Powerica Ltd Management Discussions

Economic Overview Indian Economy¹

India remained among the worlds fastest-growing major economies in FY 2025-26. Real GDP growth accelerated to 7.7%, compared to 7.1% in FY 2024-25. Growth was driven by strong domestic demand and resilient private consumption across rural and urban markets. Additional support came from GST rationalisation.

Industrial activity remained positive during the year. Growth was supported by sustained infrastructure investment, robust domestic demand and expansion in manufacturing and core sectors. Government capital expenditure stood at H11.21 lakh crore for FY 2026². Investments were directed towards make in India, highways, railways, airports, power and energy infrastructure. This created incremental demand for electricity solutions across construction, manufacturing and commercial segments.

Outlook³

The Indian economy is projected to grow at 6.6% GDP in FY 2026-27. Growth will be supported by strong domestic fundamentals and continued policy support. However, global energy price volatility and supply disruptions from West Asia may exert inflationary pressure and constrain growth. CPI inflation for FY 2026-27 is projected at 5.1%.

The manufacturing sector demonstrated renewed vigour in FY 2025-26, supported by continued policy impetus. The manufacturing sector is expected to gain traction, driven by rising domestic demand, higher capacity utilisation, and supportive government policies including the PLI scheme and the National Manufacturing Mission. Indias positioning as a preferred destination for supply chain diversification strengthened further during the year, as global businesses accelerated footprint rebalancing strategies in response to trade tensions. Technology adoption accelerated, with increased deployment of Industry 4.0 solutions, automation, and digital supply chain platforms across sectors.

Sustained emphasis on infrastructure-led growth continues to be reinforced by the Union Budget 2026-27 raising capital expenditure to a new record high of H12.2 lakh crore. Investments remain focused on roads, urban rail, energy grids, and logistics which are expected to generate strong multiplier effects across the industrial sector.⁴

Phase III of the EU-India Clean Energy and Climate Partnership (CECP) is expected to strengthen business collaboration. Key focus areas include wind energy, power grids, solar energy and emerging clean technologies. Aligned with the India-EU Free Trade Agreement, the initiative aims to accelerate clean energy deployment through industry partnerships and policy support.

Industry Overview Indian Power Sector⁵

Over the past decade, Indias power sector has undergone major structural transformation. The system has shifted toward higher capacity, improved adequacy, and stronger reliability. Total electricity generation reached 1,845.921 BU. The share of non-fossil fuels in total generation rose to 29.2% in FY 2025-26, equivalent to 538.97 BU.

India achieved a significant milestone of 50% of cumulative installed capacity from non-fossil fuel sources. This target was achieved five years ahead of the 2030 Nationally Determined Contribution under the Paris Agreement.⁶

Looking ahead, India is targeting a peak power demand of 458 GW by 2032. The National Electricity Plan (2023-2032) outlines investment of H9.15 lakh crore across central and state networks. A structured framework has been established by the government for large-scale energy storage deployment.

Sustainability and decarbonisation achieved landmark milestones in FY 2025-26. India achieved a total non-fossil capacity addition of 55.3 GW during the year, ranking third globally in renewable energy installed capacity⁴. Energy storage systems continued to attract growing investment as a critical enabler of renewable integration and grid stability. Policy initiatives aimed at improving distribution efficiency and DISCOM financial health are expected to support sector stability.

Diesel Generators (DG) Market in India

The Indian Diesel Generator Market was valued at RS. 14,449 crore in 2025. Growth was driven by rapid industrial expansion, Infrastructure, IT services, data center construction, and tighter emission norm transitions. Rising urbanisation and energy needs in Tier II and Tier III cities further supported market expansion. Additionally, robust growth for the Power Generation market was propelled by strong business activity across Commercial Realty, Manufacturing, Rental, Data Center, Infrastructure, which has emerged as a key driver for uninterrupted power supply solutions.

The standby power segment dominates the market. Industries, commercial establishments and critical infrastructure need reliable, high-performance solutions for immediate response during grid outages.

Medium-Speed Large Generator (MSLG) diesel sets provide high- capacity primary and emergency applications. These systems are designed for critical industrial applications with demanding operational requirements. Power output ranges from 3 MW to 10 MW per unit and can be offered in multiple configurations for larger requirement. These systems are deployed across oil refineries, nuclear power plants, fertiliser units, LNG terminals, steel plants, cement facilities, and heavy industries.

The market is expected to maintain steady growth, supported by infrastructure investment, industrial expansion, and digital

infrastructure development. Data centre capacity is projected to grow at a 20.5% CAGR during FY 2025-30. EV charging infrastructure is expected to expand from 3.6 GW to 10.8 GW at a 24.6% CAGR.

Transition to CPCB IV+ compliant fuel-efficient gensets is expected to enhance efficiency and reduce emissions. The market is projected to grow from RS. 15,966 crore in 2026 to RS. 23,803 crore by 2030, reflecting a CAGR of 10.50%.

Regulatory Framework and Emission Mandates

The regulatory landscape for power generation equipment in India is shifting rapidly toward clean energy and reduced carbon footprints. The National Green Tribunal (NGT) and the Commission for Air Quality Management (CAQM) have strengthened regulatory measures in several regions, mandating the retrofitting of diesel generators with emission control solutions. The emphasis on cleaner energy alternatives by the government will increase demand for Dual Fuel Kits (DF Kits) and Retrofit Aftertreatment Systems (RAS). Compliance with these tightening standards requires continuous engineering updates and product adaptations across the broader distribution and manufacturing sectors.

Indian Renewable Energy Industry

India ranked third globally in installed renewable energy capacity during FY 2025-26. The country also recorded its highest renewable energy contribution to electricity generation. Sector growth was driven by policy support, project execution, and private sector investment. Installed non-fossil fuel capacity reached 283.46 GW. Of this, renewable energy accounted for 274.68 GW.

Indias transition toward its 2070 Net Zero target continues to gain momentum. Investments across power infrastructure are enhancing energy security and sustainability. The focus remains on building a resilient and self-reliant energy ecosystem.

Between FY 2026 and FY 2030, India is expected to add 195-205 GW of solar capacity. Wind energy additions are projected at 35-45 GW during the same period. These additions reflect the accelerating pace of renewable energy deployment.

Indias Wind Power Market

Indias wind energy sector has expanded steadily over the years. India ranks fourth globally in installed wind power capacity. During FY 2025-26, India added a record 6.05 GW of wind capacity. This increased total installed wind capacity to more than 56 GW. Stronger policy support, enhanced project execution, and mature pipelines in major wind-producing states drive this progress.

Technological advancements have improved turbine efficiency and raised generation output. These developments have also reduced operational costs. Wind power plays an essential role in stabilising Indias electrical grid. Generation typically peaks during evening and night hours when electricity demand remains elevated. Nearly 45% of wind generation occurs during peak

demand periods. This complements solar power generation and strengthens grid stability.

As India advances its energy transition, wind power is critical for delivering affordable, domestic clean electricity, with an additional 28 GW under implementation to meet national targets. Realizing this opportunity requires faster project execution, stronger transmission infrastructure, and integrating wind with storage, positioning the sector as a driver of industrial growth and energy security.

Year-wise Wind Power Installed Capacity (MW)

Company Overview

Powerica Limited is an integrated power solutions provider operating in the Generator Set Business and Wind Power Business. The Company commenced its diesel generator set operations in 1984 and subsequently expanded its portfolio to include Medium Speed Large Generators (MSLGs).

Through its generator solutions, Powerica offers a wide range of products catering to primary and standby power requirements across diverse industries and applications. The Company also undertakes allied business activities, including the manufacture of EMI/EMC shelters and containers, acoustic enclosures along with control panels and switchboards.

In addition to its conventional power solutions business, Powerica has established a presence in the renewable energy sector through the development and operation of wind power projects. The Company operates as an Independent Power Producer (IPP) and provides Engineering, Procurement and Construction (EPC) alongside Operations & Maintenance (O&M) services for Balance of Plant (BoP) activities.

With operations spanning power generation, power backup solutions and renewable energy infrastructure, the Company has developed an integrated business model serving industrial, commercial, infrastructure and utility sectors.

Powerica successfully listed on NSE and BSE in April 26, raising total proceeds of RS. 1,100 Cr. The issue comprised a Fresh Issue of RS. 700 Cr and an Offer for Sale of RS. 400 Cr. Out of the net proceeds of RS. 662 Cr, the company allocated RS. 525 Cr towards the prepayment or repayment of certain outstanding borrowings, while J137 crore was allocated for general corporate purposes.

Business Segments Generator Set Business

The generator business is Powericas primary segment, accounting for 83.1% of total revenue in FY 2026. Through a 40+ years OEM partnership with Cummins, the Company manufactures and installs DG sets ranging from 7.5 kVA to

3,750 KVA. It serves almost all market segments including data center, manufacturing, commercial real estate, rental and infrastructure through a network of 19 sales offices and over 40 authorised dealers.

Powerica has maintained a non-exclusive association with Hyundai Heavy Industries Co Ltd since 2014 for medium speed large generators. Notable project performance, including a 63 MW project for Nuclear Power Corporation of India (NPCIL) and a 10 MW installation in Australia.

Within its allied business, the Company has manufacturing capacity for defense EMI/EMC Shelters and MIL Grades DG Sets. It also manufactures control panel as a certified Schneider Electric partner for PRISMA panels.

Additionally, Platino Automotive, the associate Company, has developed advanced Retrofit Emission Control Devices (RECDs) in response to evolving regulatory requirements and growing demand for sustainable technologies.

Wind Power Business

The wind power business is Powericas second largest segment. Operating as an Independent Power Producer (IPP), the Company has a portfolio that comprises 12 operational projects with an aggregate capacity of 330.85 MW. Revenue visibility remains strong, supported by long-term Power Purchase Agreements (PPAs) with a 25-year tenure. The segments customer base comprises a highly rated government-owned distribution utility company & a power procurement intermediary. This provides long-term revenue predictability and mitigates payment default risk. This business contributed 6.8% of total revenue in FY 2026.

The Company also leverages its engineering capabilities through its EPC and O&M services for Balance of Plant activities. This business contributed 10.1% of total revenue in FY 2026.

The Companys cumulative execution track record includes infrastructure development for 12 projects aggregating 450.40 MW. It also provides ongoing maintenance services across 10 wind power projects.

Current order momentum is supported by multiple third-party contracts. These include two major projects under construction with a combined capacity of 435.60 MW and recently awarded land aggregation contracts for solar installations.

Financial Performance Key Highlights

Key Financial Ratios

Pursuant to provisions of Regulation 34 (3) of SEBI (LODR) Regulation, 2015, read with Schedule V part B (1), details of Key Financial Ratios are given hereunder:

Business Outlook

The sector continues to benefit from multiple structural megatrends, such as increasing electrification, renewable integration, EV ecosystem expansion and data centre investments. These trends support the Companys long-term growth prospects. Management remains focused on capturing emerging opportunities and is targeting double-digit topline growth in FY 2027.

The Company has initiated capex to construct a 52.7-MW and a ~100-MW wind power asset in Gujarat. The budgeted capital expenditures for these projects are RS. 380 crores and RS. 750 crores, respectively. The projects are expected to be funded through a debt-equity mix, with approximately 70-75% debt financing and the balance funded through internal accruals.

Risk and Management

Internal Control and Their Adequacy

The Company has established an internal financial control (IFC) framework commensurate with the size, scale, and nature of its operations, encompassing policies and procedures for the orderly and efficient conduct of business, safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. The framework operates under the oversight of the Board of Directors, the Audit Committee, and senior management, with clearly defined roles, responsibilities, and delegation of authority across functions.

Mechanisms for monitoring compliance with regulatory and operational standards.

The Company has instituted a structured compliance management system to track and ensure adherence to applicable laws, regulations, and internal operational standards across its businesses and locations. This includes periodic compliance certifications from functional and unit heads, a compliance calendar/tracker monitored by the legal and secretarial teams, statutory and regulatory filings monitored for timeliness, and escalation mechanisms for identified non-compliances. Regular

updates are placed before the Audit Committee and the Board to ensure oversight and corrective action where required.

The Companys internal audit function operates independently and conducts periodic risk-based audits across business units and processes to evaluate the design and operating effectiveness of internal controls. Findings and recommendations are reported to the Audit Committee, along with follow-up on implementation of corrective actions. This is supported by risk management process that identifies, assesses, and monitors key business risks, enabling proactive risk mitigation and reinforcing overall operational integrity and governance discipline.

Cautionary statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied in such statements due to factors beyond the Companys control. The Company makes no commitment to publicly amend, change, or revise any forward-looking statements based on subsequent developments.