Ratnaveer Precision Engineering Ltd Management Discussions

Economic Overview

Global Economy

In CY 2025, the global economy demonstrated resilient growth despite geopolitical tensions and moderating global demand. Global GDP growth stood at 3.4% during the year, supported by technology-led investments, accommodative financial conditions and gradual improvement in business operations across major economies. Inflationary pressures continued to moderate during the year, aided by stabilising energy and food prices along with gradual normalisation of global supply chains. While global trade and investment activity showed signs of recovery, uncertainties arising from geopolitical developments, trade realignments and volatile commodity markets continued to weigh on overall economic momentum.

The recovery remained uneven across regions, with Emerging Markets and Developing Economies continuing to outperform advanced economies. EMDES expanded by 4.2% supported by domestic consumption, infrastructure investments and proactive monetary interventions by central banks, while developed economies recorded comparatively moderate growth of 1.7%. The United States remained a key contributor to global expansion, growing by 2.8% backed by resilient consumer spending, a strong labour market and healthy corporate earnings.2

Outlook

The global economy is projected to grow by 3.1% in 2026 and 3.2% in 2027, with emerging markets expected to remain key drivers of global expansion. However, elevated energy prices, supply-side constraints and ongoing geopolitical tensions are likely to continue exerting pressure on inflation and global trade dynamics. Global headline inflation is estimated at 4.4% for 2026, while growth across advanced economies is expected to remain moderate amid evolving trade and financial conditions.

The outlook remains sensitive to geopolitical developments, trade fragmentation and commodity price volatility, which may continue to impact investment sentiment and economic stability. At the same time, technology-led investments, productivity improvements and easing trade restrictions are expected to support long-term growth momentum.3

[Chart: Overview of World Economic Outlook Projections (GDP Growth %)]

Source - IMF World Economic Outlook, April 2026

Indian Economy

India continued to demonstrate strong economic resilience in FY 2025-26, supported by robust domestic demand, strengthening manufacturing activity and sustained momentum across key sectors of the economy. Real GDP growth for FY 2025-26 is estimated at 7.7% higher than the 7.1% recorded in FY 2024-25, while nominal GDP is projected to grow by 8.6% during the year. The manufacturing sector remained a key contributor to economic expansion, recording double-digit growth, while the secondary and tertiary sectors also witnessed strong performance with growth exceeding 9.0%.4

Government-led capital expenditure continued to play a pivotal role in sustaining Indias economic momentum during FY 2025-26, with significant investments directed towards roads, railways, logistics, urban infrastructure, renewable energy and industrial development. The Governments capital outlay increased nearly 4.2 times from 2.63 lakh crore in FY 2017-18 to 11.21 lakh crore in FY 2025-26, while public capital expenditure for FY 2026-27 has been budgeted at 12.2 lakh crore, reflecting sustained emphasis on infrastructure-led growth and private investment creation.

Simultaneously, domestic manufacturing activity remained resilient, supported by initiatives such as Make in India, Production Linked Incentive (PLI) schemes and the National Logistics Policy. Improving industrial activity, higher capacity utilisation and increasing investments across automobiles, engineering goods, electronics and capital goods continued to strengthen Indias position as a preferred global manufacturing destination.5

Outlook

Indias economic outlook remains favourable, supported by strong domestic demand, sustained infrastructure investments, improving private sector capital expenditure and continued policy support towards manufacturing and industrial development. Real GDP growth for FY2026-27 is projected at 6.6%, reflecting the resilience of the Indian economy despite global geopolitical uncertainties, trade disruptions and financial market volatility. The Governments continued focus on capital expenditure, with FY2026-27 capital outlay budgeted at 12.22 lakh crore and effective capital expenditure estimated at 17.15 lakh crore, is expected to further support industrial growth, employment generation and long-term economic expansion. Continued investments across infrastructure, localisation initiatives, supply chain diversification and ease of doing business are also expected to strengthen Indias position as a preferred global manufacturing and investment destination over the medium to long term.

[Chart: Annual Growth rates (in %)6]

P – Projected

Source: MOSPI, RBI*

Industry Overview

Global Stainless Steel Industry

The global stainless steel industry demonstrated steady growth during 2025, supported by increasing demand from construction, automotive, engineering and infrastructure sectors. The global stainless steel market was valued at USD 225.13 billion in 2025 and is projected to grow to USD 236.71 billion in 2026, reflecting continued momentum across industrial and infrastructure activities worldwide. Asia produced 55.3 million tonnes, an increase of 2.7% compared to 2024. The European Union produced 5.7 million tonnes, which is a decrease of 1.9%. The United States produced 2.1 million tonnes, an increase of 7.6%. Other countries produced 1.1 million tonnes, which is a decrease of 11.3%. Demand growth was driven by stainless steels corrosion resistance, durability, recyclability and growing usage across modern infrastructure, transportation and manufacturing applications. Rising urbanisation, infrastructure investments, technological advancements and increasing focus on sustainable and recyclable materials also continued to support industry expansion globally.

Regional shares of stainless steel meltshop production - 2025

World total stainless steel melt shop production: 64.2 million tonnes

[Chart: Regional shares of stainless steel meltshop production - 2025]

Regionally, Asia Pacific remained the dominant market, accounting for nearly 73.6% of the global stainless steel market in 2025, supported by rapid infrastructure development, increasing steel production and strong construction activity across China and India. China continued to lead global demand backed by large-scale investments in construction and infrastructure under initiatives such as the Belt and Road Initiative, while India witnessed growing demand supported by infrastructure creation, manufacturing growth and urbanisation. Developed economies such as the United States, Europe and Japan also witnessed stable demand trends driven by automotive, electronics and engineering applications. However, elevated raw material costs, global trade uncertainties, supply chain disruptions and increasing sustainability requirements continued to influence pricing dynamics and investment sentiment across the global stainless steel industry.

Outlook

The global stainless steel industry outlook remains positive, supported by rising infrastructure investments, increasing urbanisation and growing demand from automotive, construction, engineering and electronics sectors. The global stainless steel market is projected to grow from USD 236.71 billion in 2026 to USD 353.48 billion by 2034, registering a CAGR of 5.0% during the forecast period. Continued investments in transportation, renewable energy, industrial infrastructure and sustainable construction are expected to drive long-term demand for stainless steel globally. Additionally, increasing focus on recyclable and low-carbon materials is expected to further support adoption across industries.

Asia Pacific is expected to continue leading global demand, supported by strong infrastructure and manufacturing activity across China, India and other developing economies. Growth in developed economies is also expected to be supported by rising adoption of stainless steel in advanced automotive, engineering and energy applications.

Indian Stainless Steel Industry

Indias stainless steel industry continued to demonstrate strong growth momentum during FY2025-26, supported by rising infrastructure development, expanding manufacturing activity and increasing urbanisation across the country. Demand for stainless steel remained robust across key sectors such as railways, metros, airports, construction, transportation, process industries and consumer durables, driven by the metals durability, corrosion resistance and recyclability. India also continued to maintain its position as one of the fastest-growing stainless steel markets globally, supported by increasing investments in infrastructure, logistics and industrial development. The broader steel sector also witnessed strong performance during the year, creating a favourable environment for stainless steel demand growth.

Government Initiatives

Government initiatives such as Make in India, the Production Linked Incentive (PLI) Scheme, infrastructure-focused capital expenditure and localisation efforts continued to strengthen domestic manufacturing and support long-term demand for value-added steel products, including stainless steel. The Government of India launched the third round of the Production Linked Incentive (PLI 1.2) Scheme for Specialty Steel on November 4, 2025, covering stainless steel flat and long products among 22 specialty steel categories, with incentive support ranging from 4% to 15% to promote advanced domestic steel manufacturing. So far, the PLI Scheme has attracted a committed investment of ? 43,874 crore, with over ? 22,000 crore already invested and over 13,000 jobs created under the first two rounds.

[Chart: Stainless Steel Exports and Imports]

Source: Ministry of Steel

Outlook

The outlook for Indias stainless steel industry remains positive, with demand expected to grow by 7-8% annually over the next few years, supported by infrastructure expansion, manufacturing growth, urbanisation and rising investments across railways, transportation and construction sectors. Government-led initiatives such as Make in India, Atmanirbhar Bharat and continued capital expenditure towards infrastructure are expected to further strengthen domestic demand and manufacturing capabilities. However, the industry may continue to remain exposed to risks arising from raw material price volatility, import competition and global trade uncertainties.

Stainless Steel Sheet Industry

The global stainless steel sheet market continued to witness steady growth during FY2025-26, driven by rising demand from construction, infrastructure, automotive and industrial manufacturing sectors. The global stainless steel sheet market was valued at USD 126.09 billion in 2025 and is projected to grow to USD 211.22 billion by 2034, registering a CAGR of 5.9% during the forecast period.

Increasing demand for corrosion-resistant, durable and precision-engineered materials across end-use industries, along with growing infrastructure development and manufacturing activity across Asia Pacific, continued to support industry growth. Technological advancements in processing and finishing technologies have further enhanced manufacturing efficiency and product quality across the stainless steel sheet value chain.

Sector-wise performance

Infrastructure and Urban Development

Stainless steel sheets continue to gain importance across modern infrastructure and urban development projects due to their high strength, corrosion resistance and low maintenance requirements. Increasing investments in airports, metro rail networks, commercial buildings, smart cities and transportation infrastructure are driving the adoption of stainless-steel sheets across structural and architectural applications globally.

Industrial Manufacturing and Processing

The growing expansion of industrial manufacturing activities has significantly increased the demand for stainless steel sheets across process industries and engineering applications. Their ability to withstand harsh operating conditions, temperature variations and chemical exposure makes them widely preferred in industrial equipment, machinery, fabrication and heavy engineering applications.

Mobility and Transportation Solutions

Stainless steel sheets are increasingly being utilised across automotive and transportation applications owing to their durability, heat resistance and structural reliability. Rising automobile production, expansion of electric mobility and growing focus on lightweight yet durable materials continue to support their usage in vehicle components, exhaust systems and transportation equipment.

Lifestyle and Consumer Applications

The demand for stainless steel sheets in lifestyle and consumer-focused applications continues to rise due to their aesthetic appeal, hygienic properties and long product life. Increasing consumer preference for premium appliances, modular kitchens, modern interiors and durable household products has supported growing adoption across appliances, kitchenware and decorative applications.

Stainless Steel Finishing Sheet Industry

The stainless steel finishing sheet industry focuses on enhancing the surface quality of stainless steel sheets through processes such as polishing, brushing, embossing, coating and etching. These value-added treatments improve corrosion resistance, aesthetics, durability and functionality, enabling broader usage across architecture, elevators, appliances, automotive, healthcare and industrial applications. Increasing demand for premium interiors, hygienic surfaces and corrosion-resistant materials continues to drive the industrys expansion.

Stainless Steel Washer Industry

The stainless steel washer industry serves as a critical support segment within the industrial fastening ecosystem, enabling operational reliability across sectors such as transportation, heavy engineering, renewable energy, electronics and infrastructure. Stainless steel washers are increasingly preferred for their strength, dimensional stability and resistance to corrosion, particularly in applications exposed to moisture, heat, vibration and chemical environments. Their ability to enhance fastening performance while extending equipment life has made them indispensable across modern industrial systems.

Indias growing industrial base, expansion in manufacturing activities and rising investments in infrastructure development are contributing to sustained demand for stainless steel fastening components.

Stainless steel pipes and tubes industry

The stainless steel pipes and tubes industry plays a vital role in supporting critical sectors such as oil and gas, construction, chemicals, power, infrastructure, automotive and water treatment. Stainless steel pipes and tubes are widely preferred for their corrosion resistance, high strength, temperature tolerance and long operational life, making them suitable for applications operating under demanding industrial environments. Their increasing adoption across process industries, fluid transportation systems and structural applications continues to support industry growth globally.

Emerging trends and opportunities
Opportunities	Description
Infrastructure Expansion	Rising investments in infrastructure, smart cities, metro rail networks, airports and commercial construction projects are expected to create significant demand for stainless steel sheets globally. Increasing preference for durable, corrosion-resistant and low-maintenance materials across modern infrastructure continues to support long-term growth opportunities for the industry.
Rising Automotive and EV Adoption	The increasing shift towards electric vehicles and advanced mobility solutions is creating new growth avenues for stainless steel sheet manufacturers. Demand for lightweight, heat-resistant and high-strength materials across automotive components, exhaust systems and EV applications is expected to support sustained market expansion.
Growth in Manufacturing and Industrialisation	Rapid industrialisation and expanding manufacturing activity across emerging economies are driving increased usage of stainless steel sheets across engineering, fabrication and industrial processing applications. Growing investments in industrial equipment, heavy engineering and process industries are expected to further strengthen demand for value-added stainless-steel products.
Increasing Preference for Sustainable Materials	Growing global focus on sustainability and recyclable materials is expected to accelerate the adoption of stainless steel sheets across industries. Stainless steels long lifecycle, recyclability and energy-efficient applications position it as a preferred material in green buildings, renewable energy infrastructure and sustainable industrial projects.

Company Overview

Established in 2002, Ratnaver Precision Engineering Limited (RPEL) is one of Indias leading manufacturers and exporters of stainless-steel products, offering a diversified portfolio comprising washers, precision fasteners, finishing sheets, tubes and pipes and sheet metal components. The Company operates five fully integrated manufacturing facilities in Gujarat with an annual processing capacity of approximately 46,668 MT and exports its products to 31 countries globally through a strong distribution network.

RPEL is recognised as Indias No.1 exporter of stainless-steel washers, offering over 3,300 washer SKU variants and 3,500+ fastener SKUs catering to diverse industrial applications. Backed by strong backward and forward integration, global quality certifications and export-oriented operations, the Company continues to strengthen its position across the stainless-steel value chain while strategically expanding into electronics-grade materials.

Key Strengths

Strengths	Description
Extensive Global Presence and Distribution Network	Ratnaver has established a strong international footprint across 31 countries, supported by 219 clients and 89 global distribution partners. Its diversified export presence across Europe, North America, Asia-Pacific and the Middle East enhances market reach, customer diversification and export competitiveness.
Integrated Manufacturing Infrastructure	The Company operates five purpose-built manufacturing facilities in Gujarat under a fully integrated ecosystem with strong backward and forward integration capabilities. This integrated operating model strengthens supply chain control, operational efficiency and manufacturing scalability across the stainless-steel value chain.
Diversified Product Portfolio	Ratnaver has developed a broad product portfolio spanning stainless-steel washers, fasteners, tubes and pipes, finishing sheets and sheet metal components. Its multi-vertical presence enables the Company to cater to diverse industrial applications while strengthening revenue diversification and cross-segment opportunities.
Strong Quality and Certification Standards	The Company maintains high manufacturing and quality standards supported by certifications including ISO 9001, ISO 14001, ISO 45001 and CE certification. Its focus on quality assurance, automated manufacturing and consistent operational excellence is further reinforced through uninterrupted EEPC Star Performer recognition.

Outlook

Ratnaveers future value creation is anchored on a balanced, dual-track growth strategy. Sustaining the high-growth trajectory of its core stainless steel business through incremental capacity investments and a strategic European acquisition aimed at securing global Fortune 500 automotive OEM relationships, and executing a transformational market entry into the electronics sector via Indias first integrated Copper Clad Laminate (CCL) facility. This pioneering CCL venture positions the company as a structural import-substitution play in a heavily import-dependent market, using a phased commissioning strategy backed by an international technology partner to mitigate execution risks. Enhanced by substantial central and state capital subsidies, interest exemptions, and strong demand pull from domestic PCB manufacturers, this expansion is set to materially alter the enterprises scale and margin profile over a multi-year horizon. Moving forward, management remains focused on driving this next phase of growth while actively mitigating key operational risks, specifically surrounding initial commissioning timelines, single-partner technology dependencies, and the stabilization of working capital cycles following recent credit extensions for new product launches.

Financial Overview

Particulars	FY 2025-26	FY 2024-25	(Rs. In Crore) YoY %
Revenue	1068.74	891.88	19.83%
Other Income	9.67	4.03	139.95%
Total Income	1078.41	895.91	20.37%
Total Expenditure	1002.43	835.26	20.01%
EBITDA	121.88	90.42	34.79%
EBITDA Margin	11.40%	10.13%	137 bps
Depreciation	25.41	17.09	48.68%
Interest Cost	20.49	12.68	61.59%
PBT	75.98	60.65	25.28%
Tax	11.67	13.88	-15.92%
PAT	64.31	46.77	37.50%
PAT Margin	5.96%	5.22%	74 bps

Interpretation

EBITDA increased by 34.79% and EBITDA Margin improved by 127 basis points primarily due to higher sales volumes, improved product mix, better capacity utilization, and effective cost optimization initiatives. The margin expansion was further supported by improved operational efficiencies, better absorption of fixed costs, and prudent management of raw material and other operating expenses.

PBT increased by 25.28% (Profit Before Tax (PBT) increased by 25.28% primarily due to higher operating profitability driven by growth in revenue, improved EBITDA margins, enhanced operational efficiencies, and effective cost management. The increase in profitability was partially offset by finance costs and depreciation, resulting in a strong overall growth in PBT.)

PAT and PAT Margin increased by 37.50% and 74 bps respectively (due to higher operating profitability, improved EBITDA margins, enhanced operational efficiencies, and effective cost management. Additionally, a favorable tax impact and better absorption of fixed costs contributed to the growth in net profitability and margin expansion.)

Ratio	FY 2025-26	FY 2024-25	% Change
Gross Profit Margin	12.89%	11.59%	130 bps
EBITDA Margin	11.40%	10.13%	127 bps
PAT Margin	5.96%	5.23%	74 bps
EPS (in \u20b9 )	11.11	9.31	19.33%
Return on Equity	12.36%	15.00%	(-)17.57%
Debt to Equity Ratio	0.50	0.53	4.85%
Current Ratio	1.76	1.51	(-)16.71%

Interpretation

Gross Profit Margin: Gross Profit Margin improved by 130 basis points from 11.59% to 12.89%, reflecting better product realization, improved product mix, and effective management of raw material costs.

EBITDA Margin: EBITDA Margin increased by 127 basis points from 10.13% to 11.40%, driven by enhanced operational efficiencies, improved capacity utilization, and effective cost control measures.

PAT Margin: PAT Margin improved by 74 basis points from 5.23% to 5.96%, primarily on account of higher operating profitability and efficient management of finance and tax costs.

Earnings Per Share (EPS): EPS increased by 19.33% from 19.31 to 11.11, reflecting growth in net profit attributable to equity shareholders.

Return on Equity (ROE): ROE decreased by 17.57% from 15.00% to 12.36%, mainly due to growth in shareholders equity outpacing the increase in net profit during the year.

Debt-to-Equity Ratio: Debt-to-Equity Ratio improved from 0.53 to 0.50, indicating a stronger capital structure supported by lower reliance on debt financing.

Current Ratio: Current Ratio improved from 1.51 to 1.76, reflecting better liquidity position and efficient working capital management.

Risk and Mitigation strategies

Risk	Mitigation Strategy
Raw Material Price Volatility Raw Material Price VolatilityThe steel industry continues to remain exposed to volatility in raw material prices, particularly coking coal and iron ore, driven by global supply-demand imbalances and geopolitical uncertainties. Any sharp fluctuations in input costs may impact cost structures, profitability and pricing flexibility for stainless-steel manufacturers.	Securing multi-year agreements with key vendors to lock in favourable pricing and guarantee material availability. Reducing supply chain vulnerability by dual- or multi-sourcing critical raw materials. Optimizing safety stock levels to absorb sudden inflationary shocks and maintain seamless operational continuity.
Export Market and Geopolitical Risks Export Market and Geopolitical RisksThe steel sector remains vulnerable to geopolitical tensions, trade restrictions and shifting global trade policies, which may disrupt export demand and supply chains. Given Ratnavers strong international presence, prolonged uncertainty in key export markets can impact demand visibility and operational stability.	RPEL leverages a robust and diversified product suite, ranging from precision components like washers and mounting hooks to structural pipes and tubes, catering to varied industrial applications. Active expansion into international markets serves as a natural hedge against localized economic downturns, stabilizing revenue streams and ensuring long-term business continuity amidst regional demand fluctuations.
Sustainability and Green Steel Compliance Increasing global focus on decarbonisation and implementation of mechanisms such as the EU Carbon Border Adjustment Mechanism (CBAM) may increase compliance requirements and operational costs for steel exporters.	Accelerating investments in eco-friendly and low-carbon technologies to optimize operational efficiency, reduce environmental impact, and future-proof our manufacturing capabilities.
Global Overcapacity Risk Global Overcapacity RiskGlobal steel markets continue to witness significant capacity additions, particularly across India, ASEAN countries and the Middle East, which may intensify competitive pressures and impact global pricing dynamics. Excess supply conditions could lead to aggressive pricing strategies and margin pressure across export-oriented steel businesses.	Cultivating enduring partnerships built on trust and reliability by maintaining a steadfast commitment to a customer-first philosophy. Adhering to stringent, world-class quality standards across all manufacturing and operational processes to ensure total product compliance and operational excellence. Focusing on the delivery of high-margin, value-added stainless-steel products designed to maximize customer utility and address evolving market demands.

Internal control systems and their adequacy

Internal control systems and their adequacyThe Company has an adequate system of internal controls to ensure that all assets are safeguarded and protected against any unauthorised use or loss. The internal control framework is aligned with the nature and scale of the Companys operations and is supported by clearly defined reporting lines, authority levels and operational guidelines for conducting business transactions.

The Internal Audit Committee periodically reviews audit reports, compliance systems and internal control processes and recommends improvements in policies and procedures, wherever necessary, to ensure smooth functioning of operations. The Company remains committed to complying with all applicable regulations, guidelines and procedures and continues to strengthen its internal control systems as required.

Human Resource

RPEL recognises human capital as a key contributor to its growth and success. The Company continues to undertake various initiatives focused on employee development, learning and workplace inclusion, with the objective of building an adaptive, skilled and future-ready workforce. The Company believes that investing in its people remains essential for sustaining long-term growth and strengthening its competitive position. As on March 31, 2026, the Company had over 800+ employees across its operations.

Employee safety and well-being remain key priorities for the Company. Regular safety training programmes and standard safety practices are implemented across facilities to ensure a safe and healthy working environment. Through its employee-focused policies and initiatives, the Company continues to foster a workplace culture that supports both professional and personal development of its workforce.

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. 53 01 Corporate Overview 02 Statutory Report 03 Financial Statements

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.