Siyaram Recycling Industries Ltd Management Discussions

Siyaram Recycling Industries Limited (the Company) manufactures brass-based components, primarily plumbing and sanitary parts, with both domestic and export sales. This MD&A provides an overview of the industry context, business model, operating and financial performance, risks, internal controls, sustainability, and outlook. It has been structured to align with better-practice disclosures commonly seen among listed recycling peers in India (non-ferrous scrap processors, metal recyclers, and integrated brass value-chain companies), while being grounded in the Companys FY2025-26 audited financials and notes shared.

1. ECONOMIC OVERVIEW

Market Size and Growth Outlook

• Globally, the waste management and recycling services market is projected to grow from approximately US$67.8 billion in 2026 to US$129.7 billion by 2035, registering a CAGR of about 6.4%. This growth reflects increasing policy support for sustainable waste management, corporate commitments towards environmental sustainability, and rising waste volumes associated with rapid urbanisation and industrial development.

• Equipment capacity investment is a parallel leading indicator: Indias recycling equipment market is projected to almost double from $654M (2024) to $1.25B by 2035, indicating continued capital formation in collection, sorting, and processing assets.

• The global recycling equipment market is also set to expand, driven by stricter environmental rules and rising waste volumes, though capex intensity remains a barrier for SMEs.

• India has established itself as one of the worlds leading manufacturing hubs for brass components, supported by a well-developed ecosystem of manufacturers, processors and exporters. Rising investments in urban infrastructure, housing, water supply and sanitation projects, together with the growing demand for precision-engineered components, continue to create favourable growth opportunities for the domestic brass industry. Government initiatives promoting infrastructure development, manufacturing and exports are expected to further strengthen demand for brass-based products over the medium to long term.

Policy Tailwinds and Regulatory Environment (India)

• The Government has rolled out multiple Extended Producer Responsibility (EPR) frameworks (ewaste, endofiife vehicles, plastics, tyres, batteries, used oil), monetizing recycling via tradable certificates and raising formal sector participation and profitability potential for compliant recyclers.

• The Ministry projects Indias circular economy could reach a $2T value and add 10 million jobs by 2050, underscoring long-term policy support and investment runway.

• The Indian Government continues to promote sustainable manufacturing and the circular economy through policies focused on resource efficiency, recycling and environmental compliance. Initiatives such as Make in India, Atmanirbhar Bharat, increased infrastructure spending and urban development programmes are expected to support demand for brass-based components across plumbing, sanitaryware and engineering applications.

• Vehicle scrappage policy and formal dismantling centers, alongside broader circular economy frameworks across sectors, are expanding feedstock visibility in metals and ELV channels, supporting scrap availability and quality (industry commentary).

Implications for Brass/Non Ferrous Players

• Structural demand: Policy mandated recycled content for nonferrous and energy cost advantages of secondary metals sustain medium term growth for brass/copper recyclers, especially in plumbing/ sanitary, auto components, and electrical.

• Competitive edge via quality: Higher purity brass/copper scrap streams, alloy consistency, and traceability (digital EPR, batch testing) support better realizations and export opportunities.

• Integration opportunities: Moving up the chain—from scrap aggregation and presorting to alloy production and component manufacturing—can stabilize margins against commodity swings.

• ESG/EPR readiness: Early compliance, data systems for certificate generation, and OEM partnerships can unlock premium channels and reduce off take risk.

2. INDUSTRY STRUCTURE AND DEVELOPMENTS (INCLUDES ECONOMIC OVERVIEW)

• Global non-ferrous recycling: Brass is an alloy of copper and zinc, and its circularity is fundamentally enabled by scrap recovery and re-melting, with low yield losses and high material value retention. Global tightness in copper and zinc balance, regional freight normalization post-COVID, and volatile energy costs shaped spreads and working capital through FY26.

• India market dynamics: India remains a key hub for brass manufacturing (Jamnagar cluster) benefiting from skilled labor, legacy cluster ecosystems, and growing downstream demand in building materials, water and plumbing systems, sanitaryware, and engineering components.

• Policy and compliance: Regulatory emphasis on traceability, MSME norms, EPR-aligned sustainability momentum, and evolving customs/FTAs infiuence import mix and cost. FX volatility continues to drive periodic MTM effects on margins and receivables.

Peer benchmarking signals: Listed recycling peers have focused on:

• Deeper sourcing integration and disciplined inventory cycles to manage spread risk.

• Higher value-addition (downstream machining, customer approvals, and new SKUs) to stabilize margins.

• Energy productivity (rooftop solar, furnace upgrades), and digitization (track-and-trace, ERP).

• Sustainability disclosures and certifications to meet global buyer standards.

3. BUSINESS MODEL, STRATEGY, AND COMPETITIVE ADVANTAGES

• Integrated brass value chain: Sourcing of copper/zinc/brass scrap and billets, controlled melting and casting, followed by machining and finishing of plumbing/sanitary components.

• Customer mix: Domestic OEMs/brands and export customers; FY26 saw resilient domestic volumes and steady exports.

• Value proposition:

o Reliable quality and cluster-driven efficiencies.

o Flexibility in alloy specs and batch sizes.

o Cost discipline in material yields and overheads.

• Strategic priorities:

o Working capital discipline and inventory turns.

o Premiumization of product mix (higher-machine-time components).

o Energy cost optimization (solar CWIP commissioned in FY26).

o Governance and systems strengthening to support scale

4. OPERATING PERFORMANCE

• Revenue from Operations : During FY2025-26, the Company recorded Revenue from Operations of fi36,169.10 lakh. While revenue moderated compared to the previous year, the Company remained focused on maintaining operational stability, strengthening customer relationships, and responding proactively to evolving market conditions.

• Efficient Cost Management : Cost of materials consumed stood at fi34,163.81 lakh, aligned with the level of operations. The Company continued to optimize raw material procurement and inventory management, supporting efficient utilization of resources during the year.

• Controlled Operating Expenses : Employee benefits expense was maintained at fi268.38 lakh, while Other Expenses were significantly reduced to fi1,265.69 lakh from fi2,622.32 lakh in the previous year, reflecting the Companys continued focus on cost rationalization and operational efficiency.

• Investment in Growth : Finance costs increased to fi1,062.68 lakh, reflecting working capital requirements and support for business operations. Depreciation and amortization expense increased to fi162.17 lakh, indicating continued investment in manufacturing assets and production capabilities to support future growth.

• Disciplined Operations : Total expenses stood at fi35,691.79 lakh, demonstrating the Companys disciplined approach to cost management and operational efficiency despite a dynamic business environment. The Company continues to focus on improving productivity, optimizing processes, and enhancing long-term value creation.

5. FINANCIAL PERFORMANCE (STANDALONE)

• Revenue from Operations : The Company recorded Revenue from Operations of fi36,169.10 lakh during FY2025-26. The Company continued to maintain business momentum by focusing on operational efficiency, customer relationships and disciplined execution amid a dynamic market environment)

• Income Profile : Total Income stood at fi36,269.99 lakh during the year, supported by revenue from operations and Other Income of fi100.89 lakh. The Company continued to strengthen its operating framework and focus on sustainable business growth.

• Profit Before Tax (PBT): The Companys Profit Before Tax is approximately fi578.20 lakh.

• Profit After Tax (PAT): 379.20 lakh (FY24-25: 1457.39 lakh)

Key Ratios:

Name of the Ratio	F.Y. 2025-26	F.Y. 2024-25	% Change
Trade Receivables Turnover Ratio	6.86	12.74	46.18%
Remarks	The change was mainly attributable to movement in revenue and average trade receivables during the year.
Inventory Turnover Ratio	2.78	6.36	56.25%
Remarks	The variation was primarily due to changes in inventory levels and cost of materials consumed during the year.
Debt Service Coverage Ratio	1.68	3.61	53.46%
Remarks	The variation was primarily due to changes in operating earnings and debt servicing obligations during the year.
Current Ratio	2.06	1.81	13.65%
Remarks	The increase was primarily due to improvement in current assets in relation to current liabilities during the year.
Debt-Equity Ratio	0.88	0.60	46.53%

Name of the Ratio	F.Y. 2025-26	F.Y. 2024-25	% Change
Remarks	The change was mainly attributable to the movement in borrowings and shareholders\u2019 equity during the year.
Return On Equity Ratio	0.03	0.14	79.38%
Remarks	The change was mainly attributable to the movement in profit after tax during the year.
Net Profit Ratio(%)	1.79	2.85	37.17%
Remarks	The variation was primarily due to changes in profitability during the year.

6. OPERATING SEGMENTS:

Operating segments are reported in a manner consistent with the internal reporting provided to the Core Management Committee which includes the Managing Director who is the Chief Operating Decision Maker. As company is mainly a manufacturer and Core Management Committee examines performance of the company as a single operating segment in accordance with Ind AS 108 Operating Segments notified pursuant to Companies (Accounting Standards) Rule, 2015. Further, there is reportable secondary segment i.e. Geographical segment. Core Management Committee examines performance from geographical perspective and has identified geographical reportable segments from which significant risks rewards are derived viz. Domestic Sales & Export Sales. Disclosure of the same has been made herewith. Segment reveune comprises of revenue from operations and other operating revenue. Segment wise analysis has been made on the below mentioned basis and amounts allocated on a reasonable basis.

Particulars	As at March 31, 2026	As at March 31, 2025
A. Segment revenue
Domestic	35261.29	43,819.71
Export	907.81	7,336.13
Total	36169.10	51,155.84
B. Segment Results
Domestic	2693.06	3493.30
Export	258.41	893.47
Total	2951.47	4,386.77
C. Less
Interest	1062.68	769.25
Other Un allocable expenditure net off un-allocable income	1310.60	1,575.94
Total Profit before tax	578.20	2,041.59
D. Capital Employed
Domestic	5094.71	1086.89
Export	47.35	429.89
Unallocated	14556.25	13,396.61
Total	19698.31	14913.39

7. OUTLOOK & FUTURE PROSPECTS

The non-ferrous metal recycling and brass manufacturing sector continues to benefit from strong domestic demand across infrastructure, plumbing, sanitary, and electrical segments, alongside a global shift toward sustainable, circular economy practices. While raw material price volatility and international logistics present short-term cost considerations, the Company is leveraging diversified scrap sourcing and tight inventory controls to maintain operational resilience.

Looking ahead, Siyaram Recycling Industries Limited is focused on calibrated capacity expansion, modernizing extrusion and machining infrastructure, and broadening its high-margin precision product portfolio. By strengthening domestic distribution networks and export channels while optimizing working capital, the Company is well-positioned to drive progressive margin recovery, capture market share, and build long-term stakeholder value.

8. MARKET TRENDS

1. Growing Adoption of Recycled Metals: The increasing focus on circular economy practices is creating long-term opportunities for recycling companies by promoting efficient utilisation of metal resources and reducing dependence on primary raw materials.

2. Expansion Opportunities in Domestic and Export Markets : Indian manufacturers continue to benefit from their manufacturing capabilities, skilled workforce, competitive cost structure, and ability to cater to diverse customer requirements across global markets.

3. Demand for Quality and Customised Components : Customers are increasingly seeking reliable suppliers capable of delivering precision-engineered components with consistent quality standards, providing opportunities for established manufacturers.

4. Focus on Operational Excellence : Industry participants are increasingly adopting improved processes, technology integration, and efficient resource management to enhance productivity and competitiveness.

9. OPPORTUNITIES AND THREATS

Opportunities

1. Expansion of the Automotive and Electrical Industries : Both sectors rely heavily on brass for components like connectors, terminals, and electrical fittings. With the growing demand for electric vehicles and renewable energy infrastructure, the need for brass and its recycling is expected to increase.

2. Urbanization and Infrastructure Development : Urbanization in emerging economies is driving demand for construction materials, including brass, creating opportunities for recyclers to supply sustainable alternatives to virgin materials.

3. Technological Innovation : As the industry continues to adopt cutting-edge technologies such as artificial intelligence (AI), machine learning (ML), and automation, there will be further opportunities for enhanced operational efficiency, reducing waste, and increasing yield in recycling processes.

4. Government Support and Policies : Incentives, subsidies, and policies that support recycling industries, particularly in Europe and North America, are creating favorable environments for brass recyclers to thrive. This is also evident in emerging markets, where governments are increasingly promoting waste reduction and recycling.

5. Expanding export markets – Growing international demand offers potential for increased sales and global footprint.

6. Rising domestic infrastructure and housing investment – Large-scale government and private sector projects are driving higher demand for metals.

7. Use of recycled metals in sustainable projects – Increasing preference for eco-friendly and sustainable construction materials creates new market avenues.

Threats

1. Fluctuating Metal Prices : Brass recycling is highly dependent on global copper and zinc prices, which can be volatile. Price fluctuations can impact profitability, requiring companies to carefully manage risks and optimize operations.

2. Quality Control : Maintaining consistent quality in recycled brass is challenging due to varying scrap metal sources. Advanced sorting and alloy separation technologies can help address this issue, but smaller players may struggle with the capital investment required.

3. Regulatory Compliance : While environmental regulations can provide opportunities, they also add to operational complexity. Brass recyclers must ensure compliance with safety and environmental standards, which can increase costs.

4. Competition from Primary Metals : Despite the environmental and cost benefits of recycled materials, primary metal producers continue to dominate the market. The competition from primary metals, especially during periods of low prices, can challenge the competitiveness of recycled brass.

10. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company maintains an adequate and effective Internal Financial Control (IFC) framework commensurate with the size, scale, and complexity of its operations. This mechanism ensures the orderly and efficient conduct of business, strict adherence to company policies, safeguarding of assets, continuous optimization of resources, and timely prevention and detection of frauds and errors.

The internal control architecture ensures that all operational and financial transactions are properly authorized, accurately recorded, and reported in a timely manner, while maintaining full compliance with applicable statutory laws, regulatory guidelines, and internal governance procedures established by the management.

11. BUSINESS, OPERATIONAL AND FINANCIAL RISKS

The major risks and uncertainties that may impact the Companys business operations, financial condition, and performance include:

1. Macroeconomic Conditions: Exposure to domestic economic trends, global economic shifts, and cyclical demand fluctuations in core end-user industries.

2. Inflation & Interest Rates: Cost pressures arising from persistent infiationary forces and interest rate volatility affecting borrowing and capital costs.

3. Foreign Currency Volatility: Foreign exchange exposure resulting from fluctuations in currency exchange rates on international trades and imports.

4. Force Majeure & Unforeseen Events: Unexpected operational disruptions caused by natural disasters, geopolitical crises, public health emergencies, or localized unrest.

5. Regulatory & Policy Changes: Amendments in government policies, trade regulations, environmental standards, and statutory compliance frameworks.

12. RISK & CONNCERS

The Companys business operations are inherently exposed to global price volatility in primary non-ferrous metals, particularly copper and zinc, which form the core constituents of brass scrap. Unpredictable commodity price movements in international markets directly impact raw material procurement costs and inventory valuations. To mitigate this risk and stabilize input costs, the Company employs structured metal price hedging strategies alongside short-cycle, dynamic procurement practices that help insulate operating margins against sharp market fluctuations.

In addition, evolving quality standards and stringent environmental compliance norms present ongoing operational requirements that demand high processing efficiency. To mitigate compliance risks and retain cost competitiveness, the Company maintains continuous investments in advanced sorting, refining, and recycling technologies. Upgrading processing infrastructure enhances metal recovery yields, lowers operational costs, and ensures strict adherence to statutory environmental directives.

Finally, reliance on a single material stream exposes the business to specific end-market cycles and material concentration risks. To hedge against sector-specific demand shifts, the Company is actively diversifying its processing capabilities into other non-ferrous metal segments while expanding its footprint in value-added downstream brass components, thereby building a balanced and resilient business model.

13. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The Company considers its human capital as its most valuable asset and the primary driving force behind its growth and operational expansion. Committed to fostering an inclusive work culture, the Company remains an equal opportunity employer that actively embeds these core values across all levels of the organization. Through structured learning and development initiatives, employees are regularly upskilled and mentored to assume larger leadership roles. To continuously enhance the overall employee experience, the Company refines its HR processes by integrating stakeholder feedback, institutional knowledge, and prevailing industry best practices. As of March 31, 2026, the Company maintained a permanent workforce of 40 employees.

14. CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied due to various factors, including global and domestic demand-supply conditions, raw material price volatility and availability, changes in government regulations, tax laws, economic developments within India and key international markets, and other operational contingencies. The management undertakes no obligation to publicly update or revise any forward-looking statements based on subsequent developments, information, or events.

FOR & ON BEHALF OF THE BOARD OF DIRECTORS

FOR, SIYARAM RECYCLING INDUSTRIES LIMITED

(Formerly Known as Siyaram Recycling Industries Private Limited)

Sd/-

Ramgopal Ochhavlal Maheshwari

Chairman & Whole Time Director

DIN: 00553232

Date: 24 th August, 2026

Place: Jamnagar