Likhitha Infrastructure Ltd Management Discussions

Indian Economy

India remained one of the world?s fastest-growing major economies during FY 2025-26, supported by strong domestic consumption, sustained government capital expenditure and steady investment activity. According to the Provisional Estimates released by the Ministry of Statistics and Programme Implementation (MoSPI), the economy recorded real GDP growth of 7.7%, while nominal GDP stood at ^346.36 lakh crore.

The Government continued to prioritise infrastructure development, with significant investments across roads, railways, energy, logistics and urban infrastructure. This sustained capital expenditure has strengthened project activity across the engineering and construction sector and encouraged greater private-sector participation in infrastructure development.

Although global markets continued to face geopolitical tensions, trade uncertainties and commodity price volatility, India?s economic fundamentals remained resilient. Continued investments in infrastructure, manufacturing and industrial capacity are expected to support economic growth and create longterm opportunities for sectors such as oil and gas infrastructure, where demand is closely linked to capital investment and industrial expansion.

Government initiatives like One Nation, One Grid, One Tariff are key policy initiatives supporting the growth of India?s natural gas ecosystem. The "One Nation, One Grid, One Tariff” framework was introduced by the Petroleum and Natural Gas Regulatory Board (PNGRB). The unified tariff mechanism aims to simplify gas transportation charges by introducing a common tariff structure across the national gas pipeline network. By reducing regional tariff disparities, the reform is expected to improve the affordability and accessibility of natural gas. Especially in emerging markets, while encouraging better utilisation of the national gas grid. The initiative is also expected to support the expansion of City Gas Distribution (CGD) networks and strengthen the development of an integrated gas transportation infrastructure across the country.

India?s continued investment in energy infrastructure is expected to support steady demand for oil and gas pipeline projects over the coming years. Expansion of natural gas transmission networks, refinery and petrochemical capacity, and city gas infrastructure will continue to generate opportunities for engineering and construction companies with proven execution capabilities. At the same time, greater adoption of digital technologies and advanced construction practices is improving project efficiency, safety and asset reliability across the sector.

The industry, however, remains exposed to challenges arising from commodity price volatility, supply chain disruptions, geopolitical developments and evolving regulatory requirements. Companies with strong project management practices, financial discipline and execution capabilities are expected to be better positioned to navigate these uncertainties.

With its established execution track record, experienced workforce and long-standing relationships with leading energy companies, Likhitha Infrastructure Limited is well placed to participate in India?s expanding oil and gas infrastructure programme while continuing to focus on quality, safety and timely project delivery.

The Middle East continues to invest heavily in oil and gas infrastructure as countries strengthen energy security, expand natural gas production and diversify their economies. In Saudi Arabia, the ongoing implementation of Vision 2030 is driving investments in gas production, transmission infrastructure and industrial development. Key projects, including the expansion of the Jafurah Gas Field and the Master Gas System, are expected to create sustained demand for pipeline engineering and construction services.

In the United Arab Emirates, investments by ADNOC in gas processing, transmission infrastructure and industrial energy projects continue to support the country?s long-term energy strategy. Alongside conventional energy investments, the UAE is also advancing hydrogen and carbon management initiatives, creating opportunities for specialised infrastructure contractors.

With an established presence in both Saudi Arabia and the UAE, Likhitha Infrastructure Limited is well positioned to participate in the region?s growing pipeline infrastructure market while leveraging its expertise in executing complex oil and gas projects across diverse operating environments.

India?s oil and gas infrastructure sector remained on a steady growth trajectory during FY 2025-26, supported by rising energy demand, expanding industrial activity and sustained investments in transmission and distribution infrastructure. As the country strengthens its energy network, the development of natural gas pipelines continues to be a key focus area, improving connectivity across industrial clusters, commercial centres and urban markets.

India currently has over 25,000 km of operational natural gas pipelines, with more than 10,000 km under various stages of construction. The continued expansion of the pipeline network, along with successive rounds of City

Gas Distribution (CGD) licensing, is improving access to natural gas for households, industries and the transport sector, while generating sustained demand for pipeline construction and associated infrastructure. Natural gas currently contributes around 6-7% of India?s primary energy mix. To support cleaner fuel adoption and strengthen energy security, the Government aims to increase this share to 15% by 2030 through continued investments in transmission pipelines, LNG infrastructure and city gas distribution networks.

Globally, the energy sector continues to balance conventional energy requirements with the transition towards lower-carbon fuels. While renewable energy capacity is expanding, oil and natural gas remain integral to meeting global energy demand. As a result, investments in pipelines, LNG facilities and related energy infrastructure continue to create longterm opportunities for engineering, procurement and construction (EPC) companies with specialised execution capabilities.

With its proven expertise in executing cross-country pipeline projects and associated facilities, Likhitha Infrastructure Limited remains well positioned to participate in India?s expanding energy infrastructure programme and capitalise on opportunities across the oil and gas value chain.

The Government of India continues to strengthen the country?s energy infrastructure through policy reforms and strategic investments aimed at improving energy accessibility, enhancing infrastructure efficiency and supporting long-term economic growth. A key focus area remains the expansion of the natural gas ecosystem through investments in transmission infrastructure, distribution networks and associated facilities.

The Petroleum and Natural Gas Regulatory Board (PNGRB) continues to play a pivotal role in developing an integrated gas transportation network through regulatory reforms and infrastructure planning. The implementation of the Unified Tariff mechanism has streamlined gas transportation charges across pipeline networks, improving affordability and encouraging greater natural gas adoption across emerging markets and industrial clusters.

To accelerate infrastructure development, the Government permits 100% Foreign Direct Investment (FDI) under the automatic route in most segments of the oil and gas sector, encouraging global participation in pipeline infrastructure, LNG facilities and related energy projects. This policy has strengthened investment inflows while facilitating technology transfer and international collaboration.

The Government is also advancing its clean energy agenda through initiatives such as the National Green Hydrogen Mission, which aims to position India as a global hub for green hydrogen production while supporting the development of future-ready energy infrastructure. Alongside continued investments in conventional oil and gas assets, these initiatives are expected to create opportunities for specialised engineering and pipeline construction companies. Collectively, these policy measures reinforce the Government?s long-term commitment to expanding India?s energy infrastructure and creating a favourable investment environment for the oil and gas pipeline sector.

Growing industrialisation, urbanisation and increasing energy consumption continue to drive demand for pipeline infrastructure across India. Expanding manufacturing hubs, commercial centres and urban settlements require reliable energy transportation networks, while sectors such as steel, fertilisers, petrochemicals, power generation and City Gas Distribution continue to strengthen demand for pipeline connectivity.

Ongoing investments in refineries, petrochemical complexes, LNG import terminals and downstream energy infrastructure are generating sustained opportunities for engineering, procurement and construction (EPC) companies. As energy companies expand and modernise their assets, the demand for specialised pipeline construction and associated infrastructure continues to grow.

Advancements in construction technologies are improving project execution across the sector. The adoption of automated welding systems, digital project management platforms, integrity monitoring solutions and predictive maintenance technologies is enhancing operational efficiency, project quality and asset reliability.

Increasing focus on environmental stewardship and workplace safety is influencing the design and execution of modern pipeline infrastructure. Companies are adopting higher safety standards, improved construction practices and environmentally responsible processes to meet evolving regulatory requirements while supporting the transition towards cleaner energy systems.

India?s continued investments in energy infrastructure present significant opportunities for companies operating in the oil and gas pipeline sector. The steady expansion of transmission networks, refinery capacity, LNG infrastructure and industrial energy projects is expected to generate a healthy pipeline of engineering and construction opportunities over the medium to long term.

Likhitha Infrastructure Limited is well positioned to capitalise on these opportunities through its proven expertise in executing cross-country pipeline projects and associated facilities across diverse geographical and operating conditions. The Company?s established relationships with leading public sector and private sector clients, combined with its strong execution capabilities and focus on quality and safety, provide a competitive advantage in securing and delivering complex infrastructure projects.

In addition to strengthening its domestic presence, the Company continues to evaluate opportunities in select international markets, leveraging its technical capabilities and execution experience to expand its geographical footprint. With a healthy project pipeline, disciplined execution approach and continued emphasis on operational excellence, Likhitha remains well positioned to create sustainable value while supporting the development of critical energy infrastructure.

Project execution is dependent on external factors such as land acquisition, statutory approvals and right-of-way clearances, which are managed by project owners and regulatory authorities. Delays in these activities may impact project mobilisation and execution schedules. Where contractually applicable, such delays are addressed through client-approved compensation mechanisms.

Fluctuations in the prices of key inputs, including steel and polyethylene pipes, can influence project costs and margins. The Company mitigates these risks through prudent procurement practices, contractual safeguards and efficient project planning.

Executing projects across multiple locations requires seamless coordination of manpower, equipment, logistics and vendor networks. Maintaining project schedules while adhering to stringent quality, safety and environmental standards remains a key operational priority.

As the Company expands its presence in international markets, it continues to strengthen its understanding of local regulatory frameworks, vendor ecosystems and compliance requirements while managing risks arising from foreign exchange movements and geopolitical developments.

The Company remains focused on disciplined execution, robust project management and strong customer relationships to effectively navigate industry challenges while delivering projects safely, efficiently and on schedule.

Likhitha Infrastructure Limited is an EPC company specialising in the construction of Pan-India pipelines and associated facilities for crude oil, natural gas, LPG, and petroleum products. The Company also undertakes City Gas Distribution (CGD) projects, including steel and MDPE pipeline networks, delivering complete pipeline construction solutions for leading public and private-sector clients.

With operations spanning more than 20 states and 2 Union Territories, LIL has established a strong track record of execution across diverse geographic and operating conditions. The Company has successfully completed over 6,000 kilometres of pipeline infrastructure and continues to execute projects that strengthen India?s oil and gas transportation network. Leveraging its engineering expertise and execution capabilities, the Company has also expanded its presence beyond India. Following the successful execution of the India-Nepal cross-border petroleum pipeline, LIL has established operations in the United Arab Emirates and entered the Kingdom of Saudi Arabia to pursue opportunities in the Middle East?s growing energy infrastructure sector.

The Company?s business is supported by an experienced management team, disciplined execution practices and a strong focus on quality, safety and timely project delivery. These strengths have enabled LIL to build enduring relationships with leading oil and gas companies while maintaining a healthy project pipeline.

As on 31st March 2026, the Company?s order book remained robust, providing healthy revenue visibility and reinforcing its growth prospects. Supported by its execution capabilities and expanding market presence, Likhitha remains well positioned to participate in India?s ongoing energy infrastructure development as well as select international opportunities.

• High Revenue and Profit Growth with High Return on Capital Employed (ROCE)

• Company with no debt

• Book Value per share Improving for last 3 years

• Company with Zero Promoter Pledge

Weaknesses

• Inflation

• Expansion of the business based on new Government initiatives

• Potential global expansion of the company

• Increase in competitive bids for procuring the projects Any future pandemic lock-down extensions would affect

During FY 2025-26, the Company concluded the year with an order book exceeding ^850 crores, comprising a diversified mix of cross-country pipelines, City Gas Distribution (CGD) networks, and tankage terminal projects, providing healthy revenue visibility. The Company strengthened its international presence through active operations in the UAE and the Kingdom of Saudi Arabia (KSA) via its joint venture, Likhitha HAK Arabia Contracting Company. In recent developments following the close of the financial year, your Company secured its largest international order to date, valued at approximately ^510 crores (USD 54 million) from China Petroleum Engineering & Construction Corporation for the Pipeline Package-1 (ASAB).

On the domestic front, the Company successfully commissioned the Krishnapatnam-Hyderabad Petroleum Products Pipeline (KHPL), completed the Nagpur-Chhindwara-Jabalpur (NCJPL) pipeline across environmentally sensitive terrain, and achieved successful hydro-testing of a longdistance stretch of the Mumbai-Nagpur-Jharsuguda (MNJPL) pipeline, demonstrating its engineering excellence and project executioncapabilities.Going forward, the Company will continue to focus on strengthening its business through efficient project execution, diversification of its order book, and prudent capital allocation to support sustainable growth. The Company remains committed to a robust risk management framework encompassing project execution, financial discipline, operational controls, and regulatory compliance, under the oversight of the Board of Directors and the Audit Committee.

Effective risk management is integral to Likhitha Infrastructure Limited?s ability to execute projects efficiently while delivering sustainable value to its stakeholders. Given the nature of the oil and gas pipeline infrastructure sector, the Company operates in an environment influenced by operational, financial, regulatory and external risks. To address these challenges, Likhitha has established a structured Enterprise Risk Management (ERM) framework that enables the timely identification, assessment and mitigation of risks across its business operations.

The Company?s risk management framework is embedded within its governance processes and is periodically reviewed by the Board of Directors, the Risk Management Committee and the Audit Committee. Through continuous monitoring, robust internal controls and proactive mitigation strategies, the Company seeks to strengthen operational resilience, safeguard stakeholder interests and support sustainable longterm growth.

Likhitha Infrastructure Limited has established an adequate system of internal controls commensurate with the nature, size and complexity of its operations. These controls are designed to safeguard the Company?s assets, ensure the accuracy and reliability of financial reporting, promote operational efficiency and ensure compliance with applicable laws, regulations and internal policies.

The Company has well-defined policies, standard operating procedures and approval mechanisms governing its business processes. These are supported by an independent internal audit function that periodically reviews operational, financial and compliance controls across key business functions. The internal audit findings, together with recommendations for improvement, are placed before the Audit Committee for review and appropriate corrective action.

The Audit Committee, comprising experienced and Independent Directors, regularly reviews the effectiveness of the internal control framework, risk management processes and internal audit observations. Based on these reviews, the Committee provides guidance to the management to further strengthen governance practices and ensure continuous improvement in internal controls.

The management believes that the Company?s internal control systems remain effective and adequate to support its business operations while safeguarding stakeholder interests.

Likhitha Infrastructure Limited remains focused on timely project execution, operational efficiency, and the maintenance of high standards of quality and safety. Supported by a healthy order book and strong customer relationships, the Company will continue to strengthen its execution capabilities while pursuing opportunities aligned with its core business.

Continued investments in energy infrastructure, natural gas transmission and City Gas Distribution networks are expected to support long-term demand for pipeline construction services. With its proven execution track record and domain expertise, Likhitha Infrastructure Limited is well positioned to participate in this growth while delivering sustainable value to its stakeholders.

On a consolidated basis, during FY 2025-26, Likhitha Infrastructure Ltd. recorded a total income of 46,109.33 lakhs. The profit aftertax stood at 3,854.91 lakhs, while total equity amounted to 41.155.10 lakhs as of March 31, 2026. The majority of income was generated from cross-country pipeline execution and CGD network implementation.

Key Ratios

Key Ratios

Likhitha Infrastructure Limited recognises its employees as a key driver of operational excellence and sustainable growth. As on March 31, 2026, the Company has 381 employees. The Company continues to invest in building a skilled workforce through regular training, technical development and a strong focus on workplace safety. It is committed to fostering an inclusive, ethical and performance-oriented work environment that supports employee well-being and professional growth.

Statements in the Management Discussion and Analysis describing the Company?s objectives, expectations, projections, estimates or forecasts may constitute "forward-looking statements” within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, government policies, regulatory developments, commodity prices, competitive pressures and other risks beyond the Company?s control. The Company undertakes no obligation to publicly update or revise any forward-looking statements based on subsequent events or developments.