Navkar Urbanstructure Ltd Management Discussions

INTRODUCTION

Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from Government for initiating policies that would ensure timebound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development.

MARKET SIZE

Indias infrastructure market size is estimated at around US 190.51billionin2025andisprojectedtogrowtoapproximatelyUS 190.51 billionin 2025 andisprojectedtogrowtoapproximatelyUS 205.96 billion in 2026, expanding further at a CAGR of around 8% through 2031, on the back of continued policy coordination and higher public capital expenditure. Indias logistics market, valued at Rs. 19,53,732 crores (US 228.4billion)in2024,isprojectedtoreachRs.36,73,530crores(US 228.4 billion ) in 2024 , isprojectedtoreachRs .36 , 73 , 530 crores ( US 428.7 billion) by 2033, at a CAGR of 6.5% FDI in the construction development and construction (infrastructure) activity sectors stood at Rs. 1,38,088.81 crore (US 27.40billion)andRs.2,76,849.20crore(US 27.40 billion ) andRs .2 , 76 , 849.20 crore ( US 38.26 billion) respectively, between April 2000 and December 2025. Indias National Highways network expanded to 1,46,342 km in FY25, with 10,660 km constructed during the year, continuing to form the primary arterial network of the country.

The combined Index of Eight Core Industries (ICI), a lead indicator of industrial and infrastructure activity, eased to a growth of 2.6% in FY26 as compared to 4.5% in FY25, reflecting near-term headwinds from global energy and commodity price volatility. The underlying investment cycle in infrastructure, however, remains intact, and the sector is well placed to regain momentum as input-cost conditions stabilize.

[CHART: Index of Eight Core Industries — Growth Rate (%)]

? FY25: 4.5%

? FY26: 2.6% Source: Ministry of Commerce & Industry / Eight Core Industries data

The infrastructure sector is a key driver of the Indian economy and acts as a catalyst for the countrys economic growth, driving allied sectors such as townships, housing, built-up infrastructure, and construction development projects.

To meet Indias aim of reaching a US$ 5 trillion economy, infrastructure development remains the need of the hour. The government continues to drive the National Infrastructure Pipeline (NIP) combined with other initiatives such as Make in India and the Production-Linked Incentive (PLI) scheme to augment the growth of the infrastructure sector. Historically, more than 80% of the countrys infrastructure spending has gone toward transportation, electricity, water, and irrigation.

GOVERNMENT INITIATIVE AND INVESTMENT

Some of the key government initiatives and investments supporting the infrastructure sector are as follows:

In the Union Budget 2025-26, the capital investment outlay for infrastructure was increased to Rs. 11.21 lakh crore (US$ 128.64 billion), amounting to 3.1% of GDP.

1 The government allocated a record CAPEX of Rs. 2,65,200 crores (US 31.43billion)forRailways.Rs.2.87lakhcrore(US 31.43 billion ) forRailways . Rs .2.87 lakhcrore ( US 32.94 billion) was allocated towards the Ministry of Road Transport & Highways, with a target of Rs. 35,000 crores (US 4.02billion)inprivatesectorinvestment.TheUnionHousingandUrbanAffairsMinistry sbudgetwasraisedby18 4.02 billion ) inprivatesectorinvestment . TheUnionHousingandUrbanAffairsMinistry sbudgetwasraisedby 18 11.07 billion), with major allocations for urban development and housing. Indias National Highways network has expanded from 65,569 km in 2004 to 1,46,145 km in 2024, forming the primary arterial network of the country, supported by flagship programmes such as Bharatmala Pariyojana. The government remains committed to its goal of 500 gigawatts (GW) of renewable energy capacity by 2030 and net-zero carbon emissions by 2070.

INDUSTRY STRUCTURE

The construction industry makes up a major part of Indias GDP. Being a significant contributor to the GDP of India, the industry acts as a gateway for more opportunities. Investment in the construction industry, therefore, directly leads to the countrys economic development. The Construction industry in India consists of the real estate as well as the urban development segment. The Real estate segment covers residential, office, retail, hotels and leisure parks, among others, while the urban development segment broadly consists of sub-segments such as Water supply, Sanitation, Urban transport, Schools, and Healthcare.

[IMAGE: Highway and residential buildings]

The construction market in the country continues to be among the largest globally, with construction output expected to grow at an average of around 7.1% each year. An enhancement in the construction industry directly has a positive effect on other industries like cement, technology, and steel.

100% FDI in the construction development sector under the automatic route is permitted in completed projects for operations and management of townships, malls/shopping complexes, and business constructions. 100% FDI in real estate in India is allowed under the automatic route for urban infrastructure such as urban transport, water supply, and sewerage and sewage treatment.

OPPORTUNITIES

The infrastructure statistics of India continue to be of mind-boggling proportions, reflecting a massive potential for the growth of the ready-mix concrete and allied infrastructure industry. However, realizing that potential will take considerable time as companies come to terms with the unique obstacles presented in the Indian market.

The infrastructure sector remains the biggest focus area for the Government of India. Favorable valuations make the sector an attractive opportunity. Only 24% of the National Highway network in India is four lanes, presenting an immense scope for improvement. The Regional Connectivity Scheme (RCS) gives opportunity for development of airports.

Our vision is to achieve a leadership position in India and explore opportunities beyond India. We are committed to building long-term relationships based on integrity, performance and value, as well as client satisfaction, and to be one of the premier infrastructure companies in India, executing various verticals of construction activity with the help of its in-house raw material production.

A summary of the Companys Strengths, Weaknesses, Opportunities and Threats is set out below:

STRENGTHS	WEAKNESSES
\u2022 Professionally managed, financially self-reliant company with robust banking relationships (Union Bank, HDFC, Axis, etc.)	\u2022 High dependence on government and government-funded infrastructure projects for order inflow
\u2022 Diversified execution capability across roads, bridges, drainage and sewage/water infrastructure projects	\u2022 Long project gestation periods and working-capital-intensive nature of EPC/DBFOT contracts
\u2022 Experienced and qualified project execution team supported by well-developed SOPs	\u2022 Exposure to execution risk in large-scale and joint-venture projects
\u2022 Established track record with government bodies such as GUDC, GWSSB and municipal corporations	\u2022 Regional concentration of certain projects, increasing sensitivity to local administrative delays
OPPORTUNITIES	THREATS
\u2022 Continued Government thrust on infrastructure spending under the National Infrastructure Pipeline and Union Budget allocations	\u2022 Volatility in government policy, taxation and regulatory frameworks affecting project award timelines
\u2022 Rising urban infrastructure demand \u2014 water supply, sanitation, sewage treatment and urban transport	\u2022 Fluctuations in interest rates, commodity and material prices affecting project costs and margins
\u2022 Scope for growth in under-penetrated segments such as four-laning of highways and regional airport connectivity	\u2022 Intense competition from other established EPC and infrastructure contractors
\u2022 Opportunities in Joint Ventures for larger, higher-value municipal and state infrastructure contracts	\u2022 Macroeconomic and geopolitical uncertainties impacting input availability and cost

CHALLENGES, RISKS & CONCERNS

Industry/Policy Risk:

The Companys business is highly dependent on road and bridge projects in India undertaken or awarded by governmental authorities and other entities funded by governments. Any change in government policies resulting in a decrease in the amount of road and bridge projects undertaken, or a decrease in private sector participation in such projects, adversely affects our business and results of operations. Our business may be affected by changes in interest rates, government policy, taxation, exchange rates and controls, and social, civil, political or economic developments in or affecting India.

Project Risk:

Infrastructure projects involve long-term agreements (as much as three years in EPC contracts and around 25 years in Design, Build, Finance, Operate and Transfer (DBFOT) road projects). All long-term projects have inherent risks, including inflation, interest rate movements, liquidity, commodity and oil prices, governance, construction delays, material shortages, unanticipated cost increases and cost overruns, and disagreements with joint venture partners.

We are increasingly bidding for large-scale infrastructure projects, which carry various execution risks, including the potential for larger cost overruns and their effect on operating margins, and the risk of default by our Joint Venture Partners where projects are executed through joint ventures.

Adherence to Safety & Quality Norms

1 Sustainable & Continual Growth 1 Teamwork and Healthy Competition 1 Concern towards the Stakeholders 1 Deliver Best Service 1 Strong Willingness to Learn 1 Adherence to Values & Ethics

Companys Diversified Activities

Drainage Work:

Company has been awarded by Gujarat Urban Development Corporation (GUDC) for Drainage Work at Anand Town amounting to Rs. 90 Cr which is completed satisfactorily. Company has been awarded by Gujarat Urban Development Corporation (GUDC) for Drainage Work at Borsad Town amounting to Rs. 23Cr which is completed satisfactorily. Company has been awarded by Gujarat Water Sewerage & Supply Board (GWSSB) for Drainage Work at Kapadwani Town amounting to Rs. 24Cr which is running satisfactorily. Company has been awarded an order of Rs. 211.00 Cr by Bhopal Municipal Corporation for the Sewage Treatment Project at Kolar Town & the outside upper and lower lake catchment area, south & south-east zone, in the name of a Joint Venture.

We have equipped ourselves with all the resources required to venture into this field:

Manpower: We have recruited the best talent available in the market for executing this project, viz. Project Management, Project Execution, Finance, HR, Legal, and IT.

Money: We are financially self-sustained, and capable of raising funds easily due to our reputation and relationships with banks such as Union Bank, HDFC, Axis, etc.

Method: We have developed robust SOPs so that projects undertaken are completed well within time, without compromising quality of work.

Material: We maintain an extensive database of local vendors and others so that no work is delayed due to material unavailability.

Management: We are a professionally managed company, following the best solutions to our business aspects in the most strategic way.

We are a professionally managed company. We are financially self-reliant and enjoy a very robust relationship with banks. Our core strength lies in Infrastructural Development. We are equipped with the best machines/resources. Our Project Team is highly qualified and carries rich experience. We believe in sustainable growth without compromising Quality & Safety.

FUTURE OUTLOOK

Indias infrastructure sector continues to be a key structural growth driver for the economy, underpinned by sustained government capital expenditure, an expanding pipeline of road, urban and water infrastructure projects, and continued policy support through the National Infrastructure Pipeline and PM Gati Shakti framework. While near-term industrial and core-sector growth has moderated amid global commodity and energy price volatility, the underlying investment cycle in infrastructure remains intact, and a rebound is expected as input-cost conditions stabilise.

Indias construction industry is projected to grow at a healthy pace over the next few years, supported by continued investment in infrastructure and energy projects and by Union Budget allocations for roads, railways and urban

1 development. Analysts estimate Indias infrastructure-linked sectors could see earnings growth in the range of 12-18% CAGR through 2026-28, driven by robust order inflows and government-backed execution, while overall infrastructure investment needs over the medium term are estimated in the range of US$ 400-500 billion, with the largest gaps in roads, rail, metro and urban water/sewerage systems — segments directly aligned with the Companys areas of operation.

The Company is well positioned to participate in this growth, given its established track record with government and municipal authorities, its diversified capabilities across drainage, sewage treatment and road/bridge infrastructure, and its financial self-reliance. The Company intends to continue strengthening its order book through selective bidding for larger municipal and state infrastructure contracts, deepening its execution capabilities, and exploring joint venture opportunities for large-scale projects, while maintaining its focus on quality, safety and timely completion.

India is in fast-forward mode and time is of essence. This continues to tip the scales in favor of infrastructure projects and mechanized construction equipment at sites. The Board remains cautiously optimistic that the infrastructure industry will continue to see sustained growth momentum in the coming years, notwithstanding near-term macroeconomic and geopolitical headwinds.

SEGMENT WISE PERFORMANCE

The Company is operating only in one sector, i.e. Infrastructure Project Activity; therefore, segment reporting and performance standards are not applicable to the Company.

QUALITY CONTROL

The Management and the Employees of Navkar Urbanstructure Limited (formerly Navkar Builders Limited) are committed to operating every aspect of construction adhering to the standards that offer quality service to all clients, by adopting and implementing an effective Quality Management System & Procedures.

FINANCIAL PERFORMANCE

The Company has diversified its business activities and at the verge of achieving better financial performance. The Company has successfully implemented various operational excellence programs designed with the help of external consultants so as to optimize on cost and delivery commitments. The Companys cash flow position as at the yearend continues to remain strong. Increased liquidity has strengthened the Companys confidence for launching new growth initiatives for the existing and emerging businesses of construction.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof, including:

Sr. No.	Financial Ratio	31.03.2026	31.03.2025
1	Debtors Turnover	0.56	0.63
2	Inventory Turnover	9.57	(1.71)
3	Interest Coverage Ratio	-	-
4	Current Ratio	2.84	3.03
5	Debt Equity Ratio	0.036	0.04
6	Operating Profit Margin (%)	27.45	19.31
7	Net Profit Margin (%)	0.13	0.02

Notes:

? Debtors Turnover has decreased due to bifurcation of Trade Receivables and Advance received from customers.

? Inventory Turnover ratio has decreased due to change in Purchase during the year.

? Current Ratio has Decreased due to change in Loans and Advances in the current financial year.

? Debt Equity Ratio has increased due to repayment of loan in F.Y. 2025-26.

? Net Profit Margin (%) has increased due to proportionate change in Expense to Income.

INTERNAL CONTROL SYSTEM

The Companys employees and projects have been and are exposed to risks and threats to life, liberty, and property while operating in risky geographical areas. The Company takes pride in executing prestigious works in the nation-building task and, with the help of the Government, has taken measures to provide adequate security, facilities, and insurance coverage in such places. The Company has a formal Enterprise Risk Management framework in place, which is reviewed periodically.

Date:31/08/2026 Place:Ahmedabad

By Order of the Board of Directors For Navkar Urbanstructure Limited (Formerly Known as Navkar Builders Limited)

Sd/- Harsh Shah Managing Director DIN:01662085

Sd/- Pinki Sagar Director& CFO DIN:08113318

Sd/- Arpita Kabra Company Secretary