Kasturi Metal Composite Ltd Management Discussions

Segment-wise or Product-wise Performance

Kasturi Metal Composite Limited has cultivated a formidable economic moat over the past two decades by specializing in industrial reinforcement materials. The Companys strategic product architecture is comprehensively diversified across three primary, high-growth verticals, supported downstream by specialized application services - set out in the product portfolio infographic earlier in this report.

Steel Fibers (concrete reinforcement). As the Companys primary revenue engine, this segment features the Duraflex and Durabond brands, offering loose hook-end, glued hook-end, and flat crimped steel fibers. Distributed directly into concrete to create a robust three-dimensional reinforcement network, these products are heavily utilized in tunnel shotcrete, precast elements, heavy-duty industrial flooring, load-bearing roads, and refractory applications. Segment performance is strongly fueled by Indias ongoing infrastructure boom, with the hooked-end configuration standing out as the highest revenue-generating and fastest-growing category.

Steel Wool Fibers. Operating parallel to construction materials, this specialized segment targets high-precision automotive and heavy machinery supply chains. Serving as a critical raw material input for Tier-1 suppliers, these fibers are used in manufacturing friction linings for brake pads and commercial clutches, offering exceptional thermal stability, wear resistance, and consistent friction coefficients under high operating temperatures. Even as the automotive sector transitions toward electric vehicles, the fundamental requirement for reliable friction braking systems ensures sustained volume pull.

Macro Synthetic PP Fibers & specialized trading. To complement its core metallurgical operations, the Company runs an agile trading vertical under the Durocrete brand to defend market share against non-metallic substitution trends. This product line offers civil contractors a Macro Synthetic Polypropylene fiber alternative that is both lighter and entirely corrosion- resistant, capturing niche structural applications where chemical exposure, environmental degradation, or weight limitations are paramount engineering concerns.

Human Resources & Industrial Relations

Downstream integration and synergy. A critical driver of performance across these segments is the Companys forward integration through its subsidiary, Durafloor Concrete Solutions LLP. Instead of operating as a commodity supplier, this entity allows Kasturi to execute tailored, end-to-end concrete flooring solutions directly. By controlling the application process downstream, the Company captures additional margin, ensures optimal application of its proprietary fibers, and interacts directly with architects, developers, and large-scale infrastructure clients.

Executive management views the Companys skilled human capital as the primary catalyst driving its strategic vision, and has fostered an internal culture focused on inclusivity, continuous technical learning, and uncompromising occupational safety. Because operations involve heavy, automated machinery for metallurgical, wire-drawing, and fiber-cutting processes, strict adherence to safety protocols is mandatory; rigorous, continuous safety training programs and environmental health standards are implemented at all plants to maintain a zero-harm workplace.

The Companys human resources are commensurate with the size, nature and operations of the business. Total permanent employee strength on rolls as on 31st March, 2026 stood at 94, and the Company continues to maintain open and cordial employee relations. The Vigil Mechanism plays an important role through which employees and directors can report genuine concerns to management. Industrial relations during the year remained stable and cordial.

94	90	4 Nil
Permanent employees	Mai e employees	Female employees POSH complaints k.

Internal Control Systems and Their Adequacy

The Company maintains a transparent framework of internal financial controls that the Board of Directors asserts are adequate and commensurate with the size, scale, and complexity of its expanding manufacturing operations. Comprehensive Standard Operating Procedures are embedded within procurement, manufacturing, inventory management, and sales lifecycles to safeguard assets, optimize resources, and ensure the accuracy of financial reporting. To independently validate control efficacy and ensure statutory compliance, the Company uses a multitiered audit architecture:

INTERNAL AUDIT

M/s. V. S. Jakhotiya & Co. appointed for FY 2026-27 to conduct risk-based process reviews.

& Associates LLP issued a completely unmodified opinion for the year ended March 31, 2026.

SECRETARIAL AUDIT

D. S. Momaya & Co. LLP appointed for FY 2025-26 to verify adherence to applicable laws.

Discussion on Financial Performance

During the financial year 2025-26, the Company recorded steady growth in operations, improved capacity utilization, and effective cost management. Consolidated revenue from operations grew by 12.98% to ^6,436.86 Lakhs, up from ^5,697.22 Lakhs in the previous year, supported by higher sales volumes across both core products and associated business operations.

Prudent cost control measures limited total expense growth to just 8.46%. This positive operating leverage expanded the Operating Profit Margin to 10.09%, up from 6.22% in the prior year. Consequently, Profit After Tax surged to ^396.39 Lakhs, lifting the Basic EPS to ^4.84. Furthermore, the successful IPO strengthened the balance sheet by increasing net worth, enhancing liquidity, and funding the new Amravati expansion, driving structural improvements across key indicators including the Current Ratio, ROCE, and ROE.

Significant changes in key financial ratios

Standalone. Change of 25% or more as compared to the immediately previous financial year, with explanations.

RATIONS	FY 24-25	FY 25-261	CHANGE	REASON
Debtors Turnover	6.52	11.80	81.02%	Decrease in receivables
Inventory Turnover	4.41	3.81	(13.54)%	Increase in average inventory
Interest Coverage Ratio	2.30	3.26	41.67%	Increase in earnings during the year
Current Ratio	2.23	2.85	27.55%	Increase in current assets
Debt Equity Ratio	0.24	0.48	(50.47)%	New shares issued during the year
Operating Profit Margin	3.17%	9.82%	239%	Higher revenue and reduction in costs
Net Profit Margin	5.05%	11.04%	139.29%	Increase in earnings during the year
Trade Payables Turnover	\u25a0 9.27	10.18	9.84%	Reduction in trade payables
Net Capital Turnover	3.39	2.22	(34.55)%	Increase in working capital
Return on Investment	5.73%	7.96%	39%	Increase in profits
Return on Net Worth	10.91%	14.45%	32.50%	Increase in profits

Disclosure of Accounting Treatment

The financial statements for the year ended 31st March 2026 have been prepared as prescribed in accounting standards and there is no change in treatment of the said accounting standards. Therefore, no explanation by the management is required for the same.