Aditya Ultra Steel Ltd Management Discussions

Industry Structure and Developments:

TMT (Thermo-Mechanically Treated) bars are high-strength reinforcement steel widely used in construction for their strength, ductility and corrosion resistance. Manufactured through quenching, self-tempering and atmospheric cooling, they have a tough outer surface and ductile core, making them suitable for earthquake-resistant structures. They offer weldability and cost-effectiveness by reducing steel requirements and are used in building frameworks, infrastructure and reinforced concrete structures. Grades include Fe-415D, Fe-500D, Fe-550D and Fe-600D, generally in 6 50 mm sizes.

TMT Size	Product Feature
8 MM	Mainly used for rings attached/fitted in pillar and lintel structures, providing support during construction.
10 mm & 12 mm	Used in RCC roof slabs and recommended for heavy-load applications including columns, beams, slabs and cantilevers.
16 MM	Generally used for ground-floor-plus-one and higher structures to bear upper-floor loads.
20 mm, 25 mm & 32 mm	Used for stronger foundations; greater thickness provides grip to sustain upper-floor loads and is used in large projects.

Global Steel Industry:

During 2020 2025, global crude steel production fluctuated due to COVID-19, economic conditions and geopolitical uncertainties. Production rose 4.1% in 2021, declined 3.7% in 2022, remained broadly stable in 2023, marginally declined in 2024 and stood at approximately 1,850 million tonnes in 2025, down around 2.0% from 2024. Long-term demand remains supported by infrastructure, urbanization, industrialization and construction, particularly in emerging economies.

China remained the largest producer, producing approximately 960.8 million tonnes in 2025, about 52% of global output, despite weaker domestic demand, overcapacity and environmental pressures. Its scale and supply chains continue to influence global prices and trade flows.

India, the second-largest producer, produced approximately 164.9 million tonnes in 2025, up around 10.4% over 2024. Abundant iron ore, expanding capacity, the National Steel Policy, 2017, infrastructure spending and Make in India support continued growth in production and consumption.

Current Overview of Indian Steel Industry

Indias crude steel capacity increased from 154.1 million tonnes in FY2022 to 200.3 million tonnes in FY2025, while production increased from 120.3 million tonnes to 152.2 million tonnes. During April December FY2025 26, production was 124.6 million tonnes, approximately 11.5% higher than 111.8 million tonnes in the corresponding previous period. Capacity expansion and demand from infrastructure, construction, automobiles and other steel-intensive sectors are expected to support industry growth.

Industry Developments:

1. Union Budget 2026 27: The Budget continues to support domestic manufacturing, infrastructure and the steel value chain. The PLI Scheme for Specialty Steel remains an important measure for domestic production, investment and import substitution, with 380 crore allocated for FY2026 27. Continued infrastructure and capital expenditure is expected to support steel demand and strengthen domestic manufacturing, supply-chain resilience, capacity, technology and availability of value-added/specialty steel. The Government continues to promote domestic production and the broader objectives of Atmanirbhar Bharat, with policy measures aimed at strengthening domestic steel manufacturing capabilities, improving supply-chain resilience and encouraging investment in the iron and steel sector.

2. Railway Construction: The Ministry of Railways has received Gross Budgetary Support of approximately 2.93 lakh crore in Budget Estimate 2026 27 for capacity enhancement, track renewal, electrification, signalling, rolling stock, station redevelopment and related infrastructure. Railway bridges, stations, platforms, tunnels, elevated structures, dedicated freight corridors and high-speed rail can create substantial TMT demand, while related logistics parks, warehouses, industrial and residential development may generate additional demand.

3. Airport Infrastructure: In FY2024 25, Indian airports handled approximately 376.43 million passengers (306.79 million and 69.64 million international). Operational airports increased from 74 in 2014 to 164 in 2025. Continued airport expansion, modernization and regional connectivity initiatives such as UDAN are expected to support demand for terminals, runways, elevated structures, parking and other civil infrastructure, benefiting TMT demand.

4. Residential Real Estate: In 2025, the top seven cities recorded approximately 4,19,170 new residential launches, up 2% year-on-year, while sales were approximately 3,95,625 units, down 14% from 4,59,645 units in 2024. Despite lower volumes, housing sales value increased about 6% to over 6 lakh crore, supported by premium and luxury housing demand.

Opportunities and Threats Opportunities:

Infrastructure growth through roads, railways, bridges, housing, urban infrastructure, renewable energy and other capital projects; Urbanization and industrialization, with low per-capita steel consumption providing headroom for growth; National Steel Policy; Make in India and PLI initiatives supporting domestic manufacturing, capacity, technology and import substitution, including the second Specialty Steel PLI round launched in January 2025; Automotive, engineering, machinery, defense, railways and renewable energy growth creating demand for quality/value-added steel and opportunities for customer/product diversification; Green steel and technology through energy efficiency, renewable energy, green hydrogen, process optimization, automation, AI, digital monitoring, predictive maintenance and quality control; Export potential, subject to global prices, trade policies and demand; and Raw-material integration through iron ore, beneficiation, scrap processing and diversified coking-coal/import sources improving supply security and cost competitiveness.

Threats:

Volatility in iron ore, coking coal, scrap, power, natural gas and other input prices, with imported coking coal dependence remaining a structural risk; Environmental regulations and ESG/carbon pressures increasing compliance costs and requiring significant investment in greener technologies; Global overcapacity, aggressive exports, imports and changing tariffs/safeguards/trade restrictions creating price and margin pressure; Substitution by aluminium, composites and advanced polymers in selected applications; Logistics bottlenecks, transportation costs, congestion and port/multimodal inefficiencies affecting competitiveness; Economic cyclicality, interest rates and slowdowns in infrastructure, real estate or industry affecting demand, capacity utilization and profitability; and Geopolitical tensions, conflicts, sanctions, shipping disruptions and trade changes affecting raw materials, freight, energy, exports and profitability.

Segment-wise / Product-wise Performance

Segment reporting under Ind AS 108 is not applicable as the Company operates in only one segment.

Outlook

Aditya Ultra Steel Limited, incorporated on 27 July 2011, manufactures rolled steel products, primarily TMT bars, for construction and infrastructure sectors. TMT bars are manufactured from billets through reheating furnace and rolling mill processes and marketed on a B2B basis under the Kamdhenu brand, with the customer base primarily concentrated in Gujarat. The facility at Survey No. 48, Wankarner Boudry, Bhalgam, National Highway 8-A, Wankaner, Rajkot, Gujarat 363621 has supporting infrastructure including testing laboratory, workers accommodation, canteen and transport connectivity.

The Bhalgam facility benefits from power, water and road connectivity, facilitating raw-material procurement and distribution to dealers/ distributors across Gujarat. Growth is pursued through stronger existing-customer relationships, new customer acquisition and response to evolving steel/construction demand. The Company aims for cost-efficient operations, stronger regional presence, improved logistics and customer expansion, with repeat business, capacity expansion and product diversification being explored subject to market conditions.

Risk and Concerns

The Company operates in a competitive TMT industry with organized and unorganized manufacturers. Raw-material price fluctuations, higher costs, pricing pressure and changes in demand may affect margins. The Company seeks to address these through effective procurement, cost management, operational efficiency and focused marketing. It also complies with applicable environmental laws and GPCB requirements and undertakes necessary measures/investments in machinery, processes and environmental management systems.

Internal Control Systems and their Adequacy

The Company has an adequate internal-control system commensurate with its size, scale and business. It covers procurement of raw materials, stores, plant and machinery, inventory, production and sale of finished goods and is periodically reviewed for effectiveness and improvement.

Operational and Financial Performance

During the year, the Company focused on efficient utilization of manufacturing facilities, product quality and customer requirements, supported by demand from construction and infrastructure sectors. Detailed financial performance is covered in the Directors Report and financial statements forming part of the Annual Report.

Human Resources / Industrial Relations

Human resources remain important to manufacturing operations. The Company develops a technically competent and trained workforce through appropriate in-house and external training, with focus on safety, employee development, quality and operational efficiency. The Company maintained cordial and harmonious employee relations. The Company had 169 employees as at the close of the financial year.

Key Financial Ratios

Ratios	2025-26	2024-25	Change
Debtors Turnover	13.03	20.34	-35.50%
Inventory Turnover	5.11	8.84	-42.14%
Interest Service Coverage Ratio	0.98	1.64	-40.03%
Current Ratio	1.73	1.75	1.06%
Debt Equity Ratio	0.77	0.77	-0.08%
Operating Profit Margin	2.18%	3.11%	-29.90%
Net Profit Margin	0.99%	1.59%	37.79%
Return on Net Worth	3.96%	12.67%	-68.72%

Note: The Companys equity remained stable during the year; accordingly, there was no significant change in the Debt Equity Ratio compared with the previous year.

Disclosure of Accounting Treatment

In preparation of the financial statements, no accounting treatment different from that prescribed in an Accounting Standard has been followed during the financial year under review.

By order of Board of Directors of
ADITYA ULTRA STEEL LIMITED

Sunny Sunil Singhi
Chairman & Managing Director
DIN: 07210706

Regd Office:
Survey No-48, Wankarner Boudry,
Bhalgam, National Highway 8-A,
Wankaner, Rajkot- 363621

Date: 26.08.2026
Place: Rajkot