Ashoka Buildcon Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

FORWARD LOOKING STATEMENT

This report may contain forward looking statements, which describe the Companys objectives, projections, estimates, expectations or predictions within the applicable Securities Laws and Regulations. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, based on any subsequent developments, information or events.

INDIAN ECONOMY

Driven by robust domestic fundamentals and targeted infrastructure spending, India continues to lead growth among major global economies. According to the Economic Survey 2025-26, real GDP growth is estimated at 7.4% for FY26. Over the FY26-FY27 horizon, growth is expected to moderate to a steady ~6.4%-6.6%, signalling a natural normalization toward structural capacity following a period of high expansion.

Growth remains primarily driven by resilient domestic demand, with private consumption contributing approximately 61.5%- 70% of GDP, providing insulation against global macroeconomic volatility. This consumption-led growth continues to support core sectors such as infrastructure, construction, and services.

Infrastructure spending has emerged as a key economic multiplier, crowding in private investment, generating employment, and enhancing long-term productivity.

Growth and inflation

Economic growth is expected to remain stable at ~6.5% over the near to medium term, while inflation is projected to ease toward the Reserve Bank of Indias target range of ~4%. The combination of steady growth and moderating inflation is expected to provide a stable macroeconomic environment, particularly beneficial for long-gestation infrastructure assets with inflation-linked revenue mechanisms.

Improving macro stability is expected to support demand growth across infrastructure segments including roads, urban mobility, airports, and logistics.

Interest Rates and Borrowing Costs

During FY2025-26, the Reserve Bank of India (“RBI”) continued its monetary easing cycle as inflation moderated and macroeconomic conditions remained supportive of growth. The policy repo rate was reduced during the year, resulting in improved liquidity conditions and a gradual decline in lending rates across the banking system. The easing in monetary policy, coupled with continued government emphasis on infrastructure investment, supported financing conditions for capitalintensive sectors such as roads, power transmission and urban infrastructure.

Looking ahead, the interest rate environment is expected to remain broadly supportive, although the pace of further easing will continue to depend on inflation dynamics, global commodity prices, geopolitical developments and external financial market conditions. Most multilateral institutions expect India to maintain robust economic growth while inflation remains broadly within the RBIs target range, supporting a stable financing environment over the medium term.

A stable or moderately accommodative interest rate environment is expected to:

• Reduce financing costs for new infrastructure projects and capital expenditure.

• Improve the valuation of long-duration infrastructure assets, including InvITs, toll roads and annuity-based concessions, through lower discount rates.

• Enhance the attractiveness of infrastructure investments for both domestic and international institutional investors.

• Support increased private sector participation in PPP projects and asset monetisation initiatives.

Notwithstanding the recent easing in monetary policy, financing costs in India continue to remain above those prevailing in most developed markets. Consequently, investors are expected to continue favouring infrastructure assets with predictable cash flows, strong contractual protections and stable long-term returns, including HAM, annuity-based and regulated-return assets. At the same time, assets with proven operating histories and resilient traffic fundamentals are likely to remain attractive as financing conditions improve.

Key Growth Drivers

Domestic Demand growth - Indias growth continues to be anchored in domestic consumption, with private consumption contributing ~61.5% of GDP, the highest in over a decade.

This provides insulation from global volatility and supports sectors such as construction, infrastructure, and services.

Public Capital Expenditure:-

The Government has sustained a strong focus on infrastructure-led growth, with capital expenditure increasing to Rs.12.2 lakh Crore in FY2027 Budget Estimates, reinforcing long-term productivity gains.

Services Sector and Digital Economy Strength

The services sector continues to contribute over 50% of GDP and has shown strong growth (~9% in FY2026), driven by IT services, GCCs, and financial services.

India remains one of the fastest-growing large economies globally, driven by:

• Strong private consumption (-70% of GDP)

• Continued government spending on infrastructure

• Revival in private sector capex cycle

• Export resilience and manufacturing push

INDUSTRY OVERVIEW

Indias infrastructure sector remains a central pillar of economic growth, supported by strong policy alignment toward long-term capital formation, logistics efficiency, and regional connectivity.

Indias infrastructure investment requirement is estimated at USD 400-500 billion over FY24-FY29, with significant funding needs across the roads, railways, metros, ports, airports, and renewable energy infrastructure.

Key structural trends shaping the sector include:

• Transition from public capex-driven growth to PPP and capital market-linked funding models

• Increased focus on asset monetisation and recycling (InvITs/REITs)

• Integration of logistics, manufacturing, and urban infrastructure

• Development of city-centric economic regions and Tier- 2/3 growth hubs

The infrastructure pipeline remains strong, supported by a ~Rs.17 lakh Crore PPP pipeline, providing long-term visibility for developers and EPC players.

The PPP model is witnessing renewed traction through Hybrid Annuity Model (HAM), BOT (Toll) revival and Structured risksharing frameworks. A dedicated PPP pipeline in roads alone (~13,400 km) has been identified for development over the next few years.

Highways

Sectoral growth in Indian road infrastructure slowed during FY25, constrained by reduced National Highway awarding activity. Procedural inefficiencies and delayed land acquisition hindered the transition of awarded projects into active order books, ultimately pushing back project commencement timelines and revenue realization.

Central government-led capital expenditure exhibited signs of near-term stagnation, while state governments emerged as incremental growth drivers. Several states accelerated investments in road infrastructure, supported by regional connectivity programs and a strong pipeline of projects. This shift has led to a gradual rebalancing of the opportunity landscape, with increasing dependence on state-level contracts.

Project Awarding and Execution Trends

The pace of highway construction is expected to moderate over the medium term, with execution levels projected at approximately 25 km/day in FY2026 and further declining to 21-22 km/day in FY2027. This reflects the cumulative impact of subdued project awarding in recent periods and persistent execution challenges across the sector.

Execution risks remain elevated, particularly in Hybrid Annuity Model (HAM) projects, where delays in achieving appointed dates, right-of-way constraints, and a higher share of greenfield projects have led to elongated project timelines. These factors continue to defer revenue recognition and impact cash flow visibility for developers.

Industry Outlook and Growth Drivers

Despite near-term headwinds, the medium-term outlook for the highway sector remains structurally positive. Developers with diversified project portfolios, strong balance sheets, and a higher proportion of operational assets are expected to demonstrate greater resilience in navigating execution challenges and liquidity pressures.

The government has set a highway construction target of 10,000 km for FY2027, in line with prior targets. However, execution in FY2026 has trailed expectations, with approximately 8,600 km constructed by March, reflecting a more cautious approach toward project awarding, including ensuring higher land availability and requisite clearances prior to bidding.

The National Highways Authority of India (NHAI) alone constructed 5313 km of highways in 2025-26 which was 15% higher than the target of 4620 km for the year. The other agencies involved in highway building fell short of their respective targets.

Private Sector Participation and Investment Pipeline Private sector participation is expected to strengthen meaningfully in FY2027, with investments estimated at approximately Rs.1 lakh Crore toward highway construction. Projects worth around Rs.35,000 Crore under the Build-Operate-Transfer (BOT) (toll) model are likely to be tendered in the early part of the year, with an additional Rs.50,000-60,000 Crore worth of projects under DPR finalization, expected to be bid out in the second half.

Overall, the government is targeting to bid out nearly Rs.75,000 Crore worth of highway projects under the BOT (toll) route in FY2027, indicating a strategic shift toward greater private sector participation.

The sector is witnessing a renewed emphasis on the BOT (toll) model, supported by improved traffic visibility, stable macroeconomic conditions, and increased investor appetite for operational assets. Total project awards in FY2027 are estimated at Rs.3-4 trillion, with a significant proportion expected to be executed under the BOT framework.

Highway awards have shown gradual traction, with approximately 1,951 km awarded during November FY2026. The government aims to exceed 7,500 km of awards by the end of FY2026 and further scale up to over 10,000 km in FY2027, reinforcing the long-term growth visibility for the sector.

Continued Growth Momentum in Toll Collections

Indias toll collection ecosystem has demonstrated robust growth, with total collections reaching approximately Rs.82,900 Crore in FY2026, reflecting a 14% year-on-year increase driven by higher traffic volumes, network expansion, and improved compliance. The widespread adoption of electronic tolling has been a key enabler, with FASTag accounting for over 98% of total toll collections and cumulative issuance reaching —11.9 Crore tags as of December 2025.

The sector continues to benefit from structural drivers, including rising vehicular movement and increased monetisation of highway assets, with toll revenues more than doubling over the past five years. Strong performance is also evident at the asset level, with key corridors witnessing significant traffic growth and revenue generation. Looking ahead, toll collections are expected to maintain an upward trajectory, supported by the revival of the BOT (Toll) model, increasing private sector participation, and continued expansion of the national highway network, with industry estimates indicating a potential scale-up toward Rs.1 trillion annual collections over the medium term.

Infrastructure Investment Trust (InvIT) market

Indias InvIT market has witnessed strong growth, with assets under management increasing significantly from around Rs.3.0 lakh Crore in FY2022 to approximately Rs.6.25 lakh Crore in FY2025, reflecting growing investor confidence in operational infrastructure assets. The sector is expected to continue this momentum, with AUM projected to reach Rs.7.25-7.50 lakh Crore by FY2026, driven by expansion across roads, transmission, warehousing, and renewable energy segments.

The roads and highways sector remains a key contributor to InvIT growth, with substantial monetisation potential from operational Hybrid Annuity Model (HAM) projects and government-led initiatives such as the National Monetisation Pipeline. The total monetisation opportunity from HAM assets is estimated to be significant, supported by a strong pipeline of projects expected to become operational over the next few years.

Toll road assets continue to demonstrate stable growth, with traffic and toll collections expected to grow at a steady rate of around 7% in FY2026. However, the availability of mature toll assets for monetisation is limited, as a large portion has already been monetised, which may moderate near-term opportunities in this segment.

From a financing perspective, InvITs have attracted strong equity participation, with substantial capital raised over the past three years and further equity mobilisation expected in FY2026-27. This reflects sustained interest from global investors, including pension funds and sovereign entities, indicating confidence in Indias infrastructure yield platforms.

The leverage profile of InvITs remains stable, with debt levels expected to remain around 49% of enterprise value in FY2026, supported by equity infusions and improved valuations. The borrowing mix continues to be dominated by bank financing, while bond market participation remains relatively moderate, highlighting scope for further capital market deepening.

Railways

Over the last year, Indian Railways has seen record-level capital expenditure, with the government committing around Rs.12- 13 lakh Crore in total rail-capex by 2030, aimed at new lines, doubling/tripling, electrification, and high-speed corridors.

During FY25-26, the focus has centered on completing the Eastern and Western Dedicated Freight Corridors (DFC), upgrading track gauges, and advancing safety initiatives like Kavach and section doubling. These developments have significantly expanded the EPC order pipeline for bridge and track contractors. Additionally, the Mumbai-Ahmedabad HighSpeed Rail project and emerging semi-high-speed corridors have carved out a niche, high-value market for tunneling, viaduct construction, and station modernization. Tenders for these major projects are being contested in 2025-26 under Public-Private Partnership (PPP) and Hybrid Annuity Model (HAM)-like EPC frameworks.

The Mumbai-Ahmedabad High-Speed Rail project and several new semi high speed sections have created a niche but high-value market for tunnelling, viaduct-construction, and station-modernization EPCs, with tenders being bid in 2025-26 under public-private partnership and EPC-HOD (Hybrid-Annuity-like) frameworks.

Railway capex has grown rapidly over the last five years, with the sector now shifting from pure “Brownfield-upgrades” to corridor- based and new-line EPC packages, often bundled with stations and freight-handling facilities.

The tender design is increasingly favouring EPC, EPC-plus-O&M, and thin-annuity/PPP-type models, reducing the need for highly leveraged BOT-style development and making the asset class more attractive to construction-focused infrastructure players.

Source: https://infra.economictimes.indiatimes.com/live-blog/ infra-railways-budget-2026-highlights-12-2-lakh-Crore-capex- high-speed-rail-logistics-and-urban-push/127799410

Water Sector

Inland waterways are being positioned as a cost-efficient, low-carbon freight option, with the government targeting a 12% share of inland waterways and coastal shipping in freight by 2047, supported by the Coastal Cargo Promotion Scheme and enhancement of National Waterways.

Over the last 12 months, the focus has been on deepening and dredging of key National Waterways (such as NW-1 on the Ganga and NW-2 on the Brahmaputra), alongside the development of multi-modal terminals and river-crossing infrastructure that link waterways to the road and rail networks.

This has generated a steady pipeline of projects for bridge- and causeway-construction EPCs, river-training works, and flood-resilience structures, particularly in the Indo-Gangetic belt and parts of the North-East, where water-sensitive designs are critical.

The National Infrastructure Pipeline (NIP) includes several thousand Crore of spending on waterways-linked connectivity and port-connectivity road/rail-EPC, with large-scale projects being rolled out under the Gati Shakti framework that integrates roads, rails, ports, and waterways.

Institutional investors and development banks are increasingly co-financing these projects through blended-finance and green-infrastructure vehicles, which has improved the credit profile of EPC-contractors exposed to waterways-linked works. Source: https://www.nimbusias.com/transport-infrastructure- in-india-status-progress-and-challenges/ https://www.pib.gov.in/PressReleasePage. aspx Rs.PRID=2241612&reg=3&lang=1

Airport Sector

India has become the worlds third-largest domestic aviation market, with around 160-165 operational airports in 2025-26, up from about 74 in 2014, and traffic exceeding 400-450 million passengers per year, with projections of 600-650 million by FY31.

The sector has seen a mix of greenfield airport development in tier-2 and tier-3 cities, brownfield upgradations of metro-airports, and the expansion of cargo-handling infrastructure, all supported by the UDAN-regional-connectivity program and a growing cargo-and-logistics cluster around major hubs.

Union Budget Highlights for the Infrastructure Sector

Public capital expenditure has increased substantially from Rs.2 lakh Crore in FY2014-15 to Rs.12.2 lakh Crore (BE) in FY2026-27, underscoring the Governments continued emphasis on infrastructure creation and its multiplier impact on economic growth. Recent policy initiatives, including the proposed Infrastructure Risk Guarantee Fund and City Economic Regions (CERs), are expected to improve project viability and attract private investment.

Institutional mechanisms such as the National Investment and Infrastructure Fund and the National Bank for Financing Infrastructure and Development have played a critical role in mobilising domestic and global capital, strengthening longterm financing availability. Additionally, asset monetisation through InvITs and REITs has unlocked over Rs.1.5 lakh Crore, facilitating capital recycling and enhancing investor participation in infrastructure assets.

1. COMPANY OVERVIEW

1.1. Business Overview for the Fiscal Year 2025 - 26

Standalone revenue for FY26 declined ~17% to Rs.5,812 crore (FY25: Rs.7,061 crore), impacted by extended monsoons, delayed land and contract approvals, and lower tender activity from authorities.

For the year ended March 31, 2026, the Company reported an EBITDA of Rs.636 Crore (11% margin) and a PAT of Rs.320 crore (5.5% margin).

Total Order Inflow during the year FY2026 stood at Rs.6,279.00 Crore, where roads and bridges comprised of Rs.1,446.68 Crore and Power T&D Projects worth Rs.844.34 Crore, Railways Projects worth Rs.1,362.85 Crore, Smart Infra Projects worth Rs.1,594.16 Crore and Overseas Projects worth Rs.986.04 Crore.

Total Order book as on March 31, 2026 stood at Rs.15,312 Crore.

a. Updates on Asset Monetization

Asset monetization is undertaken to unlock value from long-lived, capital-intensive assets and convert them into near-term cash inflows. Such monetization facilitates balance-sheet strengthening, reduction in leverage, and improvement in liquidity without the need for fresh equity or excessive debt.

In FY2026, Ashoka Buildcon completed the sale of 5 HAM-model road-project SPVs with the transaction formally concluded in September 2025. The aggregate gross monetization consideration for these 5 HAM SPVs is Rs.1,146 Crore; out of this, Rs.1,050 Crore has already been received, while the balance of Rs.96 Crore is structured as contingent consideration, tied to certain compliances and regulatory milestones.

The buyers are Epic Concessiones 2 Private Limited, Infrastructure Yield Plus II, Infrastructure Yield Plus IIA, and India Infrastructure Yield Plus II, which are institutional infrastructure-focused funds that value the long-term annuity cash flows from HAM-roads.

Alongside the HAM deals, Ashoka Buildcon has also completed the monetization of 5 BOT (toll-based) highway SPVs, with the transaction closing in November 2025, at the aggregate consideration for the 5 BOT SPVs is Rs.1,814 Crore and the buyer of these BOT assets is Maple Infrastructure Trust.

The proceeds of above two monetisation have been deployed to fully exit SBI Macquarie from Ashoka Concessions Limited, reduce working-capital borrowings, and fund selective internal acquisitions (for example, 100% purchase of Jaora-Nayagaon Toll Road Company Private Limited), thereby improving equity control and capital structure.

As a result of this BOT sale and the prior HAM monetization, Ashoka Buildcons consolidated debt has been reduced from around Rs.4,910 Crore to roughly Rs.2,722 Crore, and the company has gained full control over Ashoka Concessions Limited, making it a 100% subsidiary.

Having completed the monetization of 5 HAM and 5 BOT SPVs, Ashoka Buildcon continues to focus on monetizing the remaining 6 HAM SPVs in its portfolio. While transactions were earlier targeted for completion between April and June 2026, the company extended the completion timelines, with four assets now targeted for closure by September 2026 and the remaining two expected to follow through Q3 and Q4 of FY27.

b. Project Updates

The updates on the Projects won and other developments as regards the Projects undertaken by the Company and its subsidiaries are covered in the Boards Report.

c. Order Book

As of March 31, 2026, the Company maintained a robust order book of Rs.15,312 Crore.

• Roads & Railways (66%/Rs. 10,123 Cr):

Comprises EPC Road projects worth Rs.7,084 Crore HAM projects totalling Rs.1,618 Crore, and Railway projects accounting for Rs.1,420 Crore.

• Power Transmission & Distribution (13%/Rs.1,982 Crore): Continues to represent a strong core segment.

• EPC Buildings (4%/Rs.562 Crore): Further diversifies the order portfolio.

The Company remains committed to driving sustainable growth across its core EPC verticals, including highways, railways, power generation and transmission, and buildings.”

d. Innovation, Quality, Safety and Environment

The Company continues its focus on the latest technology, innovative construction practices as well as ensuring high quality in its entire work. Your Company is also conscious of the threat posed by global warming to our planet and therefore takes its responsibility towards the sustainable construction.

Your Company is very much sensitive and concerned about the health and safety of all its employees and other stakeholders. QHSE Policy and procedure have been framed and are implemented at all Project sites and offices.

The Company is dedicated to adopting internationally recognised best practices and adhering to all relevant health, safety and environmental regulations across its operations. It ensures compliance with occupational health and safety laws, regulations and contractual obligations concerning the wellbeing of employees and subcontractors at project sites and manufacturing facilities. The Company identifies the training needs of employees, Project site Practical issues and their demonstration, incident reporting and investigation as an integral step to understanding the potential areas of improvement.

In this regard, your Company has the following accreditations:

> Integrated Management System comprising of Certification of ISO 9001: 2015, ISO 14001: 2015 and ISO:45001:2018

> Quality Management System ISO:9001:2015

> Environmental Management System ISO 14001: 2015;

> Occupational Health and Safety Management System; ISO:45001:2018; and

> Green House Gases Monitoring and Measurement and planning for reduction management system ISO 14064.1:2018 & ISO 14064.2:2019

e. Resources and Liquidity

The finance cost had increased due to higher usage of bank credit limit, interest bearing Mobilization Advance from clients, though decrease in interest rate as compared to previous year. The total consolidated project debt of various subsidiaries of the Company (road project SPVs developing & managing road concessions for NHAI and state authorities) stood at Rs.6796 Crore as on March 31, 2025. Post the realization of sale proceeds, the working capital has dropped by about 50% as the Investment has been liquidated thus reducing the short term borrowing with the free-flow receipt of the sale proceeds in H2 FY2026.

The absolute Interest cost have gone up due to increased borrowing but due to a proper mix of products like Working Capital Demand Loans, Supply Chain Finance, Commercial Papers, NCDs and Corporate Credit Cards have kept the effective rate of borrowing at reasonable levels. The Company is comfortable in sourcing for the funding of the ongoing and upcoming projects.

The Long Term rating of the Company is ‘AA/Stable by Acuite. The Company is thereby comfortably placed in its working capital financing.

f. Challenges and Risks

(a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk interest rate risk, currency risk and product/commodity price risk. Financial instruments affected by market risk include borrowings, trade and other payables, security deposit, trade and other receivables, deposits with banks etc.

i. Interest rate risk:

The Companys activities exposed to interest rate risk. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In addition, an increase in interest rates may adversely affect ability to service long-term debt and to finance new projects, all of which in turn may adversely affect results of operations. The Company dynamically manages interest rate risks through a mix of fund-raising products and investment products across maturity profiles and currencies within a robust risk management framework.

ii. Foreign currency risk:

The functional currency of the Company is Indian Rupees. Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companys exposure to the risk of changes in foreign exchange rates is very less and relates primarily to the Companys creditors for capital expenditures. The Company regularly monitors Foreign Currency exposure and movement in forex rates for appropriate decision. The Company has approved Forex Hedging Policy.

iii. Commodity Price Risk:

While executing certain projects, the Company has to buy material which contains precious metals i.e. aluminum, copper, etc. For the same, the Company is able to manage its exposure to price increases in project materials through bulk purchases and better negotiations and hedging wherever possible.

The company proactively manages these risks through forward booking, inventory management and proactive vendor development practices. The risk of price fluctuations in commodities is also mitigated to certain extent based on the price escalation clause included in the contracts with the customers and through commodity hedging.

(b) Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash flow and collateral obligations without incurring unacceptable losses. The Company constantly monitors the liquidity levels, economic and capital market conditions and maintains access to the lowest cost means of sourcing liquidity through banking lines, trade finance and capital markets. In addition, processes and policies related to such risks are overseen by senior management.

(c) Regulatory Risk

The Company executes various Projects across the Country and overseas. In view of this, the Company is exposed to risks attached to various statutes, laws and regulations of various states and countries. The Company is mitigating these risks through regular review of legal compliances carried out through internal control and audits and advise from various experts in respective fields.

(d) Human Resource Risk

Retaining the existing talent pool and attracting new talent are major risks. The Company has initiated various measures including training and integration of learning and development activities. The Company has formulated various schemes in the interest of the employees.

*. Internal Control and its adequacy

At Ashoka Buildcon Limited, Internal Controls are a key pillar for compliance of Corporate Governance. It operates through ERP system - SAP and has implemented adequate internal controls, which safeguard the Companys resources and ensures efficiency in operations, effective monitoring systems, and compliance with applicable laws and regulations.

The Company has well-placed function-wise detailed internal control system, and that the transactions are authorized, recorded and reported correctly. The Companys internal financial control framework commensurate with the size and operations of the business and is in line with requirements of the Companies Act, 2013.

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone and consolidated financial statements for external purposes in accordance with Indian Accounting Standards. Internal control systems are aligned to prevent frauds and errors, if any.

A companys internal financial control over financial reporting includes following policies and procedures:

> Maintenance of records accurately and fairly;

> provides reasonable assurance that transactions are recorded as necessary to permit preparation of standalone, consolidated financial statements in accordance with IND AS, and that receipts and expenditures of the company are being made only in accordance with authorization of matrix approved by management.

> provides reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

The Management have approved, adopted and implemented various policies, documents/ standard operating procedures which assist the various departments of the Company in ensuring accountability, accuracy, controls and transparency within the organization. The Audit Committee periodically reviews the adequacy of the internal control systems and provides direction and guidance.

The internal audit plan is approved by Audit Committee which covers more than 80% of expected annual business every year. The Audit Plan includes a combination of audit of internal control systems and operational audits. Audit of internal control system focuses on the adequacy of internal controls in the Company and also the reporting system in various functional areas like Procurement, Project execution & Billing, Construction Equipment and vehicles, accounts, human resource, administration and other departments.

The audit of information technology general control (ITGC) is also done every year by Internal auditors and Statutory auditors of the Company.

The findings of the Internal Audit and Internal Control system are shared by internal auditors with the Audit Committee by way of presentation. The Audit Committee has expressed its satisfaction with the adequacy of the Internal Control systems and procedures of the Company for monitoring these systems.

Whistle-blower mechanism, an important element of the internal control system, encourages the directors and employees to report genuine concerns, misconduct, or fraud without any fear of unfair treatment or punishment with direct access to the Chairman of the Audit Committee in appropriate and exceptional cases.

h. Human Resource Management

The Human Resource Department is dynamic and there have been developments and emerging practices followed by HR Dept. Further there have been addition of new verticals in the organization creating more business opportunities. The Human Resource Department of the Company has significantly invested in its employer brand to attract and retain top talent and is focused on communicating the Company culture, values, and employee value proposition to differentiate themselves and appeal to prospective candidates. For the Financial Year 2025-26, the Companys focus remained on attracting and retaining the right talent to support business objectives, improve governance, and foster an inclusive work culture.

Training and development delivered via virtual mode i.e. e-learning offers the chance to the organization to deliver training at far reduced cost than traditional methods which require physical space and provisions. However, extensive skill development programs are conducted for site supervisors and vehicle operators to enhance and upgrade their skill sets. Commitment to governance was demonstrated through comprehensive code of conduct training, ensuring ethical standards across all the Offices and Project sites.

Ashoka Buildcons Learning Environment (‘ABLE) offers several benefits, including flexibility to learners to access learning content at their convenience, pace, anytime and anywhere. The ABLE provides opportunities for individuals to update their skills and knowledge and allows our professionals to acquire knowledge in their domain. This platform incorporates multimedia elements such as videos, simulations, and interactive quizzes. These features make the learning process more engaging and enhance understanding by catering to different learning styles for up-skilling and reskilling of our employees.

i. Financial Overview Standalone Financial Overview

		All figures in Rs. Crore
Particulars	Fiscal 2026	Fiscal 2025
Revenue from Operations	5,811.66	7061.43
Other Income	140.54	126.37
Total Income	5,952.20	7187.80
Expenses
Cost of Material Consumed	1,821.32	2,882.22
Construction Expenses	3,031.81	3,140.31
Employee Benefits Expenses	230.05	240.46
Finance Expenses	312.97	296.35
Depreciation and Amortisation	97.85	98.20

 

Particulars	Fiscal 2026	Fiscal 2025
Other Expenses	232.92	251.55
Total Expenses	5,726.92	6,901.09
Profit before exceptional items	225.28	278.70
Less -Exceptional Items	164.72	-
Share of Profit from Partnership Firms and AOPs	0.17	0.20
Profit /(Loss) before Tax	390.18	278.90
Tax Expense:	69.74	81.66
Current Tax	104.63	79.46
Deferred Tax	(34.89)	2.20
Add - Other Comprehensive Income	1.89	(0.34)
Profit for the year	322.32	196.90

Revenue from Operations

During the Fiscal 2026, on Standalone basis, your Company registered revenue from operations of Rs.5,811.66 Crore as against Rs.7,061.43 Crore in Fiscal 2025, showing a decrease of ~17% mainly due to extended monsoons, delay in contract documentation and land approvals, slower pace of bids floated by the Authority, etc.

Other Income

Other income for the Fiscal 2026 stood at Rs.140.55 Crore as compared to Rs.126.37 Crore in Fiscal 2025, with increase of ~11%, mainly due to interest on loans granted to subsidiaries and increase in other non-operating income.

Cost and Expenses

Cost of Material Consumed and Construction Expenses decreased by ~19% to Rs.4,853.13 Crore in Fiscal 2026 from Rs.6,022.53 Crore in Fiscal 2025, in line with reduction in revenue from operations. There is a pressure of increase in prices of material and cost of construction.

Employee Benefit Expenses

Employee Benefit Expenses decreased marginally by ~4% to Rs.230 Crore in Fiscal 2026 from Rs.240.46 Crore in Fiscal 2025.

Other Expenses

Other expenses decreased to Rs.232.92 Crore in FY 2026 from Rs.251.55 Crore, by ~8%, mainly due to decrease in rent, insurance, vehicle hire charges & misc. expenses. The other expenses mainly comprise of rent, rates and taxes, insurance, repairs and maintenance, traveling and conveyance, legal & professional expenses, CSR, donation etc.

Depreciation and Amortisation Expenses

Depreciation decreased by ~0.4% to Rs.97.85 Crore in Fiscal 2026 from Rs.98.20 Crore in Fiscal 2025, Margin reduction due to lower book value of the assets. Capex for the year stood at Rs.67.14 Crore as compared to Rs.90.57 Crore in previous year.

Finance Costs

Finance costs increased by ~5.75% to Rs.313 Crore in Fiscal 2026 from Rs.296.35 Crore in Fiscal 2025. The finance cost comprises of interest on term loan, working capital loan, Commercial Papers, Non-convertible Debentures, bank guarantee charges and other borrowing costs. Finance cost has increased mainly due to increased working capital cycle on account of nature of projects where initially working capital requirement is more. The cost also increased due to increase in interest bearing mobilisation advances taken from client for execution of projects.

Exceptional Items

The Company reported exceptional items aggregating to Rs.16,472.46 lakhs during FY 2025-26, primarily comprising a gain on sale of stake in BOT/HAM subsidiaries of Rs.11,212.99 lakhs and write-back of excess provision towards investor obligations of Rs.9,532.28 lakhs. These gains were partly offset by impairment on loans to certain subsidiaries of Rs.3,749.54 lakhs and recognition of past service cost relating to gratuity and leave encashment of Rs.523.27 lakhs.

Key Financial Ratios - Standalone Financial Statements.

Particulars	Fiscal 2026	Fiscal 2025
Current Ratio	2.15	1.82
Debt Equity Ratio	0.49	0.51
Debt Service Coverage Ratio	0.84	0.72
Interest Service Coverage Ratio	2.03	2.27
Inventory Turnover (No of Days)	60 days	50 days
Trade Receivable Turnover ratio	1.28	1.85
EBIDTA (%)	10.69%	9.37%
Net Profit Margin (%)	5.38%	2.74%
Return on Equity (excluding exceptional item)	6.92%	5.03%

Consolidated Financial Overview

All figures in Rs. Crore

Particulars	Fiscal 2026	Fiscal 2025
Revenue from Operations	7,519.88	10,036.63
Other Income	183.69	168.79
Total Income	7,703.57	10,205.42
Expenses
Cost of Material Consumed	1,874.23	2,978.69
Construction Expenses	3,041.58	3,371.66
Employee Benefits Expenses	415.76	446.18
Finance Expenses	911.95	1,245.31
Depreciation and Amortisation	160.64	289.71
Other Expenses	305.97	320.00

 

Particulars	Fiscal 2026	Fiscal 2025
Total Expenses	6,710.13	8,651.55
Profit/(loss) from associate and joint venture	(4.77)	0.91
Less -Exceptional Items		-
Profit /(Loss) before Tax	988.67	1,554.78
Tax Expense:
Current Tax	211.25	282.94
Deferred Tax	345.29	(461.73)
Add - Other Comprehensive Income	6.38	1.37
Profit for the year	2,582.18	1,733.57

Revenue from Operations

During the Fiscal 2026, on a consolidated basis, your Company registered revenue from operations of Rs.7,519.88 Crore as against Rs.10,036.63 Crore in Fiscal 2025, showing decrease of ~25%, mainly due to reduction in turnover at SFS level, sale of HAM and BOT projects and reduction in sale of real estate business as compared to previous year.

Other Income

Other income for the Fiscal 2026 stood at Rs.183.69 Crore as compared to Rs.168.79 Crore in Fiscal 2025, showing increase of ~9%. The nature of other income primarily constitutes, interest income on deposits with banks, profit on sale of assets and investments etc.

Cost of Material Consumed and Construction Expenses

Cost of Material Consumed and Construction Expenses decreased by ~22% to Rs.4,915.81 Crore in Fiscal 2026 against Rs.6,350.35 Crore in Fiscal 2025. This cost has decreased proportionately in line with decrease in turnover.

Employee Benefit Expenses

Employee Benefit Expenses decreased by ~7% to Rs. 415.76 in Fiscal 2026 against Rs.446.18 Crore in Fiscal 2025, primarily on reduction in cost due sale of HAM & BOT projects during mid of FY 2026.

Other Expenses

Other expenses decreased by ~4 % in Fiscal 2026 to Rs.306 Crore as compared to Rs.320 Crore in the previous financial year. The other expenses mainly comprise of rent, rates and taxes, insurance, repairs and maintenance, traveling and conveyance, legal & professional expenses, donation etc. Increase in cost is mainly due to provision of expected credit loss on receivables (Refer Note 54) and marketing & advertisement expenses.

Depreciation and amortisation expenses

Depreciation and amortization expenses dropped 45% to Rs.160.64 crore in FY26 from Rs.289.71 crore in FY25. This decrease was primarily driven by sale of BOT assets, reduced additions of machinery, construction equipment, and vehicles to the fixed asset block, and reduction in charge for license to collect toll as compared with previous year.

Finance Costs

Finance costs decreased by ~27% to Rs.911.95 Crore in Fiscal 2026 from Rs.1245.31 Crore in Fiscal 2025, due to exclusion of loans of HAM & BOT SPVs, monetised during the year (Refer to Note 65(i)).

The finance cost comprises of interest on term loan, working capital loan, bank guarantee charges, other borrowing costs and unwinding of discount on financial liabilities.

Exceptional Items

Exceptional items for FY 2025-26 stood at Rs.2,14,367.03 lakhs, primarily driven by a gain of Rs.2,14,892.09 lakhs on sale of stake in BOT/HAM subsidiaries, carrying value on account of loss of BOT SPVs at consolidated level, partially offset by past service cost of Rs.525.06 lakhs. In comparison, FY 2024-25 reported no exceptional items, resulting in a significant year-on-year increase in exceptional income during FY2025-26.

Disclosure of Accounting Treatment

The Company has consistently followed a treatment that has been prescribed in Indian Accounting Standards in the preparation of financial statements and the same shows true and fair view of the financial statements.

	For and on behalf of the Board of Directors of
	Ashoka Buildcon Limited
	Sd/-
	(ASHOK KATARIYA)
Place: Mumbai	Chairman
Date: August 11, 2026	(DIN: 00112240)