KP Green Engineering Ltd Management Discussions

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ECONOMIC OVERVIEW

Global economy

The global economy in 2026 is navigating the crosscurrents of war and technology. As per the latest global outlook assessments published in mid-2026, world growth is projected to slow to about 2.5-3.0% in 2026, one of the weakest outcomes since the pandemic, before recovering modestly through 2027. Two opposing forces are shaping activity: the negative supply shock from the conflict in the Middle East, which has kept energy prices roughly 25% above prewar levels, with crude oil averaging about USD 89 per barrel in 2026, and the positive momentum of the global technology cycle, driven by advances in artificial intelligence and the investment surge accompanying its adoption. The impact varies widely across countries, depending on exposure to the conflict and position in the technology value chain, with energy importers outside the technology cycle facing the sharpest slowdown. Activity in the first quarter of 2026 nonetheless proved stronger than expected, aided by resilient technology-linked economies and the declining energy intensity of output.

Global headline inflation is expected to rise from 4.1% in 2025 to 4.7% in 2026, before easing to 3.9% in 2027, indicating that the disinflation trend in place since early 2024 has stalled on higher energy and food prices. World trade volume growth is projected to slow sharply, to about 2.9-3.5% in 2026 from about 4.8-5.0% in 2025, reflecting earlier front-loading of shipments, the drag from tariffs, and the gradual adjustment of supply chains. Advanced economies are projected to grow by about 1.7% in 2026, with the United States at 2.3%, while the Euro Area, Japan, and the United Kingdom face subdued prospects owing to higher energy prices and weak momentum. Emerging market and developing economies are forecast to grow 3.8% in 2026 before recovering to 4.5% in 2027, with China slowing to 4.6% and India remaining the fastest-growing major economy.

Risks to the outlook remain tilted to the downside. Renewed conflict in the Middle East could extend commodity price volatility and disrupt supply chains, while trade fragmentation and a possible correction in technology-driven expectations could weigh on financial markets. Upside potential stems from a faster normalization of energy markets, stronger technology investment, and durable cooperation that lowers trade barriers. Notably, the rising share of renewable energy in generation and the declining energy intensity of output have made economies more resilient to energy price shocks than in earlier episodes, and the build-out of energy and digital infrastructure has emerged as a defining investment theme of the decade. For 2027, global growth is expected to recover to about 2.8-3.4% as the energy shock fades.

Source: IMF World Economic Outlook Update (July 2026), World Bank Global Economic Prospects (June 2026)

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INDIAN ECONOMY

India retains its position as the fastest-growing major economy in a global environment shaped by conflict, elevated energy prices, and technology-led divergence. As per the latest global outlook assessments published in mid-2026, Indias real GDP grew by an estimated 7.7% in FY26, among the strongest expansions recorded by any large economy during the year, following growth of 7.1% in FY25. Growth is projected in the range of 6.4-6.6% for FY27 and 6.7-7.2% for FY28, supported by strong momentum in private consumption and services activity. On a calendar-year basis, growth is projected at 7.0% for 2026 and 6.4% for 2027. This trajectory stands well above the 3.8% average projected for emerging market and developing economies in 2026 and Chinas projected 4.6%, underscoring the breadth of Indias domestic demand engine.

Forecast revisions through the year have also favoured India. The June 2026 round of global projections raised Indias growth forecasts for FY27 and FY28 by 0.1 and 0.6 percentage points respectively over the January 2026 round, even as projections for most large economies were lowered, a clear signal of relative resilience. This came against a backdrop in which global activity is expected to firm through 2027-28 as energy supplies recover, monetary easing resumes, and trade strengths, conditions under which Indias growth is projected to accelerate further. South Asia, anchored by India, is projected to remain the fastest-growing developing region, with regional growth of 6.3% in 2026 and 6.9% in 2027, and emerging and developing Asia, led by India, is expected to continue outpacing every other region over the forecast horizon.

Indias macroeconomic position nonetheless warrants careful navigation of the current commodity cycle. As a large importer of crude oil and natural gas, India is exposed to the elevated energy prices resulting from the war coupled with terms-of-trade deterioration across oil-importing Asian economies has worsened inflation outlooks and placed pressure on exchange rates. As a result, global headline inflation is expected to rise in 2026 before easing through 2027, and elevated geopolitical uncertainty and commodity price volatility could affect external demand and investment flows into emerging markets. At the same time, the rising share of renewable energy in generation and the declining energy intensity of output have made economies more resilient to energy price shocks than in earlier episodes. Two features of this cycle stand out for domestic industry. Public capital expenditure remains the backbone of demand, with the Union Budget for FY27 raising capital output to a record 12.2 lakh crore, while manufacturing-led import substitution continues to broaden across sectors.

In conclusion, India enters FY27 with strong momentum and improving visibility. With growth of 6.4-6.6% projected for FY27, rising toward 6.7-7.2% in FY28, India is expected to remain the principal engine of global growth. Growth of this order, sustained over multiple years, implies a steady deepening of demand for power, logistics, connectivity, and construction. The medium-term picture remains structurally powerful: the aspiration of a developed economy by 2047 implies sustained expansion in manufacturing, urbanisation, infrastructure, and per capita energy consumption. Rapidly rising electricity demand, record public infrastructure outlays, and the national priority of energy security directly underpin the multi-year demand cycle for engineered steel infrastructure discussed in the sections that follow.

Source: IMF World Economic Outlook (July 2026), World Bank Global Economic Prospects (June 2026), Union Budget 2026-27 (PIB)

INDUSTRY OVERVIEW

Indias green energy infrastructure

Indias green energy infrastructure Indias renewable energy infrastructure market is entering a phase of rapid, policy-backed expansion. The market is expanding, driven by supportive government policies, increasing investments, technological advancements, and a growing focus on sustainability and energy security. The underlying build-out is far larger than the equipment market alone. Record renewable capacity addition of 55.3 GW in FY26, and the projected near-doubling of Indias installed power capacity to 1,121 GW by FY36, translate directly into sustained demand for the physical backbone of the transition, from module mounting structures and wind towers to substations, storage systems, and evacuation infrastructure.

The policy framework anchoring this market is comprehensive. Indias updated national commitments target 500 GW of non-fossil capacity by 2030, 50% of energy requirements from renewable sources, a 45% reduction in the carbon intensity of the economy by 2030, and net-zero emissions by 2070. The National Green Hydrogen Mission, with an outlay of 19,744 crore, targets 5 Million tonnes of annual production by 2030 and is expected to catalyse over 18 lakh crore of investments while creating about 6 lakh jobs. Distributed energy is scaling equally fast, with the PM Surya Ghar. Mufi Bijli Yojana crossing 34.3 lakh rooftop installations against its target of 1 crore households. The Green Energy Corridor continues to strengthen grid infrastructure, with about 787 crore released during FY26, and public-private partnerships are drawing domestic and international capital into solar parks, wind farms, hybrid projects, and energy storage systems.

Challenges remain, including the financial health of distribution companies, high import dependence for critical minerals, grid integration of variable generation, and land availability for large projects. Even so, the convergence of policy support, private investment, and technological innovation positions Indias green energy infrastructure market for a decade of sustained growth, and manufacturers of engineered, corrosion-protected steel structures sit at the centre of this value chain.

Source: IMARC Group, MNRE & PIB, CEA Generation Adequacy Plan 2035-36

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INDIAS INFRASTRUCTURE BUILD-OUT

India is in the midst of a record public infrastructure investment cycle. The Union Budget for FY27 raised capital expenditure to 12.2 lakh crore, and annual infrastructure investment has risen from about 1.7 lakh crore in FY16 to over 11 lakh crore. The National Infrastructure Pipeline now spans more than 9,100 projects across 34 sub-sectors with an estimated investment of about USD 1.9 trillion, and India is estimated to spend nearly 143 lakh crore on infrastructure over the seven fiscal years through 2030. This build-out spans the very sectors the Company supplies.

Railways

Indian Railways received a record capital outlay of 2,93,030 crore in the Union Budget 2026-27, with nearly 1.20 lakh crore earmarked for safety-related works. About 99.2% of the broad gauge network stands electrified, 164 Vande Bharat services are operational, and 1,337 stations are being redeveloped under the Amrit Bharat Station Scheme. During 2025, Indian Railways completed 1,161 road over-bridges and under-bridges, commissioned the Kavach 4.0 train protection system over 738 route kilometres, and announced a new 2,052 km Dankuni-Surat freight corridor alongside seven high-speed rail corridors spanning nearly 4,000 km. Each of these programmes consumes significant fabricated and galvanized structures, from bridges, foot over-bridges, and electrification masts to Kavach and signalling towers.

Roads and highways

The national highway network has expanded about 61% since 2014 to 1,46,560 km, with high-speed corridors growing from 93 km to 3,052 km and four-lane-plus highways more than doubling to 4,532 km. Construction touched 10,660 km in FY25, and works on about 28,000 km costing about 7.70 lakh crore are under implementation. Road safety programmes and expressway construction are driving sustained demand for crash barriers, gantries, and lighting structures.

Telecommunications and digital infrastructure

5G services now cover 99.9% of districts, supported by 5.08 lakh 5G base stations and 8.43 lakh mobile towers. The amended BharatNet programme, with an outlay of 1.39 lakh crore, targets broadband connectivity across 2.65 lakh gram panchayats, while the rapid growth of data centres is creating a new market for pre-engineered and data centre buildings, towers, and cable infrastructure.

Power transmission and distribution

The National Electricity Plan (Transmission) envisages an investment of 9.16 lakh crore by 2032 to serve a peak demand of 458 GW, expanding the transmission network from about 4.98 lakh circuit kilometres to 6.48 lakh circuit kilometres and transformation capacity from 1,398 GVA to 2,345 GVA. During 2025 alone, 25.8 GW of renewable-linked inter-state transmission projects costing 38,849 crore were approved. Transmission line towers, monopoles, and substation structures are among the most direct beneficiaries of this programme.

The convergence of these programmes, spanning rail, road, telecom, power, and urban infrastructure, creates a broad, multi-year demand base for engineered, galvanised steel structures across India.

HOT-DIP GALVANISED STEEL MARKET

Overview

The global hot-dip galvanised steel market continues to expand steadily on the back of demand for durable, corrosion-resistant steel. The market has grown from USD 52.03 billion in 2025 to an estimated USD 55.64 billion in 2026, a growth of 6.9% and is projected to reach USD 71.95 billion by 2030, growing at a CAGR of 6.6% over the forecast period. India provides a particularly strong backdrop for this market: the country is the worlds second-largest producer of crude steel, with production rising 10.7% to 168.4 Million tonnes in FY26 and finished steel consumption growing 7.6% to 163.7 Million tonnes. Installed steelmaking capacity of about 220 Million tonnes is targeted to reach 300 Million tonnes by 2030-31 under the National Steel Policy, anchoring the raw material base for downstream fabrication and galvanizing.

Market Drivers

Infrastructure Growth and Urbanisation

Strong performance in new infrastructure development and urbanisation projects is a key market driver. With public capital expenditure at a record 12.2 lakh crore for FY 2026-27, investment in transportation networks, urban renewal, and public infrastructure is fuelling demand for hot-dip galvanised steel in bridges, road barriers, transmission towers, and building structures.

Dominance of the Construction Sector

The construction industry remains the largest consumer of hot-dip galvanised steel. The materials protective zinc coating resists corrosion, making it ideal for structural steel in buildings, roofing, pre-engineered buildings, and exterior applications exposed to the elements.

Renewable Energy Expansion

The renewable energy sector increasingly uses hot-dip galvanised steel in solar module mounting structures and trackers, wind turbine towers, and transmission infrastructure. With India adding a record 55.3 GW of non-fossil capacity in FY26, and service life often exceeding 25 years, galvanized structures are the default choice for outdoor installations in harsh environments.

Railways, Telecom and Transport Upgrades

Railway electrification and station development, highway safety programmes, and telecom densification are creating a fast-growing, India-specific demand pool for galvanized structures, reinforced by programmes such as Kavach and BharatNet.

Key Trends

The introduction of advanced coatings, including zinc-aluminium-magnesium variants, enhances performance and extends lifespan in coastal and industrial environments.

Automation, smart manufacturing, and Industry 4.0 technologies are improving galvanising efficiency, reducing waste, and optimising quality control.

Sustainability is reshaping the industry: encapsulated galvanizing processes, zero liquid discharge, zinc recovery, and the use of green fuels for kettle heating are becoming markers of responsible manufacturing, aided by steels high recyclability.

New applications are emerging in modular and prefabricated construction, data centres, 5G infrastructure, and transportation upgrades, where durable steel components are crucial.

The market is set to expand steadily through the decade, supported by sustained infrastructure investment, urban development, renewable energy adoption, and technology-driven process improvements.

Source: The Business Research Company, Hot-dip Galvanized Steel Global Market Report 2026, Ministry of Steel & PIB

COMPANY OVERVIEW

KP Green Engineering Limited, formerly known as K P Buildcon Private Limited, is one of the oldest entities of the KP Group, founded by Dr. Faruk G. Patel. Incorporated in 2001, the Company has its roots in the KP Groups legacy dating back to 1994. Beginning with hot-dip galvanised fabrication of steel products, KP Green Engineering has evolved into a one-stop solution provider serving the renewable energy and infrastructure sectors. Its diversified operations today span fabrication, galvanisation, renewables, power and transmission, telecommunications, railways, roads and highways, urban and rural infrastructure, and engineering infrastructure.

The Company operates state-of-the-art manufacturing facilities at Dabhasa and Matar, with total installed capacity of 4,00,500 MT per annum, comprising 3,10,500 MTPA of fabrication and 90,000 MTPA of galvanizing. The Matar facility, spread over about 55 acres, houses Asias largest galvanizing kettle, now operational, and deploys high-speed CNC machinery, laser and plasma precision cutting, and robotic welding. Its portfolio of 23 engineered products serves every major infrastructure vertical:

Renewables

module mounting structures in fixed-tilt and solar tracker designs, torque tubes, and windmill lattice towers

Roads and highways:

metal beam crash barriers (NATRAX-validated), high masts, and lighting poles

Transportation lines towers, monopoles, pooling substation structures, cable trays, and earthing materials

Pioneering an end-to-end approach, the Company manages every stage from engineering and design to fabrication, galvanisation, and deployment under one roof. KP Green Engineering is an ISO certified company with an in-house quality control laboratory, and its Matar galvanizing operations follow a 100% encapsulated process with zero liquid discharge and zinc recovery, alongside a planned transition to green hydrogen for kettle heating, targeting net-zero fabrication. The Company serves customers across 17+ states and international markets, and is empanelled with marquee institutions:

[Image: Logos of GETCO, PSTCL, CAPTCL, BSNL, GDC, RDSo, etc.]

FY26 PERFORMANCE DISCUSSION

During the year, the Company delivered record growth, with consolidated Total Income rising by 78% to C1,250 crore from C702 crore in the previous year. EBITDA more than doubled, increasing 117% to C249 crore, with the EBITDA margin expanding from 16% to 20%, reflecting operating leverage from the higher throughput from the newly commissioned Matar facility. Profit After Tax rose 85% to a record C136 crore, while Earnings Per Share increased 85% to C27.1 from C14.7 in FY25. The Company closed the year with an order book of C1,831 crore, providing strong revenue visibility. These milestones reflect strong market traction and disciplined execution.

FINANCIAL RATIOS

Details of significant changes (i.e., a change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios, along with detailed explanations therefor, include:

Particulars	FY26	FY25 *	YoY Change	Comments
Debtors Turnover (Days)	85.88	104.96	-18.17%	Since the variance in the ratio is less than 25%, reasons for change is not given.
Inventory Turnover (Times)	3.04	5.72	-46.74%	Decrease in Inventory Turnover Ratio is due to increase in the cost of good sold and average inventory in the current year as compared to the last year.
Interest Coverage Ratio	5.44	12.43	-56.20%	Decrease is due to the fact that there is significant increase in finance cost during the period as compared to last year.
Current Ratio (Times)	0.94	1.24	-24.53%	Since the variance in the ratio is less than 25%, reasons for change is not given.
Debt to Equity Ratio (Times)	0.10	0.05	96.61%	Debt Equity ratio is increased due to the increase in debt in the current year as compared to last year.
Operating Profit Margin (%)	18.12%	15.95%	13.56%	Since the variance in the ratio is less than 25%, reasons for change is not given.
Net Profit Margin (%)	10.86%	10.47%	3.73%	Since the variance in the ratio is less than 25%, reasons for change is not given.
Return on Equity (%)	34.73%	24.90%	39.49%	Return on equity ratio is increased due to increase in net profit in current year as compared to last year

OUTLOOK

KP Green Engineering is well-positioned for sustained growth, driven by rising demand for its products across both the renewable energy and infrastructure sectors. Its portfolio is aligned to Indias 500 GW non-fossil capacity target and the projected doubling of installed power capacity by FY36. Beyond renewables, record public sector outlays on railways, roads and highways, telecommunications, and power transmission continue to expand the infrastructure demand pool, supported by both public and private investment.

The Company enters FY27 with its transformational capacity expansion fully complete. Total manufacturing capacity has risen from 1,42,500 MT per annum to 4,00,500 MT per annum, post the CAPEX-cycle. An order book of C1,831 crore as on March 31, 2026 provides strong revenue visibility into the coming year, and new product lines under development, entry into the EPC segment, and products for adjacent applications open substantial opportunities, while expansion into new states and international markets widens the addressable base.

The Companys strategic roadmap focuses on operational excellence, ESG-aligned manufacturing, higher capacity utilisation, and innovative product development, with the goal of delivering sustained long-term growth and value creation. With a strong focus on efficiency, profitability, and customer satisfaction, KP Green Engineering is firmly on track to build on its record financial performance in the years ahead.

INTERNAL CONTROL AND ADEQUACY

We have established a comprehensive internal control framework that safeguards the Companys assets against unauthorised use or disposal, while ensuring that all transactions are properly authorised, documented, and reported. Measures are in place to optimise resource utilisation, improve operational efficiency, closely monitor activities, and ensure adherence to all applicable laws and regulations. The effectiveness and adequacy of these internal control systems have been independently validated by the auditors. To strengthen governance and decision-making, the Company engages external consultants with diverse professional expertise across administrative and business functions, providing access to current industry insights and best practices. Internal auditors, reporting independently to the Audit Committee and the Board of Directors, provide an additional layer of transparency, objectivity, and accountability, and the framework is reviewed periodically and strengthened in line with the growing scale of operations.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS

Our Founder and Promoter, Dr. Faruk G. Patel, champions a Human-First philosophy in all business decisions, firmly believing that people are central to organisational growth and long-term sustainability. As on March 31, 2026, KP Green Engineering has 432 employees. Guided by this vision, we place strong emphasis on enhancing the expertise, skills, and knowledge of our team through dynamic human resource policies, structured onboarding, and continuous professional development delivered through internal and external training platforms. A notable initiative during the year was a safety-preparedness training programme at Matar, organised jointly by KP Group, the Ministry of New and Renewable Energy, and the Skill India Mission, alongside our ongoing effort to make our less-educated workforce technology-enabled. Our commitment extends to the overall well-being and safety of our people, anchored in our pledge of Zero Accidents. An Occupational Health and Safety management system defines standard operating procedures for high-risk jobs and makes protective equipment mandatory for employees and visitors, while emergency evacuation drills and a Centre of Excellence for process safety complete the framework. A dedicated Environment, Health, and Safety function oversees risk mitigation, accident prevention, and the cultivation of a safety-focused culture across the organisation.

RISKS, CONCERNS & RISK MITIGATION

Our Company faces a range of regulatory, environmental, and business risks in its operations, and we remain committed to proactively identifying, preventing, and mitigating these risks to minimise their potential impact on our performance.

Safety Risk

Compliance with stringent safety laws and regulations governing our manufacturing facilities is of paramount importance. Any lapse could disrupt business continuity and affect our reputation. The Company mitigates this through its Zero Accidents framework, covering OH&S systems, mandatory PPE, emergency preparedness drills, and a process safety Centre of Excellence.

Regulatory Risk

Our operations are governed by multiple statutes, including environmental laws, climate change regulations, trade measures, competition laws, and tax requirements. Non-compliance could affect operational performance and reputation. Given the dynamic regulatory landscape, we maintain robust compliance mechanisms to respond effectively to changes in existing laws and the introduction of new regulations.

Credit and Currency Risk

Volatility in financial markets and fluctuations in interest rates can influence our debt servicing capabilities. As the Company expands in export markets, currency risk may arise on account of growing export-mix in the top line.

Supply Chain Risk

Our supply chain network may be exposed to physical and environmental damage, trade restrictions arising from geopolitical tensions, and supply disruptions. Reliance on infrastructure development and outsourced partners can heighten the potential for operational interruptions; supplier diversification and inventory planning are used to limit this exposure.

Commodity Price Risk

The Companys performance is closely linked to commodity price movements, particularly in steel and zinc. Shifts in demand-supply dynamics, both domestic and international, can affect margins. To mitigate this, we adopt a back-to-back risk coverage strategy for commodity prices and incorporate commercial escalation clauses in customer contracts wherever feasible.

Capacity Utilisation and Ramp-Up Risk

With the Matar facility commissioned and total capacity expanded to 4,00,500 MTPA, the focus shifts to timely ramp-up and utilisation. Slower-than-expected order conversion, delays in customer project schedules, or technical teething issues could affect asset productivity. In this regard, a strong order book, PSU empanelments, and product diversification mitigate this risk.

Human Resource Risk

Expansion and execution of large projects require skilled personnel and effective management. Inability to attract, retain, or effectively deploy qualified staff, labour disruptions, or management gaps may impact project execution and growth. Structured training, including partnerships with government skilling missions, supports workforce readiness.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis and other parts of the report describing the Companys objectives, projections, estimates and expectations may be forward-looking statements. Actual results may differ materially from those expressed or implied due to various risks and uncertainties. Important factors that could make a difference to the Companys operations include economic and political conditions in India and other countries, in which the Company may operate. Other factors that may impact the Companys operations include volatility in interest rates, changes in government regulations and policies, tax laws, statutes, and other incidental factors. The Company does not intend to update these statements.