Deepak Builders & Engineers India Ltd Management Discussions

Company Outlook & Core Activities

The construction sector stands as a key component of the Indian economy, ranking as the second-largest economic activity after agriculture. It plays a vital role in national development by contributing significantly to the Gross Domestic Product (GDP). More importantly, the sector serves as the second-largest employment generator in the country, directly providing livelihoods to millions of professionals across diverse domains such as engineering, construction, architecture, and skilled trades. Additionally, the sector indirectly supports numerous job opportunities in associated industries like manufacturing, transportation and logistics. This multiplier effect makes construction a strategic driver of inclusive economic growth. Recognizing its pivotal importance, the Government of India has designated the construction and infrastructure sector as a priority area for investment. Through a series of progressive reforms and policy initiatives, efforts are being made to enhance the sector‘s attractiveness on year-to-year basis, there has been a notable increase in budgetary allocations aimed at infrastructure development. On the policy front, the government is actively working to streamline regulatory frameworks by simplifying procedures for land acquisition, environmental clearances, and project approvals addressing longstanding bottlenecks and improving ease of doing business in construction. Deepak Builders & Engineers India Limited is an integrated engineering and construction company, specializing in execution and construction of administrative & institutional buildings, Luxury Homes, Flats, medical college & hospitals, industrial building, historical memorial complex, stadium and sports complex, residential complex and various developmental and other construction activity. Further, the company have diversified in undertaking structural work such as flyovers, rail under bridge, rail over bridges, and redevelopment of railway stations. We undertake Construction & Infrastructure projects, under EPC mode on a fixed-sum turnkey basis as well as on an item-rate basis/percentage basis. Projects under EPC mode reduce complexity and improve coordination, leading to cost control and timely completion of the project. Your Company is having vast experience in construction sector of EPC works and is highly optimistic to improve its order book substantially, by procuring further contracts in the forthcoming years. The company‘s major chunk of the business is transacted with Central Govt., State Govt. & Semi Govt. The vision of the company is to serve the nationwide construction projects with uncompromising integrity, excellence, technology improvement and to become the industry leaders in innovative engineering and sustainable infrastructure. The priority of the company is to complete the projects on time without compromising the quality standards. Over the years, we have earned a strong reputation for trusted leadership and influential presence in the infrastructure sector, setting benchmarks in quality, reliability, and professionalism. The company is recognized for delivering high-quality work and has consistently received ?Very Good to ?Outstanding ratings, from respective government departments upon the successful completion of projects. These endorsements have significantly contributed to securing further projects from various government agencies. The aim of the company is to stay aligned with market developments and create sustained value for our shareholders, we will continue to deliver efficient, high-quality constructions & infrastructure projects that provide tangible value to our clients. This approach ensures a competitive return on investment while reinforcing our focus on financial strength and stability. At present, the company is actively exploring opportunities under the Amrit Bharat Station Scheme, initiated by the Ministry of Railways, Government of India, for the redevelopment and modernization of railway stations across the country. This scheme emphasizes enhancing passenger amenities and improving overall connectivity. The company is involved in railway redevelopment projects in North India, specifically at Ludhiana, Jalandhar, Faridabad, and Delhi Cantt. In addition to these, the company is also undertaking an industrial building project awarded by Indian Oil Corporation Limited (IOCL) in Panipat, Haryana.

We are committed to continuing our contribution to national infrastructure by participating in impactful redevelopment projects, especially those aligned with public service and connectivity. Most recently, the company has been entrusted with two significant projects:

1. Construction of a 150-bedded Critical Care Block at PGIMER, Chandigarh, awarded by HSCC (India) Ltd., Noida (U.P.). 2. Construction of a Unity Mall on EPC (Engineering, Procurement, and Construction) mode, awarded by HSIIDC, Karnal (Haryana). Deepak Builders & Engineers India Limited has successfully delivered several landmark infrastructure and public utility projects. Some of our key accomplishments include: Jang-E-Azadi Memorial, Kartarpur, Jalandhar (Punjab) Karuna Sagar Maharishi Valmiki Tirath Asthaan, Ram Tirath, Amritsar (Punjab) Geriatrics Block, AIIMS Campus, New Delhi Super Specialty Block, Government Medical College, Patiala (Punjab) Road and bridge projects, including construction of two Rail Over Bridges

KEY HIGHLIGHTS OF THE COMPANY PERFORMANCE IN FINANCIAL YEAR 2024-25

1.The total income of the Company for the year under review is Rs. 58665.21 Lakhs as compared to Rs. 51674.27 Lakhs recorded in the previous year.

2. Net Profit after tax stood at Rs. 5674.98 Lakhs as compared to a Net Profit after tax of Rs. 6041.16 Lakhs in the previous year.

Discussion on Financial performance with respect to operational performance. Operational Performance Review:

The financial statements have been prepared in compliance with the requirement of the Companies Act, 2013 and Indian Accounting Standards in India. The company recorded an increase in revenue from operations by 13.76%. The revenue from operations increased to Rs. 58179.38 lacs during the financial year 2024-25 as compared to Rs. 51140.20 lacs during the previous year. The profit before tax amounting to Rs. 8103.79 lacs during the financial year 2024-25 as compared to Rs. 8178.63 lacs during the previous year. The profit for the period amounting to Rs. 5674.98 lacs during the financial year 2024-25 as compared to Rs. 6041.16 lacs during the previous year.

Key Financial Ratios:

Key Financial Ratios along with detailed explanation thereof for the year 2024-25 (previous year 2023-24) pursuant to Schedule V(B) to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:

Notes:

1. Variance in current ratio is on account of the significant increase in current assets during the current year as compared to the previous year due to addition of IPO proceeds.

2. Variance in debt equity ratio is on account of increase in total equity due to addition of IPO proceeds.

3. Variance in Debt Service coverage ratio is on account of increased debt repayments as compared to previous year.

4. Variance in Return on Equity ration is on account of increase in average shareholder‘s equity on account of addition to equity from IPO proceeds.

5. Variance in Return on Capital Employed is on account of significant increase in capital employed on account of addition to equity from IPO proceeds.

Threat Risks and Concerns

The Construction & Infrastructure business is a high-risk business. Each construction project is unique and comes with its own set of challenges and opportunities. There are risks which are inherent in construction projects like financial, contractual, operational, political and environmental and can be caused by both internal and external sources. The major identified risk areas are safety hazards that lead to accident and injuries, unknown site conditions, remote working areas, procurement of materials, unexpected increase in material costs, finance liquidity related issues, shortage of labour, interest rate & credit risk. When risks come into existence in a project, they have a serious impact on costs, schedules, and performance of the project, which leads to delays. Moreover, the risks to the

Company‘s businesses can arise from changes in technologies, evolution in business models as well as intensified competition. While the Company is equipped to deal with these risks and manage these aspects suitably. The Company has a healthy risk management framework, which regularly monitors the risk and advises on corrective action to be taken. Overall, risk management is integrated with business processes to ensure that risks are adequately managed, while ensuring that the regulatory and other compliance requirements are met. Managing risks in construction projects has been recognized as a very important process in order to achieve project objectives in terms of time, cost, quality, safety and environmental sustainability.

Internal Control Systems and their Adequacy

The Company has internal control system which is commensurate with the nature, size and complexity of the business. The Company‘s internal controls framework ensures integrity in conducting its business, safeguarding its assets, timely preparation of reliable financial information, accuracy and completeness in maintaining accounting records and prevention and detection of frauds and errors. The primary responsibility for establishing, operating and upgrading the Internal Control System is on the management of the company and is extended by internal audits, standard operating procedures, on an ongoing basis. In collaboration with the internal auditors, the finance department undertakes periodic risk assessments across all organizational functions. The purpose of internal control is to ensure the reliability of the financial reporting, efficiency and profitability of operations and compliance with legislation and other regulations.

Human Resources

A skilled and motivated workforce is essential to upholding our stringent quality and safety standards. Strong employee relations are also crucial for maintaining our competitive edge. To this end, the Company invests in comprehensive training programs to develop a highly skilled workforce. Regular training, competitive compensation, and robust employee welfare initiatives foster a positive work environment and contribute to harmonious labour relations. The total number of employees as on 31st March 2025 are 597 employees. A skilled and motivated workforce is essential asset of an organization to achieve its objectives and goals. The company provide its employees a conducive work environment that helps them deliver their best. The Company invests in comprehensive training programs to develop a highly skilled workforce and expand their knowledge. The HR team works closely with project managers to implement safety programs which includes conducting safety training, enforcing safety protocols, and ensuring compliance with occupational health and safety regulations. The effective management of the workforce to ensure the successful completion of construction projects within budget and on schedule.

Forward-looking Statement

The Annual Report including those which relate to the Directors‘ Report, Management Discussion and Analysis Report may contain certain statements on the Company‘s intent expectations or forecasts that appear to be forward looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statements.