Date: August 12, 2026

Management Commentary Highlights

Carbon Segment Performance

  • Carbon segment volumes were approximately 10% lower year-over-year in Q2 FY2026 due to deferred shipments estimated at 10,000-15,000 metric tonnes
  • Utilization rate remained at 69%, consistent with Q1 FY2026 and calendar year 2025 average
  • Expect volumes to return to normal levels in Q3 FY2026 subject to logistics conditions
  • Plan to restart one kiln in the U.S. after a year-long outage toward year-end

Market Outlook and Strategy

  • Medium-term aluminum market expected to remain supported with China's 45 million tonnes per year production cap
  • Carbon represents approximately 15% of aluminum production cost
  • Pricing determined by regional supply-demand balance, raw material availability, logistics, and customer-specific conditions
  • Focusing on targeted small investments to increase production without compromising capital discipline

Advanced Materials Segment

  • Comprises Resins and Downstream Materials, Chemical Intermediates, and Engineered Products including battery materials
  • Growth supported by improved specialty end-market demand, better product mix, and cost-reduction measures
  • Partnership with major global producer of mesophase carbon micro-beads for battery industry
  • Joint development agreements with several major graphite companies

Expansion Projects

  • Planning new pitch production and distillation unit in India with first phase expected to commence operations in early 2028
  • Strategic rationale: enhanced supply reliability and improved logistics flexibility for regional customers

Financial Management

  • Working capital increased significantly in Q2 due to deliberate safety stock building for Indian calciners in response to Middle East disruptions
  • Increase driven mainly by higher inventory volumes rather than price increases
  • Working capital expected to moderate as supply chains normalize

Debt and Refinancing

  • Second lien notes trading at yield below current coupon, indicating improving credit profile
  • Evaluating refinancing opportunities to extend maturity, simplify capital structure, and reduce interest costs
  • Target net-debt-to-EBITDA ratio of approximately 3x over time based on normalized earnings
  • Priority for excess cash: reduce working capital loans first, then long-term debt reduction

Employee Expenses

  • 32% year-over-year increase mainly due to annual incentive provisions triggered by improved performance
  • Currency impact: USD appreciation of 10.7% and Euro appreciation of 13.5% against Indian Rupee
  • Increase represents normalization of performance-linked expenses rather than structural cost increase

Historical Performance Context

  • Company generated over ₹130,000 crore revenue over last decade-and-a-half with minimal cumulative profit after tax
  • More than half of operating cash flow consumed by interest costs
  • Historical challenges included acquisition-related leverage, market cycles, regulatory disruptions, and elevated financing costs

Forward-Looking Strategy

  • Three priorities: EBITDA normalization, balance sheet strengthening, and disciplined capital allocation
  • Focus on improved utilization, operational efficiency, market recovery, deleveraging, and working capital optimization
  • No current plans to raise equity under market conditions