Bajaj Steel Industries Ltd Management Discussions

1. ECONOMIC OVERVIEW

Indian Economy

India maintained its strong economic momentum in FY2025–26, recording 7.7% growth and continuing to remain the fastest-growing major economy. Growth was supported by robust private consumption, resilient agricultural output, improving urban and rural demand, and sustained public capital expenditure.

Government-led investments in infrastructure, energy and industrial development strengthened long-term demand visibility. Large-scale initiatives across railways, defence and infrastructure, including the National Infrastructure Pipeline and manufacturing incentive programmes, supported growth across engineering, power and industrial segments.

Outlook

Indias economic outlook for FY2026–27 remains positive, with real GDP projected to grow between 6.8% and 7.2%, supported by resilient domestic demand, strong macroeconomic fundamentals and sustained investments in infrastructure and manufacturing. Continued policy support through fiscal, monetary, labour and trade reforms is expected to strengthen economic activity and maintain growth momentum.

The countrys improving fiscal position and foreign exchange reserves exceeding USD 690 billion provide a strong buffer against external uncertainties, including geopolitical tensions and global market volatility. While risks such as trade disruptions, energy price volatility and capital outflows remain, Indias diversified growth drivers, policy stability and expanding investment ecosystem position it to remain one of the worlds fastest-growing major economies over the medium term.

Indian Economy GDP Growth Rate

Year	FY 2021-22	FY 2022-23	FY 2023-24	FY 2024-25	FY 2025-26
GDP Growth Rate	8.7	7.0	8.2	6.5	7.7

2. INDUSTRY REVIEW

2.1 Cotton Ginning Machinery Industry

According to Research and Markets, the global cotton ginning machinery market is expected to grow from USD 3.39 billion in 2025 to USD 4.84 billion by 2030, registering a CAGR of 7.6%. Growth is supported by increasing automation, rising investments in modern ginning infrastructure, expanding cotton production, and a stronger focus on fibre quality and sustainable processing.

Key Growth Drivers

• Rising global demand for cotton and cotton-based products continues to drive investments in modern ginning infrastructure.

• Increasing adoption of automated and high-capacity ginning plants is improving throughput, reducing labour dependence, and enhancing operational efficiency.

• Greater emphasis on fibre quality, contamination control, and energy efficiency is accelerating the adoption of advanced ginning technologies.

• Sustainability initiatives are encouraging the deployment of energy-efficient machinery with lower operating costs and reduced environmental impact.

Key Industry Trends

• Automation, smart feeding systems, and process optimisation are transforming cotton ginning operations.

• Technological innovations, such as pre-grooved roller modules, are enhancing lint yield, lowering energy consumption, and reducing maintenance downtime.

• Strategic consolidation and acquisitions are strengthening industry capabilities and expanding integrated cotton processing networks.

• Asia-Pacific remains the largest market, supported by strong cotton production and textile manufacturing, while continued investments across emerging economies are creating new growth opportunities.

Outlook

The outlook for the cotton ginning machinery industry remains positive, supported by rising global cotton consumption, continued expansion of the textile sector, and increasing investments in modern ginning infrastructure. Growing adoption of automation, energy-efficient equipment, and smart technologies is expected to enhance productivity, improve fibre quality, and lower operating costs. As sustainability and operational efficiency become key priorities, demand for advanced ginning solutions is likely to strengthen, particularly across major cotton-producing regions, creating long-term growth opportunities for machinery manufacturers.

Business Performance

The Cotton Processing Machinery Division delivered a resilient performance in FY2025–26, supported by strong global demand and a healthy order pipeline. With an order book of _363 crores as of 31 March 2026, the division maintained its leadership position through its comprehensive technology portfolio, expanding international presence, and export-driven business model. Continued investments in innovation, strategic collaborations, and high-capacity, customised solutions strengthened its competitive advantage and reinforced its position as a leading global provider of cotton processing machinery.

2.2 Infrastructure – PEB Industry

Indias construction landscape is undergoing a structural transformation, with Pre-Engineered Buildings (PEBs) emerging as the preferred solution for industrial, logistics and infrastructure projects. As businesses increasingly prioritise speed, cost efficiency, quality and sustainability, construction is shifting from conventional on-site methods to precision-engineered, factory-manufactured building systems. This transition is being reinforced by robust government infrastructure spending, rising industrial capex and the rapid expansion of sectors such as warehousing, data centres, semiconductors, manufacturing and e-commerce.

Indian PEB Market

The Indian PEB industry is evolving from a niche construction alternative into a mainstream structural solution. The domestic prefabricated construction market, estimated at USD 2.3 billion in FY25, is expected to nearly double to USD 4.5 billion by FY30, registering a CAGR of 9–11%. While organised players account for around 40–45% of the market, the top six manufacturers command nearly 80–85% of the organised segment, reflecting increasing industry consolidation and scale advantages.

Growth Drivers

• Strong infrastructure and industrial capex: Construction investment in the industrial sector is expected to reach _4.5–5.5 trillion during FY25–29, driven by manufacturing, metals, oil & gas and logistics.

• Low penetration, high growth potential: Pre-engineered construction currently accounts for only 3–5% of Indias construction market, with penetration expected to increase to 9–11% by FY28.

• Faster project execution: PEBs reduce construction timelines by 30–50%, enabling significantly quicker project completion than conventional RCC structures.

• Cost efficiency: Large industrial and commercial PEB projects can deliver 30–40% lower initial construction costs compared with RCC buildings.

• Sustainability focus: Reduced material wastage, improved resource efficiency and lower environmental impact are accelerating the adoption of prefabricated construction.

• Emerging high-growth sectors: Expanding investments in data centres, semiconductor facilities, cold storage, quick-commerce warehouses and advanced manufacturing are creating sustained demand for customised PEB solutions.

Outlook

The long-term outlook for the PEB industry remains highly favourable. As infrastructure development, industrial expansion and logistics investments continue to accelerate, Pre-Engineered Buildings are expected to become the preferred construction solution for large-scale industrial and commercial projects. Continued advances in automation, digital engineering, smart manufacturing and sustainable construction practices are expected to enhance productivity, improve project economics and strengthen industry competitiveness. Well-integrated, technology-driven manufacturers with large fabrication capacities and comprehensive solution offerings are expected to be the primary beneficiaries of this structural shift in Indias construction ecosystem.

Source: http://niveshaay.com/blog/building-fast-scaling-faster-indias-peb-multi-billion-dollar-opportunity/

Business Performance

The Pre-Engineered Buildings (PEB) Division delivered a stable performance in FY2025–26, supported by a diversified project portfolio and strong execution capabilities. The division continued to undertake turnkey EPC projects across industrial, warehousing, commercial and infrastructure segments for leading clients, including Indian Oil Corporation Ltd., Maharashtra State Warehousing Corporation, Nuclear Fuel Complex and Maha Metro. Backed by a manufacturing capacity of 35,000 MTPA, over 600 completed projects, and an order book of _100 crore as of 31 March 2026, the division remains well positioned to capitalise on the growing demand for high-quality, customised pre-engineered building solutions. All structures are designed in compliance with Indian (IS) and American (AISC) standards for seismic and wind-load performance, reinforcing the divisions commitment to quality, safety and engineering excellence.

2.3 Electric Panel Industry

According to Markets and Data, the Indian electric control panel market is expected to grow from USD 394.8 million in FY2024 to USD 615.1 million by FY2032, registering a CAGR of 5.7% during FY2025–FY2032. The market is being shaped by rising electricity demand, rapid industrialisation, infrastructure expansion, renewable energy integration and increasing adoption of automation across manufacturing and utility sectors.

Key Growth Drivers

• Infrastructure and power sector investments: Expansion of transmission and distribution networks, renewable energy projects and smart grid infrastructure is driving demand for advanced control panels.

• Industrial automation and Industry 4.0 adoption: Growing automation in manufacturing is increasing the need for intelligent, scalable and customised control solutions to enhance productivity and operational efficiency.

• Rising power demand: Urbanisation, population growth and increasing electrification are creating demand for reliable power management and distribution systems.

• Renewable energy integration: The transition towards solar, wind and distributed energy systems is creating opportunities for control panels that enable efficient energy flow management and grid stability.

• Supportive government initiatives: Policies focused on renewable energy expansion, smart grids, industrial automation and domestic manufacturing are strengthening the market ecosystem.

Key Industry Trends

• Smart and digital control systems equipped with advanced monitoring, automation and real-time diagnostics are gaining adoption across industrial applications.

• Power Control Centres (PCCs) are emerging as critical solutions for industrial facilities, enabling efficient load management, power distribution and system monitoring.

• Increasing focus on safety, compliance and energy efficiency is driving demand for technologically advanced electrical control solutions.

• Growing adoption of customised and modular control panels is enabling industries to meet evolving operational requirements.

• The West and Central regions of India continue to remain key markets, supported by strong industrial activity, manufacturing clusters and infrastructure development.

Industry Outlook

The Indian electric control panel market is expected to witness sustained growth, supported by rising electricity demand, industrial automation, infrastructure expansion and increasing integration of renewable energy into power systems. The growing adoption of Industry 4.0, smart grids and advanced power management solutions is driving demand for intelligent, efficient and reliable control panels across industrial, commercial and utility applications. With continued government focus on grid modernisation, renewable energy development and domestic manufacturing, the market presents significant opportunities for technology-driven players offering customised and energy-efficient solutions.

Source:https://www.marketsandata.com/industry-reports/india-electric-control-panel-market

Business Performance

The Electrical Panels Division delivered a strong performance in FY2025–26, supported by a diversified product portfolio, strategic partnerships and growing demand for reliable power management solutions. The division manufactures a comprehensive range of electrical panels, including Power Control Centres (PCCs), Motor Control Centres (MCCs), APFC panels, LT & HT panels, PLC & SCADA panels, AMF panels, synchronisation panels and customised solutions. Backed by certifications including IEC 61439, UL and IS 8623, and strategic partnerships with leading global brands such as Schneider Electric, ABB and Mitsubishi, the division continues to strengthen its market position. With an order book of _54 crore as of 31 March 2026, the business remains well positioned to capitalise on rising demand for automation, efficient power distribution and advanced electrical infrastructure solutions.

2.4 Heavy Engineering Industry

According to CRISIL Intelligence, Indias heavy engineering capital goods industry, valued at approximately _3,100–3,200 billion in FY2024, is expected to grow at a CAGR of 7.5–8.5% between FY2023 and FY2029, reaching around _4,500–_4,600 billion. Growth is expected to be supported by increasing manufacturing and construction activity, infrastructure investments, rising demand from end-use industries and government-led initiatives such as the Production Linked Incentive (PLI) scheme and ease of doing business reforms.

Technological advancements, foreign direct investment and capacity expansion across sectors including heavy electrical equipment, construction and mining machinery, and machine tools are expected to further strengthen the industrys growth trajectory. Rising investments in infrastructure development, manufacturing capabilities and industrial capacity creation will continue to drive demand for heavy engineering solutions.

Growth Drivers

• Infrastructure-led demand: Accelerating investments in roads, railways, power, urban infrastructure and industrial projects are driving demand for heavy engineering equipment and components.

• Manufacturing expansion: Growth in domestic manufacturing, supported by initiatives such as Make in India, ease of doing business reforms and the Production Linked Incentive (PLI) scheme, is strengthening the capital goods ecosystem.

• Industrial capacity addition: Expansion across key sectors such as cement, power, metals, mining and construction is creating sustained demand for heavy engineering solutions.

• Technology advancement: Increasing adoption of automation, digital technologies and advanced manufacturing processes is enhancing productivity, efficiency and competitiveness.

• Rising foreign investments: Growing FDI inflows and global supply chain diversification are supporting capacity creation and localisation of engineering capabilities.

Industry Outlook

Indias heavy engineering capital goods industry is positioned for sustained growth, supported by robust infrastructure development, expanding industrial capacity and favourable government policies. The outlook remains positive across segments such as heavy electrical equipment, construction and mining machinery, and machine tools. Increasing focus on self-reliance, technology-led manufacturing and large-scale infrastructure investments is expected to create long-term opportunities for engineering companies with strong execution capabilities and specialised solutions.

2.5 Other Products

According to Technavio, the Indian fire protection systems market is expected to grow by USD 1.94 billion between 2025 and 2030, registering a CAGR of 5.9%, driven by rapid urbanisation, infrastructure development and increasing emphasis on regulatory compliance and safety standards. The adoption of advanced fire detection, suppression and monitoring solutions is gaining momentum across commercial, industrial and large-scale infrastructure projects, supported by stringent National Building Code (NBC) requirements. Growing integration of technologies such as IoT-enabled sensors, intelligent analytics, Building Information Modelling (BIM) and automated safety systems is transforming fire risk management. Additionally, rising focus on sustainable fire protection solutions, eco-friendly suppression agents and resilient building designs is expected to create new growth opportunities for industry participants.

The Indian Hydraulics Power Packs & Cylinders industry in 2026 is a rapidly growing sector fuelled by Indias booming manufacturing, infrastructure, and agricultural machinery markets.

The Indian industrial fans and blowers market, valued at USD 803.0 million in 2025, is projected to reach USD 1.20 billion by 2034, registering a CAGR of 4.4% during 2026–2034 (Source: IMARC Group). Growth is being driven by rising industrialisation, increasing demand for energy-efficient air movement solutions and expanding applications across manufacturing, pharmaceuticals, power generation and process industries. Advancements in smart technologies, automation and customised ventilation systems are enabling improved operational efficiency and reliability. Additionally, evolving regulatory standards around energy consumption and workplace safety are encouraging industries to adopt advanced, high-performance fan and blower solutions.

Business Performance

The Other Products Division continued to expand its offerings across diverse industrial and infrastructure applications, catering to evolving customer requirements through a wide portfolio of safety, engineering and utility solutions. The division provides fire protection systems, fire alarm and detection solutions, fire extinguishers, fire hydrant pumps, fire-rated doors, power transmission products, industrial fans, hydraulics solutions, specialty conveyors, duct systems and cyclone solutions. Supported by an order book of _15 crore as of 31 March 2026, the division remains focused on delivering customised, reliable and application-driven solutions across domestic and export markets. Its diversified product portfolio enables it to address opportunities arising from industrial expansion, infrastructure development and increasing emphasis on safety and operational efficiency.

3. COMPANY OVERVIEW

Established in 1961, Bajaj Steel Industries Limited (BSIL) is a leading engineering company with over six decades of expertise in delivering innovative, high-quality industrial solutions. Headquartered in central India, the Company operates one of the countrys most advanced manufacturing facilities, spread across 100,000 sq. mtrs. of built-up area, supported by ongoing capacity expansion.

Backed by state-of-the-art manufacturing capabilities, including high-definition fibre laser cutting machines, advanced CNC systems, precision fabrication and modern sheet metal facilities, BSIL delivers engineered solutions that meet global quality and performance standards.

The Company offers a diversified portfolio spanning Cotton Ginning & Pressing Machinery, Cotton Seed Delinting & Decorticating Equipment, Pre-Engineered Buildings, LT & HT Electrical Panels, Heavy Engineering Equipment, Specialty Conveyors, Hydraulic Systems, Power Transmission Products, Industrial Fans, Fire Protection Systems, Steel Safety & Fire-Resistant Doors, and custom-engineered components, serving customers across domestic and international markets.

4. OPPORTUNITIES AND THREATS

Opportunities

Innovation-led Product Development

The Company continues to strengthen its growth pipeline through focused investments in research and development. Recent innovations—including a cotton seed dryer, gin moisture management system, and cotton classifier—are enhancing processing efficiency, improving cotton quality, increasing by-product yields and reducing free fatty acid content. The successful development and supply of Passenger Boarding Bridges (PBBs) has also enabled the Company to enter the airport infrastructure segment, expanding its product portfolio and creating new revenue opportunities.

Technology and Global Competitiveness

BSIL combines proprietary engineering capabilities with globally acquired technologies to deliver advanced, high-performance solutions. Its acquisition of Continental Eagle Corporation (USA) and ongoing technical collaboration with CIRCOT support continuous product innovation and process enhancement. Leveraging these capabilities, the Company has established a strong international presence, supplying engineering solutions across developed and emerging markets while reinforcing its position as a technology-driven manufacturer.

Supportive Policy Environment

Government initiatives aimed at strengthening domestic manufacturing, infrastructure development and the textile value chain continue to create favourable growth opportunities. Policy support for industrial development, exports and technology adoption is expected to enhance demand across several of the Companys business segments.

Threats

Foreign Exchange Exposure

With exports contributing a significant share of revenue, fluctuations in foreign exchange rates can impact realisations, profitability and overall financial performance.

Geopolitical and Supply Chain Disruptions

Global operations expose the Company to risks arising from geopolitical tensions, trade restrictions, shipping disruptions and logistics bottlenecks, which may affect the timely execution of international orders.

Technology Disruption

Rapid advancements in engineering and manufacturing technologies require continuous investments in innovation and product development. Failure to keep pace with evolving technologies could affect long-term competitiveness.

Dependence on Cotton Production

Demand for the Companys cotton processing machinery is closely linked to cotton production levels, which are influenced by climatic conditions, agricultural productivity and crop patterns. Adverse weather or lower cotton output could impact industry demand.

Raw Material and Commodity Price Volatility

Fluctuations in cotton prices, steel prices and other input costs, driven by global demand-supply dynamics and macroeconomic conditions, may exert pressure on margins and affect business performance. Effective procurement strategies and prudent risk management remain critical to mitigating these challenges.

5. FINANCIAL REVIEW

	Standalone		Consolidated
Particulars	31.03.2026	31.03.2025	31.03.2026	31.03.2025
Net Revenue from Operation (Including Other Income)	48,604.14	54,501.33	53,653.67	59,720.70
Less: Expenditure	42,577.54	45,214.07	46,392.08	49,267.13
Operating Profit (PBIDT)	6,026.6	9,287.26	7,261.59	10,453.57
Less: Interest	507.05	418.81	507.06	418.81
Depreciation	1,703.30	1,443.30	1,754.23	1,493.67
Profit before Tax & Exceptional item	3,816.25	7,425.15	5,000.30	8,541.09
Add: Exceptional Item	-	2,652.33	-	2,652.33
Profit / Loss Before Tax	3,816.25	10,077.48	5,000.30	11,193.41
Provision for Taxation:
Current Year:	878.00	2,286.87	1,126.96	2,592.32
Deferred Tax:	180.66	175.80	182.84	167.68
Profit/Loss for the year	2,757.59	7,614.81	3,690.50	8,433.42
Other comprehensive income/ Loss for the year	59.21	(58.16)	59.21	(58.16)
Profit/Loss after other comprehensive income	2,816.80	7,556.65	3,749.70	8,375.26
EPS (Basic & Diluted) (*)	13.54	36.33	18.03	40.27

Change in Key Financial Ratios and Reasons Thereof

Ratios on Standalone Basis	FY 2025-26	FY 2024-25	Variance
Net Profit Margin (%)	5.71	13.97	(59.13)
Debt Equity Ratio (x)	0.14	0.17	(13.86)
Interest Coverage Ratio (x)	1.09	2.19	(50.19)
Return on Equity (%)	7.02	23.00	(68.36)
Current Ratio(x)	1.59	1.96	(18.64)

6. RISKS AND CONCERNS

The Company operates in a dynamic business environment and is exposed to risks relating to procurement, market conditions, finance, technology and global economic developments. To address these challenges, it has established a robust enterprise risk management framework focused on identifying, assessing, mitigating and monitoring key risks, thereby ensuring business resilience and operational continuity.

The Board regularly reviews the Companys risk management framework and mitigation strategies to ensure that emerging risks are proactively addressed. Based on the current business environment and market outlook, the Company does not foresee any material risks that are expected to significantly impact its operations or growth prospects in the near term.

7. MATERIAL DEVELOPMENT IN HUMAN RESOURCES

The Company remains committed to building a skilled, agile and future-ready workforce through continuous learning, capability development and leadership enhancement. A structured Learning & Development programme, coupled with opportunities to work on challenging and innovative projects, enables employees to strengthen their technical expertise while fostering a culture of innovation and continuous improvement.

To support business growth, the HR function continued to strengthen the leadership pipeline and accelerate the digitalisation of HR processes, enhancing operational efficiency, employee experience and organisational effectiveness. The Company also maintained cordial industrial and employee relations throughout the year, with no loss of man-days due to industrial disputes, reflecting its strong commitment to a collaborative and inclusive work environment.

8. OUTLOOK

The medium-term outlook for the Company remains positive, supported by sustained investments in infrastructure, manufacturing, renewable energy and industrial automation. Government initiatives such as Make in India, Atmanirbhar Bharat and continued capital expenditure on transportation, energy and industrial projects are expected to create strong demand across the Companys diversified engineering portfolio.

Leveraging its established manufacturing capabilities, technology-driven product portfolio and growing global presence, the Company is focused on expanding its footprint across domestic and international markets. Continued investments in innovation, product development, capacity enhancement and geographic expansion are expected to strengthen its competitive position and support sustainable growth over the coming years, while its diversified business model provides resilience against sector-specific market cycles.

9. INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has a well-established internal control system designed to support structured and efficient operations. It follows a systematic approach by formulating comprehensive business plans annually, which include revenue and capex budgets for each quarter. These plans are closely monitored, and actual performance is reviewed against the budget. Any deviations identified are promptly addressed to ensure alignment with business objectives.

To further strengthen governance, the Company has implemented an internal audit system appropriate to its scale and complexity. This audit program encompasses all key functions and activities, ensuring thorough oversight. A dedicated statutory compliance audit team is also in place to assess adherence to regulations across all departments and report findings to the management, enabling timely corrective actions.

In addition, the Audit Committee of the Board of Directors meets quarterly to review both Internal and Statutory Audit reports. These reviews help ensure the integrity of the Companys financial reporting and its compliance with applicable laws and standards.

10. ENVIRONMENT, HEALTH AND SAFETY (EHS)

The Company is committed to conducting its operations in a safe, responsible and environmentally sustainable manner. Guided by its ISO 14001:2015 certified Environmental Management System, it continually strives to minimise its environmental footprint through efficient resource utilisation, pollution prevention and the adoption of sustainable operating practices.

The Company also places strong emphasis on workplace health and safety by promoting a culture of safety, ensuring compliance with applicable regulations and implementing preventive measures across its operations. Regular plantation drives and green initiatives are undertaken across manufacturing facilities to enhance biodiversity, improve the local environment and reinforce the Companys commitment to environmental stewardship.

11. CAUTIONARY STATEMENT

The Management Discussion and Analysis Report may include forward-looking statements relating to the Companys objectives, projections, estimates, and expectations. These statements are made in accordance with applicable laws and regulations but are inherently subject to uncertainties. Actual results may differ materially from those expressed or implied due to several influencing factors. These include economic developments within the country, industry-specific demand and supply dynamics, changes in government regulations and tax policies, as well as legal proceedings and industrial relations. Such factors may significantly impact the Companys performance.