Metroglobal Ltd Management Discussions

Economic and industry overview

Near-term headwinds, particularly escalating tensions in the Middle East, have led to volatility in energy markets, supply chain disruptions and renewed inflationary pressures, tightening global financial conditions while reinforcing the importance of supply chain resilience, localisation and domestic manufacturing. Despite these challenges, structural growth drivers remain intact, with continued investments in advanced manufacturing, automation and digital technologies supporting productivity and industrial transformation, thereby sustaining demand across key sectors such as commercial vehicles, off-highway equipment and capital goods. Looking ahead, the global economy is expected to maintain moderate growth supported by infrastructure spending and policy support, although downside risks persist in the form of geopolitical instability, energy price volatility, trade fragmentation, elevated debt levels and potential financial market corrections.

The Indian economy continued to demonstrate strong grit, supported by robust domestic demand, sustained public investment and strengthening industrial activity, retaining its position among the fastest-growing major economies globally. As per the Second Advance Estimates, Indias real GDP is projected to grow by 7.6% in FY 2025-26, reaching 322.58 lakh crore, reflecting continued momentum in consumption and investment-led expansion. The external sector remained stable despite global trade volatility, with resilient exports and imports indicating strong domestic demand for capital goods, intermediates and energy. Investment activity remained a key growth driver, led by sustained public capital expenditure and a gradual revival in private sector investments, accelerating capacity creation across infrastructure, manufacturing and logistics. Industrial activity also remained robust, supported by policy-led initiatives, improving manufacturing output and rising capacity utilisation, with programmes such as the Production Linked Incentive Scheme driving investments, strengthening domestic value chains and enhancing Indias position as a global manufacturing hub. With improving infrastructure, policy stability and supply chain realignment, India continues to attract global manufacturing interest, fostering integrated industrial ecosystems. Looking ahead, the outlook remains favourable, supported by strong domestic fundamentals, continued infrastructure investments and expanding manufacturing capacity, although external risks such as geopolitical uncertainties, commodity price volatility and trade disruptions may pose intermittent challenges. Overall, Indias strong economic fundamentals, growing industrial base and increasing integration into global supply chains position it well for sustained medium- to long-term growth, reinforcing its emergence as a competitive and reliable global manufacturing destination.

These dynamics, along with supply chain diversification strategies such as “China+1”, are prompting global manufacturers to rebalance production networks and reduce concentration risks.

In this evolving landscape, India is increasingly being recognised as a reliable and scalable alternative, supported by its skilled workforce, improving infrastructure, policy stability and strong domestic demand.

Within this global context, the Indian chemical industry continues to be a cornerstone of the countrys industrial and manufacturing landscape, supported by strong domestic consumption, expanding end-use industries and increasing global integration. Estimated at approximately USD 180-200 billion in early 2026, the sector contributes nearly 7% to GDP and encompasses over 80,000 products across bulk chemicals, specialty chemicals, petrochemicals, agrochemicals, polymers and fertilisers. This high degree of diversification enables participation across a wide range of industries including pharmaceuticals, agriculture, automotive, construction, textiles and consumer goods, providing structural demand resilience and sectoral depth.

Growth within the sector is increasingly being driven by specialty chemicals, supported by higher value addition, export potential and shifting global supply chains, while petrochemicals continue to provide scale and stability, driven by rising consumption across packaging, automotive and infrastructure applications. Indias external trade performance remains supportive, with exports benefiting from diversified product offerings and growing global demand, while imports reflect strong domestic consumption of feedstocks and intermediates, indicating continued expansion of downstream industries.

Investment momentum remains robust, driven by both domestic and global players undertaking capacity expansion, backward integration and technology upgrades. Policy support continues to play a critical role, with initiatives such as the Production Linked Incentive Scheme and the development of Petroleum, Chemicals and Petrochemicals Investment Regions supporting long- term capacity creation, strengthening domestic value chains and promoting import substitution. Complementary investments in industrial corridors, logistics infrastructure and port connectivity, along with ongoing regulatory reforms to improve ease of doing business, are further enhancing the sectors competitiveness and enabling the development of integrated manufacturing ecosystems.

Operationally, the industry is benefiting from rising capacity utilisation, improving supply chain efficiencies and increasing formalisation. Strong linkages with high-growth sectors such as pharmaceuticals, agrochemicals and performance materials continue to drive sustained demand for intermediates and specialty products. At the same time, increasing adoption of digital technologies, process optimisation and advanced manufacturing techniques is enhancing productivity, product quality and cost efficiency across the value chain.

Sustainability is emerging as a defining theme, with increasing focus on green chemistry, energy efficiency, waste minimisation and environmentally compliant production processes. Companies are aligning with evolving regulatory standards and global ESG expectations, investing in cleaner technologies and sustainable practices to enhance long-term competitiveness, particularly in export-oriented markets.

Looking ahead, the outlook for the Indian chemical industry remains favourable, supported by strong domestic fundamentals, rising export opportunities and continued investments in infrastructure and manufacturing. While near-term risks persist in the form of crude-linked feedstock price volatility, geopolitical uncertainties, supply chain disruptions, global demand fluctuations and evolving regulatory requirements, the sectors diversified portfolio, improving competitiveness and increasing integration into global supply chains position it well for sustained medium- to long-term growth, reinforcing Indias role as a strategic hub in the global chemical value chain.

(Source: Trangbricks research report)

The global textile market is expected to sustain steady expansion, with increasing demand for sustainable, high-performance and technical textiles. In this evolving landscape, global brands are diversifying sourcing beyond traditional hubs, positioning India as a preferred alternative due to its cost competitiveness, skilled workforce and policy support.

Within this context, the Indian textile and apparel industry remains a cornerstone of the countrys economy, characterised by scale, employment generation and export competitiveness. The market was valued at approximately USD 248.7 billion in 2025 and is projected to grow to around USD 656.3 billion by 2034, registering a strong CAGR of about 11.4%, reflecting robust long-term growth potential driven by domestic consumption and export demand. The sector contributes significantly to GDP and manufacturing output, while supporting large-scale employment and maintaining a fully integrated ecosystem from fibre to finished garments.

Growth within the sector is being driven by multiple structural factors, including rising domestic demand, favourable demographics and increasing focus on value-added segments such as technical textiles, man-made fibres and performance fabrics. Technical textiles, in particular, are gaining traction due to their applications across automotive, healthcare, construction and infrastructure, while evolving consumer preferences and rising incomes are supporting demand across apparel and home textiles.

Policy support continues to play a central role in shaping industry growth. Initiatives such as the Production Linked Incentive Scheme, PM MITRA Mega Textile Parks and other integrated programmes are aimed at enhancing scale, modernising infrastructure and strengthening the overall value chain. The Union Budget 2026-27 has further reinforced this trajectory through its continued emphasis on manufacturing, infrastructure development, skilling and MSME support, which are expected to improve supply chain efficiency and attract incremental investments into the sector.

The external environment, however, remains dynamic.

While global demand continues to support export growth, the industry faces intermittent headwinds from trade barriers, tariff-related challenges and geopolitical uncertainties in key markets such as the United States and Europe. At the same time, ongoing trade negotiations and market diversification strategies are expected to improve medium-term export prospects, while increasing emphasis on sustainability and traceability is reshaping global sourcing decisions.

Operationally, the sector is witnessing increasing formalisation, rising capacity utilisation and adoption of advanced technologies such as automation and digital manufacturing systems. The shift towards sustainable materials, including organic cotton, recycled fibres and bio-based textiles, is gaining momentum, aligned with global ESG expectations. Strong linkages with sectors such as retail, e-commerce, automotive and infrastructure continue to drive diversified demand.

Looking ahead, the outlook for the Indian textile industry remains positive, supported by strong domestic consumption, policy-led capacity expansion and increasing integration into global supply chains. While risks remain in the form of raw material price volatility, global demand fluctuations and regulatory changes, Indias scale, integrated capabilities and improving competitiveness position it well to strengthen its role as a strategic hub in the global textile value chain over the medium to long term.

(Source: IMAC Group)

Metals

Ferrous

Indias ferrous metals sector, particularly steel, continued to demonstrate strong growth momentum during FY2025-26, reinforcing its position as one of the fastest-growing steel markets globally.

Domestic demand remained robust, supported by sustained investments across infrastructure, construction, railways and manufacturing, reflecting the strength of Indias broader economic expansion.

Crude steel production increased by over 10.7% year-on-year to approximately 168.4 million tonnes, while finished steel consumption grew by around 7-8% to nearly 164 million tonnes, highlighting the sectors deep linkage with core economic activity.

A key development during the year was the sharp improvement in trade dynamics. Finished steel exports surged by 35.9% to about 6.6 million tonnes, while imports declined by 31.7%, enabling India to regain its position as a net exporter of steel and enhancing its global competitiveness.

Capacity expansion remained a key focus area, with total crude steel capacity reaching approximately 220 million tonnes during the year, keeping the industry on track to achieve 300 million tonnes by 2030, supported by ongoing investments and policy support.

However, the sector continued to face challenges from volatility in raw material prices, particularly coking coal, along with elevated energy and logistics costs. Geopolitical disruptions also impacted fuel availability, highlighting supply chain vulnerabilities.

At the same time, sustainability is emerging as a strategic priority, with steel producers increasingly focusing on energy efficiency, waste heat recovery, higher scrap utilisation and integration of renewable energy to reduce carbon intensity. Initial investments in green steel technologies and low-carbon production processes are gaining traction, aligned with evolving regulatory expectations and global decarbonisation commitments.

In response, leading players are focusing on operational efficiencies, digitalisation and early-stage adoption of greener technologies to improve cost competitiveness and align with evolving sustainability expectations. Over the medium term, strong domestic demand is expected to sustain growth momentum, although margin pressures may persist.

Metals such as aluminium, copper, zinc, and lead continue to underpin infrastructure development, manufacturing growth, renewable energy expansion, and electrification, reinforcing their role as critical enablers of the countrys industrial progress.

Demand across the sector remains robust, supported by sustained government investment in infrastructure, rapid urbanisation, and increased activity in power, transportation, and construction.

This momentum is further amplified by the accelerating adoption of renewable energy, electric mobility, and digital infrastructure, all of which are significantly increasing the consumption of metals such as copper and aluminium. Their importance in energy transmission, battery technologies, and electrification places them at the centre of Indias transition towards a low-carbon economy.

At the same time, the sector continues to navigate structural challenges.

Indias dependence on imports for key raw materials, including copper concentrates and aluminium scrap, exposes the industry to supply-side risks and price volatility, particularly in a dynamic geopolitical environment. The growing role of recycled aluminium, which contributes a substantial share of domestic supply, further underscores this reliance. In parallel, evolving regulatory frameworks such as Extended Producer Responsibility norms are expected to accelerate recycling targets, gradually increasing mandatory recycled content and reshaping cost structures and operating models.

Looking ahead, the sector is entering a phase of capacity expansion, supported by rising domestic consumption, policy support, and ongoing investments. Sustainability, energy efficiency, and circularity will remain central to this evolution, with companies aligning more closely to global decarbonisation pathways. While near-term challenges persist, the long-term outlook for Indias non- ferrous metals sector remains firmly positive, driven by its integral role in enabling sustainable and inclusive growth.

Precious Metals

The precious metals segment witnessed a strong and dynamic year, underpinned by global macroeconomic uncertainty, geopolitical tensions and evolving investment behaviour.

Gold prices remained elevated, trading near record highs and averaging above USD 3,400 per ounce during the year, supported by sustained central bank purchases, safe-haven demand and expectations of monetary easing across major economies.

Global central banks continued to be net buyers, with annual purchases remaining close to ~1,000 tonnes, reinforcing golds role as a strategic reserve asset.

At the same time, investment demand through exchange-traded funds and digital platforms witnessed renewed traction, reflecting increasing participation from institutional and retail investors.

Silver continued to outperform as both an investment and industrial metal, with prices supported by robust industrial demand and tightening supply conditions. Industrial applications now account for over 55-60% of global silver demand, driven primarily by solar photovoltaics, electronics and electrification-related segments. The rapid expansion of renewable energy capacity, particularly solar installations, has emerged as a key structural driver, positioning silver as a critical input in the global energy transition. This dual- demand profile continues to contribute to higher price volatility relative to gold, while also supporting stronger upside potential.

Platinum is also gaining increasing relevance, supported by its applications in automotive catalysts and growing interest in hydrogen-based technologies. Demand for platinum is witnessing gradual recovery, particularly in the automotive and clean energy segments, although it remains subject to cyclical trends in global industrial activity.

Domestically, demand trends remained mixed during the year. Elevated price levels moderated jewellery consumption, particularly in price- sensitive segments, while investment demand remained resilient, supported by inflation hedging and portfolio diversification. Indias gold demand remained in the range of ~700- 800 tonnes annually, with a gradual shift towards organised channels,

ETFs and digital gold. Regulatory developments and import-related constraints intermittently impacted supply dynamics, highlighting the sectors sensitivity to policy and trade conditions.

Looking ahead, the outlook for precious metals remains constructive, supported by continued geopolitical uncertainties, expectations of easing interest rates and sustained industrial demand, particularly for silver and platinum. However, price volatility is expected to remain elevated, driven by movements in global liquidity, currency fluctuations and macroeconomic conditions, necessitating a balanced approach to investment and consumption across the segment.

Real estate

Indias real estate sector continued to demonstrate resilience during the year, although trends across asset classes reflected a more calibrated and evolving growth phase. According to Knight Frank, the office market remained robust, supported by sustained occupier demand and Indias increasing relevance in global supply chains.

Leasing activity reached new highs during the period, driven largely by Global Capability Centres (GCCs) and a continued preference for Grade A, high-quality office spaces. Demand remained broad-based across key markets, while limited supply additions contributed to tightening vacancy levels and a steady rental upcycle.

In contrast, the residential segment entered a phase of moderation following a period of strong growth. Homebuyer activity showed signs of recalibration, with demand softening amid elevated property prices and evolving macroeconomic uncertainties While underlying structural drivers such as urbanisation, rising incomes and favourable demographics remain intact, affordability pressures have begun to influence transaction volumes, particularly in lower ticket- size segments. At the same time, demand continued to remain relatively resilient in premium and higher-value housing, indicating a shift in market composition.

Supply dynamics also reflected a cautious environment, with new launches continuing to outpace absorption, leading to a gradual increase in inventory levels. This has contributed to a measured adjustment in the market, with developers adopting calibrated approaches to pricing, incentives and project launches to sustain demand momentum. Despite this moderation, the residential market remains supported by stable macroeconomic conditions and improving financing environment.

Overall, the sector is transitioning into a more balanced phase, characterised by strong performance in the office segment and consolidation in residential markets. While near-term uncertainties such as geopolitical developments and global economic conditions may influence sentiment, Indias structural growth drivers, improving transparency and increasing institutional participation continue to support a positive medium- to long- term outlook for the real estate sector.

(Source: Knight Frank )

Strengths

• Established industry presence with strong domain expertise

• Diversified portfolio across products and sectors

• Strong brand recall and long-standing relationships

• Innovation-led and agile approach

• Robust infrastructure and distribution network

• Skilled workforce and experienced management

• Strong financial linkages

Challenges

• Dependence on third-party logistics and transport partners

• Exposure to quality variability from global suppliers

• Working capital intensity in operations

Threats

• Foreign exchange volatility

• Global commodity price fluctuations

• Geopolitical uncertainties impacting trade flows

• Increasing competition

• Regulatory and compliance changes

Opportunities

• Supply chain diversification and “China+1” strategy

• Government focus on infrastructure and manufacturing

• Expanding domestic demand across sectors

• Margin improvement through bulk procurement

• Digitalisation and supply chain optimisation

Financial and Operational Performance

Consolidated Financial Results

In FY 2025-26, the Companys consolidated total income for the year was 24,663.48 Lakhs as compared to 25,368.51 Lakhs in FY 2024-25, registering a decline of 2.78%. The consolidated profit before tax for the current fiscal was 3,103.22 Lakhs as compared to 1,156.32 Lakhs in the previous year registering growth of 168.37%. The consolidated profit after tax for the year was 2,209.09 Lakhs as against 945.34 Lakhs in FY 2024-25 reflecting a significant growth of 133.68%.

Standalone Financial Results

In FY 2025-26, the Companys standalone total income for the year was 24,551.93 Lakhs as compared to 25,366.36 Lakhs in FY 2024-25, registering a decline of 3.21%. The standalone profit before tax for the current fiscal was 3,040.51 Lakhs as compared to 1,147.31 Lakhs in the previous year registering a robust growth of approximately 165%. The standalone profit after tax for the year stood at 2,150.81 Lakhs, as against 936.31 Lakhs in FY 2024-25, registering a growth by 129.71%.

Key Financial Ratios

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

Sr. No.	Particulars	FY 2025- 26	FY 2024- 25	Change (%)	Reason for Variance
1	Current Ratio	18.93	34.49	(45.13)	Current ratio decreased due to a proportionately higher increase in current liabilities compared to the increase in cash balances.
2	Debt Equity Ratio	0.01	0.01	(8.96)	N/A
3	Debt Service Coverage Ratio	28.08	33.85	(17.06)	N/A
4	Return on Equity	4.85%	6.68%	(27.37)	Return on Equity (ROE) measures the profitability generated on shareholders funds. The decline in ROE during the year was mainly attributable to lower adjusted profits compared to the previous year, which included exceptional income.
5	Inventory Turnover Ratio	57.21	18.55	208.33	The Inventory Turnover Ratio improved significantly during the year due to efficient inventory management, reduction in average inventory levels and relatively stable cost of goods sold.
6	Trade Receivable Turnover Ratio	628.43	23,153.48	(97.29)	The Trade Receivables Turnover Ratio indicates the efficiency of collection from customers. The decline in the ratio was mainly due to an increase in average trade receivables during the year compared to the previous year.
7	Trade Payable Turnover Ratio	186.79	883.61	(78.86)	The Trade Payables Turnover Ratio reflects the Companys effectiveness in managing and settling its obligations to suppliers, The reduction in the Trade Payables Turnover Ratio was driven by a significant increase in trade payables relative to purchases.
8	Net Capital Turnover Ratio	1.03	1.35	(23.93)	N/A
9	Operating Profit Ratio	12.42%	12.13%	2.40	N/A
10	Net Profit Ratio	8.31%	11.1%	(24.51)	N/A
11	Return on Capital Employed	7.07%	7.21%	(1.99)	This ratio reflects the Companys efficiency in generating profits from its capital employed. The decreased in the current year is due to a proportionately higher increase in capital employed compared to operating profit (EBIT).
12	Return on Investment	8.42%	4.55%	84.97	Return on Investment (ROI) is a key profitability indicator used to evaluate the efficiency of an investment. The improvement in the ratio is primarily due to an increase in the return compared to the previous year.

*Note: Profit used in calculating the profitability ratios is adjusted for exceptional items due to their unusual and non-recurring nature.

Human Capital

The Company recognises its people as a key driver of sustained growth and organisational success. Employees continue to play a critical role in delivering operational excellence and achieving strategic objectives. The Company remains committed to fostering a supportive and inclusive work environment that encourages continuous learning, skill enhancement and professional development. Focus on employee well-being, engagement and performance-driven culture enables individuals to contribute effectively while maintaining a healthy work-life balance. Structured reward mechanisms, career development opportunities and a culture of empowerment further strengthen the Companys human capital foundation.

Risk Management

The Company operates in a dynamic business environment and has established a robust Enterprise Risk Management (ERM) framework to proactively identify, assess and mitigate risks. This structured approach enables the Company to effectively respond to uncertainties and maintain operational resilience.

Outlook ?

The global trade environment continues to evolve amid a blend of uncertainty and opportunity. Ongoing geopolitical tensions and shifting trade policies are prompting supply chain realignments, increasing complexity across global markets. At the same time, new trade partnerships, digital integration, and sustainability-led initiatives are opening fresh avenues for growth and collaboration.

While developed economies are experiencing moderate expansion, Asia continues to demonstrate resilience, supported by strong

domestic consumption and its growing role in reconfigured global supply chains.

Within this context, Indias economic outlook remains constructive.

The country continues to benefit from structural reforms, sustained infrastructure investments, and a policy focus on manufacturing and digitalisation. Stable macroeconomic fundamentals and improving investor confidence are supporting growth momentum, even as certain sectors experience uneven demand and cyclical pressures.

Overall, India remains well positioned to sustain its growth trajectory. Favourable demographics, increasing global integration, and consistent policy support provide a strong foundation. Going forward, the pace and quality of growth will depend on continued reforms, employment generation, and skill development, enabling the economy to fully realise its long-term potential.

Internal Control Systems and Adequacy

The Company has established adequate internal control systems and processes commensurate with its size and nature of operations. These systems are designed to ensure operational efficiency, safeguard assets and ensure compliance with applicable laws and regulations.

An independent internal audit function, comprising qualified professionals, conducts periodic audits across all functional areas. Audit findings are reviewed by the management and the Audit Committee to ensure timely corrective actions and continuous improvement in processes.

Cautionary statements

Statements in this Report, those which relate to the Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations, may constitute ‘forward-looking statements within the meaning of applicable laws and regulations. The Companys actual results and achievements may differ from those expressed or implied. Several factors that could significantly impact the Companys operations include economic conditions affecting demand, supply and price conditions in the domestic and overseas markets, changes in the Government regulations, tax laws & other statutes and other such incidental factors, over which the Company does not have any direct control. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.