Panchmahal Steel Ltd Management Discussions

Overview

The objective of this report is to convey the Managements perspective on the stainless-steel industry. This Report should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information i n cluded elsewhere in the Annual Report and Annual Accounts 2024-25.

Industry Structure, Developments

The Company is primarily engaged in the manufacture of stainless steel long products in the form of wire rods, bars and wires, which find application in a wide range of applications in engineering, construction and infrastructure, automotive and railways, consumer durables, food processing and dairy industry, housing and pharmaceuticals. The infrastructure development in India is steadily increasing the demand of stainless steel usage.

Performance

The Company achieved a total income of Rs.385.81 crores during FY 2024-25 as compared to Rs.431.86 crores in the previous year. The Company posted a Profit after Tax Rs.3.33 crores during the year as against Rs.2.97 crores in the previous year.

Opportunities, Threats, Risk & Concerns

The Company is an established and recognized producer of stainless steel long products with customers around the world. The Companys philosophy of focusing on value added products and expanding the customer base provides the necessary resilience to successfully overcome challenges through different parts of the business cycle. The Company is confident of high quality and sustainable growth and profitability.

I n creasing awareness on the benefits of stainless steel is leading to substantial increase of its usage in railways, public transport systems, automobiles, process industries, building & construction, FMCG etc.

Risk is inherent in every business. The steel industry is deeply connected to the global economy. Geopolitical risks around trade policy uncertainty, and ongoing conflicts continued to weigh on global economic sentiment. Changes in t h e demand and supply scenario can cause disruptions in the global markets. Volatility in the raw materials prices can also be cause for concern. However, with ever changing market dynamics, Panchmahal Steel Limited is equipped to provide customized products and services for global markets, for volume as well as for specialty niche market requirements.

Outlook for the year 2025-26

We are living in challenging and uncertain times. The global business environment is changing and every geo-political region is trying to protect its industries and economy by strengthening their safeguards and trade defense measures. However, Indias economic outlook remains strong, driven by robust domestic demand, policy support, and sectoral resilience. The long-term outlook for the Indian stainless-steel industry remains optimistic, with continued infrastructure development, industrial expansion, and supportive government policies driving its growth.

Changes in Key Financial Ratios

The change in the key financial ratios as compared to previous year is stated below:

Name of Ratio	F.Y. 2024-25	F.Y. 2023-24	Change %	Reason for variation if change is more than +/- 25% as compared to PY
Current Ratio (No. of times)	2.44	2.39	2%	NA
Debt-Equity Ratio (No. of times)	0.31	0.25	22%	NA
Debt Service Coverage Ratio ( No . of times)	3.66	2.52	45%	On account of better operating performance
Return on Equity	2.10%	1.91%	10%	NA
Inventory Turnover Ratio (No. of times)	3.11	3.12	0%	NA
Trade Receivable Turnover Ratio (No. of times)	8.81	10.00	-12%	NA
Trade Payable Turnover Ratio (No. of times)	16.88	9.74	73%	On account of better operating performance and payment to Trade payable.
Net Capital Turnover Ratio (No. of times)	3.60	4.43	-19%	NA
Net Profit Ratio	0.86%	0.69%	25.36%	On account of better operating performance.
Return on Capital Employed	4.08%	5.31%	23%	NA
Return on Investment	-	-	-	NA

Internal Control Systems

The Company has proper and adequate systems of internal control ensuring efficiency of operations, statutory compliances, reporting and recording of transactions. The system is supported by management and internal audit.

Human Resources

The Companys human resource policy lays stress on motivating and training people for better work culture and environment and continuous improvement in productivity, efficiency and quality.

	For and on behalf of the Board of Directors
	Sd/-
Place : Vadodara	Ashok Malhotra
Date : 11th August, 2025	Chairman & Managing Director
	DIN : 00120198