Supershakti Metaliks Ltd Management Discussions

I. Overview

The objective of this report is to convey the Managements perspective on the external environment and steel industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during the F.Y.2025-26. This Report should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Annual Accounts 2025-26. The Companys financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (SEBI) from time to time.

1. Global Economy

In 2025, the global economy grew at an estimated rate of 3.4% despite significant turbulence. The year was marked by record increases in U.S. tariffs and heightened trade policy uncertainty, a raft of trade deals the impact of which is yet to play out, and a surge in AI linked investments. Key factors impacting economic activity included the weaponization of trade, and the ongoing transition towards technology-driven growth, particularly in North America and Asia. Geopolitical risks intensified during the year, with escalating conflict in the Middle East. These developments heightened uncertainty across energy markets and global trade corridors, increasing volatility in commodity prices and disrupting cross-border logistics. These challenges and uncertainties are continuing into F.Y. 2026-27.

Economic Outlook

Global economic growth is projected to slow down with a growth rate of 3.1% in 2026 before recovering to 3.2% in 2027. Advanced economies are expected to grow by 1.8% in 2026, while growth in emerging market and developing economies is projected at 3.9%. Global trade volume growth is projected to reach to 2.8% in 2026 and 3.8% in 2027, reflecting adjustments in trade linkages.

2. Indian Economy

India remained one of the fastest-growing major economies, with a growth rate of 7.5% in FY2025-26. For FY2026-27, real GDP is projected to expand by 6.7%. Headline CPI inflation is projected to rise to the RBIs target of 4% in FY2026-27 from a record low of 2.2% in FY2025-26. Despite this rise, the RBI is expected to maintain current policy with the repo rate settling at 5.0%.

Public capex remains high at over 5% of GDP, focusing on infrastructure and defence. The sustained investment in steel-intensive projects, such as those under the National Infrastructure Pipeline (NIP 2.0), ensures positive steel demand.

Continued blockades at the Strait of Hormuz, shortages of fuel and elevated energy costs are a key risk to the Indian economy. Given its import reliance, India risks a widening current account deficit, pressure on public finances, consequent tightening in fiscal spend, higher than anticipated consumer inflation and eventual demand erosion, if the blockade continues.

3. Global Steel Industry

Steel demand remained subdued across major developed markets, particularly due to prolonged weakness in housing construction in China, Europe, Japan and parts of North America. The automotive sector also experienced uneven momentum amid cost pressures and cautious consumer spending. At the same time, sustained public infrastructure spending across several major economies provided some support to steel demand, partly offsetting weakness in traditional consumption segments. Significant divergence persists across regions. Emerging regions such as parts of ASEAN, MENA and Africa are witnessing renewed momentum in steel consumption. Meanwhile, elevated excess capacity and high exports from China have intensified competitive pressures in global markets, resulting in rising trade protection measures across geographies. Overall, while medium term demand prospects show early sign of stabilisation, the global steel industry continues to be marked by structural imbalances, trade tensions and uneven regional recovery.

Steel Demand Outlook

Total global crude steel production for 2025 amounted to 1.8 billion tonnes, decreasing by 2.0% year-on-year. Once again, growth in India partially offset losses in other Asian and European countries. Indias growth in steel production accelerated, with total crude steel production rising by 10.4% to 165MT while the EU contracted 2.6% to 126MT. According to the World Steel Association, global steel demand in 2025 was at around 1,749 MT, reflecting a balance between continuing structural headwinds and supportive demand drivers. A modest recovery of 1.3% is anticipated in 2026, with demand rising to approximately 1,773 MT, supported by easing financing conditions, resilient public infrastructure spending and a gradual improvement in investment sentiment. The outlook remains shaped by divergent regional trends.

India continues to be a global leader in steel demand growth, with consumption expected to grow at a healthy rate of 7-8% in FY2026-27. Apparent Steel Use is projected to reach 176-178 MT in FY2026-27, driven by the National Infrastructure Pipeline and emerging segments like data centres, defence, and renewable energy. Government commitment remains strong, with public infrastructure spending remaining robust. While production is expected to outpace demand growth due to massive capacity, India is transitioning toward becoming a sizeable net exporter. This growth trajectory is underpinned by several powerful domestic factors like Infrastructure Investment, Urbanisation, Manufacturing Expansion.

Steel is a de-regulated sector, Government acts as a facilitator, by creating conclusive policy environment for development of the steel sector. The Government of India has notified National Steel Policy, 2017 which envisages development of a technologically advanced and globally competitive steel industry that provides environment for attaining self-sufficiency in steel production by providing policy support and guidance to steel producers. National Steel Policy covers all aspects of the steel sector such as steel demand, steel capacity, raw material security, infrastructure and logistics, Research & Development (R&D) and energy efficiency.

Production Linked Incentive (PLI) Scheme: The third round of the Production-Linked Incentive (PLI) Scheme for Specialty Steel (PLI 1.2) was launched on 4 November 2025 to attract fresh investments in advanced and emerging categories such as super alloys, CRGO steel, stainless steel (long and flat products), titanium alloys, etc.

Steel Quality Control Order (QCO): Ministry of Steel has introduced Steel Quality Control Order (QCO) thereby banning sub-standard/ defective steel products both from domestic & imports to ensure the availability of quality steel to the industry, users and public at large. As per the Order, it is ensured that only quality steel conforming to the relevant BIS standards are made available to the end users Suspension of 55 standards from Quality Control Order (QCO) Order date 20/11/2025: Ministry of Steel, after consultations with the Bureau of Indian Standards (BIS) and has issued the Steel and Steel Products (Quality Control) Amendment Order, 2025, thereby adopting adopted a calibrated approach and suspending QCO enforcement for 55 standards (42 standards for three years and 13 standards relating to specialty steel under PLI 1.2 for one year). The remaining standards have been retained on grounds of unfair trade practices, national security, adequate domestic capacity, and the need to protect small steel producers.

Research & Development (R&D): The Ministry of Steel is operating an R&D Scheme viz. "Promotion of Research & Development in Iron & Steel Sector". Through this scheme, Ministry is providing financial assistance for Research & Development (R&D) by supporting collaborative projects with academic institutions, research laboratories, and steel companies to address technological challenges in the iron and steel sector. The thrust areas for providing financial assistance under the R&D Scheme, are development of new alternate processes & technologies to address the burning issues faced by the Iron & Steel Sector such as climate change (low emission steel production, H2 based iron & steel production, CCUS etc.), waste utilization, energy & resource efficiency etc.

Global Scenario involving Russia-Ukraine war, With rising tensions in south China Sea, slowdown in US Economy and European markets may impact demand and results in supply chain disruptions.

Our Companies main products are Billets, Wire Rods and HB Wire. Billets are mainly used as intermediary products and our products basically caters to the B2B segment and has good market for its products.

Risk is a crucial aspect of all businesses and must be managed to minimize its impact. The Company has identified, estimated and controlled risks across all its business verticals and activities, such as operations, finance and HR, leveraging its knowledge of the industry trends, competitors and policies. However, there are unpredictable challenges that may affect the industrys performance, such as inflation, liquidity crunch, slower industrial growth, depreciating rupee, political instability and volatile commodity prices. Despite the Companys risk mitigation measures, these challenges can still have an impact. During FY 2025-26, the Company focused on value chain excellence, operational excellence, customer centricity, sustainable initiatives, employee engagement, synergy and integration and digital to sustain the most critical situation during the pandemic. The Companys priority is to implement long-term initiatives to manage liquidity robustly and optimize working capital while considering all risk parameters.

Your Company has achieved total revenue 71,279.74 Lakhs as compared to 74,466.30 Lakhs in the previous year, but the EBITDA margins took a hit due to subdued demand & lower realization of finished goods post March 2026 realizations have significantly improved and your Company expect to generate better margins going forward.

Some of the Financial Indicators are:

The Companys Board of Directors operates an extensive system of internal control. It includes the organizations plans and policies to ensure orderly and efficient business conduct. The Board has also set-up appropriate processes to monitor the relevant external and internal risks. The Company follows a well-defined model of internal control system to deal efficiently and effectively with all the five components of Internal Control System, namely:

Risk assessment. Control environment. Control activities. Information and communication. Monitoring the activities of the different levels of the organization.

The Companys internal audit is carried out effectively, leading to an independent and systematic assessment of its data, records and performances and so on with a pre-determined objective. It has the potential to be one of the most influential and value-added services available to the Board. It emphasizes on:

Operational effectiveness and efficiency. Resource protection. Reliability of internal and external reporting. Compliance with applicable laws, regulations and internal policies.

Internal audit works as a catalyst for improving an organizations effectiveness, thus providing insight and recommendations based on analysis and assessments of data and business processes. With its commitment to integrity and accountability, internal audit provides value to governing bodies and senior management as an objective source of independent advice.

The organization promotes independent examination of its plans and the policies, subject to the overall control environment supervision by the Board Level Audit Committee. This leads to accountability and transparency of operations and promotes independent examination. During the year, the Company focused on encouraging independent decision making, documentation of shortcomings of the various processes and departments and correction of the work processes. It is supplemented by well-documented policies, guidelines, procedures and regular reviews, which are carried out by the Independent Chartered Accountant to conduct internal audit. The reports containing significant audit findings if any are submitted to the Companys management and its Audit Committee.

The Company values its human resources as its most important asset and focuses on their training, development and wellbeing in the workplace. The Management believes that business cannot expand without utilizing the potential of its workforce. As of 31st March, 2026 the Company had 434 employees and it maintains a positive relationship with its staff. The safety of employees is of great importance to the Company and it ensures that safe work practices are followed. The Board of Directors and the Management acknowledge the contributions of all employees towards the growth of the Company.

This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be forward looking statements within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments.

161, Sarat Bose Road Kolkata- 700 026, (India) T+91(0)33- 2419 6000/01/02 E kolkata@singhico.com www.singhico.com