Rappid Valves India Ltd Management Discussions

1. Management Overview

FY2026 was a year of disciplined execution for Rappid Valves (India) Limited. While the business environment remained supportive for long-term growth across industrial, marine and defence applications, the second half of the financial year witnessed heightened volatility i n commodity prices and temporary disruptions in global supply chains. Against this backdrop, the Company remained focused on preserving profitability, strengthening its engineering and manufacturing capabilities, expanding market access through product approvals, and positioning itself for sustainable long-term growth rather than pursuing volume growth at any cost.

The financial and operational performance discussed in this Management Discussion and Analysis (“MD&A”) should be viewed in the context of the Companys disciplined approach towards project selection, cost management and execution throughout FY2026. While the Company reports its performance on a full-year basis, FY2026 is best understood in two distinct phases. The first half of the year benefited from favourable operating conditions and healthy project execution, whereas the second half was characterised by heightened raw material volatility, supply chain disruptions and geopolitical uncertainty. The Companys strategic response to these changing market conditions shaped its financial and operational performance during the year and is discussed in greater detail in the subsequent sections of this MD&A.

This MD&A should be read together with the audited standalone financial statements of Rappid Valves (India) Limited for the financial year ended March 31, 2026, prepared on a historical cost and accrual basis in accordance with the applicable provisions of the Companies Act, 2013 and the accounting standards applicable to companies listed on the NSE Emerge (SME) Platform. Pursuant to the Ministry of Corporate Affairs Notification dated February 16, 2015, the

Company is not required to adopt Indian Accounting Standards (Ind AS) for the year under review.

Unless otherwise stated, all financial information presented in this MD&A has been derived from the Companys audited standalone financial statements for the year ended March 31, 2026, on which KAVA & Associates, Chartered Accountants, have expressed an unmodified audit opinion.

2. Global Economic Overview

The global economy remained resilient during FY2026 despite an increasingly uncertain geopolitical and macroeconomic environment. While economic activity continued to be supported by investment in technology and digital infrastructure, the escalation of conflict in the Middle East introduced renewed volatility across global energy, freight and commodity markets. These developments moderated the pace of global growth and interrupted the broader disinflationary trend that had been underway over the past two years.

According to the International Monetary Fund (IMF) World Economic Outlook Update (July 2026), global economic growth is projected at 3.0% in 2026, before improving modestly to 3.4% in 2027, compared with an average growth rate of 3.5% during 2024 25. Emerging Market and Developing Economies are expected to grow by 3.8% in 2026 and 4.5% in 2027, reflecting continued resilience despite elevated geopolitical uncertainty.

For Rappid Valves, the most significant consequence of the global environment was not the moderation in economic growth itself, but the heightened volatility in industrial raw materials. Copper and other non-ferrous alloys, which constitute important inputs for several industrial and marine valve applications, experienced significant price fluctuations duringthe year amid supply disruptions and geopolitical uncertainty. These developments increased procurement uncertainty across the engineering sector and influenced project bidding and execution dynamics, particularly for long-cycle contracts with fixed-price commitments.

Against this backdrop, the Company adopted a disciplined approach towards order selection and execution during the second half of FY2026, with an emphasis on preserving project profitability and maintaining financial discipline. This approach, as discussed in subsequent sections of this MD&A, shaped the Companys operational and financial performance during the year.

Global Economic Indicators

Indicator	2024 25	2026	2027
	(Average)	(Projected)	(Projected)
Global GDP Growth	3.5%	3.0%	3.4%
Emerging Market & Developing Economies Growth	4.5%	3.8%	4.5%

Source: International Monetary Fund (IMF), World Economic Outlook Update, July 2026.

3. Indian Economic Overview

India continued to demonstrate strong economic resilience during FY2026, supported by sustained public investment, expanding manufacturing activity and continued infrastructure development. While the global economy experienced heightened uncertainty, Indias domestic growth remained underpinned by robust capital expenditure, improving industrial activity and policy initiatives focused on strengthening domestic manufacturing capabilities.

According to the Economic Survey 2025 26, Indias real GDP is estimated to have grown by 7.4% during FY2026, while the Reserve Bank of India projected growth of 7.6%, reinforcing Indias position among the fastest-growing major economies. Looking ahead, the Economic Survey projects GDP growth of 6.8% 7.2% for FY2027, reflecting continued confidence in the countrys medium-term growth trajectory.

For Rappid Valves, the broader economic outlook is particularly relevant because demand for industrial and marine valves is closely linked to investments in infrastructure, manufacturing, energy, process industries and defence. Continued government focus on expanding industrial capacity,improving logistics infrastructure and encouraging domestic manufacturing supports long-term demand across several of the Companys end-user industries.

The Governments continued emphasis on defence indigenisation further strengthens the long-term opportunity for specialised marine valve manufacturers. The Union Budget 2026 27 allocated a record 7.85 lakh crore towards defence expenditure, including 2.19 lakh crore for capital outlay, with approximately 75% of the capital acquisition budget reserved for domestic procurement. Indigenous defence production also reached 1.78 lakh crore during FY2025 26, reflecting sustained progress towards self-reliance in defence manufacturing.

These policy initiatives, together with ongoing investments across oil & gas, chemicals, power, water infrastructure and industrial manufacturing, continue to create a supportive demand environment for engineered flow-control solutions, reinforcing the long-term growth opportunity for the Company.

Key Economic Indicators

Indicator	FY2026
Indias Real GDP Growth (Economic Survey)	7.4%
RBI GDP Growth Estimate	7.6%
FY2027 GDP Growth Outlook	6.8% 7.2%
Union Defence Budget FY2026 27	7.85 lakh crore
Defence Capital Outlay	2.19 lakh crore
Domestic Share of Capital Acquisition	75%
Indigenous Defence Production	1.78 lakh crore

4. Industry Structure and Developments

Engineering the Infrastructure of Industrial

Growth

Industrial valves are fundamental components of modern infrastructure. Whether transporting crude oil through pipelines, regulating steam in power plants, controlling chemicals in process industries or managing critical systems aboard naval vessels, valves perform an essential function by enabling the safe, reliable and efficient movement of liquids, gases and steam. As economies continue to invest in industrial capacity, energy infrastructure, water management and defence manufacturing, demand for engineered flow-control solutions is expected to grow alongside these investments.

According to IMARC, the global valves market is estimated at USD 82.9 billion in 2025 and is projected to reach USD 136.0 billion by 2034, representing a 5.7% CAGR.

The Indian industrial valves market is expected to expand from USD 3.4 billion to USD 6.3 billion during the same period, reflecting a faster growth trajectory of 6.64% CAGR, supported by increasing industrialisation and infrastructure investment.

Structural Growth Drivers

Several long-term structural trends continue to support demand across the industrial valve industry:

Continued investments in oil & gas infrastructure and pipeline networks.

Expansion of water treatment and distribution projects under initiatives such as the Jal Jeevan Mission.

Increasing adoption of industrial automation across manufacturing facilities.

Expansion of natural gas infrastructure, including LNG terminals, CGD networks and pipeline projects.

Continued investments in defence shipbuilding and marine infrastructure.

These sectors collectively represent important end-user industries for industrial and marine valves and are expected to remain significant demand drivers over the medium to long term.

Marine & Defence: A High-Value

Opportunity

The marine valve segment represents a specialised market characterised by stringent qualification requirements, specialised metallurgy, product approvals and long project execution cycles.

Entry barriers are considerably higher than those for conventional industrial valve applications, requiring sustained engineering capabilities, manufacturing expertise and long-standing customer approvals.

Indias long-term shipbuilding and defence modernisation initiatives continue to create a favourable environment for qualified domestic manufacturers. The Governments emphasis on indigenous procurement, increasing investments in naval platforms, commercial shipbuilding and maritime infrastructure, along with the gradual localisation of critical components, is expected to support sustained demand for specialised marine valve solutions over the medium to long term.

Industry Growth Indicators

Market	Base Year	Forecast Year	CAGR
Global Valves Market	USD 82.9 Bn (2025)	USD 136.0 Bn (2034)	5.70%
Indian Industrial Valves Market	USD 3.4 Bn (2025)	USD 6.3 Bn (2034)	6.64%

Source: IMARC and industry sources.

The Companys diversified presence across industrial and marine valve applications positions it to participate in multiple long-term growth themes rather than relying on any single end-user industry. This diversified exposure provides resilience while enabling the Company to address evolving opportunities across infrastructure, manufacturing, process industries and defence.

5. Opportunities and Threats

Positioned to Capture Long-Term Industry Opportunities

The long-term demand outlook for industrial and marine valve solutions continues to be supported by structural investment across infrastructure, energy, defence, process industries and manufacturing. Increasing industrial automation, expansion of domestic manufacturing capabilities and continued emphasis on localisation are expected to support sustained demand for engineered flow-control solutions.

Within India, continued investment in defence modernisation, marine infrastructure, oil & gas, water management and industrial manufacturing provides a favourable environment for companies possessing specialised engineering capabilities, certified products and established customer relationships.

The Companys investments in manufacturing infrastructure, product development, certifications and export capabilities position it to participate in these long-term opportunities while continuing to serve both domestic and international customers.

Growth Opportunities

Defence & Marine

Indias indigenous defence manufacturing continues to expand, with defence production reaching 1.78 lakh crore in FY2025-26, an increase of 15.6% over the previous year. The Government has set a target of 3 lakh crore of defence production by

2029, supporting continued opportunities across the domestic defence manufacturing ecosystem.

Source: Ministry of Defence, Government of India.

Industrial Infrastructure

Continued investment in energy, water, process industries and manufacturing is supporting demand for flow-control equipment. Indias natural gas pipeline network has expanded to over 16,800 km, with a further 14,700 km under construction, supporting long-term requirements across gas transmission and related infrastructure.

Source: Ministry of Petroleum & Natural Gas.

Ethanol & Process Industries

The Governments 20% ethanol-blending target and continued development of ethanol and related processing infrastructure are creating opportunities for industrial valve applications. Source: Government of India.

Export Expansion

Indias engineering exports reached a record

US$122.43 billion in FY2025-26, growing 4.86% over FY2024-25 and accounting for 27.71% of merchandise exports. This reflects the growing scale of Indias engineering-export ecosystem and provides opportunities for qualified Indian manufacturers to expand their international presence.

Source: EEPC India / DGCIS, Government of India.

Management Perspective

We see defence and marine, industrial infrastructure, process industries and exports as important avenues for our medium- to long-term growth. Our existing approvals and vendor relationships with major shipyards, including Mazagon Dock Shipbuilders, Garden Reach Shipbuilders & Engineers, Cochin Shipyard and L&T Shipbuilding, provide a platform to participate in defence and marine programmes.

We are also strengthening our ability to address these opportunities through investments in manufacturing infrastructure, product development and certifications. Our diversified customer base also enables us to participate across multiple end-user industries. During FY2026, revenue was generated across ethanol, breweries and industrial wastewater treatment, shipbuilding and repair, chemicals, EPC & OEM, marine, steel, fire safety and other applications. Management will continue to focus on converting these market opportunities into profitable growth, while maintaining discipline in project selection and execution.

Threats

While the Companys presence across industrial and marine valve applications provides diversified market exposure, its business remains subject to external risks associated with cyclical and project-driven markets.

Commodity Price Volatility

Copper and other non-ferrous metals are key inputs for valve manufacturing and remain subject to price fluctuations. Sharp increases in input costs could affect margins, particularly on long-cycle orders executed under fixed-price contracts.

Geopolitical and Supply Chain Disruption

Geopolitical developments and supply chain disruptions could affect the availability, cost and procurement timelines of raw materials, particularly for specialised marine and defence applications.

Sector Concentration

Marine and shipbuilding account for a significant share of the Companys revenue. A slowdown in these sectors, or in other key industries served by the Company, could adversely affect overall business performance.

Competitive Intensity

The industrial and marine valve markets remain competitive, with pricing, certifications and technical capabilities influencing order wins. Increased competition could put pressure on pricing and margins.

Regulatory and Certification Dependency

The Companys participation in marine, defence and export markets depends on maintaining relevant certifications and regulatory approvals. Changes in applicable requirements or delays in certification renewals could affect its ability to serve certain markets.

Management Perspective

We recognise these factors as important considerations in our growth strategy. During FY2026, we responded to elevated raw-material prices through selective order acceptance and pricing discipline, with approximately 10 12 crore of orders held back amid significant price escalation. We will continue to focus on prudent project selection, procurement planning, market diversification, manufacturing capabilities and maintenance of relevant certifications to protect profitability while pursuing growth

6. Industry-wise & Product-wise Performance

Industry-wise Performance:

Our revenue remained diversified across multiple the largest industry contributor at 30.81%, followed end-user industries during FY2026. Ethanol, by Shipbuilding & Repair at 24.51%, Chemicals at Breweries & Industrial Wastewater Treatment was 15.43% and EPC & OEM at 14.89%.

Industry Vertical	FY26
Ethanol, Breweries & Industrial Wastewater Treatment	30.81%
Shipbuilding & Repair	24.51%
Chemicals	15.43%
EPC & OEM	14.89%
Marine	8.34%
Steel	2.81%
Fire Safety	0.39%
Others	2.82%

Shipbuilding & Repair and Marine together contributed 32.85% of FY2026 revenue, reflecting the increasing contribution of marine-related applications, while the Companys presence across chemicals, ethanol, breweries, wastewater treatment and EPC & OEM provides diversification across industrial end markets.

Industry-wise Performance:

The Companys product portfolio remained broad-based, with Ball Valves contributing 28% of FY2026 revenue, followed by Check Valves at 19%, Gate Valves at 15%, Other Items at 14% and Globe Valves at 13%.

We continue to maintain a diversified product portfolio while increasing our focus on specialised and higher-value valve applications. During FY2026,Ball Valves and Check Valves increased their contribution to revenue, while the portfolio continued to include Gate, Globe, Butterfly, Pressure Relief and other specialised valves.

Our product strategy remains focused on expanding application-specific offerings and strengthening our capabilities in specialised marine and industrial requirements, while maintaining a broad product base to serve diverse customer applications

(Rs in Lakhs except percentages)

Product	FY 26 Amount	% of Revenue
Ball Valves	1477	28%
Gate Valves	806	15%
Globe Valves	718	13%
Butterfly Valves	78	1%
Check Valves	1001	19%
Strainer & SDNR Valve	159	3%
Fire Hydrant Valve	36	1%
Pressure Relief Valve	312	6%
Other Items	737	14%
Total	5323	100%

7. Outlook

Positioned to Capture Long-Term Industry Opportunities

Looking ahead, we remain focused on building Rappid into a stronger engineering-led valve manufacturer with a growing presence across marine, defence and specialised industrial applications. We see continued opportunities to expand our presence in marine and defence, while increasing our focus on high-value valves manufactured from exotic materials and other specialised applications.

We also intend to pursue emerging opportunities in data-centre cooling, alongside continued growth in ethanol and alternate-fuel infrastructure.

Looking ahead, we remain focused on building Rappid into a stronger engineering-led valve manufacturer with a growing presence across marine, defence and specialised industrial applications. We see continued opportunities to expand our presence in marine and defence, while increasing our focus on high-value valves manufactured from exotic materials and other specialised applications.

We also intend to pursue emerging opportunities in data-centre cooling, alongside continued growth in ethanol and alternate-fuel infrastructure. We will focus on strengthening our order pipeline by deepening relationships with existing customers, adding new customers and selectively pursuing opportunities across domestic and export markets.

8. Risks and Concerns

Key Risks and Mitigation

Like all engineering manufacturers, the Company operates in an environment influenced by commodity cycles, project execution timelines and evolving customer requirements. Management continues to monitor these risks through operational discipline, prudent project selection and investments in manufacturing capabilities.

To support this growth, we plan to progressively expand our manufacturing capacity and infrastructure in line with demand. Our focus will be on increasing capacity while simultaneously strengthening engineering, testing, automation and product-development capabilities, enabling us to address more specialised and higher-value applications.

Our approach will remain focused on profitable and sustainable growth rather than volume at any cost. We will continue to evaluate opportunities based on their technical fit, commercial attractiveness, execution requirements and long-term customer potential, while maintaining disciplined project selection and operational reliability.

While these risks remain inherent to the business, the Company believes that its engineering capabilities, established customer relationships and disciplined execution approach provide an appropriate framework for managing them.

Risk	Mitigation
Raw material price volatility	Selective order acceptance, pricing discipline and procurement planning
Geopolitical supply chain disruption	Diversified sourcing and inventory planning
Long-cycle marine projects	Focus on project profitability and disciplined exe- cution
Working capital intensity	Continuous monitoring of inventory and receiv- ables
Manufacturing concentration	Ongoing investments to strengthen operational resilience at the Palghar facility
Certification dependency	Continuous compliance with applicable quality and product standards
Export market regulations	Maintenance of international certifications and approvals

9. Internal Control Systems and their adequacy

Positioned to Capture Long-Term Industry Opportunities

The Company has established internal control systems and processes designed to provide reasonable assurance regarding the reliability of financial reporting, safeguarding of assets, compliance with applicable laws and regulations, and the efficient conduct of business operations.

Management periodically reviews the effectiveness of these controls to ensure that financial and operational risks are identified and appropriately managed. The internal control framework is supported by defined policies, standard operating procedures and management oversight across key business functions.

Pursuant to the certification issued under Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Chairman & Managing Director (acting as Chief Executive Officer) and the Chief Financial Officer confirmed that:

the financial statements do not contain any materially untrue statement or omit any material fact; the financial statements present a true and fair view of the Companys affairs; internal financial controls were evaluated during the year and found to be effective; there were no significant deficiencies in internal controls requiring disclosure;

no instances of material fraud involving management or employees having a significant role in internal controls were reported during the year.

The Companys Statutory Auditors have also issued an unmodified opinion on the audited standalone financial statements for FY2026.

Complementing the financial control framework, manufacturing operations continue to follow established quality assurance procedures, including material verification, inspection, pressure testing, traceability systems and customer-specific inspection protocols, supporting product reliability across industrial and marine applications.

10. Discussion on Financial Performance with respect to Operational Performance

Delivering Resilient Performance Amid a Challenging Operating Environment

FY2026 was characterised by two distinctly different operating environments. The first half of the year benefited from continued execution across industrial and marine projects, supported by healthy demand from EPC, OEM and marine customers. During the second half, however, heightened volatility in copper and other non-ferrous metal prices, together with temporary geopolitical supply chain disruptions, created a more uncertain operating environment, particularly for long-cycle projects executed under fixed-price contracts.

Against this backdrop, the Company adopted a disciplined approach towards project selection and execution. Rather than pursuing revenue growth at the expense of profitability, management prioritised commercially prudent orders, protected execution quality and maintained pricing discipline. While this approach moderated revenue growth during the second half of the year, it supported overall profitability and strengthened the quality of the Companys order execution.

FY2026 Financial Snapshot

Particulars ( Lakhs)	FY2026	FY2025	YoY
Revenue from Operations	5,323.3	5,212.5	2.1%
Profit Before Tax	866.4	823.9	5.2%
Profit After Tax	647.8	603.7	7.3%
PAT Margin	12.5	11.6	7.8%

Source: Audited Standalone Financial Statements FY2026.

Performance During H1 FY2026

The first half of FY2026 continued the operational momentum established during the previous financial year. Revenue from operations stood at 2,882.2 Lakhs, while Profit Before Tax and Profit After Tax were 454.3 Lakhs and 338.0 Lakhs, respectively.

Marine, EPC & OEM and ethanol-related applications remained important contributors during the period, reflecting continued demand across diversified end-user industries and supporting healthy capacity utilisation across the manufacturing facility.

Particulars ( Lakhs)	H1 FY2026	H1 FY2025	YoY
Revenue from Operations	2,882.2	1,962	46.9%
Profit Before Tax	454.3	363.2	25.1%
Profit After Tax	338.0	239.46	41.2%
PAT Margin	11.73%	12.20%	-47 bps

Performance During H2 FY2026

Operating conditions became more challenging during the second half of the year as volatility in copper and other non-ferrous metal prices increased procurement uncertainty across the engineering industry. Geopolitical developments also affected supply chains, particularly for imported raw materials used in specialised marine valve manufacturing. Management responded by adopting a more selective approach towards project acceptance, particularly where fixed-price contracts carried elevated input-cost risk. This approach resulted in lower revenue during the period but contributed to improved profitability at the project level.

Although revenue declined during the period, PAT margin improved from 11.1% to 12.6%, demonstrating that management maintained pricing discipline and profitability despite a more challenging operating environment.

Particulars ( Lakhs)	H2 FY2026	H2 FY2025	YoY
Revenue from Operations	2,441.1	3,250.9	(24.9%)
Profit Before Tax	412.1	460.7	(10.6%)
Profit After Tax	309.8	364.2	(14.9%)
PAT Margin	12.6%	11.1%	+150 bps

Management Perspective

The Companys financial performance during FY2026 reflects a conscious balance between growth and profitability.

Rather than maximising short-term revenue, management remained focused on executing projects that met internal return expectations while continuing to serve long-standing customers across industrial and marine applications.

This disciplined approach is particularly relevant given the long execution cycles associated with marine and defence projects, where effective risk management, procurement planning and cost control are critical to sustaining long-term value creation.

Management Perspective

Operations continued from the Companys integrated manufacturing facility located at Genesis Industrial Complex, Palghar, Maharashtra, spanning more than 45,000 sq. ft. with an installed annual manufacturing capacity of 33,500 industrial and marine valves.

The facility operated at approximately 85% capacity utilisation during FY2026, reflecting healthy utilisation levels while retaining capacity to support future demand growth.

During the year, the Company also strengthened its operational infrastructure through:

Operationalisation of a 6,000 sq. ft. export-dedicated facility

Addition of a 9,000 sq. ft. inventory management facility

Procurement of four automated testing benches

Planned installation of a new Vertical Machining Centre (VMC)

These initiatives are expected to enhance manufacturing efficiency, improve delivery responsiveness and support increasing export opportunities.

Profitability Review

Despite a challenging operating environment during the second half of FY2026, the Company delivered steady profitability through disciplined project selection, pricing discipline and continued focus on execution quality. Revenue from operations increased by 2.1% to 5,323.3 Lakhs, while Profit After Tax grew by 7.3% to 647.8 Lakhs.

The improvement in profitability relative to revenue growth reflects the Companys focus on maintaining project margins rather than pursuing volume-led growth in an environment characterised by raw material price volatility and supply chain disruptions.

Cost Structure

Raw material continued to represent the largest component of the Companys operating cost structure. During FY2026, material cost represented 70.9% of revenue compared with 73.0% in FY2025, indicating improved cost management despite significant volatility in copper and other non-ferrous metals during the year.

Employee benefit expenses increased as a percentage of revenue from 3.9% to 5.3%, reflecting continued investment in manufacturing capabilities and organisational capacity. Finance costs also increased marginally following higher utilisation of working capital borrowings.

As % of Revenue	FY2026	FY2025
Material Cost	70.9%	73.0%
Employee Benefits	5.3%	3.9%
Finance Cost	2.5%	2.1%
Depreciation	1.2%	1.5%

Working Capital Management

Working capital remained an important area of focus during FY2026, particularly given the longer execution cycles associated with industrial and marine projects.

Inventories increased to 2,667.5 Lakhs, while trade receivables rose to 2,483.2 Lakhs, reflecting inventory build-up and project execution requirements during the year. Consequently, short-term borrowings increased to support working capital requirements.

Although these developments affected working capital ratios during FY2026, they should be viewed in the context of the Companys execution profile and expanding operational scale rather than as isolated financial movements.

Balance Sheet Position

The Companys balance sheet continued to strengthen during FY2026.

Total assets increased by 25.0% to 7,531.7 Lakhs, while shareholders funds increased by 14.3% through retained earnings.

The increase in working capital investments supported ongoing project execution and operational requirements during the year.

As % of Revenue	FY2026	FY2025
Total Assets	7,531.7	6,025.2
Shareholders Funds	5,171.4	4,524.8
Short-term Borrowings	1,784.3	841.4
Inventory	2,667.5	1,617.0
Trade Receivables	2,483.2	1,923.2

Capital Allocation & IPO Proceeds

The Company continued to deploy capital raised through its Initial Public Offering in accordance with approved objectives.

As of 31 March 2026, 2,276.49 Lakhs, representing approximately 74.8% of the IPO proceeds, had been utilised.

Following shareholder approval obtained at the Extraordinary General Meeting held on 17 April 2026, the remaining unutilised balance of 764.51 Lakhs was reallocated towards working capital requirements. Apart from this approved modification, there were no other deviations from the stated objects of the Issue.

11. Human Capital

Delivering Resilient Performance Amid a Challenging Operating Environment

The Companys employees remain central to its ability to deliver precision-engineered products, maintain quality standards and execute customer requirements across industrial and marine applications. Its workforce brings together expertise across engineering, manufacturing, machining, quality assurance, testing, production planning, supply chain management and customer support.

As of March 31, 2026, the Companys workforce comprised over 100 employees across these functions.

As the business continues to expand its manufacturing capabilities and product portfolio, the Company remains focused on strengthening organisational capabilities through the development of technical skills, operational excellence and a culture centred on quality, safety and continuous improvement.

During FY2026, Employee Benefit Expense increased to 281.5 Lakhs from 204.4 Lakhs in the previous year, reflecting continued investment in organisational capacity and manufacturing operations.

12. Key Financial Ratios

The following ratios are disclosed pursuant to Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations, 2015.

Ratio	FY2026	FY2025	Change %	Explanation for change
Current Ratio	2.55x	3.38x	(24.56%)	No significant change.
Debt Equity Ratio	0.35x	0.19x	84.2%	The increase primarily reflects higher short-term borrowings undertaken to support working capital requirements during the year.
Debtors Turnover	2.42x	3.78x	(36%)	The decline was primarily attributable to higher trade receivables during the year in line with project execution requirements.
Inventory Turnover	1.76x	2.74x	(35.8%)	The decline was primarily attributable to higher inventory levels maintained to support production and ongoing project execution.
Interest Coverage	7.52x	8.36x	(10.0%)	No significant change.
EBITDA Margin	20.0%	19.5%	2.56%	No significant change.
Net Profit Margin	12.2%	11.6%	5.2%	No significant change.
Return on Net Worth	13.4%	21.0%	(36.2%)	The decline primarily reflects the enlarged shareholders funds following the Companys IPO, rather than any deterioration in absolute profitability.

Note: The change percentages represent the year-on-year movement in the respective ratios.

The movement in the key financial ratios during FY2026 primarily reflects the Companys expanding operating scale and working capital requirements. Higher inventory and receivable balances supported ongoing project execution, while the corresponding increase in short-term borrowings resulted in a higher Debt-Equity Ratio. The decline in Return on Net Worth was primarily a result of the larger equity base.

13. Closing Reflection

FY2026 demonstrated the importance of disciplined execution in an evolving operating environment. While external challenges influenced short-term growth, the Company continued to strengthen its engineering capabilities, manufacturing infrastructure and

14. Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, expectations, estimates, outlook or projections may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on managements current expectations, assumptions and estimates regarding future events and business performance.

Actual results may differ materially from those expressed or implied in such forward-looking statements due to various factors, including changes in economic conditions, raw material prices, geopolitical developments, government policies, defence procurement, competitive intensity, customer demand, foreign exchange movements, market positioning. Management remains committed to delivering sustainable, profitable growth through operational excellence, prudent capital allocation and long-term customer partnerships.

interest rates, regulatory changes, the Companys ability to execute projects, maintain required certifications and other risks beyond its control.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable laws and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Readers are advised to read this MD&A together with the audited financial statements and the accompanying notes forming part of the Annual Report.