Centum Electronics Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

BUSINESS ENVIRONMENT

The global business environment remains in a state of flux in 2026, driven by ongoing geopolitical tensions in West Asia and the resulting disruptions to trade and supply chains. Rising protectionism, including tariff measures and trade restrictions in the United States, along with tighter financial conditions and currency volatility - including the sharp depreciation of the Indian rupee - have added cost pressures, particularly for industries with significant imports and cross-border trade, such as electronics manufacturing.

A defining shift in the global economy in the last year is the rapid scale-up of artificial intelligence (AI) investments. AI has emerged as a core infrastructure priority, with over $750 billion of investments in AI data centres in 2026 alone, and an estimated cumulative spend of $3-4 trillion over the next 4-5 years. This has driven significant investment flows across major economies including the United States, China, South Korea, and Taiwan.

In line with these global trends, Indias data centre ecosystem is also witnessing strong growth, with installed data centre capacity expected to grow from approximately 1.6 GW today to nearly 12 - 14 GW by 2035, supported by an estimated $70 billion in investments - driven by cloud adoption, AI workloads, and data localisation requirements.

Overall, India continues to be one of the fastest-growing major economies, with the Reserve Bank of India forecasting GDP growth of 6.6% in FY27. Despite near-term challenges, including cautious consumer demand and inflationary expectations, Indias structural growth drivers remain intact. The domestic electronics industry continues to witness strong growth, supported by government initiatives such as the Production Linked Incentive (PLI) and Electronics Component Manufacturing Scheme (ECMS), which are improving domestic value addition. Strategic priorities around Make-in-India, energy security, renewable energy, and telecom and digital infrastructure expansion are sustaining the growth momentum.

COMPANY OVERVIEW

Centum Electronics Limited is a distinguished name in the Electronics System Design and Manufacturing (ESDM) domain, offering high-reliability solutions tailored to mission-critical applications. Since its inception, the company has earned trust across various sectors, including Defence, Aerospace, Space, Healthcare, Transportation, and Industrial systems - all of which demand uncompromising quality and precision.

At the core of Centums capabilities is its end-to-end service offering, spanning conceptual design, engineering development, and full-scale manufacturing. Its expertise includes embedded software, FPGA design, analog and RF systems, as well as manufacturing processes for complex, high-technology electronic products. Through its integrated business model, the company delivers turnkey solutions that transition seamlessly from idea to production.

Centums capabilities are enabled by advanced design and manufacturing infrastructure and a globally connected supply chain. It partners closely with leading multinational original equipment manufacturers and Indian public sector organisations, including premier defence and space institutions.

With a growing global client base, Centum derives a significant share of its revenue from international markets. Its role as a single-source supplier for many of its products underscores its strategic relevance to customers and the strength of its long-term partnerships.

The companys approach is anchored in innovation, technological advancement, and quality leadership. It invests consistently in engineering talent, strengthens supply chain resilience, and emphasises sustainable practices. Centum also upholds a deep commitment to the development of its people and the communities in which it operates.

Driven by its mission to contribute to customer success as an innovation partner in high-technology domains, Centum continues to expand its reach in advanced markets and elevate its impact in the electronics value chain.

Your company registered a Standalone revenue of Rs.9,731 million and the revenue break down for FY26 is given below:

Industry-wise		Geography-wise		Segment-wise
Defense, Space & Aerospace	54%	India	48%	Electronic Manufacturing Services (EMS)	72%
Transport & Automotive	11%	Europe	32%	Built-To-Specification (BTS)	28%
Industrial & Energy	28%	North America	7%
Healthcare	7%	Rest of the world	13%

INDUSTRY OVERVIEW

Electronics System Design and Manufacturing (ESDM) continue to rank among the fastest-growing sectors globally, driven by increasing digitisation across industries and economies.

The growth is being propelled by sustained momentum in consumer electronics, industrial automation, advanced aerospace and defence systems, advanced medical devices, and smart mobility solutions.

Technologies such as Artificial Intelligence (AI), 5G, and Clean-Energy are redefining the design and complexity of electronic systems. The most defining trend in this evolution is the rapid scale-up of AI-led digital infrastructure, which is significantly increasing demand for high-performance computing hardware, advanced electronics, energy management, and reliable system design capabilities. This is driving large-scale investments globally and creating new opportunities across the electronics value chain.

Indias share in the global ESDM industry is expected to expand over the medium term, building on strong growth momentum and supported by the Governments ambition to scale the sector into a $500 billion ecosystem by 203031. This momentum is being driven by global supply chain diversification, geopolitical shifts, and the push for more resilient and sustainable manufacturing ecosystems.

Domestic electronics manufacturing increased from Rs.1.9 lakh crore in FY 2014-15 to Rs.11.3 lakh crore in FY 2024-25, representing a nearly six-fold expansion over the period. Electronics exports grew at an even faster pace, rising from Rs.38,000 crore to Rs.3.27 lakh crore during this period, marking an approximately eight-fold increase. The growth trajectory indicates a steady acceleration over the decade, with manufacturing scale-up accompanied by increasing integration into global markets. As a result of this expansion, electronics has emerged as one of Indias largest export categories, reflecting improved competitiveness and deeper participation in global value chains.

Key government initiatives - including the Semicon India Programme, the Production Linked Incentive (PLI) schemes for electronics and IT hardware, SPECS, EMC 2.0, the expanded Electronics Component Manufacturing Scheme (ECMS) with an outlay of Rs.40,000 crore, and the recently proposed India Semiconductor Mission (ISM) 2.0-are catalysing growth in semiconductor design, component manufacturing, and ecosystem infrastructure, while strengthening domestic value addition across the electronics value chain.

These developments align closely with Centums strategic focus on high-reliability electronics, system design, and indigenous manufacturing, positioning the company to benefit from Indias emergence as a global ESDM powerhouse.

DEFENCE, SPACE AND AEROSPACE

The global defence, space and aerospace sector is undergoing a transformative phase, driven by escalating geopolitical tensions, shifting threat perceptions, and rapid technological innovation. According to the Stockholm International Peace Research Institute (SIPRI), global military expenditure continued its upward trajectory in 2025, rising to a record ~$2.88 trillion (11^th consecutive year of growth), driven primarily by heightened geopolitical tensions and rearmament across Europe and Asia, where spending increased by ~14% and ~8% respectively. India, the fifth biggest military spender in the world in 2025, increased its military spending by 8.9 per cent to $92.1 billion. While overall growth moderated to ~2.9% (vs. 9.7% in 2024) due to a temporary decline in U.S. spending, global military burden still reached ~2.5% of GDP - its highest level since 2009-highlighting sustained prioritisation of defence amid ongoing conflicts and strategic competition.

The U.S., China, and Russia together accounted for over half of global spending, and the report indicates that continued security uncertainties are likely to support further growth in defence expenditure going forward.

At the same time, rapid advances in artificial intelligence (AI) and unmanned systems are reshaping modern warfare. AI is increasingly being deployed across intelligence, surveillance and reconnaissance (ISR), decision-support systems, autonomous platforms, and precision targeting, enabling faster data processing, enhanced situational awareness, and improved decision velocity. In parallel, recent conflicts have underscored the growing importance of drone warfare, particularly the proliferation of low-cost, expendable systems such as loitering munitions and kamikaze drones, which offer asymmetric advantages through swarm tactics, precision strikes, and cost-effective force multiplication.

These trends are accelerating the shift toward networkcentric and multi-domain operations, with greater reliance on software-defined, data-driven architectures that integrate AI, autonomous systems, electronic warfare, and resilient communication networks.

INDIA DEFENCE AND AEROSPACE

India is one of the largest and fastest-growing aerospace and defence (A&D) markets globally and hosts the second-largest armed force. The sector continues to emphasise indigenisation, with over 70% of defence procurement by value increasingly sourced from domestic industry, supported by policy initiatives such as Make in India and Aatmanirbhar Bharat, which prioritise local design, development, and manufacturing.

These investments are increasingly focussed on key domains such as air and missile defence, electronic warfare, cybersecurity, autonomous systems, and advanced military communications. This reflects a broader shift towards network-centric, multi-domain operations, with heightened emphasis on resilient and integrated battlefield electronics, as well as the growing role of dual-use technologies in defence modernisation. These trends are strategically aligned with Centums capabilities in high-reliability defence and aerospace subsystems.

SPACE SECTOR

The global space sector has continued its rapid evolution, driven by technological breakthroughs, commercial innovation, and ambitious government programs. Private players such as SpaceX, Blue Origin, and Rocket Lab are increasingly central to satellite deployment, reusable launch systems, and satellite internet constellations, significantly lowering launch costs and expanding access to space.

Deeper collaboration between national space agencies and private enterprises continues to accelerate, with governments increasingly leveraging commercial capabilities for communications, earth observation, and defence-linked applications, positioning space as both a critical economic opportunity and a strategic national asset.

At the same time, investor interest has strengthened materially, with private capital inflows reaching $10 billion annually in recent years, demonstrating sustained investor confidence in the sectors commercial potential. The SpaceX IPO-expected to be one of the largest in history with a potential valuation exceeding $2 trillion-has further amplified investor attention and is viewed as a catalyst for broader participation in SpaceTech.

Indias space program, led by ISRO, has continued to make significant progress in FY 2025-26, building on the success of Chandrayaan-3. The period has been marked by key mission milestones, including the successful launch and operationalisation of the NASA-ISRO Synthetic Aperture Radar (NISAR) satellite in July 2025, a first-of-its-kind dualfrequency Earth observation mission. The year also saw multiple navigation, communication, and commercial satellite launches, alongside technology demonstrations such as inorbit docking (SpaDeX), strengthening Indias capabilities in advanced space operations. ISRO has also outlined one of its most ambitious execution pipelines, with a significantly higher number of missions including Earth observation, navigation, and launch vehicle development.

In parallel, Indias space policy reforms and institutional mechanisms such as IN-SPACe continue to strengthen private sector participation. The ecosystem now includes increasing industry-led launch vehicle manufacturing, commercial satellite deployments, and growing collaboration with global partners. Indias private space ecosystem is gaining momentum, with startups developing indigenous technologies in satellite communications, Earth observation, and defence applications.

With over two decades of experience in the space sector and a strong track record in complex electronics and system integration, Centum is well positioned to be a key beneficiary of this growing opportunity.

INDUSTRIAL & ENERGY SECTORS

The industrial sector, encompassing Industrial Automation, Advanced Capital Equipment, Energy and Utilities, is undergoing a major transformation, driven by technological innovation and shifting market demands.

The growing adoption of automation and smart manufacturing is fuelling demand for advanced electronics and control systems. In Energy, robust growth is being driven by the urgent need to upgrade power grid infrastructure to accommodate rising electricity consumption and the integration of renewable energy sources.

In parallel, the rapid expansion of data center infrastructure - driven by cloud computing, AI workloads, and digital services-is significantly increasing energy demand, while also accelerating the need for energy-efficient power management, battery solutions, and resilient electrical systems. This is creating incremental opportunities for advanced electronics and high-efficiency solutions across the energy value chain.

Additionally, within the broader industrialisation theme, the semiconductor equipment market is witnessing strong growth, supported by global capacity expansion, localisation efforts, and increasing complexity of semiconductor manufacturing to support advanced nodes.

In India, the industrial market is poised for substantial growth, bolstered by investments in smart manufacturing, automation and energy-efficient solutions. The Indian governments strong push on renewable energy is accelerating demand for advanced electronic components and systems. India now ranks third globally in renewable energy capacity and achieved 50% of cumulative installed power capacity from non-fossil sources in June 2025 - five years ahead of its 2030 target.

MOBILITY - RAILWAYS AND AUTOMOTIVE

The mobility sector, encompassing both the automotive and railway industries, continues to evolve rapidly, shaped by technological advancements, infrastructure investment, and sustainability imperatives. While the automotive industry is witnessing significant advances in vehicle electronics and local manufacturing, Indian Railways is embarking on a modernisation journey to overcome legacy constraints and position itself for the future.

AUTOMOTIVE

The automotive sector is evolving rapidly, driven by increasing demand for safety systems, ADAS, connectivity, and electrification. The global automotive electronics market is projected to grow from $302 billion in 2025 to $468 billion by 2034 (CAGR: 4.9%). In India, the market is expected to expand from $11.8 billion in 2025 to $19.2 billion by 2034 (CAGR: 5.3%).

RAILWAYS

Rail infrastructure investments have a strong focus on digitalisation, automation, and passenger experience. The global digital railway market - spanning operations, signalling, and passenger systems - continues to expand, driven by the adoption of smart and connected rail solutions.

Indias railway modernisation is accelerating through large- scale investments ( 25,000+ crores in 2025), near-complete electrification (~99%), deployment of advanced safety systems (Kavach), station redevelopment (1,300+ stations), and dedicated freight corridors (~96% complete), driving a faster, safer, and digitally integrated rail network. Indias rail modernisation is also reflected in the rapid expansion of next- generation trainsets and urban transit. Vande Bharat trains (160+ services operational) are enhancing intercity travel through higher speeds, improved reliability, and modern passenger amenities, with sleeper and export variants under development. In parallel, Indias metro rail network has expanded to over 1,150 km across 25+ cities, making it one of the largest globally and supporting urban mobility through high-capacity, technology-enabled transit systems

These initiatives are significantly increasing demand for advanced electronics, control systems, and high-reliability components across the rail ecosystem.

HEALTHCARE

The global medical devices market was valued at $572 billion in 2025 and is projected to reach ~$1.03 trillion by 2034, growing at a CAGR of ~6.9%. The industry is witnessing sustained growth, driven by technological advancements, an aging population, and rising healthcare expenditures. Innovations in diagnostics, wearable technologies, and minimally invasive procedures are improving clinical outcomes while enhancing cost efficiency.

In India, the medical devices sector is entering a strong growth phase, with the market expected to expand from ~$15-20 billion currently to ~$50 billion by 2030, supported by rising healthcare demand and infrastructure expansion. Diagnostic imaging and advanced equipment are emerging as key growth segments, reflecting increasing investment in healthcare delivery.

While India remains import-dependent - particularly for high- end devices with ~70-80% reliance on imports-this gap presents a significant localisation opportunity. Government initiatives such as the Production Linked Incentive (PLI) scheme, development of medical device parks, and 100% FDI under the automatic route are strengthening domestic manufacturing capabilities.

In parallel, increased public spending-including Rs.99,858 crores allocated to healthcare in the Union Budget 2025-26-is improving infrastructure and access, further driving device adoption. The sector is also evolving toward higher-value segments such as advanced imaging, in-vitro diagnostics, and implantable devices, positioning India for both domestic growth and export expansion.

STRATEGY & BUSINESS OUTLOOK

Centum Electronics has consciously cultivated a strong presence in high-reliability sectors characterised by formidable entry barriers - stemming from intricate product requirements, extended life cycles, and rigorous customer qualification and certification standards. The Company remains deeply committed to serving critical domains such as Defence, Space, Aerospace, Industrial, Healthcare, and Mobility, consistently upholding the highest standards of quality and innovation.

Over time, Centum has established robust, end-to-end capabilities spanning concept, design, manufacturing, and aftermarket support. This integrated approach positions the Company as a trusted, one-stop solutions provider, offering flexible engagement models tailored to the specific demands of each project. Its core offerings include Engineering R&D Services, Electronics Manufacturing Services, and comprehensive Build-to-Specification solutions.

To reflect the distinct nature of its services, Centum operates through three dedicated business units, each aligned with specialised competencies. This structure enhances agility and reinforces Centums differentiated role as a full-spectrum Electronics System Design and Manufacturing (ESDM) partner - setting it apart from traditional EMS or standalone engineering service providers. This integrated, value-driven approach continues to earn the trust and recognition of Centums global clientele.

In FY26, decisive steps were taken towards restructuring and divestment of our subsidiaries in Canada and France that stemmed losses, sharpened our strategic focus, improved capital allocation, and strengthened the long-term growth trajectory in our core business areas.

During FY26, the Centum Groups operational revenue for the standalone entity grew by 25% year-on-year to Rs.9,731 million, supported by strong traction in both the EMS and Build-to-Specification (BTS) segments.

The standalone order book at the end of FY26 was at Rs.16,448 million registering a growth of 23%. The visibility provided by the order book, along with a healthy pipeline of opportunities - especially in the EMS and strategic electronics businesses - gives us confidence in sustaining the growth momentum into FY26 and beyond.

With continued focus on operational efficiency, customer engagement, and technology-led differentiation, Centum is well positioned to deliver sustained growth and margin improvement. The Company remains committed to investing in R&D, scaling key platforms, and deepening its presence in high-priority sectors such as Defence, Space, and critical industrial technologies.

ELECTRONIC MANUFACTURING SERVICES (EMS)

The EMS business remains Centums largest revenue contributor, accounting for ~70% of standalone revenue in FY26, with strong 21% YoY growth. This performance was driven by successful ramp-up for a global semiconductor equipment OEM, growth in defence exports, and execution excellence supported by 80+ NPIs, enabling faster customer onboarding and scale-up.

Centums EMS division offers end-to-end manufacturing solutions across PCB assemblies, complex box builds, and system integration for high-reliability applications. The business is primarily export-oriented, with a diversified customer base across Europe, North America, the Middle East, and Israel.

Growth momentum has been underpinned by both portfolio expansion and customer deepening:

- Entry into new segments such as semiconductor equipment, electrification & grid automation, security systems, In Flight Entertainment (IFE), and flight avionics

- Increased volumes from existing defence customers, aligned with rising global demand

- Continued shift toward higher-value, complex programs

The EMS business is strategically positioned to benefit from global supply chain diversification and localisation trends. The "China+1" shift and Indias "Make in India" push are creating structural opportunities across key segments including semiconductor equipment, smart energy, automotive electronics (EV/BMS), and medical devices. To capitalise on this opportunity, Centum is investing in capacity expansion, advanced manufacturing capabilities, and digitalisation. Focus areas include strengthening supply chain reliability, enabling faster NPI-to-scale transitions, and integrating AI-led Industry 4.0 solutions to enhance productivity and quality.

Overall, the EMS division is evolving into a high-reliability, end-to-end manufacturing partner, with strong global OEM relationships and a clear runway for sustained growth driven by localisation, technology expansion, and operational scale.

STRATEGIC ELECTRONICS

Centums Strategic Electronics Build To Specification (BTS) business plays a critical role in advancing Indias self-reliance in defence and space technology. The division focusses on the design, development, and manufacturing of indigenous subsystems and increasingly, full system-level solutions for the Defence, Space, and Aerospace sectors, serving key customers such as DPSUs, DRDO, and ISRO.

FY26 saw strong momentum, with revenue growth of 37% YoY and order book growth of 28% YoY, driven by robust execution and a clear shift toward higher-value system programs. Key wins during the year included a marquee AESA Radar order from HAL (570+ crores program) and a second complete radar system order for satellite and space debris tracking, alongside continued deliveries of complex test systems for aerospace and defence applications.

The business is actively moving up the value chain from subsystems to integrated systems, aligned with national priorities under "Make in India". This is anchored in increasing localisation of critical technologies and deeper participation across strategic platforms, including radar systems, avionics, electronic warfare (EW), missile subsystems, and space payloads.

Growth is being driven by a focussed portfolio strategy:

- Expansion in high-value areas such as multi-function radar, ISR payloads, and drone electronics

- Increasing share of system-level programs beyond components

- Strong alignment with defence and space indigenisation programs

To strengthen its strategic edge, Centum is investing in core technology capabilities across RF, power electronics, signal processing, and embedded computing. This is complemented by collaborations with global OEMs, partnerships with leading academic institutions (IITs, IISc), and engagement with startups to accelerate innovation and capability development.

With proven expertise in delivering high-reliability, high- complexity systems, the BTS division is positioning itself as a system integrator for next-generation defence and space programs. Continued investments in R&D, co-development with domestic partners, and selective global technology partnerships are expected to drive higher value capture and sustained order book growth.

Overall, the BTS business is well positioned to scale as a key contributor to Centums long-term growth, while playing a meaningful role in strengthening Indias defence and space capabilities.

ENGINEERING R&D SERVICES (ER&D)

Centums Engineering R&D (ER&D) business unit delivers cutting-edge design and engineering services across a broad spectrum of domains, including electronic hardware, embedded software, FPGA development, analog and RF systems, and cybersecurity. Backed by a strong team of engineers and seasoned domain specialists, Centum supports the development of next-generation technologies as well as the modernisation of legacy platforms. Its proven expertise in safety-critical applications remains a key differentiator in high-reliability markets.

Following the exit from loss-making overseas subsidiaries in France and Canada, Centum is sharpening its strategic focus on design-led manufacturing - leveraging its ER&D strengths to create differentiated, higher-margin offerings. This approach integrates product design, engineering, and manufacturing into a seamless value chain, enabling closer alignment with customer requirements and deeper value capture across the product lifecycle.

Under this model, Centum is moving beyond pure services to owning a larger share of product realisation, including architecture definition, prototyping, validation, and transition to manufacturing. This not only enhances margins but also strengthens long-term customer relationships through codevelopment, IP involvement, and lifecycle support.

The shift to design-led manufacturing is being targeted at select strategic customers and high-growth segments, where Centum can combine its design expertise with its EMS and BTS manufacturing capabilities. By building a portfolio of integrated design-to-manufacturing solutions, the Company aims to position itself as a differentiated partner in high- reliability electronics, driving both revenue quality and sustainable growth.

RISKS AND RISK MITIGATION

Centum Electronics operates in a dynamic and competitive environment, facing various risks that could impact its business, financial condition, and results of operations. While we strive to manage and mitigate these risks, the following factors could adversely affect our business:

Market Risks	Centums business is closely linked to the Defence, Aerospace, Space, Industrial, Healthcare, and Mobility sectors. Any downturn, volatility, or policy shift in these industries - such as changes in government spending, regulatory frameworks, or technological disruptions - could adversely affect revenue and profitability.
Customer Concentration	A significant portion of Centums revenue is derived from a limited number of key customers, including government agencies and large corporations. The loss of, or a substantial reduction in, business from any of these clients could materially impact the Companys financial results.
Supply Chain Disruptions	Centum relies on a global network of suppliers for critical components and materials. Disruptions caused by geopolitical tensions, natural disasters, logistics constraints, or supplier insolvency could lead to production delays, cost escalations, or missed delivery commitments.
Technology and Innovation	The Companys competitiveness depends on its ability to innovate and adapt to evolving technologies. Failure to anticipate market trends, delays in product development, or unsuccessful R&D initiatives could weaken Centums market position and growth prospects.
Regulatory and Compliance Risks	Centum operates in highly regulated sectors, where changes in laws, compliance standards, or environmental regulations can increase operational complexity and costs. Delays in obtaining necessary certifications or approvals may also impact project timelines and revenue recognition.
Operational Risks	Long and unpredictable timelines for securing defence and space contracts can affect revenue visibility. Ll-based tendering processes may lead to aggressive pricing and margin pressures. Delays in certification and approvals from government agencies can extend execution cycles. Variability in customer demand forecasts may result in excess inventory and working capital strain.
Financial Risks	Centum is exposed to fluctuations in foreign exchange rates, interest rates, and credit risks from customers and suppliers. These factors can impact margins, cash flows, and overall financial stability.
Cybersecurity and Data Privacy	As a technology-driven organisation, Centum faces risks related to cyberattacks, data breaches, and IT system vulnerabilities. Inadequate protection of sensitive data could lead to financial losses, reputational damage, and regulatory penalties.
Geopolitical and Economic Risks	Operating across multiple geographies exposes Centum to geopolitical uncertainties, trade restrictions, economic slowdowns, and changes in tariff or export regulations. These factors may disrupt operations or affect market access.
Human Capital	Centums success is dependent on its ability to attract, retain, and develop skilled professionals. Talent shortages, labour disputes, or ineffective workforce management could hinder innovation, execution, and long-term growth.

HUMAN RESOURCES

At Centum Electronics, human capital is central to our growth and innovation strategy. As of March 31, 2026, our workforce exceeded 1,500 employees underscoring our strong capabilities in high-end Electronics Design and Manufacturing.

Our HR strategy focusses on attracting, developing, and retaining top talent through continuous investment in technical training and leadership development. We promote a culture of learning, innovation, and collaboration, supported by structured engagement programs that foster cross-functional teamwork and agile problem-solving.

Diversity and inclusion are integral to our values, with a commitment to building a workplace that respects and leverages diverse perspectives. Looking ahead, we aim to strengthen our talent pipeline through strategic hiring, internal mobility, and upskilling - ensuring Centum remains future-ready and globally competitive in the ESDM space.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established a robust internal control framework designed to ensure the integrity of financial reporting, safeguard assets, and promote operational efficiency. These controls are reinforced by a structured Internal Audit mechanism, independently conducted by KPMG Assurance and Consulting Services LLP, which provides objective assurance on the effectiveness of risk management and governance processes.

Internal financial controls are periodically reviewed by the management to ensure they remain aligned with business needs and regulatory requirements. These controls are also independently assessed and validated by the statutory auditors, ensuring transparency, compliance, and accountability across all levels of the organisation.

CONCLUSION

In conclusion, Centum Electronics has delivered strong and broad-based performance across its business units in FY26, driven by disciplined execution, portfolio optimisation, and a clear focus on high-growth, high-reliability segments. The Companys integrated capabilities-spanning design, manufacturing, and system-level solutions-are enabling a shift toward higher value programs and improving the overall quality of growth.

The EMS business continues to scale on the back of global OEM partnerships and supply chain realignment, while the Strategic Electronics (BTS) division is successfully moving up the value chain through increased participation in system- level defence and space programs. At the same time, the pivot towards design-led manufacturing is strengthening Centums ability to capture greater value across the product lifecycle.

With strong alignment to structural themes such as "Make in India," defence indigenisation, and global supply chain diversification, Centum is well positioned to capitalise on emerging opportunities. Continued investments in technology, capacity, and talent, coupled with a focussed approach to execution and innovation, provide a strong foundation for sustained, high-quality growth in the years ahead.

FINANCIAL CONDITION

A. Consolidated#

i. Share capital

The share capital of the Company stands at Rs.147 million.

ii. Borrowings

The borrowings have been reduced by Rs.228 million from Rs.1,448 million as at March 31, 2025 to Rs.1,220 million as at March 31, 2026.

iii. Fixed Assets

The Capital expenditure in relation to Property, Plant & Equipment for 2025-26 is Rs.404 million.

iv. Working Capital

Inventories has increased by Rs.1,088 million from Rs.3,474 million as at March 31, 2025 to Rs.4,562 million as at March 31, 2026.

Trade Receivables have decreased by Rs.69 million from Rs.3,065 million as at March 31, 2025 to Rs.2,997 million as at March 31, 2026.

Current liabilities have decreased by Rs.1,197 million from Rs.7,852 million as on March 31, 2025, to Rs.6,655 million as on March 31, 2026.

v. Cash flows

Particulars	Rs. in Million
Operating activities	604
Financing activities	(254)
Investing activities	(432)

vi. Results of Operations

The business operations for 2025-26 resulted in the Company, achieving total income of Rs.9,686 million as against Rs.7,469 million for 2024-25 before discontinued operations.

Profit/(Loss) before exceptional items and tax and discontinued operations for the year 2025-26 is Rs.1,148 million as against Rs.665 million for the year 2024-25.

vii. Key financial parameters

Particulars	FY 26	FY 25
Adjusted Debt /Equity1	0.36	0.36
Debtors Turnover Ratio (Days)2	116	132
Inventory Turnover Ratio (Days)3	236	264
Current Ratio4	1.16	1.19
Interest Coverage Ratio5	7.79	4.41
Operating Profit Margin6	14%	12%
PAT Margin7**	10%	7%

1 Non-current borrowings + Current borrowings/ Equity attributable to equity holders of parents.

2 Average receivables/Revenue from operations x 365 days.

3 Average inventory/(Cost of materials consumed + Decrease/ (Increase) in inventory of work-in-progress and finished goods) x 365 days.

4 Current assets (including assets held for sale)/Current liabilities (including liabilities directly associated with assets held for sale).

5 EBIT*/ Finance cost.

6 EBIT*/ Total income.

7 PAT from continuing operations/Total income.

* Excludes (loss)/ profit from discontinued operations and includes other income and finance income.

# FY25 balance sheet includes discontinued operations.

Reason for variation (>25%):

**On account of the increase in profit from continuing operations during the year.

*** Increase is on account of increase in income from continuing operations.

B. Standalone

i. Share capital

The share capital of the Company stands at Rs.147 million.

ii. Borrowings

The Borrowings have increased by Rs.259 million from Rs.961 million as on March 31, 2025 to Rs.1,220 million as on March 31, 2026.

iii. Fixed Assets

The Capital expenditure in relation to Property, Plant & Equipment for 2025-26 is Rs.395 million.

iv. Working Capital

Inventories has increased by Rs.1,294 million from Rs.3,274 million as on March 31, 2025 to Rs.4,568 million as on March 31, 2026.

Trade Receivables has decreased by Rs.98 million from Rs.3,171 million as on March 31, 2025 to Rs.3,073 million as on March 31, 2026.

Current liabilities has increased by Rs.1,186 million from Rs.5,489 million as on March 31, 2025 to Rs.6,675 million as on March 31, 2026.

v. Cash flows

Particulars	in Million
Operating activities	284
Financing activities	1
Investing activities	(424)

vi. Results of Operations

The business operations for 2025-26 resulted in the Company achieving total income of Rs.9,889 million as against Rs.7,827 million for 2024-25.

The profit/(loss) before exceptional items and tax for the year 2025-26 is Rs.1,004 million as against Rs.617 million for the year 2024-25.

vii. Key financial parameters

Particulars	FY 26	FY 25
Adjusted Debt /Equity1*	0.28	0.17
Debtors Turnover Ratio(Days)2	117	127
Inventory Turnover Ratio(Days)3	218	226
Current Ratio 4	1.39	1.46
Interest Coverage Ratio without exceptional items5**	6.98	4.17
Operating Profit Margin6	12%	10%
PAT Margin7**	9%	6%

1 Non current borrowings + Current borrowings/ Total Equity

2 Average Receivables/ Revenue from operations X 365

3 Average inventory/ Cost of materials consumed+(Increase)/decrease in inventories of work-in-progress and finished goods X 365

4 Current assets/ Current liabilities

5 EBIT (before exceptional items)/ Finance cost

6 EBIT (before exceptional items)/ Total income

7 PAT (before exceptional items)// Total income

Reason for variation (>25%):

* The increase is on account of the decrease in shareholders equity during the year.

** The increase is on account of the increase in profit before exceptional items during the year.