Manaksia Coated Metals & Industries Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

Global economic review

Overview

Global economic growth declined marginally from 3.3% in 2023 to an estimated 3.2% in 2024. This was marked by a slowdown in global manufacturing, particularly in Europe and parts of Asia coupled with supply chain disruption and weak consumer sentiment. In contrast, the services sector performed more creditably.

The growth in advanced economies remained steady at 1.7% from 2023 to 2024 as the emerging cum developing economies witnessed a growth decline at 4.2% in 2024 (4.4% in 2023).

On the positive side, global inflation was expected to decline from 6.1% in 2023 to 4.5% in 2024 (projected at 3.5% and 3.2% in 2025 and 2026, respectively). This decline was attributed to the declining impact of erstwhile economic shocks, and labour supply improvements. The monetary policies announced by governments the world over helped keep inflation in check as well.

The end of the calendar year was marked by the return of Donald Trump as the new US President. The new US government threatened to impose tariffs on countries exporting to the US unless those countries lowered tariffs for the US to export to their countries. This enhanced global trade and markets uncertainty and emerged as the largest singular uncertainty in 2025.

Regional growth (%)	2024	2023
World output	3.2	3.3
Advanced economies	1.7	1.7
Emerging and developing economies	4.2	4.4

(Source: IMF, KPMG, Press Information Bureau, BBC, India Today)

Performance of the major economies, 2024

United States: Reported GDP growth of 2.8% in 2024 compared to 2.9% in 2023.

China: GDP growth was 5.0% in 2024 compared to 5.2% in 2023.

United Kingdom: GDP growth was 0.8% in 2024 compared to 0.4% in 2023.

Japan: GDP growth was 0.1% in 2024 compared with 1.9% in 2023.

Germany: GDP contracted by 0.2% in 2024 compared to a 0.3% decline in 2023.

(Source: CNBC, China Briefing, ons.gov. uk, Trading Economics, Reuters)

Outlook: The global economy has entered a period of uncertainty following the imposition of tariffs of products imported into the USA and some countries announcing reciprocal tariffs on US exports to their countries. This is likely to stagger global economic growth, the full outcome of which cannot be currently estimated. This risk is supplemented by risks related to conflicts, geopolitical tensions, trade restrictions and climate risks. In view of this, World Bank projected global economic growth at 2.7% for 2025 and 2026, factoring the various economic uncertainties. (Source: IMF, United Nations)

Indian economic review

Overview

The Indian economy grew at 6.5% in FY 2024-25, compared to a revised 9.2% in FY 2023-24. This represented a four-year low due to a moderate slowdown within the Indian economy (marked by slower manufacturing growth and a decline in net investments). Despite the slowdown, India retained its position as the worlds fifth-largest economy.

Indias nominal GDP (at current prices) was Rs.330.68 trillion in FY 2024-25 (Rs.301.23 trillion in FY 2023-24). The nominal GDP per capita increased from Rs.2,15,936 in FY 2023-24 to Rs.2,35,108 in FY 2024-25, reflecting the impact of an economic expansion.

The Indian rupee weakened 2.12% against the US dollar in FY 2024-25, closing at Rs.85.47 on the last trading day of FY25. In March 2025, the rupee recorded the highest monthly appreciation since November 2018, rising 2.39% (arising out a weakening US dollar).

Inflationary pressures eased, with CPI inflation averaging 4.63% in FY 2024-25, driven by moderating food inflation and stable global commodity prices. Retail inflation at 4.6% in fY 2024-25, was the lowest since the pandemic, catalysing savings creation.

Indias foreign exchange reserves stood at a high of $676 billion as of 4^th April 2025. This was the fourth consecutive year when rating upgrades outpaced downgrades on account of strong domestic growth, rural consumption, increased infrastructure investments and low corporate leverage (annualised rating upgrade rate 14.5% exceeded the decade-long average of 11%; downgrade rate was 5.3%, lower than the 10-year average of 6.5%).

Gross foreign direct investment (FDI) into India rose 13.6% to $81 billion during the last financial year, the fastest pace of expansion since 2019-20. The increase in the year was despite a contraction during the fourth quarter of FY 2024-25 when inflows on a gross basis declined 6% to $17.9 billion due to the uncertainty caused by Donald Trumps election and his assertions around getting investments back into the US.

Growth of the Indian economy

	FY22	FY23	FY24	FY25
Real GDP growth (%)	8.7	7.2	9.2	6.5
(Source: MoSPI, Financial Express)

Growth of the Indian economy quarter by quarter, FY 2024-25

	Q1FY25	Q2 FY25	Q3 FY25	Q4 FY25
Real GDP growth (%)	6.5	5.6	6.2	7.4

(Source: The Hindu, National Statistics Office)

The banking sector continued its improvement, with gross nonperforming assets (NPA) for scheduled commercial banks (SCBs) declining to 2.6% as of September 2024, down from 2.7% in March 2024. The capital- to-risk-weighted assets ratio for SCBs stood at 16.7% as of September 2024, reflecting a strong capital position.

Indias exports of goods and services reached $824.9 billion in FY 2024-25, up from $778 billion in the previous fiscal year. The Red Sea crisis impacted shipping costs, affecting price-sensitive exports. Merchandise exports grew 6% YoY, reaching $374.1 billion.

Indias net GST collections increased 8.6%, totalling Rs.19.56 lakh crore in FY 2024-25. Gross GST collections in FY 2024-25 stood at Rs.22.08 lakh crore, a 9.4% increase YoY.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in FY 2024-25. The industrial sector grew by 6.5%, supported by growth in construction activities, electricity, gas, water supply and other utility services.

Indias services sector grew at 8.9% in FY25 (9.0% in FY24), driven by public administration, defence and other services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in FY25, compared to 8.6% in FY24. Meanwhile, the construction sector expanded at 9.4% in FY25, slowing from 10.4% in the previous year.

Manufacturing activity was subdued in FY25, with growth at 4.5%, which was lower than 12.3% in FY24. Moreover, due to lower public spending in the early part of the year, government final consumption expenditure (GFCE) is anticipated to have slowed to 3.8% in FY25, compared to 8.1% in FY24.

The agriculture sector grew at 4.6% in FY 2024-25 (1.4% in FY 2023-24). Trade, hotel, transport, communication and services related to broadcasting segment were estimated to grow at 6.4% in 2024- 25 (6.3% in FY 2023-24).

From a demand perspective, the private final consumption expenditure (PFCE) exhibited robust growth, achieving 7.2% in FY 2024-25, surpassing the previous financial years rate of 5.6%.

The Nifty 50 and SENSEX recorded their weakest annual performances in FY 25 in two years, rising 5.3% and 7.5% during the year under review respectively. Gold rose 37.7% to a peak of $3,070 per ounce, the highest increase since FY 2007-08, indicating global uncertainties.

Total assets managed by the mutual fund (MF) industry jumped 23% or Rs.12.3 lakh crore in fiscal 2025 to settle at Rs.65.7 lakh crore. At close of FY25, the total number of folios had jumped to nearly 23.5 crore, an alltime peak. During last fiscal, average monthly systematic investment plan (SIP) contribution jumped 45% to Rs.24,113 crore.

Foreign portfolio investments (FPIs) in India experienced high volatility throughout 2024, with total inflows into capital markets reaching approximately $20 billion by year- end. However, there was significant selling pressure in the last quarter, influenced by new tariffs announced by the new US government on most countries (including India).

Outlook

India is expected to remain the fastest-growing major economy.

Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tariff levies on India and other countries. The following are some key growth catalysts for India in FY26.

Union Budget FY 2024-25:

The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasising agriculture, MSMEs, investment, and exports as the four primary growth engines.

With a fiscal deficit target of 4.4% of GDP, the government reinforced fiscal prudence while allocating Rs.11.21 lakh crore for capital expenditure (3.1% of GDP) to drive infrastructure development. The February 2025 Budget marked a shift in approach, with the government proposing substantial personal tax cuts. Effective 1^st April 2025, individuals earning up to Rs.12 lakh annually will be fully exempt from income tax. Economists estimate that the resulting Rs.1 lakh crore in tax savings could boost consumption by Rs.3-3.5 lakh crore, potentially increasing the nominal private final consumption Expenditure (PFCE) by 1.5-2% of its current Rs.200 lakh crore.

Free trade agreement: In a postBalance Sheet development, India and the United Kingdom announced a free trade agreement to boost strategic and economic ties. This could lead to a significant increase in the export competitiveness of Indian shipments in the UK across the textiles, toys, leather, marine products, footwear, and gems & jewellery sectors. About 99% of Indian exports to UK will enjoy zero-duty access tariff cuts;

India will cut tariffs on 90% of tariff lines and 85% could become fully duty-free within 10 years.

Pay Commission impact: The 8^th

Pay Commissions awards could lead to a significant salary revision for nearly ten million central government employees. Historically, Pay Commissions have granted substantial pay hikes along with generous arrears. For instance, the 7^th Pay Commission more than tripled its monthly salaries, raising the range from Rs.7,000 to Rs.90,000 to Rs.18,000 to Rs.12.5 lakh, triggering a widespread ripple effect.

Monsoons: The India Meteorological Department predicted an above normal monsoon in 2025. This augurs well for the countrys farm sector and a moderated food inflation outlook.

Easing inflation: Indias consumer price index-based retail inflation in March 2025 eased to 3.34%, the lowest since August 2019, raising hopes of further repo rate cuts by the Reserve Bank of India.

Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of FY 202526. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26.

Lifting credit restrictions:

In November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to 9-13% between September 2023 and 2024. However, under its new leadership, the RBI has prioritised restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks, and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Indian steel industry overview

The Indian flat steel industry forms a crucial component of the countrys steel sector, supporting a wide range of industries including construction, automotive, white goods, and infrastructure. Flat steel products such as hot rolled coils (HRC), cold rolled coils (CRC), galvanised steel, and pre-painted galvanised steel (PPGI) are essential materials used across core sectors. In FY24, Indias finished steel consumption rose to 138.5 million tonnes (MT) reflecting a robust 15.6% year-on-year growth. It was backed by strong government push through schemes like the National Infrastructure Pipeline, Gati Shakti, and PLI for Specialty Steel, aimed at promoting domestic production and value addition.

India also strengthened its position as the second-largest producer of crude steel, with production reaching 143.6 MT in FY24, up from 125.3 MT in FY23. The countrys installed steel-making capacity stood at 154 MT as of March

2023, with plans to expand to nearly 300 MT by 2030 under the National Steel Policy 2017. Leading producers such as JSW Steel, Tata Steel, and SAIL continue to invest in downstream flat steel capabilities and product differentiation. Despite a high domestic output, India turned into a net importer of finished steel in FY24, with imports rising 38% YoY to 8.3 MT, driven by low-priced global supplies and strong local demand. At the same time, exports rose by 11.5% to 7.5 MT, showing resilience in overseas markets.

The construction and infrastructure sector remains the dominant consumer, accounting for nearly 60% of total flat steel consumption, followed by the automotive and white goods sectors, which together contribute around 20-25%. Urbanisation, housing growth, and transport corridor development have kept demand elevated. Flat steel prices also remained firm, with hot rolled coils averaging Rs.49,200-51,200 per tonne and CRC at Rs.58,000-62,000 per tonne in late FY24. The flat steel segment is expected to grow at 8-9% annually, supported by higher per capita steel consumption (currently below the global average of ~240 Kg), rising industrial output, and an increasing share of value- added coated steel products.

However, the sector faces challenges such as raw material price volatility, import dependency for coking coal, and logistics and infrastructure bottlenecks, particularly in the eastern and central belts. Import competition from countries like China, Korea, and Vietnam also adds pricing pressure on domestic players. To counter this, the government is considering safeguards like antidumping duties and incentivising green steel and recycling initiatives. With continued policy support, technology upgrades, and focus on product innovation, the Indian flat steel industry is well-positioned for sustained long-term growth.

(Sources: Ministry of SteeL, Reuters, CrisiL, Brickwork Ratings, BigMint, HDFC Securities, Future Market Insights, Precedence Research.)

Galvanised steel products review

Galvanised steel is a product that is an outcome of molten zinc coating on flat carbon steel, to enhance its resistance to corrosion. This protective zinc layer shields the underlying steel from moisture, humidity, and other environmental factors that typically lead to rusting. A key feature of the galvanisation process is the formation of a layer between the zinc coating and the steel substrate, which ensures extended durability and protection. The growing demand for galvanised steel is largely driven by its corrosion resistance and long-lasting performance, making it a preferred material across construction, automotive, and industrial applications. Reflecting this rising demand, the global galvanised steel market was valued at US$ 102.1 billion in 2024 and is projected to reach US$ 172.1 billion by 2034, growing at a compound annual growth rate (CAGR) of 5.9% over the forecast period.

The Indian galvanised steel market generated a revenue of US$ 22,715.7 million in 2024 and is projected to reach US$ 34,408.7 million by 2030, growing at a CAGR of 7.4% between 2025 and 2030. Among various end-use segments, building and construction emerged as the largest contributor to market revenue in 2024, driven by robust infrastructure development. The appliances segment is expected to witness the fastest growth during the forecast period, making it the most lucrative segment going forward. In terms of global contribution, India accounted for 9.4% of the global galvanised steel market revenue in 2024, underlining its growing importance in the international steel landscape.

(Source: Prophecy Market Research, Grand View Research)

Pre-painted galvanised steel coil review

Pre-painted galvanised steel coil (PPGI) is a type of steel coil that has been coated with a layer of zinc (galvanised) and then painted with a protective and decorative layer.

This multi-step process enhances the steels corrosion resistance, durability, and aesthetic appearance, making it suitable for a wide range of industrial and consumer applications

The PPGI market was valued at US$ 16.5 billion in 2024 and is projected to grow to US$ 25.2 billion by 2033, registering a CAGR of 5.5% from 2026 to 2033. Between 2024 and 2031, the market is expected to grow at an even higher CaGr of 6.3%, fuelled by accelerating industrialisation and infrastructure development, particularly in the Asia-Pacific region. PPGI refers to galvanised steel coils that are coated with a layer of paint over the zinc layer, offering enhanced corrosion resistance and visual appeal. Colour Coating Is Done on substrate metals like Galvanised Steel, Alu- Zinc Coated Steel, and Aluminum.

The production process involves a specialised coil coating method in which steel undergoes thorough cleaning, primer coating, and then the application of a uniform paint layer. This not only improves the materials surface finish but also ensures long-term durability in challenging environmental conditions.

The global PPGI market is being shaped by strong contributions from emerging economies, where rapid urbanisation and government-led infrastructure initiatives are boosting consumption. China remains a dominant force, accounting for nearly 50% of the worlds steel production as of 2023, thereby playing a critical role in influencing global supply and pricing trends. There is a growing shift towards environmentally responsible materials-PPGI being both recyclable and energy-efficient, aligns well with this trend. With increasing demand across multiple end-use sectors and ongoing advancements in coil coating technology, the pre-painted galvanised steel market is poised for consistent growth and wider adoption in the years ahead.

(Source: Verified Market Report)

Growth drivers

Rising global steel production: According to the US Geological Survey, global steel production reached approximately 1.9 billion metric tons in 2022, supporting the rising demand for coated steel.

Infrastructure growth in emerging economies:

Countries like India and China are experiencing robust demand growth due to urbanisation and infrastructure investments.

Demand for lightweight, durable materials:

Construction and automotive sectors are increasingly opting for PPGI over traditional materials like aluminum and wood.

Environmental preferences: PPGI is recyclable, energy-efficient, and long-lasting, aligning well with sustainability trends.

Government initiatives driving steel growth

Infrastructure growth: With Rs.11.11 lakh crore allocated in Union Budget FY26, infrastructure development under schemes like PM Gati Shakti, Bharatmala, and Smart Cities is accelerating the demand for Alu- Zinc and colour coated steel. These materials are preferred in preengineered buildings (PEBs) and rural housing (e.g., PMAY) for their durability, ease of use, and aesthetics.

PLI for coated steel (Phases 1 & 1.1):

The Rs.6,322 crore PLI scheme for specialty steel supports coated steel production, including Galvalume and colour coated variants. The recently relaxed Phase 1.1 encourages broader industry participation, fostering capacity expansion and value-added steel output.

Solar and renewable energy demand:

Alu-Zinc steel is gaining traction in solar infrastructure for mounting structures and frames due to its corrosion resistance. The Rs.75,000 crore PM Surya Ghar Yojana and MNRE mandates are driving strong demand in this sector.

Affordable housing and rural infra: Government initiatives like PMAY-Gramin, Jal Jeevan Mission, and Swachh Bharat are promoting the use of colour coated steel for roofing, tanks, and sanitation units. Its lightweight, long-lasting nature makes it ideal for cost-effective, fast-paced construction.

Manufacturing growth: PLI schemes in white goods and FMCG sectors are boosting the demand for pre-painted and Alu-Zinc steel in appliances, ducting, and EV components. These materials offer superior surface finish and corrosion resistance.

Cold chain and agri infrastructure:

The Agriculture Infrastructure Fund and PM Kisan Sampada Yojana are increasing the need for steel-based cold storages and warehouses. Alu-Zinc and coated steel meet hygiene, insulation, and durability requirements in food and pharma logistics.

(Source: IBEF, Ministry of SteeL, MNRE, Economic Times, EnergyAsia, Times of India, Reuters, Union Budget FY26)

SWOT analysis for MCMIL

(JSL)

• Skilled and cost-effective manpower supports efficient manufacturing.

• Technologically advanced plant and machinery at the Kutch, Gujarat facility.

• Diverse product applications across construction, automotive, appliances, and general engineering sectors.

• Strong domestic and international market presence, including Europe, Africa, and the Middle East.

• Proximity to port gives us a competitive edge to import low cost raw material and export finished products with higher cost efficiency.

• Nimble and agile setup which adapts to changes in the market and customer needs.

W - WEAKNESS

• Higher logsitics cost affecting our competitiveness in the remote and distant parts of the country since our manufacturing facility is located in the Western part of India .

• The scale of business operations is smaller when compared with larger integrated steel companies.

• Lack of complete backward integration and dependence on integrated steel plants for raw materials.

O OPPORTUNITIES

• Untapped potential in international markets with low export penetration.

• Low per capita steel consumption in India indicates room for growth.

• Expanding Indian economy and government focus on infrastructure development.

• Emerging demand from rural markets and growing construction activities under public infrastructure schemes.

• Demand being driven by multiple sectors such as construction, home appliances, auto motive, and general engineering.

, THREATS

• Risk of material dumping by foreign players during global economic slowdowns.

• Slow industry growth

in certain segments could affect volume and pricing.

• Uncertain geo-political environment leading to unforeseen challenges.

Company review

Manaksia Coated Metals & Industries Limited (MCMIL) is a leading manufacturer and exporter of coated steel products, specialising in Prepainted Galvanised Steel and Plain Galvanised Steel in both coil and sheet forms. Operating from a state- of-the-art facility in Kutch, Gujarat, the Company serves a broad spectrum of industries including construction, automotive, appliances, and general engineering. MCMIL is committed to delivering superior quality, value- added steel products by leveraging technologically advanced plant and machinery. Its diverse customer base spans across FMCG, home appliances, general engineering, and construction sectors. With a strong presence in both domestic (India) and international markets including Europe, Africa, and the Middle East, MCMIL continues to drive product innovation, performance enhancement, and capacity expansion. Backed by established brands with consistent market demand, the Company is well-positioned for sustained growth and further market expansion.

Our products range

Galvanised steel sheets and coils:

Galvanised steel is known for its exceptional quality, achieved through precise zinc coating control and advanced surface treatment processes that significantly enhance corrosion resistance. Manufactured using state-of-the-art technology, it ensures uniform coating thickness and consistent quality in line with international standards. This results in superior protection against moisture, humidity, and environmental corrosion. The facility has an installed production capacity of 1,32,000 MTPA, enabling reliable and large-scale output to meet diverse industrial demands.

Key features

• Coating thickness gauge

• Skin pass mill (4-Hi)

• Tension leveler

• Passivation and organic coating

Pre-painted steel sheets and coils:

Pre-painted steel sheets and coils are engineered for superior quality, featuring a protective paint layer that enhances aesthetic appeal and corrosion resistance. Utilising the advanced two coat-two bake technology and a wide selection of paint systems, these products deliver long-lasting durability and vibrant finishes, making them ideal for a broad spectrum of applications. The colour coating process is carried out on various substrate metals, including galvanised steel, Alu-Zinc coated steel, and aluminium.

Financial review

Revenues: Revenue from operations reported a 5.68% growth from Rs.739.65 Cr in FY 2023-24 to reach Rs.781.63 Cr in FY 2024-25. Other Income of your Company reported a 41.53% increase due to consistent returns in other income (due to the forex exchanage fluctuation).

Expenses: Total expenses increased by 5.59% from Rs.689.31 Cr in FY 2023-24 to Rs.727.86 Cr in FY 2024-25 due to reduced cost of production in power and consumables. Raw material cost, accounting for an 77.39% share of the Companys revenues increased by 3.68% from Rs. 590.34 Cr in FY 2023-24 to Rs.612.09 Cr in FY 2024-25 owing to an increased in the operational scale. Employees expenses, accounting for a 2.06% share of the Companys revenues, decreased by 0.02% in FY 2024-25.

Key ratios

Particulars	2024-2025	2023-24
EBITDA/Turnover (%)	8.05	7.69
EBITDA/Net interest ratio (x)	1.89	1.74
Debt-equity ratio	1.79	2.43
Debt service coverage ratio	1.89	1.74
Return on net worth (%)	7.03	7.85
Book value per share (Rs.)	24.58	19.69
Earnings per share (Rs.)	2.07	1.67
Debtors turnover ratio	15.66	13.58
Inventory turnover (days)	171	143
Interest coverage ratio (x)	1.62	1.46
Current ratio (x)	1.79	1.21
Net profit margin (%)	2.00	1.57
Cash cycle (x)	2.52	2.62

Internal control systems and their adequacy

Your Company has implemented robust internal control procedures tailored to its size and operations.

The Board of Directors oversees this system, establishing guidelines to ensure its sufficiency, effectiveness, and application. Designed to facilitate efficient management and enable the measurement and verification of outcomes, the internal control system relies on SAP for ensuring the reliability of accounting and management information. Additionally, the system ensures compliance with all relevant laws and regulations, safeguarding the Companys assets.

Its primary purpose is to identify and manage risks promptly and effectively, encompassing operational, compliance-related, economic, and financial risks.

Human resources

MCMILs success in leading the market is largely due to its effective human resource practices. The Company invests heavily in its employees growth, providing formal and informal training, as well as on-the-job learning opportunities. This helps employees develop new skills and knowledge.

To keep employees engaged and motivated, MCMILs focuses on creating a positive work environment. This includes offering challenging job roles and maintaining open communication between employees and management. By developing leaders from within, the Company builds a strong foundation for its future. As of 31^st March 2025, MCMILs has a team of 280 employees who contribute to its continued success.

Cautionary statement

This statement made in this section describes your 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. Your Company cannot guarantee that these assumptions and expectations are accurate or will be realised by your 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 your Company. Your Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development.