Enviro Infra Engineers Ltd Management Discussions

Global Economy

The global economy in 2025 and into 2026 has shown cautious stability, shaped by diverging growth trends and an uneven geopolitical environment. According to the International Monetary Funds (IMF) World Economic Outlook, global growth is projected to slow to 3.1% in 2026 and 3.2% in 2027, mainly due to

geopolitical conflicts in the Middle East, rising commodity prices, and tighter financial conditions.

While the global economy successfully withstood higher trade barriers and inflationary pressures in the previous year, renewed

geopolitical fragmentation continues to pose downside risks. However, global inflation is expected to decline gradually towards central bank targets by 2027, paving the way for eventual monetary easing and more stable global capital flows.

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Real GDP Growth Projections (in %)

Despite global headwinds, India remains a standout growth performer, reinforcing its position as the worlds fastest-growing major economy. Supported by resilient domestic consumption, strong service exports, and sustained public capital expenditure, Indias GDP grew by a robust 7.4% in FY 2025-26.

The Governments continued focus on infrastructure development remains central to this momentum.

The Union Budget 2026-27 allocated INR 12.2 Lakh crore to public capex, reaffirming its emphasis on infrastructure development across logistics, railways, defence manufacturing, and digital infrastructure. These investments are improving supply-side efficiencies, lowering logistics costs, and strengthening Indias manufacturing competitiveness.

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India is also witnessing a major structural shift towards sustainable and resilient infrastructure. Driven by stricter environmental regulations and national decarbonisation mandates, the country is accelerating its transition towards clean-tech, renewable energy integration, and circular water economies. This shift is positioning India as a global frontrunner in sustainable industrial development.

GDP Growth Projection (in %)

6.9

2026-27P 2

7.4

2025-26P 1

6.5

2024-25E 1

E: Estimated P: Projected

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Global Water and Wastewater Treatment Industry

The global water and wastewater treatment sector is witnessing robust growth, driven by the dual need to secure safe drinking water supplies and sustainably manage municipal sewage and industrial effluents. The broader water and wastewater treatment market, covering treatment equipment, chemicals and related services, was valued at USD 372.39 billion in 2025 and is projected to reach USD 400.32 billion by 2026. Within this ecosystem, the specialised wastewater treatment services market, focused on engineering, procurement, construction and operations, was valued at USD 62.65 billion in 2024 and is expected to reach USD 92.74 billion by 2030, growing at a CAGR of 6.87%.

To meet increasingly stringent potable water standards and effluent discharge norms, the sector is shifting towards advanced membrane-based technologies, including ultrafiltration and reverse osmosis (RO). At the same time, the industry is moving away from fragmented construction contracts towards integrated, lifecycle-focused Design-Build-Operate (DBO) and long-term Operations and Maintenance (O&M) models to ensure sustained regulatory compliance across water supply and wastewater management.

(Sources: . wastewater-treatment-market-102632,

Market-Reports/waste wa ter-trea tment- service-market-38039841.html)

Escalating Water Scarcity Driving Purification and Reuse

With nearly 10% of the global population living in countries facing high to critical water stress, a severe water scarcity crisis is emerging. Freshwater demand is projected to exceed supply by 40% by 2030.

Despite the growing crisis, only 11% of the nearly 359 billion cubic metres of wastewater generated globally each year is intentionally reused, while almost 48% is discharged untreated.

To bridge this widening gap and support nearly half of the global population facing seasonal water scarcity, municipalities are expanding freshwater treatment infrastructure and accelerating wastewater recycling to create reliable secondary water sources. (Sources: s tories/2023/03/global-freshwa ter- experts-warn/ . Country-level_and_gridded_e s timates_ of_wastewa ter_production_collection_ trea tment_and_reuse)

Stringent Environmental and ZLD Mandates

Growth is being driven by stricter enforcement of environmental regulations, particularly Zero Liquid Discharge (ZLD) norms across high-polluting industries. Severe penalties for untreated effluent discharge are compelling industries to invest steadily in advanced wastewater treatment technologies.

The OECD estimates global water infrastructure investment requirement could reach USD 6.7 trillion by 2030 and USD 22.6 trillion by 2050. Rising demand for water security, infrastructure modernisation, and wastewater treatment is creating significant opportunities for capacity expansion across water and wastewater ecosystems.

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Shift to Circular Economy and Resource Recovery

Driven by UN SDG targets and corporate ESG goals to reduce freshwater extraction, the global push towards wastewater recycling and reuse is transforming conventional sewage treatment plants into resource recovery centres. These facilities can extract biogas and supply high-quality reclaimed water for industrial applications.

Global Renewable Energy and BESS Industry

The global shift towards clean energy has accelerated growth across the renewable sector. Driven by rising demand, rapid technological advances, and supportive policies across more than 130 nations, the International Energy Agency (IEA) projects global renewable capacity to reach 7,300 GW by 2028. Solar photovoltaic (PV) and wind energy are expected to lead this growth, accounting for 95% of all new capacity additions. Over the next five years, the world is expected to add a record 4.5 TW of wind and solar capacity, marking a 67% increase over the previous five-year period.

As of 2024, the global renewable energy market was valued at nearly USD 1.2 trillion and is projected to grow at a CAGR of over 9.5%, surpassing USD 2.4 trillion by 2032. To support this sharp rise in intermittent generation, the global Battery Energy Storage

System (BESS) market is also scaling up rapidly. Valued at USD 74.6 billion in 2026, the market is expected to reach USD 170.1 billion by 2033, registering a strong CAGR of 13% during the period.

(Sources: . mercomindia. clean-energy/progress-despite- fragmentation-the-energy-transition- system/renewables, . battery-energy-storage-system-market)

Key Growth Drivers

Decarbonisation Mandates

Sovereign net-zero commitments and stringent climate policies are accelerating capital shifts away from fossil fuels. In 2024, global clean energy investment reached a record USD 2 trillion, nearly double fossil fuel investments.

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Rising solar and wind penetration is increasing grid instability. The urgent need to balance power loads is driving significant investments in hybrid energy systems integrated with BESS.

Technological Advancements and Cost Reductions

Continuous innovation in battery chemistries and manufacturing scale efficiencies are rapidly lowering the levelised cost of storage (LCOS). In 2025, battery pack prices for stationary storage fell 45% year-on- year to a record low of USD 70/kWh, making utility-scale BESS commercially viable.

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battery-prices/)

Corporate Energy Transition

Driven by stringent ESG targets and the need for long-term price stability, corporations are accelerating green energy procurement. In 2025 alone, global corporations signed Power Purchase Agreements (PPAs) for nearly 56 GW of clean power.

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Outlook

The global renewable energy sector is undergoing a steady transition, driven by sovereign decarbonisation targets and long-term energy security goals. This momentum is supported by record global energy transition investments of USD 2.3 trillion in 2025. As part of this shift, the industry is moving beyond standalone generation towards integrated, grid- resilient infrastructure.

Within this evolving landscape, capital allocation is increasingly focused on sub-segments pairing solar and wind assets with utility-scale BESS. Traditionally, standalone renewable assets operate at lower Capacity Utilisation Factors (CUF) of 20-35%. However, hybrid systems

can raise blended CUFs to 70-80% while enabling round-the-clock (RTC) power delivery.

Supported by rising global investments in energy storage, hybrid park deployment is expected to strengthen renewables as a reliable and dispatchable baseload power source. This transition is further reflected in the sharply narrowing global solar-to- storage deployment ratio, projected to decline from 56:1 in 2016 to 4:1 by 2026. As a result, cumulative global battery storage capacity is expected to grow 17-fold to 3.8 TW by 2050.

(Sources: tion-to-s trengthen-nations-energy- security/, watt-era-three-things-to-kno w/)

Indian Water and Wastewater Treatment Industry

The Indian water and wastewater treatment industry is poised for steady growth, supported by widening supply- demand gaps and increasing

government focus on infrastructure development. Within this industry, the water and wastewater treatment technology market, covering filtration, membrane systems, biological and chemical treatment, water reuse and ZLD solutions, is projected to grow from USD 2.98 billion in 2025 to USD 5.17 billion by 2031, at a CAGR of 9.62% during 2026-2031.

Growth is driven by rising freshwater scarcity, stricter zero-liquid-discharge (ZLD) norms, government initiatives such as AMRUT 2.0, growing adoption of wastewater reuse and advanced treatment solutions across municipal and industrial sectors, and ESG-linked industrial decarbonisation efforts.

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Rising Water Stress and Declining Per-Capita Availability

India ranks 132 nd globally in per capita water availability, placing it among water-stressed nations. Annual per capita water availability stood at 1,486 cubic metres in 2021, below the 1,700 cubic metre water stress threshold, and is projected to decline further to 1,140 cubic metres by 2050. This is increasing the need for water treatment, reuse and sustainable water management solutions.

Sharp Decline in Freshwater Availability

Between 1950 and 2024, India witnessed a 73% decline in per capita surface water availability, reflecting mounting pressure on freshwater

resources and reinforcing the need for alternative water sourcing and treatment infrastructure.

Large Urban Wastewater Treatment Deficit

Urban India generated 72,368 MLD of sewage during FY 2020-21 against an installed treatment capacity of 31,841 MLD and an operational capacity of only 26,869 MLD. Of the total sewage generated, only 28% (20,236 MLD) was treated, while 72% remained untreated and was discharged into water bodies or land. This highlights significant treatment infrastructure requirements.

Regulatory Push towards Water Reuse

The Ministry of Jal Shaktis mandate requiring cities to recycle and reuse at least 20% of water consumption is expected to support investments in wastewater treatment, recycling and reuse infrastructure.

Smart Cities Mission and Urban Modernisation

The push to develop robust Smart Cities is acting as a major catalyst for modernising urban water supply systems. It is driving the implementation of SCADA-enabled networks, smart metering and automated quality monitoring to reduce leakages.

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By Application

In the Indian market, the municipal sewage treatment segment accounts for the largest volume share, driven by rapid urbanisation and the urgent need to treat over 72,000 MLD of urban sewage generated daily. Highly polluting sectors such as textiles, pharmaceuticals and chemicals are investing heavily in robust Effluent Treatment Plants (ETPs) to comply with Zero Liquid Discharge (ZLD) mandates. As a result, industrial applications command premium technology investments despite smaller overall volumes.

(Sources: International Water Association, Association of Water Technologies, National Ground Water Association, Water Environment Federation, Water Quality Association, Water & Sewer Industry Organisations, Ministry of Jal Shakti (MoJS), Central Water Commission (CWC), National Water Development Agency (NWDA), Water Resources Management Organisation, Central Pollution Control Board, Department of Water Resources, River Development, Department of Drinking Water and Sanitation, World Bank, Journals & Articles, Press Releases, Company Websites, Investor Presentations & Whitepapers, Annual Reports, Primary Interviews, Reports and Data)

Industry Trends

India is undergoing a paradigm shift from simple disposal to structured recycling, reuse, and resource recovery. Current best practices focus on building a localised circular economy, where wastewater is viewed not as waste but as a critical utility resource.

Sludge Management and Valorisation

A rapidly developing focus area in the country is the advanced treatment of sludge generated from treatment plants. Modern systems classify sludge (Class A, B, or C) and use thermal hydrolysis and anaerobic digestion to convert it into valuable by-products, including nutrient-rich bio-fertilisers for agriculture and biogas for energy generation.

Resale of Treated Water

With widening supply-demand gaps, STPs and CETPs are adopting revenue- generation models by legally reselling tertiary-treated wastewater to process industries and thermal power plants, significantly reducing freshwater dependence.

Energy Integration

Modern plants are increasingly integrating sustainable on-site energy solutions, combining biogas-to- electricity turbines and rooftop solar systems to offset the high energy costs associated with aeration and pumping.

Government Initiatives

The sector is strongly supported by centrally funded government missions that provide long-term visibility and execution scale over the next decade:

AMRUT 2.0 (Atal Mission for Rejuvenation and Urban Transformation)

Operated under the Ministry of Housing and Urban Affairs, AMRUT 2.0 aims to make all recognised cities and municipalities in India water secure. With a total budgetary outlay of INR 2.77 Lakh crore, including central assistance of INR 76,760 crore, the mission strongly promotes the circular economy. It mandates that cities meet at least 20% of their water demand and 40% of industrial water demand through the recycling and reuse of treated wastewater, driving demand for advanced tertiary STPs.

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Guidelines.ndf)

Namami Gange

(National Mission for Clean Ganga)

Managed by the National Mission for Clean Ganga (NMCG), this 100% centrally funded initiative continues to support the ecological rejuvenation of the Ganga river basin. With an approved Phase-II outlay of INR 22,500 crore through 2026, the mission has pioneered the successful Hybrid Annuity Model (HAM) and the One City, One Operator approach. This ensures that a single developer is responsible for the complete design, construction, and 15-year O&M of a citys sewage infrastructure.

JAMMU & KASHMIR

Swachh Bharat Mission - Urban 2.0 (SBM-U 2.0)

With an overall outlay of INR 1.41 Lakh crore, including a committed central share of INR 36,465 crore, SBM-U 2.0 extends beyond solid waste management to promote sustainable sanitation in smaller municipalities. A key pillar of the mission is Faecal Sludge and Septage Management (FSSM) in Tier 2 and Tier 3 cities, ensuring that untreated wastewater or faecal sludge is not discharged into the environment or water bodies. This is unlocking a large decentralised wastewater treatment market across the countrys hinterlands.

Outlook

The Indian wastewater treatment market presents a strong long-term growth opportunity, supported by favourable structural demand drivers and sustained investment visibility. With an estimated immediate bid pipeline exceeding INR 26,000 crore under AMRUT 2.0 alone, the sector remains structurally positioned for sustained doubledigit growth. The future landscape will be dominated by

Hybrid Annuity Models (HAM) and One City, One Operator frameworks, enabling longterm operational efficiency and stable annuity yields for EPC players.

Further, as the National Green Tribunal enforces stringent ZLD guidelines and mandates the purchase of treated sewage water by thermal power plants, industrial

demand for complex tertiary treatment and desalination equipment is expected to rise. This combination of consistent regulatory enforcement, assured central funding, and expanding industrial reuse secures a commercially attractive long-term runway for organised players in

Indian Renewable Energy and BESS Industry

The Indian renewable energy sector is witnessing accelerated capacity expansion, driven by the national ambition to achieve 500 GW of non-fossil fuel capacity by 2030.

India has reached a historic milestone in its clean energy transition, surpassing its Nationally Determined Contributions (NDC) targets. As of January 2026, the countrys total installed power generation capacity stood at 520.51 GW, with non-fossil sources accounting for 271.96 GW.

Reinforcing this momentum, a record 52.53 GW of total generation capacity was added during the year, of which 39.65 GW came exclusively from renewables, marking the highest single-year addition in Indias history.

Driven by rising peak electricity demand, this expansion, led mainly by solar and wind, strengthens Indias position as the worlds third-largest renewable energy market.

Within this broader scenario, the wind energy segment presents significant strategic opportunities. Indias cumulative installed wind power capacity crossed 56 GW by the end of FY 2025-26, supported by a record

6.05 GW capacity addition during the year. This growth aligns directly with the governments target of achieving 100 GW of installed wind capacity by 2030. In addition, the development pipeline is increasingly shaped by Wind-Solar Hybrid tenders, as central and state agencies prioritise

integrated models to optimise transmission infrastructure and deliver firmer, dispatchable power.

However, the rapid influx of variable solar and wind power also creates challenges related to grid stability and intermittency. To support this transition, the Battery Energy Storage Systems (BESS) segment is emerging as a key growth driver. According to the Central Electricity Authority (CEA), India will require nearly 42 GW (208 GWh) of BESS capacity by FY 2029-30 to efficiently integrate rising renewable generation into the grid.

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Aligned closely with global clean energy transition trends, Indias renewable and BESS market is driven by several global and local growth factors:

Grid Imbalancing and Intermittency

The rapid expansion of intermittent solar and wind assets has created significant grid-balancing needs. This dynamic is driving utility-scale demand for BESS to store excess power and stabilise load requirements.

To support the commercial viability of the BESS ecosystem, the Indian Government has approved Viability Gap Funding (VGF) schemes for initial BESS projects, encouraging private sector participation.

Push for Round-the-Clock (RTC) Power

Industries and power distribution companies (DISCOMs) are shifting from standalone solar and wind towards firm, dispatchable, 24/7 renewable power. This is increasing the relevance of integrated Solar- Wind-Storage hybrid assets.

Outlook

The future of Indias renewable energy sector lies in hybridisation and storage. The industry is moving beyond standalone solar parks towards integrated, grid-balancing infrastructure. EPC and IPP developers that can effectively integrate wind, solar and BESS will gain a distinct competitive advantage by enabling 24/7 power supply, reducing grid imbalances and ensuring reliable long-term energy yields.

Business Overview

Enviro Infra Engineers Limited (EIEL or The Company) is among Indias leading players in the essential utilities and sustainable infrastructure sector, with a diversified presence across water, wastewater, and renewable energy infrastructure. The Company operates through two distinct pillars: its core water and wastewater infrastructure business and its renewable energy platform, housed under a separate subsidiary.

With over 17 years of experience since its incorporation in 2009, EIEL has established a strong market position backed by proven execution capabilities. To date, the Company has delivered over 57 projects with an aggregate treatment capacity of nearly 960 MLD, building a strong track record in the design, construction, and operation of complex Sewage Treatment Plants (STPs), Common Effluent Treatment Plants (CETPs), and advanced tertiary treatment infrastructure. During FY 2025-26, the Company further expanded its geographical footprint through project wins across Maharashtra, Bihar, Odisha, and other key markets, strengthening its presence in Indias water infrastructure space.

The Company also achieved a major corporate milestone with its successful IPO in FY 2024-25, which became the largest IPO in the sector and set a new industry benchmark.

The listing enhanced the Companys market visibility, strengthened its

capital base, and positioned it for the next phase of growth.

Operating as a distinct and separate growth engine, the Companys renewable energy business is housed under EIE Renewables Private Limited (EIE RPL), its wholly owned subsidiary. During FY 2025-26, EIE RPL progressed the development of a 79 MW solar IPP portfolio and 12 MW of solar EPC projects, which are currently under implementation. The Company also secured four NTPC- awarded BESS EPC projects aggregating 930 MWh and advanced the development of a 150 MWh BESS IPP project, further strengthening its presence in the energy storage sector.

Further strengthening its renewable platform, the Company acquired Suyog Urja Limited on 28 th April, 2026 for INR 311 crore. The acquisition added a specialist wind EPC capability with execution experience across 1,200 MW projects and an active execution pipeline of 1,702 MW and an order book of approximately INR 777 crore.

By operating across both water recycling and hybrid clean energy ecosystems, Enviro Infra Engineers is uniquely positioned as an integrated provider of climate-resilient and sustainable infrastructure solutions.

c In-House Design and Execution Capabilities

EIEL executes projects through strong in-house design, engineering, and process capabilities, supported by specialised civil contractors for site execution. This backward integration ensures strict quality control, reduces margin leakage, and enables timely project delivery.

c Integrated Renewable Execution Capabilities

Backed by a proven track record EIEL has built end-to-end renewable EPC capabilities. To strengthen this portfolio, the Company strategically acquired Suyog Urja, a wind EPC company. This combined expertise positions EIEL to deliver integrated hybrid solutions for complex, multitechnology national tenders.

c Early-Mover Advantage in BESS

Building on its renewable foundation, EIEL holds an early- mover advantage in the fastgrowing BESS market. By proactively meeting complex technical pre-qualifications for early utility-scale tenders, the Company secured 1,080 MWh of capacity, among the largest storage portfolios held by Indian EPC players.

c Distinct, Annuity-Style Returns from IPP Assets

To generate predictable long-term value beyond EPC cycles, the Company is building a dedicated portfolio of Independent Power Producer (IPP) assets (79 MW solar, 150 MWh BESS). Importantly, this segment is evaluated separately from the EPC business. Instead of EBITDA, the IPP segment focuses on long-term Internal Rate of Return (IRR), sustained energy sales revenue, and lease rental income, enabling steady annuity-style cash flows across the asset lifecycle.

c Asset-Light Financial Prudence

EIEL maintains a disciplined balance sheet. While selectively undertaking Hybrid Annuity Model (HAM) projects alongside EPCs (targeting a 75:25 mix), the Company closely monitors its capital structure, maintaining a comfortable debt-to-equity ratio of 0.3x and keeping it well below 1.0x to support long-term stability.

Opportunities

c The ZLD, Tertiary Treatment, and Reuse Boom

Growing regulatory focus on Zero Liquid Discharge (ZLD), wastewater reuse, and stricter discharge norms is creating strong opportunities in CETPs and advanced treatment solutions. Rising demand from thermal plants and industries for treated wastewater is also creating recurring revenue opportunities through reuse models.

c Advanced Sludge Management

As the sector moves towards resource recovery, opportunities are emerging in sludge treatment and valorisation. The Companys Value from Waste strategy supports revenue generation through biogas/CBG extraction, conversion of sludge into bio-fertilisers, and the use of Class A/B/C sludge as energy feedstock.

c Grid Balancing and Hybrid Energy Solutions

Increasing renewable energy penetration is driving demand for grid-balancing solutions, creating significant opportunities for BESS and hybrid renewable platforms. The acquisition of Suyog Urja strengthens the Companys Solar, Wind, and BESS capabilities. Supported by Viability Gap Funding (VGF), these capabilities provide a strong long-term growth runway.

c Robust Bidding Pipeline

Government-led programmes continue to provide strong order visibility and a healthy medium-term bidding pipeline. Supported by opportunities under AMRUT 2.0 and Namami Gange Phase-II, the Company remains well positioned for sustained order inflows, strengthening revenue visibility and growth prospects.

c Land Acquisition and Site Clearances

Infrastructure projects inherently face risks related to delays in land acquisition, right-of-way (RoW) approvals, and local clearances, which may extend execution timelines and delay revenue recognition.

c Grid Non-availability and Evacuation Bottlenecks

For EIELs renewable energy ventures, delays in state- level grid infrastructure and transmission connectivity may affect timely commissioning and power evacuation for its IPP and EPC solar/wind assets.

r Dependency on Government Funding Cycles

As the primary clients are state government bodies, unexpected delays in central fund disbursements or shifts in budget allocations, as witnessed historically in certain rural missions, may temporarily impact working capital cycles.

@ Intense Competition

The attractive nature of the water utility and renewable sectors continues to draw domestic and international players, leading to aggressive bidding environments that require strict margin discipline.

Financial Overview

Enviro Infra Engineers continued to strengthen its growth visibility, supported by a robust order pipeline of INR 68,136 million at a consolidated level. For FY 2025-26, Revenue from Operations stood at INR 11,456.00 million, representing a growth of 7.5% year-on-year.

EBITDA improved by 11.4% to INR 320.03 million and PAT surged by 6.34% to INR 112.37 million.

A major milestone was the acquisition of Suyog Urja through EIE Renewables

Private Limited, marking Enviro Infra Engineers entry into the wind energy EPC segment and strengthening its renewable platform across solar and BESS.

The Companys healthy order pipeline and disciplined execution approach provide strong forward visibility, with existing order inflows supporting medium-term growth expectations under conservative conversion assumptions.

50.46%

Revenue CAGR

(FY 2021 -22 to FY 2025-26)

52.81%

PAT CAGR

(FY 2021-22 to FY 2025-26)

Key Financial Ratios

Ratios	2025-26	2024-25	Variance	Rationale (for Variance >25%)
Debtors Turnover (X)	6.18	6.88	(10.26)%	NA
Inventory Turnover (X)	30.34	27.54	10.14%	NA
Interest Coverage Ratio (X)	12.23	13.39	(8.64)%	NA
Current Ratio (X)	2.56	3.07	(16.82)%	NA
Debt Equity Ratio (X)	0.34	0.24	41.67%	The variation is on account of better utilisation of borrowings for business operations during the reporting year.
Operating Profit Margin (%)	25.70	26.05	(1.37)%	NA
Net Profit Margin (%)	16.44	16.62	(1.04)%	NA
Return on Net Worth (%)	16.92	27.54	(38.56)%	The variance is mainly driven by an increase in unbilled revenue, advance tax, mutual fund investments, property, Plant and Equipment (PPE), and goodwill arising from the acquisition of a company during 2025-26.
Return on Capital Employed (%)	17.21	22.62	(23.91)%	NA
Basic Earnings per Share (EPS) (INR)	10.42	11.76	(11.39)%	NA

Risk Management

The Company adopts a proactive, multi-layered approach to risk management to safeguard stakeholder value and ensure operational continuity:

Cybersecurity and

Fraud Mitigation

Cyberattacks and financial fraud pose significant risks to operational continuity, sensitive corporate data, and financial assets. Recognising these vulnerabilities and the heightened industry threat landscape, the Company places the highest priority on its digital security infrastructure. During FY 2025-26, it comprehensively overhauled its Standard Operating Procedures (SOPs) and implemented rigorous multi-tiered digital firewalls.

Supply Chain and Raw

Material Volatility

As an infrastructure developer, the Company remains exposed to price fluctuations in key commodities, including steel and cement, as well as specialised components such as RO membranes and BESS battery cells. To mitigate these risks, the Company incorporates price escalation clauses in long-term contracts wherever feasible and maintains strategic tie-ups with tier-1 global and domestic suppliers to ensure uninterrupted material availability.

Regulatory and

Compliance Risk

The water and renewable sectors remain highly regulated, with stringent discharge norms enforced by the National Green Tribunal (NGT) and Central Pollution Control Board (CPCB). The Company leverages its strong in-house design and engineering capabilities to build STPs and CETPs that not only meet but exceed current regulatory standards, thereby future-proofing assets against evolving environmental laws.

Grid Integration and

Technology

Obsolescence

The rapid evolution of Battery Energy Storage Systems (BESS) and renewable hybrid technologies presents the risk of technological obsolescence. In addition, delays in state transmission infrastructure may hinder project commissioning. To address this, the Company follows a technology-agnostic approach and partners with multiple leading global OEMs to deploy the most efficient storage systems. It also conducts rigorous pre-bid site assessments to ensure robust power evacuation infrastructure is in place before committing to renewable EPC or IPP projects.

Working Capital

Management Risk

As an EPC-driven business, the Company requires significant upfront investments towards procurement, project mobilisation, subcontracting, and workforce deployment, while collections remain linked to milestone-based billing and certification processes. Delays in customer payments, release of retention money, or extended approval cycles may lengthen the working capital cycle and increase funding requirements. Moreover, execution of large-scale projects and business expansion may raise working capital intensity, potentially affecting liquidity and cash flow management if not monitored effectively.

Credit Risk

Credit risk primarily arises from receivables, especially in EPC and O&M contracts executed for public sector clients. However, a substantial portion of the Companys client base includes reputed government bodies, urban development authorities, and state-led infrastructure agencies. These contracts are typically backed by budgetary allocations or multilateral funding (e.g.,

World Bank, ADB), significantly lowering the risk of default. Enviro Infra conducts pre-bid due diligence on project funding status, authority credibility, and payment terms to ensure risk minimisation. Additionally, project receivables are monitored rigorously, and conservative provisioning is made based on expected credit loss models.

Liquidity Risk

Liquidity risk pertains to the Companys ability to meet its short-term financial obligations. Given the capital-intensive nature of EPC projects, maintaining liquidity is critical to ensure timely project execution and vendor payments. The Company manages liquidity through a disciplined approach to working capital management, continuous cash flow forecasting, and availability of committed banking lines. Investments in fixed deposits and low-risk liquid funds further enhance financial flexibility.

Interest Rate Risk

While the Company does not have significant exposure to market-linked financial instruments, its working capital borrowings are primarily benchmarked to RBI-regulated reference rates such as REPO or Treasury Bills. Consequently, any upward revision in interest rates may impact borrowing costs. To mitigate this, interest rate scenarios are factored into project costing and financial projections at the bidding stage, ensuring adequate coverage of financing risk within the project margins.

Human Resources

For EIEL, workforce remains its most valuable asset. The Company believes true corporate growth is closely linked to the welfare and development of its people and the communities it serves. It focuses on creating a supportive work environment for on-site teams and labour across project sites through adequate facilities, support systems, and initiatives that promote workforce well-being. To attract, retain, and reward talent, the Company fosters a strong culture of ownership and long-term commitment, while continuing to invest in training and capability-building programmes aligned with its long-term strategic vision. The total number of employees as on 31 st March, 2026 is 1,844.

Automation and Technology Integration

As the infrastructure industry rapidly modernises, the Company does not view automation or AI as threats to employment. Instead, it continues to integrate automation and instrumentation across operations to improve efficiency and reliability. Technology-enabled systems reduce dependence on manual intervention, helping minimise process deviations and operational errors. Integrated monitoring and control mechanisms further enhance precision, consistency, and seamless execution across project lifecycles.

Corporate Social Responsibility

Beyond its workforce, the Company remains committed to creating broader social impact through Enviro Vatsalya Foundation (EVF), its CSR arm. EVF focuses on education, hunger alleviation, environmental sustainability, animal welfare, and medical assistance. Through the foundation, the Company supports meaningful initiatives and institutions addressing some of Indias key developmental challenges, reinforcing its commitment to inclusive and sustainable growth.

Internal Control System and its Adequacy

Enviro Infra Engineers maintains a robust internal control and monitoring framework designed to support its operational requirements. The framework ensures assets are safeguarded, transactions are properly authorised and recorded, and regulatory compliance are maintained. Financial governance is strengthened through disciplined budget oversight and well-defined standard operating procedures. Internal auditors also play a key role in assessing compliance and control effectiveness, enabling management to take timely corrective actions and drive continuous improvement.

Following a cybersecurity incident, the Company conducted a comprehensive review of its financial approval workflows and implemented enhanced multi-tiered digital security protocols. These measures were introduced to mitigate such vulnerabilities and prevent recurrence.

Disclosure of Accounting Treatment

The financial statements of your Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016 read with Section 133 of the Companies Act, 2013.

Cautionary Statement

This section contains statements relating to the Companys objectives, expectations, projections, and assumptions, which may be construed as forward-looking statements under applicable securities laws and regulations. These statements are based on anticipated future developments and certain underlying assumptions; however, actual outcomes may vary materially from those expressed or implied due to factors beyond the Companys control. Enviro Infra Engineers does not undertake any obligation to publicly update or revise such statements in light of subsequent events or developments. Stakeholders are advised to exercise discretion and consider the inherent risks and uncertainties while interpreting these forward-looking statements.