Rolcon Engineering Company Ltd Management Discussions

Pursuant to Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis Report covering business performance and outlook (within limits set by Companys competitive position) is given below:

A. INDUSTRY STRUCTURE AND DEVELOPMENT

Global Economy

According to World Economic Outlook, global growth for the year has been resilient but is also projected to be moderate. Furthermore, Global GDP growth is projected to ease from 3.2% in 2025 to 2.9% in 2026 and then strengthen slightly to 3.1% in 2027.

Increased trade barriers and policy uncertainty contribute to a broad-based growth slowdown, mainly with regard to trade relations in most of the worlds economies. Tariffs affect demand and continue to weigh on trade volumes as announced tariffs come into full effect.

While baseline global growth is holding around 3%, the recent surge in oil prices-driven by Middle East tensions and potential supply disruptions-has reintroduced inflationary pressures just as central banks were nearing the end of their tightening cycles. The depreciation of the Indian Rupee by another 5.5% further added to procurement costs. Consequently, the global economy is navigating a narrow path characterized by modest growth, sticky inflation, and heightened vulnerability to external shocks, with energy markets and geopolitical developments emerging as the key variables to watch.

While headline inflation may continue for some time, it is projected to stabilize by 2027 in almost all major economies.

Industrial commodities such as metals remain range-bound but sensitive to Chinas uneven recovery and global manufacturing demand, whereas agricultural prices are seeing intermittent spikes due to climate disruptions and supply chain constraints. In the long run, the commodity cycle is likely to remain structurally firm rather than sharply inflationary, supported by energy transition investments. As a result, while near-term volatility will persist.

Indian Economy

According to CRISILs latest outlook, Indias economy continues to demonstrate resilience and strong growth momentum. India is expected to remain the fastest growing major economy, with GDP growth at 7.1% in FY27, following a 7.6% growth in FY26. This is mainly supported by robust demand both in the domestic and international markets.

FY 2026 was a challenging year due to heightened global trade uncertainty and the imposition of high, penal tariffs; however, the Indian Government responded by shifting the focus to advance key measures such as GST rationalization, accelerated deregulation, and further simplification of compliance requirements across sectors. As per IMF in FY 2026 the Indian economy is estimated to grow by 7.6 percent compared to 7.1 percent in FY 2025. Despite global headwinds, including trade uncertainties, private consumption and government capex remain important drivers for sustained momentum.

KPMGs analysis similarly underscores steady growth prospects, underpinned by strong domestic demand, infrastructure development, and supportive government initiatives, policies and regulations.

Industrial & Engineering Market

Government capital expenditure remained elevated, supported by sustained investments in transport, logistics, power transmission, renewable energy, and urban development.

The second half of the year saw further improvement in project execution across highways, rail corridors, airports, and renewable energy initiatives, reinforcing Indias long-term growth trajectory. These continued investments, along with manufacturing incentives, supply chain localization, and digital transformation across industries, strengthened the medium-term outlook for domestic demand and industrial activity.

Further, FY 2027 is expected to be a year of adjustment, during which domestic demand and investment are likely to strengthen as households and firms adapt to ongoing changes in the economy. Economic policies are expected to focus on supply stability and the creation of buffer resources. Domestic inflation is anticipated to moderate, while the recent rationalization of GST rates is expected to support demand by lowering the tax burden and improving price competitiveness.

The PLI scheme for Textiles is mainly designed to promote large-scale Investment and modernization in manufacturing infrastructure and engineering. Indias textile industry continues to be a key contributor to manufacturing, exports, and employment, supported by multiple structural and demand led growth drivers.

B. OPPORTUNITIES AND THREATS Opportunities

Massive public infrastructure spending and a rapid shift toward high-tech manufacturing with a proposed capital expenditure of 12.2trillion in union budget, providing high visibility for cement demand across several multi-year projects.

Indias domestic steel demand is estimated to grow by 8-10% in FY 2026-27.

The government power sector initiatives have been allocated heavy funds targeting many development and expansion. Increased funds have been allocated to green hydrogen, solar power, and green-energy corridors, digitalisation metering in line with the renewable energy target for 2030.

Threats

Slower Growth: Global GDP growth is projected to slow down in FY 2026-27 due to energy price volatility from geopolitical tension.

Trade Tensions: The imposition of tariffs by US and trade barriers is expected to negatively impact global trade and economic activity.

Geopolitical Risk: Geopolitical tensions and potential conflicts, particularly in regions like Middle East, pose significant risks to global stability and economic prospects.

Developing countries like India are particularly vulnerable due to their reliance on global trade, oil prices and Rupee stability.

The US economy is expected to slow down considerably, with lower GDP growth rate.

C. OUTLOOK

Your Company expects the near-to medium- term operating environment to continue to being influenced by structural growth drivers in the Indian economy. Ongoing investments in infrastructure development, energy transition, urbanization, digitalization and advanced manufacturing are expected to support demand The business environment, however, remains subject to uncertainties. Geopolitical developments, changes in trade and tariff regimes, commodity price volatility. Continued focus on localization, productivity, digitalization, innovation and sustainability is expected to support competitiveness and customer value delivery. Your Company will continue to monitor macroeconomic conditions, policy developments and sector trends while maintaining disciplined operational execution. The Company has firm belief that to achieve and sustain the desired growth, constant focus on quality of the product is required and same can be transferred to shareholders. The following area are where company shall continue to focus:

Quality Improvement.

Atomisation of production process.

To Sustain the EBITDA and Operating margin levels.

Foray in new segment for the existing product.

More Focus on Marketing all over the globe along with domestic footprint.

Increase Export sales.

D. D I S C U S S I O N O N F I N A N C I A L PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Highlights of the Companys performance is provided below:

Turnover drop by 12.52% and stood at 5098.33 Lakh Show steady growth (YoY).

PBT declined by 15.09% from 436.01 Lakh to 370.20 Lakh

PAT decreased by 20.35% from 410.71 Lakh to 327.11 Lakh

EBITDA fall by 7% from 594.44 Lakh to 552.84 Lakh

Long term borrowing has gone down slightly from 5.22 Lakh to 5.20 Lakh

Operating cash flow (Consolidated) declined, now stands at 297.48 Lakh as against 327.75 Lakh in LY

Segment: The Company has identified its business of Manufacturing ‘Engineering Goods which is only ‘operating Segment as primary reportable segment.

E. KEY FINANCIAL RATIOS

Ratios	Units	FY 2025-26	FY 2024-25	% Change
Current Ratio	Times	1.96	1.94	0.90
Debt Equity Ratio	Times	0.46	0.49	(0.03)
Return on Equity/Net worth	%	11.91	17.46	(5.55)
Inventory Turnover	Times	4.65	5.41	(0.76)
Ratios	Units	FY 2025-26	FY 2024-25	% Change
Return on Capital Employed	%	12.89	17.14	(4.25)
Net Profit Ratio	%	6.42	7.05	(0.63)

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Controls has been a key focus area of your Company during the year, and your Company has tremendously requisite internal control system with its size and complexity. It also ensures that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles, along with the assets of the Company being adequately safeguarded against significant misuse or loss. In the opinion of the Management, the Company has adequate internal audit and control systems to ensure that all transactions are authorized, recorded and reported correctly. An independent internal audit function is an important element of the Companys internal control systems. This is supplemented through an extensive internal audit program and periodic review by the management and the Audit Committee. The Corporate Governance and compliance practices are well formed with internal and independent professional consultancy practice from time-to-time review and on periodical requisites amendments as and when require as per the Companies act 2013, and SEBI regulations.

G. RISKS AND CONCERNS

The Management maintains an active oversight of the risk and the effectiveness of the risk mitigation strategies and plans put in place by the Company specially, define and implement strategies to address uncertain or contingent risk as one of the key business risks facing the Company. The Company has appropriate mitigation plans to protect margins while continuing to grow and transform the business. While the Companys focus on long term strategic drivers and brand building continues.

Strategic and pricing interventions as well as cost and efficiency management programs were undertaken keeping in mind input costs, competitive positioning and product brand strategy. The Company has a robust risk mitigation plan to minimize identified risks through continuous monitoring and mitigating actions as may be required.

H. HUMAN RESOURCE AND INDUSTRIAL RELATIONS

Companys Human Resource development continues to be our top focused area, which will ensure intentions are converted to realities. During the year, the Company focused on strengthening its workforce through skill development, and continuous learning, particularly in areas related to digital technologies, process optimization, and customer-centric solutions with automation, and advanced production techniques. Internal processes were further streamlined to enhance coordination between technical, commercial, and support teams, enabling faster decision- making and improved responsiveness to customer requirements. Industrial Relations with employees remained cordial throughout the year under review. The Company extensively invests in training programs and learning modules. The Company consciously works and maintains harmonious industrial relations at its offices and plants. It believes and nurtures a culture of complete transparency through open communication channels with easy access. The Company further refines its policies in alignment with its organizational interest, benefiting everyone at the same time.

CAUTIONARY STATEMENT

The statement forming a part of this Report may contain certain forward-looking remarks with the meaning of applicable Laws and Regulations. Many factors could cause the actual results, performances, or achievements of the Company to be materially different from any future results, performances, or achievements. Significant factors that could make a difference to the Companys operations include domestic and international economic conditions, changes in government regulations, tax regime and other statutes.

For and on behalf of Board of Directors of

Rolcon Engineering Company Limited

Sd/-

Suresh H. Amin

Chairman & WTD

DIN: 00494016

Vallabh Vidyanagar

May 15, 2026.