Jai Balaji Industries Ltd Management Discussions

Industry Structure and Development Global Overview

The financial year 2024-25 witnessed a cautiously optimistic global economic environment, marked by gradual recovery in advanced economies and resilient growth across emerging markets. While inflationary pressures moderated due to stabilizing energy prices and easing supply chain disruptions, interest rates remained elevated in several regions, tempering investment momentum. Central banks in the US, Europe and Asia adopted a cautious approach with interest rates peaking in early FY 2024-25 and showing signs of easing by year-end. However, high borrowing costs in the initial quarters continued to impact investment and capital expenditure across industries. Capital expenditure (CAPEX) improved continuously from FY21 to FY24.

The recent volatility in global markets was triggered by changes in U.S. tariff regulations. Despite such volatility, economies are expected to adapt by leveraging technology and strategic planning to maintain resilience and stability.

Sustainability and decarbonization remained key focus areas globally, driving investment in low-carbon technologies and green steel initiatives. Steel manufacturers across regions increasingly aligned operations with ESG commitments and regulatory frameworks, reinforcing the shift towards cleaner production practices. The push towards decarbonization and green steel technologies gained further momentum, with several major players committing to long-term emission reduction targets.

The global steel industry remained stable, with moderate growth in demand driven by infrastructure, renewable energy, and the gradual revival of construction activity. However, oversupply issues in China and fluctuating raw material prices, particularly iron ore and coking coal, kept margins under pressure.

World Crude Steel Production

January-December 2024*

Rank	Country	Qty (MT)	% change over the same period of last year
1	China	1005.090	-1.7
2	India	149.587	6.3
3	Japan	84.009	-3.4
4	USA	79.452	-2.4
5	Russia	70.690	-7.0
6	South Korea	63.531	-4.7
7	Germany	37.234	5.2
8	Turkey	36.893	9.4
9	Brazil	33.741	5.3
10	Iran	30.952	0.8
	Top 10	1591.179	-0.9
	World	1839.449	-0.9

Source: World Steel Association release dated January 24,2025; *provisional;

Overall, FY 2024-25 was a year of economic recalibration, where stabilization efforts and structural shifts towards sustainability, digitization, and supply chain resilience created a more balanced, albeit cautious, business landscape.

However, the steel industry is expected to see positive trends as demand for steel products continues to rise. This increase in demand is driven by the growth of infrastructure projects, the automotive sector, and manufacturing activities worldwide.

Indian Overview

Indias economy remained on a strong growth trajectory during FY 2024-25, emerging as one of the fastest-growing major economies globally, supported by robust domestic demand, continued infrastructure investments, and policy-driven momentum in key sectors. The governments sustained focus on capital expenditure, especially in transportation, logistics, and energy, provided a significant boost to core industries including steel, cement, and construction.

Indias steel sector demonstrated resilience and strategic momentum during FY 2024-25, despite global headwinds such as geopolitical tensions, high inflation, and sluggish recovery in major economies. The domestic steel demand remained strong, largely driven by government-led infrastructure development, urbanization, and manufacturing growth. This placed India firmly as the second-largest steel producer globally, maintaining its trajectory as a critical contributor to both global steel supply and national economic development.

During calendar year 2024, India was the 2^nd largest producer of Crude Steel as per data (provisional) released by the World Steel Association.

Further strengthening domestic manufacturing, the Domestically Manufactured Iron & Steel Products (DMI&SP) Policy has been actively enforced across all government procurement tenders. This policy mandates the use of domestically produced iron and steel, aligning with the Honble Prime Ministers Make in India vision. It is aimed at reducing import dependence, boosting domestic production capabilities, and enhancing the participation of Indian steelmakers in public infrastructure projects.

Promotion of Steel usage in Rural India: Steel use in the rural areas has been much lower compared to the use of steel in urban areas. Investment in various flagship schemes by the Government, such as creation of permanent houses under Pradhan Mantri Awas Yojana- Gramin, PMKSY, Har Ghar Nal Se Jal scheme etc. are enhancing steel consumption in rural India. Ministry of Steel has set up a Joint Working Group for developing steel based houses under the PMAY-G and Aaganwadi houses.

Apart from above, agricultural implement penetration in rural India (tractors, combine harvesters etc.), construction of steel silos for grain storage and greater rural vehicle penetrations are also increasing the steel use in rural India.

Key Insights of Steel Consumption and other parameters in India

Consumption: Domestic steel consumption grew by approximately 11%, driven by infrastructure development and industrial activities. In India, steel is primarily consumed in growth driving sectors such as Housing and Construction (43%), Infrastructure Development (25%), Engineering and Packaging (22%), Automotives (9%) and Defence (1%).

The Total Finished Steel consumption in India for last 5 financial years is as given below:

Total Finished Steel (alloy/ stainless + non-alloy) Consumption
Year	Qty. (mt)	% Change over previous years
2020-21	94.89	-5.3
2021-22	106	11.7
2022-23	120	13.2
2023-24	136	13.5
2024-25*	111.5	11.4

Source: JPC (*provisional till December 2024)

Imports: During April-December 2024, the overall import of finished steel was 7.42 million tonnes (MnT), an increase of 22.7% as compared to the corresponding period last year, making India net importer of Finished Steel.

Exports: Indias finished steel exports for the period April-December 2024 were 3.6 million tonnes, down 24.6% from the corresponding period last year. Exports declined from April to July 2024 but have been rising since August 2024, except for a dip in November, 2024.

The Ductile Iron pipe segment in India also demonstrated resilience and growth in FY 2024-25, underpinned by government-led infrastructure initiatives and sustained urban development. The governments continued emphasis on initiatives like the Jal Jeevan Mission and Smart Cities Mission bolstered demand for DI pipes, which are preferred for their durability and corrosion resistance in water supply and sewage systems. The outlook for DI pipes remains positive, with continued demand anticipated from ongoing and upcoming infrastructure projects.

Indias total steel demand is expected to reach ~230 MT by FY-31. This growth will be driven by the building and construction (rising urbanization rate, increasing steel intensity) and infrastructure segments (investment in roads, railways and airports, increasing steel usage).

Overall, FY 2024-25 reaffirmed Indias position as a resilient and forward-looking economy, marked by strong macro fundamentals, a growing middle class and decisive policy interventions. For the steel sector, the year brought healthy domestic demand, policy support, and emerging green transition opportunities, positioning Indian manufacturers to scale sustainably in the years ahead.

Companys Financial Performance

The Revenue from operations of the Company for the financial year under review is H6350.80 crores as compared to H6413.78 crores during the previous financial year.

In view of the slowdown in the countrys steel sector during the second half of FY- 2024-2025, the Company reported net profit of H557.88 crores during the FY 2024-25 as compared to a profit of H879.56 crores during the FY 2023-24.

The company has been contributing to the ambitious projects of the government namely Jal Jeevan Mission and AMRUT by actively providing supplies of DI pipes and its also enhancing its capacities which will help in contributing to the initiatives taken by the govt. for nation building and by providing safe drinking water to all.

The Company is committed to its vision to emerge as an efficient producer of iron and steel products. It is focused on increasing capacity utilisation of all units, reducing cost and improving operational efficiency.

Low cost capacity expansion plans, healthy balance sheet, cost reduction strategies, focus on specialized products and experienced management augurs well for the growth of the Company.

Opportunities, threats, risks and concern

The Indian steel sector in FY 2024-25 stood at the crossroads of significant opportunities and evolving challenges. Strong domestic infrastructure development, growing industrial demand, and the global pivot towards green steel presented robust growth prospects. At the same time, the industry remained vulnerable to raw material price volatility, global trade imbalances, and environmental compliance pressures. Concerns around overcapacity, decarbonization costs, and logistics inefficiencies also shaped the risk landscape. Navigating these dynamics required strategic investments, technology upgrades, and operational discipline.

SWOT Analysis of Indian Steel Industry

Strength

1. Availability of iron ore and coal

2. Low labour wage rates

3. Abundance of quality manpower

4. Mature production base

Weakness

1. Unscientific mining

2. Low productivity

3. Cooking coal import dependence

4. Low R&D investments

Opportunities

1. Unexplored rural market

2. Growing domestic demand

3. Exports

4. Consolidation

Threats

1. China becominng net exporter

2. Protectionism in the West

3. Dumping by competitors

Opportunities

Robust Infrastructure Growth: Continued government focus on large-scale infrastructure projects under the National Infrastructure Pipeline (NIP), PM Gati Shakti, and Smart Cities Mission has significantly boosted steel demand in sectors such as roads, railways, ports, and urban transport.

Urbanisation and Affordable Housing: The acceleration of urbanization, coupled with the rising demand for affordable housing, is expected to significantly boost the construction sector, thereby driving increased demand for steel in both residential and commercial infrastructure projects.

Domestic Consumption Upsurge: A steady increase in steel usage across housing, automobile, renewable energy, and capital goods sectors presents a strong domestic growth opportunity. Rising per capita steel consumption, though still below global averages, indicates vast untapped potential.

Green Steel and Export Potential: India is emerging as a competitive player in the green steel ecosystem. Incentives for green hydrogen, carbon capture, and renewable-powered steelmaking create scope for long-term technological leadership and premium global market access.

PLI and Manufacturing Drive: The Production-Linked Incentive (PLI) schemes in sectors like auto, white goods, solar modules, and electronics are expected to drive indirect steel demand by accelerating domestic manufacturing.

Geopolitical Realignment and Supply Chain Diversification:

With global manufacturers diversifying supply chains away from China, India is well-positioned as an alternate hub, especially in value-added and specialty steel categories.

Threats

The Indian steel sector in 2024-25 faced a number of significant threats, ranging from macroeconomic pressures to technological and environmental challenges. Below is a detailed breakdown of the major threats affecting the industry:

Raw Material Volatility: Fluctuations in the prices and availability of key inputs like coking coal, iron ore, and ferroalloys—often influenced by international markets—continue to impact cost structures and margins.

Dumping and Import Pressures: Steel imports, especially from countries with excess capacity and lower production costs, can distort domestic pricing and undercut local manufacturers, despite existing safeguard duties.

Geopolitical Uncertainties: Global trade dynamics remain fragile due to geopolitical tensions, protectionist policies, and sanctions, all of which could disrupt raw material sourcing, export markets, and shipping routes.

Currency Risk: Exchange rate volatility affects both input costs (for imported raw materials) and competitiveness of Indian steel in global markets.

Risks and Concerns

Environmental Compliance and Capex Pressure: Meeting increasingly stringent ESG norms and decarbonization targets requires substantial capital investment in cleaner technologies, energy efficiency, and emission control, which may impact short- to mid-term profitability.

Overcapacity Risk: Domestic capacity expansions must be aligned with actual demand growth. Any mismatch could lead to overcapacity, pricing pressure, and underutilization of assets.

Credit and Liquidity Risks: In an environment of tight credit and cautious lending, smaller or leveraged players in the steel ecosystem may face challenges in securing working capital or financing for expansion.

Technology Transition Lag: The shift to green steel and digitalization requires not only capital but also technical know-how and supply ecosystem readiness. Delays in adoption could affect long-term competitiveness. The cyber security vulnerabilities is also a serious concern surfacing from increased digitization.

Labour and Logistics Constraints: Skilled manpower shortages, coupled with bottlenecks in logistics infrastructure, Labor unrest or strikes disrupting operations remain operational challenges for the sector.

While the steel sector in FY 2024-25 continues to benefit from strong domestic drivers and evolving global opportunities, it must navigate a complex mix of raw material uncertainties, environmental obligations, and competitive dynamics. Strategic agility, operational efficiency, and long-term sustainability investments will be key to maintaining growth and resilience.

Market Outlook and Future Strategies Market Outlook

The outlook for the Indian steel industry remains optimistic in the medium to long term, supported by robust domestic demand, government-led infrastructure expansion, and a stable policy environment. The sector is expected to continue growing steadily, with steel consumption rising in line with economic growth and increased investments in core sectors such as construction, automotive, renewable energy, and capital goods.

The global ductile iron pipe market is predicted to grow at a 6% CAGR by 2030. Indian DI pipe market is expected to grow at a much higher CAGR of 13 - 15% due to huge investment by the govt in water infrastructure projects. In the next few years, DI pipes is expected to account for 1/4^th of the pipe market share. This is because of the high reliability and long lifespan DI pipes offer.

Rising awareness regarding safe potable water, improving wastewater management systems, and scientific advancement are some of the reasons that predict a significant rise in DI Pipe demand.

Internationally, the demand for value-added and green steel is expected to grow, driven by stricter emission norms and sustainability goals across major economies. While global markets may remain volatile due to geopolitical developments and supply- demand imbalances, Indias structural demand and improving export competitiveness position it favourably in the global steel ecosystem.

At the same time, the industry must navigate challenges such as input cost volatility, evolving environmental regulations, and the need for continuous technology upgrades. The adoption of digital tools, automation, and decarbonization technologies will be essential for sustaining growth and profitability in a competitive environment.

Future Strategies

Capacity Optimization and Expansion: Your Company will continue to scale up capacities in a phased manner, aligned with projected demand growth, while focusing on improving asset utilization and cost efficiency.

Product Diversification: Emphasis will be laid on developing high-grade and value-added steel products catering to sectors like automotive, defense, renewables, and construction equipment by the company.

Digital Transformation: Company will increase its focus on Industry 4.0 initiatives such as predictive maintenance, supply chain automation, smart logistics, and data-driven decision-making to improve operational agility and reduce downtime.

Raw Material Security: Backward integration, long-term

supply contracts, and diversification of raw material sources— both domestic and international will be prioritized to mitigate input volatility.

Collaborations and R&D: Strategic alliances by the Company with technology providers, research institutions, and startups will support innovation in sustainable steelmaking and process optimization.

With a clear focus on sustainability, innovation, and market responsiveness, the Indian steel sector is well-positioned to evolve into a future-ready industry, driving industrial growth while aligning with global climate and quality standards.

Product wise performance analysis

Your Company has an integrated steel plant and manufactures different products in Steel sector. Your Companys cumulative product wise actual production details are given hereunder:

The actual production of Sponge Iron was 2,46,770 MT during the year 2024-25 as compared to 2,37,157 MT during the year 2023-24. For Pig Iron, the actual production was 5,43,185 MT and 4,28,629 MT during the year 2024-25 and 2023-24 respectively. The actual production of Steel Bars/Rods was 2,20,466 MT during the year 2024-25 as compared to 2,52,709 MT during the year 2023-24. For Billets/MS Ingot, the actual production was 1,66,271 MT and 1,52,390 MT during the year 2024-25 and 2023-24 respectively. The actual production of Ferro Alloys was 1,24,362 MT during the year 2024-25 as compared to 1,15,384 MT during the year 2023-24. In case of Ductile Iron Pipe, the actual production was 2,81,913 MT and 2,42,121 MT during the year 2024-25 and 2023-24 respectively. For Sinter, the actual production was 8,27,893 MT and 6,22,480 MT during the year 2024-25 and 2023-24 respectively. The actual production of Coke was 3,36,766 MT during the year 2024-25 as compared to 3,25,051 MT during the year 2023-24.

Key financial ratios

The details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof along with details of change in Return on Net Worth are given in note no. 52 of the notes to Financial Statement provided in this Annual report.

Internal Control Systems and their Adequacy

The Company maintains appropriate and effective internal control systems in proportion to the business size and complexity. In our opinion, these systems offer, among other things, a fair guarantee that transactions are carried out with management authorisation. These have been implemented at every level and are meant to ensure compliance with statutory and regulatory requirements for internal controls, as well as the accurate recording of financial and operational data. The permissible compilation of financial accounts in accordance with generally accepted accounting standards is also ensured, as is the sufficient protection of the Companys assets from major misappropriation or loss. In addition to this the Company also has a robust internal audit programme and the same is regularly reviewed by Management and the Audit Committee. The Audit Committee periodically meets the statutory and internal auditors of the Company to ascertain their views on the adequacy of internal control system and keeps the Board informed of its observations from time to time.

Human resources

At Jai Balaji Industries Limited (JBIL), empowering human resources is a strategic priority, and the belief in prioritizing people remains central to the Companys ethos. We strive to cultivate a workplace environment that fosters teamwork, creativity, operational excellence, and adaptability. This mindset continues to guide us as we explore emerging opportunities and tackle the evolving requirements of a dynamic and future-oriented workforce.

The growth and sustainability of the Company are closely tied to its capacity to engage, nurture, and retain high-calibre professionals across all tiers. JBIL places strong emphasis on the valuable role employees play in driving ideas, executing strategies, managing processes, and contributing meaningfully to the Companys progress. As of March 31,2025, the Company had 4,570 permanent employees, representing a diverse talent pool from domains such as finance, legal, taxation, engineering, management and more.

During the year, the Company maintained a constructive and collaborative relationship with its workforce and remained committed to enhancing employee potential through continuous learning, up skilling programs, and development initiatives designed to meet the demands of a rapidly evolving business landscape.

Cautionary Statement

The Management Discussion and Analysis Report may contain certain statements regarding the Companys goals, forecasts, assumptions, or anticipated outcomes that qualify as "forwardlooking statements" under applicable legal and regulatory frameworks. These statements are inherently subject to risks and uncertainties, and actual performance or results may vary significantly from those projected or implied.

A range of factors could influence such variances, including but not limited to, macroeconomic trends, fluctuations in domestic and global market dynamics, shifts in demand and supply patterns, volatility in pricing, and changes in regulatory policies, taxation laws, and other statutory provisions, as well as various unforeseen or incidental developments.

	On behalf of the Board of Directors
	Sd/-
Place: Kolkata	Aditya Jajodia
Date: 08th August, 2025	Chairman & Managing Director