Panchmahal Steel Ltd Management Discussions

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 included elsewhere in the Annual Report and Annual Accounts 2025-26.

The Company is primarily engaged in the manufacturing of stainless steel long products and has grown from a modest manufacturing unit into one of Indias leading producers of specialty stainless-steel long products- built on a legacy of innovation, reliability and uncompromising quality. The Company has a single-site setup—from steel melting, hot rolling and cold finishing, and is serving a comprehensive range of Stainless-Steel grades, in wire rods, bars & wires to critical sectors.

These materials are engineered to deliver superior corrosion resistance, high tensile strength and durability, excellent machinability, heat resistance, cleanability & hygiene and aesthetic appeal, making it suitable for a wide range of applications in engineering, construction, infrastructure, automotive and railways, oil and gas, defense, energy, consumer durables, food processing and dairy industry, housing and pharmaceuticals etc..

FY 2025-26 was characterized by a challenging macroeconomic environment marked by subdued demand growth, geopolitical volatility, evolving market dynamics and persistent global uncertainties. Against this backdrop, your Company achieved a total income of Rs.387.22 crores during FY 2025-26 as compared to Rs.385.81 crores in the previous year. The Company posted a Loss of Rs.2.26 crores during the year. The loss is primarily attributable to Tax credit reversal of Rs. 2.79 crore.

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 and remained focused on strengthening its core business, enhancing operational performance by adding value-added products, disciplined cost management, and serving the evolving requirements of customers across its key end-use industries.

Risk is inherent in every business. The steel industry is deeply connected to the global economy. The business environment remains volatile as changing tariff rates and shifting announcements caused frontloading of trade in different phases. The geopolitical risks around trade policy uncertainty, and ongoing conflicts continued to weigh on global economic sentiment. Changes in the 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.

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.

While the near-term outlook remains cautious, global steel demand is expected to stabilize and gradually improve, underpinned by structural demand growth in emerging economies and a tentative recovery in key developed markets, subject to an early resolution of the US-Iran conflict.

Amid geopolitical uncertainties, evolving trade dynamics, and shifting global supply chains, Indias growth story continued to demonstrate remarkable resilience and momentum. As the nation moves towards the vision of Viksit Bharat 2047, manufacturing will play a defining role in shaping this transformation.

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.

Despite challenging times, the Company is fully geared for stronger growth by producing high value niche products and concentrating more on actual user customers. India is also growing as a quality conscious market, which gives the Company an edge over competition.

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

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.

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.