Nacdac Infrastructure Ltd Management Discussions

1) Overview of the Infrastructure Industry

Indias infrastructure cycle remains in an expansion phase, led by sustained public capex, faster project clearances, and multimodal planning under PM Gati Shakti and the National Logistics Policy. The Union Budget FY 2025-26continues the investment push with Rs.11.21 lakh crore central capex (=3.1% of GDP) and a Rs.1.5 lakh crore 50-year, interest-free facility to States to catalyse capital projects?plus an Asset Monetisation Plan 2025-30 targeting Rs.10 lakh crore to recycle capital into new builds.

Within transport, execution momentum stays high. For national highways, the Centre has set a 10,000 km construction target for FY 2025-26 (after ~10,400-10,600 km in FY 2024-25), with additional focus on tribal and Northeast corridors and highspeed corridors.

In railways, capital expenditure of Rs.2.65 lakh crore has been earmarked for FY 2025-26 to accelerate new lines, rolling stock, and network upgrades, keeping rail a key growth engine for freight and passenger mobility.

Policy integration is improving logistics efficiency. The government highlights progress under Gati Shakti/NLP/ULIP and logistics parks;inland waterways moved a record ~145.5 MT in 2024-25, signalling traction in multimodal shift and last-mile digitisation. Independent analyses also point to a declining logistics-cost trajectory as integration matures.

Structural programs continue to anchor the pipeline: the National Infrastructure Pipeline (NIP) laid out ~Rs.111 lakh crore of investments for FY 2020-25 and created a discipline around project preparation, which, together with newer monetisation and state- capex levers, underpins project visibility into the next leg of the cycle.

Net takeaway: Indias infra outlook remains constructive?robust central and state capex, monetisation to crowd-in praaate capital, and multimodal planning are expanding opportunities across buildings, urban infrastructure, bridges/ FOBs/ROBs, and increasingly roads & highways?all areas core to Nacdacs capabilities.

2) Business Overview of the Company

The story of Nacdac Infrastructure Limited is one of steady evolution and growing credibility. What began in 2012 as a modest civil works company has, over the years, matured into a trusted infrastructure development partner for Government bodies, PSUs, and private sector clients alike. Headquartered in Ghaziabad, Uttar Pradesh, the Company today is synonymous with execution excellence, financial discipline, and stakeholder trust.

From constructing residential and commercial complexes in our early years, we gradually expanded into multi-storey buildings, bridges, foot overbridges, railway overbridges, and electrical infrastructure. With every project delivered on time and to high quality standards, our reputation strengthened, opening doors to larger and more prestigious opportunities. Over the last decade, we have successfully executed more than 63 projects worth over Rs.120 crores, a testament to both our technical capabilities and our client- focused approach. A recent breakthrough has been our entry into the ecosystem of NBCC (India) Limited, one of the countrys largest Government infrastructure companies, through the award of a prestigious multi-storey building project. This marks not only an achievement for Nacdac but also a stepping stone into a new league of projects. Our journey reached a defining milestone in 2024, when we entered the capital markets with our Initial Public Offering (IPO) on the SME Platform of BSE. The issue received an overwhelming response, being subscribed 2209 times ? the highest ever in the history of Indias capital markets.

This historic feat reflects the immense confidence that investors place in our vision, leadership, and longterm growth prospects.

Behind these achievements lies a simple philosophy: we build with precision, deliver with responsibility,

and grow with purpose. Our ISO certifications in Quality, Environment, and Occupational Safety, combined with our Class A Contractor status, reinforce the trust our stakeholders have in us. Most importantly, our people ? skilled, motivated, and deeply committed ? are at the heart of our business. By retaining talent and nurturing growth, we ensure continuity and innovation in everything we do.

Today, Nacdac stands not just as a company with a strong track record, but as a rising force in Indias infrastructure sector, poised to expand into roads, highways, and large-scale public works. The path ahead is ambitious, but our foundation of trust, resilience, and excellence ensures that we are ready to seize the opportunities before us.

3) Opportunities, Threats & Challenges

Opportunities

Indias infrastructure sector is at an inflection point. With the Governments continued emphasis on roads, highways, bridges, housing, and urban development, opportunities for mid-sized, agile players like Nacdac are expanding rapidly. Key growth levers include:

• Government Spending Push: The Union Budget 2025-26 has allocated a record Rs.11.21 lakh crore in capital expenditure, with strong emphasis on transportation and urban infrastructure.

• Roads & Highways Expansion: Targeted construction of 10,000 km of highways and a strong pipeline under NHAI creates an immediate opportunity for Nacdac to diversify into this high-potential segment.

• PSU & Government Contracts: Breakthrough entry into NBCC (India) Limited strengthens our credentials to secure further projects from other PSUs and State bodies.

• Urban Infrastructure Demand: With Smart Cities and housing schemes gaining momentum, demand for multi-storey buildings and civic infrastructure is set to grow ? aligning with Nacdacs proven capabilities.

• Brand Visibility: Our record-breaking IPO subscription (2209x) has significantly enhanced our visibility, strengthening our positioning as a credible and ambitious infrastructure brand.

Threats

The infrastructure sector is not without risks. Key threats include:

• Intense Competition: Larger, established EPC players with deeper balance sheets compete for the same Government tenders.

• Cost Volatility: Fluctuations in raw material prices (steel, cement, bitumen) can impact project margins.

• Regulatory Delays: Approvals, land acquisition issues, and payment cycles in Government projects may cause working capital stress.

• Macro Environment: Economic slowdown, interest rate changes, or fiscal tightening could affect public spending on infrastructure.

Challenges

As a growing listed company, Nacdac must navigate several challenges on its path to scale:

• Capability Building: Strengthening resources ? manpower, equipment, and systems ? to handle larger and more complex projects.

• Geographical Expansion: Carefully entering new states while managing execution risks.

• Talent Retention: In a competitive industry, retaining skilled engineers and managers is vital to maintain our execution standards.

• Sustainability & Compliance: Embedding ESG practices and maintaining strict corporate governance as expectations from listed companies rise.

In summary, the opportunities for growth are significant, especially in roads, highways, PSU contracts, and urban infrastructure. At the same time, threats and challenges demand a balanced approach ? one that combines agility in execution with prudence in financial and risk management.

4) Risks and Concerns

The journey of growth in infrastructure is never without challenges. At Nacdac Infrastructure Limited, we recognize that every opportunity carries its share of risks. What defines us is not just our ability to identify these risks, but our discipline in managing them, and our resilience in converting them into strengths. One of the most common concerns in our industry is timely execution. Infrastructure projects often face hurdles such as land acquisition delays, regulatory approvals, or sudden labour shortages. For Nacdac, execution excellence has always been a hallmark. Through robust project management systems, advance resource planning, and close coordination with clients, we have consistently delivered projects on time, strengthening trust in our capabilities.

Another key challenge lies in financial and working capital management. Many Government and PSU projects involve extended payment cycles, which can create pressure on liquidity. Here, our approach has been one of prudence and discipline ? maintaining low debt, leveraging the strength of our IPO proceeds, and ensuring that we always operate from a position of financial stability.

The volatility of raw material prices, especially steel and cement, is another factor that can impact margins. By forging long-term supplier relationships, planning procurement in advance, and wherever possible, securing escalation clauses in contracts, we mitigate these uncertainties and protect project profitability.

As a listed company, regulatory compliance has become even more critical. We operate in a sector that is closely monitored and shaped by Government policies. By adhering to ISO-certified standards

in quality, environment, and occupational safety, and by embedding strong corporate governance practices, we ensure that compliance is not just a requirement but a culture at Nacdac.

Finally, the most important resource we have is not steel or concrete, but our people. Retaining skilled engineers and managers in a competitive industry remains both a challenge and a priority. We continue to nurture a people-first culture? investing in training, providing growth opportunities, and creating an environment where our employees feel proud to be part of Nacdac. This is why our attrition levels remain low and our workforce remains motivated.

Yes, the road ahead comes with concerns ? from global economic uncertainties to intense competition and the demands of scaling up into larger segments such as roads and highways. But with our disciplined approach, strong financial foundation, and proven ability to adapt, we remain confident that Nacdac will not only overcome these challenges, but also emerge stronger through them.

5) Internal Control System and Their Adequacy

For Nacdac Infrastructure Limited, growth is meaningful only when it is supported by discipline, accountability, and transparency. As a newly listed company, we have made it our priority to put in place internal systems that not only meet regulatory requirements but also inspire confidence among our shareholders and stakeholders.

Our internal control framework is designed to ensure three simple things:

1. Our numbers are reliable - Financial statements are prepared with accuracy and integrity, giving a true picture of the Companys performance.

2. We comply with the law - Whether it is SEBI regulations, taxation rules, or other statutory requirements, compliance is a culture at Nacdac.

3. Our resources are protected - Systems are in place to safeguard assets, control costs, and prevent misuse of Company funds or materials.

To maintain independence and objectivity, our internal processes are reviewed regularly by independent internal auditors, and their reports are presented to the Audit Committee of the Board. This ensures that any gaps are addressed quickly, and improvements are continuously made. We are also adopting technology-driven solutions like digital project monitoring and ERP tools, which make our operations more transparent, efficient, and reliable.

In the view of management, the Companys internal control systems are adequate and effective for our current operations. As we expand into larger and more complex projects, we are committed to strengthening these systems further, ensuring that growth goes hand in hand with accountability and governance.

6) Outlook of the Industry

Indias infrastructure industry stands at the

forefront of the countrys growth agenda. With infrastructure investment recognized as a critical driver of economic development, the sector continues to receive unprecedented policy and financial support. The Union Budget for FY 2025-26 has once again reaffirmed this commitment with a record Rs.11.21 lakh crore allocation towards capital expenditure, accounting for nearly 3.1% of GDP. The focus remains on roads and highways, railways, bridges, housing, and urban infrastructure, along with initiatives like PM Gati Shakti, Smart Cities Mission, and Housing for All. These programs ensure a strong project pipeline for the coming years.

In particular, the roads and highways sector

is expected to see accelerated growth, with the Government setting a target of constructing 10,000 km of national highways in FY 2025-26. Similarly, investment in railways (Rs.2.65 lakh crore) and urban development is expected to open up significant opportunities for mid-sized infrastructure players. Beyond traditional segments, multimodal logistics, smart infrastructure, and sustainable construction are emerging as new frontiers, as the country increasingly focuses on efficiency and green development. The National Infrastructure Pipeline (NIP) and the Governments Asset Monetization Plan will also help crowd in private investments, creating further opportunities for construction and development companies. For companies like Nacdac, the outlook is highly encouraging. Our proven expertise in multi-storey buildings, bridges, steel structures, and electrical works, combined with our ambition to diversify into roads and highways, places us in a strong position to leverage this industry momentum.

Overall, the infrastructure sector in India offers a positive long-term outlook ? characterized by sustained Government spending, rising demand for modern infrastructure, and strong investor confidence. Companies that can deliver quality, scale, and reliability will continue to be the biggest beneficiaries of this growth cycle.

7) Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the Companys objectives, expectations, projections, or predictions may be considered as "forward-looking statements" within the meaning of applicable securities laws and regulations.

These statements are based on certain assumptions and expectations of future events. Actual results, performance, or achievements may differ materially from those expressed or implied, depending on economic conditions, government policies, regulatory environment, tax laws, natural calamities, market conditions, raw material price fluctuations, and other incidental factors.

The Company assumes no responsibility to publicly amend, modify, or revise any forward-looking statements on the basis of subsequent developments, information, or events, except as required under applicable laws.

Readers are therefore advised not to place undue reliance on these forward-looking statements, and to exercise their own judgment when assessing the Companys future performance.