Ratnaveer Precision Engineering Ltd Management Discussions

Global Economic Overview

The global economy demonstrated steady growth throughout CY 2024, despite facing geo-political tensions, prolonged periods of contractionary monetary policies driven by inflation and ongoing trade uncertainties. The global economic growth remained at a growth rate of 3.2%¹ in CY2024.

Emerging markets and developing economies (EMDEs) showed steady growth, expanding by 4.2%, surpassing the growth rate of 1.7% in developed economies. This consistent performance is largely due to the proactive monetary measures implemented by central banks worldwide. The US remained a major driver of global expansion, expanding by 2.8%, backed by strong labour market, consumer demand and robust corporate earnings. Economic growth in Europe showed subdued growth rates due to weak consumer demand and continued geopolitical tension. China showed growth rates lower than expected with 4.7% in CY 2024, largely due to a struggling property sector.² Global inflation stood at 5.7% in CY2024, down from 6.7% in CY2023, marking a continued decline as price pressures eased across several sectors. The decline has been largely driven by the stabilisation of energy sources and international food prices, along with improved global supply chains.

Global economic growth is projected at 2.8% for CY 2025 and 3.0% for CY 2026, with uncertainties around geopolitical tensions and trade being balanced by stringent policy measures, adjustments and increasing consumer demand. Growth in advanced economies are expected to be modest. The United States is set to experience a slower growth at 1.8%, while growth in the Euro area is expected to decelerate. Emerging markets are expected to play a crucial role in global expansion, helped by its abundant naturalresources.Asiancountriesareexpectedtomaintain strong economic performance driven by increased capital expenditure and domestic demand. The downward trend of global inflation has incentivised central banks to move to expansionary monetary policies focusing on rate cuts. Global inflation is expected to decline to 4.2% in CY 2025 and further to 3.5% in CY 2026.⁴

Indias Economy

India has continued to display strong economic resilience in FY 2025, solidifying its position as one of the fastest growing major economies, despite a challenging economic landscape. A growth rate of 6.5% for the current year driven⁵ by strong domestic demand, private consumption, public and private investments is expected, showcasing the upward growth trajectory of the fifth largest economy in the world. India is steadily expanding its global footprint, becoming a centre for entrepreneurship, business and innovation. Indias services exports saw an encouraging rise of 12.8% in FY2025. However, gross foreign direct investment (FDI) demonstrated a strong comeback, increasing from $47.2 billion in FY 2024 to $ 55.6 billion during FY 2025.

GDP Growth rate of India over the years:

Indias economy is expected to remain strong supported by macro-economic and financial stability. The positive growth outlook is anchored primarily by the digital revolution, a facilitating regulatory environment supportive of entrepreneurship and developing niche. India is set to continue as one of the fastest growing major economies in the coming years despite the uncertainties around, with a projected growth rate of 6.5% in FY 2026, significantly outpacing global and regional peers. Indias investment growth is expected to remain steady, driven by rising private investments, favourable financing conditions and rapidly expanding middle class population. The changes to the tax slabs in the recent Union Budget have provided relief to individuals, increasing disposable incomes and fuelling consumption. The RBI reduced the repo rate by 25 basis points to 6.25% in February 2025. This was followed by a further cut in April 2025 to 6.00%, aimed at boosting the liquidity in the market. This will lower borrowing costs and encourage lending. In addition, this will also enhance the profitability and financial stability for banks. RBIs prudent monetary measures, such as cash reserve ratios (CRR) cuts, open market operations (OMOs), variable rate reverse repo (VRRR) auctions, are expected to address tight liquidity conditions in the banking system.

India is expected to showcase stable growth driven by strong demand, increasing capital expenditure, rising middle class population and flexible fiscal and monetary policies. The manufacturing sector in India is expected to grow in the forthcoming years, bolstered by government initiatives aimed at making India a global manufacturing hub.

Steel Industry Overview

Global Stainless Steel Industry

Steel production and consumption are seen as indicators of a countrys economic development, given steels essential role as both a raw material and an intermediary product. In CY 2024, global steel demand had declined by approximately 1%, primarily due to reduced demand in China, the worlds largest steel producer and consumer, driven by a slump in the real estate sector. The same trend can be seen in the US, Japan and several European nations, where demand fell by 2-3%. Despite the headwinds in the industry, the demand growth in developing countries such as Brazil and India have helped stabilise global demand. In 2024 demand for steel grew by 3.5%, with further growth of 4.2% in 2025. Demand is estimated to have increased by 11% in India and 5.6% in Brazil.⁷

Outlook

The global market for stainless steel was valued at $120.2 billion in 2024 and is projected to reach $157.4 billion by 2030 at CAGR of 4.6%. This growth is driven by the increasing demand for durable and corrosion-resistant materials across industries like construction, automotive and medical devices. The outlook for the global steel industry is optimistic with a projected growth rate of 1.9% for the demand of steel in developed countries. There is also a growing possibility that the actions and policies of the Government of China may reinvigorate demand in the largest steel producing economy. The key determinants of global steel demand for the upcoming years will be the private consumption and investments, government capital expenditure and rate cuts. Indias robust growth is set to continue with increasing demand for steel from sectors such as packaging, engineering and manufacturing, set to contribute to the overall growth of steel demand. The annual production of steel is anticipated to exceed 300 million tonnes by CY 2030–2031.

Indian Stainless Steel Industry

India continues to be a major contributor to global steel demand growth, ranking as the second largest producer of steel after China in 2024. Steel demand in India is expected to outperform other major economies in FY 2025, driven by a shift towards steel-intensive construction and housing sectors. Government initiatives will also play a major role in increasing demand for steel. Domestic demand for stainless steel has grown at a CAGR of 9% over the last three fiscal years, primarily due to increased investments by the Government of India in railway infrastructure. Growth in demand from other sectors such as consumer goods and process industry are also key contributors to stainless steel demand.⁸ Despite geo-political tensions and tariff uncertainties affecting prices and trade, controlled inflation, quantitative easing and favourable government policies and initiatives are expected to position the steel industry to benefit significantly.

Production and Consumption of Steel in India:

Stainless Steel Sheet Industry⁹

The global market for stainless steel sheets is set to grow to $167.48 billion by 2030, at a CAGR of 5.9%. The demand for stainless steel sheets, one of the most used forms of stainless steel used in manufacturing, is set to see a substantial increase driven by the rising demand from several end-use industries. Indias stainless steel industry is forecasted to reach $31,905.2 million by 2034 due to booming construction and automotive sector. The industry has undergone notable technological advancements that include laser and plasma cutting technologies, that has made the manufacturing process more precise and efficient.

Sector specific application

Stainless Steel with its intrinsic properties finds wide application across a variety of industries. The materials durability and corrosion resistance make it highly suitable across various industries. Its versatility allows it to perform in extreme conditions while also making it a preferred choice in design focused industries and products. Key sectors making use of stainless steel include

Infrastructure

Stainless steel is widely used in infrastructure projects given its strength, durability and resistance to corrosion. Its ability to withstand extreme weather conditions makes it ideal to be used in the construction of bridges, tunnels, elevators and buildings.

Consumer goods

Preferred in kitchen appliances, utensils and electronics given its appearance, resistance to staining and ease of cleaning. Its durability makes it ideal for refrigerators, washing machines and cookware, providing longevity to consumer products.

Automotive

Stainless Steel finds application in automotive sector as it is used for exhaust systems, chassis and body of vehicles. Its ability to withstand high temperatures and mechanical stress makes it crucial for ensuring safety of vehicles.

Defence and Aerospace

Ideal for manufacturing aircraft parts, missile components and engine components due to its durability, heat resistance and ability to endure extreme pressures.

Emerging Trends and Opportunities

The demand for stainless steel sheets continues to rise, driven by increased application in the Architecture Building and Construction (ABC) sector. Both commercial and residential projects are increasingly adopting stainless steel due to its durability, appearance and low maintenance. Additionally, urban infrastructure development and the push for smart cities are further accelerating demand.

Industries such as automotive, medical equipment and renewable energy are also offering robust growth opportunities. In particular, the electric vehicle (EV) sector is adopting stainless steel for battery enclosures and structural components. With sustainability gaining importance, there is also a noticeable shift towards recycled and low carbon stainless steel, creating new avenues for innovation in production.

Outlook

The global stainless steel sheet market is projected to grow driven by rising demand from the automotive and construction sectors. The automotive sector remains one of the major consumers of steel sheets, while the construction industry continues to generate demand through the renovation, restoration and development of commercial and residential spaces. Other macro-economic factors such as population growth, rapid urbanisation, climate change and economic development are expected to drive market expansion. However, fluctuating raw material costs and regional trade policies can affect market dynamics and pricing structures in short to medium terms.

Stainless Steel Finishing Sheet Industry

The stainless steel finishing sheet industry focuses on processes such as polishing, brushing and etching to enhance the surface of stainless steel sheets. These treatments improve the appearance, durability and functionality, widening its applications across sectors. Different surface finishes are tailored for specific applications across industries like medical devices, automotive manufacturing and construction, where both performance and appearance play major factors.

Emerging Trends

Emerging trends in the finishing sheet industry include:

1. Rising Demand for Decorative Finishes – Growth in architecture, interiors, and appliances.

2. Sustainable & Recyclable Materials – Preference for eco-friendly stainless steel.

3. Digital & Laser Etching – Advanced design customization for premium segments.

4. Anti-fingerprint & Coated Surfaces – Enhanced usability in consumer applications.

5. Export Growth – Increasing global demand for high-quality Indian finishing sheets.

6. Automation & Smart Manufacturing – Improving precision and consistency.

Outlook

The outlook for the finishing sheet industry is positive, driven by growing demand from construction, appliances, and automotive sectors. Rising exports, focus on premium finishes, and sustainable material use are key growth drivers. Advancements in surface treatment and customization will further enhance market potential globally

Stainless Steel Washer Industry¹⁰

The stainless steel washers market is a thriving industry valued at $2.5 billion in 2024 and is poised for steady growth, reaching an estimated $3.8 billion by 2033, at a compound annual growth rate (CAGR) of 5.2 % over the forecast period, from 2026 to 2033. The Indian stainless steel market with an estimated generation of $2 billion, is projected to register a CAGR of 6.2%.¹¹ The market has experienced substantial growth due to the thriving manufacturing and industrial sectors, which rely heavily on washers for various applications in machinery and equipment assembly. This market encompasses the manufacturing, distribution and sale of washers specifically made from stainless steel

. These washers play a crucial role in various industrial applications. They function as fasteners, distributing loads, providing structural support and preventing threaded fasteners from loosening.

Emerging Trends

The stainless steel washer industry is seeing some key trends emerging. Some of them are:

Increasing demand in electronics industry

The electronics industry is driving demand for high performance washers with their application in connectors, circuit boards and power electronics. Washers are increasingly used in electronics for their ability to maintain consistent pressure, absorb vibrations and resist corrosion.

Shift toward high performance and specialty grades of SS

A significant trend is the shift towards high performance grades of stainless steel to meet the demanding nature of industries such as aerospace, marine and renewable energy. Specialty grade washers offer enhanced strength, corrosion resistance and temperature tolerance.

Outlook

The outlook for the stainless steel washer industry remains positive, driven by steady growth in key sectors such as construction, automotive, heavy machinery and renewable energy. As infrastructure projects accelerate and industries adopt more durable, corrosion resistant materials, demand for stainless steel washers are expected to rise.

Stainless Steel Pipes and Tubes Industry¹²

The stainless steel tubes and pipes industry plays a key role in supporting infrastructure and industrial development worldwide. These tubes and pipes find wide range of applications across sectors such as oil and gas, power generation, construction, automotive and food processing. As global markets recover and industrial activities gain momentum, the sector reflect a strong growth trajectory. The industry which was valued at around $34.16 billion in CY 2024, is expected to cross $50 billion by CY 2033. With the Indian steel pipes and tubes industry booming, it is set to reach an estimated market size of $37.69 billion by 2030. It is one of the significant verticals of the Indian steel sector, contributing around 8% of Indias steel utilisation.¹³

Emerging Trends

The stainless steel tubes and market industry is experiencing new trends that are shaping its future.

Diversified application in automotive industry

Stainless Steel tubes and pipes are widely used across various applications in the automotive industry, including exhaust systems, fuel lines and cooling systems. Its durability, corrosion resistance and strength make them ideal for vehicle components. The increasing emphasis on for fuel efficiency and emission reduction is expected to further drive demand.

Seamless stainless steel pipes

Demand for seamless stainless steel (SS) pipes has been increasing, driven by its ability to withstand high pressures and elevated temperatures. These pipes are being increasingly used across sectors such as oil and gas, power generation and chemical processing units, as these pipes offer superior strength, corrosion resistance and reliability compared to welded alternatives, making them the preferred choice.

Growth drivers in various sectors

Oil and Gas

The expansion of oil and gas pipeline network will spur demand for SS pipes and tubes as they are preferred due to their corrosion resistance in harsh conditions.

Pharmaceutical Energy

The growing pharmaceutical manufacturing base, as well as the need for sterile, corrosion-free stainless steel tubing in clean room and injectable facilities will drive growth in SS tubes and pipes.

Construction & Infrastructure

The recovery in construction activities is set to impact demand for stainlesssteel in architectural applications.

Capital Goods Industry

Increasing investments in industrial infrastructure, manufacturing automation, and process efficiency are driving demand for durable, corrosion-resistant piping solutions in the capital goods sector.

Outlook

The stainless steel tubes and pipes industry is set for sustained growth, underpinned by the materials inherent durability, corrosion resistance and high performance. As global industrial activity continues to rebound and infrastructure development accelerates, the demand for reliable and high-quality materials is expected to rise. Stainless steel will continue to be the preferred choice across sectors.

Fastener Industry¹⁴

The global fastener industry is projected to be valued at $125.87 billion by 2032, with the Asia Pacific region leading the market. In India, the fastener market is expected to surpass $7,000 million by 2030, growing at a CAGR of 8.4% from 2025 to 2030. This growth is fuelled by rising demand across construction, aerospace, marine and automobile sectors, along with the manufacturing of durable goods. Despite challenges such as raw material cost fluctuations and supply chain disruptions, the industry is set for expansion driven by, increased infrastructure investments and consumer spending.

Emerging Trends

Technological Developments

The market for industrial fasteners is undergoing significant technological advancements aimed at developing lightweight fasteners. There is also rising demand for hybrid fasteners that incorporate moulded plastic components with metal elements, particularly in automotive, aerospace and electronics sectors, to reduce overall weight and improve efficiency.

Use of advanced materials

The use of advanced materials like titanium, composites and lightweight alloys are set to increase given that these materials offer a combination of reduced weight and durability.

Outlook

The fastener industry is poised for steady growth, driven by strong demand from core sectors like construction, automotive, aerospace and industrial machinery. Emerging markets in the Asia-Pacific region are expected to be major growth drivers. The industry is also seeing new opportunities emerge with an increased focus on lightweight and high performance fasteners.

Company Overview

Established in 2002, Ratnaveer Precision Engineering Limited has emerged as one of Indias largest manufacturers and suppliers of stainless steel , with a production capacity of 30,000 metric tons per year. The Company offers a wide product range that includes over 2500 types of stainless-steel washers in different sizes, all in accordance with international standards, along with solar mounting hooks, finishing sheets, stainless steel tubes and pipes. Quality control is integrated throughout the product life cycle, ensuring adherence to the highest quality standard. Headquartered in Gujarat, the Company operates five manufacturing units in India and has a global presence, including Germany, Spain, the Netherlands and the United Kingdom. The Company through its manufacturing units incorporates in-house backward integration which makes it an independent entity in its supply chain. While primarily operating as a B2B business, RPEL also implements forward integration in its tubes and pipes division, enabling direct delivery to the end user.

Customer-Centric Approach

At Ratnaveer, customer satisfaction is at the core of its business strategy. The Company maintains strong, long-term customer relationships and ensures that its products exceed customer expectations, enhancing its competitive edge.

Global Presence

With a well-established footprint in both domestic and international markets, RPELs global presence is a key strength. This extensive reach diversifies revenue streams, enhances market resilience and positions the Company to capitalise on growth opportunities worldwide.

Backward and Forward Integration

RPELs in-house backward integration transforms operational waste into raw materials, reducing dependence on external suppliers and improving efficiency. Forward integration in the pipes and tubes division allows direct access to end users,increasingcontroloverproduct delivery and customer engagement.

Key Strengths

Diverse Product Portfolio

The Companys comprehensive range of stainless steel products serve across various industries. This versatility enables the Company to meet customer needs, adapt to the changing market trends and helps maintain a competitive edge.

High Quality Standard

RPELs high quality standards across processes ensures consistency and precision at every stage of production. This commitment of delivering quality products drives customer satisfaction and strengthens its reputation for reliability.

Strong Financials

RPELs robust financial position provides a solid foundation for sustainable growth. Strong revenues, stable margins and disciplined financial management empowers the Company to pursue growth opportunities while effectively managing risk.

Outlook

Ratnaveer Precision Engineering Limited is poised to continue its impressive growth trajectory, leveraging over 13 years of industry experience. With a strong emphasis on global expansion, the Company has cultivated a diverse customer base spread across 31 countries worldwide, effectively mitigating risks associated with regional market fluctuations. RPELs diversified product portfolio including stainless steel washers, solar mounting hooks, finishing sheets, stainless steel tubes and pipes ensures solutions tailored to a variety of customer needs. This approach ensures the development of innovative products, attracting new clients while enhancing loyalty among existing customers. RPELs continued focus on automation further reduces human errors, thereby improving overall customer satisfaction. Despite headwinds arising out of global uncertainties, RPEL is well equipped and positioned to overcome challenges and to sustain its upward momentum.

Financial Overview

Particulars	FY 2024 - 2025	FY 2023 - 2024	% Change
Revenue from Operations	8918.78	5953.79	49.80
Other Income	40.32	70.21	-42.57
Total Revenue	8959.1	6024	48.72
Expenses
Cost of Material Consumed	7968.53	5667.35	40.60
Purchases of Stock in Trade	-	-	-
Changes in Inventories of Finished Goods and Work-in- Progress	-423.24	-545.29	-22.38
Employee Benefit Expense	102.74	68.14	50.78
Other Expenses	406.84	263.76	54.25
EBITDA	904.23	570.04	58.63
Depreciation	170.92	58.24	193.48
EBIT	733.31	511.8	43.28
Finance Cost	126.78	120.87	4.89
EBT Before Exceptional and Extraordinary Items and Tax	606.53	390.93	55.15
Exceptional Items: Gain on Sale of Fixed Asset	-	-
EBT Before Extraordinary Items and Tax	606.53	390.93	55.15
Tax	138.38	80.43	72.05
PAT	468.15	310.5	50.77
Total Comprehensive Income	-3.3	-0.06	5400.00
Profit after Tax and Adjustment	464.85	310.44	49.74
EPS	9.31	7.61	22.34
Gross Profit Margin	17.24%	10.91%	58.02
EBITDA Margin	10.09%	9.57%	5.43
PAT Margin	5.23%	5.21%	0.38
EPS	9.31	7.61	22.34
Return on Equity	15.03%	16.69%	-9.95
Debt to Equity Ratio	0.44	0.85	-48.24
Current Ratio	1.62	1.75	-7.43

Risks and Mitigation Strategies

Risks	Mitigation Strategies:
Price Volatility: Disruptions in the supply chain can cause rise in prices of nickel, chromium and other alloying elements in steel, impacting the Companys profitability.	Engaged in securing long term contracts with key suppliers
	Sourcing raw materials from multiple suppliers
	Maintenance of inventory levels to act as a buffer against short term price hikes to ensure cost stability and uninterrupted production.
Compliance Risk: Changes in environmental regulations and trade policies affecting imports and exports can disrupt operations. Non-compliance with evolving standards can lead to penalties, operational disruptions and reputational damage.	Active participation in industry advocacy initiatives
	Investments in eco-friendly technologies.
Cyclical Demand Risk: Fluctuations in demand for stainless steel products due to changes in government policies, economic cycles and industry trends can impact sales performance and revenue generation.	RPEL offers a comprehensive product range- from washer and mounting hooks to pipes and tubes
	Expanding global presence helps the Company to stay resilient in times of regional demand fluctuations ensuring business continuity.
Financial Risk: RPEL is exposed to various financial risks such as credit risk and interest rate risk arising due to changes in borrowing cost, liquidity risks from cash flow shortfalls and foreign exchange risk, all of which can affect the day-to -day operations of the Company.	RPEL benefits from a dedicated team of experts who constantly analyse the Companys financial health to ensure informed decision-making
	Proactive are taken measures to monitor and mitigate financial risks thoroughly.
Market Competition Risk: Increased competition from domestic and international competitors can lead to reduced market share, increased pricing pressure and shrinking margins, affecting the profitability of the Company.	RPEL prioritises a customer-first approach, enabling relationships based on trust and reliability
	The Company adheres to the highest levels of quality across processes
	The Company is committed to providing differentiated, value-added stainless steel products to enhance customer utility.
Operational Efficiency Risk: Disruptions caused by equipment failures, supply chain issues and process inefficiencies can impact production timelines and increase costs. This can cause customer dissatisfaction and hinder overall operational performance	Contingency plans are already in place to address potential supply chain disruptions.
	Healthy relationships with multiple suppliers are maintained to ensure reliable supply of raw materials
. Technology Obsolescence Risk: Rapid advancements in manufacturing technologies require constant innovation. Failure to keep up with the trends in innovation can lead to loss of market relevance.	The Company is engaged in continuous investments in the in-house research and development facility
	Continuous of enhancement product designs and optimisation of manufacturing processes

Internal control systems and their adequacy

Internal control systems in the organisation are looked as the key to its effective functioning. The internal regulatory structure is tailored to the Company and its operations. The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use. The Company has a defined strategic structure, with clear reporting and communication lines, authority levels and guidelines for conducting business transactions. The internal Audit Committee reviews all reports as prescribed under the regulations and compliance systems and suggests better internal control systems, policies and procedures as and when required. Based on the assessment and analysis of these reports, recommendations for improvements are provided for smooth operation.

The Company is committed to adhering to all regulations, guidelines and procedures and are willing to implement further measures as and when required. .

Human Resources

RPEL acknowledges human resource as the key driving force behind its success The Company undertakes several initiatives to enhance the employee experience, bringing about a culture of learning and development and promoting diversity and inclusion across the organisation. The objective of the Company is to motivate and encourage a future ready workforce, one that is both adaptive and agile. The Company believes that investing in human capital is crucial for achieving long-term sustainable growth and maintaining a competitive edge in the industry. As of March 31, 2025, the Company has a working force of 318 individuals. Employee safety remains a top priority at RPEL. Regular safety trainings and standard safety protocols are employed to ensure safety and well-being of employees. Through progressive HR policies and initiatives, the Company ensures a workplace culture that supports the development and well-being of employees, both professionally and personally.

Information Technology

RPEL recognises the importance of Information Technology in driving growth and operational excellence. The Company continues to invest in IT infrastructure to further enhance efficiency, reduce operational costs and support innovation and digital transformation within its segments. This strategic focus positions the Company well for the future, enabling it to capitalise on emerging opportunities and drive sustained growth.

Cautionary Statement

Certain statements in the Management Discussion and Analysis section describing the Companys goals, future expectations and projections maybe forward-looking statements in accordance with the relevant laws and regulations. While based on assumptions with available information, the actual results may differ materially from expectations due to factors beyond the Companys influence. Factors such as changes in the fiscal policy, monetary policy and the political environment in India, as well as the geo-political relations and trade tariffs can affect the Companys operations. The Company assumes no obligation to revise or update forward-looking statements that may arise due to future events, new information, new developments, or otherwise.