PSP Projects Ltd Management Discussions

Management discussion and analysis

Overview

Global economic growth declined marginally from 3.3% in 2023 to an estimated 3.2% in 2024. This was marked by a slowdown in global manufacturing, particularly in Europe and parts of Asia coupled with supply chain disruption and weak consumer sentiment. In contrast, the services sector performed more creditably.

The growth in advanced economies remained steady at 1.7% from 2023 to 2024 as the emerging cum developing economies witnessed a growth decline at 4.2% in 2024 (4.4% in 2023).

On the positive side, global inflation was expected to decline from 6.1% in 2023 to 4.5% in 2024 (projected at 3.5% and 3.2% in 2025 and 2026 respectively). This decline was attributed to the declining impact of erstwhile economic shocks, and labour supply improvements.

The monetary policies announced by governments the world over helped keep inflation in check as well.

The end of the calendar year was marked by the return of Donald Trump as the new US President. The new US government threatened to impose tariffs on countries exporting to the US unless those countries lowered tariffs for the US to export to their countries. This enhanced global trade and markets uncertainty and emerged as the largest singular uncertainty in 2025.

Regional growth (%)	2024	2023
World output	3.2	3.3
Advanced economies	1.7	1.7
Emerging and developing economies	4.2	4.4

(Source: IMF, KPMG, Press Information Bureau, BBC, India Today)

Performance of the major economies, 2024

United States:	China: GDP growth	United Kingdom:	Japan: GDP growth	Germany: GDP
Reported GDP growth of 2.8% in 2024 compared to 2.9% in 2023.	was 5.0% in 2024 compared to 5.2% in 2023.	GDP growth was 0.8% in 2024 compared to 0.4% in 2023.	was 0.1% in 2024 compared with 1.9% in 2023.	contracted by 0.2% in 2024 compared to a 0.3% decline in 2023.

(Source: CNBC, China Briefing, ons.gov.uk, Trading Economics, Reuters)

Outlook

The global economy has entered a period of uncertainty following the imposition of tariffs of products imported into the USA and some countries announcing reciprocal tariffs on US exports to their countries. This is likely to stagger global economic growth, the full outcome of which cannot be currently estimated. This risk is supplemented by risks related to conflicts, geopolitical tensions, trade restrictions and climate risks. In view of this, World Bank projected global economic growth at 2.7% for 2025 and 2026, factoring the various economic uncertainties. (Source: IMF, United Nations)

Indian economic review

Overview

The Indian economy grew at 6.5% in FY 2024-25, compared to a revised 9.2% in FY 2023-24. This represented a four- year low due to a moderate slowdown within the Indian economy (marked by slower manufacturing growth and a decline in net investments). Despite the slowdown, India retained its position as the worlds fifth-largest economy.

Indias nominal GDP (at current prices) was Rs.330.68 Trn in FY 2024-25 (H301.23 Trn in FY 2023-24). The nominal GDP per capita increased from Rs.2,15,936 in FY 2023-24 to Rs.2,35,108 in FY 2024-25, reflecting the impact of an economic expansion.

The Indian rupee weakened 2.12% against the US dollar in FY 2024-25, closing at Rs.85.47 on the last trading day of FY 2024-25. In March 2025, the rupee recorded the highest monthly appreciation since November 2018, rising 2.39% (arising out a weakening US dollar).

Inflationary pressures eased, with CPI inflation averaging 4.63% in FY 2024-25, driven by moderating food inflation and stable global commodity prices. Retail inflation at 4.6% in FY 2024-25, was the lowest since the pandemic, catalysing savings creation.

Indias foreign exchange reserves stood at a high of USD 676 Bn as of April 4, 2025. This was the fourth consecutive year when rating upgrades outpaced downgrades on account of strong domestic growth, rural consumption, increased infrastructure investments and low corporate leverage (annualised rating upgrade rate 14.5% exceeded the decade-long average of 11%; downgrade rate was 5.3%, lower than the 10-year average of 6.5%).

Gross foreign direct investment (FDI) into India rose 13.6% to USD 81 Bn during the last financial year, the fastest pace of expansion since 2019-20. The increase in the year was despite a contraction during the fourth quarter of 2024-25 when inflows on a gross basis declined 6% to USD 17.9 Bn due to the uncertainty caused by Donald Trumps election and his assertions around getting investments back into the US.

Growth of the Indian economy

	FY22	FY23	FY24	FY25
Real GDP growth (%)	8.7	7.2	9.2	6.5

(Source: MoSPI, Financial Express)

Growth of the Indian economy quarter by quarter, FY 2024-25

	Q1FY25	Q2 FY25	Q3 FY25	Q4 FY25
Real GDP growth (%)	6.5	5.6	6.2	7.4

(Source: The Hindu, National Statistics Office)

The banking sector continued its improvement, with gross non-performing assets (NPA) for scheduled commercial banks (SCBs) declining to 2.6% as of September 2024, down from 2.7% in March 2024. The capital-to-risk-weighted assets ratio for SCBs stood at 16.7% as of September 2024, reflecting a strong capital position.

Indias exports of goods and services reached USD 824.9 Bn in FY 2024-25, up from USD 778 Bn in the previous fiscal year. The Red Sea crisis impacted shipping costs, affecting price-sensitive exports. Merchandise exports grew 6% YoY, reaching USD 374.1 Bn.

Indias net GST collections increased 8.6%, totalling Rs.19.56 Lakh Crore in FY 2024-25. Gross GST collections in FY 2024-25 stood at Rs.22.08 Lakh Crore, a 9.4% increase YoY.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in FY 2024-25. The industrial sector grew by 6.5%, supported by growth in construction activities, electricity, gas, water supply and other utility services.

Indias services sector grew at 8.9% in FY 2024-25 (9.0% in FY 2023-24), driven by public administration, defence and other services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in FY 2024-25, compared to 8.6% in FY 2023-24. Meanwhile, the construction sector expanded at 9.4% in FY 2024-25, slowing from 10.4% in the previous year.

Manufacturing activity was subdued in FY 2024-25, with growth at 4.5%, which was lower than 12.3% in FY 2023-24. Moreover, due to lower public spending in the early part of the year, government final consumption expenditure (GFCE) is anticipated to have slowed to 3.8% in FY 2024-25, compared to 8.1% in FY 2023-24.

The agriculture sector grew at 4.6% in 2024-25 (1.4% in 2023-24). Trade, hotel, transport, communication and services related to broadcasting segment were estimated to grow at 6.4% in 2024- 25 (6.3% in 2023-24).

From a demand perspective, the private final consumption expenditure (PFCE) exhibited robust growth, achieving 7.2% in FY 2024-25, surpassing the previous financial years rate of 5.6%.

The Nifty 50 and SENSEX recorded their weakest annual performances in FY 2024-25 in two years, rising 5.3% and 7.5% during the year under review respectively. Gold rose 37.7% to a peak of USD 3,070 per ounce, the highest increase since FY 2007-08, indicating global uncertainties.

Total assets managed by the mutual fund (MF) industry jumped 23% or Rs.12.3 Lakh Crore in fiscal 2025 to settle at Rs.65.7 Lakh Crore. At close of FY 2024-25, the total number of folios had jumped to nearly 23.5 Crore, an all-time peak. During last fiscal, average monthly systematic investment plan (SIP) contribution jumped 45% to Rs.24,113 Crore.

Foreign portfolio investments (FPIs) in India experienced high volatility throughout 2024, with total inflows into capital markets reaching approximately USD 20 Bn by year-end. However, there was significant selling pressure in the last quarter, influenced by new tariffs announced by the new US government on most countries (including India).

Outlook

India is expected to remain the fastest- growing major economy. Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tariff levies on India and other countries. The following are some key growth catalysts for India in FY26.

Tariff-based competitiveness: India identified at least 10 sectors such as apparel and clothing accessories, chemicals, plastics and rubber where the US high tariffs give New Delhi a competitive advantage in the American market over other suppliers. While India faced a 10% tariff after the US suspended the 26% additional duties for 90 days, the levy remained at 145% on China, the biggest exporter to the US. Chinas share of apparel imports into the US was 25%, compared with Indias 3.8%, a large opportunity to address differential (Source: Niti Aayog).

Union Budget FY 2024-25:

The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasising agriculture, MSMEs, investment, and exports as the four primary growth engines. With a fiscal deficit target of 4.4% of GDP, the government reinforced fiscal prudence while allocating Rs.11.21 Lakh Crore for capital expenditure (3.1% of GDP) to drive infrastructure development. The February 2025 Budget marked a shift in approach, with the government proposing substantial personal tax cuts. Effective April 1, 2025, individuals earning up to Rs.12 Lakh annually will be fully exempt from income tax. Economists estimate that the resulting Rs.1 Lakh Crore in tax savings could boost consumption by Rs.3-3.5 Lakh Crore, potentially increasing the nominal private final consumption Expenditure (PFCE) by 1.5-2% of its current Rs.200 Lakh Crore.

Free trade agreement: In a post Balance Sheet development, India and the United Kingdom announced a free trade agreement to boost strategic and economic ties. This could lead to a significant increase in the export competitiveness of Indian shipments in the UK across the textiles, toys, leather, marine products, footwear, and gems & jewellery sectors. About 99% of Indian exports to UK will enjoy zero-duty access tariff cuts; India will cut tariffs on 90% of tariff lines and 85% could become fully duty-free within 10 years.

Pay Commission impact:

The 8^th Pay Commissions awards could lead to a significant salary revision for nearly ten million central government employees. Historically, Pay Commissions have granted substantial pay hikes along with generous arrears. For instance, the 7^th Pay Commission more than tripled its monthly salaries, raising the range from Rs.7,000 to Rs.90,000 to Rs.18,000 to Rs.12.5 Lakh, triggering a widespread ripple effect.

Monsoons:

The India Meteorological Department predicted an above normal monsoon in 2025. This augurs well for the countrys farm sector and a moderated food inflation outlook.

Easing inflation: Indias consumer price index-based retail inflation in March 2025 eased to 3.34%, the lowest since August 2019, raising hopes of further repo rate cuts by the Reserve Bank of India.

Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of FY 2025-26. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26.

Lifting credit restrictions:

In November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to 9-13% between September 2023 and 2024. However, under its new leadership, the RBI has prioritised restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks, and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Construction is the process of developing, modifying, or dismantling buildings and structures based on a well-defined design and blueprint. It encompasses various tasks that demand meticulous planning, coordination, and execution to ensure the safety and structural soundness of the project. The construction market size has grown strongly in recent years. It will grow from USD 16.15 Trn in 2024 to USD 17.04 Trn in 2025 at a compound annual growth rate (CAGR) of 5.5%. This growth has been primarily driven by infrastructure development, increasing renovation activities, a growing elderly population, and the rise of domestic manufacturing.

Looking ahead, the market is expected to maintain strong momentum, reaching by USD 21.26 Trn in 2029 at a compound annual growth rate (CAGR) of 5.7%. The key drivers of this expansion include rapid urbanisation, population growth, government initiatives, industrialisation, and the development of smart cities. Emerging trends in the sector are likely to focus on automated construction tools, high-performance equipment, digital platform integration, AI and machine learning applications, strategic partnerships and innovation networks, fully electric construction machinery, advancements in construction technology and suburban expansion and infrastructure development.

Leading construction companies are adopting automation and advanced technologies to enhance project efficiency, reduce costs and enhance competitiveness edge. The integration of automated construction service centres which centralise and streamline project scheduling, resource allocation and communication is transforming the industry, ensuring greater precision, faster execution and optimised resource management.

Asia-Pacific stood as the largest region in the construction market. The continent was followed by North America, which was the second-largest region in the construction market. As of 2025, global construction spending is projected to reach approximately USD 15.7 Trn, reflecting an 8.1% annual increase from the previous year.

(Source: The business research company, Stonenews, Research and Markets, S&P Global)

Indian construction industry overview

Indias construction industry is projected to grow by 11.2%, reaching Rs.25,310 Bn by 2025. This growth momentum is expected to persist, with the sector projected to expand at a CAGR of 8.8% between 2025 and 2029, reaching an estimated value of Rs.39.10 Trn by 2029.

In real terms, the Indian construction industry is expected to grow by 6.2% in 2025, driven by rising investments across commercial, industrial, and transport infrastructure segments. This growth reflects continued momentum in nationwide development initiatives and capital spending.

Indias construction sector has witnessed substantial growth, boosted by a booming housing market and aggressive government infrastructure initiatives. This trend is set to persist, with the Ministry of Housing and Urban Affairs projecting India to become the third-largest construction market globally by 2025.

In the Union Budget for FY 2025-26, Finance Minister allocated USD 129.5 Bn for infrastructure development, maintaining the capital expenditure at 3.4% of Indias GDP This allocation underscores the governments continued emphasis on infrastructure-led growth, aligning with the Viksit Bharat 2047 vision.

The government has announced multiple infrastructure initiatives such across Jammu and Kashmir, Tamil Nadu and Uttar Pradesh, reinforcing its commitment towards sustained infrastructure growth across India.

(Source: Research and Markets, Global data, Constr of acilitator.com, Surface reporter, Business Wire)

Residential construction

The residential construction industry in India is evolving due to macroeconomic factors, government policies, and innovative trends. The Indian residential construction market is projected to grow from USD 204.05 Bn in 2025 to USD 293.08 Bn by 2030, reflecting a CAGR of 751% during the forecasted period.

The raw material costs of construction materials have been on the rise in India, since the COVID-19 pandemic. A reason behind this increase in the cost of raw materials is the shortage of raw material supply due to the disruptive supply chain. Along with these, there has been the introduction of several taxes by the state governments on these materials contributing to the rising costs. The scarcity of building materials raises the cost of overall construction, which is anticipated to hinder the growth of the Indian residential construction market.

Cement production in India is expected to grow by approximately 12% annually, driven by the demand for rural housing and government-led infrastructure initiatives such as PM Gatishakti. The industry plans to expand its capacity by around 80 Mn Tons by 2025.

Rapid urbanisation, along with a rising population, is significantly driving the demand for housing across India. This growth is particularly pronounced among young working professionals and nuclear families, who are increasingly seeking residential options in urban centers. The shifting demographic trends and lifestyle preferences are contributing to a steady expansion of the residential real estate market in metropolitan and tier-1 cities.

Under the Pradhan Mantri Awas Yojana (PMAY), nearly 47% of the 9.7 Lakh houses were constructed for urban poor and slum dwellers remain unoccupied, primarily due to the absence of essential infrastructure and amenities.

As of March 4, 2025, the Smart Cities Mission dashboard reported that 7,504 projects accounting for 93% of the total have been completed, with investments totaling Rs.1,50,306 Crore. An additional 559 projects, worth Rs.14,239 Crore, remain in progress across the 100 designated smart cities. Despite this overall progress, only 18 cities have successfully completed all their smart city projects by March 2025.

(Sources: News 18, PRS India, Mordor Intelligence,

ETV Bharat, Marketreportanalytics, PIB, Downtoearth. org)

Commercial construction

The Indian commercial construction market is projected to grow from USD 694.08 Bn in 2025 to USD 932.35 Bn by 2030, registering a CAGR of 6.08% during the forecast period 2025-2030.

Commercial construction forms a vital segment of Indias broader construction industry, which is projected to grow by 6.2% in real terms in 2025. This growth is being driven by substantial investments across key areas, including commercial, industrial, and transport infrastructure projects. The sectors contribution is pivotal in shaping Indias urban landscape and supporting the countrys economic development.

Efforts to streamline regulations, increase institutional participation and amend Foreign Direct Investment (FDI) policies are expected to drive fund flows into infrastructure, with commercial construction being a key focus area. This aligns with the Government of Indias vision for becoming a USD 5 Trn economy supported by investment initiatives from the Finance Ministry. These initiatives include Infrastructure Debt Funds (IDFs), Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), Public-Private Partnerships (PPPs) with viability gap funding, and the National Investment and Infrastructure Fund (NIIF) all critical measures aimed at stabilising industry output post-COVID-19.

The Indian e-commerce logistics market is anticipated to expand from USD 4.42 Bn in 2025 to USD 7.85 Bn by 2030, reflecting a CAGR of 12.18% over the forecast period.

The rapid evolution of Indias e-commerce logistics sector is fuelled by the countrys expanding digital ecosystem and evolving consumer behaviour. With nearly 700 Mn internet users including 350 Mn active digital payment users the market showcases significant growth potential. The transformation of the retail sector is particularly striking, with online penetration expected to rise to 10.7% by 2024 from 4.7% in 2019. The Federation of Indian Chambers of Commerce & Industry (FICCI) projects Indias retail market to reach USD 1.6 Trn by 2026, underscoring the sectors substantial contribution to economic expansion.

Despite the pandemic-induced setback, Indias retail market has recorded a strong recovery, with 60 new malls spanning over 2 Mn sq. meters slated for completion by 2025. Rising incomes and urbanisation continue to position retail as one of Indias fastest-growing sectors, expected to generate up to 25 Mn new jobs by 2030, making it the largest employment generator in the country As Indias social and economic transformation progresses, the retail sector is poised for decades of sustained growth, with the market value projected to reach USD 2 Trn by 2032.

The worlds largest population has become a significant force that global brands can no longer overlook. With the influx of international brands and investments, alongside the continued growth of domestic Indian brands, consumers now enjoy a wider array of choices in both products and shopping channels. A balance is emerging across various shopping formats, including established department stores, hypermarkets and specialty stores. Organised retail chains are now well- established in tier 2 and tier 3 cities, further enhancing Indias national consumer power.

(Sources: Mordor Intelligence, Global data, Asian Insiders)

Rising urbanisation: Rapid urbanisation is driving a growing need for sustainable and modern infrastructure in cities. This includes the development of smart cities, enhanced urban transport systems such as metro rail networks, and green infrastructure initiatives. Indias urban population is projected to reach 600 Mn by 2036. In response to these growing demands, the 2025-26 Union Budget has allocated Rs.96,777 Crore for urban development, reflecting a 17% increase over the previous year. Key focus areas include transport, housing, sanitation, and smart city initiatives.

Connectivity projects: The 701-km Samruddhi Mahamarg Expressway, connecting Nagpur to Mumbai, has reduced travel time from 18 hours to just 8 hours. Designed with a focus on sustainability, the expressway incorporates eco-friendly measures such as the plantation of 3.3 Mn native trees and the integration of solar power projects. It enhances logistical connectivity by linking to key maritime hubs, including the upcoming Vadhvan Port.

Renewable energy expansion: Indias drive towards a sustainable future has intensified investments in solar, wind, and hydropower projects, unlocking significant avenues for growth and investment. As of March 31, 2025, Indias installed renewable energy capacity reached 214 GW. To achieve the ambitious target of 500 GW by 2030, the country must double its annual capacity additions to around 50 GW per year between 2025 and 2030.

Digital infrastructure growth:

Strategic investments in fibre optics, data centres, and telecommunications are catalysing Indias transition towards a digital economy. The expansion of digital infrastructure not only drives industrial growth and employment but also strengthens allied sectors such as real estate and logistics. High-quality digital infrastructure helps lower business costs, improve productivity, and enhance Indias global competitiveness. Reflecting this progress, Indias broadband subscriber base stood at 944.12 Mn in March 2025, showing a slight uptick from 944.04 Mn in February However, the figure dipped marginally to 943.09 Mn in April, marking a 0.11% decline. Despite this minor fluctuation, the broader trend highlights the nations sustained momentum in digital adoption

(Sources: Orfoline.org, Times of India, World Bank, Medianama.com, PIB)

Indias infrastructure sector is poised for significant expansion, with planned investments totalling USD 1.4 Trn by 2025. The governments National Infrastructure Pipeline (NIP) aims to direct substantial capital into critical sectors, including energy, transportation and urban development.

As part of the PM Gati Shakti National Master Plan, eight key infrastructure projects, seven under the Ministry of Railways and one from the Ministry of Road Transport and Highways (MoRTH) have been prioritised to enhance efficiency and connectivity in challenging terrains. The Union Budget for 2025-26. has earmarked over Rs.11.21 Lakh Crore (USD 132.62 Bn) for infrastructure development under the PM GatiShakti initiative.

Union Minister Nitin Gadkari announced the allocation of Rs.1,255.59 Crore (USD 150.01 Mn) for constructing a 28.9 km, four-lane access-controlled Northern Patiala Bypass.

In October 2024, the Ministry approved 50 National Highway projects spanning 1,026 km in Manipur, with 44 projects (902 km) located in hilly regions. Of these, 8 projects (125 km) have been completed, while 36 ongoing projects (777 km) are being developed with an investment of Rs.12,000 Crore (USD 1.43 Bn).

For FY 2024-25, the government allocated a capital expenditure of H2.65 Lakh Crore for the Railways sector, reinforcing its commitment to infrastructure development and economic growth.

(Source: IBEF, The Hindu)

Rising housing demand: India is experiencing a surge in housing demand, fuelled by rapid urbanisation, the rise of nuclear families, growing aspirations and an increasing number of first-time homebuyers. This demand is expected to strengthen further, driven by a robust economic recovery, low mortgage rates, stable home prices and rising income levels.

Government support: The government is playing a pivotal role in boosting the housing sector through various policy initiatives, such as the Pradhan Mantri Awas Yojana (PMAY) and the Housing for All scheme. These measures are significantly enhancing housing accessibility and driving sectoral growth across the country.

Regulatory challenges: Evolving regulations and policy changes can have a profound impact on the real estate sector. Delays in site acquisitions, land use approvals, project launches and construction permits can pose significant challenges, affecting project timelines and profitability.

External disruptions: Natural disasters and unforeseen events, such as the COVID-19, can disrupt real estate operations, impacting construction activities, market demand, and overall industry performance.

PSP Projects Limited is a pan-India construction company providing a comprehensive suite of construction and allied services to both public and private sector clients. Established in August 2008, the company undertakes end-to- end project execution, covering the entire construction lifecycle. Over the years, PSP has successfully delivered numerous projects across various sectors. As of March 31, 2025, its order book stands at Rs.7,266.35 Crore. Originally founded in Gujarat, the company has expanded its footprint to key states including Maharashtra, Karnataka, Uttar Pradesh, Rajasthan, and Delhi.

Proven track record in project completion: The company has a strong reputation for delivering projects on time, driven by efficient project management, active promoter involvement, and a competitive edge.

Project completed in a year

FY19	21
FY20	23
FY21	23
FY22	17
FY23	22
FY24	17
FY25	13

Strong order book:

The companys order book has grown significantly to Rs. 7,266 Crore in FY 2024-25, up from Rs.2,978 Crore in FY 2018-19, reflecting its strong project pipeline and sustained business growth.

FY19	Rs.2,978 Crore
FY20	Rs.3,074 Crore
FY21	Rs.4,121 Crore
FY22	Rs.4,324 Crore
FY23	Rs.5,052 Crore
FY24	Rs.6,049 Crore
FY25	Rs.7,266 Crore

Long-term customer engagement:

Committed to excellence, the Company has built lasting partnerships with clients by consistently providing high-quality products and services. As a result, many prestigious clients have remained with the company for over five years.

One-stop solution: The company offers a full spectrum of construction-related services, covering design, construction, fit-outs and maintenance, ensuring seamless project execution.

Experienced team: With a promoter boasting decades of experience in the construction industry, the company continually innovates its design and construction techniques. A highly skilled executive team, proficient in design, engineering, finance, marketing and human resources, supports this expertise.

Robust financial performance:

The company has experienced substantial operational expansion, driven by robust financial performance. It has consistently delivered strong growth in both revenue and profitability, reflecting its solid business fundamentals.

Industrial: The company specialises in constructing industrial facilities for various manufacturing and processing sectors, including food processing, pharmaceuticals and engineering. With extensive experience across diverse industries, the company has a proven track record of delivering high-quality manufacturing and processing facilities for esteemed clients such as Nestle, MRF, AMNS, IRIPL (The Coca-cola Company), GTPPL (WaghBakri Group), Torrent, Nirma, Intas, Cadila, Claris, KHS and Inductotherm, among others.

Institutional: The company has successfully executed a wide range of institutional projects, including hospitals, healthcare centres, educational institutions, shopping complexes, hotels and corporate offices. Notable projects include Surat Diamond Bourse, Palladium Mall, BSE Brokers Forum at GIFT, Maruti Hospital, Zydus Hospital, GCS Medical College & Hospital, and CIMS Hospital.

Residential: The company also undertakes residential projects for private real estate developers, delivering townships, group housing complexes, and independent homes, contributing to modern and sustainable residential communities.

Government: The company selectively carries out prestigious government projects. Prominent completed projects include the Kashi Vishwanath Corridor in Varanasi, construction and interior work of Swarnim Sankul 01 and 02, renovation projects for the Gujarat Vidhansabha, initiatives related to Ahmedabads Sabarmati Riverfront Development, and the interior of Hotel Leela Gandhinagar.

Government residential:

The company is actively involved in high- profile government residential projects, specialising in the design and construction of affordable high-rise residential buildings and commercial units under various state and central government housing schemes.

Private residential: The company also focuses on private real estate projects, undertaking the construction of townships, group housing, and independent homes, contributing to modern residential developments tailored to evolving market demands.

Standalone financial overview

			(Amount in Lakh)
	FY 2024-25	FY 2023-24	Variation %
Revenue from operations	2,46,828.01	2,46,249.80	0.23%
Other income	1,721.65	2,426.48	(29.05)%
Total income	2,48,549.66	2,48,676.28	(0.05)%
Cost of construction material consumed	77,412.87	93,560.14	(17.26)%
Changes in inventories of work-in-progress	3,198.97	(-)16,917.83	(118.91)%
Construction expenses	1,32,119.79	1,26,677.43	4.30%
Employee benefits expense	11,950.55	12,505.08	(4.43)%
Finance costs	4,422.34	5,082.32	(12.99)%
Depreciation and amortisation expense	7,265.12	6,486.80	12.00%
Other expenses	4,337.80	4,261.14	1.80%
Total expenses	2,40,707.44	2,31,655.08	3.91%
Profit before exceptional item and tax	7,842.22	17,021.20	(53.93)%

Revenue from operations

During the year ended March 31, 2025, on a Standalone basis, your Company registered revenues from operations of Rs.2,46,828.01 Lakh as against Rs.2,46,249.80 Lakh in FY 2023-24, an increase of 0.23%.

Other income

Other income for the year ended March 31, 2025, stood at Rs.1,721.65 Lakh as compared to Rs.2,426.48 Lakh in FY 2023-24, a decrease of 29.05%.

It primarily constitutes interest income on fixed deposits, interest income from Subsidiary & Joint venture, Dividend income, Interest on mobilisation advance and other net gains. The decrease is mainly on account of reduction in interest on mobilisation advances in the current year.

Cost and expenses

Cost of construction material consumed and changes in the inventories of finished goods, work-in-progress.

There was an increase of 5.18% in the cost of construction material consumed and changes in inventories of finished goods put together in accordance with an increase in prices of material or service cost.

Employee benefit expenses

The employee benefit expenses for FY 2024-25 were Rs.11,950.55 Lakh, decrease from Rs.12,505.08 Lakh in FY 2023-24. The decrease was due to decrease in headcount and managerial remuneration during the year.

Other expenses

Other expenses increased by 1.80% in FY 2024-25 compared to the previous financial year. The other expenses mainly comprised rent, rates and taxes, insurance, repairs and maintenance, traveling and conveyance, legal & professional expenses, donation etc.

Depreciation

Depreciation was Rs.7,265.12 Lakh in FY 2024-25 compared to Rs.6,486.80 Lakh in FY 2023-24, an increase of 12.00% from the previous financial year. The increase was mainly due to an increase in the property, plant & equipment during the year.

Finance costs

Significant decrease in finance cost by 12.99% in FY 2024-25 as compared to the previous financial year was due to decrease in borrowings.

EBITDA margins

The EBITDA margin stood at 7.21% in FY 2024-25 compared to 10.62% in FY 2023-24.

Tax expenses

Tax expense in FY 2024-25 was Rs.2,196.60 Lakh compared to Rs.4,631.29 Lakh in FY 2023-24.

Profit after tax

During the year under review, the profit after tax stood at Rs.5,623.24 Lakh.

Net worth

The net worth of the Company increased from Rs.91,462.92 Lakh as on March 31, 2024 to Rs.1,20,873.73 Lakh as on March 31, 2025, an increase of 32.16%. The increase was mainly due to increase in retained earnings followed by incremental profit after tax FY 2024-25 and Qualified Institutions Placement during the year.

Consolidated financial overview

Revenue from operations

Revenue from operations increased to Rs.2,51,212.57 Lakh in FY 2024-25 compared to Rs.2,50,578.85 Lakh in 2023-24.

Cost and expenses

There was an increase of 3.62% in the cost of construction material consumed and changes in inventories of finished goods put together in line with an increase in revenue from operation and prices of material or service cost.

Employee benefit expenses

The employee benefit expenses decreased to Rs.11,950.55 Lakh in FY 2024-25 from Rs.12,505.08 Lakh in FY 2023-24 due to decrease in headcount and managerial remuneration during the year.

Profit after tax

The profit after tax decreased to Rs.5,641.80 Lakh in FY 2024-25 from 12,29727 Lakh in FY 2023-24.

Net worth

The net worth increased from Rs.91,486.99 Lakh as on March 31, 2024, to Rs.1,20,894.03 Lakh as on March 31, 2025, an increase of 32.14% due to increase in retained earnings followed by incremental profit after tax during FY 2024-25 and

Qualified Institutions Placement during the year.

Total borrowings

The total borrowings of the group decreased from Rs.45,509.01 Lakh as on March 31, 2024, to 27,153.01 Lakh as on March 31, 2025.

Key Financial Ratios (Standalone)

Ratios	Numerator	Denominator	FY 25	FY 24	(%) Change	Reason for variance more than 25%
Current ratio (times)	Current Assets	Current Liabilities	1.59	1.43	11.59%	-
Debt equity ratio (times)	Total Borrowings	Total Equity	0.22	0.50	(56.00)%	Decrease mainly on account of reduction in borrowings during the financial year.
Inventory turnover ratio (times)	Cost of Goods Sold	Average Inventory	2.52	3.28	(23.17)%	-
Trade receivable turnover ratio (times)	Revenue from Operations	Average Trade Receivables	5.72	6.40	(10.63)%	-
Net profit ratio (%)	Net Profit After Tax	Revenue from Operations	2.29%	5.03%	(54.47)%	Decrease mainly on account of increase in expenses like cost of construction material consumed, depreciation and amortisation expenses , finance cost and other expenses during the year.
Interest coverage ratio	Earning Before Interest & Taxes	Interest cost	3.08	4.95	(37.86)%	Decrease mainly on account of reduction in earnings before interest and taxes due to increase in the cost of the constructions, depreciation and amortisation during the year.
Operating profit margin (%)	Earnings Before Interest & Taxes	Revenue from Operation	4.27%	7.99%	(46.55)%	Decrease mainly on account of increase in expenses like cost of construction material consumed, depreciation and amortisation expenses during the year.
Return on Net Worth	Profit After Tax	Net Worth (Share Capital + Reserves and Surplus)	4.67%	13.55%	(65.52)%	Decrease mainly on account of reduction in profit after tax during the year
Debtors turnover ratio	Revenue from Operations	Average Trade Receivables	5.72	6.40	(10.63)%

Economic risk

The companys business operations may be negatively impacted during periods of economic slowdown.

Mitigation: The company closely tracks economic trends to identify early signs of potential downturns in both the overall economy and the construction industry. This proactive approach allows timely implementation of risk- mitigation strategies. By diversifying its service portfolio and expanding its presence across multiple geographies, the Company effectively reduces its dependence on any single market and strengthens its resilience against economic slowdowns.

Currency risk

Volatility in foreign exchange rates may have a negative impact on the Companys earnings.

Mitigation: Currency risk exposure is limited for the Company due to its primary focus on the domestic market, providing a buffer against significant foreign exchange fluctuations.

Competition risk

Rising competition may lead to a decrease in the number of projects secured by the Company.

Mitigation: The company consistently secures new contracts, leveraging its deep expertise, strong brand reputation, enduring client relationships, and longstanding associations with government agencies and other stakeholders.

Financing risk

Difficulties in debt servicing and increasing financing costs may adversely affect the Companys operational performance.

Mitigation: The company aims to manage its debt efficiently by implementing a balanced working capital strategy, optimising debtor management, sustaining stable profitability and maintaining steady cash flow.

Competence risk

Delays or lapses in delivering high- quality construction could damage the Companys reputation.

Mitigation: Drawing on extensive experience in the construction industry and insights from recent projects, the company is well-positioned to anticipate potential challenges early and implement corrective measures to ensure timely project completion.

Human resource risk

The companys success may be jeopardized by difficulties in attracting and retaining skilled talent.

Mitigation: The companys human resource policy focuses on attracting and retaining top talent by providing continuous learning opportunities, fostering a supportive work environment, and promoting personal growth.

It emphasizes recruiting skilled professionals and retaining them through comprehensive development programs and ongoing support.

Technology risks

Technological obsolescence could adversely affect the companys growth prospects.

Mitigation: The company adopts advanced construction technologies that improve safety, efficiency and productivity in large-scale projects. Leveraging these innovations allows the company to deliver higher-quality work more quickly and cost-effectively.

Human resource management

At PSP, we consider our employees to be the foundation of the organisation.

We have implemented a comprehensive HR policy designed to align employee performance with the companys vision by prioritising talent development and continuously enhancing employee engagement. Strengthening our HR processes has allowed us to effectively manage a broader range of roles across the workforce. The adoption of darwinbox technology has automated many HR functions, including recruitment, employee classification by department, level, payment schedules, and other details, resulting in improved efficiency and faster HR response times.

Most employee records are now maintained digitally. Learning and development are central to our talent growth strategy, with training programs tailored for new hires to familiarise them with company systems and processes, as well as for existing employees to boost productivity. These programs utilise various formats such as instructor-led sessions, e-learning modules, and on-the- job simulations. The company fosters a healthy work environment and promotes open communication to maintain strong employee engagement.

The company encourages employees to participate in socio-economic initiatives aimed at supporting underprivileged communities. As of March 31, 2025, the companys workforce comprised 1948 employees. PSP emphasizes the importance of effectively managing industrial relations to achieve organisational goals and strictly adheres to all relevant regulations governing these relations.

Internal control and its adequacy

Internal financial controls refer to the policies and procedures adopted by the company to ensure:

• The orderly and efficient conduct of business, including compliance with company policies,

• Protection of assets,

• Prevention and detection of fraud and errors,

• Accuracy and completeness of accounting records, and timely preparation of reliable financial information.

The company has established a strong and effective internal control system designed to safeguard assets and ensure that all transactions are properly authorised, recorded, and reported.

This internal financial control framework is appropriately scaled to match the companys size and operations and complies with the requirements of the companies Act, 2013.

Management has approved and implemented policy documents and standard operating procedures that help various departments maintain accountability, accuracy, control, and transparency across the organisation. The Audit Committee approves the internal audit plan at the start of each financial year, which includes both internal control system audits and operational audits.

The internal control audits assess the adequacy of controls and reporting systems across functional areas such as purchasing, sales, accounting, human resources, administration, contracts, and other departments. Although the company does not have a dedicated internal audit department, an internal auditor conducts quarterly audits with assistance from process owners. The auditor presents a summary of key findings, management responses, and follow-up actions on previously identified issues to the Audit Committee. The committee reviews these reports, monitors managements corrective actions, and maintains ongoing communication with auditors to ensure the internal control systems remain effective.

The management discussion and analysis report, containing your Companys objectives, projections, estimates and expectations, may constitute certain statements, which are forward-looking within the meaning of applicable laws and regulations. The statements in this Management Discussion and Analysis Report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the governmental regulations, tax regimes, economic developments within India and globally and other incidental factors.