The Company derives a major portion of its revenue from export sales, with significant concentration in the United States. Revenue from outside India stood at Rs.1,212.44 million, Rs.1,166.83 million and Rs.1,044.75 million in Fiscals 2026, 2025 and 2024 (95.39%, 96.27% and 94.56% of revenue from Sale of Products), while the United States alone accounted for 53.76%, 66.68% and 71.93% of export sales in the respective periods. Adverse developments in export markets, including tariff revisions or trade remedy actions, could materially affect the Company's business and financial condition.

The Company's revenue from operations is significantly concentrated among a limited number of customers, with its top 1, top 5 and top 10 customers contributing 20.92%, 48.91% and 60.86% respectively of revenue from Sale of Products in Fiscal 2026. Any reduction, delay or termination of orders by key customers, who are serviced on an order basis without long-term supply commitments, could materially and adversely affect the Company's business, financial condition and cash flows.

The Company's manufacturing operations are concentrated across three facilities in Madhya Pradesh - the Dewas, Pithampur and Sanwer Facilities. Any disruption, slowdown or shutdown at any of these facilities, whether due to natural disasters, accidents, labour unrest, power shortages or equipment failures, could materially and adversely affect production continuity and results of operations.

The Company's downstream operational activities, including machining, balancing, inspection and testing of propeller shafts, are undertaken through its Subsidiary, Adroit Driveshafts Private Limited (ADPL), at the Pithampur Facility. Sale of goods by the Company to ADPL represented 26.36%, 30.23% and 41.53% of consolidated revenue from operations in Fiscals 2026, 2025 and 2024, and any adverse development affecting ADPL could adversely affect the Company's consolidated performance.

The Company is significantly exposed to foreign currency exchange rate fluctuations, with revenue from outside India representing 95.39%, 96.27% and 94.56% of Sale of Products revenue in Fiscals 2026, 2025 and 2024, and does not have a hedging policy in place. In the absence of hedging arrangements, significant volatility in exchange rates may adversely affect revenue realisations, profitability, cash flows and financial condition.

The Company has experienced multiple instances of delays in statutory filings and regulatory non-compliances, including corporate and regulatory reporting delays extending up to 3,771 days, exposing it to potential regulatory action, penalties and reputational risk. The Company has also filed compounding and condonation applications with the RBI and RoC in relation to certain of these lapses, including matters concerning its subsidiary Adroit Driveshafts Canada Limited.

The Company and its Subsidiary ADPL have experienced negative cash flows from investing and financing activities on a consolidated and standalone basis in the past and may continue to do so, driven primarily by capital expenditure, inter-corporate loans and repayment of borrowings and finance costs. Continued or significant negative cash flows may adversely affect liquidity, working capital requirements and the ability to service debt or fund growth initiatives.

The Company has made investments and extended inter-corporate loans and advances to certain entities, with total exposure of Rs.315.56 million as at March 31, 2026, comprising non-current investments of Rs.214.93 million and inter-corporate loans and advances of Rs.100.63 million. Any delay in recovery, default, impairment or diminution in the value of such exposures may adversely affect liquidity, cash flows and financial condition.

The Company is subject to risks arising from interest rate fluctuations, with outstanding borrowings of Rs.689.76 million as of July 31, 2026, of which Rs.632.13 million was subject to variable interest rates. Any increase in interest rates may increase finance costs and adversely affect profitability, cash flows and financial condition.

There are outstanding legal proceedings involving the Company, its Subsidiary and its Promoters, with an aggregate quantifiable amount of Rs.19.95 million against the Company, Rs.25.77 million against its Subsidiary, and Rs.50.64 million against its Promoters as at the date of the RHP. Any adverse outcome in such proceedings may adversely affect the Company's reputation, business, results of operations, cash flows and financial condition.