J Kumar Infraprojects Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS </dhhead>

Economic Overview

GLOBAL ECONOMY

In 2024, the global economy continued to operate within a complex and evolving environment, shaped by persistent geopolitical tensions, dynamic market realignments, and ongoing structural adjustments. Global GDP growth moderated to 3.3% year-over-year (YOY), reflecting a cautious stance by policymakers and businesses amid sustained uncertainty. The United States remained a principal driver of global growth, supported by a resilient labour market and firm domestic consumption, while the Eurozone faced persistent structural inefficiencies, notably within energy-dependent sectors. Advanced economies expanded by 1.8% YOY, whereas Emerging Market and Developing Economies (EMDEs) demonstrated stronger resilience with 4.3% growth, led predominantly by India and Southeast Asia, fuelled by robust consumer demand, accelerated digital adoption, and significant infrastructure development.

Momentum in renewable energy investment and clean technology deployment strengthened, underscoring a heightened global commitment to climate objectives. Meanwhile, China’s recovery continued but remained fragile, constrained by structural challenges in the property sector and softer external demand. Geopolitical tensions, climate-related disruptions, and increasing trade fragmentation persisted as significant downside risks to the global growth outlook.

Global Economic Growth (%)

Looking forward to 2025, the global economic landscape is expected to reflect a delicate equilibrium between emerging risks and potential opportunities, driven by evolving trade patterns and adaptive policy strategies. Advanced economies are forecasted to achieve inflation targets ahead of schedule, while EMDEs, particularly China and India, are anticipated to sustain strong growth momentum. Nevertheless, escalating trade tensions, including new U.S. tariffs and reciprocal measures, could intensify inflationary pressures and dampen global economic activity. Notwithstanding these challenges, technological innovation and strategic policymaking are poised to reinforce economic resilience. Concurrently, the global pivot towards renewable energy is projected to further support employment generation, lower energy costs, and strengthen long-term energy security.

Global GDP is projected to grow by 2.8% YOY in 2025 and accelerate modestly to 3.0% in 2026. Advanced economies are expected to record growth of 1.4% and 1.5% in 2025 and 2026 respectively, while EMDEs are forecasted to expand by 3.7% and 3.9%. This outlook reflects the sustained influence of globalisation and supportive policy frameworks in enabling sustainable and inclusive growth across regions.

(Source: International Monetary Fund April 2025 report)

INDIAN ECONOMY

India retained its standing as one of the fastest-growing major economies globally in FY 2024-25, supported by resilient domestic demand, favourable demographics, ongoing structural reforms, buoyant GST collections, and expansion in manufacturing, infrastructure, and digital sectors. Nevertheless, global economic headwinds contributed to a moderation in growth, with GDP expanding by 6.5% YOY, down from 9.2% recorded in the previous fiscal year. The deceleration primarily stemmed from softening manufacturing output, elevated food inflation, subdued urban consumption, sluggish employment creation, a widening trade deficit, and tempered private investment.

Headline inflation, as measured by the Consumer Price Index (CPI), is projected to ease from 4.9% in FY 2024-25 to 4.0% in FY 2025-26, offering respite to consumers and policy frameworks alike. Despite short-term pressures, Indias medium-term growth trajectory remains robust, underpinned by solid manufacturing performance, expanding services activity, heightened infrastructure spending, and proactive government initiatives aimed at enhancing digital capabilities, promoting financial inclusion, and improving the ease of doing business. Strategic efforts to diversify trade partnerships through new free trade agreements (FTAs) have helped mitigate external vulnerabilities, while rapid urbanisation and an expanding middle class continued to support strong consumption growth.

Persistently high global commodity prices and supply chain disruptions elevated inflationary risks, prompting the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) to adopt a more accommodative stance. The MPC implemented two successive 25 basis points repo rate reductions since February 2025, bringing the policy rate to 6.0% as of April 2025, with the intent of bolstering domestic economic recovery amid external volatility.

Looking ahead, India’s economic outlook remains favourable, with GDP growth forecast to maintain a steady 6.5% YOY in FY 2025–26. Key growth enablers include a youthful and expanding population, accelerating urbanisation, and continued government investment across digital, regulatory, financial, and physical infrastructure.

(Sources: MOSPI NSO Report, RBI Monetary Policy Committee Report, Press Information Bureau)

INDIAN INFRASTRUCTURE INDUSTRY – POSITIONED FOR ACCELERATED GROWTH

Indias infrastructure sector demonstrated sustained growth throughout FY 2024-25, bolstered by significant public investment, progressive reforms, and efficient execution across transportation, urban development, and logistics. As a central pillar of the nations economic strategy, infrastructure saw capital expenditure maintained at 11.11 lakh crore, constituting 3.4% of GDP. Despite some delays in capital deployment, influenced by election-related spending constraints, critical sectors recorded substantial progress, setting a strong foundation for India’s medium-term growth trajectory.

India is now home to the world’s second-largest road network, with national highways stretching to nearly 1,46,000 km in 2024, marking a 60% increase since 2014. In urban transit, the country’s metro rail networks surpassed 1,000 km in cumulative length by 2025, positioning India’s metro systems as the third-largest globally.

Transportation Infrastructure Advancements

The road infrastructure sector saw significant progress, with the National Highway network expanding under the Bharatmala Pariyojana initiative. By February 2025, over 19,826 km of highways were completed. The National Highways Authority of India (NHAI) surpassed its construction targets, adding 5,614 km of highways, a 9% increase over the previous year. NHAI’s capital expenditure reached a record 2.5 lakh crore, largely driven by expressway development projects. Rural connectivity was notably enhanced through the Pradhan Mantri Gram Sadak Yojana (PMGSY), which completed 7,71,950 km of rural roads by FY 2024-25, significantly improving last-mile connectivity and fostering rural economic integration. The PM Gati Shakti National Master Plan further streamlined project execution, enabling 208 critical infrastructure projects worth 15.39 lakh crore to progress smoothly.

Urban Transport and Infrastructure Growth

Urban transportation saw marked advancements, especially in metro rail and mass rapid transit systems. By 2024, nearly 945 km of metro rail lines were operational across 21 cities, up from just ~248 km in 5 cities in 2014. In addition, 919 km of metro tracks were under construction in 26 cities, further enhancing urban connectivity. The Government allocated 24,785.94 crore to metro and mass rapid transit development, fueling the expansion of urban transport infrastructure. Alongside this, initiatives such as the Smart Cities Mission, Urban Challenge Fund, and Jal Jeevan Mission are propelling sustainable urbanisation and improving mobility.

Railways – Modernisation, Connectivity, and Green Transition

Indian Railways remained a vital driver of connectivity and economic growth in FY 2024–25, supported by a record capital outlay of 2.62 lakh crore focussed on capacity, electrification, safety, and service upgrades. The network spans 68,584 km of route length and 1,35,207 km of total track, with 97.05% of the broad-gauge network electrified.

Freight volumes reached an all-time high of 1,617 million tonnes, aided by the commissioning of 2,741 km of Dedicated Freight Corridors. With full DFC operationalisation expected by FY 2025-26, and expansion through new trains, safety tech, and private participation, Indian Railways is set to lead Indias shift toward faster, greener, and more efficient mobility.

Construction Activity and Future Prospects

The National Infrastructure Pipeline (NIP) has been a key enabler for transportation, energy, logistics, and urban infrastructure projects. Urban development, including flyovers, bridges, and multimodal hubs, gained momentum thanks to sustained capital allocations and improved project execution capabilities, supported by digital project management and private sector involvement.

Way Forward

India’s infrastructure sector is set for strong growth in FY 2025-26, driven by continued public investment, rapid urbanisation, and a push for sustainable, multimodal connectivity. The Government plans to build at least 50 km of highways per day, aiming to reach 100 km daily in the long run. By year-end, over 14,000 km of new highways, including expressways and economic corridors are expected to be completed.

High capital expenditure will continue, focussing on greenfield expressways, metro expansions, regional transit, and decongesting cities. These efforts are vital to India’s $5 trillion economic goal, improving logistics, competitiveness, and quality of life.

Still, challenges persist. Delays, complex regulations, and approval hurdles can stall progress. To maintain momentum, India must streamline approvals, ensure transparent governance, and strengthen execution. A stable regulatory environment and proactive policy support will be key to attracting private and foreign investment and driving sustained growth.

(Source: PIB Press Release, Union Budget, NHAI, Ministry of Housing and Urban Affairs)

Share of various segments in Indian infrastructure investments

FLAGSHIP GOVERNMENT PROGRAMMES CATALYSING INFRASTRUCTURE GROWTH

The Indian government’s programmatic approach to infrastructure development has been instrumental in driving long-term, large-scale transformation across key sectors. Some of the most impactful initiatives include:

1. National Infrastructure Pipeline (NIP)

Launched in 2020, the NIP is a foundational initiative targeting accelerated infrastructure development across energy, transport, water, and urban sectors. Co-funded by central, state, and private players, the NIP is central to India’s $5 trillion economy ambition, contributing to job creation, economic resilience, and global competitiveness. As of March 2025, completed investments amounted to 31.1 trillion, achieving 28% of the original target, and ongoing projects valued at 83.54 trillion showing the total achievement reaching 103% of the original target.

2. PM Gati Shakti – National Master Plan

Introduced in 2021, Gati Shakti integrates infrastructure planning across 16 ministries via a unified digital platform. By FY 2024-25, 208 strategic projects worth 15.39 lakh crore are under active evaluation, supported by over 1,600 mapped data layers to enable synchronised, investment-ready development.

3. Bharatmala Pariyojana

Focussed on enhancing road and freight infrastructure, Bharatmala aims to develop 26,000 km of economic corridors, which, alongside the existing Golden Quadrilateral and North-South and East-West corridors, are projected to carry the majority of the nations freight traffic. As of February 28, 2025, significant progress has been made: out of a planned 34,800 km, 26,425 km of projects have been awarded, and 19,826 km have already been constructed. The total expenditure incurred under this initiative stands at 4,92,562 crore. Specifically for high-speed greenfield corridors, 6,669 km have been awarded, with 4,610 km completed as of February 2025. A key component of Bharatmala is the development of 35 Multimodal Logistics Parks (MMLPs), with a combined investment target of approximately 46,000 crore. Once operational, these MMLPs are projected to handle ~700 million metric tonnes of cargo.

4. Sagarmala Programme

Since its inception in 2015, Sagarmala has driven port modernisation, coastal shipping, and inland waterway development. As of March 2025, 272 of 839 projects (1.41 lakh crore) have been completed. The Sagarmala 2.0 phase aims to attract 12 lakh crore in investments, with a strong focus on shipbuilding, recycling, and innovation through the newly launched Sagarmala Startup Innovation Initiative (S2I2).

Indias demographic shifts underscore this demand, with metropolitan cities projected to increase from 46 in 2011 to 68 in 2030, and the workforce expected to reach 0.64 billion_by_2030

GROWTH DRIVERS OF INDIA’S INFRASTRUCTURE INDUSTRY

India’s infrastructure landscape is experiencing transformative growth, driven by a combination of sustained policy support, capital inflows, and rising demand from urbanisation and industrial activity. Key structural drivers include:

1. Policy-led Capital Allocation

The Union Budget 2025-26 earmarks 11.21 lakh crore (3.1% of GDP) for infrastructure - a record-high outlay reinforcing the sector’s pivotal role in economic growth. This includes focussed allocations of 2.87 lakh crore for roads and 2.65 lakh crore for railways, enhancing connectivity and logistics efficiency.

2. Urbanisation and Industrial Expansion

Rapid urbanisation and increasing industrial output are generating consistent and escalating demand for modern transport systems, sophisticated logistics networks, housing, and essential utilities, thereby, propelling sustained infrastructure investment across urban and semi-urban geographies. Indias demographic shifts underscore this demand, with metropolitan cities projected to increase from 46 in 2011 to 68 in 2030, and the workforce expected to reach 0.64 billion by 2030, with a growing share of urban employment. The Government aims to increase the urban populations contribution to Indias GDP from 63% to 75% by FY 2029-30 through sustainable construction practices in urban areas.

3. Private Sector and Global Capital Participation

Favourable PPP frameworks and liberalised FDI policies are unlocking capital inflows from private and institutional investors. Monetisation of brownfield assets and hybrid models are expanding financing avenues and project scope.

4. Digital and Green Infrastructure Push

The growing focus on sustainable and digital assets, including renewable energy, EV charging networks, smart cities, and broadband expansion - is reshaping infrastructure priorities, aligning with Indias climate goals and digital economy aspirations.

5. Reform-oriented Execution Environment

Structural reforms around land acquisition, environmental clearances, and digital project monitoring have improved the ease of doing infrastructure business, accelerating approvals and reducing execution risks.

ABOUT THE COMPANY

J. Kumar Infraprojects Limited (hereafter referred as ‘JKIL’ or ‘the Company’) is an ISO 9001:2015, ISO 14001:2015, and OHSAS 18001:2007 certified company, exemplifying the unwavering commitment of the Company to top-tier quality, environmental responsibility, and the health and safety of its workforce. As one of the select few construction firms qualified to undertake large metro projects across India, the Company has solidified its leadership in transportation engineering. Its success is driven by a strategic business approach, a proven history of delivering complex projects, a highly-skilled team, and unparalleled industry experience. The Company has been consistently ensuring project completions within a timeline of three to five years, ensuring timely and efficient execution at every stage.

Metros Infrastructure

Metro projects (underground and elevated) form the biggest chunk of JKIL’s revenue mix. As of March 31, 2025, metros accounted for 39% of the total revenue in FY 2024-25.

ORDER WINS FY 2024-25

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( crore)

Particulars	Authority
Elevated road in Thane city from Anand Nagar to Saket on Eastern Express Highway	MMRDA	1,848
Development of Hari Nagar Colony of Delhi Transport Corporation (DTC)	NBCC	521
Development of Silicon City Phase -IV Group Housing, including allied works at Plot No. GH 01	NBCC	910
A, Sector-76, Noida (UP) on Design, Engineering, Procurement and Construction (EPC) basis
Design & Construction of Coastal Road from Jalmarg Sector	CIDCO	1,021
Mula river Wakad bypass to Sangvi bridge from M/s. Pune Municipal Corporation	PMC	298
Construction of Major Bridges (Br. 66, 72 & 78), ROB at Vasai,	MVRCL	102
Total		4,700

FINANCIAL REVIEW

Financial performance

Particulars	FY2024-25	FY2023-24
Revenue from Operations	5,693	4,879
Cost of Material Consumed	3,751	3,170
Construction Expenses	608	550
Employee Expenses	413	369
Other Expenses	95	86
EBITDA	826	704
EBITDA Margin %	14.5%	14.4%
Other Income	33	28
Depreciation	169	168
EBIT	691	564
EBIT Margin	12.1%	11.6%
Finance Cost	155	124
Profit before Tax	535	441
PBT Margin %	9.4%	9%
Tax	145	112
PAT	390	329
PAT Margin %	6.9%	6.7%
Cash PAT	559	497
Cash PAT Margin %	9.8%	10.2%

Key performance ratios

Particulars	FY2024-25	FY2023-24
Debt-equity ratio (x)	0.23	0.22
ROCE (%)	20.0	18.6
ROE (%)	13.8	13.2
Working capital cycle (days)	112	123
Debtor turnover cycle (days)	96	89
Inventory turnover cycle (days)	70	77
Creditor turnover cycle (days)	54	44
Asset Turnover (x)	5.55	5.15
Interest cover (x)	4.45	4.56
Return on gross block (%)	17.50	16.98

RISK MANAGEMENT APPROACH

In FY 2024-25, JKIL further reinforced its proactive risk management framework to efficiently identify, assess, and address potential risks. By embedding risk management across all levels of the organisation, JKIL has ensured that potential threats are swiftly mitigated, minimising the likelihood of loss and enhancing decision-making processes.

RISK MANAGEMENT FRAMEWORK

The Risk Management Committee, comprising 3 Board members with diverse expertise, plays a critical role in overseeing and addressing key risks. The Committee is responsible for devising and executing mitigation strategies, ensuring risks are managed effectively across all functions.

JKIL’s risk management process follows a structured approach:

• Identification of potential risks.

• Evaluation and assessment of risks.

• Formulation of mitigation strategies.

• Ongoing monitoring and tracking.

• Strong governance to ensure effectiveness.

KEY RESPONSIBILITIES OF THE RISK MANAGEMENT COMMITTEE

• Reviewing and approving credit proposals in alignment with risk management and credit policies.

• Providing guidance and oversight in identifying current and emerging risks.

• Developing and refining risk assessment tools and methodologies.

• Implementing and overseeing policies, procedures, and controls to manage identified risks.

• Monitoring and ensuring the effective application of risk management standards and practices, especially regarding credit decisions.

• Regularly reporting risk monitoring results and credit assessments to senior management and the Board.

RISKS	IMPACTS	MITIGATION MEASURE
ECONOMIC RISK	A slowdown in the economy could impact overall business operations and project timelines.	With the Governments ongoing focus on infrastructure development, the Company is positioned to not only maintain momentum but also drive improved performance in the coming years.
QUALITY RISK	Failing to uphold high-quality standards could harm company’s reputation and affect future project opportunities.	JKIL is committed to delivering quality- driven projects, backed by comprehensive quality checks on all procured materials. This commitment has earned the Company ISO 9001:2015 certification, reinforcing its dedication to excellence.
RAW MATERIAL PRICE RISK	Price fluctuations in key materials like cement, bricks, sand, and steel could elevate costs and compress margins.	JKIL’s established relationships with suppliers provide a strong hedge against price volatility. In the event of price increases, the Company is able to pass these costs on to the clients, mitigating the impact on its bottom line.
TECHNOLOGY RISK	The use of outdated technology could slow construction processes and negatively affect project costs.	JKIL is equipped with latest and cutting-edge technology, and advanced machinery to ensure efficiency. Its adaptability was demonstrated during the pandemic, where the Company smoothly transitioned to remote work, ensuring minimal project delays and optimised resource use.
HUMAN RESOURCE RISK	Challenges in recruiting skilled labor and retaining top talent may disrupt project execution and affect company stability.	JKIL’s labour department is proactive in deploying training programmes and ensuring a steady pipeline of skilled workers. The Company also prioritises effective hiring practices, retention strategies, and succession planning to secure long-term stability.
FINANCE RISK	Inability to meet funding requirements or secure favourable interest rates could delay project timelines and increase financial costs, impacting profitability.	JKIL maintains a keen focus on managing working capital to meet short-term obligations. As of March 31, 2025, the Company’s cash balance of 133 crore is well-suited to cover immediate needs. The low debt levels further reduce interest burdens, helping preserve profit margins and maintain financial stability.
WORKING CAPITAL RISK	Project delays, cost overruns and consequent delays in receipt of payments from the clients lead to an increase in working capital requirement.	JKIL has a process of close monitoring and follow-up with the clients for the timely approvals and payments for better working capital management
COMPETITION RISK	Increased competition due to relaxed bidding norms and aggressive pricing by new entrants could impact order inflow and compress profit margins.	JKIL mitigates this risk through a disciplined, margin-focussed bidding strategy and by leveraging its core strengths in technically-complex projects. The Company’s geographic diversification, strong execution track record, and investment in high-end equipment further enhances its competitive edge.

HUMAN RESOURCES

JKIL views employees as its most valuable asset, and is committed to treating them with the highest standards of fairness, supported by strong policies. The Company focusses on building a diverse workforce, fostering an inclusive culture that promotes sustainable growth. To support both professional and personal development, the Company conducts training and capability-building programmes. As of March 31, 2025, JKIL’s total employee strength stood at 7,364.

Read more about our human resource initiatives on pages 28 and 29 of the Annual Report

INTERNAL CONTROLS

The Company’s internal control and risk management system is structured and implemented in accordance with the highest standards of corporate governance. The internal control systems form an integral part of the general organisational structure, wherein multiple employees across the organisational hierarchy collectively collaborate to execute their respective responsibilities, under the guidance of the Board of Directors. The Audit Committee of the Board reviews the effectiveness of the internal control system, starting from annual plan and audit findings to compliance with accounting policies.

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis describing the Company’s objectives and predictions may be forward looking statements within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the Company’s business as well as its ability to implement the strategies it devises for the future. The Company does not undertake the responsibility to update these statements.