Greenleaf Envirotech Ltd Management Discussions

OVERVIEW OF GLOBAL ECONOMY

The global economy remained resilient during FY 2025-26 despite geopolitical tensions, trade uncertainties and inflationary pressures. As per the International Monetary Fund (IMF) World Economic Outlook, April 2026, global economic growth is projected at 2.8% in 2025 and 3.0% in 2026, supported by easing inflation, improving financial conditions and steady growth across emerging market and developing economies. Despite ongoing global challenges, continued investments in sustainable infrastructure, environmental protection and clean technologies are expected to create long-term opportunities for the environmental engineering sector.

- Source: International Monetary Fund (IMF), World Economic Outlook, April 2026.

OVERVIEW OF INDIAN ECONOMY

India continued to maintain its position as one of the fastest-growing major economies during FY 2025-26, demonstrating resilience despite global geopolitical uncertainties, trade disruptions and inflationary pressures. According to the Economic Survey 2025-26, the Indian economy is estimated to have grown by 7.4% in real terms during FY 2025-26, driven primarily by strong domestic consumption and sustained public and private investments. The Survey further projects real GDP growth in the range of 6.8% to 7.2% for FY 2026-27, reflecting the economys strong medium-term growth prospects.

Government initiatives focusing on infrastructure development, urbanisation, manufacturing, water security and sustainability continue to create significant opportunities across various sectors. Increased investments in water supply, wastewater treatment, sanitation, environmental protection and industrial infrastructure, coupled with stricter environmental regulations and growing adoption of ESG practices, are expected to drive long-term demand for environmental engineering and related services. Simultaneously, increasing awareness regarding workplace safety and regulatory compliance is supporting growth in the fire safety sector.

Against this backdrop, Greenleaf Envirotech Limited is well positioned to benefit from these favourable macroeconomic trends through its integrated offerings in environmental engineering, wastewater management, environmental laboratory and consultancy services, fire safety solutions and ESG consulting. The Companys diversified business model, technical expertise and execution capabilities provide a strong platform for sustainable growth and long-term value creation.

- Source: Economic Survey 2025-26

OUTLOOK

The outlook for the Company remains positive, supported by Indias robust economic growth and sustained investments in infrastructure and environmental sustainability. As per the Economic Survey 2025-26, Indias real GDP is estimated to have grown by 7.4% during FY 2025-26 and is projected to grow in the range of 6.8% 7.2% in FY 2026-27, driven by strong domestic demand, public investment and improving private sector participation.

The environmental engineering sector is expected to benefit from continued Government focus on water supply, wastewater management and sanitation infrastructure. Under the Jal Jeevan Mission, the Government provided a budgetary allocation of 67,000 crore for FY 2025-26 to strengthen rural drinking water infrastructure, reflecting its continued commitment towards sustainable water management.

With increasing investments in environmental infrastructure, stricter environmental compliance requirements, growing awareness of fire safety and the rising adoption of ESG practices, the Company is well positioned to capitalize on emerging opportunities. The successful listing of the Companys equity shares on the NSE EMERGE Platform has further strengthened its financial position, enhanced its market visibility and improved its ability to undertake larger and more complex projects. The Company remains focused on expanding its integrated environmental engineering, fire safety and ESG consulting businesses while delivering sustainable long-term value to its stakeholders..

INDUSTRY STRUCTURE AND DEVELOPMENT

Indias environmental engineering industry continues to demonstrate strong growth, supported by rapid urbanization, industrialization, increasing environmental awareness and sustained Government investment in infrastructure. According to the Economic Survey 2025-26, Indias economy grew by 7.4% during FY 2025-26, driven by robust domestic demand and continued public capital expenditure on infrastructure, creating a favourable environment for sectors such as water management, wastewater treatment and environmental services.

The Government of India continues to prioritize the development of water and sanitation infrastructure through flagship programmes such as the Jal Jeevan Mission (JJM), Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and the Swachh Bharat Mission (Urban). As per the Union Budget 2025-26, an allocation of 67,000 crore has been made for the Jal Jeevan Mission to improve rural drinking water infrastructure, while continued investments under urban infrastructure programmes are expected to accelerate the development of sewage treatment plants, water recycling facilities and wastewater management systems.

In addition, increasing enforcement of environmental regulations by the Central and State Pollution Control Boards has compelled industries to invest in advanced pollution control systems, Zero Liquid Discharge (ZLD) technologies, environmental monitoring and wastewater treatment facilities. The growing emphasis on sustainability, circular economy practices and Environmental, Social and Governance (ESG) reporting is further driving demand for integrated environmental engineering and consultancy services.

The fire safety industry is also witnessing steady growth due to increasing urbanization, expansion of industrial and commercial infrastructure and stricter enforcement of the National Building Code and other fire safety regulations. Demand for integrated fire detection, suppression and protection systems continues to rise across manufacturing facilities, commercial buildings, healthcare institutions, educational establishments and residential developments.

With its diversified presence in environmental engineering, wastewater management, environmental laboratory and consultancy services, fire safety solutions and ESG consulting, Greenleaf Envirotech Limited is well positioned to capitalize on these favourable industry trends. The Companys integrated business model, technical expertise and strong execution capabilities provide a solid foundation for sustainable growth and long-term value creation.

-Source: Economic Survey 2025-26, Government of India; Union Budget 2025-26, Ministry of Finance; Ministry of Jal Shakti (Jal Jeevan Mission); Ministry of Housing and Urban Affairs (AMRUT and Swachh Bharat Mission).

Road Ahead

Indias environmental engineering sector is poised for sustained growth, driven by increasing investments in water and wastewater infrastructure, stricter environmental regulations, rapid urbanization and industrial expansion. Government initiatives such as the Jal Jeevan Mission, AMRUT 2.0, Swachh Bharat Mission and the continued focus on sustainable infrastructure are expected to generate significant opportunities for companies engaged in environmental engineering, pollution control and water management.

Greenleaf Envirotech Limited is well positioned to capitalize on these opportunities through its integrated business model encompassing environmental engineering, wastewater treatment, environmental laboratory and consultancy services, fire safety solutions and ESG consulting. The Company will continue to strengthen its technological capabilities, expand its project portfolio, enhance operational efficiency and focus on innovation to deliver sustainable and value-driven solutions. With the successful listing of its equity shares on the NSE EMERGE Platform, the Company is better equipped to accelerate its growth strategy, strengthen its market presence and create long-term value for its stakeholders.

- Source: Economic Survey 2025-26, Government of India; Union Budget 2025-26; Ministry of Jal Shakti; Ministry of Housing and Urban Affairs.

OPPORTUNITIES AND THREATS

Opportunities:

The Company expects continued business opportunities arising from the following factors:

Increasing Government investment in water supply, wastewater treatment, sanitation and environmental infrastructure projects.

Rising demand for Effluent Treatment Plants (ETPs), Sewage Treatment Plants (STPs), Zero Liquid Discharge (ZLD) systems and water recycling solutions.

Growing industrialization and stricter environmental regulations driving demand for environmental engineering, laboratory testing and regulatory compliance services.

Expansion of municipal infrastructure projects under various Central and State Government initiatives.

Increasing adoption of sustainable technologies and ESG (Environmental, Social and Governance) practices by corporates.

Growing demand for NABL-accredited environmental testing, monitoring and consultancy services.

Rising awareness of fire prevention and workplace safety, creating opportunities for fire safety system design, installation and maintenance.

Expansion opportunities through the Companys wholly owned subsidiary for execution of EPC, PPP and Operation & Maintenance (O&M) projects.

Enhanced financial strength, market visibility and credibility following the successful listing of the Companys equity shares on the NSE EMERGE Platform, enabling participation in larger and more complex projects.

Increasing focus on long-term operation and maintenance (O&M) contracts, providing opportunities for recurring revenue and stronger customer relationships.

The successful listing of the Companys equity shares on the SME Platform has enhanced its visibility, credibility and access to capital markets. The proceeds from the Initial Public Offer (IPO) are expected to strengthen the Companys financial position, augment working capital, support business expansion, enhance execution capabilities and improve its ability to bid for larger and more complex projects, thereby creating long-term value for stakeholders.

Threats:

Despite opportunities, there are significant factors presenting threats to our business viz:

Intense competition from established players in the environmental engineering and infrastructure sector.

Changes in Government policies, environmental regulations and statutory requirements.

Delays in project execution due to regulatory approvals, customer dependencies or supply chain disruptions.

Fluctuations in raw material, equipment and labour costs affecting project margins.

Working capital intensity and delays in realization of receivables.

Rapid technological advancements requiring continuous innovation and investment.

Economic slowdown or reduced infrastructure spending impacting project opportunities.

Shortage of skilled technical manpower and project execution resources.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

Standalone Basis

The Revenue from Operations increased from 3,885.21 lakhs in FY 2024 25 to 6,061.30 lakhs in FY 2025 26, an increase of 56.0%. This growth indicates improved sales performance and business expansion during the year.

The EBITDA increased from 669.05 lakhs in FY 2024 25 to 1,052.00 lakhs in FY 2025 26, registering a growth of 57.2%. The increase reflects better operational efficiency and stronger earnings from core business activities.

Profit Before Tax increased from 614.51 lakhs in FY 2024 25 to 976.84 lakhs in FY 2025 26, representing a growth of 59.0%. The improvement indicates higher profitability before accounting for tax expenses.

Profit After Tax increased from 459.48 lakhs in FY 2024 25 to 723.38 lakhs in FY 2025 26, an increase of 57.4%. This reflects improved net profitability and enhanced returns generated by the companys operations.

OUTLOOK FOR FY 2026-27

The Company remains optimistic about its outlook for FY 2026-27, supported by a healthy order pipeline, increasing investments in environmental infrastructure and growing demand for integrated environmental engineering solutions. Continued Government focus on water supply, wastewater management, pollution control and sustainable development is expected to create significant business opportunities.

The Company will focus on strengthening its execution capabilities, expanding its presence across environmental engineering, fire safety and ESG consulting, and leveraging its wholly owned subsidiary to undertake EPC and Operation & Maintenance (O&M) projects. The successful listing on the NSE EMERGE Platform has further strengthened the Companys financial position and enhanced its ability to pursue larger and more complex projects.

Going forward, the Company will continue to emphasize operational excellence, prudent financial management and customer satisfaction while creating sustainable long-term value for its stakeholders.

RISK AND CONCERN

The Company operates in a dynamic business environment and is exposed to risks associated with project execution, changes in regulatory requirements, and fluctuations in raw material prices, working capital requirements, competitive market conditions and delays in customer approvals or payments. The Company continuously monitors these risks and adopts appropriate mitigation measures through effective project management, robust internal controls, prudent financial management and a strong focus on operational excellence to minimize their impact on its business.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUECY

The Company has established adequate internal control systems commensurate with the size and nature of its business. These controls ensure the safeguarding of assets, accuracy of financial reporting, operational efficiency and compliance with applicable laws and regulations. The Audit Committee periodically reviews the adequacy and effectiveness of the internal control systems, and appropriate measures are undertaken to strengthen the control framework, wherever required.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Financial performance of the company during the FY 2025-26 as compared to FY 2024-25 is as under: (Rs. In Lakhs)

Particulars	2025-2026	2024-2025	% of Increase/- Decrease
Gross Revenue from operations	6,061.30	3,885.21	56.0%.
Profit Before Tax	976.84	614.51	59.0%
Profit after Tax	723.38	459.48	57.4%

Operational Performance

The Company continued to focus on improving operational efficiency leading to better returns for the shareholders. Further, the company has significantly enhanced its operational performance by establishing prudent risk management framework.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONSHIP FRONT, INCLUDING NUMBER OF PEPOLE EMPLOYED

The Company recognizes its employees as its most valuable asset and is committed to fostering a fair, inclusive and respectful workplace. Its human resource practices and policies ensure equal opportunities, transparent processes and a diverse work environment for all employees, irrespective of their role or location.

The Companys Human Resources function focuses on effective manpower planning, recruitment, training and development, performance management, compensation and employee engagement, with the objective of aligning individual growth with the Companys long-term business goals. Going forward, the Company will continue to invest in developing and retaining talent while strengthening employee capabilities and organizational effectiveness.

Industrial relations remained cordial throughout the year, and no material labour disputes affecting the Companys operations were reported. As on March 31, 2026, the Company had 148 employees on its rolls.

THE DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

During the financial year, the details of significant change in the key financial ratios i.e. change of more than 25% as compared to the previous year along with the detailed explanation is summarized below on standalone basis:

Sr. No. Key Financial Ratios	F.Y. 2025-26	F.Y. 2024-25	Changes in %	Reasons for change
1. Debtors Turnover Ratio (in days)	153 Days	87 Days	75.00%	The increase in the ratio is primarily attributable to an increase in debtors credit period.
2. Inventory Turnover Ratio* (in times)	16.85	11.78	43.06%	The increase in the Inventory Turnover Ratio during the year as compared to the previous year is primarily attributable to improved inventory management and higher sales volume resulting in better utilization and movement of inventory during the year.
3. Interest Coverage Ratio (in times)	30.26	18.02	67.97%	The increase was primarily attributable to higher earnings before interest and tax (EBIT) and improved debt servicing capacity during the year.
4. Current Ratio (in times)	3.13	1.93	62.01%	The variation in the Current Ratio during the year is mainly attributable to changes in working capital components, including current assets and current liabilities, in the normal course of business operations.
5. Debt Equity Ratio (in times)	0.28	0.20	39.95%	The variance in the Debt- Equity Ratio during the year as compared to the previous year is primarily attributable to changes in the level of borrowings and shareholders equity arising from the Companys financing and operational activities during the year.
6. Operating Margin (in %)	16.94%	16.84%	0.58%	-
7. Net Profit Margin (in %)	11.88%	11.80%	0.69%	-
8. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof. (in %)	20.75%	36.37%	-42.95%	Return on Net Worth (RoNW) decreased from 36.37% in the previous financial year to 20.75% during the current financial year, representing a decline of 42.95%. The decline was primarily on account of the increase in shareholders funds during the year due to Public issue made during the year.

CAUTIONARY STATEMENT

Statement made in the Management Discussion and Analysis describing the various parts may be "forward looking statement" within the meaning of application securities laws and regulations. The actual result may differ from those expectations depending upon the economic conditions, changes in Government regulation and amendments in tax laws and other internal and external factors.