KP Green Engineering Ltd Management Discussions

Management Discussion and Analysis

The economic forecast for 2025 paints a cautious picture, with global growth expected to slow to around 2.3%, nearly half a percentage point below earlier projections. Outside of outright recessions, this would mark one of the weakest outcomes since the 2008 global financial crisis. The slowdown stems from multiple factors, including mounting trade barriers, growing uncertainty in policy direction, and rising debt levels that are restricting fiscal flexibility. Heightened trade disputes, particularly significant tariff increases among leading economies such as the United States, have disrupted supply chains, discouraged investor confidence, and lowered growth expectations for nearly 70% of countries worldwide. This deepening fragmentation of global trade is compounded by unstable policy conditions, which have further weakened business confidence and slowed recovery, especially in emerging markets and developing economies (EMDEs) where debt has climbed to record highs and financial risks are intensifying.

The slowdown is evident across nearly all regions. Developing economies are projected to grow by 3.8% in 2025, edging up only slightly to 3.9% through 2026–27, over a full % point lower than their average growth over the last decade. Outside of Asia, growth challenges are even more pronounced, with roughly 60% of these economies performing worse than in prior years. Low-income economies are forecast to expand by about 5.3%, still 0.4% points below earlier expectations, reflecting persistent structural weaknesses and external pressures. Per-capita income growth in developing countries is expected to reach just 2.9%, well short of the 2000–2019 average. At this pace, it could take nearly 20 years for developing economies, excluding China, to regain their pre-pandemic growth path. Advanced economies are also slowing, limiting global demand, and widening the gap between high- and low-income nations.

Trade activity is showing a marked loss of momentum. Global trade growth has dropped sharply from an average of 5% in the 2000s to below 3% in the current decade, closely tracking weaker global GDP growth. Inflation remains sticky, with 2025s global average projected at 2.9%, higher than pre-pandemic norms, partly due to tariff-driven price pressures and tight labour markets in advanced economies. A range of risks could further weaken growth, including unprecedented debt levels, worsening trade conflicts, declining demand in major economies, and disruptions from geopolitical tensions or climate-related extremes. Without timely and effective policy action, these vulnerabilities may trigger a deeper and more prolonged slowdown, reducing living standards and reversing progress in development.

The data points to an urgent need for coordinated measures to revive global momentum. Easing trade frictions and reversing tariff increases could potentially add up to 0.2% points to growth in 2025–26. If the current trends persist, the first seven years of the 2020s could go down as the weakest stretch of average global growth since the 1960s.

Source: World Bank Global Economic Prospects (2025)

Indias economy in 2025 is charting a path of notable resilience and consistent growth, according to the latest Reserve Bank of India (RBI) publication. Real GDP for the financial year 2025–26 is projected to rise by 6.5%, matching the pace achieved in the previous year, once again cementing Indias position as the fastest-growing major economy worldwide. This steady performance comes despite ongoing global challenges such as geopolitical frictions, rising trade protectionism, and uneven recoveries across other major economies. Strong domestic fundamentals have underpinned this momentum, with consumption rebounding sharply in both rural and urban areas, aided by favourable monsoon patterns, stable inflation, and improving income levels. This renewed consumption demand, combined with sound balance sheets in the banking and corporate sectors, has created fertile conditions for expansion in multiple industries.

Government-led capital expenditure remains a cornerstone of Indias growth approach, with infrastructure outlays delivering both direct stimulus and broader benefits across manufacturing, construction, and services. The RBI notes the significant role of the services sector, which contributed 64.1% of Gross Value Added (GVA) and expanded by a solid 7.5%. Agriculture also registered healthy growth, buoyed by record food grain production, while industrial growth eased but stayed positive at 4.3%. The National Manufacturing Mission, introduced in the 2025–26 Union Budget, is expected to strengthen the Make in India program, create employment opportunities, and reinforce the manufacturing sectors position as a long-term driver of economic expansion.

Inflation pressures, once a concern for household spending and business investment, have receded markedly. Headline inflation dropped to 4.6% in 2024–25, staying comfortably within the RBIs target range, while core inflation fell to 3.5% and food inflation to 2.9% by March 2025. Fuel prices registered a deflationary trend, helped by lower global energy costs. This favourable inflation backdrop, supported by RBI rate cuts totalling 100 basis points since February, has allowed for a broadly pro-growth stance without compromising price stability. The central bank foresees inflation remaining aligned with its medium-term objective, with the possibility of further softening in the months ahead if crop yields stay strong and global energy markets remain steady.

Indias financial sector mirrors this economic strength. Capital markets have seen surging retail investor participation, with their numbers climbing from 4.9 crore in 2019 to 13.2 crore by the end of 2024. Domestic savings have risen to 5.1% of gross national disposable income, while the external debt-to-GDP ratio was just 19.1% as of December 2024, among the lowest for emerging markets. The RBI reported a record annual surplus, attributed to robust foreign exchange gains, stronger domestic returns, and careful asset management. Foreign assets, including gold, now make up most of the RBIs balance sheet, which expanded by 8.2% YOY.

Source: Reserve Bank of India

Nonetheless, certain risks persist. The RBI warns that external uncertainties, particularly relating to trade policy shifts, financial market instability, and ongoing geopolitical stress, could weigh on exports and investor sentiment. On the domestic front, policy priorities should remain focused on expanding employment, increasing per capita incomes, and ensuring equitable access to the benefits of technological advances and productivity gains. With digitalization accelerating and services continuing to thrive, Indias macroeconomic fundamentals appear well placed to deliver sustained and inclusive growth.

In conclusion, the 2025 RBI report portrays an economy that has weathered global turbulence through strong internal drivers, careful policy management, and resilient investor confidence. With consumption and capital investment set to remain key growth engines, inflation contained, and the financial system in healthy shape, India enters the year ahead with a uniquely optimistic economic outlook despite the challenges that lie ahead.

The global green energy infrastructure sector achieved unprecedented milestones in 2024, with renewable energy investment exceeding $2.1 trillion for the first time, representing an 11% increase from the previous year. The renewable energy market reached USD 1.51 trillion in 2024 and is projected to grow to USD 4.86 trillion by 2033 as per BloombergNEF.

Global renewable energy capacity experienced record-breaking expansion, growing by 15.1% to reach 4,448 gigawatts (GW) with 585 GW of new additions throughout 2024. Solar energy dominated this growth, accounting for over three-quarters of new renewable capacity additions, while wind energy contributed significantly to overall expansion. This growth trajectory positions the sector to potentially achieve the COP28 commitment to triple global renewable energy capacity by 2030.

Despite remarkable growth, the sector faces significant challenges. Grid integration issues have emerged as a primary constraint, with almost 1,000 GW of solar projects and 500 GW of wind capacity waiting for grid connection across Europe and the United States. Investment in transmission infrastructure must double to approximately $400 billion annually by 2030 to support renewable energy expansion, as per McKinsey.

Supply chain constraints continue to impact project development, with lead times for critical grid components increasing significantly. Manufacturing capacity expansion is underway, with companies announcing significant investments to address these constraints.

Achieving the global commitment to triple renewable energy capacity by 2030 requires sustained annual deployment rates of approximately 16.6%. Current growth rates demonstrate progress toward this target but indicate the need for accelerated deployment. The International Energy Agency projects that renewable energy investments must reach $880 billion annually by 2030 to meet global climate objectives.

India has emerged as a global leader in renewable energy deployment, with the countrys renewable energy capacity achieving historic growth in fiscal year 2024-25. Indias cumulative renewable energy capacity increased to 198.73 GW as of December 2024, registering a ~16% year-on-year growth rate. This represents one of the highest growth rates among major economies globally and demonstrates Indias commitment to clean energy transition, as per MNRE.

Indias renewable energy success stems from comprehensive policy frameworks and ambitious national targets. The country aims to achieve 500 GW of non-fossil fuel capacity by 2030, representing a five-fold increase from current levels. The National Green Hydrogen Mission, with an outlay of 19,744 crore, targets production of 5 million metric tons per annum of green hydrogen by 2030 and is expected to leverage over 8 lakh crore in total investments while creating 600,000 jobs.

The PM Surya Ghar: Muft Bijli Yojana program exemplifies Indias innovative approach to distributed energy systems, facilitating over 700,000 rooftop solar installations within ten months of launch. This program aims to enable 10 million households to generate their own electricity through rooftop solar installations, providing free electricity up to 300 units per month.

Despite remarkable achievements, India faces several challenges in its renewable energy transition. The deteriorating financial health of distribution companies (DISCOMs) affects renewable energy deployment by limiting power purchase agreement execution. The countrys 100% reliance on imports for critical minerals including lithium, cobalt, and nickel exposes it to supply chain vulnerabilities. Grid integration challenges intensify as renewable energy penetration increases, requiring substantial investments in transmission infrastructure and grid modernization. India needs to double its renewable energy deployment rate to meet 2030 targets, requiring enhanced international climate finance and technical assistance programs.

Indias offshore wind potential presents significant future opportunities, with the government targeting 30 GW of offshore wind capacity by 2030. The countrys vast coastline and favourable wind conditions position it to become a major offshore wind market, potentially rivalling established markets in Europe and Asia.

The convergence of policy support, technological innovation, and market dynamics positions India to maintain its leadership role in global renewable energy deployment while addressing domestic energy security and climate commitments. Success in achieving Indias ambitious renewable energy targets will significantly influence global efforts to triple renewable capacity by 2030 and limit temperature increases to 1.5?C.

The global hot-dip galvanised steel market has shown solid growth in recent years and continues to expand due to its widespread use in industries that demand durable, corrosion-resistant steel. The market has grown from $48.57 billion in 2024 to an estimated $52.03 billion in 2025, representing a compound annual growth rate (CAGR) of 7.1%. It is projected to further increase to $67.56 billion by 2029, growing at a CAGR of 6.7% during the forecast period.

• Infrastructure Growth and Urbanisation

Strong performance in new infrastructure development and urbanisation projects is a key market driver. Governments are increasing investment in public infrastructure, urban renewal, transportation networks, and smart cities. This is fuelling demand for hot-dip galvanised steel in applications like bridges, road barriers, transmission towers, and building structures.

• Dominance of the Construction Sector

The construction industry remains the largest consumer of hot-dip galvanised steel. The materials ability to provide a protective zinc coating that resists corrosion makes it ideal for structural steel in buildings, roofing, and exterior applications exposed to the elements.

• Automotive Sector Demand

The automotive industry is another significant application area, utilising galvanised steel for chassis, body panels, underbody components, and safety-critical structures. The transition to electric vehicles is further boosting demand, given EV designs require lightweight yet highly durable materials that withstand environmental exposure.

• Renewable Energy Expansion

The renewable energy sector increasingly uses hot-dip galvanised steel in solar panel mounting structures, wind turbine towers, and transmission infrastructure. Its long service life, often exceeding 25 years, makes it ideal for outdoor installations in harsh climates.

• The introduction of advanced coatings, including zinc-aluminium-magnesium variants, enhances performance and extends lifespan in coastal and industrial environments.

• Automation, smart manufacturing, and Industry 4.0 technologies are improving galvanising efficiency, reducing waste, and optimising quality control.

• Industry players are focusing on recyclability and low-maintenance materials to meet sustainability demands. Hot-dip galvanised steel fits these criteria due to high recyclability rates.

• Hot-dip galvanised steel is finding new applications in modular and prefabricated construction, which favours prefabricated steel frameworks. Growth opportunities also exist in telecommunications (5G infrastructure) and transportation upgrades, where durable steel components are crucial.

The market will continue to expand steadily due to increasing applications in construction, automotive, energy, and industrial sectors. Sustained infrastructure investment, ongoing urban development, renewable energy adoption, and technology-driven process improvements will keep hot-dip galvanised steel in strong demand through at least 2029.

KP Green Engineering Limited, formerly known as K P Buildcon Private Limited, is one of the oldest entities of the KP Group, founded by Dr. Faruk G. Patel. Incorporated in 2001, the Company has its roots in the KP Groups legacy dating back to 1994. Beginning with hot-dip galvanised fabrication of steel products, KP Green Engineering has evolved significantly over the years into a one-stop solution provider for renewables and infrastructure sector.

For over 24 years, the Company has steadily expanded its presence across India, driven by a commitment to sustainability, innovation, and excellence. Its diversified operations now encompass fabrication, galvanisation, renewables, power and transmission, telecommunication, railways, urban and rural infrastructure, and construction infrastructure. Today, KP Green Engineering operates state-of-the-art manufacturing facilities located at Dabhasa, Kural, Por, and Matar, boasting a combined production capacity of 142,500 MT per annum, soon to be scaled up to 400,500 MT per annum. Its range of meticulously engineered products includes module mounting structures in fixed tilt and solar tracker designs, windmill lattice towers, cable trays and earthing materials, pooling sub-station developments, pre-engineered buildings, transmission line towers, and metal beam crash barriers.

Pioneering an end-to-end solutions approach, the Company manages every stage of the process, from engineering and design to fabrication, galvanisation, and deployment, all under one roof. KP Green Engineering is an ISO certified Company and operates an in-house quality control laboratory for stringent pre- and post-production inspections to ensure the highest standards.

It is also a Certified Great Place to Work, reflecting its inclusive and employee-centric work environment, and holds an ICRA A- (Stable) credit rating, signifying strong financial stability. As an empanelled vendor with prestigious clients such as GETCO, MAHATRANSCO, EIL, BSNL, and others, the Company has reinforced its reputation for excellence and reliability.

Currently, KP Green Engineering is executing a large-capacity expansion project at its Matar, Bharuch facility, which will significantly boost its manufacturing capabilities and solidify its position as a trusted leader in delivering innovative, sustainable, and reliable infrastructure solutions across India.

During the year, the Company achieved notable growth, with consolidated Total Income rising by 99% to 702 crore from 352 crore in the previous year. EBITDA advanced sharply by 103% to 115 crore, reflecting sustained improvements in operational performance. Profit After Tax reached a record 73 crore, marking a 109% increase, while Earnings Per Share rose by 53% to 14.7 from 9.6 in FY24, underscoring the Companys focus on delivering superior returns to shareholders. These milestones reflect a year of strong market traction, disciplined execution, and reinforced financial strength.