Pratham EPC Projects Ltd Management Discussions

1. Global Economic Outlook

The global economy during FY 2025-26 continued to demonstrate resilience despite heightened geopolitical tensions, trade fragmentation, elevated commodity-price volatility and uncertainty surrounding global financial conditions. The global economic environment was increasingly influenced by geopolitical developments, supply-chain disruptions and changing trade policies, while inflationary pressures continued to moderate from their earlier peaks.

According to the International Monetary Fund (IMF), global economic growth is projected at approximately 3.0% in 2026 and 3.4% in 2027, reflecting a relatively stable but subdued global growth trajectory. The outlook remains subject to significant downside risks, particularly from geopolitical conflicts, higher commodity prices, renewed trade tensions and tighter financial conditions.

Notwithstanding the challenges, global investments in infrastructure, energy security, utilities, digitalisation and the energy transition continued to create opportunities for engineering, procurement and construction ("EPC") companies. The increasing focus of governments and businesses on resilient infrastructure, domestic energy security and modernisation of utility networks is expected to support long-term demand for specialised EPC capabilities.

For EPC companies, the global environment therefore presents a combination of challenges and opportunities. While volatility in commodity prices, financing costs and geopolitical conditions may affect project execution and margins, investments in energy infrastructure, pipelines, water transmission, urban utilities and related infrastructure continue to provide a favourable long-term opportunity landscape.

2. Indian Economic Outlook

India continued to remain one of the worlds fastest- growing major economies during FY 2025-26, supported by resilient domestic consumption, infrastructure investment, manufacturing activity and a strengthening private investment cycle.

As per the Government of Indias estimates presented in the Union Budget 2026-27, Indias GDP growth for FY 2025-26 is estimated at 7.4%, while nominal GDP growth is estimated at 8.0%. Gross Fixed Capital Formation is estimated to have grown by 7.8% during FY 2025-26, reflecting continued investment activity across the economy.

The Government continued to place infrastructure development at the centre of Indias growth strategy. Public capital expenditure has been enhanced from approximately Rs11.2 lakh crore in FY 2025-26 Budget Estimates to Rs12.2 lakh crore for FY 2026-27, demonstrating the continued policy focus on infrastructure-led economic growth.

Investment in roads, railways, water infrastructure, energy, oil & gas, urban infrastructure and industrial development is expected to remain a key contributor to Indias economic expansion. Government programmes aimed at improving logistics, connectivity, energy security and infrastructure efficiency are expected to generate sustained opportunities for EPC contractors.

For Pratham EPC Projects Limited, the Indian economic environment continues to offer a favourable operating backdrop. The Companys capabilities in oil & gas pipelines, water transmission infrastructure, civil construction and allied EPC services position it to participate in the countrys expanding infrastructure and energy investment cycle.

3. Oil & Gas Industry Outlook

The Indian oil & gas sector continues to remain strategically important to the countrys economic development and energy security. Indias growing energy requirements, expanding urbanisation, industrialisation and transportation demand are expected to support longterm investments across the oil & gas value chain.. Natural gas infrastructure is also expanding rapidly, with increasing investments in city gas distribution (CGD), LNG terminals, and cross-country gas pipelines.

However, during FY 2025-26, the sector operated against a backdrop of significant global volatility. Geopolitical developments, disruptions in major energy corridors and fluctuations in crude oil prices highlighted the importance of energy security and resilient domestic infrastructure. During 2025, Indias oil-demand growth was affected by factors including increasing biofuel usage and a strong monsoon, while LPG remained an important source of incremental oil-product demand.

Government reforms such as "One Nation, One Grid, One Tariff in gas and continued investment in clean fuel projects are enhancing opportunities 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 supporting facilities such as compressor stations, refineries, and terminals.

Indias energy infrastructure continues to evolve with increasing investments in natural gas distribution, crosscountry pipelines, city gas distribution networks, LNG infrastructure, refineries, terminals and associated facilities. At the same time, Indias energy transition is creating additional opportunities for engineering and infrastructure companies. Investments in cleaner fuels, gas distribution, energy-efficient infrastructure and supporting utility networks are expected to complement conventional oil & gas infrastructure spending.

4. EPC & Infrastructure Industry Outlook

The Indian EPC and infrastructure industry continued to benefit from strong government expenditure, increasing infrastructure requirements and the countrys long-term economic growth objectives. The Union Budget 2026-27 has reinforced the Governments commitment to infrastructure-led development, with public capital expenditure proposed at Rs12.2 lakh crore, an increase from ^11.2 lakh crore (BE) in FY 2025-26 Budget

Estimates. The Government has also continued to focus on connectivity, industrial infrastructure and the development of high-speed rail and other large-scale infrastructure projects. The Governments continued emphasis on infrastructure spending, together with increasing private-sector investment, is expected to provide structural support to the EPC industry over the medium to long term.

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

For Pratham EPC Projects Limited, these industry trends are closely aligned with its established capabilities. The Companys experience in executing oil & gas pipelines, water transmission projects, civil infrastructure and associated engineering activities provides it with a strong foundation to pursue opportunities arising from Indias infrastructure expansion. The Company is well-positioned to leverage its expertise and strong client relationships to capture a larger market share in the coming years.

FY 2025-26 was a year of continued business development and operational consolidation for Pratham EPC Projects Limited. During the year, the Company continued to strengthen its position in the EPC segment while expanding the scale of its operations and geographical reach.

The Company recorded consolidated revenue from operations of approximately Rs140.22 crore during FY 2025-26, as compared with approximately Rs118.90 crore during FY 2024-25, representing a year-on-year growth of approximately 17.94%. Consolidated revenue, including other income, stood at approximately Rs143.30 crore, compared with approximately Rs122.78 crore in the previous year.

Financial Highlights (Rs in Crores)

Particulars	FY 2025-26
Revenue from Operations	140.22
Other Income	3.08
Total Income	143.30
EBITDA	14.48
EBITDA Margin %	10.33%
Finance Cost	4.36
Share Capital	18.21
Reserves & Surplus	72.74
Net Worth	90.95
Long-Term Borrowings	12.87

6. Strategic Highlights

International Expansion: The Companys international expansion remains a key strategic priority. Through its wholly owned subsidiary, Pratham International Contracting LLC-OPC, established in the UAE, the Company has created a platform to participate in infrastructure and EPC opportunities across the Middle East and wider MENA region. The UAE presence provides a strategic base for exploring opportunities in markets such as Saudi Arabia, Oman, Qatar and other GCC countries.

Overseas Project Success: The Companys successful entry into the international EPC market represents an important milestone in its gowth journey.The execution of overseas projects has provided the Company with valuable experience in managing international operations, manpower, supply chains and project requirements, while strengthening its ability to compete in global markets.

Domestic Growth: Its established execution capabilities and relationships with customers provide a strong foundation for securing and executing new projects. The Management remains focused on maintaining a healthy order pipeline and improving execution efficiency so as to provide sustainable revenue visibility while maintaining prudent financial and working-capital discipline.

Focus on Sustainability: the Company remains focused on adopting environmentally responsible practices, improving resource efficiency and reducing the environmental impact associated with its project execution activities wherever commercially and technically feasible.

7. SWOT Analysis

Strengths

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

- Strong financial health with low debt and healthy margins.

- Companys diversified project capabilities across EPC activities.

- Growing international presence through UAE subsidiary.

Weaknesses

- Dependence on commodity price cycles for raw material costs.

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

Opportunities

- Expanding domestic oil & gas infrastructure.

- Rising EPC demand in Middle East markets.

- Scope for diversification into renewable energy EPC.

Threats

- Volatility in crude oil prices and other key inputs may affect the project margins.

- International operations expose the Company to fluctuations in foreign exchange rates, which may affect project economics and reported financial performance.

- Geopolitical instability affecting international projects.

- Rising competition from larger global EPC companies.

- Project delay and regulatory risks.

8. Human Resources

As of March 31, 2026, Pratham EPC had a total strength of over 222 employees. The Company continues 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 ^90.95 Cr, strong execution capabilities, and a strategic foothold in the Middle East, Pratham EPC Projects Limited is positioned for accelerated growth in the coming years. The Companys focus on strengthening its core EPC operations, maintaining a healthy order pipeline and exercising greater discipline in project selection and bidding and maintaining operational efficiency will continue to create long-term value for stakeholders.

Looking forward, The Company also intends to leverage its UAE presence to selectively pursue suitable EPC opportunities across the GCC and wider MENA region. International expansion is expected to provide the Company with an additional avenue for growth and geographical diversification while enabling it to build capabilities in international project execution. With a commitment to safety, sustainability, and stakeholder value, the Company is on track to establish itself as a globally relevant EPC enterprise.

Pratham EPC Projects Limited aims to consolidate its position as a reliable EPC service provider in India while progressively establishing a sustainable presence in international markets. With continued emphasis on execution excellence, financial discipline, safety, sustainability and stakeholder value, the Company remains well positioned to participate in the next phase of Indias infrastructure growth and the expanding EPC opportunity in the Middle East region.

Ratio Analysis:

For the performance of the year, the company is stating the details of the undermentioned ratios indicating the performance and also stating significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with its explanations which are as under:

Sr. No	Ratio	For the year ended as at 31.03.2026	For the year ended as at 31.03.2025	% Change	Explanation, where % change is more than 25%
1	Debtors Turnover	2.87	5.09	-43.61%	Decrease in ratio due to decrease in turnover and increase in average receivables during the year.
2	Inventory Turnover	2.56	3.81	-32.91%	Decrease in ratio due to decrease in total turnover and increase in average inventories.
3	Interest Coverage Ratio	2.70	16.83	-14.13	NA
4	Current Ratio	2.34	3.69	-36.57%	Decrease in ratio due to increase in short term borrowings during the year.
5	Debt Equity Ratio	0.43	0.16	165.66%	Increase in ratio due to increase in debts / borrowings during the year.
6	Operating Profit Margin (%)	5.08%	16.59%	17.52%	NA
7	Net Profit Margin (%)	1.75%	11.49%	-84.75%	Decrease in ratio due to decrease in sales and earnings during the year.
8	Return on Net Worth (%)	1.93%	20.02%	-90.37%	Decrease in ratio due to decrease in sales and earnings during the year.

Notes:

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

b. Definitions of ratios:

i. Debtors turnover: Net Credit Sales / Average Account Receivable.

ii. Inventory turnover: Net Sales / Average Inventory

iii. Interest coverage ratio: Total EBIT by finance cost for the year.

iv. Current ratio: Current assets / Current liabilities

v. Debt equity ratio: Total Debt / Shareholders Equity

vi. Operating profit margin: Operating EBIDTA by revenue from operations for the year.

vii. Net profit margin: Profit for the year by total income for the year.

viii. Return on net worth: Profit 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 2025-2026, M/s Rohan Thakkar & Co., Chartered Accountants and M/s Varsani & Associates, Chartered

Accountants and in-house audit team carried out internal audits and the internal audit reports prepared by them were placed before the Audit Committee.

Cautionary statement

The Statement in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be ‘forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include demand-supply conditions, changes in government and international regulations, tax regimes, economic developments within and outside India and other factors such as litigation and labour relations.