SM Auto Stamping Ltd Management Discussions

ANNEXURE VI

1. BUSINESS OVERVIEW:

We are in business of designing and manufacturing of sheet metal components and sub-assemblies requirements of automobile parts/equipment manufacturers. Our range of product primarily covers sheet metal pressed components for clutches, brakes, engine mountings, chassis, shaft drive, body trims.These components are used widely in passenger cars, commercial vehicles and tractors. Our products such as deep drawn components and control panel components also find application in electrical equipment industry. We have in-house tool room facility at all plants where activities related to designing, development, maintenance of various products & tools are undertaken.

We operate three state-of-the-art manufacturing units located in Nashik, Maharashtra, spread across industrial plots totaling appx. 5,000 square meters. Each facility adheres to ISO/IATF 16949:2016 quality standards. Apart from manufacturing, we also provide job work services in respect of blanking and forming process on sheet metal components.

Our portfolio of products can be classified into following categories:

A. Components used in Automotive Power Train

1. Components for automotive clutches

2. Components for automotive propeller shaft drive

3. Components for automotive brake system

4. Components for automotive engine mountings

B. Components used in Automotive Body

1. Components for automotive body trims

2. High tonnage components

C. Components used in Automotive Chassis D. Automotive welded assemblies E. Deep Drawn Components F. Components for electrical industries.

2. BUSINESS OPPORTUNITIES: Strength:

In-house tool manufacturing facility and Press shop facility:

Our Company has its own in-house tool manufacturing facility and press shop facility which enables us to maintain high quality production standards and also help us in minimizing production time and bringing cost effectiveness. Our tool room is capable of manufacturing press tools for small to medium range of automotive & electrical pressed parts. Our In-house press shop facility consists of Hydraulic press machines, Pneumatic Power Press Machines, Mechanical Power Press Machines.

Wide product range and customized product offering:

We have built robust infrastructure to enable customized product development, allowing us to closely analyze customer requirements and deliver solutions that precisely meet their needs. In addition to this flexibility, our extensive product portfolio includes a wide variety of sheet metal components ranging from precision fabrication and finishing to complete assemblies. These offerings span a broad spectrum of sizes and specifications, empowering us to serve a diverse and extensive array of industry requirements.

Vast Experience of Promoters:

Our Companys core strength lies in the extensive experience gained by our Promoters in this industry. Our Promoters, Mr. Suresh GunwantFegde and Mr. Mukund Narayan Kulkarni possess more than 40 years of experience in this field, which enables us to deliver quality products to our customers and help us to gain expertise in the production.

Existing customer relationship:

We believe that we constantly try to address customer needs around a variety of products. Our existing customer relationships help us to get repeat business from our customers. This has helped us maintain a long term working relationship with our customers and improve our customer retention strategy. We believe that our existing relationship with our customers represents a competitive advantage in gaining new customers and increasing our business.

OUR BUSINESS STRATEGY: We intend to pursue the following principal strategies to leverage our competitive strengths and grow our business:

Utilization of Existing Installed Capacity:

For the year ended 31st March 2025, our total production was 6,230 MT, which represents 55% utilization of our installed capacity. Considering the future demand potential, we aim to progressively enhance this utilization to achieve optimum output levels.

Improving operational efficiencies:

Our Company intends to improve operating efficiencies to achieve cost reductions so to have a competitive edge over the peers. We believe that this can be done through continuous process improvement, customer service and technology development.

Leveraging our Market skills and Relationships:

This is a continuous process in our organization and the skills that we impart in our people give importance to customers. We aim to do this by leveraging our marketing skills and relationships and further enhancing customer satisfaction. We plan to increase our customers by meeting orders in hand on time, maintaining our customer relationship and renewing our relationship with existing buyers.

Focus on consistently meeting quality standards:

Presently, Our Company is certified from ISO 9001:2015/IATF 16949:2016 by TUV NORD& ZED Silver by Quality Councial OfIndia , further, we intend to focus on adhering to the quality standards of the products. This is necessary so as to make sure that we get repeat orders from our customers. This will also aid us in enhancing our brand value.

Opportunities:

Economic Growth of Domestic and International Market. Government policies to scrap the old vehicles. Our customers are keen on developing new supplies. Upcoming opportunities in export market.

Government promotional scheme.

Expanding aftermarket business with customers.

There are related expansions, growth prospectus and better opportunities in the SM Autovision Private Limited, the Associate Company of the Company, considering the same it will ultimately benefit our Company. We are exporting sheet metal stamped parts.

3. SEGMENT /PRODUCT WISE PERFORMANCE:

The Company operates only in the Automobile Component Segment, i.e. development, manufacture and selling of automotive components mainly sheet metal components, welded assemblies and modules for automobiles. In current year we have increased electrical engineering and electronics product from SIEMENS, Nashik.

4. OUTLOOK:

The growth of the automotive industry, which is closely tied to infrastructure development and financing availability, is expected to align with projected GDP expansion. The sector has demonstrated remarkable resilience, reflected in rising sales volumes and value. Innovation continues to accelerate, with significant investments being made in new capacities particularly for electric vehicles (EVs). With growing customer demand and a wave of technological advancements, the industrys future remains promising despite prevailing challenges.

5. RISK AND CONCERNS:

Supply Chain Management: The risk associated with supply chain disruptions continues to be a critical concern for the sheet metal stamping industry at both domestic and global levels, as have added new layers of complexity to global supply chains While global logistics and supply conditions have shown signs of stabilization and geopolitical disruptions, uncertainties still linger, especially with respect to shipping delays, transportation costs, and material availability. Delays in the supply chain can impact project execution timelines, input costs, and quality consistency, thereby affecting overall profitability. During this year, our company further strengthened its mitigation strategies by deepening relationships with key suppliers, diversifying procurement sources, and maintaining optimal inventory levels to ensure a reliable and uninterrupted supply of raw materials. Raw Material Price Volatility: Raw material prices remained volatile throughout the year due to fluctuating global demand, commodity market uncertainties, and input cost pressures. For the sheet metal stamping sector, where steel and alloy prices significantly impact cost structures, such fluctuations pose a serious challenge. Our company effectively navigated this risk by entering into long-term rate contracts with strategic suppliers and incorporating pricing escalation clauses where applicable. This approach enabled us to manage production costs more predictably and reduce the adverse impact of sudden price hikes on our margins. Government Policy and Duties: For this year saw several regulatory and policy developments in India, including revisions in import/export duties, changes in environmental compliance norms, and updates to labor and taxation policies. These changes have the potential to influence cost structures, operational compliance, and market dynamics. Our company maintained a proactive stance by closely tracking policy announcements and engaging with relevant industry associations. We have remained compliant with all applicable statutory and regulatory requirements and have adapted our operational strategies to align with evolving government policies, ensuring minimal disruption to business continuity. In summary, although the sheet metal stamping industry continues to operate in a dynamic and challenging environment, our company has demonstrated agility and foresight in managing key business risks during this year. By fostering resilient supply chains, managing raw material cost pressures proactively, and staying ahead of policy shifts, we have ensured operational stability and financial sustainability. These efforts reinforce our commitment to responsible and forward-looking management practices as we prepare for continued growth in the coming fiscal years.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place adequate internal control systems covering all its operations. Proper accounting records highlight the economy and efficiency of operations, safeguarding of assets against unauthorized use or losses, and the reliability of financial and operational information. Some of the significant features of internal control system are:

- Financial and Commercial functions have been structured to provide adequate support and control of the business.

- Risk Management policy has been adopted by the Company.

- The Company has an Internal Audit System conducted by the Internal Auditor of the Company. Standard operating procedures and guidelines are reviewed periodically to ensure adequate control.

7. OVERVIEW AND ANALYSIS OF FINANCIAL CONDITIONS:

During the financial year 2024-25, your Company has achieved Revenue from operations of 66,38,33,240 /-as compared to 67,56,36,526/in the Previous Year. The profit after taxes and deferred tax expenses for current financial year is 2,74,97,446/-as compared to 3,00,37,279/- during the Previous Financial Year.

The Management believes that it has been objective and prudent in making estimates and judgments relating to the Financial Statements and confirms that these Financial Statements are a true and fair representation of the Companys Operations for the period under review.

8. DEVELOPMENT ON HUMAN RESOURCE FRONT:

At SM Auto Stamping Limited, our human resources are critical to our success and carrying forward our mission. With their sustained, determined and able work efforts we were able to cruise smoothly through the hard time of the economic volatility and rapidly changing market conditions. The requirement of the markets given the economic scenario has made this even more challenging. Attracting new talent with the drive, training and upgrading existing skill sets and getting all to move in a unified direction will definitely be a task in the company. By creating a conducive environment for career growth, Company is trying to achieve the maximum utilization of employees skills in the most possible way. There is need and the company is focused on retaining and bringing in talent keeping in mind the ambitious plans despite the market and industry scenario. The company also believes in recognizing and rewarding employees to boost their morale and enable to achieve their maximum potential. Every year on January 26th, we host our annual get-together with employees and their families. The event includes cultural performances by employees children and recognition of their academic achievements. We also organize friendly competitions in cricket, carrom, and chess. As part of the celebration, we honor our top-performing employees for their outstanding contributions. The Company has indulged with HRRDC Pvt. Ltd., a specialized training organization, to conduct regular development sessions for employees. These sessions are designed to enhance individual performance and align personal growth with organizational goals.

9. INDUSTRIAL RELATIONS:

In order to continue delivering quality products to our key customers, our Company shall further strengthen its relationship with key vendor i.e. sub-contractors. Our Company is also working on strategy to develop more and more vendors who can deliver product and services in line with Companys philosophy and product offerings, Industrial Relations throughout the year continued to remain very cordial and satisfactory.

10. KEY FINANCIAL RATIOS:

Sr. No	Particulars of Ratio	31.03.2025	31.03.2024
1.	Inventory Turnover	9.04	10.05
2.	Interest Coverage Ratio	42.57	34.45
3.	Current Ratio	1.23	0.88
4.	Debt Equity Ratio	0.11	0.03
5.	Net Profit Margin (%)	4.14%%	4.45%

11.DETAILS PERTAINING TO NET-WORTH OF THE COMPANY:

Particulars	31.03.2025 ( In )	31.03.24 (In )	Explanation of change
Net-worth	20,36,84,029/-	17,61,86,,583/-	Net Worth has increased due to operational profit during the year.

 

For and on behalf of Board of Directors of

SM Auto Stamping Limited

Sd/-

Mr. Mukund Narayan Kulkarni

Chairperson and Managing Director

DIN: 00248797

Add:-Alkund Banglow, Krishna Colony Shivaji

Nagar,Jail Road, Nashik Road Nashik 422101

MH IN

Date:18.07.2025

Place: Nashik