Sambhv Steel Tubes Ltd Management Discussions

Global economic overview

Global economy recorded modest growth of 3.4% in 2025 compared to 3.3% in the previous year, amid an increasingly uncertain trade environment. Economic activity was influenced by the US tariff measure introduced in April 2025, which is partially reversed through subsequent trade agreements, left

effective tariff rates well above pre-2025 levels and contributed to heightened trade policy uncertainty.

Advanced economies like United States, Japan witnessed a marginal growth with aggregate GDP grew from 1.8% in 2024 to 1.9% in 2025, meanwhile emerging

market and developing economies continue to demonstrate relative resilience, recording growth of 4.4% in 2025 compared to 4.3% in 2024.

Global inflation continued its multi-year downward trend in 2025, declining to an estimated 4.1% from 5.8% in 2024.

Regional growth (%)	2025	2024
World output	3.4	3.3
Advanced economies	1.9	1.8
Emerging and developing economies	4.4	4.3
(Source: IMF, un.org)

Performance of the major economies, 2025

United States	China	United Kingdom	Japan	Germany
GDP growth of 2.1% in 2025 compared to 2.8% in 2024.	GDP growth was 5.0% in 2025 compared to 5.0% in 2024.	GDP growth was 1.3% in 2025 compared to 1.1% in 2024.	GDP growth was 1.2% in 2025 compared to (0.2)% in 2024.	GDP growth was 0.2% in 2025 compared to a -0.5% in 2024.

(Source: IMF April 2026 Outlook, World Bank)

Outlook

Given the uncertainty surrounding the global economic outlook, the IMF World Economic Outlook adopted a reference forecast instead of a conventional baseline. This forecast assumes that the conflict remains contained in duration, intensity, and geographic scope, with disruptions easing by mid-2026, consistent with the commodity futures as of March 10, 2026.

Under this reference view, global growth is projected at 3.1% in 2026 and 3.2% in 2027. Global inflation is expected to rise to 4.4% in 2026 before easing to 3.7% in 2027.

(Source: OECD Interim Economic Outlook, IMF, World Economic Forum, Federal Reserve, Bank of England, European Central Bank, Bank of Japan)

Indian economic overview

The Indian economys real GDP grew at 7.7% in FY 2025-26, compared to 7.1% in FY 2024-25. This growth was driven by strong domestic consumption and sustained increase in investments, reaffirming Indias position as the fastest- growing major economy.

Indias Real GDP at Constant Prices was estimated at INR 323.12 lakh crore in

FY 2025-26, up from INR 299.89 lakh crore in FY 2024-25 indicating continued growth in real economic output.

Growth of the Indian economy

	FY23	FY24	FY25	FY26
Real GDP growth (%)	7.0*	7.2	7.1	7.7

E: Estimated. Note: FY24 figure restated under new base year 2022-23. (Source: MoSPI)

* The FY23 figure (7.0%) is from the old base year series (2011-12) as the new series back-data for FY23 will only be available after December 2026.

Growth of the Indian economy quarter by quarter, FY 2025-26

	Q1FY26	Q2FY26	Q3FY26	Q4FY26
Real GDP growth (%)	6.7	8.4	7.8	7.8

Note: Q2 revised upward from 8.2% and Q3 from 7.35% under the new base year 2022-23 series released February 27, 2026. Q4 remains an estimate. (Source: MoSPI)

Inflation, policy and currency dynamics

Inflation remained subdued throughout much of FY 2025-26, with full-year CPI estimated at an exceptionally low 2.1%. This favourable inflation environment created room for 125 basis points reduction in policy rates, thereby supporting consumption and investment.

However this macro stability was accompanied by currency volatility. The Indian rupee depreciated sharply by 9.88% during FY 2025-26 — its steepest fall since FY 2011-12 — touching INR 94.83 against the US dollar. This reflected global capital flows, a strong dollar environment, and geopolitical uncertainties.

Capital flows and market behaviour

Foreign portfolio investors remained risk-averse, withdrawing a record INR 1.8 trillion during FY 2025-26 - the largest outflow in 36 years. However, robust inflows from domestic institutions amounting to INR 8.50 trillion provided a crucial counterbalance, highlighting the growing maturity and depth of Indias domestic capital market.

Indias market capitalisation declined 8% y-o-y to USD 4.5 trillion in FY 2025-26 from USD 4.83 trillion in FY 2024-25, marking the sharpest annual decline since FY 2022-23. The BSE Sensex fell 7% (5,467 points) in FY 2025-26, against a gain of 5.1% (3,763 points) in FY 2024-25. Similarly, the Nifty 50 fell 5%, (1,188 points) in FY 2025-26, compared to a gain of 5.3% (1,192 points) in FY 2024-25. The market correction was largely driven by the ongoing West Asia conflict and concerns around potential tariff measures proposed by the President of US, which weighed on global investor sentiment.

Gold prices surged 64.1% during FY 2025-26 reflecting global risk aversion and safe-haven demand.

Indias net direct tax collections increased by 5.12% year-on-year to INR 23.40 lakh crore in FY 2025-26, though this fell short of the Revised Estimate of INR 24.21 lakh crore by approximately INR 81,000 crore. Corporate tax collections stood at INR 10.99 lakh crore against a target of INR 11.09 lakh crore, while personal income tax (including Securities Transaction Tax) amounted to INR 12.41 lakh crore against a target of INR 13.12 lakh crore. The larger of the two misses, partly reflecting the income tax relief extended to the middle class in the Union Budget FY 2025-26.

Banking sector

Indias banking sector reflected continued improvement in financial health, with the gross non-performing asset ratio declining to a robust 2.1% as of September 2025, indicating stronger asset quality and disciplined lending practices. This stability was mirrored in profitability metrics, as scheduled commercial banks reported a return on assets of 1.3% and a return on equity of 12.5% during the first half of FY 2025-26, underscoring sustained operational efficiency, improved profitability and a healthier balance sheet trajectory.

Indias growth story

Real Gross Value Added (GVA), which measures economic output excluding taxes and subsidies, grew by 7.9% in FY 2025-26, compared with 7.3% in FY 2024-25. At current prices, nominal GVA rose 9.1% to INR 314.87 lakh crore from INR 288.54 lakh crore in FY 2024-25, reflecting the expansion in overall economic activity.

The tertiary services sector remained a primary engine of economic growth, expanding by 9.3% in FY 2025-26 and increasing its share in nominal gross value added to 54.3% from 52.8% in FY 2024-25, supported by broad-based momentum across segments.

During FY 2025-26, financial, real estate, IT and professional services grew by 10.4%, while trade, hotels, transport, communication and broadcasting recorded a strong 11.0% growth, and public administration and other services expanded by 5.0%.

The secondary sector grew 8.8%, accelerating from 8.0% in the previous year, driven by manufacturing growth of 10.7% alongside construction growth of 7.4%. This combination of services-led scale and manufacturing acceleration is shaping a more balanced and resilient economic structure.

Source: Ministry of Statistics and Programme implementation (MoSPI), Government of India, Provisional Estimates of Annual GDP for 2025-26 and Quarterly Estimates for Q4 2025-26,5 June 2026.

Consumption and investment

During FY 2025-26, both the Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) recorded growth in excess of 7%, reflecting a well-balanced demand composition across household spending coupled with robust investment activity.

Growth catalysts

Policy-led consumption boost:

The Union Budget FY2027s tax relief measures—particularly income tax exemptions up to INR 12 lakh—are expected to stimulate discretionary spending and reinforce consumption-led growth.

Anticipatory Pay Commission impact: The 8th Pay Commission, though expected to be implemented from FY 2027-28, is already shaping consumer sentiment, creating a forward consumption impulse.

Monetary stability: The Reserve Bank of Indias calibrated stance, with the repo rate at 5.25%, reflects a balanced approach to manage inflation risks while supporting economic growth, thereby ensuring macroeconomic stability.

Credit expansion: Improved banking health and liquidity conditions are expected to sustain strong credit growth across MSMEs, housing, and retail segments.

Fiscal prudence with growth focus:

The Union Budget maintains fiscal discipline while prioritising investment in infrastructure, MSME support, skilling, and innovation—key drivers of long-term productivity and sustainable economic growth.

Outlook

The year under review underscores a defining divergence: while the world economy grappling with uncertainty, while India demonstrated resilience, stability and confidence.

In an increasingly fragmented and uncertain global environment, India stands out as a rare convergence of macroeconomic stability, economic scale and structural growth opportunity. The World Bank has revised its FY 2026-27 growth estimate upward to approximately 6.6%, reflecting resilient domestic momentum even as growth despite moderation from the previous year elevated growth. India is expected to retain its position as the fastest-growing major economy.

Growth will be shaped by a combination of strong domestic demand and resilient private consumption, supported by subdued inflation environment and GST rationalisation, alongside stable export performance with improved access to key markets. This momentum is further reinforced by sustained policy support, ongoing structural economic reforms, and a favourable demographic advantage.

While risks persist, particularly from elevated energy prices, subsidy pressures on government spending, and uncertainty in global demand, Indias macroeconomic fundamentals remain strong.

Over the medium term, sustained consumption, gradual investment recovery, and expanding global trade linkages are expected to reinforce Indias position as a key driver of global economic growth.

(Source: Upstox, Economic Times, India Today, 5paisa, Livemint, The Logical India)

Steel industry overview

Steel remains one of the worlds most critical engineering and construction materials, serving as the backbone of infrastructure, transportation, manufacturing and urban development. Its ability to be recycled indefinitely without any loss in quality further strengthens its role in supporting a sustainable future. As India advances towards becoming a global manufacturing hub and a USD 5 trillion economy, the steel industry is poised to play an increasingly pivotal role in driving industrialisation, infrastructure creation and long-term economic growth.

Indias steel story

India further consolidated its position as the worlds second-largest crude steel producer in calendar year 2025, producing 164.9 million tonnes (MT) of crude steel, behind China at 960.8 MT and ahead of the United States at 81.9 MT and Japan at 80.7 MT.

The countrys long-term growth outlook remains compelling, supported by significant headroom in domestic steel consumption. Per-capita finished steel consumption reached 115.5 kilogram in FY 2025-26, substantially below the global average of 215 kilogram and Chinas average of 604 kilogram. This gap underscores the considerable potential for sustained demand growth as infrastructure development, urbanisation and industrialisation continue to accelerate.

Demand moves into high gear

Crude steel production increased by over 10.7% year-on-year to approximately 168.4 MT, while finished steel consumption increased by 7-8% to around 164 MT. Demand was driven by increased activity across infrastructure, construction, railways, manufacturing and engineering sectors, supported by government capital expenditure and ongoing urbanisation initiatives.

A stronger growth runway

The industrys long-term growth prospects remain robust, supported by strong structural fundamentals and policy support. Indias steel demand is projected to increase from 162.23 MT in 2025 to 273.88 MT by 2031, reflecting a CAGR of 9.12%.

The Production Linked Incentive (PLI) Scheme for Specialty Steel continues to encourage investments in value- added steel products, while Indias abundant iron ore reserves provide a sustainable cost and structural advantage, strengthening the global competitiveness of domestic steel producers.

Scaling capacity

Capacity expansion remained a strategic priority during the year. Indias crude steelmaking capacity reached approximately 220 MTPA, keeping the industry on track to achieve the National Steel Policy target of 300 MTPA by 2030.

India gains ground in global trade

A notable highlight of FY 2025-26 was the improvement in trade performance, with finished steel exports increasing by 35.9% to around 6.6 MT, while imports declined by 31.7%. This reflected strengthening domestic competitiveness and contributed to a more favourable trade balance.

Balancing growth

Despite this positive momentum, the industry continues to navigate structural challenges, including volatility in coking coal prices, dependence on imported raw materials, elevated logistics costs and the imperative of decarbonisation.

Forging a low-carbon future

Looking ahead, greater emphasis on specialty steel production, logistics efficiency, digitalisation, scrap recycling and low-carbon steelmaking technologies is expected to enhance the sectors global competitiveness and improve operational efficiency. These priorities will be critical to enabling the industry to meet rising demand while supporting sustainable, long-term growth.

Key metrics of Indian steel (in million tonnes)

Metrics	FY 2023-24	FY 2024-25	FY 2025-26
Crude steel production	144.3	152.0	168.4
Finished steel production	139.2	146.6	160.9
Finished steel Import	9.6	10.5	6.5
Finished steel Export	8.5	6.3	6.6
Consumption	136.3	152.0	164
Consumption per capita (kilogram)	97.7	107.8	115

Steel pipes industry overview

The steel pipe industry is a critical component of the global industrial and infrastructure ecosystem, serving a wide range of sectors, including oil and gas, water transportation, construction, manufacturing and engineering, power and infrastructure.

The global steel pipe market was valued at USD 105.6 billion in 2025 and is projected to reach USD 109.7 billion by 2026, reaching approximately USD 160.9 billion by 2036. Sustained investments in energy, industrial development and infrastructure are expected to remain key growth catalysts.

Demand anchored by energy and infrastructure

The industrys growth is primarily driven by the oil and gas sector, where steel pipes play a critical role in drilling, exploration, transmission and distribution of hydrocarbons. Accelerating industrialisation and urbanisation are also expanding demand across construction, water management, manufacturing and engineering applications.

Growing investments in water systems, transportation networks, HVAC installations and industrial facilities are expected to support long-term consumption. Rising investments in petrochemical facilities and refineries are further boosting demand, with steel pipes widely used in heat exchangers, pressure systems, pipelines and structural applications.

Infrastructure development remains another key growth catalyst, particularly in emerging economies. Government-led investments in airports, bridges, roads and other infrastructure networks are creating additional opportunities for steel pipe manufacturers.

Emerging markets

The long-term growth of the steel pipe market is primarily being driven by rapid industrialisation and infrastructure development across emerging regions such as Asia Pacific, the Middle East and Latin America. Continued investments in oil and gas networks, water treatment facilities and transportation infrastructure are expected to generate sustained demand.

The energy sector remains the largest end-use segment, with steel pipes playing a critical role in drilling, exploration and the transmission of crude oil, natural gas and refined petroleum products. At the same time, increasing emphasis on environmental sustainability is supporting adoption, given the recyclability and long lifecycle of steel pipes compared with alternative materials.

A market defined by diverse applications

The steel pipe market is segmented across material types, product categories and end-use industries. Carbon steel pipes continue to account for the largest share of the market, supported by their strength and cost efficiency, while stainless steel pipes are gaining traction in applications requiring superior corrosion resistance and extended product life.

By product type, the market comprises welded and seamless pipes. Seamless pipes are preferred for high-pressure and critical applications, particularly in the oil and gas sector, owing to their superior strength and reliability. Welded pipes, meanwhile, are widely used in construction and general industrial applications.

Key end-use sectors include oil and gas, construction, automotive, manufacturing, water treatment and power generation, with the energy sector remaining the largest and most significant consumer.

Technology raises the performance bar

Technological advancements continue to reshape the industry, with innovations in high-frequency welding, corrosion- resistant materials and seamless pipe manufacturing enhancing product quality, durability and operational performance.

Increasing focus on quality and durability is driving the development of pipes capable of withstanding extreme environments and demanding industrial applications. The emergence of smart steel pipes embedded with sensors is also enabling real-time monitoring, predictive maintenance and improved asset management, particularly across critical infrastructure.

Meanwhile, emerging technologies such as 3D printing are beginning to influence the sector by enabling complex designs, reducing waste and offering greater customisation, with the potential to transform future manufacturing processes.

Indias steel pipe opportunity expands

Indias steel pipe market continues to exhibit strong long-term growth potential. The market reached 14.6 million tonnes in 2025 and is expected to grow to 28.7 million tonnes by 2034, registering a CAGR of 7.41% during 2026-2034.

Growth is expected to be driven by infrastructure expansion, rising oil and gas exploration, expanding transportation networks, increasing export opportunities, supportive government policies and continued advancements in manufacturing technologies and sustainable production practices.

Seamless pipes gain momentum

Demand for seamless pipes is gaining momentum due to their superior strength, durability and ability to withstand high-pressure and critical applications, particularly across the oil and gas and infrastructure sectors.

Government-led initiatives such as the Pradhan Mantri Urja Ganga project, along with rapid urbanisation and industrialisation, are further accelerating demand for high-quality pipes across construction, water and gas distribution networks.

Increasing investments in advanced manufacturing technologies and the expanding applications of seamless pipes across automotive, power and engineering sectors are expected to support sustained market growth.

Sustainability

Sustainability is emerging as a key priority for the steel pipe industry, with manufacturers adopting eco-friendly production methods and advanced technologies such as electric arc furnaces and hydrogen-based steelmaking to meet evolving emission norms.

The growing adoption of recyclable, corrosion-resistant and coated pipes, including galvanised and epoxy-coated variants, is enhancing product durability, extending service life and reducing lifecycle environmental impact.

Supported by government initiatives promoting green steel and circular economy practices, the industry is steadily transitioning towards more energy-efficient, low-carbon and sustainable production processes.

Innovation drives the next phase

The market is also evolving through sustained investments in R&D, particularly in corrosion-resistant materials, advanced alloys and innovative pipe designs that enhance product performance and reliability.

Manufacturers are expanding production capacities to meet rising domestic and export demand, while advancements in welding technologies and automation are improving operational efficiency, product quality and cost competitiveness.

Strategic collaborations between pipe manufacturers and infrastructure developers are further strengthening supply chain integration. At the same time, the adoption of recyclable materials and green manufacturing practices is gaining prominence, reflecting the industrys continued shift towards a more sustainable and technology-led future.

Steel tube industry overview

The steel tube industry forms an integral part of Indias industrial value chain, catering to a wide range of applications across manufacturing, transportation, utilities, construction, engineering and infrastructure. Over the years, the industry has evolved from a largely commodity- driven market to one increasingly focused on quality, precision engineering and application-specific solutions.

Supported by accelerating industrialisation and sustained investments across core sectors, steel tubes continue to play a pivotal role in strengthening Indias manufacturing capabilities and supporting long-term economic growth.

A market anchored by domestic demand

The Indian steel tube market continues to offer a sizeable market opportunity. Valued at USD 7.64 billion in 2026, the market is projected to reach USD 12.21 billion by 2036, supported by ongoing infrastructure development, urbanisation and industrial expansion.

The market represents a mature yet strategically important industrial segment, closely linked to Indias infrastructure development, energy security and manufacturing expansion. Steel tubes remain indispensable across construction, oil and gas transportation, automotive components and water infrastructure, ensuring steady baseline demand despite moderate overall market growth.

Market stability is primarily supported by continuous investments in urban infrastructure, pipeline modernisation and industrial expansion under national development programmes. While growth remains moderate, consistent demand from public and private sector projects continues to support production volumes and capacity utilisation.

Infrastructure and energy power demand

Sustained investments in infrastructure and the energy sector remain the primary growth drivers for Indias steel tube market. Government-led initiatives covering highways, urban housing, oil and gas pipelines and water distribution networks are generating steady demand, with nearly 55% of total steel tube consumption linked to these sectors.

The ongoing expansion of city gas distribution networks and cross-country pipelines is further driving demand for Submerged Arc Welded and seamless tubes. Given the long-gestation nature of these projects, they provide stable order visibility, support capacity utilisation and reinforce the long-term growth prospects of domestic manufacturers.

Infrastructure development and construction activity are also creating robust demand for steel tubes in structural applications, bridges and high- rise projects. Government initiatives such as the Smart Cities Mission, Bharatmala Pariyojana and Pradhan Mantri Awas Yojana are supporting this momentum.

Construction remains the largest application

The construction sector dominates application-based demand, accounting for nearly 38% of total market revenue. Rapid urbanisation, commercial real estate development and infrastructure expansion continue to drive consumption.

Owing to their superior strength, corrosion resistance, durability and recyclability, steel tubes are increasingly preferred as sustainable and efficient construction materials. Advancements in manufacturing technologies, including high-frequency induction welding and advanced galvanisation processes, have further enhanced durability and performance, making steel tubes well suited for long-term infrastructure applications.

Meanwhile, the oil and gas segment remains stable, supported by ongoing pipeline expansion and refinery upgrades. Demand from the automotive and mechanical engineering sectors is also increasing, supported by rising domestic manufacturing activity.

Water infrastructure opens new opportunities

Significant opportunities are emerging from the replacement of ageing pipeline infrastructure and the expansion of water and sewage networks. Increased government focus on clean water access and sanitation is accelerating project execution across urban and rural areas.

Initiatives such as the Jal Jeevan Mission are driving consumption of steel tubes across water supply and sewage projects. The resulting demand for durable, corrosion-resistant and large- diameter tubes is expected to provide manufacturers with stable, long-term growth opportunities.

Replacement demand for ageing pipelines and industrial equipment is also expected to support long-term consumption, particularly for seamless and ERW tubes.

Moving up the value chain

The Indian steel tube market is witnessing a gradual shift towards value- added and application-specific products. Manufacturers are increasingly focusing on high-strength, corrosion-resistant and precision-engineered tubes to meet evolving industry requirements.

Demand from automotive and mechanical engineering applications is increasingly centred on lightweight, high-performance products, while the construction sector continues to require structural and galvanised tubes.

This transition towards higher-value products is enabling manufacturers to strengthen product differentiation, improve profitability and enhance margins in an otherwise mature and moderately growing market.

Strong domestic ecosystem supports competitiveness

Indias emphasis on self-reliance in manufacturing has strengthened domestic steel tube production capabilities and competitiveness. Local manufacturers benefit from close proximity to raw materials, established steel ecosystems and steadily improving logistics infrastructure, enhancing operational efficiency and supply chain resilience.

While export demand remains subject to global pricing pressures and evolving trade dynamics, robust domestic consumption continues to anchor market resilience through 2034.

Managing raw material and margin pressures

Despite the favourable demand outlook, the industry continues to face challenges from volatile raw material prices, particularly iron ore and coking coal, which directly affect production costs. Competitive pressures often limit manufacturers ability to pass on these cost increases, with smaller players being more vulnerable due to limited risk management capabilities.

Margin pressure is further intensified by competition across both organised and unorganised segments, particularly in commoditised categories such as ERW pipes and galvanised tubes.

Western India leads the market

The Western region dominates the Indian steel tube market, accounting for around 34% of the market in 2025. Its leadership is supported by the strong presence of major steel producers, high industrial activity and proximity to ports, enabling efficient movement of raw materials and supporting exports.

Maharashtra and Gujarat serve as key hubs for steel tube manufacturing, oil and gas infrastructure and automotive production. While the West maintains its leadership, the Southern region is emerging as a faster-growing market, driven by increasing infrastructure investments and the expansion of industrial corridors.

A market positioned for long- term growth

Indias steel tube market is witnessing steady growth, supported by infrastructure expansion, energy investments, urbanisation and rising manufacturing activity. The combination of sustained public and private sector spending, replacement demand, expanding water and gas networks and the shift towards value-added products is creating a resilient growth platform.

As India continues to strengthen its infrastructure and manufacturing ecosystem, steel tubes are expected to remain a critical enabler of the countrys industrial and economic development. The industrys ability to move towards higher-value applications, improve manufacturing efficiency and leverage emerging opportunities across energy, infrastructure, water, automotive and engineering will be central to unlocking its next phase of growth.

Growth drivers

Infrastructure at the core: Infrastructure continues to the primary driver of steel consumption in India, accounting for nearly 65% of total demand. Continued investments in highways, railways, metro networks, industrial corridors, ports, power transmission, and urban redevelopment are expected to sustain steady demand for both long and flat steel products over the medium to the long term demand.

The housing sectors further supports this growth trajectory, with affordable and mid-income housing in urban and semi-urban markets is driving demand for rebars, structural steel, roofing, and fabricated components. Collectively, infrastructure and housing are estimated to contribute around 25-30% of incremental steel demand in the country.

Manufacturing and mobility demand:

The manufacturing sector continues to be a significant contributor accounting for 15-20% of Indias steel demand, driven by engineering goods, packaging, and industrial machinery. Additionally, capital goods and automobile manufacturing account for another 10-15%, supported by increasing demand for lightweight, high-strength, and specialty steel grades. Emerging trends such as electric mobility, logistics infrastructure, renewable energy installations, and data centres are further accelerating steel demand landscape. These sectors are expected to accelerate consumption of value-added flat steel, stainless steel, and precision-engineered products reinforcing the industrys shift towards higher-value applications and advanced steel products.

Per capita consumption as a structural growth driver: Indias per capita steel consumption, at around 115 kilogram, remains well below the global average, indicating significant headroom for growth. As urbanisation accelerates and infrastructure expands across rural and semi-urban regions, this figure is expected to rise to nearly 160 kilogram by 2030. This widening gap highlights a strong long-term structural opportunity, signalling a shift in the steel sector from cyclical growth to a sustained, multi-year expansion phase.

Government capital expenditure:

Rising government capital expenditure continues to support strong construction-driven steel demand. The Union budget FY 2026-27 allocates INR 12.2 lakh crore for infrastructure, more than three times the level of expenditure in FY 2019-20, underscoring the Governments sustained commitment to expanding the countrys infrastructure base. Large-scale investment in highways, bridges and urban infrastructure which requires substantial volumes of steel, along with railway modernisation initiatives including Vande Bharat trains and dedicated freight corridors. These long-gestation projects provide sustained demand visibility and reinforce the long-term growth outlook for the domestic steel industry.

Automotive recovery and EV shift:

Indias automotive sector produced 34.71 million vehicles in FY 2025-26, with passenger car sales reaching a record 4.7 million units representing year-on-year growth of 7.9%. As electric vehicles gain traction, they are altering steel demand patterns, with increased need for high- strength steels for lightweight structures and battery enclosures, as well as non- grain-oriented electrical steels used in motors and generators.

Structural drivers supporting long-term steel demand: Indias growing urban population is expected to reach 630 million by 2030 and is creating sustained demand for housing, commercial spaces, and urban infrastructure, there underpinning long-term steel consumption. Government initiatives such as smart cities missions, logistics infrastructure development, and port modernisation are further broadening demand for both flat and structural steel. Additionally, policy- led drivers are strengthening demand visibility. The National Monetisation Pipeline is expected to unlock INR 5.8 lakh crore in private sector investments, boosting construction activity. At the same time increased indigenisation in defence and aerospace is driving demand for specialised high performance steel grades, while flagship schemes like Make in India and PLI are continue to strengthen domestic manufacturing, supporting higher consumption of flat steel and other value-added products across a wide range of industries.

(Source: The Times of India, I MARC, PIB)

Company overview

Sambhv Steel Tubes Limited is a leading domestic manufacturer of ERW Pipes, Galvanized products and Stainless steel coils, with two strategically located, backward-integrated manufacturing facilities in Raipur, Chhattisgarh. The Company operates fully backward integrated facilities capable of producing narrow-width HR coils in-house using advanced, industry-first technology, Stainless Steel coils with precision engineering and Pre-galvanized coils and pipes using Non-Ox technology.

This integrated facility enhances operational efficiency, quality control, and cost competitiveness. The strategic location of its facilities in Raipur is India one of the key steel manufacturing hub, provides significant advantages with close proximity to high-quality coal and iron ore, ensuring reliable raw material availability, lower logistics costs and efficient distribution.

In FY 2025-26, the Company further diversified its portfolio by enhancing installed capacity of galvanized products and improved the capacity utilisation of the stainless steel HRAP and CR coils, leveraging captively produced stainless- steel blooms and slabs. These additions are aligned with rising demand across sectors such as architecture, building and construction (ABC), automobiles, railways and transport (ART), process industries, and consumer goods.

SWOT analysis Strengths

The only Indian player with a single- location, fully backward-integrated ERW pipe facility, enabling end-to-end in-house production of key intermediates such as sponge iron, slabs, and HR coils, ensuring superior cost and quality control.

One of the few domestic producer of narrow-width hot rolled coils through

a secondary steelmaking route (DRI + induction furnace), providing a distinct advantage in niche applications.

Captive WHRB and AFBC power plants efficiently utilize waste heat and other by-products for energy generation, enhancing cost efficiency and sustainability.

Strategic location in Chhattisgarh, close to coal and high-grade iron ore reserves, ensures raw material security, lower logistics costs, and supply chain stability.

A well-established dealer-distributor network across 15 states and 1 Union Territory supports consistent market access, with stable double-digit operating margins.

Weaknesses

Despite strong operational capabilities, the Company holds only ~3% market share in the ERW pipe segment, reflecting limited penetration in a fragmented and competitive industry.

Manufacturing operations are concentrated in Raipur, Chhattisgarh, which, while efficient, exposes the Company to regional risks such as local disruptions, policy changes, or natural events.

Compared to larger integrated steel players, the Company has relatively lower brand visibility and recall among institutional buyers and large infrastructure contractors.

Limited access to affordable, high- quality steel scrap results in reliance on sponge iron for primary steelmaking, reducing flexibility amid the global shift toward scrap-based EAF routes.

Opportunities

Domestic Structural Tube demand is expected to grow at 8-9% CAGR (FY25- FY29), reaching 18-20 MTPA, driven by investments in urban infrastructure and irrigation.

Government initiatives such as Jal Jeevan Mission and Har Ghar Nal Yojana are set to boost demand for water infrastructure.

Rising demand for stainless steel coils (7-9% CAGR) across oil & gas, automotive, and infrastructure sectors.

Increasing focus on value-added offerings, including corten steel pipes,

GP pipes with advanced threading, and eco-friendly door frames.

Portfolio diversification into products like SS HRAP coils, CRFH pipes, and

GP coils catering to applications such as plumbing, irrigation, construction, firefighting, telecom, fencing, and signage.

Targeted growth in GP pipes with higher corrosion resistance requirements for coastal regions.

Export potential in GI, GP, and ERW pipes.

Threats

Volatility in iron ore and coal prices, influenced by global commodity cycles and domestic policies, may impact input costs and margins despite backward integration.

Intense competition from large integrated players and low-cost regional manufacturers could exert pricing pressure and compress margins in ERW and HR coil segments.

Stricter environmental regulations, particularly for induction furnace and DRI-based operations, may require additional capital investment for compliance and green transition.

Rapid technological advancements in steelmaking, including AI-driven quality systems and low-carbon processes, necessitate continuous upgrades to remain competitive.

Geopolitical risks, trade barriers such as anti-dumping measures, and currency volatility could affect export competitiveness and disrupt global supply chains.

Risk and mitigation

Financial review

Revenues: Revenue from operations grew by 59.67%, increasing from INR 15,113.55 million in FY 2025 to INR 24,132.43 million in FY 2026 due to increase in sales volume of Finished Goods. Meanwhile, other income rose by 12.33% due to gain on MTM gain.

Expenses: Driven by higher sales volumes, total expenses increased by

54.90%, from INR 14,388.85 million in FY 2024-25 to INR 22,287.68 million in FY 2025-26, remaining below the 59.67% growth in revenue. The increase was primarily attributable to higher raw material consumption in line with increased production and sales volumes, along with higher employee benefit expenses to support business growth.

Cost of goods sold, which constituted 71.35% of revenue, grew by 61.76% from H 10,644.69 million to H17,219.15 million, largely driven by increase in cost of material consumed. Employee expenses, accounting for 5.57% of revenue, increased by 52.02%, rising from H884.21 million to H 1344.18 million during the year.

(INR in million)

Particulars	FY 2025-26	FY 2024-25
Net sales/Income from operations	24,132.43	15,113.55
Other income	72.88	64.88
Total income	24,205.31	15,178.43
Total expenses excluding finance cost and depreciation	21,369.44	13,567.24
Operating EBITDA	2,762.99	1,546.31
EBITDA margin (%)	11.45	10.23
Depreciation	485.08	343.83
Finance cost	433.16	477.78
Profit before tax (PBT)	1,917.63	789.58
Provision for tax	484.95	209.14
Profit/Loss after tax (PAT)	1,432.68	580.44
PAT margins (%)	5.94	3.84

Key ratios

Particulars	FY 2025-26	FY 2024-25
EBlTDA/turnover (%)	11.45	10.23
Debt/Equity ratio (times)	0.36	1.08
Return on Equity (%)	18.47	12.42
Book value per share (H)	10	10
Earnings per share (H)	5.09	2.41
Debtors turnover (days)	34	35
Inventory turnover (days)	67	61
Creditors turnover (days)	84	78
Working capital (days)	17	18
Interest coverage ratio (x)	5.43	2.65
Current ratio (times)	1.30	0.96
Net profit margin (%)	5.94	3.84

Human resource

At Sambhv Steel, human resource practices are central to operational excellence and long-term readiness. The Company invests in the overall development of its workforce through structured training, on-the-job learning, and cross-functional exposure. It promotes a culture of continuous improvement by offering meaningful roles, encouraging open communication, and fostering a collaborative work environment.

With a strong emphasis on internal talent development, Sambhv Steel remains committed to nurturing future leaders from within. As of March 31,2026, the Company has a total of 2303 people across its manufacturing and corporate operations.

Internal control system and their adequacy

The Company has established a robust internal control framework aligned with the scale and nature of its operations. The Board of Directors provides oversight, setting guidelines to ensure the systems adequacy, effectiveness, and consistent implementation. Designed to support efficient management and enable accurate monitoring and verification of performance, the framework leverages ERP to ensure reliable accounting and management information. The system also ensures compliance with applicable laws and regulations while safeguarding the Companys assets. Its core objective is to proactively identify and manage risks across operational, financial, economic, and compliance areas.

Cautionary statement

This statement made in this section describes our Companys objectives, projections, expectation and estimations which may be forward looking statements within the meaning of applicable securities laws and regulations. Forward- looking statements are based on certain assumptions and expectations of future events. Our Company cannot guarantee that these assumptions and expectations are accurate or will be realised by our Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of our Company. our Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments.