Ashnisha Industries Ltd Management Discussions

INDUSTRIAL STRUCTURE AND DEVELOPMENT:

In FY 2024-25, the Indian steel industry witnessed robust growth, producing around 151 million tonnes of crude steel and meeting a domestic demand of approximately 150 million tonnes, driven by infrastructure and industrial expansion. However, the sector faced shifting trade dynamics, with finished steel imports rising by 24.5% to 9.5 million tonnes and exports falling 35.1%, making India a net importer for the second consecutive year. To protect domestic producers, the government imposed a 12% safeguard duty on select steel products. Looking ahead, demand is expected to grow steadily, with production capacity increases aiming to restore Indias net exporter status amid fluctuating global market conditions. The companys role is crucial in bridging the gap between steel manufacturers and consumers, ensuring timely delivery and competitive pricing while managing inventory and logistics efficiently.

OVERVIEW:

The global steel industry is a major economic force driven by its essential role in infrastructure, construction, and manufacturing. Steel production involves significant financial investment, with capital expenditures for new plants and technological upgrades often reaching billions of dollars. Revenue is influenced by fluctuations in raw material costs, steel prices, and global demand. The industrys financial performance is closely tied to economic cycles, with periods of expansion marked by rising steel prices and high demand, while downturns can lead to overcapacity and price volatility. Additionally, ongoing investments in sustainability and technology are reshaping the financial landscape, with a focus on reducing carbon footprints and improving operational efficiencies.

OPPORTUNITY & THREATS:

Opportunities:

Various initiatives are taken by the Government to ensure supply to domestic steel industry, focus on infrastructure and restarting road projects aiding the demand for steel etc. These will generate a lot of opportunities for the Company which will ultimately lead to achieve the organisations set goals. Besides this, huge infrastructure demand, rapid urbanization and increasing demand for consumer durables also generate a lot of opportunities for the Company. Robust Demand - Indias domestic steel demand is estimated to grow by 9-10% in FY25. Rising Infrastructure & Construction Demand. Green Steel Initiatives- Growing focus on low-carbon steel production, including green hydrogen and recycling, aligns with global sustainability trends. Production Linked Incentive schemes and National Steel Policy encourage capacity expansion and technological upgrades. Increasing global demand, especially from developing economies, offers export growth opportunities. Innovation in bio-based chemicals and circular economy practices. Strong global demand for specialty chemicals and petrochemicals opens international markets.

Threats:

The competition from domestic and international steel companies located in India is also increasing which has eventually exposed enormous strain to the company to survive in this competitive market. Cheap steel imports, especially from China and other countries, create pricing pressure despite safeguard duties. Geopolitical tensions and trade disruptions may affect demand and supply chains. Increasing regulatory scrutiny on emissions and waste management can raise costs.

COMPETITION:

Competition in the market has intensified and forced the players to adopt aggressive marketing strategy and promotional campaigns to capture and protect their market shares, the Company has the plans to penetrate better in to market, especially through the customer retention and business development in the regions which have not been tapped. However, new entrants with innovative approaches or niche focus can still disrupt the market.

SEGMENT WISE AND PRODUCT WISE PERFORMANCE:

Details on segment wise performance of the Company is provided separately in Notes to Accounts.

RISK AND CONCERN:

Steel trading relies on a complex supply chain. Disruptions in transportation, logistics, or production can delay shipments and increase costs. Dependence on specific suppliers for raw materials or finished products can be risky if those suppliers face operational issues or financial instability.

Changes in tariffs, trade agreements, and import/export restrictions can affect the cost and availability of steel, influencing competitive dynamics and profit margins. Compliance with environmental standards and regulations is increasingly stringent. Investments in sustainable practices and technologies may be necessary to meet regulatory requirements and market expectations.

INITIATIVES BY THE COMPANY:

The Company is planning to set up Solar Power project in the state of Gujarat for a capacity upto 1.5 MW. The Company, during the year under review (FY 2024-25) has entered into agreements with UGVCL (Uttar Gujarat Vij Company Limited), the distribution company and GETCO (Gujarat Energy Transmission Corporation Limited), the transmission company. In addition to that, the Company has also received approval from necessary Government authorities and currently, the project status is under process. The Company had filed detailed updates with the Exchange under Regulation 30 of SEBI (LODR), Regulations, 2015, for the same.

The Company is quite convinced that the overall productivity, profitability would improve in a sustainable manner, as an outcome of this strategy.

OUTLOOK:

The steel industry is expected to continue evolving with a strong focus on sustainability, technological innovation, and adaptation to changing global economic conditions. As industries worldwide push for greener practices, the steel sector will likely see significant advancements in reducing its environmental footprint and improving efficiency.

Overall, the steel industry remains a critical part of the global economy, with ongoing developments shaping its future trajectory.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

HUMAN RESOURCE:

The Human Resource Management of our organization deals with and provides leadership and advice for dealing with all issues related to the people in the organization Effective Human Resource Management enables employees to contribute effectively and productively to overall company growth and accomplishment of the organizations goals and objectives. Human Resource of our organisation is the strong foundation for creating many possibilities for its business. The efficient operations of manufacturing units, market development and its expansion were the highlight of our peoples effort.

HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION:

The people are the greatest asset, and their safety, health, and well-being is of utmost importance to us. The Company endeavours to provide a safe, conducive and productive work environment to ensure no injury or accident. Several other measures have been taken by the Company to ensure health and safety of its employees. The Companys ethos of environment protection by development of environment friendly processes for effective usage of resources is based on the belief that nature is a precious endowment to humanity.

CEO AND CFO CERTIFICATION:

Mr. Ashok Shah, Managing Director and Mr. Hiren Makwana, CFO have given certificate to the board as contemplated in SEBI Listing Regulations.

CAUTIONARY STATEMENT

The statements in the "Management Discussion and Analysis Report" section describes the Companys objectives, projections, estimates, expectations and predictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL REPFORMANCE:

Operational performance viz. total revenue from Operations decreased from Rs. 527.47 Lakhs in the previous financial year to Rs. 283.15 Lakhs in the current financial year. Cash and cash equivalents at the end of the year stood at Rs. 20.41 Lakhs.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

	Standalone		Consolidated
	2024-25	2023-24	2024-25	2023-24
Debtors Turnover Ratio	0.35	0.54	0.42	0.89
Inventory Turnover Ratio	0.00	0.00	38.46	0.27
Interest coverage ratio	0.00	0.00	0.00	0.00
Current Ratio	13.88	11.09	1.98	3.56
Debt Equity Ratio	0.15	0.14	0.60	0.05
Operating Profit Margin	103.44	16.06	193.62	11.49
Net Profit Margin	4.32	12.34	3.50	7.66
Return on Networth	0.44	2.37	0.22	1.24
P/E Ratio	330.00	101.50	197.11	63.89

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

Even though the Company has rational retribution but due to adjustment of past years losses, your Company fall short to earn significant sum as return on Net Worth.

DISCLOSURE OF ACCOUNTING TREATMENT:

The Financial statements have been prepared in compliance with the Indian Accounting Standards (Ind AS) issued by The Institute of Chartered Accountants of India (ICAI) which have been notified under the Companies

(Indian Accounting Standards) Rules, 2015 (‘Ind AS Rules), of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention.

	For and on behalf of the Board
	Sd/-	Sd/-
	Ashok Shah	Shalin A. Shah
Place: Ahmedabad	Managing Director	Director
Date: 9th July, 2025	DIN: 02467830	DIN: 00297447