Ahlada Engineers Ltd Management Discussions

Pursuant to Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the directors wish to report as follows:

Overview

The objective of this report is to convey the managements perspective on the external environment and engineering industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities, and internal control systems and their adequacy in the Company during the Financial Year 2025-26. This should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Report. The Companys financial statements have been prepared in accordance with applicable Accounting Standards complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (‘SEBI) from time to time.

a. Industry Structure and Developments

India continues to be one of the fastest-growing major economies, supported by sustained public infrastructure spending, rapid urbanisation, industrial expansion and favourable demographic trends. Government initiatives such as the Housing for All Mission (PMAY), Smart Cities Mission, Make in India, Atmanirbhar Bharat, industrial corridor development, educational infrastructure programmes and increasing investments in commercial and industrial construction continue to create opportunities for manufacturers of engineered building products.

The Indian building products industry is witnessing a gradual shift from conventional wooden products to engineered steel solutions owing to their superior strength, durability, fire resistance, security, environmental sustainability and lower life-cycle maintenance costs. Growing awareness regarding fire safety regulations, commercial infrastructure development, industrial facilities, healthcare institutions, educational campuses and high-rise buildings has further accelerated the adoption of steel doors and windows.

Indian Steel Doors and Windows Industry:

India remains a bright spot in the global steel Doors industry and the steel Doors demand in the country with the rise in population and urbanization, the construction sector in India is rising at a significant pace, which eventually drives the growth of the India doors market. Indias population is expected to grow to a significant number of 1.52 billion by 2036. Moreover, the country is expected to witness a 70% of increase in urban areas. About 39% of the population is estimated to live in urban areas by 2036, a significant increase from 31% in 2011. Moreover, the real estate industry has witnessed rapid growth in the last few decades and is expected to exhibit moderate growth in the future. The real estate sector, which includes housing, retail, hospitality, and commercial, is the second largest employment generator in India. According to the India Brand Equity Foundation (IBEF), the demand for residential properties has surged in the last few years, it estimates that India is among the top 10 price-appreciating housing markets internationally.

The expected Compound Annual Growth Rate (CAGR) for the Residential Doors Market during the forecasted period is projected to be around 5% to 6%. This growth is primarily driven by innovative products and technologies, such as smart doors and energy-efficient solutions. The increasing focus on home security and sustainability is also contributing to the growth of the market.

Trends such as the rise of smart homes and the increasing popularity of modern design aesthetics are also expected to drive growth in the Residential Doors Market. By aligning with these trends and adopting innovative strategies, companies in the market can unlock new opportunities and achieve sustainable growth in the coming years.

Our Company Structure and Developments

Our Company is in the business of manufacturing steel doors, steel windows (steel-frame), Green Chalk Boards, Dual Desks and Purified Drinking Water System and we cater to customers across various segments and industries. We currently have our facilities spread across 2 manufacturing units in addition to one assembling unit and stock yard, with an area admeasuring 27,153 square yards on the outskirts of Hyderabad.

Established in 2005, we started commercial operations in February 2006 with manufacturing of clean room equipment and furniture. Further in the year 2008, we started manufacturing steel doors which catered to the then existing customers of clean room equipment and furniture. Gradually we started expanding the customer base for our products manufactured to healthcare, entertainment and real estate vertical as well.

We have been gradually expanding our manufacturing facilities and have over the past decade, expanded the facilities to its current form and capacity. Presently, we have an installed capacity to manufacture 30,000 doors per month. The facilities to manufacture clean room equipment and furniture and windows is inter-operable, and hence, capacities for the same cannot be conclusively determined.

With nearly two decade of experience in making steel doors and windows, we have developed in-house expertise in the process of manufacturing our product range, i.e. steel doors, windows and clean room equipment, and our in-house research team contributes in fine-tuning our products, its look and finish to suit the requirements of our customers, which in turn has carved a niche for our Companys products. Our in-house research and design team also constantly update the product designs as per client requirements and also make changes to improve efficiency.

Our Company manufactures and supplies steel doors and windows to individual households, other infra developers, industrial customers (other than Tata Steel Limited and the products manufactured and supplied to TSL) as well.

b. Opportunities &Threats :

Opportunities :

Government Policy Support: The governments policy initiatives, including tax incentives, ease of doing business reforms, and sector-specific schemes, create a conducive environment for growth in the construction sector. The support for infrastructure financing, land acquisition reforms, and streamlined regulatory processes further enhance the sectors attractiveness for domestic and international investors.

Key Recent Policy Interventions by the Government:

Urbanization and Smart Cities:

Indias urbanisation levels are estimated to improve to 50 per cent in 2047 from 34 per cent as of 2018. These transformed demographics will require development of a host of infrastructure facilities, thus increasing the demand for increase in coverage and quality of service delivery across the entire infrastructure spectrum. This includes residential and commercial real estate, public transport, water supply, sanitation, and waste management systems. The focus on building smart cities equipped with advanced digital infrastructure and sustainable solutions offers new avenues for growth and innovation in urban construction projects.

Pradhan Mantri Awas Yojana (PMAY-U 2.0)

The Government of India continues to promote affordable urban housing through Pradhan Mantri Awas Yojana Urban (PMAY-U 2.0), a flagship programme being implemented from 2024 to 2029. The scheme aims to provide financial assistance to eligible beneficiaries for the construction, purchase and rental of affordable houses in urban areas. PMAY-U 2.0 is expected to further strengthen the housing sector, support urban infrastructure development and generate significant opportunities for industries associated with construction and building materials.

(Source: Ministry of Housing and Urban Affairs, Government of India)

Atmanirbhar Bharat Abhiyan

The Government of Indias Atmanirbhar Bharat Abhiyan continues to play a pivotal role in strengthening domestic manufacturing, enhancing global competitiveness and promoting self-reliance across key sectors of the economy. Through initiatives such as Make in India, Production Linked Incentive (PLI) Schemes, and Vocal for Local, the programme encourages domestic production, innovation, infrastructure development and integration of Indian industries into global supply chains. The continued focus on manufacturing-led growth and import substitution is expected to create significant opportunities for Indian businesses and contribute to the countrys long-term economic development.

(Source: Government of India Atmanirbhar Bharat, Make in India and DPIIT initiatives)

Make in India

Make in India is a major national programme of the Government of India designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure in the country. The primary objective of this initiative is to attract investments from across the globe and strengthen Indias manufacturing sector. It is being led by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India.

This unprecedented push in infrastructure is expected to spawn associated industries, create jobs, and stimulate the economy. Specific focus areas are the expansion of public digital infrastructure, clean and renewable energy projects, and establishing resilient urban infrastructure. This ambitious undertaking seeks to enhance Indias global competitiveness and improve the quality of life across its vast populace.

Threats :

The Company continues to face certain business risks including Geopolitical tensions, Intense competition from organised and unorganised manufacturers, Volatility in steel and other raw material prices Margin pressures arising from competitive pricing, Delays in execution of infrastructure projects, Slowdown in construction activities, Changes in government procurement policies, Supply chain disruptions, Higher logistics and transportation costs, Availability of cheaper substitute products, Increasing compliance and regulatory requirements and Unprecedented wars.

c. Segment Wise Performance

The Company operates in Single Segment and is one of the largest manufacturers of Steel Doors and Windows. Our design, development and manufacturing process of Steel Doors and windows have proven its capacity to meet the dynamic requirements of customers giving a competitive advantage over other Steel Doors and Windows manufacturers.

Our high-quality Steel doors and windows provide a reliable and efficient solution for safety, fire and pest resistant. Based on the good operational performance our products are well accepted in Indian market.

During the year, the performance of Steel Doors and windows segment has witnessed a declined growthdue to numerous challenges including Government Policies,Raw Material Price Volatility, Supply Chain Disruptions, entry of new players, and variation in margins etc.. During the financial year 2025-26 the Company was able to record a net turnover ofRs.10084.53Lakhs against Rs.13199.51Lakhs in the previous year registering a decrease of 23.60%. The net profit of the Company for the year under review was at 17.83 lakhs as against 370.56 lakhs in the previous year recording a decrease of 95.19% due to the reasons explained above.

d. Outlook:

Future Outlook and Strategic Priorities

The Company remains confident in its ability to capitalize on emerging opportunities and navigate future challenges with agility, all while aligning with shareholders expectations for sustainable growth and profitability. To this end, our key focus areas include:

Debt Reduction: Actively reducing debt to achieve significant savings in interest costs.

Value Addition: Increasing the value added per product to enhance profitability.

EBITDA Sustenance: Maintaining robust EBITDA levels to ensure financial stability.

Potential increase of Dealer and Distributor Network.

We are committed to delivering high-quality products and anticipate securing increased orders in the coming years. By adopting global trends in the steel doors and windows industry such as eco-friendly practices, efficient and safe manufacturing, and innovative designs, we are well-positioned to strengthen our market presence.

Current Projects and Contracts

We are optimistic about securing further high-value contracts for the supply of dual desks and purified drinking water systems apart from our regular business. Tata Steel Limited continues to purchase our products under a "Buy & Sell" model on mutually agreed terms.

Distribution Channels

We have established a network of distributors and dealers across Andhra Pradesh, Telangana, Kerala, Karnataka, Maharashtra, and Tamilanadu for the supply of steel doors and windows. Our brand is being promoted through various channels, including print, electronic, and social media. We are also in the process of appointing distributors and dealers in the northern states to expand our reach.

Furthermore, we plan to collaborate with other state governments and reputable private institutions across India to supply similar products, thereby broadening our network and increasing revenue and profitability.

Strategic Focus and Operational Excellence

Throughout the year, the company has focussed on operational and marketing excellence to mitigate adverse business conditions. Our aspiration is to become the most valuable and respected company in the country. To achieve this, we are taking steps to ensure that we are structurally, financially, and culturally prepared for the future. Our priorities for the medium term include:

Innovation and Technology Upgrades: Continuous innovation in our manufacturing processes, technological upgrades, and cost improvements are central to our operations. Our technical teams strive to minimize waste and maximize resource utilization, whether raw materials, energy, or facilities to drive process improvements and cost reductions.

Quality and Competitiveness: We leverage the latest technology and machinery to produce high-quality, competitive products, and we regularly update our equipment to meet market standards.

e. Risks and Concerns

The Company operates in a dynamic business environment and is exposed to various risks arising from changing economic conditions, fluctuations in raw material prices, evolving customer preferences, regulatory developments and increasing competition in both domestic and international markets.

The steel doors and windows industry continues to face pricing pressures due to intense competition from organized and unorganized players, availability of substitute products and fluctuations in steel and other input costs. In addition, global economic uncertainties, geopolitical developments, inflationary pressures and changing trade policies may affect demand patterns, supply chains and overall business sentiment across markets. Any slowdown in infrastructure, real estate, industrial and commercial construction activities may also impact the growth prospects of the industry.

The Company continuously focuses on product innovation, value engineering, operational excellence and supply chain optimization to mitigate these risks. Efforts are being made to strengthen the local vendor ecosystem, improve procurement efficiencies, enhance manufacturing productivity and maintain stringent quality standards. The Company also continues to diversify its customer base, expand its geographical reach and develop specialized products catering to emerging market requirements.

Increasing competition from domestic manufacturers as well as international brands may exert pressure on market share and profit margins. To address these challenges, the Company emphasizes technological advancement, quality assurance, customer-centric solutions, strong after-sales service and continuous product development. By leveraging its brand reputation, manufacturing capabilities and focus on innovation, the Company remains committed to enhancing its competitive position and creating sustainable long-term value for all stakeholders.

f. Internal Control Systems and Governance

The Company has established robust internal control systems and procedures that are commensurate with the size and nature of our business. As our requirements evolve, we continue to strengthen our internal audit department. The Company has also implemented comprehensive corporate governance practices, with our Audit Committee regularly reviewing and monitoring these systems.

These procedures are designed to ensure that:

All assets and resources are acquired economically, used efficiently, and adequately protected;

Significant financial, managerial, and operational information is accurate, reliable, and provided in a timely manner; and

All internal policies and statutory guidelines are strictly followed.

The Audit Committee continuously monitors the effectiveness of internal controls and reviews reports submitted by the internal audit department. The management promptly addresses the observations made by the Audit Committee, ensuring the Companys governance standards are consistently upheld.

g. Discussion on Financial Performance with Respect to Operational Performance:

Net revenues decreased to Rs.10084.53 Lakhs from Rs. 13199.51 Lakhs in the previous year registering a decrease of 23.60%. The net profit of the Company for the year under review was at Rs.17.83 lakhs as against Rs.370.56 lakhs in the previous year recording a decrease of 95.19%and decrease in their operational performance due to due to numerous challenges including Government Policies, Raw Material Price Volatility, Supply Chain Disruptions, entry of new players, and variation in margins etc..

h. Details of significant changes (i.e. changes amounting to 25% or more compared to the previous financial year) in key financial ratios are as follows:

List of Ratios	31st Mar 2026	31st Mar 025	Variance	Reason
(a) Debtors turnover ratio	1.64	1.28	28.53%	The variance is due to decrease in currenttrade receivables. Receivables fell at a faster rate alongside the reduction in sales.
(b) Inventory turnover ratio	2.05	5.96	-65.56%	The variance is due to decrease in cost of materials consumed, aligning with lower sales volume.
(c ) Current Ratio	1.94	2.14	-9.64%	NA
(d) Debt-Equity Ratio	0.28	0.26	8.75%	NA
(e) Net profit ratio	0.00%	0.03%	-93.70%	The variance is due to decrease in gross margins
(f) Return on Net worth	0.03	0.06	-56.11%	The variance is due to the decrease in revenue and gross margins

i. Material Developments in Human Resource/Industry Relations front, including number of people employed:

The Company believes that people are the backbone to the company. The Company has meritocratic culture and provides a conducive workplace for all. Occupational health and safety of both the permanent and contractual workforce is ensured at all times. The company focuses on the learning and professional development of its employees. Multiple on-the-job, classroom and other forms of trainings, learning opportunities and structured programmes are offered to our people, in order to help build world class competencies, regularly reskill and upskill and provide an environment of continuous improvement.Industrial relations are good and harmonious. The Company recognizes the importance and contribution of human resources for its continued growth and development. As on 31stMarch, 2026, the Company has a total strength of199 permanent employees.

j. Statutory Compliance:

Your Company gives priority to comply all of the statutory requirements in time and the management regularly discusses the same with all of the departmental heads. The Company Secretary, as compliance officer, timely ensures compliance of the provisions of the Companies Act, 2013, SEBI Regulations and provisions of Listing Agreements. Compliance Certificates are obtained from various units of the Company and the Board is informed of the same at every Board Meeting.

Cautionary Statement:

Statements in the Management Discussion and Analysis describing the Companys estimates and expectations may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results/performance could differ materially from those expressed or implied.