Integra Engineering India Ltd Management Discussions

ANNEXURE- H

Your Directors have pleasure in presenting the Management Discussion and Analysis Report for the year ended on 31st March 2026.

FORWARD LOOKING STATEMENT

This report contains forward-looking statements based on certain assumptions and expectations of future events. The Company, therefore, cannot guarantee that these assumptions and expectations are accurate or will be realized, The Companys actual results, performance or achievements can thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.

OVERVIEW

Integra Engineering India Limited ("IEIL" or "the Company") is engaged in the business of design, manufacture, and supply of engineered solutions for the industrial and transportation sectors, with a primary focus on railway and rolling stock applications. The Company supplies products and solutions to leading original equipment manufacturers (OEMs) in India and select global markets.

The Companys core areas of expertise include sheet metal fabrication, wiring and electromechanical solutions, and aluminium metro interior systems. Its manufacturing operations are supported by in-house capabilities such as CNC laser cuffing, punching, precision bending, welding, and surface finishing, enabling the Company to meet customer-specific technical and quality requirements.

IEIL also offers wiring harness design, control panel assembly, and functional testing, in accordance with applicable standards and customer specifications. These capabilities allow the Company to offer integrated solutions across multiple stages of the value chain.

In the rolling stock segment, the Company supplies aluminium metro interior components, including ceilings, side walls and side window panels, door pillars, end walls, saloon doors, and complete driver cab interiors comprising driver desks and cab back walls to OEMs. The Company supports its customers in designing and development of these solutions to address requirements related to weight optimisation, durability, safety, and aesthetics for modern rail and metro systems.

During the year, the Company continued its efforts towards strengthening its capabilities as an integrated solution provider, with an increased focus on higher value-added assemblies and system-level supplies, in addition to standalone component manufacturing.

The Company Strives for excellence in quality and holds various certifications as below: •

• Process standards Certificates

- EN 15085 CL-1 - Welding Process for Railway - TUV Nord

- EN 17460 CL A3 - Adhesive Bonding - TBBCert (Germany)

The Company has been qualified as welder as per American Welding Society (AWS). This is the prerequisite of our export customers in the USA.

• Product approval and certificates

- RDSO - For Metal to Metal relays, Metal to Carbon relays, LED Signal, Fuse Automatic Changeover System (FACS)

- IP 65 & 55 - Standard Enclosure designed by Integra

- CE Marking - Standard Enclosure designed by Integra

• Management standards of quality, environment and safety

- ISO 9001:2015 - Quality Standard - TUV Nord

- ISO 14001:2015 - Environmental Management - TUV Nord

- ISO 45001:2018 - Health and Safety Management - TUV Nord

RAILWAY INDUSTRY TREND

The global railway industry is undergoing a major transformation driven by sustainability, digitalization, urbanization, and modernization of transport infrastructure. Key trends shaping the railway sector in 2026 and beyond include:

• Green Mobility Transition: Rail is solidifying its position as the primary sustainable transport mode due to its low emissions compared to aviation and road transport. Europe is leading this shift by heavily investing in hydrogen-powered trains and green corridors.

• Smart Infrastructure & Digitalization: Operators worldwide are adopting cloud-based systems and digital signaling standards like ERTMS and ETCS. Infrastructure management is becoming highly data-driven through the use of IoT-enabled rolling stock and digital twins.

• AI-Driven Maintenance: The industry is shifting its focus from initial purchase prices to the Total Cost of Ownership (TCO). Operators use artificial intelligence for predictive maintenance and real-time monitoring to extend fleet lifecycles and reduce long-term operational costs.

• Network & Fleet Modernization: Countries are aggressively expanding high-speed rail networks to displace short-haul flights and road congestion. Concurrently, aging fleets are being replaced with energy-efficient, lightweight trains that feature smart diagnostics, fire-resistant interiors, and enhanced passenger comfort.

• Urban Transit Boom: Driven by rapid population growth in cities, the Asia-Pacific region is experiencing the worlds fastest expansion in metro and urban transit systems, backed by heavy government investments.

Indian Railway Rolling Stock Market Outlook: 2026-2036

The Indian railway market is entering its largest modernization and expansion cycle since independence. Between 2026 and 2036, India is expected to become one of the worlds fastest-growing railway rolling stock and rail infrastructure markets, driven by:

• Massive government capital expenditure (Capex)

• Indigenous manufacturing ("Make in India")

• Rapid expansion of Vande Bharat and semi-high-speed trains

• Significant growth in metro rail projects across Tier 2 cities

• Increased focus on rail electrification and green mobility

• Rising export opportunities for Indian manufacturers

• Adoption of automation and digital manufacturing technologies

• Shift towards modular and lightweight designs

Indian Railways is increasingly transforming from a traditional transportation network into a modern mobility and logistics ecosystem.

• Market Size & Investment Outlook

Indian Railways continues to receive record capital expenditure allocation from the Government of India.

Railway Capex Growth

Financial	Year Approx. Capex Allocation
FY23	Rs.2.04 Lakh Crore
FY24	Rs.2.60 Lakh Crore
FY25	Rs.2.65 Lakh Crore
FY26	Rs.2.93 Lakh Crore

The Union Budget 2026-27 allocated the highest-ever railway capex of approximately Rs.2.93 lakh crore.

Source: https://indianexpress.com/article/india/railway-budget-

2026-safety-rolling-stock-new-lines-doubling-gauge-conversion- electrification-capex-allocation-10507986

Locomotive Manufacturing Growth in India

	Total Locomotives	Average Annual
Period	Produced	Production
2004-2014	4,695	470/year
2014-2024	9,168	917/year
FY24-25	1,681	Record Production
FY26 Target	1,826	Further Growth Expected

These developments present strong long-term growth opportunities for the Company.

KEY DEVELOPMENTS DURING THE YEAR

During FY 2025-26, the Company achieved significant operational and strategic milestones:

• Strengthened relationships with key OEM customers and expanded scope in existing projects

• Increased contribution in metro interior and rolling stock segments

• Continued growth in export business, supplying fabricated and assembled components

• Improvement in production efficiency through process optimization and capacity enhancement

• Progress in infrastructure expansion including additional production facilities

• Continued investment in new machinery and automation initiatives

• Advancement in sustainability initiatives including renewable energy usage and carbon footprint tracking

The Company remains focused on improving operational efficiency and expanding its product portfolio.

OPPORTUNITIES & THREATS Opportunities

• Expansion in Vande Bharat train ecosystem

• Growth in metro rail interior segment

• Increasing demand for localized manufacturing

• Export opportunities to Europe and other global markets

• Transition towards integrated system supply

Threats

• Dependence on OEM customers and project-based demand

• Pressure on margins due to competitive pricing

• Availability of skilled manpower

• Supply chain disruptions and raw material price fluctuations OUTLOOK

The outlook for the Company remains positive, supported by strong demand in the railway and metro segments.

The Company aims to:

• Expand its presence in rolling stock and metro projects with various OEMs

• Increase share in export markets

• Enhance capabilities in system integration and assemblies

• Build design and development capabilities inhouse and with partnerships

• Improve operational efficiency through automation and digitalization

• Maximize utilization of newly added capacities

With a robust order pipeline and ongoing infrastructure investments in the railway sector, the Company expects steady and sustainable growth in the coming years.

We set out below risk that is most material to our business and performance according to current market situation. We explain mitigation strategies which help us to manage this risk.

RISKS & CONCERNS

We set out below risk that is most material to our business and performance according to current market situation. We explain mitigation strategies which help us to manage this risk.

Risk	Mitigation Strategy
Dependency on Rolling stock market: A sudden drop in demand of public transport solution can significantly impact the turnover and profitability of the company.	We are focusing on domestic and well as export markets to be able to accommodate shifts in regional demand. Furthermore, the machinery of the company is not segment specific and can be used for contract manufacturing for other industries as well.
Raw Material Price Volatility: Volatility in prices of raw materials can impact margins.	We have raw material (sheet metal) price variance clauses with most of our customers. The mechanism of price variance clauses and terms of price revision is transparent and easy to execute.
Manpower availability: Production planning and schedules vary with labour fluctuation which impacts on time delivery of the projects.	We are reasonably managing the mix of permanent labour and manpower.
	We are hiring the manpower from ITI and giving welding training. We have established a welding training center.
	We are continuously inspiring all our employees to take training on various matters and improving their skills.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control systems over financial reporting ensuring the accuracy of the accounting systems and related financial reporting. The internal control system adheres to local statutory requirements for orderly and efficient conduct of business. The efficacy of the internal checks and control system are validated by internal as well as statutory auditors. The Audit Committee reviews the adequacy and effectiveness of the internal control system, significant audit observations and monitors the sustainability of remedial measures.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

With a total workforce of over 900 employees—including staff, permanent employees, and contract workers—the primary objective of the Human Resources function is employee development. The Company firmly believes that its human capital is the most valuable asset in driving business success and profitability.

To support this, the Company has fostered a culture of continuous learning and development across all levels. New employees undergo an induction training program, conducted by departmental heads, which provides a comprehensive overview of the Companys operations, processes, strategic direction, and growth objectives.

Regular training sessions—both in-house and external—are organized for employees at all levels. Additionally, the Company has established a dedicated Welding Training Center to develop skilled welders and provide ongoing upskilling opportunities for the existing workforce.

The Company also places strong emphasis on employee motivation and engagement. Various initiatives are conducted periodically, including festival and birthday celebrations, sports events, and internal competitions, to foster a positive and collaborative work environment.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The Company has achieved a turnover of Rs. 16,871 lakhs for the financial year 2025-26 against the turnover of Rs. 16,586 lakhs for the previous financial year 2024-25. Further, the Company attained profit after tax of Rs. 1,542 lakhs in the FY 2025-26 compared to Rs. 1,849 lakhs for the previous financial year 2024-25.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Sr. No	List of Ratios	Standalone		Consolidated		% of Variance	Explanation (If change in more than 25%)
		2025-26	2024-25	2025-26	2024-25
1	Operating Profit Margin Ratio (%)	14.57%	17.28%	14.57%	17.28%	-15.70%	-
2	Net Profit Margin Ratio (%)	9.14%	11.15%	9.14%	11.15%	-17.99%	-
3	Return on Net worth (%)	14.94%	21.48%	14.94%	21.48%	-30.44%	Due to Reduction of Profit after tax
4	Interest Coverage Ratio	9.05	12.65	9.05	12.65	-28.43%	Due to Reduction of Profit before tax
5	Debt Equity Ratio	0.20	0.41	0.20	0.41	-51.63%	Due to increase in debt levels for expansion
6	Current Ratio	2.41	1.68	2.41	1.68	45.45%	Due to reduction of borrowings
7	Debtors Turnover Ratio	3.80	3.71	3.80	3.71	2.51%	-
8	Inventory Turnover Ratio	4.17	4.64	4.17	4.64	-10.20%	-