Active Infrastructure Ltd Management Discussions

1. Macro-Economic and Industry Overview

1.1 Global Economic Landscape

The global economy in FY 2024-25 remained in a transitional phase. Inflationary pressures and geopolitical uncertainties continued to affect commodity prices and supply chains. Despite these challenges, emerging economies including India demonstrated resilience, with infrastructure investment playing a central role in driving recovery and job creation.

1.2 Indian Economic Scenario

India retained its position as one of the fastest-growing major economies, with real GDP growth estimated at 6.8% for FY 2024-25. Key economic indicators such as core sector growth, bank credit, and industrial production registered healthy expansion. Infrastructure spending remained a cornerstone of the Union Governments economic strategy, underpinned by policies aimed at boosting capital expenditure, improving logistics, and strengthening public infrastructure.

1.3 Infrastructure Sector Landscape

Infrastructure is viewed as the backbone of the Indian economy. With the goal of achieving a $5 trillion economy, the Government of India has laid out a comprehensive roadmap under the National Infrastructure Pipeline (NIP), entailing investments exceeding Rs111 lakh crore until 2025. Major areas of focus include:

• Transportation: Roads, railways, airports, metro systems, and waterways.

• Urban Development: Smart cities, housing, waste management, and water supply.

• Energy: Green energy corridors, solar and wind infrastructure.

• Digital Infrastructure: Data centers, telecom towers, and connectivity networks.

Additionally, the PM Gati Shakti National Master Plan, a digital platform for integrated infrastructure planning across 16 ministries, has begun to streamline project approvals and inter-ministerial coordination.

2. Company Overview

2.1 Nature of Business

Active Infrastructures Limited is a fast-emerging player in the infrastructure development space. The Company operates primarily as an Engineering, Procurement, and Construction (EPC) contractor, providing end-to-end services across project planning, procurement, execution, commissioning, and maintenance. Over the past decade, the Company has executed significant projects across the following verticals:

• Roads and Highways (BOT/Hybrid Annuity and EPC).

• Water Infrastructure (Pipelines, Sewerage, STPs, WTPs).

• Urban Infrastructure (Townships, Commercial Buildings, Urban Roads).

• Industrial Infrastructure (Factories, Logistics Parks, Power Plants).

2.2 Strategic Positioning:

The Company has adopted a prudent approach towards bidding for high-quality, margin-accretive projects. Its emphasis remains on:

• Building a diversified and risk-balanced order book.

• Enhancing operational efficiencies.

• Strengthening client relationships (especially with PSUs and government departments).

• Leveraging digital tools for project monitoring and cost control.

3. Business and Financial Performance

3.1 Operational Performance

FY 2024-25 was a year of cautious optimism for the Company. While inflation and supply constraints posed challenges, the Company remained focused on on-time and on-budget project delivery. Noteworthy achievements include:

• Completion of major urban road widening and smart drainage projects.

• Commissioning of rural water supply schemes under Jal Jeevan Mission.

• Upgradation and rehabilitation of national highway packages under NHAI.

• Initiation of pre-construction works for solar-enabled infrastructure projects.

The Company also invested in enhancing its on-site safety standards, training programs, and technology adoption to improve execution quality and ensure regulatory compliance.

3.2 Financial Highlights

(Rs in Lakhs)

Despite macro challenges, margins were preserved due to tight cost controls, renegotiated procurement terms, and digitized workflows that improved productivity and minimized wastage.

4. Order Book Position and Execution Strategy

As on March 31, 2025, Active Infrastructures Limited had an unexecuted order book of approximately Rs108.26 crores, spread across 4 active projects. The order book composition by sector is as follows:

Execution remains the Companys core strength. Dedicated project planning teams at site level, supported by centralized procurement, logistics coordination, and real-time monitoring systems, have led to improved delivery standards and client satisfaction.

5. Opportunities and Growth Drivers

• Policy Push : Massive capital allocation by the government for infrastructure, with focus on rural roads, multimodal logistics, and renewable energy.

• Urbanization : Rapid expansion of Tier-2 and Tier-3 cities demands robust water, transport, and housing infrastructure.

• Digital and Green Infrastructure: New avenues like EV infrastructure, solar roadways, and smart cities open up greenfield opportunities.

• Privatization & Monetization: Government initiatives like the National Monetization Pipeline (NMP) and InvIT models create demand for professional EPC players.

• Climate Resilience: Growing emphasis on flood - proofing, water conservation, and disaster-resilient infrastructure adds to project pipelines.

6. Risks and Mitigation Measures

Being in a project-based industry, the Company faces several risks :

The Company has a Risk Management Committee that regularly assesses exposure and implements corrective actions.

7. Internal Controls and Audit Systems

The Companys internal control framework covers all financial, operational, and compliance-related activities. The Internal Audit function, supported by external consultants, reports directly to the Audit Committee of the Board. Periodic audits, real-time alerts on deviations, and a centralized MIS system help mitigate operational risks and ensure timely detection of inefficiencies.

8. Human Capital and Organizational Development

As of March 31, 2025, Active Infrastructures Limited had a workforce of over 22 employees and contract staff. Recognizing that skilled manpower is critical in the infrastructure industry, the Company has focused on:

• Technical training and certification in construction safety, design codes, and site logistics;

• Incentive-linked performance management system;

• Gender and regional diversity in site offices;

• Employee welfare, insurance, and compliance with labor laws.

The Company is also investing in digital HR platforms for improved payroll, attendance, and resource tracking.

9. ESG and Sustain ability Initiatives

Sustainability is integral to the long-term success of infrastructure companies. During FY 2024-25, the Company made significant strides in integrating ESG (Environmental, Social, and Governance) values:

• Environmental: Water harvesting on project sites, low-emission machinery, and dust suppression systems.

• Social: CSR programs in healthcare and rural education, local employment, and community engagement.

• Governance: Strengthened Board oversight, internal audit reviews, and stakeholder transparency.

In the coming year, the Company plans to publish its first voluntary ESG Scorecard and align with the BRSR framework as mandated by SEBI for listed companies.

10. Future Outlook

The outlook for the infrastructure sector in India remains highly promising. Active Infrastructures Limited intends to capitalize on these opportunities by:

• Exploring PPP and HAM model projects in transport and water sectors.

• Diversifying into high-growth areas like logistics infrastructure, tunneling, and metro rail.

• Enhancing prequalification to bid for larger and more complex projects.

• Leveraging data analytics, AI, and drone tech to reduce execution risks.

• Strengthening the balance sheet through prudent financial management and selective equity participation.

The Companys medium-term strategy focuses on growth with stability, profitability with sustainability, and execution excellence with stakeholder value creation.

11. Cautionary Statement

This report contains forward-looking statements that are based on certain assumptions and expectations of future events. Actual results may differ materially from those expressed or implied due to risks and uncertainties beyond the Companys control. Readers are advised not to place undue reliance on such statements.

Place : Nagpur

Date : 23-05-2025