Dhatre Udyog Ltd Management Discussions

Managements discussion and analysis of the financial condition and results of operations include forward looking statements based on certain assumptions and expectations of future events. The Company cannot assure that these assumptions and expectations are accurate. Although the Management has considered future risks as part of the discussions, future uncertainties are not limited to Management perceptions.

1. Review of Indian Economy:

The Indian economy demonstrated exceptional resilience in FY 2025-26, registering a robust Real GDP growth rate of 7.7% to establish itself as the fastest-growing major global economy. This stellar performance was driven by vibrant domestic demand, increased private consumption, and the governments sustained focus on infrastructure capital expenditure. Looking forward to FY 2026-27, Indias macroeconomic momentum is projected to maintain a strong growth trajectory of 6.7% to 6.9%, supported by stabilizing input costs and rising industrial capacity utilization. For further economic updates, visit the Reserve Bank of India or Ministry of Finance portals.

Industry Structure and developments:

The secondary steel and infrastructure sectors serve as critical pillars for national economic growth. Historically, the secondary steel industry encompassing the manufacturing and processing of long products like TMT rebars, wire rods, and merchant mill structures has directly fed the domestic construction, housing, and infrastructure pipelines. During the past financial year, the industry navigated a mixed operating environment. While total domestic consumption of structural inputs grew, the secondary processing segment faced systemic headwinds. Margins across traditional manufacturing lines were compressed due to volatile raw material pricing, rising energy tariffs, and increased competition from primary integrated producers with larger economies of scale.

2. Strength, Opportunities, Threats Strength:

- Established operations and proven track record

- Smooth flow of operations and Business Model

- Experienced Management Team

- Satisfied customer with quality and service

Opportunities:

- Potential to provide other value-added services

- Expanding new geographical area

- Enhancing functional efficiency

- Opportunities in Indian Market

- Government thrust for growth in Indian Economy will boost thelogistics & Infrastructure Industry

Threats:

- Increased Competition from Big Players

- Change in Government Policies

- Rising labour wages

- Margins may be constrained in the future

- Thereare no entry barriers in our industry which puts us to the threat of competition from new entrants

3. Segment Wise - Product wise performance:

During the year under review, the Company operated in only one segment which is production of Iron and Steel Products.

Details of Segment wise Revenue of the Company:

• Iron & Steel Products: The Total Revenue from Iron & Steel Products is Rs. 912.18 Lakhs for the Financial Year 2025-26.

4. Outlook

The Continual growth in the Indian sector is necessary to give necessary support to the industry. The company is making all efforts to accelerate the growth of its business. It expects to improve its position in the market by focusing in the technologically advanced and more profitable market segment and working aggressively in the area of productivity, efficiency and cost reduction.

The future of the company looks positive as we shift our focus from heavy manufacturing to real estate development. Now that we have completely closed the old Vizianagaram factory and sold off its land and machinery, the company has a clean balance sheet with healthy cash reserves. We are now planning to use this money to start real estate and housing projects on our land in Jamshedpur. Indias real estate market is growing fast, and there is high demand for new buildings in industrial areas like Jamshedpur. By choosing smart, low-risk business models, we plan to keep our costs low and build a steady, safe source of income. Our main goal is to finish projects on time, follow all government real estate rules, and bring long-term value to our shareholders.

5. Risks and Concerns

The Industry is exposed to the following risk and concerns:

• Capital and labour intensive industry

One of the main problems faced by steel industry in India is that it is highly capital and labour intensive. As a result, arranging for finances becomes a challenge. Getting a business loan of such a huge amount to set up a steel plant is a difficult task. As mentioned above, the government is helping steel makers by allowing FDI.

Apart from finances, the steel industry is also a labour-intensive industry. While labour is available, labour management becomes another challenge for many steel companies.

• Demand prediction

Yet another challenge of the steel industry is fluctuating demand. As it fluctuates from time to time, it becomes difficult for steel makers to predict the demand and produce accordingly. This results in delayed returns on investment.

• Logistics related challenges

Like most other industries, logistics, and supply chain management remain key areas of challenge for the steel industry. The main raw materials for making steel are iron ore and coking coal. Both these are bulk materials while the finished product i.e., steel is also a bulk material. Meaning, they are not regular goods to be transported and need to be handled differently.

6. Internal Control systems and its adequacy

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as Statutory Auditors.

7. Discussion on financial performance of the Company with respect to operational performance.

• Share Capital

The Paid-up Share Capital of the Company as on 31st March, 2026 is Rs. 10,89,54,500/- (Rupees Ten Crore Eight-Nine Lakhs Fifty-Four Thousand Five Hundred Only) divided into 10,89,54,500 (Ten Crore Eight-Nine Lakhs Fifty-Four Thousand Five Hundred) Equity Shares of Rs. 1/- (Rupees One only).

• Reserves and Surplus

The reserves and surplus is Rs. 3,687.97 Lakhs as on the end of the current year.

• Total Income

During the year under consideration, the total income was 1,141.47 Lakhs as against Rs. 14,459.79 during the previous year.

8. Material developments in Human resources / industrial Relations front, including number of people employed

At the core of our corporate success is a highly effective and strategically aligned workforce. By adopting benchmarked industry standards, we continue to position the Company as an employer of choice, allowing us to attract premium talent and deliver superior quality service to our customers. Our human capital represents a deliberate synergy of seasoned industry veterans and dynamic young professionals, providing a unique dual advantage of operational stability and high-velocity growth. Enabled by structured workflows, a highly skilled talent pool, and a visionary management team, the Company remains robustly equipped to execute its long-term growth blueprints.

9. Key Financial Ratios:

Ratios	2025-26	2024-25	Variance (in%)	Reasons for Variance
Current Ratio	28.65	27.98	2.39%	-
Debt-Equity Ratio	NA	NA	NA	NA
Debt Service Coverage Ratio	NA	NA	NA	NA
Return on Equity Ratio	-4.58%	3.67%	-224.82%	Decline in profits during the year
Inventory/turnover ratio	2.00	22.02	-90.92%	No inventory at the year end
Trade Receivables turnover ratio	0.34	4.48	-92.43%	Lower revenue during the year
Trade payables turnover ratio	50.72	53.47	-5.14%	-
Net capital turnover ratio	0.28	3.01	-90.83%	Lower revenue during the year

10. Cautionary Statement

This report contains forward- looking statements based on the perceptions of the Company and the data and information available with the company. The company does not and cannot guarantee the accuracy of various assumptions underlying such statements and they reflect Companys current views of the future events and are subject to risks and uncertainties. Many factors like change in general economic conditions, amongst others, could cause actual results to be materially different.