Oil Country Tubular Ltd Management Discussions

a) Industry Structure and Developments, Opportunities and Threats, Performance, Outlook, Risks and Concerns:

All the Indian OCTG pipe manufacturers are benefited and protected by the government of India by instructing PSUs procurement through the domestic route, following the Make In India (MII) policy, implemented through DPIIT

Your company needs to compete with the industry peers for the OCTG pipe product portfolio, for Kellys and Heavy Weight Drill pipes, OCTL is the sole manufacturer.

The company competed in the tenders of ONGC, OIL, and other customers and was successful in bidding and secured orders worth Rs. 155.51 cr. during FY 25-26.

Company is undertaking strategic steps towards re-establishing its Engineering Division, with a focused emphasis on capturing opportunities within the aerospace and defense sectors. During the period, the Engineering Divisions plant and machinery commenced operations, with additional machines inducted into the existing facility and technical personnel recruited to strengthen operational capability. The Division also successfully completed its AS-9100D audit.

In the defense segment, the Company is exploring an opportunity with the Defence Research and Development Organisation (DRDO) to be engaged as a Development-cum-Production Partner (DCPP) for manufacturing of rocket motor casings. The Company has further participated in tenders floated by Defence Public Sector Undertakings (DPSUs), and with the requisite team now in place, has secured select orders which are currently under execution.

Within the aerospace sector, the Company continues to strengthen its team through the recruitment of senior industry talent and is engaged in ongoing discussions with various aerospace companies for vendor registration. With AS-9100D certification underway and a strengthened senior leadership team in place, the Company is taking deliberate strategic measures to position itself as a preferred vendor to Tier-2 and Tier-1 aerospace players.

Amid global geopolitical shocks and volatile energy prices, accelerating domestic output is the cornerstone of Indias long term energy security. In accordance, the Government of India has set a target to increase domestic crude oil production to 35 million metric tons (MMT) by 2030, up from the current 29 MMT, as part of an aggressive strategic thrust to counter global price volatility and reduce import dependence. (Source: sambadenglish.com) Driven by rising industrialisation and a rapidly growing economy, India currently imports approximately 87% of its crude oil and 47% of its natural gas. To bridge this gap, the government has launched substantial structural, regulatory, and financial reforms to transform the domestic upstream exploration and production (E&P) ecosystem.

Government of India vision of domestic enhancement of oil and gas production will be possible through scaling up the exploration activities exponentially by both public and private companies leading to higher demand for the OCTG production in the coming years. The company is participating in global tenders for exporting drilling products.

PROSPECTS:

The company is participating in new tenders floated by ONGC and OIL and global tenders for the FY 2026-27. The company expects finalization of the tenders during August-SeptembertoopenduringJune-July 26and . These tenders are relevant to our product portfolio – Drill Pipes, Heavy Weight Drill Pipes, Drill Collars, and other related products.

The Government of Indias ‘Make in India Policy permits Domestic Manufacturers only to participate in the Tenders for premium connections. There are certain specialised premium connections for which the Company holds the licenses, and an integrated facility makes OCTL cost-competitive in securing the orders.

In addition to this, the Government of India, Ministry of Steel, had amended the Steel Policy with a condition of minimum 50%

Value Addition criteria, replacing the "Melt & Pour" condition.

The company focuses on sectors of Defense, Aerospace, Turbo Machinery, and Critical Engineering Machining Components. This shall diversify the revenue mix from a single industry-focused sector to multi-industrial sectors to bring steady growth and stability in the companys revenues in the future.

Your company operates in core sectors and has big opportunities for growth in next coming years.

The ongoing conflict in West Asia has created a visible impact across the Indian industry, cascading the delay of order inflows with escalation in input cost, fuel cost, and logistics.

Internal Control Systems and Their Adequacy:

Management has put in place effective Internal Control Systems to provide reasonable assurance for:

• Safeguarding Assets and their usage.

• Maintenance of Proper Accounting Records and

• Adequacy and Reliability of the information used for carrying on Business Operations.

Key elements of the Internal Control Systems are as follows:

(i) Existence of Authority Manuals and periodical updating of the same for all Functions.

(ii) Existence of clearly defined organizational structure and authority.

(iii) Existence of corporate policies for Financial Reporting and Accounting.

(iv) Existence of Management information system updated from time to time as may berequired. (v) Existence of Annual Budgets and Long Term Business Plans.

(vi) Existence of Internal Audit System.

(vii) Periodical review of opportunities and risk factors depending on the Global / Domestic Scenario, and to undertake measures as may be necessary.

(viiii) The Company has appointed an Independent Auditor to ensure compliance and effectiveness of the Internal Control

Systems in place.

The Audit Committee is regularly reviews the Internal Audit Reports for the auditing carried out in all the key areas of the operations. Additionally, the Audit Committee approvesalltheauditplansandreportsforsignificantissues raised by the

Internal and External Auditors. Regular reports on the business development, future plans, and projections are given to the Board of Directors. Internal Audit Reports are regularly circulated for perusal of Senior Management for appropriate action as required.

Normal foreseeable risks of the Companys assets are adequately covered by comprehensive insurance. Risk assessments, inspections, and safety audits are carried out periodically.

b) Financial and Operational Performance:

The Highlights of Financial Operational Performance are given below:

(Rs.In Lakhs)

S. No. Particulars	2025-26	2024-25
1 Sales/income from operations	7,009.41	12290.31
2 Other Income	171.71	286.45
3 Sub-total	7,181.12	12576.76
4 Total Expenditure (Before interest)	13,509.14	14,935.43
5 Profit/(Loss) Before Interest, Tax and Exceptional Items	-6,328.02	-2,358.67
6 Operating Margin %	-	-
7 Profit/(Loss)After Tax and Exceptional Items	(6,435.54)	(2910.07)
8 Return on Average Capital Employed %	(0.21)	(0.07)
9 Current Ratio (Current Assets / Current Liabilities)	3.67	2.08

c) Material Developments in Human Resources Development and Industrial Relations:

The Company has constituted an Internal Complaint Committee (ICC) in pursuant to the provisions of Companies Act, 2013 for prevention, prohibition and redressal of complaints / grievances on the sexual harassment of women at work places, Industrial Relations.

The number of female, male, and transgender employees, respectively, as on the close of the financial year 2025-26 are:

Male Employees :	182
Female Employees :	5
Transgender Employees :	NIL

 

d) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including: :

The following key financial ratio(s) have undergone a variation of 25% or more as compared to the immediately preceding financial year due to the increase in the loss incurred during the year has resulted in the variation.

 

Ratios	31-03-2026	31-03-2025	% Variance
Current Ratio *	3.67	2.08	43.32%
Debt-Equity Ratio *	0.13	0.19	(46.15%)
Debt Service Coverage Ratio *	0.73	5.74	(686.30%)
Return on Equity Ratio *	-0.31	-0.14	54.84%
Inventory turnover ratio *	0.54	0.86	(59.26%)
Trade Receivables turnover*	4.43	12.77	(188.26%)
Trade payables turnover ratio*	18.25	9.14	49.92%
Net Capital turnover ratio*	1.59	3.77	(137.11%)
Net profit ratio*	-0.92	-0.24	73.91%
Return on Capital employed *	-0.21	-0.07	66.67%

 

e) Details of any change in Return on Net Worth as compared : to the immediately previous financial year along with a detailed explanation thereof

The increase in the loss incurred during the year has resulted in a decrease in the return on net worth.

 

Ratios	31-03-2026	31-03-2025	% Variance
Return on Networth	-0.31	-0.14	54.84%

f) Cautionary Statement:

Statements in the Management Discussion and Analysis and Directors Report describing the Companys strengths, strategies, projections and estimates, are forward-looking statements and progressive within the meaning of applicable laws and regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward looking statements.

	For and on behalf of the Board of Directors
	K. Suryanarayana	Tatineni Yoganand
Place: Hyderabad	Chairman & Managing Director	Director
Date : 18 June 2026	DIN: 00078950	DIN: 07593253