Sattva Engineering Construction Ltd Management Discussions

Global & Indian Economic Outlook

The global economy demonstrated resilience during 2025 despite heightened trade policy uncertainty and geopolitical tensions. However, the outbreak of conflict in the Middle East has introduced new risks to global growth, inflation, and financial stability. Rising energy prices, supply chain disruptions, and elevated uncertainty are expected to weigh on economic activity across regions.

According to the International Monetary Fund (IMF), global growth is projected at 3.1% in 2026 and 3.2% in 2027 under investment activity, and resilient labour markets support growth prospects, geopolitical developments and commodity price volatility remain key risks to the outlook.

Inflation is expected to remain elevated in the near term due to energy-related pressures, while financial markets continue to monitor developments in global trade and geopolitical conditions. Policymakers across major economies are expected to focus on maintaining macroeconomic stability while supporting sustainable long-term growth. Its reference forecase. While technological innovation, continued

Global Economic Indicators

• 2025: Global GDP Growth 2.7% Global Inflation 4.1%

• 2026E: Global GDP Growth 3.1% Global Inflation 4.4%

• 2027E: Global GDP Growth 3.2% Global Inflation 3.7%

Key Global Themes

• Geopolitical uncertainty and energy market volatility

• Continued investment in technology and digital transformation

• Resilient labour markets across major economies

• Ongoing global supply chain realignment

• Moderating but persistent inflationary pressures

Sources: IMF - World Economic Outlook, April 2026

INDIAN ECONOMIC OUTLOOK

India remained the fastest-growing major economy in FY26, supported by strong domestic demand, stable macroeconomic fundamentals, and sustained policy support. Despite global trade disruptions and geopolitical uncertainties, economic growth accelerated to 7.6% in FY26 compared with 7.1% in FY25.

Growth was driven by robust performance across manufacturing and services sectors, supported by accommodative monetary conditions, moderating inflation, and continued public investment. Strong domestic consumption, infrastructure development, and formal employment generation continue to reinforce Indias long-term growth trajectory.

The World Bank projects Indias growth at 6.6% in FY27, reflecting temporary external headwinds arising from global geopolitical developments and higher energy prices. Over the medium term, favourable demographics, expanding urbanisation, rising incomes, and ongoing structural reforms are expected to sustain Indias position among the worlds fastest-growing major economies.

India Economic Indicators

• FY25 GDP Growth: 7.1%

• FY26 GDP Growth: 7.6%

• FY27E GDP Growth: 6.6%

Current Account Deficit (% of GDP)

• FY25: 1.3%

• FY26: 1.0%

• FY27E: 1.8%

General Government Fiscal Deficit (% of GDP)

• FY25: 7.7%

• FY26: 7.4%

• FY27E: 7.6%

Key Growth Drivers

• Strong domestic consumption and private demand

• Continued infrastructure and capital expenditure investments

• Expansion of manufacturing and services sectors

• Rising urbanisation and formalisation of the economy

• Supportive policy framework and structural reforms

India Outlook Highlights

• Fastest-growing major economy globally in FY26

• Inflation moderated significantly during FY26

• Formal employment creation remained strong

• Fiscal consolidation continued while supporting growth

• Long-term outlook supported by demographics and urbanization

Sources: World Bank - India Development Update, April 2026

GLOBAL WATER INFRASTRUCTURE INDUSTRY MARKET OVERVIEW

Water infrastructure has emerged as one of the most strategically critical and investment-intensive segments of the global infrastructure landscape. The United Nations estimates that approximately 2.2 billion people globally lack access to safely managed drinking water, while 3.5 billion people lack access to safely managed sanitation - deficits that have significant humanitarian, public health, and economic consequences. Against this backdrop, the global water and wastewater treatment market is experiencing robust growth, driven by the convergence of climate stress, population growth, urbanisation, and increasingly stringent environmental and public health regulations.

The global water infrastructure market - encompassing water supply, treatment, distribution, wastewater management, and related technology - was valued at approximately USD 1.0-1.1 trillion in 2024 and is projected to grow to USD 1.6-1.8 trillion by 2030, implying a CAGR of approximately 6.5-8.0%. Within this broader market, water and wastewater treatment infrastructure represents the fastest-growing segment, driven by the increasing inadequacy of existing systems, the demand for higher-quality treated water for industrial and potable use, and the global shift toward water recycling and circular water economy frameworks.

Source: UN Water Report 2023; Global Water Intelligence (GWI) Market Review 2024; World Bank Water Sector Strategy 2024; OECD Water Governance in the Next Decade 2024

Water Scarcity: The Defining Crisis of the 21st Century

The World Resources Institutes (WRI) Aqueduct Water Risk Atlas (2023) identifies 25 countries - representing approximately 25% of the global population - as experiencing extremely high water stress, with water withdrawals exceeding 80% of available supply. Climate change is materially exacerbating water stress across multiple geographies: rising temperatures increase evapotranspiration, alter precipitation patterns, accelerate glacial retreat, and intensify both flood and drought frequency. The World Bank estimates that by 2050, water scarcity could reduce GDP by as much as 6% in some regions of Africa and the Middle East, 2.5% in Central Asia, and 1.4% in East Asia and Pacific.

In this context, investment in water infrastructure is increasingly being framed not merely as a development expenditure, but as a climate adaptation imperative. Multilateral financing institutions - including the World Bank, ADB, and the Green Climate Fund - have prioritised water infrastructure as a core climate resilience investment, unlocking concessional financing streams that supplement government budgets. According to UN Waters 2023 report, total investment in the water sector needs to be tripled to achieve Sustainable Development Goal (SDG) 6 - Universal Access to Water and Sanitation by 2030 - representing an investment acceleration opportunity of significant magnitude for the global EPC and water technology industry.

Source: World Resources Institute Aqueduct Water Risk Atlas 2023; World Bank Group High and Dry Report; UN-Water GLAAS Report 2023; OECD Financing Water: Investing in Sustainable Growth

Desalination & Advanced Water Treatment

Desalination has transitioned from a high-cost, geographically limited technology to a rapidly scaling component of the global water supply equation. Global desalination capacity stood at approximately 115 million cubic metres per day (m³/day) as of 2024, with the Middle East, North Africa, and coastal Asia-Pacific regions accounting for the majority of installed capacity. The global desalination market is expected to reach USD 32 billion by 2030, driven by declining reverse osmosis (RO) membrane costs, improving energy efficiency, and growing freshwater deficits in coastal urban areas. Notably, the levelised cost of desalinated water has declined by approximately 50% over the past decade, driven by advances in membrane technology and energy recovery systems, making desalination economically competitive with long-distance water transfer projects in many geographies.

Beyond desalination, advanced water treatment technologies - including tertiary treatment for effluent reuse, zero-liquid discharge (ZLD) systems for industrial wastewater, membrane bioreactors (MBR), and UV/ozone disinfection - are experiencing strong adoption globally, driven by increasingly stringent environmental standards and the growing industrial demand for high-quality treated water for process applications and cooling systems.

Source: International Desalination Association (IDA) Annual Report 2024; Global Water Intelligence GWI DesalData 2024; World Bank Technology Note on Desalination 2023

INDIAS WATER CRISIS - THE STRUCTURAL DEMAND DRIVER

Indias water challenge is not a transient policy issue - it is a structural, deepening crisis that directly and durably underpins the long-term demand for water infrastructure and EPC services. The country is home to nearly 18% of the global population but possesses only approximately 4% of the worlds freshwater resources. Annual precipitation averages around 4,000 BCM (billion cubic metres), yet effective utilization remains at just 28% owing to significant losses through evapotranspiration, runoff, and insufficient storage and harvesting infrastructure.

Declining per capita water availability

Per capita water availability in India has declined sharply over the past seven decades - from 5,177 cubic metres in 1950 to just 1,544 cubic metres in 2011. Projections indicate a further decline to approximately 1,235 cubic metres by 2050. With per-capita annual water availability below 1,700 cubic metres defined internationally as a water-stressed condition, and below 1,000 cubic metres constituting scarcity, India is already firmly in water-stressed territory and is trending toward scarcity - underscoring the urgency of sustained investment in water distribution, treatment, and conservation infrastructure.

70%

Decline in per capita water availability in India between 1950 and 2010 - from 5,177 cubic metres to 1,544 cubic metres.

1,235 m³

Projected per capita water availability by 2050, approaching the internationally defined water scarcity threshold of 1,000 cubic metres.

Year	Per Capita Water Availability (m3)	Status
1950	5,177	Comfortable
2001	1,820	Approaching Stress
2011	1,544	Water Stressed
2025 (Projected)	1,465	Water Stressed
2050 (Projected)	1,235	Nearing Scarcity

(Source: Ministry of Jal Shakti; Indian Council for Agriculture Research (ICAR))

Rising water demand

Indias population is estimated to cross 1.44 billion by 2025 and approach 1.64 billion by 2050. This demographic trajectory, combined with rapid urbanization and industrial expansion, is creating a steep and sustained rise in water demand across all end-use segments. Total national water demand is estimated to grow from 710 BCM in 2010 to 843 BCM by 2025, and reach 1,180 BCM by 2050 - a 66% increase over four decades. The agricultural sector remains the dominant consumer, accounting for 78.5% of demand in 2010, though its share is projected to decline gradually as industrial and domestic needs grow at a faster pace. Per capita water availability in India has declined sharply over the past seven decades - from 5,177 cubic metres in 1950 to just 1,544 cubic metres in 2011. Projections indicate a further decline to approximately 1,235 cubic metres by 2050. With per-capita annual water availability below 1,700 cubic metres defined internationally as a water-stressed condition, and below 1,000 cubic metres constituting scarcity, India is already firmly in water-stressed territory and is trending toward scarcity - underscoring the urgency of sustained investment in water distribution, treatment, and conservation infrastructure.

Sector	Demand 2010 (BCM)	Demand 2025P (BCM)	Demand 2050P (BCM)
Irrigation	557 (78.5%)	611 (72.5%)	807 (68%)
Domestic	43 (6.1%)	62 (7.4%)	111 (9%)
Industrial	37 (5.2%)	67 (7.9%)	81 (7%)
Energy	19 (2.7%)	33 (3.9%)	70 (6%)
Other Uses	54 (7.6%)	70 (8.3%)	111 (10%)
Total	710	843	1,180

(Source: National Commission on Integrated Water Resources Development (NCIWRD))

Groundwater overexploitation

India is the worlds largest consumer of groundwater, accounting for approximately one- quarter of total global extraction - more than the combined extraction of China and the United States. Of this extracted groundwater, nearly 80% is consumed by irrigation alone, while only 8% is used for drinking purposes. Overextraction has resulted in rapid aquifer depletion across several key states. Punjab currently extracts groundwater at 166% of its replenishable rate, Rajasthan at 140%, and Haryana at 137% - trajectories that are clearly unsustainable. This overexploitation reinforces the critical importance of investing in surface water-based distribution systems, water treatment capacity, and efficient supply networks - precisely the infrastructure that EPC companies like Sattva Engineering are positioned to deliver.

(Source: Central Groundwater Board, 2017; World Bank)

WATER & WASTEWATER EPC MARKET IN INDIA

The Indian water and wastewater treatment market has been on a consistent upward trajectory, supported by a convergence of government-led demand, rapid urbanization, growing industrial water requirements, and tightening environmental compliance standards. The EPC model has firmly established itself as the dominant project delivery mechanism in this space, favoured for its single-point accountability, execution efficiency, and the risk transfer it offers project owners.

Market size and growth

The overall Indian water and wastewater treatment market expanded from USD 1.6 billion in 2021 to USD 2.1 billion in 2024, reflecting a CAGR of approximately 10.1%. The EPC-specific segment within this market grew from USD 1.4 billion to USD 1.9 billion over the same period, registering a slightly faster CAGR of 11.4% - reflecting the growing preference for EPC as the delivery mode for new water infrastructure projects.

Metric	2021	2022	2023	2024	CAGR (2021-24)
Total Water & WW Market (USD Bn)	1.6	1.7	1.9	2.1	10.1%
EPC - Water Treatment Projects (USD Bn)	1.4	1.5	1.7	1.9	11.4%

(Source: 6Wresearch; Dun & Bradstreet Information Services India Pvt. Ltd., Industry Report on EPC in Water and Wastewater Distribution Infrastructure in India, April 2024)

A particularly significant data point from the National Infrastructure Pipeline (NIP): of the 1,527 water treatment plant opportunities identified in the pipeline, approximately 1,419 - or 93% - are being executed on EPC mode. This near-complete adoption of EPC contracting for new water infrastructure projects is a clear signal of where the industry is heading, and speaks directly to the depth and durability of the opportunity for established EPC players.

93%

Share of water treatment plant projects in Indias National Infrastructure Pipeline being implemented on EPC mode, out of 1,527 identified opportunities.

Global water & wastewater treatment market

The global water and wastewater treatment industry was valued at approximately USD 347.9 billion in 2024 and is projected to reach USD 652.3 billion by 2034, reflecting a CAGR of 6.5%. Rapid urbanization, increasingly stringent environmental regulations, rising prevalence of waterborne diseases, and growing recognition of water as a strategic resource are collectively driving this expansion. The Asia-Pacific region represents the most dynamic growth pocket within this global market, with its segment expected to more than double from USD 125.6 billion in 2024 to USD 282.8 billion by 2034, at a CAGR of 8.5%. India, as the regions most populous emerging economy with the most active government-led water infrastructure programs, is among the key contributors to this regional growth.

(Source: Precedence Research; Cervicorn Consulting)

Government Initiatives Driving Demand

The government of India has committed to a generational transformation of the countrys water supply and sanitation infrastructure, underpinned by a series of flagship programs that together constitute one of the largest public-sector infrastructure investment cycles in this sector anywhere in the world. These programs are the primary demand engine for water EPC projects, and their continued execution is fundamental to the growth outlook for companies operating in this space.

Jal Jeevan Mission (JJM)

Launched in August 2019, the Jal Jeevan Mission is the single most significant structural demand catalyst for the water EPC sector. The missions goal is to provide Functional Household Tap Connections (FHTCs) to every rural household in India, starting from a base of just 3.23 crore households (17%) at inception. By February 2024, 14.24 crore households had been connected, representing coverage of approximately 74% of Indias 19.27 crore rural households. By October 2024, this figure had advanced further to 15.19 crore households, covering 78.58% of rural India.

The mission has been backed by a total earmarked outlay of USD 51 billion, channeled through state governments to fund water supply scheme construction and commissioning. The remaining gap between current coverage and the 100% target represents a substantial and clearly addressable pipeline of Water Supply Scheme (WSS) projects, of which EPC firms remain the primary delivery vehicles. The mission also emphasizes source sustainability through greywater management, water conservation measures, and rainwater harvesting - creating additional scope for EPC firms with capabilities in these adjacent areas.

(Source: Ministry of Jal Shakti; PIB Press Release - https://pib.gov.in/PressNoteDetails.aspxRs.NoteId=152025&ModuleId=3)

Rs. 51 Billion (USD) Total budget committed under the Jal Jeevan Mission to achieve universal rural household tap water connectivity.78.58% Rural household tap water coverage achieved as of October 2024, up from just 17% at the missions launch in 2019.

AMRUT 2.0

The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0, launched in October 2021 with a planned execution window through 2025-26, targets universal water supply and improved sanitation in all urban areas. The mission specifically focuses on reducing non-revenue water through SCADA (Supervisory Control And Data Acquisition) systems and smart metering, integrating circular economy practices in urban water use, and improving energy efficiency in water distribution infrastructure. For EPC companies with urban infrastructure capabilities, AMRUT 2.0 represents a meaningful and ongoing source of project flow, particularly for complex water supply improvement and underground sewerage schemes in mid-sized cities and towns.

Namami Gange and river rejuvenation programs

The Namami Gange Programme, aimed at integrated management of the Ganga river basin, has sanctioned 494 projects with a cumulative cost of approximately INR 39,625 crores as of January 2024. These projects involve the development of over 5,249 km of sewer network and the creation of 6,131 MLD of sewage treatment capacity. The programme is a clear demonstration of the scale of wastewater infrastructure investment being deployed in India, and EPC contractors serve as the primary execution partners across sewer network construction, sewage treatment plant commissioning, and related electromechanical works.

(Source: PIB Press Release -

https://pib. gov. in/PressReleaselframePage. aspxRs.PRID=2096022)

Other supporting initiatives

• National Water Mission (NWM): Focused on water conservation, minimizing wastage, and ensuring equitable distribution under the Ministry of Jal Shakti.

• Atal Bhujal Yojana: Targeting sustainable groundwater management in water-stressed regions across seven major states - Gujarat, Haryana,

Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, and Uttar Pradesh.

• Jal Shakti Abhiyan - Catch the Rain 2025: A community-level campaign for water conservation and rainwater harvesting across 148 districts.

• State-specific programs: Such as Mission Bhagiratha in Telangana (supplying piped water to 2.32 crore people across 20 lakh households) and the Surya Regional Water Supply Scheme in Maharashtra further supplement national programs with region-specific project pipelines.

• National Infrastructure Pipeline (NIP): Encompasses water infrastructure as a priority sector, supporting both greenfield and brownfield projects through central and state government funding as well as private participation.

THE EPC MODEL IN WATER INFRASTRUCTURE

Engineering, Procurement, and Construction (EPC) contracting has become the dominant delivery mechanism for water and wastewater infrastructure in India, as reflected by the 93% EPC adoption rate in the National Infrastructure Pipeline. The models appeal lies in its ability to transfer substantial project risk from the owner to the contractor, while providing a single point of accountability across design, procurement, and construction. For government clients executing complex, multi-village water supply schemes on compressed timelines and defined budgets, EPC represents the preferred and pragmatic choice.

Water distribution EPC services

In the water distribution segment, EPC contractors manage the full lifecycle of infrastructure development: from feasibility assessment and hydraulic modelling, through engineering design of pipelines, overhead storage tanks, underground reservoirs, and pumping stations, to material and equipment procurement, civil construction, electromechanical installation, and commissioning. Key project components include pressurized water supply networks, water intake structures, water treatment and filtration systems (incorporating coagulation, sedimentation, filtration, and disinfection stages), distribution pipeline networks, and smart metering integrations.

For rural projects executed under the Jal Jeevan Mission, the primary project type is the Combined Water Supply Scheme (CWSS) - a multi-village infrastructure linking habitations across a district to a centralized treatment and storage system. Tamil Nadu, the primary operating geography of Sattva Engineering, has one of the most active CWSS pipelines in the country, managed through the Tamil Nadu Water Supply and Drainage Board (TWAD Board).

Wastewater EPC services

The wastewater distribution segment is a rapidly growing vertical within the water EPC market. EPC contractors design and build sewer collection networks, sewage treatment plants using technologies such as activated sludge, Sequential Batch Reactors (SBR), and Membrane Bioreactor (MBR) systems, effluent treatment plants for industrial applications, and integrated storm water and drainage infrastructure. With Indias Liquid Waste Management Rules 2024 tightening regulatory requirements and the concept of Zero Liquid Discharge gaining momentum across industrial sectors, demand for technically capable wastewater EPC firms is accelerating.

Water Supply Schemes - the core revenue driver

For EPC companies active in the government-led segment, Water Supply Schemes (WSS) - comprising underground and overhead tank infrastructure, pump houses, and distribution pipeline networks - represent the primary revenue category. The water supply segment is estimated to account for 70-80% of total earnings for EPC firms in this infrastructure vertical. Sattva Engineerings positioning within this segment is directly aligned with the structural growth being driven by JJM, AMRUT 2.0, and Tamil Nadus own state-funded water supply investment programs.

70-80%

Estimated share of water supply scheme projects in the total earnings of EPC firms engaged in water infrastructure development in India.

Key Growth Drivers for the Water EPC Sector

Population growth and urbanization

Indias population is projected to surpass 1.5 billion by 2030. Rapid urbanization is a compounding factor - as cities expand, demand for treated, pressurized, and reliably distributed water grows non-linearly. Urban areas require sophisticated distribution infrastructure capable of handling peak loads, minimizing non-revenue water losses, and integrating real-time monitoring and control systems. This demand profile is considerably more complex than rural supply and commands higher engineering value per project.

Industrialization and process water demand

Indias industrial sector - spanning pharmaceuticals, textiles, chemicals, power generation, and food & beverage - accounts for 40-45% of the countrys total water consumption. The textile industry alone consumes an estimated 93 billion litres of water annually. As industrial activity scales and environmental compliance requirements tighten, demand for process water supply, effluent treatment, and wastewater recycling solutions will continue to grow alongside the government-funded infrastructure programs, creating a parallel private-sector demand stream for EPC operators.

Government regulations and infrastructure programs

The policy environment is unambiguously supportive. The Jal Jeevan Mission, AMRUT 2.0, Namami Gange, and the National Infrastructure Pipeline collectively constitute one of the most sustained public-sector infrastructure investment commitments in the water sector anywhere globally. The creation of the dedicated Jal Shakti Ministry in 2019, bringing all water-related agencies under a single institutional umbrella, has significantly improved policy coordination and project execution efficiency at the central level. State governments are co-investing substantially, and the increasing preference for EPC contracting across all program types ensures that the opportunity is channeled toward organized, capable contractors.

Technology and digital water management

The sector is undergoing a meaningful technological transition. IoT-based monitoring, AI-driven leak detection, SCADA systems, automated meter reading, and digital twins are progressively being integrated into water infrastructure - particularly in AMRUT 2.0- funded urban projects. Advances in membrane filtration, reverse osmosis, and nanotechnology are improving treatment economics and expanding the range of viable water sources. EPC companies that can incorporate these capabilities into their turnkey delivery are better positioned to win technically complex tenders and deliver higher- margin projects.

Climate change and adaptive water systems

Changing rainfall patterns, more prolonged droughts, and increasingly frequent extreme weather events are making Indias water crisis more acute and less predictable. These dynamics are pushing policymakers and utilities to invest in adaptive infrastructure - additional storage, desalination, decentralized treatment, and smart distribution. This adds a resilience-driven demand layer on top of the considerable baseline demand from population growth and urbanization, and further reinforces the long-term investment thesis for the sector.

Indias coastal states of Tamil Nadu and Gujarat are frontrunners in deploying desalination technology to bolster drinking water supply alongside conventional surface water sources. The global desalination market, valued at USD 25.68 billion in 2024, is projected to reach USD 49.80 billion by 2032 at a CAGR of 8.63%. Domestically, industries including power generation, oil refining, and specialty chemicals are increasingly pursuing Reuse, Recycle, and Zero Liquid Discharge (ZLD) models to improve water efficiency and meet environmental standards. As these trends deepen, demand for technically specialized EPC capabilities in desalination, ZLD, and advanced treatment is expected to expand meaningfully, creating additional growth avenues beyond the mainstream government-funded water supply programs.

Key Challenges

While the structural demand environment is broadly favorable, companies operating in the water EPC space must navigate a set of challenges that affect project execution timelines, margin sustainability, and working capital management.

• Working capital intensity: Government-funded EPC projects typically involve extended payment cycles. Disciplined receivables management and maintaining adequate liquidity are critical operational requirements in this sector.

• Raw material price volatility: Key input materials including HDPE pipes, ductile iron pipes, pumps, and electrical equipment are exposed to global commodity price fluctuations. In lump-sum EPC contracts, this risk falls on the contractor and can compress margins unless proactively managed through price escalation clauses or advance procurement.

• Project execution complexity: Water supply schemes in rural and semi-urban India often involve difficult terrain, scattered habitations, limited local infrastructure, and coordination across multiple gram panchayats and local bodies, adding complexity to execution timelines.

• Dependable source availability: In water-stressed geographies, identifying reliable, year-round raw water sources for new supply schemes can be technically and administratively challenging, adding uncertainty to project design and delivery timelines.

• Regulatory and approvals landscape: Environmental clearances, Right of Way approvals for pipeline corridors, and coordination with multiple state and local agencies can introduce timeline variability, particularly for large multi-district projects.

COMPETITIVE LANDSCAPE AND COMPANY POSITIONING

The water EPC market in India encompasses a range of players - from large national contractors and technology-intensive international firms to mid-sized regional specialists. For government-tendered projects, competition is primarily evaluated on technical capability, price competitiveness, execution track record, and financial capacity to handle project scale.

At the premium end of the market, technology-intensive firms such as VA Tech WABAG - with over a century of operating history, more than 125 proprietary technologies, and a presence in over 25 countries across four continents - represent the engineering-led tier. These firms are well-positioned for large, technically complex industrial and municipal treatment plant projects. However, the bulk of the JJM and AMRUT project pipeline consists of district-level and state-level water supply schemes where regional execution capability, local institutional relationships, and cost competitiveness are equally decisive. This is precisely the space where mid-sized regional EPC specialists can and do outcompete larger national players.

Sattva Engineerings concentrated presence in Tamil Nadu which is one of the most active states for water supply infrastructure investment in India, provides a clear competitive advantage.

Tamil Nadu continues to be one of Indias largest markets for Engineering, Procurement and Construction (EPC) in the water supply and sanitation sector. Opportunities are available across urban water supply, rural drinking water, sewerage, sewage treatment plants (STPs), water treatment plants (WTPs), transmission pipelines, pumping stations, and SCADA-based automation. There are projects worth around Rs..19,900 Crores are under pipeline which are different stages of approval.

Major EPC opportunities in Tamil Nadu

Sector	Typical EPC Scope	Key Executing Agency
Combined Water Supply Schemes (CWSS)	Intake wells, WTPs, transmission mains, reservoirs, pumping stations	TWAD Board
Underground Sewerage Schemes (UGSS)	Sewer networks, pumping stations, STPs	Municipal Corporations / CMWSSB
Urban Water Supply	Distribution networks, NRW reduction, reservoirs	CMWSSB & Urban Local Bodies
Rural Drinking Water	Village water supply schemes under Jal Jeevan Mission	TWAD Board
Climate-resilient projects	Water reuse, smart monitoring, SCADA	CMWSSB, ADB-funded projects

The Tamil Nadu Water Supply and Drainage Board (TWAD Board) oversees an extensive pipeline of Combined Water Supply Schemes across the states 32 districts, and the Jal Jeevan Mission has generated numerous new district-level projects. Sattvas familiarity with the local regulatory environment, procurement processes, terrain, and institutional stakeholders positions it well to sustain and grow its order book in this high-activity market.

BUSINESS OUTLOOK

Industry Outlook

Indias water and wastewater infrastructure sector continues to offer significant long-term growth opportunities, driven by:

• Rapid urbanization and industrialization

• Rising demand for sustainable water and sanitation infrastructure

• Increasing environmental and regulatory compliance requirements

• Continued government investments through programmes such as Jal Jeevan Mission (JJM), AMRUT 2.0, and various State Water Supply & Sewerage initiatives

Strategic Positioning

Sattva Engineering is well positioned to capitalize on these opportunities through its integrated EPC capabilities across:

• Water Supply Schemes (WSS)

• Underground Sewerage Systems (UGSS)

• Sewage Treatment Plants (STPs)

• Water Treatment Plants (WTPs)

• Operations & Maintenance (O&M)

• Odour Control Systems (OCS)

The Company continues to strengthen its presence in technology-driven treatment infrastructure while expanding its portfolio of long-term O&M contracts that provide recurring revenue visibility.

RATIO ANALYSIS:

Sr. No. Ratio	As at 31/03/26	As At 31/03/2025	Remarks
1 Current Ratio	1.90	1.31	Improved primarily due to higher current assets and a stronger liquidity position, reflecting better working capital management.
2 Debt-Equity Ratio	0.34	0.84	Declined significantly owing to repayment of borrowings and strengthening of the Companys net worth, resulting in a healthier capital structure.
3 Debt Service Coverage Ratio	0.52	0.37	Improved due to higher operating profitability and lower finance costs, enhancing the Companys debt servicing capacity.
4 Return on Equity (ROE)(%)	9.95%	13.14%	Marginal decline mainly attributable to an increase in shareholders equity following the IPO, while earnings continue to remain healthy.
5 Inventory Turnover Ratio	16.23	12.60	Improved as a result of efficient inventory utilization and faster consumption of project materials.
6 Trade receivables turnover ratio	3.47	3.38	Remained stable with a slight improvement, reflecting effective receivables management despite the nature of government project payment cycles.
7 Trade payables turnover ratio	5.66	4.71	Increased due to timely settlement of supplier obligations and efficient management of trade payables.
8 Net capital turnover ratio	2.27	4.91	Declined primarily due to higher working capital deployed to support growth in project execution and expansion of the order book.
9 Net profit ratio (%)	9.14%	8.42%	Owing to reduction in finance cost, Improvement in Net Profit.
10 Return on capital employed (ROCE) (%)	11.07%	11.48%	Remained broadly stable, reflecting consistent returns despite increased capital employed to support business growth.
11 Return on investments (%)	6.91%	6.15%	Improved due to higher income generated from Bank Deposits during the year.

Key Highlights

• Liquidity strengthened, as reflected in the improvement in the Current Ratio from 1.31 to 1.90.

• Leverage reduced significantly, with the Debt-Equity Ratio improving from 0.84 to 0.34, strengthening the Companys balance sheet.

• Operational efficiency improved, supported by higher Inventory Turnover and Net Profit Ratio.

• Return ratios remained stable, despite an increase in shareholders funds and capital employed following the IPO and ongoing business expansion.

• The decline in the Net Capital Turnover Ratio reflects higher working capital deployment to support execution of a growing order book and is consistent with the Companys expansion strategy.

Place: Chennai	For and on behalf of the Board of Directors
Date: 04.08.2026	Sattva Engineering Construction Limited
	Santhanam Seshadri	Rajagopal Sekar
	Whole-time Director	Whole-time Director
	(DIN:00161517)	(DIN:00207519)