TIL Ltd Management Discussions

<dhhead>Management Discussion & Analysis </dhhead>

Global Economic Overview

The global economy in FY26 operated under heightened macroeconomic volatility, reflecting a confluence of geopolitical disruptions, tighter financial conditions, and persistent inflationary pressures. As noted in the International Monetary Fund’s World Economic Outlook (April 2026), the outbreak of conflict in the Middle East early in the year has acted as a significant negative shock, disrupting what had previously been a period of relative resilience supported by technology-led investments, accommodative financial conditions, and easing trade barriers. This development has highlighted the increasing vulnerability of the global economy and the growing impact of geopolitical events on macroeconomic stability.

Global GDP growth slowed to ~3.1% in 2026 from ~3.4% in 2025, with only a modest recovery to ~3.2% expected in 2027, indicating a subdued medium- term outlook. Inflationary pressures resurfaced during the year, with global inflation estimated at ~4.4% in 2026, primarily driven by elevated energy and food prices resulting from supply chain disruptions and ongoing geopolitical tensions. In response, central banks have maintained a cautious stance, prioritizing inflation control and anchoring expectations, resulting in moderately tighter global financial conditions, higher risk premiums, and more selective capital flows to vulnerable economies.

The global industrial landscape is witnessing structural shifts, including:

Supply chain realignment and regionalization of manufacturing

Increasing adoption of digital and automation technologies

Accelerated investments in energy transition and sustainability

Global trade growth has slowed in 2026 due to weak demand, higher costs, and supply chain realignment, with goods trade more affected while services remain relatively resilient, supported by digitalization. While advanced economies continue to exhibit slower growth, emerging markets remain key drivers of industrial and infrastructure expansion, supporting long-term demand for capital goods and equipment. However, persistent trade fragmentation and tighter financial conditions pose downside risks, with potential upside from productivity gains led by technological advancements?particularly artificial intelligence?and supportive policy action.

Indian Economic Overview

The Indian economy displayed strong resilience and fundamental stability during FY26, despite navigating a complex and evolving global macroeconomic landscape. Escalating geopolitical tensions, led to heightened volatility in global energy markets and disruptions in trade and financial flows. Nevertheless, India maintained its position as one of the fastest-growing major economies, supported by robust domestic demand, sustained investment activity, policy continuity, and a stable macroeconomic framework. GDP growth estimated at ~7.6% in FY26, positioning it as one of the fastest-growing major economies globally. Reflecting this resilience, the International Monetary Fund reaffirmed confidence in India’s economic prospects and projected growth of 6.5% in FY27, highlighting the strength of the country’s medium term growth outlook.

Growth was supported by:

Strong private consumption (~7.7%)

Sustained public capital expenditure

Gradual revival in private sector investments

The investment-to-GDP ratio (~32%) remained stable, reflecting continued infrastructure and industrial momentum. while the incremental capital- output ratio (ICOR) was maintained at around 4.4, indicating efficient capital utilization. Investment activity also continued to play a critical role in sustaining growth. Gross Fixed Capital Formation (GFCF) expanded by around 7-8%, driven by continued public sector capital expenditure, strengthened corporate and banking sector balance sheets, and a gradual revival in private sector investment sentiment.

Inflation remained well contained in FY26, supporting macroeconomic stability, and is expected to rise moderately to ~4.7% in 2026 from 3.3% in 2025 before easing to ~4.0% in 2027, driven by higher global energy and food prices.

Despite global headwinds, India’s economic outlook remains robust and is well positioned to sustain the growth momentum, supported by supportive policy environment, a strong domestic demand base, and infrastructure-led growth strategy, with sustained capital expenditure and supply-side reforms expected to further enhance economic activity.

Industry Overview Infrastructure Sector

The Indian infrastructure sector remains a key driver of economic growth, supported by the Government of India’s continued focus on infrastructure-led development and large-scale investments across transportation, logistics, and urban infrastructure. This sustained investment has led to a continuous rise in infrastructure spending over recent years, reinforcing its vital contribution to overall economic expansion. The sector is further strengthened by flagship initiatives such as the National Infrastructure Pipeline (NIP), PM Gati Shakti, and the National Monetisation Pipeline (NMP). The outlook remains robust, underpinned by sustained public investment and policy support, with infrastructure capital outlay projected to reach ~P13.1 lakh crore by FY27, reflecting ~14% growth over FY26. Continued emphasis on strengthening transportation networks, ensuring energy security, and advancing urban development, along with a gradual increase in private sector participation, is anticipated to sustain growth momentum.

Sources: Government Capital Outlay Expected to Reach Y13.1 Trillion in FY27 Budget

Government Allocation to Infrastructure Sector (in ? Lakh Crore)

Material Handling Equipment Sector

Global Material Handling Equipment Market

The global material handling equipment (MHE) market continues to expand steadily, driven by structural shifts in manufacturing and logistics. Valued at USD 261.7 billion in 2025, it is projected to reach USD 489.6 billion by 2034, growing at a CAGR of ~7.3%. The market is evolving rapidly with increasing adoption of automation, connectivity, and data-driven solutions to enhance supply chain efficiency, while e-commerce growth continues to drive demand for automated warehousing and faster fulfillment systems. Rising labour costs and shortages are further accelerating automation adoption, including technologies such as AGVs and AMRs. Despite near-term challenges from economic uncertainty and high implementation costs, sustained advancements in digitalization and automation are expected to support long-term growth and competitive differentiation within the sector. Overall, the market is benefiting from increased manufacturing activity, rising demand for fast delivery solutions, and the growing use of smart technologies. Companies that invest in scalable, technology-driven solutions will be well positioned to capitalize on emerging opportunities and strengthen their competitive advantage in the evolving material handling ecosystem.

Source - Fortune India

Global Material Handling Equipment Market (in usd Billion)

Indian Material Handling Equipment Market

The Indian material handling equipment (MHE) market continues to exhibit strong structural growth, supported by expanding industrial activity and a rapidly evolving logistics ecosystem. The market reached approximately USD 11.4 billion in 2025 and is projected to grow to USD 23.3 billion by 2034, reflecting a CAGR of ~7.8%. As a critical, nondiscretionary component of industrial operations, demand for MHE is closely linked to infrastructure development, manufacturing expansion, and supply chain modernization. The operating environment is being driven by rapid industrialization, policy-led manufacturing growth, and increasing adoption of automation, thereby strengthening demand for advanced material handling solutions, including cranes and heavy lifting equipment.

E-commerce continues to be a key demand driver, driving the development of large-scale warehousing and fulfilment ecosystems and accelerating adoption of automated handling systems. Looking ahead, emerging segments such as cold chain logistics and semiconductor manufacturing present incremental growth opportunities, requiring specialized and automated equipment. Despite challenges related to capital intensity and integration complexity, continued advancements in automation, along with sustained policy support and infrastructure expansion, are expected to underpin long-term growth of the Indian MHE market.

Indian Crane Market

The India crane market continues to exhibit steady growth, supported by strong infrastructure development and increased mechanization in construction activities.

The market was valued at USD 1.48 billion in 2025 and is projected to reach USD 2.18 billion by 2031, growing at a CAGR of 6.70%. This growth is underpinned by large- scale investments under the USD 1.4 trillion National Infrastructure Pipeline (NIP), along with rising renewable energy installations and urban development projects. The increasing preference for mechanized lifting solutions over labour-intensive methods is driving fleet modernization and boosting demand for higher-capacity and technologically advanced cranes. The operating environment is shaped by significant public and private investments in infrastructure, including highways, ports, metro rail systems, and smart city projects. Initiatives such as Bharatmala, Sagarmala, and the Smart Cities Mission are accelerating construction timelines and increasing the need for efficient lifting solutions.

At the same time, advancements in telematics and IoT- enabled systems are transforming equipment management, enabling predictive maintenance and improving safety standards. Segment-wise, mobile cranes dominate the market, accounting for 62.55% of the share in 2025, owing to their versatility and ease of deployment across diverse applications. Meanwhile, crawler cranes are witnessing the fastest growth, driven by demand for heavy-lift applications in renewable energy and large-scale infrastructure projects. The construction sector remains the largest application segment, contributing 57.05% of market demand, while the energy and utilities sector is emerging as the fastest- growing segment due to India’s renewable capacity expansion. Additionally, technological shifts toward electric and hybrid cranes are gaining traction as environmental regulations tighten and sustainability becomes a key procurement consideration. Looking ahead, continued infrastructure investments, increasing automation, and the transition toward cleaner technologies are expected to sustain growth momentum, although addressing skill shortages and financing constraints will remain critical for long-term market efficiency.

The Indian defence sector is undergoing a period of significant transformation, driven by sustained increases in budgetary allocation and a renewed focus on indigenization. The defence budget has nearly tripled from T2.53 lakh crore in FY14 to T7.85 lakh crore in FY27, accounting for 14.67% of the total Union Budget and positioning defence as the largest spending category among all ministries. This steady rise underscores the government’s commitment to strengthening national security while advancing self-reliance. A key pillar of this transformation is the rapid expansion of domestic defence production and exports. Defence production reached a record T1.54 lakh crore in FY25, with a target of f3 lakh crore by FY29. Simultaneously, exports have demonstrated exceptional growth, reaching f38,400 crore in FY26, with a stated target of f50,000 crore by FY29. This trajectory highlights India’s emergence as a credible global supplier of defence equipment and reflects the success of policy measures aimed at promoting domestic manufacturing and reducing reliance on imports. Looking ahead, the outlook for the Indian defence sector remains highly positive, supported by continued policy reforms, rising capital expenditure, and increased focus on research and development. As India strengthens its domestic capabilities and expands its global footprint, the sector is expected to transition into a more innovation-driven and export-oriented ecosystem.

Source- Deloitte, Fortune India

Indian Defence Market

(In f Lakh Crore)

TIL Limited (TIL) is a leading manufacturer of material handling and infrastructure equipment, with a strong legacy spanning over eight decades and renowned for its commitment to top-quality production, design innovation and manufacturing excellence. With headquarters in Kolkata, TIL boasts a strategic presence with regional offices spread across Indias major cities. The companys rich expertise, cultivated over more than eight decades, is backed by two state-of-the-art manufacturing facilities located in Kamarhatty, Kolkata, and Changual, Kharagpur, in West Bengal. TIL offers a comprehensive range of material handling, lifting, port equipment with integrated customer support and after-sales service. Its extensive product portfolio include Rough Terrain Cranes, Truck Cranes, Industrial Cranes, Pick Carry Cranes, Reach Stackers,

Forklift Trucks, and Container Handlers. Demonstrating a commitment to excellence and global competitiveness, TIL has forged strategic alliances with international industry giants like Grove Worldwide and Manitowoc Crane Group, as well as Hyster? (a division of Hyster-Yale Group, Inc.) of the USA that enable access to advanced technologies and diversified product offerings. The Company serves a wide range of sectors, including infrastructure, ports, logistics, mining, oil & gas, and defence.

Advanced Manufacturing Facilities

TIL operates two strategically located manufacturing facilities at Kamarhati and Kharagpur, each catering to multiple product segments while collectively strengthening the Company’s production capabilities and operational efficiency.

Kamarhati Facility (West Bengal)

The Kamarhati facility, operational since 1962, is India’s first purpose-built mobile crane manufacturing hub, with a built-up area of ~26,000 sq. m and a shop floor area of ~10,520 sq. m. The facility is equipped with fully integrated machining, fabrication, assembly, and testing capabilities, ensuring end-to-end manufacturing excellence. Strategically located near key transport infrastructure, the facility has delivered several industry firsts, including the manufacture of India’s first rough terrain cranes and 100-tonne mobile cranes. It primarily caters to specialized equipment requirements across defence, truck cranes, and rough terrain crane segments, reinforcing TIL’s leadership in high-performance lifting solutions.

Kharagpur Facility (West Bengal)

The Kharagpur facility, established in 2011, spans a built-up area of ~58,000 sq. m with a shop floor area of ~21,600 sq. m. Designed as a state-of-the-art, ERP-enabled plant, it operates on Lean Manufacturing principles and focuses on efficient material flow and productivity. The facility specializes in manufacturing container handling equipment, including ReachStackers, under license from the Hyster-

Yale Group, and houses an assembly line capable of producing cranes with capacities exceeding 150 tonnes. Its strategic location between Kolkata, Jamshedpur, and major maritime ports enhances logistical efficiency and supports large-scale industrial operations. Additionally, the facility incorporates sustainability initiatives such as a solar power plant, contributing to reduced energy costs and lower carbon emissions.

Quality & Operational Excellence

Both facilities are certified under ISO 9001:2015, with the Kharagpur facility also certified under DIN EN ISO 3834-2, reflecting TIL’s commitment to quality, precision, and global manufacturing standards.

The facilities continues to execute orders across defence and industrial segments while advancing product innovation aligned with evolving market requirements.

Strategic Transformation &

Business Review

From Stabilisation to Scaled Growth

Following strategic investment by the Gainwell Group in 2024, TIL entered a new phase of accelerated execution and growth delivery. In FY26, the Company has transitioned from initial restructuring to operational stabilisation, market re-entry, and product-led expansion, supported by a strengthened leadership team and improved governance framework. The acquisition, marked the beginning of TIL 2.0, focused on rebuilding operational capabilities, strengthening market positioning, and unlocking long-term synergies within the Gainwell ecosystem.

Year of Transformation: Strengthening Fundamentals & Growth Visibility

Over the past two years, the Company has made significant progress in strengthening its operational and financial fundamentals, resulting in improved business momentum and growth visibility. The order book stood at approximately T274+ crore, with key orders secured from CONCOR, and the defence segment. Simultaneously, organisational capability has been enhanced through a strengthened Board and expanded leadership team across engineering and defence functions, positioning the Company for scalable growth. The Company has also expanded its aftermarket and service ecosystem, improving customer retention and building recurring revenue streams, while deepening its focus on indigenous defence capabilities aligned with national priorities.

Transformation Timeline: Key Milestones

The transformation journey has been underpinned by consistent strategic execution across phases. Following the acquisition and management restructuring in early 2024, the Company renewed key technology partnerships, strengthened operational efficiency, and re-established its presence in the market through industr platforms such as Bauma ConExpo and EXCON. FY26 marked key milestones, including product innovation initiatives, capacity utilisation improvements, and entry into new growth segments such as clean energy. These developments reflect a structured progression from initia turnaround to sustained growth acceleration.

FY26 Business Highlights: Execution Gaining Momentum

FY26 witnessed a strong return of market momentum, driven by order wins, operational improvements, and enhanced stakeholder engagement. The Company secured approximately Y200 crore of orders across key segments, including from CONCOR and the Indian Armed Forces, while also strengthening its engagement through participation in EXCON 2025 and the resumption of shareholder plant visits. Operational and digital transformation initiatives progressed significantly, with the implementation of ERP, DarwinBox (HRMS), and lead management systems, improving process efficiency and organisational scalability. In parallel, key project milestones, including COD agreements and the launch of a new performance-linked incentive framework, further strengthened execution discipline and operational accountability.

Product Innovation Re-energised: EXCON 2025 Launches

The Company has re-ignited its product pipeline with new launches aligned to market demand for high-performance equipment.

Key Product Platforms

A key highlight of FY26 has been the enhancement of TIL’s product portfolio through the launch of high-performance equipment platforms, including CarryKing 515, RT RST-8, and TMS 885. These products have been designed to address evolving customer requirements across infrastructure, logistics, and industrial applications, offering higher productivity, operational flexibility, and improved safety standards. The renewed focus on innovation has expanded TIL’s addressable market while strengthening its positioning in premium and specialised equipment segments.

Indias first pick-and-carry on-deck crane

Designed for compact and high-mobility applications

Rough terrain ReachStacker for container handling

Designed for ports and uneven terrain

85-tonne truck-mounted crane

High-performance lifting across infrastructure and industrial applications

Strategic Impact

Expands addressable market across segments

Strengthens TILs premium product positioning

Supports margin improvement through higher-value offerings

Strong Momentum Across New Product Commercialisation

The Company has moved beyond product launches into early-stage commercialization and customer deployments.

Truck-mounted cranes deployed and operational at customer sites

ReachStackers commissioned across key users

Carry crane undergoing field testing across multiple locations

Continuous Product Enhancement

Refinement of prototypes based on customer feedback

Development of enhanced variants with improved performance

Pipeline for next-generation products targeted for FY27 launch

Strategic Consolidation: Expansion into Clean Energy (TCPL Acquisition)

In line with its long-term diversification strategy, TIL has initiated expansion into the clean energy segment through the acquisition of a majority stake in Tulip Compression Private Limited (TCPL). Operating in the high-growth clean energy equipment space, TCPL brings capabilities across CNG, LNG, and hydrogen infrastructure systems. This strategic move enables TIL to expand into future-ready segments, leverage cross-selling opportunities across its customer base, and integrate manufacturing and service capabilities to scale energy solutions. The transaction strengthens TIL’s positioning as a diversified industrial player while enhancing its participation in India’s energy transition.

Strategic Synergies

Expansion into high-growth clean energy adjacency

Cross-selling opportunities leveraging TILs customer base

Integration of manufacturing and service capabilities

Transaction Highlights

~60% stake acquisition completed Plan to increase stake over time

Outlook

The Company’s transformation over the past two years has laid a strong foundation for the next phase of growth, with a clear shift toward execution-led scaling. Building on strengthened operational fundamentals and improving order visibility, TIL is now focused on driving scale through manufacturing excellence, cost discipline, and digital enablement, enabling faster deliveries, improved asset utilisation, and enhanced customer experience.

Going forward, the Company is advancing a service-led differentiation strategy, strengthening its aftermarket network, vendor partnerships, and spares infrastructure to improve uptime, customer responsiveness, and recurring revenue streams. At the same time, TIL is focused on expanding its product portfolio through next-generation product launches and engineering refreshes, alongside strategic consolidation initiatives such as the proposed TCPL acquisition, positioning the Company in future-ready clean energy adjacencies.

The Company is also intensifying its focus on high-potential segments, particularly defence, targeting ~T2,000 crore of defence orders over the medium term, supported by its longstanding capabilities, product innovation, and alignment with indigenisation initiatives.

With a strong execution roadmap, expanding product portfolio, and continued investments in operational efficiency, digital integration, and market development, TIL is well positioned to drive sustainable growth and strengthen its role as a diversified, technology-enabled industrial solutions provider across infrastructure, defence, and emerging energy sectors.

Performance Review -

On a standalone basis, the total turnover of the Company, including gross income from operations and other income, stood at T337.36 crore for the financial year ended 31st March, 2026, as against T343.07 crore in the previous financial year. On a consolidated basis, the total turnover, including gross income from operations and other income, stood at T337.36 crore in FY26, as compared to T343.09 crore in the previous year.

This significant improvement in performance reflects the Company’s ongoing efforts towards operational efficiency, strategic restructuring, and a sharper focus on growth and profitability.

Name of Ratio	FY26	FY25	Variance%	Reason for Variance
Current Ratio	1.07	1.24	(14%)	-
Debt - Equity Ratio	3.29	3.25	1%	-
Debt-Service Coverage Ratio	0.30	0.16	94%	Mainly due to increase in Finance cost in current year
Return on Equity Ratio	0.32	0.05	(729%)	Due to loss in current year and increase in Share Equity in current year
Inventory Turnover Ratio	2.08	2.49	(16%)	-
Trade Receivable Turnover Ratio	1.87	3.69	(49%)	Due to increase in Trade Receivable in current year
Trade Payable Turnover Ratio	2.86	2.31	24%	-
Net Capital Turnover Ratio	10.52	5.16	104%	Due to increase in working capital in current year
Net Profit Ratio	(0.10)	0.01	(1138%)	Due to loss in current year
Return on Capital Employed	0.03	0.13	77%	Due to decrease in earnings before exceptional items in current year
Return of Investment	(0.02)	(0.13)	81%	Impairment loss on investment is less in the current year as compared to previous year. Also there is a gain in fair valuation of investment

Opportunities Infrastructure Expansion

India’s continued focus on infrastructure-led growth presents a significant opportunity for the Company, with sustained investments across roads, railways, ports, and industrial corridors driving demand for heavy lifting and material handling equipment. Large-scale programs such as Bharatmala, Sagarmala, and multimodal logistics development are increasing project complexity and scale, requiring high-capacity and specialised equipment. This aligns strongly with TIL’s product portfolio, particularly in cranes and container handling solutions, supported by a growing pipeline of infrastructure-linked orders and improving execution visibility.

GOVERNMENT INITIATIVES

Government-led initiatives such as the National Infrastructure Pipeline, PM Gati Shakti, and the National Logistics Policy continue to enhance logistics efficiency and improve project execution timelines. These initiatives are enabling integrated infrastructure development across transport modes and driving demand for advanced material handling equipment across logistics hubs, ports, and industrial ecosystems. Additionally, increasing focus on defence indigenisation and “Make in India” is creating strong opportunities for TIL in defence equipment manufacturing, supported by its strengthening capabilities and growing order book in the segment.

URBANIZATION AND INDUSTRIALIZATION

Rapid urbanisation and industrialisation across Tier II and Tier III cities are driving sustained demand for construction and infrastructure equipment. Expansion of manufacturing clusters, industrial corridors, and warehousing ecosystems is leading to increased deployment of cranes, ReachStackers, and heavy lifting equipment.

This trend is further supported by the Company’s improved manufacturing readiness and ability to cater to diverse end-use sectors, including infrastructure, logistics, and industrial applications.

TECHNOLOGICAL

ADVANCEMENTS

The industry is witnessing increasing adoption of advanced technologies such as telematics, predictive maintenance, and digital monitoring systems, driving improvements in equipment efficiency, safety, and lifecycle performance.

TIL’s ongoing investments in product innovation, including the launch of new platforms such as CarryKing 515, RT-RST-8, and TMS 885, as well as the implementation of ERP and digital systems, position the Company to deliver higher- value solutions aligned with evolving customer requirements. Continued focus on product engineering and digital enablement is expected to enhance competitiveness and support premiumisation of offerings.

EVOLVING CUSTOMER MODELS & AFTERMARKET GROWTH

The increasing shift towards asset-light models and lifecycle cost optimisation is driving demand for rental, service, and aftermarket solutions. Customers are placing greater emphasis on uptime, service responsiveness, and total cost of ownership, creating opportunities for service-led differentiation. The Company’s expanding aftermarket network, strengthened vendor partnerships, and investments in spares infrastructure (including warehousing and digital systems) position it to capture recurring revenue streams and deepen customer engagement across the equipment lifecycle.

EMERGING SEGMENTS: DEFENCE & CLEAN ENERGY

Significant opportunities are also emerging in high-growth segments such as defence and clean energy. The Company is well positioned to capitalise on defence procurement opportunities, targeting a substantial order pipeline over the medium term, supported by its indigenous capabilities and established customer relationships. In parallel, the strategic acquisition of Tulip Compression Private Limited enables entry into the clean energy ecosystem, including CNG, LNG, and hydrogen infrastructure, expanding the Company’s addressable market into future-ready, technology-intensive segments.

Threats

Economic Cyclicality & Execution Risk

The Company’s performance remains closely linked to infrastructure and construction activity, which are inherently cyclical in nature. Any slowdown in public or private sector capex, delays in project execution, or budgetary constraints may impact demand for cranes and material handling equipment, leading to lower order inflows, reduced equipment utilization, and extended working capital cycles. While order book visibility has improved, execution risks across large infrastructure projects remain a key monitorable.

Regulatory Challenges

The industry is subject to evolving regulatory requirements, including stricter emission norms, safety standards, and quality certifications. Compliance with these regulations may lead to increased manufacturing and operating costs, particularly in the transition phase. Additionally, enhanced compliance expectations in defence and infrastructure projects may require continuous investments in processes, certifications, and technological upgrades.

Skilled Workforce Constraints

The increasing adoption of technologically advanced equipment requires a skilled workforce for operations, maintenance, and servicing. The availability of trained operators, technicians, and service personnel remains a constraint across the industry, which could impact equipment utilization, service quality, and customer experience. This also places pressure on companies to invest in training, capability development, and service infrastructure.

Supply Chain & Input Cost Volatility

The Company remains exposed to global supply chain disruptions, including volatility in raw material availability, logistics challenges, and geopolitical uncertainties. Fluctuations in input costs, particularly steel and critical components, may impact margins if not effectively managed through pricing strategies and cost optimization initiatives. Timely availability of components is also critical to maintaining production schedules and delivery commitments.

Competitive Intensity & Pricing Pressure

The domestic market continues to witness competitive intensity from both established OEMs and lower-cost imports. The availability of competitively priced imported equipment may exert pressure on pricing and margins, particularly in price-sensitive segments.

Risk & Risk Mitigation Framework

Integrated Risk Management Approach

In an increasingly complex and dynamic operating environment, effective risk management remains central to the Company’s long-term sustainability and value creation. TIL operates across infrastructure, logistics, defence, and emerging energy segments, each exposed to macroeconomic volatility, geopolitical uncertainties, competitive intensity, and evolving regulatory landscapes. Accordingly, the Company has adopted a disciplined and integrated approach to identifying, assessing, and mitigating risks, aligning risk management practices with its strategic priorities and transformation roadmap.

Governance Framework & Oversight

The Company’s risk management framework is anchored by robust governance mechanisms and clearly defined accountability structures. A dedicated Risk Management Committee at the Board level provides oversight on key enterprise risks, ensuring continuous evaluation of risk exposures and alignment with business strategy. Risk-related matters are regularly reviewed at multiple levels of management, enabling timely identification of emerging risks and implementation of corrective actions.

This structured approach is supported by a formal Risk Management Policy, which provides a systematic framework for risk identification, monitoring, and mitigation. Critical risks are escalated promptly, ensuring proactive management to safeguard the Company’s operational, financial, and reputational interests.

Strategic and Market Risks

The Company is exposed to external risks arising from macroeconomic conditions, evolving industry dynamics, and competitive pressures, which may impact long-term growth and market positioning. Economic slowdown, geopolitical disruptions, and trade policy changes could affect infrastructure investments, supply chains, and demand visibility. In addition, increasing regulatory focus on sustainability and rapid technological advancements may require continuous investments in product innovation, compliance, and capability enhancement.

The industry’s competitive landscape, including the presence of global OEMs and lower-cost imports, continues to exert pressure on pricing and differentiation. Dependence on technology partnerships with global licensors also presents potential risks related to continuity and strategic alignment, while relatively limited export exposure may constrain diversification of revenue streams.

To mitigate these risks, the Company is focused on strengthening its product portfolio through continuous innovation, expanding into high-growth adjacencies such as defence and clean energy, and enhancing customer value propositions. Improved market visibility through participation in industry platforms and strengthening order book momentum further support demand stability. Additionally, ongoing efforts to expand market reach and deepen customer engagement are expected to reduce dependence on specific segments or geographies over time.

Operational & Organisational Risks

Operational risks arise from internal processes, systems, and external supply chain dependencies, potentially impacting efficiency and execution capabilities. Key risks include supply chain disruptions, input cost volatility, data security vulnerabilities, and environmental or unforeseen events that may disrupt operations. The increasing reliance on digital systems also elevates cybersecurity risks, while the availability of skilled manpower remains critical for operating advanced equipment and supporting service operations.

To address these risks, the Company is strengthening its operational resilience through process modernisation and digital integration, including the implementation of ERP, HRMS, and lead management systems to improve visibility, control, and decision-making. Supply chain risks are being mitigated through vendor diversification, strategic sourcing, and inventory planning, while investments in facility upgrades and manufacturing efficiency are enhancing production reliability.

The Company also continues to invest in workforce capability development, health and safety standards, and service network expansion to ensure consistent operational performance and customer delivery. Cybersecurity and data protection measures are being continuously strengthened to address evolving risks associated with digitalisation.

Financial Risks

The Company’s financial performance may be impacted by fluctuations in exchange rates, interest rates, and working capital requirements. Given the dependence on imported components, currency volatility can influence input costs, while changes in interest rates may affect borrowing costs and profitability. Additionally, the capital-intensive nature of the business requires efficient working capital management to support operations and growth.

To mitigate these risks, the Company maintains a prudent financial management approach, including cost optimisation, disciplined capital allocation, and efficient working capital control. Improved operational efficiency and margin discipline, supported by product mix optimisation and cost management initiatives, are strengthening financial resilience. The Company also continues to explore financing structures aligned with project cash flows to support sustainable growth.

Legal & Compliance Risks

The Company operates in a regulated environment and is subject to compliance requirements across safety, quality, environmental, and operational standards. Failure to comply with applicable regulations, obtain necessary approvals, or manage legal proceedings may result in financial penalties, operational disruptions, or reputational impact. Additionally, legacy matters or litigation related to prior management or business operations may pose potential risks.

To mitigate these risks, the Company has strengthened its compliance framework, with a focus on ensuring adherence to regulatory requirements and industry standards. Robust internal controls, periodic audits, and continuous monitoring mechanisms are in place to ensure compliance across operations. The Company also maintains a proactive approach toward managing legal exposures and enhancing governance practices, thereby safeguarding its reputation and stakeholder confidence.

Internal Control Systems

The Company has established a comprehensive internal control framework to ensure strong governance, operational discipline, and risk management across all functions, including Sales, Finance, Procurement,

Human Resources, Production, and IT. These controls are supported by function-specific risk matrices, designed to address unique operational requirements while ensuring accountability and compliance at every level.

Each control framework has been rigorously developed and periodically reviewed, with oversight from the Internal Auditor to ensure effectiveness, relevance, and alignment with evolving business needs. Clearly defined processes and procedures provide a structured operating environment, minimizing risks of deviation and ensuring consistency across functions.

As a critical pillar of the Company’s governance framework, these internal controls safeguard assets, strengthen transparency, and enhance accountability, while supporting sustainable growth and long-term organisational resilience.

Human Resources and Industrial Relations

As our business evolves in an increasingly dynamic and fast-paced environment, our people strategy is meticulously designed to support and accelerate growth, while meeting the rising demand for skilled and engaged talent. In tandem with the transformation of our industry landscape, we remain steadfast in our commitment to investing in our most valuable asset - our people.

Employees and workers occupy a central position in our stakeholder hierarchy. Recognizing their pivotal role in driving organizational success, we are dedicated to the continuous retention, engagement, and development of talent at every level. Our goal is to foster a workforce that is motivated, satisfied, and fully aligned with the Company’s objectives, all underpinned by our core values. These values serve as the foundation of a purpose-driven organization, committed to sustainable achievement.

We prioritize internal talent development, cultivating a culture of continuous learning and professional growth. Many of our business leaders have risen through the ranks, exemplifying our commitment to nurturing talent from within and supporting internal career progression.

To realize our people strategy, we have implemented a comprehensive suite of initiatives across five core pillars of human resources:

1. Talent Acquisition

We are committed to attracting top industry talent by building a compelling employer brand and maintaining a rigorous recruitment process. Our focus extends beyond technical skills and qualifications to include alignment with our organizational culture and values.

2. Talent Retention

Retaining high-performing employees is a cornerstone of our strategy. We offer competitive compensation, career advancement opportunities, and a supportive work environment to ensure our talent remains engaged and committed.

3. Enabling Work Environment

We strive to create a supportive, inclusive, and safe workplace where employees can excel. Our policies promote work-life balance, respect, and collaboration, ensuring that everyone feels valued and empowered to deliver their best performance.

4. Diversity and Inclusion

Recognizing the unique challenges of fostering diversity in the heavy equipment manufacturing sector, we view inclusivity as both a moral imperative and a business advantage. We are committed to gender diversity, actively recruiting, retaining, and promoting women, and broadening our focus to include LGBTQIA+ inclusion and other dimensions of diversity. Our aim is to cultivate an environment where all individuals, regardless of gender identity or sexual orientation, are respected and valued.

5. Industrial Relations

Maintaining constructive industrial relations is vital to our operational effectiveness. We prioritize transparent communication and collaboration with labor unions and worker representatives. Our approach is grounded in mutual respect and open dialogue, ensuring that employees’ voices are heard and concerns are addressed promptly. By upholding fair labor practices and a safe work environment, we foster a committed and productive workforce, minimizing disputes and enhancing job satisfaction.

We are fully compliant with all regulatory requirements and are dedicated to being an equal opportunity employer. Our recruitment and employment practices are designed to be equitable and merit-based, ensuring that every individual has the opportunity to succeed based on their skills and potential.

Building a value-driven, performance-oriented organization is at the heart of our strategy. We focus on capability development and nurturing a robust talent pipeline to meet evolving skill and competency needs across all levels. Our initiatives include:

Training and Development

Regular workshops, seminars, and training programs are conducted to enhance employees’ skills and knowledge.

Leadership Development

Focused initiatives are implemented to identify and nurture future leaders within the organization.

Performance Management

Strong performance management systems are in place to align individual goals with overall organizational objectives.

Succession Planning

A proactive approach is taken to identify and prepare talent, ensuring smooth transitions into key roles as the Company grows.

Through these strategic initiatives, we are committed to empowering our people, building organizational resilience, and driving sustainable success.

Cautionary Statement

Statements in the Management Discussion & Analysis describing the Company’s objectives, projections, estimates and expectations may be ‘forward-looking statements- both written and oral’ within the meaning of applicable laws and regulations. Even though we have been careful in our assumptions, the actual results could differ materially from those expressed or implied. Achieving the anticipated results involves risks, uncertainties, and potentially inaccurate assumptions. Important factors that could make a difference to the Company’s operations include among others, economic and market conditions affecting demand, supply and pricing conditions, climate conditions, regulatory and compliance risks, technological advancements, and other incidental factors. It is not possible to foresee or pinpoint all such risk factors; therefore, the above factors and following discussions should not be considered a comprehensive overview of all risks, uncertainties, and assumptions. While we take steps to manage these risks, there is no assurance that we can fully mitigate their potential impacts.