Swan Energy Ltd Management Discussions

a. MARKET OUTLOOK

Indias economy remained on a strong growth trajectory in FY 2024–25, registering a real GDP growth of 7.4% in the fourth quarter of FY 2024-25, making it the fastest-growing major economy in the world. The growth was driven by robust activity across infrastructure, manufacturing, real estate, energy, and services sectors. This performance was supported by a combination of policy continuity, resilient domestic demand, strong public capital expenditure, and sustained credit growth.

The Union Budget 2024–25 reinforced Indias growth agenda, with a significant 11.1% increase in capital expenditure, focusing on sectors such as energy, transport, digital infrastructure, and rural development. The governments ongoing "Make in India," "Atmanirbhar Bharat," and "Digital India" initiatives continue to boost industrial growth and self-reliance, while the PLI (Production Linked Incentive) schemes across 14 sectors are enhancing Indias manufacturing competitiveness and export potential. Inflation remained within the RBIs tolerance band for most of the year, although food price volatility and global commodity price swings, particularly crude oil and gold, posed intermittent challenges.

On the global front, FY 2024–25 witnessed a mixed economic landscape. Ongoing conflicts in Ukraine, the Middle East, and Sudan triggered volatility in commodity prices, especially energy and food, which led to higher global logistics and transportation costs. Simultaneously, rising protectionism, particularly tari_ hikes by the United States in 2025, disrupted global supply chains and intensified trade tensions, raising concerns over a potential trade war and its impact on global welfare.

Despite these headwinds, global inflation showed signs of moderation, prompting policy recalibration by key central banks. The US Federal Reserve adopted a cautious approach to further rate cuts, while the European Central Bank began reducing rates amid softening eurozone inflation. This monetary easing created a supportive environment for capital flows into emerging markets, with India emerging as a key beneficiary, supported by strong FDI inflows, policy reforms, and its status as the worlds fastest-growing major economy. Against this robust macroeconomic backdrop, Swan Energy delivered another year of strong operational and financial performance, with all key business segments contributing meaningfully to overall growth. The companys total income increased by approximately 35% to 6,88,368.00 lakhs in FY 2024–25, compared to 5,10,006.70 lakhs in the previous fiscal year. This sustained growth reflects the companys ability to adapt effectively to evolving market dynamics, maintain prudent liquidity levels, and proactively manage financial and operational risks across verticals. b. INDUSTRY OUTLOOK

Indias energy sector in FY 2024–25 remains firmly anchored between the goals of rapid economic growth and sustainability-led reforms. As the country advances toward its ambition of becoming a $5 trillion economy, energy demand is accelerating, driven by industrial expansion, infrastructure development, and urbanization. In parallel, the Government of India continues to prioritize decarbonization and energy security, reinforcing its commitment to achieving net-zero emissions by 2070. Natural gas has been identified as a key transition fuel, with consumption projected to grow at approximately 8–9% annually, supported by improvements in domestic availability, expansion of pipeline networks, and broader application across city gas distribution, power, and industry. Liquefied Natural Gas (LNG) is becoming increasingly vital to Indias energy mix, as domestic production remains inadequate to meet growing demand. The Interim Union Budget 2024–25 has reafirmed this strategic direction with targeted investments in green energy, energy storage, and gas infrastructure. Notable initiatives include the expansion of the National

Green Hydrogen Mission, acceleration of gas infrastructure under the "One Nation, One Grid" policy, and investments in LNG terminal and regasification capacity, all of which are expected to shape a more resilient and cleaner energy future for India.

Your Company reported revenue of 38,103.52 lakhs from the Energy segment in FY 2024–25, reflecting a strategic consolidation phase amid global LNG market volatility. A key development during the year was the sale of the FSRU ‘Vasant-1 by subsidiary Triumph O_shore Pvt. Ltd. for approximately USD 399 million, in response to shifting global LNG dynamics post the Russia-Ukraine conflict.

Meanwhile, the onshore LNG terminal at Jafrabad, Gujarat, is nearing completion. With long-term regasification agreements totaling 4.5 MMTPA secured from GSPC, BPCL, IOCL, and ONGC, the project is poised to commence operations as LNG price stability returns, strengthening Swan Energys role in Indias clean energy and gas infrastructure growth.

Indias textile and apparel industry is at a pivotal juncture, navigating a complex landscape marked by evolving global trade dynamics, shifting consumer preferences, and heightened competition. While domestic consumption continues to provide a base of support, demand recovery has been gradual and uneven across segments. The sector also faces structural challenges, including rising input costs, labor availability concerns, and a growing emphasis on traceability and compliance in export markets.

India remains a major global producer of cotton, jute, and hand-woven fabrics, playing an important role in the international textile value chain. However, its competitiveness has come under pressure due to logistical ine_ciencies and inconsistent policy implementation. The industry currently contributes approximately 2.3% to the national GDP, 13% to industrial production, and 12% to total exports, though these figures have seen limited momentum in recent years due to global headwinds and domestic disruptions.

While textile exports from India are projected to reach USD 65 billion by FY26, this target appears ambitious given the moderate pace of growth observed since FY20. The global textile and apparel market is indeed expected to expand to USD 1.2 trillion by 2030, but Indias share of this growth will depend on how effectively the sector addresses competitiveness gaps. Government initiatives such as the Production Linked Incentive (PLI) scheme and PM MITRA parks have laid important groundwork, but execution challenges remain. Moreover, although global shifts away from China have created opportunities, India has yet to fully capitalize due to supply chain constraints and lack of scale in certain categories.

In FY 2024–25, your Company reported revenue of 11,317.37 lakhs from the Textile segment, reflecting subdued demand and industry-wide headwinds. Despite the decline, operational efficiencies and cost controls supported stable margins. The Company remains focused on sustainability and innovation to drive long-term recovery and competitiveness..

Indias real estate sector continues to gain momentum, driven by rapid urbanization, formalization of the economy, and shifting demographic patterns. Encompassing residential, commercial, retail, and hospitality segments, the sector plays a vital role in shaping the countrys infrastructure and stands as the second-largest employer after agriculture. Demand for housing in urban and semi-urban areas has remained strong, supported by rising disposable incomes, a young population, and improved home loan a_ordability. On the commercial front, office space absorption continues to be robust, led by growth in IT/ITeS, BFSI, and global capability centers. Additionally, Non-Resident Indians (NRIs) are showing increased interest in Indian real estate, with cities like Bengaluru, Ahmedabad, Pune, Chennai, Goa, and Delhi NCR emerging as top investment destinations. Government-led reforms such as RERA, GST rationalization, and Pradhan Mantri Awas Yojana (PMAY) have significantly improved transparency, regulatory oversight, and investor confidence, positioning the sector for sustainable long-term growth.

Your Company reported revenue of 12,135.88 lakhs from the Real Estate segment, reflecting steady performance amid a dynamic market environment. A major milestone was achieved with the Occupation Certificate received for the flagship residential project, Cardinal One in Yeshwanthpur, Bengaluru, where over 90% of units have been sold, demonstrating strong customer confidence.

Through its subsidiary, Cardinal Energy and Infrastructure Pvt. Ltd., the Company continues to pursue value creation by monetizing strategic land holdings in Southern India. The successful sale of its Mangalore land and ongoing evaluation of other real estate assets positions the Company well for long-term, sustainable growth.

Indias shipbuilding sector is experiencing a strategic revival, propelled by national efforts to promote self-reliance, enhance coastal infrastructure, and modernize defense capabilities. Supported by flagship initiatives such as ‘Make in India, ‘Sagarmala, and the Maritime Amrit Kaal Vision 2047, the country aims to position itself among the top five global shipbuilding nations. With a coastline spanning over 11,000 km, proximity to key international shipping routes, and a skilled, cost-e_ective workforce, India is well-placed to expand its shipbuilding footprint. The global market, expected to grow from USD 150 billion to USD 180 billion by 2030, presents opportunities in cargo vessels, LNG carriers, and defense ships. Domestically, the sectors revival is being aided by capital subsidies, incentives for defense and inland waterway vessels, and efforts to modernize port infrastructure. On the defense front, Indias increasing procurement budget and emphasis on indigenization of naval assets open up long-term growth avenues for shipyards with defense-grade capabilities. The Maritime Amrit Kaal Vision further outlines a roadmap for boosting GDP contribution, job creation, and export potential in the maritime manufacturing ecosystem.

Your Company reported revenue of 703.46 lakhs in FY2024-25 from the Shipbuilding segment, reflecting the initial ramp-up of operations at Swan Defence and Heavy Industries Limited (SDHI), formerly Reliance Naval and Engineering Limited. Following focused investments and infrastructure upgrades, Indias largest shipyard has been successfully revitalized and made fully operational.

SDHI commenced operations during the year, completing three Indian Coast Guard refit orders ahead of schedule, underscoring the teams strong execution capabilities. Strategic MoUs with leading domestic and global players further strengthen the shipyards growth prospects, aligning with Indias vision to emerge as a global hub in defence and commercial shipbuilding.

India, the worlds third-largest oil consumer and a rapidly growing energy market, continues to exhibit strong demand for petroleum and petroleum products, creating a favourable environment for trading entities. In FY 2024–25, crude oil imports stood at 242 MMT, while domestic consumption of petroleum products reached approximately 239.2 MMT, reflecting steady economic growth, robust industrial output, and increased mobility. Over the past decade, consumption has grown at a CAGR of 4.0%, supported by infrastructure expansion, urbanization, and rising energy requirements, reinforcing Indias position as a strategic market for petroleum trade and logistics.

The sector remains dynamic and increasingly liberalized, offering significant opportunities for traders. With high import dependency due to limited domestic crude production, India ranks among the largest global importers and consumers of petroleum products. Policy support, expanding storage and transport infrastructure, and a broad network of global suppliers and buyers are enabling trading companies to optimize sourcing, tap into arbitrage opportunities, and scale operations across domestic and international markets.

Your Company reported revenue of 4,31,526.63 lakhs from the Petroleum and Petroleum product segment in FY 2024–25, reflecting a growth of approximately 12% over 3,85,455.36 lakhs recorded in the previous year. This steady increase highlights the Companys ability to navigate global supply disruptions and capitalize on opportunities in the petroleum value chain. c. OPPORTUNITIES

The energy sector is set to gain momentum through the following supportive developments:

a Enhancing Energy Security and Access: Diversification across LNG, hydro, nuclear, and grid infrastructure is strengthening energy resilience and supporting industrial demand growth.

a Catalysts for Clean Energy Expansion: PLI schemes and the 19,744 crore National Green Hydrogen Mission are accelerating Indias shift to a renewable-centric, self-reliant energy ecosystem.

The textile sector is well-positioned to capitalize on emerging industry trends:

a Global Demand for Sustainable Sourcing: Eco-conscious consumers and brands are pushing demand for recyclable fibers, traceable processes, and water-e_cient production lines.

a Expansion in High-Tech Textile Segments: Technical textiles in healthcare, defense, and infrastructure are witnessing strong momentum, supported by the National Technical Textiles Mission.

a Competitive Edge via Government Backing: PLI scheme, PM MITRA Parks, and FTAs with Australia and UAE are enhancing production scale, export access, and supply chain integration.

The Real estate sector is expected to benefit from several key trends:

a Demographic Tailwinds Supporting Demand: Indias growing urban population is driving consistent demand for housing, especially in Tier-I and Tier-II cities.

a Government Reforms Enabling Growth: Initiatives like PMAY and Smart Cities Mission, along with digitalized approval systems, are improving project execution and investor confidence.

a Economic Expansion Driving Segment Diversification: Strong GDP growth and rising incomes are fueling demand across residential, office, industrial, and co-living/co-working segments.

Several strategic factors are driving growth in the shipbuilding industry:

a Strategic Push for Defence Indigenisation: Governments emphasis on self-reliant defence manufacturing is driving strong order inflows for naval vessels, benefiting domestic shipyards.

a Rising Export Opportunities in Maritime Segment: Growing demand for commercial vessels from Southeast Asia and Africa is opening export avenues for Indian-built ships.

a Incentive-Led Capacity Modernisation: Schemes like Sagarmala, Maritime India Vision 2030, and shipyard incentives are boosting infrastructure upgrades and production scale.

The petroleum sector is being driven by the following critical factors:

a Sustained Demand Growth: Industrialization, urbanization, and rising mobility continue to drive global demand for petroleum products.

a Expanding Market Reach: New trade corridors, agreements, and refining hubs are opening access to diverse markets.

a Enhanced Supply Chain Efficiency: Ongoing investments in refining, storage, and logistics infrastructure are boosting distribution capabilities. d. THREATS, RISKS, AND CONCERNS

Despite its progress, Indias energy transition is constrained by the following key hurdles:

a Sensitivity to Fuel Price Fluctuations: Global fuel price volatility impacts the viability of thermal and LNG-based projects, increasing cost uncertainty and affecting profit margins.

a Capital Intensity and Long Payback Periods: The energy sector is inherently capital-intensive with long gestation cycles, which heighten exposure to financing risk, cost overruns, and execution delays.

The key areas of concern for the textile industry are:

a Raw Material Price Instability: Fluctuations in the prices of cotton, yarn, and synthetic fibers pose risks to production costs and pricing power, especially for export-focused players.

a Global Market Dependency and Competition: India faces sti_ competition from countries like Bangladesh and Vietnam in the low-cost textile segment. Overdependence on export demand exposes the industry to global trade and geopolitical risks.

a Labour Compliance and Operational Risks: Labour availability, rising wage costs, and stricter compliance norms in domestic and international markets may pressure operational flexibility and margins.

The sectors growth is moderated by the following persistent headwinds:

a Interest Rate Sensitivity and A_ordability Challenges: Elevated borrowing costs due to high interest rates impact homebuyer a_ordability and may lead to a slowdown in residential sales momentum.

a Regulatory and Approval Delays: Lengthy approval cycles, land acquisition challenges, and evolving RERA compliance norms can delay project timelines and increase holding costs.

a Volatility in Construction Costs: Fluctuations in input prices such as steel, cement, and labour wages create uncertainty in cost planning and can impact profitability across projects.

The growth trajectory of Indian shipbuilding is constrained by several critical bottlenecks:

a Long Project Cycles and Working Capital Stress: Shipbuilding projects typically involve extended construction timelines, resulting in high working capital requirements and cash flow pressures.

a Global Competitive Pressure: Indias shipyards face tough competition from highly subsidized and technologically advanced players in countries like South Korea and China, which affects order visibility and pricing flexibility.

a Limited Skilled Workforce and Technological Gaps: Shortage of skilled manpower and reliance on imported technology can hinder timely project execution and quality standards, especially in complex builds.

The petroleum and petroleum product market is dealing with the following challenges:

a Price Volatility and Policy Uncertainty: Fluctuating crude oil prices and sudden regulatory or policy changes can affect procurement costs, margins, and business planning.

a Geopolitical and Trade Risks: Global trade tensions, tariffs, and geopolitical instability can disrupt supply chains, impact currency movements, and create operational uncertainties.

a Intensifying Market Competition: Deregulation and rising private participation are increasing competition, putting pressure on margins and necessitating operational efficiencies. e. OUTLOOK:

Indias economy is set for strong growth in FY 2025-26, driven by domestic demand, government spending, and policy reforms, making it the fastest-growing major economy globally despite external headwinds like geopolitical conflicts and protectionism. Key sectors like energy, oil and gas, textiles, real estate and shipbuilding are poised for significant expansion, supported by strategic government initiatives and rising domestic consumption. While challenges such as global commodity price volatility, capital intensity, and supply chain disruptions persist, ongoing reforms, infrastructure development, and a focus on sustainability are expected to propel Indias overall economic momentum.

The company continues to give utmost importance to Human Resources Development and keeps relations normal. As on 31^st March, 2025, there are 70 employees, including 3 whole time directors.

Industrial relations continue to be harmonious and normal. h. KEY FINANCIAL RATIOS:

This report contains forward looking statements that address expectations and projections about the future, based on certain assumptions of future events. Companys actual results, performance or achievements may, thus, differ materially from those projected in any such forward looking statements.