B.L.Kashyap & Sons Ltd Management Discussions

Introduction

Over the years, with a steadfast focus on quality execution, B L Kashyap (referred as ‘BLK or ‘the Company), has built a formidable reputation in the civil construction and EPC contracting space in India, impacting the changing cityscapes across the National Capital Region (NCR), Bangalore and other locations. Many of its sites have emerged as marquee constructions. In the period post 2010, the Companys growth was affected by a period of slowdown in the construction sector and certain issues with return on investments in its foray into the real estate business. Consequently, the Company went into Corporate Debt Restructuring (CDR) in 2014. Subsequently, the Company had to focus on its core construction business operating with stringent controls, preserving limited capital with no access to external debt from financial institutions. The Company successfully maneuvered through those challenging times and significantly improved its balance sheet position by 2019. Unfortunately, this coincided with the widespread COVID driven economic slowdown that adversely affected the construction sector and B L Kashyap was no exception. Since 2021, with a firm intent to rebuild with a clear vision of targeted growth levels, the Company has been steadily recovering and building the base for the impetus to move to the next stage of its developmental journey.

The Financial Year (FY) 2025 has been a firm step in that direction.

While dealing with some of the legacy financial issues, operationally, the Company stays steadfast in its vision to be an industry leader by delivering the highest level of client satisfaction through value engineering excellence, skilled teams, systems, superior construction quality, continuous innovation, and timely project delivery. This translates into a mission that is focused on delivering high quality construction and technical management services to clients. In this endeavor, the Company strives to foster a business ethos that is built on compassion, continuous learning, adherence to systems and organizational development while upholding the highest ethical standards. There is a strong commitment to exceed the expectations of all stakeholders.

This vision and mission of the company is driven by three core values. First, is the commitment to excellence, which is the focus to attain the highest benchmark in project execution through a proficient and committed team. Second, is the culture of pursuing ethical practices where one upholds an ethical work environment and achieves exceptional standards in safety protocols. Third, there is a constant endeavor to spearhead innovations in construction technology to optimize project execution.

With this organizational ethos well entrenched, the Company has steadily chalked its revival path over the last few years and is well positioned to embark on the next round of growth. The economic environment and construction market dynamics in India has also been positive and is providing growing opportunities for companies like B L Kashyap.

Today, the Company has traversed a successful journey as an EPC player and has built a solid foundation for pursuing the next round of growth. Since inception, as on 31 March 2025:

The Company has delivered a total of over 140 million square feet of building works, that bear testament to its capabilities in making exemplary buildings with attractive facilities and amenities

Bearing testimony to its experience and expertise in construction efficiency is the over 250 projects completed successfully to the satisfaction of a marquee client base. Some marquee projects delivered include - Flipkart Campus at Embassy Tech Village, Bengaluru; Embassy Manyata Campus Blocks D1 and D2, Bengaluru; The Indian School of Business (ISB), Hyderabad; Green

Factory Hero Motocorp, Rajasthan; Select City Walk, Mall in Delhi; and DLF Downtown in NCR Region.

Over 1 lakh tons of steel structures delivered across India

The execution capability is supported by over 1300 strong workforce comprising management staff and workers, who have the expertise and experience to ensure quality in project delivery

Macro-Economic Overview

Indias economy continues to grow at a steady and confident pace, standing out as the fastest growing major economy in the world.

In FY2025, Gross Domestic Product (GDP) growth was estimated at 6.5%. The Reserve Bank of India (RBI) expects the same growth levels to continue in FY2026. This performance comes at a time when the global economy faces uncertainty, making Indias steady momentum even more significant. Supported by strong domestic demand, easing inflation, robust capital markets and rising exports, the broader economic picture is one of resilience and balance. Key indicators such as record foreign exchange reserves, a manageable current account deficit, and increasing foreign investment reflect growing global trust in Indias long-term prospects. Together, these trends show an economy that is not only expanding but doing so with strength across sectors.

Source: National Income Accounts Data, MOSPI (Govt. of India)

Chart A shows that after the COVID affected blip in FY2021; the Indian economy has delivered strong growth year on year since. This sustained performance is being driven by strong domestic demand. Rural consumption has picked up, city spending is rising, and private investment is on the upswing. Businesses are expanding their capacities, with many operating near their maximum output levels. At the same time, public investment remains high, especially in infrastructure, while stable borrowing conditions are helping firms and consumers make forward-looking decisions. Global conditions, in contrast, remain fragile. The United Nations has described the world economy as being in a "precarious moment," citing trade tensions, policy uncertainties, and declining cross border investments. Amid this, India continues to stand out as a bright spot, with global institutions and industry bodies expressing confidence in its growth prospects. Over the past decade, Indias economic size has expanded sharply. In FY2015, the GDP at current prices was 106.57 lakh crore. This figure is expected to increase three times in a span of 10years recording 331.03 lakh crore in FY2025. As per estimates by the global research firm Mordor Intelligence, the India infrastructure sector market is valued at USD 190.7 billion in 2025 and is forecast to reach US$280.6 billion by 2030, registering an 8.0% CAGR. Momentum is anchored in the National Infrastructure Pipeline, which targets investments worth US$ 1.34 trillion by 2025, and the Union Budget FY2026 maintains capital expenditure at 3.1% of GDP. Robust spending on highways, rail corridors and urban transit, supplemented by large-scale utility upgrades and fast-growing digital networks. Evolving PPP models, deeper municipal bond markets and sector-specific reforms are broadening the financing base, while technology adoption is trimming project timelines and lifecycle costs.

New construction held 79% of the India infrastructure sector market share in 2024, reflecting India s infrastructure gap and population growth. High-speed rail viaducts, greenfield airports, and 24?7 water-supply grids dominate the pipeline. Renovation, though smaller, is climbing with an 8.9% CAGR as owners pursue energy retrofits and capacity augmentations. The overall growth in infrastructure development is providing strong impetus to the construction industry. Chart B shows that over the last three years, the Indian construction sector in real terms has grown over 9% on annual basis. In FY2025, the sector registered robust 9.4% growth.

India is experiencing an unprecedented economic transformation, positioning itself as a global powerhouse. With the GDP expected to surpass US$5 trillion in the coming years (Source: IMF, World Bank), the real estate sector is emerging as one of the biggest beneficiaries of this boom. With India projected to become a US$33 trillion economy by 2047 (Source: Economic Survey of India 2023), real estate is poised to contribute over 15% to the national GDP. The sector, currently valued at approximately US$1.72 trillion, is expected to reach US$5.8 trillion in the next two decades (Source: NITI Aayog, Knight Frank Report 2023). This surge is attributed to evolving urban lifestyles, increasing demand for sustainable housing, and the expansion of commercial spaces.

As economic prosperity rises, so does the demand for quality housing. Estimates suggest that India will require nearly 230 million housing units over the next 25 years to accommodate urbanization (Source: JLL India, CRISIL Report). The Indian government is heavily investing in large-scale infrastructure projects, which are opening new investment corridors where there is significant potential for associated real estate development. Much of BL Kashyaps activities services construction requirements of the Indian real estate sector and there is considerable opportunities in the market today, and in the next few years.

It is important to highlight that the buildings segment, where BL Kashyap primarily operates, has witnessed strong growth since the COVID period. According to estimates by Knight Frank, the residential market has had a tremendous run with annual sales volumes in the primary market growing at an annualized rate of 23% since 2020. The positive sentiment around the economy has been the primary driver of occupier activity in the office market, sustaining the momentum gathered since 2022 and culminating in record annual transaction volumes of 6.68 mn sq m (71.9 mn sq ft) in 2024. The hospital sector, too, is witnessing strong investments.

An analysis by Crisil Ratings projects that private hospitals in India will add over 4,000 beds in FY 2026, backed by an investment of

Rs.11,500 crore. This expansion builds on a fiscal year in which hospitals added approximately 6,000 beds nationwide. If these trends materialize, the total bed additions in FY2025 and FY 2026, will match those added during the four-year period from FY 2020 to 2024. Railways is another segment that is witnessing investments, driven by drive to upgrade and expand. In railways, developments include new projects, technological advancements, and infrastructure upgrades aimed at enhancing connectivity and passenger experience. Indias Cabinet Committee on Economic Affairs (CCEA) has approved eight new Indian Railways projects across the country to provide connectivity, facilitate passenger and freight traffic, minimise logistics costs, reduce oil imports and lower CO2 emissions. The eight projects will be implemented in 14 districts in seven states (Odisha, Maharashtra, Andhra Pradesh, Jharkhand, Bihar, Telangana and West Bengal) and will increase the existing network of Indian Railways by 900 km. There is major upgradation work on for stations through the Amrit Bharat Scheme. 100 stations have already been upgraded, and this development process is under progress.

A decade back, there were only 5 cities in India with metro railway covering around 248 kms. Today, there are 23 cities with metro services covering over 1000 kms. This is a segment where major development work is underway. Currently, India ranks third globally in operational Metro network length and is on track to become the 2nd largest Metro network in the world.

Performance Highlights

Over the last few years, the Company has had to pursue a growth path with no access to debt from financial institutes. More importantly, there was very limited access to non-fund credit lines, which translate into performance guarantees and advance guarantees, which are essential in securing EPC works and raising the necessary working capital. Consequently, the Company has had to take a calibrated approach that has relied on client relationships for securing necessary working capital. The Company has largely relied on internal accruals as source of finance to successfully execute projects and move to the next level of operations. Consequently, to grow the company turnover, BL Kashyap has had to be very selective with its bidding evaluation and project selection mechanism. Chart C traces the companys revenue from operations and Profit after Tax (PAT) over the last seven years. It clearly shows that the Company operated at a lower level between FY2019 and FY2021, which were years affected by COVID. During this period, the median annual net sales was Rs.769.3 crore and each of these years, the Company generated losses at the PAT level. Over the next four years, there has been a level of top-line growth and the median consolidated net sales between FY2022 and FY2025 was Rs.1155.6 crore. During this phase, every year BL Kashyap has delivered positive PAT.

Clearly, given a level of fixed costs in the system, an overall growth in execution operations and revenues is the principal driver of profitability for the business. However, given the limited access to capital, the next level of growth must be planned meticulously and executed in a phased manner. The last four years of steady profitable performance has created the platform for the Company to embark on an accelerated growth path over the next few years.

For the Company, FY2025 was a firm step in this direction. Given this positioning, B L Kashyap today has two core domains of deliverables.

First, is focused execution of works, optimised with efficient deployment of working capital. From a financial perspective, this translates into revenues of for the Company. For a couple of the large projects, there were delays in the commencement of projects in FY2025. This has affected revenues, which witnessed 6% decline in FY2025. These projects have started gaining momentum in the beginning of FY2026 and will contribute to growth for the next year. The larger size of these projects had warranted a build-up of resources, which have increased costs that are not commensurate to the level of revenues. Consequently, profitability has been affected and net profits reduced by (-)36% in FY2025. This is a temporary aberration intrinsic to project-based businesses as they start executing larger new projects.

Second, is the push of business development activities to secure projects. At BL Kashyap this is done very meticulously, and the projects selection mechanism is highly robust. While profitability is important, there is a lot of stress on cash flows and optimal deployment of working capital. Given this background, in FY2025, there has been a conscious move towards securing larger projects that have greater efficiencies of scale. With this strategic imperative, 5 new projects were secured with a total value of Rs.1,639 crore.

With the steady pace of project execution being maintained, this has translated into a 19.7% growth in the order book, which was at Rs.3,021 crore as of 31 March 2025.

Importantly, even on a lower revenue and profit base, the net cash flow from operations for the standalone business, increased by

5.2% to Rs.87.5 crore in FY2025. This highlights the focus the business has on managing the entire cash cycle of the projects that is particularly important for EPC works execution with lower levels of external financing.

From a financial perspective, with its steady performance over the last five years, BL Kashyap has significantly derisked itself. As Chart D shows, Consolidated Net Worth has grown from Rs.379.3 crore in FY2021 to Rs.523.6 crore in FY2025. The debt-equity ratio measured in terms of consolidated non-current liabilities to net worth has reduced from 0.88 in FY2021 to 0.3 in FY2025.

Given the levels of fixed costs in the business in a highly competitive market, it is imperative to pursue the overall strategic intent of scaling the business up to levels where there are more sustainable returns on investments. Over the last few years, the Company has taken the initial steps to create the platform for such growth while focusing on projects that generate good cash flows and require lower working capital utilization. Additionally, through processes of careful selection, only those projects that can be executed in a timely manner, that are well-funded and with no foreseeable issues with payments from reputed clients are being considered.

Consequently, the order book growth has been steady and calibrated. The growth will continue to be financed through internal cash flows and project related cash cycles must be continuously maximised to best utilised limited working capital in the cycle. While the Company was driven to adopt this low capital-intensive growth model due to certain past financial issues, it has created the necessary discipline for efficient project execution that optimises working capital. This has translated into a strong operational strength for

BL Kashyap and the organisation culture that it has developed gives it strong competitive strength as it moves to the next round of growth.

At the consolidated level, the Company has almost entirely exited from non-core businesses, and the overall corporate debt is today down to very manageable levels.

Growth with Purpose, Built on Trust" reflects the Companys strategic approach of securing projects through strong goodwill and long-standing client relationships. The repeat orders from existing clients reaffirm the trust placed in the Companys capabilities. Additionally, the Company maintains a lower non-fund-based exposure compared to its peer group, highlighting its prudent financial management FY2025 was a year when the Company continued to ‘strengthen its core competencies to foster growth. This included pushing business development through process driven funneling to secure orders, that have taken the order book to levels over Rs.3,000 crore; developing its human resource pool to provide even greater value to customers; investing in the equipment pool to enhance project execution capabilities; and focusing on putting systems and processes in place to further enhance the Companys project execution capabilities.

Market Performance

Within the civil construction space in India, BLK is focusing on niche segments including transport infrastructure and industrial buildings apart from its core activity comprising construction of offices parks, institutional and residential buildings.

Over the last three decades since its inception, BL Kashyap has successfully developed and executed a widespread variety of projects in the civil engineering space. It has built a diverse project portfolio of successfully executed projects spread across various structures like IT Parks, Commercial Spaces, Malls, Hotels, Residential Complexes, Institutions, Factories and Manufacturing Facilities, Healthcare and Transportation facilities. Many of the projects delivered have emerged as landmark edifices across the nation. This has created a strong credential portfolio in the civil construction space, which is a key asset for the Companys effective market positioning. Not only has this created a strong technical bidding capacity, but many of the marquee projects executed successfully bear testament to BL Kashyaps world-class project execution capabilities. This has gone a long way in establishing the Companys legacy as a quality construction company.

While market opportunities in the civil construction space are growing in India, the sector remains fiercely competitive. There is often very aggressive bidding for projects that results in thin margins and low returns on investment. Small deviations in execution plans and progress often turn many of these projects into losses for the construction partner. While expanding its markets, BL Kashyap remains very selective in terms of the projects that it pursues.

Within this large marketplace, there is a developer segment that gives much greater emphasis on quality of construction and timeliness of project delivery. Consequently, costs are not the only consideration for them when selecting project execution partners, and they often get into negotiated deals. Given the financial challenges, BL Kashyap primarily concentrates on this segment for securing projects. Essentially, within the civil construction space, the Company operates on a niche segment.

During FY2025, the Company secured the following projects:

In July 2024, the contract for civil, structural and allied works for residential buildings at Kodihalli, Bangalore. The Rs.160 crore project for Suruchi Properties Pvt. Ltd. (A group Company of Century Real Estate Holdings) is expected to be closed in 20 months

In November 2024, the contract for civil and structure works for construction of the REAL estate residences group housing project at Gurgaon for Anant Raj Limited. The Rs.250 crore project is expected to be closed in 30 months

In June 2024, the contract for hotel structure and shell works for Sattva Homes Private Limited. The Rs.97 crore project is expected to be closed in 13 months

In June 2024, the contract for civil and composite steel structural works for shopping and commercial facilities in Gurgaon for DLF City Center Limited. This Rs.1,024 crore work is expected to be completed in 21 months.

In India, the Company has a strong base in the Delhi NCR region and in Bangalore. The largest segment constituting 63.6% of the unexecuted order book is in the Delhi NCR region in the states of Delhi and Haryana, while 26.4% was around Bangalore in Karnataka.

The Company CONTINUES making a foray into other regions including the states of UP, Gujarat, Tamil Nadu, Maharashtra, Bihar and Telangana.

The northern region around Delhi is presenting the Company with promising business opportunities in high-end residential, office, and retail spaces. Bengalurus position as a global IT hub offers numerous large-scale project opportunities, where the Company is fast establishing its reputation as a leading construction company capable of delivering large-scale projects. While, on the one hand there is a strategic direction to move to other states, the expansion is being done very selectively and conservatively. On the other hand, there is an imperative to leverage the strong project execution capabilities that exist and are further gaining stronghold in Delhi NCR and Bangalore. Within the civil construction space, there is a strategic intent to diversify the project portfolio in terms of types of projects being undertaken. As of today, chart F shows, commercial projects dominate with a share of 70% in the order book. This is followed by residential with a share of 17%; infrastructure follows with 8%, and institutions with 5%. This is also a reflection of a single large order in the commercial space secured from DLF in FY2025. As the strategy evolves, there will be larger projects in the core commercial and residential space, where the Company has a strong past reputation and relationships. However, there is a concerted effort at diversification, which is being done in a calibrated manner.

Chart F: Customer Segment wise distribution of the Companys Unexecuted Order Book

BL Kashyap has primarily been servicing the private sector. As a risk diversification strategy, over the last couple of years, the

Company has laid emphasis on increasing government projects in their portfolio. It has successfully delivered and is in the process of executing projects like the Sabarmati Terminal, Gomti Nagar Railway Station and the Bijwasan Railway Station amongst railway projects; Chennai and Jaipur amongst Metros; and the AIIMS Raipur and AIIMS Patna projects in hospitals. Within these segments, the Company aims to grow its presence in the transport sector, capitalizing the relationships and reputation built with its experience in metro and railway projects. As of 31 March 2025, with a share of 7% in the unexecuted order book, the Government segment is still small in the Companys overall portfolio.

Project Execution

At the core of BL Kashyaps value proposition is its project execution capability. As an EPC player, especially as a contractor, delivering projects on time in the most cost-efficient way is the base for generating profits and return on investments. This involves a gamut of activities right across the project chain from planning, costing and bidding to mobilizing, constructing and collections. Information inputs from the execution team play a critical role in pricing bids correctly, and the success of the project is determined by the quality of execution.

From the outset, the Company has evolved an embedded culture that strives to be a value-added partner to clients and is focused on providing on-time project delivery. This is further supported by the deployment of effective value engineering tools and high-performance project management techniques.

Project execution at BL Kashyap is undertaken from two key hubs the head office in Delhi (for projects in North and West India) and the regional office in Bangalore (for projects in South and East India). While essential higher order project supervision and progress reporting measures are in place, the Company has adopted a flat front end organization structure. Effectiveness in execution is achieved through the seamless integration of the project execution staff and the management team. This allows for a fast exchange of ground level information, and a well-structured fast and effective cooperation based day-to-day decision making at project sites. With established systems and process structure, the Companys execution team has the clear mandate to take ground level decisions and actions for effective and timely resolution of issues concerning project progress. In this way the Company manages to take calculated risks while adopting a fast-decision-making mechanism. This similar co-operative system of execution within certain well defined control mechanisms is also adopted by BL Kashyap for operational engagement with its vendors, who support every project as a cohesive team. In FY2025, the Company successfully closed 8 projects with a total value of Rs. 1231 crore. Across these projects the total built up area was 73.47 Lakh square feet. Amongst the projects completed, all were commercial buildings.

As of 31 March 2025, including new projects secured in the year under review, the Company has 29 projects under execution totaling approximately Rs 3021 Cr 290 lakh square feet. These projects are in different stages of completion. Chart H gives the geographic spread of projects under execution across India as on 31 March 2025 - Haryana with 50.6% has the largest share, followed by Karnataka with 26.4%, Delhi with 13%, Gujarat with 3%, Maharashtra with 1.9%, Tamil Nadu 1.6%, Telangana 1.4%, UP 1.1% and Bihar 1%.

Chart G: State-wise Distribution of Projects under execution (31 March 2025)

In project execution, the Company continues to upgrade and establish efficient processes. Technology tools are being used for planning, monitoring, HR activities and formwork. Across the chain there are constant efforts at improving processes by identifying and deploying lean management practices. There are well recognized strong in-house capabilities in MEP design and execution, which are being further adapted and fine-tuned for value add. Formwork is being rapidly deployed across projects. This allows for better execution of different designs and forms resulting in enhanced quality and optimized time for delivery.

The Company continues to advocate for steel and composite structures with both prospective and existing clients. While the initial cost is higher than conventional construction, these methods reduce labour dependency and significantly shorten turn-around times.

There are certain key support functions that drive operations at BL Kashyap. Developments on these fronts are described below:

People Resources

At the core of the Companys competitive positioning is the quality of its people. Importantly, in an industry which does witness a significant level of attrition, especially at the senior executive level, BL Kashyap has over the years retained a major proportion of its senior workforce. The decentralized management system, that allows a lot of project level decision making while maintaining certain key controls, is at the heart of work culture that has supported the Companys in efficient project execution sometimes under difficult external conditions. The centralized hiring across levels pan-India is well in place during FY2025. Workforce development continues to be a key focus for BL Kashyap. There are regular upskilling initiatives, which fundamentally aim at enhancing awareness and the use of the latest construction systems and technologies. There is increased focus on in-house skill and knowledge development programs across all levels and verticals. There is a structured internal professional growth path well established in the Company as it remains committed to identifying talent and creating growth opportunities for future managers.

This translates into a systematic method of potential professional progress within the Company. The BLK Wizards Program, that includes training of junior engineers by in-house senior managers across functional verticals, will be recommencing in August 2025, with OVER 75 incoming GETS across regions and 45 existing GETS participating in this training program. This year there is renewed focus on "PEOPLE" and improvement of "SKILL" and creating a "TALENT" pool within the Company. With certain large projects secured in the year, there have been materially significant hiring activities that have increased the work force even as the new projects are slightly delayed and not yet progressing at the pre-project planning terms. Consequently, the ratio of employee costs to net sales from operations for the standalone entity has increased from 7.5% in FY2024 to 9.5% in FY2025.

Project Management: Utilizing Technology and Innovation

The Companys equipment base and project execution processes are governed strongly by adoption and development of technology and innovation. The Company utilizes state-of-the art equipment such as tower cranes, batching plants, transit mixers, and cutting-edge formwork to ensure efficient and effective project execution. In FY2025, the Company took active steps to modernize its capital base. The Company invested Rs.38.6 crore in new plant and machinery and equipment. However, the Company also sold Rs.30.5 crore of plant and machinery and equipment. Consequently, there was an addition of net Rs.8 crore worth of plant and machinery and equipment.

BL Kashyap has strong expertise in ‘design and build and ‘composite steel structures. The commitment to stringent project delivery and quality is supplemented by the mandatory implementation of planning tools like MS Projects. To position the Company competitively in the market, there are efforts to regularly study and upgrade the construction methodologies adopted. In addition, there are continued efforts to enhance in-house structural knowledge. Resource flows and financial accounts are maintained efficiently through a company-wide ERP system. Additionally, the Company leverages HR software and drones as well as onsite cameras to optimize project management processes and ensure effective resource allocation. The in-house MEP design and execution capabilities provide BL Kashyap with the ability to deliver integrated and efficient mechanical, electrical, and plumbing solutions.

Ethical Practices, Quality and Health, Safety and Environment (HSE)

With a focused manner, the Company has evolved its own quality management system (QMS), whose policies and objectives are aligned to the strategic roadmap. The Companys IMS are certified under ISO 14001:2015, ISO 9001:2015, and ISO 45001:2018. The initial certification was in 2012 and then there has been subsequent audits and extensions, including one during 2024, which has extended the validity of the certifications till 2027.

In regular business execution careful attention is paid to monitoring that this alignment is being adhered to. Importantly, while the QMS is based on global principles, it is tailored to align with the unique external and internal factors that affect the Company. A major part of it allows for flexibility in documentation to ensure that its supports rather than hinders business execution processes. With the QMS firmly in place, the Company prioritises process management as a key tool for delivering efficiencies in internal processes. It is the means to achieve planned results effectively. A key component of the overall Company QMS is the communication channel built with customers. Through processes integral to this mechanism, the Company maintains effective communication with clients, which ensures their continued trust. Importantly, the risk management system is also integral to the QMS and is deployed as a key risk control measure across the Companys operations. This plays a critical role in regular execution of projects to prevent potential issues.

Today, quality, just like HSE (Health, Safety and Environment) is an independent vertical that works closely with execution teams on ground with very strong control though the construction process. Quality and HSE teams run weekly classes and regular awareness programs are conducted on all sites across regions to ensure alignment of execution with the companys ethos towards Quality and HSE.

At BL Kashyap, safety and environment is in built into the overall processes and systems, as all the buildings it constructs are LEED platinum or gold rated. Safety is given paramount importance at BL Kashyap. Priority is given to take all measures to prevent occupational injuries across the Companys operations. Importantly, this is done as a pre-emptive measure and not post-facto, so incidents are minimised. This is implemented through a combination of technical field procedures and ongoing training programs. Across the organization there is a strong commitment to zero accidents extending right across the project chain from planning to completion, and from the boardroom to the manpower on site. These safety processes are extended to subcontractors and construction partners, and they are driven to adhere to the same level of commitment as BL Kashyap. To ensure the effective execution of all safety related practices, there is regular health screening and effective training to workers on HSE aspects; implementation and compliance of all HSE aspects in accordance with international standards; adherence to all legislative and statutory compliances as per BOCW Act; regular analysis of accident or incident that may have happened and adopt suitable Corrective And Preventive Action (CAPA); conduct periodical rehearsals to validate EPR (Emergency Preparedness and Response procedure); and provision to employees with on and off site training and a behavior-based safety programs.

As a construction major with considerable exposure to operations that have externalities that affect the environment, BL Kashyap believes that it just doesnt construct structures, it adopts processes that craft the environment to preserve and protect the planet and uplift communities. Cutting-edge infrastructure coexisting with the natural world is intrinsic to the Companys vision. Recognizing that each project in the EPC space that it executes directly impacts the environment and the ecosystem, the Company has integrated environment related procedures into each of its project execution plans, and these are also executed after the project hand over. Communicating and instilling and organization commitment to this is core to this. On the execution front this translates into providing technical and economic information and advice to customers on engineering and construction methods that prevent or minimize pollution; identify potential environmental issues early and work with customers to find and implement solutions; assist customers in the process of complying with environmental regulations; and undertaking initiatives to better manage resources and reduce toxic waste.

The Companys workforce across sites is its core asset and several initiatives are taken to manage their well-being through a comprehensive healthcare ecosystem. All employees are covered with healthcare programs that minimize risk factors and prevent diseases, disabilities, and even premature death. The project sites have well-equipped medical centers, partnered hospitals, and efficient biomedical waste disposal mechanisms along with on call ambulance backup. Regular health screenings and informative workshops are undertaken to empower the workforce and their families to stay healthy

With these practices firmly in place, the Company focuses on building trust across the ecosystem from suppliers to customers. This is essentially done through our continuous efforts at displaying our commitments through effective execution. On this point, there has been a continuous focus on excellence, quality and safety standards that ensure repeated orders. Fundamentally, the Company, through every step-in project delivery continues to build on its long-standing relationships built over 30 years in the construction and infrastructure industry. It practices and leverages the consequent brand recognition that emanates from a proven track record of delivering complex projects on time and within budget, that reinforces its reliability.

Financial Performance

The core EPC business is the fundamental operating business at BL Kashyap. The financial performance of the standalone entity reflects that of the EPC function and reflects the performance of the Company. In fact, in terms of total revenues, the standalone numbers have increased to 98.7% of the consolidated numbers in FY2025. Table 2 gives a snapshot of profit and loss results on a stand-alone basis.

Table 2: Abridged P&L BL Kashyap (Standalone)

	FY2025	FY2024
Total Revenues	1165.0	1224.4
Total Operating Expenses	1075.1	1117.4
EBIDTA	89.9	107.0
Depreciation	11.3	9.4
EBIT	78.6	97.6
Finance Costs	46.7	47.8
Exceptional Items	17.6	-
PBT	49.5	49.8
Tax	13.6	14.9
PAT	35.9	34.9

Highlights of the standalone financial performance of the Company are:

The Company has maintained activities at last years levels. One of the primary large ticket projects was delayed in initiation, so by the Percentage of Completion Method of accounting, which is deployed at BL Kashyap, there is a delay in revenue recognition.

Consequently, operational revenues marginally decreased by (-) 5.9% to Rs.1,165 crore in FY2025

While the Company managed to largely adjust its operations with the lower turnover. Cost of materials and contracting out expenses taken together as a ratio of operating revenues increased marginally from 82.3% in FY2024 to 83.4%. However, with certain initial mobilisation for projects starting execution in FY2026 and the Companys stated objective of enhancing its managerial capabilities as it grows to the next level of operations, employee costs increased 18.2% to Rs.108 crore in FY2025 its share to operating revenues increased from 7.5% in FY2024 to 9.5% in FY2025.

As a result, EBIDTA reduced by (-) 16% to Rs.89.9 crore in FY2025 and its margins as a ratio to operating revenues decreased from 8.7% in FY2024 to 7.7% in FY2025. Much of this will get adjusted in FY2025 as execution pace picks up in the large project secured.

There is an exceptional income worth Rs.17.6 crore, that has improved PAT in FY2025, and its levels are in line with the preceding year. In fact, there is a marginal growth of 2.9% from Rs.34.9 crore in FY2024 to Rs.35.9 crore in FY2025.

Table 3 gives the key financial ratios for the Company on a standalone basis. Clearly the margins at the operational levels have been affected with turnover being lower in FY2025 compared to FY2024. However, the extraordinary income has contributed to slight improvements to the net profit level. So operating profit margins have reduced by 1 percentage point while net margin increased from

2.85% in FY2024 to 3.02% in FY2025. For all other ratios there have marginal reduction in FY2025 compared to FY2024.

Table 3: Key Operating Ratios (Standalone Results)

Ratio	FY2025	FY2024
Trade Receivable Turnover (times)	2.31	2.45
Inventory turnover (times)	15.97	17.49
Current Ratio (times)	1.31	1.28
Operating Profit Margin (%)	7.7%	8.7%
Net Profit Margin (%)	3.02%	2.85%
Return on Net Worth (%)	5%	5.1%
Debt Service Coverage Ratio	1.44	2.03
Debt Equity Ratio	0.04	0.05

With focus on the business and no significant developments in the operating subsidiaries, the consolidated results mirror the standalone results (see table 4).

Table 4: Abridged P&L BL Kashyap (Consolidated)

Particuler	2024-25	2023-24
Total Revenues	1179.76	1256.76
Total Operating Expenses	1088.29	1134.29
EBIDTA	91.47	122.47
Depreciation	12.41	10.36
EBIT	79.06	112.11
Finance Costs	47.48	48.83
PBT from ordinary activities	31.58	63.28
Exceptional Items	18.65	0
PBT	50.23	63.28
Tax	22.75	10.75
PAT	27.48	52.53

Highlights of the consolidated financial performance of the Company are:

Total revenues reduced by (-)6.1% to Rs.1,179.8 crore in FY2025

With certain fixed costs growing marginally over last year, this has resulted in EBIDTA reducing by (-)25.3% to Rs.91.5 crore in

FY2025

Finance costs continued to reduce from Rs.48.8 crore in FY2024 to Rs.47.5 crore in FY2025 a (-) 2.8% reduction.

Even after Rs.18.7 crore exceptional item, net consolidated PAT reduced by (-) 47.7% to Rs. Rs.27.5 crore in FY2025

Risks and Concerns

As a core EPC player, there are fundamentally two broad risks that affect operations rise in prices of inputs and execution delays. Risks associated with the rise in prices of critical inputs steel and cement are largely managed by drawing efficient price escalation mechanisms in contracts with customers. Even after this hedge, there is a need for regular monitoring and supplier network building required to manage the cost issues within the contractual escalation limits. This is achieved through an effective cost control and purchase function at BL Kashyap.

Managing risks associated with execution is at the core of the Companys EPC operations. This is done largely through deployment of experience execution and management cadre, flat organizational working that promotes faster decision making, effective monitoring mechanisms and continuously promoting training and a culture of learning across projects. There are also risks associated with safety at project sites, where BL Kashyap adopts some of the most stringent processes and systems along with continuous supervision by experienced quality managers and supervisory staff. Project-related delays can also emanate from the developer. BL Kashyap lays a lot of emphasis on project selection at the time of bidding. The Company has avoided taking on projects that are estimated to be risky from the development stage. This stringent evaluation is fundamental to the way the Company operates and has been given priority over mere revenue growth.

From a macro perspective, being a company that services infrastructure owning companies, the general financial health of these businesses, prevailing economic conditions in the market, movements in key parameters like interest rates and inflation, and the generic regulatory framework in the EPC industry where they operate are the key domains where the business is exposed to uncertainties and these are regularly managed by the strategic evaluations and decisions taken by the senior management of the Company.

There are certain specific risks that are affecting the industry where BL Kashyap operates in FY2025. Global capital flows that have a bearing on infrastructure development in India is being affected by geopolitical issues globally. The war in Ukraine and the tensions across the Middle East are not only regional instabilities but have an overarching effect on global economics and capital flows. This, along with strong trade negotiations by USA has also disrupted global supply chains affecting availability and pricing of some critical materials that go into the construction sector. Finally, with large scale infrastructure development in the Middle East, there is significant strain on availability of quality labour for the sector. These are three key risk factors prevailing today.

Outlook

The Company is on a steady recovery path. It has reached a scale of operations that is generating operational and net profits. As a strategic objective, the Company focuses on larger projects for better management and profitability. In FY2025, it secured one such large project. Unfortunately, there were some delays with the project, which has affected the Companys financial performance in FY2025 with the adoption of the POCM way of accounting.) This has affected both the topline and margin of the Company in FY2025. The project has since started moving and we expect much better revenue movements in FY2026. There are also other larger size projects that the Company is most likely to secure in the early phase of FY2026. Consequently, from a growth perspective, one expects the Company to start scaling to the next level from FY2026. This is expected to make operations more profitable.

Many efforts in terms of processes, equipment base and manpower has been developed for the next scale of projects. This requires more widespread management, and the Company has already started gearing up for it. FY2026 is expected to be a year of good revenue and profit growth .

Internal Controls and their Adequacy

BL Kashyap has an adequate system and processes of internal control to ensure that the resources of the Company are used efficiently and effectively; that, all assets are safeguarded and protected against loss from unauthorized use or disposition; and that all significant transactions are authorized, recorded and reported correctly, ; that financial and other data are reliable for preparing financial information; and that and other data and are appropriate for maintaining accountability of assets. The internal control is supplemented by extensive programme of internal audits, review by management, documented policies, guidelines and procedures.

Internal financial controls and department-wise SOPs are in place. The Company is in the process of evaluating and finalizing the appointment of a new internal audit firm for FY2026 to further strengthen and enhance the efficiency of its internal control systems .

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be

‘forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include a downtrend in the infrastructure sector, significant changes in political and economic environment in India, exchange rate fluctuations, tax laws, litigation, labour relations and interest costs