Maithan Alloys Ltd Management Discussions

MESSAGE FROM THE MANAGEMENT

The financial year 2025-26 was characterised by resilience, transition and renewed opportunities across the Indian industrial and manufacturing landscape. Against a backdrop of geopolitical uncertainty, changing global trade dynamics, commodity-price volatility and uneven global economic growth, the Indian economy continued to demonstrate strong underlying resilience.

For Maithan Alloys Limited, FY 2025-26 was marked by a significant improvement in revenue from operations, continued focus on operational efficiency, prudent financial management and further progress towards broadening the Groups business platform.

The Companys consolidated revenue from operations increased to ?2,172.59 crore in FY 2025-26 from ?1,805.61 crore in FY 2024-25, representing a growth of approximately 20.3%. Consolidated Profit After Tax stood at ?440.94 crore. The year-on-year decline in reported PAT needs to be viewed in the context of the exceptionally high investment and other income recorded in the preceding year.

The Companys core ferro alloy business continued to benefit from the structural growth of the Indian steel industry. At the same time, the Company continued to pursue opportunities for diversification and long-term value creation.

Management remains focused on strengthening the Companys core competitive advantages while selectively developing complementary businesses and maintaining a disciplined approach to capital allocation.

GLOBAL ECONOMIC ENVIRONMENT

The global economy remained resilient during FY 2025-26, although the operating environment continued to be shaped by geopolitical tensions, trade-policy uncertainty, changing tariff structures, supply-chain realignment and commodity-price volatility.

Major economies experienced different rates of growth. While inflationary pressures moderated from earlier peaks, monetary policies remained influenced by inflation expectations, employment conditions and economic activity.

For the metals and mining industry, global economic developments remain particularly important because steel production, energy prices, freight costs, manganese ore availability and currency movements directly influence ferro alloy demand and profitability.

The global steel industry continued to experience a mixed environment. Weakness in some mature economies was partly offset by growth in emerging markets, particularly India.

Going forward, global steel production is expected to remain an important determinant of ferro alloy demand. The transition towards cleaner steelmaking, increasing emphasis on energy efficiency and the changing geographical distribution of steel production are also expected to influence the ferro alloy industry.

INDIAN ECONOMIC ENVIRONMENT

India continued to remain among the fastest-growing major economies during FY 2025-26.

Domestic consumption, infrastructure development, manufacturing investment, government capital expenditure, urbanisation and expanding private-sector investment continued to support economic activity.

The Governments continued focus on roads, railways, ports, power, housing, defence, renewable energy and industrial infrastructure is expected to provide structural support to steel demand.

The Indian economys relatively strong domestic demand also provides a degree of insulation against weakness in global markets.

The combination of infrastructure-led investment and increasing manufacturing capacity is expected to remain a key driver of Indias steel consumption over the medium to long term.

For the ferro alloy industry, this represents an important structural opportunity because manganese alloys are essential inputs in steel manufacturing.

INDIAN STEEL INDUSTRY

The steel industry remains the principal demand driver for ferro alloys.

India continued to strengthen its position as one of the worlds leading steel producers during FY 2025-26. According to Ministry of Steel data, crude steel production increased strongly during the year, while finished steel consumption also registered healthy growth.

During April-December 2025-26, crude steel production increased by approximately 11.5% year-on-year, while finished steel consumption increased by approximately 7.0%.

This growth reflects the continued expansion of infrastructure, construction, automobiles, engineering, capital goods and manufacturing activity.

Indias steel demand is expected to remain structurally strong because of:

• Infrastructure development;
• Urbanisation;
• Housing demand;
• Railway expansion;
• Road and highway construction;
• Industrial investment;
• Automobile manufacturing;
• Renewable-energy infrastructure;
• Defence manufacturing; and
• Expansion of domestic steelmaking capacity.

The Indian steel industrys continuing capacity additions provide a favourable long-term demand environment for manganese alloys.

FERRO ALLOYS INDUSTRY

Ferro alloys are essential inputs in steel manufacturing. Manganese alloys are used principally as deoxidising and alloying agents and contribute to the strength, hardness, toughness and durability of steel.

The industrys fortunes are therefore closely linked to steel production.

The key factors influencing the ferro alloy industry include:

1. Domestic and global steel production;
2. Manganese ore prices and availability;
3. Power costs;
4. Ferro alloy realisations;
5. Freight and logistics costs;
6. Currency movements;
7. Export-import policies;
8. Environmental regulations; and
9. Global trade conditions.

The Indian ferro alloy industry continued to operate in a competitive and volatile environment during FY 2025-26.

While steel demand remained supportive, producers continued to face pressure from fluctuations in manganese ore prices, power costs and international ferro alloy realisations.

The ability to optimise raw-material sourcing, energy consumption, furnace efficiency and product mix therefore remains critical to sustainable profitability.

COMPANY OVERVIEW

Maithan Alloys Limited is an established manufacturer and exporter of manganese-based ferro alloys and has developed a strong reputation for quality, reliability and customer service.

The Companys principal products cater primarily to the steel industry and include value-added manganese alloys.

The Company has established manufacturing facilities in strategically important locations and serves customers in India as well as international markets.

The Companys competitive strengths include:

Established Industry Presence — The Company has built considerable experience and domain knowledge in the ferro alloys industry.

Strong Customer Relationships — The Company has developed relationships with leading steel manufacturers and industrial customers.

Manufacturing Capabilities — Its manufacturing infrastructure enables it to produce ferro alloys to customer-specific quality requirements.

Product Quality — Consistent product quality remains a key differentiator in supplying ferro alloys to large steel producers.

Financial Strength — The Companys strong financial position provides flexibility to pursue growth opportunities while maintaining prudent capital allocation.

Experienced Management — The Company benefits from an experienced management team with substantial knowledge of the ferro alloys and related industries.

OPERATING PERFORMANCE

The Companys core business continued to demonstrate resilience during FY26.

The operating performance was supported by:

• Strong domestic steel demand;
• Higher customer requirements;
• Increased steel production;
• Improved revenue generation;
• Continued focus on production efficiency;
• Effective cost management; and
• Disciplined procurement.

The Company remained focused on maintaining product quality while optimising its production economics.

In a commodity-linked business, managements ability to balance production volumes, product realisations, raw-material costs and power costs remains critical.

The Company continued to focus on this balance throughout FY26.

SEGMENT PERFORMANCE

The Group has progressively expanded its business activities beyond the traditional ferro alloy business.

The principal business remains ferro alloys, while the Group has also entered the real estate segment.

The ferro alloy business continues to be the principal operating engine of the Group.

The emerging real estate business provides an additional avenue for value creation and diversification, although its contribution and scale remain substantially smaller than the core ferro alloy business.

Management will continue to evaluate the performance and capital requirements of each business segment with emphasis on risk-adjusted returns.

RAW MATERIAL MANAGEMENT

The Company continued to focus on:

• Multiple sourcing options;
• Long-term supplier relationships;
• Quality optimisation;
• Inventory planning;
• Procurement efficiency;
• Monitoring of international prices; and
• Matching raw-material quality with product specifications.

Effective raw-material management remains one of the Companys principal competitive advantages.

EXPORTS AND INTERNATIONAL BUSINESS

The Companys international presence provides opportunities to participate in global demand for manganese alloys.

Export markets, however, are exposed to several external factors, including:

• Global steel production;
• International ferro alloy prices;
• Freight costs;
• Currency movements;
• Trade restrictions;
• Anti-dumping measures;
• Import duties; and
• Environmental regulations.

The Company will continue to pursue export opportunities selectively, while maintaining a strong domestic customer base.

The objective is to achieve an appropriate balance between domestic and export markets while protecting margins and managing market risks.

INVESTMENT AND TREASURY MANAGEMENT

The Company has maintained a significant investment portfolio and has generated meaningful income from its financial investments. During FY26, the Group continued to actively manage its investment portfolio.

Investment income and fair-value movements can result in fluctuations in year-to-year reported profit.

Management therefore remains conscious of the distinction between recurring operating profitability and investment-related gains.

The Companys treasury philosophy continues to emphasise:

• Capital preservation;
• Liquidity;
• Diversification;
• Risk management;
• Appropriate returns; and
• Alignment of investments with the Companys overall financial strategy.

CORPORATE SOCIAL RESPONSIBILITY

The Company believes that responsible corporate citizenship extends beyond financial performance.

The Group and its promoter ecosystem have undertaken initiatives in areas including:

Education

Supporting education and learning opportunities for underprivileged children through community-based learning initiatives.

Women Empowerment

Supporting livelihood-generation initiatives designed to provide income opportunities and skill development for women.

Healthcare

Supporting healthcare initiatives, including medical treatment and eye-care programmes.

Differently Abled

Providing support for the treatment, education and welfare of differently abled children.

Environment

Supporting tree plantation and environmental conservation initiatives.

Animal Welfare

Supporting initiatives aimed at animal protection and welfare.

Sports

Supporting talented sportspersons and promoting sporting disciplines including boxing, powerlifting and athletics.

The Company believes that inclusive social development is an important component of sustainable value creation.

OUTLOOK FOR FY 2026-27

The outlook for the Company remains constructive over the medium to long term.

Indias structural growth story remains favourable for steel and, consequently, ferro alloys.

The key growth drivers include:

Infrastructure

Continued government spending on roads, railways, ports, power and urban infrastructure.

Housing and Urbanisation

Rising urbanisation and housing demand are expected to support steel consumption.

Manufacturing

Government initiatives promoting domestic manufacturing and supply-chain localisation should support industrial steel demand.

Automotive

Growth in passenger vehicles, commercial vehicles, electric vehicles and auto components is expected to support steel demand.

Defence

Increasing domestic defence manufacturing and infrastructure investment represent additional sources of steel demand.

Renewable Energy

Wind, solar, transmission and storage infrastructure require substantial quantities of steel.

Steel Capacity Expansion

Expansion of domestic steelmaking capacity provides a structural opportunity for ferro alloy producers.

KEY PRIORITIES FOR FY 2026-27

The Companys strategic priorities for FY27 are expected to include:

1. Strengthening the core ferro alloy business — Maintaining leadership through product quality, reliability and customer service.
2. Improving operating efficiency — Enhancing furnace productivity, yield and energy efficiency.
3. Optimising procurement — Maintaining competitive raw-material costs while ensuring quality and reliability of supply.
4. Strengthening customer relationships — Deepening relationships with major steel producers and expanding the customer base.
5. Expanding market opportunities — Pursuing attractive domestic and export opportunities.
6. Prudent diversification — Developing new businesses selectively and allocating capital only where risk-adjusted returns are attractive.
7. Strengthening sustainability — Improving resource efficiency and reducing environmental impact.
8. Financial discipline — Maintaining liquidity, prudent leverage and disciplined capital allocation.
9. Creating shareholder value — Balancing growth investments with appropriate returns to shareholders.

VALUE CREATION PHILOSOPHY

Maithan Alloys long-term value creation philosophy is based on five pillars:

OPERATING EXCELLENCE — Delivering consistent product quality at competitive costs.

FINANCIAL DISCIPLINE — Maintaining a strong financial position and prudent capital allocation.

CUSTOMER TRUST — Building enduring relationships with customers through reliability and quality.

RESPONSIBLE GROWTH — Pursuing diversification and expansion opportunities without compromising financial discipline.

STAKEHOLDER VALUE — Creating sustainable value for shareholders, employees, customers, suppliers and communities.

CONCLUSION

FY 2025-26 demonstrated the resilience of Maithan Alloys Limiteds core business.

Despite a volatile global environment, the Company achieved approximately 20% growth in revenue from operations, reflecting strong business activity and continued demand for its products.

The Companys profitability was affected by the normalisation of investment-related income compared with the exceptionally strong performance of FY25. Nevertheless, the underlying operating platform remains robust.

Indias continuing infrastructure development, manufacturing expansion, urbanisation and steel capacity additions provide a favourable structural backdrop for the Companys core ferro alloy business.

At the same time, the Group plans to develop additional business opportunities in areas such as real estate, high-tension cables, financial Investments and strategic consolidation.

Management will continue to pursue these opportunities with a disciplined approach, while protecting the Companys core strengths.

The Companys priorities remain clear:

• Strengthen the core.
• Improve efficiency.
• Diversify selectively.
• Manage risks prudently.
• Invest responsibly.
• Create sustainable long-term value.

The management remains cautiously optimistic about the Companys prospects and believes that Maithan Alloys is well positioned to participate in Indias long-term industrial growth story.

Financial Analysis, 2025-2026

The revised financial statement has been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 and other applicable provisions of the Companies Act, 2013 read with the Rules framed thereunder.

The financial analysis is based on the revised Standalone Financial Statement of the Company for the financial year ended 31 March 2026, which has been prepared after giving accounting effect of the merger of Impex Metal & Ferro Alloys Limited into the Company and include restated comparative Financial Statement and other financial information for the financial year ended 31 March 2025.

PROFIT AND LOSS ACCOUNT ANALYSIS

Total income

Total income increased by 3.19% during the financial year 2025-2026, i.e. from ?2550.37 crore in the financial year 2024-2025 to ?2631.85 crore in the financial year 2025-2026 mainly on account of higher sales realization.

EBITDA

The Companys EBITDA decreased by 30.03% during the financial year 2025-2026, i.e. from ?891.28 crore in the financial year 2024-2025 to ?623.61 crore in the financial year 2025-2026 due to decrease in other income.

Finance costs

Finance costs increased by 94.77% during the financial year 2025-2026, i.e. from ?21.01 crore in the financial year 2024-2025 to ?40.92 crore in the financial year 2025-2026 owing to increase in interest cost.

Other incomes

Other income decreased by 38.93% during the financial year 2025-2026, i.e. from ?725.35 crore in the financial year 2024-2025 to ?442.95 crore in the financial year 2025-2026.

Tax expenses

Tax expenses decreased by 40.73% during the financial year 2025-2026, i.e. from ?218.43 crore in the financial year 2024-2025 to ?129.46 crore in the financial year 2025-2026 owing to lower taxable profits.

Net profit

Net profit stood at ?434.77 crore for the financial year ended 31 March 2026 as compared to ?631.07 crore for the financial year ended 31 March 2025, registering a decrease of 31.11% due to decrease in other income.

BALANCE SHEET ANALYSIS

Net worth

Net worth stood at ?4151.54 crore as on 31 March 2026 compared to ?3754.48 crore as on 31 March 2025 i.e. an increase of 10.58%. Net worth comprises of paid up equity capital of ?29.11 crore and other equity of ?4122.43 crore, as on 31 March 2026.

Loan profile

Total loan funds stood at ?230.79 crore including lease liability of ?1.90 crore, as on 31 March 2026 as compared to ?565.08 crore including lease liability of ?3.22 crore, as on 31 March 2025.

Trade payables and other current liabilities

Trade payables and other current liabilities amount to ?206.12 crore as at 31 March 2026 as compared to ?171.13 crore as at 31 March 2025.

Total assets

Total assets increased by 1.07% during the financial year 2025-2026, i.e. from ?4803.10 crore as on 31 March 2025 to ?4854.48 crore as on 31 March 2026.

Inventories

Inventories increased by 11.96% during the financial year 2025-2026, i.e. from ?602.24 crore as on 31 March 2025 to ?674.30 crore as on 31 March 2026. Inventories comprises of raw material amounting to ?220.75 crore, work-in-progress worth ?1.80 crore, finished goods worth ?245.58 crore (including in-transit), stock-in-trade worth ?47.48 crore, stores and packing materials worth ?15.42 crore and Land bank worth ?143.27 crore as on 31 March 2026.

Sundry debtors

Sundry debtors stood at ?127.95 crore as on 31 March 2026 compared to ?145.44 crore as on 31 March 2025 resulting in decrease of 12.02%.

Cash, cash equivalents and Other bank deposits

Cash, cash equivalents and other bank deposits as on 31 March 2026 stood at ?87.31 crore compared to ?53.07 crore as on 31 March 2025.

Current investments

Current investments as on 31 March 2026 stood at ?1653.12 crore compared to ?1977.82 crore as on 31 March 2025.

Working capital management

Total Current assets as on 31 March 2026 stood at ?3232.29 crore compared to ?3250.31 crore as on 31 March 2025. Current liabilities stood at ?526.74 crore as on 31 March 2026 compared to ?815.68 crore as on 31 March 2025. Current ratio as on 31 March 2026 stood at 6.14 compared to 3.98 as on 31 March 2025.

KEY FINANCIAL RATIOS

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR: (i.e. change of 25% or more as compared to the immediately previous financial year)

There are significant change in the following key financial ratios as compared to the previous financial year mainly due to decrease in the other income, resulting in lower profits during the financial year under review.

1. Interest Coverage Ratio decreased from 31.56 to 15.83 due to increase in average current borrowings during the financial year 2025-2026.
2. Current Ratio increased from 3.98 to 6.14 due to decrease in current borrowings and reduction in trade payable during the financial year 2025-2026.
3. Operating Profit Margin decreased from 7.95% to 7.41% due to increased in Power Cost during the financial year 2025-2026.
4. Net Profit Margin decreased from 34.58% to 19.86% due to decrease in Other Income during the financial year 2025-2026.
5. Return on Equity decreased from 18.28% to 11.00% due to decrease in Other Income during the financial year 2025-2026.
6. Debtors Turnover Ratio improved from 6.85 to 16.01 times during the financial year 2025-2026. The low ratio in financial year 2024-2025 was due to high sales at the end of financial year 2023-2024, payment for which had not become due on 31 March 2024.
7. Debt Equity Ratio decreased from 0.15 to 0.06 times due to decrease in current borrowings during the financial year 2025-2026.
8. Return on Capital Employed decreased from 19.16% to 13.29% due to decrease in other income during the financial year 2025-2026.
9. Return on Investment decreased from 19.55% to 10.85% due to drop in other income during the financial year 2025-2026.
10. Inventory Turnover Ratio decreased from 3.83 to 3.43 times due to increase in Inventory during the financial year 2025-2026.

Please also refer to Note No. 55 to the Revised Standalone Financial Statement for other Financial Ratios.

KEY NUMBERS

Particulars	Financial Year 2025-2026	Financial Year 2024-2025
EBITDA/Turnover	28%	49%
EBITDA/Net interest	15.24	42.42
Debt-equity ratio	0.06	0.15
Book value per share (?)	1426.08	1289.69
Earnings per share (?)	149.35	216.78

Details of change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanations thereof:

The Return on Net worth was 11.00% during the financial year 2025-2026 as compared to 18.28% during the financial year 2024-2025. The decrease in Return on Net worth by 39.84% is due to decrease in Other Income during the financial year 2025-2026.

RISK MANAGEMENT

Risk management is applied across all management levels and functional/project areas. Risk management initiatives are overseen by the Risk Management Committee. The committee members provide overall coordination of risk management processes and perform day-to-day monitoring of the risk management process across all segments of business.

Our risk management structure:

Risk Identification: Definition and descriptions of risk elements including sources, events, causes and impacts.

Risk Assessment: Analysing risk, its implications and forms of impact on the achievement of Maithan.

Development, assessment and follow-up: Developing, implementing and following up on risk management activities to achieve organisational goal.

Monitoring: Supervising the identification, assessment, implementation and follow-up of risk management.

PRINCIPAL RISKS AND THEIR MITIGATION MEASURES

Business risks

Industry risk (External risk)

Potential Impact:

• Slowdown in product offtake
• Cyclical nature of steel industry
• Unfair trade practices and remedial measures

Mitigation measures:
With a complete basket of ferro alloys product, strong relationship with the customers and financial flexibility, Maithan at present is in a sweet spot and is in a position to grow faster than the Industry.

Quality risk (Internal risk)

Potential Impact:

• Inconsistent product quality
• Erratic quality of raw materials procured

Mitigation measures:
The Company works rigorously on the quality front with streamlined operating procedures. Stringent quality checks are followed to mitigate the risk, for both inward and outward supply of goods and materials.

Pandemic risk (External risk)

Potential Impact:

• Risk of loss of production
• Risk of availability of manpower

Mitigation measures:
Strict adherence to Government Guidelines to counter pandemic, vaccination of manpower, necessary response measures including factory shutdowns, disinfecting and deploying safety measures in the factory and office premises, encouraging employees to maintain adequate social distance, etc. have been undertaken.

Strategic risk (Internal risk)

Potential Impact:

• Risk of erroneous strategic business decisions

Mitigation measures:
The Company has been conservative regarding business expansions. It only considers assets if the valuations fit the Companys comfort level.

Geographic risk (External risk)

Potential Impact:

• Risk of locational disadvantages
• Risk of limited area of market

Mitigation measures:
The Companys Kalyaneshwari unit is located in the steel belt of India while the Visakhapatnam unit of the Company is close to two deep sea ports. Besides servicing Indian customers, the Company is servicing customers across countries.

Operational risks

Input Cost risk (Internal risk)

Potential Impact:

• Risk of increased cost of operations
• Volatile rates of raw materials

Mitigation measures:
The Company is among the low cost manufacturers of ferro alloys and has superior process controls. The Company has strong relationships with its suppliers. It has PPA agreements with power utilities for supplying uninterrupted power at pre-determined prices. To minimise the commodity risk, the Company maintains a close matching between order book and inventory book.

Logistics risk (External risk)

Potential Impact:

• Congestion, strikes, channel blockages
• Storage, transportation and material handling risks

Mitigation measures:
The Companys manufacturing units are proximate to key downstream users as well as ports, facilitating ease of raw material imports and finished products exports.

Human capital risk (Internal risk)

Potential Impact:

• Inability to attract and retain talent
• High employee attrition
• Inadequate training and employee errors
• Low employee productivity

Mitigation measures:
The Company has emerged as one of the sought-after destination for prospective employees. Over the years the Company has created a dedicated team driving the business. The employees are regularly trained in a harmonious work environment. The Company enjoys one of the best retention rates in the industry.

Liquidity risk (Internal risk)

Potential Impact:

• Risk caused by inadequate liquidity
• Shortage of funds

Mitigation measures:
The Company has caused and liquid investments including Bank Deposits in excess of ?2798 crore. The Company enjoyed a current ratio of 6.14 as on 31 March 2026.

Currency fluctuation risk (External risk)

Potential Impact:

• Adverse impact on profitability
• Fluctuation in foreign exchange rate

Mitigation measures:
The Company endeavours to avail the benefit of natural hedge by exporting more than it imports. However, whenever necessary currency fluctuation risk is mitigated through hedging mechanism.

For details of Financial Risk, please refer to Note No. 49 to the Revised Standalone Financial Statement.

HUMAN RESOURCES

The Company believes that its intrinsic strength lies in its dedicated and motivated employees. As such, the Company provides competitive compensations, an amiable work environment and acknowledges employee performance through a planned reward and recognition programme. The Company aims to create a workplace where every person can achieve his or her true potential. The Company encourages individuals to go beyond the scope of their work, undertake voluntary projects that enable them to learn and devise innovative ideas.

The total number of employees on the payroll of the Company as on 31 March 2026 was 446.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The internal control and risk management system is structured and applied in accordance with the principles and criteria established in the corporate governance code of the organisation. It is an integral part of the general organisational structure of the Company and Group and involves a range of personnel who act in a coordinated manner while executing their respective responsibilities. The Board of Directors provide its guidance and strategic supervision to the Executive Directors and management and committees of the Board. The Executive Directors and the heads of the accounts department maintain constant dialogue with the Auditors.

DISCLOSURE OF ACCOUNTING TREATMENT

In the preparation of financial statements, Company has followed such accounting treatment that has been prescribed in an Accounting Standard.

CAUTIONARY STATEMENT

This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be forward looking statements within the meaning of applicable securities laws and regulations.

Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company.

The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent development, information or events.