Madhav Infra Projects Ltd Management Discussions

FORWARD-LOOKING STATEMENTS

FY 2025–26 was a year of notable growth, resilience, and strategic advancement for Madhav Infra Projects Limited. With operations spanning infrastructure development and renewable energy, the Company continued to leverage key long-term macroeconomic trends, including rapid urbanization, the transition towards clean energy, and the growing emphasis on sustainability. Its diversified business model, encompassing large-scale infrastructure projects and solar energy solutions, enabled the Company to broaden its revenue base, manage sector-specific risks, and contribute meaningfully to the nations infrastructure development and renewable energy objectives.

This section contains certain statements that may be considered "forward-looking statements," including statements relating to the Companys expectations, projections, business strategies, future plans, growth prospects, and anticipated financial and operational performance. Such statements are based on the Managements current assumptions, estimates, beliefs, and expectations regarding future events and developments. Forward-looking statements are inherently subject to various risks and uncertainties, including changes in market conditions, regulatory and policy frameworks, economic and industry trends, operational challenges, and other factors that may be beyond the Companys control. Accordingly, actual results, performance, or achievements may differ materially from those expressed or implied in such statements. The Company does not undertake any obligation to publicly update or revise these forward-looking statements to reflect subsequent events, developments, or circumstances, except where required under applicable laws and regulations.

The Management Discussion and Analysis (MD&A) should be read in conjunction with the Audited Financial Statements and the accompanying Notes thereto, which form an integral part of this Annual Report.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian economy is the bright spot in the global landscape, becoming one of the fastest-growing big emerging market economies in the world. The Indian infrastructure Research report provides a realistic estimate of investment opportunity in infrastructure amid the stiff challenges facing the sector. Infrastructure is the second largest economic activity in India after agriculture, and has been growing rapidly. The production of industrial machinery has also been on the rise – and the increasing flow of goods has spurred increases in rail, road and port traffic, necessitating further infrastructure improvements.

(a) Road Infrastructure

Road infrastructure is a critical pillar of Indias economic development and remains one of the countrys primary modes of transportation. With a road network spanning approximately 5.89 million kilometres, India has one of the largest road networks in the world. Road traffic has witnessed consistent growth over the years, supported by improved connectivity and accessibility across cities, towns, and villages.

India has also made significant progress in the development of metro rail infrastructure and has emerged as one of the leading metro markets globally. The country had the fifth-largest metro rail network and was progressing towards becoming the third-largest network, surpassing countries such as Japan and South Korea. As of September 2022, approximately 810 kilometres of metro rail network were operational across 20 cities. Mumbais monorail, with a route length of nearly 20 kilometres, was among the prominent monorail systems globally, following networks in China and Japan.

The private sector has emerged as a key player in the development of road infrastructure in India. Increased industrial activities, along with increasing number of two and four wheelers have supported the growth in the road transport infrastructure projects. The governments policy to increase private sector participation has proved to be a boon for the infrastructure industry with a large number of private players entering the business network transports more than 64.5 per cent of all goods in the country and 90 per cent of Indias total passenger through the public-private partnership (PPP) model.

India plans to spend

US $1.4 trillion on infrastructure through ‘National Infrastructure Pipeline in the next five years.

In FY21, infrastructure activities accounted for 13 81.72 billion.

India will need to construct 43,000 houses every day until 2022 to achieve the vision of Housing for All by 2022.

As of August 22, 2022, 122.69 lakh houses have been sanctioned, 103.01 lakh houses have been grounded, and 62.21 lakh houses have been completed, under the Pradhan Mantri Awas Yojna scheme (PMAY-Urban).

India, it is estimated, needs to invest $840 billion over the next 15 years into urban infrastructure to meet the needs of its fast-growing population.

This investment will only be rational as well as sustainable, if we additionally focus on long-term maintenance and strength of our buildings, bridges, ports and airports.

In the Union Budget 2022-23, the government allocated Rs. 19,500 crore (US $2.57 billion) for a PLI scheme to boost manufacturing of high-efficiency solar modules.

Non-conventional energy sector received FDI inflow of US $14.12 billion between April 2000-March 2023.

India launched the Mission Innovation CleanTech Exchange, a global initiative that will help accelerate clean energy innovation.

The Central Electricity Authority estimates Indias power requirement to grow to reach 817 GW by 2030.

Most of the demand will come from real estate and transport sectors.

59 solar parks of aggregate capacity 40 GW have been approved in India.

The worlds largest renewable energy park of 30 GW capacity solar-wind hybrid project is under installation in Gujarat.

In August 2022, Norfund, who manage the Norwegian Climate Investment Fund, and KLP, Norways biggest pension company, signed an agreement to buy a 49% share of a 420 MW solar power plant in Rajasthan for Rs. 2.8 billion (US $35.05 million).

The Solar Energy Corporation of India (SECI) implemented large-scale central auctions for solar parks and has awarded contracts for 47 parks with over 25 GW of combined capacity.

OPPORTUNITIES

The infrastructure sector is a vital pillar of the Indian economy and plays a significant role in driving the countrys overall economic and social development. The sector encompasses a wide range of activities, including power generation and transmission, bridges, dams, roads, railways, and urban infrastructure. Given its strategic importance, the Government of India continues to accord strong priority to infrastructure development through policies and initiatives aimed at creating high-quality infrastructure within defined timelines. Strengthening infrastructure is also essential to supporting Indias long-term economic ambitions, including its objective of becoming a US$ 5 trillion economy.

The Government continues to accord high priority to infrastructure development as a key driver of economic growth through sustained public investment and policy support. Under the Union Budget 2026–27, capital expenditure has been budgeted at Rs 12.22 lakh crore, equivalent to 3.1% of GDP, reflecting the Governments continued commitment to strengthening the countrys infrastructure and productive capacity. This includes Rs 2.00 lakh crore under the Special Assistance as Loan to States for Capital Expenditure (SASCI) to support infrastructure creation and capital investment by State Governments.

The Budget also provides for substantial investment in critical infrastructure sectors. Capital outlay for Indian Railways has been increased to Rs 2.78 lakh crore, while capital outlay on roads and bridges stands at approximately Rs 2.76 lakh crore for FY 2026–27. These allocations underscore the Governments continued focus on enhancing connectivity, expanding infrastructure capacity, improving logistics efficiency, and supporting long-term economic growth. Overall, the increased allocation towards capital expenditure and infrastructure, together with financial support to States, is expected to provide continued impetus to construction and infrastructure development activities across the country.

Renewable energy has also emerged as an important component of Indias infrastructure and energy transition agenda. According to data released by the Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflows into Indias non-conventional energy sector stood at US$12.57 billion between April 2000 and June 2022. Since 2014, investments of more than Rs 5.2 lakh crore (approximately US$70 billion) have been made in Indias renewable energy sector, reflecting the growing importance of clean energy in the countrys development strategy.

India has set ambitious climate and energy transition targets, including reducing the carbon intensity of its economy by more than 45% by the end of the decade, achieving 50% of cumulative installed electric power capacity from renewable energy sources by 2030, and attaining net-zero carbon emissions by 2070. The transition towards cleaner energy and low-carbon technologies is expected to create significant economic opportunities, with the market for low-carbon technologies in India potentially reaching up to US$80 billion by 2030.

THREATS

Factors, which can threaten the business model and the Companys market standing, emerge from changes in government policies, safety and security concerns and so on. Some possible threats include:

• Market Competition: The Company operates in a competitive infrastructure market and faces competition from several established Indian and international players for the acquisition and execution of concessions relating to both new and existing road projects. While competition intensified significantly over the past decade, market conditions have become relatively more rational in recent years, with players adopting a more cautious approach towards bidding and project selection. In response to the evolving competitive landscape, the Company continuously reviews and adapts its business strategies, policies, and processes to maintain a sustainable and competitive business model. The Governments increasing focus on Engineering, Procurement and Construction (EPC) contracts is also expected to gradually differentiate the participant base across the EPC and Public-Private Partnership (PPP) segments, with established and financially stronger players likely to have a greater presence in the PPP market.

The Company also faces competition from large and well-established infrastructure companies equipped with advanced technologies, modern machinery, and substantial financial and operational resources. Such competitive pressures may affect project acquisition, bidding outcomes, and the ability to secure contracts at commercially favourable prices. The Company therefore continues to focus on operational efficiency, prudent bidding strategies, technological capabilities, and effective cost management to strengthen its competitiveness in the infrastructure sector.

• Our profitability and result of operations may be adversely affected in the event of increases in the prices of raw materials, sub- contracting costs, and costs of consumables and spares or other inputs, or a delay in the supply of raw materials.

• Working capital cycle has been lengthened mainly due to overextended receivables, which has affected the cash flow position of companies in the sector. The Sector continues to face rising material and labor costs. High inflations have diminished private sector investments in capital expenditure. These along with the high interest rates have led to drops in margins

• Infrastructure financing has been a major problem particularly in the roads sector and banks needs to make modifications to meet financing needs of road sector. Long-term funding has been a problem for banks as it has to borrow short-term to lend long-term projects. Funds are required and so is innovation. Long term market instability and uncertainty may damage the opportunities and prevent the expansion.

OUTLOOK

The history of infrastructure Industry in India has witnessed higher growth and will continue to be so because of the following reasons. Sectors like power transmission, roads & highways and renewable energy will drive the investments in the coming years.

India must modernize its infrastructure to support the Viksit Bharat 2047 vision. Rapid urbanization, industrialization and rising demand for transport, energy and digital services require investment in roads, railways, airports, ports, waterways and logistics. Under PM GatiShakti, 352 projects worth approximately Rs 16.10 lakh crore had been evaluated by February 2026.

Transport infrastructure has expanded considerably, with high-speed corridors reaching 5,364 km and airports increasing from 74 in 2014 to 164 in 2025. Future priorities include multimodal connectivity, lower logistics costs and stronger last-mile links. Urban infrastructure also requires major investment. The World Bank estimates that Indian cities need about US$840 billion by 2036 for transport, water, sanitation, waste management, drainage and other services. These investments should incorporate climate resilience, efficient resource use and long-term maintenance. Indias energy transition is progressing rapidly. By July 2026, non-fossil capacity had reached 300.50 GW, exceeding 54% of total installed capacity. India aims to achieve 500 GW of non-fossil capacity by 2030. This will require expanded transmission networks, battery storage, pumped-storage hydropower and modernized grids.

Overall, Indias infrastructure strategy must combine multimodal connectivity, renewable energy, digital systems, climate resilience and lifecycle asset management. Public, private and institutional investment will be essential to achieve sustainable economic growth and the Viksit Bharat 2047 objective.

FINANCIAL PERFORMANCE

An overview of the financial performance is given in the Directors Report. The Audit Committee constituted by the Board of Directors periodically reviews the financial performance and reporting systems.

SUBSIDIARIES COMPANY

The Company having mainly fifteen (15) Subsidiaries at the end of the financial year March 31, 2026.

1. Badi Baktara Toll Private Limited

The Company is engaged in the business of the strengthening, construction, Operation, Maintenance and Transfer of Badi- Baktara-Shahganj (SH-15) Road under OMT Basis in the state of Madhya Pradesh.

2. Madhav (Aaron Sindh Road) Private Limited

The Company is engaged in the business of the Rehabilitation, strengthening, construction, Operation, Maintenance and Transfer of Aaron via Vidoriya - Raghogarh & Ashoknagar (up to Sindh River) awarded package no. 14 by MPRDC in the state of Madhya Pradesh.

3. MI Solar (India) Private Limited

The Company is engaged in generating power and trading, purchasing, marketing, selling, importing, exporting, producing, manufacturing, transmitting, commissioning, distributing, supplying, exchanging or otherwise dealing in all aspects of thermal, Hydro, Nuclear, Solar, Solar Rooftop, Wind power and for installation, maintenance of solar power plant, roof tops and any kind of equipment system related to solar and to provide services for maintenance, renovation and modernization of all kinds of equipment required for Solar Power and Renewable Energy.

4. Seabird Exploration Private Limited

The Company is engaged in any activity in India or elsewhere relating to providing Oil and Gas exploration, production and participation, seismic data service onshore/offshore, managerial and technical support services, technical surveys, data analysis, data processing services, staffing and Technical Equipment renting or leasing for a seismic survey in oil and gas companies including wholly owned subsidiaries in India and overseas and any other person or bodies corporate in India

5. Rahatgarh Berkhedi Corridor Private Limited

The Company acts as an SPV for the four-laning of NH-146 in Madhya Pradesh from Rahatgarh to Berkhedi (10.079 km) under the Bharatmala Economic Corridor, on a DBOT/Hybrid Annuity basis.

6. Msk Projects (I) Private Limited

The Company acts as an SPV for the four-laning of NH-146 in Madhya Pradesh from Rahatgarh to Berkhedi under the Bharatmala Economic Corridor, on a DBOT/Hybrid Annuity basis.

7. Mipl Solar Hanumantiya Private Limited

The Company acts as an SPV for implementing grid-connected solar PV power plants under the Surya Mitra Krishi Feeders Scheme and PM-KUSUM-C feeder solarization component, for supplying power to MPPMCL at Hanumantiya.

8. Mipl Solar Bilehru Private Limited

Company acts as an SPV for implementing grid-connected solar PV power plants under the Surya Mitra Krishi Feeders Scheme and the PM-KUSUM-C feeder solarization scheme. The project aims to generate and supply solar power to MPPMCL at Bilehru.

9. Mipl Solar Kakanwani Private Limited

The Company is incorporated as Special Purpose Vehicle (SPV) for the implementation of grid-connected Solar PV-based Power Plants (SPP) under the Surya Mitra Krishi Feeders Scheme, incorporating the feeder solarization component of the PM-KUSUM-C Scheme. The project is undertaken for the sale of generated power to MPPMCL at Kakanwani.

10. Mipl Solar Katthiwada Private Limited

The Company functions as Special Purpose Vehicle (SPV) for implementing grid-connected Solar PV-based Power Plants (SPP) under the Surya Mitra Krishi Feeders Scheme, including the feeder solarization component of the PM-KUSUM-C Scheme, for the sale of power to MPPMCL at Katthiwada.

11. Mipl Solar Thandla Private Limited

The Company serves as Special Purpose Vehicle (SPV) for the development and implementation of grid-connected Solar PV-based Power Plants (SPP) under the Surya Mitra Krishi Feeders Scheme, incorporating the feeder solarization component of the PM-KUSUM-C Scheme, for the sale of power to MPPMCL at Thandla.

12. Madhavsolar (Udaigarh) Private Limited

The Company is functioning as Special Purpose Vehicle (SPV) for the development and implementation of grid-connected Solar PV-based Power Plants (SPP) under the Surya Mitra Krishi Feeders Scheme, incorporating the feeder solarization component of the PM-KUSUM-C Scheme, for the sale of power to MPPMCL at Udaigarh.

13. Mipl Solar Panchewa Private Limited

The Company is functioning as Special Purpose Vehicle (SPV) for the implementation of grid-connected Solar PV-based Power Plants (SPP) under the Surya Mitra Krishi Feeders Scheme, including the feeder solarization component of the PM-KUSUM-C Scheme, for the sale of power to MPPMCL at Panchwea.

14. Mipl Solar Dhamnod Private Limited

The Company is functioning as an SPV for the development and implementation of grid-connected Solar PV-based Power Plants (SPP) under the Surya Mitra Krishi Feeders Scheme, incorporating the feeder solarization component of the PM-KUSUM-C Scheme, for the sale of power to MPPMCL at Dhamnod.

15. Mipl Solar Semliya Private Limited

The Company is functioning as a Special Purpose Vehicle (SPV) for the implementation of grid-connected Solar PV-based Power Plants (SPP) under the Surya Mitra Krishi Feeders Scheme, incorporating the feeder solarization component of the PM-KUSUM-C Scheme, for the sale of power to MPPMCL at Semliya.

RISK AND CONCERNS

The Companys principal business involves the construction and execution of infrastructure projects, which are exposed to various operational and project-related risks. These include the non-availability or shortage of key resources such as raw materials, steel and cement, delays in project completion due to factors such as cost overruns and force majeure events, as well as legal and technical challenges. Further, ineffective or uncompetitive bidding may adversely impact the Companys operations. While aggressive bidding may result in failure to secure contracts, excessively low bids may lead to losses or very low operating margins. To address these risks, the Company has undertaken various initiatives, including the implementation of risk mitigation strategies, effective cost management and measures to enhance operational efficiency.

HUMAN RESOURCES

Human resources continue to be one of the Companys most valuable assets and a key contributor to its sustained growth and performance. The management places significant emphasis on employee training, welfare, safety and overall development, with a view to strengthening the Companys human resource capabilities. Currently, the Company has more than 150 employees across various levels and functions under its direct employment.

The Company recognizes the importance of its workforce and remains committed to fostering a positive, collaborative and conducive work environment that promotes employee engagement and enhances operational efficiency. The Company continues to strengthen and align its HR policies with the evolving requirements of the business. It remains employee-focused by providing opportunities for professional growth, skill enhancement, greater responsibilities and career development at all levels.

The Company believes that the dedication, expertise and motivation of its employees play an important role in achieving its business objectives and delivering sustained performance. The Board places on record its sincere appreciation and gratitude to all employees for their continued commitment, contribution and hard work towards the growth and success of the Company.

INTERNAL CONTROLS AND THEIR ADEQUACY

Your Company has established a robust internal control framework covering its business operations, financial reporting, risk management and regulatory compliance, supported by the following key measures:

Process & Financial Controls: Documented procedures are in place to ensure proper accounting, safeguarding of assets and reliability of financial information.

Periodic Review: Internal controls are reviewed periodically to identify gaps and implement appropriate corrective measures.

Risk Management: Key operational and financial risks are monitored through established control mechanisms.

Audit Committee Oversight: The Audit Committee reviews the adequacy of internal controls, significant risk areas, internal audit observations and corrective actions.

Continuous Improvement: The Company remains committed to strengthening its internal control framework and aligning processes with best practices to improve efficiency and governance.

CAUTIONARY STATEMENT

Some of the statements in this Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations may be ‘forward looking statements within the meaning of applicable Laws and Regulations. Actual results might differ substantially from those expressed or implied. Important developments that could affect Companys Operations include changes in economic conditions affecting demand, supply and price movements in the domestic and overseas markets in which your Company operates, changes in the Government regulations, Tax Laws and other Statutes or other incidental factors. Market data and products information contained in this Report have been based on information accumulated from various published and unpublished reports and their accuracy, reliability and completeness cannot be assured. The Company assumes no responsibility in respect of forward-looking statements which may be amended or modified in future.

Sources:

- Ministry of Finance, Government of India

- Department for Promotion of Industry and Internal Trade (DPIIT)

- Confederation of Indian Industry (CII)

- Indian Brand Equity Foundation (IBEF)

- Union Budget 2026–27

- Central Electricity Authority, Ministry of New and Renewable Energy,

- Media Reports, Press Releases