Kanishk Steel Industries Ltd Management Discussions

Annexure-I

For the Financial Year Ended 31st March 2025

The Indian steel industry continues to be one of the core sectors underpinning the nations manufacturing and infrastructure development. Supported by the Governments thrust on infrastructure creation and industrial expansion, the sector has shown resilience amid global economic uncertainties. The National Steel Policy 2017 aims to boost Indias steel production capacity to 300 million tonnes by 2030-31 (-Ministry of Steel NSP 2017), while reducing import dependency and encouraging value-added domestic manufacturing. This policy, along with initiatives such as Make in India, PM Gati Shakti, and the National Infrastructure Pipeline (111 lakh crore outlay) ( Ministry of Finance), is expected to drive long-term steel demand across sectors like construction, automotive, energy, and defence.

Indias crude steel production stood at 140.2 million tonnes in FY 2023-24 (-World Steel Association April 2024 Short Range Outlook), and domestic demand is projected to grow at 7.5% in FY 2025 ([SteelMint Report, March 2025]). Despite global slowdown pressures, India remains one of the few bright spots globally in terms of both production and consumption.

Kanishk Steel Industries Limited, established in 1989, continues to be a prominent and reliable steel manufacturer in South India. The Companys integrated manufacturing unit located at Gummidipoondi, Tamil Nadu, houses both furnace and rolling mill operations, producing a range of frontline rolled steel products. Over the years, the brand “KANISHK STEELS” has earned a reputation in the Indian market for its quality, competitive pricing, and dependable delivery schedules. During FY 2024-25, the Company sustained its focus on enhancing product quality, optimising internal processes, and strengthening its market presence, particularly in the infrastructure and industrial segments.

The per capita finished steel consumption in India was around 82.5 kg in FY 2023-24 (-Ministry of Steel, Annual Report 202324), compared to the global average of 231.3 kg ([World Steel Association, 2024]). This gap reflects the tremendous potential for long-term demand growth in the country. With sustained investment in infrastructure such as roads, ports, airports, renewable energy, and affordable housing, demand for steel is projected to remain strong over the next decade.

That said, the industry also faces challenges. Key risks include volatile input costs (coal, iron ore), exchange rate fluctuations, regional demand-supply imbalances, and high energy and logistics costs. The influx of low-priced steel imports from neighbouring countries such as China and

Vietnam also adds competitive pressure ([DGFT Import Data, FY 2024-25]). Nonetheless, strong domestic policy support through duties, quality controls, and procurement preference for Indian steel has partially offset these pressures.

Despite these challenges, the Company remains optimistic about the future. With steel consumption expected to rise at 7-8% CAGR over the next 5 years ([CRISIL Outlook - Feb 2025]), Kanishk Steel aims to leverage its operational strengths and customer-centric approach to achieve sustainable growth. By maintaining quality standards, cost discipline, and market responsiveness, the Company remains committed to creating long-term value for all stakeholders.