SMLTNSE10 February 2025

Sarthak Metals Limited has informed the Exchange about Investor Presentation

Sarthak Metals Limited

To, The Manager, Listing & Compliance, BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.

Date: 10/02/2025

To, Listing Department, National Stock Exchange of India Limited, C-1, G-Block, Bandra-Kurla Complex Bandra (E), Mumbai – 400 051

Ref: Scrip Code - 540393

Ref: Scrip Symbol - SMLT

Subject: Earnings Presentation Q3 FY 2024-2025.

Dear Sir/Ma’am,

Pursuant to Regulation 30(6) of the SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015, we are enclosing herewith Earnings Presentation of the Company. The said presentation is also being made available at the website of the Company at www.sarthakmetals.com You are requested to kindly take the same on your record.

Thanking You,

For, Sarthak Metals Limited

Pratik Jain Company Secretary and Compliance Officer

Encl. as above.

MODERN METALLURGICAL

SOLUTIONS FOR FINE

TUNING STEEL

EARNINGS PRESENTATION Q3 FY25

TOPICS

FINANCIAL RESULTS

BUSINESS UPDATE

COMPANY BACKGROUND

FINANCIAL TRENDS

SUSTAINABILITY INITIATIVES

SLIDE NO.

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

TOPICS

FINANCIAL RESULTS

OPERATIONAL HIGHLIGHTS

P&L SUMMARY

MANAGEMENT COMMENTARY

BUSINESS UPDATE

COMPANY BACKGROUND

FINANCIAL TRENDS

SUSTAINABILITY INITIATIVES

SLIDE NO.

CORE OPERATIONAL HIGHLIGHTS Q3 FY25

VOLUMES & REALIZATIONS

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

S T H G I L H G H L A N O I T A R E P O

CORED WIRES

31 CRORE

REVENUE

15% INCREASE IN VOLUME

(YoY)

-8% DECREASE IN

REALIZATIONS (QoQ)

1,300

1,250

1,200

1,150

1,100

1,050

1,000

950

2.80

2.75

2.70

2.65

2.60

2.55

2.50

2.45

2.40

2.77

2.64

1 0 6 0

1 2 3 8

2.55

1 2 1 6

Q3FY24

Q2FY25

Q3FY25

Volume

Realiaztion

in Tonnes & ₹Lakh/Tonne

ALUMINIUM FLIPPING COIL

9 CRORE

REVENUE

-80% DECREASE IN

VOLUME (YoY)

13% INCREASE IN

REALIZATIONS (QoQ)

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

3.00

2.50

2.00

1.50

1.00

0.50

2.29

2.58

2.07

1 7 3 6

3 4 2

3 5 0

Q3FY24

Q2FY25

Q3FY25

Volume in Tonnes & ₹Lakh/Tonne

Realization

Q3 FY25 P&L SUMMARY

PARTICULARS ( ₹ I N C R O R E S )

Revenue from Operations

Total Income

Operating Expenses

EBITDA (Excluding OI & EI)

EBITDA %

Finance Cost

Depreciation & Ammortization

Y R A M M U S L & P

PBT

PAT

EPS (₹)

Q3FY25

Q2FY25

Q3FY24

YOY% change

QOQ% change

44.00

44.47

41.94

2.06

4.67%

0.09

0.79

1.64

1.22

0.92

45.72

46.47

43.79

1.94

4.24%

0.18

0.61

1.88

0.83

0.61

75.30

75.98

72.84

2.45

-42

-41

-42

-16

-4

3.26%

+ 141 bps

+ 43 bps

0.33

0.54

2.27

1.73

1.27

-72

-28

-29

-28

-48

-13

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q S

“MANAGEMENT COMMENTARY

Y R A T N E M M O C T N E M E G A N A M

COMMENTING ON THE Q3 FY25 PERFORMANCE, SANJAY SHAH, EXECUTIVE DIRECTOR, SAID

“Steel imports from China reached a seven-year high between April and December 2024, reducing the market share of domestic steelmakers. Without robust trade protection measures, cheaper imports are likely to persist, impacting the steel industry and allied businesses like ours. However, since October 2024, we have observed strong signs of a trend reversal in our core steel business. We anticipate that the steel downcycle, which began in 2022, is nearing its end.

In our cored wire business, we have seen an improvement in Q3 volumes, a trend that continues into January 2025. In a highly competitive environment, our technological edge and extensive experience have provided us with a significant advantage and we managed to increase our market share. We expect this positive trend to continue.

The aluminium flipping coil business has started showing positive EBITDA in the domestic market, supported by local sourcing (as against imports). We are scaling it up cautiously. High aluminium scrap prices and disrupted global supply chains have compressed margins across the industry. To protect profitability, we have scaled down operations rather than engage in unprofitable price competition. Until international prices normalize, we will continue to avoid importing scrap. Once conditions stabilize, we plan to resume operations at full capacity.

Our welding division demonstrated strong momentum, achieving revenues of Rs 1.6 crore in Q3 FY25. Volumes grew by 15% quarter-on-quarter to 145 tonnes, with a price realization of Rs 1.10 lakh per tonne. Demand from the building and construction industries, railways, heavy engineering, and the energy sector is driving growth in India’s Rs 3,000 crore welding consumables market. Currently, half of this fragmented market is controlled by unorganized players. We are expanding our distribution network and have a dedicated welding team. With our brand’s quality and service excellence, we are confident in capturing a significant share as we extend our reach.

In our biotechnology venture, we are close to finalizing the specific biotech areas to prioritize from a range of possibilities. We see substantial potential in health and nutrition supplements, an evolving market in India with strong growth prospects compared to the western world. This also presents a promising opportunity for export-driven business.

The year-over-year decline in company revenues for the December quarter of FY25 is attributable to our strategic decision to temporarily scale down our aluminium business in response to margin pressures. However, our long-term vision remains robust: we aim to transform from a steel consumables supplier into a diversified company with strong footholds in cored wire, welding consumables, and biotechnology. As we continue to innovate and diversify, we are committed to delivering sustainable value to shareholders. Our strategy of building multiple growth engines positions us for resilience and long-term success in an evolving market”.

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

TOPICS

FINANCIAL RESULTS

BUSINESS UPDATE

WELDING

BIOTECHNOLOGY

COMPANY BACKGROUND

FINANCIAL TRENDS

SUSTAINABILITY INITIATIVES

SLIDE NO.

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

INDIAN IMPORTS OF FLUX CORED WIRE IN MT

1 1 9 9 3

1 9 1 7 4

1 2 6 2 5

2020

2021

2022

~14,500+ TPA 3Y AVERAGE IMPORT QUANTITY

1,200+ TPA INITIAL QUANTITY ANNOUNCED BY SML

OVERVIEW

Flux Core Arc Welding is a type of welding process using consumable electrode that contains flux around it Flux melts together with the electrode during the welding process and shields the joint Presently, India has little to none manufacturing capacity for this product range Its needs are met from imports, predominantly from China, thus offering an import substitution opportunity

APPLICATIONS

As a Welding consumable in various industries including Shipbuilding and Construction Usable on plain, carbon, alloy, stainless as well as duplex steel Used for Hardfacing and Surfacing Mechanical Industries

CURRENT PROJECT STATUS

We achieved revenues of Rs 1.6 crore in Q3 FY25. Volumes grew by 15% quarter-on-quarter to 145 tonnes, with a price realization of Rs 1.10 lakh per tonne. Currently, we sell 60 tonnes of flux- cored arc welding consumables per month, with plans to increase it to 100 tonnes in the next few months. We aim to achieve annual sales of Rs 25 crore within two years.

UPDATE ON

We have capacity to produce 2,500-3,000 tons of flux cored wire annually. We currently manufacture seven grades across three categories—carbon steel, stainless steel, and hardfacing. The Company has ‘BIS certification’ for its Flux Cored products

E T A D P U S S E N I S U B

WELDING BUSINESS

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

WHAT IS BIOTECHNOLOGY?

Biotechnology is the branch of applied science that uses living organisms and their derivatives to produce products and processes. These products and processes feature in healthcare, medicine, biofuels, and environmental safety.

India’s BioEconomy crossed an estimated $92 billion in 2022 and the policy makers and industry together have now set an ambitious target of $150 Bn by 2025, and $300 Bn by 2030 with a CAGR of ~17%.

This is possible by 2030 when the BioPharma sector races to hit the $120-125 billion mark and each of the three segments—Bioagri, Bioindustrial and BioServices cross the $60 billion mark.

We are close to finalizing the biotech areas we plan to initially venture into, from among various possibilities. We see a significant export opportunity in health & nutrition supplements. Along with that, a state of the art fermentation facility offers a lot of flexibility, including CDMO (Contract, Development and Manufacturing Organization) business which holds a lot of potential.

CURRENT PROJECT STATUS

E T A D P U S S E N I S U B

UPDATE ON

We have invested Rs 50 lakh to date, primarily for a pilot R&D facility in Nagpur including basic equipment and advisor salaries.

BIOTECH NOLOGY

BIOTECH

FOCUS AREAS & VISION

THREE PRONGED APPROACH

01 INDUSTRIAL ENZYMES

WHAT IS AN ENZYME? Enzymes are biologically active proteins derived from living organisms such as bacteria, fungi and plants. They serve as biocatalysts to accelerate and optimize a wide range of industrial applications.

FOCUS Alternate Energy: Biofuel production like biogas and ethanol due to its higher efficiency and lesser environmental impact. Food & Beverage to enhance quality, flavor, texture & nutritional value of products. Laundry Enzymes in detergents and cleaning products for deeper cost-effective cleaning. Wastewater Treatment by breaking organic pollutants and improving water quality.

02 MICRO- NUTRIENTS

E T A D P U S S E N I S U B

03 PREBIOTICS & PROBIOTICS

WHAT IS A MICRO-NUTRIENT? Micronutrients describe the vitamins and minerals necessary for optimal health. They are critical for important functions of the body. Biotechnologies are available to improve the amount and availability of nutrients in plant crops.

FOCUS Soil health: Soil enzymes assist in conversion of organic matter into nutrients that plants use to grow. Health and Animal Health Supplements: Micro nutrients–tablet, nutraceutical systemic dietary enzymes promote general body support. Animal Supplements: Cutting-edge animal diets by optimizing utilization of limited feed resources

WHAT IS PREBIOTICS & PROBIOTICS? Probiotics are good bacteria that live in your gut and help break down food, support gut health, and boost your immunity. Prebiotics, on the other hand, are the food for your good bacteria, helping them thrive and multiply.

FOCUS Importance of Gut Health in immunity development, active health food and numerous nutraceutical applications Animal Nutrition for digestion improvement, immunity development and to increase the nutritional level of feed

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

TOPICS

FINANCIAL RESULTS

BUSINESS UPDATE

COMPANY BACKGROUND

DESRAJ BANSAL GROUP

SARTHAK METALS SNAPSHOT

MILESTONES

PRODUCT CATEGORIES

INFRASTRUCTURE

FINANCIAL TRENDS

SUSTAINABILITY INITIATIVES

SLIDE NO.

CLIENTS

WAREHOUSING CAPABILITIES

LEADERSHIP

BOARD OF DIRECTORS

₹650+ Cr

leading business group with interests in the Metals and Energy sector

5 state-of-the-art fully-functional

Manufacturing facilities in Bhilai, Chhattisgarh housed under

P U O R G L A S N A B J A R S E D

* Provisional Figure

3 GROUP

ENTITIES

SARTHAK METALS LTD SARTHAK ENERGY PVT LTD BANSAL BROTHERS

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

DESRAJ BANSAL GROUP

GROUP ENTITIES

P U O R G L A S N A B J A R S E D

SARTHAK METALS LTD

CORED WIRES & ALUMINIUM FLIPPING COIL

10,000 TPA

CORED WIRES CAPACITY

15,000 TPA

ALUMINIUM FLIPPING

“SARTHAK” IS PART OF THE 650+ Cr DB GROUP

INDIA’S LEADING MANUFACTURER & EXPORTER OF CORED WIRES & ALUMINIUM FLIPPING COILS

Being an experienced and quality conscious manufacturer, Sarthak is the preferred supplier to some of India’s largest steel units.

Headquartered in Bhilai, Chattisgarh with its state-of-the-art ISO 9001-2000 certified manufacturing units, the company is strategically located in close proximity to a critical steel hub in the country

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

425+ COMMITTED WORKFORCE

10% REVENUE CAGR FY 19-24

30+ ACTIVE CLIENTS

19% PAT CAGR FY 19-24

SARTHAK ENERGY PVT LTD

SOLAR ENERGY

2 MW

SOLAR POWER PLANT

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

GROUP ENTITIES

P U O R G L A S N A B J A R S E D

BANSAL BROTHERS

FERROALLOYS 6,000 TPA

FERROALLOYS CAPACITY

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

GROUP ENTITIES

P U O R G L A S N A B J A R S E D

1995

INCORPORATED

with an industrial gases unit producing

industrial oxygen and carbon dioxide

catering to industries units in its vicinity

S E N O T S E L I M

2002

FIRST CORED WIRE MILL

In efforts to cater to the growing

metallurgical industry in the country,

commenced its first cored wire mill built

in-house

2008

COMMENCED PRODUCTION OF ALUMINIUM FLIPPING COILS

with the first mill built in-house

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

2012

STARTED MANUFACTURING CORED WIRE FEEDER MACHINES

MILESTONES

2023

ENTERED FLUX CORED WIRE BUSINESS WITH HUGE IMPORT SUBSTITUTION OPPORTUNITY

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

2024

VENTURED INTO BIOTECH

Starting with alternate energy production

of bioethanol and biogas in Nagpur,

2018

COMMENCED BACKWARD INTEGRATION FOR FLIPPING COILS

Started producing aluminium wire rods

Maharashtra

2017

IPO & BSE LISTING

Raised funds through its initial public

offer and got listed on BSE SME

S E N O T S E L I M

MILESTONES

PRODUCT CATEGORIES

CORED WIRES

Cored Wires are a product of wire injection technology of steels. They consist of steel tubes (wires) filled with various alloys that are injected in molten metal for introducing different characteristic in the metal.

Some key cored wires manufactured by Sarthak are – Calcium Silicide, Calcium Iron, Calcium Aluminium Iron, Calcium Solid Wire, Lead Cored Wire, Ferro Titanium, Carbon, Ferro Boron, Magnesium Ferrosilicon, Nitride Manganese, Ferro Niobium.

Key functions of cored wires is steel refining, alloy addition, deoxidation, desulphurization, denitrification, etc.

WHY CORED WIRES? Cored wires (or wire injection technology) are a substitute to single-shot addition of alloys into molten metal. Cored wire helps in uniform and homogeneous mixing of alloys in the ladle. It is a more accurate and efficient process of adding chemical elements in the casting. Cored wires have become a indispensable part of metallurgical plants today.

S E N O T S E L I M

ALUMINIUM FLIPPING COILS

Aluminium flipping coils are used in steel manufacturing process for de-oxidising of molten steel, and as a alloying element for manufacturing specialized steel.

Key functions of aluminium wire are de- oxidising, grain refining, nitride forming and alloying of steel.

WIRE FEEDER MACHINES

Machines that are designed to inject cored wires into molten steel for metallurgical process control. The Company offers a wide range of customized machines, with 2 and 4 strand options that can draw wires from 5 to 15 mm diameter with a speed of up to 300 meters per minute.

FLUX CORED WIRE

Flux Core Arc Welding, a type of welding process using consumable electrode that contains flux around it Flux melts together with the electrode during the welding process and shields the joint. It is used widely in various industries including construction, fabrication workshops and shipbuilding.

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

Manufacturing Capacity (Double Shift)

CORED WIRES

ALUMINIUM FLIPPING COILS

10,000 TPA

04 Manufacturing Lines

15,000 TPA

Expanded in FY23

02 Manufacturing Lines

Built in-house specific to company needs equipped with sophisticated machinery and testing equipment

03 State-of-the-art manufacturing facilities strategically located in Bhilai,

Chhattisgarh in proximity to main clients

~4,50,000 SQ. FT.

Cumulative plot area with land availability for future expansion

S E N O T S E L I M

ISO 9001-2008 CERTIFIED

Equipped with a fully-functional chemical lab and atomic absorption spectrophotometer for testing and QC of raw materials & finished product

INFRA STRUCTURE

PRODUCTION TRENDS IN TPA

5 2 9 9

1 8 3 6

5 0 7 6

9 6 5 8

3 2 6 5

6 9 1 7

5 0 5 4

9 1 6 5

3 6 3 4

6 4 4 4

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

FY20

FY21

FY22

FY23

FY24

Cored Wire

Aluminium Flipping Coil

INDIA

CLIENT PROFILE

STEEL PLANTS FABRICATION UNITS FOUNDRIES

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

& BEYOND

S E N O T S E L I M

85% REPEAT

BUSINESS

SHADED IRON & STEEL CO. LLC

40% TOP 5 CLIENTS SALES

CONTRIBUTION

CLIENTS

RELATIONSHIPS

20 10+ YEAR 05 5+ YEAR

RELATIONSHIPS

CORED WIRES

1,500 SQ. MT. MATERIAL STORAGE SPACE

2,000+ TONNES EQUIVALENT TO 3 MONTHS’ BUFFER

ALUMINIUM FLIPPING COILS

2,800 SQ. MT. MATERIAL STORAGE SPACE

4,000+ TONNES EQUIVALENT TO 4 MONTHS’ BUFFER

SUFFICIENT SPACE TO STOCK FINISHED PRODUCTS AS WELL

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

S E N O T S E L I M

State-of-the-art facilities

Ensuring uninterrupted and reliable supply of metallurgical solution

Establishing Sarthak as a preferred supplier with leading Indian steel mills

WAREHOUSING CAPABILITIES

LEADERSHIP

ANOOP KUMAR BANSAL

SANJAY SHAH

MAYUR BHATT

MANAGING DIRECTOR

WHOLE-TIME DIRECTOR

WHOLE-TIME DIRECTOR & CEO

Mr Bansal has a Bachelors in Commerce degree

Mr Shah is a Whole-Time Director and the head of

Mr Bhatt is a Whole-Time Director and the Chief

from Nagpur, as Managing Director he has been

Marketing team at

Sarthak. He

has been

Executive Officer of the Company. He is an essential

instrumental

in strategic planning. He brings

instrumental

in creating the domestic business of

link between the production and sales functions of

innovative

commercial

ideas,

execution-led

Sarthak, and getting the Company empaneled with

the organisation; he also manages the day-to-day

experience, and vision to the table, which has

leading steel

institutions of the country, and as a

business and financial activities of the Company. He

contributed to the Company’s success. He is also

result Sarthak works with the largest Indian steels

also contributes to raw materials management. His

entrusted with looking after DB Group’s ferroalloys

mills today.

contributions have been of great value to the

S E N O T S E L I M

division and the Company’s industrial gases division

(which has been sold in 2021). In addition, he leads

the CSR initiatives at the Company.

Company.

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

BOARD OF DIRECTORS

MR SUNIL KUMAR AGARWAL

MS RAMA KOHLI

MR SUNIL DUTT BHATT

MR DWADASI VENKATA GIRI

CHAIRMAN & NON- EXECUTIVE, NON- INDEPENDENT DIRECTOR

NON-EXECUTIVE, INDEPENDENT WOMAN DIRECTOR

NON-EXECUTIVE, INDEPENDENT DIRECTOR

S E N O T S E L I M

Mr Agarwal holds a Bachelors Degree in

Ms Rama Kohli holds a Bachelors Degree

Engineering (Mechanical) (Honors). In his

in Science from Pt. Ravishankar Shukla

past

roles, Mr Agarwal has been

University, Raipur.

In addition, she has

associated with GCET Raipur,

Indian

also completed her PGDBM from Pt.

Railways Traffic Services, and served

Ravishankar University, Raipur. She is

Ms Sunil Bhatt has more than 35 years

Mr Dwadasi Venkata Giri has completed

of work experience as a part of the

his Post Graduation (M.Com) from Pt.

department of Instrument and Weighing

Ravishankar Shukla University, Raipur.

in Bhilai Steel Plant, SAIL. He recently

He also completed LLB and CA IIB from

retired

2020

and

joined

the

Raipur. He has vast experience in the

prestigious

roles

such as Divisional

currently

undertaking

various

Company's board in 2021.

banking and finance domain.

Railway Manager, Chief Commercial

management advisory activities.

Manager SEC Railway, Chief Operating

Manager and additional member to the

Ministry of Railways.

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

TOPICS

FINANCIAL RESULTS

BUSINESS UPDATE

COMPANY BACKGROUND

FINANCIAL TRENDS

5 YEAR FINANCIAL TRENDS

SHAREHOLDER VALUE CREATION

OPERATIONAL EFFICIENCY METRICS

SUSTAINABILITY INITIATIVES

SLIDE NO.

5 YEAR FINANCIAL TRENDS

REVENUE FROM OPERATIONS

( ₹ I N C R O R E S )

PROFIT AFTER TAX

( ₹ I N C R O R E S )

EBITDA & EBITDA MARGINS

( ₹ I N C R O R E S & I N % )

EQUITY & DEBT TO EQUITY

( ₹ I N C R O R E S & T I M E S )

7 1 4 1 2

1 7 1 2 2

0 3 7 5 4

3 4 8 0 4

7 1 5 0 3

2 6 4

9 9 7

8 4 7 2

6 7 9 2

3 8 3 1

50.0

45.0

40.0

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0

10.6%

12.0%

140

9.1%

7.3%

7.1%

4.7%

3 2 1

1 6 1

5 1 4

1 3 4

8 1 2

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

120

100

0.59

0.51

9 0 6 1 1

0.29

8 8 5 4

0 1 3 5

4 9 7 7

9 9 4 0 1

0.00

FY20

FY21

FY22

FY23

FY24

FY20

FY21

FY22

FY23

FY24

FY20

FY21

FY22

FY23

FY24

FY20

FY21

FY22

FY23

FY24

EBITDA (Exluding OI & EI)

EBITDA Margin

Equity

Debt to Equity

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

0.7

0.6

0.5

0.4

0.3

0.2

0.1

ROCE IN %

DIVIDEND PER SHARE IN ₹

SHARE PRICE SINCE LISTING* V/S BSE SENSEX SHARE PRICE (INDEXED) PERFORMANCE

Sarthak Metals

Sensex

1 0 0 0 %

1 4 8 9 %

3 5 2 6 %

2 8 3 5 %

1 1 9 1 %

0 5

2 2 1

FY20 FY21 FY22 FY23 FY24

400

300

200

100

*Since Nov 25, 2021 listing on BSE Main Board

SHAREHOLDING PATTERN

0.16% FIIs

30.99% PUBLIC

168

132

68.85% PROMOTERS

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

S E N O T S E L I M

SHAREHOLDER VALUE CREATION

OPERATIONAL EFFICIENCY METRICS

WORKING CAPITAL IN DAYS

INVENTORY DAYS IN DAYS

ASSETS TURNOVER RATIO IN TIMES

TRADE RECEIVABLES TURNOVER RATIO IN DAYS

S C R T E M Y C N E I C I F F E L A N O I T A R E P O

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

2 4

7 5

8 4

8 6

9 7

2 3

9 4

3 2

3 1

4 2

2 3

7 2

4 4

6 3

7 2

1 4

7 4

6 4

8 4

FY20

FY21

FY22

FY23

FY24

FY20

FY21

FY22

FY23

FY24

FY20

FY21

FY22

FY23

FY24

FY20

FY21

FY22

FY23

FY24

TOPICS

FINANCIAL RESULTS

BUSINESS UPDATE

COMPANY BACKGROUND

FINANCIAL TRENDS

SUSTAINABILITY INITIATIVES

SLIDE NO.

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

SUSTAINABILITY INITIATIVES

GOING GREEN WITH BIOTECHNOLOGY

USAGE OF ALUMINIUM SCRAP

SOLAR POWER

Enzymes offer a sustainable alternative to traditional

Production of about 75% of Aluminium Flipping Coil of

With 400 KW of renewable energy used,

chemical processes due to their biodegradability,

Sarthak Metals is from usage of Aluminium scrap. Producing

the company demonstrates the group’s

renewability and minimal environmental impact.

them from ores is very energy-intensive.

commitment to sustainable practices,

while remaining cost-competitive in an

There is growing demand for processed and convenience

Recycling shifts the balance towards higher sustainability as

era of rising energy cost.

foods, coupled with the need for natural and sustainable

food additives.

Moreover, increasing focus on reducing greenhouse gas

emissions and finding sustainable alternatives to fossil fuels,

has fuelled demand for enzymes in the production of

biofuels, such as ethanol and biogas, by converting biomass

into usable forms of energy.

ENERGY NEEDED TO MELT ALUMINIUM

FROM SCRAP IS ONLY

of that consumed in ore reduction.

This renewable energy source will not

only help substitute a portion of our

energy consumption but also result in

approximately a 50% reduction in

electricity expenses due to captive

consumption.

S E V I T A I T I N

Y T I L I A B A N A T S U S

N O I T A T N E S E R P S G N N R A E 5 2 Y F 3 Q

GET IN TOUCH

ANIRUDH SINGHAL Sarthak Metals Limited cfo@sarthakmetals.com

PRATIK JAIN Sarthak Metals Limited cs@sarthakmetals.com

MUTHUKUMAR K Wisdom IR muthukumar@wisdomsmith.com +91 9867191576

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This document which has been prepared by Sarthak Metals Limited (the “Company”, “Sarthak”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. This document has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Document. This Document may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Document is expressly excluded. Certain matters discussed in this Document may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Document. The Company assumes no obligation to update any forward-looking information contained in this Document. Any forward-looking statements and projections made by third parties included in this Document are not adopted by the Company and the Company is not responsible for such third-party statements and projections.

Investor Update: Addressing Key Questions

Q1. What

the macroeconomic outlook

for your

steel-linked business?

Our core business, which includes cored wire and aluminium flipping coil, is fundamentally

strong but cyclical, as it is closely tied to India’s economic growth. Slower GDP growth—

projected at 6.4% in FY25, the lowest in four years—impacts steel production and,

consequently, our sales.

Additionally, steel imports from China have reached a seven-year high in Apr-Dec 2024,

reducing the market share of domestic steelmakers. Combined with capacity expansion across

the industry, capacity utilization is expected to drop to a four-year low of 78% in FY25 (as per

ICRA).

Global trade policies, such as protectionist measures from Trump 2.0, could further influence

this dynamic. Without strong trade protection measures, cheaper imports will likely persist,

affecting the steel industry and allied businesses like ours.

However, there is a silver lining. Since October 2024, we have observed strong signs of a trend

reversal in our core steel business. Both cored wire and welding consumables have been

recording robust volumes, a trend that has continued into January 2025. We expect this positive

momentum to persist as we anticipate that the steel downcycle, which began in 2022, is nearing

its conclusion.

In parallel, India's trade dynamics have exhibited notable shifts in recent months, reflecting

both resilience and emerging challenges. Notably, there has been an uptick in cargo handling

at major ports and a significant jump in iron ore imports. Moreover, Budget 2025's allocation

of INR 11.2 lakh crore for Capex, marking a 10% increase from the previous fiscal year, is

expected to stimulate infrastructure development, thereby driving domestic steel demand.

Q2. Can

you

summarize

the

financial

performance

for Q3FY25?

Our Q3FY25 revenue was approximately INR 44 crore; down 4% on a q-o-q basis. On a y-o-

y basis revenue was down 42% from INR 75 crore in the previous year. This decline is due to

our strategic decision to temporarily exit the unprofitable aluminium flipping coil business.

Cored wire revenue were INR 31 crore during the quarter, while aluminium flipping coil

revenue was INR 9 crore.

Our EBITDA (excluding Other income and Extraordinary income) was Rs 2.1 cr in Q3FY25

– up 6% on a q-o-q basis on the back of savings in material cost. EBITDA margins were at

4.7% in Q3FY25 – showing fourth quarter of consecutive improvement emphasizing our great

cost control measures. EBITDA margins a quarter before was at 4.2%.

Profit After Tax (PAT) were up 48% to INR 1.2 crore in Q3FY25 on the back of savings in

material costs as well as that of taxes. On a y-o-y basis, PAT was down 29% due to fall in

revenue and scale of our business. Despite these challenges, our debt-free balance sheet, with

a cash position of INR 27 crore, provides ample financial flexibility for future investments.

Q3.

How

the

cored

wire

business

performing?

The cored wire business showed resilience, with Q3FY25 revenue growing 11% year-on-year

to INR 31.0 crore even when realizations were down 4% to INR 2.55 lakh per metric tonne

(MT). In Q3FY25, volumes rose 15% year-on-year to 1,216 tonnes but were 2% lower

sequentially.

The business is showing strong signs of recovery, with improvements in volumes. Despite

highly competitive environment, our technological edge and extensive experience have

provided us with a significant advantage and we managed to increase our market share. We

anticipate this volume momentum to persist, barring any unforeseen disruptions.

Q4. Can you provide details on

the aluminium

flipping coil business?

Revenue from aluminium flipping coils fell 75% year-on-year to INR 9.0 crore in Q3FY25,

with volumes declining 80% to 350 tonnes. However, price realizations have been improving

consecutively over the past five quarters. In Q3FY25, price realization moved sharply q-o-q by

13% to INR 2.58 lakh per MT and 25% on a y-o-y basis.

The aluminium flipping coil business has started showing positive EBITDA in the domestic

market, supported by local sourcing (we usually import aluminium scrap). We are scaling it up

cautiously. However, high aluminium scrap prices and disrupted global supply chains have

compressed margins across the industry. To protect profitability, we have scaled down

operations instead of engaging in unprofitable price competition. Until prices normalize in the

international market, we will avoid importing scrap.

We prioritize profitability and will exit businesses that do not add value.

Q6. How is the new welding consumables business progressing?

Our welding division demonstrated strong momentum, achieving revenues of INR 1.6 crore in

Q3 FY25. Volumes grew by 15% quarter-on-quarter to 145 tonnes, with a price realization of

INR 1.10 lakh per tonne.

We are expanding our distribution network and have a dedicated welding team in place.

Currently, we sell 60 tonnes of flux-cored arc welding consumables per month, with plans to

increase it to 100 tonnes in the next few months. We aim to achieve annual sales of INR 25

crore within two years.

With an annual production capacity of 2,500-3,000 tonnes, we are well-positioned in the

rapidly growing INR 300 crore flux-cored wire market, which could reach INR 1,000 crore in

3–5 years.

We currently manufacture seven grades across three categories—carbon steel, stainless steel,

and hardfacing. The Company has ‘BIS certification’ for its Flux Cored products.

Q7. What is the status of the biotech business? What is your competitive edge?

We have partnered with the Council of Scientific & Industrial Research (CSIR) to develop

industrial bio-enzymes, securing access to microbial cultures for producing enzymes like

cellulase, amylase, and glucoamylase. These enzymes enhance efficiency in bioethanol and

biogas production.

Our exclusive partnership with CSIR gives us a competitive edge in developing sustainable

enzyme technologies.

Q8. Have you identified the focus areas?

We are close to finalizing the biotech areas we plan to initially venture into, from among

various possibilities. We see a significant opportunity in health & nutrition supplements. This

market is still evolving in India, with strong growth potential when compared to the western

world which in turn offers promising export business. Rising awareness and income stimulates

human expenditure and better lifestyle.

Along with that, a state of the art fermentation facility offers a lot of flexibility, including

CDMO (Contract, Development and Manufacturing Organization) business which holds a lot

of potential.

We will be planning a 100% compliant facility with a lot of value addition and end-to-end

support to our customers which will offer us many opportunities.

Q9.

When

will

biotech

revenues

start?

We are targeting industrial enzymes for distilleries, focusing on cellulose degradation for

bioethanol production. While the market is competitive, government support for sustainability

and export opportunities offer significant growth potential. We see this as a promising venture

with strong long-term prospects. It is challenging to establish a timeline for generating

revenues, as the project is currently in the pilot phase.

Q10. How much

capex

has

been

allocated

biotech

far?

As of now, we have invested INR 50 lakh, primarily for a pilot R&D facility in Nagpur,

including basic equipment and advisor salaries.

Q11.

What

your

long-term

growth

strategy?

To mitigate risks associated with our cyclical core business, we have adopted a diversification

strategy. By entering new industries, geographies, and product lines, we aim to enhance

stability and unlock new growth opportunities.

Our transition from a steel consumable supplier to a diversified player in flux-cored wire and

biotechnology enables us to balance investment-driven and consumption-driven sectors. This

dual focus positions us to derisk the business and deliver sustained growth in shareholder value.

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