IMP Powers Ltd Management Discussions

Industry Structure and Developments

The Indian power transformer industry continues to play a critical role in the countrys power transmission and distribution infrastructure and is an essential enabler of Indias energy transition. Demand for transformers is being supported by sustained investments in transmission infrastructure, renewable energy integration, grid strengthening, industrial expansion, urbanisation and the development of new high-load applications.

The industry is witnessing a structural increase in demand for higher-capacity and higher-voltage transformers as India expands its transmission network and integrates increasing volumes of renewable energy into the grid. The strengthening of inter-state and intra-state transmission networks, development of Green Energy Corridors and increasing evacuation requirements from renewable energy projects are expected to remain key demand drivers.

Industry is expected to be influenced by the following developments in the upcoming year:

• Continued expansion and strengthening of Indias transmission network to support increasing power generation and inter-regional power transfers.

• Growing requirement for transformers for solar, wind, hybrid RE & storage projects.

• Increasing adoption of Battery Energy Storage Systems (BESS), creating opportunities for specialised transformer applications.

• Continued growth in digitalisation and automation of substations, including smart monitoring and condition monitoring systems.

• Increasing demand from data centres and other high-reliability infrastructure requiring dependable and high- capacity power systems.

• Opportunities in international markets, particularly in the Middle East, Africa and other emerging markets, and the replacement infrastructure needed for the aging power assets in US & Europe.

• Continued volatility in key raw materials, particularly CRGO, copper and insulation materials, requiring effective procurement and cost-management strategies.

IMP Powers is strategically positioned to participate in these opportunities, supported by its established manufacturing capabilities and its ability to manufacture power transformers up to 315 MVA / 400 kV class. The Company is progressively strengthening its manufacturing, testing, design and execution capabilities to address the requirements of a broader customer base and higher-value applications.

Opportunities

1. Expansion of Transmission Infrastructure

Indias continuing investments in transmission infrastructure are expected to create sustained demand for power and EHV transformers. The strengthening of inter-state and intra-state networks and increasing bulk transfer of electricity from both renewable and non-renewable sources provide a significant opportunity for established transformer manufacturers. As per NEP the ISTS system needs an investment of ~4 lakh crores in the FY 27-32 period. The intrastate transmission investment is additional to that. Thus, the need for power transformers is expected to remain steady & robust.

2. Renewable Energy Growth

The rapid expansion of solar, wind and hybrid renewable-energy projects is creating substantial demand for step-up transformers, inverter-duty transformers and associated grid infrastructure. IMP Powers is positioned to participate in this segment through its manufacturing capabilities and continued development of its RE product portfolio.

3. Battery Energy Storage Systems

The increasing deployment of BESS is expected to create a new and growing market for specialised transformers and associated power infrastructure. The company intends to leverage its manufacturing capabilities to participate in this emerging segment. Short circuit test of a few key transformer ratings is planned in FY-27 to enable the same.

4. Data Centres and High-Reliability Infrastructure

The rapid development of data centres and other energy-intensive infrastructure is creating demand for reliable, high-capacity and high-efficiency transformer systems. This segment provides an opportunity for IMP Powers to participate in specialised and technically demanding applications. We are going to manufacture four 160MVA Data Centre Transformers in H1 of FY-27 to make a robust credential for IMP in this segment.

5. Broad Manufacturing Capability

The Companys ability to manufacture transformers up to 315 MVA / 400 kV class provides it with access to a broad range of transmission and industrial applications and positions IMP Powers among the key manufacturers capable of addressing high-voltage requirements.

6. Domestic and International Tender Opportunities

The Company continues to actively participate in national and international tender opportunities. The tender participation strategy initiated during FY 2025-26 is expected to provide a growing opportunity pipeline and support order-book creation during FY 2026-27 and subsequent years. The Company will continue to focus on opportunities where its technical capabilities, manufacturing strengths provide a competitive advantage.

Threats

The key threats facing the Company and the industry include:

• Volatility in prices of CRGO steel, copper and other key raw materials.

• Fluctuations in foreign exchange rates arising from geopolitical developments.

• Working-capital constraints and delayed customer payments.

• Supply-chain disruptions and extended lead times for imported materials.

• Increasing competition from established domestic and international manufacturers.

• Shortage of skilled manpower in design, production, testing and project execution.

The Company continues to monitor these risks and intends to mitigate them through disciplined procurement, project planning, customer selection, cost management and strengthening of its internal systems.

Segment-wise or Product-wise Performance

IMP Powers operates in the design, manufacture, testing, servicing and repair of a wide spectrum of power transformers, with capabilities extending up to 315 MVA / 400 kV class.

Power Transformers

Power transformers remain the Companys flagship product category and constitute the principal focus of its manufacturing and business-development strategy.

During the next fiscal, the company intends to increase its participation in state transmission utility opportunities, RE sector and international projects. IMP Powers broad manufacturing range enables it to address opportunities across different voltage and capacity classes.

The Company is also focused on strengthening its execution capabilities so that increased order inflow can be translated into timely production and dispatch while maintaining quality.

Renewable Energy and Inverter Duty Transformers

Renewable-energy generation continues to be one of the key growth areas for the transformer industry. The Company is developing its capabilities to address the requirements of solar, wind and hybrid renewable-energy projects, including IDTs. The commissioning and utilisation of the Companys foil-winding capability is expected to support its participation in the renewable-energy segment.

BESS and Emerging Applications

Energy storage is emerging as an important component of the future electricity ecosystem. The increasing deployment of BESS is expected to generate demand for specialised transformers and associated electrical equipment. IMP Powers intends to leverage its engineering and manufacturing experience to evaluate and participate in these opportunities while ensuring that each project is commercially and technically viable.

Repair and Retrofit Business

The repair and retrofit business continues to provide an important complementary revenue stream for the Company. Historically, this business provided revenue during the period when the Company was unable to secure fresh orders due to the constraints associated with the NCLT process and availability of banking facilities.

Going forward, the Company intends to retain this capability as a complementary business vertical while increasing the proportion of revenue from new transformer manufacturing.

Outlook

The outlook for the Indian power transformer industry remains positive, supported by continued investments in transmission and distribution infrastructure, renewable-energy integration, industrialisation and increasing electricity demand.

The Companys outlook for FY 2026-27 is based on the following key factors:

• Continued investments in transmission and grid infrastructure.

• Increasing demand for RE evacuation and associated transformer infrastructure.

• Growth in inverter-duty transformer requirements.

• Emerging demand from BESS projects.

• Expansion of data centres and other high-load infrastructure.

• Growing opportunities in private-sector utilities and industrial customers.

• Increasing export opportunities in the Middle East, Africa and other markets.

• Increasing utilisation of the Companys restored manufacturing infrastructure.

• Expansion of the Companys customer base and order pipeline.

IMP Powers enters FY 2026-27 with a clear focus on scaling operations, improving manufacturing utilisation, strengthening execution capabilities and building a sustainable order book.

The Company will continue to pursue a disciplined tender-participation strategy, with emphasis on opportunities that provide an appropriate balance between technical suitability, commercial viability, working-capital requirements and customer credit quality.

The Companys objective is not merely to increase order volumes but to build a quality order book capable of generating sustainable revenue and profitability while progressively improving capacity utilisation.

The Company will also continue to build a strong base for subsequent years through participation in domestic and international opportunities and by developing capabilities in emerging areas such as renewable energy, BESS and datacentre infrastructure. The earlier strategic direction of creating a strong base for FY-27 through continued bidding activity is therefore being carried forward into the Companys growth strategy.

Risks and Concerns

RISKS	EXPLANATION
Price Risk	Raw material costs are volatile and globally linked.
Execution Risk	Stringent delivery schedules can impact quality and timelines.
Client Credit Risk	We are focusing on Private Clients to cover credit risk but any surprise at the starting phase may pose huge sustainability challenge.
Supply Chain Risk	Import dependency for CRGO and insulation materials.
Working Capital Risk	Growth in order execution requires adequate working capital to fund raw materials, manufacturing and project execution until customer payments are received.
Manpower Risk	Availability and retention of experienced technical manpower remains important as the Company scales its operations.
Regulatory and Compliance Risk	Increasing BIS, BEE, statutory, testing and customer-specific requirements require continuous investment in systems, processes and technical capabilities.

Key Concerns

Manufacturing Scale-up:

As the Company scales its operations, maintaining a balance between order acquisition and available manufacturing capacity will remain important. The refurbished production capacity has been tested at only a limited load and needs to be evaluated for full load.

Testing Infrastructure:

Transformer manufacturing requires comprehensive testing capabilities and compliance with increasingly stringent customer and technical requirements. The testing infra has been upgraded to cater to the latest requirements and needs to be evaluated in full load condition.

Manpower:

The availability of skilled manpower across design, production, quality, testing, procurement and project execution will remain a key requirement for the Companys growth.

ERP and Digital Systems:

The Company intends to strengthen its ERP-based procurement, inventory, production and project-management systems. Effective implementation and adoption of these systems will be important to improve visibility, control and scalability.

These concerns are consistent with the Companys earlier identification of manufacturing R&M, testing infrastructure, manpower and ERP implementation as important areas requiring management attention.

Internal Control Systems and Their Adequacy

The Company continues to strengthen its internal control framework to ensure effective operational control, financial discipline, transparency and regulatory compliance. The internal control framework encompasses:

• Regular monitoring of production, cost and inventory

• Project-based budgeting and variance analysis

• Procurement controls and approval mechanisms

• Inventory and material reconciliation

• Quality-control and inspection procedures across manufacturing stages

• Centralized document management and digital records

• Digital signatures and appropriate approval trails for traceability

• Internal audit and management review mechanisms

• Compliance monitoring covering statutory requirements (GST, BIS etc)

The Company intends to further strengthen these systems as the scale and complexity of operations increase. The objective of the internal control framework is to ensure that business growth is supported by appropriate controls and that operational, financial and compliance risks are identified and addressed in a timely manner. ERP-based production, cost and inventory tracking, project budgeting, cyber-secured document management, internal audit and compliance audits system is also being put into place.

Financial Performance with Respect to Operational Performance

FY 2025-26 represents an important phase in the Companys transition from revival and restoration towards sustained manufacturing operations and business growth. The financial performance of the Company during FY 2025-26 should therefore be viewed in the context of the progressive restoration of manufacturing capabilities, strengthening of the order pipeline, increased focus on new transformer manufacturing and the Companys continuing efforts to establish a sustainable operating base.

The previous financial year reflected the Companys transition phase, with total income of Rs.31.38 crore compared with Rs.1.52 crore in FY 2024-25, while. The total comprehensive income has improved from loss of Rs.2.11 crore in FY 2024-25 to profit of 0.11 Crores. The earlier financial performance also reflected significant non-operational/interest income and should accordingly be read in conjunction with the Companys operational transition.

For FY 2026-27, managements focus is on improving the quality and sustainability of operating revenues through:

• Higher contribution from new transformer manufacturing.

• Better utilisation of manufacturing infrastructure.

• Improvement in production efficiency.

• Improved procurement and material planning.

• Better absorption of fixed manufacturing costs.

• Increased contribution from higher-value transformer applications.

• Disciplined order selection and project execution.

• Improved working-capital management.

The Company expects that increasing manufacturing activity and better capacity utilisation will progressively improve operating leverage. Management will continue to focus on profitable growth rather than pursuing order volumes without adequate consideration of margins, working-capital requirements and customer credit risk.

Metric	FY 2025-26	FY 2024-25	Change	Commentary
Total Income	Rs. 36.83 Cr	Rs. 13.26 Cr	Rs. 23.57 Cr	Revenue from Transformer Sales
EBITDA	Rs.5.49 Cr	Rs.3.87 Cr	Rs. 1.62 Cr	No liquidation exp in current year, and margin from Transformer
PAT	Rs.0.11Cr	Rs.-2.12 Cr	Rs. 2.23 Cr	Earnings from Transformer Sale

Human Resources and Industrial Relations

Human resources remain a critical component of the Companys growth strategy, particularly given the specialised nature of transformer design, manufacturing, testing and execution.

The Company is progressively strengthening its workforce in line with its manufacturing and business-development requirements. Recruitment is being focused on critical technical and managerial functions including:

• Transformer design and engineering.

• Production and manufacturing.

• Quality assurance and quality control.

• Testing and commissioning.

• Procurement and supply-chain management.

• Project management.

• Sales and business development.

• Finance and commercial functions.

The Company continues to emphasise technical upskilling and practical training to ensure that employees remain aligned with evolving customer requirements and industry standards.

Health, safety and environmental practices continue to remain an important area of focus. The Company intends to strengthen HSE awareness, training and compliance as manufacturing activity increases. It also remains committed to maintaining a positive and productive work environment and fostering industrial harmony.

As on March 31,2026, the Company had 107 employees on its rolls.

Strategic Priorities for FY 2026-27

During FY 2026-27, the Companys principal strategic priorities are:

1. Scale Manufacturing Operations

To progressively increase manufacturing activity and utilisation of the Companys available manufacturing infrastructure.

2. Build a Quality Order Book

To focus on technically suitable and commercially viable orders across utilities, private-sector customers, renewable energy, industrial projects and exports.

3. Strengthen Higher-Voltage Capabilities

To leverage the Companys established capability up to 315 MVA / 400 kV and expand participation in higher-value transmission opportunities.

4. Expand Renewable-Energy Business

To increase participation in solar, wind, hybrid and inverter-duty transformer opportunities.

5. Participate in BESS and Data-Centre Opportunities

To develop suitable products and customer relationships in emerging high-growth applications.

6. Improve Operational Efficiency

To strengthen procurement, production planning, inventory management, quality control and project execution.

7. Strengthen Working-Capital Management

To align order intake with the Companys funding capability and ensure that growth remains financially sustainable.

8. Develop Export Markets

To selectively pursue international opportunities where the Companys technical capabilities and cost competitiveness provide a sustainable advantage.

Conclusion

FY 2025-26 is an important year in the transformation of IMP Powers from a revived manufacturing asset into a scalable and sustainable power-transformer business. The Company operates in an industry supported by long-term structural drivers including transmission expansion, renewable-energy integration, energy storage, industrialisation and increasing electricity demand. IMP Powers established manufacturing capabilities, including its ability to manufacture transformers up to 315 MVA / 400 kV class, provide a strong platform from which to participate in these opportunities.

Management remains focused on profitable growth, disciplined order acquisition, manufacturing efficiency, quality execution and prudent working-capital management. The Company will continue to invest in people, processes, testing capabilities, digital systems and customer relationships to create a stronger and more competitive organisation.

The Companys objective is to build IMP Powers into a reliable, technology-oriented and globally competitive transformer manufacturer, with a diversified customer base and sustainable long-term growth across domestic and international markets.

Management remains confident about the Companys long-term prospects while recognising that commodity-price volatility, working-capital availability, supply-chain conditions, execution requirements and customer-credit risks will continue to require close management attention.

The management believes that the foundations laid during the Companys revival phase provide a strong platform for sustainable growth and value creation in the years ahead.

Key Financial Ratios

Sr. No. Ratio	Numerator	Denominator	31st March 2026	31st March 2025	% variance	Reason of variance
Current ratio	Total Current assets	Total Current Liabilities	0.42	0.34	21.98%	Refer note below
ii Debt-Equity ratio	Total Debt	Sharesholders Equity	(1.19)	(1.13)	5.25%	Refer note below
iii Debt Service Coverare ratio	Earnings for debt services =(EBITDA) for the period	Debt service= interest & Lease payment + Principal repayment	0.15	0.10	39.41%	Refer note below
iv Return on equity ratio	Net Profit/ (Loss) after tax	Average Shareholders Equity	#	#	#
v Inventory turnover ratio	Cost of goods sold	Closing Inventories	0.55	0.03	1819.43%	Refer note below
vi Trade Receivables turnover ratio	Revenue from operations	Closing trade receivables	0.79	0.04	1942.15%	Refer note below
vii Trade Payables turnover ratio	Net Credit purchase= RM Purchase & Others purcahse	Closing trade payables	0.49	0.03	1760.92%	Refer note below
viii Net Capital turnover ratio	Net Sales	working capital= current assets -Current liabilities	@	@	@
ix Net Profit ratio	Net Profit/ (Loss) after tax	Revenue from operations	0.00	(0.16)	-102.35%	Refer note below
x Return on Capital Employed	Profit before tax and interest cost	Capital employed=net worth +lease liabilities +deferred tax liabilities	#	#	#
xi Return of Investment	Interest Income on bank deposit	Bank Deposit	2.5% to 5.5%	2.5% to 5.5%

" The Company was under liquidation during FY 2023-24, pursuant to which the sale of the Company as a Corporate Debtor was approved and concluded during FY 2024-25. Following the approval of the sale, the new management took over the affairs of the Company during FY 2024-25; however, full-fledged business operations had not commenced as at the end of that year. During the current financial year (FY 2025-26), the Company commenced its production/business operations with effect from the third quarter (Q3). Since operations have been carried out only for a part of the year and are yet to reach normal capacity utilisation, the current years results reflect a partial period of operations at sub-optimal levels. Consequently, the financial ratios presented for the current year are not comparable with those of the previous year or with industry norms/benchmarks "

# Negative hence not applicable @ Net working capital is negative