Ramky Infrastructure Ltd Management Discussions

Indian Economic Environment

Indias economic landscape remained resilient in FY2025 26, supported by domestic demand, investment and continued economic activity. As per the First Advance Estimates of the National Statistical Office, real GDP is estimated to grow by 7.4% FY2025 26. Construction GVA is estimated to grow by 7.8% during the year. The Government continued to prioritise capital expenditure to strengthen productive capacity and build long-term economic infrastructure. The Union Budget 2025 26 provided 11.21 lakh crore for capital expenditure, equivalent to 3.1% of GDP, while effective capital expenditure, including grants for creation of capital assets, was budgeted at 15.48 lakh crore, or 4.3% of GDP. Government capital outlay has increased by nearly 89%, from 5.92 lakh crore in FY2021 22 to the budgeted 11.21 lakh crore in FY2025 26, reinforcing infrastructure as an important driver of economic growth.

Infrastructure Sector

Indias infrastructure sector remains inclined towards sustained public investment, urbanisation efforts, and initiatives to promote industrial expansion. The focus is increasingly shifting from creating basic infrastructure to improving the quality, capacity and existing systems.

Data published in the Economic Survey 25-26 points towards public capital expenditure remaining central to Indias growth. Initiatives such as PM GatiShakti continue to improve integrated planning and coordination efforts across infrastructure projects. Continued investments by EPC, PPP, and hybrid models within the private sector also created new opportunities across transportation, urban infrastructure, water and industrial development.

For infrastructure companies, the opportunity is increasingly moving towards projects that combine construction with long-term operation, maintenance, resource efficiency and measurable outcomes.

Water and Wastewater

Water and wastewater management are emerging as critical infrastructure for India. The Economic Survey 2025 26 estimates that India generates approximately 112 billion litres of domestic and industrial wastewater daily, making it the worlds third-largest generator of wastewater. Urban areas account for around two-thirds of this volume, while only 28% of urban wastewater is currently treated.

The next phase of urban development is expected to focus on expanding coverage and improving the performance of water supply, sanitation, drainage, solid waste management and essential urban services.

This creates opportunities for integrated solutions that address multiple infrastructure needs while improving resource efficiency The limited treatment and reuse of wastewater points to significant long-term opportunity. The Economic Survey highlights treated used water reuse as an important part of a circular water economy and estimates that reuse of treated water for applications such as industrial cooling, construction and landscaping could create an economic opportunity of 2.4 3.2 lakh crore by 2047.

Indias water sector is moving beyond conventional water supply and sewage treatment towards reuse, resource recovery, pollution control and circular water management. Government programmes and performance-linked models such as Hybrid Annuity Models for sewage treatment are further supporting this transition.

Government initiatives like Jal Jeevan Mission 2.0, approved in March 2026, extend the mission to December 2028 with an enhanced outlay of 8.69 lakh crore. The reoriented programme places greater emphasis on reliable and sustainable drinking-water services, creating continued opportunities across efficiency of water supply and related infrastructure Another highlight initiative includes AMRUT 2.0 continues to support investment in urban water supply, sewerage and septage management, water-body rejuvenation and related urban infrastructure. The programme is supporting continued investment in urban water and wastewater infrastructure across cities Industrial Parks Indias sector continued to gain momentum, growing 8.4% in the first half of FY2025 26, according to the Economic Survey. Indias industrial parks sector continues to benefit from efforts to expand parks. The development of industrial parks is driving demand for supporting infrastructure, including utilities, water supply, wastewater treatment, common facilities and other essential services.

The Governments BHAVYA scheme, approved in March 2026, provides for the development of 100 plug-and-play industrial parks with ready infrastructure to support industrial investment. This is expected to support continued demand for quality infrastructure within industrial parks.

Roads and Bridges and Transportation

Roads and Bridges transportation infrastructure continues to benefit from sustained public investment aimed at improving connectivity, reducing logistics

Indian Economic Environment

Indias economic landscape remained resilient in FY2025 26, supported by domestic demand, investment and continued economic activity. As per the First Advance Estimates of the National Statistical Office, real GDP is estimated to grow by 7.4% FY2025 26. Construction GVA is estimated to grow by 7.8% during the year. The Government continued to prioritise capital expenditure to strengthen productive capacity and build long-term economic infrastructure. The Union Budget 2025 26 provided 11.21 lakh crore for capital expenditure, equivalent to 3.1% of GDP, while effective capital expenditure, including grants for creation of capital assets, was budgeted at 15.48 lakh crore, or 4.3% of GDP. Government capital outlay has increased by nearly 89%, from 5.92 lakh crore in FY2021 22 to the budgeted 11.21 lakh crore in FY2025 26, reinforcing infrastructure as an important driver of economic growth.

Infrastructure Sector

Indias infrastructure sector remains inclined towards sustained public investment, urbanisation efforts, and initiatives to promote industrial expansion. The focus is increasingly shifting from creating basic infrastructure to improving the quality, capacity and existing systems.

Data published in the Economic Survey 25-26 points towards public capital expenditure remaining central to Indias growth. Initiatives such as PM GatiShakti continue to improve integrated planning and coordination efforts across infrastructure projects. Continued investments by EPC, PPP, and hybrid models within the private sector also created new opportunities across transportation, urban infrastructure, water and industrial development.

For infrastructure companies, the opportunity is increasingly moving towards projects that combine construction with long-term operation, maintenance, resource efficiency and measurable outcomes.

Water and Wastewater

Water and wastewater management are emerging as critical infrastructure for India. The Economic Survey 2025 26 estimates that India generates approximately 112 billion litres of domestic and industrial wastewater daily, making it the worlds third-largest generator of wastewater. Urban areas account for around two-thirds of this volume, while only 28% of urban wastewater is currently treated.

The next phase of urban development is expected to focus on expanding coverage and improving the performance of water supply, sanitation, drainage, solid waste management and essential urban services.

This creates opportunities for integrated solutions that address multiple infrastructure needs while improving Industrial Parks, Water and Wastewater form key areas of focus, supported by capabilities across EPC, Hybrid Annuity Model (HAM), PPP and Operation & Maintenance (O&M).

Business Model

The Company operates through two broad business models:

Engineering, Procurement and Construction (EPC)

The EPC business undertakes infrastructure projects across water and wastewater, industrial infrastructure, urban solutions, buildings and other infrastructure segments. Its capabilities span project planning, engineering, procurement, construction, commissioning and execution management.

Developer and Infrastructure Solutions

The Company participates in development projects and public-private partnership opportunities through project-specific requirements. These include industrial parks, water and wastewater infrastructure, transportation assets and urban infrastructure. efficiency of This combination allows Ramky to participate across different stages of the infrastructure lifecycle, from project development and construction to commissioning and long-term operations.

Building Depth in Water and Wastewater and Industrial Parks Water and Wastewater

Water and wastewater remain a core area of the Companys expertise. Its capabilities cover the development and operation of sewage treatment plants, water and wastewater treatment systems, transmission pipelines, pumping infrastructure and associated solutions.

The Companys experience spans EPC, HAM, PPP, and O&M models. During the year, the Company continued to strengthen its focus on delivery cycles, with a focus on stronger commissioning. It was treated as an important transition from construction to operations. This approach strengthens project design, equipment selection, and execution decisions, with long-term operational performance in mind.

Industrial Parks

Industrial Parks are an important business area for RIL. The Company develops and manages infrastructure within industrial park ecosystems, including internal infrastructure, utilities and common facilities required by industrial developments.

The Companys experience includes Jawaharlal Nehru Pharma City (JNPC), Vizag, where it provides infrastructure services for industries operating within the park.

Selective Growth with Execution Discipline

The Company continues to follow a selective approach to bidding, with emphasis on project margins and contractual terms. It gives due consideration to the scope of work, execution requirements and commercial terms before taking up projects. This approach helps the Company focus its resources on projects that are commercially viable and can be executed effectively.

Project Execution

The Companys project experience includes both construction and O&M in select infrastructure projects. This includes O&M arrangements under HAM and environmental infrastructure projects, alongside its EPC projects.

Financial Overview

Ramky Infrastructure Limited remained profitable in FY2025 26, with profitability improving moderation in revenue.

On a consolidated basis, revenue from operations stood at 1,846.48 crore, compared with 2,044.54 crore in FY2024 25. Total income stood at 2,041.54 crore, compared with 2,210.45 crore in the previous year. However, profit for the year increased to 282.78 crore, from 210.49 crore in FY2024 25. Basic EPS increased from 28.54 to 39.17.

On a standalone basis, revenue from operations stood at 1,678.93 crore, compared with 1,969.36 crore in FY2024 25. Total income stood at 1,857.44 crore, compared with 2,093.84 crore in the previous year. Profit for the year increased to 331.88 crore, from 265.19 crore, while basic EPS increased from 38.32 to 47.96.

The improvement in profitability, despite lower revenue, reflects the Companys financial year of changing project and business mix.

Order Book

As at March 31, 2026, the Companys order book stood at 13,000 crore, providing a substantial base for future execution.

Industrial projects accounted for 8,000 crore, followed by Water & Wastewater at 3,500 crore, Buildings at 1,250 crore, Electricals at 150 crore and Roads & Bridges at 100 crore.

Of the total order book, 8,400 crore relates to Capex projects and 4,600 crore to Opex projects. Industrial and Water & Wastewater together account for approximately 89% of the order book, highlighting their significance to the Companys future execution pipeline.

OPPORTUNITIES AND THREATS Opportunities Water and Wastewater

Water and wastewater remain among Ramkys strongest areas of experience. Rising urban water demand, treatment requirements and the growing need to reuse treated water are expanding the addressable market. With 3,500 crore of orders in this segment, it is also an important contributor to the Companys future execution.

Industrial Infrastructure

Industrial is currently the largest part of the order book at 8,000 crore. Growth in industrial parks is creating demand not only for core infrastructure, but also for utilities, water and wastewater systems and common facilities. Ramkys experience across these areas positions it to participate in larger, integrated projects. a A larger Opex opportunity The order book includes 4,600 crore of Opex work, alongside 8,400 crore of Capex projects. This gives Ramky exposure to contracts that extend beyond construction and can provide longer-duration engagement with infrastructure assets. The ability to execute these contracts well will be important to converting this opportunity into sustained business.

Continued infrastructure spending

Public investment in urban infrastructure, transport, water, buildings and other essential infrastructure continues to support the EPC market. Ramkys presence across several of these sectors gives it the flexibility to pursue opportunities where project terms and returns are appropriate.

Risks & Concerns performance during a

Since its inception, Ramky Infrastructure Limited has been actively involved in EPC contracts. Over the years, based on its experience across projects, the management has observed that EPC contracts, particularly those awarded by government authorities, are subject to several risks.

The Company has previously faced financial challenges arising from the simultaneous execution of multiple projects, which required significant fund outflows, delays in the release of funds by government authorities and various legal matters. These circumstances resulted in the implementation of the Stress Resolution Mechanismnotifiedby the RBI. Subsequently, the Company monetised its road assets to generate the required liquidity.

Considering these past experiences and the current operating environment, the Company faces the following key risks:

1. Tender Risk

A key risk arises from the nature of EPC contracts. Many government-awarded EPC contracts are fixed-price contracts without adequate provisions for cost or time overruns. This makes the bidding process challenging, as any unforeseen event or deviation during execution can adversely affect project margins and increase the overall risk.

2. Financial Risk

EPC contracts require significant financial commitments at the tendering stage, including mobilisation advances and bank guarantees. These commitments can place considerable demands on working capital. A mismatch between when financial obligations come due generated can create cash

3. Material Risk

Government EPC contracts may not provide adequate cost escalation provisions. As a result, fluctuations in raw material prices can affect project economics. The Company may face the risk of being unable to procure materials at the prices initially assumed while bidding for the contract.

4. Manpower Risk

The construction sector continues to face shortages of skilled labour. Depending on project requirements, the Company may need to mobilise labour from other states, which can create challenges related to availability, retention and deployment of skilled manpower.

5. Compliance Risk

Infrastructure project execution requires compliance with a wide range of statutory and regulatory requirements. In certain cases, the release of corresponding funds by government authorities may also depend on the completion of required compliances. The large and evolving regulatory framework increases the risk of delays or additional requirements during project execution.

6. Unforeseen Risk

Infrastructure projects, particularly those involving underground works, may encounter unforeseen site and geological conditions. The Company has experienced situations where, despite seismological testing, ground conditions proved unsuitable for execution and resulted in high additional costs that were not accommodated by the government authorities.

7. Clearances Risk

Many government contracts require the contractor to obtain or support the process of obtaining requisite statutory and project-related clearances. Delays or challenges in securing these clearances can affect project timelines and execution. The Company has faced such challenges in the past, resulting in delays in project execution.

Selective Approach to Bidding

In view of the risks encountered over the years, the Company has adopted a more selective approach to bidding for EPC projects. The Company evaluates the commercial viability and execution risks of projects before participating in tenders. Contracts that do not provide reasonable margins or adequate provisions for cost overruns are assessed cautiously, and when revenue is as such conditions can adversely affect the financial pressures. performance and timely execution of projects.

The Company remains selective in taking on new projects, focusing on viability, contract terms, and execution feasibility.

INTERNAL FINANCIAL CONTROL AND THEIR ADVOCACY

The Company has adequate Internal Financial Controls consistent with the nature of its business and the size of its operations. These controls provide for the safety of its assets, the reliability of financialtransactions, adequate checks and balances, adherence to applicable statutes and accounting policies, approval procedures, and the optimum use of available resources. These systems are reviewed and improved regularly. The Company also has a comprehensive budgetary control system to monitor revenue and expenditure against approved budgets on an ongoing basis.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

As on March 31, 2026, RIL had 1,000+ employees. The Company believes in creating an environment where employees derive a sense of purpose, passion and opportunities for personal growth, contributing to better organisational performance.

The Company continues to focus on four key areas: talent engagement, performance management, capability development and maintaining cordial industrial relations. It also reviews and strengthens its HR processes and systems on an ongoing basis to improve the efficiency of its people-related processes and optimise time and costs.

The Company promotes a healthy and inclusive work culture that supports employees mental well-being. It provides equal opportunities and promotes diversity, equity and inclusion, with employees treated with fairness, respect and dignity.

Regular training and development initiatives are undertaken to strengthen employee capabilities and equip the workforce with skills required to meet evolving business needs. The Company maintains a zero-tolerance approach towards workplace harassment and discrimination and remains committed to providing a safe, respectful and supportive work environment.

Key Ratios

Particulars	FY 2025-26	FY 2024-25	Variance (%)
Debtor\u2019s Turnover (No. of Days)*	146	110	33 %
Inventory Turnover (No. of Days)	28	25	12 %
INTEREST Service Coverage Ratio (in times)	8.75	7.17	22 %
Current Ratio (in times)#	1.67	1.32	26 %
Debt Equity Ratio (in times)$	0.20	0.29	(33)%
Operating Profit Margin (%)	16%	20%	-20%
Net Profit Margin (%)^	20%	13%	50%
Return on Net Worth (%)	20%	19%	6%

*The variance is on account of decrease in revenue during the year

#The variance is on account of increase in cash balance on sale of subsidiary during the year. $The variance is on account of extension of repayment term of borrowings during the year. ^The variance is on account of Exceptional items recognized during the year