Welspun Investments & Commercials Ltd Management Discussions

For the Financial Year ended March 31, 2026

The Management Discussion and Analysis (MDA) should be read in conjunction with the Audited Financial Statements of Welspun Investments and Commercials Limited ("WICL" or the "Company"), and the notes thereto for the year ended March 31, 2026. This MDA covers the Companys financial position and operational performance for the year ended March 31, 2026. Currency for this MDA is Indian Rupees unless otherwise indicated.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements, which may be identified by their use of words like ‘plans, ‘expects, ‘will, ‘anticipates, ‘believes, ‘intends, ‘projects, ‘estimates or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments, information or events.

A. BUSINESS OVERVIEW

The Company is a Core Investment Company ("CIC") registered with the Reserve Bank of India ("RBI"). WICL focuses on the trading opportunities available in diverse sectors by leveraging the position of the Welspun group. The Company also engages in the investment segment, subject to RBI guidelines, and relies on economic developments and the performance of its investee companies — their profits, dividends and stock prices.

The Company holds equity shares mainly in its group companies, which are engaged in the business of Line Pipes, Steel, Infrastructure and Oil & Gas. The Companys revenue majorly depends on dividends declared and changes in the stock market prices of the investee companies.

B. INDUSTRY STRUCTURE AND DEVELOPMENTS

1. Global Economy

Overview

The global economy in FY 2025-26 has navigated a complex environment defined by persistent trade policy uncertainty, gradual disinflation, and moderating growth across major economies. The escalation of trade tensions, most notably sweeping tariffs imposed by the United States beginning in April 2025, materially altered the global trade architecture and dampened business sentiment worldwide. Notwithstanding partial pauses and bilateral resets, the elevated uncertainty has constrained cross-border investment and supply chain planning.

Inflation continues its gradual descent globally. According to the IMF, global headline inflation is projected to ease to approximately 4.2% in 2025 and 3.6% in 2026, as tighter monetary policies implemented over recent years continue to take effect and commodity prices moderate. Labor markets across advanced economies have broadly normalized, with unemployment stabilizing near pre-pandemic levels. However, aging demographics, slowing productivity growth, and fiscal pressures in several major economies remain structural constraints on the medium-term outlook.

Outlook

Global growth is projected to slow from 3.3% in 2024 to approximately 3.2% in 2025 and 3.1% in 2026, according to the IMFs October 2025 World Economic Outlook. Advanced economies are expected to grow at a subdued rate of around 1.5%, while emerging market and developing economies are projected to expand at just above 4%. Risks to the outlook remain tilted to the downside, driven by renewed protectionism, geopolitical tensions, financial market fragilities, and fiscal vulnerabilities. A breakdown in trade negotiations or abrupt tightening of financial conditions could meaningfully dampen global activity.

Global equity markets in FY 2025-26 have been characterized by elevated dispersion across sectors, geographies and investment styles, providing a more nuanced and selective backdrop for active management. The de-anchoring of the US trade policy trajectory has redirected capital flows toward economies with stronger domestic demand drivers, including India.

Sources: IMF World Economic Outlook, October 2025 IMF World Economic Outlook Update, July 2025 IMF Article IV Consultation with India, November 2025

2. Indian Economy

Overview

India has emerged as a standout performer in FY 2025-26, demonstrating exceptional resilience in the face of global headwinds. Real GDP grew at 7.8% in Q1 FY 2025-26 and accelerated further to 8.2% in Q2, reaching a six-quarter high. The growth has been broad-based, with the Secondary Sector (manufacturing) expanding 8.1% and the Tertiary Sector (services) growing 9.2% in Q2 FY 2025-26 on a year-on-year basis. The Primary Sector also contributed with a 3.1% growth rate during the same period.

Domestic demand has been the central driver of Indias strong performance. Private consumption, particularly in urban markets has remained robust, supported by improving employment conditions and income tax rationalisation measures introduced in the Union Budget FY 2025-26. The governments sustained push on capital expenditure (CAPEX) has further bolstered infrastructure development and investment momentum.

Inflation has moderated significantly in FY 2025-26. The Consumer Price Index (CPI)-based inflation has declined, with the WPI-based inflation turning negative at (-) 1.21% in October 2025. Food inflation has eased sharply, with the WPI Food Index recording a year-on-year decline of (-) 5.04% in October 2025. This benign inflation environment has provided room for the Reserve Bank of India ("RBI") to ease monetary conditions, supporting credit growth and domestic consumption.

Indias external sector has remained resilient. The Current Account Deficit (CAD) moderated from 2.2% of GDP in Q2 FY 2024-25 to 1.3% in Q2 FY 2025-26, supported by strong services exports and robust remittances. Gross FDI inflows grew 19.4% year-on-year to USD 51.8 billion in April–September 2025-26, reflecting Indias growing attractiveness as an investment destination.

Outlook

India is projected to remain the fastest-growing major economy globally through FY 2025-26 and beyond. The RBI has progressively revised its FY 2025-26 GDP growth forecast upward — from 6.5% to 6.8%, and subsequently to 7.3% — citing stronger-than-anticipated quarterly performance, favourable domestic conditions, and easing financial conditions. The IMFs November 2025 Article IV Consultation projects Indias real GDP growth at 6.6% for FY 2025-26 (under baseline assumptions of prolonged US tariffs), while the World Banks forecast stands at 6.5% to 7.2%, reflecting broad international confidence in Indias economic trajectory.

Key tailwinds for the Indian economy in FY 2025-26 include: GST rationalisation and personal income tax relief boosting consumption; front-loading of government capital expenditure; benign crude oil prices supporting the current account; strong corporate and financial sector balance sheets; and the swift progress of bilateral trade and investment negotiations with key partners. Looking ahead, Indias structural advantages — a young and growing workforce, expanding digital infrastructure, and a deepening domestic capital market — position it well to sustain its growth momentum in a complex global environment.

India is also projected to surpass Japan to become the fourth-largest economy globally in 2025, with nominal GDP estimated at USD 4.187 trillion by the IMF.

Sources: Press Information Bureau, Government of India (December 2025 & October 2025) IMF Article IV Consultation with India, November 2025 IMF World Economic Outlook, October 2025 RBI Monetary Policy Statements, FY 2025-26 World Bank India Development Update, FY 2025-26 National Statistics Office, GDP Advance Estimates, FY 2025-26

C. OPPORTUNITIES AND THREATS

The Companys revenues are principally derived from two sources: (i) dividends and capital appreciation on equity investments in group companies; and (ii) income from trading activities facilitated through the group ecosystem. The performance and financial health of investee companies thus directly impacts the Companys revenue stream.

The macro-economic environment in FY 2025-26 presents both opportunities and headwinds for the Company:

• Opportunities: Indias robust GDP growth, moderating inflation, benign interest rates and an accommodative monetary policy environment have enhanced the business performance of investee companies in the domestic sector. The RBIs rate easing cycle has improved corporate profitability and investment appetite. The sustained government focus on infrastructure and domestic manufacturing provides a supportive backdrop for companies in core sectors.

• Capital Market Performance: Indias equity markets have shown resilience in FY 2025-26. Strong domestic institutional investor flows, backed by healthy SIP contributions, have provided support to valuations, which can positively impact the Companys investment portfolio.

• Threats: Elevated global trade policy uncertainty, driven by US tariff escalations and retaliatory measures, could adversely impact the export-facing businesses of investee companies. Any deterioration in investee company performance, whether due to sectoral downturns, margin pressures or financial stress would directly reduce dividend income and capital appreciation available to the Company.

• Regulatory Risk: Any increase in dividend distribution or taxation at the hands of investee companies, or changes to RBIs regulatory framework governing CICs, could materially affect the Companys revenue and operational flexibility.

• FPI Volatility: Net foreign portfolio investment outflows in FY 2025-26 have introduced intermittent volatility in Indian equity markets. Sustained or accelerated outflows could weigh on valuations of the investee companies publicly listed shares.

D. RISKS AND CONCERNS

Risk is integral to any business, and the Company is no exception. The following risks are identified as material to the Companys operations:

• Dividend Fluctuation Risk: Dividends received on equity investments form the principal revenue stream of the Company. Investee companies distribute dividends based on profitability, future capital allocation strategy, and dividend distribution policy. Any adverse change in these factors can materially affect the Companys revenue.

• Capital Market Risk: The Companys investment portfolio is exposed to fluctuations in the stock market prices of investee companies. Prolonged periods of equity market weakness, particularly in the sectors where investee companies operate, could impair the carrying value of investments and reduce capital appreciation income.

• Economic Environment Risk: Both revenue streams of the Company — trading income and investment income — are sensitive to domestic and global economic conditions. Adverse developments such as trade disruptions, geopolitical events, or a sharper-than-expected slowdown in Indias GDP growth could negatively impact the Company.

• Regulatory Risk: The Company operates as a CIC under RBIs regulatory framework. Any revisions to RBIs Master Directions for CICs, or changes to SEBIs Listing Obligations and Disclosure Requirements Regulations, 2015 ("LODR Regulations"), could impose incremental compliance costs or operational restrictions.

• Concentration Risk: The Companys investment portfolio is concentrated in group companies. Any sector-specific or entity-specific adverse development within the group could disproportionately impact the Companys financial performance.

Apart from the above, liquidity risk, rising geopolitical tensions, cyber security risks, and changes in monetary policy remain risks to which the Company is exposed.

E. HUMAN RESOURCES

The Companys current activities, being primarily investment-oriented, do not require engagement of significant human resources. Requisite qualified and experienced personnel have been engaged to meet the organizational needs of the Company, including compliance, finance and governance functions. The Company will engage additional human resources commensurate with its operational growth, as and when required.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has put in place adequate internal control systems commensurate with its size and nature of operations. The adequacy of internal control systems is reviewed periodically by the Audit Committee of the Board of Directors. The emphasis on internal controls extends across functions and processes, covering the entire gamut of financial reporting, investment management, compliance and regulatory adherence.

The Company has maintained proper and sufficient accounting records as required under the Companies Act, 2013 and other applicable statutes. The Internal Auditors, the Audit Committee, and the Statutory Auditors have full and free access to all information and records as considered necessary to carry out their responsibilities. No material weaknesses in internal controls were identified during the year under review.

G. KEY FINANCIAL RATIOS

The following table sets out the key financial ratios of the Company for FY 2025-26 and FY 2024-25:

Ratio	Formula	FY 2025-26	FY 2024-25	Change (%)	Remarks
Debtors Turnover	Total Sales / Trade Receivables	NA	NA	NA	No trade receivables at end of Financial Year
Inventory Turnover	Cost of Goods Sold / Average Stock	NA	NA	NA	No inventory at end of Financial Year
Interest Coverage Ratio	PBIT / Fixed Interest Cost & Charges	NA	NA	NA	No interest expense; Company is debt-free
Current Ratio	Current Assets / Current Liabilities	109.95%	117.38%	-6%	No material change
Debt Equity Ratio	Debt / Equity	NA	NA	NA	No Debt on the books of the Company
Operating Profit Margin (%)	Net Operating Profit / Net Sales	NA	NA	NA	No sales at the end of financial year
Net Profit Margin (%)	Net Profit / Net Sales	NA	NA	NA	No sales at the end of financial year
Return on Net Worth	Net Profit / Net Worth	9.25%	12.45%	-26%	Due to increase in expenses as compared to last year

CAUTIONARY STATEMENT

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 securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and international markets, changes in the government regulations, tax laws and other statutes and incidental factors. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.