Rama Steel Tubes Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC OVERVIEW

Global Economy

The global economy exhibited resilience, registering 3.5% growth despite elevated geopolitical tensions and trade uncertainties during 2025. It was supported by investments in technology, weak US dollar, and fiscal and monetary conditions. Though global output grew in 2025, the growth was uneven across the regions and this uneven momentum continues amid the opposite undercurrents of negative supply shock induced by Middle-east war and positive technology momentum accelerating growth.

As per World Economic Output Update July 2026, the output of advanced economies comprising the US, Japan, Euro Area, the UK, Canada and Other Advanced Economies grew by 1.9% in 2025, led by performance of the US, Spain, and other advanced economies. At the same time, the output of Emerging Markets and Developing Economies grew by 4.5% during 2025, backed by the growth of various economies in Asia, Europe, Africa and others. Emerging and Developing Asia registered substantial growth of 5.6%. India remained one of the fastest growing economies with 7.7% growth rate, followed by China with 5.0% growth during 2025.

Global headline inflation was 4.1% during 2025 in line with the continued disinflation. However, recent projections indicate the inflation is likely to rise to 4.7% in 2026 driven by high energy and transport costs. However, it may decline to 3.9% in 2027 due to expected energy supply recoveries and stable commodity market.

World Economic Output

Economy	2024	2025	2026E	2027E
World Output	3.5	3.4	3.1	3.2
Advanced Economies	1.9	1.9	1.8	1.7
United States	2.8	2.1	2.3	2.1
Euro Area	1	1.4	1.1	1.2
Emerging Markets and Developing Economies	4.5	4.4	3.9	4.2
China	5	5	4.4	4
India	7.1	7.6	6.5	6.5

Source: World Economic Outlook Update April 2026 and Reference Forecast July 2026

The world output is anticipated to register a dip in growth at 3.0% in 2026 because of geopolitical uncertainties and move upward 3.4% growth in 2027 upon the normalization. Advanced economies will also observe 0.2% decline in growth to 1.7% in 2026 and recovery by 0.1% to 1.8% in 2027. Emerging Market and Developing Economies are likely to record 0.7% decline in growth to 3.8% in 2026 and will bounce back with the higher growth rate of 4.5% during 2027.

Source: https://www.imf. org/-/media/files/publications/weo/2026/april/english/ text.pdf

https://www.imf. org/-/media/files/publications/weo/2026/ update/july/english/text.pdf

INDIAN ECONOMY

Indian economy remained buoyant amid energy price hikes and geopolitical conflicts and continued its growth trajectory registering robust growth of 7.7% in FY26. Real GDP received a boost from robust manufacturing and service sector activities and maintained the growth of more than 7% for the third consecutive year. Manufacturing sector registered 10.7% growth while the sector comprising trade, hotels, transport, communication, broadcasting, and storage recorded 11% growth during FY26.

Private Final Consumption Expenditure increased by 7.7%, reflecting the robust demand by households. On the supply side, manufacturing remained strong and indicated strong future momentum with 8.2% growth in Gross Fixed Capital Formation. Discrepancies in imports and exports remained at the same level.

As per NSOs provisional estimates, retail (headline) inflation based on Consumer Price Index was 4.38% in June 2026, up from 2.1 % in June 2025 while food inflation based on Consumer Food Price Index was 5.32%, up from -1.06 % in June 2025. The increase was majorly driven by global energy pressures and food prices, pushing the inflation beyond midterm target of Reserve Bank of India. However, the inflation remained within its targeted range between 2% to 6% and it is expected decline to 5.1% in FY27 with easing supply conditions.

As per reference forecast of IMF in World Economic Outlook (July 2026), Indian economy is expected grow at 6.5 % in 2026 while Monetary Policy Committee of the Reserve Bank of India has projected the growth of 6.7% for Indian economy during FY27 on August 5, 2026. The growth will be supported by rise in consumption, credit demand, capital formation, infrastructure spending, manufacturing and financial services restrained by downside risks of geopolitical pressures and external volatility.

Source: https://www.mospi.gov.in/uploads/latestReleases/latest_ release_1780655857536_5ac01869-ca4a-422d-b7a7-57b81da60932_Press_Note_ on_GDP_Estimates_for_Q4_2025-26_and_PE_FY_2025-26_F.pdf https://www.pib. gov.in/PressReleasePage.aspx?PRID=2219912&reg=3&lang=1 https://www. reuters. com/world/india/indian-central-bank-holds-rates-expected- taking-comfort-still-modest-inflation-2026-08-05/

https://www. pib. gov. in/PressReleasePage. aspx?PRID=2284125&reg=48&lang=1

INDUSTRY OVERVIEW

Global Steel and Steel Tube Industry

As per World Steel Short Range Outlook, world crude steel demand reached 1,719 million in 2025 and is expected to grow by 0.3% in 2026 to reach 1,724 million tons in 2026. At the same time, crude steel production declined from 1,887 million tons in 2024 to 1,849 million in 2025. As per World Steel Association, the industry faced structural oversupply, weak capacity utilization and sliding prices.

However, the steel tubes, being finished products, witness different demand and supply dynamics. Demand for steel tubes and pipes remained high and encouraging during 2025 as per International Tube Association. Demand for certain tubes increased by 40% while tube and pipe supply increased by 10%. Global tube and pipe production is estimated to reach 177.9 million tons, registering YoY growth of 10.35% over 161.2 million tons in 2024. Most remarkably, the demand for pipeline tubes exceeding 16" outer diameter surged 37%, driven by major new pipeline projects redirecting global oil and gas flows amid geopolitical disruption.

The Middle-east conflict has emerged as the defining industry catalyst — blocking approximately 26% of global maritime oil and gas trade through the Strait of Hormuz, driving oil prices from up by 67% to USD100 per barrel. It compelled the affected countries to urgently create a new pipeline infrastructure demand to evade logistical chokepoints.

Worlds steel tube and pipe demand comes from oil and gas sector, automotive sector and mechanical sector. Oil and gas sector accounts for 51% of global tube demand, followed by automotive for 15%, mechanical engineering for 9%, and construction for 5%. India recorded a remarkable 94% production increase in the first half of 2025, driven by attractive hot rolled coil prices at USD 432 per ton and infrastructure growth. China continued to dominate global output with 52% market share followed by Indias 8.9% contribution in 2025.

OUTLOOK

The demand for carbon capture, utilization and storage (CCUS) pipelines, hydrogen infrastructure, corrosion- resistant alloys, and BEV structural applications across the globe presents the growth opportunities to this industry. The global steel tube and pipe industry stands at an inflection point wherein these powerful emerging opportunities appearing at the same time.

The geopolitical reconfiguration of global energy flows is driving an unprecedented demand for new pipeline infrastructure while CCUS and hydrogen pipelines represent transformative new market segments requiring premium-grade, higher-alloyed specialty material tubes. Simultaneously, the rapid growth of battery electric vehicles (BEV) generates the demand for entirely new structural tube applications while oil and gas sector needs pipes made with green, low-carbon, corrosion-resistant alloys for. exploration. Moreover, steel pipe and tube industry is embracing digital, AI, and robotic technology for process improvements that lead to enduring production efficiency, quality, and customer service.

INDIAN STEEL AND STEEL TUBES INDUSTRY

During FY26 (April 2025-February 2026), the crude steel production stood at 153.5 million ton while finished steel production remained 146.9 million ton in India. At the same time, use of finished steel reached 147.7 million ton in FY26, lower than 150.23 million ton in FY25. Though the per capita use of finished steel reached 100 kgs in FY26, it remained below per capita use of finished steel products of 209 kg in the world during 2025. Indias National Steel Policy targets higher per capita use of finished steel of 160 kg. by FY31 while projecting national steel production capacity to reach 300 million tons by 2030.

Though Indian steel tubes and pipes industry is part of the larger steel industry, its growth of Indian steel tubes and pipes industry depends on not only sourcing the crude steel but also the demand by various sectors such as construction, water transportation, and energy. On the supply side, tube and pipe production increased by 94% during first half of 2025 with 272% rise in welded tube under 16", 77% rise in seamless tube production and 3% rise in pipeline tubes larger than 16".

As per Grand View Research, the steel tubes and pipes market size was estimated to be USD 7,621.6 million in 2025 and is likely to grow at 7.1% up to 2033. The top five exported steel products during FY26 included steel pipes besides sheets and coils, making India a net exporter of steel. Indian steel tube and pipe industrys growth was underpinned by growth in other industries such as construction and building material, energy and industrial engineering, infrastructure and public water work, agriculture and irrigation and automotive manufacturing in FY26 as follows.

^ Indias rapidly expanding oil and gas pipeline network creates a long-term domestic seamless steel pipes demand complementing export growth. Governments National Gas Grid Expansion program and growing urban gas distribution network boost the demand for steel tubes. Nonetheless, the renewable energy sector is also witnessing growth with government support, requiring structural and process tubes for solar penal production.

^ Indias construction sector has grown by 9.2% during FY26, driving structural tube consumption through infrastructure projects, real estate development and industrial construction. Large load-bearing structures require electric resistance welded (ERW) and cold drawn welded (CDW) rectangular/square hollow sections.

Governments National Gas Grid Expansion program and growing urban gas distribution network boost the demand for steel tubes.

^ Indian Governments spending on urban development, housing and sewage networks also elevates the baseline use of steel tubes and pipes. Urban water schemes like the Jal Jeevan Mission requires large-scale pipe line, maintaining a high demand base for MS ERW and ductile pipes.

^ In automotive and engineering segment, cold drawn welded (CDW) tubes and precision steel tubes are used in automobile chassis, fuel injection systems, shock absorbers and heavy industrial machinery. The growing battery-operated electric vehicles automotive market in India is also creating demand for specialised tubes.

More than 65% demand of steel tubes and pipes come from building and construction, followed by 10% demand from energy, oil, gas & engineering sector. Infrastructure & water distribution, automotive and irrigation account for 9%, 5% and 4% respectively.

OUTLOOK

The prospects for Indias steel tube and pipe industry remain positive on the backdrop of structural cost advantages, government push, fast-tracking domestic infrastructure investment, growing export competitiveness, and the emergence of premium new market segments. India is expected to continue as one of the worlds fastest-growing tube and pipe markets, specifically with welded tube production for exports and pipeline tube production for domestic oil and gas infrastructure. The additional capacity specifically needed to meet growing construction demand in India strengthens the investment proposition for capacity expansion in steel tube manufacturing. For Indian tube and pipe manufacturers FY27 and beyond represent a period of exceptional strategic opportunity, provided they invest decisively in quality upgrades, specialty grade capabilities, export market development, and green manufacturing infrastructure.

KEY GROWTH OPPORTUNITIES

Indian government has prioritized and accelerated infrastructure development, industrial expansion and urbanization, creating opportunities for steel tube manufacturers across various sectors of India besides construction. Rama Steel Tubes Limited is poised to strengthen its market position with its diversified product portfolio including value-added products and manufacturing capabilities.

^ Real Estate and Construction Growth: Increasing ongoing and new residential, commercial, industrial and public utility projects continue to create demand for structural steel products used in construction of buildings, warehouses, industrial facilities and public infrastructure. Rama Steel offers a range of products including scaffolding pipes and tubes, hollow sections, ERW black and galvanized pipes and structural steel products to capture the market opportunities.

^ Demand in Renewable Energy Sector: More and more enterprises are increasingly investing in solar energy and wind projects and infrastructure, generating significant opportunities for galvanized steel structures, specialized steel products, and mounting systems. Rama Steel has invested in associate company- Oram Green Energy Limited to pivot into specialized steel structures and tracker tubes for solar energy projects.

^ Infrastructure-driven Demand: The government has continued to invest under the various initiatives such as National Infrastructure Pipeline, PM Gati Shakti Yojana (multimodal connectivity over 16 ministries for improved logistics), Bharatmala Pariyojana (highways), Smart Cities Mission, Jal Shakti Abhiyan, PM-Kusum Scheme (solar-powered affordable irrigation) and affordable housing, leading to sustained demand for steel tubes, pipes and structural products.

^ Shift in Customer Preference: Customers increasingly prefer high-quality galvanized pipes, colour-coated products, crash barriers, solar structures, and precision tubes, presenting high-value, diversified revenue stream opportunities. Rama Steel has a strong portfolio of various value-added products including pre-galvanized (GP) pipes, scaffolding systems, swaged poles, and specialized structural engineering products.

^ Government Policy Push: Government encourages domestic steel manufacturing with budget allocation and diverse initiatives such as Make in India, Production-Linked Incentive (PLI) schemes, Mission Purvodaya (integrated steel hub) and industrial corridor development. Vehicle scrappage policy by government is also likely to boost recycled steel products which contributes substantially to resource-efficient and overall steel production in India. These supportive measures support long-term growth in the steel value chain.

^ High Export Potential: Increasing global demand for Indian steel products especially for welded tubes, provides opportunities to strengthen exports across Europe, the Middle East, Africa, North America, and other emerging markets. The Company has already significant international presence and adheres to global quality standards, growing its export strength.

^ Technology-led Boost: Strategic investments in automation, advanced production technologies and expansion in manufacturing capacity are anticipated to improve productivity, optimize costs and elevate the customer service. Rama Steel has automated operations in factory, scaled its capacity, and integrated backward for in-house sourcing of raw material.

^ Focus on Sustainability and Green Manufacturing:

Customers increasingly focus on environmentally responsible sourcing, presenting opportunities for energy-efficient manufacturing, resource optimization, and low-carbon production processes. The Company has adopted the sustainable practices in every aspect of business which strengthens the Companys competitive positioning.

^ Industrial diversification: Steel tubes and pipes are essential in automotive, agriculture, oil & gas, engineering, telecom, warehousing, water infrastructure, and industrial fabrication, driving their demand across the sectors. These all sectors continue their strong activities and momentum with robust growth of Indian economy, driving diverse tube demands. Such an industrial diversification of demand broadens Rama Steels customer base and reduces dependence on any single user or industry, ensuring consistent revenue.

COMPANY OVERVIEW

Rama Steel Tubes Ltd. (hereafter referred to as RSTL or the Company) has evolved from a modest steel tube manufacturer into one of Indias leading diversified steel products companies since its establishment by the late Shri Harbans Lal Bansal in 1974. Guided by his vision of delivering quality, innovation and customer-centric solutions, the Company has consistently enhanced its manufacturing capabilities, product portfolio and domestic and global presence. At present, it is operating under the oversight of founders son Mr. Naresh Kumar Bansal and grandson Mr. Rishi Bansal.

Five-decade journey in steel pipe industry reflects resilience and adaptation of the Company besides vision and prudence of the management. As Indias infrastructure and industrial landscape progressed, RSTL aligned its growth strategy with emerging national priorities. It continued to invest in manufacturing upgrades, automation, advanced galvanized technologies and product innovation, elevating operational efficiency and product quality.

WIDE AND INNOVATIVE PRODUCT PORTFOLIO

RSTL has manufactured and delivered high-quality steel tubes and pipes consistently while focusing on operational efficiency and sustainable practices. The tubes and pipes undergo various quality checks and skilled supervision during manufacturing to ensure global quality standards. They are marketed under globally recognized brand - "TTT Rama" across the national and international markets. RSTL remains committed to providing customer-centric solutions by developing innovative products and enhancing operational efficiency.

The Company offers various steel products used in infrastructure, water supply, power distribution, and renewable energy sectors. Its diversified product portfolio includes galvanized iron (GI) pipes, hollow sections, structural steel tubes, pre-galvanized pipes, electric resistance welded (ERW) pipes, scaffolding systems, and other specialised steel solutions besides conventional steel tubes.

i. Galvanized Iron (GI) pipes - Light, medium and heavy high-corrosion-resistant GI pipes of 15mm to 150 mm Nominal Bore for agriculture, irrigation and municipal plumbing.

ii. Hollow Sections - Square and rectangular structural hollow sections used in advanced real estate framing, industrial sheds and airports.

iii. Structural Steel Tubes - Structural steel tubes with load-bearing capacity and dimensional accuracy for commercial buildings, industrial sheds, bridges, and infrastructure projects.

iv. Cold Rolled (CR) and Pre Galvanized Pipes - Zinc- coated, economical and durable pre-galvanized pipes for light structural and fabrication applications.

v. Electric Resistance Welded (ERW) Pipes - ERW pipes of 15mm to 200mm (and up to 800mm for specific engineering scales) utilized in water distribution, gas pipelines, and general engineering fabrication.

vi. Scaffolding Systems and Casing Pipes: Heavily robust pipes designated for the construction staging sector and deep-bore water well casings.

ix. Specialized Steel Solutions- Custom-engineered steel tubular poles (STP) and swaged poles, Single-axis and dual-axis solar tracker tubes and highly resilient mounting structures, pipe support systems, greenhouse structures.,

ADVANCED MANUFACTURING FACILITIES

RSTL operates three manufacturing facilities - one located in Sahibabad (Uttar Pradesh), one in Khopoli (Maharashtra), and one in Anantapur (Andhra Pradesh). Sahibabad unit is the flagship facility serving National Capital Region and equipped with advanced high-tech tube mills while Khopoli unit near Mumbai drives export operations and equipped with automated high tech tubes mills. It manufactures specialized structural steel tubes and high-grade galvanized pipes of global quality. The Anantapur facility directly feeds regional demand and operates with modern processing machinery to minimize regional logistics costs.

RSTL operates with a cumulative installed manufacturing capacity of 3,30,000 metric tonnes per annum (MTPA) distributed across these facilities. The Khopoli plant holds more than 60% off the total installed capacity of the Company as it largely manufactures for exporting to other countries. All the plants have the advanced in-house testing laboratories for intensive mechanical and metallurgical checks. The strategic locations of these plants optimize the distribution across 17 states and international markets.

BROAD DISTRIBUTION NETWORK

The Companys strong distribution network caters to India and more than 16 countries across four continents (the UK, the Middle East, Africa and South America), making it a renowned global brand in value-added products. The domestic network spans across 17 states and union territories while global network extends to the UAE, UK, USA, Germany and growing markets of East Africa. RSTL reaches customers through 350+ dealers and distributors in India while its UAE-based subsidiary (RST International Trading FZE) and Nigeria- based step-down subsidiary (RST Industries Limited) become instrumental in expanding its global footprint.

Strategic Alliances: Rama Steel Tubes Limited (RSTL) shall acquire a 21.62% stake in Abu Dhabi Global Market (ADGM)- registered Automech Group Holding Limited, jointly with its wholly owned subsidiary, RST International Trading FZE, which will acquire the remaining 78.38% stake. The acquisition shall provide RSTL with a strategic platform to accelerate its entry into high-margin engineering, fabrication, precision engineering, construction and industrial services, while diversifying its business beyond the traditional steel tubes and pipes segment.

The transaction is intended to leverage Automech Groups established capabilities across steel fabrication, assembly, precision engineering, contracting, infrastructure and related engineering services, thereby strengthening RSTLs presence in value-added and higher-margin segments and expanding its international business footprint.

BUSINESS STRENGTHS

^ Expert Oversight

RSTL is a pioneering and well-established enterprise in the Indian steel tubes and pipes industry, with a strong legacy built over several decades. The Company is led by an experienced and agile promoter group with deep knowledge across the industry and a proven track record of navigating evolving market conditions throughout its journey.

Over the years, RSTL has significantly expanded its market presence, strengthened long-standing customer relationships and established a reputable brand through consistent product quality, reliable deliveries and a customer-centric approach.

The promoters possess strong market insights and a forward-looking approach, enabling them to anticipate emerging industry trends and proactively diversify into new products and business segments in line with evolving customer requirements. Their hands-on oversight of operations and markets supports effective execution of business strategies across multiple manufacturing units and geographies, while enabling the Company to respond swiftly to changing market dynamics and emerging growth opportunities.

^ Efficient Manufacturing

The Company operates advanced manufacturing facilities strategically located across different regions of India, enabling it to efficiently serve customers across key markets while optimizing logistics and transportation costs. These facilities leverage advanced Japanese technology, sophisticated machinery and modern highspeed tube mills, supported by extensive automation and robust manufacturing processes to achieve high standards of operational and manufacturing excellence.

The Company continuously invests in technological upgradation, automation and environmentally sustainable initiatives across its multi-location plants.

Its Khopoli facility has already been equipped with a solar power installation, which contributes to reducing the Companys carbon footprint and lowering energy costs.

The Company also continuously expands its product portfolio by increasing SKUs and introducing specialized diameter sizes to cater to the requirements of high-value and specialized market segments. Each manufacturing facility is supported by in-house testing laboratories equipped to conduct critical quality tests, including tensile, flattening, crushing and drift tests. These stringent quality-control processes enable the Company to manufacture products in compliance with applicable national and international standards for structural, industrial and agricultural piping applications.

RSTL manufactured 2,00,696.20 MT steel products in FY26, utilizing 61% installed capacity as against 1,70,745 MT steel products produced with 58.00% capacity utilization in FY25.

^ Significant Cross-border Presence:

The Company exports to more than 16 countries including the United Kingdom, United Arab Emirates, Sri Lanka, Ethiopia, Kenya, Uganda, Somalia, Ghana, Sudan, Kuwait, Republic of the Congo, Yemen, Guyana, Germany, the United States, South Africa, Zambia and Malta. Nonetheless, the group companies in UAE and Nigeria support its international trading and export activities. At domestic front, its Sahibabad facilities cater to northern and central India, Mumbai facility caters to western India and Anantapur facility caters to southern markets, covering most states. RSTL actively monitors the contemporary trends in the overseas and national markets and effectively respond to the demand.

^ Strong Client Base

The Company has been consistently serving notable institutional and project clients from infrastructure, construction, power, oil & gas, telecom, real estate and industrial sectors. The clients include Steel Authority of India Limited (SAIL), Gas Authority of India Limited (GAIL), Reliance Industries, Larsen & Toubro, Airtel, Bharat Sanchar Nigam Limited (BSNL), Bombay Suburban Electric Supply (BSES), Rajdhani Power Limited, Gujarat Gas Limited, various state electricity boards and Jal Shakti departments, Hindustan Petroleum Corporation Limited (HPCL), TATA, Adani, Delhi Land & Finance (DLF), Grandhi Mallikarjun Rao (GMR), Ashok Leyland, and others. RSTL has focused on delivering quality products to these clients and completed more than 400 projects. It maintains cordial relationship with more than 1,550 satisfied customers that support steady volume growth.

^ Technology Integration

Technology-led manufacturing, quality assurance, and operations not only enhance efficiency but also contribute to sustainability, providing cutting-edge competences to the Company. The high-speed tube mills from Kusakabe of Japan enable high productivity, precision forming of ERW pipes and production of a wide range of diameters. At the same time, the automated manufacturing lines with centralized control systems maintain consistency and efficiency in every batch of over 100 SKUs (stock keeping units). Nonetheless, UAE-based Automech Group Holding Limited shall bring advanced CNC machining, precision engineering, and fabrication capabilities, expanding into tech-intensive segment.

The quality assurance system uses sophisticated equipment and performs 100% hydrostatic testing. It also supports third-party inspections (SGS, Bureau Veritas, etc.) and adheres to BIS and ISO 9001:2015 standards. The Company has also installed solar power panels and shifted from furnace oil to cleaner piped natural gas. Its automation, process controls, and solar power installations reflect its rapid technology absorption in operations.

FINANCIAL OVERVIEW

Rama Steel Tubes Limited delivered a resilient performance in FY26 amid dynamic market conditions. Its sales volume grew by 10.19% to aggregate 2,15,114.20 MT while revenue or sales value grew by 7.26% to Rs.11,241.19 million in 2025-26 over the previous year. This topline expansion was led by a thoughtful strategy to shift away from low-margin segments into high-value segments, supported by budget allocation and construction spending.

CONSOLIDATED FINANCIAL PERFORMANCE

			(in Rs. Millions
Particulars	March 31 2026	March 31, 2025	Change %
Revenue from Operations	11,241.19	10,480.52	7.26
Operating Expenses	11,071.33	10,190.32	8.65
EBITDA	169.86	290.21	-41.47
Other Income	182.49	167.72	8.80
Depreciation and Amortization	58.16	58.59	-0.74
Earnings Before Interest and Tax (EBIT)	294.19	399.34	-26.33
Finance Costs	124.62	116.70	6.79
Profit Before Share in Profits of Associates	169.57	282.64	-40.00
Share in Profits of Associates and Joint Ventures	4.88	5.94	-17.85
Profit Before Tax	174.45	288.58	-39.55
Tax Expenses	64.99	61.14	6.30
Net Profit	109.46	227.44	-51.87
Other comprehensive income	64.40	11.35	467
EPS in Rs.	0.08	0.15	-46.67

The Companys EBITDA declined to Rs.169.86 million in FY26 from 290.21 million in FY25, primarily due to an increase in operating expenses of approximately 8.65%, which exerted pressure on operating margins. Despite the moderation in operating profitability, the Companys other income increased to Rs.182.49 million in FY26 from Rs.167.72 million in FY25, registering a growth of approximately 8.8%.

Depreciation and amortization expenses remained broadly stable during the year. However, finance costs increased to Rs.124.62 million in FY26 from 116.70 million in FY25, reflecting higher financing costs during the period. Tax expenses also increased to Rs.649.85 million in FY26 from Rs.611.40 million in FY25.

Consequently, the combined impact of lower operating profitability, higher finance costs and increased tax expenses resulted in a net profit of Rs.109.47 million in FY26.

The Company remains focused on improving operating efficiencies, optimizing its cost structure and strengthening margins to support sustainable profitability going forward.

RSTLs Earnings Per Share (EPS) declined to 0.08 in FY26 from 0.15 in FY25, primarily due to a decline in consolidated net profit amid significant margin contraction, coupled with an increase in the weighted average number of equity shares during the year.

The Companys profitability was impacted by a sharp increase in raw material prices and higher overheads associated with business expansion. The Company also experienced a structural lag in passing on these cost increases to its B2B customers, resulting in pressure on operating margins and consequently, the bottom line.

The Companys equity share capital increased during FY26, with the number of outstanding shares rising from 155.40 crore as of March 31, 2025, to 163.60 crore as of March 31, 2026. The increase was primarily attributable to earlier private placements which enabled the Company to raise approximately 875 million (Rs.87.50 crore) during the year. The higher equity base, in turn, contributed to the reduction in EPS alongside the decline in consolidated profitability.

KEY FINANCIAL RATIOS BASED ON CONSOLIDATED FINANCIAL STATEMENTS

Ratios	FY26	FY25	Change %	Remarks
Debtors Turnover Ratio (times)	4.34	4.56	-4.82	Higher trade receivables
Inventory Turnover Ratio times)	8.29	7.58	9.37	Increase in operating costs
Interest Coverage Ratio (times)	2.36	3.42	-31.01	Compressed margins and increase in finance costs
Current Ratio (times)	1.80	1.66	8.27	Inventories and trade receivables increased
Debt Equity Ratio (times)	0.27	0.24	12.88	Long term borrowings increased
EBITDA Margin (%)	1.51	2.77	-45.43	Proportionately higher increase in operating expenses than sales
Net Profit Margin (%)	0.97	2.17	-55.13	Increased costs

BUSINESS STRATEGIES

The Company is focused on strengthening the core business of steel tubes, diversification into higher-value segments, expansion of products and capacity, and geographic growth.

^ Core Business Strengthening:

RSTL has upgraded its Anantapur manufacturing facility to enable the production of larger-diameter pipes of up to 800 mm, with commercial production commencing during FY26. This capacity enhancement strengthens the Companys ability to cater to growing demand for larger-diameter and application-specific pipes across infrastructure, construction and industrial segments.

The Company is also modernising its Sahibabad facility in North India with a focus on improving manufacturing yield, operational efficiency and overall productivity, thereby enhancing its ability to meet evolving domestic market requirements.

As part of its growth strategy, RSTL is increasing its focus on value-added and specialized products, with an objective of increasing the contribution of specialized pipes to approximately 10-15% of its overall product portfolio. The Company continues to expand its product range and manufacturing capacity while focusing on cost optimization, operational efficiency and strengthening its distribution network.

These initiatives are aimed at improving product mix, enhancing customer value, expanding market reach and supporting sustainable growth in the Companys core steel tubes and pipes business.

^ Geographical and Capability Expansion

The Automech Group Holding Limiteds proposed acquisition by RSTL and its subsidiary shall expand its capabilities to precision engineering, CNC machining, heavy fabrication, marine services, dewatering, and oilfield equipment. It is expected to generate revenue of approx. 22 billion by FY27, improve margins and strengthen the presence of the Company in GCC, MENA, and European markets.

The Company looks forward to innovation-led growth through value-added offerings, automation, R&D and digital adoption. It continues to scale the manufacturing capabilities and product mix for infrastructure and solar applications. It will leverage Automech Group Holding Limited integration for higher-margin engineered solutions and international expansion and underscore sustainability and excellence in operations.

OUTLOOK

The Company is at the inflection point where expansion into solar energy and precision engineering products offer immense growth potential while declining margin on core steel products risks the performance despite growth in sales volume. However, RSTL is poised for sustainable growth by expanding into high-value segments and strengthening core steel tube business. It is diversifying product portfolio and enhancing capabilities that support future demand. RSTL has started to acquire strategic stake in Automech Group Holding Limited, that are anticipated to contribute to growth immensely with regular and robust revenue streams. The Company remains committed to sustainable practices and long-term value creation by focusing on new segments, capacity expansion and continued efforts to increase the presence across geographies.

CORPORATE SOCIAL RESPONSIBILITY

RSTL undertakes its corporate social responsibility initiatives with a focus on creating valuable and sustainable social impact. It adopts responsible business practices and endeavours to contribute to community development and inclusive growth. Its structured CSR policy guides its economic, environmental and social interventions within the communities they operate. The Company has assigned the responsibility of formulating and recommending a suitable CSR policy to the CSR committee. The committee also supervises waste management, skill-based education, sanitation, hunger eradication, uplifting of the underprivileged and women and youth empowerment initiatives undertaken by the Company. RSTL also supports disaster relief, environmental sustainability and national missions in the wide interest. The Company invested Rs.40.45 lakhs towards initiative aimed at supporting education and sports, eradicating hunger, and care for underprivileged children. It remains committed to responsible practices and CSR activities while maintaining transparency and accountability in the deployment of resources.

KEY RISKS AND MITIGATION

^ Cyclical Demand and Sector Dependency

Demand in steel sector largely relies on steel using industries such as construction, water transport, oil and gas, automotive, consumer durables and capital goods. The Company may experience demand volatility driven by the adversity and cyclical fluctuations inherent in the indust8ries e.g., construction and infrastructure demand rises with economic expansion and government spending and falls with economic slowdowns, higher interest rates and reduced investments.

Mitigation: RSTL has adopted a diversified business model spanning geographies, industries and product lines to reduce its vulnerability to economic cycles. It exports the products to diverse countries and distributes them across India, catering to diverse end-user sectors. Nonetheless, it has built its brand equity by delivering quality products consistently in sectoral projects.

^ Competition Risk

RSTL faces competition from low-cost steel importers and unorganized entities that operate in India. They create pricing and margin pressures on the manufacturers such as Rama Steel Tubes Limited providing quality steel products at premium prices. Also, the established and organized players challenge the growth prospects and impact the market share of the Company.

Mitigation: RSTL draws on leverages its extensive industry experience, established infrastructure and distribution network, strategic locations of the facilities, technology, skilled manpower, diverse client-base and customer relationships to cater to the evolving needs of the market. It focuses on (i) operational efficiency to cut costs, (ii) product quality and innovation to create a demand pull and (iii) optimal use of production capacity to minimize risks associated with demand-supply imbalance.

^ Raw Material Price Risk

Raw material cost is a major component of operational cost of the Company. Any rise in their prices and failure to pass this increased cost to end users can compress the profit margins, risking the continuation of business activities. Also, the continual manufacturing activities need the consistent supply of raw materials to meet the demand.

Mitigation: The Company tracks the price volatility in raw material and adapts the strategy to secure cost-effective raw material. It engages with multiple suppliers close to manufacturing facilities spread across geographies and procures raw material avoiding any long-distance transport and freight costs. RSTL has also signed longterm MoU with SAIL Steel Authority of India for hot rolled coils procurement, allowing timely supply of high-quality raw material at competitive price. Moreover, RSTL is planning for backword integration to set up cold-rolling mills and galvanising facilities to produce intermediate raw material, reducing dependence on other sources.

^ Compliance Risk

RSTLs manufacturing operations are subject to various regulatory compliances related to pollution, emissions, and ESG norms. Moreover, as a company, RSTL needs to follow SEBI regulations related to listing obligations and disclosure requirements. Any violation may lead to notices, fines or operational restrictions from pollution boards.

Mitigation: The dedicated committees of the Company proactively monitor regulatory developments and prompts any changes to ensure compliance. RSTL adheres to Air & Water Pollution Acts, Hazardous Waste Rules, and pollution board guidelines for sustainable practices. Company Secretary & Compliance Officer ensures timely disclosures, filings, and reporting under SEBI regulations and prompts action on any omissions.

^ Currency Risk

RSTL is exposed to foreign currency risk arising from USD-dominated exports of steel pipes and tubes to more than 16 countries, financial transactions with subsidiaries and occasional import of raw materials. Exchange rate fluctuations impact the value of receivables, payables and overall profit margins.

Mitigation: The Company has an established foreign exchange management system that actively tracks foreign currency exposures and limits exposure to currency volatility through forward contracts. It retains a portion of the foreign exchange earnings in the US dollar for certain merchant trade accounts through Exchange Earners Foreign Currency account for natural hedging.

ENVIRONMENT, HEALTH AND SAFETY (EHS)

As a steel tube manufacturing company, RSTL recognizes that oversight of environment, employee health and workplace safety is vital to long term sustainability of the business. It has integrated EHS into Enterprise Resource Planning for continuous oversight and embeds EHS principles in the operations for a clean, safe, and hygienic workplace. It familiarizes employees with the safe working practices and protocols through training.

The Company has a special team that oversees the implementation of rigorous workplace safety protocols across all manufacturing lines, particularly critical given the high-temperature, heavy-machinery operating environment of steel tube production. It ensures zero-tolerance for safety violations and continuous improvement in occupational health standards for its manufacturing workforce, complying with all applicable Environment, Health and Safety (EHS) regulations.

QUALITY CONTROL

Rama Steel Tubes Limited aspires to stand the test of international quality standards across all the manufacturing processes beginning from raw material procurement to the distribution of finished goods. Its automated production facilities with centralised control systems maintain precision while total quality controls monitor and enforce the highest levels of product excellence with safety.

Quality assurance is at the core of RSTLs operational philosophy which enhances its reputation as a trusted manufacturer of steel pipes and tubes across various market destinations including India. The Company has secured ISO 9001:2008 certified quality management systems for its manufacturing facilities at Sahibabad and Khopoli. The certification ensures consistent adherence to stringent product specifications across its all the product lines of ERW black pipes, galvanized tubes, hollow sections, scaffoldings and structural steel products.

The Company conducts raw material inspection for maintaining quality across manufacturing of all the products and tests final products against applicable specifications of Bureau of Indian Standards. It ensures a systematic quality assurance across all production shifts, facilities and product categories aligned to its robust manufacturing scale as a non-negotiable operational imperative. RSTL is committed to delivering consistent value to its customers and stakeholders through high-quality products.

INTERNAL CONTROL SYSTEMS

RSTL has established a comprehensive internal control system aimed at safeguarding its assets and ensuring operational efficiency. The control framework is tailored to the nature, scale and complexity of the Companys operations, facilitating strict regulatory compliance and accurate transaction documentation. The Company has implemented strong internal financial controls to ensure all transactions are properly authorised, recorded and reported. Regular internal audits and reviews are carried out to uphold operational integrity and reinforce the effectiveness of the control environment.

The Audit Committee is tasked with establishing and maintaining effective internal financial controls to ensure smooth and efficient operations. The Committee routinely reviews concerns and material weaknesses identified by the Internal and Statutory Auditors and takes timely and appropriate corrective measures to address and mitigate potential risks.

HUMAN RESOURCES

Rama Steel Tubes Limited recognizes that human resources are a key enabler of its operational performance, innovation and long-term growth. It underscores the development of a skilled, engaged and performance-oriented workforce for supporting its expanding manufacturing and business operations. It undertakes various initiatives for employee learning and development, engagement and capability enhancement and ensures a safe, healthy and supportive workplace for employees.

The Company promotes an inclusive, collaborative, productive, responsible and ever-evolving work culture through its HR policies, empowering employees to contribute effectively to organisations objectives. These policies prioritize talent development and retention, succession planning and alignment of employee capabilities with changing business requirements. Over the years, the Company has built a diverse and respectful workplace that has strengthened organizational resilience, enhanced operational excellence and built the capabilities that contribute to growth.

RSTL has implemented proper health and safety systems across all its manufacturing locations and trained staff on safety management. As of March 31, 2026, the companys employee strength stood at approx. 240 including permanent staff and contractual workers against 250 employees on March 31, 2025, reflecting its continued investment in human resources.

CAUTIONARY STATEMENT

This Statement includes forward-looking statements regarding the Companys business, financial performance, capabilities and future prospects. Any statements concerning plans, intentions, expectations, beliefs, estimates, or predictions—along with similar expressions related to future events—are considered forward-looking in nature. These statements should be interpreted in light of various risks and uncertainties that may cause actual results to differ materially from those presented in the Directors Report and the Management Discussion and Analysis Report. Such risks include, but are not limited to, fluctuations in global oil and steel prices, technological changes and shifts in domestic economic or political conditions. Actual outcomes may vary significantly from those expressed or implied. Key factors that could influence the Companys operations include economic conditions affecting supply, demand and pricing in both domestic and international markets, as well as changes in government regulations, tax laws and other applicable statutes. The Company does not undertake any obligation to update the information contained in these reports.