KCL Infra Projects Ltd Management Discussions

31st Annual Report • Financial Year 2025–26

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Indias economic growth during FY 2025-26 remained resilient, with real GDP provisionally estimated to have grown by 7.7%, as compared with 7.1% in FY 2024-25. Real GVA is estimated to have grown by 7.9% during FY 2025-26, reflecting continued economic activity across key sectors.

Infrastructure remains an important contributor to Indias economic development, supporting connectivity, logistics efficiency and the movement of goods and people. Continued investment in infrastructure, together with increasing urbanisation and evolving infrastructure requirements, is expected to support long-term growth across the sector.

The Government of India continues to promote infrastructure-led development through initiatives such as the National Infrastructure Pipeline, Make in India, Production Linked Incentive schemes and PM Gati Shakti. The PM Gati Shakti National Master Plan seeks to facilitate integrated infrastructure planning and multimodal connectivity. As of February 2026, 352 infrastructure projects with a total estimated cost of Rs16.10 lakh crore had been evaluated through the Network Planning Group mechanism under PM Gati Shakti, of which 201 projects had been sanctioned and 167 were under implementation.

The Governments focus on infrastructure investment is also reflected in the Union Budget 2025-26, wherein total capital expenditure was budgeted at Rs11.21 lakh crore, while effective capital expenditure was budgeted at Rs15.48 lakh crore.

Alongside physical infrastructure development, initiatives relating to smart cities, urban mobility, housing, water and sanitation are contributing to the development of technology-enabled urban infrastructure. The infrastructure sector encompasses diverse activities including roads, bridges, urban infrastructure, construction, transportation, logistics and other built infrastructure.

Against this backdrop, developments in urban infrastructure, mechanized car parking and technology-enabled parking solutions remain particularly relevant to the Companys business and may provide opportunities arising from the increasing need for efficient utilisation of urban space.

BUSINESS OVERVIEW AND PERFORMANCE:

During the financial year ended 31st March, 2026, the Company continued to focus on its business activities in the infrastructure and remained focused on strengthening its operational capabilities and identifying suitable business opportunities.

During FY 2025-26, the Companys performance was influenced by its business operations, project execution, prevailing market conditions and the overall environment in the infrastructure sector.

SEGMENT-WISE / PRODUCT-WISE PERFORMANCE:

The Company operates primarily in the civil and infrastructure works does not have separate reportable business or product segments for the purpose of segment-wise reporting.

Accordingly, the Companys operational performance is assessed on an overall business basis and separate segment-wise or product-wise performance is not presented.

During the year under review, the Companys performance was primarily influenced by project execution, order opportunities, prevailing market conditions, competition, input costs and other factors affecting the infrastructure and mechanized car parking industry.

OPPORTUNITIES:

The continued development of civil construction and infrastructure, coupled with increasing urbanisation and investment in physical infrastructure, presents opportunities across the sector. Government initiatives and increasing focus on connectivity, urban development and modern infrastructure are expected to support demand for infrastructure-related services.

Mechanized car parking systems also present an emerging opportunity, particularly in urban areas where increasing vehicle density and limited availability of land create a need for efficient parking solutions.

The Company remains focused on evaluating suitable opportunities across the civil construction, infrastructure and related sectors, while leveraging its capabilities and project execution experience to support sustainable growth.

THREATS:

The infrastructure and construction industry is competitive and is characterised by participation from a large number of players. The tendering and project-award process may therefore remain competitive and may affect order acquisition and project margins.

Project execution may also be affected by delays arising from coordination among government authorities, clients, contractors and other stakeholders.

The industry involves significant project costs and working-capital requirements. Availability and cost of funds, fluctuations in the prices of key inputs and changes in project timelines may affect project execution and profitability.

The Company also remains exposed to competitive pressures, regulatory developments and changes in market conditions, which may affect business opportunities and operating performance.

RISK AND CONCERNS:

Risk is an inherent part of any business, including the infrastructure and construction industry. The Company is exposed to various risks associated with its business operations, including contractual and project execution risks, availability of skilled manpower, funding requirements, regulatory changes, fluctuations in input costs, competitive intensity and other operational and business risks.

The Company recognises that effective identification, assessment and mitigation of risks are essential for achieving its business objectives. Accordingly, the Company has established a Risk Management Policy and framework to identify, evaluate, monitor and manage significant risks in a structured manner. The identified risks are periodically reviewed and appropriate mitigation measures are undertaken to minimise their potential impact on the Companys operations and financial performance.

The Company continues to monitor the changing business environment and evaluates emerging risks on an ongoing basis, taking appropriate measures to address and mitigate their potential impact on the Companys business and operations.

OUTLOOK:

The Company remains focused on strengthening and expanding its presence in the infrastructure sector, with particular emphasis on mechanized car parking and technology-enabled infrastructure solutions, including opportunities arising from smart-city and urban infrastructure development.

The continued focus of the Government on infrastructure development, urbanisation, smart-city initiatives and technology-enabled infrastructure is expected to provide opportunities for the growth and development of mechanized car parking and related infrastructure solutions.

The Company will continue to focus on efficient project execution, prudent financial management, technology adoption and development of its business opportunities while remaining responsive to changing market conditions.

The Company has also diversified its business objectives to include opportunities in the healthcare sector and will evaluate such opportunities in line with its strategic priorities and overall business objectives.

INTERNAL CONTROL MECHANISM:

The Company has adequate internal control systems commensurate with the size, nature and complexity of its operations. The internal control framework is designed to ensure that the Companys assets and resources are adequately safeguarded, operations are conducted efficiently and applicable internal policies and statutory requirements are complied with.

The Internal Auditor periodically reviews significant areas of the Companys operations and submits reports to the Audit Committee for its review and consideration.

Significant audit observations and recommendations are appropriately followed up and corrective measures are undertaken wherever considered necessary.

The Audit Committee reviews the adequacy and effectiveness of the Companys internal control systems and monitors the implementation of audit recommendations.

The Companys internal control systems are also subject to review by the Statutory Auditor as part of the statutory audit in accordance with applicable laws and auditing standards.

HUMAN RESOURCE DEVELOPMENT:

The Company recognises its human resources as an important contributor to its growth and competitiveness. The Companys human resource practices and people-development initiatives are focused on attracting, developing and retaining appropriate talent for key roles.

The Company continues to focus on developing a performance-oriented culture through appropriate recruitment, performance management, employee development, reward and recognition and opportunities for professional growth.

Key personnel are evaluated against organisational and functional objectives, with emphasis on aligning individual responsibilities with the Companys overall business priorities.

The Company also engages with external professionals and specialists, wherever required, to support its business and operational requirements.

CAUTIONARY STATEMENTS:

The above Management Discussion and Analysis contain certain forward-looking statements within the meaning of applicable securities laws and regulations. These statements relate to the Companys future business prospects, plans, expectations and performance and are subject to various risks, uncertainties and assumptions. Actual results may differ materially from those expressed or implied in such forward-looking statements.

The risks and uncertainties relating to such statements include, among others, changes in economic conditions, competitive intensity, regulatory developments, government policies and actions, project execution, time and cost overruns, availability and cost of resources, fluctuations in input costs, availability of finance, the Companys ability to manage growth and attract and retain skilled personnel, as well as other factors that may affect the Companys business, operations and financial performance.

The information and data relating to the industry and external economic environment contained in this Report have been derived from sources considered reliable by the Company. However, the Company does not make any representation or warranty as to the accuracy, completeness or reliability of such external information and data.

The Company does not undertake any obligation to publicly update, revise or otherwise modify any forward-looking statements contained herein to reflect subsequent events, developments or circumstances, except as may be required under applicable laws and regulations.