Nupur Recyclers Ltd Management Discussions

Global Economy Outlook

Global economic activity in 2025 continues to remain moderate, with signs of recovery unevenly distributed across regions. The lingering effects of monetary tightening, persistent inflationary pressures, and geopolitical uncertainties remain key headwinds for global growth. After registering a subdued growth of around 2.5% in 2024, the global economy is projected to expand only modestly in 2025, reflecting continued fragility in demand and investment.

The United States is showing resilience supported by a strong labor market and gradual easing of inflation, though higher interest rates continue to weigh on consumption and private investment. The euro area faces slower recovery amid weak industrial output and energy price volatility. Chinas growth remains under pressure due to structural challenges, including real estate sector stress and subdued external demand, though policy support measures are being gradually introduced.

For Emerging Markets and Developing Economies (EMDEs), tighter financial conditions, capital outflows, and currency depreciation pose ongoing risks. Inflation has moderated compared to earlier years but remains above pre-pandemic averages, particularly in food and energy segments. This continues to impact household consumption and adds pressure on fiscal balances.

Commodity prices, though relatively more stable in 2025, remain sensitive to supply-side disruptions and geopolitical developments. Crude oil prices have moderated within a narrower range, while natural gas and food prices remain elevated in several regions, keeping energy security and inflationary risks at the forefront of policy concerns.

Overall, while disinflation and cautious optimism are visible in advanced economies, the outlook remains fragile, with risks tilted to the downside due to financial market volatility, ongoing geopolitical conflicts, and climate-related disruptions.

Indian Economy

High Real Growth, Sustained Resilience amidst Global Uncertainty

India continues to remain one of the worlds fastest-growing major economies in 2025, with a projected real GDP growth of 6.3-6.5% for FY25. The performance is underpinned by robust domestic demand, infrastructure-led investments, and a stable macroeconomic framework. While growth is marginally lower than the previous years pace, it reflects the balancing act between global headwinds and strong internal momentum, keeping India on a resilient growth trajectory.

Domestic Consumption as a Key Growth Driver

Domestic consumption remains the cornerstone of Indias economic strength. With foreign trade accounting for a relatively smaller share of GDP, India has been partially insulated from the slowdown

in global demand. A large consumer base, increasing digital penetration, and diversified export markets continue to support sustained growth in consumption and investment.

Favourable Import and Energy Positioning

Indias energy security has improved with the continued import of discounted crude oil, alongside the softening of certain global commodity prices in 2025. This has helped moderate the import bill and inflationary pressures. At the same time, a strong services export base and resilient remittances have contributed to managing the current account position.

Strength of the Indian Banking System

Indian banks remain well-capitalized and resilient, with strong asset quality and liquidity buffers. Supported by prudent regulatory oversight and balance sheet strengthening over the past decade, the financial system is well-positioned to support credit growth. The easing of interest rates by the Reserve Bank of India in mid-2025 has further improved liquidity conditions, enabling broader credit availability across sectors.

Inflation and Growth Outlook

Headline inflation has moderated significantly in 2025, providing relief to households and businesses alike. The Reserve Bank of India has projected real GDP growth of 6.4% for FY25-26, supported by stable rural demand, government-led capital expenditure, and benign commodity prices. Nonetheless, risks remain from volatile monsoon patterns, global geopolitical tensions, and financial market uncertainties, which may impact inflation and external sector stability.

Industry Structure and developments

Metals Industry

In 2025, the global metals industry is experiencing a gradual recovery from the downturn of the previous two years. While demand from China remains subdued due to structural challenges in its real estate and manufacturing sectors, other regions including India and Southeast Asia are supporting incremental demand growth. International prices of base metals have stabilized in 2025 compared to the sharp contractions of FY 2024, though they remain below the peaks of FY 2023.

In India, domestic demand for non-ferrous metals continues to be resilient, supported by government- led infrastructure investments, the ongoing execution of the National Infrastructure Pipeline (NIP), and renewed momentum in the housing and real estate sector. The governments push for energy transition, renewable energy capacity expansion, and electric mobility are also providing structural support for long-term metal consumption.

Zinc

The outlook for zinc consumption in India remains favorable. Infrastructure expansion and the automotive sectors recovery are expected to drive zinc demand growth of around 4-6% in FY25,

outpacing global averages. Additionally, the push for galvanized steel in construction and infrastructure projects is creating sustainable demand for zinc.

Steel

India continues to consolidate its position as the worlds second-largest producer and consumer of steel. Production is expected to expand by 4-5% in FY25, while consumption growth is projected at 8-10%, supported by urban infrastructure, industrial development, and rural housing schemes. Government initiatives in logistics, railways, and highways remain key drivers of steel demand.

Aluminium

Aluminium demand in India is projected to grow at 6-7% in FY25, fuelled by its increased use in renewable energy, packaging, transportation, and especially the electric vehicle (EV) ecosystem. With the governments thrust on sustainable energy and manufacturing, aluminium remains a critical material for Indias long-term growth.

Opportunities and Threats

Opportunities

India continues to make significant progress as one of the fastest-growing major economies, creating favorable opportunities for the non-ferrous metals industry. The sector plays a vital role in the nations GDP, employment generation, and in fulfilling the vision of Aatmanirbhar Bharat. Demand is supported by key consuming sectors including infrastructure, construction, automotive, and renewable energy.

The Government of India remains focused on strengthening ease of doing business, attracting foreign direct investment (FDI), and implementing policy schemes that encourage domestic manufacturing and recycling. Indias positioning as a global manufacturing hub, backed by a young workforce, digital adoption, and supportive political and economic conditions, further enhances long-term growth prospects.

The global shift towards renewable energy, electric mobility, and a circular economy is expected to accelerate demand for recycled non-ferrous metals. The Company, with available spare capacity and strengthened operational efficiency, is well-positioned to capitalize on this demand by scaling up production and sales. Improved product mix, enhanced cost efficiency, and investments in sustainability and workforce development are expected to contribute to sustained growth.

Threats

While opportunities remain strong, the Company is also exposed to several risks and challenges:

• Economic Downturns: A slowdown in global or domestic growth could impact demand from end-use sectors.

• Market Competition: Intensifying competition from established players and new entrants could exert pressure on pricing and margins.

• Supply Chain Disruptions: Reliance on imported raw materials exposes the Company to geopolitical risks, shipping delays, and rising logistics costs.

• Regulatory Changes: Any tightening of environmental, import/export, or waste management regulations may lead to higher compliance costs.

• Technological Disruption: Rapid advancements in recycling and processing technologies may require significant capital investment to maintain competitiveness.</p>

• Cybersecurity Risks: Increasing digitalization exposes operations to data breaches and system disruptions.

• Natural Disasters & Climate Risks: Extreme weather events can affect raw material availability, logistics, and production continuity.

• Global Events: Geopolitical conflicts, currency fluctuations, or financial market volatility could affect both input costs and demand conditions.

• Reputational Risks: Growing scrutiny on Environmental, Social and Governance (ESG) standards may impact investor and stakeholder confidence if sustainability commitments are not adequately met.

• Financial Risks: Fluctuations in interest rates, currency exchange rates, or credit availability could affect profitability and liquidity.

Segment-wise Performance

The company is primarily engaged in the business of trading of non-ferrous metal, which constitute a single reportable segment.

Outlook

India continues to strengthen its position as a preferred hub for global companies across diverse industries, driven by cost competitiveness, skilled human capital, and rapid digital adoption. The country is increasingly being recognized as an innovation partner by global corporations, owing to its unique value proposition of scale, technology, and adaptability. With strong domestic demand, a stable policy environment, and growing integration into global supply chains, India offers opportunities for innovative business models that mitigate global headwinds. These factors reinforce the resilience of the Indian market, positioning it well to deliver sustainable performance through FY 2025-26.

Risks and Concerns

The Company acknowledges that risk is an inherent component of business and remains committed to proactively identifying, assessing, and mitigating risks through structured mechanisms. Risk evaluation and management are embedded into operations and reviewed regularly by management and the Board.

Macroeconomic factors such as interest rate movements, inflation trends, global commodity price volatility, and employment conditions continue to be key external risks. Any prolonged slowdown in

economic activity, significant inflationary pressures, or weakness in consumer sentiment could adversely affect demand for metals and recycling activities.

The Company is also exposed to risks arising from global trade dynamics, currency fluctuations, supply chain disruptions, and evolving regulatory frameworks, particularly around environmental and sustainability standards. At the same time, these external challenges present opportunities to adapt, innovate, and enhance competitiveness.

Internal Control and Risk Management

The Company maintains a robust internal control environment to ensure operational efficiency, asset security, fraud prevention, accurate accounting, and compliance with laws and regulations. The Audit Committee regularly reviews the internal control systems, suggesting improvements in line with changing business dynamics.

Financial Performance & Analysis

Income

During the financial year 2024-25, the Company recorded revenue from operations of ?13,404.08 lakhs as compared to ?18,081.81 lakhs in FY 2023-24, reflecting a decline primarily on account of lower trading volumes. Other income stood at ?597.02 lakhs in FY 2024-25 against ?602.23 lakhs in the previous year. Consequently, the total income for the year was ^14,001.10 lakhs, compared to ?18,684.04 lakhs in FY 2023-24.

Profitability

The Company reported an EBITDA (including other income) of ?989.48 lakhs in FY 2024-25, as compared to ?1,008.22 lakhs in FY 2023-24. Profit before Tax (PBT) stood at ?977.69 lakhs in FY 2024-25 against ?1,444.84 lakhs in the previous year. Profit after Tax (PAT) was ?702.16 lakhs in FY 2024-25, compared to ?1,055.04 lakhs in FY 2023-24.

Balance Sheet

Net Worth:

The net worth of the Company for FY 2024-25 stands at ? 10,952.18 Lakhs, compared to ? 8,565.90 Lakhs in FY 2023-24, reflecting a strong improvement in shareholders value.

Cash & Cash Equivalents:

Cash & cash equivalents were ? 130.73 Lakhs in FY 2024-25, marginally higher than ? 129.60 Lakhs in FY 2023-24, indicating stable liquidity management.

Inventory:

Inventory declined to ? 312.39 Lakhs in FY 2024-25 from ? 931.93 Lakhs in FY 2023-24, reflecting improved inventory turnover and better working capital efficiency.

Trade Payables:

Trade payables stood at ? 0.13 Lakhs in FY 2024-25, compared to ? 40.30 Lakhs in FY 2023-24, showcasing significant reduction in outstanding obligations.

Trade Receivables:

Trade receivables surged to ? 3,496.39 Lakhs in FY 2024-25 from ? 988.21 Lakhs in FY 2023-24, primarily due to increased sales and extended credit terms in line with business growth.

Material developments in Human Resources / Industrial Relations

At Nupur Recyclers Limited (NRL), we recognize that human capital is a vital component of our success. As of March 31, 2025, the Company employed 17 permanent employees.

Throughout the fiscal year, NRL has actively invested in the development of its workforce by organizing numerous training programs. These initiatives are designed to nurture and enhance the skills and talents of our employees, aligning with our commitment to fostering a supportive and growth- oriented work environment.

Accounting Policies

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The financial statements have been prepared under the historical cost convention on an accrual basis. The management accepts responsibility for the integrity and objectivity of the financial statements, as well as for the various estimates and judgment used therein.

Disclosure of Accounting Treatment in Preparation of Financial Statement

The Company has followed all relevant Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI) while preparing Financial Statements.

Details of significant changes (i.e., Change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios Accounting Policies

Following are important ratios showing better performance in FY 2025:

Cautionary Statement

Statements in the Management discussion and analysis describing the Companys objectives, projections, estimates and expectations may be “forward looking statements” within the meaning of applicable 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 economic conditions affecting demand/supply and prices, conditions in the domestic and overseas markets in which the company operates/ going to operate, changes in government regulations, tax laws and other statutes and other incidental factors.