Waa Solar Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Indian renewable energy sector, particularly solar power, continues to emerge as one of the most attractive investment opportunities globally. As per the Ministry of New and Renewable Energy (MNRE), India has set an ambitious target of achieving 500 GW of non-fossil fuel-based installed power capacity by 2030, with solar power expected to remain a key contributor towards achieving this target.

During FY 2025-26, India witnessed significant expansion in its solar power capacity. The countrys installed solar capacity reached approximately 150.26 GW as of March 31, 2026, compared with 105.65 GW as of March 31, 2025, representing an addition of approximately 44.61 GW during F.Y. 2025-26.

The sector witnessed rapid developments across the following areas:

Utility-scale solar projects:

Continued expansion of large-scale solar parks, renewable energy projects and hybrid renewable energy projects.

Solar manufacturing:

Increasing domestic manufacturing of solar cells and modules, supported by the Production Linked Incentive (PLI) scheme and the governments focus on reducing dependence on imports.

Rooftop solar:

Accelerated adoption of residential, commercial and industrial rooftop solar, supported by initiatives such as PM Surya Ghar: Muft Bijli Yojana.

Solar-wind hybrid and storage:

Growing deployment of hybrid renewable energy projects and battery energy storage systems to improve grid stability and renewable power availability.

Floating solar:

Continued development of floating solar projects, particularly on reservoirs and water bodies, providing opportunities for large-scale solar generation where land availability is constrained.

Green hydrogen:

Increasing integration of renewable energy, particularly solar power, with green hydrogen production, creating additional long-term demand for renewable electricity.

Overall, FY 2025-26 marked a significant phase of growth for Indias solar industry, supported by favorable government policies, increasing private-sector participation, declining renewable-energy costs and rising demand for clean electricity.

2. FORWARD-LOOKING STATEMENTS:

This Report contains statements that constitute forward looking statements including, without restraint, statements relating to the expectations, projections and implementation of strategic initiatives and other statements relating to the future business growth/ developments and economic performance. These statements based on certain expectations, believes, projections and future expectations concerning, the development of strategic growth, market risks, uncertainties and other factors depends on the managements thoughts. It could differ from actual performance and results, to differ significantly from Managements thoughts / expectations.

3. INDIAN ECONOMY:

The Indian economy remained resilient during FY 2025-26, despite continuing global economic uncertainties. The focus on accelerating economic growth through higher domestic consumption, investment, infrastructure development and fiscal consolidation. The Government continued to emphasize reforms and measures aimed at strengthening the countrys economic fundamentals and enhancing competitiveness.

The Budget estimated the fiscal deficit at 4.4% of GDP for FY 2025-26, compared with 4.8% in the Revised Estimates for FY 2024-25, reflecting the Governments continued commitment towards fiscal consolidation while maintaining support for economic growth. The Budget Estimates provided for a fiscal deficit of approximately Rs.15.69 lakh crore.

The Governments continued focus on capital expenditure, infrastructure development, manufacturing, energy security and private-sector investment is expected to support economic activity. The Budget also placed emphasis on strengthening domestic manufacturing and supply chains, promoting investment and improving productivity.

For the renewable energy and solar sector, the policy focus on clean energy, domestic manufacturing, energy transition and infrastructure development provides a favourable environment for long-term growth. The Governments initiatives in renewable energy, solar manufacturing, green hydrogen and energy storage are expected to support increasing demand for clean power and create opportunities for businesses operating in the solar energy value chain.

While the Indian economy continues to benefit from strong domestic demand and a relatively resilient financial system, external risks such as geopolitical tensions, global trade uncertainties, commodity-price volatility, supply-chain disruptions and changes in global financial conditions may continue to impact economic growth.

Overall, the policy direction is supportive of sustained economic growth, infrastructure development and Indias transition towards a cleaner and more sustainable energy mix.

4. GLOBAL ECONOMY:

The global economy continued to experience steady but uneven growth during 2024, amid persistent geopolitical tensions, trade policy uncertainties, supply-chain disruptions and relatively weak manufacturing activity in several major economies. While inflationary pressures moderated across many economies, services inflation remained relatively persistent, creating uncertainty regarding the pace and direction of monetary policy easing.

Against this backdrop, India remained one of the fastest-growing major economies. As per the Economic Survey 2024-25, Indias real GDP growth for FY 2024-25 was estimated at 6.4%, with growth supported by resilient domestic demand, improving rural consumption, agriculture and the services sector. For FY 202526, the Economic Survey projected real GDP growth in the range of 6.3% to 6.8%.

The Union Budget 2025-26 emphasised accelerating economic growth, promoting inclusive development, encouraging private-sector investment and enhancing the spending power of households. The Budget also highlighted Indias strong economic fundamentals and its position as the fastest-growing major economy, while recognising that geopolitical headwinds could result in lower global economic growth over the medium term.

Global economic risks remain significant, including geopolitical conflicts, trade restrictions and tariff-related uncertainties, commodity-price volatility, supply-chain disruptions and fluctuations in global financial conditions. Nevertheless, Indias large domestic market, favourable demographics, structural reforms,

growing infrastructure investment and expanding digital economy provide a strong foundation for sustained economic growth.

For the Indian solar and renewable energy sector, the global transition towards clean energy, Indias increasing energy requirements and the Governments focus on energy security and sustainable development are expected to create significant long-term opportunities. The continued expansion of renewable energy capacity, domestic manufacturing and clean-energy investments is expected to support the growth of the solar industry.

5. GOVERNMENT INITIATIVES:

The Government of India continues to accord significant importance to renewable energy as part of its objectives of energy security, decarbonisation and sustainable economic growth. The Financial Year 202526 has strengthened the focus on domestic clean-energy manufacturing, solar energy, green hydrogen, renewable-energy transmission and research and development. Key government initiatives and budgetary provisions for FY 2025-26 include:

National Green Hydrogen Mission:

The National Green Hydrogen Mission aims to position India as a global hub for the production, utilisation and export of green hydrogen and its derivatives. The Mission has an overall objective of developing a green hydrogen production capacity of about 5 million metric tonnes per annum by 2030, supported by substantial renewable-energy capacity.

For F.Y. 2025-26, the Union Budget provides Rs.600 crore for the National Green Hydrogen Mission. The 2025-26 Outcome Budget envisages, among other objectives, awarding approximately 1.03 million tonnes per annum (MMTPA) of cumulative green hydrogen production capacity and 3,000 MW of electrolyser manufacturing capacity.

Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM):

The PM-KUSUM Scheme seeks to promote solar energy in the agricultural sector through decentralised renewable-energy plants, installation of standalone solar agricultural pumps and solarisation of existing grid-connected agricultural pumps. The scheme aims to add 34,800 MW of solar capacity by March 2026, with total Central Financial Support of Rs.34,422 crore.

Ministry of New and Renewable Energy:

For FY 2025-26, the Union Budget provides Rs.2,600 crore for PM-KUSUM. The Outcome Budget targets the solarisation of 3 lakh grid-connected agricultural pumps and installation of 1,000 MW of decentralised ground-mounted grid-connected solar power capacity during the year.

Production-Linked Incentive (PLI) Scheme for High-Efficiency Solar PV Modules:

The Government continues to promote domestic manufacturing of high-efficiency solar photovoltaic cells and modules through the Production-Linked Incentive (PLI) Scheme for the National Programme on High- Efficiency Solar PV Modules. The initiative is intended to reduce Indias dependence on imported solar equipment, increase domestic value addition and develop an integrated solar manufacturing ecosystem.

The Union Budget 2025-26 further emphasised Clean Tech Manufacturing, covering solar PV cells, EV batteries, motors and controllers, electrolyzers, wind turbines, high-voltage transmission equipment and grid-scale batteries. Under the solar PV PLI programme, around 45 GW of solar PV cell manufacturing capacity has been awarded, with capacities expected to be commissioned during 2025-26, 2026-27 and 2027-28.

PLI Scheme: The original approved outlay for the High-Efficiency Solar PV Modules PLI programme is Rs.24,000 crore across its approved tranches, rather than the Rs.19,500 crore figure stated in the earlier text.

Domestic manufacturing of high-efficiency solar PV cells and modules, greater domestic value addition, reduction in import dependence, technology development and integration of India into global clean-energy supply chains.

Renewable Energy Research and Development (R&D):

The Government continues to support research and development across renewable-energy technologies, including solar, wind, bio-energy and other emerging clean-energy technologies. Under the Ministry of New and Renewable Energy, the R&D allocation for FY 2025-26 is Rs.46 crore. The Budget documents state that R&D projects are continuous in nature and projects across different renewable-energy sectors will be undertaken during 2025-26.

In addition, the government has also announced a broader Rs.20,000 crore allocation for private-sector- driven Research, Development and Innovation (RDI), which provides a wider financing framework for technology development and innovation, although this is not exclusively a renewable-energy allocation.

Green Energy Corridor:

The Green Energy Corridor is an important enabling initiative for integrating large-scale renewable-energy generation into the national electricity grid. For FY 2025-26, the Union Budget provides Rs.600 crore for the Green Energy Corridor. The provision is intended to support the development of transmission infrastructure required for renewable-energy integration, with the Budget documents referring to cumulative intra-state transmission infrastructure of 6,000 circuit kilometres (ckm).

The PM Surya Ghar:

Muft Bijli Yojana has emerged as a major initiative for promoting rooftop solar among households. The scheme aims to solarise one crore households and provide households with access to free electricity of up to 300 units per month through rooftop solar installations.

Focus Areas: Renewable-energy transmission infrastructure, grid integration, strengthening of transmission systems and enabling evacuation of power from renewable-energy projects.

6. OUTLOOK:

With Indias accelerated focus on renewable capacity addition and strong policy support, the solar industry is poised for double-digit growth in the coming years. Your Company aims to leverage its technical expertise and execution capabilities to:

• Expand presence in utility-scale solar parks and hybrid renewable projects.

• Strengthen its EPC order book through participation in SECI/NTPC tenders.

• Explore new opportunities in floating solar, battery storage, and green hydrogen projects.

• Focus on cost optimization, digitalization of project management, and strengthening supply chain resilience

7. OPPORTUNITIES AND THREATS:

Opportunities Growing Solar Demand:

Increasing adoption of solar energy in India provides significant opportunities for business growth and expansion.

Government Support:

Favourable government policies, renewable energy targets and incentives are expected to support the growth of the solar industry.

Domestic Manufacturing:

Growing emphasis on domestic manufacturing and reducing import dependence creates opportunities for Indian solar companies.

Rooftop & C&I Solar:

Rising demand for rooftop and commercial & industrial solar solutions offers opportunities to diversify the customer base.

Technological Advancement:

Adoption of advanced and high-efficiency solar technologies provides opportunities to improve product offerings and competitiveness.

Energy Storage:

Growing demand for battery storage and solar-plus-storage solutions offers new avenues for business expansion.

Export Potential:

Increasing global demand for solar products presents opportunities to expand into international markets. Threats

Intense Competition:

Increasing competition among domestic and international players may put pressure on prices, market share and margins.

Raw Material Volatility:

Fluctuations in the prices and availability of key raw materials and components may impact costs and profitability.

Technology Risk:

Rapid technological changes may require continuous investment to remain competitive and avoid product obsolescence.

Regulatory Changes:

Changes in government policies, duties, regulations and compliance requirements may affect business operations and project economics.

Supply Chain Disruptions:

Geopolitical developments, logistics issues and dependence on critical components may lead to supply delays and increased costs.

Margin Pressure:

Excess capacity and aggressive pricing in the solar industry may result in pressure on realisations and operating margins.

Project Execution Risks:

Delays in approvals, financing, grid connectivity and project execution may adversely affect revenues and cash flows.

Foreign Exchange Risk:

Volatility in foreign exchange rates may impact the cost of imported components and overall profitability.

8. RISKS AND CONCERNS:

Your company being engaged in the business of solar power generation and its transmission and totally depend upon the Government Policies. So, advert government policy may affect the business in negative like reduction in PPA unit rate or increase in rate of material which may cost high to the company and get low return or margin on investment. The Company has sufficient risk management policies in place that act as an effective tool in minimizing the various risks that the businesses are exposed to during the course of their day-to-day operations as well as in their strategic actions.

9. FINANCIAL PERFORMANCE:

An overview of the financial performance is given in the Directors Report. The Audit Committee constituted by the Board of Directors periodically reviews the financial performance and reporting systems.

10. INTERNAL CONTROLS AND THEIR ADEQUACY:

Your Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. It has documented procedures covering all financial, operating and management functions. These controls have been designed to provide a reasonable assurance with regard to maintaining proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliances with regulations and for ensuring reliability of financial reporting. The Company has continued its efforts to align all its processes and controls with best practices in these areas as well. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels.

The Audit committee of the Board reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the company, recommendations made for corrective action and the internal audit reports. The committee reviews with the statutory auditors and the management, key issues, significant processes and accounting policies. The company continues its efforts in strengthening internal controls to enable better management and controls over all processes.

11. HUMAN RESOURCES / INDUSTRIAL RELATIONS:

The Company believes human capital is its key strength. The Company continues to invest in employee training, safety, and welfare. Industrial relations remained cordial throughout the year.

12. CAUTIONARY STATEMENT:

Some of the statements in this Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable Laws and Regulations. Actual results might differ substantially from those expressed or implied. Important developments that could affect the Companys operations include changes in economic conditions affecting demand, supply and price movements in the domestic and overseas markets in which your Company operates, changes in the Government regulations, Tax Laws and other Statutes or other incidental factors. Market data and products information contained in this Report have been based on information accumulated from various published and unpublished reports and their accuracy, reliability and completeness cannot be assured. The Company assumes no responsibility in respect of forwardlooking statements which may be amended or modified in future.