Alphageo (India) Ltd Management Discussions

AN ECONOMIC OVERVIEW

In 2024, global growth showed stability as inflation returned closer to target thresholds and supportive monetary policies encouraged activity in advanced and developing economies (EMDES).

As trade patterns and policies evolve, major economies respond with agility, unlocking pathways to inclusive and sustainable growth. This ongoing transition is shaping a more adaptive and balanced global economic landscape.

India remains the fastest-growing major global economy, sustained its growth momentum in FY 2024–25, albeit at a moderate pace due to a high base effect.

India achieved a GDP growth of 6.5% in FY25, primarily driven by positive consumption trends and a rebound in rural demand, growth in services, an increasing share of high-value manufacturing in exports, and more. Annual inflation has been moderated at 4.6% in FY25 compared to 5.4% last fiscal year. Easing pressure on commodity prices led the MPC to cut the repo rate by 50 basis points from 6.5% to 6.0%, reducing the repo rate twice during the fiscal year, in five years. Also, the urban unemployment rate did not increase until the third quarter of FY25.

The agriculture sector rose by 3.8%, the industry sector by 6.2%, the service sector by 7.2% in 2024, and the core sector grew by 4.6% till January 2025. Indias Manufacturing PMI rose to 58.1 in March 2025, exceeding the _ash estimate of 57.6 and Februarys 56.3, marking the highest level since July 2024. New orders and output saw their biggest increase in eight months while buying levels reached a seven-month high.However, the FMCG sector faced demand headwinds while the rural market provided a lifeline. The annual GST collections increased by 9.98% to _16.75 lakh crore in FY25, reflecting strong economic activity and improved compliance.

Outlook: In 2025-2026, the Indian economy is expected to demonstrate moderate growth compared to the previous financial year, with a projected real GDP growth of 6.3-6.8%, albeit from a high base. With that, India is poised to strengthen its position as one of the fastest-growing major economies, significantly contributing to global GDP growth. However, external risks such as a global economic slowdown, geopolitical tensions, tari_ wars and trade disruptions could impact Indias future economic outlook. Moreover, a slowdown in urban consumption, a spike in food inflation, and slow growth in capital formation can also influence the growth outcome.

Overview: In FY 2024–25, Indias energy story unfolded with renewed vigour. As the economy accelerated, energy needs surged across industries, cities, and towns. The heartbeat of this growth was the nations growing appetite for petroleum products.

Rising Consumption: Between April and January in FY 2024-25, India consumed 199.2 Million Metric Tonnes (MMT) of petroleum products- a 3.5% increase from the previous year. Behind this rise was a mix of economic recovery, lifestyle changes, and infrastructural expansion. The surge in personal and commercial vehicles on the road, alongside a rise in air travel, led to a sharp increase in fuel demand, particularly for jet fuel.

In rural India, households continued their shift towards cleaner cooking fuels, with LPG cylinders reaching remote corners. Simultaneously, industries—particularly manufacturing and petrochemicals—cranked up production, pushing fuel demand even higher.

Although Indias crude oil production declined slightly by 1.2%, the country showed resilience in its refining capacity. In January 2025 alone, India processed 23.7 Million Metric Tonnes (MMT) of crude oil, a 5.2% increase compared to the same period last year. This indicates strong performance by the refining sector, which continues to operate efficiently despite production challenges.

Shifting Import Dynamics: Even though there was a temporary 3.1% drop in crude oil imports during January 2025, the overall imports for the fiscal year still grew by 2.7%. This rise shows Indias strategic efforts to secure a stable energy supply, especially in light of global market uncertainties and price volatility.

A notable shift in import patterns occurred, with Russias share rising by 7.3% to 1.76 million bpd, now accounting for 36% of Indias total imports, driven by discounted prices amid Western sanctions. This shift came at a time when the dominance of OPEC suppliers was slipping. Indias imports from Saudi Arabia plunged to their lowest level in 14 years, and Iraq saw its share dip to a four-year low. The costlier selling prices from these traditional suppliers no longer align with Indias need for affordable energy. Outlook: Looking ahead, the momentum is expected to continue. With petroleum demand expected to reach 252.93 (MMT) in FY 2025–26, India is poised to drive a quarter of the worlds oil consumption growth. The countrys fuel-driven journey is far from over; it is only evolving, adapting, and accelerating into a new energy era.

Overview: Indias energy landscape is undergoing a notable transformation, with natural gas emerging as a key pillar of its future energy mix. According to the IEAs report, the countrys natural gas demand is projected to rise by nearly 60%, reaching 103 Billion Cubic Meters (BCM) annually by the end of the decade.

After years of modest growth and intermittent declines, the tide appears to have turned. India witnessed a double-digit surge in gas consumption, exceeding 10% in both 2023 and 2024, signalling a clear inflexion point. This marks a decisive shift as the country aims for cleaner fuels to support industrial expansion, urban growth, and environmental sustainability. In FY 2024–25, domestic natural gas output reached an estimated 35.6Billion Cubic Meters (BCM), a slight decrease from the previous year. Natural gas is critical for fuelling industrial applications, city gas distribution (CGD), and power generation.

Despite this progress, India continues to rely heavily on imports to meet its rising demand. Lique_ed Natural Gas (LNG) imports remain essential, particularly for industries and CGD networks, with approximately 55% of the countrys natural gas requirements met through overseas purchases. Qatar remains Indias largest LNG supplier, emphasising the strategic importance of stable international energy relations.

Government Policy: To reduce this dependency and expand gass role in the national energy mix, the Government of India has set an ambitious target to raise natural gass share from 6% to 15% by 2030. To support this, large-scale investments are directed toward expanding pipeline infrastructure, setting up new LNG terminals, and enhancing CGD networks. The flagship Pradhan Mantri Urja Ganga project is accelerating gas access across eastern India, while terminals in Gujarat, Tamil Nadu, and Odisha have boosted import handling capacity significantly.

Policy support is also gaining traction.The Uni_ed Tari_ (UFT) Policy isdesigned to ensure transparent, fair pricing for gas transportation. It is expected to usher in a stable and competitive market, aligning with the governments broader vision of ‘One Nation, One Grid, One Tari_.

Indias green transition strategy complements these developments. The National Green Hydrogen Mission sets a bold target of producing 5 million metric tonnes of green hydrogen annually by 2030. This aligns with global sustainability goals and signals a strong shift toward integrating hydrogen into the national energy framework. Indiasoil and gas sectorstands at a crucial juncture—balancing growing energy demand with environmental responsibility. While hydrocarbons will continue to play a central role in meeting immediate needs, the country is charting a forward-looking course. Through policy reforms, infrastructure investment, and technological innovation, India is building the foundation for a cleaner, more self-reliant, and energy-secure future.

Indias oil sector is pivotal as the government ramps up efforts to secure the nations energy future. The financial years 2024-25 and 2025-26 are poised to witness critical developments in exploration, technological adoption, and energy transition, aimed at reducing dependency on imported oil and gas while positioning India as a more self-reliant energy player.

FY 2024-25: A Year of Expansion and Innovation: In August 2024, the government launched OALP Round X, one of the largest bid rounds under the Open Acreage Licensing Policy (OALP). After a successful bidding round in February 2025, it is expected to cover vast onshore and offshore areas, with an estimated 1,91,986.21 square kilometres to be brought under exploration. This expansion represents a significant leap forward in Indias quest to reduce its import dependency, currently hovering around 85% for oil and 50% for natural gas. The government aims to increase domestic production, making India less reliant on imports and more self-sufficient in its energy needs. The Hydrocarbon Exploration & Licensing Policy (HELP) continues to drive investment in the sector, attracting global players through revenue-sharing contracts, uniform licensing for all hydrocarbons, and marketing freedom. With OALP Round X paving the way, the government aims to add another 0.5 million square kilometres of exploration area by the end of FY25, setting the stage for a major expansion of Indias oil and gas industry. Technological advancements are also key to this expansion. The government is increasing the deployment of Digital Oil

Fields and Artificial Intelligence (AI)-driven projects to optimise exploration efficiency, enhance reservoir management, and improve predictive maintenance. Funding for research and development has also been ramped up, particularly under the National Seismic Programme, to map unexplored sedimentary basins and improve the nations ability to explore and produce hydrocarbons.

Domestically, India is targeting significant production growth. The aim is to increase crude oil production to natural gas output. This effort is a cornerstone of Indias energy security strategy and will be critical in reducing the countrys reliance on imports.

FY 2025-26: Sustaining Momentum and Energy Transition: Looking ahead to FY2025-26, the government plans to continue the momentum with OALP Round XI and XII. These rounds will likely focus on more challenging areas, including deep water and ultra-deep water blocks, and are expected to help India inch closer to its ambitious target of bringing 1 million square kilometres under exploration by 2030. Energy transition initiatives will be more central in the countrys oil and gas strategy during this period. The government is committed to integrating oil exploration with renewable energy projects, including offshore wind-solar hybrids. This aligns with Indias renewable energy ambitions and supports the broader goal of achieving net-zero emissions. Pilot projects for green hydrogen and carbon capture, utilisation and storage (CCUS) in the hydrocarbon sector are set to commence, further diversifying Indias energy mix.

Investment and partnerships will be key drivers of these initiatives. India is looking to enhance its collaboration with global energy majors, such as ExxonMobil and TotalEnergies, particularly in advanced offshore drilling technologies. The government also provides policy incentives under HELP to boost foreign direct investment (FDI) in exploration, ensuring the country attracts the necessary capital and expertise to accelerate its energy goals. Infrastructure development will continue to play a crucial role in this strategy. The expansion of pipeline networks, including the Urja Ganga Gas Grid, and the growth of LNG terminals will be vital in supporting Indias transition to a gas-based economy. These infrastructure developments will ensure that natural gas plays an increasingly significant role in meeting the countrys growing energy demand while reducing carbon emissions.

The Road Ahead: Indias oil and gas sector is on an ambitious trajectory. The country is working towards a more self-reliant, sustainable energy future by increasing exploration efforts, fostering technological innovation, and integrating renewable energy solutions. With a combination of strategic policies, global partnerships, and targeted investments, India is positioning itself to meet the energy challenges of the 21st century, while also playing a significant role in the global transition to cleaner energy.

Overview: India stands at a defining point in its industrial and energy journey, and minerals are emerging as a strategic cornerstone. From driving the global clean energy transition to powering the countrys industrial engines, critical and strategic minerals are now more essential than ever. However, the nations heavy reliance on mineral imports, particularly for high-tech and green energy applications, has prompted the government to take bold steps toward domestic self-sufficiency.

The Import Challenge: Indias mineral appetite is growing rapidly. Between FY22 and FY23, the country witnessed a sharp 34% surge in the import value of critical minerals, with lithium imports alone rising by 58%. The value of Platinum Group Elements (PGE), vital for electronics, fuel cells, and jewellery, hit a staggering $3 billion. Much of Indias dependency lies in imports from China, especially for minerals used in wind turbines, solar panels, and batteries. This rising demand and global supply chain vulnerabilities have pressured India to secure a stable, domestic supply of these vital resources.

Government Policies: Recognising this strategic need, the Government of India is implementing sweeping reforms under the Mineral Exploration and Licensing Policy. A transparent, auction-based allocation system for critical minerals was introduced, marking a paradigm shift in how India manages its subterranean wealth.

In 2024, the government launched four tranches of auctions for 24 key critical minerals, including lithium, titanium, graphite, potash, molybdenum, and rare earth elements. In addition, customs duties on 25 critical minerals were eliminated, making exploration more economically attractive and accessible. In January2025, the Union Cabinet approved the _16,300 crore National Critical Minerals Mission, targeting an additional _18,000 crore in investments from public sector undertakings (PSUs). The mission focuses on the exploration, mining, processing, and recycling of critical minerals, strongly emphasising cross-sector collaboration to ensure resource security and support Indias transition to a green economy.

Exploration: The momentum is only expected to intensify in FY2025–26. For the first time, the Ministry of Mines will launch a dedicated auction tranche for exploration licenses, following amendments to the MMDR Act. This bold move will allow private players to conduct reconnaissance and prospecting in unexplored regions.

Moreover, new states- such as Jammu & Kashmir, Assam, and Kerala- will join Indias mineral auction regime, bringing the total to 17 participating states. The GSI has already greenlit 227 exploration projects for FY26, with a strong focus on deep-seated and critical minerals vital for defence, electronics, and clean energy. Conclusion: Indias push to unlock its mineral wealth is more than an economic strategy- it is a national imperative. As demand for clean technologies surges and the country positions itself as a global manufacturing hub, securing mineral independence becomes crucial.

The convergence of data-driven exploration, policy liberalisation, and transparent auctions signals a new era for Indias mining sector. With rich deposits, strategic foresight, and an unwavering commitment to sustainability, India is on the brink of transforming from a mineral-dependent nation into a resource powerhouse.

• Alphageo delivers a full spectrum of geophysical services- spanning seismic data acquisition, processing, and interpretation- enabling it to serve diverse client requirements while minimising reliance on any single revenue source

• The company maintains longstanding partnerships with major oil and gas players and ranks globally among the most cost-e_ective seismic service providers

• Alphageos extensive geographic presence enables access to diverse markets while minimising exposure to localised risks

• Surging demand across key sectors such as energy and automotive.

• The ecological implications of seismic surveys can trigger heightened scrutiny from environmental bodies.

• Surge in global recognition of India.

• The ecological implications of seismic surveys can trigger heightened scrutiny from environmental bodies

• Engagements in regions with indigenous populations require careful navigation of cultural considerations and community expectations

• The company faces vulnerability to environmental events, which may adversely affect service continuity and asset integrity

• Altering regulations and policy guidelines

• Insufficient local community engagement and limited operational timeframe

Alphageo (India) Limited is Indias leading private-sector onshore integrated seismic services provider. With experience spanning multiple decades and terrains, we have successfully executed 65+ projects across Indias most challenging landscapes and abroad.

With a strong legacy of excellence, we are the partner of choice for oil exploration companies seeking dependable and innovative solutions. Our end-to-end geophysical services- including 2D and 3D data acquisition, processing, and interpretation- are expertly tailored to support the exploration of oil, gas, and mineral resources.

In FY25, Alphageos revenue from operations increased from H9,866.93 lakh in FY24 to H12567.51 lakh in FY25. However, a rise in geophysical survey and related expenses from H6,511.72 lakh to H10431.00 lakh negatively impacted profitability. As a result, the company reported a loss of H(581.71) lakh for the

year ending March 31, 2025, compared to a profit of H104.57 lakh in FY24.

Several factors contributed to this downturn, including competitive challenges faced by MSME companies, difficult terrains where the company operates, a lack of support from local communities at operational sites, and limited operational windows due to seasonal constraints. A notable rise in receivables affected the net cash flow from operations. Additionally, there was a slight decrease in the cash and bank balance, from H12676.55 lakh in FY24 to H10061.53 lakh in FY25; however, this did not impact the organisations liquidity. As of March 31, 2025, the net worth of the company stood at H26944.49 lakh, compared to H27951.08 lakh on March 31, 2024. The Company achieved a zero-debt position, which provides substantial leverage for future capital investments.

At Alphageo, we are committed to maintaining a robust internal control system and an environment that ensures the prevention and detection of errors and irregularities. Our internal control procedures encompass internal financial controls and compliance with various policies, practices, and statutes, considering the organisations growth and operational complexity. Our comprehensive framework continuously monitors and assesses all aspects of risks associated with our activities and corporate profile, including commercial, financial, and developmental risks. This framework is designed to align with the size and complexity of our business, ensuring the security of our assets and the efficiency of our operations. We have established management reporting and internal control systems that enable us to monitor performance, strategy, operations, business environment, organisation, procedures, funding, risk, and internal control. Internal auditors conduct extensive audits throughout the year across all locations and functional areas, submitting their reports to the Audit Committee of the companys Board of Directors. These audits help us ensure compliance with internal control requirements, regulatory mandates, and the accurate recording and reporting of financial and operational information. Through these measures,

Alphageo strives to maintain an effective internal control system that supports our mission of delivering exceptional quality and value to our clients while driving innovation and excellence in the seismic services industry.

At Alphageo, the welfare of our employees has always remained our topmost priority. This commitment is underscored by the nature of our service-oriented business, which relies heavily on our people. Moreover, our projects often entail working in challenging terrains under harsh conditions.

Through our people-centric policies and initiatives, we strive to ensure that our workforce remains engaged, empowered, and motivated. Our HR policy is designed to cultivate a skilled workforce capable of adapting to the rapidly evolving business landscape, fostering a culture of flexibility, efficiency, and growth. At Alphageo, we strongly advocate for self-directed learning. We encourage our team members to identify areas for improvement and pursue knowledge enhancement to refine their skills and drive continuous improvement in their performance.

MANAGEMENT ^RISK

Operating in a complex and evolving environment, Alphageo faces inherent business risks that are actively managed by the Board and leadership through structured risk identification and mitigation strategies.

The Company effectively navigates these challenges through systematic risk management practices to achieve its business objectives and sustain growth in a volatile and complex environment. Alphageos risk management framework establishes guidelines to promote sustainability within its business model. The management collaborates closely to develop mitigation plans for potential risks that could affect the Companys operations.

CAUTIONARY STATEMENT: THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS ABOUT EXPECTED EVENTS AND THE COMPANYS FINANCIAL AND OPERATIONAL RESULTS. BY THEIR NATURE, FORWARD-LOOKING STATEMENTS REQUIRE THE COMPANY TO MAKE ASSUMPTIONS AND ARE SUBJECT TO INHERENT RISKS AND UNCERTAINTIES. THERE IS A SIGNIFICANT CHANCE THAT THE ASSUMPTIONS, PREDICTIONS AND OTHER FORWARD-LOOKING STATEMENTS MAY NOT BE ACCURATE. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS AS SEVERAL FACTORS COULD CAUSE ASSUMPTIONS AND ACTUAL RESULTS AND EVENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED HERE.