RHI Magnesita India Ltd Management Discussions

GLOBAL ECONOMIC LANDSCAPE

The global economy demonstrated resilience during FY 2025-26 despite persistent geopolitical tensions, trade uncertainties, and uneven regional growth dynamics. According to the International Monetary Fund (IMF), global GDP growth is projected at approximately 3.1% in the year 2026, with a modest improvement to 3.2% in the year 2027. Advanced economies are expected to witness relatively slower growth of around 1.8%, impacted by weak industrial activity, elevated borrowing costs, and geopolitical uncertainties. In contrast, emerging markets and developing economies are projected to remain the primary drivers of global growth at nearly 3.9%, led by India and emerging Asia

Global inflationary pressures continued to ease during FY 202526 as supply chain conditions normalized and the impact of prior monetary tightening measures started reflecting across economies. However, inflation remained vulnerable to commodity and energy price volatility arising from geopolitical developments, particularly disruptions in the Middle East. Global inflation is expected to gradually moderate toward the 3%-4% range over the medium term, although regional trends remained divergent

Against this backdrop, global central banks adopted a more balanced policy stance during FY 2025-26. The US Federal Reserve maintained a cautious easing trajectory with expectations of limited rate cuts, while the European Central Bank largely maintained a measured approach amid weak growth and inflationary concerns. Overall, monetary policy globally moved gradually toward a more neutral and accommodative stance compared to the aggressive tightening cycle witnessed in previous years.

Overall, the global economy in FY 2025-26 operated in a moderated yet stable growth environment, supported by emerging market resilience, easing inflationary pressures, and gradual monetary policy normalization, while continuing to face risks from geopolitical volatility, trade disruptions, and uneven regional recovery trends.

Sources:

https://www.efginternational.com/insights/2026/imf_global_

economy_steady_and_divergent_forces.html

https://www.jpmorgan.com/insights/global-research/economy/

global-inflation-forecast

https://www.imf.org/en/publications/weo

https://www.imf.org/en/publications/weo/issues/2026/04/14/

world-economic-outlook-april-2026

https://www.imf.org/en/publications/weo/issues/2025/07/29/

world-economic-outlook-update-july-2025

Global Steel Industry

The global steel industry remained under pressure during FY 2025-26 amid persistent overcapacity, weak steel prices, and rising trade protectionism. Global steelmaking capacity increased to an estimated 2.6 billion metric tons by the end of 2025-the fastest expansion since 2009 - while surplus capacity reached approximately 680 million metric tons, as per the OECD, reflecting continued supply-demand imbalance.

China continued to dominate global steel exports, leading to elevated pricing pressure and an increase in antidumping duties and safeguard measures across several markets. Weak demand across certain developed economies further impacted global steel profitability and market stability. Despite global headwinds, Asia remained comparatively resilient, supported by infrastructure spending, industrial expansion, urbanisation, and supply chain diversification. India continued to witness strong steel demand driven by government-led infrastructure development and manufacturing growth.

Further, planned steelmaking capacity additions across Asia and the Middle East are expected to add nearly 109 million metric tons by 2028, indicating continued long-term investment momentum in the region.

Sources:

https://www.oecd.org/en/about/news/speech-statements/2025/11/98th-

session-of-the-steel-committee-statement-by-the-vice-chairs.html

https://www.reuters.com/markets/commodities/china-passes-

steel-output-peak-developing-asia-still-climbing-2026-01-28/

Global Refractory Market

The global refractory industry continued to witness steady growth during FY 2025-26, supported by demand from steel, cement, glass, non-ferrous metals, petrochemicals, and infrastructure sectors. According to industry estimates, the global refractories market was valued at approximately USD 38-48 billion in the year 2025 and is projected to continue growing steadily, supported by rising demand from the steel, cement, glass, and non-ferrous industries. Long-term forecasts estimate the market could reach approximately USD 5796 billion by 2032-2034, reflecting continued structural growth in industrial and infrastructure activity.

Global refractory volumes increased from approximately 57 million tons in the year 2025 to nearly 59.6 million tons in 2026 and are projected to reach around 72 million tons by 2031, growing at a CAGR of approximately 3.9%-4.0%. Asia-Pacific continued to dominate the global market with an estimated 48.0%-73.0% market share, driven by steel capacity additions, industrial growth,

and infrastructure investments across China, India, and Southeast Asia. India remained one of the fastest-growing markets, supported by strong steel demand, urbanisation, and government-led infrastructure development.

The industry also witnessed increasing investments in sustainable and low-carbon refractory technologies, recycling initiatives, energy efficiency, and digital optimisation solutions, including AI and advanced analytics, aimed at improving operational efficiency and reducing emissions.

Sources:

https://www.mordorintelligence.com/industry-reports/refractories-market

https://www.fortunebusinessinsights.com/refractories-market-103287

INDIAN MACROECONOMIC ENVIRONMENT

Indias economy demonstrated sustained resilience during FY 2025-26, with real GDP projected to expand by approximately 7.6%, underpinned by robust domestic demand, continued capital investments, structural policy reforms, and broad-based macroeconomic stability. Growth remained broad-based across key sectors, with manufacturing serving as a significant driver of economic expansion alongside meaningful contributions from the secondary and tertiary sectors.

As a predominantly consumption and investment-led economy, India derives approximately 70% of its economic activity from domestic demand. Continued momentum in infrastructure development and industrial expansion has reinforced demand across core industries, including the refractory sector, which maintains close linkages with steel, cement, non-ferrous metals, and other high-temperature process industries.

Indias Goods and Services Tax ( GST ) collections continued to reflect the underlying strength of economic activity and improved compliance standards. Annual net GST collections reached 19.35 lakh crore in FY 2025-26, representing a year-on-year increase of 7.1%, affirming the economys structural consolidation.

On the monetary policy front, inflationary pressures moderated considerably during the year. The Reserve Bank of India (RBI) revised its FY 2025-26 inflation projection downward to approximately 2.6% and, in response to the improving price environment, reduced the repo rate by 25 basis points to approximately 5.25%, while maintaining a flexible policy stance to navigate evolving global and domestic conditions.

Notwithstanding the constructive macroeconomic backdrop, FY 2025-26 presented a set of notable headwinds. Geopolitical tensions in West Asia, tariff-related uncertainties in global trade, elevated crude oil and energy prices, and intermittent supply chain disruptions collectively exerted pressure on logistics costs, raw material availability, and cross-border trade flows.

Despite these challenges, India retained its position as the fastest- growing major economy in the world, a distinction that reflects both the depth of its domestic demand fundamentals and the resilience of its policy framework. The Governments continued emphasis on infrastructure investment, manufacturing competitiveness, and industrial capacity expansion is expected to sustain favourable longterm growth conditions for the refractory industry and the broader industrial ecosystem.

Sources:

https://www.ibef.org/economy/indian-economy-overview

https://www.ibef.org/news/india-projects-7-6-gdp-growth-for- fy26-nominal-growth-at-8-6

INDIAN STEEL INDUSTRY

India Continues to Strengthen its Steel Leadership

India continued to strengthen its position as the worlds second- largest crude steel producer, supported by strong infrastructure spending, urbanisation, industrialisation, and sustained government capital expenditure. Over the last decade, Indias steel sector has expanded significantly, with crude steel production increasing by nearly 75% since 2008, while domestic steel demand has grown by almost 80%. During FY 2024-25, India produced 151.1 Million Tonnes (MT) of crude steel and 145.3 MT of finished steel. In FY 2025-26 (April,2025-February,2026), crude steel production

stood at 153.6MT, while finished steel production reached 146.8 MT, reflecting continued healthy production momentum across the sector.

Capacity Expansion and Investment Momentum

- Indias steelmaking capacity increased to approximately 220 MT during FY 2025-26 and remains on track towards the National Steel Policy target of 300 MT capacity by 2030-31.

- Secondary steel producers, including MSMEs, continued to play

an important role in the industry, accounting for nearly 47.0% of crude steel capacity during FY 2024-25.

- To achieve the targeted 300 MT steelmaking capacity by 203031, cumulative investments of approximately US$ 156 billion are expected over the coming years.

- The sector continues to witness strong investment momentum across both greenfield and brownfield expansion projects.

Key Developments During the Year

- AM/NS India secured land in Andhra Pradesh for a proposed integrated steel plant with planned crude steel capacity of approximately 7 MTPA.

- Several steel and related companies are also expected to raise capital through IPOs and market issuances to support future capacity expansion and modernisation plans.

Demand Drivers and Trade Position

The Indian steel sector continues to benefit from strong demand

across infrastructure, construction, housing, railways, renewable energy, automobiles, and industrial manufacturing sectors. India also continues to possess significant iron ore reserves, supporting long-term raw material security and future capacity expansion In FY 2025-26 (April,2025-February, 2026), steel trade turned favorable, with India emerging as a net exporter with a surplus of 0.40 MT, compared with a net import position in FY 2024-25. Key export products included HR Coil/Strip, Pipes, GP/GC Sheets and Coils, Bars & Rods, and CR Coil/Sheets.

Growing Focus on Green Steel

Indias steel industry is witnessing increasing momentum towards green steel and decarbonisation initiatives. Green steel demand in India is expected to rise significantly over the coming decades, supported by increasing sustainability focus across infrastructure, construction, and automotive sectors. This transition is expected to create long-term opportunities for advanced, sustainable, and technology-driven refractory solutions.

Key Government Initiatives Supporting the Indian Steel Industry

Policy / Initiative	Key Highlights	Expected Impact
National Steel Policy 2017	Targets 300 MT steelmaking capacity and 160 kg per capita steel consumption by 2030-31.	Supports long-term industry growth, capacity expansion, and global competitiveness.
PLI Scheme for Specialty Steel (Approved in 2021)	Expected to attract investments of approximately 40,000 crore and increase specialty steel production capacity to 42 MT by FY 2026-27.	Accelerates sector growth, technology adoption, and modernization.
PLI Scheme 1.1	Outlay of 6,322 crore to boost specialty steel production and improve energy efficiency.	Reduces import dependency and supports sustainable capacity expansion.
PLI Scheme 1.2	Offers incentives ranging from 4.0% to 15.0% on incremental sales of advanced specialty steel products.	Encourages investments in high-value and technologically advanced steel manufacturing.
Import Protection Measures	DGTR recommended a provisional safeguard duty of 12.0% on steel imports.	Protects domestic producers from import surges and enhances competitiveness.

Source : https://www.ibef.org/industry/steel

INDIAN CEMENT INDUSTRY

The Indian cement industry demonstrated resilient growth during FY 2025-26, supported by strong infrastructure spending, housing demand recovery, and continued government focus on economic development. Cement production reached approximately 485 million tonnes during the year, reflecting growth of nearly 8.0%- 9.0% YoY compared to 453 million tonnes in FY 2024-25. Industry volumes grew by approximately 8.5%-9.2% during the first 10-11 months of FY 2025-26, while overall cement demand increased by nearly 6.5%-7.5%, supported by post-monsoon recovery and long- cycle infrastructure projects.

The industry also witnessed gradual improvement in pricing discipline during FY 2025-26. Average cement prices increased by approximately 2.0% YoY during April,2025-February,2026, supported by selective price hikes across regions, including increases of 5-20 per bag during early 2026.

The sector continued to witness significant investment momentum, with planned capital expenditure of approximately 1.2-1.25 lakh crore during FY 2024-25 to FY 2026-27 toward capacity additions of nearly 130-170 MTPA. Market consolidation continued, with the top four players expected to account for nearly 54% of industry capacity.

KEY DEMAND DRIVERS

1. Infrastructure Spending

Infrastructure development remained a key demand driver during FY 2025-26, supported by strong government capital expenditure across roads, highways, railways, metros, ports, airports, irrigation projects, and industrial corridors. Government- led projects such as Bharatmala and PM Gati Shakti continued to improve long-term demand visibility for the sector.

2. Industrial & Commercial Segment

The industrial and commercial segment witnessed steady recovery during FY 2025-26, supported by revival in private sector capex, Production Linked Incentive (PLI) schemes, commercial real estate activity, data centre expansion, and development of industrial clusters across the country.

3. Urbanisation and Regional Expansion

Increasing urbanisation across Tier-2 and Tier-3 cities, alongside projects such as the Mumbai-Ahmedabad bullet train corridor and infrastructure expansion in eastern and central India, further

supported cement demand growth.

4. Sustainability and Decarbonisation Initiatives

Sustainability continued to remain a key focus area, with increasing investments in green cement, renewable energy integration, waste heat recovery systems, and CCUS (Carbon Capture, Utilisation and Storage) pilot projects. Government- led decarbonisation initiatives and incentives for sustainable construction further accelerated the industrys transition toward low-carbon manufacturing practices.

Source: https://www.ibef.org/industry/ecommerce-presentation

INDIAN REFRACTORY INDUSTRY

Indias refractory industry continued to witness steady growth during FY 2025-26, supported by strong demand from steel, cement, non-ferrous metals, glass, and infrastructure sectors. The industry remains closely linked to steel production, which accounts for nearly 70% of total refractory consumption in India.

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Indias growing steel and cement capacity, increasing infrastructure investments, and rising industrial activity continue to support longterm demand for advanced refractory products and integrated solutions. At the same time, the industry is gradually transitioning	towards higher-value, technology-led, and sustainable refractory solutions, driven by increasing focus on operational efficiency, recycling, and decarbonisation initiatives.

Particulars	Details
India Refractories Market Size (2025)	~US$ 2.6 billion
Projected Market Size (2034)	~US$ 3.5 billion
Largest End-Use Industry	Steel Industry
Key Demand Drivers	Steel, Cement, non-ferrous metal, glass, energy & industrial manufacturing
Industry Trend	Shift towards technology-led, sustainable, and value-added refractory solutions

Key Industry Drivers

- Expansion in domestic steelmaking capacity

- Growth in infrastructure and construction activity

- Rising focus on energy efficiency and sustainability

- Increasing adoption of recycling and circular economy solutions

- Demand for higher-performance and technology-driven refractory products

Industry Outlook

The Indian refractory industry is expected to continue benefiting from long-term structural growth across steel and infrastructure sectors. Increasing focus on operational reliability, process optimisation, sustainability, and long-term performance partnerships is also expected to accelerate demand for integrated and value-added refractory solutions over the coming years.

Source: https://www.imarcgroup.com/india-refractories-market

ABOUTTHE COMPANY

Company Overview

RHI Magnesita India Limited is the leading supplier of high-grade refractory products, systems and solutions in India, catering to critical high-temperature industrial processes across industries such as steel, cement, non-ferrous metals, glass, petrochemicals and other core sectors. Refractories are essential for operations involving temperatures above 1,200°C and continue to play a vital role in industrial production, infrastructure development and manufacturing growth.

The Company is a part of the global RHI Magnesita Group, a 192-year-old organisation with a presence across more than 100 countries and a portfolio of over 1,700 active patents. Backed by a vertically integrated business model spanning raw materials, refractory products and complete performance-based solutions, the Group serves customers worldwide through a network of 76 production sites (including recycling facilities), 16 raw material sites and 5 R&D hubs and centres, supported by a workforce of over 20,000 employees globally.

The Company benefits from access to advanced technology, research and development capabilities, a global product portfolio and operational best practices. With a strong domestic manufacturing base, wide customer reach and integrated service capabilities, the Company has continued to strengthen its leadership position in the Indian refractory market.

Further strengthening its capabilities and market presence, the Company acquired 100% ownership of Ashwath Technologies Pvt. Ltd. ( Ashwath ) on August 1, 2025. The acquisition enhances the Companys steel flow control machinery capabilities in India and expands its presence in the mini mills steel segment. Ashwath brings a strong domestic and international customer base along with a portfolio comprising slide gate systems, spare parts, and refractory resale solutions. Strategically, the acquisition is expected to strengthen the Companys product offering, deepen customer engagement, expand machinery capabilities through operational synergies, and enhance integration across CNC machining and fabrication operations while creating future growth opportunities across Tier-2 steel producers.

In addition, merger of RHI Magnesita India Refractories Limited and RHI Magnesita Seven Refractories Limited is expected to further strengthen operational efficiencies and improve organisational integration. This consolidation will create scale advantages, optimise overhead structures, improve margins, and support sustainable long-term growth for the combined entity.

RHI Magnesita India Limited continues to reinforce its leadership position in the Indian refractory industry, supported by a skilled workforce of over 6,000 employees. The Company caters to more than 850 customers including international customers, reflecting its strong market presence.

Manufacturing Operations

RHI Magnesita India operates one of the largest refractory manufacturing networks in the country, comprising 8 strategically located manufacturing plants, 2 mines and 2 mechanism plants. The Companys facilities are located across key industrial regions including Rajasthan, Jharkhand, Andhra Pradesh, Odisha, Gujarat, Tamil Nadu, Madhya Pradesh, Chhattisgarh and Maharashtra, enabling strong proximity to major steel and cement clusters and ensuring efficient customer servicing across India.

During FY 2025-26, the Company continued to focus on operational excellence through productivity improvement, better machine utilisation, manpower optimisation, inventory rationalisation, process harmonisation, and tighter cost controls. These initiatives supported operational efficiencies, margin resilience, and stronger cash generation during the year.

Manufacturing capabilities were further strengthened through technology transfer, localisation of advanced products, automation initiatives, and increased focus on recycling and sustainable resource utilisation. The Company also continued to reinforce its industryleading safety culture through structured safety programs supported by DSS+ operational consultants across manufacturing locations.

The Company operates a diversified and integrated business model combining domestic manufacturing, global technology access, technical services, engineering capabilities and long-term customer partnerships. This model enables the Company to provide end-to- end refractory solutions tailored to customer processes and operating requirements across the full refractory lifecycle - from cutting- edge research and development and manufacturing at strategically located plants across India, to expert installation, proactive servicing, real-time performance monitoring, and sustainable recycling practices.

Business Operations: Integrated, Localized, and Diversified

The Company operates a diversified and integrated business model combining domestic manufacturing, global technology access, technical services, engineering expertise, and long-term customer partnerships. This enables the Company to provide end- to-end refractory solutions across the entire refractory lifecycle- from research & development and manufacturing to installation, performance monitoring, servicing, and recycling solutions.

During FY 2025-26, the Company continued to focus on product development, localisation, process harmonisation, and operational improvements to further strengthen its technological capabilities and manufacturing efficiencies.

4PRO - Driving Decommoditisation Through Integrated Solutions

The Indian refractory industry continues to face excess capacity, pricing pressure, and increasing commoditisation of standard refractory products. In response, RHI Magnesita is strategically evolving from a conventional product-led business model towards a comprehensive solutions-led engagement approach through its 4PRO platform.

Built around the four pillars of Planet, People, Partnership, and Performance, 4PRO combines refractory expertise with automation, robotics, digital technologies, process optimisation, recycling, and CO 2 reduction initiatives to deliver integrated and value-added solutions to customers.

The platform is designed to help customers improve operational efficiency, increase campaign life, reduce downtime, optimise costs, and strengthen sustainability outcomes. More importantly, 4PRO is supporting the Companys decommoditisation strategy by moving beyond conventional product supply towards technology-led and performance-based partnerships.

Unlike the traditional transactional refractory model, 4PRO enables the Company to become a partner of choice for customers through customised solutions, integrated services, and long-term strategic engagement. This approach helps strengthen customer stickiness, improve pricing resilience, secure long-term contracts, and create higher switching barriers through deeper operational integration with customers.

The platform also supports the Companys circular economy initiatives through increased recycling capabilities and sustainable refractory solutions aligned with the evolving green steel and low- carbon industrial ecosystem.

Through 4PRO, RHI Magnesita continues to strengthen its competitive differentiation by positioning itself as a strategic industrial solutions partner rather than only a refractory product supplier.

Steel Business

Steel continued to remain the Companys largest business vertical during FY 2025-26, supported by strong domestic steel demand, ongoing capacity expansions, and modernisation initiatives across the steel industry. The Company further strengthened its positioning across integrated steel producers, secondary steel manufacturers, and public sector customers through its comprehensive refractory management capabilities and strong customer engagement model.

With presence across blast furnaces, converters, ladles, tundishes, coke ovens, DRI plants, and pellet plants, the Company continues to participate across multiple stages of the steelmaking value chain. During the year, the Company further strengthened its market position in iron-making and flow control segments through specialised products, project execution capabilities, localisation initiatives, and long-term customer partnerships.

The integration of Ashwath also progressed during the year, strengthening the Companys customer base, particularly in the mini mills steel segment, while enhancing its offerings across slide gate systems, spare parts, refractory resale, and steel flow control machinery capabilities.

A key strategic differentiator has been the Companys increasing focus on integrated solution offerings under the 4PRO platform. Through 4PRO, the Company combines refractory products with automation, robotics, digital monitoring, scanning technologies, and process optimisation solutions to deliver higher operational efficiency and reliability for customers. This solutions-led approach is helping the Company strengthen customer stickiness, improve realization profiles, secure long-term contracts, and progressively decommoditise its business offerings while creating sustainable competitive differentiation in the market.

Industrial Business

Industrials continued to provide meaningful diversification across cement, glass, non-ferrous metals, petrochemicals, and other process industries, accounting for approximately 13% of RHIM Indias revenues during the year. During the year, this business strengthened

its market position and gained market share across select industrial segments, supported by its strong technical capabilities, customised refractory solutions, reliable execution during shutdown campaigns, and deeper customer engagement. The Companys integrated approach, combining product innovation, application engineering, and localized service support, helped improve customer retention and expand share of business with existing customers.

The Company maintained a strong presence in the cement sector by supporting kiln shutdown campaigns, meeting re-lining requirements, and supplying specialised refractory solutions tailored to customer needs. Its ability to improve campaign life, reduce downtime, and deliver consistent operational performance contributed to incremental business wins. The long-term outlook for the cement sector remains favourable, driven by infrastructure development, housing demand, and planned capacity additions through FY 2027-28.

The Company also continued to expand opportunities across lime, chemicals, glass, energy, petrochemicals, and non-ferrous industries, which offer higher value-added product opportunities and better margin profiles. While steel remains RHIM Indias largest revenue driver, the Industrial Division plays an important role in diversifying sectoral risk and creating new growth avenues. Increasing adoption of electric vehicles, renewable energy, and critical metal processing is expected to further drive demand for advanced refractory solutions in the coming years.

Research and Development

Research and Development remained a strategic priority in FY 202526, to strengthen and expand the local innovation capabilities. This investment supported the addition of world class equipment, including advanced thermal conductivity testing systems, viscometers, a new pilot Eirich mixer, high temperature furnaces, and hot MOR facilities, significantly enhancing development and validation capabilities.

Technology transfer to local plants accelerated during the year, particularly for global products such as magnesia spinel bricks for cement, magnesia chrome products for non ferrous metals and steel applications, as well as ISO solutions for thin slab casting and special applications.

Local product development continued to deliver strong results with ongoing progress in ISO products and slide gate plate development for large slab steel plants. These innovations have enabled us to gain market share, supported by proprietary systems such as MTC and STG33.

Collectively, these initiatives have created a robust and sustainable innovation pipeline, underpinning new product introductions and seamless technology transfers from global operations, and reinforcing our competitive positioning across key end use markets.

SWOT ANALYSIS

RHIM India demonstrates key strengths that reinforce its reputation as the market leader in the Indian refractory industry and position

it well to seize emerging opportunities in the rapidly growing domestic market, while navigating an evolving set of global risks and competitive pressures.

Strengths

- Market Leadership with Diversified Industry presence: Largest refractory manufacturer in India, serving over 850 customers including international customers. Supplies refractories to steel, cement, non-ferrous metals, glass, foundry, paper & pulp, and energy industries. Reduces dependency on steel alone, balancing cyclical risks.

- Financial Strength: Net debt-to-EBITDA stood at -0.1x, consistently improving over the last year of 0.3x, reflecting stronger leverage management and improved financial stability.

- Strong and resilient supply chain: Despite uncertain

geopolitical environment company is able to deliver to its customers without any major problems.

- Extensive production Network: RHIM India stands as the market leader with a dominant share in the Indian refractory industry, supported by 8 strategically located manufacturing plants, 2 Mines and 2 mechanism plants. With an installed manufacturing capacity of 512 kt and ongoing expansion plans, the Company is well-placed to address both the domestic and export demand while combining local manufacturing with access to the RHI Magnesita Groups global production network, enabling energy-efficient, automated and recycling-focused operations. This is also backed with groups product footprint and backward integration.

- Global Integration along with Strategic Mergers and Acquisitions: As part of the 192-year-old RHI Magnesita Group, the Company benefits from deep technical expertise and a legacy of innovation. Domestic acquisitions including Dalmia Bharat Refractories, Hi-Tech Chemicals and Ashwath Technologies have expanded capacity and diversified capabilities. Global acquisitions of Seven Refractories, PD Refractories and RESCO have further strengthened the range, efficiency, and technological depth of operations.

- Sustained Focus on Innovation and R&D: RHIM Indias Bhiwadi R&D Centre drives innovation through technology transfer, new product development and recipe optimisation, drawing on the global expertise of the RHI Magnesita Group. This pipeline consistently delivers advanced refractory solutions that enhance product performance, improve cost efficiency and support localised, high-quality manufacturing. The Company also strengthened its focus on automation-led innovation through deployment of Indias first fully integrated robotic solution for caster operations. The technology enhances efficiency, precision, and workplace safety by automating critical steelmaking processes. The adoption of robotics reduces human exposure to hazardous operating environments while enabling faster, more reliable, and uninterrupted operations through customized automation solutions.

- Safety Culture: Safety remains a core strength for the Company, supported by a comprehensive Safety Culture Transformation program implemented across manufacturing facilities, customer sites, and warehouses. The initiative is further strengthened through collaboration with dss+, which supports the enhancement of safety standards through audits and structured improvement plans. In addition, the deployment of an IT-enabled Safety Management System enables real-time monitoring and proactive management of incidents and unsafe practices. The Companys strong commitment to workplace safety has also been recognized by the World Refractories Association at customer locations, reinforcing its reputation for operational excellence and responsible business practices.

Weakness

- Absence of a Sector-Specific Policy Framework: The refractory industrys foundational role in enabling steel, cement and nonferrous metal production has not yet translated into dedicated policy recognition. Unlike several other input industries, refractories operate without targeted government support mechanisms or incentives designed to strengthen long-term sector competitiveness. This gap is further evident in Indias bilateral trade architecture-while the India-Brazil MoU marks a step forward on critical minerals and rare earth cooperation, it currently makes no explicit mention of Magnesite, despite Brazils significant high-grade deposits and Indias growing refractory demand. Bridging these policy and trade gaps remains essential to securing the industrys raw material future.

- Supply Chain Reliability and Length: Spanning several months and involving cross-border shipments, the industrys supply chain can limit agility in responding to sudden changes. Accurate demand forecasting is critical for efficient production planning, procurement and inventory management, but it remains challenging in volatile global markets.

- Exposure to End-Market Cyclicality: Refractory consumption is closely tied to the expansion and maintenance cycles of capitalintensive industries such as cement, glass and non-ferrous metals. During periods of sectoral slowdown or deferred capacity additions, demand for refractories softens correspondingly, creating revenue variability that is difficult to offset through operational levers alone. This cyclical sensitivity remains a structural feature of the business rather than a transient risk.

- Margin Compression under Long-Term Contracts: A significant portion of revenue is governed by long-term supply contracts that often lack adequate price escalation provisions. During episodes of raw material inflation or sharp currency movements, the inability to pass through cost increases in a timely manner results in margin erosion. This structural rigidity in contract pricing continues to pose a challenge, particularly in an environment of elevated input cost uncertainty.

- Raw Material Cost Volatility and Import Dependence: The

cost base of the refractory industry is highly sensitive to price movements in key inputs-including magnesite, bauxite, zirconia, dolomite, graphite and alumina. Significant reliance on Chinese imports for several of these materials introduces geopolitical risk, while exchange rate movements and elevated freight costs add further variability. The absence of a dedicated government policy framework supporting domestic mining development, raw material security and backward integration leave the industry structurally exposed to these global price cycles.

- Rising Compliance from Environmental Regulations:

Progressively tightening environmental standards-spanning carbon emissions, alternative fuel mandates and industrial waste management-are reshaping operational requirements across the steel and cement value chains. While the broader shift toward sustainable manufacturing presents long-term opportunity, the near-term effect is a significant increase in compliance complexity and capital expenditure requirements. Where investments in cleaner processes and technologies are not offset by corresponding productivity gains or efficiency improvements, the net impact on profitability and sector growth trajectories could be adverse.

Opportunities

- Domestic Market Expansion: The rapid growth of Indias steel and cement sectors offers strong potential for volume and margin expansion. With performance exceeding organic growth, there is a clear opportunity to capture higher market share, specifically in segments like ironmaking, coke ovens and pellet plants, by leveraging scale, technology and comprehensive service solutions.

- Global Footprint and Export Potential: An established presence in international markets strengthens competitive positioning and export potential. Positioned as a key manufacturing hub within the RHI Magnesita Group, the Company is well-equipped to scale up regional exports, backed by access to global technology, expertise, and capital. RHIM Indias scale and cost competitiveness make it well-positioned to serve these markets.

- Industry Consolidation: Smaller domestic players continue to face challenges arising from industry overcapacity and margin pressures. Leveraging its strong financial position and operational scale, RHIM is well positioned to strengthen its market leadership through strategic market share gains from smaller and less competitive players.

- Import Substitution and Localization: Increased local

manufacturing aligns with the Governments Make in India initiative and the Groups Local for Local strategy, positioning the Company as a preferred partner for domestic clients and public sector projects while reducing exposure to import-related geopolitical and supply chain risks.

- Green Steel and sustainability: Indias green steel demand is forecasted to grow from currently negligible levels to 24 MT by FY 2034-35 and 73 MT by FY 2039-40. The transition to DRI-based and electric arc furnace steelmaking requires advanced, tailored refractory solutions in which RHIM India holds a technological edge, creating a significant long-term market opportunity RHIMs push into eco-friendly, recyclable refractories aligns with global sustainability trends.

- Non-Ferrous Metals Demand: Rising consumption of copper, aluminum, and nickel for EV batteries, renewable energy, and electronics. RHIM can expand its footprint in non-ferrous smelting refractories.

- New Product Innovations: RHIM India continues to strengthen its R&D capabilities through investments in recipe optimisation, product innovation, and technology development, supported by its world-class R&D centre and integration with the global RHI Magnesita Group. The Company is also expanding opportunities in automation-led solutions through deployment of Indias first fully integrated robotic solution in this segment. The technology improves operational efficiency, precision, and workplace safety

by automating critical steelmaking processes while reducing human exposure to hazardous environments. Source: https://mediaindia.eu/environment/green-steel- demand-in-india-to-rise-to-179-million-tonnes-by-fy50-ey-parthenon/#:~:text=Indias%20demand%20for%20green%20 steel,the%20India%20Green%20Steel%20Coalition

Threats

- Geopolitical & Macroeconomic Risks: The refractory industry is increasingly exposed to geopolitical situations- armed conflicts, trade wars, and supply chain disruptions that threaten the steady flow of critical raw materials like magnesite, bauxite, graphite, and alumina, leading to higher freight costs, longer delivery times, and input cost inflation. At the same time, broader macroeconomic risks such as global financial volatility, trade protectionism, reshoring of manufacturing, and regional fragmentation of supply chains reduce demand, strain capacity utilization, and pressure profitability. Together, these factors pose structural challenges to the industrys globally integrated business model.

- Crude Oil and Energy Price Volatility: Refractory manufacturing is energy-intensive, and the industrys cost base is closely linked to crude oil, natural gas, coal, and pet coke prices. Geopolitical events, specifically involving major oil producing nations, can trigger sudden energy price spikes and availability risk that compress manufacturing margins. Elevated crude oil prices also increase the cost of logistics and transportation, further worsening delivered-cost structures. The inability to pass on the entire energy cost increase through short-term pricing adjustments can significantly impact profitability.

- Shipping Cost and Freight Market Disruption: The global freight market remains intrinsically volatile. For refractory manufacturers dependent on bulk raw material imports and global product exports, sustained elevated freight rates increase landed costs, reduce price competitiveness in export markets and adversely affect working capital efficiency. Persistence in maritime hostilities could further tighten global shipping capacity.

- Commoditization and Shift to Smaller Players: As certain segments of the refractory market become commoditized, some customers may shift towards smaller and low-cost local suppliers. This poses a risk to RHIM Indias premium positioning, potentially impacting volumes and pricing in segments where the differentiation is minimal. The Company mitigates this through high-value performance-driven solutions, long-term service contracts, and continuous R&D investments.

- Import and Pricing Pressure from China: Indian refractory players face intense competition from low-cost manufacturers, particularly from China, that often enter the market at aggressive prices, creating downward pressure on domestic pricing. Chinas steel overcapacity and trade diversions triggered by global tariff regimes, are also redirecting cheap Chinese refractory products into markets including India, challenging the viability of local manufacturing in commoditized product segments. The company is mitigating this risk through High-value product differentiation, long term customer contracts and cost efficient recipe optimization.

- Over-Capacity Addition: The entry of new players and capacity

expansions by existing peers may lead to an oversupply situation in the refractories market, thereby intensifying price competition and potentially lowering margins, especially in standard product categories. Overcapacity leads to lower capacity utilization (often 60-70%), higher fixed costs per ton, and weaker pricing power

FINANCIAL AND OPERATIONAL PERFORMANCE

Snapshot of consolidated FY 2025-26 Performance:

- The total revenue from operations stood at 401,995 lakh in FY 2025-26 as compared to 367,450 lakh in FY 2024-25

- The Adjusted EBITDA was 47,689 lakh as in FY 2025-26 as compared to 50,515 lakh for FY 2024-25

- The operating cash flow was 40,910 lakh improved by 9% from FY 2024-25

- The capital expenditure (CAPEX) is 13,490 lakh improved by 15% from FY 2024-25

- The adjusted earnings per share (EPS) was 8.40 per share

- The net debt to adjusted EBITDA ratio reduced to -0.1x from 0.3x in FY 2024-25.

Key Strategic Achievements - FY2025-26

- Financial Milestones: Record performance of Surpassing 1,000 crore in quarterly revenue in consecutive two quarters in Q2 & Q3 FY 2025-26. Recorded highest-ever revenue during FY 2025-26, demonstrating commercial resilience amid challenging macro-economic conditions including global steel price weakness, low-cost import competition, raw material cost inflation and elevated freight market disruptions. Maintained resilient EBITDA margins despite market volatility. Generated 40,910 lakh in operating cash flow in FY 2025-26, strengthening liquidity and financial stability.

- Steel Division Strength: Maintained and expanded market position with integrated steel producers and public sector undertakings, with strong traction in ladle and converter linings, RH degasser products, flow control systems, and ironmaking applications including coke ovens, DRI plants and pellet operations.

- Industrial Division Growth: Continued to expand presence in non-ferrous metals and petrochemical applications, with improving project visibility, and enhanced product-mix.

- Global Integration: Benefited from RHI Magnesitas global acquisitions (e.g., RESCO in 2025), which expanded product offerings and strengthened supply chain resilience. Expanding product portfolio of HPI refractories for oil and gas industry.

- 4PRO Model Expansion: Scaled 4PRO long-term service contracts combining refractory supply with automation, robotics, predictive maintenance, and productivity enhancement, deepening customer relationships and improving long-term business visibility.

- R&D Investment: Sustaining a strong innovation pipeline with new product introductions and technology transfers from global operations.

- Sustainability Leadership: Maintained active focus on recycling programmes, energy efficiency and decarbonisation initiatives across the Groups global network of 12 dedicated recycling centres, underscoring the scale and institutional depth of the Companys circular economy commitment, and reinforcing ESG credentials and the 4PRO Planetary sustainability pillar. Company achieved 20% as recycling percentage in FY 2025-26.

- Technological Innovation: Commissioned Indias first complete robotic solution in caster operations - a breakthrough in automation for the steel industry. Following success of first commissioning, within quick turnaround time company commissioned second robotic solution in another customers plant. Enhanced digitalization and automation initiatives to improve efficiency and safety.

- Operational Excellence: Sustained the Operational Excellence System (OES) driving productivity, standardisation and 6S compliance across all manufacturing sites, building on industryleading safety metrics achieved in FY 2025-26.

- Industry Recognition: The company has earned strong market recognition for safety, operational excellence, and social governance.

a. Nine sites recognized by the World Refractories Association for exemplary safety performance.

b. The "Agile Partner of the Year - 2025" award from Tata Steel for agility, strong execution capabilities in Electric Arc Furnace (EAF) operations and innovation-led collaboration.

c. The SAIL Award for Social Governance Excellence FY 2025-26, reflecting focus on sustainable value creation, responsible business practices and social governance.

d. The Silver Award Certificate under the Tamil Nadu Pollution Control Board (TNPCB) Voluntary Green Rating Initiative.

e. Awarded with Best safety performance by multiple customers for robust safety governance across sites.

f. Honoured by Government of Andhra Pradesh with CSR Award for contributions to inclusive development under the P4 (Public-Private-People-Partnership) initiative.

INTERNAL CONTROL SYSTEMS & ADEQUACY

The Board evaluates the effectiveness of the internal financial, operational and compliance controls, as well as the risk management framework. RHI Magnesita India adheres to the corporate governance regulations, with the Board assessing the operational efficiency of internal controls throughout the year and making recommendations when appropriate.

Regular discussions between the Board and the Audit & Compliance Committee have addressed improvements in the internal control systems, both implemented and planned. These systems were in place throughout FY 2025-26 and remain effective as of the report date. They follow the three lines of defense model, supported by an end-to-end process model and a delegation of authority structure reflecting responsibility for risk management and internal controls at all management levels.

The Company has a dedicated risk management approach and an internal control framework for its financial reporting process and the preparation of financial statements. These systems include policies and procedures to ensure that adequate accounting records are maintained, and transactions are recorded accurately and fairly, allowing for the preparation of financial statements in accordance with applicable accounting standards.

HUMAN RESOURCES

RHI Magnesita upholds a dynamic people and culture framework that aligns with its strategic vision. RHI Magnesita fosters a culture of innovation, openness, pragmatism and high performance to support the delivery of its strategy. Hiring and retaining talented teams and individuals is essential for the Group to grow and maintain its leadership position.

Leveraging the diversity enjoyed across our regions brings different viewpoints, ways of approaching and solving problems, and generating learnings about how we can all succeed together. The Company is committed to fostering a culture of lifelong learning and supporting both personal and professional growth, ensuring that the employees are equipped to meet evolving business needs while contributing to the organisations long-term success. As on March 31, 2026, the Companys workforce was over 6,300 employees, including both permanent and contractual staff across all Indian entities.

OUTLOOK

FY 2026-27 Strategic Priorities and Business Outlook

The Company remains cautiously optimistic on the business outlook, supported by sustained infrastructure spending, ongoing capacity additions across steel and cement sectors, and increasing focus on industrial self-reliance in India. Growth is expected to be driven by strong demand across steel, cement, iron-making, coke ovens, DRI, and pellet industries, along with rising adoption of value-added refractory solutions and integrated service offerings under the 4PRO platform.

The Company continues to focus on operational excellence, productivity improvement, recycling initiatives, localisation of advanced products, and cost optimisation to strengthen competitiveness and support margin resilience. Opportunities arising from industry capex, commissioning of new plants, and growing demand for high-performance refractory solutions are expected to support long-term growth.

At the same time, the Company remains cognizant of external challenges including import competition, raw material cost volatility, elevated freight costs, and broader macroeconomic and geopolitical uncertainties. Backed by a diversified product portfolio, disciplined execution, strong balance sheet, and access to the Groups global R&D and procurement network, RHIM India remains well-positioned to capitalise on long-term opportunities in the Indian refractory market.

Strategic Priorities - FY 2026-27

- Strengthening Pricing Discipline: Continue calibrated pricing actions and value-based pricing initiatives to protect margins amid inflationary and cost pressures.

- Expanding Iron-Making Presence: Increase focus on DRI, pellet plants, blast furnaces, and coke oven applications through specialised refractory solutions and deeper customer engagement.

- Scaling 4PRO Solutions: Expand integrated refractory

management contracts under the 4PRO framework through automation, digital monitoring, robotics, and performance- linked solutions to strengthen customer stickiness and secure long-term partnerships.

- Product Innovation and Localisation: Develop next-generation refractory products for steel, cement, power, and iron-making sectors while increasing localisation of advanced products and technologies.

- Sustainability and Recycling: Increase usage of recycled raw materials, improve resource efficiency, and support circular economy initiatives aligned with the Groups sustainability goals.

- Supply Chain Resilience: Diversify sourcing networks, localise critical raw materials, and strengthen inventory planning to mitigate geopolitical and logistics-related disruptions.

- Digital and Operational Excellence: Continue investments in Industry 4.0 capabilities including predictive maintenance, process automation, AI-assisted optimisation, and real-time monitoring systems to improve manufacturing efficiency and reduce downtime.

- Hydro-Petrochemical Industry (HPI) Expansion: Leverage Group capabilities and the RESCO acquisition to strengthen presence in the hydro-petrochemical segment through localised product offerings.

- Capacity Optimisation: Improve utilisation levels across manufacturing plants through debottlenecking, process improvements, and selective automation investments.

- Export and Regional Expansion: Strengthen exports across Africa, Southeast Asia, and other strategic international markets leveraging Indias manufacturing competitiveness and integrated solutions capabilities.

Disclaimer

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Companys objectives, expectations or predictions may be forwardlooking within the meaning of applicable securities laws and regulations. These Forward-looking statements are based on certain assumptions and expectations regarding future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized.

The Company assumes no responsibility to publicly amend, modify or revise forward-looking statements, on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include changes in government regulations, tax laws, economic developments within the country and such other factors within India and globally.

INFORMATION AT A GLANCE

Sr. No.	Particulars	Details
1	Date and Time of AGM	Tuesday, September 29, 2026 at 11:00 a.m. (IST)
2	Mode of Conduct	Through Video Conferencing ( VC ) / Other Audio Visual Means ( OAVM )
3	Link for Participation in AGM through VC/OAVM	www.evoting.nsdl.com. For detailed instructions, please refer to the AGM Notice.
4	Live Webcast of AGM	www.evoting.nsdl.com.
5	NSDL Contact Details for Assistance	Tel.: 022 4886 7000; E-mail: evoting@nsdl.com. Members may also contact Mr. Amit Vishal, Deputy Vice President, or Ms. Pallavi Mhatre, Assistant Vice President, at evoting@nsdl.com for any assistance before or during the AGM.
6	Cut-off Date for Determining Eligibility for E-voting	Tuesday, September 22, 2026
7	Commencement of Remote E-voting	Saturday, September 26, 2026 at 9:00 a.m. (IST)
8	End of Remote E-voting	Monday, September 28, 2026 at 5:00 p.m. (IST)
9	E-voting Event Number (EVEN)	141248
10	Registration of E-mail Address for Receipt of AGM Notice and Annual Report	On or before Monday, September 14, 2026, by 5:30 p.m. (IST) by writing to investors.india@rhimagnesita.com or investors@skylinerta.com.
11	Record Date for Final Dividend	Monday, September 14, 2026
12	Payment of Final Dividend	On or before Monday, October 5, 2026
13	Submission of TDS Exemption Forms/Declarations	On or before Monday, September 14, 2026, by 5:30 p.m. (IST) E-mail: investors.india@rhimagnesita.com. E-mails sent to any other e-mail address will not be considered.
14	Registration as Speaker Shareholder	From September 22, 2026 (9:00 a.m. IST) to September 25, 2026 (5:30 p.m. IST) by e-mailing investors.india@rhimagnesita.com.
15	Book Closure Period	September 15, 2026 to September 22, 2026 (both days inclusive)
16	Last Date for Submission of Shareholder Queries in Advance	September 22, 2026 up to 5:30 p.m. (IST) E-mail: investors.india@rhimagnesita.com
17	Last Date for Updating Bank Mandate / Dividend Payment Details	Monday, September 14, 2026
18	Last Date for Updating PAN, KYC, Nomination and Contact Details for Dividend Processing	Monday, September 14, 2026