Tarmat Ltd Management Discussions

1. INDIAN ECONOMY

India has a fast-growing, mixed developing economy. It ranks as the worlds fourth-largest economy by nominal GDP (around US$ 3.5-3.6 trillion) and third-largest by purchasing power parity. Growth is driven by strong domestic consumption, public infrastructure investments, and a massive labour force. Indias GDP growth for fiscal 2026-27 is projected at 6.9 percent, with a medium- term outlook anchored at 7 percent. The government and the economy remains resilient with a strong has balanced fiscal foundation. The Economic Survey 2026-27 highlights Indias transition towards becoming a systemically indispensable global power, combining strong growth with historically low inflation.

2. Industry Structure and Development and Outlook

Infrastructure is a key enabler in helping India become a US$ 5 trillion economy. Investments in building and upgrading physical infrastructure, especially in synergy with the ease of doing business initiatives, remain pivotal to increase efficiency and costs. Prime Minister Mr. Narendra Modi also recently reiterated that infrastructure is a crucial pillar to ensure good governance across sectors.

The governments focus on building infrastructure of the future has been evident given the slew of initiatives launched recently. The US$ 1.2 trillion national master plan for infrastructure, Gati Shakti, has been a forerunner to bring about systemic and effective reforms in the sector, and has alreadyshown .significantheadway In the Union Budget 2025-26, Union Minister for Finance & Corporate Affairs, Ms. Nirmala Sitharaman announced the Modified UDAN programme targets connectivity to 120 new destinations; separately, the approved programme envisages airport/helipad infrastructure in 10 years, targeting four crore additional passengers.

Morgan Stanley projects Indias infrastructure investment to rise from 5.03% of GDP in FY26 to 6.5% by financial year 2029.

Indias infrastructure sector is attraction rising investments, with government of capital expenditure increasing 4.2 times to Rs. 12.20 lakh crore (US$121.29 billion) in FY 2026-27, strengthening roads, railways, ports and logistics growth nationwide.

3. Opportunities and Threats

Tarmat Limited (Tarmat) has been the pioneers in airport runway works and air side works.

India has achievedsignificantmilestone in infrastructure development. Atal Tunnel and Chenab bridge are examples.

Indias journey towards becoming a developed nation by 2047 hinges significantly on improving its infrastructure. The Govt commitment is evident through its allocation of 4.3% of GDP to the infrastructure sector in the fiscal year 2026 with particular focus on transport and logistics segment.

The Govt. has set an ambitious target for transport sector including development of 2 lacs km national highways. Tarmat is in the process of securing a new projects of about Rs.300 crores and there are on-going projects in Chennai, Mumbai and Jammu.

However, project implementation is not without threats and limitations. Land acquisition and clearances, project credibility, fund availability and high fund cost, lack of technology, human resources, digital divide, cyber concern,

Regulatory policy, cost inflation are some of factors, which may affect the speed of project implementation

However, the Board of directors of the company from time to time are reviewing such risks and initiate actions for mitigation of such risks.

4. Internal Control

The Company has a proper and adequate system of internal controls covering all operational and financial functions commensurate with the size of the company. The companys internal control is designed in such a way that it ensures corporate strategy is implemented, achieve effective the value of corporate assets, reliability and integrity of accounting and management data, and operations comply with all existing rules and regulations. All the financial and audit control systems are also reviewed by the

Audit Committee of the board of Directors of the company.

5. Operations

The Companys operations are continued in the areas of implementing projects in areas such as airport, roads, bridges, etc. In all the areas, the company continued its focus on cost reduction and cost control at all levels.

6. Human Resources and Industrial Relations

The company understands the value of acquiring the highly intellectual human capital which the company believes is a crucial asset of the company. For this purpose, company follows the strategy "to attract, to retain and to motivate" the personnel through providing the framework for helping employees develop their personal and organizational skills, knowledge, and abilities. We have focused on to build positive attitude in the employees while working with Tarmat Limited. Tarmat Limited follows the principle-"good performance should be appreciated by good rewarding."

7. Risk and Concerns

Each sector has its own risk and concerns. Infrastructure projects are no exception to that. Common risks in the sector are cost inflation, Regulatory and land acquisition risk operating risk, project delays risk, completion risk, demand risk, cost overrun risk, unviable finance risk During the year, the Board has reviewed the risk and the process that have already been identified for the business and necessary action for mitigation has been initiated.

Risks impacting the Companys overall governance are given below:

Liquidity risk, Interest rate risk, Credit risk, Commodity price risk, foreigncurrencyfluctuationrisk, Market risk,

Salary risk, Interest risk, Investment risk, Health, Safety and Environment Risks, Political, Legal and Regulatory Risks, Fraud and Cyber Security, Other Operational Risks, Counter Party Risks and Working capital challenges.

7. Details of significant changes in key financial ratios.

In accordance with the amended SEBI(Listing Obligation and Disclosure Requirements) Regulations,2015,the

Company is required to give detailsofsignificantchanges (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed Company has identified following ratios as key financial ratios:

Particulars	FY 2025-26	FY 2024-25	% Change	Reason for change of 25% or more as compared to the immediately previous financial year
Debtors Turnover	5.40	5.75	(6.09)
Inventory Turnover	2.73	2.30	18.76
Interest Coverage Ratio	7.51	5.50	36.51	Variance is on account of Increase in Profit.
Current Ratio	2.30	5.39	(3.09)
Debt Equity Ratio	0.29	0.25	16.00
Operating Profit Margin (%)	6.05	0.46	1215.22	Variance is on account of Increase in Profit.
Net Profit Margin	5.53	1.85	198.92	Variance is on account of Increase in Profit.
Return on Net Worth	3.51	1.08	225.00	Variance is on account of Increase in Profit.