Simplex Infrastructures Ltd Management Discussions

ECONOMIC OVERVIEW

The global economy has demonstrated notable resilience in the face of heightened trade tensions, geopolitical uncertainties, and financial market volatility. While the recent recovery from the 2020 recession marked one of the strongest growth phases in several decades, underlying vulnerabilities persist, particularly across emerging market and developing economies, which continue to lag in the recovery process. Global growth is expected to moderate in the near term, as firms adjust inventory levels and the impact of trade restrictions and policy uncertainties becomes more pronounced. The outlook remains subject to downside risks, including further escalation of trade tensions, tightening financial conditions, and weakening market sentiment. The global environment remains fragile, with growth holding up better than expected but risks elevated amid intensifying geopolitical tensions, trade fragmentation and financial vulnerabilities. The impact of these shocks may still surface with a lag. Against this backdrop, Indias performance stands out. The first advance estimates place FY26 real GDP growth at 7.4 per cent and GVA growth at 7.3 per cent, reaffirming Indias status as the fastest-growing major economy for the fourth consecutive year. Private Final Consumption Expenditure grew by 7.0 per cent in FY26, reaching 61.5 per cent of GDP, the highest since 2012 (FY23 also recorded 61.5 per cent share). This growth is supported by low inflation, stable employment, and increasing real purchasing power. Strong agricultural performance has bolstered rural consumption, while improvements in urban consumption, aided by tax rationalisation, indicate broad-based demand momentum. Investment activity strengthened in FY26, with Gross Fixed Capital Formation growing by 7.8 per cent and its share remaining steady at 30 per cent of GDP. This momentum was buoyed by sustained public capital expenditure and a revival in private investment activity, as evident from corporate announcements.

For India, 2026 will be the year of resilience in domestic demand, decisive reforms in fiscal, monetary, and labour policies, and recalibrations in trade policies. The year 2025-2026 marked an inflection point: Policy overhauls across Western economies—particularly in trade, investment, and industrial policy—triggered spillover effects across all major global markets. India was not immune to these shifts. Intricately connected to global value chains, India, the worlds fourth-largest economy and a major global trading partner, faced external shocks and acute effects from these global policy changes, including tariff escalations and volatile capital flows. Yet, despite headwinds, demand resilience, a reset in trade and investment outlook, and policy reforms stood out. India focused squarely on its biggest strength, domestic demand, to keep growth buoyant as inflation levels stayed low at 1.8% on average through the fiscal year. With slowing global demand, rising trade frictions, and a delicate domestic consumption environment, India deployed a carefully sequenced set of fiscal, monetary, and trade reforms that not only cushioned the economy but also laid the foundation for future growth.

INDUSTRY OVERVIEW

During FY 2025-26, the global economic environment reflected moderate growth amid easing inflation and gradual stabilization of monetary policies. While advanced economies saw subdued expansion, emerging markets benefited from infrastructure-led growth and urbanization. The construction sector remained supported by public infrastructure investment, energy transition projects, and housing demand, but continued to face challenges from geopolitical tensions, supply chain disruptions, commodity price volatility, and higher financing costs. Despite these headwinds, the medium-term outlook remains resilient, driven by government stimulus, sustainability-focused development, and modernization needs, alongside increasing adoption of digital and innovative construction practices.

In India, infrastructure continues to play a pivotal role in economic growth, with significant development across roads, railways, ports, airports, and waterways. Government initiatives such as smart cities and sustained public investment have strengthened sectoral momentum, supported by urbanization and growing foreign investment inflows, driving continued expansion of the construction industry.

BUSINESS REVIEW

The company operates as a diversified engineering and construction enterprise with a strong presence across key infrastructure segments including transportation, energy and power, buildings and housing, marine works, industrial structures, and urban infrastructure. With a legacy dating back to 1924 and execution of over 2,600 projects in India and overseas, the Company continues to leverage its multidisciplinary capabilities and technical expertise to deliver complex infrastructure projects across sector.

During the financial year 2025-26, the Company focused on strengthening its core construction business while pursuing a strategy centered on operational efficiency, selective bidding, and improved project execution. Its diversified portfolio spanning roads, railways, bridges, power plants, industrial facilities, and high-rise structures enabled it to maintain business continuity despite sectoral challenges. The Company is also executing projects across international markets, particularly Middle East thereby enhancing its geographic diversification. A key development during the period has been the Companys ongoing financial restructuring efforts aimed at improving its balance sheet and liquidity position. Following the execution of a restructuring arrangement with lenders, including the conversion of a portion of debt into equity and structured repayment mechanisms, the Company has taken significant steps toward financial stabilization and long-term sustainability. This has enabled improved operational performance and a gradual return to profitability in recent periods. The Company continues to face industry challenges such as input cost volatility, working capital intensity, and competitive bidding pressures. However, its focus on disciplined project selection, asset-light operations, and strengthening of internal controls has supported improved execution efficiency. Going forward, Simplex Infrastructures Limited remains well-positioned to benefit from increased infrastructure spending, urban development initiatives, and demand for integrated engineering solutions, both in domestic and international markets.

Some of the key projects of the company during the year include:

A few of the projects secured during the FY 2025-2026

EPC contract of Chimney Package For Nabinagar STPP Stage-II (3x800 Mw) at Bihar in Power Sector
Chimney Package for Gadarwara STPP Stage-II (2x800 Mw) at Madhya Pradesh in Power Sector
Civil Works for Residential Building "Raheja Solaris 2B (Balance Qty)" in Maharashtra, Building Sector
Piling work for Overhead Transmission Line in Jeddah, Saudi Arabia, Ground Engineering Sector.

A few of the Projects completed during FY 2025-2026

Bangalore Metro - Reach 3, Manjunath Nagar to BIEC Station, Bangalore, Karnataka
Ahmedabad Metro Rail Project Phase-I (8.9 KM, 06 Stations), Ahmedabad, Gujarat
Bilaspur Sewerage Project, Bilaspur, Chhattisgarh
Habra-Gaighata Water Supply Project, North 24 Parganas
DDA - HIG Project, Dwarka

OPPORTUNITIES

The construction sector in India is poised for significant growth, driven by strong macroeconomic fundamentals, policy support, and increasing demand across infrastructure and real estate segments. The Governments continued emphasis on capital expenditure, particularly in roads, railways, ports, airports, and urban infrastructure, is expected to create substantial opportunities for construction companies. Flagship programs such as the National Infrastructure Pipeline (NIP), Gati Shakti Master Plan, Smart Cities Mission, and Housing for All are providing long-term visibility of projects and encouraging private sector participation. Rapid urbanization and population growth are further fuelling demand for residential, commercial, and social infrastructure. The expansion of metro rail networks, logistics parks, and industrial corridors is expected to drive sustained construction activity. Additionally, the push toward renewable energy, including solar, wind, and green hydrogen projects, is opening new avenues in engineering and construction services.

The Governments focus on ease of doing business, digitalization of project approvals, and regulatory reforms such as the Real Estate (Regulation and Development) Act (RERA) has improved transparency and investor confidence in the sector. Increased foreign direct investment (FDI) and the emergence of public-private partnership (PPP) models are also enhancing funding availability for large-scale infrastructure projects. Technological advancements, including the adoption of Building Information Modelling (BIM), prefabrication, and automation, are improving efficiency and reducing project timelines, thereby creating opportunities for companies with strong technical capabilities. Furthermore, growing emphasis on sustainable and climate-resilient infrastructure is expected to drive demand for green construction practices. Overall, the Indian construction sector presents robust growth opportunities over the medium to long term, supported by strong government initiatives, rising private investments, and increasing focus on infrastructure-led economic development.

Urban Infrastructures

Urban infrastructure development in India during the financial year 2025-26 is expected to remain a key growth driver for the construction sector, supported by rapid urbanization, rising population density, and increasing demand for improved quality of life in cities. The Governments continued focus on urban transformation through initiatives such as the Smart Cities Mission, AMRUT (Atal Mission for Rejuvenation and Urban Transformation), and transit-oriented development is accelerating investments in core infrastructure including water supply, sewage systems, urban mobility, and waste management. Significant expansion in metro rail networks, electric mobility infrastructure, and multi modal transport systems is underway across major metropolitan regions, aimed at reducing congestion and improving connectivity. Additionally, the development of affordable housing under various government schemes, along with the modernization of existing urban infrastructure, is creating sustained demand for construction and engineering services. The integration of digital technologies and smart solutions—such as intelligent traffic management systems, energy-efficient buildings, and data-driven urban planning—is reshaping the way cities are designed and managed. Furthermore, increasing emphasis on sustainability and climate resilience is driving investments in green buildings, renewable energy integration, and flood-resilient infrastructure. Despite challenges such as land acquisition constraints, funding gaps, and execution delays, the outlook for urban infrastructure remains positive, supported by enhanced public spending, private sector participation, and innovative financing mechanisms. This evolving landscape presents substantial opportunities for construction companies with strong execution capabilities and technological expertise.

The Company has contributed to the development of critical urban infrastructure, including metro rail systems, elevated corridors, bridges, water supply and sewerage networks, and large-scale residential and commercial complexes. Its involvement in urban mobility projects, particularly metro rail construction and associated civil works, has supported improved connectivity and reduced congestion in major cities. Additionally, Simplex has participated in projects aligned with government initiatives such as Smart Cities Mission and AMRUT, thereby contributing to the modernization and sustainability of urban centre.

Looking ahead, with increasing investments in smart infrastructure, transit-oriented development, and sustainable urban solutions, the company is well-positioned to capitalize on emerging opportunities. The Companys continued emphasis on technological adoption, operational efficiency, and selective project bidding is expected to further strengthen its contribution to Indias urban infrastructure growth. The share in order book from this sector is 9 percent.

Building & Housing

The building and housing segment in India during the financial year 2025-26 demonstrated steady growth, supported by strong demand fundamentals, policy support, and continued urban expansion. The residential real estate market witnessed sustained momentum, particularly in the affordable and mid-income housing segments, driven by favourable demographics, increasing household formation, and improved affordability. Government initiatives such as Housing for All, along with incentives for first-time homebuyers and continued regulatory support under RERA, contributed to enhanced transparency and buyer confidence. In the commercial real estate space, demand for office buildings, data centres, healthcare facilities, and institutional infrastructure remained robust, supported by economic recovery, expansion of the services sector, and increasing investments in digital infrastructure. The growth of e-commerce and logistics also drove demand for warehousing and integrated township developments. Construction activity in this segment benefited from improved project execution, adoption of modern construction technologies such as prefabrication and modular construction and increasing emphasis on sustainable and green buildings. However, the sector continued to face challenges including input cost fluctuations, skilled labour availability, and funding constraints in certain segments. Overall, the outlook for the building and housing segment remains positive, supported by ongoing urbanization, rising income levels, and continued public and private sector investments. The sector is expected to play a crucial role in driving construction activity and contributing to economic growth in the medium to long term.

The Company has established capabilities in executing high-rise buildings, integrated townships, mass housing projects, and complex commercial developments, catering to both public and private sector clients. It has been actively involved in delivering affordable housing projects aligned with government initiatives, as well as premium residential and mixed-use developments across urban centres. Its experience in handling large-scale projects in densely populated areas, combined with strong project management and engineering capabilities, has enabled timely execution and adherence to quality standards.

In the commercial and institutional space, the Company has contributed to the development of office complexes, hospitals, educational institutions, and industrial buildings. The adoption of modern construction techniques, including mechanization and efficient resource planning, has supported improved productivity and cost management. Despite industry challenges such as input cost volatility and working capital constraints, Simplex has maintained its focus on selective bidding, efficient execution, and strengthening client relationships. Going forward, the Company is well-positioned to benefit from increasing demand in the housing and building segment, supported by urbanization trends, government incentives, and growing private sector investments. The share in order book from this sector is 13 percent.

Power-Transmission

During FY 2025-26, the power transmission sector in India witnessed steady growth driven by rising electricity demand, rapid renewable energy integration, and government focus on strengthening the national grid. Increased capacity additions in solar, wind, and hybrid energy projects necessitated expansion of transmission infrastructure, including high-voltage lines, substations, and green energy corridor. Policy initiatives such as the Green Energy Corridor, along with grid modernization and digitalization efforts, further supported sector development and improved system reliability. However, challenges such as right-of-way issues, land acquisition delays, and execution complexities continued to affect project timelines. Despite these constraints, the sector outlook remains positive, supported by Indias energy transition goals, electrification drive, and the growing need for a resilient and efficient transmission network, creating significant opportunities for infrastructure and EPC play.

The Companys experience in delivering large-scale and technically complex projects has enabled it to participate in critical assignments supporting grid expansion and power evacuation requirements across regions. Its execution capabilities in foundation works, tower erection, and civil construction for substations have supported the development of reliable and efficient power transmission infrastructure.

The Companys focus on disciplined project execution, adherence to safety standards, and deployment of skilled resources has been instrumental in managing the complexities associated with transmission projects, including challenging terrain and tight delivery schedules. Going forward, with the continued expansion of renewable energy capacity and modernization of the national grid, the Company is well-positioned to participate in emerging opportunities in the transmission sector, supported by its execution expertise and established track record in infrastructure development. The share in order book from this sector is 36 percent.

Industrial Structures

The industrial structures segment in India during the financial year 2025-26 continued to expand, supported by sustained growth in manufacturing, infrastructure-linked industrialization, and policy initiatives aimed at enhancing domestic production capabilities. The Governments continued focus on "Make in India," production-linked incentive (PLI) schemes, and the development of industrial corridors contributed to increased investments in factories, logistics hubs, warehouses, and specialized industrial facilities. Demand for modern industrial infrastructure remained strong across sectors such as automotive, electronics, pharmaceuticals, chemicals, and renewable energy equipment manufacturing. The rapid growth of e-commerce and supply chain modernization further accelerated the need for large-scale warehousing and distribution centre. Additionally, the shift toward automation and smart manufacturing increased demand for technologically advanced, efficient, and sustainable industrial facilities.

Construction activity in this segment benefited from the adoption of modern engineering practices, including pre-engineered buildings (PEB), modular construction, and faster project execution methodologies. However, challenges such as raw material price volatility, regulatory approvals, and skilled labour availability continued to influence project timelines and costs. Overall, the industrial structures segment is expected to maintain strong growth momentum, supported by continued policy emphasis on manufacturing, increasing private sector investments, and Indias integration into global supply chains.

Simplexs capabilities in handling large-scale, complex, and time-bound industrial projects have enabled it to support clients in establishing production facilities aligned with evolving industrial growth and supply chain requirements. The Companys experience in civil, structural, and foundation works has been particularly valuable in delivering robust infrastructure for heavy engineering and process industries. Its ability to manage multidisciplinary projects in challenging environments has strengthened its position in the industrial construction space. Going forward, with increasing investments in manufacturing under government initiatives such as Make in India and production-linked incentive schemes, the Company is well placed to participate in emerging opportunities in industrial infrastructure development. Its diversified execution capabilities and established track record continue to support its role in this growing segment. The share in order book from this sector is 13 percent.

Roads & Bridges

The roads and bridges sector in India during the financial year 2025-26 continued to be a key driver of infrastructure development, supported by strong government focus on connectivity, logistics efficiency, and regional economic integration. Significant investments under initiatives such as Bharatmala Pariyojana and the National Infrastructure Pipeline contributed to the expansion and upgradation of national highways, expressways, rural roads, and major bridge infrastructure across the country. Construction activity in this segment remained robust, driven by the need to improve inter-city and intra-city connectivity, reduce transportation costs, and support industrial and trade growth. Increased emphasis on expressway development, elevated corridors, and long-span bridges helped enhance mobility and reduce travel time between key economic corridor. Additionally, the integration of advanced construction technologies, including precast segmental construction and mechanized paving, improved execution efficiency and quality outcomes. Despite strong momentum, the sector continued to face challenges such as land acquisition delays, utility shifting issues, and variability in raw material costs. However, policy reforms, improved project financing mechanisms, and increased participation from both public and private sectors supported sustained growth. Overall, the outlook for the roads and bridges sector remains highly positive, underpinned by continued government investment, rising freight and passenger traffic demand, and the strategic importance of road infrastructure in driving economic development.

The Company has executed a range of road and bridge projects involving foundation works, substructure and superstructure construction, and large-span bridge engineering in diverse geographical and geological conditions. Despite sectoral challenges such as land acquisition delays, right-of-way issues, and cost fluctuations, Simplex continues to participate selectively in projects aligned with its operational strengths. Going forward, the Company is well positioned to benefit from continued government investment in highway expansion and bridge infrastructure, supported by national initiatives aimed at improving connectivity and logistics efficiency. The share in order book from this sector is 29 percent.

Railways

The railway sector in India during FY 2025-26 continues to witness strong growth momentum, led by sustained government focus and record capital expenditure through Indian Railways. With significant investments directed toward track expansion, electrification, station redevelopment, and dedicated freight corridors, the sector offers substantial opportunities for infrastructure companies engaged in engineering, procurement, and construction (EPC) activities. The continued rollout of modern train systems such as Vande Bharat Express and the emphasis on enhancing freight capacity and logistics efficiency further support long-term demand for railway infrastructure development.

The role of the Company as an EPC contractor, has undertaken execution of critical infrastructure projects such as construction of railway bridges, track-related civil works, station infrastructure, and associated structural components. With Indian Railways focusing on capacity augmentation, dedicated freight corridors, and network modernization, Simplex contributes by providing specialized engineering capabilities and project execution expertise. Its involvement in complex civil construction works positions it to benefit from increased investments in railway infrastructure, while also playing a supporting role in enhancing connectivity, safety, and efficiency across the rail network. However, the share in order book of the Company from this sector is insignificant for the year under review.

Marine

The marine sector in India during 2025-2026 is witnessing steady growth, driven by increased government focus on port-led development, coastal shipping, and logistics efficiency under initiatives led by the Ministry of Ports, Shipping and Waterways. Programs such as Sagarmala Programme continue to boost investments in port modernization, connectivity, and inland waterways. Expansion of major ports, development of new deep-draft terminals, and enhanced private sector participation are improving cargo handling capacity and turnaround efficiency. Additionally, rising international trade and emphasis on multimodal logistics are supporting demand for marine infrastructure, including jetties, berths, breakwaters, and dredging works. Overall, the sector presents significant opportunities for infrastructure companies, while also contributing to reducing logistics costs and strengthening Indias position in global maritime trade.

The Company has contributed significantly to the development of port and coastal infrastructure in line with initiatives of the Ministry of Ports, Shipping and Waterways. The Company undertakes execution of marine works such as construction of jetties, berths, quay walls, breakwaters, and other waterfront structures, which are critical for port expansion and modernization. The company has been associated with building many of Indias major ports, including Goa, Haldia, Vizag, Kochi, Mundra, Mumbai, Paradip, Adani, and Dahej. Leveraging its expertise in complex civil engineering and foundation works, Simplex supports the growth of maritime logistics and trade infrastructure. With continued investments under programs like Sagarmala Programme, the Company is well positioned to participate in upcoming projects and strengthen its presence in the marine infrastructure segment. However, the share in order book of the Company from this sector is insignificant for the year under review.

THREATS, RISKS AND CONCERNS

The construction industry operates in a highly dynamic and cyclical environment, making it vulnerable to multiple risks and uncertainties. Economic slowdowns, volatility in interest rates, and reduced infrastructure spending can significantly impact project pipelines and revenue visibility. The industry faces intense competition, often resulting in aggressive bidding practices that put pressure on margins. Fluctuations in raw material prices—particularly steel, cement, and fuel—pose a major cost risk, especially in fixed-price contracts. Project execution risks, including delays due to regulatory approvals, land acquisition issues, environmental clearances, and unforeseen site conditions, can lead to cost overruns and contractual disputes. The sector is also exposed to liquidity constraints, as delayed payments and high working capital requirements strain cash flows. Shortages of skilled labor, safety concerns, and supply chain disruptions further compound operational challenges. Additionally, changes in government policies, taxation, and compliance requirements, along with increasing focus on sustainability and environmental norms, may impact project timelines and costs. While companies continue to adopt risk mitigation strategies, these factors remain key concerns that could affect overall performance and growth.

The Company operates in a challenging infrastructure and construction environment and remains exposed to a wide range of risks that may impact its performance. Its operations are closely linked to macroeconomic conditions, including fluctuations in interest rates, inflation in key input costs such as steel, cement, and fuel, and variations in infrastructure spending by both government and private sector clients. Execution risks continue to be significant, particularly in large and complex projects, where delays arising from regulatory approvals, land acquisition constraints, environmental clearances, or unforeseen site conditions may lead to cost overruns and contractual disputes. The key risk areas identified by the Company include tendering, project execution, procurement of materials, finance and liquidity, foreign exchange exposure, market and interest rate movements, credit risk, human resources, and information technology. In addition, evolving technologies, changing business models, and intensifying competition present further challenges to the Companys operations. Recognizing that risk is inherent in the infrastructure and construction industry, the Company has established a structured and proactive risk management framework to address these areas effectively. In tendering, a rigorous pre-bid evaluation process is followed to assess project viability, financial feasibility, and contractual obligations before committing resources. During execution, strong project management systems, efficient resource planning, and regular performance reviews help mitigate delays and control costs. Procurement risks are managed through a diversified supplier base, long-term vendor relationships, and strategic sourcing practices to address material availability and price volatility.

While multiple internal and external factors may influence performance, a structured risk management framework, disciplined execution practices, and continuous monitoring mechanisms enable the Company to effectively manage and mitigate these risks. By maintaining financial prudence, operational efficiency, and adaptability to evolving market and technological dynamics, the Company remains focused on sustaining long-term growth and creating value for its stakeholders despite prevailing uncertainties.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has established a robust internal control system commensurate with the size, nature, and complexity of its operations. These controls function at both entity and process levels and are designed to support the consistent and reliable achievement of business objectives. The internal control framework is aligned with the Companys strategic priorities and remains responsive to the evolving business environment and regulatory requirements. The system ensures the integrity of operations, safeguards Company assets, and promotes the accuracy and completeness of accounting records, thereby enabling the timely preparation of reliable financial information. It also incorporates measures for the prevention and detection of frauds and errors through well-defined policies, procedures, and monitoring mechanisms.

The responsibility for establishing, maintaining, and strengthening internal controls rests with the executive management, supported by an independent Internal Audit function. Regular internal audits, adherence to defined Standard Operating Procedures (SOPs), and periodic management reviews contribute to the ongoing effectiveness and relevance of the control environment. The framework also emphasizes compliance with applicable laws and regulations, operational efficiency, and the reliability of financial reporting. Based on the reviews and evaluations carried out during the year, the Board is of the opinion that the Companys internal control systems are adequate and are operating effectively.

HUMAN RESOURCE DEVELOPMENT

The construction industry is inherently labor-intensive and project-driven, making human resources a critical driver of operational efficiency and project success. The industry relies on a diverse workforce comprising engineers, project managers, skilled and semi-skilled labor, and technical specialists, often deployed across multiple geographies and challenging site conditions. Accordingly, continuous investment in human resource development is essential to enhance productivity, maintain quality standards, and ensure timely project execution.

A key focus area for the industry is skill development and training. Companies are increasingly undertaking structured training programs, technical workshops, and on-site learning initiatives to upgrade workforce capabilities and align them with evolving construction technologies, modern equipment usage, and safety standards. Leadership development and succession planning are also emphasized to build a strong pipeline of competent professionals capable of managing complex and large-scale infrastructure projects.

Health, safety, and well-being of employees remain paramount, given the high-risk nature of construction activities. Organizations are strengthening safety frameworks through regular training, strict adherence to safety protocols, and the use of advanced monitoring systems to minimize workplace incidents. Additionally, efforts are being made to improve employee engagement, retention, and productivity through performance management systems, competitive compensation structures, and welfare initiatives.

The industry also faces challenges related to the availability of skilled labor, high attrition rates, and migration of workforce. To address these concerns, companies are focusing on building long-term relationships with workers, enhancing working conditions, and leveraging technology such as automation and digital tools to reduce dependency on manual labor.

Overall, human resource development in the construction industry continues to evolve, with a strong emphasis on skill enhancement, safety, and adaptability, enabling organizations to meet the demands of a dynamic and competitive environment.

The Company places strong emphasis on workforce planning, training, and employee engagement to effectively meet the dynamic requirements of complex infrastructure projects. A dedicated team identifies skill gaps and implements targeted upskilling initiatives, including safety training, equipment handling, and on-site professional development programs. Safety continues to remain a key organizational priority, and the Human Resources function works in close coordination with project teams and safety officers to ensure the implementation of comprehensive health and safety practices in line with applicable regulations and project-specific requirements. The Company has also adopted technology-enabled learning methods, including simulation-based training, to equip employees and workers to handle advanced machinery and challenging site conditions. These initiatives not only enhance operational efficiency but also foster a culture of continuous learning, adaptability, and skill enhancement. The Company is proud of its low employee attrition rate, with several employees associated with the organization for an average tenure of around 15 years, reflecting strong people practices and a stable work environment. As of 31st March 2026, the Company had a committed and diverse workforce of 1166 manpower.

The Company provides suitable Personal Protective Equipment (PPE) to all personnel, ensures compliance with safe work practices, and maintains the prescribed welfare facilities, including health-checkup, drinking water, first-aid and other amenities as required under applicable laws. Compliance with statutory safety requirements by contractors and subcontractors are also monitored on a regular basis as a compliance with the Occupational Safety, Health and Working Conditions Code, 2020.

The Companys human resource practices are guided by a people-centric philosophy, where employee welfare, career development, and work-life balance are integral to its organizational ethos. Going forward, the Company remains committed to investing in its people, recognizing that a skilled and motivated workforce is essential for delivering project excellence and sustaining long-term competitive advantage.

FINANCIAL PERFORMANCE

During the year under review, on standalone basis, revenue from operations were 6,702 mns as against 7,313 mns in the previous year. The Company reported profit before exceptional items and tax of 481 mns as against profit of 47 mns in the previous financial year and net profit for the year was 377 mns as against profit of 97 mns in previous financial year. Other Comprehensive Income for the year (net of tax) is 195 mns as against loss of 33 mns in the previous year. After considering other comprehensive income, total comprehensive income stood at 572 mns as against income of 64 mns in the previous year.

On a consolidated basis, the revenue from operations was 10,212 mns as against 10,756 mns in the previous year. The Company reported profit before exceptional items and tax of 511 mns as compared to profit of 74 mns in the previous year and profit for the year was 404 mns as against profit of 121 mns in the previous year. Other Comprehensive income for the year (net of tax) is 212 mns as against loss of 35 mns in the previous year. After considering other comprehensive income, total comprehensive income stood at 616 mns as against income of 86 mns in the previous year.

FINANCIAL RATIOS

In accordance with SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in key sector-specific financial ratios. There have been significant changes in following key sector-specific financial ratios.

Particulars	Standalone 2026	Standalone 2025	Change in %	Consolidated 2026	Consolidated 2025	Change in %
Current Ratio	2.35	1.84	27.72	2.41	1.87	28.88
Net Debt-Equity Ratio	1.76	4.14	(57.49)	1.71	3.92	(56.38)
Debt service coverage ratio (DSCR)	0.28	0.20	40.00	0.29	0.22	32.40
Return on equity ratio	0.05	0.03	66.67	0.06	0.03	100.00
Net Capital Turnover Ratio	0.48	(17.69)	102.71	0.69	23.77	(97.10)
Net Profit Ratio	0.06	0.01	500.00	0.04	0.01	296.01

The reason for such variance is as follows:

i. Current Ratio: Change in ratio resulted primarily for decrease in Current Liabilities during the year.
ii. Net-Debt Equity Ratio: Change in ratio resulted primarily for decrease in borrowings and increase in equity during the year.
iii. Debt service coverage ratio (DSCR): Change in ratio resulted due to Increase in Profit before Interest & Tax.
iv. Return on equity ratio: Change in ratio resulted from increase in net profit during the year.
v. Net Capital Turnover Ratio: Change in ratio resulted due to increase in Average working capital.
vi. Net Profit Ratio: Change in ratio resulted due to increase in Profit after tax.

FUTURE OUTLOOK

The outlook for the construction industry remains positive, supported by strong underlying demand, policy support, and continued infrastructure investments, particularly in emerging economies such as India. The Indian construction sector is expected to witness steady growth, with revenues projected to increase by approximately 8-10% in FY 2027, driven by a healthy order book and sustained execution of infrastructure projects. Government-led capital expenditure continues to be a key growth driver, with significant investments in transportation, urban infrastructure, renewable energy, and industrial corridor. Infrastructure spending is expected to remain elevated, creating strong multiplier effects across residential, commercial, and logistics segments. Additionally, rapid urbanization, rising housing demand, and expansion in manufacturing and warehousing are likely to further support sectoral growth over the medium term.

Globally, the construction industry is projected to grow at a moderate pace, with a CAGR of around 5-6% through 2030, supported by increased investments in energy, data centers, and urban infrastructure. In India, the market is expected to expand steadily, reaching higher scale with a CAGR of around 6-7% in the coming years, reflecting strong structural fundamentals.

However, the outlook is not without challenges. Inflationary pressures on key inputs such as steel, cement, and fuel, along with elevated interest rates, may impact project viability and margins. Geopolitical uncertainties and supply chain disruptions could also lead to cost escalations and delays. At the same time, the sector is undergoing transformation through increased adoption of digital technologies, automation, and sustainable construction practices, which are expected to enhance efficiency and competitiveness.

Overall, the construction industry is expected to maintain a stable to strong growth trajectory in 2026-2027, underpinned by robust demand fundamentals and policy support. Companies that focus on execution efficiency, financial discipline, technological adoption, and risk management are likely to be better positioned to capitalize on emerging opportunities while navigating sectoral challenges.

The Company is well positioned to benefit from the anticipated growth in infrastructure development, supported by its diversified project portfolio and execution capabilities. The Company aims to leverage opportunities in key sectors such as transportation, urban infrastructure, and industrial construction through selective bidding and efficient project execution. Continued focus on cost optimization, risk management, and operational efficiency will be critical to enhancing competitiveness. Strengthening liquidity and balance sheet health remains a priority to support sustainable growth.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis relating to the Companys future growth prospects are forward-looking in nature. These statements are subject to various risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed or implied herein. Neither the Company nor its Directors, nor any of their respective affiliates, undertake any obligation to update, revise, or modify any forward-looking statements to reflect events or circumstances arising after the date hereof or to account for the occurrence of any underlying assumptions not materializing, except as may be required under applicable law.

By Order of the Board

For Simplex Infrastructures Limited

Place: Kolkata

Date: 28th May, 2026

Rajiv Mundhra

Chairman

DIN: 00014237