Lloyds Engineering Works Ltd Management Discussions

Global economic review

Overview

Global economic growth declined marginally from 3.3% in 2023 to an estimated 3.2% in 2024. This was marked by a slowdown in global manufacturing, particularly in Europe and parts of Asia coupled with supply chain disruption and weak consumer sentiment. In contrast, the services sector performed more creditably.

The growth in advanced economies remained steady at 1.7% from 2023 to

2024 as the emerging cum developing economies witnessed a growth decline at 4.2% in 2024 (4.4% in 2023).

On the positive side, global inflation was expected to decline from 6.1% in 2023 to 4.5% in 2024 (projected at 3.5% and 3.2% in 2025 and 2026 respectively). This decline was attributed to the declining impact of erstwhile economic shocks, and labour supply improvements. The monetary policies announced by governments the world over helped keep inflation in check as well.

The end of the calendar year was marked by the return of Donald Trump as the new US President. The new US government threatened to impose tariffs on countries exporting to the US unless those countries lowered tariffs for the US to export to their countries. This enhanced global trade and markets uncertainty and emerged as the largest singular uncertainty in 2025.

Regional growth (%)	2024	2023
World output	3.2	3.3
Advanced economies	1.7	1.7
Emerging and developing economies	4.2	4.4

Outlook

The global economy has entered a period of uncertainty following the imposition of tariffs of products imported into the USA and some countries announcing reciprocal tariffs on US exports to their countries. This is likely to stagger global economic growth, the full outcome of which cannot be currently estimated. This risk is supplemented by risks related to conflicts, geopolitical tensions, trade restrictions and climate risks. In view of this, World Bank projected global economic growth at 2.7% for 2025 and 2026, factoring the various economic uncertainties. (Source: IMF, United Nations)

Indian economic review

Overview

The Indian economy grew at 6.5% in FY 2024-25, compared to a revised 9.2% in FY 2023-24. This represented a four-year low due to a moderate slowdown within the Indian economy (marked by slower manufacturing growth and a decline in net investments). Despite the slowdown, India retained its position as the worlds fifth-largest economy. Indias nominal GDP (at current prices) was Rs. 330.68 Trillion in FY 2024-25 (Rs. 301.23 Trillion in FY 2023-24). The nominal GDP per capita increased from Rs. 2,15,936 in FY 2023-24 to Rs. 2,35,108 in FY 2024-25, reflecting the impact of an economic expansion.

The Indian rupee weakened 2.12% against the US dollar in FY 2024-25, closing at Rs. 85.47 on the last trading day of FY 2024-25. In March 2025, the rupee recorded the highest monthly appreciation since November 2018, rising 2.39% (arising out a weakening US dollar). Inflationary pressures eased, with CPI inflation averaging 4.63% in FY 2024-25, driven by moderating food inflation and stable global commodity prices. Retail inflation at 4.6% in FY 2024-25, was the lowest since the pandemic, catalysing savings creation.

Indias foreign exchange reserves stood at a high of USD 676 Billion as of April 4, 2025. This was the fourth consecutive year when rating upgrades outpaced downgrades on account of strong domestic growth, rural consumption, increased infrastructure investments and low corporate leverage (annualised rating upgrade rate 14.5% exceeded the decade-long average of 11%; downgrade rate was 5.3%, lower than the 10-year average of 6.5%).

Gross foreign direct investment (FDI) into India rose 13.6% to USD 81 Billion during the last financial year, the fastest pace of expansion since 2019-20. The increase in the year was despite a contraction during the fourth quarter of 2024-25 when inflows on a gross basis declined 6% to USD 17.9 Billion due to the uncertainty caused by Donald Trumps election and his assertions around getting investments back into the US.

Growth of the Indian economy

	FY 22	FY 23	FY 24	FY 25
Real GDP growth (%)	8.7	7.2	9.2	6.5

Growth of the Indian economy quarter by quarter, FY 2024-25

	Q1 FY 25	Q2 FY 25	Q3 FY 25	Q4 FY 25
Real GDP growth (%)	6.5	5.6	6.2	7.4

The banking sector continued its improvement, with gross non-performing assets (NPA) for scheduled commercial banks (SCBs) declining to 2.6% as of September 2024, down from 2.7% in March 2024. The capital-to-risk-weighted assets ratio for SCBs stood at 16.7% as of September 2024, reflecting a strong capital position.

Indias exports of goods and services reached USD 824.9 Billion in FY 2024-25, up from USD 778 Billion in the previous fiscal year. The Red Sea crisis impacted shipping costs, affecting price-sensitive exports. Merchandise exports grew 6% YoY, reaching USD 374.1 Billion.

Indias net GST collections increased 8.6%, totalling Rs. 19.56 Lakhs Crores in FY 2024-25. Gross GST collections in FY 2024-25 stood at Rs. 22.08 Lakhs Crores, a 9.4% increase YoY.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in FY 2024-25. The industrial sector grew by 6.5%, supported by growth in construction activities, electricity, gas, water supply and other utility services. Indias services sector grew at 8.9% in FY 2024-25 (9.0% in FY 2023-24), driven by public administration, defence and other services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in FY 2024-25, compared to 8.6% in FY 2023-24. Meanwhile, the construction sector expanded at 9.4% in FY 2024-25, slowing from 10.4% in the previous year.

Manufacturing activity was subdued in FY 2024-25, with growth at 4.5%, which was lower than 12.3% in FY 2023-24. Moreover, due to lower public spending in the early part of the year, government final consumption expenditure (GFCE) is anticipated to have slowed to 3.8% in FY 2024-25, compared to 8.1% in FY 2023-24.

The agriculture sector grew at 4.6% in 2024-25 (1.4% in 2023-24). Trade, hotel, transport, communication and services related to broadcasting segment were estimated to grow at 6.4% in 2024- 25 (6.3% in 2023-24).

From a demand perspective, the private final consumption expenditure (PFCE) exhibited robust growth, achieving 7.2% in FY 2024-25, surpassing the previous financial years rate of 5.6%.

The Nifty 50 and SENSEX recorded their weakest annual performances in FY 2024-25 in two years, rising 5.3% and 7.5% during the year under review respectively. Gold rose 37.7% to a peak of USD 3,070 per ounce, the highest increase since FY 2007-08, indicating global uncertainties.

Total assets managed by the mutual fund (MF) industry jumped 23% or Rs 12.3 Lakhs Crores in fiscal 2025 to settle at Rs 65.7 Lakhs Crores. At close of FY 2024-25, the total number of folios had jumped to nearly 23.5 Crores, an all-time peak. During last fiscal, average monthly systematic investment plan (SIP) contribution jumped 45% to Rs 24,113 Crores.

Foreign portfolio investments (FPIs) in India experienced high volatility throughout 2024, with total inflows into capital markets reaching approximately USD 20 Billion by year-end. However, there was significant selling pressure in the last quarter, influenced by new tariffs announced by the new US government on most countries (including India).

Outlook

India is expected to remain the fastest-growing major economy. Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tariff levies on India and other countries. The following are some key growth catalysts for India in FY 2025-26.

Tariff-based competitiveness: India identified at least 10 sectors such as apparel and clothing accessories, chemicals, plastics and rubber where the US high tariffs give New Delhi a competitive advantage in the American market over other suppliers. While India faced a 10% tariff after the US suspended the 26% additional duties for 90 days, the levy remained at 145% on China, the biggest exporter to the US. Chinas share of apparel imports into the US was 25%, compared with Indias 3.8%, a large opportunity to address differential (Source: Niti Aayog).

Union Budget FY 2024-25: The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasizing agriculture, MSMEs, investment, and exports as the four primary growth engines. With a fiscal deficit target of 4.4% of GDP, the government reinforced fiscal prudence while allocating Rs. 11.21 Lakhs Crores for capital expenditure (3.1% of GDP) to drive infrastructure development. The February 2025 Budget marked a shift in approach, with the government proposing substantial personal tax cuts. Effective April 1, 2025, individuals earning up to Rs. 12 Lakhs annually will be fully exempt from income tax. Economists estimate that the resulting Rs. 1 Lakh Crore in tax savings could boost consumption by Rs. 3-3.5 Lakhs Crores, potentially increasing the nominal private final consumption Expenditure (PFCE) by 1.5-2% of its current Rs. 200 Lakhs Crores.

Free trade agreement: In a post-Balance Sheet development, India and the United Kingdom announced a free trade agreement to boost strategic and economic ties. This could lead to a significant increase in the export competitiveness of Indian shipments in the UK across the textiles, toys, leather, marine products, footwear, and gems & jewellery sectors. About 99% of Indian exports to UK will enjoy zero-duty access tariff cuts; India will cut tariffs on 90% of tariff lines and 85% could become fully duty-free within 10 years.

Pay Commission impact: The 8th Pay Commissions awards could lead to a significant salary revision for nearly ten Million central government employees. Historically, Pay Commissions have granted substantial pay hikes along with generous arrears. For instance, the 7th Pay Commission more than tripled its monthly salaries, raising the range from Rs. 7,000 to Rs. 90,000 to Rs. 18,000 to Rs. 12.5 Lakhs, triggering a widespread ripple effect.

Monsoons: The India Meteorological Department predicted an ‘above normal monsoon in 2025. This augurs well for the countrys farm sector and a moderated food inflation outlook.

Easing inflation: Indias consumer price index-based retail inflation in March 2025 eased to 3.34%, the lowest since August 2019, raising hopes of further repo rate cuts by the Reserve Bank of India. Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of FY 2025-26. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26.

Lifting credit restrictions: In November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to 9-13% between September 2023 and 2024. However, under its new leadership, the RBI has prioritised restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks, and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Global engineering market overview

The engineering services market size is estimated at USD 1.74 Trillion in 2025, and is expected to reach USD 2.14 Trillion by 2030, at a CAGR of 4.2% during the estimated period 2025-2030. The engineering services industry is experiencing a significant transformation driven by technological advancement and digital innovation.

The industry has only 25% of architectural and engineering services companies, who currently consider themselves digitally advanced, an overwhelming 76% anticipate achieving digital maturity within the next five years. This digital evolution encompasses the integration of artificial intelligence, cloud computing, and advanced analytics, fundamentally reshaping how engineering services are delivered and consumed. The industrys digital transformation is particularly evident in areas such as real-time data analysis, automated design processes, and enhanced project management capabilities, enabling service providers to deliver more efficient and precise solutions.

The global economy is expected to maintain a steady growth rate of 3.3% in both 2025 and 2026, although the pace of growth varies significantly across countries. Advanced economies are experiencing mixed trends, with some seeing upward revisions in their growth forecasts. The United States, in particular, is showing strong underlying demand, driven by factors such as wealth effects, a more accommodative monetary policy, and favourable financial conditions. This sustained economic growth in both developed and developing nations is, in turn, fuelling the expansion of the engineering services market.

In 2024, North America led the global engineering services market, with Western Europe following closely behind. The market analysis spans major regions including Asia-Pacific, Western Europe, Eastern Europe, North America, South America, the Middle East, and Africa. Countries featured in the report include Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, the UK, the USA, Italy, Canada, and Spain.

Engineering services are instrumental in delivering specialised consultation and customised solutions across industries. These firms support organisations by managing key project functions such as evaluation, design, simulation, and testing—ultimately driving innovation and ensuring product reliability.

The United States dominated North Americas engineering services market in 2024, accounting for approximately 84% of the regions market share. This leadership is underpinned by extensive infrastructure development initiatives, a strong focus on technological advancement, and the presence of leading engineering firms. Meanwhile, Canada has emerged as the fastest-growing market in North America, with a projected compound annual growth rate of around 8% from 2024 to 2029. In Europe, Germany led the regional market with an estimated 36% share in 2024, benefiting from its industrial strength and engineering expertise. The United Kingdom, on the other hand, is poised for rapid expansion, forecasted to grow at approximately 7% CAGR during the 2024–2029 period.

Across the Asia-Pacific region, China maintained its dominant position in the engineering services market, supported by large-scale infrastructure and manufacturing projects. India, however, is emerging as the fastest-growing market in the region, driven by digital transformation initiatives and increasing demand for engineering solutions.

(Source: Research and Markets, Mordor Intelligence, IMF)

Indian engineering market overview

Indias engineering services market is projected to reach USD 88.77 Billion by 2028, growing at a CAGR of 6.35% over the forecast period. As the largest industrial segment in the country, engineering accounts for 27% of all factories and contributes to 63% of foreign collaborations within the industrial sector. This growth is being propelled by sustained capacity expansions across key industries such as infrastructure, power, mining, oil and gas, refining, steel, automotive, and consumer durables, all of which continue to drive strong demand for engineering services.

In FY 2024-25, Indias engineering goods sector achieved a record US $116.67 Billion in exports, marking a robust 6.74 % year on year increase, propelled largely by stronger demand from the US and Middle Eastern markets. Engineering products now constitute a leading 26.7 % share of the countrys total merchandise exports (valued at US $437.4 Billion). The United States remained Indias top export destination in FY 2024-25, with engineering shipments reaching US $19.15 Billion, up 8.7 % from the previous year. The EU, along with markets such as the UAE, Saudi Arabia, and the UK, also remained key buyers of Indian engineering goods.

(Sources: Mordor Intelligence, IBEF, Business Standard,INDbiz.com)

Indian engineering sector drivers

Infrastructure development and construction equipment demand: The Indian engineering sector continues to benefit significantly from rapid infrastructure development. In FY 2024-25, the construction equipment industry grew by 3%, driven by large-scale projects in roads, highways, mining, and urban and rural development. While domestic demand saw a modest increase of 2.7%, exports surged by 10%, reinforcing Indias position as the worlds third-largest construction equipment market. Government initiatives such as the National Infrastructure Pipeline (NIP) and the Gati Shakti plan have been instrumental in accelerating infrastructure projects, thereby boosting demand for construction machinery and related engineering services. These initiatives also emphasize local manufacturing and export promotion, which further strengthen the sectors growth trajectory.

Manufacturing expansion and ‘Make in India: Indias manufacturing sector is rapidly expanding, positioning the country as a preferred global manufacturing hub. The ‘Make in India campaign continues to attract significant investments from multinational corporations across sectors such as electronics, automotive, and food processing. Alongside this, the government has introduced incentives like reduced corporate tax rates for new manufacturing units, encouraging capital expenditure and foreign direct investment (FDI). Geopolitical stability, a large skilled workforce, and cost competitiveness compared to other manufacturing powerhouses like China have made India an attractive destination for production and engineering research and development (R&D) partnerships. This manufacturing expansion is a key driver of growth in the engineering sector.

Export growth and global competitiveness: Engineering goods exports remain a vital pillar of Indias economy, with shipments reaching approximately USD 116.67 Billion in FY 2024-25, reflecting a healthy growth rate of 6.74% year-over-year. Indias engineering exports have a strong presence in key global markets, including the United States, UAE, Saudi Arabia, the United Kingdom, and Germany. This growth is supported by Indias robust engineering capabilities, competitive pricing, and expanding trade agreements that facilitate easier market access. The engineering sector is one of the largest foreign exchange earners for India, underscoring its importance in the countrys global trade portfolio.

Technology and digital transformation: The rapid adoption of technology and digital transformation is reshaping the Indian engineering sector. Increasing demand for advanced technologies such as artificial intelligence (AI), cloud computing, cybersecurity, and digital engineering solutions is driving innovation and efficiency. The rollout of 5G infrastructure across India is further accelerating this transformation by enabling faster data transmission and connectivity, which supports smart manufacturing, IoT integration, and automation. These technological advancements are helping Indian engineering firms enhance productivity, reduce costs, and develop cutting-edge products and services that meet global standards.

Electric vehicles (EVs) and automotive sector: The electric vehicle (EV) industry is emerging as a significant growth driver for the engineering sector in India. Government initiatives like PM E-DRIVE aim to achieve 30%

EV penetration by 2030, encouraging investments in battery technology, vehicle design, and charging infrastructure. Domestic startups and established companies are innovating rapidly, creating new opportunities for engineering services related to automotive design, powertrain development, and electronics. This sectors growth not only contributes to reducing carbon emissions but also stimulates demand for specialised engineering talent and manufacturing capabilities.

Foreign direct investment and policy support: Foreign direct investment continues to flow robustly into Indias engineering and manufacturing sectors. In FY 2023-24, total FDI inflows into manufacturing reached USD 19.04 Billion, reflecting strong investor confidence. The governments proactive policies, including streamlined regulations, sector-specific incentives, and ease of doing business reforms, have made India an attractive destination for foreign collaborations and technology transfers. Investments in frontier sectors such as semiconductors, critical minerals, and renewable energy technologies are further boosting the engineering ecosystem, enabling it to compete globally.

Sectoral contribution to GDP and employment: The engineering sector is a cornerstone of Indias industrial landscape, accounting for 27% of all factories and 63% of foreign collaborations in the industrial sector. Its expansion significantly contributes to the countrys GDP growth, which stood at 6.5% in FY 2024-25, with construction, manufacturing, and public administration being key drivers. The sector also plays a vital role in employment generation, providing jobs across various skill levels, from highly specialised engineers to skilled technicians. This broad-based contribution underscores the engineering sectors importance not only as an economic driver but also as a key enabler of Indias socio-economic development.

(Source: Construction Times, Equipment Times, Metapress, India-Briefing.com, India News Network, Go-global, TICE News)

Steel: India remains a bright spot in the global steel industry and the steel demand in the country is expected to show a healthy growth of 8% in 2024. In FY 2023-24, Indias steel sector witnessed notable growth, with crude steel production reaching 143.6 Million tonnes (MT) and finished steel production totalling 138.5 MT. The growth was supported by the domestic availability of key raw materials like iron ore and cost-effective labour. During the April–December 2024 period, India produced 110.99 MT of crude steel and 106.86 MT of finished steel. In the same period, the consumption of finished steel stood at 111.25 MT, indicating strong domestic demand. Exports of finished steel during this timeframe were recorded at 3.60 MT, while imports were significantly higher at 7.28 MT. Indias domestic steel demand is projected to grow by 9–10% in FY 2024-25, while steel production is estimated to rise by 4–7%, reaching between 123–127 MT.

Nuclear power: India is steadily advancing its nuclear energy program to meet rising energy demands and support its environmental objectives. The government has outlined plans to expand the countrys nuclear power capacity from the current 8,180 MW to 22,480 MW by 2031–32. This includes the construction and commissioning of ten new reactors with a combined capacity of 8,000 MW across six states: Gujarat, Rajasthan, Tamil Nadu, Haryana, Karnataka, and Madhya Pradesh. Pre-project activities for another ten reactors are also underway, with their phased completion targeted by 2031–32. The government has granted in-principle approval for a 6 x 1208 MW nuclear power plant in collaboration with the United States, to be established at Kovvada in Srikakulam district, Andhra Pradesh.

(Source: PIB)

Marine: Indias maritime sector forms the cornerstone of its trade and commerce, facilitating approximately 95% of the countrys trade by volume and 70% by value. With a network of 12 major ports and over 200 notified minor and intermediate ports, the nations port infrastructure plays a critical role in supporting its expanding economy. As the sixteenth-largest maritime nation globally, India holds a pivotal position along key international shipping routes. A significant portion of cargo vessels navigating between East Asia and regions such as Europe, Africa, and the Americas pass through Indian waters, underscoring the countrys strategic maritime importance. Beyond its trade functions, the sector reflects Indias growing influence in global shipping. As of 2023, Indias merchant fleet included 1,530 ships flying the national flag, signaling robust participation in maritime transport. The country also ranks third globally in ship recycling by tonnage, reinforcing its commitment to sustainable maritime operations and circular economy principles.

Indias efforts to modernize and scale up its port infrastructure have yielded substantial results. Between 2014–15 and 2023–24, the cargo-handling capacity of major ports surged from 871.52 Million tonnes to 1,629.86 Million tonnes — a remarkable growth of 87.01%. In FY 2023-24 alone, Indian ports handled 819.22 Million tonnes of cargo, marking a 4.45% increase over the previous year. This momentum parallels the rise in merchandise exports, which grew from USD 417 Billion in FY 2021-22 to USD 451 Billion in FY 2022-23, reflecting the sectors integral role in driving Indias trade performance.

(Source: PIB)

Oil and gas: Indias oil demand is projected to witness a significant surge, doubling to reach 11 Million barrels per day by 2045. Diesel, a major component of this demand, is expected to grow to 163 Million tonnes by 2029–30. By 2045, diesel and gasoline together are anticipated to account for 58% of the countrys total oil consumption, underlining the continued reliance on traditional fuels despite the push for cleaner alternatives.

Natural gas consumption is also on an upward trajectory, projected to grow by 25 Billion cubic metres, registering an average annual growth rate of 9% through 2024. In support of energy security, India aims to commercialize 50% of its Strategic Petroleum Reserves (SPR) to raise funds and invest in additional storage infrastructure to buffer against high oil prices. Additionally, crude oil imports rose by 5.7% in January 2024 and by 0.9% during the April–January 2023–24 period, compared to the same timeframe in the previous year.

To meet the growing demand, Indian refiners are set to increase domestic refining capacity by 56 Million tonnes per annum by 2028, bringing the total capacity to 310 MTPA. Over the past decade, refining capacity has already increased from 215.1 MMTPA to 256.8 MMTPA. The government continues to support sectoral growth by allowing 100% Foreign Direct Investment (FDI) in upstream and private sector refining projects.

Further, in the Union Budget 2024–25, an allocation of Rs. 497.25 Crores (USD 59.75 Million) was made for the development of pipeline infrastructure to inject Compressed Biogas (CBG) into the City Gas Distribution (CGD) network—signalling a strategic shift towards cleaner energy alternatives while bolstering existing infrastructure.

(Source: IBEF)

Manufacturing: Indias manufacturing sector is rapidly emerging as a cornerstone of the countrys economic growth, backed by robust performances in industries like automotive, engineering, chemicals, pharmaceuticals, and consumer durables. Contributing 16–17% of the GDP pre-pandemic, the sector is poised for accelerated expansion, aiming for 25% of GDP by 2025 under initiatives like the National Manufacturing Policy and the Production-Linked Incentive (PLI) schemes. The shift towards automation, digital transformation, and process-driven production is boosting efficiency and productivity, as seen in the HSBC Manufacturing PMI rising to a 16-year high of 59.1 in March. The governments proactive policies, combined with Indias industrial expertise, infrastructure upgrades, and entrepreneurial energy, are positioning the country as a global manufacturing hub with a targeted export capacity of USD 1 Trillion by 2030. Further fuelling this growth is the increasing inflow of Foreign Direct Investment (FDI), which has reached USD 165.1 Billion in manufacturing—a 69% rise over the past decade. India is also offering fresh incentives of up to Rs. 18,000 Crores (USD 2.2 Billion) to support local manufacturing in new sectors such as chemicals, vaccine inputs, and shipping containers. The mobile phone manufacturing industry is expected to generate 150,000 to 250,000 jobs in the coming year, led by giants like Apple and Dixon Technologies, as global demand and local production scale up. With a focus on exports, import substitution, contract manufacturing, and rising domestic demand, Indias manufacturing ecosystem is transforming into a globally competitive, innovation-led growth engine.

Growth drivers

The Indian engineering services market is poised for robust growth in FY 2024–25, driven by several key factors:

Digital transformation and industry 4.0 adoption: The integration of advanced technologies such as artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT) is revolutionizing engineering services. These technologies enhance product design, development, and testing, leading to increased demand for digital engineering solutions across sectors like automotive, aerospace, and manufacturing.

Expansion of global capability centers (GCCs): Indias emergence as a hub for Global Capability Centers is significantly contributing to the growth of engineering research and development (R&D). These centers are attracting substantial investments and are expected to play a pivotal role in driving the countrys technology industry forward.

Government initiatives and policies: Supportive government policies, including the Production-Linked Incentive (PLI) schemes and the National Manufacturing Policy, aim to boost domestic manufacturing and engineering capabilities. These initiatives are designed to increase the manufacturing sectors contribution to GDP and promote sustainable practices.

Rising foreign direct investment (FDI): India has witnessed a significant increase in FDI in the manufacturing sector, reaching USD 165.1 Billion—a 69% rise over the past decade. This influx of investment is enhancing the countrys engineering services capabilities and infrastructure.

Focus on sustainable engineering solutions: There is a growing emphasis on sustainable and environmentally friendly engineering practices. The adoption of green technologies and the development of acid-free steel pickling technology are examples of efforts to reduce environmental impact and meet global sustainability standards.

(Source: IMARC, IBEF)

Indian government initiatives

Infrastructure investment boost: In the Union Budget 2025–26, the Government of India allocated Rs. 11.21 Lakhs Crores toward capital expenditure, marking a 10.1% increase over the revised estimate for FY 2024-25. This investment represents around 3.1% of Indias GDP and is designed to accelerate growth across sectors such as engineering, construction, and manufacturing. The increased allocation is expected to create strong downstream demand for capital goods, industrial equipment, and project-related engineering services, thereby acting as a key growth driver for the engineering sector.

Support for domestic manufacturing through PLI schemes: The Production Linked Incentive (PLI) scheme continues to play a pivotal role in boosting domestic manufacturing. As of the first half of FY 2024-25, the government has disbursed Rs. 1,596 Crores across six approved PLI schemes, adding to the cumulative disbursement of Rs. 9,721 Crores by FY 2023-24-end. The automotive PLI scheme alone, with an outlay of Rs. 20,750 Crores, has attracted investments worth Rs. 67,690 Crores (~USD 8.15 Billion), reflecting growing investor confidence in high-tech and value-added manufacturing. These incentives are helping Indian engineering and component manufacturers strengthen their global competitiveness.

Green steel mission: To support the decarbonisation of the steel industry, the Ministry of Steel has advanced the development of the National Green Steel Mission with an estimated investment of Rs. 15,000 Crores. The mission aims to promote the use of renewable energy, green hydrogen, and recycled scrap to reduce the carbon footprint of steel production. As of FY 2024-25, the ministry has released a Green Steel Taxonomy and is working on regulatory frameworks to operationalize the mission. This initiative is expected to position India as a leader in sustainable steel manufacturing while supporting long-term ESG goals in the engineering sector.

Import regulation measures: To shield domestic producers from low-cost and potentially harmful imports, the government has retained a 12% safeguard duty on specific categories of steel imports. This temporary measure is aimed at preventing market disruption caused by global overcapacity and dumping practices, thereby maintaining fair competition and protecting the interests of Indian manufacturers. It is particularly significant for sectors such as engineering and infrastructure that rely on stable domestic steel supply chains.

Raw material cost reduction: To enhance the availability and reduce the cost of critical raw materials, the government has reduced the Basic Customs Duty on Ferro-Nickel from 2.5% to zero. The duty exemption on ferrous scrap, initially introduced as a temporary relief measure, has been extended until March 31, 2026. These actions are expected to ease input costs for domestic manufacturers, especially in the small and mid-sized engineering segments, and support efficient production across the value chain.

Domestic procurement policy: The "Domestically Manufactured Iron and Steel Products Policy 2025" mandates all central government ministries, departments, and public sector units to prioritize the procurement of locally manufactured steel products. This policy aims to ensure that government-funded projects use Indian steel, thereby supporting the domestic industry and creating a more resilient supply ecosystem. It also aligns with the larger ‘Atmanirbhar Bharat initiative by reinforcing self-reliance in core industrial sectors.

(Source: Press information bureau, Reuters)

Company overview

Lloyds Engineering Works Ltd is a leading Indian company that specializes in customised engineering products and solutions. They offer a comprehensive range of services, including design, engineering, manufacturing, fabrication, and installation, catering to various industries such as oil and gas, steel, power plants, nuclear plants, and boilers. With state-of-the-art manufacturing facilities in Murbad, Thane, and headquarters in Mumbai, Lloyds Engineering Works has earned approvals from esteemed authorities like the Industrial Boiler Regulatory Authority, SGS UK, ASME and the Petroleum and Explosives Safety Organisation, showcasing their commitment to quality and safety. Their product portfolio encompasses a wide range of heavy equipment, machinery, and systems, making them a one-stop solution provider for clients across multiple sectors.(270 employees as on March 31, 2025). The company caters to the following industries,

Hydrocarbon: Manufacturing and Supplying Process Equipment such as Pressure Vessels, Columns, Reactors, Heat Exchangers, Waste Heat Recovery Boilers, Air/Gas /Liquid Dryer Packages

Steel: Fabrication of various equipment for Steel melting shop, manufacturing equipment in the Hot Rolling Mill and Cold Rolling Mill Ball Mills, Rotary Dryer and various other equipment required for iron and steel making

Nuclear: Lloyd steels is registered with BARC & NPCIL for the supply of various equipment based on the basic design engineering by NPCIL and further design engineering, done by LSIL for the equipment

Marine/defence: Manufacturing and supplying various products like a Fin Stabiliser required to be setup in various Navy ships, The Electro-Hydraulic Steering Gear for Marine ships etc

Ports, Jetties & Refineries: Design, engineering & supply critical components like Swivel Joints, Seals, Coupler, Hydraulic valve etc. Leading manufacturers of Marine, and Wagon Loading Arms for handling different products.

Power: Design, and manufacturing of waste heat recovery and other power plants and their various equipment thereof in likes as boilers, condensers, heaters etc

Our financial overview

Analysis of the Standalone profit and loss statement

For FY 2024-25, the companys total revenue increased by 21.07% YoY to Rs. 755.78 Crores as against Rs. 624.24 Crores in FY 2023-24. EBITDA for FY 2024-25 was at Rs. 145.23 Crores compared to Rs.108.44 Crores in FY 2023-24, a growth of 33.93%. EBITDA margin for FY 2024-25 stood at 18.67% versus 17.17% in FY 2023-24, margin expansion of 150 bps.

Particulars (Rs. in Lakhs)	FY 25	FY 24	YoY
Total revenue	77,795.97	63,167.61	23.16
EBIDTA	14,522.71	10,843.69	33.93
EBIDTA margin (%)	18.67	17.17	8.74
Interest	671.81	416.94	61.13
PAT	9,972.62	7,983.83	24.91
PAT margins (%)	12.82	12.64	1.42
Basic EPS(Rs.)	0.86	0.74	16.22
Diluted EPS(Rs.)	0.86	0.73	17.81

PAT in FY 2024-25 grew by 24.91%, at Rs. 9,972.62 Lakhs compared to Rs. 7,983.83 Lakhs. PAT Margin expanded by 18 bps to 12.82 in FY 2024-25 from 12.64% in FY 2023-24.

Key business highlights

Key ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company has identified the following ratios on standalone basis as key financial ratios:

Ratio	As at March 31, 2025	As at March 31, 2024	Reason for variation
Current ratio	2.38	3.21	(25.86)
Debt-equity ratio	0.07	0.18	(61.11)
Interest Coverage Ratio	17.71	28.75	(38.40)
Return on equity ratio	18.88	26.32	(28.27)
Trade receivable turnover ratio	4.26	6.90	(38.26)
Trade payable turnover ratio	7.15	13.52	(47.12)
Net capital turnover ratio	1.14	2.02	(43.56)
Net profit ratio	13.20	12.79	3.21
Return on capital employed	20.17	22.12	(8.82)
Inventory turnover Ratio	10.60	5.76	84.03

Debtors turnover ratio: The ratio has decreased over the previous year on delay in collection.

Inventory turnover ratio: The ratio has improved because of better inventory management.

Interest coverage ratio: During the year, cash flow from operations improved and interest cost declined on account of repayment. Hence, the ratio improved.

Current ratio: Current ratio improved on account of better working capital management.

Debt-equity ratio: The company remains debt-free.

Risk management

The Banks are cautious in their lending to the Corporate Sector perhaps on account of large Non-Performing Assets (NPA). This has impacted the investment by Public and Private Corporate Sectors in their expansion plans. Margins in the Engineering Industry continue to be under pressure. We are continuously up-grading our skills, modernisation, and cost saving. Risk and concerns are being addressed on a continuous basis. The business has weathered the challenges posed by the COVID-19 pandemic by adopting safe working practices, encouraging work from home whenever needed, increasing the virtual meetings, virtual audits and inspections, online approvals amongst other measures. The Companys strong financial statements & negligible financial leverage is advantageous to get benefit of the Risk faced by most of the industries.

Human resources

Human Resources Department (HRD) works continuously for maintaining healthy working relationship with the workers and other staff members. The underlying principle is that workers and staff at all levels are equally instrumental for attaining the Companys goals. The various functions are continuously strengthened by appropriate recruitment. Groups of Graduate Engineers are recruited every year & the Training programs are regularly conducted to update their skills and apprise them of latest techniques. The low attrition rate signifies healthy working relationship of employer and employee. Senior Management is easily accessible for counseling and redressal of grievances if any. The HR Department strives to maintain and promote harmony and coordination amongst Workers, Staff and Members of the Senior Management. The

Company has framed an Employee Stock Option Scheme (ESOP) with rules and regulations as an incentive to employees to increase productivity at all levels. The Industrial Relations in the Companys Units located at Murbad as well as in the Work Sites during the year under review was cordial. As of March 31, 2025, our employee strength stood at 270 .

Internal control systems and their adequacy

The Company believes in systematic working and placing appropriate internal control systems and checks. Proper checks and systems are in place and regular reviews are held by the Head of Department and Senior Management to check that the systems and controls are adhered. The reviews also prescribe changes wherever required. The efficiency of Internal Control Systems is ensured as a combined result of the following activities:

Operational performance is reviewed in the Works as well as in the Corporate Office by the Senior Management through daily follow-up/weekly meetings.

The performance of each function is closely monitored by the Head of

Department and Senior Management through daily/ weekly/monthly review meetings. Reviews of all independent functions are regularly undertaken. Cross functional activities are periodically reviewed.

Various policies are introduced from time to time to ensure effective functioning of various departments, such as Business Development, Projects, Procurement, Commercial, Finance, HR, etc.

Great care is taken at the time of estimation so that we are not only competitive but also, to add positive contribution towards the growth of the Company.

The Internal Auditors of the company conducts Financial, Operational and Management Audit of various functions. Their reports are placed before the Audit Committee / Board and appropriate actions as deemed fit are initiated based on the reports.

The Audit Committee / Board also oversees financial systems, procedures and internal controls and competent to call for any information/document from any department/ function.

Cautionary statement

This statement made in this section describes the companys objectives, projections, expectation and estimations which may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realised by the company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of the company. The company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent development, information or events.