Hariyana Ventures Ltd Management Discussions

Steel production and consumption continue to be important indicators of industrial activity and economic development, as steel is a critical raw material and an intermediary product for infrastructure, construction, engineering, automotive, manufacturing, energy and several other sectors.

India continues to remain one of the worlds leading steel-producing nations, supported by strong domestic demand, increasing production capacity, infrastructure development and the availability of domestic raw materials. The Indian steel industry comprises integrated steel producers, major and secondary steel producers, including electric arc furnace and induction furnace-based producers.

During FY 2025-26, the Indian steel industry maintained its growth momentum despite challenges arising from global trade conditions, fluctuations in steel prices, elevated raw-material costs and competitive pressure from international markets. According to the Ministry of Steel, during April-February 2025-26, crude steel production increased to approximately 153.6 million tonnes, registering growth of 11.2% over the corresponding period of the previous year. Finished steel production stood at approximately 146.8 million tonnes, while finished steel consumption reached approximately 147.7 million tonnes, representing growth of 7.2%.

The industry continues to benefit from Indias expanding infrastructure programme, urbanisation, manufacturing activity, construction expenditure and Government-led capital expenditure.

MARKET SIZE AND INDUSTRY OVERVIEW

The Indian steel sector has expanded considerably over the past decade, supported by rising domestic consumption and continuous additions to steelmaking capacity. The Governments policy framework continues to focus on developing a technologically advanced, globally competitive and self-reliant steel industry.

During FY 2025-26, the industry witnessed strong growth in crude and finished steel production. The Ministry of Steel reported crude steel production of approximately 153.6 million tonnes during April-February 2025-26, compared with 138.1 million tonnes during the corresponding period of FY2024-25. Finished steel production increased to approximately 146.8 million tonnes from 132.9 million tonnes, while finished steel consumption increased to approximately 147.7 million tonnes from approximately 137.8 million tonnes during the corresponding period.

The overall demand environment remains favourable, although the pace of growth has been influenced by the timing of infrastructure expenditure, market prices and broader domestic and international economic conditions.

Indias steelmaking capacity has also continued to expand. By June 2026, Indias crude steelmaking capacity had reached approximately 222 million tonnes per annum, reflecting continued investments in capacity expansion and modernisation.

Steel demand is expected to remain strong in the medium term. ICRA expects domestic steel demand growth to improve to approximately 9-10% in FY2026-27, supported by increased Government capital expenditure in roads, railways and infrastructure-related sectors.

INTERNATIONAL TRADE

Indias steel trade position improved during FY2025-26. As per provisional data of the Joint Plant Committee, finished steel exports were approximately 6.60 million tonnes during FY2025-26, while imports were approximately 6.52 million tonnes. Accordingly, India remained a marginal net exporter of finished steel during the year.

The improvement in exports reflects stronger domestic production capabilities and the ability of Indian steel producers to participate in international markets. At the same time, global steel trade remains exposed to geopolitical developments, protectionist measures, changes in trade policies, excess global capacity and fluctuations in international steel prices.

The Company will continue to monitor domestic and international market conditions and evaluate opportunities and risks arising from changes in steel demand, prices, imports, exports and raw-material costs.

GOVERNMENT INITIATIVES

The Government of India continues to undertake several measures to strengthen the domestic steel industry and promote capacity expansion, value addition, energy efficiency and self-reliance.

Key policy developments relevant to the sector include:

The National Steel Policy, 2017 continues to provide the long-term policy framework for developing a technologically advanced and globally competitive steel industry. The policy envisages crude steel capacity of 300 million tonnes, crude steel production of 255 million tonnes and finished steel production/consumption of approximately 230 million tonnes by 2030-31.

The Government has continued to promote domestic production of specialty and value-added steel through the Production Linked Incentive (PLI) Scheme for Specialty Steel, with the objective of encouraging investment, reducing import dependence and enhancing Indias manufacturing capabilities. The Steel Import Monitoring System (SIMS) and its upgraded framework continue to improve transparency and monitoring of steel imports and provide better information regarding imported steel products. The Government has continued to support infrastructure-led steel demand through expenditure on roads, railways, housing, urban infrastructure, logistics, renewable energy and other capital-intensive sectors. Policy measures relating to trade remedies and import management have been undertaken from time to time to safeguard the interests of domestic steel producers against sudden increases in imports and adverse global trade developments.

The Governments continuing emphasis on domestic manufacturing, infrastructure development and the Make in India programme is expected to provide structural support to steel demand over the medium and long term.

ROAD AHEAD

The outlook for the Indian steel industry remains positive, supported by Indias economic growth, infrastructure development, urbanisation, manufacturing expansion and increasing demand from construction, automotive, engineering, renewable energy and other steel-intensive industries.

ICRA expects domestic steel demand growth to improve to around 9-10% in FY2026-27, aided by a stronger Government capital expenditure programme and increased spending on steel-intensive infrastructure sectors.

At the same time, the industry may continue to face challenges arising from fluctuations in steel prices, elevated costs of iron ore and coking coal, global oversupply, international trade restrictions, exchange-rate movements and geopolitical uncertainties. ICRA has noted that rising coking coal and iron ore costs could place pressure on steelmakers margins even as domestic steel prices have shown improvement.

The long-term prospects of the sector remain encouraging. The National Steel Policy continues to target 300 million tonnes of crude steel capacity by 2030-31, together with substantial increases in production and per-capita consumption.

The Company remains committed to responding to changing market conditions, improving operational efficiency, strengthening customer relationships, maintaining product quality and pursuing sustainable growth opportunities within its available resources.

FINANCIAL HIGHLIGHTS

The financial performance of the Company for FY2025-26 is summarised below:

Paid-up Share Capital of the Company as on 31st March 2026 stood at 58,05,000, comprising 5,80,500 equity shares of 10/- each, fully paid-up. Income from Operations for FY2025-26 stood at 75,69,146. Profit/(Loss) Before Tax for FY2025-26 stood at 61,44,688. Net Worth of the Company as on 31st March 2026 stood at 2,41,55,916.

The financial results should be read in conjunction with the audited financial statements and notes forming part of the Annual Report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company maintains an internal control framework commensurate with the size, nature and complexity of its operations. The internal control system is designed to safeguard the Companys assets, ensure proper utilisation of resources, maintain operational efficiency, support reliable financial reporting and ensure compliance with applicable laws, rules and regulations.

The Directors and management periodically review the Companys internal control mechanisms and financial and operational processes. Appropriate controls are implemented for authorisation of transactions, accounting and financial reporting, asset protection and statutory compliance.

Management also reviews internal audit observations, wherever applicable, and takes appropriate corrective measures. The Company remains committed to continuously strengthening its internal control systems in line with changing business requirements and evolving best practices.

HUMAN RESOURCES VIS-À-VIS INDUSTRIAL RELATIONS

Human resources continue to be an important component of the Companys sustainable growth strategy. The Companys human resource philosophy is focused on developing a performance-oriented, competency-driven and accountable work culture.

The Company recognises that continuous development of employee skills and knowledge is essential in a changing and competitive business environment. Accordingly, emphasis is placed on appropriate training, employee development, operational discipline, leadership development and enhancement of technical and managerial capabilities.

The Company remains committed to maintaining healthy and constructive industrial relations and complying with applicable labour and employment laws, including requirements relating to wages, working conditions, working hours, employee welfare and occupational safety.

Employee engagement, transparent communication, performance evaluation and recognition of employee contributions remain important elements of the Companys human resource practices. The Company also encourages a work environment based on professionalism, equal opportunity, responsibility and mutual respect.

Training and development programmes, both internal and external, are undertaken as appropriate to keep employees updated with relevant technical, operational and business practices. The Company will continue to review its manpower requirements and rationalise and streamline its workforce in line with business needs.

SUSTAINABILITY AND ENVIRONMENTAL CONSIDERATIONS

The steel industry is increasingly focused on improving energy efficiency, reducing emissions, optimising resource utilisation and adopting environmentally sustainable production practices.

The Company recognises the importance of responsible resource utilisation and compliance with applicable environmental requirements. It will continue to evaluate opportunities for improving operational efficiency, reducing wastage and adopting appropriate measures for sustainable business operations, commensurate with its scale and available resources.

KEY RISKS AND CONCERNS

The Companys business and the steel industry remain subject to various risks and uncertainties. Key factors include:

Volatility in steel prices and demand;

Fluctuations in the prices and availability of iron ore, coal, power and other raw materials; Competition from domestic and international steel producers; Changes in import and export policies, tariffs and trade-remedy measures; Global economic and geopolitical developments; Foreign exchange fluctuations; Changes in environmental, taxation and other regulatory requirements; Supply-chain and logistics-related disruptions; and

The Company continuously monitors these factors and takes appropriate measures, within its capabilities, to mitigate their potential impact on business operations and financial performance.

CAUTIONARY STATEMENT

Certain statements contained in this Management Discussion and Analysis Report may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on the Companys present expectations, estimates, projections and assumptions regarding the industry, economic conditions, business environment and future developments.

Forward-looking statements are subject to various risks and uncertainties and actual results may differ materially from those expressed or implied in such statements. Factors that may cause actual results to differ include, among others, changes in domestic and global economic conditions, steel demand and prices, availability and cost of raw materials, competition, Government policies, regulatory requirements, international trade conditions, geopolitical developments and other risks and uncertainties affecting the Companys business.

The Company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws and regulations.