Remi Edelstahl Tubulars Ltd Management Discussions

(a) Industry Structure and Development:

The appeal of stainless steel extends beyond its role in construction and automotive applications. Its inherent thermal and corrosion resistance make it valuable across diverse industries, including chemicals, oil and gas, petrochemical, thermal power, nuclear power, food processing, pharmaceuticals and defence sector. This widespread applicability ensures that the ongoing industrial development in India will continue to drive demand for stainless steel products. The Indian governments initiatives like Make in India and ambitious infrastructure projects like the power and Smart Cities Mission significantly boost domestic stainless manufacturing. These initiatives are expected to drive the industry further forward. Its clear advantage over carbon steel lies in its superior formability, strength, corrosion resistance, aesthetics, low maintenance requirements and extended product lifespan. These attributes and widening application areas paint a promising picture for the stainless steel market. Further, investments in research and development programmes are supporting the market. These advancements aim to fortify production facilities, increasing efficiency and potentially novel steel pipes and tube applications. Stainless steel pipes and tubes market is experiencing growth due to surging demand across sectors and governments "Make in India" initiative fosters domestic production while expanding requirements from industries like oil and gas, power, and petrochemicals, further stimulating market expansion.

The oil and gas sector holds the largest market share and revenue contribution within the Indian steel pipes and tubes market.

(b) Opportunities and Threats:

The domestic stainless steel demand is expected to register significant growth over the next 3-5 years. India is adopting stainless steel faster because of its higher durability and lower maintenance. The demand for stainless steel is rising across a range of end-use industries, including the automotive, construction, and aerospace sectors, among others, and this is one of the main drivers of market expansion. Due to its great strength, low maintenance requirements, and resistance to corrosion, stainless steel is in higher demand. Automobile parts including gasoline tanks, suspension systems, and exhaust systems, among others, are frequently made of stainless steel. The requirement for lightweight, strong materials that can survive extreme weather conditions is driving the demand for stainless steel in the automotive industry. The Regulatory compliance like BIS compliances are increasingly stringent domestic and global standards. The industry is facing risk of exposure to volatile commodity prices and risk of raw material import restrictions. The monopolistic situation in the market is affecting industry.

(c) Outlook:

The recovery in demand for steel tubulars products will enable the Company to expand its activities. The expected rise in nickel output and consumption might help the Company to improve our operations. Growing Usage of substitutes are gaining popularity, posing threat on the growth in demand for stainless steel products.

The middle east geo political disturbance may have some impact on capex investments and consumption amidst uncertainty. The government is taking steps to increase manufacturing in the country and grow the economy. We are hopeful that the economic environment has improved, customer sentiments are turning positive and the industry will see better growth in coming times. The growth in the power both thermal & nuclear, fertilizer, oil and petroleum sectors, petrochemical, specialty chemicals offer opportunities for the Companys products. However, the pricing volatility of key raw material ingredients (such as nickel) can affect demand and usage patterns of user industry as well as affect the viability of major project investments. Apart from this, installation of LNG terminals can have a substantial contribution in the usage of stainless steel tubular products. The dumping of secondary quality products, imports of S.S. Pipes under FTA continuous to be a threat and can have an adverse impact on demand of locally manufactured products. The Government of Indias Policy of Aatmanirbhar Bharat to promote local manufacturing will help the industry to grow. Government of Indias policies to restrict imports can adversely affect the availability of material in special category, while at the same time creating opportunities to develop more products as import substitutes. Several Companies have expanded/ created additional facilities, this can lead to short term pricing and demand pressures.

(d) Risk and Concerns:

In a highly dynamic business environment, business risks are constantly evolving. As a result, there is significant variation in the emerging risks landscape across businesses. we continuously monitor the internal and external environment to identify potential, emerging risks and their impact on our business. Our risk management framework ensures identification of emerging risks and is flexible enough to accommodate decentralized risk management practices. We evaluate risks that can impact our strategic, operational, compliance and reporting objectives.

Persisting inflation could postpone project execution and demand for the Companys products. Recessionary headwinds across global markets could impact the Companys business prospects. Volatility in steel prices could adversely impact business profitability

The Company also recognizes the risks associated with business and would take adequate measures to address the associated risks and concerns. Some of these factors include competition from multinational Companies, duty free imports by customers against export obligations, our pricing strategy being mainly dependent on import affairs and dependence on imported raw material. The global environment continues to be marked by economic volatility. The uncertainty in the international and domestic markets, Geo political events or availability of raw materials may affect demand. Any significant wave in future can impact recovery, demand, consumer sentiment and delay in private investment. It may also have a further impact on the Indian Rupee, which would make imports more expensive The Company is also having eye on Global supply chain disruption and inflation. The stainless steel industry is cyclical, meaning demand can fluctuate depending on economic conditions. A slowdown in end-user industries like power and oil and gas, automobiles could hurt sales. The stainless steel tube and pipe market is competitive. New entrants or existing players with cost-effective production methods could pressure our market share. Stricter environmental regulations or labour practices could increase our costs or disrupt operations.

(e) Internal Control Systems and their adequacy:

The Company has adequate internal control systems in technical and financial fields.

(f) Financial Performance:

The Financial Performance of the Company has been improved during the year.

(g) Human Resources/ Industrial Relations:

The Company has maintained good industrial relations and has maintained harmonious relations with the employees.

(h) Cautionary Statement:

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be "forward looking statements" within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting global and domestic demand and supply, finished goods prices in the domestic and overseas markets in which the Company operates, raw-materials cost and availability, changes in Government regulations, tax regimes, economic developments within or outside India and other factors such

as litigation and industrial relations. The Company assumes no responsibility to publicly amend, modify or revive any forward looking statements on the basis of any subsequent developments, information or events.

(i) Details of significant changes in Key Financial Ratios:

There is no significant change in key financial ratios as compared to the ratios of previous financial year except following: