Welspun Investments & Commercials Ltd Management Discussions

The Management Discussion and Analysis (MDA) should be read in conjunction with the Audited Financial Statements of Welspun Investments and Commercials Ltd ("Welspun" or "WICL" or the "Company"), and the notes thereto for the year ended March 31,2025. This MDA covers Welspuns financial position and operational performance for the year ended March 31, 2025. Currency for this MDA is Indian Rupees unless otherwise indicated.

Forward-Looking Statements

This report contains forward-looking statements, which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.

Welspun Investments & Commercials Ltd - A Business Overview

The Company is a Core Investment Company. WICL focuses on the trading opportunities available in diverse sectors by leveraging the position of welspun group. The Company also engages in investment segment, subject to RBI guidelines, and relies on the economic developments and the performance of the investee company - its profits, dividend and stock prices.

The Company holds equity shares mainly in welspun group companies which are engaged in the business of Line Pipes, Steel, Infrastructure and Oil & Gas. The Companys revenue majorly depends on the dividend declared and changes in the stock market prices of the investee companies.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Global Economy

• Overview

After enduring a prolonged and unprecedented series of shocks, the global economy appeared to have stabilized, with steady yet underwhelming growth rates. Inflation, down from multidecade highs, followed a gradual though bumpy decline toward central bank targets. Labor markets normalized, with unemployment and vacancy rates returning to pre-pandemic levels.

Inflation rates across economies have trended downward steadily, approaching central bank target levels. This has been the result of tighter monetary policy regimes across the globe and supply chains adapting to higher levels of economic uncertainty

However, the landscape has changed as governments around the world have reordered policy priorities. Major policy shifts are resetting the global trade system and giving rise to uncertainty that is once again testing the resilience of the global economy. Since February, the United States has announced multiple waves of tariffs against trading partners, some of which have invoked countermeasures. The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity.

• Outlook

In the near term, global growth is projected to fall from an estimated 3.3 percent in 2024 to 2.8 percent in 2025, before recovering to 3 percent in 2026.

In 2025, global equity markets could face an environment characterized by several cross-currents. The central equity theme for next year is one of higher dispersion across stocks, styles, sectors, countries and themes. This should improve the opportunity set and provide a healthier backdrop for the active management industry after consecutive quarters of record narrow and unhealthy equity leadership

Indian Economy

• Overview

Despite global economic headwinds, Indias growth remains stable at 6.5%, supported by strong domestic demand. Inflation is under control, though core inflation remains sticky, necessitating careful monetary management. Trade challenges persist due to weak global demand, but a narrowing trade deficit offers some relief. While foreign investor

outflows pose risks, robust domestic investment provides resilience. The RBIs proactive policies have played a crucial role in stabilizing liquidity and inflation expectations. Overall, Indias economy is well-positioned for growth, but uncertainties in global markets, financial volatility, and trade disruptions remain key risks. Sustained policy support and domestic resilience will be essential in maintaining economic momentum.

• OUTLOOK

India is projected to remain the fastest-growing large economy for 2025 and 2026, reaffirming its dominance in the global economic landscape. The countrys economy is expected to expand by 6.2 per cent in 2025 and 6.3 per cent in 2026, outpacing many of its global counterparts. In contrast, the International Monetary Fund ("IMF") projects global economic growth to be much lower, at 2.8 per cent in 2025 and 3.0 per cent in 2026, highlighting Indias exceptional outperformance. Despite global uncertainties and downward revisions in growth forecasts for other large economies, India is set to maintain its leadership in global economic growth. Supported by strong fundamentals and strategic government initiatives, the country is well-positioned to navigate the challenges ahead. With reforms in infrastructure, innovation, and financial inclusion, India continues to enhance its role as a key driver of global economic activity. The IMFs projections reaffirm Indias resilience, further solidifying its importance in shaping the global economic future.

(Source: Press Information Bureau- Government of India- April 23, 2025, IMF- World Economic Outlook- April 2025 edition, Economic Survey 2024-25- Government of India- January 2025 edition)

OPPORTUNITIES AND THREATS

The Company depends on the dividends and capital appreciation from the equities it is invested in, on the investment side. Better performance of the investee companies can be beneficial for the Company while on the other hand, any failure by any invested company in earning profits or distributing dividends or providing capital appreciation can impact on the revenue stream of Welspun.

Going forward, any improvement in the demand and consumption scenario will increase the opportunities for trading activities in the country which will help the Company in increasing its operations. However, increased competition and high inflation can act as a challenge for the Company.

Any increase in dividend distribution tax by government can be an external threat to the Companys revenue stream.

Risk and Concerns

Risk is integral to any business and WICL is no exception. Following are the external risks to which the Company is exposed to:

• Dividend fluctuation: Dividend received on investments forms the major part of the business of the Company. Investee Company distributes dividend to its shareholders based on its profitability, future strategy and the dividend distribution policy. Thus, any change in these can affect the revenue stream of Welspun.

• Economic environment: Both streams of revenues of the Company depends on commodities trading and equity share investments. Thus, any unfavorable changes in the domestic or global economic environment can affect the revenue stream.

Apart from these, liquidity risk, rising inflation, pandemic risk, transaction risk and change in regulatory framework are the other risks to which the Company is exposed to.

HUMAN RESOURCE

The Companys current activities do not require engagement of significant human resource. However, requisite qualified and experienced personnel have been engaged to take care of organization need of human resource. With the sign of growth, if and when seen, the Company will engage requisite human resource.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The adequacy of the internal control system is reviewed by the Audit Committee of the Board of Directors. The emphasis on internal controls prevails across functions and processes, covering entire gamut of various activities. Your Company has taken proper and sufficient care for the maintenance of adequate accounting records as required by various statutes. Internal Auditors, the Audit Committee and Statutory Auditors have full and free access to all the information and records as considered necessary to carry out their responsibilities.

KEY RATIOS

Ratio	Formula	2025	2024	Change %	Remark
Debtors Turnover	Total Sales/ Trade receivables	NA	NA	NA	No trade receivables at the end of Financial Year
Inventory Turnover	Cost of Goods Sold / Average Stock	NA	NA	NA	No Inventory at the end of Financial Year
Interest Coverage Ratio	Net Profit Before Interest & Taxes (PBIT) / Fixed Interest cost & Charges	NA	NA	NA	No interest expense as the company is debt-free
Current Ratio	Current Assets / Current Liabilities	5.31%	6.22%	-14.63%	Due to decrease in Current Assets
Debt Equity Ratio	Debt / Equity	NA	NA	NA	There is no Debt on the books of the company.
Operating Profit Margin (%)	Net Operating Profit / Net Sales	93.34%	90.04%	3.66%	No material change
Net Profit Margin (%)	Net Profit / Net Sales	70.39%	67.27%	4.63%	No material change
Return on Net worth	Net Profit/Net worth	12.45%	10.66%	16.77%	This was higher on account of the Higher Net profit during the year