Rajesh Power Services Ltd Management Discussions

Economic

Overview

The global economic landscape in 2024 reflected a measured tenacity as it navigated a complex web of geopolitical strains, high borrowing costs, and stubborn inflation. Growth patterns varied significantly across the world, with emerging economies gaining traction through strengthened consumer demand and resilient trade flows. In contrast, advanced nations experienced tempered momentum as central banks upheld restrictive policies to curb inflation. Nonetheless, a sense of cautious optimism prevailed as global supply chains regained equilibrium and energy markets edged towards a steadier ground, offering a modest lift to recovery efforts in several critical industries.

In FY 2024-25, India cemented its position as the worlds fastest-growing major economy, navigating a complex global landscape with remarkable resilience. Driven by robust domestic demand, strategic policy reforms and

a dynamic demographic profile, the nation has continued its trajectory towards becoming a global economic powerhouse.

Indias real Gross Domestic Product (GDP) is estimated to have grown by 6.5% in FY 2024-25, surpassing earlier forecasts. Nominal GDP also witnessed a significant rise of 9.8%, reaching an estimated ?331.03 lakh crore. This sustained momentum underscores the strength of Indias economic fundamentals. Projections for FY 2025-26 place growth in the range of 6.3% to 6.8%, solidifying Indias standing as a key global growth engine.

Retail inflation in India continued its declining trajectory, reaching a six-year low of 2.82% in May 2025. Food inflation, a significant component, also moderated to 0.99%. The Reserve Bank of India (RBI) has revised its inflation forecast for FY 202526 to an average of around 3.70%, with quarterly projections remaining within manageable levels. This benign inflation environment provides crucial headroom for monetary policy decisions.

OUTLOOK

The economic outlook for FY 2025-26 remains positive, with GDP growth expected to hold steady at 6.5%. This forecast is supported by accommodative policy measures, continued government-led capital expenditure, and strengthening macroeconomic fundamentals. The services sector is projected to remain robust, while the manufacturing sector is likely to benefit from declining energy costs.

The governments continued focus on fiscal consolidation, alongside targeted capital expenditure, provides a strong foundation for sustainable growth. However, risks from volatile oil prices, global geopolitical tensions and capital flow uncertainties remain and will require careful macroeconomic management.

Consumer Price Index (CPI) inflation is anticipated to ease further to 4%, assuming a normal monsoon and stable global commodity prices. However, potential reciprocal tariffs from the US could raise import costs, adding upward pressure on inflation. Indian policymakers are closely tracking global trade developments and stand ready to respond if needed.

The Reserve Bank of Indias recent 25 bps cut in the repo rate is expected to improve liquidity, lower borrowing costs, and provide a buffer against external economic headwinds.

Industrial

Overview

Power Sector

INDIAN POWER INDUSTRY

India ranks as the third-largest producer and consumer of electricity globally, with an installed power capacity of 476 GW as of June 2025. The power sector serves as a critical foundation for the countrys infrastructure, playing a vital role in driving economic growth and enhancing the standard of living nationwide.

The power transmission and distribution (T&D) sector is a crucial part of the electricity value chain, enabling the transport of electricity from power generation plants to end consumers, both residential and industrial.

It covers two key components: power transmission, which involves the high- voltage transport of electricity over long distances, and power distribution, which deals with the final step of delivering electricity to end users through lower- voltage networks.

Indian Power Transmission

As of March 31,2025, Indias transmission line network (220kV and above) stood at 4,94,374 circuit kilometres (ckm), reflecting a modest growth of 1.8% compared to 4,85,544 ckm a year earlier. Meanwhile, the countrys interregional power transfer capacity remained stable at 1,18,740 MW over the same period.

According to the latest data from the Central Electricity Authority (CEA), only 8,830 circuit kilometres (ckm) of new transmission lines were added in FY25- well below the planned target of 15,253 ckm. This marks the lowest annual addition since FY15.

The previous low was in FY20, when 11,664 ckm were added-partly due to the impact of the COVID-19 pandemic. Interestingly, even during FY21 and FY22, which were also affected by the pandemic, the average yearly addition hovered around 15,000 ckm.

Industry experts attribute the slowdown primarily to challenges related to Right of Way (RoW), with insufficient compensation to landowners being a major hurdle. In response, the Union Ministry of Power significantly revised land compensation rates in June 2024- a move expected to ease RoW-related bottlenecks in the future.

Notably, of the total 8,830 ckm added in FY25, a substantial 22% (1,950 ckm) was completed in March 2025 alone, the final month of the fiscal year.

The shortfall in additions was evident across all voltage levels-220kV, 400kV, and 765kV. The most significant gap was in the 765kV segment, where only 2,158 ckm were added against a planned 4,703 ckm- less than half the target.

Transmission line addition: FY24 and FY25

	By voltage class			By ownership			By network
	220kV	400kV	765kV	Central	State	Private	ISTS	InSTS	Total
FY24	5,996	6,088	2,119	3,938	6,993	3,272	6,283	7,920	14,203
FY25	3,718	2,954	2,158	2,586	4,761	1,483	3,253	5,577	8,830
% change	-38.0	-51.5	1.8	-34.3	-31.9	-54.7	-48.2	-29.6	-37.8

Transmission lines and sub-station capacity addition by 2026-27

Transmission System Type / Voltage Class	Unit	At the end of 2016-17 (31.03.2017)	Addition during 2017-22	At the end of 2021-22 (31.03.2022)	Likely addition during 2022-27	Likely at the end of 2026-27 (31.03.2027)
TRANSMISSION LINES
(a) HVDC ? 320 kV/ 500 kV/800 kV Bipole	ckm	15556	3819	19375	4300	23675
(b) 765 kV	ckm	31240	19783	51023	35005	86028
(c) 400 kV	ckm	157787	36191	193978	38245	232223
(d) 230/220 kV	ckm	163268	29072	192340	46027	238367
Total-Transmission Lines	ckm	367851	88865	456716	123577	580293
SUBSTATIONS
(a) 765 kV	MVA	167500	89700	257200	319500	576700
(b) 400 kV	MVA	240807	152306	393113	268135	661248
(c) 230/220 kV	MVA	312958	107679	420637	123305	543942
Total - Substations	MVA	721265	349685	1070950	710940	1781890
HVDC
(a) Bi-pole link capacity	MW	16500	14000	30500	12000	42500
(b) Back-to back capacity	MW	3000	0	3000	0	3000
Total- HVDC	MW	19500	14000	33500	12000	45500

An estimated expenditure of C4,75,804 crore would be required for implementation of additional transmission system in the country (transmission lines, sub-stations, reactive compensation etc.) during the period 2022-27.

EXPANSION OF TRANSMISSION NETWORK

• Infrastructure Development to Support Industrial Growth

• Advancing Renewable Energy Integration

• Enhanced Grid Monitoring Through SCADA

• Technological Upgradation for Improved Efficiency

• Development of High-Capacity Corridors

• Adoption of Smart Grid Technologies

• Electrification of Remote and Rural Areas

EMBRACING MODERNISATION AND DIGITAL INNOVATION

• Grid Digitisation and Automation

• Contribution to Green Energy Corridors

INDIAN POWER DISTRIBUTION

In FY 2024-25, Indias power distribution sector marked notable progress, highlighting the countrys ongoing efforts to ensure dependable and widespread access to electricity. One of the standout achievements was bringing down the energy supply shortfall to just 0.1%, a dramatic improvement from 4.2% in 2013-14.

Power availability also saw a substantial boost. In rural regions, daily electricity supply rose from 12.5 hours in 2015 to 21.9 hours by 2024. Urban areas improved as well, reaching an average supply of 23.4 hours per day. These gains reflect the positive impact of focused measures to upgrade and expand the distribution network across the country.

To execute these goals, the Revamped Distribution Sector Scheme (RDSS) was introduced with the aim of bringing down Aggregate Technical and Commercial (AT&C) losses to 12-15% across India by FY 2024-25. The scheme also targets the elimination of the gap between the Average Cost of Supply (ACS) and the Average Revenue Realised (ARR), thereby fostering financial stability and sustainability in the power distribution sector.

OTHER SCHEMES LAUNCHED BYTHE MINISTRY OF POWER

Integrated Power Development Scheme (IPDS): The Ministry of Power, Government of India, launched the Integrated Power Development Scheme (IPDS) on December 3, 2014, with the objective of strengthening subtransmission and distribution networks in urban areas.

Deendayal Upadhyay Gram Jyoti Yojana (DDUGJY): The DDUGJY was launched in December 2014 to carry out rural electrification works across the country.

Pradhan Mantri Sahaj Bijli Har Ghar Yojana - (Saubhagya): The Saubhagya scheme was launched in October 2017 with the aim of achieving universal household electrification by providing electricity connections to all un-electrified households in rural areas and all economically weaker households in urban areas across the country.

Ujwal Discom Assurance Yojana (UDAY):

UDAY is a scheme launched in November 2015 aimed at the financial turnaround of State Power Distribution Companies (DISCOMs), with the objective of enhancing their operational and financial efficiency.

Growth Drivers

ACCELERATING GROWTH THROUGH COMPETITIVE MARKET DYNAMICS

The transmission landscape has been increasingly shaped by Tariff-Based Competitive Bidding (TBCB), which encourages private participation and drives efficiency. Since its adoption, 135 interstate projects have been bid out, with 60 commissioned to date. Notably, private entities secured 74 projects, underlining a growing shift towards a more diversified and competitive sector. Leading players in the industry have emerged as key stakeholders in this dynamic ecosystem.

TECHNOLOGY-DRIVEN MODERNISATION

The sectors digital transformation is gathering pace, as utilities embrace predictive maintenance, AI and real-time monitoring. Innovations such as drone-

based inspections, thermal imaging and digital twins are enhancing asset visibility and decision-making. Powergrids initiatives, such as PG DARPAN and AI- enabled defect identification systems, showcase the integration of data science in grid operations, driving operational excellence and reducing downtime.

GRID PREPAREDNESS FOR RENEWABLE ENERGY INTEGRATION

A cornerstone of Indias energy future lies in its ability to integrate renewable energy seamlessly. To this end, Renewable Energy Management Centres (REMCs) have been established across key states and regions. Currently, these REMCs monitor over 62.5 GW of renewable capacity, providing critical inputs on generation forecasting, real-time imbalance management and grid situational awareness. This infrastructure plays a vital role in stabilising the grid amid the variability of solar and wind energy.

NEP-TRANSMISSION (2022-2032)

In October 2024, the National Electricity Plan (NEP) for Transmission laid out a robust roadmap for the decade ahead. With a projected investment exceeding ?9 trillion, the plan envisions the addition of nearly 191,500 ckt km of transmission lines and 1,274,185 MVA of transformation capacity by 2031-32. The plan also targets 66,750 MW of HVDC capacity, significantly enhancing long-distance power evacuation capabilities.

Additionally, 30,690 MW of new interregional transmission capacity is slated for the 2022-27 period, further bolstering grid integration across Indias diverse geographic zones.

Challenges and Forward-Looking Interventions

Despite notable progress, sector continues to face a range of structural and operational challenges. These include persistent cost overruns and project delays caused by inaccurate estimations, scope changes, and regulatory hurdles. To address these challenges, EPC companies are increasingly adopting digital tools, ERP systems, and AI-driven project monitoring to improve visibility and execution control. Further, quicker commissioning of renewable projects relative to transmission infrastructure often creates bottlenecks in energy evacuation. To address this, initiatives are underway to deploy VSC-based HVDC systems, FACTS devices, and energy storage solutions, such as battery and pumped-hydro systems. The Central Electricity Authoritys (CEA) updated Transmission Planning Criteria Manual aligns with global best practices, offering a comprehensive guide for planning resilient and future-ready infrastructure.

SWOT Analysis (Sector)

Strengths	Weaknesses
Extensive national transmission & distribution (T&D) infrastructure	High Aggregate Technical & Commercial (AT&C) losses
Strong government policy and regulatory support	Financially weak discoms with poor creditworthiness
Technological advancements (smart meters, SCADA, GIS, digital substations)	Ageing and overloaded infrastructure, especially in rural areas
High interregional transmission capacity (118,740 MW)	Inadequate demand forecasting and load planning capabilities
Increasing private participation through TBCB
Opportunities	Threats
Integration of large-scale renewable energy	Land acquisition and right-of-way (RoW) challenges
Development of smart grids and real-time digital management systems	Cybersecurity vulnerabilities due to increasing digitalisation
Growth in decentralised energy (rooftop solar, microgrids)	Climate-induced grid disruptions (storms, floods, heatwaves)
Energy storage and flexible grid solutions (battery/pumped hydro)	Regulatory and tariff instability discouraging investment
Private sector entry into distribution (franchisee/PPP models)	Rising costs and global supply chain issues impacting key equipment availability

Conclusion

The sector is poised for a transformative leap. With strategic investments, policy support and private sector participation, the grid is being redesigned not just for capacity, but for intelligence, agility and sustainability. As India targets a cleaner and more inclusive energy future, the transmission and distribution network will play a crucial role in delivering power reliably, efficiently, and equitably to every corner of the country.

Source

https://www.grandviewresearch.com/horizon/outlook/power-transmission-and-distribution-market/india

https://www.eqmagpro.com/indias-power-demand-to-grow-5-5-in-fy26-icra-eq/

https://economictimes.indiatimes.com/industry/energy/power/india-to-see-over-rs-9-lakh-cr-spending-on-power-transmission-infra-by-2032/articleshow/115736936.

cms?from=mdr

https://www.energetica-india.net/news/india-finalises-national-electricity-plan-targets-458-gw-peak-demand-by-2032

https://powerline.net.in/2024/12/05/strong-demand-government-schemes-and-initiatives-driving-growth/#:~:text=National%20Electricity%20Plan%20%E2%80%93%20

Transmission&text=According%20to%20the%20plan%2C%20between,the%20end%20of%202031%2D32.

Company

Overview

Rajesh Power Services Limited (RPSL) is a leading Indian company in the power infrastructure sector, providing comprehensive solutions across both renewable and non-renewable energy segments. With a rich history spanning over five decades, RPSL has established itself as a trusted partner for government and private sector clients, specialising in engineering, procurement, and construction (EPC) services, as well as operations, maintenance, and consultancy.

Founded on May 5, 1971, as a partnership firm named "Rajesh Traders," the company has undergone significant evolution.

In February 2010, it transitioned into a private limited company, "Rajesh Power Services Private Limited," and subsequently became "Rajesh Power Services Limited" on June 26, 2024. This progression reflects its continuous growth and adaptation to the dynamic energy landscape.

The Companys robust execution capabilities, backed by a skilled workforce and strong project management practices, have enabled it to deliver complex and large-scale projects on time and within budget.

A strong focus on innovation, safety and sustainability underpins RPSLs operations. The company continually invests in modern technologies and smart grid solutions to meet evolving client needs and support Indias energy transition.

With an unwavering emphasis on quality, compliance, and customer satisfaction, Rajesh Power Services Limited has built enduring relationships with government bodies, utilities, and private sector clients. The company remains committed to powering growth, enhancing lives and enabling sustainable energy solutions nationwide.

Financial

Performance

(Rs in Crore)

Particulars	FY25**	FY24*	Change(%)
Revenue from Operations	1,107.44	284.97	288.62%
Total Income	1,114.66	295.06	277.77%
EBITDA (excluding other income)	133.75	34.94	282.79%
EBITDA Margin (excluding other income)	12.08%	12.26%	-0.1838%
Profit Before Tax	123.12	34.06	261.44%
Profit After Tax	93.37	26.02	258.89%
PAT Margin	8.43%	9.13%	-0.6982%

* FY24 financial numbers are on a Standalone basis

** FY25 financial numbers are on a consolidated basis on account of the conversion of HKRP Innovations Limited (earlier known as HKRP Innovations LLP) from a limited liability partnership to a public limited company as on July 20, 2024. RPSL holds a 25.48% stake in HKRP Innovations Ltd.

Reason for Changes in Financial Performance

The increase in revenue was driven by strong execution capabilities, a healthy and growing order book, and our continued focus on delivering value. We effectively capitalised on the momentum in Indias infrastructure development and leveraged our EPC strengths to complete key projects ahead of schedule and with high-quality standards.

Financial Ratio

Particulars	FY 2024-25	FY 2023-24	% Change
Inventory Turnover Ratio	16.89	5.66	198.41
Current Ratio	1.58	1.58	0.00
Debt-Equity Ratio	0.21	0.92	-77.17
Debtors Turnover	5.12	2.98	71.81
Operating Profit Margin	11.97	12.02	-0.42
Return on Net Worth	35.44	30.86	14.84
Interest Coverage Ratio	17.02	5.66	200.71

Internal Control System & Its Adequacy

Internal control is an integral component of the Companys governance framework, providing a structured approach to effective management, oversight and accountability.

The Company has established a robust internal control system designed to mitigate risks and facilitate the successful execution of its strategic goals. This system comprises well-defined policies, procedures and standard operating practices, all tailored to align with the Companys unique operational environment.

Particular attention is given to controls over financial reporting, ensuring the accuracy, completeness and reliability of financial data. These controls play a critical role in the Companys overall governance and compliance mechanisms.

Human

Resources

RPSLs people-first philosophy and strong leadership have played a crucial role in maintaining business continuity while safeguarding employee well-being. The Companys unwavering focus on creating a safe, healthy and engaging work environment has nurtured a committed and high-performing workforce.

Recognising that continuous learning is vital in a dynamic industry, RPSL places significant emphasis on employee development. Through a range of structured training programs, the Company empowers its employees with the skills and expertise needed to thrive and adapt. This strategic investment in talent has enabled RPSL to attract, retain, and grow exceptional professionals consistently.

RPSLs comprehensive human resource initiatives and progressive people management practices underscore its commitment to employee satisfaction and well-being. By fostering career growth, supporting skill enhancement and promoting holistic well-being, the Company has cultivated a culture of trust and long-term engagement.

As of March 2025, RPSLs workforce stands at over 1,323 employees, reflecting its success in building a resilient and future- ready team.

Risk Management

The modern industrial landscape is dynamic and challenging, with businesses facing increasing interconnectedness, strict regulations, environmental concerns, geopolitical shifts and rapid technological advancements. All these factors impact a Companys performance and long-term sustainability.

RSPL stays ahead of these challenges by continuously monitoring its risk profile and keeping its risk register up to date. Crucially, we regularly inform the Board of Directors and senior management about our risk management activities, enabling them to make well-informed decisions and provide effective oversight.

RPSL adopts a multi-pronged approach to mitigate risks across its operations. Regulatory changes are addressed through active policy engagement and a specialised compliance team, ensuring projects adapt swiftly to new frameworks. To counter execution risks like supply chain disruptions, the Company employs milestone-driven project management, real-time digital monitoring, and contingency buffers. a

Financial volatility from input costs or receivables is managed via diversified funding and working capital optimisation. Workforce challenges are tackled through upskilling initiatives, succession planning, and competitive retention programs, fostering a future-ready talent pipeline.

For EHS risks, RPSL enforces stringent compliance with regular audits, ISO- certified systems, and safety culture programs across sites. This integrated risk framework, combining regulatory agility, operational resilience, financial prudence, and human capital investment, ensures project viability while safeguarding profitability and reputation. By anticipating disruptions and embedding adaptive measures, RPSL sustains growth even in dynamic environments.