VVIP Infratech Ltd Management Discussions

VVIP Infratech Limited Annual Report FY 2025-26

Economic Scenario Global economy

The global economy continued its uneven normalisation through the year. Global GDP growth is estimated at around 3.2-3.3% for calendar years 2025 and 2026, held back by still-elevated trade policy uncertainty, geopolitical conflict and the lagged effects of the monetary tightening cycle, but supported by resilient services activity and the beginning of rate easing across major central banks. Growth remains uneven across geographies: the United States has moderated toward trend, the Euro area and Japan are expanding at around 1% or below, and China continues its gradual deceleration toward 4.5-5%. Against this backdrop, emerging and developing Asia remains the fastest growing region globally, and India remains the fastest growing large economy within it, by a comfortable margin.

Indian economy

Indias real GDP grew an estimated 8.2% in fiscal 2024, following 7.0% in fiscal 2023, and is estimated to have grown at 6.5% in each of fiscals 2025 and 2026. The Reserve Bank of India has projected real GDP growth of around 6.5-6.7% for the year ahead, sustaining Indias position as the principal growth engine among major economies. Growth has been led by strong public capital formation, a recovering private capex cycle, robust services exports and steady domestic consumption.

Household purchasing power continues to build. Per capita net national income at constant prices rose from Rs 63,462 in fiscal 2012 to an estimated Rs 1,12,358 in fiscal 2025, with population growth stable at around 1%, implying a broad-based rise in living standards. Private final consumption expenditure, the largest component of GDP at approximately 56%, grew 7.3% in fiscal 2025 to an estimated Rs 1,04,050 billion, and Crisil expects PFCE to compound at 6-8% annually through fiscal 2030. Rising incomes and consumption bear directly on both of the Companys businesses: they drive municipal service expectations, water demand and sewage generation on the infrastructure side, and housing upgrade demand on the residential side.

Inflation has been benign. CPI inflation eased to an estimated 4.6% in fiscal 2025 on a normal monsoon and softening food prices, and Crisil Intelligence forecasts CPI at around 4.3% for fiscal 2026 with non-food inflation expected to remain comfortable. Moderate inflation and an easing rate cycle hold down input cost escalation on fixed-price engineering contracts and support mortgage affordability in the housing market.

Urbanisation: the structural demand engine

The single most important structural driver for the Company is urbanisation. Indias urban population share has risen from 28% in calendar 2000 to approximately 36% in 2024 and is projected to reach 40% by 2030, implying that Indian cities will absorb well over a hundred million additional residents this decade. Every increment of urbanisation converts directly into demand for the Companys products: piped water supply, sewerage networks, sewage treatment capacity, power distribution infrastructure, sector development works and organised housing.

Public investment is following the people. Budgetary capital expenditure on infrastructure has roughly trebled from pre-pandemic levels to over Rs 10 lakh crore, around 3.3% of GDP, the National Infrastructure Pipeline carries projects of approximately Rs 108 lakh crore across stages of execution, and the 50-year interest-free capex loan scheme to states continues to incentivise state-level infrastructure creation. Crisil Intelligence expects urban infrastructure spending of Rs 7.5-8 lakh crore between fiscals 2025 and 2029, concentrated in exactly the programmes the Company serves: the Jal Jeevan Mission, AMRUT, the Swachh Bharat Mission, Namami Gange and allied urban development schemes. The Indian construction market as a whole is expected to reach approximately USD 1.42 trillion by 2027.

Within this broadly supportive setting, fiscal 2026 was a transition year for the specific programmes that drive the Companys order flows. The Jal Jeevan Mission, having achieved tap water coverage of around 80% of rural households against 16.1% at its launch in 2019, moved into a phase of consolidation, and fresh awards and fund releases under the Mission slowed considerably during the year. This funding transition directly affected execution and billing across the industrys water-focused EPC contractors, including your Company, and forms the single most important context for the financial performance discussed later in this section.

Water treatment and supply

The Indian water treatment and supply market has grown steadily over the last five years on the back of the governments push to universalise safe drinking water. According to Crisil Intelligence, the market aggregated approximately Rs 2,012 billion over fiscals 202024 and is projected to expand 1.6 to 1.7 times to Rs 3,280-3,380 billion over fiscals 2025-29, with the market for fiscal 2025 alone estimated at Rs 550-570 billion. Roughly 71-72% of this spending is capital expenditure and 87-88% is municipal in nature, which places state water utilities, urban local bodies and development authorities at the heart of demand. These are precisely the client categories your Company serves.

The structural drivers remain compelling. Indias water demand is growing at a compound rate of around 7.4% against supply growth of barely 1.1%, and the countrys water requirement is projected to reach approximately 1,180 billion cubic metres by 2050. The Jal Jeevan Mission, with an allocated budget of approximately Rs 2.8 trillion through fiscal 2026, has connected over 155 million rural households to tap water, lifting rural coverage from 16.1% at launch to around 80%. With rural connectivity now substantially achieved, the next leg of investment is expected to shift toward urban water supply, with AMRUT 2.0 targeting 24x7 water supply across 500 cities and a reduction of non-revenue water to 20%. Modernisation themes such as SCADA-based monitoring, leakage detection and asset management systems are becoming standard components of new tenders, favouring contractors with technical depth over purely civil players.

Sewage and wastewater treatment

The wastewater treatment opportunity is, if anything, larger and more durable. Crisil Intelligence sizes the Indian wastewater treatment market at approximately Rs 1,934 billion over fiscals 2020-24, projected to grow 1.5 to 1.6 times to Rs 3,030-3,130 billion over fiscals 2025-29, with fiscal 2025 estimated at Rs 490-510 billion. About three-fourths of this market is capital expenditure and roughly 80% is municipal.

The demand gap is structural, and it is the Companys core opportunity. Expected sewage generation in India rose from 70,517 MLD in fiscal 2020 to 79,908 MLD in fiscal 2024, while installed treatment capacity increased from 29,738 MLD to 42,012 MLD over the same period. Actual sewage treated stood at 27,916 MLD in fiscal 2024, meaning only around 34.6% of sewage generated is treated, up from 28.2% in fiscal 2020, but still leaving an untreated gap of well over 35,000 MLD. Closing even a portion of this gap implies a decade-plus construction and operations cycle. Uttar Pradesh, the Companys home market, is among the top states in both sewage generation and installed treatment capacity, and remains one of the largest recipients of central sewerage funding.

Policy support continues on multiple fronts. Under the Namami Gange programme, of the total sanctioned amount of approximately Rs 400.5 billion, the substantial majority is allocated to sewage infrastructure, interception and diversion works and new sewerage networks, with over 170 sewage projects covering the creation of about 5,300 MLD of STP capacity and the laying of 5,200 km of sewerage network, of which over half the projects stand completed. The Swachh Bharat Mission-Urban 2.0 carries an estimated outlay of Rs 1,41,600 crore covering nationwide water and used-water infrastructure. The Hybrid Annuity Model has matured into the preferred structure for wastewater projects, with private sector participation in Namami Gange STP projects rising from around 20% in 2020 to around 58% in 2024, deepening the role of credible private EPC and O&M operators. Reuse of treated wastewater is emerging as the next frontier, with thermal power plants and industry mandated to shift toward treated water, opening a further annuity-style market for operators.

Power distribution infrastructure

Indias power sector has entered a structural upcycle, and the last mile of that system is where the Company works. Electricity demand grew at a compound rate of approximately 7.3% between fiscals 2021 and 2025, rising from 1,276 billion units to 1,694 billion units, the fastest among major economies and ahead of China, the United States and the global average. Fiscal 2026 saw a weather-led pause, with early and widespread rainfall moderating cooling and irrigation demand and holding energy demand at 1,707 billion units, but the underlying trajectory has since reasserted itself, with first-quarter fiscal 2027 energy and peak demand reportedly up around 9% and 12% year-on-year respectively. Industry research places the structural demand growth baseline at 6-7%, driven by industrial expansion under the production-linked incentive schemes, a cooling load that already contributes around 60 GW to peak demand at air-conditioner penetration of only 8-10%, data centre build-out and transport electrification.

Peak demand tells the same story more sharply. It rose from 190 GW in fiscal 2021 to 250 GW in fiscal 2025, touched a record 271 GW in May 2026, and is projected to reach 388 GW by fiscal 2032. Indias per capita electricity consumption of around 1,460 kWh remains under half the global average of approximately 3,500 kWh, with policy targets of 2,000 kWh by 2030 and beyond 4,000 kWh by 2047. Meeting this trajectory is estimated to require investment of approximately Rs 50 trillion across the power sector through fiscal 2032. Critically for the Company, transformation capacity is projected to expand from about 1.43 million MVA to 2.38 million MVA by fiscal 2032, a near-doubling of substation and transformer infrastructure, which is the precise category of asset the Company builds.

The reform programme that funds this build-out is the Revamped Distribution Sector Scheme (RDSS), launched in July 2021 with a national outlay of Rs 3.03 lakh crore, which conditions central funding on measurable improvement in discom performance: reduction of aggregate technical and commercial (AT&C) losses to 12-15%, elimination of the gap between average cost of supply and average revenue realised, and modernisation of the distribution network. The reform is working, and it is working through construction. National AT&C losses have declined from around 23% in fiscal 2014 and 21.91% in fiscal 2021 to approximately 15% in fiscal 2025, while the ACS-ARR gap has narrowed from Rs 0.78 per unit to around Rs 0.06 per unit, with the sector posting a maiden aggregate profit in fiscal 2025. These gains have been delivered through feeder separation, substation augmentation, conductor and network strengthening and metering, the very categories of work the Company executes.

The unfinished portion of that journey is the Companys opportunity. At approximately 15%, Indias distribution losses remain roughly double the 6-8% typical of efficient global grids, and discoms still carry accumulated losses of around Rs 6.5 trillion and borrowings of approximately Rs 7.26 trillion as of March 2025. Closing that gap is not a policy exercise; it is a decade of physical network construction, and it must be executed utility by utility, feeder by feeder.

The runway in the Companys home market is exceptional. Uttar Pradesh operates Indias largest distribution system by consumer base and carries the largest sanctioned smart metering programme in the country at approximately 2.85 crore consumer meters, of which only around 62.5 lakh stood installed as of December 2025, alongside sanctioned distribution transformer and feeder metering. Nationally, RDSS has sanctioned smart metering across 45 distribution utilities covering 19.79 crore consumer meters, with roughly 3.9 crore installed under the scheme by December 2025. Slow metering rollout is widely identified as one of the principal constraints on discom recovery, which implies both continued policy pressure and continued capital release toward network works. Every tranche of this modernisation generates the 33/11 kV substation, feeder separation and network augmentation tenders in which the Company has an established record with UPPCL, PVVNL and UPCL, including delivered mandates at Meerut (Rs 136.5 crore), Roorkee (Rs 48.9 crore) and Baghpat (Rs 28.8 crore). The tender pipeline from these utilities remained active through the year, and electrical works constitute Rs 203.63 crore, around 27%, of the Companys closing order book.

Residential real estate in the National Capital Region

The Indian residential market held its momentum through the year at a national level, with sales across the eight major cities at approximately 1,71,471 units in the first half of calendar 2026, marginally ahead of the prior year, and new launches of around 1,87,350 units among the highest recorded for any first half in the past decade. NCR itself was more nuanced. Delhi-NCR had recorded the highest annual price appreciation among Indias top seven cities in calendar 2025, at around 24%, and the market spent fiscal 2026 digesting that surge: launches across NCR fell about 40% year-on-year in the June 2026 quarter to around 11,200 units while sales declined only around 6% to about 13,365 units, an unusual configuration in which absorption ran ahead of new supply and inventory tightened. Noida and Greater Noida saw launches fall over 70%, and Ghaziabad recorded the sharpest inventory decline in the region at 27% year-on-year. NCRs unsold stock of approximately 1.04 lakh units, at around 7.9 quarters-to-sell, remains concentrated in micro-markets and price bands away from the Companys positioning.

Pricing has responded to this tightening. In the first half of calendar 2026, Ghaziabad recorded residential price appreciation of approximately 15% year-on-year, among the highest in the country, with Delhi and Faridabad at 18%, Noida at 8% and Greater Noida at 6%. All three of the subsidiarys project corridors sit inside this appreciation belt.

Two structural shifts are relevant to the Companys positioning. First, demand has migrated decisively toward the premium end, with homes priced above Rs 1 crore accounting for 54% of sales across major cities in the first half of calendar 2026, up from 49% a year earlier, and available inventory under Rs 1 crore in the better micro-markets being absorbed with limited replacement supply. This plays directly to the subsidiarys premium and luxury positioning at Namah, Addresses and Yamuna. Second, infrastructure catalysts, most notably the Noida International Airport at Jewar, the RRTS corridor and expressway connectivity, are re-rating micro-markets along NH- 24, Greater Noida West and the Yamuna Expressway, the three corridors where all of the Companys residential projects and land bank are located. The airport corridor in particular is transitioning from a speculative land story to an end-user housing market as operations commence, precisely the window in which VVIP Yamuna has launched.

Competitive landscape

The listed water and wastewater EPC space in India comprises a compact set of credible players, including VA Tech Wabag Limited, Ion Exchange (India) Limited, Welspun Enterprises Limited, Enviro Infra Engineers Limited, EMS Limited, Vishnu Prakash R Punglia Limited and Vishvaraj Environment Limited, alongside regional specialists such as your Company. Momentum at the larger end of the sector remained healthy: VA Tech Wabag, the industry bellwether, closed fiscal 2026 with revenue of approximately Rs 3,944 crore, growth of about 20%, an EBITDA margin of 13.3% and an order book of approximately Rs 17,200 crore, more than four times revenue, underscoring the depth of the multi-year opportunity in municipal and industrial water. At the same time, the slowdown in awards under centrally sponsored rural water schemes compressed near-term revenue across mid-sized contractors concentrated in that segment. The Companys differentiation rests on its technical concentration in SBR-based sewage treatment, its Class A civil and electrical contractor credentials, and its regional density in Uttar Pradesh and Uttarakhand, which supports faster mobilisation and tighter cost control than nationally dispersed peers.

Opportunities

The Company sees its opportunity set across four connected fronts. The first is the urban water and sewerage cycle now gathering pace under AMRUT 2.0, Namami Gange and state urban development programmes, where the Companys SBR-based STP credentials, established through flagship 56 MLD plants at Govindpuram and Madhuban Bapudham in Ghaziabad, qualify it for tenders that exclude the majority of general civil contractors. Every STP mandate also carries a long operation and maintenance tail, typically up to fifteen years, which builds an annuity layer of revenue with near-zero counterparty credit risk given government-backed employers.

The second is distribution sector capex under RDSS and allied state programmes, where the Companys track record in 33/11 kV substations, feeder separation and loss-reduction works for UPPCL, PVVNL and UPCL positions it for the continuing strengthening cycle in Uttar Pradesh and Uttarakhand. The third is selective geographic broadening: while retaining its density advantage in its home states, the Company is selectively bidding for high-value tenders in Rajasthan, Madhya Pradesh and Haryana where technical qualification barriers are high. The fourth is the residential development pipeline of the subsidiary, where a demonstrated delivery record across nine completed projects, an unbooked pipeline in excess of Rs 2,000 crore including the Madhuban Bapudham land parcels and VVIP Namah Phase-2, and the pricing strength of the Ghaziabad and Yamuna Expressway corridors give multi-year revenue visibility at margins structurally above the EPC business.

Threats

The principal threats are the ones fiscal 2026 itself demonstrated. Dependence on government programme funding cycles means that a pause or redesign in a flagship scheme, as witnessed in the Jal Jeevan Mission during the year, translates into slower execution and billing regardless of the health of the underlying order book. Receivable and certification cycles with government employers can stretch working capital. Competitive intensity in EPC tendering remains high, and aggressive bidding by less specialised players can compress margins in commodity civil work. In real estate, the sector is sensitive to interest rates, regulatory timelines and approval cycles, and NCR carries meaningful unsold inventory at the market level even as the Companys own micro-markets remain supply-constrained. Input cost inflation in cement, steel, pipes and electrical equipment remains a standing risk on fixed-price contracts.

Strategy and Value Creation

The Companys strategy rests on a simple architecture it describes as core-and-catalyst. The infrastructure business is the core: a high- volume, government-backed EPC franchise across water, sewerage, electrical and civil verticals that generates stable cash flows at 1517% EBITDA margins with near-zero credit risk, wins work through technical credentials rather than price alone, and compounds its qualification base with every project delivered. Real estate is the catalyst: a premium residential business that redeploys the groups engineering capability into the highest-margin use available to it, earning in excess of 20% EBITDA by internalising the construction value chain that other developers pay away. The two are mutually reinforcing. The EPC business keeps the groups people, plant and supply chain fully utilised and funds its own growth; the real estate business converts that same capability into a profit multiplier, with launches timed to supply-constrained, infrastructure-led corridors rather than to the broad market cycle. Capital allocation follows the same discipline: order-book additions are filtered for funded programmes and technical entry barriers, while land is acquired only against identified launches with visible approvals, as with Madhuban Bapudham and Namah Phase-2 during the year.

This model creates value for each of the Companys stakeholders in a measurable way. For shareholders, it has built a consolidated net worth of Rs 260.45 crore, delivered consolidated EBITDA margins above 20% through a down-cycle year, and assembled an effective order book of approximately Rs 837 crore plus an unbooked residential pipeline exceeding Rs 2,000 crore, the raw material of future earnings. For government employers and the public they serve, it delivers working infrastructure: sewage treatment capacity that cleans rivers under Namami Gange, tap water networks under the Jal Jeevan Mission, and distribution works that have contributed to the national reduction in AT&C losses. For homebuyers, in-house construction means faster delivery, accountable quality and homes in corridors underwritten by real infrastructure rather than promises. For employees, a growing two-engine business offers technical depth, from SBR process engineering to high-voltage electrical works, and long-term careers. And for lenders and partners, conservative standalone leverage, collection-linked project funding and a twenty-five year record of completion provide the reliability on which continued access to growth capital rests.

Business Review and Segment-wise Performance

The Company operates two reported business groupings: the infrastructure EPC business housed in the standalone entity, spanning sewage treatment and sewerage networks, water supply and water treatment, electrical distribution and civil construction; and the real estate development business conducted through VVIP Realtech Private Limited (formerly Vibhor Vaibhav Infrahome Private Limited), a 90.02% subsidiary. The two are deliberately complementary: government-backed EPC provides high-volume, stable cash flows at 1517% EBITDA margins, while real estate layers margins in excess of 20% on top, with engineering, procurement and construction for all residential projects internalised within the group.

Infrastructure EPC

Standalone revenue for the year stood at Rs 260.64 crore against Rs 277.05 crore in the previous year, a decline of 5.9%, reflecting the slowdown in awards and execution under government water programmes, most notably the Jal Jeevan Mission, discussed above. Halfyearly phasing tells the story more precisely: revenue of Rs 129.92 crore in the first half was broadly held in the second half at Rs 130.71 crore, against a strong base of Rs 166.61 crore in the second half of the previous year, indicating that the drag was concentrated in the comparison with last years JJM-led execution peak rather than in any deterioration of the current portfolio.

What the year demonstrated clearly was margin resilience. Standalone EBITDA came in at Rs 36.98 crore, a margin of 14.2% against 14.4% in the previous year, held broadly steady despite negative operating leverage on a lower revenue base. This reflects an improving mix toward higher-margin water and wastewater contracts, disciplined project selection and tight site-level cost control. Standalone profit after tax stood at Rs 22.67 crore, a margin of 8.6%, against Rs 26.27 crore in the previous year.

The order book as on March 31, 2026 stood at Rs 756 crore, comprising STP and sewerage works of Rs 349.30 crore, water supply and water treatment works of Rs 203.58 crore and electrical distribution works of Rs 203.63 crore, spread across employers including UP Jal Nigam, Uttarakhand Peyjal Nigam, UPCL, PVVNL, the Ghaziabad Development Authority and the Noida Authority. Including the letter of award received for the Bhadohi sewage treatment project of approximately Rs 81 crore under the Namami Gange programme, the effective order book stands at approximately Rs 837 crore, providing between two and three years of revenue visibility. The composition is deliberately weighted toward longer-cycle STP and water mandates that begin billing from fiscal 2027.

Order book by segment as on March 31,2026. Excludes the Bhadohi STP LOA of ~Rs 81 crore; including it, the effective order book is ~Rs 837 crore.

Execution highlights of the portfolio delivered to date include twin 56 MLD SBR-based sewage treatment plants with pumping stations at Govindpuram and Madhuban Bapudham in Ghaziabad, a 21 MLD STP with network upgradation at Etawah, a 15 MLD STP at Kasganj, the Rs 142.6 crore Mathura sewerage network, storm water reservoir and drainage works at Lucknow, 33 kV lines, substations and transformer installations at Meerut, feeder separation works at Roorkee, distribution strengthening at Baghpat and sector development works at Ghaziabad. This spread across four verticals is a structural moat: as a turnkey contractor spanning civil, mechanical and electrical scopes, the Company internalises margins that competitors must share with sub-contractors.

Real estate development (VVIP Realtech Private Limited, Formerly known as "Vibhor Vaibhav Infrahome Private Limited")

The subsidiary made steady progress across its three active projects during the year. VVIP Namah on NH-24, Ghaziabad, launched in August 2023 with saleable area of 6.21 lakh sq ft and sale value of approximately Rs 500 crore, has achieved bookings of Rs 352 crore,

around 77% of inventory, with construction approximately 85% complete and collections of Rs 280 crore, and is now moving toward delivery. VVIP Addresses at Greater Noida West Sector-12, launched in December 2024 with saleable area of 8.55 lakh sq ft and sale value of approximately Rs 900 crore, has achieved bookings of Rs 409 crore with collections of Rs 118 crore as construction progresses through the early-to-mid build phase. VVIP Yamuna at Sector 22D on the Yamuna Expressway, in the airport corridor, was launched in February 2026 with saleable area of 10.02 lakh sq ft and sale value of approximately Rs 750 crore, and has already recorded bookings of Rs 395 crore with collections of Rs 60 crore, an encouraging launch-phase response.

Nine earlier projects stand completed and delivered, including VVIP Homes, VVIP Mangal, VVIP Meridian, VVIP Style, VVIP Niwas, VVIP Nest, VVIP Suites, VVIP Assets and VVIP Addresses (earlier phase).

The forward pipeline was materially strengthened during the year. The subsidiary acquired two land parcels aggregating approximately 17,386 sq metres at Block-A, Madhuban Bapudham, Ghaziabad through a GDA auction for a transaction value of Rs 150 crore, of which Rs 37 crore has been paid, with the balance payable in half-yearly instalments. The parcels carry an estimated saleable area of approximately 11 lakh sq ft and projected gross revenue of approximately Rs 800 crore, with launch expected within six to seven months of statutory approvals. Separately, a group company secured a 5,563 sq metre parcel adjoining VVIP Namah at Aditya World City through the NCLT process under the Insolvency and Bankruptcy Code, with an estimated saleable area of approximately 5 lakh sq ft, projected gross revenue of approximately Rs 450 crore and an expected launch in December 2026. Taken together, the unbooked residential pipeline exceeds Rs 2,000 crore.

A defining feature of the model is that the group acts as its own contractor. Engineering, procurement and construction for all residential projects is internalised through the infrastructure business, which captures the contractor margin within the group, gives direct control over build quality and pace, and reduces interest costs through faster completion. This is the basis of the real estate businesss EBITDA margins in excess of 20%, which sit on top of the 15-17% margin profile of the government EPC franchise.

Standalone results

The revenue decline of 5.9% is attributable to the slower pace of government infrastructure execution during the year, principally the considerable slowdown in the Jal Jeevan Mission cycle. Finance costs rose to Rs 6.39 crore from Rs 4.92 crore, reflecting higher utilisation of working capital facilities and fresh term borrowings during a year in which receivable and certification cycles with government employers lengthened. The balance sheet remained conservative: standalone net worth rose to Rs 180.48 crore from Rs 157.81 crore, total borrowings stood at Rs 61.64 crore, and cash and cash equivalents at Rs 22.80 crore. Inventories increased to Rs 98.17 crore from Rs 74.04 crore on account of work-in-progress on ongoing contracts, while trade receivables reduced to Rs 58.77 crore from Rs 70.30 crore, an improvement in collections despite the tighter funding environment at employer level.

Consolidated results

Consolidated revenue for the year stood at Rs 346.50 crore against Rs 370.66 crore, a decline of 6.5%, with the infrastructure slowdown partly cushioned by the real estate business. Consolidated EBITDA margin held at approximately 21%, materially above the standalone margin, reflecting the higher-margin contribution of the real estate segment alongside operating discipline in EPC. Profit after tax and minority interest stood at Rs 30.07 crore against Rs 36.11 crore.

The consolidated balance sheet expanded meaningfully during the year, with total assets rising to Rs 849.85 crore from Rs 544.58 crore, driven principally by the growth of the real estate business: inventories rose to Rs 462.91 crore from Rs 224.13 crore on land acquisition and project work-in-progress, funded through a combination of customer collections, internal accruals and long-term borrowings, which increased to Rs 139.10 crore from Rs 61.75 crore. Consolidated net worth stood at Rs 260.45 crore against Rs 217.79 crore, and cash and cash equivalents at Rs 47.94 crore. The Board regards this deployment as growth capital committed against an identified, largely preapproved launch pipeline rather than speculative land banking.

Key Financial Ratios

Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, key financial ratios on a standalone basis, together with explanations for changes of 25% or more over the previous year, are set out below.

Ratios computed on summarised standalone financials on closing balances; figures to be aligned to the audited financial statements. Note 1: inventory turnover declined on higher work-in-progress carried on ongoing contracts at year-end amid the slower execution cycle. Note 2: interest coverage declined on higher finance costs from increased utilisation of working capital facilities and fresh term borrowings, alongside lower operating profit. Note 3: debt-equity increased on term borrowings availed during the year; leverage nonetheless remains conservative at 0.34x. Note 4: return on net worth declined on lower profit after tax measured over an enlarged net worth base.

Outlook

The Company enters fiscal 2027 with an effective order book of approximately Rs 837 crore, weighted toward longer-cycle STP and water mandates that commence billing during the year, providing two to three years of revenue visibility on the standalone infrastructure business. On this basis, the Company expects a strong recovery in standalone revenue in fiscal 2027, with the operating margin profile expected to remain consistent with the 14% delivered in fiscal 2026, supported by operating leverage on a larger base, a higher share of SBR-based STP work carrying long O&M annuities, and disciplined project selection. The Company is selectively pursuing tenders in the Rs 300-500 crore range alongside its steady cadence of Rs 50-150 crore awards, positioning itself for the next AMRUT 2.0, RDSS and Jal Jeevan cycles and building order-book depth for fiscal 2028 and beyond.

In real estate, the Company enters the year with three projects billing in parallel: Namah moving toward delivery, Addresses progressing through construction and Yamuna building sales velocity from its launch, followed by the Madhuban Bapudham launch that extends the runway further. Demand in the Companys micro-markets has stayed measured but consistent, supply remains constrained, and premium positioning continues to protect pricing. Real estate remains incremental upside at the consolidated level over and above the infrastructure recovery.

These expectations are subject to the pace of government programme funding, tender award cycles, approval timelines in real estate and the other risks described below, and should be read with the cautionary statement at the end of this section.

Risks and Concerns

Client and programme concentration. A substantial majority of infrastructure revenue derives from government and quasi-government employers in Uttar Pradesh and Uttarakhand under centrally sponsored schemes. While counterparty credit risk is low, the year demonstrated that programme funding transitions can defer execution and billing. The Company mitigates this through diversification across four EPC verticals, the addition of O&M annuity revenue, selective expansion into adjacent states and the counter-cyclical contribution of real estate.

Working capital and receivables. Government certification and payment cycles can elongate, pressing working capital. The Company manages this through milestone-linked billing, close employer engagement, prudent bid selection weighted toward funded programmes, and maintenance of adequate banking limits.

Execution and input cost risk. Fixed-price contracts expose the Company to escalation in cement, steel, pipes and electrical equipment, and to site-level execution slippage. Mitigants include price-variation clauses where available, centralised procurement, the groups ownership of plant and machinery, and a two-decade execution record with delivered projects of 56 MLD scale.

Real estate cycle and regulatory risk. The residential business is exposed to interest rates, RERA and approval timelines, and demand cycles in NCR. The subsidiarys projects are concentrated in supply-constrained, infrastructure-led corridors, carry healthy booking and collection cover, and are constructed in-house, which shortens delivery timelines and reduces the period of cycle exposure.

Leverage and liquidity. Borrowings increased during the year to fund growth, including the Madhuban Bapudham land acquisition on a deferred payment structure. Leverage remains moderate relative to net worth and is monitored against collection milestones at project level.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate and effective internal control framework commensurate with the size, scale and complexity of its operations. The internal control systems are designed to safeguard the Companys assets, ensure the accuracy and reliability of financial and operational information, promote operational efficiency, ensure compliance with applicable laws, regulations and internal policies, and support timely identification and mitigation of business and financial risks.

The Company has appropriate controls and processes covering key areas of its operations, including project execution, procurement, financial reporting, accounting, receivables, payments, treasury and statutory compliances. These controls are reviewed periodically to ensure their continuing effectiveness and alignment with the Companys business requirements.

The internal audit function provides an independent assessment of the adequacy and effectiveness of the internal control environment. The observations and recommendations arising from internal audit reviews are placed before the appropriate management/Board-level forum for review and necessary corrective action. The implementation of corrective measures is monitored periodically.

The Audit Committee oversees the adequacy and effectiveness of the internal financial controls and reviews significant audit observations and the status of corrective actions. The Company believes that its internal control systems are adequate and effective for the nature and scale of its operations and provide reasonable assurance regarding the reliability of financial reporting, safeguarding of assets and compliance with applicable laws and regulations

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

Human resources continue to remain an important enabler of the Companys sustainable growth and execution capabilities. During FY 2025-26, the Company continued to focus on strengthening its human capital through employee engagement, capability development, skill enhancement and creating a safe and conducive working environment.

As on March 31, 2026, the total employee strength of the Company stood at more than 2 employees. The Company continues to focus on attracting, developing and retaining competent professionals and skilled personnel across its project sites, technical functions, finance, administration and other operational functions.

The Company encourages a culture of professionalism, accountability, teamwork and continuous learning. Appropriate training and development initiatives are undertaken to enhance the technical and functional capabilities of employees in line with the evolving requirements of the infrastructure and engineering sectors.

The Company remains committed to providing a safe, inclusive and conducive workplace and to maintaining appropriate standards of employee welfare and workplace conduct. The Company also continues to comply with applicable labour and employment laws and regulations.

Industrial relations during the year remained cordial and satisfactory, and the Company did not experience any material disruption to its operations on account of industrial relations.

The Company believes that its employees are a key strength in delivering quality projects and achieving its long-term business objectives. Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied, on account of factors including but not limited to changes in government programmes and funding, economic conditions, tax and regulatory changes, input prices, interest rates, litigation and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of subsequent developments. Industry and market data in this section has been drawn from sources believed to be reliable, including Crisil Intelligence, IBEF, the Central Electricity Authority and National Electricity Plan, government programme dashboards and published industry and brokerage research, but has not been independently verified by the Company.