Rahul Merchandising Ltd Management Discussions

We submit herewith the "Management Discussion and Analysis Report" on the business of the Company as applicable to the extent relevant.

GLOBAL ECONOMY OVERVIEW

The global economy in 2025 is facing a period of moderated and uneven growth, with projections hovering between 2.3% and 3.0%. This slowdown is largely attributed to heightened trade tensions and policy uncertainty, exemplified by increasing tariffs that are disrupting global commerce and driving trade policy uncertainty to historic highs, consequently impacting investment and confidence.

Inflation is generally expected to continue moderating, reaching 2.9% to 4.4%, though it remains above pre-pandemic levels in many regions. This dictates varied interest rate policies: while some central banks in Europe and Latin America might cut rates, the US Federal Reserve is expected to hold steady longer due to higher inflation forecasts.

Geopolitical tensions, particularly ongoing conflicts, continue to amplify global instability and supply chain vulnerabilities. Additionally, long-term challenges like aging populations in advanced economies and risks associated with rapid technological advancements, especially AI, add layers of complexity.

India stands out as a significant growth engine, projected to expand by 6.2% to 6.6%, making it the fastest-growing major economy. In contrast, the US economy is expected to slow to 1.5-1.8% due to trade conflicts, and Chinas growth will moderate to 4.0-4.7% amidst property sector issues. Overall, the global economic outlook for 2025 demands adaptability and resilience from policymakers and businesses to navigate an increasingly complex and uncertain environment.

Outlook

Global growth is estimated to remain stable at 3.2% throughout CY 2024 and CY 2025. Global inflation is receding at a faster pace than anticipated. It declined from 8.7% in CY 2022 to 6.8% in CY 2023 and is expected to further decline to 5.9% in CY 2024, according to IMF.

However, geopolitical risks remain high, particularly in light of the continuing conflict in the Middle East and political tensions in Europe. Going forward, declining inflation and greater government spending is anticipated to alleviate fiscal pressures and expected to attract investments for future growth.

INDIAN ECONOMIC OVERVIEW

The Indian economy in 2024-25 has shown continued resilience and steady growth despite global uncertainties. Real GDP growth is estimated at 6.5%, aligning closely with its decadal average, while nominal GDP growth is projected at 9.8%. This growth is underpinned by strong domestic demand, with private final consumption expenditure estimated to grow by 7.2%, driven by a rebound in rural demand, and gross fixed capital formation showing a robust 7.1% increase.

The governments economic policies for 2024-25, as outlined in the Union Budget and Economic Survey, focus on "Next Generation Reforms" aimed at enhancing productivity and market efficiency. Key initiatives include a deregulation strategy to improve ease of doing business, particularly for MSMEs, and significant capital expenditure on infrastructure.

The financial sector remains stable, with declining non-performing assets (NPAs) and robust capital buffers. Retail inflation has moderated to 4.9% (April-December 2024), with the aim to align with a 4% target in FY26. Foreign Direct Investment (FDI) inflows have also shown a healthy increase.

INDUSTRY OVERVIEW

METAL

GLOBAL METAL MARKET

The global metal industry is a vast and vital sector, supporting everything from massive infrastructure projects and bustling automotive factories to the intricate electronics we use daily and the burgeoning renewable energy sector.

The global metal market was valued at approximately $4392.33 billion in 2024 and is projected to reach $4651.03 billion in 2025, growing at a CAGR of 5.9%. This strong growth is expected to continue, reaching $5491.59 billion by 2029 at a CAGR of 4.2%.

This expansion is fueled by several powerful forces: ongoing construction and infrastructure development worldwide, general manufacturing and industrialization, the evolving yet still substantial automotive industry, growing emphasis on circular economy initiatives, and crucially, the global push for climate change mitigation and green technologies, which is particularly boosting demand for metals like copper, nickel, and lithium. Geographically, Asia-Pacific leads the market, with Western Europe holding the second-largest share.

The industry is currently experiencing a wave of exciting technological innovation, including smarter metal recycling, the widespread adoption of green technologies, and the integration of Industry 4.0 principles like smart manufacturing and digital marketplaces.

Looking ahead, several emerging technologies are poised to redefine the metal industry. The increasing use of automation and collaborative robotics (cobots) is enhancing safety and efficiency while addressing labor shortages. 3D printing (additive manufacturing) offers a revolutionary way to create complex metal parts with minimal waste.

INDIAS METAL MARKET

The Indian metal industry continues to be a cornerstone of the nations economic development, exhibiting robust growth driven by ambitious infrastructure projects, rapid urbanization, and a burgeoning manufacturing sector. Both steel and aluminum, the industrys key pillars, are witnessing significant demand, cementing their crucial role in Indias trajectory towards becoming a global economic powerhouse.

Outlook

India maintains its position as the second-largest crude steel producer globally and is projected to hold its place as the second-largest consumer of finished steel in 2025. This impressive performance is underscored by forecasts from CRISIL and the World Steel Association (world steel), which predict an 8-9% growth in Indias steel demand in 2025, significantly outstripping global averages.

This surge is primarily propelled by extensive infrastructure development, with the National Infrastructure Pipeline (NIP) envisaging investments exceeding $1.4 trillion (?111 lakh crore) by 2025. Infrastructure spending alone is expected to absorb approximately 40% of domestic steel production in the current fiscal year, fueling projects such as expanding road networks (averaging 27 km laid per day in 2024), high-speed railways (aiming for 10,000 km by 2030), and rapid urbanization. Furthermore, the housing and construction sector is projected to grow from $189.8 billion in 2024 to $272.67 billion in 2029 (a 7.5% annual growth), bolstered by initiatives like reduced down payments for apartments. The fast-growing automotive sector, with projected sales reaching 10 million units by 2025, and the "Make in India" initiative, alongside the Production Linked Incentive (PLI) scheme, are also significantly boosting steel consumption in manufacturing, engineering, and packaging.

KEY INITIATIVES UNDERTAKEN BY THE GOVERNMENT OF INDIA IN FY 2025*

Production Linked Incentive (PLI) Scheme for Specialty Steel (PLI 1.1)

This is a crucial initiative aimed at boosting the domestic manufacturing of high-grade and specialty steel. The scheme covers five key product categories: Coated/Plated Steel Products, High Strength/Wear Resistant Steel, Specialty Rails, Alloy Steel Products & Steel Wires, and Electrical Steel (including CRGO steel).

Emphasis on Green Steel and Decarbonization

The Ministry of Steel has sought significant budgetary allocation (around $1.7 billion) for incentives to help mills cut emissions and produce low-carbon steel. This aligns with Indias 2070 net-zero target. India is also considering mandating the use of "green steel" in government projects to further support this initiative.

Domestically Manufactured Iron and Steel Products (DMI&SP) Policy

It mandates that government ministries, departments, PSUs, and projects funded by them prioritize domestically manufactured iron and steel products. The "melted and poured" rule ensures deeper domestic value addition.

PM Gati Shakti National Master Plan

This initiative integrates various utility services and logistics modes, improving multi-modal connectivity for mine areas and steel units, thereby streamlining the supply chain for the metal sector.

OPPORTUNITIES, CHALLENGES AND OUTLOOK

Opportunities

• Robust Domestic Demand:

– Infrastructure Push: Continued massive government spending on infrastructure projects (roads, railways, ports, airports, urban development) under initiatives like PM Gati Shakti is the primary driver of steel and other metal demand.

– Housing and Construction: A strong focus on affordable housing schemes (e.g., Pradhan Mantri Awas Yojana) and general urbanization drives demand for metal-intensive construction.

– Manufacturing Growth: Resurgent demand from sectors like engineering, automotive (despite some fluctuations), packaging, and capital goods contributes significantly.

– Renewable Energy: Ambitious targets for renewable energy capacity expansion (e.g., 500 GW by 2030) create demand for metals in solar panels, wind turbines, and transmission infrastructure.

• Government Support & Policy Initiatives:

– Production Linked Incentive (PLI) Scheme for Specialty Steel: This scheme, with its expanded "PLI 1.1" launched in early 2025 (reflecting developments in 2024), is designed to boost domestic high-value steel production, reduce imports, and attract significant investments.

– Domestically Manufactured Iron & Steel Products (DMI&SP) Policy: This policy prioritizes Made in India steel for government procurement, ensuring a stable demand base for domestic producers.

– Duty Adjustments: Reduction in customs duty on key raw materials like Ferro Nickel and extension of duty exemption on ferrous scrap aim to reduce input costs for manufacturers.

– Quality Control Orders (QCOs): Strict enforcement of QCOs ensures that only quality steel is used, protecting domestic producers from sub-standard imports.

• Green Transition & Decarbonization:

– Emerging Market for Green Steel: Indias commitment to net-zero emissions by 2070 creates opportunities for investments in green steel technologies (hydrogen-based steelmaking, CCUS, electric arc furnaces).

– R&D Funding: Government support for R&D in green technologies and resource efficiency encourages innovation and sustainable practices.

• Raw Material Security:

– Critical Mineral Auctions: The ongoing exploration and auction of critical mineral blocks aim to secure domestic supply of essential non-ferrous metals and reduce import dependence.

– Scrap Recycling Policy: Promotion of steel scrap recycling helps reduce reliance on primary raw materials and contributes to a circular economy.

• Favourable Demographics & Urbanization: A large, young population and continued urbanization drive long-term demand for consumer goods and infrastructure, all of which are metal-intensive.

Challenges

• Rising Imports and Global Price Pressure:

– Surge in Cheap Imports: India experienced a significant surge in finished steel imports in 2024, particularly from China, Japan, and Vietnam, often at discounted prices, impacting domestic prices and market share. This has led to India being a net importer of steel in FY 2023-24 and continuing into FY 2024-25.

– Weak Global Steel Prices: Global steel prices remained soft in 2024 due to sluggish demand in major economies (e.g., Chinas real estate sector downturn, Europe, US, Japan demand contraction), putting downward pressure on domestic prices d12espite strong demand.

• Volatile Raw Material Costs:

– Coking Coal and Iron Ore Fluctuations: While coking coal prices showed some moderation in 2024, iron ore prices increased, leading to fluctuating input costs for steelmakers and impacting profit margins.

– Nickel and Ferroalloys: The stainless steel sector specifically faces challenges from volatile prices of key inputs like nickel and ferroalloys.

• Decarbonization Challenges:

– High Investment Costs: Transitioning to green steel production requires substantial capital investment in new technologies, which can be a significant financial burden for manufacturers.

– Technological Gaps: The adoption of advanced, cleaner technologies is still relatively slow, and dependence on traditional blast furnaces remains high.

– Availability of Green Hydrogen: Scaling up green hydrogen production for industrial use is a long-term endeavour with infrastructure and cost challenges.

• Logistics Inefficiencies:

– High Logistics Costs: Indias logistics costs (estimated at 12-14% of GDP) remain higher than global benchmarks, impacting the competitiveness of metal products.

– Inadequate Multimodal Infrastructure: Despite progress, gaps in last-mile rail and port connectivity can hinder efficient transportation of raw materials and finished goods.

• Unutilized Capacity:

– Stainless Steel: The Indian stainless steel industry, despite increasing consumption, has around 40% of its capacity unutilized, indicating a mismatch or overcapacity in certain segments.

• Global Protectionism & Trade Barriers:

– While India benefits from some protectionist measures, global trade policies, including tariffs imposed by other major economies (e.g., US tariffs on steel imports), can affect Indias export competitiveness.

Outlook

• Strong Domestic Demand Growth:

– India is projected to be the leading driver of global steel demand growth in 2024 and 2025. CRISIL forecasts Indias steel demand to grow by 8-9% in 2025, significantly outpacing global growth (projected at 0.5-1.5%).

– Non-ferrous metal demand is also expected to show robust growth, driven by infrastructure, renewables, and manufacturing.

• Increased Domestic Production:

– Indias crude steel production continued its upward trajectory, increasing by 6.2% in 2024 to 149.4 million tonnes. This growth is expected to continue in 2025.

– New capacities commissioned in 2024 (e.g., 15 million tonnes per year) will contribute to higher production in 2025.

• Potential for Price Recovery:

– The proposed or implemented safeguard duty (12% provisional as of April 2025) on steel imports is a key monitorable. If fully implemented and effective, it could lead to a 4-6% rise in domestic steel prices in 2025, improving profitability for mills.

– Prices are expected to stabilize around 52,000-53,000 per tonne for steel in FY26-27.

DISSCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and applicable accounting standards issued by the Institute of Chartered Accountants of India. The details of the financial performance of the Company are appearing in the Balance Sheet, Profit & Loss Accounts and other financial statements forming part of this annual report.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company deals in Single Segment. During the year, the revenue from operations stood at Rs. 3,35,43,648.00/ as compared to Rs. 5,00,000/- of last financial year on standalone basis.

INTERNAL FINANCIAL CONTROL SYSTEM

Given the magnitude and nature of its business, the Company has maintained sound and commercial practice with an effective internal control system. The system ensures that all transactions are authorized, recorded and reported correctly to safeguard the assets of the Company and protect them from any loss due to unauthorized use or disposition. The adequate internal information system is in place to ensure proper information flow for the decision- making process. The Company also has well-established processes and clearly defined roles and responsibilities for people at various levels. The control mechanism also involves well documented policies, authorization guidelines commensurate with the level of responsibility and standard operating procedures specific to the respective businesses, adherence to which is strictly ensured. Internal audit is carried out frequently to create awareness and to take corrective actions on the respective units or areas, which need rectification. These reports are then reviewed by the "Management Team" and the "Audit Committee" for follow-up action.

HUMAN RESOURCE DEVELOPMENT

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation.

Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.

DISCLOSURE OF ACCOUNTING TREATMENT

While preparation of financial statements, a relevant Accounting Standard treatment has been followed.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report containing your Companys objectives, projections, estimates and expectation may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. The statements in this management discussion and analysis report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the governmental regulations, tax regimes, forex markets, economic developments within India and the countries with which the Company conducts business and other incidental factors.

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

The Financial Year 2024-25 had been fortunate enough for the Company. The return on Net Worth stood at 14.5% for the current financial year as compared to 12.7% for the previous financial year.

	On behalf of the Board of Directors For Tacent Projects Limited (Formerly Known as Rahul Merchandising Limited)
Date: 26.08.2025 Place: New Delhi	Mohit Sharma Director (Whole Time) DIN: 07717249