Rishabh Digha Steel & Allied Products Ltd Management Discussions

INTRODUCTION:

One of the primary forces behind industrialization has been the use of metals. Steel has traditionally occupied a top spot among metals. Steel production and consumption are frequently seen as measures of a countrys economic development because it is both a raw material and an intermediary product. Therefore, it would not be an exaggeration to argue that the steel sector has always been at the forefront of industrial progress and that it is the foundation of any economy. The Indian steel industry is classified into three categories - major producers, main producers, and secondary producers. India is the worlds second-largest producer of crude steel, with an output of 137.96 MT of crude steel and finished steel production of 132.57 MT in FY25. Indias domestic steel demand is estimated to grow by 9-10% in FY25 as per ICRA. The growth in the Indian steel sector has been driven by the domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to Indias manufacturing output. The Indian steel industry is modern, with state-of-the-art steel mills. It has always strived for continuous modernisation of older plants and up-gradation to higher energy efficiency levels. According to a Deloitte report the demand for steel in India is projected to grow significantly over the next decade, with annual growth rates expected to range from 5% to 7.3% .

Source: www.ibef.org

BUSINESS OVERVIEW:

Rishabh Digha Steel & Allied Products Ltd. with you valuable raw material you can be best rest assured that your material is in safe and competent hands. With ever rising steel prices, we understand how precious raw material is to your organization. Faulty processing, not within acceptable tolerances, can play havoc with your profits, negating all efforts at minimizing costs, without your knowledge.

Process Flow

IMPACT OF COVID-19:

The company has discontinued its job-work activity since 01st October, 2020 majorly due to the COVID-19 impact. As per Ind AS 105, a discontinued operation of an entity is the operation which has been disposed off or has been classified as held for sale. As the management does not have committed plan to sale and the sale cannot be completed within one year, the operations and its assets are not classified as Discontinued Operations or Held For sale. The management is considering various restructuring plans for the company.

FINANCIAL HIGHLIGHTS:

- Paid up Share Capital of the Company as on 31 March 2025, stands at 5,48,64,000 divided into 54,86,400 number of equity Shares of Rs. 10/- each fully paid up. - Income from operation stood at Rs. 10,526.63 thousand /- for fiscal 2025. - Profit/Loss before Taxes of fiscal 2025 was Rs. 657.97 thousand/-. - Basic Earnings per Share for fiscal 2025 was Rs 0.11. - Net Worth of the company stood at Rs.180559.88 thousand /- as on March 2025.

MARKET SIZE

In the past 10 12 years, Indias steel sector has expanded significantly. Production has increased by 75% since 2008, while domestic steel demand has increased by almost 80%. The capacity for producing steel has grown concurrently, and the rise has been largely organic. In FY25 (April to February), the production of crude steel stood at 137.96 MT. In FY25 (April to February), the production of finished steel stood at 132.57 MT. In FY25 (April February) exports of finished steel stood at 3.60 metric tonnes (MT), while imports stood at 6.07 MT. In FY25 (April-February), the consumption of finished steel stood at 137.85 MT. The per-capita consumption of steel stood at 97.7 kgs in FY24. In FY24, the consumption of finished steel stood at 136 MT. In FY24, the production of crude steel and finished steel stood at 143.6 MT and 138.5 MT, respectively In FY24, the consumption of finished steel stood at 135.90 MT. In FY24, the exports and imports of finished steel stood at 7.49 MT and 8.32 MT, respectively. The annual production of steel is anticipated to exceed 300 million tonnes by 2030-31. By 2030-31, crude steel production is projected to reach 255 million tonnes at 85% capacity utilisation achieving 230 million tonnes of finished steel production, assuming a 10% yield loss or a 90% conversion ratio for the conversion of raw steel to finished steel. With net exports of 24 million tonnes, consumption is expected to reach 206 million tonnes by the years 2030 1931. As a result, it is anticipated that per-person steel consumption will grow to 160 kg.

OUR COMPETITIVE STRENGTHS: a) Dynamic Management:

The Company is led by professional management team comprising experienced leader and young brigade of technocrats. The promoters are ably supported by skilled and professional managerial team. This dynamic team has been instrumental in creating best-in-class technology and processes to enhance customer experiences and lead to overall growth of the company. b) Diverse Offerings:

Alacrity Securities Limited offerings comprise share broking and trading servicesin equity, futures & options, and currency derivatives, among others. It provides mutual fund advisory services to clients andhas ventured into providing comprehensive wealth management services to the client. The Company has affiliated with one of the best Wealth Management Companies. This diversified range of financial services enables it to cater to varied requirements of its customers. c) Technology Competence:

The company has deployed state-of-the-art technology, adopted automated solutions, and digitized processes to ensure seamless services and high operational efficiency Its automated trading strategy based on algorithmic and quantitative trading solutions gives it a competitive edge in the marketplace. d) Strong Customer Relationships:

Customer service and experience is a top priority at the Company. The Company provides hassle-free and seamless services to the Customers. Its relentless focus on client coverage, timely resolution of customer complaints, and customer satisfaction have helped it forge strong relationships with its customers.

GROWTH STRATEGIES: a) Strengthening Business:

The Company aims to capitalize on its existing strengths, while at the same time consolidate its presence in business segments. This will enable the Company to increase its market share and achieve greater economies of scale. b) Enhancing Client Base:

Alacrity Securities Limited enjoys an unblemished reputation in market and strong relationships with all its stakeholders, which has been at the cornerstone of its continued success. The Company intends to bank on this strong reputation and goodwill to increase its clientele and grow business sustainably with diversified products and services. c) Harnessing Technology:

Technology is an important tool in the creation of consistent business value. The Companys robust technology-based trading platforms have resulted in increased speed and convenience leading to superior customer experience. d) Empowering Human Capital:

Recognizing that people are the most important asset of an organization, the Company offers a conducive work environment and career opportunities to motivate its employees encouraging them to deliver improved services to clients.

RISKS AND CONCERNS:

It is essential to correctly assess the risk in each segment so that the risk is mitigated before it becomes a possible threat. General risk segments are statutory compliances, economy, financials, Government policies, market related, operational, products and technology etc., The management has a rapid review of likely risk areas with the objective to define a framework for identification, evaluation and mitigating the risk in the decision-making process and to encourage proactive management and not reactive management.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has robust internal controls systems (including Internal Financial Controls) that facilitates efficiency, reliability and completeness of accounting records and timely preparation of reliable financial and management information. The internal control system ensures compliance with all applicable laws and regulations facilitates optimum utilization of resources and protect the

Companys assets and investors interests. The Companys well-defined organizational structure, documented policy guidelines, defined authority matrix and internal controls ensure efficiency of operations, compliance with internal policies and applicable laws and regulations as well as protection of resources. The Audit Committee of the Board regularly reviews significant audit findings of the Internal Audit system covering operational, financial and other areas.

RISK MANAGEMENT:

Risk Management is an ongoing process. Effective risk management is therefore critical to any organizational success. Globalization with increasing integration of markets, newer and more complex products and transactions and an increasingly stringent regulatory framework has exposed organizations to and integrated approach to risk management. Timely and effective risk management is of prime importance to our continued success. The sustainability of the business is derived from the following: - Identification of the diverse risks faced by the Company. - The evolution of appropriate systems and processes to measure and monitor them. - Risk Management through appropriate mitigation strategies within the policy framework. - Reporting these risk mitigation results to the appropriate managerial levels.

CAUTIONARY STATEMENT:

Statements in the Management Discussion & Analysis, describing the Companys objectives, projections and estimates are forward looking statement and progressive within the meaning of applicable laws & regulations. Actual result may vary from those expressed or implied. Important developments that could affect the Companys operations are significant changes in political and economic environment in India, tax laws, exchange rate fluctuation and related factors.