Sandur Manganese & Iron Ores Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

GLOBAL ECONOMY

The global economy in 2026 confronts a renewed challenge, this time from the outbreak of war in the Middle East at the end of February. The conflict arrived less than a year after the realignment of United States trade policy, with the transition to a new international trade system still underway, and it has inflicted humanitarian costs, damaged critical infrastructure, and disrupted maritime and air traffic in the affected region. Economies worldwide are exposed through higher commodity prices, second-order effects on inflation expectations, and risk-off sentiment in financial markets, with commodity & energy-importing emerging markets and developing economies as the most vulnerable. Further, currency depreciation compounds the impact of costlier energy and food.

As per the last International Monetary Fund (IMF) 2026 World Economic Outlook, the global economy entered the year on a firmer footing, expanding by an estimated 3.4% in 2025. Under the forecast, which assumes a relatively short-lived conflict, global growth is projected to slow to 3.1% in 2026 and 3.2% in 2027, below recent outcomes and well under the prepandemic average. Advanced economies are expected to grow by 1.8% in 2026 and 1.7% in 2027, while emerging market and developing economies are projected at 3.9% in 2026 before recovering to 4.2% in 2027. Global headline inflation is expected to rise from 4.1 % in 2025 to 4.4% in 2026, before easing to 3.7% in 2027, with pressures concentrated in commodity-importing developing economies. The oil price, which averaged $67.74 per barrel in 2025, is assumed to rise to about $82 per barrel in 2026 as production and transport disruptions take hold.

Downside risks dominate the outlook. A longer or broader West Asia conflict, deeper geopolitical fragmentation, disappointment over productivity gains from Artificial Intelligence (Al) investments, or renewed trade tensions could weaken growth and destabilise financial markets, while elevated public debt and

eroding policy buffers add to the vulnerability. In an adverse scenario of prolonged energy disruption, global growth is expected to fall to 2.5% in 2026 and inflation rises to 5.4%. In a severe scenario, growth slows to 1.8% in 2026, close to global recession territory, with inflation reaching 5.8%, before output growth remains subdued at 2.2% in 2027.

Central banks face a more complex trade-off between supporting growth and containing renewed inflation, and the scaling- up of defence spending prompted by rising geopolitical tensions. While being supportive of near-term activity, central banks risks higher inflation, weaker fiscal positions, and the crowding-out of social spending.

Overall, the world economy enters 2026 navigating a negative supply shock against a backdrop of structural constraints and elevated uncertainty, with the path ahead depending heavily on the duration and scope of the conflict and on the quality of the policy response.

REAL GROSS DOMESTIC PRODUCT (GDP) - ANNUAL CHANGE (%)

Source: IMF- World Economic Outlook - April 2026 \ (P) stands for Projections

Region	2025	2026 (P)	2027 (P)
Global Growth	3.4%	3.1%	3.2%
United States	2.1%	2.3%	2.1%
Euro Area	1.4%	1.1%	1.2%
Middle East & Central Asia	3.6%	1.9%	4.6%
Emerging & Developing Asia	5.5%	4.9%	4.8%
Latin America & the Caribbean	2.4%	2.3%	2.7%
Sub-Saharan Africa	4.5%	4.3%	4.4%
India	7.6%	6.5%	6.5%

INDIAN ECONOMY

India enters FY27 at the intersection of domestic resilience and external turbulence. The outgoing year, FY26, delivered real GDP growth of 7.6%, the strongest in recent years, which had encouraged a forecast of 7.0% to 7.4% for FY27 before the macroeconomic outlook was altered by the outbreak of the West Asia war at the end of February 2026. India nonetheless remains a relative bright spot in an uncertain global setting. The IMFs April 2026 World Economic Outlook raised Indias growth forecast for FY27 to 6.5%, an upward revision of 0.1 % point over its January 2026 estimate, supported by strong carry-over momentum from FY26, a reduction in United States tariffs on Indian goods from 50% to 10%, and resilient domestic demand. Indias policy buffers, sound financial system, and sustained public investment provide a degree of insulation against the shock.

High-frequency indicators point to continued resilience, with some signs of stress in March 2026. E-way bill generation reached an all-time high of 140.6 million in March 2026, although Year on Year growth has moderated from its November 2025 peak. The Manufacturing Purchasing Managers Index (PMI) eased to 53.9 in March 2026 from 56.9 in February, and the Services PMI moderated to 57.5, with both remaining in expansionary territory. The Index of Eight Core Industries declined marginally by 0.4% in March 2026, taking full-year FY26 growth to 2.6%, against 4.5% a year earlier, as the West Asia crisis weighed on energy and input supply chains.

Inflation remained moderate at the consumer level, with retail inflation at 3.4% in March 2026 and core inflation stable at around 3.7%, aided by measures to shield households from higher fuel prices. However, the wholesale price index rose from 2.1% in February to 3.9% in March, signalling emerging cost-push pressures that could transmit to consumer prices if supply disruptions persist. Against this backdrop, the Reserve Bank of India maintained a cautious stance, keeping the repo rate unchanged at 5.25% while monitoring second-round effects. System liquidity remained in surplus, and bank credit grew by 17.1% Year on Year as of 31 March 2026 on a broad-based footing, with financial stability indicators remaining strong.

Indias external sector demonstrated resilience through FY26. Total exports of goods and services rose by 4.2% Year on Year to a record $860.1 billion, services exports crossed $400 billion for the first time to reach $418.3 billion, and non-petroleum exports touched a historic high of $387.8 billion. The effects of the West Asia crisis were nonetheless visible in March 2026, when total exports and imports declined by 4.6% and 5.7% Year on Year (YoY) respectively.

The outlook is shaped by both opportunity and risk. The conflict represents a supply shock, with elevated energy, fertiliser, and industrial input prices threatening to raise inflation and to pressure fiscal and external balances, while a below-normal Southwest monsoon, linked to possible El Nino conditions, poses an additional risk to food prices. To temper these pressures, the Government has increased gas allocation to fertiliser production, waived customs duty, and raised the nutrient-based subsidy for the Kharif season. The Second Advance Estimates for FY26 nonetheless project record foodgrain output. With strong domestic fundamentals and a tradition of strategic autonomy, India is positioned to convert a multipolar global order into durable economic gains, while policy is expected to safeguard medium- term fiscal and external stability.

MARKET OVERVIEW

The global manganese ore market recovered in 2025 after the disruptions of the previous year, with the industry remaining resilient on the strength of demand from China and India. Global manganese ore production rose by 10% on a manganese-content basis to 21.4 Million Tonnes (MT), its highest level since 2021, supported by the return of Australian output and contributions from all major producing regions like Gabon, Ghana, and South Africa. The recovery was reflected in a 10% rise in Chinas wet-basis imports and in rising inventories at miners.

Supply growth was broad-based. South Africa, the worlds largest producer, lifted output by an estimated 6%, while Gabon grew by 2%, Ghana by 10%, and Australia rebounded sharply by 94% as the GEMCO mine in northern Australia, suspended in 2024 after a tropical cyclone, resumed operation in May 2025. Together, these four countries accounted for 81% of global output, with South Africa alone contributing 46%, followed by Gabon at 19%, Australia at 9%, and Ghana at 7%. India, both a major producer and consumer, expanded output by 17%, while Brazil and Ivory Coast grew by 20% and 24% respectively, and China remained broadly stable. Grade dynamics shifted during the year. High-grade ore (>44% Mn) was broadly in line with the previous year, while mid-grade plus material (>40% and <44% Mn) rebounded sharply by 40% on Australias recovery. Mid-grade minus ore (>30% and <40% Mn) and low-grade ore (<30% Mn) rose by 8% and 7% respectively.

On the demand side, the market was shaped by continued weakness in global steel output. Global crude steel output is estimated to have declined by 1.1% to 1.93 billion tonnes in 2025, its second consecutive annual contraction, while the World Steel

Association estimated that global finished steel consumption was unchanged from 2024. Production in China, the worlds largest steel producer and manganese consumer, fell by 2.4% to about 1.04 billion tonnes amid persistent property-sector weakness, even as Chinese steel exports rose by 6% to a record high. India bucked the trend, posting a robust 10% increase in crude steel production. With steelmaking accounting for the bulk of manganese consumption, the soft global steel backdrop weighed on prices: the year-to-date average spot price for 44% grade manganese ore from China was down 22% in October 2025 against the 2024 annual average, with the price on a manganese- content basis (CIF China) easing to about $4.50 per metric tonne unit from $5.53 in 2024.

The strategic importance of manganese remained intact. Manganese is consumed predominantly by the steel industry, with demand closely following steel output; roughly 96% of manganese ore consumption is directed into steelmaking, either directly in pig iron production or through upgrading to ferroalloys, while beyond metallurgy it is used in animal feed, fertilisers, brick colorant, and dry cell batteries. The metal has no satisfactory substitute in its major applications, and global reserves on a manganese- content basis stand at about 1.8 billion tonnes, with South Africa accounting for an estimated 70% of the worlds manganese resources. Demand for high-purity manganese in batteries continued to grow, with consumption across all battery types estimated at about 370,000 tonnes of manganese in 2025, led by the China-centric lithium manganate (LMO) chemistry, although this segment remains a small share of total consumption. The approach of the definitive period of the European Unions Carbon Border Adjustment Mechanism (CBAM) in January 2026 added a further regulatory dimension for producers. India remains the 5^th largest producer of manganese ore, and the 2^nd largest consumer after China. According to the Ministry of Mines, Government of India, Indias estimated production stood at 3.58 MT in FY2025-26, a decrease of about 5.81% over the previous year.

Amongst merchant miner, the public sector producer MOIL continued to be the largest domestic producer, followed by Tata Steel, Gudur Sasidhar Reddy Mines, and SMIORE, with Maharashtra (32,80%), Madhya Pradesh (29,75%), Odisha (15.97%), and Andhra Pradesh (12.41%) the leading producing states. India nonetheless remains a significant net importer of manganese ore, underscoring the demand- supply gap and the anticipated acceleration in manganese demand as the country advances toward its 300 MT steel production goal.

Looking ahead, the fundamentals of the manganese ore market remain sound, anchored by the metals irreplaceable role in steelmaking and its growing relevance to clean energy technologies. Recovering supply, shifting grade dynamics, the gradual emergence of battery demand, and the increasing prominence of strategic regulatory frameworks are likely to shape the market in the years ahead.

Source: International Manganese Institute 2025 Annual Review; Ministry of Mines, Government of India; Mineral Commodity Summaries 2026, U.S. Geological Survey

MARKET OVERVIEW

The global iron ore market saw significant change in 2025, marked by a move toward lower- grade specifications and trade disruption from Chinese import curbs. Major Australian producers shifted their cargoes to lower- grade specifications, and from the second quarter of 2025 the seaborne benchmark transitioned to a 61 % Fe basis from the longstanding 62% Fe.

Prices were volatile through the year. Amid record shipments and persistently weak steelmaking margins, with buyers penalising lower-iron, higher-impurity material, spot seaborne iron ore fell to a year-low of $92.75/Dry Metric Tonnes (DMT) on 18 June, as per S&P Global. As steel margins recovered over June and July on the back of falling coking coal and coke prices in China, demand returned and prices firmed through the rest of the year. The Platts IODEX (published by S&P Global Energy) averaged S102.37/DMT CFR China in 2025, above the $100/DMT threshold for most mills. On a comparable basis, the U.S. Geological Survey (USGS) reported the 62% Fe fines price (CIF Tianjin) averaging $99.07 per tonne over the first nine months of 2025, down from $112.07 in the same period of 2024. Chinas portside iron ore prices held above seaborne levels for much of the year, and the free-storage period at major Chinese ports was shortened to 30 days from 2026 in a move to curb hoarding.

Underlying demand was subdued. The World Steel Association estimated global finished steel demand to be unchanged in 2025 registering no growth, as a decline in Chinese steel demand was offset by growth in developing economies including India, Egypt, Saudi Arabia, and Vietnam. On the supply side, the ramp-up of the Simandou project in Guinea has been slower than initially announced, with S&P Global Commodity Insights projecting only about 15 to 20 MT of exports from the project in 2026 and expecting prices to remain resilient in the first half of 2026. Global mine production continued to be led by Australia and Brazil, with India and China the next-largest producers.

In India, iron ore remained the single largest mineral by value, accounting for around 70% of the value of minerals governed by the Mineral Conservation and Development Rules. India is the worlds third-largest iron ore producer. According to the Ministry of Mines, estimated iron ore production stood at about 289.19 MT in FY2025-26, a decrease of 1.56% over the previous year, with NMDC, SAIL Odisha Mining Corporation, Tata Steel, Lloyds Metals, JSW, and Rungta among the major producers.

Production momentum nonetheless remained firm, with cumulative output over April to February of FY26 reaching 278.01 MT against 263.50 MT a year earlier, as per India Brand Equity Foundation (IBEF). More than 85% of Indias iron ore reserves are of medium to high grade and are used directly in blast furnace and direct reduced iron (DRI) production. As the worlds second- largest crude steel producer, with crude steel output of 153.6 MT over April to February of FY26, Indias iron ore demand remains underpinned by a steel sector advancing toward its 300 MT capacity goal.

In all, 2025 was defined by a structural shift toward lower-grade, 61% Fe-based pricing, by trade realignment driven by Chinese import curbs, and by the prospect of incremental seaborne supply from Simandou. For India, steady production growth and a resilient steel sector continue to anchor domestic iron ore demand.

MARKET OVERVIEW

The ferroalloys industry remained closely tied to the steel cycle, with manganese alloy production proving resilient even as global steel output slipped by 1 % for a second consecutive year. Global silicomanganese production edged up by about 1 % to nearly 16.4 MT, high- carbon ferromanganese rose 2% to close to 4 MT, and refined ferromanganese jumped 11% to a record of roughly 1.8 MT, while electrolytic manganese metal output grew about 10% to 1.44 MT. Growth across the manganese alloy segment was led principally by China and India. The backdrop, however, was a soft one: global crude steel output is estimated to have declined for a second consecutive year in 2025, weighed down by continued property- sector weakness in China, even as India sustained double-digit growth in crude steel production. Ferroalloys are indispensable to steelmaking, where they act as deoxidisers and alloying agents that remove impurities and impart strength, hardness, and corrosion resistance, so their demand moves broadly in line with crude and alloy steel production.

The broader ferroalloys market spans a wide range of products whose demand is anchored to the global steel industry, particularly in the Asia-Pacific region, which dominates both steel output and consumption. Rising demand for high-strength, low-alloy steels across automotive, construction, machinery, and energy applications, together with sustained infrastructure and urbanisation spending in emerging economies such as China and India, continues to underpin long-term ferroalloy demand. Government-led infrastructure programmes in these markets translate directly into higher steel and, in turn, ferroalloy requirements. Asia accounts for the bulk of global manganese alloy output, with China and India together representing the majority of silicomanganese and ferromanganese production.

Ferroalloys are broadly categorised into bulk and noble grades. Bulk ferroalloys, which are of the high- carbon category and include silicomanganese, ferromanganese, ferrochrome, and ferrosilicon, are produced by large-scale operations and consumed mainly in carbon and stainless steelmaking; they account for the overwhelming majority of ferroalloy consumption. Noble ferroalloys are of the low-carbon category, are typically derived from costlier minerals, and include ferro-vanadium, ferro-tungsten, ferro-niobium, ferro-molybdenum, and ferro-titanium, serving niche, high-performance applications in superalloys, aerospace, and specialty steels. In India, bulk ferroalloys account for over 98% of total ferroalloy consumption, and around 80% of ferroalloy output is directed into steelmaking, with the balance used in castings, superalloys, aerospace, and other special applications.

India occupies a prominent position in the global ferroalloys landscape and is recognised for producing high-quality material with strong export potential, particularly to European markets. Indias total installed ferroalloys capacity is around 5.15 Million Tonnes per annum (MTPA), comprising about 5.10 MTPA of bulk ferroalloys and

0.05 MTPA of noble ferroalloys; within bulk capacity, manganese alloys account for about 3.16 MTPA, chrome alloys 1.69 MTPA, and ferrosilicon 0.25 MTPA. India is a net exporter of ferroalloys, with roughly 25% to 30% of production typically exported, and is an established regular exporter of high-carbon ferromanganese, silicomanganese, and high-carbon ferrochrome. Ferroalloys accounted for 8.43% of the value of Indias metals and alloys exports in 2023-24 as per Indian Minerals Yearbook, ranking third after iron and steel and aluminium. The industry is concentrated in states such as Andhra Pradesh, Chhattisgarh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, West Bengal, and Meghalaya, reflecting access to raw materials and power. Reinforcing this position, India was the worlds second-largest producer of silicomanganese, high-carbon ferromanganese, and refined ferromanganese in 2025, with domestic output rising 8%, 9%, and 21% respectively across the three products.

The most significant structural challenge for the Indian industry remains the cost and availability of electricity, which constitutes a large share of production costs and has prompted several players to operate below full capacity.

To address this and capture growth, the industry continues to focus on adding and upgrading capacity, investing in energy- efficient furnaces and automated material handling, expanding captive power generation to reduce dependence on costly grid electricity, strengthening raw- material linkages, and adopting new technologies. The long-term outlook remains constructive, supported by infrastructure and construction growth in emerging economies, a shift toward sustainable and recyclable materials, and the expanding production of low-carbon steel, all of which position the ferroalloys sector to meet rising demand for performance-enhancing steel inputs.

Global Silicomanganese Market Overview

Global silicomanganese production moved up by about 1% in 2025 to nearly 16.4 MT, supported by higher output in both China and India. Chinas production rose modestly by 1% to nearly 11.2 MT, rebounding after a sharp correction in 2024 that had followed earlier strategic stockpiling; although Chinese smelters continued to operate under tight margins, the sector saw some consolidation, with more efficient furnaces replacing outdated capacity, particularly in

Inner Mongolia. China remained dominant, accounting for 68% of global output, while India was the second-largest producer with a 15% share, up from 14% in 2024, as output grew 8% Year on Year and around half of it was exported. Among other producers, Brazil grew 7%, Vietnam 19%, Mexico 4%, and South Africa a notable 79%, while Malaysia and Norway each rose 1%; Russia and Georgia declined 8% and 34% respectively, though they remained among the larger suppliers outside the top two. By region, Asian output rose 2%, even as producers in Japan and South Korea continued to struggle against lower-priced material, and Europe rebounded 15% while still sitting below pre-Russia-Ukraine- conflict levels. The Commonwealth of Independent States (CIS) fell 17%, as a modest recovery in Ukraine from a low 2024 base was outweighed by declines in Russia, Georgia, and Kazakhstan. North and South America expanded by 6% and 7% respectively, led by Mexico, the United States, and Brazil, while Africa contracted 5% as lower output in Gabon and Zambia outweighed a South African uptick. The Middle East was broadly flat, and Oceania declined as Australias sole manganese smelter went offline from May 2025.

Global Ferromanganese Market Overview

Global production of high-carbon ferromanganese grew for a second consecutive year, rising 2% in 2025 to nearly 4 MT. The increase was driven largely by China and India, which together accounted for 70% of global production, at 42% and 28% respectively, up from 66% in 2024. Chinas output surged 9%, with some smelters switching from silicomanganese to high-carbon ferromanganese to capture better margins, while India recorded a similar 9% rise as high-carbon ferromanganese took a larger share of its manganese alloy exports and domestic consumption stayed healthy. Malaysia, the third-largest producer with a 7% global share, grew 5%, whereas Japan, South Korea, Norway,

Russia, and Brazil all recorded declines and France surged 48% with Iran broadly stable. At the regional level, Asian output rose 5% and Europe climbed 22%, as gains in France and Spain offset a reduction in Norway, while the CIS fell 11 % on lower Russian output despite Ukraines rebound from a historic low, North America dropped 25%, South America eased 3%, and African output was pressured by a halt to some South African operations from July, partly offset by Zambia and Egypt. Refined ferromanganese production rose more sharply, jumping 11% to a record of about 1.8 MT, again led by China and India, which together accounted for 72% of global output, at 48% and 24% respectively. Chinas output climbed supported by the cost advantage of refined ferromanganese over electrolytic manganese metal for many downstream users, while India grew on robust overseas demand and Norway, the third-largest producer with a 12% share, rose 5%. Together with Japan, the United States, and South Africa, the latter of which fell sharply on a production shutdown in the second half of the year, these producers accounted for about 95% of global supply.

MARKET OVERVIEW

Pricing Trends & Market Dynamics

The global seaborne coking coal market remained subdued for much of 2025, weighed down by oversupply in the ferrous raw-materials complex, weak steelmaking margins, and the continued absence of China from the seaborne spot market. According to the IEA, whose assessment draws on Argus data, Australian premium hard coking coal prices on an FOB Australia basis remained below US$200/T through the first half of 2025, keeping pressure on producer profitability. The Argus PLV cfr east coast India index, a key reference for Indian buyers, eased to a low in March 2025 before recovering modestly by the end of June. Prices firmed in the second half, with the Argus PLV HCC FOB Australia assessment averaging about US$212/T in December 2025 and rising to around USS227/T in January 2026, its highest level since July 2024, as heavy rain and flooding in Queensland, force majeure declarations by several producers, and vessel congestion at Australian coal ports tightened supply.

Global Supply-Demand Dynamics

Global metallurgical coal exports were projected to fall by about 7% to 345 MT in 2025 on weaker demand led by China, even as Australia, the largest exporter, maintained stable export volumes of around 153 MT. Chinas coking coal imports edged down 3.0% to 120 MT, with the average import price almost halving to about US$101,7/T. Mongolia remained the leading supplier at 60.07 MT, a 51% share and up 5.8%, followed by Russia at 32.76 MT (28% share, up 7.4%) and Canada at 10.80 MT (9% share, up 19.6%). Mongolia directs effectively all of its metallurgical coal exports to China, reinforcing its position as the countrys top supplier. A spate of minor mining incidents in Australia in April 2025 lent only momentary support to spot prices, as China stayed out of the seaborne spot market and seasonal monsoon lulls weighed on Indian procurement. Chinese end-users continued to meet their requirements largely from domestic supply, Mongolian imports, and portside inventories rather than seaborne premium cargoes.

India Coking Coal & Met Coke Market

India, the worlds second-largest crude steel producer, remained structurally dependent on imported coking coal, sourcing around 90% of its requirement from abroad because high-ash domestic coal is largely unsuitable for direct use in blast furnaces. Met coal imports were expected to rise by about 9% Year on Year in FY26 on higher steel output. On metallurgical coke, the Quantitative Restrictions (QR) on low-ash met coke first imposed from January 2025 were extended through to 31 December 2025, capping imports at about 1.42 MT per half-year. The policy lifted domestic coke output, which rose 9% Year on Year to 47.56 MT over the first eleven months of FY26.

From January 2026, however, the Directorate General of Foreign Trade (DGFT) removed the QR, after the Ministry of Finance approved a provisional anti-dumping duty of US$60.87 per tonne to US$130.6 per tonne on low-ash met coke from China, Indonesia, Colombia, Japan, and Russia, shifting domestic protection from quotas to duties.

Outlook

The structure of the seaborne market continued to evolve.

With China prioritising near-shore sourcing and largely withdrawing from the seaborne spot market since 2020, the market has grown more fragmented and multipolar, leaving Australias single producer- led PLV benchmark to anchor pricing for an increasingly diverse buyer base across Europe, Japan, South Korea, India, Brazil, and the US. India sits at the centre of a longterm contest between Australian hard coking coal and recently expanded US east-coast supply as their production cost differentials level. For Indian merchant cokeries, the move from import quotas to anti-dumping duties on met coke, rising domestic coke output, and firmer late-cycle coking coal prices are likely to shape procurement and margins through 2026.

MARKET OVERVIEW

Indias Special Bar Quality (SBQ) steel industry is a critical segment of the broader specialty steel ecosystem, comprising high- performance steel products engineered for demanding applications that require superior strength, reliability, and precision. SBQ steel is typically used in components that rotate or bear load, such as axles, drive shafts, bearings, gears, and combustion- engine parts, as well as in wind turbines, railways, and other industrial applications where durability is paramount. As the worlds second-largest crude steel producer, with output of 164.9 MT in 2025, India has established itself as a significant player in the specialty steel market, of which SBQ sfeel forms an integral part.

Global Context

SBQ steel is a niche, high-value segment whose demand is closely tied to the global automotive, energy, and machinery cycles, with production concentrated among specialised producers in China, Japan, Europe, and North America. The segment is therefore sensitive to industrial and automotive activity, which remained subdued in 2025. Global crude steel production edged down by 2.0% to 1,849.4 MT during the year, as a contraction in China was partly offset by robust double-digit growth in India, reinforcing the shift in the centre of gravity of global steel and specialty steel demand toward emerging Asia.

Government Policy Support

The Production Linked Incentive (PLI) Scheme for Specialty Steel remains the cornerstone initiative driving the segment. Approved in July 2021 with an outlay of Rs.6,322 crore, the scheme aims to promote domestic manufacturing of specialty steel and reduce import dependence in critical sectors such as defence, power, aerospace, and infrastructure. It covers five product categories, namely coated and plated steel products, high-strength and wear-resistant steel, specialty rails, alloy steel products and steel wires, and electrical steel. The first round attracted 44 projects from 26 companies, with committed investment of Rs.27,106 crore and 24 MT of downstream capacity, while a second round, PLI 1.1, was launched in January 2025 for the production period FY2025-26 to FY2029-30. A third round, PLI 1.2, was launched in November 2025, extending the scheme to advanced grades including super alloys, Cold-Rolled Grain-Oriented (CRGO) steel, stainless steel long and flat products, titanium alloys, and coated steels. Across its rounds, the scheme had drawn committed investment of Rs.43,874 crore, of which Rs.22,973 crore had been invested by September 2025, and is expected to add about 14.3 MT of specialty steel capacity.

Application Sectors

The automotive industry is the dominant consumer of SBQ steel, driven by the shift toward lightweight, high-strength materials that improve fuel efficiency and meet tightening emission norms. Construction and infrastructure form the next-largest application area, supported by national programmes such as Bharatmala Pariyojana, the Smart Cities Mission, and Pradhan Mantri Awas Yojana. The machinery and heavy-equipment sector uses SBQ steel for bearings, gears, and high-speed shafts that must resist metal fatigue, while railway modernisation requires specialised products such as head-hardened and asymmetric rails, which are themselves covered under the specialty rails category of the PLI scheme.

Outlook

The Indian SBQ steel industry is positioned for sustained growth, underpinned by automotive expansion, domestic infrastructure development, and continued policy support through the PLI scheme and the production ambitions of the National Steel Policy 2017. Realising this potential will depend on addressing raw- material security, technology modernisation, and quality standardisation, while the focus on import substitution and export competitiveness positions Indian SBQ producers favourably across both domestic and international markets.

COMPANY OVERVIEW

The Sandur Manganese & Iron Ores Limited (SMIORE) is one of Indias leading private sector miners and commodity producers, with operations spanning over 7 decades and a consistent focus on environmentally responsible, systematic, safe, and scientific mining. The Company is the 2^nd largest manganese ore miner in India and the 3^rd largest iron ore miner in Karnataka, and through its subsidiary Arjas Steel Private Limited (Arjas Steel) it is now among the top 5 players in the SBQ steel market.

SMIORE was the only mine in South India, and the first of just 3 nationwide, to receive the 7-Star Rated Mines Award under the Sustainable Development Framework (SDF) introduced by the Government of India in 2014. Its Kammathuru iron ore mine was awarded a 5-Star Rating for 2023-24, and the Company has maintained a 5-Star Rating for 10 consecutive years since the SDF was introduced.

On a consolidated basis, SMIORE today operates across 4 key business segments:

Further, the Company has additional Captive Power Generation Assets under different Special Purpose Vehicles (SPVs) to support its core business segment:

1. Renew Sandur Green Energy Private Limited: 42.9 MW of Solar-Wind Hybrid Energy capacity, supporting the energy requirements of the ferroalloys segment of the Company

2. Amplus Arjas Solar Private Limited: 20.4 MW of Solar Energy capacity, supporting the energy requirements of the Steel segment of the Company

These assets operate in synergy, drawing on the advantages of being an integrated Company within the metals and mining industry. SMIORE remains focused on becoming a fully integrated and sustainable commodity producer, positioned for long-term growth in the years ahead.

BUSINESS SEGMENTS OVERVIEW MINING

Manganese ore

Manganese ore production during FY26 was the highest ever in the Companys history, at 5.89 Lakh Tonnes (LT) as compared to 5.12 LT in FY25, registering growth of 15% Year on Year (YoY), on account of an increase in production in line with the latest Maximum Permissible Annual Production (MPAP) limit of 0.599 MTPA.

Net of internal captive consumption, the sale of manganese ore was 3.38 LT in FY26, as compared to 1.75 LT in FY25, registering a robust increase of 93% over the previous year. Part of the incremental production was used for captive consumption during the year, i.e., 0.61 LT in FY26 as compared to 0.65 LT in FY25, while the balance is held as closing stock carried forward to the next financial year. Realisation per tonne of manganese ore was Rs.6,486 in FY26, as compared to Rs.8,090 in the previous year. The Company thus recorded higher sales of manganese ore during the year on account of higher throughput, despite a correction in average realisations.

Iron ore

Iron ore production during FY26 was the highest ever at 43.51 LT, broadly in line with the latest MPAP limit of 4.45 MTPA. FY26 production volumes were higher than the 38.10 LT in FY25, registering a growth of 14% YoY. During the same period, the sale of iron ore was 41.04 LT, as compared to 40.12 LT in FY25, registering a marginal increase of 2% YoY.

Realisation per tonne of iron ore was Rs.3,128 in FY26, as compared to Rs.3,510 in the previous year. The Company thus recorded lower iron ore sales value during the year, as a marginally higher sales quantity was outweighed by the decrease in average realisations.

It is also important to note that, in addition to the annual capacity expansion, SMIORE has received Consent for Operation (CFO) approval for one of its mining leases to handle incidental iron ore to the tune of 0.327 MT by 30 August 2026. This approval enables SMIORE to sell already-excavated ore amounting to 0.327 MT, over and above its annual production limits.

Ferroalloys

Ferroalloys production during FY26 stood at 51,858 Tonnes (T), registering a significant increase of 89% over the previous years 27,389 T, on account of better capacity utilisation of the two operational furnaces. Higher production volumes in the ferroalloys segment in FY26 were supported by higher energy generation from Waste Heat Recovery Boilers, on account of better capacity utilisation in the coke & energy segment. During the same period, the sale of ferroalloys was 56,130 T, as compared to 17,954 T in FY25, a notable increase of 213% YoY, on account of higher production and closing stock carried forward from the previous year. Realisation per tonne of ferroalloys was Rs.66,464 in FY26, as compared to Rs.68,464 in the previous year.

The Company has continued its contractual manufacturing agreement for its Coke Oven capacity, to the tune of -46% of total capacity, for FY27 in continuation of FY26. This will ensure higher production and thus higher energy generation, supporting production continuity in the ferroalloys segment.

Coke & Energy

During the year, the production of coke was 869 T, as compared to 84,669 T in the previous year. Over the past year, SMIORE has shifted its focus towards coke production under contract manufacturing agreements, as opposed to own production, thereby insulating itself from volatility in the international coking coal market and from fluctuations in coking coal exchange rates, which have continued to be a key operational risk for standalone independent cokeries.

Coke production under contract manufacturing arrangements stood at 2,22,575 T, which was 1,812 T in FY25 on account of there being no active conversion contracts in the previous financial year.

The sales volume of coke for the year stood at 20,167 T, as compared to 82,772 T in the previous year, registering a decrease of 76% YoY, as the majority of volumes in FY26 were under contract manufacturing agreements and the Company sold only its closing stock from the previous year. Realisation per tonne of coke was Rs.28,655 in FY26, as compared to Rs.28,184 in FY25.

Conversion and screening income under contract manufacturing for the year was Rs.41 crore, as compared to Rs.2 crore in FY25, primarily on account of higher throughput under conversion agreements in FY26.

Steel

FY26 was the first full year of consolidation of Arjas Steel Private Limited (Arjas Steel) into SMIORE. During the year, the consolidated production of steel products at Arjas Steel stood at 4.04 LT, compared to 3.77 LT in the previous financial year, registering a growth of 7% YoY. Further, consolidated sales volume stood at 4.06 LT, compared to 3.64 LT in FY25, registering a growth of 12% YoY.

Realization per tonne of steel was Rs.70,238 in FY26, as compared to Rs.72,501 in FY25, reflecting a decline of 3% YoY, in line with broader steel industry trends. As a result, consolidated revenue for Arjas Steel stood at Rs.3,141 crore in FY26, compared to Rs.2,884 crore in the previous year, registering a growth of 9% YoY, supported by strong volume growth, which was partially offset by lower realizations.

EBITDA per tonne of steel was Rs.8,645 in FY26, compared to Rs.5,201 in FY25, an increase of 66% YoY. Consequently, EBITDA stood at Rs.351 crore in FY26, compared to Rs.190 crore in the previous year, registering an increase of 85% YoY. profit before tax for the year stood at Rs.135 crore in FY26, compared to loss before tax of Rs.16 crore in the previous year.

FY26 STANDALONE PERFORMANCE DISCUSSION

Total income in FY26 stood at Rs.2,075 crore as compared to Rs.2,011 crore in the previous year, registering a marginal increase of 3% YoY. This was primarily due to higher sales volumes in the mining segments, which was partially offset by lower average realisations across both the products i.e. manganese ore and iron ore. Notably, manganese ore recorded highest-ever production (+15% YoY) and sales (+93% YoY) volumes in FY26, at the same time iron ore also registered highest-ever production (+14% YoY) and sales (+2% YoY) volumes during the year.

EBITDA for FY26 stood at Rs.904 crore as compared to Rs.729 in the previous year, registering a robust growth of 24% YoY, primarily on account of higher profitability in the mining segment, supported by positive PAT performance in both ferroalloys and Coke & energy segment. As a result, PAT for the year stood at Rs.543 crore, registering a growth of 22% over the previous year.

FY26 CONSOLIDATED PERFORMANCE DISCUSSION

FY26 is the first full year of consolidation of Arjas Steel Private Limited financial statements into SMIORE, which has led to notable changes in consolidated financial performance over standalone financial performance.

Total income in FY26 stood at Rs.5,163 crore as compared to Rs.3,212 crore in the previous year, registering a notable increase of 61 % YoY. This was primarily due to the consolidation of Arjas Steel financials, coupled with marginal revenue growth on Standalone basis.

EBITDA for FY26 stood at Rs.1,252 crore as compared to Rs.862 crore in the previous year, registering a robust growth of 45% YoY, primarily on account of positive EBITDA contribution from Arjas Steel to the tune of Rs.351 crore for the financial year. As a result, PAT for the year stood at Rs.658 crore, registering a growth of 40% over the previous year.

PREPAYMENT AND REDEMPTION OF NON-CONVERTIBLE DEBENTURES

On the back of strong internal accruals, SMIORE prepaid and redeemed Non-Convertible Debentures (NCDs) worth Rs.423 crore in March, ahead of their maturity date, and achieved standalone net debt-free status as of 31 March 2026. SMIOREs gross standalone debt-to-equity ratio improved to 0.11 in FY26

KEY FINANCIAL RATIOS - STANDALONE

Ratio	31-Mar-26	31-Mar-25	% Variance	Remarks
Current ratio	1.64	1.96	(16.28%)
Debt equity ratio	0.11	0.40	(73.44%)	Refer note (a)
Debt service coverage ratio	3.39	4.59	(26.16%)	Refer note (a)
Return on equity ratio/Return on net worth	19.08%	18.75%	1.75%	Refer note (b)
Inventory turnover ratio	0.61	0.96	(36.04%)	Refer note (c)
Trade receivables turnover ratio	429.62	109.01	294.12%	Refer note (d)
Trade payables turnover ratio	8.39	8.35	0.48%
Net capital turnover ratio	7.81	5.27	48.31%	Refer note (e)
Net profit ratio	27.01%	22.93%	17.79%
Return on capital employed	24.48%	18.52%	32.18%	Refer note (f)
Operating profit margin	42.70%	33.88%	26.01%	Refer note (g)
Return on investment	9.46%	9.03%	4.67%

Notes:

(a) Decrease is on account of profits earned coupled with prepayment of borrowings during the year.

(b) Increase in profit has resulted in an improvement in the ratio.

(c) Decrease is on account of lower cost of goods sold coupled with lower inventory.

(d) Increase is on account of higher revenue and lower trade receivables.

(e) Increase is on account of higher revenue from operations.

(f) Increase is on account of profits earned coupled with prepayment of borrowings during the year.

(g) Increase in on account of higher profit contribution from mining segment, and positive profit contribution from ferroalloys, coke & energy segments.

OUTLOOK

The outlook for the Company remains positive, supported by the completion of all interim mining expansions, with the latest MPAP limits now standing at 0.599 MTPA for manganese ore and 4.45 MTPA for iron ore. These expansions are fully compliant with 1he parameters prescribed by the Honble Supreme Court, ensuring sustainable and responsible growth. With these capacities fully operational, the Company enters the coming year on a strong fooling.

In addition to the MPAP limits at our mine, we also received Consent for Operation (CFO) approval for one of our mining lease for handling incidental iron ore to the tune of 0.327 MT by 30 August 2026. This approval enables us to sell already- excavated ore amounting to 0.327 MT, in addition to our annual production limits,

The performance of the coke & energy segment in FY26 was encouraging, supported by volumes under the contract manufacturing agreement, which has secured about -46% of the Coke Oven capacity and ensures steady production and consequent power generation. This, together with the 42.9 MW hybrid solar and wind energy project, enabled the Company to operate 2 of its 3 furnaces in the ferroalloys division during FY26, resulting in a significant increase in volume throughput in the segment. A similar performance is expected in the coming year.

The consolidation and integration of Arjas Steel for the full financial year in FY26 contributed to material growth in Total Income, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and Profit Before Tax (PBT) at the consolidated level.

Arjas Steels outlook is positive, supported by the headroom it has to grow volumes from its existing manufacturing infrastructure.

This infrastructure also has the appetite to absorb further investment to expand capacity, which the management is constantly evaluating. The commissioning of the Garret Coiler facility last year has enabled new product additions such as Wire Rods, opening up opportunities to grow beyond the legacy Bars portfolio. The domestic operating environment has also turned more conducive, following the Government of Indias imposition of safeguard duties on certain steel imports for a three-year period, which has helped firm up domestic market realisations. As these factors come together, Arjas Steel is expected to deliver a stronger performance in the coming year.

Overall, the Company is well- positioned for growth in the years ahead. Steady cash flows from mining operations, the continued growth of Arjas Steel, and improved performance across the coke & energy and ferroalloys segments are expected to support the Companys performance in the coming years.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS

SMIOREs Human Resource Development and Industrial Relations are built on an equitable philosophy that treats employees as part of the extended corporate family. This approach has fostered a strong sense of belonging and a long-standing relationship between the Company and its people.

The Companys headcount as of 31 March 2026 was as follows. On a standalone basis, SMIORE had 2,707 permanent employees and a total workforce of 4,323, counting both direct and indirect members. On a consolidated basis, taking in its material subsidiary Arjas Steel, the SMIORE Group had 4,326 permanent employees and a total workforce of 7,237.

A number of employee schemes support livelihood security and quality of life at SMIORE. These include:

• Food Security Scheme: Essential food provisions are offered at 1972 price leve Is to protect employees from inflation. A standard food package for a family of five costs Rs.145, against an actual cost of around Rs.4,000, with the difference subsidised by the Company.

• Post-Retirement Benefits:

Qualifying employees receive a one-time payout on retirement under the Companys Post- Retirement Ex-Gratia Scheme.

• LPG Subsidy: Subsidised LPG cylinders are provided to a large proportion of employees at a 90% subsidy, reducing their reliance on firewood for fuel.

• Other Welfare Programmes:

These include subsidies on clothing, gifts for weddings and festivals, medical care, sickness benefits, education and training support, and access to housing and electricity.

Through these programmes, the Company supports the welfare of its workforce and maintains a stable work environment, which contributes to its sustained growth and to long-term employee loyalty.

OPPORTUNITIES AND THREATS

OPPORTUNITIES

1. Indias Rising Position in Global Steel Production

India is the worlds second- largest steel producer, with crude steel output of 164.9 MT in 2025, an increase of 10.4% YoY, against a 2.0% decline in global crude steel production. This underlines the countrys growing weight in the global steel industry.

2. Strategic Vision for Steel Industry Expansion

The Government of India is targeting an increase in the countrys steel capacity to 300 MT per annum by 2030.

A set of policy measures introduced in February 2024 is intended to support self- reliance and innovation in the sector toward this goal.

3. Infrastructure-Driven Growth

Infrastructure remains central to Indias economic agenda. The Union Budget 2026-27 raised the capital expenditure allocation to Rs.12.2 lakh crore, about 3.1% of GDP and up from Rs.11.21 lakh crore in the previous year, with effective capital expenditure (including grants to states for capital assets) at Rs.17.1 lakh crore, or around 4.4% of GDR This sustained public investment is expected to lift steel demand across end-use sectors.

4. Rising Demand from Infrastructure and Construction

Programmes such as the National Highway Development Project, the Production Linked Incentive (PLI) scheme, and the National Infrastructure Pipeline are accelerating construction activity, while welfare schemes including the Pradhan Mantri Awas Yojana and Pradhan Mantri Gram Sadak Yojana are adding to steel demand, particularly in rural areas.

5. Railway Modernization Boosting Demand

Dedicated Freight Corridors, high-speed and bullet-train projects, and expanding metro networks are expected to add materially to steel consumption across the country.

6. Booming Automotive Sector

Indias automotive sector continues to grow on the back of rising passenger and commercial vehicle demand. Support for electric vehicles, PLI incentives, and related infrastructure offer the steel and specialty alloy industries opportunities to participate more deeply in the automotive value chain.

THREATS

1. Macroeconomic and Inflationary Challenges

Persistent inflation and an uncertain macroeconomic environment can weigh on the steel industry by softening demand, raising input costs, and compressing margins.

2. Geopolitical and Market Volatility

Movements in raw material prices, exchange rates, and geopolitical tensions can complicate procurement, working capital management, and price stability. The escalation of the conflict in West Asia from late February 2026 has heightened this risk, contributing to volatility in energy and commodity prices and in exchange rates, with ripple effects for input costs across the metals and mining value chain.

3. Supply Chain Disruptions

The global steel supply chain remains exposed to geopolitical shocks and adverse tariff measures, which can interrupt the movement of raw materials and finished goods and disrupt operations.

4. Stringent Regulatory Environment

Tightening regulation, driven by ESG considerations, shifting trade and tariff structures, and judicial intervention, creates compliance risk for the metals and mining sector. The European Unions Carbon Border Adjustment Mechanism (CBAM), whose definitive period began in January 2026, adds a further dimension by placing a carbon cost on imports of carbonintensive goods, including iron, steel, and certain metals, with implications for exporters to the EU.

These developments call for proactive risk management and adaptability.

RISKS AND CONCERNS

Risks represents potential events that can hinder performance and affect strategic and operational outcomes. SMIORE maintains a Risk Management Framework to identify, assess, and mitigate such risks, while strengthening corporate governance and stakeholder confidence.

KEY RISK CATEGORIES

1. Strategic and Financial Risk

The Companys strategic growth depends on the success of its expansion, acquisition, and capital expenditure decisions. Operating across the cyclical steel, mining, ferroalloys, and coke industries, shifts in demand- supply dynamics can affect the returns of these investments. Delays in project execution, cost overruns, or challenges in integrating acquisitions can affect the achievement of long-term strategic objectives. Factors like inflation, demand and supply constraints, foreign exchange fluctuations, interest rate movements and liquidity constraints, can materially affect financial performance.

2. Operational Risk

Operational disruptions, equipment failures, talent management and supply chain inefficiencies can affect the achievement of production targets and overall efficiency.

3. Environment, Health and Safety Risk

Mining and metallurgical operations carry inherent environmental, health, and safety exposures. Failure to manage emissions, waste, safe working conditions, can result in regulatory action, operational disruptions, and harm to people and the environment.

4. Compliance and Legal Risk

Operating in a heavily regulated environment, the Company is exposed to adverse regulatory action and compliance risk. Legislative changes, legal disputes, environmental norms, and public interest litigation can result in business uncertainty.

5. Reputational Risk

The Companys standing with investors, customers, communities, and regulators rests on consistent performance and conduct. Adverse events, governance lapses, or negative publicity can erode stakeholder trust and affect access to markets and capital.

6. Social Risk

The Companys operations depend on constructive relationships with the communities and workforce around its sites. Disruptions to community or labour relations, or unmet stakeholder expectations on social responsibility, can affect the social standing to operate and the continuity of operations.

7. Cyber Security Risk and Technology Risk

Cyber security is a material concern in the current digital environment, with threats such as data breaches, ransomware, and unauthorised access capable of causing financial loss, operational disruption, and reputational harm. The Companys IT function deploys appropriate security measures to address these risks. Reliance on ageing technology, or a failure to adopt newer technologies, could weaken the Companys competitiveness. Sustained investment and agility in upgrading systems and equipment are needed to remain competitive.

8. Geopolitical Risk

Global trade tensions, conflicts, sanctions, and shifts in trade policy can disrupt supply chains, affect input costs, and influence demand in export and import markets. Political instability in key regions and global changes may impact the Companys operations.

RISK MITIGATION MEASURES

SMIORE applies a multi-pronged approach to managing risk. This includes accepting risks that fall within defined criteria, transferring risk to third parties through insurance, avoiding risk through hedging or safer practices and policies, and acting to reduce the likelihood or impact of risk events.

INTERNAL CONTROL AND ADEQUACY

The Company has a well-defined delegation of power with well- defined authority and responsibility matrix defining the financial limits for approving revenue as well as capital expenditure. Segregation of duties has been clearly defined to ensure appropriate distribution of authority and responsibility among officials. To support efficient operations, the Company uses an Enterprise Resource Planning (ERP) system that enables seamless recording of data for accounting, consolidation, and management information, and allows efficient exchange of information across its locations.

The Company continues to align its processes and controls with established best practices and to improve its internal control mechanisms on an ongoing basis.

For more detailed information, please refer to the Boards Report,

CAUTIONARY STATEMENT

The Management Discussion and Analysis may contain ‘forward- looking statements pertaining to the Companys objectives, estimates, expectations, or projections, as allowed by applicable laws and regulations. Flowever, it is important to note that actual results could differ significantly from those expressed or implied in these statements.

Several factors could influence the Companys operations, including fluctuations in raw materials prices, performance of product and application industries, changes in tax laws, interest rates, power costs, economic developments, and other factors both within the country and in the global economics domain.

While the Company strives to provide accurate and reliable information, uncertainties and unforeseen circumstances may impact its actual performance, making it essential for investors and stakeholders to exercise caution when relying on forward- looking statements.