RR Metalmakers India Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian steel industry continued to demonstrate resilience and steady growth during FY2025-26, reaffirming its position as one of the key contributors to Indias economic development. India retained its status as the worlds second-largest crude steel producer, with crude steel production of approximately 190 million tonnes during the year. Domestic steel consumption remained healthy at around 155-160 million tonnes, supported by sustained demand from infrastructure, construction, automotive, engineering and capital goods sectors.

The Government of Indias continued emphasis on infrastructure development through initiatives such as the National Infrastructure Pipeline (NIP), PM Gati Shakti, Make in India and increased capital expenditure is expected to sustain long-term demand for steel products. Furthermore, the National Steel Policys vision of achieving 300 million tonnes of crude steel production capacity by 2030-31 presents significant growth opportunities for the industry.

Despite fluctuations in raw material prices, global trade uncertainties and pricing pressures from imports, the long-term outlook for the Indian steel industry remains positive. Indias robust economic fundamentals, increasing urbanization and continued infrastructure investments are expected to support sustained growth in steel consumption.

RR MetalMakers India Limited, through manufacturing facility located in Ahmedabad, Gujarat, with an installed production capacity of approximately 1,000 tonnes per month, is well positioned to capitalise on these opportunities. The Companys focus on delivering quality products at competitive prices, coupled with its customer-centric approach, has enabled it to strengthen its presence in the infrastructure sector. During FY 2025-26, the Company successfully added new customers while continuing its focus on operational efficiency and sustainable long-term growth.

OPPORTUNITIES AND THREATS

Indias expanding infrastructure sector, increasing investments in construction, transportation, manufacturing and industrial development continue to create significant growth opportunities for the steel industry. The Companys competitive pricing strategy, quality-focused operations and commitment to customer satisfaction position it favorably to benefit from these opportunities.

During FY 2025-26, the Company expanded its customer base, further strengthening its market presence. Going forward, the management intends to broaden the Companys product portfolio by introducing new products to meet evolving customer requirements and enhance its competitive position.

The Company continues to operate in a dynamic business environment and remains exposed to fluctuations in raw material prices, intense market competition, logistics costs, global trade uncertainties and changing economic conditions. Management continuously monitors these developments and adopts prudent procurement practices, disciplined financial management and operational efficiency initiatives to effectively mitigate potential risks.

The Company remains confident that its strong operational foundation, competitive pricing, manufacturing capabilities and customer relationships will support sustainable long-term growth while creating value for all 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:

Particulars	Amt. (In Lakhs)
A Steel Manufacturing
1 Pipe manufacturing	79.84
Total (A)	79.84
B Steel and Iron Ore Trading
2 Trading of Steel	7876.40
3 Export of Iron Ore	732.22
Total (B)	8608.62
Grand Total (A+B)	8688.46

The Company operates through two principal business segments comprising manufacturing and trading activities. The manufacturing division is engaged in the production of steel pipes, doors and windows, catering primarily to infrastructure and industrial customers. The trading division deals in steel products and iron ore exports. The diversified business model enables the Company to effectively serve varied customer requirements while maintaining operational flexibility and business resilience.

FUTURE OUTLOOK

The Indian steel industry continues to offer strong long-term growth prospects, supported by sustained investments in infrastructure, manufacturing and urban development. Government initiatives promoting domestic manufacturing and higher capital expenditure are expected to continue driving demand for quality steel products.

RR MetalMakers India Limited remains optimistic about the future and is well positioned to leverage these opportunities through its manufacturing facility in Ahmedabad, Gujarat. During FY 2025-26, the Company strengthened its customer base while continuing to deliver quality products at competitive prices.

Going forward, management remains focused on expanding the Companys product portfolio through the introduction of new products, improving operational efficiencies, strengthening customer relationships and maintaining financial discipline. The Company remains committed to delivering sustainable growth and enhancing long-term shareholder value.

RISKS AND CONCERNS

The Company operates in a dynamic business environment and is exposed to various internal and external risks that may influence its operational and financial performance. To effectively manage these risks, the Company has established appropriate systems and processes for identifying, monitoring and mitigating potential business risks.

Key risks include fluctuations in raw material prices, changing demand patterns, competitive market conditions, supply chain disruptions, logistics costs, regulatory changes and overall economic uncertainties. These factors may impact business operations, profitability and future growth.

The Company continues to strengthen its risk management framework through prudent financial management, efficient procurement practices, operational excellence and continuous monitoring of market developments. Management remains committed to proactively addressing emerging risks while maintaining business stability and sustainable growth.

Mitigation Measures:

The Company has implemented a structured risk management framework to identify, assess and mitigate business risks. Management regularly reviews the operating environment and adopts appropriate strategies to strengthen operational resilience and long-term sustainability.

The Company continues to focus on expanding its product portfolio, improving operational efficiency, maintaining product quality and strengthening long-term customer relationships. Effective inventory management, disciplined procurement practices and prudent financial planning enable the Company to effectively manage market volatility and changing business conditions.

RR MetalMakers remains committed to maintaining high standards of corporate governance while ensuring compliance with all applicable statutory, regulatory and environmental requirements.

INTERNAL CONTROL SYSTEMS

The Company has established adequate internal control systems commensurate with the size, scale and nature of its business. These systems are designed to safeguard Company assets, ensure the accuracy and reliability of financial reporting, improve operational efficiency and ensure compliance with applicable laws, regulations and internal policies.

The internal control framework includes clearly defined authority levels, segregation of responsibilities, standard operating procedures and periodic reviews of key business processes. Appropriate controls have been implemented across procurement, manufacturing, sales, finance and inventory management to ensure efficient utilisation of resources and protection of Company assets.

The effectiveness of the internal control systems is periodically reviewed by the management and the Audit Committee. Necessary improvements are implemented wherever required to further strengthen the control environment.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The income from operation of the Company increased from Rs.51.97 Crore to Rs.86.89 Crore, registering a growth of 67.19%. However, during the year the Company has registered Loss before Tax of Rs. 0.13 Crore as against Profit before tax of Rs. 1.68 Crore in the previous year. The loss was basically due to higher input costs and expenses.

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

The Company believes that its employees are its most valuable asset and remains committed to fostering a professional, safe and inclusive workplace. It continues to promote equal opportunity, employee development, ethical business practices and a culture of teamwork and mutual respect.

The Company has established appropriate policies to prevent discrimination and harassment of any nature. During the year under review, the Internal Complaints Committee did not receive any complaints under the applicable provisions of law.

Total numbers of employees on pay roll as on March 31,2026 were 5.

Health, Safety and Environment:

The Company places the highest importance on maintaining a safe, healthy and environmentally responsible workplace. Regular safety training programmes, awareness initiatives and adherence to established safety procedures form an integral part of the Companys operational practices.

Continuous efforts are made to enhance employee awareness regarding workplace safety, emergency response procedures and responsible environmental practices. The Company remains committed to minimising its environmental footprint through efficient utilisation of resources and compliance with all applicable environmental regulations.

Management continues to promote a culture of safety, responsibility and continuous improvement across all levels of the organisation.

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:

Particulars	2024-25	2025-26	Changes (in %)
1 Debtors Turnover ratio	3.80	4.36	14.72%
2 Inventory Turnover ratio	2.28	4.66	103.99%
3 Interest Coverage Ratio	1.50	0.95	36.67%
4 Current Ratio	1.08	1.28	18.71%
5 Debt Equity Ratio	1.00	1.57	57.14%
6 Operating Profit Margin (%)	9.08%	2.82%	-68.94%
7 Net Profit Margin (%)	3.23%	-0.77%	-123.84%

Inventory Turnover Ratio: The Inventory Turnover Ratio increased significantly due to higher sales during the year along with improved inventory management and faster inventory movement

Interest Coverage Ratio: The Interest Coverage Ratio declined primarily due to a reduction in operating profitability during the year, resulting in lower earnings available to cover finance costs

Debt Equity Ratio: The Debt Equity Ratio increased due to higher borrowings during the year coupled with a reduction in shareholders equity on account of losses incurred during the year.

Operating Profit Margin: The Operating Profit Margin declined due to increased cost of purchases and other operating expenses, resulting in lower operating profit despite higher revenue.

Net Profit Margin: The Net Profit Margin turned negative due to lower operating profitability, exceptional items and tax expenses, resulting in a net loss during the year.

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

Particulars	2024-25	2025-26	Changes (in %)
1 Return on Net Worth	0.18%	0.02%	-108.78%

Return on Net Worth Ratio decreased due to loss suffered from overall business operations.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or outlook may constitute "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to various factors including changes in economic conditions, Government policies, market dynamics, raw material prices and other factors beyond the Companys control. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.