PSP Projects Ltd Management Discussions

Global economy

Global economy grew marginally at 3.4% in 2025 compared to 3.3% in the previous year, influenced by the US tariff shock of April 2025. Despite being partially unwound through subsequent trade deals, it left effective tariff rates well above pre2025 levels and heightened trade policy uncertainty.

Advanced economies witnessed a marginal growth from 1.8% in 2024 to 1.9% in 2025, while emerging market and developing economies demonstrated relative resilience, expanding by 4.4% in 2025 compared to 4.3% in 2024. Global inflation continued its multiyear downward trend in 2025, declining to an estimated 4.1% from 5.8% in 2024.

Regional growth (%)	2025	2024
World output	3.4	3.3
Advanced economies	1.9	1.8
Emerging and developing economies	4.4	4.3

(Source: IMF, un.org)

Performance of the major economies, 2025

Outlook

Given the challenge of forming stable, realtime assumptions for projections, the IMF World Economic Outlook report adopted a ‘reference forecast instead of a conventional baseline, assuming the war remains contained in duration, intensity, and reach, with disruptions easing by mid2026, in line with commodity futures as of March 10, 2026.

Under this reference view, global growth is projected at 3.1% in 2026 and 3.2% in 2027. Global inflation is expected to rise to 4.4% in 2026 before easing to 3.7% in 2027. (Source: OECD Interim Economic Outlook, IMF, World Economic Forum, Federal Reserve, Bank of England, European Central Bank, Bank of Japan)

Indian economy

The Indian economy grew at an estimated 7.6% in FY26 (official confirmation to follow after the Balance Sheet date), compared to 7.1% in FY25. This growth was driven by strong consumption and increasing investments, reaffirming Indias position as the fastestgrowing major economy.

Indias Real GDP at Constant Prices was estimated at H 322.58 Lakh Crore in FY 202526, against the First Revised Estimate of Rs. 299.89 Lakh Crore for FY 202425.

Growth of the Indian economy

	FY23	FY24	FY25	FY26E
Real GDP growth (%)	7.2	7.2	7.1	7.6

E: Estimated. Note: FY24 figure restated under new base year 2022–23. (Source: MoSPI (February 27, 2026))

Growth of the Indian economy quarter by quarter, FY 202526

	Q1FY26	Q2FY26	Q3FY26	Q4FY26E
Real GDP growth (%)	6.7	8.4	7.8	7.3

Note: Q2 revised upward from 8.2% and Q3 from 7.35% under the new base year 2022–23 series released February 27, 2026. Q4 remains an estimate. (Source: MoSPI, February 27, 2026)

Inflation, policy and currency dynamics

Inflation remained benign through much of FY26, with fullyear CPI estimated at an exceptionally low 2.1%. This created room for 125 basis points of cumulative rate cuts, supporting consumption and investment. However, macro stability was accompanied by currency volatility. The Indian rupee depreciated sharply by 9.88% during FY26 — its steepest fall since FY12 — touching Rs. 94.78 against the US dollar. This reflected global capital flows, a strong dollar environment, and geopolitical uncertainties.

Capital flows and market behaviour

Foreign portfolio investors remained riskaverse, withdrawing a record H1.8 trillion during FY26 – the largest outflow in 36 years. However, strong domestic institutional inflows of H8.55 trillion provided a crucial counterbalance, highlighting the growing maturity and depth of Indias domestic capital markets. Indias market capitalisation declined 7% year on year in FY26 to $4.5 trillion from $4.83 trillion in FY25, marking the sharpest drop since FY23. On the last trading day of the year, the BSE Sensex fell 5.36%, or 4,076.96 points, compared with a rise of 5.10%, or 3,763 points, in the same period last year, while the Nifty 50 declined 3.6%, or 834 points, against a gain of 5.34%, or 1,192 points, in the corresponding period. The downturn was largely driven by heightened geopolitical tensions in West Asia and investor concerns around potential traderelated policy developments in the US, which weighed on global sentiment.

Gold prices surged 61.47% during FY26 reflecting global risk aversion and safehaven demand.

Indias fiscal position continued to strengthen, with net direct tax collections rising 7.19% to H22.8 trillion as of March 17, 2026. Contributions from corporate and non corporate taxpayers remained nearly balanced, reflecting sustained formalisation of the economy, improved compliance, and the success of digitisation led reforms.

Banking sector

Indias banking sector reflected improving financial health, with the gross nonperforming asset ratio declining to a robust 2.1% as of September 2025, indicating stronger asset quality and disciplined lending practices. This stability was mirrored in profitability metrics, as scheduled commercial banks reported a return on assets of 1.3% and a return on equity of 12.5% during the first half of FY 202526, underscoring sustained operational efficiency and a healthier Balance Sheet trajectory.

Indias growth story

The tertiary services sector remained a key growth driver, expanding by 9.0% in FY26 and increasing its share in nominal gross value added to 54.3% from 52.8% in FY25, supported by broadbased momentum across segments.

During FY26, financial, real estate, IT and professional services grew by 9.9%, while trade, hotels, transport, communication and broadcasting recorded a strong 10.1% growth, and public administration and other services expanded by 5.8%.

At the same time, manufacturing demonstrated renewed strength, with Gross Value Added (GVA) rising 11.5% in FY26 at constant prices, marking the second instance of doubledigit growth in three years and improving from 9.3% in FY25.

The secondary sector grew 9.1%, accelerating from 8.0% in the previous year, driven by manufacturing alongside construction growth of 7.1%. This combination of servicesled scale and manufacturing acceleration is shaping a more balanced and resilient economic structure.

Consumption and investment

During FY26, Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) maintained above7% growth, reflecting a wellbalanced demand composition across household spending and investment activity.

Growth catalysts

Policyled consumption boost: The Union Budget FY27s tax relief measures—particularly income tax exemptions up to H12 Lakh—are expected to stimulate discretionary spending and reinforce consumptionled growth.

Anticipatory Pay Commission impact: The 8^th Pay Commission, though expected to be implemented from FY28, is already shaping consumer sentiment, creating a forward consumption impulse.

Monetary stability: The Reserve Bank of Indias calibrated stance, with the repo rate at 5.25%, balances inflation risks with growth support, ensuring macroeconomic stability.

Credit expansion: Improved banking health and liquidity conditions are expected to sustain strong credit growth across MSMEs, housing, and retail segments.

Fiscal prudence with growth focus: The Union Budget maintains fiscal discipline while prioritising infrastructure, MSME support, skilling, and innovation—key levers for longterm productivity.

Outlook

The year under review underscores a defining divergence: a world grappling with uncertainty, and an India navigating it with confidence.

In a global environment marked by fragmentation and caution, India stands out as a rare convergence of stability, scale and structural opportunity. The World Bank has revised its FY27 growth estimate upward to approximately 6.6%, reflecting resilient domestic momentum even as growth moderates from the previous year. India is expected to retain its position as the fastestgrowing major economy.

Growth will be shaped by a combination of strong domestic demand and resilient private consumption, supported by low inflation and GST rationalisation, alongside stable export performance with improved access to key markets. This momentum is further reinforced by sustained policy support, ongoing economic reforms, and a favourable demographic advantage.

While risks persist, particularly from elevated energy prices, subsidy pressures on government spending, and uncertainty in global demand, Indias macroeconomic fundamentals remain strong.

Over the medium term, sustained consumption, gradual investment recovery, and expanding global trade linkages are expected to reinforce Indias position as a key driver of global economic growth.

(Source: MoSPI, Business Standard, Press Information Bureau, Business Standard, IMF, OECD, Deccan Chronicle. NDTV Profit, Outlook Business, The Asian Banker)

Global construction industry

The construction industry is a core sector of the economy that involves the planning, design, development and building of physical infrastructure and assets. It includes residential, commercial, industrial and infrastructure projects such as buildings, roads, bridges, power plants and urban facilities. The industry plays a critical role in economic growth, employment generation and overall development by supporting industrial activity, urbanisation and social infrastructure.

Driven by population growth, urban expansion, government infrastructure spending, and technological advancements, the industry plays a key role in improving living standards and enabling economic activity. Construction market size has reached $16,456.84 Bn in 2025. It is expected to grow to $21,735.71 Bn in 2030 at a compound annual growth rate (CAGR) of 5.9%.

The estimation of 5.9% growth over the next five years reflects a slight reduction of 0.2% from the previous projection. This reduction is primarily due to the impact of tariffs between the US and other countries. This is poised to impact the US through tariffs on imported heavy machinery, raw materials, and construction tools from China and Mexico, which could slow project timelines and raise overall costs.

Rising construction activities fueling growth of construction market. Noteworthy emerging markets, such as China, Brazil, India, Saudi Arabia, and Indonesia, have exhibited robust construction undertakings. China leads the market with a growth rate of 14.9%, followed by India at 13.8%. France records a growth rate of 11.6%, while the UK shows 10.5% and the USA follows at 9.4%. The U.S. construction industry is expected to reach nearly $2 trillion by 2030, with residential, commercial, and public infrastructure projects leading the way. Japan continues investing heavily in infrastructure renewal, smart city tech, and earthquakeresistant buildings. Although growth is slower than in emerging markets, Japan remains one of the most stable and highspending regions. Germanys construction spending is also focused on green building, digital infrastructure, and housing. With sustainability being a priority, materials, smart systems, and energy efficiency dominate the agenda. With Vision 2030 in motion, Saudi Arabia is transforming its urban landscape. Projects like NEOM, The Line, and Red Sea tourism zones account for billions in projected spend. The market is primarily driven by the increasing adoption of datadriven technologies to enhance construction efficiency, reduce costs, and improve decisionmaking. China and India are at the forefront of growth, fueled by rapid urbanization and extensive infrastructure development. In developed economies like the USA, the UK, and France, the focus is on leveraging big data to optimize construction operations and improve overall performance and safety standards. Building construction firms are increasingly embracing green construction techniques to erect energyefficient structures while concurrently mitigating construction costs. Green construction involves utilizing sustainable building materials and construction processes to create environmentally friendly buildings with enhanced energy efficiency. The World Green Building Trends Survey indicates that approximately 60% of global construction firms are engaged in green construction projects.

Certifications such as Leadership in Energy and Environmental Design (LEED) empower construction companies to craft highperformance, sustainable residential and commercial buildings, offering various advantages from tax deductions to marketing opportunities. Additionally, green construction practices such as crossventilation for a more natural environment, the use of green construction software such as Construction Suite for ensuring green compliance, and the Green Globes management tool are gaining traction in the construction industry.

Major players in the construction market are actively pursuing innovative technologies, particularly automation, to elevate project efficiency, curtail costs, and attain a competitive advantage. An automated construction service center, serving as a centralized facility, leverages automation and technology to streamline diverse aspects of construction projects, encompassing scheduling, resource allocation, and communication.

(Source: The business research company, Business wire, Future market insights)

Indian construction industry overview

The Indian construction market size is estimated at USD 0.79 trillion in 2026, and is expected to reach USD 1.10 trillion by 2031, at a CAGR of 6.87% during the estimated period (20262031), underpinned by frontloaded public spending and deepening private capital pools. Accelerated highway contract awards, renewableenergy buildouts, and rapid datacenter expansion continue to anchor order books for large engineering, procurement, and construction (EPC) firms.

On the demand side, Tier2 and Tier3 cities are capturing a larger slice of metrorail and waterinfrastructure allocations, broadening the geographic base of activity. Sharper adoption of modular building systems, digitaltwin modeling, and greenbuilding retrofits is lifting productivity and helping contractors offset margin pressure from volatile bitumen and rebar prices. Meanwhile, ESGlinked lending thresholds introduced by the Reserve Bank of India are nudging midtier players toward tighter emissions reporting and recycledmaterial use, reshaping procurement strategies.

The residential segment is witnessing a surge in demand driven by a growing middle class and rapid population growth. The infrastructure sector is undergoing a significant transformation with substantial investments in transportation, energy, and utilities. Industrial construction is receiving a boost from the "Make in India" initiative, attracting significant foreign direct investment (FDI). Technological advancements, such as the use of drones for surveying and 3D printing for construction, are streamlining processes and improving efficiency.

(Sources: Yahoo finance, Data insights markets)

Residential construction

The Indian residential construction industry is undergoing a significant transformation driven by macroeconomic factors, government initiatives, and emerging industry trends. While inflation and rising material costs are increasing housing prices, the demand for affordable housing under PMAY remains strong, especially in tier2 and tier3 cities. At the same time, technological advancements such as AIdriven property management and modular construction methods are streamlining project execution.

Indias residential construction market size in 2026 is estimated at USD 286.38 Bn, growing from 2025 value of USD 268.40 Bn with 2031 projections showing USD 396.06 Bn, growing at 6.7% CAGR over 20262031. Rising urban migration, an enlarged public-sector housing budget, and steady private capital continue to underpin growth despite material cost volatility. Demand moves beyond tier1 centers as tier2 and tier3 cities gain infrastructure, while hybridwork models steer buyers toward larger homes with integrated workspaces.

The building materials market alone is projected to rise from US $105 Bn in FY2025 to US $166 Bn by FY2030 as demand for quality materials increase. The consumer electrical segment (wires, lighting, fans, switchgear) is estimated to reach US $18.5 Bn by 2030, supported by urban lifestyle changes and infrastructure development. Furniture and home decor markets are also expanding sharply, projected to grow from about US $38 Bn today to US $62 Bn by 2030 as consumers increasingly prioritise design, functionality and personalization.

Beyond core construction, adjacent product categories such as home security systems, paints and construction chemicals, and flooring materials are experiencing high growth rates, reflecting a broader maturation of the residential market. Overall, the sector is not only expanding in size but evolving in character — moving from basic housing delivery to experiencedriven, technologyenabled, and sustainable living solutions that align with the aspirations of Indias growing middle class.

Central allocations of H78,126 Crore (USD 9.41 Bn) for PMAY in FY 202526 mark a 64% rise over the prior year and expand the target to 3 Crore homes. Concurrently, the H15,000 Crore (USD 1.81 Bn) SWAMIH Fund 2 focuses on 1 Lakh delayed units, freeing developer cash flows and encouraging site restarts. GST remains at 1% for units below H45 Lakhs (USD 0.05 Mn), protecting affordability as steel and cement prices fluctuate.

(Sources: Yahoo finance, Mordor intelligence, Deloitte, Economic Times)

Commercial construction

The commercial construction sector in India is undergoing a transformation driven by rising demand for mixeduse spaces and gradeA office developments. However, inflation and high raw material costs put financial pressure on developers, while regulatory delays hinder project execution. Despite these challenges, the demand for premium office spaces, retail centers, and IT hubs remains strong, particularly in tier1 and tier2 cities.

Government initiatives such as Make in India and Startup India fuel office space demand, supported by tax incentives for Real Estate Investment Trusts (REITs) and foreign direct investment. Additionally, sustainability trends, including solarpowered commercial buildings and AIdriven property management, are shaping the future of commercial construction. Addressing the skilled labor shortage and improving regulatory efficiency will be critical to sustaining growth and ensuring longterm success in Indias commercial real estate sector.

The Indian commercial construction market, valued at US$ 733 Bn in 2025, is expected to exceed US$ 101.5 Bn by 2030, reflecting a compound annual growth rate (CAGR) of 7.8%. Ongoing government capital outlays of USD 135.1 Bn in FY 2025–26, paired with the Smart

Cities Missions USD 18.1 Bn project pipeline, continue to lift core demand. Liquidity from REITs, surging datacenter developments, and sustained private capital inflows sustain project momentum despite nearterm cost inflation. Developers refine supply chains and adopt digital sitemanagement tools to counter rising material costs while meeting tighter sustainability mandates. Across regions, the Indias commercial construction market reflects a pivot toward South Indias technology corridors even as West India retains scale advantages through deep capital pools and dense corporate occupancies. More than 7,500 smartcity projects worth USD 18.1 Bn have reached completion, and early successes in Agra and Pune demonstrate replicable models for mixeduse districts. Integrated command centers drive specialty demand for datarich operations buildings, while transit upgrades spur commercial clusters along new corridors. Landaggregation hurdles in smaller municipalities still delay timelines, prompting state governments to refine acquisition policies.

The office segment captured 61.5% of 2024 revenue, illustrating the primacy of global capability centers in metros like Bengaluru and Mumbai. Workspace densification, wellnessoriented designs, and precertified green cores now define premium absorption patterns. The Indias commercial construction market size for Office assets is set to advance at a steady clip as multinationals renew longterm commitments and domestic tech firms upscale headquarters footprints. Rising preference for touchdown areas and meetingrich layouts underpins fitout flexibility, while landlords deploy smart sensors to track utilization and cut operating expenses.

Industrial and logistics, energized by ecommerce and productionlinked incentives, exhibits the strongest 7.1% CAGR outlook. GradeA warehouses integrate solar rooftops, highbay automation, and coldchain nodes near consumption centers. Developers parcel lastmile hubs into multistory structures that optimize expensive urban land. The Indias commercial construction market harmonizes industrial sheds, crossdock facilities, and collaborative office pods within single parks to shrink tenant commute times and slash emissions. As supply chains regionalize, land acquisition along the Delhi–Mumbai freight corridor and Chennai–Bengaluru belt intensifies, further tilting the growth axis toward integrated industrial townships.

(Sources: Mordor Intelligence, Yahoo Finance)

Growth drivers

Rising urbanisation: Rapid urbanisation continues to drive demand for sustainable and modern infrastructure in Indias cities. India is urbanizing rapidly. By 2036, its towns and cities will be home to 600 Mn people, or 40% of the population, up from 31% in 2011, with urban areas contributing almost 70% to GDP.

Connectivity projects: Major connectivity projects continue to reshape regional transport like the Samruddhi Mahamarg Expressway (NagpurMumbai) significantly cuts travel time and aims to improve logistics efficiency, while incorporating ecofriendly measures such as extensive tree planting and solar power integration underscoring sustainability in infrastructure design. In Budget 2026–27, new corridors including proposed highspeed rail networks and expanded highways have been outlined as part of Indias infrastructure push, further strengthening intercity connectivity, and lowering travel bottlenecks.

Renewable energy expansion: Indias focus on achieving longterm sustainability has accelerated investments across solar, wind and hydropower projects, creating substantial opportunities for growth and capital deployment. After crossing 100 GW of solar power, the country is on track to reach 500 GW of clean energy by 2030 and netzero by 2070. By June 2025, India has installed 242.8 GW of nonfossil fuel installed capacity, including 233.99 GW of renewable energy and 8.8 GW of nuclear power. This now makes up 50.07% of the countrys total power capacity of 484.82 GW. Renewable energy alone has grown almost three times, from 76.37 GW in 2014 to 233.99 GW in 2025, showing a strong move toward a cleaner and sustainable future.

Expansion of digital infrastructure: Targeted investments in fibre networks, data centres and telecommunications are supporting Indias shift towards a digital economy. The growth of digital infrastructure is fostering industrial expansion and employment generation, while also providing impetus to related sectors such as real estate and logistics. Improved digital connectivity contributes to cost efficiencies, higher productivity and enhanced global competitiveness for businesses in India. As of January, 2025, Government E Marketplace has clocked a GMV of Rs. 4.09 Lakh Crore within 10 months of the fiscal Year 202425, which marks a growth of nearly 50% over the corresponding period last FY, 6.92 Lakh kms of optical fibre Cable has been laid as of January 2025, GeM has a network of 1.6 Lakh+ government buyers and over 22.5 Lakh sellers and service providers.

Foreign direct investments: FDI has played a crucial role in the development of the construction industry in India. With the governments efforts to promote ease of doing business, there has been a surge in FDI inflows in the construction sector. The construction sector is one of the largest contributors to Indias GDP and the construction industry is expected to reach $1.4 Tn by 2025.

Rising middle class and disposable incomes: Indias growing middle class is reshaping the landscape of the building construction market. With rising disposable incomes, better financial access, and increased aspirations, the demand for modern housing, lifestyleoriented communities, and better urban amenities has significantly increased.

Indias population is projected to surpass 1.5 Bn by 2030, with a rapidly expanding middle class. The middle class is expected to increase from around 300 Mn in 2020 to 600 Mn by 2030, driven by economic growth and rising incomes. The evolving lifestyle preferences are also driving demand for commercial real estatemalls, office spaces, and coworking environments tailored to professionals, entrepreneurs, and the retail sector. Even in smaller towns and cities, the aspirations of the middle class are prompting real estate developers to launch premium yet affordable projects.

Technological advancements and sustainable construction practices: Technology is playing a transformative role in Indias building construction industry. Innovations in construction methods, materials, and project management are enhancing efficiency, reducing costs, and enabling higherquality builds. One of the major shifts is the adoption of Building Information Modelling (BIM), which allows for detailed planning, coordination, and simulation before actual construction begins. This minimizes design errors, improves collaboration among stakeholders, and accelerates project timelines. Additionally, drones and AIbased tools are being used for site inspections, safety monitoring, and realtime progress tracking.

(Sources: Pib.gov.in, World bank, VJM Global)

Indian precast concrete market

Precast concrete is a construction material produced by casting concrete in a reusable mold or form offsite and then transporting it to its final location for installation. This method offers numerous advantages, including enhanced quality control, quicker construction timelines, and reduced onsite labor requirements. India precast concrete market size reached USD 4,589.1 Mn in 2025. The market is expected to reach USD 6,669.7 Mn by 2034, exhibiting a growth rate (CAGR) of 4.11% during 20262034. The increasing advances in manufacturing technologies, such as automation and robotics, which have improved the efficiency and quality of precast concrete production, are driving the market. The National Infrastructure Pipeline (NIP) was launched with projected infrastructure investment of Rs. 111 Lakh Crore over five years, from 20202025, creating substantial demand for precast solutions across highways, metro rail, airports, industrial corridors, and smart cities. As of 2025, the NIP covered 13,000 projects with a total cost of H 185 trillion, nearly half of which is concentrated in the transport sector.

The South region dominated the India precast concrete market with the largest revenue share of 25.65% in 2024, reflecting higher infrastructure development and construction activity in southern states.

Precast concrete technology enables faster construction with better quality control, reduced labor dependency, and minimal onsite disruption, making factorymanufactured precast components increasingly attractive amid acute shortages of skilled construction labor.

As urban centers expand, there is increasing pressure to deliver largescale residential, commercial, and infrastructure projects within tighter timelines. Precast construction can potentially reduce project timelines by 3050% compared to traditional methods.

The beams, slabs, columns segment dominated the Indian precast concrete industry with a revenue share of 38.56% in 2024, driven by increasing demand for speed and uniformity in construction. The 3D precast module, bus stops, toilet blocks segment is expected to grow at the fastest CAGR of 13.3% over the forecast period.

The precast concrete industrys current size is around $95 Bn where organized sector holds about 65%70%, while rest 31%36% being held by unorganized sector. With sustainability becoming a priority, precast concrete accompanies green building technology in the form of less energy consumption and material wastage. Government initiatives, such as the "Housing for All" scheme and Smart Cities Mission, have increased the demand for precast concrete in residential and commercial construction.

(Source: IMARC group, ICRA, Grand view research, 6wresearch)

Government initiatives

Initiatives like PM Gati Shakti, and UDAN, which are expanding highways, modernizing ports, and bringing air travel for common people. 95% of the total 8,063 projects under Smart Cities Mission completed, with Rs.1.64 Lakh Crore invested as on 11^th July, 2025. National Highways network has expanded from 91,287 km in 2014 to 1,46,342 km in 2025. Access Controlled National HighSpeed Corridors (HSC) increased from 93 km in 2014 to 2,636 km as on 30^th June, 2025. Chenab bridge worlds highest railway arch bridge and Anji bridge Indias first cablestayed rail bridge inaugurated on 6^th June, 2025. 144 Vande Bharat trains running as of 31^st July, 2025. Indias metro network grew from 248 km (2014) to 1,013 km (2025). India has invested Rs. 2.5 Lakh Crore (US$ 28.86 Bn) and built over 2,000 metro coaches domestically.

Indias maritime infrastructure has witnessed significant growth through port modernization, improved coastal shipping, and development of inland waterways. Port capacity doubled to 2,762 MMTPA. Indias civil aviation sector has undergone a remarkable transformation, becoming more inclusive, accessible, and technologically advanced 92 airports operationalized under UDAN as on July 2025. Over 1.53 Crore passengers flown under regional connectivity till 30^th June, 2025. Digi Yatra adopted in 24 airports; used over 5 Crore times.

Multi Modal Logistics Parks (MMLPs) are being developed to integrate warehousing, storage, and transport services at strategic hubs across India. A total of 35 locations—including Chennai, Bengaluru, Nagpur, and Indore, have been approved based on regional demand, with contributions from both public and private sectors. Five of these parks are projected to be operational by 2027, aiming to enhance logistics efficiency and reduce supply chain costs for a more businessfriendly ecosystem.

The Ministry of Railways is developing two Dedicated Freight CorridorsEastern (Ludhiana to Sonnagar) and Western (JNPT to Dadri) to handle heavy freight and ease pressure on passenger routes. Designed to cut transport costs and boost energy efficiency, over 96% of the 2,843 km network is operational as of March 2025. These corridors are set to drive industrial growth and generate jobs in logistics and allied sectors.

Opportunities

Rising housing demand: Indias housing demand is gaining momentum due to rapid urbanisation, shifting demographics towards nuclear families, rising aspirations and an expanding pool of firsttime buyers. The demand outlook remains strong, aided by economic recovery, accommodative mortgage rates, price stability and growth in household incomes.

Government support: The government continues to play a significant role in supporting the housing sector through focused policy initiatives such as the Pradhan Mantri Awas Yojana (PMAY) and the Housing for All mission. In addition, schemes such as the Credit Linked Subsidy Scheme (CLSS) under PMAY, the Affordable Rental Housing Complexes (ARHC) scheme for urban migrants, and the Pradhan Mantri Gramin Awaas Yojana (PMGAY) for rural housing have expanded access to affordable housing across income segments. Urban development initiatives like the Smart Cities Mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), and the Swachh Bharat Mission (Urban) further strengthen supporting infrastructure such as water supply, sanitation, and urban mobility, making housing projects more viable and sustainable. Additionally, government incentives such as infrastructure status to affordable housing, interest subvention schemes, and tax benefits for developers and homebuyers have improved financing access and boosted private sector participation.

Growth in infrastructuredriven Sectors: In India, growth in infrastructuredriven sectors continues to be a key driver for the construction industry. Increase investments in national highways, railways, metro rail projects, airports, power transmission, renewable energy, and water infrastructure are strengthening the sectors order inflows.

Threats

Regulatory and approval risk: Frequent policy updates, evolving compliance norms, and delays in land acquisition and statutory approvals can extend project timelines and increase holding costs.

External and force majeure risk: Natural disasters, pandemics, and macroeconomic disruptions can interrupt construction activity, disrupt supply chains, and weaken demand sentiment.

Liquidity and working capital risk: Milestonebased payments, extended receivable cycles, and retention clauses create uneven cash flows, increasing dependence on shortterm borrowings and raising finance costs.

Technology and productivity risk: Lower adoption of advanced construction technologies such as BIM, prefabrication, and digital project management tools can lead to inefficiencies, rework, and margin pressures.

Input cost and commodity price risk: Volatility in steel, cement, fuel, and other raw material prices—driven by global commodity cycles and currency fluctuations—can compress margins, particularly in fixedprice contracts.

Company overview

PSP Projects Limited, incorporated in August 2008, is a wellestablished construction company providing a diversified range of construction and allied services. The Company operates as a onestop solution provider, offering endtoend capabilities from planning and design to execution and postconstruction services.

Backed by a strong execution track record, PSP Projects has consistently delivered highquality projects within stipulated timelines across multiple industry segments. The Company leverages advanced construction technologies and bestinclass industry practices to enhance operational efficiency and project outcomes.

Its business focus spans industrial, institutional, and highprofile government projects, supported by longstanding customer relationships that have resulted in repeat business. The promoter brings over 40 years of industry experience, providing strategic direction and operational leadership.

Key strengths

Proven track record in project completion: The Company has built a strong reputation for timely and efficient project delivery, underpinned by wellstructured project management systems, active involvement of the promoter in key operations, and a sustainable competitive edge that enhances execution capabilities and client confidence.

Project completed in a year

FY20	23
FY21	23
FY22	17
FY23	22
FY24	17
FY25	13
FY26	21

Strong order book:

The Companys order book has grown significantly to Rs.13,447 Crore in FY 2025–26, up from H3,074 Crore in FY 201920, reflecting its strong project pipeline and sustained business growth.

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
FY26	RS.13,447 Crore

Longterm customer relationships: Driven by a strong commitment to quality and timely execution, the Company has developed enduring relationships with its clients. Consistent delivery of highquality construction solutions has resulted in repeat business from several reputed clients, many of whom have been associated with the Company for more than five years.

Integrated onestop solution: The Company provides endtoend construction services, encompassing planning and design, construction, interior fitouts, and postconstruction maintenance. This integrated service model ensures seamless coordination, cost efficiency, and timely completion of projects.

Experienced leadership and professional management: Led by a promoter with extensive experience in the construction industry, the Company continuously enhances its design, engineering, and execution capabilities. This leadership is complemented by a competent and multidisciplinary management team with expertise across design, engineering, finance, marketing, and human resources.

Strong financial performance: The Company has demonstrated consistent operational and financial growth, supported by sound business fundamentals. Sustained improvement in revenues and profitability reflects effective cost management, disciplined execution, and a scalable business model.

Diversified project portfolio: PSP Projects has a welldiversified presence across industrial, institutional, commercial, and government projects, reducing dependency on any single segment and providing resilience across business cycles.

Focus on technology and quality standards: The Company leverages modern construction technologies and adheres to bestinclass quality, safety, and compliance standards, enabling efficient execution, superior build quality, and enhanced client satisfaction.

The Adani partnership

Overview

FY 2025–26 represents a defining phase in PSP Projects evolution. During the year, Adani Infra (India) Limited acquired 34.41% of the Companys paidup equity capital through a structured transaction, comprising an open offer of 11.32% and acquisition of 23.09% from existing promoters, resulting in joint control alongside the founding promoters. This alliance brings together PSPs proven track record in technologyenabled construction delivery with the Adani Groups position as one of Indias leading infrastructure and energy platforms, spanning ports and logistics, energy and utilities, transport infrastructure, cement, defense, and industrial businesses.

Opportunity horizon

The Adani Group has announced a capital deployment programme exceeding H6 Lakh Crore over the next 5–7 years, with average annual capex of approximately H1.25–1.65 Lakh Crore. This positions PSP Projects at the center of one of the most significant infrastructure investment cycles in Indias modern history.

During the year, the proportion of Adani Group–linked projects in our order book rose meaningfully from 25% to 67%, enhancing revenue visibility while maintaining a diversified project portfolio across sectors. This evolving mix provides opportunities across multiple highgrowth segments, including:

Airport infrastructure development and modernization

Industrial parks, logistics hubs, and manufacturing facilities

Renewable energy projects and supporting grid infrastructure

Smart cities, institutional campuses, and integrated urban developments

Healthcare facilities, educational institutions, and public amenities

Sports and specialized infrastructure, including potential Commonwealth Gamesrelated projects

Key benefits

Enhanced order book visibility: Direct access to Adani Groups infrastructure pipeline provides multiyear revenue visibility and reduces business development uncertainty.

Diversified portfolio: Exposure across airports, industrial assets, energy infrastructure, urban development, and institutional projects reduces sectoral concentration risk.

Improved margin profile: Focus on projects within the Adani ecosystem are expected to support margin outcomes comparable to, or relatively better than, those observed in similar marketbased contracts.

Operational synergies: Integration with Adanis project timelines and procurement systems enables better resource planning and execution efficiency.

Technology adoption: Opportunity to deploy advanced construction methodologies, including precast technologies, at scale across multiple project types.

Strategic priorities

Our growth approach is anchored in a fundamental principle: capacity before scale. During FY 2025–26, our principal focus was preparation—strengthening the institutional architecture required to convert opportunity into predictable performance.

Key initiatives include:

Transitioning to integrated, solutionsoriented project execution

Deepening execution readiness for complex, largescale assignments

Building organizational strength for consistent delivery across diverse requirements

Investing in precast technologies to mitigate labor mobilization challenges

Strengthening governance frameworks aligned with expanded responsibility

Financial outlook

The Companys order inflow mix is expected to be supported by a significant contribution from the Adani Group, complemented by a selective and calibrated presence across nonGroup and government projects. This portfolio mix is expected to provide improved visibility, execution continuity and scale expansion over the medium term.

This positioning is expected to deliver superior financial performance from FY 2026–27 onwards:

Revenue scale is expected to strengthen from current levels, supported by the existing order book and execution pipeline.

Internal accruals expected to cover 90% of capital expenditure requirements

Focus on working capital optimization and prudent net debttoEBITDA management

Improved return on capital employed trajectory

Vision

India stands at the threshold of an infrastructure decade, a period of sustained investment in airports, industrial corridors, smart cities, energy ecosystems, and digital infrastructure. National ambition at this scale requires execution platforms that are not only capable but dependable; not merely fast but future ready.

PSPs responsibility in this partnership is twofold: to deliver projects with precision, and to build institutional capacity that sustains national development. The Adani alliance provides the platform; our execution capability, technological orientation, and commitment to institutional excellence will determine how effectively we convert this opportunity into lasting value for all stakeholders.

Categorywise performance

Industrial: The Company undertakes construction of industrial facilities catering to a wide range of manufacturing and processing industries, including food processing, pharmaceuticals, engineering and allied sectors. With extensive domain expertise and execution capabilities, it has consistently delivered highquality industrial and manufacturing infrastructure for reputed clients such as Nestl?, MRF, AMNS, IRIPL (The CocaCola Company), Wagh Bakri Group, Torrent, Nirma, Intas, Zydus Group, Cadila, Claris, KHS and Inductotherm, among others.

Institutional: The Company has a strong presence in institutional construction, encompassing hospitals, healthcare facilities, educational institutions, commercial complexes, hotels and corporate offices. Key projects executed include the Surat Diamond Bourse, Palladium Mall, IIM Ahmedabad, CEPT University, Ahmedabad University, BSE Brokers Forum at GIFT City, The Signature by Hirnandani Group, Maruti Hospital, Zydus Hospital, GCS Medical College and Hospital and CIMS Hospital, reflecting its capability to manage largescale and complex developments.

Residential: In the residential space, the Company executes projects for private real estate developers, including townships, group housing developments and independent residential units. These projects contribute to the development of modern, wellplanned and sustainable residential communities. Major completed projects includes Sky City at Shela,

Ahmedabad, Project ‘Aster and ‘Amogha at Shantigram, Ahmedabad.

Government: The Company selectively undertakes highvalue and prestigious government projects, leveraging its technical expertise and execution strength. Completed projects include the Kashi Vishwanath Corridor at Varanasi, Stateoftheart ‘Veer Savarkar sports complex at Ahmedabad, medical colleges and hospital at various locations for UPPWD, Stateoftheart Archeological Museum Project at Vadnagar, construction and interior works of Swarnim Sankul I and II, renovation works for the Gujarat Vidhan Sabha, development initiatives at the Sabarmati Riverfront in Ahmadabad, and interior works at Hotel Leela, Gandhinagar.

Standalone financial overview

	FY2526	FY2425	Variation (%)
Revenue from operations	2,98,945.24	2,46,828.01	21.11%
Other income	2,115.05	1,721.65	22.85%
Total income	3,01,060.29	2,48,549.66	21.13%
Cost of construction material consumed	1,06,016.82	77,412.87	36.95%
Changes in inventories of workinprogress	2,149.31	3,198.97	(32.81)%
Construction expenses	1,50,127.29	1,32,119.79	13.63%
Employee benefits expense	14,575.04	11,950.55	21.96%
Finance costs	4,523.79	4,422.34	2.29%
Depreciation and amortisation expense	8,654.28	7,265.12	19.12%
Other expenses	8,126.68	4,337.80	87.35%
Total expenses	2,94,173.21	2,40,707.44	22.21%
Profit before exceptional item and tax	6,887.08	7,842.22	(12.18)%

Revenue from operations

During the year ended March 31, 2026, on a Standalone basis, your Company registered revenues from operations of Rs. 2,98,945.24 Lakh as against Rs. 2,46,828.01 Lakh in FY 202425, an increase of 21.11%.

Other income

Other income for the year ended March 31, 2026, stood at Rs.2,115.05 Lakh as compared to Rs. 1,721.65 Lakh in FY 202425, an increase of 22.85%. It primarily constitutes interest income on fixed deposits, interest income from Subsidiary and Joint venture, Dividend income, Interest on mobilisation advance and other net gains. The increase is due to reversal of provision of loss on impairment of investment.

Cost and expenses

Cost of construction material consumed and changes in the inventories of finished goods, workinprogress. There was an increase of 34.18% 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 202526 were Rs. 14,575.04 Lakh, 21.96% increase from Rs. 11,950.55 Lakh in FY 202425. The increase was due to revision of salary and implementation of the Code on Social Security, 2020 (effective from 21^st November 2025).

Other expenses

Other expenses increased by Rs.3,788.88 Lakh in FY 202526 compared to the previous financial year. The other expenses mainly comprised rent, rates and taxes, insurance, repairs and maintenance, traveling and conveyance, legal and professional expenses, allowance for expected credit loss, donation etc.

Depreciation

Depreciation was Rs. 8,654.28 Lakh in FY 202526 compared to H 7,265.12 Lakh in FY 202425, an increase of 19.12% from the previous financial year. The increase was mainly due to addition to fixed assets.

Finance costs

Significant increase in finance cost by 2.29% in FY 202526 as compared to the previous financial year was due to interest on lease liabilities.

EBITDA margins

The EBITDA margin stood at 6.00% in FY 202526 compared to 7.21% in FY 202425.

Tax expenses

Tax expense in FY 202526 was Rs.1,658.48 Lakh compared to Rs. 2,196.60 Lakh in FY 202425.

Profit after tax

During the year under review, the profit after tax stood at Rs. 5,228.60 Lakh.

Net worth

The net worth of the Company increased from Rs. 1,20,873.73 Lakh as on March 31, 2025 to Rs. 1,26,051.90 Lakh as on March 31, 2026, an increase of 4.28%. The increase was mainly due to profit for the year.

Consolidated financial overview

Revenue from operations

Revenue from operations increased to Rs. 3,14,866.19 Lakh in FY 202526 compared to Rs. 2,51,212.57 Lakh in 202425.

Cost and expenses

There was an increase of 45.20% 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 increased to Rs. 14,575.04 Lakh in FY 202526 from Rs. 11,950.55 Lakh in FY 202425 due to revision of salary and implementation of the Code on Social Security, 2020 (effective from 21^st November 2025).

Profit after tax

The profit after tax decreased to Rs. 5,551.58 Lakh in FY 202526 from Rs. 5,641.80 Lakh in FY 202425.

Net worth

The net worth increased from Rs.1,20,894.03 Lakh as on March 31, 2025, to Rs. 1,26,395.19 Lakh as on March 31, 2026, an increase of 4.55% due to profit for the year.

Total borrowings

The total borrowings of the group increased from Rs. 27,153.01 Lakh as on March 31, 2025, to 31,722.55 Lakh as on March 31, 2026.

Key financial ratios (Standalone)

Ratios	Numerator	Denominator	FY 26	FY 25	(%) Change	Reason for variance more than 25%
Current ratio (times)	Current Assets	Current Liabilities	1.36	1.59	(14.47)%	NA
Debt equity ratio (times)	Total borrowings	Total Equity	0.25	0.22	13.64%	NA
Inventory turnover ratio (times)	Cost of Goods Sold	Average Inventory	3.25	2.52	28.97%	Increase mainly on account of increase in Revenue from Operations which lead to increase in cost of goods sold.
Trade receivable turnover ratio (times)	Revenue from Operations	Average Trade Receivables	4.37	5.72	(23.60)%	NA
Net profit ratio (%)	Net Profit After Tax	Revenue from Operations	1.75%	2.29%	(23.58)%	NA
Interest coverage ratio	Earnings Before Interest and Taxes	Interest cost	2.67	3.08	(13.32)%	NA
Operating profit margin (%)	Earnings Before Interest and Taxes	Revenue from Operation	3.11%	4.27%	(27.20)%	Decrease mainly on account of allowance for expected credit loss
Return on Net Worth	Profit After Tax	Net Worth (Share Capital + Reserves and Surplus)	4.15%	4.67%	(11.19)%

Risk and mitigation

Macroeconomic risk: The Companys operations are susceptible to adverse conditions arising from economic slowdowns, which may impact project awards and execution.

Mitigation: The Company continuously monitors macroeconomic and industry trends to identify early signs of stress. This enables timely adoption of appropriate mitigation measures. Further, diversification across services, sectors and geographies reduces dependence on any single market and enhances resilience during economic downturns.

Forex exposure risk: Fluctuations in foreign exchange rates could potentially affect earnings.

Mitigation: The Companys exposure to currency risk remains limited due to its predominant focus on the domestic market, thereby insulating operations from significant foreign exchange volatility.

Market intensity risk: Intensifying competition in the construction sector may impact the Companys ability to secure new projects.

Mitigation: The Company continues to win new contracts by leveraging its execution expertise, strong brand equity, longstanding client relationships, and established associations with government bodies and key stakeholders.

Liquidity and working capital risk: Extended receivable cycles, delayed client payments, and retention clauses may strain cash flows and increase dependence on shortterm borrowings. Mitigation: Strengthened receivables monitoring, milestonebased billing discipline, improved project certification processes, and active treasury management help maintain adequate liquidity buffers.

Delivery assurance risk: Delays or quality lapses in project execution could adversely impact the Companys reputation and performance.

Mitigation: Backed by extensive industry experience and learnings from past and ongoing projects, the Company proactively identifies execution risks and implements timely corrective actions to ensure adherence to quality standards and project timelines.

Talent continuity risk: The inability to attract and retain skilled manpower could affect the Companys growth and operational efficiency.

Mitigation: The Companys human resource strategy emphasizes talent acquisition and retention through continuous training, career development initiatives, a supportive work culture, and opportunities for professional growth.

Technology evolution risk: Rapid technological changes and obsolescence may impact competitiveness and growth prospects.

Mitigation: The Company actively adopts advanced construction technologies and best practices to enhance safety, productivity and execution efficiency, enabling delivery of highquality projects in a timely and cost effective manner.

Competitive Intensity Risk: Increasing competition in the construction and infrastructure sector may exert pressure on bidding margins and project acquisition.

Mitigation: Strong execution capabilities, established brand reputation, technical expertise, and longstanding client relationships support sustained order inflows.

Human resource management

At PSP Projects, its employees as a fundamental asset and principal catalyst for sustainable growth. The Company has instituted a robust human resource framework aimed at aligning individual performance with organizational objectives, with a strong emphasis on talent development and enhanced employee engagement. Continuous strengthening of HR processes has enabled effective management of an expanding and diverse workforce across functions and roles.

The implementation of the Darwinbox HR platform has led to significant automation of key HR activities, including recruitment, employee categorization by function and level, payroll scheduling, and maintenance of employee data, resulting in improved operational efficiency and quicker response times. A majority of employee records are now maintained in digital form, supporting transparency and process efficiency.

Learning and development form a critical component of the Companys people strategy. Structured training programmes are conducted for new employees to familiarise them with organisational systems and processes, while ongoing skill enhancement initiatives for existing employees are designed to improve productivity and performance. These programmes are delivered through a combination of classroom training, digital learning modules, and onthejob training. The Company promotes a positive and inclusive work environment, encouraging open communication and active employee participation. Employees are also encouraged to contribute to socioeconomic initiatives that support underprivileged communities. As on March 31, 2026, PSP Projects had a workforce strength of 2,383 employees. The Company places strong emphasis on maintaining harmonious industrial relations and remains fully compliant with all applicable labour laws and regulatory requirements.

Effectiveness and sufficiency of internal controls

The Companys internal financial control system is designed to ensure that operations are conducted in an efficient, transparent and wellgoverned manner. It focuses on maintaining the integrity of financial reporting, protecting assets and reducing the likelihood of frauds or errors through structured checks and balances. A strong emphasis is placed on ensuring that every transaction is properly authorised, systematically recorded and accurately reflected in financial statements. The overall framework is aligned with the size and nature of the business and complies with the provisions of the Companies Act, 2013 along with other applicable regulations.

To bring uniformity and discipline across the organisation, the Company has implemented comprehensive policy frameworks and standard operating procedures. These serve as guiding principles for all functions, enabling clarity in roles, improved accountability and consistent execution of processes. The internal audit function plays a key role in evaluating the effectiveness of these controls. Each year, the Audit Committee reviews and approves a structured audit plan that focuses on both financial and operational areas. Independent internal auditors conduct periodic reviews across departments such as finance, procurement, sales, human resources and administration, in coordination with respective teams.

Audit observations, along with managements responses and action plans, are placed before the Audit Committee for review. The Committee closely tracks the progress of corrective actions and ensures that gaps are addressed promptly. This ongoing monitoring mechanism helps the Company continuously strengthen its internal control systems and adapt to evolving business requirements.

Cautionary statement

The Management Discussion and Analysis Report contains statements regarding the Companys objectives, outlook, estimates and expectations, which may be considered forwardlooking statements under applicable laws and regulations. Actual results and performance may differ materially from those expressed or implied in such statements. Key factors that could influence the Companys operations include the availability and cost of raw materials, demand and pricing cycles in key markets, changes in government policies, regulatory and tax frameworks, economic conditions in India and globally, as well as other related and unforeseen factors.