Gayatri Highways Ltd Management Discussions

COMPANYS OVERVIEW

Gayatri Highways Limited - GHL ("the Company") was incorporated during the year 2006 in accordance with the provisions of Companies Act, 1956. The Company on its own and through its jointly controlled entities is in the business of construction, operations and maintenance of carriageways on toll and annuity basis pursuant to the development agreements with the National and State Governments and makes investments in companies engaged in the construction, operations and maintenance of roads, highways, vehicle bridges and tunnels and toll roads. The registered office of the Company is located at 5th Floor, A-Block, 6-3-1090, TSR Towers, Rajbhavan Road, Somajiguda, Hyderabad - 500082, Telangana.

Industry Analysis:

Global economy has shown moderate growth with high pressures and geopolitical instability. Monetary policies and particularly interest rate adjustments in major economies added complexity, Emerging markets performed diversely. Trade tensions, supply chain disruptions, investment volatility, AI technology advancements and work force adaptations created a uncertain dynamic business environment for government, businesses, industry and policy makers. Global economy is projected to grow at a slow rate with a slow decline in inflation.

Indian economy is expected to continue its momentum growth. In FY 2024-25, capital expenditure of the National Highway Authority of India (NHAI) reached an all-time high of Rs.2.5 lakh crore, reporting a strong growth of 21% over the previous year. India continued to witness significant change in road construction, driven by continued investments under the Bharatmala Pariyojana project and the National Infrastructure Pipeline (NIP). The Union Budget for FY 2025-26 included a record-breaking capital allocation of Rs.2.65 lakh crore for the railways. The key areas targeted for investment are rolling stock, multitracking works, electrification, passenger amenities, high-speed rail and DFCs. The budgetary allocation for the Ministry of Road Transport and Highways (MoRTH) is Rs.2.87 lakh crore, an annual increase of 2.4% on a year on year basis.

The Build-Operate-Transfer (BOT) model by the government offers contractors long-term revenue opportunities through the operation and maintenance phases of an infrastructure project.

The Company continues to focus on opportunities by partnering with BOT concessionaires for the EPC scope of the project.

Opportunities and Threats

In view of more and more competition in infrastructure industry, the opportunities for securing contracts need continuous innovation in its various core functions. The Company has emerged as a significant Infrastructure Company with diversification in Roads and Expressways. The Company is poised to seize every opportunity to expand the existing line of business. The Company is well equipped to handle threats of competition and challenges or the Companys ongoing execution of Projects.

Business outlook:

In the Union Budget 2025–26, the infrastructure allocation has been increased to Rs. 11.1 lakh crore (approx. US$ 133 billion), with special emphasis on sustainable transportation, multimodal logistics, and digital monitoring of projects. The Ministry of Road Transport and Highways (MoRTH) alone has been allocated over Rs. 1.5 lakh crore, reaffirming the governments resolve to upgrade national highway corridors, enhance expressway networks, and improve last-mile connectivity across the country.

In the roads sector, the Governments policy to increase private sector participation has proved to be a boon for the infrastructure industry as many private players are entering the business through the public-private partnership (PPP) model.

Your Company is exploring new opportunities to identify suitable and viable project or to continue and strengthen its present business with its existing SPVs keeping in view the current business conditions, financial constraints, modern technologies, project deadlines, safety protocols, compliances and market margins

RISKS AND CONCERNS

Inadequate risk management is a primary cause of concern indicated by most organizations in India. To be in a position to have fully identified all risks associated with a project and have a response plan for each; that is clearly a benchmark most organizations acknowledge, nevertheless, do little about it. Risk Management by its very nature is flawed because it only identifies the things project managers know; it fails to appreciate the "unknown", "unknowns", the "un-controllable". That said, the more risks identified and planned for, the better position the project team is in to deliver a successful project. Risk Management has been identified as a best practice by most respondents. Moreover, there is a growing concern among Organizations about inaccurate risk identification. The project will yield continuous flow of revenue for the Company

The Companys risk management approach is embedded within its core corporate governance approach, framework and proactive response to emerging challenges for assessment of business risks, operating controls and in compliance with Companys policies.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has adequate Internal Control Systems and Procedures with regard to purchase of Stores, Raw Materials including Components, Plant and Machinery, equipment, sale of goods and other assets. The Company has clearly defined roles and responsibilities for all positions and all operating parameters are monitored and controlled.

The Company designs and maintains accounting and internal control systems to provide reasonable assurance at reasonable cost that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing financial statements and maintaining accountability for assets. The Board process and systems to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. These systems are augmented by written policies, an organizational structure providing division of responsibilities, careful selection and training of qualified personnel, and a program of internal audits.

FINANCIAL PERFORMANCE & OPERATIONALPERFORMANCE:

A. FINANCIAL CONDITION:

Capital Structure:

The Paid-up Share Capital of the Company as on 31st March, 2025 is 21,563.07 Lakhs divided into 239,651,900 Equity Shares of 2/- each fully paid up and 167,700,300 9% Non-convertible Cumulative Redeemable Preference shares (NCRPS) of 10/- each.

Other Equity:

The retained earnings in other equity of the company as on 31st March, 2025 stand at (28,760.97) Lakhs as compared to (28,778.73) Lakhs in the previous year.

There is no change in Capital reserve in other equity of the company as on 31st March, 2025 when compared to 4,738.35 Lakhs in the previous year.

Fixed Assets:

During the financial year 2024-25, no fixed assets were acquired by the company, whereas during the previous year 2023-24, computers and related equipment were acquired for an amount of 1.17 Lakhs by the company.

Sundry Debtors:

Sundry debtors increased to 220.40 Lakhs as on 31st March, 2025 as against 52.34 Lakhs debtors in the previous year. These debtors are considered good and realizable.

Cash and Bank Balances:

Cash and Bank balances with Scheduled Banks stood to 266.25 Lakhs as against 114.53 Lakhs in the previous year, additionally the company has a fixed deposit with original maturity of 3 months 15 Lakhs as on 31.03.2025 and Nil as on 31.03.2024. The company also has investments in liquid debt funds (Cash equivalent) worth of 1,266.67 Lakhs as on 31.03.2025 and 129.51 Lakhs as on 31.03.2024.

Loans and Advances:

Long Term Loans and Advances is Nil in the current year as well as in the previous year.

Short Term Loans and Advances is 2,642.17 Lakhs as against 2,452.18 Lakhs in the previous year.

Current Liabilities:

Current Liabilities as on 31st March, 2025 is 13,203.36 Lakhs as against 13,049.72 Lakhs in the previous Year.

B. OPERATIONAL RESULTS: Turnover:

During the financial year 2024-25 the revenue from operations of the Company was 569.02 Lakhs and income from other sources as on 31st March, 2025 was 2,017.64 Lakhs, compared to the revenue from operations of the company was 172.00 Lakhs and income from other sources was 2,190.72 Lakhs, in the previous financial year.

Depreciation:

The Company has provided for depreciation of 6.69 Lakhs during the financial year 2024-25 whereas depreciation of 8.06 Lakhs provided in the previous financial year.

Provision for Tax:

The Company has provided for income tax of Nil in the financial year 2024-25 and has provided for 5.31 Lakhs in the previous financial year.

Net Profit:

The Net profit of the Company after tax is 17.76 Lakhs as against loss of (72.46) Lakhs in the previous year.

Earnings per Share:

The Earnings (Losses) per Share of the Company as on 31st March, 2025 is 0.01 per share for Face Value of 2/- as against (0.03) per share for Face Value of 2/- in the previous year.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIALRELATIONS:

The Company believes that the Companys growth and future success depend largely on the skills of the Companys workforce, including executives and officers, as well as the designers and engineers and the attraction of critical skills. The loss of the services of one or more of these employees could impair the Companys ability to continue to implement its business strategy. The Companys success also depends, on its continued ability to attract and retain experienced and qualified employees. The Company is committed to building the competencies of its employees and improving their performance through training and development. The Company focus is on identifying gaps in its employees competencies and preparing employees for changes in competitive environments, as well as to meet organizational challenges.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS

Key financial ratios on standalone basis including significant changes (more than 25%) areshown in the table below:

Ratio	FY 2024-25	FY 2023-24	Change	Note
Debtor Turnover (Days)	19.24	8.59	(124.14)%	A
Interest Coverage Ratio	1.02	0.95	(7.14)%
Current Ratio	0.34	0.22	(59.10)%	B
Debt Equity Ratio	(2.25)	(2.17)	(3.71)%	-
Operating profit margin %	59.54%	60.83%	2.14%	-
Net profit margin %	1.19%	(2.62)%	145.23%	C
Return on Net worth %	0.64%	(1.29)%	149.52%	D

A. Turnover decreased during the year end when compared to previous year end.

B. Trade Receivables has increased during the year end when compared to previous year end. C. Net profit margin is improved as profits increased.

D. Return on Net worth margin is improved as profits increased.

E. The Company has no Inventory hence Inventory Turnover Ratio is not applicable.

CAUTIONARY STATEMENT:

The statements in the "Management Discussion and Analysis Report" describing the Companys objective, projections, estimates, forecast or expectations may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially or substantially from those expressed or implied therein due to the risks and uncertainties. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand / supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws, economic, political developments within the country and other factors such as litigations and industrial relations.

Place: Hyderabad	M.V. NARASIMHA RAO	KRISHNAMURTHY CHATURVEDI
Date: 12th August, 2025	DIRECTOR	DIRECTOR
	DIN: 06761474	DIN:08661228