NCC Ltd Management Discussions

1. Industry Structure & Developments

1.1 Global Economy

The global economy entered CY (calendar year) 2026 still adjusting to the structural overhangs of the preceding years - fragmented trade, elevated geopolitical risk, and the long tail of synchronised monetary tightening - and has since absorbed a fresh shock with the outbreak of armed conflict in the Middle East from late February 2026. Against this backdrop, the International Monetary Funds (IMF) World Economic Outlook of April 2026 projects global Gross Domestic Product (GDP) growth at 3.1% in calendar year 2026 and 3.2% in 2027, modestly below recent outcomes and well below pre-pandemic historical averages. Advanced economies are expected to grow at a measured pace of around 1.4% in 2026 and 1.6% in 2027, while emerging market and developing economies remain the principal engine of global growth. Within this group, India stands apart - projected by the IMF as the fastest-growing major economy at 6.5% for FY2026-27, even as independent forecasters such as Moodys have moderated their estimates closer to 6.0%, citing energy-cost transmission risks from the Middle East conflict. The dispersion between these institutional projections highlights the range of near-term macroeconomic outcomes. Despite these external uncertainties, Indias domestic-demand-led growth model and sustained public investment programme continued to provide resilience relative to several major economies.

Table 1: IMF World Economic Outlook - Regional Growth Profile (CY2025 to CY2027)

Region	2025	2026	2027
	(%)	(%)	(%)
World	3.4	3.1	3.2
United States	2.1	2.3	2.1
Euro Area	1.4	0.9	1.0
Middle East and Central Asia	3.6	1.9	4.6
Emerging and Developing Asia	5.5	4.9	4.8
Latin America and the Caribbean	2.4	2.3	2.7
Sub-Saharan Africa	4.5	4.3	4.4

Source: International Monetary Fund, World Economic Outlook, April 2026.

1.2 Indian Economy

India retained its position as the fastest-growing major economy through FY2025-26, with macroeconomic conditions broadly supportive of capital formation. The Ministry of Statistics and Programme Implementations (MoSPI) Second Advance Estimate, dated 27 February 2026, placed real GDP growth at 7.6% for FY2025-26, with nominal GDP at Rs.345.47 lakh crore. Growth was supported by resilient domestic consumption, a continued capex push by the Central and State Governments, and a steady recovery in the private investment cycle.

Headline inflation moderated significantly through the year. The Consumer Price Index (CPI), as published by MoSPI, averaged in the low single digits for the first three quarters of FY2025-26, before settling at 3.40% in March 2026 - well within the Reserve Bank of Indias (RBI) tolerance band of 2 to 6 per cent. Sustained food disinflation and favourable base effects through the year created room for the RBI to ease monetary policy.

Over the course of FY2025-26, the policy repo rate was reduced from 6.25% to 5.25%, a cumulative easing of 100 basis points. The accompanying liquidity stance has been broadly accommodative, supporting credit flow to infrastructure and improving the cost-of-funds environment for working-capital-intensive sectors such as construction.

On the fiscal side, the Union Budget 2026-27 set out a deliberate combination of capex expansion and fiscal consolidation. Central Government capital expenditure is budgeted at Rs.12.20 lakh crore for FY2026-27, up from Rs.11.21 lakh crore in FY2025-26 (BE). Once grants-in-aid to states for capital asset creation and capex by Central Public Sector Enterprises (CPSE) are included, total public capital expenditure is budgeted to rise to approximately 5.6% of GDP in FY2026-27, representing a year-on-year increase of close to 20%. The fiscal deficit is targeted to consolidate from 4.4% of GDP in FY2025-26 RE to 4.3% in FY2026-27 BE. For the construction industry, the combination of expanding public capex with credible consolidation is the central macro-fiscal signal underpinning medium-term visibility.

Table 2: Capex Overview - Union Budget 2026-27

Capex Component	FY2024-25	FY2025-26	FY2026-27	FY2025-26	FY2026-27
	(A)	(RE)	(BE)	YoY%	YoY%
Budget Capital Expenditure (Rs. lakh crore)	10.5	11.0	12.2	4.2%	11.5%
Grants-in-Aid for Creation of Capital Assets (Rs. lakh crore)	2.7	3.1	4.9	13.0%	59.9%
Effective Capital Expenditure ( Rs. lakh crore)	13.2	14.0	17.1	6.0%	22.1%
Resources of Public Enterprises - CPSE Capex (Rs. lakh crore)	3.8	4.3	4.8	13.5%	11.5%
Total Capex - Effective + CPSE ( Rs. lakh crore)	17.1	18.4	22.0	7.7%	19.6%
Total Capex (% of GDP)	5.2%	5.2%	5.6%	-	-

Source: Union Budget 2026-27 documents (Actuals, Revised Estimate, Budget Estimate).

Table 3: Ministry-wise Capital Expenditure - Union Budget 2026-27

Major Ministry	FY2024-25 (A)	FY2025-26 (RE)	FY2026-27 (BE)	FY2025-26	FY2026-27
	( Rs. lakh crore)	( Rs. lakh crore)	( Rs. lakh crore)	YoY	YoY
Ministry of Road Transport and Highways	2.9	2.7	2.9	-4.7%	8.1%
Ministry of Railways	2.5	2.5	2.8	0.0%	10.3%
Ministry of Finance	1.8	2.5	2.5	39.0%	-0.6%
Ministry of Defence	1.7	2.0	2.3	15.7%	17.0%
Ministry of Communications	0.8	0.2	0.5	-66.7%	94.4%
Ministry of Housing and Urban Affairs	0.3	0.3	0.3	4.3%	5.5%
Total Capital Expenditure	10.5	11.0	12.2	4.8%	10.9%

Source: Union Budget 2026-27. Road Transport & Railways together account for ~47% of FY2026-27 BE capex.

1.3 State Governments: Significant Partner in Growth

State Governments are a key pillar of public capital expenditure in India, alongside the Centre. The Reserve Bank of Indias annual study of State Budgets indicates that aggregate State capital expenditure has firmed up steadily, rising from 2.4 per cent of GDP in 2021-22 to 2.7 per cent in 2024-25, and is budgeted at 3.2 per cent of GDP for FY2025-26. Aggregate State capex budgeted estimate for FY2025-26 is approximately Rs.9.58 lakh crore across the major States, broadly comparable in scale to the Central Governments own capex envelope of Rs.11.21 lakh crore for FY2025-26 BE, though, as set out below, this aggregate is unevenly distributed across States. Taken together, the Centre and the States are deploying close to Rs.20 to 21 lakh crores of capital expenditure annually, of which a material share flows to physical infrastructure - the addressable market for leading construction companies like us.

The concentration of this State-level capex is itself notable. Within the aggregate, a small group of States accounts for the bulk of the spend: a Bank of Baroda study of State budgets finds that the five largest spenders - led by Uttar Pradesh at roughly 16 per cent of the all-State total, followed by Gujarat, Maharashtra, Madhya Pradesh, and Karnataka - together account for close to half of all State capital expenditure in FY2025-26. For a multi-segment contractor like us, this concentration indicates where the most attractive opportunity pipelines are likely to bid out.

The Centre supplements State capex through the Scheme for Special Assistance to States for Capital Investment, under which 50-year interest-free loans are extended to State Governments over and above their normal Net Borrowing Ceiling. The scheme, launched in FY2020-21 and continued in successive Union Budgets, has anchored State capacity to take up infrastructure projects across sectors including PM Gati Shakti-linked corridors, urban infrastructure, rural roads, and digitisation. The Union Budget 2026-27 has retained the framework with continued outlays linked to milestone-based reforms across mining, urban infrastructure, agriculture digitisation, and financial management. As per available estimates, disbursements under the scheme are estimated to rise from around Rs.12,000 crore in FY2020-21 to Rs.1,50,000 crore in FY2025-26 (Budget Estimate), and in FY2024-25 States are estimated to have financed roughly 19 per cent of their capital outlay through these loans - underscoring the schemes growing role in State capacity to fund infrastructure. Government-led greenfield programmes increasingly run through the National Industrial Corridor Development Programme, implemented by the National Industrial Corridor Development Corporation in partnership with State Governments. In August 2024, the Union Cabinet approved twelve new industrial smart cities across ten States along six corridors, with an investment of Rs.28,602 crore (Press Information Bureau). These build on established corridor nodes developed as State-Centre joint ventures - among them the Dholera Special Investment Region in Gujarat, the Aurangabad Industrial City (AURIC) at Shendra-Bidkin in Maharashtra, and the Integrated Industrial Township at Greater Noida in Uttar Pradesh - each delivered through a special-purpose vehicle combining State and Central participation. For leading construction companies like us, these greenfield townships represent multi-year opportunity pipelines anchored by long-horizon plans.

State-level infrastructure pipelines now extend beyond annual capex into multi-year greenfield programmes. The Andhra Pradesh capital city programme at Amaravati is a notable example - a greenfield capital being developed on the southern bank of the Krishna River, with a 217 sq. km Master Plan envisaging integrated governance, residential, and economic zones. The Phase-1 development of Amaravati, with a programme cost estimated at approximately Rs.15,000 crore as announced in Union Budget 2024-25, is being supported through parallel multilateral financing approved in December 2024 - USD 800 million from the World Bank (Amaravati Integrated Urban Development Program, Project P507508) and USD 788.8 million from the Asian Development Bank (Amaravati Inclusive and Sustainable Capital City Development Program, Project 58395-001), together approximately USD 1.6 billion. Multi-year State-led programmes of this scale, alongside ongoing State investments in urban infrastructure, irrigation, and water supply, expand the addressable market for leading construction companies like us. Beyond Amaravati, several States anchor their own multi-year programmes. Uttar Pradesh, the largest State spender, has budgeted capital expenditure of approximately Rs.1.78 lakh crore for FY2025-26, while Tamil Nadu has budgeted approximately Rs.57,231 crore, an increase of about 22 per cent year on year (PRS Legislative Research). Tamil Nadu is developing the Chennai-Kanyakumari Industrial Corridor, part of the East Coast Economic Corridor, supported by an Asian Development Bank loan of approximately USD 484 million to upgrade around 590 km of State highways. Dedicated Defence Industrial Corridors in Tamil Nadu and Uttar Pradesh, each conceived to attract investment of the order of Rs.10,000 crore, are catalysing supplier-park and testing-facility construction. In Gujarat, the award of the 2030 Commonwealth Games to Ahmedabad - ratified by Commonwealth Sport in November 2025 - is expected to drive a multi-year programme of sports, urban-mobility, and civic-infrastructure build-out across the Ahmedabad-Gandhinagar region. Programmes of this kind, spread across multiple States, broaden the addressable construction pipeline well beyond the Central capex envelope.

Table 4: Public Capital Expenditure - Centre and States (FY2025-26 BE)

Indicator	Centre	States
	(FY2025-26)	(FY2025-26 BE)
Capital expenditure ( Rs. lakh crore)	11.21	9.58 (aggregate, major States)
Capex as % of GDP	3.1%	3.2%
Capex trajectory	Rising	Rising (2.4% in FY2021-22 to 3.2% in FY2025-26 BE)
Key supporting framework	Union Budget capex envelope; CPSE capex	SASCI 50-year interest-free loans; market borrowings

Source: Union Budget 2026-27 (Centre); RBI - State Finances: A Study of Budgets of 2025-26 (State capex as % of GDP trajectory).

1.4 Indian Infrastructure Sector - Demand and Financing

Indias infrastructure capital-expenditure cycle remains firmly in an expansionary phase. The Government of Indias capital outlay has expanded by close to 89 per cent over the four years from FY2021-22 to FY2025-26, rising from Rs.5.90 lakh crore to Rs.11.21 lakh crore (BE), reflecting a sustained recognition of infrastructure as a high-multiplier lever for growth. CRISIL Intelligence, in its Infrastructure Yearbook 2025 (December 2025 sector update), estimates Indias infrastructure capital expenditure will rise to Rs.90 to 100 lakh crore over the five fiscals FY2025-26 to FY2029-30, an increase of approximately 60 per cent over the Rs.59 lakh crore spent during FY2020-21 to FY2024-25, with the private sector expected to take a materially larger share of the next-cycle capex than in the preceding five years. This domestic build-out is unfolding within a global infrastructure investment cycle: the International Energy Agency (IEA) projects that global electricity demand will rise by at least 40 per cent over the coming decade, and global infrastructure capital requirements are estimated at more than USD 106 trillion by 2040 (IEA and McKinsey estimates, as cited in the KKR Infrastructure Outlook 2026, March 2026). Taken together, these projections frame the medium-term addressable market for leading construction companies across roads, railways, power transmission, water, urban infrastructure, ports, airports, and select industrial categories.

The financing architecture supporting this cycle has broadened. The Union Budget allocation continues to anchor public capex but is increasingly complemented by a wider institutional ecosystem. The National Investment and Infrastructure Fund, established in 2015, manages assets of approximately USD 4.9 billion across its sub-funds. The National Bank for Financing Infrastructure and Development, set up in 2021, had sanctioned approximately Rs.2.3 lakh crore (as of mid-2025) and is expected to exceed Rs.3 lakh crore in cumulative sanctions by March 2026, across core infrastructure and social sectors. Cumulative fund mobilisation through Infrastructure Investment Trusts and Real Estate Investment Trusts has crossed Rs.1.6 lakh crore since FY2019-20, unlocking long-duration institutional capital. According to the World Banks Private Participation in Infrastructure Annual Report 2024, India is the dominant recipient of Private Participation in Infrastructure investment in South Asia, accounting for many regional inflows. The Economic Survey 2025-26 notes that infrastructure financing in India is shifting away from a historical dependence on bank credit toward a more diversified mix of capital-market instruments, alleviating asset-liability mismatches on bank balance sheets and improving the sustainability of long-gestation project financing.

Private sector capital expenditure is also expanding alongside public investment. The current cycle is broadly characterised by capacity additions funded predominantly through internal accruals rather than incremental leverage, reflecting the underlying strength of corporate balance sheets entering the cycle. The combination of expanding public capex and a co-moving private capex cycle is supportive of medium-term demand for infrastructure and industrial construction services.

The Union Budget 2026-27 has introduced two notable additions to the institutional toolkit. The Infrastructure Risk Guarantee Fund will provide partial credit guarantees to lenders financing the construction phase of eligible projects, addressing what has historically been the highest-risk segment of the infrastructure financing lifecycle. The City Economic Regions framework, with an outlay of Rs.5,000 crore per region over five years, will channel investment into Tier II and Tier III urban centres, identified by their specific economic growth drivers. Both measures are likely to expand the addressable pipeline for the construction industry over the medium term.

The physical scale of recent infrastructure build-out is itself a notable feature of the current cycle. Across roads, railways, electrification, and aviation, the order-of-magnitude expansion since FY2013-14 illustrates the demand environment within which the Company operates.

Table 5: India Infrastructure Scale-Up - Physical Capacity Build-Out Since FY2013-14

Indicator	FY2013-14 Baseline	Latest Reading	Multiplier
National Highway network (km)	91,287	1,46,572 (Dec 2025)	1.6x
Operational High-Speed Corridors (km)	93	3,052 (Dec 2025)	32.8x
Railway route length (km)	-	69,439 (Mar 2025)	Expanded
Railway electrification (% of network)	32.8%	99.1% (Nov 2025)	Near complete
Number of operational airports	74	164 (2025)	2.2x

Source: Economic Survey 2025-26; Railway electrification - Ministry of Railways, Number of operational airports – PIB.

1.5 Key Government Schemes and Investment Programmes

Several umbrella programmes continue to anchor the infrastructure demand pipeline. The Company participates selectively across these, based on segment fit, contract structure, execution capability, and working-capital characteristics. The most material programmes for the Companys addressable market are summarised in Table 6, with a brief narrative on selected programmes below.

Table 6: Key Government Schemes and Investment Programmes

Programme	Scope and Status	Primary Source
Jal Jeevan Mission (JJM 2.0)	Rural household tap-connection coverage at approximately 81.9% as on 22 May 2026. Mission extended to December 2028 with revised total outlay of Rs.8.69 lakh crore under JJM 2.0.	Department of Drinking Water & Sanitation; Union Budget 2026-27
National Infrastructure Pipeline (NIP)	Live pipeline of 8,640 projects across 63 sub-sectors at various development stages, of which 1,102 are under active development (India Investment Grid, April-May 2026).	India Investment Grid portal; Department of Economic Affairs - NIP Task Force Report (April 2020)
PM Gati Shakti National Master Plan	Integrated, GIS-enabled planning platform that brings road, rail, port, airport, and logistics ministries onto a common project map. Serves as the inter-ministerial framework for sequencing and aligning India\u2019s infrastructure project pipeline.	Press Information Bureau; National Master Plan portal
Roads and Highways (Ministry of Road Transport and Highways (MoRTH) / Bharat Mala)	Anchored by MoRTH FY2026-27 capex commitment alongside a 13,400 km PPP highway pipeline. Bharat Mala Phase-I substantially completed; further phases and access-controlled corridors under planning.	Union Budget 2026-27; Economic Survey 2025-26
Railway Modernisation	Anchored by Ministry of Railways capex commitment for FY2026- 27. Network expansion, Dedicated Freight Corridor extensions, and announced High-Speed Rail corridors form the principal civil works pipeline.	Union Budget 2026-27; Economic Survey 2025-26
Programme	Scope and Status	Primary Source
Urban Transport - Metro & RRTS	Metro and Regional Rapid Transit System expansion across multiple cities, with the Delhi-Ghaziabad-Meerut Namo Bharat corridor operational and a multi-city pipeline at various stages of planning and execution.	Union Budget 2026-27; Economic Survey 2025-26
Power Transmission & Distribution	Relevant Energy ministries- allocation supports the National Electricity Plan 2023-2032, which anchors the medium-term transmission and substation build-out. Battery Energy Storage System capacity additions form part of the same framework.	Union Budget 2026-27; CEA; Economic Survey 2025-26
Ports & Waterways	PPP pipeline of port projects identified for FY2025-26 to FY2030-31. Twenty new National Waterways announced in Union Budget 2026-27.	Economic Survey 2025-26; Union Budget 2026-27
Nuclear Energy Mission	Long-horizon capacity expansion to 100 GWe by 2047 from the current base. Enabling legislative amendments to the Atomic Energy Act announced in Union Budget 2026-27 to enable private participation.	Economic Survey 2025-26; Union Budget 2026-27
New Manufacturing & Capability Schemes	Scheme announced in Union Budget 2026-27 to support domestic manufacturing of high-value construction and infrastructure equipment, with the objective of reducing import dependence over the medium term.	Union Budget 2026-27
City Economic Regions (CER)	Framework announced in Union Budget 2026-27 to develop infrastructure in Tier II and Tier III urban centres identified by economic growth drivers, with a reform-and-incentives structure.	Union Budget 2026-27

Sources. Allocation figures are budget estimates (BE) for FY2026-27 unless stated otherwise.

Table 7: Top Infrastructure Scheme Outlays - FY2026-27 BE (Ranked)

S. No Scheme	FY2025-26 RE	FY2026-27 BE
	( Rs. crore)	( Rs. crore)
1 National Highways Authority of India (NHAI)	1,70,266	1,87,293
2 Road Works (MoRTH)	1,16,337	1,21,999
3 Jal Jeevan Mission / National Rural Drinking Water Mission	17,000	67,670
4 Pradhan Mantri Awas Yojana \u2013 Rural	32,500	54,917
5 Metro Projects	27,450	28,740
6 Pradhan Mantri Awas Yojana \u2013 Urban	7,500	18,625
7 Reform Linked Distribution Scheme (RDSS)	15,671	18,000
8 Construction Works (Defence)	10,106	11,752
9 AMRUT (Atal Mission - Urban Transformation)	7,500	8,000
10 Works under Border Roads Development Board	7,135	7,380
11 Swachh Bharat Mission \u2013 Grameen	6,000	7,192
12 Pradhan Mantri Krishi Sinchai Yojana	6,372	6,587
13 Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM)	5,000	5,000
14 National Ganga Plan	2,687	3,100
15 Nuclear Power Projects	1,333	2,500
16 NCR Transport Corporation (RRTS)	2,000	2,200
17 Interlinking of Rivers	1,808	1,906

Source: Union Budget 2026-27. Schemes ranked by FY2026-27 BE outlay.

Jal Jeevan Mission: Coverage and Remaining Runway

The Jal Jeevan Mission represents one of the largest social infrastructure programmes in Indias recent history. Since its launch in August 2019, rural household tap-connection coverage has expanded from 16.71 per cent to approximately 81.90 per cent as on 22 May 2026 - an addition of approximately 12.62 crore tap connections in under seven years. The remaining 18 per cent of identified rural households is concentrated in geographies with materially higher execution complexity: terrain, source-water availability, and last-mile logistics.

The Union Cabinet, in March 2026, approved the extension of the mission to December 2028 alongside a materially restructured funding pattern. The revised total programme outlay has been enhanced to Rs.8.69 lakh crore, of which the Central share is Rs.3.59 lakh crore - up from the Rs.2.08 lakh crore approved in 2019-20 (an additional Central share of Rs.1.51 lakh crore). The balance of approximately Rs.5.10 lakh crore is to be contributed by States and other sources. Alongside the enhanced outlay, the restructured mission introduces a national digital framework, Sujalam Bharat, under which each village water-supply system will be digitally mapped from source to tap with unique Service Area identifiers for monitoring and governance. For leading construction companies like us active in water infrastructure, the combination of an enhanced multi-year envelope and the digital-governance framework underpinning service-delivery sustainability improves medium-term visibility on the residual coverage opportunity through December 2028.

National Monetisation Pipeline 2.0: Sector-wise Build-Out

The second phase of the National Monetisation Pipeline, launched in the Union Budget 2025-26 and subsequently scaled up, is now sized at Rs.16.72 lakh crore for the five-year period FY2025-26 to FY2029-30, with approximately Rs.5.8 lakh crore targeted from private-sector investment. The expanded scope includes capital investment in PPP infrastructure projects under models such as Design-Build-Finance-Operate-Transfer, in addition to traditional asset-monetisation. Twelve infrastructure sectors are covered, with the top five sectors - highways, power, ports, railways, and coal - together accounting for approximately 87 per cent of the planned monetisation value. NMP 1.0 closed at Rs.5.3 lakh crore, or 89 per cent of its FY2021-22 to FY2024-25 target. The expanded NMP 2.0 envelope, alongside higher private-sector participation, materially expands the addressable PPP pipeline for leading construction companies over the medium term.

Table 8: NMP 2.0 - Sector-wise Monetisation (FY2025-26 to FY2029-30, Rs. 16.72 Lakh Crore)

S. No Sector	Total Value	Share
	( Rs. crore)	(%)
1 Highways, MMLPs, Ropeways	4,42,000	26.4%
2 Power	2,76,500	16.5%
3 Ports	2,63,700	15.8%
4 Railways	2,62,300	15.7%
5 Coal	2,16,000	12.9%
6 Mines	1,00,000	6.0%
7 Urban Infrastructure	52,000	3.1%
8 Civil Aviation	27,500	1.6%
9 Petroleum & Natural Gas	16,300	1.0%
10 Warehousing & Storage	10,000	0.6%
11 Telecom	4,800	0.3%
12 Tourism	1,200	0.1%
Total NMP 2.0	16,72,300	100.0%

Source: NITI Aayog, National Monetisation Pipeline 2.0, sector-wise targets.

1.6 Indian Construction Industry - Structure, Growth and Execution

Having outlined the scale and financing of infrastructure demand in section 1.4, this section turns to the industry that converts that demand into built assets - how fast it is growing, how it is structured, the contracting models through which work is awarded, and the counterparty and payment dynamics that shape its working-capital cycle. This is the environment in which the Company bids for, executes and delivers infrastructure projects.

Construction Industry - Size and Growth

The Indian construction sector is among the largest contributors to national Gross Value Added and a key barometer of the broader capital-expenditure cycle, accounting for approximately 8 per cent of the economys Gross Value Added. Per the MoSPI National Accounts New Series (base year 2022-23), construction-sector Gross Value Added at constant prices grew by 9.9 per cent in FY2023-24 and 7.3 per cent in FY2024-25, with the Second Advance Estimates indicating 7.1 per cent growth for FY2025-26 - placing the sector firmly in mid-to-high single-digit real growth over the cycle. In absolute terms, construction-sector Gross Value Added is estimated at approximately Rs.26.45 lakh crore at current prices for FY2025-26, per the MoSPI National Accounts Second Advance Estimates (New Series, base year 2022-23, released 27 February 2026). Independent credit-rating agency ICRA, in its March 2026 sector update, characterised FY2025-26 as a soft year for construction operating income - growth of approximately 2 to 4 per cent, weighed down by subdued road-project awarding by MoRTH/ NHAI and a slowdown in Jal Jeevan Mission-linked execution - before a recovery to 6 to 8 per cent in FY2026-27, supported by the extension of the Jal Jeevan Mission to December 2028 and an adequate aggregate order book. Notably, the agency observes that diversified Engineering, Procurement and Construction (EPC) players active in urban infrastructure, irrigation, mining and power are better positioned, with its commentary pointing to operating income growth of around 8 to 10 per cent for such players in FY2026-27, while road-focused contractors continue to face pressure from intense competition and thin order books. Operating margins for the sector are expected to remain range-bound at approximately 10.3 to 10.8 per cent in FY2025-26 and 10.1 to 10.6 per cent in FY2026-27. This forecast describes the demand environment for the addressable categories in which the Company participates - and, given the Companys multi-segment platform and limited road-sector concentration, positions it within the better-placed diversified cohort the agency identifies. The Company participates across several infrastructure construction categories, with its order book weighted toward Government and Government-agency counterparties, reducing counterparty risk. The breadth of the Companys segment presence allows it to optimally structure the portfolio of projects with the most favourable demand and working-capital characteristics at any point in the capex cycle.

The Indian construction industry is large, deeply layered, and structurally fragmented. The most recent official characterisation of this construction industry comes from the MoSPI Pilot Study on Construction Activities in Unincorporated Sector Establishments and Households, conducted over July to December 2025 and released in April 2026. That study identified approximately 10.27 lakh unincorporated construction establishments - with an average of about five workers each and roughly 77 per cent employing at least one hired worker - alongside nearly 98.54 lakh own-account construction undertakings at the household level. Separately, the Knight Frank-RICS skilling study, drawing on National Skill Development Corporation data, estimated Indias construction workforce at approximately 71 million (7.1 crore) as of 2023. Above this broad unincorporated and largely fragmented industry structure, sit a smaller number of organised contractors: large integrated players that undertake national-scale infrastructure projects, and mid-sized regional contractors active in state-level and segment-specific works.

The tiered structure of the universe is considerably more concentrated than the headline scale of the unincorporated base suggests. A relatively small number of large, integrated players account for the bulk of high-value national infrastructure work. Integrated turnkey projects across highways, water-supply schemes, transmission systems, and specialised buildings typically require balance-sheet capacity, in-house engineering, equipment fleets, and multi-segment execution capability, which concentrate such work among the larger organised contractors.

This contractor universe operates within a governance structure built on cooperative federalism. Typically, the Union Government sets standards and national pipelines and oversees the major central public-sector enterprises, while State Governments execute delivery at the local level, handle land acquisition, and clearances, and manage power distribution and local roads.

For a multi-segment contractor like us, this division means that demand visibility, approval timelines, and payment behaviour vary not only by segment but by the level of government and the implementing agency involved.

The funding and activity mix of the sector reflects this structure. Generally public entities account for many infrastructure outlays, with private capital the faster-growing component over the medium term; new construction represents the bulk of activity, while renovation and retrofit work is growing at a faster rate as the asset base matures. The India Brand Equity Foundation (IBEF) also notes that sector order books are moderately concentrated, with a small number of large players accounting for a significant share of organised-sector revenue - consistent with the tiered structure described above, in which balance-sheet capacity and multi-segment capability concentrate large infrastructure work among the larger organised contractors.

Contractual structures span a range of risk-and-return profiles. Pure EPC contracts allocate execution risk to the contractor and financing risk to the awarding authority, and remain the dominant mode for water, electrical, irrigation, and most building work. Hybrid Annuity Mode contracts, prevalent in the road sector, blend EPC and annuity features and require partial contractor financing during construction. Build-Operate-Transfer concessions, although less prominent in the current cycle, continue to feature selectively in the road and urban transport segments. Item-rate contracts persist in certain state-government work. The Company evaluates each project on its specific risk/ reward potential.

Counterparty composition shapes the industrys working-capital cycle. Central Government and Central PSU work, alongside externally aided projects, generally offers the most disciplined payment cycles. State-government and state-PSU work varies materially across geographies, with payment cycles influenced by state-level fiscal conditions, the timing of grant releases from the Centre, and the administrative capacity of the implementing agency. Private-sector work, while smaller in aggregate, can offer faster payment cycles where the counterparty is well capitalised. The interaction of these payment-cycle characteristics with project-level cost structures defines the working-capital intensity of a construction business at any given point in the cycle. Within this industry structure, the Company operates as a tier-1 contractor with multi-segment execution capability across seven verticals and an established record of integrated turnkey delivery across State Governments and State agencies, Central Government and Central Public Sector Units (PSU) counterparties, and selective private-sector engagements. The industrys structural features - fragmentation at the base and concentration at the top - are the defining characteristics of this industry. Having outlined the demand, financing architecture, and policy drivers of infrastructure investment in the preceding sections, the discussion now turns to the Company: NCC entered FY2025-26 with a diversified order book of Rs.83,004 crore spanning seven operating segments.

1.7 Business Profile

The Companys business profile can be summarised across four attributes.

• Forty-eight years of execution track record. The Company has been operational since 1978, with execution experience across multiple infrastructure investment cycles and across State Governments and State agencies, alongside Central Government and Central PSU counterparties.

• Multi-segment capability across seven verticals covering the principal infrastructure and industrial construction categories in India. The Company executed work across all seven verticals during FY2025-26, with materially different shares of group revenue versus order inflow across segments - a profile that reflects portfolio rebalancing throughout the year as new awards were absorbed at the top of the order book while actual execution carried forward across earlier-secured contracts. The multi-segment platform supports portfolio diversification across segment cycles.

• Revenue mix predominantly Government, with State Governments and State agencies forming the major share, supplemented by select Central Government and Central PSU contracts.

• Order book. As of 31 March 2026, the consolidated order book stood at Rs.83,004 crore, equivalent to approximately four times prior-year revenue on a consolidated basis.

1.8 The Companys Operating Segments

The Company operates across seven business segments, covering all the different gamut of the infrastructure industry. Each segment is anchored in in-house engineering, procurement, and execution capability built over multiple project cycles. Table 9 summarises the scope of operations of each segment.

Table 9: The Companys Operating Segments

Segment	Scope of Operations
Buildings	Hospitals & Medical colleges like AIIMS, Airports, Sports Complexes, Housing Projects, IT Parks, Industrial & Commercial Buildings
Transportation	Access Controlled Highways, Complete EPC for the Road projects, Air Strips and Related Infrastructure, Metros, Tunneling, Bridges and Flyovers
Segment	Scope of Operations
Electrical (Transmission & Distribution (T&D))	Transmission and distribution lines and sub-stations, Project electrification, System Improvement Projects, Smart Meters, Optical Fiber and allied systems.
Water & Environment	Water supply projects, Water treatment plants, Water distribution networks, Underground drainages, Sewage treatment plants, Lift irrigation schemes.
Railways	Civil EPC, Track Laying, Signaling and Telecommunication, Dedicated Freight Corridor, High Speed Rail, Rolling Stock, Signaling and allied systems
Irrigation	Dams & Reservoirs, Canals, Tunnels, Barrages, Spillways and Aqueducts
Mining	Mine Developer-cum-Operator (MDO), Overburden Removal, Coal Excavation & Transportation

Source: Company disclosures.

The Company maintains in-house engineering and execution capability across each segment, supported by domain-specific design teams and a specialised equipment fleet, and applies a consistent bid-evaluation discipline across all segments.

Underpinning execution across these segments, the Company has established a Centre of Excellence (CoE) that consolidates engineering design, project-planning, and technology-adoption capability across verticals. The CoE supports standardisation of execution methodologies, value-engineering, and the deployment of digital project-controls and modern construction techniques, strengthening the Companys ability to deliver complex, multi-segment turnkey projects efficiently.

2. Outlook

The Companys medium-term outlook reflects a public-investment cycle that continues to broaden, a macroeconomic backdrop supportive of capital formation, and a set of long-horizon national programmes that describe the demand environment for the construction industry over the next few decades. Indias published policy direction - the goal of becoming a developed economy by 2047 under Viksit Bharat 2047, the 500 GW non-fossil-fuel electricity capacity target by 2030, and the net-zero emissions commitment by 2070 - shapes the multi-year capital expenditure cycle that defines the Companys addressable market.

2.1 India Macro Outlook 2.1.1 Growth Profile

India continues to be projected as the fastest-growing major economy, supported by domestic demand, public investment and improving private-sector participation. The macroeconomic context discussed earlier in this report remains broadly supportive.

2.1.2 Inflation and Monetary Trajectory

Headline CPI has remained comfortably within the RBIs tolerance band. The RBIs monetary stance has been broadly accommodative through FY2025-26, with the repo rate at 5.25 per cent at the close of the year. The forward policy trajectory will be data-dependent, with food prices and imported energy costs the principal variables of attention.

2.1.3 Fiscal Trajectory and Capex Commitment

The Government of Indias stated fiscal-consolidation path takes the fiscal deficit from 4.4 per cent of GDP in FY2025-26 RE to 4.3 per cent in FY2026-27 BE. The combination of expanding capital expenditure - total public capex budgeted at approximately 5.6 per cent of GDP in FY2026-27, growing close to 20 per cent year-on-year - with a credible consolidating fiscal deficit is, in managements view, the most important medium-term macro-fiscal signal for the construction industry. It signals public-investment-led growth without the credit-quality concerns that typically accompany sharp capex expansion.

2.2 Sector Outlook

The Indian construction industry enters FY2026-27 with a supportive set of operating conditions. The combination of expanding Central and State capital expenditure, the extension of the Jal Jeevan Mission to 2028, an accommodative monetary stance, and sub-target inflation through most of FY2025-26 together create a constructive operating backdrop. Aggregate Centre and State public capital expenditure is now running at approximately Rs.20 to 21 lakh crores annually, of which a material share flows into the addressable infrastructure construction market. The aggregate framework remains highly supportive of infrastructure construction activity and medium-term sector demand. Management expects sector growth to recover through FY2026-27 after a soft FY2025-26, with diversified, multi-segment players better placed than road-focused contractors, and with increasing emphasis on execution capability, project complexity, and working-capital discipline. The Companys consolidated order book provides approximately four times book-to-bill visibility, and the Company serves predominantly Government clients — principally State Governments and State agencies, supplemented by Central Government and Central PSU counterparties.

Longer-Horizon Anchors

Beyond the FY2026-27 horizon, the Viksit Bharat 2047 framework provides the long-run policy backdrop against which infrastructure investment is now framed. NITI Aayogs published analysis envisages GDP rising from approximately USD 4.18 trillion in 2025 to USD 30 trillion by 2047, alongside material expansion across transport, port, and clean-energy infrastructure. The capacity build-out anchors are set out below.

Table 10: Viksit Bharat 2047 - Capacity Build-Out Anchors

Indicator	2025 Baseline	2047 Target	Multiplier
India GDP (USD trillion)	4.18	30.0	~7.2x
Metro network length (km)	1,000	~5,000	~5.0x
Rail track length	Baseline	~2.0x (2047)	~2.0x
Port capacity (MMTPA)	2,700	10,000	~3.7x
Inland waterways cargo (MMTPA)	~146 (2025-26)	500	~3.4x
Nuclear energy capacity (GW)	8.8	~100	~11.4x
Urban population share (%)	~36%	51%	+15 pp
High-Speed Rail network (km, planned)	Baseline	7,000	Planned build-out

Source: Compiled from NITI Aayog (Scenarios towards Viksit Bharat and Net Zero, February 2026), Maritime Amrit Kaal Vision 2047, Ministry of Railways, and Department of Atomic Energy targets. Bars ordered by multiplier; orange indicates capacity additions of greater than 7x baseline.

Industrial demand projections that flow from these capacity ambitions are equally material to the construction industry. NITI Aayogs modelling envisages a sharp rise in domestic production of steel, cement, and aluminium - all primary construction inputs - over the long horizon. Several divisions within the Company are direct beneficiaries of this long-term demand expansion.

Management believes that sustained public investment, expanding State-level infrastructure programmes, growing private participation and a diversified order book position the Company favourably for long-term growth. The Companys focus remains on disciplined project selection, execution excellence, working-capital efficiency, and sustainable value creation for all stakeholders.

Operational Performance - Consolidated

Revenue from Operations: The Group reported revenue from operations of Rs.20,823.00 crore during FY 2025-26 as against Rs.22,199.36 crore in the previous year, resulting in a decrease of 6%. The decline was primarily reflective of lower turnover reported during the year, influenced by delayed realizations and project execution phasing.

EBITDA: The Group reported EBITDA of Rs.1,836.08 crore as against Rs.1,918.07 crore in the previous year. While EBITDA declined in absolute terms due to lower turnover, the EBITDA margin improved from 8.64% to 8.82% during FY 2025-26. Net Profit: The Group reported net profit attributable to shareholders of the Company of Rs.675.32 crore as against Rs.819.88 crore in the previous year.

Operational and Financial Performance - Standalone Revenue from Operations: The Company reported revenue from operations of Rs.17,463.49 crore during FY 2025-26 as against Rs.19,205.78 crore in the previous year, resulting in a decrease of 9%, mainly due to delayed realizations.

Other Income: Other income was Rs.205.79 crore as against Rs.187.01 crore in the previous year. It comprises interest on loans and advances, interest on bank margin money deposits, dividend income, interest on income tax refund, profit on buyback of shares / investment / property, plant and equipment, investment property (net) and miscellaneous income.

Direct Cost: Direct cost for the year under review stood at 85.04% of turnover as against 85.17% in the previous year.

Overheads: Overheads comprising salaries and administrative expenses stood at Rs.1,164.93 crore as against Rs.1,104.44 crore in the previous year. The increase of 5%, amounting to Rs.60.49 crore in absolute terms, resulted in overheads increasing from 5.75% to 6.67% of turnover.

Finance Cost: Finance cost decreased to Rs.645.34 crore from Rs.653.14 crore in the previous year. The decrease was mainly on account of lower utilization of LCs and reduction in interest-bearing mobilization advance during FY 2025-26.

Depreciation: Depreciation increased from Rs.212.95 crore to Rs.228.47 crore.

Tax Expense: Tax expense for FY 2025-26 was Rs.148.91 crore as against Rs.267.27 crore in the previous year.

EBITDA: The Company reported EBITDA of Rs.1,448.34 crore as against Rs.1,744.42 crore in the previous year. The decrease was primarily on account of lower turnover reported during the year. EBITDA margin stood at 8.29% as against 9.08% in the previous year.

Net Profit: Net profit stood at Rs.576.76 crore as against Rs.759.44 crore in the previous year.

Total Comprehensive Income: Total comprehensive income stood at Rs.582.42 crore as against Rs.760.57 crore in the previous year.

Dividend: The Board of Directors has recommended a dividend of Rs.2.20 per share, representing 110% for the year under review. The dividend outgo works out to Rs.138.13 crore, the same as the previous year.

Return on Equity: Return on equity stood at 7.84% as against 10.89% in FY 2024-25. The decrease was primarily on account of lower revenue from operations reported during FY 2025-26.

Equity & Liabilities:

a. Net worth: The Companys net worth increased from Rs.7130.13 crores to Rs.7574.42 crores. The increase of Rs.444.29 crores is primarily on account of internal generation of profits.

b. Borrowings (Long-Term & Short-Term): During the year under review the borrowings increased by Rs.767.29 crores from Rs.1484.04 crores to Rs.2251.33 crores.

Assets:

a. Property, Plant & Equipment (PPE): The Companys PPE (gross block plus Capital WIP) increased by Rs.842.64 crores (net) in 2025-26 from Rs.2919.46 crores to Rs.3762.10 crores. The increase in PPE is primarily on account of purchase of TBM machinery and for new projects received during the year 2025-26.

b. Investments: The investments increased by Rs.172.79 crores, from Rs.694.06 crores to Rs.866.85 crores during the year 2025-26. The increase is on account of Equity infusion in wholly owned subsidiary company to execute AMISP projects

c. Inventories: The Companys inventories stand at Rs.1786.66 crores as against Rs.1391.99 crores of the previous year.

d. Trade Receivables (Current & Non-Current): The Companys trade receivables increased by Rs.238.08 crores in 2025-26 from Rs.3097.85 crores to Rs.3335.93 crores.

e. Loans (Current & Non-Current): Loans comprise loans given to group companies and other corporates. Loans given to group companies & other corporates increased from Rs.467.75 crores to Rs.599.32 crores during the year under review.

Cash Flow

During FY 2025-26, the Company reported net cash inflow from operating activities of Rs.886.05 crore as against Rs.814.57 crore in the previous year. Net cash used in investing activities stood at Rs.1,028.65 crore as against Rs.218.83 crore in the previous year. Net cash used in financing activities stood at Rs.50.83 crore as against Rs.311.58 crore in the previous year.

Key Financial Ratios

S. No Ratio	FY 2025-26	FY 2024-25	% of change	Reasons for change in the ratio by more than 25%
i) Current Ratio	1.26	1.32	-5%	-
ii) Debt-Equity Ratio	0.30	0.21	43%	Change due to high utilization of borrowings due to low collections from customers
iii) Interest Coverage Ratio ((PAT + Depreciation + Interest cost on Borrowings) / Interest cost on Borrowings)	4.66	6.00	-22%	-
iv) Inventory Turnover Ratio	10.99	13.59	-19%	-
v) Trade Receivables Turnover Ratio	5.43	6.52	-17%	-
vi) Operating Profit Margin (%) (EBITDA / Revenue from Operations)	8.29%	9.08%	-9%	-
vii) Net profit ratio	3.30%	3.95%	-16%	-
viii) Return on Net Worth	7.84%	10.89%	-28%	Due to low turnover and profitiability reported during the year.

Order Inflow and Order Book

During FY 2025-26, the Company received orders of Rs.31,884 crore as against Rs.32,888 crore received in FY 2024-25. The Group order book stood at Rs.83,004 crore as at the end of the year, registering a growth of 16% over the previous year. This order book provides significant execution visibility and reflects the Companys diversified participation across key infrastructure sectors.

Division-wise Order Book mix as of 31.03.2026

Here is the chart data from the image organized into a clear table format:

Order Book Composition FY 2025-26

Sector	Percentage Share
Buildings	27%
Transportation	20%
Electrical	17%
Mining	17%
Water & Railways	12%
Irrigation & Others	7%

If you have the total order book value in crores or billions, I can calculate the absolute financial value allocated to each sector. Would you like to provide that?

Risks and Concerns

The Company has an integrated and structured Enterprise Risk Management process to manage risks with the objective of protecting and enhancing stakeholder value. The risk management system is supported by review mechanisms, appropriate policies and procedures, defined limits, timely identification and monitoring of risks, management information systems and internal controls aligned to business operations and applicable laws.

Risk Category	Context	Potential Impact	Mitigation / Response	Management Focus
Political and regulatory risks	Operations across multiple states expose the Company to varied administrative and policy conditions.	Clearance delays, project disruptions or contractual uncertainties.	Multi-state experience, stakeholder engagement and structured monitoring of approvals.	Continue proactive engagement and escalation of bottlenecks.
Competition risks	Increase in operators in niche project segments.	Pressure on pricing and margins.	Leverage experience, quality, timely delivery, technical expertise, financial strength and client relationships.	Disciplined bidding and segment selection.
Operational risks	Complex project requirements involving subcontractors, vendors, designs, RoW and mobilization.	Delays, cost overruns and execution inefficiencies.	Due diligence in subcontractor and vendor selection, insurance, financial tie-ups and early risk identification.	Strengthen project readiness and monitoring.
Market risks	Order wins depend on states, departments and sectoral opportunities.	Volatility in order inflow.	Operate across multiple segments such as buildings, transportation, water, railways, electrical, irrigation and mining.	Maintain diversified bid pipeline.

Human Resources

At NCC, employees remain the Companys most important asset. The Company seeks to provide a workplace where people gain varied experience, undertake challenging assignments, learn continuously and build careers while delivering for stakeholders. The philosophy of building leaders from within continues to guide the Companys talent practices. With greater emphasis on future readiness, digital mindset, project execution discipline and commitment to nation building, NCC continues to invest in capability development across functions and project sites.

Human Capital Indicator	FY 2025-26	FY 2024-25
Total human capital base	31,488	31,408
Training programmes conducted	739	396
E-learning courses available	100+	100+
Campus hire induction programmes	Conducted	Conducted
Employee engagement initiatives	Conducted across Locations	Conducted across locations

Learning and Development

Learning and development interventions at NCC are designed to provide employees with continuous opportunities to strengthen conceptual and practical skills. These initiatives enable employees to upgrade existing capabilities and acquire new skills relevant to their roles. The Companys learning offerings include classroom sessions, virtual sessions, on-the-job workshops and specialist programmes delivered through internal and external experts. New campus hires receive technical induction and site-oriented learning to help them become productive after deployment.

Employee Engagement

NCC believes that employees are partners in progress. The Company encourages innovation, knowledge sharing and collaboration. Its core values - openness and trust, integrity and reliability, teamwork and collaboration, commitment and creativity - continue to guide the organizations culture. Employee wellbeing across project locations remains a priority, and the Company continues to focus on engagement initiatives for employees and their families.

Internal Control System

The Company has an adequate system of internal controls to help management review the effectiveness of financial and operating controls and provide assurance about adherence to the Companys laid down systems and procedures. Internal financial controls and documentation are in place for key activities. The controls are designed to ensure that transactions are properly authorized, correctly reported and assets are safeguarded.

Internal Auditors and Statutory Auditors review internal financial controls at the entity and operational levels, including control design and operating effectiveness. The Audit Committee periodically reviews the findings and recommendations of the auditors and takes corrective actions as deemed necessary. In line with the scale and complexity of the business, NCC continues to adopt digital solutions to further strengthen the internal control mechanism and improve visibility over project performance, approvals, cost control and compliance.

Control Area	Management Focus
Financial controls	Authorization, reporting, reconciliation and review controls
Operating controls	Project monitoring, execution milestones and cost controls
Audit Committee review	Periodic review of audit findings and corrective actions
Digital controls	Ongoing adoption of digital solutions for monitoring and internal control strengthening