Walchandnagar Industries Ltd Management Discussions

FY 2025–26: From Transition to Transformation — The Emergence of a New Operating Rhythm

FY 2025–26 was not merely a year of recovery; it was the year in which the foundations of our transformation began to translate into measurable operational outcomes.

The financial performance for FY 2025–26 marks a decisive turnaround in the companys operating trajectory, reflecting the success of its strategic restructuring, sharper business focus, and improved execution across core sectors.

The Company reported Total Revenue of 29,626 Lakhs in FY 2025–26 as against 29,484 Lakhs in FY 2024–25, demonstrating stability in topline performance despite a conscious transition away from low-margin and non-core activities. More importantly, the quality of revenue improved significantly, driven by higher contribution from strategic businesses in Defence, Nuclear, Aerospace, and high-engineering manufacturing segments.

The most significant highlight of the year was the sharp improvement in operating profitability. EBITDA for FY 2025–26 stood at a positive 3,549 Lakhs compared to a negative EBITDA of

3,561 Lakhs in FY 2024–25 — representing a turnaround of over

7,110 Lakhs in this financial year.

This transformation was achieved through multiple structural initiatives undertaken during the year, including:

• Rationalisation of loss-making operations and tighter cost controls;

• Improved project execution and operating efficiencies;

• Better product mix with increased contribution from high-value engineered products;

• Reduction in extraordinary operational disruptions experienced in the previous year;

• Enhanced focus on sectors aligned with national priorities such as Defence indigenisation, Nuclear energy expansion, and Indias growing Space and Aerospace programs;

• Enhanced leadership oversight and stronger project management controls.

This turnaround reflects the establishment of a stronger operational rhythm, better cost discipline, and sharper project execution. The Company believes this performance marks an inflection point in its journey. Over the last two years, we undertook a fundamental strategic realignment of the Company toward sectors that are not only nationally significant but structurally positioned for long-term growth — Defence, Nuclear, and Aerospace (DNA). What began as a strategic pivot has now evolved into a clear operating philosophy, deeply embedded across our manufacturing, project execution, engineering, and leadership architecture.

Operational Turnaround: Proof of Structural Change

The most encouraging development during the year was the sequential strengthening of profitability in the company. The Company reported Profit before exceptional items and tax of

602 Lakhs in Q3 FY 2025–26 followed by 226 Lakhs in Q4 FY 2025–26 despite continued investments into capability building, organizational strengthening, and business development initiatives. This marks two consecutive quarters of positive profitability and reflects the emergence of sustainable operational discipline across the organization.

What is particularly encouraging is that this operational improvement has been achieved while simultaneously investing for future growth through technology upgradation, leadership hiring, manufacturing modernization, and strategic capability enhancement. The Company is now beginning to witness the benefits of the strategic groundwork laid over the previous years. Operational momentum is strengthening quarter after quarter, providing confidence that the business has moved beyond stabilization and entered a phase of sustainable rebuilding.

The Emergence of a Stronger Industrial Platform

One of the defining themes of FY 2025–26 has been the strengthening of our industrial and operational base.

The capital expenditure program initiated following the equity infusion has begun translating into meaningful operational capabilityenhancement.New-generationmachinery,modernization initiatives, and manufacturing upgrades are expected to significantly improve productivity, precision, throughput, and execution timelines going forward.

Importantly, the Company is no longer operating merely as a conventional engineering organization. We are progressively evolving into a strategic manufacturing platform aligned with Indias long-term industrial priorities. The operational turnaround achieved over the last two quarters provides evidence that the organization is now institutionalising its processes required to scale sustainably.

Financial Performance Overview

Summary of the revenue & profitability for FY 2025–26 as compared to previous financial year is tabulated below:

Particulars	FY 2025-26	FY 2024-25
Total Income
	29,626	29,484
EBITDA
PBT (Before Exceptional Items)	(1,399)	(9,015)
Profit / (Loss) Before Tax (PBT)	(1,468)	(8,603)
Profit / (Loss) After Tax (PAT)	(1,468)	(8,603)
Total Comprehensive Income	(1,967)	(7,963)

(All figures in Lakhs)

The financial performance for FY 2025–26 reflects substantial operational improvement compared to the previous year.

While the Company continues to report losses at the annual level, the scale of improvement in EBITDA and profitability demonstrates a meaningful reduction in operational stress and validates the effectiveness of the corrective measures undertaken over the last several quarters.

Revenue from Operations increased to 27,519 Lakhs in FY 2025–26 as compared to 25,918 Lakhs in FY 2024–25. More importantly, the Company significantly improved operational efficiency, resulting in PBT before exceptional items losses reducing sharply from 9,015 Lakhs in FY 2024–25 to 1,399 Lakhs in FY 2025–26.

Human Resources: Building a High-Performance Organization

The transformation of the Company is not only strategic and operational — it is also cultural.

Over the last year, significant emphasis has been placed on building leadership depth, accountability, execution discipline, and organizational agility. The integration of experienced external leadership with our strong legacy teams continues to strengthen institutional capability.

The leadership structure introduced over the previous year is now beginning to deliver measurable outcomes through tighter operational governance, improved execution tracking, stronger financial controls, and enhanced customer engagement.

The Company remains committed to building a culture that combines:

• Engineering excellence

• Execution discipline

• Entrepreneurial agility

• Institutional accountability

• Long-term nation-building purpose

We believe this combination will be critical in scaling sustainably over the coming decade.

Risk Management & Internal Controls

As the Company transitions into a higher-growth and strategically aligned industrial platform, disciplined risk management remains critical.

Key risks continue to include:

• Project execution timelines

• Working capital management

• Commodity and input price fluctuations

• Geopolitical uncertainties

• Supply chain disruptions

• Talent integration and organizational scaling

To address these risks, the Company continues to strengthen:

• Project governance mechanisms

• Financial monitoring systems

• Leadership accountability structures

• Cost control processes

• Customer diversification

• Strategic planning frameworks

The emergence of positive operational momentum over consecutive quarters demonstrates the effectiveness of these measures and provides confidence regarding future scalability.

The Road Ahead: From Recovery to Growth

The last two years were about rebuilding the foundation. The coming years will be about scaling the opportunity.

India is entering a decade that will demand indigenous industrial capability across strategic sectors. Defence modernization, nuclear expansion, aerospace growth, and manufacturing localization are no longer temporary themes — they are long-term national priorities.

We believe the Company is now structurally aligned with these opportunities.

The operational turnaround achieved during FY 2025–26 is not the destination; it is the beginning of a new phase. The consistency of positive PBT across consecutive quarters demonstrates that the business is moving from volatility toward stability, from restructuring toward execution, and from recovery toward growth. Our DNA — Defence, Nuclear & Aerospace — is now firmly established as the foundation of our future.

Cautionary Statement

The statements in the Management Discussion and Analysis Report describe the Companys objectives, projections, expectations, estimates or forecasts which may be forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various risks and uncertainties. Important factors that could influence the Companys operations include global and domestic demand-supply conditions, input costs, and changes in Government regulations, tax laws, economic developments, geopolitical conditions, project execution challenges, industrial relations, and other factors beyond the control of the Company.

Name of Director	Category / Designa- tion	No. of Board Meetings held	Attendance (01.04.25 to 31.03.26)		No. of Director- ships in other Public Ltd Cos #	Chairmanship / Membership of Committees in other Public Ltd Cos. $$		No. of Shares held by Directors		Remuneration paid / payable to Directors ( in Lakhs)
			Board Meetings	Last AGM		Chairman- ship	Member- ship		Sitting Fees	Salaries & Perqui- sites	Comm- ission	Total
Mr. Chakor L.	C \u2013 NED	6	6	Yes	1	0	0	60,800	8.00	-	-	8.00
Doshi
Dr. Prabhat	I \u2013 NED	6	6	Yes	0	0	0	0	5.00	-	-	5.00
Kumar
Mrs. Rupal	I - NED	6	6	Yes	8	3	4	0	8.00	-	-	8.00
Vora
Mr. Jayesh	I-NED	6	6	Yes	2	0	0	0	6.00	-	-	6.00
Dadia
Mr. Chirag C.	MD &	6	6	Yes	1	0	2	17,290	-	127.56	-	127.56
Doshi	CEO
Mr. G. S.	WTD	6	6	Yes	0	0	0	24,500	-	58.26	-	58.26
Agrawal