Techknowgreen Solutions Ltd Management Discussions

Indias environmental Landscape is evolving rapidly, creating new opportunities for technology-led and integrated sustainability solutions.

Industry Structure

and Developments

The past year has reinforced that climate change is no longer a distant risk but a present and escalating cost. Indias own experience over the reporting year has been sobering, given the losses of human life, infrastructure and financial impediments owing to climate change.

In response, regulatory developments in the European Union continue to be a bellwether for global sustainability practice, even as the shape of that regulation has evolved over the year. Following extended negotiation, the Omnibus simplifications to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) were finalised, with the European Parliament approving them. At the same time, industry leaders like large multinational corporations and forward-thinking Indian conglomerates alike continue to set voluntary benchmarks well ahead of regulatory minimums, whether through science-based emissions targets, water stewardship commitments, or circular-economy pledges.

Indias own climate ambition has advanced meaningfully during the year. Indias updated NDC 3.0, approved in March 2026, sets more stringent targets for the 2031-2035 period, building on the original 2021 Panchamrit pledges. Under the revised framework, India has raised its ambition to 60% non-fossil power capacity and higher emissions-intensity and carbon-sink targets by 2035, with the emissions-intensity target strengthened to 47% below 2005 levels by 2035.

As Indias climate policy architecture matures beyond the power sector into industrial decarbonisation, transport emissions, and building-level resource efficiency, the need for specialised measurement, monitoring, verification, permitting, and policy-research support across these under-addressed sectors is likely to grow. The Union Budget presented on 1 February 2026 offered a mixed but broadly constructive signal for the climate and environmental services ecosystem. On the positive side, the Budget introduced a Rs.20,000 crore fund for carbon capture and climate technology initiatives and a Rs.10,000 crore fund to help high-potential MSMEs scale operations — both of which open avenues for engineering research, feasibility studies, and technical advisory work tied to emerging decarbonisation technologies.

For a company operating in environmental and ESG services, the shifting political mood can dampen the pace of voluntary ESG disclosure and social-inclusion commitments among some global industries in the near term. However, the underlying operational and regulatory drivers like water scarcity, waste-management mandates, industrial emissions compliance, and physical climate risk remain independent of this political cycle and continue to sustain demand for our core service lines, even where public communication of sustainability commitments becomes more measured.

The experience of and implications for Techknowgreen

As environmental regimes have evolved, stakeholders engaged in the environmental engineering, consulting, technology and research spaces have been adapting to the changes. Lately, the heavy focus of public funding in the industries in the past, is now undergoing an evolution, with more funding and opportunities available to climate change research, circular economy solutions, sustainability consulting and technology adoption. The governments expenditure on environmental infrastructure has seen a significant, steady rise.

On the other hand, services catering to the environmental requirements of the industrial and manufacturing sectors that were significantly futuristic at some point in time, are now business as usual. The market for such environmental services has stabilised with a saturation of market entrants and competitors. Now, true impact requires research for solutions, pilots, and the engineering of technologies that are ready to be adopted. Environmental solutions for urban infrastructure are also a new focus, and the nature of industries requiring environmental solutions support has changed. Data centres now require just as much environmental work and support as manufacturing industries, if not more. Techknowgreen has been providing a range on environmental and sustainability services to data centre clients for years now.

Ambient air pollution issues, industrial effluent pollution, river pollution due to sewage discharge, etc are being experienced and raised by all kinds of stakeholders, and there are very few stakeholders willingly taking ownership of the problems. We now have ample information, data points and a deep enough understanding of various environmental challenges. What the industry needs is a focus on solutions, which is where the goals of Techknowgreen are headed.

Opportunities and Threats

Opportunities:

• The demand for laboratory-related environmental testing services has been on the rise. The India environmental testing market size reached USD 931.2 Million in 2025. Looking forward, IMARC Group expects the market to reach USD 2,091.0 Million by 2034, exhibiting a growth rate (CAGR) of 9.12% during 2026-2034. This is a testament to the success of the strategic investment in the laboratory.

• According to a recent Morgan Stanley survey, 88% of investors are interested in portfolios that integrate sustainability and resilience. 59% plan to increase their sustainable investments within a year, driven by confidence in financial performance, not just social responsibility.

• Opportunities are sprouting in Infrastructure Projects, the Smart Cities Mission, Industrial STPs, and so on, which the company is targeting.

• There is a growing availability of global and national funding from private entities for environment and climate change-related projects, creating significant opportunities for growth and innovation.

• The CEWT is fully deployment-ready, is positioned to capture large Private & government- funded water infrastructure projects with applications in River Rejuvenation, Nallah Treatment, STPs & Lake Restoration, Decentralized Wastewater Treatment.

• Favourable government policies percolating to the private sector fetch a great market opportunity for the company. The demand for environmental services, sustainability consulting services and handholding across the entire value chains of companies and product life cycles is increasing.

• Academic institutions are increasingly seeking partnerships to collaborate on research, technology development, and implementation.

• Climate change awareness is on the rise owing to the major climate disasters in recent times.

Threats:

• Talent attrition in the Indian sustainability consulting sector remains high, driven by increasing competition for skilled professionals and the rapid expansion of the green economy. In response to the same, TSL is focusing on regional expansion, which develops opportunities to locations where the talent is based.

• Although investments and project sizes have increased on a large scale, the qualification criteria for bagging those government projects is also expected to increase. The company needs to upscale and diversify the internal capabilities in order to cater to such requirements.

• As the company targets bigger ticket size projects - going beyond mid- and low-segments, the competition landscape significantly changes, and so does the opportunity cost.

• As environmental and sustainability-related criteria are increasingly being adopted across sectors, the nature of work is broadening, and is incorporating a wider range of required capabilities. Thus, the dependency on partnerships may also increase with the aspirations to serve broader sectors and upscale.

Performance

That Builds Momentum

The company continued to perform consistently well and grow across the verticals during the reporting period. The Knowledge Consulting vertical grew 78% year-on-year, becoming the primary growth engine in FY 2025-26. The Technology vertical grew by 20%, reflecting early-stage commercial deployments gaining traction.

Outlook

The companys outlook for the future focuses on internal system enhancement, increased implementation of the flagship technologies, and service portfolio expansion.

As a company offering a wide variety of environmental services under one roof, the team plans to bridge the gaps and missing links in service offerings. Strengthening of the service portfolio, allows the organisation to offer more robust value to be delivered to the diverse portfolio of clients.

Over time, the company has developed frameworks that ease the fulfilment of requirements and delivery of projects that are being undertaken by the company for years. AI agents would be developed to automate tasks that the team has perfected the methodologies for, over years of handling projects. Thus, the company is optimistic about the integration of agentic AI in project management and quality mechanisms to boost efficiency and performance.

The company has established a roadmap aligned with the organizations long-term growth objectives. The key focus areas include:

• Strengthening the Performance Management System through continuous improvements.

• Enhancing Learning and Development initiatives to build technical and leadership capabilities.

• Developing succession planning and leadership development programs.

• Increasing employee engagement and wellness initiatives.

• Leveraging HR analytics for data-driven workforce planning and decision-making.

The above internal system enhancement initiatives are expected to reflect in the operational performance of the company.

Other key priorities include increased implementation of projects, along with expansion of business opportunities in states across India and the government sector. The company will also focus on strengthening strategic collaborations, to support the wider application of environmental engineering and sustainable technology solutions.

Risks and Concerns

In order to address a variety of risks and concerns, the company has adopted a systematic risk identification and mitigation framework.

Internal Risks

1. Recruiting experienced professionals in specialized environmental, sustainability, and technical domains remains competitive. Talent retention challenges are being managed through leadership development programmes.

2. The availability of working capital may be a risk, which is being addressed through stronger collection mechanisms and receivables management.

3. The risk of client concentration and high dependency of revenue on some clients, is mitigated through sector diversification across the government and industry.

4. Geographical expansion to areas where we have limited operational experience may not always be profitable and may adversely affect the business.

5. Technological, software-related and cybersecurity failures may lead to reduced revenue, higher costs and a compromised ability to compete. Hence, the company is working towards strengthening cybersecurity practices in the organisation.

6. The dependencies coming as a part and parcel of related-party transactions and partnerships could be a risk.

7. The risk of challenges in technology adoption is addressed through pilot demonstrations and proofs-of-concept, before final deployments.

8. The lack of insurance for specific risks associated with the business, and the failure to maintain adequate insurance cover in connection with the business may affect the operations and profitability.

9. Risks pertaining to the growing competition in the sector are being managed through Intellectual Property ownership and technology differentiation. As we continue to innovate and develop cutting-edge solutions, protecting or defending our proprietary rights is critical. Any shortcomings on this front may lead to the company losing competitive edge, loss of assets, reduced revenue, substantial costs or litigation to protect our rights.

10. Any defaults in obtaining, renewing or maintaining the necessary statutory and regulatory permits and approvals for business operations may cause interruptions in the operations. Regulatory changes, which may pose a risk to the companys operations, are managed through continuous monitoring and compliance updates.

11. Any delays or defaults in payments from the clients could result in the increase of working capital investments and/or reduction of the companys profits, affecting the financial condition and operations.

12. The business is supported by different numbers of big- and small-ticket orders, of which the material orders are disclosed publicly, as mandated by the regulators. The realisation of revenue often happens over longer periods of time, which, if not adequately considered, may skew revenue or profit projections.

External Risks

1. Changing laws, regulations and policies, locally, nationally and globally, legal uncertainties, including adverse application of corporate and tax laws, may prove to be unconducive to the business.

2. Natural disasters, epidemics, pandemics, acts of war, terrorist attacks and other events could materially and adversely affect the business. Unfortunate events like natural or manmade disasters including hostilities, civil unrest and other acts of violence may adversely affect the business operations, cash flows and overall financial health.

3. Global geopolitics and financial instabilities across the globe may increase the volatility in the markets where the company is present, including India, thus affecting our ability to operate at utmost efficiency and generate profits.

4. Any downgrading of Indias debt rating by an international rating agency could negatively impact the business.

5.Increasing collaborations with external organisations, partnerships and the resulting dependencies, and probable disparities in the financial value or stature of the concerned parties may be a concern.

6. We face foreign exchange risks that could adversely affect our results of operations.

7. The regulatory and statutory requirements of being a company listed on the BSE platform may strain the companys resources.

Internal Control Systems

and their Adequacy

The Company maintains a system of internal controls commensurate with the complexity of its operations, designed to ensure the orderly and efficient conduct of business, prevention and detection of fraud and error, accuracy and completeness of accounting records, and timely preparation of reliable financial information. During the year under review, the Company undertook several initiatives to strengthen its internal control framework, as detailed below.

Financial Reporting Discipline

The Company has instituted a structured month-end closing checklist to bring greater discipline and consistency to the financial close process. This checklist ensures that prepaid expenses and accruals are accurately captured in each reporting period, thereby improving the completeness and periodicity of financial reporting. Further, the Company undertook a review and correction of the equity share capital ledger in SAP, aligning shareholder names with the latest Beneficiary Position (BenPos) statement, which enhances the accuracy of the Companys records of shareholding and supports smoother reconciliation with depository data.

GST Compliance and Reconciliation

Recognising the importance of timely and accurate indirect tax compliance, the Company has transitioned from a quarterly to a monthly GST entry workflow, enabling more frequent monitoring and reducing the risk of errors or omissions accumulating over longer periods. As part of this strengthened process, the Company is reconciling Table 6 (ITC utilisation) entries of Form GSTR-3B with corresponding entries in SAP, ensuring consistency between the Companys tax filings and its books of account. In addition, a periodic reconciliation of GSTR-2B with SAP purchase records has been built into the standard close calendar.

Procurement and Vendor Controls

The Company has enhanced its vendor onboarding process during the year through improved Know Your Customer (KYC) diligence as compared to the previous year, supplemented by the introduction of periodic reviews of existing vendor records. This strengthens the Companys ability to assess vendor credibility and manage counterparty risk on an ongoing basis, rather than solely at the point of onboarding. Further, a document repository has been established for procurement-related records, with designated backup ownership assigned, ensuring that critical procurement documentation is centrally maintained.

Other Internal Controls Strengthened

The Company has completed asset tagging across all functions during the year. In furtherance of this, the development of a Risk Control Matrix (RCM) for Fixed Assets is currently in progress. The integration of Key Performance Indicators has been a critical next step in the a more meticulous approach to efficiency and project management within the organisation. Key Performance Indicators were developed and their adoption has been initiated at the individual, departmental, and organisational levels. The evaluation of individuals as well as the organisation is now based on these indicators.

The responsibilities are thus, getting bifurcated more meticulously, which boosts the overall efficiency of the team. The KPIs have now been percolated across operations and evaluations, and now also being integrated at the client level.

Controls across functions have been defined, over the past few years, and the systems have now solidified to be dependable. Since internal control systems are audited on a regular basis, processes for projects are systematised.

Discussion on Financial with Respect to Performance

Operational Performance

The company has continued to exhibit a stable growth in financial performance, owing to strong system processes, and the variety of projects undertaken. The relatively high quantum of repeated orders and positive feedback from the clients are a testimony to the continued high-quality delivery of our services.

FY 2025-26 reflected strong and broad-based financial growth, supported by continued business momentum and strengthening operational performance.

Revenue from operations increased by 24.4% to INR 41.04 crore, compared with INR 32.99 crore in FY 2024-25.

EBITDA grew by 45.2% to INR 15.07 crore, reflecting improved operating performance, while Profit Before Tax (PBT) increased by 28.8% to INR 12.27 crore. Profit After Tax (PAT) stood at INR 9.74 crore, registering a 27.1% year-on-year increase. The Company closed the year with an order book of INR 27.06 crore, providing a healthy base for continued business growth.

Material Developments

in Human Resources & Industrial Relations

Human Resources

During FY 2025-26, the Human Resources Department focused on strengthening the organizations people practices and building systems to support sustainable growth. Material developments included:

• The successful recruitment of talent across multiple business verticals, including Environmental Consultancy, Sustainability, Regulatory, Laboratory, IT, Procurement, Accounts, and Corporate Functions, supporting the companys expansion.

• Successful implementation of the HR One Human Resource Management System (HRMS), digitizing employee records, leave management, payroll, recruitment, onboarding, and HR documentation.

• Standardization of key HR policies and procedures, including leave management, probation, employee lifecycle processes, and other core HR practices to ensure consistency across the organization.

• Strengthening payroll administration and statutory compliance by streamlining PF, ESIC, Professional Tax, TDS, and other regulatory processes.

• Introduction of a structured Performance Appraisal System within the organization. The framework established standardized performance evaluations, constructive feedback mechanisms, and appraisal caps based on performance ratings. This initiative promotes transparency in performance assessments and lays the foundation for effective performance management, career progression, and long-term salary benchmarking.

• Enhancing the employee onboarding and induction process to improve the overall employee experience and facilitate smoother integration into the organization.

The initiation of the integration of Key Performance Indicators in operations, evaluations, and client-facing processes is expected to ensure that roles and responsibilities are methodically adopted. This is expected to facilitate a more systematic, data-driven approach towards performance management.

The structure of compensations has been revised to better incentivise initiative, participation and ownership. The hierarchy in evaluation of the companys and individuals performance, which was previously centrally managed, is now well-distributed, federal and organic in nature.

Implementing new HR systems and standardizing processes across a growing workforce required careful change management to ensure uninterrupted business operations. These challenges were successfully addressed by strengthening recruitment strategies, leveraging digital HR solutions, introducing standardized policies and processes, improving collaboration with business leaders, and providing continuous support to employees throughout the transition. These efforts have established a more structured, efficient, and scalable HR function capable of supporting the organizations future growth.

Industrial Relations

The placement of the company as a publicly listed company has been a strategic decision that keeps giving. By offering a plethora of services under one roof, as a brand, places the company in a significant market position. FY 25-26 saw the realisation of some key partnerships, which boosted the company relations in the industry. The details have been furnished as below:

Partnership with Shri Shri Rural Development Program Trust

During FY 2025-26, Techknowgreen entered into a Memorandum of Understanding (MoU) with Shri Shri Rural Development Program Trust (SSRDP). The partnership creates opportunities for collaboration in areas related to rural development and sustainability, strengthening Techknowgreens engagement with development-oriented initiatives. The collaboration reflects our approach towards supporting sustainable development through partnerships that bring together environmental expertise and community-focused development.

Gujarat Institute Of Desert Ecology

Empanelment with Gujarat Institute of Desert Ecology (GUIDE)

Techknowgreen was empanelled with GUIDE during the year, strengthening our institutional network and expanding opportunities for engagement across environmental and development- oriented assignments. The empanelment adds to our growing institutional relationships and provides an avenue for Techknowgreen to contribute its technical and environmental expertise to a broader range of projects.

Partnership with Sterling and Wilson Data Center

The partnership with Sterling and Wilson Data Center Pvt Ltd continues to hold significant hope for the expansion of environmental and social consulting and execution services to the evergrowing data centre industry. Considering the increased interest of and push from governments at the state, national and global level to meet the demand for data storage and management services, and the investments made by public and private financers in the sector, the need and opportunity for environmental services has continued to rise. Thus, this strategic partnership allows us to dive even deeper in the data centre sector.