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Tembo Global Industries Ltd

| Annual Report for the Financial Year 2024-25

BULLISH SENTIMENT

Report Source

⬤8th Dec 25

Summary : Tembo Global Industries Limited achieved significant revenue and PAT growth in FY25, driven by strategic diversification into defense and solar power, and is expanding manufacturing capacity, despite facing raw material volatility and market competition.

Annual Report Analysis & Insights

Financial Disclosures

  1. Standalone FY25: Cost of materials consumed ₹16,824.28 Lakhs, Total expenses ₹60,209.00 Lakhs.
  2. Consolidated FY25: Cost of materials consumed ₹16,824.28 Lakhs, Total Expenses ₹67,074.00 Lakhs.
  3. Standalone FY25: Undisputed Trade receivables - considered good: Less than 6 months ₹8,015.06 Lakhs, 6 months - 1 year ₹1,275.90 Lakhs, 1-2 years ₹318.92 Lakhs, 2-3 years ₹483.75 Lakhs.
  4. Consolidated FY25: Undisputed Trade receivables - considered good: Less than 6 months ₹2,403.58 Lakhs, 6 months - 1 year ₹167.18 Lakhs, 1-2 years ₹506.13 Lakhs.
  5. Standalone FY25: Revenue from operations (Net) ₹65,501.85 Lakhs, Other income ₹379.89 Lakhs, Total revenue ₹65,881.74 Lakhs.
  6. Consolidated FY25: Revenue from operations ₹74,364.69 Lakhs, Other income ₹270.70 Lakhs, Total Income ₹74,635.40 Lakhs.
  7. Standalone FY25: Net cash generated from operating activities (₹9,924.42) Lakhs, Net cash (used in) investing activities (₹16,734.05) Lakhs, Net cash from financing activities ₹26,770.19 Lakhs.
  8. Consolidated FY25: Net cash generated from operating activities (₹7,743.07) Lakhs, Net cash (used in) investing activities (₹20,711.30) Lakhs, Net cash from financing activities ₹28,653.68 Lakhs.
  9. Letter Of Credit: ₹155.22 Lakhs (FY25), ₹154.64 Lakhs (FY24).
  10. Bank Guarantee for Supply: ₹1,369.34 Lakhs (FY25), ₹23.93 Lakhs (FY24).
  11. Bank Guarantee for Group Company: ₹1,524.56 Lakhs (FY25), ₹797.36 Lakhs (FY24).
  12. Standalone FY25: Total Assets ₹50,159.88 Lakhs, Total Equity ₹20,119.18 Lakhs.
  13. Consolidated FY25: Total Assets ₹57,409.89 Lakhs, Total Equity ₹21,683.83 Lakhs.
  14. All related party transactions were at arm’s length and in the ordinary course of business.
  15. Details of related party transactions are disclosed in Note 39 of the financial statements.
  16. Both standalone and consolidated financial statements are provided.
  17. Standalone Profit After Tax (PAT) for FY25 was ₹4,074.55 Lakhs.
  18. Consolidated Profit After Tax (PAT) for FY25 was ₹5,096.49 Lakhs.

Corporate Overview

  1. Maintains a national and international footprint, with exports to USA and Middle East.
  2. Domestic operations contribute 80% of revenue, while exports contribute 20%.
  3. Challenging market conditions and dampened consumer sentiments.
  4. Heavy reliance on the engineering sector makes revenue vulnerable to market fluctuations.
  5. Limited geographic diversification exposes the company to Indian economic conditions.
  6. Reduced margins in the textiles segment (2.4% EBIT margin).
  7. Historically maintained relatively high debt levels, posing risks to financial stability.
  8. Heavy reliance on the engineering sector, making it vulnerable to market fluctuations.
  9. Limited geographic diversification, with most revenue from domestic sources.
  10. Textiles division operates with lower EBIT margins (2.4%) compared to other segments.
  11. Operates in manufacturing and fabrication of metal products, specializing in pipe support systems, fasteners, anchors, HVAC, and anti-vibration systems for industrial, commercial, and utility applications.
  12. Processes and supplies high-quality fibres and yarn through its Textiles Division.
  13. Expanded into the Defence sector in FY25, operating across multiple segments including engineering solutions, textiles, and defence products.
  14. Pleased with robust growth and resilience despite challenging market conditions.
  15. Enthusiastic about future prospects, focusing on sustainable growth and operational efficiency.
  16. Committed to quality, diversified product offerings, and continuous investments in capacity enhancement.
  17. Serves a robust customer base including prominent domestic and international clients.
  18. Engineering Products: 43% of FY25 revenue, specialized metal solutions for industrial applications.
  19. Textiles: 57% of FY25 revenue, processing and supply of high-quality fibres and yarn.
  20. Defence Products: Entering the defence sector from FY26 to meet growing demands.
  21. Solar Power: Commitment to sustainable energy solutions.
  22. Manufacturing facilities have a capacity of 15,000 MTPA, enhanced by forward and backward integration.
  23. Undertaking a capital expenditure initiative to expand capacity sixfold, aiming for 1,05,000 MTPA by H1 FY26.
  24. Scaling up production capacity and investing in advanced technology.
  25. Expanding capacity sixfold to 1,05,000 MTPA by H1 FY26 through capital expenditure.
  26. Establishing a dedicated defence products manufacturing unit in Maharashtra with INR 1,000 Crores investment over three years.
  27. Solar Power Project progressing towards financial closure and commissioning by end of FY26.

Risk Factors

  1. Raw material price volatility impacts profitability.
  2. Economic downturns affect demand in sectors.
  3. Regulatory changes pose operational challenges.
  4. Intense competition pressures profit margins.

Key Drivers

  1. Strong revenue and PAT growth in FY25.
  2. Sixfold capacity expansion by H1 FY26.
  3. Robust order book ensures future revenue.
  4. Diversifying into defense and solar power.

Auditor’s Report

  1. Unmodified opinion on standalone financial statements.
  2. Unmodified opinion on consolidated financial statements.
  3. Significant business expansion into solar energy and defense manufacturing through subsidiaries.
  4. Development of new manufacturing facility financed by debt and equity.
  5. Assessing consistency in growth and ability to meet commitments due to materiality.
  6. Provision for expected credit loss on Export receivables as per RBI requirements (Note 11).
  7. Conversion of loans extended to subsidiary into equity shares pending allotment (Note 13).
  8. Reclassification of commission income as other operating income (Note 26(i)).

Board Commentary

  1. Mr. Firdose Vandrevala appointed Additional Director (Non-Executive Non-Independent) on August 29, 2024.
  2. Mr. Ajay Madan, Mr. Sumantra Sarathi Mahata, Mr. Nikunj Hasmukhbhai Barot, and Mrs. Homai Ardeshir Daruwalla appointed Additional Independent Directors on April 09, 2025.
  3. Ms. Saloni Patel resigned as CFO on April 09, 2025.
  4. Mr. Girish Rameshlal Jethmalani appointed CFO on April 09, 2025, and resigned on June 11, 2025.
  5. Ms. Fatema S. Kachwala appointed CFO on July 15, 2025.
  6. Ms. Priya Dua appointed Company Secretary and Compliance Officer on August 01, 2025.
  7. Smita Jashbhai Patel, Karan Ishwar Shinde, Prakash Sanjay Karpe, Jehan Darayus Variava, and Jasbir Singh Jaswant Singh Anand resigned from Directorships on various dates in 2025.
  8. Directors have not recommended any dividend for FY2024-25 to conserve funds for long-term initiatives and sustainable growth.
  9. Interim dividend of Rs.1/- per equity share declared on July 12, 2024, and paid before August 11, 2024.
  10. Interim dividend of Rs.1/- (10%) per equity share declared for FY2024-25.
  11. Final dividend of Rs.1/- per equity share declared on August 29, 2024, and paid before October 29, 2024.
  12. A Dividend Distribution Policy has been approved and adopted, available on the company's website.
  13. Risk management policy in place covering identification, assessment, handling, monitoring, and reporting of risks.
  14. Board periodically reviews risks and suggests mitigation steps through a defined framework.
  15. No significant and material orders passed by regulators or courts during the period under review.
  16. NSE sought clarification on quick financial results submission (Oct 26, 2024) due to format discrepancies.
  17. NSE sought clarification on final dividend declaration (Aug 29, 2024).
  18. NSE sought clarification on lock-in shares of Promoter/Promoter Group and Non-Promoter.
  19. NSE sought clarification on a contract receipt that was subsequently withdrawn.
  20. Board decided to raise funds up to Rs. 500 Crores by issuing securities on July 15, 2025.
  21. Raised funds through issue of 8,10,000 Share Warrants to Promoter Investors on preferential basis.
  22. Allotted 19,79,000 Equity Shares on January 28, 2025.
  23. Issued 5,84,400 Equity Shares on March 26, 2025, pursuant to warrant conversion.
  24. Allotted 18,00,000 Equity Shares on preferential basis pursuant to warrant conversion.
  25. Approved increasing borrowing powers under Section 180(1)(c) up to Rs.350.00 crore.
  26. Approved increasing borrowing powers under Section 180(1)(a) up to Rs.350.00 crore.
  27. Approved increasing limit of investments, loans, guarantees, or securities under Section 186 up to Rs. ₹60 Crore.

Corporate Governance

  1. Adheres to highest standards of business ethics, statutory, and legal compliance.
  2. Code of Conduct for Board Members and Senior Management promotes ethical conduct.
  3. Whistle Blower Policy/Vigil Mechanism established for reporting unethical behavior or fraud.
  4. Policy against Sexual Harassment in place, with no complaints received in FY2024-25.
  5. Board comprises 4 Independent Directors, renowned professionals in their fields.
  6. Independent Directors are not related to promoters and possess integrity and expertise.
  7. All Independent Directors fulfill independence criteria as per Act and SEBI Listing Regulations.
  8. Duly constituted statutory committees: Audit, Nomination and Remuneration, Stakeholders' Relationship, Corporate Social Responsibility, Internal Complaints, and Sexual Harassment.
  9. Audit Committee comprises 4 Directors, with two-thirds being Independent Directors.
  10. Nomination and Remuneration Committee comprises 4 Independent Directors.
  11. NSE sought clarification on financial results submission format and dividend declaration.
  12. NSE sought clarification on lock-in shares of promoter and non-promoter groups.
  13. NSE sought clarification on a contract receipt that was subsequently withdrawn.

Management Discussion & Analysis

Future Strategy

  1. Strengthen digital landscape to connect with audiences, enhance brand equity, and drive sales in FY25.
  2. Expand reach beyond geographical boundaries and cater to new generation of consumers.
  3. Explore avenues for expansion, including scaling production capacity, investing in advanced technology, and global market exploration.
  4. Identify strategic partnerships and investment opportunities aligned with long-term vision.
  5. Continue to invest in and adopt best processes and methodologies for business and long-term strategy.
  6. Focus on training employees in latest appropriate technologies and leveraging new technologies.
  7. Continuous research to upgrade existing products and develop new products and services.
  8. Partnership with a European company to set up arms manufacturing unit in India.

Industry Overview

  1. Indian textiles and apparel market expected to grow at 10% CAGR, reaching US$ 350 billion by 2030.
  2. India is the third-largest exporter of textiles and apparel, with exports projected to hit US$ 100 billion.
  3. Indian defence manufacturing industry is expected to grow significantly due to national security concerns.
  4. Government aims for a defence manufacturing target of ₹3,00,000 crore (US$ 34.7 billion) by FY29.
  5. India's energy demand is projected to grow rapidly, with renewable energy playing a crucial role.
  6. Installed renewable power generation capacity grew at a CAGR of 19.02% between FY16 and FY25.

Macroeconomic Outlook

  1. Global economic growth remained stable but subdued in 2024, projected to continue into 2025.
  2. Downward adjustments influenced by new trade policies, disruptions, and diminished market confidence.
  3. Monetary policy needs to be proactive to tackle challenges like inflation and trade-offs.
  4. India's GDP is anticipated to grow by 6.5% in FY24-25, retaining its status as the fastest-growing major economy.
  5. World Bank predicts consistent growth of 6.7% for India in FY26 and FY27, surpassing global counterparts.

Operational Focus Areas

  1. Focus on sustainable growth, operational efficiency, and high corporate governance standards.
  2. Enhance manufacturing efficiency and competitiveness through advanced technologies and digital innovations.
  3. Emphasize job creation through expansion of domestic manufacturing units and industrial clusters.
  4. Upskill and reskill existing and new workforce entrants.
  5. Commitment to clean-tech manufacturing, supporting domestic production of renewable energy technologies.

Performance Drivers

  1. Achieved 49% revenue growth and 194% PAT growth in FY25 despite challenging market conditions.
  2. Enhanced credibility and customer trust through high-quality products.
  3. Robust distribution channels and new product lines led to an upsurge in export figures.
  4. Leveraging digital technologies to enhance brand equity and drive sales performance.
  5. Proactive market-sensing and upgraded technological infrastructure to address evolving consumer needs.
  6. Highest-ever revenue, EBITDA, and PAT achieved in FY24-25, with revenue growing 69.5% YoY.
  7. Strong order book of INR 1,525+ Crores and L1 orders exceeding INR 1,680 Crores provide revenue visibility.

Risk Control Measures

  1. Implemented a well-defined risk management mechanism covering identification, assessment, handling, monitoring, and reporting.
  2. Board periodically reviews risks and suggests steps for control and mitigation.
  3. Manages currency exposures within prescribed limits using derivative instruments like forward contracts.
  4. Finance department manages credit risk from banks and financial institutions through approved counterparties and credit limits.
  5. Marketing department has a credit policy for individual customer creditworthiness analysis and periodic review.
  6. Manages liquidity risk by maintaining adequate reserves, banking facilities, and continuously monitoring cash flows.

Critical Risks

  1. Volatility in raw material prices can significantly impact production costs and profit margins.
  2. Economic downturns in India or globally could adversely affect demand in critical sectors.
  3. Changes in environmental regulations, export-import policies, and safety standards may influence operations and profitability.
  4. Fierce competition from domestic and international firms could exert pressure on profit margins.
  5. Geopolitical uncertainties in export markets can affect trade policies, logistics, and market access.
  6. Company's performance is linked to economic cycles; a downturn could impact demand.
  7. Historically high debt levels could pose risks to financial stability during economic downturns.
  8. Regulatory changes in environmental, safety, and export-import policies may pose challenges.
Tembo Global Industries Ltd (TEMBO) Annual Report Analysis & Insights | Dhanarthi