Arfin India Ltd Management Discussions

Industry Structure and Developments

The global aluminium industry demonstrated resilience during FY 2025-26, supported by sustained demand from key end-user sectors including electrical transmission and distribution, steel, foundry, construction, packaging, and infrastructure. Aluminium continues to be the material of choice owing to its lightweight properties, corrosion resistance, recyclability, and energy efficiency, making it an integral component of the global transition towards sustainable industrial development.

Indias aluminium industry maintained a positive growth trajectory during the year, driven by increased public infrastructure spending, expansion of power transmission and distribution networks, rising electric vehicle adoption, and accelerated investments in renewable energy. Government initiatives such as enhanced capital expenditure, rural electrification, Make in India, and manufacturing-led growth continue to provide strong structural support for long-term demand across the aluminium value chain.

The aluminium recycling industry has emerged as a key enabler of sustainable manufacturing, supported by increasing emphasis on circular economy principles, resource efficiency, and carbon footprint reduction. Recycled aluminium consumes substantially less energy than primary aluminium production while offering significant environmental and economic advantages, making it an increasingly preferred choice across industries. The Aluminium recycling sector also continued to gain prominence owing to increasing emphasis on circular economy practices, resource efficiency, and reduction in carbon emissions.

The Governments policy initiatives, including the Extended Producer Responsibility (EPR) framework for non-ferrous metal scrap and the National Non-Ferrous Metal Scrap Recycling Framework, are expected to further strengthen Indias organised recycling ecosystem. These initiatives encourage higher recycling rates, improved scrap traceability, efficient resource utilisation, and support the countrys transition towards a circular economy, creating long-term growth opportunities for the secondary aluminium industry.

Structural demand drivers for aluminium and value-added aluminium products continue to strengthen, supported by Indias growing investments in transmission and distribution infrastructure, renewable energy integration, urbanisation, rail electrification, and industrial manufacturing. These sectors are increasingly demanding high-performance, lightweight, energy-efficient, and sustainable aluminium solutions. Simultaneously, the shift towards premium products, localisation of manufacturing, and supply chain diversification is creating significant opportunities for organized manufacturers with integrated capabilities and diversified product portfolios. Backed by its manufacturing expertise, expanding conductors business, strong presence in Aluminium wire rods and allied products. Arfin India Limited is strategically positioned to benefit from these long-term structural growth drivers while continuing to deliver sustainable value to its stakeholders.

Although the industry continues to face challenges arising from raw material price volatility, energy costs, geopolitical developments, supply chain disruptions, and global economic uncertainties, its long-term fundamentals remain robust. Rising investments in infrastructure, clean energy, electrification, and sustainable manufacturing are expected to support healthy demand over the medium to long term.

Arfin India Limited operates in the ferrous and non-ferrous metals industry with a strategic focus on aluminium and value-added metal solutions. The Company has built a diversified portfolio comprising Aluminium Wire Rods, Aluminium Deox, Cored Wire, Aluminium Ingots, Ferro Titanium, Conductors & Cables, Spherodizing Agent, Inoculants & AL-59, serving a wide spectrum of industries including power transmission, steel, foundry, infrastructure, engineering, and manufacturing. Backed by continuous product innovation, operational excellence, and a strong customer-centric approach, the Company remains well positioned to capitalise on emerging opportunities while delivering sustainable long-term value to its stakeholders.

Opportunities

The Indian aluminium industry offers significant long-term growth opportunities, driven by increasing investments in power transmission and distribution, renewable energy, infrastructure, rail electrification, electric mobility, and manufacturing. Government initiatives such as Make in India, Atmanirbhar Bharat, and the growing emphasis on circular economy practices and aluminium recycling are expected to further strengthen demand for sustainable and value-added aluminium products.

The Company is well positioned to capitalise on these opportunities through its diversified product portfolio, integrated manufacturing capabilities, and strategic focus on value-added products. The strategic partnership with JFE Shoji India enhances the Companys access to global markets, while continued investments in operational excellence, product innovation, and capacity expansion are expected to strengthen its competitive position and support sustainable long-term growth

In FY 2025-26, the Company demonstrated resilience amidst a challenging macroeconomic environment characterised by volatile commodity prices, changing market dynamics, and global uncertainties. During the year, the Company achieved total consolidated sales of 24,047 metric tons, generating revenue of Rs. 71,343 Lakhs. During the year, the Company maintained a strong operational performance through a disciplined focus on value-added products, product mix optimisation, cost efficiency, and prudent financial management, resulting in improved profitability and stronger operating margins. The Company recorded Consolidated Gross Export Sales of Rs. 9,834 Lakhs during the financial year ended March 31, 2026. With an installed annual production capacity of 71,000 metric tons, the Company remains well positioned to cater to future demand and drive sustainable growth through enhanced capacity utilisation, operational excellence, and strategic market expansion.

Threats

The Company continuously monitors the evolving business environment to identify potential risks that could impact its operations, financial performance, and long-term growth. While strategic initiatives and a robust risk management framework help mitigate these challenges, the following factors continue to pose potential threats to the business:

1 ECONOMIC SLOWDOWN AND GEOPOLITICAL UNCERTAINTIES

2 INTENSE MARKET COMPETITION

3 SUPPLY CHAIN DISRUPTIONS

4 REGULATORY AND COMPLIANCE CHANGES

5 CYBER SECURITY AND INFORMATION TECHNOLOGY RISKS

6 CURRENCY FLUCTUATIONS

These factors can be main drivers behind the pressure on the Company in terms of operation and profitability.

Product / Plant Wise Performance

The Company operates solely in the business of manufacturing and trading of Ferrous and non-ferrous metals. It does not have any other reportable segments or business activities. Accordingly, separate segment-wise reporting is not applicable. The consolidated financial performance of each product/plant is presented below:

Aluminium Wire Rod

The Company has installed capacity of 15,000 metric tons per annum in the business of aluminium wire rod. The Company has sold 5,906 metric tons of aluminium wire rod worth Rs. 18,982. The Company recorded captive consumption of 364 metric tons and completed job work of 243 metric tons, reflecting our operational efficiency and trusted manufacturing capabilities. The product primarily caters to the Steel and Power sectors, where it is used as a raw material for deoxidizing agents in the steel industry, as well as for the manufacturing of conductors and cables in the power sector.

Aluminium Deox

The Company is having installed capacity of 20,000 metric tons per annum in aluminium deox. The sales during the financial year under report was 11,543 metric tons amounting to Rs. 31,845 Lakhs. The product is primarily used in the Steel industry as an aluminium deoxidant agent for steel refining processes in steel plants.

Cored Wire

The Company is having cored wire plant with capacity of 3,500 metric tons per annum. The sales quantity during the financial year under report was 918 metric tons worth Rs. 4,089 Lakhs. The product is primarily used in the Steel Industry for desulphurization of steel and also serves as an additive during the steel melting process.

Conductor & Cables

The Company is having installed capacity of 12,000 metric tons per annum of conductor and cables plant. The sales during the financial year under report stood at 2,417 metric tons amounting to Rs. 8,383 Lakhs. The product is primarily used in the Power industry for the transmission of electricity from power plants to substations and from substations to end consumers

Ferro Alloys

The Company is having installed capacity of 2,500 metric tons per annum of Ferro Alloys plant. The sales during the financial year under report stood at 803 metric tons amounting to Rs. 2,154 Lakhs. The product is primarily used in the Steel Industry as an additive in steel peeling processes for the manufacturing of high-grade steel.

Outlook

The global economy is expected to remain resilient despite geopolitical uncertainties, evolving trade policies, and commodity price volatility. Continued investments in clean energy, digital infrastructure, industrial automation, and power transmission are expected to sustain demand across manufacturing sectors. The global transition towards decarbonization and resource-efficient manufacturing is accelerating the adoption of recyclable and lightweight materials, positioning aluminium as a critical enabler of sustainable industrial growth.

India continues to stand out as one of the worlds fastest-growing major economies, supported by robust domestic demand, infrastructure-led capital expenditure, manufacturing expansion, and progressive policy initiatives such as Make in India and Atmanirbhar Bharat. Rising investments in renewable energy, transmission and distribution infrastructure, railway electrification, electric mobility, and urban development are expected to create sustained demand for aluminium and value-added metal products. Simultaneously, increasing emphasis on circular economy practices and aluminium recycling is expected to further strengthen the long-term growth prospects of the secondary aluminium industry.

Against this favourable backdrop, Arfin India Limited is well positioned to leverage emerging opportunities through its diversified product portfolio, integrated manufacturing capabilities, strategic partnership with JFE Shoji India, and continued focus on operational excellence, product innovation, and sustainable manufacturing. The Companys expansion into high-growth segments such as Conductors & Cables, coupled with its commitment to enhancing value-added offerings and strengthening global market presence, provides a strong foundation for sustainable long-term growth. With a disciplined execution strategy and a clear focus on creating enduring stakeholder value, the Company remains confident of strengthening its competitive position in the years ahead.

Business Highlights

The Aluminium Wire Rod, Aluminium Deox, and Conductors & Cables segments remained the key contributors to the Companys performance during FY 2025 26. The key financial highlights on a consolidated basis for the financial year ended March 31, 2026 are as follows:

Net Revenue from Operations stood at Rs. 61,800 Lakhs.

EBITDA increased to Rs. 4,708 Lakhs, reflecting improved operational performance.

EBITDA Margin improved to 7.62% of Net Revenue from Operations.

Profit After Tax (PAT) stood at Rs. 1,545 Lakhs.

Basic and Diluted Earnings Per Equity Share (EPS) increased to Rs. 0.92 per equity share.

Risks and Concerns

The Company operates in a dynamic business environment where evolving global economic conditions, technological advancements, regulatory developments, and market dynamics present both opportunities and challenges. A structured enterprise risk management framework enables the Company to identify, assess, monitor, and mitigate potential risks while ensuring operational resilience and sustainable value creation.

The key risks and concerns that may influence the Companys performance are as follows:

1. Raw Material Price Volatility:

The Companys operations are dependent on the availability and pricing of aluminium, ferro alloys, and other critical raw materials. Fluctuations in commodity prices, energy costs, or supply shortages may affect production costs, profitability, and working capital requirements.

2. Global Economic and Geopolitical Developments

Uncertainties arising from geopolitical conflicts, changing trade policies, inflationary pressures, and global economic slowdowns may impact demand, international trade flows, logistics, and customer spending across key markets.

3. Foreign Exchange Exposure:

The Company is exposed to foreign exchange fluctuations due to imports of raw materials and export transactions. Significant movements in exchange rates may impact procurement costs, export competitiveness, and overall financial performance.

4. Regulatory and Compliance Risk

The Company operates in a highly regulated environment. Changes in environmental regulations, taxation policies, trade regulations, product standards, and corporate governance requirements may necessitate additional investments and operational adjustments.

5. Market Competition and Pricing Pressure:

The metal industry continues to witness intense competition from domestic as well as international manufacturers. Sustained pricing pressure and evolving customer expectations require continuous improvements in product quality, operational efficiency, innovation, and cost optimisation.

6. Supply Chain and Logistics Risk:

Disruptions in procurement, transportation, port operations, or supplier performance may impact the timely availability of raw materials and execution of customer orders. The Company continues to strengthen its sourcing strategy and supply chain resilience to minimise such risks.

7. Sustainability and ESG Expectations

Increasing stakeholder focus on environmental stewardship, energy efficiency, carbon reduction, and responsible business practices requires continuous investment in sustainable manufacturing processes and compliance with evolving ESG standards.

8. Human Capital Risk

The Companys long-term success depends on attracting, developing, and retaining a skilled workforce. Talent availability, employee engagement, succession planning, and workplace safety remain key priorities in supporting business growth.

Internal Control Systems and its Adequacy

The Company has established a comprehensive and robust internal control framework commensurate with the size, nature, and complexity of its business operations. The internal control system is designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, reliability of financial reporting, safeguarding of assets, compliance with applicable laws and regulations, and timely identification and mitigation of business risks.

The Company has implemented well-defined policies, delegation of authority, and maker-checker mechanisms across key business processes. These controls facilitate disciplined decision-making, enhance operational efficiency, ensure compliance with statutory requirements, and strengthen the overall governance framework.

The Internal Audit function, carried out by an independent firm of professionals, adopts a risk-based audit approach covering all critical operational, financial, compliance, and information technology processes. The scope of internal audit is reviewed periodically to ensure that emerging business risks, regulatory developments, and process changes are adequately addressed. The Internal Auditors submit their reports directly to the Audit Committee, which regularly reviews the audit observations, management responses, and implementation status of corrective actions.

The Audit Committee provides strategic oversight of the Companys internal financial controls and risk management framework. It periodically evaluates the adequacy and effectiveness of internal controls, reviews the findings of the Internal Auditors and Statutory Auditors, and monitors the implementation of recommendations to further strengthen the control environment. The Committee also ensures compliance with the requirements relating to Internal Financial Controls under Section 134(5)(e) of the Companies Act, 2013.

The internal control framework is designed to ensure:

Protection and optimal utilisation of the Companys assets.

Accuracy, completeness, and reliability of accounting records and financial reporting.

Compliance with applicable statutes, regulations, internal policies, and standard operating procedures.

Efficient utilisation of resources and continuous improvement in operational effectiveness.

Timely identification, assessment, and mitigation of strategic, operational, financial, and compliance risks.

Prevention and detection of frauds, errors, and irregularities through appropriate checks and monitoring mechanisms.

The Companys Financial Statements are prepared in accordance with the Indian Accounting Standards (IND AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other applicable provisions of the Companies Act, 2013. The significant accounting policies are reviewed periodically and approved by the Audit Committee and the Board of Directors to ensure consistency, transparency, and compliance in financial reporting.

Based on the assessment carried out during the financial year ended March 31, 2026, the Management believes that the Companys Internal Financial Controls over Financial Reporting (IFC/ICFR) are adequate and operating effectively. No material weaknesses were identified in the design or operating effectiveness of the internal control system, and the Company continues to strengthen its governance and control processes in line with evolving business requirements and regulatory expectations.

Human Relations / Industrial Relations

At Arfin, our people remain the driving force behind our continued growth and operational excellence. We are committed to fostering a workplace that promotes collaboration, accountability, innovation, and continuous learning. By nurturing talent and encouraging employee participation, we strive to build a resilient and future-ready workforce capable of meeting evolving business challenges.

During the year, the Company continued to strengthen its people practices through focused learning and development initiatives, leadership enhancement, skill upgradation, and workplace safety programmes. We remain dedicated to providing an inclusive, equitable, and performance-oriented work environment where employees are empowered to contribute meaningfully while pursuing their professional growth.

The Company continued to comply with all applicable labour laws, statutory regulations, and employment standards. Our human resource policies are founded on the principles of fairness, equal opportunity, ethical conduct, and respect for human rights. We maintain a zero-tolerance approach towards discrimination, harassment, child labour, and forced labour, while reinforcing a culture of integrity, compliance, and mutual respect across the organization.

Employee health, safety, and well-being continue to remain a key priority. Regular safety awareness programmes, technical training sessions, compliance reviews, and employee engagement initiatives were conducted throughout the year to promote a safe, healthy, and productive workplace. These initiatives contribute to enhancing operational excellence while strengthening employee confidence and organizational resilience.

The industrial relations climate during the year remained harmonious and cordial. The Company continued to enjoy the trust, cooperation, and commitment of its employees, which significantly contributed to operational stability, consistent performance, and the successful achievement of its business objectives.

Key Financial Ratios

The Company has identified the following ratios as its key Financial Ratios:

Particulars	2025-26	2024-25
Debtors Turnover (Days)	15	27
Inventory Turnover (Days)	132	108
Interest Coverage Ratio (PBIT / Finance Cost)	2.26	1.72
Debt-Service Ratio (PBDIT / Finance Cost)	2.51	1.93
Cost of Goods Sold / Net Sales (%)	82.72	83.92
Current Ratio (Current Assets / Current Liabilities)	1.69	1.74
Debt Equity Ratio (x)	0.76	0.75
Operating Profit Margin (PBDIT / Net Sales)	7.62%	6.21%
Net Profit Margin (Net Profit / Net Sales)	2.50%	1.49%

Return on Net Worth

The detail of return on net worth is given below:

Particulars	2025-26	2024-25
Return on Net Worth (Net Profit / Average Net Worth)	9.07%	5.83%

Return on Net Worth (RONW) ) serves as a key profitability indicator, expressed as a percentage. It is calculated by dividing the net profit by the average net worth (capital employed) during the financial year. During the year, the Companys net profit grew from

Rs. 915 lakhs to Rs. 1,545 lakhs. Concurrently, the net worth of the Company increased significantly from Rs. 15,678 lakhs to Rs. 17,035 lakhs, primarily due to the increase in profit for the year.

Cautionary Statement

This Report contains forward-looking statements reflecting the Companys current outlook, business strategy, and growth expectations based on information available at the time of publication. While these statements are made with reasonable care and confidence, actual results may differ due to changes in economic conditions, market trends, regulatory developments, or other factors beyond the Companys control. The Company remains committed to creating long-term stakeholder value through prudent decision-making and disciplined execution but undertakes no obligation to update these forward-looking statements except as required under applicable laws.

Review of Consolidated Financial Performance of the Company for the Period under Report

Sales

The Company reported Gross Sales of Rs. 71,343 Lakhs and Net Income from Operations of Rs. 61,800 Lakhs during the financial year 2025 26 as compared to

Rs. 70,919 Lakhs and Rs. 61,575 Lakhs, respectively, in the previous financial year 2024 25. The Company maintained a stable financial performance during the year despite a dynamic business environment, supported by its diversified product portfolio, continued focus on value-added products, strong customer relationships, and sustained operational efficiencies, which contributed to improved overall business performance.

Profit Before Tax

The Company reported a Profit Before Tax of Rs. 2,371 Lakhs for the financial year 2025 26, marking a 65% year-on-year growth compared to Rs. 1,438 Lakhs in the previous year.

Interest

Finance costs decreased from Rs. 1,982 Lakhs in the previous financial year 2024 25 to Rs. 1,873 Lakhs during the financial year 2025 26, reflecting prudent financial management and optimized borrowing costs. Consequently, the Debt Service Coverage Ratio (DSCR) improved to 2.51 times as on March 31, 2026, from 1.93 times in the previous year, indicating stronger debt-servicing capability and an enhanced financial position.

Net Profit

Net profit for the financial year under report stood at

Rs. 1,545 Lakhs as compared to Rs. 915 Lakhs in the previous financial year 2024-25. It reflects year on year growth of 69 % with compared to previous financial year.

Dividend

The Board of Directors of the Company has decided not to recommend final dividend for the financial year ended March 31, 2026, to conserve profit for its future operations.

Capital Employed

The capital employed in the business was increased by

Rs. 2,591 Lakhs for financial year ended March 31, 2026 as the Reserve or Surplus of the company increased during the year.

Surplus Management

The Company generated a cash profit of Rs. 2,140 Lakhs for the financial year ended March 31, 2026 as compared to Rs. 1,408 Lakhs during the previous financial year. The cash profit is ploughed back into the business to fund the growth.

Equity Share Capital

As at March 31, 2026, the Companys issued, subscribed and paid-up equity share capital stood at 16,87,22,482 equity shares of Rs. 1/- each amounting to total paid up equity share capital of Rs. 16,87,22,482/-.

Debt Equity

Debt equity ratio of the Company was 0.76 as at March 31, 2026 in compare to 0.75 as at March 31, 2025.

Earnings Per Share

The Companys basic and diluted earnings per equity share for the financial year ended March 31, 2026 remains at Rs. 0.92 in compare to Rs. 0.54 for the previous year 2024-25.

Cash Earnings Per Share

The Companys cash earnings per equity share during for the financial year ended March 31, 2026 stood at

Rs. 1.27 in compare to Rs. 0.84 in the previous financial year 2024-25.

th

NOTICE is hereby given that the 34 Annual General Meeting of the members of the Company, Arfin India Limited is scheduled to be held on Saturday, September 19, 2026 at 12.00 p.m.(IST) through Video Conferencing (VC) or Other Audio Visual Means (OAVM) to transact the following businesses:

Ordinary Business

1. A Adoption of Standalone Financial Statements

To receive, consider and adopt the Audited Standalone Financial Statements of the Company for the financial year ended on March 31, 2026 and the Reports of the Board of Directors and Auditors thereon.

B. Adoption of Consolidated Financial

Statements

To receive, consider and adopt the Audited Consolidated Financial Statements of the Company for the financial year ended on March 31, 2026 and the Reports of the Auditors thereon.

2. Appointment of Director(s) Retiring by Rotation

To appoint a Director in place of Mr. Jatin M. Shah (DIN: 00182683), who retires by rotation and being eligible, offers himself for re-appointment.

Special Business:

3. Ratification of Remuneration Payable to Cost Auditors

To consider and if thought fit, to pass the following

resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Rules, 2014 including any amendment, modification or variation thereof, the Company hereby ratifies the remuneration of Rs. 60,000 (Rupees Sixty Thousand Only) plus GST and out of pocket expenses payable to M/s. Ashish Bhavsar & Associates, Cost Accountants (FRN: 000387) who have been appointed by the Board of Directors as Cost Auditors of the Company, to conduct audit of cost records maintained by the Company as prescribed under the Companies (Cost Records and Audit) Rules 2014, for the financial year ending on March 31, 2027.”

	For and on behalf of Board of Directors
	For Arfin India Limited
Registered Office
Plot No.117, Ravi Industrial Estate,	Mahendra R. Shah
Behind Prestige Hotel, Billeshwarpura,	Chairman & Whole Time Director
Chhatral, Gandhinagar - 382729,	(DIN: 00182746)
Gujarat, India.
CIN: L65990GJ1992PLC017460	Place: Chhatral
Tel. No.: +91 2764 232621	Date: August 11, 2026