Sarda Energy & Minerals Ltd Management Discussions

Overview

The objective of this report is to convey the Managements perspective on the external environment and steel industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during the FY2024-25. This Report should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Annual Report 2024-25. This report is an integral part of the Directors Report.

Industry structure and developments

Iron and Steel

In 2024, global steel demand declined ~1%. Demand in China, the largest steel producer and consumer, declined ~3.5%, led by declining steel demand from real estate sector, despite conducive policy changes and release of support packages. Steel demand from Europe, Japan and the US also logged an estimated demand degrowth of 2-3%. However, demand growth in developing economies such as India and Brazil stopped global demand from declining steeply. Demand is estimated to have increased 11% in India, 5.6% in Brazil and 2.7% in other steel consuming economies.

In 2025, global steel demand is expected to inch up by 0.5-1.5% on the back of easing financing conditions and pent-up demand from some key steel consuming economies, which will support manufacturing activities. An anticipated recovery in residential construction in economies such as EU, US and Korea in line with easing of financing conditions will support growth, too. India will continue to lead the pack in terms of demand.

India remains the worlds second-largest steel producer and one of the strongest demand drivers. Driven by strong growth in the automotive, real estate, and infrastructure sectors, Indias steel demand is projected to grow by 8% in the medium term. Growth is supported by rising demand for consumer durables and capital goods. Additionally, government initiatives, including Production-Linked Incentives (PLI) schemes and increased investments in infrastructure and manufacturing, have played a crucial role in boosting steel production and consumption. In the Union Budget for FY 2025-26, the Government of India (GoI) has maintained capital expenditure (capex) as a share of GDP at the same level as 2024, reinforcing its commitment to industrial growth.

The challenges before the domestic industry include a noticeable increase in imports from Asian nations like Vietnam and China. The risks from imports have gone up due to Chinas excess capacity and sluggish demand. Given the slower domestic demand and large excess capacities in the sector, there is an increased risk of a surge of low-cost Chinese steel imports in the markets of Europe and Asia. Imports from nations like Vietnam are also reportedly on the rise. However, this has started to lead to trade protection measures in India; higher tariffs on imports from China and Vietnam have been imposed in certain grades to support domestic industry and enhanced quality control measures have been implemented to help safeguard local manufacturing.

The steel industry will continue to be vulnerable to volatility in key raw material prices such as coking coal and iron ore; going ahead, higher environmental and regulatory costs will also be a challenge to maintain cost efficiency. Overall, while the global steel demand is poised for recovery in 2025, the industry remains exposed to geopolitical, economic, and financial risks.

India, however, continues to stand out as a high-growth market, supported by strong domestic demand and investment. The long-term outlook for the Indian steel industry remains optimistic, with continued infrastructure development, industrial expansion, and supportive government policies driving its growth. Effective trade policies, price stabilisation measures, and sustained investment will be crucial to maintaining Indias competitive edge in the global steel market.

The steel industry is exploring more sustainable and energy-efficient methods of production using cleaner fuels / technologies. Environmental concerns, including carbon emissions and sustainable resource use, are becoming increasingly important in the steel industry. This has led to a focus on developing and adopting technologies that reduce the environmental impact of steel production

Iron Ore/Pellets

The steel raw materials market in FY 2024-25 stayed volatile due to coking coal mine outages and speculation about Chinese governments stimulus announcements to fuel its slowing economy. However, both iron ore and coking coal markets declined due to weak steel markets globally, and continuing doubts that steel consumption could recover meaningfully in China while their economy focused on non-steel intensive sectors for growth.

In FY 2024-25, Indias iron ore production reached a record high of 289 million metric tons, marking a 4.3% increase compared to the previous year. This surge in production is attributed to increased demand, policy stability, and improved operational capacity within the sector, according to the Ministry of Mines.

The demand for iron ore pellets is closely tied to the global steel demand. Iron ore pellets are a critical raw material in steelmaking as a substitute of iron ore lumps. Iron ore pellets are made from fines generated in the course of production of sized iron ore lump. The leading producers of iron ore pellets include countries with significant iron ore resources, such as China, India, and Iran. Globally, the top three exporters of Iron Ore Pellets are Russia, India, and Brazil. Most of the Iron Ore Pellets exports from the World go to the China, Turkey and Bahrain.

The global iron ore pellets industry is poised for robust growth and expand at a CAGR of 6.1% between 2025 and 2035. By 2035, the market is expected to reach USD 128.1 billion, fueled by the surge in demand for high-quality steel and advancements in green steel production.

Indias iron pellet production reached over 105 million tonnes (MnT) in financial year 2024-2025 (FY25), an increase of 5% y-o-y from 100 MnT in FY24. Pellet production has surged at a rapid pace over the last few years on rising crude steel production, the ever- increasing requirement of ensuring material and energy efficiency in steel production, as well as growing exports.

Pellet production in FY26 is expected to remain on the same growth trajectory due to strong domestic steel market fundamentals. However, the capacity utilization rate of the industry is currently around 64%, which hardly inspires optimism. If the export market continues to remain dull for long enough, the rapid rise in domestic capacity may just outstrip real demand by a considerable margin, which might affect the market and prices. Ongoing technological advancements in steelmaking processes, including the development of direct reduction technologies, are influencing the market for iron ore pellets.

Coal/Power

Power is among the most critical components of infrastructure, crucial for the economic growth and welfare of nations. The existence and development of adequate power infrastructure is essential for sustained growth of the Indian economy. Global coal demand grew by 1.2% in 2024 in energy terms, rising by around 67 million tonnes of coal equivalent (Mtce) (or in physical terms by 1.4% or 123 million tonnes). The growth rate has been declining since the strong rebound in 2021 following the end of Covid-19 lockdowns in many countries.

The electricity sector continues to drive coal demand, accounting for two-thirds of global consumption. In 2024, global coal power generation grew by nearly 1% to 10 700 TWh, a new high. A key driver was record temperatures, which pushed up electricity demand for cooling (especially with intense heatwaves in China and India). The estimated effect of higher temperatures on

coal demand in 2024 covers the entire annual increase in coal use. While coal remains the worlds largest source of power generation, its share in the electricity mix is falling: its current share (35%) is the lowest since theIEA was founded in 1974.

In FY 2024-25, Indias coal sector saw a significant rise in production, crossing the one billion tonne mark. Coal imports, on the other hand, fell by 7.9% to 243.62 MnT, resulting in foreign exchange savings. Domestic coal production reached 1047.57 MnT, a 4.99% increase from the previous year. With the fifth-largest coal reserves and as the second-largest consumer, coal remains crucial, contributing 55% to the national energy mix and fuelling over 74% of total power generation.

Coal remains crucial for power, steel, and cement industries, but shortages in coking and high-grade thermal coal make imports necessary. The Ministry of Coal, Government of India, is strengthening domestic production to enhance energy security and advance Viksit Bharat, ensuring a self-reliant, sustainable energy framework for long-term growth.

India is stepping up coal-fired generation capacity as its peak electricity demand touched 250 GW from a record 243 GW in 2023. Government expects electricity demand to surge to a high of 384 GW in 2031-2032. The Union government has set a coal production target of 1,193.39 Million Tonne (MnT) for the financial year 202526, up 10.5% from the FY25 target of producing 1,080 MnT of the fossil fuel in India.

The Indian power sector in 2024-25 saw significant growth in renewable energy capacity, increased electricity generation across all sources, and a reduction in energy shortages. As per the Ministry of New and Renewable Energy, as of 30 th June 2025, India has achieved 50.08% of its total installed electricity generation capacity from non-fossil fuel. As per the reports, Indias total installed electricity generation capacity stands at 484.82 GW, out of which 242.78 GW is from non-fossil fuel sources, including renewable energy - 184.62 GW, Large Hydro - 49.38 GW and Nuclear Energy - 8.78 GW.

Even though India has made remarkable progress in building renewable energy capacity, the nations only reliable energy source remains coal. Despite renewable energy growth, coal-based thermal power will remain essential. At present, given the resource endowments, coal cannot be neglected as a reliable and affordable source of energy for Indias development.

The coal sectors continued growth and resilience are vital to Indias energy strategy, economic development, and long-term sustainability. The remarkable achievements in production, dispatch, and coal gasification initiatives highlight the sectors evolving

role in meeting the nations energy demands. Through constant advancements in safety, environmental protection, and workforce welfare, the coal industry is setting a strong foundation for future progress. The governments initiatives, alongside the dedication of the workforce, ensure that the coal sector will remain a cornerstone of Indias path toward becoming a selfreliant and developed nation by 2047.

Indias power sector stands at a critical juncture, marked by record-high installed capacity and a rapidly evolving energy mix. With a total installed power capacity of over 475 GW, the country continues to rely heavily on coal, yet the momentum behind renewable energy has never been stronger. Recent years have seen unprecedented growth in solar and wind installations, alongside steady contributions from large hydro and other sources. At the same time, the sector faces important questions about the future role of coal, the pace of capacity additions, and the reliability of supply as electricity demand continues to rise.

Ferro Alloys

Global ferroalloys market is associated with production & supply of iron based alloys to various end user industries, including, steelmaking, construction, automotive, etc. The global ferroalloys market is fragmented, with large number of companies, ranging from established brands to smaller regional players and niche manufacturers catering to the industry demand. The market has high concentration of ferroalloy producers located in India and China, and since the industry is highly capital and energy intensive, the market entry barriers are high for new players entering into the market.

The global ferroalloys market has seen steady growth in recent years, driven by several key factors, including increasing industrialization, expanding automotive and construction sectors, and the rising demand for high-performance steel. Rapid urbanization in emerging economies, especially in Asia-Pacific, has spurred demand for infrastructure and construction projects, leading to higher consumption of steel and, subsequently, ferroalloys. The global ferroalloys market size was valued at USD 57.26 billion in 2024 and is projected to reach from USD 61.90 billion in 2025 to USD 115.42 billion by 2033, growing at a CAGR of 8.1% during the forecast period (2025-2033).

The Indian ferro alloys industry is experiencing growth, with production and demand increasing, particularly in the steel sector. Factors like rising steel production, government initiatives, and infrastructure development are driving this growth. The industry is also seeing a rise in exports, with a significant portion of ferro alloys being shipped overseas. Asia Pacific is the largest region of global ferroalloy market owing to regions extensive steel manufacturing industry, rising consumer discretionary money, thriving local building sector, expansion of renewable energy projects, strong production base for steel & cast iron manufacturing, rapidly expanding automotive sector, low labor cost of ferro alloys production, and strong government support for industrial growth & infrastructure development in emerging economies like India, South Korea, and China.

The Indian ferro alloy market is substantial, with a market size of USD 4.69 billion in 2024, Reports project an increase to USD 10.02 billion by 2033, with a compound annual growth rate (CAGR) of 8.8% between 2025 and 2033. Large production volume of crude steel in China, India, and Japan for use in residential and commercial construction and infrastructure development projects, as well as in the automotive & transportation, energy, and electronics industries, will continue to boost the demand of ferro alloys in the region.

The introduction of policies promoting green and sustainable practices, as mandated by the government, reflects a growing awareness of environmental concerns within the industry. Moreover, the increasing inclination towards localized production chains is shaping the market dynamics as companies aim to reduce their carbon footprint and production costs. As these trends evolve, they are likely to redefine the competitiveness and operational strategies of participants in the India Ferro Alloys Market.

However, high energy bills, deficit in high-grade manganese ore, supply constraints and rising domestic and international competition will impact the industry. There is a tendency for further tightening of regulation and rising costs due to increased concern for some pollutant emissions, especially air. Despite these restraints, the markets growth seems inevitable as there is a fueling requirement from the steel sector and construction works.

Introduction of Carbon Border Adjustment Mechanism (CBAM) introduced by European Union on import of Ferro alloys from 1st January 2026, will adversely affect the competitiveness of Indian Exports but will increase import price for the EU and will have bearing on global prices of ferro alloys.

Opportunities and Threats

Opportunities

Indias per capita power consumption is significantly lower than the global average. While Indias per capita electricity consumption is around 1,331 kWh per year, the global average is estimated to be around 3,000 kWh per year, with some developed countries exceeding 10,000 kWh. This disparity highlights the potential for growth and development in Indias energy sector, particularly in meeting the rising demand for electricity. India being the fastest growing economy among the larger economies, the demand for power is growing at compounded rate of approximately 6.4% per annum. Improving living standards and urbanization has further increased the demand for power in the country. This offers a large opportunity for growth in power sector, which the company is ready to encash. The company has readily available land and basic infrastructure to double the capacity of 600 MW thermal power plant. The company has got rich experience of developing green field hydropower projects in difficult terrains opening large opportunity to develop new hydropower projects, which is a thrust area of government because hydropower projects provide much needed stability to the grid. The company also holds permissions for development of greenfield hydro power projects.

The Indian steel sector is poised for growth, driven by increased demand, government initiatives, and a focus on sustainability and technological advancements. India has set the targets of achieving a total crude steel capacity of 300 million tonnes per annum (MTPA) and total crude steel demand/ production of 255 MTPA by 2030-31. Demand for steel is likely to grow as the governments augmented focus on infrastructural development continues with increased construction of roads, railways, airports, etc. Rise in infrastructure development and automotive production are driving growth.

Due to their significance in improving the quality and durability of steel, the demand for ferro alloys, including ferro manganese and silico manganese is increasing in India, the 2nd largest steel producer. The automotive and construction sectors, which significantly rely on steel reinforced by ferro alloys for their products, also contribute to the domestic demand.

Threats

The key threat lies in dumping of steel from China due to reduced domestic consumption resulting in a 20% increase in exports in 2024, reaching 110 million tonne, highest since 2015. This surge is putting downward pressure on global steel prices and, as a result, squeezing margins for steel producers worldwide. To tackle this, the steel ministry has imposed safeguard duty on select imports.

The steel sector also faces a critical challenge of carbon neutrality as the European Unions Carbon Border Adjustment Mechanism (CBAM) will add in extra costs for Indian steel, further diminishing competitiveness. With Europe being key customer for Indian steel, accounting for 25% of exports, India must urgently comply with stricter carbon regulations to avoid steep financial penalties that could undermine its global position in the steel market. Harsher tariffs by the US shall further restrict market access.

The steel sector faces threats of volatile raw material prices, geopolitical uncertainties and protectionism, evolving environmental regulations and technological disruptions, among others. These factors can significantly impact production costs, supply chains, and market access for steel manufacturers.

During FY 25 the steel imports into India rose by 9%, while exports from India fell by 27% resulting into net import of 4.27 Mn Tonnes as against net import of 1.11 Mn Tonnes in FY 24. This decline is partly because Chinese steel is taking up the global markets that Indian steel companies typically export to.

Outlook

Global economic prospects are weakening, with global economic growth expected to moderate from 3.3% in 2024 to 2.8% in 2025, before recovering to 3% in 2026. The combined effects of new trade restrictions, their spillover through global trade linkages, and rising uncertainty may dampen business sentiment and pace of economic recovery. Financial market volatility has raised concerns about extreme vulnerabilities, particularly in countries grappling with persistent inflation and signs of economic slowdown. Policymakers worldwide face the challenge of balancing economic growth with financial stability. While advanced economies navigate the lingering effects of elevated inflation and restrictive monetary policies, emerging markets stand to benefit from economic diversification and demographic advantages.

Global growth is stabilizing as inflation returns closer to targets and monetary easing supports activity in both advanced economies and emerging market and developing economies (EMDEs). However, growth prospects appear insufficient to offset the damage done to the global economy by several years of successive negative shocks, with particularly detrimental outcomes in the most vulnerable countries. The subdued growth outlook and multiple headwinds underscore the need for decisive policy action.

Governments/Policy makers need to ensure longterm debt sustainability and maintain the ability to react to future shocks. Stronger efforts to contain and reallocate spending and optimise revenues, set within credible medium-term country-specific adjustment paths, will be important for debt burdens to remain manageable and to conserve the fiscal space required to address longer-term spending challenges. Policy makers need to resolutely pursue price stability, as well as boost tax revenues and rationalize expenditures in order to achieve fiscal sustainability and finance needed investments. Moreover, to raise longer term growth and put development goals on track, interventions that mitigate the impact of conflicts, lift human capital, bolster labor force inclusion, and confront food insecurity will be critical.

On the upside, a reversal of new trade barriers would boost global growth prospects and reduce inflation. A peaceful resolution to Russias war of aggression against Ukraine and of ongoing conflicts in the Middle East could also improve confidence and incentives to invest.

While there are emerging signs of stabilisation, the global economys trajectory remains fragile, heavily dependent on effective fiscal policies, geopolitical de-escalation, and coordinated efforts to mitigate inflationary and trade-related pressures and ensure a stable and sustainable economic trajectory.

Indias economic outlook for 2025 reflects cautious optimism, amidst the backdrop of persisting external headwinds. On the positive side, participating economists expect consumer spending to gain momentum, driven by an improved outlook for the agriculture sector, which is likely to bolster rural consumption and sentiment in the first half of the next fiscal year. Food inflation - which has remained elevated for over a year and strained household budgets, particularly for low- and middle-income urban families - is expected to ease. As inflationary pressures recede, participating economists expect urban consumption, especially for low ticket and discretionary items, to witness a recovery.

On investment front, the governments focus on capital expenditure is expected to remain a key growth driver in the year 2025-26. Investments in infrastructure and allied sectors-such as roads, housing, logistics, and railways-are anticipated to further economic momentum. Additionally, the services sector, particularly hospitality, real estate, health, and education, is expected to contribute to creation of fresh capacity.

Nonetheless, downside risks remain on the horizon. Participating economists expect the private capital expenditure cycle to stay subdued, with a cautious outlook limiting large-scale capacity additions. Factors such as geopolitical uncertainties, uneven domestic demand, oversupply from China have kept investors on the edge. Merchandise exports are projected to face persistent challenges, constrained by weak global demand, potential tariff wars, and ongoing geopolitical tensions. While services exports are expected to perform better than merchandise exports, uncertainties stemming from US trade policies and financial market volatility could pose additional risks.

The Indian economy is projected to grow at 6.2% in FY 2025-26 and 6.3% in FY 2026-27 amid escalating trade tensions and global uncertainties. Sustained investments in green energy, digital transformation, and infrastructure development will be crucial in boosting the growth. The governments emphasis on self-reliance, through continued support under the PLI scheme, is expected to boost domestic production and export capabilities. Favourable monsoon rains are likely to enhance summer-sowing areas for all major crops, improving agricultural output and rural consumption. Inflation is seen moderating, due to government and Reserve Bank of India (RBI) interventions, with core inflation reaching its lowest in a decade. However, challenges persist with food inflation, driven by supply chain disruptions and adverse weather conditions affecting key items.

Indias demographic advantage and continued investments in economic expansion offer a strong foundation for growth. Initiatives like the National Infrastructure Pipeline (NIP), National Monetisation Pipeline (NMP), PM Gati Shakti, and Atmanirbhar Bharat, among others, are set to transform Indias infrastructure landscape with a focus on railways, road transport, ports, and digital connectivity. Railways have seen the introduction of Vande Bharat trains and the expansion of Dedicated Freight Corridors. Road transport has benefited from the National Industrial Corridor Development Programme and the Bharatmala Pariyojana that incorporate sustainable construction practices and advanced traffic management systems.

The UDAN scheme has improved regional connectivity and airport infrastructure. These efforts solidify Indias position in the global economic landscape, enabling the country to navigate uncertainties and capitalise on emerging opportunities.

Overall, Indias economic outlook remains strong, driven by robust domestic demand, policy support, and sectoral resilience. Improving trade relations with the developed economies will provide the requisite impetus to the economy. The India - UK trade agreement is a positive development in this direction. By leveraging its domestic strengths and implementing strategic reforms, India is well-positioned to navigate global challenges and maintain its trajectory as a leading global economic powerhouse.

The Company with integrated manufacturing facilities do not foresee a major challenge ahead for its operations. The Company is also exploring various opportunities to secure availability of key raw materials. The Companys mines / plants are operating well and Company is hopeful of achieving better performance in coming years.

Risks and Concerns

The Company operates in a dynamic environment characterised by evolving regulatory and environmental requirements, heightened geopolitical uncertainty, and rapid technological advancements. These factors pose material risks, which is an integral part of business, across the organizations value chain. The Company follows a well-defined and exhaustive risk management process, which is integrated with its operations.

This enables the Company to identify, categorize and prioritize operational, financial and strategic business risks. The Company has formed a Risk Management Committee which has the mandate of identifying the risks and suggesting the ways to mitigate them. The Company spends significant time, effort and human resources to manage and mitigate identified risks.

The Company has identified its risk parameters and planned out mitigation measures to sustain its operations. Some of these include:

Risk	Risk-mitigating factors
Economic/Industrial risk -Cyclical nature of business -Unforeseen demand supply changes	- Diversification of revenue -Captive mineral resource -Backward and forward integration -Proximity to raw material source and market -Low leveraging -Customer loyalty
Environmental risk -Discharge of pollutants -Compliances -Emission of Co2	-Adequately equipped with pollution-control devices to observe norms -Regular upgradation and maintenance of the equipment to avoid discharge of pollutants in the environment -Focus on full waste utilization through waste to wealth programme -Installation of solar power plant -Replacement of diesel operated vehicles with Electrically operated vehicles.
Financial risk -Availability of funds for capex and business operations	-Low debt gearing ratios and efficient financial management. Creating cushion for contingencies.
Foreign Exchange risk -Unfavourable rupee/foreign currency movement	-Substantial amount of import, export and financial assets in foreign currency providing natural hedge -Regular review of exposure at highest level -Forward contracts -Avoiding exotic derivative structures
Human resources -Attracting and retaining talent at various levels is a challenge	-Ample opportunity of growth and development of individual -Safety and security, motivation, performance linked remuneration in line with market.
Input risk -Procurement of raw materials at the right cost and in the right time.	- Captive mineral resource - iron and coal -Integrated business model with backward and forward integration. -Captive power -connecting and Strengthening rail and road infrastructure. -Creation of a self-feeding ecosystem, costing and logistic issues
Regulatory risk -Compliance with the ever-changing applicable statutes and guidelines, rules and regulations	-Complies with all applicable statutory requirements and has systems in place to ensure compliance with the regulatory changes, if any
Risk	Risk-mitigating factors
Safety risk / Health related disruption -Healthy and safe working of workmen	-Regular health check-ups - Regular safety audit by independent team and compliance review. - Safety trainings, promoting near miss reporting and corrective actions. - Preventive maintenance of machines and equipment to avoid any unforeseen accidents -Adequate arrangements of firefighting system and dispensaries to address emergency situations
System / Cyber Security risk System capability, System reliability and Data integrity risks	- Maintenance and upgrading of systems on a continuous basis - Data security through access control restrictions - Regular data backup - Use of antivirus softwares and firewall system - Threat risk audit and prevention

Internal Control System and Their Adequacy

The Company has in place an adequate system of internal control commensurate with its size and nature of business. The system provides a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies.

The Company has a business planning system to set targets and parameters for operations which are reviewed with actual performance to ensure timely initiation of corrective action, if required.

The Company has availed the services of independent professional firm for Internal Audit, which checks the effectiveness of the internal controls with an objective to provide an independent, objective and reasonable assurance of the adequacy and effectiveness of the Companys risk management, control and governance processes. During the year, the Company had appointed external professional firm for thorough review of existing internal financial controls and updation thereof.

The scope and authority of the Internal Audit activity are approved by the Audit Committee. Internal Auditor reports directly to the Audit Committee of Board. Audit

Committee periodically reviews the Internal Audit Reports and issues guidance and advice. The Audit Committee also seeks the views/opinions of statutory auditors on the adequacy of the internal control systems in the Company. Minutes of the Audit Committee are put up to the Board of Directors.

The Companys Audit Committee reviews adherence to internal control systems, internal audit reports and legal compliances. This committee reviews all quarterly and yearly results of the Company and recommends the same to Board for its approval. The Committee also reviews the performance of the subsidiaries.

Product-wise Performance

During the year under review, plant performance was satisfactory. Sale of power from captive power plant on commercial consideration resulted into cut-down of production of billets, wire rod and HB wire. During the year, the Company operated all its plants at optimum capacity. Power generation increased substantially on account of acquisition of 600 MW thermal power plant of SKS Power Generation (Chhattisgarh) Limited from 22^nd August 2024. The coal production increased to

1.68 MnT post approval of the increased capacity. The consolidated product wise performance matrix for the year 2024-25 is summarized hereunder:

Product	Production (MTs)		Sales (MTs)		Captive consumption (MTs)
	2024-25	2023-24	2024-25	2023-24	2024-25	2023-24
Pellet	8,18,866	8,10,445	5,01,207	5,17,235	3,16,292	2,96,649
Sponge Iron	3,19,114	3,15,965	1,17,889	1,02,684	1,99,576	2,15,704
Steel Billet	2,05,130	2,29,065	30,718	31,153	1,73,697	1,98,026
Wire Rod	1,68,663	1,92,776	1,32,775	1,53,622	35,393	38,902
HB Wire	34,897	38,358	35,245	37,949	-	-
Product	Production (MTs)		Sales (MTs)		Captive consumption (MTs)
	2024-25	2023-24	2024-25	2023-24	2024-25	2023-24
Ferro Alloys	1,83,190	2,00,496	1,80,910	1,95,253	3,181	4,080
Power (Mn Kwh)	3,990	1,741	2,572	533	1,086	1,132
Iron Ore	3,44,372	3,75,470	-	-	3,30,214	3,59,722
Coal	16,79,998	14,39,646	3,53,989	8,47,174	13,19,681	7,76,648
Bricks	1,50,003	1,27,399	1,48,384	1,36,255	497	102

Financial Performance vis a vis Operational Performance as per standalone financials

The financial performance figures are not comparable year on year because of inclusion of performance of 600 MW thermal power plant for about 7 months. The asset and liability figures are also materially gone up because of merger of SKS Power Generation (Chhattisgarh) Limited into the company.

Turnover

During 2024-25, the Company achieved a turnover of 3,484.17 crore on standalone basis as against 2,733.45 crore in the previous year, showing an increase of 27.46%. At the consolidated levels, the turnover in 2024-25 was 4,642.85 crore as against 3,868.13 crore in the previous year, up by 20.03%. The price realisation of steel and ferro alloys was lower as compared to the previous year due to fall in prices. The turnover and profitability improved on account of higher generation of hydropower and sale of thermal power from newly acquired 600 MW thermal power plant.

Breakup of consolidated revenue (Entity wise)

Company	As at 31st March 2025	As at 31st March 2024	Product
Sarda Energy & Minerals Limited	3,430.33	2,648.54	Steel, Ferro alloys & Thermal Power
Sarda Metals & Alloys Limited	902.58	907.57	Ferro Alloys & Thermal Power
Madhya Bharat Power Corporation Ltd.	246.01	260.83	Hydro Power
Chhattisgarh Hydro Power LLP	47.75	38.73	Hydro Power
Sarda Energy Limited	9.74	7.85	Share of profit from LLP
Parvatiya Power Limited	6.44	4.61	Hydro Power
Total	4,642.85	3,868.13

Breakup of revenue (% Product wise)

Product	2024-25	2023-24	2024-25	2023-24
	Standalone		Consolidated
Ferro Alloys	16.52	22.68	30.13	38.03
Steel - billets, wire rods and HB wire	25.03	37.33	18.78	26.38
Sponge Iron	8.70	10.15	6.53	7.17
Pellet	13.41	17.54	10.06	12.39
Power	31.69	-	30.85	9.35
Others (includes eco bricks and trading)	4.65	12.30	3.65	6.68
Total	100.00	100.00	100.00	100.00

Exports

Export markets for ferro alloys are catered mainly from Sarda Metals plant located near the port. Consolidated ferro alloys exports of the Company stood at 1,06,107 MTs as against 1,15,231 MTs in previous year registering a decline of 7.92%.

During the year underreview, the Company completed the amalgamation of SKS Power Generation (Chhattisgarh) Limited (SKS) with itself and accordingly, the changes are majorly attributed to the amalgamation.

Material Developments in Human Resource/Industrial Relations

Human Resources plays a vital role in building a strong, inclusive, and future-ready workforce. The HR strategy of the Company focuses on talent development, employee engagement, diversity and inclusion, health, and well-being, ensuring that our people remain at the core of our organizational success.

Our environmental, social and governance (ESG) philosophy guides our efforts towards enhanced value creation for the stakeholders. Safety is our area of prime concern. Shop floor safety awareness session is continuous process. Behaviour based safety (BBS) is one of its unique training programs that builds and strengthen safety culture within the organization. The Company believes happiness is key for building positive safety culture in our organization and workplace.

Our industrial relations remained cordial throughout the year. We ensured open communication with workers and addressed concerns through regular dialogue and grievance redressal mechanisms. We aim to further strengthen our human resource function by enhancing learning opportunities and building a pipeline of future leaders through various programs.

We have introduced digital tools for performance tracking / evaluation to enhance efficiency of our employees. Through various programs /training sessions on leadership, soft skills, meditation & mental health, and compliance, we have created equal opportunities across group on gender, caste, and background, with increased focus on women and underprivileged groups.

Through employee engagement drives on sports, cultural & wellness activities, the Company has created a positive environment on work culture. We are continually promoting employee well-being, fostering the health and wellness of our people through a range of health care camps, awareness programmes, health talks and employee wellness initiatives.

We have organized health check-ups, spiritual & mental strengthening sessions, insurance support in addition to various programs for employees and their families, including employee engagement programs, team-building activities, festival celebrations, cultural events, employee recognition and rewards function, throughout the year.

During the year, 6 Quality Circle teams of the Company have participated in CCQC-2024 (Chapter Convention on Quality Concepts) organized in Bhilai and all the teams won "Gold Award". In NCQC-2024 (National Convention on Quality Concepts) organized in Gwalior, 6 QC Teams have participated and 3 of them won "Par Excellence" award and 3 of them won "Excellence" award with a 100% winning tally.

Our CSR activities remain centered around the areas of our operations. Our focus is on Education, Healthcare, Women empowerment, Livelihood, and infrastructure development, especially in rural and tribal areas which are deprived of facilities. During the year, the Company:

• continued to operate and maintain, mobile medical van near operational sites and surrounding villages benefitting 11,744 patients.

• supported "Parivaar Education Trust" for the maintaining hostels for poor children and necessary fooding, medical, and education facilities.

• support to "Sankalp Ek Prayas" for the "Adarsha Bal Gram" initiative in 250 villages with "Seekh" & "Srijan" projects on education.

• supported Project "Garima" to address issues of adolescent girls in community.

• Supported "Feel Parmartham" - a shelter home to rehab and rescue elderly & mentally challenged from streets.

• organized various health camps, and health awareness drives, support for various medical facilities

• has organized various training programmes for empowering women on Mushroom cultivation, sewing training etc. to promote income generation, benefitting 146 women.

• Initiated Community Social Awareness drive on Moral Values & Moral education and social issues, benefited 1145 number of women & children.

• has provided scholarships to meritorious students from nearby villages, benefited 60 students.

• supported 50 "Ekal Vidyalayas" for education development of tribal children, donated computers & other digital display devices and create infrastructure facilities for education of students.

• provided infrastructure support to schools, including building, boundary walls, toilets, computer labs, etc.

• supported 11 physically challenged couple for marriage under "Nirdhan Kanya Vivah" initiative.

• supported various social cause programs like drug de-addiction and road safety.

• organized mass plantation for sustainability by

planting 8,009 plants in and around the plant.

As of 31^st March 2025, the total number of permanent employees on company rolls stood at 1,905 as compared to 1,428 in the previous year. The number has gone up as a result of merger of SKS with the company.

Changes in Key Financial Ratios

Ratio	Standalone				Consolidated
	2024-25	2023-24	% Change	Comments	2024-25	2023-24	% Change	Comments
Debtors turnover (no. of days)	9.18	8.81	(4.23%)	-	10.87	13.36	(18.64%)	-
Inventory turnover (no. of days)	40.31	59.82	(32.61%)	Reduced due to increase in turnover on account of acquisition of SKS.	45.11	59.19	(23.78%)
Interest coverage ratio	12.03	69.02	(82.18%)	Reduced on account of fresh borrowing for acquisition of SKS. However, the ratio is still healthy.	6.95	8.51	(18.33%)
Current ratio	6.34	8.26	(23.25%)	-	3.06	3.36	(9.00%)	-
Debt equity ratio	0.24	0.02	(913.58%)	Increased on account of fresh borrowing for acquisition of SKS.	0.41	0.32	26.99%	Increased on account of fresh borrowing by parent entity for acquisition of SKS.
Operating profit margin (%)	20.35	15.80	28.80%	Improved on account of higher operating profit margin in power business acquired during the year.	16.06	12.57	27.76%	Improved on account of higher operating profit margin in power business acquired during the year.
Net profit margin (%)	17.45	17.04	2.41	-	15.12	13.55	11.59%	-
Return on net worth (%)	12.78	13.25	(3.55%)	The return on net worth fell because of increase in networth on account of acquisition of SKS.	13.56	13.48	0.63%	The return on net worth increased on account of higher profits reported by subsidiaries.

The finance cost went up on account of fresh borrowings for acquisition of SKS. Current tax liability fell on account of set off of brought forward losses of SKS against current year tax profit of the company in standalone accounts. The deferred tax liability in the balance sheet is down on account of set-off of deferred tax liability with deferred tax asset acquired from SKS. All other material changes in financial performance are mainly on account of acquisition of SKS, which has added revenue and expenses of 600 MW power plant from 22^nd August 2024.

Disclosure of Accounting treatment

The acquisition and merger of SKS Power Generation (Chhattisgarh) Limited has been accounted for as per Ins AS 103 "Business Combination" w.e.f. 22^nd August 2024. More specific details of the accounting treatment is given in the Note 35 of the standalone accounts.

Cautionary Statement

The above Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be "forward looking statements" 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 the Companys operations include external economic conditions affecting demand/supply influencing price conditions in the market in which the Company operates, changes in Government regulations, tax laws, and other incidental factors.