Madhucon Projects Ltd Management Discussions

1. Industry Structure and Developments:

The fiscal year 2026 (F.Y.2025-26) marked a pivotal phase in the global economic landscape, characterized by resilient recovery amid geopolitical tensions, supply chain disruptions, and moderating inflation. Globally, GDP growth is projected to moderate influenced by heightened trade barriers and policy uncertainties. However, emerging markets like India demonstrated exceptional buoyancy, driven by domestic demand, infrastructure investments, and diversification efforts. Indias high growth imperative in 2026 and beyond will significantly be driven by major strides in key sectors with infrastructure development being a critical force aiding the progress. Investments in building and upgrading physical infrastructure, especially in synergy with the ease of doing business initiatives, remain pivotal to increase efficiency and costs. Indian Prime Minister also recently reiterated that infrastructure is a crucial pillar to ensure good governance across sectors.

The governments focus on building infrastructure of the future has been evident given the slew of initiatives launched recently. The national master plan for infrastructure, Gati Shakti, has been a forerunner to bring about systemic and effective reforms in the sector, and has already shown a significant headway. Infrastructure support to the nations manufacturers also remains one of the top agendas as it will significantly transform goods and exports movement making freight delivery effective and economical.

The infrastructure sector is a key driver of the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from the Government for initiating policies that would ensure the time- bound creation of world- class infrastructure in the country. The infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. In other words, the infrastructure sector acts as a catalyst for Indias economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure, and construction development projects.

To meet Indias aim of Infrastructure development is the need of the hour. The government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as Make in India and the production- linked incentives (PLI) scheme to augment the growth of the infrastructure sector. Historically, more than 80% of the countrys infrastructure spending has gone toward funding for transportation, electricity, and water, and irrigation.

While these sectors still remain the key focus, the government has also started to focus on other sectors as Indias environment and demographics are evolving. There is a compelling need for enhanced and improved delivery across the whole infrastructure spectrum, from housing provision to water and sanitation services to digital and transportation demands, which will assure economic growth, increase quality of life, and boost sectorial competitiveness.

National Infrastructure Pipeline (NIP): The Government launched the National Infrastructure Pipeline with planned investments exceeding 1111 lakh crore across sectors including roads, railways, airports, ports, irrigation, logistics, and urban infrastructure. Foreign Direct Investment (FDI): India allows up to 100% FDI in several infrastructure segments through automatic routes. FDI inflows between April 2000 and June 2026 include: Construction development sector: US $27.21 billion, Construction infrastructure activities: US $36.85 billion, Foreign investors including sovereign wealth funds, pension funds, and global infrastructure funds are actively investing in Roads, Airports, Renewable energy, Logistics, Data centers and Urban infrastructure

AAI and other Airport Developers have targeted capital outlay of approximately Rs. 98,000 crore (US $11.8 billion) in airport sector in the next five years for expansion and modification of existing terminals, new terminals and strengthening of runways, among other activities. Overall, the infrastructure sector is the winner in this years Budget. However, its success lies in its effective implementation and focusing on projects with quick turnaround time.

Opportunities and Strengths:

The Government of India is taking every possible initiative to boost the infrastructure sector and is expected to invest highly in the infrastructure sector, mainly Transportation, Urban Development & Industrial Projects. Many steps have been taken to improve funding avenues to the infrastructure sector. There are huge opportunities for the industry in the future. Your Company is having opportunities and strengths with an order book position of Rs. 5263 Crores.

Segment-wise performance:

1. Transportation Division:

Your Company has executed many transportation projects such as highways, tunnels, railways, flyovers etc across PAN India. Besides, work amounting Rs. 1611.72 Crore was done till March, 2026 out of the total work amounting to Rs. 1414.65 Crore. Balance work of Rs. 197.07 Crore is outstanding as on date.

2. Irrigation Projects:

Your Company executed many Irrigation projects such as Canals, Dams, Tunnels, Spillways, Pump house and Lift Irrigation Projects across PAN India. At present various Irrigation Projects having a total value of Rs. 1927.54 Crore are under progress across PAN India. Out of which work amounting to Rs. 1220.67 Crore was already executed till March, 2026, while work amounting to Rs. 706.86 Crore is the balance outstanding to be executed.

3. Industrial Projects:

Your Company has executed several Industrial projects such as Coal Handling Plants etc., in PAN India, work amounting Rs. 1723.24 Crore was done till March, 2026 out of the total work amounting to Rs. 1462.39 Crore. Balance work of Rs. 260.85 Crore is outstanding as on date.

III. Outlook:

Future outlook of infrastructure industry in India:

The outlook for the Infrastructure sector appears positive since the country is looking forward with a strong mandate to simulate economic growth.

Some of the recent government initiatives and investments in the infrastructure sector are as follows:

The Central government has increased its capital expenditure (Capex) key highlights: Infrastructure CAPEX allocation crossed ? 11 lakh crore in Budget 2025-26, Infrastructure spending for FY2026-27 is projected at ? 12.2 trillion, Infrastructure CAPEX between FY26 - FY30 expected to reach ? 90 - 100 trillion and Capital Outlay and Future Outlook Indias infrastructure capital expenditure continues to rise steadily. The major sectors driving future growth are: Roads and highways, Railways, Power, Irrigation, Logistics, Renewable energy and Urban Infrastructure.

In order to anticipate private sector investment and to address employment and consumption in rural India, the budget places a strong emphasis on the development of roads, shipping, and railways. Indias ambitious plan calls for spending US$ 1.723 trillion (approximately Rs. 143 trillion) on infrastructure between FY26 and FY30, with a particular emphasis on power, roads, and developing industries like renewable energy and electric vehicles.

Indian Prime Minister emphasized that India is committed to attaining net-zero carbon emissions by 2070, and that the countrys ambitious goal of 500 gigawatts (GW) of renewable capacity by 2030 should be met. In order to make this possible, he unveiled a plan to raise the proportion of gas in Indias energy mix to 15% by 2030, which will involve spending roughly US$ 67 billion over the course of the following five to six years.

Indias infrastructure sector is undergoing unprecedented expansion driven by strong government support, rising private participation, FDI inflows, and strategic national programs such as Bharatmala, PM Gati Shakti, National Infrastructure Pipeline, and Smart Cities Mission. Roads, highways, irrigation, industrial infrastructure, and coal handling projects are expected to remain major contributors to the construction and EPC industry over the next decade. Large-scale investments, policy reforms, multimodal logistics integration, and monetisation initiatives are creating substantial opportunities for infrastructure developers, EPC contractors, material suppliers, and investors. With sustained capital expenditure, increasing industrialization, and strong policy push, the Indian infrastructure sector is expected to maintain robust long-term growth with estimated sectoral CAGR ranging between 7% and 12% across major infrastructure segments.

Three significant economic railway corridor initiatives - energy, port connectivity, mineral and cement, and high traffic density - will be carried out by the railway industry. Additionally, in order to improve passenger safety, convenience, and comfort, forty thousand standard rail boggies will be converted to Vande Bharat standards. In the aviation sector, the number of airports has doubled. Indian airlines have taken the initiative to order more than a thousand new aircraft. As part of the PM Awas Yojana (Gramoen), two crores more houses to be taken up in the next five years.

Your Company is giving major thrust in various infrastructure projects to reap the benefit of growth in infrastructure sector.

Road Ahead:

The road map to Indias infrastructure is exciting and futuristic, and it will not be an exaggeration to say that the new decade seems to be a promising one.

During the current fiscal year, capital expenditures (capex) are on the rise, which bolsters ongoing infrastructure development and fits with 2027 goals for Indias economic growth. In order to anticipate private sector investment and to address employment and consumption in rural India, the budget places a strong emphasis on the development of roads, shipping, and railways.

Global investment and partnerships in infrastructure, such as the India-Japan forum for development in the Northeast are also indicative of more investments. These initiatives come at a momentous juncture as the country aims for self-reliance in future-ready and sustainable critical infrastructure.

India, it is estimated, needs to invest 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.

As a result of digitalisation and opportunities that tier II and III cities present for economic growth, the divide between metro and non-metros is blurring, moving to the new era of infrastructure growth. Commercial real estate properties have witnessed exponential growth in demand across Tier II & III cities as information technology and information technology enabled services and banking financial services and insurance focused organizations are increasingly decentralizing their operations to adapt to the new normal.

Civil Aviation Ministrys Vision 2040 report states that there will be 190-200 functioning airports in India by 2040. Delhi and Mumbai will have three international airports each, while top 31 Indian cities will have two operational airports each. 220 destinations (airports/heliports/water aerodromes) under UDAN are targeted to be completed by 2026 with 1000 routes to provide air connectivity to unconnected destinations in India.

Indias infrastructure forms an integral part of the countrys economic ecosystem. There has been a significant shift in the industry that is leading to the development of world-class facilities across the country in the areas of roads, waterways, railways, airports, and ports, among others. The country-wide smart cities programmes have proven to be industry game-changers. Given its critical role in the growth of the nation, the infrastructure sector has experienced a tremendous boom because of Indias necessity and desire for rapid development. The expansion has been aided by urbanisation and an increase in foreign investment in the sector.

The infrastructure sector has become the biggest focus area for the Government of India. Indias GDP is expected to grow by 8% over the next three fiscal years, one of the quickest rates among major, developing economies, according to S&P Global Ratings. India and Japan have joined hands for infrastructure development in Indias Northeast states and are also setting up an India-Japan Coordination Forum for development of Northeast to undertake strategic infrastructure projects for the region.

India being a developing nation is set to take full advantage of the opportunity for the expansion of the infrastructure sector, and it is reasonable to conclude that Indias infrastructure has a bright future ahead of it.

IV. Risks and Concerns:

The Company has the major effect on timely completion of various projects. The availability of construction labor force is expected to affect the projects for some time. On the other hand, other construction delays continue to be a concern factor which stems from number of factors outside the control of the project sponsors, which includes land acquisition, regulatory approvals, inflation, and litigation etc., which can delay the timely completion of the project and increase in cost of project. This can, in turn, lead to additional funding, additional cost of fund etc.

As the sector is driven by infrastructure projects to a large extent, it is expected to be hit severely by the current levels of uncertainty, dismal business and consumer sentiments, loss of income as well as the diversion of government funds towards other sectors.

I. Internal Control Systems and their adequacy:

Your Company has adequate system of Internal Control developed by our in-house Internal Audit team consisting of qualified and experienced accounting, costing and technical professionals to ensure that the resources of the Company are used efficiently and effectively, all assets are safeguarded and protected against loss from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly, financial and other data are reliable for preparing financial information and other data and for maintaining accountability of assets.

II. Discussion on financial performance with respect to operational performance:

During the year under review, your Company has decrease in a total income (standalone) of Rs. 66,146.80 Lakhs against Rs. 85,592.45 Lakhs and Earning per Share (EPS) of Rs.1.51 against Rs. (2.85) of the Previous Year.

III. Human Resources/Industrial Relations:

Your Company has recruited competent Professionals at all levels of management for all verticals of the Company as a part of corporate restructuring process and strengthening its Business Verticals to meet the pace of growth of your Company. The Industrial relation is very cordial.