Sampat Aluminium Ltd Management Discussions

OF OPERATIONS

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factors.

BUSINESS OVERVIEW

We are engaged in the manufacturing of aluminium long products, primarily through the procurement of Aluminium ingots, rods, wires and also by recycling of aluminium scrap. We manufacture a wide range of continuously cast and hot-rolled aluminium products, utilizing the ‘Properzi process. Our Product Portfolio consists of Aluminium Wire of 5.5 MM and 6.5 MM and Aluminium Rods of 7.5 MM, 9.5 MM, 12.5 MM, 16 MM & 20 MM tailored made to meet customer specifications.

Our Key Performance Indicators for the last three Fiscals are as follows:

Key Performance Indicator	As on July 31, 2025	Financial Year 2025	Financial Year 2024	Financial Year 2023
Revenue from Operations	5,228.31	13,271.85	14,701.30	12,922.11
EBITDA	511.20	1154.86	1049.79	266.25
EBITDA Margin (%)	9.78	8.70	7.14	2.06
PAT	335.25	693.35	657.99	142.11
PAT Margin (%)	6.41	5.22	4.48%	1.10%
ROE (%)	13.87%	42.42%	95.34%	48.44%
ROCE (%)	10.00%	23.13%	32.04%	11.36%

Explanation for KPI metrics

KPI	Description
Revenue from Operations	Revenue from operations represents the total turnover of the business as well as provides information regarding the year over year growth of our Company
EBITDA	EBITDA provides information regarding the operational efficiency of the business and is considered by the management as an important element to monitor business growth in absolute term irrespective of the sales mix.
EBITDA Margin (%)	EBITDA Margin is an indicator of the operational profitability and financial performance of our business.
PAT	Profit after tax provides information regarding the overall profitability of the business.
PAT Margin (%)	PAT Margin is an indicator of the overall profitability and financial performance of our business in reference to the turnover.
ROE (%)	RoE provides how efficiently our Company generates profits from shareholders funds
ROCE (%)	RoCE provides how efficiently our Company generates earnings from the capital employed in the business.

FACTORS AFFECTING OUR RESULT OF OPERATIONS

Except as otherwise stated in this Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies.

We may not be able to sustain our historical growth rates, and our historical performance may not be indicative of our future growth or financial results.

Any change in government policies resulting in increases in taxes payable by us.

We have entered into related party transactions in the past and may continue to do so in the future.

Our ability to retain our Key Management Personnel and other employees.

Changes in laws and regulations that apply to the industries in which we operate.

Companys ability to successfully implement its growth strategy and expansion plans.

Failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate.

Conflicts of interest with the promoter group and other related parties.

Failure to successfully upgrade our product portfolio, from time to time.

We may face significant competition in our business. An inability to compete effectively may lead to loss of business or reduced operating margins.

Price of raw materials procured by vendors

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

For details in respect of Statement of Significant Accounting Policies, please refer to the chapter titled "Restated Financial Statements" beginning on page 158 of this Red Herring Prospectus.

RESULTS OF OUR OPERATIONS:

Particulars	For the period ended July 31, 2025	% of Total Income	For the year ended March 31, 2025	% of Total Income	For the year ended March 31, 2024	% of Total Income	For the year ended March 31, 2023	% of Total Income
Revenue from Operations	5,228.31	99.97	13,271.85	99.79	14,701.30	98.72	12,922.11	98.62
Other Income	1.32	0.03	28.04	0.21	191.14	1.28	181.10	1.38
Total Income	5,229.63	100.00	13,299.89	100.00	14,892.44	100.00	13,103.21	100
Expenditure
Cost of Material Consumed	4,389.93	83.94	11,899.87	89.47	13,430.42	90.18	12,732.87	97.17
Change in Inventories	157.77	3.02	(58.44)	(0.44)	(22.71)	(0.15)	(178.25)	(1.36)
Manufacturing Expenses	103.86	1.99	189.61	1.43	329.66	2.21	210.84	1.61
Employee Benefit Expenses	32.4	0.62	84.96	0.64	79.88	0.54	54.46	0.42
Finance Costs	58.9	1.13	216.42	1.63	160.01	0.01	57.73	0.44
Depreciation and Amortization Expenses	3.49	0.07	10.8	0.08	9.50	0.06	17.05	0.13
Other Expenses	34.47	0.66	29.03	0.22	25.40	0.17	17.04	0.13
Total expenses	4,780.82	91.42	12,372.25	93.03	14,012.16	94.22	12,911.74	98.54
Restated profit/(Loss) before Exceptional and Extraordinary Item and Tax	448.81	8.58	927.64	6.97	880.28	5.78	191.47	1.46
Exceptional Item	-	-	-	-	-		-	-
Restated profit/(Loss) before Extraordinary Item and Tax	448.81	8.58	927.64	6.97	880.28	5.78	191.47	1.46
Extraordinary Item	-	-	-	-	-	-	-	-
Restated profit/(Loss) before Tax	448.81	8.58	927.64	6.97	880.28	5.78	191.47	1.46
Tax Expenses
- Current Tax	111.32	2.13	229.82	1.73	216.54	1.45	46.51	0.35
- Deferred Tax	2.24	0.04	4.47	0.03	5.75	0.04	2.85	0.02
Total Tax Expense	113.56	2.17	234.29	1.76	222.29	1.49	49.36	0.38
Restated profit/(Loss) after Tax	335.25	6.41	693.35	5.21	657.99	4.29	142.11	1.08

KEY COMPONENTS OF COMPANYS PROFIT AND LOSS STATEMENT

Revenue from operations: Our revenue of operation comprises of sale of goods and services.

Other income: Other income comprises of interest income, discount income, liquidity damages, sundry balances written off, loyalty income, insurance received, profit on sale of assets, VAT refund, foreign exchange gain and short term capital gain on mutual fund.

Expenses: Our expenses include cost of material consumed, change in inventories, manufacturing expenses, employees benefit expenses, Finance costs, depreciation and amortisation expense and other expenses.

Cost of material consumed: It include purchases of material, , quality/rate difference.

Change in Inventories: Changes in inventories denotes the difference between opening and closing balance of finished goods.

Manufacturing expenses: Manufacturing expense of our company includes power, fuel & utilities, stores & spares consumed, repairs and maintenance of machinery and other manufacturing expenses.

Employee benefits expense: The employees benefit expenses included salary & wages, contribution to provident & pension/other funds, gratuity expenses, staff welfare expenses and directors salary.

Finance cost: The finance cost denotes bank charges, interest expense on bank borrowings, interest expense on others and interest on income tax.

Depreciation and amortization expense: Depreciation includes depreciation on Property, Plant & Equipment.

Other Expenses: Other Expenses includes Audit fees, legal & professional fees, fuel and conveyance expenses including travelling expenses, stationery & printing expenses, insurance expenses, loss on sale of assets, sale promotion expenses, outward freight charges (including diesel of trucks), discount /rebate/commission and other expenses.

Financial Information for the period ended as on July 31, 2025

Revenues

Revenue from Operations

Our Company is mainly engaged in the business of manufacturing aluminium rods and wires. Our revenue from operations for the period ended July 31, 2025 stood at 5,228.31 Lakhs which is 99.97% of the total income.

Other Income

Other Income for the Period ended July 31, 2025 stood at 1.32 Lakhs consisting of 0.03% of total income. The main component of other income comprises of interest income and loyalty income.

Expenditures

Total Expenses

Our total expenses comprise of cost of material consumed, change in inventories, manufacturing expenses, employees benefit expenses, finance costs, depreciation and amortisation expense and other expenses. Total Expenses for the Period ended July 31, 2025 stood at 4,780.82 Lakhs which is 91.42% of the total income

Cost on Material Consumed

Our cost on material consumed stood at 4,389.93 lakhs for the period ended July 31, 2025 which is 83.94% of the total income.

Change in Inventories

For the period ended July 31, 2025 the change in inventories of our Company stood at 157.77 Lakhs which is 3.02% of the total income

Manufacturing Expenses

For the period ended July 31, 2025 the manufacturing expenses of our Company stood at 103.86 Lakhs which is 1.99% of total income and is primarily due to power, fuel & utilities, repairs and maintenance of machinery.

Employee Benefit Expenses

The employee benefits expense was 32.40 lakhs which is 0.62% of the total income for the period ended July 31, 2025 based on Restated Financial Information, primarily attributable to salary and wages, and directors salaries.

Finance Costs

Finance Cost for the period ended July 31, 2025 based on Restated Financial Information, primarily attributable to bank charges and interest expenses on bank borrowings and interest expenses on others which stood at 58.90 Lakhs which is 1.13% of the total income.

Depreciation and Amortization Expenses

The Depreciation on Property Plant & Equipment for the Period ended July 31, 2025 stood at 3.49 Lakhs which is 0.07% of the total income.

Other Expenses

The other expenses were 34.47 lakhs for the period ended July 31, 2025 based on Restated Financial Information, primarily due to legal & professional fees, insurance expenses and outward freight charges which is 0.66% of the total income.

Profit and Taxes

Restated profit/(loss) before tax

In line with above discussions, the restated profit before tax for the period ended July 31, 2025 stood at 448.81 Lakhs

Tax Expenses

Our total tax expense was 113.56 lakhs for the period ended July 31, 2025 comprising of current tax and deferred tax credit.

Restated profit/(loss) after tax

As a result of the foregoing, the Restated profit after tax for the Period ended July 31, 2025 stood at 335.25 lakhs.

Financial year 2025 compared with financial year 2024

Total Income

Total income for the financial year 2024-25 was 13,299.89 Lakhs whereas in financial year 2023-24 it was 14,892.44 Lakhs representing an decrease of 10.69 % which was due to decrease in the volume of sale of products and services and other income by the Company. The total income consists of revenue from operations and other income.

Revenue from Operations

During the financial year 2024-25 the revenue from operation of our Company decreased to 13,271.85 Lakhs as against 14,701.30 Lakhs in the Financial Year 2023-24 representing a decrease of 9.72% which was due decrease in the volume of sale of products and services caused due to the frequent wear and tear of the existing machinery which lead to a decrease in the output of the Company.

Other Income

During the financial year 2024-25 the other income decreased to 28.04 Lakhs as against 191.14 Lakhs in the Financial Year 2023-24 representing a decrease of 85.33% which was primarily due to Interest, trade discount, loyalty and profit on sale of asset.

Cost of Material Consumed

During the financial year 2024-25 the cost of raw material consumed of our Company decreased to 11,899.87 Lakhs as against 13,430.42 Lakhs in the financial year 2023-24 representing a decrease of 11.40% which was due to decrease in the purchase of raw material.

Change in Inventories

During the financial year 2024-25 the inventory of our company increased to (58.44) Lakhs as against (22.71) lakhs in the financial year 2023-24 representing an increase of 157.33% which was due to strategic inventory management in response to sales trends.

Manufacturing Expenses

During the financial year 2024-25 the manufacturing expenses of our Company decreased to 189.61 Lakhs as against 329.66 lakhs in the financial year 2023-24 representing a decrease of 42.48% which was primarily due to consumables store & spares and other manufacturing expenses and power, fuel & utilities.

Employee Benefit Expenses

During the financial year 2024-25 the employee benefit expenses of our Company increased to 84.96 Lakhs as against 79.88 lakhs in the financial year 2023-24 representing an increase of 6.36% which was primarily due to increase in salary and wages staff welfare expenses.

Finance Costs

During the financial year 2024-25 the finance cost of our Company increased to 216.42 Lakhs as against 160.01 in the financial year 2023-24 representing increase of 35.25% which was primarily due to increase in interest expense on bank borrowings, income tax and other financial charges.

Depreciation and Amortization Expenses

During the financial year 2024-25 the depreciation of our company increased to 10.80 Lakhs as against 9.50 Lakhs during the financial year 2023-24. The increase in depreciation was around 13.68% which was due to depreciation in fixed assets.

Other Expenses

During the financial year 2024-25 the other expenses of our company increased to 29.03 Lakhs as against 25.4 Lakhs during the financial year 23-24. The increase in other expenses was around 14.29% which was due to increase in rent expense and other expenses.

Restated profit/(loss) before tax

During the financial year 2024-25 the Profit before tax increased to 927.64 Lakhs as against 880.28 Lakhs during the financial year 23-24. The increase in Profit before tax was around 5.38% which was due to increase in sales and revenue.

Tax Expenses

During the financial year 2024-25 tax expenses of our company increased to 229.82 Lakhs as against 216.54 Lakhs during the financial year 23-24.

Restated profit/(loss) after tax

As a result of the foregoing factors, our profit after tax for the year increased by 5.37% from net profit of 657.99 lakhs in financial year 23-24 to net profit 693.35 lakhs in financial year 2024-25.

Financial year 2024 compared with financial year 2023

Total Income

Total income for the financial year 2023-24 was 14,892.46 Lakhs whereas in financial year 2022-23 it was 13,103.21 Lakhs representing an increase of 13.66 %. The reason of such increase was due to increase in the volume of sales of our products, increase in interest income of our company. The total income consists of revenue from operations and other income.

Revenue from Operations

During the financial year 2023-24 the net revenue from operation of our Company increased to 14,701.30 Lakhs as against 12,922.11 Lakhs in the financial year 2022-23 representing an increase of 13.77% which was due to increase in the sale of aluminium rods from 9,068.07 Lakhs to 10,081.55 Lakhs representing an increase of 11.18% and sale of aluminium wires from 2,793.14 Lakhs to 4,030.77 Lakhs representing an increase of 44.31%

Other Income

During the financial year 2023-24 the other income of our Company increased to 191.16 Lakhs as against

181.10 lakhs in the financial year 2022-23 representing an increase of 5.55% which was due to increase in interest income, liquidity damages and profit on sale on asset.

Cost on material consumed

During the financial year 2023-24 the cost of material consumed of our Company increased to 13,430.42 Lakhs as against 12,732.87 Lakhs in the financial year 2022-23 representing an increase of 5.48% which was due to increase in the purchase of raw material.

Change in Inventories

During the financial year 2023-24 the change in inventories of our Company increased to (22.71) Lakhs as against (178.25) lakhs in the financial year 2022-23 representing an increase of 87.26 % which was due to strategic inventory management in response to sales trends.

Manufacturing Expenses

During the financial year 2023-24 the manufacturing expenses of our Company increased to 329.66 Lakhs as against 210.84 lakhs in the financial year 2022-23 representing an increase of 56.35 % which was primarily due to increase in power, fuel & utility, stores & spares consumed and repairs and maintenance of machinery.

Employee Benefit Expenses

During the financial year 2023-24 the employee benefit expenses of our Company increased to 79.87 Lakhs as against 54.46 lakhs in the financial year 2022-23 representing an increase of 46.66 % which was primarily due to increase in staff welfare expenses and directors remuneration.

Finance Costs

During the financial year 2023-24 the finance cost of our Company increased to 179.37 Lakhs as against 57.73 in the financial year 2022-23 representing increase of 210.69 % which was due to increase in bank charges, interest expense on bank borrowings and interest on income tax.

Depreciation and Amortization Expenses

During the financial year 2023-24 the depreciation of our company was 9.50 Lakhs as against 17.04 Lakhs during the financial year 2022-23 representing decrease of 44.27%.

Other Expenses

During the financial year 2023-24 the other expenses of our company increased to 25.44 Lakhs as against

17.04 Lakhs during the financial year 2022-23. The increase in other expenses was 49.26 % which was due to increase in travelling expenses and outward freight charges.

Restated profit/(loss) before tax

During the financial year 2023-24 the Profit before tax increased to 880.28 Lakhs as against 191.47 Lakhs during the financial year 2022-23. The increase in Profit before tax was around 459.74 % which was due to the increase in sales and revenue.

Tax Expenses

During the financial year 2023-24 tax expenses of our company increased to 222.29 Lakhs as against 49.36 Lakhs during the financial year 2022-23.

Restated profit/(loss) after tax

As a result of the foregoing factors, our profit after tax for the year increase by 349.84 % from net profit 141.92 lakhs in financial year 2022-23 to net profit of 638.42 Lakhs in financial year 2023-24.

Reasons for significant increase in PAT:

Lower Cost of Materials:

Cost of material consumed as % of revenue from operations in FY 2023-24 was 91.36% as compared to 98.54% in FY 2023-24. This reduction was aided by timely purchase and payments by the company on account of additional infusion of funds.

Higher revenue from operations with controlled expenses:

With increase in scale of operations, direct and indirect costs did not increase in the same proportion as increase in revenue from operations. Revenue from operations has increased by 13.77% in FY 2023-24 as compared to FY 2022-23 whereas total expenses including tax expenses has increased by 10.00% in FY 2023-24 as compared to FY 2022-23.

Cash Flows

Particulars	July 31, 2025	2025	2024	2023
Net Cash from Operating Activities	(21.12)	(299.49)	(347.06)	(598.50)
Net Cash from Investing Activities	(8.92)	(327.92)	4.42	(148.32)
Net Cash used in Financing Activities	15.31	332.29	554.64	845.87

Cash Flows from Operating Activities

Net cash from operating activities for the period ended July 31, 2025 was at (21.12) lakhs as compared to the

Profit Before Tax at 448.81 lakhs.

Net cash from operating activities for financial year 2024-25 was at (299.49) lakhs as compared to the Profit

Before Tax at 927.64 lakhs while for financial year 2023-24 net cash from operating activities was at (327.06) lakhs as compared to the Profit Before Tax at 880.28 lakhs.

Net cash from operating activities for financial year 2023-24 was at (347.06) lakhs as compared to the Profit

Before Tax at 880.28 lakhs while for financial year 2022-23 net cash from operating activities was at (598.50) lakhs as compared to the Profit Before Tax at 191.47 lakhs.

Net cash from operating activities for financial year 2022-23 was at (598.50) lakhs as compared to the Profit

Before Tax at 191.47 lakhs

Cash Flows from Investment Activities

For period ended July 31, 2025, the net cash from investing activities was (8.92) lakhs. This was mainly due to increase in other Non-Current Assets.

In the financial year 2024-25, the net cash from investing activities was (327.92) lakhs. This was mainly due to purchase of property plant and equipment and other Non-Current Assets.

In the financial year 2023-24, the net cash from investing activities was 4.42 lakhs. This was mainly due to increase in Investment and Interest Income.

In the financial year 2022-23, the net cash from investing activities was (148.32) lakhs. This was on due to purchase of property plant and equipment and interest income.

The details are as under (Year-wise)

Particulars	July 31, 2025	2025	2024	2023
Payment made for Property Plant & Equipment	-	(48.15)	(17.31)	(142.21)
Proceed from sale of Investment	-	4.60	9.82	-
Interest income	1.31	26.65	17.09	5.99
Other Non-Current Assets	(10.23)	(311.02)	(5.18)	(12.10)
Net cash from investing activities	(8.92)	(327.92)	4.42	(148.32)

Cash Flows from Financing Activities

For the period ended July 31, 2025, the net cash from financing activities was 15.31 lakhs. This was on account of Proceeds from Short term Borrowings.

In the financial year 2024-25, the net cash from financing activities was 332.29 lakhs. This was on account of Proceeds from Share Capital & Share Premium, Repayment of Share Application Money Received, Repayment from Long Term Borrowings and Proceeds from Short term Borrowings.

In the financial year 2023-24, the net cash from financing activities was 535.27 lakhs. This was on account of proceeds of share application money received and long-term borrowings.

In the financial year 2022-23, the net cash from financing activities was 845.86 lakhs. This was on account of, proceeds from short term and long term borrowings.

The details are as under: (Year-wise)

Particulars	July 31, 2025	2025	2024	2023
Proceeds From Share Capital & Share Premium	-	537.00	-	-
Proceeds / (Repayment) of Share Application	-	(300.00)	300.00	-
Money Received
Proceeds from Short term Borrowings	95.44	537.08	-	667.52
(Repayment) from Short term Borrowings	-	-	(28.49)	-
(Repayment) from Long Term Borrowings	(26.27)	(244.31)	-	-
Proceeds from Long Term Borrowing	-	-	423.43	228.17
Interest and finance cost	(53.86)	(197.48)	(140.30)	(49.82)
Net cash flow from financing activities	15.31	332.29	554.64	845.87

OTHER MATTERS

Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity. Except as disclosed in this Red Herring Prospectus there are no unusual or infrequent events or transactions in our Company.

Significant economic changes affecting income from continuing operations

There are no significant economic changes that may materially affect or likely to affect income from continuing operations.

Known trends or uncertainties impacting sales, revenue, or income

Apart from the risks as disclosed under Section "Risk Factors" beginning on page 26 of the Red Herring Prospectus in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

Future changes in the relationship between costs and revenues

Other than as described in the sections "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Conditions and Results of Operations" on pages 26, 112 and 200 respectively of this Red Herring Prospectus to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices

Increases in our revenues are by and large linked to increases in the volume of business.

Total turnover of each major industry segment in which our Company operates

Our business activity primarily falls within a single business segment i.e. Aluminium Rods and wires, as disclosed in "Restated Financial Statements" on page 158 of this Red Herring Prospectus, we do not follow any other segment reporting.

Status of any publicly announced New Products or Business Segment

Except as disclosed in the Chapter "Our Business", on page 112 of this Red Herring Prospectus our Company has not announced any new product or service.

Seasonality of business

Our business is not subject to seasonality.

Any significant dependence on a single or few suppliers or customers

Our Company is significantly dependent on a few suppliers. For further details, refer to the chapter titled "Risk factors" on page 26 of Red Herring Prospectus.

Competitive Condition

Competition is faced by our company from other existing manufacturers of aluminium rods and wires . We engage with our competitors on a regional or product line basis which is unorganized. We believe that the principal factors affecting competition in our business include client relationships, reputation, the abilities of employees, market focus and the relative quality and price of the services and products.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL PERIOD

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed in this Red Herring Prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to affect the business activities, except as disclosed below:

The Company has approved the Restated Financial Statements for the financial year ending March 31, 2025, March 31, 2024, and March 31, 2023 in the Board meeting dated August 28, 2025.

The Company has approved the Financial Statements for the period March 31, 2025 and period ended July 31, 2025 on July 16, 2025 and August 22, 2025 respectively.

Our Company has approved the Red Herring Prospectus vide resolution in the Board Meeting dated September 09, 2025.