K2 Infragen Ltd Management Discussions

Global economic growth

The global economy started 2024 with the confidence that inflation was largely beaten and that major economies would likely avoid recession. But as the year drew to a close, a nagging worry crept in: inflation proved to be much stickier than wed hoped. While the US economy powered ahead, many other developed nations struggled to keep pace. On top of that, many countries saw their currencies lose value, a situation that could become especially tricky for developing economies.

Stepping in 2025, the global economic activity is expected to maintain modest momentum in 2025 owing to the likely shift in policy following numerous elections around the world. New policies could lead to new trajectories for inflation, borrowing costs, and currency values, as well as trade flows, capital flows, and costs of production. According to the IMF, the global economy is expected to grow at 3.3% both in 2025 and 2026, primarily on account of an upward revision in the United States offsetting downward revisions in other major economies. Global headline inflation is expected to decline to 4.2% in 2025 and to 3.5% in 2026, converging back to target earlier in advanced economies than in emerging market and developing economies.

Global inflation is projected to ease from 4.5% in 2024 to 3.5% in 2025, though still above pre-pandemic levels. Advanced economies are expected to manage inflation more effectively than emerging markets, but factors like wage pressures, protectionism, and geopolitical tensions could create uneven outcomes.

The U.S. economy remains strong, with 2025 growth revised upward to 2.7% due to resilient consumer demand, a robust job market, and favorable financial conditions. Growth is expected to moderate by 2026. In contrast, the euro area faces slower recovery, with 2025 growth revised down to 1.0% amid geopolitical tensions and weak manufacturing, though it may rise to 1.4% by 2026 as conditions improve.

Emerging markets are expected to maintain stable growth. Chinas 2025 outlook is slightly upgraded to 4.6% due to fiscal support, while India is set to grow steadily at 6.5% through 2025 and 2026, in line with long-term trends.

Regional prospects vary: the Middle East and Central Asia face tempered growth due to oil production cuts, Latin America will see modest improvement, sub-Saharan Africa is set for stronger growth, and emerging Europe may experience a slowdown.

Outlook

According to the IMF, factoring in recent market trends and the impact of rising trade policy uncertainty, the uncertainty surrounding the global economy is expected to persist throughout 2025. However, potential policy changes are still being discussed.

In 2025, energy commodity prices are expected to decline by 2.6%, largely due to weaker oil demand from China and increased supply from non-OPEC+ countries (which includes Russia), though rising gas prices - caused by colder weather, supply disruptions, and ongoing conflicts in the Middle East - partly offset the decline. Meanwhile, non-fuel commodity prices are projected to rise by 2.5%, mainly driven by higher food and beverage costs due to adverse weather affecting major producers. On the monetary front, major central banks are expected to continue lowering interest rates, though at different speeds, depending on their respective economic growth and inflation outlooks. Fiscal policies in advanced economies, including the U.S., are expected to tighten in 2025-26, with a lesser degree of tightening in emerging and developing markets.

Indian economy overview

Even in FY25, the Indian economy continued to emerge as of the fastest growing economies in the world, but at a sluggish pace compared to the previous years. Slower growth in the first half of the fiscal (6%) led the RBI to bring down the annual projection to 6.6% (down from an earlier projection of 7%). However, according to the first advance estimates, Indias real GDP is expected to grow at 6.4% in FY25.

Some of the key factors which helped drive the growth of the Indian economy include, rural consumption has remained robust, supported by strong agricultural performance, while the services sector continues to be a key driver of growth. Manufacturing exports, particularly in high-value-added components (such as electronics, semiconductors, and pharmaceuticals), have displayed strength, underscoring Indias growing role in global value chains.

Indias current account deficit (CAD) stood at $11.5 billion (1.1% of GDP) in Q3 FY25, unchanged as a percentage of GDP but down from $16.7 billion in Q2. A surplus of $4-6 billion is expected in Q4, supported by stronger exports and services. For FY25, CAD is projected at around 0.8% of GDP. Foreign exchange reserves reached a five-month high of $676.3 billion as of April 4, 2025, making India the fourth- largest holder globally. This growth highlights the countrys economic resilience and provides a strong buffer against global volatility.

Indias real GVA is projected to grow by 6.4% in FY25, driven by agriculture (3.8%), industry (6.2%), and services (72%). However, manufacturing exports remain under pressure due to weak global demand and protectionist trade policies.

The IMF revised Indias GDP growth forecast for FY25 to 6.5% (down 0.5 pp), citing a sharp 12.3% contraction in government capex, which has slowed investment growth. Still, net exports are expected to contribute positively due to lower crude prices. Net direct tax collections grew 13.57% to 22.26 lakh crore in FY25, surpassing budget estimates and maintaining strong tax buoyancy at 1.57, reflecting sustained economic momentum.

Indian MSME sector

The Micro, Small, and Medium Enterprises (MSME) sector is a critical enabler of Indias socio-economic progress. Beyond driving economic growth, it plays a crucial role in shaping the nations entrepreneurial landscape, particularly in semiurban and rural regions. Its contributions extend far beyond numbers, fueling innovation, creating jobs, and strengthening local economies. As a key engine of Indias GDP and exports, the MSME sector continues to be a catalyst for inclusive and sustainable development.

As a cornerstone of Indias industrial ecosystem, the MSME sector drives manufacturing, exports, and employment, shaping the nations economic fabric. With 5.93 crore registered MSMEs employing over 25 crore people, these enterprises form the backbone of economic activity. In 202324, MSME-related products contributed 45.73% of Indias total exports, underscoring their pivotal role in establishing the country as a global manufacturing powerhouse. Recognizing this, the latest budgetary provisions focus on fostering innovation, enhancing competitiveness, and improving resource accessibility. By empowering MSMEs with the necessary tools and support, the government aims to expand their reach and amplify their impact on Indias economic growth.

Exports from MSMEs have seen substantial growth, rising from 3.95 lakh crore in 2020-21 to 12.39 lakh crore in 2024-25. The number of exporting MSMEs has also surged, increasing from 52,849 in 2020-21 to 1,73,350 in 2024-25. Their contribution to Indias total exports has steadily grown, reaching 43.59% in 2022-23, 45.73% in 2023-24, and 45.79% in 2024-25 (up to May 2024). These trends underscore the sectors increasing integration into global trade and its potential to drive Indias position as a manufacturing and export hub.

Key Budget takeaways for the Indian MSME Sector Revised classification criteria: To empower MSMEs with greater growth opportunities, the investment and turnover thresholds for classification have been significantly raised, by 2.5 times and 2 times, respectively. This strategic move aims to enhance operational efficiency, drive technological adoption, and create more employment opportunities, fostering a stronger and more competitive business ecosystem.

Enhanced credit availability: The credit guarantee cover for micro and small enterprises has been increased from 5 crore to 10 crore, enabling additional credit of 1.5 lakh crore over five years. Startups will see their guarantee cover double from 10 crore to 20 crore, with a reduced fee of 1% for loans in 27 priority sectors. Exporter MSMEs will benefit from term loans up to 20 crore with enhanced guarantee cover.

Credit cards facility for micro enterprises: A new customised Credit Card scheme will provide 5 lakh in credit to micro enterprises registered on the Udyam portal, with 10 lakh cards set to be issued in the first year.

Support for startups and first-time entrepreneurs: A

dedicated 10,000 crore Fund of Funds is likely to be launched to strengthen support for startups, fostering innovation and entrepreneurship across the country. Additionally, a new initiative will empower 5 lakh first-time women, Scheduled Caste, and Scheduled Tribe entrepreneurs by offering term loans of up to 2 crore over a five-year period. This initiative aims to create greater financial inclusion, encourage self-reliance, and unlock new opportunities for underrepresented entrepreneurs.

Focus on labour-intensive sectors: A Focus Product Scheme for the footwear and leather sector aims to boost innovation, manufacturing, and non-leather production, creating 22 lakh jobs and driving a 4 lakh crore turnover. A new toy sector scheme will enhance cluster development and skill-building, positioning India as a global manufacturing hub. Meanwhile, a National Institute of Food Technology in Bihar will accelerate food processing growth, unlocking opportunities in the eastern region.

Manufacturing and clean tech initiatives: A National Manufacturing Mission will provide policy support and roadmaps for small, medium, and large industries under the Make in India initiative. Special emphasis will be given to clean tech manufacturing, fostering domestic production of solar PV cells, EV batteries, wind turbines, and high-voltage transmission equipment.

Outlook

Looking ahead, India is expected to maintain its potential real GDP growth of 6.5% YoY from FY26 to FY28, positioning itself as the worlds third-largest consumer market by 2026 and the third-largest economy by 2027 trailing only the United States and China. The countrys nominal GDP is projected to rise from USD 4 trillion in FY25E to over USD 6 trillion by FY30E.

Indias growth momentum is expected to be driven by a resilient manufacturing sector, stable inflation levels, supportive tax policies, and robust urban consumption. Ongoing infrastructure development and structural economic reforms further strengthen the countrys capacity to weather global uncertainties. However, key challenges remain, including the need to generate meaningful employment for a growing workforce, navigate a more challenging global trade landscape, and manage the implications of automation on jobs.

Indian infrastructure industry

Indias infrastructure sector is poised to play a pivotal role in the nations economic trajectory, contributing around 3% to the GDP. With projected investments of nearly ?52,962 billion between FY24 and FY28, the sector is witnessing a transformational shift. Infrastructure has long been a cornerstone of Indias growth, and today, it is gaining renewed momentum, thanks to focused government initiatives across transportation, energy, smart cities, water management, social development, and digital infrastructure. In tandem, policy reforms are actively encouraging foreign investment, making India a more attractive destination for global infrastructure players.

Recognising that infrastructure projects often demand high capital and have extended gestation periods, the government continues to foster a supportive environment that facilitates fundraising and ensures long-term returns. National and state- level agencies, such as the National Highways Authority of India (NHAI), along with domestic and international private sector entities, are working together to push forward this ambitious agenda.

As Indias population grows, so does the urgent need for modern, resilient infrastructure. Meeting this demand will require substantial and sustained investment, not just to accommodate growth, but to enhance the countrys global competitiveness. Encouragingly, this intent is reflected in the data: Gross Fixed Capital Formation (GFCF), a key indicator of fixed asset investments, rose sharply by 9.4% in Q4 FY25, marking its fastest growth in six quarters. Its share of GDP climbed from 31.7% in Q3 to 33.9% in Q4, driven primarily by a significant increase in capital expenditure by both the Centre and state governments. This surge underscores a shared commitment to building the foundation for a stronger, future-ready India.

A major catalyst for economic growth has been the governments strong push for infrastructure development. In the Union Budget 2024-25, this commitment was reaffirmed with a substantial capital outlay of ?11,111 billion dedicated to the sector. Alongside this financial support, the Government of Indias ongoing efforts to simplify regulatory processes and enhance ease of doing business are expected to create a more enabling environment, encouraging continued investment and momentum in the infrastructure space.

Sector-wise break-up of capital expenditure of ?111 trillion during fiscal FY20- FY25

Key growth drivers

Policy boost: Several major projects and supportive government policies, like the National Infrastructure Pipeline, PM Gati Shakti Plan, NMP 2.0, and updated PPP guidelines, are expected to speed up infrastructure development and create new opportunities for funding. These steps aim to boost progress across key sectors and support long-term growth.

Urbanisation boost: Rapid urbanisation and population growth are accelerating the demand for robust infrastructure in areas like transport, housing, water, and sanitation. With Indias population expected to reach 1.6 billion by 2050 and 416 million more people moving to cities, infrastructure investment will be critical to meeting future urban needs.

Foreign investment boost: Foreign investments are key to infrastructure growth, bringing in capital, technology, and expertise. Easing FDI norms further boosts investor interest and drives continued development.

Focus on renewable energy: Globally, the focus on renewable energy and sustainability is rising, with India emerging as the third-largest host of greenfield projects. This momentum is set to drive infrastructure investments that align with environmental goals and support long-term growth.

Key policies proposed in the Union Budget 2025-26

• Infrastructure related ministries in the Union Government to come up with a 3-year pipeline of projects that can be implemented in PPP mode. States will be encouraged to do the same and can seek support from the IIPDF to prepare PPP proposals

• 1.5 lakh crore proposed as 50-year interest-free loans to states for capital expenditure and incentives for reforms

• Second Plan for asset monetisation for 2025-30 to be launched to plough back capital of 10 lakh crore in new projects

• Jal Jeevan Mission extended till 2028 focusing on quality infrastructure and rural piped water supply schemes

• Urban sector reforms related to governance, municipal services, urban land and planning to be incentivized

• Urban Challenge Fund of 1 lakh crore announced to implement the proposals for ‘Cities as Growth Hubs, ‘Creative Redevelopment of Cities and ‘Water and Sanitation as announced in the Interim Budget 2024. Allocation of 10,000 crore proposed for 2025-26.

Indian construction industry

Indias construction industry stands as a cornerstone of the nations economic progress. With an impressive 8.6% growth in FY25, the sector has crossed the USD 1 trillion milestone, making it the third-largest construction market globally. Contributing around 9% to the GDP and ranking as the second-largest employment generator after agriculture, the sector is poised for continued momentum. FY26 projections indicate over 10% growth, fuelled by strong public infrastructure spending, rising private investments, accelerating urbanisation, housing demand, and industrial development.

The governments focused push on infrastructure, backed by a massive 111 lakh crore allocation under the National Infrastructure Pipeline, is driving activity across energy, logistics, urban development, and railways. Indias ambitious goal of achieving 596 GW of non-fossil fuel energy capacity by 2032 has further energised the solar, wind, and transmission segments. Reflecting this commitment, the Union Budget 2025 allocated a capital outlay of 11.21 lakh crore, equivalent to 3.1% of GDP, with total construction and infrastructure spending expected to exceed 15 lakh crore in FY26.

The sectors robust outlook is reinforced by strong investor confidence, evidenced by over USD 3.2 billion in FDI inflows during the year. On the private sector front, capital expenditure is regaining strength post-deleveraging, with fresh investments across real estate, data centres, cement, steel, consumer goods, and pharma.

At the same time, the industry is evolving to meet the demand for integrated, tech-enabled EPC solutions. Clients now seek partners capable of delivering end-to-end services—from design and engineering to construction, commissioning, and maintenance—under one roof. This shift is driven by the growing complexity of projects and the rising need for timely, cost-efficient execution. Looking ahead, the longterm outlook for Indias construction sector remains robust. Structural shifts such as rapid urbanisation, a growing middle class, energy transition, infrastructure modernisation, and digital transformation will continue to propel demand across all segments.

Indian road infrastructure

Over the past decade, India has undergone a remarkable transformation in infrastructure, marked by scale, speed, and strategic intent. Guided by a holistic and integrated approach, the country has made tremendous strides in enhancing physical connectivity and building the foundation for inclusive economic growth.

Today, India boasts the worlds second-largest road network, stretching over 6.7 million kilometers. This vast network carries nearly 65% of all goods and serves 90% of passenger traffic, playing a vital role in the countrys social and economic fabric. With better linkages between cities, towns, and villages, road transportation has steadily improved, boosting accessibility and regional development.

This progress has been anchored in bold policy reforms and mission-mode initiatives such as PRAGATI, PM GatiShakti, the National Logistics Policy, Bharatmala, Sagarmala, and UDAN. Together, these efforts have streamlined infrastructure planning and execution—enhancing logistics efficiency, reducing costs, and promoting sustainable growth. From record highway expansions and railway electrification to new airports, ropeways in remote areas, and advanced digital infrastructure, Indias development journey reflects a clear commitment to building a connected, competitive, and future-ready nation—aligned with the vision of Viksit Bharat by 2047

Between FY16 and FY24, Indias National Highway network grew steadily at a CAGR of 9.3%, with an impressive 12,349 km added in FY24 alone. Reflecting its unwavering commitment to infrastructure development, the National Highways Authority of India (NHAI) allocated a record 2.07 lakh crore in FY24, a 20% jump in capital expenditure over the previous year.

The Hybrid Annuity Model (HAM) has emerged as the preferred framework for highway development, with the government covering 40% of project costs upfront. For FY24- 25, the Ministry of Road Transport and Highways (MoRTH) has set an ambitious target of 35,000 crore in private sector investments - marking a 17% increase from the current fiscal years target of 30,000 crore, with overall spending expected to edge up by 1% in FY25. At the grassroots level, the Pradhan Mantri Gram Sadak Yojana (PMGSY) continues to transform rural mobility, with over 765 lakh km of roads already constructed. Its upcoming Phase IV aims to connect 25,000 additional rural habitations with all-weather roads, strengthening last-mile connectivity.

Meanwhile, the Indian road sector is rapidly adopting next-generation technologies—from satellite-based tolling and AI-driven traffic management to self-healing road surfaces—aimed at boosting efficiency, safety, and longterm sustainability.

Key budget allocation for Indias Road & Highway Sector

• In recent years, the Ministrys fund utilization has consistently exceeded 100 percent. For the fiscal year 2023-24, the Ministry spent 2,75,986 crore, surpassing the allocated budget of 2,70,435 crore

• According to the revised estimates for 2024-25, the expenditure is expected to be 1% higher than the budgeted amount

• For 2025-26, the Ministry is projected to spend Rs 2,87333 crore, marking a 2% increase over the revised estimates for 2024-25 at INR 2,80,519 crore

• A significant portion of these funds is allocated to the National Highways Authority of India (NHAI) and for expenditure on roads and bridges

Indias railway infrastructure

As India accelerates its journey toward infrastructure development and economic progress, Indian Railways stands at the threshold of a major transformation. Driven by consistent high capital investment, technological advancements, and key operational reforms, the Railways is evolving into a faster, more efficient, and passenger-friendly network. Large-scale initiatives like track expansion and station modernisation are not only aimed at boosting train speeds and enhancing commuter comfort but also at strengthening freight capabilities. Alongside these developments, governance reforms are equipping the Railway Board with greater agility and decision-making authority, laying a strong foundation for a more responsive and future-ready national transporter.

Indian Railways (IR) delivered a stronger performance during April-December 2024, supported by growth in both freight and passenger traffic. According to the Economic Survey 2024-25, originating passenger traffic rose by 8%, while freight revenue increased by 5.2% compared to the same period last year. Total revenue reached 1.93 trillion, with freight contributing 1.26 trillion and passenger services 559.88 billion, underscoring the critical contribution of the freight segment to IRs overall earnings. Freight loading also witnessed a modest 2% growth, touching 1,179 million tonnes. On the infrastructure front, the Ministry of Railways achieved a capital expenditure utilisation of 76% (1.92 trillion), marking a 2% improvement year-on-year, with 817 billion directed towards capacity enhancement.

A key driver of Indian Railways (IR) growth has been its ambitious push toward capacity expansion, particularly through large-scale track construction and infrastructure upgrades. Over the past five years, there has been a steady rise in both budget allocations and effective fund utilisation for building new lines and maintaining existing ones. This focused effort has more than doubled annual capacity addition, from 2,226 km in 2019-20 to an impressive 5,309 km in 2023-24, driven by extensive multitracking initiatives.

Between April and December 2024 alone, IR laid 3,433 km of tracks, including 1,158 km of new lines, 2,016 km of doubling, and 259 km of gauge conversion, averaging 12.48 km of new tracks per day. Looking ahead, IR has set an ambitious target of laying 5,500 km of tracks in FY25 at an accelerated pace of 15 km per day, alongside the annual replacement of 7000 km of ageing tracks. As of December 2024, 62% of the annual track-laying target has already been achieved.

This rapid infrastructure development is not just about numbers, its transforming the travel experience. It has eased congestion, increased average train speeds, and enhanced the overall efficiency of both passenger and freight movement. Today, approximately 23,000 track km across IRs network can support train speeds of up to 130 kmph, while over 54,000 km are capable of handling speeds up to 110 kmph, reflecting the railways growing readiness for a faster, more reliable future.

Indian Railways (IR) currently runs approximately 18,000 trains daily, including 8,000 dedicated to freight movement. Recognising the potential of freight as a key revenue driver, IR is undertaking a series of focused initiatives to strengthen this segment. While the average speed of freight trains on conventional routes has remained steady at 23.6 kmph since 2019-20, operations on the dedicated freight corridors

(DFCs) have significantly improved efficiency, with trains running at 44.6 kmph on the eastern DFC and 51.3 kmph on the western DFC. To support rising freight demand, IR is also investing 14,000 crore to develop 200 Gati Shakti Cargo Terminals (GCTs). As of November 2024, 91 terminals had already been commissioned, with 100 more targeted in FY 2024-25. These efforts aim to strengthen IRs position in the logistics market. However, the goal of achieving 3,000 million tonnes (mt) of freight by 2030 remains ambitious, requiring an 11% CAGR over the next five years, twice the current growth rate of 5.4% witnessed between 2017-18 and 2023-24.

Company overview

K2 Infragen Limited (K2IL) is steadily emerging as a dynamic force in Indias infrastructure construction landscape. Since its inception in 2015, the Company has grown into a trusted partner for a wide array of projects across the country, operating under two core verticals, contracting and services. With nearly a decade of experience, K2IL has carved a niche in executing complex projects involving water supply systems, roads, highways, bridges, and civil construction and energy sector contributing meaningfully to the nations development.

Guided by a deep understanding of the industry, we deliver end-to-end solutions that span the entire project lifecycle, from design and procurement to execution, supervision, subcontractor coordination, and post-construction support. Our dedication to quality, safety, and sustainability is validated by our ISO certifications in Environmental Management (14001:2015), Occupational Health & Safety (45001:2018), and Quality Management (9001:2015), accredited by Globus Certifications Private Limited.

Expanding our capabilities further, K2IL now offers turnkey Engineering, Procurement, and Construction (EPC) services with a focus on power and project engineering. Backed by a skilled workforce and robust in-house equipment, we execute high-impact projects across nine Indian states with precision and reliability.

In our service business, we follow an integrated EPC approach that includes project planning, manpower deployment, logistics coordination, and on-ground execution to ensure timely delivery.

At K2IL, our business model thrives on diversification. By participating in varied infrastructure domains such as roads, railways, water infrastructure, and civil works and energy sector we are not just building projects—we are building the backbone of a modern India.

Our Core Strengths

Relentless focus on execution & engineering excellence

At the core of K2ILs operations lies an unyielding commitment to engineering precision and project excellence. We constantly refine our processes, technologies, and methodologies to deliver reliable, cost-effective infrastructure solutions across sectors. Our focus isnt just on building structures, but on building them smarter, safer, and more sustainably.

Emerging leadership in infrastructure development

In less than a decade, K2IL has emerged as a rising player in Indias infrastructure sector. With successful execution across roads, highways, water supply, and civil construction, we are rapidly establishing a stronghold in both public and private sector projects, earning trust through consistency, quality, and accountability.

Diverse and integrated service portfolio

Our end-to-end EPC capabilities span project design, procurement, execution, and lifecycle support. Whether its water infrastructure, boundary walls, transmission lines, or turnkey civil projects, our integrated services are designed to meet varied customer needs, delivered with precision and scale across eight Indian states.

Strategic collaborations & growth partnerships

We actively engage with trusted partners and vendors to expand our reach and strengthen service delivery. From advanced construction technologies to regional partnerships, these alliances enhance our agility and readiness to meet evolving client expectations in a competitive landscape.

Synergy-driven teamwork

We believe progress is best achieved together. By fostering strong internal collaboration between design, procurement, and execution teams, and aligning seamlessly with external stakeholders, we ensure project timelines, budgets, and quality benchmarks are consistently met or exceeded.

Operational excellence & process agility

K2IL takes pride in its lean, responsive operational model. Equipped with an experienced workforce and robust inhouse machinery, we execute complex projects efficiently while maintaining high safety and quality standards. Our ability to swiftly mobilize resources and adapt to on-ground realities is a key competitive advantage.

Finance review

P&L analysis

Particulars	FY 25 ( in crore)	FY 24 ( in crore)	Growth (%age Change)
Revenue from operations	146.61	108.72	35%
Land development and construction cost	108.02	74.26	45%
Employee Benefits Expense	6.46	4.60	40%
Interest cost	3.20	2.70	19%
EBITDA	20.31	21.43	-5%
PBT	14.97	16.76	-11%
PAT	11.65	12.50	-7%
EPS (in )	9.25	13.81	-33%

Our revenues for FY25 stood at 146.61 crore compared to 108.72 crore in FY24, an increase of 35%. Growth in revenue was largely driven by the successful execution of key projects during the year, coupled with our strategic entry into promising new business segments such as renewable energy.

Our operational cost for the year stood at 108.02 crore compared to 74.26 crore in FY24, an increase of 45% in line with revenue.

Employee benefit expenses increased by 40% in line with revenue from 4.60 crore in FY24 to 6.46 crore in FY25.

Our EBIDTA in FY25 stood at 20.31 crore compared to 21.43 crore in FY24. Profit After Tax (PAT) decreased from 12.50 crores in FY24 to 11.65 crores in FY25. PAT was reflective of the EBITDA trend.

The Company has a healthy consolidated order book under execution of more than 4,525 crores as on 31^st March, 2025, providing clear visibility of earnings for the coming years.

Analysis of Balance Sheet

Particular	FY 25 ( in crore)	FY 24 ( in crore)	Growth (%age Change)
Total equity	76.42	44.99	70%
Long-term borrowings	3.24	3.01	8%
Short-term borrowings	52.09	22.28	134%
Total non-current assets	20.95	12.36	70%
Trade receivables	129.66	60.75	113%
Cash and cash equivalents	1.99	0.41	387%

As on 31st March, 2025, the Companys Equity Share Capital stood at 12.62 crores compared to 9.21crores as of 31st March, 2024. This increase is because of the IPO issue during the year.

Total long-term borrowings of K2IL as of 31st March, 2025 stood at 3.24 crore vis-a-vis 3.01 crore as on 31st March, 2024. Our interest cost increased by 19% during the year from 2.70 crore in FY24 to 3.20 crore in FY25.

Our Gross Fixed Assets as of 31st March, 2025 stood at 13.07 crore vis-a-vis 12.01 crore as on 31st March, 2024, an increase of 9%.

Key financial ratios

Particular	FY 25	FY 24	% Change	Reason for change
Trade Receivables Turnover (in times)	1.54	2.24	-31.10	The decrease in trade receivables ratio is primarily due to increase in trade receivables as compared to FY24.
Current Ratio (in times)	1.58	1.67	-5.41	N/A
Debt-Equity Ratio (in times)	0.72	0.56	28.82	The increase in the ratio is due to a rise in both borrowings and shareholders capital, with borrowings contributing a larger proportion of the increase than share capital.
Net Profit Ratio (%)	794	11.50	-30.93	The ratio has decreased as the increase in net profit after taxes has not increased in proportion to increase in revenue.
Return on Equity Ratio (%)	19.18	42.42	-54.77	Due to increase in share capital

Risk management

A thorough risk-management framework allows us to preemptively monitor risks emanating from the internal and external environment. As a result, we have been able to consistently create value for all our stakeholders, despite industry cycles and economic headwinds.

Our risk mitigation plan

The Board takes the following steps as a part of its risk management and mitigation plan:

• Defines the roles and responsibilities of the Risk Management Committee

• Participates in major decisions affecting the organizations risk profile

• I ntegrates risk-management reporting with the Boards overall reporting framework

The Company functions under a well-defined organization structure. Flow of information is well defined to avoid any conflict or communication gap between two or more departments. Second-level positions are created in each department to continue the work without any interruption in case of nonavailability of functional heads. Proper policies are followed in relation to maintenance of inventories of raw materials, consumables, key spares and tools to ensure their availability for planned production programmes. Effective steps are being taken to reduce the cost of production on a continuing basis, taking various changing scenarios in the market.

Risks	Mitigation measures	Effect of risk mitigation measures
Economic risk The Countrys or industrys economic health may affect the Companys performance, demand for products and overall growth prospects.	K2IL has thoughtfully expanded its business portfolio by venturing into key sub-sectors within the infrastructure space, such as water, railways, roadways, and EPC construction, alongside a wide range of infrastructure-related services. This strategic diversification not only strengthens our market presence but also creates a more resilient revenue model, capable of withstanding fluctuations in any single sector.	We focus on reducing our dependency on any one single industry, mitigating the adverse impact of an economic downturn by expanding into multiple sectors and maintaining a healthy order book.
Competition risk Intense competition in the market could reduce the Companys ability to win contracts and secure new projects.	K2IL focused on positioning itself as a complete solution provider with a presence across the value chain and a proven track record of efficiently executing challenging infra projects and fostering strong client relationships. Furthermore, ongoing R&D initiatives is expected to drive innovation, enhancing the Companys competitiveness.	The Companys growing market presence and project execution capabilities has helped us garner customer confidence, translating into a higher rate of order acquisition and overall business growth.
Risk of delay in order completion Failure to complete orders in a time bound manner can lead to penalties and damage to the Companys reputation.	K2IL employs robust operational policies supported by a skilled team of professionals. The Company adopts project management frameworks and imbibed the latest technologies within its daily operation for efficient project monitoring and execution, ensuring timely delivery.	K2ILs strict adherence to operational policies and project management practices minimizes
Technology risk Rapid technological advancements may render certain products or solutions obsolete, affecting the Companys competitiveness.	K2IL is committed to driving continuous innovation and investing in research and development (R&D). The company actively upgrades its technologies to remain ahead of market trends, ensuring it stays at the cutting edge.	The Companys commitment to innovation and technological advancement empowers it to deliver projects in time, ensuring it stays competitive and relevant in a fastchanging market.
Government policy risk Changes in government policies, regulations, or priorities may disrupt business operations and impact growth prospects.	K2IL benefits from the current governments pro-reform policies, which are designed to make doing business easier. The company stays vigilant in tracking policy changes and adapts its strategies to stay ahead.	The Companys adaptability to changing Government policies ensures business continuity and minimises the potential disruption caused by policy changes.

Internal control systems and their adequacy

The Company has in place strong internal control procedures commensurate with its size and operations. The Company believes that safeguarding of assets and business efficiency can be prolonged by exercising adequate internal controls and standardizing operational processes. The internal control and risk management system is structured and applied in accordance with the principles and criteria established in the corporate governance code of the organisation. It is an integral part of the general organizational structure of the Company and Group and involves a range of personnel who act in a coordinated manner while executing their respective responsibilities. The Board of Directors offers its guidance and strategic supervision to the Executive Directors and management, monitoring and support committees.

Human resource

At K2IL, we believe that a company grows best when its people feel truly empowered, valued, and inspired. Thats why our business strategy places a strong emphasis on fostering a workplace culture where every employee feels supported and motivated to excel. Our HR policies are thoughtfully aligned with industry best practices, helping us build a diverse and capable talent pool that continues to drive sustainable growth.

We take pride in creating an inclusive environment that welcomes professionals from varied socio-economic backgrounds, states, and cultures, nurturing their potential through structured training, mentorship, and learning opportunities. K2IL is widely recognised for its collaborative, respectful, and performance-driven work culture, making it a preferred destination for top talent in the industry.

With a continued focus on human capital, we prioritise open communication, fairness, employee well-being, and longterm engagement. These values have helped us maintain one of the lowest attrition rates in the sector and position ourselves as an ‘employer of choice

Health and safety measures

Ensuring the safety of our personnel is of the highest importance. The factory heads take the lead on our safety focus, carrying out regular reviews across the factory regarding health, safety, and the environment (HSE). Through their invaluable help, we have taken multiple steps to increase the health and safety of our personnel. In addition, we have organized small teams at each of our manufacturing sites to rapidly detect and effectively manage safety matters. Our Company maintains an extensive range of health and safety protocols that must be strictly adhered to at all sites and by all personnel.

The focus on health and safety protocols was further stepped up during the year in response to the pandemic. Apart from following the government guidelines, we carried out regular sanitization and ensured adequate physical distancing. We also swiftly introduced measures to periodically test employees and regulated entry through the oximeter and thermal screening. We also launched wellness programmes for employees and their families to help build resilience, manage change, and enhance their wellbeing during this challenging period.

Cautionary Statement

The statements made in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, 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 the government regulations, tax laws & other statutes & other incidental factors.