Vardhman Special Steels Submits Monitoring Agency Report for Quarter Ended March 31, 2026

Vardhman Special Steels Limited has filed its Monitoring Agency Report for the quarter ended March 31, 2026, with BSE Limited and the National Stock Exchange of India. The submission, dated May 04, 2026, was made pursuant to Regulation 32(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with Regulation 162A of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The report was prepared by Crisil Ratings Limited, the appointed Monitoring Agency, in accordance with the Monitoring Agency Agreement dated June 04, 2025.

Issue Overview

The report pertains to the utilization of proceeds raised by the company through a Preferential Issue of equity shares. The key details of the issue are summarised below:

Parameter: Details Issue Period: 4th July, 2025 Type of Issue: Preferential Issue (PI) Type of Securities: Equity Shares Issue Size: Rs 3,849,088,060 Promoter: Vardhman Textiles Limited Industry/Sector: Steel

Utilization of Issue Proceeds

The Monitoring Agency confirmed that all utilization during the quarter is as per the disclosures in the Notice to Shareholders, with no material deviations reported. The following table presents the progress in deployment of issue proceeds across the three designated objects as at March 31, 2026:

Item Head: Amount as Proposed (Rs) Utilized at Beginning of Quarter (Rs) Utilized During Quarter (Rs) Utilized at End of Quarter (Rs) Total Unutilized (Rs) Capital expenditure – greenfield steel plant, Ludhiana, Punjab: 1,349,088,060 - - - 1,349,088,060 Capital expenditure – existing plant: 1,000,000,000 191,475,055 147,985,226 339,460,281 660,539,719 Repayment of working capital borrowing: 1,500,000,000 1,500,000,000 - 1,500,000,000 - Total: 3,849,088,060 1,691,475,055 147,985,226 1,839,460,281 2,009,627,779

A note accompanying the report states that during the quarter ended March 31, 2026, the company transferred Rs 12,91,02,888 from its monitoring account to its current accounts for utilization towards capital expenditure requirements at the existing plant, for operational ease. The transferred proceeds were fully utilized as at the end of the reported quarter.

Deployment of Unutilized Proceeds

The unutilized proceeds of Rs 2,009,627,779 were deployed across fixed deposit and mutual fund instruments as at March 31, 2026. The details of these deployments, including earnings and market values, are as follows:

Instrument: Amount Invested (Rs) Maturity Date Earnings as on March 31, 2026 (Rs) Return on Investment Market Value (Rs) Fixed Deposit – ICICI Bank: 499,088,060 01.04.2026 22,438,315 6.00% 521,526,375 SBI Savings Fund – Direct Growth: 450,000,000 - 12,009,833 5.52% 462,009,883 Bandhan Money Market Fund – Direct Plan: 406,707,446 - 11,465,010 5.82% 418,172,456 Kotak Money Market – Direct Growth: 450,000,000 - 12,436,159 5.72% 462,436,159 SBI Liquid Fund Direct Growth: 203,832,273 - 1,557,632 4.54% 205,389,905 Total: 2,009,627,779 - 59,907,000 - 2,069,534,778

Monitoring Agency Observations

Crisil Ratings Limited, in its capacity as Monitoring Agency, confirmed the following key observations for the quarter ended March 31, 2026:

Utilization compliance: All utilization during the quarter is as per the disclosures in the Notice to Shareholders.

Deviation from objects: Not applicable.

Range of deviation: Not applicable.

Material deviations: No major deviation observed over earlier monitoring agency reports.

Means of finance: No change in the means of finance for the disclosed objects.

Delay in implementation: Not applicable, as confirmed on the basis of a management undertaking and certificate dated April 24, 2026, issued by M/s S.S. Periwal & Co., Chartered Accountants (Firm Registration Number: 001021N).

General Corporate Purpose utilization: Not applicable.

The report was signed by Shounak Chakravarty, Director, Ratings (LCG), on behalf of Crisil Ratings Limited. The certificate relied upon for the preparation of this report was issued on April 24, 2026, by M/s S.S. Periwal & Co., Chartered Accountants (Firm Registration Number: 001021N), Peer Reviewed Independent Chartered Accountants. The filing was submitted to the exchanges by Sonam Dhingra, Company Secretary of Vardhman Special Steels Limited.

Vardhman Special Steels Limited has published its audited financial results for the quarter and year ended March 31, 2026, pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The results were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on April 28, 2026.

Q4 FY26 Financial Performance

The fourth quarter demonstrated exceptional growth with net profit after tax increasing 72.20% year-on-year to ₹3,397.94 lakh (₹33.98 crore) from ₹1,973.21 lakh (₹19.73 crore) in Q4 FY25. Total income from operations for Q4 FY26 reached ₹46,837.21 lakh (₹468.37 crore) compared to ₹43,522.26 lakh (₹435.22 crore) in the corresponding quarter of the previous year, representing a 7.61% increase.

Q4 Performance Q4 FY26 (₹ lakh) Q4 FY25 (₹ lakh) Change (%) Total Income from Operations 46,837.21 43,522.26 +7.61% Net Profit Before Tax 4,598.75 2,685.47 +71.25% Net Profit After Tax 3,397.94 1,973.21 +72.20% Basic EPS (₹) 3.52 2.42 +45.45%

FY26 Annual Performance

The company delivered robust annual performance with significant improvements across key financial metrics. Total income from operations for FY26 stood at ₹179,677.91 lakh (₹1,796.78 crore) compared to ₹179,352.31 lakh (₹1,793.52 crore) in the previous year. Net profit for the year increased 31.08% to ₹12,202.39 lakh (₹122.02 crore) from ₹9,308.81 lakh (₹93.09 crore) in FY25.

Financial Metric FY26 (₹ lakh) FY25 (₹ lakh) Change (%) Total Income from Operations 179,677.91 179,352.31 +0.18% Net Profit Before Tax 16,404.94 12,506.06 +31.17% Net Profit After Tax 12,202.39 9,308.81 +31.08% Paid-up Equity Capital 9,668.57 8,173.33 +18.31% Basic EPS (₹) 13.15 11.40 +15.35%

Management Guidance and Expansion Plans

During the earnings conference call held on April 29, 2026, Chairman and Managing Director Sachit Jain outlined the company's strategic vision and future growth plans. The company achieved record volumes of 225,000 tons in FY26, meeting its budget target. For FY27, management targets rolled product volumes of 250,000 tons to 255,000 tons.

The company has raised its EBITDA per ton guidance to ₹8,000 to ₹11,000 for the current year, up from the previous range of ₹7,000 to ₹10,000. Management further expects to increase this range to ₹9,000 to ₹12,000 over the next two years, driven by volume growth, cost efficiency, and process improvements.

Capital Expenditure and Capacity Expansion

Several key projects were commissioned in March 2026, including a reheating furnace that will improve rolling capacity to 270,000 tons of finished product and a solar plant that will generate 9 crore units of power annually. A new section of 210X210 has been introduced to improve productivity and product quality.

The company is pursuing environmental approval to increase melting production capacity from 300,000 tons to 360,000 tons. The application is expected to be submitted by June 2026, with a decision anticipated by March 2027. The brownfield expansion could be completed by the latter part of calendar year 2027.

Major upcoming projects include a new greenfield steel plant with capacity of 500,000 to 600,000 tons, targeted for commissioning by July 2029, and a forging plant expected to commence operations in January-March 2028. Total committed capex stands at approximately ₹2,600 crores.

Share Capital and Reserves

The company's paid-up equity capital stood at ₹9,668.57 lakh (₹96.69 crore) as of March 31, 2026, compared to ₹8,173.33 lakh (₹81.73 crore) in the previous year, reflecting an 18.31% increase. Other equity reserves increased significantly to ₹118,063.41 lakh (₹1,180.63 crore) from ₹71,618.49 lakh (₹716.18 crore) in FY25. The Board recommended a dividend of ₹3.50 per share on fully paid-up equity shares, subject to approval at the Annual General Meeting.

Strategic Direction

Management outlined plans to diversify the special steels portfolio into non-automotive segments over the next decade, targeting a 30% non-automotive and 70% automotive mix. New focus areas include railways, oil and gas, bearings, windmill shafts, ship shafts, and advanced materials for aerospace, defence, and nuclear applications. The company aims to position itself as a "supermarket of special steels" while maintaining focus exclusively on special steels and automotive forgings.

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