Uni Abex Alloy Products Ltd Management Discussions

Economic Overview

Global Economy

Following a challenging stretch of unprecedented disruptions, the global economy rebounded with notable resilience. In CY 2024, global GDP grew by 3.3%. Advanced economies expanded by 1.8%, while Emerging Markets and Developing Economies (EMDEs) recorded stronger growth of 4.3%. Within the advanced economies, the United States maintained steady momentum, supported by healthy corporate performance and strong consumer demand.

Inflation also eased globally, declining from 6.6% in CY 2023 to 5.7% during the year under review.2 Looking ahead, global inflation is expected to moderate further to 4.3%1 in CY 2025 and 3.6% in CY 2026. Meanwhile, global GDP is projected to grow by 2.8% in CY 2025 and rise to 3.0% in CY 2026. Growth in the Middle East and North Africa is expected to improve in 2025 and continue its upward trend into 2026. In comparison, the North American economy is projected to expand by 1.6% in CY 2025 and 1.7% in CY 2026. The Euro area is also likely to register growth, with an estimated increase of 0.8% in CY 2025. The gradual loosening of monetary policies is also anticipated to foster a more stable and supportive environment for sustained global economic growth in the years to come.

Indian economy

Despite a challenging global economic landscape, India continued to stand out as one of the fastest-growing major economies, recording a GDP growth of 6.5% in FY 2025.3 This growth was primarily driven by positive consumer sentiment and steady domestic demand. During the year, overall inflation stood at 3.34%, while the inflation rates for urban and rural areas were 4.89% and 5.95%, respectively.4

The Indian Government played a key role in sustaining economic momentum through timely strategic interventions. Initiatives such as the China+1 strategy, the Production Linked

Incentive (PLI) Scheme, and the ‘Make in India campaign significantly boosted investor confidence and helped accelerate manufacturing activity. Foreign Direct Investment (FDI) remained robust, amounting to USD 67.7 billion in FY 2025. Notably, FDI in the manufacturing sector saw notable growth, further supporting the sectors expansion.

India has established itself as a global steel manufacturing hub and is recognised as the second-largest producer of steel, surpassing Japan. During the reported year, India produced 146.69 MnT of steel and exported 4.86 MnT. The chemical industry also continues to play a vital role in driving economic growth. Indias per capita consumption of petrochemicals stood between 25 to 30 million tonnes, reflecting steady demand in the sector. Additionally, the Indian fertiliser market remained supported by Government subsidies, which contributed to consistent fertiliser usage and improved crop yields, thereby reinforcing food security. The Government has also introduced various initiatives to encourage efficient fertiliser use, including soil health management programmes and the implementation of nutrient-based subsidies.

Looking ahead, the Indian economy is expected to maintain its positive trajectory, supported by higher investment activity and continued policy backing. Additionally, the tax relief measures announced in the Union Budget 2025–26 are likely to boost household consumption, which is expected to drive economic growth further. At the same time, India continues to closely monitor developments in the global tariff environment and is adopting a considered approach to ensure long-term economic stability remains intact.

High-Performance Alloy

High-performance alloys are engineered using a blend of materials, including non-ferrous metals such as aluminium and nickel, along with composite-clad, precious and refractory materials. These alloys are known for their superior mechanical strength, exceptional performance, and high resistance to corrosion and heat. Due to these attributes, they are extensively used in sectors such as atomic energy, semiconductors, desalination, and solar and fuel cell technologies.

In CY 2024, the global high-performance alloy industry reached a market size of USD 10.99 billion.5 The industrys growth during this period was primarily driven by rapid advancements in aircraft technology worldwide. The global industry was also largely led by North America, supported by increased consumption levels in the aerospace sector. The year saw increased collaboration between manufacturers and research organisations, resulting in the development of next-generation alloys and opening up new avenues for growth. The sector continued to evolve in response to emerging technologies, shifting consumer preferences, and regulatory changes. Moreover, the strict environmental regulations encouraged manufacturers to adopt high-performance alloys that are capable of withstanding extreme conditions while also helping to reduce environmental impact.

The global centrifugal casting industry has witnessed consistent growth over the years, reaching a market size of USD 1.5 billion in CY 2024. This growth was largely driven by rising demand from key sectors such as automotive, aerospace, defence, and industrial machinery. The industry is further expected to expand, with the global market projected to reach USD 2.2 billion by CY 20233.6

In addition to this, the global high-performance alloy market is projected to reach USD 18.52 billion by CY 2034.7 This anticipated growth is expected to be driven by wider adoption in additive manufacturing, expansion of the renewable energy sector, broader application in emerging technologies, growth in electronics, and rising demand for next-generation aircraft. Key trends likely to shape the industrys trajectory include the development of high-temperature alloys, customised alloy solutions, and a stronger emphasis on sustainable, environmentally conscious manufacturing practices.

Opportunities and Threats

The high-performance alloy sector is expected to witness continued growth, driven by rising demand from industries such as oil and gas extraction, thermal processing and petroleum. Additionally, its expanding application in power generation, particularly in the manufacturing of industrial gas turbine components, is likely to further support industry growth in the coming years.

However, this progress may be tempered by certain challenges. Increasing environmental concerns and the tightening of related regulations are placing additional pressure on manufacturers, especially in managing emissions and waste. Compliance with these evolving norms could lead to higher operational costs, which may affect the overall performance of the industry.

Uni Abex Alloy Products Limited (Uni Abex), established in 1972, has built a legacy spanning over five decades. It is part of the Neterwala Group, a family-owned and professionally managed business enterprise with a long-standing track record of growth. The Neterwala Group has diversified interests across Metallurgy, Software, Speciality Chemicals, Engineering, Geology, Oil & Gas and Environmental solutions.

Over the years, Uni Abex has become a trusted supplier of high-durability components for demanding applications across various industries. The Company specialises in the manufacture of premium alloy steel castings, particularly for decanters and reformer tubes. Its product portfolio includes radiant tubes, retort tubes, air injection tubes, tube support castings, tube sheets, header assemblies and more.

The Company has consistently enhanced its manufacturing processes and broadened its offerings. Strategic investments in modern facilities and equipment have further strengthened its capabilities and competitive position in the industry. Uni Abex remains committed to continuous innovation and a quality-first approach, focusing on timely delivery, sales growth, profitability enhancement, productivity improvement, and the adoption of industry-approved welding procedures.

In FY 2025, the Company recorded a total income of 20,006.76 lakhs, compared to 18,414.08 lakhs in the previous financial year. EBITDA stood at 5,096.79 lakhs, as against 5,338.90 lakhs in FY 2024. The Profit After Tax (PAT) amounted to 3,357.30 lakhs, while in FY 2024, it was 3,545.98 lakhs.

Net Working Capital to Sales stood at 35%, Inventory to Sales stood at 16 %, and Receivables to Sales was 18%, compared to 37%, 20%, and 10 % respectively in the previous year.

The improvement in the ratios is due to better working capital management. Debtors Turnover was 6.65, Inventory Turnover was 2.26, Interest Coverage was 65.86, Current Ratio was 2.69, Debt Equity was 0.08 as compared to those of the previous year, 9.66, 1.96, 84.93, 2.43, and 0.15, respectively. Further, Improvement in Inventory Turnover Ratio, Current Ratio and Debt Equity Ratio was due to better inventory and current asset management. Operating Profit Margin was 25% and Net Profit Margin was 17% as against the previous years 28% and 20%. The Return on Net worth was 24% vs 31% in the previous year.

The Companys CSR efforts are guided by a commitment to contributing meaningfully to society. In FY 2025, Uni Abex focused on initiatives such as providing vocational training and enhancing access to healthcare within the community.

In FY 2025, the Companys total workforce stood at 92 employees, each playing a vital role in advancing Uni Abexs long-term growth objectives. The Company has implemented robust human resource policies focused on recruiting the right talent, supporting their training and development, and ensuring smooth integration into the organisational culture, all of which contribute to improved employee retention.

Uni Abex fosters a positive and inclusive workplace by promoting employee engagement, embracing diversity, and ensuring equal opportunities for all. The Company also maintains open and transparent communication channels across the organisation, empowering employees to share feedback and voice any concerns.

To drive long-term growth, the Company has approved a capital outlay of 85 crore towards strengthening its production and operational capabilities. Reflecting its forward-looking approach, Uni Abex recently expanded its international footprint by participating as a sponsor and exhibitor at CRU Nitrogen + Syngas USA 2025 in Tulsa, Oklahoma. This step highlights the Companys continued emphasis on innovation, precision engineering and sustainable practices in metallurgy.

Uni Abex has an established risk management framework that facilitates the early identification of risks and the timely implementation of sustainable mitigation strategies. This proactive approach enables the Company to safeguard its operationsandsustainperformanceoverthelongterm.TheBoard of Directors also plays a key role in risk governance by setting out principles and policies to guide risk management practices.

Key risks identified include unexpected shifts in the economic environment and volatility in raw material prices. Economic fluctuations can impact the Companys operations and profitability, while foreign exchange rate movements may affect its international business, including material imports and goods exports. To mitigate currency-related risks, the Company uses hedging measures through contractual arrangements. Additionally, to minimise exposure to fluctuations in raw material prices, Uni Abex sources materials from multiple suppliers. This approach ensures supply continuity, offers flexibility in response to market conditions and enables cost-effective procurement.

The Company has established standard operating procedures (SOPs) for its business operations, supported by a robust ERP system with built-in checks and balances. These SOPs are reviewed and updated periodically to ensure continued relevance and effectiveness. They help guarantee that all transactions are properly authorised, verified, and recorded, while also protecting the Companys assets.

Companys policies are clearly documented and internal auditors routinely review the internal control systems to assess their adequacy and effectiveness. Statutory auditors independently verify the adequacy of financial controls and the Companys compliance with applicable laws and regulatory requirements. The Audit Committee, chaired by an independent director, meets quarterly with the management, internal auditors and statutory auditors to review audit findings and address any concerns raised.

This report includes forward-looking statements that reflect the Companys expectations, based on supportive government policies, planned initiatives, and future growth goals. Within the Management Discussion and Analysis, terms such as ‘may, ‘estimate, ‘will, and similar expressions point to the Companys intent and strategic direction. These statements are based on current assumptions and should not be seen as promises or guarantees. The actual results may turn out differently due to various influencing factors. The Company does not take on any responsibility to update or revise these statements, even if new information or future developments arise.