Pratham EPC Projects Ltd Management Discussions

1. Global Economic Outlook

The global economy in FY 2024 25 operated in a landscape shaped by connued in aonary pressures, elevated interest rates, and geopoli cal uncertain es. While advanced economies such as the US and Eurozone saw moderate growth, Asia remained the growth engine of the world. According to the Internaonal Monetary Fund (IMF), global GDP growth stood at around 3.2% in 2024, and is expected to remain between 3.0 3.3% in 2025 26, re ecng resilience despite uncertainty.

Commodity markets remained vola le during the year, par cularly oil and gas, due to geopoli cal con icts and supply disrupons. However, global infrastructure investments, digital transformaon, and the ongoing energy transion have created stable demand for EPC and construcon services worldwide. For EPC companies, this meant that while risks from global volality persisted, opportunies also grew in renewable infrastructure, oil & gas pipelines, and urban ulies.

2. Indian Economic Outlook

India connued to be one of the fastest-growing large economies in the world, maintaining its posion as the third-largest global economy in PPP terms. FY 2024 25 saw Indias GDP expand by 6.5%, with a par cularly strong performance in the last quarter where growth touched 7.4%. This was driven by buoyant domes c demand, robust manufacturing acvity, and record public capital expenditure.

Government ini a ves like PM Ga Shak , National Infrastructure Pipeline (NIP), and heavy investment in roads, railways, ports, power, and oil & gas sectors played a catalyc role. Crude oil demand rose to all-me highs, making India the largest driver of global oil demand growth, surpassing even China. Infrastructure-related reforms, ease of doing business improvements, and public-private partnership opportunies have made India an aracve market for EPC companies.

Looking ahead, forecasts for FY 2025 26 remain in the 6.3 6.5% range, sugges ng con nued momentum. For Pratham EPC Projects Limited, this macroeconomic backdrop translates into a robust pipeline of opportunies across oil, gas, and water transmission projects.

3. Oil & Gas Industry Outlook

The Indian oil & gas sector remained a major driver of EPC growth. India currently consumes around 5.05 million barrels per day of crude oil, and is expected to account for more than one-third of the worlds demand growth over the next decade. Natural gas infrastructure is also expanding rapidly, with increasing investments in city gas distribuon (CGD), LNG terminals, and cross-country gas pipelines.

Government reforms such as "One Naon, One Grid, One Tari " in gas and connued investment in clean fuel projects are enhancing opportunies for EPC service providers. For companies like Pratham EPC, this means access to a growing set of projects not only in pipelines but also in supporng facilies such as compressor staons, re neries, and terminals.

Addi onally, vola lity in global oil prices and shiing geopolics in energy supply chains have prompted Indian companies to priorize domesc infrastructure building, thereby creang consistent demand for domesc EPC execuon.

4. EPC & Infrastructure Industry Outlook

The EPC industry in India is witnessing structural tailwinds. The Union Budget 2024 25 allocated record levels of public capex, with significant porons directed to transport, water, oil & gas, and industrial corridors. The logiscs sector alone is projected to grow at 10.7% CAGR through 2026, boosted by integrated iniaves such as PM GaShak and the Naonal Logiscs Policy.

This creates significant opportunies for EPC players to contribute to mega projects involving pipelines, water transmission networks, and industrial ulies. Increasing adopon of digital tools, drones, and AI-enabled project management has further improved efficiency, accuracy, and safety in EPC execuon.

For Pratham EPC Projects Limited, which already has a demonstrated track record in cross-country pipelines, this sector outlook aligns perfectly with its competencies. The Company is well-posioned to leverage its experse and strong client relaonships to capture a larger market share in the coming years.

5. Company Performance FY 2024 25

The financial year 2024 25 was a landmark year for Pratham EPC Projects Limited. The Company not only delivered solid domesc performance but also took a historic step towards internaonal expansion with the incorporaon of its Wholly Owned Subsidiary (WOS) in the UAE Pratham Internaonal Contracng LLC (OPC).

This subsidiary quickly achieved trac on, securing a presgious project worth USD 19.75 million, employing over 250 skilled professionals on ground. This achievement demonstrates both the Companys ability to execute on internaonal soil and the trust it commands among global clients.

Financial Highlights ( in Crores)

Parculars	FY 2024 25
Revenue from Operaons	117.78
Other Income	3.72
Total Income	121.5
EBITDA	36.31
EBITDA Margin %	21.05%
Finance Cost	1.16
Share Capital	17.76
Reserves & Surplus	56.61
Net Worth	74.37
Long-Term Borrowings	4.19

The Companys EBITDA margin of 21% reflects improved efficiency, ght cost control, and strong project execuon capabilies. With low debt levels (long-term borrowings of 4.19 Cr), Pratham EPC has maintained a strong balance sheet while expanding globally.

6. Strategic Highlights

Internaonal Expansion: Establishment of UAE subsidiary provides a base for expansion into the wider GCC region (Saudi Arabia, Oman, Qatar).

Overseas Project Success: Timely execuon of a large-value order showcases ability to compete globally.

Domesc Growth: Robust order book with execuon visibility of 24 30 months, ensuring stable revenues.

Focus on Sustainability: Adopon of greener pracces, improved safety standards, and investment in digital tools for project delivery.

7. SWOT Analysis

Strengths

Proven track record in EPC execuon across oil, gas, and water sectors.

Strong financial health with low debt and healthy margins.

Growing internaonal presence through UAE subsidiary.

Weaknesses

Dependence on commodity price cycles for raw material costs.

Capital-intensive nature of EPC industry requires high working capital.

Opportunies

Expanding domesc oil & gas infrastructure.

Rising EPC demand in Middle East markets.

Scope for diversi caon into renewable energy EPC.

Threats

Volality in crude oil prices and foreign exchange.

Geopolical instability a ecng internaonal projects.

Rising compeon from larger global EPC companies.

8. Human Resources

As of March 31, 2025, Pratham EPC had a total strength of over 408 employees, including more than 250 professionals deployed overseas in the UAE. The Company connues to emphasize training, safety awareness, and leadership development. Special focus is being given to building cross-border teams and enhancing global exposure for employees.

9. Future Outlook

With a Net Worth of 743.7 Cr, strong execuon capabilies, and a strategic foothold in the Middle East, Pratham EPC Projects Limited is posioned for accelerated growth in the coming years. The Companys focus on strengthening its order book, exploring new geographies, and maintaining operaonal efficiency will con nue to create long-term value for stakeholders.

Looking forward, Pratham aims to consolidate its domesc leadership in EPC execuon while building a sustainable interna onal presence in the MENA region. With a commitment to safety, sustainability, and stakeholder value, the Company is on track to establish itself as a globally relevant EPC enterprise

Rao Analysis:

For the performance of the year, the company is stang the details of the undermenoned raos indica ng the performance and also stang significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial raos, along with its explanaons which are as under:

Sr. No.	Rao	For the year ended as at 31.03.2025	For the year ended as at 31.03.2024	% Change	Explanaon, where % change is more than 25%
1.	Debtors Turnover	5.09	4.31	18.00%	NA
2.	Inventory Turnover	3.81	4.25	-10.45%	NA
3.	Interest Coverage Rao	16.83	8.12	107.21%	The Interest Coverage Rao has improved significantly on account of be er operang performance and reducon in nance costs during the year, re ecng the Companys stronger ability to meet its debt obligaons
4.	Current Rao	3.56	4.38	-13.91%	NA
5.	Debt Equity Rao	0.16	0.06	187.79%	It is primarily increased due to Increase in Borrowings during the year.
6.	Operang Pro t Margin (%)	16.59%	22.38%	-25.88%	The Operang Pro t Margin has decreased mainly due to higher operang expenses during the year, which impacted pro tability despite growth in revenue.
7.	Net Pro t Margin (%)	11.49%	14.60%	-21.28%	NA
8.	Return on Net Worth (%)	20.02%	25.49%	-21.47%	NA

Notes:

a Above raos were based on the Standalone Financial Statements of the Company.

b. De nions of raos:

I. Debtors turnover: Net Credit Sales / Average Account Receivable. ii. Inventory turnover: Net Sales / Average Inventory iii. Interest coverage rao: Total EBIT by nance cost for the year. iv. Current rao: Current assets / Current liabilies v. Debt equity rao: Total Debt / Shareholders Equity vi. Operang profit margin: Operang EBIDTA by revenue from operaons for the year vii. Net profit margin: Pro t for the year by total income for the year. viii. Return on net worth: Pro t for the year by average Total Equity

Internal control systems and their adequacy.

The Company has adequate internal control procedures commensurate with the size and nature of its business. For the FY 2024-2025, M/s Rohan Thakkar & Co., Chartered Accountants and in-house audit team carried out internal audits and the internal audit reports prepared by them were placed before the Audit Commiee.

Cauonary statement

The Statement in this Management Discussion and Analysis Report describing the Companys objecves, projecons, esmates, expectaons or predicons may be ‘forward looking statements within the meaning of applic able laws and regulaons. Actual results might differ substanally or materially from those expressed or implied. I mportant developments that could affect the Companys operaons include demand-supply condions, changes in government and internaonal regulaons, tax regimes, economic developments within and outside India and other factors such as ligaon and labour relaons.