Mukand Ltd Management Discussions

Global Steel Industry Overview

The global steel industry in FY 2025 26 continued to operate in a challenging macroeconomic environment marked by subdued demand growth and geopolitical volatility. In terms of production, global steel production remained close to 1.9 billion tonnes during the year. China continued to dominate the industry with production exceeding 1 billion tonnes, accounting for more than half of global steel output. While Indian steel industry maintained its position as the worlds second-largest producer. Global apparent steel demand remained broadly stable at approximately 1.75 billion tonnes, reflecting a cautious recovery amid uneven economic conditions across major markets. Regional demand trends remained divergent during the year. Chinas steel consumption continued on a moderating trajectory due to weakness in the real estate sector and slower industrial activity, while demand across some of the major economies remained largely flat. In contrast, India, southeast Asian economies, and the Middle East recorded relatively stronger growth, supported by sustained investments in infrastructure, urbanisation, manufacturing, and energy transition projects. Geopolitical developments remained a key influence on the industry during the year. Heightened tensions in parts of the Middle East, together with continued disruptions to key maritime trade routes, contributed to volatility in energy and freight markets. For the steel sector, which remains highly dependent on global raw material and logistics networks, these developments resulted in fluctuations in input costs, and energy prices, thereby impacting procurement planning and operating margins.

During the year 2025-26, the industry remained influenced by an increasing use of trade remedy measures, safeguard actions and tariff interventions by several economies to protect domestic steel industries amid persistent global overcapacity and trade diversion. At the same time, sustainability remained a strategic priority across the global steel industry. With the sector accounting for nearly 7-8% of global greenhouse gas emissions, steel producers increasingly focused on decarbonisation initiatives through investments in Electric Arc Furnace (EAF) technology, higher adoption of scrap-based manufacturing, energy efficiency improvements, and early-stage development of hydrogen-based steelmaking solutions. Overall, the global steel industry remained in a phase of structural transition, balancing near-term economic and geopolitical uncertainties with long-term opportunities arising from infrastructure development, industrial transformation, and the global shift towards sustainable growth.

Indian Steel Industry Overview

The Indian steel industry delivered a strong performance in FY 2025 26, reinforcing the countrys position as the worlds second-largest steel producer amid a volatile global environment. Supported by sustained infrastructure investments, robust manufacturing activity, and favourable policy support, India continued to emerge as one of the fastest-growing major steel markets globally.

Indias crude steel production maintained its growth momentum during the year, increasing by over 10.7% year-on-year to approximately 168.4 million tonnes. Production of finished steel also recorded healthy growth of 9.7%, reaching around 160.9 million tonnes. Domestic consumption remained resilient at nearly 164 million tonnes, reflecting growth of approximately 7.6% over the previous year and underscoring the strength of underlying demand across key sectors of the economy.

The growth trajectory of the industry continued to be driven by large-scale public and private investments in infrastructure and industrial development. Continued expansion in highways, railways, ports, airports, urban infrastructure, and renewable energy projects generated sustained demand for steel products. In parallel, sectors such as automotive, capital goods, engineering, construction, and manufacturing contributed significantly to incremental consumption, reinforcing steels strategic importance to Indias economic development. Indias steel trade witnessed encouraging momentum during the year. Finished steel exports increased by nearly 36%, reaching approximately 6.6 million tonnes, supported by competitive pricing, improved product offerings and stronger demand across markets in the Middle East, Europe and Southeast Asia. Trade flows, however, continued to remain influenced by evolving global market conditions, trade policies and pricing dynamics.

Policy support continued to play an important role in the sectors expansion. The National Steel Policy, which targets 300 million tonnes of steelmaking capacity by 2030, alongside the Production Linked Incentive (PLI) Scheme for speciality steel, encouraged investments in capacity expansion, technology upgrades, and value-added steel manufacturing. Despite the favourable demand environment, the industry continued to face certain headwinds during the year. Steel prices remained under pressure amid global oversupply and volatile international pricing trends. Profitability was further impacted by fluctuations in raw material costs, as well as elevated energy, freight, and logistics costs arising from geopolitical disruptions.

Supply chain vulnerabilities also came into focus during the later part of the financial year 2025-26. Disruptions in gas supplies from the Middle East affected the availability of industrial fuels such as LPG, posing operational challenges for steel manufacturing, especially in the last month of the financial year 2025-26. Timely intervention by the Government of India through enhanced LPG allocations to the steel sector helped mitigate the impact and maintain production continuity.

Looking ahead, the Indian steel industry remains well positioned for long-term growth, supported by favourable demographics, urbanisation, infrastructure development, manufacturing expansion, and policy support. While challenges relating to raw material security, energy transition, and global market volatility persist, Indias strong domestic demand base and ongoing industrial transformation continue to provide significant growth opportunities for the sector.

Overview of the Companys Performance

FY 2025 26 was characterised by a challenging global operating environment alongside strong domestic demand fundamentals. Against this backdrop, Mukand Limited delivered a resilient performance, supported by disciplined execution, operational efficiency and a continued focus on long-material prices, evolving market dynamics and persistent global uncertainties, the Company remained focused on strengthening its core business, enhancing operational performance and serving the evolving requirements of customers across its key end-use industries.

Mukand Limited achieved a bloom production volume of 510,715 Metric Tonnes across its Kalwe and Hospet plants, reflecting its steadfast commitment to operational excellence and fulfilling customer The Company recorded revenue from operations of 4,762 crore during FY 2025 26, as compared to 4,685 crore in the previous year, reflecting a marginal growth of 2%. The performance demonstrates the Companys resilience in navigating a challenging market environment while maintaining its strong position in the industry. Amidst a volatile global backdrop, marked by the ongoing Russia Ukraine conflict, supply chain disruptions in the Middle East, and subdued steel demand in Europe, Mukand reported a Profit After Tax (PAT) of 635 crore for the year. The financialperformance includes the resultant surplus arising from the sale of land, while also reflecting the Companys resilience in navigating external headwinds and maintaining operational stability. During the year, the Company completed the sale of non-core land parcels situated at Dighe and Kalwe, Thane, aggregating approximately 17.56 acres. The transaction was undertaken as part of the Companys ongoing efforts to unlock value from non-operational assets and enhance financial . As of March 31, 2026, the net debt-to-equity ratio stood at 0.99, a significant improvement over 1.60 as of March 31, 2025, supported by retained earnings.

Earnings Per Share (EPS) stood at 43.92 during FY 2025 26, as compared to 6.02 in FY 2024 25. For a detailed analysis of financial ratios and significant changes therein, kindly refer to Note 48 of the Standalone Financial Statements.

For material developments in Human Resources / Industrial front, including number of people employed, refer Annexure - 3 and Annexure - 9 of Boards Report.

In conclusion, FY 2025 26 was marked by a challenging global and domestic operating environment. Amidst these external pressures, Mukand Limited remained committed to its strategic priorities - emphasizing operational efficiency, and a customer-centric approach. This unwavering focus enabled the Company to weather the volatility and reinforces its strong foundation for sustainable growth in the years to come.

Operational Highlights Steel Division

The Steel Division of Mukand Limited demonstrated resilience during FY 2025 26, navigating a challenging business environment marked by global steel overcapacity, volatile raw material prices, evolving trade dynamics and geopolitical uncertainties. The latter part of FY 2025 26 witnessed heightened geopolitical tensions in the Middle East, resulting in disruptions to shipping movements and increased volatility in freight, logistics and energy markets. Against this backdrop, the importance of supply chain resilience, prudent planning and effective risk management assumed even greater significance. Despite these external challenges, the Steel Division sustained stable operations, strengthened customer relationships, enhanced operational efficiencies, and maintained its focus on high-value specialty steel products. During the year under review, the Division continued its strategic emphasis on specialty alloy and stainless steel products, enabling the Company to reinforce its presence in value-added market segments.

Steel Production: The Company recorded production of 1,57,565 Metric Tonnes of Stainless Steel and 3,53,150 Metric Tonnes of Alloy Steel during FY 2025 26.

Operational Excellence and Process Improvement Initiatives - Operational excellence remained a key strategic priority for the Steel Division during FY 2025 26, with sustained efforts to enhance manufacturing efficiencies across melting, rolling, finishing and downstream operations. The Division further strengthened its portfolio of value-added stainless steel and alloy steel products by expanding its size and grade capabilities. During the year, it successfully developed and commercialised larger-section rolled and bright bar products for export-oriented seamless tube applications. These initiatives, coupled with the Companys capability to consistently deliver high-quality specialised steel grades, enabled Mukand to strengthen its presence across key industries, including automotive, engineering, defence, energy, oil & gas, railways, infrastructure and capital goods.

Sustainability, Safety and Environment - Mukand Limited remained committed to responsible manufacturing and sustainable business practices during FY 2025 26. The Steel Division continued to focus on efficient resource utilisation, energy conservation, process optimisation and compliance with applicable environmental regulations. The Company also reinforced its commitment to workplace safety through regular safety audits, preventive maintenance, employee awareness programmes and technical training, fostering a strong culture of safety across its manufacturing facilities.

Quality and Certifications: The Company continued to maintain multiple globally recognized certifications across its manufacturing facilities, reinforcing its commitment to quality, environmental stewardship, occupational health & safety, and energy efficiency. Mukands facilities continued to be certified under ISO 9001:2015 for Quality Management Systems, IATF 16949 for Automotive Quality Management Systems, ISO 14001 for Environmental Management Systems, ISO 45001 for Occupational Health & Safety Management Systems, and ISO 50001 for Energy Management Systems. These certifications reflect the Companys continued focus on process discipline, customer-centric manufacturing, sustainability, operational reliability, and continuous improvement. The Company successfully completed PED first and second surveillance audits, IATF 16949:2016 surveillance audits, and renewal of BIS licenses for stainless steel reinforced ribbed bars and stainless steel wire rods, bars, and bright bars. A significant milestone during the year was the Company receiving the prestigious Green Steel Certification under the Government of Indias Green Steel Taxonomy framework. Mukand Limited was awarded a 5-Star Green Steel rating for its Black Bar products and a 4-Star rating for its Wire Rod and Bright Bar products. The certification was granted by the National Institute of Secondary Steel Technology (NISST), which involved comprehensive verification of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions, plant energy consumption, and production data at the Companys Kalwe facility.

The Alloy Steel Division reinforced its commitment to quality, operational safety and manufacturing excellence during FY 2025 26. The Division was honoured with the NAMC Gold Award and the IGMC Gold Category Award from IRIM, Mumbai, recognising its excellence in manufacturing and continuous improvement initiatives. It also received the "Suraksha Puraskar" from the Joint Committee on Safety, Health & Environment in the Steel Industry for its exemplary safety practices. Further strengthening its credentials, the Division was recognised as an IBR "Well Known Steel Maker" and successfully renewed its ISO 45001:2018 certification, reaffirming its commitment to internationally recognised occupational health and safety standards.

Operational Highlights Industrial Machinery Division

During FY 2025 26, the Company undertook a strategic restructuring of its Industrial Machinery Business to enhance operational focus and unlock long-term value. The company executed a Business Transfer Agreement on October 18, 2025, for the transfer of a part of its Industrial Machinery Business to Mukand Heavy Engineering Limited (MHEL), its wholly owned subsidiary, on a slump sale basis. Consequently, the transferred business has been classified as a discontinued operation, while MHEL will continue to carry forward and develop this business as a wholly owned subsidiary of the Company.

Renowned for its technical expertise and customized engineering solutions, the Division specializes in the production of heavy-duty Electric Overhead Traveling (EOT) Cranes, Gantry Cranes, LevelLuffingCranes, and other bespoke lifting and material handling equipment. Its robust capabilities are supported by a skilled team of professionals with deep domain knowledge and a strong commitment to quality and safety. The Industrial Machinery Division reported revenue of 150 crore during FY 2025 26 as against 260 crore in the previous year. The lower revenue was primarily attributable to the planned relocation and commissioning of manufacturing operations at Lonand, Maharashtra which resulted in a temporary moderation in business activity during the transition period. The new facility is expected to strengthen the Divisions manufacturing capabilities and support its long-term growth strategy.

Key Business Achievement - Notwithstanding the temporary moderation in revenue during the transition phase, the Division continued to strengthen its order book by securing orders from leading companies across the steel, engineering, automotive, power, mining and infrastructure sectors, including repeat business from several long-standing customers. A key milestone during the year was the award of a prestigious order for the supply of two Electric Level Luffing (ELL) Jetty Cranes for the Government of India. This significant order underscores the Divisions engineering capabilities, project execution expertise and strong reputation in the heavy engineering and port equipment segment, providing a robust platform for future business growth.

Strategic Business Development and Global Engagement - During FY 2025 26, the Industrial Machinery Division successfully executed export dispatches of heavy-duty cranes for overseas projects, including supplies to the United States, demonstrating Mukands ability to meet global quality and engineering standards.

Engineering and Retrofit Excellence - The Division continued to enhance its capabilities in designing and developing customised process equipment to meet the specific requirements of its customers. Its engineering expertise and solution-oriented approach were reflected in the receipt of the third consecutive order from a leading steel manufacturer for Coke Dry Quenching (CDQ) equipment, reinforcing its position as a trusted partner for specialised engineering solutions. The Division also successfully executed a high-capacity molten metal ladle transfer car incorporating advanced hydraulic tilting and pouring systems for a leading multinational steel producer. Expanding beyond its traditional crane portfolio, it further diversified its offerings by securing orders for specialised molten aluminium handling transfer cars, reflecting its growing capabilities in delivering customised material handling solutions for complex industrial applications. With an unwavering focus on innovation, quality, and customer satisfaction, the division continues to raise the bar in the field of engineered heavy equipment. Building on its legacy and engineering excellence, the Division is poised to explore new frontiers, strengthen global partnerships, and contribute meaningfully to Indias industrial growth story.

Future Outlook

Looking ahead, Mukand Limited remains focused on strengthening its position across the specialty steel and heavy engineering value chain through continued investments in technology, product development and manufacturing capabilities. The Company will continue to enhance its portfolio of value-added products, expand its presence in high-growth application segments and deepen customer partnerships by delivering specialised solutions aligned with evolving industry requirements. The Companys outlook continues to be supported by Indias sustained focus on infrastructure development, manufacturing competitiveness, energy transition and industrial modernisation, all of which are expected to drive demand for advanced steel products and engineering solutions. While global economic uncertainties, geopolitical developments, trade policies and raw material price movements may continue to influence market conditions, Mukands diversified business portfolio, strong manufacturing capabilities, customer-centric approach and emphasis on innovation position it well to pursue long-term, sustainable growth and create enduring value for its stakeholders. At the same time, the Company remains committed to advancing its sustainability agenda through continuous improvements in resource efficiency, energy conservation and responsible manufacturing practices. As the global steel industry progresses towards lower-carbon production, Mukand will continue to invest in process improvements, cleaner technologies and operational initiatives that support environmental stewardship while enhancing long-term business competitiveness. Through a balanced approach to growth, innovation and sustainability, the Company remains focused on creating enduring value for all its stakeholders.