AKG Exim Ltd Management Discussions

This Management Discussion and Analysis Report has been prepared in compliance with the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Report provides an overview of the Companys expectations and projections relating to its growth strategy, product development initiatives, market position, expenditures, and financial performance.

Certain statements contained in this Management Discussion and Analysis Report are forward-looking statements that involve various risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied in such forward-looking statements due to changes in underlying assumptions, future developments, information, or events. The Company does not undertake any obligation to update or revise such forward-looking statements, except as may be required under applicable laws and regulations.

Global Economy

The global economy remained resilient during Financial Year 2025-26 despite a challenging operating environment characterised by geopolitical tensions, evolving trade policies, persistent policy uncertainty and disruptions in global supply chains. While inflationary pressures moderated across several economies and financial conditions gradually improved, the pace of economic recovery remained uneven across regions.

Global economic activity was supported by resilient domestic demand, continued investment in technology and infrastructure, and the adaptability of businesses to changing trade and policy conditions. However, heightened geopolitical tensions, increasing trade restrictions and volatility in commodity and energy prices continued to pose challenges to global growth and investment sentiment.

The global outlook for 2026 remains subject to considerable uncertainty. Global growth is projected at 3.1% in 2026 and 3.2% in 2027. The conflict in the Middle East may result in higher energy prices, renewed inflationary pressures and tighter financial conditions. Global growth is also projected to slow to 2.5% in 2026 before improving to 2.8% in 2027-28.

The United States economy is projected to remain resilient, supported by consumer spending, investment and a relatively stable labour market. However, trade policy changes, higher energy costs and regulatory and financial uncertainties may moderate the pace of growth. The Euro Area is projected to continue experiencing subdued economic activity amid structural challenges, energy-related pressures and relatively weak external demand.

Chinas economy is projected to continue navigating structural adjustments, including stress in the property sector, subdued consumer sentiment and changing external trade conditions. The evolution of global trade policies and tariff measures may continue to influence Chinas export-oriented sectors and international supply chains.

The economies of the Gulf Cooperation Council are projected to continue benefiting from infrastructure investment and economic diversification initiatives. Investments in non-oil sectors, including infrastructure, manufacturing, tourism, technology and clean energy, are expected to strengthen the regions economic base and reduce dependence on hydrocarbons.

The global business environment is therefore expected to remain dynamic, with opportunities arising from technological advancement, infrastructure development, supply-chain diversification and emerging markets, while geopolitical developments, energy prices, protectionist trade measures and currency volatility remain important risk factors.

Outlook

Global growth is projected to remain resilient at 3.3% in 2026 and 3.2% in 2027, broadly in line with 2025 levels, despite moderating momentum in high-tech sectors and lingering trade uncertainties. Inflation is expected to ease from 4.1% in 2025 to 3.4% by 2027. Advanced economies will witness steady but moderate growth, while emerging markets, including India, will continue to drive global expansion, supported by structural strengths and policy support. The situation in West Asia remains dynamic, set against an evolving global economic landscape. Encouragingly, the resilience demonstrated by global markets and economies provides confidence in their ability to adapt and navigate emerging challenges effectively.

Indian economy

India continues to stand out as one of the worlds fastest-growing major economies with GDP growth for FY 2025-26 was 7.6%, driven by the twin engines of consumption and investment. Strong domestic demand, supported by rising purchasing power, stable employment and healthy rural and urban consumption, remains the cornerstone of growth. Investment activity has also strengthened, reflecting improving business confidence and sustained public capital expenditure. While global uncertainties and trade-related challenges persist, India has demonstrated resilience by advancing structural reforms, enhancing ease of doing business and strengthening economic fundamentals. Inflation remains largely contained, and balance sheets across households, corporates and banks are robust.

Outlook

FY 2026-27 is expected to mark a phase of steady consolidation, supported by resilient domestic demand and strengthening investment momentum. While global uncertainties persist, moderating inflation and more accommodative monetary conditions provide a supportive backdrop. Continued policy reforms, improved ease of doing business and ongoing trade negotiations are likely to ease external pressures. With healthy balance sheets and sustained public investment, the Indian economy remains well-positioned to navigate global volatility, with GDP growth projected at 7.2%, reflecting a stable and optimistic growth outlook.

METALS AND STEELS:

The Indian metals and mining industry continues to play a critical role in the countrys economic and industrial development by providing essential raw materials to key sectors such as infrastructure, construction, automotive, power, engineering, manufacturing and renewable energy. Indias substantial reserves of iron ore, bauxite, chromite, manganese and other minerals provide a strong resource base for the continued development of the metals and mining sector.

During FY 2025-26, the Indian steel industry continued to witness healthy growth, supported by sustained domestic demand, increased infrastructure spending, urbanisation and expansion in construction and automotive activities. The Governments continued focus on infrastructure development, transportation networks, housing, industrial corridors and other capital-intensive projects remained important drivers of steel consumption.

The performance of the Indian steel sector remained resilient during the year despite volatility in global commodity markets, fluctuations in raw-material prices and developments in international trade. During April-June 2025, crude steel production in India stood at approximately 40.31 million tonnes, registering growth of 10.4% over the corresponding period of the previous year. Finished steel production during the period stood at approximately 38.57 million tonnes, while finished steel consumption was approximately 38.34 million tonnes, reflecting continued strength in domestic demand.

Indias steel industry also benefits from the availability of domestic iron ore and other mineral resources. The Ministry of Mines has reported that the estimated value of metallic mineral production during FY 2025-26 was approximately 1,57,415 crore, representing an increase of around 13.66% over the previous year. Iron ore continued to be the dominant metallic mineral, contributing approximately 69.64% of the total value of metallic mineral production. Bauxite production was estimated at 25.78 million tonnes during FY 2025-26, registering growth of approximately 4.18% over the previous year.

The availability of domestic mineral resources provides India with a significant competitive advantage and supports the development of an integrated metals value chain. India remains substantially self-sufficient in several important minerals, including iron ore, bauxite and chromite. This domestic resource base helps reduce dependence on imports for key raw materials and provides opportunities for further value addition through beneficiation, processing and downstream manufacturing.

Demand Drivers

The outlook for the Indian steel and metals industry remains closely linked to the growth of infrastructure and industrial activity. Government expenditure on roads, railways, ports, airports, urban infrastructure and housing is expected to continue supporting steel demand. In addition, the expansion of the automotive, engineering, renewable energy, electrical equipment and manufacturing sectors is expected to create incremental demand for both conventional and value-added steel products.

The power, transmission and renewable energy sectors are also significant consumers of metals, particularly aluminium and steel. Aluminium demand is supported by applications in power transmission, automotive and transportation, construction, packaging, machinery, electronics and renewable energy.

Government Initiatives and Industry Outlook

The Government of India continues to focus on strengthening domestic steel production, improving product quality, promoting value-added and specialised steel products, encouraging technological advancement and reducing dependence on imports. The National Steel Policy, 2017 envisages substantial expansion in Indias steel-making capacity and production by 2030-31, reflecting the long-term strategic importance of the sector to the Indian economy.

The medium- to long-term outlook for the Indian metals and steel industry remains positive, supported by economic growth, infrastructure development, urbanisation, rising per-capita consumption and increasing manufacturing activity. The sector is also expected to benefit from greater emphasis on domestic value addition, downstream processing, technological upgradation and the development of higher-grade and specialised steel products.

At the same time, the industry remains exposed to certain risks, including fluctuations in iron ore, coal, energy and other input costs, global steel prices, international trade measures, exchange-rate movements, environmental and regulatory requirements and cyclicality in end-user industries. Increasing focus on decarbonisation and energy efficiency is also expected to influence investment requirements and production technologies across the industry.

Overall, Indias strong mineral resource base, expanding domestic steel consumption, infrastructure-led economic growth and favourable long-term demand fundamentals provide a supportive environment for the continued growth of the metals and steel industry.

Market Size

? In FY26, crude steel production in India stood at 168.4 MT, while finished steel production reached 160.90 MT.

? In FY27 (April-May 2026) the production of crude steel stood at 28 MT and finished steel stood at 27.4 MT.

? In FY26 (April-December 2025), Indias total steel production stood at 5,983 thousand tonnes (provisional), as compared to 6,261 thousand tonnes in FY25, registering a decline.

? India is expected to surpass its steel production capacity target of 300 MT by 2030, reaching an estimated 330 MT.

? India is the second-largest producer of aluminium globally. The production of primary aluminium reached 7.07 lakh ton (LT) in FY26 (April-May 2025) from 6.98 LT in FY25 (April-May 2024). Iron Ore production for the month of October 2025 is 24.8 million tonnes, as compared to 22.9 million tonnes for October 2024. The cumulative production of Iron Ore for FY26 (April-October 2025) is 156.6 million tonnes as compared to 158.4 million tonnes in FY25 (April-October 2024).

? The estimated value of mineral production for FY26 is Rs. 1,71,460 crore (US $18.67 billion), as against Rs. 1,52,431 crore (US$ 17.49 billion) in FY25.

? Indias copper demand is expected to grow about 7% annually, led by renewable energy expansion, electric vehicles, and infrastructure projects including industrial corridors, national highways, and the Housing for All programme, with domestic consumption already exceeding 7,50,000 tonnes against production of about 5,55,000 tonnes with demand projected to double by 2030.

? GVA at basic prices from mining and quarrying stood at Rs. 5,08,554 crore (US 55.38 billion) in 2025-26 (FAE), as compared to Rs. 5,40,788 crore (US$ 62.05 billion) in 2024-25 (P), as per the Ministry of Statistics.

? The construction sectors Gross Value Added (GVA) at current prices was estimated at Rs. 27,99,847 crore (US$ 316.83 billion) for FY26 (FAE) against Rs. 26,27,009 crore (US$ 310.67 billion) for FY25 (PE).

? The combined Index of Eight Core Industries (ICI) in October 2025 has remained unchanged at 162.4 (provisional) as compared to the Index in October 2024.

Investments/ Developments

Some of the investments/ developments in the Metals & Mining sector in the recent past are as follows:

? On February 26, 2026, NMDCs R&D Centre signed an MoU with IIT Hyderabad to advance indigenous mineral processing, green steelmaking, critical mineral extraction, AI-enabled mining and Mining 4.0 technologies, strengthening Indias metals and mining innovation and sustainable development.

? India is accelerating critical minerals exploration and mining infrastructure under Atmanirbhar Bharat to strengthen supply chains for EVs, renewable energy and defence, while, on May 10, 2026, experts highlighted sustainable CSR initiatives supporting the metals and mining sector.

? Further developments noted on February 18, 2026 indicate that the industry is undergoing structural transformation through policy support such as the Critical Minerals framework, improved regulatory mechanisms, and growing global and domestic investments. The sector is also focusing on digitalisation, ESG practices, and supply chain strengthening, positioning it as a key driver of long-term economic growth and investment expansion.

? Indias metals and mining sector is entering a strong growth phase, supported by government reforms, accelerated mine auctions, and increased domestic exploration, as highlighted on November 6, 2025. The sector is also benefiting from rising demand for critical minerals linked to the global energy transition, alongside a push for mineral self-reliance and higher private sector participation.

? As of October 2025, non-fossil fuel sources now contribute 250.6 GW (49%) of total capacity, including 200.29 GW renewable and 8.78 GW nuclear.

? During the earnings call for Q2 FY26, Tata Steel plans a 7-7.5 million tonne capacity expansion across its Indian operations, with major brownfield projects at Kalinganagar, Neelachal, Meramandali, Ludhiana and Gamharia moving through planning and approval stages.

? India plans to train 5.7 million workers by 2030 in the mining sector under the National Critical Mineral Mission to boost domestic critical mineral production and cut import dependence.

? As of August 2025, JSW Steel and Japans JFE Steel are planning to jointly invest Rs. 5,845 crore (US$ 682 million) to expand capacity for cold-rolled grain-oriented electrical steel (CRGO) to 3,50,000 tonnes per annum by FY28 by scaling up the Nashik plant from 50,000 to 2,50,000 TPA and increasing the Vijayanagar units capacity to 1,00,000 TPA.

? On July 7, 2025, Tata Steel signed a Memorandum of Understanding with Australias InQuik Group to bring modular bridge construction technology to India, using prefabricated steel formwork filled with concrete on site to enable faster, cost-effective, climate resilient and scalable bridge infrastructure, especially useful in remote regions.

? NALCO produced 37,736 Metric Tonne of Aluminium and sold 30,595 Metric Tonne of Aluminium metal in April, 2026.

? BALCO produced 50,994 Metric Tonne of Aluminium and sold 42,322 Metric Tonne of Aluminium metal in April, 2026.

? Vedanta Limited (Aluminium) produced 1,52,638 Metric Tonne of Aluminium and sold 1,43,666 Metric Tonne of Aluminium metal in April, 2026.

? In June 2025, India and Australia strengthened their Critical Minerals Investment Partnership to co-invest in lithium and cobalt projects and build resilient clean-energy supply chains.

? Between April 2000-March 2026, FDI inflows in the metallurgical industry stood at Rs. 1.20 lakh crore (US$ 19.3 billion), followed by the mining Rs. 21,794.45 crore (US$ 3.54 billion), diamond & gold ornaments Rs. 9,962.78 crore (US$ 1.54 billion), and coal production Rs. 119.19 crore (US$ 27.73 million).

? Indias steel exports in July 2025 saw a higher share from Belgium, Italy, Spain, Taiwan, Bulgaria, the US and Qatar, while the share of the UAE, Nepal and Portugal declined compared to July 2024.

? With the fifth-largest coal reserves and as the second-largest consumer, coal remains crucial for India, contributing 55% to the national energy mix and fuelling over 74% of total power generation as of April 2025.

? On March 28, 2025, AM/NS India has secured 890 hectares of land in Rajayyapeta, Anakapalli district, Andhra Pradesh for a new integrated steel mill with planned capacity of about 7 MTPA of crude steel, expanding beyond its Hazira operations to meet rising domestic demand.

? In January 2025, the Ministry of Steel has introduced the PLI Scheme 1.1 for specialty steel, covering five product categories, which aligns with the existing PLI Scheme. This initiative aims to encourage greater participation in response to industry requests for relaxation. The PLI

Scheme 1.1 will be open for applications from January 6 to January 31, 2025, and will be implemented from FY26 to FY30.

? India and Kazakhstan have launched IREUK Titanium Limited, a joint venture to produce Titanium Slag in India, marking Indias first venture in Central Asia. The company will convert low-grade Ilmenite into high-grade titanium feedstock, aiming to enhance the titanium value chain in India and create jobs in Odisha.

? Southeastern Coalfields Limited (SECL), a subsidiary of Coal India in Chhattisgarh, has reached a milestone with its Gevra and Kusmunda coal mines ranking 2nd and 4th on WorldAtlas.coms list of the worlds largest coal mines. Located in Korba district, these mines together produce over 100 million tons of coal annually, accounting for about 10% of Indias total coal production.

? India is experiencing a construction boom driven by a growing housing economy and significant government infrastructure investments. The country is projected to become the third-largest construction market in the world, following China and the US, by 2025.

Government Initiatives

The Government of India has adopted few initiatives in the recent past, some of these are as follows:

? On April 9, 2025, the Government launched the National Critical Mineral Mission (NCMM) to strengthen Indias critical minerals sector through 1,200 exploration projects, faster approvals, private participation and processing infrastructure, boosting self-reliance and domestic mining capabilities.

? The Union Budget 2026-27, presented on February 1, 2026, outlines several government initiatives to strengthen Indias metals and mining sector as part of a broader push for industrial growth and self-reliance. Key measures include the proposal to develop dedicated mineral corridors in resource-rich states such as Odisha and Tamil Nadu, along with import duty exemptions on capital goods for critical mineral processing, aimed at boosting domestic production and value addition. The budget also emphasises manufacturing expansion, export promotion, and supply chain resilience, with a strong focus on critical minerals and downstream industries. These initiatives are expected to generate large-scale employment, enhance capacity creation, and position the sector as a key driver of economic growth amid evolving global supply chains.

? On November 26, 2025, the Union Cabinet chaired by Prime Minister Mr. Narendra Modi approved a Rs. 7,280 crore (US$ 809.8 million) "Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets (REPM)", marking a major positive step for Indias metals and mining ecosystem. The initiative aims to establish 6,000 MTPA of integrated REPM manufacturing capacity, creating a complete domestic value chain from rare earth oxides to finished magnets, thereby strengthening self-reliance and positioning India as a key player in the global market. The scheme supports critical sectors such as electric vehicles, renewable energy, aerospace and defence, while also reducing import dependence, generating employment, and reinforcing supply chains in line with the Atmanirbhar Bharat vision and Indias Net Zero 2070 goals.

? In August 2025, the Commerce Ministry, via the DGTR, has recommended a three-year safeguard duty on imports of certain flat steel products, 12% in year one, 11.5% in year two, and 11% in year three, to protect domestic producers from a sharp import surge.

? India launched the seven-year National Critical Mineral Mission in January 2025 with a proposed Rs. 16,300 crore (US$ 1.9 billion) outlay and an expected Rs. 18,000 crore (US$ 2.1 billion) investment by Public Sector Undertakings and other stakeholders to secure key minerals for clean energy and advanced technologies.

? By May 27, 2025, the Centre had successfully auctioned a cumulative 34 critical/strategic mineral blocks across five tranches out of 55 offered, including the first ever potash block; these include both Mining Leases (ML) and Composite Licences (CL) across multiple states.

? In January 2025, the Cabinet approved the National Critical Mineral Mission to fund exploration-to-recycling, with multi year budgetary support and complementary PSU investments.

? In the Union Budget 2025-26, capital investment outlay for infrastructure is being increased by 11.1% to Rs. 11.2 lakh crore (US$ 129.0 billion). To encourage higher private participation, the government has proposed various measures.

? In February 2024, the Union Cabinet approved the amendment to the Mines and Minerals (Development and Regulation) Act,1957 specifying royalty rates for 12 critical minerals, thus completing the rationalization process for all 24 strategic minerals. This move aims to streamline the mining sector and auction processes, aligning with recent amendments to the MMDR Amendment Act, 2023.

? In December 2023, the Ministry of Mines proposed capping performance security and upfront amounts for mining critical minerals to attract more bidders. Currently based on a percentage of the Value of Estimated Resources (VER), the move aims to reduce barriers to participation in auctions and expedite the process for mining leases.

? In October 2023, the Union Cabinet approved the amendment of the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957, specifying royalty rates for three critical minerals: Lithium, Niobium, and Rare Earth Elements (REEs) paving the way for the auctioning of blocks for these minerals, as outlined in the MMDR Amendment Act, 2023.

? The government plans to monetize assets worth Rs. 28,727 crore (US$ 3.68 billion) in the mining sector over 2022-25.

? In 2022, PLI Scheme for domestic production of specialty steel has been approved with an outlay of Rs. 6,322 crore (US$ 762.4 million) by the Cabinet.

? Import duty on Anthracite/Pulverized Coal Injection (PCI) coal, Coke, and Semi-coke and Ferronickel were reduced to zero.

? Export duty on Iron ores/ concentrates and iron ore pellets was raised to 50% and 45%, respectively.

? In addition, 15% export duty was imposed on pig iron and several steel products.

? The Ministry of Mines of the Government of India has signed MoUs with different nations.

? The National Steel Policy aims to boost per capita steel consumption to 160 kgs by 2030-31. The government has a fixed objective of increasing rural consumption of steel from the current 19.6 kgs per capita to 38 kgs per capita by 2030-31.

https://www.ibef.org/industry/metals-and-mining

OUTLOOK

Our Company is in the Line of Business of Import/ Export or Trading of following products and also deals in Engineering / Technical Consultancy or Indenting / Commission or Business Consulting Services of:

1. Metal Scrap - The Company offers a wide range of scrap metals viz. HMS (Heavy Melting Scrap), aluminum scrap, stainless steel scrap, copper scrap, brass scrap, etc. The company also deals in ferrous Scrap, non-ferrous Scrap and reusable items. It procures metal scrap originating from USA, West African and European countries, and sells these products in the domestic market all over India.

2. Petrochemicals - The Company also operates in the trading, wholesaling, distribution and indenting business of base oil variants to refineries along with supply of petrochemicals to industries. The petroleum products traded / distributed by the Company are Group I, II and III variants for automobiles lubricants and different industrial purposes, Granular & Formed Sulphur used in phosphate based industrial and consumer industry sectors and Aromatics - Benzene, Toluene.

We have developed a sustainability mission for our company which can be briefed in three words (reduce-reuse-recycle).

BUSINESS OVERVIEW

The total standalone turnover including other income for the year 2025-26 stood at Rs. 5163.97Lacs as compared to Rs. 6983.72 Lacs for the year 2024-25. Total consolidated turnover of Rs. 8568.17 lacs during the year under review as against the consolidated turnover of Rs. 13297.48 Lacs in the last year 2024-25.

MARKETING

The Company has set up a good marketing team.

INTERNAL CONTROL

The Company has an internal control system, commensurate with the size of its operations. Adequate records and documents were maintained as required by laws. The Companys audit Committee reviewed the internal control system. All efforts are being made to make the internal control systems more effective.

CONSOLIDATED SEGMENT WISE REPORTING

During the year under review, Company has achieved all sales under Segment B i.e., Trading only.

Name of the segments dealed by the Company during the year 2024-25:

1. Segment A: Manufacturing (Closed Operations) w.e.f December, 2023

2. Segment B: Trading

RISKS AND CONCERNS

In any business, risks and prospects are inseparable. As a responsible management, the Companys principal endeavor is to maximize returns. The Company continues to take all steps necessary to minimize losses through detailed studies and interaction with experts.

CAUTIONARY STATEMENT

Statement in this Managements Discussion and Analysis detailing the Companys objectives, projections, estimates, expectations or predictions are "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand-supply conditions, feedstock availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations.

DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed all the treatments in the Financial Statements as per the prescribed Accounting Standards.

By Order of the Board of Directors For AKG Exim Limited