Arisinfra Solutions Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

A1. Indias Macroeconomic Momentum

India remains one of the fastest-growing major economies during FY2025-26, supported by resilient domestic demand, sustained infrastructure spending and improving investment activity despite global geopolitical and economic uncertainties.

According to MoSPI, Indias real GDP grew by 7.7% in FY 2025-26, while the RBI projects growth of 6.6% in FY 2026-27. Inflation remained within the RBIs target range for most of the year and the financial system continued to remain stable.

Looking ahead, favourable demographics, ongoing infrastructure development, digitalization and policy support are expected to support Indias long-term growth prospects, although global uncertainties and commodity price volatility may continue to pose near-term challenges.

A2. Indias Infrastructure Push - Scale and Ambition

Infrastructure spending is the primary growth engine for construction-linked demand. In the Union Budget FY2026-27, the government increased capex by approximately 15% to a record T12.2 lakh crore, equivalent to 4.4% of GDP, maintaining the governments decade-long trajectory of expanding public asset creation. Continued investments across roads, railways, urban infrastructure, logistics and industrial corridors are expected to support sustained demand for construction materials, creating long-term growth opportunities across the construction value chain.

Budget Initiative	Outlay / Scale
Capital Expenditure Outlay - FY 2025-26	Rs.11.2 lakh crores
Capital Expenditure Outlay - FY 2026-27	Rs.12.2 lakh crores
50-Year Interest-Free Loans to States	Rs.2.00 lakh crores

A3. Real Estate Sector - Volume Consolidation, Value Leadership and Accelerating Premiumization

Indias residential real estate market reached a significant inflection point in 2025, marking the fifth consecutive year of an upcycle. Sales volumes remained broadly stable at the highest levels recorded in over a decade, as the market entered a phase of consolidation following the exceptional peak witnessed in CY 2024. More significantly, the markets composition has undergone a marked shift, with homes priced above Rs.1 crore now accounting for 50% of all residential sales across the top eight cities, highlighting the growing dominance of premium and luxury housing demand.

Residential Sales - Volume Holds Near 12-Year Peak; Market Enters a Phase of Consolidation

Residential demand remained healthy during CY2025, with sales sustaining near record-high levels despite a high base and the gradual normalisation of market activity. Across the top eight cities tracked by Knight Frank India (MMR, Delhi- NCR, Bengaluru, Hyderabad, Pune, Chennai, Kolkata and Ahmedabad), total residential sales in CY2025 stood at 3.48 lakh units, representing a marginal 1% decline from the 3.50 lakh units recorded in CY2024, which was itself a 12-year high. New launches broadly kept pace with sales, with supply additions remaining disciplined, reflecting a balanced demand- supply environment.

Unsold inventory across the top eight cities increased modestly to 5.10 lakh units by the end of CY2025 from approximately 4.90 lakh units a year earlier, indicating healthy absorption levels despite continued project launches.

Residential prices increased across all eight cities during 2025, although the pace of appreciation moderated from the elevated levels witnessed in 2024. NCR led with 19% YoY appreciation, followed by Hyderabad (13%), Bengaluru (12%) and Mumbai (7%). The continued rise in residential prices across key markets reflects resilient end-user demand, improving buyer confidence and the growing preference for premium and luxury housing.

Budget Initiative	Outlay / Scale
Asset Monetisation Plan	Rs.16.72 lakh crores
(FY 2025-30)
Urban Challenge Fund	Rs.1.00 lakh crore
National Infrastructure Pipeline (NIP) - Projects Listed	14,500+ projects
NIP - Total Project Cost (Estimated)	213 lakh crore

Value Growth - Premium Housing Crosses 50% of Market for the First Time

The defining structural development of Indias residential real estate market in CY 2025 was the rise of premium housing to majority status. Homes priced above Rs.1 crore accounted for 50% of total residential sales across the top eight cities, compared with 44% in CY 2024, highlighting a sustained shift in buyer preferences towards higher-value residential assets. This milestone was achieved despite overall residential sales remaining largely stable, with premium housing sales growing 14% year-on-year while total market sales declined marginally by 1%.

Growth within the premium segment was broad-based across price categories. The Rs.1-2 crore segment accounted for 28% of total residential sales and recorded 7% year-on-year growth. The T2-5 crore segment grew 20%, while the Rs.5-10 crore segment expanded by 31%. Demand was particularly strong at the luxury end of the market, with sales in the T10-20 crore and T20-50 crore categories increasing by 164% and 55%, respectively,

reflecting rising affluence, changing lifestyle preferences and sustained demand for larger, premium residences.

In contrast, demand in lower-ticket segments moderated during the year. Sales of homes priced below T50 lakh declined 17% year-on-year, while the Rs.50 lakh- Rs.1 crore segment recorded an 8% decline. Despite remaining an important contributor to overall housing demand, these categories witnessed a gradual reduction in market share as rising property prices and evolving consumer preferences shifted demand towards premium housing.

This ongoing premiumisation of the residential market has positive implications for the construction materials industry. Premium and luxury projects typically require higher specifications across categories such as tiles, stone, sanitary ware, electrical systems, HVAC solutions, plumbing fixtures and fagade materials. As premium housing continues to account for a larger share of new launches and sales, material consumption per unit increases, supporting long-term demand growth for value-added construction products and services.

Source: Knight Frank India Real Estate: Office and Residential Market - Full Year 2025 (February 2026); Full Year 2024 (January 2025). Segment shares are approximate, based on primary (new) residential sales. CY 2022 sub-^50 lakh share per Knight Frank India H2 2025 report commentary.

RERA and Formalisation - Scale, Depth and Structural Tailwind

The formalisation of Indias residential real estate sector under the Real Estate (Regulation and Development) Act (RERA) has accelerated significantly in recent years. As of 2025, over 1.5 lakh real estate projects and more than 1.06 lakh real estate agents were registered under RERA across the country, reflecting the increasing adoption of regulatory frameworks and greater transparency across the sector. Maharashtras MahaRERA, the countrys largest state-level regulator, crossed the milestone of 50,000 registered housing projects in 2025, underscoring the depth of formalisation in one of Indias largest residential markets.

Organised and listed developers now account for approximately 60-65% of new launches across the top eight cities, compared with less than 40% prior to the implementation of RERA. This increasing formalisation is driving greater adoption of organised procurement practices and strengthening demand for reliable, technology-enabled construction supply partners. Regulatory requirements such as escrow mechanisms, structural defect liability provisions and periodic project disclosures have enhanced transparency, accountability and execution discipline across the sector, reinforcing buyer preference for established developers and quality-compliant construction

practices.
RERA Formalisation Indicator	Value
Cumulative RERA-Registered Projects	1.5+ lakh
Registered Real Estate Agents	1,05,000+
States / UTs with Operational RERA	30+
Organised Developer Share - New Launches (Top 8 Cities)	50%

Outlook - A Maturing, Value-Led Market with Durable Construction Demand

Indias residential real estate market continues to demonstrate healthy fundamentals, supported by stable sales volumes,

disciplined supply additions and sustained demand for premium housing. The increasing share of premium and luxury residential developments, coupled with rising formalisation under RERA, is driving a shift towards higher-quality construction and greater adoption of organised procurement practices.

For construction material suppliers, these trends support a favourable long-term demand outlook. Sustained residential launches across major metropolitan markets, increasing premiumisation, greater specification requirements and the growing presence of organised developers are expected to support demand for construction materials and execution services over the medium to long term.

The continued expansion of residential activity across key markets including MMR, NCR, Bengaluru, Hyderabad, Pune, Chennai, Kolkata and Ahmedabad is expected to provide a broad-based demand environment for the construction ecosystem.

A4. Construction Materials Market - Size and Structure

Indias construction materials market is large, fragmented and expanding. As per Redseer Construction materials market report, The construction materials market was estimated at USD 230-280 billion (2023) and projected to reach USD 290340 billion by 2028. Despite this scale, a significant portion of supply - particularly in aggregates, walling solutions and ready-mix concrete - remains unorganised or semi-organised.

Category	Market Structure
Aggregates	12,000+ quarry operators
Ready-Mix Concrete (RMC)	4,500+ plants
Steel	150+ MTPA production capacity
Cement	700 MTPA installed capacity

This fragmentation creates pricing opacity, inconsistent supply reliability and execution risk - structural challenges that technology-led platforms are well positioned to address.

B. OPPORTUNITIES AND THREATS

B1. Opportunities

(i) Structural Demand Growth in Infrastructure and Real Estate

Indias infrastructure pipeline at T 213 trilLion+ across 14,500+ NIP projects provides a long-dated, visible demand runway for construction materials and execution services. Road, railway, urban infrastructure, energy and logistics projects are in simultaneous execution, driving concentrated demand for aggregates, RMC, asphalt, steel, cement and walling solutions. Government-backed capital expenditure is expected to remain elevated as a percentage of GDP through FY 2027-28.

(ii) Platform Opportunity in a Fragmented Ecosystem

Construction materials account for 50-60% of total project cost. Yet procurement remains largely manual, relationship-driven and un-standardized. This presents a large opportunity for technology-led procurement and supply orchestration platforms that can offer price discovery, vendor aggregation, delivery reliability and working capital tools. Companies that combine network scale with digital capabilities are positioned to capture a disproportionate share of industry formalisation benefits.

(iii) Growing Preference for Integrated Partners

Developers and infrastructure players increasingly seek integrated partners who can manage not just material supply but also project coordination, working capital management, delivery monitoring and sales support. The traditional model of independent procurement, logistics and execution is proving inadequate for larger, time- sensitive projects.

(iv) Category Expansion - Asphalt and Adjacent Materials

The governments sustained road and highway programs creates growing demand for asphalt - an execution- critical category with specific plant proximity and logistics requirements. New entrants who bring technology-led visibility and supply reliability to asphalt can capture significant market share in this underpenetrated segment.

(v) Technology and AI-Enabled Efficiency

Indias construction sector remains among the least digitised large industries. Real-time price discovery, vendor management, delivery tracking, credit risk assessment and project reporting continue to be dominated by manual processes. AI and data-driven platforms that can reduce this inefficiency stand to generate material productivity gains across the construction value chain.

B2. Threats

(i) Working Capital Intensity and Financing Risk

The construction value chain operates under a structural mismatch: vendors and suppliers demand faster payment cycles while developers and project owners retain extended collection timelines. This asymmetry creates persistent financing pressure - one that intensifies during periods of credit tightening, liquidity constraints or rising interest rates. As Arisinfra scales its contract manufacturing and DaaS segments, managing this mismatch without compromising growth velocity remains a core operational discipline.

(ii) Customer and Vendor Concentration

Dependence on a limited set of large customers or vendors can create revenue volatility in the event of relationship disruption. Geographic revenue concentration - with Maharashtra accounting for 54% and Tamil Nadu for 29% of FY 2025-26 revenue - creates exposure to regional macro or regulatory risks.

(iii) Regulatory and Compliance Risk

The construction materials ecosystem is sensitive to policy change across multiple layers. Revisions to GST rates or input tax credit structures, tightening of environmental clearances, changes to mining permissions or shifts in land acquisition frameworks can materially affect sourcing costs, supply availability and project execution timelines. Regulatory unpredictability in any of these domains - particularly in the aggregate and RMC categories where sourcing is highly localised - requires continuous monitoring and adaptive procurement strategies.

(iv) Macro and Cyclical Risk

Indias medium-term infrastructure and real estate growth trajectory remains structurally intact. However, near-term headwinds - including slower- than-budgeted government capex execution, interest rate cycles dampening real estate demand or global commodity price volatility - could compress construction activity and materials offtake. Geopolitical risks present an additional and increasingly relevant dimension: supply chain disruptions stemming from global conflict, trade policy shifts or energy price shocks can transmit rapidly into input costs and project economics for construction- linked businesses. Our asset-light model and multivendor sourcing architecture provide partial insulation, but not immunity from these external forces.

C. BUSINESS PERFORMANCE

C1. Revenue Mix by Business Stream - FY 2025-26

ARIS operates through three integrated revenue streams: B2B Supply, Contract Manufacturing and Services (Developer-as- a-Service). During FY 2025-26, total Revenue from Operations reached T10,675 million, representing a 39.1% YoY increase over T7,677 million in FY 2024-25.

C2. Revenue Mix by Material Category - Three-Year Trend

The product mix has evolved meaningfully, with the Company deliberately shifting away from lower-margin traded commodities such as steel and cement towards higher-margin, execution-critical categories such as aggregates, asphalt and services.

Key observations: Aggregates & Asphalt grew from 31% (FY24) to 43% (FY26) of revenue. Services revenue grew 109% YoY to T983 million in FY26. Steel & Cement share declined from 24% to 13%, reflecting a deliberate portfolio optimisation towards higher-margin categories.

Maharashtra FY 2025-26 Revenue (K Mn)

5,751

Share (%)

54%

Rest of India FY 2025-26 Revenue (K Mn)

766

Share (%)

7%

Karnataka

FY 2025-26 Revenue (K Mn)

1,083

Share (%)

10%

Total

FY 2025-26 Revenue (K Mn)

10,675

Share (%)

100%

Tamil Nadu

FY 2025-26 Revenue (K Mn)

3,075

Share (%)

29%

C4. Network Scale and Operating Capacity

3,200+	2,100+	78%
Customers	Sourcing Vendors	Repeat Order Rate
23	1,100+	800+
States & UTs Served	Pincodes Served	Daily Deliveries
9 Mn+	22 Mn+	66 days
Reserved Capacity (MTPA)	Cumulative MT Delivered	Net Working Capital Days

C3. Geographical Revenue Distribution - FY 2025-26

C5. Contract Manufacturing - Capacity and Supply Control

Contract Manufacturing is ArisInfras margin engine - contributing 47% of FY 2025-26 revenue and forming the backbone of the Companys supply assurance strategy. By securing long-term reserved capacity through partner plants, Arisinfra controls pricing, guarantees supply continuity and expands gross margins - without owning a single manufacturing asset.

The Strategic Logic

Conventional procurement is transactional - prices fluctuate, supply is uncertain and quality is inconsistent across vendors. Contract Manufacturing replaces this with structured, long-term capacity agreements that give Arisinfra priority access to plant

output at pre-agreed economics. The result is a supply chain efficiency of an asset-light one.

Reserved Capacity - FY 2025-26

6.1 Million MT 2.7 Million MT

Aggregates and RMC - the two highest-volume categories in construction materials - together account for 8.8 million MT of reserved capacity, providing the supply depth to serve large-scale developers, EPC contractors and government infrastructure projects simultaneously.

What Reserved Capacity Delivers

- Pricing efficiency - locked-in supply agreements insulate Arisinfra and its customers from spot market volatility across commodity cycles

- Supply reliability - priority plant access ensures project timelines are not disrupted by vendor-side availability constraints

that behaves like a vertically integrated model, with the capital

0.3 Million MT 9 Million+ MTPA

- Margin expansion - contract economics consistently outperform open-market procurement, contributing directly to gross margin improvement

- Quality control - long-term plant partnerships enable specification enforcement and quality monitoring that spot vendors cannot provide at scale

The 9 Million+ MTPA reserved capacity base is not just a procurement advantage - it is a competitive barrier. Replicating this network of plant relationships, at this scale, across these categories, requires years of counterparty development and transaction volume that a new entrant cannot shortcut.

C6. Developer-as-a-Service (DaaS) - Services Portfolio and GDV Scale

FY 2025-26 marked the formal launch of ArisInfras third and highest-margin business stream: Developer-as-a-Service.

With 9 active projects spanning approximately 2 million square feet, an estimated Gross Development Value of T1,200 Crore+ and live execution underway, DaaS represents a structural expansion of ArisInfras role in the construction value chain - from procurement partner to full-stack execution enabler for landowners and real estate developers.

The Problem DaaS Solves

In real estate development, project success is rarely constrained by demand. It is constrained by execution. Developers across India - particularly in the mid-market and emerging developer segment-face a common and compounding set of challenges: limited access to structured capital, fragmented coordination across contractors, vendors and lenders, dependence on sales- led cash flows to fund construction and delays in approvals, procurement and delivery. The consequence is familiar: stalled projects, cost overruns and capital locked for long periods with no corresponding value creation.

These are not problems of intent - they are problems of infrastructure. Most developers lack the integrated operating layer that converts a viable project into a predictably executed one.

Statutory Reports

The Arisinfra Approach

Through DaaS, Arisinfra acts as a single, integrated execution partner - aligning all elements of the project lifecycle under one accountable relationship. This includes:

- Capital structuring and financial coordination -

organising project finance in a manner that aligns funding with construction milestones rather than sales velocity

- Procurement planning and material supply -

deploying ArisInfras 2,100+ vendor network and multicategory sourcing infrastructure to guarantee supply continuity at competitive input costs

- Sales, marketing and collections - supporting developers on the demand side to improve sales velocity, pricing realisation and inventory movement

- Day-to-day execution and project monitoring -

real-time oversight of construction progress, quality compliance and documentation

Instead of managing multiple disconnected stakeholders across capital, procurement, execution and sales, developers interact with a single operating layer. The outcome is faster execution, better capital efficiency and materially improved project outcomes.

Portfolio Scale and Early Traction

The DaaS portfolio as at FY 2025-26:

Network-driven origination with no traditional customer acquisition cost. Every materials client in ArisInfras 3,200+ customer base is a potential DaaS mandate. Developers who transact with Arisinfra on B2B Supply are already familiar with the platforms execution capability - converting that relationship into a DaaS engagement requires trust, not prospecting. This creates a self-reinforcing origination engine with no conventional sales cost.

Dual revenue stream per project. Each DaaS engagement generates two revenue streams simultaneously: a services fee on GDV for execution management and exclusive materials supply flowing through ArisInfras procurement network. One relationship drives multiple revenue lines - a structural advantage that conventional project managers and conventional material suppliers cannot replicate individually.

Arisunitern Amalgamation

During the year, the Company initiated the amalgamation of ArisUnitern Re Solutions Private Limited into ArisInfra Solutions Limited, with the objective of simplifying the group structure and strengthening integration between the Companys materials supply and Developer-as-a-Service businesses.

The proposed amalgamation is expected to enable closer coordination across the real estate project lifecycle, improve cross-selling opportunities, enhance operational efficiency and support better utilisation of resources. By bringing services and materials under a more integrated structure, the Company aims to strengthen customer stickiness, improve revenue visibility and create long-term value for shareholders.

Strategic Significance for Arisinfra

DaaS is the highest-value layer of ArisInfras three-stream model for three compounding reasons.

First, it moves the Company from supply to execution - from being a participant in the construction value chain to being the operating layer that enables it. This is a fundamentally different competitive position, with deeper customer integration, longer relationship tenure and higher switching costs than any transactional supply relationship.

Second, it strengthens customer stickiness across the platform. A developer engaged under DaaS is simultaneously a materials procurement customer and a services client - creating multistream revenue from a single counterparty relationship that compounds with each project cycle.

Third, it drives margin expansion at the consolidated level. As DaaS grows - from a T98 crores today towards a structurally larger share - its 55-60% EBITDA margin profile will help lift the blended margin of the Arisinfra group, without requiring proportionate capital deployment.

DaaS is not the newest part of ArisInfras business. It is the part that makes everything else more valuable.

Metric	FY 2025-26
Active projects	9
Area under execution	2 million sq. ft.
Estimated GDV	Rs.1,267+ Crore
Execution cycle	18-24 months

The GDV figure captures the total end value of projects under ArisInfras execution umbrella - a forward indicator of the procurement volumes, execution fees and material flows that will progressively flow through the platform as these projects advance through their development cycles. Eight active projects at launch is not a pilot - it is early but real scale in a segment that is highly execution-driven and relationship-dependent.

What Makes DaaS Structurally Powerful

Three elements distinguish DaaS from a conventional project management or development management offering:

Integrated execution across procurement, construction and sales. Most development management models address one or two dimensions - procurement or project management or sales. DaaS aligns all three within a single operating system, eliminating the inter-party coordination failures that are the primary cause of project delays and cost overruns.

Statutory Reports

C7. Technology and Platform Capabilities - ArisFlow and Cara AI

Technology is the multiplier of ARIS operating model. Our proprietary platform digitises the full transaction lifecycle - automating how orders are processed, vendors coordinated, deliveries tracked, documents validated and data analysed in real time. Every step runs in one seamless flow, giving the business accuracy, speed and control at construction-grade scale.

This is not technology layered on top of operations. It is the mechanism through which ARIS creates, captures and compounds value across every transaction - across 10 material categories, 23+states and UTs and thousands of counterparties simultaneously.

AUTOMATED.

Operational Scale - What the Platform Delivers

The discipline of this technology foundation is validated by outcomes:

Metric FY 2025-26
Median order-to-invoice time	<20 minutes
SO/PO automation rate	>98%
AI document-tagging accuracy	>95%
Platform uptime	100%

To contextualise the efficiency: a 800+ daily delivery operation of this scale, run on traditional manual and paper-heavy models, would require over five times the back-office workforce. By replacing those processes with integrated digital workflows, ArisInfra runs this volume with a leaner team, faster turnaround and minimal errors - delivering over 5x back-office efficiency versus the paper-based equivalent.

ArisFlow - End-to-End Transaction Orchestration

ArisFlow is ARIS core transaction platform, purpose-built to digitise and automate the construction materials procurement

cycle from inquiry to reconciliation. The platform integrates multiple operational dimensions into a single system:

- Multi-Material Procurement - Coordinating

requirements across aggregates, RMC, steel, cement and finishing materials within a single workflow

- Vendor and Capacity Management - Allocating orders based on real-time capacity utilisation and vendor performance data, not relationship inertia

- Documentation and Compliance - Automating creation, validation and storage of project-related and statutory documentation across every delivery

- Delivery and Routing Optimisation - Minimising delays and logistics costs through dynamic vehicle routing calibrated to live field conditions

For customers, ArisFlow delivers faster procurement with greater price transparency. For vendors, it provides structured demand visibility and predictable order flows. For ARIS, it creates a proprietary transaction data asset - every order, price point, delivery outcome and vendor performance metric captured systematically, compounding in value with every cycle.

Cara AI - Intelligent Decision-Making and Operational Control

Cara AI is ARISs proprietary AI system that transforms operational data into real-time intelligence - enabling faster decisions, greater transparency and proactive risk management across the business. It operates across two integrated capabilities: Automated Document Intelligence and Real-Time Data and Reporting.

Automated Document Intelligence

Construction procurement generates high volumes of challans, invoices and compliance documents - historically managed manually, with reconciliation cycles stretching weeks and disputes eroding margins. Cara AI eliminates this:

- AI-powered verification extracts and validates key data from documents automatically

- Stamp detection ensures compliance with 95% accuracy

- Invoice processing compressed from 20+ days to under 24 hours

- Invoice and quantity disputes reduced to less than 1% - virtually eliminating revenue leakage

Real-Time Data and Reporting - ArisGPT

Cara AI powers ArisGPT, a conversational AI interface that delivers instant operational and financial intelligence via WhatsApp and the ArisInfra platform:

- Conversational queries - instant answers on delivery status, receivables, margins and invoices

- Real-time tracking - live visibility across deals, margins, credit exposure and operational KPIs

- AI-generated reports - dashboards and summaries compiled and delivered on-demand

- Anomaly detection - unusual trends in payments, receivables or margins flagged proactively

A field manager can ask How many trucks delivered today in Navi Mumbai Rs. and get an instant answer. Our CFO can pull a live receivables report with credit risk flags in seconds. Operational data becomes a decision-making tool, not a reporting exercise.

C8. New Category Expansion - Asphalt

In FY 2025-26, ARIS expanded into asphalt - a natural extension into infrastructure-critical materials. Asphalt Q4 FY 2025-26 revenue reached Rs.299 million, representing 88% sequential growth, while active customers nearly doubled from 15 in Q3 to 28 in Q4 FY 2025-26. The category strengthens ARISs infrastructure credentials and improves platform density across high-growth corridors.

D. OUTLOOK

Strategic Priorities for FY 2026-27 and Beyond

ARIS is positioned at the intersection of Indias infrastructure and real estate growth with a differentiated, technology- enabled operating model. The Companys strategic focus areas for the coming periods are:

- Deepen presence in high-margin, execution-driven categories: aggregates, RMC, asphalt and value-added construction materials will remain the growth focus, given superior unit economics and stronger supply control leverage.

- Expand Contract Manufacturing capacity: securing additional third-party plant partnerships in high-density project corridors will improve supply reliability and margin quality.

- Scale Developer-as-a-Service (DaaS): the services vertical - which delivered 55-60% EBITDA margins and 109% YoY revenue growth in FY 2025-26 - is the highest- value engagement model and will be expanded across new real estate projects, developers and geographies.

- Strengthen technology-led execution: continued investment in Cara AI, ArisFlow and the digital procurement platform to improve operational scalability, credit risk management and customer responsiveness.

- Improve working capital efficiency: the reduction in net working capital days from 110 (FY25) to 66 (FY26) demonstrates disciplined cash cycle management; the Company will target further compression.

- Geographic expansion: selectively entering high- growth infrastructure corridors and Tier 1 /Tier 2 real estate markets to reduce geographic concentration and capture broader market opportunity.

With a net-cash-positive balance sheet, strong profitability improvement trajectory and growing contribution from controlled and service-led revenue streams, ARIS is well- positioned to build a scalable, asset-light and technology- enabled operating layer for Indias next phase of construction growth.

E. RISK MANAGEMENT

The Board of Directors and the Management of ARISINFRA have established a structured risk management framework. Key risks and corresponding mitigation strategies are set out below.

Risk Category	Description	Likelihood	Impact	Mitigation
Customer Credit Risk	Customers may delay or default on payments; receivable cycles often longer than payable cycles.	High	High	AI/ML-based credit assessment; credit- linked pricing; invoice discounting; automated collection reminders; digitised proof of delivery.
Vendor Concentration	A few large vendors contribute a significant share of supplies, creating concentration risk.	Medium	High	Maintain diversified vendor network of 2,100+ vendors; expand contract manufacturing partnerships.
Geographic Revenue Concentration	54% Maharashtra, 29% Tamil Nadu - susceptibility to regional regulatory, political or climate risk.	Medium	High	Selective expansion into new geographies; cap single-state revenue concentration over time.
Product Concentration	Majority of revenue from aggregates and RMC; exposure to demand shifts in these categories.	Medium	High	Category diversification via asphalt, walling, construction chemicals and DaaS.
Vendor Reliability Risk	Vendors may fail to supply consistently; quality or delivery issues may affect fulfilment.	Medium	High	Diversified vendor network; contract manufacturing in high-demand clusters; vendor rating system.
Technology Adoption Resistance	Some stakeholders are slow to adopt digital procurement tools.	High	Medium	Integration with widely used messaging apps; onboarding support; demonstrable cost and time savings.
Regulatory and Compliance Risk	GST, environmental or mining regulation changes may affect sourcing or pricing.	Medium	High	In-house compliance team; periodic regulatory reviews; engagement with industry bodies.
Competitive Intensity	Well-funded new entrants may erode market share or compress margins.	Medium	Medium	Deepen customer relationships via DaaS; platform capabilities; network switching barriers.
Working Capital Strain	Receivable and payable cycles misalignment creates cash flow challenges.	High	High	Purchase bill discounting; supply chain financing; optimise material mix toward higher-return products.
Supply Chain Disruptions	Logistics disruptions due to fuel prices, strikes or weather.	Medium	Medium	Real-time delivery tracking; multiple logistics providers; contingency routing.
Data Security and Cyber Risk	Breaches or downtime can disrupt transactions and compromise customer trust.	Low	High	Advanced cybersecurity protocols; regular audits; disaster recovery systems; data protection compliance.
Key Customer Concentration	A few large customers contribute significant revenue share.	Medium	High	Geographic expansion; grow wallet share with EPC contractors and branded real estate players.

Arisinfra Annual Report 2025-26

F. INTERNAL CONTROL SYSTEMS AND THEIR

ADEQUACY

Arisinfra has established a robust internal control framework commensurate with the scale and complexity of its operations. The internal control system is designed to:

- Ensure accuracy, completeness and reliability of financial reporting

- Safeguard Company assets from unauthorized use or disposition

- Promote operational efficiency and adherence to Company policies

- Ensure compliance with applicable laws, regulations and internal codes of conduct

The internal audit is conducted by an independent audit team, which evaluates the design and operating effectiveness of controls across business processes, financial reporting and compliance. Significant observations and corrective actions are presented to and reviewed by the Audit Committee of the Board on a periodic basis.

The Companys technology platform - which underpins procurement, order management, delivery tracking, documentation, credit monitoring and financial operations - provides an additional layer of real-time control and auditability across transaction flows. Key digital controls include:

- Automated invoice and purchase order generation - reducing manual error and improving reconciliation speed

- Credit and exposure monitoring dashboards - live visibility on counterparty exposure and payment behavior

- Delivery challan digitization-end-to-end documentation and proof-of-delivery workflows

- Vendor and customer rating systems - data-backed supplier and counterparty assessments

The management reviews and updates internal control systems regularly to reflect changes in business conditions, process evolution and regulatory requirements. The Company remains committed to continuously strengthening its internal control framework to support sustainable, compliant and risk- mitigated growth.

G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE G1. Financial Performance Summary - FY 2025-26

Arisinfra Annual Report 2025-26

G2. Revenue Growth - Operational Drivers

Revenue from Operations grew 39.1% YoY from Rs.7,677 million to ^10,675 million in FY 2025-26. This growth was driven by three operational factors:

- Contract manufacturing volume capture: Contract manufacturing grew from Rs.2,562 million in FY 202425 to Rs.4,989 million in FY 2025-26 - a 95% year-on- year increase - reflecting the full-scale activation of reserved capacity across aggregates and the newly secured asphalt category. Contract manufacturing now represents the fastest-growing and highest revenue stream within the portfolio, having scaled from Rs.184 million in FY 2022-23 to Rs.4,989 million in FY 2025-26 - a 27x increase in three years.

- DaaS scale-up: Services revenue grew 109% YoY to Rs.980 million, driven by new project mandates including Nandi Hills, Wadhwa Wise City, Vaishnavi Residences, AVS Mumbai, Transcon group and the revival of Parth Gardenia.

- Network and customer base expansion: The customer base reached 3,292 across 23 states and Union Territories, growing from 431 in FY 2021-22 - a 7.6x expansion in four years. A 78% repeat order rate confirms that revenue growth is not dependent on continuous new customer acquisition - the existing base is deepening, not just widening.

G3. Margin Expansion - Structural

Gross margin expanded 252 basis points from 14.07% to 16.59%. EBITDA margin expanded 283 basis points from 6.59% to 9.42% - with absolute EBITDA nearly doubling from Rs.506 million to Rs.1,006 million. Two structural factors drove this expansion.

Portfolio mix shift toward higher-margin categories.

Contract manufacturing - ArisInfras highest-margin revenue stream - grew from 33% of revenue in FY 2024-25 to 47% in FY 2025-26, while B2B Supply - the lowest-margin stream -

declined as a proportion of the mix. Aggregates and Asphalt grew from 40% to 43% of revenue, while Steel and Cement contracted from 24% of revenue in FY 2023-24 to 13% in FY 202526. This reflects a deliberate repositioning toward categories where ArisInfras contract manufacturing relationships provide the greatest pricing and margin advantage.

DaaS contribution at structurally superior margins. DaaS carries 55-60% EBITDA margins - well above the consolidated average. Having scaled to Rs.980 million in FY 2025-26 and growing at 109% year-on-year, its margin accretion effect on the consolidated P&L is already measurable. As the Services Portfolio GDV of Rs.1,200+ Crore converts progressively to recognised revenue, DaaS is expected to be the primary driver of further consolidated margin expansion.

G4. Balance Sheet - Strengthened Post-IPO

Balance Sheet Metric	FY 2023-24	FY 2024-25	FY 2025-26
Net Working Capital Days	120 days	110 days	66 days
Debt to Equity (Net)	1.92x	1.25x	(0.09)x
Short-Term Borrowings (K Mn)	2,062	3,363	548
Long-Term Borrowings (K Mn)	678	30	Nil
Cash & Equivalents (K Mn)	6	3	1,014
Total Equity (K Mn)	1,421	2,358	7,510
ROE	(-14.08%)	3.18%	12.22%
ROCE	7.26%	25.91%	21.37%

The successful completion of the IPO (fresh issue of Rs.4,996 million gross proceeds) transformed the Companys balance sheet. ARIS is now net-cash positive with a Net Debt / Equity ratio of (0.07)x, providing material financial flexibility for organic and inorganic growth.

Statutory Reports

G5. Significant Business Developments - FY 2025-26

Month / Year	Milestone/ Order Wins	Rs. Mn
v
May 2025	Chennai Peripheral Ring Road - Aggregate Supply PO (22-month execution)	^ 185
V
July 2025	Wadhwa Wise City - MOU for 7 towers, 1.2 Mn sq. ft.	^^750
V
July 2025	Nandi Hills, Bangalore - DaaS landmark project win (ArisUnitern)	^1,000
V
Aug 2025	Vaishnavi Residences - Development management + material supply	^^560
V
Aug 2025	AVS Mumbai - Development management mandate	^^400
V
Aug 2025	Merusri Sunscape - IVC Road villa community partnership, 275,000 sq. ft.	42,500
V
Oct 2025	Transcon Group + Amogaya Projects - Real estate pipeline unlocked	4 1,20,000
V
Dec 2025	Buildmex-Infra - Asphalt supply order from Goswami Infra Projects	^^350
V
Mar 2026	Parth Gardenia revival via DaaS model (Bengaluru)	3,000 (GDV)
V
Mar 2026	Board approval: Amalgamation of ArisUnitern RE Solutions with ARIS	Structural

Arisinfra Annual Report 2025-26

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES H1. Workforce Snapshot of ARIS Group

284	81	29%
Total Employees H2. People Strategy	Women Employees	Women Representation

As ARIS scales its operating platform across B2B Supply, Contract Manufacturing, Developer-as-a-Service and technology-led

execution, the Companys people strategy remains focused on three pillars:

- Talent Acquisition and Retention: attracting and retaining skilled professionals across business development, operations, finance, technology, compliance and legal functions. Compensation structures are benchmarked to market and aligned with performance outcomes.

- Capability Building: targeted training programs to enhance functional expertise, operational discipline and technology adoption - particularly in digital procurement workflows, credit risk tools and data-driven decision-making platforms.

- Diversity and Inclusion : Women represent 29% of the total workforce, a metric the Company is committed to improving. Employee engagement initiatives including Womens Day programs and structured recognition processes foster an inclusive workplace.

I. KEY FINANCIAL RATIOS - SIGNIFICANT CHANGES

The following table presents key financial ratios for FY 2025-26 and FY 2024-25.

Ratio	Formula	FY 2025-26	FY 2024-25	YoY Change	Explanation
Debtors Turnover	Revenue - Avg. Trade Receivables	2.90x	2.37x	22%	Revenue grew 39.1% YoY while trade receivables grew 25.4% (T4,100 Mn vs T3,270 Mn). Improved collections discipline and higher contract manufacturing revenue (better credit cycles) improved receivables velocity.
Inventory Turnover	COGS - Avg. Inventories	162.96X	229.04X	-29%	Inventory increased from T16 Mn to T39 Mn (+142%) due to DaaS-related inventory.
Interest Coverage	EBIT - Finance Costs	3.82	1.30	195%	Near-doubling of EBITDA (T506 Mn + T1,006 Mn) combined with a 32.8% reduction in finance costs (T415 Mn + T279 Mn) driven by IPO-funded debt repayment
Current Ratio	Current Assets - Current Liabilities	2.64	1.41	87%	Current assets rose to T7,114 Mn while current liabilities fell to T2,695 Mn (from T4,484 Mn) following IPO-funded repayment of working capital borrowings and cash accretion of T1,014 Mn.
Debt Equity Ratio (Net)	Net Debt - Total Equity	(0.07)	1.26	-105%	Equity grew from T2,358 Mn to T7,510 Mn (IPO fresh issue: T4,996 Mn gross). Gross debt declined from T3,393 Mn to T548 Mn. Company is now net-cash positive
Operating Profit Margin	EBITDA - Revenue from Operations	9.42%	6.59%	+283 bps	Portfolio shift towards aggregates+asphalt (43% of revenue, highest EBITDA contribution in materials) and away from steel/cement. DaaS revenue (55-60% EBITDA margin) grew 109% YoY.
Net Profit Margin	PAT - Revenue from Operations	5.65%	0.78%	+487 bps	PAT grew 10x YoY from T60 Mn to T603 Mn: operating margin expansion + T136 Mn YoY reduction in finance costs post-IPO debt repayment.
Return on Net Worth (RONW)	PAT - Avg. Total Net worth	12.22%	3.18%	+904bps	PAT grew 10x but equity base also expanded substantially via IPO. RONW improved from 3.18% to 12.22%, reflecting underlying capital efficiency improvement.