HVAX Technologies Ltd Management Discussions

Global Economy Overview

The global economy demonstrated resilience through CY 2025, supported by technology-related investment, relatively accommodative financial conditions and fiscal and monetary policy support. Global trade remained robust, with strong growth in technology-related exports helping offset weaker momentum across other product categories, although supply chains and trading relationships continued to be reoriented amid changing trade policies.

However, the global economic environment has become more challenging following the escalation of geopolitical tensions and the conflict in the Middle East, which has increased commodity-price volatility, inflationary pressures and uncertainty across financial markets. Against this backdrop, the IMF projects global growth at 3.1% in 2026 and 3.2% in 2027, compared with around 3.4% during 2024-25, while global headline inflation is expected to rise to 4.4% in 2026 before moderating to 3.7% in 2027. Growth prospects remain uneven across economies, with emerging markets and developing economies facing greater vulnerability to external shocks, while medium-term activity continues to be constrained by geoeconomic fragmentation and structural challenges. At the same time, continued investment in technology and the potential productivity gains from artificial intelligence could provide an important source of future growth.

GDP Growth Rate

	CY 2025	CY 2026 (Projections)	CY 2027 (Projections)
World	3.4%	3.1%	3.2%
Advanced Economies	1.9%	1.8%	1.7%
United States	2.1%	2.3%	2.1%
Euro Area	1.4%	1.1	1.2
Emerging Markets and Developing Economies	4.4%	3.9%	4.2%
China	5.0%	4.4%	4.0%
India	7.6%	6.5%	6.5%

(Source: World Economic Outlook by IMF, April 2026)

Indian Economy Overview

Indias economy continued to demonstrate resilience during FY 2025-26, supported by robust domestic consumption, sustained investment, and improving business activity despite an uncertain global environment. Real GDP is estimated to have grown by 7.6%, while private consumption remained an important driver of economic activity. Moderating inflation, stable employment conditions, and improving purchasing power supported household demand, while continued urbanisation and infrastructure development broadened economic opportunities beyond major metropolitan centres. The services sector remained a key contributor to growth, reflecting the increasing importance of urbanisation, technology, and modern business infrastructure in the evolving economy.

Investment activity also remained supportive, with the Government maintaining its focus on infrastructure and productive capacity. Capital expenditure was budgeted at ?12.2 lakh crore, equivalent to 3.4% of GDP, for FY 2026-27, supporting infrastructure creation and economic development. At the same time, policy initiatives focused on manufacturing, MSMEs, digitalisation and ease of doing business continued to strengthen the domestic business ecosystem.

(Source:MoSPI Provisional Estimates FY2025-26; . aspx?PRID=2222521®=3&lang=1)

Global Pharmaceutical Industry

The global pharmaceutical industry continues to expand, with the market projected to grow from approximately USD 1,627.7 billion in 2025 to USD 1,722.1 billion in 2026, representing 5.8% YoY growth, according to Frost & Sullivan. Growth is increasingly being driven by large-molecule therapies and advanced treatments, particularly GLP-1 therapies and antibody-drug conjugates across cardiometabolic and oncology applications, while small molecules continue to provide a stable revenue base. At the same time, the industry is shifting towards manufacturing resilience, regulatory readiness and scalable production, with greater emphasis on sterile fill-finish, specialised manufacturing capabilities and robust supply chains. Al-enabled drug discovery, clinical development and digital quality systems are also gaining importance, while pricing reforms, biosimilar competition and geopolitical supply-chain risks remain key industry considerations.

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Indian Pharmaceutical Industry

Indias pharmaceutical industry is evolving from a scale-driven generics base towards a more diversified and capability-intensive healthcare manufacturing ecosystem. Ranking third globally by volume and 11th by value, the industry comprises more than 3,000 companies and 10,500 manufacturing units, with the domestic market valued at around US$60 billion and projected to reach US$130 billion by 2030. Indias strength in cost- efficient manufacturing, a skilled scientific workforce and a broad manufacturing base continues to support its position as the worlds largest supplier of generic medicines, accounting for around 20% of global supply. Meanwhile, increasing focus on biopharmaceuticals, complex therapies, vaccines, advanced manufacturing and domestic capacity creation is opening new avenues for industry growth. Policy initiatives such as Biopharma SHAKTI, proposed with an outlay of ?10,000 crore over five years, are expected to further strengthen Indias biopharmaceutical ecosystem and enhance its role in global pharmaceutical manufacturing.

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Global Cleanroom Technology Industry

The global cleanroom technologies market is projected to grow from US$9.39 billion in 2026 to US$12.93 billion by 2031, registering a CAGR of 6.61% during 2026-31. Growth is being supported by tightening regulatory and quality requirements, expansion of high-purity manufacturing and increasing investments in pharmaceuticals, biotechnology, medical devices, semiconductors and precision electronics. The pharmaceutical industry remained the largest end-user segment in 2025, while modular cleanrooms accounted for the largest share by cleanroom type, reflecting demand for faster deployment, scalability and reconfiguration. The market is also evolving towards loT-enabled monitoring, Al-driven environmental management, energy-efficient HVAC systems, automation and advanced contamination-control solutions, as customers increasingly seek compliant infrastructure with greater operational efficiency. Asia Pacific is expected to be the fastest-growing regional market, supported by expanding pharmaceutical, biotechnology, semiconductor and electronics manufacturing.

Key Growth Drivers

• Expansion of Biologics & Advanced Therapies - Growth in biologics, vaccines and cell & gene therapies is increasing demand for highly controlled, contamination-free manufacturing environments.

• Rising Sterile Manufacturing - Increasing production of parenteral and injectable formulations is driving investments in higher-grade cleanrooms, filtration and environmental monitoring systems.

• Regulatory Compliance - Stricter GMP, ISO and regulatory requirements are encouraging pharmaceutical, biotechnology and medical-device manufacturers to upgrade existing facilities and monitoring systems.

• Semiconductor & High-Purity Manufacturing - Expansion of semiconductor, precision electronics, micro- LED, battery and other high-purity manufacturing applications is widening the addressable market for cleanroom technologies.

• Growth in Emerging Economies - Increasing investments in high-tech manufacturing and R&D infrastructure across Asia Pacific, the Middle East and other emerging markets are creating new opportunities for cleanroom technology providers.

• Shift Towards Modular Cleanrooms - Modular systems are gaining preference due to faster installation, scalability, flexibility and comparatively predictable validation timelines.

• Smart & Energy-Efficient Cleanrooms - IoT sensors, real-time analytics, AI-enabled monitoring and energy- efficient systems are increasingly being integrated to improve contamination control, operational efficiency and compliance.

• Healthcare Infrastructure Requirements - Growing focus on contamination control and patient safety is supporting the adoption of cleanroom technologies across hospitals, medical-device facilities and other healthcare applications.

Indian Cleanroom Industry

Indias cleanroom industry is evolving from a largely pharmaceutical-led market into a broader infrastructure opportunity spanning pharmaceuticals, medical devices, food processing and semiconductors. According to Rinac, the Indian cleanroom technology market was estimated at USD 303.3 million in 2025 and is projected to reach USD 636.7 million by 2033, registering a 9.9% CAGR. Pharmaceutical manufacturing remains a key demand driver, supported by the implementation of revised Schedule M requirements, which is encouraging manufacturers to upgrade existing facilities and infrastructure. At the same time, increasing investments in PLI-supported pharmaceutical and medical-device manufacturing, semiconductor facilities and high-care foodprocessing environments are expanding the addressable market for cleanroom solutions. The growing emphasis on regulatory compliance, contamination control, energy efficiency and modular construction is further driving demand for technologically advanced and integrated cleanroom infrastructure.

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Key Growth Drivers

• Pharmaceutical Capacity Expansion - Continued investment in pharmaceutical and biopharmaceutical manufacturing is driving demand for new and upgraded controlled environments.

• Revised Schedule M Compliance - Upgradation requirements under revised Schedule M are encouraging pharmaceutical manufacturers to modernise cleanrooms, HVAC systems and associated infrastructure.

• Semiconductor Manufacturing - The development of domestic semiconductor fabs, assembly and testing facilities is creating demand for highly controlled and technically advanced cleanroom environments.

• Medical Device Manufacturing - Expansion of domestic medical-device manufacturing, supported by government initiatives, is increasing requirements for controlled production environments.

• Food Processing & High-Care Manufacturing - Growth in ready-to-eat, dairy and other high-care foodprocessing applications is creating demand for hygienic and contamination-controlled production areas.

• Regulatory & Quality Standards - Greater emphasis on GMP, ISO and contamination-control standards is encouraging manufacturers to invest in compliant cleanroom infrastructure.

• Energy-Efficient Infrastructure - Increasing focus on lifecycle operating costs is driving demand for optimised HVAC, airflow management, monitoring and energy-efficient cleanroom designs.

• Shift Towards Modular Construction - Modular and panelised cleanroom construction offers faster installation, greater design flexibility and easier future modifications, supporting its adoption across industrial applications.

Company Overview

Established in 2010 and headquartered in Mumbai, HVAX Technologies Limited is a specialised turnkey solutions provider for cleanroom and controlled environment infrastructure. The Company delivers engineering- led solutions for precision-driven and regulated applications, with a growing presence across pharmaceuticals, biotechnology, healthcare, FMCG, solar and semiconductor sectors. Its capabilities span cleanroom HVAC systems, modular partitions, air handling units, ducting, ceilings and Building Management Systems, enabling customers to develop controlled environments aligned with stringent industry and global Good Manufacturing Practices standards.

HVAX provides integrated project solutions covering feasibility studies, design and detailed engineering, procurement, installation, testing, commissioning and validation. With 250+ projects executed across 22+ countries, the Company has developed experience across diverse international markets and complex project requirements. Its combination of technical expertise, integrated execution capabilities and sectoral understanding positions HVAX to serve customers across both established and emerging applications requiring reliable, compliant and technically engineered infrastructure.

Financial Performance

The Company delivered a strong financial performance during FY 2025-26, reflecting healthy business momentum and disciplined execution. Total Income stood at ?163.87 crore, registering a 25.06% YoY growth, while EBITDA increased to ?24.16 crore, with the EBITDA margin improving to 14.74%. Profit After Tax (PAT) stood at ?14.73 crore, representing a 33.37% YoY growth, with PAT margin at 8.99%. The Companys net worth strengthened to ?86.89 crore.

Key Ratios - FY25

Particulars	FY26	FY25
EBITDA Margin (In %)	14.74%	14.48%
Net profit Margin (In %)	8.99%	8.43%
ROE (In %)	18.6%	21.4%
ROCE (In %)	17.9%	17.4%
Interest Coverage (In Times)	7.68	7.66
Debt to Equity (In Times)	0.47	0.39
Current ratio (In Times)	2.29	2.44
Fixed Asset Turnover (In Times)	24.03	16.89

Risk Management

HVAX Technologies operates in highly regulated and project-driven industries where risk management is central to sustaining growth and ensuring stakeholder confidence. The Company has adopted a proactive framework to identify, monitor, and mitigate risks across operational, financial, regulatory, and strategic areas.

	Description		Mitigation Measures
Regulatory & Compliance Risk	Projects are subject to stringent domestic and international standards, including USFDA, EU-GMP and ISO 14644. Any deviation from applicable requirements could affect project execution, customer confidence and business reputation.		HVAX leverages in-house technical expertise in regulatory requirements and follows structured quality assurance, testing and validation processes. Projects are executed with a focus on meeting applicable domestic and international standards.
Client & Sector Concentration Risk	A significant proportion of demand is derived from the pharmaceutical and life sciences sectors, creating exposure to sector-specific investment cycles and changes in industry conditions.		The Company is broadening its addressable market through opportunities in healthcare infrastructure, semiconductors, solar manufacturing, data centres and other specialised applications, thereby progressively diversifying its business mix.
Project Execution & Delivery Risk		Turnkey projects involve multiple stakeholders, technical interfaces and dependencies. Delays, cost overruns or coordination challenges could affect project timelines, margins and customer satisfaction.		HVAX follows structured project management practices supported by experienced engineering, procurement and execution teams. Its integrated approach enables closer coordination across project stages and supports effective monitoring of timelines, costs and deliverables.
Competition Risk		The cleanroom and controlled environment infrastructure market includes established domestic and international players with significant technical capabilities and resources, creating competitive pressure on pricing, quality and project acquisition.		HVAX focuses on specialised engineering capabilities, customised solutions, integrated project execution and technical responsiveness. Its asset-light operating model also supports cost efficiency and competitive positioning.
Financial & Liquidity Risk		Project-based operations may result in working capital requirements being influenced by project execution cycles, milestone-based billing and customer payment schedules.		The Company maintains disciplined working capital management and monitors receivables, project cash flows and funding requirements. A prudent financial approach supports liquidity and operational continuity.
Talent & Resource Risk		Execution of specialised projects requires skilled engineering, project management, technical and operational personnel. Limited availability or attrition of specialised talent could affect execution capabilities.		HVAX focuses on employee development, technical training and cross-functional exposure while fostering a collaborative work environment. These initiatives support capability building, employee engagement and talent retention.

Internal Control System, Adequacy and Compliance

HVAX has instituted a well-defined internal control system to safeguard assets, ensure the reliability of financial reporting, and support efficient project execution. The framework is aligned with the Companys business model of delivering turnkey cleanroom and controlled environment solutions across highly regulated industries. Policies, standard operating procedures (SOPs), and defined accountability structures guide financial, technical, and operational workflows.

The internal audit function operates independently and reports directly to the Audit Committee of the Board. Regular reviews are conducted to evaluate compliance with statutory requirements, contractual obligations, and internal policies. Particular emphasis is placed on project governance, cost control, and audit readiness for regulated environments. Based on reviews by auditors, management, and the Audit Committee, the Board affirms that HVAXs internal control systems were adequate and effective as on March 31, 2026, with no material weaknesses identified.

Human Resources

People continue to be an important enabler of HVAXs execution capabilities and growth. As the Company expands across sectors and geographies, it is focused on building a capable workforce with the technical expertise, project orientation and adaptability required to manage increasingly complex assignments. A collaborative work environment, supported by clear accountability and knowledge sharing, enables teams across engineering, project execution, procurement, operations and corporate functions to work cohesively.

The Company continues to strengthen employee capabilities through structured learning and development initiatives aligned with evolving business requirements. Exposure to diverse projects, technologies and markets provides employees with opportunities to deepen functional expertise while developing broader execution capabilities. HVAX remains focused on fostering a professional and inclusive workplace, strengthening talent capabilities and maintaining constructive employee relations as it prepares its workforce for the next phase of growth.

10. Outlook

HVAXs outlook is shaped by the continued evolution of industries where precision, environmental control and regulatory compliance are integral to infrastructure. The Company sees a widening opportunity landscape as pharmaceutical and biotechnology manufacturing becomes more sophisticated and investments in healthcare, semiconductors, renewable energy and digital infrastructure accelerate. This creates scope to extend its engineering and project execution capabilities into adjacent applications while deepening its position in its established markets.

The Companys approach to growth will remain selective and capability-led. Rather than pursuing diversification solely for scale, HVAX intends to enter opportunities where its technical expertise, integrated execution capabilities and understanding of regulated environments can provide a meaningful advantage. Strategic initiatives, including the proposed expansion of its healthcare platform, are expected to support this evolution by broadening the solutions and markets the Company can address.

Internationally, the Company sees potential to build a more diversified presence across emerging and established markets, particularly in the GCC, Asia-Pacific and LATAM regions. Over the medium term, HVAX aims to develop a business that is broader in application, deeper in capability and more resilient in its revenue profile. The focus will remain on building sustainable scale without diluting execution quality, supported by disciplined capital allocation, strong customer relationships and continuous strengthening of organisational capabilities.

11. Cautionary Statement

This Management Discussion and Analysis (MD&A) Report contains forward-looking statements reflecting the current views and expectations of HVAX Technologies Limited regarding its business, performance, growth prospects and strategic initiatives. These statements are based on managements assessment of prevailing economic and market conditions, business plans and other factors considered relevant as of the date of reporting. Such statements are subject to risks and uncertainties, including changes in economic conditions, regulatory requirements, competitive dynamics, project execution, market developments and other factors that may cause actual results to differ materially from those expressed or implied.

While the Company believes that the assumptions underlying these statements are reasonable, it does not guarantee their accuracy or completeness. The Company undertakes no obligation to update or revise any forward-looking statements, except as required under applicable laws and regulations. This MD&A should be read in conjunction with the audited financial statements and related disclosures forming part of the Annual Report for the year ended 31st March 2026.