Zodiac Energy Ltd Management Discussions

The discussion hereunder covers Companys performance and its business outlook for the future. This outlook is based on assessment of the current business environment and Government policies. The change in future economic and other developments are likely to cause variation in this outlook.

_ ECONOMIC OUTLOOK: Global economic overview:

The Global economic growth is projected at 3.3% for both 2025 and 2026. The 2025 forecast is similar to growth trend in 2024, despite ongoing challenges from geopolitical tensions, trade disruptions, and shifting monetary policy environments. Global Headline inflation expected to be 4.2% in year 2025, down from 5.7% in the previous year, reflecting the continued effects of tighter monetary policies and declining commodity prices. The Central banks in major economies have initiated a gradual shift toward monetary easing, with initial rate cuts implemented in the last year 2024. Further reductions are anticipated in year 2025, which could enhance liquidity and support a recovery in private sector investment activity. While global manufacturing exhibited signs of moderation driven by supply chain realignments shifting demand, industrial output remained resilient. Growth was underpinned by robust activity in construction, utilities and essential services. Increased emphasis on regional trade integration and diversified supply chains is expected to bolster cross-border economic resilience. Emerging markets continue to be pivotal contributors to global growth. In the Eurozone, a modest recovery is underway, supported by improving consumer demand, stabilising industrial production and an accommodative monetary stance. According to the International Monetary Funds (IMF) :RUOG_(FRQRPLF_2XWORRN, the global economy is expected to slow down, driven by escalating trade tensions and increasing policy uncertainty. The world economy stands at a pivotal moment, as these uncertainties continue to test global resilience. Looking ahead, global GDP is projected to grow at a steady pace of 2.8% in CY 2025 and 3.0% in CY 2026. This outlook is underpinned by sustained consumer spending, targeted policy interventions and continued innovation. The global economy remains well-positioned to navigate macroeconomic uncertainties and capitalize on structural growth opportunities

Industry Overview:

GLOBAL SOLAR ENERGY SECTOR OVERVIEW

The global solar energy market is booming, driven by increasing demand for renewable energy sources and declining costs of solar panels. Heres a snapshot of the market:

Market Size and Growth

The global solar energy market size was valued at USD 121.99 billion in 2024 and is projected to reach USD 389.86 billion by 2034, growing at a CAGR of 12.32% from 2025 to 2034. The market is expected to witness significant growth due to rising environmental awareness, government incentives, and technological advancements .

Regional Analysis

Asia Pacific: Dominates the global solar energy market with over 36% market share in 2024, driven by rapid urbanization and industrialization in countries like China, India, and Japan. The regions market size is expected to reach USD 142.3 billion by 2034, growing at a CAGR of 12.47%. North America: Expected to grow at the fastest CAGR during the forecast period, driven by increasing investments in renewable energy and supportive government policies. Europe: Witnessing a surge in solar energy adoption due to ambitious renewable energy targets and favorable policies .

Segment Analysis

Photovoltaic Systems: Accounts for the largest share of the market, driven by cost-effectiveness and ease of installation. Concentrated Solar Power Systems: Expected to grow at the fastest CAGR during the forecast period, driven by its exceptional storage capacity and ability to manage electricity needs in complex weather conditions. Residential Segment: Expected to grow at the fastest CAGR, driven by increasing disposable incomes and government incentives. The global solar energy market is poised for significant growth, driven by increasing demand for renewable energy sources, technological advancements, and supportive government policies.

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_ Business Overview Zodiacs Business Overview

Zodiac Energy Ltd. is an Energy Solutions Provider with over three decades of experience across all key sectors of power generation. Our comprehensive range of services encompasses design, supply, installation, testing, commissioning (EPC), and operation and maintenance (O&M) of renewable energy generation projects. In essence, we offer end-to-end turnkey solutions, from conceptualization to the commissioning of renewable energy power plants. We have installed solar power plants for many prominent clients which ranges from Invidiuval Resident Customers to Large Corporates to Government Organizations. We have installed Solar Power Plants (Residential Rooftop, Commercial Rooftop, Ground Mounted and Floating Solar). Our projects are located pan India. We specialize in delivering end-to-end turnkey solutions, from conceptualization to commissioning of renewable energy power plants.

Our Renewable Project Portfolio

Currently, we are catering into Residential & Commercial Rooftop Solar, Ground mounted solar, Floating Solar, Solar Tree, Operation & Maintenance etc. We have recently forayed into development of solar project for selling electricity to distribution companies and corporate clients as Independent Power Producer (IPP). Below is a summary of our Project Types.

1. _ Residential Rooftop Solar Projects

As a leading solar EPC company in the residential rooftop segment, we take pride in our strong legacy of delivering high-quality installations across India. With a proven history of successfully connecting homes to clean energy through grid-tied solar systems, we offer dependable and efficient solutions that empower families to embrace sustainability and reduce their carbon footprint.

2. Commercial & Industrial Rooftop Solar Projects

Zodiac Energy Limited is a trusted name in the Commercial and Industrial (C&I) rooftop solar sector, with a strong track record of successful projects across India. Our extensive portfolio reflects our commitment to delivering sustainable and cost-effective solar solutions that help businesses lower energy expenses, enhance profitability, and contribute to a greener future.

3. Ground Mounted Solar Projects

Zodiac Energy Limited is a well-established player in the ground-mounted solar sector, with a proven history of successful projects across diverse regions of India. Our deep expertise in executing large-scale solar installations enables the efficient harnessing of solar energy, driving the transition toward a cleaner and more sustainable energy future.

4. Solar Tree

Zodiac Energy Limited has successfully commissioning 0.015 MW Solar Tree project, adding substantial value to the renewable energy landscape. This sustainable project exempliAes our unwavering dedication to pushing the frontiers of solar technology, demonstrating our commitment to innovation and environmental stewardship.

5. Floating Solar

Zodiac is embarking on the journey in this innovative Aeld. We have successfully done Aoating solar, aiming to harness the power of sunlight on water surfaces to generate renewable energy while contributing to the sustainable development of clean energy solutions. In the new era of Solar Energy Delivering a dual beneAt: generating clean, sustainable energy and utilizing otherwise unused water bodies, optimizing land use while reducing environmental impact. The Company has recently commissioned a Floating Solar Plant of at GSFC Limited near Sikka, Gujarat.

6. IPP- Independent Power Producer

The Company has successfully commenced operations as an Independent Power Producer (IPP), marking a significant milestone with the commissioning of multiple decentralized solar power sites under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) Yojana – Component C. These initiatives are designed to supply clean, renewable energy to rural distribution substations, helping reduce dependence on conventional power sources and advancing the Government of Indias goals for renewable energy and rural development.

7. Operations and Maintenance (O&M)

While doing operations of power plant, our Company looks after day-to-day workings of power plants which includes cleaning of solar panels, checking the electrical connections on daily basis and keep the plant in running conditions throughout the year. Our cutting-edge solar panel cleaning systems are revolutionizing energy generation. By utilizing advanced technology, we ensure that solar panels are kept clean and free from debris, maximizing their efAciency and output. The maintenance of solar power plants are being carried out by regularly conducting preventive maintenance to avoid breakdown and in case of rare occasion of breakdown our company responds swiftly for breakdown maintenance.

SWOT analysis of the Company

Detailed SWOT analysis for Zodiac Energy limited is as follows-

STRENGTH	Established and consistent track record of more than Three Decades as a supplier of power and energy solutions with specialization in EPC of various kind of power plants;
	Experienced management team with cumulative experience of; Conceiving, developing and operating the large industrial projects.
	Successfully executed a wide range of solar PV-based power plants, backed by a well-connected and resourceful management team within the Renewable Energy industry.
	Equipped with a highly experienced team specializing in the design, engineering, and execution of both small- and large-scale solar power projects.
	Our presence is mainly in Gujarat and nearby regions.
WEAKNESS	Solar projects require significant upfront investment, which can strain cash flow and limit scalability without external funding.
	For ground-mounted projects, securing suitable land can be time-consuming and legally complex.
	Huge market potential for solar power industry in India as solar power market in India is expected to add 500 GW by 2030.
	GoI has drawn definitive roadmap to achieve this target by implementation of suitable policies, subsidies for residential and institutional sectors, accelerated depreciation, RPO compliance, REC mechanism, compulsory targets for Government /PSUs and incentives and targets for DISCOMs to name a few.
OPPORTUNITY	GoIs support for Residential and PM KUSUM schemes in the form of capital subsidy to the extent of 30% of the capital investment upfront based on the investment in the project reflecting GoIs thrust on Solar Energy.
	Huge potential for the exports of EPC services as almost all countries are going very aggressively on solar power installation and very few countries have requisite experience.
THREAT	Currently the market has become highly competitive due to entry of large number of unorganized players, which are creating short term disturbance by offering products at unrealistic prices. However, solar and renewable energy market is expected to witness consolidation over a medium term wherein only technically and financially strong players will survive.

_ INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Internal Control system and adequacy Internal Control measures and systems are established to ensure the correctness of the transactions and safe guarding of the assets. Thus, internal control is an integral component of risk management. The Internal control checks and internal audit programmers adopted by our Company plays an important role in the risk management feedback loop, in which the information generated in the internal control process is reported back to the Board and Management. The internal control systems are modified continuously to meet the dynamic change. Further the Audit Committee of the Board of Directors reviews the internal audit reports and the adequacy and effectiveness of internal controls.

_ RISK AND CONCERNS:

Being a solar company, we face various risks and concerns that can impact their operations and financial performance. Here are some key risks to consider:

Operational Risks

- Equipment Failures: Solar panel degradation, inverter failures, and battery storage issues can disrupt energy production and lead to costly repairs.

- Supply Chain Disruptions: Disruptions to the supply chain can impact the availability of critical components, leading to project delays and increased costs.

- Maintenance and Repair: Poor maintenance routines and inadequate repair services can reduce system efficiency and lead to premature equipment failures.

Financial Risks

- Market Volatility: Fluctuations in energy prices and market demand can impact the profitability of solar investments.

- High Interest Rates: Rising interest rates can make financing more expensive, reducing demand for solar loans and increasing the risk of project delays or cancellations.

- Tariffs and Trade Policies: Changes in tariffs and trade policies can impact the cost of solar equipment and affect project economics.

Regulatory Risks

- Changes in Government Policies: Shifts in government policies, incentives, or regulations can impact the financial viability of solar projects. - Permitting and Licensing: Delays or difficulties in obtaining necessary permits and licenses can stall project development and increase costs.

Environmental Risks

- Weather Events: Extreme weather events, such as hurricanes, floods, or wildfires, can damage solar equipment and disrupt energy production. - Climate Change: Changes in climate patterns can impact solar irradiance and alter energy production profiles.

Cybersecurity Risks

__ Data and System Security: Solar companies must protect against cyber threats to prevent data breaches, system disruptions, and financial losses.

Mitigation of these Risk:

- Diversifying Investments: Spreading investments across multiple projects and technologies can reduce exposure to specific risks. - Regular Maintenance and Monitoring: Implementing proactive maintenance and monitoring can help identify potential issues before they become critical.

- Supply Chain Management: Building strong relationships with suppliers and diversifying the supply chain can reduce the risk of disruptions.

- Regulatory Engagement: Staying informed about regulatory developments and engaging with policymakers can help mitigate regulatory risks. - Cybersecurity Measures: Implementing robust cybersecurity measures can protect against data breaches and system disruptions.

Business Outlook

The solar energy sector continues to present robust growth opportunities, driven by global climate commitments, favorable government policies, and rising demand for clean and affordable power. The transition to renewable energy, the solar industry is poised to play a pivotal role in shaping a sustainable future. Our company stands at the forefront of this transformation, leveraging cutting-edge technologies and scalable solutions to meet the evolving energy needs of residential, commercial, and industrial clients. In the upcoming financial year, we anticipate strong tailwinds from declining module prices, improved supply chain stability, and increased adoption of decentralized solar systems. These factors, combined with our strategic investments in high-efficiency products and digital energy platforms, will enable us to expand our footprint across key markets. We are also exploring new opportunities in energy storage, hybrid systems, and smart grid integration to enhance the value proposition of our offerings. Strategic partnerships and participation in government-led initiatives such as PM-KUSUM and rooftop solar programs will further accelerate our growth trajectory.

Financial Performance and Review of Operations

(Amount in Lakhs)

Particulars	F.Y. 2024-25	F.Y. 2023-24
Revenue from Operations	40777.72	22,006.11
Other Income	189.07	96.62
Total Income	40966.79	22,102.73
Less: Total Expenses before Depreciation,	37074.06	20,109.88
Finance Cost and Tax
Earnings before Finance Cost Tax Depreciation, and amortization (EBITDA)	3892.73	1992.85
Less: Depreciation	268.78	78.12
Less: Finance Cost	871.05	441.02
Profit Before Tax	2752.90	1473.71
Less: Current Tax	366.14	381.00
Less: Deferred tax Liability	365.18	(1.26)
Less: Pervious year tax adjustment	24.60	(3.23)
Profit after Tax	1996.98	1097.20
Add: Total Other comprehensive income	(4.77)	5.02
Total Comprehensive Income	1992.21	1102.21

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Ratios	2024-25	2023-24	Difference	Change in %	Remarks
Debt-Equity Ratio,	1.81	0.85	0.96	110.77	Increase due to higher Borrowing during the year.
Debt Service Coverage Ratio	1.41	0.52	0.89	171.38	Improved due to higher earnings and lower debt servicing obligation.
Return on Equity Ratio	27.71	26.24	1.47	5.60	Increase driven by higher net profit during the year.
Inventory turnover ratio	10.30	11.93	(1.63)	(13.62)	Decline due to higher average Inventory.
Trade payables turnover ratio	37.75	19.11	18.64	97.51	Increase due to higher credit purchase with stable payables.
Net profit ratio	4.87	4.99	(0.12)	(2.23)	-
Return on Capital employed	13.92	22.18	(8.26)	(37.25)	Decline due to significant increase in capital employed.
Current Ratio	1.96	1.98	0.02	(1.15)	-
Trade Receivable Turnover Ratio	6.05	3.87	2.18	56.06	Improved due to higher credit sale and efficient collection.
Net Capital Turnover Ratio _	4.52	4.09	0.43	10.31	Improved sales with relatively stable working capital.

Human Capital

At Zodiac Energy Limited, we believe that our people are our greatest strength. We nurture talent by creating opportunities for growth, leadership, and innovation. By fostering individual development, we drive collective success across the organization. The key focus of our human capital strategy is diversity and inclusion, with gender balance being a priority. As of March 31, 2025, women represented 11% of our total workforce (16 women out of total 141 employees). Many of them hold Senior & Middle Level Management roles, reflecting our commitment to empowering women in the solar sector.

EMPLOYEE ENGAGEMENT

We prioritize a culture of openness, transparency, and collaboration. Leadership connect sessions, continuous feedback and engagement initiatives ensure trust and alignment across the organization.

Reward & Recognition Activity:

To celebrate and appreciate our employees dedication and contributions, we conduct quarterly Reward & Recognition (R&R) activities in the following categories: R & R for the following categories: _ Employee of the Quarter – Recognizing outstanding individual performance. _ Innovation & Initiative Award – Rewarding creative ideas and problem-solving, cost saving. _ Customer Champion Award – Appreciating those who excel in customer satisfaction. _ Rising Star Award – Honoring new employees making a strong impact. _ Values Champion Award – Acknowledging employees who embody our core values.

EMPLOYEE TRAININGS

Investing in learning and development remains a strategic priority. Training programs are designed to strengthen skills, align culture, and reinforce health, safety, and wellbeing standards. Training sessions play a pivotal role in operational excellence, enhancing productivity and ensuring compliance with quality and safety standards. Different Trainings conducted for employees are as below: Key Training Initiatives: Solar Project Training – Covering project types, land registry processes, and execution workflows.

Management Process Training (Kaizen) – Enhancing continuous improvement practices, planning, and workflow management. Technical Training – Job-specific programs to enhance engineering and execution excellence in complex projects.

CELEBRATIONS & WELLBEING

We believe that a thriving organization begins with happy and emotionally secure employees. Beyond professional growth, we nurture wellbeing by celebrating cultural events and festivals, fostering unity, and promoting a positive workplace environment. Our approach ensures that every employee feels valued, heard and celebrated. We take pride in our diversity and also celebrate it. Festivals from across cultures and regions are celebrated with enthusiasm, which help employees to connect with each other beyond work and build shared cultural appreciation

Cautionary Statement: This report contains forward-looking statements that reflect your Companys current views and future expectations in accordance with applicable laws and regulations. These statements relate to the Companys strategic objectives, business prospects, plans, projections, estimates, and anticipated financial performance. They are based on certain assumptions and expectations of future events which are inherently subject to risks and uncertainties. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors—both external and internal—that could cause actual results, performance, or achievements to differ materially from those expressed or implied in these statements. These may include, but are not limited to, changes in regulatory environment, economic developments, market conditions, interest rates, raw material prices, exchange rate fluctuations, or other factors beyond the Companys control. Your Company does not undertake any obligation to publicly update or revise any forward-looking statements in light of future events, developments, or new information, except as may be required by applicable law. Readers are advised not to place undue reliance on these statements and to exercise caution in interpreting them.

Registered office:	By order of the Board of Directors
U.G.F 4-5-6, Milestone Building,	For, ZODIAC ENERGY LIMITED
Nr. Khodiyar Restaurant, Nr.
Drive-In Cinema, Thaltej,	CIN: L51909GJ1992PLC017694
Ahmedabad – 380 054, Gujarat.