Trom Industries Ltd Management Discussions

A. Global Economic Outlook:

The global economy remained resilient during 2025 despite evolving trade policies and uneven regional economic performance. Robust investments in technology, particularly in artificial intelligence and related industries, helped offset the adverse effects of tariffs and heightened policy uncertainty. Global headline inflation remained stable at 4.1%, with inflation trends broadly consistent across major regions. This stability was supported by lower-than-anticipated inflation outcomes in several economies. Global GDP growth reached 3.3% during the year, broadly in line with earlier projections. However, this aggregate performance concealed notable regional differences. Advanced economies recorded growth of 1.7%, with the United States expanding by 2.1%, driven by continued technology investments and supportive fiscal measures. The euro area grew by 1.4%, while Japan registered growth of 1.1%. Emerging market and developing economies outperformed, expanding by 4.4%, led by China at 5.0% and India at 7.3%. Looking ahead, the near-term global outlook remains positive despite continuing challenges arising from geopolitical conflicts, inflationary pressures, and supply chain disruptions.

Against this macroeconomic backdrop, the outlook for the power sector remains favourable. Sustained growth in manufacturing, transportation, digital infrastructure, urbanization, electric mobility, and green industrial development continues to strengthen structural electricity demand while accelerating the transition towards low-carbon, flexible, and reliable energy systems. These long-term trends reinforce Trom Industries Limiteds strategic focus on expanding utility-scale renewable energy capacity, storage-integrated solutions, and emerging green energy businesses.

Global trade tensions eased during the year following several significant policy developments. A temporary agreement between the United States and China lowered bilateral tariff rates through November 2026 and suspended export restrictions on semiconductors and rare earth minerals. Additionally, the United States removed tariffs on selected agricultural imports applicable across all trading partners, while maintaining its overall effective tariff rate broadly unchanged. Although policy uncertainty moderated from the elevated levels witnessed in October 2025, it remained above the levels observed a year earlier. Financial conditions continued to be generally supportive, notwithstanding intermittent volatility in sovereign bond yields. High-growth technology companies, particularly the group of seven leading firms collectively referred to as the "Magnificent 7," continued to generate returns that exceeded those of the broader equity market.

Global trade volumes remained resilient, supported by strong technology exports from Asian economies, which helped offset slower activity in other sectors. Central banks continued to balance inflation management with economic growth through calibrated monetary policy actions. The United States and the United Kingdom initiated gradual interest rate reductions, while the euro area maintained its policy stance and Japan implemented modest rate increases. Collectively, these policy measures supported favourable financial conditions despite persistent risks associated with global trade and geopolitical developments.

B. Overview of the Indian Economy:

The Indian economy exhibited resilience in FY 2025-26 amid global trade uncertainties and market fluctuations. First Advance Estimates indicate real GDP growth of 7.4% alongside Gross Value Added at 7.3%. These figures underscore the strength of a domestic demand-led growth trajectory. Robust agricultural performance bolstered rural earnings. Urban consumption gained momentum from stable jobs and easing inflation.

India achieved a landmark by overtaking Japan to rank as the worlds fourth-largest economy. Current GDP stands at USD 4.18 trillion. Projections position the country to claim third place by 2030 with a USD 7.3 trillion economy. This trajectory reaffirms Indias status as the fastest-expanding major economy. Domestic demand, durability and structural reforms provide firm backing.

The Union Budget 2026-27 reinforces commitment to balanced growth and fiscal prudence. Emphasis persists on infrastructure and manufacturing investments. This aligns with aspirations for a developed India. Priorities include energy transition, digital progress, and aid for small and medium enterprises. Steps to streamline regulations and expand credit access promise to lift industrial output and lay the groundwork for enduring expansion.

C. Indian Industry Outlook:

Indias energy transition gathered decisive momentum during the year under review. As on 31st March 2026, the countrys total installed power capacity stood at 532.74 GW, of which 283.47 GW, or 53.21% was based on non-fossil fuel sources. Renewable energy sources (including hydro) accounted for 274.69 GW, comprising 150.26 GW of solar, 56.09 GW of wind, 51.41 GW of hydro, 11.75 GW of bioenergy and 5.17 GW of small hydro.

The new incentives within the Renewable Energy Policy and the use of competitive bidding have lowered tariffs. These changes have made new projects more financially viable and attractive for investment. Inter-state transmission charge waivers until June 2025 accelerated completions ahead of the deadline. India crossed the 500 GW total power capacity milestone with over 51% from non-fossil sources. Key drivers include transmission infrastructure upgrades and viability gap funding for offshore wind. The country targets 500 GW of non-fossil capacity by 2030. (Source: Economic Times)

Indias total electricity generation during FY 2025-26 reached 1,840 BU, of which non-fossil sources contributed 539.97 BU, representing 29.2% of total generation. Renewable generation excluding large hydro rose to 308.81 BU, recording growth of 21.10% over the previous year.

India also improved its international standing in clean energy. As per Renewable Energy Statistics 2026 released by IRENA (with data as of December 2025), India moved to 3rd position globally in renewable energy installed capacity, ahead of Brazil. This underscores the scale and depth of Indias renewable energy opportunity and the importance of strong execution companies such as Trom Industries Limited.

D. Opportunities and Threats:

Opportunities:

• Acceleration of Power Infrastructure Investments: Rising investments in transmission and distribution networks, grid expansion, and power reliability projects are expected to create sustained demand for electrical equipment and engineering solutions.
• Expansion of Renewable Energy Ecosystem: The increasing integration of renewable energy sources, supported by storage solutions and grid connectivity projects, presents opportunities for supplying critical electrical infrastructure.
• Export Opportunities in Emerging Markets: Increasing renewable energy investments across Asia, the Middle East, and Africa offer opportunities for Indian manufacturers and EPC companies to expand their international presence through exports and project execution.

• Energy Efficiency and Sustainability Initiatives: Growing emphasis on reducing energy consumption and carbon emissions is encouraging investments in high-efficiency motors, transformers, switchgear, and other sustainable electrical solutions.
• Digitalization of Power Systems: The growing adoption of smart monitoring, remote asset management, IoT-enabled devices, and predictive maintenance technologies is creating opportunities for intelligent electrical equipment and digital energy management solutions.

Threats:

• Policy and Regulatory Uncertainty: Changes in renewable energy policies, import duties, incentive structures, grid regulations, or project approval processes may impact business growth and project viability.
• Skilled Workforce Availability: Growing demand for experienced technical professionals in renewable energy and electrical engineering may lead to talent shortages and increased employee costs.
• Climate and Extreme Weather Events: Rising frequency of extreme weather conditions such as floods, heatwaves, cyclones, and storms may disrupt manufacturing operations, supply chains, and project execution.
• Project Execution Risks: Delays arising from land acquisition, permitting, financing constraints, transmission connectivity, or contractor-related issues may affect project timelines and profitability.
• Technological Standardization Risks: Frequent changes in industry standards and certification requirements may necessitate product redesign, additional testing, and higher compliance costs.

E. Segment-wise or Product-wise performance:

The Company is primarily engaged in single segment i.e. Solar Projects.

The Turnover of the Company for the Financial Year 2025-26 is Rs. 12,485.74 Lakhs.

F. Future Outlook:

The Companys immediate focus will remain on disciplined project execution, timely commissioning, capital-efficient scale-up, portfolio diversification and strengthening of emerging businesses.

G. Risks and concerns:

The solar EPC industry operates in a dynamic business environment characterized by evolving regulatory frameworks, competitive market conditions, and changing customer expectations. Volatility in the availability and pricing of key components, project execution challenges, and fluctuations in financing costs may impact project timelines and profitability. Additionally, rapid technological advancements require continuous innovation and investment to remain competitive. The Companys ability to effectively manage these operational, financial, and regulatory risks will be critical to sustaining long-term growth and creating value for stakeholders.

H. Internal control systems and their adequacy:

The Companys internal control systems are crucial for ensuring regulatory compliance, managing financial risks, and maintaining operational efficiency in the solar EPC sector. Effective controls should encompass compliance with industry standards, robust financial management, and thorough risk mitigation strategies.

Regular audits and assessments are essential to evaluate the adequacy of these controls, identify any weaknesses, and ensure they adapt to evolving industry conditions and project demands. This ongoing review helps maintain operational integrity and financial stability.

Additionally, the following measures are taken to ensure proper control:

Regular internal and external audits. Implementation of standardized operating procedures. Comprehensive risk management framework. Ongoing employee training and development.

I. Key Financial Ratios:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector specific financial ratios. In this regard, the Company has significant changes in key sector specific financial ratios is described in the Financial Statement of this Annual Report.

J. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2025-26 is described in the Directors Report of the Company.

K. Material developments in Human Resources / Industrial Relations front including number of people employed:

The cordial employer-employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

L. Caution Statement:

Statements made in the Management Discussion and Analysis describing the various parts may be "forward looking statement" within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Govt. Regulations and amendments in tax laws and other internal and external factors.

Registered Office: 4th Floor, 421, Pramukh Tangent, Nr. Sargasan Cross Road, Gandhinagar, Gujarat, India - 382 421

By the order of the Board of Trom Industries Limited

Place: GandhinagarDate: 24th August, 2026

Sd/-Pankaj Tanaji PawarDirectorDIN: 07093588

Sd/-Jignesh Bharathbai PatelManaging DirectorDIN: 07093538