Modulex Construction Technologies Ltd Management Discussions

1. Industry Structure and Developments

The Construction sector in India continues to be one of the most significant contributors to economic growth, infrastructure creation and employment generation. The sector has strong forward linkages with core industries such as steel, cement, logistics, engineering and construction technology solutions.

Infrastructure continues to account for more than half of total construction demand in India, while the balance is driven by residential, commercial and industrial development. The sector is estimated at over USD 120 billion and continues to benefit from sustained government and private sector investments.

In recent years, the industry has witnessed a structural shift towards faster, technology-enabled and sustainable construction methods. Improved policy stability, increased infrastructure allocation and revival in private capital expenditure have collectively strengthened sector momentum.

Going forward, Indias construction sector is expected to remain in a strong growth cycle, driven by urbanisation, industrial expansion, housing demand, logistics infrastructure and adoption of modern construction technologies.

2. Industry Opportunities and Growth Drivers

The Government of India continues to prioritize large-scale infrastructure development across railways, roads, ports, waterways, housing and industrial corridors. Initiatives such as "Make in India" and smart infrastructure development are expected to generate long-term demand visibility for the sector.

Rapid urbanisation, especially in Tier I and Tier II cities, continues to drive structural housing demand supported by rising incomes, demographic expansion and changing lifestyle patterns.

In addition, increasing emphasis on speed of execution, cost efficiency and sustainability is accelerating the shift from traditional construction methods towards modular and prefabricated construction technologies, creating a significant long-term growth opportunity for industry participants.

3. Business Overview and Strategic Positioning

Modulex Construction Technologies Limited is engaged in the business of modular construction and prefabricated building systems, offering integrated solutions spanning design, engineering, manufacturing and project execution.

The Company is strategically positioned to participate in the transition of the construction industry from conventional project-based execution to an industrialised, manufacturing-led construction model. During the year, the Company continued development of its advanced steel modular manufacturing facility at Indapur, Pune, which is designed to serve as a scalable platform for delivering high-quality, time-efficient construction solutions across residential, commercial, institutional, hospitality and industrial segments.

The Company believes that modular construction represents a structural shift in the industry, offering significant advantages in terms of speed, predictability, quality control and sustainability.

4. Operational Development and Outlook

The Companys manufacturing facility is located on a 40-acre integrated industrial site at Indapur, Pune District, with strong logistical and utility connectivity.

The facility has a planned annual capacity of approximately 2,00,000 sq. meters, configured across four production lines designed for scalable and flexible output across multiple building categories.

During FY 2025–26, the Company completed construction of one manufacturing shed, installed key machinery and commenced trial production activities. The Company is currently in the final phase of operational stabilisation and is expected to commence commercial production shortly.

This transition from setup phase to commercial operations marks a significant milestone, enabling the

Company to actively participate in large-scale infrastructure and modular construction opportunities in India and select global markets.

5. Risks and Mitigation Approach

The Company operates in a dynamic construction environment that is exposed to multiple industry risks including input cost volatility, project execution delays, regulatory dependencies and subcontractor performance risks.

The industry is also sensitive to macroeconomic factors such as interest rates, liquidity conditions and government spending cycles. Additionally, modular construction requires continuous technological adaptation to remain competitive in a rapidly evolving industry.

The Company mitigates these risks through strong project governance frameworks, structured vendor management systems, disciplined cost control mechanisms and continuous investment in technology and operational efficiency.

6. Internal Control Systems

The Company has established a robust internal control framework covering financial reporting, operational processes, compliance requirements and asset safeguarding.

These systems operate through defined approval hierarchies, standard operating procedures, internal audits and periodic management reviews. The Audit Committee oversees the effectiveness of internal financial controls and ensures compliance with regulatory requirements.

The management believes that the internal control systems are adequate, effective and aligned with the scale and complexity of current operations.

7. Financial Performance Review

The Financial Performance for FY 2025–26 is summarised below:

Particulars	FY 2025–26	FY 2024–25
Total Revenue (Rs. lakhs)	250.09	18.47
Total Expenditure (Rs. lakhs)	294.42	196.12
Profit / (Loss) before tax	(44.33)	(177.25)
Profit / (Loss) after tax	(44.33)	(177.25)
EPS (Basic & Diluted)	(0.06)	(0.26)

The results reflect the Companys strategic investment phase; wherein significant resources have been deployed towards establishment of its modular manufacturing facility and development of long-term operational capabilities.

The management expects that commencement of commercial operations will mark the transition into a revenue scaling phase, thereby significantly improving financial performance in the coming years.

8. Risk Management Framework

Risk management remains an integral part of the Companys governance and operational framework.

The Company identifies and monitors risks across financial, operational, regulatory, contractual and environmental domains.

Key risk categories include financial exposure from market fluctuations, political and regulatory risks, legal and compliance risks, subcontractor-related risks and techno-operational risks associated with complex project execution environments.

The Company adopts a structured and proactive risk mitigation approach supported by contractual safeguards, operational monitoring systems and periodic review mechanisms.

9. Human Resources and Capability Development

The Company recognises human capital as a key enabler of its growth strategy. Focus continues to remain on strengthening technical capabilities, operational efficiency and leadership development.

During the year, the Company implemented structured training programs covering safety standards, technical skill enhancement and behavioural development. Emphasis was also placed on building a performance-driven and innovation-oriented culture.

Employee relations remained stable and supportive of the Companys growth objectives.

10. Cautionary Statement

This report contains forward-looking statements based on current expectations and assumptions.

Actual results may differ materially due to changes in economic conditions, regulatory developments, competitive dynamics and other external factors beyond the Companys control.

Modulex Construction Technologies Limited

Sd/-	Sd/-
Suchit Punnose	Jayesh Sheth
Whole Time Director	Joint Managing Director
DIN: 02184524	DIN: 03506031
22nd May, 2026
Pune