Konstelec Engineers Ltd Management Discussions

Global Economy

• In 2025, the global economy faces a marked moderation, with growth estimated at 2.3%-2.9%, reflecting widespread policy uncertainty, trade tensions, and slower momentum in both advanced and developing markets.

• Inflationary pressures are projected to ease, with consumer price growth falling towards 2% globally, although disparities remain across regions.

• Emerging economies, including India, continue to outpace developed markets, benefiting from robust domestic demand and a growing industrial sector.

• India remains the worlds fastest-growing large economy in 2025, with GDP growth projected at 6.4% for FY2024-25, a moderation from 8.2% in the previous fiscal year but still leading global peers.

• Gross Value Added (GVA) is estimated to have risen by approximately 6.3-6.5% in FY25.

• Indias GDP has crossed US$3.9 trillion as of December 2024, supported by high- frequency indicators—robust GST revenues, manufacturing expansion, and strong core sector output.

• Policy focus remains on capital expenditure (with FY2025 Union Budget allocating T11.21 lakh crore to infrastructure), fiscal prudence, and catalyzing private sector investment.

• Infrastructure development continues to drive national transformation, with major initiatives such as:

• National Infrastructure Pipeline (NIP)

• PM Gati Shakti, Bharatmala, Sagarmala, Smart Cities Mission

• Enhanced emphasis on Public-Private Partnerships and asset monetization

• The 2025-26 Union Budget earmarked TI1.21 lakh crore for infrastructure, maintaining a high level of public investment.

• Experts forecast Indias infrastructure spending to exceed US$1.5 trillion over the next five years, driven by strong government and private sector participation.

• The Power EPC (Engineering, Procurement, and Construction) market is seeing robust expansion, estimated at USD22.4 billion in 2024 and projected to compound at 6.4% CAGR through the coming decade.

• Growth catalysts:

• Surging investments in renewable energy (notably solar and wind)

• Government focus on grid modernization and clean energy

• Increasing demand from commercial, industrial, and infrastructure verticals

• The sectors prospects align with Indias national energy transition, supporting Konstelecs expertise in electrical and automation EPC services.

• Manufacturings share of GDP is estimated at 13-14% in 2025, with expectations of crossing the US$1 trillion mark by FY2025-26 owing to new capacity, policy incentives (PLI scheme), and strong export orders.

• Latest data (June 2025) shows record high PMI and accelerated job creation, underscoring a revival in domestic and export-led demand.

• The governments policy push for "Make in India” and digitalization continues to draw global manufacturers and boost sectoral resilience.

• India is the third-Largest oil consumer and fourth-Largest LING importer globally.

• Policy and legal reforms have modernized the sector, aiming to boost E&P activity and attract foreign investment.

• Refining capacity stands at 256.8 million tonnes per annum (MTPA) (April 2024), with expansion plans targeting 310 MTPA by 2028 through new mega-refinery projects and upgrades.

• Domestic consumption growth and government support for alternative fuels (biofuels, CBG, hydrogen) enhance longterm sector demand.

• Cement production in FY2025 totaled 453 million metric tonnes, a 6.3% year-on-year increase; further 6-7% growth is projected for FY2026, driven by sustained housing and infrastructure demand.

• India remains the worlds second-largest producer, accounting for over 8% of global capacity—crucial for Konstelecs EPC projects across large-capacity plants and expansions.

• Average cement prices have seen an upward trend, supporting sector profitability.

• The Indian paint sector is experiencing robust growth, fueled by strong housing construction and urbanization.

• In 2025, the market stands at an estimated US$10.5 billion (from US$9.6 billion in 2024), and is forecast to reach US$15 billion by 2029 with a CAGR of nearly 9%.

• Drivers include public housing programmes, premiumization, and expansion of organized brands, offering new growth avenues for EPC service providers in infrastructure and industrial segments.

• Konstelec Engineers Ltd. remains well- positioned to capitalize on these structural growth opportunities across the Indian and international EPC landscape, leveraging sector tailwinds, government reforms, and a proven track record of delivering large-scale, complex projects.