J Kumar Infraprojects Ltd Management Discussions

ECONOMIC OVERVIEW Global economy

The global economy demonstrated notable resilience in 2025, supported by improving macroeconomic stability, evolving trade dynamics, and continued investments in advanced technologies, particularly artificial intelligence (AI). These investments helped mitigate the impact of tariff-related pressures and regulatory shifts, while global inflation moderated to 4.1%, creating a more stable and predictable operating environment across industries.

Despite this resilience, geopolitical tensions remained a key source of uncertainty. Escalating instability in West Asia emerged as a significant concern, disrupting trade routes, affecting energy supply chains, and contributing to heightened market volatility. While the Russia–Ukraine conflict continued to exert residual pressure on commodity markets and global logistics, the centre of geopolitical risk increasingly shifted towards West Asia. These developments have intensified supply-side challenges, elevated inflationary risks, and created uncertainty around the availability and cost of critical materials and services, resulting in higher input costs and logistical disruptions across sectors.

Against this backdrop, the global economy expanded by 3.4% in 2025, driven primarily by the strong performance of emerging markets, which recorded growth of 4.4%. Advanced economies grew at a comparatively moderate pace of 1.9%, with the United States registering growth of 2.1% supported by resilient consumer spending and favourable financial conditions. The Euro Area and Japan recorded growth rates of 1.4% and 1.2%, respectively, reflecting gradual economic recovery amid persistent global headwinds.

World Output

Year	Real GDP Growth (%)
2027 (P)	3.2
2026 (P)	3.1
2025	3.4

Advanced Economies

Year	Real GDP Growth (%)
2027 (P)	1.7
2026 (P)	1.8
2025	1.9

Emerging markets and advanced Economies

Year	Real GDP Growth (%)
2027 (P)	4.2
2026 (P)	3.9
2025	4.4

Global trade conditions improved during the year as new bilateral and multilateral agreements helped ease tariff pressures and temporarily relax certain export restrictions. Although policy uncertainty remained above long-term averages, it moderated from the elevated levels witnessed in late 2025, contributing to improved business confidence and investment sentiment. Financial conditions remained broadly accommodative, while global trade volumes held steady, supported by resilient export activity across major Asian economies.

Central banks continued to adopt a measured approach to monetary policy, balancing inflation control with growth objectives. Gradual policy rate reductions in key economies, including the United States and the United Kingdom, supported liquidity and economic activity while helping to preserve financial stability. Collectively, these developments fostered a relatively stable global financial environment despite persistent geopolitical and trade-related challenges.

Outlook

According to the IMFs April 2026 outlook, global economic growth is projected to moderate marginally to 3.1% in 2026 before stabilising at 3.2% in 2027. Despite ongoing geopolitical tensions in the Middle East, the global growth trajectory remains supported by technology-driven productivity gains, particularly from the increasing adoption of artificial intelligence (AI) across industrial, healthcare, and research ecosystems.

Advanced economies are expected to maintain steady growth, with aggregate GDP projected to expand by 1.8% in 2026. The United States is forecast to grow by 2.3%, supported by fiscal stimulus measures and tax incentives, while the Eurozone is expected to register growth of 1.3%. Japans economy is projected to expand by 0.7% amid evolving fiscal and monetary policy dynamics. In contrast, emerging markets are expected to continue outperforming advanced economies, with growth projected at 3.9%. China is anticipated to grow by 4.4%, driven by domestic policy support and improving trade relations with the United States.

The global financial environment is expected to strengthen further as inflation gradually moderates to 3.8% in 2026 and 3.4% in 2027. Easing price pressures, coupled with measured monetary easing in major economies such as the United States and the United Kingdom, are likely to support investment activity, enhance capital allocation, and lower funding costs for innovation and large-scale development initiatives. While global trade growth may soften to 2.6% amid tariff-related adjustments, high-value sectors such as technology, healthcare, and pharmaceuticals are expected to remain resilient, supporting the continuity of global supply chains and sustaining long-term economic growth.

(Source: World Economic Outlook (IMF), WEO (IMF)-April)

INDIAN ECONOMY

Indias economic fundamentals remained strong in FY 2025-26, enabling it to retain its position among the worlds fastest-growing major economies and as the sixth largest economy globally. Despite global geopolitical challenges, trade uncertainties, and financial market volatility, the economy demonstrated resilience, with GDP growth estimated at 7.4%, up from 7.1% in FY 2024-25. The growth was supported by robust agricultural output, which strengthened rural incomes, alongside improving urban consumption driven by stable employment, supportive tax policies, and moderating inflation.

Private consumption remained the primary driver of economic growth during FY 2025-26, supported by moderating inflation and rising real incomes. Investment momentum also strengthened, led by the Governments capital expenditure of Rs.12.2 lakh crore, which spurred activity across key sectors such as manufacturing, construction, logistics, and energy. Flagship initiatives such as Viksit Bharat 2047 and Kartavya Kaal continued to advance the nations agenda of self-reliance, capacity creation, and sustainable development.

Macroeconomic stability further reinforced the growth outlook. Inflation moderated to 2.0% in FY 2025-26, supported by favourable supply conditions and easing food prices. This stability is underpinned by prudent fiscal management, robust tax collections, and sustained growth in bank credit. The banking sector remains well-capitalised, supported by low non-performing assets and healthy capital buffers, while foreign exchange reserves exceeding

US$700 billion provide resilience against external shocks. The monetary policy backdrop improved materially during the year. The Reserve Bank of India delivered a cumulative 125 basis points of rate reductions during CY 2025, bringing the benchmark repo rate to 5.25%, the lowest in several years.

The Union Budget 2026-27 reaffirms the Governments commitment to sustaining growth while maintaining fiscal discipline. Continued emphasis on infrastructure development and manufacturing capacity creation supports the broader vision of building a developed India. The Budget also prioritises energy transition, digital innovation, and the growth of micro, small and medium enterprises (MSMEs), while measures aimed at improving ease of doing business and expanding access to credit are expected to further stimulate consumption and industrial activity. Together, these initiatives create a conducive environment for investment, economic expansion, and long-term sustainable growth.

Outlook

The outlook for the Indian economy remains robust, supported by strong macroeconomic fundamentals, sustained policy focus, and growing domestic demand. Real GDP growth for FY 2026-27 is projected to range between 6.8% and 7.2%, reflecting Indias ability to sustain growth momentum amid an evolving global economic landscape. Continued public investment in infrastructure, a gradual pickup in private capital expenditure, and strengthening manufacturing capabilities are expected to remain key growth drivers. The services sector is also poised to maintain its steady expansion, further reinforcing economic resilience. Supported by prudent policymaking, a stable financial system, and ongoing structural reforms, India remains well-positioned to navigate external uncertainties while advancing a broad-based and sustainable growth agenda.

(Source: PIB, AngelOne, MoSPI, RBI)

INDUSTRY REVIEW

Indias Infrastructure Sector

Infrastructure continues to play a pivotal role in Indias growth story, serving as a critical enabler of economic development, industrial competitiveness, and improved quality of life. As the country advances towards its ambition of becoming a US$10 trillion economy by 2030, the Government has intensified its focus on building world-class infrastructure through transformative initiatives such as the National Infrastructure

Pipeline (NIP), Make in India, and the Production-Linked Incentive (PLI) scheme. Historically, a significant share of infrastructure investments has been directed towards roads, railways, modern transportation, and power, among others, creating the foundation for sustained economic progress. Over the past decade, this strategic emphasis on infrastructure development has also enhanced Indias global standing, with the World Bank recognising the country among the leading low- and middle-income economies for infrastructure-led job creation.

Reflecting the Governments continued commitment to infrastructure-led growth, capital expenditure has been increased from Rs.2 lakh crore in FY 2014-15 to Rs.12.2 lakh crore (Budget estimate) in FY 2026-27. The latest Budget further strengthens the sector through measures aimed at deepening infrastructure financing, expanding public investment, facilitating asset monetisation, and improving risk-sharing mechanisms. Anchored in the vision of Viksit Bharat, these initiatives seek to create modern, resilient, and future-ready infrastructure that can sustain long-term economic momentum. Significant allocations continue to be directed towards roads, railways, ports, airports, power transmission networks, and urban infrastructure, reinforcing the countrys development agenda.

Alongside public investments, private sector participation has emerged as an increasingly important driver of infrastructure creation. India has become the largest destination for private participation in infrastructure investment in South Asia, accounting for nearly 90% of the regions total investment. This growing investor confidence reflects the sectors strong long-term potential and the effectiveness of policy reforms aimed at enhancing project viability. In line with the Governments infrastructure vision, the role of private capital is being progressively expanded through Public-Private Partnership (PPP) models, fostering greater efficiency, innovation, and capital mobilisation across infrastructure projects.

Transportation infrastructure developments

India has the worlds second-largest road network, with national highways spanning 1,46,560 km, forming the countrys primary arterial network. Over the years, the Government has been focused on strengthening its transportation infrastructure on the back of incremental investment through initiatives such as Bharatmala Pariyojana which includes the subsumed National Highway Development Project (NHDP), the Special Accelerated Road Development Programme for the North-East Region (SARDP-NE), the Special Programme for the development of roads in Left Wing Extremism-affected Areas (LWE), including the development of the Vijayawada-Ranchi Road, and Externally Aided Projects (EAP). The National Highways Authority of India (NHAI) has surpassed its FY 2025-26 construction target by 15%, completing 5,313 km of national highways against an annual target of 4,640 km. Under the purview of Pradhan Mantri Gram Sadak Yojana (PMGSY), the total road length constructed in 2025 stood at 16,378 km.

(Source: IBEF, PIB, Ministry of Rural Development)

Railway infrastructure developments

Given the diversified topography of the country, railway remains a critical connectivity infrastructure and economic enabler of India. Between 2014 and 2026, a total of 54,600 km of railway tracks were renewed, thereby, improving reliability and operational performance. The length of track capable of supporting speeds above 110 kmph has been increased from 31,445 kilometres (40% of the network) in 2014 to over 85,000 kilometres, (over 80% of the network) as of February 2026. This has enabled faster and more efficient train operations. Indian Railways set a new record in passenger traffic and cargo transport in FY 2025-26. The total passenger traffic handled in FY 2025-26 was pegged at 741 crore. On the other hand, the total cargo handled by Indian Railways also reached an all-time high of 1,669.93 MT in FY 2025-26, on the back of the commissioning of Dedicated Freight Corridors (DFCs)

(Source: PIB, Ministry of Railways)

Urban transport infrastructure developments

Over the past couple of years, urban transport such as metro and mass rapid transit system gained immense traction, especially in Tier-1 and Tier-II cities. Indias metro coverage has expanded from 5 cities spanning 248 km in 2014 to 26 cities spanning 1,095 km in 2025. The annual metro budget also increased from Rs.5,798 crore in FY 2013-14 to Rs.29,550 crore in FY 2025-26. The country has also started seeing smarter metro solutions such as the introduction of water metro in Kochi in 2023.

(Source: PIB)

Government Schemes Driving Growth

National Infrastructure Pipeline (NIP)

The National Infrastructure Pipeline (NIP) is a landmark initiative designed to accelerate the development of world-class infrastructure across India while enhancing the quality of life for its citizens. By strengthening project planning and execution, the programme seeks to improve investment readiness and attract greater private and public sector participation. As India navigates rapid urbanisation, a growing working-age population, economic transformation, and evolving climate challenges, the NIP serves as a critical framework for addressing the countrys expanding infrastructure requirements and supporting sustainable long-term growth. With a total project cost of US$2,689.46 billion, there are 1,261 projects under development.

Gati Shakti

The PM Gati Shakti National Master Plan, with a planned investment outlay of US$1.3 trillion, is driving a more integrated and efficient approach to infrastructure development across India. By fostering coordinated planning and execution, the initiative is accelerating structural reforms and improving project delivery. Strengthening infrastructure connectivity for manufacturers remains a key priority, enabling faster, more cost-effective movement of goods and enhancing the competitiveness of Indias trade and export ecosystem.

Bharatmala Pariyojana

The Bharatmala Pariyojana was launched in 2017 with an overall target of 34,800 km of highway construction to strengthening connectivity and reducing logistics costs across the country. Under Phase I, projects covering a total of 26,425 km was awarded, of which 21,593 km have already been completed as of December 2025, clocking a completion rate of 82%. Additionally, a network of 35 Multi-modal Logistics Parks is planned under Bharatmala Pariyojana with an investment of about Rs.46,000 crore, capable of handling around 700 million metric tonnes of cargo once operational.

(Source: PRS India, PIB)

Sagarmala Programme

Launched in 2015, the Sagarmala Programme is a flagship initiative aimed at transforming India into a global maritime hub through port-led development. As a cornerstone of the Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047, the programme seeks to reduce logistics costs, improve trade efficiency, strengthen multi-modal connectivity, and generate employment through sustainable maritime infrastructure.

With over 845 projects valued at more than Rs.6 lakh crore targeted for completion by 2035, Sagarmala is among the worlds largest maritime infrastructure programmes. Of these, 272 projects worth Rs.1.41 lakh crore have been completed, while 217 projects worth Rs.1.65 lakh crore are currently under implementation.

On the back of the strong Government impetus, Indias major ports have started recording higher cargo throughput, while operational efficiencies have improved significantly. Average vessel turnaround time at major ports has reduced from 96 hours in 2014 to 49.5 hours in 2025, reflecting the sectors growing competitiveness.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

Launched in 2000, the Pradhan Mantri Gram Sadak Yojana (PMGSY) has significantly enhanced rural connectivity, constructing over 7.7 lakh km of all-weather roads with cumulative investments of Rs.3.3 lakh crore. Building on this progress, Phase IV aims to extend all-weather road access to an additional 25,000 rural habitations. Beyond improving mobility, enhanced rural connectivity stimulates demand for housing, market infrastructure, and social institutions, supporting broader socio-economic development across rural India.

Key Drivers

National Infrastructure Pipeline (NIP)

The National Infrastructure Pipeline (NIP) is a landmark initiative designed to accelerate the development of world-class infrastructure across India while enhancing the quality of life for its citizens. By strengthening project planning and execution, the programme seeks to improve investment readiness and attract greater private and public sector participation. As India navigates rapid urbanisation, a growing working-age population, economic transformation, and evolving climate challenges, the NIP serves as a critical framework for addressing the countrys expanding infrastructure requirements and supporting sustainable long-term growth. With a total project cost of US$2,689.46 billion, there are 1,261 projects under development.

Gati Shakti

The PM Gati Shakti National Master Plan, with a planned investment outlay of US$1.3 trillion, is driving a more integrated and efficient approach to infrastructure development across India. By fostering coordinated planning and execution, the initiative is accelerating structural reforms and improving project delivery. Strengthening infrastructure connectivity for manufacturers remains a key priority, enabling faster, more cost-effective movement of goods and enhancing the competitiveness of Indias trade and export ecosystem.

Bharatmala Pariyojana

The Bharatmala Pariyojana was launched in 2017 with an overall target of 34,800 km of highway construction to strengthening connectivity and reducing logistics costs across the country. Under Phase I, projects covering a total of 26,425 km was awarded, of which 21,593 km have already been completed as of December 2025, clocking a completion rate of 82%. Additionally, a network of 35 Multi-modal Logistics Parks is planned under Bharatmala Pariyojana with an investment of about Rs.46,000 crore, capable of handling around 700 million metric tonnes of cargo once operational.

(Source: PRS India, PIB)

Sagarmala Programme

Launched in 2015, the Sagarmala Programme is a flagship initiative aimed at transforming India into a global maritime hub through port-led development. As a cornerstone of the Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047, the programme seeks to reduce logistics costs, improve trade efficiency, strengthen multi-modal connectivity, and generate employment through sustainable maritime infrastructure.

With over 845 projects valued at more than Rs.6 lakh crore targeted for completion by 2035, Sagarmala is among the worlds largest maritime infrastructure programmes.

Of these, 272 projects worth Rs.1.41 lakh crore have been completed, while 217 projects worth Rs.1.65 lakh crore are currently under implementation.

On the back of the strong Government impetus, Indias major ports have started recording higher cargo throughput, while operational efficiencies have improved significantly. Average vessel turnaround time at major ports has reduced from 96 hours in 2014 to 49.5 hours in 2025, reflecting the sectors growing competitiveness.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

Launched in 2000, the Pradhan Mantri Gram Sadak Yojana (PMGSY) has significantly enhanced rural connectivity, constructing over 7.7 lakh km of all-weather roads with cumulative investments of Rs.3.3 lakh crore. Building on this progress, Phase IV aims to extend all-weather road access to an additional 25,000 rural habitations. Beyond improving mobility, enhanced rural connectivity stimulates demand for housing, market infrastructure, and social institutions, supporting broader socio-economic development across rural India.

Key Drivers

Rising population and urbanisation

Indias growing population, estimated at 1.46 billion in 2025, continues to drive demand for expanded and modernised infrastructure. At the same time, rapid urbanisation is reshaping the countrys development needs, with the urban population rising to 37.1% in 2025 from 36.6% in the previous year. These demographic trends are increasing the need for investments in transportation, housing, utilities, and social infrastructure to support sustainable economic growth and improve quality of life.

Private investments

India continues to strengthen its position as a preferred global investment destination, with FDI inflows reaching a record US$73.7 billion during the first nine months of FY 2025-26, up 16% year-on-year from US$ 63.1 billion in the corresponding period of the previous year. This robust investment momentum underscores growing investor confidence in the Indian economy and reinforces the need for continued infrastructure development to support industrial expansion, trade, and long-term economic growth. Additionally, asset monetisation through InvITs and REITs has unlocked over Rs.1.5 lakh crore, recycling funds into new projects and attracting global investors.

Government investments

Government-led infrastructure spending remains a key growth driver for Indias construction sector, supported by sustained investments across transportation, urban development, water, healthcare, education, and logistics. Continued capital expenditure, coupled with greater private sector participation, is strengthening the infrastructure pipeline, while large-scale projects such as high-speed rail and multi-modal corridors are increasing the scale of construction activity. Additionally, long-term capital support to states is accelerating regional infrastructure development and broadening construction demand beyond major urban centres.

Smart Cities Mission (SCM)

The Smart Cities Mission has transformed urban infrastructure across 100 cities through investments of Rs.1.65 lakh crore spanning over 8,000 projects, the majority of which have been completed. The programme focused on enhancing urban mobility, digital infrastructure, public spaces, and civic utilities, creating more efficient and liveable cities. Leading cities such as Indore and Raipur pioneered innovative funding approaches, including green bonds and land monetisation, establishing scalable models for sustainable urban development. The missions progress and learnings are now being carried forward through the Urban Challenge Fund. This initiative has helped in creating a deeper pipeline for redevelopment, sanitation, mobility, digital infrastructure and climate-resilient civic assets, thereby, driving the infrastructure sector.

(Sources: Smart Cities Mission Annual Report; PIB; Ministry of Housing and Urban Affairs)

Overview

Union Budget 2026-27

In the Union Budget 2026-27, the Government allocated a capital of Rs.12.2 lakh crore compared to Rs.11.2 lakh crore in Union Budget 2025-26. The Union Budget also saw the introduction of Infrastructure Risk Guarantee Fund and City Economic Regions (CERs), reinforcing infrastructure-led growth and balanced urban development.

Company Overview

J. Kumar Infraprojects Limited (hereafter referred as JKIL or the Company) has established itself as one of Indias leading infrastructure construction companies, with deep expertise in executing complex transportation and urban infrastructure projects. Backed by internationally-recognised quality, robust order book, rich legacy, capable workforce, and a strong focus on sustainability, the Company has been shaping a stronger tomorrow for India.

Among the limited number of contractors with the capability and credentials to execute large-scale metro rail projects across the country, JKIL has built a distinguished track record of delivering technically-demanding infrastructure assets. Its competitive strength stems from a combination of engineering excellence, disciplined project management, a highly experienced workforce, and decades of execution expertise. The Companys ability to consistently deliver projects within compressed timelines underscores its focus on efficiency, reliability, and creating long-term value for stakeholders.

Business review

Metro projects and elevated corridors jointly carve the highest share of revenues for the Company. Metro infrastructure accounted for a revenue of 29% during FY 2025-26, of which 11% was from underground metro projects and the remaining 18% from elevated metro projects. While elevated corridors and flyovers account for another 29% of the total revenue of the Company. Roads and tunnels form a close second on revenue contribution, accounting for a revenue share of 25% during FY 2025-26. Water, civil and other projects account for the remaining 17% revenue share.

Order-wise wins for FY 2025-26

Sr. No. Particulars	Authority	(Rs. in Crore)
1 Multi-modal Integration Facilities at 8 Metro Stations of Mumbai Metro Line 4 & 4A (Pkg-1)	MMRDA (Maharashtra)	68
2 Construction of Foot Over Bridge for Mumbai Metro Line 4 and 4A at Pant Nagar, Vikhroli, including Vijay Garden Metro Station: Package 2	MMRDA (Maharashtra)	77
3 Design construction and operation of twin tunnel from Film City Goregaon to Khindipada (Amar Nagar) Mulund including Box Tunnel (Cut & Cover) at Film City, Electrical, Mechanical and associated works	BMC (Maharashtra)	120
4 Design Construction and Operation of Twin Tunnel from Film City Goregaon to Khindipada (Amar Nagar) Mulund including Box Tunnel (Cut & Cover) at Film City, Electrical, Mechanical and associated works	BMC (Maharashtra)	252
5 Redevelopment of GPRA Colony at Netaji Nagar, New Delhi \u2013 SH: Construction of Type V quarters (540 Nos), Community Hall, Miscellaneous Buildings (Main Gate, Swachh Bharat Toilets, ESS) including allied works of Design, Engineering, Procurement and Construction (EPC)	NBCC (India) Limited (Delhi NCR)	522
Total		1,039

Financial Review

(Rs. in Crore)

Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	5,723	5,693
Cost of Material Consumed	3,753	3,751
Construction Expenses	624	608
Employee Expenses	423	413
Other Expenses	100	95
EBITDA	823	826
EBITDA Margin (%)	14.4%	14.5%
Other Income	78	33
Depreciation	196	169
EBIT	706	691
EBIT Margin (%)	12.3%	12.1%
Finance Cost	168	155
Exceptional Item	11	-
Profit Before Tax	527	535
PBT Margin (%)	9.2%	9.4%
Share in profit of an associate (Net of Taxes)	1	1
Tax	141	145
PAT	387	391
PAT Margin (%)	6.8%	6.9%
Cash PAT	583	560
Cash PAT Margin (%)	10.2%	9.8%

Key Ratios	FY 2025-26	FY 2024-25
Debt-equity ratio (x)	0.18	0.23
ROCE (%)	18.4%	20%
ROE (%)	12.1%	13.9%
Working capital cycle (Days)	99	112
Debtors turnover cycle (Days)	95	96
Inventory turnover cycle (Days)	58	70
Creditor turnover cycle (Days)	54	54
Asset turnover ratio (x)	4.9	5.3
Debt-equity ratio (x)	0.18	0.23
Interest coverage ratio (x)	4.31	4.45
Return on gross block (%)	17.65%	17.50%

RISK MANAGEMENT

Approach To Risk Management

Effective risk management remains integral to the Companys governance framework. Through a comprehensive and forward-looking approach, the Company continuously identifies, evaluates, and manages risks that could influence its strategic, operational, and financial performance. The Board, supported by the Audit Committee and management, maintains active oversight to ensure that risk considerations are embedded in decision-making and business execution.

Risk Management Framework

The Risk Management Committee, comprising three members of the Board with diverse industry and functional expertise, provides focused oversight of the Companys risk landscape. The Committee is responsible for reviewing key risks, evaluating their potential impact, and guiding the implementation of appropriate mitigation measures to strengthen organisational resilience.

JKIL follows a structured and enterprise-wide risk management process that encompasses the identification, assessment, prioritisation, mitigation, and continuous monitoring of risks. Supported by a robust governance framework, this approach enables the Company to proactively address emerging challenges, safeguard business continuity, and support the achievement of its strategic objectives.

Key Responsibilities of the Risk Management Committee

Oversee the Companys risk management framework and ensure alignment with its strategic and operational objectives

Review and approve credit proposals in accordance with established risk management and credit policies

Provide direction on the identification, assessment, and management of existing and emerging risks across the business

Evaluate and strengthen risk assessment frameworks, methodologies, and monitoring mechanisms to enhance risk visibility and decision-making

Review the adequacy and effectiveness of risk mitigation measures, internal controls, and governance processes

Monitor compliance with approved risk management policies, standards, and practices, including those related to credit evaluation and approval

Periodically review the Companys risk profile and assess the potential impact of key risks on business performance and continuity

Report the regular reports on risk monitoring activities, credit exposures, and mitigation initiatives to the senior management and the Board

Foster a risk-aware culture across the organisation by promoting accountability, transparency, and prudent risk-taking

RISKS AND MITIGATION MEASURES

Risk	Description	Mitigation Strategy
Economic Risk	An economic slowdown may affect overall business operations and result in extended project timelines.	The Government\u2019s continued emphasis on infrastructure creation and modernisation provides a strong tailwind for the Company to capitalise on emerging opportunities, accelerate its growth trajectory, and unlock further performance upside over the coming years.
Quality Risk	Any lapse in maintaining stringent quality standards could negatively affect the Companys reputation and impair its prospects for winning future projects.	Quality is deeply embedded across every stage of the Companys project lifecycle, from procurement and testing through to construction and final delivery. Comprehensive quality assurance frameworks and rigorous material validation protocols ensure consistency, reliability, and superior execution standards across projects. The Companys ISO 9001:2015 certification further reflects its unwavering commitment to maintaining best-in-class quality standards.
Raw Material Risk	Volatility in the prices of key raw materials such as cement, bricks, sand, and steel, particularly amid ongoing geopolitical tensions, could increase input costs and exert pressure on margins.	JKILs long-standing supplier relationships and well-entrenched procurement network provide resilience against sourcing disruptions and input cost volatility. Additionally, the presence of price variation clauses across project contracts allows the Company to pass through eligible cost escalations, mitigating the impact of inflationary pressures and protecting margins.
Technology Risk	The use of obsolete or outdated technologies could slow project execution, reduce operational efficiency, and negatively affect project economics.	Technology and innovation are at the core of JKILs execution excellence. The Company continues to invest in advanced construction equipment, digital project monitoring platforms, and process-oriented systems that enhance planning, coordination, productivity, and site-level control. This technology-driven approach facilitates faster decision-making, reinforces execution discipline, and provides greater visibility across complex projects, enabling JKIL to execute at scale while upholding the highest standards of quality, safety, and operational efficiency.
Risk	Description	Mitigation Strategy
Human Resource Risk	Labour shortages and difficulties in recruiting and retaining skilled talent could adversely affect project execution, operational efficiency, and the Companys ability to sustain its growth trajectory.	Human capital remains a key pillar of JKILs long-term growth strategy. The Company follows a proactive approach to talent management, with a strong focus on capability building, talent acquisition and retention, employee engagement, and leadership continuity. Through sustained investments in workforce development and well-defined succession planning initiatives, JKIL seeks to maintain a future-ready talent pool capable of supporting its expanding operations and evolving business requirements.
Finance Risk	Inability to meet funding requirements or secure financing on favourable terms could delay project execution, increase financing costs, and adversely impact profitability.	JKIL maintains a disciplined approach towards liquidity management and working capital efficiency, providing the financial flexibility required to support its growth ambitions. The Company reported a healthy cash balance of Rs.235 crore as of March 31, 2026, reflecting its strong liquidity position. Moreover, JKILs gross debt-to-equity ratio improved from 0.23x in FY 2024-25 to 0.18x in FY 2025-26, highlighting its prudent leverage profile and balance sheet strength. Complementing this, the Companys credit ratings for both fund-based and non-fund-based facilities were upgraded to A+ Positive its robust credit profile and financial resilience.
Working Capital Risk	Project delays, cost overruns, and consequent delays in customer collections could increase working capital intensity and adversely impact the Companys liquidity and cash flow profile.	JKIL follows a disciplined and proactive approach to receivables management, underpinned by close coordination with clients to ensure timely project certifications, approvals, and collections. This robust process supports liquidity management, improves working capital efficiency, and enhances cash flow visibility. As a result, the Companys working capital cycle improved materially from 112 days in FY 2024-25 to 99 days in FY 2025-26.
Competition Risk	Heightened competitive intensity, driven by relaxed bidding norms and aggressive pricing by new market participants, could adversely affect order book growth and lead to margin compression.	JKIL addresses competitive pressures through a disciplined and margin-accretive bidding approach, selectively pursuing opportunities that align with its core capabilities and strategic priorities. The Companys proven execution track record across complex infrastructure projects, extensive geographic footprint, and ongoing investments in specialised equipment, technology, and execution capabilities collectively reinforce its sustainable competitive advantage.

HUMAN RESOURCES

The Company views its workforce as a key strategic asset and is dedicated to nurturing a workplace culture founded on fairness, inclusivity, and mutual respect. The Company actively promotes diversity and invests in employee development through structured learning and capability enhancement programmes. By empowering its people and fostering an environment of continuous growth, JKIL strengthens organisational resilience and supports sustainable business performance. The Company employed 6,955 people as of March 31, 2026.

Read more about our Human Resource initiatives on pages 36 and 37

INTERNAL CONTROL SYSTEM AND ADEQUACY

A strong internal control environment forms the foundation of the Companys governance framework. Through well-defined policies, processes, and monitoring mechanisms, the Company seeks to ensure operational excellence, financial integrity, and effective risk management.

The Board of Directors, supported by the Audit Committee, provides oversight of the internal control framework and periodically reviews its effectiveness. This includes evaluating internal audit outcomes, compliance with accounting and governance standards, and the adequacy of risk management processes. Embedded throughout the organisation, the framework fosters accountability, transparency, and sound decision-making, enabling the Company to navigate risks while pursuing its strategic objectives.

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis describing the Companys 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 Companys 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.