Oswal Minerals Ltd Management Discussions

a) Global & Indian Economic Review

The global economy remained resilient during FY 2025-26 despite persistent geopolitical tensions, evolving trade policies, and uneven recovery across key markets. Global growth is estimated at 3.3% in CY 2025, with a similar trajectory expected in CY 2026. This resilience has been supported by sustained investment in Artificial Intelligence (AI), digital infrastructure, advanced manufacturing, and technology-led capital expenditure, which helped offset the impact of tariff-related disruptions and broader macroeconomic uncertainties. Global inflation moderated meaningfully during the year, with headline inflation declining to 4.1% in 2025 from 5.8% in 2024. The easing inflation environment was driven by softer commodity and energy prices, improved supply chain stability, and the gradual normalisation of monetary conditions across major economies. This has enabled several Central Banks to move toward a more accommodative policy stance.

The metals and mining sector continued to play a critical role in global industrial activity, supported by infrastructure development, green energy transition, and expanding stainless steel consumption. The global ferro alloys market, valued at approximately USD 20.83 billion in 2025, continued to witness healthy demand, primarily led by the stainless steel industry, particularly across automotive, construction, and renewable energy applications. The Asia-Pacific region remained the largest demand centre, accounting for nearly 75% of global ferro alloys consumption, underscoring its strategic importance in the global metals value chain.

The global stainless steel industry recorded healthy growth during FY 2025-26, supported by recovery across key end-use sectors such as automotive, infrastructure, industrial manufacturing, consumer appliances, and clean energy systems.

Global stainless steel production increased to a record 66.8 million metric tonnes in CY 2025, reflecting strong demand recovery and sustained industrial consumption. Stainless steel continues to remain a strategically important material due to its corrosion resistance, durability, recyclability, and long life-cycle economics. China continued to remain the largest driver of global stainless steel demand and ferro alloys consumption during FY 2025-26. Government-led stimulus measures focused on infrastructure, manufacturing upgrades, urban redevelopment, transportation systems, and industrial modernisation are expected to support medium-term stainless steel demand across key sectors. In addition, investments in renewable energy infrastructure, industrial equipment, pipelines, railways, and consumer durable replacement programs are expected to sustain stainless steel consumption despite moderation in certain real estate- linked segments of the economy. Given Chinas dominant position in global stainless steel production, policy support for industrial activity and infrastructure development is expected to remain a key demand driver for the global ferro alloys industry.

India continued to reinforce its position as the fastest-growing major economy globally during FY 2025-26. Real GDP growth is estimated in the range of 7.4% to 7.6%, outperforming earlier expectations and reflecting the strength of the countrys domestic economic fundamentals. This growth was underpinned by a strong combination of private consumption, public capital expenditure, improving rural demand, and resilient services sector performance. Private Final Consumption Expenditure (PFCE) rose to 61.5% of GDP, marking its highest level since 2011-12, supported by improved agricultural output, better rural cash flows, and tax rationalisation measures that aided urban spending sentiment. India also demonstrated continued consolidation on the fiscal front. The Union Governments fiscal deficit was revised to 4.4% for FY 2025-26, with the glide path indicating 4.3% for the following year which reflects a continued commitment to fiscal discipline while sustaining growth-supportive capital expenditure. Inflation remained well contained during the year. Headline retail inflation averaged 1.7% during April-December 2025, significantly lower than the previous year, supported by stable food and fuel prices. This benign inflation environment improved real purchasing power, supported consumption, and strengthened the broader macroeconomic outlook.

Indias structural growth story also remained intact, supported by strong services exports, digitalisation, manufacturing-linked policy initiatives, and infrastructure-led investment. Looking ahead, Indias GDP growth is expected to remain robust at approximately 6.8% to 7.2% in FY 2026-27, despite global trade uncertainties and external demand fluctuations. This augurs well for the manufacturing sector, including ferro alloys which stands to gain both from overall economic growth as well as increasing per capita stainless steel consumption. India continued to remain one of the strongest growth markets for stainless steel globally during FY 2025-26. Domestic demand is estimated to have grown by approximately 9%, significantly above the global average, driven by a broadbased rise in demand across infrastructure, transportation, industrial manufacturing, and urban development. Despite this growth, Indias per capita stainless steel consumption remains materially lower than the global average, indicating substantial headroom for demand expansion over the long term.

The above data are complied from the below sources: https://www.imf.ora/en/Pubhcations/WEO/ h ttps:/ /www. giiresearch.com/report/ https://www.indiabudget.gov.in/economicsurvey/ https://pib.gov.in/

Reliance on Chinas Economic Health: The Chinese steel industry is the single largest consumer of iron ore globally. As a result, the market is highly sensitive to Chinas economic performance, particularly in the property and infrastructure sectors. Any slowdown, shift in government policy, or temporary disruption (such as construction halts for special events) can have an immediate and significant impact on iron ore prices.

Geopolitical and Supply Chain Risks: Iron ore production is highly concentrated in Australia and Brazil. This creates a "supply chain vulnerability" where disruptions from trade disputes, political instability, or even natural disasters in these countries can severely affect the global supply and cause price spikes. The markets reliance on these few producers makes it inherently less resilient.

Environmental Regulations and Decarbonization: The steel industry is a major source of global carbon emissions. As countries and companies commit to decarbonization, there is a growing push for "green steel" production. This shifts demand towards higher-grade iron ore and alternative production methods like hydrogen-based direct reduced iron (DRI), which can fundamentally change the market landscape and create a risk of "stranded assets" for producers of lower-grade ore.

Price Volatility and Speculation: Iron ore is a heavily traded commodity, and its prices are subject to speculation. This can lead to irrational price movements that are not always tied to fundamental supply and demand, making it difficult for producers and consumers to manage risk.

The manganese market, while sharing some of the same risks as iron ore, has its own unique set of concerns, particularly given the emerging importance of battery-grade manganese.

Supply Chain Vulnerabilities: A significant portion of the worlds manganese reserves are in a few countries, such as South Africa, Australia, and Gabon. Similar to iron ore, this geographic concentration makes the supply chain vulnerable to political instability, labor strikes, and logistical issues. Weather events, like cyclones, have also been shown to cause significant disruptions to key export operations.

Declining Ore Grades and Rising Costs: Many major manganese mines are facing a consistent decline in the quality of the ore they can extract. This means more energy and resources are required to process the ore to the desired standard, leading to higher operational costs and lower profit margins for producers.

The Balancing Act of Steel vs. Battery Demand: The vast majority of manganese is still used for steel production. However, demand for high-purity manganese for the growing electric vehicle (EV) battery market is a key growth driver. A major risk is that the supply of high-purity manganese cannot keep up with this demand, or that the market overcorrects and leads to oversupply, causing price fluctuations.

Environmental and Social Governance (ESG) Risks: The manganese mining industry faces increasing scrutiny over its environmental and social practices. Concerns about deforestation, water contamination, and labor practices can lead to stricter regulations, higher compliance costs, and opposition from local communities, all of which can disrupt production and increase costs.

Oversupply and Price Pressures: The market can experience periods of oversupply, often from the re-emergence of key producers after a disruption or from a slowdown in downstream demand (especially in Chinas steel sector). This can lead to bearish market sentiment and significant downward pressure on prices, impacting the profitability of mining operations.

e) Internal Control System and its adequacy

The Companys Corporate Governance Policy guides our conduct of affairs and the Management, including financial and accounting policies, systems and processes. This policy delineates the roles, responsibilities and authorities at each level of the Companys threetiered governance structure and the key functionaries involved in governance. The Corporate Governance Policy and the Code of Conduct stand widely communicated across the Company at all times. The Company uses ERP system as a business enabler and also to maintain the business books of account The SOPs, in tandem with transactional controls built into the ERP systems, ensure appropriate segregation of duties, tiered approval mechanisms and maintenance of supporting records. The Company has implemented proper and adequate system of internal controls commensurate with its size and nature of operations to provide reasonable assurance that all the assets are safeguarded, transactions are authorised, recorded and reported properly, applicable statutes and corporate policies are duly complied with.

The Company has followed the Indian Accounting Standards (Ind-AS) for drawing-up its accounts as prescribed by the Institute of Chartered Accountants of India, in the preparation of financial statements. There are no audit qualifications in the Companys financial statements for the year under review.

The Companys IT systems are very robust and are running seamlessly to lend support to people working from anywhere. The IT processes of the Company are accredited to ISO 9001:2015. The Company has an Audit Committee with majority of Independent Directors as members. The committee periodically reviews significant audit findings, adequacy of internal control and compliance with Accounting Standards, amongst others. The management duly considers and takes appropriate action on the recommendations made by the Statutory Auditors, Internal Auditors and the Independent Audit Committee of the Board of Directors. During the year, due care has been exercised by the Company with respect to all the requirements of the Company Law and Listing Regulations.

f) Material Developments in Human Resources / Industrial Relations, Including Number of People Employed

The Company strives to provide a conducive work environment that empowers people to excel. The human resource team implemented several programmes such as learning and development, employee engagement, performance management and talent retention. The Company aims at fostering an ecosystem that provides long-term professional development scope while catering to individual career building goals at all levels. The Management of the Company believes in encouraging teamwork and a self-motivating corporate atmosphere. The Company prioritises safety, health and overall wellbeing of all employees including the contract workforce. Awareness programs conducted regarding hygiene, social distancing, and masks among employees and stakeholders. The Company recruits judiciously through Industry contacts, job portals and consultants. The Company maintained harmonious relationship with all its workers and there were no strikes or lockouts during the year under review. There were 154 (One hundred Fifty-Four) permanent employees on the rolls of company as on 31st March, 2026. The Companys continued focus on improving diversity has shown positive result with increase in women employees in the workforce. Industrial relations during the year were harmonious. Employees have contributed significantly towards the growth of the organization.

g) Significant Changes in Key Financial Ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector-specific financial ratios. The Company has identified the following ratios as key financial ratios:

Ratios where there has been a significant change from fiscal 2025 to fiscal 2026:

Change in Inventory turnover ratio: Due to decrease in closing stock & sales.

Change in Net Profit Margin: Due to the loss during the year.

Change in Interest Coverage Ratio: Due to loss incurred during the year, ratio has been negative irrespective of decrease in finance cost.

Change in Current Ratio: The decrease in the Current Ratio is primarily due to a reduction in current assets during the year.

Change in Debt Equity Ratio: Increase is mainly due to the reduction in the Companys net worth.

Change in Operating Profit Margin (%): Due to loss during the year.

Change in Return on Net Worth as Compared to the Immediately Previous Financial Year along with a detailed Explanation

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Return on net worth computed on Profit before tax and profit after tax for the financial year 2025-26 is decreased in comparison to financial year 2024-25 due to net loss in the current year.

Statutory Compliance

The Company has in place with adequate systems and processes to ensure that it is in compliance with all applicable laws. The Managing Director makes periodic declarations regarding the compliance with provisions of various statutes after obtaining confirmation from respective department head. The Company Secretary, being the Compliance Officer, ensures compliance with the relevant provisions of the Companies Act and SEBI regulations.

h) Cautionary Statement

Certain statements in the Management Discussion and Analysis Report describing the Companys objective and predictions may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates new regulations and government policies that may impact the Companys business as well as its ability to implement the strategy. The Company doesnt undertake to update the statement.