Super Iron Foundry Ltd Management Discussions

Management Discussion and Analysis Report

This Management Discussion and Analysis ("MD&A") is presented in accordance with Regulation 34(2)(e) read with Schedule V (Part B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, and forms part of the Boards Report for the financial year ended March 31, 2026.

Statements in this section that describe the Companys objectives, projections, estimates, expectations, or plans may constitute "forward-looking statements" within the meaning of applicable securities laws. Actual results could differ materially from those expressed or implied due to risks and uncertainties, including but not limited to raw material price volatility, changes in government policy, economic conditions in India and export markets, and other factors discussed in this report. 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.

The Year in Perspective

FY 2025-26 was a year of significant change for the Company. The foundry remained at its base, but the business became broader. The UAE and Saudi Arabia businesses became part of the Group, while railway castings opened another area alongside the Companys established municipal, automotive, agricultural and other casting businesses.

The Company also took steps towards a more direct presence in the markets it serves. For many years, the business was built around making castings in India and selling them across the world. The next step is different. It involves being closer to the customer and taking on more of the work between the foundry and the final user.

The Company has put capital behind this expansion. The returns will depend on how well the new businesses develop and how effectively the existing assets are used. There is more to build, and more to prove.

Operating Environment

Macroeconomic Review The World Economy¹

The global economy entered FY 2025-26 with growth intact, but with fewer certainties around trade and inflation. The IMF expects global growth of 3.0% in 2026 and 3.4% in 2027, against an average of 3.5% in 2024-25. World trade growth is projected to slow from 5.0% in 2025 to 3.5% in 2026. Global headline inflation is also expected to rise from 4.1% in 2025 to 4.7% in 2026.

For a company that sells castings across international markets, these are notjust numbers in an economic report. Slower trade can affect order flows. Inflation can affect input and freight costs. Currency movements can alter the rupee value of both sales and purchases. The effect is rarely the same in every market.

The picture was not uniformly weak. The IMF points to technology investment, particularly around artificial intelligence, as an offset to some of the pressure on global activity. But trade remained more difficult to predict, with tariffs, geopolitical tensions and changes in production linkages affecting the movement of goods across borders.

India Had the Better Year²

India had a better year. Revised MoSPI estimates put real GDP growth at 7.8% in FY 2025-26, compared with 7.2% in FY 2024-25. Manufacturing sector grew 10.4%, construction 8.7%, and gross fixed capital formation 10.8%. These numbers are closer to Super Irons business than GDP alone, because its products ultimately find their way into infrastructure, construction, transport, agriculture and industrial applications.

Domestic demand was therefore a useful counterweight to the uncertainty outside India. The Companys export markets remained important, but the domestic economy provided a stronger base from which to operate.

Two Different Markets, One Business

Super Iron entered FY 2025-26 with two rather different sets of conditions. India was growing at a healthy pace. International trade was still growing, but less predictably. That distinction matters to the Companys business model. Making a casting is only one part of the equation. Where it is sold, how it reaches the customer and what it costs to get there matter just as much.

The Companys move from a primarily manufacturing and export model towards a broader international presence therefore took place against a mixed backdrop. The opportunity was there.

So was the work required to capture it profitably.

Industry Structure and Developments

Indias foundry industry is closely linked to the countrys industrial and infrastructure development. Castings find applications across roads and utilities, water infrastructure, automobiles, agricultural equipment, railways, industrial machinery and other manufacturing activities. The breadth of these applications gives the industry several sources of demand and allows foundries with the right capabilities to serve markets at different stages of their development.

The outlook for the industry remains supported by Indias infrastructure and manufacturing activity. Investment in roads, urban infrastructure, water and sanitation networks is creating demand for municipal castings and ductile iron products. Growth in vehicle production and agricultural mechanisation supports demand for automotive and agricultural castings, while railway investment is opening further opportunities for specialised cast components.

Infrastructure remains an important demand driver

Indias expanding physical infrastructure provides a broad base for the foundry industry. Roads, drainage systems, sewerage networks, water supply projects and other public utilities require a range of cast products as part of the underlying infrastructure.

This is particularly relevant to Super Iron. Municipal castings and ductile iron pipe fittings form an established part of its product portfolio and serve applications across these infrastructure networks.

The Companys experience in these products also gives it a base from which to address infrastructure demand in international markets.

Manufacturing is creating additional avenues

The foundry industrys opportunity extends well beyond infrastructure. Automotive and agricultural equipment manufacturers use cast components across a range of applications, while industrial and electrical equipment provide additional markets.

Super Irons presence across automotive, agricultural and electrical castings gives it exposure to this wider manufacturing base. The Companys move into railway castings adds another avenue, with RDSO approvals being pursued for new products and supplies to Indian Railways expected to commence in FY 2026-27, subject to the required approvals.

International markets offer room for expansion

Indian foundries have developed a sizeable presence in international markets, supported by the countrys manufacturing capabilities and established export relationships. Infrastructure development across emerging markets, particularly in regions where urbanisation and industrial investment remain active, provides opportunities for Indian manufacturers.

Super Iron has supplied infrastructure projects in more than 30 countries. The establishment of its UAE and Saudi Arabia subsidiaries takes the Company closer to customers in the Middle East and provides a more direct platform for developing these markets.

Technology is changing the foundry floor

Modern foundry operations are placing greater emphasis on automation, process control, product consistency and efficient use of resources. These capabilities can help manufacturers handle larger volumes while maintaining the quality and specifications required by customers.

Super Iron operates an automated manufacturing facility with high-pressure moulding, automatic pouring and robotic fettling and painting. This provides a manufacturing base from which the Company can serve a wider range of products and markets as volumes develop.

A broader market creates more choices

The Indian foundry industry is therefore entering FY 2025-26 with several sources of demand. Infrastructure remains important, manufacturing applications provide diversity, railway investment creates new opportunities, and international markets offer room for Indian foundries to expand.

Opportunities and Threats

Opportunities

Indias growth creates a useful base for Super Iron. Construction, manufacturing and infrastructure activity support several of its established markets, from municipal castings and pipe fittings to automotive and agricultural applications. The Companys opportunity is not dependent on one end market.

Railways offer a new avenue. The Company has applied for RDSO approval for new railway casting products. Subject to the required approvals, supply to Indian Railways is expected to begin in FY 2026-27. This would give the Company another product market alongside its established municipal casting business.

The export franchise gives the Company a starting point. Super Iron has supplied infrastructure projects in more than 30 countries and has built its business over many years around municipal castings. The opportunity now is to use that customer reach for a broader range of products and, where justified, a broader distribution presence.

The existing plant provides another source of opportunity. Its automated moulding, pouring, fettling and painting systems have increased the Companys installed manufacturing capability.

The economics will depend on utilisation. Higher volumes through the same asset base can improve the return on capital, provided pricing and product mix remain sound.

The overseas opportunity is becoming more direct.

The UAE and Saudi Arabia subsidiaries give the Group a presence closer to customers in the Middle East. The Company has also outlined plans for distribution facilities in the UAE, Qatar, the UK, USA and Australia over the next five years, alongside a second manufacturing facility in Saudi Arabia. These plans could bring the Company closer to end markets.

Threats and Challenges

The same expansion that creates opportunity also changes the Companys risk profile.

> Raw materials remain the largest immediate variable. Pig iron, steel scrap and other foundry inputs can move with commodity markets, while selling prices may not adjust at the same speed. The answer is not simply higher sales. Cost control and pricing discipline matter just as much.

> Exports bring risks that domestic sales do not. Freight, foreign exchange, payment cycles, tariffs and conditions in individual markets can affect the economics of an order. The IMFs July 2026 outlook also points to slower global trade and continuing geopolitical risks. These factors are particularly relevant to a Company building a larger international presence.

> Competition remains intense. Indias foundry industry has a large number of manufacturers, many of them MSMEs. Standard casting categories can therefore face price pressure, making product quality, delivery, manufacturing cost and customer relationships important to the economics of the business.

Environmental requirements are part of the cost of being in the business. Foundry operations involve emissions, effluents and industrial waste, and compliance requires investment and disciplined operating practices. These costs are recurring rather than one-time.

Segment-Wise/Product-Wise Performance

The Company operates in a single reportable segment manufacture and sale of iron and steel castings. Its products, however, serve a number of different markets. Municipal castings remain an established part of the business, alongside ductile iron pipe fittings, automotive and agricultural castings, railway castings, electrical castings, screw piles and cast-iron counterweights.

FY 2025-26 was a year in which that product base became broader. Railway castings added a new avenue, with the Company applying for RDSO approval for new products. Supply to Indian Railways is expected to commence in FY 2026-27, subject to the required approvals. The move gives the Company another market alongside its established municipal casting business.

The geographic mix also changed during the year. The UAE and Saudi Arabia businesses became part of the Group, giving the Company a more direct presence in the Middle East. Consolidated revenue from operations consequently reached Rs.25,594.84 Lakhs, compared with standalone revenue of Rs.18,539.39 Lakhs in FY 2025-26.The comparison with FY 2024- 25 needs to be read carefully because the overseas subsidiaries were not part of the comparable prior-year operating base.

Financial Performance

The financial statements have been prepared in accordance with the applicable Indian Accounting Standards (Ind AS) notified under the Companies Act, 2013, and audited by the Companys Statutory Auditors, M/s. Baid Agarwal Singhi & Co, Chartered Accountants. The following discussion should be read together with the audited standalone and consolidated financial statements and notes forming part thereof.

Performance, Results of Operations and State of the Companys Affairs

				(Rs. In Lakhs)
Particulars	Consolidated		Standalone
	FY 2025-26	FY 2024-25	FY 2025-26	FY 2024-25
Revenue from Operations	25,594.84	15,869.68	18,539.39	15,869.68
Operational Profit (Earnings from operations before depreciation, finance cost, other income and exceptional items)	3,404.82	2,030.35	2,240.79	2,030.35
PBT - Operational	1,896.23	724.70	736.10	724.70
Profit After Tax (Operational)	1,666.36	375.21	506.67	375.21
Earning per Share (Rs.)	7.12	4.60	2.17	6.26
Book Value per Share (Rs.)	81.77	74.25	76.40	74.25

*Note: Operational numbers for FY 2024-25 exclude the one-time Rs.700 Lakhs gain on sale of plant and machinery. Consolidated FY 2024-25 figures do not include subsidiaries as FY 2025-26 was their first year of operations.

Overseas businesses changed the shape of the Group

The UAE subsidiary, SIF International FZE, recorded turnover of Rs.7,329.15 Lakhs and profit after tax of Rs.1,157.34 Lakhs for FY 2025- 26. SIF Saudi Arabia Company Limited recorded turnover of Rs.217.94 Lakhs and profit after tax of Rs.2.35 Lakhs. The contribution was therefore not uniform.

The UAE business accounted for most of the overseas turnover and profit, while the Saudi business remained at an early stage.

Key Financial Ratios

Pursuant to Regulation 34(2)(e) read with Schedule V Part B(i) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the key financial ratios of the Company for the financial year ended March 31, 2026, along with detailed narrative explanations for significant changes, i.e., variances of 25% or more compared with the immediately preceding financial year, are presented below:

Ratios (On a Standalone basis)	FY 2025-26	FY 2024-25	Variations	Reason for Variance of 25% or more
Current ratio (in times)	1.67	1.53	9.15	-
Debt-equity ratio (in times)	0.68	0.56	21.43	-
Debt service coverage ratio (in times)	3.27	0.87	275.86	Due to significant decrease in Debt service than decrease in earnings available for debt Service
Return on equity ratio	0.03	0.09	(66.67)	Due to significant decrease in profit after tax due to reduction in profit from sale of assets
Inventory turnover ratio	1.95	2.35	(17.02)	-
(in times)
Trade receivables turnover ratio (in times)	4.01	2.69	49.07	Due to increase in Net Credit Sales and decrease in Average Trade Receivables
Trade payables turnover ratio (in times)	4.86	2.41	101.66	Due to increase in Net Credit Purchase and decrease in Average Trade Payables
Net Capital turnover ratio	2.57	3.34	(23.05)	-
(in times)
Net profit ratio (in %)	3.00	6.00	(50.00)	Due to significant increase in Net sales and decrease in Net Profit due decrease in profit from sale of assets
Return on capital employed (in %)	0.07	0.12	(41.67)	Due to increase in Capital Employed and decrease in Earnings before interest and taxes

Outlook

Super Iron enters FY 2026-27 with a broader business. The foundry remains the foundation, while the UAE and Saudi Arabia businesses give the Company a more direct presence in the markets it serves. The next phase is about becoming part of a larger portion of the value chain between the factory and the final customer.

For many years, the Company manufactured castings in India and supplied them across domestic and international markets. Its plans now involve taking on more of the work beyond the factory through overseas operations, distribution and a wider product offering. This creates new opportunities but also puts more capital and management attention behind the business.

The areas that will shape the next phase include:

Making the overseas businesses work

The UAE business has already added to Group revenue, while Saudi Arabia is at an earlier stage. Building customers and volumes in these markets will determine the contribution of these businesses.

Adding new products

Railway castings provide another market for the Companys manufacturing capabilities. Supply to Indian Railways is expected to commence in FY 2026-27, subject to the required approvals.

Using the manufacturing base better

The automated plant provides capacity for higher volumes.

Better utilisation can support growth without requiring the same level of investment in new manufacturing assets.

Moving closer to the final customer

Planned distribution facilities in the UAE, Qatar, UK, USA and Australia, along with a second manufacturing facility in Saudi Arabia, are intended to bring the Company closer to its markets and allow it to participate in more of the value created between production and final consumption.

The other side of growth is capital. Inventory and receivables increased during FY 2025-26, and cash generated from operations came under pressure. As the business becomes larger and more geographically spread, the ability to convert sales into cash and earn an adequate return on the capital employed will matter as much as revenue growth.

Risks and Concerns

Super Irons business is exposed to risks arising from demand, input costs, manufacturing, international markets and customer payments. The Company has a Risk Management Policy to identify and assess these risks and define appropriate mitigation measures.

01 Economic Risk

Demand for castings is linked to infrastructure, construction, manufacturing and industrial activity in India and overseas markets. The Companys presence across municipal, automotive, agricultural, railway and other applications, as well as across domestic and international markets, provides some diversification of demand.

02 Raw Material and Commodity Price Risk

Pig iron, scrap metal and other foundry inputs account for a substantial part of manufacturing costs, and their prices can change faster than selling prices. The Company monitors commodity prices and manages procurement and customer pricing with regard to prevailing market conditions.

03 Competition Risk

The Indian foundry industry has a large and fragmented supplier base, creating pressure on pricing, quality and customer retention. The Company addresses this through its product range, manufacturing capabilities, quality standards and established customer relationships.

04 Industrial and Technology Risk

Foundry operations depend on plant reliability, capacity utilisation and appropriate manufacturing technology. The Companys automated moulding, pouring, fettling and painting systems, together with regular investment in plant and equipment, are intended to support reliable production and product quality.

05 Foreign Exchange Risk

Export sales and the Companys overseas subsidiaries expose the business to movements in foreign currency rates. The Company monitors these exposures and uses appropriate hedging measures were considered necessary.

06 Payment Risk

Delayed customer payments can tie up working capital and affect cash generation. The Company monitors receivables and follows collection and credit-control processes based on customer and market conditions.

07 Environmental and Regulatory Risk

Foundry operations are subject to requirements relating to emissions, effluents, waste disposal and other environmental matters.

The Company maintains the required environmental controls and monitors compliance with applicable regulations.

08 Interest Rate Risk

Changes in interest rates can affect the cost of borrowings and, consequently, profitability and cash flows. The Company monitors its borrowing profile and interest costs while managing its financing requirements.

Human Resources

The Company regards its employees as its core resource and has continuously evolved policies to strengthen its employee value proposition. The Company was able to attract and retain talent in the market, contributing to its past growth. It continues to work on providing a strong working environment for its human resources, with a view to fostering leadership and autonomy, and places emphasis on continuous training and development, guided by the belief that "Great People create Great Organisation."

The Company has complied with the Maternity Benefit Act, 1961 during the year. The Company maintains a zero-tolerance policy towards sexual harassment in the workplace, in compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, with an Internal Complaints Committee in place. No complaint of sexual harassment was received during FY 2025-26.

Corporate Sustainability

Responsible manufacturing starts with using resources carefully, reducing waste and limiting the environmental impact of the Companys operations.

Environmental Sustainability

A foundry uses large quantities of material and energy. Super Iron Foundry, therefore pay attention to what goes into the process, what can be used again and what can be done with less. This means greater use of recycled materials, recycling of moulding sand and a gradual move towards renewable energy.

Circularity in materials:

The Company uses several thousand tonnes of recycled scrap iron in its production. More than 95% of our moulding sand is recycled through the Companys sand recycling plant and returned to the casting process.

Greener surroundings:

It has planted trees and developed green cover around factories and surrounding areas through its Go Green Initiative. It is a simple measure, but one worth pursuing wherever it operates.

Renewable energy: The Company has installed solar panels at its factory to generate electricity for office buildings. This is an early step in its use of renewable energy and in reducing the carbon footprint of operations.

Corporate Social Responsibility

A business does not operate in isolation. It draws its people, resources and opportunities from the communities around it, and it has a responsibility to leave something useful behind. For Super Iron, that responsibility is expressed through its CSR programme. The Companys CSR policy focuses on eradicating hunger, education, healthcare and the upliftment of society. Against a prescribed CSR obligation of Rs.13.33 Lakhs, the Company spent Rs.14.00 Lakhs during the year.

Internal Control Systems and their Adequacy

The Internal Financial Controls with reference to the Financial Statements are considered to be commensurate with the size, scale and nature of the operations of the Company. The system encompasses the major processes to ensure reliability of financial reporting, compliance with policies, procedures, laws and regulations, safeguarding of assets, and economical and efficient use of resources. There is an adequate Management Information System (MIS), reviewed periodically by functional heads.

M/s. Amit Khetan & Co., Cost Accountants, were appointed as the Internal Auditor of the Company for FY 2025-26 under Section 138 of the Companies Act, 2013, on the recommendation of the Audit Committee. The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system, its compliance with operating systems, accounting procedures and policies at all locations of the Company. The main thrust of internal audit is to test and review controls, appraise risks and business processes, and benchmark controls against industry best practice. Based on Internal Audit Reports, process owners take corrective actions in their respective areas, thereby strengthening controls. The Audit Committee, in consultation with the Internal Auditor, formulates the scope, functioning, periodicity and methodology of the Internal Audit, and reviews the Internal Audit Reports at regular intervals.

M/s. Prateek Kohli & Associates, Practicing Company Secretaries, were appointed to conduct the Secretarial Audit of the Company for FY 2025-26 under Section 204 of the Companies Act, 2013. The Secretarial Audit Report does not contain any qualification, reservation, or adverse remark.