Vraj Iron & Steel Ltd Management Discussions

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 Financial Year 2024-25. This Report should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Integrated Report and Annual Accounts 2024-25. 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 in terms of the Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management of Vraj Iron and Steel Limited presents its Analysis Report covering the performance and outlook of the Company.

1. INDUSTRY STRUCTURE AND DEVELOPMENT

GLOBAL ECONOMY:

In 2024, the global economy grew at a rate of 2.8%, with regional disparities. Notwithstanding 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. This indicates a stagnant growth rate, with the economy. 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 activities.

The World Bank and OECD both forecast a global growth rate of around 2.9% for 2025, The tension around trade and high levels of policy uncertainty are expected to have a significant impact on the economic activity. Worldwide inflation is expected to be moderate. While advanced economies are likely to contain inflation more effectively than developing markets, rise in protectionism and geopolitical tensions around trade will significantly impact prices of domestic products specially in US. Inflation rate in the Service Industry will remain higher than the pre pandemic in the county like US and Europe Country. The Monetary policy remains same in this cycle, while fiscal policy of advance economy like Us and Europe is expected to be strict in 2025. The growth rate of US is projected to be upto 2% supported by demand and supply with financial strength.

In 2024, Europe (‘EU) registered a growth rate of 0.8% supported by monetary easing by European Central

Bank. Economic activity in EU is projected to remain flat in 2025, before showing modest recovery in 2026. As per IMF, recovery will be largely driven by improvement in domestic demand along with rising wages. The

United Kingdom (‘UK) is expected to register a stable GDP growth of 1.0% in 2025, aided by gradual interest rate declines, steady real income growth, and improving consumer confidence. However, elevated geopolitical uncertainties and structural constraints, such as low productivity and an aging population, will continue to pose challenges for Europe and UK. The Chinese economy continued to grow in 2024, witnessing a growth rate of 5%. Growth is projected to remain stable at 4.5% in 2025 and 2026, though overcapacity, sluggish domestic demand, and structural challenges in the property market remain as concerns. Outcome of governments stimulus on domestic consumption, US - China trade discussions, and export performance will impact the industrial output of China and would be the key watchpoints in 2025. Fuel prices are expected to decline by 7.9% in 2025, driven by weak Chinese demand and strong non-OPEC+ oil supply, although gas prices may rise due to supply disruptions. Non-fuel commodity prices are expected to increase by 4.4% in 2025. Meanwhile, global trade volumes are projected to be slightly lower in 2025 and 2026, owing to heightened trade policy uncertainty.

INDIAN ECONOMY:

The economy of India is a developing mixed economy with a prominent public sector in strategic sectors. It is the worlds fourth-largest economy by nominal GDP and the third-largest by purchasing power parity; on a per capita income basis. The growth of Indian economy led successive by the governments followed the Soviet model and promoted protectionist economic policies, with extensive Sovietization, state intervention, demand-side economics, natural resources, bureaucrat-driven enterprises and economic regulation.

Nearly 70% of Indias GDP is driven by domestic consumption; the country remains the worlds fourth-largest consumer market. Aside private consumption, Indias GDP is also fueled by government spending, investments, and exports the governments strategic focus on infrastructure development, digital transformation, and inclusive growth played a pivotal role in sustaining economic momentum. This period also saw significant policy reforms aimed at boosting investment, enhancing productivity, and ensuring sustainable development. The Indian economy is demonstrated growth at 6.4% for the F.Y. 2024-25, driven by strong domestic demand, government spending on infrastructure, and a recovery in private investment.

Inflation is projected to moderate and be in the range of 4.0 4.5% in the following year, mainly supported by favorable food price trends. Principally inflation on 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.

On the sectoral front, the services sector has demonstrated resilience, with financial services, real estate, professional services, public administration, and defense driving growth. Exports in the services sector have also recorded strong performance. Construction activities and utility services have supported industrial growth, while high value - added manufacturing exports-particularly in electronics, semiconductors, and pharmaceuticals have shown robust momentum. Agricultural production has remained strong, underpinning rural consumption, and contributing to steady economic activity in rural markets.

The Indian Government focused on fiscal consolidation, employment generation, and boosting capital investment. The share of capital expenditure in central government spending has continued to rise, playing a critical role in industrial and infrastructure development. Increased capital outlays on infrastructure and asset creation are expected to generate growth multipliers. The PLI scheme has successfully attracted investments and stimulated production across various industries. The Government is exploring further sectoral expansion to enhance domestic manufacturing and develop labor-intensive industries.

Despite Indias strong economic momentum, certain downside risks persist. Towards the end of 2024, economic activity moderated due to weaker private and foreign investment flows, impacting industrial output. The rupees depreciation, coupled with uncertainties surrounding cross border conflicts, global trade policies and supply chain disruptions, could pose a few challenges.

Overall, Indias economic outlook remains balanced for the FY 2026, driven by strong domestic demand, policy support, and sectoral resilience. By leveraging its domestic strengths and implementing strategic reforms, India is well-positioned to navigate global challenges and maintain its trajectory as a leading global economic powerhouse.

GLOBAL STEEL INDUSTRY:

The Global Steel Industry in 2024 faces a mixed outlook with potential for both growth and challenges. While some regions are expected to experience modest demand growth, others are facing a slowdown, and the overall market is projected to be impacted by overcapacity and fluctuating prices, 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 MT 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 MT in 2023 to 27.4 MT in 2024. In India, the imports from China stood at 2.83 million tonnes in FY2024-25, around 12% higher than the previous year.

Global steel demand is projected to grow by 1.2% in 2025, reaching ~1,770 million tonnes. After three consecutive years of decline, steel demand is expected to recover globally (excluding China) in 2025. A stable global economic outlook, coupled with improving financing conditions and real income growth in major economies, is expected to support recovery in private consumption and investments before the tariff impositions. Additionally, a significant recovery in residential construction is also anticipated from 2025 onward, supported by easing financing conditions. However, the tariffs imposed by US administration and reciprocal tariffs by countries has led to increased uncertainty in demand-supply balance and continues to be a major risk to the steel industry. At a regional level, the downturn in Chinas real estate sector is expected to persist, leading to a 3% decline in steel demand in 2024, followed by an additional 1% decline expected in 2025. However, government intervention and economic support measures could help stabilise demand.

In Developing Economies (excluding China), steel demand grew by 3.5% in 2024 and is expected to further accelerate to 4.2% in 2025. Emerging economies in the MENA and ASEAN regions are expected to rebound after experiencing a significant slowdown in 2022 and 2023. In Developed Economies, steel demand declined by around 2% in 2024, with major steel consuming nations including the United States, Japan, South Korea, and Germany experiencing contractions. However, demand is expected to recover by 1.9% in 2025, driven by improving economic conditions. In Europe, apparent steel consumption experienced another drop of 2.3% in 2024. Output growth in the steel-using sectors is expected to remain low in 2025 due to continued low investments following from the high interest rates. In 2025, apparent steel consumption is projected to recover at a gradual pace of 2.2%, based on a positive industrial outlook and easing global tensions, though they are unpredictable now.

India is the second-largest steel producer in the world, Indias finished steel consumption stood at 119.17 MT in FY23, 138.5 MT in FY24 and in FY25 it will grow by. Indias domestic steel demand is estimated to grow by 9-10% in FY25 as per ICRA.

The Indian steel sector growth over the years has been attributed to the domestic availability of raw materials such as iron ore and cost-effective labour. Also, the industry has benefitted from domestic demands in sectors such as construction, real estate, and automobiles.

DOMESTIC STEEL INDUSTRY:

The Indian steel industry has experienced strong growth, driven by rising domestic consumption, which increased by 11% during April-December 2024 25 provisionally as compared to the same period last year. However, India remained a net importer of finished steel during this period, with imports rising by 23% while exports declined by 25%. On the global stage, India is the second-largest producer of crude steel and the second largest consumer of finished steel in 2024, according to provisional rankings from world steel. It is projected to retain its position as the second-largest consumer of finished steel in 2025, as per world steels Short-Range Outlook. Budget 2025 introduces key measures focusing on Agriculture, MSMEs, Investment, and Exports as the four pillars of economic growth. These initiatives are expected to significantly benefit the domestic steel industry through multiple channels, to create further opportunities for the steel industry, fostering its development in the coming days, Infrastructure remains the backbone of Indias economy, and investments in this sector have consistently been a key driver of steel industry growth, influencing both supply and demand. underscoring the governments commitment to infrastructure development, industrial expansion and long-term economic resilience. Given the uncertainty in global markets, the budget reinforces the need to strengthen domestic infrastructure to sustain growth. Additionally, government initiatives, including Production-Linked Incentives (‘PLI) schemes and increased investments in infrastructure and manufacturing, have played a crucial role in boosting steel production and consumption.

In the Union Budget for FY2025-26, the Government of India (‘GoI) has maintained capital expenditure (capex) as a share of GDP at the same level as 2024, reinforcing its commitment to industrial growth. While steel demand remains robust in India, steel prices are expected to remain range bound, capped by the threat of Chinese imports. Policy support provided by the Government in the form of a safeguard duty of 12% on April 21, 2025 for 200 days has given a partial relief to the Indian steel industry.

Overall, while the global steel demand is poised for recovery in 2025, the industry remains exposed to geopolitical, economic, and financial risks, however, continues to stand out as a high-growth market, supported by strong domestic demand and investment. The long-term outlook for the Indian steel industry remains optimistic, with continued infrastructure development, industrial expansion, and supportive government policies driving its growth. Effective trade policies, price stabilisation measures, and sustained investment will be crucial to maintaining Indias competitive edge in the global steel market.

Indian Crude steel output rose by 6% year-over-year reaching approximately 144 MT in FY 2024 and for 152MT for 2025, domestic steel demand grew roughly 9% hitting 149 MT in FY 2024. According to the ACRA/CRISIL consumption of steel upturn of 9 to 10 % in FY 2025 driven by infrastructure hosing, engineering and auto sectors.

RAW MATERIAL MARKET:

In 2024, Indias Iron ore accounts for 70% of the total MCDR mineral production by value. As per provisional data, production of iron ore at 289 million metric ton (MMT) in FY 2024-25 has broken the production record of 277 MMT achieved in FY 2023-24, with a 4.3% growth. and in the fiscal year 2024-25, Indias coal production reached 1047.677 million tons (MT), a 5% increase compared to the 997.826 MT produced in the previous fiscal year. Coal supply also saw a rise, reaching 1025.248 MT, a 5.37% increase from the 973.009 MT supplied in FY

2023-24 to 1025.248 MT (provisional) in FY 2024-25 with a growth of about 5.37%. Uninterrupted coal supply has been ensured during the year. Target of coal production for FY 2025-26 has been finalized by the Ministry of Coal is 1150.39 MT.

Your company purchases Raw Material i.e. Coal from SECL and from the open market as per the requirement of the Company and Iron Ore from NMDC for production of Sponge Iron. Our company has entered into and Long-Term Fuel Supply Agreement with SECL and NMDC for the procurements of raw material. Procurement of raw material is also been done through the linkage Auctions/Open Auction of as organized by Authorities.

OUR BUSINESS OVERVIEW

Your company is an integrated steel manufacturing plants, currently operating in 2 (two) plants situated at:

1. VILLAGE DIGHORA TEHSIL TAKHATPUR, DIST- BILASPUR AND 2. INDUSTRIAL AREA-SILATARA RAIPUR, CHHATTISGARH.

The integrated nature of our manufacturing plants has resulted in the control over all aspects of our operations (with the exception of sourcing of primary raw materials) as well as operating margins, thereby enabling us to focus more on quality and create multiple points of sale across the steel value chain.

We primarily engaged in the manufacturing of three main products, Sponge Iron, MS Billets and TMT Bars. The table below showcases our production capacities as of March 31, 2025, with the expansion capacity, to further leverage our capabilities and strengthen our value chain for better cost optimization through our backward integration are as:

	Unit of	Installed Capacity before Expansion in the FY 2023-24			Expansion in Bilaspur	Installed Capacity post the Expansion in the FY 2024-25
Particulars	Measur ement	Raipur	Bilaspur	Total	during the FY 2024- 25	Raipur	Bilaspur	Total
				1,20,00
Sponge Iron	MTPA	60,000	60,000		1,15,500	60,000	175,500	2,35,500
				0
MS Billets*	MTPA	57,600	-	57,600	-	57,600	-	57,600
TMT Bars	MTPA	54,000	-	54,000	-	54,000	-	54,000
Total				2,31,60
	MTPA	1,71,600	60,000		1,15,500	171,600	1,75,500	3,47,100
Products				0
Captive
	MW	5	-	5	15	5	15	20
Power Plant

Note: *Expansion of MS Billet Plant at Bilaspur with capacity of 1,53,000 MTPA is in progress at the end of the FY 2024-25.

The Company had chosen Bilaspur Plant for the capacity expansion; company has successfully done its expansion in Sponge Iron plant and Power Plant during the year. Expansion of its MS Billet Plant at Bilaspur with capacity of 1,53,000 MTPA is expected to be completed in FY 2025-26, which will further strengthen our production capabilities.

Manufacturing plants are strategically located, supported by robust architecture, leading to cost efficiencies and a stable supply chain within the mineral rich State of Chhattisgarh and in close proximity to the mineral belt in eastern India

These locations allow us to have easy access to raw materials and end users both which helps us overcome significant entry barriers in comparison with our competitors. We believe this lowers our transportation costs and provides us with logistics management and cost benefits, thereby improving our operating margins.

1. DIVERSIFIED PRODUCT MIX WITH STRONG FOCUS ON VALUE ADDED PRODUCTS:

In line with our strategic goal of enhancing operational efficiency and long-term profitability, we have intensified our focus on diversifying our product mix with an emphasis on value-added offerings. This approach is particularly crucial in the highly competitive and cyclical steel industry, where margin stability and product differentiation are key success drivers.

During the year, we continued to optimize our production mix across Sponge Iron, MS Billets, TMT Bars, and Captive Power. While sponge iron and billets form the foundation of our integrated value chain, the company has increased its emphasis on TMT bars, a higher-margin, value-added finished product with robust demand from infrastructure and construction sectors.

The forward integration into TMT bar production allows us to capture greater value across the supply chain, reduce reliance on third-party sales of semi-finished goods, and build stronger relationships with end-users and distributors. We are actively investing in process improvements, automation, and quality control to enhance the grade, durability, and consistency of our TMT offerings.

In parallel, our captive power generation continues to support cost-effective operations, while surplus power shall be sale externally, providing an additional revenue stream. We are evaluating further efficiency improvements and potential capacity expansions in power generation to support our growth in steel production.

Looking ahead, we remain committed to expanding our value-added product portfolio, strengthening our brand presence in downstream markets, and leveraging our integrated model to drive sustainable growth and higher EBITDA margins.

2. WORKING CAPITAL AUGMENTATION:

Ensuring a steady and cost-efficient supply of key raw materials is critical to the uninterrupted operation of our Sponge Iron Plant. In this context, your company has prioritized the augmentation of working capital to strengthen its raw material procurement strategy, particularly from leading government and private sector suppliers, during the year, we strategically enhanced our working capital base to secure consistent supply of core inputs such as iron ore and coal. Our key procurement partners include:

NMDC for high-grade iron ore, essential for producing quality sponge iron;

SECL (South Eastern Coalfields Ltd.), and with its subsidiaries for sourcing non-coking coal required in the reduction process; Additional purchases from private sector miners and traders to supplement requirements and procurement of raw material is also been done through the linkage Auctions/Open Auction of as organized by Authorities.

This working capital augmentation has enabled us to enter into more favorable procurement contracts, maintain higher inventory buffers, and reduce exposure to price and supply volatility. It has also supported smoother plant operations by minimizing disruptions related to raw material availability.

The strategic investment in working capital has not only reinforced our supply chain resilience but has also positioned us to take advantage of volume discounts, advance procurement benefits, and seasonal pricing advantages.

Moving forward, the company will continue to monitor commodity price trends and supplier performance to dynamically manage working capital allocation. We also intend to explore long-term supply agreements and forward contracts to further de-risk procurement and support the growth of our sponge iron capacity.

3. EXPERIENCED PROMOTER, BOARD AND MANAGEMENT TEAM:

We are led by our experienced and diverse Board and Management Team, who have multifold experience in the Iron and Steel Industry, and have been instrumental in the growth of our Company and have the expertise and vision to scale up our business. Mr. Vijay Anand Jhanwar is the Promoter and the Chairman and Managing Director of our Company has been well-established in the industry for more than 02 decades.

The knowledge and experience of our management and our team provide us with a competitive advantage as we seek to grow our existing business and expand the same. Having an experienced Board of Directors who have extensive knowledge and understanding of the metal industry being supplemented by a strong senior management team with significant experience in the metal industry will be strong foundational pillars of growth for our company. We believe our manufacturing plants operate in areas with highly skilled and low-cost labour, which helps us to keep our operating costs low.

4. TRACK RECORD OF GROWTH AND FINANCIAL PERFORMANCE:

Over the past few years, the Company has demonstrated a consistent track record of growth, underpinned by operational excellence, strategic capacity expansion, and prudent financial management. Despite a dynamic macroeconomic environment and input cost fluctuations, we have maintained a steady upward trajectory in both revenue and profitability.

(Rupees in Millions)

Sr. No.	Financia year	Revenue from Operations in millions	Total Income	EBITDA	PAT
1	2024-25	4750.31	4788.60	660.47	418.31
2	2023-24	4198.57	4242.70	808.90	541.17
3	2022-23	5089.57	5107.01	783.82	513.32
4	2021-2022	4020.72	4024.17	483.09	275.02
	CAGR	5.72%	5.97%	10.99%	15.00%

Further our integrated business model spanning Sponge Iron, MS billets, TMT bars, and captive power has enabled us to capture value across the production chain and mitigate risks associated with raw material volatility. The forward integration into value-added products like TMT bars has contributed positively to margins and cash flow:

5. PRODUCT WISE PERFORMANCE OF STEEL IN F.Y. 2023-24 AND 2024-25:

Particulars of Product	Quantity Produced (MT)	Quantity Sold (MT)	Captive Use (MT)	Quantity Produced (MT)	Quantity Sold (MT)	Captive Use (MT)
Financial Year		2024-25			2023-24
SPONGE IRON	147339.00	99438.04	46383.86	116080.00	73864.85	42126
M.S. BILLETS	48310.20	10758.91	37487.35	44568.00	17610.05	26813
TMT BAR	36299.45	36225.09	411.14	25977.50	25185.10	439

6. CAPACITY UTILISATION DURING THE FINANCIAL YEAR 2024-25:

During the year under review, the Company operated its manufacturing facilities at optimum levels. The details of installed capacity, actual production and capacity utilization are as under:

Particulars of Product	Unit of measurement	Installed Capacity	Production	Utilizsed Capacity
SPONGE IRON	MTPA	235500*	147339.00	62.56%
M.S. BILLETS	MTPA	57600	48310.20	83.87%
TMT BAR	MTPA	54000	36299.45	67.22%

*One of our Sponge Iron Plant located at Bilaspur with the capacity of 115500 MTPA has been started production from December 2024.

7. ON THE FINANCIAL FRONT, THE COMPANY HAS ACHIEVED:

Sustained revenue growth, driven by increased production volumes, improved capacity utilization, and favorable market demand.

Healthy EBITDA margins, supported by Internal consumption of Sponge Iron and Power, resulting in cost efficiencies.

Stable Balance Sheet, with manageable leverage and strong liquidity, enabling timely procurement, capital expenditure, and working capital deployment.

Reflecting efficient asset utilization.

Our focus on disciplined capital allocation, cost optimization, and product diversification has laid a solid foundation for future growth. We remain confident in our ability to continue this momentum, supported by strong sector fundamentals and robust operational capabilities.

8. KEY CHALLENGES

A. Lack of Sustainable Raw Material Sources (Iron Ore and Coal)

Iron ore and coal are the key raw materials used in the steel production process. India largely depends on importing these raw materials for various uses.

India is self-sufficient in iron ore. However, it largely consists of low-grade deposits, which require beneficiation to make them suitable for use in steel plants. Accordingly, the availability of high-grade iron ore is limited in India. Moreover, a large quantity of iron ore fines produced in the mining process requires pelletisation before it can be used in steel plants.

Secondly, the limited availability of coal reserves is another challenge for the steel industry. Further, the domestically available coal has high ash content and is not suitable for direct use in the process. It has to be washed in washeries and then blended with imported coal to make it suitable for the process. At the same time, there is limited capacity for washeries. As a result, India largely depends on imports to meet the domestic demand for coal.

B. High Logistic Costs

It is estimated that 3-3.5 tons of material needs to be transported for every 1 tons of steel produced in India. The logistics cost is currently in the range of 4-5% of sales of the domestic steel players and fluctuates on the basis of the proximity of the steel plants to the iron ore and coking coal sources. Further, logistics costs in India are significantly higher compared to global peers and account for about 14% of the GDP.

Moreover, the logistics industry connects other industries to the domestic and international markets. It affects the efficiency of the manufacturing global value chains and the competitiveness of a countrys economy within these value chains.

C. Decarbonization and Environmental Concerns

The Indian steel industry is responsible for roughly 12% of Indias carbon dioxide (CO2) emissions, surpassing the global average of 7-9%. The emission intensity in the Indian steel industry stands at 2.55 T/TCS, while the global average emission intensity is 1.91 T/TCS.

India has made a commitment to decrease the emissions intensity of its Gross Domestic Product (GDP) by 45% by 2030, compared to 2005 levels and achieve net zero by 2070. To support this target, the Ministry of Steel has committed to achieving the Net Zero target by 2070 and has taken a medium-term target to reduce the emission intensity of the steel sector to 2.4 T/TCS by 2030.

These targets remain critical for the steel industry players including steel pipes and tube manufacturers for reducing the emissions within the set timelines. The reduction of emissions is also vital for the industry to maintain its competitiveness in export markets which are becoming increasingly environment conscious. Commencing in October 2023, the European Union (EU) has decided to implement a Carbon Border Adjustment Mechanism (CBAM) a tariff on carbon-intensive imports, aimed at preventing carbon leakage. The first phase of CBAM will cover the iron & steel, cement, aluminium, fertilizer, electricity, and hydrogen sectors.

9. RISK FACTORS:

Risks Relating to our Business:

1. Both of our existing manufacturing facilities are concentrated in a single region i.e. Raipur and Bilaspur, Chhattisgarh. And Expansion is also being at Bilaspur, Chhattisgarh and hence we face geographical concentration related risks.

2. 100% of our revenue is from sale of our steel products such as TMT Bars, MS Billets, Sponge Iron & others related items. Volatility in the demand and pricing in the iron and steel industry is common and is cyclical in nature. A decrease in steel prices may have a material adverse effect on our business, results of operations, prospects and financial condition.

3. If we are unable to successfully utilized our installed capacity of expansion, including Captive Power Plant, our results of operations and financial condition could be adversely affected.

4. The shifts in GDP growth rates together with inflation variations and changes in interest rates and government fiscal decisions affect both investment spending patterns and consumer psychological state which produces consequences on the larger steel market demand pattern. Global economic conditions involving export-import restrictions and trade tariffs together with geopolitical tensions cause disruptions to supply paths while limiting export availability.

5. The inherently cyclical nature of the steel industry results in fluctuating and unpredictable demand trends. Infrastructure projects, a major demand driver, are often subject to delays stemming from regulatory bottlenecks or fiscal limitations. Rising competition, both from domestic players and low-cost imports, continues to exert pressure on pricing and market share. Heavy reliance on core consuming sectors such as construction, infrastructure, and capital goods exposes the business to sector-specific slowdowns

10.INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as statutory auditors.

11. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Share Capital:

During the financial year 2024-2025, the company experienced a significant development in its share capital structure leading to an increase in its paid-up share capital from Rs. 247.21 to Rs. 329.82 million as of March 31, 2025.

During the year 2024-2025, the Company Share Capital increased through an Initial Public Offer (IPO), the company successfully raised Rs. 1710.00 million by issuing 82,60,869 Equity Shares with a face value of Rs. 10/- each, at issue price of Rs. 207/- per share, including a premium of Rs. 197/- per share. The equity shares were listed on BSE-NSE Main Board on July 03, 2024.

Total Income:

The Total Income of the Company stood at Rs.4788.60 million for the year ended March 31, 2025 as against Rs.4242.70 million in the previous year. The Company made a Net Profit after tax of Rs. 418.31 million for the year ended March 31, 2025 as compared to the Net Profit after tax of Rs. 541.17 million in the previous year.

Reserves and Surplus:

The Board has decided not to transfer any amount to the special reserve for the year under review, however an amount of Rs. 418.31 million is transferred in the general reserves of the company.

12. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

In the financial year under review, our company continued its trajectory of strategic growth and operational expansion. One of the most significant indicators of this growth has been the substantial increase in our workforce. As of March 31, 2025, we had a workforce of 768 employees & workers, comprising of 473 permanent employees including 03 Executive Directors, 02 KMP, 10 employees at the Registered Office, 207 employees at Raipur Plant and 251 employees at Bilaspur Plant along with 295 contract workers. As compared to the previous year as it was 193 at Raipur Plant and 95 at Bilaspur Plant with contract workers 235 comprising of 537 workforces. Following the expansion initiative undertaken last year, we successfully onboarded an additional 231 employees during the early part of the year. This expansion was aimed at strengthening our operational capabilities, improving client delivery timelines, and scaling our talent management services across new regions

We have also continued to focus on employee training and engagement, ensuring that our growing team is aligned with the companys vision and equipped with the skills required to meet evolving industry challenges. Our HR function has played a pivotal role in streamlining onboarding processes and enhancing workforce integration post-expansion.

Moving forward, the company will continue to prioritize employee development, diversity and inclusion, and performance-based culture as key pillars of our human resources strategy

13. DETAILS OF SIGNIFICANT CHANGES:

Our Company has significant changes in the key financial ratios during the financial year 2024-25 as below:

Sr No. Financial Ratios	Numerator	Denominator	Ratio 2024-25	% changes in FY 2025	Ratio 2023-24	% change in FY 2024
	Current
1 Current Ratio		Current Liabilities	10.622	131.40%	4.59	59.36%
	Assets
		Shareholders
		Equity + Finance
Debt-Equity
2	Total Debt	Cost + Repayments	0.006	(98.23) %	0.34	81.23%
Ratio
		of current and non-
		current term
Debt Service	PBT +
3 Coverage	Depreciation	Borrowings	42.519	79.86%	23.64	268.10%
Ratio	+ Interest
Return on	Profit after	Avg. Shareholders
4			0.218	(31.37%)	0.32	(28.95%)
Equity	Tax	Equity
	Revenue
Inventory
5	from	Average Inventory	10.258	(10.11%)	11.41	(29.58%)
Turnover Ratio
	Operations
Trade	Revenue
		Average Trade
6 Receivable	from		29.039	(15.54%)	34.38	(17.55%)
		Receivable
Turnover Ratio	Operations
Trade Payables		Average Trade
7			32.565	56.77%	20.77	(32.52%)
Turnover Ratio	Purchases	Payables
	Revenue
Net Capital		Average Working
8	from		07.577	42.17%	5.33	(47.16%)
Turnover Ratio		Capital
	Operations
Net Profit	Profit after	Revenue from
9			0.088	(31.68%)	0.13	30.58%
Ratio	Tax	Operations
Return on
10 Capital	EBIT	Capital Employed	0.149	(49.81%)	0.30	(34.23%)
Employed

EXPLANATION FOR CHANGE IN RATIOS FOR THE YEAR ENDED (IF MORE THAN 25%):

Current Ratio	Debt-Equity Ratio
Due to substantial increase in Current Asset	Due to decrease in Term loan
Debt Service Coverage Ratio	Return on Equity
Due to substantial decrease in debts	Due to decrease in profit and increase in equity
Net Capital Turnover Ratio	Trade Payable Turnover Ratio
Due to increase in sale and substantial decrease	Due to decrease in payables
in working capital.
Net Profit Ratio	Return on Capital Employed
Due to substantial decrease in profit	Due to substantial increase in Capital Employed

CAUTIONARY STATEMENT:

This report contains forward- looking statements based on the perceptions of the Company and the data and information available with the company. The company does not and cannot guarantee the accuracy of various assumptions underlying such statements and they reflect Companys current views of the future events and are subject to risks and uncertainties. Many factors like change in general economic conditions, amongst others, could cause actual results to be materially different.

For and on behalf of Board of Directors
VRAJ IRON AND STEEL LIMITED
Sd/-	Sd/-
Vijay Anand Jhanwar	Prasant Kumar Mohta
(Managing Director)	(Whole time Director)
DIN: 00826103	DIN: 06668452
Place: Raipur Chhattisgarh
Date: Thursday August 28, 2025