Vindhya Telelinks Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company is primarily engaged in the business of manufacturing and sale of a variety of Telecommunication Cables including Optical Fibre Cables and PIJF Cables conforming to various national and international specifications, Railway Signaling and Quad Cables, Railway Rolling Stock Cables, Solar PV Cables, other types of Wires & Cables, FRP Rods/ Glass Rovings, Connectorized Cable Products, etc. (classified as Cable Segment) and Engineering, Procurement & Construction business (classified as EPC Segment). EPC projects focus on the proven core competencies of designing, executing and commissioning projects predominantly in the areas of physical digital infrastructure (telecommunication networks), water and irrigation infrastructure, power distribution infrastructure, Solar Plant for solar energy generation, etc. The EPC business segment has also built a large long distance passive optical fibre cable networks under the Infrastructure Provider Category I License spanning 23 (Twenty Three) states across India.

India witnessed a landmark transformation in its digital connectivity with the commercial launch of 5G in October, 2022, propelling one of the worlds fastest nationwide 5G network expansion. This launch had a dramatic influence on download speeds across the country. India is now the largest data consumer globally, ranks 26^th in average internet connection speed and is narrowing the gap with other major markets. However, in order to sustain the pace of 5G expansion, telecom operators in India need to sharpen focus on rural coverage and plug indoor coverage gaps, besides investment in edge and cloud infrastructure to prepare for AI-native future, while the government needs to ensure faster clearances for infrastructure deployment. Efforts are being made to maintain this momentum by creating robust infrastructure including fiberisation, small cells, street furniture, in-building solutions and antennas to support 5G in the country. The Global Market Insights research predicts that the optical fiber connectivity (OFC) industry market will more than double from a 10 year period that started in 2024. The strong growth will be propelled by increasing demand for fiber-to-the-home (FTTH) and fiber-to-the-premises (FTTP) solutions. The increasing rollout of 5G networks is a major factor driving this growth as that requires high-speed, high-capacity, and low latency connectivity, all of which are supported by optical fibre infrastructure. As cities expand and digital transformation efforts increase, both government and private telecom service providers are heavily investing in the development of fibre-optic networks. Increased reliance on seamless connectivity for activities like video streaming, remote work and smart home devices further fuel the growth of the market. This demand is also supported by the continued expansion of 5G networks, which depend on fiber-optic technology for backhaul infrastructure.

The Indian Telecom industry is experiencing remarkable growth, both domestically and internationally. With approximately 1,187 million subscribers, urban tele density has reached 131.01%, while rural areas lag at 58.31%. Despite this disparity, there remains immense potential for expansion across both sectors. The roll-out of 5G is progressing rapidly, facilitated by artificial intelligence (AI), indigenous data sets, and the establishment of localised data centres. All these developments are made possible by Optical Fibres, which have throughout been remained as the backbone for this revolutionary high speed low latency technologies powering it with its infinite high bandwidth carrying capabilities, thereby driving up the data consumption by the users with deployment of high speed broadband network technologies. The network equipment and solutions providers are therefore optimistic of higher order inflows in Financial Year 2025-26, led by demand for optic fibre cables (OFC) from data centres and expanding 5G coverage.

The Government of Indias initiatives like BharatNet project which is the backbone of its ambitious ‘Digital India drive, has revolutionized the rural broadband access, making telecom a key driver of economic and social transformation. This project has been at the heart of ensuring connectivity in underserved and remote areas of the country. The earlier phases of BharatNet project has already connected over 200,000 villages and 164,000 gram panchayats (GPs), while deploying over 700,000 route Kms of optical fibre cables to power Indias broadband ecosystem, thereby giving tremendous commitment to rural connectivity, affordability and national security and this entire telecommunication infrastructure as a pillar of Indias development goals. Overall, the fibre deployment across the length and breadth of the country has already positioned this basic telecom needs with game changing strategy thereby making the country self-reliant by simultaneously taking care of the major mission of achieving national security, digital transformation and ultimately bridging the rural-urban digital divide. This has really catapulted the digital revolution in India, by reaching the status of highest data consuming country in the world. The Government through its publicly owned telecom operator has achieved tremendous strides in rolling out mobile networks, large fibre deployment by way of enabling the Fibre-To-The-Home connections which has crossed 4 million at the end of 2024, growing steadily in both urban and rural markets; that also by deploying "Made in India telecom stack. This has truly become a ‘game changer for the entire communications network with modern best in class technologies. The future of Indias telecom sector is one of the immense possibilities and through its initiatives, the government is committed to shaping this future with innovation, security and inclusivity at its core.

Data services and applications have indeed become the lifeblood of modern living and these are required ubiquitously and incessantly. According to the recent Ericsson Mobility Report, the per capita data consumption in India is the world highest at 32 GB per month as compared to 29 GB in China and 22 GB in USA. India has thus emerged as a leader in data consumption, despite being one of the most cost-competitive telecom markets globally. While the average revenue per user is on the rise, the proliferation of over-the-top (OTT) services presents both opportunities and challenges. Telecom operators and infrastructure providers need to make substantial infrastructure investments to sustain high quality services. The need for connectivity is heightened by the proliferation and use of internet of things (IoT) and gen AI requiring high speed to latency physical infrastructure primarily based on optical fibre.

Thus, the availability of digital infrastructure everywhere has become the golden key to enabling the benefits of a digital economy and information society. Notwithstanding the niche role and importance of the mobile phone and mobility, as much as 85 per cent of the data traffic and 70 per cent of the voice traffic happens within buildings and built-up environments, as, per the Digital Infrastructure Providers Association. This could rise to as much as 90-95 per cent in the near future, with the adoption of advanced 5G and 6G applications. This heavily underscores the criticality of the quality of in-building digital infrastructure and connectivity, that is, digital connectivity infrastructure (DCI). DCI-ready buildings must embrace this reality, offering occupants comprehensive and advanced connectivity infrastructure. Built on a user-centric approach, buildings must prioritise seamless connectivity, interoperability and accessibility to diverse digital services. The study report of ICRIER, a reputed Indian research organisation suggests that every 10 per cent increase in internet traffic delivers a 3.1 per cent increase in GDP per capita and that a 10 per cent increase in investment in telecom infrastructure will increase GDP by 3.3 per cent. A recent study by three eminent IIMA professors found that the economic impact of over-the-top (OTT) apps is as high as 12 per cent of the GDP on a very conservative basis. With 85 per cent of data consumption taking place indoors, the economic impact of in-building connectivity warrants much more attention than it has been heretofore given. Last but not least, all this In-Building Communication is already made possible by way of taking optical fibres into the consumers space, thereby paving the way for an efficient broadband penetration to the masses in a big way. And these recommendations in terms of proper digital connectivity infrastructure (DCI) inside the buildings and residential places, should augur well for the proliferation of optical fibre cable networks.

Indias data centre industry has seen investment of nearly $14.70 Billion since 2020 and is likely to attract $20-25 Billion more in next 5-6 years according to a report by Colliers. Data Centre capacity across top seven cities is expected to cross 4500 MW by 2030. This growth is driven by the surge in demand for digital and cloud services, increasing adoption of Artificial Intelligence (AI) and Internet of Things (IoT) and higher internet penetration. The expansion is supported by established global connectivity through submarine cables, availability of land and power at comparatively low costs, supportive government policies and burgeoning demand. A data centre boom globally, in addition to rapid 5G rollouts is propelling the growth of optical fibre cables (OFC) industry. Accordingly, the service providers and OFC manufacturers are looking to simultaneously strengthen deployment locally and double down on building capacities and boosting exports.

Indias renewable energy sector opens new possibilities as the world shifts its focus to sustainability. India has made great progress in diversifying its energy mix over last decade, progressively lowering its reliance on traditional energy sources and establishing an improved goal of 500 GW of non-fossil fuel based energy by 2030 at the COP 26. For achieving this, the government has set an ambitious target of developing Solar Energy capacity to a level of 280 GW by 2030. As per the recently released report of International Renewable Energy Agency (IRENA) titled "Renewable Energy Statistics 2025" renewable energy capacity globally grew 15% in calendar year 2024 over the previous year. Although the 582 GW of renewable capacity added globally in 2024 represented a record annual increase, it still falls short of the pace required to reach the global tripling target of 11.2 TW by 2030. Achieving the target by 2030 would require renewable capacity to expand even faster at 16.6% annually in less than the remaining five years. The ongoing and upcoming solar energy projects require high quality Solar Photovoltaic (PV) Cables with Electron Beam irradiated cross-linking cable technology, which ensures longer life of the cables and is highly suitable for prolonged UV light exposure. The Company already has two E-beam Irradiation lines for the manufacturing of Solar PV Cables and other cables like Battery cables, automotive EV cables, ship building wire and cables, railway rolling stock cables and other specialized cables for high temperature applications. The third upcoming E-bean Irradiation line is likely to be operational by first quarter of fiscal year 2026-27 thereby scaling up the opportunities for the Company to meet the increased demand for Solar PV Cables in domestic and overseas markets. Your Company is definitely poised to reach greater heights with its strong customer base for these types of cables and is growing the business not only in the domestic market but also for exports.

As the Government is expanding its Railway footprint in a big way across the length and breadth of our country by way of strong budgetary allocation for the building of new railway lines with doubling/quadrupling options, having a strong foothold in the Railway business segment, the company is further strengthening its business outreach with its quality offerings of Railway Quad Cables and Signaling Cables, Rolling stock cables and specialty variants of Railway E-beam Cables.

Infrastructure development is essential if India is to achieve its goal of having a US$ 5 trillion economy by 2025. Together with other programs like "Make in India" and the Production-Linked Incentives (PLI) Scheme, the government is continuing the National Infrastructure Pipeline (NIP) to boost the expansion of the infrastructure industry. The Government is thus keen on developing core infrastructure that is crucial for economic advancement, as evidenced by the enhanced budgetary allocation in the successive Union Budgets. Over the past seven years, the government has consciously ramped up public spending, increasing it from 1.5% of gross domestic product (GDP) in Financial Year 2017-18 to 3.2% GDP in Financial Year 2024-25 (Budget Estimates). The absolute amount moved from Rs 3 Trillion in Financial Year 2018-19 to a Financial Year 2024-25 budgeted figure of Rs 11.11 Trillion. The capital spend targets in Financial Year 2025-26 at Rs 11.21 Trillion is only marginally higher than the Rs 11.11 Trillion original Financial Year 2024-25 target. A Rs 1 Trillion urban challenge fund to improve urban infrastructure, alongwith the continued focus on incentivising the states to pursue power distribution reforms augurs well for Companys EPC business vertical.

Towards growth and improving quality of life in rural areas, extension of the Jal Jeevan Mission to achieve 100 percent coverage until 2028 with an increased budget outlay is in line with the theme of ‘Sabka Vikas. Balancing urban development through setting up of Urban Challenge Fund of INR 1 lakh crore will transform cities into growth hubs. Infrastructure related ministries in the Union Government to come up with a 3-year pipeline of projects that can be implemented in PPP mode. States will be encouraged to do the same and can seek support from the IIPDF to prepare PPP proposals.

Besides large scale infrastructure buildup, led by several marquee government schemes, the country is also focusing on rapidly augmenting basic infrastructure including tap water coverage, sanitation access and electricity access to households. The core sector of the Indian economy will continue to witness decent growth due to the focus on infrastructure creation which augurs well for EPC business segment of the Company. The EPC segment of your Company has built a decent order book and all its key business verticals are expected to witness sustainable growth in the foreseeable future. In various states, there are ambitious government plans and investment initiatives in segments of interest for your Company, for infrastructure including for long term operations and maintenance. As the country is improving the infrastructure facilities for the citizens particularly in the rural areas through mega projects, your Companys EPC business segment is well poised to execute large ticket(s) turnkey projects across all its business verticals.

There is no other material change in the industry structure as was reported last year.

BUSINESS REVIEW AND OUTLOOK

After the award of contracts for some of the packages under BharatNet Phase III project driven by the Government of India by the end of March 2025, there will be upcoming tenders for State driven projects under BharatNet Phase III. This may provide your Company an opportunity to participate in the large ticket state led projects for both viz. supply of optical fibre cables and project execution tasks. The Governments active role in encouraging the fiberisation of cell towers will definitely give a boost to the requirements of optical fibre cables and it should augur well for the Company being a frontline player in fulfilling the wide array of technology driven optical fibre cable products.

The upcoming projects for 5G network deployments from private telecom operators may also offer an opportunity, as the Company is fully equipped to cater to the needs of the telcos with its wide variety of innovative optical fibre cables along with its high quality telecom network creation set-up with its robust services portfolio. The private telcos are expected to roll-out not only the 5G network expansion but also large scale FTTH (Fibre-To-The-Home) projects on a pan-India basis and this should give a great boost to the Companys wide product portfolio in FTTH Cable segment.

As India is booming in terms of the highest data consumption and vast use cases and applications with the help of Artificial Intelligence (AI), the growth of edge data centers, hyperscale data centres from major players who are offering the Data services to varied customer segments is witnessing an exponential growth. The global and local data centre demand is expected to increase by six to eight times in next five years. The new market entrants are wading in to capitalize on this rapidly growing industry to meet the unprecedented demand which presents opportunity for supplying specialized optical fibre cables including Rollable Ribbon Cables manufactured by the Company to serve the local and global customers. The social media companies and information technology majors have already started to build their own large scale data centres. These recent developments in the Data Centre market is surely going to give lot of opportunities for high fibre count specialized optical fibre cables and your Company is well poised to reap the benefits with its high quality, innovative cable product offerings from its recently completed capacity expansion project.

With its strong portfolio of products in the Railway segment and also in the Renewable energy segment, the Company is further strengthening its reach to the existing and the new customers base in a proactive manner. With its name etched as a top notch quality player, the Company has also developed innovative products and solutions based on its latest and state-of-the-art Electron beam irradiated cross linking technology and reaching out to a wide customer base by further doing the expansion of additional capacities in this segment, thereby cementing its brand and mark as a trusted one in the years to come. Despite global uncertainty due to ongoing conflicts and supply chain disruptions, consistent order inflows from Companys key markets are likely to drive the growth in foreseeable future. The strong government spending in India on infrastructure and rising private investment in sectors like Railways, Renewable Energy, Data Centres, Telecom physical Infrastructure signals positive momentum.

The Indian Engineering, Procurement, and Construction (EPC) sector is experiencing steady growth, with a projected 10-12% year-on-year revenue increase in FY26. This growth is driven by infrastructure development, renewable energy investments, and government initiatives. While the growth rate is expected to be lower than the previous high CAGR, the market remains attractive for EPC companies, particularly those with diversified portfolios.

Your Company has maintained a strong order book, securing new projects across the water supply (Jal Jeevan Mission - JJM), power distribution (Revamped Distribution Sector Scheme - RDSS), and renewable energy (Solar EPC) segments. The 40 MW solar project secured by your Company form a public sector company is strategically important, positioning it to capitalize on future EPC opportunities within the growing clean energy sector.

The Indian water sector is poised for significant growth and transformation by 2026, fueled by increasing water demand, proactive government initiatives, and the integration of advanced technologies. Key areas of focus include improved water management practices, efficient distribution systems, and advanced wastewater treatment solutions.

The Union Budget 2025-26 underscores Indias commitment to addressing its water security challenges through a holistic and forward-looking approach. Several key initiatives within the budget offer both immediate and long-term opportunities for the company: Infrastructure Boost: The budget allocates a substantial Rs 74,226 crore to the Department of Drinking Water and Sanitation. Of this, Rs 67,000 crore is specifically earmarked for the Jal Jeevan Mission. This substantial funding will accelerate the provision of tap water connections to rural households, effectively addressing one of Indias most pressing water access challenges. Additionally, investments in strengthening water supply networks and distribution systems will ensure more efficient and reliable water management nationwide.

Smart Technologies: A significant portion of the budget emphasizes the strategic use of advanced technologies to revolutionize water management practices. The integration of IoT-enabled water monitoring systems, AI-driven analytics, and advanced digital mapping tools will enable real-time tracking of water distribution, proactive leak detection, and stringent quality control measures. These technologies are poised to bring greater transparency, enhanced efficiency, and improved sustainability to water systems, ultimately benefiting both urban and rural communities.

Urban Water Management: Recognizing the growing urbanization of India, the budget prioritizes the development of sustainable water solutions for its expanding cities. This includes strategic investments in advanced wastewater treatment systems, robust stormwater drainage systems, and integrated water supply networks. These targeted initiatives will optimize water usage, minimize water wastage, and ensure the long-term sustainability of urban water resources.

Public-Private Collaboration: The budget strategically emphasizes the crucial importance of fostering public-private partnerships (PPPs) in the water management sector. By encouraging greater investment and closer collaboration with private enterprises, the government aims to drive innovation, enhance operational efficiency, and accelerate the development of sustainable water management projects.

Budgetary measures for the year 2025-26 also aim to initiate transformative reforms across six key domains, including the Power Sector, interalia, with allocation of Rs 16,021 crore to the Power Reform Linked Distribution Scheme (RDSS), also known as the Revamped Distribution Sector Scheme (RDSS). This strategic allocation will enhance the Companys growth potential and bolster its competitiveness in the years ahead. The RDSS facilitates discoms access to vital funds for prepaid smart metering, advanced system metering, and distribution infrastructure works designed to significantly reduce losses and promote modernization.

Indias strong focus on building resilient infrastructure is commendable, recognizing that significant infrastructure needs remain unaddressed and continued improvements in this sector are essential for the nations sustained economic growth. The anticipated growth in overall infrastructure spending by both central and state governments in the coming fiscals will be driven by the Governments strategic focus on developing core segments.

The EPC business segment remains a primary revenue contributor for the Company. While project execution timelines linked to government funding and approvals necessitate periodic working capital infusions, proactive cash flow optimization strategies and rigorous project selection processes have effectively managed borrowing costs and maintained financial stability.

Looking forward, the Companys strategic priorities include:

Strengthening margins: Enhancing profitability through efficient project execution, meticulous cost optimization, and proactive risk management strategies.

Expanding EPC + O&M model: Developing and implementing the EPC + Operations & Maintenance (O&M) model to generate sustainable, long-term revenue streams.

Integrating ESG principles: Incorporating Environmental, Social, and Governance (ESG) principles into core operations to foster responsible and sustainable growth.

SEGMENT-WISE PERFORMANCE

Sale of Products (Cables, etc.)

During the year under review, the Companys Revenue from Operations of Cable business segment on account of sale of products comprising of telecommunication cables, solar cable, other wires and specialty cables, FRP Rod/Glass Rovings and traded goods, etc. increased from Rs 59540.80 lakhs in the previous year to Rs 79221.67 lakhs. Your Company continued focus on specialty and solar cables has provided strong momentum in revenue.

Sale of Services (EPC Contracting/Turnkey Services)

The Companys Revenue from Operations during the year under report in the EPC business segment decreased to Rs 330486.50 lakhs as compared to Rs 352363.06 lakhs in the corresponding previous year. The marginal fall in revenue is on account of slowdown in Government capital expenditure in JJM Water Project(s) but the shortfall is largely compensated by other Power infrastructure projects.

Existing EPC business segments, interalia, encompasses telecom network rollouts with IP-1 and EPC projects execution, interalia, in irrigation, sewerage, water supply infrastructure, power distribution and substation, solar power plant, system integration, etc. Based on Government of Indias thrust on Har Ghar Jal, your Company had bagged a big ticket order for JJM water project. The projects advancement remains on track, reflecting commitment to delivering essential infrastructure solutions. The EPC business segment of your Company has also bagged large value orders for power distribution in the states of Tamil Nadu and Kerala, thus augmenting the already healthy order book.

Your Company is aligned with Government policies to seize opportunities in the relevant areas to focus on calibrated diversification in order to continue the growth trajectory. The Companys EPC Business Segment is looking to increasing the order book in the water, telecom, irrigation, energy and other infrastructure sectors of interest by participating in selective tenders to maintain a healthy bottom line. Companys IP-1 performance during the year was muted due to temporary slowdown in capital expenditure by the telecom service providers. Companys IP-1 business model has, however, delivered tremendous value to all the telecom operators who are its esteemed customers, deriving greater benefits out of the network built by the Company thereby offering latest digital services to the subscribers with ultimate customer delight.

OVERALL REVIEW

During the year under review, the Company has consolidated its overall position in both the business segments.

FINANCIAL REVIEW y The Revenue from Operations changed marginally and stood at Rs 405383.41 lakhs during the year 2024-25 as compare to Rs 408837.15 lakhs during the year 2023-24. y The aggregate other income during the year 2024-25 decreased to Rs 1858.71 lakhs as against Rs 2173.62 lakhs in the previous year. y The Company achieved profit before interest, depreciation/amortisation and tax of Rs 26775.12 lakhs during the year 2024-25 as compared to Rs 30526.27 lakhs in previous year. Profit before depreciation and tax during the year 2024-25 stood at Rs 17538.62 lakhs as against Rs 23033.42 lakhs in the previous year. y The finance costs has increased to Rs 10178.08 lakhs (previous year Rs 8804.12 lakhs) primarily due to increase in borrowings to cater the increased working capital requirements. y There was no change in the capital structure during the year. The Other Equity of the Company stood at Rs 136679.04 lakhs during the year under review as compared to Rs 131454.42 lakhs in the previous year. y The addition to the fixed assets of Rs 1368.32 lakhs during the year is mainly for cables infrastructure at its manufacturing facilities at Rewa (M.P.). y The inventories increased marginally to Rs 122072.80 lakhs as on March 31, 2025 from Rs 118997.37 lakhs as at the end of the previous year. y The increase in trade receivables level stood at Rs 170591.50 lakhs as on March 31, 2025 as compared to Rs 96114.25 lakhs as on March 31, 2024 was due to slow down in government expenditure in JJM projects and some Power Projects. y Key Financial Information (Standalone & Consolidated): (Rs in lakhs)

y For detailed information on the financial performance with respect to operational performance, a reference may please be made to the financial statements. y Details of significant changes in Key Financial Ratios:

OPPORTUNITIES, THREATS & BUSINESS OUTLOOK y After the recent award in Government driven BhartNet Phase III project, there are many state driven projects under this BhartNet Phase III are going to be announced and it is definitely a good opportunity for your Company to do the project on a turn-key basis with its robust supplies and services portfolio.

y Upcoming 5G network expansion and roll out of FTTx networks across the major geographies in globe may also provide measurable growth opportunities for your Company.

y The much expected, fiberisation projects to take the levels upto 70-80 % which is the backbone for 5G mobile communication network, should definitely bring in good business opportunities for the Company.

y Fibre-To-The-Home (FTTH) projects which are on the anvil, are also expected to give good business volume for some of the innovative products and solutions already developed and established by the Company.

y Constant product innovation coupled with world class and competitive solutions may generate good demand for Companys products in solutions in global market thereby derisking its business model by reducing reliance on domestic market.

y The core sectors of the economy such as Railways, Defence, Renewables and Energy Transmission & Distribution will continue to grow strongly. Additionally, the new energy theme remains promising and is likely to maintain its positive trajectory which may provide opportunities for revenue growth for products of the Company.

Opportunities:

y Passive Telecommunication Networks: The department of telecommunications (DoT) is working on the next leg of the National Broadband Mission to improve connectivity, quality of services, increase broadband penetration and infrastructure in the country. Though the current National Broadband Mission has run its five year cycle, the targets have not been achieved.

Therefore, the new mission will aim at setting realistic targets with regard to tower fiberisation, laying infrastructure for optical fibre cable (OFC) and improving broadband speed. The pain point – pace of fiberisation (laying optical fibre underground), which is instrumental in ensuring consistent delivery of telecom services. y Power Distribution: Government initiatives like the Revamped Distribution Sector Scheme (RDSS) and the push for Advanced Metering Infrastructure (AMI) and Smart Grids are creating significant EPC opportunities in power distribution.

y Water & Irrigation: Continued expansion of rural water supply projects under the Jal Jeevan Mission (JJM), coupled with government-backed irrigation schemes, presents tremendous EPC growth potential. Rising demand for Sewage Treatment Plants (STPs) and Water Treatment Plants (WTPs) further expands opportunities. y Telecom: Ongoing 5G infrastructure deployment is expanding EPC opportunities in fiber laying and network deployment.

Increased broadband connectivity in rural areas, driven by the BharatNet project, and private telecom investments support growth in the Cable and EPC segments. Fibre-To-The-Home (FTTH) projects which are on the anvil, are also expected to give good business volume for some of the innovative products and solutions already developed and established by the Company.

Threats:

y Cost & Execution Risks: Fluctuations in raw material prices (steel, cement, cables, etc.) may disturb budgeted profitability.

Execution delays due to land acquisition, Right of Way (ROW) constraints, and local clearances impact project timelines. Delays in receivables from government departments and utility clients can strain working capital.

y Market Competition: The entry of large, well-capitalized players and aggressive bidding practices may create pricing pressure, impacting profitability.

y Human Capital Risk: Workforce planning, talent retention, succession planning, and skill gaps pose risks to the Companys long-term success. y Non-Terrestrial (SATCOM) Networks: The advent of non-terrestrial network, more specifically in addition to the GEO satellites, the Medium Earth Orbit (MEO) and Low Earth Orbit (LEO) satellites (constellations) has given a new inflection point to telecommunications technology posing threat to terrestrial telecom network due to wide coverage, remote area connectivity, rapid deployment and resilience in disaster. Superior performance satellite communication may be a perceived threat to terrestrial network, due to its broad reach and adaptability. However, it also faces challenges such as latency, high cost, weather sensitivity and security concerns.

Business Outlook (FY 2025–26)

y The Company is well-positioned to capitalize on the continued infrastructure push by both central and state governments across the power, water, and telecom sectors. A strong order book pipeline, supported by key government schemes like RDSS, JJM and other Water/ Irrigation Projects, is expected to drive top-line growth. y Going forward, the focus will remain on Improving profit margins through careful project selection, cost optimization, and risk mitigation, Expanding the EPC + O&M (Operations & Maintenance) model to create long-term value and Investing in automation, GIS mapping, and digital tools to enhance execution efficiency and monitoring, particularly in power distribution and water infrastructure. y Additionally, in an increasingly uncertain and volatile global environment, ESG (Environmental, Social, and Governance) principles are becoming critical for long-term resilience. The Company has initiated the integration of ESG considerations across all business functions, thereby mitigating risks arising from both domestic and international factors and ensuring responsible and sustainable growth.

RISKS AND CONCERNS

Risk management is a critical business driver that is integrated into all activities. The Company has a well-defined enterprise risk management strategy and has implemented a progressive, predictive risk identification and management program to limit risk exposure, reduce costs, and increase shareholder value. Risk management is also reviewed and recalibrated from time to time to align with the operational, legal, and financial goals and ensure safety, project execution, and staff satisfaction at all times of uncertainty. The risks are identified on a regular basis, across functions and business segments and the Company strives to link each risk with mitigation step to ensure business continuity. Concerted efforts are being made to improve risk management programs so that both businesses so that the greater business value can be created and corporate reputation can be protected. Risk mapping updates are made available to Audit Committee and Risk Management Committee of the Board.

Effective risk management encompasses the comprehensive identification, meticulous measurement, and strategic mitigation of potential risks. The following are key risks that may impact the Companys operational efficacy and financial performance, though this list is not exhaustive:

y Prevailing financial and liquidity conditions within the broader economy, including governmental budgetary allocations for key clients, and the Companys capacity to sustain market share amid intensifying competitive pressures.

y The interconnected nature of business processes in the digital environment is increasing the risks of cyber threats and data breach by inimical third parties, potentially disrupting Companys business operations causing financial losses or reputational damage. The Company, however, ensures safe handling of the Companys sensitive data as well as that of its Associates by implementing various controls.

y Reliance on a concentrated customer base within the cable business segment.

y The ongoing geopolitical events and economic shifts by way of growing global protectionism, supply chain disruption and the recalibration of international alliances and the rise of economic nationalism have also created fluid situation forcing to reassess dependencies and adapt to new dynamics. As a consequence, escalating costs of raw materials and logistical operations, supply chain bottlenecks caused by geo-political developments, regional conflicts and social unrest may impact business operations.

y Unfavourable macro-economic environment, such as fluctuating interest rates, inflation and systemic financial crises scenario, could lead to a global slow down in growth, market recessions and may affect economic stability.

y Technology disruptions and evolving information technology risks.

y Intensifying competitive dynamics within the marketplace.

y Potential inability to pass through to its customers increase in cost like labour, energy, etc. could reduce future profitability.

y Evolving compliance and regulatory pressures, including modifications to tax laws.

y Potential delays in the execution of turnkey projects, leading to financial penalties and cost overruns.

y Retention of highly skilled personnel within the cable and EPC business segments.

y Environmental and occupational safety risks.

y Structural risks emanating from globalization, trade disputes, and macroeconomic interventions by governmental entities.

y Potential business disruptions stemming from national disasters, pandemics, epidemics, supply chain vulnerabilities, and regulatory shifts imposed by governmental bodies.

y In the EPC business segment, customary operational risks such as rights-of-way conflicts, resource availability challenges, and adherence to stipulated project completion timelines are proactively managed through diligent pre-bid planning, rigorous execution monitoring, and timely collections from clients. Risks pertaining to the financial stability of customers, joint venture partners, and suppliers/service providers are continuously assessed and mitigated. The telecommunications (Right of Way) Rules, 2024 allow municipal bodies to levy restoration charges to restore public property (in this case roads) that may be damaged or disrupted during the process of laying fibre. While the RoW Rules of 2024 standardised the rates for laying underground fibre, the restoration charges are left to the local bodies to decide. The concerns around the slower pace of fiberisation in key circles also arise from the rapid adoption of 5G by customers and enterprises. Above the ground infrastructure deployment is also a challenge in some cities. Despite RoW Rules recognising the practice of using street furniture such as electric poles to deploy fibre cables above the ground, local bodies continue to impose bans on the same.

y Furthermore, all ongoing insurable projects are comprehensively insured, and legal and contractual contingencies are rigorously evaluated at the pre-bid stage to ensure alignment with the Companys overall risk appetite.

INTERNAL CONTROL FRAMEWORK

The Companys system of financial, operational and compliance control and risk management is embedded in the business process by which the Company pursues its objectives. The Company is also required to comply with the provisions of the Companies Act, 2013 as regards to maintaining adequate internal financial controls over financial reporting. The management is committed to ensuring an effective internal control environment, commensurate with the size and complexity of the business, which provides assurance on the efficacy of the Companys operations and safety/security of its assets besides orderly and legitimate conduct of Companys business in the circumstances, which may reasonably be foreseen. The Company has a defined organization structure, authority levels, delegated powers, internal procedures/SOPs, rules and guidelines, code of conduct, etc. for conducting business transactions, ensuring reliability of financial controls and compliance with applicable laws and regulations. To manage the risks profile of the Company, proper organization structures, EHS/other compliances, whistle blower mechanism, compliance management, performance reviews are conducted at regular intervals.

Further, to augment the internal controls, the Company has engaged a firm of Chartered Accountants for internal auditing, who besides conducting periodic audits, independently reviews and recommend measures to further strengthen the control mechanism. The Internal Audit programs cover the entire operations of both the business segments of the Company. The Internal Auditors regularly brief the Management and the Audit Committee on their significant audit observations/findings, steps to be taken with regard to deviations, if any, and the remedial measures as required are implemented by changing processes and/or setting up additional internal controls. The Audit Committee also reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, if any.

ENVIRONMENT & SAFETY

The Company successfully continued with the implementation of occupational health and safety, quality and environmental protection measures and these are ongoing processes at the Companys plant and facilities. Various proactive measures have also been adopted and implemented which, inter alia, include adoption of cleaner technologies wherever feasible, conservation of resources through waste reduction and training of employees with a focus on sustainable development by improving standards on occupational health & safety and environment protection. As a recognition of these objectives, the entire range of products of the Company continue to remain certified to the requirement of international standard ISO 14001:2015 (Environmental Management System) and ISO 45001:2018 (Occupational Health and Safety Management System) by the DNV GL Business Assurance India Pvt. Ltd.

INDUSTRIAL RELATIONS AND HUMAN RESOURCE DEVELOPMENT

The Company sees its relationship with its employees as critical to the future and its employee relations agenda focuses on ensuring that employees feel valued, on managing change constructively, and on creating an environment and culture within which every employee can maximize his contribution. The Company follows the core values of "be thorough on safety first and compliance" and takes great pride in being compliant to all laws and regulations governing labour and employees and continues to exercise strong governance over all established procedures and practices.

The human ingenuity has always been one of the Companys greatest assets. Accordingly, your Company believes that the competence and commitment of the people are the principle drivers of competitive advantage which enhances competitive strength by differentiating it from competitors. The Company believes in encouraging and nurturing the innovative spirit of its employees and hence put in focused efforts to create strong innovation ecosystem in the organisation aimed at customer centric products, solutions and services with an eye on powering future-facing businesses. The Company emphasizes the development of home-grown leaders by capability development, growth and professionally rewarding and enriching work experience. Employees are also competitively rewarded and recognized. The focus is therefore increasingly going to be retaining talent and try to develop human resources capable of opening up the next generation by identification of key people, knowing their aspirations, designing their growth paths and realigning responsibilities, etc. Efforts are being made to strengthen organisational culture in order to attract and retain the best talent in the industry by redefining HR policies and processes in line with contemporary market practices. The Company believes that skill development initiatives play a vital role in cultivating a competent work force capable of navigating technological challenges. Accordingly, training needs are identified in systematic manner, virtual as well as physical training programs were organized enabling the employees to grow their abilities for making the Company an enduring organisation, both economically successful and having impact on their operating environment. The Company is also gradually gearing up for new work realities to stay relevant and creating a work environment that fosters trust and empathy. The industrial relation climate of your Company continues to remain harmonious with focus on improving productivity, quality and safety. The Board records its appreciation of the dedicated and exemplary services rendered by employees at all levels for safe and reliable operations throughout the year. The Company employed 2980 numbers of employees as on March 31, 2025.

CAUTIONARY STATEMENT

The Management Discussion and Analysis Report may contain certain statements that might be considered "forward looking statements". These statements are subject to certain risks and uncertainties. Actual results may differ materially from those expressed or implied in the Statement as important factors could influence the Companys operations such as demand supply conditions, Government policies, local, political and economic development, industrial relations, risks inherent to the Companys growth and such other factors. The Company does not undertake any obligation to publicly update, inform or revise such statements, whether as a result of developments, events or actual materialization. Market data and product analysis contained in this report has been taken from internal company reports, industry & research publications, but their accuracy and completeness are not guaranteed and their reliability cannot be assured.