Manaksia Aluminium Company Ltd Management Discussions

"Manaksia is amongst the countrys leading producers of Aluminium Flat Rolled Products. The factories of your company are equipped with high performance continuous horizontal strip caster, State of the ArtCold rolling mill and machinery like Cut – to – Length, tension leveller, slitter, Annealing Furnace that help producing Aluminium Sheet and Coil to meet the requirements of general as well as specific applications."

Key Statistics:

50,914.75	4,392.21	8.63%	2818.90	17,241.96
Revenue (Rs Lakhs)	EBITDA (Rs Lakhs)	EBITDA Margin (%)	Capital work-in- progress ( Rs Lakhs)	Aluminium metal production(MT)

GLOBAL ECONOMY OVERVIEW

In 2024-25, the growth trajectory of the world economy remained relatively stable but turned fragile towards the end of the period.

Early in the fiscal year, global GDP growth hovered well above 3%, supported by resilient consumer demand in the US and India, steady recovery in Europe and a fiscal spending-led growth in China. The US economy added over 1.7 million jobs during this period. In September 2024, China announced a series of stimulus to boost its economy, cheering investors. Also, the US central bank cut interest rate by a more-than-expected 50 bps in the same month. However, conditions worsened in the second half of the financial year. Indian GDP growth slipped to 5.6% in Q3 as government spending slowed. Donald Trump returned as US President in November 2024 and began implementing aggressive tariff, anti-immigration policies and spending cuts from Q4. Business sentiments inside and outside US began to sour and international trade volumes declined amid abrupt changes in US policies, an extended pause in US rate cuts due to rising inflation expectations, and geopolitical tensions.

The fear of sharp slowdown in US, due to policies under the new administration, pulled down the Dollar Index at the quickest pace since 1970s.

Despite these uncertainties, global GDP growth rate stayed steady. In its World Economic Outlook report of July 2025, IMF projected world GDP to grow at 3% and 3.1% respectively in 2025 and 2026.

INDIAN ECONOMY OVERVIEW

Amidglobal uncertainties, India emerged as a relative outperformer, thanks to its robust service sector and consumption-led growth model.

After having lifted the economic growth with heavy infrastructure spendings in the past years, the Indian government changed its focus to fiscal prudence by slowing its aggressive spending plan and leaving more money in the hands of consumers by way of tax cuts. In addition to rate cuts, Reserve Bank of India infused liquidity in the Indian monetary system to offset outflows from foreign institutional investors.

Imposition of a 50% US tariffs, from August 2025, has weighed on a few industries in the Indian export sector. Yet, S&P Global upgraded countrys sovereign rating while affirming that Indias growth trajectory remained intact.

COMMODITY MARKETS OVERVIEW

The Chinese construction sector continued to contract in 2024-25. However, countrys demand for base metals was more than offset by record capacity addition in renewable electricity generation and a stimulus-supported growth in Electric Vehicles (EVs).

On the other hand, industrial growth in Western world was soft but stable. Slowing automotive sales contributed to a gradual deceleration in Indian industrial output growth.

Aluminium prices were volatile, but within their usual range of $2200-2700.

Possible shortage of Alumina, due to partial restriction on export of Bauxite from Guinea, worlds largest exporter, pulled Alumina prices to a record high in Oct-Dec 2024 quarter. This helped lift Aluminium from $2200, in August 2024 to above-$2700 by early March 2025. The upswing was also helped by fear of supply disruptions due to 25% tariff on US imports and weak US Dollar.

However, fear of demand contraction and slowing imports in US, after a hefty 25% tariff from March, pulled prices back to sub-$2400 before the end of the financial year.

Rangebound prices helped your company to put all its energies on growth and productivity improvement.

ALUMINIUM INDUSTRY OUTLOOK

Global Aluminium consumption grew steadily in 2024-25, led by demand from the electricity transmission and durable goods. Moreover, a record year of renewable power generation capacity addition in China supported more than offset demand slowdown from countrys ailing property sector.

The demand growth of Aluminium is likely to remain positive in the next year due to metals wide variety of usage – from industrial to consumer sectors. Aluminiums lightweight and strength is crucial in various industries, including aerospace, automotive, construction, and electronics. Its corrosion resistance and conductivity make it valuable in packaging and transportation. Automotive manufacturers are increasingly using aluminium to reduce vehicle weight and improve fuel efficiency.

While additions of new primary aluminium smelters is slowing in China, the country is adding recycling capacity. Deceleration in global growth momentum and hefty tariffs in US could curtail global demand growth of Aluminiumin the next year. This may result in a small surplus of the metal.

GROWTH FACTORS KEY MARKET DRIVERS

Secondary aluminiums rising popularity will promote growth

• An important portion of the worlds usage of aluminium is secondary or recycled aluminium. Because of its cost-effectiveness, scrap from machinery, automobiles, equipment, and beverage cans is recycled and reused. Reprocessing used metal or scrap uses a small portion of the energy needed to make brand-new metal from ore, minimizing the harm to the environment.

• Additionally, initiatives including the creation of car dismantling, shredder, and environmental safety centres are anticipated to promote market expansion. The widespread use of the material in the transportation sector is also predicted to boost aluminium consumption.

Numerous uses across several industries, and expanding building industries

• Due to its distinct physical characteristics, aluminium is in higher demand across a wider spectrum of industries and has more uses. Because metal is lightweight and has good electrical conductivity, aluminium is utilized for long-distance transmitting power. Because it can be easily moulded and worked into the fuselage and wings of light planes, aluminium alloys like 6061 are frequently utilized in this sector. Its high corrosion resistance makes it the perfect material for use in aircraft. Due to its thermal characteristics, aluminium is utilized in refrigeration, air conditioning, and heat transfer systems.

• Additionally, because of its malleability, this metal can be shaped into thin strips and employed in the packaging sector. Siding, roofing, transparent panels, doorframes, window, staircases, central heating, furnishings, air conditioning systems, and many other things are made with it in building projects.

KEY MARKET OPPORTUNITIES

Aluminium is good electricity and heat conductivity and is reasonably priced

• Aluminium is flexible, robust, and doesnt easily melt or distort when exposed to high temperatures. Additionally, it is lightweight, will not rust or corrode readily, and is a superior heat and electrical conductor. The worldwide car industry is increasingly preferring aluminium since it is reasonably inexpensive. This is understood by aluminium processors all over the world. To strive to build future generations of automotive components that are better in all of the aforementioned features and at a significantly lower cost point, they are spending a lot of money on development and research.

End-Use Industry Insights

In terms of the end-user, the transport sector held the biggest market share. This markets expansion is being driven by the growing use of metal in automobiles due to its lighter lightweight and improved physical characteristics. Many emerging countries are making significant investments to build out their infrastructure. These countries are likewise progressing quickly. As more people throughout the world own cars, the global aluminum sector is anticipated to grow with the automotive industry worldwide.

Because more people throughout the world drive cars, the transportation sector dominated the global aluminum market in 2021. As a result, expansion in the global transportation sector is anticipated to fuel expansion in the global aluminum market. During the projection period, the packing sector is anticipated to increase at a significant CAGR. This industry is expected to increase as a result of the growing demand for aluminum from producers of packaged foods because of its non-permeable properties.

Regional Insights

Due to reasons like rapid and widespread industrialization, quick and widespread urbanization, increasing investment and activities in infrastructure and infrastructure, and development in the automobile industry, Asia-Pacific is predicted to have the fastest expanding market. Because big consumers like Japan, China, and India are present, it is the main factor driving the markets expansion. The regions desire for metal is being driven by the expanding construction and automobile industries. The market is expanding in Europe as a result of factors like the introduction of legislation to reduce automobile pollution and the strong demand from end-use sectors like solar cells and packing.

Overview of Operations Results

During the year under review, the total revenue of your Company stood at 50,914.75 lacs, as compared to 43,249.30 lacs during the year ended on March 31, 2024. The Company made a profit of 597.57 lacs as compared to a profit of 502.43 lacs during the year ended on March 31, 2024.

Projection for the Financial Year 2024-2025

The company continues to follow the various steps initiated in the previous financial year, for improving the profitability in the future years. These steps include:

• Focusing on developing new customers in India and Overseas for value added products by marketing Colour Coated Aluminium Sheet/Coils, Embossed Sheet/Coils.

• Initiating steps for improving quality of Finished Products, to help in increasing the top line and customer satisfaction, leading to improved margins.

• The Company is also expanding its domestic market Size with concrete focus on expanding sales in Northern and Southern Region of India.

• Revamping of Plant & Machineries to reduce cost of conversion.

• Initiating steps for cost reduction by curtailing certain costs like power & fuel, manpower, administration, and scheduled repair & maintenance. Rationalizing contractual and own employees to reduce manpower cost.

• Developing new suppliers of raw materials in Australia, UK, UAE and other European countries for taking advantage of competitive rates and better quality.

Risks and Concerns

The Company is exposed to several inherent market risks from its normal business activities. These risks include changes in raw material prices, foreign currency exchange rate, interest rate which may adversely impact the Companys financial assets, liabilities and/or future cash flows. The Company is trying to mitigate these risks by carefully planning an optimum sales mix, product diversification, innovation and penetration of domestic and international markets and active treasury management, Further cost saving measures across all segments of the Company, would help in improving the margins in an otherwise difficult market.

Internal Control System

The Company maintains all its records in ERP (SAP) System and the work flow and approvals are routed through ERP (SAP). The Company has appointed Internal Auditors to examine the Internal Controls and verify whether the workflow of the organization is in accordance with the approved policies of the Company. In every Quarter, during approval of Financial Statements, the Internal Auditors present to the Audit Committee the Internal Audit Report and Management Comments on the Internal Audit observations.

Key Financial Ratios

In accordance with SEBI ( Listing Obligations & Disclosure Requirements) ( Amendment) Regulations, 2018, the Company is required to give details of significant changes in Financial Ratios (i.e., change of 25% or more as compared to the immediately previous financial year) along with a detailed explanation thereof.

Particulars	FY 2024-25	FY 2023-24	Year to Year change	Year to year change (%)
Debtors Turnover ( Times)	9.60	9.12	0.48	5.26%
Inventory Turnover (Times)	2.27	2.34	(0.07)	(2.99%)
Interest Coverage Ratio (Times)	1.02	1.17	(0.15)	(12.82%)
Current Ratio ( Times)	1.16	1.21	(0.05)	(4.13%)
Debt Equity Ratio	1.77	1.33	0.44	33.08%*
EBITDA Margin (%)	8.63%	8.32%	0.31	3.73%
Net Profit Margin (%)	1.19%	1.18%	0.01	0.85%
Return on Net worth (%)	4.56%	3.99%	0.57	14.29%

* Major Increase in Debt Equity Ratio is due to increase in production related activities.

Human Resources

The Company believes that the quality of the employees is the key to its success and is committed to providing necessary human resource development and training opportunities to equip employees with additional skills to enable them to adapt to contemporary technological advancements. Industrial relations during the year continued to be cordial and the Company is committed to maintain good industrial relations through effective communication, meetings and negotiation.

Key initiatives with respect to Stakeholder relationship

A Stakeholders relationship committee is formed for reviews of statutory compliances and services relating to security holders, dividend payments and performance of Registrar and Transfer Agents. No complains was raised or received from any shareholders during the year.

Finance Cost

Finance Cost, during the year under review stood at 2,752.68 lacs, as compared to 2,157.08 lacs during the period ended on March 31, 2024. This increase is on account of increased investment by the Company in production related activities and maximum shipments to USA on DDP Incoterms.

Cautionary Statement

Statements in this Managements Discussion and Analysis Report describing MALCOs estimates and expectations may be forward-looking statements. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to MALCOs operations include economic conditions affecting demand and supply for the products manufactured by the company; price conditions in the domestic and overseas markets in which the company operates; changes in Government regulations, tax laws, statutes and other incidental factors.