Ahmedabad Steelcraft Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW AND OUTLOOK

The global economy grew by 3.3% in 2024, demonstrating resilience amid escalating geopolitical instability, rising trade barriers and continued supply chain recon_guration. Growth was supported by stable domestic demand in major economies, easing energy and commodity prices and a gradual recovery in investments. Infiation moderated to 5.7% in 2024, down from 6.8% in 2023, as commodity prices declined and the effects of sustained monetary tightening took hold. Central banks in several economies began reducing policy rates toward the end of 2024 in response to improving inflation dynamics.

The International Monetary Fund (IMF) projects global inflation to ease further to 4.3% in 2025 and 3.6% in 2026, thereby improving financing conditions for businesses and governments. Looking ahead, global GDP is projected to grow by 2.8% in 2025 and 3.1% in 2026, according to the IMFs latest forecasts. This outlook reflects ongoing geopolitical risks, policy uncertainty in large economies and structural shifts in global trade. While advanced economies are expected to grow by 1.4% in 2025, emerging and developing economies will remain the key drivers of global growth.

The U.S. economy is approaching a soft landing, with growth rate projected to reach 2.7% in 2025 and 2.1% in 2026. The UK economy is projected to grow by 1.6% in 2025 and 1.5% in 2026. Growth in the Euro area is expected to improve to about 1% in 2025 and 1.4% in 2026.Chinas growth is projected to decline to 4.6% in 2025 and 4.5% in 2026, reflecting weak consumer confidence, a sluggish labour market and persistent challenges in the real estate sector

The global economic outlook is cautiously optimistic, with easing inflation, falling interest rates. and steady growth in key emerging markets, sustaining growth in the coming years.

INDIAN ECONOMIC OVERVIEW AND OUTLOOK

India continues to stand out as the fastest-growing economy among the G20 nations with 6.5% GDP growth in FY25. This growth is supported by strong domestic demand, rural consumption, higher capital investments and an increasing share of exports. Indias nominal GDP is estimated at USD 4.19 trillion in 2025, making it the worlds fourth-largest economy.

Retail inflation has softened in line with global trends, with the Consumer Price Index (CPI) falling to 3.3% in March 2025, well below the RBIs medium-term target of 4%. This has allowed the RBI to cut the repo rate by 100 basis points to 5.5% in June 2025, supporting lending and investment activity.

The Union Budget 2025 allocated 11.21 lakh Crore to capital expenditure, focussing on transport infrastructure, urban development, renewable energy, affordable housing, defence and social infrastructure. CRISIL estimates that total infrastructure investment will reach

143 lakh Crore during fiscals 2024-2030, including roads, railways, airports, urban transport, energy and digital infrastructure. Both central and state governments are funding these projects, with an active involvement of the private sector.

India is expected to cross the USD 5 trillion GDP mark soon. CRISIL projects average annual growth of 6.7% between 2025 and 2031, making India the worlds third-largest economy by 2031. Achieving this will require continued investment in infrastructure, reforms to improve business conditions and the development of skills and human capital.

Despite global trade tensions and geopolitical risks, Indias core economic fundamentals are strong. Its growing domestic market and reform efforts provide a strong base for steady and sustainable growth. India displays a positive economic outlook supported by steady growth, controlled inflation, strong investment and effective policies.

Overview

The transmission system plays a critical role in ensuring the efficient delivery of power to consumers by serving as a crucial link between generating stations and the distribution network. In India, energy resources such as coal, hydro, and renewables are distributed unevenly across the country. Coal reserves are predominantly found in the Central and Eastern regions, while hydro energy resources are concentrated in the Himalayan regions of the North and Northeast. Renewable energy sources, like wind and solar, are primarily located in states such as Tamil Nadu, Andhra Pradesh, Karnataka, Rajasthan, Maharashtra, Gujarat, and Ladakh. The major demand centres are situated in the central part of the country, spanning the Northern, Western, and Southern regions. This uneven distribution of resources has necessitated the development of a robust transmission system, including the creation of inter-regional corridors, to facilitate the seamless transfer of power from areas with surplus energy to those with deficits.

Indias power transmission sector is undergoing significant expansion to accommodate rising electricity demand, renewable energy integration and cross-border interconnections. India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 472 GW as of 31^st March, 2025. Indias power sector presents an investment opportunity of 42 Trillion over the next decade, which is essential for upgrading aging infrastructure, meeting the rising energy demand and achieving the countrys ambitious target of 500 GW of renewable capacity by 2030.

The Government of India has prioritised grid modernisation and inter-regional transmission capacity expansion, targeting 1,42,940 MW by 2026-27. Renewable energy integration remains a focus, with transmission planning for 613 GW of renewable capacity by 2032. The inter-regional transmission capacity is set to expand from the current 119 GW to 143 GW by 2027 and further to 168 GW by 2032.

Power demand in India is expected to grow at a CAGR of over 7%, driven by emerging factors such as electric vehicles, data centres and increased industrial electrification. The expansion of transmission and distribution networks, along with renewable energy generation, will be crucial in ensuring a resilient and efficient power infrastructure for the future.

The National Electricity Plan (Transmission), developed by CEA in consultation with various stakeholders, outlines a comprehensive strategy to achieve the Indian governments energy transition goals. It details the transmission infrastructure required to support 500 GW of RE capacity by 2030, increasing to over 600 GW by 2032. Further, implementation of CERC General Network Access (GNA) Regulations is expected to facilitate non-discriminatory open access to inter-State transmission system and provide flexibility to Discoms to procure higher component of power from IPPs across India.

Challenges

The power transmission market in India is facing several challenges that are hindering its growth and development. One of the main challenges is the lack of adequate transmission infrastructure, which is resulting in transmission losses and voltage fluctuations. The power transmission network in India is characterized by outdated technology and inadequate capacity, leading to power outages and blackouts. Another significant challenge is the complex regulatory framework, which is leading to delays and uncertainty in decision-making. The regulatory environment is challenging, as regulatory bodies have different objectives, policies, and agendas, leading to confusion and delays in decision-making. _ Furthermore, the power transmission market in India is facing financial challenges, with high levels of debt and a lack of investment in new transmission infrastructure. These challenges are hindering the growth and development of the power transmission market in India and require urgent attention to ensure a reliable and efficient supply of electricity to end users. Additionally, keeping up with rapid technological advancements requires ongoing investment, while balancing operational efficiency and sustainability goals adds another layer of complexity. Addressing these issues is essential for ensuring reliable and efficient power distribution across the country.

Outlook

Indias electric transmission tower market is set to experience notable growth, fuled by several key factors. The markets expansion is primarily driven by the ongoing enhancement and modernization of the countrys power grid infrastructure. As India continues to pursue ambitious goals in increasing its renewable energy capacity and ensuring reliable electricity supply across diverse regions, the demand for new transmission towers and the upgrading of existing infrastructure will rise. Government initiatives such as the National Electricity Plan and the Deen Dayal Upadhyaya Gram Jyoti Yojana aim to improve the transmission and distribution network, particularly in rural and underserved areas. These programs are designed to boost electricity access, reduce transmission losses, and support the integration of renewable energy sources into the grid.

Technological advancements also play a critical role, with innovations in tower design, materials, and construction techniques enhancing efficiency and resilience. The focus on smart grid technology and digital monitoring systems is expected to influence the market, driving demand for advanced transmission infrastructure.

Company overview

The Company specialises in power infrastructure EPC (Engineering, Procurement, and Construction) and Trading. The company is engaged in, supplying, and erecting power transmission and distribution infrastructure, including high-voltage transmission lines and substations.

Overview

Being one of the fastest-growing economies, India is on the path to ensure energy security, promote environmental health and meet its global climate commitments under the Paris Agreement. Indias renewable energy landscape has undergone transformative growth, making remarkable strides in transitioning to greener and more sustainable energy future. From expansive solar parks to wind farms and hydroelectric and bioenergy projects, India has steadily built a diverse renewable energy base reducing dependency on fossil fuels to strengthen the nations energy security, amidst global tensions. India has exhibited unwavering commitment in achieving its ambitious target of 500 GW of non-fossil fuel energy capacity by 2030 and reach net-zero carbon emissions by 2070.

>By 2030, India aims to reach 280 GW of solar power led by mega solar parks, and fast paced adoption of decentralised solutions such as rooftop solar systems. Solar and wind will remain key drivers. The country has added an unprecedented 25 GW of renewable energy capacity in FY 2024-25, marking an increase of nearly 35% over the previous years addition of 18.6 GW. Indias solar power sector led the renewable energy growth, with capacity additions soaring from 15 GW in FY 2023-24 to nearly 21 GW in FY 2024-25, a remarkable 38% increase. The country also achieved the significant milestone of surpassing 100 GW of installed solar capacity this year.

As per CEAs National Electricity Plan – Volume II (Transmission), the peak demand by FY32 to be ~388 GW. RE contribution in the power supply is expected to increase from current 35% to 59% by FY32. Given the intermittent nature of RE sources, the energy storage systems are planned to be integrated in the grid - 47 GW BESS and 36 GW PSP capacity by FY32.

Challenges

Indias renewable energy sector remains a key pillar of the energy transition journey, driven by strong policy support, increasing power demand and a robust investment pipeline. The government remains committed to achieving 500 GW of non-fossil fuel capacity by 2030, supported by evolving regulatory frameworks. Having laid a strong groundwork for long-term sustainability and energy independence, the country is now focussing on grid expansion and modernisation, energy storage development and renewable supply chain integration. Integration of energy storage will be instrumental in tackling the intermittency challenges of renewables. These materials are essential for the manufacture of renewable energy technologies, and a projected shortage could impact the sectors growth. Geographical disparities in the adoption of renewable energy technologies also pose a challenge. While some regions have abundant renewable resources, others may lack the necessary infrastructure or resources to harness these energies. Despite these challenges, the transition to renewable energy is crucial for mitigating climate change and achieving sustainable development. It requires concerted efforts from governments, businesses, and individuals alike.

Outlook

In India, the escalating demand for renewable energy driven by rising greenhouse gas emissions. The country has been experiencing significant levels of air pollution and environmental degradation due to its heavy reliance on fossil fuels. This has led to a growing awareness of the need to shift towards cleaner and more sustainable energy sources. Renewable energy offers a viable solution to mitigate greenhouse gas emissions and combat climate change. The generation of electricity from renewable sources such as solar, wind, and hydropower significantly reduces carbon dioxide emissions compared to traditional fossil fuel-based power generation. As a result, there is a strong push for renewable energy adoption in India to reduce the carbon footprint and improve air quality.

The rising awareness among individuals regarding renewable energy benefits is propelling the market. There has been a notable shift in public perception towards renewable energy and its advantages in recent years. Individuals are becoming aware of the detrimental effects of fossil fuel consumption on the environment, climate change, and air pollution. This awareness has led to a greater appreciation for renewable energy sources such as solar, wind, and hydropower, which are cleaner, sustainable, and have a lower environmental impact.

COMPANY OVERVIEW

During FY 2024-25, the existing promoters Mr. Rohit Pandey and Mr. Sunil Dutt Pandey acquired the Company from the erstwhile promoters with due compliance of the SEBI Takeover Regulations and are presently control the management of the Company.

They have an experience of 14 year of Business in the sector of Power transmission and Power distribution and engaged in the construction of Transmission and Distribution Power lines and substations up to 800 KV level. They are leading Turnkey service provider in the sector of Power Transmission/Distribution Lines & substations construction sector with wide experience and proven expertise in the execution of height-raising and utility shifting of 800KV/765KV/400KV/220KV/132 kV transmission lines and many major infrastructure projects.

Their expertise in transmission & distribution of power translates into a grand vision to operate in challenging ventures across the globe.

Brief financial performance is given below:

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 DETAILS EXPLANATION THEREFOF:

RISKS AND CONCERNS

Ahmedabad Steel Craft Ltd primarily operates in the key areas: EPC (Engineering, Procurement, and Construction) services, and Infrastructure Construction. Given its extensive operations both within India and internationally, the company faces a range of risks that could impact its long-term success. To address these challenges, Ahmedabad Steel Craft has developed a robust risk management framework that plays a crucial role in identifying, assessing, and mitigating potential risks across its business.

The companys risk management processes are integrated at various levels of its operations, ensuring that risks are managed effectively throughout the organization. These processes are periodically reviewed and updated to stay aligned with the evolving internal and external environments. This proactive approach allows Ahmedabad Steel Craft to adapt to changes in the market, regulatory landscape, and other external factors, thereby maintaining its resilience and continued success in the industry.

INFORMATION TECHNOLOGY

The Company recognizes technology as a crucial strategic asset and aims to harness digital solutions to achieve exceptional service. The goal is to enhance agility, intelligence, and efficiency across all business processes, improve stakeholder experiences, and drive meaningful, sustainable long-term progress.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The level of employee satisfaction affects an organisations success. The Company constantly emphasises how important it is to hire a diverse workforce and how much it values each employees contributions. We believe our intellectual capital to be the business most valuable asset, and losing it would have a significant negative impact on our performance. The Companys overarching goal is to attract and retain competent employees while also providing a fulfilling workplace that is safe, welcoming, and supportive of career progress. During the year under review, the Company expanded on a variety of projects to improve current HR systems and procedures, as well as to create new tools to improve the employee experience in terms of leadership and succession, performance and recognition, development, engagement, and employer branding.

CAUTIONARY STATEMENT

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and domestic demand supply conditions, finished goods prices, raw material cost and availability, changes in Government regulations, tax regimes, economic developments within India and other factors such as litigation and industrial relations. 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.