VARDHMAN SPECIAL STEELS Q2 CONCALL: REVENUE SURGES 39% YOY, SALES VOLUMES JUMP 27%, PROFIT GROWS ~50%, STRONG AUTOMOTIVE DEMAND & MAJOR STEEL AND FORGING EXPANSION UNDERWAY

• MANAGEMENT TARGETS FY27 SALES VOLUMES OF APPROXIMATELY 2.60 LAKH TONNES, SUPPORTED BY STRONG AUTOMOTIVE DEMAND, HIGHER PRODUCTION EFFICIENCY & IMPROVED CAPACITY UTILISATION • MANAGEMENT EXPECTS SUSTAINABLE EBITDA OF APPROXIMATELY ₹9,000–12,000/TONNE OVER THE LONG TERM, WHILE CAUTIONING THAT EXCEPTIONALLY HIGH Q2 PROFITABILITY SHOULD NOT BE EXTRAPOLATED • MANAGEMENT EXPECTS HEALTHY DEMAND FROM TWO-WHEELERS, PASSENGER VEHICLES & SUVS, SUPPORTED BY SEASONAL DEMAND, GST-RELATED BENEFITS & TIGHTER INDUSTRY SUPPLY • MANAGEMENT IS NEGOTIATING FURTHER Q3 STEEL PRICE INCREASES, WITH COMPETITORS PROPOSING HIKES OF APPROXIMATELY ₹3,500–4,000/TONNE, ALTHOUGH FINAL CUSTOMER SETTLEMENTS REMAIN PENDING • MANAGEMENT TARGETS EXISTING PLANT CAPACITY EXPANSION FROM 3 LAKH TO 3.60 LAKH TONNES ANNUALLY, SUBJECT TO FINAL ENVIRONMENTAL APPROVAL, SUPPORTING NEAR-TERM VOLUME GROWTH • MANAGEMENT PLANS A NEW GREENFIELD SPECIALTY STEEL PLANT WITH INITIAL CAPACITY OF 5 LAKH TONNES ANNUALLY & EXPANSION POTENTIAL TO AT LEAST 7 LAKH TONNES, TARGETING COMPLETION BY SEPTEMBER 2029 & STABILISATION BY MARCH 2030 • MANAGEMENT TARGETS COMMISSIONING OF ITS NEW FORGING FACILITY BY MARCH 2028, WITH INITIAL FULL-CAPACITY OUTPUT OF APPROXIMATELY 15,000 TONNES ANNUALLY & TECHNICAL SUPPORT FROM JAPANESE PARTNER AICHI • Q2 REVENUE GREW 39% YOY, WHILE SALES VOLUMES INCREASED 27% TO A RECORD OVER 70,000 TONNES, SUPPORTED BY STRONG OEM DEMAND & IMPROVED REALISATIONS • Q2 EBITDA & NET PROFIT BOTH GREW APPROXIMATELY 50% YOY, REFLECTING HIGHER STEEL PRICES, IMPROVED PRODUCT MIX, BETTER YIELDS & OPERATIONAL EFFICIENCIES • QUARTERLY SALES VOLUMES INCREASED FROM APPROXIMATELY 59,000 TONNES IN Q1 TO OVER 70,000 TONNES IN Q2, REFLECTING STRONG DEMAND & HIGHER PLANT THROUGHPUT • STEEL PRICE INCREASES OVER THE PREVIOUS TWO QUARTERS REACHED APPROXIMATELY ₹8,000/TONNE FOR CERTAIN OEM CUSTOMERS, SUPPORTING STRONGER REALISATIONS & PROFITABILITY • NEW REHEATING FURNACE & KOCKS BLOCK HAVE IMPROVED PRODUCTION THROUGHPUT, STEEL QUALITY, YIELDS & COST EFFICIENCY, WHILE REDUCING EXTERNAL JOB-WORK REQUIREMENTS • MANAGEMENT EXPECTS A NEW PEELING LINE TO BECOME OPERATIONAL IN NOVEMBER 2026, FOLLOWED BY AN ADDITIONAL PROCESSING LINE IN DECEMBER 2026, SUPPORTING HIGHER VALUE-ADDED PRODUCTION • GREENFIELD STEEL PLANT LAND ACQUISITION FOR THE MELTING UNIT HAS BEEN COMPLETED, WHILE ROLLING PLANT LAND ACQUISITION IS TARGETED BY JANUARY 2027 & ENVIRONMENTAL APPLICATION BY DECEMBER 2026 • MANAGEMENT EXPECTS REVISED GREENFIELD PROJECT COST TO EXCEED THE EARLIER ₹2,000 CR ESTIMATE, WITH FINAL COST DETAILS EXPECTED AROUND MARCH–APRIL 2027 • MANAGEMENT IS CONSIDERING A DEBT-EQUITY FUNDING MIX OF APPROXIMATELY 1:1 FOR THE NEW STEEL PLANT, WITH POTENTIAL RIGHTS ISSUE IN H2 CALENDAR 2027 & GREATER DEBT FUNDING TO LIMIT EQUITY DILUTION • FORGING PROJECT INVESTMENT WAS EARLIER DISCUSSED AT APPROXIMATELY ₹475 CR, WITH MANAGEMENT EXPECTING REVISED COSTS TO REMAIN BELOW THE INITIAL BUDGET • FORGING BUSINESS HAS ALREADY RECEIVED GLOBAL TIER-1 CUSTOMER APPROVALS & ORDERS, PROVIDING INITIAL REVENUE VISIBILITY AHEAD OF PLANNED COMMISSIONING IN MARCH 2028 • MANAGEMENT PLANS TO DIVERSIFY BEYOND AUTOMOTIVE INTO TOOL & DIE STEELS, OIL & GAS, RAILWAYS, BEARINGS, WIND ENERGY, AEROSPACE & DEFENCE, SUPPORTING LONG-TERM HIGHER-VALUE SPECIALTY STEEL DEMAND • INGOT CASTING EXPECTED TO BEGIN AROUND NOVEMBER 2026, SUPPORTING NEW PRODUCT TRIALS, ALTHOUGH MEANINGFUL NON-AUTOMOTIVE VOLUME CONTRIBUTION IS LIKELY AFTER GREENFIELD CAPACITY COMMISSIONING • MANAGEMENT PLANS 22.5 MW ADDITIONAL SOLAR CAPACITY TO REDUCE ENERGY COSTS & SUPPORT GREEN STEEL PRODUCTION, WHILE CUSTOMER INTEREST IN LOW-CARBON STEEL CONTINUES TO INCREASE • BORROWINGS STOOD AT APPROXIMATELY ₹162.93 CR VS ₹92 CR AT FY26-END, WITH MANAGEMENT ATTRIBUTING MUCH OF THE INCREASE TO ACCOUNTING RECLASSIFICATION OF LC-RELATED LIABILITIES • TRADE RECEIVABLES INCREASED TO APPROXIMATELY ₹410 CR VS ₹277 CR, PRIMARILY DUE TO HIGHER SALES, WHILE RECEIVABLE DAYS INCREASED BY ONLY 4–5 DAYS • GST INCENTIVE ENTITLEMENT ENDED IN AUGUST 2026, WHILE ELECTRICITY-DUTY BENEFITS CONTINUE UNTIL AUGUST 2029; GST REFUND CASH RECEIPTS MAY LAG ACCOUNTING RECOGNITION BY APPROXIMATELY THREE YEARS • MANAGEMENT IS CONSIDERING DIVIDEND SUSPENSION FOR 3–4 YEARS TO SUPPORT MAJOR CAPACITY EXPANSION, SUBJECT TO BOARD APPROVAL • MANAGEMENT REMAINS POSITIVE ON AUTOMOTIVE DEMAND, STRONG STEEL PRICING, OPERATIONAL EFFICIENCY, FORGING EXPANSION & LONG-TERM CAPACITY GROWTH, BUT ENVIRONMENTAL APPROVAL DELAYS, PROJECT COST ESCALATION, MARGIN NORMALISATION, HIGHER BORROWINGS & EXECUTION RISKS REMAIN KEY CONCERNS

VARDHMAN SPC STEEL LTD

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