Global Economic Outlook
The global economic environment continues to reflect the impact of dynamic challenges and structural shifts. Persistent geopolitical tensions and ongoing monetary policy tightening, aimed at curbing inflation, have led to uneven economic performance across regions.
Advanced economies are witnessing a slowdown in growth, mainly due to elevated interest rates and the lingering effects of past inflation. In contrast, emerging markets, particularly in Asia, are displaying greater endurance. This stems from robust domestic consumption, supportive fiscal measures, and targeted policy reforms.
According to the International Monetary Fund (IMF), worldwide GDP growth is projected to remain modest at 3.2% in 2025. Under the IMFs baseline forecast, global growth is expected to moderate further to 3.0% in 2026. Emerging Asia, spearheaded by India and China, is expected to contribute a major share of this global output. However, downside risks remain considerable. These include potential energy price fluctuations, geopolitical disruptions, supply chain bottlenecks, delayed economic effects of prolonged monetary tightening, and more importantly, a cascade of negative consequences, including supply chain disruptions, retaliatory measures, and strained relations on account of the unilateral imposition of differential tariffs by the U.S. This approach, which uses economic tools for geopolitical leverage, is fundamentally altering the global economic and geopolitical framework by undermining multilateral institutions and encouraging new strategic alignments.
In this context, policy coherence, structural reform, and economic diversification are anticipated to be critical to ensuring macroeconomic stability and sustainable growth. Further, the resolution for unilateral tariffs requires a multi-pronged approach combining direct diplomatic de-escalation, a renewed commitment to multilateral institutions like the WTO, and domestic policy adjustments to mitigate economic harm and diversify supply chains.
(Sources: https://kpmg.com/xx/en/our-insights/sector-insights/global- economic-outlook-q3-2024.htmlhttps://www.imf.org/en/Blogs/Articles/2025/04/22/the-global-economy- enters-a-new-era various news items/ articles)
Indias Economic Overview
The nations economic landscape in 2025 reflects both resilience and emerging challenges. The IMF estimates real GDP growth at 6.2% for the current year, making it one of the fastest-growing major economies in the world. Strong private consumption, particularly in rural areas, and sustained public investment in infrastructure and manufacturing are driving this pace. India also overtook Japan to become the fourth-largest economy, with a GDP of US$ 4.18 Trillion. Yet, global uncertainties, including trade tensions and geopolitical risks, have prompted Moodys to lower Indias growth forecast slightly to 6.3% for 2025.
Domestically, the Reserve Bank of India (RBI) has adopted a cautious monetary policy stance to balance growth and inflation. In April 2025, the RBI cut the repo rate by 25 basis points to 6% and in June 2025, the RBI cut a further 50 basis points to 5.5% shifted to an ‘accommodative stance to spur economic activity. Simultaneously, it infused liquidity into the banking system to ease interbank lending costs and encourage credit expansion. Despite these measures, the Indian Rupee has experienced volatility, with expectations of depreciation in the coming months due to anticipated interest rate cuts and reduced RBI intervention in currency markets.
Indias economic prospects remain favorable, supported by structural reforms, digital infrastructure advancements, and a focus on inclusive development. The governments emphasis on renewable energy, manufacturing, and technology sectors is expected to further drive long-term growth.
Nevertheless, risks continue to exist. These include global geopolitical tensions, potential supply chain disruptions, and domestic challenges such as uneven rural recovery and climate-related agricultural impacts. Sustained policy support and prudent macroeconomic management will remain vital in maintaining the countrys growth path.
(Sources: https://pib.gov. in/PressReleasePage.aspx?PRID=2123826&utm_ source https://timesofindia.indiatimes.com/business/india-business/moodys- cuts-indias-2025-gdp-growth-forecast-to-6-3-amidst-trumps-trade-tariff-uncertainty-india-pakistan-tensions/articleshow/120923531.
cms?utm_sourcehttps://timesofindia.indiatimes.com/business/india-business/big- achievement-india-to-become-4th-largest-economy-in-2025-overtaking-japan-will-be-3rd-largest-by-2028/articleshow/120900272.cmshttps://economictimes.indiatimes.com/news/economy/policy/rbi-mpc- 2025-repo-rate-change-announcement-key-highlights-and-economic- impact/articleshow/120114106.cms?from=mdr and various news items/ articles)
Infrastructure Sector Overview
Indias infrastructure sector is playing a pivotal role in driving the countrys economic development, serving as a vital engine for growth, employment generation, and enhanced competitiveness.
Continued government focus has led to strong capital investments, faster modernization, and structural reforms in roads, railways, energy, ports, urban infrastructure, and logistics.
Flagship programs like the National Infrastructure Pipeline (NIP), PM Gati Shakti Master Plan, and Jal Jeevan Mission enable integrated planning and faster project execution. Collectively, they are laying the foundation for a more connected and efficient India.
Among all verticals, Indias road network has entered a transformative era, becoming the lifeline of economic integration and mobility. Over the past decade, strategic investments have expanded the national highway network to over 1,46,000 km, significantly improving freight movement and interstate connectivity. The governments push for world-class expressways, including the Delhi- Mumbai and Bengaluru-Chennai corridors, and the Bharatmala Pariyojana, redefines logistics efficiency. States including Uttar Pradesh and Maharashtra have also been developing road infrastructure across the respective states in a big way.
Further boosting this momentum, the Cabinet recently approved National High-Speed Road Corridor projects spanning 936 km, with an investment of Rs. 50,655 Cr. These aim to decongest key routes and strengthen nationwide connectivity. At the same time, technological advancements like GNSS-based tolling and the widespread adoption of FASTag are streamlining travel experiences while optimizing revenue collection.
Rapid urbanization, rising demand for quality infrastructure, and a strong focus on sustainability will continue to drive growth. A sharper emphasis on PPP models, asset monetization, and digitalization is reshaping infrastructure development. Emerging segments such as electric mobility, green corridors, high-speed rail, and smart cities are poised to define the next phase. Together, these factors will steer India closer to its vision of Viksit Bharat@2047.
(Sources: https://pib.gov.in/PressNoteDetails . aspx?NoteId=151963&ModuleId=3®=3&lang=1
https://economictimes.indiatimes.com/news/economy/ infrastructure/cabinet-approves-eight-important-national- high-speed-road-corridor-projects-at-rs-50655-crore/articleshow/112229698.cms?from=mdr)
Union Budget Highlights for the Infrastructure Sector
The Union Budget for FY 2025-26 outlines a strategic roadmap to accelerate Indias economic growth, with infrastructure development positioned as a key enabler of the Viksit Bharat@2047 vision. A capital expenditure of Rs. 11.21 Lakh Cr has been allocated, targeting transportation, energy, urban development, and water supply sectors. This substantial investment aims to enhance national connectivity, improve public amenities, and boost overall economic productivity, including optimizing logistic costs.
Within the infrastructure outlay, the Ministry of Road Transport and Highways (MoRTH) received an allocation of Rs. 2.72 Lakh Cr for FY 2025-26, maintaining parity with the previous year. The funding is expected to support the continued expansion of highways and expressways, especially in light of escalating land acquisition costs. Of the total,Rs. 1.87 Lakh Cr has been earmarked for the National Highways Authority of India (NHAI), marking a 10% rise over last years budget.
To boost infrastructure financing, the government launched a new asset monetization plan (2025-30), targeting Rs. 10 Lakh Cr in revenue generation. This builds on the success of the 2021 initiative. Additionally, infrastructure-related ministries are tasked with developing a three-year project pipeline under public-private partnership (PPP) models. States are also being incentivized through Rs. 1.5 Lakh Cr in 50-year, interest-free loans for capital expenditure and reform initiatives.
The government reaffirmed its infrastructure commitments by emphasizing the National Infrastructure Pipeline (NIP), the PM Gati Shakti National Master Plan, and the Jal Jeevan Mission (JJM). Furthermore, it increased the outlay for JJM, aiming to ensure 100% potable water supply for rural households.
To enhance regional air connectivity, the government introduced a modified UDAN scheme. It aims to connect 120 new destinations and serve 4 Cr passengers over the next decade. The scheme focuses on improving connectivity to hilly, aspirational, and Northeastern districts through new helipads and feeder airports.
Notably, greenfield airports have been announced in Bihar, alongside Patna airports expansion. These measures reflect a comprehensive push to strengthen regional and national aviation infrastructure.
Highways
India retains its position as the worlds second-largest road network, with National Highways now extending across 1,46,195 km, serving as the critical foundation for the nations transportation and economic activities.
The past decade has witnessed extraordinary expansion, with the National Highway network growing by over 60% from 91,287 km in 2014. The growth was particularly strong in high-capacity corridors. High-speed corridors rose sharply from 93 km to 2,474 km. Four-lane-plus highways (excluding HSCs) more than doubled, from 18,278 km to 45,947 km. These improvements reflect a sustained focus on improving both the scale and quality of highway infrastructure.
During FY 2024-25, the NHAI built 5,614 km of National Highways. While this marks continued progress, execution and awards slowed due to the extended election cycle and procedural delays in project commencement.
For FY 2025-26, MoRTH anticipates renewed momentum with an ambitious target of 10,000-10,500 km of highway construction. Approximately 30% (3,000 km) of this target will focus on upgrading existing infrastructure, marking a strategic shift toward network optimization and capacity expansion. The plan emphasizes inclusive development. It allocates 1,100 km to the North-East and 750 km to tribal regions. Additionally, it aims to operationalize a 5,800 km high-speed corridor network, further strengthening national connectivity.
To support financing needs, the NHAI actively pursued monetization through three routes in FY 2024-25: Toll Operate Transfer (TOT), Infrastructure Investment Trusts (InvITs), and toll securitization. Monetization proceeds stood at Rs. 28,724 Cr, including NHAIs highest-ever singleround InvIT receipt of Rs. 17,738 Cr.
Monetization is fast emerging as a key resource- mobilization tool. A Rs. 30,000 Cr target has been set for FY 2025-26, expected to contribute approximately 10% of total budgetary resources. For the upcoming year, NHAI has shortlisted 24 highway assets, covering 1,472 km, for monetization.
Private sector participation is actively encouraged to scale up investments in highway development and operation. In FY 2025-26, the government targets attracting up to Rs. 35,000 Cr in private capital under the Build-Operate-Transfer (BOT) model, primarily for multilane highways and access-controlled expressways. Approximately 30% of all highway projects awarded are expected to be implemented under the Public-Private Partnership (PPP) model. Continued emphasis on highspeed corridors, digital tools for monitoring, streamlined approval processes, and policy support will further enhance execution efficiency.
As part of its Vision 2047 roadmap, MoRTH aims to build 50,000 km of access-controlled highways, primarily comprising 4 to 8-lane expressways. While this will significantly expand lane capacity, the annual growth in linear kilometers is expected to moderate from the postpandemic highs.
The NHAI remains committed to developing world-class highway infrastructure that will improve transportation and substantially contribute to national economic growth and development. It will also ensure Indias road network continues to serve as a catalyst for progress and prosperity.
Continued Growth Momentum in Toll Collections
In FY 2024-25, toll collections in India touched a record Rs. 72,931 Cr, marking a robust 12.5% increase over the previous year. This growth was driven by multiple factors, including a steady rise in highway traffic, the annual revision of user fee rates to account for inflation, and the addition of new tollable road stretches, enhancing the overall travel experience for commuters. Moreover, the continuous expansion and improvement of the highway network have significantly contributed to better connectivity and efficiency across the country.
To further streamline toll operations and provide a seamless, barrier-free experience, the government is implementing Global Navigation Satellite System (GNSS)- based Electronic Toll Collection. This advanced system is expected to enhance efficiency and transparency in tolling operations by minimizing revenue leakages and effectively curbing toll evasion.
By enabling automatic toll deductions without the need for physical barriers, GNSS-based tolling will offer a smoother, faster, and more convenient journey for road users. Simultaneously, it will support the broader vision of modernizing Indias transport infrastructure.
(Sources:https://nhai.gov.in/nhai/sites/default/files/2024-06/Press_ Release_GNSS_EOI. pdf)
Railways
Indias railway infrastructure is undergoing a major transformation, led by the focus on modernization, safety, and capacity enhancement. The government has placed a strong emphasis on developing semi-high-speed and high-speed rail corridors, upgrading several stations across the nation, and enhancing freight efficiency.
In addition, the deployment of indigenously developed Vande Bharat trains continues to expand, with new routes being added to improve connectivity across key regions. The push for electrification is also progressing rapidly, with over 98% of the broad-gauge network now electrified, aligning with Indias commitment to sustainable transport.
In the Union Budget 2025-26, the government allocated Rs. 2.52 Lakh Cr to the Ministry of Railways, reflecting its central role in infrastructure development. The allocation covers significant investments in laying new tracks, doubling and electrification of existing lines, and deploying modern signaling systems to enhance operational safety and efficiency.
(Sources: https://pib.gov.in/PressReleasePage.aspx?PRID=2098714 ; https://pib.gov.in/PressReleasePage.aspx?PRID=2H55n )
Water
The Government of India launched the Jal Jeevan Mission (JJM) in 2019 to ensure clean and adequate drinking water for every rural household through individual household functional tap connections. To accelerate progress toward full coverage, the government extended the mission until 2028 and significantly increased its budget allocation. Since inception, the mission has benefited 15 Cr rural households, providing potable tap water to 80% of Indias rural population.
The government aims to achieve universal coverage within the next three years, ensuring no household is left behind. It reaffirmed this commitment in the Union Budget 2025-26 by increasing the missions total outlay to Rs. 67,000 Cr, reflecting the governments continued focus on strengthening rural water infrastructure. Government also has shifted its focus from infrastructure creation to ensuring long-term sustainability of water supply infrastructure.
(Source: https://pib.gov.in/PressReleaseIframePage .
Airports
Indias aviation sector is on a strong growth path, with domestic passenger traffic expected to double by 2030. This is fueled by an expanding middle class, rising real income levels, and ongoing infrastructure development. Consequently, India is quickly becoming a major player in international air travel and is projected to rank as the 5th largest outbound tourism market by CY 2027.
A major catalyst for this growth is the governments UDAN (Ude Desh Ka Aam Nagarik) scheme, which has strengthened regional connectivity by operationalizing 619 routes and linking 88 airports across the country. Under this scheme, the government plans to build 50 new airports in five years and connect 120 more destinations over the next decade.
To facilitate this expansion, the National Infrastructure Pipeline (NIP) has allocated over Rs. 91,000 Cr for airport infrastructure development between FY 2019-20 and FY 2024-25. As of November 2024, approximately Rs. 82,600 Cr had been invested, underscoring the governments commitment to modernizing Indias aviation infrastructure.
(Source: https://pib.govin/PressReleaseIframePage.aspx?PRID=2T23537 )
Company Overview
PNC Infratech Limited (also referred to as ‘PNC Infratech or ‘The Company) has played a pivotal role in shaping Indias infrastructure space, with a strong emphasis on roads and highways. Incorporated in 1999, the Company offers comprehensive infrastructure implementation solutions, including Engineering, Procurement, and Construction (EPC) services under both item-rate and fixed-sum turnkey contracts.
The Company also executes projects through various public-private partnership (PPP) models such as Design-Build-Finance-Operate-Transfer (DBFOT), Hybrid Annuity and OMT. PNC Infratech is among the few infrastructure players in India with proven capabilities in construction, development, operation and long-term asset management, under one roof.
Leading Integrated Infrastructure Company with Comprehensive In-House Capabilities
PNC Infratech has a strong track record in executing diverse projects such as bridges, flyovers, airport pavements, roads, highways, expressways, industrial area development, and rural drinking water supply. The Company possesses the technical and financial capability to independently undertake large-scale projects with a value of up to Rs. 10,000 Cr. In the last five years alone, the Company has invested over Rs. 10,000 Cr in the highway sector through a mix of equity and debt, strengthening its commitment to infrastructure development.
With a healthy gross block exceeding Rs. 1,300 Cr and an extensive fleet of construction equipment, PNC Infratech can deliver projects aggregating up to Rs. 13,000 Cr annually. This showcases its exceptional operational leverage. Additionally, to optimize input costs, the Company also owns and leases quarries for sourcing stone aggregates.
In parallel, the Company has focused on creating a robust workforce over the years to reinforce its project execution capabilities. It has over 7,000 professionals across disciplines like design, planning, engineering, construction, traffic and financial viability analysis, project development, operations, and management.
These core teams are further supported by efficient finance, procurement, HR, and administrative functions, enabling PNC Infratech to consistently deliver high-quality infrastructure projects.
Pan-Sector Footprint with Strategic Diversification
The Company, with over two and half decades of technical and operational expertise, is well-positioned to sustain its growth trajectory through robust risk mitigation and working capital optimization strategies. Its strategic roadmap includes a measured expansion into high- potential sectors such as urban development, railways, renewable energy and water management, aligning with national infrastructure priorities.
To maintain growth momentum while reducing dependency on any single segment, the Company is actively diversifying its project portfolio. Roads and highways remain its core focus. However, increasing participation in government-led initiatives like the Jal Jeevan Mission is expected to significantly enhance its order book in the water sector in the near to medium term. Simultaneously, efforts are underway to strengthen its footprint in the railway, metro rail, renewable energy and other infrastructure spaces.
Currently, the Companys operations span a broad spectrum of infrastructure development. These include ‘Engineering, Procurement, and Construction (EPC), ‘Build, Operate, Transfer (BOT) both Toll & Annity and ‘Hybrid Annuity Mode (HAM) road projects, irrigation, water supply systems and area development projects.
State-Level Presence through Cluster-Led Approach
Headquartered in North India, the Company has built an exceptional execution record, securing a significant order book across the strategically important markets. It has also expanded operations across multiple regions and states, including Delhi-NCR, Uttarakhand, Karnataka, Maharashtra, Uttar Pradesh, Andhra Pradesh, Bihar,
Jharkhand, Rajasthan, Haryana, Punjab, Madhya Pradesh, and Gujarat. This expansion demonstrates its pan-Indian capabilities while preserving strong regional expertise.
Over the years, the Company has completed over 90 major infrastructure projects across 13 states. These comprise 66 road/highway/expressway projects, 21 airfield pavement works, 1 railway track construction, 2 power transmission projects, 1 industrial area redevelopment, and 1 water supply project. Presently, PNC Infratech is implementing 16 fund-based highway projects under BOT-Toll, BOT-Annuity, and HAM models. Of these, 13 are HAM projects with an aggregate bid project cost of over Rs. 16,500 Cr. As on date, 3 HAM projects are operational,
6 projects are under construction, 3 projects have achieved financial closure, and for 1 project, financial closure documents are submitted. In addition to the above-mentioned fund based (PPP) projects portfolio, the Company is presently executing 14 exclusive EPC projects of aggregate contract value over Rs. 14,500 Cr comprising
7 rural drinking water supply projects, 5 highway/ expressway projects, 1 railway project and 1 irrigation project.
Uttar Pradesh is emerging as one of Indias fastest- growing states in both urban and rural infrastructure.
PNC Infratech is well-positioned to benefit from the states accelerated development agenda. Drawing on its long-standing presence and deep understanding of the regional ecosystem, the Company applies a cluster- based project execution model. This approach ensures efficient resource allocation, leading to better operational synergies and improved margins. It also enables PNC Infratech to remain cost-competitive while maintaining profitability. Furthermore, as a dominant player in recent project awards in North India, especially in Uttar Pradesh, the Company is poised for continued growth and value creation in the coming years.
Proven Pre-Qualification Strength Backed by Long-Standing Government Client Relationships
With over two and half decades of operational experience, PNC Infratech has built proven expertise through its extensive collaboration with both state and central government agencies. It has developed enduring partnerships with key infrastructure authorities, including the NHAI, MoRTH, Airports Authority of India, Military Engineering Services, various State Roads Development Authorities, and Public Works Departments.
The Company strategically executed multiple projects across diverse geographical locations during FY 2024-25, demonstrating its ability to effectively mitigate risks and optimize working capital management. PNC Infratechs execution capabilities and consistent performance have further established its credentials to qualify for large- scale infrastructure projects.
Notably, the Company possesses the financial and technical capacity to independently bid for projects valued up to 10,000 Cr. This reflects its strong position in the infrastructure development sector and its ability to undertake high value projects without requiring consortium partnerships. Altogether, its extensive experience, strong government relationships, and proven bidding independence position PNC Infratech as a formidable force in Indias infrastructure landscape.
Focused Financial Strategy Backed by a Growing Order Book
Through its continued focus on cost optimization, a diversified value proposition, and a strengthened balance sheet, PNC Infratech is prepared to capitalize on multiple growth drivers. Maintaining a strong financial position, the Company reported a standalone debt-to-equity ratio of 0.07x in FY 2024-25, with the consolidated ratio at 1.56x. Presently, after divestment of its 100% equity in 10 HAM projects (all are highway projects), the Companys consolidated debt-to-equity ratio providing ample scope for pitching new fund-based projects on different PPP formats.
PNC Infratechs further equity infusion in the ongoing HAM projects will continue to rely on internal cash generation. This approach is expected to support sustainable growth while preserving balance sheet strength.
The Company secured fresh orders worth Rs. 6,670 Cr during FY 2024-25. This resulted in a robust order book and revenue visibility. The unexecuted order book of the Company as of March 31, 2025, stood at Rs. 17,700 Cr.
Asset Monetization
In January 2024, the Company, along with its wholly owned subsidiary, PNC Infra Holdings Limited, entered into a Master Securities Purchase Agreement (SPA) with Highways Infrastructure Trust (HIT). An established InvIT, HIT is sponsored by entities affiliated with KKR & Co. Inc., of USA. Under the agreement, the Company agreed to divest 12 road assets, comprising 11 National Highway HAM projects and 1 State Highway BOT-Toll project (Transaction).
On May 22, 2025, Tranche I of the Transaction comprising 10 HAM assets concluded at an Enterprise Value of Rs. 7,443.6 Cr, including Rs. 1,827.6 Cr received by the Company towards the ‘Equity Value, after adjustment of value towards certain items of works descoped in the above projects. The Company, through its aforesaid SPVs, also received/receiving an amount of Rs. 624.0 Cr in relation to certain additional items of work executed under the Change of Scope (COS) provisions of the agreements.
There are certain other receivables of approximately Rs. 200.0 Cr, which the Company would be receiving going forward as stipulated in the definitive agreements, upon realization by SPVs. Both the above amounts are in addition to the Enterprise and Equity Values mentioned above. The equity invested in the 10 HAM assets (Tranche I) by the Company was Rs. 1,370.6 Cr. As the Transaction concluded, all the 10 assets/projects/SPVs have duly been handed over to HIT to take them forward in terms of the respective concession agreements.
The remaining two SPVs namely PNC Bareilly Nainital Highways Private Limited (BOT Toll Project) and PNC Challakere (Karnataka) Highways Private Limited (HAM Project), are expected to be divested in H1 FY 2025-26, upon fulfillment of the remaining Conditions Precedent.
This divestment is aligned with the Companys strategic objective of recycling the capital invested in operating road assets and reinvesting the capital in fund-based opportunities in the infrastructure space.
Financial Overview
The Company is among the few in Indias infrastructure and construction sector to post consistent operating and free cash flow (OCF/FCF) after interest expense over the period from FY 2013-14 to FY 2024-25. With very moderate net interest expenses as a percentage of EBITDA, the Company maintains significant distributable cash flows. Moreover, the Company has steered clear of unrelated diversification and avoided aggressive growth campaigns.
Standalone
On a standalone basis, revenue for FY 2024-25 stood at Rs. 5,513 Cr, EBITDA at Rs. 1,049 Cr, and Profit After Tax at Rs. 706 Cr. The Companys net worth was Rs. 5,475 Cr as of March 31,2025, with total debt at Rs. 399.8 Cr and a net cash surplus of Rs. 437 Cr. The ratio on standalone basis as on March 31,2025, was only 0.07.
The current ratio, indicating the Companys ability to pay short-term obligations, has remained strong at 2.36x for FY 2024-25, compared to 2.21x for FY 2023-24. During the year under review, CARE Ratings Limited reaffirmed the Companys ratings at AA+ with a stable outlook for long-term facilities and A1 + for short-term bank facilities.
Consolidated
On a consolidated basis, the revenue for FY 2024-25 stood at Rs. 6,769 Cr. The Roads EPC segment contributed approximately 72% of total revenue, the Water Segment 12%, and Toll/Annuity Income 16%. Revenue from the Water segment for FY 2024-25 stood at Rs. 822 Cr.
Consolidated EBITDA for FY 2024-25 was Rs. 2,066 Cr, while Consolidated Profit After Tax was Rs. 815 Cr. As of March 31,2025, consolidated net worth stood at Rs. 5,989 Cr, with total debt at Rs. 9,345 Cr, resulting in a consolidated net debt-to-equity ratio of 1.56 times.
Risks and Mitigation Framework
Risks |
Description |
Mitigation Measures |
Competition Risk |
PNC Infratech faces competition from local, national, and international players across segments and geographies. Competitive intensity remained higher in FY 2024-25 due to multiple government initiatives, including relaxed bidding criteria. This led to lower contract prices, thus reducing the operating margins across the industry. |
With over 30 years of experience in construction and engineering, the Company boasts a robust track record. Its focus lies on larger projects with a ticket size of over Rs. 4,000 Cr, where competition is relatively low. Through its strong balance sheet and domain expertise, the Company offers comprehensive services encompassing design, engineering, planning, management, and project execution. This enables the completion of complex projects in a timely, and cost-effective manner. The Company remains committed to completing projects ahead of schedule to earn early completion bonuses whenever feasible. |
Geographical Concentration Risk |
The Company is operating predominantly in North India, with the highest exposure in Uttar Pradesh. It faces risks from regulatory and political changes. |
To address this concentration risk, the Company is actively diversifying its portfolio both geographically and sectorally. It is strategically expanding into new states and entering emerging segments like water supply and irrigation. Backed by a strong history of successful collaborations with various state governments, the Company is well-positioned to establish its presence in new regions. Additionally, it uses its extensive fleet of construction equipment and machinery to efficiently mobilize resources across projects located in proximity, thereby improving operational agility and execution efficiency. As part of geographical diversification strategy and to mitigate the concentration risks, the Company forayed into the state of Maharashtra in a big way, by securing 3 new projects of more than Rs. 6,000 Cr aggregate contract value in FY 2024-25. |
Inflation Risk |
The broader economy and infrastructure industry have experienced persistent inflationary pressures, particularly due to rising input costs. Key materials such as structural steel, cement, bitumen, concrete, metal plates, cables, and other electrical and mechanical components witness price increases. These trends can potentially impact the Companys cost structure and profitability. |
PNC Infratech adopts a strategic and proactive approach to effectively manage input cost volatility, a key factor in ensuring the viable execution of infrastructure projects. It maintains control over major cost elements through owned assets and long-term procurement arrangements. This includes operating its own stone aggregate mines and crushers, which are significant contributors to overall costs. In addition, the Company secures key materials like cement and steel from established manufacturers with whom it has long-standing relationships. This ensures consistent quality, timely delivery, and competitive pricing. Furthermore, to mitigate the impact of input cost fluctuations, the Company prefers bids with cost-escalation clauses. These provisions allow for price adjustments based on inflation in input prices, thereby helping to safeguard profitability during the execution lifecycle of projects. |
Cyber Risk |
With the growing digitalization of operations, the risk of cyber threats, including ransomware, phishing, and other malicious attacks, has significantly increased across industries. As IT systems form a key pillar of project execution, operations and enable the adoption of innovative, technology-driven solutions, any disruption can impact operational efficiency. |
Although the Company has not experienced any major cyber incidents to date, it maintains a proactive and vigilant approach to cybersecurity. Comprehensive measures and systems have been implemented to strengthen its cyber defenses. The Company also continuously monitors and assesses emerging threats to ensure robust protection of its digital infrastructure. |
Liquidity and Cash Flow- Related Risk |
Liquidity and cash flow risk may prevent the Company from meeting its short and long-term obligations. |
The Company consistently upholds a robust financial standing, ensuring sufficient reserves to meet payment and debt obligations. It adheres to disciplined budgeting practices, meticulously monitoring project costs and debt requirements. Additionally, it monitors both micro and macroeconomic developments, enabling prompt and informed financial decisions. |
Human Resources Management
Human resources are among the Companys most valued assets. Therefore, it continuously focuses on skill development and enhancement to ensure its team remains future ready. Its senior management is largely homegrown, with deep grassroots knowledge of engineering, procurement, project management, and overall implementation. To ensure maximum accountability, the Company provides its personnel with moral support and financial incentives. As of March 31, 2025, it employed over 7,000 people on regular rolls.
Internal Control Systems
The Company has adequate internal control systems, aligned with its size and business nature. These systems ensure cost-effective asset acquisition, safeguard assets from unauthorized use or loss, and guarantee proper authorization, recording, and reporting of all transactions.
The Companys internal audit department supplements these systems with well-documented policies, guidelines, procedures, and reviews. Internal auditors conduct audits of various departments in accordance with the yearly audit plan, and report to the Management and the Boards Audit Committee regularly. PNC Infratech also takes into account the views of statutory auditors and ISO auditors to assess the adequacy and effectiveness of the internal control system and quality measures.
Project sites are secured with advanced closed-circuit television surveillance and the SAP ERP system. The Management closely monitors these systems and related metrics to ensure ongoing improvement.
Corruption Prevention System
In order to make the existing policy more robust and comprehensive, a new policy, incorporating improvements and strengthening existing provisions, was developed in consultation with a reputed law firm to ensure that the business affairs and operations are conducted in an ethical manner and to have a system of honesty and accountability in the Company, the new augmented policy namely ‘Corruption Prevention System encompassing all the Subsidiaries was adopted by the Company on February 10, 2025, which came into effect immediately from that date.
The above Policy sets out the responsibility of the Companys as well as its Subsidiaries stakeholders to comply with laws against corruption and provides guidance on how to deal with such issues. The Policy consists of a series of procedures to give effect to the objective of the Company including its Subsidiaries, which clearly sets out the Companys ‘Zero Tolerance approach towards Corruption. This Policy is intended to provide guidance to the employees, Board of Directors and Senior Management to manage the affairs of the Company and its Subsidiaries in an ethical manner. The purpose of the Policy is to recognize and deal with ethical issues and to provide mechanisms to report unethical conduct and to develop a culture of honesty and accountability.
Cautionary Statement
This Annual Report contains certain ‘forward-looking statements and information to present the Companys investors its growth potential. This report, as well as other written and oral comments the Company makes on a regular basis, contain ‘forward-looking statements that outline expected outcomes based on managements plans and assumptions. ‘Forwardlooking statements are predictions of future events based on certain assumptions. Risks, uncertainties, and even assumptions all play a role in achieving such findings. The quality, reliability, and completeness of market data and information acquired from numerous published and unpublished reports and sources cannot be guaranteed. The Company does not promise to make any announcements or amend any development or ‘forwardlooking statements made by or on behalf of it if any of the economic scenarios, industry developments, or ‘forwardlooking statements become materially inaccurate in the future.
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