SVC Industries Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR THE FINAN CIAL YEAR-2025-26

1. Introduction

The financial year 2025-26 marks an important transition in the strategic direction of SVC Industries Limited ("SVC" or "the Company"). Agriculture, warehousing, and commodity trading have historically constituted the Companys principal business activities and have provided the foundation on which the Company has built its operating capabilities.

The Company now proposes to build upon this foundation and progressively diversify into Defence, Green Energy, Real Estate and Exploration & Mining, in addition to continuing its Agriculture business. The proposed expansion will focus on opportunities in India and selected markets in Africa. Following extensive evaluation and consultation with external advisers, the Company has decided to explore monetization of its existing land bank and deployment of the resulting capital towards next-generation and growth-oriented sectors. The Companys strategic vision is built around four interconnected themes:

Food Security National Security Energy Security Mineral Security

The objective is to transition from a predominantly agriculture and commodity-oriented business towards a diversified industrial and infrastructure platform with an India-Africa focus. The Companys promoters have a longstanding experience in implementing projects in Africa, providing the Company with market familiarity and relationships as it evaluates opportunities across selected African markets, including mining and processing.

The Company believes that the timing of this transition is significant. India is witnessing strong investment in defence manufacturing, energy infrastructure, renewable power, critical minerals and industrial capacity. At the same time, several African economies are seeking investment in energy, minerals, infrastructure, defence capability and local industrialization. These developments create a broad opportunity landscape in which the Company can progressively deploy capital, develop strategic partnerships, and participate in sectors with long-term structural demand.

The Company will continue its Agriculture operations while evaluating opportunities in:

a) Agro-processing and value addition;

b) Defence and defence-related manufacturing/infrastructure;

c) Green Energy generation and energy infrastructure;

d) Mining, minerals and critical-mineral value chains.

The Companys strategy is therefore not a departure from its past, but an evolution from its existing foundation towards a broader set of growth opportunities.

2. STRATEGIC TRANSFORMATION-FROM AGRICULTURE TOA DIVERSIFIED INDUSTRIAL PLATFORM

The Companys evolution can broadly be viewed in three stages.

Stage I - Foundation

Agriculture, warehousing, and commodity trading established the Companys operating capabilities.

Stage II - Transition

The Company is evaluating monetization of under-utilized assets and deployment of capital into sectors offering greater long-term growth potential.

Stage III - Growth

SVC intends to build an India-Africa focused platform across Defence, Energy and Mining while retaining Agriculture as an important operating base.

The strategic transition can be represented as:

Agriculture & Warehousing

Asset Monetization & Capital Recycling

Defence + Energy + Mining

India + Africa

Diversified Industrial & Infrastructure Platform

This approach is intended to provide the Company with a substantially larger addressable market and reduce its dependence on the economics of a single business line. Importantly, the Company intends to follow a phased and partnership-led approach, allowing it to enter new sectors without attempting to build every capability organically from the outset.

3. INDUSTRY OUTLOOK

3.1 Agriculture - The Foundation Business

Agriculture will continue to remain part of the Companys business portfolio. Indias agricultural economy continues to benefit from strong domestic food demand, increasing organized retail, food processing, export opportunities and the gradual formalization of agricultural supply chains. The opportunity is increasingly shifting from simple commodity trading towards:

Procurement ^ Storage ^ Processing ^ Value Addition ^ Distribution

The Company will therefore continue to evaluate opportunities in agro-processing and value-added agriculture. However, the Companys future strategy is not intended to remain dependent on agricultural commodity cycles alone. Agricultural businesses can be affected by weather conditions, commodity prices, Government policies, trade restrictions, inventory cycles and working-capital requirements.

Accordingly, Agriculture will provide the foundation, while Defence, Energy and Mining are intended to provide the Companys principal avenues for future diversification and growth.

3.2 Defence - Indias Emerging Industrial Growth Engine

Indias defence sector is undergoing a significant structural transformation. The country is moving towards greater self-reliance in defence production, increased private-sector participation, indigenous technology development and a growing role in international defence exports.

Defence production and private-sector participation have continued to expand, demonstrating the increasing role of private industry in Indias defence ecosystem. The Government has set an ambitious objective of increasing domestic defence production to approximately Rs3 lakh crore by 2029.

Defence Exports

The international opportunity is also expanding, supported by the continued growth of Indias defence exports. India has also set a target of achieving approximately Rs50,000 crore of defence exports by 2029. This growth demonstrates the emergence of India as not only a major defence consumer but also an increasingly important defence manufacturing and export base.

Opportunity for SVC

The defence opportunity extends well beyond the manufacture of complete weapons platforms. The emerging ecosystem includes defence components, sub-assemblies, fabrication, engineering, electronics, drones and counter-drone systems, surveillance systems, communication equipment, defence logistics, testing facilities, maintenance and repair, industrial infrastructure, Tier-2 and Tier-3 suppliers and export-oriented manufacturing. SVC intends to evaluate opportunities within this wider ecosystem.

3.3 Defence - Opportunity in Africa

The defence opportunity is not confined to India. African countries are increasing investment in security, surveillance, border management, defence capability and domestic industrial capacity. African military expenditure continued to increase in 2025, reflecting rising security and defence requirements across the continent. The broader global defence market also continues to expand, with worldwide military expenditure reaching approximately US$2.89 trillion in 2025. For SVC, Africa can potentially provide both a market opportunity and a partnership opportunity.

Potential areas include defence equipment and components, surveillance and security systems, logistics, engineering and maintenance, industrial partnerships, defence-related infrastructure, localization and assembly and India-Africa manufacturing and supply chains. Indias growing defence manufacturing capabilities, combined with Africas expanding requirements, create the possibility of an India-Africa defence value chain.

3.4 Energy - A Long-Term Structural Opportunity

Energy represents another major area of opportunity for SVC. Indias electricity demand is expected to continue growing through 2030, reflecting increasing industrialization, electrification, cooling demand, transport electrification and economic growth. India is simultaneously undergoing a major expansion of renewable energy.

Indias installed renewable-energy capacity has continued to expand, with solar representing a major component of this growth. Renewable capacity has expanded strongly over the past decade, creating opportunities not only in generation but also across the wider energy ecosystem.

Opportunity for SVC

The Company intends to evaluate opportunities in solar power generation, captive renewable power, commercial and industrial renewable energy, energy storage, renewable-energy parks, power infrastructure, industrial captive power, and partnerships with established energy developers.

3.5 Energy - The African Opportunity

Africa represents one of the worlds largest long-term energy infrastructure opportunities.

A substantial proportion of Africas population continues to lack access to electricity, highlighting the scale of the infrastructure deficit. At the same time, clean-energy investment is increasing. Private-sector clean-energy investment in Africa has increased materially in recent years.

The opportunity therefore extends beyond conventional power generation and includes: solar generation; mini-grids; commercial and industrial solar; battery storage; transmission and distribution; energy-access projects; hybrid renewable systems; and power supply for mining and industrial projects. For SVC, the combination of Africas energy deficit, industrialization, natural resources and renewable- energy potential creates an attractive long-term opportunity for selective participation.

3.6 Mining and Critical Minerals

Mining and minerals represent the fourth strategic pillar of the Companys proposed diversification. Indias mineral demand is being driven by infrastructure development, manufacturing, urbanisation, power generation, renewable energy, defence and the broader industrial economy.

Indias production of key minerals, including iron ore, manganese, bauxite and refined copper, continued to grow during FY2025-26. The importance of minerals is expected to increase further as the global economy moves towards electrification and advanced manufacturing.

Critical Minerals

Minerals such as copper, Lithium, Cobalt, Graphite and Rare Earth Elements are increasingly important to renewable energy, batteries, electric vehicles, electricity grids, electronics, telecommunications, advanced manufacturing and defence systems.

Africa possesses significant mineral resources and is increasingly seeking to move beyond the export of raw materials towards beneficiation, processing and local value addition. This creates an opportunity for Indian companies with appropriate technical and commercial partners to participate in India-Africa mineral supply chains.

Opportunity for SVC

SVC proposes to evaluate opportunities in mineral sourcing, mining partnerships, mineral logistics, mineral trading, beneficiation, processing, critical-mineral supply chains and India-Africa strategic mineral partnerships.

The Company does not propose to assume that it must independently develop large-scale mining operations. Instead, the preferred approach will be to identify opportunities where SVC can participate through joint ventures, strategic partnerships, offtake arrangements, project-specific investments and asset-backed models.

3.7 Why Africa Matters to SVC

Africa is strategically important to the Companys proposed expansion because it combines several of the themes underlying SVCs future strategy:

a) Resources

Significant reserves of minerals, metals and critical minerals.

b) Energy

Large electricity-access deficit and substantial renewable-energy potential.

c) Infrastructure

Major requirements for transport, logistics, power, and industrial infrastructure.

d) Defence

Increasing security expenditure and demand for surveillance and defence capabilities.

e) Industrialization

Growing emphasis on domestic manufacturing and value addition.

Sub-Saharan Africa is expected to continue recording economic growth, providing a broader backdrop for increasing industrial and infrastructure investment. SVCs proposed Africa strategy will therefore focus on selected countries and commercially viable opportunities rather than pursuing a broad geographical expansion without defined projects.

3.8 Key Industry Indicators

The structural opportunity being evaluated by SVC is supported by the following indicators:

Sector	Key Indicator	Growth / Opportunity
Indian Defence	Defence production	1.78 lakh crore in FY2025-26; 15.6% YoY growth
Indian Defence Exports	Defence exports	38,424 crore in FY2025-26; 62.7% YoY growth
Private Defence	Private-sector production	Approximately 42,000 crore in FY2025-26
India Energy	Electricity demand	Expected to grow approximately 6.4% p.a. to 2030
India Renewable Energy	Installed renewable capacity	Approximately 288.6 GW as of June 2026
India Mining	Iron ore production	289 MT in FY2024-25; 4.3% growth
India Mining	Manganese production	11.8% growth in FY2024-25
Africa Defence	Military expenditure	8.5% growth in 2025
Africa Energy	Private clean-energy investment	Nearly US$40bn in 2024, vs. US$17bn in 2019
Africa Energy Access	Population without electricity	Approximately 600 million people
Sub-Saharan Africa	Economic growth	Approximately 4.1% projected growth in 2026

These indicators demonstrate that the Companys proposed diversification is aligned with sectors experiencing significant structural investment rather than short-term cyclical trends.

4. INDIA-AFRICA BUSINESS MODEL

The Companys India-Africa strategy is based on the complementary strengths of the two markets. India provides manufacturing capability, engineering expertise, defence technology, renewable-energy capabilities, project execution, technology partnerships and a large industrial ecosystem.

Africa provides natural resources, critical minerals, energy opportunities, infrastructure requirements, expanding markets and opportunities for local manufacturing and value addition. This creates the potential for a business model based on:

Indian Technology + Indian Manufacturing + African Resources+African Markets

The Company will evaluate opportunities where this combination can create a sustainable commercial advantage.

6. CONVERGENCE OF STRATEGIC SECTORS

One of the Companys key strategic observations is that Defence, Energy and Mining are not isolated sectors. They increasingly form part of one interconnected industrial ecosystem.

Mining

provides critical minerals

Critical Minerals

support energy, electronics and advanced manufacturing

Energy

supports industrialization and electrification

Technology & Manufacturing

support defence and strategic industries

Defence

creates demand for advanced manufacturing, electronics and strategic materials

This creates opportunities for SVC to participate at selected points across an interconnected value chain rather than relying exclusively on a single sector. The Company therefore sees its future not simply as a collection of unrelated businesses, but as a platform aligned with fourfundamental economic requirements:

Food Security, National Security, Energy Security, Mineral Security 6., BUSINESS OPERATIONS STRATEGY

As SVC expands into new sectors and geographies, the Company intends to strengthen its internal operating architecture alongside capital deployment. The objective is to build a lean, scalable and digitally enabled operating model capable of supporting a diversified portfolio without recreating unnecessary complex legacy structures.

The Company proposes to progressively digitize core internal processes, including documentation and knowledge management, workflows and approvals, project and task tracking, management reporting, and financial and operational MIS. This is intended to improve information availability, accountability, management visibility and institutional continuity as the business becomes more complex.

Modern modular and cloud-based tools, automation and emerging Al technologies will be evaluated where they can improve efficiency and scale. This may include selective use of Al-assisted and agentic workflows across research, documentation, analysis, reporting, monitoring and other repeatable internal activities.

Technology adoption will remain phased and use-case led. The Company will priorities solutions that are commercially practical, secure, interoperable and proportionate to actual business requirements, with appropriate management oversight and controls.

1. CAPITAL ALLOCATION AND IMPLEMENTATION APPROACH

The Company intends to follow a disciplined approach to capital deployment. The proposed monetization of the Companys land bank is expected to provide an important source of capital for the next phase of growth. The Company will seek to deploy such capital progressively rather than committing substantial resources to multiple projects simultaneously.

Potential structures include strategic partnerships, joint ventures, project SPVs, technology partnerships, contract manufacturing, asset-backed projects, project finance and strategic or institutional investment. The Company will prioritize opportunities based on market size and growth, long-term demand visibility, capital efficiency, availability of credible partners, regulatory feasibility, potential return on capital and scalability.

The principle will be: Identify the opportunity —> Validate the business model —> Build the partnership —> Deploy capital —> Scale

This approach is intended to ensure that growth is supported by commercial fundamentals rather than expansion for its own sake.

8. RISK MANAGEMENT

The Company recognizes that the proposed sectors are regulated and in certain cases, capital intensive. The principal risks include regulatory requirements, project execution, technology requirements, capital availability, commodity cycles, geopolitical developments, and country-specific considerations in Africa.

The Company intends to address these through appropriate regulatory and legal due diligence, phased capital deployment, experienced technical and operating partners, project-level evaluation, appropriate financing structures and country-specific assessment for African investments. The Companys diversification strategy is intended to reduce concentration in a single business line. The Company will not commit significant capital to a new business without appropriate technical, financial, legal, and commercial due diligence.

2. OUTLOOK FOR FY2026-27 AND BEYOND

The Company enters FY2026-27 with a broader strategic vision and a proposed transition towards a more diversified business platform. Agriculture will continue to remain an important operating foundation. Alongside this, the Company intends to progressively evaluate commercially viable opportunities in Defence, Green Energy and Mining in India and selected African markets.

The near-term focus will be on identifying suitable opportunities, developing credible partnerships, completing the required technical, financial, legal and commercial evaluation, and aligning capital deployment with the Companys land monetization and liquidity position.

In parallel, the Company intends to progressively strengthen its business operations through digital systems, improved management of information and selective adoption of automation and AI-assisted workflows. The pace and scale of diversification will depend on the maturity of individual opportunities, regulatory feasibility, availability of appropriate partners, expected return on capital and the Companys overall financial position. The Company intends to follow a phased approach, with capital committed progressively as opportunities move from evaluation to implementation.

10. CONCLUSION

The financial year 2025-26 represents a turning point in the evolution of SVC Industries Limited. As the Company progresses with the proposed monetization of its land bank, the focus will be on disciplined deployment of capital into commercially viable opportunities, supported by strategic partnerships, phased execution, digitally enabled business operations and appropriate financial, operational and risk controls.

The Board believes that this approach can position SVC for broader and more diversified growth while maintaining capital discipline and creating sustainable long-term value for its shareholders.

For and on behalf of Board

SVC Industries Limited

Suresh V Chaturvedi

Director

DIN:00577689

Date:29.08.2026

Place: Mumbai