QVC Exports Ltd Management Discussions

BUSINESS OVERVIEW

Our Company is engaged in the business of dealing in ferro alloys, including but not limited to high carbon silico manganese, low carbon silico manganese, high carbon ferro manganese, Medium Carbon Ferro Manganese, Low Carbon Ferro Manganese, high carbon ferro chrome, Medium Carbon Ferro Chrome, Low Carbon Ferro Chrome and ferro silicon. We also engaged in the dealing in raw materials for manufacturing of steel.

A majority of our revenue from operations is earned from exporting our products to reputed steel manufacturers in various countries. We are also a supplier of ferro alloys for a lot of reputed Indian manufacturers and therefore in order to maintain such clientele, we are bound to ensure that the products procured by us are of utmost quality and are compliant with the quality requirements of our customers. We deploy independent inspection agencies such as Bureau Veritas, IRA, SGS etc. We also follow up with our customers to ensure that the products supplied to them is of utmost quality. If the event our products face quality issues, we ensure that corrective and preventive steps, wherein we investigate the root cause of the issue, update our customers about our analysis and change suppliers or quality inspection agencies, to ensure that such issues are not repeated.

Furthermore, our Company has devised an extensive supplier selection process in order to identify and evaluate the effectiveness and quality of the products manufactured by the suppliers, reduce purchase risk, maximize overall value to the purchaser, and develop closeness and long-term relationships between buyers and suppliers. Owing to our supplier selection process, we engage with quality manufacturers of our products, in order to stand by our commitments to our customers. We also visit the mines and manufacturing units of our suppliers to ensure that the products are manufactured by following the quality practices. Owing to our commitment to quality, our Company has received a certificate of registration dated April 8, 2023 from Bureau Veritas (India) Private Limited certifying that the management system of our Company has been found to be compliant with management system standards prescribed under ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018.

Our revenues from operations for the Fiscals 2024, 2025 and 2026 were K 44,598.65 lakhs, K 35,878.43 lakhs, and K 44,033.75 lakhs, respectively. Our EBITDA for the Fiscals 2024, 2025 and 2026 were K 567.93 lakhs and K 749.45 lakhs, and K 417.65 lakhs, respectively. Our profit after tax for the Fiscals 2024, 2025 and 2026 was K 392.76 lakhs and K 553.80 lakhs, and K 291.02 lakhs, respectively.

INDUSTRY OVERVIEW

Ferro alloys constitute an important input in the production of steel and stainless steel and are primarily used as alloying and deoxidising agents to impart specific properties such as strength, hardness, durability, corrosion resistance and heat resistance to steel. Accordingly, the demand for ferro alloys is closely linked with the performance and growth of the steel, stainless steel, foundry and engineering industries.

The Indian steel industry continued to demonstrate strong growth during FY 2025-26. Indias crude steel production increased by more than 10% year-on-year to approximately 168.4 million tonnes, supported by robust domestic demand and continued infrastructure and manufacturing activity. Finished steel consumption also recorded healthy growth during the year. These developments provide a supportive demand environment for ferro alloys.

The ferro alloys industry, however, remains sensitive to fluctuations in steel production, international commodity prices, availability and cost of raw materials, energy costs, freight rates, foreign exchange movements and changes in international trade policies. The industry is also influenced by developments in major consuming and producing countries.

OPPORTUNITIES AND OUTLOOK

The outlook for the ferro alloys sector remains closely associated with the growth prospects of the Indian steel and stainless steel industries. Continued infrastructure development, construction activity, manufacturing expansion and increasing steel consumption are expected to support demand for ferro alloys.

Indias steel sector continues to benefit from sustained domestic demand and government-led infrastructure development. The Government has also set a long-term objective of Doubling Indias steel production capacity

to 300 milion Tonnes by 2030, which is expected to create opportunities across the steel value chain, including ferro alloys.

The Companys diversified product portfolio covering manganese-, chromium- and silicon-based ferro alloys provides an opportunity to participate in demand across different segments of the steel industry. The Company intends to leverage its market relationships, procurement capabilities and understanding of market dynamics to pursue sustainable growth.

RISKS AND CONCERNS

The principal risks associated with the Companys business include volatility in ferro alloy prices, fluctuations in prices and availability of key raw materials, changes in steel demand, intense domestic and international competition, foreign exchange fluctuations, freight and logistics costs and changes in government policies and international trade regulations.

Since ferro alloys are closely linked to the steel industry, any slowdown in steel production or consumption may adversely affect demand and selling prices. Further, volatility in raw material and energy prices may affect margins.

The Company seeks to mitigate these risks through prudent procurement practices, inventory management, monitoring of market conditions, diversification of its product portfolio and maintaining strong relationships with suppliers and customers.

FINANCIAL PERFORMANCE

The financial performance of the Company for FY 2025-26 should be read together with the audited financial statements and the accompanying notes forming part of this Annual Report.

During the year, the Companys performance was influenced by prevailing market conditions in the ferro alloys industry, demand from the steel sector, product prices, procurement costs and operating expenses.

The Management continues to focus on improving operational efficiency, prudent working capital management, strengthening customer relationships and maintaining financial discipline.

FINANCIAL RATIOS

OUTLOOK

The Management remains cautiously optimistic about the medium- to long-term prospects of the ferro alloys industry, supported by the expected growth of Indias steel and infrastructure sectors. At the same time, the Company remains conscious of the volatility inherent in commodity markets and will continue to closely monitor market developments.

The Company will continue to focus on strengthening its presence in the ferro alloys trading business, expanding its customer and supplier base, improving procurement efficiencies and identifying opportunities for sustainable and profitable growth.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report containing the objectives, expectations or predictions of the company may be forward-looking within the meaning of securities laws and regulations. Actual results may differ materially from those expressed in the statement. The operations of the Company could be influenced by various factors such as domestic and global demand and supply conditions affecting sales volumes and selling prices of finished goods, input availability and cost, tax laws, economic developments within the country and other factors such as litigation and industrial relations.