Quadrant Future Tek Ltd Management Discussions

<dhhead-MANAGEMENT DISCUSSION AND ANALYSIS</dhhead-

Quadrant Future Tek Limited remains strategically positioned across two high-potential business verticals — Specialty Cables and Train Control & Signalling Systems — aligned with long-term opportunities in railway modernization, infrastructure development, defence indigenization, clean energy and digital connectivity.

1. GLOBAL ECONOMIC REVIEW

The global economy continued to navigate an environment of cautious resilience during the year under review, with growth supported by infrastructure spending, strategic manufacturing, defence preparedness and transport modernization. At the same time, the outlook remained uneven across regions, shaped by geopolitical tensions, trade fragmentation, elevated public debt and uncertainty in monetary and fiscal conditions. In this backdrop, capital allocation across industries continued to shift toward sectors that are considered critical to national security, connectivity and long-term industrial resilience.

For Quadrant Future Tek Limited, this environment remains relevant because the Company operates in specialized business areas that are closely linked to rail safety, defence applications and high-performance cable requirements. The global emphasis on indigenous capability, safer transport systems and resilient supply chains reinforces the long-term importance of specialized engineering businesses that can support mission-critical infrastructure with technically reliable and compliance-led solutions.

Rising Global Defence Outlays

Geopolitical tensions and national security considerations continued to keep defence expenditure elevated in many parts of the world. Governments remained focused on self-reliance, indigenisation and modernization of defence capabilities, particularly in areas such as defence electronics, secure communication systems, naval systems and other mission-critical applications. This sustained demand for advanced components, specialised cables and safety-linked systems that are essential in defence and marine environments.

For Quadrant Future Tek Limited, this trend is particularly relevant to its specialty cable business, which serves

defence and naval applications where fire safety, durability and performance under harsh operating conditions are critical. The global shift toward domestic manufacturing and technical compliance strengthens the long-term opportunity for companies that possess in-house engineering capabilities and are able to meet stringent quality and certification requirements.

Global Modernization of Mass Transit and Rail Infrastructure

The rail and transit sector continued to witness significant modernization initiatives across various geographies, with a strong emphasis on passenger safety, automation, operational reliability and energy efficiency. Rail operators increasingly invested in train control systems, signalling upgrades, trackside instrumentation and safety-critical components that can improve both performance and resilience. This created sustained demand for specialised products capable of operating in demanding railway environments.

This trend aligns closely with Quadrant Future Tek Limiteds business profile, particularly its development of Train Control and Signalling Systems, including KAVACH/ TCAS solutions, and its manufacturing of specialty cables for railway rolling stock. The Companys products are designed for applications where fire survivability, weight reduction, durability and compliance with railway safety standards are essential. As rail networks continue to modernize and adopt advanced safety technologies, such products are expected to remain strategically important.

Commodities

Copper remained one of the most important raw materials for the Companys specialty cable operations, and its price volatility continued to influence procurement costs, inventory planning and short-term margin performance. During the year, copper prices were affected by supply- side constraints, mining disruptions, global industrial demand and longer-term transition-related consumption patterns. Since copper is a core input for the Companys cable products, fluctuations in its price have a direct impact on cost structure and working capital requirements.

The Company generally manages raw material volatility

through disciplined procurement, commercial pricing arrangements and inventory control. In many of its institutional and government-linked contracts, price variation mechanisms help partially offset movements in input costs. However, pass-through is not always immediate or complete, and therefore commodity fluctuations continue to remain a key operational risk that requires close monitoring.

Accordingly, the Company continued to focus on prudent sourcing, efficient production planning and cost discipline in order to maintain operational stability. In a business environment where commodity cycles remain uncertain, the ability to manage raw material exposure effectively remains an important support to execution and profitability.

Overall Outlook

Overall, the global economic environment during the year remained cautious but supportive for sectors linked to rail safety, defence modernisation, infrastructure renewal and specialised engineering. For Quadrant Future Tek Limited, these structural trends remain favourable because they align closely with the Companys core competencies in

specialty cables and train control systems. The Company believes that its focus on technical capability, product quality, compliance and in-house development positions it well to participate in these long-term opportunities.

2. INDIAN ECONOMIC REVIEW

The Indian economy continued to demonstrate resilience during the year under review and remained among the fastest-growing major economies globally, supported by strong domestic demand, sustained public capital expenditure, a resilient services sector and continued emphasis on infrastructure creation. Recent multilateral assessments indicated that Indias growth momentum remained comparatively strong even amid a challenging global environment, reflecting the underlying strength of consumption, investment activity and policy support.

Indias growth trajectory continued to benefit from government-led infrastructure development, improving manufacturing capabilities, formalisation of the economy and sustained focus on logistics, digitalisation and ease of doing business. Public investment remained an important driver of economic activity, particularly in sectors such as transportation, railways, defence production, power infrastructure and urban development.

• Record-High Railway Capital Outlays & Safety-Led Transit Modernisation

The bedrock of the domestic infrastructure expansion is the historic allocation toward the Ministry of Railways. In the Union Budget 2026-27, Indian Railways capital expenditure was scaled to a record-breaking ^2,93,030 crores, marking a robust 10.5% increase over the previous fiscal year.

Crucially, this capital commitment reflects a structural policy shift from conventional network expansion toward safety-led and technology-enabled railway modernisation. The growing emphasis on KAVACH, electronic interlocking, signalling systems and associated rail infrastructure is particularly relevant for companies operating in train control systems, trackside equipment and specialised railway cabling. This structural emphasis strengthens the long-term business environment for companies operating in railway safety and control technologies.

• Deepening Manufacturing Depth and Defence Indigenization

Indias policy environment continues to favour domestic manufacturing, import substitution and capability-building in strategic sectors under the broader Aatmanirbhar Bharat framework. In Union Budget 2026-27, the Government maintained a strong push toward strategic manufacturing and national capability creation, while the defence sector received an allocation of ^7.85 lakh crore, reinforcing the long-term focus on indigenisation, domestic sourcing and technology depth.

This policy direction is particularly relevant for businesses operating in specialised and high-compliance engineering segments. For Quadrant Future Tek Limited, the continued emphasis on defence indigenisation supports the opportunity landscape for its speciality cable business, especially in applications linked to naval defence, rail transportation and other mission-critical environments where performance reliability, safety and technical qualification remain central to product acceptance

The Companys relevance in this ecosystem is supported by its in-house Electron Beam Irradiation capability and its approval by DGQA for the supply of specialty cables for naval applications. As India deepens its focus on domestic defence manufacturing and high-performance engineering inputs, technically compliant and capability-led manufacturers such as Quadrant are positioned to participate in demand arising from specialised, safety-critical and import-substitution-driven applications.

Consumption, Investment and Business Environment

Indias domestic demand environment continued to remain resilient, supported more by public investment, infrastructure spending and policy continuity than by purely discretionary consumption. While inflation, interest rates and commodity volatility remained key variables to monitor, the broader operating environment stayed supportive for industrial and infrastructure-linked businesses.

For Quadrant Future Tek Limited, this translates into a favourable backdrop for project-led opportunities in railway safety, signalling systems and specialised cable applications. Businesses that are aligned with institutional procurement, long execution cycles and mission-critical infrastructure are likely to remain relatively better positioned than demand segments driven only by consumer spending.

Overall Outlook

Overall, the Indian economic environment remained favourable for sectors linked to infrastructure, railway safety, defence modernization and advanced manufacturing. For Quadrant Future Tek Limited, the continued government focus on capital expenditure, indigenization and transport safety remains well aligned with the Companys capabilities in specialty cables and train control systems.

The Companys technical strengths, including its in-house Electron Beam Irradiation capability, RDSO-approved railway cable offerings, DGQA-approved naval applications and ongoing train control system development, position it to participate in long-term opportunities emerging from Indias infrastructure and strategic manufacturing growth journey.

3. INDUSTRY STRUCTURE AND DEVELOPMENTS

Quadrant Future Tek Limited operates in two strategically important and technology-driven business segments, namely specialty cables and train control and signalling systems. Both these sectors are closely aligned with Indias infrastructure modernisation, railway safety enhancement, defence indigenisation and the rising need for specialised, high-reliability engineering solutions. Unlike generic industrial businesses, these sectors are shaped by long-term public investment, stringent

qualification requirements, safety standards, and project-led procurement cycles, all of which create a structurally differentiated operating environment

Railways: Capex-Led Modernization, Safety-Led Demand

The Indian railway sector continues to remain one of the strongest drivers of domestic infrastructure investment. In the Union Budget 2026-27, Indian Railways capital expenditure was budgeted at Rs. 2,93,030 crores, underlining the Governments continued emphasis on network strengthening, decongestion, signalling upgrades and safer train operations. This policy direction is important for the Company because the focus is no longer limited to physical expansion alone; it increasingly includes safety systems, electronic control architecture, route efficiency and technology-enabled monitoring.

For companies operating in railway signalling and safety systems, this shift creates a more durable and visible demand cycle. Large public investments in train protection, interlocking systems, embedded electronics and associated railway infrastructure are likely to support sustained opportunities over the medium to long term. For Quadrant, this environment strengthens the strategic relevance of its Train Control and Signalling Systems division and enhances the long-term visibility of railway- focused business opportunities.

Kavach: from policy concept to execution cycle

The Indian train control and signalling industry is moving through a meaningful transition as Indian Railways adopts more advanced, safety-critical and indigenous technologies. Kavach, the indigenous Automatic Train Protection system, has moved into the implementation phase, with Version 4.0 commissioned on 2,633 route kilometres as of 31 July 2026, covering key sections of the Delhi-Mumbai and Delhi-Howrah routes. Implementation work is also under way across approximately 21,794 additional route kilometres. These developments indicate that the opportunity is moving beyond the policy and development stage towards practical execution involving system deployment, integration, validation and ongoing maintenance support.

The train control and signalling industry is also characterised by high technical barriers, long product validation cycles and strict compliance expectations. Products in this space must meet safety-critical requirements, integrate hardware and software seamlessly, and perform reliably in real operating environments. As a result, market participation tends to favour players with embedded design capability, testing infrastructure, domain expertise and regulatory alignment rather than generic equipment

Specialty cables: performance-driven, not commodity-driven

The specialty cable industry serves applications where fire safety, low smoke emission, durability, temperature resistance, reduced weight and performance reliability are essential. Unlike commodity wire and cable markets, this segment is defined by technical specifications, material science, process quality and end-use certifications. According to third-party industry research, the India specialty wire and cable market is projected to grow at a 10.24% CAGR during FY2026-FY2033, rising from about USD 0.98 billion in FY2025 to about USD 2.14 billion by FY2033.

Demand drivers for this segment remain broad-based and structurally favourable. Railway rolling stock, defence platforms, marine systems, renewable energy installations and EV architecture all require high-performance cables that can operate under demanding conditions and meet strict safety standards. This environment supports manufacturers with differentiated process capabilities, especially those with in-house compounding, irradiation, testing and end-to-end manufacturing control.

Quadrants positioning in both segments

Quadrant Future Tek Limited is positioned at the intersection of two structural themes: railway safety modernisation and engineered specialty materials. On one side, the Company participates in the specialty cable market through products relevant to railway rolling stock, naval defence, solar and EV-linked applications; on the other, it is building presence in train control and signalling through KAVACH/TCAS and adjacent railway safety technologies. This combination gives the Company exposure to both physical infrastructure demand and safety-technology deployment, creating a differentiated position within the broader industrial ecosystem.

The Companys in-house electron beam irradiation centre, polymer compounding capabilities, embedded systems development and integrated infrastructure strengthen its role in applications where compliance, reliability and technical performance are critical. This is particularly important in sectors such as railways and defence, where product approval cycles are rigorous and supplier credibility is built over time.

Structural outlook

Overall, the industry structure in which the Company operates remains favourable over the medium to long term. Continued railway capital expenditure, higher safety allocations, ongoing Kavach deployment, defence indigenisation and expanding demand for high-performance cables collectively support a positive business environment for both of the Companys core divisions. At the same time, the industry demands sustained R&D, certification readiness, execution discipline and quality assurance, making technological capability and manufacturing depth key competitive differentiators.

4. BUSINESS OVERVIEW

Quadrant Future Tek Limited is a research-oriented, technology-driven engineering company operating in two high-potential and strategically relevant domains — Specialty Cables and Train Control & Signalling Systems. Through these businesses, the Company addresses safety-critical and performance-intensive applications across railways, defence, renewable energy and electric mobility. Both of these segments are aligned with Indias railway modernisation, transport safety, defence indigenisation and specialised manufacturing agenda.

The Companys business model is built around in-house product development, process integration, engineering-led manufacturing and participation in sectors where quality, reliability, qualification and compliance are central to customer requirements. This makes the Companys positioning distinct from conventional component suppliers and more closely aligned with long-cycle, technology-oriented infrastructure opportunities.

Who we are

Quadrant Future Tek Limited is engaged in the development of next-generation Train Control and Signalling Systems and the manufacture of specialty cable solutions for critical end-use sectors. The Company combines design, development, manufacturing and testing capabilities to serve railway rolling stock, railway safety systems, naval defence, solar and EV- related applications.

Its operating philosophy is anchored in innovation, safety, reliability and indigenous capability building. This positioning is particularly relevant in sectors where end users and procuring institutions place a premium on product performance, certification readiness and long-term operational dependability.

Two core growth engines

The Companys operations are strategically organised into two core business divisions that serve different but complementary opportunity areas. The Specialty Cable Division participates in high-specification product demand across mobility, defence and energy-linked applications, while the Train Control & Signalling Division addresses the growing need for railway safety automation and embedded control technologies.

This dual business structure gives the Company exposure to both physical infrastructure demand and technology-led railway modernisation. In effect, one business addresses the material side of safety and performance, while the other addresses the intelligence and control side of safe railway operations.

Specialty Cable Division

The Specialty Cable Division focuses on the manufacture of Electron Beam Irradiated Cables designed for applications where fire safety, low smoke emission, durability, reduced weight and thermal performance are critical. Its product portfolio includes cables for railway rolling stock, naval and defence applications, solar installations and electric vehicles, allowing the Company to serve multiple sectors through a common high-performance materials and process platform.

A key differentiator of this business is the Companys 2.5 MeV Electron Beam Irradiation Centre, supported by in-house polymer compounding and integrated cable manufacturing capabilities. These capabilities strengthen product performance, improve application reliability and support the Companys position in technically demanding sectors.

The division also benefits from favourable market dynamics. Recent industry estimates suggest that the India specialty wire and cable market is projected to grow at a 10.24% CAGR during FY2026-FY2033, increasing from around USD 0.98 billion in FY2025 to about USD 2.14 billion by FY2033, supported by rail transport, defence, renewable energy and EV adoption trends.

Train Control & Signalling Division

The Train Control & Signalling Division is the Companys technology-led business vertical focused on railway signalling, train protection and embedded safety systems. The division is engaged in the development and manufacture of advanced railway technologies aimed at improving operational safety, signalling efficiency and network reliability across Indian Railways.

Its flagship offering is the indigenously developed KAVACH/TCAS system, which is designed to meet SIL- 4 safety requirements and uses LTE-based communication under Indian Railways deployment framework. The system integrates trackside and onboard equipment and supports SPAD prevention, speed control, collision avoidance, automatic whistling at level crossings and SOS functionality.

The Train Control and Signalling segment maintained an order book of ^8,054 million as of 31 March 2026, reflecting sustained traction in the Companys KAVACH business. The continued build-up in executable orders underscores the growing relevance of safety-critical railway technologies within the Companys portfolio. As the segment moves through the next phase of deployment, it remains a key driver of long-term visibility and strategic positioning in railway safety solutions.

The Train Control and Signalling segment continues to benefit from the Companys in-house development capabilities, safety-critical certifications and integrated design-to-deployment model. With RDSO approval

for passenger trials of KAVACH 4.0 and a strong order book, the division is well positioned for the next phase of execution.

Integrated operating footprint

The Companys business is supported by an integrated operational base that combines manufacturing, product development and testing infrastructure. Its facility at Basma, Tehsil Banur, District Mohali, Punjab supports specialty cable manufacturing, hardware production for signalling systems, research activities and in-house testing, while dedicated design centres in Bengaluru and Hyderabad support embedded system engineering and railway technology development.

The Basma facility houses polymer compounding, copper processing, high-speed extrusion, electron beam irradiation and comprehensive in-house testing laboratories. The Company states that the facility is approved by RDSO, DGQA and the Indian Register of Shipping, which supports its positioning in railway and defence-linked applications where qualification and compliance remain critical.

Why our business model matters

Quadrants business model is built around segments that require rigorous technical qualification, high safety standards and strong execution capabilities. Its specialty cable and railway signalling businesses, supported by integrated manufacturing and engineering infrastructure, position the Company to participate in long-duration opportunities linked to Indias infrastructure and indigenisation agenda.

5. STRATEGIC STRENGTHS

The Companys strategic strengths are anchored in an integrated operating model, specialized technical capabilities and exposure to safety-critical, specification-led end markets. Its presence across specialty cables and railway safety systems, supported by in-house manufacturing depth, advanced processing capabilities and experienced leadership, positions the Company to participate in infrastructure-led opportunities while building long-term institutional credibility.

l Integrated presence across specialty cables and railway safety systems:

/ The Company operates through two focused and technology-intensive business verticals, namely Specialty Cables and Train Control & Signalling Systems. This integrated presence enables the Company to participate in critical applications across railway rolling stock, railway safety, naval defence, solar and electric mobility, while building domain depth in safety-oriented and performance-sensitive segments.

. Strong in-house manufacturing and development infrastructure:

J The Company has established integrated in-house capabilities for manufacturing, testing, research and product development at its facility situated at Basma, Tehsil Banur, District Mohali. Its infrastructure covers the full value chain across specialty cable production as well as the hardware and development requirements of its Train Control & Signalling division, enabling better process control, faster product development and improved execution reliability.

i Distinct technological edge through Electron Beam Irradiation capability:

A key strength of the Company lies in its 2.5 MeV Electron Beam Irradiation Centre, supported by in-house polymer compounding and integrated cable processing capabilities. This technology enables the Company to manufacture specialty cables with enhanced mechanical, thermal and fire-resistant properties, making them suitable for demanding applications such as railway rolling stock, naval defence, solar and EV usage.

Focused capability in safety-critical railway technologies:

Through its Train Control & Signalling division, the Company has developed indigenous capability in KAVACH/TCAS, a safety-critical railway application designed to improve operational safety and reduce collision risks. The Companys system is aligned with Safety Integrity Level-4 (SIL-4) requirements under CENELEC standards, positioning it in a specialised segment where reliability, compliance and engineering precision are critical entry barriers.

Ability to serve high-specification end-use sectors:

The Companys product portfolio is aligned with sectors that demand stringent technical performance, approvals and long operating life. Its specialty cable offerings cover railway rolling stock cables, DGQA-approved naval defence cables, solar cables meeting relevant technical standards, and EV cables for emerging mobility applications, thereby giving the Company access to multiple high-specification and structurally growing end-use segments.

Growing institutional credibility and project visibility:

The Companys institutional positioning in the railway safety segment is supported by RDSO approval to commence passenger trials for its KAVACH Version 4.0 system, with a dedicated rail route and train allocated for the final phase of field trials. As of FY26, the Company reported an active Train Control and Signalling order book of Rs. 8,054 million, providing visibility for future execution and supporting its participation in the ongoing deployment of KAVACH-related systems across Indian Railways.

i Experienced leadership and sector understanding:

The Company is guided by an experienced leadership team with domain understanding across railways, defence, manufacturing, finance and operations. This strengthens the Companys ability to manage product development cycles, institutional customer requirements, operational execution and future capacity creation in technically demanding sectors.

6. BUSINESS STRATEGIES

The Companys business strategies are focused on deepening its presence in railway safety and signalling, expanding specialty cable applications across priority sectors and strengthening execution through its integrated infrastructure. Its growth approach is aligned with indigenisation, product qualification, technology-led development and a gradual broadening of its customer base and business mix, supported by continued investment in research and development.

Strengthening the railway safety and signalling business:

The Company intends to build upon its KAVACH/TCAS capability by deepening its presence in the train protection and signalling space. In addition to KAVACH, the Company is expanding its portfolio towards adjacent railway safety products such as Electronic Interlocking (EI) Systems and Multi Section Digital Axle Counter (MSDAC), which are aligned with the broader modernisation and safety priorities of Indian Railways.

Expanding specialty cable applications across focused sectors:

The Company will continue to strengthen its specialty cable business by focusing on application segments where fire safety, durability, weight reduction and technical reliability are critical. Its strategy is to further scale its presence in railway rolling stock, naval defence, solar and EV cable segments by leveraging its Electron Beam Irradiation capability, in-house polymer formulation strengths and integrated manufacturing process.

Leveraging in-house infrastructure for product quality and execution:

The Companys strategy remains centered on maximising the benefits of its integrated manufacturing and development infrastructure at Basma, Mohali. By retaining key processes in-house, including cable manufacturing stages, irradiation, testing and development support for signalling hardware, the Company seeks to maintain quality consistency, shorten development cycles and improve responsiveness to customer-specific technical requirements.

Aligning growth with indigenisation and Make in India priorities:

The Company remains aligned with the national focus on indigenisation, domestic manufacturing and self-reliance in railway and defence-related technologies. Its strategy is to build globally relevant, high-quality products within India, especially in areas such as specialty cables and safety-critical train systems, where local capability creation can support both import substitution and long-term institutional business opportunities.

Broadening customer base and improving business mix:

While continuing to serve existing customer relationships, the Company is also working towards expanding its presence with non-promoter and institutional customers across railways, defence and related sectors. Greater participation in tenders, wider product acceptance and increased engagement in specialised applications are expected to support a broader customer mix and improve business diversification over time.

Investing in technology-led growth areas:

The Company is positioning itself in selected emerging sectors where technical cable performance and safety systems are expected to see sustained demand. These include solar, electric vehicles and next-generation railway safety solutions, where the Company believes its manufacturing base, product engineering capability and R&D orientation can support long-term growth.

Maintaining focus on research, development and product qualification:

The Company will continue to invest in product development, application engineering and testing capabilities in order to meet evolving customer needs and industry specifications. Given the nature of its operating sectors, especially railway safety and defence-related applications, sustained focus on R&D and qualification remains central to its strategy for building credibility, expanding product acceptance and maintaining technical relevance.

7. OPPORTUNITIES AND OUTLOOK

Quadrant Future Tek Limited is strategically positioned to benefit from Indias long-term infrastructure modernization and defence indigenisation initiatives. The Companys addressable markets across railway safety, defense, renewable energy, and electric mobility continue to witness structural demand shifts, creating long-term opportunities for specialised engineering solutions.

Indian Railways Modernization & KAVACH Deployment:

The Government of Indias aggressive infrastructure push-highlighted by a Rs. 1.2 lakh crore allocation to enhance railway safety and Rs. 7,500 crores specifically for Signalling & Telecommunication in FY2026-27-presents an unparalleled growth corridor. Indian Railways continued focus on railway safety, signalling upgrades and indigenous technology deployment provides a strong growth opportunity for the Company. The receipt of RDSO approval for final passenger field trials of Kavach 4.0 (Automatic Train Protection), System along with the Companys active order book of Rs. 8,054 Millions in the Train Control and Signalling division and its MoU with RailTel, supports the Companys preparedness for future deployment opportunities. These developments support the Companys ability to participate in the wider rollout of KAVACH systems across the railway network.

Indigenization in Defense and Marine Infrastructure:

Driven by the Make in India initiative and rising naval capital expenditure, the demand for defence-grade specialty cables is expected to remain strong. The Companys DGQA- approved naval and marine cables, designed for high- temperature and shock-resistant environments, position it well to participate in defence and marine opportunities arising from the growing emphasis on import substitution for critical naval shipyards and submarine applications.

Emerging Green Mobility and Renewable Energy (Specialty Cables):

The transition toward cleaner fuels and electric mobility is expected to support demand for high-performance cabling solutions. The Companys Specialty Cables division, supported by an active order book of Rs. 558 million and a manufacturing capacity of 1,900 MT per annum, has expanded its product portfolio. With BIS approval for solar cables and ongoing scale-up of electron-beam irradiated EV cables, the Company is positioned to serve applications in EV charging infrastructure and utility-scale solar installations.

Technological Leadership and High-Barrier Execution:

The Companys competitive advantage is supported by its R&D focus, backward integration and specialised manufacturing capabilities. The 2.5 MeV AERB-licensed electron-beam accelerator and CENELEC SIL-4 compliance strengthen the Companys ability to manufacture and qualify safety-critical products. In addition, The Companys planned expansion into Electronic Interlocking systems is expected to complement its railway safety platform and broaden its presence in adjacent signalling solutions.

8. THREATS AND RISK MANAGEMENT

As a technology-driven manufacturing enterprise operating across mission-critical infrastructure segments, including primarily Specialty Cables and Train Control / Signalling Systems (Kavach)-the Company is exposed to a range of internal and external risks that may effect its operational performance and long-term strategic execution. The Company maintains a structured risk management framework to identify, assess, monitor and mitigate material risks arising from business operations, sector dynamics, regulatory developments and market conditions

The Company has updated its comprehensive risk management matrix for the current fiscal period in light of evolving business priorities, customer requirements, macroeconomic conditions and industry developments:

Regulatory Approvals and Certification Risk (Train Control Segment)

Risk Exposure: The commercial scale-up of the Companys Train Control & Signalling business, particularly in the KAVACH / TCAS segment, is dependent on regulatory approvals, testing milestones and certification processes prescribed by the relevant railway authorities. While the Company have achieved a critical milestone by obtaining RDSO approval to commence passenger field trials for Kavach Version 4.0 (with a dedicated rail route and train allocated, any delay in trial completion, approval timelines or commercial certification could impact deployment schedules and revenue realisation in this segment. Given the safety-critical nature of such systems, regulatory compliance and performance validation remain central to the growth trajectory of the business.

Mitigation: The Company continues to focus on in-house design, development, testing and validation capabilities aligned with applicable technical and safety requirements. The Companys engineering and development infrastructure, including its specialised design and simulation capabilities for railway signalling systems, is intended to support product readiness, system integration and timely response to qualification requirements

High Customer and Sector Concentration Risk

Risk Exposure: The Companys revenue engine remains heavily weighted toward the public sector, with public sector undertakings (PSUs) and government utilities — chiefly Indian Railways and Naval Defense-comprising 70% of our customer mix as of FY26. Consequently, our growth pipeline is directly tied to national infrastructure capital allocation, such as the governments Rs. 1.2 lakh crore safety outlay and Rs. 7,500 crore signaling/telecom allocations for FY 2026-27. Any changes in budgetary priorities could alter our procurement cycles.

Mitigation: The Company is addressing this risk by broadening its product portfolio and seeking to expand its participation across adjacent growth segments. In addition to its railway and defence-linked offerings, the Company has been developing its presence in solar and EV cable applications, thereby working towards a more diversified

business mix over time. We have achieved Bureau of Indian Standards (BIS) approval for our Solar cables and are systematically expanding into high-growth commercial verticals, including Electric Vehicles (EV) and specialized submarine cabling networks.

Dependence on a Single Manufacturing Facility-

Risk Exposure: The Companys manufacturing operations are currently concentrated at its Basma, Mohali facility, which houses key production, irradiation, testing and related infrastructure. Dependence on a single manufacturing location exposes the Company to operational disruption risk arising from equipment failure, utility interruptions, fire, accidents, natural events or other unforeseen incidents, which could adversely affect production schedules and customer servicing

Mitigation: The Company has implemented preventive maintenance practices, safety protocols, process controls and contingency response mechanisms at the facility level. The integrated nature of the manufacturing setup also supports better operational monitoring, while future capacity planning remains an area of strategic consideration for reducing concentration risk over the longer term.

Working Capital and Liquidity Risk

Risk Exposure: The Company operates in project-led and working-capital-intensive segments which require dense working capital funding for pre-built inventory and long production cycles. This is highlighted by our inventory growing to Rs. 1,054 million in March 2026 from Rs. 445 million in March 2025 in financial statements.

Mitigation: The Company seeks to mitigate this risk through prudent treasury management, monitoring of receivable cycles, inventory planning and maintenance of adequate liquidity buffers.

Quality Compliance and Customer Audits:

Risk Exposure: Our companys products serve safety- critical applications, making it essential to meet rigorous quality standards and clear frequent audits from customers. Any failure in compliance could lead to order loss, financial penalties, or reputational harm.

Mitigation: Our company maintains internationally

certified quality systems (such as ISO and IRIS) and employs end-to-end quality control processes, including our in-house Future Tek Laboratory accredited by NABL and digital traceability systems. Regular training and internal audits further reinforce quality assurance.

Technology Obsolescence and R&D Investment Risk:

Risk Exposure: The Company operates in sectors where technology standards, signalling protocols, embedded systems and product-performance expectations continue to evolve. Sustained investment in research and development, though essential, pose financial risks if they fail to result in commercially viable solutions or widespread customer adoption. This risk is especially relevant in the Train Control & Signalling segment, where commercial deployment is linked to complex qualification and adoption cycles

Mitigation: We have implemented an agile and market- aligned R&D strategy that focuses on developing scalable, future-ready solutions. ts development efforts are aligned with identified end-use sectors such as railway safety, specialty cables, solar and EV applications, and are supported by specialised design centres, testing infrastructure and a phased approach to technology development.

Confidentiality and IP Protection:

Risk Exposure: Our Company possesses valuable knowhow, including proprietary designs for systems like KAVACH, that are important to its competitive position. the absence of formal patents increases exposure to IP leakage or imitation by competitors which may weaken the Companys differentiation and create competitive risks.

Mitigation: To mitigate this, we use strict confidentiality agreements, restricted access to sensitive data, data protection mechanisms and process-level restrictions around sensitive product and design information. In addition, the Company continues to evaluate appropriate mechanisms for protecting and formalising its intellectual property wherever relevant, while trade secret protection is enforced through internal compliance protocols and legal oversight.

KEY EXTERNAL RISK FACTORS:

Raw Material and Commodity Price Risk (High-Impact Area)

Risk Exposure: The primary input cost for our Specialty Cables division is high-purity copper. As reflected in our financial disclosures, the cost of materials consumed spiked significantly by 77% year-on-year, escalating to Rs. 1,894 million in FY26 compared to Rs. 1,072 million in FY25. This sharp rise in commodity costs heavily compressed our gross margins and contributed directly to our operating EBITDA contraction.

Mitigation: The Company actively uses backward

integration—including in-house polymer compounding and copper processing — to build margin resilience against global London Metal Exchange (LME) price swings. Furthermore, we incorporate structural price-escalation and indexation clauses into long-term contracts with institutional buyers, alongside proactive multi-month inventory hedging pipelines.

Regulatory and Policy Changes:

Risk Exposure: The Company operates in sectors influenced by government policy, public procurement frameworks, tax laws, labour regulations, product standards and sector- specific compliance requirements. Any material change in regulatory expectations, tender conditions, safety norms, environmental standards or compliance costs could affect the Companys business operations and profitability

Mitigation: The Company addresses this risk through ongoing monitoring of regulatory developments, internal compliance systems and periodic review of legal and operational requirements relevant to its business segments.

Economic and Macroeconomic Uncertainties:

Risk Exposure: The Companys business may be affected by broader macroeconomic conditions, including inflationary pressures, interest-rate movements, geopolitical developments, supply chain disruptions and fluctuations in industrial activity. Such factors may influence project execution pace, procurement cycles and overall business sentiment in the markets served by the Company.

Mitigation: To manage this exposure, the Company maintains a cautious operating approach with emphasis on liquidity, cost discipline, customer engagement and execution planning.

Competition Intensity:

Risk Exposure: The Company faces competition

from domestic as well as international players across specialty cables and railway signalling-related segments. Competitive pressures may arise in the form of pricing, qualification readiness, execution capability, technological depth or customer relationships, which could affect market share and margin profile over time

Mitigation: The Company seeks to address this risk by focusing on differentiated products, in-house capabilities, quality assurance, technical compliance and participation in specialised market segments where entry barriers are relatively higher

RISK GOVERNANCE

The Companys risk management process is integrated with its operational, financial and compliance oversight mechanisms. Risks are reviewed periodically, and mitigation measures are aligned with business priorities, customer requirements and the evolving external environment. Through continued focus on product quality, financial prudence, technical capability and compliance discipline, the Company seeks to manage risks proactively while pursuing long-term growth opportunities in specialised infrastructure and safety-critical sectors.

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established a robust internal control framework that is commensurate with the nature, size and complexity of its business operations. The internal control systems are designed to ensure the orderly and efficient conduct of business, safeguard the Companys assets, prevent and detect frauds and errors, ensure compliance with applicable laws, regulations and internal policies, maintain the accuracy and completeness of accounting records, and facilitate the timely preparation of reliable financial and operational information. These controls are supported by continuous management oversight and periodic reviews to ensure operational efficiency, effective risk management and adherence to internal policies and regulatory requirements.

Pursuant to the provisions of Section 138 of the Companies Act, 2013, read with the applicable rules thereunder, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has an

independent Internal Audit function. The scope, authority and responsibilities of the Internal Auditor are approved and periodically reviewed by the Audit Committee to ensure that the internal audit program remains aligned with the Companys evolving business requirements and risk profile.

The Internal Auditor adopts a risk-based audit approach and conducts periodic audits across manufacturing operations, finance, procurement, inventory, human resources, statutory compliances, information technology and other critical business functions. The objective is to evaluate the adequacy and effectiveness of internal financial controls, operational controls, governance processes and compliance mechanisms, and to recommend improvements wherever necessary.

During FY 2025-26, internal audit reviews primarily focused on inventory management, stock controls, procurement processes, human resource management, operational efficiency and compliance with established policies and procedures. The observations and recommendations arising from these audits were presented to the Audit Committee, together with managements responses and time-bound corrective action plans.

The Audit Committee actively monitors the implementation of audit recommendations through periodic review of Action Taken Reports (ATRs) submitted by the management. Robust follow-up mechanisms have been established to ensure timely closure of audit observations and continuous strengthening of the internal control environment. The Audit Committee also reviews the adequacy and effectiveness of the internal financial control system and provides strategic guidance for further enhancement of governance and control processes.

Based on the reviews undertaken during the year and the reports of the Internal Auditor, the Board is of the opinion that the Company has an adequate and effective system of internal controls and internal financial controls, which is operating effectively and is commensurate with the size, scale and complexity of its operations.

10. FINANCIAL PERFORMANCE OVERVIEW

The financial year 2025-26 was characterized by a stable topline performance amidst a challenging macroeconomic environment, prominently marked by unprecedented volatility in raw material prices. Despite these input cost headwinds, the Company maintained its revenue trajectory, supported by sustained demand in our core segments and a disciplined approach to capital allocation.

During the year ended March 31, 2026, the Company recorded revenue from operations of Rs. 1,529.67 million, registering a marginal growth of 2% over Rs. 1,506.12 million in the previous financial year. The increase in revenue reflects continued execution of customer orders despite a challenging business environment, supported primarily by the Cable Division, while the Train Control Systems Division remained in the investment and execution phase. Other income increased significantly to Rs. 53.77 million from Rs. 23.30 million, resulting in total income of Rs. 1,583.44 million, an increase of 3.5% over the previous year.

The Companys cost structure witnessed significant changes during the year. Cost of raw materials consumed increased to Rs. 1,893.74 million from Rs. 1,071.91 million, primarily due to higher procurement of raw materials for execution of the existing order book and inventory build-up. This increase was partially offset by a favorable movement in inventories. Employee benefit expenses increased by 16% to Rs. 285.20 million, reflecting investments in strengthening the Companys technical, engineering and operational capabilities. Finance costs reduced substantially by 60.5% to Rs. 30.29 million from Rs. 76.75 million, primarily due to lower utilisation of borrowings and improved treasury management. Depreciation and amortisation expenses declined to Rs. 187.26 million from Rs. 211.54 million in line with the asset profile, while other expenses increased to Rs. 431.88 million from Rs. 271.01 million, mainly attributable to higher business activity and operational expenditure.

Consequently, the Company reported a negative EBITDA of Rs. 339.78 million during FY 2025-26 as compared to a positive EBITDA of Rs. 26.23 million in the previous financial year. The Company reported a loss before tax of Rs. 557.33 million compared to a loss of Rs. 262.06 million in the previous financial year.

This temporary contraction in margins is primarily attributable to the strategic incubation of the Train Control Division. Currently in its critical preparatory phase, this segment is incurring essential revenue expenditures — primarily driven by initial scale-up costs and system integrations — prior to the commencement of commercial earnings. Conversely, the foundational Specialty Cable segment continues to deliver resilient, positive performance in line with historical trends. Management remains highly confident that the overall profitability metrics will witness a structural turnaround once the Train Control Division successfully transitions into its commercial execution phase in the upcoming fiscal periods.

As at March 31, 2026, the Companys total assets stood at Rs. 3,207.00 million, compared with Rs. 4,017.80 million as at March 31, 2025. The reduction was primarily attributable to the deployment of funds held in bank balances towards operational and working capital requirements.

Non-current assets increased marginally to Rs. 844.99 million from Rs. 822.14 million. During the year, the Company continued to invest in technology and product development, resulting in Intangible Assets under Development of Rs. 15.97 million, while deferred tax assets increased to Rs. 187.36 million owing to recognition of tax benefits arising from carried-forward losses and temporary differences.

Current assets stood at Rs. 2,362.01 million as against Rs. 3,195.66 million in the previous year. Inventories increased significantly to Rs. 1,053.61 million from Rs. 444.57 million, reflecting strategic stocking of raw materials and work-inprogress to support timely execution of customer orders. Trade receivables increased to Rs. 670.20 million, consistent with the timing of project execution and customer billing. Bank balances, excluding cash and cash equivalents, reduced to Rs. 322.72 million from Rs. 1,770.04 million, reflecting utilisation of available funds for business operations and project execution.

The Companys net worth remained strong at Rs. 2,579.29 million, notwithstanding the loss incurred during the year. Share capital remained unchanged at Rs. 400.00 million, while other equity stood at Rs. 2,179.29 million.

Total liabilities reduced to Rs. 627.71 million from Rs. 1,038.72 million, demonstrating continued focus on maintaining a prudent capital structure. Non-current borrowings reduced to Rs. 194.40 million, while current borrowings declined sharply from Rs. 630.81 million to Rs. 45.84 million, reflecting repayment of short-term debt and reduced dependence on external borrowings. Trade payables increased during the year in line with higher procurement activity and the timing of supplier payments.

Overall, the Companys financial position continues to be supported by a strong equity base and a significantly lower debt profile. While profitability during the year was impacted by project execution timelines and the cost structure associated with business expansion, the investments made in inventory, technology and operational capabilities position the Company favourably to execute its existing order book and capitalise on future growth opportunities.

Particulars	FY 2025-26	FY 2024-25
	(INR in Millions)	(INR in Millions)
Total Income	1583.44	1529.42
Revenue from Operations	1529.67	1506.12
EBITDA	(339.78)	26.23
EBITDA Margin (%)	(22.2%)	1.7%
PAT	(429.42)	(196.75)
Net Worth	2579.29	2979.08
Total Debt	240.24	854.16
Debt to Equity	0.09	0.29

11. SEGMENT-WISE PERFORMANCE

The Company operates through two reportable business segments, namely Speciality Cable Division and Train Control Systems (TCS) Division.

The Speciality Cable Division remained the principal contributor to the Companys revenue during the year, generating revenue of Rs. 1,529.64 million, representing virtually the entire consolidated revenue from operations. The Division reported an EBITDA of Rs. 123.69 million, demonstrating healthy operating profitability despite continued volatility in commodity prices and competitive market conditions.

After accounting for finance costs of Rs. 21.41 million and depreciation and amortisation of Rs. 57.34 million, the Division reported a profit before tax of Rs. 44.94 million. The positive performance reflects the Divisions strong execution capabilities, efficient manufacturing operations, prudent cost management and sustained customer demand across its key product segments.

The Division had non-current assets of Rs. 210.80 million and non-current liabilities of Rs. 194.40 million as at March 31, 2026, supporting its ongoing manufacturing and operational requirements.

The TCS Division is engaged in the development and implementation of advanced railway signalling and train protection systems.

The Division reported a segment loss of Rs. 463.47 million, primarily due to continued investment in research and development, engineering resources, product validation, technology enhancement and project execution

capabilities. After charging finance costs of Rs. 8.88 million and depreciation and amortisation of Rs. 129.91 million, the Division reported a loss before tax of Rs. 602.27 million.

The Divisions non-current assets stood at Rs. 411.25 million, representing investments in technology platforms, product development, intellectual property and specialised infrastructure. These investments are expected to support future commercialisation and execution of railway signalling and train protection projects.

While the Speciality Cable Division continued to generate stable revenues and operating profits, the overall financial performance of the Company was significantly impacted by the ongoing investments in the TCS Division. The Company continues to invest in technology development, product validation and capability enhancement in the TCS Division with a long-term strategic objective of participating in the rapidly growing railway safety and signalling market. Management remains confident that these investments will support sustainable revenue growth and improved profitability upon commencement of large- scale commercial execution of TCS projects.

12. KEY FINANCIAL RATIOS

The key financial ratios reflect the Companys liquidity position, capital structure, operational efficiency and profitability. During the year, the current ratio improved on account of higher current assets, while the debt-equity ratio moderated due to repayment of borrowings. However, profitability-linked ratios such as operating margin, net profit margin and return on equity were adversely impacted by higher operating costs, increased employee expenses, depreciation and the continued investment in the Train Control Systems Division.

Particulars	FY 25-26	FY 24-25	Change(%)	Reason for Change
Current Ratio	5.96	4.13	44.33%	Decrease in Current Liabilities due to reduced working capital facility usage.
Operating Margin Ratio	-37.97	-13.85	174.15%	Sharp increase in operating costs, particularly raw material consumption, employee costs, and other expenses, while revenues remained stagnant. Higher depreciation expense arising from capitalization of new assets. Together, these factors outweighed the stable revenue base, leading to a negative operating margin.
Interest Coverage Ratio	-17.40	-2.41	621%	The Interest Coverage Ratio deteriorated from (2.41) in FY 2024-25 to (17.40) in FY 2025-26, primarily due to significant operating losses during FY 2025-26, resulting in inadequate earnings to cover the finance costs incurred during the year.
Debt-Equity Ratio	0.09	0.29	-67.52%	Decrease in level of Debt as no new loan has been taken during the year.
Debt Service Coverage Ratio	-5.99	0.07	-8924.25%	Decrease in EBITDA
Return on Equity	-15.45	-11.43	35.24%	Increase in Net Loss
Inventory Turnover Ratio	1.67	3.16	-47.05%	Increase in Average Inventory
Trade Receivables Turnover Ratio	2.50	3.46	-27.52%	Increase in Average Trade receivables with same level of sales
Trade Payables Turnover Ratio	8.87	14.28	37.85%	Increase in Average Trade Payables
Net Capital Turnover Ratio	0.70	1.20	-41.69%	Increase in Average Working Capital due to decrease in current liabilities during the year with same level of sales
Net Profit Ratio	-28.07	-13.06%	-114.89%	Increase in Net loss
Return on Capital Employed	-0.19	-0.06	-227.67%	Decrease to EBIT

13. HUMAN RESOURCES

There have been no materially significant changes in the Human Resources (HR) domain during the reporting period. As a people-centric organization, we strongly believe in nurturing a culture that enables the growth, wellbeing, welfare and career progression of our employees. We have a company-wide ethos of caring and sharing with our people and continue to invest in their learning and development on a regular basis.

During the year under review, the Company continued to focus on strengthening its human capital base in line with its growth in speciality cables and train control systems businesses. The Company placed emphasis on attracting, developing and retaining skilled professionals across engineering, manufacturing, systems design, quality assurance and support functions, with a view to building a performance-oriented and technology-driven organization. We also remain consistently focused on being connected and engaged with our employees to keep them motivated and inspired, treating them as equal partners in our growth journey.

As of March 31, 2026, total number of employees stands at 344 as compared to 315 employees in previous financial year

across various domains including corporate operations, engineering, R&D, systems design, and manufacturing. Industrial relations remained cordial during the year, and The Management remains committed to build a culture of collaboration, innovation, and operational discipline that encourages productivity, accountability and long-term employee growth.

14. CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forward-looking statements relating to the Companys future performance, plans, strategic priorities and growth prospects. These statements are based on managements current expectations, estimates and assumptions and are therefore subject to risks and uncertainties that may cause actual outcomes to differ materially from those expressed or implied.

These risks may arise from regulatory changes, market shifts, competitive dynamics, supply chain disruptions, technology evolution, customer behaviour, project execution factors and broader economic conditions Therefore, stakeholders are advised to interpret such forward-looking statements with discretion and not base critical decisions solely on these projections.