PTC India Ltd Management Discussions

Cautionary Statement:

The report contains forward-looking statements, identified by words like ‘plans, ‘expects, ‘will, ‘anticipates, ‘believes, ‘intends, projects, ‘estimates and so on. All statements that address expectations or projections about the future, but not limited to the Companys strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. The Companys actual results, performance or achievements could thus differ from those projected in any forward-looking statement. The Company assumes no responsibility to publicly amend, modify or revise any such statement based on subsequent developments, information, or events. The Company disclaims any obligation to update these forward-looking statements, except as may be required by law.

World Economy:

The latest projections by the International Monetary Fund and Organisation for Economic Co-operation and Development indicate that the global economy is expected to witness moderate growth in 2026-27, but with elevated uncertainty arising from geopolitical tensions, energy market disruptions, inflationary pressures, and trade fragmentation. The IMF projects global GDP growth at around 3.1% in 2026 and 3.2% in 2027, while the OECD estimates global growth at about 2.9% in 2026 and 3.0% in 2027. Both institutions highlight higher energy prices, persistent inflation, and geopolitical risks as key challenges to global economic stability. The global energy outlook remains heavily influenced by middle east crisis (Iran - US war and key energy transit hub of Hormuz is blocked), Russia - Ukraine war, trade barriers and many more transient geopolitical events leading to higher cost of energy basket.

For India, the outlook remains relatively strong. Despite global headwinds, India is expected to remain one of the fastest-growing major economies, supported by robust domestic demand, infrastructure investment, manufacturing expansion, urbanization, digitalization, and rising electrification. The IMF has projected Indias growth at around 6.5% during 2026-27, significantly above the global average.

1. Industry Structure & Developments

FY 2025-26 witnessed continued momentum in Indias power sector driven by rising electricity demand, rapid renewable energy integration, transmission expansion, and evolving market-based mechanisms. India recorded sustained growth in peak power demand supported by industrial recovery, digital infrastructure expansion, electrification initiatives, and extreme weather conditions.

The Government of India continued to emphasize energy transition through accelerated renewable energy capacity addition, Green Hydrogen Mission initiatives, battery energy storage systems (BESS), and strengthening of transmission corridors under the National Green Energy Corridor programme.

The power market ecosystem also underwent significant regulatory evolution during the year, including developments relating to:

• Market coupling framework discussions;

• Ancillary services market expansion;

• Growth in Green Day Ahead Market (GDAM) and Renewable Energy Certificates (REC);

• Increasing focus on resource adequacy and storage integration;

• Enhanced role of power exchanges and market-based economic dispatch mechanisms; ^•

• Regulatory emphasis on reliability, flexibility and grid balancing.

The increasing penetration of renewable energy has strengthened the need for flexible resources, real-time balancing, and optimized electricity trading solutions, thereby creating new opportunities for market intermediaries and trading companies.

2. Economic Overview

India remained among the fastest growing major economies during FY 2025-26 despite global geopolitical uncertainties, inflationary pressures, and supply chain disruptions. Growth in manufacturing, infrastructure, railways, data centres, urbanization, and digital economy continued to support electricity demand growth.

The countrys policy direction remains focused on Energy security (led by electricity); Decarbonization; Domestic manufacturing; Infrastructure-led economic growth; Regional energy cooperation. The Electricity demand growth expects to be robust across commercial, industrial, and residential segments, supporting continued growth in power market.

3. Energy Transition

The global energy transition is fundamentally reshaping electricity markets, driven by the rapid growth of renewable energy, electrification of end-use sectors, decarbonization commitments, and the emergence of distributed energy resources. As power systems become increasingly reliant on variable renewable energy sources such as solar and wind, the role of electricity traders is evolving from conventional intermediaries facilitating bilateral transactions to sophisticated market integrators managing volatility, flexibility, and risk across multiple market segments. Electricity traders are now playing a critical role in optimizing renewable energy portfolios, enabling cross-border and inter-regional power flows, supporting real-time balancing requirements, facilitating green power procurement through innovative contractual structures, and unlocking value from emerging resources such as battery energy storage systems, demand response, and green hydrogen. By leveraging market intelligence, advanced analytics, and risk management capabilities, traders contribute to efficient price discovery, enhanced liquidity, and reliable system operations, thereby serving as an important enabler of a resilient, competitive, and low-carbon power ecosystem.

4. Key Govt. & Regulatory Initiatives impacting Power Traders in India

(FY 2025-26)

This document summarizes significant policy reforms, regulatory directives, and procedural amendments issued by key power sector institutions in India including the Central Electricity Regulatory Commission (CERC), Ministry of Power (MoP), Central Electricity Authority (CEA), Grid-India, and NLDC during FY 2025-26. These developments may directly or indirectly influence power traders by reshaping market design, enabling new trading products, and improving operational and financial frameworks.

CERC Orders Day-Ahead Market & Real Time Market Coupling Across Exchanges: The Central Electricity Regulatory Commission (CERC) has brought in regulations (Draft) for implementation of coupling of exchanges in liquid segment of market (DAM & RTM). This new structure will have Grid India (System Operator) as Market Coupling Operator (MCO). The goal is to enhance market efficiency, price discovery, and enhance liquidity in short-term power trading.

Derivative Market: The Multi Commodity Exchange of India (MCX) & National Stock Exchange (NSE) received approval to roll out electricity futures contracts. This development empowers power producers, distribution companies, and large consumers to manage price volatility by hedging electricity procurement through standardized futures instruments, marking a significant step in deepening Indias energy markets.

Ministry of Power - Amendment to Electricity Rules, 2005 (Energy Storage Ownership and Operation) - Ministry of Power notified amendments to the Electricity Rules, 2005, clarifying that energy storage systems (ESS) may be owned and operated independently or alongside generation, transmission, or distribution licensees. The amendment recognizes ESS as a distinct grid element, enabling DISCOMs, generators, and third-party investors to deploy storage assets under commercial frameworks. This change is a key enabler for flexible grid operations and renewable balancing.

Carbon Credit Trading Scheme Implementation: Government of India (GoI) advanced the implementation of the Indian Carbon Market (ICM) under the Carbon Credit Trading Scheme (CCTS) notified by the Ministry of Power in coordination with the Ministry of Environment, Forest and Climate Change. The framework establishes a domestic carbon credit market where obligated entities can trade carbon credits to meet emission intensity targets. The Bureau of Energy Efficiency (BEE) is designated as the administrator of the scheme, while the Grid Controller of India acts as the registry for carbon credit certificates. The scheme is expected to gradually integrate voluntary and compliance carbon markets in India and create a structured mechanism for incentivizing emission reductions across energyintensive sectors.

PM Surya Ghar Yojana - Rooftop Solar Expansion Milestone: Under the PM Surya Ghar: Muft Bijli Yojana, India has achieved significant progress in distributed renewable energy deployment, with approximately 9.56 GW of rooftop solar capacity installed as of March 2026. The scheme aims to accelerate residential solar adoption through capital subsidies, streamlined application processes, and integration with DISCOM billing systems. This milestone reflects growing consumer participation and improved policy execution at the state level, contributing to reduced peak demand pressures on the grid and enhancing energy self-sufficiency.

Renewable Energy Implementing Agency (REIA): The Ministry of New and Renewable Energy (MNRE) directed that only SECI will act as the REIA for future renewable procurement bids to curb and control the future capacity addition (renewable) and focus on the implementation of already bid projects.

5. Business Overview (Segment wise)

During FY 2025-26, the Company continued to strengthen its position across various segments of the power trading value chain.

• PTC achieved total electricity trading volume of 92.80 BUs, and RECs of 68.38 lacs during 2025-26. The volume growth has been 12% over volume of 82.75 BUs of the last financial year 2024-25.

• PTC achieved short-term trading volume of 57.97 BUs during 202526 against the previous years volume of 49.79 BUs with a growth of 16%.

• Further, PTC has achieved long & medium-term trading volumes of 34.82 BUs against the previous years volume of 32.95 BUs. PTC managed to retain its leadership position in terms of the overall trading volumes in the power trading market.

• PTCs short term bilateral trade volumes were 5.74 BUs against the previous year figure of 6.95 BUs and power exchanges volumes during the year were 52.24 BUs against the previous year volume of 42.84 BUs.

• In the current year, PTC has operationalised 500 MW on medium term basis. ^•

• Cross-border transactions remain a vital part of our portfolio with total volume of 9,718 Mus. In the current year, total Cross-border (Imp & Exp) trade with Bhutan witnessed a volume of 8,670 MUs. PTC has a long-term power purchase agreement for 118 MW Nikachu Hydroelectric Project in Bhutan. The project is commissioned, and power supply has started to State Utility of Assam. In FY 25-26, supply from Nikachu HEP has been 350 Mus.

• PTC has supplied 1,596 MUs to Bangladesh Power Development Board (BPDB) in the current financial year under the Long-term contract for 200 MW capacity.

• 21 new entities have been onboarded for trading related business.

• During the year, the Company continued to strengthen its presence in the power distribution, port infrastructure, renewable energy, and project management consultancy domains. The Company is currently providing operation and maintenance support for electrical distribution networks at major maritime ports including Mumbai Port Authority, Deendayal Port Authority, and Paradip Port Authority. Leveraging its experience in port power systems, the Company is actively pursuing opportunities in project management consultancy, network modernization, renewable energy integration, shore power infrastructure, energy efficiency initiatives, and asset management services across major ports and maritime infrastructure projects.

• The Company is also supporting industrial and institutional customers through operation and maintenance of power distribution systems and power portfolio management assignments. Existing engagements at industrial areas and Special Economic Zones have created opportunities for expansion into distribution franchisee services, smart utility solutions, advanced metering infrastructure, renewable energy procurement, regulatory advisory services, and integrated energy management solutions.

• Under its consultancy business, the Company is providing Project Management Consultancy (PMC) services for development of transmission lines and substations, including grid connectivity infrastructure and electrical network augmentation projects. These assignments are expected to open avenues for future engagements in operation and maintenance of electrical assets, power system studies, captive renewable energy integration, transmission planning, and infrastructure expansion projects.

• The Company has successfully established its capabilities in regulatory and distribution licensing consultancy through assignments for major industrial parks, Special Economic Zones, and port authorities. Building on this expertise, the Company is actively pursuing opportunities in end-to-end power distribution management, regulatory compliance support, metering and billing services, distribution license advisory, and smart distribution utility management.

• The Company is also supporting various government initiatives for accelerating rooftop solar deployment under the PM Surya Ghar Muft Bijli Yojana across multiple states. These assignments are expected to generate future opportunities in solar project implementation support, project monitoring and advisory services, solar asset management, and renewable energy advisory services.

• In the clean energy and sustainability sector, the Company is undertaking studies related to green energy integration in ports and development of business models for electric vehicle charging infrastructure. These initiatives position the Company to capitalize on emerging opportunities in renewable energy project implementation, green hydrogen initiatives, carbon reduction programs, energy transition advisory, EV charging infrastructure development, and power supply solutions for e-mobility ecosystems.

• With increasing focus on sustainability, energy transition, and modernization of electrical infrastructure, the Company is actively pursuing opportunities with ports, industrial parks, Special Economic Zones, urban infrastructure agencies, and large institutional consumers for consultancy, project management, distribution management, renewable energy integration, energy efficiency programs, smart utility services, and regulatory advisory assignments.

The Company continued to leverage its strong industry relationships, domain expertise, and market intelligence to provide efficient trading solutions to generators, distribution utilities, industrial consumers, and other stakeholders. Going forward, your Companys focus will continue on Expanding renewable and green power portfolio; Digitalization of trading operations; Risk management enhancement; Exploring opportunities in energy storage and emerging market products; and strengthening regional power cooperation initiatives.

Subsidiary & Associate companies of PTC India Limited:

• Subsidiary: PTC India Financial Services Limited (PFS), an infrastructure finance company (IFC), recorded total income of INR 518 Crores and loan book of INR 3,292 Crores during FY26. The profit before tax and profit after tax for FY26 stood at INR 390 Crores and INR 319 Crores respectively. Earnings per share for FY26 stood at INR 4.97 per share.

• Associate company of PTC India Limited: PTC is one of the sponsors of Hindustan Power Exchange (HPX) which has been set up with the best-in-class technology and seeks to offer a credible alternative in the power exchange segment of the Indian Power Market. Since its launch in July 2022, it had already added 709 active members and introduced trading in all segments.

6. Outlook:

Looking ahead, your Company aims to consolidate its core trading business while incorporating innovative business models, particularly in the new and renewable energy sectors. Company is committed to expanding the value- added services as an integrated energy solutions provider. The Companys focus areas will include energy portfolio management services, trading and advisory services related to the regulatory support in the electricity trading environment, renewable energy solutions, and operations and maintenance (O&M) services for SEZs, industrial zones, and distribution utilities. Additionally, the company is exploring trading opportunities into emerging areas such as Green Hydrogen and Battery Energy Storage Systems through collaborations. The company is also planning to expand its technology vertical to develop advanced solutions for the evolving energy market. Your Company sponsored third Power Exchange Hindustan Power Exchange, established with state-of-the art technology, provides a credible alternative in the power exchange sector. To cater to the changing dynamics of an evolving sector, customers expectations, and your Companys growth aspirations, the Company will continue to develop and enhance its offerings through technology-based solutions, advisory services, energy efficiency initiatives, and other related services.

7. Opportunities & Threats:

Opportunities:

• Expansion of renewable energy capacity: Indias energy sector is poised for significant growth, driven by the rapid expansion of renewable energy sources—including solar, wind, hydro, and distributed renewable energy systems. Given the intermittent and nonstorable nature of renewable power generation, efficient balancing and real-time optimization become essential, creating substantial opportunities for market-based electricity trading and other power market mechanisms.

• Increasing need for balancing and flexibility services: For PTC, this represents a natural evolution of our business. We see ourselves moving beyond conventional electricity trading to becoming an integrated energy market facilitator. By leveraging our expertise in market operations, portfolio optimisation, risk management, and digital analytics, we aim to provide comprehensive flexibility solutions that support generators, distribution utilities, renewable developers, and large consumers.

Our strategic focus is on enabling the next generation of electricity markets by facilitating the integration of battery storage, pumped storage, demand response, virtual power plants, and emerging flexibility products. These services will play a critical role in ensuring that Indias energy transition remains reliable, affordable, and sustainable.

• Battery Energy Storage System (BESS) integration: The rapid growth of renewable energy is fundamentally changing the electricity market. As solar and wind become a larger part of the generation mix, energy storage is emerging as the critical enabler of a reliable, flexible, and market-driven power system. For PTC, Battery Energy Storage Systems (BESS) represent not just a new technology, but a new business opportunity that complements our core expertise in electricity trading, market development, and risk management.

• Cross-border electricity trade opportunities in South Asia: Crossborder electricity trade (CBET) represents one of the most significant growth opportunities for the South Asian power sector. The region has all the ingredients for a successful integrated electricity market— abundant and complementary energy resources, rapidly growing electricity demand, expanding transmission infrastructure, and increasing policy support for regional energy cooperation. South Asia should be viewed not as a collection of individual electricity markets, but as one interconnected energy ecosystem. By leveraging the comparative advantages of each country, the region can improve energy security, reduce electricity costs, and accelerate the clean energy transition.

• Digital energy markets and market-based optimization: The electricity sector is entering a new era where digital intelligence is becoming as important as physical infrastructure. While the first phase of reforms focused on expanding generation capacity and transmission networks, the next phase will be driven by digital energy markets, real-time optimisation, and data-driven decision-making. For PTC, this transition presents a significant strategic opportunity. Our vision is to evolve from being primarily an electricity trader to becoming an integrated energy market solutions provider, leveraging digital technologies to deliver greater value to our customers. The future of the power sector will be defined not only by how electricity is generated and transmitted, but by how intelligently it is traded, optimised, and managed. Digital energy markets are creating new opportunities for innovation, efficiency, and customer value. At PTC, we are embracing this transformation to evolve from an electricity trader into a technology-enabled energy market solutions company. We believe digitalisation will be a key driver of sustainable growth and competitiveness in FY 2026-27 and beyond.

Threats:

The electricity trading market is a highly competitive and regulated by the Central Electricity Regulatory Commission (CERC). With more than 60 licensed electricity traders in India, the company faces competition, that may lead to pricing pressure (low trading margins), and increased customer acquisition costs. Regulatory changes in market design, trading regulations, and power exchange mechanisms as well can impact trading volumes and profitability. The growing preference of generators and distribution companies (DISCOMs) to transact directly through power exchanges or bilateral contracts may reduce the role of intermediaries. Additionally, other trading platforms pose ongoing operational and financial challenges to your company growth and market leadership.

8. Risks & Concerns

The Company operates in a dynamic regulatory and commercial environment and is exposed to various risks including Regulatory risk; Credit and counterparty risk; Market volatility risk; Operational risk; Liquidity risk; Technology and cybersecurity risks. The Company has established appropriate risk management frameworks, internal controls, and governance mechanisms to mitigate such risks.

9. Internal Control Systems & Their Adequacy

The Company has adequate internal control systems commensurate with the nature, size, and complexity of its operations. The internal control framework ensures reliability of financial reporting; Compliance with applicable laws and regulations; Safeguarding of assets; Operational efficiency; Risk mitigation and governance effectiveness- internal audits are conducted periodically, and audit observations are reviewed by the Audit Committee to ensure continuous strengthening of internal controls-

9. Human Resources & Industrial Relations

• Your Company follows the principle of People, Process and Technology for the better outcome from business processes. People encompass the human elements (employees) in its narrow definition but also applicable to other stakeholders. Your company lays extra emphasis on capable people who are trained & empowered for the successful implementation of new process or technology led growth.

• Given the transformative business environment and an evolving power sector, human resources play a critical role in enabling prompt and effective implementation of key strategic decisions. Your Company takes pride in "Inclusivity in Diversity" culture that fosters continuous learning and collaborative environment to meet the dynamic business environment.

• Your company focuses on process-oriented outcome and to achieve this, focuses on employee trainings on all type of platform including long durations courses from college/ universities of repute.

• Your Company also undertook various initiatives for the health and safety of its employees including organizing health checkup camps, NLP based trainings, ensuring availability of doctors in the office premise, engaging fitness trainers and health professionals towards holistic wellbeing- Your Company has 109 employees from diverse professional backgrounds having extra ordinary skill sets who continuously challenge themselves to achieve greater heights in organizational excellence-

10. Financial performance with respect to Operational Performance:

• Analysis of financial results such as revenue, profit, expenses, margins, cash flow, and balance sheet items: Your company has recorded a trading volume of 92.80 Billion Units during FY 2025-26 (a 12% growth over the previous financial year 2024-25). The profit after tax (PAT) for the company has been INR 397.04 Crores.

• The EPS for the company is INR 13.41. The total revenue for the FY2025-26 has been 16619.82 Crores as against 15644.52 Crores for the previous year.

• The net worth of the company for FY2025-26 was INR 4,729.84 Crore.

• On a consolidated basis PAT has been INR 717.44 Crores.

11. Environmental, Social and Governance (ESG) / Sustainability (increasingly important):

Your company has well-defined ESG vision and sets of achievements for the year spread across different Sustainable Development Goals. They are classified as under:

• Sustainable Environment: Reducing carbon footprint, mitigating climate change, and optimizing energy consumption. Reduction in energy intensity by retrofitting all the fixtures with LEDs and energy efficient cooling system - all the fixtures and cooling systems are star rated and best in class for available technology. - the transition is on the way with compensatory green purchases (equivalent to twice in lieu of scope 1 & 2 emission) of REC.

• Empowered Community: Welfare and empowerment of communities by reducing inequalities, promoting education, health, and gender equality. Sustained focus on diversity has led to participation of women up to 15% in the company.

• Rewarding Workplace: Creating a diverse and healthy workforce whereby the talent is recognized and rewarded.

• Secure Network: Ensuring network security by maintaining highest standards of data protection, IT security and customer privacy. In addition to the robust IT infrastructure, Data security awareness training program is conducted for positive data culture of the company.

• Robust Governance: Maintaining transparency and business integrity while driving ESG ambitions.

KEY RATIOS (Standalone):

Ratios	Numerator	Denominator	As on 31.03.2026	As on 31.03.2025	Remarks
1 Current ratio	Current Assets	Current liabilities	2.02	2.22
2 Return on equity (Networth)	Profit after tax	Average shareholders equity	8.36%	19.18%	Due to profit from disinvestment of PEL during the last year
3 Debt Equity Ratio	Total Debt (including lease liabilities)	Shareholders equity		0.02	Decreased, as working capital requirements were mainly funded from own funds.
4 Debt Service coverage ratio	Earnings available for debt service	Debt service (including lease liabilities) to be served in a year	NA	9.33	There is no debt outstanding at the year end
5 Net profit ratio	Profit after tax	Sales of electricity (including sale of electricity of agency nature)	0.0108	0.0248	Due to profit from disinvestment of PEL during the last year
6 Return on capital employed	Earning before Interest and Tax	Capital Employed	13.27%	28.59%	Due to profit from disinvestment of PEL during the last year
7 Return on investment- equity quoted	Net Return of Investment	Cost of investment			No dividend was received from PFS.
8 Trade receivables turnover	Sales of electricity (including sales of electricity of agency nature and other operating income)	Average trade receivable	8.02	6.54	Increased, mainly due to improved realization from customers.
9 Trade payable turnover	Purchase of electricity (including purchase of electricity of agency nature and expenses excluding non-cash expenses)	Average trade payable	11.24	10.54	Increased, improved liquidity also resulted in quicker payments.
10 Return on investment- equity unquoted	Net Return of Investment	Cost of investment		6.63%	Due to profit from disinvestment of PEL during the last year