Danish Power Ltd Management Discussions

Global Economic Environment

The global economy entered CY 2026 on a firmer footing than in the preceding two years before encountering renewed geopolitical and energy-market disruptions during the year. The defining feature of the year was divergent regional growth patterns: economies exposed to the Middle East conflict through energy imports decelerated, while those integrated into the artificial-intelligence investment cycle accelerated. For capital-goods manufacturers, this bifurcation matters more than the headline growth number, because it determines both input-cost trajectories and the geography of electrical infrastructure demand.

In its July 2026 World Economic Outlook Update, the IMF projected global growth of 3.0% in 2026 and 3.4% in 2027, against an estimated 3.5% in each of 2024 and 2025. The projections indicate a temporary moderation in growth during 2026 followed by a recovery in 2027. The 2026 figure represents a 0.1 percentage-point downgrade from April, reflecting the impact of geopolitical tensions, partly offset by continued strength in technology-led investment.

Despite heightened geopolitical uncertainty, global economic activity remained relatively resilient, supported by supply-chain adjustments, diversified energy sources and continued investment in technology and infrastructure.

The more consequential development for the industry was on prices rather than output. The IMF revised its global headline inflation forecast for 2026 up to 4.7%, from 4.1% in 2025, before an expected decline to 3.9% in 2027, and stated plainly that the disinflation trend in place since early 2024 has stalled.^{5 6} The inflationary impact has remained concentrated in energy and commodity prices rather than broad-based wage pressures.

For transformer manufacturers, the practical consequence is a divergence between two variables that ordinarily move together. Financing conditions for grid projects are tied to policy rates, which central banks have held rather than raised, judging the impulse temporary. Input costs, however, are tied to the commodity complex — copper, aluminium, electrical steel and transformer oil — where the shock has landed directly. The result is a period in which demand-side conditions remain supportive while gross margins face a genuine, if bounded, squeeze.

The IMF quantifies the divergence starkly: in Q1 2026, the four largest net exporters of AI hardware recorded

an average seasonally-adjusted annualised growth surprise of +4.4 percentage points, against -0.3 percentage points for the rest of the world.⁷ Korea — an oil importer sourcing heavily from the Middle East — was revised up 0.7 percentage points to 2.6% on AI-related exports, while the euro area, less exposed to the upswing, lagged.^{8 9} The corollary is that the AI build-out is now a first-order determinant of the geographic distribution of electricity demand growth, and therefore of where transformer and switchgear capacity is required. It is also a risk: the IMF explicitly flags a correction in the AI investment cycle as a downside scenario, and notes that exuberant financial markets could sow the seeds of instability.

Risks to the outlook are described as more balanced than in April but still tilted to the downside, with renewed escalation in the Middle East capable of reigniting commodity volatility and tightening financial conditions. Upside risks include faster AI adoption and quicker normalisation of shipping through the Strait of Hormuz.^{10 11}

Global Power and the Energy Transition

The global power sector is entering a structural investment cycle driven by accelerating electrification, renewable energy deployment and the rapid expansion of digital infrastructure. According to the International Energy Agencys (IEA) Electricity 2026 report¹², global electricity demand is projected to grow by an average of 3.6% annually between 2026 and 2030, around 50% faster than the average growth recorded over the previous decade. Emerging economies will account for nearly 80% of incremental electricity demand, while advanced economies are also witnessing renewed growth after years of stagnation, supported by artificial intelligence (AI), data centres, electric vehicles, industrial electrification and increasing cooling requirements. This sustained rise in electricity demand is expected to drive significant investment across generation, transmission and distribution infrastructure.

However, expansion of electricity generation is increasingly constrained by the pace of grid development. The IEA estimates that over 2,500 GW of renewable energy, storage and large-load projects remain stalled in grid connection queues globally, highlighting the urgent need for transmission and distribution upgrades. To meet projected electricity demand, annual global grid investment must increase by approximately 50% from the current level of around USD 400 billion, alongside significant expansion of transformer, cable and grid equipment manufacturing capacity. These structural trends underscore a multiyear investment cycle in power infrastructure, creating sustained demand for electrical equipment across global markets.¹³

Global Transformer Industry

The global transformer industry is experiencing sustained growth, supported by rising investment in grid modernisation, renewable energy integration and electrification. While market estimates vary across research providers owing to differences in product scope and methodology, there is broad consensus that the industry will maintain mid-to-high single-digit growth over the coming decade. Recent estimates place the global transformer market between USD 65-81 billion in 2026, with Asia-Pacific remaining the largest and fastest-growing region, driven by expanding power infrastructure across China, India and Southeast Asia.¹⁴

Global demand continues to outpace manufacturing capacity, creating supply-chain constraints across transformers, cables and key raw materials. According to the International Energy Agency (IEA), transformer

prices have increased by around 75% since 2019, while manufacturers worldwide are expanding capacity to address growing demand from utilities, renewable energy projects and data centres. At the same time, increasing diversification of global supply chains and growing preference for sourcing critical electrical equipment outside China are creating opportunities for qualified manufacturers with proven technical capabilities and international certifications.¹⁵

An additional demand driver is the rapid expansion of AI-enabled data centres, which require high-reliability transformers and specialised power infrastructure. Industry estimates project the global data centre transformer market to nearly double over the next decade, reinforcing demand for technologically advanced and higher-value transformer solutions.¹⁶

Indian Economic Environment

India remained the worlds fastest-growing major economy in FY 2025-26, demonstrating resilience despite a challenging global environment. According to the Ministry of Statistics and Programme Implementation (MoSPI), real GDP grew 7.7% during FY2025-26, compared with 7.1% in FY2024- 25, supported by strong manufacturing activity, sustained capital expenditure and resilient domestic consumption. Real GDP stood at ^323.12 lakh crore, while nominal GDP increased 8.9% to ^346.36 lakh crore. Manufacturing Gross Value Added (GVA) grew 10.7%, highlighting continued industrial expansion and strengthening demand for infrastructure and power-related investments.

India: sectoral and expenditure composition, FY 2025-26

Component	FY 2025-26 growth
Real GDP	7.7%
Manufacturing GVA	10.7%
Trade, hotels, transport, communication	11.0%
Gross Fixed Capital Formation	8.2%
Private Final Consumption Expenditure	7.0%
Agriculture	3.2% (primary sector)

Source: MOSPI, Press Note on GDP Estimates for Q4 2025-26 and Provisional Estimates for FY 2025-26, 5 June 2026^{17 18}

Public investment continued to support Indias infrastructure-led growth strategy. The Union Budget 2026-27 increased capital expenditure to ^12.22 lakh

crore, while effective capital expenditure, including grants to states for asset creation, reached ^17.15 lakh crore (approximately 4.4% of GDP). At the same time, the fiscal deficit target was maintained at 4.3% of GDP, reflecting the Governments continued emphasis on infrastructure development alongside fiscal consolidation.¹⁹

Looking ahead, growth is expected to remain robust despite global uncertainties. The Reserve Bank of India projects 6.6% GDP growth for FY2026-27²⁰, while the Economic Survey expects growth in the range of 6.87.2%, supported by domestic demand, manufacturing expansion and continued public investment. Although geopolitical developments may create near-term volatility, Indias long-term infrastructure investment pipeline remains supported by structural policy initiatives and sustained government capital expenditure.

Indian Power Sector

Indias power sector continued its structural expansion during FY 2025-26, supported by record capacity additions, accelerating renewable energy deployment and sustained government investment in transmission and distribution infrastructure. Total installed power generation capacity reached 520.5 GW as of January 2026, with non-fossil sources accounting for over 52% of installed capacity, enabling India to achieve its Paris Agreement target of 50% non-fossil installed capacity more than five years ahead of schedule. During the year, India added a record 52.5 GW of new generation capacity, of which nearly 75% came from renewable energy, led by solar and wind. Peak electricity demand also reached a record 271 GW in May 2026, reflecting the countrys growing electricity requirements across industrial, commercial and residential segments.²¹

India power sector: key indicators and long-term trajectory

1 Metric	FY 2013-14	FY 2024-25	FY 2025-26	2035-36 (P)
Installed capacity (GW)	249	476	520.5 (Jan-26)	1,121
Peak demand met (GW)	130	250	271 (May-26)	459
Non-fossil share of capacity	30%	50%	52%	70%
Energy deficit	8.4%	0.1%	0.03%	—
Annual capacity addition (MW)	—	34,054	52,537 (record)	—

P — Projected per CEA Long-Term National Resource Adequacy Plan (2026-27 to 2035-36). Sources: Ministry of Power / CEA data as reported²²; CEA Resource Adequacy Plan²³; Mercom²⁴; Macquarie²⁵. Note: peak demand for 2026-27 is projected by CEA at 289 GW, rising to 459 GW by 2035-36.²⁶

The long-term outlook for the sector remains robust. The CEAs Long-Term National Resource Adequacy

Plan projects installed capacity to more than double to approximately 1,121 GW by FY2035-36, supported by continued growth in renewable energy, battery energy storage and transmission infrastructure. Complementing this, the National Electricity Plan (Transmission) envisages investments exceeding ^9.15 lakh crore by 2032, including the addition of approximately 1.91 lakh circuit kilometres of transmission lines and expansion of transformation capacity to 2,342 GVA. These investments are expected to play a critical role in integrating renewable energy, strengthening grid reliability and supporting Indias long-term energy transition.

The distribution segment also continued to improve, supported by reforms under the Revamped Distribution Sector Scheme (RDSS). Aggregate Technical & Commercial (AT&C) losses declined to

15.04%²⁷, while the national ACS-ARR gap narrowed to approximately ^0.06 per kWh, resulting in DISCOMs reporting an aggregate profit for the first time. Although implementation of the national smart metering programme remains slower than originally envisaged, continued investment in network modernisation, substation upgrades and digital grid infrastructure is expected to improve operational efficiency and strengthen the long-term financial health of the sector.

Government policy continues to reinforce the sectors long-term growth trajectory. Initiatives such as the Draft National Electricity Policy 2026, the proposed Electricity (Amendment) Bill, the India Energy Stack, continued expansion of battery energy storage systems (BESS), and the Nuclear Energy Mission collectively aim to enhance grid reliability, improve power sector efficiency and accelerate Indias transition towards a cleaner and more resilient electricity system.

Indian Transformer Industry

Indias transformer industry is poised for sustained long-term growth, supported by expanding transmission and distribution infrastructure, accelerating renewable energy deployment and increasing industrial electrification. According to IEEMA, the electrical equipment industry contributes approximately 7.2% of Indias manufacturing GDP and nearly 45% of the capital goods sector, with the transmission and distribution segment accounting for around 65% of the industrys value. Multiple industry studies estimate the Indian transformer market at USD 3-7 billion, with forecasts indicating high-singledigit to low-double-digit annual growth over the next decade despite differences in market definitions and methodology.²⁸

Demand is being driven by large-scale investments under the National Electricity Plan, RDSS, renewable energy expansion, industrial capacity additions and

increasing export opportunities. According to the joint McKinsey-IEEMA study, Indias electrical equipment production could increase from approximately USD 50 billion to USD 195-235 billion by 2035, while transformer exports have grown at over 15% CAGR during the past five years, reflecting Indias increasing participation in global supply chains.²⁹

The industry nevertheless faces important structural challenges. Dependence on imported critical inputs such as grain-oriented electrical steel (CRGO), rising competition from global manufacturers and increasing technology requirements continue to influence competitiveness. At the same time, the absence of a dedicated Production Linked Incentive (PLI) scheme for transformers places greater emphasis on demand- driven growth supported by government investment in transmission, distribution and renewable energy infrastructure.

Structural Industry Growth Drivers

Renewable capacity addition and evacuation

Every gigawatt of new renewable capacity requires a step- up transformer at the generation site and an evacuation transformer at the interconnection point. FY 2025-26s record 39,657 MW of renewable additions³⁰ therefore translated directly and mechanically into transformer orders. The mechanism is arithmetic, not correlative — which is why this remains the single largest driver and why the CEAs trajectory to approximately 70% nonfossil capacity by 2035-36³¹ provides demand visibility extending well beyond any conventional capex cycle.

Battery energy storage: a distinct category, not an extension

The National Electricity Plan (Transmission) explicitly provides for 47 GW of battery energy storage and around 30-31 GW of pumped storage,³² and the CEAs Resource Adequacy Plan incorporates BESS into the

optimal 2035-36 generation mix.³³ The adequacy gap identified in Section 5.2 makes storage a necessity rather than an option.

The transformer implication is specific and frequently misunderstood. A BESS transformer performs the same physical function as any other — voltage step-up or step-down — but its duty cycle differs materially from a solar inverter-duty transformer: bidirectional power flow, charge-discharge cycling, and loading patterns that are not sun-dependent. Where storage is added to an existing solar project, it creates incremental transformer demand rather than substituting for the installed unit; where it is designed in from the outset, it changes the specification of the combined installation. Both cases are additive to the industry. This makes BESS a genuinely new demand category on a similar structural footing to what inverter-duty transformers represented for solar from around 2011.

Data centres and the AI load

Data centre electricity consumption has emerged as a distinct load class. Globally, data centres account for roughly one-tenth of electricity demand growth to 2030 — smaller than industrial motors, air conditioning or electric vehicles — but their impact on transmission and distribution infrastructure is disproportionate, because demand is geographically concentrated and connects at very high load densities.³⁴ The equipment consequence is a shift toward fire-safe indoor and dry- type units at high reliability specifications, a segment historically small in India and now growing rapidly. Global data centre transformer demand is estimated at USD 10.5 billion in 2025 rising to USD 20.7 billion by 2035.³⁵

Transmission and distribution capital expenditure

Covered in detail in Sections 5.3 and 5.4: 2,342 GVA of planned transformation capacity, 1,91,000 circuit kilometres of new lines, 47 GW of BESS, and RDSS- sanctioned loss-reduction works of approximately ^1.51 lakh crore driving replacement of ageing distribution transformers.^{36 37} The HVDC pipeline is a distinct sub-driver: an estimated 32.3 GW pipeline of which approximately 14.5 GW has been tendered and awarded, with expectations of one to two HVDC awards annually and projects worth approximately ^0.76 lakh crore already planned.³⁸ HVDC converter transformers are among the highest-specification, highest-barrier products in the category.

Efficiency, technology transition and specification uplift

The transition toward amorphous-core, ester-filled, dry-type and digitally-monitored designs is being driven by regulation as much as by preference. The Bureau of Indian Standards enforces IS 1180 energy- performance norms for distribution transformers and IS 2026 testing standards, and CEAs revised technical standards compel state transmission utilities to retire ageing assets ahead of schedule.³⁹ CERCs revised tariff regulations push utilities toward lifecycle-cost optimisation rather than lowest-bid acquisition⁴⁰ — a change that, if sustained, structurally favours quality-differentiated manufacturers over price-led bidders. Air-cooled and ester-filled units are being adopted rapidly in urban areas on fire-safety and environmental grounds.⁴¹

Export opportunity

The convergence of the global capacity shortfall (Section 2.3), Western scrutiny of Chinese-origin critical infrastructure equipment (Section 3.2), and Indias demonstrated transformer export growth of more than 15% CAGR⁴² creates a real but conditional export opportunity. The condition is qualification: utility and OEM tenders in Europe, the Middle East, Africa and Australasia require type-testing, audits and track record that take years to establish and cannot be compressed. The opportunity accrues to manufacturers who invested in certification pathways ahead of the window opening, not to those responding to it.

Company overview

Danish Power Limited manufactures transformers for the point in the electricity system where the energy transition is most constrained — the evacuation of renewable generation into the grid. The Company entered inverter-duty transformers in 2011, ahead of Indias renewable build-out, and its equipment has since supported over 14 GW of solar and wind installations worldwide. During FY 2025-26 it more than doubled manufacturing capacity to approximately 11,000 MVA and extended its capability to the 245 kV class, carrying a decade-old position in renewable evacuation into the Extra High Voltage segment,

where competition is thinner and barriers are higher. Incorporated in 1985 by Mr. Dinesh Talwar and Mrs. Shashi Talwar, the Company is headquartered in Jaipur, Rajasthan, and operates under the leadership of Chairman and Whole-time Director Mr. Dinesh Talwar and Managing Director Mr. Shivam Talwar. It designs, manufactures and supplies transformers, control relay panels and substation automation systems to the renewable energy, power transmission and distribution, and industrial utility segments, in India and across international markets.

Product Portfolio

The Company manufactures oil and dry-type power and distribution transformers, inverter-duty and wind turbine generator transformers for solar and wind installations, traction transformers, pad-mounted and special application transformers, dry-type cast resin transformers, and compact and skid-mounted substations, together with control relay panels and substation automation systems. Power transformers are manufactured up to the 245 kV class, and control relay panels and substation automation systems up to the 400 kV class.

Transformers remain the cornerstone of the business, with Inverter Duty Transformers for solar and wind power evacuation the flagship category. The

Companys early entry into IDT, at a time when few Indian manufacturers were building them, produced a large installed base and a field performance record that continues to generate inquiry flow today. Sustained demand from the renewable energy sector supported healthy order inflows, efficient capacity utilisation and resilient profitability through FY 2025-26.

The extension to 100 MVA and 245 kV matters for a reason beyond size. It moves the Company into the Extra High Voltage segment, where type-testing, audit and performance-validation requirements are demanding enough to thin the competitive field and where IEEMA data shows domestic power transformer growth is concentrated. The qualification cycle is long and cannot be compressed; the strategic value of clearing it is that the same is true for anyone following.

1 Segment	Metric	FY25	FY26	YoY %
Transformers	Production (MVA)	4,498	5,468	21.57%
	Revenue (? Lakhs)	39,230	47,864	22.01%
	% of Total Revenue	91.94%	91.79%	(15) bps
Control Relay Panels	Units (Nos.)	427	489	14.52%
	Revenue (? Lakhs)	3,182	3,587	12.73%
	% of Total Revenue	7.46%	6.88%	(58) bps
Total Revenue	? Lakhs	42,671	52,145	22.20%

Source: Investor Presentation, RS. 2/FY26, May 2026 [6]. Figures are on a standalone basis as disclosed by the Company; totals may not fully reconcile with consolidated financial statements due to intra-group and other income adjustments.

Manufacturing

The Company manufactures at two facilities in Jaipur, Sitapura Industrial Area and Mahindra World City, with a combined manufacturing area of over 3,00,000 sq. ft. following the recently completed capacity expansion. Phase 1, adding approximately 2,500 MVA, was commissioned in September 2025; Phase 2 was completed in January 2026, taking installed annual transformer manufacturing capacity to approximately 11,000 MVA, more than double the capacity available at the start of the programme. The expansion also extended manufacturing capability to transformers up to 100 MVA in the 245 kV class, enabling entry into the Extra High Voltage segment.

The Company performs its core processes in-house, coil winding, tank fabrication and high-voltage testing, supported by foil and coil winding machines, vacuum drying ovens, CNC plasma and sheet-rolling equipment, and an in-house transformer oil filtration and processing line. In an industry where the IEA identifies component lead times, not price, as the binding global constraint, process ownership is what converts an order into a delivered transformer on the date promised.

Quality Standards and Certifications

• The in-house testing laboratory holds NABL accreditation under ISO/IEC 17025, the first received by a transformer manufacturer in

Rajasthan and conducts routine and specialised tests including lightning impulse withstand, capacitance-tan delta, temperature rise and partial discharge. External certification queues add weeks to every design iteration; an accredited in-house laboratory shortens the type-testing loop, which is the rate-limiting step in qualifying

at 245 kV. It is the reason the Companys EHV timeline is credible.

• The Company was among the first manufacturers in India to receive a BIS licence for ester (biodegradable fluid)-filled distribution transformers. Ester and dry-type designs are what fire-safety codes require in urban substations and data centres, the fastest-growing, highest- specification pocket in the category. This is a beachhead, not a compliance item.

• ZED (Zero Defect Zero Effect) Gold certification and MSME accreditation from the Ministry of MSME, Government of India, received during the year.

• Star Export House status from the Government of India.

• ified to ISO 9001:2015 (quality), ISO 14001:2015 (environment) and ISO 45001:2018 (occupational health and safety).

Engineering and Technology

Engineering capability is supported by an in-house design team and continued investment in transformer design optimisation software, vacuum drying ovens and advanced insulation processing technology, which have improved manufacturing reliability and reduced delivery timelines. During the year, the Company also upgraded its enterprise resource planning systems to SAP HANA to support operational scalability.

Customers and Market Presence

The Companys customers include Tata Power, ABB India, Waaree Renewable Technologies, Jakson Green and Torrent Power, among others, across renewable power EPC projects, conventional power generation, and power transmission and distribution utilities. CRISILs March 2026 rating rationale notes that no single customer accounts for more than 15-20% of the Companys revenue, indicating relatively low customer concentration. The Companys transformers have cumulatively supported over 14 GW of solar and wind installations worldwide. Danish Power exports to more than 33 countries across Europe, the Middle East, Central and South Asia, Southeast Asia, Africa and Central America. Export revenue increased from approximately ~2% to approximately ~10% of total revenue in FY 2025-26.

Financial Performance, FY 2025-26

Consolidated revenue from operations for FY 202526 was ^521.45 crore, an increase of 22.2% over FY 2024-25. EBITDA was ^99.72 crore, representing

a margin of 19.1%, and profit after tax was ^68.98 crore, an increase of 26.3% over the previous year. The Board has recommended a final dividend of ^2 per equity share of ^10 face value (20%) for the year.

The table below summarises the Companys consolidated income statement for RS. 2 and full-year FY 2025-26, as compared with the corresponding prior-year periods:

Particulars	FY26	FY25	YoY % (FY26)
Revenue from Operations	52,145	42,671	22.20%
Total Income	52,873	43,299	22.11%
Operating Expenses	42,901	34,375	24.80%
EBITDA	9,972	8,925	11.74%
EBITDA Margin (%)	19.12%	20.91%	(179) bps
Finance Cost	187	605	(69.18%)
Depreciation & Amortisation	742	535	38.71%
Profit Before Tax	9,044	7,785	16.17%
Profit After Tax	6,898	5,463	26.26%
PAT Margin (%)	13.05%	12.62%	43 bps
EPS - Basic (?)*	35.03	32.78	6.87%

* EPS is presented on a full-year basis only, as reported; the RS. 2 figure is not separately disclosed on a non-annualised basis. Source: Investor Presentation, RS. 2/FY26, May 2026, and Audited Consolidated Financial Results filed with NSE, May 9, 2026.

Key financial ratios for the year, on a consolidated basis, were as follows:

Key Ratios (Consolidated)	FY26 1	FY25
EBITDA Margin (%)	19.12%	20.91%
PAT Margin (%)	13.05%	12.62%
EPS - Basic (?)	35.03	32.78
Debt-Equity Ratio (x)	0.0047	0.0129
Debt Service Coverage Ratio (x)	41.12	15.62 10.03
Interest Service Coverage Ratio (x)	37.98
Current Ratio (x)*	3.52	3.60

* Current Ratio computed from reported consolidated balance sheet figures (total current assets + total current liabilities) as at March 31, 2026 and March 31, 2025. All other ratios as reported in the Companys audited financial results. Source: Audited Consolidated Financial Results filed with NSE, May 9, 2026.

The Companys balance sheet remained near debt-

free, with a negative net debt position, and it closed the year with an unexecuted order book of over ^500 crore. In March 2026, CRISIL upgraded the

Companys rating to CRISIL A-/Stable/CRISIL A2+ from CRISIL BBB+/Positive/CRISIL A2, with rated bank facilities enhanced to ^185 crore. [7] Proceeds from the Companys October 2024 Initial Public

Offering of ^197.9 crore have been fully utilised in

accordance with the stated objects of the issue.

Key Developments During the Year

Backward Integration

• The Company commenced work on a sheet metal fabrication facility through a subsidiary, with a capital outlay of approximately ^20 crore. Sheet metal components, transformer outer bodies and cooling equipment represent the Companys longest-lead-time input, and the initiative is directed at supply chain control and execution reliability.

Product and Market Entry

• Supply of transformers for battery energy storage system (BESS) applications commenced during the year, with orders secured and executed following an extended period of design and process preparation. Where storage is added to an existing solar installation, it creates incremental transformer demand rather than substituting for the installed unit.

Capital Allocation

• The Company acquired land adjacent to its existing facilities within the same industrial zone, ahead of

any capital commitment, securing the timeline for a future expansion while preserving flexibility on scale and timing.

Sustainability and ESG

• An enterprise-wide ESG reporting framework was implemented during the year to support regulatory compliance monitoring and investor disclosure.

• The Company adopted a target to reduce greenhouse gas emissions by 50% by 2030, and sourced approximately 40% of its energy consumption from renewable sources during the year.

Social and Community

• Danish Foundation, a Section 8 company, was incorporated as a dedicated vehicle for the Companys Corporate Social Responsibility initiatives, spanning education, healthcare, skill development and environmental stewardship.

• Headcount on direct roll crossed 550 as at March 31, 2026, from over 450 a year earlier, reflecting a deliberate shift towards a stable, skilled and directly employed workforce, a transition that supports the Companys entry into the Extra High Voltage segment, where manufacturing tolerances rise materially.

Competitive Advantage

The following factors underpin the Companys competitive position and are expected to support its ability to execute its growth strategy over the medium term.

Advantage	Basis	Limitation
Early-mover position in IDT	Entered IDT in 2011, before the renewable build-out; large installed base and field performance record generate a broad inquiry base	IDT is the segment now attracting vertical entrants from the customer base
Capacity available ahead of the cycle	11,000 MVA commissioned as the global supply chain is capacity-constrained (Part I, ?2.3); enabled export framework agreements previously impossible	The industry-wide capacity investments catalogued by the IEA will loosen the market over time
Private-sector revenue orientation ( 90%)	Stronger payment discipline, better margins, faster execution cycles; insulated from DISCOM payment variability	Exposure shifts to renewable developer capital cycles and tender cancellations
Voltage-class migration in progress	100 MVA / 245 kV capability with type-testing under way; barriers protect those already through	Not revenue-generating before FY28; qualification could slip
Balance sheet strength	Debt-free to near-debt-free; CRISIL A-; expansion funded without leverage	Working capital intensity rises with scale and inventory positioning
In-house NABL- accredited testing Client maturity	Shortens the type-testing iteration loop, the rate-limiting step in voltage-class migration Clients described as mature, not price-only buyers, able to share commodity burden	External BIS certification queues remain outside the Companys control This is an assertion tested only in adverse conditions — FY27 will test it

Outlook

The Company has indicated that its FY 2026-27 priorities are to deepen engagement with specialised customer segments enabled by its new 245 kV manufacturing capability, in both domestic and export markets, supported by strong demand indicators across its product lines. Export growth achieved during FY 2025-26 is expected to continue, supported by a healthy inquiry pipeline and sustained interest from existing customers, though management has stated it continues to monitor global trade dynamics closely. The backward integration facility under construction is expected to be commissioned by August 2026 and is intended to strengthen cost competitiveness.