Mangalam Alloys Ltd Management Discussions

Your directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2026.

GLOBAL ECONOMIC OVERVIEW

The financial year 2025-26 witnessed a global economic environment marked by geopolitical uncertainties, evolving trade policies, persistent regional conflicts and changing monetary conditions. While global economic activity remained relatively resilient, growth continued to be uneven across economies. Trade-related uncertainties, fluctuations in commodity and energy prices, supply chain adjustments and geopolitical developments continued to influence business sentiment and investment decisions. At the same time, increased investments in technology, artificial intelligence, digitalisation and energy transition supported economic activity and created new opportunities across sectors. The global economy is expected to remain resilient, although downside risks from geopolitical tensions, trade fragmentation and financial market volatility continue to warrant close monitoring.

India continued to demonstrate strong economic resilience during FY 2025-26 and remained one of the fastest-growing major economies. Domestic consumption, infrastructure development, public capital expenditure, manufacturing activity and continued policy support remained key drivers of economic growth. The countrys focus on digitalisation, renewable energy, infrastructure development, manufacturing and technological innovation further strengthened its medium-term growth prospects. Indias relatively strong domestic demand and improving macroeconomic fundamentals provided a degree of resilience against global uncertainties, although external developments, commodity prices and evolving trade policies continued to remain important factors for businesses.

Looking ahead, the Indian economy is expected to maintain its growth momentum, supported by structural reforms, infrastructure investments, rising digital adoption, manufacturing expansion and continued policy initiatives. Businesses are increasingly adapting to emerging trends such as artificial intelligence, energy transition, supply-chain diversification and technology-led transformation. These developments are expected to continue shaping the operating environment and create opportunities for sustainable and long-term growth.

GDP GROWTH

The global economy remained resilient during FY 2025-26 despite geopolitical tensions, evolving trade policies and financial uncertainties. As per the IMF, global real GDP growth was estimated at 3.5% in 2025 and is projected at 3.0% in 2026 and 3.4% in 2027.

India continues to remain among the fastest-growing major economies, with real GDP growth projected at 6.5% in both 2026 and 2027, supported by strong domestic demand, infrastructure investment and favourable policy measures.

INFLATION

UNDERLYING INFLATION PRESSURES REMAIN ELEVATED

Global inflationary pressures remained elevated during FY 2025-26 amid geopolitical tensions, higher energy and food prices, and continued uncertainty in global trade. As per the IMF, global headline inflation is estimated at 4.1% in 2025 and is projected to rise to 4.7% in 2026, before easing to 3.9% in 2027. The outlook indicates that the global disinflation process has temporarily stalled, with inflation dynamics expected to remain uneven across economies.

Going forward, commodity price volatility, geopolitical developments and trade-related uncertainties may continue to influence inflationary conditions. Maintaining price stability and sound monetary policies will remain important for anchoring inflation expectations and supporting sustainable economic growth.

INDIAN ECONOMY

The Indian economy continued to demonstrate strong resilience during FY 2025-26, supported by robust domestic demand, infrastructure investment, manufacturing activity and favourable policy measures. Indias real GDP is estimated to have grown by 7.7% in FY 2025-26, compared with 7.1% in FY 2024-25. Nominal GDP is estimated at ?346.36 lakh crore, registering a growth of 8.9% over the previous year.

GDP GROWTH FOR FY 2025-26

India continued to remain one of the fastest-growing major economies globally. Growth was supported by resilient domestic consumption, investment activity, infrastructure development and continued economic reforms. The Indian economy is expected to maintain its growth momentum, supported by strong domestic fundamentals, digitalisation, manufacturing expansion and continued policy initiatives. The IMF projects Indias real GDP growth at 6.4% for FY 2026-27, reflecting continued resilience amid global uncertainties.

THE ECONOMIC PROJECTIONS — WHAT LIES AHEAD

India continues to remain one of the fastest-growing major economies, supported by resilient domestic demand, infrastructure development, manufacturing activity and structural reforms. Despite global uncertainties, geopolitical developments and volatility in commodity prices, the Indian economy has demonstrated considerable resilience. The Company remains focused on leveraging the opportunities arising from Indias long-term growth trajectory while strengthening its operational efficiency, product capabilities and market presence.

To support sustainable growth and achieve its long-term objectives, the Company intends to pursue the following key business strategies:

Focus on Value-Added Products: Increasing the contribution of value-added and specialised products while reducing dependence on low-value-added products. Expansion of Market Presence: Expanding the geographical footprint by addressing underserved domestic markets and strengthening export opportunities through adherence to international quality standards and requisite trade certifications. Adoption of Industry 4.0: Gradually deploying Industry 4.0 technologies, including smart sensors, ERP systems and data analytics, for real-time process monitoring, predictive maintenance, operational efficiency and improved productivity. Employee Skill Development: Continuously upskilling employees in metallurgy, equipment handling, safety practices and digital tools to develop a skilled, efficient and safety-conscious workforce. Customer-Centric Approach: Maintaining strong focus on customer satisfaction by consistently delivering quality products and adhering to committed delivery schedules. Zero Waste Approach: Continuing to pursue the philosophy of zero waste through maximum recycling and efficient resource utilisation, including recycling of solid waste and treatment and reuse of liquid waste wherever feasible. Research and Product Development: Continuing investment in R&D, process improvement and development of new grades. The Company aims to strengthen its capabilities in manufacturing specialised and rare grades that can serve as substitutes for imported products. Cost Optimisation and Operational Efficiency: Continuously improving manufacturing processes, reducing operational costs and optimising resource utilisation, thereby enhancing productivity, margins and overall profitability.

INDUSTRY OVERVIEW

The Indian steel industry continued to demonstrate strong growth during FY 2025-26, supported by robust domestic demand, infrastructure development, manufacturing activity and continued capacity expansion. India remained the worlds second-largest crude steel producer, with crude steel production reaching approximately 168.4 million tonnes during FY 2025-26, while finished steel consumption stood at around 163.7 million tonnes. The industrys growth continues to be supported by urbanisation, infrastructure development, construction, railways and the expanding manufacturing sector.

The specialty and value-added steel segment is also gaining importance as India seeks to strengthen domestic manufacturing capabilities and reduce dependence on imports. Government initiatives, including the Production Linked Incentive (PLI) Scheme for Specialty Steel, are encouraging investment in advanced grades, technology and higher-value products. Indias steelmaking capacity has increased to around 220 million tonnes, with the National Steel Policy targeting capacity of 300 million tonnes by 2030.

During FY 2025-26, the industry witnessed strong domestic demand, although steel producers continued to face challenges arising from fluctuations in raw material and energy costs, global price volatility and changing trade conditions. At the same time, increasing emphasis on quality, specialised grades, energy efficiency, sustainability and technological advancement is creating opportunities for manufacturers with integrated and diversified product capabilities.

In this evolving industry environment, the Companys integrated manufacturing capabilities covering stainless steel, special and alloy steel melting and downstream processing, including ingots, round bars, RCS, bright bars, sections, profiles, forgings and fasteners, provide a strong platform to cater to diverse customer requirements. The Companys focus on value-added products, specialised grades, process efficiency, quality and customer service is aligned with the industrys gradual shift towards higher-value and application-specific steel products.

The Company operates its integrated manufacturing facility over approximately 40,000 square metres, with an installed capacity of 25,000 TPA, at Gandhinagar, Gujarat. The Companys location, integrated operations and product diversification provide a favourable base for serving domestic and export markets and pursuing sustainable growth opportunities.

The global steel industry continued to operate in a challenging environment during FY 2025-26, characterised by uneven demand growth, excess capacity in certain markets, volatile raw material and energy prices and changing international trade policies. These factors have increased competitive pressures on steel producers globally. At the same time, the industry is witnessing a gradual shift towards higher-value, specialised and technologically advanced steel products, driven by demand from infrastructure, automotive, engineering, energy and other industrial applications.

In India, the steel sector continued to benefit from strong domestic demand, particularly from infrastructure, construction, transportation, automotive and manufacturing activities. Indias expanding infrastructure base, urbanisation and government-led capital expenditure are expected to provide continued support to steel consumption. The increasing focus on domestic manufacturing and import substitution is also creating opportunities for Indian producers of specialised and value-added steel grades.

The stainless and alloy steel segments offer additional growth opportunities as industries increasingly require materials with higher strength, durability, corrosion resistance and application-specific properties. Demand for specialised grades is expected to be supported by growth in engineering, automotive components, renewable energy, industrial equipment, defence and other high-performance applications.

Sustainability and technological advancement are also becoming important drivers of the steel industrys future. Producers are increasingly focusing on energy efficiency, resource optimisation, recycling, reduction of waste and adoption of digital and Industry 4.0 technologies. The transition towards lower-carbon steelmaking and more efficient manufacturing processes is expected to influence investment and operational strategies across the industry.

Against this backdrop, companies with integrated manufacturing capabilities, diversified product portfolios, strong quality systems and the ability to develop specialised grades are well positioned to benefit from the evolving market environment. The Companys focus on stainless steel, special and alloy steel and value-added downstream products, along with continuous process improvement and product development, provides a platform to participate in these emerging opportunities.

GLOBAL STAINLESS STEEL MARKET SHARE, BY REGION

Global Stainless Steel Market Share By Application. 2026

Donut chart with legend:

• Metal Products
• Electrical Machinery
• Engineering
• Construction
• Automotive Parts

Product-type market values (from chart):

Product Type	Value
Cold Rolled Flat	$105 B
Hot Plate And Sheet	$50 B
Cold Bars And Wire	$45 B
Hot Bars And Wire Rod	$37 B
Other Types	$17 B

[Note: The donut chart image itself is corrupted; only the legend and the product-type value labels are readable.]

Strengths

1. Integrated manufacturing capabilities in stainless, special and alloy steel with downstream processing.
2. Diversified range of value-added products including bars, profiles, forgings and fasteners.
3. Strategic location with good road, rail and air connectivity and proximity to Ahmedabad.
4. Established promoter experience and access to domestic and imported raw materials.
5. Reliable power and gas supply supporting continuous manufacturing operations.
6. Focus on cost efficiency, quality and customer satisfaction.

Weaknesses

• High energy and power requirements resulting in exposure to energy cost fluctuations.
• Higher cost of debt and financing.
• Relatively smaller scale compared with large steel manufacturers.

Opportunities

• Rising domestic demand from infrastructure, automotive, engineering, renewable energy and manufacturing sectors.
• Growing demand for specialised and value-added stainless steel grades.
• Opportunities for import substitution and expansion into export markets.
• Scope for technology adoption, process improvement and further backward integration.

Threats

• Competition from domestic and overseas producers and potential dumping of steel products.
• Volatility in raw material, energy and steel prices.
• Changes in international trade policies, tariffs and regulations.
• Increasing environmental compliance requirements and associated costs.
• Cyclicality in steel demand and availability of skilled manpower.

SEGMENT-WISE PERFORMANCE

The Companys main business activity is manufacturing of various types of Steel products in more than 15 international grades and in size range from 3mm to 400mm Black Round Bars, SS RCS, Forging, Hexagonal & Square, Bars, Steel Ignots, Bright Round Bar, Fasteners, Flat Bars, and Angle Bars.

OUTLOOK

The Company continues to explore the possibilities of expansion and will make the necessary investments when attractive opportunities arise.

RISK AND CONCERNS

The Company follows a structured approach to identify, evaluate and monitor key risks that may affect its operations, financial performance and business objectives. The major risks and corresponding mitigation measures are as follows:

1. Market & Business Risk: Fluctuations in stainless steel demand, intense competition and changes in customer requirements

2. Raw Material & Price Risk: Volatility in the prices and availability of nickel, ferro alloys, scrap, energy and other key inputs may affect production costs. The Company manages this through multiple sourcing channels, inventory planning, process optimisation and continuous monitoring of market conditions.
3. Operational Risk: Breakdown of critical equipment, production interruptions, quality issues and logistics constraints may affect operations. Preventive maintenance, process monitoring, quality controls and adequate operational planning are undertaken to minimise such risks.
4. Regulatory & Compliance Risk: Changes in applicable laws, environmental standards, taxation and regulatory requirements may increase compliance obligations and costs. The Company monitors regulatory developments and maintains appropriate internal systems to ensure timely compliance.
5. Human Resource Risk: Availability and retention of skilled manpower is important for specialised steel manufacturing. The Company focuses on employee training, skill development, workplace safety and a conducive working environment.
6. Environmental & Climate Risk: Steel manufacturing is exposed to environmental and climate-related risks, including stricter emission norms, waste management requirements and resource efficiency expectations. The Company focuses on responsible waste management, resource conservation, energy efficiency and compliance with applicable environmental standards.
7. Financial & Foreign Exchange Risk: The Company may be exposed to fluctuations in interest rates, foreign exchange rates and working capital requirements, particularly in relation to imported inputs and export transactions. These risks are monitored through prudent financial planning, cash-flow management and appropriate internal controls.
8. Logistics & Supply Chain Risk: Disruptions in transportation or supply chains may affect the timely movement of raw materials and finished products. The Company seeks to mitigate this through supplier diversification, inventory planning and effective logistics management.

AUDIT AND INTERNAL CONTROL SYSTEM

The Company has established an appropriate internal control framework commensurate with the size, nature and complexity of its operations. The internal financial controls are designed in accordance with the requirements of the Companies Act, 2013, including Section 134(5)(e) and Section 143(3)(i), and applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, wherever applicable.

The Companys internal control systems are aimed at ensuring orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy of accounting records and timely availability of reliable financial information. The controls cover key operational and financial areas including procurement, inventory, production, sales, finance and statutory compliances.

The internal control framework is periodically reviewed by the Management to identify gaps and strengthen processes. The Statutory Auditors also independently assess the adequacy and operating effectiveness of internal financial controls as part of the statutory audit in accordance with the applicable provisions of the Companies Act, 2013.

The Company remains committed to maintaining a robust control environment and continuously improving its internal processes in line with evolving business requirements and regulatory standards.

RAW MATERIAL PRICES

The prices of basic major raw materials used in our manufacturing process viz. stainless steel scrap /flats of various grades doesnt affect much, as we are working in open market scenario.

FINANCIAL PERFORMANCE

During the year under review, the Company has generated total revenue of ?4,41,31,13,082/- (Previous Year ?4,33,51,69,232/-). The net profit before exceptional items and taxes is ?2,03,50,06,414/- (Previous Year ?21,03,88,334/-). The net profit after taxes resulted into the profit for the year at ?14,67,50,931/- (Previous Year ?13,28,46,325/-).

MATERIAL DEVELOPMENTS IN HR / INDUSTRIAL RELATION / NUMBER OF PERSON EMPLOYED

The Company considers its employees a key contributor to its growth and operational efficiency. It focuses on attracting and retaining skilled talent, employee development, workplace safety and maintaining a positive working environment. Training and skill enhancement initiatives are undertaken to meet the evolving requirements of the business.

As on 31st March 2026, the Company had 181 employees on its rolls and 102 personnel engaged on a contractual basis.

ACCOUNTING POLICIES

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The financial statements have been prepared under the historical cost convention on an accrual basis. The management accepts responsibility for the integrity and objectivity of the financial statements, as well as for the various estimates and judgment used therein.

DISCLOSURE OF ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL STATEMENT

The Company has followed all relevant Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI) while preparing Financial Statements.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS

The Company has identified the following ratios as key financial ratios:

Sr. No. Particulars	2025-26	2024-25	Changes	Reason
1 Current Ratio	(14236.59)	(34325.89)	(58.52%)	NA
2 Debt Equity Ratio	1.52	0.08	1800%	NA

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

Sr. No. Particulars	2024-25	2023-24	Changes	Reason
1. Return on Net Worth (%)	9.28	9.30	0.02	NA

CAUTIONERY STATEMENT

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

PLACE: Gandhinagar

DATE: 07-09-2026

By Order of the Board

For, MANGALAM ALLOYS LIMITED

Sd/-

Tushar Uttamchand Mehta

Managing Director

DIN: 00187046

Sd/-

Megha Tushar Mehta

Director

DIN: 07195005

Regd. Office: - Plot No. 3123-3126, GIDC Phase III, Chhatral, Dist. Gandhinagar, Gujarat, India,

382729.

Website: www.mangalamalloys.com

CIN: L27109GJ1988PLC011051