Patel Engineering Ltd Management Discussions

Global Economic Overview and Outlook

The global economy is at a pivotal juncture, shaped by a confluence of structural shifts, policy recalibrations, and persistent geopolitical uncertainties. According to the International Monetary Funds World Economic Outlook (April 2025), global GDP growth is projected at 3.2% in 2024 and 3.3% in 2025, reflecting a cautiously optimistic recovery trajectory amid divergent regional performances. Advanced economies continue to grapple with the lagged effects of monetary tightening, fiscal consolidation, and demographic headwinds. Growth in the United States and the Euro Area is expected to remain moderate, supported by resilient labour markets but constrained by subdued investment and consumer sentiment. Meanwhile, emerging and developing economies, particularly in Asia, are poised to drive global expansion, buoyed by domestic demand, infrastructure investment, and digital transformation.

The global economic landscape is further complicated by the recent escalation of hostilities between Israel and Iran, which triggered heightened volatility across energy markets, disrupted regional airspace, and raised concerns over broader geopolitical contagion. Although a ceasefire has since been brokered, the conflict—marked by missile strikes, retaliatory attacks, and civilian displacement—has underscored the fragility of global peace and the potential for sudden shocks to trade, investment flows, and supply chains. This evolving situation reinforces the urgency of resilient economic frameworks and diversified infrastructure strategies, particularly in energy and logistics.

Nevertheless, the Global Outlook Remains Clouded By Several Downside Risks. These Include:

• Renewed inflationary pressures, particularly in services and energy;

• Volatile commodity markets and supply chain disruptions;

• Escalating geopolitical tensions and trade fragmentation;

• Climate-related shocks and extreme weather events.

The World Banks Global Economic Prospects (June 2025) projects global growth to decelerate to 2.3% in 2025, marking one of the weakest non-recessionary expansions in recent decades. The report highlights that policy uncertainty, weak investment flows, and rising debt burdens in low- and middle-income countries are likely to weigh on medium-term prospects.

In contrast, the OECD Economic Outlook (2024, Issue 2) notes that while inflation is gradually easing, consumer confidence and private sector investment remain fragile. Global growth is forecast at 3.2% in 2024 and 3.3% in 2025–26, with significant variation across regions. The report underscores the importance of credible fiscal frameworks, structural reforms, and targeted public investment to support inclusive and sustainable growth. Looking ahead, the global economy is expected to transition into a phase of moderate but uneven recovery.

Key Themes Shaping The Medium-Term Outlook Include:

Green Infrastructure and Energy

Transition: Accelerated investments in renewable energy, climate-resilient infrastructure, and sustainable transport are expected to drive capital formation and job creation.

Digital Transformation: Continued adoption of AI, automation, and digital platforms will reshape productivity dynamics and global value chains.

Demographic Shifts: Aging populations in advanced economies and a growing youth cohort in emerging markets will influence labour markets, consumption patterns, and fiscal sustainability.

Geo Economic Realignment: Strategic decoupling, regional trade blocs, and supply chain diversification will redefine global trade flows and investment strategies.

For infrastructure-focused companies, these macroeconomic trends underscore the importance of agility, innovation, and sustainability. As governments and multilateral institutions prioritize climate adaptation, urban resilience, and connectivity, infrastructure development—particularly in emerging markets—will remain a cornerstone of global recovery and long-term competitiveness.

Indian Economic Overview and Outlook

Indias economic performance in FY 2024–25 reaffirms its emergence as a global growth engine, underpinned by macroeconomic stability, structural reforms, and a robust domestic demand base. As per the Press Information Bureau (PIB), the countrys real GDP (at constant 2011–12 prices) reached _184.88 trillion, reflecting a growth rate of 6.5%, while nominal GDP stood at _331.03 trillion, nearly tripling from FY 2014–15 levels.

India has officially become the worlds fourth-largest economy, surpassing Japan, driven by a decade of sustained reforms, digital transformation, and infrastructure-led growth. This milestone is not merely symbolic—it reflects the countrys expanding global footprint and its capacity to deliver inclusive, innovation-driven development.

Key Economic Highlights – FY 2024–25

• Exports and Trade Resilience: Total exports reached US$ 825 billion, with services exports contributing US$ 387 billion, led by IT, engineering, and pharmaceuticals. This reflects Indias growing competitiveness in high-value global supply chains.

• Digital Economy and Financial Inclusion: The Unified Payments Interface (UPI) processed over 13 billion transactions monthly, with a cumulative value exceeding _18.23 trillion, underscoring the scale and depth of Indias digital public infrastructure.

• Foreign Direct Investment (FDI): Cumulative FDI inflows crossed US$ 1.05 trillion, with a 27% increase in equity inflows during the first nine months of FY25—demonstrating investor confidence in Indias long-term fundamentals.

• Macroeconomic Stability: Retail inflation moderated to 4.6%, the lowest since FY 2018–19, aided by prudent fiscal and monetary policies. The fiscal deficit remained on a consolidation path, while foreign exchange reserves remained robust.

• Infrastructure and Capital Formation: Central government capital expenditure rose by 28%, reinforcing momentum in roads, railways, energy, and logistics. This aligns with the National Infrastructure Pipeline and PM Gati Shaktis integrated planning framework.

Forward Outlook

India is projected to remain the fastest-growing major economy, with GDP growth expected between 6.3% and 6.8% in FY 2025–26, supported by:

These projects are being developed using both off-stream and on-stream configurations, with advanced reversible Francis turbines and digital control systems for flexible operation.

Future Outlook

Indias PSP pipeline is robust, with over 130 GW of capacity in various stages of planning, of which over 100 GW is being driven by private developers. Major players such as NHPC, NTPC, Greenko, JSW Energy, Adani Green, and ReNew Power are leading the charge. It is expected that around 25 GW to 30 GW of PSP projects come up for tendering in the next 1 to 2 years.

The long operational life (40–60 years), scalability, and ability to provide both spinning reserve and black start capability make PSPs indispensable for Indias grid of the future. With policy clarity, maturing project development frameworks, and growing investor interest, PSPs are poised to become the backbone of Indias energy storage architecture.

Irrigation Segment in India

Indias irrigation and water infrastructure continues to evolve as a strategic pillar for agricultural productivity, rural development, and climate resilience. With an ultimate irrigation potential of over 140 million hectares (Mha), approximately 113 Mha has been created and 95 Mha is currently utilized, reflecting the countrys sustained investment in water resource development.

The Government of India, through the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), has prioritized the completion of long-pending irrigation projects. Under the Accelerated Irrigation Benefit Programme (AIBP), a large number of major and medium projects were identified for fast-tracking, with an outlay of _930.68 billion for 2021–26.

Jal Jeevan Mission: Rural Water Security at Scale

Launched in 2019, the Jal Jeevan Mission (JJM) aims to provide functional household tap connections (FHTCs) to every rural household in India. As of March 2025, over 155 million rural households—approximately 80% of the total—have been connected to piped water supply systems. In the Union Budget 2025–26, the Government of India allocated _670 billion to JJM, marking a significant increase from the previous years revised estimate of _226.94 billion The mission has now been extended until 2028, with a sharpened focus on infrastructure quality, operations and maintenance (O&M), and community participation through Jan Bhagidari frameworks.

River Interlinking: National Water Redistribution Strategy

Indias National River Linking Project (NRLP), under the National Perspective Plan (NPP), envisions the transfer of water from surplus to deficit basins to address regional imbalances in water availability. The National Water Development Agency (NWDA) has identified 30 inter-basin links—14 under the Himalayan component and 16 under the Peninsular component.

The flagship Ken–Betwa Link Project, spanning Madhya Pradesh and Uttar Pradesh, is the first interlinking project under implementation. It aims to irrigate 1.06 million hectares, provide drinking water to 6.2 million people, and generate 103 MW of hydropower.

Other Proposed Links Include

• Par–Tapi–Narmada and Daman Ganga–Pinjal (Western India)

• Mahanadi–Godavari and Godavari–Krishna–Cauvery (Southern India)

• Ganga–Yamuna and Sarda–Yamuna (Northern India)

Future Prospects

Indias irrigation future is being shaped by a combination of modernization, interlinking of rivers, and micro-irrigation expansion. The Modernisation of Command Area Development and Water Management (M-CADWM) sub-scheme under PMKSY, with an initial outlay of _16 billion, is piloting piped irrigation systems across 78 sites, targeting 80,000 farmers.

Looking ahead, the Ministry of Jal Shakti is exploring inter-basin water transfers to ease regional disparities and mitigate flood-drought cycles. The National Perspective

Plan envisions additional irrigation potential beyond the current 140 Mha through such linkages.

Tunneling Segment in India

Indias tunneling sector has emerged as a critical enabler of infrastructure development, particularly in transportation, hydropower, and urban mobility. With the countrys topography spanning the Himalayas to dense urban centres, tunneling offers a strategic solution to overcome geographical constraints, reduce travel time, and enhance connectivity.

Key Projects Include

• Atal Tunnel (Rohtang, Himachal Pradesh) – 9.02 km, worlds longest highway tunnel above 10,000 ft.

• Sela Tunnel (Arunachal Pradesh) – Two tunnels of 1 km and the other of 1.5 kms twin-tube tunnel enhancing strategic connectivity. This was recognised as the worlds longest bi-lane tunnel and Indias highest tunnel project at an altitude of over 13,000ft above sea level.

• Mumbai–Ahmedabad High-Speed Rail Undersea Tunnel – Indias first 7 km undersea rail tunnel for bullet trains.

• Vishnugad–Pipalkoti HE Project (Uttarakhand) – complex desilting and headrace tunnels in Himalayan geology.

Government Focus and Policy Initiatives

The Government of India has placed tunneling at the heart of its infrastructure strategy, particularly under the PM Gati Shakti National Master Plan, which integrates road, rail, metro, and utility corridors. Key initiatives include:

• Dedicated tunnel development programs under the Ministry of Road Transport and Highways and Ministry of Railways.

• Performance audits and technology benchmarking to ensure quality and timely execution.

• Incentives for indigenous TBM manufacturing and adoption of global best practices.

• Strategic tunnel development in border areas for defense logistics and all-weather access.

Future Outlook and Technological Advancements

Indias Tunneling Pipeline is Poised for Exponential Growth, Driven by

Urban metro expansions in cities like Mumbai, Bengaluru, and Pune.

• Railway connectivity projects in the Northeast and Jammu & Kashmir.

• Hydropower and PSP tunnels in high-altitude terrains.

• Underground utility corridors for smart cities and water supply.

As of end of 2024, the Ministry of Road Transport and Highways announced 74 new tunnels totalling 273 km, backed by a proposed investment of _1 trillion. The segment is expected to witness sustained growth over the next decade, supported by policy clarity, private sector participation, and a growing pool of domestic tunneling expertise.

Road Segment in India

Indias road infrastructure is undergoing a transformative expansion, serving as the backbone of national connectivity, logistics efficiency, and regional development. With a network spanning over 6.7 million kilometers, India has the second-largest road network in the world, carrying 64.5% of freight and 90% of passenger traffic.

Government Initiatives and Policy Focus

The Government of India has prioritized road development through a series of flagship programs and policy reforms:

• Bharatmala Pariyojana: Envisages the development of over 34,000 km of national highways under Phase I, with an investment of _5.35 trillion The program focuses on economic corridors, border roads, and port connectivity, aiming to reduce logistics costs by up to 15%.

• PM Gati Shakti National Master Plan: Aims to integrate road development with rail, port, and logistics infrastructure, enabling multimodal connectivity and faster project execution.

• National Infrastructure Pipeline (NIP): Includes over 1,800 road projects, with 826 under PPP mode, reflecting growing private sector participation.

• Budgetary Support: In FY 2025–26, the Ministry of Road Transport and Highways received an allocation of _2.87 trillion, a 2.4% increase over the previous year, underscoring continued fiscal commitment.

• 100% FDI under automatic route and the use of Infrastructure Investment Trusts (InvITs) have further catalysed private investment in the sector.

Major Projects Underway

India is currently executing several marquee road projects that are reshaping national connectivity:

• Delhi–Mumbai Expressway (1,386 km): A _1.1 trillion greenfield corridor expected to halve travel time between the two metros.

• Mumbai–Nagpur Expressway (701 km): Also known as Samruddhi Mahamarg, this _550 billion project will cut travel time from 15 to 8 hours.

• Dwarka Expressway (29 km): A smart expressway easing congestion in the NCR, opened in May 2025.

• Raipur–Visakhapatnam Expressway (465 km): Enhancing east–west connectivity and industrial access.

These projects are being developed with smart highway features, including automated tolling, EV charging stations, and AI-based traffic management systems.

Future Outlook

Indias road infrastructure outlook is anchored in Vision 2047, which aims to create a technologically advanced, resilient, and sustainable highway network. Key trends shaping the future include:

• Development of 27 greenfield corridors spanning 9,860 km, improving freight efficiency and regional access.

• Integration of digital technologies such as real-time monitoring, automated traffic control, and predictive maintenance.

• Sustainable practices, including solar-powered lighting, recycled materials, and EV infrastructure.

• Multimodal logistics parks and ropeway connectivity under the Parvatmala Pariyojana, enhancing last-mile access in hilly regions.

Indias road infrastructure sector is poised for renewed momentum in FY26, supported by a robust pipeline, strong investor appetite, and continued government prioritization. According to CRISIL Ratings, infrastructure investments are projected to rise by 38% to _15 trillion by FY26, with the road sector alone accounting for 60% of this outlay—translating to nearly _9 trillion in capital deployment.

Highway construction is expected to accelerate to 12,500 km annually over FY25–FY26, driven by strengthened order books, improved execution capacity, and a rebound in project awarding.

With a strong policy push, digital monitoring systems, and a renewed emphasis on quality and sustainability, Indias road sector is well-positioned to remain a key driver of economic growth and connectivity in the years ahead.

Urban Infrastructure Segment in India

Indias urban infrastructure is undergoing a transformative shift, driven by rapid urbanization, rising aspirations, and a renewed policy focus on sustainable, inclusive, and resilient cities. With over 35% of Indias population now residing in urban areas—projected to reach 600 million by 2036—the need for robust urban infrastructure has never been more urgent.

The Government of India has significantly scaled up investments in urban infrastructure. In the Union Budget 2025–26, a record _1 trillionUrban Challenge Fund was announced to support initiatives such as Cities as Growth Hubs, Creative Redevelopment of Cities, and Water and Sanitation improvements. This is complemented by continued funding under flagship programs:

• Smart Cities Mission (SCM): Out of 8,076 projects worth _1.64 trillion, 7,401 projects (_1.54 trillion) have been completed as of late 2024.

• Atal Mission for Rejuvenation and Urban Transformation (AMRUT): Focused on water supply, sewerage, and green spaces across 500 cities.

• PM SVANidhi Scheme: Over 6.8 million street vendors have benefited, with new provisions for UPI-linked credit cards and enhanced loan access.

• National Urban Digital Mission (NUDM): Aims to digitize urban governance and service delivery across all 4,400+ towns and cities.

Indias metro rail network has also expanded rapidly, now the third-largest globally with over 1,000 km of operational lines. Urban mobility is further supported by electric bus fleets, multimodal hubs, and transit-oriented development (TOD) policies.

Major Urban Projects

Several transformative urban infrastructure projects are reshaping Indias cityscapes:

• Mumbai Coastal Road Project (MCRP): 29.2 km of urban expressway with tunnels and sea bridges, enhancing east-west connectivity.

• Central Vista Redevelopment (Delhi): Revamping Indias administrative core with modern, sustainable infrastructure.

• Dholera Smart City (Gujarat): Indias first greenfield smart city with integrated utilities, ICT backbone, and plug-and-play infrastructure.

• Jewar International Airport (Noida): A multi-modal transport hub expected to serve 12 million passengers annually in Phase 1.

• Navi Mumbai International Airport (NMIA): A

_167 billion greenfield airport project developed by Adani Airport Holdings and CIDCO. Phase 1 is nearly completed with a capacity of 20 million passengers annually, scaling to 90 million across five phases. The project includes two runways, four terminals, and multimodal connectivity via road, rail, and metro. Phase 2 pre-development works—including a second terminal and runway—will begin in October 2025, with full completion targeted by 2029.

Future Outlook

Indias urban infrastructure outlook is anchored in long-term planning and integrated execution. The PM Gati Shakti National Master Plan and National Infrastructure Pipeline (NIP) are aligning investments across transport, housing, water, and energy sectors. The government has committed _11.2 trillion in infrastructure capital expenditure for FY 2025–26, with a significant share earmarked for urban development.

Key Trends Shaping the Future Include

• Transit-oriented and mixed-use development to reduce congestion and improve liability.

• Green and climate-resilient infrastructure, including EV charging networks, solar rooftops, and flood-resilient drainage.

• Public-private partnerships (PPPs) in affordable housing, waste management, and smart utilities.

• Digital twin cities and AI-driven urban planning for predictive infrastructure management.

With urban India expected to contribute over 75% of GDP by 2030, the sector is poised for sustained growth, innovation, and investment.

Major Projects Executed by the Company

Patel Engineering Ltd. has successfully executed several landmark infrastructure projects across India and internationally, reinforcing its reputation for engineering innovation and advanced construction technology. Through the deployment of state-of-the-art equipment, sophisticated tunneling methodologies, and robust project management systems, the company has consistently delivered complex assignments in challenging environments. The following are some of the notable projects which have been executed in recent years.

Hydropower Projects

Koyna Hydroelectric Project (Stages I–IV) – Maharashtra – Indias largest completed hydroelectric project with a total installed capacity of 1,880 MW and Asias first lake tapping technique.

Srisailam Hydropower Project – Andhra Pradesh – A pumped storage scheme with a cavernous underground powerhouse, featuring 6 reversible turbines and Asias largest cavern at its time.

Ghatghar Hydroelectric Project – Maharashtra – Indias first RCC dam and a 250 MW pumped storage scheme using reversible turbines and twin reservoirs.

Kameng Hydroelectric Project – Arunachal Pradesh – A 600 MW run-of-the-river scheme with two dams, a 14 km head race tunnel, and a semi-circular underground powerhouse.

Parbati HEP – Himachal Pradesh – A 800 MW Hydropower project executed in challenging terrain.

Tunnel & Rail Infrastructure Projects

Sela Tunnel Project – Arunachal Pradesh – Worlds highest bi-lane road tunnel at 13,000 ft, comprising two tunnels and an escape tunnel, enhancing strategic connectivity.

Tunnel T-2 (USBRL Project) – Jammu & Kashmir – A double-tube railway tunnel (Main & Escape) of 5.1 km, completed with record-setting concrete lining.

Tunnel T-15 & part T-14 (USBRL Project) – Jammu & Kashmir – Tunnel spanning 13 km, completed with NATM technology and supporting Bridge. A key milestone in connecting Kashmir to the Indian Railways network.

Irrigation & Canal Projects

Polavaram Project (Right Main Canal) – Andhra Pradesh - A vital component of the multi-purpose Godavari River irrigation scheme, supporting water distribution across the state.

Jawahar Lift Irrigation Project – Telangana - A major lift irrigation scheme enhancing agricultural productivity in water-scarce regions.

Bhima Lift Irrigation Project – Telangana - Large-scale irrigation infrastructure supporting sustainable water management

Transport & Urban Infrastructure Projects

High Altitude Roads (Karzok to Chumar, Package I & II)

– Jammu & Kashmir – Construction of roads along the Indo-China border in extreme terrain, supporting defence and logistics.

Nellore–Kaveli NH-5 – Andhra Pradesh – Highway development improving regional connectivity and trade.

Indoor Sports Stadium – Surat, Gujarat – A modern sports facility contributing to urban development and recreation.

BYTCO Hospital – Nashik, Maharashtra – Healthcare infrastructure enhancing public health services. Parliament Building – Bhutan – A prestigious international project reflecting architectural and cultural collaboration.

The Companys Financial Performance Review for FY25:

Revenue from Operations: Consolidated Revenue

FY25	50,933.59
FY24	45,441.08
Standalone Revenue
FY25	50,076.45
FY24	44,120.39

FY25 marked a significant year for the Company as revenues were at an all-time high surpassing _ 50,000

Million for the first time in the history of the Company. For FY25, the Companys consolidated revenues from operations increased by 12.09% to _50,933.59 million, up from _45,441.08 million in FY24. Standalone revenues rose by 13.50% to _50,076.45 million, compared to _44,120.39 million in FY24. This increase in revenues were due to the strong project execution across various project sites.

Operating EBITDA: Consolidated Op. EBITDA

FY25	7,331.90
FY24	6,902.94
Standalone Op EBITDA
FY25	6,912.58
FY24	6,201.06

Operating EBITDA has increase in line with the increase in revenues. On a consolidated basis, Operating EBITDA increased by 6.21% to _7,331.90 million, compared to

_6,902.94 million in FY24. Standalone Operating EBITDA grew by 11.47% to _6,912.58 million, up from _6,201.06 million. The margins have been in line with expectations at ~14%.

Profit Before Tax & Exceptional Items Consolidated PBT & EI

FY25	4,772.51
FY24	3,194.94
Standalone PBT & EI
FY25	4,817.86
FY24	2,751.77

On a consolidated basis, profit before tax and exceptional items increased by 49.38% to _4,772.51 million, compared to _3,194.94 million in FY24. Standalone profit before tax and exceptional items grew by 75.08% to _4,817.86 million, up from _2,751.77 million. This improvement was mainly due to the reduction in finance cost over the year.

Net Profit:

Consolidated Op. PAT

FY25	2,421.74
FY24	2,641.00

Standalone Op. PAT

FY25	2,594.92
FY24	2,881.80

On a consolidated basis, profit after tax reduced to

_2,421.74 million, compared to _2,641.00 million in FY24. Standalone profit after tax reduced to _2,594.92 million from _2,881.80 million in FY24. This reduction in Net Profit during the year was due to the exceptional items during the year. Exceptional Loss in FY25 was _1,515.80 Million which was mainly due to the settlement of arbitration awards and claims settled during the year under the Vivad-se-Vishwas II scheme.

Segment Wise Revenue Breakup FY25

The segment wise revenue break-up on a standalone basis for FY25 is – Hydropower – 49% at _24,537 Mn as compared to _22,060 Mn in FY24, Irrigation – 26% at

_13,020 Mn as against _10,589 Mn last year, Tunnel – 11% at _5,508 Mn compared to _6,618 Mn in FY24, Road – 10% at _5,508 Mn against _2,206 Mn in FY24 and revenue from Urban Infra and Others contribute 4% at _2,003 as compared to _1,908 Mn in the previous year.

Update on Financial Strategies implemented by the Company in FY25

1. Asset Monetization via sale of Non-Core Assets:

The Company sold one of its land parcels in Bangalore during the year and realized _290 Mn from land monetization. Further, during the year the Company also sold balance stake in Michegan Engineers Pvt Ltd and realized _1,000 Mn.

2. Settlement of Arbitration Claims Under Vivas-se-Vishwas II Scheme

In FY25, the Company settled various claims under the Vivad Se Vishwas scheme which was launched for the settlement of pending disputes related to Government contracts which were under on-going arbitration. The Company realized around _ 3,500 Mn through settlement of arbitration claims.

3. Raising Of Funds Via QIP

During FY25, the Company raised ~ _ 4,000 Mn via QIP which was oversubscribed, further reflecting investor confidence in the Company. These funds were utilised to fast track execution works across project sites which proved essential in achieving higher revenues during the year and enabling the company to surpass the revenue threshold of _50,000 Mn for the first time in its history.

4. Reduction in Debt

The Company continued to reduce the overall debt during the year. As of March 31, 2025, the consolidated gross debt stands at _ 16,025 Mn, compared to _ 18,855 Mn as of March 31, 2024. Further, total advances from clients as of March 31, 2025, amount to _ 6,645 Mn, down from _ 7,601 Mn as of March 31, 2024. Consequently, the net serviceable debt has decreased from _ 26,456 Mn in March 2024 to _ 22,670 Mn in March 2025, marking a reduction of 14.31%. The debt breakdown is as follows: _ 10,015 Mn is categorized as Working Capital Debt, while the remaining

_ 6,010 Mn constitutes Term Debt. The Term Debt is anticipated to be settled over the next 2 to 3 years through proceeds from monetizing non-core assets and/or surplus generated from operations.

There was also a reduction in interest outflow by ~ _ 400 Mn in FY25 which stood at _ 3,224.18 Mn as compared to

_ 3,620.94 Mn in FY24.

Credit Rating Update

In April this year, the Company received the rating of A- with a stable outlook from India Ratings, a fitch group Company.

Key Financial Ratios

In compliance with the requirement of listing regulations, the key financial ratios on Consolidated basis have been provided here under:

Debtor Turnover (in Times)

	Change: -9.31%
FY25	7.79
FY24	8.59

Inventory Turnover (in Times)

	Change: 3.31%
FY25	1.07
FY24	1.03

Interest Coverage Ratio (in Times)

	Change: 16.25%
FY25	2.79
FY24	2.40

Current Ratio (in Times)

	Change: 6.80%
FY25	1.57
=LEFT>FY24	1.47

Debt to Equity Ratio (in Times)

	Change: -30.00%
FY25	0.42
FY24	0.60

Debt to EBITDA (in Times)

	Change: -19.98%
FY25	2.19
FY24	2.73

Operating Profit Margin (in %)

	Change: -5.24%
FY25	14.40%
FY24	15.19%

Net Profit Margin (in %)

	Change: -18.19%
FY25	4.75%
FY24	5.81%

ROE (in %)

	Change: -28.80%
FY25	6.55%
FY24	9.20%

ROCE (in %)

	Change: 11.23%
FY25	15.06%
FY24	13.54%

Note: The explanation for significant change along with reasons has been captured in the notes to financial statements.

The Companys Business Operations Review for FY25

In FY25, Patel Engineering Ltd. sustained its focus on operational excellence and disciplined execution across its core verticals—hydropower, tunneling, irrigation, and urban infrastructure. Leveraging over seven decades of engineering legacy, the Company continued to optimize resource deployment and adopt innovative construction methodologies to deliver complex infrastructure projects across varied geographies.

During FY25, order inflow remained subdued at approximately _5,500 million due to the impact of the general election cycle on project tendering and awarding timelines. However, the momentum has clearly shifted in Q1 FY26, with the Company securing fresh orders aggregating to ~ _25,000 million—underscoring its agility in capturing emerging opportunities. With increased government focus on infrastructure, enhanced capital outlays, and a healthy pipeline of projects, Patel Engineering is strategically poised to scale up its order book meaningfully in the coming year.

In FY25, the Company achieved substantial completion of its T-15 and Part T-14 Tunnel project located in Jammu & Kashmir, part of the USBRL package. Trial runs were conducted by the Indian Railways.

As of March 31, 2025, the Company is executing 48 projects—including two international projects in Nepal—across 15 Indian states, with a cumulative contract value of _1,52,176 million. These projects are a testament to Patel Engineerings technical acumen, project diversity, and enduring role in strengthening Indias infrastructure landscape.

Segment Wise Break up of the Order Book:

Segment	No. of Projects	Order Book Value _ ( In Million)
Hydroelectric	15	1,00,739
Irrigation	20	34,946
Tunnel	5	11,757
Road	5	2,901
Others	3	1,834
Total	48	1,52,176

Hydropower Projects

Hydropower continues to be the cornerstone of the Companys infrastructure portfolio, both in scale and strategic significance. As of March 31, 2025, the segment represents 66.20% of the Companys total order book, underscoring its centrality to long-term growth and execution strategy. The Company is currently executing 15 hydropower projects, reaffirming its deep-rooted expertise in this technically demanding domain located in some of the most challenging terrains.

The Company is currently involved in the execution of ~ 8,000 MW of hydropower projects which are currently under execution in India.

During FY25, the Company maintained robust progress across multiple hydropower contracts, despite difficult working conditions and environmental sensitivities. The Companys active presence in Indias hydropower corridors – especially in Jammu & Kashmir, Himachal Pradesh, Sikkim and Arunachal Pradesh - reinforces its critical role in delivering on the countrys clean energy and water security targets.

With increasing emphasis on pumped storage projects (PSPs) as part of the national renewable strategy, the Company is well poised to capitalize on emerging opportunities, given its deep domain expertise and operational footprint in hydropower civil works and also execution works on the Kundah Pumped Storage project of 500 MW in Tamil Nadu.

Some of The Major Hydropower Projects That Our Company is Currently Under Taking is as Below

Dibang Multipurpose Project	2,880 MW
Subansiri HEP	2,000 MW
Kiru HEP	624 MW
Kwar HEP	540 MW
Teesta VI HEP	500 MW
Shongtong HEP	450 MW
Luhri HEP	210 MW

Irrigation Projects

The irrigation segment remains a key strategic focus for the Company, contributing 22.96% of the current order book and supporting Indias drive toward sustainable water resource management and agricultural resilience. As of March 31, 2025, the Company is executing 20 irrigation projects across various states in India.

In FY25, the Company maintained steady progress across multiple complex irrigation projects spread across water-scarce regions in Maharashtra, Madhya Pradesh, Telangana, and Andhra Pradesh. These projects are critical to enhancing irrigation intensity, improving rural livelihoods, and strengthening food security outcomes in alignment with government objectives such as Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) and Jal Shakti Mission.

During the year, the Company received the Jigoan Irrigation project located in Maharashtra from the Office of Executive Engineer, Government of Maharashtra with a project value of _3,176 Million which is being executed in Joint Venture and the Companys share in this project is _1,112 Million. Further, the Company was also declared Lowest Bidder (L1) for the Nira Deoghar project located in Maharashtra from Maharashtra Krishna Valley Development Corporation. This L1 status was converted to Letter of Award (LoA) in Q1 of FY26. The value of this project is ~ _9,583 Million being executed in Joint Venture of which the Companys share is _1,917 Million. With increasing state-level investments in climate-resilient irrigation systems and a renewed push for micro-irrigation and water conservation infrastructure, the Company is well positioned to expand its role in this segment. The Company continues to pursue targeted opportunities with an emphasis on execution excellence and collaborative stakeholder engagement.

Some Of The Major Irrigation Projects That are Currently Under Execution are as Follows

• Rihand Micro Irrigation Project

• Sleemanabad Irrigation Project

• Khalwa Micro Lift Irrigation Scheme

• Tumkur Branch Canal Project – Package 1, 3 and 5

• Krishna Marathawada – Scheme 1 and 2

• Parbati Irrigation Project

Tunneling Projects

With decades of experience and engineering depth, the Company is well regarded for its execution of tunnel works under varied geological conditions—ranging from fragile Himalayan strata to congested urban environments. The Companys proficiency in NATM (New Austrian Tunneling Method), TBM (Tunnel Boring Machine) operations, and micro tunneling ensures safe and efficient execution of deep-bore and long-distance tunnels. These capabilities have also enabled the Company to participate in urban tunneling projects involving water conveyance and sewer systems for MCGM and CIDCO in Mumbai.

As of March 31, 2025, the Company is executing five major tunnel projects, which together constitute 7.73% of its total order book.

In FY25, the Company achieved a significant execution milestone with the substantial completion of Tunnel T-15 and part of Tunnel T-14, key components of the iconic Udhampur–Srinagar–Baramulla Rail Link (USBRL) project in Jammu & Kashmir. These tunnels traverse some of the most geologically sensitive and topographically challenging zones in the Himalayan region, underscoring the Companys tunneling capabilities under adverse conditions.

The USBRL project is a flagship initiative of Indian Railways aimed at improving connectivity and socio-economic integration of the Kashmir Valley with the rest of the country. The completion of T-15 and T-14 marks a major step in this nation-building endeavor. In a critical milestone during FY25, Indian Railways conducted successful trial runs through the completed tunnel stretches, validating safety, structural integrity, and operational readiness. The Company is currently executing the CIDCO-awarded water tunnel project in Maharashtra and is advancing on two significant projects in Mumbai—AMT-II (Amar Mahal to Trombay) and the Powai to Ghatkopar tunnel—both integral to improving the citys water distribution resilience. Additionally, the Tunnel T-7 project, spanning West Bengal and Sikkim, marks a first in Indias tunneling history, involving the countrys inaugural underground station cavern construction.

With expanding opportunities in metro rail, water supply, and inter-basin connectivity, the Company is strategically positioned to deepen its presence in the tunneling segment, supported by its expertise in NATM, TBM, and micro tunneling methodologies.

Road Projects

The road infrastructure segment continues to offer select opportunities that align with the Companys execution capabilities and risk-management framework. While not the Companys primary vertical, its contributions in this space remain strategically focused and technically significant—especially in regions that demand terrain-specific engineering expertise. As of 31st March 2025, the Road segment constitutes 1.91% of the Order Book. The Company remains attentive to emerging bids under the Bharatmala Pariyojana, NHIDCL programs, and state highway development plans, evaluating prospects where its unique technical profile adds execution value. The emphasis remains on calibrated participation in road projects that offer tunnels to be constructed as part of the package as well. Our Company has five on-going road projects, major ones include the Katraj Kondwa Road, Up gradation of Pimpla junction and the Ramban to Banihal Road project.

Urban Infrastructure & Other Projects

Though accounting for 1.2% of the Companys current order book, the Urban Infrastructure & Others segment plays a complementary role in Patel Engineering Ltd.s portfolio by offering diversification and execution stability. While modest in scale, the Urban Infrastructure & Others segment provides diversification and opportunities to engage with state-driven development goals. The Company remains selective in its participation, focusing on technically sound, financially viable projects that complement its broader infrastructure strategy.

Future Potential and Pipeline of Upcoming Works Patel Engineering Ltd. is strategically positioned to capitalize on Indias infrastructure growth, particularly in sectors where it has deep technical expertise. The following developments are expected to contribute significantly to the companys future order book and revenue visibility: Hydropower Expansion: Approximately 25–30 GW of new hydropower capacity is expected to be tendered by major PSUs such as NHPC, SJVN, and NEEPCO, offering significant opportunities. Most of these projects are in advanced stages of survey and investigation while some have already cleared the survey stage and awaiting final clearances. Jal Jeevan Mission (JJM) and Pradhan Mantri Krishi Sinchayee Yojana (PMKSY): The Government of India has allocated _6,70,000 million for FY26 under JJM, aimed at expanding rural water infrastructure. A planned investment of _82,598 million under PMKSY will drive irrigation and water resource development projects.

Roads & Highways Development: Over _10 trillion is expected to be spent on roads and highways in the next few years, including national corridors, border roads, and expressways.

Tunnel Infrastructure Pipeline: More than 285 km of tunnel works are expected to be tendered across 75+ projects, with a cumulative outlay of approximately _1 trillion These include rail connectivity, water tunnels, and urban infrastructure.

The Companys Risks & Concerns

Patel Engineering Ltd., with its deep domain expertise and geographically diverse operations, remains vigilant to the evolving risk landscape that accompanies large-scale infrastructure development. While opportunities remain strong across its core segments, the Company recognizes that long-term value creation is contingent on effectively anticipating and managing a spectrum of strategic, operational, financial, and environmental risks.

1. Sectoral Concentration and Bid-Linked Revenue Dependence: The Companys project inflows are substantially tender-driven and linked to government-led infrastructure programs. While this enables long-term visibility and alignment with national priorities, it also exposes the business to delays in bid finalizations as observed in FY25 due to it being an election period. But with the focus of the Government on infrastructure development and the elections now being over, we believe the risk of any delays in order inflows are not significant anymore and multiple projects are expected to come up for bidding in near future.

2. Execution Risk in Challenging Geographies: A significant share of ongoing projects are located in Himalayan and remote regions prone to logistical constraints, climatic events, and complex geotechnical conditions. The Company addresses these risks through detailed planning, local workforce integration, and site-specific execution strategies.

3. Liquidity Cycles and Working Capital Pressures: As with many EPC and construction companies, cash flows are closely tied to client certifications, milestone-based payments, and sub-contractor coordination. Delays in receivables can impact working capital cycles. To mitigate this, the Company emphasizes financial discipline and proactive engagement with clients for timely clearance.

4. Supply Chain and Resource Volatility: Input costs, particularly for steel, cement, fuel, and specialized equipment, remain susceptible to global commodity price fluctuations. Inflationary pressures and supply chain disruptions can affect project margins. The Company factors these risks into its cost estimates, includes escalation clauses, and maintains vendor partnerships to secure timely delivery.

5. Human Capital and Safety Risks: Infrastructure projects are manpower-intensive, and ensuring workforce availability, safety, and skill alignment remains a priority. The Company has strengthened its safety protocols, deployed training initiatives, and invested in digital tools for site monitoring to reduce accidents and enhance productivity in remote project areas.

6. Technology and Cybersecurity: As digital systems grow across finance, engineering, and project monitoring, vulnerabilities to cyber threats have emerged across the sector. Our Company continues to strengthen its IT infrastructure, access controls, and data protection frameworks to safeguard operational and corporate integrity.

7. Subcontractor and Supply Chain Dependencies:

Execution of large infrastructure projects requires reliance on specialized subcontractors and suppliers. Non-performance, delays, or non-compliance by third parties could affect delivery timelines. However, the Companys long-standing vendor relationships, robust prequalification procedures, and stringent quality controls significantly reduce this risk. Most partners have demonstrated consistent performance and technical alignment over multiple project cycles.

The Company has instituted a comprehensive risk management framework designed to proactively identify, evaluate, and mitigate key business and operational risks. This framework is embedded across project lifecycles and decision-making processes, enabling the Company to respond with agility to emerging challenges while safeguarding stakeholder interests. With defined escalation protocols, compliance oversight, and internal control systems, the Company is well equipped to navigate uncertainties and sustain performance in a dynamic infrastructure landscape.

Asset Ownership

Hydropower Assets: The company will evaluate the changing government policies for hydro power projects especially in Arunachal Pradesh where the company has few licenses for hydro power projects and decide based on revised conditions about the future of the licenses obtained in the past, till then the company is focussing on EPC business only.

Thermal Power Assets: Through its subsidiaries, the Company had acquired land in Tamil Nadu for the proposed development of a thermal power plant. In line with evolving energy market dynamics and environmental considerations, the project has been placed on hold, and there are currently no active development activities associated with these assets. The company is evaluating multiple options how to monetize the land parcel acquired for the projects.

Road BOT Projects: The Company holds strategic equity interests in three road infrastructure projects developed on Build-Operate-Transfer (BOT) and annuity or toll models:

1. Patel KNR Infrastructure Ltd. (PKIL): A 60.00% stake in a 60.40 km road project on NH-7 in Karnataka (KNT-1 section), executed in consortium with KNR Constructions Ltd. The project commenced in December 2009 and earns fixed semi-annual annuity payments from NHAI, aggregating to _658.80 million annually.

2. Patel KNR Heavy Infrastructure Ltd. (PKHIL): A 42.00% stake in a 53.02 km four-laning project on the Nagpur–Hyderabad NH-7 corridor in Andhra Pradesh (Islam Nagar to Kadtal stretch), developed in joint venture with KNR Constructions Ltd. The project commenced in June 2010 and receives a fixed annual annuity of

_ 887.40 million from NHAI.

3. ACP Tollways Pvt. Ltd. (ATPL): A 32.00% stake in a toll road project between Varanasi and Shakti Nagar in

Uttar Pradesh. The project began operations in October 2015 and generates revenues through toll collection from vehicular movement.

These strategic investments continue to provide stable and predictable revenue streams while complementing the Companys EPC execution portfolio.

Real Estate

The Company continues to hold a portfolio of strategically located land parcels, primarily concentrated in and around major metropolitan regions such as Mumbai, Hyderabad, Bengaluru, and Chennai. These assets were originally earmarked for residential development and continue to represent monetization potential through outright sale or strategic development partnerships.

During FY25, the Company sold one of the land parcels located in Electronic City Bangalore and realised around

_290 Million from this sale. The focus remains on monetizing the balance land holdings in a phased manner. In Hyderabad, the Company successfully completed all construction activities of its residential project, Smondo Gachibowli. The handover process to homeowners is in the final stages with most possessions completed. Going forward, the Company will continue to evaluate monetization opportunities across its land bank while maintaining its strategic focus on its core Engineering & Construction business.

CSR Initiatives

During the financial year, the Company remained committed to its CSR objectives.

Our initiatives were focused on key areas including education, healthcare and community development. The Company has undertaken vide range of CSR initiatives, spanning across regions including Lower Subansiri, Arunachal Pradesh, Shimla & Kullu, Himachal Pradesh. Kishtwar, Jammu & Kashmir, Mumbai, Maharashtra, Singrauli, Madhya Pradesh, Nilgiri, Tamil Nadu and Poonch, Jammu & Kashmir.

Key Projects conducted at sites

Subansiri Lower HEP

• Plantation Programme; promoting cultural events in AP.

• Construction of drain to divert the water directly to river and provide plain concrete road for stable movement of vehicles for local villagers as part of rural development.

Luhri HEP

• "Pure Water for all" initiative to provide safe drinking water to communities promoting health, and enhancing quality of life.

Kwar HEP

• Infrastructure development and other sanitation facilities in school.

• Retrieval of environmental degradation by "City Forest, Nagar Van" initiative.

• Ambulance service for local villagers who are living in the adjoining areas of the project.

Kiru HEP

• Infrastructure Developments, providing RO (Water Purifier), Water Coolers and other sanitisation facilities in schools.

• Ambulance service for local villagers who are living in the adjoining areas of the project.

CIDCO Project

• Sanitation for Villagers and School Children

• Approach road for internal parts of village

Rihand Micro Irrigation Project

• Construction of Public Toilets in Local Government school

Kundah Pumped Storage Hydroelectric Project

• Adoption of government school in Nilgiris

All CSR activities were undertaken in accordance with Section 135 of the Companies Act, 2013 and as per the CSR policy approved by the Board. Our CSR efforts reflects the Companys belief that meaningful engagement with society builds long-term value, strengthens relationships with stakeholders, and contributes to the nations progress.

You can read more about Patels CSR initiatives on page 65-70 of the Annual Report 2025.

Internal Financial Controls

The Company has established robust internal financial controls commensurate with the scale and complexity of its operations, particularly with reference to the preparation and presentation of its financial statements. During the year under review, the effectiveness of these controls was evaluated, and no reportable material weaknesses in their design or operation were identified.

Management Systems

During FY 2024–25, the Company continued to strengthen its performance-centric culture by advancing systems and practices across key operational pillars - resource utilization, quality assurance, environmental stewardship, occupational safety, human capital development, and design engineering. Our focus remains steady on driving customer satisfaction, operational excellence, and timely project delivery.

We maintained and enhanced our Integrated Management System (IMS), structured on ISO standards, which serves as the backbone for systematic and sustainable operations across the organization. It provides a unified framework for quality, environmental, and safety protocols—enabling consistent performance and regulatory compliance. Significant enhancements were made to our digital document management ecosystem, enabling secure and streamlined access to critical project data. This transformation ensures timely information flow and fosters accountability among internal and external stakeholders.

Quality assurance remains central to our operational ethos. Our upgraded systems now offer deeper traceability and audit readiness through rigorous inspections, structured reporting of non-conformities, and swift corrective interventions. Given the complexity of our project sites, safety management continues to receive high priority. Our approach combines proactive risk assessment, recurring safety training, incident response planning, and a zero-tolerance policy for non-compliance. Weve adopted Risk-Based Thinking to recalibrate hazard identification and environmental strategies—resulting in a marked reduction in incident frequency across worksites. To further enrich our safety-first mindset, we scaled up environmental and frequent safety workshops and embedded sustainability principles within our site-level decision making. These efforts support both compliance and community impact goals.

Seamless collaboration is critical to timely execution. Accordingly, our project communication infrastructure saw continued modernization—integrating advanced communication platforms, IoT based tracking for vehicular movement and diesel consumption ensuring real time data for better monitoring and planning. These tools empower teams across geographies to stay aligned and responsive.

To ensure continuous improvement, our management review systems has improved, allowing us to identify performance bottlenecks early and implement corrective strategies. This dynamic feedback loop reinforces operational resilience.

Looking ahead, we are excited to expand our technology integration roadmap, with special emphasis on AI-driven analytics, IoT-based monitoring, and immersive E-Learning modules to future-proof our workforce.

These initiatives echo our commitment to becoming a Digital Native enterprise—connecting our operations with global standards, fostering an adaptive workforce, and unlocking innovation-led growth.

Information Technology Services

This year has been foundational for our organizations digital future, marked by an aggressive acceleration in our IT strategy. We successfully spearheaded the strategic integration of Internet of Things (IoT) technologies across critical operational domains, delivering unprecedented real-time data visibility and driving efficiency gains across various projects. Concurrently, we commenced the enterprise-wide implementation of the Digital Personal Data Protection Act (DPDPA), a monumental undertaking that underscores our unwavering commitment to data privacy and regulatory compliance. Our comprehensive approach includes overhauling data handling policies, investing in cutting-edge privacy-enhancing technologies, and launching a robust, mandatory training program for all employees on data stewardship, cybersecurity awareness, and foundational AI principles to ensure absolute readiness and resilience. These dual initiatives collectively fortify our operational intelligence and reinforce the trust indispensable for sustainable growth.

In parallel, we are executing a transformative upgrade of our entire network. A strategic cornerstone involves the rigorous curation and preparation of our extensive 75-year data archive, including implementing stringent data quality frameworks and applying sophisticated metadata tagging to ready this invaluable historical asset for its full AI potential. In a significant milestone for our cloud journey, we have successfully completed the first stage of our migration, laying crucial groundwork for data readiness. We have now initiated the second phase, focusing on optimizing our cloud infrastructure to support advanced analytics and AI capabilities. This profound data readiness supports our overarching ambition to fully institutionalize AI across all business functions, achieved by meticulously revisiting and re-engineering core business processes to be agile, interoperable, and fundamentally designed for seamless AI integration. These modernized, AI-ready processes will enable us to harness intelligent automation, predictive analytics, and generative AI capabilities, redefining operational excellence and empowering visionary strategic foresight. Crucially, our transformative journey extends to our people. We have initiated a significant endeavour to prepare every employee, across all generations and professional backgrounds, to become tech-savvy and AI-aware through the comprehensive training programs already underway. This effort, a testament to our talents enthusiastic adaptability and the relentless commitment of our IT team, is equipping employees with essential digital literacy and foundational AI understanding. This not only enhances organizational performance and individual safeguarding against cyber complexities but also significantly facilitates effective change management, fostering an adaptable, resilient, and innovative culture for the digital age.

Human Resource Department

Employees are our most valuable asset. With a workforce of over 4,600 permanent employees, we remain committed to fostering an inclusive, engaging and supportive work environment.

Over the past year, we have continued to strengthen our HR practices by nurturing talent, prioritizing employee well-being and enhancing internal systems. Our skill enhancement initiatives, specially for workers, at high-altitude project sites have further improved the effective utilisation of equipment and manpower.

In a predominantly remote working setup, we have focused on promoting health & well-being and encouraging open communication across teams.

Through targeted retention efforts, regular employee connect initiatives and timely grievance redressal, we are cultivating a work environment where employees feel heard and supported.

Our structured performance management system and merit-linked Variable Pay program recognize individual contributions and support long-term growth.

With a healthy blend of experienced professionals and emerging talent, we are building a resilient, future-ready workforce. Guided by our "People First" philosophy, our HR department remains focused on creating a workplace where employees are valued, empowered and motivated to drive collective success.

Cautionary Statement

This Annual Report contains certain forward-looking statements, including managements objectives, estimates, expectations, and projections, intended to help investors understand the Companys future prospects and make informed investment decisions. These statements—whether written or oral—are based on managements current assumptions and plans. Wherever possible, such statements are identified by words like "anticipates," "estimates," "expects," "projects," "intends," "plans," "believes," and other expressions of similar meaning. While these forward-looking statements reflect prudent assumptions, actual outcomes may differ materially due to a range of risks and uncertainties. These may include changes in political or economic conditions, fluctuations in exchange rates or tax laws, litigation, labour dynamics, interest rate movements, and sector-specific developments in infrastructure. Accordingly, the Company makes no assurance regarding the realization of these statements and undertakes no obligation to publicly update any forward-looking information in light of new data, future events, or otherwise.

August 11, 2025