Techno Forge Ltd Management Discussions

The Indian steel industry is the second-largest producer globally and contributes significantly to GDP growth and industrial development. Steel demand is driven by infrastructure, construction, automobile, engineering, and consumer durables sectors.

During FY 2024-25, global steel markets have shown moderate recovery, supported by infrastructure stimulus in developed economics and resilient demand in Asia. In India, the Governments continued focus on infrastructure (roads, railways, housing, renewable energy, and defence manufacturing) is expected to drive consumption.

However, the industry also faces challenges such as high energy costs, volatility in coking coal and iron ore prices, and cheap imports from countries with surplus production. In response, the Government has tightened import norms and emphasized domestic sourcing.

The Company is committed to high standards of corporate governance, ethics, and transparency. Specific initiatives include:

• Non-discrimination across caste, gender, religion, or culture,

• Conservation of energy and environmental protection in operations,

• Training and disaster management preparedness for employees,

• Commitment to social responsibility in education and community development.

• Rising domestic steel demand driven by 1110+ lakh crore Government infrastructure outlay,

• "Make in India" and Production-Linked Incentive (PLI) schemes to boost manufacturing,

• Growing opportunities in exports due to Indias cost competitiveness,

• Structural demand from renewable energy, metro projects, and real estate expansion.

• Fluctuations in global steel prices and raw material availability,

• High logistic and energy costs affecting margins,

• Cheaper imports from countries with lower production costs,

• Stringent environmental regulations requiring investment in green technologies.

The medium- to long-term outlook for the steel industry remains strong, with domestic demand expected to grow at 7-8% annually. Indias per capita steel consumption (currently ~85 kg) still lags global average (-230 kg), indicating long-term growth potential.

Your Company, having successfully completed the Corporate Insolvency Resolution Process (CIRP) with effect from 02.02.2024, is now on a revival path. The management, continuing with its experienced leadership, is focused on cost optimization, efficient resource utilization, customer engagement, and gradual restoration of operations in line with market demand.

• Input Cost Volatility: Prices of coal, power, and raw materials arc volatile.

• Foreign Exchange Risk: With part of revenue and raw material linked to foreign currencies, volatility in USD and Euro poses a risk and other foreign policies.

• Competition: Both domestic and international competition is intensifying.

• Operational Risk: Post-CIRP transition requires careful financial and operational discipline.

The Company has taken mitigating measures such as long-term supplier tie-ups, hedging policies, insurance of assets at fair value, and continuous monitoring of industry dynamics.