MBL Infrastructure Ltd Management Discussions

Indian Economy

Overview: The Indian economy continues to rank among the fastest-growing major economies globally, driven by broad-based expansion across manufacturing, services and infrastructure, alongside steady improvement in industrial and business activity.

The economic environment faces headwinds from growing tensions in the Middle East and trade policy uncertainty. Domestic investment has emerged as a central pillar of Indias economic expansion, reflecting rising confidence across households, corporates, and institutional investors. Growth was primarily driven by strong domestic demand, supported by private consumption and investment. Indias medium-term growth potential is assessed at around 7%, supported by macroeconomic stability and structural reforms. The low current account deficit (CAD), healthy foreign exchange reserves, strong corporate and bank balance sheets, and fiscal prudence bolstered Indias resilience, with capital outflows and a depreciating rupee the main challenges in an otherwise resilient macroeconomic environment. The depreciation of the rupee relative to the US dollar has added to inflationary pressures by raising import costs, particularly for fuel and fertilisers.

Outlook: With Indias economy showing resilient growth, supported by strong domestic demand, policy reforms, and a healthy investment pipeline, several new projects and developments are underway across key sectors. The overall expenditure of the government has increased with continuous focus on capex led growth and infrastructure development.

Indian Road Infrastructure sector overview

Indias infrastructure sector is witnessing robust demand driven by integrated planning, higher investments and technology-led execution, positioning the country for sustainable economic growth and scalable infrastructure development. Road Transport is critical infrastructure for economic development of a country. It influence the pace, structure and pattern of development.

At 63.73 lakh km, India has the second-largest road network in the world. With increased budgetary allocation over the years, guality of roads has improved substantially. The allocation for the Ministry of Road Transport and Highways in the Union Budget 2026-27 is estimated at Rs.3,09,875 crore (US$ 34.4 billion), marking an 8% increase over the revised estimateof Rs.2,87,142crore(US$ 32.6 billion) in 2025-26. Of the total allocation, National Highways Authority of India is set to receive Rs.1,87,293 cr. The expenditure covers key areas such as the development of national highways, expressway projects, lane expansion under various programmes, and enhancing road connectivity in left-wing extremism-affected regions, reflecting the governments continued focus on strengthening infrastructure.

In a significant effort to enhance infrastructure, the government approved eight national high-speed corridor projects involving 936 km of highways at a total cost of Rs.50,655 crore (US$ 6.09 billion). The Government has taken up various initiatives to upgrade and strengthen National Highways Network through various programmes including Bharatmala Pariyojana.

As the sector continues to expand, the focus is now shifting towards addressing critical challenges such as project financing, dispute resolution, traffic congestion, road safety and the adoption of advanced technologies for tolling and traffic management. Emerging solutions like digital tolling through FASTag and Multilane Free Flow electronic toll collection system, Advanced Traffic Management System, and innovative tunnelling technigues are redefining the future of highway infrastructure in India.

The Government aims to boost corporate investment in roads and shipping sector, along with introducing business-friendly strategies, which will balance profitability with effective project execution. 100% Foreign Direct Investment (FDI) is allowed under the automatic route in the road and highways sector, subject to applicable laws and regulation

Asset monetisation through InvITs and REITs has unlocked over Rs.1.5 lakh crore, recycling funds into new projects and attracting global investors. National Highways Infra Trust (NHIT) raised Rs. 16,000 crore (US$ 1.92 billion) in InvIT round- 3, stretches aggregate length of 889 kilometres of national highways.

The historic surge of prices of bitumen driven by geopolitical conflicts in West Asia severely disrupted crude supply chains and has triggered widespread impacts across the infrastructure and construction sectors. Higher crude oil prices and tighter gas supplies will weigh on growth, especially in manufacturing, construction and services.

Indias infrastructure growth is being accelerated through strong policy support such as PM GatiShakti, National Fogistics Policy, Smart Cities Mission, and large-scale investments in highways, railways, metros, and digital infrastructure, strengthening connectivity, logistics efficiency, and long-term economic development. The government is pushing for a transition to multi-lane free-flow and GNSS/GPS-based tolling using ANPR (Automatic Number Plate Recognition) cameras, which will steadily phase out traditional toll booths.

With the government prioritising highways, expressways, tunnels and logistics corridors, the road network is expanding at an unprecedented pace, playing a critical role in strengthening connectivity, boosting trade and supporting Indias ambition of becoming a global economic powerhouse.

Government Initiatives:

PM Gati Shakti National Mater Plan: It was launched to build integrated world-class infrastructure in an integrated manner. The scheme emphasis faster project approvals, better coordination among ministries and holistic development It focuses on optimizing costs, improving efficiency, and reducing project delays, especially in transport and logistics corridors. A milestone of assessing 208 big-ticket infrastructure projects worth Rs.15,39,000 crore (US$ 174.99 billion) of various Ministries adhering to PM Gati Shakti principles has been achieved.

Bharatmala Pariyojana Phase-1: It was approved by the Government in 2017 covering a length of 34,800 km across the country at an estimated outlay of Rs.5,35,000 Crore to optimise freight movement, reduce logistics costs, improve inter-state connectivity, Strengthen border road infrastructure, develop coastal and port-connectivity roads, Build greenfield expressways .Under the program, projects covering a total length of 26,425 km have been awarded and out of this, 22,590 km has already been constructed upto March 2026 significantly strengthening the countrys transportation and logistics network. Several landmark projects under the plan improved mobility across difficult terrains and strategic regions.

National Monetization Pipeline 2: The government announced the second phase of NMP for the five-year period FY26 to FY30, with an estimated value of Rs.10 Lakh Crore. The sectors include Highways and urban infrastructure. It aims to contribute to accelerated infrastructure development through upgrading and expansion of transportation networks, including highways, railways, ports and airports, along with other sectors. It is aligned with the mission of achieving Vi ksit Bharat through accelerated infrastructure development and that the NMP has the potential to fuel Indias growth momentum.

Vision 2047: Viksit Bharat initiative represents governments ambitious vision to transform the nation into a developed country by 2047. A cornerstone of the Vi ksit Bharat initiative is the ambitious plan for comprehensive infrastructure development across both physical and digital domains, which includes significant upgrades and expansion of transportation networks, encompassing highways, railways, ports, and airports.

Pradhan Mantri Gram Sadak Yojana-IV: The government has approved the implementation of Pradhan Mantri Gram Sadak Yojana-IV (2024-29) with a total outlay of Rs.70,125 crore (US$ 8.21 billion) for constructing 62,500 km of roads to connect 25,000 unconnected habitations and upgrade bridges. The government has budgeted Rs.19,000 crore for the PMGSY for FY 2026-27 from the revised estimate of Rs.11,000 a year earlier.

Infrastructure Risk Guarantee Fund: Infrastructure projects often face challenges such as early-stage project construction & development risks, delays, and uncertainty in execution. To address these issues, the Government has introduced the Infrastructure Risk Guarantee Fund to strengthen investor confidence and ensure the timely delivery of projects. This fund will provide a wide of partial guarantees to lenders, reducing default risks for private developers and making financing more secure.

Challenges faced by the infrastructure sector in India

Political and Regulatory Risks: Infrastructure projects in India are exposed to multiple regulatory challenges throughout their lifecycle, from pre-tendering to post-construction. These risks include delays in obtaining necessary approvals, changes in regulatory frameworks, breach of contractual obligations, and occasional denial of government payments. Such uncertainties significantly impact investor sentiment and future capital inflows.

Land Acquisition: Land acguisition remains a major bottleneck for infrastructure development. Projects are often delayed due to resistance from farmers and local communities, procedural inefficiencies, and legal disputes.The complexity and opacity of land acguisition processes discourage private investors from mobilising resources for large road, energy, and industrial projects.

Evolving Environmental Regulations: Infrastructure projects must increasingly comply with dynamic and evolving environmental standards. Midway changes in environmental guidelines often result in delays, redesigns, and cost escalations, making project execution more complex and uncertain.

Access to Long-Term Financing: Given the long gestation period of infrastructure projects, securing long-term, stable financing remains a significant challenge. Financial institutions and investors are cautious about committing resources to projects where returns are delayed and contingent upon regulatory and operational risks

Growth Drivers:

Urbanisation: The Government places emphasis on developing cities with populations above 5 lakh, positioning them as new growth centres. Investments in housing, transport, and urban infrastructure aim to spread growth beyond metropolitan areas, ensuring balanced regional development. To amplify the potential of urban centres, the government has introduced the concept of City Economic Region (CER) and allocation of T5000 crores perCER over five years.

Infrastructure Financing Ecosystem: Institutions like the National Investment and Infrastructure Fund (NIIF) and the National Bank for Financing Infrastructure and Development (NaBFID) have emerged as pivotal anchors, mobilising global and domestic capital and providing long-term development finance to strengthen Indias infrastructure ecosystem. Alongside these institutions, instruments such as Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) have enabled monetisation of completed assets and recycling of funds into new projects. The government is estimated to spend T12.2 lakh crore in 2026-27 as public investment continuing its upward trajectory and underscoring the Governments commitment to infrastructure-led growth.

Increasing Population: Indias overall population surged to approximately 1.48 billion in 2026, exerting immense pressure on urban areas and the supporting road and transport infrastructure. A larger and growing population directly sustains demand for road infrastructure, as higher population densities reguire denser connectivity networks and greater throughput capacity on existing road infrastructure.

Opportunities

Roads & Highways: India is planning to upgrade 25,000 km of two- lane highways to four lanes at Rs.10,00,000 crore (US$ 117 billion). Additionally, 16,000 km of four-lane highways will be expanded to six lanes for Rs.6,00,000 crore (US$ 69.93 billion). The work is expected to start by 2027. The government is aiming to build 26,474 km of rural roads in this Financial Year. The Hybrid Annuity Model (HAM) presents lucrative opportunities in Indias infrastructure sector, particularly in roads and highways. Strong civil construction companies have significant opportunities to win Engineering, Procurement, and Construction (EPC) contracts tied to HAM concessionaires.

Monetization of National Highways

The government has proposed monetization of National Highways under theToll-Operate-Transfer (TOT) and Infrastructure Investment Trust (InvIT) modes. The initiative is part of the asset monetization strategy focused on leveraging operational National Highway assets to mobilize capital for further infrastructure development, promote private sector participation and accelerate the expansion and modernization of the National Highway network. The identified National Highways assets with a total combined length of 1692.5 km comprise of stretches across nine states. These Highway assets collectively represent economic and logistics corridors with established traffic potential and robust connectivity significance.

Commonwealth Games 2030: The 2030 Commonwealth Games which will be hosted in Ahmedabad.This historic "Centenary Games" presents growth opportunities across infrastructure development, sports management, tourism, and business investment. With venue construction, road upgrades, metro network extension and airport expansion planned, the civil engineering and EPC sector is expected to play a central role.

Outlook:

Indias road infrastructure sector is undergoing a transformational phase, driven by strong policy reforms, increased public investment and growing private sector participation. In the Union Budget 2026- 27, capital investment outlay for infrastructure has been increased to Rs.12.22 lakh crore (US$ 132.8 billion). An Infrastructure Risk Guarantee Fund will be set up to provide partial credit guarantees and de-risk private investment during the construction phase. India intends to enhance its infrastructure to reach economic growth target of US$ 5 trillion. Construction continued to grow at a robust pace, supported by sustained infrastructure spending.

Company Overview

MBL specialises in executing civil engineering projects across various sectors, including highways (EPC, BOT and O&M), housing, urban infrastructure, railways/metro, and other infrastructure.

MBL was among the first contractors to be awarded contracts for the prestigious North South East West Corridor by NHAI and was the first to successfully complete the project. MBL was one of the initial contractors to be entrusted with the maintenance of National Highways by NHAI. The Company has consistently demonstrated signiflcantgrowth in its bid capacity and pregualiflcation capabilities.

MBL is accredited for executing civil engineering projects under the following certifications:

ISO 9001: 2015 - Recognizing the organizations commitment to guality management systems.

IS014001:2015-Acknowledging the organizations environmental management systems.

ISO 45001: 2018 - Certifying the organizations health and safety management systems.

Financial Overview

The total income of the Company during the FY 2025-26 was Rs.21,214 lakhs on standalone basis and Rs.27,159 lakhs on consolidation basis as against Rs.20,341 lakhs on standalone basis and Rs.24,835 lakhs on consolidation basis during FY 2024-25. The Company reported a profit after tax including exceptional item of Rs.927 lakhs on standalone basis and loss of Rs.2,259 lakhs on consolidation basis during FY 2025-26 as against profit of Rs.4,879 lakhs (including exceptional item of Rs.4,026 lakhs) on standalone basis and profit of Rs.16,949 lakhs (including exceptional item of Rs.27,842 lakhs) on consolidation basis during FY 2024-25.

Key ratios

Key financial ratios are given below:

Particulars	FY 2025-26	FY 2024-25
Debtors Turnover	1.01	0.68
InventoryTurnover	8.80	5.65
Interest Coverage Ratio	3.89	1.77
Current Ratio	2.29	2.03
Debt-Eguity Ratio	0.54	0.52
Operating Profit Margin (%)	50.45	9.98
Net Profit Margin (%)	4.37	23.99
Return on Net Worth (%)	0.68	3.68

The key ratios are not comparable as the operations of the Company were not normal from 30.03.2017 till 04.09.2024 due to CIRP under IBC, 2016. The documents for implementation of the Approved Resolution Plan by the Banks have been executed and the date of implementation of the Package/ Resolution Plan has been declared by the Banks as 04.09.2024

Risk management framework Overview

The Company has developed a robust risk management framework designed to effectively identify, assess, and address operational and business risks. Senior management regularly evaluates key risk areas, and detailed policies and procedures are implemented to detect, mitigate, and monitor risks at all levels. When necessary, the Company conducts comprehensive risk assessments through external agencies, which provide strategic recommendations to the Board for enhancing risk management and implementing appropriate controls.

Risk area	Nature of risk	Mitigation strategy
Strategic Risk	The Companys limited business strategy could impact its ability to capitalise on opportunities in a growing market.	TheCompany has developed extensive expertise in the Roads & El ighways, Building, blousing & Urban Infrastructure, Industrial Infrastructure, Railways, Metro and other Infrastructure sectors supported by a dedicated team that keeps track of industry trends. Growth opportunities are being evaluated across a wide canvas of sectors spanning Steel Plant modernisation, civil engineering projects, Urban Infrastructure Projects, Public Health Engineering, Irrigation Infrastructure, Electrical Transmission, Industrial Infrastructure Projects, Developments connected to the Commonwealth Games in Ahmedabad and strengthening the Quarrying, Concrete, Bitumen, Construction material & tolling divisions of the Company.
3roject execution risk	Inability to secure or execute large projects within specified timelines could lead to project delays and tied-up funds. Delays in project completion arising fromchallenging terrain, adverse weather conditions, labour shortages, supply chain disruptions, cost escalations or force majeure events may impact project timelines, profitability and client relationships.	The Company remains focused on projects that align with its core strengths, enabling us to leverage technical expertise and ensure timely completion. We also have specialised divisions dedicated to critical aspects like bitumen, concrete, eguipment, and guarry operations, ensuring smooth execution and minimising delays. Deployment of experienced project management teams, extensive owned eguipment fleet, detailed project planning, milestone-based monitoring systems, robust subcontractor management and periodic project reviews to identify and address execution bottlenecks.
Order book concentration risk	A significant portion of the current order book is concentrated in Rajasthan and Madhya Pradesh, exposing the Company to region-specific economic, administrative and execution-related risks.	Active participation in bids across multiple states and infrastructure segments, diversification of project portfolio and pursuit of new order inflows targeted at broadening geographic and client exposure.
Receivables and claims recovery risk	Delays in settlement of receivables, arbitration awards and contractual claims may affect liguidity, working capital availability and cash flow visibility.	Structured claims management framework, dedicated legal and commercial teams, ongoing arbitration proceedings, direct engagement with government authorities and regular monitoring of claim recovery progress.
Debt servicing and liguidity risk	Scheduled repayment obligations related to NCDs and ECBs could exert pressure on future cash flows if expected operating and recovery inflows are delayed.	Disciplined cash flow planning, utilisation of operating cash flows from existing assets and projects, anticipated proceeds from claims settlements and continuous monitoring of debt servicing capabilities.
Regulatory and oolicy risk	Changes in government policies, project awarding mechanisms, EPC contract structures, concession frameworks or infrastructure spending priorities may influence business opportunities and project economics.	Continuous monitoring of policy developments, active engagement with government agencies and diversification across EPC, BOT, OMT and other infrastructure project categories.
Competitive risk	Increased competition from established contractors and financially strengthened industry participants may impact project acguisition opportunities and bidding margins. The increasing number of midsized players entering the infrastructure sector could pose challenges to the Companys growth aspirations.	Leveraging execution track record, technical expertise, owned eguipment base, cost efficiencies and strengthened financial position to enhance bidding competitiveness and project delivery capabilities. Smaller-scale road and highway projects offer easier entry points compared to larger projects, which attract fewer participants.The Company has built a strong reputation as a reliable partner for emerging projects. Our proven ability to manage largescale projects nationwide has established us as one of Indias leading road development firms.
BOT asset performance risk	Lower-than-expected traffic volumes, toll collection fluctuations or operational disruptions could affect returns from BOT assets and concession operations.	Toll escalation provisions, proactive asset maintenance, experienced operations and maintenance teams, regular performance monitoring and stakeholder engagement to support asset efficiency.
Human capital risk	Dependence on key managerial personnel, technical experts and project leadership teams may create operational challenges in the event of attrition or talent shortages. High attrition rates, especially of specialised professionals, could erode the Companys competitive edge. Recruitment and retention of skilled professionals is an ongoing challenge in the industry.	Succession planning initiatives, talent retention programmes, leadership development efforts, employee engagement measures and capabilitybuilding interventions across functions. The Company fosters an inclusive, supportive work environment where leadership is cultivated at all levels through clear structures of responsibility and accountability. Competitive compensation and comprehensive training programs are provided to employees, which helps retain top talent. These practices have resulted in a low employee turnover rate, ensuring continuity and expertise within the organisation.
Macroeconomic and sectoral risk	Economic slowdowns, reduction in government infrastructure expenditure, inflationary pressures, commodity price volatility and supply chain disruptions may impact project execution and profitability.	Focus on government-backed infrastructure projects, prudent project selection, diversified procurement sources, cost-control initiatives and ongoing monitoring of macroeconomic developments.
Legal and contractual risk	Infrastructure projects often involve complex contractual obligations, disputes, arbitration proceedings and compliance reguirements that may result in financial or operational exposure.	Comprehensive contract review processes, dedicated legal oversight, structured dispute resolution mechanisms and regular compliance monitoring to minimise contractual risks.
Input Risk	The timely availability of high-guality resources (raw materials and finances) is crucial for the completion of infrastructure projects. The cost escalations may impact profitability.	The Company exercises direct control over its projects, enabling precise management of materials and resources. Key raw materials like steel, bitumen, and cement are sourced directly from well-established manufacturers. We operate captive guarries to ensure the timely availability of bulk raw materials at competitive costs. As most of our contracts include input escalation clauses that safeguard profitability in case of cost fluctuations.
Quality Risk	For an infrastructure company, product guality is paramount. Any failure to meet guality standards can lead to negative publicity and harm the Companys reputation.	The Company procures raw materials exclusively from trusted brands like SAIL, TISCO, RINL, Ultratech, and others, minimising guality risks. We maintain in-house laboratories and employ skilled engineers to oversee guality checks throughout the project lifecycle. Regular inspections are conducted during the execution phase, and dedicated divisions handle guarrying, mining, concrete, and bituminous operations. The Companys rigorous guality control processes ensure that all projects meet the highest standards before delivery to clients.

Risk governance

The Companys risk management framework is integrated with its strategic and operational decision-making processes. Risks are periodically reviewed by senior management and the Board to facilitate the timely identification of emerging challenges, effective implementation of mitigation measures and alignment with the Companys long-term growth and value creation objectives. During the year, MBLs risk management efforts remained focused on preserving financial resilience, strengthening operational controls and supporting the Companys re-entry into active project execution and business development opportunities.

Human Resources

We place significant value on human principles and focus on providing our employees with the necessary support, both moral and financial. Our senior management team consists of experienced professionals with diverse expertise in various positions and regions. As of March 31, 2026, our consolidated workforce includes 246 (Standalone 102) dedicated employees.

Health, Safety, and Environment

MBL has established a comprehensive Health, Safety, and Environment (HSE) Policy with the goal of maintaining a safe and healthy work environment, striving for zero injuries and a commitment to environmental preservation. We regularly conduct training for our staff, perform audits, and hold ISO 9001, ISO 14001, and OHSAS 45001 certifications to ensure effective policy implementation.

Our management places a strong emphasis on health, safety, and environmental responsibility, with structured Standard Operating Procedures (SOPs) in place at every stage of construction. We prioritise the safety and well-being of our employees, partners, service providers, and the general public, alongside minimising our environmental impact. HSE is a core focus and is integrated into our operations at every level. Our HSE policy ensures compliance with legal standards while minimising visual impact and disruptions to the public. We continuously engage our employees to raise safety awareness and eliminate unsafe practices.

Internal Control Systems and Adequacy

We maintain a robust internal control system to ensure that all transactions are properly authorised, recorded, and reported, while safeguarding our assets. This system is supported by well documented policies, guidelines, and procedures. With over 30 years of experience in the industry, these internal control systems have evolved to meet our growing needs. Furthermore, we have implemented an extensive CCTV surveillance system at all project sites to enhance security. These measures are regularly reviewed, and improvements are made as necessary to ensure continued effectiveness.

Cautionary Statement

The statements in the Management Discussion and Analysis Report regarding projections, estimates, and expectations are made in good faith. The achievement of the stated results is subject to risks, uncertainties, and assumptions that may not always prove accurate. Market data and information are gathered from both published and unpublished sources, and while we strive for reliability, their accuracy, completeness, and dependability cannot be guaranteed.