incentive (PLI) scheme

The PLI Scheme for the automotive and auto component sector is intended to enhance domestic manufacturing capacity and attract major investments. The scheme targets to encourage production in the form of advanced auto technology products, including those used in electric vehicles. By promoting innovation and modern manufacturing skills, the initiative aims to improve Indias global competitiveness and enhance the countrys position as a centre for automotive innovation.

Faster Adoption and Manufacturing of Electric Vehicles (FAME) India Scheme – Phase II

The FAME-II programme aims to accelerate the growth of electric and hybrid vehicles in India. It provides incentives for local production of electric vehicle parts, such as batteries and power electronics. The assistance not only encourages local manufacturing and demand for domestic auto parts, but also aligns with Indias vision of cleaner and sustainable transportation. The scheme aims to strengthen the EV supply chain and stimulate production and demand within the country.

Remission of duties and taxes on exported products (RoDTEP)

The RoDTEP scheme boosts the international competitiveness of Indian automobile component exporters by allowing rebates for embedded duties and taxes that are unreimbursed under any other programme. The scheme simplifies the export process, supports the growth of the export-oriented manufacturing and increases Indias presence in the global automotive components market.

Research and Development (R&D) and testing infrastructure support

For promoting innovation and quality, the Government of India is offering financial support for R&D activities and setting up world-class testing facilities. This is crucial for developing high-performance auto components and ensuring their reliability and safety, thus enhancing the global appeal of Indian automotive products.

Export promotion initiatives

The Government of India has also stepped up its export promotion activities by enabling Indian auto component manufacturers to participate in overseas trade fairs, conducting buyer-seller meets and extending market access. These efforts are designed to promote Indias manufacturing capabilities on international platforms, create new trade ties and substantially increase exports from the industry.

PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme

The Government has launched the PM E-DRIVE scheme with an allocation of Rs.10,900 crore. This initiative is aimed at promoting the adoption of electric vehicles, including electric two-wheelers, three-wheelers and passenger cars, as well as facilitating the upgradation of testing agencies.⁹

Opportunities and challenges

Opportunity

Expansion of Electric Vehicle (EV) ecosystem

Indias EV sector is growing rapidly with government support. OEMs are investing across vehicle categories, driving demand across the EV value chain. Key focus areas include drivetrains, Battery Management Systems (BMS), thermal systems, lightweight materials and EV charging infrastructure.

Global supply chain diversification

India is emerging as a cost-effective alternative as global OEMs seek alternatives to China. With a rich pool of engineering talent and competitive cost advantages, India is experiencing increased demand in segments such as precision-forged parts, wiring harnesses, transmissions and castings.

Strong domestic demand

Indias automotive market is experiencing strong demand due to replacement cycles, infrastructure development and premiumisation. Passenger vehicles, two-wheelers and Commercial Vehicles (CVs) are driving volume growth. This is boosting demand for aluminium die-cast parts, infotainment systems and safety features.

Aftermarket and E-Commerce growth

An expanding vehicle base is driving demand in Indias aftermarket, which is shifting towards organised and digital formats. E-commerce, predictive maintenance tools and digital supply chains are improving accessibility and customer satisfaction.

Green manufacturing and sustainability initiatives

OEMs and suppliers are aligning operations with global Environment, Social and Governance (ESG) and carbon reduction goals. Emphasis on lightweight composites, recycled materials and eco-friendly manufacturing processes is helping companies lower costs and strengthen brand positioning.

Challenges

Decline in export demand

Macroeconomic instabilities and inflation pressures within major export destinations such as Europe and North America have slowed down demand for Indian auto components.

Technology disruptions and capital intensity

The transition towards software-defined vehicles, Advanced Driver-Assistance Systems (ADAS) and connected car technologies requires significant investment in R&D and digitalisation. This puts financial strain on traditional manufactures, especially those less likely to adapt quickly.

Changing emission and safety norms

Adherence to evolving norms such as BS-VI Stage 2 regulations, CAF? targets and contemplated Bharat NCAP (Indias vehicle crash-test regimen) are driving prices up and pushing smaller OEMs and suppliers to accelerate technology upgrades.

Global competition and localisation pressures

Global OEMs are demanding localisation of EV and high-tech components. Indian players, however, may face challenges in scaling high-tech localised manufacturing due to limited access to advanced technologies.

Outlook¹⁰

Indias automotive industry plays an important role in the countrys manufacturing sector and contributes significantly to economic growth. The market is supported by government policies, technological advancements and changing consumer preferences.

The Government of Indias Automotive Mission Plan 2047 aims to position India as a global hub for automotive manufacturing and R&D, with a goal of producing four million passenger vehicles by 2032. The market is expected to expand from 5.1 million units in 2023 to 7.5 million units by 2030, making India the third-largest passenger vehicle market globally.

A major shift towards Electric Vehicles (EVs) is underway, fuelled by initiatives like FAME II and the Electric Mobility Promotion Scheme. Additionally, consumer demand is increasing for larger vehicles such as SUVs and utility vehicles, while the commercial vehicle segment is expanding in the lower Gross Vehicle Weight (GVW) and medium-heavy categories. This evolving landscape is also driving growth in the aftermarket and used car sales sectors, with the total number of vehicles expected to double by 2030.

Technological innovations are enhancing vehicle safety and user experience, with advances in connected car technology, ADAS and 5G integration. These developments are setting the stage for Indias automobile industry to lead globally, focusing on sustainability, innovation and infrastructure expansion. This transformation positions India as a key player in the global automotive market, contributing to its future leadership in the sector.

Company overview

Remsons Industries Limited is one of Indias pioneering manufacturers of control cables and a key player of the countrys automobile components sector. Over the decades, the Company has earned a reputation as a trusted supplier of precision-engineered components catering to a diverse set of vehicles, including two-wheelers, three-wheelers, passenger cars, commercial vehicles, off-highway vehicles and more recently, the railway segment.

The Company operates through multiple manufacturing facilities in India and the UK, catering to a broad base of Original Equipment Manufacturers (OEMs) and dealers, while also maintaining a growing export presence across several global markets.

The Company offers a comprehensive and technologically advanced product portfolio, allowing it to add value across the entire automotive value chain. Its strong manufacturing capabilities and engineering expertise helps it to deliver high-quality, customised solutions, strengthening its competitive positioning in both domestic and international arenas.

Driven by a customer-centric and innovation-led business model, Remsons Industries Limited continues to pursue global expansion through strategic joint ventures and acquisitions. The Company is actively investing in high-margin, next-generation technologies while expanding its footprint in key international markets. Its EV-agnostic product suite ensures relevance in the evolving mobility landscape.

250+

Total dealers

20+

Total exporting countries

7

State-of-the-art manufacturing facilities

Outlook

The outlook for the business remains optimistic, supported by a strong order book, strategic acquisitions and expansion into high-margin product segments. With recent wins from global OEMs, entry into the electric mobility space and diversification into sensor and lighting solutions, the company is positioned to benefit from sectoral shifts such as electrification, premiumisation and localisation

The revenue growth is expected to be driven by contributions from recent acquisitions, product mix enhancement and geographic expansion in both domestic and export markets. The strategy includes capturing opportunities in adjacent mobility and non-automotive sectors, leveraging operational synergies and maintaining prudent financial discipline.

Discussion on financial performance with respect to operational performance

Financial highlights with respect to operational performance

(INR in Lakhs except EPS)

	Standalone		Consolidated
Particulars	2024-25	2023-24	2024-25	2023-24
Total revenue	28,198.04	25,946.29	37,985.69	31,556.50
EBITDA	2,805.84	2,568.50	4,062.92	3,443.82
Profit before tax	1,501.43	1,194.73	2,244.80	1,624.13
Profit after tax	1,107.84	884.98	1,436.84	1,331.96
EPS	3.18	2.97	4.12	4.48

Details of significant changes in key financial ratios:

The Company has identified following ratios as key financial ratios:

	Standalone			Consolidated
Particulars	2024-25	2023-24	% Change	2024-25	2023-24	% Change
Debtors Turnover	6.23	6.00	4%	5.60	5.53	1%
Inventory Turnover	6.84	6.69	2%	6.08	6.45	-6%
Interest Coverage Ratio	4.08	3.15	30%	4.51	3.39	33%
Current Ratio	1.33	1.47	-10%	1.48	1.61	-8%
Debt equity ratio	0.58	0.41	41%	0.63	0.61	3%
Operating profit margin %	7.15	6.81	5%	7.66	7.38	4%
Net profit margin %	3.98	3.44	16%	3.82	4.26	-10%

Reason for change exceeding 25%

1. Interest Coverage Ratio improved due to decrease in Finance Cost & increase in operating Margin.

2. Debt Equity Ratio increase due to addition of Term loan of Rs.1500 Lakhs.

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

The Return on Net Worth for the financial year 2024-25 is 10.15 %, down by 185 basis points from 12.00% in the financial year 2023-24, due to increase in weighted average equity base as compared to the previous financial year.

Risks and concerns

The business operates in an environment influenced by multiple external and internal factors that can impact growth and profitability. Geopolitical uncertainties, fluctuating trade policies and inflationary pressures can disrupt supply chain sand affect dem and across domestic and export markets. Rising input and labour costs, coupled with intense competition in the automotive components space, pose additional challenges Dependence on a diverse yet cyclical automotive sector exposes the business to variations in OEM production schedules and end-user demand. Expanding into new geographies and product segments brings opportunities but also heightens exposure to regulatory changes, foreign exchange volatility and integration risks from acquisitions. Additionally, managing a wide range of products, balancing profitable niche items with high-volume products that requires careful planning to maintain margins as market conditions change.

Material developments in human resources

As part of its transformative journey, Remsons Industries Limited made significant strides in strengthening its human capital. The Company retained its ‘Great Place to Work certification for the fourth consecutive year and was ranked among the Top 25 of Indias Best Workplaces in Manufacturing, underscoring its commitment to building a resilient and employee-centric workplace.

Investments in upskilling and leadership development remained a priority, with senior leaders participating in top-tier management programmes from institutions like IIM Ahmedabad. These initiatives were aimed at equipping the workforce with capabilities to drive future-ready innovations, particularly in the fields of automotive electronics and EV-agnostic technologies. The Companys continued focus on human capital excellence was further highlighted by securing the first position in ACMAs HR competition, affirming its excellence in human capital management.

249

Total employee strength

4 years

in a row GPTW certified

Internal control systems and their adequacy

The Company is dedicated to maintaining a robust internal control system, which includes thorough monitoring procedures. Internal auditors rigorously supervise operational controls at various Company locations on a regular basis. If any irregularities or significant issues arise, they promptly report them to the Audit Committee and the Managing Director. Subsequently, appropriate actions are taken to ensure adherence to the established system.

Cautionary statement

Certain statements in the ‘Management Discussion and Analysis Report may be forward-looking as mandated by relevant laws and regulations. Various factors could affect actual outcomes, causing them to differ from the Directors expectations regarding future performance and outlook.