Prakash Steelage Ltd Management Discussions

The Management of Prakash Steelage Limited, presents its analysis report covering performance and outlook of the Company. The core business of the Company is manufacturing and exporting stainless steel tubes and pipes. It has its Registered Office located in Mumbai, Maharashtra and plant located at Silvassa (UT - Dadra & Nagar Haveli). The Management accepts responsibility for integrity and objectivity of the Financial Statements of the Company.

THE GLOBAL ECONOMYOVERVIEW

The World Economic Outlook (WEO) is a survey of prospects and policies by the IMF staff, usually published twice a year, with updates in between. It presents analyses and projections of the world economy in the near and medium term, which are integral elements of the IMFs surveillance of economic developments and policies in its member countries and of the global economic system. They consider issues affecting advanced, emerging and developing economies, and address topics of pressing current interest.

Global growth is projected at 3.0 percent for 2026 and 3.4 percent for 2027, broadly unchanged cumulatively from the April 2026 World Economic Outlook. The outlook is uneven: The war shock is weighing on energy importers and vulnerable economies, whileAI-driven demand is lifting countries integrated into the global technology value chain.

(Source: https://www.imf.org/en/publications/weo, June 2026).

THE INDIAN ECONOMYOVERVIEW:

Indias economic momentum remains strong, underpinned by resilient domestic demand and sustained macroeconomic stability. In FY2025-26, Real GDP (GDP at Constant Prices) is estimated to reach Rs. 3,22,58,000 crore, rising from Rs. 2,99,89,000 crore in FY2024-25, reflecting a robust growth of 7.6%.At current prices, Nominal GDP is projected to reach Rs. 3,45,47,000 crore (US$ 3.91 trillion) in FY 2025-26, from Rs. 3,18,07,000 crore (US$ 3.60 trillion) in the previous year, registering a growth of 8.6%. On the production side, Real Gross ValueAdded (GVA) is estimated atRs. 2,94,40,000 crore, up from Rs. 2,73,36,000 crore in FY 2024-25, indicating a growth of 7.7%, while Nominal GVA is expected to expand to Rs. 3,13,61,000 crore (US$ 3.55 trillion) from Rs. 2,88,54,000 crore (US$ 3.26 trillion), marking a growth of 8.7%. In Q3 FY26, Real GDP is estimated at Rs. 84,54,000 crores against Rs. 78,41,000 crores in Q3 FY25, while Nominal GDP rose to Rs. 90,91,000 crores from Rs. 83,46,000 crores, showing continued quarterly momentum. Collectively, these trends highlight Indias position as one of the fastest-growing major economies, supported by broad- based expansion across sectors.

(Source: - www.ibef.org/economy/indian-economy-overview)

INDUSTRIAL STEEL INDUSTRY OVERVIEW:

1. Introduction Global Scenario

• In 2024, the world crude steel production was 1,886.7 million tonnes (MT) and 1,848.9 (MT) in 2025 as per data released by World SteelAssociation.

• World Steel Association in its Short-Range Outlook, released in April 2026, forecasted that steel demand shall grow by 0.3% in 2026 to reach 1,724 MT while in 2027, it is expected to register a growth of 2.2% and reach 1,762 MT.

• India is the second largest producer of crude steel. China was worlds largest crude steel producer in 2025(960.8 MT) followed by India (164.9 MT), the USA(81.9 MT) and Japan (80.7 MT). (Source: World SteelAssociation and the data is provisional)

• Per capita finished steel consumption in 2025 was 209 kg for world and 562.1 kg for China as per data released by World SteelAssociation (source: WSIF-2026). The same for India is 115.7 kg in 2025-26 (Source: JPC).

Domestic Scenario

• Steel is a de-regulated sector. The Governments role is that of a facilitator which lays down the policy guidelines and establishes the institutional mechanism/structure for creating conducive environment for improving efficiency and performance of the steel sector.

• In this role, the Government has released the National Steel Policy 2017, which has laid down the broad roadmap for encouraging long term growth for the Indian steel industry, both on demand and supply sides, by 2030-31.

• Government of India is implementing a Production-linked Incentive (PLI) Scheme for Specialty Steel. It is expected that the specialty steel production will reach 42 MT by the end of 2026-27.

• Indias crude steel capacity was 220.4 mt in 2025-26.

2. Performance of Steel sector

• Production of pig iron, sponge iron and total finished steel (alloy/stainless + non-alloy) are given in table belowfor last five years and current year:

Table 1: Indian Steel Industry : Production (in Million Tonnes)

Category	2021-22	2022-23	2023-24	2024-25	2025-26	2026-27* (Apr-Jul)
Pig Iron	6.26	5.86	7.36	8.33	8.44	2.99
Sponge Iron	39.20	43.62	51.56	55.76	60.49	15.22**
Total Finished Steel	113.60	123.20	139.15	146.69	162.47	54.28

Source : Joint Plant committee : *Provisional; **upto June 2026

• Performance of Steel sector during 2025-26 has been the best ever of any fiscal year. Cumulative production and consumption of steel during the last five financial years and the current year are given in the following table and graph below:

Table 2 : Production and consumption in Million Tonnes

Category	2021-22	2022-23	2023-24	2024-25	2025-26	2026-27* (Apr-Jul)
Crude Production	120.29	127.20	144.30	152.18	170.15	56.33
Finished Steel	113.60	123.20	138.83	146.69	162.47	54.28
Production
Consumption	105.75	119.89	136.25	152.13	164.36	55.95

Source : Joint Plant committee : *Provisional

• The month-wise production and consumption indicates month-on-month fluctuations. Broadly speaking it has shown an increasing trend after 2020-21, during which production and consumption was adversely affected by Covid-19 pandemic. The production of crude Steel, finished steel and consumption since April, 2022 may be seen from Graph Below:

• The global production of crude steel declined by 0.7% year-on-year to 931.5 Mt in January-June 2026 (provisional) against 937.9 Mt in corresponding period (January-June 2025). Among the top 10 countries, only India, USA, South Korea, Turkey, Germany and Vietnam reported growth in output. The remaining countries ~ China, Japan, Russia and Brazil reported fall in crude steel production in this year.

• India reported a 7.1% growth in production while the USA reported a 6.3% increase in output. China, the worlds largest producer, registered a 3.0 % fall in output while Vietnam reported a significant 26.9% growth in production during the period. Country wise share of crude steel production in January-June 2026 maybe seen from the following graph:

3. International Trade of Steel

• India was a net exporter of total finished steel from 2020-21 to 2022-23, but the country became net importer of finished steel in 2023-24 and 2024-25. In 2025-26, India is a net exporter of finished steel, according to provisional data from JPC. In 2026-27, India again became net importer of finished steel according to provisional data from JPC. The table below contains the details:

Table 3 : Exports and Imports (Th. Tonnes)

Category	2021-22	2022-23	2023-24	2024-25	2025-26	2026-27* (Apr-Jul)
Export	13494	6716	7487	4858	6601	2292
Imports	4669	6021	8320	9551	6524	2766
Net Exports/ Imports	8824	695	833	4693	77	474

Source : Joint Plant Committee; *Provisional

• Month-wise data from January 2025 to July 2026 indicate that India functioned as an importer during January-May, July-September, and December 2025, as well as February, April-July 2026, while it remained a net exporter in June, October, and November2025, and in January, March 2026.

Table 4 : Month-wise* Imports & Exports of Finished Steel in Th. Tonnes

Item	Jan 25	Feb 25	Mar 25	Apr 25	May 25	Jun 25	Jul 25	Aug 25	Sep 25	Oct 25	Nov 25	Dec 25	Jan 26	Feb 26	Mar 26	Apr 26*	May 26*	Jun 26*	Jul 26*
Import	944	606	575	519	424	440	641	667	651	459	426	701	510	563	521	679	689	696	702
Export	394	409	453	375	390	446	485	528	584	639	733	615	681	537	585	469	508	616	699
Net Exports/ Imports	550	197	122	144	34	6	156	139	67	180	307	86	171	26	64	210	181	80	3

Source : JPC, *data is provisional

4. Steel Prices

• Price regulation of iron & steel was abolished on 16.1.1992. Since then, domestic steel prices are determined by the interplay of market forces.

• Domestic steel prices are influenced by trends in raw material prices, demand - supply conditions in the market, international price trends among others.

• As a facilitator, the Government monitors the steel market conditions and adopts fiscal and other policy measures based on its assessment.

• The fluctuations in retail prices of steel (TMT, HRCand CRC)may be seen from the following graph: •

• Iron ore prices exhibited significant volatility during the last three years. Prices, however, have generally moved upwards since December 2022. During 2025 and 2026, prices remained volatile, declining from the peak levels of early 2025 and falling to around Rs. 4,600 per tonne, before recovering during 2026. By July 2026, prices had risen to Rs. 5,450 per tonne for lumps and Rs. 4,700 per tonne for fines, as may be seen from the graph below:

5. Important Policies and initiatives of Governments of India

• Steel is a de-regulated sector, Government acts as a facilitator, by creating conclusive policy environment for development of the steel sector. The Government of India has notified National Steel Policy, 2017 which envisages development of a technologically advanced and globally competitive steel industry that provides environment for attaining self-sufficiency in steel production by providing policy support and guidance to steel producers. National Steel Policy covers all aspects of the steel sector such as steel demand, steel capacity, raw material security, infrastructure and logistics, Research & Development (R&D) and energy efficiency. Overall projections of domestic crude steel capacity, production and per capita finished steel consumption value envisaged in the National Steel Policy (NSP) 2017 are shown below:-

S. No.	Parameter	Projection (2030-31)
1	Total Crude Steel Capacity	300 mt
2	Total Crude Steel demand/Production	255 mt
3	Per Capita Finished Steel Consumption in kgs	158 kg

Sources: National Steel Policy (NSP) 2017 mt: Million Tonnes

• Production Linked Incentive (PLI) Scheme for Specialty Steel was launched by the Union Cabinet on 29.07.2021, with financial outlay of Rs. 6,322 crore to promote the manufacturing of Specialty Steel within the country by attracting capital investment, generate employment and promote technology up-gradation in the steel sector.

The third round of the Production-Linked Incentive (PLI) Scheme for Specialty Steel (PLI 1.2) was launched on 4 November 2025 to attract fresh investments in advanced and emerging categories such as super alloys, CRGO steel, stainless steel (long and flat products), titanium alloys, etc. Atotal of 118 applications were received from companies. Under PL11.2, there are 81 active MOUs with 56 companies. This round is expected to attract a committed investment of ?11887 crore and a committed capacity of 8.29 million tonnes.

So far, the Ministry has disbursed ?236 crore as incentives under the PLI Scheme for Specialty Steel.

• Steel Quality Control Order (QCO): Ministry of Steel has introduced Steel Quality Control Order (QCO) thereby banning sub-standard/ defective steel products both from domestic & imports to ensure the availability of quality steel to the industry, users and public at large. As per the Order, it is ensured that only quality steel conforming to the relevant BIS standards are made available to the end users. As on date 151 Indian Standards stands notified under the Quality Control Order covering carbon steel, alloy steel and stainless steel have been notified under the QCO.

Suspension of 55 standards from Quality Control Order (QCO) Order date 20/11/2025: Ministry of Steel, after consultations with the Bureau of Indian Standards (BIS) and has issued the Steel and Steel Products (Quality Control) Amendment Order, 2025, thereby adopting a calibrated approach and suspending QCO enforcement for 55 standards (42 standards for three years and 13 standards relating to specialty steel under PLI 1.2 for one year). The remaining standards have been retained on grounds of unfair trade practices, national security, adequate domestic capacity, and the need to protect small steel producers.

• Research & Development (R&D): The Ministry of Steel is operating an R&D Scheme viz. “Promotion of Research & Development in Iron & Steel Sector”. Through this scheme, Ministry is providing financial assistance for Research & Development (R&D) by supporting collaborative projects with academic institutions, research laboratories, and steel companies to address technological challenges in the iron and steel sector. In accordance with DoE guidelines, a third-party evaluation of the scheme has been completed, and the scheme has been revised and continued furtherfor the next 5 years till 31 March 2031.

1. An annual budget of ?5-10 crore has been earmarked under the R&D Scheme to promote innovation in the steel sector.

2. The thrust areas for providing financial assistance under the R&D Scheme, are development of new alternate processes & technologies to address the burning issues faced by the Iron & Steel Sector such as climate change (low emission steel production, H2 based iron & steel production, CCUS etc.), waste utilization, energy & resource efficiency etc.

3. Till date, total of 75 projects have been approved underthe scheme. Of these, 35 R&D projects have been completed out of which six have been successfully adopted by the industry, 23 have achieved success at the laboratory scale, while six did not yield the desired outcomes. At present, 23 projects are ongoing, and another 17 are nearing completion.

4. During the current F.Y. 2025-26, an expenditure of Rs. 7.00 Crore incurred. BE for FY 2026-27 is Rs. 6 crore, first transaction of Rs. 1.37 Crore released on 22.04.2026.

5. Six new proposals were received and evaluated during the EG (Evaluation Group) meeting held on 25.03.2026.

• Steel Import Monitoring System (SIMS): SIMS, introduced in 2019, provides detailed data related to imports of steel in India. Based on industry feedback, the Ministry has revamped the portal to develop a more effective SIMS. It is a significant step forward in monitoring steel imports and promoting the growth of the domestic steel industry. Availability of such detailed data not only provides input for policy making but also signals areas for production and growth to the domestic steel industry.

In an effort to simplify the process of compulsory registration under the SIMS for imports of small consignments pertaining to iron and steel items by MSMEs and other small importers; and imports made under Advance Authorization, SEZ and EOU route for export purposes, a new facility of SARAL SIMS has been introduced with effect from 21.11.25.

Further, the registration process underthe regular SIMS has also been significantly simplified by substantially reducing the number of fields to be filled by importers for facilitating the Ease of Doing Business.

(Source:-https://steel.gov.in/en/overview-steel-sector)

OPPROTUNITESAND THREATS

OPPORTUNITIES

• Stainless steel is a versatile material resistant to corrosion and high temperatures. This makes it ideal for various applications, including in the oil and gas, chemicals and food processing industries. The demand for stainless steel pipes and tubes is expected to grow in the coming years, which is positive sign for Prakash Steelage.

• Governments around the world are investing heavily in infrastructure developments projects. This creates a demand for pipes and tubes for water treatment plants, power plants and other infrastructure projects.

• Removal of export duty on steel is seen as a positive. Steel companies can sell their products overseas at competitive price without the export duty, potentially boostings their profits.

THREATS

• Prakash Steelage supplies a variety of industries, which can mitigate risk somewhat, but a downturn in any one sector, like poweroroil and gas, could still hurt sale.

• The Company needs a lot of cash to cover its day-today operations, limiting its financial flexibility.

INTERNAL CONTROLSYSTEMSAND THEIRADEQUACY

The Company has in place adequate Internal Financial Controls with reference to financial statements and such internal financial controls are operating effectively. Your company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial statements.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

On the operational front, the Company on standalone basis has recorded net revenue of Rs. 9,111.13 Lakhs compared to Rs. 7801.92 Lakh of previous year. The Company has earned a profit before tax and exceptional item Rs. 114.10 Lakhs as compared to previous years Profit before tax and exceptional item of Rs. 196.64 Lakhs. The Company has gained net profit after tax Rs. 83.87 Lakhs as compared to previous years net profit after tax of Rs. 129.97 Lakhs. The Earning per Share (EPS) stood at Re. 0.05.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

As on 31st March 2026, the number of permanent employees in the Company is 76 at various levels. Talent management has always been the crucial factor for the Company, as your Company believes that its continued success will depend on its ability to attract and retain key personnel with relevant skills and experience. The attrition rate among the Top Management of the Company has been negligible in last many years. The Company has robust process of human resource development. The Company has a HR Policy in place and encouraging working environment. The Company has continued to focus on various aspects like employee training, welfare and safety thereby maintaining a constructive relationship with employees. The Management had taken all required efforts for implementation of terms and conditions laid down by Ministry of Home Affairs of Central Government of India for prevention of outbreak at work places through detailed Standard Operating Procedure and Human Resource Department had taken effort in its implementation at all the sites.

CAUTIONARY STATEMENT

Certain statements in the MDAsection concerning future prospects may be forward-looking statements which involve a number of underlying identified/non identified risks and uncertainties that could cause actual results to differ materially. In addition to the foregoing changes in the macro environment, Russias war in Ukraine could escalate, and tighter global financing conditions could worsen debt distress. The results of these assumptions made, relying on available internal and external information, are the basis for determining certain facts and figures stated in the report. Since the factors underlying these assumptions are subject to change over time, the estimates on which they are based, are also subject to change accordingly. These forward looking statements represent only the Companys current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise.

DETAILS OF SIGNIFICANT CHANGES (i.e. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIALYEAR) IN KEY FINANCIAL RATIOS.

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

Ratios	Financial year ended 31-03-2026	Financial Year ended 31-03-2025	Changes (%)	Reason for change
Debtors Turnover Ratio	6.25	6.48	-3.43%	Decreased due to an increase in average trade receivables during the year.Although revenue from operations increased during the year.
Inventory Turnover Ratio	4.53	3.45	31.17%	Increased due to Higher in production in FY 2025-26 which resulted into increase in the overall Cost of Goods Sold and higher sales for the year.
Interest Coverage Ratio	18.50	21.17	-12.60%	Decreased due to lower Earnings Before Interest and Tax as compared to previous year
Operating Profit Margin (%)	16.09	17.83	-9.76%	Decrease due to lower operating profit as compared to previous year.
Return on Net Worth	8.62	14.55	-40.76%	The return on networth for financial year 2025-26 reduced by 40.76% due to decrease in net profit after tax as compared to financial year 2024-25
Ratio	1.07	1.10	-3.39%	Decrease to a significant increase in trade payables and other current liabilities during the year.
Debt Equity Ratio	0.03	0.44	-92.20%	Primarily due to a fall in borrowings from INR 3.90 crores to INR 33.28 Lacs, while shareholders equity saw a modest increase of 9% as compared to previous year

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIALYEAR

The Return on Net Worth for Financial Year 2025-26 was 8.62% as against 14.55% for Previous Year. The return on networth has reduced by 40.76% due to decrease in net profit as compared to Financial Year 2024-25.

	For and on Behalf of the Board of Directors
	Prakash Steelage Limited
	Sd/-
	Prakash C. Kanugo
Date: 13thAugust,2026	Chairman & Managing Director
Place: Mumbai	DIN:00286366