Accord Transformer & Switchgear Ltd Management Discussions

GLOBAL ECONOMIC OUTLOOK

The global economy demonstrated resilience during FY2026 despite an increasingly complex geopolitical and macroeconomic landscape. According to the International Monetary Fund (IMF), global economic activity was shaped by two contrasting forces: geopolitical conflicts that disrupted energy markets and global supply chains, and rapid technological advancements, particularly in Artificial Intelligence (AI), which supported productivity, investment and demand across technology-intensive sectors. While geopolitical uncertainties moderated the pace of growth, accelerating AI adoption and continued investment in digital technologies provided meaningful support to economic activity.

The IMF projects global GDP growth of 3.0% in 2026 , improving to 3.4% in 2027 . Although growth remains below the average recorded during 2024-25, resilient labour markets, sustained business investments and technology-led expansion continue to underpin the global recovery. At the same time, renewed inflationary pressures, driven primarily by elevated energy and commodity prices, have prompted central banks to maintain a cautious monetary policy stance while balancing the need to support economic growth.

Global trade continued to adapt to shifting geopolitical realities, with businesses increasingly focusing on supply chain diversification, regional manufacturing hubs and operational resilience. Despite higher transportation costs and trade fragmentation, investments in digital infrastructure, automation and advanced manufacturing technologies remained strong, reflecting the growing emphasis on building more resilient and efficient global value chains.

Looking ahead, the global economic outlook remains cautiously optimistic. Continued investments in digital transformation, artificial intelligence, infrastructure development and productivity-enhancing technologies are expected to support medium-term growth. However, geopolitical developments, commodity price volatility, inflation dynamics and evolving trade policies remain key risks that could influence the pace of global economic expansion.

Source: International Monetary Fund (IMF)

INDIAN ECONOMIC OUTLOOK

India continued to strengthen its position as one of the worlds fastest-growing major economies during FY2026, supported by resilient domestic demand, expanding investment activity and sustained momentum across manufacturing and services. Despite global geopolitical uncertainties and evolving trade dynamics, the countrys strong macroeconomic fundamentals, favourable demographics and ongoing structural reforms enabled it to maintain a robust growth trajectory.

Indias real GDP is projected to grow by 7.6% during FY2026 , significantly outpacing most major global economies. Growth has been driven by rising private consumption, higher capital expenditure, increasing manufacturing activity and continued expansion of the services sector. Stable inflation, easing financing conditions and supportive policy initiatives have further strengthened investment sentiment and consumer confidence, creating a conducive environment for long-term economic growth.

The Governments continued focus on infrastructure development, digital transformation, semiconductor manufacturing, renewable energy, logistics enhancement and the Production Linked Incentive (PLI) schemes has reinforced Indias competitiveness as a global manufacturing and investment destination. Simultaneously, expanding Free Trade Agreements (FTAs), increasing foreign direct investment inflows and greater integration into global value chains have strengthened the countrys export potential and economic resilience.

Looking ahead, Indias long-term outlook remains favourable, supported by policy continuity, infrastructure investments, manufacturing- led growth and rapid digital adoption. While external challenges such as geopolitical tensions, commodity price fluctuations and global trade uncertainties warrant continued monitoring, Indias diversified economic base, expanding industrial ecosystem and reform-driven growth strategy position the country to sustain its long-term development trajectory.

Source: KPMG - Decoding the Indian Economy FY2026 INDUSTRY OVERVIEW

Global Power Industry Overview

The global electricity sector is entering a new phase of structural growth, driven by rapid electrification, decarbonisation and increasing adoption of renewable energy. According to the International Energy Agency (IEA), global electricity demand is projected to grow at an average annual rate of 3.6% during 2026-2030 , with demand expected to increase at a pace nearly 50% higher than the average recorded over the previous decade . Rising electricity consumption from industrial activities, electric vehicles, data centres and cooling requirements is accelerating investments in power generation, transmission and distribution infrastructure worldwide.

This structural shift is creating robust demand for electrical equipment, particularly transformers, switchgear and grid infrastructure that facilitate reliable and efficient power transmission. As countries continue to modernise ageing grids and integrate renewable energy sources, investments in transmission networks and power equipment are expected to remain a key growth driver for the industry.

Global Transformer Market

The global transformer market continues to witness healthy expansion, supported by increasing investments in renewable energy integration, grid modernisation, industrial electrification and expansion of electricity infrastructure. Demand is also being driven by rapid urbanisation, digitalisation, electric mobility and increasing deployment of data centres, all of which require reliable and efficient power

Business Overview Statutory Reports Financial Statements]

distribution systems. According to Fortune Business Insights, the transformer market is expected to maintain a strong growth trajectory over the coming years, underpinned by sustained investments in transmission and distribution infrastructure across both developed and emerging economies.

Indian Industry Overview

Indias power sector continues to evolve rapidly, supported by strong policy initiatives, expanding electricity demand and significant investments in transmission and distribution infrastructure. As of January 2026 , the countrys installed power generation capacity reached 520.51 GW , while improvements in generation, transmission and distribution have substantially strengthened power availability across the country. The Governments continued focus on electrification, digitalisation and infrastructure development has created a favourable environment for sustained sectoral growth.

The transition towards renewable energy is further accelerating investments in grid expansion and transmission infrastructure. According to IBEF, Indias power transmission sector is expected to witness a capital expenditure of approximately T9 trillion (US$94.32 billion) through 2032 , driven by renewable energy integration, expansion of high-voltage transmission networks and strengthening of grid reliability. The report also highlights growing export opportunities for Indian transformer manufacturers amid rising global demand and supply constraints across major international markets.

With increasing investments in renewable energy, industrial electrification, electric vehicle charging infrastructure and smart grid development, demand for transformers, switchgear and other electrical equipment is expected to remain robust. These structural growth drivers present significant long-term opportunities for engineering-led manufacturers with integrated manufacturing capabilities and strong execution expertise.

Key Industry Growth Drivers

Growth Driver	Industry Impact
Renewable Energy Expansion	Increased demand for transformers, substations and transmission equipment
Grid Modernisation	Up gradation of ageing transmission & distribution infrastructure
Industrial & Infrastructure Growth	Higher deployment of electrical equipment across industrial and commercial projects
Electric Vehicles & Data Centres	Growing requirement for reliable power distribution infrastructure
Government Infrastructure Capex	Significant investments in transmission corridors and grid expansion
Export Opportunities	Rising global demand for transformers amid supply shortages

Industry at a Glance

Key Indicator	Latest Position
Global Electricity Demand Growth (2026-2030)	3.6% CAGR
Additional Electricity Demand	~50% higher than previous decade
Indias Installed Power Capacity	520.51 GW (Jan 2026)
Planned Transmission Capex (India)	T9 Trillion (US$94.32 Billion) through 2032

Sources: https://www.iRa.org/rRports/Rler.trir.ity-7076/supply https://www.fortunRbusinRssinsights.ooiri/transforiTiRrs-iTiarkRt-106061

https://www.pib.gov.in/PrRssRRlRasRPagR.aspx RsPRID=7741R77&rRg=3&lang=1https://www.ibRf.org/nRws/india-s-powRr-transmission-

infrastructure-set-for-us-94-32-billion-upgrade-as-renewable-push-accelerates

COMPANY OVERVIEW

Accord Transformer & Switchgear Limited is an integrated electrical infrastructure solutions provider engaged in the design, engineering, manufacturing, supply, installation and commissioning of a comprehensive range of products catering to the power transmission and distribution ecosystem. The Companys diversified portfolio comprises power and distribution transformers, dry-type and special-purpose transformers, compact substations, switchgear panels, control panels, busduct systems and EV charging solutions, enabling it to serve a wide spectrum of applications across utilities, renewable energy, industrial manufacturing, commercial infrastructure and other critical sectors. Backed by engineering expertise and a customer-centric approach, the Company delivers customised solutions that ensure reliable, safe and efficient power distribution.

Established in 2014, Accord has evolved into a trusted engineering-led manufacturer by consistently expanding its product portfolio, strengthening manufacturing capabilities and building long-term customer relationships. Its integrated operating model combines product design, precision manufacturing, advanced testing and stringent quality assurance processes, enabling the Company to deliver application- specific solutions that meet diverse customer requirements while adhering to national and international quality standards. This integrated approach has enabled Accord to establish a strong reputation for technical excellence, execution capability and product reliability across domestic and international markets.

Integrated Product Portfolio

Accord has developed a diversified portfolio that enables customers to source end-to-end electrical infrastructure solutions from a single partner. Its offerings include:

• Power & Distribution Transformers

• Dry-Type & Special Purpose Transformers

• Compact & Skid-Mounted Substations

• LT & MV Control Panels & Switchgear

• Busduct Systems

• EV Charging Infrastructure Solutions

The Companys diversified product basket allows it to cater to multiple end-user industries while reducing dependence on any single product category and creating opportunities for cross-selling and long-term customer engagement.

Manufacturing & Engineering Excellence

The Company operates two modern manufacturing facilities at Bhiwadi, Rajasthan, supported by advanced production processes, testing infrastructure and quality control systems. With an installed manufacturing capacity exceeding 1,200 MVA , Accord continues to enhance its production capabilities to address growing demand from utilities, industrial customers and renewable energy projects. Its engineering- driven manufacturing capabilities enable the development of customised products designed to meet application-specific requirements while ensuring operational efficiency, safety and long-term reliability.

Market Presence & Customer Focus

Accord serves a diversified customer base comprising power utilities, EPC contractors, industrial manufacturers, commercial infrastructure developers and renewable energy companies. The Company has established its presence across India while gradually expanding into international markets, including the Middle East, the USA, Africa and Asia. Long-standing customer relationships, strong execution capabilities and a focus on quality continue to strengthen its market position and create opportunities across both conventional and emerging power infrastructure segments.

Growth Platform

Supported by strong engineering capabilities, an integrated manufacturing model and continuous investments in capacity expansion, Accord remains well positioned to benefit from Indias increasing investments in power transmission, distribution, renewable energy and grid modernisation. The Companys focus on innovation, product diversification, operational excellence and strategic partnerships provides a solid platform for sustainable long-term growth while creating value for customers, shareholders and other stakeholders.

OPERATIONAL PERFORMANCE

During FY2026, Accord Transformer & Switchgear Limited continued to strengthen its operational foundation by enhancing manufacturing capabilities, expanding customer engagements and executing strategic initiatives aligned with Indias rapidly evolving power infrastructure landscape. The Company remained focused on delivering technologically advanced and customised electrical infrastructure solutions while improving operational efficiency, manufacturing scalability and customer service capabilities. Its diversified business model enabled it to cater to utilities, industrial customers, EPC contractors, commercial infrastructure developers and renewable energy projects across multiple geographies.

Strengthening Engineering Capabilities

Engineering excellence continued to remain a key differentiator for the Company. During the year, Accord successfully completed the Dynamic Short Circuit Test for its 17.6 MVA Inverter Duty Transformer at the Central Power Research Institute (CPRI), validating the robustness, quality and reliability of its products. This achievement reinforces the Companys technical capabilities and enhances its credibility in delivering high-performance transformer solutions for industrial and renewable energy applications.

Expanding Market Presence

The Company further strengthened its market position through strategic customer approvals and partnerships. During FY2026, Accord received a five-year vendor registration approval from Uttar Gujarat Vij Company Limited (UGVCL) , enabling participation in utility tenders across Gujarat. It also secured vendor approval from Aditya Birla Renewables Limited , enhancing opportunities in utility-scale solar, wind and hybrid energy projects. Additionally, the Company signed a Memorandum of Understanding (MoU) with the Western Administrative District of the City of Moscow to explore opportunities across energy infrastructure, manufacturing, EPC projects and technology collaboration, supporting its long-term international growth strategy.

Manufacturing Expansion

As part of its long-term growth strategy, the Company acquired approximately 20,300 square metres of land at Khairthal-Tijara, Rajasthan , to facilitate future manufacturing expansion. The proposed development is expected to enhance production capacity through

Business Overview Statutory Reports Financial Statements)

additional manufacturing facilities, warehousing, testing infrastructure and allied operations, creating a scalable platform to support future business growth and increasing demand across the power sector.

Operational Highlights

Key operational developments during FY2026 include:

• Successfully completed the Dynamic Short Circuit Test at CPRI.

• Secured five-year vendor approval from UGVCL.

• Received vendor approval from Aditya Birla Renewables Limited.

• Signed an MoU with the Western Administrative District of the City of Moscow.

• Acquired 20,300 sq. m. of land for future manufacturing expansion.

• Strengthened engineering capabilities through integrated manufacturing and advanced testing infrastructure.

• Continued serving diversified customer segments across utilities, renewable energy, industrial manufacturing, commercial infrastructure, data centres, railways, smart cities, EPC projects and EV charging infrastructure.

f

FY26 BUSINESS VERTICAL WISE REVENUE BIFURCATION

3.0%

Raw material & others 3%

Building a Future-Ready Business

FY2026 also marked a significant milestone with the successful listing of the Company on the BSE SME Platform , strengthening its capital base and enhancing corporate governance standards. Combined with ongoing investments in manufacturing expansion, engineering excellence, product diversification and strategic partnerships, these initiatives have further reinforced Accords operational capabilities and positioned the Company to capitalise on emerging opportunities arising from Indias expanding power infrastructure, renewable energy investments and grid modernisation initiatives.

FINANCIAL HIGHLIGHTS

During FY2026, the Company continued to demonstrate operational resilience despite a moderation in revenue and profitability compared to the previous financial year. The performance reflects a calibrated business approach amid evolving market conditions, while maintaining healthy operating margins and a strong focus on execution efficiency. The Company remained committed to strengthening its operational capabilities, customer relationships and long-term growth initiatives.

The Company continued to maintain a healthy financial position supported by prudent cost management, disciplined working capital practices and a robust balance sheet. Strategic investments in business expansion and manufacturing capabilities during the year are expected to enhance operational capacity and support future growth opportunities. The management remains focused on improving operational efficiencies, expanding its customer base and delivering sustainable value creation over the long term.

Accord Transformer & Switchgear Limited

Particulars (K in Lakhs)	FY26	FY25
Revenue from Operations	7,006.92	7,902.25
Total Income	7,035.71	7,919.19
EBITDA	723.39	925.31
EBITDA Margin (%)	10.39%	11.68%
Profit Before Tax	605.75	798.05
Profit After Tax	450.43	594.37
PAT Margin (%)	6.40%	7.51%

KEY FINANCIAL RATIOS

SN	Ratio	FY26	FY25	Reason for Variance
1	Current Ratio (in times)	2.23	1.41	Current ratio improved primarily due to an increase in current assets, particularly trade receivables and cash & bank balances, along with a reduction in short-term borrowings and better working capital management.
2	Debt-Equity (in times)	0.18	0.55	The ratio change significantly due to repayment of borrowings and strengthening of the Companys net worth through retention of earnings, resulting in lower leverage.
3	Debt Service Coverage Ratio (in times)	0.81	0.75	The ratio remained largely stable. The marginal change was due to changes in debt servicing obligations and operating cash flows during the year
4	Return on Equity (%)	12.79	42.93	The ratio declined mainly due to an increase in shareholders equity coupled with lower profitability compared to the previous year.
5	Inventory Turnover Ratio (in times)	2.51	5.51	The ratio decreased primarily on account of higher average inventory levels maintained during the year to support execution of existing and upcoming orders.
6	Trade Receivables Turnover Ratio (in times)	3.22	4.48	The ratio declined primarily due to an increase in average trade receivables during the year, indicating a relatively slower conversion of receivables into revenue compared with the previous year.
7	Trade Payables Turnover Ratio (in times)	3.40	6.43	The ratio declined due to higher average credit period availed from suppliers and improved working capital management.
8	Net Capital Turnover Ratio (in times)	2.46	9.21	The ratio decreased mainly due to an increase in net working capital, particularly inventory and receivables, compared to the growth in revenue.
9	Net Profit Margin (%)	6.43	7.51	The marginal decline was primarily due to changes in product mix, increase in operating costs and competitive pricing during the year
10	Return on Capital Employed (%)	0.13	0.35	The ratio declined due to higher capital employed, driven by increased working capital and capital investments, while operating profit did not increase proportionately.

Business Overview Statutory Reports Financial Statements]

The Companys key financial ratios reflect a healthy financial foundation supported by a strengthened capital structure and prudent financial management. The significant improvement in liquidity and reduction in leverage demonstrate the Companys focus on maintaining financial discipline while enhancing its balance sheet strength following the capital infusion during the year.

While profitability-related ratios moderated during FY2026 in line with lower earnings, the Company continued to maintain comfortable debt servicing capability and healthy operating performance. The improvement in receivables turnover indicates better working capital management, whereas the lower inventory turnover reflects higher inventory levels maintained to support future business growth and project execution. Overall, the financial ratios indicate a stable operational and financial position, providing a strong platform for the Company to capitalise on emerging opportunities in the power infrastructure sector.

FUTURE OUTLOOK

Indias power sector is poised for sustained long-term growth, driven by increasing electricity demand, rapid urbanisation, expansion of transmission and distribution networks, rising renewable energy capacity and the Governments continued focus on strengthening power infrastructure. Initiatives such as grid modernisation, smart metering, industrial electrification, electric mobility and renewable energy integration are expected to generate significant demand for transformers, switchgear and other electrical infrastructure solutions.

Against this backdrop, Accord Transformer & Switchgear Limited is well positioned to capitalise on the emerging opportunities through its diversified product portfolio, engineering-led manufacturing capabilities and long-standing customer relationships across utilities, industrial customers, EPC contractors and renewable energy developers. The Company continues to strengthen its competitive positioning by expanding its manufacturing capabilities, enhancing product quality and broadening its presence across both domestic and international markets.

The Company has laid a strong foundation for future growth through several strategic initiatives undertaken during the year. The acquisition of approximately 20,300 sq. metres of land at Khairthal-Tijara, Rajasthan provides a platform for future capacity expansion, while successful completion of the Dynamic Short Circuit Test at CPRI reinforces the technical reliability and acceptance of its products. Further, vendor approvals from organisations such as UGVCL and Aditya Birla Renewables Limited , together with strategic collaborations and expanding customer relationships, are expected to enhance business opportunities across the power transmission, distribution and renewable energy sectors.

RISK MANAGEMENT

The Company recognises that effective risk management is fundamental to achieving sustainable business growth and creating long-term stakeholder value. Accord has established a structured risk management framework to identify, assess, monitor and mitigate risks that may impact its business operations, financial performance and strategic objectives.

The Company is exposed to various business risks, including fluctuations in raw material prices, changes in government policies and regulations, project execution risks, supply chain disruptions, competitive pressures, customer concentration and evolving technological developments. In addition, macroeconomic uncertainties, geopolitical developments and volatility in commodity prices may influence business performance.

To mitigate these risks, the Company focuses on diversifying its customer base, strengthening supplier relationships, maintaining prudent inventory levels, enhancing operational efficiencies and continuously upgrading its manufacturing and engineering capabilities. Regular review of business risks by the management enables timely implementation of appropriate mitigation measures, thereby ensuring operational resilience and business continuity.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has established adequate internal control systems commensurate with the nature, size and complexity of its business operations. These controls are designed to ensure the safeguarding of assets, accuracy and reliability of financial reporting, compliance with applicable laws and regulations, efficient utilisation of resources and adherence to established policies and procedures.

The internal control framework covers key operational, financial and compliance processes and is supported by clearly defined authority levels, standard operating procedures and regular monitoring mechanisms. Independent internal audits are conducted periodically to evaluate the effectiveness of internal controls, identify process improvement opportunities and ensure compliance with statutory and regulatory requirements.

The Audit Committee regularly reviews the findings and recommendations of the internal auditors and monitors the implementation of corrective actions wherever required. Based on these reviews, the management believes that the Companys internal control systems are adequate and operating effectively during the year under review.

HUMAN RESOURCES

The Companys employees remain its most valuable asset and play a pivotal role in driving operational excellence and long-term business success. Accord is committed to fostering a collaborative, performance-driven and inclusive work environment that encourages continuous learning, innovation and professional development.

The Company continues to invest in strengthening its human capital through structured recruitment, technical training, leadership development and skill enhancement initiatives. It also focuses on promoting employee engagement, workplace safety, ethical business practices and equal growth opportunities across all levels of the organisation.

As the business continues to expand, the Company remains focused on attracting and retaining skilled professionals with expertise in engineering, manufacturing, quality assurance and project execution. The management believes that a motivated and capable workforce will continue to be a key enabler in achieving the Companys strategic objectives and sustaining long-term growth.

CAUTIONARY STATEMENT

Statements made in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, government policies, regulatory developments, industry dynamics, competitive pressures, fluctuations in raw material prices, technological changes and other risks beyond the Companys control. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are advised to exercise appropriate judgment while relying on such statements and should consider the associated risks and uncertainties before making any investment or business decisions.