Ahluwalia Contracts (India) Ltd Management Discussions

GLOBAL ECONOMY

World GDP grew by 2.7% in calendar year 2024, with regional growth varying significantly. The United States saw robust growth at 2.8%, while the Eurozone experienced more subdued growth at 0.8%. Growth in emerging markets was driven by India and China, which recorded growth rates of 6.5% and 5%, respectively. For the most part, the year was marked by improving financial conditions, declining inflation and a partial de-escalation of regional conflicts.

In the United States, the balance of risks has shifted from inflation to growth, as the effects of increased tariff measures would begin to impact the economy. In addition, changes in the regulatory environment, immigration policies and fiscal policy are expected to influence the dynamics between growth and inflation. The upside risk to inflation from tariffs, coupled with the downside risks to growth, could create a challenging environment for monetary policy.

Technology is expected to remain a bright spot for the US economy in 2025, with spending projected to surpass USD 2 trillion for the first time.

The economies of Europe and UK continue to remain fragile. However, the commitment by Germany to permit fiscal loosening through a special EUR 500 billion off-budget infrastructure fund, to be disbursed over a decade, could alter the medium-term growth dynamics for Europe.

China would be the most directly impacted economy if the tariffs imposed by the United States take effect. To stabilise the economy, the government may employ a combination of monetary easing and fiscal support measures aimed at boosting domestic consumption and addressing weaknesses in the property sector.

The Gulf Cooperation Council (GCC), led by Saudi Arabia, is likely to continue strengthening both the physical and digital infrastructure of the region, in addition to monetising its oil & gas assets. As GCC countries embark on the transition from oil to clean energy and pursue various industrialisation initiatives, the regions growth opportunities remain healthy.

With global cross-border trade and investment flows slowing there is a growing risk of rising cost pressures, reduced productivity and slower efficiency gains. However, with trade in services not being directly affected by tariff related disruptions, the global IT outsourcing market is expected to remain relatively resilient. Indias technology sector is

expected to grow by around 5% in FY 2025-26, with revenues projected to exceed USD 300 billion.

India remains relatively insulated from global headwinds and is on track to become the worlds third-largest economy in the medium-term. It continues to be one of the fastest growing large economies, supported by favourable demographics, investment led impetus, and ongoing regulatory reforms.

INDIAN ECONOMY

Despite the prevailing global uncertainties, the Indian economy is estimated to grow between 6.25-6.50% during the current year 2024-25. The agriculture sector is expected to grow of 4%, the industrial sector of 6% and the services sector of 7%. In absolute terms, the agriculture sector continued to operate well above pre-pandemic trend levels.

Whereas, in the industrial sector, sustained growth through FY 2023-24 and FY 2024-25, has led to the closure of the trend gap. The recovery within the services sector has been uneven, and as a result, the sector is only now approaching its longterm trend levels.

Indias headline inflation, as measured by the Consumer Price Index (CPI), has eased considerably during the year.

The monthly average CPI print was 4.63% in FY 2024-25 vs. 5.35% in FY 2023-24. This decline was primarily led by a decrease in core services and fuel price inflation. Food price inflation continued to hold firm impacted by weather related supply disruptions. For FY 2025-26, the Reserve Bank of India (RBI) has forecast CPI inflation at 4%, based on the expectation of a normal monsoon.

Policy rates remained unchanged through the April- December 2024 period with the repo rate at 6.50%.

However, with relatively weaker growth prints and falling underlying inflation, the Monetary Policy Committee (MPC) changed its policy stance from Withdrawal of Accommodation to Neutral in October 2024. Further, to inject liquidity into the banking system a reduction in CRR to 4.00% of NDTL from 4.50% was announced in December 2024. In February 2025, the RBI lowered the repo rate to 6.25% in response to downward revisions in growth forecasts for H1 FY 2025-26, while keeping the inflation trajectory aligned with its target.

The Indian economy is expected to remain resilient, supported by robust consumption from households, alongside the

governments continued focus on capital expenditure. Capacity utilisation in manufacturing remains high and balance sheets of banks and corporates remain healthy. The economy has also undergone rapid digitalisation over the past decade, significantly boosting productivity. The service sector has increasingly shifted towards high-tech digital solutions, including e-commerce, fintech, cloud computing and AI-driven services.

The risks to growth remain largely external - rising tariff barriers, stretched supply chains and continuing geopolitical tensions. The country will have to adapt to the evolving global landscape and harness its domestic strengths to drive growth in a sustainable manner.

BUSINESS ENVIRONMENT

Experience in driving business success in markets around the world, with an understanding of diverse business environments, economic conditions, cultures, and regulatory frameworks, and a broad perspective on global market opportunities.

The Indian real estate markets continue to be resilient with residential sales in the top six cities - which command ~80% market share - showing a solid 14% y-o-y growth in 2024, despite high interest rates and increasing property prices.

Premium segment demand, across the top six cities, surged 27% while prices rose 12%.

The Indian office sector witnessed its highest ever leasing activity in 2024, with gross absorption touching ~79 million sq.ft., registering a 16% y-o-y growth. Indias position as the leading hub for Global Capability Centres (GCC) has continued to super demand, while institutional capital from family offices and ultra-high-net-worth individuals (UHNIs) continues to accelerate acquisitions in the commercial real estate segment.

INFRASTRUCTURE

The Heavy Civil Infrastructure business is an EPC market leader in the core civil infrastructure segments that are crucial to the countrys sustainable economic growth and development. The business segments include:

a) Up-gradation of Indian Railway Stations - Mumbai, Chandigarh

b) Hospitals (AIIMS)

c) Residential Complexs

d) Institutional Buildings

e) University/ College - Infrastructure

The business has a robust domestic presence and undertakes large-scale, complex projects, offering turnkey solutions tailored to meet customers requirements.

Infrastructure is the set of facilities and systems that serve a country, city, or other area and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and private physical structures such as roads, railways, bridges, airports, public transit systems, tunnels, water supply, sewers, electrical grids, and telecommunications (including Internet connectivity and broadband access).

In general, infrastructure has been defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions" and maintain the surrounding environment.

Especially in light of the massive societal transformations needed to mitigate and adapt to climate change, contemporary infrastructure conversations frequently focus on sustainable development and green infrastructure.

Acknowledging this importance, the international community has created policy focused on sustainable infrastructure through the Sustainable Development Goals, especially Sustainable Development Goal 9 ?Industry, Innovation and Infrastructure".

One way to describe different types of infrastructure is to classify them as two distinct kinds: hard infrastructure and soft infrastructure. Hard infrastructure is the physical networks necessary for the functioning of a modern industrial society or industry.

This includes roads, bridges, and railways. Soft infrastructure is all the institutions that maintain the economic, health, social, environmental, and cultural standards of a country. This includes educational programs, official statistics, parks and recreational facilities, law enforcement agencies, and emergency services.

WATER

The Water & Effluent Treatment business delivers end- toend water management solutions for both government and private sector clients. The business expertise covers the entire water life-cycle, including potable water treatment, storage and conveyance, wastewater management, industrial

water solutions, irrigation, desalination and smart water infrastructure. Through its in-house Water Technology Centre, the business continuously integrates cutting-edge technological advancements and world-class processes to enhance efficiency and innovation in water management.

BUSINESS MODEL AND STRATEGY

Government policies are set to reshape Indias water management landscape, with initiatives from both the central and state governments playing a crucial role in driving demand across potable water, wastewater treatment and irrigation segments. The union budget underscores a strong commitment to Indias water future through measures such as extending the Jal Jeevan Mission until 2028, targeting investments to bolster irrigation by launching river interlinking programmes, large-scale irrigation projects, and accelerated upgrades in urban water systems under AMRUT 2.0.

The business faces industry-specific challenges, including intense competition from established players and new entrants, workforce shortages and cost escalations. To address these challenges, the business capitalises on the

in-house Water Technology Centre to provide for low-cost innovative solutions that are sustainable and future-ready.

The Middle East saw robust growth driven by extensive investments in desalination projects and the adoption of smart water technologies, as governments and private entities focus on addressing water scarcity and enhancing water security. Strategic partnerships and large-scale initiatives emerged to modernise infrastructure and improve the efficiency of water distribution systems amidst heightened environmental challenges.

INTRODUCTION

Ahluwalia Contracts (India) Ltd (ACIL or Company) is engaged in the Engineering and Construction of deal with Prestigious Projects. ACIL develops and executes Civil Engineering, high-rise building Projects that Building Projects, Design Build and also BOT Project, Special Central Vista Buildings, Hospitals, Hostel, University and Institutional Projects. ACILs Projects are hallmarks of quality, excellence, and precision; the Company has delivered numerous engineering marvels within each of its respective segments.

FINANCIAL PERFORMANCE

		(Amount in Lakhs)
Particulars	FY 2024-25	FY 2023-24
Gross Order Book	21,97,060	17,01,024
Income from Operations	4,09,862.31	3,85,529.77
EBITDA	34,179.91	38,854.81
PAT	20,151.08	37,554.60
Earnings Per Share (in )	30.08	56.06

KEY FINANCIAL RATIOS AND THEIR DEVELOPMENT

Details	FY 2024- 25	FY 2023- 24	Change in %
Debtors Turnover	5.35	5.70	-6.11%
Inventory Turnover	12.51	13.77	-9.13%
Debt. Service Coverage Ratio	19.28	29.47	-34.57
Current Ratio	2.12	2.17	-2.09%
Debt Equity Ratio	0.01	0.03	-73.30%
Operating Profit (EBITDA) Margin (%)	8.34	10.08	-0.74%
Net Profit Margin (%)	4.92	9.74	-49.53%
Return on Net Worth (%)	11.85	26.52	-55.34%

WORKMEN SAFETY

Ahluwalia Contracts (India) Ltd - ACIL is committed to prevent ill Health & Injury to its Employees, Contractors and Visitors and

Environmental Pollution associated with all its activities and services through:

• Establishing, implementing and maintaining Environmental and Occupational Health & Safety Management Systems in compliance with International Standards.

• Continually improving the Health, Safety & Environmental performance by setting and reviewing relevant objectives and targets.

• Complying with applicable EHS legal and other requirements.

• Dissemination of this EHS Policy through effective communication and training to personnel working for and on behalf on of ACIL and be made available to other interested parties, as required.

LIST OF ACIL AWARDS

Certificate Name	Project / Site Name	Category
1 Construction Industry Development Council (Vishwakarma Award 2024)	AIIMS, Jammu	Best Construction Projects -Trophy + Certificate
2 Indian Chamber of Commerce	Max, Mohali	6th ICC National Occupational Health & Safety Awards 2024 - Platinum Award - Trophy + Certificate
3 The Institution of Engineers (India) - Safety & Quality Forum	ACIL HSE Team, Delhi	Safety Innovation Award 2024 - Trophy + Certificate
4 Civil Engineering & Construction Review (CE&CR)	AIIMS, Jammu	Sustainable & Green construction technology - Certificate
5 Civil Engineering & Construction Review (CE&CR)	ACIL HSE Team, Delhi	Safe practices in construction space - Trophy + Certificate
6 Civil Engineering & Construction Review (CE&CR)	Construction Of 2400 Seater Indoor Auditorium At Alipur, Kolkata	Architectural Aesthetics in infrastructure Project -Trophy + Certificate
7 CPWD - 170th Annual day Awards celebration	AIIMS, Jammu	Best E&M Services Completed - Trophy + Certificate
8 Construction Industry Development Council (Vishwakarma Award 2023)	Construction Of 2400 Seater Indoor Auditorium At Alipur, Kolkata	Best Construction Projects - Trophy + Certificate
9 Construction Industry Development Council (Vishwakarma Award 2023)	Construction Of Corporate Office Building Of NICL, Kolkata	Best Construction Projects- Medal + Certificate
10 Construction Industry Development Council (Vishwakarma Award 2023)	Construction Of Hospital & Academic Campus at All India Institute of Medical Sciences, Kolkata	Best Construction Projects - Certificate
11 Construction Industry Development Council (Vishwakarma Award 2023)	RBI Data Centre Complex & RBI Enterprise Computing & Cyber Security Training Institute, Bhubaneswar	Best Construction Health, Safety & Environment (Trophy + Certificate)

 

Certificate Name	Project / Site Name	Category
12 Construction Industry Development Council (Vishwakarma Award 2023)	Z-1 Ananta, Phase-lll Project, Bhubaneswar	Best Construction Health, Safety & Environment - Trophy + Certificate
13 GRIHA Exemplary Performance Award	Pt Jawaharlal Nehru Govt. Medical college, Chamba, HP	Site Management (during Construction) Trophy & Certificate
14 Fortune Awards	Ahluwalia Contracts India Limited	The Next 500 fortune Companies 2023
15 IBC Awards	Central Vista, Delhi	Office Building - Trophy + Certificate
16 IBC Awards	Auditorium, Kolkata	Infrastructure Project, Trophy & Certificate
17 IBC Awards	Cultural Centre , Bodhgaya Bihar	Recreational Scheme, Trophy & Certificate
18 Construction Industry Development Council (Vishwakarma Award 2024)	AIIMS, Jammu	Best Construction Projects
19 ISDA Infracon National Awards (IINA) 2025	Milan Mela, Kolkata	Best Construction Projects - Gold
20 ISDA Infracon National Awards (IINA) 2025	Chandigarh Railway Station	Best HSE Awards - Gold
21 ISDA Infracon National Awards (IINA) 2025	EMMAR, Gurgaon	Best HSE Awards - Platinum

INFORMATION TECHNOLOGY SERVICES & IT SECURITY RISK

ACIL is ISO 27001:2022 Compliant Company and having effective Information Security Management System (ISMS) for IT operations management.

Information Technology Services (ITS) has continued to play a pivotal role in supporting the organizations strategic goals by enhancing digital infrastructure, improving operational efficiency, and enabling innovation. We have initiated the implementation of ERP system "RISE with SAP", which will help the company to operate more efficiently, innovatively and intelligently. SAP solution is hosted on private cloud for better scalability, availability and enhanced security.

In response to an increasingly complex threat landscape, the company has continued to prioritize cybersecurity and IT risk management. Central to this effort is the deployment of a robust 3-Tier Security Architecture, which provides layered protection across the platforms infrastructure, application, and data environments. This strategic approach allows the company to detect, prevent, and respond to threats in a systematic and efficient manner.

The 3-Tier Security Architecture includes:

• Perimeter & Network Security (Tier 1): Includes firewalls, intrusion detection/prevention systems (IDS/IPS), and VPN technologies to secure external boundaries and control access.

• Application Security (Tier 2): Covers secure coding practices, vulnerability scanning, and security testing integrated into the software development lifecycle (SDLC).

• Data Security & Endpoint Protection (Tier 3):

Encompasses encryption, endpoint detection and response (EDR), data loss prevention (DLP) using M-cloud solution, and strict access controls to protect sensitive information.

Complementary measures such as regular security audits, penetration testing, multifactor authentication (MFA), and continuous employee awareness training reinforce this architecture. The IT team actively monitors emerging risks and regulatory developments, ensuring compliance with applicable standards and frameworks, and continuously updates controls based on threat intelligence and risk assessments.

Information Technology (IT) team has been instrumental in driving the companys operational agility, customer engagement, and digital transformation goals. With an emphasis on performance, scalability, and resilience, the team enhanced core systems and infrastructure to meet the evolving needs of the business.

Key initiatives included:

• Optimization of cloud services to support scalability and hybrid work

• Enhancement of enterprise applications for improved process efficiency

• Implementation of automated service monitoring and response systems

• Strengthening of IT service management (ITSM) practices

These efforts have contributed to improved system availability, faster resolution times, and greater alignment between IT and business objectives.

ENHANCING WORKMEN EFFICIENCY

Our Employees/ people are our most valuable asset, and their wellbeing is central to everything we do. Our commitment to attracting, developing, and retaining top talent represents a foundational investment in the long-term viability and prosperity of our organisation, underscoring the indispensable role of our people as the primary drivers of value creation and sustained success.

We are dedicated to creating a performance-driven culture that prioritises employee engagement and empowerment, enabling them to reach their full potential.

We believe this approach is essential for achieving sustainable and inclusive growth, both for our people and our organisation.

HR GOALS

Human Resources Goals and Initiatives

At Ahluwalia, we firmly believe that our employees are our most valuable assets. Our unwavering commitment is to attract, develop, and retain top talent while positioning ourselves among the most respected employers in the construction industry. To achieve this, we foster a collaborative, transparent, and participative organizational culture that rewards merit and recognizes sustained high performance.

Our human resource strategy is centered on providing growth opportunities, enabling skill development, and facilitating career advancement. We are deeply invested in creating an open, inclusive, and safe work environment where all employees—regardless of gender, sexual orientation, or any other distinguishing characteristic—feel empowered to contribute meaningfully and thrive.

As part of our inclusive work culture, we uphold an "open door" policy that encourages employees to voice concerns freely. To facilitate this, we have established Resolution Hubs, comprising the Hearing Employees and Resolving (HEAR) forum for addressing workplace grievances, and the Anti-Sexual Harassment Initiative (ASHI) for handling sexual harassment complaints. These forums serve as robust grievance redressal mechanisms and are guided by the principles of natural justice, ensuring strict confidentiality, non-retaliation, and a fair, time-bound resolution process.

Each concern raised is addressed with empathy and diligence, and a thorough investigation is conducted to ensure transparency, fairness, and the opportunity for all involved parties to present relevant facts and evidence.

Further reinforcing our commitment to workplace safety and equality, the Company has formed Internal Committees (ICs) at all development centres across India. These committees address sexual harassment complaints in accordance with the provisions outlined in the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Each IC includes external members from non-governmental organizations or professionals with relevant experience, ensuring unbiased and informed resolution.

CULTURE OF INCLUSION

Our employees are our greatest asset. We are committed to creating a supportive and inclusive workplace where everyone can thrive. Investing in our people through training, development, and wellbeing initiatives has helped us attract, develop and retain top talent.

• Create a positive work environment that fosters loyalty and reduces attrition

• Encourage diversity, equity, and inclusion to ensure all employees feel valued and respected

• Provide training and development opportunities to help employees enhance their skills and advance their careers

• Implement policies and practices that prioritise the health and safety of employees

Establish programmes to recognise and reward employee achievements and contributions Annual CEO review to discuss the Companys performance and strategic priorities for the coming year

ACIL_Pulse: Consistent employee engagement surveys

Regular team meetings, town halls, and one-on-one sessions to build trust and transparency

Workshops, e-learning modules, and leadership programmes to enhance skills and capabilities

Health camps, mental health support, and recreational activities to promote holistic wellbeing

• Awards, incentives, and public acknowledgment of outstanding contributions

• Regular performance review and feedback sessions

• Robust whistle-blowing policy empowering employees to speak up

ACIL is anti-discrimination and its employment policies and practices focus on ensuring that all employment processes are free from unlawful discrimination. Engagement studies have shown that ACIL is a safe place to work for women. This confidence has boosted the Companys employment and retention of women. As on March 31,2025, the Company had a total of 3325 Staff on its rolls of which 57 were women.