Shashijit Infraprojects Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

The global economy remained resilient during the Financial Year 2025-26 despite persistent geopolitical tensions, elevated trade uncertainties and uneven inflationary pressures. Global economic activity continued to expand, although growth remained moderate across major economies. The economic environment was influenced by changing trade policies, evolving monetary conditions, geopolitical developments and fluctuations in commodity prices.

According to the International Monetary Fund (IMF), global growth was projected at around 3.4% in 2025, while growth was expected to moderate to approximately 3.1% in 2026. The outlook remained subject to significant uncertainty, particularly from geopolitical developments, trade fragmentation, financial market volatility and commodity price movements.

At the same time, inflationary pressures, although lower than the levels witnessed in earlier years, remained a key consideration for policymakers. Central banks continued to balance the objectives of controlling inflation while supporting economic activity.

Overall, the global economic outlook remained cautiously positive but uneven, with resilience supported by domestic demand and investment in several economies, while geopolitical tensions, trade-related uncertainties and financial conditions continued to pose downside risks.

INDIAN ECONOMY

The Indian economy demonstrated resilience and sustained growth during the Financial Year 2025-26, notwithstanding an evolving global economic environment characterised by geopolitical uncertainties, trade-related developments and financial market volatility. According to the Ministry of Statistics and Programme Implementation (MoSPI), Indias real Gross Domestic Product (GDP) is provisionally estimated to have grown by 7.7% during FY 2025-26, compared with 6.5% in FY 2024-25. Real GDP growth in the fourth quarter of FY 2025-26 was estimated at 7.8%.

Economic activity during the year remained broad-based, supported by domestic demand, investment and continued infrastructure development. Private Final Consumption Expenditure remained a significant driver of economic activity, with its share in GDP estimated at 61.5% in FY 2025-26, while Gross Fixed Capital Formation accounted for approximately 30.0% of GDP. The construction sector continued to benefit from sustained public capital expenditure and ongoing infrastructure activity.

The inflation environment also improved materially during the year. As highlighted in the Economic Survey 2025-26, retail inflation, measured by the Consumer Price Index (CPI), moderated significantly, with CPI inflation estimated at approximately 1.7% during FY 2025-26, supported particularly by easing food prices and favourable supply-side conditions.

Fiscal consolidation remained an important feature of Indias macroeconomic management. The Government continued to maintain a focus on fiscal prudence while prioritising capital expenditure and infrastructure development. The Economic Survey 2025-26 notes that the Central Government had targeted a fiscal deficit of 4.4% of GDP for FY 2025-26, while maintaining emphasis on the quality of public expenditure and capital investment.

Infrastructure development continued to provide an important foundation for economic activity. Sustained investments in roads, highways, logistics and other infrastructure, together with policy measures aimed at improving connectivity and reducing logistics costs, supported construction and investment activity during the year. The Economic Survey notes that the National Highway network and high-speed corridor infrastructure have expanded substantially over the past decade, with continued construction activity during FY 2025-26.

Overall, Indias economic fundamentals remained resilient during FY 2025-26, supported by domestic consumption, investment, infrastructure development, moderating inflation and continued policy focus on improving productivity and competitiveness. While external risks, including geopolitical developments, global trade uncertainties and financial-market volatility, remain relevant, the underlying domestic growth drivers provide a supportive environment for sustained economic activity in the medium term.

INFRASTRUCTURE AND CONSTRUCTION SECTOR OVERVIEW

The construction and real estate sectors continue to play an important role in Indias economic development, supported by urbanisation, industrial expansion, rising infrastructure requirements and sustained investment activity. During the Financial Year 2025-26, the Indian construction sector remained resilient, with construction activity recording 7.4% growth during the first half of FY 2025-26, supported by continued capital expenditure and ongoing project activity. The Governments Economic Survey 2025-26 also highlights the growing importance of real estate and housing, with the sector having strong linkages with construction and financial services.

The industrial construction segment is expected to benefit from Indias continued focus on manufacturing capacity creation, industrial development and investment-led growth. Government initiatives aimed at strengthening domestic manufacturing and developing integrated industrial ecosystems are expected to support demand for industrial facilities, manufacturing units, warehouses, utilities and associated civil infrastructure. In March 2026, the Union Government approved the Bharat Audyogik Vikas Yojna (BHAVYA) with an allocation of ?33,660 crore for the development of 100 plug-and-play industrial parks, creating potential opportunities for construction and allied services.

The Government has also continued to promote industrial corridors and planned industrial development. Various industrial corridor projects are under implementation, with the objective of creating modern manufacturing hubs supported by integrated infrastructure and plug-and-play facilities. Such developments are expected to contribute to incremental demand for industrial buildings, commercial establishments and related construction activities.

The commercial real estate segment continues to benefit from economic activity, expansion of businesses, urbanisation and increasing demand for office, institutional and commercial spaces. The Economic Survey 2025-26 notes that real estate and ownership of dwellings have contributed approximately 7% of annual GVA, on average, over the past decade, highlighting the sectors significance to the broader economy. Policy measures and urban infrastructure development have also supported the formalisation and expansion of the real estate ecosystem.

The residential construction segment is expected to remain supported by urbanisation, household formation, improving housing finance accessibility and continued demand for quality housing. Government initiatives relating to housing and urban development, together with the expansion of Tier-II and Tier-III cities, are expected to provide opportunities for residential and associated construction activity.

Looking ahead, the outlook for the construction sector remains constructive, supported by continued public capital expenditure, industrial capacity expansion, urbanisation and private investment. The Union Budget 2026-27 provides for approximately ?12.22 lakh crore of capital expenditure, representing continued Government emphasis on investment and productive asset creation.

For the Company, these developments present opportunities across its core areas of industrial, commercial and residential construction and project management. The Company intends to selectively pursue projects that are aligned with its technical capabilities, execution capacity, geographical presence and financial resources. Particular emphasis will remain on industrial and commercial projects arising from manufacturing expansion, industrial development and private-sector investment, while continuing to evaluate suitable residential and other civil construction opportunities.

The Company remains mindful of the inherent risks associated with the construction industry, including fluctuations in the prices of key construction materials, labour availability, project execution timelines, regulatory approvals, working-capital requirements, competitive pressures and changes in market conditions. Accordingly, the Company will continue to adopt a disciplined approach towards project selection, contract pricing, execution, cost management and working-capital utilisation.

Overall, the Company believes that Indias continuing focus on industrial development, urbanisation, housing and capital formation provides a favourable medium- to long-term environment for the industrial, commercial and residential construction segments. The Company will continue to pursue sustainable and selective growth while maintaining prudent financial and operational discipline.

COMPANY REVIEW

Shashijit Infraprojects Limited, headquartered in Vapi, Gujarat, is engaged in the business of civil and construction contracting, with a primary focus on industrial, commercial and residential projects. The Company undertakes construction and project execution activities across various segments, with capabilities extending from project planning and engineering to procurement, construction and project management.

The Companys principal strength lies in industrial and civil construction, supported by its experience in executing projects involving structural, civil and allied construction works. Over the years, the Company has also expanded its presence across commercial and residential segments, enabling it to address opportunities across a diversified project portfolio.

The Companys operations are supported by an experienced project execution team, established vendor and supplier relationships and project management capabilities. The Company remains focused on maintaining execution quality, cost discipline, timely project completion and effective utilisation of resources.

During FY 2025-26, the Company continued to focus on strengthening its project execution capabilities and selectively pursuing opportunities aligned with its technical expertise, execution capacity and financial resources. The Company remains focused on developing a sustainable project pipeline while maintaining prudent risk assessment and working-capital discipline.

Going forward, the Company intends to leverage opportunities arising from Indias continued industrialisation, urbanisation and construction activity, with particular focus on industrial, commercial and residential construction projects. The Company will continue to pursue selective growth while maintaining operational discipline, strengthening client relationships and enhancing long-term stakeholder value.

1. Established Industrial Construction Capabilities – The Companys core strength lies in industrial and civil construction, supported by its experience in executing projects for industrial and commercial clients. This provides a strong foundation to participate in opportunities arising from Indias continuing industrial and manufacturing expansion.

2. Diversified Project Portfolio – The Company has developed capabilities across industrial, commercial and residential construction, enabling it to pursue opportunities across multiple segments and maintain a diversified project pipeline.

3. Project Execution Capabilities – The Companys experienced execution team, established vendor relationships and project management capabilities support effective execution of projects with a focus on quality, timelines and cost management.

4. Established Client Relationships – The Company has developed relationships with clients across its operating segments. Continued engagement with existing clients, together with opportunities from new industrial and commercial developments, provides scope for repeat business and expansion of the project pipeline.

5. Industrial and Manufacturing Growth – Indias continuing focus on manufacturing, industrial development and creation of new industrial facilities is expected to support demand for industrial buildings, civil infrastructure and associated construction services. This presents opportunities for the Company to strengthen its presence in the industrial construction segment.

6. Urbanisation and Real Estate Demand – Continued urbanisation, household formation and development across Tier-II and Tier-III cities are expected to support demand for residential and commercial construction. These trends provide opportunities for the Company to selectively participate in suitable projects within its capabilities.

7. Strategic and Disciplined Growth – The Company intends to pursue sustainable growth through selective project acquisition, strengthening its presence in existing markets and evaluating opportunities in new geographies and segments. The Company will continue to maintain a disciplined approach towards project selection, pricing, execution, working capital and risk management.

SEGMENT-WISE PERFORMANCEL:

The Company is primarily engaged in construction and development of immovable properties and operates in a single business segment. Accordingly, the Company does not have any other reportable business segment.

CONSTRUCTION AND DEVELOPMENT OF IMMOVABLE PROPERTIES:

During the Financial Year 2025-26, the Company generated standalone net revenue of ?2,344.44 Lakhs, registering a growth of 2.49% over ?2,287.47 Lakhs reported in the previous financial year. The segment continued to be the sole business segment of the Company and contributed 100% of the Companys total revenue during the year.

The Company undertakes civil project management and construction activities across residential, industrial and commercial projects, serving clients across diverse sectors including engineering, textiles, chemicals, healthcare and pharmaceuticals, paper and packaging, hospitality, education and residential developments. The Companys diversified client base enables it to address varied project requirements and opportunities across different industry segments.

The Company continues to focus on strengthening its core construction business through effective project execution, development of client relationships and selective pursuit of new project opportunities. Going forward, the Company intends to leverage its execution capabilities and industry experience to expand its project pipeline and pursue sustainable growth across its core areas of industrial, commercial and residential construction.

OPERATE AND MAINTAIN GOVERNMENT INFRASTRUCTURE:

The Company discontinued its operations relating to the operation and maintenance of leased lake properties during FY 2024-25. Certain disputes arising in connection with the said arrangement with Vapi Nagarpalika continue to be pending before the appropriate forum. The Company is pursuing the matter in accordance with applicable law and based on the facts and circumstances of the case.

Based on the information presently available and the advice of its legal advisors, the Company does not anticipate any material adverse impact of the pending proceedings on its ongoing core business operations, subject to the outcome of the proceedings before the competent authority/court.

The Company remains focused on strengthening its core business of industrial, commercial and residential construction and will continue to evaluate opportunities aligned with its strategic objectives and long-term growth plans.

OUTLOOK:

The outlook for the Indian construction sector remains positive, supported by continued public capital expenditure, industrial expansion, urbanisation and private investment. The Union Budget 2026-27 provides for approximately ?12.22 lakh crore of capital expenditure, reflecting the Governments continued focus on investment-led growth.

For the Company, the opportunity landscape remains favourable across its core segments of industrial, commercial and residential construction, supported by manufacturing capacity expansion, urban development and increasing demand for quality construction.

The Company remains focused on selective project acquisition, disciplined execution and prudent working-capital management, while strengthening relationships with existing and prospective clients. At the same time, the Company remains cognisant of risks relating to input-cost volatility, labour availability, project execution timelines, regulatory approvals and competitive intensity.

The Company will continue to pursue sustainable and disciplined growth, with a focus on strengthening its project pipeline, improving execution efficiency and creating long-term value for its stakeholders.

THREATS/RISKS AND CONCERNS

The Companys business is exposed to various risks arising from market conditions, project execution, regulatory requirements, availability of resources and financial factors. The Company has established a risk management framework for identifying, assessing and mitigating key risks and continues to strengthen its internal processes and controls. The principal risks relevant to the Companys business are set out below:

1. Regulatory Compliance Risk:

Risk: The construction industry is subject to various statutory and regulatory requirements relating to taxation, labour, environmental matters, safety and other applicable laws. Non-compliance may result in penalties, litigation, project delays and reputational impact.

Mitigation: The Company monitors applicable statutory and regulatory requirements and has established internal processes and compliance mechanisms to facilitate timely compliance and periodic review of statutory obligations.

2. Project Execution and Delay Risk:

Risk: Delays in approvals, site readiness, design changes, availability of labour and materials, or other project-specific factors may result in cost overruns, delayed completion and increased working-capital requirements.

Mitigation: The Company undertakes project-level planning and due diligence, monitors project milestones and resource requirements, and maintains regular coordination with clients, contractors and other stakeholders to address execution-related issues.

3. Cost Escalation and Margin Risk:

Risk: Fluctuations in the prices of cement, steel, fuel, labour and other construction inputs may increase project costs and adversely impact project margins.

Mitigation: The Company monitors input-cost movements, evaluates project economics at the bidding stage and endeavours to optimise procurement, resource utilisation and project execution. Appropriate contractual provisions relating to price escalation are evaluated, wherever feasible.

4. Client and Counterparty Risk:

Risk: Delays in client payments, changes in project scope, contractual disagreements or termination of contracts may adversely affect revenue, cash flows and profitability.

Mitigation: The Company evaluates projects and counterparties before undertaking assignments, maintains regular client engagement and monitors billing, receivables and project performance. Contractual and commercial matters are reviewed appropriately to safeguard the Companys interests.

5. Working Capital and Liquidity Risk:

Risk: Delays in certification, billing and collection may increase working-capital requirements and place pressure on liquidity and project execution.

Mitigation: The Company monitors receivables, project-wise cash flows and working-capital requirements and endeavours to align procurement and project execution with available financial resources.

6. Labour and Resource Availability Risk:

Risk: Shortages or disruptions in the availability of skilled and unskilled labour, contractors, equipment or construction materials may adversely affect project timelines and costs.

Mitigation: The Company plans resource requirements in advance, maintains relationships with vendors and contractors and seeks to optimise the deployment of manpower, machinery and other resources across projects.

7. Health, Safety and Environmental Risk:

Risk: Construction activities involve inherent risks relating to workplace safety, environmental conditions and compliance with applicable standards. Any incident may result in project disruption, financial liability and reputational impact.

Mitigation: The Company promotes safe working practices at project sites and undertakes appropriate safety measures, training and monitoring to support compliance with applicable health, safety and environmental requirements.

8. Legal and Litigation Risk – Vapi Nagarpalika Matter:

Risk: The Company discontinued its operations relating to the operation and maintenance of leased lake properties during FY 2024-25. Certain disputes arising in connection with the said arrangement with Vapi

Nagarpalika continue to be pending before the appropriate forum. The outcome of the proceedings may have financial or other implications for the Company, depending upon the final determination of the matter.

Mitigation: The Company is pursuing the matter in accordance with applicable law and taking appropriate legal and procedural steps to protect its interests. The matter is being monitored by the management in consultation with its legal advisors. Based on the information presently available and legal advice received, the Company does not anticipate any material adverse impact on its ongoing core business operations, subject to the outcome of the proceedings before the competent authority/court.

9. Financial and Interest Rate Risk:

Risk: Changes in interest rates, borrowing costs and financing conditions may affect finance costs, cash flows and the Companys financial obligations.

Mitigation: The Company monitors its borrowing and liquidity position, undertakes financial planning and periodically reviews its financing requirements to maintain financial discipline and meet its obligations.

10. Contractual and Commercial Dispute Risk:

Risk: Differences relating to contractual obligations, project scope, payments, quality or performance may result in claims, disputes, arbitration or litigation and may adversely affect project execution and cash flows.

Mitigation: The Company seeks to mitigate such risks through appropriate contractual documentation, clear commercial terms, regular stakeholder communication and timely legal and commercial review of disputes, wherever required.

11. Reputation Risk:

Risk: Delays in project execution, quality issues, safety incidents or stakeholder dissatisfaction may adversely affect the Companys reputation and future business opportunities.

Mitigation: The Company focuses on quality, timely execution, client communication and responsible project management, with the objective of maintaining long-term relationships and protecting its reputation.

The above risks are not exhaustive and may vary depending on the nature, size, location and contractual terms of individual projects and prevailing business conditions. The Company continues to review its risk profile periodically and endeavours to strengthen its processes and controls to mitigate identified risks and support sustainable business growth.

INTERNAL CONTROL SYSTEMS & ADEQUACY

The Company has established an internal control framework commensurate with the nature, scale and complexity of its operations. The framework is designed to manage business risks, safeguard assets, ensure the reliability of financial reporting, and support compliance with applicable policies and regulations.

The internal control framework covers operational and financial processes, with appropriate controls implemented based on identified risks. The Companys key processes are subject to periodic review to assess the adequacy and effectiveness of the controls in place.

The Company engages an independent professional internal auditor to review its systems and processes periodically. The internal audit function provides an independent assessment of the adequacy and effectiveness of internal controls and reports its observations and recommendations to the management and the Audit Committee. The Audit Committee periodically reviews the internal audit reports and monitors the implementation of corrective and improvement measures.

In addition, management undertakes regular reviews of operations, financial performance and key control areas to strengthen the overall control environment. The Statutory Auditors have audited the Internal Financial Controls over Financial Reporting (IFCFR) as at 31st March 2026, and their report forms part of the Independent Auditors Report.

Based on the reviews undertaken by the management, internal auditors, Audit Committee and Statutory Auditors, the Board is of the opinion that the Companys internal control systems are adequate and operating effectively, providing reasonable assurance regarding the orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

FINANCIAL PERFORMANCE

- Net Revenue from Operations: During the financial year 2025-26, the Company achieved a standalone net revenue of Rs. 2,344.44 Lakhs, registering an increase of 2.49% as compared to Rs. 2,287.47 Lakhs reported in the preceding financial year.

- Net Profit after tax: The Company reported a net profit after tax of Rs. 48.996 Lakhs during the financial year 2025-26, as against a net loss of Rs. 310.582 Lakhs reported in the previous financial year, reflecting a significant improvement in the Companys profitability during the year.

- Total Comprehensive Income: The Company reported Total Comprehensive Income of Rs. 52.614 Lakhs for the financial year 2025-26, as against a Total Comprehensive Loss of Rs. 310.804 Lakhs reported in the previous financial year, reflecting a significant improvement in the Companys overall financial performance during the year.

- Earnings per Share (EPS): The Companys Earnings per Share (EPS) stood at Rs. 0.067 during the financial year 2025-26, as against negative Rs. 0.582 in the previous financial year.

The Company remained focused on its core construction business during FY 2025-26, with emphasis on disciplined execution and operational efficiency. Going forward, the Company will continue to leverage its experience and client relationships to pursue suitable opportunities and build a sustainable growth trajectory.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES

The Company recognises its employees as an important contributor to its operational performance and long-term growth. During FY 2025-26, the Company continued to focus on employee capability, workplace safety, engagement and retention.

As at 31st March 2026, the Companys employee strength stood at 32. The Company continues to support employee development through on-the-job learning and relevant training initiatives, while promoting a safe, collaborative and performance-oriented work environment.

Employee relations remained cordial during the year. Going forward, the Company will continue to focus on developing and retaining talent aligned with its business requirements and growth objectives.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS AND RETURN ON NETWORTH

Pursuant to the amendments under Schedule V to the Listing Regulations, in accordance with Regulation 34(3) of the Listing Regulations, the Company is required to disclose details of significant changes—defined as a change of 25% or more compared to the immediately preceding financial year—in Key Financial Ratios, as well as any changes in Return on Net Worth, along with explanations for such changes. The relevant details for the financial year under review are provided below:

Ratio	Numerator	Denominator	March 31, 2026	March 31, 2025	% Change	Reason for Variance
Current ratio	Current assets	Current liabilities	1.25	1.39	-10.35%	N.A.
Debt - Equity ratio	Total debt	Shareholders equity	0.59	0.59	0.92%
Debt service coverage Ratio	Earnings available for debt service = Net Profit after taxes + depreciation and amortisation expenses + finance costs + other non-cash operating expenses	Debt service = Interest and lease payments + principal repayments	0.21	(0.18)	-217.93%	The improvement in the ratio is primarily due to improvement in earnings available for debt servicing during the year. The percentage change is not meaningful for comparison as the previous years ratio was negative
Return on equity ratio	Net profit after Tax	Average shareholders equity	0.03	(0.24)	-113.42%	The improvement is mainly due to the Company reporting a profit during the year as against a loss in the previous year. The percentage change is not meaningful due to the negative base in the previous year.
Inventory turnover ratio	Cost of goods sold	Average inventory	0.89	1.03	-13.89%
Trade receivable turnover ratio	Net sales	Average trade receivables	3.07	3.03	1.37%
Trade payable turnover Ratio	Net purchases	Average trade payables	1.31	1.27	2.84%
Net capital turnover Ratio	Net sales	Average Working capital	3.89	3.92	-0.84%
Net profit ratio	Net profit after tax	Net sales	2.09%	(13.58%)	-115.39%	The improvement is mainly due to the Company earning a net profit during the year as compared to a net loss in the previous year. The percentage change is not meaningful due to the negative base in the previous year.
Return on capital Employed	Earnings before interest and tax	Capital employed	-0.02	(0.30)	-92.49%	The improvement is primarily due to a reduction in the loss before interest and tax during the year. The percentage change is not meaningful due to the negative base in the previous year.
Return on investment	Income generated from invested funds	Average invested funds (Excluding investment in subsidiaries and other investments)	0.00	0.00		There was no sales of investments during the year and hence there was no significant return generated from investments.

DISCLOSURES BY MANAGEMENT TO THE BOARD

The Management places before the Board all material financial and commercial transactions and other matters in which the Directors may have a potential interest, as required under applicable laws and the Companys governance framework. Directors having an interest in any such matter abstain from participating in the discussion and voting thereon, wherever applicable.

CAUTIONARY STATEMENT

The forward-looking statements contained in this Management Discussion and Analysis of the Companys financial condition and operational results, including those describing the Companys objectives, expectations, or predictions, are made in accordance with applicable securities laws and regulations. These forward-looking statements are based on certain assumptions and expectations of future events. However, the Company cannot guarantee that these assumptions and expectations will prove to be accurate or will be realized.

The Company undertakes no obligation to publicly amend, modify, or revise any forward-looking statements in light of subsequent developments, information, or events. Actual results may differ materially from those expressed or implied in these statements. Factors that could significantly influence the Companys operations include changes in government regulations, tax laws, economic developments within the country, and other global factors.

For and on behalf of the Board of Directors

Shashijit Infraprojects Limited

Sd/-

(Ajit Jain)

Place: Vapi

Chairman & Managing Director

Dated: 03/09/2026

DIN: 01846992