Ceigall India Ltd Management Discussions

ECONOMIC OVERVIEW Indian Economy

Despite continued global uncertainties in FY 2025, India remained one of the fastest-growing major economies, recording an estimated 6.5% GDP growth. This resilience was underpinned by strong domestic demand, steady agricultural output, robust policy measures, and strategic government initiatives. The Reserve Bank of India (RBI) maintained a proactive stance in managing inflation through calibrated monetary policies, while economic stability was further reinforced by buoyant tax collections and prudent fiscal consolidation efforts.

The positive momentum was supported by the governments significant increase in capital expenditure, which was Rs.11.11 lakh crore in FY2025™. Investments in infrastructure and developmental projects continued to stimulate private investments, boost domestic demand, and help shield the economy from global headwinds.

In FY 2025, India witnessed sustained growth in both the services and industrial sectors. The services sector remained buoyant, supported by robust performance in finance, IT, and transportation, while industrial growth was driven by manufacturing, construction, and energy output. Government policies continued to bolster manufacturing through Production Linked Incentive schemes, attract investments, and enhance the overall ease of doing business.

The National Infrastructure Pipeline (NIP) envisages a total investment of Rs.111 lakh crore during FY 2020-25, covering critical sectors like roads, railways, urban development, and energy.

Outlook

The Indian economy remains optimistic in FY2025, driven by strong fundamentals such as political stability, rising public capital expenditure, a steady increase in private investments, and growing credit demand. A robust banking and financial services sector, coupled with sustained emphasis on infrastructure development, digitalization, and ongoing economic reforms, is expected to support long-term growth.

Indias emergence as a preferred global manufacturing hub, alongside the advantages of a large domestic market and expanding export opportunities, positions the economy to outpace many other major economies in the coming years.

INDUSTRY OVERVIEW

Indias Infrastructure Sector

India continues to prioritize infrastructure development as a cornerstone for achieving its target of becoming a USD 5 trillion economy by FY2028¹²¹. In the Union Budget 2024- 25, the government allocated approximately Rs.11.11 lakh crore to capital expenditure, maintaining infrastructure spending at around 3.4% of GDP^[31.

Key infrastructure initiatives remain on track, including the governments plan to expand the National Highway network toward 2 lakh km over the next few years, expanding the number of airports to 220, and operationalizing 23 waterways by 2030¹⁴¹. The National Infrastructure Pipeline (NIP) envisages a total investment of 5111 lakh crore during FY 2020-25, covering critical sectors like roads, railways, urban development, and energy¹⁵¹.

Infrastructure-related ministries have seen significant increases in budget allocations, with combined outlays rising from Rs.3.7 lakh crore in FY2023 to Rs.5 lakh crore in FY2024, and higher allocations projected for FY 2025^[61. Such increased capital expenditure underscores the governments commitment to enhancing transport networks, logistics, and urban infrastructure.

Indias infrastructure sector is projected to grow at a compound annual growth rate (CAGR) of 9.57%, potentially reaching a market size of USD 322.27 billion by 2029^[71. The governments emphasis on sustainability and multi-modal connectivity — exemplified by the PM Gati Shakti National Master Plan — aims to streamline infrastructure development, reduce logistics costs, and improve efficiency¹⁸¹.

Public-Private Partnerships (PPP) remain vital in engaging the private sector across roads, railways, ports, and airports, while rising Foreign Direct Investment (FDI) and innovative financing tools such as Infrastructure Debt Funds (IDFs) continue to bolster funding avenues for the sector¹⁹¹.

Union Governments capex expenditure and budget estimates, which heavily support infrastructure spending:

Road and Highway Infrastructure of India

India has the worlds second-largest road network, spanning approximately 66.71 lakh km as of November 2023¹¹⁰¹, comprising national highways, state highways, district, and rural roads. Although national highways constitute only about 2% of this vast network, they carry more than 40% of total road traffic, highlighting their crucial role in Indias economic growth and social development. In FY 2024-25, the government continued significant investments in road infrastructure under programmes such as Bharatmala Pariyojana and PM Gati Shakti, with capital expenditure in the roads sector rising to Rs.2,87,333 crore in the Budget Estimates, further emphasizing roads as a backbone for logistics and connectivity.¹¹¹¹

00,04,340 KITI

(Source: Ministry of Road Transport & Highways, Basic Road Statistics of India, 2023-24 [00])

Indias national highway network has expanded significantly over the past decade. The length of four-lane and highspeed corridors grew 2.5 times, from 18,387 km in 2014 to about 46,179 km by November 2023, as reported by the Ministry of Road Transport & Highways. Further expansion is ongoing under flagship programmes like Bharatmala Pariyojana, which targets construction of 34,800 km of highways—including 27 greenfield corridors—to improve connectivity, enhance freight efficiency, and reduce logistics costs. As of December 2024, significant progress has been made, with major greenfield expressways like the Delhi-Mumbai Expressway partially operational and several economic corridors advancing toward completion. In FY 2024-25, the government has allocated Rs.2,87,333 crore for the Ministry of Road Transport and Highways to accelerate these initiatives.

A robust Maintenance and Repair (M&R) framework assigns specific sections to dedicated agencies to ensure roads remain in optimal condition. The National Highways Authority of India (NHAI) and the Ministry of Road Transport and Highways (MoRTH) continue to drive this expansion and modernisation, employing innovative models such as the Hybrid Annuity Model (HAM). This model effectively balances risks between the public and private sectors, fostering significant investments and boosting public-private partnerships (PPPs)^[131.

Highway Construction Pace and Modernisation

Indias average highway construction pace has improved markedly from around 12 km per day in 2014 to approximately 28.3 km per day in FY 2023-24, as reported by the Ministry of Road Transport & Highways. By December 2024 (in FY 2024-25), over 5,853 km of national highways had been constructed, already exceeding the revised annual target of 3,100 km set earlier in the year,

By December 2024 (in FY 2024-25), over 5,853 km of national highways had been constructed, already exceeding the revised annual target of 3,100 km set earlier in the year, demonstrating sustained progress in expanding national connectivity and enhancing transport efficiency.

demonstrating sustained progress in expanding national connectivity and enhancing transport efficiency¹¹⁴¹. This accelerated development aims to reduce travel times, lower logistics costs, and stimulate economic activity across regions.

The governments commitment is further reflected in an increased budget allocation of Rs. 2.87 lakh crore for the Ministry of Road Transport and Highways in FY 2024- 25, a modest rise from the previous years allocation of Rs. 2.78 lakh crore. Additionally, the PM Gati Shakti initiative continues to play a transformative role by digitising approval processes and integrating infrastructure planning across multiple ministries. As of early 2025, the Gati Shakti National Master Plan platform hosts over 1,600 data layers, facilitating faster project execution and more efficient resource utilisation.

Collectively, these initiatives are expected to elevate Indias road infrastructure to standards comparable with those of advanced economies over the coming years.

Tunnelling Infrastructure

Indias tunnelling infrastructure continues to expand rapidly, driven by the governments robust infrastructure agenda and key projects under the Bharatmala Pariyojana, aimed at improving road connectivity across diverse terrains¹¹⁵¹. Tunnelling has become critical for road, metro, railway, and utility networks, especially in challenging regions such as the Himalayas and the Western Ghats, where advanced engineering solutions are essential for safety and operational efficiency.

Major projects under execution include the Zoji La Tunnel, poised to become Asias longest bi-directional road tunnel at 13.14 km, and the Z-Morh Tunnel, which will significantly enhance all-weather connectivity between Srinagar, Kargil, and Leh. As of early 2025, the Zoji La Tunnel has recorded over 7 km of excavation completed on both ends, with overall progress exceeding 56%, and is targeted for completion by December 2026. Meanwhile, the Z-Morh Tunnel has achieved over 85% completion and is expected to be operational by the latter half of 2025, improving strategic connectivity and boosting tourism and trade in the region¹¹⁶¹.

In Uttarakhand, the Silkyara Bend-BarkotTunnel, part of the Char Dham project, has achieved about 72% completion as of early 2025. The 4.53 km tunnel will cut travel distance to Yamunotri by 20 km, improving connectivity and disaster resilience. Completion is targeted in FY 2025-26¹¹⁷¹.

The tunnelling sector is witnessing strong momentum, supported by substantial public and private investments, favourable policy frameworks, and growing opportunities for Public-Private Partnerships (PPP), which are attracting increased Foreign Direct Investment (FDI). Indias tunnel construction market is projected to grow at a CAGR of approximately 13% through 2029, reflecting rising demand across transportation, hydropower, and urban infrastructure segments.

Aviation and Airport Infrastructure

Indias aviation and airport infrastructure sector continues to flourish, with domestic passenger traffic reaching approximately 154 million in FY 2023-24, reflecting a

robust 13% year-on-year growth that has surpassed pre- COVID levels¹¹⁸¹. The sector is expected to maintain its momentum, with domestic passenger numbers projected to exceed 170 million in FY 2024-25 if current trends persist. The Regional Connectivity Scheme (RCS) - UDAN has played a pivotal role in expanding air connectivity, with more than 500 routes operational and a target of establishing 220 airports, heliports, and water aerodromes nationwide¹¹⁹¹. To meet rising demand and modernise infrastructure, over Rs.2.5 lakh crore (approximately US$30 billion) is being invested in upgrading existing airports and developing greenfield projects across the country. These transformative developments underscore the aviation sectors critical role in driving Indias economic growth, enhancing regional accessibility, and positioning the country as a key global aviation hub.

Railway Infrastructure of India

Indias railway infrastructure is steadily expanding, with 5,100 km of new track laid in FY 2023-24, averaging over 14 km per day, reflecting significant progress in expanding and modernising the network. As of February 2024, 61,813 km of the broad-gauge network has been electrified, supporting Indias goals of sustainability and energy efficiency. The Indian Railways continues to be among the worlds largest rail networks, playing a critical role in passenger and freight movement. During FY 2023- 24 (till February), Indian Railways achieved 1,434.03 million tonnes (MT) of freight loading, demonstrating resilience and operational efficiency¹²⁰¹. The governments commitment to railway modernization is reflected in a record budget allocation of Rs.2.55 lakh crore for FY 2024- 25, representing a 5.8% increase over the previous year¹²¹¹.

This investment is targeted toward infrastructure upgrades, network expansion, and technological modernisation. Foreign Direct Investment (FDI) has played a pivotal role in the sector, enabling the introduction of high-speed trains, advanced track systems, modern signalling, and safety technologies. The government has facilitated this by permitting 100% FDI in railway infrastructure, promoting global partnerships and technological advancements¹²²¹.

Looking ahead, the outlook for Indias railway sector remains robust, driven by ambitious initiatives under the National Rail Plan, which aims to expand and upgrade the network by 2030. Key priorities include the development of high-speed rail corridors, extensive electrification, and dedicated freight corridors to enhance efficiency and reduce logistics costs. Notable projects include plans to induct 400 Vande Bharat trains and redevelop over 1,300 stations, which are expected to transform passenger experiences and significantly boost freight handling capacity, supporting Indias broader economic growth.

Metro Infrastructure of India

Indias metro rail network has expanded remarkably over the past decade, growing from approximately 248 km in 2014 to around 1,050 km by mid-2025, covering 23 cities and establishing itself as the worlds third-largest metro system^[231. An additional 919 km of metro lines are currently under construction, reflecting robust ongoing investment in urban mobility infrastructure.

This rapid development aligns with the National Urban Transport Policy, which aims to implement metro systems in cities with populations exceeding two million to enhance urban mobility, reduce congestion, and lower pollution levels Over the past decade, India has added nearly 700 km of new metro lines, transforming urban transit in key metropolitan regions.

The central government remains firmly committed to metro expansion, with substantial allocations provided in the Union Budget 2024-25 for new and ongoing metro projects. Notable developments include the continued expansion of the Delhi Metros Phase IV, new corridors under construction in cities like Pune, Kolkata, Bengaluru, and Mumbai, and significant technological upgrades such as driverless train operations and advanced signalling systems across existing networks. In FY 2024-25, the Ministry of Housing and Urban Affairs has allocated Rs.23,175 crore for metro projects, reflecting

the governments focus on sustainable urban mobility and easing congestion in rapidly growing urban areas. ¹²⁴¹

Additionally, policies such as the Metro Rail Policy 2017 and initiatives under the PM Gati Shakti National Master Plan are driving integrated multimodal transport networks, streamlining approvals, and improving project efficiency. These efforts aim to create seamless urban mobility solutions, enhancing convenience and connectivity for millions of commuters nationwide.

GOVERNMENT INITIATIVES

National Infrastructure Pipeline (NIP)

Launched in 2020, the National Infrastructure Pipeline (NIP) aims to invest approximately Rs.111 lakh crore (USD 1.5 trillion) from 2020 to 2025 across over 9,200 projects spanning sectors such as energy, roads, urban infrastructure, railways, and more. The NIP is a collaborative effort involving central and state governments along with private sector participation, designed to enhance Indias infrastructure capacity, boost economic growth, and improve the nations global competitiveness. As of 2025, over 45% of NIP projects are under implementation or completed, reflecting significant progress.

PM Gati Shakti National Master Plan

The PM Gati Shakti National Master Plan is a transformative initiative focused on creating seamless multimodal connectivity across Indias economic zones. By integrating infrastructure schemes like Bharatmala, Sagarmala, UDAN, and Dedicated Freight Corridors into a unified digital platform, Gati Shakti enables coordinated planning, faster project approvals, and real-time monitoring. This initiative is projected to reduce logistics costs and travel time by 40-50% in targeted economic hubs, significantly enhancing supply chain efficiency and competitiveness. As of early 2025, the platform integrates over 1,600 data layers from various ministries and departments.

Bharatmala Pariyojana

Bharatmala Pariyojana is Indias flagship highway development programme, aimed at optimising freight and passenger movement across the country. Phase I targets the construction of 34,800 km of highways, including economic corridors, feeder routes, border roads, and greenfield expressways. Originally expected to conclude

by FY 2024-25, completion timelines have shifted slightly, with most projects now scheduled for delivery between FY 2027-28 due to land acquisition and environmental clearance challenges. Nonetheless, substantial progress has been made, with over 27,500 km of work awarded as of March 2025.

Foreign Direct Investment (FDI)

The Government of India continues to pursue an investor- friendly policy framework, permitting 100% Foreign Direct Investment (FDI) under the automatic route in sectors such as roads, highways, and infrastructure development. This policy aims to attract substantial foreign capital, accelerate the development of critical infrastructure, and support asset monetisation initiatives, which consolidate multiple infrastructure assets into monetisable platforms. These efforts promote capital recycling and generate resources for new investments, fostering sustainable infrastructure growth.

OPPORTUNITIES

Government initiatives:

The Indian government continues to drive transformative infrastructure programmes such as the Smart Cities Mission, PM Gati Shakti National Master Plan, Bharatmala Pariyojana, Sagarmala, and the National Infrastructure Pipeline (NIP). These initiatives are generating significant opportunities for infrastructure companies to engage in large-scale projects spanning roads, bridges, urban transit systems, logistics hubs, and digital infrastructure. The continued focus on infrastructure investment in the Union Budget 2024-25 reinforces this momentum.

Urbanisation and connectivity:

Rapid urbanisation and rising income levels are fueling the demand for modern, efficient urban transport systems, including metro rail projects, urban expressways, multimodal transit hubs, and smart mobility solutions. This trend offers substantial opportunities for infrastructure developers, technology providers, and service operators to participate in the expansion and modernisation of Indias urban transportation networks, especially in Tier II and Tier III cities where infrastructure gaps remain significant.

Public-Private Partnerships (PPPs):

The Indian governments sustained emphasis on Public- Private Partnerships (PPPs) is creating robust avenues for private sector investment and technical expertise in infrastructure development. Sectors such as roads, metro rail, airports, ports, renewable energy, and logistics are increasingly leveraging PPP frameworks, enabling the execution of complex, capital-intensive projects by sharing risks and financial responsibilities between public

ana private entities, i ne aaoption or moaeis iixe nyDria Annuity Model (HAM) in road projects has further enhanced private sector participation and investor confidence.

Digital and green infrastructure:

Emerging focus areas such as digital infrastructure (5G rollout, data centers, intelligent transportation systems) and sustainable infrastructure (EV charging networks, solar highways, green buildings, and energy-efficient urban design) present fresh growth opportunities. Government policies and incentives are steering infrastructure development toward sustainability, creating significant prospects for companies offering innovative green technologies and digital solutions.

THREATS

Regulatory and policy delays

Despite proactive government support, infrastructure projects often face delays due to complex regulatory clearances, land acquisition hurdles, and environmental approvals. These delays increase project costs, reduce profitability, and create uncertainty for private investors and EPC contractors.

Global economic and geopolitical uncertainties

Fluctuating commodity prices, currency volatility, and geopolitical tensions (e.g. in oil-producing regions or global shipping routes) can disrupt material supply chains and affect the financial performance of infrastructure projects that rely on imported equipment or raw materials.

Environmental and climate risks

The increasing frequency of extreme weather events, natural disasters, and stricter ESG compliance expectations can disrupt construction schedules and impose additional costs. Projects not aligned with sustainable development goals may face opposition from stakeholders and investors.

Road Sector Budget Allocations

Category	FY 2024-25 RE	FY 2025-26 BE	YoY Change
Total MoRTH	Rs.2,80,519 crore	Rs.2,87,333 crore	+2.4%
- NHAI	Rs.1,69,371 crore	Rs.1,70,266 crore	+1.0%
- Roads & Bridges	Rs.1,10,576 crore	Rs.1,16,292 crore	+5.2%
- Others	Rs.572 crore	Rs.775 crore	—

RE = Revised Estimate BE = Budget Estimate

Union Budget 2025-26, Expenditure Profile Union Budget Website

COMPANY OVERVIEW

Ceigall India Limited, a prominent player in infrastructure construction, has over two decades of experience in engineering, procurement and construction (EPC) projects. Specialising in highways, roads, tunnels, bridges and airport runways, the Company has completed more than 36 projects, including significant undertakings under the Bharatmala Pariyojana, a government initiative aimed at improving road connectivity across the country. Ceigalls strategic approach regarding complex structural works ensures high-quality, on- time project delivery, contributing considerably to Indias infrastructure growth. As of FY2024-25, the Companys order book is Rs. 1,08,062 million, with 22 ongoing projects, including 10 EPC, 8 HAM Projects, 3 Item Rate and 1 DBFOT. Its asset-light model, optimising equipment costs through rentals, enhances its operational efficiency and profitability. The Companys commitment to innovation, excellence and strong management positions it well to capitalise on opportunities in Indias expanding infrastructure sector.

Key performance highlights

The Company has demonstrated strong performance across its various business segments during the fiscal year 2024-25.

EPC projects

This segment continues to be the largest contributor to the companys revenue accounting for 75.71% of the total Construction revenue in FY 2024-25. Ceigall successfully executed several key infrastructure projects, including highways, bridges and urban infrastructure developments. The companys expertise in handling complex EPC projects has enabled it to maintain a robust order book and secure new contracts, thereby driving growth in this segment.

HAM projects

The Hybrid Annuity Model projects contributed 23.71 % to the total revenue for FY 2024-25. This segment involves a mix of government funding and private investment, allowing Ceigall India to engage in long-term infrastructure projects with stable revenue streams. The company has focused on expanding its portfolio of HAM projects, leveraging its experience in public-private partnerships to enhance its market presence.

The companys profit after tax (PAT) for the year was Rs.2,865.74 million, with a PAT margin of 8.34%, compared to previous year profit after tax ( PAT) Rs.3,043.07 million with PAT margin 10.05 %.

O&M projects

The Companys Operations and Maintenance projects accounted for 0.58 % of the total revenue. This segment includes the maintenance of completed infrastructure projects, providing a steady revenue stream and ensuring the longevity and functionality of the assets.

Outlook

Ceigall is strategically positioned for continued growth and expansion in the infrastructure sector, supported by a robust portfolio of projects and strategic initiatives. The company aims to leverage the Indian governments focus on infrastructure development, which presents substantial opportunities in road construction, urban development and transportation infrastructure. The Company plans to enhance its presence across various states by selectively expanding its geographical footprint and exploring new projects. The companys strategic focus on technological advancements and sustainable construction practices is expected to improve operational efficiencies and project execution capabilities. With a strong order book and a diverse range of ongoing projects, the Company is well-equipped to navigate industry challenges and drive sustainable growth in the coming years.

Consolidated Financial Performance

The Company reported a robust financial performance for the fiscal year 2024-25, showcasing significant growth across key financial metrics. The company achieved a total revenue of Rs.34,367.32 million, marking a substantial increase from the previous fiscal years revenue of Rs.30,293.52 million.

The Company achieved an EBITDA of Rs.5,183.78 million, reflecting an EBITDA margin of 15.08%, compared to an EBITDA of Rs.5,176.61 million and a margin of 17.09% in the previous fiscal year. The companys profit after tax (PAT) for the year was Rs.2,865.74 million, with a PAT margin of 8.34%, compared to previous year profit after tax ( PAT) Rs.3,043.07 million with PAT margin 10.05 %.

Return on Equity

As of March 31, 2025, the return on equity of the Company stood at 15.54%, compared to 33.57% as of March 31, 2024. The Company got listed on August 08, 2024, hence the net worth of the Company increases on account of public issue thereby reducing the ROE.

: Particulars	FY 2025	FY 2024
Revenue	34,367	30,294
EBITDA	5,184	5,177
EBITDA Margin (%)	15.08%	17.09%
PAT	2,866	3,043
PAT Margin (%)	8.34%	10.05%

Key financial ratios

Particulars	FY 2025	FY 2024	% Change
Debtors Turnover (No. of Days)	59	45	31.11%
Inventory Turnover (No. of Days)	15	17	-11.76%
Interest Service Coverage Ratio	3.86	5.50	-29.82%
Current Ratio	1.77	1.52	16.45%
Debt Equity Ratio	0.76	1.17	-35.04%
Operating Profit Margin (%)	13.46%	15.27%	-11.85%
Net Profit Margin (%)	8.34%	10.05%	-17.01%
Return on Net Worth	15.54%	33.57%	-53.71%

Human Resource

The Company prioritises its human resource as vital to its success in the infrastructure construction sector. Committed to attracting and retaining skilled professionals, it employs 2,298 individuals as of March 31, 2025. Ceigall invests in continuous learning and development through training programmes to enhance both technical and managerial skills of its employees.

Ceigall emphasises employee development and prioritises workforce health and safety. The Company enforces rigorous safety protocols and provides regular training to ensure a safe working environment . This holistic approach helps to maintain a motivated, engaged workforce, crucial for sustaining growth and achieving long-term business objectives.

Risk and concerns

The Indian infrastructure sector, particularly highway, bridge and flyover construction, faces several risks such as unpredictable regulatory environment, which may impact project timelines and costs. Delays in permits and clearances may lead to project overruns and increased liabilities. The sectors reliance on government contracts and funding also make it vulnerable to shifts in government

priorities and budget allocations, affecting project continuity and profitability.

Another significant concern is the volatility in raw material prices, such as steel and cement, which can increase construction costs and impact financial stability. Challenges include skilled labour shortages, the need for advanced technology and compliance with environmental, social and governance (ESG) standards. These factors contribute to higher costs and operational complexities, requiring robust risk management and adaptive business models for long-term success and resilience.

Internal control

The Company has a strong internal audit system in place, which is regularly monitored and updated to safeguard assets, comply with regulations and promptly address any issues. The audit committee diligently reviews internal audit reports, takes corrective action as required and maintains open communication with both statutory and internal auditors to ensure the effectiveness of internal control systems. This robust internal audit framework ensures that the Company operates with integrity, transparency and accountability while mitigating risks and safeguarding the interests of stakeholders.

Cautionary statement

This statement made in this section describes the Companys objectives, projections, expectations and estimations which may be forward looking statements within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised by the Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments.