ITD Cementation India Ltd Management Discussions

Company Overview

ITD Cementation India Limited (ITD Cem), with a legacy spanning over 90 years, is one of the leading companies in Indias engineering and construction sector, known for its technical expertise in executing complex infrastructure projects and commitment to excellence that supports Indias infrastructure growth. The Company operates across diverse infrastructure sectors, including maritime structures, urban infrastructure, metro rail, airports, highways, bridges, flyovers, industrial structures and buildings, hydro dams, tunnels, irrigation, water and wastewater, and foundation and specialist engineering projects with a focus on high-quality construction projects, speedy execution and robust partnerships to be recalled as a preferred construction partner. The Company is well-positioned to deliver complex infrastructure projects with a strong commitment to safety, quality, reliability, cost-effective sustainable practices and employee well-being that underpins the Companys operations in India and overseas, reinforcing its reputation as a trusted and forward-looking industry leader.

The global economy in 2024 exhibited uneven and fragile growth patterns as it emerged from a period of volatility and policy recalibration. While stabilisation was observed in some areas, including moderation in inflation and gradual recovery In Rs.abour markets, underlying risks persisted across major economies with renewed trade tensions and intensifying geopolitical uncertainty that have amplified financial market volatility, contributing to weaker equity markets and rising bond yields. Foreign direct investment flows weakened amid tighter global liquidity and heightened geopolitical risk, constraining funding for large-scale infrastructure and development initiatives.

According to International Monetary Fund (IMF), the world economy moderately expanded in 2024, with advanced economies showing subdued growth due to tight monetary conditions and ongoing global trade disruptions, while developing economies continued to drive global expansion led by domestic demand and investment.

Source: World Economic Outlook, IMF

The broader global economic outlook reflects a mix of headwinds and opportunities. While growth in advanced economies is expected to decelerate, emerging markets, particularly across Asia, are poised to remain key drivers of global growth.

The Indian economy demonstrated resilience with a stable outlook despite global uncertainties, supported by strong domestic demand, easing inflation and sustained public investment. Real GDP is projected to grow by 6.5% in FY 2024-25, with key contributions from construction, real estate, transport and financial services. Investment activity remains strong, bolstered by both public capital expenditure and private sector participation. The private consumption is expected to be bolstered by a rebound in rural demand, contributing significantly to GDP growth.

Indias estimated real GDP growth

Headline CPI inflation eased to 3.3% in March 2025, the lowest in five years, primarily due to declining food prices, providing the room for RBI to provide accommodative monetary policy. The RBI has implemented consecutive interest rate cuts, bringing the benchmark rate to 6%, aiming to stimulate economic growth amid global uncertainties. The liquidity tools including variable-rate repo operations, have been deployed by the RBI to manage short-term mismatches. The financial system remains sound, with continued infrastructure financing from banks and NBFCs signalling confidence in Indias long-term growth potential. The unemployment rate declined to 3.2%, indicating improvements In Rs.abour market conditions. While the economic landscape presents challenges, Indias structural strengths, such as a young demographic, an expanding digital economy and ongoing infrastructure development with easing inflation and supportive policies, created a favourable investment environment. ITD Cem is committed to navigating any challenges and opportunities through proactive planning, operational resilience and effective project management, ensuring timely and budget-compliant delivery of high-quality infrastructure solutions.

Indias construction sector maintained a strong momentum propelled by large-scale public investment, growing infrastructure demand and a steady pipeline of urban development projects. The sector remains a critical driver of capital formation and employment generation, contributing significantly to the nations broader economic growth trajectory.

The Union Budget 2025–26 reaffirms the governments focus on infrastructure-led development, earmarking I 11.21 Lakhs Crores, 3.1% of GDP for capital expenditure. An additional I 1.5 Lakhs Crores ($17.3 billion) has been allocated as 50-year interest-free loans to states, aimed at enhancing regional infrastructure execution and expediting critical capital works.

Allocated to infrastructure in Budget 2025–26, equal to 3.1% of GDP

The Index of Eight Core Industries (ICI), representing about 40% of Indias industrial output, recorded a 4.4% y-o-y growth for fiscal year 2024–25, primarily due to strong performances in cement, steel and electricity production. Private and foreign investment remains steady, underscoring sustained confidence in the nations long-term growth path. Cumulative FDI in construction

development and infrastructure surpassed

$1 Trillion highlighting Indias appeal as a key global investment destination.

Following the success of the initial Asset Monetisation Plan launched in 2021, the government unveiled a second phase in the Union Budget 25-26, aiming to generate I 10 Lakhs Crores from 2025-2030 by monetising government assets and reinvesting the proceeds into infrastructure projects, thereby promoting capital recycling and enhancing investment in essential infrastructure sectors. Indias construction sector is poised for growth due to a stable policy environment, rapid urbanisation and ongoing capital investment. Key initiatives like PM Gati Shakti and the National Infrastructure Pipeline will stimulate further development by improving connectivity, expediting project delivery and strengthening economic resilience, thereby presenting ITD Cem with significant opportunities to enhance its contributions to infrastructure development and achieve sustainable growth.

Indias maritime sector remains a cornerstone of its economic development and global trade connectivity. With a coastline of 7,517 kilometres, 13 major ports, over 200 non-major ports and strategic access to key global shipping routes, India handles approximately 95% of its trade by volume and around 70% by value through maritime transport.

The sector plays a pivotal role in supporting Indias aspirations for economic growth, regional influence and security. Indias maritime industry is undergoing rapid transformation driven by comprehensive policy reforms, private sector participation and significant infrastructure modernisation programmes such as Sagarmala and Maritime India Vision 2030. The goal is to expand port capacity to more than 3000 MTPA, Indian flagships carry 15-20% of Indias EXIM trade, position India amongst the top 5 shipbuilding nations, shift 5% of cargo from road/ rail to waterways, have 50% of major ports powered by renewables and develop 5 major cruise hubs.

India is strategically investing in becoming a leading maritime power by 2030, enhancing its port capacity, logistics efficiency, shipbuilding strength and maritime services. The sector is well-positioned to support Indias broader economic ambitions and strengthen its role as a key player in the Indo-Pacific region. Maritime Structures is the Companys largest vertical, contributing I 6,323 Crores or 35% of the order book as of March 2025. The Companys strong execution record in maritime structures with capability in deep-water jetties, port reclamation, naval infrastructure and international coastal development aligns with Companys strategy for strengthening its role in port-driven infrastructure with sustainable maritime solutions. Domestic projects under execution include:

Balance Outer Harbour Works, Andhra Pradesh

Near-Shore Reclamation and Shore Protection for the Greenfield Vadhvan Port, Dahanu, Maharashtra

Third Berth (Jetty) at Dahej LNG Terminal, Gujarat

Piers, landside tunnels and buildings in Karwar, Karnataka

Marine infrastructure works at Udangudi, Tamil Nadu.

International projects under execution include:

Marine infrastructure project in Bangladesh.

West Container Terminal at the Port of Colombo, Sri Lanka.

Indias industrial structures and buildings sector witnessed steady growth in FY 2024-25, fuelled by strong construction activity and robust demand across key manufacturing industries. The industrial sector is projected to grow by 6.2%, driven by significant advancements in electricity, infrastructure and construction. Government-led initiatives in housing, highways, railways and rural infrastructure continue to drive demand for industrial-scale construction. In 2024, the construction sector grew by 7.8% in real terms, backed by investments from both public and private sectors and government-led initiatives such as the National Infrastructure Pipeline and the Make in India campaign aimed at enhancing the countrys infrastructure. The outlook remains positive as ongoing regulatory reforms and technological advancements are further expected to boost efficiency and project execution. Industrial Structures and Buildings is the second largest business area for the Company, contributing I 4,473 Crores, or 24% of the order book as of March 2025. Major projects under execution include:

Multi-storeyed commercial building in Uttar Pradesh

Redevelopment of residential colony at Kasturba Nagar, New Delhi – Phase I & II

Piling and civil works for the Coke Oven Project at the Hazira plant, Gujarat

Construction of the Circuit Bench of the Calcutta High Court, West Bengal

Civil & Related Works at Iron Ore Mine in Odisha

Indias metro rail and airport infrastructure sectors made significant advancements in this fiscal, supported by ongoing government funding and initiatives under the PM Gati Shakti Master Plan and the National Infrastructure Pipeline. The metro network surpassed 1,000 km across 23 cities, establishing India as the third largest globally, with an additional 998 km under construction, in major urban areas like Delhi, Mumbai, Bengaluru, Surat, Kanpur and Patna. Key milestones include the inauguration of Indias first underwater metro tunnel in Kolkata and the operational launch of the Namo Bharat corridor, marking the countrys entry into high-speed regional transit. The Union Budget 2025–26 allocated I 31,239 Crores for metro projects, a 46% increase from the previous year, alongside a proposed five-year plan to double the metro network, with a strategic focus on Tier II and III cities. The aviation sector maintains momentum through initiatives to improve regional connectivity and build sustainable infrastructure. Under the UDAN scheme, 102 new air routes were launched, including 20 in the Northeast. The government aims to develop 50 new airports and connect 120 additional destinations over the next decade. Site clearance was granted for nine new greenfield airports in Tamil Nadu, Odisha, Assam and Karnataka.

The rapid expansion of infrastructure, coupled with enhanced policy support, presents substantial long-term prospects for construction and engineering companies. The rise of public-private partnerships, growing emphasis on sustainability and the need for integrated transport systems are anticipated to generate demand in metro station development, tunnelling, airside and terminal construction and smart infrastructure innovations. Metro rail and airports are set to play a pivotal role in Indias urbanisation, regional development, and economic advancement, providing a strong pipeline of high-value, technically intensive projects nationwide.

The Company, over the years, has established expertise in urban transport infrastructure, encompassing both underground and elevated metro systems along with airport modernisation projects. This sector is currently contributing I 3,294 Crores or 18% of the order book as of March 2025.

Mass Rapid Transit System (MRTS) projects under execution include:

Underground tunnelling and station work for metros in Chennai, Bengaluru, Mumbai and Kolkata

Elevated metro stations and buildings in Kolkata

Depot building in Surat

Airport infrastructure projects under execution include:

Modification and refurbishment of terminal buildings at Ahmedabad Airport

Indias road transport sector has experienced significant transformation over the past decade, driven by consistent public investment and strategic policy reforms. The National Highways network has grown from 91,287 km in 2014 to 146,195 km in 2024, vastly improving regional and national connectivity. In the Union budget 2025-26, the Government has allocated I 1.16 Lakhs Crores for the roads and highways sector. NHAI plans to construct 10,000 km of highways in FY 2025-26. The Government continued focus on sustainable development, technological integration and efficient project execution positions this sector as a pivotal enabler of economic growth and presents strategic opportunities for the Company to contribute to high-impact, next-generation transport infrastructure. The Company is enhancing its expertise in elevated structures including highways, bridges and flyovers with an order book of I 1,545 Crores, or 8% of the order book as of March 2025 thereby supporting highway infrastructure initiatives.

The Company is currently constructing a six-lane road project in Uttar Pradesh.

Indias focus on expanding its hydrodams, tunnels and irrigation infrastructure reflects its commitment to sustainable development and energy security. Recognised for its role in integrating intermittent renewable sources, pumped storage projects are gaining traction as a means to ensure grid stability. Bharatmala Pariyojana initiative by the Government includes major tunnel projects to enhance connectivity in hilly regions. Accelerated Irrigation Benefit Programme supports timely completion on major irrigation projects and supports large dams and associated irrigation works. These advancements offer significant opportunities for ITD Cem in critical water infrastructure, hydropower systems and tunnel construction, particularly in geographically challenging locations. This business area is contributing I 1,634 Crores, or 9% of the order book as of March 2025.