Pace Digitek Ltd Management Discussions

Management Discussion and Analysis Report

ECONOMY OVERVIEW

Global Economy1

During the year under review, the global economy demonstrated resilience, despite rising trade tensions, geopolitical uncertainties and disruptions across key energy corridors. Global GDP expanded by 3.5% in Calendar Year (CY) 2025, facilitated by resilient manufacturing activity, sustained investments in digital infrastructure, artificial intelligence, semiconductors and energy transition projects, alongside supportive fiscal measures across major economies. Growth was further aided by moderate inflationary pressures and relatively stable consumption trends across key markets, although momentum remained uneven across regions.

Advanced economies recorded 1.9% growth, led by the United States at 2.1% and Europe at 1.4%. Emerging Market and Developing Economies (EMDEs) outperformed, registering growth of 4.5%, supported by Chinas 5.0% growth and strong domestic demand in India. Meanwhile, geopolitical tensions in West Asia increased volatility in oil prices and logistics costs. These developments reinforced investments in resilient energy infrastructure, data connectivity networks, energy storage systems and diversified supply chains, while accelerating the diversification of global manufacturing and sourcing bases.

Global economic growth is expected to remain stable in the near term, with GDP projected to grow by 3.0% in CY 2026 and improve marginally to 3.4% in CY 2027. The outlook reflects gradual normalisation in inventory-led demand, tariff-related pressures, geopolitical uncertainties and softer consumption trends in key markets. While financial conditions remain relatively tight, supportive policy measures across major economies are expected to sustain investment momentum.

Geopolitical developments, particularly those affecting energy supply routes, may create periodic volatility in fuel prices and logistics costs. This has reinforced the need for resilient energy systems, diversified supply chains and reliable communication infrastructure. The evolving landscape is driving a structural shift towards strengthening critical infrastructure to ensure reliability, efficiency and continuity.

Indian Economy2

India has reinforced its position as one of the fastest-growing major economies, with real GDP estimated to expand by 7.7% in FY 2025-26, compared to 7.1% in the previous year. Economic growth remained supported by sustained public capital expenditure, a revival in private investment, resilient rural consumption and improving manufacturing activity. Government initiatives such as the Production Linked Incentive (PLI) Scheme, Make in India and Aatmanirbhar Bharat are helping build a stronger manufacturing ecosystem and advancing infrastructure development.

The Governments focus on telecom connectivity, digital infrastructure and renewable energy is creating a favourable environment for infrastructure-led sectors, including telecom, power systems and energy storage. Macroeconomic stability, supported by moderate inflation, an accommodative monetary environment and ongoing policy reforms, has improved investment visibility and business confidence. These structural drivers are expected to sustain long-term capital expenditure across infrastructure-led sectors, creating opportunities for companies with integrated manufacturing and execution capabilities.

India is expected to maintain a strong growth trajectory, supported by continued expansion in infrastructure, manufacturing and the digital economy. High-capacity utilisation, improving credit growth and the Governments sustained focus on capital expenditure are likely to support investment activity and drive demand across major industrial segments.

However, the economy remains exposed to global energy price volatility due to its dependence on crude oil imports. Geopolitical developments, particularly in oil- producing regions, may influence fuel, logistics and input costs, thereby impacting industry cost structures.

At the same time, trade integration is expected to strengthen through ongoing Free Trade Agreement (FTA) initiatives and export-oriented reforms, further supporting manufacturing and engineering activity.

Overall, the macroeconomic environment remains favourable, backed by strong domestic fundamentals, although external uncertainties and financial strains may influence growth dynamics. These macroeconomic and structural trends are expected to sustain demand across telecom infrastructure and energy storage segments, creating a favourable outlook for industry participants.

COMPANY OVERVIEW

Pace Digitek Limited, incorporated in 2007 and headquartered in Bengaluru, is an integrated infrastructure solutions provider serving the telecom and energy sectors. The Company operates through two business verticals, Telecom & ICT and Energy, offering services across manufacturing, EPC, system integration and O&M. The Telecom & ICT business covers telecom towers, optical fibre networks and telecom power systems, while the Energy segment focuses on BESS, renewable energy integration and solar EPC solutions. Backed by inhouse manufacturing capabilities and an integrated execution model, the Company is positioned to deliver projects with greater efficiency and scalability. Growing investments in digital connectivity, renewable energy and energy storage infrastructure are expected to support its long term growth prospects.

TELECOM & ICT SEGMENT

Global Telecom Industry3

The global telecom industry remains a foundational pillar of digital connectivity, supporting economic activity, enterprise transformation and consumer communication worldwide. The global telecom market was valued at USD 3.19 trillion in CY 2026, reflecting its scale and strategic importance across economies. The sector remains characterised by high capital intensity, increasing data consumption and sustained investments in network infrastructure.

The industry is expected to maintain steady expansion, with the market projected to reach USD 3.91 trillion by CY 2029, implying a CAGR of 5.3%. Growth is expected to be supported by continued investments in 5G networks, fibre infrastructure and enterprise connectivity. Increasing digitalisation, rising data consumption and growing demand for low-latency networks are also expected to support the sector, alongside ongoing investments in telecom infrastructure modernisation.

Indian Telecom Industry

Indias telecom sector continues to serve as a critical enabler of economic activity, supporting digital services, financial services, logistics and enterprise ecosystems. The industry is witnessing sustained investments in network rollout, fibre deployment and telecom infrastructure modernisation, creating substantial opportunities across EPC, OFC deployment, network integration and managed services.

India has a subscriber base of over 1,330.58 Million and more than 1.07 Billion broadband subscribers, underscoring the scale of the digital connectivity ecosystem. Rising smartphone penetration, increasing data consumption and expanding broadband access are expected to sustain demand for telecom infrastructure over the long term.

The Indian telecom sector is expected to witness sustained investments as operators expand 5G coverage, enhance network quality and strengthen digital infrastructure across urban and rural markets. Growing demand for reliable, high- capacity connectivity is expected to drive continued investments in network modernisation and next-generation telecom infrastructure.

Government initiatives such as BharatNet, Right of Way (RoW) reforms and continued investments in digital infrastructure are improving execution visibility across telecom projects and broadband expansion. These initiatives are expected to strengthen project pipelines and accelerate the deployment of telecom infrastructure across underserved regions.

Going forward, increasing Base Transceiver Station (BTS) deployments, stricter Quality of Service (QoS) requirements, network modernisation and increasing outsourcing of deployment and maintenance activities are expected to support long-term demand for integrated telecom infrastructure solutions and lifecycle services.

Growing Demand for Integrated Telecom Infrastructure Services

Telecom operators are increasingly shifting from fragmented project execution towards integrated delivery models that combine design, equipment supply, telecom power infrastructure, optical fibre deployment, network integration and lifecycle maintenance under a single execution partner. This transition is enhancing execution efficiency, reducing deployment timelines and creating larger, multi-service contract opportunities. Companies with integrated manufacturing, EPC execution and long-term O&M capabilities are therefore well positioned to benefit from this evolving procurement approach.

Telecom Tower Industry in India

Indias telecom tower industry has emerged as a critical pillar of the countrys digital infrastructure, supporting expanding wireless services and rising data consumption. As of FY2024, the total number of telecom towers in India stood at ~ 0.754 Million, compared to around 0.596 Million in FY2020, reflecting a CAGR of ~7.8%. This growth has been driven by network expansion in rural markets and continued investments in 4G and early-stage 5G rollouts.

The industry is increasingly focusing on infrastructure sharing and network densification and energy-efficient telecom power solutions to support ongoing 5G deployment. Increasing energy requirements at telecom sites are also driving demand for advanced telecom power systems, remote monitoring and lifecycle maintenance services.

Tower infrastructure remains a strategic component of telecom network expansion, supporting sustained investments across wireless connectivity and digital infrastructure. Growing data consumption, ongoing 5G rollout, urban densification and continued rural network expansion are expected to sustain demand for tower infrastructure over the medium term.

Optical Fibre EPC Industry in India4

Indias optical fibre EPC industry has become a critical enabler of the countrys telecom infrastructure, driven by rising data consumption, rapid 4G and 5G rollout, and increasing broadband penetration across urban and rural markets. The industry encompasses end-to- end activities including deployment and maintenance, positioning EPC providers at the centre of Indias digital infrastructure build-out.

The telecom optical fibre EPC market was estimated at about H84 billion in FY2024 and is projected to reach nearly H135-140 billion by FY 2028. Telecom tower fibreisation in India remains significantly below global benchmarks, indicating substantial headroom for future expansion. This continues to support increasing fibre deployment requirements across telecom networks.

Growth is further supported by increasing fibreisation of telecom towers, BharatNet expansion, smart city initiatives, rising enterprise data demand and growing last-mile connectivity requirements.

The outlook for the optical fibre EPC industry remains strong, backed by continued investments by telecom operators, government-led broadband initiatives and rising demand for digital infrastructure.

Additional demand is expected from Fibre-to-the-Home (FTTH) connections, data centres, defence communication networks and rural broadband expansion, supporting sustained medium-term growth.

The industry is also witnessing strong execution visibility for EPC players, supported by initiatives such as the National Broadband Mission (NBM) 2.0 and the increasing focus on tower fibreisation.

Adjacent Growth Opportunity: Railways Digital Infrastructure

Beyond traditional telecom networks, similar communication infrastructure requirements are emerging across adjacent sectors such as Indian Railways. The ongoing modernisation of the railway network is driving investments in high-capacity communication systems, optical fibre networks, telecom towers and digital surveillance infrastructure, creating a significant opportunity for telecom EPC companies to leverage their engineering and execution capabilities across a broader infrastructure ecosystem.

This transformation is supported by a capital allocation of Rs 2.935 lakh crore in the Union Budget 2026-27 and a dedicated safety outlay of Rs 1.17 lakh crore. These investments are driving large-scale digital transformation across the railway network.6 Key initiatives include the deployment of the indigenous Kavach safety system, alongside the deployment of a Unified Telecom Backbone based on IP MPLS technology across railway stations, enabling the development of a high-capacity and integrated communication network.

These programmes involve large-scale deployment of 2x48 core Optical Fibre Cables (OFC), deploying telecom towers and installing Al-based Video Surveillance Systems (VSS) across 1,874 stations.7 Parallel initiatives, including the implementation of advanced Electronic Interlocking systems across 6,660 stations and ongoing signalling upgrades, are further enhancing the digital backbone of railway operations. Collectively, the scale, technical complexity and execution intensity of these initiatives closely resemble telecom infrastructure deployment, positioning railway digital infrastructure as an adjacent growth vertical and a strong diversification opportunity within a sustained government-led capital expenditure cycle.8

INDUSTRY DEVELOPMENTS

Rising Tower Fibreisation

Telecom operators are increasing fibre connectivity to towers to support higher data traffic and improve network quality, creating sustained demand for optical fibre EPC services.

5G Standalone and Enterprise Networks

Increasing deployment of private networks, enterprise connectivity and 5G Standalone architecture is driving investments in advanced telecom infrastructure, creating opportunities across EPC, integration and managed services.

BharatNet and Rural Broadband Growth

Government-led rural connectivity programmes are expanding fibre networks into underserved regions, increasing EPC opportunities in village and semi-urban markets.

Growth in Broadband and FTTH Connections

Rising household and enterprise demand for high-speed internet is driving investment in FTTH and last-mile fibre infrastructure.

f Key Trend

Telecom Power Infrastructure Modernisation

Rising network densification and higher energy requirements at telecom sites are driving investments in advanced telecom power systems, energy-efficient infrastructure and remote monitoring solutions, creating opportunities for integrated telecom infrastructure providers.

Integrated EPC and Managed Services

Telecom operators are increasingly outsourcing end-to-end network deployment, integration and lifecycle maintenance, creating long-term opportunities for EPC and managed service providers.

Enterprise Data and Data Centre Demand

Expansion of cloud services, enterprise digitisation and data centre capacity is increasing demand for high-capacity fibre connectivity.

Smart Cities and Digital Infrastructure Projects

Smart city initiatives, intelligent transport systems and urban digital infrastructure projects are increasing investments in fibre networks.

Telecom & ICT Business Overview

The Company operates an integrated Telecom & ICT business encompassing product manufacturing, EPC execution and O&M services. This integrated approach enables the Company to participate across multiple stages of the telecom infrastructure lifecycle while leveraging common engineering, project execution and service capabilities across its operations.

The Companys Telecom & ICT portfolio includes telecom power systems, telecom tower infrastructure, optical fibre networks and ICT solutions. Its capabilities range from manufacturing selected telecom power products to executing network infrastructure projects and providing long-term O&M services. The Company serves telecom operators, tower companies, enterprise customers and government agencies through a nationwide execution network supported by an experienced technical workforce.

During the year, the Telecom & ICT business contributed to the Companys diversified business model, with activity spanning project execution and recurring service contracts. Alongside telecom infrastructure projects, the Company undertook fibre network, ICT and maintenance assignments, supporting long-term customer engagement across multiple infrastructure segments.

The business model is underpinned by

• Execution-led delivery capabilities across large-scale telecom EPC projects

• Integrated offerings spanning infrastructure deployment, power solutions and maintenance

• Established relationships with major telecom clients, enabling repeat order inflows

FY2026 Telecom & ICT Business Performance

The Telecom & ICT segment benefited from sustained investments in digital infrastructure, driven by network expansion, fibre deployment and increasing data consumption.

During the year, the Company also expanded its participation in Optical Fibre Cable (OFC) deployment projects, responding to growing fibreisation requirements across telecom networks and government-led broadband initiatives.

Execution remained a key focus during the year. The Company successfully completed the deployment phase of the BSNL 4G Saturation Project and transitioned into the O&M phase, demonstrating its ability to support customers across the infrastructure lifecycle. It also successfully completed the Tamil Nadu FibreNet Corporation Limited (TANFINET) project, further strengthening its execution track record in large-scale fibre network deployment its expertise in tower infrastructure, communication networks and optical fibre deployment, the Company is also pursuing opportunities emerging from railway modernisation programmes across various corridors.

As of May 25, 2026, Telecom & ICT order book stood at Rs 24,839 Million, providing strong revenue visibility supported by a balanced mix of EPC execution, recurring O&M contracts and energy solutions across government and private sector clients.

Going forward, the Company will focus on expanding its Telecom & ICT business by leveraging its integrated EPC, product and O&M capabilities. Continued investments in digital infrastructure, fibreisation, network modernisation and telecom energy solutions is expected to support demand across both government and private sector markets.

	Telecom & ICT Order Inflow During FY2026
Client	Order Details	Type	Rs. Mn
Railtel	Deployment of IP-Based Video Surveillance Systems in LHB Coaches of Indian Railways	EPC	891
Indian Railways (Jodhpur Division)	100 Railway Tower Infrastructure	EPC	226
Tata Teleservices	Operation and Maintenance of South Circle	O&M	1,859
BSNL	25,000 advanced Li-ion battery modules (100 AH/48V) alongside 2,500 IP55-rated racks	Supply	944
BSNL	25,000 advanced Li-ion battery modules alongside 2,500 IP55-rated racks	Supply	944
Reliance	Power Equipment	Job work	1,587
	Total Telecom & ICT Order Inflow		6,450

The segment witnessed strong order inflows during the year, aggregating to Rs 6,450 Million, reflecting strong traction across EPC, O&M and supply segments. Major project wins included mandates from RailTel and Indian Railways for telecom infrastructure and surveillance systems, Tata Teleservices for O&M contracts and BSNL for energy solutions, including Li- ion battery systems. The Company also secured orders from private telecom operators and OFC deployment projects, highlighting its ability to win diversified mandates across telecom, railway and energy-linked infrastructure.

The Company is also actively participating in opportunities associated with the Kavach railway safety initiative, where it is focused on providing telecom and network infrastructure solutions. Leveraging

ENERGY

Global Battery Energy Storage System (BESS) Market

The global energy transition is entering a new phase. While the past decade focused on accelerating renewable energy capacity addition, the industrys attention is increasingly shifting towards delivering clean power reliably and efficiently. This is positioning BESS as a critical component of modern power infrastructure.

The continued expansion of renewable energy, rising electricity demand and rapid growth of power-intensive infrastructure such as data centres are increasing the need for flexible energy systems capable of balancing supply and demand in real time. At the same time, evolving electricity markets are placing greater emphasis on grid resilience and system reliability, expanding the role of BESS beyond utility-scale projects to Commercial and Industrial (C&I) applications, digital infrastructure and distributed energy systems.

This structural shift is reflected in the pace of global deployment. Around 108 GW of new battery storage capacity was added during CY2025 globally, representing a 40% increase over the previous year, while cumulative installed capacity has grown nearly 11x since CY2021. Utility-scale projects accounted for nearly 80% of new deployments, reflecting the increasing role of battery storage in supporting large- scale renewable integration, while commercial and residential behind- the-meter installations also continued to gain traction. Developed markets such as the United States, Europe and Australia are leading this transition, supported by policy incentives, market reforms and increasing renewable energy penetration, resulting in wider integration of battery storage across utility-scale power systems.

The momentum is expected to persist as governments across major economies advance their clean energy transition strategies. Global climate commitments, including outcomes from COP28, have further reinforced the role of energy storage in accelerating the clean energy transition. Commitments to scale up renewable energy capacity and transition away from unabated fossil fuels are increasing the need for flexible grid infrastructure, where battery storage plays a critical role in managing intermittency and enabling reliable integration of renewables.

As per industry estimates, battery storage is emerging as a significant source of short-term grid flexibility, while declining battery costs are improving the commercial viability of storage solutions across utility- scale and distributed applications. In addition, more than 2,500 GW of renewable, storage and large-load projects are currently awaiting grid connectivity globally, highlighting the growing requirement for flexible storage infrastructure and grid modernisation.

BESS: Enabling Indias Next Phase of Energy Transition

Indias energy transition is entering a new phase, where the emphasis is shifting from renewable energy capacity addition to building a more flexible, resilient and reliable power system. As the share of solar and wind generation increases, BESS are emerging as a critical component of Indias energy infrastructure by supporting reliable integration of renewable energy and improving overall power system resilience.

The National Electricity Plan (NEP) 2023 projects Indias battery energy storage requirement to increase from 34.72 GWh by FY2027 to 236.22 GWh by FY2032, underscoring the growing role of energy storage in supporting renewable integration and maintaining grid stability. Looking further ahead, the NEP estimates

Indias BESS requirement could reach 1,840 GWh by 2047, reflecting the long-term importance of storage in the countrys evolving electricity system.10

While utility-scale renewable integration is expected to remain the primary driver of demand, the adoption of battery storage is gradually expanding across a broader range of applications. Increasing deployment across telecom infrastructure, commercial and industrial facilities, data centres, distributed energy systems and emerging sectors such as green hydrogen is expected to broaden the role of BESS within Indias energy ecosystem. As these applications mature, battery storage is likely to become an increasingly important enabler of reliable, efficient and low-carbon power infrastructure.

Policy and Procurement Ecosystem Accelerating BESS Deployment

Indias battery energy storage market has evolved rapidly from pilot projects to competitively bid, utility- scale deployments. Public sector agencies, state utilities and renewable energy developers are increasingly incorporating battery storage into their procurement strategies, reflecting the growing importance of storage in supporting grid reliability and renewable energy integration.

Procurement frameworks have also evolved significantly. While early projects primarily focused on standalone battery storage, recent tenders increasingly integrate storage with renewable energy through Standalone BESS, Round-the-Clock (RTC) and Firm and Dispatchable Renewable Energy (FDRE) models, reflecting the growing role of storage in utility-scale power procurement.

The market is further supported by a strengthening policy and regulatory k framework. Initiatives such as the National Energy Storage Mission (NESM), Production Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC), Viability Gap Funding (VGF) for BESS projects and the Energy Storage Obligation (ESO) are encouraging investment across the battery storage value chain while supporting domestic manufacturing and wider adoption of energy storage solutions. In addition, several state governments have introduced energy storage policies and procurement programmes to accelerate deployment across their respective power systems.

Collectively, these developments are laying the foundation for a more mature battery storage ecosystem in India by improving project visibility, strengthening domestic capabilities and supporting the transition towards commercial-scale deployment.

Indias BESS market is evolving from pilot projects to utility-scale deployment, supported by structured procurement frameworks, supportive policy initiatives and increasing integration of storage with renewable energy projects.

Policy Framework Supporting Energy Storage Adoption in India

National Energy Storage Mission (NESM)	Production Linked Incentive (PLI) schemes	Viability Gap Funding (VGF)	Renewable-linked tenders (RTC / FDRE)	Energy Storage Obligation (ESO)	State-level mandates and procurement
Strong policy framework supporting large- scale adoption of energy storage	Encouraging domestic manufacturing and localisation of supply chains	Backing early-stage BESS projects by improving commercial viability	Mandating integration of storage with renewable energy projects	ESO for utilities increasing from 1% in FY24 to 4% FY30"	initiatives Accelerating adoption across utilities and infrastructure segments

While the ecosystem remains import- dependent in the near term, ongoing localisation efforts are expected to improve supply chain resilience and cost competitiveness. This evolving ecosystem, combined with strong demand visibility, is expanding opportunities across the BESS value chain, including manufacturing, EPC, system integration and operations and maintenance services.

Expanding Applications Driving Long-term Demand

BESS is increasingly being deployed alongside renewable energy, conventional power systems and distributed energy solutions to improve reliability and optimise power delivery across a wide range of applications. Hybrid energy solutions combining renewable energy, battery storage and conventional backup are supporting uninterrupted power supply across telecom infrastructure, commercial and industrial facilities, critical infrastructure and remote locations.

The increasing adoption of modular and containerised BESS solutions is also improving deployment flexibility, scalability and execution efficiency. These advancements are expanding the applicability of battery storage across multiple end- use sectors and supporting broader commercial adoption of integrated energy solutions.

Renewable Energy Integration Boosting BESS Demand

Indias renewable energy programme is entering a new phase of growth, with increasing emphasis on integrating large-scale renewable capacity into a reliable and resilient power system. According to the National Electricity Plan, renewable energy capacity is expected to increase to around 500 GW by FY2030, including 365 GW of solar and 121 GW of wind capacity by FY2032, creating a substantial requirement for energy storage infrastructure.

As renewable energy penetration increases, battery storage is becoming an essential component of the electricity system by enabling greater utilisation of renewable generation, improving system flexibility and supporting reliable power supply during periods of intermittent generation. The National Electricity Plan projects Indias battery energy storage requirement to increase from 34.72 GWh by FY2027 to 236.22 GWh by FY2032, reflecting the scale of storage needed to support the countrys clean energy transition.

Growth Drivers

Indias battery energy storage market is expected to witness sustained longterm growth, supported by increasing renewable energy deployment, evolving procurement frameworks, strengthening policy support and expanding adoption across multiple end-use sectors. As the market matures, battery storage is expected to play an increasingly important role in enhancing grid resilience, improving energy reliability and supporting the countrys clean energy transition.

Beyond the requirements outlined in the National Electricity Plan, independent industry studies indicate that Indias FTM BESS market could exceed 500 GWh of cumulative deployments by 2033 under an accelerated adoption scenario. This reflects the expanding opportunity across utility- scale renewable projects, distribution utilities, open access, commercial and industrial applications, telecom infrastructure and emerging clean energy segments.

As project capacities increase and deployment scales up, manufacturing capability, system integration expertise, project execution and longterm operations and maintenance services are expected to become key differentiators across the battery storage value chain.

ENERGY SOLUTIONS BUSINESS OVERVIEW

The Companys Energy Solutions business represents a strategic adjacency to its core telecom and infrastructure operations, utilising established capabilities in power systems, telecom energy infrastructure and EPC execution. As telecom networks expand and infrastructure densification accelerates, demand for reliable, efficient and hybrid energy solutions at the site level is increasing, driving convergence with BESS.

The Company provides integrated energy solutions across BESS, solar EPC and hybrid deployments, spanning design, supply, installation, operations and maintenance services. Its product portfolio includes containerised BESS systems, Power Conversion Systems (PCS), Energy Management Systems (EMS) and cloud-based monitoring and analytics, enabling deployment across both site-level and grid- scale applications. This positions the Company to address requirements across distributed energy solutions as well as large utility-scale projects.

The Company is progressively enhancing localisation, assembly integration and value-chain participation across selected components and infrastructure systems to improve execution control, supply visibility and cost optimisation. Its current approach remains focused on phased capability enhancement, selective integration and coordinated supply-chain development, aligned with evolving business scale, execution requirements and project visibility.

The Company is also advancing its manufacturing capabilities and selective backward integration initiatives, including the expansion of containerised energy storage solutions. These efforts are aimed at improving deployment readiness, enhancing cost competitiveness and supporting future business growth.

Execution Capabilities and Operational Strengths

The Company has developed strong execution capabilities through its extensive experience in telecom and energy infrastructure projects. Its well- established vendor ecosystem, robust supply chain network and proven ability to manage large-scale, multilocation projects enable timely and efficient project execution.

The Companys operating model is focused on execution excellence, cost optimisation and disciplined working capital management, supporting efficient deployment across complex projects. Continued investments in digital systems, process automation and Management Information Systems (MIS) are further strengthening operational visibility, execution control and scalability.

These capabilities position the Company to support the growing demand for integrated energy solutions, expand its manufacturing- led business, build its BOO portfolio and deepen participation across the energy infrastructure value chain.

FY2026 Energy Segment Business Performance

FY 2025-26 marked an important year for the Companys Energy Solutions business, with operations commencing across BESS, solar EPC and hybrid energy solutions, alongside progress in developing manufacturing and execution capabilities within the energy storage ecosystem.

Manufacturing Scale-up

The Company advanced its manufacturing initiatives in containerised energy storage solutions, system integration capabilities and deployment readiness, while strengthening vendor partnerships, supply-chain coordination and

execution infrastructure to support future scale-up opportunities. The Company currently has manufacturing capacity of 2.5 GWh for containerised energy storage solutions and is progressing towards planned

expansion to 10 GWh by the end of CY 2026, aligned with demand visibility, the project pipeline and execution requirements.

Order Execution

During the year, the Company successfully delivered 178 BESS units across a diversified customer base, reflecting initial execution traction within the energy storage segment. The Companys subsidiary and manufacturing focused entity, Lineage

Power Private Limited, also reached capacity utilisation of ~80% during the year, supported by increasing manufacturing activity, project execution requirements and growing demand for BESS solutions.

The Energy Solutions segment witnessed strong business traction during the year, supported by diversified order inflows aggregating to Rs 58,147 Million in FY2026, reflecting increasing scale across BESS, solar EPC and hybrid energy solutions. The order book includes marquee projects from central and state agencies such as MSEDCL, KPTCL, KREDL, SECI, NTPC and MAHAGENCO, along with private sector engagements, demonstrating the Companys expanding across both utility-scale and Commercial and Industrial (C&I) segments.

During FY2026, the Company secured Energy order inflows of 3.20 GWh, valued at J58,147 Million, across BOO, EPC and supply businesses. The order portfolio comprises utility-scale standalone BESS, solar-plus-storage, solar EPC and equipment supply contracts, providing a balanced mix of asset ownership, project execution and product supply. This diversified order profile broadens the Companys participation across the energy storage value chain while supporting revenue visibility across multiple business models.

Energy Order Inflow During FY 2026 Diversified Order Book

The Energy order book stood at Rs 88,540 Million (as on May 25, 2026), comprising a diversified mix of BOO projects (50.1%), EPC contracts (49.8%) and supply contracts (0.1%). The diversified order mix provides revenue visibility across both execution-based and annuity-linked business models, particularly for projects involving long-term operations and maintenance components. During the year, the revenue mix remained primarily driven by EPC and execution activities, while BOO projects are expected to contribute progressively as operationalisation advances and annuity-linked revenue streams scale up over the project lifecycle.

Client	Business Vertical	Order Details	Type	GWh	Rs. Mn
KPTCL	BESS	KPTCL Standalone BESS 250 MW/ 500 MWh	BOO	0.50	6,800
KREDL	Solar + BESS	250 MWAC Solar PV Project along with 250 MW/1100 MWh BESS	BOO	1.10	17,750
		BOO Total		1.60	24,550
SECI	BESS	SECI 600 MW/1200 MWh	EPC	1.20	11,593
MAHAGENCO	Solar EPC	MAHAGENCO 200 MW AC	EPC	-	9,298
Bondada	Solar BOS	Balance of System (BOS) works for a 300 MW AC Solar Power Project	EPC	-	3,757
NTPC	BESS EPC	BESS EPC + 11-year maintenance	EPC	0.40	5,836
		EPC Total		1.60	30,484
L&T	BESS	Supply of BESS and other related equipment	Supply		1,994
Advait	BESS	Supply of BESS and other related equipment	Supply		997
Yaqui Chen	BESS	BESS Gooseneck Trailers	Supply		122
		Supply Total			3,114
		Total Energy Order Inflow		3.20	58,147

BESS Project Execution

During FY2026, the Company made significant progress in the execution of its first BESS project under the BOO model- 750 MW / 1,500 MWh MSEDCL Standalone BESS project in Maharashtra.

Key highlights

480 MWh BESS capacity commissioned during the year

While revenue and the finance lease receivable are recognised upon commissioning, the related contractual cash inflows will be received over the 12-year project tenure as per the agreed payment schedule. As additional project sites achieve COD, the corresponding revenue and finance lease receivable will be recognised.

For the commissioned project sites, the Company has accounted for the arrangement under the dealer-lessor model in accordance with Ind AS 116. Accordingly, revenue is recognised upon commissioning based on the contractual terms, and a finance lease receivable, representing the present value of committed contractual payments over the 12-year project tenure, is recognised in the Balance Sheet.

The project is being executed under a 12-year BOO model, providing long-term recurring revenue visibility through contracted annuity payments.

The commissioned sites became operational ahead of their respective Commercial Operation Date (COD) and commenced operations in line with contractual milestones.

Year Ahead

Demand across public and private sectors is expected to grow, driven by energy cost optimisation, reliability requirements, reduced diesel dependency and increasing renewable energy integration. Rising requirements for grid stability are further accelerating adoption of BESS, supporting medium- to long-term demand visibility.

With capabilities across BESS solutions, solar EPC and hybrid project execution, the Company is well positioned to participate in both site- level and utility-scale opportunities. Its focus on supply-chain optimisation, selective backward integration and disciplined project selection, together with strong order inflows and increasing participation in large- scale tenders, places the Company to capitalise on emerging opportunities in Indias energy transition.

Consolidated Order Book Summary

Pace Digiteks order book reflects a diversified mix of telecom, energy and infrastructure projects, providing strong revenue visibility and supporting sustained business growth. The diversified order pipeline across EPC, telecom infrastructure and energy storage segments positions the Company to capitalise on emerging opportunities across digital and energy infrastructure markets.

Operational Scale-Up and Business Diversification

The Companys financial performance during FY2026 reflected continued business diversification, improving execution capabilities and growing participation across telecom and energy infrastructure markets. Revenue growth was supported by sustained activity in telecom infrastructure deployment, optical fibre network execution and telecom power systems, alongside increasing contributions from energy storage manufacturing, BESS projects and renewable energy- linked opportunities.

Energy Business Scale-Up and Execution Expansion

The Energy segment gained strategic importance, supported

by increasing opportunities across BESS manufacturing, energy storage integration and renewable infrastructure applications. The Company expanded its position across utility-scale energy storage projects through EPC and BOO execution models while advancing localisation initiatives, manufacturing automation and integrated deployment capabilities.

The Energy Solutions business remains in a scale-up and capability-building phase. Accordingly, profitability and operating performance may vary depending on project mix, execution timelines, customer composition, capacity utilisation levels and deployment phasing across emerging energy storage opportunities.

Profitability and Operating Performance

Profitability during FY2026 reflected the evolving business mix, manufacturing scale-up and increasing participation in large infrastructure projects. Margin performance was influenced by project mix, execution phasing, capacity ramp-up and investments undertaken to support future growth across the energy storage value chain.

While operational scale improved significantly, the Company continued to invest in manufacturing capabilities, execution infrastructure, supply- chain readiness and organisational capacity to support emerging growth opportunities.

Working Capital and Liquidity Management

The Company maintained a disciplined approach to working capital management through milestone-based billing structures, diversified customer exposure, supply-chain optimisation and selective project participation. Improving cash conversion efficiency, strengthening collections and maintaining balance sheet flexibility remain key management priorities.

Working capital requirements remained elevated in line with higher EPC execution, manufacturing operations and inventory build-up associated with energy infrastructure projects. Integrated execution capabilities, strengthening vendor relationships and improved operational coordination continued to support execution efficiency and working capital management.

Capital Structure and Balance Sheet Strength

The Company maintained a strong balance sheet during the year. Total equity increased to Rs. 22,522 Million from Rs. 12,090 Million, reflecting the successful IPO and retained earnings generation during the year. The stronger capital base enhances financial flexibility and supports investments across manufacturing expansion, project execution capabilities and long-term growth initiatives.

Leverage increased primarily to support manufacturing capacity expansion, integrated project execution, energy asset creation and working capital requirements associated with business scale-up. However, the Company maintained a comfortable leverage profile.

Capacity Creation and Execution Readiness

The Company continued to invest in manufacturing expansion, backward integration, technology platforms and execution capabilities across its telecom and energy infrastructure businesses. During FY2026, the Company also recognised finance lease receivables of Rs. 5,315 Million following the commissioning and accounting recognition of 480 MWh capacity under the MSEDCL standalone BESS project.

Inventories increased to Rs. 5,403 Million as a strategic measure to support execution readiness, secure critical inputs and mitigate supply- chain, commodity price and foreign exchange risks. The Company also invested in manufacturing automation, localisation initiatives and integrated execution capabilities to support future growth.

Receivables and Collections

Trade receivables increased to Rs. 24,422 Million in line with higher project execution during FY2026, particularly due to significant revenue recognition in the fourth quarter, milestone-based billing structures and retention amounts associated with telecom and energy infrastructure projects. Collections have subsequently commenced and receivables are expected to normalise progressively during FY2027.

Looking ahead, the Company will remain focused on disciplined project execution, improving return ratios, optimising working capital and increasing the contribution of the energy business to its overall portfolio. Building on the investments made during FY2026 across manufacturing expansion, energy infrastructure assets, localisation initiatives and integrated execution capabilities, the Company is well positioned to enhance execution capacity, drive sustainable revenue growth, improve operational efficiencies and create long-term value for all stakeholders.

			Rs .Mn
Particulars	FY 2026	FY2025	YoY (%)
Revenue from operations	26,413	24,388	8.3%
EBITDA	4,552	4,817	(5.5)%
Profit Before Tax (PBT)	4,295	3,839	11.9%
Profit After Tax	3,073	2,791	10.1%

Details Of Significant Ratio Changes

Ratios	FY 2025-26	FY 2024-25	Increase / Decrease (%)	Reasons
EBITDA Margin	17.24%	19.75%	(12.74%)	EBITDA margin was impacted by investments in manufacturing capacity, field operations, project execution capabilities and Organizational strengthening to support future growth.
PAT Margin	11.63%	11.44%	1.66%	Despite lower operating margins, PAT margin remained stable due to operating scale benefits and improved business volumes.
				ROE moderated following the IPO-related increase in
Return on Equity (ROE)	13.64%	23.09%	(40.90%)	net worth and capital base. The benefits of the deployed capital are expected to accrue progressively as projects and manufacturing capacities ramp up.
Return of Capital Employed (ROCE)	14.08%	37.89%	(62.84%)	ROCE moderated due to investments in manufacturing capacity, BOO assets, working capital and project execution capabilities, along with the increase in capital employed following the IPO.
Debt-to-Equity Ratio	0.43x	0.13x	220.92%	Increase reflects project funding, manufacturing expansion, BOO asset creation and working capital requirements associated with business scale-up. Despite the increase, leverage remains at comfortable levels.
Interest Coverage Ratio	7.41	4.33	70.95%	Finance costs declined significantly during the year, improving the companys ability to meet its interest obligations
Inventory Turnover	3.32x	4.20x	(21.02%)	Inventory turnover declined primarily due to higher inventory levels, reflecting strategic stocking of materials and battery cells to support upcoming project execution and mitigate supply-chain and input-price volatility.
Debtors Turnover	1.32x	1.67x	(21.10%)	-
Current Ratio	1.69x	1.47x	14.92%	-

Human Resources

Pace Digiteks workforce is a key driver of its operational efficiency and execution capability across the Telecom & ICT and Energy segments. As on March 31, 2026, the Company had a team of over 2,700 employees, comprising a balanced mix of on-roll and off-roll personnel, supporting multi-location project delivery.

Talent Acquisition and Deployment:

The Company follows structured recruitment processes to attract engineering, project management and operations talent, maintaining a high offer-to-joining conversion ratio that enables timely deployment against project timelines. Hiring during the year was weighted toward the Energy vertical, reflecting the scale-up in BESS and EPC project execution.

Leadership and Capability Building:

Leadership depth was strengthened across Telecom, BESS and ICT to support execution at scale. Training programmes focused on technical skills, safety awareness and managerial competencies, with particular emphasis on telecom infrastructure, energy solutions (including BESS) and EPC execution requirements.

Performance and Retention:

A structured performance management framework aligns individual objectives with organisational priorities, backed by performance-linked compensation. This has supported strong workforce stability, with attrition maintained below 5% during the year, which is key contributor to continuity in project execution.

Employee Wellbeing and Engagement: Given the field- and site-intensive nature of operations, the Company prioritises workplace safety, employee communication and welfare access across locations.

Structured engagement initiatives are being expanded to enhance employee experience and retention.

Compliance and Industrial Relations: The Company maintains defined policies on conduct, safety and compliance, and remained fully compliant with applicable labour laws. Industrial relations were stable through the year, with no material disruptions reported.

The Company operates in sectors benefiting from sustained investments in telecom infrastructure, digital connectivity and energy transition, driven by 5G rollout, fibre expansion, grid modernisation and growing demand for energy storage solutions. Supported by a diversified order book across telecom and energy segments, the Company maintains strong revenue visibility over the near-to-medium term.

The Energy business continues to gain momentum, supported by a growing pipeline of BESS opportunities across manufacturing, supply, EPC and BOO models. The Company is progressing with capacity expansion, localisation initiatives and selective backward integration to strengthen supply chain reliability, improve execution efficiency and enhance cost competitiveness.

In addition to project execution, the Company is focused on increasing the contribution of product-led and manufacturing driven revenues through telecom power systems, lithium-ion battery systems, power conversion systems and integrated energy storage solutions. This diversification is expected to support operating leverage, strengthen margins and improve revenue quality over time.

Risk and Concerns

Risk Type	Description	Mitigation Strategy
Regulatory and Policy Risk	Changes in laws, regulations or government policies may impact business operations, project approvals and future opportunities.	The Company maintains a structured compliance framework, closely monitors regulatory developments and diversifies across business segments to reduce regulatory dependency.
Technology Risk	Rapid technological advancements may reduce the relevance of existing products or solutions.	Continuous focus is placed on technology upgradation, capability enhancement and alignment of offerings with evolving industry requirements.
Supply Chain Risk	Disruptions in procurement or volatility in input costs may affect project timelines and margins.	The Company maintains diversified supplier relationships, establishes longterm arrangements and enhances in-house manufacturing capabilities to ensure supply stability.
Customer Concentration Risk	Dependence on a limited customer base may affect revenue stability.	The Company continues to diversify its customer base across sectors while strengthening engagement with government and private clients.
Foreign Exchange Risk	Currency fluctuations may increase import costs and impact profitability.	Exposure is managed through appropriate contractual pricing mechanisms, selective hedging and increasing reliance on local sourcing.
Competition Risk	Competitive intensity may exert pressure on pricing, margins and market positioning.	The Company emphasises execution excellence, integrated service offerings and operational efficiency to maintain competitiveness.

Internal Control Systems and Their Adequacy

The Company has established internal control systems commensurate with the size, scale and nature of its operations, particularly considering its project-driven EPC activities and expanding presence in energy storage solutions. These systems are designed to ensure efficient conduct of business, safeguarding of assets, accuracy of accounting records and timely preparation of financial information.

Defined policies, standard operating procedures and approval mechanisms are implemented across key operational areas, including procurement, project execution, inventory management and revenue recognition, with specific controls over milestone-based billing and contract execution. IT-enabled systems support operational and financial reporting through integrated monitoring and control frameworks.

An independent internal audit function carries out periodic reviews of internal controls, operational processes and compliance with applicable laws and internal policies. The findings and recommendations are placed before the Audit Committee, which monitors the implementation of corrective actions and strengthens the overall control environment.

The Audit Committee provides oversight on financial reporting, internal controls and compliance. Based on the systems and reviews in place, the management believes that the internal control systems are adequate and effective to support the Companys current operations and future growth.

Disclosure of Accounting Treatment

The Company prepares its financial statements in accordance with Ind AS under the Companies Act, 2013, on an accrual basis and historical cost convention, except for certain items measured at fair value. Revenue and expenses are recognised based on contractual terms and matching principles, while assets, liabilities and inventories are measured as per applicable standards. Depreciation, impairment, provisions, borrowing costs and taxes are accounted for in line with Ind AS requirements. The restated financial information complies with SEBI ICDR Regulations and ICAI guidance and the management confirms that there are no material deviations in accounting treatment.

DISCLAIMER

The Management Discussion and Analysis of Pace Digitek Limited presents a concise overview of the Companys business performance, market trends and outlook, in compliance with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report outlines the Companys objectives, assumptions, predictions and expectations, however, actual outcomes may differ significantly due to various factors, including changes in tax legislation, governmental regulations, the Indian economy and other unforeseen circumstances.