Niraj Cement Structurals Ltd Management Discussions

Economy Overview Global Economy

The global economy grew by 3.3% in calendar year 2024, demonstrating resilience amid ongoing political conflicts, trade tensions, and shifting monetary policies. Inflation declined from 6.6% in 2023 to 5.7% in 2024, driven by decisive central bank actions and an improved energy supply that helped stabilize input costs.

A significant share of this years growth momentum stemmed from firm monetary tightening by central banks aimed at curbing inflation. Increased energy availability also contributed to price stability and supported broader economic activity. Developing and emerging economies outpaced their advanced counterparts, expanding by 4.3% compared to just 1.8% growth in advanced economies. This strong performance was underpinned by robust domestic consumption, steady foreign investment, and solid output in manufacturing and technology sectors.

Their continued growth despite global headwinds signals a notable shift in the center of gravity for global economic expansion.

The global economy is projected to grow at a moderate pace, with forecasts pointing to a 2.8% expansion in calendar year 2025 and 3.0% in 2026. This outlook is supported by a gradual decline in inflation and the implementation of targeted, supportive policy measures by central banks worldwide.

Emerging markets are expected to maintain steady growth around 3.7%, while advanced economies are likely to experience a modest yet stable recovery, reaching 1.4% growth in 2025.

As inflation is projected to ease to 4.2% in 2025 and further to 3.5% in 2026, consumer spending is set to strengthen. Despite rising protectionist measures and recent tariff hikes in several regions, the global economy continues to show resilience and remains deeply interconnected.

Indias economy grew by 6.5% in FY 2024-2025, demonstrating resilience amid global tensions, supply chain disruptions, and evolving trade dynamics. The services sector remained the primary growth driver, supported by the ongoing enhancement of digital infrastructure. This digital progress broadened access to financial services and credit for both individuals and businesses, helping to sustain economic momentum.

Inflation moderated from 5.4% in FY 2024 to 4.6% in FY 2025, contributing to macroeconomic stability and boosting consumer confidence factors that unlocked demand across multiple sectors.

The government played a pivotal role by enacting structural reforms, streamlining business regulations, and investing heavily in infrastructure. These initiatives have strengthened investor confidence, particularly in capital-intensive industries such as construction and logistics.

In parallel, prudent fiscal management and effective monetary policy helped preserve overall economic stability. Indias efforts to resolve structural challenges and improve the ease of doing business are attracting significant global investment interest. With ongoing reforms and targeted investments, the country is well-positioned to sustain long-term growth and reinforce its economic resilience.

India has emerged as the worlds fourth-largest economy, surpassing Japan, with its per capita income having doubled since 2014, driven by strong domestic and foreign investments, thriving manufacturing activity, and growth in trade and financial services. The governments continued emphasis on capital expenditure, rising rural demand, and rapid development of both digital and physical infrastructure is expected to further accelerate economic progress and improve social outcomes.

As global supply chains stabilize and input costs ease, industries tied to essential services and daily consumption are well-positioned to gain from increased demand and greater operational efficiencies.

The 25 basis point cut in the repo rate till March 2025 is poised to inject liquidity, enhance access to credit and uplift market confidence. At the same time, the government is navigating global tariff shifts with a strategic approach to safeguard national economic interests. Despite external uncertainties, Indias growth momentum is expected to hold, supported by robust domestic demand, a cooling inflationary environment, and sound macroeconomic fundamentals. Additionally, the UK Free Trade Agreement is set to deepen bilateral trade through reduced tariffs, smoother customs procedures, and increased investment opportunities, reinforcing economic ties and mutual prosperity.

Indias infrastructure sector is central to the countrys vision of becoming a $5 trillion economy. It plays a pivotal role in accelerating economic growth, generating employment, and reshaping urban landscapes.

As the nation progresses toward its ‘Viksit Bharat 2047 goal, the government has reaffirmed its commitment through key programs like the National Infrastructure Pipeline (NIP), which continues to steer strategic investments across core sectors such as transportation, logistics, energy, and urban development.

In pursuit of integrated and sustainable transport solutions, the government has advanced initiatives like the Parvatmala Pariyojana for ropeway development and the establishment of Multi-Modal Logistics Parks (MMLPs) in major urban centers. These efforts aim to enhance last-mile connectivity, reduce urban congestion, and promote greener mobility options. Complementary projects including the expansion of wayside amenities and improved port connectivity reflect a comprehensive infrastructure strategy focused on seamless movement of goods and people, while opening new avenues for private sector involvement and innovation.

The Union Budget for FY 2025-26 reinforces this momentum with a substantial capital expenditure outlay of Rs. 11.21 lakh crore, emphasizing inclusive development, enhanced connectivity, and sustainable urban growth. Key measures include expanding regional air connectivity through the UDAN scheme, establishing a Rs. 25,000 crore Maritime Development Fund, and extending the Jal Jeevan Mission to 2028. Together, these initiatives lay a strong foundation for long-term economic resilience and improved quality of life across the country.

Indias road and highway infrastructure continues to be the strongest levers of economic development. The country has established itself as the second largest road network globally, with over 63.45 lakh kilometers of roads, including 1.46 lakh kilometers of National Highways (NHs).

Government initiatives like Bharatmala Pariyojana and PM Gati Shakti have played a crucial role in advancing highway development across India. These programs have led to a significant expansion of the national highway network and a notable increase in high-speed corridor lengths.

The government is firmly focused on transforming Indias road infrastructure, aiming to construct 10,000 km of national highways in FY 2025-26 to enhance connectivity and reduce logistics costs. This effort is part of a broader vision to develop 50,000 km of access controlled expressways by 2037 under Vision 2047. The pace of highway development has seen significant acceleration, driven by strong capital investments that showcase the governments commitment to creating world-class transportation networks.

The Bharatmala Pariyojana is Indias flagship highway development programme focused on road connectivity and freight efficiency across the nation. Out of the total target of 34,800 km, over 26,425 have already been awarded, and 19,826 km have already been built. The scheme is significantly contributing to the creation of a high-capacity and well- connected road network across the country. By focusing on the development of high-speed greenfield corridors, it is enhancing connectivity, reducing travel time, and supporting the growing logistics demands of the economy. This large scale road development initiative is also Showcasing regional integration and boosting economic activities by improving access to remote and underserved areas.

PM Gati Shakti, launched in 2021, is a National Master Plan that aims to build world-class multimodal infrastructure to support Indias ambitions under the Make in India vision. It integrates 16 ministries, including Railways and Roadways, and uses geospatial data and digital tools to enable better planning, coordination and execution of large infrastructure projects. The Gati Shakti initiative has played a crucial role in enhancing project efficiency by minimizing delays, improving multimodal connectivity, and encouraging greater private sector participation. Through its integrated approach, the initiative continues to support faster implementation of road and highway projects, showcasing balanced regional development and stronger economic linkages.

(NIP) is a major government roadmap for infrastructure investment between 2020 and 2025, with a total investment of Rs. 111 lakh crore. It covers key areas, including roads, railways, power, telecom, urban development, and ports, with contributions from central and state governments as well as private entities. Some of the key highlights of the NIP include tripling of investment in road development, long-term planning in the railway sector through Vision 2030 and 2050, expansion of BharatNet, delivering high-speed internet to rural areas, Port development under the Sagarmala program to enhance trade competitiveness and strengthening the power sector and affordable housing through PM Awas Yojana. The NIP strives to stimulate economic growth, create employment opportunities and improve quality of life through large-scale infrastructure upgrades.

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 underinvestment 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.

• Book of Rs. 1,800 Crores, ensuring revenue visibility and sustained growth momentum

• It is actively engaged across Roads & Highways, Railways & Metro across PAN India. thereby minimizing sector specific risks and capitalizing on emerging growth drivers.

With operations across 13 state s and over 28+ ongoing projects, the Company benefits from access to diverse regional opportunities and government contracts

The ongoing government focus on infrastructure development through initiatives such as Bharatmala, Gati Shakti, and the National Infrastructure Pipeline is a key catalyst for industry growth.

In India, the process of developing significant infrastructure projects entails prequalifying 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.

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.

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.

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.

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

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 characterized 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 utilized its resources to create a lean yet effective organization

The Company achieved total revenue from operations of Rs. 50,671.77 Lakhs for the year ended 31st March, 2025 as against Rs. 47,021.71 Lakhs for the year ended 31st March, 2024. Profit before tax stood at Rs. 2,022.07 Lakhs for the year ended 31st March, 2025 as against Rs. 1,358.43 Lakhs for the year ended 31st March, 2024. During the financial year 2024-25, the Company earned a profit after tax including comprehensive income of Rs. 1,530.89 Lakhs as compared to Rs. 1,030.14 Lakhs in the previous year.

On a consolidated basis, total revenue from operations of Rs. 50,714.23 Lakhs for the year ended 31st March, 2025 as against Rs. 47,085.43 Lakhs for the year ended 31st March, 2024. Profit before tax stood at Rs. 2,007.94 Lakhs for the year ended 31st March, 2025 as against Rs. 1,302.48 Lakhs for the year ended 31st March, 2024. During the financial year 2024-25, the Company earned a profit after tax including comprehensive income of Rs. 1,516.65 Lakhs as compared to Rs. 974.13 Lakhs in the previous year.

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.