Deem Roll-Tech Ltd Management Discussions

Introduction

The company was originally incorporated as ‘Deem Roll-Tech Private Limited on 1^st May, 2003 at Ahmedabad, Gujarat as a private limited company under the provisions of the Companies Act,1956, with the Registrar of Companies, Gujarat, Dadra & Nagar Haveli. The company was converted into public limited company pursuant to the special resolution passed by the members of the company at their meeting held on 12^th February, 2008 and the name of the company was changed to ‘Deem Roll-Tech Limited. Consequent upon conversion of the company from private limited to public limited a fresh certificate of incorporation dated 4^th March, 2008 was issued by the Registrar of Companies, Gujarat, Dadra & Nagar Haveli. After the successful initial public offering of the 22,68,000 equity shares, total 83,37,273 equity shares of the company are listed and traded on the National Stock Exchange of India Limited EMERGE Platform [NSE EMERGE] w.e.f. 27^th February,2024. The Stock Code is: DEEM and the ISIN is INE586O01011.

Indian Economy

India currently ranks as the fourth largest economy globally, among the worlds top 10 largest economies, with GDP of USD 4.19 trillion in 2025. The Indian economy is predicted to experience continued strong growth in the coming years, solidifying its position as a major global economic force. Forecasts suggest India will be the fastest-growing major economy, with projections indicating a GDP of USD 7.3 trillion by 2030 and the potential to become the worlds third-largest economy.

Indian Steel Industry

The steel production and consumption are frequently seen as measures of a countrys economic development and therefore the steel sector has always been at the forefront of industrial progress and that can be considered is the foundation of any economy. Indias steel industry is witnessing strong growth, driven by increased domestic consumption and enhanced production capacity. In the fiscal year 2024-25, Indias finished steel consumption reached 136.29 million tonnes. As the worlds second largest steel producer after China, Indias steel sector is supported by major players including Tata Steel, JSW Steel and Steel Authority of India.

The National Steel Policy, 2017 [the NSP], is a strategic initiative of the Government of India for the steel sector, aims to develop a globally competitive and technologically advanced steel industry. The key targets under the NSP for financial 2030-31 include: [a] Crude steel capacity- 300 million tonnes [b] Crude steel production/demand - 255 million tonnes [c] Finished steel production/demand -230- million tonnes [d] Per capita finished steel consumption- 160 kg The NSP framework emphasizes on domestic production, import substitution, enhanced production quality, infrastructure development, research and development and adoption of the advanced technologies through various initiatives like the Steel Research and Technology Mission of India.

Steel Rolls Industry

Steel Rolls [the rolls] are tailor-made as per the requirements of the customers. Since a major quantity of the cast rolls and forged rolls are manufactured for use in the rolling mills of the steel industry, the roll industry is closely related to the steel industry. The growth in the steel industry offers good potential for rolls manufacturers. Accordingly, the demand for rolls will be directly related to capex plans of the iron and steel industry and also the demand for steel.

Overview of Our Business

We are one of the leading manufacturers of high-quality rolls in India. We have 3 Manufacturing Units, two in Gujarat, located at GIDC Chhatral, Tal. Kalol, Dist: Gandhinagar and at Village Ganeshpura, Taluka Kadi, Dist: Mehsana and one in West Bengal at Dadpur, Hoogly with the total manufacturing capacity of 6,600 MT finished long product rolls per year. On completion of the expansion project at Ganeshpura Unit and starting of the commercial production of flat product rolls, our aggregate manufacturing capacity will increase to total 8,100 MT finished rolls per year. We manufacture steel and alloy rolls from steel scrap, roll scrap, pig iron, nickel, ferro molybdenum, other ferro alloys, resin coated sand, etc. conforming to international standards.

We manufacture customer based and different kinds of rolls which find their application in long product mills, flat product mills and seamless tube rolling mills.

Our manufacturing units consist of engineering and design, mold making, melting, casting, machining and dispatch sections backed by related quality testing and assurance equipment. Presently, we use static cast and centrifugally cast technology for the manufacturing of rolls. We are capable of casting a single roll upto 15 MT. We are well equipped with in-house testing laboratory to test the products as per quality standards and relevant chemical composition. The finished products are also subject to various physical and chemical tests to ensure that they meet the required specifications.

We share a good client relationship with our customers and we receive majority of our business from repeat clients. Our company export its products to more than 10 countries including USA, Germany, Europe, Middle East, Oman, Saudi Arabia, South Africa, Nepal and Bangladesh. We have our marketing personnel in 8 cities in India such as Pune, Raipur, Mumbai, Bhilai, Bangalore, Durgapur, Kolkata and Vishakhapatnam. These marketing personnel work from their homes thus there is reduction of the fixed cost on office rental and other administrative cost but enable us to have presence across geographies.

We have a dedicated design and development team of engineers along with the dimensional inspection laboratory and the calibration laboratory. We believe that our engineering expertise and technology driven manufacturing processes have enabled us to deliver our products to our customers in accordance with their designs and specifications at a cost competitive manner.

Our Competitive Strengths

Our competitive strengths can be stated in brief as below.

[1] Well established manufacturing facility designed to serve multiple products range [2] Diversified and established products [3] Quality assurance and accreditations [4] Diversified customer base and long-standing relationship with our customers [5] Healthy financial conditions [6] Experienced Promoter Directors with extensive domine knowledge

Our Strategies

Our strategies can be stated in brief as below.

[1] Expand manufacturing capacity at our existing facilities [2] Focus on advanced technology and on improving operational efficiencies [3] Increase our market share internationally by leveraging our export channels products

Expansion Project

It is stated that as part of our growth strategy, we have undertaken expansion project for manufacturing of flat product rolls at our Ganeshpura Unit. The construction of factory shed is completed, and the works of office building and utilities are in progress and will be completed soon. The orders for the major, minor and auxiliary equipment/ machineries were placed, which have started arriving at the site and are being installed. The installation of the furnace and crane and other major auxiliary system is complete. The systems tests and trial runs are being conducted. It is expected that after completion of the tests and trial runs the commercial production will commence from 29^th September, 2025.

It is stated that due to the delayed completion of the factory shed and other buildings, for the reasons beyond the control of the management and consequent delay in installation of the machineries, the completion of the project, trial runs and commencement of the commercial production are delayed.

Our Performance

During the year under review, the production of 5593.07 MT finished rolls and capacity utilization of 84.74% has been achieved as compared to the production of 6203.70 MT finished rolls and capacity utilization of 94% achieved in the previous year. During the year under review total revenue of Rs. 9474.09 lakhs have been achieved as compared to total revenue of Rs. 10143.36 lakhs achieved in the previous year. During the year under review net profit after tax of Rs. 289.94 lakhs have been achieved as compared to net profit after tax of Rs.781.25 lakhs achieved in the previous year. During the year under review the exports turnover of Rs. 2402.53 lakhs have been achieved, which is 25.30% of the total revenue, as compared to the export turnover of Rs. 1756.61 lakhs, achieved during the previous year, which was 17.61 % of the total revenue. During the year under review the export turnover has increased by 36.77 % compared to the export turnover of the previous year. During the year under review, the domestic competition compelling lowering of the prices of our rolls and the breakdown of the furnace at Chhatral Unit, have adversely affected the performance. During the current year the furnace at Chhatral Unit has been replaced and all actions and measures have been taken for improving the performance.

Segment-wise Performance

Your company does not operate in multiple segments. Hence, comments on segment-wise performance are not required.

Human Resources

We believe that our employees are our key contributors to our success. We have technically skilled and highly trained workforce for various areas of our activities. As on 31^st March, 2025, we had 255 employees, bifurcated by functions as below.

[1] Management Staff 5 [2] Office Executives 15 [3] Sales Executives- 8 [4] Factory Staff 59 [5] Quality Control Managers- 2 [6] Factory Workmen -165 The industrial relations at the companys plants and offices have remained cordial throughout the year under report.

Risk Management

We have put in place a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. The objective of the mechanism is to minimize the impact of risks identified and taking advance actions to mitigate them. The Board of Directors have approved the Risk Management Policy, which is placed on the website of the company www.deemrolls.com

Internal Control Systems

Your company has adequate and efficient internal control systems, commensurate with the type and size of its operations and are further supplemented by internal audits carried out by the internal auditors on quarterly basis and review of their reports by the audit committee. Your company has put in place proper internal control systems which provide protection to all its assets against loss from unauthorized use and ensures correct reporting of transactions.

Details of the Key Financial Ratios

The details of key financial ratios with details of significant changes [change of 25% or more] are as under