Vibhor Steel Tubes Ltd Management Discussions

1. ECONOMIC REVIEW

1.1 Global Economic Review

In 2024, the global economy grew at a rate of 2.8%, with regional disparities. Despite positive trends like reducing inflation and monetary easing in several countries, geopolitical risks around trade policy uncertainty, and ongoing conflicts continued to weigh on global economic sentiment. The economy globally is projected to continue to grow in 2025. While there is a reducing intensity in tariffs globally, developments in this area including trade agreement between major blocks like United States of America, United Kingdom, European Union, China among others, and a ceasefire deal between Russia and Ukraine will be key factors impacting the economic activity.

Outlook

After enduring a prolonged and unprecedented series of shocks, the global economy appeared to have stabilized, with steady yet underwhelming growth rates. Ratcheting up a trade war and heightened trade policy uncertainty may further hinder both short-term and long-term growth prospects. Scaling back international cooperation could jeopardize progress toward a more resilient global economy Region-wise economic growth (%)

Region	2024	2025 (P)	2026 (E)
Global Economy	3.3	2.8	3.0
Advanced Economies (AEs)	1.8	1.4	1.5
Emerging Markets and Developing Economies (EMDEs)	4.3	3.7	3.9

(P- Projections, E- Estimates) (Source: International Monetary Fund)

1.2 Indian Economic Review

India is one of the fastest-growing major economy. It demonstrated a growth rate of 6.5% in FY2024-25. Despite global headwinds, India s growth is expected to remain rangebound, 6% - 6.5%, in the next couple of years. The economy is expected to be driven by strong domestic consumption, government capital expenditure, and robust expansion in the services and manufacturing sectors. Inflation is projected to moderate and be rangebound, 4.0 4.5% in the near term, supported by favourable food price trends. Core inflation across goods and services has remained stable, while fuel prices have declined. The moderation in inflation has enabled the Reserve Bank of India to adopt a more accommodative stance, with interest rate cuts anticipated to stimulate consumer spending and credit growth. Foreign Portfolio Investment volatility is expected to subside, while softening crude oil prices will likely support exchange rate stability Outlook

India s economic outlook for 2025 presents cautious optimism, amidst the backdrop of persisting external headwinds. On the positive side, participating economists expect consumer spending to gain momentum, driven by an improved outlook for the agriculture sector, which is likely to bolster rural consumption and sentiment in the first half of the next fiscal year. Food inflation - which has remained elevated for over a year and strained household budgets, particularly for low- and middle-income urban families is expected to ease. As inflationary Economic Outlook Survey January 2025 pressures recede, participating economists expect urban consumption, especially for low-ticket and discretionary items, to witness a recovery in the near term. Furthermore, monetary easing by the Reserve Bank of India (RBI), resulting in lower interest rates, could also provide an additional impetus to consumption. On the investment front, the government s focus on capital expenditure is expected to remain a key growth driver in the year 2025-26. Investments in infrastructure and allied sectors such as roads, housing, logistics, and railways are anticipated to further economic momentum. Additionally, the services sector, particularly hospitality, real estate, health, and education, is expected to contribute to creation of fresh capacity.

Nonetheless, significant downside risks remain on horizon. Participating economists expect the private capital expenditure cycle to stay subdued, with a cautious outlook limiting large-scale capacity additions. Factors such as geopolitical uncertainties, uneven domestic demand, oversupply from China have kept investors on the edge. However, with deleveraged corporate balance sheets, capacity utilization rates holding up, and uptick in demand - the momentum in private investments could build. Merchandise exports are projected to face persistent challenges, constrained by weak global demand, potential tariff wars, and ongoing geopolitical tensions. While services exports are expected to perform better than merchandise exports, uncertainties stemming from US trade policies and financial market volatility could pose additional risks. Considering these factors, participating economists have pegged India s GDP growth forecast for the fiscal year 2025-26 between 6.5 percent and 6.9 percent - reflecting a balanced outlook that accounts for both opportunities and challenges.

Source: Economic Outlook Survey by FICCI, Jan 2025

2. INDUSTRY REVIEW

2.1 Global Steel Industry

The steel sector has historically been a cornerstone of industrial progress, forming the foundation of economic development. However, the past year presented significant challenges for the industry, as global manufacturing activity remained subdued due to low household and business confidence, leading to cautious spending and investment. High input costs, geopolitical uncertainty, and tighter financing conditions have delayed capital investments. The lingering effects of inflation have further eroded purchasing power and consumer sentiment. Additionally, weak housing construction in major markets such as China, the United States, Europe, and Japan has adversely impacted steel demand. The automotive sector, a major consumer of steel, also experienced slowdown in 2024. However, investment in manufacturing facilities and public infrastructure provided some support to global steel demand. Sustained capital expenditure in these areas by major economies played a key role in offsetting weaker demand from traditional sectors. While steel demand weakened in China and most developed economies, developing economies like India have demonstrated resilience. Steel demand in the developing world excluding China grew by around 3.5% in 2024, while the developed economies witnessed approximately 2% decline in steel demand in 2024. Exports from China to the rest of the World were at their highest level since 2016, at 111 Million Tonnes as domestic demand for steel in China decreased significantly, whereas the decline in production was moderate. The high exports from China have resulted in protectionist measures by different countries. Imports into the EU increased from 25.6 Million Tonnes in 2023 to 27.4 Million Tonnes in 2024. In India, the imports from China stood at 2.83 million tonnes in FY2024-25, around 12% higher than the previous year

Outlook Demand Trends

Global steel demand is expected to grow by +1.2% in 2025, reaching ~1.77 billion tonnes.

Growth is regionally uneven: o India: Strongest growth globally, with demand rising 6 8% due to infrastructure and manufacturing. o China: Demand is declining or flat due to real estate slowdown and structural changes. o OECD countries: Demand is stabilizing after a period of contraction (especially in the EU and US).

Production & Capacity

Global crude steel production is projected at ~1.846 billion tonnes in 2025, slightly below previous forecasts.

Rising excess capacity remains a risk, especially in Asia (notably China, India, and Southeast Asia).

Capacity utilization may fall to ~70%, impacting profitability and market balance.

Trade & Geopolitics

Export volumes from China surged in 2024 (over 110 Mt), prompting anti-dumping and tariff measures globally.

Trade tensions and protectionist policies are reshaping global supply chains, especially in Europe and North America.

Decarbonization & Green Steel

Strong momentum toward Electric Arc Furnaces (EAF) and hydrogen-based DRI.

However, high costs, infrastructure gaps, and lack of global carbon pricing hinder widespread adoption.

Regulatory support and green investments are strongest in Europe, Japan, and parts of India.

Source-based on the latest data from World Steel Association (worldsteel), OECD, and major industry analysts:

2.2 Indian Steel Industry

India remains the world s second-largest steel producer and one of the strongest demand drivers, with steel demand expected to grow by 8% in 2025. Demand is expected to reach 200-210 million tonnes by 2030, driven by strong expansion in steel-intensive sectors such as infrastructure, housing, transportation, power, and renewable energy. India has now risen to be the 2nd largest crude steel producer in the world and the largest producer of sponge iron. From a negligible global presence, the Indian steel industry is now globally acknowledged for its product quality. As it traversed its long history since independence, the Indian steel industry has responded to the challenges of the highs and lows of business cycles. The first major change came during the first three Five-Year Plans when in line with the economic order of the day, the iron and steel industry was earmarked for state control. From the mid-50s to the early 1970s, the Government of India set up large integrated steel plants in the public sector at Bhilai, Durgapur, Rourkela and Bokaro.

Outlook

The Indian steel industry is poised for robust growth in FY 2025 26, with domestic demand expected to rise by 8 9%, driven by infrastructure expansion, manufacturing growth, and strong automotive sector performance. Crude steel production is projected to reach ~157 million tonnes, supported by significant capacity additions of around 40 million tonnes. Government initiatives like the PLI scheme, Green Steel Mission, and safeguard duties on imports are bolstering domestic producers and encouraging technological upgrades. While challenges such as raw material cost volatility and carbon transition pressures persist, India is set to remain the world s fastest-growing steel market, benefiting from structural demand and supportive policy frameworks.

Government Initiatives

In FY 2024-25, the Indian government launched several initiatives to bolster the steel industry and support economic growth:

1. Infrastructure Investment: The government allocated a substantial capital expenditure of 11.21 lakh crore for FY 2025-26, focusing on large-scale infrastructure projects. This includes significant investments in roads, highways, ports, and metro networks, which are expected to drive steel demand. (Source-Business Standard)

2. PM Awas Yojana: The government s plan to construct an additional two crore houses under the Pradhan Mantri Awas Yojana (PMAY) aims to boost the housing sector. This initiative is expected to increase demand for steel in residential construction.

3. National Infrastructure Pipeline (NIP): The NIP continues to prioritize major infrastructure projects, including transportation and urban development. This pipeline supports long-term steel demand through ongoing and planned construction activities.

4. National Green Hydrogen Mission (NGHM): The NGHM includes a significant allocation of ~30% of its pilot project budget to the steel sector. This investment is aimed at promoting green steel production through the adoption of green hydrogen and other sustainable technologies.

5. Gati Shakti Initiative: Under the PM Gati Shakti initiative, the government is focusing on reducing logistics costs from 14% of GDP to 8-9% in the coming years. Improved logistics are expected to enhance efficiency and lower costs in the steel sector.

6. Make in India and MSME Support: The Make in India initiative aims to increase the share of manufacturing in GDP and strengthen self-reliance. The push to support micro, small, and medium enterprises (MSMEs) is also expected to boost manufacturing activities and steel demand.

These initiatives reflect the government s commitment to infrastructure development, sustainability, and economic growth, which are critical drivers for the steel industry.

2.3 Global Steel Tubes & Pipes Industry

The Global Steel Pipe Market is projected to grow from USD 146.87 billion in 2022 to USD 325.64 billion in 2027 at a CAGR of 8.24% from 2022 to 2027. Steel pipes are used in various industries and infrastructural applications as cylindrical steel tubes. They are used widely for product formation and installation of equipment s. The principal application of pipe is the subterranean transportation of liquids or gases such as oil, gas, and water. Carbon steel pipes are commonly employed in industrial operations that involve severe cold, intense heat, or the transmission of gases such as steam. The major drivers of the global steel pipe market includes rising oil and gas demand, demand for steel pipes, across the globe, flourishing transportation industry and rising construction activities post pandemic. Growing investment in research and development for stronger production facilities is also one of the major factors to support the market growth.

Technological advancements and innovations in steel pipe manufacturing are further enhancing market prospects. The industry is witnessing a shift towards the adoption of high-strength, corrosion-resistant, and eco-friendly steel grades to meet the stringent requirements of modern infrastructure projects and industrial applications. Moreover, increased investments in infrastructure projects, including water supply, sewage systems, and transportation networks, are expected to drive steady demand for steel tubes and pipes. As companies strive to meet the growing needs of both developed and developing regions, the focus on sustainability and efficiency will continue to shape the industrys growth trajectory, positioning it as a key player in global infrastructure and industrial development.

Source: https://www.grandviewresearch.com/industry-analysis/steel-pipes-tubes-market 2.4 Indian Steel Tubes & Pipes Industry

As the world s second-largest steel producer, India s steel sector is vital to infrastructure, manufacturing, and national development, contributing significantly to GDP and employment. Key initiatives like the National Infrastructure Pipeline (NIP) further highlight its importance in driving economic progress and modernization. According to the World Steel Associations Short Range Outlook, an 8% increase in Indian steel demand is expected in the year 2025. In contrast, Chinas steel demand is projected to decline by 1% in 2025 due to the ongoing downturn in the Chinese real estate sector. The Indian Steel industry has not only expanded production but also prioritized sustainability and innovation. With a focus on environmentally friendly manufacturing, the industry is adapting to global standards while improving energy efficiency and reducing its carbon footprint. Driven by strong domestic demand, supportive government policies, and continuous investment, the Indian steel industry is well-positioned to contribute significantly to Indias economic growth aspirations The condition of the Indian economy is almost identical to that of the Indian tube and pipe sector. There s a growing appetite for oil and gas, a higher requirement for steel pipes globally, an active transport industry, an escalating need for effective water distribution and irrigation systems, continuous and significant expansion of cities, and government s efforts aimed at cleanliness and handling sewage and wastewater are propelling the Indian tube and pipe industry.

3. COMPANY OVERVIEW

Our Company was originally incorporated as ‘Vibhor Steel Tubes Private Limited a private limited company under the Companies Act, 1956 pursuant to a certificate of incorporation dated April 16, 2003 issued by the Registrar of Companies, National Capital Territory of Delhi and Haryana. Thereafter, our Company was converted from private to public company, pursuant to a special resolution passed by the shareholders of our Company on June 14, 2023 and a fresh certificate of incorporation consequent to change of name was issued by the Registrar of Companies, Delhi (“RoC ) on July 07, 2023.

Hellow Section Hot-Dipped

ERW Pipes Pipes & Painted Crash Barriers Galvanized Pipes Pipes

Vibhor Steel Tubes Limited is manufacturers and exporters of Mild Steel/Carbon Steel ERW Black and Galvanized Pipes, Hallow Steel Pipe, Cold rolled Steel (CR) Strips/ Coils. We are 2 decades old manufacturer, exporter and supplier of steel pipes and tubes to various heavy engineering industries in India. Steel pipes and tubes can be used for many purposes such as steel pipes for frames and shafts, steel pipes for bicycle frames, steel pipes for furniture, CDW pipes for shockers, steel pipes for various structural purposes, steel pipes for various engineering purposes etc. We have a very wide range of steel pipes and tubes products. The lengths of the steel pipes & tubes in different ranges unless otherwise specified by the customers. We manufacture steel pipes and tubes in various shapes and size such square, round, rectangular and elliptical or any special shape.

4. BUSINESS STRENGTHS

1. Association with Jindal Pipes Limited

Promoters of the Company and Jindal Pipes Limited (“JPL ) share common friendship from Hisar origin. The Company benefits from a long-standing relationship with JPL. It started with Job work activity which has now translated into full time production of pipes (0.5 inch to 12 inch) for JPL under brand “Jindal Star . As per the business agreement dated renewed April 01, 2023, the Company sells all its finished product under brand name “Jindal Star to JPL and its approved customers based on monthly card rates. As entire procurement and selling is facilitated by JPL, pricing becomes very transparent and passing of variation in raw material prices to the customers is effective.

2. Strategic location of manufacturing Units

Unit I is located at located Raigad, Maharashtra, which is the best place for export of goods, we export 100% of export sales from Unit I only. Unit II is located around seventy (70) kms from Hyderabad in the Mahabubnagar District, State of Telangana and close to Jadcherla industrial area. This proximity enables ease of logistics, power, water supply and raw materials for our operations in Unit I. We have established unit III in Sundergarh (Odisha). The plant is approx. 20 kms from the city of Sundergarh. The company has commenced production in this facility in June 2025.

3. Experienced Promoters and senior management team

Our two Promoters, Mr. Vijay Kaushik and Mr. Vibhor Kaushik are qualified professionals with an individual experience of more than 4 & 2 decades respectively in the Steel Pipes & Tubes industry and have been instrumental in driving our growth since inception of our business. We believe that our management teams experience and their understanding of the industry will enable us to continue to take advantage of both current and future opportunities. A large number of our senior management personnel have worked with us for a significant period of time, resulting in effective operational coordination and continuity of business strategies. They have led the organization through acquisitions, development of new systems and components etc.

4. International Accreditations.

As we sell our product under the brand name “Jindal Star for Jindal Pipes Limited. We follow international standard manufacturing practises and our Manufacturing Facility benefits from the quality benchmarking certifications such as (i) ISO 9001:2015 for manufacturing & supply of ERW Steel

Pipes-Black & Galvanized with certificate number 10116-AQMS-0216 approved by Global Accreditation Board and International Council of Accreditation Bodies issued by Acerna Management Systems Private Limited, a third party (ii) IS 1239:2004, IS 3601:2006, IS 3589:2001 from Bureau of Indian Standards Such practices and accreditations, coupled with our technical capabilities and know-how enable us to manufacture products for both domestic and international customers.

5. Export of finished goods

We export our manufactured goods for the Jindal Pipes Limited under the brand of Jindal to the overseas customers. We directly deal with our foreign customers & deliver the products directly to customers and also invoice them directly instead of Jindal. Currently we are focusing to increase our export sales. We believe that our diversified customer base provides us significant penetration in the market in which we operate and thereby hedges our business operations from potential sector specific risks, including but not limited to policy announcements, change in global markets and international relations etc.

6. Well-developed distribution and marketing network

With the help of Jindal Pipes Limited, our company has developed and implemented a wide range of networking channels throughout the industry and society to strengthen the scope of identifying core customer base and designing right marketing strategies for procurement and liaising of projects to deliver customized solutions for clients. Our distribution and marketing network ensure our product availability to our customers translating into efficient supply chain, focused customer service and short turnaround times for product delivery. We have customers in domestic as well as in international market, as on March 31, 2025, we have exported around 10 countries across the globe.

7. Integrated manufacturing facility

We do continuous endeavour to maintain the requisite infrastructure and technological upgradation for the smooth running of the manufacturing process as well as to cope with the changing market demand situation. There is a continuous change in the technology and the markets are very dynamic to the change in technology. We keep ourselves technologically upgraded with the latest machines and infrastructure. We have well equipped machinery in all the 3 units.

8. Stable Financial

Your Company maintains good financial discipline and is regular in payment of banks interest/ instalments as well as creditors on time. Your Company follows stringent financial policies. Your Company has policy of having internal audits done from time to time to ensure that there is no margin of error.

5. BUSINESS STRATEGIES

1. Expansion of our footprint in international market

We have successfully exported finished goods under the brand name “Jindal Star around 10 countries across the globe. We plan to continue our strategy of diversifying and expanding our presence in these regions for the growth of our business. We are selective in expanding to new locations and look at new geographies where we can deliver quality products without experiencing significant delays and interruptions. Through further diversification of our operations geographically, we hope to hedge against risks of operations in only specific areas and protection from fluctuations resulting from business concentration in limited geographical areas.

2. Continue to enhance our core strengths by attracting, retaining and training qualified personnel

We believe that our ability to effectively execute and manage projects is crucial to our continued success. We understand that maintaining quality, minimising costs and ensuring timely completion of our projects depends largely on the skill and workmanship of our employees. As competition for qualified personnel increases among engineering and manufacturing companies in India, we seek to improve competitiveness by increasing our focus on training our staff. We offer our engineering and technical personnel a wide range of work experience and learning opportunities by providing them with continuous training in latest systems, techniques and knowledge upgradation.

3. Continue to improve operating efficiencies through technology enhancements

Our production process is completely automated with our Manufacturing facilities, housing latest product specific equipment and machineries that support us in manufacturing of our Products in accordance with our customer requirements. In line with our proposed expansion plans, we intend to further develop our technology systems in order to increase asset productivity, operating efficiencies and strengthening our competitive position.

4. Strengthen our Goodwill

We are in the business of manufacturing of mild steel and stainless-steel pipes/tubes since approximately last twenty years whereas our peer group industry players/competitors have the benefit of average 40 years longer operating history in comparison with ours, and therefore, our brand development is at a relatively nascent stage. Considering our current market presence with our customers in diversified sectors and geographies in order to further penetrate the market, we intend to make consistent efforts to strengthen own goodwill with the help of Jindal Pipes Limited and enhance our brand visibility for attaining parity with our industry peers. Towards this end, we intend to undertake various marketing initiatives including participation in industrial trade fares, dealers meet organised by Jindal Pipes Limited. We believe that such initiatives shall improve our brand positioning, overall brand recall value and support us in our growth strategy.

6. PRODUCT RANGE

1. ERW (“igitized high-end tube mills.

The company s tubing processes ensure that ERW pipes manufactured have high strength corrosion resistance, high malleability, superior strength, sturdiness and durability as special features. Provide a range of options in varying qualities, wall thickness, diameters and finishes depending on the requirement of the end-users. Hot rolled coils are purchased from SAIL, JSW etc.

Applications: Water Transport, Oil. Gas & other non-toxic supplies.

2. Hot -Dipped Galvanized Pipes:

Corrosion resistant pipes, i.e. Galvanized Pipes are manufactured at the plant in large quantities, using high-end Zinc to coat. Having a cover of protective zinc, these pipes have maximum resistance to corrosion, increasing their life expectancy. Apart from preventing rust, this process is equally effective in dry and indoor environments. Standard 21-foot zinc coated galvanized tubes and pipes are either threaded or welded, depending on the diameter sizes and finally undergo a heavy-duty saw cutter before moving to quality checks. Zinc is purchased from dealers of Hindustan Zinc Limited. Applications: Agriculture & Infrastructure. While galvanized pipes do find their way in piping inside buildings for water supply, albeit on a lower scale in recent years, they are more popularly used as Building and structural material, Mechanical an general engineering Public transport bodies like buses, railway boogies. In Telephone department as Conduit Pipes Handrails and replacement of existing pipes.

3. Hollow Sections Tubes:

ERW Pipes are also manufactured in Hollow sections shapes i.e. square and rectangular. Each steel hollow section features a high strength to weight ratio that results in savings in steel costs. The sections are best suited for welding, are corrosion resistant and easily bendable which leads to the shaping and construction of aesthetically appealing structures without comprising on strength and durability. Customers are provided with an option to primer paint the pipes for protection during storage and handling. Dura Primed primer paint is used to ensure speedy delivery while maintaining quality. Coated pipes offer high resistance to corrosion on pipes and provide many benefits such as:

Increased Flow Capacity

Reduced Maintenance Cost

Lower energy usage and Clean delivery of products Applications: Hollow sections tubes/Square Tubes used by all the organised & unorganised industries in the market such as uses in offices, factories, Hotels etc.

4. Crash Barrier:

Crash Barrier are manufactured through GI Mild Steel. Applications: used in railways, highways & roads.

7. FINANCIAL OVERVIEW

During the year, our EBITDA experienced a decline of 16.18% in 2024-25, reaching Rs. 3848.14 lakh, compared to Rs. 4,591.21 lakh in 2023-24. However, our operating income for the full year totalled Rs. 99,637.92 lakh, representing a decline of 7.12% from Rs. 1,07,271.47 lakh in 2023-24. Additionally, our PAT decreased by 33.57% in 2024-25, falling to Rs 1,177.04 lakh from Rs 1,771.94 lakh in 2023-24.

The Company s performance in FY 2025 was impacted by external factors beyond its control. The regional elections in key markets led to a temporary slowdown in project execution and order inflows, affecting overall sales volumes. Additionally, a sharp decline in steel prices during the first quarter resulted in reduced average realization, pricing pressure, and inventory revaluation losses, which together weighed on revenue, EBITDA, and PBT. The Company expects demand to improve in this year as market in now stabilized for the steel industry.

In June 2025, the company has started manufacturing operations in its third unit located at Sundernagar Odisha. Given Orissas status as the largest iron market, this new facility will help reduce raw material costs and improve margins in the future.

Outlook

The fiscal year 2024-25 presented mixed financial results for our company. Despite the challenges faced, there are several positive developments and strategic initiatives that position us for future growth and improved profitability.

Our EBITDA showed a decline of 16.18%, reaching Rs. 3848.14 lakh, compared to Rs. 4,591.21 lakh in 2023-24. Our operating income for the full year also decreased by 7.12% to Rs. 99,637.92 lakh, compared to Rs. 1,07,271.47 lakh in the previous year.. Our Profit After Tax (PAT) decreased by 33.57% to Rs. 1,177.04 lakh, down from Rs. . 1,771.94 lakh in 2023-24. This decline was primarily due external factors beyond its control. The regional elections in key markets led to a temporary slowdown in project execution and order inflows, affecting overall sales volumes. Additionally, a sharp decline in steel prices during the first quarter resulted in reduced average realization, pricing pressure, and inventory revaluation losses, which together weighed on revenue, EBITDA, and PBT. The Company expects demand to improve in this year as market in now stabilized for the steel industry.

A significant development this year was the commencement of production for Vibhor Steel Tubes Limited in Orissa, which is the largest iron market. This strategic move will allow us to reduce raw material costs and improve margins in the future. The production was started after this financial year in jun-25 but this will create significant growth in fiscal year 2025.

Looking ahead, we are optimistic about our ability to navigate market challenges and capitalize on new opportunities. Our focus will be on optimizing production, enhancing operational efficiencies, and leveraging the strategic location of our new facility in Orissa to drive long-term growth and value for our stakeholders.

8. CORPORATE SOCIAL RESPONSIBILITY

The Company truly believes that social and economic development is imperative for the evolution of a sustainable society and strives to contribute positively towards this. The well-defined Corporate Social Responsibility (“CSR ) Policy outlines the beneficial contributions the Company embarks on towards the economic, environmental, and social well-being of communities. The Company is committed to make a positive influence in the communities in which it operates. It is striving tirelessly to become a consistent, credible, and responsible business partner. The Company s CSR Committee develops the CSR Policy and advises the Board about it. The Committee is responsible for monitoring various activities like waste management, sanitation initiatives, skill-based education, improving the lives of underprivileged, eradicating hunger and women & youth empowerment, as per focus area in a particular year. The Committee also supports initiatives for national missions, disaster relief and environmental sustainability. During FY 24-25, the Company invested 25.31 lakhs towards Animal Welfare, Social Welfare and education for underprivileged children.

9. RISKS AND MITIGATION STRATEGIES

Economic Risk:

The demand of the steel sector is highly dependent on the steel consuming sectors, like oil and gas, construction, capital goods, consumer durables, autos, etc. Economic downturn thus will have a strong bearing on the steel demand.

Mitigation strategy:

The Company has strategically diversified its geographical presence and built a strong brand equity to reduce its exposure to business cycles. In addition, a broad range of superior quality products, catering to a variety of end user sectors, enables the Company to build a resilient business model. The robustness of the business model is well-reflected in the robust volume growth witnessed in FY 24-25 despite global economic slowdown

Supply-Demand Risk:

In the event of oversupply and/or overcapacity, there will be a rise in low-cost imports to India. In such an event, steel prices may fall, impacting indigenous players.

Mitigation strategy:

The Company s rich experience in the industry, global presence, broad client profile, long-standing customer relationships, technological investments and robust manpower, enable it to tap the pulse of the market. The Company closely monitors the global steel demand and market dynamics to maintain an ideal production capacity based on a realistic view. This enables the Company to reduce supply demand risk.

Competition Risk:

Given the lucrative growth prospects of the steel industry, the Company face intense competition from existing players and new entrants. Any change in marketing strategies of the existing players or introduction of superior technology may lead to intensified competition.

Mitigation Strategy:

The Company leverages its in-depth market knowledge, long standing customer relations and state-of-the-art technology to produce superior quality value added advanced products. The Company is on top of its marketing game and ensures robust brand equity. The Company prioritises maintaining profitable and efficient manufacturing processes. To meet the ever-evolving needs of its customers, the Company significantly invests in capacity expansion and capabilities of its strategically positioned manufacturing sites.

Input Risk:

Raw materials form a significant cost component for the Company. Volatility in prices of key raw materials, thus has a significant bearing on earnings. In addition, limited availability or unavailability of any raw material may hamper the production process.

Mitigation Strategy:

The Company closely monitors the fluctuation in prices of its raw materials and modifies its strategy or initiates corrective actions to ensure input risk is avoided. To reduce supply chain risk, the Company uses diversified raw material sources, both geographically and in terms of multiple vendors. Buffer inventory, long term contracts with suppliers, and close monitoring of stock levels as per demand-supply dynamics, enables the Company to minimize input risk.

Regulatory Risk:

The global steel industry is highly regulated and competitive. The Company needs to comply with all applicable regulations. Failure to comply with a regulation, be it an existing one or any new one, may impact normal course of business.

Mitigation Strategy:

The Company closely monitors the ever-evolving regulatory environment to ensure compliance with all applicable laws and statutes. The Company is prompt in bringing about necessary changes as may be required to comply with new/modified regulations. In addition, to enhance compliance, the Company invests in automated systems and training.

Foreign Exchange Risk:

The Company has exposure to foreign currency due to trading of raw materials and finished goods across international geographies. The Company also deals in additional payments in foreign currency. Any volatility in forex rates impacts the earnings of the Company.

Mitigation Strategy:

A comprehensive Foreign Exchange (FX) risk management system enables the Company to effectively analyse and monitor currency movements. Accordingly, the Company hedges its forex position to reduce risks related to currency movement. To further reduce foreign exchange risk, the Company uses a variety of derivative financial instruments, including forward contracts.

10. HUMAN RESOURCES

The Company considers its employees as the most important asset and integral to its growth and continued success. Over the past years, the Company has increased its focus on its employee engagement and development, launching various new initiatives with the goal of attracting, engaging, retaining, and fostering key talent and diversity across the organization.

We believe that the strength of our company lies in its people, and our success is directly linked to the success and growth of our team members. We are committed to fostering an environment that encourages personal development and supports growth within a welcoming and secure atmosphere. Furthermore, we place great importance on diversity within our team and value each individuals contributions. Our ability to identify, recruit, and retain talent has been a significant factor in our growth and expansion. Our human capital is our greatest tool for shaping the future of the company and is essential to our efficient operations.

The Company has implemented important HR initiatives and people management practices effectively.

Particulars	Unit	FY 2024-25	FY 2023-24	Reason for Change
Current Assets/ Current Liabilities	Times	1.37	1.54
Net Debt/Net Worth	Times	0.91	0.79
Earnings available for Debt services/ Debt, Lease and Interest Payments	Times	1.89	2.09
Profit after tax/ Average Net worth	Times	0.06	0.13	The ratio decreased due to a decline in Profit After Tax.
Cost of Goods sold/Average Inventory	Times	5.04	6.73	The ratio decreased due to a increase in Average Inventory.
Net sales/Average Trade receivable	Times	16.23	20.36
Total Consumption/ Trade Payable	Times	12.00	20.21	The ratio decreased due to a increase in Average Trade Payable.
Net sales/Net worth	Times	5.30	6.03
Profit after tax/Net sales	Times	0.012	0.017	The ratio decreased due to an increase in Employee Benefit Expenses and Depreciation & Amortization.
EBIT/Average capital employed	Times	0.08	0.13	The ratio decreased due to a decline in Profit Before Tax.

12. HEALTH AND SAFETY MEASURES

The safety of our employees is our highest priority. Our factory managers play a crucial role in our safety initiatives, conducting regular inspections and assessments related to health, safety, and environmental (HSE) practices across all our facilities. Thanks to their efforts, we have implemented numerous measures to improve the health and safety of our workforce. We have also formed specialized teams at each of our manufacturing locations to quickly identify and address any safety concerns. Our company enforces a strict set of health and safety guidelines that all employees must follow to ensure a safe working environment.

In light of the pandemic, we intensified our health and safety protocols. Beyond complying with government regulations, we implemented regular sanitization practices and ensured physical distancing. We also introduced periodic testing for employees and monitored entry with oximeter and thermal screenings. To support our employees during these challenging times, we launched wellness programs aimed at fostering resilience, managing change, and promoting the well-being of both employees and their families.

13. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a strong internal control system in place that is well-suited to the size and nature of its operations. These internal controls, which consist of various policies and procedures, are designed to ensure that our operations are managed effectively and are in line with the Companys strategic goals. They address key areas such as governance, compliance, auditing, control, and reporting.

Our internal controls are crucial for ensuring compliance with regulatory requirements, preventing fraud and errors, protecting the Company s assets and finances, and maintaining the accuracy and reliability of our financial transactions and reporting.

The Companys audit committee regularly reviews the effectiveness of these internal control systems. Any significant findings and recommendations are reported to management, which then takes the necessary corrective actions to ensure the continued efficiency and effectiveness of our internal controls.

14. CAUTIONARY STATEMENT

The Management Discussion and Analysis may include statements regarding the Company s objectives, plans, projections, estimates, and expectations that are considered forward-looking statements under applicable securities laws and regulations. These statements are based on informed judgments and estimates. However, actual results may vary significantly from those expressed or implied due to factors outside the Company s control, both external and internal. The Company does not assume any obligation to publicly update, amend, or revise these forward-looking statements in response to future developments, new information, or events.