Sharvaya Metals Ltd Management Discussions

Economic Review Global Economy

The global economy has continued to demonstrate resilience despite multiple geopolitical and economic disruptions in recent years. However, the ongoing military conflict in the Middle East since February 2026 has emerged as another significant challenge to global stability. The conflict has disrupted key maritime and air trade routes, damaged infrastructure, and triggered volatility in commodity markets, particularly energy and food prices. Inflationary pressures have consequently intensified across regions, especially for commodity-importing emerging economies facing currency depreciation and imported inflation risks. Against this backdrop, global growth is projected at 3.1% in CY 2026 and 3.2% in CY 2027, lower than the average growth rate of approximately 3.4% witnessed during 2024-25 and below the historical average of 3.7% recorded during 2000-19.

Global inflation, which remained largely steady during CY 2025 despite uneven pressures across economies, is now expected to temporarily reverse its easing trend, rising to 4.4% in CY 2026 before moderating to 3.7% in CY 2027, primarily driven by higher energy and food prices. Global trade and economic activity continue to undergo structural adjustments amid evolving US trade policies and increasing geoeconomic fragmentation. The overall US effective statutory tariff rate currently stands approximately 5.3 % points, although uncertainty surrounding future tariff extensions and trade negotiations persists.

GDP Growth Rate (In %)

	Estimated	Projections
	CY 2025	CY 2026	CY 2027
World Output	3.4	3.1	3.2
Advanced Economies	1.9	1.8	1.7
Emerging Market and Developing Economies	4.4	3.9	4.2

(Source: World Economic Outlook by IMF, April 2026)

Outlook

The outlook remains cautiously stable, supported by resilient consumption, fiscal support measures, and improving productivity driven by technological advancements. However, ongoing geopolitical conflicts, elevated commodity prices, persistent inflationary pressures, and uncertainty surrounding global trade policies continue to pose risks to economic growth. Medium-term growth prospects are expected to remain moderate amid structural challenges and increasing geoeconomic fragmentation across regions.

(Source: World Economic Outlook by IMF, April 2026)

Indian Economy

The Indian economy continued to demonstrate resilience amid heightened global uncertainty arising from geopolitical tensions in West Asia, which disrupted trade routes and increased volatility in energy and commodity prices, particularly due to risks surrounding the Strait of Hormuz. These developments created spillover effects across global financial markets and emerging economies, including India. Despite external headwinds, India remains among the faster-growing major economies, supported by strong domestic demand, sustained infrastructure spending, healthy credit growth, and stable macroeconomic fundamentals.

The Reserve Bank of India (RBI) retained its FY 2025-26 GDP growth estimate at 7.6% while projecting growth of 6.9% for FY 2026-27. Growth is expected to be supported by sustained momentum in the services sector, improving manufacturing capacity utilisation, healthy corporate and banking sector balance sheets, and continued policy support including GST rationalisation. Meanwhile, the RBI has reduced policy rates by a cumulative 125 basis points since February 2025, although it maintained the policy rate at 5.25% amid rising geopolitical risks and inflationary pressures. Indias inflation rate increased marginally to 3.48% in April 2026 primarily due to higher fuel costs arising from Middle East tensions and rupee weakness

(Source: https://tradingeconomics.com/india/inflation-cpi)

Indian Economy GDP Growth Rate (in %)

Indias industrial sector continues to gain momentum, supported by sustained infrastructure development and policy-led manufacturing expansion. This growth is further supported by the Production Linked Incentive (PLI) schemes, which have attracted investments exceeding 2.16 lakh crore across 14 sectors as of April 2026. Infrastructure development also remains a key driver, with capital expenditure budgeted at 12.2 lakh crore (3.4% of GDP) in the Union Budget FY 2026-27. Continued policy focus on infrastructure, MSMEs, digital and semiconductor ecosystems, ease of doing business, and employment generation is expected to support Indias medium-term growth trajectory.

(Source: https://www.pib.gov.in/PressReleasePage. aspxRs.PRID=2220800&reg=3&lang=2; Economic Survey 2025-26; https:// www.pib.gov.in/PressReleasePage.aspxRs.PRID=2246085&reg=3&lang=2)

Outlook

Indias economic outlook remains positive, supported by strong domestic demand, sustained infrastructure spending, improving manufacturing activity, healthy credit growth, and continued policy support. Moderating inflation, steady services sector expansion, increasing digital adoption, and rising investments across infrastructure and renewable energy sectors are expected to support medium-term growth momentum. While global geopolitical uncertainties, volatile commodity prices, and trade disruptions may pose external risks, Indias resilient domestic economy and stable financial system continue to position the country among the faster-growing major economies.

(Source: World Economic Outlook by IMF, April 2026

Industry Review

Global Aluminium Industry Overview

The global aluminium industry plays a critical role in modern manufacturing and infrastructure development, supported by its unique combination of strength, lightweight properties, corrosion resistance, recyclability, and conductivity. Aluminium remains a key material across diverse end-use sectors including transportation, construction, electrical transmission, packaging, consumer durables, renewable energy, and industrial applications.

Global primary aluminium production reached approximately 73.8 million tonnes in 2025, reflecting steady growth over the previous year. China continued to dominate global production, accounting for nearly 60% of total output, followed by Europe and the Gulf Cooperation Council (GCC) region. Alongside primary production, recycled aluminium has become an increasingly important source of supply, contributing nearly 37% of global aluminium production and consumption as industries focus on sustainability, circularity, and lower-carbon manufacturing processes.

The industry continues to benefit from rising urbanisation, infrastructure investments, electrification initiatives, and increasing adoption of lightweight materials across transportation and renewable energy applications. These factors are reinforcing aluminium’s position as a strategic material for global economic development and the energy transition.

Key Industry Trends

• Rising Demand from Energy Transition

Demand for aluminium continues to be supported by electric vehicles (EVs), renewable energy projects, battery energy storage systems, power transmission infrastructure, and lightweight transportation applications. Aluminiums favourable strength-to- weight ratio and recyclability make it a preferred material for decarbonisation initiatives across multiple sectors.

• Structural Supply Constraints

The industry is witnessing a gradual shift from surplus conditions to a tighter supply environment. Chinas effective production ceiling of around 45 million tonnes has limited incremental capacity additions, while energy availability and environmental regulations are influencing production decisions globally.

• Growing Importance of Low-Carbon Aluminium

Global customers are increasingly seeking low-carbon and sustainably produced aluminium. Regulatory measures such as the European Unions Carbon Border Adjustment Mechanism (CBAM) are expected to accelerate investments in cleaner production technologies and renewable power-based smelting.

• Higher Industry Cost Structure

Aluminium production remains highly energy intensive. Rising electricity costs, increasing environmental compliance requirements, and higher capital expenditure for new smelting projects are contributing to a structurally higher industry cost base compared with historical averages.

• Growth in Emerging Markets

Countries such as India and China are expected to remain important growth markets, supported by investments in infrastructure, urbanisation, electrification, renewable energy, and industrial development.

Outlook

The outlook for the global aluminium industry remains positive, supported by steady demand from the packaging, energy, transportation and capital goods sectors, along with continued investments in infrastructure and electrification. China is expected to remain the largest contributor to demand growth, while India is projected to witness steady consumption driven by infrastructure development and power-related projects. Although geopolitical uncertainties and macroeconomic factors may create short-term volatility, constrained supply additions and favourable long-term demand fundamentals are expected to support the industrys growth trajectory over the coming years.

Indian Aluminium Market

India continues to strengthen its position as one of the worlds fastest-growing aluminium markets, supported by rapid urbanisation, infrastructure development, industrialisation, and the increasing adoption of lightweight and sustainable materials across key sectors. Aluminium demand is being driven by growing applications in construction, automotive, electrical and power transmission, packaging, and renewable energy, reinforcing its importance in the countrys economic and industrial development.

The Indian aluminium market reached approximately 2.5 million tonnes in 2025 and is projected to grow to 3.5 million tonnes by 2034, registering a CAGR of 3.94% during 2026-2034. The growth is supported by rising demand from the construction, automotive and electrical sectors, alongside continued government investments in infrastructure, manufacturing and electrification. Expanding domestic production capacities, increasing adoption of recycled aluminium, and advancements in recycling technologies are further strengthening the industrys long-term growth prospects while supporting the transition towards more sustainable manufacturing practices.

[Source: https://www.imarcgroup.com/india-aluminium-market]

Key Trends in the Industry

• Growing Demand from Infrastructure and Construction

Indias continued investment in roads, railways, airports, metro networks, power transmission and urban infrastructure is driving aluminium consumption across the construction sector. Its durability, corrosion resistance and lightweight properties make aluminium a preferred material for modern infrastructure and building applications.

• Increasing Focus on Recycling and Sustainability

Sustainability is becoming a key growth driver for the aluminium industry. Growing investments in recycling infrastructure and secondary aluminium production are improving resource efficiency, lowering energy consumption and reducing carbon emissions, while supporting the development of a circular economy.

• Shift Towards Value-added Aluminium Products

Manufacturers are increasingly focusing on value- added and specialised aluminium products to meet evolving customer requirements across transportation, engineering, packaging and industrial applications. This shift is improving product quality, enhancing competitiveness and creating new growth opportunities for the domestic aluminium industry.

[Source:https://www.mysteel.net/news/5111608-iai-global-primary-aluminum-output-exceeds-73-million-t-in-2025]

Company Overview

Sharvaya Metals Limited is engaged in the manufacturing and supply of value-added aluminium products, serving a diverse customer base across domestic and international markets. The Company operates an integrated manufacturing facility in Ahmednagar, Maharashtra, equipped with advanced production infrastructure, quality control systems, and in-house research and development capabilities. Its diversified product portfolio includes aluminium alloyed ingots, billets, slabs, sheets, circles, extrusion dies, and EV battery housings, catering to industries such as automotive, electric vehicles, consumer appliances, cookware, construction, aviation, defence, LED lighting, and industrial extrusions. Backed by strong manufacturing capabilities, customer-centric solutions, and long-standing relationships with OEMs and Tier-1 customers, the Company continues to focus on operational excellence, product innovation, and expanding its presence across high-growth end-use sectors.

Financial Performance

(In crores)

Metrics	FY 2025-26	FY 2024-25
Revenue	229.83	112.52
EBITDA	18.26	19.30
PAT	11.67	12.51

Human Resources

The Company considers its employees to be one of its most valuable assets and remains committed to fostering a safe, inclusive, and performance-driven work environment. It continues to focus on attracting, developing, and retaining talent by promoting continuous learning, employee engagement, teamwork, and a culture of accountability and operational excellence. The Company also emphasizes workplace safety, skill enhancement, and employee wellbeing to support sustainable growth and organizational success. As on March 31,2026, the Company had 49 employees on its rolls.

Risk Management

Sharvaya Metals recognizes that effective risk management is integral to sustainable business growth. The Company has implemented a structured risk management framework to identify, assess, monitor, and mitigate key strategic, operational, financial, regulatory, and market- related risks. Continuous evaluation of the business environment, supported by proactive mitigation measures, enables the Company to strengthen resilience, maintain operational continuity, and capitalize on emerging opportunities while safeguarding stakeholder interests.

Internal Control Systems

The Company has established an adequate system of internal controls commensurate with the nature, scale, and complexity of its operations. These controls are designed to safeguard assets, ensure the accuracy and reliability of financial reporting, promote operational efficiency, and ensure compliance with applicable laws and regulations. The internal control framework is periodically reviewed and strengthened through continuous monitoring and management oversight, enabling timely identification and mitigation of operational and financial risks.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, government policies, market demand, raw material prices, competitive dynamics, and other risks beyond the Companys control. The Company undertakes no obligation to publicly update or revise any forward-looking statements based on subsequent developments or events.