Springform Technology Ltd Management Discussions

Overview

Financial Year 2026 represents the first year of consolidated operations for Springform Technology Limited following the acquisition of Inertia Aluminium Private Limited on 16 July 2025. As substantially all of the Groups operations reside in its wholly- owned subsidiary, this discussion is presented on a consolidated basis, which management considers the meaningful basis for assessing the Groups performance. As this is the first year of consolidation, prior- year comparative figures are not applicable and this discussion accordingly focuses on the composition and drivers of current- year performance rather than on year- on- year movement.

The year under review was foundational. It captures the Groups entry into aluminium recycling, the first period of commercial manufacturing at Inertia and the establishment of the operational, financial and capital base from which the Group intends to grow. The Group closed this first year profitable at both the operating and net levels, while simultaneously building its asset base and working capital.

Industry Structure and Developments

India is the worlds second- largest aluminium producer, yet domestic consumption remains structurally under- penetrated, at a per- capita level of approximately 3kg against a global average of around 11kg. Management regards this gap not as a weakness but as the defining feature of the opportunity — long demand runway as urbanisation, infrastructure and mobility mature.

Indias total aluminium market stood at approximately USD 12.07 billion (5,310 thousand tonnes) in FY 2025 and is projected to reach USD 20.49 billion (8,274 thousand tonnes) by FY2030, a forward value CAGR of about 10.8%. Within this, secondary (recycled) aluminium is the faster- growing segment and the one in which the Company operates: it reached approximately USD 4.92 billion (2,164 thousand tonnes) in FY 2025 and is projected to reach USD 9.20 billion (3,715 thousand tonnes) by FY2030 — a value CAGR of around 13.2%. The secondary segments share of total domestic aluminium demand is expected to rise from 40.8% in FY 2025 to 44.9% by FY2030, a structural shift driven by cost, energy and carbon economics.

Demand is anchored in the automotive sector and is broadening across construction and packaging. Within automotive, several reinforcing trends are raising aluminium intensity per vehicle — the rising penetration of electric vehicles (which carry materially higher aluminium content than internal- combustion vehicles), the premiumisation of the passenger- vehicle mix and regulatory lightweighting requirements — even as vehicle production itself grows. These trends are favourable to secondary aluminium in particular.

A strengthening policy framework is creating regulated demand for recycled metal. Under the Extended Producer Responsibility (EPR) framework for non- ferrous metals, effective 1 April 2026, producers face escalating recycling obligations beginning at 10% in FY 2026- 27 and rising to 75% by FY2032- 33. In parallel, a minimum recycled- content requirement for new products takes effect from FY2028- 29, beginning at 5% and rising, for aluminium, to 10% by FY2031- 32. Together with the formalisation of the scrap value chain through GST reforms and the vehicle scrappage framework, these measures establish an escalating, regulated demand floor for recycled aluminium and progressively tilt competitiveness toward organised, compliant recyclers — the segment to which the Company belongs. These drivers are discussed more fully in the Industry Overview section of this Report

Balancing these tailwinds is a genuine near- term constraint: the availability of domestic end- of- life scrap remains limited, a consequence of Indias historically low consumption base and the long service life of aluminium- bearing products. The industry consequently relies significantly on imported scrap feedstock at present. Management views this as a timing feature rather than a structural flaw — the same low consumption base that constrains scrap availability today underpins the demand growth expected to generate that scrap over time — while recognising scrap sourcing as a key operating variable, addressed in the Risks and Concerns section.

BUSINESSANDOPERATIONALPERFORMANCE

BUSINESS AND OPERATIONAL PERFORMANCEDuring FY 2026, the Company produced 6,582 tonnes of aluminium, operating a single cast- coil line. Against installed capacity of 28,800 TPA, this represents utilisation of approximately 22.85% on an installed- capacity basis and 45.71% of the single operating line. The Companys revenue derives from two product streams, which contributed in an approximate 85:15 ratio in FY 2026 — aluminium cast coils (manufactured in- house, ~85%) and majorly CRM- based sheets (contract- manufactured from own coils, ~15%). Operationally, the year was marked by the establishment of Tier- 1 vendor relationships with leading industry participants including Jindal Aluminium, 100% first- trial approval across five commercially- proven alloy specifications and the development of a supply presence across 7- 9 states. Raw material is sourced approximately 70% domestically and 30% through imports.

FINANCIALPERFORMANCE REVIEW

Statement of Profit and Loss

PARTICULARS (Rs. LAKHS)	FY2026	% OF OP. REVENUE
Revenue from Operations	14,018.54	100.0%
Other Income	48.08	0.3%
Total Income	14,066.62	100.3%
Cost of Materials Consumed (net of inventory changes)	12,491.94	89.1%
Employee Benefits Expense	210.39	1.5%
Other Expenses	845.09	6.0%
Finance Costs	194.66	1.4%
Depreciation	97.07	0.7%
Profit Before Tax	227.47	1.6%
Tax Expense	103.36	0.7%
Net Profit	124.10	0.9%

The Groups financial structure reflects the fundamental economics of a secondary aluminium business. Raw material is the dominant cost, at approximately 89% of revenue — a characteristic of a conversion- led model in which the Companys economic contribution lies in the spread between the cost of scrap procured and the realisation on specified metal sold, net of conversion cost. Consequently, the business is best understood not as a high- percentage- margin operation but as a conversion- spread business operating at scale, where absolute contribution rather than percentage margin is the relevant measure.

The Company recorded EBITDA of 519.20 Lakhs (3.70%) of revenue) and net profit of 124.10 Lakhs (0.89%). It is important to note that these margins were achieved in the first year of operations conducted at approximately one- fifth of installed capacity. Because a significant portion of conversion costs — employee costs and elements of other expenses — is relatively fixed, utilisation is the primary lever for margin expansion: incremental volume through the existing asset base is expected to be absorbed at improving unit economics, a dynamic discussed further under Outlook.

FINANCIAL POSITION REVIEW

PARTICULARS (Rs. LAKHS)	AS AT 31 MARCH 2026
Property, Plant & Equipment	5,113.98
Goodwill & Intangible Assets	364.47
Inventories	2,024.80
Trade Receivables	570.56
Cash & Cash Equivalents	174.29
Other Assets	818.35
Total Assets	9,066.45
Net Worth	1,126.97
Total Borrowings	6,785.86
Trade Payables	259.51
Other Liabilities & Provisions	894.10

The balance sheet is that of a capital- intensive manufacturing business in its build- out phase. Property, plant and equipment of 5,113.98 Lakhs constitutes the Groups largest asset and reflects the installed two- line facility. Goodwill and intangibles of 364.47 Lakhs arise from the acquisition of Inertia. Inventories of 2,024.80 Lakhs are significant relative to the scale of operations, reflecting the working- capital intensity inherent in a recycling business, which must hold both scrap feedstock and finished goods. Notably, trade receivables of 570.56 Lakhs are modest relative to revenue, indicating a relatively short collection cycle.

CASH FLOW ANALYSIS

CASH FLOW SUMMARY (Rs. LAKHS)	FY2026
Net Cash from Operating Activities	(230.42)
Net Cash from Investing Activities	(638.36)
Net Cash from Financing Activities	873.75
Cash Acquired on Acquisition	163.00
Net Increase in Cash	4.96

The years cash working- capital changes of 520.76 Lakhs, consistent with its EBITDA; however, net operating cash flow was negative at 230.42) Lakhs after a significant investment in working capital — principally the build- up of inventory and receivables required to support a first year of commercial operation. This is a normal and expected pattern for a manufacturing business establishing its operating cycle, and should not be read as an operating weakness.

Investing outflows of 638.36 Lakhs represent capital expenditure on the Companys asset base. These operating and investing requirements were funded through financing inflows of 873.75 Lakhs, stemming largely from equity raise. In summary, the Company funded its first- year growth — both capital expenditure and working- capital build — through a combination of fresh equity and debt, closing the year with a modestly higher cash balance.

Opportunities and Threats

Opportunities : The Companys most significant opportunity is internal: the conversion of its substantial installed but unutilised capacity into operating scale and the capture of value currently paid to third- party processors through the planned in- house cold- rolling facility. Beyond these, the Company is positioned to benefit from the sectors structural tailwinds the regulatory direction toward recycled content, rising aluminium intensity in transportation and packaging, and Indias growth in aluminium consumption.

Threats : The Company operates in a competitive environment that includes both organised producers and unorganised- sector participants, the latter sometimes competing on cost rather than quality. The business is exposed to aluminium price volatility, to the availability and cost of scrap feedstock and to the general cyclicality of the industrial end- markets it serves. These are discussed, with the Companys mitigating approach, in the following section.

Risks and Concerns

The Companys principal risks and its approach to managing them, are as follows:

Raw material price volatility Aluminium scrap prices move with global aluminium markets and raw material constitutes close to 90% of revenue. The Company aims to manage this through a diversified supplier base, disciplined procurement and by passing through metal- price movements to the extent commercially achievable, given that both input and output prices are referenced to underlying metal markets.

Working- capital intensity The recycling model requires the Company to carry significant inventory of both scrap and finished goods, resulting in a working- capital- intensive operating cycle. The Companys strategy is to manage this through inventory planning, shorter receivables cycle and appropriate working- capital financing. As the Company scales, disciplined working- capital management will remain a management priority.

Customer concentration: In its first year, a meaningful portion of the Companys revenue is derived from a limited number of customers, as is common for a business establishing itself. The Company is actively pursuing customer diversification across products, industries and regions to reduce this concentration over time, supported by the Tier- 1 approvals it has secured.

Competition from the unorganised sector : The Company competes in part against unorganised- sector participants who may operate at lower cost and lower compliance standards. The Companys response is to compete on quality, consistency and reliability - the attributes valued by the Tier- 1 and specification- driven customers it targets - rather than on price alone.

Technology and operational risk : The Company has a policy to mitigate technology- obsolescence and operational risk through regular upgradation of plant and machinery, its in- house testing infrastructure and regular investment in experienced technical team and their upskilling.

Internal control Systems and Adequacy:

The Company has a tight financial control system which is compliant enough for the operations being conducted currently.

Details of Significant Changes (There is an impact on sales compared to last year) in Key Financial Ratios along with detailed explanation, if any thereof, including the following (last year):

(a) Debtors turnover	1.73
(b) Inventory turnover	1.73
(c) Interest coverage ratio	1.31
(d) Current ratio	6.69
(e) Debt-equity ratio	0.58
(f) Operating profit margin	2.57
(g) Net profit margin	256.85
(h) Sector-specific equivalent ratio	N/A.

Outlook

The Company enters FY2027 with its operating base established and its principal growth levers identified and within its own control. In the near term, managements focus is on raising utilisation of the operating line toward optimal levels - the single most direct driver of improved unit economics - and on progressing the planned in- house cold- rolling capacity, which is intended to capture value currently accruing to third- party processors while generating captive demand for the Companys cast coils. Over the medium term, the activation of the second cast- coil line offers a further, already- installed avenue for growth.

Management approaches this outlook with measured confidence: the opportunities are substantial and largely internal, while remaining mindful of the leverage, working- capital and margin considerations discussed above.

[Image: Industrial manufacturing facility with blue machinery and large aluminium coil]

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may constitute forward- looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic conditions affecting demand and supply, price conditions in the markets in which the Company operates, changes in government regulations, tax laws, and other incidental factors. The Company undertakes no obligation to publicly amend, modify or revise any forward- looking statement on the basis of any subsequent developments, except as required by law.