Electrosteel Castings Ltd Management Discussions

Management Discussion and Analysis Report

A. INDUSTRY STRUCTURE AND DEVELOPMENT

• Overview

The Company is engaged in the business of manufacturing Ductile Iron (DI) Pipes, Ductile Iron Fittings (DIF) and Cast Iron (CI) Pipes. The Company is the first to set up a Ductile Iron Pipe Plant in India. Today, it is Indias leading pipeline solution provider. It has a strong brand presence around the Globe. Since 1994, the Company has maintained its edge over its competitors. Owing to the high reliability and durability of its products, the Company has always remained the distinct choice for water engineers and domain experts in Ductile Iron Pipes and Fittings.

• Industry Outlook Drinking water sector

The Government of India has significantly scaled up its efforts in the water sector through flagship initiatives such as the Jal Jeevan Mission-2 (JJM-2) and AMRUT 2.0, both of which are reshaping the countrys water infrastructure landscape.

Jal Jeevan Mission (JJM), launched in August 2019, envisages provision of Functional Household Tap Connections (FHTCs) to every rural household, ensuring supply of adequate quantity of potable water of prescribed quality on a regular and long-term basis. As per the latest updates in 2026, more than 15 crore rural households have been provided with tap water connections, taking overall coverage to around 80% of rural households, as against about 3.23 crore households (approximately 17%) at the time of launch.

In view of the substantial progress achieved and the need to ensure universal and sustainable service delivery, the Government of India has extended the Mission period up to 2028. After a pause in 2025-26, this year a fresh allocation of Rs. 67670 Crore of central assistance has been made, with an enhanced total outlay of approximately Rs. 8.69 lakh crore.

The implementation and scalability phase represents the current intensive execution window of AMRUT 2.0 as of 2026, where the mission has transitioned from preliminary administrative planning to a massive, nationwide rollout of physical infrastructure. This phase is characterized by the active construction of nearly 8,736 approved projects with a total capital expenditure exceeding Rs. 1.74 lakh crore, specifically designed to ensure universal water security across all 4,378 statutory towns in India. A core technical priority in this stage is the deployment of high-durability infrastructure, with a strategic preference for Ductile Iron (DI) pipes due to their superior pressure ratings and longevity.

• Water for Irrigation

Traditionally, irrigation has been dominated by canal-based systems. However, there is a growing shift toward piped irrigation networks across multiple states. Piped irrigation offers significant advantages, including reduced water losses due to seepage and evaporation, faster and controlled water delivery, lower land acquisition requirements and improved adaptability to varying terrain conditions. Additionally, these systems require less maintenance compared to open canals.

Ductile iron pipes are increasingly being used in major irrigation projects, particularly for bulk water conveyance and distribution networks. This trend is expected to strengthen further as states continue to modernise irrigation infrastructure.

• Sewage conveyance

With growing urbanisation, sewage and wastewater management are becoming very important. DI pipe is already a preferred material, particularly for sewerage force mains. In addition, initiatives such as Swachh Bharat Mission and Namami Gange continue to strengthen wastewater management, sanitation infrastructure, and river rejuvenation efforts. There is also increasing adoption of wastewater recycling and reuse systems.

• Water for Industries

Indias industrial sector continues to expand, driving higher demand for water across manufacturing, power generation, and process industries. Industries require reliable, high-strength pipelines capable of handling high pressures and varying water qualities. To comply with stricter Environmental norms, Zero Liquid Discharge (ZLD) technologies are being adopted. Ductile iron pipes, with their durability and performance characteristics, are well-suited for such applications.

The convergence of these factors indicates a strong and sustained demand outlook for ductile iron pipes in India.

• Demand Drivers for DI Pipes

The following are the key demand drivers for Ductile Iron (DI) pipes:

1. Government programmes such as JJM 2.0, AMRUT 2.0 and other water infrastructure initiatives continue to drive demand for DI pipes. JJM has been extended to December 2028 with a total outlay of Rs. 8.69 lakh crore. A total outlay Rs. 67670 Cr. has been declared for this year.

2. AMRUT 2.0 continues urban water and sewerage development with FY 2026-27 allocation of Rs. 8,000 crore.

3. Irrigation, industrial water, wastewater reuse and river-linking projects continue to support demand for DI pipelines.

4. M-CADWM under PMKSY (Rs. 1,600 crore) promotes underground pressurised irrigation networks using SCADA and IoT, creating new opportunities for DI pipes.

5. Urban Challenge Fund (Rs. 1 lakh crore Central Assistance leveraging nearly Rs. 4 lakh crore investment) will support water supply, sewerage, storm-water drainage and water grids.

6. Growing adoption of 24x7 water supply systems is accelerating replacement of ageing pipelines with durable DI pipes.

7. NRW/UFW reduction programmes are driving replacement of ageing pipelines.

• Key Upcoming Schemes & Projects - FY 2026-27

• JJM 2.0: Extended to Dec 2028; outlay Rs. 8.69 lakh crore; FY26-27 allocation Rs. 67,670 crore.

• AMRUT 2.0: FY 2026-27 allocation Rs. 8,000 crore.

• Ken-Betwa Link: Daudhan Dam is progressing; Rs. 1,906 crore allocated for river interlinking.

• PMKSY: Rs. 7,137 crore allocation for irrigation projects.

• M-CADWM: Rs. 1,600 crore pilot modern irrigation programme.

• Urban Challenge Fund: Rs. 1 lakh crore Central Assistance leveraging ~ Rs. 4 lakh crore.

• FY 2025-26 vs. FY 2024-25

The Companys Revenue from Operations was reported at Rs. 5032.54 Crore during the year under review as compared to Rs. 6745.88 Crore reported in the previous year. There was a marginal decrease of around 1% in Export Sales from Rs. 1132.69 Crore in the FY 2024-25 to Rs. 1121.41 Crore in the FY 2025-26. The Companys profit in the FY 2025-26 was Rs. 131.34 Crore as against profit of Rs. 712.12 Crore in the FY 2024-25.

B. PRODUCT WISE PERFORMANCE

• Ductile Iron (DI) Pipes

The Ductile Iron Pipe Plant, produced 5,36,336 MT of DI Pipes during the year 2025-26 compared to 732,004 MT in 2024-25. The year opened with buoyant demand, but the market later turned sluggish. This domestic contraction stemmed from a temporary lull in government water infrastructure spending, which depressed volume off-take and severely lowered sales prices.

The Production decreased due to stabilization issues in Pipe Plants as well as reduced demand in Quarter 3 & 4.

The main raw materials used in the production of DI Pipes are Iron Ore and Coke. Iron Ore for Eastern India operation is mainly procured from Odisha and Jharkhand whereas, for Southern India, Iron ore is mainly procured from Karnataka. Coke is captively produced at Haldia for Eastern India operation and captively produced at Srikalahasthi unit for Southern India operation. Coking coals are imported mainly from Australia. The DI Pipes produced by the Company are sold in India and globally to around 130 countries spreadover 5 continents.

• Blast Furnace

The Blast Furnace has produced liquid metal of 6,40,678 MT during the FY 2025-26 compared to 752,500 MT in the FY 2024- 25.

• Cast Iron (CI) Pipes

The Cast Iron Pipe Plant, with a total capacity of 90,000 TPA produced 42,795 MT of CI Pipe during the Financial Year 2025-26 compared to 41,431 MT in the Financial Year 2024-25. Improved performance is due to favorable order book and market situation. The capacity utilisation was higher compared to previous year because of higher demand and unhindered condition for production.

The main raw material used in the production of CI Pipe is Pig Iron, which is obtained from domestic sources. The CI Pipe produced by the Company is sold mainly to the states in Southern India.

• DI Fittings & Accessories

The Company produced 18,090 MT of DI Fittings in the Financial Year 2025-26 as against 22,568 MT in the Financial Year 2024-25.

• Power Plant

With 12 MW power plant & 5 MW Power Plant together, Haldia has generated 121.63 million units of power, out of which 19.40 million units were transmitted to SEB grid in 2025-26 as against 128.95 million units generation and transmission of 21.05 million units in 2024-25.

Khardah plant generated 22.86 Million units in 2025 -26 against 28.57 million units in 2024 -25.

During the year under review, at Srikalahasthi Unit, the power generation from both 12.0 MW and 7.5 MW CPPs put together was 124.50 million units as against 157.99 million units in the FY 2024-25.

• Captive Coke Oven Plant

The Coke Oven Plant at Haldia, produced 157,235 MT of Metallurgical Coke in 2025-26 against 149,231 MT in 2024-25, mainly for captive consumption in Blast Furnace at Khardah Works.

The Coke Oven Plant at Srikalahasthi unit, has produced 1,91,820 MT of Metallurgical Coke in 2025-26 against 230,637 MT in 2024-25, mainly for captive consumption in Blast Furnace.

• Ferro Alloy Plant

The Companys Ferro Alloy Plant at Haldia Works has produced Prime Silicon Manganese of 16,379 MT in 2025-26 against 14,725 MT in 2024-25. The production increased mainly due to power availability.

Ferro Alloy Plant at Srikalahasthi Unit has produced Ferro Silicon of 15,741 MT in 2025-26 against 13,2941 MT in 2024-25.

• Cement Plant

Cement Plant has produced Portland Slag Cement of 35,050 MT in 2025-26 compared to 45,196 MT in 2024-25. Due to sluggish market conditions particularly for Slag Cement and consequent lower contribution, cement production has been lowered down during the year under review. Ground Granulated Blast Furnace Slag (GGBS) has been produced by utilising the cement mills.

GGBS Production in 2025-26 is 29,222 MT against 36,312 MT in 2024-25.

• Raw Materials Management

The Companys manufacturing facilities are spread across six locations in India. The Company sources over 60% of its essential materials such as iron ore lumps, fines, pellets, limestone, and manganese ore, directly from government- regulated mines. This ensures full visibility, traceability, and adherence to environmental and labour regulations throughout the supply chain.

The Company employs efficient in plant raw material processes across its integrated facilities to enhance cost efficiency and quality control. The manufacturing facilities are also equipped with Waste heat recovery systems, which harnesses waste heat from the Coke Oven and Sponge Iron plants to generate electricity.

• Exports

FY 2025-26 remained a challenging year for the Companys export business. Demand across several international markets softened as infrastructure investments were deferred amidst fiscal pressures, geopolitical uncertainties, war situation, restrictive trade practices and heightened competitive activities continued to influence customers buying decisions. These factors resulted in lower export volumes compared with the previous year.

Against this backdrop, the Company prioritised value over volume by focusing on profitable markets, strengthening relationships with key customers and enhancing service levels. Simultaneously, efforts were intensified to expand the Companys presence in new geographies and widen its customer base. These initiatives are expected to improve market diversification and support sustainable export growth in the long term.

• Quality and Approvals

Over the past thirty-one years, The Company has consistently demonstrated its commitment to achieving world-class quality across all products and services. This commitment, rooted in the principle of "Quality Right the First Time," continues to guide our decisions, operations, and long-term strategy. The Companys products are certified by globally renowned and respected certifying bodies, like, BSI (UK), DVGW (Germany), UL (USA & Canada), FM (USA & Canada), BV (Italy), CSTB (France), OVGW (Austria), IGH (Croatia), SASO (Saudi Arabia), SVGW (Switzerland), MEWRE & MPW (Kuwait), NAMA (Gulf Countries) etc. These certifications are a testament to companys credibility, technical excellence and unwavering focus on stakeholder satisfaction. These certifications are not achievements, but the responsibilities that The Company upholds every day.

Esteemed auditors from leading certification bodies around the world regularly visit our manufacturing facilities to conduct comprehensive surveillance audits. Most recently, audit teams from BSI (UK), UL (USA), FM (USA), MPA NRW (Germany), OFI (Austria) and BV (Italy) undertook detailed evaluations of companys operations. The organization successfully met all audit requirements, reinforcing companys stand as a trusted provider of world-class quality products.

The Company remains steadfast in its commitment to long-term sustainability by systematically integrating environmental, social, economic and qualitative considerations across the entire life cycle of its products and services. During the year, the Company successfully renewed its Quality Management System certification in accordance with ISO 9001 and its Occupational Health and Safety Management System certification as per ISO 45001, reaffirming its focus on operational excellence, process consistency and the health and safety of employees and contractors. In addition, the Company continues to uphold its Environmental Management System (ISO 14001) and Energy Management System (ISO 50001), demonstrating a sustained commitment to environmental stewardship, efficient energy use and continual performance improvement. The Company also remains fully compliant with Social Accountability requirements under SA 8000, reflecting its dedication to ethical business practices, respect for human rights and the promotion of fair and safe working conditions across its operations and value chain.

OPPORTUNITIES AND THREATS

• Opportunities

> Government Infrastructure Program: Initiatives such as JJM-2 and AMRUT 2.0 continue to provide strong demand visibility across both rural and urban segments.

> Urban Infrastructure Upgradation: The push for 24x7 water supply and NRW reduction is driving replacement of ageing pipelines in cities as well as new expansion.

> Growth in Industrial and Irrigation Sectors: Industrial expansion and modernisation of irrigation systems are creating additional demand for durable pipeline solutions.

> Export Potential: Indian manufacturers are well-positioned to cater to demand in international markets, including Africa, Southeast Asia, the Middle East and developed economies.

> Technological Advancements: Advancements in jointing systems like restrained joint, coatings and product diversification are enhancing the application scope of DI pipes.

> Sustainability Focus: Increasing emphasis on ESG and environmental compliance is supporting the adoption of durable and recyclable materials such as DI pipes.

• Threats

> Raw Material and Energy Cost Volatility: The industry is facing Raw Material and Energy Cost Volatility from time to time. Fluctuations in iron ore, coal and energy prices can impact production costs and margins.

> Competition from Alternative Materials: Competition from Alternative Materials like PVC, HDPE, Steel pipes and concrete pipes continues to compete in various application segments.

> Project Execution Delays: Project Execution Delays due to delays in approvals, funding or tendering processes may impact project timelines.

> Environmental and Regulatory Compliance: Stricter environmental norms may require additional investments in compliance. Regulatory measures like the imposition of CBAM in the European market will have a considerable impact on margins.

> Global Economic Slowdown: Global economic slowdowns due to prevailing geopolitical tensions are affecting global economic conditions and can affect pipe demand.

> Increasing Market Competition: Increasing Competition from the entry of new players and the expansion of existing capacities is intensifying competition in the market.

Indias water infrastructure sector is undergoing a structural transformation, supported by strong policy initiatives and increasing investment. The focus is gradually shifting toward efficiency, sustainability and long-term asset performance.

This evolving landscape provides significant growth opportunities for the ductile iron pipe industry. With its inherent advantages of durability, strength and long service life, DI pipes are expected to remain a preferred choice for water infrastructure projects.

Collectively, these ensure sustained long-term demand for water infrastructure and pipelines across rural and urban India. Electrosteel continues to:

• Protect and consolidate market share;

• Focus on cost optimisation, operational efficiency and prudent pricing;

• Align capacity utilisation with evolving demand;

• Position itself strongly for the next upcycle in funding and demand;

C. RISKS AND CONCERNS

This has been dealt with separately in the section on "Risk Management".

D. FINANCIAL PERFORMANCE

The highlight of the operations for the year ended 31 March, 2026 and 31 March, 2025 are as under:

a) Financials

		(Rs. in Crore)
Particulars	Year ended 31 March, 2026	Year ended 31 March, 2025
Gross Sales & Income from Operations	5032.54	6745.88
Profit before Interest, Depreciation & Exceptional Items	499.48	1116.00
- Finance Expenses	126.72	141.81
- Depreciation	149.40	127.47
Profit before Exceptional Items	223.36	846.72
- Exceptional Items	38.38	-
Profit before Tax	184.98	846.72
Tax Expenses	53.64	134.60
Profit after Tax	131.34	712.12

b) Companys Sales mix

		(Rs. in Crore)
Particulars	Year ended 31 March, 2026	Year ended 31 March, 2025
Revenue from sale of Products
D.I. Spun Pipes	3221.20	5342.01
Ferro Products	246.06	181.60
D.I. Fittings	281.90	322.15
C.I. Spun Pipes	286.56	308.76
Cement	0.28	0.51
Others	967.14	563.82

Other Financial Matters

During the year:

1. Net Worth of the Company increased to Rs. 5683.42 Crore as at 31 March, 2026 from Rs. 5637.17 Crore as at 31 March, 2025.

2. Gross Fixed Assets including Work in Progress as at 31 March, 2026 is increased to Rs. 4120.18 Crore compared to from Rs. 4156.06 Crore as at 31 March, 2025.

E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of operations. It ensures the efficiency of the operations, financial reporting and statutory compliances. These systems are reviewed through risk control matrix, various MIS wherever considered necessary. Apart from the internal control system, an Independent Internal Auditor also reviews all activities in a systematic and structured manner. The Audit Committee regularly reviews scope, observations and suggestions of the Internal Auditors and takes the necessary corrective actions.

F. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company firmly believes that sustained growth and continuous success are driven by a committed and motivated workforce that delivers superior performance and enhanced productivity. This philosophy is reinforced through the Companys evolving human resource management systems and structured processes. Continuous efforts are made to strengthen employee capabilities at all levels of the Organisation through active engagement initiatives and ongoing learning and development programs. The Company also places strong emphasis on the optimal and effective utilization of its human resources.

A harmonious and trust-based relationship between the Management and the Unions has ensured stable and peaceful industrial relations during the year under review. This mutually respectful association, nurtured over the years, has significantly contributed to the smooth functioning of the Company. Notably, no man-days have been lost over decades due to industrial relations issues. All concerns and grievances are addressed amicably through constructive dialogue, counselling, participative forums and collective bargaining based on mutually agreed terms. The Company remains committed to strengthening its knowledge capital by continuously enhancing employee competencies and ensuring their effective deployment.

The Company continues to uphold high standards of social compliance and has been accredited with British Standards Institution certification under the SA 8000 framework. The SA 8000:2014 Fourth Surveillance Audit and subsequent Recertificate audit were successfully conducted during the Financial Year 2025-2026 and the certification has been recommended for continuation. The Company is also consistently undertaking initiatives to sustain excellence in Total Productive Maintenance (TPM).

The total number of employees as on 31 March, 2026 is 2890.

• Safety & Health

Occupational Health and Safety (OH&S) Management System is a core priority in our Company to ensure a safe and healthy workplace. Our existing management system aligns with statutory compliance and proactively works to eliminate hazards, minimize OH&S risks and achieve zero accidents and zero health impairments.

The system is consistently reviewed and improved through regular analysis, incorporating advancements in processes and technologies. Monitoring and compliance are ensured through MIS on a regular basis.

Key Initiatives by the Company:

> Hazard Identification and Risk Elimination:

A structured process has been established for identifying accidental hazards (HIRA) on a routine and proactive basis for both routine and non-routine activities. Safe Operating Procedures (SOPs), Kaizen, OPL and Poka-Yoke methodologies are utilized to reduce or eliminate risk levels.

> Workplace Risk Management:

A departmental/contractor-level safety risk register has been implemented to identify and eliminate workplace hazards. Safety committee meetings are conducted with the involvement of relevant departments for quick mitigation of high-level risks.

> Performance Monitoring:

The Company monitors all key OH&S performance indicators through a defined schedule. Outcomes are reviewed with concerned departments and corrective actions are taken accordingly.

> Emergency Preparedness:

On-site emergency plans and mock drills are conducted regularly. Evaluations are done post-drill to improve future emergency responsiveness.

> Health Check-ups:

Periodic, pre-employment and follow-up health check-ups are arranged for all employees as per statutory norms. Health camps are also organized for ECL families and local communities under CSR initiatives.

> Fall Protection:

A lifeline system has been installed and implemented at the crane bay, on top of the shed and at the pipe stack. This initiative aims to protect personnel from falls while working at height, thereby fostering greater confidence among employees in a safe working environment.

> Family Members Connect:

A "Family Members Connect" program has been initiated to enhance safety awareness among employees families. This program aims to empower family members to guide and remind their relatives to maintain safety in the plants work areas.

> Safety Training Programs:

Extensive training (induction/shop floor/in-house/external) is conducted to improve safety skills and awareness. Training effectiveness is assessed via feedback mechanisms.

> Plant Inspection Systems:

• Includes daily inspections, electrical and fire safety checks and scheduled safety walks by top management and OH&S teams. Any deviation from the standard is reported and reviewed in monthly safety meetings and MIS.

• QR Code displayed to strategic location for capturing and reporting of unsafe acts and condition through online system for all level of employee and its proper mitigation.

> Safety Audits:

• Interplant safety audit for improvement of our safety management system.

• Safety audits by competent external authorities are conducted to assess the safety management system and feedback is implemented for continuous improvement.

> Additional Measures & Employee Engagement:

Employees families are encouraged to participate in awareness programs and counselling sessions. Efforts are made to increase their awareness about health, hygiene and safety.

> Motivation of Employees:

Regular motivation and communication efforts are taken to align employees with the goal of a safe workplace.

> Safety Infrastructure Work:

• Initiatives have been taken to improve safety infrastructure, such as the installation of handrails at the crane bay, tray stand and pipe stand modifications. These actions aim to create a safer work environment and build safety confidence among employees.

• Exchange of MIS presentation and best safety practice system to all unit from improvement of our safety practice of all locations. Management information system represent all the safety related issues in different plants for enhancing of safety culture.

Being an ISO 45001:2018 and SA 8000:2014 certified company, the Company is always maintaining good practices of OH&S system and always trying to improve to it in every sphere.

• Environment

The Company has transitioned from a traditional Environmental Management System (EMS) to a more sustainable and integrated EMS approach. In view of the continuously evolving environmental requirements at both national and international levels including stricter regulations on greenhouse gas emissions, biodiversity conservation and the efficient utilization of natural resources the company has strengthened and adapted its environmental management practices.

The environmental policy has also been reviewed and updated considering the changing global environmental landscape. Recognizing that environmental responsibilities are closely linked with social governance, the organization has revised its environmental objectives to align with the expectations and requirements of relevant stakeholders.

Key initiatives undertaken include:

• Installation of Air Pollution Control Systems (APCS) at all major dust-generating points to ensure compliance with prescribed stack and fugitive emission standards. These systems are periodically inspected, cleaned, and monitored to maintain optimal operational performance.

• Installation of digital pressure drop indicators in the zinc dust filter area with an integrated alarm system for early detection of leakages, along with mechanized bag-cleaning facilities to enhance maintenance and efficiency of filter bags.

• Mobile water sprinkling tankers is purchased and operational within the plant premises and on nearby roads to combat air born dust.

• Water Sprinklers/Water mist system are installed near raw material yards, operational units and other strategic locations to control fugitive emissions from the plant.

• Stack, Fugitive Emission Monitoring, ETP Discharge Water Monitoring, Ground Water Monitoring, Ambient Air Monitoring is carried out through NABL accredited laboratories recognized under the Environment (Protection) Act, 1986, Air (Prevention and Control of Pollution) Act, 1981, Water (Prevention and Control of Pollution) Act, 1974 & to ensure emissions remain within permissible limits.

• Ambient noise levels are monitored in compliance with the Noise Pollution (Regulation and Control) Rules, 2000, with results analysed to guide corrective actions.

• To ensure that all treated water is recycled and reused within the plant, a Zero Liquid Discharge (ZLD) scheme is being implemented at Khardah Unit. The effluent from the Effluent Treatment Plant (ETP) is further treated in the Tertiary Treatment Plant through the installation of High Rate Solid Contact Clarifier (HRSCC), Dual Media Filter (DMF), Activated Carbon Filter, Ultra-Filtration (UF), and Reverse Osmosis (RO) systems. The treated water is then recycled back into the process for reuse.

• Additionally, a Sewage Treatment Plant (STP) has been installed to treat domestic effluent separately, and the treated water is reused for gardening and sprinkler purposes.

• Cement slurry handling system is upgraded by installation of filter press for handling sludge in an environmentally safe manner.

• Installation of re-circulation based Wheel washing system.

• LED lights are provided in the offices. Solar lights are provided in and around plant premises. Project is in progress for installation of 1000 KWp roof top solar panels for using of renewable energy.

• Under the ISO 14001:2015 Environmental Management System, all operational activities are evaluated through a detailed aspect-impact analysis, and appropriate mitigation plans are implemented for processes that have significant environmental impacts.

• Product Life Cycle Analysis (LCA) has been conducted to identify environmental stress points and improve resource efficiency.

• Operational Control Procedures (OCP) by regular inspections are undertaken to ensure safe handling and storage of hazardous and non-hazardous materials.

• Green Initiatives by year-round sapling plantation within and around the factory premises enhances the green cover. A green belt of native plant species acts as a natural barrier to dust and noise. Additional 7000 saplings have been planted to strengthen green belt around Khardah Unit.

• Water Conservation through upgraded wastewater treatment and recycling systems, the company actively pursues freshwater conservation as outlined in its Environmental Policy.

• Regular environmental training programmes are conducted based on the Training Needs Identification Matrix, ensuring employee competency in EMS practices and regulatory compliance.

• Environmental Awareness Events such as World Environment Day, World Earth Day, and World Water Day are celebrated with employee and community engagement activities like quizzes, drawing competitions, and plantation drives.

• A comprehensive energy management framework ISO 50001:2018 - Energy Management System is in place to reduce fossil fuel dependency and control greenhouse gas emissions. This aligns with the UN Sustainable Development Goals (SDGs) 2030 and Indias national climate commitments.

• Waste Minimisation

The Companys Waste Management Cell is dedicated to ensuring effective waste handling, storage, and disposal, strictly in accordance with statutory regulations and in collaboration with Pollution Control Board (PCB) approved vendors.

Key waste minimisation strategies include:

• 4R Strategy (Reduce, Reuse, Recycle, Reprocess): A core principle of the companys sustainable waste management practices.

• Packaging waste materials are reused and recycled across various operational applications.

• Installation of a canteen waste-based biogas plant promotes a circular economy by converting organic waste into energy. Through anaerobic digestion within a digester tank, the generated biogas is recovered and utilized as a sustainable fuel source for the canteen, effectively replacing fossil fuel-based resources.

• The company has completely banned the use of Single Use Plastics (SUP) and plastic carry bags below 120 microns within plant premises. Awareness campaigns are conducted regularly to ensure compliance, in line with the Plastic Waste Management Rules, 2016.

• Process waste recycling for by-products such as iron ore fines, coke fines etc are collected through pollution control systems are reprocessed through briquetting/agglomeration, reducing the need for virgin raw materials.

• Technological upgradation by continuous innovation and investment in technology enhance waste reusability and recycling.

• Awareness campaigns such as posters and communication material are displayed throughout the premises to promote responsible waste handling and discourage the use of harmful plastic materials.

• As an ISO 14001:2015 certified organisation, the company upholds a structured and systematic approach to environmental protection, ensuring sustainable development in balance with socio-economic needs.

• Corporate Social Responsibility (CSR)

In recent times, companies are expected to engage in responsible business conducts. CSR activity, for Electrosteel, is a setup of planned activities, taking into consideration the capabilities of the Company with a target on the significant impact to inspire its local community and near vicinities. The initiative of the Company is to strengthen its operating foundation and being engaged in ongoing efforts to contribute to the society by enhancing corporate values.

The Company takes into account issues of concern related to external stakeholders and also various range of programs that aim at Social & Environmental topics. The Companys code of conduct anchors its Ethics & Compliance affairs. It also creates and implements community-based initiatives to solve issues in areas like education for children, environmental conservation and external cooperation keeping in mind the local culture & society.

• Electrosteel Initiatives

• Setting up of Drinking water kiosks in local area during the summer season.

• Providing assistance to promote local culture and festivals.

• Carrying out development work in local Schools & Sports Clubs to promote education & sports activities.

• Providing medical help through the Charitable Medical Centers.

• Motivating local poor but bright students and distribution of educational kits amongst school children.

• Arranging regular Blood Donation and Medical Camps through agencies and helping local people with Blood Cards as and when required.

• Distribution of Clothes/Blankets amongst poor people of local area.

• Providing financial help to needy people against their appeals.

• Engaging Employees through various Competitions, Sports Activities and Cultural programs.

• Providing financial assistance for the promotion of tribal and integral education through specialized implementing agencies.

• Extending major funding towards animal welfare, infrastructure development for Gauseva and the construction of specialized animal hospitals across multiple states.

The Company conducts its CSR activities based on the feedback from its employees, stakeholders, customers and the local community.

I? Information Technology

The Company has further improved its security posture to mitigate information security risks by implementing Identity Threat Protection which safeguards the organizations user identities by detecting, preventing and responding to identity- based threats such as credential theft and account compromise. It leverages advanced analytics and AI-driven monitoring to identify suspicious activities in real time. This proactive approach strengthens access controls, reduces unauthorized access risks and enhances overall cybersecurity resilience.

The Company is implementing location wise "End Point Backup Solution" for desktops/laptops in phased manner which ensures business continuity by protecting critical data on employee devices from loss due to accidental deletion, theft or ransomware attacks. It enhances data security, supports compliance and enables fast recovery, reducing downtime and protects user data thereby avoiding productivity loss.

G. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Debt Service Coverage ratio has reduced from 3.81 times in the FY 2024-25 to 1.14 times in FY 2025-26, i.e., a decrease of 70% due to decrease in volume of sales and lower realisation.

Interest Coverage ratio has decreased from 7.10 times in FY 2024-25 to 2.52 times in FY 2025-26, i.e., a decrease of 65% due to decrease in volume of sales and lower realisation.

Operating profit margin has reduced from 14.71% in FY 2024-25 to 6.23% in FY 2025-26, i.e., a reduction of 58% due to decrease in margin and revenue of the Company.

Net Profit Margin (%) witnessed a decrease from around 10.60% in the FY 2024-25 to around 2.63% in the FY 2025-26, i.e., a decrease of 75% due to decrease in volume of sales and lower realisation.

Return on Net Worth (%) witnessed a decrease from around 13.40% in FY 2024-25 to around 2.32% in FY 2025-26, i.e., a decrease of 83% due to decrease in volume of sales and lower realisation.

No significant changes were noted in the other key financial ratios during the year.

Particulars	FY 2025-26	FY 2024-25	Variation
Debtors Turnover	3.41	4.10	-17%
Inventory Turnover	2.87	3.71	-23%
Current Ratio	2.15	1.73	24%
Debt Equity Ratio	0.21	0.32	-33%

H. OUTLOOK

Water security has emerged as a national priority in India, driven by rapid urbanization, population growth and increasing concerns over water scarcity and quality. In response, the Government of India launched the Jal Jeevan Mission (JJM), the worlds largest rural drinking water supply program. From a baseline of 3.23 crore (17%) rural households with Functional Household Tap Connections (FHTCs) in 2019, the Mission has expanded coverage to approximately 15.82 crore households, representing about 81.7% of the 19.36 crore rural households identified across the country as of March 2026.

Further reinforcing the sectors long-term outlook, the Union Cabinet has extended JJM until December 2028, increasing the total program outlay to Rs. 8.69 lakh crore, with Central assistance enhanced from Rs. 2.08 lakh crore to Rs. 3.59 lakh crore. The next phase, JJM 2.0, places greater emphasis on service sustainability, governance, operation and maintenance, water quality monitoring and digital asset management through the Sujalam Bharat platform. Reflecting this commitment, the Union Budget FY 2026-27 has allocated Rs. 67,670 crore to JJM, a substantial increase over the FY 2025-26 Revised Estimate of Rs. 17,000 crore.

With continuous growth in Urban population, Urban water and wastewater management remains a focus area. AMRUT 2.0 continues to strengthen urban water supply and wastewater infrastructure. The allocation for AMRUT 2.0 has been rationalized to Rs. 8,000 crore in FY 2026-27. River cleansing initiatives like Namami Gange is revamping the sewerage infrastructure in many cities. Collectively, these initiatives will continue to support sustained growth in urban Indias pipe and fittings industry.

In the irrigation sector, more states are adopting piped irrigation system. Several new and ongoing initiatives are expected to further strengthen demand for Ductile Iron (DI) pipes. Work on the construction of the Ken-Betwa Link Project—the first of the 30 river-linking projects identified under the National Perspective Plan, is progressing, with the Union Budget FY 2026-27 allocating Rs. 1,906 crore for river interlinking works. At the same time, PMKSY, with an allocation of around Rs. 7,137 crore for FY 2026-27, continues to support the completion of major and medium irrigation projects. Further impetus is expected from the Union Cabinets approval of the Modernization of Command Area Development & Water Management (M-CADWM) scheme under PMKSY, with an initial outlay of Rs. 1,600 crore for the modernization of irrigation water distribution through underground pressurised pipeline networks.

The newly launched Urban Challenge Fund (UCF) with Central Assistance of Rs. 1 lakh crore, which is expected to catalyse nearly Rs. 4 lakh crore of investment in urban infrastructure over the next five years. The UCF will support large-scale investments with private participation in water supply, sewerage, wastewater reuse, stormwater drainage and water grid infrastructure.

All the above initiatives, coupled with matching expenditure from the state fund, are expected to sustain long-term investment in water infrastructure, thereby driving robust demand for Ductile Iron (DI) pipes and fittings.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Companys estimates, predictions and expectations may be "forward-looking" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods in which the Company operates, input availability and prices, changes in government regulations, tax laws and other statutes, economic developments within the country and the countries within which the Company conducts business and other factors such as litigation and industrial relations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of subsequent developments, information or events.

Risk Management

The Company has proper Risk Management and Control System to ensure that the risks of the Company are identified early and managed effectively. The risk and mitigation measures are weaved into strategic plans, backed by strong internal control system and are reviewed periodically. Values and Business Principles are important foundations of the internal environment for risk management. The main objective of Risk Management is to make sure that varied internal & external risks are managed & mitigated appropriately to protect the interest of all stakeholders which encompass, among others, proper compliances with applicable laws and regulations and ensuring overall safety in the organisations.

The Company has already undertaken an extensive Risk Management initiative that includes introducing Risk Management Manual, compiling a comprehensive profile of the key risks to the Company, identifying significant gaps in managing those risks and developing initial action plans to address those risks. The worldwide activities of the Company are exposed to varying degrees of risk and uncertainty, quite a few of which are external in nature. The Company has identified and categorised the risks associated with its business into Economic Risk, Competitor Risk, Industrial Risk, Environmental Risk, Foreign Exchange Risk, Payment Risk and Interest Rate Risk.

• Economic Risk

Economic risk reflects the likelihood that plant output will fail to generate adequate revenues to cover operating costs and debt obligations. For the current fiscal year, this risk materialized due to subdued domestic demand caused by delays in government fund disbursements under national water infrastructure schemes. This led to a severe reduction in domestic net sales realizations, forced production curtailments and poor fixed-cost absorption. Consequently, production costs exceeded budget targets, leading to a contraction in margins. Externally, maritime supply chain risks and geopolitical tensions continue to pressure logistics and fuel costs.

To mitigate these challenges, the Company focuses on operational efficiency by enhancing backward integration through brownfield expansions and upgrading equipment to lower production costs. In sourcing and logistics, strategy of sourcing coking coal from various geography and long-term contracts are utilized alongside alternative raw material channels, while specialized domestic rail schemes are leveraged to circumvent logistics bottlenecks. Cost control measures are strictly enforced by replacing diesel with process gas, stabilizing blast furnace operations, and dynamically adjusting the raw material mix to optimize variable costs.

• Competition Risk

The domestic market is increasingly competitive due to capacity expansions by peers utilizing newer, cost-advantaged technologies, which may pose distinct challenges at the marketplace. The narrowing demand-supply gap has intensified price competition, placing older, multi-location plants at a cost disadvantage and causing potential constraints in maintaining and growing market share. Furthermore, the Company faces market share pressure from substitute products like OPVC pipes, alongside heightened competition in export markets as domestic players aggressively target the same international customer segments.

To mitigate these pressures, the Company focuses on market diversification by expanding beyond traditional rural water programs into urban municipal replacements, sewage infrastructure, smart cities and industrial pipelines. It is also actively increasing its value-added mix by raising the proportion of high-value products, such as specialized fittings, valves and advanced pipe coatings. Finally, strategic interventions are underway to deepen dedicated relationship programs with top infrastructure contractors, transitioning the Companys positioning from a pure product supplier to a total water transmission solutions provider.

• Industrial Risk

Maintaining smooth plant operations requires a skilled, safe, and stable workforce. During the current year, human resource challenges included an increase in permanent employee attrition, localized knowledge concentration due to a historic lack of formal job rotations and operational vulnerabilities from key-person dependencies. Additionally, industrial manufacturing environments continue to present inherent occupational safety and workplace injury risks.

To manage these challenges, the Company addresses talent and performance management by implementing compensation benchmarking, clear career growth paths and performance improvement plans to improve employee retention and productivity. Policy institutionalization is being driven through the formalization of new corporate frameworks for job rotation, knowledge transfer and structured succession planning to de-risk key designations. For safety and industrial relations, the Company conducts regular safety assessments and mock drills, provides complete health and accident insurance for permanent staff and maintains proactive liaisoning with labor unions and community stakeholders to secure long-term industrial harmony.

• Environmental Risk

Environmental risk refers to the possibility of adverse impacts on the environment arising from industrial operations or natural phenomena. These risks may include air pollution, wastewater discharge, generation of hazardous and nonhazardous waste, noise pollution, chemical spills, climate change impacts, biodiversity loss and depletion of natural resources.

At Electrosteel Castings Limited, environmental risks are systematically managed through an Environmental Management System (EMS) aligned with ISO 14001:2015. The plant identifies environmental risk through aspect impact mechanism. Based on this evaluation, risks are prioritized using the Environmental Risk Priority Number (ERPN) methodology, which considers the likelihood of occurrence, severity of impact and ability to detect or control the risk.

The organization also considers the needs and expectations of interested parties, including regulatory authorities, local communities, employees, customers, suppliers and other internal and external stakeholders. Their expectations regarding environmental protection, regulatory compliance, pollution prevention and sustainable resource use are incorporated into the environmental risk management framework. The primary environmental risks associated with plant operations include air emissions from blast furnace and foundry processes, wastewater discharge, handling of chemicals and fuels, generation of solid, hazardous wastes and high noise levels. These risks are mitigated through advanced engineering controls such as air pollution control systems, effluent treatment facilities, safe chemical handling procedures, waste recycling and continuous environmental monitoring.

To mitigate environmental risks, the plant has implemented various operational control measures such as air pollution control systems for stack emissions, effluent treatment and recycling facilities, proper handling and storage of chemicals, solid waste segregation and recycling practices and noise control measures. Continuous monitoring of environmental parameters such as stack emissions, ambient air quality, effluent quality and water consumption is carried out to ensure compliance with statutory and internal standards.

The organization is committed to continual improvement in environmental performance by adopting cleaner technologies, enhancing resource efficiency, strengthening waste minimization practices, implementing energy and water conservation initiatives. Regular internal audits, compliance evaluations, and management reviews are conducted to identify opportunities for improvement and further reduce environmental risks.

An effective Emergency Preparedness and Response Plan is also established to address potential environmental emergencies such as chemical spills, fire incidents or accidental releases. The emergency plan is periodically updated and tested through mock drills to ensure readiness and effectiveness. Furthermore, environmental performance and risk mitigation measures are reviewed periodically by management to ensure that environmental risks are minimized and that preventive actions are effectively implemented.

Through these systematic approaches, Electrosteel Castings Limited ensures proactive environmental risk management while promoting sustainable operations and protecting the surrounding ecosystem and community.

• Foreign Exchange Risk

Foreign Exchange Risk (also known as exchange rate risk or currency risk) is a financial risk posed by an exposure to unanticipated changes in the exchange rate between two currencies. Multinational businesses exporting or importing goods and services are faced with an exchange rate risk, which can have severe financial consequences if not managed appropriately. Considering the large volume of export of finished products and import of raw materials, the Company is exposed to the risk of fluctuation in the exchange rates while natural hedging plays a major counter-balancing role.

The Company has adopted a comprehensive risk management policy wherein it actively hedges its foreign exchange exposures within defined parameters, through use of hedging instruments, such as, forward contracts, options and swaps to minimize currency fluctuation risks. The Company periodically reviews its risk management initiatives and also takes expert advice on regular basis on hedging strategy.

• Payment Risk

Payment risk refers to the possibility of cash flow shortages due to the non-receipt, delayed, or partial receipt of payments from customers, which can cause severe interest charges, fund-transfer costs, replacement costs or principal losses alongside potential damage to organizational reputation. In the current fiscal year, this risk has intensified due to prolonged receivable cycles and delayed government fund disbursements under national water infrastructure projects. High inventory carrying costs coupled with these payment slowdowns have directly pressured the Companys working capital, operational cash flows, and return on capital employed (ROCE).

To mitigate these financial risks, the Company conducts stringent creditworthiness evaluations of all customers and maintains a close, continuous watch on the active credit cycle. For export markets, receivable protection is actively managed by utilizing dedicated credit insurance policies to cover and safeguard against non-receipt. Furthermore, the Company leverages a structural funding framework by relying on the underlying security of major water infrastructure projects that are funded directly by government bodies or backed by international agencies, thereby minimizing long-term default history.

• Interest Rate Risk

Interest rate risk arises when changes in market interest rates cause fluctuations in the fair value or future cash flows of the Companys financial instruments, relating primarily to its long-term and short-term borrowings with floating interest rates. In the current year, macroeconomic environments are shaped by global policy changes and domestic fiscal measures. While the reserve banks decision to keep benchmark repo rates unchanged helps stabilize baseline borrowing costs, ongoing geopolitical volatility and changing international risk premiums continue to require strict vigilance to prevent margin pressure.

To manage this exposure, the Company relies on continuous market intelligence by constantly monitoring global and domestic credit markets to track shifts in financing terms and macroeconomic trends. The financing strategy is dynamically rebalanced to maintain an optimal debt maturity profile and minimize total funding costs. Additionally, the Company focuses on resource management by enhancing internal capital allocation to meet financial and debt obligations more efficiently, while exploring cash flow optimizations to offset interest exposures.

	For and on behalf of the Board of Directors
	Umang Kejriwal	Sunil Katial
Place: Kolkata	Managing Director	Whole-time Director and CEO
Date: 18 May, 2026	DIN :00065173	DIN :07180348