WPIL Ltd Management Discussions

As required by Schedule V(B) under Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management discussion and analysis report for the year under review is appended below:

The company is engaged in the business of fluid handling - from supply of pumps to turnkey project execution. It supplies a comprehensive range of pumps to the Industrial, municipal and irrigation sector. The company also has a strong project division which undertakes water management contracts in the above sectors.

The Global economic landscape in FY 2025-26 was marked by persistent challenges tempered by cautious optimism. The Middle East war and geopolitical tensions in other geographies continues to impact the global economy. Econnomies continue to grapple with trade uncertainties, elevated inflation and geopolitical tensions that have reshaped international commerce. The conflicts have resulted in sharp increase in energy prices, inflation and supply chain disruption globally, the impact of which were significant in India as well. Slowly but steadily, these conflicts are also affecting global trade as globalization initiatives are giving way to bilateral/multilateral trade bloc. Amidst these global headwinds our international business shows character with major improvement in revenue.

Against this backdrop, India has emerged as a beacon of stability and growth. Indian economy demonstrated remarkable resilience, maintaining a robust growth trajectory of 7.6% in FY 2025-26 significantly outpacing global averages. The performance reflects Indias strong domestic demand, strategic infrastructure investment and governments commitment to economic reform. Both public and private capital investment in the core sector is expected to drive consistent all-round economic growth.

The company domestic revenues for 2025-26 were at 801cr versus 1178cr in 2024-25 while profit after tax was at 116.9cr versus 143.8cr in 2024-25. The strong performance of the product division was offset by subdued revenues at the project division due to sector constraints. However, overall operating margins of the domestic business were improved.

The product division revenues for 2025-26 grew to 374cr versus 323cr in 2024-25 and with a record order book there is a strong growth outlook for the medium term.

The Assembled to order segment where pumps are manufactured to suit installations and typically serve municipal and industrial sectors. This segment revenues were stable at 190cr however, the outlook is robust with growing enquiries from the water and wastewater sector.

The Engineered to order segment where pumps are designed and manufactured for special applications and serves large fow requirements in the irrigation and power sectors. This segment revenues increased to 184cr versus 133cr in 2024-25. The orderbook and enquiry pipeline is majorly focused in this segment with power and river linking being the main drivers.

The division is planning necessary brownfield expansions to support its growing orderbook.

The project division revenues were majorly affected at 391cr versus 823cr in 2024-25 due to sector constraints. The division continues to focus on project execution and commissioning and this reflects in a number of projects commissioned in the year and more expected in 1st half of FY2027. The O&M activities have started picking up as projects are commissioned and is expected to gather momentum in FY2027.

The domestic project division outlook is improving with the approval of Jal Jeevan Mission 2 with enhanced outlay which should lead to release of central funds and announcement of new tender opportunities. The division is confident of an improved performance in the latter half of FY2027 with the improving scenario. Also, the division will be cautiously reviewing new tender opportunities to strengthen its order book.

The International project division established in FY2025 with the South African subsidiaries Eigenbau and PCI along with MISA in Italy had a strong year with growing revenues and securing large contracts at PCI. This provides a robust outlook for this Division in the medium term and will be a focus area for the company.

Ths performance of Gruppo Aturia remained stable and the outlook is positive based on the developments in the middle east which have created new opportunities.

MISA successfully completed its legacy contracts and has a good tender pipeline with improving prospects.

WPIL South African business is fast growing to a major contributor to the International business with revenues improving to 482cr versus 177cr in FY25 supported by the new acquisitions.

The pumps business of APE Pumps and M&P SA had an excellent year with growing demand in both the water supply and power sector.

The project business of Eigenbau and PCI SA had strong years and the new large contracts received in the year provides strong growth visibility over the medium term. The penetration of PCI SA into the growing South African wastewater sector using specialized technologies augurs well for the future.

Sterling Pumps had a stable year supported by the water and mining sectors while United Pumps successfully executed its old contracts and is now strongly placed in the Australian oil &gas and LNG markets.

WPIL Thailand had a record year crossing 1 billion baht revenue and strengthening its position in the Thai irrigation and drainage markets.

Clyde Pumps India also had a great year with improving revenues and margins supported by exports to the MENA region. A strong order book provides a positive outlook.

The business environment appears challenging with a rise in geo political tensions and conflicts which negatively impact global trade. Furthermore, the move away from globalisation leading to a tariff based global economy will dent the flow in global trade further and lead to inflationary spikes and recessionary pressures. Global GDP growth assumptions have already been tempered down.

However, water scarcity and a growing population represent a big challenge for present water infrastructure and hence the demand is expected to keep growing. Similarly, to address the UN standard of living health goals sewage and drainage infrastructure needs to be greatly enhanced.

Your company has been focussed on developing solutions in fluid handling by enhancing its range of products and services. Simultaneously, enhancing its global reach to diversify its business model. We should be well placed to take advantage of these opportunities.

The Company is actively focussing on further enhancing its global reach and looking at establishing operations in newer geographies and creating new growth drivers.

The Company being one of the leaders in the pump industry foresees good growth in both domestic and international operations with improved outlook across businesses. All divisions are well equipped to deal with their growing order book and provide good quality and delivery of products to continue to enhance market share. The Company feels it has achieved a good balance between domestic and international businesses on one hand and Products and Projects on the other hand to become a supplier of choice in the fluid handling business.

The Current geo-political situation all over the world is very disturbing. The on-going geo-political developments have impacted the sentiments of all the economies worldwide. The ongoing war between US and Iran has impacted adversely on the development of global economies. This makes it imperative for the Company to prepare for volatility in its global markets and the strategy remains to build core competencies across products and services in its focus areas and continue to diversify across geographies in the flow solutions sector. The Company is actively leveraging technology and penetrating new market segments to maintain its growth, market leadership and continued success.

Due to rapid urbanization and emerging recognition of the importance of water and due to scarcity its availability creates a big opportunity for your company to cater to end to end water solution in India and globally to provide improved living standards as per United nations guidelines.

The biggest concern remains geo political risks especially with the breakdown of global trade and the impact of rising energy costs on global economies. This would have a negative effect on investment in public infrastructure.

The Company continues to have adequate system of internal control commensurate with size and nature of its business, which ensures that transactions are recorded, authorized and reported correctly apart from safeguarding its assets against loss from wastage, unauthorized use and removal. The internal control system is supplemented by documented policies, guidelines and procedures. The Internal Audit of the Company conducted by external professional audit firm continuously monitor the effectiveness of the internal control with a view to provide audit committee and the Board of Directors an independent, objective and reasonable assurance of the adequacy of the organizations internal controls and risk management procedures.

Internal Audit of all operational units was carried out during the year under report as per the scope approved by the Audit Committee of Directors. The internal audit teams regularly brief the management and the Audit Committee on their findings and also recommend the steps to be taken with regard to deviations, if any. Internal Audit Reports are regularly submitted for perusal of Senior Management to initiate appropriate action as required.

The People process is at the heart of Companys successful story. The Company lays significant importance for all round developments of its Human Resources with special emphasis to train the employees at all levels to enhance their effectiveness in their contribution to the overall performance of the Company through skill up-gradation, knowledge improvement and attitudinal change. These enable the employees at all levels to cope with the competitive environment through which the Company is passing at present and to achieve the desired corporate objective.

The industrial relations climate in the Company continued to remain harmonious and cordial. The Company has a vibrant atmosphere and able to face challenges of economic downturn with fortitude. Various welfare measures and recreational activities are also being continued side-by side of production to maintain such relations.

The Company had 702 employees on the roll (excluding manpower on contractual basis) at the end of the year under review as against 687 (excluding manpower on contractual basis) of previous year.

During the financial year under review, significant changes in some key financial ratios were noticed, which include Current Ratio, Debt Service Coverage Ratio, Return on Equity Ratio, Inventory turnover Ratio, Trade Receivable & trade Payable turnover Ratio, Capital turnover Ratio and Return of Capital employed as against last year. The reasons underlying such changes have been provided respectively in Note 57 (v) to the financial statement. The information is intended pursuant to the requirements of The Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended time to time.