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 FY2024-25 audited financials and notes shared.

1. ECONOMIC OVERVIEW

Market Size and Growth Outlook

Indias overall recycling market is expected to reach about $0.89B in 2025 and grow at ~8.5% CAGR through 2030, signaling sustained expansion supported by rising waste generation, regulation, and circular-economy adoption.

Globally, waste and recycling services are on a stable growth path; market value is projected to rise from $67.8B in 2025 to $129.7B by 2035 at 6.4% CAGR, reflecting policy pressure, corporate sustainability targets, and urbanization-led waste volumes.

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.

Policy Tailwinds and Regulatory Environment (India)

The Government has rolled out multiple Extended Producer Responsibility (EPR) frameworks (ewaste, endoflife 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.

Nonferrous metals are moving toward mandated recycled content India announced minimum recycled content from FY202728 (e.g., 5% rising to 10% for aluminum, 20% for copper, 25% for zinc), with EPR adoption across manufacturers, catalyzing domestic scrap recovery and secondary metal demand.

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/NonFerrous Players

Structural demand: Policymandated recycled content for nonferrous and energycost advantages of secondary metals sustain mediumterm growth for brass/copper recyclers, especially in plumbing/ sanitary, auto components, and electricals.

Competitive edge via quality: Higherpurity 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 offtake 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 FY25.

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 influence 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; FY25 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

Production and sales: Revenue from Operations grew 23.8% YoY to 51,155.84 (FY24: 41,298.84). Domestic sales remained the anchor, while exports complemented utilization.

Input cost environment: Cost of materials consumed rose in line with scale to 52,388.88 (FY24: 40,046.63), partially offset by favorable inventory movement and operating leverage.

Operating efficiency:

Inventory Turnover ratio moderated to 6.36x (FY24: 11.70x) due to a build-up in inventories (closing inventory 20,067.28 vs 11,927.54 last year), reflecting growth readiness and raw material stocking in a volatile pricing environment.

Trade Receivables Turnover at 12.74x (FY24: 12.91x) remained healthy; receivables at 5,094.50.

Trade Payables Turnover improved to 19.26x (FY24: 18.44x), indicating timely supplier servicing in a growth year.

5. FINANCIAL PERFORMANCE (STANDALONE)

Revenue from Operations: 51,155.84 (?23.8% YoY)

Other Income: 223.35 (FY24: 126.29) driven by FX differences, duty drawback, and miscellaneous income.

Total Income: 51,379.19 (FY24: 41,425.13)

EBITDA proxy: Profit before interest, tax, depreciation, and amortization improved, supported by operating scale; depreciation was 121.26 (FY24: 145.99); finance cost 769.25 (FY24: 669.16).

Profit Before Tax (PBT): 2,041.58 (FY24: 1,015.60)

Profit After Tax (PAT): 1,457.39 (FY24: 752.23)

EPS (Basic/Diluted): 6.69 (FY24: 4.00) on a higher equity base.

Balance Sheet and Cash Flow:

Total Assets: 28,324.50 (FY24: 17,033.44), driven by inventories, receivables, and capex.

Equity: 12,689.06 (FY24: 7,672.91), reflecting preferential allotment and retained earnings.

Debt profile: Total borrowings (long + short term) at 7,607.98; Debt-Equity at 0.60 (FY24: 0.77).

Working Capital: Current ratio at 1.81 (FY24: 1.74).

Cash flows:

CFO: -4,320.75, largely due to expansion in inventory and receivables in a high-growth year.

CFI: -278.13 (capex).

CFF: +4,547.82 (equity raise 3,530.22; net borrowings).

Key Ratios:

ROE: 14.31% (FY24: 12.23%)

Net Profit Margin: 2.85% (FY24: 1.82%)

Net Capital Turnover: 5.44x (FY24: 7.54x), impacted by working capital expansion.

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, 2025	As at March 31, 2024
A. Segment revenue
Domestic	43,819.71	36,467.06
Export	7,336.13	4,831.78
Total	51,155.84	41,298.84
B. Segment Results
Domestic	3,519.74	2,695.62
Export	867.03	220.44
Total	4,386.77	2,916.06
C. Less
Interest	769.25	669.16
Other Un allocable expenditure net off un-allocable income	1,575.94	1,231.30
Total Profit before tax	2,041.58	1,015.60
D. Capital Employed
Domestic	1086.89	1562.00
Export	429.89	115.75
Unallocated	13,396.61	7,841.33
Total	14913.39	9519.08

7. MARKET TRENDS

1. Growing Demand for Sustainable Materials: As industries across the globe strive to meet environmental standards and regulatory requirements, the demand for recycled brass has increased. Brass recycling reduces the need for virgin material, decreases energy consumption, and minimizes greenhouse gas emissions.

2. Technological Advancements: Advancements in recycling technologies, such as improved sorting and alloy separation methods, have enhanced the efficiency and profitability of brass recycling operations. Innovations in automation and artificial intelligence are helping recyclers recover higher yields of usable brass from scrap.

3. Rising Costs of Raw Materials: The rising costs of copper and zinc, key components of brass, have driven manufacturers to seek more affordable sources of material. Recycled brass provides a cost-effective alternative, helping to mitigate price volatility in raw material markets.

4. Circular Economy Initiatives: Governments and industries are increasingly focusing on circular economy initiatives. Recycling and reusing brass align with these initiatives, promoting sustainability, reducing waste, and conserving finite resources.

5. Environmental Regulations: Stricter environmental regulations globally are driving recycling activities, with governments incentivizing industries to adopt sustainable practices and reduce their carbon footprint.

8. 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.

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in all material respects, an adequate internal financial control towards achieving orderly and efficient conduct of its business operations, adherence to companys policies, optimum utilization of resources, and effective monitoring thereof in order to prevent and detect frauds and errors in timely manner. The internal control mechanism ensures that, all transactions are authorized, recorded, and reported correctly in a timely manner and compliance with all laws and regulations and policies and procedures laid down by the management from time to time.

10. BUSINESS, OPERATIONAL AND FINANCIAL RISKS

The significant risks and concerns which may have an impact on the Companys business are as follows:

1. Indian Economy and International Economic trends

2. Interest rate fluctuations and high rates on inflation

3. Foreign Currency rate fluctuations

4. Unforeseen circumstances like natural calamities- pandemic, floods, earthquakes, closure due to violence

5. Government Policies & Regulations

11. RISK MANAGEMENT

1. Metal Price Hedging: To mitigate the risk of fluctuating metal prices, many companies employ hedging strategies to stabilize costs.

2. Investment in Technology: Continued investment in sorting and recycling technologies is essential for enhancing profitability and ensuring compliance with stringent quality and environmental standards.

3. Diversification : Brass recyclers are increasingly diversifying their operations to include other non-ferrous metals, which helps reduce dependency on any single material and provides a hedge against price volatility.

12. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The Company considers employees as its vital and most valuable assets. Your Company considers manpower as its assets and understands that people have been driving force for growth and expansion of the Company. Company has always remained an equal opportunity employer and has embedded these values in its employees. Manpower are being mentored to take on larger roles in the organisations. Through our learning and development initiatives, the Company continues to upskill our employees for their jobs. The Company is into process of continuous improvements based on feedback and inputs from multiple stakeholders, past experiences and industrys best practices for giving better employee experiences. During the year, the company employed 54 permanent employees.

13. CAUTIONARY STATEMENT

The Management Discussions and Analysis Statement made above are on the basis of available data as well as certain assumptions as to the economic conditions, various factors affecting raw material prices, selling prices, trend and consumer demand and preference, governing and applicable laws and other economic and political factors. The management cannot guarantee the accuracy of the assumptions and projected performance of the Company in future. It is therefore, cautioned that the actual results may differ from those expressed and implied therein.

FOR & ON BEHALF OF THE BOARD OF DIRECTORS

FOR, SIYARAM RECYCLING INDUSTRIES LIMITED

(Formerly Known as Siyaram Recycling Industries Private Limited)

Ramgopal Ochhavlal Maheshwar

Chairman & Whole Time Director

DIN: 00553232

Date: 29th August, 2025

Place: Jamnagar