Sunlite Recycling Industries Ltd Management Discussions

a) Copper Industry

Copper continued to play a critical role in infrastructure, electrification, renewable energy and electric mobility during FY 2025-26. Domestic refined copper production increased significantly, supported by improved smelting capacity utilisation and strong demand from the power, construction and energy sectors.

Despite higher domestic refining capacity, India continuesto depend on imported copper concentrate due to limited domestic availability. During the year, efforts towards upstream integration and longterm raw material security also gained momentum, supporting the development of a more integrated domestic copper value chain.

The Ministry of Mines also released the Copper Vision Document, focusing on increasing domestic production, recycling and reducing import dependence.

b) Aluminium Industry

India continues to be the worlds second-largest producer of aluminium, with domestic production showing steady growth during FY 2025-26, supported by improved capacity utilisation. Aluminium demand is expected to increase significantly, driven by infrastructure development, power transmission, packaging, automotive lightweighting, electrical applications and industrial growth. Industry estimates indicate that domestic total demand may reach around 10 million tonnes by 2030.

The global aluminium market remained broadly in surplus during FY 2025-26, with LME prices remaining relatively range-bound due to continued global capacity additions, particularly in China, and moderate demand growth. Domestically, the implementation of the Aluminium and Aluminium Alloy Products (Quality Control) Order, 2025 is expected to strengthen quality standards and reduce sub-standard imports, while requiring manufacturers to enhance testing and compliance systems.

Going forward, the Indian aluminium industry is expected to benefit from infrastructure expansion, electrification, renewable energy, power transmission and automotive lightweighting. Increasing trade liberalisation and export opportunities are likely to further support the sector. The industry is expected to focus on capacity expansion, operational efficiency, value-added products, recycling and compliance with evolving regulatory requirements.

I. Opportunities

a) Rising demand for copper from renewable energy, electric vehicle and grid infrastructure programmes, supported by Government thrust on electrification and clean energy capacity addition.

b) Continued public infrastructure investment under national infrastructure programmes, driving demand for both copper and aluminium in construction, power transmission and transportation applications.

c) Growing export potential for value-added aluminium and copper products on account of preferential trade arrangements and Indias competitive manufacturing base

d) Increasing thrust on recycling and circular economy models, given the significant energy savings associated with secondary aluminium and copper production as compared to primary production.

e) Implementation of the Aluminium and Aluminium Alloy Products (Quality Control) Order, 2025 is expected to strengthen product quality standards and improve competitive conditions for compliant domestic manufacturers

II. Threats

a) Global oversupply in the aluminium market, driven substantially by continuing Chinese capacity expansion, exerting downward pressure on international prices and margins.

b) Rising compliance costs associated with quality control, environmental and emission norms, and evolving ESG-linked disclosure requirements.

c) Volatility in power and fuel costs, given the energy- intensive nature of aluminium smelting and copper refining operations.

d) Geopolitical and trade-policy uncertainty, including tariff actions by major economies, which may affect global trade flows and input sourcing.

The revenue breakdown below represents the Standalone operations of the Company, which primarily comprise the Copper segment.

The Aluminium segment business is conducted through the Companys subsidiary, and its performance is captured within the Consolidated Financial Statements.

The Companys product mix continued to diversity during FY 2025-26, with the introduction of Value- Added Products including ATC & Copper Busbars, while Copper Rods remained the principal contributor to revenue

Having regard to the sustained policy focus on infrastructure creation, electrification and renewable energy deployment in India, the medium to long-term demand outlook for both copper and aluminium remains constructive. In the copper segment, demand growth is expected to be led by the electric vehicle, renewable energy and grid infrastructure sectors, while the aluminium segment is expected to benefit from continued infrastructure, transportation and packaging demand, notwithstanding near-term global oversupply conditions. The Company will continue to focus on operational efficiency, capacity utilisation, value-added product mix and cost optimisation to sustain profitability across both segments through the business cycle.

a) Commodity price risk: Both copper and aluminium prices are determined by international benchmarks (LME/MCX) and are subject to significant volatility on account of global demand-supply dynamics, inventory positions and macro-economic developments.

b) Foreign exchange risk: A substantial proportion of raw material requirements being import-dependent, movements in the Rupee-US Dollar exchange rate directly affect input costs and margins.

c) Regulatory and compliance risk: Evolving quality control orders, environmental clearances, emission norms and other statutory requirements may increase compliance costs and capital expenditure requirements.

d) Energy cost risk: Aluminium smelting, in particular, is a power-intensive process, and volatility in power and fuel costs can materially affect segment profitability.

e) Competition risk: Continued capacity expansion by global, particularly Chinese, producers may result in oversupply conditions and pricing pressure in the aluminium segment.

f) Concentration and supply-chain risk: Dependence on a limited number of sources for copper concentrate and bauxite/alumina imports exposes operations to supply-chain disruption risk.

The Company has instituted a risk management framework, overseen by the Board of Directors, to identify, assess, monitor and mitigate the above and other material risks on an ongoing basis, in accordance with the requirements of the Companies Act, 2013 and Regulation 21 of the SEBI LODR Regulations, 2015, as applicable.

The Company has in place an internal control system commensurate with the size, scale and nature of its operations across the copper and aluminium segments, designed to provide reasonable assurance with regard to the safeguarding of assets, prevention and detection of fraud and error, accuracy and completeness of accounting records, and timely preparation of reliable financial information. The internal control framework is supplemented by an internal audit function that periodically reviews the adequacy and effectiveness of controls across key operational, financial and compliance processes, with significant observations placed before the Audit Committee of the Board. The Statutory Auditors have also reported on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting

During FY 2025-26, the Company recorded a significant improvement in its financial performance. On a standalone basis, revenue from operations increased to Rs.2,76,471.62 lakh from Rs.1,39,671.18 lakh in FY 2024-25, registering strong growth. Total revenue stood at Rs.2,76,492.39 lakh, while Profit Before Tax increased substantially to Rs.5,380.43 lakh as compared to Rs.1,919.62 lakh in the previous year.

Profit After Tax on a standalone basis increased to Rs.4,014.83 lakh from Rs.1,427.23 lakh in FY2024-25, reflecting improved operational performance and profitability. Basic and diluted EPS also increased to Rs.35.20from Rs.14.61 in the previous year.

On a consolidated basis, the Company reported revenue from operations of Rs.2,79,109.92 lakh and total revenue of Rs.2,79,146.56 lakh during FY 2025-26. Consolidated Profit Before Tax stood at Rs.5,485.58 lakh, while Profit After Tax was Rs.4,100.16 lakh, with basic and diluted EPS of Rs.35.95. Overall, the Company demonstrated strong growth in revenue, profitability and earnings during the year.

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 organizations. 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.

Ratios stated are based on Standalone Financial Statements.

Statements in this Management Discussion and Analysis Report describing the Companys objectives, outlook, estimates, expectations or projections may constitute "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied in such statements, on account of various factors including, but not limited to, changes in global and domestic economic conditions, fluctuations in copper and aluminium prices, foreign exchange rates, raw material availability and costs, changes in government policies and regulations, and other incidental factors. The Company undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise, except as required under applicable law.