Kridhan Infra Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

OVERVIEW

The objective of this report is to convey the Managements perspective on the external environment and infrastructure industry, as well as strategy, operating and financial performance, risks and opportunities and internal control systems and their adequacy in the Company during FY2025-26. This should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in this Annual Report 2025-26. The Companys financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (SEBI) from time to time.

The Company has been facing some hurdles over the last few years due to liquidity mis-match. During the year under review, the Company continued to strengthen its financial position, supported by improved operating performance, a preferential allotment of equity/warrants and a reduction in current borrowings. Despite the uncertainties and challenges faced by the Company, the management remains optimistic of a resolution with its financial creditors and continues to work towards regaining its position going forward, backed by strong fundamentals like product development, technology, manpower, quality, relationship etc.

GLOBAL ECONOMIC OVERVIEW:

Global GDP growth is estimated at approximately 3.2%-3.3% for 2026, broadly steady compared with 2025, supported by continued technology investment, accommodative financial conditions, fiscal support in several major economies and the private sectors ability to adapt to evolving trade policies. Growth for 2027 is projected at around 3.2%, with the outlook remaining broadly stable even as geopolitical tensions and trade-policy uncertainty persist as key downside risks.

Among major economies, the US economy is expected to grow at a moderate pace of around 2.0% in 2026, while the Eurozone is projected to see a modest recovery of around 1.1%-1.2%, aided by stabilising energy markets and supportive fiscal policies. Chinas economy is expected to grow at around 4.2%-4.4%, driven by continued domestic demand and industrial expansion, though moderating gradually from prior years.

Global headline inflation is expected to continue easing through 2026 and 2027 as commodity prices stabilise and supply-chain disruptions resolve further, providing central banks room to keep monetary conditions supportive of growth, even as risks from geopolitical developments and shifts in trade policy remain tilted to the downside.

DOMESTIC ECONOMIC OVERVIEW:

Indias economy delivered another year of robust growth in FY2025-26, with real GDP growth estimated at around 7.4%-7.7% for the full year, among the fastest in the world, aided by strong industrial output, healthy agricultural performance, robust rural demand and a pick-up in urban consumption and private capital expenditure. The Reserve Bank of India (RBI), which had progressively revised its FY2025-26 growth estimate upward through the year, expects growth to moderate to around 6.6%-6.9% in FY2026-27 amid global geopolitical and trade-related headwinds, while remaining among the strongest growth rates among major economies.

The governments continued emphasis on infrastructure development through initiatives like the Gati Shakti plan and Production Linked Incentive (PLI) schemes has remained a key driver of industrial growth and competitiveness. As global businesses continue to diversify supply chains, Indias position as a global manufacturing hub is expected to strengthen further, supported by policy continuity and a stable macroeconomic environment.

Indias ongoing digital transformation, supported by robust digital infrastructure, continues to drive e-commerce growth and attract international investment in the technology sector. The widespread adoption of digital platforms is reshaping various sectors, including retail and services, further solidifying Indias position in the global digital economy.

INDIAN ECONOMY:

The Union Budget for FY2026-27, presented in February 2026, reaffirmed the governments capex-led growth strategy, raising public capital expenditure to approximately Rs.12.2 lakh crore, up from around Rs.11.2 lakh crore in FY2025-26 — the highest-ever allocation, spanning roads, railways, ports, urban infrastructure and energy. Effective capital expenditure (including capex-linked grants to states) was budgeted at approximately Rs.17.15 lakh crore (around 4.4% of GDP), underlining the continued treatment of asset creation as a core development strategy even as the government maintains a path of gradual fiscal consolidation, with the fiscal deficit targeted at 4.3% of GDP for FY2026-27.

Key steel-consuming sectors, including infrastructure, construction, railways and manufacturing, continued to perform well through FY2025-26, with government-led infrastructure projects providing sustained support. Indias large domestic market, growing middle class, and continued diversification of global supply chains toward India are expected to keep the long-term growth outlook for the Indian economy positive, with a growing startup ecosystem continuing to attract foreign investment and reinforce economic growth.

HOUSING AND INFRASTRUCTURE PUSH:

The steel and cement industries are set to benefit from ongoing infrastructure projects and robust demand in the housing, commercial and industrial segments. Government policies, including sustained budget allocations for highway, railway and road infrastructure, are expected to support continued growth in this sector. Extended and continued support under affordable-housing linked schemes is expected to keep driving activity in the real estate sector.

DEMAND FROM GROWING URBANIZATION:

Urbanization remains a key driver of demand for steel, with construction activity in metropolitan, semi-urban and urban areas continuing to grow. Large-scale infrastructure projects — including new high-speed rail corridors, expansion of national waterways and the development of new City Economic Regions announced in the Union Budget 2026-27 — are expected to boost consumption and spending in these markets, alongside continued residential and commercial construction activity.

SEGMENT-WISE / PRODUCT-WISE PERFORMANCE

Particulars	Amount
1. Technical Services	342.78
2. Profile Sheet	1.61
Total	344.39

OUTLOOK:

Indias steel sector continued to record strong growth through FY2025-26, with domestic steel demand estimated to have grown by around 8%-10% during the year, driven by robust infrastructure development, construction activity and expanding manufacturing, positioning India as one of the fastest-growing steel markets globally. Finished steel consumption is estimated to have reached around 164 million tonnes in FY2025-26. Crude steel capacity is expected to expand further, from around 200 MT to 220 MT during the year, with continued investment momentum from both public and private sector players. The outlook for Indias economy and the steel industry in FY2026-27 remains positive, supported by continued infrastructure spending, resilient domestic consumption and a favourable policy environment, even as global steel markets continue to face overcapacity and pricing pressure.

OPPORTUNITIES:

With inflation well-managed and economic growth on a healthy trajectory, India remains well-positioned for continued expansion. Sustained government capital expenditure, a busy construction season, and continued private investment in capacity expansion — including large integrated steel plants and value-added product lines — are expected to drive volume growth in the steel industry through FY2026-27. Rising investments in green/specialty steel, data centre infrastructure, defence manufacturing and shipbuilding are also emerging as new demand drivers for the sector.

THREATS:

The economic environment remains complex, with risks stemming from geopolitical tensions, persistent global steel overcapacity, and volatility in raw material and energy prices. Global steel demand growth remains modest, constrained by surplus capacity and weaker consumption in China and major Western economies, which continues to exert downward pressure on international steel prices and industry profitability. Domestically, rising imports and cost pressures could weigh on margins even as demand growth remains healthy. High interest rates and tight monetary policy in major economies could also pose challenges to sustained global growth, with associated spillover effects on trade and capital flows.

OPERATIONS

A Summary of key financial indicators is given below. The detailed financial performance may be viewed from the audited financial results and schedules thereto in the Annual Report.

Particulars	STANDALONE	CONSOLIDATED
(Rs. in Lakhs)	Year Ended 31.03.2026	Year Ended 31.03.2025	Year Ended 31.03.2026	Year Ended 31.03.2025
I Revenue from Operations	344.39	257.67	344.39	257.67
II Other Income	115.63	46.11	113.96	46.43
III Total Income (I+II)	460.02	303.78	458.34	304.10
IV Total Expenses	355.60	279.30	359.66	285.05
V Profit before Exceptional Items & Tax (III-IV)	104.42	24.48	98.68	19.05
VI Exceptional Items (Gain)/Loss	(116.11)	(7207.33)	(116.11)	(7210.15)
VII Profit Before Tax (V+VI)	220.53	7231.81	214.79	7229.20
VIII Tax Expense	0	0	0	0
IX Profit for the period	220.53	7231.81	214.79	7229.20
Paid-up Equity Share Capital (FV Rs.2/- each)	1991.58	1895.58	1991.58	1895.58
Earnings Per Share — Basic & Diluted (T)	0.23	7.63	0.23	7.63

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

In accordance with Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, are given below (Standalone basis):

Ratio	FY 2025-26	FY 2024-25	% Variance	Explanation for Change
(i) Debtors Turnover (x)	10.23	5.21	96.59%	Due to non collection / slow collection from Customers
(ii) Inventory Turnover	NA	NA	NA	There is no inventory.
(iii) Interest Coverage Ratio (x)	1.59	1.14	39.11%	The profitability of the company is increasing therefore company has become significant better in paying interest
(iv) Current Ratio	0.05	0.02	138.49%	Due to recovery from doubtful debts
(v) Debt-Equity Ratio	-0.04	-0.09	-52.41%	Due to the loss incurred during the year
(vi) Operating Profit Margin (%)	-	-	-
(vii) Net Profit Margin (%)	64.04%	2806.61%	-97.72%	Mainly due to higher Exceptional items during the Last year

(j) RETURN ON NET WORTH

Return on Net Worth (RONW) is not meaningful for either FY 2025-26 or FY 2024-25, as the Companys Net Worth (Shareholders Funds) remained negative in both years — Rs.(26,740.12) Lakh as at 31st March 2026 and Rs.(28,146.29) Lakh as at 31st March 2025 — on account of accumulated losses carried forward from previous years, as explained in Note 6 to the Standalone Financial Results. Despite the Company reporting a Profit After Tax of Rs.220.53 Lakh for the year, RONW computed on a negative equity base would not be a meaningful indicator of shareholder returns. Net Worth improved by 5.0% year-on-year (i.e., became less negative), aided by the years profit and Rs.991.24 Lakh raised through share application money pending allotment during the year, and is expected to improve further with continuing operational profitability and the planned equity infusion.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company continues to maintain a cordial and harmonious relationship with its employees across all levels. There were no material industrial relations issues during the year, and the Company did not experience any significant disruption to its operations on account of employee relations. The Company continues to focus on employee engagement, skill development and a safe working environment as part of its human resource strategy.

ENVIRONMENT & SAFETY

We are conscious of the need for an environmentally clean and safe operations. Our policy requires all operations to be conducted in a way so as to ensure safety of all concerned, compliance of statutory and industrial requirement for environment protection and conservation of natural resources.

RISK AND CONCERNS:

The Company had a well-defined risk management mechanism covering risk analysis, exposure, potential impact, and risk mitigation processes. We assess the overall risk exposure from both top-down and bottom-up perspectives, which are then consolidated to provide a birds eye view of our risk profile.

The subsidiary Company at Singapore, viz Readymade Steel Singapore Pte Ltd., continues to be under liquidation process. The Company has already impaired its investments and loan outstanding in the said subsidiary. The accumulated losses in the previous years have resulted in erosion of Companys net worth. The Company continues to work with its lenders towards a long-term viable resolution, supported by the preferential allotment of equity/warrants undertaken during the year to strengthen its capital base.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Management monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of management, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the controls.

The Audit Committee reviews the reports submitted by the management. Also, the Audit Committee has independent sessions with the external auditor and the Management to discuss the adequacy and effectiveness of internal financial controls over financial reporting and internal financial controls respectively.

CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors.