RattanIndia Enterprises Ltd Management Discussions

GLOBAL ECONOMY

FY 2025-26 was characterised by moderate global economic expansion amid persistent geopolitical uncertainties, evolving trade dynamics and divergent monetary policies across major economies. While inflation moderated across most developed markets, economic growth remained uneven as central banks sought to balance the need to support growth with the imperative of maintaining price stability.

According to the International Monetary Fund (IMF), global GDP growth remained in the range of approximately 3.0% to 3.2%, supported by resilient domestic demand across emerging markets and a gradual recovery in international trade. The United States continued to demonstrate economic resilience despite elevated interest rates, while Europe experienced subdued growth due to weak industrial activity and ongoing geopolitical uncertainties. China witnessed slower-than-historical growth as its economy continued to adjust to structural changes in the real estate sector and evolving domestic consumption patterns.

Global trade witnessed modest improvement during the year, supported by easing supply chain disruptions and growing demand for technology products, digital services and advanced manufacturing. However, geopolitical conflicts, rising protectionist measures and tariff-related uncertainties continued to weigh on cross-border investments.

Artificial Intelligence (AI), cloud computing, semiconductor manufacturing and digital infrastructure emerged as key drivers of global capital expenditure. Governments and enterprises significantly accelerated investments in automation, cybersecurity and digital transformation, creating new opportunities across technology-driven sectors.

Outlook

The global economy is expected to remain resilient during FY 2026-27 despite persistent geopolitical challenges. Moderating inflation, gradual monetary easing and increasing investments in digital technologies are expected to support economic growth. However, trade fragmentation, volatile energy prices, climate-related disruptions and geopolitical conflicts continue to pose significant risks to global economic stability.

INDIAN ECONOMY

India further strengthened its position as one of the worlds fastest-growing major economies during FY 2025-26. Supported by robust domestic consumption, sustained government capital expenditure, rising private investments and rapid digital adoption, the economy maintained a strong growth trajectory despite prevailing global uncertainties.

Indias real GDP is estimated to have grown by approximately 6.4% to 6.6%, driven by resilient domestic demand, expanding manufacturing activity, infrastructure development and continued strength in services exports. Construction, financial services, telecommunications, digital services and manufacturing remained the key contributors to economic growth.

Government initiatives such as Make in India, Digital India, PM Gati Shakti, the Production Linked Incentive (PLI) Scheme, semiconductor manufacturing initiatives and investments in renewable energy continued to reinforce Indias long-term growth trajectory.

Inflation largely remained within the Reserve Bank of Indias target range, supported by stable food prices and prudent monetary policy. The Government also continued to advance its fiscal consolidation roadmap while maintaining substantial public investment in infrastructure development.

Indias exports remained resilient despite a challenging global environment. Services exports, particularly in information technology, Global Capability Centres (GCCs), engineering services and digital solutions, continued to perform strongly. At the same time, sustained foreign direct investment inflows reflected continued global confidence in Indias long-term growth prospects.

The country also witnessed record GST collections, continued expansion of digital payments and further formalisation of the economy.

Outlook

India is expected to remain one of the fastest-growing major economies globally during FY 2026-27. Rising urbanisation, favourable demographics, sustained infrastructure investments, manufacturing expansion and rapid digitalisation are expected to support long-term economic growth. Increasing adoption of AI, electric mobility, renewable energy and digital commerce is also expected to create significant business opportunities across sectors.

INDIAS DIGITAL ECONOMY

Indias digital economy continued its rapid transformation during FY 2025-26, emerging as one of the countrys strongest engines of economic growth. Supported by expanding internet penetration, widespread smartphone adoption, affordable data connectivity and one of the worlds most advanced Digital Public Infrastructure (DPI) ecosystems, digital technologies became increasingly integrated across commerce, governance, finance and manufacturing.

India today has over one billion internet connections, while the Unified Payments Interface (UPI) continues to be the worlds largest real-time digital payment ecosystem, processing billions of transactions every month. Digital payments have become an integral part of everyday commerce across both urban and rural India.

Government initiatives, including Digital India, the IndiaAI Mission, ONDC, India Stack, DigiLocker and the continued rollout of 5G services, further accelerated digital inclusion and technology adoption. The countrys expanding network of Global Capability Centres (GCCs), data centres and cloud infrastructure further strengthened Indias position as a global hub for digital innovation.

Artificial Intelligence emerged as the defining technology of the year. Enterprises across financial services, healthcare, education, retail, manufacturing and logistics increasingly adopted AI-driven automation, predictive analytics and generative AI applications to improve operational efficiency and enhance customer experience.

Indias start-up ecosystem also continued to expand, attracting significant domestic and international investments across AI, fintech, electric mobility, Software-as-a-Service (SaaS), deep technology and consumer internet businesses.

Future Imperatives

To sustain long-term leadership in the digital economy, India will continue to focus on:

- Expanding AI capabilities and computing infrastructure.

- Strengthening cybersecurity and data protection.

- Enhancing semiconductor manufacturing capabilities.

- Improving digital skills and AI talent development.

- Accelerating rural broadband connectivity.

- Building resilient cloud and digital infrastructure.

- Promoting innovation-led entrepreneurship.

Opportunities

Indias structural transformation presents significant long-term opportunities across multiple sectors.

Digital Transformation

Increasing digitalisation across businesses, government services and consumer applications is creating substantial opportunities in fintech, e-commerce, enterprise software, cloud services and AI-enabled platforms.

Artificial Intelligence

AI is expected to become one of the most significant productivity enablers across industries by driving automation, enhancing decision-making and delivering personalised customer experiences.

Electric Mobility

Growing adoption of electric vehicles, supported by government incentives, expanding charging infrastructure and sustainability initiatives, continues to create long-term opportunities across the mobility ecosystem.

Consumer Technology

Rising disposable incomes, expanding middle-class consumption and increasing internet penetration continue to drive demand for technology-enabled consumer businesses.

Financial Inclusion

Digital lending, embedded finance, digital payments and fintech innovations continue to expand access to financial services across underserved segments of the population.

Global Capability Centres (GCCs)

Indias position as a preferred destination for Global Capability Centres continues to strengthen, creating significant opportunities in engineering, research & development, analytics and digital services.

Challenges

Despite the positive outlook, several challenges remain:

- Geopolitical tensions and uncertainties in global trade.

- Inflationary pressures and fluctuations in commodity prices.

- Rapid technological advancements requiring continuous innovation.

- Increasing cybersecurity threats and data privacy concerns.

- Availability of skilled talent in emerging technologies, particularly AI and semiconductor design.

- Regulatory developments impacting digital businesses.

- Intensifying competition across technology-driven sectors.

Outlook

India enters FY 2026-27 from a position of considerable economic strength. Strong macroeconomic fundamentals, resilient domestic demand, accelerating digital adoption and supportive government policies provide a favourable environment for sustained long-term growth.

Technology-led businesses are expected to remain among the fastest-growing segments of the economy. Artificial Intelligence, fintech, electric mobility, e-commerce, cloud infrastructure, digital healthcare and consumer internet platforms are expected to drive the next phase of value creation.

For RattanIndia Enterprises, its continued focus on technology-driven businesses, innovation, disciplined capital allocation and scalable digital platforms positions the Company to participate meaningfully in Indias evolving growth story. Leveraging its diversified portfolio across new-age sectors, the Company remains committed to creating sustainable long-term value for its shareholders while capitalising on the opportunities presented by Indias rapidly expanding digital economy.

OUR BUSINESS

BUSINESS VERTICAL 1

E-COMMERCE

Cocoblu Retail Limited ("Cocoblu" or "CB"), a wholly-owned subsidiary of RattanIndia Enterprises Limited, is one of Indias leading sellers operating in e-commerce. Cocoblu partners with 1500+ brands and sellers across categories to power their online commerce journey on major marketplaces, providing end-to-end to help brands manage marketplace operations.

Financial Performance

Cocoblu delivered another year of strong revenue growth, achieving revenues of Rs. 7,351 Crore in FY 2025-26, up 12.6% from Rs. 6,528 Crore in FY 2024-25. The Company has maintained profitability with a Profit After Tax of Rs. 90.6 Crore and has been EBITDA positive since inception - a testament to its disciplined operating model.

Metric	FY 2025-26 Rs Crore	FY 2024-25 Rs Crore	Growth
Revenue from Operations	7,350.9	6,527.8	+12.6%
Profit Before Tax	122.3	129.3	-
Profit After Tax	90.6	96.5	-
Total Assets	1,762.5	1,251.2	+40.9%
Net Worth	631.2	535.4	+17.9%

The Companys asset base expanded 41% year-over-year to Rs. 1,763 Crore, reflecting significant scale-up in inventory and working capital deployment to support the growing vendor ecosystem. Net worth strengthened to Rs. 631 Crore from Rs. 535 Crore the previous year.

Key Developments & Milestones

1. Scaled Vendor Ecosystem - 1500+ Active Brand Partners

Cocoblus vendor ecosystem grew to over 1500 active brand partners during the year, reinforcing its position as a leading e-commerce enabler. The company manages vendor relationships through a structured lifecycle - from onboarding to growth management - with dedicated monthly tracking of active/inactive status and MSME compliance.

2. Premium Brand Portfolio Expansion

During the year, Cocoblu significantly expanded its premium brand portfolio with marquee partnerships including Flying Machine, Gap, Fila, Lotto, Chumbak, and other new brands. We are the partner of choice for emerging brands, including D2C brands, looking to scale their presence. The onboarding of these recognized lifestyle and fashion brands enhances revenue quality and strengthens Cocoblus credibility as a partner of choice for established consumer brands.

During the year, Cocoblu entered the quick commerce space through Amazon Now, tapping into a fast-growing channel with significant potential to expand its reach and unlock new growth opportunities.

3. In-House Technology Capabilities - SP API & Automation

Cocoblu invested in building proprietary technology capabilities during the year. The technology team implemented a Seller Partner (SP) API integration, enabling greater automation across operations and improving overall efficiency. The company also deployed AI agents to automate shared services functions, streamlining processes and reducing manual effort across teams.

The company has implemented artificial intelligence tools to help with customer service, compliance monitoring and pricing decisions.

Operational update:

Cocoblu served approximately 14 Crore orders during FY 2025-26, equivalent to about 4 orders every second across the year. This marks a healthy 10% growth in orders compared to the 12.7 Crore orders served in FY 2024-25. Cumulatively, since its inception in March 2022, Cocoblu has serviced over 45 Crore orders. The Company expanded its network of active vendors by over 25%, growing from 1,200+ active vendors in FY 2024-25 to 1,500+ active vendors by Q4 FY 2025-26. The range of unique items offered by Cocoblu expanded to approximately 8.4 million, serving almost all pin codes across India — covering 99.9% of the countrys addressable delivery network. The Companys fulfilment infrastructure now spans 520 fulfilment centres and Quick Commerce dark stores, enabling rapid delivery capabilities.

Customer Engagement: Customer satisfaction remained consistently high, with Cocoblu achieving a 5-star rating on the Amazon platform — a testament to its operational excellence and commitment to service quality.

Outlook

Cocoblu is well-positioned to continue its growth trajectory in Indias rapidly expanding e-commerce market. With a robust vendor ecosystem, technology-driven operations, and a proven profitable model, the Company aims to further scale its platform while deepening brand partnerships.

Neobrands Limited ("Neobrands" or "NB"), a subsidiary of RattanIndia Enterprises Limited, is a house of brands designed for Indias rapidly expanding Gen Z consumer segment. The Company operates across fashion, lifestyle, and music categories through its portfolio of distinctive brands — Fyltr (Western Clothing), INKD (Denim), Pumpd (Athleisure), Kaari (Ethnic Premium), Kalaanj (Ethnic Economy), Akkord (Musical Instruments), and Neomate (Stationery).

Financial Performance

Neobrands delivered strong top-line growth of 17% year-over-year, with revenue from operations reaching Rs. 21.3 Crore in FY 2025-26, up from Rs. 18.2 Crore in FY 2024-25. The Company continued to invest aggressively in brand building and market expansion during the year.

Metric	FY 2025-26 Rs Crore	FY 2024-25 Rs Crore	Growth
Revenue from Operations	21.3	18.2	+17%
Domestic Revenue	13.8	11.8	+17%
Export Revenue	7.2	6.4	+12%
Export Share of Revenue	34%	35%	-

The Company received a capital infusion of Rs. 350 Crore during the year, as part of a strategic group restructuring emerging as the intermediate holding company for Cocoblu Retail Limited, which was completed in April 2026.

BUSINESS VERTICAL 2

ELECTRIC VEHICLE

The Indian Electric Vehicle Industry

Indias electric vehicle industry sustained its growth momentum in FY2025-26, with EV sales crossing 2.5 million units (25,50,865 units, per Vahan-based industry data) for the first time a 25% year-on-year increase over the 2.03 million units sold in FY2024-25. Growth was broad-based, with all major segments posting double-digit gains even as a September 2025 GST 2.0 reform reduced ICE vehicle prices and widened the cost gap EVs had relied on.

The industrys shift from a subsidy-driven market to one built on scale, industry readiness and regulatory maturity continued through the year, in line with NITI Aayogs blueprint for a 30% EV share by 2030. Segment-wise:

- Electric Two-Wheelers (E-2Ws): remained the largest segment with 14.72 lakh units sold, up 22% year-on-year, though its share of total EV sales eased slightly to 57.9% (from 59.4% in FY2024-25) as other segments scaled faster.

- Electric Three-Wheelers (E-3Ws): total segment sales of about 8.04 lakh units, comprising 4.78 lakh e-rickshaws (18.8% share of total EV sales, down from 23.2%), 86,466 e-carts, and a standout L5 passenger e-3W category that grew 76% year-on-year to reach 9.4% of total EV sales.

- Electric Four-Wheelers (E-4Ws): the fastest-growing major segment, with sales of 2.23 lakh units, up 90% year-on-year, nearly doubling its share of total EV sales · led by new model launches from Tata Motors, Mahindra Electric and JSW MG Motor.

- Electric Commercial Vehicles/Goods Carriers: still a small base but scaling fastest of all, with sales up over 120% year-on-year on the back of demand for e-cargo and e-goods carriers.

Vehicle Category-wise EV Sales India - FY24-25 vs FY25-26

(Charts display data visually: FY24-25 Total 20,37,831 Units; FY25-26 Total 25,50,865 Units. Segments include e-2W, e-Rickshaw, e-3W Pax (L5M), e-4W, e-Cart, e-Goods Carrier, Others)

Policy and Regulatory Landscape

- PM E-DRIVE Scheme: continued through FY2025-26 as the successor to FAME II, supporting a broader range of EVs, charging infrastructure and testing facilities.

- GST 2.0 Reform: effective end-September 2025, this reduced ICE vehicle prices substantially, widening the price differential that had favoured EVs · a headwind the industry absorbed while still posting 25% overall growth.

- PLI Schemes: continued support for local manufacturing of Advanced Chemistry Cell (ACC) batteries and auto components, reducing import dependency.

- Charging Infrastructure Development: continued government push to expand charging plazas and public charging infrastructure.

- Reduced import duties for global players investing in local EV manufacturing.

Opportunities and Challenges

- Opportunities: rising Tier-2/Tier-3 city adoption, battery technology localisation and PLI-backed manufacturing, and electrification of commercial fleets (e-rickshaws, e-cargo, e-buses), which continued to be the fastest-scaling segment in FY2025-26.

- Challenges: a narrower cost advantage over ICE vehicles following the GST 2.0 reform, charging infrastructure still inadequate outside metros (fuelling "range anxiety"), and supply-chain dependence on imported critical minerals for batteries.

Overview of the Business

Revolt Intellicorp Private Limited ("Revolt"), a wholly owned subsidiary of RattanIndia Enterprises Limited, operates under the Revolt Motors brand and is a leading player in Indias electric motorcycle sector.

Revolts motorcycles are built around a differentiated technology stack — 3.24 kWh lithium-ion batteries, regenerative braking, smart riding modes, mobile-based controls with 4G connectivity and over-the-air (OTA) updates — combining affordability with a low cost of ownership relative to petrol motorcycles. With a network of over 200 dealerships across India and an emerging presence in Nepal and Sri Lanka, Revolt targets the worlds largest two-wheeler market. During the year, the Company appointed internationally acclaimed cricketer Hardik Pandya as its Brand Ambassador, reinforcing the brands positioning among Indias youth and accelerating customer outreach. The Company also strengthened its leadership team with the appointment of Mr. Roy Kurian as President bringing extensive automotive industry experience to drive the next phase of growth.

Business Highlights & Corporate Milestones

1. Expanding Pan-India Dealership Presence

Expanded dealership network to 221 dealerships covering 202 cities across 24 States and Union Territories, strengthening Revolts pan-India presence.

2. Leveraging PM E-DRIVE for EV Adoption

Continued participation under the PM E-DRIVE Scheme, enabling customers to benefit from Government incentives for electric motorcycles.

3. Strengthening Brand Engagement

The Company strengthened its engagement with younger consumers through its Formula 4 India sponsorship and the appointment of Hardik Pandya as Brand Ambassador, further enhancing brand visibility and reinforcing its performance-oriented positioning.

4. Expanding International Presence

The Company further strengthened its presence in Sri Lanka through its participation in the Colombo Motor Show 2025. This initiative supports the Companys broader South Asian expansion strategy while reinforcing its commitment to expanding its portfolio of affordable and sustainable mobility solutions.

5. Recognition of Dealership Excellence

The Company was recognised as "Franchisor of the Year – Electric Vehicle" at the 21st National Franchise Excellence Awards, reflecting the strength of its dealership-led growth model and expanding retail reach.

6. Quality and Operational Excellence

The Company achieved ISO 9001:2015 certification, reaffirming its commitment to globally recognised quality standards across product development, manufacturing, supply chain and customer service.

7. Growing Sustainable Mobility Impact

The Revolt rider community surpassed 72 crore electric kilometres, estimated to have avoided more than 93 lakh litres of petrol consumption and generated rider savings of over Rs 89 crore, demonstrating the economic and environmental impact of EV adoption.

8. Production Milestone

The Company rolled out its 50,000th electric motorcycle from its Manesar facility, marking a significant production milestone and reflecting growing EV adoption. The Company remains focused on expanding capacity, dealership coverage and its product portfolio.

Strategy for Growth

- Manufacturing Scale-Up: Revolt plans to ramp up production capacity in the upcoming years at its Manesar, Haryana facility, aiming to meet rising domestic and international demand while ensuring supply chain efficiency.

- Geographic Expansion: The Company plans to expand its dealership network across India, with a focus on Tier-I and Tier-II cities, while strengthening customer reach and service capabilities. Internationally, it aims to enter new markets beyond Nepal and Sri Lanka, supported by a scalable distribution network and an expanding portfolio of affordable, sustainable mobility solutions.

- Brand Building & Customer Experience: The Company will continue investing in brand building, digital engagement, customer experience, and strategic partnerships to strengthen customer loyalty and accelerate EV adoption across India.

- Product Line Diversification: Continuing to expand its portfolio to cater to a diverse range of consumer segments, from urban commuters to performance seekers.

- Government Scheme Utilisation: Continuing to leverage subsidies from the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme to reduce consumer costs and boost adoption.

BUSINESS VERTICAL 3

DRONES

The Groups Drone Business is carried out through its drone-focused subsidiaries, which are engaged in the design, development, manufacturing, system integration, training and deployment of indigenous Unmanned Aerial Systems (UAS) and related aerial intelligence solutions. The business serves defence, government, public sector, enterprise and commercial customers across multiple application areas including surveillance, mapping, industrial inspection, infrastructure monitoring, agriculture, homeland security and drone skilling.

During FY 2025-26, the Drone Business continued to strengthen its technology platform, manufacturing capabilities and customer engagement while expanding its presence across strategic and commercial markets. The business remained focused on developing indigenous technologies aligned with the Government of Indias Atmanirbhar Bharat and Make in India initiatives, while enhancing operational capabilities to support increasing customer requirements.

The Group continued to invest in engineering, product development, manufacturing infrastructure, quality systems and skilled manpower to build a scalable operating platform capable of supporting future growth. In addition to proprietary drone platforms, the business expanded its portfolio through system integration, value-added services, drone pilot training, consultancy, local collaborations, technology partnerships and lifecycle support, creating multiple revenue streams and strengthening customer relationships.

Drone Business Overview

FY 2025-26 witnessed continued growth in the global UAS industry, with recent geopolitical conflicts, including the Russia-Ukraine war and Middle East tensions, reinforcing the strategic importance of drones, loitering munitions and counter-drone technologies. In India, favourable policy initiatives such as Atmanirbhar Bharat, Make in India, the Drone Rules, PLI Scheme and DigitalSky reforms continued to accelerate indigenous drone manufacturing. The operational success of Operation Sindoor further highlighted the role of indigenous unmanned systems in defence preparedness, while the Governments vision of making India a global drone manufacturing hub by 2030, supported by iDEX and increasing defence procurement, provides strong long-term industry momentum.

The changing global security environment and prolonged conflicts have significantly accelerated the adoption of drones, Counter-UAS and autonomous systems as critical components of modern warfare. The conflicts in Russia-Ukraine, Israel-Iran/Middle East, Armenia-Azerbaijan and India-Pakistan have demonstrated the effectiveness of drones for surveillance, precision operations, intelligence gathering and tactical missions, while also highlighting the need for large-scale, cost-effective and rapidly deployable systems.

These developments have reinforced the strategic importance of indigenous drone capabilities for countries seeking to reduce dependence on imported defence equipment. The Ukraine conflict, in particular, has demonstrated that drones are increasingly being deployed in large numbers, resulting in sustained demand for affordable and rapidly replaceable platforms. At the same time, geopolitical tensions and disruptions to global supply chains have exposed vulnerabilities associated with dependence on a limited number of international suppliers for critical defence technologies.

For India, these developments have strengthened the Governments focus on Make-in-India, Atmanirbhar Bharat and defence indigenisation. Restrictions on drone imports, increasing preference for Indian manufacturers in defence procurement and greater emphasis on indigenous content have created a favourable environment for domestic drone companies. The Armed Forces are increasingly seeking battle-proven, technologically advanced and locally supported UAV and Counter-UAS solutions, while faster procurement mechanisms are enabling quicker induction of critical technologies.

As a result, Indian drone companies are benefiting from a combination of rising defence demand, import substitution, supply-chain resilience requirements and government support for indigenous manufacturing. The convergence of these factors provides a strong structural opportunity for Indian drone manufacturers to develop scalable platforms, build domestic capabilities and subsequently establish themselves as competitive suppliers in international markets.

FY 2025-26 Financial Highlights

During the year, the Drone Business recorded continued commercial progress supported by higher customer engagements, improved project execution and expansion of its diversified operating model.

Combined Segment Highlights

Particulars	Standalone Audited Fy26 Subsidiary I	Standalone Audited Fy26 Subsidiary II
Revenue from Operations	Rs 23.42 Crore	Rs 8.13 Crore
EBITDA	Rs 1.82 Crore	Rs (1.18) Crore
Profit After Tax (PAT)	Rs 1.46 Crore	Rs 0.98 Crore

The above represents the operational performance of the Groups Drone Business and should be read together with the Consolidated Financial Statements of the Company.

Key Business Achievements

The Drone Business continued to make steady progress during FY 2025-26 through enhanced commercial execution and operational expansion.

Major achievements during the year included:

- Successful delivery of multi crore order of Specialised Surveillance Drones to Karnataka State Police Department

- Successful completion of high value order of conducting training programme of 500+ students training sponsored by social welfare department

- Pilot project completion and handover of the specified integrated company product with partner product developed for DRDO project, for potential future revenue generating capabilities

- Expansion of customer engagements across defence, government and enterprise sectors.

- Successful execution of strategic projects and commercial deployments.

- Participation in multiple defence and government procurement programmes and technology demonstrations.

- Growth in proprietary drone solutions, system integration and allied services.

- Expansion of RPTO operations and drone skill development initiatives.

- Strengthening of manufacturing capabilities and operational infrastructure.

- Increased participation in pilot projects, proof-of-concept deployments and technology evaluations.

- Progress in Technology Transfer (ToT) initiatives and strategic collaborations.

- Continued investments in engineering, software development and indigenous technology.

Technology & Product Development

During FY 2025-26, the Companys Drone Business strengthened its homeland security presence by supplying indigenous surveillance drones to the Government of Karnataka and the Karnataka Police. The Company secured an order for ~ 60+ units of its indigenously developed "Tavas" micro surveillance drone, along with deployment of other platforms including Nimble-1 and NS01.

Designed for surveillance and tactical operations, Tavas features a compact foldable design, modular payload capability, LIDAR-based obstacle avoidance and onboard intelligence. This drone comes loaded with advanced functionalities such as a 10x zoom camera, comprehensive 6-side lidar for obstacle avoidance, day and night surveillance capabilities, and AI-driven solutions for crowd detection, vehicle recognition, foreign object identification, and number plate reading. The Company also provided operator training and technical support, reinforcing its capability to deliver indigenous drone solutions for law enforcement and public safety applications.

Innovation continued to remain central to the Groups drone business strategy.

During the year, continued investments were made towards:

- Development and enhancement of indigenous drone platforms.

- Mission-specific payload integration.

- AI-enabled applications and software solutions.

- Mission planning and ground control systems.

- Flight testing, validation and product certification.

- Customer-specific engineering and product customization.

Defence & Government Business

Indias Defence budget has increased from Rs 2.53 lakh crore in 2013-14 to Rs 7.85 lakh crore in 2026-27, while indigenous Defence production has risen from Rs 46429 crore in 2014-15 to Rs 1.78 lakh crore in 2025-26. Defence exports have surged from Rs 686 crore in 2013-14 to a record Rs 38,424 crore in 2025-26, reaching over 80 countries. India is the worlds 5th biggest defence market and the second biggest importer of defence equipment.

Drone imports into India are banned in completely assembled, Semi-Knocked Down (SKD) and Completely Knocked Down (CKD) forms, creating a significant opportunity for local manufacturing for both Indian and export markets and supporting the Government of Indias (GOI) strategic objective of reducing external dependency in defence.

The prolonged conflicts in Ukraine, Iran-Israel/Middle East, Armenia-Azerbaijan and India-Pakistan have accelerated the shift towards non-contact warfare, with drones and counter-drones emerging as critical technologies for future warfare. Following Operation Sindoor in 2025, the GOI approved capital acquisition proposals worth $5.385 billion for new defence procurement, indicating a clear and urgent demand for advanced, battle-proven UAS, Counter-UAS and autonomy capabilities.

The GOI has also significantly enhanced the financial and operational powers of military field commanders, while Fast Track Procurement (FTP) budgets for FY26-27 have increased substantially compared with previous years. The Indian Armed Forces are increasingly seeking the "best in the world" and "battle-proven" technologies, with market entry expected to be aligned with the Make-in-India initiative.

Defence procurement is largely governed by the Defence Acquisition Procedure (DAP), the master framework guiding tenders floated by various agencies under the Ministry of Defence (MoD). Recent guidelines require international players entering the Indian market to have an offset Indian partner, with approximately 60% of the BOM (Bill of Material) covered by Indian content and Chinese components avoided, including components from countries sharing a land border with India. The Indian partner is responsible for supporting Make-in-India objectives and component indigenisation.

Increasingly, tenders are being issued under "Buy Indian" categories, restricting participation by international OEMs and giving priority to local Indian OEMs. This combination of rising defence spending, localisation requirements, fast-track procurement and increasing demand for UAS and Counter-UAS capabilities presents a significant opportunity for Indian manufacturing and strategic partnerships.

NeoSky and its subsidiary are in the drone business for the last 10 years and we have built the necessary tech expertise, customer connects, technology, partnerships over the last decade which helps us in deep understanding of the real needs in the battlefield. NeoSky has supplied Drones and Counter Drone solutions to the Indian Army, BSF, CRPF, Railway police, State police, Forests, FICCI & educational institutes.

A few key differentiators for group in the Defence space:

1. Technical capabilities:

a. Drone & Anti-Drone solutions which are battle ready. This includes Surveillance / ISR, Optical Fiber Cable Drones, Cargo Drones, Weaponized drones, High altitude drones, Kamikaze drones, LMs (Loitering Munitions) , Room intervention drones, Anti-Drones (Soft kill / Hard kill).

2. Defence license (DPllT).

a. Defence license for all kinds of Drones for defence purpose. One of the very few companies to have this license, there is a huge lead time to get this license. This license is mandatory to even receive any tender from army.

3. All-round capabilities:

a. One of the select few companies to have received the Indian Army roadmap for drones and anti- drones.

b. One of the few companies receiving RFIs (Request for Information) / RFPs (Request for Procurement) as part of the FTP for FY26-27. Only an elite group of players get the army road map / RFI / RFP, this is based on the past credentials & future potential.

c. Working closely with the eco-system in India & abroad with for Drones, Counter Drones. Also working with MoD (Ministry of Defence) & ADB (Army Design Bureau) on challenges like iDEX.

d. ISO Certified manufacturing (ISO 9001-2015, 9100D, 45001-2018, 27001- 2022, along with Drone testing facility in-house

e. Actively engaging with the armed forces to understand the challenges and explore solutions.

f. DGCA Certified drone training center with a 10-year license. This helps in skilling armed forces, deliver equipment training, post sales services and setting up of CoE (Centre of Excellence) for the armed forces.

g. A capable team including Ex-Armed forced officials, CTO from Aerospace (Boeing, HAL).

h. NeoSky contracts as a principal manufacturer and supplier, not as an agent or intermediary, and has no history of blacklisting, debarment or integrity-pact breach with the MoD or any procuring agency. Indian defence procurement prohibits the use of agents.

The Indian defence procurement landscape is increasingly moving towards fewer, credible and scalable suppliers capable of delivering technologically advanced, reliable and battle-proven solutions at scale. With the growing importance of indigenous manufacturing, faster procurement cycles and the need for assured supply and lifecycle support, the Armed Forces are likely to increasingly partner with a select group of established defence companies that demonstrate strong financial capability, technical expertise, regulatory compliance, manufacturing capacity and proven execution track record. This trend is expected to favour companies that can offer end-to-end solutions, sustained production capacity, indigenous content and long-term maintenance and support, creating higher entry barriers for smaller or less established players.

RPTO & Skill Development

The Group continued to support Indias drone ecosystem through its DGCA-approved Remote Pilot Training Organisation (RPTO).

During the year, the RPTO conducted Remote Pilot Certification Programmes, institutional and corporate training, government-sponsored skill development initiatives, drone survey and mapping programmes, agricultural drone training and specialized technical courses.

During FY 2025-26, the Companys DGCA-approved Remote Pilot Training Organisation (RPTO) successfully conducted drone pilot training programmes for the Department of Social Welfare, Government of Karnataka, benefiting more than 500 students. The initiative focused on developing certified drone pilots and enhancing employability through hands-on training, in line with the Governments skill development objectives. This programme underscores the Companys commitment to strengthening Indias drone ecosystem by promoting technical education, workforce development and industry-ready skills in emerging technologies.

Training Highlights

- Total Training Batches: in the range of 50-100

- Certified Remote Pilots: Close to 1000 students

- Government-sponsored Programmes /Institutional Programmes: 10+

The RPTO continues to contribute towards the development of skilled drone professionals while strengthening the Groups recurring service revenue base.

Strategic Partnerships & Technology Transfer

The Group continued to pursue strategic collaborations aimed at strengthening its technology capabilities and expanding its product portfolio.

Key initiatives during the year included:

- Progress in Technology Transfer (ToT) discussions with international technology partners.

- Strategic collaborations with domestic industry participants.

- Product localization initiatives.

- Expansion of technology partnerships.

- Joint development and system integration opportunities.

- Development of Centers of Excellence (CoEs) and drone laboratories.

These initiatives are expected to enhance technology capabilities, broaden market access and support long-term business growth.

Export Opportunity for Indian Drone Companies

Global demand for UAVs, surveillance drones, Counter-UAS and autonomous systems is increasing rapidly, driven by evolving defence requirements and the growing use of drones in modern conflicts. Indian manufacturers can address opportunities across defence, homeland security, agriculture, infrastructure inspection, mining and surveying, with the strongest potential in defence and surveillance applications.

Key export products include tactical and surveillance UAVs, VTOL systems, long-endurance drones, maritime and border-surveillance drones, agricultural drones and specialised industrial UAVs. Potential markets include Africa, the Middle East, Southeast Asia and Latin America, where customers increasingly seek cost-effective, reliable and proven drone solutions.

Indias competitive advantages include cost-efficient engineering, a growing technology ecosystem, manufacturing capabilities and the ability to offer an alternative supply chain to customers seeking diversification from traditional Western and Chinese suppliers. Indian companies can accelerate market entry through partnerships with established local entities for distribution, system integration, maintenance and after-sales support.

Exports must comply with Indias strategic trade-control framework. Depending on specifications and end use, UAVs may fall under SCOMET controls, requiring appropriate classification and export authorisation. DGFT has also introduced the General Authorisation for Export of Drones (GAED) for eligible exports, facilitating compliant international sales.

Overall, increasing global demand, Indias cost advantage, indigenous manufacturing capabilities and geopolitical demand for diversified supply chains create a significant opportunity for Indian drone manufacturers to establish a globally competitive finished-drone export business, particularly in defence, surveillance, Counter-UAS and specialised industrial applications.

The combination of indigenous manufacturing capabilities, increasing defence adoption and global demand for cost-effective and battle-proven drone solutions opens a significant opportunity for the Company to expand beyond the domestic market. Indias growing acceptance as a reliable defence manufacturing base, together with the need for diversified global supply chains, provides the Company with an opportunity to establish international partnerships and develop a scalable export business for its finished UAV platforms.

This creates a potential pathway for the Company to leverage its domestic capabilities and customer validation to address growing demand across defence, surveillance and specialised drone applications in overseas markets.

Outlook

The Board believes that the Indian drone industry continues to offer significant long-term opportunities, supported by favourable government policies, increasing defence modernization, expanding commercial adoption and growing emphasis on indigenous technology development.

The Companys strategic focus is firmly aligned with securing high-value defence contracts and expanding its presence in the defence sector. It is actively investing in the development of advanced, defence-oriented solutions and technologies that address the evolving requirements of the armed forces and defence ecosystem. Through continuous innovation, capability enhancement, and strategic partnerships, the Company aims to strengthen its position as a trusted partner in delivering mission-critical defence solutions and winning large-scale defence projects.

Going forward, the Groups Drone Business will continue to focus on strengthening its technology platform, expanding manufacturing capabilities, enhancing operational efficiencies, increasing customer engagement and broadening its product and service offerings. The business will also continue to pursue strategic partnerships, Technology Transfer initiatives and innovation-led growth while maintaining disciplined execution, prudent financial management and strong governance practices.

Human Resources

At RattanIndia Enterprises, our employees are the cornerstone of our success. The Company believes that a skilled, motivated and diverse workforce is fundamental to driving innovation, operational excellence and sustainable long-term growth across its businesses.

During FY 2025-26, the Company continued to strengthen its people practices by fostering a culture of learning, collaboration and performance. Structured induction programmes were conducted to facilitate the seamless integration of new employees, while continuous learning and development initiatives enabled employees to enhance their functional, technical and leadership capabilities. The Company also encouraged cross-functional collaboration and knowledge sharing to build a future-ready workforce capable of adapting to an evolving business environment.

The Companys performance management framework is designed to align individual goals with organisational objectives through a transparent and merit-based evaluation process. Regular performance reviews, constructive feedback and employee development initiatives support career progression, recognise high performance and promote a culture of accountability and continuous improvement.

RattanIndia Enterprises remains committed to providing a safe, inclusive and engaging workplace that values diversity, equal opportunity and employee well-being. The Company continues to invest in initiatives that strengthen employee engagement, enhance organisational capability and attract, develop and retain high-quality talent.

The industrial relations climate across the organisation remained cordial and harmonious throughout the year, reflecting the Companys continued focus on fostering a positive and collaborative work environment.

Internal Control Systems

The Company has established a robust internal control framework commensurate with the nature, scale and complexity of its operations. The framework is designed to ensure operational efficiency, reliability of financial reporting, safeguarding of assets and compliance with applicable laws, regulations, policies and procedures.

The Company has appropriate systems and processes in place to monitor compliance across its businesses and functions. Internal controls are periodically reviewed and assessed to evaluate their adequacy and effectiveness, and necessary improvements are implemented to address evolving business and regulatory requirements.

The Company continuously reviews and strengthens its systems, processes and controls in line with changing business needs and industry practices, thereby promoting accountability, transparency and sound corporate governance.

Details of Significant Changes in Financial Ratios

During the Year under review, there were the following changes in Key Financial Ratios on a Consolidated basis:

Particulars	Numerator/ Denominator	31 March 2026	31 March 2025	Variance	Reason for Variance
Current ratio (in times)*	Current assets/ Current liabilities			NA
Debt - equity ratio (in times)	Total debt/ Shareholders equity	1.38	0.96	44.15%	Due to increase in borrowings
Debt service coverage ratio (in times)	Earning available for debt service/ Debt service	(1.09)	0.49	-322.30%	Due to increase in borrowings
Inventory turnover ratio (in times)	Cost of goods sold/ Average inventory	6.39	6.22	2.73%	Due to increase in cost of goods sold
Return on equity (ROE in percentage)	Net profits/ (loss) after taxes/ Average shareholders equity	-19.68%	9.17%	-314.63%	Increase in losses due to decrease in marked to market gain.
Trade receivables turnover ratio (in times)	Revenue/ Average trade receivables	128.71	140.94	-8.68%	Due to increase in trade receivable
Trade payable turnover ratio (in times)	Purchase of services and other expenses/ Average trade payables	8.54	8.92	-4.29%	Due to increase in trade payable
Net capital turnover ratio (in times) *	Revenue/ Working capital	NA	NA	NA	NA
Net Profit ratio (in percentage)	Net profit/ (loss)/ Revenue	-2.21%	1.18%	-287.20%	Increase in losses due to decrease in marked to market gain.
Return on capital employed (ROCE in percentage)	Earning before interest and tax/ Capital employed	-5.60%	15.37%	-136.43%

- The Company does not classify its assets and liabilities into current and non-current categories in accordance with Ind AS 1; accordingly, this ratio is not applicable.