Lakshya Powertech Ltd Management Discussions

1. Industry Structure and Developments

The Engineering, Procurement, Construction and Commissioning (EPCC) industry is a cornerstone of infrastructure development worldwide, providing end-to-end execution services for complex and capital-intensive projects. It plays a pivotal role across critical sectors such as Oil & Gas, Power, Data Centers, and Renewable Energy.

In the Oil & Gas segment, a revival in capital expenditure by upstream and midstream players, driven by stabilized oil prices and rising global energy demand, has led to the resurgence of green3eld re3nery projects, LNG terminals, and pipeline infrastructure. A shift toward digitized operations and low-carbon technologies like carbon capture and storage (CCS) is reshaping project execution approaches.

The Power sector is witnessing signi3cant investments in transmission and distribution (T&D), grid modernization, and hybrid peaking power solutions as governments aim to enhance energy reliability and integrate renewable sources.

In the Data Center vertical, demand is surging due to rapid advancements in cloud computing, arti3cial intelligence, IoT, and 5G technologies. This has made data centers one of the fastest-growing segments, with EPCC companies increasingly executing high-e3ciency hyperscale and edge data center facilities.

The Renewable Energy sector continues its momentum, supported by global net-zero commitments and progressive policy frameworks. Utility-scale solar and wind projects, hybrid renewable systems, and green hydrogen initiatives are becoming mainstream, with battery energy storage and modular EPC designs at the forefront of execution.

The Company operates within the vital infrastructure segments of oil & gas, hydrocarbons, process plants, and power plants, providing critical support services such as testing, commissioning, overhauling, and spare parts trading (Special Services). With increased emphasis on operational e3ciency, safety, and lifecycle management of industrial assets, the demand for these specialized services continues to grow. The industry is also witnessing a rising need for integrated O&M (Operations and Maintenance) services that ensure uninterrupted plant performance.

2. Opportunities and Threats

OIL & GAS

Indias oil demand is growing rapidly, supported by infrastructure expansion, transportation growth, and urbanization. As Asias second-largest re3ning hub, India bene3ts from ongoing investments in capacity and modernization. Government reforms?€”such as LNG infrastructure development and pipeline expansion?€”further support energy diversi3cation. Globally, increasing investments in automation, digital oil3elds, and oil & gas services present strong long-term growth opportunities.

An EPCC company in the oil & gas sector faces key threats such as crude oil price volatility, geopolitical instability, and increasingly stringent environmental regulations. Supply chain disruptions, cost escalations, and skilled labor shortages further strain project execution. Additionally, the global shift toward clean energy, cybersecurity vulnerabilities, and 3nan-cial risks from 3xed-price contracts and delayed payments pose signi3cant operational and strategic challenges.

POWER

The global power industry in 2025 is at a pivotal stage, o3ering vast opportunities for EPCC companies operating in oil & gas, power, data centers, and renewable energy sectors. The global transition toward clean energy is accelerating, with more than 40% of electricity generated from renewable sources such as solar and wind. This shift is backed by record investments in energy storage, smart grids, and transmission upgrades. In India, strong government support, including a target of 500 GW of non-fossil fuel capacity by 2030 and increasing foreign direct investment, is driving the growth of the power sector. The rapid expansion of data centers, electri3cation of transport, and digitalization are generating massive demand for new infrastructure, presenting EPCC companies with multi-sector growth avenues. Simultaneously, technological advancements in automation, green hydrogen, and smart grid systems are opening up high-value project opportunities.

However, the sector also faces emerging threats. Rapid load growth from electric vehicles and digital infrastructure is straining outdated systems, requiring immediate modernization. Regulatory bottlenecks, unclear permitting frameworks, and high input costs pose challenges to timely project execution. Furthermore, rising electricity prices due to large capital investments could impact a3ordability and slow adoption in price-sensitive markets.

DATA CENTER

The global data centre industry in 2025 presents signi3cant opportunities driven by the rapid adoption of AI, cloud computing, and digital transformation across sectors. With the global market expected to exceed $289 billion this year and reach over $432 billion by 2029, the demand for hyperscale and colocation capacity is at an all-time high. In India, the market is forecasted to grow to $8 billion by 2025, supported by a 22% increase in capacity and strong demand from cities like Mumbai, Delhi-NCR, and Bengaluru. Emerging trends such as liquid and hybrid cooling, edge computing, hybrid cloud models, and increasing focus on sustainability open up avenues for infrastructure developers, EPCC players, and service providers. Additionally, government incentives and rising local manufacturing bolster domestic capability and industry expansion.

However, threats loom in the form of global power constraints, especially in mature data centre hubs, which are pushing developers toward emerging markets. Rapid rise in input costs, soaring rack densities, and vacancy rate drops are creating pricing pressure and capacity strain. Also, growing regulatory and sustainability mandates require industry players to continuously innovate and comply with evolving standards.

RENEWABLE ENERGY

Indias renewable energy sector in 2025 presents substantial opportunities, positioning the country as the fastest-growing major market globally with a total installed capacity of 220.10 GW as of March 2025. This growth is supported by proactive government policies, clear national targets like the 500 GW non-fossil goal by 2030, and strong public-private investment momentum. The sector is also bene3ting from surging interest in emerging areas such as battery energy storage and grid modernization, with national energy storage tenders reaching 6.1 GW in just the 3rst quarter of 2025. Large-scale solar and wind projects continue to dominate, while digital grid solutions and advanced technologies are opening up new business models and e3ciency gains. However, the sector also faces notable threats. Despite rapid growth, India still relies heavily on fossil fuels for actual power generation. Project delays, grid integration challenges, and regulatory uncertainties may hamper the pace of progress. Additionally, the shortage of skilled manpower could limit the sectors ability to meet growing technical demands.

SPECIAL SERVICES

Opportunities include the growing investments in energy infrastructure, aging plant equipment needing refurbishment, and the rising preference for end-to-end O&M service providers. The Company is well-positioned to capitalize on this with its comprehensive o3erings and one-stop solution model.

Threats may arise from evolving regulatory frameworks, technological disruptions, and increasing competition from both domestic and global service providers entering the high-value engineering services space.

3. Segment-wise or Product-wise Performance

The total revenue across all business sectors during the reporting period stood at 316010.42 lakhs.

?€? Oil and Gas was the top contributor, generating 311854.97 lakhs, which represents approximately 74% of the total revenue.

?€? Power Project business brought in 3496.46 lakhs, accounting for around 3.1% of the total.

?€? The Data Center segment contributed 32909.57 lakhs, which is about 18.17%.

?€? The Renewable segment recorded revenue of 3551.02 lakhs, accounting for nearly 3%.

?€? The Special Service segment had the contribution of 3198.42 lakhs, forming over 1% of the total.

4. Outlook

OIL & GAS

The sectors outlook for 2025 is cautiously positive. Global supply is likely to outpace demand, stabilizing prices. In India, robust demand growth, policy support, and a push for cleaner fuels are expected to sustain momentum. Oil & gas services, especially in pipelines and re3nery upgrades, will remain crucial to the sectors evolution.

POWER

The outlook for the power and infrastructure sectors remains strongly positive. With increasing demand, climate-focused policy momentum, and a robust pipeline of renewable and digital infrastructure projects, the industry is set for sustained growth. EPCC service providers are strategically positioned to bene3t from this transformation, especially in high-growth regions such as India and Southeast Asia. The integration of clean energy, advanced grid technologies, and large-scale infrastructure development will continue to drive industry expansion. Public-private partnerships, supportive regulation, and technological innovation will be essential in realizing the sectors full potential in the coming decade.

DATA CENTER

The data centre industry outlook for 2025 and beyond remains robust and positive. With the increasing integration of AI workloads, cloud expansion, and the surge in digital services across both public and private sectors, the demand for reliable, scalable, and energy-e3cient data centre infrastructure is poised to grow substantially. Both globally and in India, capacity additions, infrastructure innovation, and digital-3rst government policies are expected to sustain momentum. For engineering, procurement, construction, and commissioning (EPCC) companies, this translates into expanded engagement across the value chain?€”from green3eld developments to high-density retro3ts and sustainable upgrades. The evolution toward smart, resilient, and carbon-conscious facilities will continue to shape industry priorities.

RENEWABLE ENERGY

The outlook for Indias renewable energy sector in 2025 and beyond remains highly positive. The industry is witnessing unprecedented investment momentum, with $9.84 billion raised in the 3rst quarter alone, and a growing pipeline of projects backed by global best practices. Technology adoption is accelerating, and energy storage is becoming central to ensuring stable and reliable power from renewable sources. With supportive government measures and rising international commitments to clean energy, India is set to remain at the forefront of the global energy transition throughout the decade. However, this optimistic trajectory is conditional upon continued regulatory support, improved capital 3ow, and timely implementation of grid modernization strategies.

SPECIAL SERVICES

The Company remains optimistic about the future, driven by its capability to o3er integrated, high-quality services ranging from commissioning to spare part supply and refurbishment of rotating equipment. As industrial players seek more cost-e3ective and reliable asset management solutions, the Company aims to expand its reach, enhance client engagement, and reinforce its position as a trusted service partner across core sectors.

5. Risks and Concerns

OIL & GAS

Key risks include global market unpredictability, tightening emission norms, and rapid technological changes. In India, import dependency and outdated infrastructure are major vulnerabilities. Adapting to energy transition and upgrading legacy systems remain essential for long-term resilience.

POWER

While the growth potential is considerable, the industry must navigate a range of operational and strategic risks. One of the primary concerns is the complexity of integrating variable renewable energy sources into legacy grid systems, requiring large-scale investments in storage, automation, and smart grid solutions. Regulatory delays and inconsistent policy execution can disrupt project timelines and 3nancing. High capital expenditure requirements, coupled with in3ationary pressures on material and labor costs, may a3ect project margins and energy a3ordability. Talent shortages, particularly in engineering and technology-intensive roles, could impact project quality and timelines. Lastly, the need for continuous innovation and adaptation to evolving technologies and customer expectations adds to the pressure on companies to remain agile and future-ready.

DATA CENTER

Despite the optimistic outlook, the industry faces several key risks. The most critical among them is the ongoing power availability challenge in primary markets, which can delay or limit new project deployments. Talent shortages in specialized 3elds like high-density infrastructure design, electrical systems, and thermal management can impact delivery time-lines and operational performance. Additionally, increasing sustainability expectations?€”including renewable sourcing, water conservation, and carbon neutrality?€”require heavy investments and long-term commitment, potentially stretching project budgets and margins. Financial volatility and evolving compliance standards may further complicate investment and development cycles, making agility and regulatory awareness essential for continued success.

RENEWABLE ENERGY

Despite its strong growth, the sector faces several risks and concerns that must be addressed to maintain long-term momentum. One of the critical issues is the need for large-scale energy storage solutions to overcome the intermittency of renewable sources and ensure dispatchable power. Financing remains a major hurdle, with the requirement for substantial capital to meet national targets and support infrastructure. Delays in grid modernization could create bottlenecks in integrating renewable power e3ciently, a3ecting overall grid stability. Additionally, workforce upskilling and training are vital areas of concern, as the demand for skilled professionals grows alongside the sectors rapid expansion.

SPECIAL SERVICES

Key risks include dependency on capital-intensive industries, 3uctuations in project timelines, and potential delays in spare part supply chains. Additionally, technical manpower availability and adherence to stringent safety and quality norms are areas that require continuous attention. Proactive risk management and maintaining service excellence remain central to mitigating these concerns.

6. Internal Control Systems and Adequacy

The Company has implemented comprehensive internal control systems appropriate for the scale and nature of its business operations. These controls cover key functions including procurement, project costing, billing, vendor engagement, and 3nancial risk monitoring. The internal audit function conducts periodic reviews to ensure operational discipline and regulatory compliance. The Audit Committee of the Board regularly reviews audit 3ndings and recommends corrective actions where necessary, ensuring a robust governance framework.

7. Discussion on 3nancial performance with respect to operational performance

During FY 2024?€“25, the Company delivered a healthy 6.23% year-on-year growth in revenue from operations, reaching 316,010.42 lakhs. Including other income, total income stood at 316,133.31 lakhs, re3ecting strong operational momentum and e3ective project execution?€”particularly within the Oil & Gas and O&M segments. This performance underscores the Companys ability to capitalize on market opportunities and sustain delivery excellence.

While total expenses rose by 7.74% to 314,185.46 lakhs, this increase was largely driven by growth-focused investments in stock-in-trade, direct execution, and project 3nancing. Importantly, the Companys proactive inventory management helped balance these costs. Pro3tability remained resilient, with PAT rising by 8.2% to 31,580.18 lakhs, supported by e3ec-tive tax planning. EPS stood at 318.50, re3ecting a stable earnings pro3le amid a broader equity base. With a focus on cost optimization and operational e3ciency, the Company is well-positioned to enhance margins and sustain future growth.

8. Material developments in Human Resources / Industrial Relations front, including number of people employed

As of March 31, 2025, the Company employed over 900 professionals across various functions including engineering, procurement, project management, safety, and corporate operations. The Company remains committed to developing its human capital through structured learning and development initiatives. Continuous skill development programs are conducted through in-house training platforms. Technological interventions such as AI-based workforce deployment and productivity tracking tools have been introduced to enhance e3ciency. A strong emphasis is placed on safety, compliance, and ethical conduct across all levels of the organization. During the year, industrial relations remained stable and cordial, with no major disruptions reported.

9. details of signi3cant changes (i.e. change of 25% or more as compared to the immediately previous 3nancial year) in key 3nancial ratios, along with detailed explanations therefor,

Ratios	For the year ended March 31, 2025	For the year ended March 31, 2024	Variation (%)	Justi3cation
(a) Current Ratio	2.56	1.52	68.42%	Ratio is increased due to increase in inventory and debtors as compared to previous year
(b) Debt-Equity Ratio	0.27	0.90	(70.00%)	Ratio is improved due to repayment of borrow- ings from the funds raised and increase in pro3t during the year
(d) Return on Equity Ratio	24.78%	74.17%	(66.59%)	Ratio is signi3cantly decreased due to issuance of new equity and preference shares during the year
(e) Inventory turnover ratio	4.03	25.99	(84.49%)	Ratio is decrease due to signi3cant increase in inventory of work-in-progress as compared with previous year
(f) Trade Receivables turnover ratio	3.18	5.53	(42.50%)	Ratio is decrease due to increase in trade receiv- ables in comparison to Revenue from operations
(h) Net capital turnover ratio	2.87	8.59	(66.59%)	Ratio is decreased due to increase in amount of receivables and inventories as compared with previous year
(j) Return on Capital em- ployed	18.86%	35.74%	(47.23%)	Ratio is decreased due to issue of shares or in- crease in capital during the year

10. details of any change in Return on Net Worth as compared to the immediately previous 3nancial year along with a detailed explanation thereof

In FY 2024?€“25, the Company reported a Return on Net Worth (RoNW) of 16.58%, compared to 45.33% in FY 2023?€“24, re-3ecting a decline of 63.43%. This variation primarily stems from a signi3cant increase in the Companys capital base during the year.

Despite the lower RoNW percentage, the Company continued to demonstrate strong pro3tability, ensuring that returns remained healthy even with the expanded net worth. The performance re3ects a shift toward a more sustainable and well-capitalized growth structure, strengthening the Companys long-term 3nancial foundation.

During the reporting year, the Company went public via Initial Public O3er (IPO) wherein fresh 73,11,120 equity shares (face value Rs. 10/- per share) were issued at the issue price of Rs. 180/- per share. As a result of IPO, the Net Worth of the Company grew exponentially which eventually contributed in lesser RoNW as compared to previous year although the pro3tability continued to grow.

11. Forward-Looking Statements

This report may contain forward-looking statements that are based on current assumptions, expectations, and projections about future performance and market conditions. These statements involve known and unknown risks, uncertainties, and other factors that could cause actual outcomes to di3er materially from those expressed or implied. The Company does not undertake any obligation to publicly revise or update any forward-looking statements in light of future events or changes in expectations.

For and on behalf of Board of Directors of

Lakshya Powertech Limited

	Sd/-
	Rajesh Anne
Date: August 30, 2025	Chairman & Managing Director
Place: Ahmedabad	DIN: 05294345