Orient Green Power Company Ltd Management Discussions

Global Economy Overview

Global growth in 2025 turned out to be resilient than originally anticipated. International Monetary Fund (IMF) in April 2025¹ had estimated global growth to slow down to 2.8% in 2025 from 3.3% in 2024 factoring the rise in United States (US) tariff rates along with countermeasures from trading partners, trade barriers and policy uncertainties plus their possible contributions to weaker investments and tighter financial conditions. Nonetheless, the actual growth was 3.4% in 2025² being 0.6% stronger than the expectations. Reduced impact of tariff from front loading goods purchase in US coupled with reduced effective tariff rates and tailwinds from technology related artificial intelligence investments, easing financial conditions including weaker dollar and fiscal and monetary policy support enabled global growth to end

2025 on an upbeat note despite the trade related disruptions and uncertainty.

As we head into 2026, the global economy which has withstood series of shocks and stood to benefit from the tailwind led momentum, is faced with a new one in the form of military conflict in Middle East since the end of February

2026 that is putting its resilience to the test and posing risk to the momentum in global growth.

IMF in its April 2026 forecast, projects global growth at 3.1% in 2026 and 3.2% in 2027 slower than growth in 2025 reflecting the disruptions caused by the conflict in Middle East and its impact on commodity markets, inflation and financial conditions.

Indian Economy Overview

Indian Economy in FY 2025-26 began on an optimistic yet cautious note. The optimism stemmed from the gradual improvement in GDP growth rate from the lows of Q2 2024-25 coupled with softening inflation.

Beginning in February 2025, given the benign inflation, to spur growth, Reserve Bank of India (RBI) started reducing the Repo Rates - the Repo Rate which was 6.50% in February 2025 was reduced to 5.25% in December 2025³. Further, to ease liquidity and facilitate transmission of rate reductions to credit markets, RBI also announced 100 basis points (bps) reduction in Cash Reserve Ratio (CRR) to 3%⁴ in a staggered manner during September - November 2025.

Moreover, the 56^th Meeting of the Goods and Service Tax (GST) Council with a view to boost domestic demand while also keeping inflation low amongst other factors, recommended GST Rate Rationalization simplifying the GST rate in two slabs viz. 5% and 18% with special 40% for luxury and sin goods which came into effect in September 2025.

However, rising tariff and trade policy uncertainties posed challenges. Despite the external challenges, reflecting confidence in the countrys strong domestic demand coupled with fiscal discipline Indias credit rating was upgraded to BBB (Stable) by Standard and Poors (S&P) Global Ratings. Continued fiscal consolidation and improvement in the quality of government expenditure, along with strong macroeconomic fundamentals, have contributed to Indias sovereign rating upgrade by S&P Global Ratings in August 2025 - the first upgrade in 18 years⁵.

As per the Second Advanced Estimates⁶ with new base year 2022-23, real GDP growth has been estimated at 7.6% in FY 2025-26 up from 7.2% and 7.1% respectively during FY 2023-24 and FY 2024-25.

GDP growth rate is projected to moderate to 6.9% in FY 2026-27⁷. The moderation factors the elevated energy and commodity prices, rising freight costs, adverse impact on merchandize exports due to shipping route disruptions and the potential drag on production due to supply shock arising from the ongoing conflict in West Asia.

Despite the risks, Indias macroeconomic outlook remains resilient supported by private consumption, fixed investments including high capacity utilization conducive financial conditions and governments continued emphasis on infrastructure. Strong fundamentals, sustained growth, low inflation and fiscal consolidation have provided India the wherewithal to withstand any adverse impact while six point plan proposed in the Union Budget - scaling up domestic manufacturing in several strategic and frontier sectors, rejuvenating legacy industrial sectors, creating champion MSMEs, boosting infrastructure, ensuring long-term energy security and stability, and developing city economic regions, bodes well for ensuing growth trajectory.

Indian Power Sector Overview

Indias power sector is presently witnessing a significant transformation phase charactered by rapid capacity

expansion and accelerated renewable energy deployment. The demand is also growing with expansion in industrial activity, growing population, increase in electrification as well as per capita consumption. India is presently the third largest producer and consumer of electricity globally¹. The total installed capacity has increased by close to 60 GW in 2025-26 and as on 31^st Mar 2026 the installed capacity stands at approx. 532 GW². In 2025-26, India also achieved the milestone of over 50% share of installed capacity from non-fossil fuels viz. Renewable Energy, Hydro and Nuclear, five years ahead of the targeted year 2030 set under Nationally Determined Contribution to the Paris Agreement³. India, through Ministry of New and Renewable Energy (MNRE) is working towards achieving 500 GW of installed capacity from non-fossil fuels by 2030 as announced at 2021 United Nations Climate Change Conference (COP26). The source wise break up of capacity as on 31^st Mar 2026 is as below:

Renewable Energy Source (RES) excludes large hydro.

For the year 2025-26, India generated 1,848 Billion Units (BU) a marginal increase over 1,829 BU generated during 2024-25. The power generated from non-fossil fuels witnessed a significant increase. Consequently, the share of power generated from thermal power has declined during the year 2025-26 with the non-fossil fuels presently having more than half of the installed capacity and contributing about 29% of electricity generated thereby reflecting the structural shift of the power sector towards cleaner energy in line with the energy transition goals.

As per National Generation Adequacy Plan 2026-27 to 2035-36 by Central Electricity Authority (CEA), Ministry of Power⁴, Indias power demand is expected to grow at above

6% over the period. To meet the demand, the capacity requirement is projected at 1,121 GW while the power generation to meet the demand is projected at about 3,596 BU which is nearly twice the current requirements.

The share of power generated from thermal power, which has been on declining trend, is expected to further reduce and by 2035-36, the power generated from non-fossil sources will be approximately equivalent to the power generated from thermal power sources.

Going forward, although coal based thermal power may be the backbone, the power sector is expected to undergo a metamorphosis with gradual replacement of thermal based generation with renewable energy sources complemented by Energy Storage Systems.

Indian Renewable Energy Sector Overview

Indias energy landscape has undergone a huge transition, with the focus shifting towards renewable means in the era of sustainability. Over the past decade, India has made significant strides in diversifying its energy mix, gradually reducing its dependence on conventional fossil fuels. This rapid shift has resulted in Indias rise to third rank globally in Renewable Energy Installed Capacity, having overtaken Brazil during the year and behind only China and the US.

In 2025-26, the total installed capacity of renewable energy source has increased from 220 GW as on 31^st Mar 2025 to 275 GW as on 31^st Mar 2026. Nearly quarter of the overall capacity was installed during a single year and the additions are the highest ever witnessed in any year. As a result, the share of renewable energy capacity in overall capacity has surpassed 50% during the year.

Over the next 10 years by 2035-36, to meet the future power requirements and in line with Indias clean energy policies, National Generation Adequacy Plan has projected Indias renewable energy capacity to increase by about 3 times to 764 GW. Although capacity additions are anticipated across all sources of renewables, wind and solar capacities are anticipated to triple over the next 10 years and with most substantial growth anticipated in solar capacity additions underscoring Indias commitment to clean energy goals.

The segment wise break up of projected renewable energy capacity is as under:

Wind Energy

India has the fourth largest installed wind energy based power generation capacity in the world with total capacity of about 56 GW as on 31^st Mar 2026. India added about 6GW of wind energy capacity during the year 2025-26, surpassing the landmark capacity additions of 5.5 GW in 2016-17, and further 28 GW of wind energy capacity additions are under implementation stage⁵.

One of the major advantages of wind energy is its inherent strength to support rural employment and uplift of rural economy. Further, the sector is fuel free, doesnt produce CO2 emission, can be built fast and the wind farm land may be used for other purposes. Wind also has the advantage of significant generation during the morning and evening peaks, thus balancing solar.

The gross wind power potential in the country as per MNRE is assessed at about 1,164 GW at height of 150 meters above ground level and remains largely untapped. As per National Generation Adequacy Plan, the wind power capacity is expected to expand to 155 GW by 2035-26 to meet the projected power requirements. Significant capacity enhancement opportunities in the sector exists and the momentum in capacity expansions witnessed in the previous

years is anticipated to continue. In addition, the country has also built a resilient wind turbine component eco system manufacturing nearly 80% of the components along with overall wind turbine manufacturing capacity of approx. 24 GW as on 31^st Mar 2026 from a mere 10 GW in 2014.

Solar Energy

India is 3^rd largest globally in terms of solar power installed capacity with capacity of about 150 GW as on 31^st Mar 2026. India added a record 44 GW of solar power during the year 2025-26 and almost double the additions made in the previous year. As a result of the additions, the share of solar power capacity in overall installed capacity has reached about 28% in 2025-26 from minuscule levels in 2013-14. Similarly, the share of solar power generation in overall generation has also been increasing and presently is about 9.5% as of 2025-26.

As per National Institute of Solar Energy (NISE)⁶, the potential ground mounted solar power in the country has been assessed at approx. 3,340 GW. Nearly 45% of the potential is from Western Indian States as they benefit from their vast contiguous land and high solar irradiance followed by Southern Indian States.

To meet the projected power requirements as per National Generation Adequacy Plan, the solar capacity in India is expected to reach about 509 GW by 2035-36 which is nearly three times the existing capacity. Nonetheless, hardly 15% of the potential capacity is anticipated to be utilized.

In conjunction with adding solar power capacity, in a quietly influential manner, India has also added solar module manufacturing capacity which now stands at about 172 GW from a mere 3 GW ten years ago. Furthermore, solar cell manufacturing capacity is about 27 GW presently and production linked incentive schemes are announced for ingot and wafer manufacturing⁷. Strong policy support in the form of the approved list of models and manufacturers (ALMM) that effectively barred the direct import of modules, along with the imposition of basic customs duty on imported cells & modules, coupled with the PLI scheme are anticipated to provide a fillip to the solar component manufacturing in the country.

Energy Storage Systems

With increasing adoption and penetration of the renewable energy coupled with accelerating capacity additions in the country and given the intermittent output of renewables,

there is growing focus on grid flexibility and reliability. Hence, to balance reliability, affordability and sustainability with Indias renewable energy goals and facilitate increased renewable energy integration, energy storage systems - battery energy storage system (BESS) and pumped storage plants (PSP), capacities are being developed. These systems play a crucial balancing role as they can charge especially during periods of high solar generation and discharge during evening and early morning hours when solar generation will be less. As per National Generation Adequacy Plan, the likely energy storage requirement by 2035-36 is about 174 GW. The storage requirement can be met either through PSP or BESS or a combination of both. BESS is suitable for short-duration storage, and PSPs are suitable for long-duration storage. In addition to storage duration, the deployment will also depend on degradation trajectories, cost effectiveness amongst various other factors.

SWOT Analysis

Strength

1. We operate in the rapidly growing renewable energy sector, which benefits from increasing demand for electricity and regulatory support.

2. We have a flexible business model that is scalable and sustainable and that enables us to deliver predictable growth from a diversified and balanced portfolio of projects.

3. We have an experienced management and operating team with relevant industry knowledge and expertise, including the ability to improve operational performance.

4. Increasing demand from C&I customers for power from Renewable sources to reduce their carbon foot print will provide us with opportunity to expand our business.

5. Long association with established track of good service with customers gives us the advantage of being the most preferred suppliers for them.

6. Renewable energy reduces greenhouse gas emissions and improves air quality, addressing climate change and promoting public health.

7. Continued innovation can further reduce costs and improve efficiency.

8. Improving financial health with SPVs receiving investment grade rating from Credit Rating Agencies (CRA).

Weaknesses

1. Revenues from our business are exposed to market based electricity prices.

2. Our business is seasonal in nature and is dependent on weather conditions that are unpredictable and beyond our control.

3. We rely on Original Equipment Manufacturers (OEMs) and other service providers for maintaining our windmills.

4. While costs are declining, renewable energy

technologies still require significant upfront

investment.

Opportunities

1. Government of India has set an ambitious target of 500 GW for renewables by 2030. As per MNRE National Generation Adequacy Plan, about 764 GW of renewable power capacity is required by 2035-36. This is expected to give ample opportunity for growing the business in the foreseeable future.

2. Increasing demand from C&I customers for power from Renewable sources to reduce their carbon foot print will provide us with opportunity to expand our business.

3. Lean capital structure, improved credit ratings, and access to capital markets enable us to raise capital for funding capital expansion projects.

4. Repowering of old windmills with higher capacity rated machines with improved operating efficiencies.

Threats

1. Transmission, evacuation constraints and grid back down issues.

2. Changing government policies with regard to Pricing & Renewable Purchase Obligations, incentivizing other modes of renewable energy.

3. Technological advancements in the renewable energy sector such as reduction in cost of solar & new wind power may make our plants obsolete/unviable.

4. Delays in recovery of dues from state owned distribution companies (Discoms) may result in acute working capital shortages.

5. Repowering old windmills involves significant capital investments.

6. The companys capital structure include significant amounts borrowed from various banks and financial institutions. Increase in the interest rates affects the profitability of the company.

Business Outlook

In FY 2026, strong wind availability during the wind season and resumption of operations of windmills that underwent component upgradation enabled the company harness the potential of its operational assets. Improved rating and liquidity position including benefits from one off refund empowered the company to leverage the financial position and undertake capacity enhancement with debt at lower interest rate. In addition, the first solar plant of the company was also commissioned during the year.

As company embarks FY 2027, the focus remains on improving operating efficiencies through repowering certain wind mills and completing the committed solar expansion while ensuring operational effectiveness to maximize the productivity.

Wind Repowering

During the year, our company through step down subsidiary Clarion wind Farm Private Limited (Clarion) has executed a contract to repower 6.3 MW of windmills with higher capacity rated windmills in the Devarkulam Site, Tamil Nadu. This is the first repowering project under the new repowering policy of Government of Tamil Nadu. Further, in April 2026, contract for repowering another 1.5 MW in the same site was executed taking the total capacity being repowered at present to 7.8 MW. The repowered capacity is anticipated to be commissioned in the current financial year and expected to deliver higher generation efficiencies.

Solar Business

Our company proposed to develop through a subsidiary, Delta Renewable Energy Private Limited (Delta) a solar capacity of 25 MW AC. In December 2025, Delta has successfully commissioned 7 MW out of total capacity which marked our first ever entry into the solar power sector. The balance capacity is expected to be commissioned by September 2026.

Segment Wise and Product Wise Performance

The company, along with its subsidiaries, is engaged exclusively in the "generation and sale of power from

renewable energy sources". As this constitutes the sole business segment, the financial performance has been discussed accordingly under the section titled Consolidated Financial Performance.

Consolidated Financial Performance

Revenues from operation for the year amounted to Rs. 293 crore as against Rs. 260 crore during FY25, higher by about 13%. Strong wind availability during the season and resumption of operations of windmills that underwent component upgradation in the previous years resulted in 16% increase in revenue from sale of power. In line with improvement in revenue from operations, total income on consolidated basis for the year was also higher by 13% at Rs. 316 Crores as against Rs. 279 Crores in FY25.

Due to higher revenue from operations, EBITDA for the year was better by 10% and stood at Rs. 205 Crore as against Rs. 187 Crore reported during the previous financial year. EBITDA Margin for the current year stood at 65% as against 67% reported during the last year on account of increased expected credit losses.

Depreciation for the year amounted to Rs. 86 crores as against Rs. 84 crores in the previous year, higher by about 3%. During the year, commencement and resultant capitalization of solar power plant contributed to the increase in depreciation expense.

Despite the addition to debt on account of loan raised for funding capacity enhancement and repowering, overall debt reduced due to deleveraging from repayments of yearly obligations. Interest outgo for the year reduced to Rs. 57 crore as against Rs. 72 crore in the previous year, lower by about 21%. The reduction is mainly attributed to timely servicing and progressive reduction in debt from repayment of debt obligations and reduction in interest rates. Consequently, with better EBITDA and lower interest outgo, the interest coverage for the year improved to 3.59 times, as against 2.60 times in FY25.

The profit before exceptional items and tax for the year was higher by nearly 96% at Rs. 62 crore as against Rs. 32 crore in the previous year while the profit before tax more than doubled from Rs. 34 Crores in previous year to Rs. 72 Crores in the current year due to one time exceptional income from refund of excess interest charged during the previous financial years.

Significant Changes in Key Financial Ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector-specific financial ratios.

The Company has identified the following ratios as key financial ratios:

Particulars	Consolidated		Variance (in %)
	2025-26	2024-25
Current Ratio (in times)	2.07	2.71	(24%)
Debt-Equity Ratio (in times)	0.44	0.50	(12%)
Operating Profit Margin (EBITDA Margin in %)	65.10	67.16	(3%)
Return on Net Worth (in %) (1)	6.23	4.17	50%
Debtors turnover ratio (in times)	3.63	3.22	13%
Interest Coverage ratio (in times) (2) (EBITDA / Interest Expense)	3.59	2.60	38%
Net profit ratio (in %) (3)	24.54	12.95	89%

(1) Return on net worth is computed as Net profit attributable to the Owners of the company by Average net worth. Net profit attributable to the Owners of the company increased from Rs. 38.81 Crores to Rs. 69.39 Crores. Return on net worth has increased in line with the increase in net profit.

(2) Increase in EBITDA from Rs. 187.31 Crores to Rs. 205.45 Crores and decrease in finance cost from Rs. 71.99 Crores to Rs. 57.18 Crores.

(3) Increase in net profit from Rs. 33.73 Crores to Rs. 71.89 Crores and increase in revenue from operations from Rs. 260.37 Crores to Rs. 292.95 Crores.

The details of significant changes in key financial ratios for the year are comprehensively detailed in the Standalone Financial Statements.

Details of any change in Return on Net Worth

The details of change in Return on Net Worth for the year are provided in the Financial Statements.

Challenges

Evolving policy changes regulatory uncertainty and ongoing disputes with distribution companies (Discoms) continue to pose challenges for the company. While many of these

issues have been effectively addressed through formal representations, delays in their resolution remain a concern.

Dependence on Original Equipment Manufacturers (OEMs) for the supply and servicing of critical spares and components poses a significant challenge - which may lead to increased cost of maintenance and higher down time. The company has been progressively developing alternative sources for critical spares to reduce dependence and also carries adequate inventory of select spares with long lead time to minimise the downtime.

Human Resources

Our employees are key contributors to our business success. As of March 2026, OGPL has a workforce of 140. We believe the quality and commitment level of our professionals is at par / highest amongst the power generating companies. OGPL continues to focus on key drivers of employee engagement like career growth, learning opportunities, fair performance and rewards and employee well-being by enhancing its HR processes for scale, agility and consistent employee experience.

Further, it also organizes workshops enhancing the skill sets of its employees and promoting their overall involvement. Frequent and outcome-oriented session has resulted to superior employee experience. The Company also assigns individual goals to the employees, consistent with the overall objective of the business which not only acts as a strong motivator but also contributes towards improving the overall efficiencies of the business.

Lastly, the Companys transparent working environment wherein employees can raise their concerns and opinions results in high engagement levels and lower employee turnover ratio.

Internal Controls and adequacy

The Company has independent Internal Audit team with well established risk management processes both at the business and corporate levels. Internal Auditor submits their reports, directly to the Chairman of the Audit Committee of the Board of Directors, which ensures process independence.

The Company believes that every employee has a role to play in fostering an environment in which controls, assurance, accountability and ethical behaviour are accorded high importance. This complements the Internal Audits conducted to ensure total coverage during the year.

The overall aim of the companys internal control framework is to assure that operations are effective and well aligned with the strategic goals. The internal control framework is intended to ensure correct, reliable, complete and timely financial reporting and management information.

Managements Responsibility Statement

The management is accountable for making the Companys consolidated financial statements and related information mentioned in this annual report. It believes that these financial statements fairly reflect the form and substance of transactions, and reasonably represents the companys financial condition and results of operations in conformity with Indian Generally Accepted Accounting Principles / Indian Accounting Standards.

Safe Harbour

Some of the statements in this Annual Report that are not historical facts are forward looking statements. These forward looking statements include our financial and growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward looking statements. These risks include, but are not limited to, the level of market demand for our services, the highly competitive market for the types of services that we offer, market conditions that could affect our services, our ability to create, acquire and build new businesses and to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market fluctuations in India and elsewhere around the world, and other risks not specifically mentioned herein but those that are common to any industry.