Gayatri Projects Ltd Management Discussions

Global Economic Overview

The global economy demonstrated resilience during FY 2025-26 despite a challenging operating environment characterised by geopolitical tensions, evolving trade policies, disruptions in energy markets and continuing uncertainty in the global economic landscape. According to the International Monetary Funds July 2026 World Economic Outlook Update, global growth is projected at 3.0% in 2026 and 3.4% in 2027. The global outlook remains uneven, with the impact of geopolitical and energy-related developments being partly offset by technology-led investment and productivity gains.

The global economic environment continues to be influenced by developments in international trade, commodity prices, financial conditions and geopolitical risks. While inflationary pressures have moderated from earlier peaks in several economies, the outlook remains subject to risks arising from energy prices, supply-side disruptions and financial-market volatility. At the same time, technological advancement and increasing investment in emerging technologies are providing new avenues for productivity and economic growth.

For emerging and developing economies, continued investment in infrastructure remains an important contributor to economic growth, employment generation, connectivity and productivity. Public investment in transport, logistics, energy and other infrastructure is expected to remain an important support to economic activity, although the pace of infrastructure development may continue to be influenced by global financial conditions, commodity prices and geopolitical developments.

Indian Economic Overview

The Indian economy continued to demonstrate resilience and strong domestic growth during FY 2025-26. According to the Economic Survey 2025-26, Indias real GDP growth for FY 2025-26 is estimated at 7.4%, while Indias medium-term growth potential has been assessed at around 7%. The growth outlook continues to be supported by domestic demand, investment activity, productivity improvements and ongoing structural reforms.

Infrastructure development continues to remain a key component of Indias economic growth strategy. Sustained public expenditure on roads and highways, railways, logistics, urban infrastructure, energy and other capital-intensive sectors is supporting economic activity and improving the countrys connectivity and productive capacity. Continued investment in infrastructure is also expected to create opportunities for private-sector participation, particularly in engineering, construction and project execution.

The Governments focus on infrastructure-led development, together with improving connectivity and logistics efficiency, is expected to support Indias long-term economic growth. The continued emphasis on capital formation and infrastructure creation provides a favourable operating environment for companies engaged in construction and execution of infrastructure projects.

Infrastructure and Road Construction Sector

The infrastructure sector continues to occupy a strategic position in Indias economic development, with road and highway development remaining an important priority for improving connectivity, facilitating movement of goods and people, strengthening logistics networks and supporting regional economic development.

The Government has continued to focus on expansion and modernisation of the National Highway network, development of expressways and economic corridors, improvement of port and border connectivity and strengthening of road infrastructure across the country. During FY 2025-26, the National Highways Authority of India (NHAI) constructed 5,313 kilometres of National Highways, approximately 15% higher than its target of 4,640 kilometres. NHAIs capital expenditure towards development of National Highway infrastructure during FY 2025-26 stood at approximately ?2,44,362 crore.

The scale of ongoing road infrastructure development continues to provide opportunities for construction and EPC companies with established project-execution capabilities. Under the Bharatmala Pariyojana, projects covering approximately 26,425 kilometres had been awarded and 22,590 kilometres had been constructed as of March 2026. The programme covers economic corridors, inter-corridor and feeder routes, national corridor efficiency improvement projects, border roads, coastal roads, port connectivity roads and expressways.

The National Highway network has also expanded substantially, reaching over 1,46,572 kilometres by FY 2025-26 compared with approximately 91,287 kilometres in 2014. The continued expansion of the network and development of high-capacity corridors are expected to contribute to improved connectivity, reduced travel time and enhanced logistics efficiency.

Industry Outlook

The outlook for Indias infrastructure and road construction sector remains positive, supported by sustained public investment, continued development of the National Highway network, expansion of expressways and economic corridors and the Governments broader infrastructure-led growth strategy.

The continued focus of Central and State Governments on road and infrastructure development is expected to provide opportunities for EPC contractors. In addition to National Highway development, opportunities are expected to arise from State-level road infrastructure, bridges and other related infrastructure projects.

For EPC companies, efficient project execution, technical capabilities, effective cost management, working-capital management and timely completion of projects in accordance with contractual requirements will remain important determinants of sustainable growth. At the same time, the sector continues to face challenges including delays in land acquisition and statutory approvals, project-site conditions, availability and price volatility of construction materials, labour availability, working-capital requirements, financing costs and delays in receipt of contractual dues.

Against this backdrop, companies with established execution capabilities, experience in working with government and institutional clients and the ability to effectively manage large-scale infrastructure projects are well positioned to participate in the continuing development of Indias infrastructure sector.

YOUR COMPANY

Gayatri Projects Ltd (GPL), founded in 1963, is one of the oldest and most experienced pure-play Engineering, Procurement and Construction (EPC) companies in the Indian infrastructure sector. With over five decades of experience in executing major civil infrastructure projects, the company has established a strong presence across India and is diversified across both geographies and infrastructure segments.

The company has pan-India operations across several key infrastructure verticals, including roads, irrigation, water distribution, mining, and industrial construction. It primarily undertakes projects for State Government entities, the National Highways Authority of India (NHAI), the Ministry of Road Transport and Highways (MoRTH), and other corporate and institutional clients.

The company operates predominantly on an EPC project execution model, undertaking the engineering, procurement and construction of large-scale infrastructure projects. Its extensive experience, diversified project portfolio and established execution capabilities have enabled it to participate in major infrastructure development projects across the country.

The Company underwent the Corporate Insolvency Resolution Process (CIRP) for approximately three years due to various financial and operational challenges. The Company has since successfully exited the CIRP process and completed the payment obligations under the approved One-Time Settlement (OTS). With the resolution of these legacy matters, the Company is now focused on reviving and strengthening its operations, rebuilding its business pipeline, and pursuing sustainable growth opportunities across its core infrastructure and EPC segments.

OPERATIONAL & FINANCIAL REVIEW

During the financial year 2025-26, the Company witnessed a significant improvement in its operational and financial performance. On a standalone basis, the Company achieved revenue of Rs.846.89 crores, as compared to Rs. 449.92 crores in the previous financial year, registering a growth of approximately 88.23%. The increase in revenue reflects the improvement in the Companys business operations and execution of projects across its core infrastructure and EPC segments.

The Company reported a Profit Before Exceptional Item of Rs. 95.08 crores during the year under review, as against a Loss Before Exceptional Item of Rs. 40.62 crores in the previous financial year. This represents a significant turnaround in the Companys underlying financial performance and reflects the improvement in its operating activities, project execution and overall business performance.

After considering the impact of the exceptional item, the Company reported a Profit of Rs. 2,080.76 crores for the financial year 2025-26, as compared to a Loss of Rs. 68.80 crores in the previous financial year. The exceptional item has had a significant impact on the reported profit for the year. Accordingly, the Companys Profit Before Exceptional Item of Rs. 95.08 crores provides a more meaningful indication of the improvement in its underlying financial performance during the year.

The improvement in the Companys performance needs to be viewed in the context of the significant steps taken towards resolution of its legacy financial and operational matters.

SEGMENT WISE PERFORMANCE:

As per Accounting Standard AS- 17, the business of the Company falls under only one segment of business; hence segment report is not applied.

FUTURE PLANS

With the successful completion of CIRP and fulfillment of OTS, the Company has entered into a new phase focused on business revival, operational strengthening and sustainable growth. The resolution of the Companys legacy matters provides a stronger foundation for the Management to focus on rebuilding and expanding its business operations.

The Company intends to leverage its over five decades of experience in the infrastructure sector, established technical and execution capabilities and track record in undertaking large-scale Engineering, Procurement and Construction (EPC) projects across roads, irrigation, water distribution, mining and industrial construction. The Company is actively pursuing suitable business opportunities and strengthening its project pipeline, with a focus on projects that are commercially viable, financially sustainable and aligned with its core competencies.

The Companys future strategy will focus on the following key areas:

1. Strengthening the EPC Business

The Company will continue to leverage its extensive experience and execution capabilities to pursue suitable EPC opportunities across its core infrastructure segments, including roads, irrigation, water distribution, mining and industrial construction. The Company will focus on projects where it can effectively utilise its technical expertise, resources and execution capabilities.

2. Building a Sustainable Order Pipeline

The Company will focus on identifying and securing technically and commercially viable projects from Central and State Government agencies, NHAI, MoRTH and other institutional and private sector clients. Particular emphasis will be placed on projects offering sustainable margins, reasonable execution timelines and manageable funding and working capital requirements.

3. Improving Operational Efficiency and Project Execution

The Company intends to strengthen project monitoring, cost control, resource utilisation and execution processes. Greater emphasis will be placed on timely project completion, effective utilisation of resources, quality control and maintaining cost discipline, thereby improving overall project profitability.

4. Strengthening Financial Discipline

Following the resolution of the Companys legacy financial obligations, the Management will continue to maintain prudent financial management and disciplined cash-flow practices. The Company will focus on effective working capital management and align its future business commitments with its available financial and operational resources.

5. Selective and Sustainable Business Growth

The Company proposes to follow a prudent and selective approach towards business expansion, with emphasis on projects that are commercially viable, financially sustainable and aligned with its core competencies. The Company will evaluate opportunities with due consideration to project risks, execution requirements, funding needs, expected returns and cash-flow implications.

6. Leveraging Existing Capabilities and Relationships

The Company will continue to leverage its long-standing industry experience, technical capabilities, human resources and established relationships with government and institutional clients to participate in suitable infrastructure development opportunities across India. The Company will also seek to strengthen its market presence and develop new business relationships in its focus segments.

The Management remains optimistic about the Companys future prospects and believes that its successful exit from CIRP, completion of the OTS obligations, improving operational performance and more than five decades of experience in the infrastructure sector provide a strong foundation for the Companys next phase of growth. Going forward, the Company will remain focused on strengthening its order book, improving project execution and profitability, maintaining financial discipline and pursuing sustainable business expansion, with the objective of creating long-term value for all stakeholders.

RISKS & CONCERNS

The construction and infrastructure industry is exposed to various operational, financial, commercial and external risks that may affect project execution, costs and profitability. Key risks include increase in construction and project costs, delays in project completion, quality and performance of works, availability and cost of raw materials, availability of skilled and unskilled labour, changes in political and regulatory environment, and fluctuations in the cost and availability of capital.

Construction projects may also be affected by factors such as changes in project scope, statutory approvals, site conditions, availability of resources, supply chain disruptions and other circumstances beyond the Companys control. Such factors may have an impact on project timelines, working capital requirements and project margins.

The Company seeks to mitigate these risks through close monitoring of project execution, effective project management, cost control, timely procurement and resource planning, quality control and robust contract management. Particular emphasis is placed on identifying potential risks at the project level and taking timely corrective measures to minimise their impact.

While certain external risks cannot be completely eliminated, the Management believes that most of the operational and project-related risks are manageable through proactive monitoring, prudent project selection, effective contract management and disciplined execution. The Company continues to review and monitor these risks on an ongoing basis and takes appropriate measures to safeguard its operations and business interests.

Significant Changes in Key Financial Ratios

The following are significant changes in key financial ratios of FY 2025-26 as compared to previous year FY 2024-25 and reasons for such changes. The significant changes in the key financial ratios during FY 2025-26, as compared to FY 2024-25, are primarily attributable to the improvement in the Companys operational and financial position, resolution of its legacy financial matters and the impact of the exceptional item recorded during the year.

Overall, the movement in the key financial ratios during FY 2025-26 reflects the significant improvement in the Companys operational performance, strengthening of its financial position and resolution of its legacy financial matters. The Management continues to focus on improving operational efficiencies, strengthening cash flows, maintaining financial discipline and achieving sustainable improvement in the Companys financial performance.

HUMAN RESOURCES

The Company recognises that its employees are a key enabler of its sustainable growth and operational success. The Companys processes and systems are designed to empower employees, foster innovation and create a positive and inclusive workplace that encourages individuals to perform to their full potential and pursue opportunities for both professional and personal development.

The Company continues to focus on strengthening its human capital through initiatives aimed at talent acquisition, employee development, engagement, motivation and retention. The Management believes that developing the capabilities of its workforce and creating an environment that promotes ownership, collaboration and continuous learning are essential to achieving the Companys business objectives.

The Company also continues to focus on maintaining a healthy and supportive work environment, strengthening employee capabilities and aligning human resource initiatives with its evolving business requirements. As on March 31, 2026, the Company had 240 employees.

INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS

The Company has established internal control systems and processes commensurate with the size, scale and nature of its operations. The internal control framework is designed to provide reasonable assurance regarding the reliability of financial reporting, safeguarding of assets, compliance with applicable laws and regulations, operational efficiency and effective management of business risks.

Emphasis is placed on project monitoring, cost control, procurement, contract management, working capital management, receivables, cash flows and compliance with contractual and statutory requirements. The Company continues to strengthen its processes and systems to ensure appropriate controls are in place across its various operational and functional areas.

The Company follows defined processes for approval and authorisation of transactions, procurement and expenditure, financial reporting and project-related activities. Regular monitoring of project execution, costs, receivables and cash flows enables the Management to identify potential deviations and take timely corrective measures.

The Companys risk management framework is aimed at identifying, assessing and mitigating risks that may have an impact on its business operations and financial performance. Key risks relating to project execution, cost escalation, availability of resources, working capital, receivables, regulatory changes, contractual matters and market conditions are monitored on an ongoing basis. Appropriate mitigation measures are undertaken based on the nature and severity of the risks identified.

Following the Companys successful exit from the CIRP and completion of OTS obligations, the Management is placing continued emphasis on strengthening financial controls, cash-flow monitoring, cost discipline and compliance systems. The objective is to ensure that the Companys future growth is supported by appropriate financial and operational controls.

The Management periodically reviews the effectiveness of the internal control systems and processes and undertakes improvements wherever considered necessary. The Company remains committed to maintaining a robust control environment that supports transparency, accountability, operational efficiency and sustainable business growth.

The Audit Committee, wherever applicable, also reviews the adequacy and effectiveness of internal financial controls and the financial reporting process, in accordance with applicable statutory and regulatory requirements.

CAUTIONARY STATEMENT

This Management Discussion and Analysis Report may contain certain statements about the Companys future plans, expectations, growth prospects and performance. These statements are based on the Companys current understanding and expectations and are subject to various risks and uncertainties. Actual results may differ materially from those expressed or implied due to changes in economic conditions, government policies, regulations, market conditions, project execution, availability and cost of resources, competition and other factors beyond the Companys control.

The Company does not undertake to update or revise any forward-looking statements based on future developments or events. Readers are advised to exercise due caution and not place undue reliance on such statements.