Sudal Industries Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

The global economy demonstrated a degree of unexpected resilience during FY 2025-26 (April 2025 - March 2026), with world output estimated at 2.8% growth for 2025 by the United Nations, driven by solid consumer spending, declining inflation and a gradual easing of monetary conditions across several major economies. Advanced economies and emerging markets navigated a challenging environment shaped by heightened US tariff barriers with the average effective US tariff rate reaching approximately 17% by mid-2025, the highest since the 1930s alongside persistent geopolitical tensions and subdued global investment. Global trade performed better than initially anticipated in 2025, partly owing to early front-loading of shipments ahead of tariff increases and robust services exports. Regional growth patterns remained sharply divergent. The United States continued to outperform other advanced economies, supported by fiscal stimulus, accommodative financial conditions and the technology investment boom centered on artificial intelligence, with GDP growth estimated at 2.8% in 2024 before moderating to around 2.1% in 2025. The Euro Area remained constrained with growth of approximately 1.2% in 2025 weighed down by high energy costs, the impact of US tariffs on European exports (particularly autos and steel) and weak competitiveness against Chinese producers. Chinas economy sustained around 4.5% growth in 2025, though its export surplus continued to provoke trade actions across multiple markets. Japans growth eased to approximately 0.4% in 2025 owing to US tariff headwinds and the unwinding of above-trend growth recorded in the prior year. Global headline inflation, meanwhile, declined from 4.0% in 2024 to an estimated 3.4% in 2025, approaching, though not yet fully reaching, central bank targets in most major economies.

Looking beyond March 2026, the OECD projects global GDP growth to remain broadly stable at 2.9% in calendar year 2026, before edging up to 3.0% in 2027, sustained by robust technology related investment and continued monetary easing. However, this trajectory remains significantly below the pre-pandemic average of 3.2%, reflecting what the United Nations characterizes as a risk of the world economy settling into a persistently slower growth path. The partial easing of US-China trade tensions in 2025 provided some relief, but the broader impact of elevated tariff barriers is expected to become more pronounced through 2026 as front-loading effects dissipate and supply chain adjustments work through the system. Downside risks dominate the outlook. The IMFs April 2026 World Economic Outlook cited the outbreak of conflict in the Middle East as a significant new headwind, projecting global growth of 3.1 % in 2026 under the assumption that the conflict remains limited in scope; a broader escalation could meaningfully weaken output and destabilise energy and financial markets. Persistently elevated public debt, the potential reassessment of AI-driven productivity expectations and renewed trade tensions between major powers represent additional downside scenarios. Upside prospects hinge on faster-than-expected AI productivity gains, sustained US economic strength and a durable easing of geopolitical risks. Global headline inflation is projected to ease further to 3.1% in 2026 by the UN, supporting a gradual continuation of monetary easing in most advanced and emerging economies.

INDIAN ECONOMIC OVERVIEW

India sustained its position as the worlds fastest-growing major economy throughout FY 2025-26 (April 2025-March 2026), with real GDP growth estimated at 7.6%, up from 6.5% in FY 2024-25. The acceleration was broad-based: private final consumption expenditure the largest demand-side component expanded at 7%, reaching a 61.5% share of GDP, its highest since FY 2022-23. Gross fixed capital formation remained buoyant, with investment rates holding above 30% of GDP, driven by government capital expenditure and a pick-up in private corporate investment. On the supply side, manufacturing GVA surged to 7.72% in Q1 FY26 and 9.13% in Q2 FY26, signalling a structural recovery, whilst services sustained their dominant contribution, accounting for 56.4% of GVA, the highest share on record. Quarterly growth exhibited a distinct pattern: Q1 FY26 (April-June 2025) registered 6.7% under the revised series, before a strong surge to 8.4% in Q2 (July-September 2025), reflecting robust investment and consumption momentum as the RBIs front-loaded rate cuts and GST rationalisation measures supported economic activity. Q3 FY26 (October- December 2025) moderated to 7.8%, under the first quarterly data released under the new 2022-23 base year series sustaining Indias growth premium over other major economies. Nominal GDP growth for the full year is estimated at 8.6% under the revised series, with nominal GDP projected at 357.14 lakh 60 Annual Report 2025-26 crore. CPI headline inflation for FY 2025-26 is projected at approximately 2.0 2.1%, the lowest in the history of the CPI series aided by a sharp decline in food prices, GST rate rationalisation and softening fuel costs. The RBIs Monetary Policy Committee implemented an unusually aggressive easing cycle in FY 2025-26, cutting the repo rate by a cumulative 125 basis points from 6.5% in February 2025 to 5.25% by December 2025, making borrowing costs the lowest in three years. This front-loaded easing was enabled by the sustained decline in inflation well below the 4% target and supported a strong revival in credit growth and household consumption. The Production Linked Incentive (PLI) schemes across 14 sectors attracted over 2.0 lakh crore of actual investment by September 2025, generating incremental output exceeding 18.7 lakh crore and over 12.6 lakh jobs, reflecting the broadening of Indias manufacturing base.

Outlook

Indias growth trajectory for FY 2026-27 (April 2026-March 2027) is projected to moderate to approximately 6.8-7.0%, reflecting a return towards medium-term steady state growth even as India retains its position as the worlds fastest- growing major economy. The IMF (April 2026) also revised its India growth forecast upward thereby acknowledging strong domestic demand momentum even as it lowered global projections in light of escalating Middle East tensions and their impact on energy prices. Inflation for FY 2026-27 is expected to drift upward from FY26s historic lows, the RBI projects CPI at 4.6% for FY27, with Q3 and Q4 elevated at 5.2% and 4.7% respectively driven by unfavourable base effects, geopolitical oil price pressures and a potential El Nino risk to agricultural output. Key structural drivers sustaining Indias medium term growth outlook include robust manufacturing expansion under PLI schemes, digitalisation, rapid services export growth, and continued government capital spending. Today India, the worlds 7th-largest services exporter having attracted over 80% of total FDI inflows in FY23-FY25 through the services sector is well positioned to leverage global demand for high-value digital and technology services, reinforcing its long-term growth trajectory. INDUSTRY STRUCTURE AND DEVELOPMENTS GLOBAL ALUMINIUM INDUSTRY OVERVIEW The global aluminium industry in FY 2025-26 offered a clear reminder that materials markets often tell the real story of industrial confidence before headline economics do. Aluminium, prized for its lightweight strength, corrosion resistance and recyclability, is no longer just a metal of convenience; it is increasingly a metal of transition, sitting at the centre of mobility, power infrastructure, packaging and modern construction . In that sense, the year was not merely about higher output. It was about aluminium becoming even more deeply embedded in how the world is choosing to build, electrify and modernize

Global primary aluminium production reached a record 73.8 million tonnes in 2025, up 1.1% from 73.0 million tonnes in 2024 . China remained dominant, contributing roughly 60% of global output at 44.2-45.0 million tonnes, effectively approaching its state-imposed 45 million tonne capacity cap . Outside China, production growth came from SouthEast Asia, India, Malaysia and Brazil, while Europe continued to struggle under elevated energy costs . This contrast is important: it shows that the industry is not short of demand, but it is becoming increasingly selective about where production can remain economically viable. That demand backdrop remained notably strong. Total aluminium consumption, including primary and recycled metal, rose to about 104 million tonnes in 2025, up 3.2% year-on-year . Transportation accounted for 28% of demand, building and construction 22%, packaging 16% and electrical and electronics 15%, with the last category rising a striking 12.2% as solar installations, grid upgrades and AI data-centre construction gathered pace . When a metal begins to benefit simultaneously from electric vehicles, renewable energy and digital infrastructure, it moves from being cyclical to being strategically relevant. This tightening structural relevance is now showing up in market balances and pricing. The global market shifted into a supply deficit of around 400,000 to 600,000 tonnes in 2025 . At the same time, the US sharply increased aluminium import tariffs to 25% in February 2025 and 50% in June 2025, pushing the US Midwest Premium to a record 96 cents per pound, while LME aluminium prices rose more than 20% over the 12 months to Q4 2025 . In simple terms, aluminium became more expensive not only because it was needed, but because it was harder to source competitively .

Looking ahead, the industry appears set to remain structurally firm. Global aluminium consumption is forecast to rise to 106.8 million tonnes in 2026, with supply-demand tightness likely to persist as Chinas capacity cap, power constraints outside China and energy transition demand continue to shape the market. Over the medium term, the global aluminium market is projected to grow from USD 209.6 billion in 2025 to USD 307.4 billion by 2033, reflecting a 4.9% CAGR.

INDIA ALUMINIUM EXTRUSION INDUSTRY OVERVIEW

Indias aluminium extrusion industry is becoming increasingly central to the countrys industrial and infrastructure story. It may not always be the most visible segment in the metals value chain, but it plays an essential role in shaping how India builds, moves, powers and modernises itself. From housing and commercial facades to electric mobility, solar structures and power systems, extruded aluminium profiles are now present across many of the applications that define the next phase of economic growth. What makes the segment particularly interesting is that it combines scale, versatility and growing relevance at a time when Indias development priorities are becoming more materials intensive and performance-driven. In FY 2025-26, domestic aluminium extrusion consumption reached approximately 11.2 lakh tonnes, or 1.12 million tonnes, reflecting year-on-year growth of about 8.4%. This was set against installed domestic extrusion capacity of approximately 3.5 million tonnes per annum, a gap that points not simply to underutilised capacity, but to the fragmented nature of the industry and the significant room still available for deeper downstream conversion and stronger organised-scale participation. Building and construction remained the largest end-use segment, accounting for 48.5% of domestic extrusion consumption. This reflects the continuing demand created by housing development, urban infrastructure, commercial real estate, solar installations and a broader shift toward modern building systems that increasingly rely on aluminium for durability, lighter weight and design flexibility. Transportation is emerging as one of the strongest growth engines for the industry. The segment expanded by approximately 11.4% year-on-year in FY 2025-26, supported by the rapid scaling of electric mobility, especially in two-wheelers and three- wheelers, where lightweighting, battery packaging and structural efficiency are becoming more important with every new platform. This shift is beginning to change the nature of demand itself. Aluminium extrusion is no longer limited to conventional architectural and industrial applications; it is increasingly moving into high-performance mobility use cases, where precision, strength-to-weight ratio and finish quality matter far more than they did in the past. The electrical and electronics segment contributed approximately 12.8% of demand, or around 1.43 lakh tonnes, driven by transmission infrastructure, grid modernisation and domestic electronics manufacturing growth. Machinery, equipment, consumer durables and other applications accounted for the remaining 19.5%, reflecting a market that is becoming broader and more diversified in its end-use profile. The industry is also showing signs of qualitative evolution. Growing demand for anodised, powder-coated and other value-added finishes suggests that buyers are increasingly focusing not only on availability and cost, but also on product quality, application suitability and longterm performance. Regionally, West and Central India continue to hold a strong position in extrusion manufacturing, while emerging clusters in southern India are adding fresh momentum and expanding the End-Use Segment Building & Construction Transportation (incl. EVs) Electrical & Electronics Machinery & Equipment Consumer Durables Other Total industrys geographic base. Indias share of the global aluminium extrusion market remains relatively modest at approximately 2.3%, but that number says more about future headroom than market limitation, especially given the countrys low per-capita extrusion consumption and expanding domestic demand base. FY25-26 Share (%) 48.5% 19.2% 12.8% Volume (lakh tonnes) ~5.43 YoY Growth (%

The outlook for Indias aluminium extrusion industry remains highly promising, supported by several long-duration demand drivers that are strengthening at the same time. Rather than depending on one standout sector, the industry is benefiting from a broader convergence of infrastructure expansion, clean energy deployment, transport modernisation and a steady move toward more advanced manufacturing. ~ 1.02 ~0.66 ~0.50 ~11.20 +11.4% +9.7% +6.2% +5.4% +7.3% +8.4% and raw material cost asymmetry continue to affect domestic manufacturers, but policy-led quality regulation and certification measures are expected to gradually improve market discipline and support a more competitive domestic ecosystem. The domestic market, valued at approximately USD 8.84 billion in FY 2025-26, is projected to grow to USD 19.45 billion by 2035, implying a CAGR of about 8.2%. Some projections are even more optimistic in the medium term, with growth estimates of around 10.3% between 2025 and 2030, indicating that the sector could move into a faster growth phase as multiple end-use applications scale up together. A large part of this momentum is expected to come from infrastructure and energy. Indias 500 GW renewable energy target, expanding grid investments and wider infrastructure execution under national development programmes are all supportive for extrusion demand, particularly in profiles used in solar systems, power distribution, structural applications and industrial components. Mobility will remain another important growth lever. As EV adoption gathers speed and manufacturers continue to pursue lighter, more efficient vehicle architectures, aluminium extrusion is likely to gain a larger role in battery systems, structural reinforcements, body components and thermal management applications. The product mix is also expected to evolve in favour of more specialised and higher-value segments. Pipes, tubes and precision profiles are likely to see faster demand growth, while the 6000 series alloy is expected to remain the dominant material platform across construction, solar and mobility applications because of its versatility and application fit. At the same time, the next phase of growth will also depend on how effectively the industry addresses structural challenges. Import pressure, uneven quality standards 64 Annual Report 2025-26 Geographic diversification is another encouraging trend. New and emerging manufacturing hubs in southern India are beginning to complement the traditional concentration in western regions, which could improve supply flexibility, regional responsiveness and long-term industry resilience. The broader opportunity remains significant because India is still operating from a relatively low base in extrusion consumption. As per-capita usage gradually rises and the economy continues to add new infrastructure, mobility and industrial demand, the extrusion industry is likely to move into a more sustained and broad-based expansion cycle than it has seen historically. Overall, the sector appears to be shifting from being a largely conversion- driven business to becoming a more strategic downstream industry linked to how India builds, electrifies and manufactures. That makes the story more interesting not only in terms of growth, but also in terms of quality of growth, application depth and long-term relevance.

OPPORTUNITIES AND THREATS

Opportunities The aluminium extrusion industry is increasingly aligning itself with some of the most transformative shifts taking place across the global and Indian economies. Growing emphasis on lightweight engineering, energy- efficient infrastructure and sustainable material usage is steadily expanding the relevance of aluminium across diverse sectors. This evolving demand environment is creating opportunities for extrusion manufacturers to move beyond conventional applications and participate in higher value, technology-oriented markets. Indias ongoing infrastructure transformation continues to provide a favourable operating

Large-scale investments in urban development, transportation networks, smart cities, industrial corridors and power infrastructure are expected to sustain long term demand for aluminium-based solutions. The increasing preference for modern construction systems, improved aesthetics and durable materials is further strengthening the acceptance of aluminium extrusions across residential, commercial and industrial applications. The transition towards cleaner energy and electrified mobility is also opening a new avenue of growth for the sector. Rising deployment of renewable energy projects, charging infrastructure and next-generation mobility platforms is creating demand for precision- engineered extrusion products with enhanced technical specifications. This shift is gradually encouraging the industry to move towards more specialised, application-focused offerings rather than remaining concentrated in standard commodity profiles. Another important opportunity lies in the increasing preference for value-added and customised solutions. Customers today are placing greater emphasis on finish quality, product consistency, design flexibility and performance efficiency. This evolving customer expectation is creating room for organised and quality conscious manufacturers to differentiate themselves through product innovation, process capabilities and stronger customer engagement. The industry also stands to benefit from the gradual formalisation of the domestic market. As quality standards, certification requirements and compliance expectations become more stringent, organised players with established manufacturing systems and technical capabilities are likely to strengthen their market position over time. Additionally, rising awareness regarding recyclable and environmentally sustainable materials is expected to improve the long-term acceptance of aluminium across newer applications.

Threats

Despite the favourable long-term outlook, the aluminium extrusion industry continues to face several external and structural challenges. One of the key risks remains volatility in aluminium prices and energy costs. Since aluminium production and downstream processing are energy-intensive, fluctuations in power tariffs, fuel prices and global metal prices can significantly impact operating costs, margins and competitiveness, particularly in a highly price- sensitive market environment. Global trade uncertainties and geopolitical tensions also continue to pose risks to the industry. Elevated tariff barriers, changing trade policies and supply chain disruptions across major economies may create volatility in raw material availability, export competitiveness and international pricing dynamics. Increasing protectionist measures, including tariff increases imposed by certain countries, may also affect global aluminium trade flows and market stability. The domestic industry additionally faces competitive pressure from low-cost imports, particularly from countries with large scale production capacities and cost advantages. Imported semi fabricated and finished aluminium products may create pricing pressure for domestic manufacturers, especially in commoditised product categories. At the same time, the fragmented nature of the Indian extrusion industry continues to intensify competitive intensity, affecting pricing discipline and capacity utilisation levels. The industry also remains exposed to broader macroeconomic risks. Any slowdown in infrastructure spending, construction activity, automotive demand or industrial investment could adversely affect extrusion consumption across key end-user sectors. In addition, global economic moderation, inflationary pressures, higher interest rates or prolonged geopolitical conflicts may impact overall business sentiment and capital expenditure cycles. Another emerging challenge relates to sustainability and environmental compliance expectations. Increasing focus on low carbon manufacturing, traceability and stricter environmental regulations across global markets may require continuous investments in cleaner technologies, process efficiency and sustainable manufacturing practices. Companies that are unable to adapt to evolving regulatory and customer expectations may face competitive disadvantages over the long term. Threats The aluminium extrusion industry continues to operate in a highly competitive and cost-sensitive environment, where fluctuations in input costs can significantly influence profitability and operating performance. Variability in raw material prices, energy expenses and logistics costs may continue to exert pressure on margins, particularly during periods of weak pricing discipline or demand volatility. The industry also remains vulnerable to uncertainties arising from global geopolitical developments and international trade dynamics. Disruptions in global supply chains, changes in tariff structures and evolving trade policies may affect raw material sourcing, pricing trends and export competitiveness. Such external uncertainties could create periodic instability across the broader metals ecosystem. Intense competition within the domestic market remains another challenge for the sector. The presence of numerous unorganised and regional players often results in aggressive pricing practices, uneven quality standards and fragmented market conditions. This may limit the ability of organised manufacturers to fully pass on cost escalations or maintain stable margins during challenging market cycles. The industry is also exposed to cyclical risks associated with slowdown in infrastructure activity, construction demand, industrial investment or consumer spending. Since extrusion demand is closely linked to broader economic and industrial activity, any moderation in capital expenditure or project execution could Annual Report 2025-26 65 66 Annual Report 2025-26 impact order flows across key end-use sectors. In addition, increasing focus on sustainability, environmental responsibility and regulatory compliance is likely to raise the need for continuous investments in cleaner technologies, operational efficiency and process upgrades. Companies that are unable to adapt to evolving customer expectations, environmental norms and quality requirements may face competitive disadvantages in an increasingly performance-driven marketplace. BUSINESS AND FINANCIAL OVERVIEW Century Extrusions Limited (CEL), incorporated in 1988 and headquartered in Kolkata, West Bengal, is one of Indias foremost pure-play aluminium extrusion manufacturers, with its integrated production facility strategically located at Kharagpur in the eastern part of India, in close proximity to the countrys primary aluminium production centres. Founded by the late Shri M. P. Jhunjhunwala, a first-generation entrepreneur, the Company has over three and a half decades built a distinguished legacy of precision engineering, product diversity and customer reliability across a broad spectrum of end-use industries including architecture, power transmission and distribution, transportation, defence, consumer durables and industrial engineering. The company operates three extrusion press lines with an aggregate installed extrusion capacity of 15,000 MT per annum, complemented by in-house die manufacturing, billet melting and casting facilities. The Companys equity shares are listed and traded on both the Bombay Stock Exchange (BSE: 500083) and the National Stock Exchange (NSE: CENTEXT), reflecting its commitment to transparency, disclosure and corporate governance. The financial statements of Century Extrusions Limited for FY 2025 26 have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed by the Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, 2015 (as amended) and all other applicable statutory provision