Graphite India Ltd Management Discussions

(i) Industrys structure and developments

A. Graphite and Carbon Segment Graphite Electrodes

Graphite Electrode is used in electric arc furnace-based steel mills for conducting current to melt scrap iron and steel and is a consumable for the steel industry. The principal manufacturers are based in USA, Europe, Middle East, India, China, South-East Asia and Japan.

Graphite Electrode demand is primarily linked to the global production of steel in electric arc furnaces which is one of the three basic methods for steel production i.e. – [1] Bessimer Oxygen Furnace (BOF); [2] Electric Arc Furnace (EAF); and [3] Induction Steel Furnaces (ISF). According to the World Steel Association ("WSA"), global (excluding China) EAF steel production grew at a 2% to 3% compounded annual growth rate from 2015 to 2024, the most recent year for which WSA has published such figures. This compares to a 1% compounded annual growth rate for overall global (excluding China) steel production during this same period. As a result, the EAF method of steelmaking accounted for 51% of the global (excluding China) steel production in 2024, compared to 44% in 2015, with increasing share of growth in nearly every region.

EAF steelmaking is more energy efficient and is beneficial in terms of its low carbon footprint, compared to steel produced through the BOF steelmaking model. According to the Steel Manufacturers Association ("SMA"), EAF steelmaking produces 75% fewer carbon dioxide emissions compared to BOF steelmaking. Further, SMA notes that the EAF process is a sustainable model for recycling scrap-based raw materials into new steel, which is 100% (and infinitely) recyclable at the end of its useful life. In addition to these advantages, EAF steel producers benefit from their flexibility in sourcing iron units, being able to make steel from either scrap or alternative sources of iron, such as Direct Reduced Iron (DRI) and Hot Briquetted Iron (HBI), both made directly from iron ore. Chinas transition toward EAF based steelmaking has progressed slower than initially targeted. With EAF at 10% through 2025 compared to the stated 15% goal, policy direction continues to favour higher scrap-based steel production over the medium term.

Reflecting on these positives and other strategic advantages, EAF based steel production is expected to grow at a faster rate than BOF steel production. Based on industry announcements on proposed additional EAF steel capacities, this could result in global (excluding China) EAF production capacity increasing at approximately 3% to 4% compounded annual growth rate through 2030. This should translate into similar increase in demand for UHP graphite electrodes over the same period to support EAF capacity expansion, besides further potential graphite electrode demand from production increases at existing EAF steel plants to support overall expected growth in steel demand.

Captive Power

The Company operates a 18.9 MW wind power plant at Nandurbar and a 8.8 MWp Solar Power plant at Bhoom, Maharashtra. Around 80% of total energy consumption of graphite electrode plant at Nashik is met through renewable energy. This shift has substantially reduced Nashik plants power costs and contributed to a noteworthy reduction in overall carbon emissions.

Calcined Petroleum Coke and Paste

Graphite Indias Coke plant in Barauni, Bihar, specializes in the manufacture of Calcined Petroleum Coke (CPC), Carbon Paste and Electrically Calcined Anthracite Paste. This facility represents one of the Companys key backward integration initiatives. The plant manufactures two grades of

CPC - aluminium and graphite. CPC plays a crucial role in various industries, including the manufacturing of anodes for aluminium smelters, graphite electrodes and as a carburiser in steel production. Additionally, the division manufactures four grades of Paste, i.e. Electrode Paste based on either CPC or Electrically Calcined Anthracite Coal (ECAC) and Tamping Paste derived from either CPC or ECAC. Electrode Paste is primarily utilised in Ferro Alloy Smelters while Tamping Paste serves as a lining material in submerged arc furnaces. Despite prevailing challenging market conditions, the division has maintained satisfactory performance. However, with increasing competitive intensity, the division expects market conditions to remain challenging in the near term.

Impervious Graphite Equipment (IGE)

IGE Division is in the business of design, manufacture and supply of Impervious Graphite Heat and Mass Transfer Equipment and Turnkey systems. It has an integrated facility for process/product design, manufacturing, inspection and providing supervision during erection and commissioning activities.

Impregnated graphite is an ideal material of construction for corrosive applications in sectors like Chloro-Alkali, Crop protection agrochemicals, Chlorinated Organic, Speciality & fine Chemicals, Phosphoric Acid, Fertilizers, Rayon, Steel Pickling, Metal Processing, Polymers, Drug Intermediates, Batteries & Gelatine etc.

The Company has built the product line into a reliable brand with a reputation for prompt service, good quality and consistent performance by investing in strengthening its core competencies. This division is capable of meeting any country specific design standard and has obtained many certifications relevant to the product profile. In FY 2025-26, the divisions sales performance was not upto the targeted level due to delay in major projects at customers end, uncertain geopolitical environment and steep competition from local competitors. Despite that, the performance of the division was quite satisfactory.

The manufacturing facility at Gonde is now fully operational. As planned, the Company was able to carry out end-to-end manufacturing of graphite equipments at Gonde during FY 2025-26 and would continue in the coming years.

B. Steel

Powmex Steels Division (PSD) is engaged in the business of manufacturing high speed steel and alloy steel having its plant at Titilagarh in the State of Odisha. PSD is the single largest manufacturer of High-Speed Steel (HSS) in the country. HSS is used in the manufacture of cutting tools such as drills, taps, milling cutters, reamers, hobs and broaches. HSS cutting tools are essentially used in – (a) automotive; (b) machine tools; (c) aviation; and (d) retail market. The industry is characterized by a single good quality manufacturer of HSS i.e. PSD which faces competition from small domestic producers and cheap imports from overseas manufacturers. The performance of the division has been better during FY 2025-26 as compared with previous year inspite of scarcity in raw material availability due to restrictions on Export of Tungsten from China. PSD has almost 100% penetration in all major domestic OEMs either directly or indirectly. The division has expanded its export basket to new countries like South Korea and Argentina.

C. Other Segments

Glass Reinforced Plastic Pipes (GRP)

GRP Division which was engaged in manufacturing of large diameter Glass Fibre Reinforced Plastic Pipes was performing poorly in recent years. Therefore, it was decided by the Company to close the operations of the said manufacturing facility and dispose-off the machineries, the process of which is expected to be completed by June, 2026. Presently, part of the plant facility is being used for manufacture of Graphite equipments by IGE Division.

18 MW Hydel Power

The Company has an installed capacity of 18 MW of power generation through the Hydel route in Chunchanakatte (CCKT), near Mysuru. An additional capacity of 5 MW was installed during FY 2025-26. In addition, steps for installations of Solar power plant of 5 MWp was also undertaken, out of which 4.5 MWp was commissioned in November, 2024 and remaining 0.5 MWp is expected to be commissioned in the first quarter of FY 2026-27. The power generated through these units is being sold to third parties.

Diversification into Synthetic Graphite Anode Material (SGAM) & Others Project

The Company has recently planned for diversification into manufacturing of Synthetic Graphite Anode Material (SGAM). SGAM is used in Lithium-ion Battery Cells and is a critical part of EV ecosystem. Diversification into this new product would generate new revenue stream.

(ii) Opportunities and threats

According to the World Steel Association, global crude steel production in 2025 declined by 2% compared to 2024 and to a level of 1,803.8 million tonnes (MT). Production trends varied across regions during the year, influenced by slower industrial activity, uneven recovery in developed economies and continued weakness in Chinas property sector. In March 2026, global crude steel production declined by 4.2% compared to the prior year to 159.9 MT, indicating that global steel markets continue to remain impacted by demand side challenges and geopolitical uncertainties. China retained its position as the leading steel producer globally, although production volumes remained under pressure due to weaker real estate demand and slower manufacturing activity. Global steel demand is forecast to grow 0.3% in 2026, followed by an improvement of 2.2% in 2027. This recovery is expected to be supported by a gradually improving demand environment in developed economies and continued growth across developing markets, particularly India. Demand conditions in major developed economies, including the European Union, the United States, Japan and Korea, are expected to improve in 2027 after a prolonged period of weaker growth. However, ongoing geopolitical tensions in the Middle East and uncertainties in global trade continue to remain important risk factors for the industry.

India has retained its position as the worlds second largest crude steel producer during FY 2025-26. Crude steel production increased to 168.4 MT, a growth of 10.7% over the previous year, while finished steel production increased to 160.9 MT, reflecting a growth of 9.7%. Consumption of finished steel reached 163.7 MT, a growth of 7.6%, supported by strong demand from the infrastructure, construction, railways and manufacturing sectors. India also regained its position as a net exporter of finished steel during FY 2025-26, with exports increasing by 35.9% while imports declined by 31.7% over the previous year.

For FY 2026-27, domestic steel demand in India is expected to grow by 9% to 10%, supported by continued government focus on infrastructure development and higher capital expenditure on roads, railways, housing and industrial projects. India continues to benefit from the availability of lower cost labour, significant iron ore reserves and expanding steel manufacturing capacity, which is expected to reach around 300 MT by 2030. Government initiatives aimed at improving domestic manufacturing and reducing import dependence are also expected to support long term industry growth.

The immediate opportunities for Indias steel sector include:

(a) Continued investments by both public and private sectors in steel intensive infrastructure projects, including roads, railways, urban infrastructure, ports and housing; (b) Ongoing implementation of the Production Linked Incentive (PLI) scheme for specialty steel, which is expected to encourage investments, improve domestic manufacturing capabilities and support the development of value added steel products; (c) Increasing focus on green steel and decarbonisation initiatives, creating opportunities for low-carbon steel production, renewable energy-linked projects and sustainable infrastructure development; (d) Growth in exports with improved competitiveness of Indian steel products and diversification into markets across Europe, Southeast Asia and the Middle East; (e) Expansion of domestic steel production capacity and technology upgrades by major steel producers, supporting long term industry growth and improved product quality.

The Indian steel sector continues to face certain challenges in the near term, including:

(a) Pressure from excess global steel supply and elevated exports from China, which reached around 118 MT in 2025, impacting global steel prices and competitive intensity; (b) Volatility in raw material costs, particularly coking coal prices, along with fluctuations in global steel prices, which may affect profitability and capital planning; (c) Geopolitical developments, especially in the Middle East, and ongoing global trade uncertainties, which continue to impact energy costs, logistics and supply chains; (d) Rising restrictive trade policies, trade barriers and carbon-related regulations in certain regions, which could affect export competitiveness for steel producers; (e) Continued pressure on margins arising from fluctuations in freight costs, energy prices and supply disruptions affecting industrial fuel availability.

Overall, while the Indian steel industry remains well positioned for long term growth, supported by infrastructure development, policy initiatives and increasing domestic demand, it will continue to operate in an environment influenced by global pricing pressures, geopolitical uncertainties and evolving trade dynamics. The focus within the steel sector on capacity expansion, technology upgrades and sustainable production practices is expected to drive its long term competitiveness.

Graphite India is one of the leading producers of graphite electrodes globally by capacity. The Company has over six decades of technical expertise in the graphite electrode industry and manufactures a full range of graphite electrodes, with a focus on large diameter and ultra-high power (UHP) electrodes preferred by major steel manufacturers. With the increasing adoption of Electric Arc Furnace (EAF) based steelmaking and continued growth in steel production, Graphite India remains well positioned to cater to demand from both domestic and international steel manufacturers despite competitive pressures across global markets.

(iii) Segment-wise Performance Revenue of the Company

The revenue from operations amounted to Rs. 2,812 crore as against Rs. 2,420 crore in the previous year. Aggregate Export Revenue of all divisions together was Rs. 1,139 crore as against Rs. 791 crore in the previous year.

Graphite and Carbon Segment

The performance of the segment was better in FY 2025-26 as compared to FY 2024-25. This was attributable to higher volume of production and sales and lower costs partly offset by lower realisation.

Production of Graphite Electrodes and Other Miscellaneous

Carbon and Graphite Products during the year under review was 92,889 MT as against 85,225 MT in the previous year. Production of Calcined Petroleum Coke during the year was 46,362 MT as against 50,788 MT in the previous year. Production of Carbon Paste during the year was 2,044 MT against 1,755 MT in the previous year.

Production of Impervious Graphite Equipment (IGE) and spares during the year was 2,097 MT as against 1,495 MT in the previous year. The segment revenue was higher at Rs. 2,508 crore from Rs. 2,166 crore in the previous year. Segment recorded profit of Rs. 213 crore in FY 2025-26 compared to profit of Rs. 178 crore in FY 2024-25 due to higher volume and lower costs despite lower realisations.

Steel Segment

Production of HSS and Alloy Steels was 3,193 MT during the year as against 3,004 MT in the previous year.

Other Segments

GRP division produced 984 MT pipes as against 978 MT in the previous year.

Power generated from Hydel Power plant at CCKT of 18 MW capacity amounted to 59.83 million units during the year as against 59.70 million units in the previous year. 85.12 million units were sold during the year as against 38.39 million units in 2024-25. During the year, generation from newly installed 4.5 MWp Solar at CCKT was 6.10 million units which was fully sold.

(iv) Outlook

India continues to reinforce its position in the global steel industry, supported by sustained domestic demand along with policy led growth initiatives. Steel demand in India is estimated to grow by around 9% to 10% in FY 2026-27 and remain on a positive trajectory going into FY 2027-28. This growth is primarily driven by increased Government capital expenditure, ongoing infrastructure development and expansion across other key steel consuming sectors such as construction, railways, automobiles and manufacturing. The Governments national policy focus on infrastructure initiatives and general urbanisation is expected to support the underlying demand for steel across the country.

The Indian steel industry continued its expansion during FY 2025-26, with strong domestic consumption and India becoming a net exporter of steel for the first time in two years. Finished steel consumption reached approximately 163.7 MT, reflecting a growth of 7.6% over the previous year. Finished steel production increased to 160.9 MT, a growth of 9.7%, while crude steel production rose to 168.4 MT, a growth of 10.7% over the previous year. These trends of steady growth across both steel production and consumption reflect the overall medium term industry dynamics.

Indias steel production capacity continues to expand, with total installed capacity reaching around 220 MT in FY 2025-26 and expected to increase further towards the 300 MT target by FY 2030-31. Investments by both public and private sector companies continue to drive capacity expansion and modernisation of existing production facilities. Policy initiatives such as the Production Linked Incentive (PLI) scheme for specialty steel are expected to encourage investment, improve product quality and support the development of value-added steel products.

From a global perspective, steel demand contracted by 1.9% in 2025 and is expected to grow by only 0.3% in 2026. This is likely to be followed by a period of recovery, with growth of 2.2% in 2027 as demand improves in developing economies and developed markets gradually stabilise. Global steel demand remains sensitive to geopolitical developments, such as the ongoing conflict in the Middle East, which may continue to affect energy prices and supply chains.

Chinas steel demand continues to remain under pressure due to weakness in the real estate sector and slower industrial activity. Demand is expected to contract at a slower pace of around 1.5% in 2026 and is expected to stabilise in 2027. China continues to significantly influence global steel production and trade patterns, with high export volumes impacting global prices and regional competitive dynamics. Structural industry challenges such as overcapacity, price volatility and trade related measures continue to impact the steel industry. Increased exports from China, estimated at around 118 MT in 2025, have added considerable pressure on global steel prices and trade flows. Fluctuations in raw material costs, particularly coking coal, along with energy price volatility and supply disruptions, continue to impact margins for steel producers across regions.

The broader global trade environment, shaped significantly by US tariff measures during the year, has added to the uncertainty facing the steel and graphite electrode industries. Rising trade barriers and retaliatory measures across major economies have affected cross-border commerce and business confidence, with implications for demand, pricing and supply chain decisions across the sector.

The adoption of green steel technologies and low-carbon production processes is gaining importance across the global steel industry. In India, demand for green steel is expected to increase gradually, reaching around 4.49 MT by FY 2029-30, with further growth expected over the long term. This shift is supported by policy initiatives, increasing environmental awareness and investments in clean energy solutions. The transition towards sustainable steel production is expected to play an important role in shaping the future of the industry. The European Unions Carbon Border Adjustment Mechanism (CBAM), which entered its definitive phase in January 2026, further reinforces this imperative. CBAM directly links carbon intensity of production to the cost of accessing the EU market, making decarbonisation a competitive necessity for steel exporters.

The outlook for Indias steel sector remains positive, supported by strong domestic demand, particularly with infrastructure investment and national policy support. While global challenges such as geopolitical tensions, price volatility and trade uncertainties persist, Indias steel industry is expected to maintain its growth momentum. With continued capacity expansion, focus on value added products and increasing adoption of sustainable practices, the steel sector is well positioned for the years ahead.

(v) Risks and Concerns

Global steel markets continue to remain vulnerable to trade-related restrictions, safeguard duties, anti-dumping measures and rapidly evolving carbon-related regulations across regions. Increased steel exports from China have continued to influence global steel prices and competitive intensity in international markets. In addition, geopolitical tensions in the Middle East and ongoing global trade uncertainties continue to impact logistics costs, energy prices and supply chain stability. Such developments may affect export opportunities, raw material availability and overall market conditions for steel and graphite electrode manufacturers.

The Companys business is closely linked to the global steel industry, particularly the EAF based steelmaking segment, which continues to remain cyclical. While global steel demand is expected to improve gradually over the medium term, demand conditions across key steel consuming sectors such as construction, infrastructure, automotive and manufacturing remain influenced by interest rates, industrial activity and broader macroeconomic conditions. Any slowdown in these sectors could impact steel production levels and consequently affect demand for graphite electrodes.

Graphite electrode pricing is dependent on the demand and supply dynamics within the steel industry and movements in raw material prices. Availability and pricing of petroleum needle coke, a key raw material used in graphite electrode manufacturing, continue to remain important factors affecting the industry. Any prolonged supply disruptions, production constraints or fluctuations in global crude oil and petroleum-linked markets may impact raw material availability and pricing, thereby affecting production costs and operating margins.

In addition to needle coke, the Company remains exposed to fluctuations in the prices of other important raw materials such as raw petroleum coke and coal tar pitch. Volatility in coking coal prices, energy prices and freight costs has continued to affect the global steel value chain during FY 2025-26. Supply disruptions arising from geopolitical developments and logistical constraints may further impact procurement costs and supply timelines. Since graphite electrode manufacturing is power intensive in nature, any increase in power tariffs or energy costs may also affect overall cost structures and profitability.

Global manufacturing activity and housing construction across several economies continued to remain affected by elevated interest rates and an uneven economic recovery. Chinas steel demand is expected to remain under pressure in the near term due to continued weakness in the real estate sector and softer industrial activity, although conditions are expected to stabilise gradually over time. Continued weakness in construction and manufacturing activity across certain regions may impact steel consumption and EAF based steel production, thereby affecting graphite electrode demand in international markets.

The United States has initiated antidumping and countervailing duty investigations against imports of Large Diameter Graphite Electrodes from India and China, adding a layer of trade uncertainty to the global graphite electrode market. The outcome of these investigations, which are currently in progress, could affect the terms of access to the US market for Indian producers. Brazil has also initiated similar antidumping investigations. The Company is closely monitoring these developments and is actively engaged in both the processes. In parallel, the Company continues to strengthen its presence across other key export markets, including Europe, the Middle East and Southeast Asia, to maintain the resilience of its overall export business.

The Company also remains exposed to foreign currency fluctuations due to its balanced exposure to exports and imports across multiple geographies. While the Company benefits from a natural hedge arising from diversified currency exposure, volatility in currency markets may continue to affect realisations, procurement costs and profitability. In addition, the graphite electrode industry continues to remain highly competitive, with competition based on pricing, product quality, operational performance, delivery reliability and customer relationships. Maintaining competitiveness in such a market environment remains important for sustaining market position and profitability.

(vi) Internal control systems and their adequacy

The Company has proper and adequate systems of internal controls. Internal audit is conducted by outside auditing firms. The Internal audit reports are reviewed by the top management and the Audit Committee and timely remedial measures are enabled. IT Security Policy is in place to ensure that the risks associated with non-compliance of information gathering, processing, security (against cyber crimes) and preservation are assessed and adequately and ably managed. The purpose and objective of the policy is to address the risks by defining, developing and implementing adequate controls through proper categorization. An internal committee reviews the adherence and suggests any changes are required. Independent systems audit is performed by TUV Nord, India. Third party product inspections are performed by agencies like SGS and BV India.

(vii) Discussion on financial performance with respect to operational performance

Revenue from Operations recorded Rs. 2,812 crore as against Rs. 2,420 crore in the previous year. Profit after tax was Rs. 264 crore as against Rs. 452 crore in the previous year. Profit before tax was lower at Rs. 354 crore (before exceptional item) as compared to Rs. 569 crore in the previous year. Borrowing at Rs. 254 crore was higher than Rs. 85 crore as compared to previous year and the Finance Cost increased to Rs. 21 crore from Rs. 6 crore in the previous year. Capital expenditure during the year amounted to Rs. 250 crore as against Rs. 166 crore in the previous year.

ICRA has reaffirmed the long term rating at [ICRA] ‘AA+ (pronounced ICRA double A plus) with stable outlook. The short-term debt programme rating has been reaffirmed at [ICRA] A1+ (pronounced ICRA A one plus). This rating indicates highest-credit-quality. The retention of these ratings reflects comfortable financial risk profile characterized by low gearing, strong coverage indicators and the financial flexibility emanating from large liquid investment portfolio. Details of contingent liabilities are given in Note 34 to the Financial Statements.

(viii) Material developments in Human Resources / Industrial Relations front, including number of people employed

The Companys HR policies and practices continue to focus on contemporary as well as pragmatic people centric initiatives. New policies are being formulated vis-?-vis Environmental Social Governance (ESG) and Business Responsibility & Sustainability Report (BRSR). Integrated Management System (Quality Management System- 9000, Environment Management System- 14,000, Occupational Health & Safety- 45,000, Energy Management System – 50,000 and Social Accountability- 8000) are being implemented.

While designing these policies, special attention is given to Companys vision as well as changing needs. Optimal utilisation of people and periodic review of the organogram is addressed continuously. The HR function has actively participated in formulation of ESG, BRSR and IMS policy of the Company and an HR person from each of the plant / location is being trained on ECOVADIS, a platform where all ESG and IMS related processes are being uploaded / maintained.

Training and development programs are specifically targeted to address Companys progressive needs with focus on behavioral part of the training. Formulation of unit-wise training, calendar basis training need identified, are being held by in-house resources, mainly on the technical part. Safety plays a major role in the success of any organization and the Company recognizes the same. Hence, emphasis has been given to adopting and maintaining best safety practices across the units and periodic audit of the same.

Multiskilling and multitasking of employees are achieved through suitably designed training modules as well as rotation through different job roles. This ensures a mix of learning, innovation and excellence leading to continual improvements. Company considers its employees as an intelligent and responsible resource for effectively and optimally managing other material resources like money, machines and materials. Hence, productive and effective engagement of all resources at various levels is critical to achieve Companys objectives of cost optimisation, profitability as well as business growth. This is critical in ensuring the interests of all stakeholders. Specific initiatives are being taken to develop successors to key roles. Emphasis is given to improve the fundamental understanding of leadership competencies of Team Building, Lateral Thinking, Influencing Outcomes and Problem Solving. Engagement with local bodies, union leaderships and the local communities are done on a periodic basis in order to maintain seamless and smooth functioning of the Units.

The total number of permanent employees in the Company is 1,672 as on 31st March, 2026. The employee relations continue to be cordial and harmonious at all the locations of the Company.

(ix) Occupational Health and Safety

Internal Safety Audits are conducted at regular intervals at plants. Audit observations relating to unsafe acts, practices, conditions are discussed in "Corrective and Preventive Action" meetings. Protection and safety of our personnel and assets are our top priority. We believe in in-depth investigation of unfortunate accidents, if any, so that root causes are identified and corrective and preventive measures are undertaken. Consultation and participation of workers and statutory bodies are encouraged.

Health, Safety, Environment and Quality policies are in place and are audited by external agencies. Safety Audit once in two years, as specified, is carried out by External Safety Auditors. Every year health check-up of all employees is being carried out by competent medical professionals.

Environmental, Social and Governance (ESG)

ESG performance is fundamental to a companys ability to generate sustainable long-term value. It highlights both potential risks and opportunities that can influence business resilience and growth. Environmental factors address challenges such as climate change and the efficient use of natural resources. Social aspects focus on people-related issues, including workforce practices, diversity and inclusion, health and safety, community engagement, and responsible supply chain management. Governance elements relate to the

effectiveness of the board, adherence to ethical standards, transparency, and the quality of disclosures.

The Company has been implementing the principles of ESG over two years and have made significant progress in the journey of excellence while creating value through ESG.

Some of the highlights of our ESG related performance for the FY 2025-26 are:

(a) Increase in renewable energy consumption by 22% with respect to that of previous FY 2024-25;

(b) Reduction in energy intensity by 6% with respect to that of previous FY 2024-25;

(c) Reduction in GHG emissions (Scope 1 and 2) by 11.5% with respect to that of previous FY 2024-25;

(d) Reduction in water consumption intensity by 2.5% with respect to that of previous year FY 2024-25;

(e) Received ‘B rating from CDP for 2025, reflecting a strong level of environmental management and indicating that the Company is actively identifying and addressing climate-related risks and opportunities, while implementing structured measures to improve its environmental performance;

(f) EcoVadis has emerged as a widely used supplier ESG assessment platform and some of the customers are requesting us for EcoVadis score. We participated in EcoVadis assessment during the year and achieved an EcoVadis percentile score of 61 against our previous score of 57;

(g) Disclosed our ESG Report with stakeholders (through our website) and will continue to do so every year; (h) Obtained Integrated Management Certification (IMS) integrating ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and ISO 50001:2018 for all locations;

(i) Obtained Social accountability certification as per SA 8000 for Durgapur plant;

(j) Achieved NABL (National Accreditation Board for Testing and Calibration Laboratories) certification for laboratory at Durgapur plant;

(k) Renewable power usage started in Ambad and Gonde plants from January, 2026.

Plan for the year 2026-27 includes the following, among others:

(a) Obtain further reductions in Energy consumption, GHG emissions and Water consumption;

(b) Further improve EcoVadis score;

(c) Improve our gender diversity;

(d) Set near term goals for achieving Net Zero;

(e) Set Science Based Targets for GHG emissions reduction.

(x) Significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with explanations are as under:

Sl. No. Particulars	2025-26	2024-25	Improvement/ (deterioration)
1 Interest Coverage Ratio -	80.08	112.76	(28.98)%
(PBIDT / Finance cost)%
2 Current Ratio – (current assets / current liabilities)	3.39	4.57	(25.82)%
3 Debt Equity Ratio-(Debts / Total Equity) - Times	0.04	–	100%
4 Operating Profit Margin - (PBDIT / Total Revenue)%	15.47	23.05	(32.89)%
5 Net Profit Margin - (PAT / Total Revenue)%	9.41	18.69	(49.65)%
6 Return on Net worth - (PAT / Net worth)%	4.70	8.10	(41.98)%

Explanations:- The Companys profit has declined due to lower Mark-to-Market gain on investments. Borrowing for working capital also increased during the year.

Transaction of the Company with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the listed entity is given below:-

Emerald Company Private Limited (ECPL) (An entity of the promoter Group holding 61.33% of the share capital).

	2025-26	2024-25
	(Rs. Cr.)	(Rs. Cr.)
Dividend Paid	131.81	131.81

Research and Development

The Company remains firmly focussed towards continual improvement, technological advancement and development of import substitute materials through robust in-house R&D initiatives. Sustained efforts have enabled the Company to establish itself as a leading manufacturer of high-quality, cost-competitive Graphite Electrodes, Carbon specialities and Carbon composites.

During the year, significant progress was made in the development of Isostatic Graphite. The Company is currently in the validation stage for ultrafine Isostatic Graphite with 10-micron particle size. Other developed Isostatic grades have already demonstrated suitability for demanding applications, including space and defence sectors, highlighting the Companys growing technological capabilities in advanced materials.

The Company has also developed cost-effective applications of Graphite Specialities for use in energy storage systems, thereby expanding its product utility in emerging and sustainable energy-related applications. In addition, a new product line of Carbon Bricks has been successfully developed for applications in the chemical industry, further diversifying the Companys speciality carbon portfolio.

In the Carbon Composites segment, the Company continues to make notable advancements in aerospace and defence applications. Development of Carbon-Carbon (CC) Brake Discs for the SARAS aircraft is currently in progress in collaboration with Aeronautical Systems Laboratory and Defence Research and Development Organisation (DRDO). Further, development activities for CC Brake Discs for the LCA MK-2 aircraft have been initiated.

The Company has also successfully completed the development of CC Brake Discs with MARK-IV SOP for LCA MK-1 aircraft, and these brake discs are presently undergoing aircraft trials. Continuous process and product development initiatives are being undertaken to further enhance the performance characteristics of Carbon-Carbon Brake Discs (CCBD), with focus areas including improved durability, superior thermal resistance, and enhanced operational reliability for fighter aircraft applications.

Strengthening its strategic presence in defence technologies, the Company has acquired technology from DRDO for manufacturing Carbon-Silicon Carbide (CSiC) components intended for defence applications. This technology acquisition significantly enhances the Companys capabilities in high-performance and strategic material segments.

Additionally, the Company is working closely with Vikram Sarabhai Space Centre, Thiruvananthapuram, under Indian Space Research Organisation, for the development of aerospace application components, further reinforcing its contribution to Indias space and aerospace ecosystem.

Subsidiary Companies

Carbon Finance Limited is a wholly owned Indian subsidiary. Graphite International B.V. (GIBV) in The Netherlands is a wholly owned overseas subsidiary Company which is the holding company of four step down subsidiaries in Germany (viz) Graphite Cova GmbH, Bavaria Electrodes GmbH-in-liquidation, Bavaria Carbon Specialities GmbH, Bavaria Carbon Holdings GmbH and one step down subsidiary in USA (viz) General Graphene Corporation. The Group had decided in FY 2022-23 to shut down its German graphite electrode production while restructuring speciality and coating operations as they were not so energy intensive and initiated liquidation of one step down subsidiary, Bavaria Electrodes GmbH-in liquidation, with effect from 1st October, 2022 which is ongoing.

The overseas subsidiaries recorded a turnover of Euro 10.55 million (Mn) as compared to Euro 15.06 Mn in the previous year. During the year, the loss of Euro 6.06 Mn was higher against loss of Euro 5.16 Mn in the previous year.

The Company, by way of royalty, earned Rs. 0.18 crore during the year, as against Rs. 0.12 crore in the previous year, from overseas subsidiary.

GIBV has made investment in General Graphene Corporation (GGC) of USD 22.60 Mn as on 31st March, 2026 which constitute 60.25% of capital.

Associate Company

The Company in October, 2023 had invested in compulsory convertible preference shares of Godi India Private Limited (GIPL). It has in GIPL further invested in a Rights issue raising its shareholding to 45.76%. GIPL is in development stage & has not yet commenced commercial operations of any product. Details of investment are given in Note 48 to the Financial Statements.

Other Information

No Company has ceased to be a subsidiary of the Company during the year.

Statement containing salient features of the financial statements of subsidiaries is enclosed - Annexure 1 The Consolidated Financial Statements of the Company along with those of its subsidiaries prepared as per IndAS 110 forms a part of this Annual Report.

Information pursuant to Section 134 of the Companies Act, 2013 a. Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on 31st March 2026 is available on the Companys website on www. graphiteindia.com. b. Five meetings of the Board of Directors of the Company were held during the year on 14th May 2025, 1st August 2025, 10th November 2025, 28th January 2026 and 9th February, 2026. c. All the Independent Directors of the company have furnished declarations that they satisfy the requirement of Section 149 (6) of the Companies Act, 2013. d. Relevant extracts of the Companys policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided in section 178(3) of Companies Act, 2013 is enclosed -

Annexure 2 e. There is no qualification, reservation or adverse remark or disclaimer made by the statutory auditor in his audit report and by Company Secretary in practice in the secretarial audit report and hence no explanations or comments by the Board are required. No fraud has been reported by Statutory Auditors. f. Particulars of loans, guarantees or investments under Section 186 of Companies Act, 2013 is enclosed -

Annexure 3 g. Particulars of contracts or arrangements with related parties referred to in Section 188(1) of Companies Act, 2013 is enclosed - Annexure 4 h. Details of conservation of energy, technology absorption, foreign exchange earnings and outgo as prescribed vide Rule 8(3) of Companies (Accounts) Rules 2014 is enclosed – Annexure 5 i. Risk management policy has been developed and implemented. The Board is kept informed of the risk mitigation measures being taken through half yearly risk mitigation reports / Quarterly Operations Report. There are no current risks which threaten the existence of the Company.