Suyog Gurbaxani Funicular Ropeways Ltd Management Discussions

GLOBAL ECONOMIC AND INDUSTRY OVERVIEW

The global ropeway and cable transportation industry is evolving from a predominantly tourism-oriented infrastructure segment into a broader mobility and transportation ecosystem. Ropeways, cable cars, gondolas and funicular systems are increasingly being considered for applications involving urban mobility, tourism, pilgrimage, last-mile connectivity and transportation across difficult terrain.

The increasing pressure on conventional transportation infrastructure, particularly in densely populated urban areas and geographically challenging regions, is creating opportunities for aerial transportation systems. Ropeways can provide an alternative where conventional road or rail infrastructure may involve significant land acquisition, extensive civil construction or difficult terrain-related engineering.

The industry is also witnessing greater adoption of technologically advanced systems, including detachable gondolas, tri-cable systems, automated control systems, digital monitoring, predictive maintenance and enhanced passenger safety mechanisms. These developments are improving system capacity, reliability, operational efficiency and passenger experience.

Sustainability is emerging as an important consideration in infrastructure planning. Ropeways generally require a comparatively limited ground footprint and can overcome significant changes in elevation without the extensive surface intervention that may be required for conventional road infrastructure. Consequently, cable-based transportation is increasingly being evaluated as part of sustainable and environmentally sensitive mobility solutions.

The global industry, however, remains capital intensive and technically specialised. Project development involves complex engineering, regulatory approvals, safety requirements, availability of specialised manpower, long implementation cycles and significant execution risks. Passenger volumes in tourism and pilgrimage projects may also remain sensitive to seasonality, weather conditions and broader economic factors.

Against this backdrop, the global outlook for ropeway infrastructure remains constructive, particularly in markets where governments and infrastructure developers are seeking alternative transportation solutions for challenging terrain, tourism destinations and congested urban corridors.

For SGFRL, these global developments are relevant primarily from the perspective of technology, project models, engineering practices and the increasing acceptance of ropeways as a mainstream transportation solution. The Company intends to leverage its experience in funicular and ropeway infrastructure while evaluating opportunities that are aligned with its technical capabilities and financial capacity.

INDIAN ECONOMIC OVERVIEW AND OUTLOOK

India offers significant growth opportunities for the ropeway sector, supported by strong government initiatives, increasing tourism and rising demand for sustainable transportation. The Governments National Ropeways Development Programme- Parvatmala Pariyojana aims to promote ropeway infrastructure through Public- Private Partnership (PPP), EPC and other development models to improve connectivity in hilly, remote and pilgrimage destinations.

The scale and nature of the projects demonstrate the transformation of ropeways from predominantly tourism- oriented infrastructure into major public mobility assets. The proposed Sonprayag-Kedarnath system, for example, is planned using advanced 3S technology and is expected to substantially reduce travel time for pilgrims while providing all-weather connectivity.

Apart from these flagship projects, ropeway developments are being planned or implemented at key religious and tourist destinations These projects are expected to improve accessibility, reduce travel time, promote sustainable mobility and enhance the overall tourism ecosystem.

With continued policy support, increasing investment in infrastructure, growing focus on green mobility and rising demand for efficient last-mile connectivity, the Indian ropeway sector offers substantial opportunities for companies engaged in the development, construction, operation and maintenance of ropeway systems. The Company is well positioned to leverage these emerging opportunities through its technical expertise, operational experience and established presence in the sector.

TOURISM, PILGRIMAGE AND URBAN MOBILITY AS KEY DEMAND DRIVERS

Indias tourism and pilgrimage ecosystem represents one of the strongest demand drivers for ropeway infrastructure. India has numerous high-altitude pilgrimage destinations, temples, hill stations, heritage locations and tourist attractions where road connectivity is either constrained by terrain or susceptible to congestion and seasonal disruptions. Ropeways can significantly improve accessibility while reducing travel time and providing an alternative to extensive road construction.

The growing emphasis on spiritual tourism and pilgrimage infrastructure is expected to create opportunities for ropeway systems connecting major religious destinations.

Urban transportation is another emerging opportunity. Ropeways can provide an efficient alternative in cities where conventional surface transport infrastructure is constrained by traffic congestion, limited right-of-way and high land costs. The Company believes that the convergence of tourism, pilgrimage, urban mobility and sustainable infrastructure could materially expand the Indian ropeway market over the medium to long term.

GOVERNMENT POLICY AND REGULATORY DEVELOPMENTS

The Government of India continues to promote ropeway infrastructure as a sustainable mode of transportation through the National Ropeways Development Programme - Parvatmala Pariyojana, aimed at improving connectivity in hilly regions, enhancing tourism and pilgrimage infrastructure, strengthening last-mile connectivity and decongesting urban areas. The programme provides opportunities for private sector participation through implementation models such as PPP, DBFOT, HAM and EPC.

Simultaneously, the regulatory framework continues to evolve with greater emphasis on safety, technical standards, certification and operational excellence, while initiatives under Make in India and Atmanirbhar Bharat are expected to strengthen domestic manufacturing capabilities within the sector.

These policy initiatives, coupled with an expanding project pipeline and increasing private sector participation, are expected to support the long-term growth of the ropeway industry. The Company is well positioned to leverage its expertise in funicular and ropeway development, project execution and operations to pursue suitable opportunities under Central and State Government infrastructure programmes.

INDUSTRY OPPORTUNITIES IN INDIA

The Company believes that the Indian ropeway sector offers opportunities across multiple segments:

a) Pilgrimage and Religious Tourism

Large pilgrim destinations across Uttarakhand, Maharashtra, Madhya Pradesh, Jammu & Kashmir, Himachal Pradesh, Gujarat and other States offer potential for ropeway connectivity.

b) Tourism and Hill Destinations

Ropeways can improve accessibility to hill stations, scenic destinations, adventure tourism locations and heritage sites while reducing pressure on existing road infrastructure.

c) Urban Mobility

Urban cable cars and ropeways can provide first-mile and last-mile connectivity and help address congestion in cities with geographical or infrastructure constraints.

d) Public-Private Partnerships

The increasing use of DBFOT and other PPP models provides opportunities for experienced private sector players to participate in long-term infrastructure projects.

e) Operations and Maintenance

As Indias installed ropeway base increases, there is likely to be growing demand for specialised operations, maintenance, inspection, modernisation and safety management services.

f) Technology and Engineering

Increasing demand for advanced gondola systems, funiculars, automated control systems, digital ticketing and safety technologies can create opportunities for companies possessing specialised technical capabilities.

g) Integrated Tourism Development

Ropeways can act as anchor infrastructure for broader tourism ecosystems comprising parking facilities, hospitality, food and beverage, retail, entertainment and other visitor services.

COMPANYS BUSINESS POSITION AND COMPETITIVE STRENGTHS

Suyog Gurbaxani Funicular Ropeways Limited (SGFRL or the Company) is one of Indias pioneering companies in the funicular ropeway sector, engaged in the development, construction, operation and maintenance of ropeway infrastructure. Since its incorporation in 2010, the Company has established a niche presence by executing projects that enhance connectivity to prominent pilgrimage and tourism destinations in geographically challenging terrains.

The Company has successfully developed and operates the Saptashrungi Gad Funicular Ropeway and the Haji Malang (Malanggad) Dargah Funicular Railway under the Build-Operate-Transfer (BOT) model, demonstrating its capabilities across the entire project lifecycle—from conceptualisation, engineering and execution to operations and maintenance. These projects have enabled the Company to build expertise in managing complex technical, regulatory and operational requirements while delivering safe, reliable and efficient transportation solutions.

SGFRLs competitive strengths lie in its specialised domain expertise, proven project execution capabilities, experience in operating ropeway systems in difficult terrains, strong understanding of regulatory and statutory requirements, and focus on safety, operational efficiency and passenger experience. The Company also benefits from its experience in pilgrimage and tourism infrastructure, effective stakeholder coordination and its ability to execute projects requiring specialised engineering and operational capabilities.

With the Governments continued emphasis on ropeway infrastructure under the Parvatmala Pariyojana and increasing private sector participation, the Company is well positioned to leverage its established track record and technical expertise to pursue commercially viable opportunities across the ropeway, tourism and urban mobility sectors. Its focused presence in a specialised infrastructure segment provides a strong foundation for sustainable long-term growth as the Indian ropeway industry continues to evolve.

FUTURE OUTLOOK

The outlook for the Indian ropeway sector remains positive, supported by continued Government policy initiatives, the National Ropeways Development Programme- Parvatmala Pariyojana, increasing pilgrimage and domestic tourism, growing urban congestion and the need for sustainable transportation solutions.

With ropeways increasingly being recognised as an integral part of Indias mobility and tourism infrastructure, the Company is well positioned to leverage its expertise in funicular ropeway development, project execution and operations. SGFRL intends to selectively pursue opportunities in pilgrimage and tourism destinations, urban mobility projects, public-private partnership (PPP) projects, EPC contracts, operations and maintenance services, and the modernisation of existing ropeway systems.

The Company will continue to adopt a prudent and disciplined approach towards growth, with a strong focus on technical feasibility, financial sustainability, operational excellence, passenger safety and long-term value creation. Backed by its established track record and specialised capabilities, SGFRL remains well placed to capitalise on emerging opportunities in Indias evolving ropeway infrastructure sector.

THREATS, RISKS AND CONCERNS

The Companys business is exposed to various operational, regulatory, financial and market-related risks inherent in the development and operation of funicular and ropeway infrastructure. The principal risks and the Companys approach towards managing them are outlined below:

Regulatory and Approval Risks:

Funicular and ropeway projects involve multiple statutory, technical, environmental, land and local authority approvals. Delays or changes in regulatory requirements may affect project implementation and timelines. The Company seeks to address these risks through timely compliance, regulatory coordination and appropriate project planning.

Project Execution and Site Risks:

Projects in hilly and challenging terrains may involve difficult geological conditions, limited accessibility, adverse weather and complex logistics, which can impact construction schedules and project costs. The Company seeks to mitigate these risks through detailed technical assessment, experienced project management and continuous monitoring of project execution.

Operational and Safety Risks:

Safety and reliability are critical to the Companys operations. Equipment failure, inadequate maintenance, extreme weather conditions or operational issues could affect passenger safety, business continuity and the Companys reputation. The Company focuses on preventive maintenance, periodic inspections, adherence to applicable safety standards and established operating procedures.

Passenger Footfall and Revenue Risk:

The Companys projects, particularly those serving pilgrimage and tourism destinations, are dependent to an extent on passenger footfall. Seasonal variations, adverse weather, changes in tourism patterns and unforeseen events may affect passenger volumes and revenues. The Company monitors operating trends and focuses on maintaining service reliability and passenger experience.

Financial and Funding Risks:

Ropeway projects are capital intensive and may require substantial upfront investment and long-term financing. Changes in interest rates, availability of financing and project costs may impact project viability and returns. The Company follows a prudent approach towards project selection and financial commitments.

Natural Calamities and Environmental Risks:

The Companys projects may be exposed to landslides, heavy rainfall, high winds, earthquakes and other natural events, particularly in hilly regions. Environmental restrictions and stakeholder considerations may also affect project development. Appropriate technical assessments, compliance measures and operational safeguards are adopted to manage these risks.

Competition and Market Risks:

As the Indian ropeway sector develops, competition from established infrastructure developers, EPC contractors and specialised ropeway companies may increase. The Company seeks to leverage its specialised experience, project execution capabilities and established presence in the funicular and ropeway segment to remain competitive.

Technology and Maintenance Risks:

Ropeway systems require specialised equipment, technology and regular maintenance. Technological changes or equipment-related issues may necessitate upgrades and additional investments. The Company focuses on preventive maintenance, technical monitoring and adoption of appropriate technologies to ensure operational efficiency and reliability.

The Company follows a prudent and risk-conscious approach to identify, assess and mitigate risks through technical due diligence, regulatory compliance, experienced project management, preventive maintenance, safety protocols and continuous monitoring. While risks cannot be completely eliminated, the Company endeavours to minimise their potential impact on operations and long-term business performance.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has established internal control systems and procedures commensurate with the size, nature and complexity of its operations. These controls are designed to ensure effective and efficient operations, reliability of financial reporting, safeguarding of assets and compliance with applicable laws, regulations and internal policies. Considering the Companys business in the funicular and ropeway infrastructure sector, the internal control framework places particular emphasis on project expenditure, procurement, financial controls, operational safety, maintenance activities, statutory compliances and monitoring of project and operating performance. Appropriate authority levels and approval mechanisms are followed for key financial and operational decisions.

The Company undertakes periodic internal reviews and audits of its operations and financial processes. Significant observations, wherever identified, are reviewed by the management and appropriate corrective measures are undertaken. The internal control framework is also supported by systems for monitoring statutory and regulatory compliances and ensuring timely fulfilment of applicable obligations.

The management believes that the Companys internal control systems are adequate and commensurate with its present scale and nature of operations. The systems are periodically reviewed and strengthened to address emerging risks, operational requirements and changes in the regulatory environment.

OPPORTUNITIES

The Company operates in a specialised and growing segment of the infrastructure sector, with its experience in funicular and ropeway projects serving pilgrimage and tourism destinations providing a strong foundation for future growth. The key opportunities available to the Company include:

Expansion in Ropeway and Funicular Projects:

The increasing adoption of ropeways as an alternative mode of transportation creates opportunities for the Company to leverage its experience in project development, execution and operations. The Companys experience at Saptashrungi Gad and Haji Malang (Malanggad) Dargah provides a practical understanding of the technical, operational and passenger-management requirements of such projects.

Parvatmala Pariyojana:

The Governments focus on developing ropeway infrastructure under Parvatmala Pariyojana is expected to generate opportunities across pilgrimage, tourism and challenging terrains. The Company can utilise its sector-specific experience to evaluate and participate in suitable projects, either independently or through appropriate partnerships and project structures.

Pilgrimage and Tourism Destinations:

The Companys established experience in projects connected with pilgrimage destinations positions it to pursue similar opportunities across India. Ropeways and funicular systems can provide efficient access to destinations where conventional road connectivity is constrained by terrain, congestion or environmental considerations.

Operations and Maintenance Opportunities:

The Companys experience in operating funicular infrastructure provides an opportunity to expand its presence in operations and maintenance services. As the number of ropeway installations increases, demand for specialised technical operations, preventive maintenance and passenger-management capabilities is expected to grow.

Urban and Emerging Mobility Applications:

The increasing requirement for sustainable and space-efficient transportation solutions may create opportunities for ropeway systems in urban and semi-urban locations. The Company can selectively explore such projects where its technical capabilities and operating experience are relevant.

Modernisation and Upgradation:

The existing ropeway ecosystem may require periodic refurbishment, technological upgrades, safety enhancements and modernisation. The Companys operational experience provides an opportunity to participate in such assignments and build recurring business opportunities.

Strategic Partnerships:

Given the technical and capital-intensive nature of large ropeway projects, the Company may explore strategic partnerships, consortium arrangements and collaborations with technology providers, EPC contractors and infrastructure developers to access larger and more complex projects.

The Company intends to pursue opportunities in a selective and disciplined manner, focusing on projects where its existing technical expertise, execution capabilities and experience in pilgrimage and tourism infrastructure provide a competitive advantage. This approach is expected to enable the Company to build upon its existing capabilities while managing project, financial and execution risks.

COMPANYS OPERATIONAL PERFORMANCE AND HIGHLIGHTS

During FY 2025-26, Suyog Gurbaxani Funicular Ropeways Limited (SGFRL) continued to strengthen its position in the specialised funicular and ropeway infrastructure segment. Despite a decline in revenue during the year, the Company maintained healthy profitability and operational performance, supported by effective cost management and its established project and operational capabilities.

The Company recorded EBITDA of f23.89 crore, compared with f 17.51 crore in FY 2024-25, while Profit After Tax stood at f 11.15 crore. The Company reported a Return on Equity (ROE) of 37.10%, reflecting efficient utilisation of shareholders funds. Operating cash flow during the year stood at f 13.47 crore. Interest cost and employee costs remained at approximately 11.84% and 18.33% of operating revenue, respectively.

The Company continued to focus on strengthening its project pipeline and expanding its presence across the ropeway and funicular segment. Its ongoing and proposed projects provide a platform for future growth and further development of its capabilities in project execution and operations.

The Company remains focused on selective project development, timely execution, operational efficiency and strengthening its project pipeline, while leveraging its specialised experience in funicular and ropeway infrastructure to pursue emerging opportunities in the pilgrimage, tourism and mobility sectors.

HUMAN RESOURCES

Human resources remain a key enabler of the Companys growth strategy. The ropeway sector requires a combination of technical, engineering, project management, operations, safety, regulatory and customer-service capabilities. Accordingly, the Company continues to focus on attracting, developing and retaining personnel with appropriate technical and managerial skills.

The Company promotes a work environment based on professionalism, accountability, learning, teamwork, safety awareness and continuous improvement. Employee development, effective utilisation of manpower, performance evaluation and appropriate training remain important elements of the Companys human resource strategy.

The employee strength of the Company was 214 employees as at March 31,2026.

STANDALONE PERFORMANCE (FY 2025-26 VS. FY 2024-25)

(Rs. In Crore)

Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	47.16	53.01
EBITDA	23.89	17.51
EBIT	17.29	10.90
Profit Before Tax	10.34	8.17
Profit After Tax	11.15	8.69
Profit Margin (%)	23.58	16.39
Reported Earnings Per Share (Rs)	4.48	3.50

KEY FINANCIAL RATIOS INDICATING SIGNIFICANT CHANGES AS COMPARED TO THE PREVIOUS FINANCIAL YEAR

Sr. No. Ratios	March 31, 2026	March 31,2025	% Deviation
1 Current Ratio	4.69	2.41	94.61
2 Debt Service Coverage Ratio	0.24	0.22	9.09
3 Return on Equity Ratio	0.37	0.43	-13.95
4 Inventory Turnover Ratio	0.31	1.10	-71.82
5 Receivable Turnover Ratio	5.33	2.52	111.51
6 Payable Turnover Ratio	NA	NA	NA
7 Net-working Capital Turnover Ratio	0.91	1.25	-27.20
8 Net Profit Ratio	0.24	0.16	50
9 Return on Capital Employed Ratio	0.13	0.10	30
10 Return on Investment	NA	NA	NA

CAUTIONARY STATEMENT

This Management Discussion and Analysis Report contains certain forward-looking statements concerning the Companys business, strategy, growth prospects, industry trends and future plans. These statements are based on certain assumptions and expectations and are subject to various risks and uncertainties.

Actual results may differ materially from those expressed or implied in such statements due to factors including changes in economic conditions, Government policies, regulatory requirements, project approvals, availability of financing, interest and foreign exchange rates, project execution delays, natural calamities, passenger footfalls, technological developments, competition and other unforeseen circumstances.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, developments or otherwise, except as may be required under applicable laws and regulations.