SPML Infra Ltd Management Discussions

The global economy, after experiencing several disruptions between 2020 and 2024, continues to face headwinds in 2025.

Rising trade barriers, regional conflicts and heightened policy uncertainty by leading nations have contributed to a widespread slowdown in growth and weakening of economic prospects across major countries.

The International Monetary Fund (IMF) expects the global economy to grow by 3.3% in both 2025 and 2026, which is slower than the pre-pandemic average of 3.7% seen between 2000 and 2019. Although the overall forecast remains unchanged, stronger growth in the United States has been balanced out by weaker outlooks in other advanced and emerging economies. This difference highlights ongoing trade disruptions and a lack of coordination in policies across countries. Advanced economies are likely to face slow economic growth and continued low inflation. Global inflation is expected to drop to 4.2% in 2025 and decline further to around 3.5% in 2026.

When a country wise comparison is made, it is noticed that global growth for CY2025 will not be uniform. As per I M F W o r l d Economic Outlook, developing economies growth performance for 2025 and 2026 is expected to be broadly in line with the performance in 2024, with Indias growth projected at 6.5% and is expected to outperform several other economies. China is projected to grow by 4.6% while Middle East and Central Asia is expected to grow by 3.6%. Advanced economies such as the United States and Japan are projected to post moderate growth, amid evolving global and domestic economic conditions.

GLOBAL INFRASTRUCTURE OUTLOOK

Infrastructure across many developing regions remains inadequate, with significant gaps in access to water, roads, electricity, sanitation, and digital connectivity. According to the World Bank, an estimated one billion people live more than 2 kilometers from an all season road; around 675 million people lack access to electricity and nearly 4 billion people live without access to the internet. Over 2.2 billion people live without proper access to clean drinking water and sanitation facilities. All these disruptions caused by inadequate infrastructure lead to losses worth several hundred billion dollars every year. Investment in sustainable infrastructure is necessary to ensure people get the much needed access to opportunities, encourage economic growth and improve livelihood. Sustainable infrastructure also leads to reduced carbon footprints through the much popular renewable energy route.

Improving global infrastructure is the key to unlocking growth and ensuring equal access to better living conditions. The World Bank has made sustainable infrastructure a top priority, investing over $13 billion in renewable energy and around $5.5 billion in energy efficiency. As the largest multilateral funder of urban development, it also works with governments to build more livable and resilient cities, investing about $5 billion each year in this effort.

Currently the infrastructure development market size is estimated to stand at $2.89 trillion in 2025 which is expected to reach $3.92 trillion by 2030 growing at a CAGR of 6.27% during the period of 2025-2030. It is estimated by PWC that the Asia Pacific

Market, led mainly by Chinas growth will represent around 60% of global infrastructure spending and growing urbanization in emerging markets including China, Indonesia and Nigeria may boost spending allocation for vital infrastructure sectors such as water, power and transportation.

INDIAN ECONOMY

With IMF projections of 6.2% real GDP growth, India stands as one of the fastest growing economies in CY2025. S&P Global ratings has also raised Indias GDP growth forecast and has projected it to be at 6.5%. This optimistic projection has stemmed from various factors including normal monsoon expectations which will benefit agriculture sector to a great extent, lower crude oil prices given that India is heavily dependent on energy imports, monetary policy support and income tax concessions. S&P Global Ratings growth projections also align with the RBIs forecast of 6.5% GDP growth made recently.

These projections are notable given the fragile state of the global economy, influenced by geopolitical tensions and policy shifts.

Taking all these conditions into consideration, the RBI in its June 2025 bulletin stated that Indian economy remains resilient and continues to expand steadily which is a good sign.

On GDP per-capita basis, as per IMF projections, India stands as the fifth largest economy in the world in the year 2025 and stands at par with Japan with a nominal GDP of $4.19 trillion and with IMF forecasting that by 2027, India is expected to overtake Germany to become the third largest economy in the world bodes well for a country with a population of around 1.46 billion. With a strong growth prospect GDP wise projected by the IMF at 6.5% for FY25, Indias economic growth in the next fiscalyear will be faster than major economies. Over time, India has demonstrated significant economic progress, moving from the 10 ^th largest economy in 2014 to being among the top

INFRASTRUCTURE SECTOR IN INDIA

Just as the global scenario, Infrastructure development is of key importance in India. Indias urban population, already substantial, is projected to expand significantly, reaching approximately 900 million by 2047. Urbanization is not happening at the same pace everywhere; some regions are experiencing much faster growth in cities than others. Such rapid urbanization calls for the need of urgent reforms in infrastructure planning and implementation. Challenges like poor living conditions, environmental problems, and resource depletion make the situation worse. These issues continue to put pressure on already limited resources; especially water, which is rapidly declining compared to the growing demand.

INITIATIVES BY THE GOVERNMENT TO BOOST INFRASTRUCTURE SECTOR

Public Infrastructure is the main pillar of economic growth and essential to improve connectivity, trade and overall quality of life. Reflecting this, India has made substantial progress infrastructure development over the past decade, supported by both public and private sector investment. The total infrastructure investment has increased significantly with both public and private sector contributions paving a growth trajectory and had stood at RS 10 trillion during 2023-24.

Indias Finance Minister in the Budget has also stressed on the importance of Infrastructure and has accordingly made provisions for the same. Its encouraging to see growing emphasis on Public-Private Partnerships (PPPs) in infrastructure development. Each infrastructure-related ministry is now required to prepare a three-year pipeline of projects that can be implemented through the PPP model. States are also encouraged to gain support from the India Infrastructure Project Development Fund to work towards strong PPP proposals. The Urban Challenge Fund of RS 1 trillion to implement proposals for cities as growth hubs, creative redevelopment of cities and water and sanitation are other strong proposals that will go a long way towards ensuring sound infrastructure plans for the country.

Other initiatives include the PM Gati Shakti National Master Plan, launched in 2021, aimed at facilitating integrated planning and coordinated implementation of infrastructure projects. As of October 2024, a total of 44 Central ministries and 36 States/ Union Territories have been on boarded and a total of 1,614 data layers have been integrated.

WATER INFRASTRUCTURE

Indias rapid economic growth has not been matched by uniform progress in water infrastructure. Even today, several urban areas remain dependent on water tankers, while rural communities continue to rely on borewells. In many regions, access to safe drinking water remains limited. As per government estimates, Indias per capita water availability has declined from 1,816 cubic meters in 2001 to 1,486 cubic meters in 2021 and is projected to fall further to 1,341 cubic meters by 2025. Combined with rapid urbanization and uneven distribution of water resources, these trends place India in the category of a water-stressed nation.

The World Economic Forums Global Risks Report 2025 has identifiedwater scarcity as one of the most critical environmental challenges globally. In India, the issue extends beyond availability to include quality, with large segments of the population exposed to polluted and undrinkable water. These challenges underscore the urgent need for a shift from reactive to proactive water infrastructure planning.

In response, the Government has made targeted interventions. Under the Jal Jeevan Mission, launched in 2019, around 156 million rural households accounting for 80% of the rural population have been provided with tap water connections. The Mission has now been extended until 2028 with an enhanced outlay, aimed at achieving 100% rural coverage. In addition to expanding reach, the current phase places emphasis on infrastructure quality, long-term operations and maintenance, and community participation through the "Jan Bhagidari" model. Separate MoUs signed with states and union territories are expected to improve sustainability and service delivery.

At the time of its inception, only 17% of rural households had access to piped drinking water, indicating the scale of progress made. Complementing this, AMRUT 2.0 aims to ensure universal tap water and sewerage access in urban areas. As of February 2025, the scheme has facilitated over 58.6 lakh tap water connections and 37.5 lakh sewerage connections.

Another major initiative is the Ken-Betwa River linking project, launched in December by the Honble Prime Minister. With an estimated cost of RS 44,605 crore, the project aims to transfer surplus water from the Ken River in Madhya Pradesh to the Betwa

River, benefiting 4.4 million people across 12 districts in Madhya

Pradesh and 2.1 million people across 10 districts in Uttar Pradesh. Beyond potable water supply, the project is expected to generate 103 MW of hydropower and 27 MW of solar power.

Together, these initiatives reflect the governments strategic focus on long-term water security and infrastructure resilience, essential to supporting inclusive growth and safeguarding Indias future water needs.

BATTERY ENERGY STORAGE SYSTEM (BESS)

The continuing climate crisis and global warming has changed the way the world look at the energy usage. Renewable energy has firmly established itself as a reliable and cost-power with lower emissions. It plays a crucial role in advancing Sustainable Development Goal 7, which focuses on ensuring access to affordable and clean energy for all. India is also rapidly shifting the energy sources from fossil fuels and making its way towards utilizing renewable energy sources which is evidenced by the foray into solar, wind and various other renewable energy projects. India has also taken various initiatives to increase the share of renewable energy. Indias electricity generation has reached a capacity of 476 GW of which as of May 2025, renewable energy-based electricity generation capacity stands at 227 GW, accounting for more than 47.6 percent of the countrys total installed capacity. This feat highlights a major movement of Indias energy landscape which reflects the countrys growing need of cleaner and non-fossil fuel based energy

While on-going initiatives involves shift of operations to cleaner and greener energy sources, storage and integration of renewable energy has more challenges in comparison to traditional energy sources which creates issues in generation of electricity which could be relied upon and consistent. Renewable energy sources like solar and wind generate energy during the favorable weather and the energy must be used immediately which unless stored will be wasted.

These challenges have highlighted the need for robust energy storage solutions to ensure grid stability and reliability. Battery Energy Storage Systems (BESS) have emerged as a critical enabler in the transition to renewable energy. By storing surplus power for use during periods of low generation or high demand, BESS helps mitigate supply disruptions caused by weather variability, power outages, or geopolitical factors. Its advantages of affordability, scalability, quick deployment, and locational flexibility make it well-suited to manage the intermittency and reliability challenges associated with renewable energy integration. BESS currently forms a very important part of Indias goal towards sustainability and renewable energy focus.

As per National Electricity Plan 2023, introduced by Central Electricity Authority (CEA), Indias energy storage requirement from BESS is estimated to increase to 34.72 GWh in 2026-27 and looking at how renewable energy production is set to increase the classified requirement is poised to reach 1,840 GWh by 2047. The estimated cumulative market size is expected to reach ~USD 443.4 billion by 2047. In 2024, the Indian government has approved a Viability Gap Funding (VGF) scheme which is focused towards establishing 4,000 MWh of BESS projects by 2030-31. The scheme has an overall outlay of RS 9,400 crore, including a budgetary allocation of RS 3,760 crore, and aims to provide financial assistance of up to 40% of the capital cost. Project approvals are expected over a three-year window from FY2023–24 to FY2025–26, with disbursements scheduled across five installments, continuing through FY2030–31.

In July 2022, the Ministry of Power has also notified energy storage obligations for solar and wind energy wherein the obligations are set to increase from 1% in FY2023-24 to 4% by FY2029-30 accounting for an annual increase of 0.5% and in order to meet these obligations 85% of the energy stored in BESS must be a part of renewable energy. xecution

The necessity for BESS integration in India also stems from Indias commitment towards addressing climate change which is in its net zero goals outlined during COP26 in Glasgow. India has committed to reduce its emission intensity by 45% by 2030 and to achieve 50% of energy requirements through renewable energy sources. All these goals successfully align with the countrys ultimate focus towards achieving net zero emissions by 2070 which highlights the commitment made towards addressing climate change and leading global environmental progress efforts. One of the first few steps to meet the BESS integration goals has been initiated in Delhi as a pilot project. This includes the commissioning of 20 MW/40 MWh BESS project at Kilokari substation to provide electricity to 12,000 low income consumers. This is a milestone for Indias energy storage requirements and also paves the way for Indias ambitious vision of 50 GW of energy storage by 2030. Indias dedication towards renewable energy generation is also clear in terms of annual electricity generation trends over the years

States like Rajasthan are emerging as leaders in renewable energy, with an impressive installed capacity of 29.98 GW, closely followed by Gujarat, Tamil Nadu, and Karnataka. With an investment potential of RS 5 trillion in this sector, the widespread adoption of Battery Energy Storage Systems (BESS) could help emissions. Many

India avoid nearly 2,000 million tons of CO2

major companies have already secured large BESS projects, reflecting strong investor confidence. Backed by supportive policies and advancing technology, BESS has the potential to be a game changer in accelerating clean energy adoption and is gr in the coming years. poisedforsignificant

COMPANY OVERVIEW

SPML Infra Limited is a leading infrastructure development company in India, with primary focus on the water supply and power segments. Incorporated in 1981, the Company has over four decades of execution experience, particularly in delivering integrated water supply schemes and energy infrastructure projects across urban and rural geographies.

The two Companys operations are broadly key segments:

Water Infrastructure - Involves the design and execution of water supply networks, water treatment plants, and distribution systems catering to both municipal and state-level programs.

Power Infrastructure - Focused on the transmission and distribution, substation and deployment of Battery Energy Storage Systems (BESS) to support grid stability, renewable energy integration, and peak demand management.

SPML Infra has successfully completed over 700 projects across India under various implementation models, including EPC (Engineering, Procurement and Construction), PPP (Public-Private Partnership), and BOOT (Build-Own-Operate-Transfer). The Company continues to focus on projects with high technical prequalification thresholds, in line with its strategy to improve efficiency. profitability and

During the year under review, the Company undertook several reflected strategic initiatives, including the settlement of long-standing receivables under the Vivad se Vishwas scheme, which contributed to easing working capital constraints. Additionally, a preferential equity issuance helped bolster the capital base, further improving liquidity and financial flexibility.

In recognition of these developments and the Companys strengthened financial profile, ICRA upgraded SPML Infras credit rating during the year to BBB- (Stable). The rating action reflects the Companys improved liquidity position, stable operating performance, and efforts toward deleveraging.

As a publicly listed and ESG-complaint organization, SPML Infra remains committed to providing sustainable infrastructure solutions that align with national priorities such as water access, sanitation, and clean energy. With a robust order book and disciplined execution, the Company is well-positioned to capitalize on sectoral tailwinds and drive long-term shareholder value.

WATER INFRASTRUCTURE OVERVIEW AT SPML

Water Infrastructure has always been the point of importance for SPML Infra. The company welcomes the governments decision to extend the Jal Jeevan Mission until 2028 for 100% coverage of rural households with extended outlay.

The company in CY2025 has secured three important projects across Jharkhand and Tamil Nadu, reinforcing its execution presence in irrigation and urban water infrastructure.

The first is a turnkey irrigation project awarded by the Water

Resources Department under the Konar Irrigation Scheme in Hazaribagh, valued at approximately RS 618 crore. The project aims to improve irrigation coverage across 12,600 hectares in the districts of Hazaribagh, Bokaro, and Giridih. The scope includes rehabilitation of the main and branch canals, construction of an approach channel and solar-powered pump house, and installation of a modern pipe-based distribution network with advanced flow control systems. A 10-year operation and maintenance component is also part of the contract, ensuring long-term functionality and asset sustainability.

The second is a water infrastructure project awarded by the Chennai Metropolitan Water Supply and Sewerage Board in June 2025, with a total value of RS 258 crore. The project has been awarded to a consortium of SPML Infra (26%) and JWIL Infra (74%). It involves construction and commissioning of a reservoir in Porur, development of a pumping station, and associated infrastructure work in Perur and Porur. The contract includes a 20-year O&M period, reflecting the projects critical role in enhancing

Chennais urban water resilience.

The Company has secured a RS 385 crore project in July 2025 for the water production and supply system for the Kekri-Sarwar Sector Package-III in Ajmer, Rajasthan, under the Jal Jeevan Mission. The project includes a comprehensive 10-year Operation and Maintenance (O&M) contract and aims to upgrade the water infrastructure in the Kekri-Sarwar region by enhancing water production and distribution using water drawn from the Bisalpur Dam. This major initiative will improve water supply for approximately 2.58 million people across both urban and rural areas of Ajmer district, supporting the national goal of providing safe and reliable drinking water to every household.

SPML has been recently awarded a prestigious Rs. 1,073 Crore (inc. of GST) project by Indore Municipal Corporation for the augmentation of the water supply system under the AMRUT 2.0; an ambitious initiative launched by Govt. of India with the goal of making Indian cities "water secure" and self-reliant. The project also includes a comprehensive 10-year Operation & Maintenance (O&M) contract

In line with its continued focus on water infrastructure, the Company currently has an order book of approximately RS 4,500 crore, with an additional RS 2,200 crore under L1 status. The order pipeline reflects SPML Infras strategy of pursuing fully funded, high-margin projects with a sharp focus on bottom-line growth.

As one of Indias leading water management companies, SPML Infra has played a pivotal role in delivering clean drinking water to over 50 million people across rural and urban regions. The Company also achieved its highest-ever global ranking, 14^th in the latest Global Water Intelligence (GWI) survey conducted in London placing it among the worlds top 50 water companies.

BESS OVERVIEW AT SPML

With strong pre-qualifications in water infrastructure projects, the company also meets the high entry standards required for the Battery Energy Storage System (BESS) segment. Backed by projections from the National Electricity Plan and the Central Electricity Authority, the company expects substantial demand for BESS projects and has proactively positioned itself to secure a significant share of orders in this emerging sector.

SPML Infra has in April entered into an exclusive collaboration with Energy Vault of USA, a global leader in sustainable energy solutions, and this agreement is set to accelerate the manufacture and deployment of Energy Storage Systems in India by facilitating technology transfer. This partnership is also set to boost Indias green energy sector wherein the company will get to exclusively use Energy Vaults B-Vault BESS innovative technology and Vault OS EMS software with increased availability of reliable and cost effective clean energy for people across India.

This agreement will also enable SPML Infra to deploy multi-GWh of BESS in support of Indias renewable energy scale up and storage needs generating at least 500 MWh renewable energy over the next 12 months and minimum targeted volume of 30-40+ GWh over the period of 10 years. The company has also been allotted 99,000 square meters of land by Maharashtra Industrial Development Corporation which is located in Supa Parner Industrial Park, Ahmednagar, Maharashtra for establishment of the BESS manufacturing units.

With this collaboration along with allotment of land, the company is poised to solidify its position as a leading player in the Indian BESS market.

FINANCIAL OVERVIEW

In RS Crore (Standalone)	FY24	FY25
Revenue	1,331	824
EBITDA	78	98
EBITDA Margins (%)	5.8	11.9
PAT	20	49
PAT Margins (%)	1.5	6.0

The Company continued its strategic focus on bottom-line performance over topline growth during the year. Revenue declined on a year-on-year basis, partly due to a lower volume of tenders floated under the Jal Jeevan Mission. However, with a revival in tender activity and a strong L1 pipeline, the Company is well-positioned to secure additional orders in FY2026, which is expected to support topline improvement going forward.

It is important to note that the financial results for FY2024 reflect the impact of internal restructuring initiatives and gains arising from the Vivad se Vishwas (VSV) Scheme. As a result, year-on-year financial comparisons may not be strictly indicative of underlying performance trends.

EBITDA has improved during the year, supported by disciplined cost management, efficient cash flow generation, and working capital reduction through the use of escrow mechanisms. A greater emphasis on high-margin, fully funded water EPC projects also contributed to the margin expansion. The Company will of continue to prioritize profitability its long-term strategy.

In RS Crore (Standalone)	FY25	FY24
Net Worth	819	509
Debt*	379	558

*Aforesaid Debt figure is after accounting for IND AS Requirements

The Company has continued to strengthen its balance sheet. Concurrently, total debt reduced from RS 558 crore to RS 379 crore over the same period. This trajectory reflects the Companys commitment to achieving a debt-free position within the agreed timelines. The total agreed amount with NARCL to be paid in

8 years inclusive of interest was RS 700 crore, out of which the company has already repaid RS 290 crore and the balance amount is to be paid mainly through the companys awards in hand and the awards which are expected to be received going forward from the claim already filed. This eliminates any pressure from the cash flow of the company towards the repayment of the loan inclusive of interest.

CAUTIONARY STATEMENT

Some statements within the context of Management Discussion and Analysis are forward-looking and are presented as mandated by relevant laws and regulations. It is important to note that the

Companys future performance might be influenced by a multitude of factors that could deviate from the Directors envisioned future performance and outlook.