National General Industries Ltd Management Discussions

FORWARD LOOKING STATEMENT

This report contains forward-looking statements, which may be identified by their use of words like plans , expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectation of projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market position, expenditures and financial results are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements could, thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events. The discussion should be read in conjunction with the Companys audited financial statements and related notes for the financial year ended 31 March 2026.

BUSINESS OVERVIEW OF FY 2025-26

National General Industries Limited (the Company or NGIL) is engaged in the manufacturing and sale of engineering steel products. The Company operates its manufacturing facilities at Ghaziabad, Uttar Pradesh, and has established a presence in the engineering steel segment over several decades. The Companys principal products include steel rounds, squares and flat bars, which find applications across a range of industries. The Company also undertakes job-work activities relating to steel processing, which has constituted an important part of its operating business.

During FY 2025-26, the Company operated in a challenging steel market characterised by fluctuations in steel prices, raw material costs, subdued realisations in certain product categories and competitive pressures. The Company continued to focus on operational efficiency, customer retention, prudent working-capital management and optimisation of its product and service mix.

ECONOMIC REVIEW

The global economy continued to operate in an environment of geopolitical uncertainty, changing trade policies, commodity-price volatility and uneven economic growth during FY 2025-26. The steel industry remained particularly sensitive to developments in global trade flows, Chinese steel exports, raw material prices, energy costs, freight rates and domestic infrastructure spending. Increased availability of steel in international markets and volatility in global steel prices exerted pressure on realisations in several markets.

Despite these challenges, the Indian economy continued to demonstrate resilience. Government expenditure on infrastructure, transportation, construction, manufacturing and other capitalintensive sectors supported economic activity and provided a favourable underlying environment for steel consumption. Indias steel consumption remained strong during FY 2025-26. According to the industry data, Indian finished steel consumption increased to approximately 164 million tonnes during the year, representing growth of about 8% over the previous year.

The medium- to long-term outlook for the Indian economy remains positive, supported by infrastructure development, urbanisation, manufacturing expansion, capital expenditure and increasing demand from automobile, engineering, construction and other steel-consuming sectors.

INDUSTRY OVERVIEW

India continues to be one of the worlds largest steel-producing and consuming economies. The domestic steel industry remains an important contributor to industrial development and

infrastructure creation. During FY 2025-26, domestic steel demand remained resilient despite volatility in international markets. Government infrastructure spending, continued investments in roads, railways, urban infrastructure and industrial capacity, together with demand from automobile and engineering sectors, supported consumption.

At the same time, the industry continued to face certain structural and cyclical challenges, including, volatility in steel prices; fluctuations in iron ore, scrap, coal and other raw material prices; competitive pressure from large and integrated steel producers; imports and international steel flows; volatility in energy and transportation costs; pressure on margins due to lower realisations; working-capital requirements; increasing environmental and regulatory requirements; and global geopolitical and trade uncertainties.

For downstream and engineering-steel manufacturers such as the Company, market conditions are influenced not only by overall steel demand but also by demand from specific end-use industries, product specifications, customer requirements and price competition.

Outlook for the Steel Industry

The medium- and long-term outlook for the Indian steel industry remains constructive. Indias continued infrastructure development, manufacturing growth, increasing automobile production, expansion of engineering industries and rising per-capita steel consumption are expected to support steel demand.

The Companys focus will remain on strengthening its position in the engineering-steel segment, improving product mix, enhancing operational efficiency and maintaining long-standing customer relationships.

BUSINESS PERFORMANCE

FY 2025-26 was a challenging year for the Company. The Companys operating performance was affected by lower sales volumes/realisations, competitive market conditions and pressure on operating margins. The Company continued to undertake job-work activities and sale of steel products according to market demand and customer requirements. Job-work remains an important component of the Companys business model and provides an opportunity to utilise manufacturing capacity while reducing certain market and inventory-related risks associated with direct steel sales.

The Company continued its efforts towards improving capacity utilisation; controlling manufacturing and operating costs; optimising raw material procurement; improving product mix; strengthening customer relationships; increasing focus on value-added engineering-steel products; maintaining quality standards; and improving working-capital efficiency. The management remains focused on increasing business volumes in a calibrated manner while maintaining financial discipline.

FINANCIAL AND OPERATIONAL PERFORMANCE

The financial performance of the Company for the financial year ended on 31 st March, 2026 and 31 st March, 2025 are summarized below:-

(Rupees in Lakhs)

Particulars	For the year ended
	31-Mar-26		31-Mar-25
INCOME:
Revenue from operations	895.30		1,034.73
Other Income		200.14	163.49
		1,095.44	1,198.21
EXPENSES:
Cost of materials consumed		654.10	603.80
Purchase of Stock-in-Trade Changes in inventories of finished goods, work-in-progress and Stock-in-Trade		(17.13)	38.11
Employee benefit expense		207.86	201.53
Financial costs		6.32	8.11
Depreciation and amortization expense		37.98	39.33
Other expenses		249.83	202.56
		1,138.96	1,077.06
Profit before exceptional items and tax		(43.53)	121.15
Exceptional Items		-	-
PROFIT BEFORE TAX		(43.53)	121.15
TAX EXPENSES:
Current tax		-	26.00
Deferred tax		4.40	0.87
Profit for the period from continuing operations		(47.93)	94.28
PROFIT AFTER TAX		(47.93)	94.28
Other Comprehensive Income/(Loss) (A)Items that will be reclassified to profit or loss
(B)Items that will not be reclassified to profit or loss		69.57	104.14
Income tax relating to this		(16.70)	21.27
Total Other Comprehensive Income/(loss) for the year		86.27	82.87
Total Income/(loss) for the year		38.34	177.15

RESULTS OF OPERATIONS AND STATE OF COMPANYS AFFAIRS

The Highlights of the Companys performance for the year ended on March 31, 2026 are as under:

^ Value of Sales increased to Rs. 304.16 lakhs (PY Rs. 164.50 lakhs)

^ Value of Job Work Services decreased to Rs. 591.14 lakhs (PY Rs. 870.22 lakhs)

^ Value of Other Income increased to Rs. 200.14 lakhs (PY Rs. 163.49 lakhs)

^ PBDIT decreased to Rs.0.77 lakhs (PY of Rs. 168.59 lakhs)

^ PBT decreased to Rs. (-) 43.53 lakhs (PY Rs. 121.15 lakhs)

^ Net Profit decreased to Rs. (-) 47.93 lakhs (PY Rs. 94.28 lakhs)

The Companys financial performance during FY 2025-26 reflects the challenging operating environment prevailing in the steel industry. The decline in revenue was primarily attributable to lower business volumes and continuing pressure in the steel market. The Company also experienced pressure on profitability during FY 2025-26.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIO

The details of significant changes (i.e. changes of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanation therefor is provided under note no. 32 of the Financial Statement of the Company.

INDIAN ACCOUNTING STANDARDS (Ind AS)

The Company are complying with the applicable Ind AS issued by the Ministry of Corporate Affairs (MCA) from time to time.

OPERATIONAL EXCELLENCE

Operational efficiency remains a key focus area for the Company. During FY 2025-26, management continued to focus on improving utilisation of available manufacturing capacity; reducing avoidable manufacturing costs; improving yield and reducing process losses; controlling power and fuel consumption; improving maintenance practices; optimising procurement and inventory levels; improving production planning; strengthening quality control; and improving customer service and delivery performance.

The Company believes that continuous improvement in these areas is essential for enhancing competitiveness and profitability in the engineering-steel industry.

SEGMENT-WISE PERFORMANCE

A detailed note on the segment-wise performance is given under note no. 25 of the Financial Statement of the Company.

INTERNAL CONTROL SYSTEM

The Company has an appropriate system of internal financial controls commensurate with the size and nature of its business. The internal control framework is designed to provide reasonable assurance regarding effectiveness and efficiency of operations; safeguarding of assets; reliability of financial reporting; prevention and detection of fraud and errors; compliance with applicable laws and regulations; and appropriate authorisation of transactions. The Audit Committee periodically reviews the adequacy and effectiveness of internal financial controls and considers the observations of the internal and statutory auditors. Based on the assessment undertaken during the year, management believes that the Companys internal financial controls are adequate and operating effectively.

The Company has appointed M/s B.R.Maheswari & Co., Chartered Accountants, (FRN 001035N), New Delhi to oversee and carry out internal audit of its activities. The internal audit reports are reviewed by the Audit Committee periodically. Based on its evaluation (as defined in section 177 of Companies Act 2013 and Clause 18 of SEBI Regulations 2015), the audit committee has concluded that as on March 31, 2026, your internal financial controls were adequate and operating effectively.

RISK MANAGEMENT

The Company operates in an industry exposed to various business, financial and operational risks. The principal risks identified by the management include fluctuations in the prices of steel inputs and other raw materials, volatility in finished-steel prices, fluctuations in demand from engineering, automobile, construction and other end-user industries, competitive pressures from organised and unorganised manufacturers and larger steel producers, working capital requirements, regulatory changes and operational disruptions. These factors may impact the Companys margins, sales realisations, profitability and business operations.

The Company seeks to mitigate these risks through prudent procurement and inventory- management practices, regular monitoring of market prices, maintaining an appropriate product mix and strengthening its focus on value-added products and customer relationships. The Company also seeks to diversify its customer base and industrial applications while maintaining emphasis on product quality, technical specifications, customer service and delivery reliability. Working capital, receivables, inventories and cash flows are monitored regularly to maintain financial discipline. The Company keeps abreast of applicable regulatory requirements and undertakes necessary compliance measures. Preventive maintenance, operational monitoring and appropriate contingency measures

are also undertaken to minimise the impact of plant and machinery breakdowns, power interruptions and other operational disruptions.

OPPORTUNITIES AND THREATS

The Company believes that the continued structural growth of the Indian economy and increasing steel intensity provide a favourable long-term environment for engineering-steel manufacturers. The sustained growth in domestic steel consumption, coupled with increased infrastructure development and government capital expenditure, is expected to support demand for steel products. Growth in the automobile and auto-component industries, engineering and manufacturing sectors, construction and capital goods industries is likely to create further opportunities for the Company. In addition, increasing demand for specialised engineering steel, opportunities to develop higher value-added products, better utilisation of existing manufacturing capacity and expansion of the Companys customer base provide avenues for sustainable growth. The Company will continue to focus on improving operational efficiency, strengthening customer relationships and optimising its manufacturing capacity to capitalise on these opportunities.

At the same time, the Company operates in an industry exposed to various challenges and external risks. Volatility in steel prices and fluctuations in the cost of raw materials may exert pressure on operating margins. Competition from larger and integrated steel manufacturers, availability and cost of working capital, fluctuations in industrial demand and rising energy costs may also impact the Companys operations and profitability. Further, increasing regulatory and compliance requirements, together with geopolitical developments and changes in international trade conditions, may create additional uncertainties for the steel industry. The Company remains conscious of these challenges and will continue to adopt a disciplined, prudent and calibrated approach towards procurement, production, working capital management and cost optimisation to mitigate their potential impact.

INDUSTRIAL RELATIONS AND HUMAN RESOURCE MANAGEMENT

Employees remain an important part of the Companys ability to operate efficiently and deliver quality products to customers. The Company seeks to maintain a work environment based on safety, discipline, productivity, teamwork and continuous improvement. During FY 2025-26, the Company continued to focus on employee capability, operational discipline and compliance with applicable labour and workplace requirements. The Company believes that employee engagement and retention of experienced personnel are important for maintaining operational continuity and product quality. The management wishes to place on record, the excellent cooperation and contribution made by the employees, at all levels of the organization to the continued growth of the Company. The Companys industrial relations continued to be harmonious during the year under review.

For and behalf of the Board of Directors For NATIONAL GENERAL INDUSTRIES LIMITED

	Sd/-
Place : New Delhi	Pawan Kumar Modi
Date : 14.08.2026	Chairman and Managing Director
	DIN :00051679