Niraj Cement Management Discussions


Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. In other words, the infrastructure sector acts as a catalyst for Indias economic growth as it drives the growth of the allied sectors like townships, housing, built-up infrastructure and construction development projects.

Niraj Cement Structurals Limited (Niraj) is in the business of specialty engineering construction and infrastructure for the past 3 decades, Niraj is amongst the oldest and most well reputed infrastructure companies in India, with a wealth of diverse experience and exposure. Our corporate philosophy of trust, integrity and quality has placed us at the forefront of the construction industry.

At Niraj, we adhere to global standards in construction, with appropriate supervision and project control to maximize quality, a focus on sustainable development and solid solutions to construction challenges.

The company provides end-to-end solutions, highways, bridges, water supply and drainage, irrigation, land storm water drainage and other infrastructural work.

Indias extensive infrastructure needs are well known. Decades of under investment have left the country with dire deficits in such critical areas as railways, roads. The project implementation is undertaken with the assistance of subcontractors and other agencies. Niraj provides the necessary technical and financial assistance to the sub-contractors.

The dedicated architects, engineers and quantity surveyors that drive the firms activities are ably complemented by a team of multi-skilled and competent support staff. The company also actively procures the latest construction technologies to assist its highly skilled workers.


Indian economy is driven through multiple economic sectors and infrastructure is one of the major sector contributions to continuous growth. The infrastructure sector in India is poised to grow at a CAGR of 8.2% by 2027. The launch of a quadrilateral economic forum by India, the US, Israel & the UAE in November 2021 has further added to the influx of infrastructure growth perspectives. Alternatively, the introduction to the "Infrastructure for Resilient Island States" program in November 2021 has shown a significant opportunity to improve the lives of vulnerable nations across the globe by enabling Indian infrastructure growth to flourish in tri-folds.

In order to meet Indias aim of reaching a US$ 5 trillion economy by 2025, infrastructure development is the need of the hour. The government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as Make in India and the production-linked incentives (PLI) scheme to augment the growth of the infrastructure sector. Historically, more than 80% of the countrys infrastructure spending has gone toward funding for transportation, electricity, and water & irrigation.

In India, about 42% of the projects in the NIP are under implementation, which means construction work is already going on. Another 19% is under the development stage, while a significant 31% is still in the conceptual stage. During the fiscals 2020 to 2025, sectors such as Energy (24%), Roads (19%), Urban (16%), and Railways (13%) amount to around 70% of the projected capital expenditure in infrastructure in India.


Global Economy:

At the outset of 2023, encouraging developments in the global economy encompass the easing of inflation and energy costs from their apex levels, along with Chinas decision to terminate its zero-COVID strategy, which is projected to provide a stimulus to economic growth. While the complete impact of these changes is yet to be fully realized, emerging markets and developing economies are already experiencing a substantial upswing in growth rates, reaching 3.6% this year compared to 2.8% in 2022. Inflation expectations are presently stable, with a predicted decrease from 7.0% this year to 4.9% in 2024, due to major central banks communicating the necessity for a more stringent monetary policy stance. Moderating demand and escalating interest rates globally will further erode inflationary pressures throughout 2023. The tightening of monetary policy by the majority of central banks is anticipated to drive inflation back toward its targets leading it toward the recovery path.

(Source: IMF - World Economic Outlook, April 2023, Euro monitor International - Global Economic Outlook: Q1 2023).

Indian Economy:

India witnessed a remarkable recovery in the post-COVID world, delivering one of the best performances in terms of economic output. The economy is experiencing sustainable growth, as evident from the countrys estimated 6.9% growth rate in FY 2023 that surpasses that of other major economies. The service, manufacturing and export sectors sprung back to action in the post-COVID environment. The revival facilitated by the governments spending on infrastructure and other key economic drivers yielded positive results, with almost all sectors of the economy experiencing a robust recovery. To contain inflation, the government pursued supply side reforms, promoted exports and tightened monetary its policy.

During FY 2023, the government increased capital spending by 37%. Its priorities remain on critical infrastructure projects such as expressways, high-speed rail, mass transit systems, airports, and affordable housing. The spending in these areas also contributed to normalising the allied sectors that were affected by the pandemic, and, in turn, led to investments and job creation. With a nominal GDP of US $ 3.53 trillion, India is the fifth largest economy in the world. According to the forecasts by IMF, by 2030 it will surpass Japan and Germany as the third- largest economy and the fastest-growing major economy. As part of the Indian governments Atmanirbhar Bharat initiative, the production-linked incentives (PLI) scheme aims to make India a manufacturing powerhouse by reducing imports and incentivizing local production.

Union Budget

Increase in infrastructure investment provides a critical push to the potential growth of the economy. The Government, in recent years, provided an increased impetus for infrastructure development and investment through the enhancement of capital expenditure. In the Union Budget of 2023-24, the Government has further increased the capital expenditure outlay by approximately 33% to Rs. 10 lakh crore which is nearly 3 times the outlay in 2019-20.

The increase in outlay is expected to ramp up the virtuous cycle of investment and job creation. The continuation of 50 year interest free loans to states for one more year is expected to spur investments in infrastructure and enhance growth in the economy.

The buffet of reforms launched by the Government such as the National Infrastructure Pipeline (NIP), PM Gatishakti Scheme & such other schemes have increased infrastructure development and have brought efficiencies and cost competitiveness. As part of the NIP, the Union Government plans to invest over Rs. 111 lakh crore by 2025. Out of the total NIP, Rs. 108 lakh crore worth of projects are under different stages of implementation. The investments planned under the National Infrastructure Pipeline (NIP) will be the key growth drivers for the construction sector and will drive the demand for the cement and steel industries as well. Further, the strong focus of the Government on infrastructure led economic growth is expected to bring significant opportunities in the sector over the medium term. Indias construction sector is expected to record a CAGR of 10.8% during the 2022-2026 period.


The Company operates in only one business segment i.e. Infrastructure. The company has passed through a very unusual phase, any worthwhile comparison of performance between past years would be inconclusive. There is yet considerable scope for improvement in upcoming years.


The Company achieved total revenue from operations of Rs. 60,530.54 Lakhs for the year ended 31st March 2023 as against Rs. 35,640.53 Lakhs for the year ended 31st March 2022. Profit before tax stood at Rs. 640.73 Lakhs for the year ended 31st March 2023 as against Rs. 328.17 Lakhs for the year ended 31st March 2022. During the financial year 2022-23, the Company earned a profit after tax including comprehensive income of 401.88 Lakhs as compared to Rs. 255.93 Lakhs in the previous year.

Financial Performance - Consolidated

On a consolidated basis, total revenue from operations of Rs. 60,611.97 Lakhs for the year ended 31st March 2023 as against Rs. 35,641.31 Lakhs for the year ended 31st March 2022. Profit before tax stood at Rs. 682.03 Lakhs for the year ended 31st March 2023 as against Rs. 320.23 Lakhs for the year ended 31st March 2022. During the financial year 2022-23, the Company earned a profit after tax including comprehensive income of 432.28 Lakhs as compared to Rs. 249.97 Lakhs in the previous year.


Particulars FY 2022-23 FY 2021-22 % change
Current Ratio 1.90 1.98 -0.08
Return On Equity Ratio 2.45% 1.39% 1.06%
Net Profit Ratio 0.71% 0.68% 0.03%
Return On Capital Employed 3.83% 1.81% 2.02%
Return On Investment 7.99% 9.16% -1.17%
Debt-Equity Ratio 0.14 0.74 -0.60
Debt Service Coverage Ratio 0.24 0.29 -0.05
Trade Receivables Turnover Ratio 6.74 5.24 1.50
Trade Payables Turnover Ratio 16.97 18.09 -1.12
Net Capital Turnover Ratio 4.86 2.84 2.02


The environment in which the company operates is influenced by a variety of circumstances, some of which are within its control and others which are not. We have created a strong framework for risk management that lowers volatility brought on by unfavorable internal and external events, makes risk assessment, mitigation, and reporting procedures easier, and enables management to conduct timely reviews. The actions has taken to reduce some of these hazards are discussed in the section that follows.

Economic Risks : We plan to generate the majority of our revenue from infrastructure projects in India. As a result, our reliance on the industrys ongoing economic growth and on governmental infrastructure development programmes is great. It also heavily depends on budgetary commitments from the federal and state governments, involvement in projects supported by multilateral agencies, public institutions, and access to funds from the private sector. Our prospects and operational results would be significantly impacted by macroeconomic conditions in Indias infrastructure industry. The policies established by the federal and state governments will continue to have an impact on our operational outcomes.

Bidding and execution capabilities : In India, the process of developing significant infrastructure projects entails pre qualifying prospective bidders based on their technical and financial prowess. Pre-qualification requirements are based on variables like appropriate prior project execution accomplishments, net worth, cash accruals, etc. After a project is chosen, its timely completion depends on a number of variables. We aim for effective project management and execution through effective resource deployment, swift decision-making by project managers on the ground, strong partnerships with suppliers and subcontractors, and coordination between project sites and the headquarters. We keep tabs on the execution of projects in terms of time, money, quality, effectiveness, human resources, and the use of plant and equipment. As our business expands, our ability to continue executing contracts successfully will be crucial to our strategy and operational performance.

Completion risk : This is the possibility that the project wont be finished either on time or at all for a variety of reasons, including cost overruns, technological setbacks, unavoidable circumstances, etc. We coordinate the prompt mobilisation of the site team, other requirements, and the timely supply of materials, people, and equipment. Additionally, we have a monitoring system in place to keep track of the client clearances and drawing requirements and make sure they are informed beforehand and are properly documented.

Resource risk : This risk includes the non-availability of raw materials for the project operation. It also includes the risk that the raw material prices might move adversely. We draw up the project cost estimates based on site conditions, expected duration of the project, seasonal cost/ availability factors while quoting. We also negotiate better rates from suppliers/ service providers, leveraging on the volumes across sites.

Operating risk : The possibility that project costs will rise. It also covers the possibility that the project would have operational issues. We make sure to do a thorough analysis of the projects scope and site circumstances, and we include cross-functional teams in the tendering process to account for all potential uncertainties. The project execution plan is then meticulously created with process linkages.

Casualty risk : This is the possibility that project equipment will sustain physical harm. It also covers obligations to third parties due to mishaps at the project site.

Site risk : This is the risk that the project site might have legal encumbrances. It also includes the risk that the site has technical problems.

Cost Management : We have experienced that our operating expenses constitute a major chunk of our total income. Our operating costs which relate to project costs mainly comprise cost of inputs, labour, fuel expenses, sub-contracting expenses and usage of various machinery. These costs are subject to volatility and may fluctuate owing to reasons beyond our control. Our ability to handle these costs in an effective manner will impact our results of operations.

Competition : Numerous infrastructure businesses who are active in the same geographical marketplaces as us compete with us fiercely for project awards. Additionally, some of our rivals are bigger than us, have more substantial financial resources, a more seasoned management team, or superior engineering capabilities for carrying out technically challenging tasks. Our ability to win projects at prices that would produce the returns we want will continue to be significantly impacted by competition from other infrastructure companies.

In order to deal with a general climate characterised by high interest rates, sluggish demand, liquidity concerns, and higher input costs, the company has implemented a variety of measures, such as the deployment of risk mitigation strategies, superior project execution, and intelligent cost management. In order to increase operational efficiencies, the Company has developed a practical strategy to navigate through the challenging times. To achieve this, it has reduced overhead costs and optimally utilised its resources to create a lean yet effective organisation.


The Company has proper and adequate internal control systems commensurate with the size of the business operations geared towards achieving efficiency in its various business operations, safeguarding assets, optimum utilization of resources and compliance with statutory regulations. Efforts for continued improvement of internal control systems are being consistently made in this regard.


The Company continues to excel in the field of Human Capital management with unique practices in the Infrastructure Industry. The Company strives to achieve the highest levels of employee engagement with multiple focused initiatives towards effective training and development of employees at various levels. The healthy status of the Companys human capital is evident from the trend analysis of achievement, higher productivity with stable employee numbers and low attrition rate vis-a-vis industry competitors.


Statements in the Management Discussion and Analysis describing the Companys objectives and expectations may be "forward looking statement" within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and reasonable expectation of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand/ supply, price conditions in the domestic and overseas market in which the Company operates, changes in the Government regulations and tax structure, economic developments within India and the countries with which the Company has business contacts and other factors such as litigation and industrial relations