BMW Industries Ltd Management Discussions

Overview

The objective of this report is to convey the Managements perspective on the external environment and steel industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during the FY 2025-26. This should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information presented in the Integrated Annual Report. The Companys Financial Statements have been prepared in accordance with Indian Accounting Standards (‘Ind AS) complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (‘SEBI) from time to time.

Economic review Global economy

Global economic grew marginally at an 3.4% in 2025 compared to 3.3% in the previous year, influenced by the US tariff shock of April 2025. Despite being partially unwound through subsequent trade deals, it left effective tariff rates well above pre-2025 levels and heightened trade policy uncertainty.

Advanced economies witnessed a marginal growth from 1.8% in 2024 to 1.9% in 2025, while emerging market and developing economies demonstrated relative resilience, expanding by 4.4% in 2025 compared to 4.3% in 2024.

Global inflation continued its multi-year downward trend in 2025, declining to an estimated 4.1% from 5.8% in 2024.

Regional growth (%)	2025	2024
World output	3.4	3.3
Advanced economies	1.9	1.8
Emerging and developing economies	4.4	4.3

(Source: IMF, Un.org)

Performance of the major economies, 2025

United States: GDP growth of 2.1% in 2025 compared to 2.8% in 2024.

China: GDP growth was 5.0% in 2025 compared to 5.0% in 2024.

United Kingdom: GDP growth was 1.3% in 2025 compared to 1.1% in 2024.

Japan: GDP growth was 1.2% in 2025 compared to (0.2) % in 2024.

Germany: GDP growth was 0.2% in 2025 compared to a -0.5% in 2024.

(Source: IMF April 2026 Outlook, World Bank)

Outlook

Given the challenge of forming stable, real-time assumptions for projections, the IMF World Economic Outlook report adopted a ‘reference forecast instead of a conventional baseline, assuming the war remains contained in duration, intensity, and reach, with disruptions easing by mid-2026, in line with commodity futures as of March 10, 2026.

Under this reference view, global growth is projected at 3.1 percent in 2026 and 3.2 percent in 2027. Global inflation is expected to rise to 4.4 percent in 2026 before easing to 3.7 percent in 2027.

(Source: OECD Interim Economic Outlook, IMF, World Economic Forum, Federal Reserve, Bank of England, European Central Bank, Bank of Japan)

Indian economy

The Indian economy grew at an estimated 7.6% in FY26 (official confirmations to come in following the Balance Sheet date), compared to 7.1% in FY25. This growth was driven by strong consumption and increasing investments, reaffirming Indias position as the fastest-growing major economy.

Indias Real GDP at Constant Prices was estimated at Rs. 322.58 lakh crore in FY 2025-26, against the First Revised Estimate of Rs. 299.89 lakh crore for FY 2024-25.

Growth of the Indian economy

	FY23	FY24	FY25	FY26E
Real GDP growth (%)	7.2	7.2	7.1	7.6

E: Estimated. Note: FY24 figure restated under new base year 2022-23. (Source: MoSPI (February 27, 2026))

Growth of the Indian economy quarter by quarter, FY 2025-26

	Q1FY26	Q2FY26	Q3FY26	Q4FY26E
Real GDP growth (%)	6.7	8.4	7.8	7.3

Note: Q2 revised upward from 8.2% and Q3 from 7.35% under the new base year 2022-23 series released February 27, 2026. Q4 remains an estimate. (Source: MoSPI, February 27, 2026)

Inflation, policy and currency dynamics

Inflation remained benign through much of FY26, with full- year CPI estimated at an exceptionally low 2.1%. This created room for 125 basis points of cumulative rate cuts, supporting consumption and investment.

However, macro stability was accompanied by currency volatility. The Indian rupee depreciated sharply by 9.88% during FY26 — its steepest fail since FY12 — touching Rs. 94.78 against the US dollar. This reflected global capital flows, a strong dollar environment, and geopolitical uncertainties.

Capital flows and market behaviour

Foreign portfolio investors remained risk-averse, withdrawing a record Rs. 1.8 trillion during FY26 - the largest outflow in 36 years. However, strong domestic institutional inflows of Rs. 8.55 trillion provided a crucial counterbalance, highlighting the growing maturity and depth of Indias domestic capital markets.

Indias market capitalisation declined 8 percent year on year in FY26 to $4.5 trillion from $4.83 trillion in FY25, marking the sharpest drop since FY23. On the last trading day of the year, the BSE Sensex feii 5.36 percent, or 4,076.96 points, compared with a rise of 5.10 percent, or 3,763 points, in the same period last year, while the Nifty 50 declined 3.6 percent, or 834 points, against a gain of 5.34 percent, or 1,192 points, in the corresponding period. The downturn was largely driven by the ongoing West Asia conflict and concerns around potential tariff measures under Donald Trump, which weighed on global investor sentiment.

Gold prices surged 61.47% during FY26 reflecting global risk aversion and safe-haven demand.

Indias fiscal position continued to strengthen, with net direct tax collections rising 7.19 percent to Rs. 22.8 trillion as of 17^th March 2026. Contributions from corporate and non corporate taxpayers remained nearly balanced, reflecting sustained formalisation of the economy, improved compliance, and the success of digitisation led reforms.

Banking sector

Indias banking sector reflected improving financial health, with the gross non-performing asset ratio deciining to a robust 2.1 percent as of September 2025, indicating stronger asset quality and disciplined lending practices. This stability was mirrored in profitability metrics, as scheduled commercial banks reported a return on assets of 1.3 percent and a return on equity of 12.5 percent during the first half of 2025-26, underscoring sustained operational efficiency and a healthier balance sheet trajectory.

Indias growth story

The tertiary services sector remained a key growth driver, expanding by 9.0 percent in FY26 and increasing its share in nominal gross value added to 54.3 percent from 52.8 percent in FY25, supported by broad-based momentum across segments.

During FY26, financial, real estate, IT and professional services grew by 9.9 percent, while trade, hotels, transport, communication and broadcasting recorded a strong 10.1 percent growth, and public administration and other services expanded by 5.8 percent.

At the same time, manufacturing demonstrated renewed strength, with Gross Value Added (GVA) rising 11.5 percent in FY26 at constant prices, marking the second instance of doubie-digit growth in three years and improving from 9.3 percent in FY25.

The secondary sector grew 9.1 percent, accelerating from 8.0 percent in the previous year, driven by manufacturing alongside construction growth of 7.1 percent. This combination of services-ied scale and manufacturing acceleration is shaping a more baianced and resiiient economic structure.

Consumption and investment

During FY26, Private Finai Consumption Expenditure (PFCE) and Gross Fixed Capitai Formation (GFCF) maintained above-7% growth, reflecting a weii-baianced demand composition across househoid spending and investment activity.

Growth catalysts

Policy-led consumption boost: The Union Budget FY27s tax reiief measures—particuiariy income tax exemptions up to Rs. 12 iakh—are expected to stimuiate discretionary spending and reinforce consumption-ied growth.

Anticipatory Pay Commission impact: The 8^th Pay

Commission, though expected to be impiemented from FY28, is aiready shaping consumer sentiment, creating a forward consumption impuise.

Monetary stability: The Reserve Bank of Indias caiibrated stance, with the repo rate at 5.25%, baiances inflation risks with growth support, ensuring macroeconomic stabiiity.

Credit expansion: Improved banking heaith and iiquidity conditions are expected to sustain strong credit growth across MSMEs, housing, and retaii segments.

Fiscal prudence with growth focus: The Union Budget maintains fiscai discipiine whiie prioritising infrastructure, MSME support, skiiiing, and innovation—key ievers for iong- term productivity.

Outlook

The year under review underscores a defining divergence: a worid grappiing with uncertainty, and an India navigating it with confidence.

In a giobai environment marked by fragmentation and caution, India stands out as a rare convergence of stabiiity, scaie and structurai opportunity. The Worid Bank has revised its FY27 growth estimate upward to approximateiy 6.6%, reflecting resiiient domestic momentum even as growth moderates from the previous year. India is expected to retain its position as the fastest-growing major economy.

Growth wiii be shaped by a combination of strong domestic demand and resiiient private consumption, supported by iow inflation and GST rationaiisation, aiongside stabie export performance with improved access to key markets. This momentum is further reinforced by sustained poiicy support, ongoing economic reforms, and a favourable demographic advantage.

While risks persist, particularly from elevated energy prices, subsidy pressures on government spending, and uncertainty in global demand, Indias macroeconomic fundamentals remain strong.

Over the medium term, sustained consumption, gradual investment recovery, and expanding global trade linkages are expected to reinforce Indias position as a key driver of global economic growth.

(Source: MoSPI, Business Standard, Press Information Bureau, Business Standard, IMF, OECD, Deccan Chronicle. NDTV Profit, Outlook Business, The Asian Banker)

industry overview Global steel industry overview

The global steel market was valued at ~USD 1.63 trillion in 2025 and is expected to grow from USD 1.72 trillion in 2026 to around USD 2.60 trillion by 2034, registering a CAGR of 5.31% over the period. This growth is driven by the increasing demand for steel across key end-use sectors, including automotive, construction and infrastructure, manufacturing, and healthcare. Steel continues to be the material of choice owing to its superior mechanical strength, durability, resistance to corrosion, and long lifecycle, making it integral to modern industrial and infrastructure development.

The steel industry continues to be a key driver of global economic development. The global crude steel production stood at 147.3 million tonnes in January 2026 across 69 reporting countries, indicating a relatively stable output environment despite uneven global demand conditions.

Asia and Oceania continued to dominate global production, contributing approximately 107.6 million tonnes, accounting for nearly three-fourths of total output, supported by strong industrial activity across major economies. The European Union produced around 10.3 million tonnes, while North America contributed approximately 9.2 million tonnes during the month.

India maintained its strong growth trajectory, recording a 10.5% year-on-year increase in production, reinforcing its position as the second-largest steel producer globally. In contrast, China - the worlds largest steel producer - witnessed a sharp decline of 13.9% year-on-year in January 2026, recorded an output of 75.3 million tonnes, marking a

13.9% year-on-year decline, reflecting ongoing structural adjustments and softer domestic demand conditions.

India continued its growth momentum, producing 15.1 million tonnes, representing a 10.5% increase over the previous year. The United States reported production of 7.1 million tonnes, up 3.3%, while Japan produced 6.8 million tonnes, reflecting a marginal 0.5% decline.

Among other key producers, South Korea registered output of 5.6 million tonnes, growing 5.0%, whereas Russia produced an estimated 5.5 million tonnes, witnessing a 7.4% decline. Turkey reported production of 3.4 million tonnes, up 5.8%, and Germany saw a notable increase of 15.0%, reaching 3.1 million tonnes.

In South America and the Middle East, Brazil produced 2.7 million tonnes, reflecting a 1.4% decline, while Iran recorded strong growth with production of 2.6 million tonnes, up 15.1% year-on-year.

Financial highlights

Consolidated financial performance

The Company operates in the steel industry. A brief summary of its performance is provided below. AIL the figures are given in Lakhs.

Particulars	FY26	FY25	Variance (%)
Turnover	66,523	62,862	5.82
EBITDA	17,993	15,822	13.72
Interest and Financial Charges	1888	1,433	31.75
Depreciation	5,226	4,410	18.5
Profit/Loss After Tax	8,077	7,484	7.92

Financial performance and state of affairs

During the year, the Company recorded a net profit of Rs. 80.77 crores. The basic and diluted earnings per share at Rs. 3.59 per share for FY2026.

a. Revenue from operations and other income - financial performance and state of affairs (consolidated):

Product Based Performance:	FY26	FY25	Change %
CRM Complex	40,461	37,367	8.28
Rolling Mill (TMT Bars)	4,685	10,508	(55.41)
Pipes & Tubes	8,409	7,296	15.25
Logistics	4,156	3,844	8.12
Others	8,811	3,847	129.04
Total	66,523	62,862	5.82

 

Product Based Performance:	FY26	FY25	Change %
Revenue from operations	66,523	62,862	5.82
Other income	1,479	1,007	46.87
Total income	68,002	63,869	6.47

b. Cost of Materials consumed:

Particulars	FY26	FY25	Changes(%)
Cost of materials consumed	27,604	19,880	38.85
Changes in inventories of finished goods, work-inprogress, and stock-in-trade	(453)	114	(297.37)
Cost of goods sold	27,151	19,994	35.79

c. Employee benefits expense:

Particulars	FY26	FY25	Changes(%)
Employee benefits expense	3,483	3,108	12.06

d. Depreciation and Amortisation expense:

Particulars	FY26	FY25	Changes(%)
Depreciation and Amortisation expense	5,226	4,410	18.50

e. Other expenses:

Particulars	FY26	FY25	Changes(%)
Other expenses	18,902	22,554	(16.19)

f. Finance costs:

Particulars	FY26	FY25	Changes(%)
Finance costs	1,888	1,433	31.75

g. Fixed assets:

Particulars	FY26	FY25	Changes(%)
Property, plant and equipment	63,634	61,845	2.89
Capital work-in-progress	19,583	5,496	256.31
Other intangible assets	-	-	-
Intangible Assets under Development	162	-	-

h. inventories:

Particulars	FY26	FY25	Changes(%)
Raw material	2,041	2,241	(8.92)
Work in progress	594	424	40.09
Finished goods and Work-in-Progress	833	550	51.45
Stores, Spares and Others	3,262	2,568	27.02
Total	6,730	5,783	16.39

i. Trade receivables:

Particulars	FY26	FY25	Changes(%)
Trade receivables	15,016	8,125	84.81

j. Cash flow:

Particulars	FY26	FY25	Changes(%)
Net cash flow from operating activities	8,317	12,512	(33.52)
Net cash flow from investing activities	(23,331)	(14,978)	(55.76)
Net cash flow from financing activities	15,258	2,055	642.48
Net increase / decrease in cash and cash equivalents	244	(410)	159.51

Changes in Financial ratios

Particulars	FY26	FY25	Changes (%)	Reason for Variation for the change by more than 25% to the previous FY
Debtors turnover (Days)	63	41	53.65	Due to delay in the payments from key customer
Inventory turnover (Days)	34	37	(8.10)	NA
Interest Coverage Ratio (Times)	6.76	7.96	(15.07)	NA
Current Ratio (Times)	1.60	2.22	(27.92)	Due to increase in borrowings for our expansion project at Bokaro
Net Debt/Equity Ratio (Times)	0.45	0.19	136.84	Due to increase in borrowings for our expansion project at Bokaro
Return on Capital Employed (%)	12.03%	12.79%	(5.94)	NA
Return on Equity (%)	10.51%	10.73%	(2.05)	NA
Operating EBITDA margin (%)	24.8%	23.6%	5.08	NA
Net Profit Margin (%)	12.14	11.91	1.93	NA
Return on Net Worth	10.51	10.73	(2.05)	Due to increase in average net worth in line with the increased net profit.

Key financial ratios

Particulars	2025-26	2024-25
EBITDA/Turnover (%) (before exceptional items)	27.02%	25.17
EBITDA/Net interest	8.79	9.81
Return on equity ROE (%)	10.05%	10.21%
Book value/share (Rs.)	1	1
Earnings per share (Rs.)	3.59	3.33
Operating profit margin (%)	24.80%	23.60%
Net profit margin (%)	12.14%	11.91%
Debt-equity ratio	0.46	0.25

Risk and mitigation

BMW Industries Limited adopts a balanced and proactive approach to risk management, with a strong emphasis on building a resilient and efficient business model capable of adapting to evolving market dynamics. The Company seeks to minimise uncertainties through forward-looking planning, continuous monitoring of key operational and financial parameters, and data-driven decision-making. Regular risk assessments are conducted to identify potential challenges, enabling timely implementation of appropriate mitigation measures. This structured approach supports business continuity, strengthens financial stability, and reinforces the Companys commitment to sustainable long-term growth.

Risk	Description	Mitigation strategy
Raw material risk	Fluctuations in steel prices may adversely affect profitability and pose challenges to the Companys operational performance.	BMWIL has limited exposure to raw material price volatility, as key inputs are supplied by customers on a free-of-cost basis, while fluctuations in zinc prices are passed through to customers. This structure effectively safeguards the Company from the impact of raw material price movements.
Infrastructure and Logistics risk	Logistical challenges may lead to increased costs and potential delays in delivery timelines, impacting overall operational efficiency.	A dedicated fleet of over 130 trailers & trucks, complemented by strategically located plants, enables efficient, reliable, and cost-effective logistics operations.
Financial risk	Market volatility may adversely impact cash flows and create pressure on working capital management.	Fixed-fee contracts provide stable margin visibility, while FY25 expansions were supported through a balanced mix of internal accruals and prudent debt utilisation.
Quality risk	Failure to consistently meet prescribed quality standards may impact customer satisfaction and operational performance.	A sustained focus on technology adoption, workforce training, and process efficiency ensures consistent product quality and reliability.
Contract renewal risk	Delays or unfavourable terms in the renewal of key customer contracts may impact business continuity and revenue visibility.	BMWIL has successfully extended key contracts, including the tubes contract until 2027, while negotiations for other agreements are in progress, with management expressing confidence in securing timely renewals.
Market demand risk	Variations in demand or an oversupply in the industry may impact volumes and pricing dynamics.	The Companys value-added processing model mitigates exposure to demand-supply imbalances, while continued growth in the pipes and tubes segment is expected to further ease concerns around industry oversupply.

internal control systems

The internal control and risk management system is structured and applied in accordance with the principles and criteria established in the corporate governance code of the organisation. It is an integral part of the general organisational structure of the Company and Group and involves a range of personnel who act in a coordinated manner while executing their respective responsibilities. The Board of Directors offers its guidance and strategic supervision to the Executive Directors and management, monitoring and support committees. The control and risk committee and the head of the audit department work under the supervision of the Board appointed Statutory Auditors.

Human resource

The Company believes that its intrinsic strength lies in its dedicated and motivated employees. As such, the Company provides competitive compensations, an amiable work environment and acknowledges employee performance through a planned reward and recognition programme. The Company aims to create a workplace where every person can achieve his or her true potential. The Company encourages individuals to go beyond the scope of their work, undertake voluntary projects that enable them to learn and devise innovative ideas. As of March 31, 2026, the total number of employees in the Company was 883

Cautionary statement

This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be ‘forward looking statements within the meaning of applicable securities laws and regulations. Forwardlooking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events.