GPT Infraprojects Ltd Management Discussions

According to the IMFs World Economic Outlook (April 2026) the global economy continues to demonstrate resilience but faces renewed challenges due to the ongoing conflict in the Middle East.

Key Projections:

• Global Growth: Projected to slow to 3.1% in 2026 and 3.2% in 2027.

• Global Inflation: Expected to rise modestly to 4.4% in 2026 before declining to 3.7% in 2027.

• Advanced Economies are projected to grow at 1.8% in 2026, while Emerging Market and Developing Economies are expected to expand at 3.9%.

Risk Assessment:

Risks to the outlook are decisively tilted to the downside. A prolonged or escalated conflict could lead to much weaker growth (as low as 2.0% -2.5%) and significantly higher inflation. Other risks include deeper geopolitical fragmentation and renewed trade tensions.

Indian Economy

Indias economy delivered a strong performance in FY26, creating one of the most favourable environment for residential real estate in recent years. Sustained GDP growth, significantly lower inflation, and an accommodative monetary policy cycle together enhanced household purchasing power and boosted rural demand.

GDP Growth

As per the Second Advance Estimates (base year 2022–23), real GDP grew at 7.6% in FY26, up from 6.5% in the previous year. Nominal GDP stood at Rs.357.14 lakh crore, reflecting 8.0% growth. Private Final Consumption Expenditure grew by 7.0%, while Gross Fixed Capital Formation expanded by 7.8%. The construction sector recorded healthy GVA growth of 7.2%, supported by continued government infrastructure spending and rising private sector investments.

Inflation and Purchasing Power

Headline CPI inflation moderated sharply to an average of 1.7% in the second quarter of FY26 — the lowest since the current series began. Full-year CPI inflation for FY26 is estimated at 3.5%, well within the RBIs comfort zone. This benign inflation has meaningfully improved real household incomes and eased cost pressures for industries.

Outlook

For FY27, the Reserve Bank of India (RBI) has projected real GDP growth at 6.9%, with average retail inflation expected to remain moderate at 4.6%. The Union Budget has increased capital expenditure outlay to Rs.12.20 lakh crore, signalling continued government thrust on infrastructure and economic momentum.

While global growth is expected to moderate, India continues to exhibit strong structural resilience, underpinned by robust domestic demand, healthy corporate and banking balance sheets, and ongoing reforms. However, the growth outlook remains subject to downside risks, including escalation of geopolitical tensions in West Asia, elevated crude oil prices, potential re-acceleration of inflation, and uncertainty arising from global trade tariffs and supply chain disruptions.

Indian Infrastructure Industry

Indias infrastructure sector continues to remain one of the most important pillars of the countrys economic growth, with sustained investments across roads, railways, urban infrastructure, logistics, energy, water, digital infrastructure and industrial corridors. The sector acts as a direct catalyst for construction activity while also enabling allied sectors such as manufacturing, logistics, housing, real estate and urban development. Indias infrastructure development agenda is increasingly moving from asset creation alone to integrated, multi-modal and productivity-led infrastructure creation.

INDIAS NEXT GROWTH ENGINE: INFRASTRUCTURE EXPANSION AT MASSIVE SCALE

The Governments continued focus on infrastructure-led growth is reflected in the scale of planned investments. India is expected to spend nearly Rs.143 lakh crore on infrastructure over seven fiscals through 2030, more than double the approximately Rs.67 lakh crore spent in the previous seven-year period. Infrastructure investment is also expected to increase from 5.3% of GDP in FY24 to 6.5% of GDP by FY29, reflecting the sectors central role in Indias long-term growth agenda.

The National Infrastructure Pipeline, PM Gati Shakti National Master Plan, National Logistics Policy, Bharatmala Pariyojana, metro rail expansion and railway modernisation are together reshaping Indias infrastructure landscape. The NIP project count has expanded to 9,142 projects across 34 sub-sectors, with under-development projects carrying an estimated investment of US$ 1.9 trillion. Nearly half of these projects are in the transportation sector, with roads and bridges remaining a major sub-segment.

Roads and railways continue to be among the largest opportunity areas. Indias National Highways network expanded to 1,46,342 km in FY25, with 10,660 km constructed during the year. Indian

Railways also recorded freight loading of over 1.61 billion tonnes in FY25, reflecting continued growth in logistics and freight movement. Indias logistics market is projected to grow from

Rs.19,53,732 crore in 2024 to Rs.36,73,530 crore by 2033, at a CAGR of 6.5%.

Urban infrastructure is emerging as the next large growth frontier. Indias metro rail network has expanded significantly, with operational networks across multiple cities and further expansion underway. Alongside mass transit, the growing requirement for water, sanitation, waste management, urban mobility, drainage, flood management and climate-resilient infrastructure is expected to create sustained opportunities for engineering and construction companies.

For companies such as GPT Infraprojects Limited, the operating environment remains structurally favourable. The thrust on transportation, bridges, railway infrastructure, urban infrastructure and multi-modal logistics supports a strong medium to long-term project pipeline. However, execution quality, working capital discipline, timely clearances, commodity price movement and competitive bidding intensity will continue to influence sector performance.

Union Budget 2026-27: Infrastructure Push

The Union Budget 2026-27 reinforced infrastructure as a central pillar of Indias economic growth strategy. The Government increased the capital expenditure allocation for FY27 to Rs.12.2 lakh crore, equivalent to nearly 3.1% of GDP, continuing the strong public investment momentum built over the past decade. The sustained focus on infrastructure spending reflected the Governments intent to strengthen economic activity, improve logistics efficiency and enhance long-term competitiveness.

The Budget placed significant emphasis on transport and logistics infrastructure. Key announcements included the development of a new Dedicated Freight Corridor, operationalisation of 20 National Waterways, establishment of ship-repair clusters in Varanasi and Patna, and the introduction of a Coastal Cargo Promotion Scheme to encourage cost-e_cient freight movement through inland and coastal waterways. These measures were aimed at strengthening Indias multi-modal logistics ecosystem and reducing overall logistics costs.

Urban and regional infrastructure development also remained a key focus area. The Budget introduced the concept of City Economic Regions (CERs) across Tier-2 and Tier-3 cities, supported by an outlay of Rs.5,000 crore per CER over five and Infrastructure Risk Guarantee Fund (IRGF) to provide partial credit guarantees to mitigate early-stage construction risks and boost private sector participation.. In addition, seven high-speed rail corridors connecting major economic centres were proposed to improve regional connectivity and facilitate economic decentralisation. These initiatives were expected to support urbanisation, industrial growth and regional infrastructure development across emerging economic hubs.

The Budget also focused on improving private sector participation and long-term financing mechanisms for infrastructure development. Measures such as the proposed Infrastructure Risk Guarantee Fund and monetisation of CPSE real estate assets through REIT structures were introduced to improve capital mobilisation and enhance investor participation in infrastructure assets.

Company overview

GPT Infraprojects Limited, the flagship company of the GPT Group, is a rapidly growing infrastructure construction company headquartered in Kolkata. The Company operates through two core business segments - Infrastructure and Concrete Sleeper. Its Infrastructure division undertakes EPC projects with a strong focus on railway-led engineering and civil construction works, including large bridges, road over bridges (ROBs) and allied infrastructure projects for railways and roads, primarily catering to Central Government agencies. Complementing this is its Concrete Sleeper business, which has evolved into a globally scaled manufacturing platform engaged in the production and supply of concrete sleepers for railway networks across India and Africa.

With manufacturing facilities spread across India, South Africa, Namibia and Ghana, the Company has established a differentiated international presence in the niche railway infrastructure manufacturing segment.

GPT Infraprojects Limited operates under two major segments: a. construction and maintenance of railway bridges, road construction and railway track installation. b. manufacture of concrete sleepers.

Segment wise performance is shown below:

The Companys revenue in infrastructure division for the FY26 is increased when compared to previous years on account of contracts received from railway authorities and other regulatory bodies. Some of the Key contracts received by the Company are in the city of Kolkata, Varanasi, Jodhpur and Mumbai.

The Companys revenue in concrete sleeper division for the FY26 is increased when compared to previous years on account of new orders received by Companys unit at Panagarh, South Africa, Namibia and Ghana.

Financial and Operational Performance of the Company

The Companys performance during the year was supported by strong project execution, improved operational efficiencies, prudent cost management, and highest order inflows in the history of the Company.

Key financial ratios

Strong and diversified order book providing multi-year revenue visibility.

Proven execution capabilities in railway infrastructure, bridges, ROBs and complex EPC projects.

Diversified business model across Infrastructure EPC and Railway Concrete Sleeper Manufacturing segments. Established international presence across India, South Africa, Namibia and Ghana.

Strong client relationships and Joint Venture Partnerships

Significant dependence on government and public sector infrastructure spending.

Working capital-intensive nature of EPC operations. Exposure to project execution timelines and regulatory approvals.

Sustained investments in railways, logistics and transportation infrastructure.

Expansion into railway signalling and other specialised infrastructure segments.

Growing opportunities across African infrastructure markets.

Increasing demand for multi-modal connectivity and bridge infrastructure projects.

Public-private partnership opportunities. Urban infrastructure and smart city development.

Intensifying competition from larger and diversified EPC players.

Volatility in raw material and input costs.

Delays in land acquisition, approvals and project execution. Changes in government policies or infrastructure spending priorities.

Execution risks due to weather disruptions.

Outlook

GPT Infraprojects Limited remains well positioned to capitalise on Indias infrastructure growth opportunity, supported by a diversified order pipeline, strong execution capabilities and a growing presence in railway-led infrastructure. The Company continues to focus on larger and technically complex projects across railways, bridges, ROBs and allied EPC segments, while expanding into specialised areas such as railway signalling and strengthening its international footprint.

Going forward, the Company will continue to emphasise disciplined project selection, execution excellence, margin improvement and prudent working capital management. Backed by its engineering expertise, manufacturing capabilities and sustained investments in transportation and logistics infrastructure, GPT Infraprojects remains focused on delivering The Companys expansion into high-margin railway signalling will strengthen its market presence and enable to Company to capture a meaningful share of future high-value opportunities. The Company will remain committed to sustainable development and responsible business practices, integrating Environmental, Social, and Governance (ESG) principles into its business strategy and operations..

Internal Control Systems and Their Adequacy

The Company has established an adequate internal control framework commensurate with the nature and scale of its operations, aimed at ensuring operational efficiency, safeguarding of assets, reliability of financial reporting and compliance with applicable laws and regulations. Leveraging integrated SAP-based systems, the Company continues to strengthen process controls, transparency and operational effectiveness across key business functions. The internal audit function conducts periodic risk-based audits, with findings and recommendations reviewed by the Audit Committee to facilitate continuous improvement. The Audit Committee, comprising Independent Directors, oversees the effectiveness of the internal control and audit systems, and during the year under review, no material weaknesses were observed in the design or operating effectiveness of the Companys internal control framework.

Human Resource

GPT Infraprojects Limited considers its employees as a key driver of operational excellence and long-term growth. The Company continues to foster a collaborative, performance-driven and safety-oriented work environment while focusing on skill development, employee engagement and capability enhancement across functions.

The Company invests in training and leadership development initiatives to strengthen workforce productivity and execution efficiency. Structured performance management practices, employee welfare initiatives and a focus on inclusive workplace practices continue to support talent retention and organisational growth.

As on March 31, 2026, the Company had a total workforce of 1,026 employees.

Cautionary Statement

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may be ‘forward-looking statements within the meaning of applicable securities laws & regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand, supply, and price conditions in the domestic & overseas markets in which the Company operates, changes in Government regulations, tax laws & other statutes, and other incidental factors. The Company assumes no responsibility in respect of forward-looking statements, which may be amended or modified in the future.