GVK Power & Infrastructure Ltd Management Discussions

1. About the Company

GVK Power & Infrastructure Limited (the Company) is a listed entity and an ultimate holding company of "GVK" which operates in diversified business operations under different verticals. The Company earlier used to operate predominantly in Energy,

Airports, Transportation and has presence in other businesses like Urban infrastructures etc. With the closure of business under Airport sector, bleak future in Energy and Transportation sectors coupled with practically no possibility of raising funds from the Lenders/ Institutions, your management is unable to diversify into any other area of business.

2. The Economy and Sectoral growth

The Indian economy demonstrated resilience during FY 2024-25, supported by stable macroeconomic fundamentals, robust domestic demand, and government-led infrastructure push. Key sectors such as manufacturing, services, digital economy, and renewable energy recorded healthy growth, while agriculture remained steady despite global uncertainties.

In FY 2024-25, Indias economy registered real GDP growth of 6.5%, the slowest in four years, though the economy rebounded strongly in Q4 with growth of 7.4%. Nominal GDP advanced by 9.7%. On the supply side, agriculture grew 3.8%, construction posted 8.6%, and the financial, real estate & professional services sector expanded 7.3%. The final quarter saw standout quarterly growth: construction surged 10.8%, services including public administration and real estate grew nearly 9%, and agriculture gained momentum at 5.4%, while manufacturing moderated to under 5%.

On the demand side, private consumption showed resilience, rising ~7.2 7.3%, supported by rural revival, while government spending improved to 4.1%. Together, these dynamics underscore an economy that, despite broader cooling, retained considerable momentum heading into the new fiscal year.

A) POWER

India achieved a record peak power demand of 250 GW during FY 2024 25, successfully meeting almost all of it, reducing energy shortages to just 0.1 % significantimprovement from 4.2 % in 2013 14. Total installed power capacity rose markedly As of June 2025: 476 GW, a 56% increase over the past decade. Clean (non-fossil fuel) capacity reached 235.7 GW, making up 49 % of total capacity. Another source notes 50% of capacity is now from non-fossil sources reaching these five years ahead of schedule. As of April 30, 2025: installed capacity stood at 472.46 GW, with clean sources at around 223.62 GW. Total generation hit 1,821 billion units (BU), up 5% from FY 2023 24. As of March 2025: Renewable capacity exceeded 220 GW, but coal production also reached 1 billion tonnes in FY 2024 25, with coal still accounting for ~70% of electricity generation. Around 56 GW of clean (renewable + hydro + nuclear) projects are under development, but simultaneously 30 GW of coal-fired capacity remains under construction, ensuring coal remains a dominant source for now.

Grid Integration & Infrastructure Transmission capacity and planning are struggling to keep pace with renewable additions:

Solar curtailmentshaveoccurred upto48% insufficientgrid evacuation capacity, regionslikeRajasthan dueto costing producers over $26 million since April 2025. The Central Electricity Authority flagged ~44 GW of renewable projects lacking supply agreements, stressing the need for advanced grid planning and synchronization between project developers and transmission infrastructure. Meteorological precision upgrades are being pursued to better align renewable generation forecasts with grid operations, as current forecasts lack required granularity.

B. TRANSPORTATION

Indias total National Highway (NH) network reached 146,195 km, a significant rise from 91,287 km in 2014 a 60% increase by December 2024, about 5,853 km of new highways had been constructed in the fiscal year, translating to an average of around 21 km per day.

Under the Bharatmala Pariyojana, 26,425 km of highway projects were awarded, and 18,926 km completed by late 2024.

The network of high-speed corridors (HSC) grew to 2,474 km and four-lane-or-above NHs (excluding HSCs) to 45,900 km.

Plans are underway to upgrade 25,000 km of two-lane highways to four lanes, backed by a 10 lakh crore investment.

Additionally, 16,000 km of NHs are to be widened to six lanes with a 6 lakh crore budget. For the North-East (SARDP-NE), 5,702 km out of 5,998 km targeted have been completed; in Left-Wing Extremism-affected areas (including Vijayawada Ranchi), 5,775 km of 6,014 km have been finished.

Asset monetization via highway projects raised 1.42 lakh crore through FY 2024 25, with an anticipated 30,000 crore expected in the current fiscal. NHAI has also targeted construction of 10,421 km of new highways in FY 2024 25, with a projected spending of approximately 1.68 trillion; monetization via InvITs and toll roads (including 889 km already monetised) supports this ambition. A noticeable drop in greenhouse gas emissions intensity from 1.0 to 0.8 MTCO e/km underscores NHAIs push toward eco-friendlier operations, even amid a construction surge.

Thanks to electronic tolling with FASTag, average wait times at toll plazas plunged from 734 seconds to 47 seconds, with plans for barrier-free tolling on all four-lane highways by 2028 29.

3. Assets under Operation

Energy

One Hydel power project i.e. 330 MW Alaknanda Hydro Power Company Limited has recorded revenue of Rs.869 Crore for the year ended March 31, 2025 as against Rs.1,117 Crore for the previous year.

Your Company now has only one revenue generating asset during the year 2024-25 i.e. 330 MW Alaknanda Hydro Power

Company Limited.

Alaknanda Hydro Power Company Limited

The 330MW Shrinagar Hydro Electric Project achieved Annual Plant Availability Factor of 56.12% for the FY 2024-25 with a Plant Load Factor of 49.92 %. During the monsoon season, the Project operated all four units at their full capacity. During other seasons, based on the water flows, the plant was operated with at least one turbine, either on part or full load. During the year under review, the company has generated revenues of Rs. 869 Crore with a profit of Rs. 81.23 Crore.

4. Risks & Concerns

Energy

The energy crisis is the concern that the worlds demands on the limited natural resources that are used to power industrial society are diminishing as the demand rises. These natural resources are in limited supply. While they do occur naturally, it can take hundreds of thousands of years to replenish the stores. The world faces two energy problems: most of our energy production still produces greenhouse gas emissions, and hundreds of millions lack access to energy entirely.

Among the major categories of risk considered are those relating to industrial operations, to atmospheric pollution, to shortage of water supply, and to change in climate. For each of these, we have considered the risks posed by energy systems based on fossil fuels, nuclear fuels, and solar energy. Some of the issues leading to the power deficit situation in the country include (i) shortage of fuel, (ii) high AT&C losses, (iii) a differential tariff structure, and (iv) delays in tariff revisions.

Transportation

One of the most common transportation risks in distribution logistics is delays and disruptions. These can occur due to various factors such as traffic congestion, weather conditions, accidents, strikes, customs clearance, regulatory changes, or unexpected events. Few other instances of transportation risks are labor shortage delays, loss or theft of cargo, incorrect documentation, cargo damage and lack of proper insurance. To reduce these risks, businesses implement transportation risk management strategies and procedures.

6. GVK Power & Infrastructure Limited Financial Performance Review

Standalone Financials

Revenue

The total income of the company, which comprises of income from operations, of power plant, Fees for technical services and other income is Rs.150 lakhs.

Expenditure

The Companys total expenditure, comprising of Cost of Operation, Employee BenefitExpenses and other administrative expenses, decreased to Rs.474 Lakhs (Including impairment of Deemed investment of Rs. 5 lakhs) Lakhs for the year ended March 31, 2025 from Rs.3,408 lakhs for the year ended March 31, 2024.

Interest

Interest expenses stood at Rs.Nil (previous year figure was Rs. Nil)

Profit before tax (PBT)

Profit before tax for the year stood at Rs. 37 lakhs for the current year as compared to loss of Rs. (1,451) lakhs in the previous year.

Profit a er tax

Profit after tax is Rs. (32) lakhs for the year ended March 31, 2025 as compared to loss of Rs. (1,794) lakhs in the previous year.

Earnings Per Share (EPS)

The earnings per share at a standalone level for the current year stands at Rs. (0.00) as compared to Rs. (0.11) per equity share of Re.1/- each in the previous year.

GVK Power & Infrastructure Limited

Consolidated Financials

The current year results include the results of the companies including subsidiaries, step down subsidiaries, joint ventures and associates. The Consolidated Financial Statements have been drawn as per the Indian Accounting Standards (Ind AS)

IND-AS 110 on "Consolidated financial statements" and IND - AS 28 on "Investment in associate and joint venture" notified under Section 133 of the Companies Act, 2013 and Companies (Indian Accounting Standards) Rules, 2015, as amended. These companies operate broadly in a) Power b) Road c) Airports and d) Other sectors.

Revenue

GVKPIL registered a consolidated total income from operations of Rs.80,216 Lakhs for the year ended March 31, 2025, as against Rs.108,014 Lakhs during the corresponding period of the previous year recording decrease by 35%.

EBIDTA at a consolidated level for the year stood at Rs. 65,930 Lakhs as against Rs. 92,664 Lakhs in the previous year. EBIDTA margin at a consolidated level decreased to 29% as compared to 30 % in the previous year.

Profit a er tax

Profit after tax and non-controlling interest attributable to equity holder of GVKPIL for the current year is Rs.59,761 lakhs for

2024- 25 as compared to Rs. 21,211 lakhs in the previous year.

Earnings per Share (EPS)

The earnings per share at consolidated level for the current year stands at Rs.3.58 as compared to Rs.0.13 per equity share of

Re.1/- each in the previous year.

Net Worth

The net worth as at the end of Financial Year 2024-25 stands at Rs. 116,810 lakhs as compared to Rs.56,277 lakhs as at the end of the previous year.

During the period under review, there are no significant changes (i.e. change previous financial year) in key financial ratios.

Details regarding Conservation of Energy and Technology Absorption:

Information on the conservation of Energy, Technology absorption and Research & Development, required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are provided hereunder:

(A) Conservation of Energy:

(i) the steps taken or impact on conservation of energy	Nil
(ii) the steps taken by the company for utilizing alternate sources of energy	Nil
(iii) the capital investment on energy conservation equipments	Nil

(B) Technology absorption:

(i) the efforts made towards technology absorption	The Company has not absorbed any technology from any source.
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution	Nil
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-	Nil
(a) the details of technology imported	Nil
(b) the year of import;	Nil
(c) whether the technology been fully absorbed	Nil
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof	Nil
(iv) The expenditure incurred on Research and Development	Nil

7. Clean Development Mechanism

The Clean Development Mechanism (CDM) allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of Carbon-di-oxide (CO2). These CERs can be traded and sold, and used by industrialized countries to a meet a part of their emission reduction targets under the Kyoto Protocol.

The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets. Three of the group companies i.e. GVK Industries Ltd

(Phase II), GVK Gautami Power Ltd and Alaknanda Hydro Power Company Ltd were registered with UNFCCC and as such these projects are eligible for CER credits.

8. Internal Control System and Adequacy

The companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These systems are designed to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized, recorded and reported. The Company has an internal audit function, which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. The internal audit function team comprises of well-qualified, experienced professionals who conduct regular audits across the

Companys operations. The internal audit reports are placed before the Audit committee for consideration. The management duly considers and takes appropriate action on the recommendations made by the statutory auditors, internal auditors and the independent Audit Committee of the Board of Directors.

9. Material developments in Human Resources/Industrial Relations front, including number of people employed

The total number of employees of GVK at the corporate office and projects sites as on March 31, 2025 stands at 190 approximately.

Your company periodically reviews the requirement of these employees across various projects based on the need and necessity.

The optimal utilization of the human resources with multi-tasking is what is being emphasized across the group.

10. Future Outlook

As you may be aware, all infrastructure companies across India are facing challenging times due to their financial exposure to Banks and Lending Institutions. Repayment of these loans have become a real task particularly when their revenue flows are which are either minimal or nothing due to delays or very long gestation periods. As a result, they are unable to make loan repayments and are branded as Non-Performing Assets (NPA) by their Lenders. The situation for some companies is very bad because even though their projects/plants are completed / ready for operations, they are unable to operate due to the non-availability of natural gas/coal etc. The majority of these factors are not under the control of the management. GVK is no exception to this.

11. Cautionary Statement

Statements in the Management Discussion and Analysis describing the companys objectives, projections, estimates and expectations may be ‘forward looking statements within the meaning applicable under the securities laws and regulations. As ‘forward-looking statements are based on certain assumptions and expectations of future events over which the company exercises no control, the company cannot guarantee their accuracy nor can it warrant that the same will be realized by the company. Actual results could differ materially from those expressedSignificantfactors that could make a implied. difference to the companys operations include domestic and international economic conditions affecting demand, supply and price conditions in the electricity industry, changes in government regulations, tax regimes and other statutes.