This report is an integral part of the Board Report. The objective of this report is to convey the Managements perspective on the external environment and steel industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities, and internal control systems and their adequacy in the Company during the Financial Year 2024-25
Industry Structure and Development
In 2024, world crude steel production reached 1,882.6 million tonnes (MT) as per data released by the World Steel Association (January 24, 2025). Global steel demand is expected to increase further by 12% in 2025. India continues to be the worlds second-largest steel producer and one of the strongest demand drivers, with steel demand projected to grow by 8% in 2025 and expected to reach 200-210 MT by 2030.
Indias crude steel production for 2024 stood at 149.587 MT, reflecting a 6.3% growth over the previous year. Production is estimated to grow by 4- 7% to 123-127 MT in FY 2024-25. On the macroeconomic front, Indias Real GDP is projected to grow at 6.5% in FT 2024-25 compared to 82% in FY 2023-24, while Nominal GDP growth has been reported at 9.8% in FY 2024-25, slightly higher than the 9.6% growth recorded in FY 2023-24, Steel consumption growth has moderated to 11.5% in 2024-25, compared to 13.6% in 2023-24.
Government policies have been pivotal in driving the sectors momentum. Initiatives such as the Production-Linked Incentive (PLI) Scheme, increased infrastructure spending, and manufacturing push have bolstered both production and consumption. In the Union Budget 2025-26, capital expenditure (capex) has been retained at the same share of GDP as 2024. Central government capex is budgeted at Rs. 11.2 trillion for FY 2025-26, up from a revised estimate of Rs. 10.2 trillion in FY 2024-25. Rising capacity utilisation in the manufacturing sector, along with strong corporate and banking balance sheets, is expected to support private sector investments. However, global trade frictions and evolving tariff policies in the US could influence sentiment. Early indications, nevertheless, suggest that realignment of global supply chains could benefit India in the medium term.
At the Company level, various approvals have been obtained from the Ministry of Environment, Forest and Climate Change (MOEFCC) and CECB for the expansion of a 1.5 MTPA Coal Washery with Coal Handling System, enhancing self-reliance, and the installation of one 25 Ton induction Furnace, one 100 TPD Sponge Iron Kiln. The Company is also implementing structural cost reduction measures, including rationalisation of fixed costs, and strengthening supply chain monitoring to ensure smooth plant operations,
Opportunity and Threat
The Ministry of Steel, in collaboration with the Steel Research Technology Mission of India (SRTMI), continues to promote industry innovation. In March 2025, new R&D schemes and the Steel Collab platform were launched to connect industry, academia, startups, and research institutions, focusing on decarbonization, digitalisation, and advanced steel technologies. Priority areas include green steel, hydrogen-based production, climate change mitigation, and waste/resource efficiency.
Since 2021, India has emerged as the strongest driver of global steel demand growth, supported by the construction sector, robust government infrastructure spending, and private consumption. The automotive sector performed better than expected, while consumer durables lagged under inflationary pressure. Coking coal prices softened toward the end of 2024, providing some cost relief, though margins were impacted by cheaper imports from China and falling international steel prices.
Domestic steel prices remain under pressure from low-cost imports, particularly from China. The Government of India is reportedly considering a three-year import tariff of 11% 12% on select steel products, which, if implemented, could lift domestic steel prices by 4- 6% and ease competitive pressure.
Globally, trade policies remain a key factor. The US administration has withdrawn exemptions on its 25% tariff on steel imports (under Section 232) and extended coverage to derivative products. While tariffs are largely uniform for exporters except China, trade negotiations with countries such as the UK, Japan, and Korea could alter access dynamics. For India, the direct impact of US tariffs on steel exports is limited, but indirect effects such as trade diversions and higher tariffs on steel-intensive manufacturing exports remain potential risks. Despite these challenges, Indias economy is projected to grow at 6.5% in FY 2025-26. retaining its position as the fastest-growing large economy, with robust manufacturing activity and infrastructure spending driving optimism.
Segment wise performance
The Company is engaged in the manufacturing/trading of Iron & Steel, business which is considered the only business segments. The turnover of the Company is Rs 419.84 crore during the year.
Outlook
Company is in the process of increasing the sponge iron production capacity from 500 TPD to 1.5 Million Ton/Annum with Captive Power Plant of 311.5 MW in phased manner.
The Company is taking all necessary measures in terms of mitigating the impact of the challenges being faced in the business. The company is also working on structural cost reduction by strengthening the reduction of fixed costs, among others and closely monitoring the supply chain to ensure that the manufacturing facilities operate smoothly.
Others:
For Risk and Concern, Inter Control System and their Adequacy, Financial Performance with respect to operation performance, Material Development in Human Resources/lndustrial Relations front, including number of people employed please refer to Board Report.
CAUTIONARY STATEMENT
The above Management Discussion and Analysts describing the Companys objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include external economic conditions affecting demand/supply influencing price conditions in the market in which the Company operates, changes in Government regulations, tax laws, and other incidental factors.
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