Goel Construction Company Ltd Management Discussions

GLOBAL ECONOMY

The global economy displayed remarkable resilience during FY26 despite persistent geopolitical tensions, trade policy uncertainties and elevated interest rates across major economies. According to the International Monetary Fund (IMF), global GDP is projected to grow by 3.1% in 2026, supported by easing inflation, resilient labour markets and gradual improvement in financial conditions. Emerging markets continue to outperform advanced economies, with growth of approximately 3.9% compared with 1.8% for advanced economies, underlining the shift in global economic momentum towards developing nations. Across Asia, economic growth remained comparatively stronger, driven by resilient domestic consumption, infrastructure spending and continued manufacturing competitiveness, although Chinas economy continued to balance structural adjustments with policy-led support measures.

Global investment trends increasingly favour long-term infrastructure creation, manufacturing diversification and energy transition. Governments and private enterprises alike are investing in transportation networks, industrial facilities, renewable energy assets, logistics infrastructure and digital ecosystems to enhance economic resilience and productivity. These investments are generating sustained demand for engineering, procurement and construction (EPC) services across both developed and emerging markets.

Although commodity prices remained volatile due to geopolitical developments, supply chain disruptions have moderated considerably compared to previous years. Lower inflationary pressures have enabled several central banks to adopt a more accommodative monetary stance, improving business confidence and supporting capital investment. However, geopolitical conflicts, evolving trade policies and financial market volatility continue to present downside risks that require prudent project planning and disciplined execution.

INDIA ECONOMY

India continued to reinforce its position as the worlds fastest- growing major economy during FY26, with real GDP estimated to have grown by 7.7%, compared to 7.1% in FY25, according to the Ministry of Statistics and Programme Implementation (MoSPI). The growth was underpinned by resilient domestic demand, sustained public investment and expanding industrial activity.

Infrastructure-led development remained central to the Governments growth strategy. The Union Budget FY27 allocated a record R12.2 lakh crore towards capital expenditure, reaffirming the Governments commitment to strengthening transportation, logistics and industrial infrastructure. Complementing this, initiatives such as Make in India, the Production Linked Incentive (PLI) Scheme, the National Infrastructure Pipeline (NIP) and industrial corridor development continued to accelerate investments across manufacturing and core industries.

Indias industrial sector also maintained steady momentum during the year, with the Index of Industrial Production (IIP) recording cumulative growth of approximately 4.1%, driven by manufacturing and capital goods. Supported by robust infrastructure spending and increasing private capital expenditure, the countrys manufacturing ecosystem continues to create significant opportunities for engineering, industrial construction and EPC companies.

INDUSTRY OVERVIEW India Construction Industry

Indias construction industry remains one of the largest contributors to the nations economic development, acting as a catalyst for infrastructure creation, industrial expansion and urban transformation. As the second-largest employer after agriculture, the sector supports millions of livelihoods while contributing nearly 9% to Indias Gross Value Added (GVA). Continued investments across transport, manufacturing, commercial real estate and public infrastructure have strengthened the industrys role in supporting long-term economic growth.

The sector continues to benefit from the Governments infrastructure-led development strategy. Increased public capital expenditure, together with greater private sector participation, has accelerated project execution across roads, railways, industrial facilities, logistics parks, airports and urban infrastructure. This investment momentum is expected to sustain demand for engineering and construction services over the coming years.

Industry Snapshot

Particulars	FY26
Contribution to Indias GVA	Approx - 9%
Employment Generated	70+ million
Expected Industry Growth	Approx - 8.1%
Union Budget Capital Expenditure	R 11.2 lakh crore in FY26, followed by an increase to R12.2 lakh crore in FY27,
Key Government Initiatives	PM Gati Shakti, NIP, National Logistics Policy, Smart Cities Mission

Outlook

Indias construction sector is expected to maintain strong growth, supported by sustained infrastructure investments, rapid urbanisation and increasing industrial development. The sector is well positioned to benefit from the Governments long-term commitment towards asset creation and private sector capital expenditure.

Industrial Construction Sector

Indias industrial construction sector has emerged as one of the fastest-growing segments within the countrys construction ecosystem, driven by rising investments in manufacturing, industrial infrastructure and capacity expansion across core industries. As India strengthens its position as a global manufacturing hub, increasing capital expenditure across sectors such as cement, steel, power, chemicals, food processing, warehousing and logistics is creating sustained demand for specialised engineering and construction services.

The sector continues to benefit from a combination of public policy support and private sector investments. Capacity additions by large industrial players, development of industrial corridors and logistics parks, and expansion of manufacturing facilities are generating a strong pipeline of greenfield and brownfield projects. At the same time, growing adoption of mechanised construction, digital project management and advanced engineering practices is enhancing project execution and operational efficiency across the sector.

Particulars	FY26
Manufacturing contribution target to GDP	25%
Industrial Corridor Projects	12 Industrial Corridors under development
PLI Scheme Coverage	14 strategic sectors
Key Growth Segments	Cement, Power, Steel, Chemicals, Food Processing, Warehousing & Logistics
Key Government Initiatives	Make in India, PLI Scheme, PM Gati Shakti, National Industrial Corridor Development Programme (NICDP), National Logistics Policy

Outlook

Indias industrial construction sector is expected to maintain strong growth over the medium to long term, supported by increasing domestic manufacturing, supply chain diversification, industrial corridor development and sustained private capital expenditure. As industries continue to invest in expanding production capacities and modernising manufacturing infrastructure, demand for specialised EPC and industrial construction companies is expected to remain robust. Companies with proven execution capabilities, technical expertise and long- standing customer relationships are well positioned to benefit from this evolving industrial landscape.

Renewable Power Sector

Indias renewable energy sector is entering a phase of accelerated expansion, driven by ambitious decarbonisation targets, supportive policy interventions and rising investments from both the public and private sectors. Large-scale deployment of solar and wind capacity, coupled with the strengthening of transmission infrastructure and energy storage systems, is creating sustained opportunities for specialised civil and industrial construction companies.

Industry Snapshot

Particulars	FY26
Installed Renewable Energy Capacity	250 GW (including large hydro)
Renewable Energy Target	500 GW non-fossil capacity by 2030
Global Rank	3rd Largest Renewable Energy Producer
Key Growth Drivers	Utility-scale solar, wind, hybrid parks, battery storage and green hydrogen
Key Government Initiatives	PM Surya Ghar, National Green Hydrogen Mission, Green Energy Corridor, ISTS Waiver, Renewable Purchase Obliga- tions (RPOs)

Outlook

Indias clean energy transition is expected to drive significant investments in utility-scale renewable power projects, transmission networks and associated infrastructure. The development of solar parks, wind farms, substations, battery energy storage systems and green hydrogen facilities is expected to create long-term demand for civil construction, structural works and balance-of-plant infrastructure, providing a strong pipeline of opportunities for engineering and infrastructure companies.

Cement Sector

India remains the worlds second-largest cement producer, supported by sustained investments in housing, commercial real estate, industrial infrastructure and public capital expenditure. Capacity additions, government-led infrastructure development and rising urbanisation continue to underpin long-term demand, creating a favourable environment for cement plant construction and expansion.

Industry Snapshot

Particulars	FY26
Installed Cement Capacity	690 MTPA
FY26 Cement Production	485 MT
Global Rank	2nd Largest Cement Producer
Demand Outlook	6-7% growth expected over the medium term
Key Government Initiatives	PM Gati Shakti, Bharatmala, Smart Cities, PMAY, National Infrastructure Pipeline

Outlook

Indias cement industry is expected to remain on a structural growth path, supported by sustained public infrastructure spending, housing demand and private sector investments. Continued capacity expansion and modernisation of cement manufacturing facilities are expected to generate significant opportunities for specialised civil construction contractors.

Steel Sector

Indias steel industry continues to benefit from robust infrastructure development, industrial expansion and manufacturing-led growth. Rising domestic steel demand, supported by large investments in transport, energy and urban infrastructure, is driving capacity expansion and modernisation across integrated steel plants and downstream facilities.

Industry Snapshot

Particulars	FY26
Crude Steel Production	165 MT
Global Rank	2nd Largest Crude Steel Pro- ducer
National Steel Policy Target	300 MT capacity by 2030-31
Key Demand Drivers	Infrastructure, Construction, Automotive, Capital Goods & Railways
Key Government Initiatives	National Steel Policy 2017, PM Gati Shakti, National Infrastruc- ture Pipeline, Make in India

Outlook

Indias steel sector is expected to witness sustained capacity additions as producers expand to meet growing domestic demand and reduce import dependence. Investments in greenfield and brownfield steel plants, beneficiation facilities, pellet plants and allied infrastructure are expected to create long-term opportunities for engineering and civil construction companies.Continued capacity expansion and modernisation of cement manufacturing facilities are expected to generate significant opportunities for specialised civil construction contractors.

Dairy Sector

Indias dairy industry continues to strengthen its position as the worlds largest milk producer, supported by increasing organised processing, rising consumption of value-added dairy products and favourable government policies. Investments in modern milk processing facilities, cattle feed plants and integrated dairy infrastructure continue to create opportunities for specialised industrial construction companies.

The sectors ongoing modernisation and expansion are expected to sustain capital investments across processing infrastructure over the coming years.

Industry Snapshot

Particulars	FY26
Global Position	Largest Milk Producer
Share of Global Milk Pro- duction	25%
Annual Milk Production	250+ Million Tonnes
Expected Industry CAGR	R-9%
Key Government Initiatives	NPDD, AHIDF, Rashtriya Gokul Mission

Outlook

Growing organised processing, rising domestic consumption and continued investments in dairy infrastructure are expected to support long-term growth across the sector.

BUSINESS OVERVIEW

Goel Construction Company Limited is a specialised construction company focused on executing industrial projects across India. Over nearly three decades, the Company has evolved from undertaking small-scale institutional and infrastructure projects into a trusted partner for delivering complex, large-scale industrial facilities for some of Indias leading corporate groups.

The Company primarily undertakes construction projects for cement plants, power plants, dairy and cattle feed facilities, steel plants, and other industrial infrastructure. Its expertise spans both greenfield and brownfield developments, supported by strong engineering capabilities, disciplined execution, and an unwavering focus on quality, safety, and timely project delivery.

Over the years, the Company has expanded its presence across multiple states and developed long-standing relationships with marquee industrial clients. A healthy order book, coupled with a strong proportion of repeat business, provides revenue visibility and positions the Company to capitalise on opportunities arising from Indias growing industrial and infrastructure investment cycle.

Business Segment:

Our constructions works can be majorly classified in the following customer segments:

• Cement Plant: Our services include civil construction of

Clinekerization and Grinding unit, which includes pre-heaters, cement mill, packing plant, silos, and other allied structures for both greenfield and brownfield projects

• Power Plant: We undertake civil structural and architectural works of Balance of Plant (BOP) including Coal handling plant, water treatment system, ash handling plant, silos, chimney, cooling tower & water systems and other related works.

• Dairy Plant: We undertake the construction of dairy and allied product facilities, including Cattle Feed Plants (CFP), with end-to-end procurement and construction services, ensuring compliance with food-grade standards.

• Other industrial plants: It includes civil construction services offered to steel and other industrial projects.

FINANCIAL PERFORMANCE SUMMARY

Particulars	FY26	FY25	Variance
Revenue (? Crores)	657.30	589.98	11.41%
EBITDA* (? Crores)	66.69	57.91	15.18%
EBITDA Margin (%)	10.15%	9.81%	34bps
PAT (? Crores)	46.26	38.32	20.71%
PAT Margin (%)	7.04%	6.50%	54bps
Order Book(x)	1291.23	438.49	2.94x

*EBITDA is adjusted for LC discounting charges

The Company delivered profitable growth in FY26, with Revenue increasing 11.4% to ?657 crore, supported by healthy execution across ongoing industrial construction projects. During the year, GCC secured order inflows exceeding ?1,500 crore, resulting in a nearly three-fold increase in the closing order book to ?1,291 crore. This significantly enhanced revenue visibility and provides a strong execution pipeline for the coming years.

Operating profitability improved ahead of revenue growth, with EBITDA rising 15.2% to ?66.7 crore, while the EBITDA margin expanded by 33 basis points to 10.15%. The improvement was driven by better operating leverage as higher project execution enabled more efficient absorption of fixed overheads, supported by disciplined project management and improved execution efficiencies.

Profit After Tax increased 20.7% to ?46.3 crore, with the PAT margin expanding to 7.04%. The stronger bottom-line performance reflects the combined benefit of higher operating profitability and lower finance costs following the repayment of borrowings through IPO proceeds, resulting in a healthier capital structure.

KEY FINANCIAL RATIOS

Particulars	As at 31 March 2026	As at 31 March 2025	Variance	Reason for Variance in case > 25%
Current Ratio (Times)	1.51	1.16	31%	The increase is primarily attributable to higher current assets, driven by increase in cash and bank balances, trade receiv- ables and inventories, consequent to IPO proceeds and business expansion, while current liabilities increased at a lower rate
Debt Equity Ratio (Times)	0.03	0.22	-86%	The significant decrease is on account of repayment/prepayment of borrowings us- ing IPO proceeds, coupled with an increase in shareholders equity due to fresh issue of share capital.
Debt Service Cov- erage Ratio (Times)	25.80	3.65	606%	The ratio improved substantially due to a sharp reduction in debt servicing obli- gations (interest and principal) following repayment of loans, along with stable operating earnings.
Return on Equity Ratio (%)	23.99%	34.09%	-30%	The decrease is mainly attributable to a significant increase in average shareholders equity post IPO
Inventory Turnover Ratio (Times)	27.11	38.42	-29%	The decline is due to higher average inventory levels during the year, primarily on account of accumulation of inventory for newly awarded projects, leading to slower inventory rotation.
Trade Receivables Turnover Ratio (Times)	13.41	22.96	-42%	The decrease is primarily due to a signifi- cant increase in trade receivables (?7,034.00 lakhs vs ?2,776.79 lakhs), indicating higher outstanding balances during the year.
Trade Payables Turnover Ratio (Times)	14.33	17.23	-17%
Net Capital Turn- over Ratio (Times)	11.09	23.50	-53%	The decrease is primarily due to a substan- tial increase in working capital, driven by higher current assets including receivables, inventories and other current assets, which has not been proportionately matched by revenue growth.
Net Profit Ratio (%)	7.04%	6.50%	8%	-
Return on Capital employed (%)	27.40%	33.69%	-19%	-

RISK MANAGEMENT

Operating in the engineering and construction industry exposes the Company to a range of strategic, operational and financial risks. Our Company follows a structured risk management framework that enables timely identification, assessment and mitigation of key risks, while strengthening business resilience and supporting sustainable growth.

Risk	Risk Description	Mitigation Strategy
Project Execution Risk	Delays arising from design changes, site conditions, labour shortages, material availability or customer approvals may impact project schedules, costs and profitability.	Robust project planning, experienced project management teams, periodic project reviews, digital monitoring tools and proactive stakeholder coordination help ensure timely execution and cost control.
Customer Concentration Risk	A significant portion of revenue is generated from a limited number of customers and industries. Any slowdown in customer capex or loss of key clients could affect business performance.	Focus on expanding the customer base across cement, power, dairy, steel and industrial sectors while strengthening long-term relationships that drive repeat business.
Order Inflow Risk	Growth depends on the Companys ability to continuously secure new orders in a competitive bidding environment. Reduced order inflows may impact future revenue visibility.	Diversified bidding strategy, participation across multiple industrial sectors, strong pre-qualification credentials and leveraging long-standing customer relationships support a healthy project pipeline.
Raw Material & Cost Escalation Risk	Fluctuations in the prices of steel, cement, fuel and other construction inputs may impact project costs and margins, particularly for fixed-price contracts.	Contractual price escalation clauses wherever feasible, strategic procurement planning, vendor diversification and continuous cost optimisation initiatives help manage cost volatility.
Working Capital Risk	EPC projects require significant working capital, while delays in customer certifications or collections can affect cash flows and liquidity.	Close monitoring of receivables, disciplined billing and collection processes, prudent treasury management and access to diversified banking facilities support working capital requirements.
Labour & Resource Availability Risk	The construction industry remains labour-intensive. Shortages of skilled manpower or disruptions in labour availability may affect project execution.	Long-standing relationships with labour contractors, advance manpower planning, continuous workforce engagement and emphasis on health and safety practices ensure operational continuity.
Equipment & Operational Risk	Breakdowns or inadequate availability of construction equipment may delay project execution and reduce productivity.	The Company maintains a sizeable fleet of owned construction equipment supported by preventive maintenance programmes and efficient deployment planning to maximise equipment utilisation.
Health, Safety & Environmental (HSE) Risk	Construction activities involve inherent health, safety and environmental risks that may lead to accidents, project disruptions or regulatory liabilities.	Comprehensive HSE policies, regular safety audits, employee training, use of appropriate safety equipment and strict compliance with statutory standards help maintain safe project environments.

HUMAN RESOURCES

Our people are the foundation of our execution capabilities and long-term success. We remain committed to building a skilled, safety-conscious, and performance-driven workforce capable of delivering complex industrial projects with excellence.

The Company continues to invest in technical training, leadership development, and workplace safety while fostering a culture of collaboration, accountability, and continuous improvement. Strong industrial relations, employee engagement initiatives, and a safe working environment remain integral to our operational philosophy.

As on 31 March 2026, the Company had 1,436 permanent employees.

INTERNAL CONTROLS AND GOVERNANCE

The Company has established a robust internal control and governance framework designed to safeguard assets, ensure the reliability of financial reporting, improve operational efficiency, and ensure compliance with applicable laws and regulations.

Internal controls are supported by well-defined policies, standard operating procedures, and a risk-based internal audit mechanism. The Audit Committee periodically reviews internal audit findings, risk management practices, and the effectiveness of internal financial controls, while the management continuously strengthens processes to align with evolving business requirements.

The Company believes that its internal control systems are commensurate with the size and complexity of its operations and provide reasonable assurance regarding the efficiency of operations, safeguarding of assets, compliance, and financial reporting.

CAUTIONARY STATEMENT

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be forward-looking statements within the meaning of applicable securities laws & regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand, supply, and price conditions in the domestic & overseas markets in which the Company operates, changes in Government regulations, tax laws & other statutes, and other incidental factors. The Company assumes no responsibility in respect of forward-looking statements, which may be amended or modified in the future.