Falcon Technoprojects India Ltd Management Discussions

• Industry Structure and Developments

I. Global Economy

Global economic activity in FY2024-25 exhibited moderate recovery, with growth estimated at 3.2%, bolstered by resilience in the United States and fiscal support across key emerging markets. However, persistent tight monetary policy, subdued productivity, and reduced fiscal space constrained expansion relative to historical norms.

Global headline inflation softened to 5.8% in 2024 and is projected to decline further to 4.4% in 2025, largely due to easing supply-side disruptions and restrictive monetary measures. Despite improvements, global investment appetite remained cautious amid interest rate volatility and geopolitical uncertainties.

II. Industry Overview

The Mechanical, Electrical, and Plumbing (MEP) industry in India saw accelerated growth during FY2024-25, fuelled by:

• Over 37% increase in government capital expenditure

• Strategic programs including Smart Cities Mission, Housing for All, and expanding renewable energy infrastructure.

• Growing demand for integrated, energy-efficient solutions in real estate, industrial complexes, and public infrastructure

Digital transformation and ESG-aligned construction practices gained further traction, positioning MEP service providers as enablers of sustainable urbanization.

III. Company Overview

In 2010, Mr. Bharat Shreekishan Parihar established MEP consulting and contracting business as a Partnership firm. The business operations gradually scaled up and with a vision to cater all project solutions under one roof, he founded and incorporated "Falcon Technoprojects India Private Limited" in 2014.

Later in the year 2023, pursuant to a Special Resolution of our Shareholders passed in the Extra Ordinary General Meeting held on May 29, 2023, the Company was converted from a Private Limited Company to Public Limited Company and consequently, the name of our Company was changed to Falcon Technoprojects India Limited and a Fresh Certificate of Incorporation consequent to Conversion was issued on June 30, 2023 by the Registrar of Companies, Mumbai, Maharashtra.

We are an ISO 9001:2015 certified company engaged in the business of providing Mechanical, Electrical and Plumbing ("MEP") services to our PAN India customers which are operating in various sectors including Petroleum Refineries, Residential Townships, Atomic Energy, Civil Construction, etc.

Mechanical, Electrical, and Plumbing ("MEP") services refer to installation services that provide comfortable spaces for building occupants. These services specifically deal with the design, selection, and installation of integrated Mechanical, Electrical, and Plumbing systems. It includes installing air-conditioning systems, power and lighting systems, water supply and drainage, fire prevention and fighting systems, and telephones. By integrating these separate systems into

one, the operation can be made more energy effective. The design of MEPs is important for planning, decision-making, accurate documentation, performance and cost estimation, construction, and ultimately the facilitys operation and maintenance. MEP services specifically cover the in-depth design and selection of these systems, rather than simply installing the equipment.

Our company is promoted by Mr. Bharat Shreekishan Parihar and Mrs. Sheetal Bharat Parihar. Our promoter, Mr. Bharat Shreekishan Parihar, has completed graduation in the field of Electrical Engineering and has an experience of more than 16 years in the MEP sector having worked across many industries including projects in Petroleum Refinery Industry, Real Estate, Renewable Energy with respect to Mechanical, Electrical and Plumbing for domestic market. Since the inception of the Company, he has played a key role in formulating policies & procedures and devising organizational development plans. His role has also been important in procurement and negotiation of raw material from suppliers for execution of projects. His analytical skills and material price projection strategy developed through understanding the industry outlook benefits our Company. His leadership skills, market expertise and experience over the years have been instrumental in the growth of our business. His vision has helped the Company to identify opportunities well in time. Mrs. Sheetal Bharat Parihar is a Commerce Graduate. Since 2014, she has been overlooking the recruitment process, employee retention and administration of our Company. She has been instrumental in mentoring and guiding the Company for the overall business development. She overviews the tendering process of our Company which includes bidding for acquisition of projects. She also guides the team for other marketing activities for our Company.

Our Services

• Mechanical Services: Mechanical systems are those systems associated majorly with Firefighting and HVAC services. Under firefighting services, our Company provides a wide range of solutions like fire hydrant and wet riser system, Sprinkler System, water spray system, gas-based suppression system like CO2 system, etc. in the area of life & property safety in accordance with standards/regulations viz. NBC, TAC & NFPA. To provide such services our designing team uses the latest drawing tools & software including AutoCAD and Pipe net to enhance design accuracy. Under HVAC services we provide solutions relating to heating, ventilation, air conditioning systems and also comprise elevators, escalators etc. on basis of client requirements. Our HVAC services include design, supply, installation, service and maintenance of air conditioning and ventilation solutions for all types of commercial, industrial and domestic environments. We work closely with architects, consulting engineers, contractors and end users to supply efficient and cost-effective air conditioning solutions available. We further provide assistance and services relating to central plant designing, exhaust systems, direct digital control systems, heating water systems, and chilled water systems. We also prepare initial blueprints, lay outs and drawing for clients which helps them in customized plant designing.

• Electrical Services: Our Company undertakes turn-key electrical projects and is principally engaged in executing and providing electrical engineering service for power, process, industrial and commercial projects both High Tension (HT) as well as Low Tension (LT) for the public and private sector undertakings. Our Company further provides services required for power generation, lighting fixtures, fans and air conditioning systems, connecting electric appliances through audio / remote controls, touch panels, architectural lighting plan design, design and lighting specifications, lighting control design, energy management, integration of IT (information technology) and AV (audio visual) for overall building design.

• Plumbing Services: Our Company provides services of sanitary fixtures & fittings, internal drainage (above ground) system, external drainage (underground) system, rainwater disposal system, water supply system, rainwater harvesting, plant & utilities etc. Our plumbing team provides solutions in saving water and energy conforming to Leadership in Energy and Environmental Design (LEED) and Indian Green Building Council (IGBC) norms. Some of

our marquee clients include Mumbai International Airport, L&T, BPCL, HPCL, Lodha Developers, Reliance Industries Limited and Shapoorji Pallonji Group.

• Opportunities, Threats, Risks and Concern

A. New Opportunities

The Mechanical, Electrical and Plumbing (MEP) sector continues to evolve rapidly, presenting several avenues for growth and diversification for the Company:

• Specialized Skill Advantage

Given the complexity and high-risk implications associated with inefficient MEP systems, developers increasingly prefer to outsource these services to specialist providers. This transition supports the Companys positioning as a turnkey MEP integrator with domain expertise, driving long-term collaborative partnerships over transactional engagements.

• Market Expansion in Commercial and Mixed-Use Infrastructure

The ongoing development of office complexes, malls, multiplexes, and real estate townships has catalyzed demand for comprehensive MEP services. Complex projects and evolving building codes have made MEP involvement integral to compliance, safety, and sustainability outcomes.

• Policy-Driven Opportunities in Green Buildings

Regulatory momentum around energy-efficient construction—reflected in standards like ECBC, Eco Niwas Samhita, and IGBC/LEED rating systems—is generating demand for advanced HVAC, fire safety, and automation systems. Developers targeting green certification increasingly rely on integrated MEP design to meet these benchmarks.

• Integration of Renewable Energy in Building Systems

The shift towards hybrid energy ecosystems, combining conventional and renewable sources, is driving demand for MEP engineers proficient in solar, biogas, and wind-based systems. Government subsidies for rooftop solar and increasing emphasis on energy storage technologies open new service verticals for MEP companies.

• Emergence of T echnologically Advanced Facilities

The adoption of smart buildings powered by IoT devices, sensors, and real-time analytics is transforming design architecture. MEP firms are now central to implementing intelligent systems for lighting, HVAC, and fire safety— enhancing energy efficiency, occupant comfort, and operational control.

B. Threats

While opportunities abound, several challenges continue to shape the operating landscape for MEP service providers:

• Skills Deficit and T echnology Readiness

The increasing adoption of smart infrastructure demands specialized competencies in automation, BIM, and integrated systems. Lack of skilled labour in design, installation, and maintenance functions can lead to systemic failures and reputational risk.

• Fragmented Industry Practices

The Indian MEP segment continues to operate on a fragmented delivery model, with limited integration across consulting, execution, and lifecycle services. This piecemeal approach may not fully align with the growing complexity of infrastructure projects.

• High Dependency on Coordinated Stakeholder Execution

Complex project environments necessitate real-time coordination across developers, contractors, vendors, and system specialists. Gaps in project alignment or miscommunication can lead to delays, cost overruns, and noncompliance.

• Regulatory and Coding Overheads

Evolving building codes and environmental standards require continuous updates to technical specifications. Failure to anticipate or incorporate these changes could result in compliance breaches or suboptimal project outcomes.

• Cost Pressure and Margin Compression

Rising competition, fluctuating raw material prices, and client-side cost optimizations continue to exert pressure on service margins, requiring robust cost control mechanisms and operational agility.

• Segment wise/Product wise Performance:

FY 2024-25 Product-Wise Highlights:

Product Segment	Performance Highlights
Solar Water Pumping Systems	Over 40,000 units executed cumulatively; remains a flagship product line.
EPC & Rooftop Solar Projects	Benefited from increased institutional orders and government initiatives.
AMC & Consultancy Services	Showed steady growth, reflecting rising demand for post-installation support.

• Outlook

Falcon Technoprojects India Limited enters F.Y. 2025-26 with strong momentum, driven by its commitment to innovation and sustainability in the renewable energy sector. With a 14-year manufacturing track record and a robust 48% revenue CAGR from FY21 to FY24, the company is well-positioned to capitalize on Indias accelerating clean energy transition.

The Mechanical, Electrical and Plumbing (MEP) sector continues to evolve rapidly, presenting several avenues for growth and diversification for the Company to focus on scaling its solar water pump installations- already exceeding 40,000 units- and enhancing its PV module production capabilities.

Looking ahead, the company aims to deepen its presence in domestic and international markets, invest in next- generation solar technologies, and strengthen its position as a trusted partner in Indias renewable energy mission.

• Internal Control System and their adequacy:

Falcon Technoprojects India Limited has established a robust internal control framework designed to ensure the integrity of financial reporting, safeguard assets, and promote operational efficiency. The system is aligned with the requirements of the Companies Act, 2013 and is periodically reviewed by the Audit Committee and senior management.

The internal controls encompass all major business processes, including procurement, production, inventory management, project execution, and financial reporting. These controls are supported by clearly defined policies, standard operating procedures, and an ERP-based monitoring system that enhances transparency and accountability.

The Board believes that the current internal control system is commensurate with the size and nature of the companys operations and provides reasonable assurance regarding the reliability of financial and operational information.

• Financial Performance

The following table sets forth our financial summary:

(Rs. in Lakhs)

Particulars	FY 2024-25	FY 2023-24	FY 2022-23
Share Capital	535.68	386.88	50.00
Net Worth	2269.48	900.72	336.66
Revenue	2,647.27	1,144.32	1,653.50
Profit After Tax	116.62	86.77	89.73
Basic and Diluted Earnings per Equity Share (Considering bonus in all previous years) (in ^)	2.18	2.92	2.68
Net Asset Value/Book Value per Equity share (Considering bonus in all previous years) (in ^)	42.37	23.28	10.05
Total Borrowings	404.73	769.73	1230.05

• Human Resources/Industrial Relations:

Human capital is viewed as a valuable resource and an integral part of the Companys success, and your Company strongly believes that its employees are the key pillar of your companys success.

The Company recognizes that its employees are its principal assets and that its continued growth is dependent upon its ability to attract and retain quality people. The Company also recognizes the importance of providing training and development opportunities to its people to enhance their skills and experiences, which in turn enables the company to achieve its business objectives.

The Company believes in establishing and building a strong performance and competency driven culture amongst its employees with a greater sense of accountability and responsibility. The industrial relations within the Company have remained harmonious throughout the year.

• Key Financial Indicators

Sr No.	Ratios	Numerator	Denominator	As at 31st March, 2025	As at 31st March, 2024	% change in Ratio
1	Current ratio	Current Assets	Current Liabilities	2.25	2.19	2.73%
2	Debt-Equity Ratio	Total Debt	Shareholders Equity	0.18	0.85	79%
3	Debt service coverage ratio	Net Operating Income	Non-current liabilities	0.59	0.51	-16%
4	Return on Equity Ratio (in %)	Net Profit After Tax	Average Shareholders Equity	7%	14.02%	48%
5	Inventory turnover ratio	Cost of goods sold	Average Inventory	0.79	0.61	-28%
6	Trade Receivables turnover ratio	Net Credit Sales	Average Trade Receivables	1.16	2.63	56%
7	Trade payables turnover ratio	Net Credit Purchases	Average Trade Payables	2.04	2.63	22%
8	Net Capital Turnover Ratio	Net Sales	Net working Capital	1.29	1.13	-14%
9	Net Profit Ratio (in %)	Net Profit After Taxes	Net Sales	4.41%	7.58%	42%
10	Return on Capital Employed (in %)	Net operating Income	Average capital Employed	6.77%	16.41%	59%
11	Return on investment	Return	Investment value	24.13%	34.98%	31%

Cautionary Statement

Statements made herein, in the Management Discussion & Analysis Report describing the Companys projections, estimates, expectations, plans or predictions or industry conditions or events are "forward looking statement." The actual results may differ from those expected or predicted, since the Companys operations are influenced by many external factors which are beyond the control of your Company.