RR Metalmakers India Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

India continues to shine as a prominent player in the global steel industry, displaying robust growth prospects. Indias steel demand is projected to see robust growth in 2025, driven by infrastructure development and government initiatives. While the industry faces challenges in domestic supply and pricing pressures due to global market trends, it is expected to maintain its position as the second-largest consumer of finished steel globally.

India reached its target steel production capacity of 140 million tons per year in the fiscal year 2024-25. According to a report by MP Financial Advisory Services LLP (MPFASL), the country is steadily moving towards its strategic goal of 200 million tons per year by the 2030-31 fiscal year.

The Indian steel industry, the second largest in the world after China, is showing some of the highest growth rates. Between 2016 and 2024, the average annual growth in steel production in India was about 5%, while in China it was 2.76% and the global average was only 1.77%. Moreover, after 2020, growth in India accelerated to 8% per year, while Chinese production began to decline.

India has become 2^nd largest Steel producers in the world at 185 million ton of production of raw steel with target of reaching to 200 million ton by the year 2030.

This optimistic forecast aligns with Indias strong macro-economic fundamentals, with key indicators such as manufacturing and services PMIs, IIP, and core infrastructure growth remaining steady and resilient. Moreover, various agencies, including the RBI, IMF, and World Bank, estimate a GDP growth continue to be in the rage of 6% to 6.5% for fiscal 2025-26, reinforcing Indias potential for sustained economic development.

Amidst this positive economic climate, the steel industry in India is expected to play a pivotal role, supporting various sectors and contributing to the nations progress as Steel is the backbone of any growing economy. As a company operating in the steel sector, the Company is well-positioned to convert the raw material supply by the large steel makers into finished product which can be consumed by the end users. The Company is committed to delivering high-quality finished steel products and meeting the evolving demands of our customers. Our focus on operational efficiency, and customer satisfaction will continue to drive our success in this dynamic and promising landscape.

OPPORTUNITIES AND THREATS

The Company is exploring various options and opportunity for expansion and proactively pursuing every available avenue to capitalize on growth opportunities and strengthen its position in the market. As our domestic market remains a key focus, we are cognizant of the potential impact that adverse economic conditions in India could have on our existing operations and future expansion plans.

RR METALMAKERS INDIA LIMITED

In existing business environment of India, the Company might face few challenges, we remain committed to implementing strategic measures and adopting a forward-thinking approach to mitigate risks and navigate through uncertain times. Our dedicated team is continuously monitoring market dynamics, undertaking prudent financial planning and emphasizing operational efficiency to enhance resilience and maintain sustainable growth.

We are confident that our strong fundamentals, customer-centric approach and adaptability to changing market scenarios will enable us to overcome challenges and achieve sustained success. By focusing on customer satisfaction and prudent risk management, we strive to strengthen our position as one of the leading player in the industry and deliver value to all our stakeholders.

SEGMENT–WISE OR PRODUCT-WISE PERFORMANCE

The Company is in the business of manufacturing of steel pipes, doors and windows. The Company also acts as a trader of Steel and Iron Ore. Product wise and segment wise performance was as follows:

Company operates in the following segments:

Sr. Particulars	Amt. (In Lakhs)
No
A Steel Manufacturing
1 Pipe manufacturing	351.91
Total (A)	351.91
B Steel and Iron Ore Trading
2 Trading of Steel	3844.41
3 Export of Iron Ore	1000.76
Total (B)	4845.17
Grand Total (A+B)	5197.08

FUTURE OUTLOOK

The Indian steel industry is projected to see an 8% annual growth in steel demand for both 2024 and 2025, driven by infrastructure development and investments in steel using sectors are key drivers of the industrys growth. The Indian Steel Association (ISA) estimates that domestic steel demand was at 119.86 mt in the fiscal year 2022-23. Looking ahead, the demand is expected to continue its upward trajectory, increasing by 5.25% to reach 140 mt in the subsequent financial year 2025-26, according to the ISAs projections.

This growth is driven by several factors, including the significant momentum in infrastructure spending, manufacturing defence equipment in India under make in India initiatives and sustained growth in urban consumption. These forces are expected to propel the steel industrys expansion and result in higher demand for steel products within the country.

The positive outlook for domestic steel demand is an encouraging sign for the Indian steel industry, showcasing its resilience and potential for further expansion. With infrastructure development and urbanization remaining key priorities for the nations economic progress, the steel industry is well-positioned to play a pivotal role in supporting these vital initiatives.

In this context, the Company is also expected to perform well in the years ahead. However, it is important to keep in mind that market dynamics, including the balance of demand and supply for our products, may impact our performance. Nevertheless, we are determined to meet market demands with the resources available to us and strive towards achieving our desired results.

Going forward, we remain committed to delivering quality products and services to the customers while contributing to the growth of the steel industry in India. We are confident that our efforts, combined with the favorable industry outlook, will contribute to the success and progress of our company.

RISKS AND CONCERNS

In the ordinary course of business, the Company encounters various external and internal risks that can potentially impact the operations and future growth. It is therefore necessary to address these risks proactively to ensure sustained success and appropriately mitigate any adverse effects. The Company is constantly monitoring following major risks and concerns:

• Industry Demand Fluctuations: The steel industry is subject to demand fluctuations influenced by various factors such as economic conditions, market trends, and government policies. Any significant decline in overall demand for steel products in the industry may affect sales and profitability of the Company.

• Competitive Landscape: The steel market is highly competitive, with several players aggressively vying for market share. Intense competition can exert pricing pressure and affect ability to maintain market position and profitability of the Company.

• Economic Conditions: The Indian economy is subject to fluctuations due to various factors, including changes in government policies, global economic conditions, and domestic macroeconomic indicators. Deteriorating economic conditions could adversely impact business operations of the Company and its financial performance.

Product-Specific Risks: Each product offered by the Company may have its own unique risks associated with market acceptance, technological advancements, and changing customer preferences. These risks are continuously monitored to ensure that we align our product offerings with market demands.

• Supply Chain Disruptions: The operations of the Company are dependent on a stable and efficient supply chain. Any disruptions in the supply chain, such as delays in raw material delivery or transportation issues, may adversely affect our production and distribution capabilities.

Mitigation Measures:

To address these risks and concerns, the Company is taking appropriate measures, including:

Product Positioning Strategy: The Company is continuously refining its product positioning strategy to ensure the Company offerings are aligned with market demands and cater to changing customer preferences.

Financial Planning and Risk Management: The Company maintains a robust financial planning process and implement risk management strategies to mitigate the impact of external fluctuations on Company business.

• Focus on Customer Relations: We prioritize building strong relationships with our customers, understanding their needs, and providing customized solutions to enhance customer loyalty and satisfaction.

• Continuous Improvement Initiatives: The Company invest in technological advancements and process improvements to enhance operational efficiency and stay competitive in the market.

• Compliance and Governance: The Company adhere to all regulatory and compliance requirements to maintain ethical business practices and foster trust among stakeholders.

As we navigate these risks, we remain committed to upholding the highest standards of corporate governance, transparency, and ethical conduct. Our goal is to sustain growth, deliver value to our stakeholders, and achieve long-term success in the dynamic steel industry.

INTERNAL CONTROL SYSTEMS

The internal control procedures of the Company are carefully designed and implemented, taking into consideration the size of the company and the nature of our business. These systems play a critical role in safeguarding our assets, maintaining accurate financial records, and adhering to corporate policies.

Key Features of Our Internal Control Systems:

• Adequate Design: We continually assess and enhance the design of these systems to address any emerging risks and changes in our business environment.

• Regular Reviews: The management regularly reviews of the internal control system to ensure its effectiveness. This ongoing monitoring helps identify any gaps or weaknesses and enables us to take timely corrective actions.

Segregation of Duties: The Company follows a strict policy of segregating duties within its functions, such as purchase, sales, and finance, to prevent any conflicts of interest and promote accountability.

Financial Controls: Our internal control systems place significant emphasis on financial controls.

• Risk Assessment: We regularly conduct risk assessments to identify potential vulnerabilities and implement risk mitigation measures.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

For most part of the year 2024-25, the Company was under Corporate Insolvency Resolution Process which has severely impacted the performance of the Company. The income from operation of the Company reduced from Rs. 96.39 Crore to Rs. 51.97 Crore, registering a degrowth of 46.08%. During the year the Company has registered Profit before Tax of Rs. 1.68 Crore as against Profit before tax of Rs. 1.62 Crore in the previous year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company promotes positive workplace environment through its policies and best practices for all its employees. The Company policy prohibits harassment of any kind, including harassment based on age, race, religion, caste, creed, color, sex, marital status or any other basis protected by law. During the year, the Companys Internal Complaints Committee did not receive any complaint. Total numbers of employees on pay roll as on March 31, 2025 were 5. Further, 10 persons were employed on contract basis as on March 31, 2025.

Health, Safety and Environment:

The Company has initiated various measures to protect the health and safety of its employees and minimize pollution to preserve the internal as well as the surrounding environment. The Company also conducts safety induction trainings for its employees and workers to make them aware of the system, safety rules and the procedure to report any incident to their supervisors. The training programs also give them an overview of the dos and donts during emergency situations.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Sr. Particulars	2023-24	2024-25	Changes (in %)
No.
1 Debtors Turnover ratio	9.82	3.80	-61.32%
2 Inventory Turnover ratio	4.30	2.28	-46.88%
3 Interest Coverage Ratio	1.35	1.50	0.15%
4 Current Ratio	1.08	1.08	-0.12%
5 Debt Equity Ratio	2.24	1.00	-55.39%
6 Operating Profit Margin (%)	6.16%	9.08%	2.92%
7 Net Profit Margin (%)	1.68%	3.23%	1.55%

Explanation for change in Ratio by more than 25% is given herein under:

Debt Turnover Ratio: Debtors Turnover Ratio decreased due to reduction Credit Sales in FY 2024-25 Rs.5197.09 Lakhs as compared to Previous Years Credit Sales of Rs. 9638.93 Lakhs.

Inventory Turnover Ratio: Inventory Turnover Ratio decreased due to reduction in Cost of Goods Sold of Rs.4655.37 lakhs as compared to previous year of Rs.8938.09 Lakhs.

Debt-Equity Ratio: Debt-Equity Ratio decreased as debts reduced in FY 2024-25 to Rs. 925.82 Lakhs as compared to Rs. 1,703.84 Lakhs in previous year.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF.

Sr. Particulars	2023-24	2024-25	Changes (in %)
No.
1 Return on Net Worth	0.14%	0.18%	0.04%

Return on Net Worth Ratio increased due to higher Profit of Rs.167.79 Lakhs in FY 2024-25 as compared to Profit of Rs. 105.12 Lakhs in

Previous Year.

Cautionary Statement

Certain statements under ‘Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Although the expectations are based on reasonable assumptions, the actual results could materially differ from those expressed or implied, since the Companys operations are influenced by many external and internal factors beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.

For and on behalf of Board of Directors

RR MetalMakers India Limited,

Sd/- Virat Shah Chairman (DIN: 00764118) Date: August 12, 2025

Place: Mumbai