Hisar Metal Industries Ltd Management Discussions

Your Company is engaged in the manufacture of Cold Rolled Stainless Steel Strips and Stainless Steel Tubes & Pipes. From manufacturing process involved, it may be classified as a stainless steel strips, tubes and pipes manufacturer. The Indian steel industry has made a rapid progress on strong fundamentals over the recent few years. The industry is getting all essential ingredients required for dynamic growth. The government is backing the industry through favorable industrial reforms. Indian steel demand is expected to boost by Infrastructure & Construction development sustained by industrial, manufacturing and capital goods and be stimulated by the automotive, railways and consumer durable sectors.

Your Company has 2 Nos. of 6 Hi-Cold Rolling Mills, 3 Nos. of 4 Hi-Cold Rolling Mills, 1 No 20Hi Cold Rolling Mill and 10 Tubes Mills.

Thus, your Company has immense capability to keep pace with the growing requirement of the industry. Besides, we always look forward to cope with technology advancement to grasp the all available opportunities.

Indias economic growth in 2025 is projected to be robust, with real GDP estimated to grow by 7.4% - 7.6%, driven by strong investment and consumption. The economy is benefiting from a double engine of consumption and investment, with high growth in services, construction, and manufacturing. Key sectors like financial services (9.9% growth) and infrastructure development (60% rise in highways) are leading the momentum

Key Highlights for India in 2025:

GDP Projection: Real GDP is estimated to grow at 7.4% for FY 2025-26, up from 6.5% the previous year.

Growth Drivers: Robust growth in the services sector and strong private final consumption (estimated at 7.0%).

Infrastructure Expansion: The national highway network has expanded significantly, and rail electrification is nearly 100%.

Manufacturing Surge: Manufacturing and construction are expected to achieve a 7.0% growth rate.

Inflation & Stability: CPI inflation is relatively low and anchored, averaging 1.7% from April to December 2025.

Fiscal Position: Gross Non-Performing Assets (NPA) are at a multi-decade low of 2.2%.

Key Economic Drivers & Policies:

Infrastructure Investment: The government has significantly increased its effective capital expenditure. Financial Inclusion: Over 55 crore Jan Dhan accounts are supporting financial inclusion.

Manufacturing Boost: Initiatives for strengthening the manufacturing sector are creating new employment opportunities.

Future Outlook: India is on track to become the worlds third-largest economy, with a projected GDP of $7.3 trillion by 2030.

India is one of the fastest-growing major economy. Despite global headwinds, Indias growth is expected to remain range bound, 6% - 6.5%, in the next couple of years. The economy is expected to be driven by strong domestic consumption, government capital expenditure, and robust expansion in the services and manufacturing sectors.

Inflation is projected to moderate and be rangebound, 4.0-4.5% in the near term, supported by favourable food price trends. The moderation in inflation has enabled the Reserve Bank of India to adopt a more accommodative stance, with interest rate cuts anticipated to stimulate consumer spending and credit growth.

The Government of India remains focused on fiscal consolidation, employment generation, and boosting capital investment.

Overall, Indias economic outlook remains strong, driven by robust domestic demand, policy support, and sectoral resilience. Improving trade relations with the developed economies will provide the requisite impetus to the economy. The trade agreement With EU and other countries are a positive development in this direction. By leveraging its domestic strengths and implementing strategic reforms, India is well-positioned to navigate global challenges and maintain its trajectory as a leading global economic powerhouse.

More importantly war between Iran and USA, Israel will be key risk factors impacting the economic activities. Oil price will have major impact in the countrys growth.

Steel is one of the worlds most important metals. It can be found everywhere in our lives, from the grandest infrastructure projects to the contents of your kitchen cupboards. It is strong, durable, and infinitely recyclable without loss of any of its inherent properties. It has enabled our modern way of life and will be the foundation of our future.

Global steel production in 2025 decreased by 2% year-on-year - to 1.8 billion tonnes. This is evidenced by the World Steel Associations global ranking of steel-producing countries.

Total steel production in the CIS countries + Ukraine fell by 4.4% year-on-year - to 81.3 million tonnes in 2025, with Ukraines production falling by 2.2% year-on-year - to 7.41 million tonnes.

The global steel industry in 2026 is navigating a difficult, fragmented environment marked by structural overcapacity, intense competition from Chinese exports, and a modest demand recovery. Global steel demand is projected to grow by a slim 0.3% to 1.724 billion tonnes, with demand in developed countries recovering by 1% while I ndia leads growth at 7.4%

Key 2026 Industry Trends

Production Trends: Global steel output is under significant pressure due to slowing demand and structural imbalances. As of early 2026, major producers are seeing diverging fortunes, with declining output in China, Russia, and Japan, but growth in India, Turkey, and Germany.

The China Factor: China remains the central driver of global demand, but its internal consumption is dropping. It is flooding the market with over 100 million tonnes of competitive steel products, impacting global pricing and leading to increased trade barriers.

Regional Outlooks:

India: Projected to remain the fastest-growing major market, with growth of 7.4% in 2026.

EU and US: Demand is expected to rise by 1.3% and 1.7% respectively in 2026, recovering from a three- year decline due to infrastructure and defense spending.

Middle East: A sharp decline in demand is expected, leading to a slow year for the region.

Overcapacity Crisis: Global steel overcapacity is growing at its fastest rate in 15 years, threatening to exceed 680 million tons by end-2025, triggering one of the deepest crises since 2009.

Key Risks and Focus Areas

Trade Tensions: Rising trade barriers and tariffs are reshaping global flow, creating concerns over protectionism.

Sustainability & Technology: Investment is shifting toward decarbonization, with projects like Carbon Capture, Utilization, and Storage (CCUS) gaining traction in emerging markets.

Pricing: Steel prices remain volatile, influenced by fluctuating raw material costs, high energy prices in Europe, and sluggish demand in the construction sector.

More importantly war between Iran and USA, Israel will be key factors impacting the economic activities. Oil price will be major impact in global growth.

Indian Steel Industry

India remains the worlds second-largest steel producer and one of the strongest demand drivers, with steel demand expected to grow in future. Demand is expected to reach 200-210 million tonnes by 2030, driven by strong expansion in steel-intensive sectors such as infrastructure, housing, transportation, power, and renewable energy.

Growth is further supported by rising demand for consumer durables and capital goods. Additionally, government initiatives, including Production-Linked Incentives (PLI) schemes and increased investments in infrastructure and manufacturing, have played a crucial role in boosting steel production and consumption. In the Union Budget for FY2026--27, the Government of Indias capital expenditure (capex) as a share of GDP, reinforcing its commitment to industrial growth.

Segment-wise or Product wise Performance:

Currently your Company is engaged only in one type of product and involves one type of process and it is called Engineering Product, so there is no segment wise or product wise performance available.

Risk and Concerns:

The Companies engaged in production of stainless steel strips, tubes and pipes had faced major challenges due to slowdown in the growth of steel industry. The falling demand, low prices, cost escalation in inputs,

reduction in import duty are some of the major threats to the sustainability of the Indian Steel Industry. Further reduction in import duty stimulated the import of steel from China and other countries manufacturers at low prices leading to decrease in demand of domestic goods.

Internal Control System and their Adequacy:

Your Company has adequate internal control systems commensurate with its size and operations, although not documented. The Company regularly gets its accounts audited from internal auditor.

Financial Performance with respect to Operational Performance:

The Company has produced 9138 MT of Cold Rolled Stainless Steel Strips and Stainless Steel Tubes & Pipes as compared to 7990 MT in the previous financial year while the Company has sold 9144 MT of Cold Rolled Stainless Steel Strips and Stainless Steel Tubes & Pipes as compared to 7993 MT in the previous financial year. The company has achieved turnover of Rs.26196 Lacs as compared to previous year turnover of Rs. 24483 Lacs. During the year the company has achieved Profit after tax of Rs. 338 Lacs as compare to last year profit after tax of Rs. 318 Lacs. The reserve and surplus stood to Rs. 6034 Lacs. The earnings per share is Rs. 6.41/- and book value of the share is Rs. 122/-. The Board of Directors have proposed a dividend of Rs. 1/- per share (10%) for the financial year 2025-26.

Industrial Relations and Resource Management:

The Company during the previous year continued its record of good industrial relations with its employees. During the year various initiatives had been taken to improve the performance and productivity levels in various departments of the Company. The Company conducts training sessions on various topics ranging from safety, productivity, handling of hazardous products etc. that help to train employees to overcome operational constraints. The Company has its in house technical centre in the plant to train the new recruits before their placement that helps in optimum utilization of resources as well as maintaining quality standards. It also indulges into and implements various HR initiatives and activities including employee welfare, special rewards, performance review system and various employee motivation activities.

Cautionary Statement:

Management Discussion and Analysis Report may be forward looking statement within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied depending upon global and Indian demand-supply conditions, changes in government regulations, tax regimes, and economic developments within India and overseas.

For and on behalf of the Board of Directors

Date: May 30, 2026	(Abhiram Tayal)	(Karan Dev Tayal)
Place: Hisar	Managing Director	Whole-time Director
	DIN:00081453	DIN:00181214