Mukand Ltd Management Discussions

for the Annual Report 2024-25

Global Steel Industry Overview

The global steel industry navigated a mixed landscape during the financial year 2024 25, marked by subdued demand, persistent geopolitical uncertainties, and trade policy disruptions. Compared to the previous fiscal year, overall steel production saw modest deceleration in growth, particularly in Europe and North America, while select Asian economies continued to show resilience.

While China, the worlds largest steel producer, reported a moderation in output amid slow consumption patterns and regulatory curbs, India stood out as a bright spot. Bolstered by robust infrastructure development and sustained momentum in the housing sector, Indias steel production recorded a healthy uptrend, consolidating its position as a global growth engine.

In contrast, Europe grappled with anaemic demand, burdened by elevated energy costs and sluggish construction activity. Meanwhile, North America showcased green shoots of recovery, driven primarily by infrastructure-led steel consumption initiatives.

Adding fuel to the fire, two significant global-political developments further upended global steel trade and logistics. The Russia-Ukraine conflict, now in its third year, continued to disrupt the supply of critical raw materials - such ferro-alloys - from key Eastern European corridors, thereby tightening global supply chainsandinflatinginput costs. Concurrently, the Red Sea crisis, triggered by escalating tensions in the Middle East and attacks on commercial vessels, severely impacted major shipping routes, resulting in elevated freight rates and delivery bottlenecks, particularly affecting steel and allied product flows across Asia, Europe, and Africa.

The global trade landscape was further unsettled by the United States decision to levy higher tariffs on steel imports from nations including India, China, and Mexico. While this protectionist maneuver is poised to challenge Indian steel exports to the U.S. in the near term, it also opens the door for Indian steelmakers to diversify their export footprints into emerging markets such as Southeast Asia, Latin America, and the Middle East - where market appetite remain favorable.

Despite these formidable headwinds, the global steel industry has shown remarkable agility, responding through strategic realignments, technological advancements, and an increasing pivot towards value-added products and green steel initiatives. As we look ahead to FY 2025 26, a modest but cautious recovery is on the horizon. The global apparent steel consumption is projected to expand, contingent, however, upon a stabilisation of macroeconomic variables and a de-escalation of geopolitical risks.

In this dynamic environment, adaptability and innovation remain the steel industrys lodestars, ensuring that even amid rough seas, the sector continues to forge ahead with resilience and resolve.

India continues to hold its position as the worlds second-largest steel producer, and its prominence in the global steel value chain is steadily gaining ground. As the nation presses forward with its ambitious infrastructure, manufacturing, and urbanization agendas, the steel industry has emerged as a critical enabler of this transformation.

Government-led policy thrusts - including PM Gati Shakti, the National Infrastructure Pipeline (NIP), and the Make in India initiative, PM Awas Yojana, increased focus of constructing roads, green buildings and highways - have catalyzed a significant uptick in domestic steel consumption, which has consistently posted strong double-digit growth over the past three years. This growth trajectory reflects the robust demand underpinnings of the Indian economy, particularly in construction, transportation, and energy-intensive sectors.

However, within this overall resilience, the stainless-steel segment finds itself at a strategic inflection point. The fiscal year 2024 25 was particularly challenging for the domestic steel sector, as a surge in low-cost imports from China and Free Trade Agreement (FTA) partner countries eroded market share and placed downward pressure on sales realization and operating margins. The oversupply, combined with a global slowdown in steel demand, continued to exert pressure on the industrys overall growth momentum.

Amidst these external pressures, raw material availability remained a critical domestic challenge. One of the major constraints is the restricted availability of critical raw materials, particularly Ferro Nickel, which remains heavily import-dependent due to the absence of indigenous reserves. In a welcome policy move, the Government reduced the Basic Customs Duty on Ferro Nickel from 2.5% to zero, providing much-needed respite to domestic producers. Nevertheless, the lack of targeted policy support for the stainless-steel sector, combined with intensifying global competition, has added to the operational and strategic challenges for Indian manufacturers.

Additionally, the Government of India has made it mandatory for all Ferro Nickel imports to comply with BIS certification under its Quality Control framework. While this aims to ensure quality compliance and strengthen domestic standards, it has also posed logistical and procedural challenges for importers, affecting the timely availability of raw materials.

Looking ahead, the long-term outlook remains promising. According to S&P Global Market Intelligence, Indias GDP is projected to rise from $3.9 trillion in 2024-25 to approximately $6 to $7 trillion by 2030. Correspondingly, stainless steel demand is expected to grow at a CAGR of 7 8% beyond 2025, buoyed by infrastructure investments. The construction, renewable energy, transportation, and consumer goods sectors are expected to be the primary demand drivers in this growth cycle. To fully capitalize on this momentum, however, the industry requires a holistic national strategy - one that strengthens supply chain resilience, ensures quality standardization, tightens import controls, and enhances export competitiveness. At this pivotal juncture, Mukand Limited, with its legacy and leadership in stainless and alloy steels, is well-equipped to spearhead this transformation through process innovation, operational excellence, and market adaptability.

As India stands on the threshold of a transformative era, the steel industry is poised to serve as a cornerstone of the nations industrial and economic ascent. Supported by strategic investments, policy alignment, and an accelerating shift toward sustainable and green materials, the sector is well-positioned to reinforce Indias aspiration of becoming a global steel manufacturing powerhouse. The years ahead will be crucial in shaping the future of Indian steel - where resilience, sustainability, and technological leadership will be the bedrock of long-term success.

Overview of the Companys Performance

During the financial year 2024 25, Mukand Limited saw a marginal decrease in its topline performance compared to the previous year. However, the company remained steadfast in its pursuit of operational efficiency and long-term value creation amidst a backdrop of global economic uncertainty. Anchored by a rigorous focus on cost optimization, customer-centric innovation, and value engineering, Mukand continued to deepen its presence in the specialty steel domain, particularly catering to the evolving demands of sectors like automotive, engineering, and oil & gas etc. In a dynamic economic environment, Mukand strengthened its position through improved realizations, improved operational efficiencies, and a strategic focus on value-added steel products. Mukand Limited achieved a bloom production volume of 4,99,240 Metric Tonnes across its Kalwe and Hospet plants, reflecting its steadfast commitment to operational excellence and fulfilling customer expectations.

The Company achieved revenue from operations of Rs.4,911.16 crore during FY 2024 25. Although this represents a modest decline of 5.08% from Rs.5,174.69 crore in the previous year, but the performance reinforces the companys ability to navigate a challenging market environment while maintaining a strong industry standing.

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, MukandreportedaProfitAfter Tax (PAT) of Rs.86.95 crore for the year. This underscores the Companys resilience and adaptability in an unpredictable economic landscape.

As of March 31, 2025, the net debt-to-equity ratio stood at 1.60, supported by prudent capital allocation and effective financial management.

Earnings Per Share (EPS) stood at Rs. 6.02 during FY 2024 25, as compared to Rs. 7.20 in FY 2023 24. For a detailed analysis of financial ratios and significant changes therein, kindly refer to Note 36 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.

Inconclusion,FY2024 25presentedsignificant for the steel industry, with global headwinds stemming from geopolitical tensions, supply chain disruptions, and dampened demand in key international markets. On the domestic front, the industry faced intense pressure due to a surge in low-priced steel imports and reduced exports, which weighed heavily on market dynamics and pricing. Amidst these external pressures, Mukand Limited remained committed to its strategic priorities - emphasizing operational efficiency, technological advancement, 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.

The Steel Division of Mukand Limited exhibited commendable resilience and agility in FY 2024 25, adeptly navigating a dynamic and challenging business landscape. Despite external headwinds, the Division remained steadfast in its pursuit of operational excellence,maintaininganunwaveringfocusonquality,efficiency, and customer-centricity.

Reinforcing its position across both domestic and international significantstrides in productmarkets, the Division made enhancement and portfolio diversification. The strategic emphasis on value-added steel products, alongside continuous process optimization, enabled the Division to cater to the evolving needs of its customers while ensuring sustained performance and growth.

Total Steel Production: The Company achieved a total Stainless Steel production of 1,49,071 Metric Tonnes during FY 2024 25, reflecting a marginal 1.21% decline over the previous year. This decline was largely due to softer offtake in both domestic and export markets.

Alloy Steel Production: In the FY 2024-25, your company achieved a total production of 3,50,169 Metric Tonnes of Alloy Steel.

Technological Upgradation - In a significant step towards improving Stainless Steel Division of Mukand Limited successfully completed a major revamp of its Continuous Caster. The upgraded caster is set to yield substantial benefits in terms of quality and finish of the product. In the year 2024-25, the company also commissioned two state-of-the-art Landgraf machines in the Bright Bar division. These advanced machines enable precision finishing, aligning with the stringent quality requirements of high-performance engineering applications. In FY 2024 25, the Alloy Steel Division undertook several key technological upgradations aimed at improving quality, efficiency, and traceability across operations. The introduction of bloom identification scanning during re-heating ensures better process tracking, while the implementation of QR codes on all test certificates has strengthened product traceability. Additionally, automation of the re-heating furnace now enables real-time monitoring of temperatures, bloom counts per hour, and BFG (Blast Furnace Gas) flow - laying the foundation for smarter and more efficient steelmaking.

Capacity Utilization and Operational Efficiency: The average capacity utilization across steel melting shop and rolling mills improved during the year, aided by planned maintenance, process automation, and better scheduling. On the operational efficiency front, the Wire Rod Mill continued to deliver strong yield performance, supporting overall productivity goals. Additionally, a focused drive toward energy optimization resulted in a reduction in specific power consumption.

Product Portfolio and Value Addition: During FY 2024 25, the Stainless Steel Division of Mukand Limited sustained its strategic focus on value-added steel products. This shift towards special-grade product mix was aligned with the objective of catering to evolving customer requirements across different sectors like renewable energy, railways, and medical, etc.

Quality and Certifications: The Division maintained its commitment to international quality standards, with certifications under ISO 9001:2015, ISO 14001, ISO 50001:2018 and IATF 16949. In FY 2024 25, Mukand Limited received prestigious accolades at the National Convention on Quality Concepts (NCQC-24), underscoring the Companys unwavering commitment to continuous improvement and operational excellence. The Company was honored with the "Par Excellence" Award (1st Prize) for its Quality Circle initiative. On the other hand, the Alloy Steel Division of Mukand Limited continued to shine through its relentless pursuit of excellence and compliance during FY 2024 25. The Division was honoured with the prestigious IBR ‘a Well-Known Steel certification, reinforcing the quality and credibility of its steel offerings. Adding to the accolades, the Division received the NAMC Gold Award from IRIM, Mumbai, and was recognised with the Greentech Global EHS Award 2024 25 for its exemplary EHS practices.

Customer Engagement and Market Development: The Stainless Steel Division deepened engagement with key OEMs and Tier-I suppliers, fostering long-term partnerships and collaborative development of customized steel solutions. The Division developed stainless steel products tailored for key sectors such as automotive, medical, railways, export engineering, chemicals, and power. These materials were designed to meet demanding performance requirements - from precise mechanical properties for advanced medical equipment to high strength and corrosion resistance for challenging industrial and infrastructure applications. The Alloy Steel Division at Mukand Limited successfully developed and supplied several special grades to highly specialized application areas across domestic and export markets. Some of these developments catered to the stringent requirements of export markets, underscoring the Divisions technical capabilities and global competitiveness. By aligning its R&D efforts with evolving industry needs, Mukand continues to strengthen its position as a preferred supplier of customized steel solutions for both domestic and international clients.

Sustainability and Environment Management: The Steel Division advanced its sustainability agenda through enhanced energy efficiency, increased use of scrap-based steelmaking, and reduction in greenhouse gas emissions. Effluent treatment, waste heat recovery, and responsible waste disposal practices were further strengthened to minimize the environmental footprint.

Mukand Limiteds Industrial Machinery Division continues to embody the Companys legacy of engineering excellence, innovation, and precision in the heavy engineering sector. With over six decades of experience, the Division has emerged as a trusted name in the design and manufacture of high-performance industrial equipment, catering to critical sectors such as steel, power, shipbuilding, infrastructure, and defence.

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, Level Luffing Cranes, 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 generated revenue of Rs. 260 crore during the year under review, compared to Rs. 221 crore in the previous year. This growth reflects Mukands deep technical expertise and its unwavering focus on delivering high-performance, customized solutions to its clients.

During the year, the division also bagged orders from prominent clients across Steel, Engineering and other sectors. This continued customer confidence reflects Mukands proven ability to deliver reliable, innovative, and performance-driven engineering solutions tailored to exacting industry requirements.

FY 2024 25 was a year of landmark achievements for the Industrial Machinery Division, reinforcing its status as a leader in large-scale engineering innovation.

Asias First 91-Meter Span EOT Crane - Our Industrial Machinery Division achieved a historic milestone with the successful manufacturing, installation, and commissioning of Asias first 91-meter span EOT crane. This state-of-the-art crane, with a dual lifting capacity of 100+100 tonnes, was erected using the innovative Strand Jack method, executed in collaboration with a globally reputed engineering firm. This project is a testament to the Divisions ability to deliver solutions of unprecedented scale and complexity, combining advanced mechanical design, precision fabrication, and seamless project execution.

Manufacturing of CDQ System for the Steel Industry - Demonstrating its engineering depth and manufacturing capabilities, the Division successfully developed and delivered a Coke Dry Quenching (CDQ) system along with Coke Bucket for a leading steel manufacturing company. This critical system plays a pivotal role in energy recovery and environmental sustainability within steel plants and underscores Mukands commitment to supporting green technologies in heavy industry. This breakthrough highlights Mukands engineering prowess and expertise in manufacturing specialized industrial equipment.

Innovative EOT Crane with Moving Cabin - The Division also completed another standout project involving the design and fabrication of a cutting-edge EOT crane featuring a moving operator cabin. This complex and technically demanding project called for out-of-the-box thinking and precise engineering execution. The result was a breakthrough in crane design that enhances operational flexibility, safety, and ergonomics in material handling.

First Export Order from the USA: In the FY 2024-25, Industrial Machinery Division secured its very first order from milestone in the Companys global journey. The project involves the the UnitedStatesofAmerica,markingasignificant manufacturing of a 40-ton capacity, 113-foot span EOT crane, specifically engineered for magnet handling applications. Weighing in at 140 tonnes, the crane is designed to meet stringent American engineering standards, reflecting Mukands ability to deliver high-quality, world-class equipment for international markets.

Tailor-Made Solutions: Every project undertaken by the Division is uniquely tailored to the specific requirements of the client, combining deep industry knowledge with high-end customization.

Cross-Sector Expertise: Our Industrial Machinery Division serves to a diverse customer base across the steel, power, shipbuilding, defence, and cement sectors, supplying mission-critical equipment that meets the highest standards of safety, reliability, and performance.

Improved Operational Efficiency: To enhance competitiveness efficiency, the Industrial Machinery and operational

Division undertook multiple initiatives across various functional areas during FY 2024 25. These efforts were complemented by ongoing activities focused on quality improvement, Total Productive Maintenance (TPM), Kaizen, and adherence to ISO standards. Strategic sourcing, vendor development, and continuous enhancements in manufacturing processes further contributed to optimizing the divisions performance. The Division remains committed to sustaining and expanding these initiatives in the coming year to drive greater value and maintain its leadership in the industry.

Timely Project Execution Strengthening Customer Trust: Whether its a complex site installation or a turn-key manufacturing assignment, the Division ensured timely delivery to its customers. During FY 2024 25, the division demonstrated strong execution capabilities by delivering critical equipment in line with customer schedules, thereby reinforcing its position as a trusted partner in industrial infrastructure. The Division ensured the timely supply of EOT cranes, equipment, and spares to several key clients without impacting their project or production requirements. This consistent adherence to delivery commitments significantly strengthened customer confidenceand highlighted the Divisions reliability and customer-focused approach.

With an unwavering focus on innovation, quality, and customer satisfaction, the Industrial Machinery Division of Mukand Limited 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.

Looking ahead, Mukand Limited remains optimistic about the long-term growth trajectory of the steel and engineering sectors, both in India and globally. The company plans to continue investing in downstream value-added products to strengthen its market position and drive differentiation. The company is also prioritizing the development and supply of special steel grades tailored for niche applications in sectors such as aerospace, defense, power, and precision engineering.

Mukand is also working towards improving efficiency in the procurement of raw materials, aiming to ensure supply stability and cost competitiveness amid global market fluctuations. In parallel, the company is focused on increasing capacity utilization at its downstream rolling facilities, which is expected to unlock operating leverage and improve overall productivity. In line with Indias vision for sustainable and self-reliant manufacturing, the company continues to expand its integration of renewable energy sources and adopt green production practices, thereby reinforcing its ESG commitments.

While near-term uncertainties such as global trade tensions and raw material volatility persist, Mukands strong fundamentals, diversified product portfolio, and customer-centric strategy provide a resilient foundation for sustained and inclusive growth.