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Q3 FY 2024 Manufacturing Report _ Amicus Growth Advisors

Explore the Q3 FY 2024 Manufacturing Report by Amicus Growth Advisors. Gain valuable insights into industry trends and performance metrics.

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Q3 FY 2024 Manufacturing Report _ Amicus Growth Advisors

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  1. PropelX Making it Happen Quarterly Review of India's Manufacturing Progress Q3 FY2024 March 2024 Connect us on : Business@amicusllp.com | www.amicusllp.com

  2. Index 1. Introduction 2. Budget Highlights for the Manufacturing Sector 3. Manufacturing prowess thrives amid global challenges 4. Nikkei India Manufacturing PMI 5. India's Manufacturing: Growth, Challenges, Prospects 6. India’s FDI Landscape 7. Insights into the PLI Scheme 8. Valve Industry Performance 9. The Role and Projections of the EPC Sector 10. EPC Sector Performance 02 Amicus Growth Advisor | Quarterly Manufacturing Report

  3. 9820075360 Dear Readers, I am glad to share with you the latest edition of our quarterly ( ending Dec 23) newsletter, highlighting the vibrant landscape of the manufacturing sector in India. As the managing partner of Amicus Growth Advisors, a strategic consulting firm dedicated to empowering manufacturing companies across India, I am happy to showcase the immense opportunities and growth potential within the manufacturing sector in India. India's economy is on an upward trajectory, with GDP projections indicating impressive growth. Under the visionary political leadership and the Make in India initiative, our nation stands at the threshold of becoming a global manufacturing hub. In this edition, we explore the latest industry developments, budget highlights, and key initiatives driving growth, including demystifying industry jargon such as PMI (Purchasing Managers' Index) and insights into FDI inflows into the manufacturing sector. Additionally, we provide in-depth analysis and regulatory updates alongside the quarterly results of leading listed valve manufacturing companies in India. At Amicus Growth Advisors, we are passionate about fostering innovation, driving efficiency, and propelling businesses toward sustainable success. Through our strategic consulting services, we aim to empower manufacturing companies to thrive in today's dynamic environment and seize the abundant opportunities that lie ahead. I invite you to delve into this edition of our newsletter, explore the possibilities, and join us in shaping the future of manufacturing in India. Together, let us harness the momentum and propel our industry to new heights of excellence. Warm regards, Managing Partner, Amicus Growth Advisor 03 Amicus Growth Advisor | Quarterly Manufacturing Report

  4. Our Economy: Where Do We Stand Now? The economic growth in the October- December quarter (Q3) of FY24 surged unexpectedly to 8.4%, driven by a remarkable expansion manufacturing sector. This exceeded economists expectations and raised the full fiscal year projection to 7.6% from 7.3%. Manufacturing experienced exceptional growth of 11.6% in Q3, contributing significantly to the overall economic performance, while the fiscal year is forecasted to grow by 8.5 %. Contributing 17% to the GDP, with a targeted increase manufacturing plays a pivotal role in India's economic growth. India aims to export goods worth US$ 1 trillion by 2030, advancing towards becoming a prominent global manufacturing center. Challenges: In Q3 FY24, 67% reported increased production costs due to rising raw materials, utilities, labor, and borrowing expenses. shortages persist. in the Workforce IIP: December 2023 Quick Estimates for the Index of Industrial Production (IIP) stand at 151.5, Manufacturing sector's IIP at 150.6. November and October 2023 revisions incorporated updated data with high response rates. to 25%, FDI: India's ranking in the top 100 clubs for Ease of Doing Business and Foreign Direct Investment (FDI) totaling US$33 billion has been recorded for the fiscal year 2023-24 up to September 2023, indicate its growing attractiveness. FDI surged to US$ 596 billion in the last 9 financial years, with manufacturing sector inflows doubling. Key Highlights Budget FY25: The capital expenditure (capex) for the next fiscal year will increase by 11% to Rs 11.11 lakh crore, reflecting a surge in private investment. The government had previously raised capex by 37.5% to Rs 10 lakh crore for the current fiscal year. Power EPC Sector: The power EPC market in India, estimated at US$ 13.8 billion in 2022, is projected to grow robustly, with a forecasted CAGR of 21.94% from 2023 to 2029, reaching US$ 45.36 billion by 2029. Capacity Utilization: Manufacturing sector shows consistent 73% capacity utilization, with over 50% planning investments despite challenges like raw material costs. Capex: Central government-led capital expenditure surged from 12.1% to 22.2% of total spending between FY21 and FY24. India Inc. witnessed notable investment recovery in FY23, yet project announcements softened in H1 FY24. Inventories & Exports: Q3 FY24: 88% maintained or increased inventory; Q4 FY24: 84% expect stability or growth. Export-wise, 31% saw higher exports. 04 Amicus Growth Advisor | Quarterly Manufacturing Report

  5. Interim Budget FY 24-25 Highlights: Driving Manufacturing Growth Make in India Boost Automobile PLI Renewed focus on "Make in India" initiative to establish India as a global hub for semiconductor and electronics manufacturing. FY25 witnessed a 623% surge in the Automobile sector's budget to Rs 3,500 crore from Rs 484 crore in the FY24 revised estimates. PLI Scheme Capital Expenditure Surge Deep-Tech Innovation Initiative 11.1% rise in capital expenditure outlayEstablishment of a Rs. 1 lakh crore to Rs. 11,11,111 crore for the upcomingcorpus with a fifty-year interest-free year, emphasizing infrastructuralloan to support deep- tech development and economic expansion.technologies, aimed at driving growth, employment, and development. SemiconductorGovt. to bolster e-vehicle Developmentecosystem with manufacturing, charging support. Allocation of Rs 6,903 crore for FY25,New scheme for bio-manufacturing, bio-foundry to drive green growth. marking a 360% increase from the Budget's indirect tax proposals to previous year, to bolster the boost domestic manufacturing. semiconductor and display New co-operatives starting manufacturing ecosystem. manufacturing by 31.3.2024 qualify for 15% tax rate. Amicus Growth Advisor | Quarterly Manufacturing Report 05

  6. India's Manufacturing Sector Flourishes, amid Global Challenges The 61st edition of FICCI’s Quarterly Survey on Manufacturing (QSM) unveils a sustained period of growth in India’s manufacturing sector during the last two quarters of FY24. Contrasting with Q3 FY24, where 73% of respondents reported increased production levels, the current Q4 FY24 indicates a higher expectation, with approximately 87% of respondents anticipating either higher or stable production levels. The survey gathered feedback from 400+ manufacturing units, across 10 key sectors, including both large and SME segments, with a total annual turnover exceeding Rs. 3.4 lakh crores. Current Average Capacity Utilization - FICCI Survey (%) Capacity Expansion and Utilization Dynamics The existing average capacity utilization in manufacturing is around 73%, which reflects sustained economic activity in the sector, which is more or less same as reported in previous surveys. The future investment outlook also looks steady, with over 50% of respondents indicating plans for investments and expansions in the next six months. Challenges related to the availability of raw materials and their escalating prices, uncertainty in global demand, shortage of skilled labor, market volatility, increased power costs, unutilized capacities, and high bank interest rates, etc are some of the major constraints that are affecting expansion plans of the respondents. Amicus Growth Advisor | Quarterly Manufacturing Report 06

  7. The Manufacturing Sector's Upswing A Symphony of Optimism Growth and Production Trends The positive outlook on India's manufacturing sector is echoed by increased order books. In Q4 FY24, 85% of respondents anticipate a rise in orders compared to the preceding quarter Q3 FY24. Optimism prevails in domestic demand conditions during Q4 FY24. Inventories & Exports- A Silver Lining Amidst Global Headwinds Q3 Oct-Dec FY24: 88% kept or raised inventory, surpassing last year. Q4 (Jan-Mar) FY24: 84% expect stable or higher levels. Export-wise, 31% saw higher exports in Q3 FY24; over 40% anticipate increased exports in Q4 FY24 compared to the previous year. The Human Factor The hiring outlook remains stable as close to 40% of the respondents are looking at hiring additional workforce in the next three months. Manufacturers' Financial Landscape Manufacturers reported an average interest rate of 9.3%. Nearly 45% noted a slight uptick in lending rates due to recent increases in repo rates, raising borrowing costs. Approximately 90% of respondents indicated adequate fund availability from banks, whether for working capital or long-term capital needs. Growth for Q4 FY24 Automotive & Auto ComponentsModerate Expectations Navigating Costs Rising Production In respondents noted a rise in production costs, exceeding the quarter's findings. Rising raw material, utility, labor, and freight costs, along with high borrowing expenses due to interest rates, supply chain disruptions, and inventory management costs, contribute to increased production expenses. Most sectors report sufficient labor without shortages. 62% of respondents noted no workforce availability issues, while 38% cited a lack of skilled workers. Q3 FY24, 67% of slightly previous Capital Goods & Construction Equipment Moderate Moderate Chemicals, Fertilizers & Pharmaceuticals Strong Electronics & electricals Moderate FMCG Strong Machine Tools Moderate Metals & Metal Products Moderate Miscellaneous Moderate Paper & Paper Products Moderate Textile, Apparel & Technical Textile Moderate Low Strong Source: FICCI Survey Amicus Growth Advisor | Quarterly Manufacturing Report 07

  8. Knowledge Sharing: Understanding PMI, Do You know how is it Calculated? Nikkei India Manufacturing PMI Survey Methodology Nikkei India Manufacturing PMI® gathers monthly data from surveys sent to purchasing managers in over 400 industrial companies. Companies are selected based on their contribution to GDP and the size of their workforce. The manufacturing sector is segmented into eight primary categories: 1. Basic Metals 2. Chemicals & Plastics 3. Electrical & Optical 4. Food & Drink 5. Mechanical Engineering 6. Textiles & Clothing 7. Timber & Paper 8. Transport Composition of the Nikkei India Manufacturing PMI Survey compares current month to previous month, data collected mid-month. Reports show % of respondents reporting changes like improvement or decline. 'Net difference' shows gap between positive and negative responses. 'Diffusion index' adds positive responses and half of neutral responses. Index above 50 indicates improvement, below 50 suggests decline. Nikkei India Manufacturing PMI® has five individual indexes: New Orders (30%), Output (25%), Employment (20%), Suppliers' Delivery Times (15%), and Stock of Items Purchased (10%). PMI's Role in Economic Forecasting and GDP Estimation Survey covers variables relevant to different phases of the economic cycle. Provides insights into boom-bust patterns and aids in estimating GDP. Purchasing Managers' Index (PMI) serves as a direct indicator for GDP changes. PMI correlates with GDP at 85% on a quarterly basis. Ordinary Least Squares (OLS) regression analysis can derive a formula using PMI readings to estimate implied growth and GDP changes. Amicus Growth Advisor | Quarterly Manufacturing Report 08

  9. Knowledge Sharing: Understanding PMI, Do You know how is it Calculated? Markit's Insights on Economic Cycles and PMI Markit analyzes survey questions and their correlation with the economic boom and bust cycle. Economic expansions entail: - Increased employment and decreased unemployment. - Rising demand for raw materials, leading to supply chain bottlenecks and skill shortages. - Price hikes in wages, salaries, and raw materials, causing retail price inflation. Conventional policy responds by: - Raising central bank interest rates to counter inflation. - Increasing borrowing costs, slowing economic growth. Conversely, during slowdowns: - Interest rates may be lowered to stimulate economic activity. The cycle continues with fluctuating economic conditions. New Orders/ New Business Output/ Activity Employment Quantity of Purchases Backlogs of Work/Business Outstanding Suppliers’ Delivery Times Input Costs Output prices/ Charges Market Impact and Practical Applications of PMI Data PMI data release causes increased volatility and significant market movements. Market participants use PMI information to plan their positions. PMI is one of the most critical releases of the month, attracting substantial attention. Influences various assets, especially currencies and bonds. Companies utilize PMI insights for operations planning, including staffing, cash flow management, and budgets. PMI helps suppliers forecast future product demand. Supply and demand dynamics influence supplier pricing strategies. Rising orders may lead to price increases, while declining orders may result in price reductions. Amicus Growth Advisor | Quarterly Manufacturing Report 09

  10. Manufacturing Sector - Growth Trajectory, Challenges, and Prospects India is resolutely pursuing its goal of becoming a 5-trillion-dollar economy by 2026-27, positioning itself as the world's fifth-largest economy. A crucial aspect of this endeavor is the manufacturing sector, presently contributing 17% to the GDP. With a targeted increase to 25% and employing over 27.3 million workers, manufacturing holds a pivotal role in India's economic growth trajectory. India possesses the potential to export goods worth US$ 1 trillion by 2030 and is progressing towards establishing itself as a prominent global manufacturing center. To stimulate local manufacturing in six emerging sectors, India is contemplating offering incentives totaling up to Rs. 18,000 crore (US$ 2.2 billion). These sectors include chemicals, shipping containers, and vaccine inputs. The positive developments in the manufacturing sector, driven by production capacity expansion, government policy support, heightened M&A activity, and PE/VCled investment, are creating a robust pipeline for the country’s sustained economic growth in the years to come. Nikkei India Manufacturing PMI (Monthly) Source: S&P Global In December, India's manufacturing PMI, compiled by S&P Global in the HSBC India Manufacturing Purchasing Managers' Index, declined to 54.9 from 56 in November and 55.5 in October, where above 50 indicates expansion, and below 50 contraction. Factors Contributing to Manufacturing Growth Slowdown- Thefindings from the PMI survey suggested that manufacturers experienced only minimal pressure on their capacity by the end of the third quarter. The survey noted a slight uptick in outstanding business volumes, indicating stability. Moreover, employment levels remained relatively steady in December, with the seasonally adjusted index slightly surpassing the 50.0 no-change mark. The survey reported that growth was hindered by declining demand for specific product types. Although new orders placed with Indian manufacturers saw a notable increase, the pace slowed down in December compared to earlier months. Amicus Growth Advisor | Quarterly Manufacturing Report 10

  11. IIP Insights Manufacturing Sector Performance FY24 Index of Industrial Production & Average line for the manufacturing sector across India Source: MoSPI For December 2023, the Quick Estimates of Index of Industrial Production (IIP) with base 2011- 12 stands at 151.5. The Manufacturing sector's Index of Industrial Production for the same month is 150.6. The December 2023 Quick Estimates for IIP, alongside the first revision for November 2023 and the final revision for September 2023, have been compiled using updated data from source agencies. These revisions were conducted with response rates of 93%, 94%, and 95%, respectively. In November 2023, the Quick Estimates indicate the Index of Industrial Production (IIP) for the Manufacturing sector, based on 2011-12, as 139.2. Regarding October 2023, the Quick Estimate for the Index of Industrial Production (IIP) pertaining to the Manufacturing sector, with a base of 2011-12, is 141.8. YoY Growth (%) of Manufacturing Sector Source: PIB Amicus Growth Advisor | Quarterly Manufacturing Report 11

  12. India's FDI Landscape Surging Inflows and Global Appeal India, today is a part of the top 100 clubs on Ease of Doing Business (EoDB). FDI inflows in India stood at $45.15 Bn in 2014-15 and have consistently increased since then. India's attractiveness for FDI has surged due to recent advancements. It rose to 40th in the World Competitive Index 2023 and climbed from 81st in 2015 to 40th in the Global Innovation Index 2023, enhancing its appeal for FDI. During the Q3 FY24 (October to December 2023), the Foreign Direct Investment (FDI) Equity inflow amounted to US$ 96.154 billion. The cumulative amount of FDI equity inflow from April 2000 to December 2023 stands at US$ 666.477 billion. FDI inflow in India stood at US$ 36 billion in 2013-14 and registered its highest ever annual FDI inflow of US$ 85 billion in the financial year 2021-22. During FY 2022-23, FDI inflow of US$ 71 billion (provisional figure) has been reported. The FDI inflow from April 2023 to December 2023 amounted to US$ 32.037 billion, compared to US$ 36.746 billion during the same period in the previous year. This reflects a decrease of approximately 12.81% in FDI inflow from 2022-23 to 2023-24. Total FDI Equity inflow in India (Apr2000 - Dec2023) (US$ Bn) *Upto Dec 2023 Source: DPIIT & PIB In the last 9 financial years (2014-23), FDI inflows surged to US$ 596 billion, doubling the previous 9-year period's total of US$ 298 billion. This amount represents nearly 65% of the total FDI reported in the last 23 years (US$ 920 billion). In the manufacturing sector, FDI equity inflows during the same period (2014-23) reached US$ 149 billion, a 55% increase compared to the preceding nine years (2005-14: US$ 96 billion). These trends affirm India's status as a preferred global investment destination. These investments have originated from more than 101 countries and have been directed across 31 Union Territories and States, spanning 57 sectors within the country. Amicus Growth Advisor | Quarterly Manufacturing Report 12

  13. Insights into the PLI Scheme Elevating India's Manufacturing India's 'Atmanirbhar' vision drives the Production Linked Incentive (PLI) Schemes, with a budget of Rs. 1.97 lakh crore (over US$26 billion) to elevate growth in the next five years, vetted by NITI Aayog and relevant ministries. This initiative aims to enhance domestic manufacturing, boost import substitution, and create jobs. Initially targeting mobile, electrical components, and medical devices, it expanded to encompass 14 sectors. Under the scheme, both domestic and foreign companies receive financial incentives based on a percentage of their revenue over up to five years for manufacturing in India. PLI & MSME: The PLI scheme will impact the MSME ecosystem, with anchor units in each sector establishing new supplier bases. Among 733 selected applications, 176 MSMEs benefit across sectors like Bulk Drugs, Medical Devices, Pharma, Telecom, and more. PLI Schemes witnessed over Rs. 1.03 lakh crore of investment till November 2023, which has led to production/ sales of Rs. 8.61 lakh crore and employment generation (direct & indirect) of over 6.78 lakhs. PLI Schemes have witnessed exports surpassing Rs. 3.20 lakh crore Driving Sectoral Growth and Global Competitiveness: The PLI Scheme catalyzed significant achievements across sectors, fostering global competitiveness. Localization in electronics surged, and PLI beneficiaries dominated mobile exports. In Pharma, raw material imports dropped, and unique intermediates like Penicillin-G are now produced locally. The telecom sector achieved 60% import substitution, and Food Processing under PLI raised Indian raw material sourcing, benefiting farmers. The scheme's impact on sectors like Medical Devices, Drones, and Food Processing highlights its role in enhancing efficiency, scaling economies, boosting exports, and integrating India into the global value chain. Budget Increase for PLI: The Government of India has hiked allocation towards its flagship Production-Linked Incentive (PLI) scheme for financial year 2025 to Rs 6,200 crore, up 33 percent from FY24's budgeted estimate of Rs 4,645 crore. Sectors Covered under the PLI Scheme Textile Mobile Critical Key Starting Materials/Drug Intermediaries High- efficiency solar PV modules Products: MMF segment and technical textiles Manufacturing of Medical Devices Automobiles and Auto Components Manufacturing and Specified Electronic Components Pharmaceuticals Drugs Drones and Drone Compone nts Telecom & Networking Products Electronic/Te chnology Products White Goods (ACs and LEDs) Advanced Chemistry Cell (ACC) Battery Specialty Steel Food Products Amicus Growth Advisor | Quarterly Manufacturing Report 13

  14. Valve Industry Performance

  15. Sector Relative Valuation *Calculated using Screener.in The Indian valve manufacturing industry presents a diverse landscape of valuation metrics among key players. Triton Valve have no PE ratio, indicating negative earnings. Hawa Engineers exhibits notably high PE ratios, indicative of heightened investor expectations for future growth. Conversely, Companies like Atam Valves and Chemtech Indust. exhibit relatively favorable valuation of PE Ratio, potentially presenting attractive investment opportunities. The characterized commanding premium valuations and more mature players trading at relatively lower multiples. valve manufacturing by a sector of high-growth appears to be mix companies Amicus Growth Advisor | Quarterly Manufacturing Report 15

  16. Q3 Performance of Valve Manufacturing Companies Quaterly Revenue ( in Rs. Crore) Q3 FY24Q2 FY24Q3 FY23 QoQ(%) YoY(%) 115.1 102.6 89.5 12.2% 28.6% Triton Valves 35.0  27.8 25.0  25.8% 40.1% Hawa Engineers 12.2 12.8 11.0  -4.5% 11.1% Atam Valves 10.8 4.6 3.7 134.3% 190.6% Chemtech Industrial Triton Valves reported substantial revenue growth, with a 12.2% QoQ rise and a noteworthy 28.6% YoY increase, highlighting successful market penetration or product innovation strategies. Hawa Engineers demonstrated solid revenue expansion, with a 25.8% QoQ increase and a commendable 40.1% YoY growth. Atam Valves exhibited moderate revenue growth, with a slight decrease of 4.5% QoQ but a healthy 11.1% increase YoY, indicating stable performance in a competitive market. Chemtech Industries showed exceptional growth, with revenue surging by 134.3% QoQ and an impressive 190.6% YoY, signaling strong market demand or potential expansion strategies. Overall, the sector witnessed robust growth, with total revenue for the specified companies increasing by 17.1% QoQ and a significant 34.0% YoY, indicating positive industry trends and opportunities for investment or strategic partnerships. Amicus Growth Advisor | Quarterly Manufacturing Report 16

  17. Nifty 50 Triton Valves CMP= 2951 I EPS= -5.8 I 3M Return(Q3FY24)= -6.67% 300+ direct employees and 3 manufacturing plants, achieved 363 crore revenue in FY23 Established in 1975, the company's Mysore, India factory manufactures tyre valves, valve cores, TPMS valves, and hoses for CTIS, meeting ISO-certified quality standards. Supply chain and manufacturing efficiencies drove EBITDA and EBIT delivery despite increased utility costs and minimal finance cost rise. Quaterly Snapshot ( in Rs. Crore) Q3 FY24 Q2 FY24 Q3 FY23 QoQ (%) YoY (%) 12.2% 28.6%  115.1   102.6   89.5  Total Revenue -1.8% 40.2%   32.1   32.7   22.9  Operating Profit 28% 32% 26% Margin (%)   7.6   8.0   0.8  EBITDA -4.0% 830.5% 6.6% 7.8% 0.9% Margin (%)   3.3   3.5   3.1  Finance Cost   3.3   3.4   3.2  Depreciation   0.4   0.5   -0.7  Tax   0.7   0.6   -4.8  PAT 11.3% -114.5% 0.6% 0.6% -5.3% Margin (%) 6.63 5.96 -45.67 EPS 11.2% -114.5% Here is an analysis of Triton Valves Performance in Third Quarter: Financial Performance: The company demonstrated solid revenue growth, with total revenue increasing by 12.2% QoQ and a notable 28.6% YoY. EBITDA margin decreased by 4.0% QoQ but surged impressively by 830.5% YoY Profit after tax (PAT) and earnings per share (EPS) rebounded positively, increasing by 11.3% QoQ, although remaining negative compared to the same period last year, with a decline of 114.5% YoY Challenges & Opportunities: Challenge in scaling up climate control business due to industry conservatism Challenges in automotive business EBITDA due to accounting treatment of metal scrap sales Industry trends and opportunities in automotive, metals, and climate control sectors Future growth opportunities enabled by changes like GST implementation Future Plans: Expansion plans for high-speed testing capabilities in the automotive segment Engaging with global giants for high-speed application components Focus on building a portfolio of products with higher margins through the product pyramid strategy Amicus Growth Advisor | Quarterly Manufacturing Report 17

  18. Nifty 50 Hawa Engineers CMP= 152 I EPS= 4.7 I 3M Return(Q3FY24)= 26.80% Hawa Engineers Ltd., incorporated in the year 1993 is a company operating in Irrigation & Allied Services sector. Aspires to become the trusted trading partner and leading materials provider in India, surpassing expectations with exceptional service. Approved by leading project consultants and prestigious inspection authorities like EIL, MECON, and more. Experienced engineering team utilizes cutting-edge tech to ensure superior quality and reliable product performance. Quaterly Snapshot ( in Rs. Crore) Q3 FY24 Q2 FY24 Q3 FY23 QoQ (%) YoY (%) 25.8% 40.1%  35.0   27.8   25.0  Total Revenue 0.0% -7.7%  3.6   3.6   3.9  Operating Profit 10% 13% 16% Margin (%)  2.1   1.1   1.1  EBITDA 88.4% 93.6% 6.0% 4.0% 4.4% Margin (%)  0.8   0.7   0.7  Finance Cost  0.2   0.2   0.2  Depreciation  -     -     -    Tax  1.1   0.3   0.2  PAT 356.0% 533.3% 3.3% 0.9% 0.7% Margin (%) 3.23 0.71 0.51 EPS 354.9% 533.3% Here is an analysis of Hawa Engineers Performance in Third Quarter: Financial Performance: The company achieved robust revenue growth, with total revenue increasing by 25.8% QoQ and an impressive 40.1% YoY. EBITDA margin expanded significantly by 88.4% QoQ and 93.6% YoY, reflecting improved operational efficiency and cost management. Profit after tax (PAT) and earnings per share (EPS) saw substantial growth, surging by 356.0% and 354.9% QoQ respectively, and an outstanding 533.3% YoY Operating profit remained stable compared to the previous quarter but declined by 7.7% YoY Amicus Growth Advisor | Quarterly Manufacturing Report 18

  19. Nifty 50 Atam Valves CMP= 167 I EPS= 6.11 I 3M Return(Q3FY24)= 20.07% Manufacturing valves for diverse sectors; expanding to produce large-size valves; team of 500 professionals. The company aims to expand globally, with a focus on North America and Saudi Arabia. Atam Valves Limited targets INR 1,000 crores revenue by 2030, with varying growth rates. Significant revenue and margin increases expected in FY25-26. Quaterly Snapshot ( in Rs. Crore) Q3 FY24 Q2 FY24 Q3 FY23 QoQ (%) YoY (%)  11.0    12.2    12.8  -4.5% 11.1% Total Revenue  5.7    5.7    5.4  5.6% 0.0% Operating Profit 52% 47% 42% Margin (%)  3.0    1.9    2.4  EBITDA -19.7% -35.5% 27.0% 15.7% 18.7% Margin (%)  0.1    0.3    0.4  Finance Cost  0.2    0.2    0.2  Depreciation  0.7    0.5    0.5  Tax  2.0    1.0    1.3  PAT -25.0% -51.0% 18.4% 8.1% 10.3% Margin (%) 1.92 0.94 1.25 EPS -24.8% -51.0% Here is an analysis of Atam Valve’s Performance in Third Quarter: Financial Performance: The company experienced a decline in total revenue by 4.5% QoQ. EBITDA margin witnessed a significant decrease of 19.7% QoQ and 35.5% YoY, indicating reduced profitability and efficiency in earnings before interest, taxes, depreciation, and amortization. Profit after tax (PAT) and earnings per share (EPS) saw substantial declines of 25.0% and 24.8% QoQ respectively Market Expansion: Actively pursuing opportunities in the US market through strategic partnerships and approvals for manufacturers. Expanding its reach, it aims to strengthen its presence in India and target markets such as the United Arab Emirates, Saudi Arabia, Tanzania, Kenya, Russia, and Canada. Partnered with a Canadian brand, awaiting API certification; challenges include market fluctuations. Integration Forward and Capital Expenditure: Atam Valves is expanding into bathware products under the Daley brand. Their expansion initiative entails a capital expenditure plan of around INR 30 crores. Amicus Growth Advisor | Quarterly Manufacturing Report 19

  20. Nifty 50 Chemtech CMP= 118 I EPS= 4.7 I 3M Return(Q3FY24)= -8.10% Founded on January 15, 1997, Chemtech Industrial Valves produces world-class industrial valves and trades project-related items. At Kudus Palghar, the company boasts a world-class manufacturing facility supporting 24x7 operations. The unit is fully equipped with conventional and state-of-the-art manufacturing, testing, and inspection facilities. Receives direct orders from industrial giants like HPCL, LPSC, IOCL, ONGC, BARC, BHEL, SAIL, NTPC, Tata Steel. Quaterly Snapshot ( in Rs. Crore) Q3 FY24 Q2 FY24 Q3 FY23 QoQ (%) YoY (%)  10.8  190.6%   4.6    3.7  134.3% Total Revenue  3.6  2.9%   2.9    3.5  24.1% Operating Profit 33% 63% 94% Margin (%)  1.6    0.9    0.2  EBITDA 64.9% 868.8% 14.4% 20.4% 4.3% Margin (%)  0.3    0.2    0.3  Finance Cost  0.2    0.2    0.2  Depreciation  -0.0    -0.1   -0.4  Tax  1.1    0.6    0.0  PAT 98.2% 10800.0% 10.1% 12.0% 0.3% Margin (%) 0.95 0.48 0.01 EPS 97.9% 9400.0% Here is an analysis of Chemtech’s Performance in Third Quarter: Financial Performance: The company achieved a remarkable growth in total revenue, with a staggering increase of 134.3% QoQ and 190.6% YoY EBITDA margin improved substantially by 64.9% QoQ and an impressive 868.8% YoY, reflecting enhanced operational efficiency and profitability. Profit after tax (PAT) and earnings per share (EPS) experienced exponential growth of 98.2% and 97.9% QoQ respectively, and a staggering 10800.0% YoY Operating profit margin decreased from the previous quarter but remained stable compared to the same period last year, indicating consistent operational performance despite revenue fluctuations. Amicus Growth Advisor | Quarterly Manufacturing Report 20

  21. EPC Sector Performance

  22. Driving Growth The Role and Projections of the EPC Sector in India and Worldwide EPC companies in India are pivotal in driving diverse infrastructure advancements across various sectors. They contribute significantly to the development of Smart Cities and Renewable Energy initiatives, fostering economic growth and sustainability. Furthermore, their global expansion efforts enhance India's competitiveness on the global stage. By implementing robust risk management strategies, including due diligence and leveraging technological solutions, EPC firms ensure project success and stability, reinforcing their crucial role in India's infrastructure landscape. Global EPC Market Size and Growth Projections (2023-2032) The worldwide engineering, procurement, and construction (EPC) market achieved a value of around US$ 8.50 trillion in 2023. It is projected to expand at a compound annual growth rate (CAGR) of 3.20% from 2024 to 2032, reaching approximately US$ 11.22 trillion by 2032. 11.22 CAGR 3.20% 8.5 In the Indian context, specifically for the power EPC market size was estimated at US$ 13.8 billion in 2022. Projections indicate robust growth, with a forecasted CAGR of 21.94% from 2023 to 2029, culminating in a market value of US$ 45.36 billion by 2029. 2032 2023 Moreover, the expansion of renewable energy projects, particularly in solar and wind power, reflects India's dedication to curbing carbon emissions. These endeavors not only promise to generate employment opportunities but also appeal to foreign investors seeking involvement in the sector. In 2024, India's construction and infrastructure sector shows promise despite the challenges of an election year. The government's unwavering commitment to infrastructure development, evidenced by initiatives such as Bharatmala Pariyojana, Sagarmala, Smart Cities Mission, and Jal Jeewan Mission, aims to enhance connectivity and foster sustainable growth. Notable progress is anticipated in the development of highways, railways, airports, and ports, with a sustained focus on affordable housing initiatives like Pradhan Mantri Awas Yojana expected to bolster growth within the construction sector. Amicus Growth Advisor | Quarterly Manufacturing Report 22

  23. India's Capex Dynamics Central, State, and Private Sector Perspectives on Fiscal Growth In capital increasing from 12.1% to 22.2% of total spending from FY21 to the FY24 budget estimate. Central capital expenditure grew by 48.1% YoY in April-August FY24, reaching 37.3% of the budgeted Rs 10 trillion, up from 34.6% in FY23. India Inc.'s investment exhibited a notable recovery in FY23, surpassing pre-pandemic levels for the first time. However, project announcements indicate a moderation in capex during H1 FY24. recent years, central has government-led stayed Center’s Capex 25% 12 expenditure robust, 10 20% 8 Rs. Trillion 15% 6 10% 4 5% 2 0% 0 FY20 FY22 FY16 FY19 FY18 FY21 FY17 FY24 (BE) FY23 (RE) FY13 FY14 FY15 Centre’s Capex (Rs. Trillion) Capex (% of Total Expenditure), RHS CMIE data for H1 FY24 shows a sharp decline in new project announcements, dropping to Rs 1.2 trillion in Q2 FY24 from Rs 6.6 trillion in Q1 FY24. Dropped projects rose from Rs 3 trillion in Q4 FY23 to Rs 4 trillion in Q2 FY24. This led to net new projects turning negative, a first since March 2021. surpassed the government announcements but lagged in completed and under-implementation projects. The services sector, led by transportation dominated in new announcements, completed, and under- implementation projects. Investments by Ownership H1 FY24 The private sector new in services, Road Ahead: After tripling capital expenditure over the past four years, the upcoming year will see an 11.1% increase to eleven lakh, eleven thousand, one hundred and eleven crore rupees (Rs 11,11,111 crore), amounting to 3.4% of GDP. This increase in infrastructure spending, though lower than previous years, highlights the need for private sector involvement to sustain growth momentum. Amicus Growth Advisor | Quarterly Manufacturing Report 23

  24. Sector Relative Valuation *Calculated using Screener.in The Indian EPC Sector presents a diverse landscape of valuation metrics among key players. Reliance Infra have no PE ratio, indicating negative earnings. Kalpataru Projects & Hindustan Construction exhibits notably high PE ratios, indicative of heightened investor expectations for future growth. KEC International exhibits notably high PE ratios, indicative of heightened investor expectations for future growth. Conversely, NCC exhibit relatively favorable valuations across all three metrics, potentially presenting attractive investment opportunities. The valve manufacturing sector appears to be characterized by a mix of high-growth companies commanding premium valuations and more mature players trading at relatively lower multiples. Amicus Growth Advisor | Quarterly Manufacturing Report 24

  25. Q3 Performance of EPC Companies Quaterly Revenue ( in Rs. Crore) Q3 FY24 Q2 FY24Q3 FY23 QoQ(%) YoY(%) 5289.2  4747.8  3965.1  11.4% 33.4% NCC Ltd 5062.1  7373.5  4784.3  -31.3% 5.8% Reliance Infra 5032.7  4514.9  4376.3  11.5% 15.0% KEC International 4910.0  4530.0  4006.0  8.4% 22.6% Kalpataru Projects 1673.9  1867.2  1431.3  -10.3% 16.9% Hindustan Construction NCC Ltd, KEC International, and Kalpataru Projects demonstrated strong revenue growth, showcasing their resilience amidst market challenges, with double-digit percentage increases both QoQ and YoY. Reliance Infra experienced a significant decline in revenue by 31.3% QoQ, attributed to specific challenges impacting its operations, despite showing modest YoY growth. Hindustan Construction faced a temporary setback with a QoQ decline in revenue, yet still maintained a positive YoY growth of 18.3%. The overall industry saw a slight decrease in total revenue QoQ but a healthy 18.3% increase YoY, highlighting underlying strength and long- term growth prospects in the infrastructure sector. Amicus Growth Advisor | Quarterly Manufacturing Report 25

  26. Nifty 50 NCC CMP= 258 I EPS= 10.6 I 3M Return(Q3FY24)= 13.44% Pan-India EPC construction firm with in-house design capabilities; ranks second by revenue, boasting a diversified order book worth Rs. 57,440 Cr. The order book (9M)stands at Rs. 50,154 crore, marking a significant 26% year-on-year increase. The PEI Center of Excellence guides projects from bidding to completion with a seasoned team of over 80 professionals. Quaterly Snapshot ( in Rs. Crore) Q3 FY24 Q2 FY24 Q3 FY23 QoQ (%) YoY (%) 11.4% 33.4%  5,289.2   4,747.8   3,965.1  Total Revenue 39.9% 16.5%  794.0   567.4   681.7  Operating Profit 15% 12% 17% Margin (%)  534.5   332.0   431.9  EBITDA 61.0% 23.8% 10.1% 7.0% 10.9% Margin (%)  155.9   153.5   138.2  Finance Cost  53.5   53.2   51.6  Depreciation  94.2   38.8   73.8  Tax  231.0   86.5   168.3  PAT 167.0% 37.2% 4.4% 1.8% 4.2% Margin (%) 3.51 1.23 2.51 EPS 185.4% 39.8% Here is an analysis of NCC’s Performance in Third Quarter: Financial Performance: The company exhibited strong revenue growth, with total revenue increasing by 11.4% QoQ and an impressive 33.4% YoY. EBITDA margin expanded significantly by 61.0% QoQ and 23.8% YoY. Profit after tax (PAT) and earnings per share (EPS) surged remarkably, increasing by 167.0% and 185.4% QoQ respectively, and a notable 37.2% YoY. Strategic Initiatives: Equity investment in smart meter SPVs estimated at INR100-150 crores with a premium of INR8-10 per share Actively participating in water projects, including desalination projects Working on tying up for supply of meters for smart metering projects Growth Strategy: Core focus: EPC projects, diversification into sectors like High-Speed Rail, Defense. Embrace digitization, enhance ERP. Center of Excellence for planning, design, engineering, and succession planning. Debt reduction target below in Rs. 1,000 crores in FY25 Amicus Growth Advisor | Quarterly Manufacturing Report 26

  27. Nifty 50 Reliance Infra CMP= 220 I EPS= -114.0 I 3M Return(Q3FY24)= 20.33% Reliance Infrastructure Ltd is fully integrated in electricity generation, transmission, distribution, and power plant construction as EPC partners. Company excels in infrastructure development and operations, prominently in roads, metro rails, airports, and defense sectors. Company invests in infrastructure, EPC projects, M&A, and offers integrated solutions in its portfolio. Strive for global best practices, world-class infrastructure, customer trust, and community development. Quaterly Snapshot ( in Rs. Crore) Q3 FY24 Q2 FY24 Q3 FY23 QoQ (%) YoY (%) -31.3% 5.8%  5,062.1   7,373.5   4,784.3  Total Revenue -16.1% 2.8%  2,051.4   2,445.7   1,994.8  Operating Profit 41% 33% 42% Margin (%)  949.6   878.7   967.8  EBITDA 8.1% -1.9% 18.8% 11.9% 20.2% Margin (%)  577.6   610.0   656.7  Finance Cost  378.5   387.0   367.7  Depreciation  294.4   63.8   70.7  Tax  -301.0   -182.1   -127.3  PAT 65.3% 136.5% -5.9% -2.5% -2.7% Margin (%) -10.63 -7.42 -9.31 EPS 43.3% 14.2% Here is an analysis of Company’s Performance in Third Quarter: Financial Performance: The company experienced a significant decrease in total revenue by 31.3% QoQ, while still showing a modest 5.8% increase compared to the same period last year. Operating profit margin declined to 41% from 33% in the previous quarter, although remaining relatively stable compared to the same period last year at 42%. EBITDA margin improved by 8.1% QoQ but declined by 1.9% YoY, indicating some improvement in operational efficiency but challenges in maintaining profitability compared to the previous year. Despite the increase in profit after tax (PAT) by 65.3% QoQ, the company reported negative figures, reflecting exceptional circumstances impacting the financials. However, the positive trend in earnings per share (EPS) by 43.3% QoQ indicates a potential recovery path. Amicus Growth Advisor | Quarterly Manufacturing Report 27

  28. Nifty 50 KEC CMP= 708 I EPS= 10.4 I 3M Return(Q3FY24)= -13.08% 7+ decades experience, 110+ country footprint, 300+ ongoing projects, $2.1B global EPC major, 7500+ employees, 8 facilities, 35+ nationalities represented. Government's infrastructure focus persists, driving GCC capex momentum. Private capex rises, notably in Real Estate. T&D and Civil sectors drive growth. Record Order Book + L1 of over Rs. 38,000 crore (9M) Quaterly Snapshot ( in Rs. Crore) Q3 FY24 Q2 FY24 Q3 FY23 QoQ (%) YoY (%) 11.5% 15.0%  5,032.7   4,514.9   4,376.3  Total Revenue 0.0% 23.1%  1,060.3   1,060.8   861.1  Operating Profit 21% 23% 20% Margin (%)  333.9   290.1   201.6  EBITDA 15.1% 65.6% 6.6% 6.4% 4.6% Margin (%)  164.4   177.8   149.3  Finance Cost  48.8   46.5   40.8  Depreciation  23.9   9.9   -6.2  Tax  96.9   55.8   17.6  PAT 73.5% 450.4% 1.9% 1.2% 0.4% Margin (%) 3.77 2.17 0.68 EPS 73.7% 454.4% Here is an analysis of KEC’s Performance in Third Quarter: Financial Performance: The company achieved solid revenue growth, with total revenue increasing by 11.5% QoQ and a respectable 15.0% YoY. EBITDAmargin increased by 15.1% QoQ and a significant 65.6% YoY Profit after tax (PAT) and earnings per share (EPS) witnessed substantial growth, surging by 73.5% and 73.7% QoQ respectively, and a remarkable 450.4% YoY. New Products and Capacity Expansion: Expansion of power manufacturing capacity in Dubai facility by 20% Secured largest tower supply order from the United States of America Decision to expand product portfolio at Vadodara cable plant for aluminum conductors Developed two new products - EV charging cables and green cables Future Outlook: Positive outlook for all business segments with a strong tender pipeline and order book Expectation of significant improvement in margins in Q4 with a reduction in interest costs Anticipated challenges in meeting margin guidance due to supply chain constraints and railway EPC order disruptions. Expectations of maintaining overall guidance on revenue of Rs.20000 Crores Amicus Growth Advisor | Quarterly Manufacturing Report 28

  29. Nifty 50 Kalpa-Taru CMP= 1050 I EPS= 30.8 I 3M Return(Q3FY24)= 9.12% With 40+ years' experience across 73 countries, executed orders worth USD 14+ billion, maintaining a USD 6.2 billion order book and AA/CRISIL credit rating. Double-digit revenue and PAT growth fueled by robust execution. Comfortable debt and working capital levels. Order book at Rs. 51,753 Crores covers FY25 revenue target; secured Rs. 18,065 Crores in FY24. Emphasis on sustainable margin projects, diversified sectors. Quaterly Snapshot ( in Rs. Crore) Q3 FY24 Q2 FY24 Q3 FY23 QoQ (%) YoY (%) 8.4% 22.6%  4,910.0   4,530.0   4,006.0  Total Revenue 9.1% 16.5%  1,195.0   1,095.0   1,026.0  Operating Profit 24.3% 24.2% 25.6% Margin (%)  438.0   382.0   376.0  EBITDA 14.7% 16.5% 8.9% 8.4% 9.4% Margin (%)  124.0   137.0   119.0  Finance Cost  121.0   113.0   98.0  Depreciation  49.0   42.0   50.0  Tax  144.0   90.0   109.0  PAT 60.0% 32.1% 2.9% 2.0% 2.7% Margin (%) 8.68 5.48 7.92 EPS 58.4% 9.6% Here is an analysis of Kalpa-Taru’s Performance in Third Quarter: Financial Performance: The company experienced steady revenue growth, with total revenue increasing by 8.4% QoQ and a commendable 22.6% YoY. EBITDA margin expanded by 14.7% QoQ and a notable 16.5% YoY. Profit after tax (PAT) saw significant growth, surging by 60.0% QoQ and 32.1% YoY, indicating improved bottom-line performance and shareholder value creation. EPS also showed a healthy increase of 58.4% QoQ and 9.6% YoY, reflecting positively on earnings per share. Strategic Initiatives: Selective bidding for high-quality backlog amid infrastructure spending rise. Prioritize cash flow, ROCE via working capital optimization, efficiency, asset monetization. Firm sustainability commitments: Water Neutrality by 2032, Circular Economy by 2035, Carbon Neutrality by 2040. Sustainability Goals: By 2032, aim for water neutrality through innovation and community involvement. By 2035, company’s aim is a circular construction waste economy, emphasizing reuse, recycling, and resource conservation. Dedicated to combating climate change, aiming for carbon neutrality in Scope 1 & 2 emissions by 2040. Amicus Growth Advisor | Quarterly Manufacturing Report 29

  30. Nifty 50 HCC CMP= 39 I EPS= 2.8 I 3M Return(Q3FY24)= 23.52% 4036 lane km of highways, 395 km of tunneling, 60% of India's nuclear power capacity, and 26% of its hydro power capacity. Provisional completion certificate received for Sawalkot Tunnel Project in J&K; Final milestone achieved for Nikachhu Hydro Power project in Bhutan. HCC bids Rs. 6,900 crore projects under evaluation. Anticipates Rs. 14,000 crore submissions next quarter, with Rs. 46,440 crore pipeline identified. Quaterly Snapshot ( in Rs. Crore) Q3 FY24 Q2 FY24 Q3 FY23 QoQ (%) YoY (%) -10.3% 16.9%  1,673.9   1,867.2   1,431.3  Total Revenue 19.3% 201.3%  696.8   584.3   231.3  Operating Profit 42% 31.3% 16.2% Margin (%)  438.2   288.4   -70.6  EBITDA 51.9% -720.5% 26.2% 15.4% -4.9% Margin (%)  146.3   256.1   235.6  Finance Cost  30.4   27.8   32.0  Depreciation  79.2   7.4   -80.4  Tax  182.3   -2.8   -257.9  PAT -6610.7% -170.7% 10.9% -0.1% -18.0% Margin (%) 1.2 -0.02 -1.7 EPS -6100.0% -170.6% Here is an analysis of HCC’s Performance in Third Quarter: Financial Performance: The company witnessed a decline in total revenue by 10.3% QoQ but showed a positive growth trend of 16.9% YoY. EBITDA margin improved substantially, reaching 26.2%, compared to 15.4% in the previous quarter Strategic Diversification: Order book at the end of Q3 FY24 was around Rs. 11,000 crores, with a significant portion from the Transport sector. HCC focusing on sectors like Hydro power, Pump storage schemes, Railways, and Nuclear power due to India's net-zero targets and power generation commitments. Future Growth and Strategy: HCC aims to bid for projects in sectors like transportation, hydro power, railways, and nuclear power for growth. Selective participation in Vivaad se Vishwas scheme and special bank guarantees for court proceedings related to arbitration awards. Looking forward to steady improvements and growth in the future. Amicus Growth Advisor | Quarterly Manufacturing Report 30

  31. Disclaimer This report has been published solely for information purposes and does not constitute any offer, recommendation, or invitation to purchase or subscribe for any securities and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. This report has been prepared by Amicus Growth Advisors based on the information and data that Amicus considers reliable, but the organization makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on the truth, accuracy, completeness, fairness, and reasonableness of the contents of this report. This report may not be all-inclusive and may not contain all the information that you may consider material. Any liability in respect of the contents of, or any omission from, this report is expressly excluded. Amicus is not responsible for any errors or omissions in the report, or for any loss or damage that may arise from the use of this report or any of its contents. Users of this report should conduct their own research and analysis before making any investment decisions.

  32. Your Business Think Tank THANK YOU Do You have Any Questions? business@amicusllp.com +91 9820075360 www.amicusllp.com Amicus Growth Advisor | Quarterly Manufacturing Report 32

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