Atmastco Ltd Management Discussions

Global Economic Overview

In FY 2024 25, the global economy experienced medium growth during geopolitical uncertainties, elevated commodity prices, and restrictive monetary policies. According to IMF and Deloitte Economic Outlook reports, global GDP expanded by approximately 3.2%, supported by easing in ation and resilient consumption in advanced economies.

Growth in advanced economies is projected to be 1.4 percent in 2025. In emerging market and developing economies, growth is expected to slow down to 3.7 percent in 2025 and 3.9 percent in 2026. Global headline in ation is expected to decline at a pace that is slightly slower than what was expected in January, reaching 4.3 percent in 2025 and 3.6 percent in 2026, with notable upward revisions for advanced economies and slight downward revisions for emerging market and developing economies in 2025.

(Source: - IMF World Economic Outlook, April 2025)

Indian Economic Overview

Indias growth story continues to draw global attention, backed by strong fundamentals and consistent performance. Real GDP, which measures the economys output after removing the effects of in ation, expanded by 6.5 per cent in 2024 25. The Reserve Bank of India expects this pace to continue into 2025 26. Other projections align with this optimism, with the United Nations forecasting growth of 6.3 per cent this year and 6.4 per cent next year, while the Confederation of Indian Industry places its estimate slightly higher at 6.40 to 6.70 per cent.

Key Takeaway

- Indias GDP grew 6.5% in 2024 25, the highest among major economies.

- In ation fell to 2.82% in May 2025, the lowest level since February 2019.

- Total exports reached a record USD 824.9 billion in 2024 25.

(Source: - www.pib.gov.in/)

India is the second-largest producer of crude steel globally, after China. The sustained growth of its steel industry is closely tied to rapid infrastructure development and robust economic expansion. Under the National Steel Policy, the country aims to achieve a production target of 300 million tonnes by 2030. Presently, per capita steel consumption stands at around 98 kilograms and is projected to rise to 160 kilograms by 2030, reflecting the sectors critical role as a barometer of economic progress and infrastructure advancement

Indias steel demand is expected to grow at a CAGR of 7-8% over the next few years, driven by

increasing consumption in the construction, automotive, and infrastructure sectors. The demand for steel in India is projected to reach much higher levels, creating opportunities and challenges for the industry. On the supply side, Indian steel producers are expanding their capacities to meet the growing demand, with major players like Tata Steel, JSW Steel, and SAIL announcing significant expansion plans.

On the supply side, steel production is projected to climb steadily from 138.8 million tonnes in FY24 to 165.1 million tonnes by FY27, growing at a healthy pace of over 6% annually. This reflects the expanding industrial base and policy-driven capacity building, rea rming Indias emergence as a global steel powerhouse.

The outlook for FY 2025-26 remains optimistic, with projected GDP growth between 6.3% and 6.8% according to the Economic Survey and leading analysts. Government commitment toward infrastructure, transportation, renewable energy, and digitalization is expected to create favourable conditions for EPC and manufacturing companies. Budget Estimates 2025 -26 Capex Expenditure of Rs 11.21 lakh crore (3.1% of GDP) earmarked in FY 2025-26. Source: https://shorturl.at/ljXhc https://shorturl.at/iF8es

Industry Overview Steel Fabrication, EPC, and Services

The steel fabrication and EPC industry showed steady growth during FY 2024 25. Continued public investment in sectors such as roads, railways, energy, and ports bolstered demand for fabricated steel structures and turnkey EPC solutions.

The Indian Railways and road sectors remained key consumers of fabricated steel and EPC services. The expansion of industrial corridors, metro networks, and renewable energy parks is expected to further increase demand.

Company Overview Atmastco Limited

Atmastco Limited continued its strategic focus on executing steel fabrication, EPC projects, and trading services during FY 2024 25. Despite challenges posed by input cost fluctuations and increased project complexity, the Company maintained its operational resilience.

Key areas of focus included expansion of fabrication capabilities, timely execution of existing

orders, and deeper penetration in public sector contracts.

Business Outlook FY 2025 26

In FY 2025 26, Atmastco aims to capitalize on the expanding infrastructure pipeline and increased allocation to capital-intensive sectors. The Company has a healthy order book and is actively bidding for large projects across steel plants, railways, and bridges. Strategic investments are planned in fabrication capacity enhancement, automation, and workforce training.

Management expects moderate growth in revenues and margins in FY 2025 26, driven by timely

project execution, efficient cost management, and better working capital control.

Overview

The segment reporting for Atmastco Limited provides an analysis of the financial performance and position of the companys primary business segments: Manufacturing/Fabrication and Services, for the scal years 2023-24 and 2024-25. The following report details the key financial metrics, including revenue, net turnover, profit, segment assets, segment liabilities, and depreciation and amortization.

Fiscal Year 2024-25

Segment Revenue - Manufacturing/Fabrication: The segment reached an external revenue of 27,767.41 lacs, attaining a significant portion of the total revenue.

- Services: This segment is reported an external revenue of 4,720.78 lacs. - Total: overall external revenue for the two segments was 32,488.19 lacs.

Net Turnover

- Manufacturing/Fabrication: The net turnover was 24,444.77 lacs after accounting for GST of

3,322.65 lacs.

- Services: The net turnover reached at 4,512.27 lacs with GST amounting to 208.50 lacs.

- Total: The overall net turnover was 28,957.04 lacs.

Pro tability

- Manufacturing/Fabrication: Segment result before deferred tax was 1,572.66 lacs, with a pro t

after tax of 1,679.39 lacs.

- Services: The segment result before deferred tax was 290.30 lacs, and profit after tax was

310.00 lacs.

- Total: overall segment results before deferred tax amounted to 1,862.96 lacs, with a total pro t

after tax of 1,989.39 lacs.

Segment Assets and Liabilities

- Manufacturing/Fabrication: Segment assets were valued amounting to 22,562.92 lacs with

segment liabilities at 15,642.05 lacs.

- Services: Segment assets totaled 19,438.54 lacs and segment liabilities were 13,537.65 lacs. - Total: The aggregate segment assets were 42,001.46 lacs, and total segment liabilities amounted to 29,179.70 lacs.

Fiscal Year 2023-24

Segment Revenue

-Manufacturing/Fabrication: The segment achieved an external revenue of 15,632.11

lacs, representing a significant portion of the total revenue.

-Services: This segment reported an external revenue of 8,339.91 lacs.

-Total: The combined external revenue for the two segments was 23,972.02 lacs.

Net Turnover

-Manufacturing/Fabrication: The net turnover was 14,927.11 lacs after accounting for

GST of 705.01 lacs.

-Services: The net turnover stood at 7,473.47 lacs with GST amounting to 866.44 lacs.

-Total: The overall net turnover was 22,400.57 lacs.

Pro tability

-Manufacturing/Fabrication: Segment result before deferred tax was 1,094.80 lacs, with a

pro t after tax of 1,113.20 lacs.

-Services: The segment result before deferred tax was 548.13 lacs, and profit after tax was

557.34 lacs.

-Total: Combined segment results before deferred tax amounted to 1,642.93 lacs, with a

total profit after tax of 1,670.54 lacs.

Segment Assets and Liabilities

-Manufacturing/Fabrication: Segment assets were valued at 15,642.44 lacs with segment

liabilities at 9,802.62 lacs.

-Services: Segment assets totaled 13,476.38 lacs and segment liabilities were 8,483.83

lacs.

-Total: The aggregate segment assets were 29,118.82 lacs, and total segment liabilities

amounted to 18,286.45 lacs.

Summary

For the financial year 2024 25, Atmastco Limited delivered a commendable performance across both of its core business segments. The Manufacturing/Fabrication segment remained the primary revenue driver, contributing significantly to both the top line and pro tability. The Services segment also maintained a steady growth trajectory, reinforcing the Companys diversi ed revenue base.

The Company recorded an overall increase in net turnover and pro tability compared to the previous scal year, reflecting operational efficiency and market responsiveness. Asset and liability management remained disciplined, with a notable increase in segment assets and prudent control over liabilities.

In line with its long-term growth strategy, the Company continued to invest in operational assets, as reflected in its capital expenditure and depreciation trends, underscoring its commitment to sustaining and expanding its manufacturing and service capabilities.

Your Companys growth fueled by below industry future outlook towards value creation

1. The revenues of the EPC sector are expected to grow 10 to 12 per cent in the current financial year (FY26) which is higher than the growth rate in FY25, as per a report by India Ratings and Research (Ind-Ra). India Ratings and Research: Credit Rating and Research Agency India

2. Stability in cost of Steel price also good for our high Revenue generation which is our main input material. Je eries forecasts steel prices to average between Rs. 52,000/-and Rs. 53,000/- in FY26 and FY27, slightly below current spot prices. https://shorturl.at/xNXUZ

3. Government Policies: Government initiatives and infrastructure spending can drive demand for steel and create opportunities for EPC projects. Press Release:Press Information Bureau . The Prime Minister Shri Narendra Modi, remarked that the current per capita steel consumption in India is approximately 98 kilograms and is expected to rise to 160 kilograms by 2030. Shri Modi emphasized that this increasing steel consumption serves as a golden standard for the countrys infrastructure and economy.

4. Robust Growth Rate of steel demand: Indias steel demand is expected to show a healthy growth of 8.5% in 2025, according to the latest Short-Range Outlook released by the World Steel Association.

Future Outlook of Atmastco Limited

As Your Company looks ahead, the company is well-positioned for continued growth and success, driven by its strong performance across key segments and strategic investments in both Manufacturing/Fabrication and Services.

The overall net turnover of 28,957.04 lacs for FY 2024-25 demonstrates the companys resilience

and adaptability in a dynamic market.

Upward trend in pro tability indicates the companys capability to enhance margins and operational eficiency.

Segment liabilities have also risen to 29,179.70 lacs, yet the companys asset-liability managementremains robust, with a healthy balance sheet poised for further growth.

Defence Sector:

- Your Company has diversi ed its operations into several sectors, including a significant focus on

defence through its subsidiary, Atmastco Defence Systems Private Limited.

- This subsidiary specializes in the manufacturing of protective gear, specifically bulletproof

jackets and helmets for armed forces, as well as full-body protectors designed for troops.

- Your Company has also entered into licensing agreements with the Defence Research and Development Organization (DRDO) and other defence establishments to enhance its manufacturing capabilities for military applications.

- DRDO develops Lightest Bullet Proof Jacket for protection against highest threat Level 6 of BIS https://shorturl.at/TG7yj. Your Company is well-positioned to benefit from the Indian governments push for domestic manufacturing in the defence sector, particularly through initiatives like Make in India and Atmanirbhar Bharat. This environment is expected to create enhanced production opportunities for private companies like Atmastco.

- Moreover, Your Company is also exploring opportunities for exporting its defence products,

which could further enhance its market reach and revenue streams.

The main factors assist Indias projected 6.3 to 6.8% growth next year:

1. Robust Domestic Economy: The Economic Survey highlights strong domestic fundamentals, including stable private consumption, a solid external account, and healthy remittance in flows, which provide a barrier against global uncertainties

2. Fiscal Discipline and Macroeconomic Stability: measured scal consolidation and active monetary policies have helped maintain macroeconomic stability, supporting investor con dence and maintainable growth

3. Infrastructure Investment and Government Policies: Continued public investment in infrastructure, transportation, and digitalization, along with policy initiatives like the Production Linked Incentive (PLI) schemes and support for MSMEs, are obtaining growth and opening new jobs.

4. Flexible Services Sector: The services sector, especially nance, insurance, real estate, and business services, remains a remarkable growth driver, supported by digital transformation and technological advancements.

5. Technological Advancements:

Opportunity: Adoption of advanced technologies such as Building Information Modeling (BIM), automation in fabrication, and digital project management tools can enhance efficiency, accuracy, and competitiveness. Atmastco Limited can invest in these technologies to improve operational capabilities and deliver best value to clients.

Impact: Enhanced operational efficiency and competitive advantage.

6. Risks and Concerns

Key risks include commodity price change, execution delays due to approvals or client constraints, working capital stress in EPC projects, and sector-specific regulators rules & regulation changes. The Company has embraced a structured risk management framework to monitor and mitigate these risk.

7. Internal Control Systems and Adequacy

Your Company has a strong internal control system including all major nancial, operational, and compliance functions. continuous internal audits, policy reviews, and IT-enabled monitoring systems help ensure accuracy and accountability. The Audit Committee look over internal controls and recommends improvements periodically.

8. Human Resources and Industrial Relations

As of March 31, 2025, the Company employed 240 full-time employees. HR initiatives focused on skill development, training Program, look-for safety concern and hiring leadership to assist new projects. The Company maintained friendly industrial relations throughout the year. Special emphasis was placed on technical upskilling and functional induction programs over all sites.

9. Strategic Initiatives

The Company continues to expand its presence in potential sectors such as railways, steel plants, and bridges. Atmastco is trying to enhance its bid competitiveness and execution capability. Investments in equipment, adaption technology, and client structure are expected to contribute significantly to operational performance in FY 2025 26.

10. Cautionary Statement

This report includes proactive statements that reflect the present outlook, chances, and plans of the Company. These statements are based on prevailing assumptions and involve known and unknown risks, uncertainties, and other factors which may cause actual results to differ materially from those anticipated.

The Companys performance during the year marked by constant capital investments and improved asset utilization- indicates a stable operational trajectory. However, forward-looking projections are subject to variables such as changes in macro-economic conditions, market conditions, fluctuations in commodity prices, project execution timelines, and changes in regulatory and compliance systems or political environments, all of which may impact the Companys future results.

While every e ort is made to identify and mitigate the risks through active management and strategic planning, the Company makes no commitment to update or revise any forward-looking statement based on subsequent events or developments. Stakeholders are advised to interpret such statements with appropriate caution and in the context of the uncertainties inherent to the industry and economy.

For and on behalf of the Board of Directors of Atmastco Limited