Mukat Pipes Ltd Management Discussions

(a) Industry Structure and Developments:

The Punjab Government continues to focus on industrial development and infrastructure creation through various policy initiatives and development projects. The Governments emphasis on infrastructure development, including Smart Cities and other public infrastructure projects, is expected to provide growth opportunities for the steel pipe industry. The pipe industry continues to operate in a highly competitive environment, with larger players benefiting from economies of scale and advanced manufacturing technologies. Continued investment in infrastructure by the Government is expected to support demand for steel pipes and provide encouraging growth prospects for the industry.

(b) Opportunities and Threats:

The continued emphasis of the Government on infrastructure development provides significant opportunities for the Company to secure orders from Government departments, public sector undertakings and private sector customers. However, increasing competition in the steel pipe industry and the availability of substitute products such as plastic pipes in certain applications continue to pose challenges to the business.

(c) Segment-wise or Product-wise Performance:

The Company operates in a single business segment, namely "Longitudinal & Helical Pipes", and there is only one geographical segment.

(d) Outlook:

The Company remains optimistic about securing additional orders from both existing and new customers. The healthy order book during the year has resulted in improved production and operational performance. Continued emphasis on infrastructure development in the country is expected to create further business opportunities for the Company.

(e) Risks and Concerns:

The Company is not availing any credit facilities from banks or financial institutions. Accordingly, the financial risk associated with repayment obligations remains minimal. However, the Company continues to monitor market conditions, raw material prices and competitive pressures to mitigate business risks.

(f) Internal Control Systems and their Adequacy:

Adequate procedures and guidelines are in place and are reviewed from time to time to ensure effective internal controls over the operations of the Company.

An independent Internal Auditor carries out comprehensive internal audits to evaluate the adequacy and effectiveness of internal control systems, ensure compliance with applicable laws and policies, and identify areas requiring improvement.

(g) Discussion on Financial Performance with respect to Operational Performance:

During the financial year under review, the Company recorded a significant improvement in its operational performance. The Company secured a major production order of 15,000 MT, resulting in substantial growth in production and revenue during the year. Total production increased to 4,862.643 MT, of which 4,586.013 MT was executed on a job work basis. Revenue from operations increased to Rs. 528.74 Lakhs as compared to Rs. 385.26 Lakhs in the previous financial year. The Company earned a profit of Rs. 5.34 Lakhs during the year. The management continues to focus on improving capacity utilization, operational efficiency and profitability.

(h) Material Developments in Human Resources / Industrial Relations Front, including Number of People Employed:

Industrial relations continued to remain harmonious and cordial during the year, providing a conducive environment for smooth operations. Adequate safety measures have been implemented at all business locations, and high standards of health, safety and hygiene are maintained. The number of permanent employees of the Company increased from 38 as on 1st April, 2025 to 39 as on 31st March, 2026.

(i) Details of Significant Changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios:

There were no significant changes in the key financial ratios during the financial year except those attributable to the improvement in operational performance and increased business activity during the year.

(j) Details of any Change in Return on Net Worth as compared to the Immediately Previous Financial Year along with a Detailed Explanation thereof:

The Return on Net Worth improved during the financial year primarily due to improved operational performance and the Company reporting a profit of Rs. 5.34 Lakhs as against the previous financial year.

(k) Cautionary Statement:

Certain statements contained in this Management Discussion and Analysis may be forward-looking in nature and are based on the current expectations of the management. Actual results may differ materially from those expressed or implied due to various factors including changes in economic conditions, Government policies, market demand, raw material prices, competition, regulatory developments and other risks beyond the control of the Company.