Sonu Infratech Ltd Management Discussions

REPORT ECONOMIC OVERVIEW: GLOBAL ECONOMY:

The global economy navigated a complex operating environment during FY 2025 26, marked by escalating geopolitical friction, fragmented trade policies, and persistent supply chain realignments. Ongoing conflicts in West Asia and Eastern Europe disrupted crucial maritime chokepoints and energy corridors, triggering commodity price volatility and stoking inflationary pressures across international financial markets.

Trade dynamics grew increasingly fragmented as major economic blocs implemented protectionist measures, expanded industrial subsidies, and altered tariff frameworks. These shifts compelled multinational enterprises to restructure sourcing networks, accelerating near-shoring and friend-shoring initiatives to insulate operations against disruptions. While these strategic adaptations enhanced long-term structural resilience, they also imposed higher transitional costs and operational overheads.

Despite these headwinds, the broader macroeconomic landscape demonstrated notable endurance, anchored primarily by momentum across emerging markets. Global GDP expanded by roughly 3.4% in CY 2025, propelled by Emerging Market and Developing Economies (EMDEs) growing at 4.4%, while advanced economies registered a more subdued expansion of 1.9%. Global headline inflation moderated to an average of 4.1%, aided by the gradual normalisation of monetary policy stances and healing global supply lines.

Looking ahead, the global growth outlook remains measured. According to IMF World Economic Outlook data, global growth stabilized around 3.0% to 3.1%, supported by robust demand-driven momentum in the global technology cycle and artificial intelligence (AI) adoption. The World Bank projects global GDP growth of 2.5% in FY26 and 2.8% in FY27, reflecting the impact of continued geopolitical uncertainty, evolving trade policies, commodity price fluctuations, and tighter financial conditions. While global trade and investment activity are expected to remain resilient, the operating environment continues to warrant prudent policy measures, supply chain diversification, and strategic agility from businesses across industries.

INDIAN ECONOMY OUTLOOK:

Indias economic outlook remains positive. The Indian economy continues to be supported by strong domestic consumption, government infrastructure spending, and the services sector. The IMF currently projects Indias real

GDP growth at around 6.4% in 2026, while the RBI has raised its FY2026 27 growth forecast to 6.7%, reflecting resilience in domestic economic activity.

Inflation is emerging as an important concern. Indias retail inflation increased to 4.45% in July 2026, mainly because of higher food prices, although it remains within the RBIs 2 6% tolerance range. Rising crude oil prices and geopolitical tensions also pose risks because India is highly dependent on imported energy. A weak or uneven monsoon could further affect food prices and rural demand.

Overall, India is expected to remain one of the faster-growing major economies, supported by domestic demand, infrastructure development, digitalisation and continued investment. However, businesses need to monitor inflation, energy prices, global trade conditions, employment and private investment as key factors influencing future growth. The OECD also highlights higher energy costs and inflation as downside risks to Indias FY2026 27 growth.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Indias infrastructure and construction sector continues to remain a key driver of economic growth, supported by sustained public capital expenditure, urbanisation, industrial expansion and improving connectivity. The governments infrastructure strategy has increasingly shifted from individual asset creation towards integrated infrastructure development covering roads, railways, ports, airports, urban transport, logistics, power, renewable energy, water infrastructure and digital connectivity. The Economic Survey 2025 26 indicates that government capital outlay increased from 5.92 lakh crore in FY2021 22 to 11.21 lakh crore in FY2025 26, highlighting the sustained strength of the public investment cycle. Construction activity also continued to grow robustly, supported by infrastructure spending and the broader investment cycle.

The Union Budget 2026 27 reinforces this infrastructure led growth strategy. Capital outlay on Indian Railways has been budgeted at approximately 2.78 lakh crore, while capital outlay on roads and bridges stands at approximately 2.76 lakh crore. The increase over the FY2025 26 revised estimates reflects continued government commitment to highway development, expressways, railway expansion, new lines, track doubling and last-mile connectivity. Initiatives such as PM GatiShakti, the National Infrastructure Pipeline (NIP), the National Logistics Policy, industrial corridors and urban infrastructure programmes are improving coordination between different infrastructure networks and supporting more efficient movement of goods and people.

Indias logistics sector is also expanding rapidly. The logistics market was estimated at approximately US$317 billion in 2024 and is projected to reach about US$484 billion by 2029. The expansion of expressways, dedicated freight corridors, logistics parks, warehousing and multimodal transportation is expected to generate additional demand for construction and infrastructure services.

INDIAN INFRASTRUCTURE MARKET ANALYSIS:

Rapid urbanization is creating sustained demand for urban infrastructure. As cities expand, the need for roads, public transportation, metro networks, water supply, sewage systems, waste management, and other municipal infrastructure is increasing. While major metropolitan cities will continue to attract significant investment, Tier II and Tier III cities are emerging as important growth centres due to improving connectivity, industrialization, rising employment, and increasing economic activity. This trend is expected to create new infrastructure opportunities beyond Indias traditional metropolitan markets.

Digital infrastructure is becoming an increasingly important component of Indias infrastructure landscape. Rapid adoption of cloud computing, artificial intelligence, digital payments, 5G, and other technology platforms is increasing demand for data centres, fibre-optic networks, telecom infrastructure, and supporting power systems. The expansion of digital services and data-intensive industries is expected to make digital infrastructure one of the faster-growing segments of the overall infrastructure sector. The transition toward sustainable energy is also creating significant infrastructure opportunities. Investments in solar and wind power, electricity transmission, battery storage, green hydrogen, and other clean-energy technologies are expected to increase as India works toward its long-term energy and climate objectives. Infrastructure developers are also placing greater emphasis on energy efficiency, sustainable construction, resource conservation, and climate resilience, making sustainability an increasingly important consideration across new projects.

OUTLOOK:

The outlook for the Engineering & Construction (E&C) sector is cautiously positive, with growth anticipated to improve to around 6 8% in Financial Year 2026 27. The expected recovery is likely to be supported by a pickup in road project awards, alongside continued activity in water and other infrastructure segments. Order inflows are estimated to increase by nearly 10%, aided by higher government capital expenditure, longer project timelines and increased allocations under the Jal Jeevan Mission (JJM), as well as sustained investment across key infrastructure sectors. Diversified EPC companies are expected to remain better positioned, with revenue growth of approximately 8 10%, while companies with a higher dependence on road projects could continue to experience near-term challenges.

The infrastructure sector remains exposed to geopolitical risks, particularly developments in regions such as West Asia, which may affect commodity prices, supply chains and project execution timelines.

Going forward, greater use of digital technologies, tighter cost management and improvements in execution efficiency will remain important for companies seeking to enhance profitability and maintain their competitive position over the long term.

SUMMARY OF OUR BUSINESS:

Sonu Infratech Limited was originally formed and registered as partnership firm under the Partnership Act,1932 in the name and style of "M/s. Sonu Enterprises" pursuant to a deed of partnership dated September 2001.

Subsequently in the year 2017 under the provisions of the Companies Act, 2013 under the name of SONU INFRATECH LIMITED we registered ourselves with the Registrar of Companies, Ahmedabad as a public Company. We Are Government Approved and Accredited Civil Construction Contractor Having Registration from Military Engineer Services (Defense force) for Class B category of Building and Road projects.

Our Company Sonu Infratech Limited is an innovative company in the infrastructure sector, specializing in Civil Construction, Structural Painting, Mechanical Scaffolding, and Project Management. Our company thrives on blending engineering expertise with innovative solutions, consistently driving forward-thinking strategies to meet the evolving needs of the industry. With a dedicated team of skilled engineers and project managers, we approach every project with precision, ensuring timely execution and high-quality standards. Whether its complex construction, safe and efficient scaffolding systems, or durable structural coatings, we pride ourselves on our ability to turn ideas into reality, delivering value-driven results for our clients.

As an emerging leader in the sector, Sonu Infratech is committed to being at the forefront of engineering excellence, continuously exploring new technologies and methodologies that enhance our project delivery, improve efficiency, and exceed client expectations.

OUR BUSINESS OPERATIONS:

Sonu Infratech Limited operates across diverse sectors within the infrastructure industry. Our services are broadly categorized into the following key business segments:

- Civil Construction Services

We provide a wide range of civil construction solutions, including site development, foundation work, structural construction, and road infrastructure.

Civil Maintenance of Plants and Refineries:

Providing maintenance solutions for industrial plants and refineries, ensuring operational efficiency.

Construction of Cable Trenches/Culverts:

Specialized construction of cable trenches and culverts for utility and infrastructure purposes.

Warehouse Construction:

End-to-end construction of warehouses to support various industrial and commercial needs.

Sewage Treatment Plant (2.5 MLD):

Design and construction of Sewage Treatment Plants (STP) with a capacity of 2.5 MLD to handle industrial and residential waste.

RCC Tank Construction:

Building Reinforced Cement Concrete (RCC) tanks for storage and utility purposes.

RCC/Stone Drains:

Construction of RCC and stone drains for water management and drainage systems.

R.R./Brick/Block Boundary Walls:

Erection of boundary walls using R.R. stone, bricks, or blocks to ensure site security.

Building and Shopping Complex Construction:

From residential buildings to commercial spaces, we construct multi-purpose complexes.

Office Building Construction:

Tailored office spaces built to meet modern business requirements.

Labor Colony Construction:

Designing and constructing labor colonies to support workforce accommodation.

Heavy Foundations:

Laying heavy-duty foundations to support large structures and machinery.

Cooling Towers:

Construction of efficient cooling towers for industrial applications.

Area Grading:

Land grading services for proper drainage and leveling in construction zones.

Embankment and Soil Filling for Roads:

Embankment construction and soil filling for road infrastructure projects.

GSB, WBM/WMM Roadwork:

Granular Sub Base (GSB), Water Bound Macadam (WBM), and Wet Mix Macadam (WMM) for durable road construction.

Asphalt and RCC Roads:

Construction of roads using Asphalt and RCC to ensure durability and quality.

- Mechanical Services

Fabrication and Erection of Structures:

Full-service fabrication and erection of structural frameworks. Fabrication, Fitting, and Erection of Pipelines:

Expertise in pipeline fabrication, fitting, and installation, ensuring safe and efficient operations.

Erection of Electrical and Infocom Towers:

Installation of electrical and telecommunication towers to support power and communication networks. Pipeline Erection and Hydro Testing: Specialized pipeline installation with hydrostatic testing to ensure leak-proof performance.

Fabrication and Erection of Trusses and Purlins:

Structurally sound fabrication and erection of trusses and purlins for large-scale construction projects.

Fitting of G.I., ACC, and Pre-Coated Sheets:

Installation of galvanized iron (G.I.), Asbestos Cement Sheets (ACC), and pre-coated sheets for roofing and other structures.

Process Maintenance:

Comprehensive maintenance services for industrial processing units, ensuring smooth and efficient operations.

Chemical Dosing Systems:

Installation and maintenance of systems for accurate chemical dosing in various industries.

Standard Weights Calibration:

Calibration of industrial weights and measurement systems to ensure precision and compliance.

Anchoring:

Secure anchoring solutions for various infrastructure and construction projects Erection and Alignment of Motors and Pumps: Installation, alignment, and commissioning of industrial motors and pumps.

Fabrication and Erection of Rectangular Tanks:

Fabrication and installation of rectangular tanks for water storage and industrial applications.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has established a comprehensive and adequate system of internal controls that is commensurate with the size and nature of its operations. These controls are designed to ensure the safeguarding of assets against unauthorized use or disposal, the accuracy and reliability of financial reporting, and compliance with applicable regulatory requirements and company policies. The Internal Audit Reports are regularly reviewed by the Audit Committee of the Board.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

All activities of the company revolve around the main business and as such there is no separate reportable business segment and all the operations of the company are conducted within India as such there is no separate reportable geographical segment. Our Company has robust growth and improvement on Standalone and Consolidated basis in the Current and previous financial years which is explained below:

				(Rs. in Lakhs)
	Standalone-Year Ended		Consolidated-Year Ended
Particulars	31/03/2026	31/03/2025	31/03/2026	31/03/2025
Revenue From Operations	16952.22	14,921.94	19388.06	17030.47
Other Income	52.92	24.23	55.19	27.33
Total Income	17005.14	14,946.18	19443.24	17057.79
Less: Total Expenses before Depreciation,
Finance Cost and Tax	14384.39	12,775.96	16448.49	14627.05
Profit before Depreciation, Finance Cost and
Tax	2620.75	2,170.22	2994.75	2430.75
Less: Depreciation	552.65	399.43	589.83	431.15
Less: Finance Cost	529.01	442.11	645.56	514.37
Profit Before Prior Period Items and Tax	1539.09	1,328.68	1759.36	1485.23
Prior Period Items	-	-	-	-
Less: Current Tax	403.13	301.80	459.45	342.83
Less: Deferred tax Liability (Asset)	(2.09)	(38.12)	(2.81)	38.29
Less: Income Tax Prior period	-	-	-	-
Profit After Tax	1138.05	988.76	1302.72	1104.11

During the financial year 2025-26, the Company recorded a revenue from operations of 16,952.22 lakhs, as compared to 14,921.94 lakhs in the previous financial year 2024-25, registering a robust growth of 13.61%. This significant increase reflects the Companys continued focus on strengthening its core operations, expanding its market presence, and driving sustainable growth. Other income increased to 52.92 lakhs from 24.23 lakhs. Consequently, Total Income increased to 17,005.14 lakhs, compared with 14,946.18 lakhs in the previous year, reflecting a growth of approximately 13.78%.

Profitability also improved during the year. Profit Before Depreciation, Finance Cost and Tax increased to

2,620.75 lakhs from 2,170.22 lakhs. After providing for depreciation of 552.65 lakhs and finance cost of 529.01 lakhs, the Profit Before Prior Period Items and Tax stood at 1,539.09 lakhs, compared with 1,328.68 lakhs in the previous year, representing an increase of approximately 15.83%.

After accounting for current tax, deferred tax and other applicable tax adjustments, the Profit After Tax (PAT) increased to 1,138.05 lakhs, as against 988.76 lakhs in the previous year, registering a growth of approximately 15.10%.

The resilient increase in profitability is primarily attributed to higher operational revenues, improved operational efficiency, and better cost management across the business. The results underline the Companys strong financial discipline and its ability to capitalize on emerging opportunities in a dynamic business environment.

HEALTH, SAFETY AND ENVIRONMENT:

At Sonu Infratech Limited, we are fully committed to adhering to all applicable health, safety, and environmental regulations. We integrate these standards into every aspect of our operations to ensure a safe working environment. Despite the challenges posed by external factors, we have remained resolute in our mission to minimize our environmental impact and contribute positively to the planet.

To support the effective implementation of our safety policies, we take proactive measures at the start of each project. We conduct thorough assessments to identify potential material hazards and evaluate associated risks. Based on these assessments, we design and implement robust risk mitigation strategies and continuously monitor their effectiveness throughout the project lifecycle.

OPPORTUNITIES:

The Indian infrastructure and construction sector continues to offer significant growth opportunities, supported by increasing government capital expenditure, urbanisation, industrial development and growing investment in physical infrastructure. The key opportunities for the Company are as follows:

1. Infrastructure Development:

Continued investment in roads, bridges, urban infrastructure, industrial facilities and other public infrastructure is expected to create sustained demand for civil construction and engineering services. The Company can leverage its experience and execution capabilities to participate in suitable infrastructure projects.

2. Roads and Transportation:

The ongoing development and upgradation of highways, roads, internal roads, drainage systems and related infrastructure is expected to provide opportunities for construction companies. The Companys capabilities in road construction, embankment, GSB, WBM/WMM, asphalt and RCC works position it to benefit from this segment.

3. Industrial and Mechanical Infrastructure:

Expansion of manufacturing facilities, industrial projects, warehouses, plants and other industrial assets is expected to generate demand for civil, fabrication, erection, pipeline and maintenance services. The Companys integrated civil and mechanical capabilities provide opportunities to cater to such projects.

4. Water and Wastewater Infrastructure:

Increasing focus on water conservation, sewage treatment, drainage and wastewater management is expected to create long-term opportunities. The Companys experience in sewage treatment plants, RCC tanks, drains and related civil works provides a suitable platform to participate in this segment.

5. Defence and Strategic Infrastructure:

The continued focus on strengthening defence and strategic infrastructure is expected to generate opportunities for eligible construction and maintenance contractors. The Companys registration with Military Engineer Services (MES), subject to applicable terms and validity, provides an opportunity to participate in suitable defence-related projects.

THREATS, RISKS AND CONCERNS:

While the Indian infrastructure sector continues to benefit from strong policy support, increasing public and private investment and the countrys long-term infrastructure development requirements, the sector remains exposed to a number of external and operational risks. The Company continues to closely monitor these developments and has appropriate risk-management mechanisms in place to mitigate their potential impact:

The key threats and concerns for the infrastructure industry include:

Geopolitical uncertainties: Escalation of geopolitical tensions and regional conflicts may affect global trade flows, commodity prices, availability of critical materials and equipment, logistics costs and project execution.

Volatility in input costs: Infrastructure projects remain sensitive to fluctuations in the prices of steel, cement, fuel, bitumen, aggregates and other key construction materials. Sustained increases in input costs may exert pressure on project margins, particularly where cost escalation mechanisms are inadequate. Supply-chain disruptions: Global and domestic supply-chain disruptions may result in delays in the procurement and delivery of equipment, machinery and critical materials, potentially affecting project schedules and costs.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

The Companys relations with the employees continued to be cordial and harmonious with its employees. It considers manpower as its assets and that people had been driving force for growth and expansion of the Company. The Company acknowledge that its principal assets is it employees. The Company has continued its efforts in building a diverse and inclusive workforce. The total number of employees on roll in the Company as on 31^st March, 2026, including workmen, was 345. The Company will continue to focus on attracting and retaining competent talent, developing employee capabilities and creating opportunities for professional growth, while ensuring that recruitment and advancement remain merit-based and aligned with the evolving requirements of its business and projects.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE:

Particulars	Current Reporting Period	Previous Reporting Period	% of Change	Reasons
Current ratio	2.08	1.53	35.91	As proceeds from share
Current Assets	11,533.58	13,163.62		warrant conversion are utilized for working capital purpose, current liabilities
Current Liabilities	5,546.93	8,604.34		decreased. So ratio increases
Debt Equity Ratio	0.45	0.96	-53.31	Warrant conversion during
Debt	3,551.13	5,716.02		the year lead to increase in shareholders equity and the proceeds are utilized for working capital
Shareholders Equity	7,911.77	5,946.08		purpose, so debt also decreased. Which results in decrease in ratio
Debt Service coverage ratio	1.29	0.51	152.90	As capital expense in F.Y.
Net Profit/(Loss) before tax	1,539.09	1,328.68		2025-26 are less than preceding year, Earning
Add: Finance Cost	529.01	442.11		available for Debt services
Add: Depreciation	552.65	399.43		increases. So ratio
Less: Capital Exp.	523.57	1,518.62		increases
EBITDA-CAPEX	2,097.18	651.60
Debt Service (Int+Principal)	1,623.49	1,275.70
Return on Equity Ratio	0.17	0.23	-29.42	As construction related
Net Profit	1,138.05	988.76		expenses are increased in the current year, profitability is decreased in
Average Shareholders Equity	6,870.09	4,212.83		comparision of increase in revenue from operations, so ratio decreases
Inventory Turnover Ratio	2.26	1.89	19.51
				-
Cost of Construction	6,308.57	5,231.72
Average Inventory	2,795.14	2,770.35
Trade Receivables turnover ratio	2.24	2.35	-4.95	-
Net Sales	16,952.22	14,921.94

 

Particulars	Current Reporting Period	Previous Reporting Period	% of Change	Reasons
Avg. Trade Receivables	7,576.99	6,339.25
Trade payables turnover ratio	3.19	2.93	8.99
Total Purchases (Fuel
				-
Cost + Other	9,635.30	10,518.37
Expenses)
Avg. Trade Payables	3,021.13	3,594.35
Net capital turnover ratio	1.98	2.57	-22.77
Sales	16,952.22	14,921.94		-
Avg. Capital Employed	8,552.83	5,813.97
Net profit ratio	7.19	6.63	8.44
Net profit	1,218.05	988.76		-
Sales	16,952.22	14,921.94
Return on Capital employed	0.19	0.25	-20.80
Net Profit/(Loss) before tax	1,138.05	988.76
Add: Finance Cost	529.01	442.11		-
Earnings before interest and tax	1,667.06	1,430.87
Avg. Capital Employed	8,552.83	5,813.97

DISCLOSURE OF ACCOUNTING TREATMENT:

The financial statements of the Company have been prepared in accordance with Accounting Standard ("AS") notified under the Companies (Accounting Standards) Rules, 2021 read with section 133 of the Companies Act, 2013.

CAUTIONARY STATEMENT:

Statement in this report describing the Companys objectives projections estimates and expectation may constitute "forward looking statement" within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumption and expectations of future events. These Statements are subject to certain risk and uncertainties. The Company cannot guarantee that these assumption and expectations are accurate or will be realized. The actual results may different from those expressed or implied since the Companys operations are affected by many external and internal factors which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modified in future on the basis of subsequent developments information or events.